* Indicates where text has been omitted pursuant to a request for confidential
treatment. The omitted text has been filed separately with the Securities and
Exchange Commission.
AGREEMENT
dated 4 April 1997
between
CANAL+ SA
and
FILMNET INVESTMENTS BV
and
MYRIAD HOLDINGS NETHERLANDS BV
and
MIH HOLDINGS LIMITED
and
MIH LIMITED
and
IRDETO BV
-----------------------------------------
INVESTMENT & SHAREHOLDERS' AGREEMENT
relating to Irdeto BV
-----------------------------------------
Mallinicks Attorneys
00 Xxxxxx Xxx
Xxxxxx X0X IAA
TABLE OF CONTENTS
RECITALS......................................................................4
DEFINITIONS AND INTERPRETATION................................................5
AGREEMENT FOR SALE...........................................................10
PURCHASE CONSIDERATION.......................................................11
COMPLETION...................................................................11
WARRANTIES...................................................................12
BUSINESS OF THE COMPANY......................................................12
BOARD OF DIRECTORS AND MANAGEMENT............................................13
BUDGETS......................................................................17
FINANCING....................................................................18
FUNDAMENTAL BUSINESS DECISIONS...............................................20
TRANSFERS OF SHARES..........................................................23
GOVERNING LAW AND ARBITRATION................................................28
BUSINESS ACTIVITIES ONLY THROUGH THE COMPANY.................................29
DURATION AND TERMINATION.....................................................30
CONFIDENTIALITY..............................................................31
WAIVERS......................................................................32
ASSIGNMENT...................................................................32
GUARANTEE....................................................................32
ENTIRE AGREEMENT.............................................................33
NOTICES......................................................................33
ANNOUNCEMENTS................................................................34
RELATIONSHIP OF THE SHAREHOLDERS.............................................35
CONFLICT WITH OTHER DOCUMENTS................................................35
NEW STATUTUES................................................................35
COUNTERPARTS.................................................................36
SCHEDULE 1: FUNDAMENTAL BUSINESS DECISIONS...................................38
SCHEDULE 2: DRAFT NEW STATUTES OF IRDETO.....................................40
INVESTMENT & SHAREHOLDERS' AGREEMENT
This Agreement is made on 4 April 1997 between
(1) Canal+ SA, a societe anonyme incorporated under the laws of France,
whose principal place of business is at 00/00 Xxxx Xxxxx Xxxxxxx,
Xxxxx, Xxxxxx ("Canal+"); and
(2) FilmNet Investments BV, a company incorporated in The Netherlands,
whose principal place of business is at Xxxxxxxxxxxxxx 00, XX 0000 XX
Xxxxxxxxx, Xxx Xxxxxxxxxxx ("FilmNet"); and
(3) Myriad Holdings, Netherlands BV , a company incorporated in The
Netherlands, whose registered address is at Xxxxxxxxxxxxxx 00, XX0000
XX Xxxxxxxxx, Xxx Xxxxxxxxxxx ("Myriad"); and
(4) MIH Holdings Limited, a company incorporated in the Republic of South
Africa, whose registered office is at 00 Xxxxxxxx Xxxx, Xxxxxxxx, Xxxxx
Xxxxxx ("Holdings"); and
(5) MIH Limited, a company incorporated in the British Virgin Islands,
whose registered office is at 3rd Floor, Abbot Building, Main Street,
Road Town, Tortola, British Virgin Islands ("MIH"); and
(6) Irdeto BV, a company incorporated in The Netherlands, whose principal
place of business is at Xxxxxxxxxxxxx 00, 0000 XX Xxxxxxxxx, Xxx
Xxxxxxxxxxx (the "Company" or "Irdeto").
1 RECITALS
1.1 On 16 December 1996, Irdeto, Canal+, MIH, Holdings and
NetHold B.V. entered into a Term Sheet which sets out the main
principles which govern -
1.1.1 the acquisition by MIH of a portion of the shares in
and shareholders' loan claims against the Company;
and
4
1.1.2 the relationship between the parties as (direct and
indirect) shareholders of the Company.
1.2 The registered owner of all the issued Shares in the Company
is FilmNet, an indirect wholly owned subsidiary of NetHold
B.V. NetHold B.V. will on the Closing Date become an indirect
wholly owned subsidiary of Canal+.
1.3 MIH wishes to hold its shareholding in the Company through
Myriad, which is an indirect wholly owned subsidiary of MIH.
1.4 The purpose of this Agreement is accordingly to record the
terms and conditions -
1.4.1 upon which Myriad will acquire the Sale Shares and
Loan Claims; and
1.4.2 regulating the relationship between FilmNet and
Myriad as direct Shareholders (and where appropriate,
between Canal+ and MIH as indirect Shareholders) of
the Company.
2. DEFINITIONS AND INTERPRETATION
In this Agreement -
2.1 clause headings are inserted for convenience only and shall
not be taken into account in its construction.
2.2 unless the context clearly indicates a contrary intention, an
expression which denotes any one gender includes the other
genders, a natural person includes an artificial person and
vice versa, the singular includes the plural and vice versa
and the following expressions bear the meanings assigned to
them below and cognate expressions bear corresponding
meanings -
"Agreed Proportions" - such proportions as equal,
at the time when
5
any shareholders' funds are
to be contributed by the
Shareholders under clause
10, the percentages which
the nominal value of the
Shares beneficially owned by
the Shareholders
respectively bears to the
combined nominal value of
all the issued Shares (taken
as a whole);
"Agreement" - this agreement and the
schedules hereto;
"Auditors" - the auditors from time to
time of the Company;
"Board" - the managing board
("Bestuur") of the Company;
"Budgets" - the annual budgets and
financial and business plans
for the Company, as approved
by the Board from time to
time;
"Business" - the business of the Company
as set out in clause 7.1;
"Closing" - closing of the transactions
provided for in the
Contribution and
Subscription Agreement, in
the manner specified in
Section 2.4 of such
Agreement;
"Closing Date" - the date defined as such in
the Contribution and
Subscription Agreement;
"Contribution and
6
Subscription Agreement" - the agreement of that title
concluded on 16 December
1996 between Canal+,
Richemont SA, MIH, Holdings
and Network Investments SA;
"Controlled Affiliate" - in relation to any Person,
any other Person directly or
indirectly Controlled by
such Person, provided that
for purposes of this
definition "Control" means
the holding of in excess of
80% (eighty percent) of the
equity and voting rights in
respect of such other
Person;
"Directors" - the members of the Board
from time to time
("Bestuurders").
"Encumbrance" - includes, without
limitation, any usufruct,
pledge, attachment, lien
(other than liens arising
and being discharged by the
operation of law in the
ordinary course of
business), security
interest, preferential
rights or trust arrangement
or other arrangement or
agreement, the effect of
which is the creation of
security, and any option,
pre-emption or other such
right;
"Fundamental Business
Decisions" - decisions of the general
meeting of shareholders of
the Company or of the Board,
as the case may be, relating
to any of the matters listed
in Schedule 1;
7
"Indebtedness" - any loan, bond, note, loan
stock or debenture or other
obligation for borrowed
monies, any indebtedness in
the nature of borrowings,
any liability in respect of
any trade finance or credit,
financial leases, acceptance
credit or note or xxxx,
discounting facility, any
amount of consideration left
outstanding by way of loan
under any agreement for the
sale of assets and/or the
supply of services and any
guarantee or indemnity in
respect of any of the
foregoing, the amount
thereof in each case being
taken for this purpose to be
the maximum amount capable
of being outstanding from
the Company thereunder
whether or not then due or
owing or advanced at the
time of calculation;
"Loan Claims" - 50% (fifty percent) of all
monetary claims which
FilmNet and NetFin
respectively may have
against the Company on the
Closing Date;
"NetFin" - NetHold Finance VOF;
"Pay-TV" - (i) the exhibition or
transmission, whether by
wire, telephone wire, over
the air, cable, optic fibre,
satellite, microwave signals
or any other means of
delivery, of audio, visual
and/or audio-visual
programming or services
substantially in scrambled
or encrypted format, to a
subscriber, capable of being
unscrambled or decrypted by
individually
8
addressable decoders or
equivalent devices, where a
fee is payable by such
subscriber (in addition, if
applicable, to being charged
by the person transmitting
the signal incorporating
such programming) for the
right to view and/or
participate in such
television programmes and
services in unencrypted
format; (ii) the provision,
enabling and disabling of
decoders or equivalent
devices, the marketing and
sale of subscriptions and
the provision of
customer/subscriber support
services and/or know-how
relating thereto; and (iii)
in connection with the
above, the compilation and
scheduling of such
television services,
programming, signal
distribution and other
related technical activities
and know-how;
"Permitted Transferees" - a Person to whom Shares are
transferred in accordance
with clause 12.4;
"Person" - any individual, firm,
company, corporation,
government, State or agency
of a State or any joint
venture, partnership or
other incorporated or
unincorporated body;
"Sale Shares" - 19999 (nineteen thousand
nine hundred and ninety
nine) ordinary Shares of NLG
1 (one Dutch Guilder) each,
consisting 50% (fifty
percent) (less one Share) of
the total issued Shares;
9
"Shareholders" - FilmNet, Myriad and their
Permitted Transferees from
time to time;
"Statutes" - the Statutes of the Company
at the date of this
Agreement and as such
Statutes may be amended from
time to time;
"Share" - a share in the capital of
the Company of whatever
class;
"Technology Agreements" - the Short Form Technology
Agreement dated 16 December
1996 between Canal+,
Irdeto, MIH, Holdings,
Paltech Ltd, MultiChoice
Africa (Pty) Ltd and/or all
definitive agreements
referred to therein or
concluded pursuant thereto;
"Transfer" - in relation to any Share or
any legal or beneficial
interest in a Share,
includes (i) the sale,
transfer, lease, assignment,
grant, renunciation,
alienation, or disposal of
such Share or of any right
or interest which a Person
may have in the Company as a
result of such right or
interest in that Share; (ii)
entering into any agreement
in respect of the votes
attached to such Share;
(iii) creating or granting
any Encumbrance over or in
respect of such Share; and
(iv) any agreement (whether
or not subject to
conditions) to do or create
or grant any of the
aforegoing.
3 AGREEMENT FOR SALE
10
Subject to the terms and conditions of this Agreement, on 8 April 1997,
FilmNet shall sell (and in the case of Loan Claims owed by the Company
to NetFin, shall procure that NetFin shall sell) and Myriad shall
purchase, the Sale Shares and the Loan Claims. The Sale Shares shall be
free of all Encumbrances (other than those recorded in the Statutes)
and shall be sold with all rights attached or accruing to them on the
Closing Date.
4 PURCHASE CONSIDERATION
The purchase consideration for the Sale Shares and the Loan Claims
shall be the sum of US$17.5 million (seventeen and a half million
United States Dollars).
5 COMPLETION
5.1 Completion of the purchase and sale of the Sale Shares and the
Loan Claims shall be effected on 8 April 1997, in the
following manner -
5.1.1 FilmNet, Myriad and the Company shall execute a
notarial deed before a Dutch notary transferring the
Sale Shares from FilmNet to Myriad and immediately
thereafter the Board shall register Myriad as the
holder of the Sale Shares;
5.1.2 Canal+ shall cause FilmNet and NetFin to assign to
Myriad (or to a Controlled Affiliate of MIH,
nominated in writing by MIH not later than 5 (five)
days before the Closing Date) all the Loan Claims,
5.1.3 a meeting of the shareholders of the Company shall be
held at which it shall be resolved -
5.1.3.1 to elect as Directors of the Company such
two persons as Myriad and FilmNet may
respectively nominate. The parties
acknowledge that the current directors of
the Company will,
11
pursuant to the provisions of Section 2.4
(v) of the Contribution and Subscription
Agreement, resign as directors with effect
from the Closing Date and the parties will
not do anything to prevent such resignations
taking effect;
5.1.3.2 to adopt new Statutes which will reflect all
the fundamental principles set out in
Schedule 2 and which will be consistent with
the provisions of this Agreement.
5.2 On completion of the matters set out in clause 5.1, Myriad
shall discharge the purchase consideration for the Sale Shares
and the Loan Claims by paying the amount thereof into account
number 628158955 with the HBU Bank of Xxxxxxxxxx 000, 0000 XX
Xxxxxxxxx branch, by means of a wire transfer.
6 WARRANTIES
6.1 Canal+ and FilmNet severally warrant that on the date of this
Agreement and on the Closing Date, they have and will have
full power and authority to enter into and perform this
Agreement, which constitutes binding obligations on each of
them in accordance with its terms.
6.2 MIH and Myriad warrant that they have, and on the Closing Date
will have, full power and authority to enter into and perform
this Agreement, which constitutes binding obligations on each
of them in accordance with its terms.
6.3 Save as aforesaid, no party gives any warranties or
representations to any other in relation to the purchase and
sale of the Sale Shares and Loan Claims.
7 BUSINESS OF THE COMPANY
7.1 The business of the Company is -
12
7.1.1 the creation and/or acquisition of technology
relating to Pay TV including, without limitation,
conditional access systems, business systems for
subscriber management and studio operations and
operating systems/applications;
7.1.2 the commercialisation, marketing and distribution (by
installing, servicing and supporting) of such Pay-TV
technology through licensing (including both hardware
and software) and consultancy, including, without
limitation, system integration, anywhere in the
world;
7.1.3 any other business which the Shareholders may agree
on from time to time.
7.2 MIH and Myriad hereby undertake to support the development by
or on behalf of the Company and Canal+ of an interface
between the Company's digital access control technology and
the "Media Highway" software developed by Canal+, provided
that MIH (or any Controlled Affiliate of MIH, nominated by
MIH) shall be entitled to obtain a license to use such
software on fair and reasonable commercial terms. MIH and
Myriad further undertake to support any efforts towards the
integration or convergence of the Irdeto and SECA digital
access control technologies, provided that the interests and
rights in the Company of MIH and Myriad that result from this
Agreement shall not be adversely affected, subject to
dilution, as a result of such integration or convergence, it
being understood that such integration or convergence will not
cause the Fundamental Business Decisions to be extended to
matters which do not affect the Company, its affairs or the
Business.
8 BOARD OF DIRECTORS AND MANAGEMENT
8.1 The Board shall comprise 4 (four) persons. For so long as a
Shareholder owns -
8.1.1 25 percent or less of the issued Shares, it shall be
entitled to nominate 1 (one) person for election as a
Director;
8.1.2 more than 25% (twenty five percent) but less than 75%
(seventy five percent)
13
of the issued Shares, it shall be entitled to
nominate 2 (two) persons for election as Directors;
and
8.1.3 75% (seventy five percent) or more of the issued
Shares, it shall be entitled to nominate 3 (three)
persons for election as Directors.
Each Shareholder shall be entitled from time to time, by
notice in writing to the other Shareholder, to remove any of
the persons nominated by it for election as Directors and
nominate someone else to take his place.
8.2 Each Shareholder undertakes to the other to exercise all
voting rights exercisable by it as a holder of Shares to
ensure -
8.2.1 that the persons nominated from time to time by each
Shareholder as Directors (respectively referred to as
the "Canal+ Directors" and the "MIH Directors") are
duly elected as such; and
8.2.2 the removal of a person from the Board if such
removal is requested in writing by the Shareholder
who previously nominated such person for election
as a Director.
8.3 A quorum at meetings of the Board shall be two Directors, who
may be present either physically, by telephone, video
conference or such other telecommunications medium as all the
Directors from time to time agree on or may be represented by
a written power of attorney given in favour of another
Director, provided that at meetings of the Board at which a
resolution relating to any of the Fundamental Business
Decisions will be proposed the quorum will be two Directors,
one of whom shall be a Canal+ Director and one of whom shall
be an MIH Director. Each Shareholder shall use all its
reasonable endeavours to procure that a quorum is present at
any Board meeting. Should a quorum not be present within 30
(thirty) minutes after the time appointed for the commencement
of any meeting of the Board, that meeting shall stand
adjourned to the day after the following day, at the same time
and place. The adjourned meeting
14
may only deal with the matters which were on the agenda of the
meeting which was adjourned. Where a meeting has been
adjourned as aforesaid the Chairman shall use his best
endeavours to inform, in the most reasonably expeditious
manner, each of the Directors who are not present at the
meeting that was adjourned of the time, date and place to
which the meeting has been adjourned. If at any adjourned
meeting, a quorum is not present within 30 (thirty) minutes
after the time appointed for the commencement of such meeting,
then the Directors present in person or by written power of
attorney in favour of another Director shall constitute a
quorum.
8.4 Notwithstanding anything to the contrary herein contained, but
subject to the provisions of any applicable laws in the
Netherlands, any resolution signed by all the Directors shall
be valid and effective as if it had been passed at a meeting
of the Board. Any such resolution may consist of several
counterparts, each of which may be signed by 1 (one) or more
Directors and shall be deemed to have been passed on the date
on which it was signed by the last Director who signed it
(unless a statement to the contrary is made in that
resolution).
8.5 FilmNet shall be entitled to nominate 1 (one) of the Canal+
Directors to be the chairman of the Board ("Chairman") and the
Shareholders shall use their best endeavours to procure,
subject to any applicable laws, that all Directors nominated
by them will act and vote in such manner as may be necessary
to elect such Canal+ Director as Chairman. FilmNet shall be
entitled from time to time, by notice in writing to Myriad, to
remove any person nominated by it for election as Chairman and
nominate another Canal+ Director to take his place and Myriad
shall use its best endeavours to procure, subject to any
applicable laws, that all Directors nominated by it, vote and
act in such manner as may be necessary to give effect to
FilmNet's wishes in this regard.
8.6 All decisions of the Board shall be by majority vote of the
Directors. The Chairman shall have a casting vote in case of a
deadlock between the Directors, except in relation to any
Fundamental Business Decision, in relation to which unanimity
of the Directors or the Shareholders, as the case may be,
shall be required.
15
8.7 Meetings of the Board shall be held in Hoofddorp (or such
other place as all Board members may agree on from time to
time) at such times as the Board shall determine, provided
that, unless otherwise agreed between the Shareholders, a
meeting of the Board shall be held at least once every 3
(three) calendar months and provided further that any MIH
Director shall be entitled, by written notice to all other
Directors, to call an emergency Board meeting in the event of
a dispute between Paltech Ltd (or its permitted assignees
under the Technology Agreements) and the Company regarding the
performance by the Company of its obligations under the Pay TV
technology licence(s) granted by the Company to Paltech Ltd
(or to its permitted assignees under the Technology
Agreements) (or any other related agreement between such
parties). In the event that such dispute is not resolved
within 15 (fifteen) days after the emergency Board meeting
then a Deadlock shall be deemed to have arisen and the
provisions of clause 11.2.2 shall apply, provided that the 60
(sixty) day period referred to therein shall be reduced to 30
(thirty) days after the date on which the Deadlock was first
deemed to have arisen. Not less than 14 (fourteen) days notice
(or such other period of notice as may be agreed from time to
time by a Canal+ Director and a MIH Director) of each meeting
of the Board specifying the date, time and place of the
meeting and the business to be transacted thereat shall be
given to all Directors by the Chairman (or by the applicable
MIH Director, in the case of an emergency Board meeting as
aforesaid).
8.8 All decisions of the Shareholders (other than Fundamental
Business Decisions) shall be adopted by a simple majority of
the votes exercisable by both Shareholders.
8.9 For as long as FilmNet or any Controlled Affiliate of Canal+
owns a majority of the Shares, Canal+ shall have the right-
8.9.1 to manage the day to day business of the Company as
it deems fit and Canal+ shall be entitled to
nominate such staff, including a Chief Executive
Officer ("CEO") and a Chief Financial Officer
("CFO"), as may be necessary to do so and shall
furthermore be entitled to remove and replace such
staff from time
16
to time,
8.9.2 to appoint the Procuratiehouder(s) of the Company who
shall act in accordance with the instructions of the
Board. It is recorded, for the avoidance of doubt,
that the parties shall procure that such
Procuratiehouders shall not be authorised to bind the
Company in relation to any Fundamental Business
Decision unless the provisions of clause 11.1 shall
have been complied with.
8.10 Each Shareholder shall exercise all voting rights exercisable
by it as a holder of Shares and shall use its best efforts to
procure that the Directors nominated by it exercise their
voting rights in order to ensure that the persons designated
by Canal+ as CEO and CFO respectively, be so appointed.
8.11 The CEO and the CFO shall -
8.11.1 report to the Board and shall comply with all
policies and directions laid down by the Board.
8.11.2 be entitled to attend all Board meetings but shall
not be entitled to vote at such meetings.
8.12 Myriad shall be entitled to designate, in consultation with
FilmNet, one of the two representatives of the Company on the
Digco technical committee, provided that Myriad shall procure
that with regard to the activities of such committee, its
representative shall at all times act on the instructions of
the Company's management. MIH, Myriad, NetHold and FilmNet
hereby acknowledge and accept the obligations of the Company
in relation to Digco BV and each Shareholder undertakes to
assume its proportionate share of the Company's financial
obligations resulting therefrom.
9 BUDGETS
9.1 Each Budget shall consist of an annual and a 3 (three) year
rolling budget and financial
17
and business plan for the Company.
9.2 Canal+ shall procure that -
9.2.1 a budget in respect of the 1997/1998 financial year
and a 3 (three) year rolling budget and financial and
business plan is prepared by the CEO and CFO and
submitted to the Directors for their approval by not
later than 31 May 1997;
9.2.2 a budget in respect of each and every subsequent
financial year is prepared by the CEO and CFO and
submitted to the Directors for their approval. If
such budget is unanimously approved (with or without
amendment) by the Directors it shall constitute the
Company's Budget for the financial year (or shorter
period) in respect of which it was prepared. If any
annual budget shall not be so approved by the
Directors before the start of each financial year of
the Company, a Deadlock (as defined in clause 11.2)
shall be deemed to have arisen on the first day of
such financial year, which Deadlock shall be dealt
with as set out in clause 11.2. Until the Deadlock is
resolved, the Company shall continue to operate on a
budget equivalent, on a monthly basis, to the
previous Budget with an increase of 5% (five percent)
for all operating cost items specified in such
Budget. It is recorded, for the avoidance of doubt,
that except for the 3 (three) year rolling financial
and business plan prepared pursuant to the provisions
of clause 9.2.1, a failure by the Directors to
approve unanimously a 3 year rolling financial and
business plan shall, unlike as is the case in
relation to an annual budget, not be deemed to
constitute a Deadlock.
10 FINANCING
10.1 Neither Shareholder shall be obliged to provide any
shareholders' funds to the Company unless such funds are
required and expressly set out in terms of a Budget. If, at
any time, shareholders' funds are required in terms of any
Budget to finance the Business, the Directors shall issue to
each Shareholder a notice in writing (the
18
"Notice"), requiring each of them provide, in the Agreed
Proportions, such shareholders' funds (either by subscribing
for new shares in the Company or by way of shareholders' loans
to the Company, as shall have been set out in the Budget).
10.2 Each of the Shareholders shall contribute in cash the amount
of shareholders' funds stated in the notice within 30 (thirty)
days (or such greater number of days as all the Directors
agree on) after the date of the Notice.
10.3 If either Shareholder fails to contribute its Agreed
Proportion of the shareholders' funds within the time
specified, the Company shall be entitled to take such action
as it thinks fit for obtaining payment of the contribution
including, without limitation, commencing legal proceedings
against the defaulting Shareholder for breach of its
obligations. The defaulting Shareholder shall refrain from
using its rights and other powers in relation to the Company
and shall, subject to any applicable laws, instruct the
Directors nominated by it not to do anything to prevent or
delay action being taken by the Company.
10.4 If either Shareholder fails to contribute its Agreed
Proportion of the shareholders' funds within the time
specified, the other Shareholder shall be entitled (if it has
already contributed its Agreed Proportion of the shareholders'
funds) to pay, to the Company, in cash, the amount due to the
Company by the defaulting Shareholder. The amount shall be
wholly applied (notwithstanding any other provision of this
Agreement), in the discretion of the paying Shareholder, in
providing additional shareholders' loans or subscribing for
additional Shares at par of the same class as those Shares
already held or beneficially owned by the paying Shareholder
or a combination of additional shareholders' loans and
additional Shares.
10.5 If the shareholders' funds referred to in clause 10.1 are
contributed to the Company by the Shareholders in the form of
loan capital, the terms and conditions applicable to such
loans shall be as agreed upon between the Shareholders and
shall be set out in the Notice.
19
10.6 A Shareholder who fails to contribute its Agreed Proportion of
any shareholders' funds and whose equity interest in the
Company is diluted pursuant to the provisions of clause 10.4
shall remain fully liable to the Company, in its diluted
Agreed Proportion, for shareholders' funds which the
Shareholders may become obliged to provide pursuant to the
provisions of clauses 10.1 and 10.2.
11 FUNDAMENTAL BUSINESS DECISIONS
11.1 The parties acknowledge and agree that no resolution relating
to any of the Fundamental Business Decisions shall be
validly adopted nor shall any action be taken by the Company
in relation to such Fundamental Business Decisions unless
(i) at a general meeting of the members of the Company, both
Shareholders shall have voted in favour thereof; or (ii) at
a meeting of the Board, all the Canal+ Directors and all
the MIH Directors shall have voted in favour thereof,
provided however, that the aforesaid requirements shall
lapse and have no further force or effect in respect of a
Shareholder (and in respect of the Directors nominated by
such Shareholder) whose shareholding falls below 45% (forty
five percent) of all the issued Shares of the Company. If a
Shareholder's shareholding is reduced below such
Shareholder's shareholding at the date of completion in
accordance with clause 5.1 but does not fall below 45%
(forty five percent) of all the issued Shares of the
Company, such Shareholder shall be obliged by not later than
the date on which the Budget for the immediately succeeding
financial year is approved, to subscribe for such number of
additional Shares as may be required to restore such
Shareholder's shareholding to the level it was at the date
of completion in accordance with clause 5.1 (and the other
Shareholder shall use all its voting rights as a Shareholder
to facilitate such subscription), failing which the
aforesaid requirements regarding the adoption of Fundamental
Business Decisions shall lapse and have no further force or
effect in respect of a Shareholder (and in respect of the
Directors nominated by such Shareholder) whose shareholding
is diluted. The parties record, for the avoidance of doubt,
that a dilution in a Shareholder's shareholding caused by or
pursuant to the integration or convergence of the Irdeto and
the SECA digital access control technologies (as is referred
to in clause 7.2) shall not cause the above stated
20
requirements regarding the adoption of Fundamental Business
Decisions to lapse in respect of a diluted Shareholder (or in
respect of the Directors nominated by such Shareholder) even
if such Shareholder's shareholding is reduced below 45% (forty
five percent) of all the issued shares of the Company.
11.2 In the event that the Shareholders or the Directors (as may be
required in terms of Dutch law) shall have failed to adopt
(pursuant to the provision of clauses 11.1 (i) or 11.1 (ii),
as the case may be), a resolution proposed in respect of a
Fundamental Business Decision by reason of a good faith
disagreement between the Shareholders or the Directors, as the
case may be, (a "Deadlock"), then the following provisions
shall apply-
11.2.1 the chief executive officers of Canal+ and MIH shall
promptly meet to attempt in a co-operative spirit to
resolve the Deadlock.
11.2.2 if the Deadlock shall not have been resolved within
60 (sixty) days after the date on which the Deadlock
first arose, then FilmNet shall, immediatly after
expiry of such 60 (sixty) day period either -
11.2.2.1 agree, within the next 24 hours, with
Myriad's final position with respect to the
subject matter of the Deadlock and procure
the immediate implementation of such
position; or
11.2.2.2 failing compliance with clause 11.2.2.1, be
deemed to have offered to sell (the "Offer")
to Myriad, all FilmNet's Shares, in which
case Myriad shall be deemed to have accepted
such Offer 30 (thirty) days after the date
on which the Offer was deemed to have been
made (being the date on which the 24 (twenty
four) hour period referred to in clause
11.2.2.1 expires) ("Offer Date"), at a price
equal to *
21
11.3 Any sale of FilmNet's Shares pursuant to the provisions set
out above shall be subject to the following additional terms
and conditions-
11.3.1 FilmNet's Shares shall be sold cum dividend and
without any Encumbrance, with effect from the date of
acceptance of the offer.
11.3.2 the purchase price for FilmNet's Shares shall be paid
in immediately available Dutch Guilders to a bank
account (designated in writing by FilmNet) as soon as
practicable, but in any event within 15 (fifteen)
days, after the acceptance by Myriad of the Offer.
11.3.3 following any sale pursuant to the provisions set out
above, MIH shall cause Irdeto to continue to license
its technology to -
11.3.3.1 Canal+ and those of its Controlled
Affiliates which use such technology at the
time of such sale,
11.3.3.2 such of Canal+'s Controlled Affiliates as
require a licence of such technology in
order to perform their obligations to third
parties in terms of written agreements
existing at the date hereof.
on such terms and conditions as are contained in
valid and enforceable written agreement(s) between
Irdeto and such user(s)/licensee(s) at the date of
the sale or, if no such written agreements exist, on
Irdeto's then standard terms and
22
conditions
11.3.4 FilmNet shall warrant only that it is the owner of
FilmNet's Shares, free of any Encumbrance.
12 TRANSFERS OF SHARES
GENERAL RESTRICTION ON TRANSFERS
12.1 Each Shareholder undertakes that it will not Transfer any of
its Shares during this Agreement otherwise than in accordance
with the following provisions of this clause 12.
12.2 For so long as Myriad is a Shareholder, MIH shall procure that
Myriad shall be a Controlled Affiliate of MIH and for so long
as FilmNet is a Shareholder, Canal+ shall procure that
FilmNet shall be a Controlled Affiliate of NetHold BV. If an
event is about to occur as a result of which either Myriad or
FilmNet shall cease to be such a Controlled Affiliate, Myriad
or FilmNet, as the case may be, shall transfer all the Shares
in the Company owned by it to another Controlled Affiliate of
MIH (in the case of Myriad) or another Controlled Affiliate of
NetHold (in the case of FilmNet) in accordance with clause
12.4.
12.3 Canal+ shall ensure that for so long as NetHold BV or a
Controlled Affiliate of NetHold BV owns any Shares, it
(Canal+) shall retain direct or indirect control of NetHold
BV and Holdings shall ensure that for so long as MIH or a
Controlled Affiliate of MIH owns any Shares, it (Holdings)
shall retain control of MIH. For the purpose of this
provision only, control shall mean either the ownership,
directly or indirectly, of a majority of the issued shares
of MIH or NetHold BV, as the case may be, or the possession,
directly or indirectly,of the power to direct or cause the
direction of the management and policies of NetHold BV or
MIH, as the case may be, whether through the ownership of
voting securities, by contract or otherwise.
23
PERMITTED TRANSFERS
12.4 A Shareholder may, at any time and on any terms (including as
to price), Transfer all (but not part only) of its Shares, in
the case where FilmNet is the transferor, to Canal+, to
NetHold BV or to a Controlled Affiliate of either Canal+ or
NetHold BV, and in the case where Myriad is the transferor, to
Holdings, to MIH or to a Controlled Affiliate of either
Holdings or MIH, provided that -
12.4.1 the transferor shall remain a party to this Agreement
and undertakes to the other Shareholder to procure the
performance by the transferee of its obligations
pursuant to the provisions of this Agreement and to
indemnify the other Shareholder from and against a
breach by such transferee of any of its obligations
under this Agreement;
12.4.2 it shall be a condition precedent to any such Transfer
(and any registration thereof) that the transferee
agree in writing with the other Shareholder to
observe, perform and be bound by the terms and
conditions of this Agreement as if references herein
to the transferor were references to the transferee;
12.4.3 if the transferee ceases to be a Controlled Affiliate
of Canal+, NetHold BV, Holdings or MIH, as the case
may be, then the transferor shall procure that the
transferee shall have transferred to the transferor or
another Controlled Affiliate of Canal+, NetHold BV,
Holdings, or MIH, as the case may be, all its Shares
prior to the date of such cessation in accordance with
this clause 12.4
RIGHT OF FIRST REFUSAL
12.5 If, at any time, a Shareholder (the "Offeror") wishes to
Transfer any of its Shares other than as set out in clause
12.4, it shall, prior to making or becoming contractually
bound to make, any such Transfer, by notice in writing to the
other Shareholder (the "Offeree"), offer (the "Offer") to sell
all (but not a part only) of its Shares to the
24
Offeree at the "Offer Price", as determined in the manner set
out below. The Offer shall -
12.5.1 specify the Shares to which it relates (the "Offered
Shares"); and
12.5.2 stipulate a price (which shall constitute the Offer
Price), at which the Offeror is prepared to Transfer
the Offered Shares. If the Offeror has received a
bona fide written offer (the "Third Party Offer")
from a third party (the "Third Party") to purchase
the entire legal and beneficial ownership of the
Offered Shares for a cash price, a copy of such third
Party Offer, showing the name and address of the
Third Party and the terms and conditions offered by
such Third Party, shall be supplied to the Offeree.
In this case, the price offered by such third party
for the Offered Shares shall be set out in the Offer
and shall constitute the Offer Price. the Offeree
shall keep and maintain the existence and the terms
of any such third Party Offer strictly confidential
and shall only disclose them within its own corporate
structure and to outside professionals on a need to
know basis. If a Third Party Offer has been made
then, save as specifically set out herein, the Offer
shall be subject, mutatis mutandis, to the terms and
conditions contained in the Third Party Offer.
No Shareholder may offer to sell its Shares except on an "all
cash" basis, provided that a Shareholder may offer to sell its
Shares in exchange for immediately liquid marketable
securities which are listed on a national securities exchange.
12.6 The Offer shall be irrevocable and shall be open for
acceptance (in whole and not in part only) by the Offeree for
a period of 30 (thirty) days following receipt of the Offer.
Acceptance shall be made by means of a written notice,
specifying the number of Offered Shares in respect of which
the Offer is being accepted.
12.7 Should the Offeree not accept the whole of the Offer as
provided above, then the Offeror shall be entitled to sell all
(but not a part only) of the Offered Shares to the Third Party
on the terms and conditions set out in the Third Party Offer
or, where no
25
Third Party Offer had been make, to any bona fide third party,
but at a price which shall not be less than that, and on terms
and conditions which are not, taken as a whole, more
favourable to the third party purchaser than those at which
the Offeree was entitled to purchase the Offered Shares in
terms of clause 12.5, provided that the Offeror shall, before
selling the Offered Shares to such bona fide third party, in
writing advise the Offeree of the identity of such third party
and the terms and conditions on which such third party is
prepared to purchase the Offered Shares, in which case the
Offeree shall be entitled, for a period of 30 (thirty) days
after receipt of the written advice as aforesaid, to purchase
the Offered Shares on the terms and conditions at which such
third party is prepared to do so.
12.8 Should the Offeror not complete the sale of the Offered Shares
within 120 (one hundred and twenty) days (or such longer
period as may be required by law to obtain all required
approvals of Governmental bodies) after non-acceptance of the
Offer by the Offeree, then the Offeror's right to effect the
sale to the third party shall terminate and the process set
out in clause 12.5 shall commence anew with respect to any
such Shares.
12.9 Following acceptance of the Offer in full by the Offeree as
set out in clause 12.6 or clause 12.7, the Offeror shall be
obliged to sell, and the Offeree shall be obliged to purchase,
the Offered Shares at 10h00 on the date falling 10 (ten)
business days after the date of acceptance, at the registered
office of the Company (or such other time, date and place as
may be agreed by the Offeror and the Offeree) upon the terms
and conditions as set out in such Offer or on the terms and
conditions which the bona fide third party was prepared to do
so, as the case may be, and as set out immediately below.
Pending completion of such purchase and sale, the Offeror
shall remain liable for all its obligations to the Company
including, without limitation, any obligation to make capital
or loan contributions to the Company.
12.10 At the completion of the sale and purchase of the Offered
Shares to the Offeree-
12.10.1 the Offeree shall use best endeavours to procure the
immediate release
26
of all guarantees, indemnities and similar covenants,
if any, given by the Offeror in favour or for the
benefit of the Company (and pending such release
shall indemnify and keep the Offeror fully and
effectively indemnified from and against all claims
arising under such guarantees, indemnities and
similar covenants);
12.10.2 against delivery in accordance with clause 12.10.3,
the Offeree shall pay the purchase price to the
Offeror;
12.10.3 concurrently with payment of the purchase price in
accordance with clause 12.10.2 the Offeror, Offeree
and the Company shall execute a notorial deed of
Transfer of the Offered Shares in favour of the
Offeree.
12.11 Unless the transferee is an existing Shareholder, any Transfer
of Shares (and any registration thereof), other than pursuant
to clause 12.4, shall be subject to the condition precedent
that:
12.11.1 the transferee enters into an agreement in writing
with the Company and the other Shareholder in a form
reasonably acceptable to such other Shareholder,
whereby the transferee agrees to be bound by all of
the provisions of this Agreement (mutatis mutandis
and insofar as they are applicable) as those by which
the transferor is bound under this Agreement as a
Shareholder, as if it were an original Shareholder
and, where the context so permits, as if each
reference therein to the transferor were always a
reference to the transferee in place thereof); and
12.11.2 the transferee notifies the Company and the
Shareholders of its address for service of all
notices and communications to be given or made under
this Agreement.
27
TRANSFERS
12.12 Each Shareholder undertakes to exercise all shareholder rights
to procure that any Transfer of Shares made in accordance with
this Agreement can be effected and that in such an event the
Shareholders shall adopt a resolution to enable such a
Transfer to take effect and in such resolution the
Shareholders shall waive any rights which they may have under
the Statutes in relation to such Transfer.
13 GOVERNING LAW AND ARBITRATION
13.1 This Agreement shall be governed by and construed in all
respects in accordance with the laws of the Netherlands
13.2 If any dispute (other than a Deadlock, which shall be dealt
with as set out in clause 11) arises between the parties in
connection with -
13.2.1 the formation or existence of, the implementation of
or the interpretation or application of, the
provisions of the parties' respective rights and
obligations in terms of or arising out of this
Agreement or its breach or termination; or
13.2.2 the validity, enforceability, rectification,
termination or cancellation, whether in whole or in
part, of any documents furnished by any of the
parties pursuant to the provisions of this Agreement;
or
13.2.3 which relates in any way to any matter affecting the
interests of the parties in terms of this Agreement.
and the parties are unable to resolve their dispute then any
party shall be entitled to refer the dispute in the first
instance, to the respective chief executive officers of
Canal+ and MIH for resolution.
28
13.3 If the matter in dispute shall not have been resolved within
30 (thirty) days of it having been so referred under clause
13.2, either Shareholder may refer the matter in dispute for
determination by final arbitration in Geneva in accordance
with the Rules of the International Chamber of Commerce
("ICC") (which Rules are deemed to be incorporated by
reference into this clause) by three arbitrators, one of whom
shall be appointed by Canal+ and one of whom shall be
appointed by MIH. The third arbitrator, who shall be the
chairman of the tribunal, shall be appointed by agreement
between the first two appointees within 30 (thirty) days after
the date on which the second arbitrator is appointed, failing
which, such arbitrator shall be appointed by the relevant
appointing authority under the Rules of the ICC. The
arbitrators shall establish the procedural rules applicable to
the proceedings and shall conduct the arbitration proceedings
in accordance with Dutch law. The arbitration shall be
conducted in the English language. Any award of such
arbitration shall be finally binding upon the parties and this
Agreement places no restriction on the jurisdiction in which
such award shall be enforced.
13.4 This clause shall not preclude any party from obtaining
interim relief on an urgent basis from a court of competent
jurisdiction pending any decision of the arbitrators.
13.5 The provisions of this clause -
13.5.1 constitute an irrevocable consent by the parties to
any proceedings in terms hereof and no party shall be
entitled to withdraw therefrom or claim at any such
proceedings that it is not bound by such provisions.
13.5.2 are severable from the rest of this Agreement and
shall remain in effect despite the termination of or
invalidity for any reason of this Agreement.
14 BUSINESS ACTIVITIES ONLY THROUGH THE COMPANY
14.1 Subject to anything to the contrary envisaged in the
Technology Agreements, MIH undertakes that for so long as
Myriad and/or any of MIH's Controlled Affiliates is a
29
Shareholder, all the interests and activities of MIH and its
direct and indirect subsidiaries in the field of access
control technology, whether analogue or digital, shall be
conducted exclusively through the Company. For the purposes
hereof "access control technology" means technology which is
utilised for the secure transmission and controlled access of
video, audio, data and/or interactive Pay-TV services which
are accessed through the mechanism of an integrated receiver
decoder and/or another device performing the same function,
incorporating analogue or digital technology or any component
thereof.
14.2 Subject to the interests and activities of Canal+ internally
and in SECA (for digital) and in NAGRA + (for analogue), the
provisions set out in clause 14.1 shall apply, mutatis
mutandis, to Canal+ and its direct and indirect subsidiaries
for as long as FilmNet and/or any of Canal+'s Controlled
Affiliates is a Shareholder.
14.3 Canal+ and MIH shall, not later than the third anniversary of
the Closing Date, assess in good faith whether the exclusivity
provisions set out in clause 14.1 may, as they apply to MIH
and its direct and indirect subsidiaries, be alleviated, in
view of the evolution and future prospects of the SECA and
Irdeto technologies respectively.
15 DURATION AND TERMINATION
15.1 This Agreement shall automatically terminate upon the
termination of the Contribution and Subscription Agreement in
accordance with Section 10.3(a) thereof.
15.2 Except as otherwise provided herein, this Agreement shall
continue in full force and effect without time limit until the
Shareholders agree in writing to terminate this Agreement
provided, however, that this Agreement shall cease to have
effect as regards any Shareholder who ceases to hold any
shares save for any provisions hereof which are expressed to
continue in force thereafter.
30
16 CONFIDENTIALITY
Save as required by law or the requirements of any stock exchange or
other regulatory body, each of the parties hereby undertakes to the
others that -
16.1 it will not at any time hereafter divulge or communicate to any person
(except to its Controlled Affiliates and to such of its or their
employees, directors, officers or advisers whose province is to know
the same) at any time hereafter (save with the written prior consent of
the other parties) any confidential information or secret information
concerning the business, financial or contractual arrangements or other
dealings or affairs of the Company, the disclosure of which may either
be detrimental to Canal+ and/or its Controlled Affiliates or to MIH
and/or its Controlled Affiliates or may be advantageous to a competitor
of the Company, save to the extent to which such information is or
shall come within the public domain (other than by unauthorized
disclosure by that party or any of its Controlled Affiliates or any of
its or their respective employees, directors, officers or advisers) or
is rightfully received by the recipient from a third party legally
entitled to disclose such information, without breach by the recipient
of this Agreement; and
16.2 it shall procure that -
16.2.1 each of its Controlled Affiliates and any of its or
their employees, directors, officers or advisers to
whom any such information has been divulged or
communicated; and
16.2.2 each Director appointed to the board of the Company
on its nomination,
keep such information strictly confidential and do not divulge or
communicate the same to any other person (except as provided in clause
16.1).
31
17 WAIVERS
17.1 No delay in exercising or failure to exercise any right or
remedy under this Agreement shall operate as a waiver thereof
nor shall any single or partial exercise of any right or
remedy preclude either the further exercise thereof or the
exercise of any other right or remedy. The rights and remedies
provided by this Agreement are cumulative and do not exclude
any rights, powers or remedies provided by law.
17.2 In the event that any party shall expressly waive any breach,
default or omission hereunder, no such waiver shall apply to,
or operate as, a waiver of similar breaches, defaults or
omissions or be deemed to be a waiver of any other breach,
default or omission hereunder.
18 ASSIGNMENT
No party hereto shall be entitled to transfer this Agreement or any of
the rights and obligations hereunder except to a transferee of Shares
in accordance with this Agreement.
19 GUARANTEE
19.1 Canal+ undertakes to MIH to procure the performance by FilmNet
(and any Permitted Transferee of FilmNet) of its obligations
pursuant to this Agreement and indemnifies MIH from and
against a breach by FilmNet or such Permitted Transferee of
any of its obligations under this Agreement.
19.2 Holdings undertakes to Canal+ to procure the performance by
Myriad (and any Permitted Transferee of Myriad), the
incorporators of Myriad to the extent that such incorporators
are bound by this Agreement and MIH of their respective
obligations pursuant to this Agreement and indemnifies Canal+
from and against a breach by Myriad (and any Permitted
Transferee of Myriad) of any of its obligations under this
Agreement.
32
20 ENTIRE AGREEMENT
20.1 This Agreement (and the side letter dated 4 April 1997 between
Richemont SA, Holdings, MIH, Network Investments SA, PayCo
Funding SA, FilmNet, Myriad and Irdeto) constitute(s) the
entire agreement between the parties and supersede all prior
agreements between the parties concerning the subject matter
hereof. No amendment, change or additions hereto shall be
effective or binding on any party unless reduced to writing
and executed by both the Shareholders.
20.2 Each of the parties acknowledges that in entering into this
Agreement it is not relying on any representation or other
statement which is not set out in this Agreement or the other
documents referred to herein.
21 NOTICES
21.1 Notices and communications under this Agreement shall be given
in writing and may be delivered to the relevant party or sent
by registered air mail or facsimile to the address of that
party or that party's facsimile number specified in 21.2.
21.2 Notices and communications shall be addressed as follows:
if to Canal+ - 00/00 Xxxx Xxxxx Xxxxxxx, Xxxxx, Xxxxxx
Attention: Xx. Xxxx Xxxxx Xxxxxx
Vice President:- Delegue General
Fax No: 00 0 00 00 00 00
if to FilmNet - Xxxxxxxxxxxxxx 00, XX 0000 JA Hoofddorp
The Netherlands
Attention: Xx. Xxxx Xxxxx Xxxxxx
Fax No: 00 0 00 00 00 00
33
if to Myriad - Xxxxxxxxxxxxx 00, 0000 XX Xxxxxxxxx
Xxx Xxxxxxxxxxx
Attention: Xx. Xxxxx Xxxxx
Fax No: x00 00 00 00 000
if to Holdings - 00 Xxxxxxxx Xxxx, Xxxxxxxx, Xxxxx Xxxxxx
Attention: Xx. Xxxxx Xxxxx
Fax No: x00 00 00 00 000
if to MIH - 3rd Floor, Abbot Building, Main Street
Road Town, Tortola, British Virgin Islands
Attention: Xx. Xxxxx Xxxxx
Fax No: x00 00 00 00 000
if to Irdeto - Xxxxxxxxxxxxx 00, 0000 XX Hoofddorp
The Netherlands
Attention: Xx. Xxxx Xxxxx Xxxxxx
Vice President - Delegue General
Fax No: 00 0 00 00 00 00
or such other address of a party, person and/or fax number
as that party shall have notified in writing to all other
parties.
21.3 Notices and communications shall be given and made in the
English language.
22 ANNOUNCEMENTS
No announcement concerning this Agreement shall be made by any party
without prior written approval of the others, such approval not to be
unreasonably withheld.
34
23 RELATIONSHIP OF THE SHAREHOLDERS
It is expressly agreed that the relationship of the Shareholders shall
be that of joint venturers and not that of partners. Accordingly, the
Business shall be conducted as the business of the Company and no
Shareholder shall represent to any person that such Shareholder is
authorized to act on behalf of any of the other Shareholder or that any
partnership, agency, employment or joint liability exists between the
Shareholders in respect of any person who is not a party to this
Agreement.
24 CONFLICT WITH OTHER DOCUMENTS
In the event of any conflict between the provisions of this Agreement
and the provisions of the Statutes then, subject to the provisions of
Dutch law, the provisions of this Agreement shall prevail as between
the Shareholders and the Shareholders shall exercise all voting and
other rights and powers legally available to them (whether as
Shareholders or otherwise) to give effect to the provisions of this
Agreement. If there is an irreconcilable conflict between a provision
of this Agreement and a mandatory provision of Dutch law, the parties
shall use best efforts to agree on an alternative mechanism or
provision which is as close as reasonably possible to the provisions of
this Agreement and the conflicting provision contained in this
Agreement shall be invalid (but only to the extent necessary), provided
that such invalidity shall not affect the other provisions of this
Agreement.
25 NEW STATUTES
25.1 Each of the parties shall use its best endeavors to procure -
25.1.1 that the proposed New Statutes of the Company and
referred to in clause 5.1.3.2 (the "Proposed New
Statutes") are approved in their entirety and a
Declaration of No Objection in respect thereof be
issued by the applicable authorities in the
Netherlands as soon as possible after the Closing
Date; and
25.1.2 that the Proposed New Statutes are notarially
executed as the Company's new
35
Statutes not later than 10 (ten) days after the issue
of the Declaration of No Objection referred to in
clause 25.1.1.
25.2 Until such time as the steps set out in clause 25.1 have been
duly completed, each party undertakes to the other parties to
exercise all voting rights and other powers of control
available to it in relation to the Company and to the Board so
as to ensure that the business and affairs of Irdeto as well
as the relationship of the Shareholders with each other and
with the Company are conducted in the manner contemplated by
the Proposed New Statutes as if all the aforesaid steps had
been completed.
26 COUNTERPARTS
This Agreement may be executed in any number of counterparts and by the
parties on separate counterparts, each of which shall constitute an
original, but all the counterparts shall together constitute but one
and the same instrument.
27 STANDSTILL
During the period from the Closing Date until the completion in terms
of clause 5.1 of the transactions envisaged in this Agreement, neither
Canal+ nor FilmNet shall take any action or permit any action to be
taken by or in relation to the Company which would in any way conflict
or be inconsistent with the provisions of this Agreement and of the
Statutes.
SIGNED BY
/s/ MARC XXXXX XXXXXX
--------------------------------------
for and on behalf of
CANAL+ SA
SIGNED BY
/s/ MFE XXXXXXX-XXXXXXX
--------------------------------------
MFE XXXXXXX-XXXXXXX (proxy holder)
for and on behalf of
FILMNET INVESTMENTS BV
36
SIGNED BY
/s/ XXXXXXX XXXXX
--------------------
X. XXXXX
for and on behalf of
MYRIAD HOLDINGS
NETHERLANDS BV
SIGNED BY
/s/ XXXXXXX XXXXX
--------------------
X. XXXXX
for and on behalf of
MIH HOLDINGS LIMITED
SIGNED BY
/s/ XXXXXXX XXXXX
--------------------
X. XXXXX
for and on behalf of
MIH LIMITED
SIGNED BY
/s/ G.A. KILL
--------------------
XXXXXX KILL
for and on behalf of
IRDETO BV
37
SCHEDULE 1: FUNDAMENTAL BUSINESS DECISIONS
1 Adoption of annual budgets or approval of any 10% variance per annum in
the aggregate (based on operating costs).
2 Approval of the initial three-year business plan and material
amendments thereto.
3 Approval of the entering into or termination of any partnership, joint
venture or consortium with any other legal entity, the creation of any
subsidiary, or the acquisition or sale of any equity interest in any
other entity.
4 Approval of stock insurances, stock splits, creation of new classes of
securities, grants or agreements to grant options over stock or rights
to subscribe for stock, reorganization any change to or rearrangement
of the capital structure of or rights attached to the capital of
Irdeto.
5 Approval of any proposed new shareholder of Irdeto (other than a
Controlled Affiliate of a Party).
6 Appointment of exclusive marketing agents for the Irdeto technology.
7 Authorization of the lending or borrowing of funds or the making of
guarantees of amounts in excess of an aggregate of US$ five (5) million
in any year.
8 Approval of any development project not provided for in the annual
budget in excess of US$ five (5) million individually and in excess of
US$ five (5) million per annum in the aggregate.
9 Authorisation of the release of Irdeto's proprietary source code to any
person (including shareholders except for the purpose of SECA/Irdeto
integration).
10 Approval of any material change in the nature of Irdeto's business. For
the purpose of this clause, it is agreed that Irdeto's current business
is the creation and/or acquisition of technology relating to pay TV
conditional access systems, business systems for subscriber management
and
38
studio operations, and operating systems/applications; the
commercialisation, marketing and distribution (by installing, servicing
and supporting) of that technology through licensing (hard and
software); and consultancy, including systems integration. Such
technology is licensed to companies worldwide, both inside and outside
Irdeto's parent company group.
11 Settlement of any litigation involving amounts in excess of US$ 10
million.
12 Appointment or dismissal of the statutory or external auditors or
change or adoption of any material accounting principle or practice to
be applied.
13 Approval of the merger or amalgamation of Irdeto with any other company
or legal entity.
14 Approval of the liquidation or dissolution of Irdeto.
15 Approval of the filing for bankruptcy of any decision not to take
action to prevent a filing for bankruptcy or to process an involuntary
filing for bankruptcy or other windings up of Irdeto, except as
otherwise required by applicable law.
16 Amendment of the Statutes, except as envisaged in this Agreement.
17 Approval and entry into, on or prior to 30 June 1997, of the definitive
agreements on the basis of the agreement dated 16 December 1996 between
Canal+, Irdeto, MIH, Paltech Limited, MultiChoice Africa (Pty) Ltd and
Holdings
39
SCHEDULE 2: DRAFT NEW STATUTES OF IRDETO
40
UNOFFICIAL TRANSLATION
On this day, the (____)th day of nineteen hundred and ninety-seven, appears
before me, (___) NOTARIS (civil law notary), practicing in (___).
(Mr./Ms. ___)
the person appearing declares that on the (___)th day of (___), nineteen hundred
and ninety-seven, the general meeting of shareholders of Irdeto B.V., a private
company with limited liability, having its corporate seat in Hoofddorp and its
registered office at 2132 HD Hoofddorp, Xxxxxxxxxxxxx 00, has resolved to amend
the articles of association of the company and to authorize the person appearing
to execute this deed. Pursuant to those resolutions, the person appearing
declares that (he/she) amends the company's articles of association such that in
full they will read as follows:
ARTICLES OF ASSOCIATION:
NAME. CORPORATE SEAT.
ARTICLE 1.
The name of the company is: Irdeto B.V.
It has its corporate seat in Hoofddorp.
OBJECTS.
ARTICLE 2.
The objects of the company are:
a. to create and acquire technology relating to pay-television; and
b. to commercialize, market and distribute, in any manner, technology and
intellectual property rights, including, without limitation, patents,
trade marks and licenses relating to pay television; and
c. to participate in, to take an interest in any other manner in, and to
manage, other business enterprises of whatever nature, and
d. to borrow funds and to provide security for such funds, to finance
third parties and to provide security for or guarantee the obligations
of third parties, including without limitation, entities which are
controlled by, or under common control with, or control, the company;
and
to conduct all activities which are incidental to or which may be conducive to
any of the foregoing in the broadest sense.
SHARE CAPITAL AND SHARES.
ARTICLE 3
3.1 The authorized share capital of the company amounts to two hundred
thousand Dutch guilders (NLG 200,000). It is divided into two hundred
thousand (200,000) shares of one Dutch guilder (NLG 1) each.
3.2 The shares shall be in registered form and shall consecutively be
numbered from 1 onwards.
3.3 No share certificates shall be issued.
3.4 In respect of the subscription for or acquisition of shares in its
share capital or depository receipts for shares by other persons, the
company may neither grant security rights, give a guarantee with
respect to the price of the shares, grant guarantees in any other
manner, nor bind itself
either jointly or severally in addition to or for other persons.
The company may make loans in respect of a subscription for or an
acquisition of shares in its share capital or depository receipts for
shares up to an amount not exceeding the amount of its distributable
reserves. A resolution by the managing board to make a loan as referred
to in the preceding sentence shall be subject to the approval of the
general meeting of shareholders, hereinafter also to be referred to as:
the general meeting. The company may make the loans referred to above
only if it has offered to extend such a loan to each shareholder such
that if every shareholder accepts the offer, the loan amount lent to a
shareholder stands to the total amount lent on the occasion, as the
number of shares held by that shareholder stands to the total number of
shares then outstanding. The company shall maintain a non-distributable
reserve for an amount equal to the outstanding amount of the loans
referred to in this paragraph.
3.5 If the aggregate amount of the issued share capital and the reserves
required to be maintained by law is less than the minimum share capital
as then required by law, the company must maintain a reserve up to an
amount equal to the difference.
ISSUANCE OF SHARES.
ARTICLE 4.
4.1 Shares shall be issued pursuant to a resolution of the general meeting;
the general meeting shall determine the price and further terms and
conditions of the issuance. A resolution to issue
shares, as well as a resolution determining the price and further terms
and conditions of this issuance, requires the prior approval from the
meeting of shareholders.
4.2 The previous paragraph shall equally apply to a grant of rights to
subscribe for shares, but shall not apply to an issuance of shares to a
person who exercises a previously acquired right to subscribe for
shares.
4.3 Shares shall never be issued at a price below par.
4.4 Shares shall be issued by notarial deed, in accordance with the
provisions set out in section 2:196 of the Civil Code.
4.5 The company is not authorized to co-operate with the issuance of
depository receipts of its shares.
4.6 Holders of a usufruct on shares may not be granted the right to vote on
those shares.
A right of pledge may not be established on shares.
4.7 Only persons who have agreed to be bound by the terms of the April 4,
1997 Investment and Shareholders' Agreement relating to Irdeto B.V. can
be shareholders of the company.
PAYMENT FOR SHARES.
ARTICLE 5.
5.1 Shares shall only be issued against payment in full.
5.2 Payment must be made in cash, unless the general meeting of
shareholders has resolved otherwise.
PREEMPTIVE RIGHTS.
ARTICLE 6.
6.1 Upon the issuance of shares, each holder of shares shall have a
preemptive right in proportion to the
aggregate amount of its shares, subject to the provisions of paragraph
2. Should a shareholder who is entitled to a preemptive right not or
not fully exercise such right, the remaining holders of shares shall be
similarly entitled to preemptive rights in respect of those shares
which have not been claimed. If the latter collectively do not or do
not fully exercise their preemptive rights either, then the general
meeting shall be free to decide to whom the shares which have not been
claimed shall be issued, and such issuance may be made at a higher
price.
6.2 Preemptive rights may be limited or excluded by resolution of the
general meeting, each time for a single issuance of shares only.
6.3 Preemptive rights may not be separately disposed of.
6.4 If preemptive rights exist in respect of an issuance of shares, the
general meeting shall determine, with due observance of the provisions
set out in this article and simultaneously with the resolution to issue
shares, the manner in which and the period within which such preemptive
rights may be exercised. Such period shall be at least four weeks from
the date that the notification referred to in paragraph 5 hereof is
sent.
6.5 The company shall notify all shareholders, including those who do not
(yet) have a preemptive right with respect to this issuance, of an
issuance of shares in respect of which preemptive rights exist and of
the period of time within which such rights may be exercised.
6.6 The provisions of this article shall equally apply to a grant of rights
to subscribe for shares, but
shall not apply to an issuance of shares to a person who exercises a
previously acquired right to subscribe for shares.
REPURCHASE OF SHARES.
ARTICLE 7.
7.1 Subject to authorization by the general meeting, the managing board may
cause the company to acquire fully paid up shares in its own share
capital for consideration, provided:
a. the company's equity minus the acquisition price is not less
than the aggregate amount of the issued share capital and the
reserves which must be maintained pursuant to the law; and
b. the aggregate par value of the shares in its share capital to
be acquired and already held by the company and its subsidiary
companies does not exceed half of the issued share capital.
The validity of the acquisition shall be determined on the basis of the
company's equity as shown by the most recently adopted balance sheet,
minus the acquisition price for shares in the company's share capital
and any distribution of profits or reserves to other persons which have
become due by the company and its subsidiary companies after the
balance sheet date. No acquisition pursuant to this paragraph shall be
allowed if a period of six months following the end of a financial year
has expired without the annual accounts for such year having been
adopted.
7.2 Article 4 and 6 shall equally apply to the disposal of shares acquired
by the company in its
own share capital, with the exception that such disposal may be made at
a price below par. A resolution to dispose of such shares shall be
deemed to include the approval as referred to in Section 2:196,
subsection 3 of the Civil Code.
7.3 If depository receipts for shares in the company have been issued, such
depository receipts for shares shall be put on par with shares for the
purpose of the provisions of paragraph 1.
7.4 In the general meeting no votes may be cast in respect of a share held
by the company or a subsidiary company; no votes may be cast in respect
of a share, the depository receipt for which is held by the company or
a subsidiary company. When determining to what extent the shareholders
cast votes, are present or represented or to what extent the share
capital is provided or represented, shares, the holders of which are
not entitled to voting rights pursuant to the preceding provisions,
shall not be taken into account.
7.5 Shares which the company holds in its own share capital shall not be
counted when determining the division of the amount to be distributed
on shares.
REDUCTION OF SHARE CAPITAL.
ARTICLE 8.
8.1 The general meeting may, provided it does so unanimously and in a
meeting in which the entire issued share capital is represented,
resolve to reduce the issued share capital by cancelling shares or by
reducing the par value of shares by an amendment to the articles of
association, provided that the amount of the issued share capital does
not fall below the minimum share capital as
required by law in effect at the time of the resolution.
8.2 Cancellation of shares may apply to shares which are held by the
company itself or to shares for which the company holds depository
receipts. Partial repayment on shares shall be made on all shares.
8.3 Reduction of the par value of shares without repayment or partial
repayment on shares shall be effected pro rata to all shares. The pro
rata requirement may be waived by agreement of all shareholders
concerned.
8.4 The notice of a general meeting at which a resolution referred to in
this article is to be adopted shall include the purpose of the
reduction of the share capital and the manner in which such reduction
shall be effectuated. The resolution to reduce the share capital shall
specify the shares to which the resolution applies and shall describe
how such a resolution shall be implemented. The company shall file a
resolution to reduce the issued share capital with the trade register
of the Chamber of Commerce and Industry in the district in which the
company has its corporate seat and shall publish such filing in a
national daily newspaper.
SHAREHOLDERS REGISTER.
ARTICLE 9.
9.1 the managing board shall maintain a register in which the names and
addresses of all shareholders shall be recorded, stating the date on
which they acquired the shares, the number of shares held by each of
them, the date of acknowledgment or service, as well as the amount paid
up on each
share and any other information that must be recorded under the law.
9.2 The register shall be kept up to date.
9.3 Upon request, the managing board provides a shareholder and a holder of
a right of usufruct, free of cost, with an extract from the register
regarding their respective rights with respect to a share.
9.4 The managing board shall make the register available at the office of
the company for inspection by the shareholders.
ARTICLE 10.
Each person, information with respect to which must be registered in the
shareholders register pursuant to article 2:194, subsection 1 of the Civil Code,
must provide the information that the law requires to be registered, as well as
its fax number, to the managing board.
NOTICES OF MEETINGS AND NOTIFICATIONS.
ARTICLE 11.
11.1 Notices of meetings and notifications shall be given by registered
letter or by bailiff's writ, in both case with a simultaneous copy by
fax, provided that the omission to send a copy by fax shall not
invalidate the notice or notification given. Notices of meetings and
notifications to shareholders and holders of depository receipts shall
be sent to the addresses and fax numbers most recently given to the
managing board. Notifications by shareholders or by holders of
depository receipts to the managing board or to the person as referred
to in article 20, paragraph 4, shall be sent to the office of the
company.
11.2 The date that notice for a meeting or another type of notification has
been given, shall be deemed to be the date stamped on the receipt
issued for a registered letter, or the date of service of the writ, as
the case may be.
11.3 Notifications which, pursuant to the law or the articles of
association, are to be addressed to the general meeting may be included
in the notice of such meeting.
TRANSFER OF SHARES.
ARTICLE 12.
Any transfer of shares or of a right of usufruct on shares or the
creation or release of a right of usufruct shall be effected by
notarial deed in accordance with the provisions set out in section
2:196 of the Civil Code. Save in the event that the company is a party
to the transaction, the rights attached to a share may only be
exercised after:
a. the company has acknowledged the transaction;
b. the deed has been served upon the company; or
c. the company has acknowledged the transaction on its own
initiative by recording the same in the shareholders register.
all in accordance with the provisions set out in sections 2:196a and 2:196b of
the Civil Code.
TRANSFER RESTRICTIONS.
ARTICLE 13.
Shares may not be transferred freely in accordance with article 2:195 paragraph
1 of the Civil Code. Without prejudice to the provisions of article 19, any
transfer of shares in the company may only take place with due observance of
this article 13 through 19.
ARTICLE 14.
A shareholder who wishes to transfer one or more shares, hereinafter also to be
referred to as: the offeror, shall first offer such shares to the other
shareholders. The company itself may only be a prospective purchaser pursuant to
this article with the consent of the offeror.
ARTICLE 15.
In its notification to the other shareholders, the offeror shall state the
number of shares it wishes to transfer and other particulars relating to the
shares, the name and address of the person to whom it proposes to transfer the
shares and the price for which this person would like to purchase the shares.
The offeror shall attach written evidence of the offer made by this person to
its notification.
ARTICLE 16.
Within thirty days after notice has been given to the other shareholders, the
latter shall notify the offeror whether they wish to purchase the shares on
offer. The offeror and the prospective purchasers shall agree on a price for the
shares. Failing agreement to set a price for the shares within fourteen days,
they shall agree on the designation of an independent expert to determine the
value of the shares.
ARTICLE 17.
17.1 Should the offeror and the prospective purchasers fail to reach
agreement on the designation of an independent expert, such designation
shall be made by the President of the Chamber of Commerce and Industry,
within the district in which the company has its corporate seat at the
request of the party who is first to take action, provided that if none
of the parties has taken such action within fourteen days after the
above fourteen day period,
the entire right of first refusal procedure shall be deemed terminated
and the shareholder shall be prohibited from transferring its shares.
17.2 The managing board shall provide the designated independent expert -
hereinafter referred to as: the expert - with any information the
expert requests. The cost of determining the price of the shares on
offer shall be borne by the shareholder.
17.3 The expert shall notify the shareholder and the other shareholders as
soon as possible of the price of the shares on offer.
ARTICLE 18.
18.1 Until one month has lapsed after the independent expert has determined
the price of the shares, the shareholder shall remain entitled at any
time to withdraw its offer in its entirety by notification to the other
shareholders; in that case it shall not be entitled to transfer the
shares on offer.
18.2 If there are no prospective purchasers within one month after the
experts have notified the shareholders and the prospective purchasers
pursuant to article 17.2 above the shareholder may transfer the
offered shares, but only those shares and only to the person mentioned
by it in its initial notification and only for the price offered by
this person, during the three months following the initial thirty day
period referred to in article 16.
18.3 If there are prospective purchasers for all offered shares and the
shareholder has not withdrawn its offer, a purchase agreements shall be
deemed to have been entered into in respect of the shares concerned
between each prospective purchaser and the shareholder, and the
shareholder shall be required to transfer the shares and the
prospective purchasers shall be required to simultaneously pay
the price of the shares to the shareholder in cash, all as soon as
reasonably possible.
18.4 If the shareholder, the prospective purchaser being ready and willing
to pay the price of the shares, fails to transfer shares to a
prospective purchaser, the company shall have irrevocable authority to
effect the transfer. The company shall effect this transfer within ten
days after the prospective purchaser has made a request to the company
to that effect.
ARTICLE 19.
Article 13 up to and including 18 do not apply:
a. if a shareholder is required to transfer its shares to a
former shareholder by operation of law; or
b. for a period of three months after all shareholders, other
than the shareholder who wishes to transfer shares, have
declared by private instrument or notarial deed that the
procedure prescribed by these articles does not need to be
followed.
MANAGEMENT.
ARTICLE 20.
20.1 The company shall be managed by a managing board, which is made up of
four persons. A legal entity may be appointed as a managing director.
One of the managing directors for whose appointment Canal+ S.A. made a
nomination shall be given the title of chairman.
20.2 Managing directors shall be appointed by the general meeting. For as
long as:
a. their subsidiaries, which term for the purposes of these
articles of association is defined as any entity which
controls or
is controlled by or under common control with another entity
(control meaning the holding of more than eight (80) percent
of the capital and voting rights hold shares in the company;
OR
B. SUBSIDIARIES OF NETHOLD B.V. OR M.I.H. LIMITED HOLD SHARES IN
THE COMPANY, BUT ONLY OF CANAL+ S.A., RESPECTIVELY, M.I.H.
HOLDINGS LIMITED, OWN DIRECTLY OR INDIRECTLY A MAJORITY OF THE
ISSUED SHARES OF NETHOLD B.V. RESPECTIVELY M.I.H. LIMIITED, OR
POSSESS, DIRECTLY OR INDIRECTLY, THE POWER TO DIRECT OR CAUSE
THE DIRECTION OF THE MANAGEMENT AND POLICIES OF NETHOLD B.V.
RESPECTIVELY M.I.H. LIMITED, WHETHER THROUGH THE OWNERSHIP OF
VOTING SECURITIES, BY AGREEMENT OR OTHERWISE.
Canal+ S.A. and M.I.H. Holdings Limited shall be entitled to nominate
persons for the position of managing director (such managing director
where applicable to be given the title: Canal+ managing director,
respectively: M.I.H. managing director) as follows:
a. a nomination may be made for one position as long as the
relevant subsidiaries hold up to and including twenty-five
(25) percent of the issued share capital of the company in the
aggregate;
b. a nomination may be made for two positions as long as the
relevant subsidiaries hold more than twenty five (25) percent
but less than seventy five (75) percent of the
issued share capital of the company in the aggregate; and
c. a nomination may be made for three positions as long as the
relevant subsidiaries hold seventy-five (75) percent or more
of the issued share capital of the company in the aggregate;
provided that at each occasion, Canal+ S.A. and/or M.I.H. Holdings
Limited have the right of nomination for the number of positions as
indicated above, minus the number of positions on the board that are at
that moment already occupied by managing directors for which they were
entitled to make a nomination. The management board shall invite Canal+
S.A., respectively M.I.H. Holdings Limited to prepare a nomination
within sixty (60) days, such that for each appointment a choice can be
made between at least two persons. The general meeting can,
nevertheless, remove the binding character of the nomination with a
resolution adopted by a two thirds majority of votes cast, in a meeting
in which more than half the issued capital is represented.
Has a nomination not been made, or not within the prescribed time
period, then this will be mentioned in the notification for the
general meeting in which the new managing directors are to be
appointed.
Has a nomination not been made, or not within the prescribed time
period, then the general meeting will be free to appoint the person of
its choice.
20.3 The general meeting may at any time suspend and dismiss managing
directors by a vote of shareholders representing at least 90% of the
outstanding share capital of the company. The general meeting shall
within three months after the suspension has
taken effect resolve either to dismiss such managing director, or to
terminate or continue the suspension, failing which the suspension
shall lapse.
20.4 A managing director who has been suspended shall be given the
opportunity to account for his actions at the general meeting and to be
assisted by an adviser.
20.5 In the event that one or more managing directors is prevented from
acting, the remaining managing directors or the only remaining managing
director shall temporarily be in charge of the management. In the event
that all managing directors are prevented from acting, the person
designated or to be designated for that purpose by the general meeting
shall temporarily be in charge of the management.
ARTICLE 21.
The general meeting shall determine the terms and conditions of employment of
the managing directors, provided the terms and conditions shall at all times
be equal for all managing directors.
ARTICLE 22.
22.1 With due observance of these articles of association and any
instructions laid down in writing by the general meeting, the managing
board may adopt rules governing its internal proceedings. Furthermore,
the managing directors may divide their duties among themselves,
whether or not by rule.
22.2 The managing board shall hold its meetings in Hoofddorp or any other
place as the managing board shall determine.
The managing board shall meet whenever a managing director so
requires, provided it meets at least once every 3 (three) calendar
months. The managing board can validly adopt resolutions only if AT
LEAST TWO MANAGING DIRECTORS THAT HOLD OFFICE ARE PRESENT, IN PERSON,
BY TELEPHONE, BY VIDEO CONFERENCE OR OTHER MEANS, OR REPRESENTED BY
ANOTHER MANAGING DIRECTOR. IN THE CASE OF RESOLUTIONS THAT REGARD
FUNDAMENTAL BUSINESS DECISIONS, ONE MANAGING DIRECTOR FOR WHOSE
APPOINTMENT CANAL+ S.A. MADE A NOMINATION, IF ANY, AND ONE MANAGING
DIRECTOR FOR WHOSE APPOINTMENT M.I.H. HOLDINGS LIMITED MADE A
NOMINATION, IF ANY, MUST ALSO BE SO PRESENT OR SO REPRESENTED. SHOULD
THE QUORUM REFERRED TO IN THE TWO IMMEDIATELY PRECEDING SENTENCES NOT
BE PRESENT WITHIN THIRTY (30) MINUTES AFTER THE TIME APPOINTED FOR THE
COMMENCEMENT OF A MEETING, THAT MEETING SHALL BE ADJOURNED TO THE DAY
AFTER THE FOLLOWING DAY, AT THE SAME TIME AND PLACE. WHERE A MEETING
HAS BEEN SO ADJOURNED, THE CHAIRMAN OF THE MANAGEMENT BOARD SHALL USE
HIS BEST EFFORTS TO INFORM, IN THE MOST REASONABLY EXPEDITIOUS MANNER,
EACH OF THE MANAGING DIRECTORS WHO WERE NOT PRESENT AT THE MEETING
THAT WAS ADJOURNED OF THE TIME, DATE AND PLACE TO WHICH THE MEETING
HAS BEEN ADJOURNED. IF AT ANY ADJOURNED MEETING, A QUORUM IS NOT
PRESENT WITHIN THIRTY (30) MINUTES AFTER THE TIME APPOINTED FOR THE
COMMENCEMENT OF SUCH MEETING, THEN THE MANAGING DIRECTORS PRESENT, IN
PERSON, BY TELEPHONE, BY VIDEO CONFERENCE OR OTHER MEANS, OR
REPRESENTED BY ANOTHER MANAGING DIRECTOR, SHALL
CONSTITUTE A QUORUM. The managing board shall adopt its resolutions
by majority of votes cast. In a tie vote, the chairman of the managing
board shall have the casting vote.
22.3 The managing board may also adopt resolutions without holding a
meeting, provided such resolutions are adopted in writing, by cable, by
telex, or by telefax and all managing directors have expressed
themselves in favor of the proposal concerned.
22.4 Resolutions of the managing board regarding the following issues shall
in addition to an affirmative majority vote, also require the approval
of the managing directors for whose appointment Canal+ S.A. or M.I.H.
Holdings Limited made a nomination, provided that such additional
approval shall no longer be required if their direct and indirect
subsidiaries no longer hold in the aggregate:
A. at least FORTY-FIVE (45) percent of the issued share capital
of the company; OR
B. BETWEEN FORTY-FIVE (45) PERCENT AND FORTY-NINE (49) PERCENT OF
THE ISSUED SHARE CAPITAL OF THE COMPANY, AND THEIR AGGREGATE
INTEREST IN THE COMPANY IS NOT INCREASED TO AT LEAST
FORTY-NINE (49) PERCENT OF THE ISSUED SHARE CAPITAL OF THE
COMPANY BEFORE THE BEGINNING OF NEXT FISCAL YEAR:
a. adoption of annual budgets, or approval of any ten (10)
percent variance per annum in the aggregate (based on
operating costs);
b. approval of FIRST three-year business plan and material
amendments thereto;
c. approval of the entering into or termination of any
partnership, joint venture or consortium with any other legal
entity, the creation of any subsidiary, or the acquisition or
sale of any equity interest in any other entity;
d. approval of stock issuances, stock splits, creation of new
classes of securities, grants or agreements to grant options
over stock or rights to subscribe for stock, reorganization
and any other change in the capital structure of the company;
e. appointment of exclusive marketing agents for the company's
technology;
f. authorisation of the lending or borrowing of funds or the
making of guarantees of amounts in excess of an aggregate of
US$ five (5) million per annum in any year;
g. approval of any development project not provided For in the
annual budget in excess of US$ five (5) million individually
and in excess of US$ five (5) million per annum in the
aggregate;
h. authorization of the release of the company's proprietary
source code to any person (including shareholders, except for
the purpose of SECA/Irdeto integration);
i. approval of any material change in the nature of the company's
business, as described in article 2, sub-paragraphs a. and b.;
j. the entering into any agreements to settle litigation
involving amounts in excess of US$ ten (10) million;
k. change or adoption of any material accounting principle or
practice to be applied; and
l. approval of the filing for bankruptcy, or any decision not to
take action to prevent a filing for bankruptcy, or to protest
an involuntary filing for bankruptcy, or other procedure for
winding up the company, except as otherwise required by
applicable law.
REPRESENTATION.
ARTICLE 23.
23.1 Three managing directors acting jointly shall have power to represent
the company.
23.2 If a managing director, acting in his personal capacity, enters into an
agreement with the company, or if he or she, acting in his or her
personal capacity, conducts any litigation against the company, the
company may be represented in that matter jointly by the other managing
directors, unless the general meeting designates a person for that
purpose or unless the law provides otherwise for such designation.
AUTHORIZED SIGNATORIES.
ARTICLE 24.
The managing board may grant to one or more persons, whether or not employed by
the company, the power to represent the company (PROCURATIE) or grant in a
different manner the power to represent the company on a continuing basis. The
managing board may also grant such titles as it may determine to persons, as
referred to in the preceding sentence, as well as to other persons, but only if
such persons are employed by the company.
The managing board shall in any event grant the power to represent the company
on a continuing basis to two persons employed by the company, one of whom shall
be the person in charge of day-to-day management of the company and who shall
carry the title Chief Executive Officer, and another who shall be the person in
charge of the day-to-day financial management of the company and who shall carry
the title Chief Financial Officer. FOR THESE LATTER TWO APPOINTMENTS, THE
MANAGEMENT BOARD MUST REQUEST CANAL+ S.A. TO MAKE A NOMINATION. THIS NOMINATION
SHALL BE BINDING ON THE MANAGING BOARD, UNLESS IT IS OF THE OPINION THAT THE
PERSON NOMINATED IS UNFIT FOR THE POSITION. IN THIS CASE, THE MANAGING BOARD
SHALL NOTIFY CANAL+ S.A. EXPLAINING THE GROUNDS FOR ITS OPINION, AND REQUEST
CANAL+ S.A. TO NOMINATE ANOTHER PERSON.
GENERAL MEETINGS.
ARTICLE 25.
25.1 The annual general meeting shall be held within six months after the
end of the financial year.
25.2 The agenda for this meeting shall in any event include the following
terms:
a. the consideration of the written annual report by the managing
board concerning the company's affairs and the management as
conducted;
b. the adoption of the annual accounts and the allocation of
profits.
The items referred to above need not be included on the agenda if the
period for preparing the annual accounts and for presenting the annual
report has been extended, or if the agenda includes a proposal to such
effect, the item referred to in a. need not
be included on this agenda either if section 2:403 of the Civil Code
applies to the company. Furthermore, all items which are put on the
agenda with due observance of article 26, paragraph 3 shall be
discussed at the annual general meeting.
25.3 A general meeting shall be convened whenever the managing board or two
managing directors consider appropriate.
In addition a general meeting shall be convened as soon as possible if
one nor more persons, entitled to cast at least one-tenth of the total
number of votes that may be cast, so request the managing board,
stating the items to be discussed.
ARTICLE 26
26.1 General meetings shall be held in the municipality where the company
has its corporate seat, Amsterdam or I Haarlemmermeer (Schiphol).
Resolutions adopted at a general meeting held elsewhere shall be valid
only if the entire issued share capital is represented.
26.2 Shareholders shall be given notice of the general meeting by the
managing board or any managing director.
If in the event as referred to in the second sentence of article 25,
paragraph 3, a managing director does not convene the meeting such that
the meeting is held within four weeks of receipt of the request, any of
the persons requesting the meeting shall be authorized to convene the
same with due observance of that provided in these articles of
association.
The notice shall specify the items to be discussed.
26.3 Notice shall be given not later than on the fifteenth day prior to the
date of the meeting.
If the notice period was shorter or if no notice was sent, no valid
resolutions may be adopted unless the resolution is adopted by
unanimous vote at a meeting at which the entire issued share capital is
represented.
The provision of the preceding sentence shall equally apply to matters
which have not be mentioned in the notice of meeting or in a
supplementary notice sent with due observance of the notice period.
ARTICLE 27
27.1 The general meeting shall appoint its chairman. The chairman shall
designate the secretary.
27.2 Minutes shall be kept of the business transacted at the meeting unless
a notarial record is prepared thereof. Minutes shall be adopted and in
evidence of such adoption be signed by the chairman and the secretary
of the meeting concerned, or alternatively be adopted by a subsequent
meeting; in the latter case the minutes shall be signed by the chairman
and the secretary of such subsequent meeting in evidence of their
adoption.
27.3 The chairman of the meeting and furthermore each managing director may
at any time give instructions that a notarial record be prepared at the
expense of the company.
ARTICLE 28
28.1 Each share confers the right to cast one vote at the general meeting.
Blank votes and invalid votes shall be regarded as not having been
cast.
28.2 WITHOUT PREJUDICE TO WHAT HAS BEEN PROVIDED IN ARTICLE 30, resolutions
shall be adopted by an absolute majority of votes cast.
28.3 The chairman shall determine the manner of voting provided, however,
that if any person present who is entitled to vote so requires, voting
in respect of the appointment, suspension and dismissal of persons
shall take place by means of sealed, unsigned ballots.
28.4 In a tie vote concerning the appointment of persons, no resolution
shall have been adopted. In a tie vote concerning other matters, the
proposal shall have been rejected, without prejudice to the provisions
of article 31, paragraph 1.
28.5 Shareholders may be represented at a meeting by a proxy authorized in
writing.
28.6 Managing directors are authorized to attend general meetings and as
such they have an advisory opinion at the general meeting.
ARTICLE 29
29.1 Shareholders who are entitled to vote may adopt any resolutions which
they could adopt at a meeting, without holding a meeting, provided that
the managing board has prior knowledge of such resolution.
Such a resolution shall only be valid if all persons entitled to vote
have cast their votes in writing, by cable, by telex or by telefax in
favor of the proposal concerned.
Those who have adopted a resolution without holding a meeting shall
forthwith notify the managing board of the resolution so adopted.
29.2 A resolution as referred to in paragraph 1 shall be recorded in the
minute book of the general meeting by a managing director; at the next
general meeting the entry shall be read out loud by the chairman of
that meeting. Moreover, the documents in evidence of the adoption of
such a resolution shall be kept with the minute book of the general
meeting and as soon as the resolution has been adopted, all persons
who have adopted such resolution shall be notified thereof.
ARTICLE 30
The resolutions by the general meeting regarding the following issues
shall, in addition to an affirmative majority vote, also require the
approval of Canal+ S.A. and M.I.H. Holdings Limited, provided that this
additional approval shall no longer be required from the aforementioned
person whose subsidiaries no longer hold in the aggregate:
A. at least FORTY-FIVE (45) percent of the issued share capital
of the company; OR
B. BETWEEN FORTY-FIVE (45) PERCENT AND FORTY-NINE (49) PERCENT OF
THE ISSUED SHARE CAPITAL OF THE COMPANY, AND THEIR AGGREGATE
INTEREST IN THE COMPANY IS NOT INCREASED TO AT LEAST
FORTY-NINE (49) PERCENT OF THE ISSUED SHARE CAPITAL OF THE
COMPANY BEFORE THE BEGINNING OF NEXT FISCAL YEAR:
a. approval of stock insurances, stock splits, creation of new
classes of securities, grants or agreements to grant options
over stock or rights to subscribe for stock, reorganization
and other changes in the capital structure of the company
(including actions taken in accordance with Article 6.2);
b. approval of the merger of the company with any other company
(JURIDISCHE FUSIE);
c. amendment of these articles of association;
d. liquidation or dissolution of the company; and
e. the giving of an assignment to the auditor as referred to in
article 31.
FINANCIAL YEAR. ANNUAL ACCOUNTS.
ARTICLE 31
31.1 The financial year shall run from ^APRIL 1 TO MARCH 31.
31.2 Annually, within five months after the end of each financial year -
subject to an extension of such period not exceeding six months by the
general meeting on the basis of special circumstances - the managing
board shall prepare annual accounts and shall make these available at
the office of the company for inspection by the shareholders. The
annual accounts shall be accompanied by the auditor's certificate,
referred to in article 31, if the assignment referred to in that
article has been given, by the annual report, unless section 2:403 of
the Civil Code is applicable to the company, and by the additional
information referred to in section 2:392, subsection 1 of the Civil
Code, insofar as the provisions of that subsection apply to the
company.
The annual accounts shall be signed by all managing directors: if the
signature of one or more of them is lacking, this shall be disclosed,
stating the reasons thereof.
31.3 The company shall ensure that the annual accounts as prepared, the
annual report and the additional information referred to in paragraph 2
shall be
available at the office of the company as of the date of the notice of
the general meeting at which they are to be discussed.
The shareholders may inspect the above documents at the office of the
company and obtain a copy thereof at no cost.
31.4 Adoption of the annual accounts by the general meeting shall
constitute a discharge of the managing board for its management during
the financial year concerned, unless a proviso is made by the general
meeting and without prejudice to the provisions of section 2:248 of the
Civil Code. If the company is required, in conformity with article 32,
paragraph 1, to give an assignment to an auditor to audit the annual
accounts and the general meeting has been unable to review the
auditor's certificate, the annual accounts may not be adopted, unless
the additional information referred to in paragraph 2, second sentence,
mentions a legal ground why such certificate is lacking.
31.5 If the annual accounts are adopted in an amended form, a copy of the
amended annual accounts shall be made available to the shareholders at
no cost.
AUDITOR
ARTICLE 32.
32.1 The company may give an assignment to an auditor, as referred to in
section 2:393 of the Civil Code, to audit the annual accounts prepared
by the managing board in accordance with subsection 3 of such section
provided that the company shall give such assignment if the law so
requires.
If the law does not require that the assignment mentioned in the
preceding sentence be given the company may also give the assignment to
audit the annual accounts prepared by the managing board to another
expert; such expert shall hereinafter also be referred to as: auditor.
The general meeting shall be authorized to give the assignment,
referred to above. If the general meeting fails to do so, then the
managing board shall be so authorized.
The assignment given to the auditor may be revoked at any time by the
general meeting and by the managing board if it has given such
assignment. The auditor shall report on his audit to the managing board
and shall issue a certificate containing its results.
32.2 The managing board may give assignments to the auditor or any other
auditor at the expense of the company.
PROFIT AND LOSS.
ARTICLE 33.
33.1 Distribution of profits pursuant to this article shall be made
following the adoption of the annual accounts which show that such
distribution is allowed.
33.2 The profits shall be at the free disposal of the general meeting. In a
tie vote regarding a proposal to distribute or reserve profits, the
profits concerned shall be reserved.
33.3 The company may only make distributions to shareholders to the extent
that its equity exceeds the total amount of its issued share capital
and the reserves to be maintained pursuant to the law.
33.4 A loss may only be applied against reserves maintained pursuant to the
law to the extent permitted by law.
ARTICLE 34
34.1 Dividends shall be due and payable four weeks after they have been
declared, unless the general meeting determines another date on the
proposal of the managing board.
34.2 Dividends which have not been collected within five years of the start
of the second day on which they become due and payable shall revert to
the company.
34.3 The general meeting may resolve that dividends shall be distributed in
whole or in part in a form other than cash.
34.4 Without prejudice to article 32, paragraph 3, the general meeting may
resolve to distribute all or any part of the reserves.
34.5 Without prejudice to article 32, paragraph 3, an interim dividend shall
be distributed out of the profits made in the current financial year,
if the general meeting so determines on the proposal of the managing
board.
LIQUIDATION
ARTICLE 35
35.1 If the company is dissolved pursuant to a resolution of the general
meeting, it shall be liquidated by the managing board, if and to the
extent that the general meeting shall not resolve otherwise.
35.2 The general meeting shall determine the remuneration of the
liquidators.
35.3 The liquidation shall take place with due observance of the provisions
of the law. During the
liquidation period these articles of association shall, whenever
possible, remain in full force.
35.4 The balance of the assets of the company remaining after all
liabilities have been paid shall be distributed among the shareholders
in proportion to the par value of their ownership shares.
35.5 After the legal entity has ceased to exist, the books and records of
the company shall remain in the custody of the person designated for
that purpose by the liquidators for a period of ten years.
Finally, the person appearing declares that the issued capital of the company
amounts to forty-thousand Dutch guilders (NLG 40,000).
The required ministerial declaration of no-objection was granted on
(__________), nineteen hundred and ninety-seven, number B.V. (__________).
The draft of this deed, on which the ministerial declaration of no-objection was
endorsed and a document in evidence of the resolutions referred to in the head
of this deed, are attached to this deed.
In witness whereof the original of the deed, which shall be retained by me, is
executed in Rotterdam on the date first mentioned in the head of this deed.
Having explained the substance of this deed to the person appearing, (he/she)
declares to have noted the contents of the deed and does not require it to be
read out to (him/her) in full.
Immediately after reading those parts which the law required to be read out,
this deed is signed by the person appearing, who is known to me, notaris, and by
myself notaris.
