EXHIBIT 10.1
EXCHANGE OFFER AGREEMENT
BETWEEN
UNITED PAN-EUROPE COMMUNICATIONS N.V.
AND
SBS BROADCASTING S.A.
Dated as of March 9, 2000
TABLE OF CONTENTS
(continued)
Page
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 3.09. Employee Benefit Matters...................................16
Section 4.10. Litigation, etc............................................17
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TABLE OF CONTENTS
(continued)
Section 4.11. Tax Matters................................................17
Section 4.12. Compliance with Law; No Default............................18
Section 4.14. Intellectual Property......................................18
Section 4.15. Title to Properties. Entire Business.......................18
Section 4.16. Convertible Notes and Warrants.............................19
Section 4.17 Foreign Private Issuer.....................................19
Section 4.18. Material Contracts.........................................19
Section 4.19. 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...............................20
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
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TABLE OF CONTENTS
(continued)
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
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
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TABLE OF CONTENTS
(continued)
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........................................36
EXHIBIT A CONDITIONS TO THE OFFER....................................37
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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
Section 1.01. Exchange Offer.
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(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
3
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
4
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
5
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
6
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 ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
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
7
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 ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇ 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
8
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
9
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
10
prospectuses contained therein) for so long as such Company Options
remain outstanding.
(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
11
(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.
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
12
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
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 ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ 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
13
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 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.
14
(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.
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.
15
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 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
16
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.
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.
17
(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.
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
18
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 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.
19
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, 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
20
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.
(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.
21
(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 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
22
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 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
-------
▇▇▇▇▇▇▇ ▇▇▇▇▇ 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
23
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;
(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;
24
(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 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
25
(t) agree in writing or otherwise to take any of the foregoing
actions.
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
26
than by Purchaser) or (iv) enter into any letter of intent, agreement
in principle, acquisition agreement or other agreement to effect any
Acquisition Proposal.
(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
27
deliver to the Company all documents obtained by it or any of its
representatives then in their possession and any copies thereof.
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.
28
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
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
29
settlement of any claim effected without Purchaser's consent, which
consent shall not be unreasonably withheld.
(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;
30
(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 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
31
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 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.
32
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 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
33
("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 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.
▇▇▇▇. ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇
▇▇ ▇▇▇ ▇▇▇▇▇
1070 BT Amsterdam, The Netherlands
Attention: General Counsel
Facsimile: ▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇
Telephone: ▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇
with copies to:
▇▇▇▇▇▇▇▇ Chance ▇▇▇▇▇▇ & ▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
Facsimile: ▇▇-▇▇▇-▇▇▇-▇▇▇▇
Telephone: ▇▇-▇▇▇-▇▇▇-▇▇▇▇
34
and to:
▇▇▇▇▇▇▇▇ Chance Limited Liability Partnership
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
Facsimile: ▇▇▇-▇▇▇-▇▇▇-▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇-▇▇▇▇
if to the Company:
SBS Broadcasting S.A.
▇-▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇-▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇
Attention: Corporate Secretary
Facsimile: ▇▇▇▇-▇▇-▇▇-▇▇
Telephone: ▇▇▇▇-▇▇-▇▇-▇▇
with copies to:
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
St. ▇▇▇▇▇'▇ House
▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq
Facsimile: ▇▇▇-▇▇-▇▇▇▇-▇▇▇▇
Telephone: ▇▇▇-▇▇-▇▇▇▇-▇▇▇▇
and to:
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇
▇-▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇
▇-▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇, Esq.
Facsimile: ▇▇▇▇-▇▇-▇▇-▇▇
Telephone: ▇▇▇▇-▇▇-▇▇-▇▇
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.
35
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.
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.
36
(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.
(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.
37
(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.
(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.
38
(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.
(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.
39
(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.
(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
40
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.
41
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/S
-------------------------------------
Name: Anton Tuijten
Title: General Counsel/POA
By: S/S
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Managing Director
SBS BROADCASTING S.A.
By: S/S
-------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
Title: Chairman and Chief Executive Officer
By: S/S
-------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice Chairman and Chief Operating Officer
42
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;
43
(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;
44
(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.
45
