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STOCK PURCHASE AGREEMENT
between
NEWS AMERICA INCORPORATED
and
CABLE AND WIRELESS PLC
Dated April 19, 1998
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TABLE OF CONTENTS
Page
ARTICLE I SALE OF STOCK; CONSIDERATION
1.1. Sale by C&W.......................................2
1.2. Consideration for the Sale by C&W.................2
ARTICLE II THE CLOSING
2.1. Time and Place of Closing.........................3
2.2. Deliveries by C&W.................................3
2.3. Deliveries by Buyer...............................3
ARTICLE III REPRESENTATIONS AND WARRANTIES OF C&W
3.1. Organization......................................4
3.2. Authority Relative to this Agreement and the
Ancillary Agreements..............................4
3.3. Title. ...........................................5
3.4. Consents and Approvals; No Violation..............5
3.5. Financial Statements; Undisclosed Liabilities.....6
3.6. Absence of Certain Changes or Events..............7
3.7. Legal Proceedings, etc............................9
3.8. Fees and Commissions..............................9
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF BUYER
4.1. Organization. ....................................9
4.2. Authority Relative to this Agreement. ............9
i
4.3. Consents and Approvals; No Violation.............10
4.4. Fees and Commissions.............................10
4.5. Investment Intent. ..............................10
ARTICLE V COVENANTS OF THE PARTIES
5.1. Conduct of Business of Holdings..................11
5.2. Expenses.........................................11
5.3. Further Assurances...............................12
5.4. Public Statements................................12
5.5. Consents and Approvals...........................12
[5.6. Transfer of Complus Enterprises Holding S.A......13
5.7. HSR Act..........................................13
5.8 Supplements to Schedules.........................13
ARTICLE VI CLOSING CONDITIONS
6.1. Conditions to Each Party's Obligations to Effect
the Transactions Contemplated Hereby.............14
6.2. Conditions to Obligations of Buyer...............14
6.3. Conditions to Obligations of C&W. ...............16
ARTICLE VII TERMINATION AND ABANDONMENT
7.1. Termination......................................17
7.2. Procedure and Effect of Termination..............18
ARTICLE VIII SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION
8.1. Survival of Representations.....................18
8.2. Limitations on C&W Representations and Warranties;
ii
Investigation....................................18
8.3. C&W's Indemnification of Buyer...................19
8.4. Buyer's Indemnification of C&W...................19
8.5. Conditions of Indemnification....................20
8.6. Cushion..........................................21
8.7. Limitation of Liability..........................21
8.8. Remedies Cumulative..............................21
8.9. Assignment of Certain Representations, Warranties
and In demnification Rights......................21
ARTICLE IX.MISCELLANEOUS PROVISIONS
9.1. Amendment and Modification. .....................22
9.2. Waiver of Compliance; Consents...................22
9.3. Notices..........................................22
9.4. Assignment.......................................24
9.5. Confidentiality..................................24
9.6. Governing Law....................................25
9.7. Counterparts.....................................25
9.8. Interpretation...................................25
9.9. Entire Agreement.................................25
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STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT (this "Agreement"), dated
April 19, 1998, by and between:
News America Incorporated, a Delaware corporation
("Buyer"), with an address at 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, and
Cable and Wireless plc, a company registered under the
laws of England under the number 238525 ("C&W"), with an address
at 000 Xxxxxxxxx Xxxx, Xxxxxx XX0X 0XX.
W I T N E S S E T H:
WHEREAS, (a) Navona Communications Corporation Ltd. (a
direct wholly owned subsidiary of C&W), a corporation organized
under the laws of Bermuda ("Navona"), owns (i) 10,055,739 shares
of common stock, par value USD$.01 per share ("PLD Common
Stock"), of PLD Telekom Inc., a corporation organized under the
laws of Delaware ("PLD"), constituting as of April 16, 1998
approximately 30.17% of the presently issued and outstanding
capital stock of PLD (the "PLD Shares"), and (ii) 12,000 shares
of common stock, par value USD$1.00 per share, of PLD Holdings
Ltd., a limited liability company organized under the laws of
Bermuda ("Holdings"), constituting 100% of the issued and
outstanding capital stock of Holdings (the "Holdings Shares"),
which is the owner of eleven percent (11%) of the outstanding
common equity interests in PeterStar Company Limited, a closed
joint stock company organized under the laws of the Russian
Federation ("PeterStar"); and (b) C&W owns a warrant dated June
28, 1995, confer ring on C&W the right to purchase PLD Common
Stock, a copy of which is attached hereto as Exhibit A (the "PLD
Warrant"; the PLD Warrant and the PLD Shares are collectively
referred to herein as the "Pre-Exchange PLD Interest") and
WHEREAS, C&W also owns 100 shares of common stock, par
value 000 Xxxxxxxxxxx Guilders per share, of CommStruct
International Byelorussia B.V., a closed limited liability
company organized under the laws of The Netherlands ("CIBBV"),
constituting 100% of the issued and outstanding capital stock of
CIBBV (the "CIBBV Shares"); and
WHEREAS, C&W and PLD are agreeing (the "CIBBV Exchange
Agreement"), substantially simultaneously with the execution and
delivery of this
Agreement, on the terms and conditions upon which C&W will
exchange the CIBBV Shares, together with certain indebtedness
owed to C&W by CIBBV, with PLD for 500,000 newly issued shares of
PLD Common Stock (the "CIBBV Exchange Shares"), which exchange
will be completed prior to the consummation of the transactions
contemplated by this Agreement; and
WHEREAS, C&W desires to sell and transfer, or to cause
the sale and transfer, to Buyer, and Buyer desires to purchase,
the Pre-Exchange PLD Interest and the CIBBV Exchange Shares
(collectively, the "PLD Interest") and the Holdings Shares, as
more specifically provided herein;
NOW, THEREFORE, in consideration of the premises and
the mutual covenants and agreements hereinafter set forth, the
parties, intending to be legally bound, hereby agree as follows:
ARTICLE I
SALE OF STOCK; CONSIDERATION
I.1. Sale by C&W. Upon the terms and subject to the
satisfaction of the conditions contained in this Agreement and
the delivery to C&W of good title to the CIBBV Exchange Shares,
C&W agrees to sell, assign, transfer and deliver to Buyer the
CIBBV Exchange Shares and the PLD Warrant and to cause Navona to
sell, assign, transfer and deliver the PLD Shares and the
Holdings Shares to Buyer, and Buyer agrees to purchase and
acquire, (a) all of the right, title and interest of C&W in and
to the CIBBV Exchange Shares and the PLD Warrant and (b) all of
the right, title and interest of Navona in and to the PLD Shares
and the Holdings Shares.
I.2. Consideration for the Sale by C&W. (a) On the
Closing Date (as hereinafter defined) and upon the terms and
subject to the satisfaction of the conditions contained in this
Agreement, in consideration of the aforesaid sale, assignment,
transfer and delivery of the PLD Interest and the Holdings
Shares, Buyer will pay, or cause to be paid, to C&W or its
written designee, by interbank transfer of immediately available
funds an amount equal to Eighty Million United States dollars
(USD$80,000,000) (the "Purchase Price").
ARTICLE II
THE CLOSING
II.1. Time and Place of Closing. Subject to the terms
and conditions of this Agreement, the consummation of the
transaction contemplated hereby (the "Closing") shall take place
at the offices of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, 000
Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 on the third business day
after Buyer shall have delivered to C&W written notice that the
conditions set forth in Section 6.2 hereof have been satisfied
(the "Closing Date") or at such other time and place as shall be
determined by mutual agreement of the parties.
II.2. Deliveries by C&W. At the Closing, C&W will
deliver or cause to be delivered the following to Buyer:
(a) Stock certificates representing all of the
PLD Shares and the Holdings Shares and the certificate or other
instrument representing the PLD Warrant, each duly endorsed in
blank or accompanied by duly executed instruments of transfer,
together with any other documents that are necessary to transfer
to Buyer good and marketable title to the PLD Shares, the PLD
Warrant, the CIBBV Ex change Shares and the Holdings Shares, as
the case may be;
(b) the Officer's Certificate referred to in
Section 6.2(f) hereof;
(c) the Opinion of Counsel referred to in Section
6.2(g) hereof; and
(d) such other documents, instruments and
writings as are required to be delivered by C&W at or prior to
the Closing Date pursuant to this Agreement or otherwise
reasonably required in connection herewith.
II.3. Deliveries by Buyer. At the Closing, Buyer will
deliver the following to C&W:
(a) the Purchase Price by interbank transfer of
immediately available funds;
(b) the Officer's Certificate referred to in
Section 6.3(c) hereof;
(c) the Opinion of Counsel referred to in Section
6.3(d) hereof; and
(d) such other documents, instruments and
writings as are required to be delivered by Buyer at or prior to
the Closing Date pursuant to this Agreement or otherwise
reasonably required in connection herewith.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF C&W
C&W represents and warrants to Buyer as follows:
III.1. Organization. (a) C&W is a public limited
company duly organized and validly existing under the laws of
England and has all requisite power to enter into this Agreement
and to dispose, or to cause Navona to dispose, of the PLD Shares
and the Holdings Shares in accordance with this Agreement and to
perform its obligations hereunder.
(b) Navona is a corporation duly organized and validly
existing under the laws of Bermuda and has all requisite power to
dispose or cause the disposition of the PLD Shares and the
Holdings Shares in accordance with this Agreement and to perform
its obligations hereunder.
III.2. Authority Relative to this Agreement and the
Ancillary Agreements. C&W and Navona each has full corporate
power and authority to execute, deliver and perform its
obligations under this Agreement and the CIBBV Exchange Agreement
and to perform its obligations hereunder and thereunder. The
execution and delivery of this Agreement and the CIBBV Exchange
Agreement and the performance of its obligations hereunder and
thereunder have been duly and validly authorized by C&W and
Navona, and no other corporate proceedings on the part of C&W or
Navona are necessary to authorize this Agreement or the
performance of its obligations hereunder and thereunder. This
Agreement and the CIBBV Exchange Agreement have each been duly
and validly executed and delivered by C&W, and, assuming that
this Agreement and the CIBBV Exchange Agreement each constitutes
a valid and binding agreement of Buyer and each other party
thereto, constitutes a valid and binding agreement of C&W,
enforceable against C&W in accordance with its terms, except that
such enforceability may be limited by applicable bankruptcy,
insolvency, moratorium or other similar laws affecting or
relating to enforcement of creditors' rights generally or general
principles of equity.
III.3. Title. C&W indirectly through Navona
owns the Pre-Exchange PLD Interest and the Holdings Shares and
will, upon the completion of the sale and exchange transactions
under the CIBBV Exchange Agreement, own the
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CIBBV Exchange Shares, in each case free and clear of all
pledges, security interests, liens, charges, encumbrances,
claims, options or limitations affecting its ability to vote such
shares or to transfer such shares to Buyer or to exercise any
other rights appurtenant thereto. Except (a) for the PLD Interest
and the Holdings Shares that are the subject of this Agreement
and (b) such agreements, contracts, instruments, arrangements or
understandings to which PLD or any of its direct or indirect
subsidiaries, but not C&W or Navona, is a party, neither C&W nor
any of its direct or indirect subsidiaries owns any shares or
other equity interests in, or is a party to any agreement,
contract, instrument, arrangement or understanding enabling a
party upon notice, exercise or conversion to acquire shares or
other equity interests in, PLD or Holdings. Except as set forth
in Schedule 3.3, Holdings does not own any material assets other
than its equity interest in PeterStar and does not have any
material liabilities (for purposes of this sentence, assets or
liabilities individually or in the aggregate exceeding US$500,000
shall be deemed "material"). At the Closing, Buyer will acquire
good title to the PLD Interest and the Holdings Shares, free and
clear of all pledges, security interests, liens, charges,
encumbrances, claims, options or limitations of any nature
whatsoever. At or prior to the Closing Date all agree ments
between Holdings on the one part and any direct or indirect
parent of Holdings on the other part shall have been terminated
without any residual liability on the part of Holdings
thereunder. Except for this Agreement and the CIBBV Exchange
Agreement and their respective obligations thereunder, neither
C&W nor Navona has entered into any subscription, option,
warrant, call, right, agreement or under standing for the sale,
delivery, assignment or transfer by C&W or Navona of the PLD
Interest, the Holdings Shares or the interest held by Holdings
directly in PeterStar.
III.4. Consents and Approvals; No Violation.
(a) Except as set forth in Schedule 3.4, neither
the execution and delivery of this Agreement and the CIBBV
Exchange Agreement by C&W, nor the sale by C&W or Navona of the
PLD Interest or the Holdings Shares pursuant to this Agreement,
will (i) conflict with or result in any breach of any provision
of the Articles of Incorporation or Bylaws, or similar charter
documents, of C&W, Navona or Holdings, (ii) other than as may be
required as a result of the identity of Buyer or any of Buyer's
successors or assigns, require any consent, approval,
authorization or permit of, or filing with or notification to,
any governmental or regulatory authority to be made or obtained
by C&W, Navona or Holdings, (iii) result in a default (or give
rise to any right of termination, cancellation or acceleration)
under any of the terms, conditions or provisions of any note,
bond, mortgage, indenture, license, agreement or other instrument
or obligation to which C&W, Navona or Holdings or
5
by which C&W, Navona or Holdings or any of their respective
assets (except that no representation or warranty is made as to
any note, bond, mortgage, indenture, license, agreement or other
instrument or obligation to which PLD, PeterStar or Belcel, but
not C&W, Navona or Holdings, is a party or by which PLD,
PeterStar or Belcel, but not C&W, Navona or Holdings, are bound)
may be bound, except for such defaults (or rights of termination,
cancellation or acceleration) as to which requisite waivers or
consents have been obtained, or (iv) violate any order, writ,
injunction, decree, statute, rule or regulation applicable to
C&W, Navona or Holdings or any of their respective assets (except
that no representation or warranty is made as to any order, writ,
injunction, decree, statute, rule or regulation applicable to
PLD, PeterStar or Belcel, but not C&W, Navona or Holdings).
(b) Except as set forth in Schedule 3.4 and
except for the filings by Buyer and PLD required by Title II of
the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as
amended (the "HSR Act"), it is not necessary for C&W or Navona to
make any declaration, filing or registration with, or to give
notice to, or to receive the authorization, consent or approval
of, any governmental or regulatory body or authority for the
consummation by C&W and Navona of the transactions contemplated
hereby.
III.5. Financial Statements; Undisclosed Liabilities;
Certain Tax Matters.
(a) C&W has previously furnished to Buyer copies
of Hold ings' audited (i) balance sheets as of December 31, 1997
and (ii) related audited statements of income and retained
earnings and changes in financial position of Holdings for the
fiscal year then ended, together with the report thereon of KPMG
Audit plc, independent auditors (subject, in the case of the
final signature on such audit and report, to the information set
forth in Schedule 3.5). To the Knowledge of C&W (as the term
"Knowledge" is defined in Section 8.3 hereof), such financial
reports present fairly the financial information purported to be
set forth therein as of the dates, or for the periods, described
therein, all in conformity with the accounting principles
described therein.
(b) Except as set forth in Schedule 3.5, to the
Knowledge of C&W, as of the date of the Holdings balance sheet
referred to in Section 3.5(a)(i) hereof, Holdings has no material
liability or obligation, secured or unsecured (whether absolute,
accrued, contingent or otherwise, and whether due or to become
due), of a nature required by generally accepted accounting
principles to be reflected in a corporate balance sheet or
disclosed in the notes thereto, which is not accrued or reserved
against in the financial reports referred to in Section 3.5(a)
hereof or
6
disclosed in the notes thereto in accordance with generally
accepted accounting principles.
III.6. Absence of Certain Changes or Events. Except as
set forth in Schedule 3.6, since the date of the financial
reports referred to in Section 3.5(a) hereof, to the Knowledge of
C&W there has not been:
(a) any material adverse change in the business,
prospects, operations, properties, assets, liabilities,
competition, earnings, or condition (xxxxx cial or otherwise), of
Holdings or any failure by Holdings to pay its debts when due;
(b) any event or condition of any character
which, either individually or in the aggregate, might reasonably
be expected to have a material adverse effect on the business,
prospects, operations, properties, assets, liabilities,
competition, earnings or condition (financial or otherwise), of
Holdings;
(c) any damage, destruction or loss (regardless
of whether covered by insurance) that might reasonably be
expected to have a material adverse effect on the business,
prospects, operation, properties, assets, liabilities, competi
tion, earnings, or condition (financial or otherwise), of
Holdings;
(d) any declaration, setting aside or payment of
any dividend or other distribution (whether in cash, stock,
property, or any combination of the foregoing) with respect to
the capital stock of Holdings except as specifically provided for
in this Agreement;
(e) any increase in the compensation paid,
payable or to become payable by Holdings to its officers,
directors or employees (other than increases for employees in the
ordinary course of business and consistent with past practice),
any hiring of new officers, directors or employees (other than
hiring of new employees in the ordinary course of business
consistent with past practice) or any increase in any bonus,
insurance, pension or other employee benefit plan, payments or
arrangement (including loans) made to, for or with any officers,
directors, or employees (other than increases for employees in
the ordinary course of business and consistent with past practice
or other increases pursuant to written employee benefit plans);
(f) any entry into, material amendment of, or
termination of, any material agreement, material commitment or
material transaction by Holdings, including, without limitation,
any (i) merger, consolidation, share exchange, acquisi tion or
disposition of assets or stock or any financing transaction or
capital expendi ture, (ii) indenture, mortgage, note, agreement
or other instrument relating to the
7
borrowing of money (other than intercompany accounts), (iii)
partnership or joint venture agreement, (iv) material license
agreement relating to intellectual property (other than
off-the-shelf software licenses), or (v) agreement to amend its
charter or other organizational documents or any other document,
contract, agreement, arrange ment, undertaking or instrument
relating to any of the foregoing;
(g) any entry into, material change to the terms
or conditions of or termination of, any license, permit
franchise, governmental approval or decree pursuant to which
Holdings provides telephony, data transmission or other telecom
munications services of any kind or character;
(h) any notes or accounts receivable or portions
of notes or accounts receivable written off by Holdings as
uncollectible, other than in the ordinary course of business and
consistent with past practice;
(i) any material obligation or material liability
paid (whether absolute, accrued, contingent or otherwise), or any
lien or encumbrance in connec tion therewith discharged, by
Holdings, other than (i) in the ordinary course of business and
consistent with past practice, or (ii) current liabilities shown
on the financial reports referred to in Section 3.5(a) hereof and
current liabilities incurred since their date;
(j) any mortgage, pledge or security interest,
lien or encum brance created in or with respect to any property
or assets, real, personal or mixed, tangible or intangible, of
Holdings;
(k) except as specifically provided for in this
Agreement, any sale, assignment, transfer, lease, dividend,
distribution or other disposition of any property or assets by
Holdings other than in the ordinary course of business; or
(l) any agreement, understanding or undertaking
to do any of the foregoing by Holdings;
provided, that the representations and warranties set forth in
this Section 3.6 with respect to the business, operations,
properties, assets, liabilities, competition, earnings, or
condition (financial or otherwise) of Holdings shall not be
deemed to be representations or warranties as to the business,
operations, properties, assets, liabilities, competition,
earnings, or condition (financial or otherwise) of PLD or
PeterStar and for the avoidance of doubt, the occurrence of any
of the matters referred to in (a) through (l) above in relation
to PeterStar shall not be a breach of the representations and
warranties relating to Holdings set forth in (a) through (l)
above.
III.7. Legal Proceedings, etc. Except as set forth in
Schedule 3.7, to the Knowledge of C&W, there are no claims,
actions, or
8
proceedings pending or investigation pending or threatened
against or relating to Holdings before any court, governmental or
regulatory authority or body acting in an adjudicative capacity.
Except as set forth in Schedule 3.7, to the knowledge of C&W,
Holdings is not subject to any outstanding judgment, rule, order,
writ, injunction or decree of any court, governmental or
regulatory authority.
III.8. Fees and Commissions. Except as previously
disclosed by C&W to Buyer in writing, no broker, finder or other
person is entitled to any brokerage fees, commissions or finder's
fees in connection with the transaction contemplated hereby by
reason of any action taken by C&W. C&W hereby covenants that it
will pay to Buyer or otherwise discharge, and will indemnify and
hold Buyer harmless from and against, any and all claims or
liabilities for all brokerage fees, commissions and finder's fees
(other than as described above) incurred by reason of any action
taken by C&W.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to C&W as follows:
IV.1. Organization. Buyer is a corporation duly
organized, validly existing and in good standing under the laws
of the State of Delaware. Buyer has heretofore delivered to C&W
complete and correct copies of its Certificate of Incorporation
and By-Laws as currently in effect.
IV.2. Authority Relative to this Agreement and the
Buyer Ancillary Agreements. Buyer has full power and authority to
execute, deliver and perform all obligations under this
Agreement, the Asset Exchange Agreement referred to in Section
8.8 hereof and the Director Nomination Agreement referred to in
Section 6.2(e) hereof (collectively, the "Buyer Ancillary
Agreements") and to consummate the transactions contemplated
hereby and thereby. The execution and delivery of this Agreement
and the Buyer Ancillary Agreements and the performance of its
obliga tions hereunder and thereunder have been duly and validly
authorized by Buyer, and no other proceedings on the part of
Buyer are necessary to authorize this Agreement or the Buyer
Ancillary Agreements or to perform its obligations hereunder or
thereunder. This Agreement and the Buyer Ancillary Agreements (in
the case of the Buyer Ancillary Agreements, in the form delivered
to C&W on the date hereof) have been duly and validly executed
and delivered by Buyer, and assuming that this Agreement and each
such Buyer Ancillary Agreement to which it is a party consti-
9
tutes a valid and binding agreement of C&W or the relevant party
to the Buyer Ancillary Agreements, constitutes a valid and
binding agreement of Buyer, enforce able against Buyer in
accordance with its terms, except that such enforceability may be
limited by applicable bankruptcy, insolvency, moratorium or other
similar laws affecting or relating to enforcement of creditors'
rights generally or general principles of equity.
IV.3. Consents and Approvals; No Violation. (a) Except
as set forth in Schedule 4.3, neither the execution and delivery
of this Agreement nor the Buyer Ancillary Agreements by Buyer nor
the purchase by the Buyer or its permitted designee or assignee
as provided in Section 9.4 hereof of the PLD Interest and the
Holdings Shares pursuant to this Agreement, or the performance of
the Buyer Ancillary Agreements, will (i) conflict with or result
in any breach of any provision of the Certificate of
Incorporation or By-Laws of Buyer, (ii) require any consent,
approval, authorization or permit of, or filing with or
notification to, any governmental or regulatory authority, or
(iii) result in a default (or give rise to any right of
termination, cancellation or acceleration) under any of the
terms, conditions or provisions of any note, bond, mortgage,
indenture, agreement, lease or other instrument or obligation to
which Buyer or any of its subsidiaries are a party or by which
any of their respective assets may be bound, except for such
defaults (or rights of termination, cancellation or acceleration)
as to which requisite waivers or consents have been obtained.
(b) Except for the filings by Buyer or its
permitted designee or assignee as provided in Section 9.4 hereof
and PLD required by Title II of the HSR Act, no declaration,
filing or registration with, or notice to, or authorization,
consent or approval of any governmental or regulatory body or
authority is necessary for the consummation by Buyer of the
transactions contemplated hereby.
IV.4. Fees and Commissions. No broker, finder or other
person is entitled to any brokerage fees, commissions or finder's
fees in connection with the transaction contemplated hereby by
reason of any action taken by Buyer. Buyer hereby covenants that
it will pay to C&W or otherwise discharge, and will indemnify and
hold C&W harmless from and against, any and all claims or
liabilities for all brokerage fees, commissions and finder's fees
incurred by reason of any action taken by Buyer.
IV.5. Investment Intent. Buyer is purchasing the PLD
Interest for its own account and not with a view towards the
public sale or distribution thereof in violation of the
Securities Act.
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ARTICLE V
COVENANTS OF THE PARTIES
V.1. Conduct of Business of Holdings. Except as
described in Schedule 5.1, during the period from the date of
this Agreement to the Closing Date, C&W covenants that Holdings
will conduct its business and operations according to its
ordinary and usual course of business consistent with past
practice. Without limiting the generality of the foregoing, and,
except as contemplated in this Agreement or as described in
Schedule 5.1, prior to the Closing Date, without the prior
written consent of Buyer, C&W will not permit Holdings to:
(a) (i) create, incur or assume any amount of
indebtedness for money borrowed, other than in the ordinary
course of business, or (ii) assume, guarantee, endorse or
otherwise become liable or responsible (whether directly,
contingently or otherwise) for the obligations of any other
person except in the ordinary course of business; provided,
Holdings may endorse negotiable instruments in the ordinary
course of business;
(b) declare, set aside or pay any dividend or
other distribution (whether in cash, stock or property or any
combination thereof) in respect of its capital stock, or redeem
or otherwise acquire any shares of its capital stock;
(c) enter into any agreement, commitment or
transaction (including without limitation any borrowing, capital
expenditure or capital financing), except agreements, commitments
or transactions in the ordinary course of business or as
contemplated herein; or
(d) enter into any contract, agreement,
commitment or arrangement, whether written or oral, with respect
to any of the transactions set forth in the foregoing paragraphs
(a) through (c).
V.2. Expenses. Whether or not the transactions
contemplated hereby are consummated, all costs and expenses
incurred in connection with this Agreement and the transactions
contemplated hereby shall be borne by the party incurring such
costs and expenses.
V.3. Further Assurances. Subject to the terms and
conditions of this Agreement, each of the parties hereto will use
all reasonable efforts to take, or cause to be taken, all action,
and to do, or cause to be done, all
11
things reasonably necessary, proper or advisable under applicable
laws and regulations to consummate and make effective the sale,
assignment, transfer and delivery by C&W or Navona to Buyer or
PLD of the PLD Interest and the Holdings Shares and the interests
in PLD and PeterStar represented thereby, pursuant to this
Agreement. From time to time after the date hereof, without
further consideration, C&W and Navona will, at their own expense,
execute and deliver such documents to Buyer or PLD as Buyer or
PLD may reasonably request in order more effectively to vest in
Buyer or PLD, as the case may be, good title to the PLD Interest
and the Holdings Shares. From time to time after the date hereof,
without further consideration, Buyer will, at its own expense,
execute and deliver such documents to C&W or PLD as C&W or PLD
may reasonably request in order more effectively to consummate
the sale, assignment, transfer and delivery of the PLD Interest
and the Holdings Shares pursuant to this Agreement.
V.4. Public Statements. The parties shall consult with
each other prior to issuing any public announcement, statement or
other disclosure with respect to this Agreement or the
transactions contemplated hereby and shall not issue any such
public announcement, statement or other disclosure prior to such
consultation. Notwithstanding the foregoing, the parties may make
public announcements, statements or other disclosures with
respect to this Agreement and the transactions contemplated
hereby without such consultation to the extent and under the
circumstances in which the parties are legally compelled (by
deposition, interrogatory, request for documents, subpoena, civil
investigative demand or similar process, or by order of a court
or tribunal of competent jurisdiction) to do so, or in order to
comply with applicable rules or requirements of any stock
exchange, government department or agency or other regulatory
authority, or as required by any securities law or regulation or
other legal requirement, in any such case in circumstances where
such consultation would not be practicable.
V.5. Consents and Approvals.
(a) C&W and Buyer shall (in the case of C&W, in
relation to the consents and approvals set forth in Schedule 3.4
and any other consents and approvals required to be obtained by
C&W and, in the case of Buyer, in relation to the consents and
approvals set forth in Schedule 4.3 and any other consents and
approvals required to be obtained by Buyer) (i) promptly prepare
and file all necessary documentation, (ii) effect all necessary
applications, notices, petitions and filings and execute all
agreements and documents, (iii) use all reasonable efforts to
obtain all necessary permits, consents, approvals and
authorizations of all govern mental bodies (including, in the
case of Buyer, Buyer's and PLD's obligations to file with the
United States Federal Trade Commission and the United States
Department
12
of Justice any notifications required to be filed under the HSR
Act and the rules and regulations promulgated thereunder with
respect to the transactions contemplated hereby) and (iv) use all
reasonable efforts to obtain all necessary permits, consents,
approvals and authorizations necessary or advisable to consummate
the transactions contemplated by this Agreement or required by
the terms of any note, bond, xxxx xxxx, indenture, deed of trust,
license, franchise, permit, concession, contract, lease or other
instrument to which, in the case of C&W, C&W, Holdings or Navona
is a party or by which any of them are bound or, in the case of
Buyer, Buyer or any of its subsidiaries are a party or by which
any of them is bound. Each of Buyer and C&W will provide
reasonable assistance to the other in order to obtain the
consents and approvals referred to above. Each of C&W and Buyer
shall have the right to review, and be consulted in advance to
the extent practicable, as to all characteriza tions of the
information relating to the transactions contemplated by this
Agreement which appear in any filing made in connection with the
transactions contemplated hereby. The parties hereto agree that
they will consult with each other with respect to the obtaining
of all such necessary permits, consents, approvals and
authorizations of all third parties and governmental bodies.
(b) The parties hereto shall consult with each
other prior to proposing or entering into any stipulation or
agreement with any foreign or United States governmental
authority or agency or any third party in connection with any
foreign or United States governmental consents and approvals
legally required for the consummation of the transactions
contemplated hereby and shall not propose or enter into any such
stipulation or agreement without the other party's prior written
consent, which consent shall not be unreasonably withheld.
V.6. Transfer of Complus Enterprises Holding S.A. On,
or prior to the Closing, C&W shall have taken all action
necessary to ensure that Holdings does not, directly or
indirectly, own any shares in Complus Enterprises Holding S.A.
("Complus"). Buyer acknowledges that substantially simultaneously
with the transfer of the shares in Complus held by Holdings as
contemplated by this Section 5.6, Holdings will (a) assign to the
person to which such shares in Complus are transferred (the
"Complus Transferee") all right title and interest Holdings has
in the Share Sale and Purchase Agreement dated December 14, 1994
between Complus Holding S.A. and Holdings (the ADecember 1994
Agreement@), pursuant to which Holdings Purchased 688 shares in
Complus; and (b) irrevocably undertake to exercise its power
under Clause 4.3 of the Settlement Agreement (the "Settlement
Agreement") dated May 30, 1997 between Complus, Complus Holding,
S.A. and Holdings to direct that any amounts payable by Complus
Holding, S.A. in respect of any indebtedness or other liabilities
of or incurred by Complus shall be paid to the Complus Transferee
or such other
13
person as the Complus Transferee may direct. Notwithstanding the
provisions of clauses (a) and (b) of the immediately preceding
sentence, C&W undertakes that such assignment and undertaking
will exclude the full benefit of (i) the tax indemnity set forth
in Section 9 of the December 1994 Agreement (to the extent that
any tax liability therein referred to is imposed on or otherwise
becomes a liability of Holdings) and (ii) the indemnity in favor
of Holdings provided in Section 4.3 of the Settlement Agreement.
V.7. HSR Act. Buyer will promptly and in any event
within 5 Business Days (as defined herein) after the date hereof
make such filings as may be required to be made by it under the
HSR Act in connection with the transactions contemplated hereby.
V.8. Supplements to Schedules. C&W, on the one hand,
and Buyer, on the other hand, shall have the right from time to
time prior to the Closing to supplement or amend its Schedule
with respect to any matter hereafter arising which if existing or
known at the date of this Agreement would have been required to
be set forth or described in such Schedule. Any such supplemental
or amended disclosure shall be deemed to have cured any breach of
any representation or warranty made in this Agreement for all
purposes of this Agreement, except that notwithstanding the
immediately preceding clause no such supplemental or amended
disclosure shall be deemed to have cured any such breach made in
this Agreement and to have been disclosed as of the date of this
Agreement for purposes of determining whether or not the
conditions set forth in Article VI hereof have been satisfied.
V.9. Completion of Ancillary Agreements. Each party
will use reasonable efforts to take or cause to be taken, all
action, and do or cause to be done all things reasonably
necessary or advisable to perform their respective obligations
under, in the case of C&W, the CIBBV Exchange Agreement and, in
the case of Buyer, the Buyer Ancillary Agreements, each in the
form as executed on the date hereof.
ARTICLE VI
CLOSING CONDITIONS
VI.1. Conditions to Each Party's Obligations to Effect
the Transactions Contemplated Hereby. The respective obligations
of each party to effect the transactions contemplated hereby
shall be subject to the fulfillment at or prior to the Closing
Date of the following conditions:
14
(a) The waiting period under the HSR Act
applicable to the consummation of the transactions contemplated
hereby shall have expired or been terminated;
(b) No preliminary or permanent injunction or
other order or decree by any federal, state, local or foreign
court which prevents the consummation
of the transactions contemplated hereby shall have been issued
and remain in effect (each party agreeing to use its reasonable
best efforts to have any such injunction, order or decree lifted)
and no statute, rule or regulation shall have been enacted by any
federal, state, local, or foreign government or governmental
agency which prohibits the consummation of the transactions
contemplated hereby;
(c) The CIBBV Exchange Shares shall have been
issued and delivered to C&W by PLD in accordance with the terms
of the CIBBV Exchange Agreement; and
(d) All foreign and United States federal, state
and local government consents and approvals required for the
consummation of the transac tions contemplated hereby (including,
without limitation, the consent of the Bermuda Monetary
Authority) shall have become Final Orders (a "Final Order" means
a final order after all opportunities for rehearing are exhausted
(whether or not any appeal thereof is pending)) and shall not be
subject to terms and conditions.
VI.2. Conditions to Obligations of Buyer. The
obligation of Buyer to effect the transactions contemplated by
this Agreement shall be subject to the fulfillment at or prior to
the Closing Date of the following additional conditions:
(a) There shall not have occurred and be
continuing any event or events, either individually or in the
aggregate, which would have a material and adverse effect on the
property, business, operations, prospects or condition (financial
or otherwise) of PLD or PeterStar;
(b) C&W shall have performed and complied with in
all material respects the covenants and agreements contained in
this Agreement required to be performed and complied with by it
at or prior to the Closing Date, and the representations and
warranties of C&W set forth in this Agreement, giving effect to
the amendment or supplement of any schedule pursuant to Section
5.8 hereof, shall be true and correct in all material respects as
of the date of this Agreement and as of the Closing Date as
though made at and as of the Closing Date;
(c) Buyer shall have received stock certificates
representing all of the PLD Shares, the CIBBV Exchange Shares and
the Holdings Shares and the
15
certificate or other instrument representing the PLD Warrant,
each duly endorsed in blank or accompanied by duly executed
instruments of transfer, together with any other documents that
are necessary to transfer to Buyer good and marketable title to
the PLD Shares, the CIBBV Exchange Shares, the PLD Warrant and
the Holdings Shares, as the case may be;
(d) The conditions to closing under the Asset
Exchange Agreement (as defined in Section 8.8 hereof) annexed
hereto as Schedule 6.2 shall have been satisfied or waived by
Buyer;
(e) Buyer and PLD shall have executed and
delivered a Director Nomination Agreement dated April 19, 1998,
containing terms and condi tions substantially as set forth in
the draft thereof previously delivered by Buyer to C&W, and such
agreement shall be in full force and effect;
(f) Buyer shall have received a certificate from
an authorized officer of C&W, dated the Closing Date, to the
effect that to the officer's knowledge, the conditions set forth
in Section 6.2 (b) have been satisfied; and
(g) Buyer shall have received opinions from
counsel to C&W, dated the Closing Date and satisfactory in form
and substance to Buyer and its counsel,
(A) substantially to the effect that:
(i) C&W is a corporation duly organized and
validly existing under the laws of the jurisdiction of its
organization and has the corporate power and authority to execute
and deliver this Agreement and to consummate the transactions
contemplated hereby; and the execution and delivery of this
Agreement and the consummation of the transactions contemplated
hereby have been duly authorized by requisite corporate action
taken on the part of C&W;
(ii) this Agreement has been executed and
delivered by C&W and is a valid and binding obligation of C&W,
enforceable against it in accordance with its terms, except (A)
that such enforcement may be subject to bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter
in effect relating to creditors' rights, and (B) that the remedy
of specific performance and injunctive and other forms of
equitable relief may be subject to certain equitable defenses and
to the discretion of the court before which any proceeding
therefore may be brought;
(iii) C&W, by reason of delivery of
certificates for or other instruments representing the PLD Shares
in the name of Buyer, will cause Buyer to own such shares free
and clear of any adverse claim (as defined in Article 8
16
of the Uniform Commercial Code as in effect in the State of New
York) as of the Closing date; and
(B) in respect of Bermuda law, in relation to the
Holdings Shares, an opinion customary for Bermuda
counsel to give in relation to the legal title
obtained by the person registered in the share
register of a company incorporated in Bermuda
Such opinions may expressly rely as to matters of fact
upon certifi xxxxx furnished by C&W and appropriate officers and
directors of each of PLD, Holdings and PeterStar and by public
officials.
(h) Buyer shall have received a copy of a
compliance certifi cate from the Registrar of Companies of
Bermuda confirming that Holdings is not in default of any filing
or fees due to be made to the Bermuda Government, dated as of a
date within 5 Business Days prior to the Closing Date.
VI.3. Conditions to Obligations of C&W. The
obligations of C&W to effect the transaction contemplated by this
Agreement shall be subject to the fulfillment at or prior to the
Closing Date of the following additional conditions:
(a) C&W shall have received the Purchase Price;
(b) Buyer shall have performed and complied with
in all material respects the covenants and agreements contained
in this Agreement required to be performed and complied with by
it at or prior to the Closing Date, and the representations and
warranties of Buyer set forth in this Agreement, giving effect to
the amendment or supplement of any schedule pursuant to Section
5.8 hereof, shall be true and correct in all material respects as
of the date of this Agreement and as of the Closing Date as
though made at and as of the Closing Date;
(c) C&W shall have received a certificate from an
authorized officer of Buyer, dated the Closing Date, to the
effect that to the officer's knowledge, the conditions set forth
in Section 6.3(b) have been satisfied; and
(d) C&W shall have received an opinion from
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, special counsel to
Buyer, dated the Closing Date and satisfactory in form and
substance to C&W and its counsel, substantially to the effect
that:
(i) Buyer is a corporation organized and in
good standing under the laws of the State of Delaware and has the
power and authority to
17
execute and deliver this Agreement and to consummate the
transactions contem plated hereby; and the execution and delivery
of this Agreement and the consumma tion of the transactions
contemplated hereby have been duly authorized by requisite action
taken on the part of Buyer; and
(ii) this Agreement has been executed and
delivered by Buyer and is a valid and binding obligation of
Buyer, enforceable against it in accordance with its terms,
except (A) that such enforcement may be subject to bankruptcy,
insolvency, reorganization, moratorium or other similar laws now
or hereafter in effect relating to creditors' rights, and (B)
that the remedy of specific performance and injunctive and other
forms of equitable relief may be subject to certain equitable
defenses and to the discretion of the court before which any
proceeding therefore may be brought.
As to any matter contained in such opinion which
involves the laws of any jurisdiction other than the Federal laws
of the United States or the laws of the State of New York, such
counsel may rely upon opinions of counsel admitted in such other
jurisdictions. Any opinions relied upon by such counsel as
aforesaid shall be delivered together with the opinion of such
counsel. Such opinion may expressly rely as to matters of fact
upon certificates furnished by Buyer and appropriate officers and
directors of Buyer and by public officials.
ARTICLE VII
TERMINATION AND ABANDONMENT
VII.1. Termination.
(a) This Agreement may be terminated at any time
prior to the Closing Date, by mutual written consent of Buyer and
C&W.
(b) This Agreement may be terminated by Buyer, on
the one hand, or C&W, on the other hand, if the transactions
contemplated hereby shall not have been consummated on or before
June 30, 1998, provided, that the right to terminate this
Agreement pursuant to this Section 7.1(b) shall not be available
to any party whose failure to perform any of its covenants or
obligations under this Agree ment has been the cause of or
resulting in the failure of the transactions contemplated by this
Agreement to occur on or prior to the aforesaid date.
(c) This Agreement may be terminated by either
Buyer, on the one hand, or C&W, on the other hand, if (i) any
governmental or regulatory body, the consent of which is a
condition to the obligations of C&W and Buyer to consummate
18
the transactions contemplated hereby, shall have determined not
to grant its consent and all appeals of such determination shall
have been taken and have been unsuc cessful, or (ii) any court of
competent jurisdiction shall have issued an order, judgment or
decree permanently restraining, enjoining or otherwise
prohibiting the transactions contemplated hereby and such order,
judgment or decree shall have become final and nonappealable.
(d) This Agreement may be terminated by Buyer, on
the one hand, or C&W, on the other hand, if there has been a
material violation or breach of any agreement, representation or
warranty contained in this Agreement which violation or breach
has not been waived by the non-breaching party (it being agreed
that the failure of Buyer to comply with its undertaking
contained in Section 5.7 hereof shall be deemed a material breach
of this Agreement).
VII.2. Procedure and Effect of Termination. In the
event of termination of this Agreement and abandonment of the
transactions contemplated hereby by either or both of the parties
pursuant to Section 7.1, written notice thereof shall forthwith
be given by the terminating party to the other party and this
Agreement shall terminate and the transactions contemplated
hereby shall be abandoned, without further action by any of the
parties hereto without prejudice to any claims of a party to this
Agreement arising prior to the date of such termination in
respect of any breach of any representation, warranty or
agreement contained in this Agreement and provided that (a) the
provisions of Sections 5.4 and Article IX (except for section
9.4) hereof shall survive such termination, and (b) that
regardless of such termination the provisions of Article VIII
hereof shall continue with respect to any such claims. If this
Agreement is terminated as provided herein all filings,
applications and other submissions made pursuant to this
Agreement, to the extent practicable, shall be withdrawn from the
agency or other person to which they were made.
ARTICLE VIII
SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION
VIII.1. Survival of Representations. The
representations and warranties set forth in Articles III and IV
of this Agreement (including in the schedules delivered pursuant
thereto) shall survive the Closing until one (1) year after the
Closing.
19
VIII.2. Limitations on C&W Representations and
Warranties; Investigation. C&W has not made in this agreement or
otherwise, and nothing in this Agree ment shall be construed to
be, a representation or warranty of any nature in relation to
PLD, any of its subsidiaries or affiliates (including PeterStar),
or Belcel, or the past, current or future property, business,
operations, prospect or condition (financial or otherwise) of
PLD, PeterStar or Belcel and Buyer confirms that it has not
entered into this Agreement or performed its obligations under
this Agreement in reliance on any such representation or warranty
by C&W.
VIII.3. C&W's Indemnification of Buyer. Subject to the
conditions of this Article VIII, C&W hereby agrees that it shall
indemnify, defend and hold harmless Buyer and any parent,
subsidiary and affiliate of Buyer (collectively, the "Buyer
Group") from and against all demands, claims, actions or causes
of action, assessments, losses, damages, liabilities, costs and
expenses, including, without limitation, interest, penalties and
reasonable attorneys' fees and expenses (collectively,
"Damages"), asserted against, resulting to, imposed upon or
incurred by any of the Buyer Group, directly or indirectly,
arising out of or resulting from a breach of any representation,
warranty or agreement of C&W contained in or made pursuant to
this Agreement or any facts or circumstances constituting such a
breach (collectively, "Buyer's Indemnifiable Claims"); provided,
however, that the indemnification obligation of C&W with respect
to any breach of any of the representations or warranties made by
C&W in this Agreement shall arise only in the event that C&W had
knowledge of such breach on or before the Closing. For purposes
of this Agreement, "Knowledge" of C&W shall mean the knowledge of
Xxxxx Xxxxxxxx, Xxxxxx Xxxx and Xxxx Xxxxxxxxxx (collectively,
the "Designated Persons"). C&W represents and warrants that the
Designated Persons are the only current management personnel of
C&W or Holdings who have substantial executive, management, or
financial responsibilities for Holdings who would be reasonably
likely to be aware of facts or circumstances that could cause a
representation or warranty made by C&W in this Agreement to be
false in any material respect.
VIII.4. Buyer's Indemnification of C&W. Subject to the
conditions of this Article VIII, Buyer hereby agrees that it
shall indemnify, defend and hold harmless C&W and any parent,
subsidiary and affiliate of C&W (collectively, the "C&W Group")
from and against all Damages asserted against, resulting to,
imposed upon or incurred by any of the C&W Group, directly or
indirectly, arising out of or resulting from a breach of any
representation, warranty or agreement of Buyer contained in or
made pursuant to this Agreement or any facts or circumstances
constituting such a breach ("C&W
20
Indemnifiable Claims"; C&W's Indemnifiable Claims and Buyer's
Indemnifiable Claims are collectively referred to herein as the
"Indemnifiable Claims"); provided, however, that the
indemnification obligation of Buyer with respect to any breach in
any of the representations or warranties made by Buyer in this
Agreement shall arise only in the event that Buyer had knowledge
of such breach on or before the Closing.
VIII.5. Conditions of Indemnification. The obligations
and liabilities of C&W under Section 8.3 or Buyer under Section
8.4, respectively, with respect to Indemnifiable Claims resulting
from the assertion of liability by third parties shall be subject
to the following terms and conditions:
(a) The member of the C&W Group or the Buyer
Group, as the case may be, asserting the existence of an
Indemnifiable Claim (the "Indemnified Party") will give notice of
any such Indemnifiable Claim to the party from whom
Indemnification is sought (the "Indemnifying Party"), and the
Indemnifying Party shall undertake the defense thereof by
representation of their choosing, and will consult with the
Indemnified Party concerning such defense during the course
thereof.
(b) In the event that the Indemnifying Party
within a reason able time after notice of any Indemnifiable
Claim, fails to defend, the Indemnified Party against which such
Indemnifiable Claim has been asserted will (upon further notice
to the Indemnifying Party) have the right to undertake the
defense, compro mise or settlement of such Indemnifiable Claim on
behalf of and for the account and risk of the Indemnifying Party.
(c) Anything in this Section 8.5 to the contrary
notwithstand ing, (i) if there is a reasonable probability that
an Indemnifiable Claim may materi ally and adversely affect the
Indemnified Party other than as a result of money damages or
other money payments (for example, as a result of injunctive or
other equitable relief), the Indemnified Party shall have the
right to defend, compromise or settle such Indemnifiable Claim
provided, that the Indemnifying Party shall not be bound by any
determination, compromise or settlement of any such Indemnifiable
Claim without its consent, which shall not unreasonably be
withheld, and (ii) the Indemnifying Party shall not, without the
Indemnified Party's written consent, settle or compromise any
Indemnifiable Claim or consent to entry of any judgment in
respect thereof unless (A) the Indemnifying Party delivers to the
Indemnified Party in advance its written agreement satisfactory
to the Indemnified Party which provides that amounts paid and
incurred or to be incurred by the Indemnified Party in connec
tion with such Indemnifiable Claim shall be repaid promptly by
the Indemnifying Party to the Indemnified Party (subject to the
limitations of this Article VIII), and (B)
21
such settlement, compromise or consent includes as an
unconditional term thereof the giving by the claimant or the
plaintiff to the Indemnified Party a release from all liability
in respect to such Indemnifiable Claim.
VIII.6. Cushion. The provisions for indemnity
contained in Section 8.3 and Section 8.4 hereof shall only be
effective with respect to an Indemnifiable Claim (or, if more
than one Indemnifiable Claim is asserted, with respect to all
Indemnifiable Claims) to the extent the amount (or aggregate
amount, in the case of more than one Indemnifiable Claim) of
damages sustained in connection therewith exceeds Three Hundred
Thousand dollars (USD$300,000), but to the extent that the amount
or amounts of damages in respect of Indemnifiable Claims exceeds
$300,000, the indemnity provisions hereunder shall apply to all
such damages, without regard to the $300,000 level.
VIII.7. Limitation of Liability. Anything in this
Agreement to the contrary notwithstanding, the liability of an
Indemnifying Party to indemnify an Indemnified Party against any
damages sustained in connection with any Indemnifiable Claim
shall be limited to Indemnifiable Claims as to which written
notice shall have been given to the Indemnifying Party on or
prior to the earlier of the first anniversary date of the Closing
Date or public release of audited financials of PLD or PeterStar,
as the case may be, covering the fiscal year ended December 31,
1998, whether or not the Indemnified Party has actually settled
or incurred any expense with respect to such Damages.
Furthermore, anything in this Agreement to the contrary
notwithstanding, (a) the liability of C&W pursuant to this
Article VIII for all claims for indemnification or damages
arising under this Agreement, taken together with any liability
that C&W may have for indemnification or damages arising under
the CIBBV Exchange Agreement, shall be limited to the Purchase
Price received by C&W and (b) the liability of Buyer pursuant to
this Article VIII shall be limited to twenty-five percent (25%)
of the Purchase Price.
VIII.8. Remedies Cumulative. The remedies provided
herein shall be cumulative and shall not preclude the assertion
by Buyer of any other rights or the seeking of any other remedies
against the other party, as the case may be, provided, however,
that all claims for Damages under this Agreement shall be
governed by the provisions of this Article VIII, and provided
further, that the cushion provided in Section 8.6 hereof and the
limitation of liability provided in Section 8.7 hereof shall also
apply to all other liabilities arising out of the transactions
contemplated hereby but grounded in a legal or equitable theory
other than a breach of representation, warranty or agreement set
forth in this Agreement.
VIII.9. Assignment of Certain Representations,
Warranties and Indemnification Rights
22
C&W hereby (a) acknowledges that pursuant to an Asset Exchange
Agreement, by and between Buyer and PLD (the "Asset Exchange
Agreement"), and subject to the sale, assignment, transfer and
delivery of the Holdings Shares from C&W pursuant to this
Agreement, Buyer will, substantially simultaneously with the
purchase of the Holdings Shares as described in Section 1.1
hereof, sell, assign, transfer and deliver to PLD, and PLD will
acquire from Buyer, all of the right, title and interest acquired
by Buyer hereunder in and to the Holdings Shares and (b) agrees
that its representations, warranties and agreements made in this
Agreement with respect to the Holdings Shares, and Buyer's
indemnification rights under this Article VIII, may be assigned
by Buyer to the benefit of PLD, and that PLD shall have the right
to rely upon such representations, warranties and agreements, and
to enforce such indemnification rights without any recourse to
Buyer, as fully as if it were a party to this Agreement.
ARTICLE IX
MISCELLANEOUS PROVISIONS
IX.1. Amendment and Modification. Subject to
applicable law, this Agreement may be amended, modified or
supplemented only by written agreement signed by all of the
parties hereto.
IX.2. Waiver of Compliance; Consents. Except as
otherwise provided in this Agreement, any failure of any of the
parties to comply with any obligation, covenant, agreement or
condition herein may be waived by the party entitled to the
benefits thereof only by a written instrument signed by the party
granting such waiver, but such waiver shall not operate as a
waiver of, or estoppel with respect to, any subsequent or other
failure.
IX.3. Notices. All notices and other communications
hereunder shall be in writing and shall be deemed effectively
given upon personal delivery to the party to be notified, on the
next Business Day after delivery to an internationally recognized
overnight courier service, upon confirmation of receipt of a
facsimile transmission, or five days after deposit with the
United States Post Office or the Royal Mail, by registered or
certified mail (return receipt requested), postage prepaid, to
the parties at the following addresses (or at such other address
for a party as shall be specified by like notice; provided that
notices of a change of address shall be effective only upon
receipt thereof):
(a) If to C&W, to:
23
Cable and Wireless plc
000 Xxxxxxxxx Xxxx
Xxxxxx XX0X 0XX
Xxxxxx Xxxxxxx
Facsimile: (00) 000 000 0000
Attention: Company Secretary
(with a copy to:
Cleary, Xxxxxxxx, Xxxxx & Xxxxxxxx
Xxxxx 0
Xxxx Xxxxx House
00 Xxxxxxxxxx Xxxxxx
Xxxxxx XX0X 0XX
Xxxxxx Xxxxxxx
Facsimile: (00) 000 000 0000
Attention: Xxxxxx X. Shutter
(b) If to Buyer, to:
News America Incorporated
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
Attention: General Counsel
(with a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxx X. Xxxxxx, Esq.)
(c) In the case of notices given to C&W or Buyer,
a copy thereof shall simultaneously be given to PLD at:
PLD Telekom Inc.
24
000 Xxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxx Xxxx
IX.4. Assignment. This Agreement and all of the
provisions hereof shall be binding upon and inure to the benefit
of the parties hereto and their respective assigns permitted in
accordance with this Section 9.4, but neither this Agreement nor
any of the rights, interests or obligations hereunder shall be
assigned by any party hereto, including by operation of law
without the prior written consent of the other party, nor is this
Agreement intended to confer upon any other person except the
parties hereto any rights or remedies hereunder; provided,
however, that (a) Buyer will have the right, at any time prior to
the sixth business day following the date hereof, to designate in
writing, in accordance with applicable law, one of its directly
or indirectly wholly owned subsidiaries, or a limited liability
company or other organization all of the membership interests in
which are owned, directly or indirectly, by Buyer, to purchase,
in whole or in part, the PLD Interest and the Holdings Shares on
the terms set out in this Agreement, and Buyer shall remain
jointly and severally liable with its designee under this
Agreement following such designation; provided, however, that no
such designation shall be permitted if as a result thereof any
consent, approval, authorization or permit of, or filing with or
notification to, any governmental or regulatory authority, other
than as specified on Schedule 4.3 hereto, as in effect on the
date hereof, would be required, and (b) certain representations,
warranties and agreements, and indemnification rights of Buyer be
assigned to PLD as set forth in Section 8.9 hereof.
IX.5. Confidentiality. Each of the Parties hereto will
hold, and will use its reasonable, good faith efforts to cause
its respective shareholders, partners, members, directors,
officers, employees, accountants, counsel, consultants, agents
and financial or other advisors (collectively "Agents") to hold,
in confidence all information (whether oral or written),
including this Agreement and the documents contemplated herein,
concerning the transactions contemplated by this Agreement
furnished to such Party by or on behalf of any other Party in
connection with such transactions, unless legally compelled (by
deposition, interrogatory, request for documents, subpoena, civil
investigative demand or similar process, or by order of a court
or tribunal of competent jurisdiction), or in order to comply
with applicable rules or requirements of any stock exchange,
government department or agency or other regulatory authority, or
if required by any securities law or regulation or other legal
requirement to disclose any such information or
25
documents, and except to the extent that such information or
documents can be shown to have been (a) previously known on a
nonconfidential basis by such Party, (b) in the public domain
through no fault of such Party or (c) acquired by such Party on a
nonconfidential basis from sources not known by such Party to be
bound by any obligation of confidentiality in relation thereto.
Notwithstanding the foregoing provisions of this Section 9.5,
each Party may disclose such information to its Agents in
connection with the transactions contemplated by this Agreement
or any of the other ancillary Agreements so long as such Agents
are informed by such Party of the confidential nature of such
information and are required by such Party to treat such
information confidentially, and to certain governmental agencies
in connection with the procurement of the governmental
authorizations contemplated by this Agreement. The obligation of
each Party to hold any such information in confidence shall be
satisfied if such Party exercises the same care with respect to
such information as it would take to preserve the confidentiality
of its own similar information. If this Agreement is terminated,
each Party will, and will use its reasonable, good faith efforts
to cause its respective Agents to, destroy or deliver to the
other Party, upon request, all documents and other materials, and
all copies thereof, obtained by such Party or on its behalf from
the other Party hereto in connection with this Agreement that are
subject to such confidence.
IX.6. Governing Law. This Agreement shall be governed
by and construed in accordance with the laws of the State of New
York (regardless of the laws that might otherwise govern under
applicable New York principles of conflicts of law) as to all
matters, including but not limited to matters of validity,
construction, effect, performance and remedies.
IX.7. Counterparts. This Agreement may be executed in
two or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the
same instrument.
IX.8. Interpretation. The article and section headings
contained in this Agreement are solely for the purpose of
reference, are not part of the agreement of the parties and shall
not in any way affect the meaning or interpretation of this
Agreement. As used in this Agreement, (a) the term "person" shall
mean and include an individual, a partnership, a joint venture, a
corporation, a trust, an unincorporated organization and a
governmental entity or any department or agency thereof, (b) the
term "subsidiary" when used in reference to any other person
shall mean any corporation of which outstanding securities having
ordinary voting power to elect a majority of the Board of
Directors of such corporation are owned directly or indirectly by
such other person, (c) the terms "affiliate" and "parent" shall
have the meanings set forth in Rule 12b-2 of the Exchange Act,
(d) the term
26
"Business Day" shall mean any day other than a Saturday, Sunday
or other day on which banks in the State of New York are
authorized or required to be closed and (e) PLD shall not be
deemed to be a subsidiary of C&W.
IX.9. Entire Agreement. This Agreement, including the
documents, schedules and certificates referred to herein, embody
the entire agreement and understanding of the parties hereto in
respect of the transactions contemplated by this Agreement. There
are no restrictions, promises, representations, warranties,
covenants or undertakings, other than those expressly set forth
or referred to herein or therein. This Agreement supersedes all
prior agreements and understandings between the parties with
respect to such transactions.
27
IN WITNESS WHEREOF, C&W and Buyer have caused this
agreement to be signed by their respective duly authorized
officers as of the date first above written.
NEWS AMERICA INCORPORATED
By: /s/ Xxxx X. Xxxxxx
--------------------------------
Name: Xxxx X. Xxxxxx
Title:
CABLE AND WIRELESS PLC
By: /s/ X.X. Xxxxxxxx
--------------------------------
Name: X.X. Xxxxxxxx
Title: Director, Global Business
28
Exhibit 6.2 - Certain Conditions to Closing under the Asset
Exchange Agreement
[Note: Capitalized terms used but not defined in this Schedule
6.2 have the respec tive meanings given in the Asset Exchange
Agreement.]
a. There shall not have occurred and be continuing
any event or events, either individually or in
the aggregate, which would have a material and
adverse effect on the property, business,
operations, prospects or condition (financial or
otherwise) of PLD;
b. PLD shall have performed and complied with in all
material respects the covenants and agreements
contained in the Asset Exchange Agreement
required to be performed and complied with by it
at or prior to the Closing Date thereunder, and
the representations and warranties of PLD set
forth in the Asset Exchange Agreement shall be
true and correct in all material respects as of
the date of the Asset Exchange Agreement and as
of the Closing Date thereunder as though made at
and as of the Closing Date, and Venture shall
have received a certificate to that effect signed
by authorized officers of PLD;
c. The common stock of PLD shall be quoted on The
Nasdaq Stock Market, and no action shall have
been taken or shall be pending or threatened in
respect of the delisting of the com mon stock of
PLD from eligibility for such quotation;
d. If required by the rules of The National
Association of Securi ties Dealers, Inc. in
respect of the issuance of the New PLD Shares,
the stockholders of PLD shall have duly approved
the issuance of such shares under the CIBBV
Exchange Agree ment and the C&W Stock Purchase
Agreement, which ap proval shall not have been
rescinded and shall be in full force and effect;
29
e. PLD shall have received the consent of its
bondholders pursu ant to the Indentures to
operate in Belarus;
f. Venture shall have received a certificate from an
authorized officer of PLD, dated the Closing
Date, to the effect that to the officer's
knowledge, the conditions set forth in the
foregoing paragraphs a. and b. have been
satisfied; and
g. Venture shall have received an opinion from
_________, counsel to PLD, dated the Closing Date
and satisfactory in form and substance to Venture
and its counsel, substantially to the effect
that:
(1) PLD is a corporation duly organized,
validly existing and in good standing under the laws of the
State of Delaware and has the corporate power and authority
to execute and deliver the Asset Exchange Agreement and to
consummate the transactions contemplated hereby; and the
execution and delivery of the Asset Exchange Agreement and
the consumma tion of the transactions contemplated hereby
have been duly authorized by requisite corporate action
taken on the part of PLD;
(2) the Asset Exchange Agreement has been
executed and delivered by PLD and is a valid and binding
obligation of the PLD enforceable against it in accordance
with its terms, except (A) that such enforcement may be
subject to bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect
relating to creditors' rights, and (B) that the remedy of
specific performance and injunc tive and other forms of
equitable relief may be subject to certain equitable
defenses and to the discretion of the court before which
any proceeding therefore may be brought; and
(3) the issuance and sale of New PLD Shares
to Venture pursuant to the Asset Exchange Agreement are not
required to be registered under the Securities Act.
30
Schedule 3.3
In addition to its equity interest in Peterstar, Holdings and
owns 100% issued share capital of Complus Enterprises Holding
S.A.
Holdings has loans or intercompany accounts from its parent or
indirect parent companies of approx. $2,100,000.
By virtue of its obligations under certain contracts or
documents, which Holdings has entered into, of such nature as
further described below, Holdings could be considered to have
ongoing liabilities.
Holdings generally uses powers of attorney for
representation at shareholders meetings of Complus
Enterprises Holdings Ltd and ZAO Peterstar and where action
is required, including signature of documents on its
behalf, particularly if in Russia or Luxembourg. Such
powers of attorney may include indemnities from Holdings
for the attorneys. The attorneys often include Holdings'
legal advisers in those countries.
Holdings has appointed A.S. & K. Services Ltd to provide
corporate administrative services. The current fee level is
US$4,500 per annum.
Holdings has entered into certain agreements relating to an
issue of new shares by Peterstar, a historic dispute
relating thereto and settlement of such dispute and a
related dispute with Complus Holdings S.A. (Holdings'
former partner in Complus Enterprises Holding S.A.).
Although all outstanding payments by Holdings are
considered to have been made under these Agreements it is
not proposed these Agreements will be terminated prior to
closing. The main agreements are the Preliminary Agreement
dated 30th May, 1997 between:- ZAO Peterstar, NWE Capital
(Cyprus) Ltd., ZAO TelecomInvest, Complus Enterprises
Holding S.A. and Holdings, and the Agreement dated 30th May
1997 between Complus Enterprises Holding S.A., Complus
Holding S.A.
and PLD Holdings Ltd.
For the purposes of clause 3.3 Buyer is deemed to have full
knowledge of the contents of the Peterstar constitutional
documents and protocols.
The Charter of Peterstar contains rights of first refusal in
respect of transfers of the shares in Peterstar. These are
further confirmed by the Foundation Agreement of Peterstar dated
2nd March 1992 as amended to date.
Schedule 3.4 - Consents and Approval
The acquisition of shares in Holdings is understood to require
the prior consent of the Bermuda Monetary Authority. Bermudan
counsel have advised that application for consent should be made
on behalf of Holdings and the most recent audited financial
statements or annual report for the transferee of the shares in
Holdings will be required to be delivered to the Bermuda Monetary
Authority in connection with the application for consent.
C&W will need to file an amendment to its Schedule 13D filing
with the Securities and Exchange Commission of the United States
on signature together with all necessary documents.
Schedule 3.5 Financial Statements; Undisclosed Liabilities
Although the financial statements referred to in Section 3.5 were
approved by the annual general meeting of shareholders of
Holdings on 16 April, 1998, the audit report relating to such
financial statements is awaiting signature by KPMG Audit plc,
which is expected imminently.
Schedule 3.6 Absence of Certain Changes or Events
Since the date of the financial reports referred to in Section
3.5(a) the following have or may, as at the Closing Date,
occurred:
(i) The transfer by Holdings of all shares held in Complus
Enterprises Holding, S.A. as referred to in Section 5.6 and
(a) assignment to the person to which such shares in
Complus are transferred (the "Transferee") all right
title and interest Holdings has in the Share Sale and
Purchase Agreement of 14 December 1994 between Complus
Holding S.A. and Holdings, pursuant to which Holdings
purchased 688 shares in Complus;
(b) irrevocably undertake to exercise its power under
Clause 4.3 of the Agreement dated 30 May 1997 between
Complus, Complus Holding, S.A. and Holdings to direct
that any amounts payable by Complus Holding, S.A in
respect of any indebtedness or other liabilities of or
incurred by Complus shall be paid to the Transferee or
such other person as such Transferee may direct; and
(c) all other steps necessary to ensure the Transferee has
the benefit of any rights PLD Holdings has with regard
to its current holdings in Complus.
(ii) The termination or repayment of the loans and intercompany
accounts between Holdings and its direct or indirect parent
companies.
(iii) Changes to the Charter of Peterstar to reflect the
participation of Holdings in Peterstar as a foreign
investor to be registered at the Russian Federation State
Registration Chamber of the Ministry of Economics and the
registration with the Russian Federation Federal Commission
on Securities Markets of the report on the result of the
third issuance of shares and other related formalities.
(iv) The ratification by Holdings of powers of attorney and
granting of indemnities to the persons appointed by such
powers of attorney and the changes to the directors and
officers Holdings at the last Annual General Meeting.
Schedule 4.3(a)
Consents and Approvals
Filing by New America, or the ultimate parent of News America,
and PLD under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvement Act of
1976, as amended.
Schedule 5.1 Conduct of Business of Holdings
During the period from the date of the Agreement to the Closing
Date Holdings will or may effect the transactions referred to in
Schedule 3.6.
