<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
March 9, 2000
-------------
Date of Report (Date of earliest reported)
UNITED PAN-EUROPE COMMUNICATIONS N.V.
(Exact Name of Registrant as Specified in its Charter)
Netherlands 000-25365 98-0191997
(State or other Jurisdiction of (Commission File Number) (IRS Employer
Incorporation) Identification No.)
Fred. Roeskestraat 123
PO Box 74763
1070 BT Amsterdam, The Netherlands
----------------------------------
(Address of Registrant's Principal Executive Offices) (Zip Code)
011-31-20-778-9840
(Registrant's telephone number, including area code)
<PAGE>
Item 5. Other Events
On March 9, 2000, United Pan-Europe Communications N.V. ("UPC") announced that
it had entered into an Exchange Offer Agreement (the "Agreement") with SBS
Communications S.A., a public limited liability corporation organized under the
laws of Luxembourg ("SBS"), providing for an exchange offer (the "Offer") by UPC
to acquire all outstanding shares of common stock, par value $1.50 per share, of
SBS (the "Shares") at a per Share price (the "Offer Price") consisting of US$40
in cash and 0.19048 shares of Ordinary Shares A of UPC. The stock portion of the
Offer Price is subject to a price adjustment or "collar" as described below.
The Offer is currently expected to commence in the third quarter after a
registration statement has been filed with the U.S. Securities and Exchange
Commission and declared effective and offer documents become available. The
Offer will be conditioned upon receipt by UPC of Shares that, together with the
approximately 23% of outstanding Shares currently held by UPC and its
affiliates, represent at least 66 2/3% of the outstanding Shares on a fully
diluted basis and other conditions set out in the Agreement. The stock portion
of the Offer Price will be subject to a collar provision whereby SBS
shareholders will receive not less than a total value of US$77.50 and not more
than US$86.00 for each Share based on UPC's average closing share price on
NASDAQ prevailing on the trading days ending shortly prior to the making of the
Offer. Furthermore, the parties will work together to obtain the necessary and
appropriate consents and approvals to proceed with the transaction.
Notwithstanding the foregoing, if the average closing share price for the UPC
Ordinary Shares A on NASDAQ for any consecutive ten-day period occurring from
the date of the Agreement until the third business day prior to the commencement
of the Offer is less than or equal to $147.00 per share, then UPC may, under
certain specified circumstances, terminate the Agreement and, accordingly, not
commence the Offer.
UPC has agreed for a period of six months after the completion of the Offer to
use its reasonable best efforts (subject to restrictions imposed by applicable
law) to cause any minority shareholders in the Company remaining after the
completion of the Offer to receive promptly consideration for their Shares that
it is equal to the Offer Price. The means by which UPC conducts such minority
buyout will be at UPC's reasonable discretion and may include redemption, merger
or other corporate actions.
Certain directors of SBS holding in the aggregate approximately 4% of the Shares
have each entered into a Share Exchange Agreement with UPC, dated March 9, 2000,
agreeing, among other things, to tender their Shares in the Offer.
On March 9, 2000 UPC and SBS issued a joint press release (the "Press Release")
announcing the execution of the Agreement.
The Agreement, the Share Exchange Agreement and the Press Release are attached
as Exhibits 10.1, 10.2 and 99.1, respectively, and are incorporated by reference
herein. The descriptions of the Agreement and Share Exchange Agreement set forth
above are not complete and are qualified in their entirely by reference to the
provisions of such agreements.
-2-
<PAGE>
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(a) Financial Statements.
None.
(b) Pro Forma Financial Information.
None.
(c) Exhibits:
10.1 Exchange Offer Agreement dated as of March 9, 2000, by and between
United Pan-Europe Communications N.V. and SBS Broadcasting S.A.
10.2 Share Exchange Agreement, dated as of March 9, 2000, by and between
United Pan-Europe Communications N.V. and the individual shareholders
named therein.
99.1 Press Release, dated March 9, 2000.
-3-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 the
Registrant has duly caused this report to be signed by the undersigned thereunto
duly authorised.
UNITED PAN-EUROPE COMMUNICATIONS N.V.
By: /s/ ANTON TUIJTEN
------------------
Name: ANTON TUIJTEN
Title: GENERAL COUNSEL
Date: March 13, 2000
-4-
<PAGE>
INDEX OF EXHIBITS
Exhibit No. Exhibit
10.1 Exchange Offer Agreement, dated as of March 9, 2000, by and
between United Pan-Europe Communications N.V. and SBS
Broadcasting S.A.
10.2 Share Exchange Agreement, dated March 9, 2000, by and between
United Pan-Europe Communications N.V. and the shareholders named
therein.
99.1 Press Release, dated March 9, 2000
-5-
<PAGE>
EXHIBIT 10.1
EXCHANGE OFFER AGREEMENT
BETWEEN
UNITED PAN-EUROPE COMMUNICATIONS N.V.
AND
SBS BROADCASTING S.A.
Dated as of March 9, 2000
<PAGE>
TABLE OF CONTENTS
(continued)
Page
ARTICLE I THE OFFER...................................................2
Section 1.01. The Exchange Offer..........................................2
Section 1.02. Company Actions.............................................7
Section 1.03. Shareholder Lists...........................................8
Section 1.04. Directors...................................................8
Section 1.05. Standstill Agreement........................................9
Section 1.06. Minority Buy-Out............................................9
ARTICLE II TREATMENT OF OPTIONS........................................9
Section 2.01. Treatment of Options........................................9
ARTICLE III PAYMENT FOR SHARES TENDERED ...............................11
Section 3.01. Prompt Payment ............................................11
Section 3.02. Transfer Taxes.............................................11
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE COMPANY..............11
Section 4.01. Organization and Qualification.............................11
Section 4.02. Capitalization.............................................12
Section 4.03. Authority for this Agreement...............................13
Section 4.04. Consents and Approvals; No Violation.......................13
Section 4.05. Reports; Financial Statements..............................14
Section 4.06. Absence of Certain Changes.................................15
Section 4.07. Schedule 14D-9 and Offer Documents.........................15
Section 4.08. Brokers....................................................15
Section 3.09. Employee Benefit Matters...................................16
Section 4.10. Litigation, etc............................................17
-i-
<PAGE>
TABLE OF CONTENTS
(continued)
Section 4.11. Tax Matters................................................17
Section 4.12. Compliance with Law; No Default............................18
Section 4.14. Intellectual Property......................................18
Section 4.15. Title to Properties. Entire Business.......................18
Section 4.16. Convertible Notes and Warrants.............................19
Section 4.17 Foreign Private Issuer.....................................19
Section 4.18. Material Contracts.........................................19
Section 4.19. Related Party Transactions.................................19
ARTICLE V REPRESENTATIONS AND WARRANTIES OF PURCHASER................19
Section 5.01. Organization and Qualification.............................19
Section 5.02. Authority for this Agreement...............................20
Section 5.03. Capitalization.............................................20
Section 5.04. Reports; Financial Statements..............................20
Section 5.05. Absence of Certain Changes.................................21
Section 5.06. Litigation, etc............................................21
Section 5.07. Compliance with Law; No Default............................21
Section 5.08. Offer Documents............................................22
Section 5.09. Consents and Approvals; No Violation.......................22
Section 5.10. Brokers....................................................23
Section 5.11 Available Funds............................................23
ARTICLE VI COVENANTS..................................................23
Section 6.01. Conduct of Business of the Company.........................23
Section 6.02. No Solicitation............................................26
-ii-
<PAGE>
TABLE OF CONTENTS
(continued)
Section 6.03. Access to Information......................................27
Section 6.04. Reasonable Best Efforts....................................28
Section 6.05. Legal Challenges...........................................28
Section 6.06. Notification of Certain Matters............................28
Section 6.07. Press Releases.............................................29
Section 6.08. Cross-Media Ownership......................................29
Section 6.09. Accountants' Comfort Letters...............................29
Section 6.10. Indemnification; Directors' and Officers' Insurance........29
ARTICLE VII INTENTIONALLY LEFT BLANK........................................30
ARTICLE VIII TERMINATION; AMENDMENT; WAIVER.................................30
Section 8.01. Termination................................................30
Section 8.02. Effect of Termination......................................31
Section 8.03. Fees and Expenses..........................................31
Section 8.04. Amendment..................................................32
Section 8.05. Extension; Waiver; Remedies................................33
ARTICLE IX MISCELLANEOUS..............................................33
Section 9.01. Survival of Representations and Warranties.................33
Section 9.02. Entire Agreement; Assignment...............................33
Section 9.03. Enforcement of the Agreement; Jurisdiction.................33
Section 9.04. Validity...................................................34
Section 9.05. Notices....................................................34
Section 9.06. Governing Law..............................................36
Section 9.07. Descriptive Headings.......................................36
-iii-
<PAGE>
TABLE OF CONTENTS
(continued)
Section 9.08. Parties in Interest........................................36
Section 9.09. Counterparts...............................................36
Section 9.10 Adjustment to Purchaser Shares.............................36
Section 9.11. Certain Definitions........................................36
EXHIBIT A CONDITIONS TO THE OFFER....................................37
-iv-
<PAGE>
EXCHANGE OFFER AGREEMENT
EXCHANGE OFFER AGREEMENT (this "Agreement"), dated as of March 9, 2000, by
and between United Pan-Europe Communications N.V., a public limited liability
company (naamloze vennootschap) organized and existing under the laws of The
Netherlands ("Purchaser") and SBS Broadcasting S.A., a public limited liability
corporation (societe anonyme) organized and existing under the laws of
Luxembourg (the "Company"). Capitalized terms have the meanings ascribed to them
throughout this Agreement or in Section 9.11 of this Agreement.
W I T N E S S E T H :
WHEREAS, each of the Board of Supervisory Directors and the Board of
Managing Directors of Purchaser and the Board of Directors of the Company have
determined that this Agreement and the transactions contemplated hereby are
advisable and fair to, and in the best interests of, each corporation and its
respective shareholders in order to promote the long term strategic interest of
each of them;
WHEREAS, the Board of Directors of the Company has adopted resolutions
approving this Agreement and the transactions contemplated hereby, including the
Offer (as defined herein), and has agreed to recommend that the Company's
shareholders accept the Offer and tender their Shares (as defined in the
"Definitions" section) in the Offer;
WHEREAS, the shares of common stock of the Company are listed on the AEX-
Stock Exchange and on NASDAQ, and the Ordinary Shares A of Purchaser are listed
on the Amsterdam Stock Exchange and American Depositary Shares representing
Ordinary Shares A of Purchaser are listed for quotation on the NASDAQ National
Market;
WHEREAS, the Company is a "foreign private issuer" as such term is defined
in Rule 3b-4(c) under the Exchange Act;
WHEREAS, Purchaser holds as of the date of this Agreement 6,000,000 Shares
representing approximately 18% of the Shares on a fully-diluted basis;
WHEREAS, Purchaser intends to commence an offer for all of the Shares,
including an offer in the United States for Shares held by U.S. holders;
WHEREAS, as a condition and inducement to Purchaser's willingness to enter
into this Agreement, Purchaser and certain holders of Shares are simultaneously
entering into Share Exchange Agreements pursuant to which such holders have
agreed to tender their Shares in the Offer, subject to the terms and conditions
contained therein;
WHEREAS, Purchaser and the Company desire to make certain representations,
warranties, covenants and agreements in connection with this Agreement.
NOW THEREFORE, in consideration of the mutual covenants and agreements set
forth herein, the parties hereto agree as follows:
1
<PAGE>
ARTICLE I
THE OFFER
Section 1.01. Exchange Offer.
--------------
(a) (i) Provided that this Agreement shall not have been
terminated in accordance with Section 8.01 and that none of the events
set forth in Exhibit A hereto shall have occurred or be existing,
Purchaser shall as promptly as practicable after the declaration by
the U.S. Securities and Exchange Commission (the "SEC") that the
Registration Statement to be filed by Purchaser on Form S-4 relating
to Ordinary Shares A (including American Depositary Shares
representing such Ordinary Shares A) to be issued by Purchaser (the
"Purchaser Shares") in the Offer (the "Form S-4"), has become
effective, commence (within the meaning of Rule 14d-2 under the
Exchange Act) an exchange offer (the "Offer") for all the Shares at a
per-share consideration consisting of US$40 of cash and the Number of
Purchaser Shares (as defined below) and Additional Cash (as defined
below) ("Offer Price"). No holder of Shares shall be entitled to
receive fractional Purchaser Shares, and if any such holder would
otherwise be so entitled, then such holder will receive cash without
interest in lieu of such fractional share, determined by multiplying
the fractional interest in Purchaser Shares to which such holder would
otherwise be entitled (after taking into account all Shares of the
Company then held of record by such holder) by the closing sale price
of a Purchaser Share as reported on NASDAQ on the Closing Date.
(ii) The "Number of Purchaser Shares" will be determined as
follows:-
(A) If the average closing sale price of Purchaser Shares on
NASDAQ for the 10 trading days prior to the Consideration Calculation
Date (as defined below) (the "Average Price") is equal to or greater
than US$210 but less than US$241.50 then there will be no Additional
Cash (as defined below) and the Number of Purchaser Shares per Share
will equal 0.1904762 per Share (the "Initial Exchange Ratio")
(B) If the Average Price is equal to or greater than US$241.50
then there will be no Additional Cash and the Number of Purchaser
Shares per Share will equal the result of US$46 divided by the Average
Price.
(C) If the Average Price is less than US$210 but more than US$168
then there will be no Additional Cash and the Number of Purchaser
Shares per Share will equal the result of US$40 divided by the Average
Price.
(D) If the Average Price is equal to or less than US$168 but
greater than US$147 then there will be no Additional Cash and the
Number of Purchaser Shares per Share will be equal to an amount
calculated as follows: ($40 - ($168 - Average Price) x 0.119047619)
divided by the Average Price.
(E) If the Average Price is equal to or less than US$147 then the
Number of Purchaser Shares per Share will be 0.255102 (the "Second
Exchange Ratio") plus a mixture of additional Purchaser Shares and
additional cash ("Additional Cash")
2
<PAGE>
determined by the Purchaser which mixture has, together with the
0.255102 Purchaser Shares, an aggregate value (calculating the part
(if any) comprised of Purchaser Shares at the Average Price) equal to
US$37.50.
If the Purchaser has a choice pursuant to Section
1.01(a)(i)(E)) to issue Purchaser Shares or pay Additional Cash it
will give notice to the Company of its choice.
The term "Consideration Calculation Date" means the third
US Business Day prior to the commencement date of the Offer.
The term "Exchange Ratio" means the number of Purchaser
Shares issued in respect of each Share expressed as a decimal after
taking account of all the adjustments required pursuant to Section
1.01(a)(i) and 1.01(a)(ii).
Notwithstanding the foregoing, if the average closing sale
price for Purchaser Shares on NASDAQ for any consecutive period of ten
trading days after the date hereof and prior to the Consideration
Calculation Date is equal to or less than US$147 (a "Trigger Event")
then the Purchaser may within two US Business Days following the end
of that period of the first occasion on which that event occurs elect
by giving notice to the Company to treat this Agreement as terminated
and if the Purchaser does not do so within such period it will not
thereafter be entitled to do so on any subsequent Trigger Event.
(iii) A three-for-one share split (the "Share Split") of
Purchaser Shares is proposed to take effect following an affirmative
vote of the shareholders of Purchaser at an extraordinary general
meeting scheduled for March 13, 2000. Should the Share Split be
effected, then following the Share Split, the Initial Exchange Ratio,
the Second Exchange Ratio and the number 0.119047619 in Section
1.01(ii)(D) will be adjusted by multiplying them by three and the
various prices for Purchaser Shares of US$210, US$241.50, US$168, and
US$147 set out in Section 1.01(a)(ii) will be divided by three, and
any other terms of this Agreement, including the formula set forth in
Section 1.01(a)(ii)(D), will be adjusted appropriately to give effect
to the Share Split.
(iv) Company shareholders validly accepting the Offer may elect
to receive more cash than they would otherwise be entitled pursuant to
the terms set out in Section 1.01(a)(i) and 1.01(a)(ii) above (the
"Basic Terms"). Such elections shall be satisfied in full if
sufficient cash is available as a result of other Company shareholders
accepting the Offer electing to receive additional Purchaser Shares
and thereby releasing cash to which they would otherwise be entitled
under the Basic Terms. If the amount of cash so made available is
insufficient to satisfy in full all elections for additional cash then
such elections shall be scaled down pro rata as nearly as practicable
and the balance of consideration shall be satisfied under the Basic
Terms. Company shareholders validly accepting the Offer may elect to
receive more Purchaser Shares than they would otherwise be entitled
pursuant to the Basic Terms. Such elections shall be satisfied in full
if sufficient Purchaser Shares are available as a result of other
accepting Company Shareholders electing to receive additional cash and
thereby releasing Purchaser Shares to which they would otherwise be
entitled under the Basic Terms. If the amount of Purchaser Shares so
made available is insufficient to satisfy in full all elections for
additional Purchaser Shares then such elections shall be scaled down
pro rata as nearly as
3
<PAGE>
practicable and the balance of consideration shall be satisfied
under the Basic Terms (the elections in this paragraph are referred to
as the "Mix and Match Election"). The basis on which cash will be
forgone for Purchaser Shares pursuant to the Mix and Match Election
and vice versa will be determined by valuing Purchaser Shares at the
Average Price. Shareholders will forego cash for Purchaser Shares of
equal value on that basis and vice versa. In no event shall any
Company shareholder be entitled to receive as a result of the Mix and
Match Election an aggregate amount of cash and Purchaser Shares that
exceeds in value at the Average Price the Basic Terms. The Purchaser
shall deposit the amount of cash and Purchaser Shares payable pursuant
to the Basic Terms with an exchange agent or agents selected by
Purchaser, with the Company's prior approval, which shall not be
unreasonably withheld (the "Exchange Agent"), prior to or on the
Closing Date. The Exchange Agent, after consultation with Purchaser
and the Company, shall make all computations to give effect to this
Section and will pay or distribute to holders of record of Shares who
have validly accepted the Offer first the cash due to them and then on
the same day the Purchaser Shares promptly after the Closing Date.
(v) The obligation of Purchaser to consummate the Offer and to
accept for payment and to pay for any Shares tendered pursuant thereto
shall be subject to those conditions set forth in Exhibit A hereto
(the "Offer Conditions"), any of which may be waived by Purchaser in
its sole discretion. The initial expiration date of the Offer shall be
the twentieth (20th) U.S. Business Day following the commencement of
the Offer (determined in accordance with Rule 14d-1(g)(3) under the
Exchange Act). Purchaser expressly reserves the right to modify the
terms of the Offer, except that, without the prior written consent of
the Company, Purchaser shall not (A) decrease the Offer Price or
change the form of the consideration payable in the Offer, (B)
decrease the number of Shares sought pursuant to the Offer, (C) impose
additional conditions to the Offer, (D) change the conditions to the
Offer (any of which may be waived by Purchaser in its sole discretion)
or (E) make any other change in the terms of the Offer which is
adverse to the holders of Shares.
(vi) Subject to the terms and conditions of this Agreement and to
the satisfaction or waiver of the Offer Conditions as of any scheduled
expiration of the initial offering period of the Offer, Purchaser
shall accept for payment and pay for Shares validly tendered and not
withdrawn pursuant to the Offer as soon as practicable after such
scheduled expiration, which, in the case of payment for Shares listed
on the AEX-Stock Exchange, shall occur three Amsterdam Exchange Days
after the expiration of the Offer. The date on which such acceptance
and payment shall first occur is referred to herein as the "Closing
Date." Notwithstanding the foregoing, Purchaser may, without the
consent of the Company, (A) extend the initial offering period of the
Offer if at any scheduled expiration of the initial offering period,
any of the Offer Conditions has not been satisfied or waived, (B)
extend the Offer for any period required by any regulation of the SEC
or any foreign governmental regulatory authority applicable to the
Offer or (C) extend the Offer on one or more occasions (but not beyond
September 30, 2000) if on any expiration date permitted hereunder
there shall not have been validly tendered and not properly withdrawn
prior to such expiration that number of Shares which, together with
any Shares beneficially owned by Purchaser or any of its affiliates,
represents at least 90% of the total outstanding Shares on a
fully-diluted basis. Notwithstanding the foregoing, if requested by
the Company, Purchaser shall extend the initial offering period (i)
for an aggregate period of not more than 10 U.S. Business Days if at
any scheduled expiration
4
<PAGE>
of the initial offering period any of the Offer Conditions have not
been satisfied or waived and all such conditions are reasonably
capable of being satisfied and (ii) for an aggregate period of not
more than 15 U.S. Business Days if the Offer period has not been
previously extended and at the expiration of the initial Offer period,
there shall not have been validly tendered and not properly withdrawn
prior to such expiration that number of Shares which, together with
any Shares beneficially owned by Purchaser or any of its affiliates,
represents at least 90% of the total outstanding Shares on a
fully-diluted basis. In addition, the Offer Price may be increased and
the Offer may be extended to the extent required by any Applicable Law
or Rule in connection with such increase, in each case, without the
consent of the Company.
(b) If the Purchaser desires to make any pre-commencement
communication as contemplated under Rule 14d-2(b) under the Exchange
Act and in compliance with Rule 135 on Rule 165 under the Securities
Act, on the date of the pre-commencement communication, Purchaser
shall file or cause to be filed with the SEC such communication
relating to the Offer pursuant to Rule 425 under the Securities Act,
and deliver to the Company a copy of such communication. If the
Company desires to make any pre-commencement communication as
contemplated under Rule 14d-9(a) under the Exchange Act and in
compliance with Rule 135 or Rule 165 under the Securities Act, the
Company shall file or cause to be filed with the SEC such
communication relating to the Offer pursuant to Rule 425 under the
Securities Act, and deliver to the Purchaser a copy of such
communication.
(c) On the date of commencement of the Offer in the United
States, Purchaser shall file or cause to be filed with the SEC a
Tender Offer Statement and Rule 13e-3 Transaction Statement on
Schedule TO, including all exhibits thereto (together with all
amendments and supplements thereto, a "Schedule TO") with respect to
the Offer which will comply in all material respects with the
provisions of, and satisfy in all material respects the requirements
of, such Schedule TO and all applicable U.S. federal securities laws,
and will contain (including as an exhibit) or incorporate by reference
the Offer to Exchange and forms of the related letter of transmittal
and summary advertisement and any other documents pursuant to which
the Offer will be made in the United States (collectively with any
supplements or amendments thereto, and including the final prospectus
contained in the effective Registration Agreement (as defined below)
and any amendments and supplements to such prospectus, the "U.S. Offer
Documents").
(d) The Company and its counsel shall be given a reasonable
opportunity to review and comment on the initial U.S. Offer Documents
prior to their filing with the SEC. Purchaser agrees to provide the
Company with, and to consult with the Company regarding, any comments
that may be received from the SEC or its staff with respect to the
U.S. Offer Documents promptly after receipt thereof. Purchaser and the
Company each agree promptly to correct any information provided by it
for use in any U.S. Offer Document if and to the extent that it shall
have become false or misleading in any material respect and Purchaser
further agrees to take all steps necessary to cause the U.S. Offer
Documents as so corrected to be filed with the SEC and be disseminated
to holders of Shares, in each case, as and to the extent required by
applicable law.
(e) On the date of commencement of the Offer in The Netherlands
(which shall be the same date as the date of the commencement of the
Offer in the United
5
<PAGE>
States,) offer documents relating to the Offer prepared in accordance
with any Applicable Law or Rule of The Netherlands (the "Netherlands
Offer Documents") shall be made generally available to the public in
The Netherlands. The commencement of the Offer and the availability of
the Netherlands Offer Documents shall be announced in AEX's Official
Price List (Officiele Prijscourant) and in at least one newspaper with
a nationwide circulation in The Netherlands one day prior to such
commencement.
(f) Prior to commencement of the Offer in the United States and
The Netherlands, Purchaser shall prepare and file with the SEC as soon
as reasonably practicable after the date hereof a Registration
Statement on Form S-4 relating to the Purchaser Shares to be issued in
connection with the Offer (the "Registration Statement"). Purchaser
and the Company shall use all reasonable best efforts to have the
Registration Statement declared effective by the SEC as promptly as
practicable after such filing. The Purchaser and the Company shall
cooperate with each other in the preparation of the Registration
Statement or any amendment or supplement thereto and each shall notify
the other of the receipt of any comments of the SEC with respect to
the Registration Statement and of any requests by the SEC for any
amendment or supplement thereto, and shall provide to the other as
promptly as practicable copies of all correspondence with respect to
the Registration Statement. Purchaser shall give the Company and its
counsel the opportunity to review the Registration Statement and all
responses to requests for additional information by and reply to
comments of the SEC before their being filed with, or sent to, the
SEC. Each of Purchaser and the Company agrees to use its reasonable
best efforts, after consultation with the other party hereto, to
respond as promptly as practicable to all such comments of and
requests by the SEC and to cause the Registration Statement to be
declared effective by the SEC, and the prospectus contained thereto to
be mailed at the earliest practicable time to the holders of Shares.
(g) Purchaser shall not later than at the time of their
publication submit copies of all public announcements and filings
(including announcements and filings made outside The Netherlands) in
connection with the Offer to the Committee for Merger Affairs of the
Social Economic Council (Commissie voor Fusieaangelegenheden van de
Sociaal-Economisch Raad; the "Committee") and the AEX-Stock Exchange.
To the extent compliance with Chapter 1 of the Netherlands Merger Code
(as defined herein) does not appear from the documents submitted to
the Committee in accordance with the preceding sentence, the Purchaser
shall inform the Committee thereof. Pursuant to section 3, paragraph 3
of the Netherlands Merger Code, at all times subsequent to the public
announcement that a firm intention to commence the Offer exists (as
referred to in Section 6.07 hereof) is made, the Board of Managing
Directors of Purchaser shall inform the Committee of any transactions
in Shares or agreements in respect of a transaction in Shares effected
or entered into by Purchaser after that moment. The Board of Managing
Directors of Purchaser shall also inform the Committee of the
conditions applicable to such transactions or agreements and the
percentage stake held by the Purchaser in the Company as a consequence
thereof. Furthermore, the Board of Managing Directors of Purchaser
shall inform the Committee of any transactions in Shares or any
agreements in respect of a transaction in Shares not effected or
entered into by Purchaser but which are known to the Board of Managing
Directors of Purchaser. The disclosure to the Committee referred to in
this paragraph (g) shall be made promptly after a relevant transaction
or agreement has been effected or has been entered into or has become
known to the Board of Managing Directors of Purchaser. The duty to
inform the Committee in
6
<PAGE>
accordance with this paragraph (g) shall remain in force until the
moment it is publicly announced that the Offer has expired, is
withdrawn or shall not be commenced.
(h) The parties intend that the Offer shall be extended to all
holders of Shares, including holders of Shares outside the United
States and The Netherlands. If the law of a country or territory
(other than the United States of America or any part thereof, The
Netherlands or Luxembourg) precludes the making of the Offer in that
country or territory or to persons in that country or territory or so
precludes the making of the Offer except after compliance by the
Purchaser with conditions which the Purchaser regards as onerous
(together, "Illegality") then the Purchaser may vary the Offer made
with regard to holders of Shares to whom the Illegality is applicable,
provided that the variation is such that such holders of Shares are
able to receive consideration of a substantially equivalent value to
that which they would have received, but for the variation.
(i) In order to achieve maximum participation in the Offer,
Purchaser agrees to retain the services of a shareholder
communications agent to facilitate distribution of information
relating to the Offer and to solicit tenders and assist holders to
tender their Shares in connection with the Offer.
Section 1.02. Company Actions.
---------------
(a) The Company represents and warrants that (i) (with the
exception of the current board member nominated by Purchaser), its
Board of Directors (at a meeting or meetings duly called and held
prior to the date hereof) has duly and unanimously (A) approved entry
into this Agreement and the transactions contemplated hereby, (B)
determined that the terms of the Offer are fair to and in the best
interests of the Company and its shareholders, (C) resolved to
recommend acceptance of the Offer and the tender of Shares by the
shareholders of the Company, and (D) resolved to (1) consent to the
acquisition of Shares contemplated by this Agreement and to the voting
of Shares so acquired, as contemplated by the Company's Articles of
Incorporation (statuts coordonnes) and (2) elect, to the extent
permitted by any Applicable Law or Rule, not to be subject to any
other form of anti-takeover laws and regulations (collectively,
"Takeover Laws") of any jurisdiction that may purport to be applicable
to this Agreement; (ii) the Company has complied, in all material
respects and to the extent applicable, with Rule 4320(e)(21)(G) of the
NASDAQ Stock Market; and (iii) the Board of Directors of the Company
has received the opinion of Donaldson, Lufkin & Jenrette
International, the Company's independent financial advisor, ("Company
Adviser") to the effect that, in its opinion, as of the date of this
Agreement, the consideration to be received in the Offer by the
holders of Shares is fair, from a financial point of view, to such
holders (other than the Purchaser and its affiliates), a true and
complete copy of which will be delivered to the Purchaser as soon as
practicable following the execution and delivery of this Agreement. It
is understood and agreed that such opinion is for the benefit of the
Company's Board of Directors and may not be relied upon by Purchaser
or any of its affiliates. The Company has been advised by each of its
directors and executive officers listed in Section 1.02 of the
Disclosure Letter that each such person currently intends to tender
all Shares beneficially owned by such person pursuant to the Offer.
(b) Upon commencement of the Offer in the United States, the
Company shall file with the SEC a Solicitation/Recommendation
Statement on Schedule 14D-9
7
<PAGE>
including all exhibits thereto (together with all amendments and
supplements thereto, a "Schedule 14D-9") which shall comply in all
material respects with the provisions of, and satisfy in all
material respects the requirements of, such Schedule 14D-9 and all
other applicable U.S. federal securities laws, and will contain the
recommendations of its Board of Directors described in Section
1.02(a) and hereby consents to the inclusion of such recommendations
in the Offer Documents and to the inclusion of a copy of the
Schedule 14D-9 with the Offer Documents mailed or furnished to the
Company's shareholders, provided, however, that the Company's Board
of Directors may thereafter withdraw or amend such recommendations
in accordance with Section 6.02 hereunder. The Purchaser and its
counsel shall be given a reasonable opportunity to review and
comment on any Schedule 14D-9 prior to its filing with the SEC. The
Company agrees to provide the Purchaser with, and to consult with
Purchaser regarding, any comments that may be received from the SEC
or its staff with respect to any Schedule 14D-9 promptly upon
receipt thereof. The Company and Purchaser each agrees promptly to
correct any information provided by it for use in the Schedule 14D-9
if and to the extent that it shall have become false or misleading
in any material respect and the Company further agrees to take all
steps necessary to cause the Schedule 14D-9 as so corrected or
amended to be filed with the SEC and to be disseminated to holders
of Shares, in each case, as and to the extent required by any
Applicable Law or Rule.
Section 1.03. Shareholder Lists. In connection with the Offer, the Company
-----------------
shall promptly furnish or cause to be furnished to Purchaser (or a
suitable designated agent) mailing labels, security position listings,
and any available listing or computer file containing the names and
addresses of the record holders of the Shares as of the latest
practicable date and shall furnish Purchaser (or suitable designated
agent) with such information and assistance (including periodic
updates of such information) as Purchaser (or suitable designated
agent) or its agents may reasonably request in communicating the Offer
to the record and beneficial holders of the Shares. Subject to the
requirements of any Applicable Law or Rule, and except for such steps
as are necessary to disseminate the U.S. Offer Documents and any other
documents necessary to consummate the Offer, Purchaser shall (i) hold
in confidence the information contained in any such labels, listings
and files, (ii) use such information only in connection with the Offer
and, (iii) if this Agreement shall be terminated, shall, upon request,
deliver to the Company all copies of such information then in its
possession; provided, however, that the provisions of this sentence
shall no longer be of any force or effect upon the purchase of the
Shares tendered pursuant to the Offer.
Section 1.04. Directors. Promptly upon the purchase of Shares by Purchaser
---------
pursuant to the Offer, provided that the Minimum Tender Condition is
satisfied, Purchaser shall be entitled to designate such number of
directors on the Board of Directors of the Company as will give
Purchaser representation on the Board of Directors of the Company
constituting a majority of the number of directors on the Board of
Directors of the Company, and the Company shall take all actions
required to be taken by the Company in order to provide Purchaser with
such level of representation and to cause Purchaser's designees to be
so elected. In order to enable such action to be taken immediately by
the Board of the Company appointing new directors in replacement for
them, each of Michael Finkelstein, Anthony Ghee, Martin Lindskog,
James McNamara, Jorgen Nilsson and Jesper Smith will agree (no later
than promptly after the signing of this Agreement) to resign as
directors of the Company at such time. The Company shall also take all
actions required to be taken by the Company in order to cause persons
designated by Purchaser to
8
<PAGE>
constitute a majority of Directors of the Company on (i) each
committee of the Board of Directors of the Company and (ii) each Board
of Directors and each committee thereof of each Subsidiary of the
Company.
Section 1.05. Standstill Agreement. The Company, the Purchaser and United
--------------------
Global Com, Inc. have executed and delivered an agreement amending the
standstill provisions set forth in that certain Private Placement
Agreement, dated as of January 27, 2000, by and between the Company,
Purchaser and UnitedGlobalCom, Inc., including Section 2.2 thereof, to
permit the execution and delivery of this Agreement, the Offer and the
transactions contemplated hereby and thereby, and to permit purchases
of Shares by Purchaser or any of its affiliates after consummation of
the Offer.
Section 1.06. Minority Buy-Out. For a period of six months after the Closing
----------------
Date, Purchaser agrees to use its reasonable best efforts (subject to
restrictions imposed by Applicable Law or Rules) to cause any minority
shareholders in the Company remaining after the Closing Date to
receive promptly consideration for their Shares that is equal to the
Offer Price, or if such consideration is not permitted by Applicable
Law, consideration that is substantially equivalent to the Offer Price
(the "Minority Buy-Out"). The Company agrees to cooperate with
Purchaser and use its reasonable best efforts (subject to restrictions
imposed by Applicable Law or Rules) to facilitate the Minority Buy-
Out. The means by which the Purchaser conducts the Minority Buy-Out
shall be at its reasonable discretion and may include redemption,
merger or other corporate actions. Purchaser agrees to retain the
services of a shareholder communications agent to facilitate
distribution of information relating to any Minority Buyout and to
facilitate participation in any Minority Buy-Out.
ARTICLE II
TREATMENT OF OPTIONS
Section 2.01. Treatment of Options.
--------------------
(a) Purchaser and Company agree that they shall each take all
actions necessary such that at the Closing Date each outstanding
option or right to acquire Shares ("Company Option") granted under any
stock option or similar plan of the Company or under any agreement to
which the Company or a Subsidiary is a party shall become vested and
exercisable and each holder of Company Options shall be entitled at
the Closing Date to elect by notice to the Purchaser either option (i)
or (ii) below in respect of that holder's Company Options:
(i) The Purchaser shall pay against cancellation of the
applicable Company Option to such holder within 72 hours of the
Closing Date with respect to each of such holder's Company
Options an amount equal to the product of (A) the excess of the
Offer Price over the exercise price for that Company Option (the
"Option Spread") multiplied by (B) the number of Shares subject
to that Company Option, which amount shall be paid at such
holder's option in cash or Purchaser Shares (with the value of
Purchaser Shares for purposes of paying the Option Spread
9
<PAGE>
being equal to the Average Price), provided that holders of
Company Options electing this option (i) shall be subject to
proration such that such holders shall not receive in the
aggregate greater than 60 percent. of their consideration in
cash.
(ii) At the Closing Date, each of such holder's Company Options
shall be deemed to constitute options to acquire, on the same
terms and conditions as were applicable under such Company
Options, the number of Purchaser Shares equal to the result
(rounded down to the nearest whole share) of multiplying the
number of Shares subject to the Company Option immediately prior
to the Closing Date by the Conversion Ratio (as defined below),
at an exercise price per share equal to the result (rounded down
to the nearest whole share) of dividing (A) the per share
exercise price of such Company Option immediately prior to the
Closing Date by (B) the Conversion Ratio; provided, however, that
-------- -------
in the case of any Company Option to which Section 422 of the
Code applies, the adjustments provided for in this Section shall
be effected in a manner consistent with the requirements of
Section 42(a) of the Code, and provided, further, that each
-------- -------
holder of a Company Option electing this option shall be entitled
by notice to require the Purchaser to purchase for cash up to 50
percent of each of that holder's Company Options at a price equal
to the product of the applicable Option Spread multiplied by the
number of Shares subject to such Company Options, with the
balance of such Company Options being converted in accordance
with this paragraph. At or prior to the Closing Date, the Company
and the Purchaser shall make all necessary arrangements with
respect to their stock option plans to permit the assumption of
the unexercised Company Options by Purchaser pursuant to this
Section. For purposes of this Section, the term "Conversion
Ratio" means a fraction, the numerator of which is the average of
the high and low sales price of one Share on NASDAQ and on the
three trading days immediately preceding the Closing Date and the
denominator of which is the average of the high and low sales
price of one Purchaser Share on NASDAQ on the trading day
immediately preceding the Closing Date. If a holder fails to make
a timely election for option (i) or (ii) pursuant to this
paragraph (a), such holder shall be deemed to have elected option
(i) and to receive equal parts cash and Purchaser Shares under
option (i).
(b) Effective at the Closing Date, Purchaser shall assume each
Company Option in accordance with the terms of the stock option agreement
by which it is evidenced. At or prior to the Closing Date, Purchaser
shall take all corporate action necessary to reserve for issuance a
sufficient number of Purchaser Shares for delivery upon exercise of
Company Options assumed by it in accordance with this Section. As soon as
practicable after the Closing Date, if any Company Options are converted
pursuant to paragraph (a)(ii) of this Section 2.01 Purchaser shall file a
registration statement on Form S-8 (or any successor or other appropriate
form) or, to the extent required, another appropriate form with respect
to the Purchaser Shares subject to such Company Options, and shall use
its reasonable best efforts to maintain the effectiveness of such
registration statement (and maintain the current status of the prospectus
or
10
<PAGE>
prospectuses contained therein) for so long as such Company Options
remain outstanding.
(c) The Purchaser and the Company shall cooperate and take such
reasonable actions as may be available pursuant to exemptions
available under Rule 16b-3 of the Exchange Act or such other guidance
as may be promulgated by the SEC so that the acquisition of Purchaser
Shares or options to acquire Purchaser Shares pursuant to this
Agreement and the transactions contemplated in this Section 2.01 shall
be exempt transactions for purposes of Section 16 of the Exchange Act
by any officer or director of the Company who may become a covered
person of Purchaser for purposes of Section 16 ("Section 16").
ARTICLE III
PAYMENT FOR SHARES TENDERED
Section 3.01. Prompt Payment. Promptly after the Closing Date, Purchaser shall
--------------
cause payment to be made for all Shares properly tendered and not
withdrawn in accordance with Rule 14e-1(c) under the Exchange Act and
all requirements of applicable Luxembourg law and no later than the
third Amsterdam Exchange Day after such acceptance in accordance with
the rules and regulations of the AEX-Stock Exchange.
Section 3.02. Transfer Taxes. Any stamp or transfer taxes payable in connection
--------------
with purchases of Shares by Purchaser in the Offer and any capital
duty payable in The Netherlands in connection with the issuance of
Purchaser Shares pursuant to the Offer shall be paid by Purchaser.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth in (i) the Company SEC Reports (as defined herein) filed and
available prior to the date of this Agreement or (ii) with respect to any
Section of this Article IV, as set forth in the disclosure letter previously
delivered by the Company to Purchaser with respect to this Agreement (the
"Disclosure Letter"), the Company represents and warrants to Purchaser as
follows:
Section 4.01. Organization and Qualification. The Company and each of its
------------------------------
Subsidiaries is a duly organized and validly existing corporation
under the laws of its jurisdiction of incorporation, with all
corporate power and authority to own its properties and conduct its
business as currently conducted and is duly qualified as a foreign
corporation authorized to do business in each of the jurisdictions in
which the character of the properties owned or held under lease or
license by it or the nature of the business transacted by it makes
such qualification necessary, except where the failure to be so
qualified, individually or in the aggregate, would not have a Material
Adverse Effect. The Company has provided Purchaser with accurate and
complete copies of the Company's Articles of Incorporation
11
<PAGE>
(statuts coordonnes) as currently in effect and a structure chart
reflecting all of the Company's Subsidiaries. Neither the Company nor
any of its Subsidiaries, directly or indirectly, owns any interest or
investment (whether equity or debt) in any corporation, partnership
joint venture, limited liability company, trust or other entity, other
than in the Company's Subsidiaries and other than as reflected on the
structure chart described above.
Section 4.02. Capitalization.
--------------
(a) The authorized capital stock of the Company consists of
75,000,000 Shares. As of the date hereof, 25,725,590 Shares were
issued and outstanding (including all restricted Shares granted to
employees, officers, directors, or other service providers under any
plan, program, arrangement or agreement, whether or not vested), no
shares of Preferred Stock were issued and outstanding and 18,362
Shares were held (beneficial or otherwise) by the Company as treasury
shares or otherwise. As of the date hereof, (i) there were options
outstanding pursuant to the Company's share incentive plans or
otherwise to purchase an aggregate of 4,900,463 Shares, as set forth
in Section 4.02 of the Disclosure Letter, (ii) Paramount Television
Group holds a warrant to purchase up to 1,000,000 Shares and (iii) the
Company has outstanding US $75,000,000 in aggregate principal amount
of its 7% Convertible Subordinated Notes due 2004, which may be
converted into an aggregate of up to 2,574,665 Shares. No class of the
Company's capital stock is entitled to preemptive rights, and the
Company has not authorized or taken any action to split, combine or
reclassify any shares of its capital stock. All of the outstanding
Shares have been duly authorized and validly issued and are fully-paid
and nonassessable and are free of preemptive rights. Section 4.02(a)
of the Disclosure Letter contains a true, accurate and complete list,
as of the date hereof, of the name of each holder of employee stock
options, directors' stock options and any other options of the
Company, the number of outstanding options held by such holder, the
grant date of each such option, the number of Shares subject to such
option, and the corresponding exercise price. Except as set forth
above and in Section 4.02(a) of the Disclosure Letter, there are no
authorized, issued or outstanding (i) securities of the Company
convertible into or exchangeable for shares of capital stock or voting
securities or ownership interests in the Company, (ii) options,
warrants, rights or other agreements or commitments to acquire from
the Company, or obligations of the Company to issue, any capital
stock, voting securities or other ownership interests in (or
securities convertible into or exchangeable for capital stock or
voting securities or other ownership interests in) the Company, (iii)
obligations of the Company to grant, extend or enter into any
subscription, warrant, right, convertible or exchangeable security or
other similar agreement or commitment relating to any capital stock,
voting securities or other ownership interests in the Company (the
items in clauses (i), (ii) and (iii), together with the capital stock
of the Company, being referred to collectively as "Company
Securities") or (iv) obligations by the Company or any of its
Subsidiaries to make any payments based on the price or value of the
Shares. Except as set forth above, there are no outstanding
obligations of the Company or any of its Subsidiaries to repurchase,
redeem or otherwise acquire any Company Securities. There are no
voting trusts or other agreements or understandings to which the
Company or any of its Subsidiaries is a party with respect to the
voting of capital stock of the Company or any of its Subsidiaries.
(b) Except as disclosed in Section 4.02(b) of the Disclosure
Letter, the Company or another Subsidiary is the record and beneficial
owner of all the outstanding
12
<PAGE>
shares of capital stock of each Company Subsidiary, free and clear of
any lien, mortgage, pledge, charge, security interest or encumbrance
of any kind, and there are no irrevocable proxies with respect to any
such shares. Except as disclosed in Section 4.02(b) of the Disclosure
Letter, there are no outstanding (i) securities of the Company or any
of its Subsidiaries convertible into or exchangeable for shares of
capital stock or other voting securities or ownership interests in any
Subsidiary of the Company, (ii) options, warrants, rights or other
agreements or commitments to acquire from the Company or any of its
Subsidiaries (or obligations of the Company or any of its Subsidiaries
to issue) any capital stock, voting securities or other ownership
interests in, or any securities convertible into or exchangeable for
any capital stock, voting securities or ownership interests in, any of
its Subsidiaries, (iii) obligations of the Company or any of its
Subsidiaries to grant, extend or enter into any subscription, warrant,
right, convertible or exchangeable security or other similar agreement
or commitment relating to any capital stock, voting securities or
other ownership interests in any of the Company's Subsidiaries (the
items in clauses (i), (ii) and (iii), together with the capital stock
of such Subsidiaries, being referred to collectively as "Subsidiary
Securities") or (iv) obligations of the Company or any of its
Subsidiaries to make any payment based on the value of any shares of
any Subsidiary. There are no outstanding obligations of the Company or
any of its Subsidiaries to repurchase, redeem or otherwise acquire any
outstanding Subsidiary Securities.
Section 4.03. Authority for this Agreement. The Company has all necessary
----------------------------
corporate power and authority to execute and deliver this Agreement
and to consummate the transactions contemplated hereby. The execution
and delivery of this Agreement by the Company and the consummation by
the Company of the transactions contemplated hereby have been duly and
validly authorized by the Board of Directors of the Company and no
other corporate proceedings (including for the avoidance of doubt, the
advice, consent or consultation of any works council, labor unions or
similar employee representative) on the part of the Company are
necessary to authorize this Agreement or to consummate the
transactions so contemplated. This Agreement has been duly and validly
executed and delivered by the Company and, assuming the due
authorization, execution and delivery of this Agreement by Purchaser,
constitutes a legal, valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms, except
to the extent that its enforceability may be limited by bankruptcy,
insolvency, reorganization, fraudulent conveyance, fraudulent
transfer, moratorium or other laws relating to or affecting creditors'
rights generally and by general principles of equity.
Section 4.04. Consents and Approvals; No Violation. Neither the execution and
------------------------------------
delivery of this Agreement by the Company nor the consummation of the
transactions contemplated hereby will (a) violate or constitute a
breach of any provision of the respective governing documents of the
Company or any of its Subsidiaries, (b) require any consent, approval,
authorization or permit of, or filing with or notification to, any
governmental, judicial, legislative, executive, administrative or
regulatory authority, agency, commission, tribunal or body having
valid jurisdiction (which shall include the Committee and the AEX
Listing and Issuing Rules) (a "Governmental Entity"), except as may be
required by or under the Hart-Scott-Rodino Antitrust Improvements Act
of 1976, as amended (the "HSR Act"), the Securities Act, the Exchange
Act, NASDAQ, the AEX - Stock Exchange, the European Union Merger Task
Force, any relevant competition, anti-trust, media or broadcast laws
and regulations in any Member State of the European Union, any
competition, anti-trust, media or broadcast laws and regulations in
any other
13
<PAGE>
applicable jurisdiction, (c) other than with respect to media or
broadcast licenses and permits, require any consent, waiver or
approval or result in a default (or give rise to any right of
termination, cancellation, modification or acceleration or right to
require the transfer of any license or material asset) under any of
the terms, conditions or provisions of any note, permit, license,
agreement, contract, indenture or other instrument or obligation to
which the Company or any of its Subsidiaries is a party or by which
the Company or any of its Subsidiaries or any of their respective
assets may be bound, (d) result in the creation or imposition of any
mortgage, lien, pledge, charge, security interest or encumbrance of
any kind on any asset of the Company or any of its Subsidiaries or (e)
violate any order, writ, injunction, decree, statute, rule or
regulation including the Netherlands Merger Code applicable to the
Company or any of its Subsidiaries or by which any of their respective
assets are bound, except, in the case of clauses (b), (c), (d) and
(e), for cross-media ownership restrictions in Hungary or for any of
the foregoing that would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect or a material
adverse effect on the ability of the parties to consummate the
transactions contemplated hereby.
Section 4.05. Reports; Financial Statements.
-----------------------------
(a) Since January 1, 1999, the Company has timely filed (or
furnished, in the case of Form 6-K's) all forms, reports and documents
required to be filed (or documents furnished, in the case of Form 6-
K's) by it with the SEC, all of which have complied as of their
respective filing dates in all material respects with all applicable
requirements of the Exchange Act and the Securities Act. True and
correct copies of all filings (or "documents" or "reports" furnished,
in the case of Form 6-K's) , including exhibits, made by the Company
with the SEC since such date and prior to the date hereof (the
"Company SEC Reports"), whether or not required under applicable laws,
rules and regulations and including any registration statement filed
by the Company under the Securities Act, have been furnished or made
available to Purchaser. None of the Company SEC Reports, including any
financial statements or schedules included or incorporated by
reference therein, at the time filed, contained any untrue statement
of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein,
in light of the circumstances under which they were made, not
misleading. All of the Company's SEC Reports, as of the respective
dates (and as of the date of any amendment thereto), complied as to
form in all material respects with the applicable requirements of the
Securities Act and the Exchange Act.
(b) Except as disclosed therein, the audited and unaudited
consolidated financial statements of the Company included (or
incorporated by reference) in the Company SEC Reports were prepared in
accordance with United States generally accepted accounting principles
applied on a consistent basis throughout the periods involved (except
as may be indicated in the notes thereto) and fairly presented, in all
material respects, the consolidated financial position of the Company
and its Subsidiaries as of their respective dates, and the
consolidated results of operations and its cash flows for the periods
presented therein, except that the unaudited interim financial
statements were or are subject to normal and recurring year-end
adjustments which have not had a Material Adverse Effect.
14
<PAGE>
(c) Neither the Company nor any of its Subsidiaries has any
material liabilities of any nature, whether accrued, absolute, fixed,
contingent or otherwise, whether due or to become due and required to
be recorded or reflected on a consolidated balance sheet of the
Company under United States generally accepted accounting principles,
except (i) as reflected or reserved against or disclosed in the
financial statements of the Company included in the Company SEC
Reports, and (ii) liabilities incurred since December 31, 1999 that
(x) have been incurred in the ordinary course of business consistent
with past practice and (y) have not had and are not reasonably likely
to have, individually or in the aggregate, a Material Adverse Effect.
Section 4.06. Absence of Certain Changes. Since December 31, 1998, (a) the
--------------------------
Company and its Subsidiaries have not suffered any change, condition,
event or development that has had or that would reasonably be expected
to have a Material Adverse Effect, and (b) the Company and its
Subsidiaries have conducted their respective businesses only in the
ordinary course consistent with past practice, except for the
negotiation and execution and delivery of this Agreement.
Section 4.07. Schedule 14D-9 and Offer Documents.
----------------------------------
(a) None of the information supplied or to be supplied by or on
behalf of the Company or any affiliate of the Company (other than
Purchaser or any of its affiliates) for inclusion in any Offer
Document will, at the times such documents are published, filed with
the SEC and any other relevant Governmental Entity in the Netherlands
or Luxembourg or submitted to and are mailed to shareholders of the
Company, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which
they are made, not misleading, or to correct any statement made in any
communication with respect to the Offer previously filed with the SEC
or any other Governmental Entity in The Netherlands or Luxembourg or
disseminated to the shareholders of the Company.
(b) Each Schedule 14D-9 filed in the United States and each of
The Netherlands Offer Documents published in The Netherlands will not,
at the time such documents are filed or made public and at all times
prior to the purchase of Shares by Purchaser pursuant to the Offer,
contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they are
made, not misleading, except that no representation or warranty is
made by the Company with respect to information supplied in writing by
Purchaser or an affiliate of Purchaser expressly for inclusion
therein. All Schedules 14D-9 will comply as to form in all material
respects with the provisions of the Exchange Act and the AEX Listing
and Issuing Rules.
Section 4.08. Brokers. No Person or entity (other than the Company Adviser,
-------
the arrangements with which have been completely and accurately
disclosed to the Purchaser) is entitled to receive any brokerage,
finder's or other fee or commission in connection with this Agreement
or the transactions contemplated hereby based upon agreements made by
or on behalf of the Company, any of its Subsidiaries or any of their
respective officers, directors or employees.
15
<PAGE>
Section 4.09. Employee Benefit Matters.
------------------------
(a) A true and complete copy of each executive compensation,
incentive bonus or other bonus, employee pension, profit-sharing,
savings, retirement, stock option, stock purchase, severance pay, or
change in control plan, program, arrangement, agreement or commitment
in effect that covers current and future employees, directors or
consultants of the Company or any of its Subsidiaries (each, a "Plan")
has been made available to the Purchaser or publicly filed prior to
the date thereof. Section 4.09(a) of the Disclosure Letter sets forth
a true and complete list of all Plans, and specifically identifies any
"change of control" or similar provisions and the aggregate change in
control payments due thereunder.
(b) Neither the Company nor any of its Subsidiaries, directly or
indirectly, is subject to any liability in respect of any Plan, which
would reasonably be expected to have a Material Adverse Effect. There
are no actions, suits or claims pending (other than routine claims for
benefits) or, to the knowledge of the Company, threatened with respect
to such Plan or against the assets of such Plan (except for the
benefits payable or contributions due under the terms of such Plans)
which would reasonably be expected to have a Material Adverse Effect.
To the best knowledge of the Company, no Plan is under audit or is the
subject of an investigation by any Governmental Entity, except routine
audits conducted in the ordinary course which would not reasonably be
expected to have a Material Adverse Effect.
(c) The Company has complied, or will comply, with any applicable
works council or labor union advice, information, and/or consultation
procedures required by the laws of Luxembourg or The Netherlands
Merger Code and The Netherlands Works Council Act in connection with
the execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby, except for any non-compliance
that would not have a Material Adverse Effect on the Company or a
material adverse effect on the ability of the parties to consummate
the transactions contemplated hereby.
(d) Neither the Company nor any of its Subsidiaries is in
violation of any provision of applicable law or any governmental rule
or regulation, or any order, ruling, decree, judgment or arbitration
award of any court, arbitrator or any Governmental Entity regarding
the terms and conditions of employment of employees, former employees
or prospective employees or other labor related matters, including
laws, rules, regulations, orders, rulings, decrees, judgments and
awards relating to wages, hours, civil rights, discrimination, fair
labor standards and occupational health and safety, wrongful discharge
or violation of the personal rights of employees, former employees or
prospective employees which, taken alone or together with any other
such violation or violations, would reasonably be expected to have a
Material Adverse Effect.
(e) (i) The Aggregate Payments (as defined below) do not exceed
US$2,500,000. Except for the Aggregate Payments, neither the Company
nor any of its Subsidiaries has any liability to any current or former
employee of the Company or its Subsidiaries, or any other person by
virtue of their rendering or having rendered personal services to the
Company or its Subsidiaries, the amount of which, the timing of the
payment of which or the other terms or conditions of which are
affected by the consummation of the transactions contemplated herein
or the value of equity securities of
16
<PAGE>
the Company or equity securities of or interests in any of its
Subsidiaries. For purposes of this subsection, the term "Aggregate
Payments" means the sum of (i) the aggregate amount of payments
(including, without limitation, the value of benefits) in the nature
of severance pay for which the Company and its Subsidiaries are liable
in connection with any change in control of the Company or any of its
Subsidiaries, and (ii) the aggregate liability of the Company under
any bonus or employee-retention plan, except for any Company Options.
Section 4.10. Litigation, etc. There is no claim, action, suit, proceeding
---------------
or governmental investigation pending or, to the knowledge of the
Company, threatened against or relating to the Company or any of its
Subsidiaries that, individually or in the aggregate, would reasonably
be expected, individually or in the aggregate, to have a Material
Adverse Effect or, as of the date hereof, that in any material manner
challenges or seeks to prevent, enjoin, alter or materially delay the
Offer or prevent the Company from consummating any of the other
transactions contemplated hereby. Neither the Company nor any
Subsidiary of the Company is subject to any outstanding order, writ,
injunction or decree in any jurisdiction that, individually or in the
aggregate, has had or would reasonably be expected to have a Material
Adverse Effect.
Section 4.11. Tax Matters.
-----------
(a) The Company and its Subsidiaries have timely filed (taking
into account any permitted extensions of time in which to file) all
returns and reports relating to Taxes (including income taxes,
withholding taxes and estimated taxes) required to be filed by
Applicable Law or Rule with respect to each of the Company and its
Subsidiaries or any of their income, properties or operations as of
the date hereof, except for such failure to file as would not
reasonably be expected to have a Material Adverse Effect. All such
returns are true, accurate and complete in all material respects. The
Company and its Subsidiaries have timely paid or will timely pay all
Taxes attributable to each of the Company and its Subsidiaries that
were due and payable without regard to whether such Taxes have been
assessed other than Taxes which (i) are being contested in good faith
(ii) for which an adequate reserve has been provided in accordance
with United States generally accepted accounting principles or (iii)
if not paid, the failure of which payment would not have a Material
Adverse Effect.
(b) The Company and its Subsidiaries have made adequate
provisions in accordance with the relevant jurisdictional generally
accepted accounting principles appropriately and consistently applied
to each of the Company and its Subsidiaries in the consolidated
financial statements included in the SEC Reports for the payment of
all material Taxes for which each of the Company and its Subsidiaries
may be liable for the periods covered thereby that were not yet due
and payable as of the dates thereof, regardless of whether the
liability for such Taxes is disputed.
(c) There is no claim or assessment pending or, to the best of
the Company's knowledge, threatened against the Company or any of its
Subsidiaries relating to the Company's or its Subsidiaries' liability
for Taxes that would reasonably be expected to have a Material Adverse
Effect. There are no agreements in effect to extend the period of
limitations for the assessment or collection of any Tax for which the
Company or any of its Subsidiaries may be liable that would have a
Material Adverse Effect.
17
<PAGE>
(d) There is no contract, agreement or intercompany account
system in existence under which the Company or any of its Subsidiaries
has, or may at any time in the future have, an obligation to contribute
to the payment of a Tax of any group of corporations of which the
Company or any of its Subsidiaries is or was a part, the failure to pay
which would have a Material Adverse Effect.
Section 4.12. Compliance with Law; No Default.
-------------------------------
(a) The Company and its Subsidiaries are not in violation of, and
are not conducting their respective businesses in violation of, any
Applicable Law or Rule or in each case, except for such violations
that have not had and are not reasonably expected to have a Material
Adverse Effect or a material adverse effect on the ability of the
parties to consummate the transactions contemplated hereby.
(b) The Company and its Subsidiaries have all permits, licenses,
authorizations, consents, approvals and franchises from Governmental
Entities required to conduct their businesses as currently conducted
(the "Company Permits"), except for such permits, licenses,
authorizations, consents, approvals and franchises the absence of
which, individually or in the aggregate, have not had and are not
reasonably expected to have a Material Adverse Effect or a material
adverse effect on the ability of the parties to consummate the
transactions contemplated hereby. The Company and its Subsidiaries are
in compliance with the terms of the Company Permits, except where the
failure so to comply in the aggregate has not had and is not
reasonably expected to have a Material Adverse Effect or a material
adverse effect on the ability of the parties to consummate the
transactions contemplated hereby.
Section 4.13. Intellectual Property. The Company and its Subsidiaries have
---------------------
all right, title and interest in, or a valid and binding license to
use, and have taken reasonable and appropriate steps to protect all
Intellectual Property (as defined below), except for such defects that
individually or in the aggregate would not have a Material Adverse
Effect. Neither the Company nor any Subsidiary of the Company is in
default (or with the giving of notice or lapse of time or both, would
be in default) in any material respect under any right or license to
use such Intellectual Property, such Intellectual Property to the
knowledge of the Company is not being infringed by any third party,
and neither the Company nor any Subsidiary of the Company is
infringing any Intellectual Property of any third party, except for
such defaults and infringements which, individually or in the
aggregate, are not having and would not be reasonably expected to have
a Material Adverse Effect. For purposes of this Agreement,
"Intellectual Property" trademarks, trade names, service marks,
service names, domain names, copyrights, patents, database rights,
compatible software and rights in personalities and other proprietary
intellectual property rights and all pending applications for the
registrations of any of the foregoing.
Section 4.14. Title to Properties. Entire Business. The Company and its
------------------- ---------------
Subsidiaries have good title or a valid and subsisting leasehold
interest in and to or a valid and enforceable license to use all
material assets, properties and rights owned, used or held for use by
them in the conduct of their respective businesses, in each case, free
and clear of any leases, claims, mortgages, pledges and security
interests ("Liens") except for Liens (i) arising in the ordinary
course of business, (ii) that do not materially impair the continued
use of such properties, or (iii) that are not reasonably expected to
have a Material Adverse
18
<PAGE>
Effect or a material adverse effect on the ability of the parties to
consummate the transactions contemplated hereby.
Section 4.15. Convertible Notes and Warrant. As the date hereof there is
-----------------------------
US$75 million aggregate principal amount outstanding under the
Company's 7% Convertible Subordinated Notes due 2004. The current
Conversion Price (as defined in such Notes) of those Notes is US$29.13
having the result that if all such Notes were converted they would
convert into 2,574,655 Shares, and there is no circumstance in
existence which would give rise to adjustments of the Conversion
Price. As of the date hereof, the number of Shares issuable to
Paramount Communications B.V. under the warrant ("Warrant") granted to
it by the Company pursuant to their Warrant Agreement originally dated
15 March 1995 is 1,000,000 Shares. The Exercise Price (as defined in
such Warrant Agreement) with respect to each Share is US$25.00, and
there is no circumstance in existence which would give rise to
adjustments of the Exercise Price or the number of Shares purchasable
under the Warrant.
Section 4.16. Foreign Private Issuer. The Company is a "foreign private
----------------------
issuer" as such term is defined in Rule 3b-4(c) under the Exchange Act
and does not qualify for the "Tier I" or "Tier II" exemptions under
Rule 14d-1 under the Exchange Act.
Section 4.17. Material Contracts. Neither the Company nor any of its
------------------
Subsidiaries is, or has any knowledge that any other party is, in
default in any respect under any of the contracts, agreements, bonds,
mortgages, indentures, commitments, arrangements, leases (including
with respect to personal property) and other instruments to which the
Company or any of its Subsidiaries is a party or by which the Company,
any of its Subsidiaries or any of their respective assets is bound,
except for such defaults as have not had and are not reasonably likely
to have a Material Adverse Effect (each, a "Material Contract"), and
there has not occurred any event that with the lapse of time or the
giving of notice or both would constitute such a default.
Section 4.18. Related Party Transactions. No director or officer of the
--------------------------
Company or any of its Subsidiaries, nor any affiliate of such director
or officer (a) has borrowed any monies from or has outstanding any
indebtedness or other similar obligations to the Company or any of its
Subsidiaries that is required to be reported under applicable law or
in the SEC Reports provided to the Purchaser or (b) is otherwise a
party to any contract, arrangement or understanding with the Company
or any of its Subsidiaries that is required to be reported under
applicable law or in the SEC Reports provided to the Purchaser.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Except as set forth in the Purchaser SEC Reports (as defined herein)
filed and available prior to the date of this Agreement, Purchaser
represents and warrants to the Company as follows:
Section 5.01. Organization and Qualification. Purchaser is a duly organized
------------------------------
and validly existing public limited liability company incorporated
under the laws of The Netherlands.
19
<PAGE>
Section 5.02. Authority for this Agreement. Purchaser has all requisite
----------------------------
corporate power and authority to execute and deliver this Agreement
and to consummate the transactions contemplated hereby. The execution
and delivery of this Agreement by Purchaser and the consummation of
the transactions contemplated hereby have been duly and validly
authorized by all necessary corporate proceedings on the part of
Purchaser. This Agreement has been duly and validly executed and
delivered by Purchaser and, assuming the due authorization, execution
and delivery of this Agreement by the Company, constitutes a legal,
valid and binding agreement of each of Purchaser, enforceable against
Purchaser in accordance with its terms, except to the extent that its
enforceability may be limited by bankruptcy, insolvency,
reorganization, fraudulent conveyance, fraudulent transfer, moratorium
or other laws relating to or affecting creditors' rights generally and
by general principles of equity.
Section 5.03. Capitalization. As of the date of this Agreement, the issued
--------------
and outstanding capital stock of the Purchaser consists of the
Purchaser Shares as disclosed in the Purchaser SEC Reports (as defined
herein). Purchaser shall have sufficient authorized Shares to complete
the Offer on the terms and conditions set forth in this Agreement.
Except except as set forth in the Purchaser SEC Reports, there are no
outstanding obligations of the Purchaser or any of its Subsidiaries to
repurchase, redeem or otherwise acquire any Purchaser Shares. There
are no voting trusts or other agreements or understandings to which
the Purchaser is a party with respect to the voting of capital stock
of the Purchaser.
Section 5.04. Reports; Financial Statements.
-----------------------------
(a) Since January 1, 1999, the Purchaser has timely filed all
forms, reports and documents required to be filed by it with the SEC,
all of which have complied as of their respective filing dates in all
material respects with all applicable requirements of the Exchange Act
and the Securities Act. True and correct copies of all filings,
including exhibits, made by the Purchaser with the SEC since such date
and prior to the date hereof (the "Purchaser SEC Reports"), whether or
not required under applicable laws, rules and regulations and
including any registration statement filed by the Purchaser under the
Securities Act and any disclosure made to the AEX-Stock Exchange
pursuant to the AEX Listing and Listing Rules, as amended, have been
or, within a reasonable time will be, furnished or made available to
the Purchaser. None of the Purchaser SEC Reports, including any
financial statements or schedules included or incorporated by
reference therein, at the time filed, contained any untrue statement
of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein,
in light of the circumstances under which they were made, not
misleading. All of the Purchaser's SEC Reports, as of the respective
dates (and as of the date of any amendment thereto), complied as to
form in all material respects with the applicable requirements of the
Securities Act and the Exchange Act.
(b) Except as disclosed therein, the audited and unaudited
consolidated financial statements of the Purchaser included (or
incorporated by reference) in the Purchaser SEC Reports were prepared
in accordance with United States generally accepted accounting
principles applied on a consistent basis throughout the periods
involved (except as may be indicated in the notes thereto) and fairly
presented, in all material respects, the consolidated financial
position of the Purchaser and its Subsidiaries
20
<PAGE>
as of their respective dates, and the consolidated results of
operations and cash flows for the periods presented therein, except
that the unaudited interim financial statements were or are subject to
normal and recurring year-end adjustments which have not had a
Purchaser Material Adverse Effect.
(c) Neither the Purchaser nor any of its Subsidiaries has any
material liabilities of any nature, whether accrued, absolute, fixed,
contingent or otherwise, whether due or to become due and required to
be recorded or reflected on a consolidated balance sheet of the
Purchaser under United States generally accepted accounting
principles, except (i) as reflected or reserved against or disclosed
in the financial statements of the Purchaser included in the Purchaser
SEC Reports, and (ii) liabilities incurred since December 31, 1999
that (x) have been incurred in the ordinary course of business
consistent with past practice and (y) have not had and are not
reasonably likely to have, individually or in the aggregate, a
Purchaser Material Adverse Effect.
Section 5.05. Absence of Certain Changes.
--------------------------
Since January 1, 1999, (a) the Purchaser and its Subsidiaries
have not suffered any Purchaser Material Adverse Effect or any change,
condition, event or development that has had a Purchaser Material
Adverse Effect, and (b) the Purchaser and its Subsidiaries have
conducted their respective businesses only in the ordinary course
consistent with past practice, except for the negotiation and
execution and delivery of this Agreement and various other
acquisitions which it is pursuing and which it will disclose to the
Company in accordance with Applicable Law or Rules.
Section 5.06. Litigation, etc.
---------------
There is no claim, action, suit, proceeding or governmental
investigation pending or, to the knowledge of the Purchaser,
threatened against or relating to the Purchaser or any of its
Subsidiaries that, individually or in the aggregate, would reasonably
be expected, individually or in the aggregate, to have a Purchaser
Material Adverse Effect or, as of the date hereof, that in any
material manner challenges or seeks to prevent, enjoin, alter or
materially delay the Offer or prevent Purchaser from consummating any
of the other transactions contemplated hereby. Neither the Purchaser
nor any Subsidiary of the Purchaser is subject to any outstanding
order, writ, injunction or decree in any jurisdiction that,
individually or in the aggregate, has had or would reasonably be
expected to have a Purchaser Material Adverse Effect.
Section 5.07. Compliance with Law; No Default.
-------------------------------
(a) The Purchaser and its Subsidiaries are not in violation of,
and are not conducting their respective businesses in violation of,
any Applicable Law or Rule except for such violations that have not
had and are not reasonably expected to have a Purchaser Material
Adverse Effect or a material adverse effect on the ability of the
parties to consummate the transactions contemplated hereby.
21
<PAGE>
(b) The Purchaser and its Subsidiaries have all permits,
licenses, authorizations, consents, approvals and franchises from any
Governmental Entity which is required to conduct their businesses as
currently conducted (the "Purchaser Permits"), except for such
permits, licences, authorizations, consents, approvals and franchises
the absence of which, individually or in the aggregate, have not had
and are not reasonably expected to have a Purchaser Material Adverse
Effect or a material adverse effect on the ability of the parties to
consummate the transactions contemplated hereby. The Purchaser and its
Subsidiaries are in compliance with the terms of the Purchaser
Permits, except where the failure so to comply in the aggregate has
not had and is not reasonably expected to have a Purchaser Material
Adverse Effect or a material adverse effect on the ability of the
parties to consummate the transactions contemplated hereby.
Section 5.08. Offer Documents.
---------------
(a) None of the Offer Documents prepared by the Purchaser will,
at the times such documents are published, filed with the SEC or
submitted to any other relevant Governmental Entity in Luxembourg or
The Netherlands and are mailed to the shareholders of the Company,
contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to
make the statements made therein, in light of the circumstances under
which they are made, not misleading, except that no representation is
made by Purchaser with respect to information supplied in writing by
the Company or an affiliate of the Company expressly for inclusion
therein. The Offer Documents will comply as to form in all material
respects with the provisions of the Exchange Act and the AEX Listing
and Issuing Rules.
(b) None of the information supplied by Purchaser or any
affiliate of Purchaser specifically for inclusion in any Schedule
14D-9 filed in the United States and each of the Netherlands Offer
Documents will, at the date of filing with the SEC, contain any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they
were made, not misleading.
Section 5.09. Consents and Approvals; No Violation. Neither the execution and
------------------------------------
delivery of this Agreement by Purchaser nor the consummation of the
transactions contemplated hereby will (a) conflict with or result in
any breach of any provision of the governing documents of Purchaser,
(b) require any consent, approval, authorization or permit of, or
filing with or notification to, any Governmental Entity, except (i)
with respect to broadcast licenses and permits and (ii) as may be
required by or under the HSR Act, the Securities Act, the Exchange
Act, NASDAQ, the AEX-Stock Exchange, the European Union Merger Task
Force, any relevant competition or anti-trust laws and regulations in
any Member State of the European Union, any competition or anti-trust
laws and regulations in any other applicable jurisdiction or (iii)
where the failure to obtain such consent, approval, authorization or
permit, or to make such filing or notification, would not,
individually or in the aggregate, have a material adverse effect on
the ability of Purchaser to consummate the transactions contemplated
hereby, (c) require any consent, waiver or approval or result in a
default (or give rise to any right of termination, cancellation,
modification or acceleration) under any of the terms, conditions or
provisions of any note, license, agreement, contract, indenture or
other instrument or obligation to which Purchaser or any of its
Subsidiaries is a party or by which Purchaser or any of its
Subsidiaries or any of its respective assets may
22
<PAGE>
be bound, except with respect to broadcast licenses and permits and
except for cross-media ownership restrictions in Hungary or defaults
(or rights of termination, cancellation, modification or acceleration)
as to which requisite waivers or consents have been obtained or which
would not in the aggregate have a material adverse effect on the
ability of Purchaser to consummate the transactions contemplated
hereby or (d) violate any order, writ, injunction, decree, statute,
rule or regulation applicable to Purchaser or any of its Subsidiaries
or by which any of their respective assets are bound, except for
violations which would not, individually or in the aggregate, have a
material adverse effect on the condition (financial or otherwise),
business, properties, assets, liabilities or result of operations of
Purchaser and its Subsidiaries taken as a whole, or a material adverse
affect on the ability of Purchaser to consummate the transactions
contemplated hereby.
Section 5.10. Brokers. No broker, finder or investment banker (other than
-------
Goldman Sachs International Ltd) is entitled to any brokerage,
finder's or other fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements
made by and on behalf of the Purchaser that is or will be payable by
the Company or any of its Subsidiaries.
Section 5.11. Available Funds. The Purchaser has or will have available to
---------------
it sufficient funds to satisfy all of its obligations hereunder and in
connection with the transactions contemplated by this Agreement.
ARTICLE VI
COVENANTS
Section 6.01. Conduct of Business of the Company. Except as expressly
----------------------------------
contemplated by this Agreement or described in the Disclosure Letter,
during the period from the date of this Agreement to the Closing Date
or until the earlier termination of this Agreement, the Company shall
conduct and shall cause each of its Subsidiaries to conduct its
operations according to its ordinary and usual course of business and
consistent with past practice, and, to the extent consistent
therewith, the Company shall use and shall cause each of its
Subsidiaries to use its reasonable efforts to preserve substantially
intact its business organization, to keep available the services of
its current officers and employees and to preserve the present
relationships with those Persons and entities having significant
business relationships with the Company and its Subsidiaries, except
such as would not have a Material Adverse Effect, and the Company
shall promptly advise the Purchaser of any change in the Company's or
any of its Subsidiaries' condition (financial or otherwise),
properties, assets, liabilities or results of operations that would be
material to the Company and its Subsidiaries taken as a whole. Without
limiting the generality of the foregoing and except as otherwise
expressly provided in or contemplated by this Agreement or as
disclosed in the Disclosure Letter, and except for that certain
transaction referred to as "Project Pluto" (the terms of which have
previously been disclosed to the Purchaser), during the period
specified in the preceding sentence, without the prior written consent
the Purchaser, the Company shall not and shall not permit any of its
Subsidiaries to:
(a) issue, sell, grant options or rights to purchase or receive,
pledge, or authorize or propose the issuance, sale, grant of options
or rights to purchase or receive or pledge of (i) any Company
Securities or Subsidiary Securities, or grant or accelerate any
23
<PAGE>
right to convert or exchange any Company Securities or Subsidiary
Securities, other than Shares issuable upon exercise of the options
described in Section 4.02 or (ii) any other securities in respect of,
in lieu of or in substitution for Shares outstanding on the date
hereof;
(b) acquire or redeem, directly or indirectly, or amend any
Company Securities or Subsidiary Securities;
(c) split, combine or reclassify its capital stock or declare,
set aside, make or pay any dividend or distribution (whether in cash,
stock or property) on any shares of its capital stock (other than cash
dividends paid to the Company by its wholly-owned Subsidiaries with
regard to their capital stock);
(d) (i) make or offer to make any acquisition, by means of a
merger or otherwise, of assets or securities, or any sale, lease,
encumbrance or other disposition of assets or securities, in each case
involving an amount in excess of US$1,000,000 (one million), except
for purchases of inventory made in the ordinary course of business and
consistent with past practice or (ii) enter into a Material Contract
or amend any Material Contract or grant any release or relinquishment
of any rights under any Material Contract;
(e) incur or assume any long-term debt or short-term debt except
in ordinary course of business consistent with past practice or to
fund payments contemplated under this Agreement;
(f) other than in the ordinary course of business and consistent
with past practice, assume, guarantee, endorse or otherwise become
liable or responsible (whether directly, contingently or otherwise)
for the material obligations of any other Person except wholly-owned
Subsidiaries of the Company;
(g) other than in the ordinary course of business and consistent
with past practice, make any loans, advances or capital contributions
to, or investments in, any other Person (other than wholly-owned
Subsidiaries of the Company);
(h) change any of the material accounting principles or practices
used by it unless required by United States generally accepted
accounting principles;
(i) make any material Tax election or settle or compromise any
material federal, state or local income Tax liability;
(j) except as may be required to effect the Minority Buy-Out,
propose or adopt any amendments to its governing documents;
(k) grant any stock-related, performance or similar awards or
bonuses;
24
<PAGE>
(l) forgive any loans to employees, officers or directors or any
of their respective affiliates or associates;
(m) except as contemplated by this Agreement, enter into any new,
or amend any existing, employment, severance, consulting or salary
continuation agreements with or for the benefit of any officers,
directors or employees, or grant any increases in the compensation or
benefits to officers, directors and employees (other than normal
increases to persons who are not officers or directors in the ordinary
course of business consistent with past practices and that, in the
aggregate, do not result in a material increase in benefits or
compensation expense of the Company); provided, however, that nothing
contained in this Section 6.01 shall in any manner preclude the
Company from extending the current term of any employment, severance,
change in control or similar agreement, arrangement or program which
is effect on the date hereof;
(n) except in the ordinary course of business, agree to the
amendment, revocation or termination of any material broadcasting
license of the Company and its Subsidiaries or joint ventures;
(o) make any deposits or contributions of cash or other property
to or take any other action to fund or in any other way secure the
payment of compensation or benefits under the Plans or agreements
subject to the Plans or any other plan, agreement, contract or
arrangement of the Company;
(p) enter into, amend, or extend any material collective
bargaining or other labor agreement;
(q) adopt, amend or terminate any Plan or any other bonus,
severance, insurance pension or other employee benefit plan or
arrangement ; provided, however, that nothing contained in this
Section 6.01 shall in any manner preclude the Company from extending
the current term of any Plan which is effect on the date hereof;
(r) other than in the ordinary course of business, settle or
agree to settle any suit, action, claim, proceeding or investigation
(including any suit, action, claim, proceeding or investigation
relating to this Agreement or the transactions contemplated hereby)
or, except in the ordinary course of business, pay, discharge or
satisfy or agree to pay, discharge or satisfy any claim, liability or
obligation (absolute or accrued, asserted or unasserted, contingent or
otherwise) other than the payment, discharge or satisfaction of
liabilities reflected or reserved against in full in the financial
statements as at December 31, 1998 or incurred in the ordinary course
of business subsequent to December 31, 1998;
(s) except as specifically permitted by Section 6.02, knowingly
take, or agree to commit to take, or fail to take any action that
would result or is reasonably likely to result in any of the Offer
Conditions not being satisfied, or would make any representation or
warranty of the Company contained herein inaccurate in any material
respect at, or as of any time prior to, the Closing Date, or that
would impair the ability to consummate the Offer in accordance with
the terms hereof or materially delay such consummation; or
25
<PAGE>
(t) agree in writing or otherwise to take any of the foregoing
actions.
Section 6.02. No Solicitation.
---------------
(a) The Company agrees that neither it nor any of its
Subsidiaries shall, and that it shall direct and use its reasonable
best efforts to cause its and its Subsidiaries' respective officers,
directors, employees, representatives (including investment bankers,
attorneys and accountants), agents or affiliates (other than Purchaser
or any of its affiliates) not to, directly or indirectly, encourage,
solicit, initiate or participate in any way in any discussions or
negotiations with, or provide any information to, or afford any access
to the properties, books or records of the Company or any of its
Subsidiaries to, or otherwise take any other action to assist or
facilitate, any Person or group (other than Purchaser or any affiliate
or associate of Purchaser) concerning any Acquisition Proposal (as
defined below) or the possible making of any Acquisition Proposal.
Notwithstanding the foregoing and subject to compliance with Section
6.02(c), the Company may only to the extent required by Luxembourg law
furnish information to or enter into discussions or negotiations with
any Person or entity that has made an unsolicited bona fide
Acquisition Proposal that the Board of Directors of the Company
determines constitutes or could constitute a Superior Proposal if, and
only to the extent that, the Board of Directors of the Company, after
consultation with outside legal counsel to the Company, determines in
good faith that failure to do so would be inconsistent with the
fiduciary duty imposed by Luxembourg law on the Board of Directors of
the Company to the shareholders of the Company under Applicable Law or
Rule.
(b) The Company shall promptly (and in any event within one
business day) notify Purchaser, orally and in writing, if any such
information is requested or any such negotiations or discussions are
sought to be initiated and will promptly communicate to Purchaser the
identity of the Person or group making such request or inquiry (the
"Potential Acquiror") and any other material terms of such request,
inquiry or Acquisition Proposal. If the Company (or any of its
Subsidiaries or its or their respective officers, directors,
employees, representatives, agents or affiliates) participates in
discussions or negotiation with, or provides information to, a
Potential Acquiror, the Company shall keep Purchaser advised on a
current basis of any developments with respect thereto.
(c) The Company shall, and shall cause its Subsidiaries and its
and their respective officers, directors, employees, representatives,
agents and affiliates to, immediately cease and cause to be terminated
any existing activities, discussions, or negotiations with any Persons
other than Purchaser or any of its respective affiliates or associates
conducted prior to the date hereof with respect to any Acquisition
Proposal.
(d) Unless and until this Agreement has been terminated in
accordance with Section 8.01, the Company shall not (i) approve or
recommend, or propose publicly to approve or recommend, any
Acquisition Proposal, (ii) release any third party from any
confidentiality or standstill agreement to which the Company is a
party or fail to enforce to the fullest extent permitted by law any
such agreement in order to facilitate any Acquisition Proposal, (iii)
waive a suspension of voting rights for the acquisition of more than
20% of the voting stock of the Company to facilitate any Acquisition
Proposal (other
26
<PAGE>
than by Purchaser) or (iv) enter into any letter of intent, agreement
in principle, acquisition agreement or other agreement to effect any
Acquisition Proposal.
(e) Nothing contained in this Section 6.02 shall prohibit the
Company or its Board of Directors from taking and disclosing to the
Company's shareholders a position with respect to an Acquisition
Proposal by a third party pursuant to Rules 14d-9 and 14e-2(a)
promulgated under the Exchange Act.
(f) For purposes of this Agreement, (i) "Acquisition Proposal"
means any offer or proposal, or any bona fide indication of interest
in making an offer or proposal, made by a Person or group at any time
which is structured to permit such Person or group to acquire
beneficial ownership of 20% of the consolidated assets of, or at least
20% of the equity interest in the Company pursuant to a merger,
consolidation or other business combination, sale of shares of capital
stock, sale of assets, tender offer or exchange offer or similar
transaction, including any single or multi-step transaction or series
of related transactions, in each case other than the transactions
contemplated by this Agreement and (ii) "Superior Proposal" means any
unsolicited, bona fide Acquisition Proposal made in writing in respect
of which the Board of Directors of the Company has reasonably
determined in good faith after receiving the advice of its outside
counsel and independent financial advisors that (A) the Potential
Acquiror has the financial wherewithal to consummate such Acquisition
Proposal, (B) such Acquisition Proposal would, if consummated, result
in a transaction that is more favorable to the Company and its
shareholders (other than Purchaser and its Affiliates) from a
financial point of view than the transactions contemplated by this
Agreement and (C) such Acquisition Proposal is reasonably likely to be
consummated.
Section 6.03. Access to Information. From and after the date of this
---------------------
Agreement, the Company shall (i) give Purchaser and its authorized
accountants, investment bankers, counsel and other representatives
reasonable access (during regular business hours upon reasonable
notice and after consultation) to its officers, key employees, offices
and other facilities, and to all books, contracts, commitments and
records (including Tax returns) of the Company and its Subsidiaries
and cause the Company's and its Subsidiaries' independent public
accountants to provide access to their work papers and such other
information as Purchaser may reasonably request, (ii) permit Purchaser
to make such inspections as they may reasonably require, (iii) cause
its executive officers and those of its Subsidiaries to furnish
Purchaser with such financial and operating data and other information
with respect to the business, properties and personnel of the Company
and its Subsidiaries as Purchaser may from time to time reasonably
request and (iv) furnish promptly to Purchaser a copy of each report,
schedule and other document filed or received by the Company during
such period pursuant to the requirements of the U.S. federal or state
securities laws, provided, that the foregoing shall not require the
Company to permit any inspection, or to disclose any information,
which in the reasonable judgment of the Company would result in the
disclosure of any trade secrets of third parties or violate any
obligation of the Company with respect to confidentiality if the
Company shall have used reasonable efforts to obtain the consent of
such third party to such inspection or disclosure. All requests for
information made pursuant to this Section shall be directed to an
executive officer of the Company or such person as may be designated
by any such officer. If the transactions contemplated by this
Agreement are not consummated, then upon termination of this
Agreement, Purchaser shall as promptly as practicable collect and
27
<PAGE>
deliver to the Company all documents obtained by it or any of its
representatives then in their possession and any copies thereof.
Section 6.04. Reasonable Best Efforts. Subject to the terms and conditions of
-----------------------
this Agreement, each of the parties hereto agrees to use its
reasonable best efforts to take, or cause to be taken, all appropriate
action, and to do, or cause to be done, all things necessary, proper
or advisable under any Applicable Law or Rule to consummate and make
effective, in the most expeditious manner practicable, the
transactions contemplated by this Agreement; provided, however, that
nothing in this Agreement (other than as expressly provided for in
Section 1.01) shall obligate Purchaser to keep the Offer open beyond
the expiration date set forth in the Offer (as it may be extended from
time to time). Without limiting the foregoing, (i) each of the Company
and Purchaser shall use its reasonable best efforts to make promptly
any required submissions under the HSR Act or any competition filings
required under Applicable Law or Rule which the Company or Purchaser
determines should be made, in each case, with respect to the Offer and
the transactions contemplated hereby and (ii) Purchaser and the
Company shall cooperate with one another (A) in promptly determining
whether any filings are required to be or should be made or consents,
approvals, permits or authorizations are required to be or should be
obtained under any other U.S. federal, state or foreign law or
regulation or whether any consents, approvals or waivers are required
to be or should be obtained from other parties to indentures, loan
agreements or other contracts (including joint venture agreements) or
instruments material to the Company's business in connection with the
consummation of the transactions contemplated by this Agreement and
(B) in promptly making any such filings, furnishing information
required in connection therewith and seeking to obtain timely any such
consents, permits, authorizations, approvals or waivers. In case at
any time after the Closing Date any further action is necessary or
desirable to carry out the purposes of this Agreement, the proper
officers and directors of each party to this Agreement shall take all
such necessary action.
Section 6.05. Legal Challenges. The Company shall, upon the request of
----------------
Purchaser, take all reasonable steps to exclude the applicability of,
or to assist in any challenge by Purchaser to the validity, or
applicability to the Offer or any other transaction contemplated by
this Agreement. In the event that any action, suit, proceeding or
investigation relating hereto or to the transactions contemplated
hereby is commenced, whether before or after the Closing Date, the
parties hereto agree to cooperate and use their reasonable best
efforts to defend vigorously against it and respond thereto.
Section 6.06. Notification of Certain Matters. The Company shall give prompt
-------------------------------
notice to Purchaser, and Purchaser, as the case may be, shall give
prompt notice to the Company, of the occurrence, or non-occurrence, of
any event the occurrence, or non-occurrence, of which is likely (a) to
cause any representation or warranty of such party contained in this
Agreement to be untrue or inaccurate in any material respect if made
as of any time at or prior to the Closing Date, and (b) to result in
any material failure of such party to comply with or satisfy any
covenant, condition or agreement to be complied with or satisfied
hereunder (including the conditions set forth in Exhibit A); provided,
however, that the delivery of any notice pursuant to this Section 6.06
shall not limit or otherwise affect the remedies available hereunder
to any of the parties receiving such notice.
28
<PAGE>
Section 6.07. Press Releases. Purchaser and the Company shall consult with
--------------
each other before issuing any press release or otherwise making any
public statements with respect to the Offer or this Agreement and
shall not issue any such press release or make any such public
statement prior to such consultation (and affording the other party or
parties an opportunity to comment thereon), except as they may
determine in their sole discretion may be required by Applicable Law
or stock exchange rules. As soon as practicable after signing of this
Agreement, the firm intention to commence an Offer shall be publicly
announced by both the Purchaser and the Company; provided, however,
-------- -------
that such announcement shall comply with Rule 14d-2(b) under the
Exchange Act and Rule 135 or Rule 165 under the Securities Act. The
contents of the announcement shall be in compliance with Section 3 of
the Netherlands Merger Code. In accordance with Section 17 of the
Netherlands Merger Code, the parties agree, to make prior to its
publication, a copy of the public announcement available to relevant
labor unions, if any, and to the Committee pursuant to Section 21 of
the Netherlands Merger Code.
Section 6.08. Cross-Media Ownership. The Company will use reasonable best
---------------------
efforts to assist Purchaser to ensure that prior to the time Purchaser
consummates the Offer and accepts for payment and pays for any Shares
tendered pursuant thereto, the media cross ownership restrictions in
Hungary relating in particular but without limitation to cross
ownership of cable assets and broadcasting assets are not violated as
a result of Purchaser controlling the Company. In no event shall any
representation or warranty, covenant or condition of the Company under
this Agreement be violated or otherwise breached or triggered by a
violation of such media cross ownership restrictions in Hungary.
Section 6.09. Accountants' Comfort Letters. Each of the Purchaser and the
----------------------------
Company shall use its reasonable efforts to cause to be delivered to
the other two letters from their respective independent accountants,
one dated a date within two business days before the date on which the
Form S-4 Registration Statement shall have become effective and one
dated a date within two U.S. Business Days before the Closing Date, in
form and substance reasonably satisfactory to the recipient and
customary in scope and substance for comfort letters delivered by
independent accountants in connection with registration statements
similar to the Form S-4 Registration Statement.
Section 6.10. Indemnification; Directors' and Officers' Insurance.
---------------------------------------------------
(a) If the Offer is consummated, for a period of the earlier of
two years following the Closing Date or expiration of the limitation
period in which any action could be brought, Purchaser shall indemnify
and hold harmless, to the full extent permitted by the General
Corporation law of the State of Delaware ("DGCL") as if the DGCL were
to apply to the Company and Purchaser if they were corporations
subject to the DGCL, each present and former director or officer of
the Company and its Subsidiaries (collectively, the "Indemnified
Parties") against any costs or expenses (including reasonable
attorneys' fees), judgments, fines, losses, claims, damages or
liabilities (collectively, "Costs"), such right of indemnification to
include the right to advancement of expenses incurred in the defense
of any action or suit promptly after statements therefor are received
to the fullest extent permitted by the DGCL; provided that the
Indemnified Party to whom expenses are advanced provides an
undertaking to repay such advance if it is ultimately determined that
such party is not entitled to indemnification. Notwithstanding the
foregoing, Purchaser shall not be liable for any
29
<PAGE>
settlement of any claim effected without Purchaser's consent, which
consent shall not be unreasonably withheld.
(b) If the Offer is consummated, for a period of the earlier of
two years following the Closing Date or expiration of the limitation
period in which any action could be brought, Purchaser shall maintain
officers' and directors' liability insurance ("D&O Insurance") for, or
cause Purchaser's existing D&O insurance to cover, those persons who
are serving as officers or directors of the Company on the date
hereof.
(c) If the Purchaser or any of its successors or assigns (i)
shall consolidate with or merge into any other corporation or entity
and shall not be the continuing or surviving corporation or entity of
such consolidation or merger or (ii) shall transfer all or
substantially all of its properties and assets to any individual,
corporation or other entity, then, and in each such case, proper
provisions shall be made so that the successors and assigns of the
Purchaser shall assume all of the obligations set forth in this
Section.
(d) The provisions of this Section are intended to be for the
benefit of, and shall be enforceable by, each of the Indemnified
Parties.
ARTICLE VII
[INTENTIONALLY LEFT BLANK]
ARTICLE VIII
TERMINATION; AMENDMENT; WAIVER
Section 8.01. Termination. This Agreement may be terminated at any time
-----------
prior to the Closing Date by action taken or authorized by the Board
of Directors of the terminating party or parties:
(a) by mutual written consent of Purchaser and the Company, by
action of their Supervisory Board and Managing Board, and Board of
Directors, respectively;
(b) by Purchaser or the Company, if any court of competent
jurisdiction or other Governmental Entity shall have issued an order,
decree or ruling (which order, decree or ruling the parties hereto
shall use reasonable efforts to lift), or taken any other action
restraining, enjoining or otherwise prohibiting any of the
transactions contemplated by this Agreement and which can reasonably
be expected to result in any of the consequences referred to in
clauses (1)-(6) of paragraph (iv)(a) of Exhibit A and such order,
decree, ruling or other action shall have become final and
non-appealable;
(c) by the Company, if (i) Purchaser fails to commence the Offer
in violation of Section 1.01 hereof, (ii) Purchaser shall not have
accepted, or by law is not permitted to accept, for payment and paid
for Shares pursuant to the Offer in accordance with the terms thereof
on or before September 30, 2000, or (iii) Purchaser fails to purchase
validly tendered Shares in violation of the terms of this Agreement;
30
<PAGE>
(d) by Purchaser, if (A) due to an occurrence or circumstance
which would result in a failure to satisfy any of the Offer Conditions
contained in clause (iv) to Exhibit A, Purchaser shall have not
commenced the Offer within the time provided for in Section 1.01
hereof, or (B) due to an occurrence or circumstance which would result
in a failure to satisfy any of the Offer Conditions, Purchaser shall
have either (1) terminated the Offer without purchasing any Shares
pursuant to the Offer or (2) not accepted for payment Shares pursuant
to the Offer prior to September 30, 2000;
(e) by the Company, prior to the purchase of Shares pursuant to
the Offer, if (i) the Company has given Purchaser at least two U.S.
Business Days advance notice of its intention to accept or recommend a
Superior Proposal and of all of the material terms and conditions of
such Superior Proposal in accordance with Section 6.02 and (ii) in
response to an unsolicited Acquisition Proposal, the Board of
Directors determines, after consultation with and the receipt of the
advice of its financial advisor and outside counsel, that such
Acquisition Proposal is a Superior Proposal and that failure to
terminate this Agreement would be inconsistent with the fiduciary
duties of the Board of Directors under Luxembourg Law; provided that
the termination described in this Section 8.01(e) shall not be
effective unless and until the Company shall have paid to Purchaser
all of the Termination Fee (as defined in Section 8.03 below);
(f) by Purchaser, prior to the purchase of Shares pursuant to the
Offer, if the Company shall have taken or the Board of Directors of
the Company shall have resolved to take, any of the actions referred
to in Section 6.02(d), or if the Company shall have withdrawn or
modified, or proposed publicly to withdraw or modify, in a manner
adverse to Purchaser, the approval or recommendation of the Offer as
set forth in Section 1.02(a); or
(g) by Purchaser, in accordance with the last paragraph of
Section 1.01(a)(ii).
Section 8.02. Effect of Termination. If this Agreement is terminated
---------------------
pursuant to Section 8.01 hereof, this Agreement, except for the
provisions of Sections 8.02, 8.03 and Article IX hereof, shall
forthwith become void and have no effect, without any liability on the
part of any party or its directors, officers or shareholders. Nothing
in this Section 8.02 shall relieve any party to this Agreement of
liability for any breach of this Agreement.
Section 8.03. Fees and Expenses.
-----------------
(a) Whether or not the Offer is consummated, except as otherwise
specifically provided herein, all costs and expenses incurred in
connection with the Offer, this Agreement and the transactions
contemplated by this Agreement shall be paid by the party incurring
such expenses. Purchaser acknowledges and agrees that the Company
shall be entitled to pay or cause to be paid, at or prior to the
Closing, all fees, costs and expenses incurred by the Company in
connection with the Offer, this Agreement and the transactions
contemplated by this Agreement.
(b) In the event that this Agreement is terminated (1) pursuant
to Section 8.01(e) or 8.01(f) or (2) pursuant to Section 8.01(c)(ii)
or 8.01(d) and (in the case of this
31
<PAGE>
clause (2) only) either (A) prior to such termination an Acquisition
Proposal (other than any Acquisition Proposal made by or on behalf of,
or encouraged, solicited or initiated in any respect by, the Purchaser
or any of its affiliates or any of such persons' associates) shall
have been made or publicly announced and (B) within nine months
thereafter any Acquisition Proposal that is financially superior to
the Offer shall have been consummated (whether or not with a different
third party), then the Company shall pay the Purchaser a termination
fee of US$90 million (which shall be deemed to include reimbursement
for all fees and expenses of the Purchaser related to the Offer, this
Agreement, the transactions contemplated hereby and any related
financing) (the "Termination Fee") in immediately available funds by
wire transfer to an account designated by Purchaser. For the purposes
of clause (2) of this Section 8.03(b) only, "Acquisition Proposal"
shall have the same meaning ascribed to it in Section 6.02(f), except
that references therein to "20%" shall be read to substitute "25%"
therefore. If such amounts become payable pursuant to clause (1) of
this Section 8.03(b), they shall be payable simultaneously with such
termination (in the case of a termination by the Company) or within
two business days thereafter (in the case of a termination by
Purchaser). If such amounts become payable pursuant to clause (2) of
this Section 8.03(b), they shall be payable simultaneously with
completion of such Acquisition Proposal. No Termination Fee shall be
payable pursuant to this Section 8.03 if Purchaser shall be in
material breach of its obligations under this Agreement.
(c) In the event of the payment of a Termination Fee by the
Company pursuant to this Section 8.03, such Termination Fee shall be
the sole and exclusive remedy of Purchaser against the Company and any
of its Subsidiaries and their respective officers, directors,
employees, agents, advisors and other representatives with respect to
the breach of this Agreement.
(d) For purposes of this Section 8.03, this Agreement shall be
deemed terminated by Purchaser pursuant to a provision giving rise to
the obligation to pay the Termination Fee if at the time of any
termination hereunder Purchaser was so entitled to terminate this
Agreement pursuant to such provision.
(e) The prevailing party in any legal action undertaken to
enforce this Agreement or any provision hereof shall be entitled to
recover from the other party the reasonable costs and expenses
(including attorneys' and expert witness fees) incurred in connection
with such action.
Section 8.04. Amendment. This Agreement may not be amended, changed,
---------
supplemented or otherwise modified except by an instrument in writing
signed on behalf of all of the parties. The parties acknowledge that,
pursuant to Section 18 of the Netherlands Merger Code and the
procedures specified in Section 25 of the Netherlands Works Council
Act, this Agreement, and the documents in connection with the
transactions contemplated by this Agreement, may be subject to
amendment (with the consent of the Company and Purchaser) pursuant to
the results of any consultation with any labor unions or advice
provided by works councils, to the extent required.
32
<PAGE>
Section 8.05. Extension; Waiver; Remedies.
---------------------------
(a) At any time prior to the Closing Date, the parties hereto, by
action taken by or on behalf of the respective boards of the Company
and Purchaser, may (i) extend the time for the performance of any of
the obligations or other acts of the other parties hereto, (ii) waive
any inaccuracies in the representations and warranties contained
herein by any other applicable party or in any document, certificate
or writing delivered pursuant hereto by any other applicable party or
(iii) waive compliance with any of the agreements or conditions
contained herein. Any agreement on the part of any party to any such
extension or waiver shall be valid only if set forth in an instrument
in writing signed on behalf of such party.
(b) All rights, powers and remedies provided under this Agreement
or otherwise available in respect hereof at law or in equity shall be
cumulative and not alternative, and the exercise of any thereof by any
party shall not preclude the simultaneous or later exercise of any
other such right, power or remedy by such party. The failure of any
party hereto to exercise any rights, power or remedy provided under
this Agreement or otherwise available in respect hereof at law or in
equity, or to insist upon compliance by any other party hereto with
its obligations hereunder, and any custom or practice of the parties
at variance with the terms hereof, shall not constitute a waiver by
such party of its right to exercise any such or other right, power or
remedy or to demand such compliance.
ARTICLE IX
MISCELLANEOUS
Section 9.01. Survival of Representations and Warranties. The
------------------------------------------
representations and warranties made in Articles IV and V shall not
survive beyond the Closing Date. This Section 9.01 shall not limit any
covenant or agreement of the parties hereto which by its terms
contemplates performance after the Closing Date.
Section 9.02. Entire Agreement; Assignment. This Agreement, together with
----------------------------
the Disclosure Letter delivered in connection herewith, constitutes
the entire agreement between the parties with respect to subject
matter hereof and supersedes all other prior agreements and
understandings, both written and oral, between the parties with
respect to subject matter hereof. The Agreement shall not be assigned
by any party by operation of law or otherwise without the prior
written consent of the other parties, provided, however, that
Purchaser may assign any of its respective rights and obligations to
any direct or indirect Subsidiary of Purchaser but no such assignment
shall relieve Purchaser of its obligations hereunder.
Section 9.03. Enforcement of the Agreement; Jurisdiction. The parties agree
------------------------------------------
that irreparable damage would occur in the event that any of the
provisions of this Agreement were not performed in accordance with
their specific terms or were otherwise breached. It is accordingly
agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce
specifically the terms and provisions of this Agreement in the United
States District Court for the Southern District of New York
33
<PAGE>
("SDNY") located in the Borough of Manhattan, City of New York, this
being in addition to any other remedy to which they are entitled at
law or in equity. In addition, each of the parties hereto (a) consents
to submit itself to the non-exclusive personal jurisdiction of the
SDNY in the event any dispute arises out of this Agreement or any
transaction contemplated by this Agreement, (b) agrees that it will
not attempt to deny or defeat such personal jurisdiction by motion or
other request for leave from any such court and (c) waives any right
to trial by jury with respect to any action related to or arising out
of this Agreement or any transaction contemplated by this Agreement.
The parties irrevocably and unconditionally waive any objection to the
laying of venue of any action, suit or proceeding arising out of this
Agreement or the transactions contemplated hereby in the SDNY, and
hereby further irrevocably and unconditionally waive and agree not to
plead or claim in any such court that any such action, suit or
proceeding brought in any such court has been brought in an
inconvenient forum.
Section 9.04. Validity. Whenever possible, each provision or portion of any
--------
provision of this Agreement will be interpreted in such manner as to
be effective and valid under applicable law but if any provision or
portion of any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or
rule in any jurisdiction such invalidity, illegality or
unenforceability will not affect any other provision or portion of any
provision in such jurisdiction, and this Agreement will be reformed,
construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision or portion of any provision had
never been contained herein.
Section 9.05. Notices. All notices, requests, claims, demands and other
-------
communications hereunder shall be given (and shall be deemed to have
been duly received if given) by hand delivery in writing or by
facsimile transmission with confirmation of receipt, as follows:
if to Purchaser:
United Pan-Europe Communications N.V.
Fred. Roeskestraat 123
PO Box 74763
1070 BT Amsterdam, The Netherlands
Attention: General Counsel
Facsimile: +31 20 778 9871
Telephone: +31 20 778 9872
with copies to:
Clifford Chance Rogers & Wells LLP
200 Park Avenue
New York, New York 10166
Attention: Bonnie A. Barsamian, Esq.
Facsimile: +1-212-878-8375
Telephone: +1-212-878-8000
34
<PAGE>
and to:
Clifford Chance Limited Liability Partnership
200 Aldersgate Street
London EC1A 4JJ, England
Attention: Daniel Kossoff, Esq.
Facsimile: +44-207-600-5555
Telephone: +44-207-600-1000
if to the Company:
SBS Broadcasting S.A.
8-10 rue Mathias Hardt
L-1717 Luxembourg
Luxembourg
Attention: Corporate Secretary
Facsimile: +352-40-78-04
Telephone: +352-40-78-78
with copies to:
Sullivan & Cromwell
St. Olave's House
9a Ironmonger Lane
London EC2V 8EY
Attention: William A. Plapinger, Esq
Facsimile: +44-20-7710-6565
Telephone: +44-20-7710-6500
and to:
Arendt & Medernach
8-10 rue Mathias Handt
P.O. Box 39
L-2010 Luxembourg
Luxembourg
Attention: Guy Harles, Esq.
Facsimile: +352-40-78-04
Telephone: +352-40-78-78
or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above.
35
<PAGE>
Section 9.06. Governing Law. This Agreement shall be governed by and construed
-------------
in accordance with the laws of the State of New York.
Section 9.07. Descriptive Headings. The descriptive headings herein are inserted
--------------------
for convenience of reference only and are not intended to be part of or to
affect the meaning or interpretation of this Agreement.
Section 9.08. Parties in Interest. This Agreement shall be binding upon and
-------------------
inure solely to the benefit of each party hereto, and nothing in this
Agreement, express or implied, is intended to confer upon any other Person
any rights or remedies of any nature whatsoever under or by reason of this
Agreement.
Section 9.09. Counterparts. This Agreement may be executed in counterparts, each
------------
of which shall be deemed to be an original, but all of which, taken
together, shall constitute one and the same agreement.
Section 9.10. Adjustments to Purchaser Shares. Except as otherwise provided in
-------------------------------
Section 1.01(a)(iii), in the event that Purchaser carries out a
reclassification, stock split (including a reverse split), stock dividend
or stock distribution, recapitalization, subdivision or other similar
transaction with respect to Purchaser Shares prior to the Closing Date,
then the Offer Price, Exchange Ratio and other terms of this Agreement
relating to Purchaser Shares will be equitably adjusted.
Section 9.11. Certain Definitions.
-------------------
(a) "AEX-Stock Exchange" as referred to herein shall mean the
stock exchange held by Amsterdam Exchanges N.V.
(b) "Acquisition Proposal" shall have the meaning assigned to it
in Section 6.02(f) of this Agreement.
(c) "Amsterdam Exchange Day" shall mean a day on which the AEX-
Stock Exchange is open for trading.
(d) The term "Applicable Law or Rule" shall mean, as the context
may require, any statute, law, ordinance, rule, regulation, order, judgment
or decree in any jurisdictions applicable to the relevant party or any of
its Subsidiaries or by which any property or asset of the relevant party or
any of its Subsidiaries is bound or affected (which shall include The
Netherlands Merger Code), or any rule or regulation of any stock exchange
on which the shares or any other securities of the relevant party are
listed.
(e) The terms "affiliate" and "associate" shall have the meanings
given to such terms in Rule 12b-2 under the Exchange Act.
(f) "Aggregate Payments" shall have the meaning assigned to it in
Section 4.09(e) of this Agreement.
36
<PAGE>
(g) the "Average Price" shall have the meaning assigned to it in
Section 1.01(a) of this Agreement.
(h) "Basic Terms" shall have the meaning assigned to it in
Section 1.01(a) of this Agreement.
(i) The term "beneficial ownership" shall have the meaning
given to such term in Rule 13d-3 under the Exchange Act.
(j) "Business Day" shall mean any day of the week where the
commercial banks in The City of New York, The Netherlands and Luxembourg
are generally open for business.
(k) "Closing Date" shall have the meaning assigned to it in
Section 1.01(a) of this Agreement.
(l) "Committee" shall have the meaning assigned to it in
Section 1.01(g) of this Agreement.
(m) "Company Adviser" shall have the meaning assigned to it in
Section 1.02(a) of this Agreement.
(n) "Company Permits" shall have the meaning assigned to it in
Section 4.12(b) of this Agreement.
(o) "Company SEC Reports" shall have the meaning assigned to it
in Section 4.05(a) of this Agreement.
(p) "Company Securities" shall have the meaning assigned to it
in Section 3.02(b) of this Agreement.
(q) "Confidentiality Agreement" shall have the meaning assigned
to it in Section 6.02(a) of this Agreement.
(r) "Consideration Calculation Date" shall have the meaning
assigned to it in Section 1.01(a) of this Agreement.
(s) "Costs" shall have the meaning assigned to it in Section
6.10(a) of this Agreement.
(t) "DGCL" shall have the meaning assigned to it in Section
6.10(a) of this Agreement.
(u) "D&O Insurance" shall have the meaning assigned to it in
Section 6.10(b) of this Agreement.
37
<PAGE>
(v) "Exchange Act" means the United States Securities Exchange
Act of 1934, as amended, and the rules and regulations thereunder.
(w) "Exchange Agent" shall have the meaning assigned to it in
Section 3.02(b).
(x) "Exchange Ratio" shall have the meaning assigned to it in
Section 1.01(a) of this Agreement.
(y) "Form of Election" shall have the meaning assigned to it in
Section 3.02(b) of this Agreement.
(z) "Forms S-4" shall have the meaning assigned to it in Section
1.01(a).
(aa) "Governmental Entity" shall have the meaning assigned to it
in Section 4.04 of this Agreement.
(bb) "HSR Act" shall have the meaning assigned to it in Section
4.04 of this Agreement.
(cc) "Illegality" shall have the meaning assigned to it in
Section 1.01(h) of this Agreement.
(dd) The term "including" shall be deemed to be followed by the
phrase "without limitation."
(ee) "Indemnified Parties" shall have the meaning assigned to it
in Section 6.10(a) of this Agreement.
(ff) "Initial Exchange Ratio" shall have the meaning assigned to
it in Section 1.01(a) of this Agreement.
(gg) The term "hereby" shall be deemed to refer to this Agreement
in its entirety, rather than to any Article, Section, or other portion
of this Agreement.
(hh) "Material Adverse Effect" shall mean (i) any change in or
effect on the business of the Company that is or would be reasonably
expected to be materially adverse to any of the condition (financial
or otherwise), business, properties, assets, liabilities or results of
operations of the Company and its Subsidiaries taken as a whole;
provided, however, that any such effect resulting from any adverse
change (i) in Applicable Law relating to the broadcasting or
television industries or in generally accepted accounting principles
or interpretations thereof or (ii) economic or business conditions in
the broadcasting or television industries shall not be considered when
determining whether a Material Adverse Effect has occurred.
(ii) "Material Contract" shall have the meaning assigned to it in
Section 4.12(b) of this Agreement.
38
<PAGE>
(jj) "Minority Buy-Out" shall have the meaning assigned to it in
Section 1.06 of this Agreement.
(kk) "Mix and Match Election" shall have the meaning assigned to
it in Section 1.01(a) of this Agreement.
(ll) "Netherlands Merger Code" shall mean the rules of conduct
which have to be taken into account in connection with the preparation
and making of a public offer for Shares and accomplishing mergers of
business, as formulated by the Committee and in effect from time to
time (SER-besluit Fusiegedragsregels 1975).
(mm) "Offer" shall have the meaning assigned to it in Section
1.01(a) of this Agreement.
(nn) "Offer Conditions" shall have the meaning assigned to it in
Section 1.01(a) of this Agreement.
(oo) "Offer Documents" means, collectively, the U.S. Offer
Documents and The Netherlands Offer Documents.
(pp) "Person" shall mean any individual, corporation, limited
liability company, partnership, association, trust, estate or other
entity or organization.
(qq) "Plan" shall have the meaning assigned to it in Section
4.09(a) of this Agreement.
(rr) "Potential Acquiror" shall have the meaning assigned to it
in Section 6.02(b) of this Agreement.
(ss) "Purchaser Disclosure Letter" shall have the meaning
assigned to it in Article V of this Agreement.
(tt) "Purchaser Material Adverse Effect" shall have the same
meaning as "Material Adverse Effect" as defined above, except that
references therein to the "Company" shall be read to substitute
"Purchaser" therefor.
(uu) "Purchaser Permits" shall have the meaning assigned to it in
Section 5.07(b) of this Agreement.
(vv) "Purchaser Shares" shall have the meaning assigned to it in
Section 1.01(a) of this Agreement.
(ww) "Registration Statement" shall have the meaning assigned to
in Section 1.01(f) of this Agreement.
(xx) "Schedule 14D-9" shall have the meaning assigned to it in
Section 1.02(b) of this Agreement.
39
<PAGE>
(yy) "SDNY" shall have the meaning assigned to it in Section
9.03 of this Agreement.
(zz) "SEC" shall have the meaning assigned to it in Section
1.01(a) of this Agreement.
(aaa) "Securities Act" means the United States Securities Act of
1933, as amended, and the rules and regulations thereunder.
(bbb) "Shares" means the outstanding shares of the common stock
of the Company, par value USD 1.50 per share, and any rights of issued
and outstanding shares of the common stock of the Company that are
held in the name of nominee Amsterdam Stock Exchange NV (ASAS).
(ccc) "Share Split" shall have the meaning assigned to it in
Section 1.01(a) of this Agreement.
(ddd) "Schedule TO" shall have the meaning assigned to it in
Section 1.01(b) of this Agreement.
(eee) The term "Subsidiary" shall mean, when used with reference
to an entity, any other entity of which securities or other ownership
interests having ordinary voting power to elect a majority of the
board of directors or other persons performing similar functions, or a
majority of the outstanding voting securities of which, are owned
directly or indirectly by such entity.
(fff) "Subsidiary Securities" shall have the meaning assigned to
it in Section 3.02(b) of this Agreement.
(ggg) "Superior Proposal" shall have the meaning assigned to it
in Section 6.02(f) of this Agreement.
(hhh) "Takeover Laws" shall have the meaning assigned to it in
Section 1.02(a) of this Agreement.
(iii) "Tax" shall mean all taxes, charges, fees, levies, imposts,
duties, and other assessments, including any income, alternative
minimum or add-on tax, estimated, gross income, gross receipts, sales,
use, transfer, transactions, intangibles, ad valorem, value-added,
franchise, registration, title, license, capital, paid-up capital,
profits, withholding, employee withholding, payroll, worker's
compensation, unemployment insurance, social security, employment,
excise (including the federal communications excise tax under Section
4251 of the Code), severance, stamp, transfer occupation, premium,
recording, real property, personal property, federal highway use,
commercial rent, environmental (including taxes under Section 59A of
the Code) or windfall profit tax, custom, duty or other tax, fee or
other like assessment or charge of any kind whatsoever, together with
any interest, penalties, related liabilities, fines or additions to
40
<PAGE>
tax that may become payable in respect thereof imposed by any country,
any state, county, provincial or local government or subdivision or
agency thereof.
(jjj) "Termination Fee" shall have the meaning assigned to it in
Section 8.03(b) of this Agreement.
(kkk) "Trigger Event" shall have the meaning assigned to it in
Section 1.01(a) of this Agreement.
(mmm) "US$" means United States Dollars.
(nnn) "U.S. Business Day" shall mean any day on which the SEC is
open for business.
(ooo) "U.S. Offer Documents" shall have the meaning assigned to
it in Section 1.01(e) of this Agreement.
41
<PAGE>
IN WITNESS WHEREOF, each of the parties has caused this Agreement to
be executed on its behalf by its officers thereunto duly authorized, all at
or on the day and year first above written.
UNITED PAN-EUROPE COMMUNICATIONS N.V.
By: S/S
-------------------------------------
Name: Anton Tuijten
Title: General Counsel/POA
By: S/S
-------------------------------------
Name: Charles Bracken
Title: Managing Director
SBS BROADCASTING S.A.
By: S/S
-------------------------------------
Name: Harry Evans Sloan
Title: Chairman and Chief Executive Officer
By: S/S
-------------------------------------
Name: Howard A. Knight
Title: Vice Chairman and Chief Operating Officer
42
<PAGE>
EXHIBIT A
CONDITIONS TO THE OFFER
Capitalized terms used in this Exhibit A and not otherwise defined
herein shall have the meanings assigned to them in the Agreement to which
it is attached (the "Exchange Offer Agreement").
Notwithstanding any other provision of the Offer, Purchaser shall not
be required to accept for payment, purchase or pay for any Shares tendered
in connection with the Offer and may terminate or, subject to the terms of
the Exchange Offer Agreement, amend the Offer as to Shares not then paid
for, if (i) there shall not be validly tendered and not properly withdrawn
prior to the expiration of the initial offering period for the Offer (the
"Expiration Date") that number of Shares which, together with any Shares
beneficially owned by Purchaser or any of its affiliates, represents at
least two-thirds of the total number of outstanding Shares on a
fully-diluted basis on the date of purchase (the "Minimum Tender
Condition"), (ii) the Registration Statement on Form S-4 shall not have
been declared effective by the SEC, (iii) (A) any applicable waiting period
under the HSR Act or approval required by the European Union Merger Task
Force shall not have expired, been terminated, or received, as applicable,
prior to the Expiration Date, or (B) any applicable waiting period or
approval required or which is appropriate under any relevant competition or
anti-trust laws and regulations in any Member State of the European Union
or any other relevant country (including Switzerland, but excluding any
cross-media ownership restrictions in Hungary) shall not have expired, been
terminated, or received, as applicable, prior to the Expiration Date, the
consequence of which in the case of either (A) or (B) would reasonably be
likely to have any of the effects set forth in (a)(5) below, or (iv) at any
time on or after the date of the Exchange Offer Agreement and prior to the
time of payment for any Shares, any of the following conditions shall exist
and be continuing:
(a) there shall have been any statute, rule, regulation, legislation,
interpretation, judgment, order or injunction, promulgated, enacted,
entered, enforced, issued or amended, in each case by a Governmental Entity
applicable to the Purchaser, the Company, or any of their respective
affiliates that would reasonably be expected to:
(1) make the acceptance for payment of, or payment for or
purchase of all or a substantial number of the Shares pursuant to the
Offer illegal, or otherwise prohibit the consummation of the Offer;
(2) result in a material delay in or restrict (other than in an
immaterial way) the ability of Purchaser to accept for payment, pay
for or purchase pursuant to the Offer at least such number of the
Shares necessary to satisfy the Minimum Tender Condition;
(3) render Purchaser unable to accept for payment or pay for or
purchase pursuant to the Offer at least such number of Shares
necessary to satisfy the Minimum Tender Condition;
43
<PAGE>
(4) impose material limitations (which shall not be deemed to
include any required compliance with the U.S. federal securities laws)
on the ability of Purchaser, its Subsidiaries or affiliates to acquire
or hold, transfer or dispose of, or effectively to exercise all rights
of ownership of, all or a substantial number of the Shares, including
the right to vote the Shares purchased by it pursuant to the Offer on
an equal basis with all other Shares on all matters properly presented
to the shareholders of the Company;
(5) require the divestiture by Purchaser of a material portion of
any Shares (provided, however, that any divestiture causing Purchaser
to own less than the number of Shares necessary to satisfy the Minimum
Tender Condition shall be deemed to be material), or require Purchaser
or the Company or any of their respective Subsidiaries or affiliates
to dispose of or hold separate all or any material portion of the
business, assets or properties of the Company and its Subsidiaries
taken as a whole (excluding Hungary by reason of cross-media ownership
restrictions), or impose any material limitations on the ability of
any of such entities to conduct their businesses or own assets or
properties material to the Company and its Subsidiaries taken as a
whole (excluding Hungary by reason of cross-media ownership
restrictions) or on the ability of Purchaser to own a material portion
of Shares (provided, however, that any divestiture causing Purchaser
to own less than the number of Shares necessary to satisfy the Minimum
Tender Condition shall be deemed to be material), or on the ability of
Purchaser to conduct the business of the Company and its Subsidiaries
and own the assets and properties of the Company and its Subsidiaries;
or
(6) impose any material limitations on the ability of Purchaser
or any of its Subsidiaries or affiliates effectively to control the
business or operations of the Company and its Subsidiaries;
(b) there shall have been instituted or be pending any action or
proceeding by any Governmental Entity challenging the making of the Offer
or the acquisition by Purchaser of the Shares pursuant to the Offer which
can reasonably be expected to result, directly or indirectly, in any of the
consequences referred to in clauses (1) through (6) of paragraph (a) above;
(c) there shall have occurred and be continuing (1) any general
suspension of, or limitation on trading in securities on The New York Stock
Exchange or NASDAQ (other than any suspension or limitation on trading in
any particular security as a result of a computerized trading limit or any
intraday suspension due to "circuit breakers"), (2) the declaration of any
banking moratorium or any suspension of payments in respect of banks or any
limitation (whether or not mandatory) on the extension of credit by lending
institutions in the United States, the United Kingdom or Germany, or (3) a
decline at any time for any three trading days in any consecutive five
trading day period of both (A) 30% or more in the Eurotop 300 index, as
measured against the closing value on the trading day immediately preceding
the date of this Agreement and (B) 20% or more in the closing sales price
per Purchaser Share as reported by NASDAQ, as measured against US$210;
44
<PAGE>
(d) any Person or "group" (as such term is used in Section 13(d)(3) of
the Exchange Act) other than Purchaser or any of its affiliates shall have
become the beneficial owner (as that term is used in Rule 13d-3 under the
Exchange Act) of more than 25% of the outstanding Shares;
(e) all consents, approvals, licenses, authorisations, registrations,
notices or other filings (including, without limitation, broadcast
licenses) (other than under any cross-media ownership restrictions in
Hungary) required to be obtained or made by the Company or the Purchaser
with or from any Governmental Entity or third party (other than the
Purchaser or any of its affiliates) in connection with the execution,
delivery and performance of the Exchange Offer Agreement, the Offer and the
transactions contemplated by the Exchange Offer Agreement shall not have
been obtained or made and such failure would reasonably be expected to have
a Material Adverse Effect on the Company or the Purchaser or a material
adverse effect on the ability of the parties to consummate the transactions
contemplated hereby;
(f) there shall have occurred any change, condition, event or
development that, individually or in the aggregate, has had or is
reasonably likely to have, a Material Adverse Effect with respect to the
Company;
(g) the Company shall have breached or failed to comply in any
material respect with any of its material obligations, covenants, or
agreements under the Exchange Offer Agreement, or any representation or
warranty of the Company contained in the Exchange Offer Agreement that is
qualified by reference to a Material Adverse Effect thereof shall not be
true and correct because there has been a Material Adverse Effect, or any
other representation or warranty shall not be true and correct in any
respect that (when taken together with all such other representations and
warranties not true and correct) has had or would reasonably be likely to
have a Material Adverse Effect, in each case as of when made or at and as
of any time thereafter, and which is continuing;
(h) the Exchange Offer Agreement shall have been terminated pursuant
to its terms or shall have been amended pursuant to its terms to terminate
the Offer; or
(i) the Committee shall have issued in connection with the Offer, a
public admonition as a consequence of infringement by the Company or any of
its Subsidiaries of any of the stipulations of Chapters I, II or III of the
Netherlands Merger Code prior to the date on which the Offer expires;
which, in the good faith judgment of Purchaser, in any case, giving rise to any
such condition, makes it inadvisable to proceed with the Offer or with
acceptance for payment or payment for Shares.
The foregoing conditions are for the sole benefit of Purchaser and may be
asserted or waived by Purchaser in whole or in part at any time or from time to
time in its discretion subject to the terms and conditions of the Exchange Offer
Agreement. The failure of Purchaser at any time to exercise any of the foregoing
rights shall not be deemed a waiver of any such right and each such right shall
be deemed an ongoing right which may be asserted at any time and from time to
time.
45
<PAGE>
EXHIBIT 10.2
SHARE EXCHANGE AGREEMENT
SHARE EXCHANGE AGREEMENT (this "Agreement"), dated 9 March, 2000, by and among
---------
UNITED PAN-EUROPE COMMUNICATIONS N.V., a public limited liability company
(naamloze vennootschap) incorporated under the laws of The Netherlands
("Purchaser"), and each of the parties listed on the signature pages hereto
(each a "Shareholder", and collectively, the "Shareholders"). This Agreement
----------- ------------
shall be deemed to be separate and several Agreements between Purchaser and each
Shareholder.
WHEREAS, each of the Shareholders is, as of the date hereof, the record and
beneficial owner of the shares of common stock, par value $1.50 per share (the
"Common Shares"), of SBS BROADCASTING S.A., a corporation organized under the
-------------
laws of Luxembourg (the "Company"), set forth opposite its name on Annex I
-------
hereto;
WHEREAS, Purchaser and the Company concurrently herewith are entering into an
Exchange Offer Agreement, dated as of the date hereof (the "Exchange Offer
--------------
Agreement"), which provides, among other things, for the acquisition of Common
- ---------
Shares by Purchaser by means of an exchange offer (the "Offer") by Purchaser for
-----
all of the outstanding Common Shares, and upon the terms and subject to the
conditions set forth in the Exchange Offer Agreement; and
WHEREAS, as a condition to the willingness of Purchaser to enter into the
Exchange Offer, and in order to induce Purchaser to enter into the Exchange
Offer each of the Shareholders has severally agreed to enter into this
Agreement.
NOW, THEREFORE, in consideration of the execution and delivery by Purchaser of
the Exchange Offer Agreement and the mutual representations, warranties,
covenants and agreements set forth herein and therein, and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
SECTION 1. Representations and Warranties of the Shareholder. Each of the
-------------------------------------------------
Shareholders hereby represents and warrants to Purchaser, severally and not
jointly, as follows:
(a) Such Shareholder is the beneficial owner of the Common Shares (as may be
adjusted from time to time pursuant to Section 6 hereof, the "Shares") set
------
forth opposite its name on Annex I to this Agreement. Such Shares are held
of record, in each case, by such Shareholder or by a nominee or custodian
of such Shareholder. On the date hereof, the Shares opposite such
Shareholder's name constitute all of the Shares owned by such Shareholder.
Such Shareholder has the exclusive right to vote or dispose of (or exercise
the voting or disposition of) such Shares.
(b) If such Shareholder is a corporation, general partnership, limited
partnership, limited liability company, collective investment trust or
separate account, as the case may be, such Shareholder is duly organized,
validly existing and in good standing under the laws of its respective
jurisdiction of organization. Such Shareholder has all requisite power and
authority to enter into this Agreement and to consummate the transactions
contemplated hereby and has taken all corporate, partnership or other
action necessary to authorize the execution, delivery and performance of
this Agreement.
<PAGE>
This Agreement has been validly executed and delivered by such Shareholder
and (assuming due authorization, execution and delivery by Purchaser)
constitutes the legal, valid and binding obligation of such Shareholder,
enforceable against such Shareholder in accordance with its terms, except
as may be limited by bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium or other laws affecting enforcement of
creditors' rights generally and by general equitable principles (regardless
of whether such enforceability is considered in a proceeding in equity or
at law).
(c) The execution and delivery of this Agreement by such Shareholder do not,
and the performance by such Shareholder of its obligations hereunder will
not, (i) conflict with, result in a violation or breach of, constitute
(with or without notice or lapse of time or both) a default under, result
in or give to any person any right of termination, cancellation,
modification or acceleration of, or result in the creation or imposition of
any Lien upon any of the assets or properties of such Shareholder under,
any of the terms, conditions or provisions of (A), if such Shareholder is a
corporation, partnership, limited liability company, bank or other entity,
the certificate or articles of incorporation or bylaws, partnership
agreement, limited liability company agreement, trust agreement or other
comparable organisational governing documents of such Shareholder or (B)
(x) any Law or Order of any Governmental or Regulatory Authority applicable
to such Shareholder or any of its respective assets or properties, or (y)
any Contract to which such Shareholder is a party or by which such
Shareholder or any of its respective assets or properties is bound,
excluding from the foregoing clauses (x) and (y) conflicts, violations,
breaches, defaults, terminations, modifications, accelerations and
creations and impositions of Liens which, individually or in the aggregate,
would not be reasonably expected to have a material adverse effect on the
ability of such Shareholder to consummate the transaction contemplated by
this Agreement, or (ii) require any filing by such Shareholder with, or any
permit, authorization, consent or approval of, any Governmental or
Regulatory Authority or any third party other than Schedule 13D or Schedule
13G and Form 4 and/or Form 5, or amendments thereto, with the United States
Securities and Exchange Commission, or a notification to the Securities
Board of The Netherlands (Stichting Toezicht Effectenverkeer) pursuant to
section 46b of the Netherlands Securities Market Supervision Act 1995 (Wet
toezicht effecten verkeer 1995) or pursuant to the Luxembourg Act on
Disclosure of Significant Shareholdings in Listed Companies (Loi du 4
decembre 1992 sur les informations publies lors de l'acquisition et de la
cession d'une participation importante dans une societe cotee en bourse).
There is no beneficiary or holder of a voting trust certificate or other
interest of any trust of which such Shareholder is a trustee whose consent
is required for the execution and delivery of this Agreement or the
consummation by such Shareholder of the transaction contemplated hereby.
(d) The Shares and the certificates representing the Shares owned by such
Shareholder are now and at all times during the term hereof will be held by
such Shareholder, or by a nominee or custodian for the benefit of such
Shareholder, free and clear of all Liens, proxies, voting trusts or
agreements or understandings or arrangements whatsoever, except for any
such Liens or proxies arising hereunder, and not subject to any preemptive
rights.
-2-
<PAGE>
SECTION 2. Representations and Warranties of Purchaser. Purchaser hereby
-------------------------------------------
represents and warrants to each of the Shareholders as follows:
(a) Purchaser is a public limited liability company (naamloze vennootschap)
duly incorporated and validly existing under the laws of The Netherlands
and Purchaser has full corporate power and authority to enter into this
Agreement and to consummate the transactions contemplated hereby and has
taken all necessary corporate action to authorize the execution, delivery
and performance of this Agreement.
(b) This Agreement has been duly authorized, executed and delivered by
Purchaser and (assuming due execution and delivery by the Shareholders)
constitutes the legal, valid and binding obligation of Purchaser,
enforceable against Purchaser in accordance with its terms, except as may
be limited by bankruptcy, insolvency reorganization, moratorium or other
similar laws affecting enforcement of creditors' rights generally
(including the doctrine of voidable preference within the meaning of
section 3:45 of the Netherlands Civil Code and section 42 et seq. of the
Netherlands Bankruptcy Code) and by general equitable principles
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).
(c) The execution and delivery of this Agreement by Purchaser do not, and the
performance by Purchaser of its obligations hereunder and the consummation
of the transactions contemplated hereby will not, conflict with, result in
a violation or breach of, constitute (with or without notice or lapse of
time or both) a default under, result in or give to any person any right of
termination, cancellation, modification or acceleration of, or result in
the creation or imposition of any Lien upon any of the assets or properties
of Purchaser under, any of the terms, conditions or provisions of (A) the
articles of association (statuten) of Purchaser or (B) (x) any Law or Order
of any Governmental or Regulatory Authority applicable to Purchaser or any
of its assets or properties, or (y) any Contract to which Purchaser is a
party or by which Purchaser or any of its assets or properties is bound,
excluding from the foregoing clauses (x) and (y) conflicts, violations,
breaches, defaults, terminations, modifications, accelerations and
creations and impositions of Liens which, individually or in the aggregate,
would not be reasonably expected to have a material adverse effect on the
ability of Purchaser to consummate the transactions contemplated by this
Agreement.
SECTION 3. Purchase and Sale of the Shares. Each of the Shareholders hereby
-------------------------------
severally (and not jointly) agrees to exchange the Shares set forth opposite its
name on Annex I to this Agreement into the Offer promptly, and in any event no
later than the fifth business day following the commencement of the Offer
pursuant to Section 1.01 of the Exchange Offer Agreement and not to withdraw any
Shares so exchanged unless the Offer is terminated or has expired; provided that
if such Shareholder shall thereafter acquire further Common Shares, then any
such Shares shall be exchanged no later than the second business day after such
acquisition. Purchaser hereby agrees to purchase all the Shares so exchanged at
a price per Share equal to the Offer Price (as such term is defined in the
Exchange Offer Agreement) or any higher price that may be paid in the Offer;
provided, however, that Purchaser's obligation to accept for payment and pay for
- -------- -------
the Shares in the Offer is subject to all the terms and conditions of the Offer
including those set forth in the Exchange Offer Agreement and Exhibit A thereto.
-3-
<PAGE>
SECTION 4. Transfer of the Shares; Proxies and Non-Interference. Prior to the
----------------------------------------------------
termination of this Agreement, except as otherwise provided herein, each of the
Shareholders severally agrees that it shall not, directly or indirectly, (i)
offer for sale, sell, transfer, tender, pledge, encumber, assign, or otherwise
dispose of, any or all of its Shares; (ii) enter into any Contract, option or
understanding with respect to any transfer of any or all of its Shares or any
interest therein; (iii) except as provided herein, grant any proxy,
power-of-attorney or other authorization or consent in or with respect to its
Shares; (iv) deposit its Shares into a voting trust or enter into a voting
agreement or arrangement with respect to its Shares; or (v) take any other
action that would in any way restrict, limit or interfere with the performance
of such Shareholder's obligations hereunder or the transactions contemplated
hereby. Notwithstanding the foregoing, each Shareholder may transfer its Shares
(i) as a bona fide gift or gifts, provided that the donee or donees thereof
agree to be bound by the terms and provisions set forth herein and executes and
delivers to Purchaser a copy of this Agreement, (ii) to any trust for the direct
or indirect benefit of the undersigned or the immediate family of the
undersigned, provided that the trustee of the trust agrees to be bound by the
terms and provisions set forth herein and executes and delivers to Purchaser a
copy of this Agreement or (iii) with the prior written consent of Purchaser. For
purposes of this Agreement, "immediate family" shall mean any relationship by
blood, marriage or adoption, not more remote than first cousin. In addition,
notwithstanding the foregoing, if the undersigned is a corporation, the
corporation may transfer the capital stock of the Company to any wholly-owned
subsidiary of such corporation; provided, however, that in any such case, it
shall be a condition to the transfer that the transferee execute an agreement
stating that the transferee is receiving and holding such capital stock subject
to the terms and provisions of this Agreement and there shall be no further
transfer of such capital stock except in accordance with this Agreement, and
provided further that any such transfer shall not involve a disposition for
value. Notwithstanding the foregoing, no transfer permitted hereunder shall
release the transferring Shareholder from its obligations under this Agreement
(including, without limitation, pursuant to Section 7 hereunder).
SECTION 5. Shareholder Capacity. No person executing this Agreement who is or
--------------------
becomes during the term hereof a director of the Company makes any agreement or
understanding herein in his or her capacity as such director. Each Shareholder
signs solely in his or her capacity as the owner of, or the trustee of a trust
whose beneficiaries are the owners of, on a several (and not joint) basis, such
Shareholder's Shares. Each Shareholder is executing this Agreement severally
(and not jointly) in his individual capacity and not collectively and is not
forming a partnership group or other arrangement hereby.
SECTION 6. Certain Events. In the event of any share split, share dividend,
--------------
merger, reorganization, recapitalization or other similar change in the capital
structure of the Company affecting the Common Shares or the acquisition of
additional shares of Common Shares or other securities or rights of the Company
by any Shareholder, the number of Shares shall be adjusted appropriately, and
this Agreement and the rights and obligations hereunder shall attach to any
additional shares of Common Shares or other securities or rights of the Company
issued to or acquired by any such Shareholder.
SECTION 7. Certain Other Agreements. From the date of this Agreement until the
------------------------
earlier of the termination of this Agreement or the Effective Time (as such term
is defined in the Exchange Offer Agreement), and shall not permit or authorize
any advisor or representative
-4-
<PAGE>
retained by or acting for or on behalf of any such Shareholder to, directly or
indirectly, (i) take any action to initiate, solicit, continue, encourage or
facilitate (including by way of furnishing or disclosing non-public information)
any inquiries or the making of any offer or proposal with respect to a merger,
reorganization, share exchange, consolidation, business combination,
recapitalization, liquidation, dissolution or similar transaction involving the
Company or any of its subsidiaries other than in connection with Project Pluto
or any proposal or offer to acquire in any manner, directly or indirectly, 20%
or more of the shares of any class of voting securities of the Company or any of
its subsidiaries or a substantial portion of the assets of the Company or any of
its subsidiaries, other than the transactions contemplated by or as provided in
the Exchange Offer Agreement or by this Agreement (any of the foregoing being
referred to as an "Acquisition Proposal"), or (ii) except in his capacity as a
--------------------
director pursuant to the Exchange Offer Agreement, engage in negotiations,
discussions or communications regarding or disclose any information relating to
the Company or any of its subsidiaries or afford access to the properties, books
or records of the Company or any of its subsidiaries to any person, corporation,
partnership or other entity or group (a "Potential Acquiror") that may be
------------------
considering making, or has made, an Acquisition Proposal or knowingly facilitate
any effort or attempt to make or implement an Acquisition Proposal or accept an
Acquisition Proposal. Each of the Shareholders shall (i) notify Purchaser
promptly (and in any event within one business day) after receipt by it of any
Acquisition Proposal (or any indication that any person is considering making an
Acquisition Proposal) or any request for non-public information relating to the
Company or any of its subsidiaries or for access to the properties, books or
records of the Company or any of its subsidiaries by any person that may be
considering making, or has made, an Acquisition Proposal, (ii) notify Purchaser
promptly of any material change to any such Acquisition Proposal received by it,
indication or request and (iii) upon reasonable request by Purchaser, provide
Purchaser with all material information about any such Acquisition Proposal,
indication or request received by it.
SECTION 8. Further Assurances. Each of the Shareholders shall, upon request of
------------------
Purchaser, take such further actions as may reasonably be necessary or desirable
to carry out the provisions hereof, provided that the Shareholders shall not be
required to incur any additional costs or expenses or receive less than the
agreed price as provided in Section 3 without their prior written consent.
SECTION 9. Termination. Except as otherwise provided in this Agreement, this
-----------
Agreement, and all rights and obligations of the parties hereunder, shall
terminate immediately upon the earlier of (i) the acquisition by Purchaser of
all of the Shares, (ii) the termination of the Exchange Offer Agreement in
accordance with its terms or provided, however, that Section 10 shall survive
-------- -------
any termination of this Agreement.
SECTION 10. Expenses. All fees and expenses incurred by any party hereto shall
--------
be borne by the party incurring such fees and expenses.
SECTION 11. Public Announcements. Each of the Shareholders and Purchaser agree
--------------------
that they will not issue any press release or otherwise make any public
statement with respect to this Agreement or the transactions contemplated hereby
without the prior consent of the other party, which consent shall not be
unreasonably withheld or delayed; provided, however, that such disclosure can be
-------- -------
made without obtaining such prior consent if (i) the disclosure is required by
-5-
<PAGE>
Law, and (ii) the party making such disclosure has first used its best efforts
to consult with the other party about the form and substance of such disclosure.
SECTION 12. Definitions. As used in this Agreement, the following terms shall
-----------
have the meanings indicated below:
"Contract" means any agreement, lease, evidence of indebtedness, mortgage,
--------
indenture, security agreement or other contract (whether written or oral).
"Law" means any law, statute, rule, regulation, ordinance and other
---
pronouncement having the effect of law of the United States, any foreign country
or any domestic or foreign state, county, city or other political subdivision or
of any Governmental or Regulatory Authority.
"Liens" means any mortgage, pledge, assessment, security interest, lease, lien,
-----
adverse claim, levy, charge or other encumbrance of any kind, or any conditional
sale Contract, title retention Contract or other Contract to give any of the
foregoing.
"Governmental or Regulatory Authority" means any court, tribunal, arbitrator,
------------------------------------
authority, agency, commission, official or other instrumentality of the United
States, any foreign country or any domestic or foreign state, county, city or
other political subdivision.
"Order" means any writ, judgment, decree, injunction or similar order of any
-----
Governmental or Regulatory Authority.
SECTION 13. Miscellaneous.
-------------
(d) All notices, requests and other communications hereunder must be in
writing and will be deemed to have been duly given only if delivered
personally or by facsimile transmission or mailed (first class postage
prepaid) to the parties at the following addresses or facsimile numbers:
(A) if to any Shareholder, to such Shareholder at the address set
forth on the signature page hereto:
with copies to:
Sullivan & Cromwell
St. Olave's House
9a Ironmonger Lane
London EC2V 8EY
Attn: William A. Plapinger
Fax: +44 207 710 6565
Tel: +44 207 710 6800
and
(B) if to Purchaser, to:
United Pan-Europe Communications N.V.
-6-
<PAGE>
Fred. Roeskestraat 123, P.O. Box 74763
1070 BT Amsterdam
The Netherlands 1070 BT
Telephone: +31 20 778 9872
Facsimile: +31 20 778 9871
Attention: General Counsel
with a copy to:
Clifford Chance Rogers & Wells LLP
200 Park Avenue
New York, New York 10166
Telephone: +1 212 878-8000
Facsimile: +1 212 878-8375
Attention: Bonnie A. Barsamian
and to:
Clifford Chance Limited Liability Partnership
200 Aldersgate Street
London EC1A 4JJ
Telephone: + 44 207 600 1000
Facsimile: + 44 207 600 5555
Attention: Daniel Kossoff
All such notices, requests and other communications will (i) if delivered
personally to the address as provided in this Section, be deemed given upon
delivery, (ii) if delivered by facsimile transmission to the facsimile number as
provided in this Section, be deemed given upon receipt, and (iii) if delivered
by mail in the manner described above to the address as provided in this
Section, be deemed given upon receipt (in each case regardless of whether such
notice, request or other communication is received by any other person to whom a
copy of such notice is to be delivered pursuant to this Section). Any party from
time to time may change its address, facsimile number or other information for
the purpose of notices to that party by giving notice specifying such change to
the other parties hereto.
(e) The headings contained in this Agreement are for reference purposes only
and shall not affect in any way the meaning or interpretation of this
Agreement.
(f) This Agreement may be executed in two or more counterparts, each of which
shall be deemed an original but all of which shall be considered one and
the same agreement.
(g) This Agreement constitutes the entire agreement, and supersedes all prior
agreements and understandings, whether written and oral, among the parties
hereto with respect to the subject matter hereof.
(h) This Agreement shall be governed by, and construed in accordance with, the
laws of the State of New York.
(i) Each party hereby irrevocably submits to the non-exclusive jurisdiction of
the United States District Court for the Southern District of New York
located in the Borough of
-7-
<PAGE>
Manhattan, City of New York in any action, suit or proceeding arising in
connection with this Agreement, and agrees that any such action, suit or
proceeding shall be brought in such court (and waives any objection based
on forum non conveniens or any other objection to venue therein); provided,
however, that such consent to jurisdiction is solely for the purpose
referred to in this paragraph (f) and shall not be deemed to be a general
submission to the jurisdiction of said Courts or in the State of New York
other than for such purposes. Each party hereto hereby waives any right to
a trial by jury in connection with any such action, suit or proceeding.
(j) Neither this Agreement nor any of the rights, interests or obligations
hereunder shall be assigned by any of the parties hereto (whether by
operation of law or otherwise) without the prior written consent of the
other parties, and any such purported assignment shall be null and void;
provided, however, Purchaser may, without the prior written consent of any
-------- -------
Shareholder assign its rights and obligations to any of its direct or
indirect wholly owned subsidiaries in connection with, or for the purpose
of, effecting the transactions contemplated by the Exchange Offer
Agreement. Subject to the preceding sentence, this Agreement will be
binding upon, inure to the benefit of and be enforceable by, the parties
and their respective successors and assigns, and the provisions of this
Agreement are not intended to confer upon any person other than the parties
hereto any rights or remedies hereunder.
(k) If any term, provision, covenant or restriction herein is held by a court
of competent jurisdiction or other authority to be invalid, void or
unenforceable or against its regulatory policy, the remainder of the terms,
provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or
invalidated.
(l) Each of the parties hereto acknowledge and agrees that in the event of any
breach of this Agreement, each non-breaching party would be irreparably and
immediately harmed and could not be made whole by monetary damages. It is
accordingly agreed that the parties hereto (i) will waive, in any action
for specific performance, the defence of adequacy of a remedy at law and
(ii) shall be entitled, in addition to any other remedy to which they may
be entitled at law or in equity, to compel specific performance of this
Agreement.
(m) No amendment, modification or waiver in respect to this Agreement shall be
effective unless it shall be in writing and signed by each party hereto.
-8-
<PAGE>
IN WITNESS WHEREOF, Purchaser and the Shareholders have caused this Agreement to
be duly executed and delivered as of the date first written above.
PURCHASER
By: S/S
-------------------------
Name: ANTON TUIJTEN
Title: GENERAL COUNSEL/POA
INDIVIDUAL SHAREHOLDERS:
S/S
------------------------------
HARRY EVANS SLOAN
Address: SBS Broadcasting S.A.
8-10 rue Mathias Hardt
L-1717 Luxembourg
Luxembourg
S/S
------------------------------
MICHAEL FINKELSTEIN
Address: SBS Broadcasting S.A.
8-10 rue Mathias Hardt
L-1717 Luxembourg
Luxembourg
S/S
------------------------------
HOWARD A. KNIGHT
Address: SBS Broadcasting S.A.
8-10 rue Mathias Hardt
L-1717 Luxembourg
Luxembourg
S/S
------------------------------
MARTIN LINDSKOG
Address: SBS Broadcasting S.A.
8-10 rue Mathias Hardt
L-1717 Luxembourg
Luxembourg
-9-
<PAGE>
ANNEX I
Beneficial Ownership of Company Common Shares
Number of Shares
----------------
Harry Evans Sloan 819,366
Michael Finkelstein 125,000
Howard A. Knight 141,105
Martin Lindskog 6,723
-10-
<PAGE>
[LOGO OF UPC] [LOGO OF SBS]
For immediate release
UPC TO OFFER TO ACQUIRE SBS BROADCASTING, SIGNIFICANTLY EXPANDING ITS MEDIA AND
CONTENT OPERATIONS
AMSTERDAM and LUXEMBOURG, 9 March 2000 - United Pan-Europe Communications
(NASDAQ: UPCOY: Amsterdam Stock Exchange (AEX):UPC) and SBS Broadcasting
(NASDAQ: SBTV; AEX: SBSB) announced today that they have entered into an
agreement whereby UPC is expected to make an exchange offer to acquire SBS, one
of Europe's fastest growing television and radio broadcasting groups, in an
approximately $2.8 billion stock and cash transaction valuing SBS at
approximately $85.14 per share, based on UPC's current share price.
The transaction, which has the full support of the Boards of Directors of UPC
and SBS, provides that UPC will initiate an exchange offer to acquire all of the
issued and outstanding shares of SBS for (i) $40.00 per SBS share in cash, and
(ii) 0.19048 shares of UPC Ordinary Shares A per SBS share subject to a collar
mechanism explained below. The Board of Directors of SBS has recommended the
transaction to all of its shareholders. UPC intends that all shares not
purchased in the exchange offer will be converted into the right to receive the
same cash and stock consideration as provided in the exchange offer, in a second
step transaction following consummation of the exchange offer.
Concurrent with execution of the exchange offer, certain holders of common stock
and options of SBS entered into agreements to tender or exchange all of their
equity interests in SBS to UPC which, together with UPC's current interest
represents 27.6% of the outstanding common stock, or 40.9% of the common stock
on a fully diluted basis. In addition, Harry Evans Sloan, Chairman and CEO of
SBS, is being nominated to join the UPC Supervisory Board.
SBS creates, acquires, packages and distributes programming and other media
content in many of the UPC territories and elsewhere in Europe via television
channels, radio stations and the Internet. SBS owns and/or operates ten
television and 17 radio stations across ten European countries in addition to
various promotional and destinational websites. Through its SBS New Media
division, SBS leverages its proprietary content and its promotional and content
aggregation expertise to develop digital content and Internet businesses.
-1-
<PAGE>
UPC's expected acquisition of SBS builds on the previously announced strategic
alliance between the two companies to link more closely their media content and
distribution capabilities. SBS will join UPC Media to create the first real
pan-European multi media platform operating in 18 European countries by
combining SBS's strength in free-to-air broadcasting with UPCtv's significant
presence in the multi-channel television sector.
Commenting for UPC, Mark Schneider, Chairman and Chief Executive, said: "This
transaction represents another important step in the development of UPC Media's
digital content and interactive programming strategy. Our broadband vision
centers on the delivery of compelling content and services to our customers
across a variety of distribution platforms, and SBS brings significant expertise
in the development, acquisition and packaging of high quality content that we
believe meaningfully enhances our ability to fulfill this vision. In particular,
this transaction will benefit our UPCtv and chello internet divisions.
"We at UPC are excited about the opportunity to work more fully with Harry Evans
Sloan and his SBS team to establish the first pan-European company with strength
in all major content distribution windows. Furthermore, we view the significant
geographic synergies between our existing cable and internet operations with
those of SBS as an outstanding opportunity for expanding our advertising and
e-commerce relationships in our local markets."
Harry Evans Sloan, Chairman and Chief Executive Officer of SBS, said: "The
combination of SBS and UPC is very strategic. We are pleased to be joining
forces, and we look forward to developing UPC Media into Europe's leading
content player. For SBS, this is a natural alliance because UPC is a leading
provider of cable services and content in most of our broadcast markets. Working
together, we can accelerate the development of SBS' core businesses and new
media strategies."
Andrew Barron, Managing Director of UPC Media, commented: "This is a major
development for the media content business of UPC which will enhance the quality
and breadth of our existing programming portfolio across entertainment,
information, interactive and e-commerce content. This transaction will provide
greater choice and higher quality video services to residential and business
subscribers throughout Europe."
Howard A. "Woody" Knight, SBS Vice Chairman and Chief Operating Officer, added:
"This transaction recognizes substantial value for SBS shareholders and is
clearly advantageous for all our stakeholders. UPC is Europe's leading broadband
communications company. Combining our strengths creates an unparalleled
opportunity to accelerate the growth of both companies and to build additional
shareholder value."
UPC was advised by Goldman Sachs International and Clifford Chance in this
transaction; SBS was advised by Donaldson, Lufkin & Jenrette International and
Sullivan & Cromwell.
Description of Certain Terms of the Transaction:
The exchange offer is currently expected to commence in the 3rd quarter 2000
after a registration statement has been filed with the US Securities and
Exchange Commission and declared effective and offer documents become available.
The exchange offer will be conditioned upon receipt by UPC of SBS shares which
together with the approximately 23% held by UPC represent at least 66 2/3% of
the outstanding SBS shares on a diluted basis and other customary conditions.
The stock portion of the consideration in the tender offer will be subject to a
collar provision whereby SBS shareholders will receive not less than $77.50 and
not more than $86.00 for each SBS share based on UPC's average closing share
price prevailing on the trading days ending shortly prior to the making of the
exchange offer. Furthermore, the parties will work together to obtain the
necessary and appropriate consents and approvals to proceed with the
transaction.
Description of Parties to Transaction:
SBS is a European commercial television and radio broadcasting company with
operations in Western and Central Europe. Countries where SBS currently
broadcasts include: Sweden, Norway, Denmark, Belgium, The Netherlands, Hungary,
Switzerland, Finland, Greece and Slovenia. SBS is also an emerging presence in
many aspects of European new media. SBS
-2-
<PAGE>
holds ownership interests in a variety of e-commerce activities. A joint venture
between SBS and Endemol, Holland's leading production company, is developing
@FUN, Holland's first entertainment portal and through vt4.net, SBS is the
leading provider of free Internet access services in Belgium. SBS' radio station
KISS-FM has the most heavily trafficked Internet site in Finland. HOT Italia, a
joint venture amongst HOT Europe, SBS and HSN, will launch Italy's first live
home shopping channel late in 2000.
Headquartered in Amsterdam, UPC is one of the most innovative broadband
communications companies in Europe and owns and operates the largest
pan-European group of broadband communication networks. UPC provides cable
television, telephony, high-speed Internet access and programming services in
thirteen countries across Europe and in Israel. As of January 31, 2000, on an
aggregate basis, UPC's systems passed approximately 10.5 million homes with more
than 6.8 million basic cable subscribers. In addition, UPC systems had 226,700
residential telephony lines and 19,500 business telephony lines as well as
130,100 residential Internet subscribers and 3,600 business Internet
subscribers.
UPC is a consolidated subsidiary of Denver based UnitedGlobalCom Inc. ("United")
(NASDAQ: "UCOMA") and Microsoft has an interest of approximately 7.0% in UPC.
UPC shares are traded on the Amsterdam Stock Exchange ("UPC") and NASDAQ
("UPCOY").
Legal Disclaimers and Safe Harbour Statements:
The tender offer described in this announcement for the outstanding shares of
SBS has not yet commenced, and this announcement is neither an offer to purchase
nor a solicitation of an offer to sell securities. The tender offer will be made
only through a prospectus and the Letter of Transmittal.
The Merger Committee of The Netherlands has been notified in accordance with the
Netherlands Merger Code.
UPC and SBS do not currently envisage that the transaction, if consummated, will
result in material consequences for employees of the operations of UPC and SBS
in the Netherlands.
Statements in this press release regarding SBS' and UPC's businesses which are
not historical facts including the potential joint ventures and investments are
"forward-looking statements" that involve risks and uncertainties. These risks
and uncertainties include the parties' abilities to consummate the transaction
and develop the business concepts outlined.
IN CONNECTION WITH ITS PROPOSED EXCHANGE OFFER, UPC WILL FILE A REGISTRATION
STATEMENT WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION ("SEC") AND A
PROSPECTUS AND EXCHANGE OFFER MATERIALS WILL BE INCLUDED IN THAT REGISTRATION
STATEMENT. OTHER MATERIALS RELATING TO THE OFFER WILL ALSO BE FILED WITH THE
SEC. INVESTORS ARE URGED TO READ THE PROSPECTUS AND EXCHANGE OFFER MATERIALS AND
OTHER RELEVANT DOCUMENTS TO BE FILED WITH THE SEC BECAUSE THEY WILL INCLUDE
IMPORTANT INFORMATION.
MATERIALS FILED WITH THE SEC WILL BE AVAILABLE ELECTRONICALLY, WITHOUT CHARGE,
AT AN INTERNET SITE MAINTAINED BY THE SEC. THE ADDRESS OF THAT SITE IS
HTTP://WWW.SEC.GOV. IN ADDITION, THE PROSPECTUS AND EXCHANGE OFFER MATERIALS
FILED WITH THE SEC WILL BE MAILED TO SBS SHAREHOLDERS AND MAY BE OBTAINED
WITHOUT CHARGE FROM UPC OR SBS UPON REQUEST. DOCUMENTS FILED WITH THE SEC WITH
RESPECT TO THE OFFER MAY BE OBTAINED FROM UPC DIRECTING A REQUEST TO UNITED
PAN-EUROPE COMMUNICATIONS N.V., FRED. ROESKESTRAAT 123, P.O. BOX 74763, 1070 BT
AMSTERDAM, THE NETHERLANDS, TELEPHONE +31-20-778-9840.
UNLESS UPC OTHERWISE DETERMINES, THE EXCHANGE OFFER WILL NOT BE MADE, DIRECTLY
OR INDIRECTLY, IN OR INTO, OR BY THE USE OF THE MAILS OR ANY MEANS OR
INSTRUMENTALITY (INCLUDING, WITHOUT LIMITATION, TELEPHONICALLY OR
ELECTRONICALLY) OF INTERSTATE OR FOREIGN COMMERCE OF, OR ANY FACILITIES OF A
NATIONAL, STATE OR OTHER SECURITIES EXCHANGE OF CANADA, AUSTRALIA OR JAPAN AND
WILL NOT BE CAPABLE OF ACCEPTANCE BY ANY SUCH USE, MEANS, INSTRUMENTALITY OR
FACILITY WITHIN CANADA, AUSTRALIA OR
-3-
<PAGE>
JAPAN AND THIS ANNOUNCEMENT MAY NOT BE DISTRIBUTED IN ANY SUCH JURISDICTIONS.
THIS ANNOUNCEMENT HAS BEEN ISSUED BY UPC AND HAS BEEN APPROVED BY GOLDMAN SACHS
INTERNATIONAL FOR THE PURPOSES OF SECTION 57 OF THE UK FINANCIAL SERVICES ACT
1986.
SOURCE: United Pan-Europe Communications and SBS Broadcasting
CONTACTS:
For SBS Broadcasting: Investors: Chris Plunkett or Michael Smargiassi, Brainerd
Communicators, Inc., +1 212 986 6667, or Press: Jeff Pryor, Pryor & Associates,
+1 818 382 2233 or Elena Shalneva, Citigate Dewe Rogerson, +44 171 282 28 40.
For UPC: Henrietta Hirst, Director of Group Corporate Communications, +44 207
518 7996, fax: +44 207 518 7981, or mobile: +44 788 074 2375,
[email protected] or Chris Smith, Managing Director Corporate Development,
- -----------------------
+ 44 207 518 7988 [email protected] or Ton Tuijten, General Counsel,
--------------------
+31207789872 or mobile +31622522276, [email protected].
---------------------
-4-
