Exhibit 10.1
Execution Copy
SHARE PURCHASE AGREEMENT
BY AND AMONG
FIRST NATIONAL HOLDING S.A.,
EMERGENT TELECOM VENTURES S.A.,
PISCES INVESTMENT LIMITED
AND
METROMEDIA INTERNATIONAL GROUP, INC.
Dated as of February 17, 2005
TABLE OF CONTENTS
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ARTICLE I DEFINITIONS..........................................................1
Section 1.1 Defined Terms..................................................1
ARTICLE II PURCHASE AND SALE OF SHARES; PURCHASE PRICE.........................7
Section 2.1 Sale and Purchase of Shares....................................7
Section 2.2 Closing; Closing Date..........................................7
Section 2.3 Deliveries At Closing..........................................8
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE SELLER.......................8
Section 3.1 Organization; Standing and Power; Charter Documents............8
Section 3.2 Authority; Non-Contravention; Necessary Consents and
Filings........................................................9
Section 3.3 Title to the Shares...........................................10
Section 3.4 Capitalization................................................10
Section 3.5 Absence of Certain Changes or Events..........................11
Section 3.6 Taxes.........................................................11
Section 3.7 Intellectual Property.........................................12
Section 3.8 Compliance; Permits...........................................13
Section 3.9 Litigation....................................................14
Section 3.10 Real Estate...................................................14
Section 3.11 Material Contracts............................................15
Section 3.12 Environmental Matters.........................................16
Section 3.13 Employee Agreements...........................................16
Section 3.14 No Operations.................................................16
Section 3.15 Stockholder Vote Required.....................................17
Section 3.16 Opinion of Financial Advisors.................................17
Section 3.17 Proxy Statement...............................................17
Section 3.18 Brokers' and Finders' Fees....................................17
Section 3.19 Transactions between the Company and Seller...................18
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE BUYERS.......................18
Section 4.1 Organization; Standing and Power..............................18
Section 4.2 Authority; Non-Contravention; Necessary Consents and
Filings.......................................................19
Section 4.3 Financial Ability.............................................19
Section 4.4 Proxy Statement...............................................19
Section 4.5 Purchase for Investment.......................................20
Section 4.6 Brokers' and Finders' Fees....................................20
ARTICLE V COVENANTS AND AGREEMENTS............................................20
Section 5.1 Conduct of Business of the Company............................20
Section 5.2 Proxy Statement...............................................24
Section 5.3 Access to Information; Confidentiality........................24
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Section 5.4 No Solicitation...............................................26
Section 5.5 Reasonable Efforts; Additional Actions; Cooperation...........28
Section 5.6 Notification of Certain Matters...............................29
Section 5.7 Public Announcements..........................................30
Section 5.8 Stockholder Approval..........................................30
Section 5.9 Employee Matters..............................................30
Section 5.10 Non-Solicitation..............................................30
Section 5.11 Tax Matters...................................................30
Section 5.12 Operating Expenditures........................................31
Section 5.13 Payoff of Senior Notes........................................31
Section 5.14 Preservation of Records.......................................31
Section 5.15 Elimination of Inter-Company Accounts.........................32
Section 5.16 Indemnity With Respect to Brokers Fees........................32
ARTICLE VI CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE
PARTIES TO CLOSE...................................................33
Section 6.1 Conditions Precedent to the Obligations of the Parties to
Close.........................................................33
Section 6.2 Additional Conditions Precedent to the Obligations of the
Buyers to Close...............................................33
Section 6.3 Additional Conditions Precedent to the Obligations of the
Seller to Close...............................................33
Section 6.4 Frustration of Closing Condition..............................34
ARTICLE VII TERMINATION OF AGREEMENT..........................................34
Section 7.1 Termination...................................................34
Section 7.2 Notice of Termination; Effect of Termination..................36
Section 7.3 Fees and Expenses.............................................37
Section 7.4 Amendment.....................................................37
Section 7.5 Extension; Waiver.............................................38
ARTICLE VIII MISCELLANEOUS....................................................38
Section 8.1 Non-Survival of Representations and Warranties................38
Section 8.2 Notices.......................................................38
Section 8.3 Interpretation................................................39
Section 8.4 Entire Agreement; Third-Party Beneficiaries...................40
Section 8.5 Severability..................................................40
Section 8.6 Other Remedies; Specific Performance..........................40
Section 8.7 Governing Law; Jurisdiction...................................41
Section 8.8 Rules of Construction.........................................42
Section 8.9 The Buyer Disclosure Letter and Seller Disclosure Letter......42
Section 8.10 Limitations on Warranties.....................................42
Section 8.11 Assignment....................................................42
Section 8.12 Waiver of Jury Trial..........................................43
Section 8.13 Counterparts..................................................43
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EXHIBITS
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Exhibit 2.3 Wire Instructions
Exhibit A PeterStar Budget
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SHARE PURCHASE AGREEMENT
This SHARE PURCHASE AGREEMENT (this "Agreement") is made and entered into
as of February 17, 2005, by and among First National Holding S.A., a societe
anonyme organized under the laws of Luxembourg ("FNH"), Emergent Telecom
Ventures S.A., a societe anonyme organized under the laws of Switzerland
("ETV"), Pisces Investment Limited, a company organized under the Companies Law
of Cyprus and wholly-owned subsidiary of FNH and ETV ("Pisces", and together
with FNH and ETV, the "Buyers"), and Metromedia International Group, Inc., a
Delaware corporation (the "Seller") and the direct parent of NWE Capital
(Cyprus), Ltd., a company organized under the Companies Law of Cyprus (the
"Company"), for the purchase and sale of all of the authorized, issued and
outstanding share capital of the Company.
RECITALS
(a) The Seller is the sole record and beneficial owner of all of the
authorized, issued and outstanding share capital of the Company (the "Shares").
(b) The Seller wishes to sell to the Buyers, and the Buyers jointly and
severally wish to purchase from the Seller, all of the Shares upon the terms and
subject to the conditions set forth in this Agreement (the "Share Purchase").
(c) The parties to this Agreement desire to make certain representations,
warranties, covenants and agreements in connection with the Share Purchase and
also to prescribe certain conditions to the Share Purchase.
(d)The holders of approximately 18% of the outstanding shares of common
stock of the Seller have entered into a voting agreement (including an
irrevocable proxy), dated the date hereof, with the Seller and the Buyers (the
"Common Voting Agreement"), pursuant to which such holders have agreed, among
other things, to vote the shares of common stock held or controlled by such
holders in favor of the Share Purchase.
Accordingly, in consideration of the mutual representations, warranties,
covenants and agreements contained in this Agreement, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties to this Agreement agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Defined Terms.
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(a) For all purposes of this Agreement, the terms set forth below shall
have the respective meanings set forth in this Section 1.1 (such definitions to
be equally applicable to both the singular and plural forms of the terms herein
defined).
"Acquisition Proposal" means any contract, proposal, offer or indication of
interest (other than by the Buyers or any of their respective Affiliates)
(whether or not in writing and whether or not delivered to the stockholders of
the Seller generally) relating to (i) the acquisition (including any lease,
long-term supply agreement, mortgage, pledge or other arrangement having similar
economic effect) in any manner, directly or indirectly, in a single transaction
or a series of transactions, of any business or assets of the Company or its
Subsidiaries (including the share capital of the Company or the capital stock of
PeterStar or its Subsidiaries or held, directly or indirectly, by the Seller or
any Subsidiary of the Seller), (ii) a direct or indirect purchase of any shares
of capital stock of (or ownership interest in) the Seller (the "Seller
Securities") by way of a tender offer, exchange offer or issuance of Seller
Securities by the Seller in connection with any such acquisition, whether in a
single transaction or series of related transactions, representing 15% or more
of the voting power of the capital stock of (or other ownership interest in) the
Seller or any new class or series of stock that would be entitled to a class or
series vote with respect to the Share Purchase or (iii) a merger, business
combination, reorganization, recapitalization, liquidation or dissolution of the
Seller, the Company or its Subsidiaries, in each case other than the
transactions contemplated by this Agreement; provided, however, that for the
avoidance of doubt, it is understood and agreed that the term "Acquisition
Proposal" shall not include any contract, proposal, offer or indication of
interest (whether or not in writing) relating to the Seller's direct or indirect
interest in Magticom, Telecom Georgia, Ayety TV, Juventus Radio 100.2 Kft
(Szeged), Dotcomm Communications (Estonia) or Xxxx Page (Kazakhstan).
"Affiliate" means, with respect to any Person, any other Person that
directly or indirectly controls, is controlled by or is under common control
with, such first Person. For the purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as applied to any Person, means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of that Person, whether through the
ownership of voting securities, by contract or otherwise. For all purposes of
this Agreement, Emergent Telecom Ventures S.A. and First National Holding S.A.
shall be deemed to be Affiliates of Pisces.
"Business Day" means any day other than a Saturday, Sunday or U.S. federal
holiday, and shall consist of the time period from 12:01 a.m. through 12:00
midnight Eastern time.
"Code" means the Internal Revenue Code of 1986, as amended (including any
successor code), and the rules and regulations promulgated thereunder.
"Company Permit" means permits, licenses, authorizations, franchises,
variances, exemptions, certifications, registrations, orders and approvals from
Governmental Entities (including Russian Governmental Entities that regulate the
telecommunications industry) ("Permits") that are required for the operation of
the business of the Company and PeterStar as presently conducted or for the
ownership, lease and operation of the assets of the Company and PeterStar as
presently owned, leased and operated, except in each case where the failure to
hold such Permits would not reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect on the Company.
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"Confidential Information" means and includes any and all information, data
and analyses furnished by the Seller, its affiliates or Representatives to any
of the Buyers or their respective Representatives, and any analyses,
compilations, studies, documents or other material prepared by any of the Buyers
or their respective Representatives containing or based in whole or in part upon
such information, data or analysis. The term "Confidential Information" includes
not only written information but also information transferred orally, verbally,
electronically or by any other means. The term "Confidential Information" shall
not include that part of the Confidential Information that a Buyer demonstrates
(i) was or becomes generally available to the public prior to, and other than as
a result of, a disclosure by such Buyer or its Representatives or (ii) was
available, or becomes available, to such Buyer on a nonconfidential basis prior
to its disclosure to such Buyer by the Seller or its Representative, but only if
the source of such information is not bound by a confidentiality agreement with
the Seller or is not otherwise prohibited from transmitting the information to
such Buyer or its Representatives by a contractual, legal, fiduciary or other
obligation.
"Contract" means any contract, agreement, lease, binding understanding,
indenture, note, option, license or legally binding commitment or undertaking.
"Domain Name" means a combined alphanumeric second-level domain and
alphanumeric top-level domain separated by a period, used to identify and locate
a computer site on the Internet, and applications and reservations therefor.
"Employee" means any individual employed by the Company or any of its
Subsidiaries.
"Environmental Law" shall mean any Legal Requirements regulating or
relating to the protection of natural resources or the environment, including,
without limitation, laws relating to contamination by and the use, generation,
management, handling, transport, treatment, disposal, storage, release or
threatened release of Hazardous Substances.
"Governmental Entity" means any international, national, federal, state,
provincial, municipal or local governmental, regulatory or administrative
authority, agency, commission, court, tribunal, arbitral body or self-regulatory
entity, whether domestic or foreign.
"Hazardous Substance" shall mean any substance that: (i) is or contains
asbestos, urea formaldehyde insulation, polychlorinated biphenyls, petroleum or
petroleum products, radon gas, microbiological contamination or related
materials, (ii) requires investigation or remedial action pursuant to any
Environmental Law, or is defined, listed or identified as a "hazardous waste,"
"hazardous substance," "toxic substance" or words of similar import thereunder,
or (iii) is regulated under any Environmental Law.
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"Intellectual Property" means all patents, patent applications, copyrights,
copyright applications, Marks, trade secrets, know-how, software and Domain
Names owned or filed by the Company or its Subsidiaries as of the date of this
Agreement.
"IT Assets" means computers, computer software, firmware, middleware,
servers, workstations, routers, hubs, switches, data communications lines, and
all other information technology equipment and elements, and associated
documentation.
"Knowledge of the Seller" means with respect to any matter in question,
that any of the Chief Executive Officer, the Chief Financial Officer or the
General Counsel of the Seller or the Chief Executive Officer (or equivalent) of
PeterStar has actual knowledge of such matter.
"Legal Requirements" means any national, federal, state, provincial, local,
foreign or other law, statute, constitution, principle of common law, ordinance,
code, order, edict, decree, rule, regulation, ruling, judgment or requirement
issued, enacted, adopted, promulgated, implemented or otherwise put into effect
by or under the authority of any Governmental Entity.
"Liens" means any liens, pledges, claims, charges, preemptive rights,
mortgages, options, security interests or encumbrances of any kind.
"Magticom" means Magticom Ltd., a company organized under the laws of the
Republic of Georgia.
"Marks" means trademarks, service marks, trade names, brand names, assumed
names, trade dress, designs, logos, corporate names and other indicia of origin,
whether registered or unregistered, and all registrations and applications
therefor and the goodwill associated exclusively therewith.
"Material Adverse Effect on the Company" means any change, event,
condition, circumstance, occurrence or effect (any such item, an "Effect") that,
either individually or in the aggregate with all other Effects, is materially
adverse to (x) the business, properties, assets, liabilities, condition
(financial or otherwise) or results of operations of the Company taken as a
whole with its Subsidiaries or (y) the validity or enforceability of this
Agreement or the ability of the Seller to perform its obligations hereunder or
to consummate the transactions contemplated by this Agreement in the manner
contemplated hereby; provided, however, that in no event shall any of the
following be deemed to constitute, nor shall any of the following be taken into
account in determining whether there has been or would reasonably expected to
be, a Material Adverse Effect on the Company: (i) any Effect resulting from
compliance with the terms and conditions of this Agreement; (ii) any Effect
resulting from the announcement or pendency of the Share Purchase; (iii) any
Effect resulting from changes affecting the worldwide economy or the economy or
the capital markets in the United States, Russia, or the Commonwealth of
Independent States generally, or any of the industries in which the Company or
its Subsidiaries operate generally (to the extent the Company and its
Subsidiaries are not disproportionately affected); (iv) any Effect resulting
from an outbreak or escalation of hostilities, acts of terrorism, political
instability or other national or international calamity, crisis or emergency, or
any governmental or other response to any of the foregoing, in each case whether
or not involving the United States, Russia, or any country constituting a part
of the Commonwealth of Independent States (but excluding any Effect resulting
from an outbreak after the date of this Agreement or an escalation after the
date of this Agreement in Russia of hostilities, acts of terrorism or political
instability, or any governmental or other response thereto); and (v) any Effect
arising from any pending or threatened claim, action or proceeding arising out
of or relating to the existence of this Agreement or the transactions
contemplated hereby, including the Share Purchase.
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"Orders" means any orders, judgments, injunctions, awards, decrees or writs
handed down, adopted or imposed by any Governmental Entity.
"Person" means any individual, corporation (including any non-profit
corporation), general partnership, limited partnership, limited liability
partnership, joint venture, estate, trust, company (including any limited
liability company or joint stock company), firm or other enterprise,
association, organization, entity or Governmental Entity.
"PeterStar" means PeterStar ZAO, a closed joint stock company organized
under the laws of the Russian Federation.
"Representatives" means, when used with respect to a Buyer or the Seller,
the directors, officers, employees, consultants, accountants, legal counsel,
investment bankers, agents, financing sources and representatives of financing
sources and other representatives of such Buyer or the Seller, as applicable,
and its Subsidiaries.
"Senior Notes" means the Seller's Series A and Series B 10 1/2% Senior
Discount Notes due 2007 governed by the Indenture, dated September 30, 1999, by
and between the Seller and U.S. Bank Trust National Association, as trustee.
"Subsidiary" means, when used with respect to any Person, any corporation
or other organization, whether incorporated or unincorporated, at least a
majority of the capital stock or other equity interests of which having by their
terms ordinary voting power to elect a majority of the board of directors or
other body performing similar functions with respect to such corporation or
other organization is directly or indirectly owned or controlled by such first
Person or by any one or more of its Subsidiaries, or by such first Person and
one or more of its Subsidiaries. For the avoidance of doubt, the parties hereto
agree that PeterStar and its Subsidiaries are a Subsidiary of the Company.
"Superior Proposal" means a bona fide Acquisition Proposal made by a third
party which the board of directors of the Seller determines in good faith by a
vote of a majority of the entire board of directors of the Seller (after
consultation with its independent financial advisors and outside counsel),
taking into account all legal, financial, regulatory and other aspects of the
proposal and the Person making such proposal, (i) would, if consummated in
accordance with its terms, be more favorable from a financial point of view than
those contemplated by this Agreement (taking into account any adjustments to the
terms and conditions of this Agreement or the Share Purchase offered in writing
by the Buyers, and any amounts payable pursuant to Section 7.3(c) by the
Seller), (ii) that the conditions to the consummation of which are all
reasonably capable of being satisfied without undue delay and (iii) that
financing to the extent required is reasonably likely to be available. As used
in this definition of "Superior Proposal", references in clause (i) of the
definition of "Acquisition Proposal" shall be deemed to be references to all or
substantially all of the assets of the Company or PeterStar or at least a
majority of the share capital of the Seller or the capital stock of the Company
or PeterStar, and references to 15% in clause (ii) of the definition of
"Acquisition Proposal" will be deemed to be references to 50%.
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"Tax" or "Taxes" means (i) any and all United States federal, state,
provincial, local, foreign and other taxes, levies, fees, imposts, duties, and
similar governmental charges (including any interest, fines, assessments,
penalties or additions to tax imposed in connection therewith or with respect
thereto), whether collected by withholding or otherwise, including (A) taxes
imposed on, or measured by, income, franchise, profits or gross receipts, and
(B) ad valorem, value added, capital gains, sales, goods and services, use, real
or personal property, capital stock, license, branch, payroll, estimated
withholding, employment, social security (or similar), unemployment,
compensation, utility, severance, production, excise, stamp, occupation,
premium, windfall profits, transfer and gains taxes, and customs duties, and
(ii) any transferee liability in respect of any items described in the foregoing
clause (i).
"Tax Returns" means any and all reports, returns, declarations, claims for
refund, elections, disclosures, estimates, information reports or returns or
statements required to be supplied to a taxing authority in connection with
Taxes, including any information, schedule or attachment thereto or amendment
thereof.
(b) The following additional capitalized terms are defined in the following
Sections of this Agreement:
Term Section
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Agreement.............................................................. Preamble
Budget............................................................Section 5.1(k)
Buyer Disclosure Letter...............................................Article IV
Buyers..................................................................Preamble
Closing Date.........................................................Section 2.2
Closing..............................................................Section 2.2
Common Voting Agreement.................................................Recitals
Company Material Contract........................................Section 3.11(a)
Company Regulatory Agreements.....................................Section 3.8(c)
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Company.................................................................Preamble
ETV.....................................................................Preamble
FNH.....................................................................Preamble
Leased Real Property.............................................Section 3.10(a)
Necessary Consents and Filings....................................Section 3.2(d)
Negotiation Period............................................Section 7.1(e)(ii)
Organizational Documents..........................................Section 3.1(b)
Owned Real Property..............................................Section 3.10(a)
Pisces..................................................................Preamble
Post-Signing Returns.............................................Section 5.11(a)
Proxy Statement................................................Section 3.2(c)(i)
Purchase Price.......................................................Section 2.1
Real Property....................................................Section 3.10(a)
Requisite Seller Vote...............................................Section 3.15
SEC............................................................Section 3.2(c)(i)
Seller Board Recommendation.......................................Section 3.2(a)
Seller Disclosure Documents......................................Section 3.17(a)
Seller Disclosure Letter.............................................Article III
Seller..................................................................Preamble
Share Purchase..........................................................Recitals
Shares..................................................................Recitals
Stockholders' Meeting..........................................Section 3.2(c)(i)
ARTICLE II
PURCHASE AND SALE OF SHARES; PURCHASE PRICE
Section 2.1 Sale and Purchase of Shares. At the Closing provided for in
Section 2.2, and upon the terms and subject to the conditions set forth in this
Agreement, the Seller shall sell to the Buyers, and the Buyers shall jointly and
severally purchase from the Seller, all of the Shares for an aggregate purchase
price of Two Hundred Fifteen Million United States Dollars (US $215,000,000.00)
(the "Purchase Price"), to be paid in accordance with Section 2.3.
Section 2.2 Closing; Closing Date. Subject to the satisfaction or waiver of
all of the conditions to closing contained in Article VI, the closing of the
Share Purchase (the "Closing") shall take place (a) at the offices of Xxxx,
Weiss, Rifkind, Xxxxxxx & Xxxxxxxx LLP, 1285 Avenue of the Americas, New York,
New York, at 10:00 a.m. no later than three Business Days after the day on which
the last of those conditions (other than any conditions that by their nature are
to be satisfied at the Closing) is satisfied or waived in accordance with this
Agreement or (b) at such other place and time or on such other date as the
Buyers and the Seller may agree in writing. The date on which the Closing occurs
is referred to as the "Closing Date."
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Section 2.3 Deliveries At Closing.
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(a) At the Closing, the Buyers shall deliver to the Seller the Purchase
Price in cash by wire transfer of immediately available funds in the manner
designated in Exhibit 2.3 to this Agreement.
(b) At the Closing, the Seller shall deliver, or cause to be delivered, to
Pisces:
(i) certificates representing the Shares accompanied by a stock transfer
order in proper form for transfer; and
(ii) resignation letters signed by each of the directors and officers of
the Company, other than those employed by the Company's registered agent in
Cyprus, effective as of the Closing Date.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF THE SELLER
The Seller represents and warrants to the Buyers, except as set forth in
the disclosure letter prepared by the Seller and delivered to the Buyers (the
"Seller Disclosure Letter") prior to the execution of this Agreement (which
letter sets forth items of disclosure with specific reference to the particular
Section or subsection of this Agreement to which the information in Seller
Disclosure Letter relates; provided, however, that any information set forth in
one section of the Seller Disclosure Letter will be deemed to apply to each
other Section or subsection of this Agreement to the extent such disclosure is
made in a way as to make its relevance to such other Section or subsection
readily apparent), as follows:
Section 3.1 Organization; Standing and Power; Charter Documents.
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(a) Organization; Standing and Power. Each of the Seller, the Company and
PeterStar is a corporation or other organization duly incorporated or organized,
validly existing and in good standing (to the extent such concept is recognized)
under the laws of the jurisdiction of its incorporation or organization except,
in the case of the Company and PeterStar, where the failure to be so
incorporated or organized, existing and in good standing would not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect on
the Company. The Seller has all necessary corporate power and authority to enter
into this Agreement and, subject to obtaining the Requisite Seller Vote, to
consummate the transactions contemplated hereby. The Company and PeterStar have
the requisite power and authority to own, lease and operate their assets and
properties and to carry on their business as now being conducted.
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(b) Charter Documents. The Seller has made available to the Buyer a correct
and complete copy of the certificate of incorporation and by-laws, or similar
organizational documents of the Company and PeterStar, each as amended to date
(collectively, the "Organizational Documents"). Each such instrument is in full
force and effect. Neither the Company nor PeterStar is in violation of its
respective Organizational Documents, except for immaterial violations.
Section 3.2 Authority; Non-Contravention; Necessary Consents and Filings.
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(a) Authority. The board of directors of the Seller has adopted
resolutions: (i) approving and declaring expedient this Agreement and the
transactions contemplated hereby, including, without limitation, the Share
Purchase; (ii) declaring that it is for the best interests of the Seller that
the Seller enters into this Agreement and consummates the Share Purchase upon
the terms and subject to the conditions set forth in this Agreement; (iii)
directing that approval of the Share Purchase be submitted to a vote at a
Stockholders' Meeting; and (iv) recommending to the stockholders of the Seller
that they approve the Share Purchase (the "Seller Board Recommendation"). The
execution, delivery and performance of this Agreement by the Seller and the
consummation by the Seller of the transactions contemplated hereby have been
duly and validly authorized by all necessary corporate action on the part of the
Seller, subject to obtaining the Requisite Seller Vote. This Agreement has been
duly executed and delivered by the Seller and, assuming due execution and
delivery by each of the Buyers, constitutes the valid and binding obligation of
the Seller, enforceable against the Seller in accordance with its terms, subject
to (x) bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium
or similar laws, (y) laws of general applicability relating to or affecting
creditors' rights and (z) general equity principles.
(b) Non-Contravention. The execution and delivery by the Seller of this
Agreement, and the performance by the Seller of the transactions contemplated by
this Agreement in accordance with its terms, will not (i) conflict with or
result in any breach of any provision of the certificate of incorporation or
bylaws of the Seller or the Organizational Documents, (ii) require any consent,
approval or notice under, or conflict with or result in a violation or breach
of, or constitute (with or without notice or lapse of time or both) a default
under, or give rise to any right of termination, cancellation, suspension,
revocation, amendment or acceleration under any Company Permit or any Contract
to which the Seller, the Company or PeterStar is a party as of the date hereof
or by which any of them or the material assets of the Seller, the Company or
PeterStar are bound as of the date hereof, or require any offer to purchase or
any prepayment of any indebtedness or similar obligation outstanding as of the
date hereof, (iii) violate in any material respect any material Legal
Requirements applicable to the Seller, the Company or PeterStar as of the date
hereof or by which any of the material assets of the Seller, the Company or
PeterStar are bound as of the date hereof, or (iv) cause the creation or
imposition of any Liens on any material asset of the Company or PeterStar;
provided, however, that no representation or warranty is made in the foregoing
clauses (ii) and (iv) with respect to matters that would not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect on
the Company.
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(c) Necessary Consents and Filings. No consent, approval or authorization
of, or registration, declaration or filing with, or notice to, any Governmental
Entity is required to be obtained or made by the Seller, the Company or
PeterStar in connection with the execution, performance and delivery of this
Agreement or the consummation of the transactions contemplated hereby, except
for:
(i) the filing with the United States Securities and Exchange Commission
(the "SEC") of (A) a proxy statement (together with all amendments and
supplements thereto, the "Proxy Statement") relating to the special meeting of
the stockholders of the Seller to be held to consider the approval of the Share
Purchase (together with any adjournments or postponements thereof, the
"Stockholders' Meeting") and (B) any other filings and reports that may be
required in connection with this Agreement and the transactions contemplated
hereby under the applicable United States federal securities laws;
(ii) such consents, approvals, authorizations, registrations,
declarations and filings as may be required under applicable state securities or
"blue sky" laws and the securities laws of any foreign country; and
(iii) such consents, approvals, authorizations, registrations,
declarations and filings as may be required by those foreign Governmental
Entities regulating telecommunications business set forth in Section 3.2(c)(iii)
of Seller Disclosure Letter.
(d) The consents, approvals, authorizations, registrations, declarations
and filings set forth in the foregoing clauses (i) and (ii) are referred to
collectively as the "Necessary Consents and Filings".
Section 3.3 Title to the Shares. The Seller owns the Shares to be sold by
it hereunder beneficially and of record, free and clear of any restrictions on
transfer or Liens, and upon consummation of the Share Purchase will convey such
Shares free and clear of any Liens. All of the Shares are duly authorized,
validly issued, fully paid and non-assessable and not subject to any preemptive
rights and all of the Shares were issued in compliance with applicable
securities laws and regulations. None of the Shares have been issued in
violation of any preemptive rights, purchase option, call option, right of first
refusal, subscription right or any similar right of the current or past
stockholders of the Company. There are no voting trusts, proxies, registration
rights agreements or other agreements, commitments, arrangements or
understandings of any character by which the Seller is bound with respect to
voting of the Shares or with respect to the registration of the offering, sale
or delivery of the Shares.
Section 3.4 Capitalization.
--------------
(a) The Company. The Shares constitute all of the issued and outstanding
share capital of the Company. There are no options, warrants, conversion
privileges, subscription or purchase rights or other rights presently
outstanding to purchase or otherwise acquire any authorized but unissued,
unauthorized or treasury share capital or other securities of, or any
proprietary interest in, the Company, and there is no outstanding security of
any kind convertible into or exchangeable for such share capital or proprietary
interest.
10
(b) PeterStar; No Other Subsidiaries. Except as set forth in Schedule
3.4(b) of the Seller Disclosure Letter, as of the date hereof, the Company
directly owns 71% of the issued and outstanding capital stock of PeterStar.
Other than PeterStar, the Company does not own, directly or indirectly, any
capital stock or other equity interest of, or any security convertible or
exchangeable into or exercisable for any capital stock or other equity interest
of, any Person. All of the outstanding shares of capital stock of PeterStar that
are owned by the Company (i) have been duly authorized and validly issued, (ii)
are fully paid and non-assessable and (iii) except as set forth in Section
3.4(b) of the Seller Disclosure Letter, are owned directly by the Company free
and clear of all restrictions on transfer and Liens. As of the date hereof,
there are no securities, options, rights, warrants, commitments or other
arrangements to which the Seller or any of its Subsidiaries is a party or by
which it is bound obligating the Seller or any of its Subsidiaries (x) to issue,
deliver or sell, or repurchase, acquire or pay for, additional shares of capital
stock or other voting securities of PeterStar or (y) to issue, grant, extend or
enter into any such security, option, right, warrant, commitment or other
arrangement. All outstanding capital stock of PeterStar has been issued and
granted (A) in compliance in all material respects with all applicable
securities laws and other Legal Requirements, (B) in compliance with all
requirements set forth in applicable Contracts, except as would not reasonably
be expected to have, individually or in the aggregate, a Material Adverse Effect
on the Company and (C) in compliance in all material respects with the
Organizational Documents of PeterStar.
Section 3.5 Absence of Certain Changes or Events. Except as set forth in
Section 3.5 of the Seller Disclosure Letter, (a) since December 31, 2004 until
the date hereof, there has not been any Material Adverse Effect on the Company,
nor has there been any change, event, condition, circumstance, occurrence or
effect that would reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect on the Company and (b) since December 31,
2004 until the date hereof, neither the Company nor any of its Subsidiaries have
taken any action that would have been prohibited had Section 5.1 been in effect
as of January 1, 2005.
Section 3.6 Taxes. As of the date hereof, except as set forth in Section
3.6 of the Seller Disclosure Letter:
(a) The Company and its Subsidiaries have timely filed all material Tax
Returns required to be filed. All of such Tax Returns are true, complete and
correct in all material respects. No extension is in effect for the Company or
any of its Subsidiaries with respect to the filing of any material Tax Return or
the payment of any material Tax.
(b) The Company and its Subsidiaries have timely paid all material Taxes
due, whether or not shown on any Tax Return. Any material deficiencies for
material Taxes asserted or assessed in writing against the Company or any of its
Subsidiaries have been fully and timely paid. The Company and its Subsidiaries
have made adequate provision for any Taxes that are not yet due and payable,
other than Taxes being contested in good faith by appropriate proceedings for
which adequate reserves have been provided or, if any such contest commenced
after September 30, 2004, for which adequate reserves are provided.
11
(c) The Company and its Subsidiaries have made available to the Buyers
correct and complete copies of all material Tax Returns, examination reports and
statements of deficiencies for taxable periods for which the applicable
statutory periods of limitation have not expired.
(d) There are no outstanding agreements extending or waiving the statutory
period of limitations applicable to any claim for, or the period for the
collection, assessment or reassessment of, material Taxes due from the Company
or any of its Subsidiaries for any taxable period and no request for any such
waiver or extension is currently pending.
(e) No audit or other proceeding by any Governmental Entity is pending with
respect to any material Taxes due from or with respect to the Company or any of
its Subsidiaries. No Governmental Entity has given written notice of its
intention to assert any deficiency or claim for additional material Taxes or
proposed any adjustment to any material Tax Returns against the Company or any
of its Subsidiaries. No written claim has been made against the Seller or any of
its Subsidiaries by any Governmental Entity in a jurisdiction where the Company
and its Subsidiaries do not file Tax Returns that the Company or such Subsidiary
is or may be subject to taxation by that jurisdiction.
(f) There are no Liens for material Taxes upon the Shares or the assets of
the Company or its Subsidiaries, except for Liens for current Taxes not yet due.
(g) Neither the Company nor any of its Subsidiaries is a party to any
Contract relating to the sharing, allocation or indemnification of material
Taxes or has any liability for material Taxes of any Person.
Section 3.7 Intellectual Property.
---------------------
(a) As of the date hereof, the Company and each of its Subsidiaries owns or
has the right to use all material Intellectual Property and IT Assets necessary
to conduct the business of the Company and its Subsidiaries as presently
conducted. To the Knowledge of the Seller, as of the date hereof all of the
Company's and its Subsidiaries rights in the material Intellectual Property
owned or purportedly owned by the Company or its Subsidiaries are valid and
enforceable.
(b) Since January 1, 2002 until the date hereof, neither the Company nor
any of its Subsidiaries has been a party to any claim, action or proceeding nor,
to the Knowledge of the Seller, has any claim, action or proceeding been
threatened in writing, that challenges the Company's or one of its Subsidiaries'
ownership or right to use any of the Intellectual Property that is necessary to
conduct the business of the Company and its Subsidiaries as presently conducted,
except as would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect on the Company.
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(c) To the Knowledge of the Seller, as of the date hereof neither the
Company nor any of its Subsidiaries is infringing in any material respect upon
the intellectual property rights of any third party. To the Knowledge of the
Seller, as of the date hereof no Person is materially infringing upon or
otherwise violating in any material respect the Intellectual Property rights of
the Company or any of its Subsidiaries.
Section 3.8 Compliance; Permits. Except as set forth in Section 3.8 of the
Seller Disclosure Letter:
(a) Compliance. As of the date hereof, neither the Company nor any of its
Subsidiaries is in material conflict with, or in material default or material
violation of, any material Legal Requirement (including any material Legal
Requirements (and material regulatory fees and surcharges imposed thereunder) of
Russian Governmental Entities that regulate the telecommunications industry)
applicable to the Company or any of its Subsidiaries. As of the date hereof, no
material investigation or review by any Russian Governmental Entity is pending
or, to the Knowledge of the Seller, has been threatened in writing against the
Company or any of its Subsidiaries, and to the Knowledge of the Seller, no
written notice has been received by the Company or its Subsidiaries alleging or
inquiring about an alleged or suspected violation of any material Legal
Requirements (and material regulatory fees and surcharges imposed thereunder) of
Russian Governmental Entities that regulate the telecommunications industry. To
the Knowledge of the Seller, no event has occurred prior to the date hereof
that, with the giving of notice, the passage of time, or both, would constitute
grounds for a material violation or material order with respect to any material
Legal Requirements (and material regulatory fees and surcharges imposed
thereunder) of Russian Governmental Entities that regulate the
telecommunications industry. Notwithstanding anything to the contrary contained
in this Section 3.8(a), the representations and warranties contained in this
Section shall not be deemed applicable to any representations or warranties
regarding compliance with laws as may be addressed in Sections 3.6 (Taxes) and
3.12 (Environmental Matters).
(b) Permits. As of the date hereof, the Company and its Subsidiaries hold
all Company Permits. As of the date hereof, the Company Permits constitute all
of the Permits from any Governmental Entity that regulates telecommunications in
each applicable jurisdiction that are necessary or required for or used in the
operation of the businesses of the Company and its Subsidiaries as now conducted
other than any such Permits the absence of which would not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect on
the Company. All of the Company Permits existing on the date hereof were duly
obtained and are, as of the date hereof, valid and in full force and effect,
unimpaired by any material condition, except those conditions that may be
contained within the terms of such Company Permits. As of the date hereof, no
Governmental Entity is claiming or, to the Knowledge of the Seller, is
threatening to claim that the Company or any of its Subsidiaries is not in
compliance in all material respects with the material terms and conditions of a
Company Permit or that the Company or any of its Subsidiaries have failed to
fulfill and/or perform all material obligations required under such Company
Permits. As of the date hereof, no action by or before any Governmental Entity
that regulates telecommunications in each applicable jurisdiction is pending or,
to the Knowledge of the Seller, threatened in which the requested remedy is (i)
the revocation, suspension, cancellation, rescission or modification or refusal
to renew any of the Company Permits, or (ii) material fines and/or forfeitures.
To the Knowledge of the Seller, as of the date hereof no event has occurred
which would (x) result in, or after notice or lapse of time or both would
reasonably be expected to result in, revocation, suspension, adverse
modification, non-renewal, impairment, restriction or termination of, or order
of forfeiture or substantial fine with respect to, any of the Company Permits,
or (y) affect or could reasonably be expected in the future to affect any of the
rights of the Company or its Subsidiaries under any material Company Permits. No
facts are known to the Seller or any of its Subsidiaries as of the date hereof
which if known by a Governmental Entity of competent jurisdiction would present
a material risk that any Company Permit could be revoked, suspended, adversely
modified, not renewed, impaired, restricted, terminated, forfeited or a
substantial fine imposed against the Company or any of its Subsidiaries.
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(c) As of the date hereof neither the Company nor any of its Subsidiaries
(i) is a party to any written consent, written agreement or memorandum of
understanding with any Governmental Entity or (ii) has adopted any board
resolutions at the request of any Governmental Entity, in any case that
restricts in any material respect the conduct or operation of its business other
than those of general application that apply to similarly situated
telecommunications companies or their subsidiaries (collectively, "Company
Regulatory Agreements"). To the Knowledge of the Seller, as of the date hereof
neither the Company nor any of its Subsidiaries has been advised in writing by
any Governmental Entity that such Governmental Entity is considering issuing or
requesting any Company Regulatory Agreement.
Section 3.9 Litigation. As of the date hereof (a) there are no material
claims, actions, suits or legal, regulatory or administrative proceedings or
investigations pending or, to the Knowledge of the Seller, threatened in writing
against the Company or any of its Subsidiaries, any material portion of the
consolidated assets of the Company and its Subsidiaries, or any director or
officer of the Company or any of its Subsidiaries for whom the Company or any of
its Subsidiaries may be liable before any Governmental Entity, and (b) neither
the Company nor any of its Subsidiaries is subject to any material Order.
Section 3.10 Real Estate.
-----------
(a) As of the date hereof the Company and each of its Subsidiaries has (i)
good and marketable title to all real property owned by the Company or any of
its Subsidiaries as of the date hereof (the "Owned Real Property") and (ii)
valid and binding leasehold interests in all of the leases and subleases under
which the Company or any of its Subsidiaries uses or occupies any real property
as of the date hereof (the "Leased Real Property," and together with the Owned
Real Property, the "Real Property"), subject in each case only to Liens that
would not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect on the Company.
14
(b) Since December 31, 2003 until the date hereof, there has been no damage
by fire or other casualty affecting the Real Property for which adequate
insurance coverage (subject to customary deductibles) is not available or which
has not heretofore been repaired or restored. To the Knowledge of the Seller,
since December 31, 2003 until the date hereof, there has been no pending,
threatened or contemplated condemnation proceeding affecting any material
portion of the Real Property or any sale or other disposition of a material
portion of the Real Property in lieu of condemnation, and the Company has not
received any written notice thereof.
Section 3.11 Material Contracts.
------------------
(a) Except as set forth in Section 3.11(a) of the Seller Disclosure Letter,
as of the date hereof there is no Contract that is material to the business,
properties, assets, financial condition or results of operations of the Company
and its Subsidiaries taken as a whole (any such contract, agreement or
understanding, a "Company Material Contract"). Except as would not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect on
the Company, as of the date hereof each Company Material Contract is a valid and
binding obligation of the Company or one of its Subsidiaries and is in full
force and effect and enforceable against the Company or one of its Subsidiaries
and, to the Knowledge of the Seller, the other party or parties thereto, in each
case in accordance with its terms, other than any Company Material Contract
which is by its terms no longer in force or effect and except as enforceability
may be limited by bankruptcy, insolvency, moratorium or other similar laws
affecting or relating to the enforcement of creditors' rights generally and is
subject to general principles of equity. Except to the extent any of the
following would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect on the Company, as of the date hereof
neither the Company nor any of its Subsidiaries is in violation or breach of or
in default (with or without notice or the lapse of time or both) under any
Company Material Contract, nor to the Company's Knowledge is any other party to
any such Company Material Contract. As of the date hereof, no party to any
Company Material Contract has informed the Company in writing that it intends to
terminate or materially modify the terms of any such Company Material Contract.
(b) Except as set forth in Section 3.11(b) of the Seller Disclosure Letter,
as of the date hereof neither the Company nor any of its Subsidiaries is a party
to or bound by any (i) Contract (including any lease of real property) (u)
materially restricting the ability of the Company or any of its Subsidiaries (or
after the Share Purchase, the Buyers or any of their Subsidiaries) to compete in
or conduct any line of business or to engage in business in any geographic area,
(v) relating to indebtedness for borrowed money (or guarantees relating to
indebtedness for borrowed money of others other than guarantees by the Company
or PeterStar of indebtedness of PeterStar and its wholly-owned Subsidiaries or
guarantees by PeterStar or its wholly-owned Subsidiaries of indebtedness of the
Company, PeterStar or any wholly-owned Subsidiary of PeterStar) in excess of
US$250,000, letters of credit, contingent or other earn-out payments, capital
lease obligations, (w) relating to any material joint venture, partnership,
strategic alliance, franchise or similar arrangement (other than agreements
listed on Section 3.11(b) of the Seller Disclosure Letter relating to joint
operation and development entered into in the ordinary course of business
consistent with past practice), (x) relating to the pending disposition or
acquisition of material assets (other than the disposition of used or excess
equipment or obsolete inventory) or (y) containing any so-called "most favored
nation" provisions or any similar provision requiring the Company or any
Subsidiary (or after the Share Purchase, the Buyers or any of their
Subsidiaries) to offer a third party terms or concessions at least as favorable
as offered to one or more other parties, or (ii) financial derivatives master
agreements, confirmation, or futures account opening agreements and/or brokerage
statements evidencing financial hedging or other trading activities. As of the
date hereof, except as set forth in Section 3.11(b) of the Seller Disclosure
Letter or except for Contracts to which either the Company or PeterStar is a
party, neither the Seller nor any of its Subsidiaries (excluding the Company and
its Subsidiaries) has entered into any Contracts that binds the Company,
PeterStar or the assets of the Company or PeterStar or entitles any of the
Employees to any rights against the Company or PeterStar.
15
Section 3.12 Environmental Matters. Except as would not reasonably be
expected to have a Material Adverse Effect on the Company, as of the date hereof
(a) the Company and its Subsidiaries are and have been in compliance with all
applicable Environmental Laws, and has obtained and is in compliance with all
Permits required under Environmental Laws; (b) no notice of violation,
notification of liability or request for information has been received by the
Company or any of its Subsidiaries arising out of any Environmental Law; (c)
there is no Order, claim, action or proceeding pending or, to the Knowledge of
the Seller, threatened in writing against the Company or any of its Subsidiaries
pursuant to Environmental Laws; (d) the Company is not otherwise subject to any
liabilities under Environmental Laws; and (e) to the Knowledge of the Seller,
all of the Company's and its Subsidiaries' facilities which may intentionally or
unintentionally radiate radio frequency emissions, including their wireless base
station transmitters, are in compliance with all applicable Legal Requirements
relating to permissible levels of radio frequency emissions and to human
exposure to radio frequency radiation.
Section 3.13 Employee Agreements. Section 3.13 of the Seller Disclosure
Schedule contains a complete and correct list of all Contracts or other
arrangements for the payment of compensation and bonuses by the Company or any
of its Subsidiaries to Xxxxxx Xxxxxx, Xxxxxx Xxxxxxx and Xxxxx Kossobok. Except
as set forth in Section 3.13 of the Seller Disclosure Letter, neither the
execution of this Agreement nor the performance of the obligations hereunder
shall alone or in combination with any other event require a payment, or cause
the accelerated vesting of right of a payment, from the Company or any of its
Subsidiaries.
Section 3.14 No Operations. The Company is a holding company and is not
currently engaged in any business activities or operations. Except as set forth
in Section 3.14 of the Seller Disclosure Letter, to the Knowledge of the Seller,
the Company has no material assets, properties or rights and no material
liabilities or obligations (whether accrued, absolute, contingent or otherwise)
other than those arising out of or in connection with its ownership of 71% of
the issued and outstanding capital stock of PeterStar.
16
Section 3.15 Stockholder Vote Required. The only vote of the holders of any
class or series of capital stock of the Seller or any of its Subsidiaries
necessary to approve the Share Purchase is the affirmative vote of the holders
of a majority of the outstanding shares of common stock of the Seller (the
"Requisite Seller Vote").
Section 3.16 Opinion of Financial Advisors. The board of directors of the
Seller has received the written opinion of Evercore Partners Inc. to the effect
that, as of the date of this Agreement, the consideration to be received in the
Share Purchase by the Seller is fair, from a financial point of view, to the
Seller.
Section 3.17 Proxy Statement.
---------------
(a) Each document required to be filed by the Seller with the SEC or
required to be distributed or otherwise disseminated to the Seller's
stockholders in connection with the transactions contemplated by this Agreement
(the "Seller Disclosure Documents"), including the Proxy Statement and any
amendments or supplements thereto, when filed, distributed or disseminated, as
applicable, will comply in all material respects with the applicable
requirements of the Exchange Act. The representations and warranties contained
in this Section 3.17(a) do not apply to statements or omissions included in the
Seller Disclosure Documents based upon information furnished to the Seller by
the Buyers specifically for use therein.
(b) (i) The Proxy Statement, as supplemented or amended, if applicable, at
the time such Proxy Statement or any amendment or supplement thereto is first
mailed to stockholders of the Seller and at the time such stockholders vote on
adoption of this Agreement, and (ii) any Seller Disclosure Documents (other than
the Proxy Statement), at the time of the filing of such Seller Disclosure
Document or any supplement or amendment thereto and at the time of any
distribution or dissemination thereof, will not contain any untrue statement of
a material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements made therein, in the light of the
circumstances under which they were made, not misleading. The representations
and warranties contained in this Section 3.17(b) will not apply to statements or
omissions included in the Seller Disclosure Documents based upon information
furnished to the Seller by the Buyers specifically for use therein.
Section 3.18 Brokers' and Finders' Fees. Except for the fees payable to
Evercore Partners Inc. pursuant to an engagement letter dated September 30,
2004, a copy of which has been provided to the Buyers, the Seller has not
incurred any liability for brokerage or finders' fees or agents' commissions or
any similar charges in connection with this Agreement or any of the transactions
contemplated hereby.
17
Section 3.19 Transactions between the Company and Seller. Except as set
forth on Section 3.19 of the Seller Disclosure Schedule, as of the date hereof
there are no Contracts, arrangements or understandings between the Company or
any of its Subsidiaries, on the one hand, and the Seller or any of its
Subsidiaries (excluding the Company and its Subsidiaries) or any of their
respective directors or officers, on the other hand, that require any payments
from Company or any of its Subsidiaries, on the one hand, to the Seller or any
of its Subsidiaries (excluding the Company and its Subsidiaries) or any of their
respective directors or officers, on the other hand.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF THE BUYERS
The Buyers, jointly and severally, represent and warrant to the Seller,
except as otherwise set forth in the disclosure letter delivered by the Buyers
to the Seller (the "Buyer Disclosure Letter") prior to the execution of this
Agreement (which letter sets forth items of disclosure with specific reference
to the particular Section or subsection of this Agreement to which the
information in the Buyer Disclosure Letter relates; provided, however, that any
information set forth in one section of the Buyer Disclosure Letter will be
deemed to apply to each other Section or subsection of this Agreement to the
extent such disclosure is made in a way as to make its relevance to such other
Section or subsection readily apparent), as follows:
Section 4.1 Organization; Standing and Power.
--------------------------------
(a) Organization; Standing and Power. FNH is a societe anonyme organized
under the laws of Luxembourg, ETV is a societe anonyme organized under the laws
of Switzerland, and Pisces is a company with limited liability organized under
the Corporation Law of Cyprus. Each of the Buyers is duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization. Each of the Buyers has all requisite power and authority to enter
into this Agreement and to consummate the transactions contemplated hereby.
(b) Charter Documents. The Buyers have made available to the Seller a
correct and complete copy of the certificate of incorporation and by-laws, or
similar organizational documents, of each of FNH, ETV and Pisces, each as
amended to date. Each such instrument is in full force and effect. No Buyer is
in violation of any of the provisions of its respective organizational
documents, except for immaterial violations.
(c) Pisces. Pisces was formed solely for the purposes of engaging in the
transactions contemplated by this Agreement. Pisces has not engaged in any
business activities, conducted any operations or incurred any liabilities, other
than liabilities and obligations incurred in connection with the transactions
contemplated by this Agreement.
18
Section 4.2 Authority; Non-Contravention; Necessary Consents and Filings.
------------------------------------------------------------
(a) Authority. Each of the Buyers has all requisite power and authority to
enter into this Agreement and to consummate the transactions contemplated
hereby. The execution, delivery and performance of this Agreement by each of the
Buyers and the consummation by each of the Buyers of the transactions
contemplated hereby have been duly and validly authorized by all necessary
action on the part of each of the Buyers. No other proceedings on the part of
any of the Buyers is necessary to authorize the execution, delivery or
performance of this Agreement by any of the Buyers, or to consummate the
transactions contemplated hereby. This Agreement has been duly executed and
delivered by each of the Buyers and, assuming due execution and delivery by the
Seller, constitutes the valid and binding obligation of each of the Buyers,
enforceable against each of the Buyers in accordance with its terms, subject to
(i) bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium or
similar laws, (ii) laws of general applicability relating to or affecting
creditors' rights and (iii) general equity principles.
(b) Non-Contravention. Neither the execution and delivery of this Agreement
by the Buyers nor the consummation of the transactions contemplated hereby will
(i) conflict with or result in any breach of any provision of the organization
documents of any of the Buyers, (ii) require any consent, approval or notice
under, or conflict with or result in a violation or breach of, or constitute
(with or without notice or lapse of time or both) a default under, or give rise
to any right of termination, cancellation, amendment or acceleration under any
Contract to which any of the Buyers is a party or by which any of the Buyers or
their assets are bound or (iii) violate any Legal Requirements applicable to any
of the Buyers.
(c) Necessary Consents and Filings. No consent, approval or authorization
of, or registration, declaration or filing with, or notice to, any Governmental
Entity is required to be obtained or made by any Buyer in connection with the
execution, performance and delivery of this Agreement or the consummation of the
transactions contemplated hereby, except for (i) the Necessary Consents and
Filings, (ii) such other consents, approvals, authorizations, registrations,
declarations and filings which if not obtained or made would not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect on
the Company, or (iii) any consent that may be necessary from the Federal
Anti-monopoly Service of the Russian Federation.
Section 4.3 Financial Ability. As of the date of this Agreement, the Buyers
have the means to raise the financing necessary to pay, and as of the Closing
Date will have sufficient cash in immediately available funds to pay, the
Purchase Price and all of their fees and expenses in order to consummate the
transactions contemplated by this Agreement.
Section 4.4 Proxy Statement. None of the information with respect to the
Buyers or any of their respective Subsidiaries or Affiliates that the Buyers
furnish to the Seller for use in any document required to be filed by the Seller
with the SEC or required to be distributed or otherwise disseminated to the
Seller's stockholders in connection with the transactions contemplated by this
Agreement, including the Proxy Statement and any amendments or supplements
thereto, at the time of the filing thereof, at the time of any distribution or
dissemination thereof or at the time the stockholders of the Seller vote on
adoption of this Agreement will contain any untrue statement of a material fact
or omit to state any material fact necessary in order to make the statements
made therein, in the light of the circumstances under which they were made, not
misleading.
19
Section 4.5 Purchase for Investment. Each of the Buyers is purchasing the
Shares for its own account for investment and not for resale or distribution in
any transaction that would be in violation of the securities laws of the United
States of America or any state thereof. Each of the Buyers is an "accredited
investor" as defined in Rule 501 of Regulation D promulgated under the
Securities Act of 1933, as amended. None of the Buyers has any contract,
undertaking, agreement or arrangement with any Person to sell, transfer or grant
participations to such Person or to any third Person, with respect to any of the
Shares.
Section 4.6 Brokers' and Finders' Fees. Except for fees payable to
Rothschild Inc. pursuant to an engagement letter dated July 23, 2004 and for
fees payable to UFG Management Services, Inc., pursuant to a financial services
agreement dated July 30, 2004, none of the Buyers has incurred any liability for
brokerage or finders' fees or agents' commissions or any similar charges in
connection with this Agreement or any transaction contemplated hereby.
ARTICLE V
COVENANTS AND AGREEMENTS
Section 5.1 Conduct of Business of the Company. Except as contemplated by
this Agreement and subject to the restrictions contained in this Section 5.1 and
in Section 5.12, during the period commencing on the date of this Agreement and
ending on the Closing Date (or the date on which this Agreement is terminated
pursuant to its terms), the Seller shall (x) conduct the operations of the
Company and its Subsidiaries in the ordinary course of business consistent with
past practice, (y) use commercially reasonable efforts to preserve intact the
business organization of the Company and its Subsidiaries, to retain the
services of the current officers and key employees of the Company and its
Subsidiaries, to maintain satisfactory relationships with the customers,
suppliers and employees and others having business relationships with the
Company and its Subsidiaries, and to maintain all material equipment of the
Company and its Subsidiaries in good condition, excepting ordinary wear and
tear, and (z) comply in all material respects with the material terms and
conditions of the Company Permits and Company Material Contracts and shall
maintain and renew all existing Company Permits and shall use its commercially
reasonable efforts to apply for and obtain all additional Company Permits that
may be necessary after the date hereof. The Seller shall permit a designee of
the Buyers (the "Buyer Designee") to observe all financial and operational
matters of the Companies and its Subsidiaries. Without limiting the generality
of the foregoing, and except as otherwise expressly provided in this Agreement
or set forth in Section 5.1 of Seller Disclosure Letter, prior to the Closing
Date, the Seller shall not permit the Company or any of its Subsidiaries to take
any of the following actions without the prior written consent of the Buyers
(which consent shall not be unreasonably withheld, conditioned or delayed, it
being understood that a material impairment of the value of the Company or its
Subsidiaries, taken as a whole, resulting from or relating to the following
actions will be deemed a valid reason for withholding, conditioning or delaying
consent); provided, that it is understood and agreed that if no response to a
request for a consent has been received within two days of communication of such
request to the Buyers, then such consent shall be deemed given.
20
(a) amend the organizational documents or change the proportionate
representation of the board of directors of the Company or any of its
Subsidiaries;
(b) issue, sell, pledge or deliver (whether through the issuance or
granting of any options, warrants, calls, subscriptions, stock appreciation
rights or other rights or Contracts) any capital stock or any securities
convertible or exchangeable into or exercisable for shares of capital stock;
(c) enter into any Contract or other understanding or arrangement with
respect to the voting or registration of any capital stock or any securities
convertible or exchangeable into or exercisable for shares of capital stock;
(d) split, combine or reclassify any shares of its capital stock or redeem,
purchase or otherwise acquire any shares of its capital stock;
(e) declare, pay or set aside for payment any dividend or other
distribution in respect of its capital stock (other than between the Company and
any of its Subsidiaries), or make any other payments to Seller or its
Subsidiaries (excluding the Company and its Subsidiaries);
(f) increase benefits under or establish any employee benefit plan, or
otherwise increase the compensation payable or to become payable to any of its
respective directors, officers or employees (except for the payment of accrued
or earned but unpaid bonuses described in Section 5.1 of Seller Disclosure
Letter), other than in the ordinary course of business consistent with past
practice, as required by Legal Requirements or by any existing employment
agreement or employee benefit plan;
(g) establish any key employee retention plan, enter into any employment or
severance agreement with or grant any severance or termination pay to, any of
its directors, officers or employees, other than in accordance with existing
employee benefit plans or as required by applicable Legal Requirements and other
than in connection with the hiring of new employees in the ordinary course of
business consistent with past practice;
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(h) other than as permitted by Sections 5.1(i), enter into any new
Contracts that are, individually or in the aggregate, material to the Company
and its Subsidiaries taken as a whole, or terminate or make any change in any
existing Contracts that are, individually or in the aggregate, material to the
Company and its Subsidiaries taken as a whole;
(i) acquire, by merger, consolidation, acquisition of equity interests or
assets, or otherwise, any Person or business or division thereof or any real
estate, except acquisitions by PeterStar in amounts not to exceed $2 million
individually and $10 million in the aggregate which are approved by at least
three quarters of the members of the board of directors of PeterStar;
(j) other than as permitted by Section 5.1(i), enter into any joint
venture, partnership, strategic alliance, franchise or similar agreement;
(k) sell, lease, license, transfer, pledge, encumber or dispose of (i) any
assets that are, individually or in the aggregate, material to the Company and
its Subsidiaries taken as a whole, or (ii) any capital stock of PeterStar or its
Subsidiaries, in each case except as contemplated by the operating budgets of
PeterStar attached hereto as Exhibit A (the "Budget") and other than the
disposition of used or excess equipment in the ordinary course of business
consistent with past practice;
(l) adopt a plan of complete or partial liquidation, dissolution, merger,
consolidation, restructuring, recapitalization or reorganization;
(m) incur, assume or prepay any indebtedness, letters of credit, contingent
or other earn-out payments, capital lease obligations, or assume, guarantee or
otherwise become liable or responsible for the indebtedness, letters of credit,
contingent or other earn-out payments, or capital lease obligations of any other
Person, or issue or sell any debt securities or other rights to acquire any debt
securities, or enter into any "keep well" or other arrangement to maintain any
financial condition of another Person, other than (i) in each case in the
ordinary course of business consistent with past practice under the existing
lines of credit of the Company and its Subsidiaries, (ii) capital lease
obligations set forth or contemplated by the Budget and (iii) earn-out payments
in connection with transactions permitted by Section 5.1(i);
(n) make any loans, advances or capital contributions to, or investments
in, any other Person (including loans to its employees, directors or officers);
(o) change its accounting policies or procedures, other than as required by
United States Generally Accepted Accounting Principles or Russian generally
accepted accounting principles;
(p) incorporate, form or otherwise organize a Subsidiary or any other
Person;
(q) make any capital expenditures not contemplated by the Budget;
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(r) settle or compromise any material claims, actions, investigations,
proceedings or other litigation (whether or not commenced prior to the date of
this Agreement);
(s) engage in any transaction with, or enter into any Contract or
understanding with, directly or indirectly, any of the Affiliates of the Seller
or its Affiliates that would be required to be disclosed under Item 404 of SEC
Regulation S-K;
(t) make any payments of any liabilities of the Company or any of its
Subsidiaries that are, individually or in the aggregate, material to the Company
and its Subsidiaries, taken as a whole, before the same come due in accordance
with their terms;
(u) enter into any Contract (including any lease of real property)
materially restricting the ability of the Company or any of its Subsidiaries
(and after the Share Purchase, the Buyers or any of their Subsidiaries) to
compete in or conduct any line of business or to engage in business in any
geographic area;
(v) enter into any Contract containing any so-called "most favored nation"
provisions or any similar provision requiring the Company or any of its
Subsidiaries (and after the Share Purchase, the Buyers or any of their
Subsidiaries) to offer a third party terms or concessions at least as favorable
as offered to one or more other parties;
(w) enter into any financial derivatives master agreements, confirmation,
or futures account opening agreements and/or brokerage statements evidencing
financial hedging or other trading activities;
(x) terminate, amend or enter into any new leases for real property that
are material to the Company and its Subsidiaries taken as a whole or Contracts
with Governmental Entities that are material to the Company and its Subsidiaries
taken as a whole;
(y) respond to any audit or investigation of a Governmental Entity without
consulting with the Buyer Designee;
(z) terminate any material insurance policy;
(aa) cancel any debts of substantial value or waive or release any claims
or rights of substantial value, except in each case in the ordinary course of
business consistent with past practice;
(bb) except in the ordinary course of business consistent with past
practice, factor, discount or otherwise accept less than full payment with
regard to its accounts receivable and other amounts due or offer or extend any
special discounts or terms on the sale of services;
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(cc) solicit customer advances or payment of accounts receivable or other
sums due in advance of their respective due dates, except in each case in the
ordinary course of business consistent with past practice; or
(dd) agree or commit to do any of the foregoing.
Section 5.2 Proxy Statement.
(a) As promptly as practicable following the date of this Agreement, the
Seller shall prepare a draft of the Proxy Statement. Each of the Buyers shall
provide the Seller with any information that may be reasonably requested by the
Seller which is necessary in the Seller's reasonable judgment (and in similar
situations customarily provided) in connection with the preparation and filing
of the Proxy Statement pursuant to this Section 5.2. The Seller shall provide
the Buyers with a reasonable opportunity to review and comment on such draft,
and once such draft is in a form reasonably acceptable to both the Buyers and
the Seller, the Seller shall file the Proxy Statement with the SEC.
(b) The Seller shall use its commercially reasonable efforts to (i) respond
to any comments on the Proxy Statement or requests for additional information
from the SEC as soon as practicable after receipt of any such comments or
requests and (ii) cause the Proxy Statement to be mailed to the stockholders of
the Seller as promptly as practicable following the date of this Agreement. The
Seller shall promptly (A) notify the Buyers upon the receipt of any such
comments or requests and (B) provide the Buyers with copies of all
correspondence between the Seller and its Representatives, on the one hand, and
the SEC and its staff, on the other hand. Prior to responding to any such
comments or requests or the filing or mailing of the Proxy Statement, the Seller
(x) shall provide the Buyers with a reasonable opportunity to review and comment
on any drafts of the Proxy Statement and related correspondence and filings and
(y) shall include in such drafts, correspondence and filings all comments
reasonably proposed by the Buyers.
(c) Whenever any event occurs that, in the reasonable judgment of the
Seller, is required to be set forth in an amendment or supplement to the Proxy
Statement, the Seller or one or both of the Buyers, as the case may be, will
promptly inform the other of such occurrence and the parties shall cooperate in
filing with the SEC and/or mailing to stockholders of the Seller such amendment
or supplement.
(d) The Proxy Statement shall include (i) the Seller Board Recommendation
unless the board of directors of the Seller has withdrawn, modified or amended
the Seller Board Recommendation in accordance with Section 5.4(e) and (ii) a
copy of the written opinion of Evercore Partners Inc. referred to in Section
3.16.
Section 5.3 Access to Information; Confidentiality.
--------------------------------------
(a) Between the date of this Agreement and the Closing Date, the Seller
shall and shall cause the Company and each of its Subsidiaries to, (i) afford
each of the Buyers and their respective Representatives reasonable access during
normal business hours to the officers, employees, agents, properties, books and
records of the Company and its Subsidiaries and (ii) promptly deliver or make
available to each of the Buyers such information concerning the Company and its
Subsidiaries as the Buyers may from time to time reasonably request. The Seller
shall, and shall cause the Company and its Subsidiaries to, deliver to the
Buyers copies of all management, operating and other reports that are provided
by the Company and its Subsidiaries to Seller contemporaneously with delivery of
such reports to Seller. No investigation conducted under this Section 5.3(a),
however, will affect or be deemed to modify any representation or warranty made
by the Seller in this Agreement.
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(b) Each of the Buyers agrees that all Confidential Information (i) will be
kept confidential by such Buyer and its Representatives and (ii) without
limiting the foregoing, will not be disclosed by such Buyer or its
Representatives to any Person except with the specific prior written consent of
the Seller. It is understood that each of the Buyers may disclose Confidential
Information to only those of its Representatives who (i) require such material
for the purpose of evaluating the transactions contemplated hereby and (ii) are
informed by such Buyer of the confidential nature of the Confidential
Information and the obligations of this Section 5.3(b). Each of the Buyers
further agrees that neither it nor any of its Representatives will use any of
the Confidential Information either for any reason or purpose other than in
connection with the transactions contemplated hereby. Each of the Buyers also
agrees to be responsible for enforcing the provisions of this Section 5.3(b) as
to its Representatives and to take such action, legal or otherwise, to the
extent necessary to cause them to comply with this Section 5.3(b) and thereby
prevent any disclosure of the Confidential Information by any of its
Representatives (including all actions that the Buyers would take to protect
their own trade secrets and confidential information) except as permitted by
this Section 5.3(b).
(c) Prior to the Closing Date, the Seller shall, subject to its obligations
under this Agreement, exercise complete control and supervision over the
operations of the Company and its Subsidiaries.
(d) Notwithstanding anything to the contrary contained herein, the Seller
shall not be required to provide any Confidential Information which the Seller
reasonably believes it may not provide to the Buyers by reason of applicable
law, rule, regulation, order, judgment, or decree, which the Seller has
reasonably concluded after consultation with counsel would reasonably be
expected to jeopardize any attorney/client privilege relating thereto, or which
the Seller or any Subsidiary is required to keep confidential by reason of
Contract with third parties entered into prior to the date hereof. The parties
will use their commercially reasonable efforts to make appropriate substitute
arrangements to permit reasonable disclosure under circumstances in which the
restrictions of the preceding sentence apply. To the extent that any
Confidential Information may include materials subject to the attorney-client
privilege, the Seller is not waiving and will not be deemed to have waived or
diminished its attorney work-product protections, attorney-client privileges or
similar protections and privileges as a result of disclosing any Confidential
Information (including Confidential Information related to pending or threatened
litigation) to any of the Buyers or their respective Representatives, regardless
of whether the Seller has asserted or is or may be entitled to assert such
privileges and protections. The parties (i) share a common legal and commercial
interest in all such Confidential Information that is subject to such privileges
and protections; (ii) are or may become joint defendants in proceedings to which
such Confidential Information covered by such protections and privileges
relates; and (iii) intend that such privileges and protections remain intact
should either party become subject to any actual or threatened proceeding to
which such Confidential Information covered by such protections and privileges
relates. In furtherance of the foregoing, none of the Buyers nor their
respective Representatives shall claim or contend, in proceedings involving
either party, that the Seller waived its attorney work-product protections,
attorney-client privileges or similar protections and privileges with respect to
any information, documents or other material disclosed to any of the Buyers or
any of their respective Representatives due to the Seller disclosing
Confidential Information (including Confidential Information related to pending
or threatened litigation) to any of the Buyers or any of their respective
Representatives in accordance with this Section 5.3.
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Section 5.4 No Solicitation.
---------------
(a) From the date of this Agreement until the Closing Date or the
termination of this Agreement in accordance with Article VII, except as
specifically permitted in this Section 5.4, the Seller shall not, shall cause
the Company and its Subsidiaries not to, and shall not authorize or permit any
of its Representatives to, directly or indirectly: (i) solicit, initiate,
knowingly facilitate or knowingly encourage any inquiries, offers or proposals
that constitute, or are reasonably likely to lead to, any Acquisition Proposal;
(ii) engage in discussions or negotiations with, furnish or disclose any
information or data relating to the Seller, the Company or its Subsidiaries to,
or in response to a request therefor, give access to any assets or the books and
records of the Seller, the Company or its Subsidiaries to, any Person that has
made or, to the Knowledge of the Seller, may be considering making any
Acquisition Proposal; (iii) approve, endorse or recommend any Acquisition
Proposal; (iv) withdraw, modify, or amend the Seller Board Recommendation; or
(v) enter into any agreement in principle, arrangement, understanding or
contract for any Acquisition Proposal.
(b) The Seller shall, shall cause the Company and its Subsidiaries to, and
shall instruct its Representatives to, immediately cease any existing
solicitations, discussions, negotiations or other activity with any Person being
conducted with respect to any Acquisition Proposal on the date hereof. The
Seller shall promptly inform its Representatives who have been engaged or are
otherwise providing assistance in connection with the transactions contemplated
by this Agreement of the Seller's obligations under this Section 5.4. Without
limiting the foregoing, the Seller agrees that any breach of the restrictions
set forth in this Section 5.4 by any individual or institution listed in Section
5.4(b) of Seller Disclosure Letter shall be deemed to be a breach by the Seller
of this Section 5.4.
(c) The Seller shall notify the Buyers as soon as practicable (but in any
event within 48 hours) after receipt of (i) any Acquisition Proposal or
indication from any Person that it intends to make, or is considering making, an
Acquisition Proposal or (ii) any request for non-public information relating to
the Company or any of its Subsidiaries or for access to the assets or the books
and records of the Company or its Subsidiaries by any Person that the Seller
reasonably believes is reasonably expected to lead to an Acquisition Proposal.
The Seller shall provide the Buyers with the identity of such Person, a
description of the material terms of such Acquisition Proposal, indication or
request and, if applicable, a copy of such Acquisition Proposal. The Seller
shall keep the Buyers informed on a reasonably current basis of the status and
the material terms of any such Acquisition Proposal, indication or request.
26
(d) Notwithstanding the foregoing, prior to obtaining the Requisite Seller
Vote, nothing in this Agreement shall prevent the Seller or its board of
directors from:
(i) engaging in discussions or negotiations with, or furnishing or
disclosing any information relating to the Seller, the Company or PeterStar or,
in response to a request therefor, giving access to the assets or the books and
records of the Seller, the Company or PeterStar to, any Person who, after the
date hereof, makes a bona fide written Acquisition Proposal not solicited after
the date hereof in violation of the provisions herein set forth, if (x) the
board of directors of the Seller, acting in good faith and by a majority of the
members of its entire board of directors, has determined (A) after consultation
with its financial advisor, that such Acquisition Proposal is reasonably likely
to result in a Superior Proposal and (B) after consultation with its outside
legal counsel, that the failure to take such action is reasonably likely to
result in a breach of its fiduciary obligations to the stockholders of the
Seller under applicable laws (in each case, taking into account any adjustments
to the terms and conditions of this Agreement or the Share Purchase offered in
writing by the Buyers in response to such Acquisition Proposal) and (y) the
Seller enters into a confidentiality agreement with such Person and concurrently
discloses or makes available the same information to the Buyers as it makes
available to such Person; provided, however, that to the extent the
confidentiality agreement entered into with such Person is on terms and
conditions materially more favorable to such Person than those contained in
Section 5.3 or in the confidentiality agreements entered into between the
Seller, on the one hand, and any of the Buyers and/or their Affiliates, on the
other hand, then Section 5.3 and/or the confidentiality agreements entered into
between the Seller, on the one hand, and the Buyers and/or their Affiliates, on
the other hand, shall be deemed amended to contain such materially more
favorable terms without any further action by the parties hereto or thereto; and
(ii) subject to compliance with Section 5.4(d)(i), entering into a
definitive agreement providing for the implementation of, or approving,
endorsing or recommending an Acquisition Proposal, but only so long as (A) the
board of directors of the Seller, acting in good faith and by a majority of the
entire board of directors, has (1) approved such definitive agreement, (2)
determined, after consultation with its financial advisor, that such bona fide
written and unsolicited Acquisition Proposal constitutes a Superior Proposal and
(3) determined, after consultation with its outside legal counsel, that the
failure to take such action is reasonably likely to result in a breach of its
fiduciary obligations to the stockholders of the Seller under applicable laws
and (B) the Seller terminates this Agreement pursuant to, and after complying
with all of the provisions of, Section 7.1(e).
27
(e) Notwithstanding the foregoing, (i) the board of directors of the Seller
shall be permitted to disclose to the stockholders of the Seller a position with
respect to an Acquisition Proposal required by Rule 14e-2(a), Item 1012(a) of
Regulation M-A or Rule 14d-9 promulgated under the Exchange Act and (ii) the
board of directors of the Seller may withdraw, modify or amend the Seller Board
Recommendation at any time if it determines, after consultation with its outside
legal counsel, that the failure to take such action is reasonably likely to
result in a breach of its fiduciary obligations to the stockholders of the
Seller under applicable laws.
(f) For the avoidance of doubt, the parties hereto acknowledge and agree
that nothing contained in this Section 5.4 shall prohibit or otherwise restrict
the Seller, any Subsidiary of the Company or any of their respective
Representatives from, directly or indirectly, (i) soliciting, initiating,
knowingly facilitating or knowingly encouraging any inquiries, offers or
proposals to purchase all or any portion of the Seller's interest in Magticom,
Telecom Georgia, Ayety TV, Juventus Radio 100.2 Kft (Szeged), Dotcomm
Communications (Estonia) or Xxxx Page (Kazakhstan), or (ii) engaging in
discussions or negotiations with, furnishing or disclosing any information or
data relating to Magticom, Telecom Georgia, Ayety TV, Juventus Radio 100.2 Kft
(Szeged), Dotcomm Communications (Estonia) or Xxxx Page (Kazakhstan), or in
response to a request therefor, giving access to any assets or the books and
records of Magticom, Telecom Georgia, Ayety TV, Juventus Radio 100.2 Kft
(Szeged), Dotcomm Communications (Estonia) or Xxxx Page (Kazakhstan). For the
avoidance of doubt, nothing in this Agreement shall prevent, restrict or
otherwise inhibit the ability of the Seller to enter into an agreement to sell
its interests in Magticom, Telecom Georgia, Ayety TV, Juventus Radio 100.2 Kft
(Szeged), Dotcomm Communications (Estonia) or Xxxx Page (Kazakhstan), whether
directly or indirectly.
Section 5.5 Reasonable Efforts; Additional Actions; Cooperation.
---------------------------------------------------
(a) Upon the terms and subject to the conditions of this Agreement
(including the provisions of Section 5.4(d) and 5.4(e)), each of the parties
hereto shall use all commercially reasonable efforts to take, or cause to be
taken, all action, and to do or cause to be done, and to assist and cooperate
with the other parties in doing, all things necessary, proper or advisable to
consummate and make effective as promptly as practicable the transactions
contemplated by this Agreement, including using all commercially reasonable
efforts to:
(i) obtain all consents, amendments or waivers under the terms of any
contractual arrangements required by the transactions contemplated by this
Agreement (other than consents, amendments or waivers the failure of which to
obtain would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect on the Company);
28
(ii) obtain or make all Necessary Consents and Filings, including
those required pursuant to the DGCL or the Exchange Act;
(iii) defend any lawsuits or other legal proceedings, whether judicial
or administrative, challenging this Agreement or the consummation of the
transactions contemplated hereby; and
(iv) fulfill or cause the fulfillment of the conditions to Closing set
forth in Article VI.
(b) In connection with obtaining or making the Necessary Consents and
Filings, the Buyers and the Seller shall: (i) provide the other party with a
reasonable opportunity to review and comment on drafts of any filings or other
communications to be made by it; (ii) consider in good faith any comments on
such filings or other communications received from the other party; (iii)
provide a final copy of each such filing or other communication to the other
party promptly after such filing or other communication is made; (iv) consult
with the other party in connection with any material inquiries from the
Governmental Entities responsible for such filings or other communications and
the possible resolution of any issues related thereto; and (v) inform the other
party as soon as practicable after receiving any notice from any such
Governmental Entities.
(c) The Buyers and the Seller shall not, the Buyers shall not permit any of
their respective Subsidiaries to, and the Seller shall not permit the Company or
its Subsidiaries to, take any action that would reasonably be expected to result
in any of the conditions to the Share Purchase set forth in Article VI of this
Agreement not being satisfied or satisfaction of those conditions being delayed,
except, in the case of the Seller, to the extent its board of directors
withdraws, modifies or amends the Seller Board Recommendation in accordance with
Section 5.4(e).
Section 5.6 Notification of Certain Matters. The Seller shall provide
written notice to the Buyers, and the Buyers shall provide written notice to the
Seller, promptly upon becoming aware of (a) any occurrence, or failure to occur,
of any event that could, either individually or in the aggregate, reasonably be
expected to cause any representation or warranty in this Agreement to be untrue
or inaccurate in any material respect at any time after the date hereof and
prior to the Closing Date, (b) any material failure on its part to comply with
or satisfy any covenant, condition or agreement to be complied with or satisfied
by it hereunder, (c) any notice or other communication from any Person alleging
that the consent of such Person (or another Person) is or may be required in
connection with the transactions contemplated by this Agreement, or (d) any
notice or other communication from any Governmental Entity in connection with
the transactions contemplated by this Agreement; provided that the delivery of
any notice pursuant to this Section 5.6 shall not be deemed to amend or
supplement the Seller Disclosure Letter, to modify any representation or
warranty made by the Seller in this Agreement, or to limit or otherwise affect
the remedies available hereunder to the party receiving such notice.
29
Section 5.7 Public Announcements. The initial press release with respect to
the transactions contemplated by this Agreement shall be in the form agreed to
by the Buyers and the Seller. Thereafter, for as long as this Agreement is in
effect, each Buyer and the Seller shall not, and each shall cause its
Subsidiaries not to, issue any press release or otherwise make any public
announcement with respect to this Agreement, the Share Purchase or the other
transactions contemplated hereby without the consent of the other parties
hereto, except where such release or announcement is required under applicable
Legal Requirements, in which case the issuing party shall use its commercially
reasonable efforts to consult with the other party before issuing any such
release or making any such public statement.
Section 5.8 Stockholder Approval. The Seller shall call and hold a duly
convened Stockholders' Meeting as promptly as practicable after the date of this
Agreement.
Section 5.9 Employee Matters. The Buyers agree that they shall cause the
Company and its Subsidiaries to honor all employment agreements between the
Company or any of its Subsidiaries, on the one hand, and Employees, on the other
hand, in accordance with their terms as in effect immediately before the
Closing, subject to any amendment or termination thereof that may be permitted
by such terms.
Section 5.10 Non-Solicitation. For a period of two (2) years from and after
the Closing Date, none of the Buyers nor the Seller nor any of their respective
Affiliates will, either for itself or any other Person, (a) induce or attempt to
induce any employee to leave the employ of the other party or any other entity
controlled by, controlling or under common control with such party, (b) in any
way interfere with the relationship between the other party or any of its
Affiliates and any of their respective employees, (c) employ, or otherwise
engage as an employee, independent contractor or otherwise, any employee of the
other party or any of its Affiliates, or (d) induce or attempt to induce any
customer, supplier, licensee, or business relation of the other party or any of
its Affiliates to cease doing business with the other party or such Affiliate,
or in any way interfere with the relationship between any customer, supplier,
licensee, or business relation of the other party or such Affiliate. The
provisions of this Section 5.10 shall not prohibit the employment by any of the
Buyers or any of their respective Affiliates of any employee of PeterStar in
connection with the consummation of the transactions contemplated by this
Agreement.
Section 5.11 Tax Matters. During the period from the date of this Agreement
until the Closing Date or the date on which this Agreement is terminated
pursuant to its terms, the Seller shall cause the Company and its Subsidiaries
to:
(a) prepare and timely file all material Tax Returns required to be filed
by them on or before the Closing Date, including any applicable extensions
("Post-Signing Returns") in a manner consistent with past practice, except as
otherwise required by applicable Legal Requirements;
30
(b) consult with the Buyers with respect to all income tax Post-Signing
Returns and deliver drafts of such income tax Post-Signing Returns to the Buyers
for their respective review no later than ten (10) Business Days prior to the
date on which such income tax Post-Signing Returns are required to be filed;
(c) fully and timely pay all Taxes due and payable shown on such
Post-Signing Returns that are so filed;
(d) promptly notify the Buyers of any audit or other Tax proceeding pending
or threatened against the Company or any of its Subsidiaries in respect of any
material Tax matter, and not agree to a settlement with respect to any such
audit or proceeding without the Buyers' prior consent, which consent shall not
be unreasonably conditioned, withheld or delayed;
(e) not obtain any extension with respect to the filing of any material Tax
Return or the payment of any material Tax without the Buyers' prior written
consent, which consent shall not be unreasonably conditioned, withheld or
delayed;
(f) not enter into any Contract relating to the sharing, allocation or
indemnification of Taxes of any other Person without the Buyers' prior written
consent, which consent shall not be unreasonably conditioned, withheld or
delayed; and
(g) not make or revoke any material Tax election, amend any material Tax
Return, or adopt or change a Tax accounting method without the Buyers' prior
written consent, which consent shall not be unreasonably conditioned, withheld
or delayed.
Section 5.12 Operating Expenditures. During the period from the date of
this Agreement until the earlier of the Closing Date or the date on which this
Agreement is terminated pursuant to its terms, the Seller shall cause the
Company and its Subsidiaries to obtain the consent of the Buyer Designee prior
to PeterStar and its related Subsidiaries making any operating expenditures
which exceed the amount of such expenditure (or the category of such
expenditure, as applicable) set forth in the Budget by more than 10%.
Section 5.13 Payoff of Senior Notes. The Seller shall use the proceeds
received from the Share Purchase to the extent necessary to repurchase all of
the Senior Notes in accordance with section 4.11 of the indenture relating to
the Senior Notes.
Section 5.14 Preservation of Records.
-----------------------
(a) Each of the Buyers (including, for the purpose of this Section 5.14,
the Company and its Subsidiaries after the Closing) at their own respective
expense, shall preserve and keep records held by such Buyer (or the Company or
such Subsidiary after Closing) relating to the Company and its Subsidiaries for
a period of seven years from the Closing Date, and shall provide the Seller and
its professional advisors with reasonable access, during normal business hours
and upon reasonable prior notice. If the Seller shall request the assistance
(including testimony) of employees of any Buyer in connection with any
litigation, investigation, audit, discovery, claim or similar proceeding, the
Buyer shall promptly make such employees available for a reasonable period of
time; provided, however, that all reasonable out-of-pocket expenses incurred in
connection therewith shall be borne by the Seller. Except as otherwise
prohibited by applicable Legal Requirements or Orders, a Buyer may destroy such
records after the time period specified herein, but only after such Buyer gives
ninety days prior written notice to the Seller and details the contents of the
records to be destroyed. The Seller shall have the option to take possession of
such records at its own expense within ninety days of the date of such notice by
such Buyer.
31
(b) The Seller and its Affiliates shall provide the Buyers with reasonable
access, during normal business hours and upon reasonable prior notice, to the
books and records that remain in the possession of Seller and its Affiliates to
the extent to which they relate to the ownership, business, operations, assets
or liabilities of the Company and/or its Subsidiaries on or before the Closing
Date. The Seller and its Affiliates shall cooperate with and provide reasonable
assistance to the Buyers, at no cost to the Buyers, in connection with its
accessing of such books and records.
Section 5.15 Elimination of Inter-Company Accounts. The Seller shall cause
all inter-company receivables, payables, loans, guarantees, claims, Liens,
liabilities and other obligations then existing between the Company or
PeterStar, on the one hand, and the Seller or any of the Seller's Subsidiaries
and Affiliates (other than the Company or PeterStar), on the other hand, to be
assigned to a designee of the Buyers, eliminated (including by means of a
contribution to capital) and/or released, in each case without cost to the
Buyers, the Company or any of its Subsidiaries or the payment of any
consideration by the Buyers, the Company or any of its Subsidiaries effective
immediately prior to the Closing. At or prior to Closing, the Seller shall
deliver to the Buyers all agreements, releases and other documentation
reasonably satisfactory to the Buyers in order to evidence the assignment,
elimination (including by means of a contribution to capital) and/or release of
such inter-company receivables, payables, loans, guarantees, claims, Liens,
liabilities and other obligations.
Section 5.16 Indemnity With Respect to Brokers Fees. The Buyers, jointly
and severally, agree to indemnify and hold harmless the Seller from any claim or
demand for commission or other compensation by any broker claiming to have been
employed by or on behalf of any Buyer or any of their respective Affiliates in
connection with this Agreement or the transactions contemplated hereby, and to
bear the cost of legal expenses incurred in defending against any such claim.
The Seller agrees to indemnify and hold harmless the Buyers from any claim or
demand for commission or other compensation by any broker claiming to have been
employed by or on behalf of the Seller or any of its Affiliates with respect to
this Agreement or the transactions contemplated hereby, and to bear the cost of
legal expenses incurred in defending against any such claim.
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ARTICLE VI
CONDITIONS PRECEDENT TO THE OBLIGATIONS
OF THE PARTIES TO CLOSE
Section 6.1 Conditions Precedent to the Obligations of the Parties to
Close. The respective obligations of each party to this Agreement to consummate
the Share Purchase shall be subject to the satisfaction or waiver on or prior to
the Closing Date of each of the following conditions:
(a) Requisite Seller Vote. The Share Purchase shall have been approved by
the Requisite Seller Vote.
(b) No Order. No Governmental Entity of competent jurisdiction shall have
enacted, issued, promulgated, enforced or entered any Legal Requirement or Order
(whether temporary, preliminary or permanent) which (i) is in effect and (ii)
has the effect of making the Share Purchase illegal or otherwise restraining,
enjoining or prohibiting consummation of the Share Purchase (or the consummation
of any other transactions contemplated by this Agreement if it would have the
effect of restraining or prohibiting the consummation of the Share Purchase).
Section 6.2 Additional Conditions Precedent to the Obligations of the
Buyers to Close. The obligation of the Buyers to enter into and complete the
Closing is subject to the fulfillment on or prior to the Closing Date of the
following conditions, any one or more of which may be waived by the Buyers,
acting jointly:
(a) Representations and Warranties. The representations and warranties of
the Seller contained in this Agreement (i) that are qualified by materiality or
Material Adverse Effect shall be true and correct in all respects as of the date
of this Agreement, and (ii) that are not so qualified shall be true and correct
in all material respects as of the date of this Agreement. The representations
and warranties of the Seller contained in the second sentence of Section 3.1(a)
and Sections 3.2(a) and (b), 3.3, 3.4(a), the second and fourth sentences of
Section 3.4(b), 3.14 and 3.15 (x) that are qualified by materiality or Material
Adverse Effect shall be true and correct in all respects as of the Closing Date
and (y) that are not so qualified shall be true and correct in all material
respects as of the Closing Date.
(b) Covenants and Agreements. The Seller shall have performed or complied
in all material respects with the covenants and agreements required by this
Agreement to be performed or complied with by it on or prior to the Closing
Date.
(c) Officer's Certificate. The Buyers shall have received a certificate,
signed on behalf of the Seller by a senior executive officer of the Seller,
certifying as to the matters set forth in Sections 6.2(a) and 6.2(b).
Section 6.3 Additional Conditions Precedent to the Obligations of the
Seller to Close. The obligation of the Seller to consummate the Share Purchase
shall be subject to the satisfaction on or prior to the Closing Date of each of
the following conditions, any of which may be waived (to the extent legally
permitted), in writing, exclusively by the Seller:
33
(a) Representations and Warranties. The representations and warranties of
the Buyers contained in this Agreement (i) that are qualified by materiality or
material adverse effect shall be true and correct in all respects as of the date
of this Agreement and as of the Closing Date, and (ii) that are not so qualified
shall be true and correct in all material respects as of the date of this
Agreement and as of the Closing Date; provided, however, that representations
and warranties that are made as of a specified date shall be true and correct as
of such specified date if qualified by materiality or material adverse effect
and shall be true and correct in all material respects as of such specified date
if not so qualified.
(b) Covenants and Agreements. Each of the Buyers shall have performed or
complied in all material respects with the covenants and agreements required by
this Agreement to be performed or complied with by such Buyer on or prior to the
Closing Date.
(c) Officer's Certificate. The Seller shall have received a certificate,
signed on behalf of each Buyer by a senior executive officer of such Buyer,
certifying as to the matters set forth in Sections 6.3(a) and 6.3(b).
Section 6.4 Frustration of Closing Condition. None of the parties to this
Agreement may rely on the failure of any condition set forth in this Article VI
to be satisfied if such failure was caused by such party's failure to use
reasonable efforts to consummate the Share Purchase and the other transactions
contemplated by this Agreement.
ARTICLE VII
TERMINATION OF AGREEMENT
Section 7.1 Termination. This Agreement may be terminated at any time prior
to the Closing Date, whether before or after obtaining the Requisite Seller
Vote:
(a) by the mutual written consent of the Buyers, acting jointly, and the
Seller;
(b) by the Buyers, acting jointly, or the Seller:
(i) if a court of competent jurisdiction or other Governmental Entity
shall have issued an Order or Legal Requirement or taken any other action
restraining, enjoining or otherwise prohibiting the Share Purchase and such
Order, Legal Requirement or other action shall have become final and
nonappealable;
34
(ii) if the Closing Date shall not have occurred on or before
September 30, 2005; provided, however, that the right to terminate this
Agreement under this Section 7.1(b)(ii) shall not be available to any party
whose willful failure to fulfill any covenant or agreement under this Agreement
has been a principal cause of, or resulted in, the failure to consummate the
Share Purchase by such date; or
(iii) if the Share Purchase has been submitted to the stockholders of
the Seller for approval at a Stockholders' Meeting and the Requisite Seller Vote
is not obtained;
(c) by the Seller, if there shall have occurred, on the part of any Buyer,
a breach of any representation, warranty, covenant or agreement contained in
this Agreement, which (i) would result in a failure of a condition set forth in
6.3(a) or 6.3(b) and (ii) is not curable or, if curable, is not cured within
thirty (30) days after written notice of such breach is given by the Seller to
the Buyers;
(d) by the Buyers, acting jointly, if there shall have occurred, on the
part of the Seller, a breach of any representation, warranty, covenant or
agreement contained in this Agreement which (i) would result in a failure of a
condition set forth in 6.2(a) or 6.2(b) and (ii) is not curable or, if curable,
is not cured within thirty (30) days after written notice of such breach is
given by the Buyers to the Seller;
(e) by the Seller at any time prior to obtaining the Requisite Seller Vote,
if the board of directors of the Seller shall approve, subject to complying with
the terms of this Agreement, a Superior Proposal in accordance with Section 5.4;
provided, however, that the Seller may not terminate pursuant to this Section
7.1(e) unless:
(i) the Seller's board of directors authorizes the Seller, subject to
complying with the terms of this Agreement, to enter into a binding written
agreement concerning a transaction that constitutes a Superior Proposal and the
Seller notifies the Buyers in writing that it intends to enter into such an
agreement, attaching the most current version of such agreement to such notice
(including any subsequent amendments or modifications); provided, that nothing
contained in this Agreement (including Sections 5.4 and 7.1(e)(i)) shall
prohibit the Seller from entering into such an agreement prior to terminating
this Agreement so long as the enforceability of such agreement against the
Seller is subject to, and conditioned upon, the Seller's obligations under
Sections 7.1(e)(ii), (iii) and (iv);
(ii) during the five day period after the Buyers' receipt of the
Seller's notice (the "Negotiation Period"), (x) the Seller shall have offered to
negotiate with (and, if accepted, negotiate with), and shall have instructed its
financial and legal advisors to offer to negotiate with (and if accepted,
negotiate with), the Buyers to attempt to make such adjustments in the terms and
conditions of this Agreement as will enable the Seller to proceed with this
Agreement and (y) the board of directors of the Seller shall have determined in
good faith, after consultation with its independent financial adviser and
outside legal counsel and, after considering the results of such negotiations
and the revised proposal made by the Buyers, if any, that the Superior Proposal
giving rise to the Seller's notice (including any subsequent amendments or
modifications) continues to be a Superior Proposal;
35
(iii) such termination is within five Business Days following the
Negotiation Period, if any; and
(iv) no termination pursuant to this Section 7.1(e) shall be effective
unless the Seller shall have made or shall be concurrently making the payment
required by Section 7.3.
(f) by the Buyers, acting jointly:
(i) if the board of directors of the Seller shall have withdrawn,
modified or amended the Seller Board Recommendation in a manner adverse to the
Buyers;
(ii) if the Seller shall fail to include a statement in the Proxy
Statement to the effect that its board of directors has determined that the
Share Purchase is for the best interests of the Seller;
(iii) if (A) the Seller shall have entered into a definitive agreement
providing for the implementation of, or shall have consummated a transaction
with respect to, a Superior Proposal or (B) the Seller or its board of directors
publicly announces its intention to do the foregoing; or
(iv) if the board of directors of the Seller withdraws, modifies,
qualifies or amends, or proposes to withdraw, modify, qualify or amend, in a
manner adverse to the Buyers, the Seller Board Recommendation.
Section 7.2 Notice of Termination; Effect of Termination. Any termination
of this Agreement under Section 7.1 will be effective immediately upon the
delivery of a valid written notice of the terminating party to the other parties
hereto, subject, if applicable, to the 30-day cure period under Sections 7.1(c)
and 7.1(d). In the event of the termination of this Agreement under Section 7.1,
this Agreement shall be void and of no further force or effect, with no
liability on the part of any party hereto, except that (a) Section 5.3(b), this
Section 7.2, Section 7.3 and Article VIII shall survive the termination of this
Agreement and (b) nothing in this Agreement shall relieve any party from
liability for any willful breach of this Agreement or willful failure to perform
its obligations under this Agreement. For the avoidance of doubt, the parties
hereto acknowledge and agree that termination of this Agreement by the Seller
pursuant to Section 7.1(e) shall not, by itself, constitute a breach of this
Agreement; provided, however, that any such termination shall not preclude the
possibility that there has separately been a willful breach of this Agreement.
No termination of this Agreement shall affect the obligations of the parties
contained in any confidentiality agreement entered into between the Seller, on
the one hand, and the Buyers or any of their Affiliates, on the other hand, all
of which obligations shall survive termination of this Agreement in accordance
with their terms.
36
Section 7.3 Fees and Expenses.
(a) Except as otherwise set forth in this Section 7.3, all fees and
expenses incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the party incurring such expenses, whether
or not the Share Purchase is consummated.
(b) All filing fees payable in connection with obtaining any Necessary
Consents and Filings shall be paid by the Buyers.
(c) The Seller shall pay, or cause to be paid, to the Buyers by wire
transfer of immediately available funds to an account specified jointly by the
Buyers in an amount equal to the sum of (x) US $4,450,000 and (y) the documented
out-of-pocket fees and expenses (in an amount not to exceed US $2,000,000)
incurred by or on behalf of the Buyers in connection with the due diligence
process and the negotiation, execution and delivery of this Agreement:
(i) if this Agreement is terminated pursuant to Section 7.1(e), in
which case payment shall be made prior to or concurrently with such termination;
or
(ii) if (A) the Buyers, acting jointly, or the Seller terminate this
Agreement pursuant to Section 7.1(b)(iii), (B) a bona fide Acquisition Proposal
was publicly announced and was outstanding (and not withdrawn) at the time of
the Stockholders' Meeting and (C) the Seller consummates a transaction with
respect to such Acquisition Proposal within one (1) year of such termination, in
which case payment shall be made within two (2) Business Days of the
consummation of such transaction; or
(iii) if the Buyers, acting jointly, terminate this Agreement pursuant
to Section 7.1(d) as a result of a willful breach by the Seller of any (x)
material representation or warranty of the Seller or (y) material covenant of
the Seller contained in this Agreement, in which case payment shall be made
within two (2) Business Days of such termination.
(d) The Seller shall pay, or cause to be paid, to the Buyers by wire
transfer of immediately available funds to an account specified jointly by the
Buyers an amount equal to the documented out-of-pocket fees and expenses (in an
amount not to exceed US $2,000,000) incurred by or on behalf of the Buyers in
connection with the due diligence process and the negotiation, execution and
delivery of this Agreement if the Buyers, acting jointly, or the Seller
terminate this Agreement pursuant to Section 7.1(b)(iii); provided, however,
that any amounts paid pursuant to this Section 7.3(d) shall be credited against
any amounts that may subsequently become payable pursuant to Section 7.3(c)(ii).
Section 7.4 Amendment. Subject to applicable laws, this Agreement may be
amended by the parties hereto, by action taken or authorized by their respective
boards of directors, at any time before or after the Requisite Seller Vote is
obtained; provided, after any such approval, no amendment shall be made which,
under applicable laws or in accordance with the rules of any relevant stock
exchange, requires further approval by such stockholders without such further
stockholder approval. This Agreement may not be amended except by execution of
an instrument in writing signed on behalf of each of the Buyers and the Seller.
37
Section 7.5 Extension; Waiver. At any time prior to the Closing Date and
subject to applicable laws, any party hereto, by action taken or authorized by
its board of directors, may: (a) extend the time for the performance of any of
the obligations or other acts of the other parties hereto; (b) waive any
inaccuracies in the representations and warranties made to such party in this
Agreement or in any document delivered pursuant hereto; and (c) waive compliance
with any of the agreements or conditions for the benefit of such party contained
in this Agreement. Any agreement on the part of a party hereto to any such
extension or waiver shall be valid only if set forth in an instrument in writing
signed on behalf of such party. Delay in exercising any right under this
Agreement shall not constitute a waiver of such right.
ARTICLE VIII
MISCELLANEOUS
Section 8.1 Non-Survival of Representations and Warranties. The
representations and warranties contained in this Agreement, or in any instrument
delivered pursuant to this Agreement, shall terminate on the Closing Date, and
only the covenants or agreements that by their terms survive the Closing Date
shall survive the Closing Date.
Section 8.2 Notices. All notices and other communications under this
Agreement shall be in writing and shall be deemed duly given (i) on the date of
delivery if delivered personally, (ii) on the date of confirmation of receipt
(or, the first Business Day following such receipt if the date is not a Business
Day) of transmission by facsimile or (iii) on the date of confirmation of
receipt (or, the first Business Day following such receipt if the date is not a
Business Day) if delivered by a nationally-recognized courier service. All
notices or other communications hereunder shall be delivered as set forth below,
or pursuant to such other instructions as may be designated in writing by the
party to receive such notice:
(a) if to the Buyers, to:
First National Holding S.A.
0X, Xxxxxxxxx xx Xxxxxx Xxxxx
X-0000 Xxxxxxxxxx
Attention: Claus Abildstrom
Fax: 000 00 000 000 00
and:
38
Emergent Telecom Ventures S.A.
00, xxx xx Xxxxx
Xxxxxx 0000
Xxxxxxxxxxx
Attention: Xxxxxxx Xxxxxx
Fax: 000 00 00 000 0000
and:
Pisces Investment Limited
c/o Trident Trust
Theklas Lyssioti, 00
Xxxxxxxxx Xxxxxx, 0xx Xxxxx
Office 201/202
P.C. 3030
Limassol, Cyprus
Attention: Xxxxxxx Xxxxxx
Fax: 000 000 000 000 00
with a copy to:
Xxxxxxxxx Xxxxxxx Xxxxx & Xxxxxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxx, Esq.
Fax: (000) 000-0000
(b) if to the Seller, to:
Metromedia International Group, Inc.
0000 Xxxxx Xxxxx Xxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: General Counsel
Facsimile: (000) 000-0000
with a copy to:
Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000-0000
Attention: Xxxxx X. Xxxxx, Esq.
Xxxxxxx X. Xxxxxx, Esq.
Facsimile: (000) 000-0000
Section 8.3 Interpretation. When a reference is made in this Agreement to
Exhibits, such reference shall be to an Exhibit to this Agreement unless
otherwise indicated. When a reference is made in this Agreement to Articles or
Sections, such reference shall be to an Article or Section of this Agreement
unless otherwise indicated. For purposes of this Agreement, the words "include,"
"includes" and "including" shall be deemed in each case to be followed by the
words "without limitation." The table of contents and headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement. Any statute, regulation, or other
law defined or referred to herein (or in any agreement or instrument that is
referred to herein) means such statute, regulation or other law as, from time to
time, may be amended, modified or supplemented, including (in the case of
statutes) by succession of comparable successor statutes. References to a Person
also refer to its predecessors and permitted successors and assigns.
39
Section 8.4 Entire Agreement; Third-Party Beneficiaries. This Agreement and
the documents and instruments and other agreements among the parties hereto as
contemplated by or referred to herein, including the Seller Disclosure Letter
and the Buyers Disclosure Letter, (a) constitute the entire agreement among the
parties with respect to the subject matter hereof and supersede all prior
agreements and understandings, both written and oral, among the parties with
respect to the subject matter hereof, it being understood that any
confidentiality agreement entered into between the Seller and any other party or
any affiliate of any other party hereto shall continue in full force and effect
until the Closing and shall survive any termination of this Agreement, and (b)
are not intended to confer upon any other Person any rights or remedies
hereunder, except as specifically provided in the following sentence. The
provisions of Section 5.9 are intended to be for the benefit of, and shall be
enforceable by, the Employees and their respective heirs and personal
representatives, and shall be binding on the Buyers and their successors and
assigns. In the event the Buyers or one of their respective successors or
assigns (i) consolidates with or merges into any other Person and shall not be
the continuing or surviving corporation or entity in such consolidation or
merger or (ii) transfers all or substantially all of its properties and assets
to any Person, then, and in each case, proper provision shall be made so that
the successors or assigns of such Buyer, as the case may be, honor the
obligations set forth in Section 5.9.
Section 8.5 Severability. In the event that any provision of this Agreement
or the application thereof becomes or is declared by a court of competent
jurisdiction to be void or unenforceable, the remainder of this Agreement will
continue in full force and effect and the application of such provision to other
Persons or circumstances will be interpreted so as reasonably to effect the
intent of the parties to this Agreement. The parties hereto further agree to
replace any such void or unenforceable provision of this Agreement with a valid
and enforceable provision that will achieve, to the greatest extent possible,
the economic, business and other purposes of such void or unenforceable
provision.
Section 8.6 Other Remedies; Specific Performance.
(a) Other Remedies. Except as otherwise provided in this Agreement, any and
all remedies herein expressly conferred upon a party will be deemed cumulative
with, and not exclusive of, any other remedy conferred hereby, or by law or
equity upon such party, and the exercise by a party of any one remedy will not
preclude the exercise of any other remedy. The parties agree that irreparable
damage would occur in the event that any of the provisions of this Agreement
were not performed in accordance with their specific terms or were otherwise
breached.
40
(b) Specific Performance. It is accordingly agreed that the parties hereto
shall be entitled to seek an injunction or injunctions to prevent breaches of
this Agreement and to enforce specifically the terms and provisions of this
Agreement in any court of the United States or any state having jurisdiction,
this being in addition to any other remedy to which they are entitled at law or
in equity.
Section 8.7 Governing Law; Jurisdiction. This Agreement shall be governed
by and construed in accordance with the laws of the State of Delaware, without
regard to principles of conflict of laws. The parties hereto hereby declare that
it is their intention that this Agreement shall be regarded as made under the
laws of the State of Delaware and that the laws of said State shall be applied
in interpreting its provisions in all cases where legal interpretation shall be
required. Each of the parties hereto: (a) agrees that this Agreement involves at
least $100,000.00, (b) agrees that this Agreement has been entered into by the
parties hereto in express reliance upon 6 Del. C. ss. 2708, (c) irrevocably and
unconditionally submits to the exclusive jurisdiction of the courts of the State
of Delaware and of the federal courts sitting in the State of Delaware with
respect to all actions and proceedings arising out of or relating to this
Agreement and the transactions contemplated hereby; (d) agrees that all claims
with respect to any such action or proceeding shall be heard and determined in
such courts and agrees not to commence any action or proceeding relating to this
Agreement or the transactions contemplated hereby except in such courts; (e)
irrevocably and unconditionally waives any objection to the laying of venue of
any action or proceeding arising out of this Agreement or the transactions
contemplated hereby and irrevocably and unconditionally waives the defense of an
inconvenient forum; (f) irrevocably appoints The Corporation Trust Company in
the case of each Buyer and the Corporation Service Company in the case of the
Seller as its agent for the sole purpose of receiving service of process or
other legal summons in connection with any such dispute, litigation, action or
proceeding brought in such courts and agrees that it will maintain The
Corporation Trust Company in the case of each Buyer and the Corporation Service
Company in the case of the Seller at all times as its duly appointed agent in
the State of Delaware for the service of any process or summons in connection
with any such dispute, litigation, action or proceeding brought in such courts
and, if it fails to maintain such an agent during any period, any such process
or summons may be served on it by mailing a copy of such process or summons to
it in accordance with, and in the manner provided in, Section 8.2 hereof, with
such service deemed effective on the fifth day after the date of such mailing;
and (g) agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law.
41
Section 8.8 Rules of Construction. The parties to this Agreement agree that
they have been represented by counsel during the negotiation and execution of
this Agreement and, therefore, waive the application of any Legal Requirement or
rule of construction providing that ambiguities in an agreement or other
document will be construed against the party drafting such agreement or
document.
Section 8.9 The Buyer Disclosure Letter and Seller Disclosure Letter. The
Buyer Disclosure Letter and Seller Disclosure Letter is qualified in its
entirety by reference to the specific provisions of this Agreement and nothing
in the Buyer Disclosure Letter or Seller Disclosure Letter is intended to
broaden the scope of any representation or warranty contained in this Agreement
or to create any representation, warranty, agreement or covenant on the part of
the Seller. The inclusion of any matter, information, item or other disclosure
set forth in any section of the Buyer Disclosure Letter or Seller Disclosure
Letter shall not be deemed to constitute an admission of any liability of the
Buyers or the Seller to any third party or otherwise imply that such matter,
information or item is material or creates a measure for materiality for
purposes of this Agreement, is required to be disclosed under this Agreement, or
has had or would reasonably be expected to have a material adverse effect on the
business, assets, properties, liabilities, conditions, financial or otherwise,
or results of operations of the Seller or the Buyers, as the case may be.
Certain matters disclosed in the Buyer Disclosure Letter and Seller Disclosure
Letter are not material and/or have been disclosed for informational purposes
only.
Section 8.10 Limitations on Warranties.
(a) Except for the representations and warranties contained in this
Agreement and any agreements or certificates delivered pursuant to this
Agreement, the Seller makes no other express or implied representation or
warranty to the Buyers. Each of the Buyers acknowledges that, in entering into
this Agreement, it has not relied on any representations or warranties of the
Seller other than the representations and warranties of the Seller set forth in
this Agreement or any agreements or certificates delivered pursuant to this
Agreement.
(b) Except for the representations and warranties contained in this
Agreement and any agreements or certificates delivered pursuant to this
Agreement, the Buyers make no other express or implied representation or
warranty to the Seller. The Seller acknowledges that, in entering into this
Agreement, it has not relied on any representations or warranties of any of the
Buyers other than the representations and warranties of the Buyers set forth in
this Agreement or any agreements or certificates delivered pursuant to this
Agreement.
Section 8.11 Assignment. No party may assign either this Agreement or any
of its rights, interests or obligations hereunder without the prior written
approval of the other parties; provided, however, that the Buyers may assign any
or all of Pisces' rights and interests hereunder to one or more of their
controlled Affiliates formed solely for the purposes of engaging in the
transactions contemplated by this Agreement, and may designate such Person to
perform Pisces' obligations hereunder; provided, further that such assignment is
made ten Business Days in advance of the mailing of the Proxy Statement to the
Seller's stockholders. Any purported assignment in violation of this Section
8.11 shall be void. Subject to the preceding sentence, this Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective successors and permitted assigns.
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Section 8.12 Waiver of Jury Trial. EACH OF THE BUYERS AND THE SELLER HEREBY
IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE ACTIONS OF THE BUYERS OR THE SELLER IN THE
NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT HEREOF.
Section 8.13 Counterparts. This Agreement may be executed in two or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other parties, it being understood that all
parties need not sign the same counterpart.
[Remainder of page intentionally left blank]
43
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
THE BUYERS:
----------
EMERGENT TELECOM VENTURES S.A.
By: /s/ Xxxxxxx Xxxxxx
--------------------------------
Name: Xxxxxxx Xxxxxx
Title: Director
FIRST NATIONAL HOLDING S.A.
By: /s/ Claus Abildstrom
--------------------------------
Name: Claus Abildstrom
Title: Attorney In Fact
PISCES INVESTMENT LIMITED
By: /s/ Xxxxxxx Xxxxxx
--------------------------------
Name: Xxxxxxx Xxxxxx
Title: Director
THE SELLER:
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METROMEDIA INTERNATIONAL GROUP, INC.
By: /s/ Xxxx X. Xxxx
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Name: Xxxx Xxxx
Title: Chairman & CEO
44
Exhibit 2.3
Purchase Price
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Payee Wire Transfer Instructions
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Metromedia International Group,
Inc.
