EXHIBIT 2.1(b)
CLOSING AGREEMENT
This CLOSING AGREEMENT, dated as of August 2, 2002, (the "Closing
Agreement"), is among Gilat To Home Latin America (Holland) N.V., a Dutch
corporation ("Seller"), rStar Corporation, a Delaware corporation ("Purchaser"),
and Gilat Satellite Networks Ltd., an Israeli corporation, the indirect parent
of Seller and an indirect majority stockholder of Purchaser ("Gilat Israel" and
together with Seller, the "Gilat Parties" and each a "Gilat Party").
R E C I T A L S
A. Seller, Purchaser and Gilat Israel entered into an Acquisition Agreement,
dated April 23, 2001 (the "Original Acquisition Agreement"). On September
7, 2001, Seller, Purchaser and Gilat Israel entered into an Amended and
Restated Acquisition Agreement (the "First Amended Agreement") in which
they amended and restated the Original Acquisition Agreement in its
entirety. On December 31, 2001, Seller, Purchaser and Gilat Israel entered
into a Second Amended and Restated Acquisition Agreement in which they
amended and restated the First Amended Agreement in its entirety (the
"Second Amended Agreement"). Seller, Purchase and Gilat Israel amended the
Second Amended Agreement on May 16, 2002 in order to change the latest
closing date as set forth in Sections 2.2 and 10.1(b) of the Second
Amended Agreement.
B. Seller, Purchaser and Gilat Israel wish to set forth the terms on which
the Closing of the Second Amended Agreement is to take place.
NOW, THEREFORE, in consideration of the mutual promises, representations,
warranties, covenants and conditions set forth in this Closing Agreement, and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, and intending to be legally bound hereby, the Parties
hereby agree as follows:
Terms
Capitalized terms used herein not otherwise defined shall have the meaning set
forth in the Second Amended Agreement.
Replacement of Disclosure Schedule
The Disclosure Schedule of the Second Amended Agreement is hereby replaced in
its entirety with the closing balance sheet and footnotes thereto, attached
hereto as Annex A (the "Amended
Disclosure Schedule"). Any reference in the Second Amended Agreement to the
Disclosure Schedule or to any section thereof shall be deemed to be a reference
to the Amended Disclosure Schedule.
Post-Closing Transfer of Certain Entities
3.1 The Parties acknowledge and agree that the transfer to StarBand Latin
America (Holland) B.V. ("SLA") of (i) the shares held by Gilat To Home Latin
America (Netherlands Antilles) N.V. ("GTHLA Antilles") and Gilat Israel in Gilat
Colombia S.A.E.S.P ("Gilat Colombia"), and (ii) the shares held by Seller in
Gilat To Home Peru S.A. ("GTH Peru", and together with Gilat Colombia, the
"Entities"), has not been effected as of the Closing due to required regulatory
approvals that have not been obtained as of the Closing.
3.2 The Gilat Parties will use their best efforts to cause the transfers of the
shares of the Entities as set forth above as soon as practicable after the
Closing, as part of and in the framework of the acquisition by Purchaser of the
Business as described in the Second Amended Agreement. For the purpose of
clarification, no additional consideration shall be paid or owed by Purchaser or
any of its subsidiaries for the transfer of the shares of the Entities, beyond
the Share Consideration stipulated in the Second Amended Agreement and paid by
Purchaser at the Closing. The Gilat Parties shall reimburse Purchaser for any
out-of-pocket costs and expenses incurred by Purchaser, SLA or any of the
Entities in connection with any such transfer, including, without limitation,
any costs or expenses incurred in connection with obtaining the required
regulatory approvals.
3.3 (a) Notwithstanding the above, it is the intention and desire of the Parties
that, despite the delay in the transfer of the shares of the Entities as set
forth above, SLA, as the wholly owned subsidiary of Purchaser, shall have and
assume all rights, obligations and liabilities with respect to the Business
conducted by the Entities, as of the date of the Closing.
(b) Without limiting the foregoing, the Gilat Parties agree that, until
such time as the beneficial ownership of the shares of the Entities are
transferred to SLA: (i) as between the Gilat Parties and Purchaser, the Gilat
Parties shall cause the Entities to operate the Business conducted by such
Entities for the benefit of Purchaser; (ii) the Gilat Parties shall not permit
any cash or other property at any time held by any of the Entities to be
distributed to any of the Gilat Parties or their Affiliates other than SLA or
Purchaser, except for cash or other property associated with the Excluded
Businesses (provided, that any Entity may repay intercompany obligations owed by
such Entity to the Gilat Parties and their Affiliates so long as such repayment
does not reduce the net asset value of the Entity, and such obligations relate
to goods and services provided by such entities to the Entity (x) prior to the
Closing Date in the ordinary course of business or (y) after the Closing Date
according to the terms of the Master Agreement attached as Exhibit 4.1(h) to the
Second Amended Agreement); and (iii) the Gilat Parties shall take all such
measures as are reasonably required in order to cause any net income or loss
generated or incurred by any of the Entities (excluding net income or loss
associated with Excluded Businesses) to be paid or received (or accrued) as a
quarterly management or similar fee, or other form of actual or
accruable payment, to SLA or Purchaser in an amount equal to the net income or
loss generated or incurred by the Entities in any calendar quarter. Without
limiting the foregoing, it is agreed that the manner of implementation of the
foregoing shall be decided on jointly by the Parties and shall take into
account, among other things, applicable tax considerations so as to minimize tax
liability on all Parties.
3.4 The Parties further acknowledge that the transfer to SLA of the shares held
by Seller in Gilat To Home Brazil Holding Ltda. ("Brazil Holding"), the majority
owner of Gilat To Home Brazil Ltda. ("GTH Brazil"), which is pending
registration with the Registrar of Civil Companies in Belo Horizonte, Brazil,
may be revoked if a regulatory approval for such transfer is not be obtained
after the Closing from Agencia Nacional de Telecomunicacoes - ANATEL. In such an
event, and so long as Seller's shares in Brazil Holding are not transferred to
SLA, Brazil Holding shall be deemed to be included in the Entities, as they are
defined above, and Section 3.3 shall apply also to the Business conducted by
Brazil Holding and GTH Brazil in Brazil.
3.5 (a) In the event that the transfer of the shares of the Entities as set
forth above will not be effected, for any reason, within 9 months after the date
of the Closing, or if the transfer of Seller's shares in Brazil Holding is
revoked and no new transfer is effected, Gilat Israel will cause the transfer to
Purchaser of all the shares held by Gilat Satellite Networks (Holland) B.V. (a
wholly owned subsidiary of Gilat Israel) in GTH Antilles, that will constitute,
at the time of such transfer, no less than 97% of the share capital of GTH
Antilles on a fully diluted basis. Such transfer will be made: (x) free and
clear of all liens and other encumbrances, (y) without further consideration and
(z) in lieu of the transfer of the Entities all of which, to the extent not
previously transferred to SLA, shall be directly or indirectly owned by GTH
Antilles (excluding nominal ownership and the holding of approximately 35% of
Gilat Colombia by Gilat Israel (which interest shall, likewise, be transferred
to SLA on or before the 9 months following the Closing, or else be treated and
deemed to be held by Gilat Israel for the benefit of Purchaser)). The Gilat
Parties shall reimburse Purchaser for any out-of-pocket costs and expenses
incurred by Purchaser or SLA, GTH Antilles or any of the Entities in connection
with any such transfer, including, without limitation, any costs or expenses
incurred in connection with obtaining any required regulatory approvals.
(b) The Gilat Parties agree that, as a condition to the transfer of GTH
Antilles to Purchaser, the Gilat Parties shall, for the benefit of Purchaser and
its shareholders, have prepared a written analysis which shows (on a basis that
would be reasonably acceptable to an independent third party familiar with such
matters) that (i) at the time of transfer and for a period of twelve (12) months
thereafter, the business of GTH Antilles and its subsidiaries (other than the
Business as conducted by any Entity then directly or indirectly majority owned
by GTH Antilles) is projected to not have a detrimental impact on the business
of SLA (including, without limitation, in terms of net income (loss) and cash
flow), and (ii) the value of the assets of GTH Antilles (other than the assets
used by any of the Entities in connection with the Business) exceed the value of
the liabilities of GTH Antilles (other than those associated with the Business)
at the time of transfer. Such analysis shall take into account the fact, if
true, that less than 100% of GTH Antilles will be transferred to Purchaser. If
at the time of transfer the Gilat Parties do not provide
the projection discussed in clause (i), or if the condition prescribed in clause
(ii) is not met, then in connection with and as a condition to such transfer,
the Gilat Parties will take steps to comply with such conditions, whether by
transferring assets to GTH Antilles, increasing the ownership of GTH Antilles to
100% and/or in any other manner which is not adverse to Purchaser. It is agreed
that if such steps involve the issuance of shares of Purchaser Stock to the
minority owners of GTH Antilles, such minority owners shall be deemed to be
Gilat Affiliates for purposes of the Special Distribution.
SLA Options
4.1 The Parties acknowledge that at the time of the Closing, certain employees
and former employees of the Gilat Parties or their subsidiaries hold outstanding
options, or have been promised to receive options, for the purchase of an
aggregate of 2,834,235 Ordinary Shares of SLA (the "SLA Options"), pursuant to
the StarBand Latin America (Holland) B.V. 2001 Long-Term Incentive Plan (the
"SLA Incentive Plan") and the agreements thereunder. All SLA Options are
outstanding at the time of the Closing and have not been exercised.
4.2 The Parties hereby agree that Purchaser shall take all steps reasonably
necessary to assume the SLA Incentive Plan and SLA Options as of the Closing,
and shall be substituted for SLA under the SLA Incentive Plan, such that the SLA
optionees will be entitled to purchase shares of Purchaser Stock upon exercise
of their SLA Options, at such quantity and for that exercise price stipulated in
the respective SLA option agreements, as adjusted to reflect the conversion
ratio between the Share Consideration paid by Purchaser to the Company Shares
sold by Seller under the Second Amended Agreement. Specifically, each SLA Option
to purchase one Ordinary Share of SLA shall entitle the holder thereof to
purchase 0.6860 share of Purchaser Stock, at a purchase price of $0.15 per
share. Prior to the Closing, Purchaser's Board of Directors approved the
assumption of the SLA Options. As promptly as practicable following the Closing,
Purchaser shall cause a registration statement on Form S-8 registering the
shares of Purchaser Stock issuable upon exercise of the SLA Options so assumed
by rStar in accordance with this Section 4.2 to be filed with the SEC.
4.3 As soon as practicable (but in no event later than five (5) Business Days)
after receiving notice of the issuance of any shares of Purchaser Stock upon
exercise of SLA Options, Seller shall transfer to Purchaser (by delivery of
stock certificates for Purchaser Stock), for no consideration, an equal number
of shares of Purchaser Stock so issued. Until such time as the SLA Options have
all been exercised or expired, Seller shall maintain (and not sell, assign,
transfer or encumber) a sufficient number of shares of Purchaser Stock for the
purpose hereof. Any shares of Purchaser Stock so transferred by Seller to
Purchaser shall either become treasury shares of Purchaser or be cancelled and
returned to the status of authorized and unissued shares of Purchaser's common
stock.
4.4 The Parties agree that Purchaser shall be compensated for the participation
in the Special Distribution of any shares of Purchaser Stock issued upon
exercise of the SLA Options, that exceed 1,067,843 shares of Purchaser Stock
(representing 1% of the issued and outstanding
shares of Purchaser Stock as of the Closing of the Offer on a Fully Diluted
Basis). Accordingly, it is agreed that:
(a) Purchaser will increase the First Distribution Amount and the Second
Distribution Amount (as such terms are defined in Purchaser's Fourth Amended and
Restated Certificate of Incorporation), as applicable, in an amount equal to the
product of (A) the quotient of (x) the respective Special Distribution, divided
by (y) the number of outstanding shares of Purchaser Stock at the time of
payment of the distribution amount less (i) shares of Purchaser Stock held by
the Gilat Parties and their Affiliates and (ii) shares of Purchaser Stock issued
upon exercise of SLA Options (excluding 1,067,843 shares that constitute 1% of
the issued and outstanding shares of Purchaser Stock as of the Closing of the
Offer on a Fully Diluted Basis); multiplied by (B) the number of shares of
Purchaser Stock issued upon exercise of SLA Options in excess of 1,067,843
shares (constituting 1% of the issued and outstanding shares of Purchaser Stock
as of the Closing of the Offer on a Fully Diluted Basis).
(b) The Gilat Parties will transfer to Purchaser, contemporaneously with
payment of any portion of the Special Distribution, funds equal to the amount by
which Purchaser increased such Special Distribution in accordance with Section
4.5(a) above (the "Increased Distribution").
(c) Purchaser shall propose to its stockholders that its Fourth Amended
and Restated Certificate of Incorporation be amended to provide for the
Increased Distribution, as described in Section 4.4(a) above, in its proxy
statement for the next Annual Meeting or any Special Meeting of Purchaser's
stockholders to be held on or before May 31, 2003. The Gilat Parties agree to
vote, and to cause their Affiliates to vote, in favor of any such amendment.
(d) Without limiting the foregoing or anything contained in the Second
Amended Agreement, for purposes of Section 2.5 of the Second Amended Agreement,
including, without limitation, Sections 2.5(b) and 2.5(c) thereof, any Increased
Distribution shall constitute part of the Special Distribution.
(e) The Parties agree and acknowledge that the rights of the holders of
the SLA Options assumed by Purchaser in accordance with Section 4.3 to
participate in the Special Distribution has been made in accordance with Section
2.5(d)(i)(A)(2) of the Second Amended Agreement and no further options or shares
which may participate in the Special Distribution may be issued in reliance on
the provisions of said Section 2.5(d)(i)(A)(2).
Gilat Parties' Representations and Warranties
The Gilat Parties hereby confirm that the Representations and Warranties
contained in Section 4.1 of the Second Amended Agreement are true and correct in
all material respects as of the date
of the Closing, except for the replacement of the Disclosure Schedule as
stipulated in Section 2 above, and except for the changes, additions and
amendments listed in this Section 5:
5.1 Section 4.1 (c) of the Second Amended Agreement is true and correct in all
material respects as of the date of the Closing, except for the required
regulatory approvals for the transfers of the shares of Gilat Colombia, GTH Peru
and Brazil Holding, as described in Section 3 above.
5.2 Section 4.1 (d) of the Second Amended Agreement is true and correct in all
material respects as of the date of the Closing, except for (i) the required
regulatory approvals for the transfers of the shares of Gilat Colombia, GTH Peru
and Brazil Holding, as described in Section 3 above, and (ii) a consent from
Bank Leumi Le-Israel B.M. for the acquisition of SLA by Purchaser (the "Bank
Consent"). The Gilat Parties represent and warrant to Purchaser that the failure
of the Gilat Parties to obtain the Bank Consent will have no Purchaser Material
Adverse Effect or a Company Material Adverse Effect.
5.3 Section 4.1 (e)(i) of the Second Amended Agreement is true and correct in
all material respects as of the date of the Closing, and no actions, suits or
proceedings of any kind are pending against, or to the knowledge of the Gilat
Parties threatened against, any of the Gilat Parties as further described in
said Section 4.1(e)(i) of the Second Amended Agreement, except as disclosed in
SEC Documents filed by Gilat Israel, including without limitation Gilat Israel's
most recent Form 20-F and Form F-4, and except as detailed below:
(a) In Peru, CIFSA has appealed the removal of the injunction disclosed on
page 32 of the Effective F-4 and the appeal is pending.
(b) In Brazil, Giltek Servicos Ltda. filed a bankruptcy lawsuit against
Gilat-To-Home Brasil Ltda. ("GTH Brazil"). In order to defend against the claim,
Gilat Israel deposited a bond in the amount of $200,000.
(c) In Brazil, On February 25, 2002, X. Xxxxxx Consultoria Em
Telecomuicacoes S/C Ltda., a Brazilian company, sent GTH Brazil a notice
referring to the collection of payments for consulting services rendered to GTH
Brazil in connection with the SkyLand operation in an amount equal to a
percentage over the price of the equipment supplied by GTH Brazil.
5.4 Section 4.1(f)(ii) of the Second Amended Agreement is true and correct in
all material respects as of the date of the Closing, except that the Company
Shares are not fully paid, and the paid up capital of SLA is equal to EUR
165,000. The Gilat Parties represent and warrant to Purchaser that the amount of
paid up capital complies with the requirements of applicable law regarding
minimum paid up capital. The Gilat Parties shall indemnify and hold Purchaser
and its
subsidiaries harmless from and against any losses, costs or expenses arising as
a result of the fact that the Company Shares are not fully paid.
5.5 Section 4.1 (f)(iii) of the Second Amended Agreement is true and correct in
all material respects as of the date of the Closing, except for the outstanding
SLA Options described in Section 4 of this Closing Agreement.
5.6 Section 4.1 (g)(i) of the Second Amended Agreement is true and correct in
all material respects as of the date of the Closing, except for the post-Closing
transfers and required third party approvals described in Section 3 above, and
except that the "Subsidiaries", as such term is defined in said Section
4.1(g)(i), will consist of the following entities:
(a) Gilat Colombia S.A.E.S.P, incorporated in Colombia;
(b) Gilat To Home Peru S.A., incorporated in Peru;
(c) Gilat To Home Brazil Holding Ltda., the majority owner of Gilat To
Home Brazil Ltda., both of which companies are incorporated in
Brazil; and
(d) Gilat To Home Florida Inc., incorporated in Delaware.
Each such Subsidiary is duly organized and validly existing in their respective
jurisdictions of incorporation. At the Closing, each of the Subsidiaries other
than the Entities are wholly-owned by SLA (except for nominal shareholding) and
each of the Entities are directly or indirectly wholly-owned by GTH Antilles,
except for nominal shareholding and the holding of approximately 35% of Gilat
Colombia by Gilat Israel.
5.7 Section 4.1 (g)(ii) of the Second Amended Agreement is true and correct in
all material respects as of the date of the Closing, except that the "Gilat
Business Entities" (excluding the Gilat Parties), as such term is defined in
Section 4.1(g)(ii) of the Second Amended Agreement, consists of the following
entities:
(a) Gilat To Home Latin America (Netherlands Antilles) N.V. -
incorporated in the Netherlands Antilles;
(b) Gilat Do Brasil Limitada - incorporated in Brazil; and
(c) Gilat Latin America, Inc. - incorporated in Delaware.
5.8 Section 4.1(h)(i)(2) of the Second Amended Agreement shall be amended and
restated in its entirety as follows:
"except to the extent stated otherwise in the Amended Disclosure Schedule,
have all right, title and interest in, to and under the assets of the Business."
As amended and restated herein, Section 4.1(h)(i)(2) of the Second Amended
Agreement is true and correct in all material respects as of the date of the
Closing.
5.9 Section 4.1(h)(i)(3) of the Second Amended Agreement shall be amended and
restated in its entirety as follows:
"have assumed all of the liabilities of the Business (the "Liabilities").
For purposes of this Agreement and the Amended Disclosure Schedule, material
Liabilities shall mean Liabilities that exceed $100,000 individually or $1
million in the aggregate."
As amended and restated herein, Section 4.1(h)(i)(3) of the Second Amended
Agreement is true and correct in all material respects as of the date of the
Closing.
5.10 Section 4.1(h)(v) of the Second Amended Agreement is true and correct in
all material respects as of the date of the Closing, except that (i) as of the
Closing, the revenues generated from Voice Services do not have as of the
Closing Date a positive contribution to the net income of the Business, and (ii)
the Closing Balance Sheet provided as part of the Amended Disclosure Schedule
represents unaudited figures from the internal books and records of the Gilat
Parties as of June 30, 2002, which amounts could change. The Gilat Parties
believe that the amounts set forth in the Amended Disclosure Schedule at Closing
are not materially different than the amounts as of June 30, 2002. As of the
Closing, the Voice Services business is not reasonably expected to have a
material adverse effect on the respective results of operation of the Purchaser,
SLA or the Business, taking into consideration the function of the Voice
Services in the Business generally.
5.11 Section 4.1(h)(v) of the Second Amended Agreement is true and correct in
all material respects as of the date of the Closing, except that the sub-lease
to SLA of office space in Sunrise, FL, shall be prepared and effected after the
closing.
5.12 Section 4.1(k)(ii) of the Second Amended Agreement is true and correct in
all material respects as of the date of the Closing, except that in Florida the
transfer of any employees from the Gilat Parties or their subsidiaries to SLA
shall be made after the closing.
5.13 Sections 4.1(l)(i) and (iv) of the Second Amended Agreement shall be
deleted in their entirety and, accordingly, the Gilat Parties make no
representation or warranty with respect to such Sections. The Gilat Parties
represent and warrant to Purchaser that, as of the Closing the Company and/or a
Subsidiary or Entity are party to or have the benefit of all Business Contracts
which are material to the operation of the Business as currently conducted.
5.14 Section 4.1(m) of the Second Amended Agreement is true and correct in all
material respects as of the date of the Closing, except that the Gilat Parties
obtained an oral consent from StarBand Communications Inc. to use the StarBand
tradename outside of the United States and do not have a written agreement to
that effect.
5.15 The Gilat Parties represent and warrant to Purchaser that the Company
Shares delivered to Purchaser (i) are free and clear of all Liens, provided that
Purchaser has duly assumed all of the SLA Options as of the Closing in
accordance with Section 4 of this Closing Agreement; and
(iii) constitute 100% of the issued and outstanding capital stock of SLA. The
Gilat Parties further represent and warrant to Purchaser that the amount of paid
up capital of SLA complies with the requirements of applicable law regarding
minimum paid up capital.
Purchaser's Representations and Warranties
Purchaser hereby confirms that the Representations and Warranties contained in
Section 4.2 of the Second Amended Agreement are true and correct in all material
respects as of the date of the Closing, except for the changes, additions and
amendments listed in this Section 6:
6.1 Section 4.2(c) of the Second Amended Agreement is true and correct in all
material respects as of the date of the Closing, and no actions, suites or
proceedings of any kind are pending against, or to the knowledge of Purchaser
threatened against Purchaser except as disclosed in SEC Documents filed by
Purchaser, including without limitation Purchaser's latest Form 10-K and Form
10-Q, and except as detailed in Schedule 6.1 hereto.
6.2. Section 4.2(g) of the Second Amended Agreement is true and correct in all
material respects except that, as of July 30, 2002, 63,952,732 shares of
Purchaser Stock were issued and outstanding and 2,254,401 shares of Purchaser
Stock were reserved for issuance upon exercise of outstanding options, warrants,
calls, claims, rights (including without limitation stock appreciation or
similar rights), convertible securities and other agreements or commitments to
purchase or otherwise acquire shares of Purchaser's capital stock. Purchaser
represents and warrants to the Gilat Parties that as of the date of the Closing
66,207,133 shares of Purchaser Stock are outstanding on a Fully Diluted Basis
(before the assumption of the SLA Options).
6.3 Purchaser represents and warrants to the Gilat Parties that as of the date
of the Closing the certificates representing the Share Consideration issued to
Seller are (i) duly authorized, validly issued, fully paid and non-assessable
shares of Purchaser Stock, (ii) free and clear of all Liens, (iii) free of
preemptive rights with no personal liability attaching to the ownership thereof,
and (iv) included for trading on the NASDAQ upon official notice of issuance.
6.4 Purchaser represents and warrants to the Gilat Parties that to the best of
its knowledge the unaudited balance sheet at June 30, 2002 and profit and loss
statements for the period ended June 30, 2002, attached hereto as Schedule 6.4
(the "Financial Statements") fairly present the financial condition of Purchaser
in all material respects for the periods indicated, subject to normal year end
adjustments; provided, however, that the Financial Statements are unaudited and
have not been reviewed by Purchaser's auditors and, as such, remain subject to
modification. The Purchaser further represents and warrants to the Gilat Parties
that, to the best of its knowledge, Purchaser has not suffered any material
adverse change in its financial condition between June 30, 2002 and the date of
the Closing (it being acknowledged that, since June 30, 2002, Purchaser has paid
or arranged for the payment of those items that it has a contractual obligation
to pay at or before the Closing, including, without limitation, the funding of
the cash portion of the Offer in the amount of approximately $10 million, as set
forth in Section 8.4 below).
Closing; Acknowledgements
7.1 (a) In light of the Parties' representations and warranties, agreements,
covenants, and obligations set forth in this Closing Agreement, as well as the
amendments and modifications to the Second Amended Agreement contained herein,
each of the Parties hereby agrees and acknowledges that all of the conditions to
Closing set forth in Article 5 of the Second Amended Agreement have been
satisfied on and as of the execution and delivery of this Closing Agreement.
(b) It is hereby agreed that no Party shall have any liability whatsoever
to the other Parties, including without limitation under Article 8 of the Second
Amended Agreement, with respect to such Party's failure to satisfy or comply
with, as the case may be: (i) its representations and warranties and (ii) the
agreements, covenants, obligations and conditions, which are contained in the
Second Amended Agreement, in each case, only to the extent that such failure is
disclosed in, or the applicable provision of the Second Amended Agreement has
been amended by, this Closing Agreement.
(c) Notwithstanding the post-Closing obligations of the Parties contained
in Section 3 of this Closing Agreement, the Parties agree that (i) the closing
of rStar's acquisition of StarBand Latin America, (ii) the resignation of Xxxxx
Xxxxxxxxx, Xxxxxxx Arnouse and Xxxxxxx Xxxxxxx from their positions as directors
and officers of Purchaser, (iii) the election of Gilat Israel's nominees to the
Board of Directors of Purchaser, as described in Purchaser's proxy statement
dated March 28, 2002, and (iv) the expiration of the Offer, shall each be
effective on and as of August 2, 2002.
7.2 Seller hereby acknowledges receipt of 43,103,448 shares of Purchaser Stock,
representing the payment in full of the Share Consideration.
7.3. Purchaser hereby acknowledges receipt of 60,000,000 shares of Company
Stock.
8. Certificates and Satisfaction of Conditions
8.1 Purchaser represents and warrants to the Gilat Parties that: (i) attached
hereto as Exhibit 1 is a true and correct copy of Purchaser's certificate of
incorporation and by-laws as in effect immediately at the Closing; and (ii)
attached hereto as Exhibit 2 is a good standing certificate of Purchaser issued
by the Secretary of State of the state of Delaware.
8.2 Purchaser represents and warrants to the Gilat Parties that Purchaser has
performed and complied in all material respects with all agreements, covenants,
obligations and conditions contained in the Second Amended Agreement which are
required to be performed or complied with by Purchaser before or at the Closing.
8.3 The Gilat Parties represent and warrant to Purchaser that: (i) attached
hereto as Exhibit 3 is a true and correct copy of SLA's Articles of Association;
and (ii) attached hereto as Exhibit 4 is a good standing certificate of SLA
issued on February 8, 2002.
8.4 The Gilat Parties represent and warrant to Purchaser that, except as
described in the Amended Disclosure Schedule and in this Closing Agreement, the
Gilat Parties have performed and complied in all material respects with all
agreements, covenants, obligations and conditions contained in the Second
Amended Agreement which are required to be performed or complied with by the
Gilat Parties before or at the Closing. The Gilat Parties acknowledge that at or
prior to the Closing, Purchaser has paid or arranged for the payment of those
items that it has a contractual obligation to pay at or before the Closing, in
the total approximate amount of $12,200,000, including, without limitation, the
funding of the cash portion of the Offer in the amount of approximately $10
million.
9. Miscellaneous
9.1 Except as specifically provided above, nothing contained in this Closing
Agreement shall be deemed to have amended or modified any of the terms or
provisions of the Second Amended Agreement.
9.2 Nothing contained in this Closing Agreement shall confer any rights upon any
Person or entity that is not a party or permitted assignee of a party to this
Closing Agreement; provided, however, that the provisions of Section 4.5 shall
be for the benefit of each current and future holder of shares of Purchaser
Stock (other than Gilat Israel and its Affiliates).
9.3 This Closing Agreement may be executed in any number of counterparts, each
of which shall be an original, but all of which together shall constitute one
instrument.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, each of the Parties has caused this Closing
Agreement to be duly executed on its behalf either by itself or by one of its
officers thereunto duly authorized, all as of the date and year first above
written.
PURCHASER:
rSTAR CORPORATION
By: /s/ Xxxxx Xxxxxxxxx
---------------------------------------------------
Name: Xxxxx Xxxxxxxxx
Title: CEO and Chairman of the Board of Directors
SELLER:
GILAT TO HOME LATIN AMERICA
(HOLLAND) N.V.
By: /s/ Amit Ancikovsky
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Name: Amit Ancikovsky
Title: Chief Financial Officer
GILAT SATELLITE NETWORKS LTD
By: /s/ Xxxx Gat
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Name: Xxxx Gat
Title: Chairman of the Board of Directors and
Chief Executive Officer
