Exhibit 4.2
SHARE ISSUANCE AGREEMENT
SHARE ISSUANCE AGREEMENT ("AGREEMENT"), entered into this 30th day of
December, 2002, by and between GILAT SATELLITE NETWORKS LTD., a company formed
under the laws of the State of Israel (the "COMPANY"), and SES AMERICOM, INC., a
corporation formed under the laws of the State of Delaware ("SES").
WITNESSETH
WHEREAS, the Company's wholly owned subsidiary, Spacenet Inc.
("SPACENET"), desires to enter into an agreement (the "SPACENET-SES AGREEMENT")
with SES substantially in the form attached hereto as EXHIBIT A, which provides
for, among other things, (i) the termination of certain transponder service
agreements between Spacenet and SES and (ii) the right of Spacenet to defer
certain payments due to SES under certain transponder service agreements between
Spacenet and SES;
WHEREAS, StarBand Communications Inc., a Delaware corporation in which
the Company curently indirectly holds an approximately 35% interest on a fully
diluted basis ("STARBAND"), desires to enter into an agreement (the
"STARBAND-SES AGREEMENT") with SES substantially in the form attached hereto as
EXHIBIT B;
WHEREAS, in consideration of SES entering into the Spacenet-SES
Agreement and the StarBand-SES Agreement, the Company has agreed to enter into
this Agreement pursuant to which the Company will issue SES ordinary shares and
other securities in the Company on the terms and conditions set forth herein;
and
WHEREAS, the Company intends to propose an arrangement ("ARRANGEMENT")
to certain of its creditors under Section 350 of the Israeli Companies Law -
1999, which Arrangement will include the transactions contemplated by this
Agreement, the Spacenet-SES Agreement and the StarBand-SES Agreement, and will
be voted on at meetings of creditors to be convened under the supervision of the
District Court of Tel Aviv-Yafo (the "ISRAELI COURT").
NOW THEREFORE, in consideration of the covenants and promises set forth
herein, the parties agree as follows:
1. PURCHASE AND SALE OF SHARES.
(a) Subject to the terms and conditions set forth herein, the
Company agrees to issue to SES an aggregate of fourteen million two hundred
sixty one thousand and forty eight (14,261,048) ordinary shares of the Company,
par value NIS 0.01 per share (the "SECURITIES"). The Securities will constitute
5.5% of the issued and outstanding share capital of Company immediately
following the issuance of the securities contemplated by the Arrangement, and
taking into account the issuance of the Securities, as shown by the
capitalization table attached hereto as EXHIBIT C.
(b) The closing of the issuance of the Securities shall take
place at the offices of the Company, at 11:00 a.m. within two business days of
the satisfaction of the
conditions set forth in Section 3, or at such other time and place as the
parties mutually agree upon orally or in writing (the "CLOSING"). At such
Closing, (i) SES shall deliver to the Company an executed original of each of
the Spacenet-SES Agreement and the StarBand-SES Agreement and all other
documents to be executed or delivered in connection therewith, and (ii) the
Company shall deliver to SES a share certificate registered in the name of SES,
representing the Securities.
2. INVESTMENT REPRESENTATIONS. SES makes the following investor
representations to the Company:
(a) INVESTMENT INTENT. SES is acquiring the Securities for its
own account for investment purposes only and not with a view to or for
distributing or reselling such Securities or any part thereof or interest
therein.
(b) PURCHASER STATUS. At the time SES was offered the
Securities, it was, and at the date hereof, it is, and at the Closing Date, it
will be, an "accredited investor" as defined in Rule 501(a) under the Securities
Act of 1933, as amended (the "Securities Act").
(c) EXPERIENCE. SES either alone or together with its
representatives, has such knowledge, sophistication and experience in business
and financial matters so as to be capable of evaluating the merits and risks of
the prospective investment in the Securities, and has so evaluated the merits
and risks of such investment.
(d) ABILITY OF SES TO BEAR RISK OF INVESTMENT. SES is able to
bear the economic risk of an investment in the Securities and, at the present
time, is able to afford a complete loss of such investment.
(e) ACCESS TO INFORMATION. SES acknowledges that it has been
afforded (i) the opportunity to ask such questions as it has deemed necessary
of, and to receive answers from, representatives of the Company concerning the
Securities, the proposed Arrangement and the proceedings with respect thereto in
the Israeli Court and; (ii) access to information about the Company and the
Company's financial condition, results of operations, business, properties,
management and prospects sufficient to enable it to evaluate its investment.
(f) RELIANCE. SES understands and acknowledges that (i) the
Securities are being issued to it without registration under the Securities Act
in a private placement that is exempt from the registration provisions of the
Securities Act and (ii) the availability of such exemption, depends in part on,
and the Company will rely upon the accuracy and truthfulness of, the foregoing
representations and SES hereby consents to such reliance.
3. CONDITIONS TO CLOSING. The obligation of SES to acquire the Securities,
and the obligation of the Company to issue the Securities, are each subject to
(i) the approval of the Arrangment by the Israeli Court within 90 days of the
date of this Agreement (such approval not to be inconsistent with the terms of
this Agreement), (ii) the entry of an order of enforcement of the Arrangement by
the United States Bankruptcy Court for the District of Delaware under Xxxxxxx
000 xx xxx Xxxxxx Xxxxxx Bankruptcy Code within 45 days of such approval by the
Israeli Court (such order not to be inconsistent with the terms of this
Agreement)and (iii) the approval of the transactions contemplated by this
Agreement by the shareholders of the Company within 90 days of the entry of the
order referenced in clause (ii) of this Section 3 (such approval not to be
inconsistent with the terms of this Agreement). The parties agree that in the
event that these conditions are not
2
satisfied, this Agreement shall be null and void, and the parties shall be
returned to their original positions as if this Agreement had never been
executed.
4. TRANSFER RESTRICTIONS.
(a) Securities may only be disposed pursuant to an effective
registration statement under the Securities Act, to the Company or pursuant to
an available exemption from or in a transaction not subject to the registration
requirements of the Securities Act.
(b) SES agrees to the imprinting, so long as is required by
this Section 4.1(b), of the following legend on the Securities:
NEITHER THESE SECURITIES NOR THE SECURITIES INTO WHICH THESE SECURITIES
ARE EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE , AND,
ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT") OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR
IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.
Securities shall not contain the legend set forth above nor
any other if in the opinion of counsel to the Company such legend is not
required under applicable requirements of the Securities Act (including judicial
interpretations and pronouncements issued by the staff of the Commission).
5. VOTE FOR ARRANGEMENT. SES agrees that, if the Israeli Court requires or
requests that shareholders of the Company have the opportunity to vote on the
Arrangement at a meeting of shareholders convened under the supervision of the
Israeli Court, SES will vote all of the ordinary shares of the Company that it
holds in favor of the Arrangement presented to the creditors and shareholders of
the Company.
6. COMPANY REPRESENTATIONS. The Company warrants and represents to SES
that:
(a) upon the issuance of ordinary shares of the Company to
holders of the Company's 4.25% Convertible Subordinated Notes due 2005 (the
"Existing Notes") pursuant to the Arrangement ("Completion of the Arrangement"),
and after giving effect to the transactions contemplated by this Agreement, the
authorized capital stock of the Company shall consist of 300,000,000 ordinary
shares;
(b) assuming the Arrangement as described in the proxy
solicitation sent to holders of the Existing Notes is approved by creditors of
the Company in accordance with Israeli law, Exhibit C sets forth the
capitalization structure of the Company upon Completion of the Arrangement,
after giving effect to the transactions contemplated by this Agreement;
(c) except as indicated on Exhibit C, and except for options
to purchase 8,676,213 ordinary shares of the Company issued to employees of the
Company at exercise prices ranging from $120 per share to approximately $2 per
share, and a warrant granted to Knowledge Xxxxxxxxxxxx.xxx LLC that upon
satisfaction of certain conditions is exercisable
3
into approximately 191,000 ordinary shares of the Company at an exercise price
of $157.05 per share, there are no options, warrants, conversion privileges,
subscription or purchase rights or other rights presently outstanding to
purchase or otherwise acquire (i) any authorized but unissued, unauthorized or
treasury shares of the Company's capital stock, (ii) any "Stock Equivalents" (as
defined below), or (iii) other securities of the Company, and there are no
commitments, contracts, agreements, arrangements or understandings by the
Company to issue any shares of the Company's capital stock or any Stock
Equivalents or other securities of the Company; and
(d) the Securities are duly authorized, and when issued to SES
will be validly issued, fully paid and non-assessable and will be free and clear
of all liens.
"Stock Equivalents" means any security or obligation which is by its
terms convertible into or exchangeable for ordinary shares of the Company or
other securities of the Company, and any option, warrant or other subscription
or purchase right with respect to ordinary shares or such other securities.
7. ASSIGNMENT This Agreement may not be assigned, in whole or in part, by
SES without the prior written consent of the Company, except that SES may assign
this Agreement to an affiliate of SES without the consent of the Company.
8. RIGHTS OF SECURITIES The Securities shall have those rights attached to
them as are set forth in the Company's Articles of Association, as same may be
amended from time to time.
9. GOVERNING LAW This Agreement shall be governed by and construed under
the laws of the State of Israel, without giving effect to principles of conflict
of laws.
10. NOTICES Any notice under this Agreement shall be in writing and shall
be deemed effective (i) upon personal delivery to the party to be notified, (ii)
the business day following the date of mailing by a internationally recognized
overnight courier service or (iii) five (5) business days after deposit with a
national post office, for dispatch by registered or certified mail, postage
prepaid and addressed to the party to be notified (A) if to the Company, to 00
Xxxxx Xxxxxxx Xxxxxx, Xxxxxx Xxxxx, Xxxxx Xxxxx, 00000, Israel, Attention: Xxxx
Xxxxxxxxxx and (B) if to SES, to Four Xxxxxxxx Xxx, Xxxxxxxxx, Xxx Xxxxxx 00000,
XXX, Attention: General Counsel, or in each case at such other address as such
party may designate by ten (10) days' advance written notice to the other party.
11. AMENDMENTS AND WAIVERS No provision of this Agreement may be amended or
waived, except by the written instrument signed by all the parties hereto or, in
the case of a waiver, by the party against whom enforcement os such waiver is
sought.
12. SEVERABILITY If one or more provisions of this Agreement are held to be
unenforceable under applicable law, such provision shall be excluded from this
Agreement and the balance of the Agreement shall be interpreted as if such
provision were so excluded and shall be enforceable in accordance with its
terms.
13. ENTIRE AGREEMENT This Agreement, together with the Spacenet-SES
Agreement and the StarBand-SES Agreement, contains the entire understanding of
the parties with respect to the subject matter hereof and supersedes all prior
agreements and understandings with respect to such matters.
4
14. EXECUTION This Agreement may be executed in two counterparts, all of
which when taken together shall be considered one and the same agreement and
shall become effective when counterparts have been signed by each party and
delivered to the other party, it being understood that both parties need not
sign the same counterpart
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
GILAT SATELLITE NETWORKS LTD.
By:____________________________
Name:
Title
SES AMERICOM, INC.
By:____________________________
Name:
Title
5
EXHIBIT C
CAPITALIZATION TABLE
6
