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EXHIBIT 2.1
EXCHANGE OFFER AGREEMENT
BETWEEN
UNITED PAN-EUROPE COMMUNICATIONS N.V.
AND
SBS BROADCASTING S.A.
Dated as of March 9, 2000
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EXCHANGE OFFER AGREEMENT
EXCHANGE OFFER AGREEMENT (this "AGREEMENT"), dated as of March
9, 2000, by and between United Pan-Europe Communications N.V., a public limited
liability company (naamloze vennootschap) organized and existing under the laws
of The Netherlands ("PURCHASER") and SBS Broadcasting S.A., a public limited
liability corporation (societe anonyme) organized and existing under the laws of
Luxembourg (the "COMPANY"). Capitalized terms have the meanings ascribed to them
throughout this Agreement or in Section 9.11 of this Agreement.
W I T N E S S E T H :
WHEREAS, each of the Board of Supervisory Directors and the
Board of Managing Directors of Purchaser and the Board of Directors of the
Company have determined that this Agreement and the transactions contemplated
hereby are advisable and fair to, and in the best interests of, each corporation
and its respective shareholders in order to promote the long term strategic
interest of each of them;
WHEREAS, the Board of Directors of the Company has adopted
resolutions approving this Agreement and the transactions contemplated hereby,
including the Offer (as defined herein), and has agreed to recommend that the
Company's shareholders accept the Offer and tender their Shares (as defined in
the "Definitions" section) in the Offer;
WHEREAS, the shares of common stock of the Company are listed
on the AEX-Stock Exchange and on NASDAQ, and the Ordinary Shares A of Purchaser
are listed on the Amsterdam Stock Exchange and American Depositary Shares
representing Ordinary Shares A of Purchaser are listed for quotation on the
NASDAQ National Market;
WHEREAS, the Company is a "foreign private issuer" as such
term is defined in Rule 3b-4(c) under the Exchange Act;
WHEREAS, Purchaser holds as of the date of this Agreement
6,000,000 Shares representing approximately 18% of the Shares on a fully-diluted
basis;
WHEREAS, Purchaser intends to commence an offer for all of the
Shares, including an offer in the United States for Shares held by U.S. holders;
WHEREAS, as a condition and inducement to Purchaser's
willingness to enter into this Agreement, Purchaser and certain holders of
Shares are simultaneously entering into Share Exchange Agreements pursuant to
which such holders have agreed to tender their Shares in the Offer, subject to
the terms and conditions contained therein;
WHEREAS, Purchaser and the Company desire to make certain
representations, warranties, covenants and agreements in connection with this
Agreement.
NOW THEREFORE, in consideration of the mutual covenants and
agreements set forth herein, the parties hereto agree as follows:
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ARTICLE I THE OFFER 2
Section 1.01. The Exchange Offer 2
Section 1.02. Company Actions 7
Section 1.03. Shareholder Lists 8
Section 1.04. Directors 8
Section 1.05. Standstill Agreement 9
Section 1.06. Minority Buy-Out 9
ARTICLE II TREATMENT OF OPTIONS 9
Section 2.01. Treatment of Options 9
ARTICLE III PAYMENT FOR SHARES TENDERED 11
Section 3.01. Prompt Payment 11
Section 3.02. Transfer Taxes 11
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE COMPANY 11
Section 4.01. Organization and Qualification 11
Section 4.02. Capitalization 12
Section 4.03. Authority for this Agreement 13
Section 4.04. Consents and Approvals; No Violation 13
Section 4.05. Reports; Financial Statements 14
Section 4.06. Absence of Certain Changes 15
Section 4.07. Schedule 14D-9 and Offer Documents 15
Section 4.08. Brokers 15
Section 4.09. Employee Benefit Matters 15
Section 4.10. Litigation, etc. 17
Section 4.11. Tax Matters 17
Section 4.12. Compliance with Law; No Default 18
Section 4.13. Intellectual Property 18
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Section 4.14. Title to Properties. Entire Business 18
Section 4.15. Convertible Notes and Warrant 18
Section 4.16 Foreign Private Issuer 19
Section 4.17. Material Contracts 19
Section 4.18. Related Party Transactions 19
ARTICLE V REPRESENTATIONS AND WARRANTIES OF PURCHASER 19
Section 5.01. Organization and Qualification 19
Section 5.02. Authority for this Agreement 19
Section 5.03. Capitalization 20
Section 5.04. Reports; Financial Statements 20
Section 5.05. Absence of Certain Changes 21
Section 5.06. Litigation, etc 21
Section 5.07. Compliance with Law; No Default 21
Section 5.08. Offer Documents 22
Section 5.09. Consents and Approvals; No Violation 22
Section 5.10. Brokers 23
Section 5.11 Available Funds 23
ARTICLE VI COVENANTS 23
Section 6.01. Conduct of Business of the Company 23
Section 6.02. No Solicitation 26
Section 6.03. Access to Information 27
Section 6.04. Reasonable Best Efforts 28
Section 6.05. Legal Challenges 28
Section 6.06. Notification of Certain Matters 28
Section 6.07. Press Releases 29
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Section 6.08. Cross-Media Ownership 29
Section 6.09. Accountants' Comfort Letters 29
Section 6.10. Indemnification; Directors' and Officers' Insurance 29
ARTICLE VII INTENTIONALLY LEFT BLANK 30
ARTICLE VIII TERMINATION; AMENDMENT; WAIVER 30
Section 8.01. Termination 30
Section 8.02. Effect of Termination 31
Section 8.03. Fees and Expenses 31
Section 8.04. Amendment 32
Section 8.05. Extension; Waiver; Remedies 33
ARTICLE IX MISCELLANEOUS 33
Section 9.01. Survival of Representations and Warranties 33
Section 9.02. Entire Agreement; Assignment 33
Section 9.03. Enforcement of the Agreement; Jurisdiction 33
Section 9.04. Validity 34
Section 9.05. Notices 34
Section 9.06. Governing Law 36
Section 9.07. Descriptive Headings 36
Section 9.08. Parties in Interest 36
Section 9.09. Counterparts 36
Section 9.10 Adjustment to Purchaser Shares 36
Section 9.11. Certain Definitions 37
EXHIBIT A CONDITIONS TO THE OFFER 42
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ARTICLE I
THE OFFER
SECTION 1.01. THE EXCHANGE OFFER.
(a) (i) Provided that this Agreement shall not have been
terminated in accordance with Section 8.01 and that none of the events
set forth in EXHIBIT A hereto shall have occurred or be existing,
Purchaser shall as promptly as practicable after the declaration by the
U.S. Securities and Exchange Commission (the "SEC") that the
Registration Statement to be filed by Purchaser on Form S-4 relating to
Ordinary Shares A (including American Depositary Shares representing
such Ordinary Shares A) to be issued by Purchaser (the "PURCHASER
SHARES") in the Offer (the "FORM S-4"), has become effective, commence
(within the meaning of Rule 14d-2 under the Exchange Act) an exchange
offer (the "OFFER") for all the Shares at a per-share consideration
consisting of US$40 of cash and the Number of Purchaser Shares (as
defined below) and Additional Cash (as defined below) ("OFFER PRICE").
No holder of Shares shall be entitled to receive fractional Purchaser
Shares, and if any such holder would otherwise be so entitled, then
such holder will receive cash without interest in lieu of such
fractional share, determined by multiplying the fractional interest in
Purchaser Shares to which such holder would otherwise be entitled
(after taking into account all Shares of the Company then held of
record by such holder) by the closing sale price of a Purchaser Share
as reported on NASDAQ on the Closing Date.
(ii) The "NUMBER OF PURCHASER SHARES" will be determined
as follows:-
(A) If the average closing sale price of Purchaser Shares on
NASDAQ for the 10 trading days prior to the Consideration Calculation
Date (as defined below) (the "AVERAGE PRICE") is equal to or greater
than US$210 but less than US$241.50 then there will be no Additional
Cash (as defined below) and the Number of Purchaser Shares per Share
will equal 0.1904762 per Share (the "INITIAL EXCHANGE RATIO")
(B) If the Average Price is equal to or greater than
US$241.50 then there will be no Additional Cash and the Number of
Purchaser Shares per Share will equal the result of US$46 divided by
the Average Price.
(C) If the Average Price is less than US$210 but more than
US$168 then there will be no Additional Cash and the Number of
Purchaser Shares per Share will equal the result of US$40 divided by
the Average Price.
(D) If the Average Price is equal to or less than US$168 but
greater than US$147 then there will be no Additional Cash and the
Number of Purchaser Shares per Share will be equal to an amount
calculated as follows: ($40 - ($168 - Average Price) x 0.119047619)
divided by the Average Price.
(E) If the Average Price is equal to or less than US$147 then
the Number of Purchaser Shares per Share will be 0.255102 (the "SECOND
EXCHANGE RATIO") plus a mixture of additional Purchaser Shares and
additional cash ("ADDITIONAL CASH")
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determined by the Purchaser which mixture has, together with the
0.255102 Purchaser Shares, an aggregate value (calculating the part (if
any) comprised of Purchaser Shares at the Average Price) equal to
US$37.50.
If the Purchaser has a choice pursuant to Section
1.01(a)(i)(E)) to issue Purchaser Shares or pay Additional Cash it will
give notice to the Company of its choice.
The term "CONSIDERATION CALCULATION DATE" means the
third US Business Day prior to the commencement date of the Offer.
The term "EXCHANGE RATIO" means the number of Purchaser
Shares issued in respect of each Share expressed as a decimal after
taking account of all the adjustments required pursuant to Section
1.01(a)(i) and 1.01(a)(ii).
Notwithstanding the foregoing, if the average closing
sale price for Purchaser Shares on NASDAQ for any consecutive period of
ten trading days after the date hereof and prior to the Consideration
Calculation Date is equal to or less than US$147 (a "TRIGGER EVENT")
then the Purchaser may within two US Business Days following the end of
that period of the first occasion on which that event occurs elect by
giving notice to the Company to treat this Agreement as terminated and
if the Purchaser does not do so within such period it will not
thereafter be entitled to do so on any subsequent Trigger Event.
(iii) A three-for-one share split (the "SHARE SPLIT") of
Purchaser Shares is proposed to take effect following an affirmative
vote of the shareholders of Purchaser at an extraordinary general
meeting scheduled for March 13, 2000. Should the Share Split be
effected, then following the Share Split, the Initial Exchange Ratio,
the Second Exchange Ratio and the number 0.119047619 in Section
1.01(ii)(D) will be adjusted by multiplying them by three and the
various prices for Purchaser Shares of US$210, US$241.50, US$168, and
US$147 set out in Section 1.01(a)(ii) will be divided by three, and any
other terms of this Agreement, including the formula set forth in
Section 1.01(a)(ii)(D), will be adjusted appropriately to give effect
to the Share Split.
(iv) Company shareholders validly accepting the Offer may
elect to receive more cash than they would otherwise be entitled
pursuant to the terms set out in Section 1.01(a)(i) and 1.01(a)(ii)
above (the "BASIC TERMS"). Such elections shall be satisfied in full if
sufficient cash is available as a result of other Company shareholders
accepting the Offer electing to receive additional Purchaser Shares and
thereby releasing cash to which they would otherwise be entitled under
the Basic Terms. If the amount of cash so made available is
insufficient to satisfy in full all elections for additional cash then
such elections shall be scaled down pro rata as nearly as practicable
and the balance of consideration shall be satisfied under the Basic
Terms. Company shareholders validly accepting the Offer may elect to
receive more Purchaser Shares than they would otherwise be entitled
pursuant to the Basic Terms. Such elections shall be satisfied in full
if sufficient Purchaser Shares are available as a result of other
accepting Company Shareholders electing to receive additional cash and
thereby releasing Purchaser Shares to which they would otherwise be
entitled under the Basic Terms. If the amount of Purchaser Shares so
made available is insufficient to satisfy in full all elections for
additional Purchaser Shares then such elections shall be scaled down
pro rata as nearly as
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practicable and the balance of consideration shall be satisfied under
the Basic Terms (the elections in this paragraph are referred to as the
"MIX AND MATCH ELECTION"). The basis on which cash will be forgone for
Purchaser Shares pursuant to the Mix and Match Election and vice versa
will be determined by valuing Purchaser Shares at the Average Price.
Shareholders will forego cash for Purchaser Shares of equal value on
that basis and vice versa. In no event shall any Company shareholder be
entitled to receive as a result of the Mix and Match Election an
aggregate amount of cash and Purchaser Shares that exceeds in value at
the Average Price the Basic Terms. The Purchaser shall deposit the
amount of cash and Purchaser Shares payable pursuant to the Basic Terms
with an exchange agent or agents selected by Purchaser, with the
Company's prior approval, which shall not be unreasonably withheld (the
"EXCHANGE AGENT"), prior to or on the Closing Date. The Exchange Agent,
after consultation with Purchaser and the Company, shall make all
computations to give effect to this Section and will pay or distribute
to holders of record of Shares who have validly accepted the Offer
first the cash due to them and then on the same day the Purchaser
Shares promptly after the Closing Date.
(v) The obligation of Purchaser to consummate the Offer and
to accept for payment and to pay for any Shares tendered pursuant
thereto shall be subject to those conditions set forth in EXHIBIT A
hereto (the "OFFER CONDITIONS"), any of which may be waived by
Purchaser in its sole discretion. The initial expiration date of the
Offer shall be the twentieth (20th) U.S. Business Day following the
commencement of the Offer (determined in accordance with Rule
14d-1(g)(3) under the Exchange Act). Purchaser expressly reserves the
right to modify the terms of the Offer, except that, without the prior
written consent of the Company, Purchaser shall not (A) decrease the
Offer Price or change the form of the consideration payable in the
Offer, (B) decrease the number of Shares sought pursuant to the Offer,
(C) impose additional conditions to the Offer, (D) change the
conditions to the Offer (any of which may be waived by Purchaser in its
sole discretion) or (E) make any other change in the terms of the Offer
which is adverse to the holders of Shares.
(vi) Subject to the terms and conditions of this Agreement and
to the satisfaction or waiver of the Offer Conditions as of any
scheduled expiration of the initial offering period of the Offer,
Purchaser shall accept for payment and pay for Shares validly tendered
and not withdrawn pursuant to the Offer as soon as practicable after
such scheduled expiration, which, in the case of payment for Shares
listed on the AEX-Stock Exchange, shall occur three Amsterdam Exchange
Days after the expiration of the Offer. The date on which such
acceptance and payment shall first occur is referred to herein as the
"CLOSING DATE." Notwithstanding the foregoing, Purchaser may, without
the consent of the Company, (A) extend the initial offering period of
the Offer if at any scheduled expiration of the initial offering
period, any of the Offer Conditions has not been satisfied or waived,
(B) extend the Offer for any period required by any regulation of the
SEC or any foreign governmental regulatory authority applicable to the
Offer or (C) extend the Offer on one or more occasions (but not beyond
September 30, 2000) if on any expiration date permitted hereunder there
shall not have been validly tendered and not properly withdrawn prior
to such expiration that number of Shares which, together with any
Shares beneficially owned by Purchaser or any of its affiliates,
represents at least 90% of the total outstanding Shares on a
fully-diluted basis. Notwithstanding the foregoing, if requested by the
Company, Purchaser shall extend the initial offering period (i) for an
aggregate period of not more than 10 U.S. Business Days if at any
scheduled expiration
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of the initial offering period any of the Offer Conditions have not
been satisfied or waived and all such conditions are reasonably capable
of being satisfied and (ii) for an aggregate period of not more than 15
U.S. Business Days if the Offer period has not been previously extended
and at the expiration of the initial Offer period, there shall not have
been validly tendered and not properly withdrawn prior to such
expiration that number of Shares which, together with any Shares
beneficially owned by Purchaser or any of its affiliates, represents at
least 90% of the total outstanding Shares on a fully-diluted basis. In
addition, the Offer Price may be increased and the Offer may be
extended to the extent required by any Applicable Law or Rule in
connection with such increase, in each case, without the consent of the
Company.
(b) If the Purchaser desires to make any pre-commencement
communication as contemplated under Rule 14d-2(b) under the Exchange
Act and in compliance with Rule 135 on Rule 165 under the Securities
Act, on the date of the pre-commencement communication, Purchaser shall
file or cause to be filed with the SEC such communication relating to
the Offer pursuant to Rule 425 under the Securities Act, and deliver to
the Company a copy of such communication. If the Company desires to
make any pre-commencement communication as contemplated under Rule
14d-9(a) under the Exchange Act and in compliance with Rule 135 or Rule
165 under the Securities Act, the Company shall file or cause to be
filed with the SEC such communication relating to the Offer pursuant to
Rule 425 under the Securities Act, and deliver to the Purchaser a copy
of such communication.
(c) On the date of commencement of the Offer in the United
States, Purchaser shall file or cause to be filed with the SEC a Tender
Offer Statement and Rule 13e-3 Transaction Statement on Schedule TO,
including all exhibits thereto (together with all amendments and
supplements thereto, a "SCHEDULE TO") with respect to the Offer which
will comply in all material respects with the provisions of, and
satisfy in all material respects the requirements of, such Schedule TO
and all applicable U.S. federal securities laws, and will contain
(including as an exhibit) or incorporate by reference the Offer to
Exchange and forms of the related letter of transmittal and summary
advertisement and any other documents pursuant to which the Offer will
be made in the United States (collectively with any supplements or
amendments thereto, and including the final prospectus contained in the
effective Registration Agreement (as defined below) and any amendments
and supplements to such prospectus, the "U.S. OFFER DOCUMENTS").
(d) The Company and its counsel shall be given a reasonable
opportunity to review and comment on the initial U.S. Offer Documents
prior to their filing with the SEC. Purchaser agrees to provide the
Company with, and to consult with the Company regarding, any comments
that may be received from the SEC or its staff with respect to the U.S.
Offer Documents promptly after receipt thereof. Purchaser and the
Company each agree promptly to correct any information provided by it
for use in any U.S. Offer Document if and to the extent that it shall
have become false or misleading in any material respect and Purchaser
further agrees to take all steps necessary to cause the U.S. Offer
Documents as so corrected to be filed with the SEC and be disseminated
to holders of Shares, in each case, as and to the extent required by
applicable law.
(e) On the date of commencement of the Offer in The
Netherlands (which shall be the same date as the date of the
commencement of the Offer in the United
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States,) offer documents relating to the Offer prepared in accordance
with any Applicable Law or Rule of The Netherlands (the "NETHERLANDS
OFFER DOCUMENTS") shall be made generally available to the public in
The Netherlands. The commencement of the Offer and the availability of
the Netherlands Offer Documents shall be announced in AEX's Official
Price List (Officiele Prijscourant) and in at least one newspaper with
a nationwide circulation in The Netherlands one day prior to such
commencement.
(f) Prior to commencement of the Offer in the United States
and The Netherlands, Purchaser shall prepare and file with the SEC as
soon as reasonably practicable after the date hereof a Registration
Statement on Form S-4 relating to the Purchaser Shares to be issued in
connection with the Offer (the "REGISTRATION STATEMENT"). Purchaser and
the Company shall use all reasonable best efforts to have the
Registration Statement declared effective by the SEC as promptly as
practicable after such filing. The Purchaser and the Company shall
cooperate with each other in the preparation of the Registration
Statement or any amendment or supplement thereto and each shall notify
the other of the receipt of any comments of the SEC with respect to the
Registration Statement and of any requests by the SEC for any amendment
or supplement thereto, and shall provide to the other as promptly as
practicable copies of all correspondence with respect to the
Registration Statement. Purchaser shall give the Company and its
counsel the opportunity to review the Registration Statement and all
responses to requests for additional information by and reply to
comments of the SEC before their being filed with, or sent to, the SEC.
Each of Purchaser and the Company agrees to use its reasonable best
efforts, after consultation with the other party hereto, to respond as
promptly as practicable to all such comments of and requests by the SEC
and to cause the Registration Statement to be declared effective by the
SEC, and the prospectus contained thereto to be mailed at the earliest
practicable time to the holders of Shares.
(g) Purchaser shall not later than at the time of their
publication submit copies of all public announcements and filings
(including announcements and filings made outside The Netherlands) in
connection with the Offer to the Committee for Merger Affairs of the
Social Economic Council (Commissie voor Fusieaangelegenheden van de
Sociaal-Economisch Raad; the "COMMITTEE") and the AEX-Stock Exchange.
To the extent compliance with Chapter 1 of the Netherlands Merger Code
(as defined herein) does not appear from the documents submitted to the
Committee in accordance with the preceding sentence, the Purchaser
shall inform the Committee thereof. Pursuant to section 3, paragraph 3
of the Netherlands Merger Code, at all times subsequent to the public
announcement that a firm intention to commence the Offer exists (as
referred to in Section 6.07 hereof) is made, the Board of Managing
Directors of Purchaser shall inform the Committee of any transactions
in Shares or agreements in respect of a transaction in Shares effected
or entered into by Purchaser after that moment. The Board of Managing
Directors of Purchaser shall also inform the Committee of the
conditions applicable to such transactions or agreements and the
percentage stake held by the Purchaser in the Company as a consequence
thereof. Furthermore, the Board of Managing Directors of Purchaser
shall inform the Committee of any transactions in Shares or any
agreements in respect of a transaction in Shares not effected or
entered into by Purchaser but which are known to the Board of Managing
Directors of Purchaser. The disclosure to the Committee referred to in
this paragraph (g) shall be made promptly after a relevant transaction
or agreement has been effected or has been entered into or has become
known to the Board of Managing Directors of Purchaser. The duty to
inform the Committee in
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accordance with this paragraph (g) shall remain in force until the
moment it is publicly announced that the Offer has expired, is
withdrawn or shall not be commenced.
(h) The parties intend that the Offer shall be extended to
all holders of Shares, including holders of Shares outside the United
States and The Netherlands. If the law of a country or territory (other
than the United States of America or any part thereof, The Netherlands
or Luxembourg) precludes the making of the Offer in that country or
territory or to persons in that country or territory or so precludes
the making of the Offer except after compliance by the Purchaser with
conditions which the Purchaser regards as onerous (together,
"ILLEGALITY") then the Purchaser may vary the Offer made with regard to
holders of Shares to whom the Illegality is applicable, provided that
the variation is such that such holders of Shares are able to receive
consideration of a substantially equivalent value to that which they
would have received, but for the variation.
(i) In order to achieve maximum participation in the Offer,
Purchaser agrees to retain the services of a shareholder communications
agent to facilitate distribution of information relating to the Offer
and to solicit tenders and assist holders to tender their Shares in
connection with the Offer.
SECTION 1.02. COMPANY ACTIONS.
(a) The Company represents and warrants that (i) (with the
exception of the current board member nominated by Purchaser), its
Board of Directors (at a meeting or meetings duly called and held prior
to the date hereof) has duly and unanimously (A) approved entry into
this Agreement and the transactions contemplated hereby, (B) determined
that the terms of the Offer are fair to and in the best interests of
the Company and its shareholders, (C) resolved to recommend acceptance
of the Offer and the tender of Shares by the shareholders of the
Company, and (D) resolved to (1) consent to the acquisition of Shares
contemplated by this Agreement and to the voting of Shares so acquired,
as contemplated by the Company's Articles of Incorporation (statuts
coordonnes) and (2) elect, to the extent permitted by any Applicable
Law or Rule, not to be subject to any other form of anti-takeover laws
and regulations (collectively, "TAKEOVER LAWS") of any jurisdiction
that may purport to be applicable to this Agreement; (ii) the Company
has complied, in all material respects and to the extent applicable,
with Rule 4320(e)(21)(G) of the NASDAQ Stock Market; and (iii) the
Board of Directors of the Company has received the opinion of
Xxxxxxxxx, Xxxxxx & Xxxxxxxx International, the Company's independent
financial advisor, ("COMPANY ADVISER") to the effect that, in its
opinion, as of the date of this Agreement, the consideration to be
received in the Offer by the holders of Shares is fair, from a
financial point of view, to such holders (other than the Purchaser and
its affiliates), a true and complete copy of which will be delivered to
the Purchaser as soon as practicable following the execution and
delivery of this Agreement. It is understood and agreed that such
opinion is for the benefit of the Company's Board of Directors and may
not be relied upon by Purchaser or any of its affiliates. The Company
has been advised by each of its directors and executive officers listed
in SECTION 1.02 OF THE DISCLOSURE LETTER that each such person
currently intends to tender all Shares beneficially owned by such
person pursuant to the Offer.
(b) Upon commencement of the Offer in the United States, the
Company shall file with the SEC a Solicitation/Recommendation Statement
on Schedule 14D-9
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including all exhibits thereto (together with all amendments and
supplements thereto, a "SCHEDULE 14D-9") which shall comply in all
material respects with the provisions of, and satisfy in all material
respects the requirements of, such Schedule 14D-9 and all other
applicable U.S. federal securities laws, and will contain the
recommendations of its Board of Directors described in Section 1.02(a)
and hereby consents to the inclusion of such recommendations in the
Offer Documents and to the inclusion of a copy of the Schedule 14D-9
with the Offer Documents mailed or furnished to the Company's
shareholders, provided, however, that the Company's Board of Directors
may thereafter withdraw or amend such recommendations in accordance
with Section 6.02 hereunder. The Purchaser and its counsel shall be
given a reasonable opportunity to review and comment on any Schedule
14D-9 prior to its filing with the SEC. The Company agrees to provide
the Purchaser with, and to consult with Purchaser regarding, any
comments that may be received from the SEC or its staff with respect to
any Schedule 14D-9 promptly upon receipt thereof. The Company and
Purchaser each agrees promptly to correct any information provided by
it for use in the Schedule 14D-9 if and to the extent that it shall
have become false or misleading in any material respect and the Company
further agrees to take all steps necessary to cause the Schedule 14D-9
as so corrected or amended to be filed with the SEC and to be
disseminated to holders of Shares, in each case, as and to the extent
required by any Applicable Law or Rule.
SECTION 1.03. SHAREHOLDER LISTS. In connection with the Offer, the
Company shall promptly furnish or cause to be furnished to Purchaser
(or a suitable designated agent) mailing labels, security position
listings, and any available listing or computer file containing the
names and addresses of the record holders of the Shares as of the
latest practicable date and shall furnish Purchaser (or suitable
designated agent) with such information and assistance (including
periodic updates of such information) as Purchaser (or suitable
designated agent) or its agents may reasonably request in communicating
the Offer to the record and beneficial holders of the Shares. Subject
to the requirements of any Applicable Law or Rule, and except for such
steps as are necessary to disseminate the U.S. Offer Documents and any
other documents necessary to consummate the Offer, Purchaser shall (i)
hold in confidence the information contained in any such labels,
listings and files, (ii) use such information only in connection with
the Offer and, (iii) if this Agreement shall be terminated, shall, upon
request, deliver to the Company all copies of such information then in
its possession; provided, however, that the provisions of this sentence
shall no longer be of any force or effect upon the purchase of the
Shares tendered pursuant to the Offer.
SECTION 1.04. DIRECTORS. Promptly upon the purchase of Shares by
Purchaser pursuant to the Offer, provided that the Minimum Tender
Condition is satisfied, Purchaser shall be entitled to designate such
number of directors on the Board of Directors of the Company as will
give Purchaser representation on the Board of Directors of the Company
constituting a majority of the number of directors on the Board of
Directors of the Company, and the Company shall take all actions
required to be taken by the Company in order to provide Purchaser with
such level of representation and to cause Purchaser's designees to be
so elected. In order to enable such action to be taken immediately by
the Board of the Company appointing new directors in replacement for
them, each of Xxxxxxx Xxxxxxxxxxx, Xxxxxxx Xxxx, Xxxxxx Xxxxxxxx, Xxxxx
XxXxxxxx, Xxxxxx Xxxxxxx and Xxxxxx Xxxxx will agree (no later than
promptly after the signing of this Agreement) to resign as directors of
the Company at such time. The Company shall also take all actions
required to be taken by the Company in order to cause persons
designated by Purchaser to
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constitute a majority of Directors of the Company on (i) each committee
of the Board of Directors of the Company and (ii) each Board of
Directors and each committee thereof of each Subsidiary of the Company.
SECTION 1.05. STANDSTILL AGREEMENT. The Company, the Purchaser and
United Global Com, Inc. have executed and delivered an agreement
amending the standstill provisions set forth in that certain Private
Placement Agreement, dated as of January 27, 2000, by and between the
Company, Purchaser and UnitedGlobalCom, Inc., including Section 2.2
thereof, to permit the execution and delivery of this Agreement, the
Offer and the transactions contemplated hereby and thereby, and to
permit purchases of Shares by Purchaser or any of its affiliates after
consummation of the Offer.
SECTION 1.06. MINORITY BUY-OUT. For a period of six months after the
Closing Date, Purchaser agrees to use its reasonable best efforts
(subject to restrictions imposed by Applicable Law or Rules) to cause
any minority shareholders in the Company remaining after the Closing
Date to receive promptly consideration for their Shares that is equal
to the Offer Price, or if such consideration is not permitted by
Applicable Law, consideration that is substantially equivalent to the
Offer Price (the "MINORITY BUY-OUT"). The Company agrees to cooperate
with Purchaser and use its reasonable best efforts (subject to
restrictions imposed by Applicable Law or Rules) to facilitate the
Minority Buy-Out. The means by which the Purchaser conducts the
Minority Buy-Out shall be at its reasonable discretion and may include
redemption, merger or other corporate actions. Purchaser agrees to
retain the services of a shareholder communications agent to facilitate
distribution of information relating to any Minority Buyout and to
facilitate participation in any Minority Buy-Out.
ARTICLE II
TREATMENT OF OPTIONS
SECTION 2.01. TREATMENT OF OPTIONS.
(a) Purchaser and Company agree that they shall each take all
actions necessary such that at the Closing Date each outstanding option
or right to acquire Shares ("COMPANY OPTION") granted under any stock
option or similar plan of the Company or under any agreement to which
the Company or a Subsidiary is a party shall become vested and
exercisable and each holder of Company Options shall be entitled at the
Closing Date to elect by notice to the Purchaser either option (i) or
(ii) below in respect of that holder's Company Options:
(i) The Purchaser shall pay against cancellation of
the applicable Company Option to such holder within
72 hours of the Closing Date with respect to each of
such holder's Company Options an amount equal to the
product of (A) the excess of the Offer Price over the
exercise price for that Company Option (the "OPTION
SPREAD") multiplied by (B) the number of Shares
subject to that Company Option, which amount shall be
paid at such holder's option in cash or Purchaser
Shares (with the value of Purchaser Shares for
purposes of paying the Option Spread
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being equal to the Average Price), provided that
holders of Company Options electing this option (i)
shall be subject to proration such that such holders
shall not receive in the aggregate greater than 60
percent. of their consideration in cash.
(ii) At the Closing Date, each of such holder's
Company Options shall be deemed to constitute options
to acquire, on the same terms and conditions as were
applicable under such Company Options, the number of
Purchaser Shares equal to the result (rounded down to
the nearest whole share) of multiplying the number of
Shares subject to the Company Option immediately
prior to the Closing Date by the Conversion Ratio (as
defined below), at an exercise price per share equal
to the result (rounded down to the nearest whole
share) of dividing (A) the per share exercise price
of such Company Option immediately prior to the
Closing Date by (B) the Conversion Ratio; provided,
however, that in the case of any Company Option to
which Section 422 of the Code applies, the
adjustments provided for in this Section shall be
effected in a manner consistent with the requirements
of Section 42(a) of the Code, and provided, further,
that each holder of a Company Option electing this
option shall be entitled by notice to require the
Purchaser to purchase for cash up to 50 percent of
each of that holder's Company Options at a price
equal to the product of the applicable Option Spread
multiplied by the number of Shares subject to such
Company Options, with the balance of such Company
Options being converted in accordance with this
paragraph. At or prior to the Closing Date, the
Company and the Purchaser shall make all necessary
arrangements with respect to their stock option plans
to permit the assumption of the unexercised Company
Options by Purchaser pursuant to this Section. For
purposes of this Section, the term "Conversion Ratio"
means a fraction, the numerator of which is the
average of the high and low sales price of one Share
on NASDAQ and on the three trading days immediately
preceding the Closing Date and the denominator of
which is the average of the high and low sales price
of one Purchaser Share on NASDAQ on the trading day
immediately preceding the Closing Date. If a holder
fails to make a timely election for option (i) or
(ii) pursuant to this paragraph (a), such holder
shall be deemed to have elected option (i) and to
receive equal parts cash and Purchaser Shares under
option (i).
(b) Effective at the Closing Date, Purchaser shall assume
each Company Option in accordance with the terms of the stock option
agreement by which it is evidenced. At or prior to the Closing Date,
Purchaser shall take all corporate action necessary to reserve for
issuance a sufficient number of Purchaser Shares for delivery upon
exercise of Company Options assumed by it in accordance with this
Section. As soon as practicable after the Closing Date, if any Company
Options are converted pursuant to paragraph (a)(ii) of this Section
2.01 Purchaser shall file a registration statement on Form S-8 (or any
successor or other appropriate form) or, to the extent required,
another appropriate form with respect to the Purchaser Shares subject
to such Company Options, and shall use its reasonable best efforts to
maintain the effectiveness of such registration statement (and maintain
the current status of the prospectus or prospectuses contained therein)
for so long as such Company Options remain outstanding.
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(c) The Purchaser and the Company shall cooperate and take
such reasonable actions as may be available pursuant to exemptions
available under Rule 16b-3 of the Exchange Act or such other guidance
as may be promulgated by the SEC so that the acquisition of Purchaser
Shares or options to acquire Purchaser Shares pursuant to this
Agreement and the transactions contemplated in this Section 2.01 shall
be exempt transactions for purposes of Section 16 of the Exchange Act
by any officer or director of the Company who may become a covered
person of Purchaser for purposes of Section 16 ("SECTION 16").
ARTICLE III
PAYMENT FOR SHARES TENDERED
SECTION 3.01. PROMPT PAYMENT. Promptly after the Closing Date,
Purchaser shall cause payment to be made for all Shares properly
tendered and not withdrawn in accordance with Rule 14e-1(c) under the
Exchange Act and all requirements of applicable Luxembourg law and no
later than the third Amsterdam Exchange Day after such acceptance in
accordance with the rules and regulations of the AEX-Stock Exchange.
SECTION 3.02. TRANSFER TAXES. Any stamp or transfer taxes payable in
connection with purchases of Shares by Purchaser in the Offer and any
capital duty payable in The Netherlands in connection with the issuance
of Purchaser Shares pursuant to the Offer shall be paid by Purchaser.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth in (i) the Company SEC Reports (as defined herein) filed and
available prior to the date of this Agreement or (ii) with respect to any
Section of this Article IV, as set forth in the disclosure letter previously
delivered by the Company to Purchaser with respect to this Agreement (the
"DISCLOSURE LETTER"), the Company represents and warrants to Purchaser as
follows:
SECTION 4.01. ORGANIZATION AND QUALIFICATION. The Company and each of
its Subsidiaries is a duly organized and validly existing corporation
under the laws of its jurisdiction of incorporation, with all corporate
power and authority to own its properties and conduct its business as
currently conducted and is duly qualified as a foreign corporation
authorized to do business in each of the jurisdictions in which the
character of the properties owned or held under lease or license by it
or the nature of the business transacted by it makes such qualification
necessary, except where the failure to be so qualified, individually or
in the aggregate, would not have a Material Adverse Effect. The Company
has provided Purchaser with accurate and complete copies of the
Company's Articles of Incorporation (statuts coordonnes) as currently
in effect and a structure chart reflecting all of the Company's
Subsidiaries. Neither the Company nor any of its Subsidiaries, directly
or indirectly, owns any interest or investment (whether equity or debt)
in any corporation, partnership joint venture, limited liability
company, trust or other entity, other than in the Company's
Subsidiaries and other than as reflected on the structure chart
described above.
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SECTION 4.02. CAPITALIZATION.
(a) The authorized capital stock of the Company consists of
75,000,000 Shares. As of the date hereof, 25,725,590 Shares were issued
and outstanding (including all restricted Shares granted to employees,
officers, directors, or other service providers under any plan,
program, arrangement or agreement, whether or not vested), no shares of
Preferred Stock were issued and outstanding and 18,362 Shares were held
(beneficial or otherwise) by the Company as treasury shares or
otherwise. As of the date hereof, (i) there were options outstanding
pursuant to the Company's share incentive plans or otherwise to
purchase an aggregate of 4,900,463 Shares, as set forth in SECTION 4.02
OF THE DISCLOSURE LETTER, (ii) Paramount Television Group holds a
warrant to purchase up to 1,000,000 Shares and (iii) the Company has
outstanding US $75,000,000 in aggregate principal amount of its 7%
Convertible Subordinated Notes due 2004, which may be converted into an
aggregate of up to 2,574,665 Shares. No class of the Company's capital
stock is entitled to preemptive rights, and the Company has not
authorized or taken any action to split, combine or reclassify any
shares of its capital stock. All of the outstanding Shares have been
duly authorized and validly issued and are fully-paid and nonassessable
and are free of preemptive rights. SECTION 4.02(a) OF THE DISCLOSURE
LETTER contains a true, accurate and complete list, as of the date
hereof, of the name of each holder of employee stock options,
directors' stock options and any other options of the Company, the
number of outstanding options held by such holder, the grant date of
each such option, the number of Shares subject to such option, and the
corresponding exercise price. Except as set forth above and in SECTION
4.02(a) OF THE DISCLOSURE LETTER, there are no authorized, issued or
outstanding (i) securities of the Company convertible into or
exchangeable for shares of capital stock or voting securities or
ownership interests in the Company, (ii) options, warrants, rights or
other agreements or commitments to acquire from the Company, or
obligations of the Company to issue, any capital stock, voting
securities or other ownership interests in (or securities convertible
into or exchangeable for capital stock or voting securities or other
ownership interests in) the Company, (iii) obligations of the Company
to grant, extend or enter into any subscription, warrant, right,
convertible or exchangeable security or other similar agreement or
commitment relating to any capital stock, voting securities or other
ownership interests in the Company (the items in clauses (i), (ii) and
(iii), together with the capital stock of the Company, being referred
to collectively as "COMPANY SECURITIES") or (iv) obligations by the
Company or any of its Subsidiaries to make any payments based on the
price or value of the Shares. Except as set forth above, there are no
outstanding obligations of the Company or any of its Subsidiaries to
repurchase, redeem or otherwise acquire any Company Securities. There
are no voting trusts or other agreements or understandings to which the
Company or any of its Subsidiaries is a party with respect to the
voting of capital stock of the Company or any of its Subsidiaries.
(b) Except as disclosed in SECTION 4.02(b) OF THE DISCLOSURE
LETTER, the Company or another Subsidiary is the record and beneficial
owner of all the outstanding shares of capital stock of each Company
Subsidiary, free and clear of any lien, mortgage, pledge, charge,
security interest or encumbrance of any kind, and there are no
irrevocable proxies with respect to any such shares. Except as
disclosed in SECTION 4.02(b) OF THE DISCLOSURE LETTER, there are no
outstanding (i) securities of the Company 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 the
Company, (ii) options, warrants, rights or other agreements or
commitments to acquire from the Company or any of its
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Subsidiaries (or obligations of the Company or any of its Subsidiaries
to issue) any capital stock, voting securities or other ownership
interests in, or any securities convertible into or exchangeable for
any capital stock, voting securities or ownership interests in, any of
its Subsidiaries, (iii) obligations of the Company or any of its
Subsidiaries to grant, extend or enter into any subscription, warrant,
right, convertible or exchangeable security or other similar agreement
or commitment relating to any capital stock, voting securities or other
ownership interests in any of the Company's Subsidiaries (the items in
clauses (i), (ii) and (iii), together with the capital stock of such
Subsidiaries, being referred to collectively as "SUBSIDIARY
SECURITIES") or (iv) obligations of the Company or any of its
Subsidiaries to make any payment based on the value of any shares of
any Subsidiary. There are no outstanding obligations of the Company or
any of its Subsidiaries to repurchase, redeem or otherwise acquire any
outstanding Subsidiary Securities.
SECTION 4.03. AUTHORITY FOR THIS AGREEMENT. The Company has all
necessary corporate power and authority to execute and deliver this
Agreement and to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement by the Company and the
consummation by the Company of the transactions contemplated hereby
have been duly and validly authorized by the Board of Directors of the
Company and no other corporate proceedings (including for the avoidance
of doubt, the advice, consent or consultation of any works council,
labor unions or similar employee representative) on the part of the
Company are necessary to authorize this Agreement or to consummate the
transactions so contemplated. This Agreement has been duly and validly
executed and delivered by the Company and, assuming the due
authorization, execution and delivery of this Agreement by Purchaser,
constitutes a legal, valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms, except to
the extent that its enforceability may be limited by bankruptcy,
insolvency, reorganization, fraudulent conveyance, fraudulent transfer,
moratorium or other laws relating to or affecting creditors' rights
generally and by general principles of equity.
SECTION 4.04. CONSENTS AND APPROVALS; NO VIOLATION. Neither the
execution and delivery of this Agreement by the Company nor the
consummation of the transactions contemplated hereby will (a) violate
or constitute a breach of any provision of the respective governing
documents of the Company or any of its Subsidiaries, (b) require any
consent, approval, authorization or permit of, or filing with or
notification to, any governmental, judicial, legislative, executive,
administrative or regulatory authority, agency, commission, tribunal or
body having valid jurisdiction (which shall include the Committee and
the AEX Listing and Issuing Rules) (a "GOVERNMENTAL ENTITY"), except as
may be required by or under the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended (the "HSR ACT"), the Securities
Act, the Exchange Act, NASDAQ, the AEX - Stock Exchange, the European
Union Merger Task Force, any relevant competition, anti-trust, media or
broadcast laws and regulations in any Member State of the European
Union, any competition, anti-trust, media or broadcast laws and
regulations in any other applicable jurisdiction, (c) other than with
respect to media or broadcast licenses and permits, require any
consent, waiver or approval or result in a default (or give rise to any
right of termination, cancellation, modification or acceleration or
right to require the transfer of any license or material asset) under
any of the terms, conditions or provisions of any note, permit,
license, agreement, contract, indenture or other instrument or
obligation to which the Company or any of its Subsidiaries is a party
or by which the Company or any of its Subsidiaries or any of their
respective assets may be bound, (d) result in the creation or
imposition of any mortgage, lien, pledge, charge, security interest
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or encumbrance of any kind on any asset of the Company or any of its
Subsidiaries or (e) violate any order, writ, injunction, decree,
statute, rule or regulation including the Netherlands Merger Code
applicable to the Company or any of its Subsidiaries or by which any of
their respective assets are bound, except, in the case of clauses (b),
(c), (d) and (e), for cross-media ownership restrictions in Hungary or
for any of the foregoing that would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect or
a material adverse effect on the ability of the parties to consummate
the transactions contemplated hereby.
SECTION 4.05 REPORTS; FINANCIAL STATEMENTS.
(a) Since January 1, 1999, the Company has timely filed (or
furnished, in the case of Form 6-K's) all forms, reports and documents
required to be filed (or documents furnished, in the case of Form
6-K's) by it with the SEC, all of which have complied as of their
respective filing dates in all material respects with all applicable
requirements of the Exchange Act and the Securities Act. True and
correct copies of all filings (or "documents" or "reports" furnished,
in the case of Form 6-K's) , including exhibits, made by the Company
with the SEC since such date and prior to the date hereof (the "COMPANY
SEC REPORTS"), whether or not required under applicable laws, rules and
regulations and including any registration statement filed by the
Company under the Securities Act, have been furnished or made available
to Purchaser. None of the Company SEC Reports, including any financial
statements or schedules included or incorporated by reference therein,
at the time filed, contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. All of the
Company's SEC Reports, as of the respective dates (and as of the date
of any amendment thereto), complied as to form in all material respects
with the applicable requirements of the Securities Act and the Exchange
Act.
(b) Except as disclosed therein, the audited and unaudited
consolidated financial statements of the Company included (or
incorporated by reference) in the Company SEC Reports were prepared in
accordance with United States generally accepted accounting principles
applied on a consistent basis throughout the periods involved (except
as may be indicated in the notes thereto) and fairly presented, in all
material respects, the consolidated financial position of the Company
and its Subsidiaries as of their respective dates, and the consolidated
results of operations and its cash flows for the periods presented
therein, except that the unaudited interim financial statements were or
are subject to normal and recurring year-end adjustments which have not
had a Material Adverse Effect.
(c) Neither the Company nor any of its Subsidiaries has any
material liabilities of any nature, whether accrued, absolute, fixed,
contingent or otherwise, whether due or to become due and required to
be recorded or reflected on a consolidated balance sheet of the Company
under United States generally accepted accounting principles, except
(i) as reflected or reserved against or disclosed in the financial
statements of the Company included in the Company SEC Reports, and (ii)
liabilities incurred since December 31, 1999 that (x) have been
incurred in the ordinary course of business consistent with past
practice and (y) have not had and are not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect.
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SECTION 4.06. ABSENCE OF CERTAIN CHANGES. Since December 31, 1998, (a)
the Company and its Subsidiaries have not suffered any change,
condition, event or development that has had or that would reasonably
be expected to have a Material Adverse Effect, and (b) the Company and
its Subsidiaries have conducted their respective businesses only in the
ordinary course consistent with past practice, except for the
negotiation and execution and delivery of this Agreement.
SECTION 4.07. SCHEDULE 14D-9 AND OFFER DOCUMENTS.
(a) None of the information supplied or to be supplied by or
on behalf of the Company or any affiliate of the Company (other than
Purchaser or any of its affiliates) for inclusion in any Offer Document
will, at the times such documents are published, filed with the SEC and
any other relevant Governmental Entity in the Netherlands or Luxembourg
or submitted to and are mailed to shareholders of the Company, contain
any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they are made, not
misleading, or to correct any statement made in any communication with
respect to the Offer previously filed with the SEC or any other
Governmental Entity in The Netherlands or Luxembourg or disseminated to
the shareholders of the Company.
(b) Each Schedule 14D-9 filed in the United States and each
of The Netherlands Offer Documents published in The Netherlands will
not, at the time such documents are filed or made public and at all
times prior to the purchase of Shares by Purchaser pursuant to the
Offer, contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they
are made, not misleading, except that no representation or warranty is
made by the Company with respect to information supplied in writing by
Purchaser or an affiliate of Purchaser expressly for inclusion therein.
All Schedules 14D-9 will comply as to form in all material respects
with the provisions of the Exchange Act and the AEX Listing and Issuing
Rules.
SECTION 4.08. BROKERS. No Person or entity (other than the Company
Adviser, the arrangements with which have been completely and
accurately disclosed to the Purchaser) is entitled to receive any
brokerage, finder's or other fee or commission in connection with this
Agreement or the transactions contemplated hereby based upon agreements
made by or on behalf of the Company, any of its Subsidiaries or any of
their respective officers, directors or employees.
SECTION 4.09. EMPLOYEE BENEFIT MATTERS.
(a) A true and complete copy of each executive compensation,
incentive bonus or other bonus, employee pension, profit-sharing,
savings, retirement, stock option, stock purchase, severance pay, or
change in control plan, program, arrangement, agreement or commitment
in effect that covers current and future employees, directors or
consultants of the Company or any of its Subsidiaries (each, a "PLAN")
has been made available to the Purchaser or publicly filed prior to the
date thereof. SECTION 4.09(a) OF THE DISCLOSURE LETTER sets forth a
true and complete list of all Plans, and specifically
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identifies any "change of control" or similar provisions and the
aggregate change in control payments due thereunder.
(b) Neither the Company nor any of its Subsidiaries, directly
or indirectly, is subject to any liability in respect of any Plan,
which would reasonably be expected to have a Material Adverse Effect.
There are no actions, suits or claims pending (other than routine
claims for benefits) or, to the knowledge of the Company, threatened
with respect to such Plan or against the assets of such Plan (except
for the benefits payable or contributions due under the terms of such
Plans) which would reasonably be expected to have a Material Adverse
Effect. To the best knowledge of the Company, no Plan is under audit or
is the subject of an investigation by any Governmental Entity, except
routine audits conducted in the ordinary course which would not
reasonably be expected to have a Material Adverse Effect.
(c) The Company has complied, or will comply, with any
applicable works council or labor union advice, information, and/or
consultation procedures required by the laws of Luxembourg or The
Netherlands Merger Code and The Netherlands Works Council Act in
connection with the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby, except for any
non-compliance that would not have a Material Adverse Effect on the
Company or a material adverse effect on the ability of the parties to
consummate the transactions contemplated hereby.
(d) Neither the Company nor any of its Subsidiaries is in
violation of any provision of applicable law or any governmental rule
or regulation, or any order, ruling, decree, judgment or arbitration
award of any court, arbitrator or any Governmental Entity regarding the
terms and conditions of employment of employees, former employees or
prospective employees or other labor related matters, including laws,
rules, regulations, orders, rulings, decrees, judgments and awards
relating to wages, hours, civil rights, discrimination, fair labor
standards and occupational health and safety, wrongful discharge or
violation of the personal rights of employees, former employees or
prospective employees which, taken alone or together with any other
such violation or violations, would reasonably be expected to have a
Material Adverse Effect.
(e) (i) The Aggregate Payments (as defined below) do not
exceed US$2,500,000. Except for the Aggregate Payments, neither the
Company nor any of its Subsidiaries has any liability to any current or
former employee of the Company or its Subsidiaries, or any other person
by virtue of their rendering or having rendered personal services to
the Company or its Subsidiaries, the amount of which, the timing of the
payment of which or the other terms or conditions of which are affected
by the consummation of the transactions contemplated herein or the
value of equity securities of the Company or equity securities of or
interests in any of its Subsidiaries. For purposes of this subsection,
the term "AGGREGATE PAYMENTS" means the sum of (i) the aggregate amount
of payments (including, without limitation, the value of benefits) in
the nature of severance pay for which the Company and its Subsidiaries
are liable in connection with any change in control of the Company or
any of its Subsidiaries, and (ii) the aggregate liability of the
Company under any bonus or employee-retention plan, except for any
Company Options.
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SECTION 4.10. LITIGATION, ETC. There is no claim, action, suit,
proceeding or governmental investigation pending or, to the knowledge
of the Company, threatened against or relating to the Company or any of
its Subsidiaries that, individually or in the aggregate, would
reasonably be expected, individually or in the aggregate, to have a
Material Adverse Effect or, as of the date hereof, that in any material
manner challenges or seeks to prevent, enjoin, alter or materially
delay the Offer or prevent the Company from consummating any of the
other transactions contemplated hereby. Neither the Company nor any
Subsidiary of the Company is subject to any outstanding order, writ,
injunction or decree in any jurisdiction that, individually or in the
aggregate, has had or would reasonably be expected to have a Material
Adverse Effect.
SECTION 4.11. TAX MATTERS.
(a) The Company and its Subsidiaries have timely filed
(taking into account any permitted extensions of time in which to file)
all returns and reports relating to Taxes (including income taxes,
withholding taxes and estimated taxes) required to be filed by
Applicable Law or Rule with respect to each of the Company and its
Subsidiaries or any of their income, properties or operations as of the
date hereof, except for such failure to file as would not reasonably be
expected to have a Material Adverse Effect. All such returns are true,
accurate and complete in all material respects. The Company and its
Subsidiaries have timely paid or will timely pay all Taxes attributable
to each of the Company and its Subsidiaries that were due and payable
without regard to whether such Taxes have been assessed other than
Taxes which (i) are being contested in good faith (ii) for which an
adequate reserve has been provided in accordance with United States
generally accepted accounting principles or (iii) if not paid, the
failure of which payment would not have a Material Adverse Effect.
(b) The Company and its Subsidiaries have made adequate
provisions in accordance with the relevant jurisdictional generally
accepted accounting principles appropriately and consistently applied
to each of the Company and its Subsidiaries in the consolidated
financial statements included in the SEC Reports for the payment of all
material Taxes for which each of the Company and its Subsidiaries may
be liable for the periods covered thereby that were not yet due and
payable as of the dates thereof, regardless of whether the liability
for such Taxes is disputed.
(c) There is no claim or assessment pending or, to the best
of the Company's knowledge, threatened against the Company or any of
its Subsidiaries relating to the Company's or its Subsidiaries'
liability for Taxes that would reasonably be expected to have a
Material Adverse Effect. There are no agreements in effect to extend
the period of limitations for the assessment or collection of any Tax
for which the Company or any of its Subsidiaries may be liable that
would have a Material Adverse Effect.
(d) There is no contract, agreement or intercompany account
system in existence under which the Company or any of its Subsidiaries
has, or may at any time in the future have, an obligation to contribute
to the payment of a Tax of any group of corporations of which the
Company or any of its Subsidiaries is or was a part, the failure to pay
which would have a Material Adverse Effect.
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SECTION 4.12. COMPLIANCE WITH LAW; NO DEFAULT.
(a) The Company and its Subsidiaries are not in violation of,
and are not conducting their respective businesses in violation of, any
Applicable Law or Rule or in each case, except for such violations that
have not had and are not reasonably expected to have a Material Adverse
Effect or a material adverse effect on the ability of the parties to
consummate the transactions contemplated hereby.
(b) The Company and its Subsidiaries have all permits,
licenses, authorizations, consents, approvals and franchises from
Governmental Entities required to conduct their businesses as currently
conducted (the "COMPANY PERMITS"), except for such permits, licenses,
authorizations, consents, approvals and franchises the absence of
which, individually or in the aggregate, have not had and are not
reasonably expected to have a Material Adverse Effect or a material
adverse effect on the ability of the parties to consummate the
transactions contemplated hereby. The Company and its Subsidiaries are
in compliance with the terms of the Company Permits, except where the
failure so to comply in the aggregate has not had and is not reasonably
expected to have a Material Adverse Effect or a material adverse effect
on the ability of the parties to consummate the transactions
contemplated hereby.
SECTION 4.13. INTELLECTUAL PROPERTY. The Company and its Subsidiaries
have all right, title and interest in, or a valid and binding license
to use, and have taken reasonable and appropriate steps to protect all
Intellectual Property (as defined below), except for such defects that
individually or in the aggregate would not have a Material Adverse
Effect. Neither the Company nor any Subsidiary of the Company is in
default (or with the giving of notice or lapse of time or both, would
be in default) in any material respect under any right or license to
use such Intellectual Property, such Intellectual Property to the
knowledge of the Company is not being infringed by any third party, and
neither the Company nor any Subsidiary of the Company is infringing any
Intellectual Property of any third party, except for such defaults and
infringements which, individually or in the aggregate, are not having
and would not be reasonably expected to have a Material Adverse Effect.
For purposes of this Agreement, "INTELLECTUAL PROPERTY" trademarks,
trade names, service marks, service names, domain names, copyrights,
patents, database rights, compatible software and rights in
personalities and other proprietary intellectual property rights and
all pending applications for the registrations of any of the foregoing.
SECTION 4.14. TITLE TO PROPERTIES. ENTIRE BUSINESS. The Company and its
Subsidiaries have good title or a valid and subsisting leasehold
interest in and to or a valid and enforceable license to use all
material assets, properties and rights owned, used or held for use by
them in the conduct of their respective businesses, in each case, free
and clear of any leases, claims, mortgages, pledges and security
interests ("LIENS") except for Liens (i) arising in the ordinary course
of business, (ii) that do not materially impair the continued use of
such properties, or (iii) that are not reasonably expected to have a
Material Adverse Effect or a material adverse effect on the ability of
the parties to consummate the transactions contemplated hereby.
SECTION 4.15. CONVERTIBLE NOTES AND WARRANT. As the date hereof there
is US$75 million aggregate principal amount outstanding under the
Company's 7% Convertible Subordinated Notes due 2004. The current
Conversion Price (as defined in
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such Notes) of those Notes is US$29.13 having the result that if all
such Notes were converted they would convert into 2,574,655 Shares, and
there is no circumstance in existence which would give rise to
adjustments of the Conversion Price. As of the date hereof, the number
of Shares issuable to Paramount Communications B.V. under the warrant
("WARRANT") granted to it by the Company pursuant to their Warrant
Agreement originally dated 15 March 1995 is 1,000,000 Shares. The
Exercise Price (as defined in such Warrant Agreement) with respect to
each Share is US$25.00, and there is no circumstance in existence which
would give rise to adjustments of the Exercise Price or the number of
Shares purchasable under the Warrant.
SECTION 4.16. FOREIGN PRIVATE ISSUER. The Company is a "foreign private
issuer" as such term is defined in Rule 3b-4(c) under the Exchange Act
and does not qualify for the "Tier I" or "Tier II" exemptions under
Rule 14d-1 under the Exchange Act.
SECTION 4.17. MATERIAL CONTRACTS. Neither the Company nor any of its
Subsidiaries is, or has any knowledge that any other party is, in
default in any respect under any of the contracts, agreements, bonds,
mortgages, indentures, commitments, arrangements, leases (including
with respect to personal property) and other instruments to which the
Company or any of its Subsidiaries is a party or by which the Company,
any of its Subsidiaries or any of their respective assets is bound,
except for such defaults as have not had and are not reasonably likely
to have a Material Adverse Effect (each, a "MATERIAL CONTRACT"), and
there has not occurred any event that with the lapse of time or the
giving of notice or both would constitute such a default.
SECTION 4.18. RELATED PARTY TRANSACTIONS. No director or officer of the
Company or any of its Subsidiaries, nor any affiliate of such director
or officer (a) has borrowed any monies from or has outstanding any
indebtedness or other similar obligations to the Company or any of its
Subsidiaries that is required to be reported under applicable law or in
the SEC Reports provided to the Purchaser or (b) is otherwise a party
to any contract, arrangement or understanding with the Company or any
of its Subsidiaries that is required to be reported under applicable
law or in the SEC Reports provided to the Purchaser.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Except as set forth in the Purchaser SEC Reports (as defined herein) filed and
available prior to the date of this Agreement, Purchaser represents and warrants
to the Company as follows:
SECTION 5.01. ORGANIZATION AND QUALIFICATION. Purchaser is a duly
organized and validly existing public limited liability company
incorporated under the laws of The Netherlands.
SECTION 5.02. AUTHORITY FOR THIS AGREEMENT. Purchaser has all requisite
corporate power and authority to execute and deliver this Agreement and
to consummate the transactions contemplated hereby. The execution and
delivery of this Agreement by Purchaser and the consummation of the
transactions contemplated hereby have been duly and validly authorized
by all necessary corporate proceedings on the part of Purchaser. This
Agreement has been duly and validly executed and delivered by Purchaser
and,
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assuming the due authorization, execution and delivery of this
Agreement by the Company, constitutes a legal, valid and binding
agreement of each of Purchaser, enforceable against Purchaser in
accordance with its terms, except to the extent that its enforceability
may be limited by bankruptcy, insolvency, reorganization, fraudulent
conveyance, fraudulent transfer, moratorium or other laws relating to
or affecting creditors' rights generally and by general principles of
equity.
SECTION 5.03. CAPITALIZATION. As of the date of this Agreement, the
issued and outstanding capital stock of the Purchaser consists of the
Purchaser Shares as disclosed in the Purchaser SEC Reports (as defined
herein). Purchaser shall have sufficient authorized Shares to complete
the Offer on the terms and conditions set forth in this Agreement.
Except except as set forth in the Purchaser SEC Reports, there are no
outstanding obligations of the Purchaser or any of its Subsidiaries to
repurchase, redeem or otherwise acquire any Purchaser Shares. There are
no voting trusts or other agreements or understandings to which the
Purchaser is a party with respect to the voting of capital stock of the
Purchaser.
SECTION 5.04. REPORTS; FINANCIAL STATEMENTS.
(a) Since January 1, 1999, the Purchaser has timely filed all
forms, reports and documents required to be filed by it with the SEC,
all of which have complied as of their respective filing dates in all
material respects with all applicable requirements of the Exchange Act
and the Securities Act. True and correct copies of all filings,
including exhibits, made by the Purchaser with the SEC since such date
and prior to the date hereof (the "PURCHASER SEC REPORTS"), whether or
not required under applicable laws, rules and regulations and including
any registration statement filed by the Purchaser under the Securities
Act and any disclosure made to the AEX-Stock Exchange pursuant to the
AEX Listing and Listing Rules, as amended, have been or, within a
reasonable time will be, furnished or made available to the Purchaser.
None of the Purchaser SEC Reports, including any financial statements
or schedules included or incorporated by reference therein, at the time
filed, contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances
under which they were made, not misleading. All of the Purchaser's SEC
Reports, as of the respective dates (and as of the date of any
amendment thereto), complied as to form in all material respects with
the applicable requirements of the Securities Act and the Exchange Act.
(b) Except as disclosed therein, the audited and unaudited
consolidated financial statements of the Purchaser included (or
incorporated by reference) in the Purchaser SEC Reports were prepared
in accordance with United States generally accepted accounting
principles applied on a consistent basis throughout the periods
involved (except as may be indicated in the notes thereto) and fairly
presented, in all material respects, the consolidated financial
position of the Purchaser and its Subsidiaries as of their respective
dates, and the consolidated results of operations and cash flows for
the periods presented therein, except that the unaudited interim
financial statements were or are subject to normal and recurring
year-end adjustments which have not had a Purchaser Material Adverse
Effect.
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(c) Neither the Purchaser nor any of its Subsidiaries has any
material liabilities of any nature, whether accrued, absolute, fixed,
contingent or otherwise, whether due or to become due and required to
be recorded or reflected on a consolidated balance sheet of the
Purchaser under United States generally accepted accounting principles,
except (i) as reflected or reserved against or disclosed in the
financial statements of the Purchaser included in the Purchaser SEC
Reports, and (ii) liabilities incurred since December 31, 1999 that (x)
have been incurred in the ordinary course of business consistent with
past practice and (y) have not had and are not reasonably likely to
have, individually or in the aggregate, a Purchaser Material Adverse
Effect.
SECTION 5.05. ABSENCE OF CERTAIN CHANGES.
Since January 1, 1999, (a) the Purchaser and its Subsidiaries
have not suffered any Purchaser Material Adverse Effect or any change,
condition, event or development that has had a Purchaser Material
Adverse Effect, and (b) the Purchaser and its Subsidiaries have
conducted their respective businesses only in the ordinary course
consistent with past practice, except for the negotiation and execution
and delivery of this Agreement and various other acquisitions which it
is pursuing and which it will disclose to the Company in accordance
with Applicable Law or Rules.
SECTION 5.06. LITIGATION, ETC.
There is no claim, action, suit, proceeding or governmental
investigation pending or, to the knowledge of the Purchaser, threatened
against or relating to the Purchaser or any of its Subsidiaries that,
individually or in the aggregate, would reasonably be expected,
individually or in the aggregate, to have a Purchaser Material Adverse
Effect or, as of the date hereof, that in any material manner
challenges or seeks to prevent, enjoin, alter or materially delay the
Offer or prevent Purchaser from consummating any of the other
transactions contemplated hereby. Neither the Purchaser nor any
Subsidiary of the Purchaser is subject to any outstanding order, writ,
injunction or decree in any jurisdiction that, individually or in the
aggregate, has had or would reasonably be expected to have a Purchaser
Material Adverse Effect.
SECTION 5.07. COMPLIANCE WITH LAW; NO DEFAULT.
(a) The Purchaser and its Subsidiaries are not in violation
of, and are not conducting their respective businesses in violation of,
any Applicable Law or Rule except for such violations that have not had
and are not reasonably expected to have a Purchaser Material Adverse
Effect or a material adverse effect on the ability of the parties to
consummate the transactions contemplated hereby.
(b) The Purchaser and its Subsidiaries have all permits,
licenses, authorizations, consents, approvals and franchises from any
Governmental Entity which is required to conduct their businesses as
currently conducted (the "PURCHASER PERMITS"), except for such permits,
licences, authorizations, consents, approvals and franchises the
absence of which, individually or in the aggregate, have not had and
are not reasonably expected to have a Purchaser Material Adverse Effect
or a material adverse effect on the ability of the parties to
consummate the transactions contemplated hereby. The Purchaser
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and its Subsidiaries are in compliance with the terms of the Purchaser
Permits, except where the failure so to comply in the aggregate has not
had and is not reasonably expected to have a Purchaser Material Adverse
Effect or a material adverse effect on the ability of the parties to
consummate the transactions contemplated hereby.
SECTION 5.08. OFFER DOCUMENTS.
(a) None of the Offer Documents prepared by the Purchaser
will, at the times such documents are published, filed with the SEC or
submitted to any other relevant Governmental Entity in Luxembourg or
The Netherlands and are mailed to the shareholders of the Company,
contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to
make the statements made therein, in light of the circumstances under
which they are made, not misleading, except that no representation is
made by Purchaser with respect to information supplied in writing by
the Company or an affiliate of the Company expressly for inclusion
therein. The Offer Documents will comply as to form in all material
respects with the provisions of the Exchange Act and the AEX Listing
and Issuing Rules.
(b) None of the information supplied by Purchaser or any
affiliate of Purchaser specifically for inclusion in any Schedule 14D-9
filed in the United States and each of the Netherlands Offer Documents
will, at the date of filing with the SEC, 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 were made, not misleading.
SECTION 5.09. CONSENTS AND APPROVALS; NO VIOLATION. Neither the
execution and delivery of this Agreement by Purchaser nor the
consummation of the transactions contemplated hereby will (a) conflict
with or result in any breach of any provision of the governing
documents of Purchaser, (b) require any consent, approval,
authorization or permit of, or filing with or notification to, any
Governmental Entity, except (i) with respect to broadcast licenses and
permits and (ii) as may be required by or under the HSR Act, the
Securities Act, the Exchange Act, NASDAQ, the AEX-Stock Exchange, the
European Union Merger Task Force, any relevant competition or
anti-trust laws and regulations in any Member State of the European
Union, any competition or anti-trust laws and regulations in any other
applicable jurisdiction or (iii) where the failure to obtain such
consent, approval, authorization or permit, or to make such filing or
notification, would not, individually or in the aggregate, have a
material adverse effect on the ability of Purchaser to consummate the
transactions contemplated hereby, (c) require any consent, waiver or
approval or result in a default (or give rise to any right of
termination, cancellation, modification or acceleration) under any of
the terms, conditions or provisions of any note, license, agreement,
contract, indenture or other instrument or obligation to which
Purchaser or any of its Subsidiaries is a party or by which Purchaser
or any of its Subsidiaries or any of its respective assets may be
bound, except with respect to broadcast licenses and permits and except
for cross-media ownership restrictions in Hungary or defaults (or
rights of termination, cancellation, modification or acceleration) as
to which requisite waivers or consents have been obtained or which
would not in the aggregate have a material adverse effect on the
ability of Purchaser to consummate the transactions contemplated hereby
or (d) violate any order, writ, injunction, decree, statute, rule or
regulation applicable to Purchaser or any of its Subsidiaries or by
which any of their
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respective assets are bound, except for violations which would not,
individually or in the aggregate, have a material adverse effect on the
condition (financial or otherwise), business, properties, assets,
liabilities or result of operations of Purchaser and its Subsidiaries
taken as a whole, or a material adverse affect on the ability of
Purchaser to consummate the transactions contemplated hereby.
SECTION 5.10. BROKERS. No broker, finder or investment banker (other
than Xxxxxxx Xxxxx International Ltd) is entitled to any brokerage,
finder's or other fee or commission in connection with the transactions
contemplated by this Agreement based upon arrangements made by and on
behalf of the Purchaser that is or will be payable by the Company or
any of its Subsidiaries.
SECTION 5.11. AVAILABLE FUNDS. The Purchaser has or will have available
to it sufficient funds to satisfy all of its obligations hereunder and
in connection with the transactions contemplated by this Agreement.
ARTICLE VI
COVENANTS
SECTION 6.01. CONDUCT OF BUSINESS OF THE COMPANY. Except as expressly
contemplated by this Agreement or described in the Disclosure Letter,
during the period from the date of this Agreement to the Closing Date
or until the earlier termination of this Agreement, the Company shall
conduct and shall cause each of its Subsidiaries to conduct its
operations according to its ordinary and usual course of business and
consistent with past practice, and, to the extent consistent therewith,
the Company shall use and shall cause each of its Subsidiaries to use
its reasonable efforts to preserve substantially intact its business
organization, to keep available the services of its current officers
and employees and to preserve the present relationships with those
Persons and entities having significant business relationships with the
Company and its Subsidiaries, except such as would not have a Material
Adverse Effect, and the Company shall promptly advise the Purchaser of
any change in the Company's or any of its Subsidiaries' condition
(financial or otherwise), properties, assets, liabilities or results of
operations that would be material to the Company and its Subsidiaries
taken as a whole. Without limiting the generality of the foregoing and
except as otherwise expressly provided in or contemplated by this
Agreement or as disclosed in the Disclosure Letter, and except for that
certain transaction referred to as "Project Pluto" (the terms of which
have previously been disclosed to the Purchaser), during the period
specified in the preceding sentence, without the prior written consent
the Purchaser, the Company shall not and shall not permit any of its
Subsidiaries to:
(a) issue, sell, grant options or rights to purchase or
receive, pledge, or authorize or propose the issuance, sale, grant of
options or rights to purchase or receive or pledge of (i) any Company
Securities or Subsidiary Securities, or grant or accelerate any right
to convert or exchange any Company Securities or Subsidiary Securities,
other than Shares issuable upon exercise of the options described in
Section 4.02 or (ii) any other securities in respect of, in lieu of or
in substitution for Shares outstanding on the date hereof;
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(b) acquire or redeem, directly or indirectly, or amend any
Company Securities or Subsidiary Securities;
(c) split, combine or reclassify its capital stock or
declare, set aside, make or pay any dividend or distribution (whether
in cash, stock or property) on any shares of its capital stock (other
than cash dividends paid to the Company by its wholly-owned
Subsidiaries with regard to their capital stock);
(d) (i) make or offer to make any acquisition, by means of a
merger or otherwise, of assets or securities, or any sale, lease,
encumbrance or other disposition of assets or securities, in each case
involving an amount in excess of US$1,000,000 (one million), except for
purchases of inventory made in the ordinary course of business and
consistent with past practice or (ii) enter into a Material Contract or
amend any Material Contract or grant any release or relinquishment of
any rights under any Material Contract;
(e) incur or assume any long-term debt or short-term debt
except in ordinary course of business consistent with past practice or
to fund payments contemplated under this Agreement;
(f) other than in the ordinary course of business and
consistent with past practice, assume, guarantee, endorse or otherwise
become liable or responsible (whether directly, contingently or
otherwise) for the material obligations of any other Person except
wholly-owned Subsidiaries of the Company;
(g) other than in the ordinary course of business and
consistent with past practice, make any loans, advances or capital
contributions to, or investments in, any other Person (other than
wholly-owned Subsidiaries of the Company);
(h) change any of the material accounting principles or
practices used by it unless required by United States generally
accepted accounting principles;
(i) make any material Tax election or settle or compromise
any material federal, state or local income Tax liability;
(j) except as may be required to effect the Minority Buy-Out,
propose or adopt any amendments to its governing documents;
(k) grant any stock-related, performance or similar awards or
bonuses;
(l) forgive any loans to employees, officers or directors or
any of their respective affiliates or associates;
(m) except as contemplated by this Agreement, enter into any
new, or amend any existing, employment, severance, consulting or salary
continuation agreements with or for the benefit of any officers,
directors or employees, or grant any increases in the compensation or
benefits to officers, directors and employees (other than normal
increases
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to persons who are not officers or directors in the ordinary course of
business consistent with past practices and that, in the aggregate, do
not result in a material increase in benefits or compensation expense
of the Company); provided, however, that nothing contained in this
Section 6.01 shall in any manner preclude the Company from extending
the current term of any employment, severance, change in control or
similar agreement, arrangement or program which is effect on the date
hereof;
(n) except in the ordinary course of business, agree to the
amendment, revocation or termination of any material broadcasting
license of the Company and its Subsidiaries or joint ventures;
(o) make any deposits or contributions of cash or other
property to or take any other action to fund or in any other way secure
the payment of compensation or benefits under the Plans or agreements
subject to the Plans or any other plan, agreement, contract or
arrangement of the Company;
(p) enter into, amend, or extend any material collective
bargaining or other labor agreement;
(q) adopt, amend or terminate any Plan or any other bonus,
severance, insurance pension or other employee benefit plan or
arrangement ; provided, however, that nothing contained in this Section
6.01 shall in any manner preclude the Company from extending the
current term of any Plan which is effect on the date hereof;
(r) other than in the ordinary course of business, settle or
agree to settle any suit, action, claim, proceeding or investigation
(including any suit, action, claim, proceeding or investigation
relating to this Agreement or the transactions contemplated hereby) or,
except in the ordinary course of business, pay, discharge or satisfy or
agree to pay, discharge or satisfy any claim, liability or obligation
(absolute or accrued, asserted or unasserted, contingent or otherwise)
other than the payment, discharge or satisfaction of liabilities
reflected or reserved against in full in the financial statements as at
December 31, 1998 or incurred in the ordinary course of business
subsequent to December 31, 1998;
(s) except as specifically permitted by Section 6.02,
knowingly take, or agree to commit to take, or fail to take any action
that would result or is reasonably likely to result in any of the Offer
Conditions not being satisfied, or would make any representation or
warranty of the Company contained herein inaccurate in any material
respect at, or as of any time prior to, the Closing Date, or that would
impair the ability to consummate the Offer in accordance with the terms
hereof or materially delay such consummation; or
(t) agree in writing or otherwise to take any of the
foregoing actions.
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SECTION 6.02. NO SOLICITATION.
(a) The Company agrees that neither it nor any of its
Subsidiaries shall, and that it shall direct and use its reasonable
best efforts to cause its and its Subsidiaries' respective officers,
directors, employees, representatives (including investment bankers,
attorneys and accountants), agents or affiliates (other than Purchaser
or any of its affiliates) not to, directly or indirectly, encourage,
solicit, initiate or participate in any way in any discussions or
negotiations with, or provide any information to, or afford any access
to the properties, books or records of the Company or any of its
Subsidiaries to, or otherwise take any other action to assist or
facilitate, any Person or group (other than Purchaser or any affiliate
or associate of Purchaser) concerning any Acquisition Proposal (as
defined below) or the possible making of any Acquisition Proposal.
Notwithstanding the foregoing and subject to compliance with Section
6.02(c), the Company may only to the extent required by Luxembourg law
furnish information to or enter into discussions or negotiations with
any Person or entity that has made an unsolicited bona fide Acquisition
Proposal that the Board of Directors of the Company determines
constitutes or could constitute a Superior Proposal if, and only to the
extent that, the Board of Directors of the Company, after consultation
with outside legal counsel to the Company, determines in good faith
that failure to do so would be inconsistent with the fiduciary duty
imposed by Luxembourg law on the Board of Directors of the Company to
the shareholders of the Company under Applicable Law or Rule.
(b) The Company shall promptly (and in any event within one
business day) notify Purchaser, orally and in writing, if any such
information is requested or any such negotiations or discussions are
sought to be initiated and will promptly communicate to Purchaser the
identity of the Person or group making such request or inquiry (the
"POTENTIAL ACQUIROR") and any other material terms of such request,
inquiry or Acquisition Proposal. If the Company (or any of its
Subsidiaries or its or their respective officers, directors, employees,
representatives, agents or affiliates) participates in discussions or
negotiation with, or provides information to, a Potential Acquiror, the
Company shall keep Purchaser advised on a current basis of any
developments with respect thereto.
(c) The Company shall, and shall cause its Subsidiaries and
its and their respective officers, directors, employees,
representatives, agents and affiliates to, immediately cease and cause
to be terminated any existing activities, discussions, or negotiations
with any Persons other than Purchaser or any of its respective
affiliates or associates conducted prior to the date hereof with
respect to any Acquisition Proposal.
(d) Unless and until this Agreement has been terminated in
accordance with Section 8.01, the Company shall not (i) approve or
recommend, or propose publicly to approve or recommend, any Acquisition
Proposal, (ii) release any third party from any confidentiality or
standstill agreement to which the Company is a party or fail to enforce
to the fullest extent permitted by law any such agreement in order to
facilitate any Acquisition Proposal, (iii) waive a suspension of voting
rights for the acquisition of more than 20% of the voting stock of the
Company to facilitate any Acquisition Proposal (other than by
Purchaser) or (iv) enter into any letter of intent, agreement in
principle, acquisition agreement or other agreement to effect any
Acquisition Proposal.
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(e) Nothing contained in this Section 6.02 shall prohibit the
Company or its Board of Directors from taking and disclosing to the
Company's shareholders a position with respect to an Acquisition
Proposal by a third party pursuant to Rules 14d-9 and 14e-2(a)
promulgated under the Exchange Act.
(f) For purposes of this Agreement, (i) "ACQUISITION
PROPOSAL" means any offer or proposal, or any bona fide indication of
interest in making an offer or proposal, made by a Person or group at
any time which is structured to permit such Person or group to acquire
beneficial ownership of 20% of the consolidated assets of, or at least
20% of the equity interest in the Company pursuant to a merger,
consolidation or other business combination, sale of shares of capital
stock, sale of assets, tender offer or exchange offer or similar
transaction, including any single or multi-step transaction or series
of related transactions, in each case other than the transactions
contemplated by this Agreement and (ii) "SUPERIOR PROPOSAL" means any
unsolicited, bona fide Acquisition Proposal made in writing in respect
of which the Board of Directors of the Company has reasonably
determined in good faith after receiving the advice of its outside
counsel and independent financial advisors that (A) the Potential
Acquiror has the financial wherewithal to consummate such Acquisition
Proposal, (B) such Acquisition Proposal would, if consummated, result
in a transaction that is more favorable to the Company and its
shareholders (other than Purchaser and its Affiliates) from a financial
point of view than the transactions contemplated by this Agreement and
(C) such Acquisition Proposal is reasonably likely to be consummated.
SECTION 6.03. ACCESS TO INFORMATION. From and after the date of this
Agreement, the Company shall (i) give Purchaser and its authorized
accountants, investment bankers, counsel and other representatives
reasonable access (during regular business hours upon reasonable notice
and after consultation) to its officers, key employees, offices and
other facilities, and to all books, contracts, commitments and records
(including Tax returns) of the Company and its Subsidiaries and cause
the Company's and its Subsidiaries' independent public accountants to
provide access to their work papers and such other information as
Purchaser may reasonably request, (ii) permit Purchaser to make such
inspections as they may reasonably require, (iii) cause its executive
officers and those of its Subsidiaries to furnish Purchaser with such
financial and operating data and other information with respect to the
business, properties and personnel of the Company and its Subsidiaries
as Purchaser may from time to time reasonably request and (iv) furnish
promptly to Purchaser a copy of each report, schedule and other
document filed or received by the Company during such period pursuant
to the requirements of the U.S. federal or state securities laws,
provided, that the foregoing shall not require the Company to permit
any inspection, or to disclose any information, which in the reasonable
judgment of the Company would result in the disclosure of any trade
secrets of third parties or violate any obligation of the Company with
respect to confidentiality if the Company shall have used reasonable
efforts to obtain the consent of such third party to such inspection or
disclosure. All requests for information made pursuant to this Section
shall be directed to an executive officer of the Company or such person
as may be designated by any such officer. If the transactions
contemplated by this Agreement are not consummated, then upon
termination of this Agreement, Purchaser shall as promptly as
practicable collect and deliver to the Company all documents obtained
by it or any of its representatives then in their possession and any
copies thereof.
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SECTION 6.04. REASONABLE BEST EFFORTS. Subject to the terms and
conditions of this Agreement, each of the parties hereto agrees to use
its reasonable best efforts to take, or cause to be taken, all
appropriate action, and to do, or cause to be done, all things
necessary, proper or advisable under any Applicable Law or Rule to
consummate and make effective, in the most expeditious manner
practicable, the transactions contemplated by this Agreement; provided,
however, that nothing in this Agreement (other than as expressly
provided for in Section 1.01) shall obligate Purchaser to keep the
Offer open beyond the expiration date set forth in the Offer (as it may
be extended from time to time). Without limiting the foregoing, (i)
each of the Company and Purchaser shall use its reasonable best efforts
to make promptly any required submissions under the HSR Act or any
competition filings required under Applicable Law or Rule which the
Company or Purchaser determines should be made, in each case, with
respect to the Offer and the transactions contemplated hereby and (ii)
Purchaser and the Company shall cooperate with one another (A) in
promptly determining whether any filings are required to be or should
be made or consents, approvals, permits or authorizations are required
to be or should be obtained under any other U.S. federal, state or
foreign law or regulation or whether any consents, approvals or waivers
are required to be or should be obtained from other parties to
indentures, loan agreements or other contracts (including joint venture
agreements) or instruments material to the Company's business in
connection with the consummation of the transactions contemplated by
this Agreement and (B) in promptly making any such filings, furnishing
information required in connection therewith and seeking to obtain
timely any such consents, permits, authorizations, approvals or
waivers. In case at any time after the Closing Date any further action
is necessary or desirable to carry out the purposes of this Agreement,
the proper officers and directors of each party to this Agreement shall
take all such necessary action.
SECTION 6.05. LEGAL CHALLENGES. The Company shall, upon the request of
Purchaser, take all reasonable steps to exclude the applicability of,
or to assist in any challenge by Purchaser to the validity, or
applicability to the Offer or any other transaction contemplated by
this Agreement. In the event that any action, suit, proceeding or
investigation relating hereto or to the transactions contemplated
hereby is commenced, whether before or after the Closing Date, the
parties hereto agree to cooperate and use their reasonable best efforts
to defend vigorously against it and respond thereto.
SECTION 6.06. NOTIFICATION OF CERTAIN MATTERS. The Company shall give
prompt notice to Purchaser, and Purchaser, as the case may be, shall
give prompt notice to the Company, of the occurrence, or
non-occurrence, of any event the occurrence, or non-occurrence, of
which is likely (a) to cause any representation or warranty of such
party contained in this Agreement to be untrue or inaccurate in any
material respect if made as of any time at or prior to the Closing
Date, and (b) to result in any material failure of such party to comply
with or satisfy any covenant, condition or agreement to be complied
with or satisfied hereunder (including the conditions set forth in
Exhibit A); provided, however, that the delivery of any notice pursuant
to this Section 6.06 shall not limit or otherwise affect the remedies
available hereunder to any of the parties receiving such notice.
SECTION 6.07. PRESS RELEASES. Purchaser and the Company shall consult
with each other before issuing any press release or otherwise making
any public statements with respect to the Offer or this Agreement and
shall not issue any such press release or make any such public
statement prior to such consultation (and affording the other party or
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parties an opportunity to comment thereon), except as they may
determine in their sole discretion may be required by Applicable Law or
stock exchange rules. As soon as practicable after signing of this
Agreement, the firm intention to commence an Offer shall be publicly
announced by both the Purchaser and the Company; provided, however,
that such announcement shall comply with Rule 14d-2(b) under the
Exchange Act and Rule 135 or Rule 165 under the Securities Act. The
contents of the announcement shall be in compliance with Section 3 of
the Netherlands Merger Code. In accordance with Section 17 of the
Netherlands Merger Code, the parties agree, to make prior to its
publication, a copy of the public announcement available to relevant
labor unions, if any, and to the Committee pursuant to Section 21 of
the Netherlands Merger Code.
SECTION 6.08. CROSS-MEDIA OWNERSHIP. The Company will use reasonable
best efforts to assist Purchaser to ensure that prior to the time
Purchaser consummates the Offer and accepts for payment and pays for
any Shares tendered pursuant thereto, the media cross ownership
restrictions in Hungary relating in particular but without limitation
to cross ownership of cable assets and broadcasting assets are not
violated as a result of Purchaser controlling the Company. In no event
shall any representation or warranty, covenant or condition of the
Company under this Agreement be violated or otherwise breached or
triggered by a violation of such media cross ownership restrictions in
Hungary.
SECTION 6.09. ACCOUNTANTS' COMFORT LETTERS. Each of the Purchaser and
the Company shall use its reasonable efforts to cause to be delivered
to the other two letters from their respective independent accountants,
one dated a date within two business days before the date on which the
Form S-4 Registration Statement shall have become effective and one
dated a date within two U.S. Business Days before the Closing Date, in
form and substance reasonably satisfactory to the recipient and
customary in scope and substance for comfort letters delivered by
independent accountants in connection with registration statements
similar to the Form S-4 Registration Statement.
SECTION 6.10. INDEMNIFICATION; DIRECTORS' AND OFFICERS' INSURANCE.
(a) If the Offer is consummated, for a period of the earlier
of two years following the Closing Date or expiration of the limitation
period in which any action could be brought, Purchaser shall indemnify
and hold harmless, to the full extent permitted by the General
Corporation law of the State of Delaware ("DGCL") as if the DGCL were
to apply to the Company and Purchaser if they were corporations subject
to the DGCL, each present and former director or officer of the Company
and its Subsidiaries (collectively, the "INDEMNIFIED PARTIES") against
any costs or expenses (including reasonable attorneys' fees),
judgments, fines, losses, claims, damages or liabilities (collectively,
"COSTS"), such right of indemnification to include the right to
advancement of expenses incurred in the defense of any action or suit
promptly after statements therefor are received to the fullest extent
permitted by the DGCL; provided that the Indemnified Party to whom
expenses are advanced provides an undertaking to repay such advance if
it is ultimately determined that such party is not entitled to
indemnification. Notwithstanding the foregoing, Purchaser shall not be
liable for any settlement of any claim effected without Purchaser's
consent, which consent shall not be unreasonably withheld.
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(b) If the Offer is consummated, for a period of the earlier
of two years following the Closing Date or expiration of the limitation
period in which any action could be brought, Purchaser shall maintain
officers' and directors' liability insurance ("D&O INSURANCE") for, or
cause Purchaser's existing D&O insurance to cover, those persons who
are serving as officers or directors of the Company on the date hereof.
(c) If the Purchaser or any of its successors or assigns (i)
shall consolidate with or merge into any other corporation or entity
and shall not be the continuing or surviving corporation or entity of
such consolidation or merger or (ii) shall transfer all or
substantially all of its properties and assets to any individual,
corporation or other entity, then, and in each such case, proper
provisions shall be made so that the successors and assigns of the
Purchaser shall assume all of the obligations set forth in this
Section.
(d) The provisions of this Section are intended to be for the
benefit of, and shall be enforceable by, each of the Indemnified
Parties.
ARTICLE VII
[INTENTIONALLY LEFT BLANK]
ARTICLE VIII
TERMINATION; AMENDMENT; WAIVER
SECTION 8.01. TERMINATION. This Agreement may be terminated at any time
prior to the Closing Date by action taken or authorized by the Board of
Directors of the terminating party or parties:
(a) by mutual written consent of Purchaser and the Company,
by action of their Supervisory Board and Managing Board, and Board of
Directors, respectively;
(b) by Purchaser or the Company, if any court of competent
jurisdiction or other Governmental Entity shall have issued an order,
decree or ruling (which order, decree or ruling the parties hereto
shall use reasonable efforts to lift), or taken any other action
restraining, enjoining or otherwise prohibiting any of the transactions
contemplated by this Agreement and which can reasonably be expected to
result in any of the consequences referred to in clauses (1)-(6) of
paragraph (iv)(a) of Exhibit A and such order, decree, ruling or other
action shall have become final and non-appealable;
(c) by the Company, if (i) Purchaser fails to commence the
Offer in violation of Section 1.01 hereof, (ii) Purchaser shall not
have accepted, or by law is not permitted to accept, for payment and
paid for Shares pursuant to the Offer in accordance with the terms
thereof on or before September 30, 2000, or (iii) Purchaser fails to
purchase validly tendered Shares in violation of the terms of this
Agreement;
(d) by Purchaser, if (A) due to an occurrence or circumstance
which would result in a failure to satisfy any of the Offer Conditions
contained in clause (iv) to
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Exhibit A, Purchaser shall have not commenced the Offer within the time
provided for in Section 1.01 hereof, or (B) due to an occurrence or
circumstance which would result in a failure to satisfy any of the
Offer Conditions, Purchaser shall have either (1) terminated the Offer
without purchasing any Shares pursuant to the Offer or (2) not accepted
for payment Shares pursuant to the Offer prior to September 30, 2000;
(e) by the Company, prior to the purchase of Shares pursuant
to the Offer, if (i) the Company has given Purchaser at least two U.S.
Business Days advance notice of its intention to accept or recommend a
Superior Proposal and of all of the material terms and conditions of
such Superior Proposal in accordance with Section 6.02 and (ii) in
response to an unsolicited Acquisition Proposal, the Board of Directors
determines, after consultation with and the receipt of the advice of
its financial advisor and outside counsel, that such Acquisition
Proposal is a Superior Proposal and that failure to terminate this
Agreement would be inconsistent with the fiduciary duties of the Board
of Directors under Luxembourg Law; provided that the termination
described in this Section 8.01(e) shall not be effective unless and
until the Company shall have paid to Purchaser all of the Termination
Fee (as defined in Section 8.03 below);
(f) by Purchaser, prior to the purchase of Shares pursuant to
the Offer, if the Company shall have taken or the Board of Directors of
the Company shall have resolved to take, any of the actions referred to
in Section 6.02(d), or if the Company shall have withdrawn or modified,
or proposed publicly to withdraw or modify, in a manner adverse to
Purchaser, the approval or recommendation of the Offer as set forth in
Section 1.02(a); or
(g) by Purchaser, in accordance with the last paragraph of
Section 1.01(a)(ii).
SECTION 8.02. EFFECT OF TERMINATION. If this Agreement is terminated
pursuant to Section 8.01 hereof, this Agreement, except for the
provisions of Sections 8.02, 8.03 and Article IX hereof, shall
forthwith become void and have no effect, without any liability on the
part of any party or its directors, officers or shareholders. Nothing
in this Section 8.02 shall relieve any party to this Agreement of
liability for any breach of this Agreement.
SECTION 8.03. FEES AND EXPENSES.
(a) Whether or not the Offer is consummated, except as
otherwise specifically provided herein, all costs and expenses incurred
in connection with the Offer, this Agreement and the transactions
contemplated by this Agreement shall be paid by the party incurring
such expenses. Purchaser acknowledges and agrees that the Company shall
be entitled to pay or cause to be paid, at or prior to the Closing, all
fees, costs and expenses incurred by the Company in connection with the
Offer, this Agreement and the transactions contemplated by this
Agreement.
(b) In the event that this Agreement is terminated (1)
pursuant to Section 8.01(e) or 8.01(f) or (2) pursuant to Section
8.01(c)(ii) or 8.01(d) and (in the case of this clause (2) only) either
(A) prior to such termination an Acquisition Proposal (other than any
Acquisition Proposal made by or on behalf of, or encouraged, solicited
or initiated in any respect by, the Purchaser or any of its affiliates
or any of such persons' associates) shall have been made or publicly
announced and (B) within nine months thereafter any
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36
Acquisition Proposal that is financially superior to the Offer shall
have been consummated (whether or not with a different third party),
then the Company shall pay the Purchaser a termination fee of US$90
million (which shall be deemed to include reimbursement for all fees
and expenses of the Purchaser related to the Offer, this Agreement, the
transactions contemplated hereby and any related financing) (the
"TERMINATION FEE") in immediately available funds by wire transfer to
an account designated by Purchaser. For the purposes of clause (2) of
this Section 8.03(b) only, "Acquisition Proposal" shall have the same
meaning ascribed to it in Section 6.02(f), except that references
therein to "20%" shall be read to substitute "25%" therefore. If such
amounts become payable pursuant to clause (1) of this Section 8.03(b),
they shall be payable simultaneously with such termination (in the case
of a termination by the Company) or within two business days thereafter
(in the case of a termination by Purchaser). If such amounts become
payable pursuant to clause (2) of this Section 8.03(b), they shall be
payable simultaneously with completion of such Acquisition Proposal. No
Termination Fee shall be payable pursuant to this Section 8.03 if
Purchaser shall be in material breach of its obligations under this
Agreement.
(c) In the event of the payment of a Termination Fee by the
Company pursuant to this Section 8.03, such Termination Fee shall be
the sole and exclusive remedy of Purchaser against the Company and any
of its Subsidiaries and their respective officers, directors,
employees, agents, advisors and other representatives with respect to
the breach of this Agreement.
(d) For purposes of this Section 8.03, this Agreement shall
be deemed terminated by Purchaser pursuant to a provision giving rise
to the obligation to pay the Termination Fee if at the time of any
termination hereunder Purchaser was so entitled to terminate this
Agreement pursuant to such provision.
(e) The prevailing party in any legal action undertaken to
enforce this Agreement or any provision hereof shall be entitled to
recover from the other party the reasonable costs and expenses
(including attorneys' and expert witness fees) incurred in connection
with such action.
SECTION 8.04. AMENDMENT. This Agreement may not be amended, changed,
supplemented or otherwise modified except by an instrument in writing
signed on behalf of all of the parties. The parties acknowledge that,
pursuant to Section 18 of the Netherlands Merger Code and the
procedures specified in Section 25 of the Netherlands Works Council
Act, this Agreement, and the documents in connection with the
transactions contemplated by this Agreement, may be subject to
amendment (with the consent of the Company and Purchaser) pursuant to
the results of any consultation with any labor unions or advice
provided by works councils, to the extent required.
SECTION 8.05. EXTENSION; WAIVER; REMEDIES.
(a) At any time prior to the Closing Date, the parties
hereto, by action taken by or on behalf of the respective boards of the
Company and Purchaser, may (i) extend the time for the performance of
any of the obligations or other acts of the other parties hereto, (ii)
waive any inaccuracies in the representations and warranties contained
herein by any other applicable party or in any document, certificate or
writing delivered pursuant hereto by any other applicable party or
(iii) waive compliance with any of the agreements or conditions
contained herein. Any agreement on the part of any party to any
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such extension or waiver shall be valid only if set forth in an
instrument in writing signed on behalf of such party.
(b) All rights, powers and remedies provided under this
Agreement or otherwise available in respect hereof at law or in equity
shall be cumulative and not alternative, and the exercise of any
thereof by any party shall not preclude the simultaneous or later
exercise of any other such right, power or remedy by such party. The
failure of any party hereto to exercise any rights, power or remedy
provided under this Agreement or otherwise available in respect hereof
at law or in equity, or to insist upon compliance by any other party
hereto with its obligations hereunder, and any custom or practice of
the parties at variance with the terms hereof, shall not constitute a
waiver by such party of its right to exercise any such or other right,
power or remedy or to demand such compliance.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The
representations and warranties made in Articles IV and V shall not
survive beyond the Closing Date. This Section 9.01 shall not limit any
covenant or agreement of the parties hereto which by its terms
contemplates performance after the Closing Date.
SECTION 9.02. ENTIRE AGREEMENT; ASSIGNMENT. This Agreement, together
with the Disclosure Letter delivered in connection herewith,
constitutes the entire agreement between the parties with respect to
subject matter hereof and supersedes all other prior agreements and
understandings, both written and oral, between the parties with respect
to subject matter hereof. The Agreement shall not be assigned by any
party by operation of law or otherwise without the prior written
consent of the other parties, provided, however, that Purchaser may
assign any of its respective rights and obligations to any direct or
indirect Subsidiary of Purchaser but no such assignment shall relieve
Purchaser of its obligations hereunder.
SECTION 9.03. ENFORCEMENT OF THE AGREEMENT; JURISDICTION. The parties
agree that irreparable damage would occur in the event that any of the
provisions of this Agreement were not performed in accordance with
their specific terms or were otherwise breached. It is accordingly
agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce
specifically the terms and provisions of this Agreement in the United
States District Court for the Southern District of New York ("SDNY")
located in the Borough of Manhattan, City of New York, this being in
addition to any other remedy to which they are entitled at law or in
equity. In addition, each of the parties hereto (a) consents to submit
itself to the non-exclusive personal jurisdiction of the SDNY in the
event any dispute arises out of this Agreement or any transaction
contemplated by this Agreement, (b) agrees that it will not attempt to
deny or defeat such personal jurisdiction by motion or other request
for leave from any such court and (c) waives any right to trial by jury
with respect to any action related to or arising out of this Agreement
or any transaction contemplated by this Agreement. The parties
irrevocably and unconditionally waive any objection to the laying of
venue of any action, suit or proceeding arising out of this Agreement
or the transactions contemplated hereby in the SDNY, and hereby further
irrevocably and unconditionally waive and agree not to plead
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or claim in any such court that any such action, suit or proceeding
brought in any such court has been brought in an inconvenient forum.
SECTION 9.04. VALIDITY. Whenever possible, each provision or portion of
any provision of this Agreement will be interpreted in such manner as
to be effective and valid under applicable law but if any provision or
portion of any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or
rule in any jurisdiction such invalidity, illegality or
unenforceability will not affect any other provision or portion of any
provision in such jurisdiction, and this Agreement will be reformed,
construed and enforced in such jurisdiction as if such invalid, illegal
or unenforceable provision or portion of any provision had never been
contained herein.
SECTION 9.05. NOTICES. All notices, requests, claims, demands and other
communications hereunder shall be given (and shall be deemed to have
been duly received if given) by hand delivery in writing or by
facsimile transmission with confirmation of receipt, as follows:
if to Purchaser:
United Pan-Europe Communications N.V.
Xxxx. Xxxxxxxxxxxx 000
XX Xxx 00000
1070 BT Amsterdam, The Netherlands
Attention: General Counsel
Facsimile: x00 00 000 0000
Telephone: x00 00 000 0000
with copies to:
Xxxxxxxx Chance Xxxxxx & Xxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxxxx, Esq.
Facsimile: x0-000-000-0000
Telephone: x0-000-000-0000
and to:
Xxxxxxxx Chance Limited Liability Partnership
000 Xxxxxxxxxx Xxxxxx
Xxxxxx XX0X 0XX, Xxxxxxx
Attention: Xxxxxx Xxxxxxx, Esq.
Facsimile: x00-000-000-0000
Telephone: x00-000-000-0000
if to the Company:
SBS Broadcasting S.A.
0-00 xxx Xxxxxxx Xxxxx
X-0000 Xxxxxxxxxx
Xxxxxxxxxx
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Attention: Corporate Secretary
Facsimile: x000-00-00-00
Telephone: x000-00-00-00
with copies to:
Xxxxxxxx & Xxxxxxxx
St. Olave's House
0x Xxxxxxxxxx Xxxx
Xxxxxx XX0X 0XX
Attention: Xxxxxxx X. Xxxxxxxxx, Esq
Facsimile: x00-00-0000-0000
Telephone: x00-00-0000-0000
and to:
Xxxxxx & Xxxxxxxxx
0-00 xxx Xxxxxxx Xxxxx
X.X. Xxx 00
X-0000 Xxxxxxxxxx
Xxxxxxxxxx
Attention: Xxx Xxxxxx, Esq.
Facsimile: x000-00-00-00
Telephone: x000-00-00-00
or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth
above.
SECTION 9.06. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
SECTION 9.07. 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 9.08. PARTIES IN INTEREST. This Agreement shall be binding upon
and inure solely to the benefit of each party hereto, and nothing in
this Agreement, express or implied, is intended to confer upon any
other Person any rights or remedies of any nature whatsoever under or
by reason of this Agreement.
SECTION 9.09. COUNTERPARTS. This Agreement may be executed in
counterparts, each of which shall be deemed to be an original, but all
of which, taken together, shall constitute one and the same agreement.
SECTION 9.10. ADJUSTMENTS TO PURCHASER SHARES. Except as otherwise
provided in Section 1.01(a)(iii), in the event that Purchaser carries
out a reclassification, stock split (including a reverse split), stock
dividend or stock distribution, recapitalization, subdivision or other
similar transaction with respect to Purchaser Shares prior to the
Closing Date, then the Offer Price, Exchange Ratio and other terms of
this Agreement relating to Purchaser Shares will be equitably adjusted.
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SECTION 9.11 CERTAIN DEFINITIONS.
(a) "AEX-STOCK EXCHANGE" as referred to herein shall mean the
stock exchange held by Amsterdam Exchanges N.V.
(b) "ACQUISITION PROPOSAL" shall have the meaning assigned to
it in Section 6.02(f) of this Agreement.
(c) "AMSTERDAM EXCHANGE DAY" shall mean a day on which the
AEX-Stock Exchange is open for trading.
(d) The term "APPLICABLE LAW OR RULE" shall mean, as the
context may require, any statute, law, ordinance, rule, regulation,
order, judgment or decree in any jurisdictions applicable to the
relevant party or any of its Subsidiaries or by which any property or
asset of the relevant party or any of its Subsidiaries is bound or
affected (which shall include The Netherlands Merger Code), or any rule
or regulation of any stock exchange on which the shares or any other
securities of the relevant party are listed.
(e) The terms "AFFILIATE" and "ASSOCIATE" shall have the
meanings given to such terms in Rule 12b-2 under the Exchange Act.
(f) "AGGREGATE PAYMENTS" shall have the meaning assigned to
it in Section 4.09(e) of this Agreement.
(g) the "AVERAGE PRICE" shall have the meaning assigned to it
in Section 1.01(a) of this Agreement.
(h) "BASIC TERMS" shall have the meaning assigned to it in
Section 1.01(a) of this Agreement.
(i) The term "BENEFICIAL OWNERSHIP" shall have the meaning
given to such term in Rule 13d-3 under the Exchange Act.
(j) "BUSINESS DAY" shall mean any day of the week where the
commercial banks in The City of New York, The Netherlands and
Luxembourg are generally open for business.
(k) "CLOSING DATE" shall have the meaning assigned to it in
Section 1.01(a) of this Agreement.
(l) "COMMITTEE" shall have the meaning assigned to it in
Section 1.01(g) of this Agreement.
(m) "COMPANY ADVISER" shall have the meaning assigned to it
in Section 1.02(a) of this Agreement.
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(n) "COMPANY PERMITS" shall have the meaning assigned to it
in Section 4.12(b) of this Agreement.
(o) "COMPANY SEC REPORTS" shall have the meaning assigned to
it in Section 4.05(a) of this Agreement.
(p) "COMPANY SECURITIES" shall have the meaning assigned to
it in Section 3.02(b) of this Agreement.
(q) "CONFIDENTIALITY AGREEMENT" shall have the meaning
assigned to it in Section 6.02(a) of this Agreement.
(r) "CONSIDERATION CALCULATION DATE" shall have the meaning
assigned to it in Section 1.01(a) of this Agreement.
(s) "COSTS" shall have the meaning assigned to it in Section
6.10(a) of this Agreement.
(t) "DGCL" shall have the meaning assigned to it in Section
6.10(a) of this Agreement.
(u) "D&O INSURANCE" shall have the meaning assigned to it in
Section 6.10(b) of this Agreement.
(v) "EXCHANGE ACT" means the United States Securities
Exchange Act of 1934, as amended, and the rules and regulations
thereunder.
(w) "EXCHANGE AGENT" shall have the meaning assigned to it in
Section 3.02(b).
(x) "EXCHANGE RATIO" shall have the meaning assigned to it in
Section 1.01(a) of this Agreement.
(y) "FORM OF ELECTION" shall have the meaning assigned to it
in Section 3.02(b) of this Agreement.
(z) "FORMS S-4" shall have the meaning assigned to it in
Section 1.01(a).
(aa) "GOVERNMENTAL ENTITY" shall have the meaning assigned to
it in Section 4.04 of this Agreement.
(bb) "HSR ACT" shall have the meaning assigned to it in
Section 4.04 of this Agreement.
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(cc) "ILLEGALITY" shall have the meaning assigned to it in
Section 1.01(h) of this Agreement.
(dd) The term "INCLUDING" shall be deemed to be followed by
the phrase "without limitation."
(ee) "INDEMNIFIED PARTIES" shall have the meaning assigned to
it in Section 6.10(a) of this Agreement.
(ff) "INITIAL EXCHANGE RATIO" shall have the meaning assigned
to it in Section 1.01(a) of this Agreement.
(gg) The term "HEREBY" shall be deemed to refer to this
Agreement in its entirety, rather than to any Article, Section, or
other portion of this Agreement.
(hh) "MATERIAL ADVERSE EFFECT" shall mean (i) any change in or
effect on the business of the Company that is or would be reasonably
expected to be materially adverse to any of the condition (financial or
otherwise), business, properties, assets, liabilities or results of
operations of the Company and its Subsidiaries taken as a whole;
provided, however, that any such effect resulting from any adverse
change (i) in Applicable Law relating to the broadcasting or television
industries or in generally accepted accounting principles or
interpretations thereof or (ii) economic or business conditions in the
broadcasting or television industries shall not be considered when
determining whether a Material Adverse Effect has occurred.
(ii) "MATERIAL CONTRACT" shall have the meaning assigned to it
in Section 4.12(b) of this Agreement.
(jj) "MINORITY BUY-OUT" shall have the meaning assigned to it
in Section 1.06 of this Agreement.
(kk) "MIX AND MATCH ELECTION" shall have the meaning assigned
to it in Section 1.01(a) of this Agreement.
(ll) "NETHERLANDS MERGER CODE" shall mean the rules of conduct
which have to be taken into account in connection with the preparation
and making of a public offer for Shares and accomplishing mergers of
business, as formulated by the Committee and in effect from time to
time (SER-besluit Fusiegedragsregels 1975).
(mm) "OFFER" shall have the meaning assigned to it in
Section 1.01(a) of this Agreement.
(nn) "OFFER CONDITIONS" shall have the meaning assigned to it
in Section 1.01(a) of this Agreement.
(oo) "OFFER DOCUMENTS" means, collectively, the U.S. Offer
Documents and The Netherlands Offer Documents.
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(pp) "PERSON" shall mean any individual, corporation, limited
liability company, partnership, association, trust, estate or other
entity or organization.
(qq) "PLAN" shall have the meaning assigned to it in
Section 4.09(a) of this Agreement.
(rr) "POTENTIAL ACQUIROR" shall have the meaning assigned to
it in Section 6.02(b) of this Agreement.
(ss) "PURCHASER DISCLOSURE LETTER" shall have the meaning
assigned to it in Article V of this Agreement.
(tt) "PURCHASER MATERIAL ADVERSE EFFECT" shall have the same
meaning as "Material Adverse Effect" as defined above, except that
references therein to the "COMPANY" shall be read to substitute
"PURCHASER" therefor.
(uu) "PURCHASER PERMITS" shall have the meaning assigned to
it in Section 5.07(b) of this Agreement.
(vv) "PURCHASER SHARES" shall have the meaning assigned to it
in Section 1.01(a) of this Agreement.
(ww) "REGISTRATION STATEMENT" shall have the meaning assigned
to in Section 1.01(f) of this Agreement.
(xx) "SCHEDULE 14D-9" shall have the meaning assigned to it
in Section 1.02(b) of this Agreement.
(yy) "SDNY" shall have the meaning assigned to it in Section
9.03 of this Agreement.
(zz) "SEC" shall have the meaning assigned to it in Section
1.01(a) of this Agreement.
(aaa) "SECURITIES ACT" means the United States Securities Act
of 1933, as amended, and the rules and regulations thereunder.
(bbb) "SHARES" means the outstanding shares of the common
stock of the Company, par value USD 1.50 per share, and any rights of
issued and outstanding shares of the common stock of the Company that
are held in the name of nominee Amsterdam Stock Exchange NV (ASAS).
(ccc) "SHARE SPLIT" shall have the meaning assigned to it in
Section 1.01(a) of this Agreement.
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(ddd) "SCHEDULE TO" shall have the meaning assigned to it in
Section 1.01(b) of this Agreement.
(eee) The term "SUBSIDIARY" shall mean, when used with
reference to an entity, any other entity of which securities or other
ownership interests having ordinary voting power to elect a majority of
the board of directors or other persons performing similar functions,
or a majority of the outstanding voting securities of which, are owned
directly or indirectly by such entity.
(fff) "SUBSIDIARY SECURITIES" shall have the meaning assigned
to it in Section 3.02(b) of this Agreement.
(ggg) "SUPERIOR PROPOSAL" shall have the meaning assigned to
it in Section 6.02(f) of this Agreement.
(hhh) "TAKEOVER LAWS" shall have the meaning assigned to it in
Section 1.02(a) of this Agreement.
(iii) "TAX" shall mean all taxes, charges, fees, levies,
imposts, duties, and other assessments, including any income,
alternative minimum or add-on tax, estimated, gross income, gross
receipts, sales, use, transfer, transactions, intangibles, ad valorem,
value-added, franchise, registration, title, license, capital, paid-up
capital, profits, withholding, employee withholding, payroll, worker's
compensation, unemployment insurance, social security, employment,
excise (including the federal communications excise tax under Section
4251 of the Code), severance, stamp, transfer occupation, premium,
recording, real property, personal property, federal highway use,
commercial rent, environmental (including taxes under Section 59A of
the Code) or windfall profit tax, custom, duty or other tax, fee or
other like assessment or charge of any kind whatsoever, together with
any interest, penalties, related liabilities, fines or additions to tax
that may become payable in respect thereof imposed by any country, any
state, county, provincial or local government or subdivision or agency
thereof.
(jjj) "TERMINATION FEE" shall have the meaning assigned to it
in Section 8.03(b) of this Agreement.
(kkk) "TRIGGER EVENT" shall have the meaning assigned to it in
Section 1.01(a) of this Agreement.
(mmm) "US$" means United States Dollars.
(nnn) "U.S. BUSINESS DAY" shall mean any day on which the SEC
is open for business.
(ooo) "U.S. OFFER DOCUMENTS" shall have the meaning assigned
to it in Section 1.01(e) of this Agreement.
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IN WITNESS WHEREOF, each of the parties has caused this Agreement
to be executed on its behalf by its officers thereunto duly authorized,
all at or on the day and year first above written.
UNITED PAN-EUROPE COMMUNICATIONS N.V.
By: /s/ Xxxxxxx Xxxxxxx By: /s/ Anton Tuijten
-------------------- ---------------------
Name: Xxxxxxx Xxxxxxx Name: Anton Tuijten
Title: Managing Director /Chief Title: General Counsel / POA
Financial Officer
SBS BROADCASTING S.A.
By: /s/ Xxxxx Xxxxx Xxxxx By: /s/ Xxxxxx X. Xxxxxx
---------------------- -----------------------
Name: Xxxxx Xxxxx Xxxxx Name: Xxxxxx X. Xxxxxx
Title: Chairman and Chief Executive Title: Vice Chairman and Chief Operating
Officer Officer
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EXHIBIT A
CONDITIONS TO THE OFFER
Capitalized terms used in this Exhibit A and not otherwise
defined herein shall have the meanings assigned to them in the
Agreement to which it is attached (the "EXCHANGE OFFER AGREEMENT").
Notwithstanding any other provision of the Offer, Purchaser
shall not be required to accept for payment, purchase or pay for any
Shares tendered in connection with the Offer and may terminate or,
subject to the terms of the Exchange Offer Agreement, amend the Offer
as to Shares not then paid for, if (i) there shall not be validly
tendered and not properly withdrawn prior to the expiration of the
initial offering period for the Offer (the "EXPIRATION DATE") that
number of Shares which, together with any Shares beneficially owned by
Purchaser or any of its affiliates, represents at least two-thirds of
the total number of outstanding Shares on a fully-diluted basis on the
date of purchase (the "MINIMUM TENDER CONDITION"), (ii) the
Registration Statement on Form S-4 shall not have been declared
effective by the SEC, (iii) (A) any applicable waiting period under the
HSR Act or approval required by the European Union Merger Task Force
shall not have expired, been terminated, or received, as applicable,
prior to the Expiration Date, or (B) any applicable waiting period or
approval required or which is appropriate under any relevant
competition or anti-trust laws and regulations in any Member State of
the European Union or any other relevant country (including
Switzerland, but excluding any cross-media ownership restrictions in
Hungary) shall not have expired, been terminated, or received, as
applicable, prior to the Expiration Date, the consequence of which in
the case of either (A) or (B) would reasonably be likely to have any of
the effects set forth in (a)(5) below, or (iv) at any time on or after
the date of the Exchange Offer Agreement and prior to the time of
payment for any Shares, any of the following conditions shall exist and
be continuing:
(a) there shall have been any statute, rule, regulation,
legislation, interpretation, judgment, order or injunction,
promulgated, enacted, entered, enforced, issued or amended, in each
case by a Governmental Entity applicable to the Purchaser, the Company,
or any of their respective affiliates that would reasonably be expected
to:
(1) make the acceptance for payment of, or payment
for or purchase of all or a substantial number of the Shares
pursuant to the Offer illegal, or otherwise prohibit the
consummation of the Offer;
(2) result in a material delay in or restrict (other
than in an immaterial way) the ability of Purchaser to accept
for payment, pay for or purchase pursuant to the Offer at
least such number of the Shares necessary to satisfy the
Minimum Tender Condition;
(3) render Purchaser unable to accept for payment or
pay for or purchase pursuant to the Offer at least such number
of Shares necessary to satisfy the Minimum Tender Condition;
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(4) impose material limitations (which shall not be
deemed to include any required compliance with the U.S.
federal securities laws) on the ability of Purchaser, its
Subsidiaries or affiliates to acquire or hold, transfer or
dispose of, or effectively to exercise all rights of ownership
of, all or a substantial number of the Shares, including the
right to vote the Shares purchased by it pursuant to the Offer
on an equal basis with all other Shares on all matters
properly presented to the shareholders of the Company;
(5) require the divestiture by Purchaser of a
material portion of any Shares (provided, however, that any
divestiture causing Purchaser to own less than the number of
Shares necessary to satisfy the Minimum Tender Condition shall
be deemed to be material), or require Purchaser or the Company
or any of their respective Subsidiaries or affiliates to
dispose of or hold separate all or any material portion of the
business, assets or properties of the Company and its
Subsidiaries taken as a whole (excluding Hungary by reason of
cross-media ownership restrictions), or impose any material
limitations on the ability of any of such entities to conduct
their businesses or own assets or properties material to the
Company and its Subsidiaries taken as a whole (excluding
Hungary by reason of cross-media ownership restrictions) or on
the ability of Purchaser to own a material portion of Shares
(provided, however, that any divestiture causing Purchaser to
own less than the number of Shares necessary to satisfy the
Minimum Tender Condition shall be deemed to be material), or
on the ability of Purchaser to conduct the business of the
Company and its Subsidiaries and own the assets and properties
of the Company and its Subsidiaries; or
(6) impose any material limitations on the ability of
Purchaser or any of its Subsidiaries or affiliates effectively
to control the business or operations of the Company and its
Subsidiaries;
(b) there shall have been instituted or be pending any action
or proceeding by any Governmental Entity challenging the making of the
Offer or the acquisition by Purchaser of the Shares pursuant to the
Offer which can reasonably be expected to result, directly or
indirectly, in any of the consequences referred to in clauses (1)
through (6) of paragraph (a) above;
(c) there shall have occurred and be continuing (1) any
general suspension of, or limitation on trading in securities on The
New York Stock Exchange or NASDAQ (other than any suspension or
limitation on trading in any particular security as a result of a
computerized trading limit or any intraday suspension due to "circuit
breakers"), (2) the declaration of any banking moratorium or any
suspension of payments in respect of banks or any limitation (whether
or not mandatory) on the extension of credit by lending institutions in
the United States, the United Kingdom or Germany, or (3) a decline at
any time for any three trading days in any consecutive five trading day
period of both (A) 30% or more in the Eurotop 300 index, as measured
against the closing value on the trading day immediately preceding the
date of this Agreement and (B) 20% or more in the closing sales price
per Purchaser Share as reported by NASDAQ, as measured against US$210;
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(d) any Person or "group" (as such term is used in Section
13(d)(3) of the Exchange Act) other than Purchaser or any of its
affiliates shall have become the beneficial owner (as that term is used
in Rule 13d-3 under the Exchange Act) of more than 25% of the
outstanding Shares;
(e) all consents, approvals, licenses, authorisations,
registrations, notices or other filings (including, without limitation,
broadcast licenses) (other than under any cross-media ownership
restrictions in Hungary) required to be obtained or made by the Company
or the Purchaser with or from any Governmental Entity or third party
(other than the Purchaser or any of its affiliates) in connection with
the execution, delivery and performance of the Exchange Offer
Agreement, the Offer and the transactions contemplated by the Exchange
Offer Agreement shall not have been obtained or made and such failure
would reasonably be expected to have a Material Adverse Effect on the
Company or the Purchaser or a material adverse effect on the ability of
the parties to consummate the transactions contemplated hereby;
(f) there shall have occurred any change, condition, event or
development that, individually or in the aggregate, has had or is
reasonably likely to have, a Material Adverse Effect with respect to
the Company;
(g) the Company shall have breached or failed to comply in
any material respect with any of its material obligations, covenants,
or agreements under the Exchange Offer Agreement, or any representation
or warranty of the Company contained in the Exchange Offer Agreement
that is qualified by reference to a Material Adverse Effect thereof
shall not be true and correct because there has been a Material Adverse
Effect, or any other representation or warranty shall not be true and
correct in any respect that (when taken together with all such other
representations and warranties not true and correct) has had or would
reasonably be likely to have a Material Adverse Effect, in each case as
of when made or at and as of any time thereafter, and which is
continuing;
(h) the Exchange Offer Agreement shall have been terminated
pursuant to its terms or shall have been amended pursuant to its terms
to terminate the Offer; or
(i) the Committee shall have issued in connection with the
Offer, a public admonition as a consequence of infringement by the
Company or any of its Subsidiaries of any of the stipulations of
Chapters I, II or III of the Netherlands Merger Code prior to the date
on which the Offer expires;
which, in the good faith judgment of Purchaser, in any case, giving rise to any
such condition, makes it inadvisable to proceed with the Offer or with
acceptance for payment or payment for Shares.
The foregoing conditions are for the sole benefit of Purchaser and may be
asserted or waived by Purchaser in whole or in part at any time or from time to
time in its discretion subject to the terms and conditions of the Exchange Offer
Agreement. The failure of Purchaser at any time to exercise any of the foregoing
rights shall not be deemed a waiver of any such right and each such right shall
be deemed an ongoing right which may be asserted at any time and from time to
time.
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