EXHIBIT 7(c)(1)
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
LIBERTY MEDIA CORPORATION,
LIBERTY TVGIA, INC.,
THE NEWS CORPORATION LIMITED
AND
NEWS PUBLISHING AUSTRALIA LIMITED
DATED AS OF NOVEMBER 27, 2001
TABLE OF CONTENTS
Page
----
ARTICLE I DEFINITIONS ................................................... 1
Section 1.1 Definitions ........................................ 1
Section 1.2 Terms .............................................. 9
ARTICLE II THE MERGER ................................................... 10
Section 2.1 The Merger ......................................... 10
Section 2.2 Effective Time of the Merger ....................... 10
Section 2.3 Closing ............................................ 10
Section 2.4 Effects of the Merger .............................. 11
Section 2.5 Certificate of Incorporation and By-Laws ........... 11
Section 2.6 Directors .......................................... 11
Section 2.7 Officers ........................................... 11
Section 2.8 Role of NPAL ....................................... 11
Section 2.9 Tax Effect ......................................... 11
ARTICLE III CONVERSION OF SHARES ........................................ 11
Section 3.1 Conversion of Capital Stock ........................ 11
Section 3.2 Exchange of Certificates ........................... 14
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF LMC AND LTVGIA ............. 15
Section 4.1 Organization and Qualifications .................... 15
Section 4.2 Capitalization; No Liens ........................... 16
Section 4.3 Authority Relative to This Agreement ............... 16
Section 4.4 No Conflict; Required Filings and Consents ......... 17
Section 4.5 Gemstar Shares are LTVGIA's Sole Asset; No LTVGIA
Liabilities ........................................ 17
Section 4.6 Litigation ......................................... 18
Section 4.7 Tax Matters ........................................ 18
Section 4.8 Brokers ............................................ 19
ARTICLE V REPRESENTATIONS AND WARRANTIES OF TNCL ........................ 19
Section 5.1 Organization and Qualifications ................... 19
Section 5.2 Validity of ADSs and TNCL Shares .................. 19
Section 5.3 Authority Relative to This Agreement .............. 20
Section 5.4 No Conflict; Required Filings and Consents ........ 20
Section 5.5 Absence of Certain Changes or Events .............. 21
Section 5.6 Litigation ........................................ 21
Section 5.7 Capitalization .................................... 22
Section 5.8 Brokers ........................................... 22
Section 5.9 NPAL .............................................. 22
Section 5.10 Foreign Private Issuer ............................ 22
Section 5.11 Disclosure ........................................ 22
-i-
ARTICLE VI CONDUCT PENDING THE MERGER ................................... 22
Section 6.1 Prohibited Actions ................................. 22
Section 6.2 TNCL Covenants ..................................... 24
ARTICLE VII ADDITIONAL COVENANTS ........................................ 24
Section 7.1 Approvals .......................................... 24
Section 7.2 Access to Information .............................. 25
Section 7.3 Further Action ..................................... 25
Section 7.4 Public Announcements ............................... 25
Section 7.5 Notification of Certain Matters .................... 26
Section 7.6 Certain Tax Matters ................................ 26
Section 7.7 Australian Treasury Matters ........................ 30
ARTICLE VIII CONDITIONS TO THE MERGER ................................... 30
Section 8.1 Conditions to Each Party's Obligation to Effect
the Merger ......................................... 30
Section 8.2 Conditions to Obligations of LMC and LTVGIA to
Effect the Merger .................................. 31
Section 8.3 Conditions to Obligations of TNCL and NPAL to
Effect the Merger .................................. 32
ARTICLE IX TERMINATION, WAIVER, AMENDMENT ............................... 33
Section 9.1 Termination by Mutual Consent ...................... 33
Section 9.2 Termination by either TNCL or LMC .................. 34
Section 9.3 Termination by TNCL ................................ 34
Section 9.4 Termination by LMC ................................. 34
Section 9.5 Effect of Termination and Abandonment .............. 34
ARTICLE X INDEMNIFICATION ............................................... 35
Section 10.1 General Indemnification ........................... 35
Section 10.2 Third Party Action Indemnification Procedures ..... 35
Section 10.3 Benefits of Indemnification ....................... 36
Section 10.4 Non-Exclusive Remedy .............................. 36
Section 10.5 Tax Effects of Indemnification .................... 37
ARTICLE XI MISCELLANEOUS ................................................ 37
Section 11.1 Survival of Representations and Warranties ....... 37
Section 11.2 Expenses ......................................... 37
Section 11.3 Counterparts ..................................... 38
Section 11.4 Governing Law; Waiver of Jury Trial .............. 38
Section 11.5 Specific Performance ............................. 39
Section 11.6 Notices .......................................... 39
Section 11.7 Entire Agreement ................................. 40
Section 11.8 No Third Party Beneficiaries ..................... 40
Section 11.9 Binding Effect; Assignment ....................... 40
Section 11.10 Headings ......................................... 40
Section 11.11 Severability ..................................... 40
Section 11.12 Further Assurances ............................... 41
-ii-
EXHIBITS:
A - Certificate of Merger
B - Amended Registration Rights Agreement
C - Tax Certificate
-iii-
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of November 27, 2001, by and among
LIBERTY MEDIA CORPORATION, a Delaware corporation ("LMC"), LIBERTY TVGIA, INC.,
a Delaware corporation ("LTVGIA"), THE NEWS CORPORATION LIMITED (XXX 000 000
000), x Xxxxx Xxxxxxxxx corporation ("TNCL"), and NEWS PUBLISHING AUSTRALIA
LIMITED, a Delaware corporation ("NPAL").
RECITALS
WHEREAS, TNCL and LMC are parties to the September Letter Agreement,
pursuant to which, among other things, the parties agreed that Sky Global
Networks, Inc. ("SGN") would acquire the Gemstar Shares held by LTVGIA pursuant
to a tax-free merger; provided, that in the event that a Qualified SGN IPO (as
defined in the September Letter Agreement) did not occur by the date specified
therein (the "Outside Date"), then LMC and SGN would be under no obligation to
consummate the SGN/LTVGIA Transaction (as defined in the September Letter
Agreement) and would instead consummate the transactions contemplated hereby
pursuant to which NPAL will acquire all of the Gemstar Shares held by LTVGIA, in
exchange for American Depositary Shares representing TNCL Shares; and
WHEREAS, the parties acknowledge that the Qualified SGN IPO will not occur
prior to the Outside Date and, thus, it is the intention of the parties that
NPAL shall acquire the Gemstar Shares pursuant to this Agreement in a tax-free
merger of LTVGIA with and into NPAL (the "Merger") on the terms and conditions
contained herein and in accordance with the Delaware General Corporation Law
(the "DGCL") with the separate existence of LTVGIA ceasing and with NPAL
surviving and continuing as a subsidiary of TNCL; and
WHEREAS, the Boards of Directors of TNCL, NPAL, LMC and LTVGIA have
determined that the transactions contemplated by this Agreement including,
without limitation, the Merger, are advisable and in the best interests of their
respective corporations and stockholders, and such Boards of Directors have
approved this Agreement;
NOW, THEREFORE, in consideration of the mutual representations, warranties
and agreements contained herein and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties
hereto, intending to be legally bound hereby, agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Definitions. The following words and expressions have the
meanings set forth below:
Additional ADSs: as defined in Section 3.1(c)(ii)
hereof.
Additional Merger Consideration: as defined in Section 3.1(a) hereof.
Adjustment: the deemed increase in a Tax,
determined on a
transaction-by-transaction basis and
using the assumptions set forth in the
next sentence, resulting from an
adjustment made with respect to any
amount reflected or required to be
reflected on any Return relating to
such Tax. For purposes of determining
such deemed increase in Tax, the
following assumptions will be used: (a)
in the case of any Income Tax, the
highest marginal Tax rate or, in the
case of any other Tax, the highest
applicable Tax rate, in each case in
effect with respect to that Tax for the
Taxable period or any portion of the
Taxable period to which the adjustment
relates; and (b) such determination
shall be made without regard to whether
any actual increase in such Tax will in
fact be realized with respect to the
Return to which such adjustment relates
(as a result, for example, of losses,
credits or other offsets against Tax).
ADRs: American Depositary Receipts issued
under the terms of the Deposit
Agreement to evidence ADSs.
ADSs: American Depositary Shares, each
representing four (4) TNCL Shares as of
the date hereof.
Affiliate: with respect to any Person, any other
Person, directly or indirectly,
Controlling, Controlled by or under
common Control with such first Person.
Agreement: this Agreement and Plan of Merger,
including all Schedules and Exhibits
hereto.
Amended Registration Rights Agreement: as defined in Section 3.1(b)(ii)
hereof.
Applicable Law: any foreign, United States Federal,
state or local law, statute, ordinance,
rule, regulation, order, writ,
injunction, judgment, decree,
arbitration award, license, permit or
agency requirement of any Governmental
Entity.
ASIC: the Australian Securities and
Investment Commission.
ASX: the Australian Stock Exchange.
Australia: the Commonwealth of Australia.
-2-
Authorized Agent: as defined in Section 11.4(a) hereof.
Business Day: any day other than a Saturday, a Sunday
or a day on which banking institutions
in Denver, Colorado, or New York, New
York are authorized or obligated by law
or executive order to close.
CBCA: as defined in the recitals hereto.
Capital Stock: any and all shares, interests,
participations, or other equivalents
(however designated) of corporate
stock.
Certificate of Merger: as defined in Section 2.2 hereof.
Change in Tax Law: as defined in Section 7.6(k) hereof.
Claims: as defined in Section 10.1(a) hereof.
Closing: as defined in Section 2.3 hereof.
Closing Date: the date on which the Merger is
consummated.
Closing Price: of any security for any day, the last
reported sale price of such security
regular way or, in case no such
reported sale takes place on such day,
the average of the reported closing bid
and asked prices regular way, in either
case on the composite tape, or if such
security is not quoted on the composite
tape, on the principal United States
securities exchange registered under
the Exchange Act on which such security
is listed or admitted to trading, or if
such security is not listed or admitted
to trading on any such exchange, the
last reported sale price (or the
average of the quoted closing bid and
asked prices if there were no reported
sales) on The Nasdaq Stock Market or
any comparable quotation system, or if
such security is not quoted on The
Nasdaq Stock Market or any comparable
system, the average of the closing bid
and asked prices as furnished by any
member of the National Association of
Securities Dealers, Inc. selected from
time to time by TNCL for that purpose
or, in the absence of such quotations,
such other method of determining market
value as the Board of Directors shall
from time to time deem, in good faith,
to be fair.
Code: the U.S. Internal Revenue Code of 1986,
as amended.
Contractual Obligations: as defined in Section 4.4(a) hereof.
-3-
Control: the power, directly or indirectly, to
direct or cause the direction of the
management and policies of a Person,
whether by the ownership of voting
securities, by contract or otherwise.
Controlled Affiliate: with respect to any Person, an
Affiliate of such Person which such
Person Controls.
Controlled Affiliate Acquirer: as defined in Section 3.1(a) hereof.
Controlled Affiliate Acquirer Notice: as defined in Section 3.1(a) hereof.
Corporations Act: The Corporations Act (Commonwealth of
Xxxxxxxxx), 0000.
Custodian: Citicorp Nominees Pty Limited.
Deposit Agreement: the Amended and Restated Deposit
Agreement, dated as of December 3,
1996, among TNCL, the Depositary and
the holders from time to time of ADRs.
Depositary: Citibank, N.A., as the depositary
pursuant to the Deposit Agreement.
DGCL: as defined in the recitals hereto.
Effective Time: as defined in Section 2.2 hereof.
Exchange Act: as defined in Section 5.10 hereof.
Ex-Dividend Date: the date on which "ex-dividend" trading
commences for a Qualifying Dividend to
which Section 3.1(c)(ii) applies in the
over-the-counter market or the
principal exchange located in the
United States on which the ADSs are
then quoted or listed.
FATA: as defined in Section 8.2(d) hereof.
Final Determination: the final resolution of liability for
any Tax for a taxable period (A) by IRS
Form 870 or 870-AD (or any successor
forms thereto), on the date of
acceptance by or on behalf of the
taxpayer, or by a comparable form under
the laws of other jurisdictions; except
that a Form 870 or 870-A or comparable
form that reserves (whether by its
terms or by operation of law) the right
of the taxpayer to file a claim for
refund and/or the right of the taxing
authority to assert a further
deficiency shall not constitute a Final
Determination; (B) by a
-4-
decision, judgment, decree or other
order by a court of competent
jurisdiction, which has become final
and nonappealable; (C) by a closing
agreement or accepted offer in
compromise under Section 7121 or 7122
of the Code, or comparable agreements
under the laws of other jurisdictions;
(D) by any allowance of a refund or
credit in respect of an overpayment of
Tax, but only after the expiration of
all periods during which such refund
may be recovered (including by way of
offset) by the taxing jurisdiction; (E)
by any other final disposition,
including by reasons of the expiration
of the applicable statute of
limitations or by mutual agreement of
the parties.
GAAP: U.S. generally accepted accounting
principles.
Gemstar: Gemstar-TV Guide International, Inc., a
Delaware corporation (formerly known as
Gemstar International Group Limited).
Gemstar Rights Plan: the Second Amended and Restated Rights
Agreement, effective as of July 12,
2000, by and between Gemstar and
American Stock Transfer and Trust
Company, as rights agent, including the
Rights Certificates that may be issued
pursuant thereto.
Gemstar Side Letter: as defined in Section 6.1(d) hereof.
Gemstar Shares: the 16,761,150 shares of Gemstar Stock
held by LTVGIA as of the date hereof,
as adjusted as provided herein.
Gemstar Stock: the Common Stock, par value $.01 per
share, of Gemstar.
Gemstar Stockholders' Agreement: the Stockholders' Agreement, dated as
of October 4, 1999, by and among TNCL,
LMC, Xxxxx X. Xxxx and Gemstar.
Governmental Consent: as defined in Section 4.4(b) hereof.
Governmental Entity: as defined in Section 4.4(b) hereof.
Governmental Filing: as defined in Section 4.4(b) hereof.
HSR Act: as defined in Section 4.4(b) hereof.
-5-
Income Tax: any federal, state, local or foreign
income tax, including any interest,
penalty, or addition thereto.
Indemnified LMC Person: as defined in Section 10.1(a) hereof.
Indemnified Person: as defined in Section 10.2(a) hereof.
Indemnified TNCL Person: as defined in Section 10.1(b) hereof.
Indemnifying Person: as defined in Section 10.2(a) hereof.
Indemnity Payment: as defined in Section 10.5(b) hereof.
Legal Proceedings: as defined in Section 4.6 hereof.
Lien: any security interest, lien, claim,
pledge, charge or other encumbrance of
any nature whatsoever.
LMC: Liberty Media Corporation, a Delaware
corporation.
LMC Excluded Jurisdictions: as defined in Section 4.4(a) hereof.
LMC Material Adverse Effect as defined in Section 8.2(l) hereof.
Losses: as defined in Section 10.1(a) hereof.
LTVGIA: as defined in the preamble hereto.
LTVGIA Certificates: as defined in Section 3.1(a) hereof.
LTVGIA Material Adverse Effect: as defined in Section 4.1 hereof.
LTVGIA Merger Consideration: as defined in Section 3.1(a) hereof.
LTVGIA Shares: as defined in Section 3.1(a) hereof.
Measurement Period: as defined in Section 3.1(c)(ii)
hereof.
Merger: as defined in the recitals hereto.
Merger Consideration: as defined in Section 3.1(a) hereof.
Merger Filing: as defined in Section 2.2 hereof.
Non-Return Taxes: as defined in Section 7.6(d)(ii)
hereof.
NPAL: as defined in the preamble hereto.
-6-
NPAL/LUVSG Merger Agreement: the Agreement and Plan of Merger, dated
as of May 2, 2001, by and among TNCL,
NPAL, LMC and Liberty UVSG, Inc.
NYSE: as defined in Section 5.2 hereof.
Outside Date: as defined in the recitals hereto.
Overpayment Rate: as defined in Section 7.6(h) hereof.
Payment Date: as defined in Section 3.1(c)(ii)
hereof.
Person: any natural person or a partnership,
corporation or trust, unincorporated
organization, association, limited
liability company or other entity.
Pre-Closing Consolidated Returns: as defined in Section 7.6(d)(i) hereof.
Pre-Closing Non-Consolidated Returns: as defined in Section 7.6(d)(ii)
hereof.
Qualifying Dividend: as defined in Section 3.1(c)(ii)
hereof.
Representatives: as defined in Section 7.2 hereof.
Restricted Securities Letter Agreement: as defined in Section 5.2 hereof.
Restrictions: with respect to any capital stock,
partnership interest, membership
interest in a limited liability company
or other security, any voting or other
trust or agreement, option, warrant,
preemptive right, right of first offer,
right of first refusal, escrow
arrangement, proxy, buy-sell agreement,
power of attorney or other contract,
any law, rule, regulation, order,
judgment or decree which, conditionally
or unconditionally, (i) grants to any
Person the right to purchase or
otherwise acquire, or obligates any
Person to sell or otherwise dispose of
or issue, or otherwise results or,
whether upon the occurrence of any
event or with notice or lapse of time
or both or otherwise, may result in any
person acquiring, (A) any of such
capital stock or other security; (B)
any of the proceeds of, or any
distributions paid or which are or may
become payable with respect to, any of
such capital stock or other security;
or (C) any interest in such capital
stock or other security or any such
proceeds or distributions; (ii)
restricts or, whether upon the
occurrence of any event or with notice
or lapse of time or both or otherwise,
is
-7-
reasonably likely to restrict the
transfer or voting of, or the exercise
of any rights or the enjoyment of any
benefits arising by reason of ownership
of, any such capital stock or other
security or any such proceeds or
distributions; or (iii) creates or,
whether upon the occurrence of any
event or with notice or lapse of time
or both or otherwise, is reasonably
likely to create a Lien or purported
Lien affecting such capital stock or
other security, proceeds or
distributions.
Return: any return, report, form or similar
statement or document (including,
without limitation, any related or
supporting information or schedule
attached thereto and any information
return, claim for refund, amended
return and declaration of estimated
tax) that has been or is required to be
filed with or furnished to any
Governmental Entity with respect to the
determination, assessment or collection
of any Taxes or the administration of
any laws, regulations or administrative
requirements relating to Taxes.
SEC: the U.S. Securities and Exchange
Commission.
Securities Act: the U.S. Securities Act of 1933, as
amended.
Selling Affiliated Group: as defined in Section 7.6(d)(i) hereof.
September Letter Agreement: the letter agreement, dated September
27, 2000, by and between TNCL and
Liberty, including the Summary of
Proposed Terms attached thereto, as
supplemented by the letter agreement,
dated as of February 6, 2001, by and
among TNCL, SESLA, Inc., LMC, Liberty
Satellite, LLC and Liberty
Multi-Country DTH, Inc.
Settlement Agreements: as defined in Section 7.6(c) hereof.
SGN: as defined in the recitals hereto.
Subsidiary: with respect to any Person, an entity
in which such Person, directly or
indirectly, through one or more
Subsidiaries, owns a majority (a) of
the voting power of the issued and
outstanding shares of capital stock or
other ownership interests in such
entity entitled to vote generally in
the election or appointment of
directors or members of the governing
body of such entity or (b) of the
ownership interests in such entity.
Surviving Corporation: as defined in Section 2.1 hereof.
-8-
Tax: any income, corporation, gross
receipts, profits, gains, capital
stock, capital duty, franchise,
business, license, payroll,
withholding, social security,
unemployment, disability, property,
wealth, welfare, stamp, environmental,
transfer, excise, occupation, sales,
use, value added, alternative minimum,
estimated or other similar tax
(including any fee, assessment or other
charge in the nature of any tax)
imposed by any governmental authority
(whether national, federal, state,
local, municipal, foreign or otherwise)
or political subdivision thereof, and
any interest, penalties, additions to
tax or additional amounts in respect of
the foregoing.
Tax Certificate: as defined in Section 7.6(j) hereof.
Third-Party Action: as defined in Section 10.2(a) hereof.
TNCL: as defined in the preamble hereto.
TNCL Adjustment Transaction as defined in Section 3.1(c)(i) hereof.
TNCL Excluded Jurisdictions: as defined in Section 5.4(a) hereof.
TNCL Material Adverse Effect: as defined in Section 5.1 hereof.
TNCL Shares: Preferred Limited Voting Ordinary
Shares of TNCL.
TNCL Registration Rights Agreement: as defined in Section 3.1(b)(ii)
hereof.
TNCL Subsidiaries: as defined in Section 5.1 hereof.
Transferred Corporation: shall have the meaning given to such
term in Treasury Regulation Section
1.367(a)-3(d)(2)(ii).
Treasurer Letter: as defined in Section 8.2(e) hereof.
Treasury Regulations the regulations promulgated
under the Code in effect on the date
hereof and the corresponding sections
of any regulations subsequently issued
that amend or supersede such
regulations.
20-F: as defined in Section 5.11 hereof.
U.S.: the United States of America.
-9-
Section 1.2 Terms. Terms used with initial capital letters will have the
meanings specified, applicable to both singular and plural forms, for all
purposes of this Agreement. All pronouns (and any variation) will be deemed to
refer to the masculine, feminine or neuter, as the identity of the Person may
require. The singular or plural includes the other, as the context requires or
permits. The word "include" (and any variation) is used in an illustrative sense
rather than a limiting sense. The words "hereof," "herein," "hereunder" and
comparable terms refer to the entirety of this Agreement and not to any
particular article, section or other subdivision hereof or attachment hereto.
References to any statute or regulation are to it as amended and supplemented
from time to time, and to any corresponding provisions of successor statutes or
regulations. References to "Article," "Section" or another subdivision or to an
"Exhibit" or "Schedule" are to an article, section or subdivision hereof or to
an exhibit or schedule hereto. All references to the "the date hereof," "the
date of this Agreement" or similar terms (but excluding references to the date
of execution hereof) refer to the date first above written, notwithstanding that
the parties may have executed this Agreement on a later date. The word day
without the qualification "Business" means a calendar day. If any action or
notice is to be taken or given on or by a particular calendar day, and such
calendar day is not a Business Day, then such action or notice may be taken or
given on the next succeeding Business Day.
ARTICLE II
THE MERGER
Section 2.1 The Merger. Upon the terms and subject to the conditions of
this Agreement, at the Effective Time, in accordance with the DGCL, LTVGIA shall
be merged with and into NPAL in accordance with this Agreement, and the separate
existence of LTVGIA shall cease. NPAL shall be the surviving corporation in the
Merger (hereinafter sometimes referred to as the "Surviving Corporation").
Section 2.2 Effective Time of the Merger. Upon the terms and subject to
the conditions of this Agreement, a certificate of merger in the form of Exhibit
A hereto (the "Certificate of Merger") shall be duly prepared, executed and
acknowledged by the Surviving Corporation and thereafter delivered to the
Secretary of State of the State of Delaware for filing on the Closing Date. The
Merger shall become effective as of the date and at such time as the Certificate
of Merger has been duly filed (the "Merger Filing") with the Secretary of State
of the State of Delaware (the time the Merger becomes effective pursuant to the
DGCL being referred to herein as the "Effective Time").
Section 2.3 Closing. Subject to the satisfaction or waiver of all of the
conditions to the Closing contained in Article VIII hereof, the closing of the
Merger (the "Closing") will take place at 10:00 a.m., New York City time, on
December 3, 2001, at the offices of Squadron Ellenoff Plesent & Xxxxxxxxx LLP,
000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, unless another date or place is
agreed to in writing by the parties hereto.
-10-
Section 2.4 Effects of the Merger. The Merger shall have the effects set
forth in the applicable provisions of the DGCL. Without limiting the generality
of the foregoing, and subject thereto, at the Effective Time, all the
properties, rights, privileges, powers and franchises of LTVGIA shall vest in
the Surviving Corporation, and all debts, liabilities and duties of LTVGIA shall
become the debts, liabilities and duties of the Surviving Corporation.
Section 2.5 Certificate of Incorporation and By-Laws.
(a) The Certificate of Incorporation of NPAL as in effect
immediately prior to the Effective Time shall remain the Certificate of
Incorporation of the Surviving Corporation until amended in accordance with the
terms thereof and with applicable law.
(b) The By-Laws of NPAL in effect at the Effective Time shall remain
the By-Laws of the Surviving Corporation until amended in accordance with the
terms thereof and with applicable law.
Section 2.6 Directors. The directors of NPAL at the Effective Time shall
remain the directors of the Surviving Corporation, each to hold office from the
Effective Time in accordance with the Certificate of Incorporation and By-Laws
of the Surviving Corporation and until his or her successor is duly elected and
qualified.
Section 2.7 Officers. The officers of NPAL at the Effective Time shall
remain the officers of the Surviving Corporation, each to hold office from the
Effective Time in accordance with the Certificate of Incorporation and By-Laws
of the Surviving Corporation and until his or her successor is duly appointed
and qualified.
Section 2.8 Role of NPAL. TNCL and NPAL acknowledge that NPAL has entered
into this Agreement and will perform the transactions required of it by this
Agreement at the direction of TNCL, to assist TNCL in meeting its obligations
under the September Letter Agreement.
Section 2.9 Tax Effect. The parties intend that the Merger shall qualify
as a tax-free reorganization under Section 368(a) of the Code.
ARTICLE III
CONVERSION OF SHARES
Section 3.1 Conversion of Capital Stock. As of the Effective Time, by
virtue of the Merger and without any action on the part of the holder of any
outstanding shares of Capital Stock of LTVGIA or of the holder of any shares of
Capital Stock of NPAL:
(a) Consideration for LTVGIA Shares. The issued and outstanding
shares of Capital Stock of LTVGIA (the "LTVGIA Shares") shall be converted into
(i) 1.7179 ADSs for each Gemstar Share held by LTVGIA, for a total of 28,793,980
ADSs (such ADSs, the "LTVGIA Merger Consideration") representing 115,175,920
fully paid and nonassessable TNCL Shares and (ii) that number of ADSs (rounded
to the nearest ADS) (such ADSs, the "Additional Merger Consideration," and
together with the LTVGIA Merger Consideration, the "Merger Consideration")
issuable pursuant to Section 3.1(c)(ii) hereof. The Merger Consideration shall
-11-
be issued on the Closing Date to LMC and/or one or more Controlled Affiliates of
LMC (each such Controlled Affiliate of LMC, a "Controlled Affiliate Acquirer")
specified in writing (a "Controlled Affiliate Acquirer Notice") by LMC to TNCL a
reasonable period prior to the Closing, but in no event less than three Business
Days prior to the Closing, with the amount of the Merger Consideration to be
issued to LMC and/or each such Controlled Affiliate Acquirer to be as specified
in the Controlled Affiliate Acquirer Notice (subject to the adjustments provided
herein).
The LTVGIA Shares, when so converted, shall no longer be outstanding
and shall automatically be canceled and retired and shall cease to exist, and
each holder of a certificate that, immediately prior to the Effective Time,
represented outstanding LTVGIA Shares (the "LTVGIA Certificates") shall cease to
have any rights with respect thereto. LTVGIA Shares that are owned by LTVGIA as
treasury stock, if any, shall not convert into ADSs in accordance with this
Section 3.1(a).
All TNCL Shares (and the ADSs representing such TNCL Shares) issued
pursuant to this Agreement will be issued free and clear of any Liens or
Restrictions other than those created by LMC or such Controlled Affiliate
Acquirer, and except for any restrictions on transfer arising under the
Securities Act, state securities laws, the Corporations Act, the Amended
Registration Rights Agreement or the Restricted Securities Letter Agreement.
(b) Registration and Lock-Up of ADSs and TNCL Shares.
(i) The ADSs (and the TNCL Shares underlying such ADSs) to be
issued pursuant to Sections 3.1(a) and 3.1(c)(ii) will be issued without being
registered under the Securities Act. The ADSs (and the TNCL Shares underlying
such ADSs) to be issued to LMC or each such Controlled Affiliate Acquirer
hereunder will be acquired for LMC's or such Controlled Affiliate Acquirer's own
account for investment purposes only, and not with a view to, or for sale in
connection with, any distribution of any such ADSs (or the TNCL Shares
underlying such ADSs) in violation of the Securities Act, any applicable state
securities laws or the Corporations Act. LMC understands and acknowledges that
(A) none of the ADSs (or the TNCL Shares underlying such ADSs) to be issued as
Merger Consideration hereunder have been registered under the Securities Act or
any applicable state securities law and, when issued, will be "restricted
securities" within the meaning of Rule 144 under the Securities Act, and (B) the
ADSs (and the TNCL Shares underlying such ADSs) cannot be sold, transferred or
otherwise disposed of in the U.S. unless such ADSs (and, under certain
circumstances, the TNCL Shares underlying such ADSs) subsequently are registered
under the Securities Act and any applicable state securities laws, or exemptions
from registration thereunder are available.
(ii) Prior to or concurrently with the Closing, TNCL and LMC
shall enter into an amendment and restatement of the TNCL Registration Rights
and Lock-Up Agreement, dated May 2, 2001, between TNCL and LMC (the "TNCL
Registration Rights Agreement"). Such amended and restated TNCL Registration
Rights Agreement shall be in substantially the form set forth in Exhibit B
hereto and is hereinafter referred to as the "Amended Registration Rights
Agreement."
-12-
(c) Adjustments to Merger Consideration.
(i) All references in this Agreement to the number of ADSs
issuable upon consummation of the Merger shall be subject to appropriate
adjustment (which adjustment shall be made in an equitable manner and in
accordance with applicable ASX Listing Rules in order to provide the parties
with the economic benefits and burdens bargained for hereunder) in the event of
stock splits, eligible bonus issues, combinations, or any recapitalization,
reclassification or similar transaction (a "TNCL Adjustment Transaction")
involving TNCL the effective date or record date for which is on or after
September 27, 2000 and on or before the Closing Date; provided, however, that in
the event any Additional ADSs are issuable as part of the Merger Consideration
upon the record or effective date of such TNCL Adjustment Transaction, such
adjustment shall be made in respect of all such Additional ADSs which would have
been outstanding had the Effective Time occurred immediately prior to the record
or effective date of the TNCL Adjustment Transaction. If any spin-off, eligible
bonus issue, split-off or other transaction involving TNCL occurs, or a record
date is established for any such transaction, and the preceding sentence does
not provide a proper equitable adjustment for LMC and its Controlled Affiliate
Acquirers with respect to such transaction, the number of any ADSs or TNCL
Shares thereafter deliverable to LMC and its Controlled Affiliate Acquirers
pursuant to this Agreement shall be adjusted, or shall be delivered together
with securities issued or distributed in such transaction, so as to provide LMC
and its Controlled Affiliate Acquirers with the consideration bargained for in
this Agreement and to place them in the same position as they would have been in
if such ADSs or TNCL Shares had been delivered to them immediately prior to the
record date or effective date for such transaction (which adjustment shall be
made in an equitable manner and in accordance with applicable ASX Listing Rules
in order to provide the parties with the economic benefits and burdens bargained
for hereunder). In the event of any stock split, stock dividend, stock
combination, reclassification, share exchange or similar transaction affecting
the Gemstar Shares, which has a payment date or effective date, as applicable,
which is on or after September 27, 2000 and prior to the Closing Date, the
number of Gemstar Shares held by LTVGIA and the number of ADSs issuable per
Gemstar Share shall be correspondingly adjusted.
(ii) In the event that any dividend or other distribution, in
cash, securities or other property (including, but not limited to, any rights,
warrants, options or other securities entitling the holder to purchase TNCL
Shares or ADSs or other securities or property (including ADRs in respect of
such securities), but excluding any dividend or distribution for which an
adjustment is provided in paragraph (i) above) (such dividend or distribution, a
"Qualifying Dividend"), shall be declared, paid or made on or in respect of the
TNCL Shares on or after November 27, 2001, and on or before the Closing Date
(subject to the proviso in the immediately following sentence), then upon each
date on which a Qualifying Dividend on the TNCL Shares is paid or made (each
such date, a "Payment Date"), the Merger Consideration shall be increased by
adding thereto as Additional Merger Consideration a number of ADSs (the
"Additional ADSs") (rounded, for purposes of the following calculations, to the
nearest 1/100th of an ADS) equal to (x) the aggregate amount of (1) cash and (2)
the fair market value of any security or other property (as determined by the
Board of Directors of TNCL in good faith and set forth in a resolution of the
Board of Directors to such effect) payable in respect of the TNCL Shares
underlying the ADSs issuable to LMC and/or the Controlled Affiliate Acquirers as
Merger Consideration (with the number of ADSs constituting the Merger
Consideration to be determined as if (A) the Effective Time had occurred
immediately prior to the record date for or
-13-
the effective date of such Qualifying Dividend and (B) the Additional ADSs
constituting Additional Merger Consideration had been issued as of the Payment
Date related thereto) divided by (y) the average of the daily Closing Prices of
an ADS for the ten (10) consecutive trading days ending on the Business Day
preceding the Ex-Dividend Date, or if there is no such Ex-Dividend Date for such
Qualifying Dividend, the date specified for payment of such Qualifying Dividend
(such period, the "Measurement Period"). The adjustments required by this
paragraph (ii) shall be made upon each payment of a Qualifying Dividend made (or
having a record date) on or after November 27, 2001, and on or prior to the
Closing Date; provided, that in the case of any Qualifying Dividend whose record
date is on or prior to the Closing Date but whose payment date is scheduled to
be after the Closing Date, then the amount of Additional Merger Consideration to
be issued to LMC and/or the Controlled Affiliate Acquirer at the Effective Time
shall be increased by the number of Additional ADSs that LMC and/or the
Controlled Affiliate Acquirer would have been entitled to receive had the
Payment Date immediately preceded the Effective Time, subject to the obligation
of LMC (and/or the Controlled Affiliate Acquirers) to deliver to TNCL any such
Additional ADSs issued to LMC (and/or the Controlled Affiliate Acquirers) in
anticipation of the payment or distribution of such Qualifying Dividend, in the
event such payment or distribution is not made. For purposes of this Section
3.1(c)(ii), the amount of the Qualifying Dividend shall be stated in terms of
United States Dollars, with any portion of such Qualifying Dividend which is
stated in terms of Australian Dollars being converted to United States Dollars
using an exchange rate which is equal to the average of the daily 4:00 p.m.
Eastern time exchange rates (as published by The Wall Street Journal (or such
other published exchange rate as the parties may agree)) for each trading day
for which the Closing Price of an ADS is determined during the Measurement
Period.
Section 3.2 Exchange of Certificates.
(a) Depositary. TNCL, pursuant to the terms of the Deposit
Agreement, shall, prior to the Effective Time, (i) deposit with the Custodian
the TNCL Shares underlying the ADSs to be issued in the Merger and (ii) instruct
the Depositary to prepare the requisite ADRs to evidence the ADSs to be issued
in the Merger for exchange in accordance with this Article III.
(b) Exchange Procedures. On the Closing Date, upon surrender of all
of the LTVGIA Certificates to TNCL for cancellation, TNCL shall cause to be
delivered to LMC in exchange therefor one or more ADR(s) representing that whole
number of ADSs that LMC and its Controlled Affiliate Acquirers have the right to
receive pursuant to the provisions of this Article III, and the LTVGIA
Certificates so surrendered shall forthwith be canceled. TNCL shall pay any
stamp duties, transfer taxes, and other similar charges (including all fees and
charges of the Depositary, registrar and Custodian for the ADSs) required by
reason of the issuance of the ADSs to LMC or Controlled Affiliate Acquirers of
LMC pursuant to the provisions of this Article III; provided, however, that,
unless otherwise provided by the Deposit Agreement, under no circumstances shall
TNCL pay any stamp duties, transfer taxes, or other similar charges required by
reason of any subsequent transfer or assignment by LMC or Controlled Affiliate
Acquirers of LMC of the ADSs (or the underlying TNCL Shares) or the conversion
by LMC of ADSs into actual TNCL Shares. LMC acknowledges that neither it nor any
of its Controlled Affiliate Acquirers shall acquire any right, title or interest
in the TNCL Shares or the ADSs to be issued pursuant to this Agreement until the
Effective Time and, if the Effective Time does not occur, shall assist TNCL, at
TNCL's sole cost and expense, in canceling, and removing from any
-14-
register or exchange references to, the TNCL Shares and the ADSs to be issued
pursuant to this Agreement.
(c) No Further Ownership Rights in LTVGIA Shares. All ADSs issued
upon the surrender for exchange of the LTVGIA Certificates in accordance with
the terms hereof shall be deemed to have been issued in full satisfaction of all
rights pertaining to the LTVGIA Shares, and from and after the Effective Time
there shall be no further registration of transfers on the stock transfer books
of the Surviving Corporation of the LTVGIA Shares which are converted pursuant
to the Merger and were outstanding immediately prior to the Effective Time. If,
after the Effective Time, LTVGIA Certificates are presented to the Surviving
Corporation for any reason, they shall be canceled and exchanged for no
consideration.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF LMC
AND LTVGIA
LMC and LTVGIA hereby, jointly and severally, make the following
representations and warranties to TNCL and NPAL, it being understood and agreed
that references herein to LTVGIA's properties, assets, liabilities, commitments
or business or any of them shall in no event be construed as a representation or
warranty with respect to Gemstar or any of its properties, assets, liabilities,
commitments or businesses, and no such representation or warranty is made:
Section 4.1 Organization and Qualifications. Each of LMC and LTVGIA is a
corporation duly organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation and has the requisite corporate power
and authority and all governmental permits, approvals and other authorizations
necessary to own, lease and operate its properties and to carry on its business
as it is now being conducted, except where the failure to be so organized,
existing or in good standing or to have such power, authority and governmental
permits, approvals and other authorizations would not, individually or in the
aggregate, have a material adverse effect on (i) the business, assets, financial
or other condition, or results of operations of LTVGIA, or (ii) the ability of
LMC or LTVGIA to consummate the Merger (in either case, an "LTVGIA Material
Adverse Effect").
Section 4.2 Capitalization; No Liens.
(a) LTVGIA. All of the issued and outstanding shares of Capital
Stock of LTVGIA are duly authorized, validly issued, fully paid and
nonassessable, and are owned of record as of the date hereof by LMC free and
clear of any Liens and Restrictions (other than any Liens or Restrictions
arising out of or pursuant to this Agreement, the Gemstar Stockholders'
Agreement, the Gemstar Rights Plan, the September Letter Agreement and any
restrictions on transfer arising under the Securities Act or state securities
laws). The LTVGIA Shares constitute all of the issued and outstanding shares of
Capital Stock of LTVGIA. All of the share certificates issued and outstanding
which represent the LTVGIA Shares will be delivered to NPAL on the Closing Date.
No other shares of Capital Stock or other voting securities of LTVGIA are
issued, reserved for issuance or outstanding. There are no options or agreements
relating to the issued or unissued Capital Stock of LTVGIA or obligating LTVGIA
to issue,
-15-
transfer, grant or sell any shares of Capital Stock of, or other equity
interests in, or securities convertible into or exchangeable for any Capital
Stock or other equity interests in, LTVGIA other than this Agreement and the
September Letter Agreement. There are no outstanding contractual obligations of
LTVGIA to repurchase, redeem or otherwise acquire any shares of Capital Stock of
LTVGIA.
(b) Gemstar Shares. The Gemstar Shares are owned of record as of the
date hereof by LTVGIA free and clear of any Liens and Restrictions (other than
(i) Liens or Restrictions arising out of or pursuant to this Agreement, the
September Letter Agreement, the Gemstar Stockholders' Agreement, or Gemstar
Rights Plan and (ii) any restrictions on transfer arising under the Securities
Act or state securities laws). Upon consummation of the Merger, the Surviving
Corporation will hold the Gemstar Shares, directly or indirectly, free and clear
of any Liens and Restrictions (other than (i) Liens or Restrictions arising out
of or pursuant to the Gemstar Stockholders' Agreement, the Gemstar Rights Plan
or this Agreement, (ii) any Liens or Restrictions created by TNCL or any of its
Affiliates and (iii) any restrictions on transfer arising under the Securities
Act or state securities laws).
Section 4.3 Authority Relative to This Agreement.
(a) Each of LMC and LTVGIA has all necessary corporate power and
authority to execute and deliver this Agreement, to perform its obligations
hereunder and to consummate the Merger.
(b) The execution and delivery of this Agreement by LMC and LTVGIA
and the consummation by LMC and LTVGIA of the Merger have been duly and validly
authorized by all necessary corporate action on their part, and no other
corporate proceedings on the part of LMC and LTVGIA are necessary to authorize
this Agreement or to consummate the Merger (other than the Merger Filing). This
Agreement has been duly and validly executed and delivered by LMC and LTVGIA
and, assuming the due authorization, execution and delivery hereof by TNCL and
NPAL, constitutes the legal, valid and binding obligation of each of LMC and
LTVGIA, enforceable against each of LMC and LTVGIA in accordance with its terms,
except as enforcement may be limited by bankruptcy, insolvency, moratorium or
other similar laws relating to creditors' rights generally and by equitable
principles to which the remedies of specific performance and injunctive and
similar forms of relief are subject.
Section 4.4 No Conflict; Required Filings and Consents.
(a) The execution and delivery of this Agreement by each of LMC and
LTVGIA do not, and the performance of their respective obligations under this
Agreement and the consummation of the Merger by LTVGIA will not, (i) conflict
with or violate the certificate of incorporation or By-laws of LMC or LTVGIA;
(ii) subject to Section 8.1(a) and to satisfaction of the requirements set forth
in clauses (i) through (v) of Section 4.4(b), conflict with or constitute a
violation by LMC or LTVGIA of any Applicable Law applicable to LMC or LTVGIA or
by which any property or asset of LTVGIA is bound or affected, except in such
instances which would not have an LTVGIA Material Adverse Effect, and except
that no representation or warranty is made herein with respect to foreign laws,
regulations or rules of jurisdictions in which LMC does not, directly or
indirectly, own any assets or conduct any business ("LMC Excluded
Jurisdictions"); or (iii) conflict with or result in any breach of or
-16-
constitute a default (or an event which with notice or lapse of time or both
would become a default) under, result in the loss (by LTVGIA) or modification in
a manner materially adverse to LTVGIA of any material right or benefit under, or
give to others any right of termination, amendment, acceleration, repurchase or
repayment, increased payments or cancellation of, or result in the creation of
any Lien on any property or asset of LTVGIA pursuant to, any note, bond,
mortgage, indenture, contract, agreement, lease, license, permit, franchise, or
other instrument or obligation (collectively, the "Contractual Obligations") to
which LTVGIA is a party or by which LTVGIA or any property or asset of LTVGIA is
bound or affected, except in such instances which would not result in an LTVGIA
Material Adverse Effect, and except that no representation is made with respect
to the Gemstar Rights Plan, the Gemstar Stockholders' Agreement, or any
agreement or understanding between LMC or any of its Controlled Affiliates, on
the one hand, and TNCL or any of its Controlled Affiliates, on the other hand.
(b) The execution and delivery of this Agreement by LMC and LTVGIA
do not, and the performance of their respective obligations under this Agreement
and the consummation of the Merger by LMC and LTVGIA will not require any
consent, approval, authorization, waiver or permit of (a "Governmental
Consent"), or filing with or notification to (a "Governmental Filing"), any
federal, state, local or foreign governmental or regulatory agency, authority,
commission or instrumentality (each a "Governmental Entity") (provided, that no
representation or warranty is made by LMC or LTVGIA with respect to Governmental
Consents from, or Governmental Filings with, any Governmental Entity in an LMC
Excluded Jurisdiction), other than (i) the pre-merger notification requirements
of the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended, and the
rules and regulations thereunder (collectively, the "HSR Act") required to be
satisfied by TNCL, (ii) the requirements under applicable Australian law (other
than with respect to the ASX and the ASIC) that have heretofore been satisfied,
and the filings with the ASX and the ASIC to be made by TNCL following the
Closing, (iii) the pre-merger notification requirements of German merger control
law, which have heretofore been satisfied by TNCL, (iv) the Merger Filing, (v)
the approval of the Brazilian competition authorities, (vi) the entering into of
a gain recognition agreement as contemplated by Section 7.6, and (vii) where the
failure to obtain such consents, approvals, waivers, authorizations or permits,
or to make such filings or provide such notice would not, individually or in the
aggregate, have an LTVGIA Material Adverse Effect.
Section 4.5 Gemstar Shares are LTVGIA's Sole Asset; No LTVGIA Liabilities.
Except as contemplated by this Agreement, (i) the Gemstar Shares are LTVGIA's
sole assets, and (ii) LTVGIA has no liabilities (whether absolute, accrued or
contingent) and has no unfulfilled commitments, in each case, other than
pursuant to the Gemstar Stockholders' Agreement and the Gemstar Rights Plan and
except that no representation or warranty is made with respect to liabilities or
commitments to TNCL or its Affiliates.
Section 4.6 Litigation. There are no actions, suits, arbitrations, legal
or administrative proceedings or investigations ("Legal Proceedings") pending
or, to the knowledge of LTVGIA, threatened against LTVGIA, and neither LTVGIA
nor its assets, properties or business, is subject to any judgment, decree,
order, injunction or writ of any Governmental Entity or arbitrator.
-17-
Section 4.7 Tax Matters.
(a) LTVGIA has filed all material Returns that it was required to
file. All such Returns are correct and complete in all material respects. All
material Taxes owed by LTVGIA (whether or not shown on any Return) have been
paid. There are no Liens for material Taxes (other than for current Taxes not
yet due and payable or for items being contested in good faith and for which
there are adequate reserves in accordance with GAAP on the books of LMC or its
applicable Subsidiary) on any of the assets of LTVGIA.
(b) LTVGIA has withheld and paid all material Taxes required to have
been withheld and paid in connection with amounts paid or owing to any employee,
independent contractor or other third party.
(c) No material deficiencies for any Taxes have been proposed,
asserted or assessed against LTVGIA that are not adequately reserved for in
accordance with GAAP in all cases applied in a consistent basis with the most
recent LMC balance sheet. None of the Returns of LTVGIA is currently the subject
of an audit.
(d) LTVGIA does not have any current non-contingent liability for
the Taxes of any Person under Treasury Regulation Section 1.1502-6 (or any
similar provision of state, local, or foreign law), as a transferee or
successor, by contract, or otherwise.
(e) If the income of LTVGIA is required under federal, state, local
or foreign Tax rules to be included on a consolidated, unitary, combined or
other such Return which includes LMC or any of its Controlled Affiliates and
which is filed by an entity other than LTVGIA, any such group has filed all
Returns that it was required to file with respect to LTVGIA for each period
during which LTVGIA was a member of such group. All such Returns were correct
and complete in all material respects in so far as they relate to LTVGIA. All
material Taxes owed by such group with respect to LTVGIA (whether or not shown
on a Return) have been paid for each taxable period during which LTVGIA was a
member of its group.
(f) The normal period within which to examine and/or assess Taxes on
the income of LTVGIA has not been extended with respect to any such entity by
waiver of, or agreement to extend, the applicable statute of limitations or
otherwise.
(g) LTVGIA will not be party to any tax sharing or allocation
agreement as of the Effective Time.
Section 4.8 Brokers. No broker, finder or investment banker is entitled to
any brokerage, finder's or other fee or commission in connection with the Merger
based upon arrangements made by or on behalf of LTVGIA.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF TNCL
TNCL hereby represents and warrants to LMC and LTVGIA as follows:
-18-
Section 5.1 Organization and Qualifications. TNCL is duly registered and
validly existing under the Corporations Act. NPAL is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Delaware. Each of TNCL and NPAL has the requisite power and authority and all
governmental permits, approvals and other authorizations necessary to own, lease
and operate its properties and to carry on its business as it is now being
conducted, except where the failure to be so organized, existing or, if
applicable, in good standing, or to have such power, authority and governmental
permits, approvals and other authorizations, would not, individually or in the
aggregate, have a material adverse effect on (i) the business, assets, financial
or other condition, or results of operations of TNCL and the Subsidiaries of
TNCL (the "TNCL Subsidiaries"), taken as a whole, or (ii) the ability of TNCL or
NPAL to consummate the Merger (in either case, a "TNCL Material Adverse
Effect").
Section 5.2 Validity of ADSs and TNCL Shares. The ADSs to be issued in the
Merger will be issued by the Depositary under the terms of the Deposit
Agreement, as supplemented by a letter agreement substantially in the form of
the letter agreement, dated May 2, 2001, among TNCL, LMC and Citibank, N.A.
entered into in connection with the NPAL/LUVSG Merger Agreement, with such
changes as are appropriate to provide for the issuance of the Merger
Consideration as "Restricted ADSs" thereunder (the "Restricted Securities Letter
Agreement"). The TNCL Shares underlying the ADSs to be issued pursuant to this
Agreement will, on and from their date of allotment and issue, rank pari passu
in all respects with all existing TNCL Shares on issue at that date (including
as to dividends). All of the TNCL Shares underlying the ADSs to be issued
pursuant to this Agreement are duly authorized and, when deposited with the
Custodian in accordance with the terms of the Deposit Agreement from and after
the Effective Time, will be duly authorized, validly issued, fully paid and
nonassessable and free and clear of all Liens and Restrictions (other than Liens
or Restrictions created by LMC or the Controlled Affiliate Acquirers, and except
for any restrictions on transfer arising under the Securities Act, state
securities laws, the Corporations Act, the Restricted Securities Letter
Agreement or the Amended Registration Rights Agreement). Upon issuance by the
Depositary of ADSs evidencing the TNCL Shares against the deposit of the TNCL
Shares in accordance with the terms of the Deposit Agreement, the ADSs to be
issued pursuant to this Agreement will be duly and validly issued and the
Persons in whose names the ADSs are to be registered as contemplated by this
Agreement will be entitled to the rights of registered holders of ADRs specified
in the Deposit Agreement and in the ADRs evidencing such ADSs, free and clear of
all Liens and Restrictions (other than those created by such Persons and except
for restrictions on transfer arising under the Securities Act, state securities
laws, the Corporations Act, the Amended Registration Rights Agreement or the
Restricted Securities Letter Agreement). The Deposit Agreement has been duly and
validly authorized by all necessary corporate action of TNCL, has been duly and
validly executed and delivered by TNCL, and, assuming the due authorization,
execution and delivery thereof by the Depositary, constitutes the legal, valid
and binding obligation of TNCL, enforceable against TNCL in accordance with its
terms, except as enforcement may be limited by bankruptcy, insolvency,
moratorium or other similar laws relating to creditors' rights generally and by
equitable principles to which the remedies of specific performance and
injunctive and similar forms of relief are subject. As of (but subject to) the
Closing TNCL shall have (a) issued and allotted the TNCL Shares underlying the
ADSs to be issued pursuant to this Agreement to the Custodian and made such
entries in the register of members of TNCL as are required by the Corporations
Act to record the Custodian as a member of TNCL in respect of such TNCL Shares;
(b) delivered to the Custodian or as the Custodian directs holding statements
for the TNCL Shares underlying such ADSs evidencing the Custodian
-19-
as registered holder of the TNCL Shares underlying such ADSs; (c) applied for
quotation on the ASX of the TNCL Shares underlying such ADSs in accordance with
the requirements of the Listing Rules and Business Rules of the ASX; and (d)
applied for listing of such ADSs on the New York Stock Exchange (the "NYSE").
Section 5.3 Authority Relative to This Agreement.
(a) Each of TNCL and NPAL has all necessary corporate power and
authority to execute and deliver this Agreement and to perform its obligations
hereunder and to consummate the Merger without the need for approval by the
shareholders of TNCL.
(b) The execution and delivery of this Agreement by TNCL and NPAL
and the consummation by TNCL and NPAL of the Merger have been duly and validly
authorized by all necessary corporate action, and no other corporate proceedings
on the part of TNCL or NPAL are necessary to authorize this Agreement or to
consummate the Merger (other than the Merger Filing). This Agreement has been
duly and validly executed and delivered by each of TNCL and NPAL and, assuming
the due authorization, execution and delivery hereof by LMC and LTVGIA,
constitutes the legal, valid and binding obligation of each of TNCL and NPAL,
enforceable against each of TNCL and NPAL in accordance with its terms, except
as enforcement may be limited by bankruptcy, insolvency, moratorium or other
similar laws relating to creditors' rights generally and by equitable principles
to which the remedies of specific performance and injunctive and similar forms
of relief are subject.
Section 5.4 No Conflict; Required Filings and Consents.
(a) The execution and delivery of this Agreement by TNCL and NPAL do
not, and the performance of their respective obligations under this Agreement
and the consummation of the Merger by TNCL and NPAL will not, (i) conflict with
or violate the articles of incorporation or By-laws or equivalent organizational
documents of TNCL or NPAL, (ii) subject to Section 8.1(a) and to satisfaction of
the requirements set forth in clauses (i) through (iv) of Section 5.4(b),
conflict with or constitute a violation by TNCL or NPAL of the applicable
Listing Rules of the ASX or the NYSE or any Laws applicable to TNCL or NPAL or
by which any property or asset of TNCL or NPAL is bound or affected, except in
such instances which would not have a TNCL Material Adverse Effect, and except
that no representation or warranty is made herein with respect to foreign laws,
regulations or rules of jurisdictions in which none of TNCL, Gemstar or NPAL,
directly or indirectly, owns any assets or conducts any business ("TNCL Excluded
Jurisdictions"), or (iii) conflict with or result in any breach of or constitute
a default (or an event which with notice or lapse of time or both would become a
default) under, result in the loss (by TNCL or NPAL) or modification in a manner
materially adverse to TNCL or NPAL of a material right or benefit under, or give
to others any right of termination, amendment, acceleration, repurchase or
repayment, increased payments or cancellation of, or result in the creation of
any Lien on any property or asset of TNCL or NPAL pursuant to, any Contractual
Obligations to which TNCL or NPAL is a party or by which TNCL or NPAL or any
property or asset of TNCL or NPAL is bound or affected, except in such instances
which would not result in a TNCL Material Adverse Effect, and except that no
representation is made with respect to any agreement or understanding between
LMC or any of its Controlled Affiliates, on the one hand, and TNCL or any of its
Controlled Affiliates on the other hand.
-20-
(b) The execution and delivery of this Agreement by each of TNCL and
NPAL do not, and the performance of their respective obligations under this
Agreement and the consummation of the Merger by TNCL and NPAL will not require
any Governmental Consent or Governmental Filing (provided, that no
representation or warranty is made with respect to Governmental Consents from,
or Governmental Filings with, any Governmental Entity in a TNCL Excluded
Jurisdiction), other than (i) the pre-merger notification requirements of the
HSR Act that have heretofore been satisfied by TNCL, (ii) the requirements under
applicable Australian law (other than with respect to the ASX and the ASIC) that
have heretofore been satisfied, and the filings with the ASX and the ASIC to be
made by TNCL following the Closing, (iii) the pre-merger notification
requirements of German merger control law that have heretofore been satisfied by
TNCL, (iv) the approval of the Brazilian competition authorities, (v) the Merger
Filing, and (vi) where the failure to obtain such consents, approvals, waivers,
authorizations or permits, or to make such filings or provide such notice, would
not, individually or in the aggregate, have a TNCL Material Adverse Effect.
Section 5.5 Absence of Certain Changes or Events. Except as contemplated
by this Agreement or as disclosed in any filing by TNCL with the SEC that is
publicly available as of the date hereof, since June 30, 2000, (a) TNCL,
together with the TNCL Subsidiaries, taken as a whole, has conducted its
business in the ordinary course, consistent with past practice, and (b) there
has not occurred or arisen any event that, individually or in the aggregate, has
had or, insofar as reasonably can be foreseen, is likely in the future to have,
a TNCL Material Adverse Effect, other than events or developments generally
affecting the industries in which TNCL and the TNCL Subsidiaries operate. No
receiver or administrator of TNCL's or of the whole or any part of TNCL's assets
has been appointed.
Section 5.6 Litigation. There are no Legal Proceedings pending or, to the
knowledge of TNCL or NPAL, threatened against TNCL or any of the TNCL
Subsidiaries (including NPAL), which could reasonably be expected to have,
individually or in the aggregate, a TNCL Material Adverse Effect, nor is there
any judgment, decree, order, injunction or writ of any court, Governmental
Entity or arbitrator outstanding against TNCL or any of the TNCL Subsidiaries
having, or which, insofar as can be reasonably foreseen, in the future is
reasonably likely to have, any such TNCL Material Adverse Effect.
Section 5.7 Capitalization. As of October 12, 2001, the issued capital
stock of TNCL consisted of 2,093,043,326 Ordinary Shares (as such term is
defined in TNCL's Constitution) and 2,940,659,839 TNCL Shares. All of such
shares were duly authorized, validly issued, fully paid and nonassessable.
Section 5.8 Brokers. No broker, finder or investment banker is entitled to
any brokerage, finder's or other fee or commission in connection with the Merger
based upon arrangements made by or on behalf of TNCL or NPAL.
Section 5.9 NPAL. NPAL is a directly owned "controlled" U.S. subsidiary of
TNCL within the meaning of Section 368(c) of the Code.
Section 5.10 Foreign Private Issuer. TNCL (a) is a "foreign private
issuer" within the meaning of Rule 3b-4 of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), and (b) with respect to the ADRs is eligible to
use Form 20-F under the Exchange Act.
-21-
Section 5.11 Disclosure. TNCL's Annual Report on Form 20-F for the fiscal
year ended June 30, 2001 (the "20-F"), at the time filed, complied in all
material respects with the applicable requirements of Form 20-F under the
Exchange Act, and did not contain any untrue statement of a material fact or
omit to state any material fact necessary in order to make the statements made
therein, in light of the circumstances in which they were made, not misleading.
The consolidated financial statements (including the notes thereto) of TNCL and
its subsidiaries included in the 20-F, at the time filed, fairly presented in
all material respects the consolidated financial position, results of operations
and cash flows of TNCL and its consolidated subsidiaries as at the respective
dates thereof and for the respective periods indicated therein.
ARTICLE VI
CONDUCT PENDING THE MERGER
Section 6.1 Prohibited Actions. LMC and LTVGIA covenant and agree that,
from the date hereof until the earlier of the Effective Time or the termination
of this Agreement, unless TNCL shall otherwise agree in writing prior to the
taking of any action otherwise prohibited by the terms of this Section 6.1:
(a) LTVGIA shall not issue or authorize the issuance of, grant or
otherwise create any additional shares of, or any options to acquire any shares
of, its Capital Stock or any debt or equity securities convertible into or
exchangeable for such Capital Stock, and neither LMC nor LTVGIA shall sell,
mortgage, pledge or subject to Lien or Restriction any of the shares of Capital
Stock of LTVGIA or any of the Gemstar Shares;
(b) Neither LMC nor LTVGIA shall enter into, accept or otherwise
agree to become bound by any negative covenant restricting in any manner the
right of such entity to consummate the Merger;
(c) (i) LTVGIA shall not enter into or agree to enter into any
agreement, contract or commitment affecting its direct ownership of or its
rights to transfer the Gemstar Shares in connection with the Merger, and (ii)
LMC shall not enter into or agree to enter into any agreement, contract or
commitment affecting its indirect ownership of or any rights to cause the
transfer of the Gemstar Shares in connection with the Merger;
(d) LTVGIA shall not conduct any business, other than holding and
exercising the rights of a holder of, the Gemstar Shares (subject to the Gemstar
Stockholders' Agreement, this Agreement, the letter agreement, dated May 2,
2001, between LMC and TNCL regarding the Gemstar Stockholders' Agreement (the
"Gemstar Side Letter"), and matters reasonably incidental thereto) and other
than in connection with its performance under the Gemstar Side Letter;
(e) LTVGIA shall not incur or become contingently liable with
respect to any Indebtedness, or assume, guarantee or otherwise become
responsible for the Indebtedness of any other party or agree to so do; for
purposes of this Section 6.1(e), "Indebtedness" shall mean and include (i)
indebtedness for borrowed money whether short-term or long-term and whether
secured or unsecured, (ii) indebtedness for the deferred purchase price of
services or property, (iii) obligations under capitalized leases, (iv)
obligations arising under acceptance facilities, (v)
-22-
all obligations evidenced by bonds, debentures, notes or other similar
instruments, (vi) all obligations upon which interest charges are customarily
paid, and (vii) renewals, extensions, refundings, deferrals, restructurings,
amendments and modifications of any such indebtedness, guarantee or obligation;
(f) LMC shall not sell, transfer or contribute any of the LTVGIA
Shares held by LMC, and LTVGIA shall not sell, transfer or contribute any of the
Gemstar Shares held by LTVGIA.
(g) LTVGIA shall not enter into any Settlement Agreements;
(h) LTVGIA shall not declare, set aside, make or pay any dividend
or other distribution, payable in cash, stock, property or otherwise, with
respect to any of its Capital Stock, except to satisfy any requirement of this
Agreement;
(i) Neither LMC nor LTVGIA shall take any action, or enter into
any transaction, prior to the Closing Date, which would result in a breach of
any representation, warranty, covenant or agreement contained in this Agreement;
or
(j) LTVGIA shall not merge, consolidate with or consummate any
other business combination with any Person or acquire or agree to acquire by
merging or consolidating with, or by purchasing a substantial equity interest in
or a substantial portion of the assets of, or by any other manner, any business
or any corporation, partnership, association or other business entity.
Section 6.2 TNCL Covenants. TNCL and NPAL covenant and agree that, from
the date hereof until the earlier of the Effective Time or the termination of
this Agreement, unless LMC shall otherwise agree in writing prior to the taking
of any action otherwise prohibited by the terms of this Section 6.2, TNCL and
NPAL shall not:
(i) take any action, or enter into any transaction
prior to the Closing Date, which would result in a breach of any representation,
warranty, covenant or agreement contained in this Agreement; or
(ii) take any action, or enter into any transaction
prior to the Closing Date, which could reasonably be expected to adversely
effect or delay the ability of any of the parties hereto to obtain any
Governmental Consent or make any Governmental Filing or maintain the
effectiveness of any Governmental Consent or Governmental Filing heretofore
received, obtained or made (or which is received, obtained or made after the
date hereof) required to consummate the Merger.
ARTICLE VII
ADDITIONAL COVENANTS
Section 7.1 Approvals. TNCL and LMC shall cooperate and each shall use its
reasonable best efforts to receive, obtain and make any Governmental Consents or
Governmental Filings required in connection with the Merger (including, without
limitation, filings and submissions to the ASX, the ASIC and the NYSE, and
obtain all consents and approvals from parties to contracts with the parties
hereto or their respective Controlled Affiliates as are
-23-
necessary for the consummation of the Merger); provided, however, that to the
extent any Governmental Consent has been received or obtained, or any
Governmental Filing has been made, in each case prior to the date hereof, (x)
TNCL shall use its reasonable best efforts to cause such Governmental Consent or
Governmental Filing to remain in full force and effect (including paying any
required filing or other fees in respect thereof) and (y) LMC will (i)
reasonably cooperate in such efforts and (ii) not take any action (other than as
contemplated by this Agreement) the effect of which is reasonably likely to
cause the revocation or termination of the Treasurer Letter. In the event any
Legal Proceeding by any Governmental Entity or other Person is commenced which
questions the validity or legality of the Merger or seeks damages in connection
therewith, the parties agree to cooperate and use all reasonable efforts to
defend against such Legal Proceeding and, if an injunction or other order is
issued in any Legal Proceeding, to use all reasonable efforts to have such
injunction or other order lifted, and to cooperate reasonably regarding any
other impediment to the consummation of the Merger; provided that none of LMC,
LTVGIA or any of their Affiliates shall be required by this Section 7.1 to: (A)
pay any consideration (other than the payment of filing fees in connection with
any United States federal or state Governmental Filing that it is obligated to
make pursuant to this Agreement), (B) surrender, modify or amend in any
substantive respect any license or contract (including this Agreement), (C) hold
separately (in trust or otherwise), divest itself of, or otherwise rearrange the
composition of, any of its assets, (D) agree to any limitations on any such
Person's freedom of action with respect to future acquisitions of assets or with
respect to any existing or future business or activities or on the enjoyment of
the full rights of ownership, possession and use of any asset now owned or
hereafter acquired by any such person, or (E) agree to any of the foregoing or
any other conditions or requirements of any Governmental Entity or other person
that are adverse to its interests or materially burdensome.
Section 7.2 Access to Information. Subject to Applicable Law, from the
date hereof to the earlier of the Effective Time or the termination of this
Agreement, LMC and LTVGIA shall afford the officers, employees, auditors and
agents (the "Representatives") of TNCL access at reasonable times to the
officers, employees, agents, properties, offices, plants and other facilities,
books, records, agreements and Returns of or relating to LTVGIA or its business,
and shall furnish such Representatives with all of LTVGIA's financial, operating
and other data and information as may be reasonably requested.
Section 7.3 Further Action. Upon the terms and subject to the conditions
hereof, each of the parties hereto shall use commercially reasonable 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 Applicable Law to
consummate and make effective the Merger. In case at any time after the
Effective Time any further action is necessary or desirable to carry out the
purposes of this Agreement, each party shall use its commercially reasonable
efforts to take all such action.
Section 7.4 Public Announcements. The parties to this Agreement and their
respective Controlled Affiliates shall consult with each other before issuing
any press release or otherwise making any public statements with respect to this
Agreement or the Merger and shall not issue any such press release or make any
such public statement without the prior consultation with or consent of the
other parties to this Agreement, which consent shall not be unreasonably
withheld; provided, however, that a party may, without such prior consultation
with, or prior consent of, the other parties to this Agreement, issue such press
release or make such public statement as may be required by Applicable Law or
the listing requirements of any applicable stock exchange
-24-
or securities association; provided that the party issuing such release or
making such statement shall give written notice thereof to the other parties.
Section 7.5 Notification of Certain Matters.
(a) Prior to the Closing Date, LMC and LTVGIA shall promptly
notify TNCL and NPAL of:
(i) any notice or other communication received by LMC
or LTVGIA from any Person alleging that the consent of such Person is or may be
required in connection with the Merger;
(ii) any notice or other communication from any
Governmental Entity received by LMC or LTVGIA in connection with the Merger;
(iii) any Legal Proceeding commenced or, to LMC's or
LTVGIA's knowledge, threatened against, relating to, involving or otherwise
affecting, LTVGIA;
(iv) any Legal Proceeding commenced or, to LMC's or
LTVGIA's knowledge, threatened against, relating to, involving or otherwise
affecting LMC or LTVGIA that relates to the consummation of the Merger; or
(v) any event, condition or circumstance of which LMC
or LTVGIA has knowledge, that (x) has, or is reasonably likely to have or does
have an LTVGIA Material Adverse Effect or (y) is, or is reasonably likely to
constitute, a breach of any representation, warranty or covenant made by such
Person, which breach is not capable of being cured prior to the Closing Date.
(b) Prior to the Closing Date, TNCL and NPAL shall promptly notify
LMC and LTVGIA of:
(i) any notice or other communication received by TNCL
or NPAL from any Person alleging that the consent of such Person is or may be
required in connection with the Merger;
(ii) any notice or other communication from any
Governmental Entity received by TNCL or NPAL in connection with the Merger;
(iii) any Legal Proceeding commenced or, to TNCL's or
NPAL's knowledge, threatened against, relating to, involving or otherwise
affecting TNCL or NPAL or which relates to the consummation of the Merger; or
(iv) any event, condition or circumstance of which TNCL
or NPAL has knowledge that (x) is reasonably likely to have or does have a TNCL
Material Adverse Effect or (y) is, or reasonably likely to constitute, a breach
of any representation, warranty or covenant made by such Person, which breach is
not capable of being cured prior to the Closing Date.
-25-
Section 7.6 Certain Tax Matters.
(a) Gain Recognition Agreement; Indemnity. LMC (or another member
of the Selling Affiliated Group) may be required to enter into a gain
recognition agreement under Section 367 of the Code with respect to the
conversion of the LTVGIA Shares into ADSs in the Merger. In the event that,
during the term of any such gain recognition agreement (or the term of any new
gain recognition agreement that LMC (or another member of the Selling Affiliated
Group) may be required to enter into as a result of any nonrecognition transfer
described in Treasury Regulations Sections 1.367(a)-8(g)(2) or (3)), TNCL
or any of its Affiliates makes any direct or indirect disposition or deemed
disposition of the stock or assets of the Transferred Corporation within the
meaning of Treasury Regulation Section 1.367(a)-8 (including, if there has been
a nonrecognition transfer, any direct or indirect disposition or deemed
disposition described in Treasury Regulations Sections
1.367(a)-8(g)(2)(iii) or 1.367(a)-8(g)(3)) which thereby causes gain to be
recognized pursuant to such gain recognition agreement (or new gain recognition
agreement), TNCL shall indemnify LMC for the amount of any Adjustments on any
Return filed by LMC or any member of a Selling Affiliated Group which are
required to be made as a result of the gain triggered pursuant to such gain
recognition agreement (or new gain recognition agreement). Such indemnification
payment amount shall be determined jointly by LMC and TNCL. TNCL agrees to
notify LMC of any action taken by it or any of its Affiliates that will cause
gain to be recognized under such gain recognition agreement (or new gain
recognition agreement). If TNCL or any of its Affiliates consummate any
nonrecognition transfer that is described in Treasury Regulations
Sections 1.367(a)-8(g)(2) or (3), TNCL shall provide timely notice to LMC
of such nonrecognition transfer so LMC (or another member of the Selling
Affiliated Group) may comply with the reporting requirements set forth in such
sections of the Treasury Regulations, and TNCL will cause LMC to be informed of
any subsequent disposition of property within the meaning of Treasury
Regulations Section 1.367(a)-8(g)(2)(iv).
(b) Tax Returns. To the extent requested by TNCL, LMC has made
available or will make available to TNCL all portions of Returns, and any
amendments thereto, filed by or on behalf of LTVGIA or with respect to its
assets or business, for all taxable years or applicable periods ending on or
prior to the Closing Date, in each case to the extent such Returns are
reasonably relevant in the preparation of Returns by or on behalf of LTVGIA or
TNCL as transferee subsequent to the Closing Date.
(c) Tax-Sharing Agreements. All tax settlement and tax-sharing
agreements, arrangements, policies and guidelines, formal or informal, express
or implied ("Settlement Agreements"), other than this Section 7.6, to which
LTVGIA is a party or may be subject and all obligations thereunder shall
terminate as to LTVGIA on or prior to the Closing Date, and after the Closing
Date, neither LTVGIA nor TNCL as transferee shall be bound by such Settlement
Agreements or have any liability thereunder.
(d) Pre-Closing Returns.
(i) LTVGIA shall continue to be included for all
taxable periods (or portions thereof) ending on or before the Closing Date in
the consolidated Federal income Return and any required state or local
consolidated or combined income or franchise Returns of any affiliated group of
which LTVGIA is a member (each of which is herein referred to as a "Selling
Affiliated Group"), which Returns include LTVGIA (all such Returns including
-26-
taxable periods (or portions thereof) of LTVGIA ending on or before the Closing
Date are hereinafter referred to, collectively, as "Pre-Closing Consolidated
Returns"). LMC shall cause its Selling Affiliated Groups to timely prepare and
file (or cause to be prepared and filed) all Pre-Closing Consolidated Returns
and to timely pay all Taxes shown as due and payable on Pre-Closing Consolidated
Returns (including, but not limited to, any Taxes with respect to any deferred
income triggered into income by Treasury Regulation Section 1.1502-13 and
Treasury Regulation Section 1.1502-14 and any excess loss accounts taken into
income under Treasury Regulation Section 1.1502-19).
(ii) LMC shall timely prepare (or cause to be so
prepared) all other Returns of LTVGIA that are required by law for all taxable
periods ending on or before the Closing Date ("Pre-Closing Non-Consolidated
Returns"). All Pre-Closing Non-Consolidated Returns shall be prepared in a
manner consistent with prior practice and shall properly include and reflect the
income, activities, operations and transactions of LTVGIA, as applicable. LMC
shall timely file (or cause to be so filed) all Pre-Closing Non-Consolidated
Returns and shall pay (or cause LTVGIA to pay as it may be liable) all Taxes due
thereon. LMC shall also pay (or cause LTVGIA to pay as it may be liable) the
full amount of any Tax which is payable by LTVGIA without the filing of a Return
("Non-Return Taxes") to the extent such Non-Return Taxes are attributable to
taxable periods or any portion thereof ending on or before the Closing Date.
(e) Cooperation of the Parties. The parties shall cooperate with
each other in connection with any Tax filing, investigation, audit or other
proceeding relating to LTVGIA. LMC shall preserve all information, returns,
books, records and documents relating to any liabilities for Taxes with respect
to a taxable period until the later of the expiration of all applicable statutes
of limitation and extensions thereof, or a Final Determination (if a Legal
Proceeding or other action that is reasonably likely to lead to a Final
Determination is commenced prior to the expiration of the statute of limitations
and any extension thereof).
(f) Notices Regarding Taxes. If TNCL, NPAL or LTVGIA receives any
notice, whether orally or in writing, of any pending or threatened U.S. Federal,
state, local, municipal or foreign tax examinations, claims, settlements,
proposed adjustments, assessments or reassessments or related matters with
respect to Taxes that could affect LMC or its Subsidiaries (or LTVGIA with
respect to taxable periods or portions thereof ending on or before the Closing
Date), or if LMC or any of its Controlled Affiliates receives any notice of any
such tax matter that could reasonably be expected to give rise to an
indemnification obligation to TNCL under paragraph 7.6(h) below or otherwise
materially adversely affect TNCL, the party receiving such notice shall notify
in writing the potentially affected party within ten (10) calendar days thereof.
The failure of any party to give the notice required by this paragraph shall not
impair that party's rights under this Agreement except to the extent that the
other party demonstrates that it has been damaged thereby.
(g) Control of Tax Proceedings. Each of LMC and TNCL shall have
the right to control any audit or examination by any taxing authority, initiate
any claim for refund, file any amended return, contest, resolve and defend
against any assessment, notice of deficiency or other adjustment or proposed
adjustment relating to or with respect to any Taxes, the ultimate liability for
which is the responsibility of that party or its Affiliates under this
Agreement, and each of LMC and TNCL shall be entitled to, and to the extent
received directly or indirectly by the other
-27-
shall be promptly paid by the other, all refunds with respect to any such Taxes.
LMC and TNCL shall jointly control, defend and resolve any such tax matter as to
which they both may be liable (in whole or in part).
(h) Indemnification. After the Closing Date, LMC shall indemnify
and hold harmless TNCL and NPAL, and each of their respective successors and
assigns from and against any Tax liability of LTVGIA with respect to the period
ending on or before the Closing Date on any Pre-Closing Non-Consolidated Return
and with respect to any Non-Return Taxes attributable to the portion of the
period covered by any payment of such Taxes which ends on or before the Closing
Date, in each case to the extent such amount exceeds any amount previously paid
to TNCL, NPAL, and their respective Affiliates, successors and assigns with
respect to such Tax pursuant to this Section 7.6. LMC shall pay such amounts as
it is obligated to pay to TNCL within ten (10) calendar days after notice is
given to LMC of the payment of any such applicable Tax liability by TNCL,
together with evidence of such payment and a statement setting forth in
reasonable detail the nature and amount of such Tax liability, and to the extent
not paid by LMC within such 10-day period, the amount due shall thereafter
include interest thereon at a rate per annum equal to the prime rate as publicly
announced from time to time by The Bank of New York (the "Overpayment Rate"),
adjusted as and when changes to such Overpayment Rate shall occur, compounded
semi-annually. LMC shall indemnify and hold harmless TNCL, NPAL and each of
their respective Affiliates, successors and assigns, from and against (i) any
Tax liability for periods prior to and including the Closing Date resulting from
LTVGIA being severally liable for any Taxes of any consolidated group (including
any Selling Affiliated Group) of which LTVGIA is or was a member prior to the
Closing Date pursuant to Treasury Regulation Section 1.1502-6 or any analogous
state, local or foreign tax provision (including, without limitation, any Tax
liability with respect to any Pre-Closing Consolidated Return), and (ii) any Tax
liability resulting from LTVGIA ceasing to be a member of any Selling Affiliated
Group of which it was a member prior to the Closing Date filing consolidated or
combined Returns. Notwithstanding anything to the contrary in this Section
7.6(h), LMC shall not be obligated to indemnify TNCL, NPAL or any of their
respective Affiliates, successors or assigns pursuant to this Section 7.6(h) to
the extent that such Tax liability would not have been incurred but for any
breach by TNCL or NPAL of any of their representations, warranties, covenants or
agreements set forth herein. To the extent permitted by law, the parties agree
to treat indemnity payments under the Agreement as adjustments to the
consideration transferred in exchange for LTVGIA.
(i) Restrictive Covenant. None of the parties hereto will take or
cause to be taken (or fail to take or cause not to be taken) any action that
would reasonably be expected to cause the Merger to be a taxable transaction to
LMC, TNCL, any Affiliate of LMC or TNCL, or any Selling Affiliated Group;
provided that the foregoing shall not restrict any party or its Affiliates from
taking any action specifically contemplated by this Agreement, which, for all
purposes under this Agreement, shall be deemed to include the contribution by
any party of the ADSs or assets acquired pursuant to this Agreement to
successive "controlled" U.S. subsidiaries of such party as defined by Section
368(c) of the Code.
(j) Tax Certificate. Each of TNCL and NPAL represents and warrants
to LMC that the statements in the proposed form of representation letter
attached hereto as Exhibit C (the "Tax Certificate") are true and correct as of
the date hereof, assuming for purposes of this sentence that the Merger had been
consummated on the date hereof. Each of TNCL and NPAL agrees that, at and prior
to the Effective Time, it will not take or cause to be taken (or fail to take
-28-
or cause not to be taken) any action that would cause any of the statements in
the Tax Certificate to be false or incorrect.
(k) Change in Tax Law. If in the written opinion of counsel
selected by LMC and reasonably satisfactory to TNCL, the conversion of the
LTVGIA Shares into ADSs in the Merger will not constitute a tax-free transaction
as to LMC, its Affiliates, and any Selling Affiliated Group solely as a result
of a change, or proposed change, in Tax law or regulations, including any change
resulting from (i) enactment, amendment or repeal of any statute, (ii)
promulgation, amendment or repeal of any final, temporary or proposed
regulation, (iii) issuance, modification or withdrawal of any judicial or
administrative interpretation, or (iv) any other legislative, administrative or
judicial action affecting current law (a "Change in Tax Law"), occurring between
the date hereof and the Closing Date, LMC shall not be required to consummate
the Merger. In the event that LMC elects not to consummate the Merger in
reliance on this paragraph, all obligations of TNCL, NPAL and LMC under this
Agreement shall terminate.
Section 7.7 Australian Treasury Matters. Each party shall have the right
to make submissions to the Treasurer of Australia notwithstanding that another
party may have made application and supplied information to the Treasurer, and
each party shall upon receiving any request for information from the Treasurer
provide such of that information as is in that party's possession or control.
ARTICLE VIII
CONDITIONS TO THE MERGER
Section 8.1 Conditions to Each Party's Obligation to Effect the Merger.
The respective obligations of each party to this Agreement to effect the Merger
will be subject to the fulfillment on or prior to the Closing Date of the
following conditions, either or both of which may be waived by the party
entitled to enforce the same, to the extent permitted by Applicable Law:
(a) HSR Act. No action shall have been taken by the U.S.
Department of Justice or the U.S. Federal Trade Commission with respect to
NPAL's acquisition of the Gemstar Shares that remains unresolved.
(b) Adverse Enactments. No action shall have been taken, and no
statute, rule, regulation, executive order, judgment, decree, or injunction
shall have been enacted, entered, promulgated or enforced (and not repealed,
superseded, lifted or otherwise made inapplicable), by any court of competent
jurisdiction or Governmental Entity which restrains, enjoins or otherwise
prohibits the consummation of the Merger (each party agreeing to use its
commercially reasonable efforts to have any such order, judgment, decree or
injunction lifted and any such statute, rule or regulation repealed, superseded
or otherwise made inapplicable).
-29-
Section 8.2 Conditions to Obligations of LMC and LTVGIA to Effect the
Merger. The obligations of LMC and LTVGIA to effect the Merger are subject to
the satisfaction of the following conditions, unless waived by LMC:
(a) The representations and warranties of TNCL and NPAL contained
in this Agreement shall be true and correct as of the date of this Agreement and
at and as of the Closing Date as though made on and as of the Closing Date
(except for representations and warranties made as of a specified date, which
shall be true and correct as of the specified date), except to the extent that
all of the breaches of such representations and warranties collectively, without
giving effect to any materiality qualification, could not reasonably be expected
to result in, or have not resulted in a continuing TNCL Material Adverse Effect.
Each of TNCL and NPAL shall have delivered to LMC a certificate, dated as of the
Closing Date, to the foregoing effect.
(b) TNCL and NPAL shall each have performed and complied in all
material respects with all covenants and agreements required by this Agreement
to be performed or complied with by it on or prior to the Closing. Each of TNCL
and NPAL shall have delivered to LMC a certificate, dated as of the Closing
Date, to the foregoing effect.
(c) LMC shall have received legal opinions of (i) Squadron,
Ellenoff, Plesent & Xxxxxxxxx, LLP, counsel to TNCL and NPAL, substantially in
the form of the opinion delivered to LMC by such firm in connection with the
NPAL/LUVSG Merger and (ii) Allens Xxxxxx Xxxxxxxx, counsel to TNCL,
substantially in the form of the opinion delivered to LMC by Xxxxx Xxxxx &
Xxxxxxx in connection with the NPAL/LUVSG Merger Agreement.
(d) The Treasurer of Australia shall not have made an order under
Section 18(2) of the Foreign Acquisitions and Takeovers Act of 1975 ("FATA")
prohibiting the Merger or any part thereof.
(e) The decision of the Foreign Investment Policy Division of the
Treasury of Australia by letter dated October 10, 2001 that there are no
objections to LMC's or its Controlled Affiliate Acquirer's acquisition of the
ADSs or TNCL Shares pursuant to the Merger under the Australian Government's
foreign investment policy (the "Treasurer Letter"), shall not have been
withdrawn or rescinded in whole or in part.
(f) If TNCL or any of its Controlled Affiliates has done or
omitted to do any act, matter or thing as a result of which LMC believes it is
required to lodge a further notice and submission to the Treasurer of Australia
either under the FATA or the Australian Government's Foreign Investment Policy
in relation to the transactions contemplated by this Agreement, one of the
following shall have occurred following the lodging by LMC of such further
notice and submission: (i) the Treasurer of Australia ceasing under Section
25(2) of FATA to be empowered to make an order under Part II of FATA in relation
to the entry into and completion of the Merger or the acquisition by LMC of the
ADRs or TNCL Shares or (ii) notice in writing is issued by or on behalf of the
Treasurer to the effect that subject to the conditions, if any, specified
therein, which are satisfactory to LMC (it being understood that LMC would be
satisfied with a notice issued on the basis described in the Treasurer Letter),
the Government of Australia does not object to LMC or its Affiliates entering
into and performing the terms of this Agreement or, alternatively, does not
object to LMC or its Affiliates acquiring the ADRs or TNCL Shares or,
alternatively, does not object to the proposal specified in the notice described
-30-
in section 25(1)(a) of FATA that was given to the Treasurer in relation to the
acquisition by LMC or its Affiliates of the ADRs or TNCL Shares.
(g) TNCL and NPAL shall have executed and delivered to LMC the Tax
Certificate substantially in the form of Exhibit C hereto and dated as of the
Closing Date, which Tax Certificate shall be true and correct as of the
Effective Time, and no Change in Tax Law shall have occurred.
(h) TNCL shall have executed and delivered to LMC the Amended
Registration Rights Agreement, and it shall be in full force and effect.
(i) TNCL and the Depositary shall have executed and delivered to
LMC the Restricted Securities Letter Agreement.
(j) LMC shall have received the stock certificates representing
the Merger Consideration.
(k) There shall not have occurred and be continuing any TNCL
Material Adverse Effect.
(l) Receipt of all consents, waivers or approvals, or the
expiration or termination of any time period, that may be required under
Applicable Law in order to consummate the Merger, if the failure to receive any
such consent, waiver or approval would have (x) a material adverse effect on the
business, assets, financial or other condition, or results of operations of LMC
and its Subsidiaries, taken as a whole, or prevent LMC from receiving, retaining
and exercising full rights of ownership of the Merger Consideration (in either
case, an "LMC Material Adverse Effect") or (y) an LTVGIA Material Adverse
Effect; provided, that compliance with any conditions of the Treasurer Letter
shall not be considered a restraint on exercising full rights of ownership of
the Merger Consideration. Notwithstanding the foregoing, LMC and LTVGIA may not
assert the failure to receive a consent, waiver or approval (or for a time
period to expire or be terminated) as a condition to its obligations if such
failure arises out of or results from a breach by LMC or LTVGIA of any of its
representations, warranties, covenants or agreements made herein.
Section 8.3 Conditions to Obligations of TNCL and NPAL to Effect the
Merger. The obligations of TNCL and NPAL to effect the Merger are subject to the
satisfaction of the following conditions, unless waived by TNCL:
(a) The representations and warranties of LMC and LTVGIA contained
in this Agreement shall be true and correct as of the date of this Agreement and
at and as of the Closing Date as though made on and as of the Closing Date
(except for representations and warranties made as of a specified date, which
shall be true and correct as of the specified date), except to the extent that
all of the breaches of such representations and warranties collectively, without
giving effect to any materiality qualification, could not reasonably be expected
to result in, or have not resulted in, a continuing LTVGIA Material Adverse
Effect.
(b) Each of LMC and LTVGIA shall have performed and complied in
all material respects with all covenants and agreements required by this
Agreement to be performed or complied with by it on or prior to the Closing
Date. LMC shall have delivered to TNCL a
-31-
certificate, dated as of the Closing Date, (i) certifying that the conditions
specified in Sections 8.3(a) and (b) have been fulfilled and (ii) attaching
certified copies of the charter documents and by-laws of LTVGIA.
(c) TNCL and NPAL shall have received the legal opinion of Xxxxx
Xxxxx L.L.P., substantially in the form of the opinion delivered to TNCL and
NPAL by such firm in connection with the NPAL/LUVSG Merger Agreement.
(d) The Treasurer of Australia shall not have made an order under
Section 18(2) of FATA prohibiting the Merger or any part thereof.
(e) The Treasurer Letter shall not have been withdrawn or
rescinded in whole or in part.
(f) LMC shall have executed and delivered to TNCL the Amended
Registration Rights Agreement and it shall be in full force and effect.
(g) LMC and the Depositary shall have executed and delivered to
TNCL the Restricted Securities Letter Agreement.
(h) Receipt of all consents, waivers or approvals, or the
expiration or termination of any time period, that may be required under
Applicable Law in order to consummate the Merger, if the failure to receive any
such consent, waiver or approval would have a TNCL Material Adverse Effect or an
LTVGIA Material Adverse Effect; provided, that the approval of the Transaction
by the Brazilian competition authorities shall not be deemed to be a condition
to the consummation of the Merger, unless (i) such approval has been denied or
(if such approval had been temporarily or conditionally granted) terminated, and
such denial or termination has become final and binding and is not subject to
further appeal and the consummation of the Merger in such a circumstance could
reasonably be expected to have a TNCL Material Adverse Effect or an LTVGIA
Material Adverse Effect or (ii) such approval has been granted subject to the
imposition of a condition imposing a material restriction or restrictions upon
the business of TNCL. Notwithstanding the foregoing, TNCL and NPAL may not
assert the failure to receive a consent, waiver or approval (or for a time
period to expire or be terminated) as a condition to its obligations if such
failure arises out of or results from a breach by TNCL or NPAL of any of its
representations, warranties, covenants or agreements made herein.
ARTICLE IX
TERMINATION, WAIVER, AMENDMENT
Section 9.1 Termination by Mutual Consent. This Agreement may be
terminated and the Merger may be abandoned at any time prior to the Effective
Time by the mutual written consent of TNCL and LMC.
Section 9.2 Termination by either TNCL or LMC. This Agreement may be
terminated and the Merger may be abandoned by either TNCL or LMC by written
notice to the other party if any Governmental Entity or any court of competent
jurisdiction in the U.S. or any other jurisdiction shall have enacted, issued,
promulgated, enforced or entered any injunction, order,
-32-
judgment or decree (other than a temporary restraining order) restraining,
enjoining or otherwise prohibiting the Merger and such injunction, order,
judgment or decree shall have become final and nonappealable.
Section 9.3 Termination by TNCL. This Agreement may be terminated by TNCL
at any time prior to the Effective Time (and the Merger shall thereupon be
abandoned) if there has been a material breach by LMC or LTVGIA of any material
representation, warranty, covenant or agreement set forth in this Agreement,
which breach has not been cured within 20 Business Days following receipt by LMC
of notice of such breach from TNCL provided, however, that the right to
terminate this Agreement pursuant to this Section 9.3 shall not be available to
TNCL if TNCL, at such time, is in material breach of any material
representation, warranty, covenant or agreement set forth in this Agreement.
Section 9.4 Termination by LMC. This Agreement may be terminated by LMC at
any time prior to the Effective Time (and the Merger shall thereupon be
abandoned) (a) in accordance with Section 7.6(k), (b) if there has been a
material breach by TNCL or NPAL of any material representation, warranty,
covenant or agreement set forth in this Agreement, which breach has not been
cured within 20 Business Days following receipt by TNCL of notice of such breach
from LMC or LTVGIA; provided, however, that the right to terminate this
Agreement pursuant to this clause 9.4(b) shall not be available to LMC if LMC,
at such time, is in material breach of any material representation, warranty,
covenant or agreement set forth in this Agreement or (c) the Merger shall not
have been consummated prior to January 27, 2002; provided, that the right to
terminate this Agreement pursuant to this clause 9.4(c) shall not be available
to LMC to the extent that LMC's failure to fulfill its obligations under this
Agreement has been the cause of or resulted in the failure of the Merger to
occur on or before such date.
Section 9.5 Effect of Termination and Abandonment. In the event of
termination of this Agreement and abandonment of the Merger pursuant to this
Article IX, no party hereto (or any of its directors or officers) shall have any
liability or further obligation to any other party to this Agreement in respect
of this Agreement or the proposed Merger, except that nothing herein will
relieve any party from liability for any breach of this Agreement or its
obligations hereunder.
ARTICLE X
INDEMNIFICATION
Section 10.1 General Indemnification.
(a) TNCL and NPAL, jointly and severally, shall indemnify and hold
harmless LMC and LMC's Affiliates, successors and assigns and their respective
directors, officers, employees, shareholders, partners, trustees, beneficial
owners, representatives and attorneys in their capacity as such (each, an
"Indemnified LMC Person") from and against and with respect to, and shall
reimburse each Indemnified LMC Person for, any and all losses, liabilities,
obligations, Adjustments, damages, judgments, assessments, fines, interest,
penalties, costs and expenses (including reasonable attorneys' fees and
expenses) ("Losses") resulting from, based upon, arising out of or otherwise in
respect of, and all claims, actions, suits, proceedings, investigations or
demands ("Claims") incident or relating to or resulting from, (i)
-33-
any untrue representation, breach of warranty or breach or nonfulfillment of any
covenant or agreement of NPAL or TNCL contained in this Agreement or in any
certificate delivered pursuant hereto by NPAL or TNCL or (ii) the beneficial
ownership (or exercise of any rights of beneficial ownership) of the Gemstar
Shares from and after the Closing by TNCL, NPAL, or any of their respective
successor or assigns or the exercise by any of them of rights under the Gemstar
Stockholders' Agreement from and after May 2, 2001 (including, without
limitation, as a result of any of the foregoing directing LMC or its Affiliates
to take any action thereunder); provided, however, that neither TNCL nor NPAL
shall be obligated to indemnify the LMC Indemnified Persons under this Section
10.1(a) to the extent that such Losses or Claims arise out of or are based upon
any breach by LMC or LTVGIA of any of their representations, covenants or
agreements set forth herein or a breach by LMC of Section 8 of the Gemstar
Stockholders' Agreement.
(b) LMC shall indemnify and hold harmless TNCL and TNCL's
Affiliates, successors and assigns and their respective directors, officers,
employees, shareholders, partners, trustees, beneficial owners, representatives
and attorneys in their capacity as such (each, an "Indemnified TNCL Person")
from and against and with respect to, and shall reimburse each Indemnified TNCL
Person for, any and all Losses resulting from, based upon, arising out of or
otherwise in respect of, and all Claims incident or relating to or resulting
from, any untrue representation, breach of warranty or breach or nonfulfillment
of any covenant or agreement of LMC or LTVGIA contained in this Agreement or in
any certificate delivered pursuant hereto by LMC or LTVGIA; provided, however,
that LMC shall not be obligated to indemnify the Indemnified TNCL Persons under
this Section 10.1(b) to the extent that such Losses or Claims arise out of any
breach by TNCL or NPAL of any their representations, covenants or agreements set
forth herein.
Section 10.2 Third Party Action Indemnification Procedures. The procedure
for indemnification in the case of Third Party Actions shall be as follows:
(a) An Indemnified LMC Person or an Indemnified TNCL Person, as
the case may be (for purposes of this Section 10.2, Section 10.3 and Section
10.5, an "Indemnified Person") shall promptly give written notice to the
indemnifying party under Section 10.1(a) or (b), as applicable (for purposes of
this Section 10.2 and Section 10.5), an "Indemnifying Person") of any pending or
threatened Claim brought by a third party (a "Third Party Action"), which notice
will include, to the extent known, the factual basis for such Claim and copies
of any documents relating to such Claim. Such notice shall be given by the
Indemnified Person within five (5) Business Days after written notice of the
assertion or commencement of a Claim was delivered to the Indemnified Person,
but failure to give timely notice shall not affect the obligation of the
Indemnifying Person hereunder except to the extent that such failure actually
prejudices the Indemnifying Person in defending against any such Claim.
(b) If an Indemnified Person gives notice to the Indemnifying
Person of a Third Party Action, the Indemnifying Person shall be entitled to
participate therein and, if it so desires, to assume the defense thereof with
counsel reasonably satisfactory to the Indemnified Person and, after notice from
the Indemnifying Person to the Indemnified Person of its election to assume the
defense thereof, except as provided below, the Indemnifying Person shall not be
liable to such Indemnified Person under this Section 10.2 for any fees of other
counsel or any other expenses, in each case subsequently incurred by such
Indemnified Person in connection
-34-
with the defense thereof, other than reasonable costs of investigation.
Notwithstanding the Indemnifying Person's election to assume the defense of a
Third Party Action, the Indemnified Person shall have the right to employ
separate counsel and to participate in the defense of such Third Party Action,
and the Indemnifying Person shall bear the reasonable fees, costs and expenses
of such separate counsel if: (i) the use of counsel chosen by the Indemnifying
Person to represent the Indemnified Person would, in the reasonable
determination of the Indemnified Person, present such counsel with a conflict of
interest, (ii) the actual or potential defendants in, or targets of, any such
Third Party Action include both the Indemnifying Person and the Indemnified
Person, and the Indemnified Person shall have reasonably concluded that there
may be legal defenses available to it which are different from or additional to
those available to the Indemnifying Person (in which case the Indemnifying
Person shall not have the right to assume the defense of such claim on the
Indemnified Person's behalf), (iii) the Indemnifying Person shall not have
employed counsel reasonably satisfactory to the Indemnified Person to represent
the Indemnified Person within a reasonable time after notice of the Third Party
Action, or (iv) the Indemnifying Person shall authorize the Indemnified Person
to employ separate counsel at the Indemnifying Person's expense. If the
Indemnifying Person assumes the defense of a claim, no compromise or settlement
thereof may be effected by the Indemnifying Person without the Indemnified
Person's written consent unless (x) there is no finding or admission of any
violation of Applicable Law and no effect on any other Claims that may be made
against or by the Indemnified Person and (y) the sole relief provided is
monetary damages that are to be paid in full by the Indemnifying Person.
Section 10.3 Benefits of Indemnification. The provisions of this Article X
are intended to be for the benefit of, and shall be enforceable by, each
Indemnified Person and its successors in interest.
Section 10.4 Non-Exclusive Remedy. The foregoing indemnification
provisions are in addition to, and not in derogation of, any statutory,
equitable or common-law remedy any party may have for breach of representation,
warranty, covenant or agreement.
Section 10.5 Tax Effects of Indemnification.
(a) Any indemnification payment made under this Agreement between
TNCL, on the one hand, and LMC, on the other hand, shall be characterized for
tax purposes as if such payment were an adjustment to the consideration
transferred in exchange for LTVGIA Shares, except to the extent the laws of a
particular jurisdiction provide otherwise.
(b) The amount of any Losses or Claims for which indemnification
is provided under this Agreement shall be (i) increased to take account of the
net Tax cost, if any, incurred by the Indemnified Person arising from the
receipt or accrual of an amount an Indemnifying Person is required to pay to an
Indemnified Person under this Agreement ("Indemnity Payment") (grossed up for
such increase) and (ii) reduced to take account of the net Tax benefit, if any,
realized by the Indemnified Person arising from incurring or paying such Losses.
In computing the amount of any such Tax cost or Tax benefit, the Indemnified
Person shall be deemed to recognize all other items of income, gain, loss,
deduction or credit before recognizing any item arising from the receipt or
accrual of any Indemnity Payment hereunder or incurring or paying any
indemnified Losses or Claims. Any Indemnity Payment hereunder shall initially be
made without regard to this Section 10.5 and shall be increased or reduced to
reflect
-35-
any such net Tax cost (including gross-up) or net Tax benefit only after the
Indemnified Person has actually realized such cost or benefit. For the purposes
of this Agreement, an Indemnified Person shall be deemed to have "actually
realized" a net Tax cost or a net Tax benefit to the extent that, and at such
time as, the amount of Taxes payable by such Indemnified Person is increased
above or reduced below, as the case may be, the amount of Taxes that such
Indemnified Person would be required to pay but for the receipt or accrual of
the Indemnity Payment or the incurrence or payment of such Losses, as the case
may be. The amount of any increase or reduction hereunder shall be adjusted to
reflect any Final Determination with respect to the Indemnified Person's
liability for Taxes, and payments between the applicable parties to reflect such
adjustment shall be made if necessary.
ARTICLE XI
MISCELLANEOUS
Section 11.1 Survival of Representations and Warranties. The
representations, warranties, covenants and agreements in this Agreement shall
survive the consummation of the Merger.
Section 11.2 Expenses. Whether or not the Merger is consummated, all costs
and expenses incurred in connection with this Agreement (including fees and
expenses of legal counsel, investment bankers, brokers or other representatives
and consultants) shall be paid by the party incurring such expenses, except (i)
with respect to Losses for which a party is obligated to provide indemnity
pursuant to Article X and (ii) that all fees, costs and expenses related to the
obtaining of Governmental Consents or the making of Governmental Filings, or the
continued effectiveness of either, in any jurisdiction outside the United States
shall be paid by TNCL (other than any costs or expenses relating to the
continuation of the effectiveness of the Governmental Consent obtained pursuant
to the Treasurer Letter, which shall be borne by the party incurring such
expenses).
Section 11.3 Counterparts. This Agreement may be executed in two or more
counterparts, all of which shall be considered the same agreement. Signature
pages from separate identical counterparts may be combined with the same effect
as if the parties signing such signature page had signed the same counterpart.
Section 11.4 Governing Law; Waiver of Jury Trial.
(a) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE
AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE, EXCEPT THAT ANY PROVISIONS
REQUIRED TO BE GOVERNED BY THE LAWS OF THE STATE OF DELAWARE SHALL BE GOVERNED
THEREBY. Each of the parties hereto (i) will submit itself to the non-exclusive
jurisdiction of any federal court located in the States of Colorado or New York
or any Colorado or New York state court having subject matter jurisdiction in
the event any dispute arises out of this Agreement, (ii) agrees that venue will
be proper as to proceedings brought in any such court with respect to such a
dispute, (iii) will not attempt to deny or defeat such personal jurisdiction or
venue by motion or other request for leave from any such court and (iv) agrees
-36-
to accept service of process at its address for notices pursuant to this
Agreement in any such action or proceeding brought in any such court. TNCL
hereby appoints News America Incorporated, 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: Xxxxxx X. Xxxxxxx, as its authorized agent (the
"Authorized Agent") upon which process may be served in any action arising out
of or based upon this Agreement or the Merger that may be instituted in any
court by any party hereto and expressly consents to the jurisdiction of any such
court, but only in respect of any such action, and waives any other requirements
of or objections to personal jurisdiction with respect thereto. TNCL represents
and warrants that the Authorized Agent has agreed to act as said agent for
service of process, and TNCL agrees to take any and all action, including the
filing of any and all documents and instruments, that may be necessary to
continue such appointment in full force and effect as aforesaid. If the
Authorized Agent shall cease to act as TNCL's agent for service of process, TNCL
shall appoint without delay another such agent and notify LMC of such
appointment in the manner provided in Section 11.6 for the giving of notices.
With respect to any such action in the courts, service of process upon the
Authorized Agent in the manner provided in Section 11.6 for the giving of
notices (substituting the address set forth above in this Section 11.4(a)) and
written notice of such service to TNCL given as provided in Section 11.6 shall
be deemed, in every respect, effective service of process upon TNCL.
(b) EACH PARTY HERETO HEREBY WAIVES ITS RIGHTS TO A JURY TRIAL OF
ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT. THE
SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES
THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS
TRANSACTION. THIS SECTION 11.4(b) HAS BEEN FULLY DISCUSSED BY EACH OF THE
PARTIES HERETO AND THESE PROVISIONS SHALL NOT BE SUBJECT TO ANY EXCEPTIONS. EACH
PARTY HERETO HEREBY FURTHER WARRANTS AND REPRESENTS THAT SUCH PARTY HAS REVIEWED
THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT SUCH PARTY KNOWINGLY AND
VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL
COUNSEL. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER
ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
SUPPLEMENTS OR MODIFICATIONS TO (OR ASSIGNMENTS OF) THIS AGREEMENT. IN THE EVENT
OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL
(WITHOUT A JURY) BY THE COURT.
Section 11.5 Specific Performance. Each of the parties acknowledges and
agrees that the other parties would be damaged irreparably in the event of a
breach of this Agreement. Accordingly, each of the parties agrees that each
party 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 as a whole in any action instituted in any court of the U.S. or any
state thereof having jurisdiction over the parties and the matter, in addition
to any other remedy to which they may be entitled, at law or in equity.
Section 11.6 Notices. All notices and other communications hereunder shall
be in writing and shall be delivered by hand, mailed by registered or certified
mail (return receipt requested) or sent by prepaid overnight courier (with proof
of service) or confirmed facsimile transmission to the parties as follows (or at
such other addresses for a party as shall be specified by like notice), such
notice to be presumed effective (i) on receipt if delivered by hand or via
-37-
facsimile transmission, or (ii) on the next Business Day, if delivered by
overnight courier, or (iii) on the third Business Day following mailing, if
mailed (except that notice of change of address will not be deemed given until
received):
To LMC or (prior to the Closing) LTVGIA:
Liberty Media Corporation
00000 Xxxxxxx Xxxxxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Facsimile: (000) 000-0000
Attn: Xxxxxxxxx X. Xxxxxxxxx, Esq.
with a copy (which shall not constitute notice) to:
Xxxxx Xxxxx L.L.P.
000 Xxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, XX 00000-0000
Facsimile: (000) 000-0000
Attn: Xxxxxxxxx X. XxXxxxx, Esq.
To TNCL or NPAL:
The News Corporation Limited
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
Attn: Xxxxxx X. Xxxxxxx, Esq.
with a copy (which shall not constitute notice) to:
Squadron Ellenoff Plesent & Xxxxxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
Attn: Xxx X. Xxxxxxxxx, Esq.
Section 11.7 Entire Agreement. This Agreement embodies the entire
agreement and understanding between the parties relating to the subject matter
hereof and supersedes all prior agreements and understandings relating to the
subject matter hereof.
Section 11.8 No Third Party Beneficiaries. This Agreement is not intended
to and shall not confer upon any Person other than the parties hereto any rights
or remedies hereunder or by reason hereof, except as provided in Article X
hereof.
Section 11.9 Binding Effect; Assignment. This Agreement shall be binding
upon, inure to the benefit of, and be enforceable by and against, the parties
and their respective successors and assigns; provided, however, that this
Agreement shall not, nor shall any of the rights or interests hereunder, be
assigned by any party hereto or be assignable by operation of law or otherwise
without the prior written consent of the other parties; provided, further,
however, that
-38-
after the Closing, TNCL may, subject to compliance with Section 7.6(i), assign
its rights under this Agreement to any TNCL Subsidiary so long as TNCL remains
responsible for all of its obligations hereunder and, prior to or after the
Closing, LMC may, subject to compliance with Section 7.6(i), assign its rights
and obligations hereunder by operation of law or in connection with the transfer
of all or substantially all of its assets or may assign its rights hereunder to
any Subsidiary of LMC so long as LMC remains responsible for all of its
obligations hereunder.
Section 11.10 Headings. The headings contained in this Agreement are for
reference purposes and shall not affect in any way the meaning or interpretation
of this Agreement.
Section 11.11 Severability. Any term or provision of this Agreement that
is invalid or unenforceable in any jurisdiction shall, as to that jurisdiction,
be ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of this
Agreement is so broad as to be unenforceable, the provision shall be interpreted
to be only so broad as is enforceable.
Section 11.12 Further Assurances. Each of the parties hereto shall sign
and deliver, without additional consideration, such other documents of further
assurance as may reasonably be necessary to give effect to the provisions of
this Agreement.
-39-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the date first above written.
LIBERTY MEDIA CORPORATION
By:
-------------------------------
Name: Xxxxxxxxx X. Xxxxxxxxx
Title: Senior Vice President
LIBERTY TVGIA, INC.
By:
-------------------------------
Name: Xxxxxxxxx X. Xxxxxxxxx
Title: Senior Vice President
THE NEWS CORPORATION LIMITED
By:
-------------------------------
Name:
Title:
NEWS PUBLISHING AUSTRALIA LIMITED
By:
-------------------------------
Name:
Title:
-00-
Xxxxx xx Xxxxxxxx
Xxxxxx of Xxxxxxx
The foregoing instrument was acknowledged before me this day of
November, 2001 by Xxxxxxxxx X. Xxxxxxxxx as Senior Vice President of Liberty
Media Corporation. My commission expires .
Witness my hand and official seal.
----------------------------------
Notary Public
State of Colorado
County of Xxxxxxx
The foregoing instrument was acknowledged before me this day of
November, 2001 by Xxxxxxxxx X. Xxxxxxxxx as Senior Vice President of Liberty
TVGIA, Inc. My commission expires .
Witness my hand and official seal.
----------------------------------
Notary Public
State of New York
County of New York
The foregoing instrument was acknowledged before me this day of
November, 2001 by as of The News
Corporation Limited. My commission expires .
Witness my hand and official seal.
----------------------------------
Notary Public
State of New York
County of New York
The foregoing instrument was acknowledged before me this day of
November, 2001 by as of News Publishing
Australia Limited. My commission expires .
Witness my hand and official seal.
----------------------------------
Notary Public
-41-
EXHIBIT A
FORM OF
CERTIFICATE OF MERGER
OF
LIBERTY TVGIA, INC.
INTO
NEWS PUBLISHING AUSTRALIA LIMITED
The undersigned corporation DOES HEREBY CERTIFY:
FIRST: That the name and states of incorporation of each of the constituent
corporations of the merger are as follows:
NAME STATE OF INCORPORATION
Liberty TVGIA, Inc. Delaware
News Publishing Australia Limited Delaware
SECOND: That an Agreement and Plan of Merger (the "Agreement of Merger") among
the parties to the merger has been approved, adopted, certified, executed and
acknowledged by each of the constituent corporations in accordance with the
requirements of Subsection (c) of Section 252 of the General Corporation Law of
Delaware, to wit, by Liberty TVGIA, Inc. in accordance with the laws of the
State of its incorporation and by News Publishing Australia Limited in the same
manner as is provided in Section 251 of the General Corporation Law of Delaware.
THIRD: That the name of the surviving corporation of the merger is News
Publishing Australia Limited, a Delaware corporation ("NPAL").
FOURTH: That the Certificate of Incorporation of NPAL shall continue in full
force and effect as the Certificate of Incorporation of the surviving
corporation.
FIFTH: That the executed Agreement of Merger is on file at an office of NPAL,
the surviving corporation, the address of which is 0000 Xxxxx Xxxxxx Xxxxxx,
Xxxxxxxxxx, Xxxxxxxx 00000.
SIXTH: That a copy of the Agreement of Merger will be furnished, on request and
without cost, to any stockholder of any constituent corporation.
SEVENTH: That this Certificate of Merger shall be effective upon filing.
Dated:
------------------
NEWS PUBLISHING AUSTRALIA LIMITED
By:
-------------------------------
Name:
Title:
-2-
