SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
PLD Telekom Inc.
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(Name of Issuer)
Common Stock $.01 par value
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(Title of Class and Securities)
69340T 10
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(CUSIP Number of Class of Securities)
Arthur M. Siskind, Esq.
c/o News America Incorporated
The News Corporation Limited
1211 Avenue of the Americas
New York, New York 10036
(212) 852-7000
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(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
Copy to:
Alan G. Straus, Esq.
Skadden, Arps, Slate, Meagher & Flom LLP
919 Third Avenue
New York, New York 10022
(212) 735-2037
August 14, 1998
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(Date of Event which Requires
Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is
filing this Schedule because of section 240.13d-1(e), 240.13d-1(f) or
240.13d-1(g), check the following: ( )
Note. Schedule filed in paper format shall include a signed original
and five copies of the Schedule, including all exhibits. See section
240.13d-7(b) for other parties to whom copies are to be sent.
(Continued on following pages)
_________________________
/1/ The remainder of this cover page shall be filled out for a
reporting person's initial filing on this form with respect to the subject
class of securities, and for any subsequent amendment containing
information which would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities
Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of
that section of the Act but shall be subject to all other provisions of the
Act (however, see the Notes).
SCHEDULE 13D
CUSIP No. 69340T 10
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(1) NAMES OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
The News Corporation Limited
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(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP:
(a) ( )
(b) (x)
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(3) SEC USE ONLY
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(4) SOURCE OF FUNDS
WC
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(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) ( )
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(6) CITIZENSHIP OR PLACE OF ORGANIZATION
South Australia, Australia
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(7) SOLE VOTING POWER
14,631,780
NUMBER OF SHARES ------------------------------------------------
BENEFICIALLY (8) SHARED VOTING POWER
OWNED BY -0-
EACH ------------------------------------------------
REPORTING (9) SOLE DISPOSITIVE POWER
PERSON 14,631,780
WITH ------------------------------------------------
(10) SHARED DISPOSITIVE POWER
-0-
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(11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
14,631,780
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(12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES CERTAIN SHARES
( )
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(13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
38.41%
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(14) TYPE OF REPORTING PERSON
CO
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SCHEDULE 13D
CUSIP No. 69340T 10
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(1) NAMES OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
News America Incorporated
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(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP:
(a) ( )
(b) (x)
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(3) SEC USE ONLY
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(4) SOURCE OF FUNDS
WC
-----------------------------------------------------------------------------
(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) ( )
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(6) CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
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(7) SOLE VOTING POWER
14,631,780
NUMBER OF SHARES ------------------------------------------------
BENEFICIALLY (8) SHARED VOTING POWER
OWNED BY -0-
EACH ------------------------------------------------
REPORTING (9) SOLE DISPOSITIVE POWER
PERSON 14,631,780
WITH ------------------------------------------------
(10) SHARED DISPOSITIVE POWER
-0-
-----------------------------------------------------------------------------
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
14,631,780
-----------------------------------------------------------------------------
(12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES CERTAIN SHARES
( )
-----------------------------------------------------------------------------
(13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
38.41%
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(14) TYPE OF REPORTING PERSON
CO
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SCHEDULE 13D
CUSIP No. 69340T 10
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(1) NAMES OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
News PLD LLC
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(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP:
(a) ( )
(b) (x)
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(3) SEC USE ONLY
-----------------------------------------------------------------------------
(4) SOURCE OF FUNDS
WC
-----------------------------------------------------------------------------
(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) ( )
-----------------------------------------------------------------------------
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
-----------------------------------------------------------------------------
(7) SOLE VOTING POWER
14,631,780
NUMBER OF SHARES ------------------------------------------------
BENEFICIALLY (8) SHARED VOTING POWER
OWNED BY -0-
EACH ------------------------------------------------
REPORTING (9) SOLE DISPOSITIVE POWER
PERSON 14,631,780
WITH ------------------------------------------------
(10) SHARED DISPOSITIVE POWER
-0-
-----------------------------------------------------------------------------
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
14,631,780
-----------------------------------------------------------------------------
(12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES CERTAIN SHARES
( )
-----------------------------------------------------------------------------
(13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
38.41%
-----------------------------------------------------------------------------
(14) TYPE OF REPORTING PERSON
OO
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SCHEDULE 13D
CUSIP No. 69340T 10
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(1) NAMES OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
K. Rupert Murdoch
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(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP:
(a) ( )
(b) (x)
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(3) SEC USE ONLY
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(4) SOURCE OF FUNDS
WC
-----------------------------------------------------------------------------
(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) ( )
-----------------------------------------------------------------------------
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
-----------------------------------------------------------------------------
(7) SOLE VOTING POWER
14,631,780
NUMBER OF SHARES ------------------------------------------------
BENEFICIALLY (8) SHARED VOTING POWER
OWNED BY -0-
EACH ------------------------------------------------
REPORTING (9) SOLE DISPOSITIVE POWER
PERSON 14,631,780
WITH ------------------------------------------------
(10) SHARED DISPOSITIVE POWER
-0-
-----------------------------------------------------------------------------
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
14,631,780
-----------------------------------------------------------------------------
(12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES CERTAIN SHARES
( )
-----------------------------------------------------------------------------
(13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
38.41%
-----------------------------------------------------------------------------
(14) TYPE OF REPORTING PERSON
IN
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Item 1. Security and Issuer.
The title of the class of equity securities to which this Schedule
relates is common stock, $.01 par value per share (the "Common Stock"), of
PLD Telekom Inc., a Delaware corporation ("PLD"). The address of the
principal executive offices of PLD is 680 Fifth Avenue, 24th Floor, New
York, New York 10019.
Item 2. Identity and Background.
This Schedule is being filed by (i) The News Corporation Limited,
a South Australia, Australia corporation ("News Corporation"), with its
principal executive office located at 2 Holt Street, Sydney, New South
Wales 2010, Australia, (ii) News America Incorporated, a Delaware
corporation ("NAI"), with its principal executive office located at 1211
Avenue of the Americas, New York, New York 10036, (iii) News PLD LLC, a
Delaware limited liability company ("News PLD LLC"), with its principal
executive office located at 1211 Avenue of the Americas, New York, New York
10036, and (iv) K. Rupert Murdoch, an United States citizen, with his
business address at 10201 West Pico Boulevard, Los Angeles, CA 90035. News
Corporation, NAI, News PLD LLC and K. Rupert Murdoch are referred herein
collectively as the "Reporting Persons". The name, residence or business
address, principal occupation or employment and the name, principal
business, and address of any corporation or other organization in which
such employment is conducted with respect to each director and executive
officer of each of the Reporting Persons are set forth in Schedule 1
attached hereto, which is incorporated herein by reference. To the
knowledge of the Reporting Persons, each of the persons named on Schedule 1
is a United States citizen unless otherwise indicated.
News Corporation is a diversified international communications
company principally engaged in the production and distribution of motion
pictures and television programming, television broadcasting, publication
of newspapers, books, magazines and promotional free-standing inserts,
developing digital broadcasting, conditional access and subscription
management systems and promoting computer information services.
News Corporation owns indirectly 100% of the outstanding common
stock of NAI. NAI, the principal subsidiary in the U.S. of News Corporation
conducts, together with its affiliates and subsidiaries, a substantial
portion of the U.S. activities of News Corporation.
NAI owns directly and through an intermediary 100% of the
outstanding membership interests in News PLD LLC.
News PLD LLC primarily holds, manages and otherwise deals with the
Reporting Persons' investment in PLD.
K. Rupert Murdoch is the Chairman and Chief Executive of News
Corporation; a director of News Publishing Australia Limited; a director of
News International plc, News Corporation's principal subsidiary in the
United Kingdom; a director of News Limited, News Corporation's principal
subsidiary in Australia; a director of NAI; Chairman and a director of
Satellite Television Asian Region Limited, the Asia Pacific Region's
largest satellite television broadcaster; and a director of British Sky
Broadcasting Group plc, which operates the leading pay television
broadcasting services in the United Kingdom and the Republic of Ireland.
Approximately 30% of the voting stock of News Corporation is
owned by Cruden Investments Pty. Limited, a subsidiary thereof, K. Rupert
Murdoch, members of his immediate family and a corporation which is
controlled by trustees of settlements and trusts set up for the benefit of
the Murdoch family, certain charities and other persons.
Cruden Investments Pty. Limited is a private Australian
incorporated investment company owned by Mr. Murdoch, members of his family
and various corporations and trusts, the beneficiaries of which include Mr.
Murdoch, members of his family and charities. By virtue of shares of News
Corporation owned by corporations which are controlled by the trustees of
settlements and trusts set up for the benefit of the Murdoch family,
certain charities and other persons, and Mr. Murdoch's positions as
Chairman and Chief Executive of News Corporation, Mr. Murdoch may be deemed
to control the operations of News Corporation.
None of the Reporting Persons have, during the last five years,
(i) been convicted in a criminal proceeding (excluding minor traffic
violations or similar misdemeanors) or (ii) been a party to a civil
proceeding of a judicial or administrative body of competent jurisdiction a
result of which it was or is subject to a judgment, decree or final order
enjoining future violations of, or prohibiting or mandating activities
subject to, federal or state securities laws or finding any violations with
respect to such laws.
Item 3. Source and Amount of Funds or Other Consideration.
Pursuant to a Stock Purchase Agreement dated April 19, 1998, by
and between Cable and Wireless plc ("C&W") and NAI, as amended (the
"NAI/C&W Stock Purchase Agreement"), NAI agreed to acquire from C&W , for
the sum of $80,000,000, (i) 10,555,739 shares of Common Stock of PLD
(including 500,000 shares of Common Stock of PLD to be issued to C&W
pursuant to the CIBBV Stock Purchase Agreement (as defined below)), which
constituted all of the shares of Common Stock of PLD then owned or to be
acquired directly and indirectly by C&W, (ii) a warrant dated June 28,
1995, conferring on the holder the right to purchase up to 250,000 shares
(subject to adjustment on the occurrence of certain events) of Common Stock
of PLD at an exercise price of 11.3125 Canadian dollars per share, expiring
on June 22, 1999 (the "PLD Warrant"), and (iii) all of the shares of PLD
Holdings Limited, a Bermuda company ("Holdings").
Pursuant to the Asset Exchange Agreement dated April 19, 1998, by
and between NAI and PLD, as amended (the "Asset Exchange Agreement"), PLD
agreed to sell to NAI 100% of the outstanding shares of Holdings (which NAI
was to acquire from C&W pursuant to the News/C&W Stock Purchase Agreement)
in exchange for the issuance of 3,826,041 shares of Common Stock of PLD.
Pursuant to a Stock Purchase Agreement dated April 19, 1998, by
and between PLD and C&W, as amended (the "CIBBV Stock Purchase Agreement"),
PLD agreed with C&W to acquire (i) all of the shares of CommStruct
International Byelorussia BV, a Netherlands corporation ("CIBBV"), which is
the owner of 50% of Belarus-Netherlands Belcel Joint Venture ("BELCEL"),
which in turn is the operator of a mobile telephone business in Belarus,
plus (ii) certain intercompany indebtedness. Such shares of CIBBV and such
intercompany indebtedness are hereinafter referred as the "CIBBV Interest."
PLD agreed to issue to C&W 500,000 shares of Common Stock of PLD for the
CIBBV Interest.
Pursuant to an Assignment dated April 23, 1998, by and between NAI
and News PLD LLC, NAI assigned all of its right, title and interest under
the NAI/C&W Stock Purchase Agreement and the Asset Exchange Agreement to
News PLD LLC.
The closing of each of the transactions described above occurred
on August 14, 1998. Giving effect to the completion of the transactions
summarized above, the Reporting Persons beneficially own an aggregate of
14,631,780 shares of Common Stock of PLD (representing approximately 38.41%
of the outstanding Common Stock of PLD after the completion of the
transactions). The funds used by the Reporting Persons to acquire the
securities covered by this Schedule were provided from working capital.
Item 4. Purpose of Transaction.
The Reporting Persons acquired their shares of Common Stock of PLD
for investment purposes and currently intend to continue to hold them for
such purposes. Such Reporting Persons from time to time may review the
merits of their investment in PLD and evaluate their options with respect
thereto. Subject to such review and evaluation, any or all of such
Reporting Persons may determine to acquire additional shares of Common
Stock of PLD (or securities convertible into Common Stock of PLD) through
open market purchases or privately negotiated transactions, may determine
to sell shares of Common Stock of PLD (or securities convertible into
Common Stock of PLD) and/or may pursue any other options with respect to
their investment in PLD.
Notwithstanding anything to the contrary contained herein, each of
the Reporting Persons reserves the right, depending on all relevant
factors, to change its intention with respect to any and all of the matters
referred to in the preceding paragraph.
Other than as described in this Schedule, the Reporting Persons do
not have any specific plans or proposals that relate to or would result in
any of the actions specified in clauses (a) through (j) of Item 4 of
Schedule 13D.
Item 5. Interest in Securities of the Issuer.
The number of shares of Common Stock of PLD directly beneficially
owned as determined pursuant to Rule 13d-3 under the Securities Exchange
Act of 1934, as amended, by News PLD LLC as of the date hereof is
14,631,780 shares of Common Stock of PLD, representing approximately 38.41%
of the outstanding Common Stock of PLD, of which 250,000 of such shares may
be deemed to be beneficially owned pursuant to the PLD Warrant, and each of
News Corporation, NAI, and Mr. Murdoch, as persons who may be deemed to
control News PLD LLC, may also be deemed to beneficially own such shares.
Each of the Reporting Persons has sole voting or dispositive power with
respect to the shares of Common Stock of PLD which they beneficially hold.
None of the Reporting Persons share voting and dispositive power with
respect to any shares of Common Stock of PLD which they beneficially hold.
For purposes of computing the percentage beneficial ownership of the
Reporting Persons, the total number of shares of Common Stock of PLD
considered to be outstanding is 38,096,789. (1)
----------------------------
(1) Based solely on the number of shares outstanding on July 31,
1998 as disclosed in the Form 10-Q for the quarter ended June
30, 1998 filed by PLD, together with the 3,826,041 shares of
Common Stock of PLD issued pursuant to the Asset Exchange
Agreement, the 500,000 shares of Common Stock of PLD issued
pursuant to the CIBBV Stock Purchase Agreement and the right
to acquire 250,000 shares of Common Stock of PLD pursuant to
the PLD Warrant.
Except for the transactions described in this Schedule, no
transactions were effected by the Reporting Persons in the Common Stock of
PLD during the 60 days preceding the date hereof.
Item 6. Contracts, Arrangements, Understandings or Relationships With
Respect to Securities of the Issuer.
(a) Pursuant to the Stock Purchase Agreement dated April 19,
1998 by and between NAI and C&W, the Reporting Persons acquired the rights
to the PLD Warrant.
(b) NAI and PLD entered into a Director Nomination Agreement,
dated April 19, 1998 (the "Director Nomination Agreement"), attached hereto
as Exhibit 4, providing for, among other things, PLD to set the size of its
Board of Directors at 10 and to cause the Board of Directors to elect as
directors four individuals designated by News PLD LLC. The number of
individuals that News PLD LLC is permitted to designate pursuant to the
Director Nomination Agreement is based upon the aggregate percentage of the
total issued and outstanding shares of Common Stock of PLD owned of record
and beneficially by News PLD LLC and News Corporation and its subsidiaries
and affiliates, together, as follows:
Number of designees Percentage of Total Shares Outstanding Owned
4 23% or over
3 15% - 22.99%
2 10% - 14.99%
1 5% - 9.9%
0 below 5%
In the event that the number of directors comprising the entire
Board shall be increased beyond ten (10), the number of directors that News
PLD LLC is entitled to designate based on its share ownership shall be
appropriately and proportionately adjusted, any number resulting from such
adjustment which is not a whole number being rounded up to the nearest
whole number. The term of the Director Nomination Agreement is ten years
from the date of its execution.
(c) The Reporting Persons have commenced negotiations with ZAO
LogoVaz, a closed joint stock company organized under the laws of the
Russian Federation ("LogoVaz"), to sell to LogoVaz a 50% interest in the
Reporting Persons' investment in PLD. No assurance can be given as to
whether such negotiation will ultimately be successful or, if successful,
the terms of any such sale or the timing upon which any such sale would be
consummated.
Item 7. Material to be Filed as Exhibits.
Document Exhibit No.
-------- ----------
Stock Purchase Agreement, dated April 19, 1
1998, by and between News America
Incorporated and Cable and Wireless plc.
Stock Purchase Agreement, dated April 19, 2
1998, by and between Cable and Wireless plc
and PLD Telekom Inc.
Asset Exchange Agreement, dated April 19, 3
1998, by and between News America
Incorporated and PLD Telekom Inc.
Director Nomination Agreement, dated April 4
19, 1998, by and between PLD Telekom Inc. and
News America Incorporated.
Combined Amendment to Stock and Asset 5
Purchase Agreements, dated June 29, 1998, by
and among News America Incorporated, News PLD
LLC, Cable and Wireless plc and PLD Telekom
Inc.
Second Combined Amendment to Stock and Asset 6
Purchase Agreements, dated August 7, 1998, by
and among News America Incorporated, News PLD
LLC, Cable and Wireless plc and PLD Telekom
Inc.
Third Amendment to Asset Exchange Agreement, 7
dated August 14, 1998, by and among News
America Incorporated, News PLD LLC and PLD
Telekom Inc.
Warrant, dated June 28, 1995, granted by PLD 8
Telekom, Inc. to Cable and Wireless plc.
Assignment, dated April 23, 1998, by and 9
between News America Incorporated and News
PLD LLC.
Agreement of Joint Filing, dated August 24, 10
1998, by and among the News Corporation
Limited, News America Incorporated, News PLD
LLC and K. Rupert Murdoch.
SIGNATURE
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this Schedule is true,
complete and correct.
THE NEWS CORPORATION LIMITED
Dated: August 24, 1998 By: /s/ ARTHUR M. SISKIND
------------------------------------
Name: ARTHUR M. SISKIND
Title: DIRECTOR
SIGNATURE
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this Schedule is true,
complete and correct.
NEWS AMERICA INCORPORATED
Dated: August 24, 1998 By: /s/ ARTHUR M. SISKIND
--------------------------------------
Name: ARTHUR M. SISKIND
Title: DIRECTOR
SIGNATURE
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this Schedule is true,
complete and correct.
NEWS PLD LLC
Dated: August 24, 1998 By: /s/ Lawrence Jacobs
------------------------------------
Name: Lawrence Jacobs
Title: Vice President
SIGNATURE
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this Schedule is true,
complete and correct.
Dated: August 24,1998 By: /s/ K. Rupert Murdoch
----------------------------------------
K. Rupert Murdoch
SCHEDULE 1
DIRECTORS, EXECUTIVE OFFICERS AND CONTROLLING PERSONS OF THE REPORTING
PERSONS.
<TABLE>
<CAPTION>
Principal Business or
Organization in Which
Principal Occupation and Such Employment
Name Business Address is Conducted
- -----------------------------------------------------------------------------------
<S> <C> <C>
K. Rupert Murdoch Chairman and Chief Executive of News Corporation
News Corporation; Director of News
Publishing Australia Limited;
Director of News International
plc; Director of News Limited;
Director of NAI, Chairman and
Director of Satellite Television
Asian Region Limited ("STAR TV");
Director of British Sky
Broadcasting Group plc ("BSkyB");
10201 West Pico Boulevard
Los Angeles, CA 90035
Chase Carey Executive Director and Co-Chief Fox Television
Operating Officer of News
Corporation; Director and
Executive Vice President of NAI;
Chairman and Chief Executive
Officer of Fox Television;
10201 West Pico Boulevard
Los Angeles, CA 90035
Peter Chernin Executive Director, President and New Corporation
Chief Operating Officer of News
Corporation; Director, Chairman
and Chief Executive Officer of
NAI;
10201 West Pico Boulevard
Los Angeles, CA 90035
Ken E. Cowle(1) Non Executive Director of News News Corporation
Corporation; Director of Ansett
Australia Holdings Limited;
Chairman of Ansett International
Pty Ltd. and Chairman of Ansett
New Zealand Pty Ltd.;
2 Holt Street Sydney,
New South Wales
2010 Australia
David F. DeVoe Executive Director, Senior News Corporation
Executive Vice President and Chief
Executive Officer and Finance
Director of News Corporation;
Director and Senior Executive Vice
President of NAI; Director of STAR
TV; Director of BSkyB;
1211 Avenue of the Americas
New York, New York 10036
Aatos Erkko(2) Non Executive Director of News Sanoma
Corporation; Chairman and Chief
Executive Officer of Sanoma Group
and Sanoma Corporation ("Sanoma"),
privately owned media companies in
Finland P.O. Box 144 SF00101
Helsinki, Finland
Andrew S.B. Knight(3) Non Executive Director of News News Corporation
Corporation c/o News
International plc
1 Virginia Street
London E19X4
England
Keith H. McDonad(4) Non Executive Director of News News Corporation
Corporation; Non Executive
Chairman of Queensland Press
Limited
41 Campbell Street
Bowen Hills Queensland 4006
Anna M. Murdoch Non Executive Director of News News Corporation
Corporation;
10201 West Pico Boulevard
Los Angeles, CA 90035
Lachlan K. Murdoch Executive Director of News News Corporation
Corporation; Chairman and Director
of Queensland Press Limited;
Director of Herald & Weekly Times
Limited; Managing Director and
Director of News Limited; Deputy
Chairman of STAR TV; Director of
Beijing PDN Xinren Information
Technology Company Ltd.; Director
of FOXTEL Management Pty Ltd.;
2 Holt Street
Sydney, New South Wales 2010
Australia
Thomas J. Perkins Non Executive Director of News Kleiner Perkins
Corporation; Senior Partner at
Kleiner Perkins Canfield & Byers
("Kleiner Perkins"); Director of
Compaq Computer Corporation;
4 Embarcadero Center
Suite 3520
San Francisco, CA 94111
Bert C. Roberts, Jr. Non Executive Director of News MCI
Corporation; Chairman, Director
and Chief Executive Officer of MCI
Communications Corporation
("MCI");
1801 Pennsylvania Avenue,
N.W. Washington, D.C. 20006
Geoffrey C. Bible Non Executive Director of News Philip Morris
Corporation; Chairman and Chief
Executive Officer of Philip Morris
Companies Inc. ("Philip Morris");
Director of New York Stock
Exchange, Inc.; and Director of
Lincoln Center for the Performing
Arts, Inc.;
120 Park Avenue New
York, New York 10017
Stanley S. Shuman Non Executive Director of News Allen & Company
Corporation; Executive Vice
President and Managing Director of
Allen & Company Incorporated
("Allen & Company"); Director of
NAI; 711 Fifth Avenue New York,
New York 10176
Arthur M. Siskind Executive Director, Senior News Corporation
Executive Vice President and Group
General Counsel of News
Corporation; Director of BSkyB;
Director and Senior Executive Vice
President of NAI; Director of
STAR TV;
1211 Avenue of the Americas
New York, New York 10036
</TABLE>
EXHIBIT 1
STOCK PURCHASE AGREEMENT
between
NEWS AMERICA INCORPORATED
and
CABLE AND WIRELESS PLC
Dated April 19, 1998
TABLE OF CONTENTS
Page
ARTICLE I
SALE OF STOCK; CONSIDERATION
1.1. Sale by C&W . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.2. Consideration for the Sale by C&W. . . . . . . . . . . . . . . . 2
ARTICLE II
THE CLOSING
2.1. Time and Place of Closing . . . . . . . . . . . . . . . . . . . . 3
2.2. Deliveries by C&W . . . . . . . . . . . . . . . . . . . . . . . . 3
2.3. Deliveries by Buyer . . . . . . . . . . . . . . . . . . . . . . . 3
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF C&W
3.1. Organization . . . . . . . . . . . . . . . . . . . . . . . . . . 4
3.2. Authority Relative to this Agreement and the Ancillary
Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
3.3. Title. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3.4. Consents and Approvals; No Violation . . . . . . . . . . . . . . 5
3.5. Financial Statements; Undisclosed Liabilities . . . . . . . . . . 6
3.6. Absence of Certain Changes or Events . . . . . . . . . . . . . . 7
3.7. Legal Proceedings, etc. . . . . . . . . . . . . . . . . . . . . . 9
3.8. Fees and Commissions. . . . . . . . . . . . . . . . . . . . . . . 9
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER . . . . . . . 9
4.1. Organization. . . . . . . . . . . . . . . . . . . . . . . . . . 9
4.2. Authority Relative to this Agreement. . . . . . . . . . . . . . 9
4.3. Consents and Approvals; No Violation . . . . . . . . . . . . . 10
4.4. Fees and Commissions. . . . . . . . . . . . . . . . . . . . . . 10
4.5. Investment Intent. . . . . . . . . . . . . . . . . . . . . . . 10
ARTICLE V
COVENANTS OF THE PARTIES
5.1. Conduct of Business of Holdings. . . . . . . . . . . . . . . . 11
5.2. Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
5.3. Further Assurances . . . . . . . . . . . . . . . . . . . . . . 12
5.4. Public Statements . . . . . . . . . . . . . . . . . . . . . . . 12
5.5. Consents and Approvals. . . . . . . . . . . . . . . . . . . . . 12
[5.6. Transfer of Complus Enterprises Holding S.A. . . . . . . . . . 13
5.7. HSR Act. . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
5.8 Supplements to Schedules. . . . . . . . . . . . . . . . . . . . 13
ARTICLE VI
CLOSING CONDITIONS
6.1. Conditions to Each Party's Obligations to Effect the
Transactions Contemplated Hereby. . . . . . . . . . . . . . 14
6.2. Conditions to Obligations of Buyer . . . . . . . . . . . . . . 14
6.3. Conditions to Obligations of C&W. . . . . . . . . . . . . . . 16
ARTICLE VII
TERMINATION AND ABANDONMENT
7.1. Termination . . . . . . . . . . . . . . . . . . . . . . . . . . 17
7.2. Procedure and Effect of Termination . . . . . . . . . . . . . . 18
ARTICLE VIII
SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION
8.1. Survival of Representations. . . . . . . . . . . . . . . . . . 18
8.2. Limitations on C&W Representations and Warranties;
Investigation . . . . . . . . . . . . . . . . . . . . . . . . . 18
8.3. C&W's Indemnification of Buyer . . . . . . . . . . . . . . . . 19
8.4. Buyer's Indemnification of C&W . . . . . . . . . . . . . . . . 19
8.5. Conditions of Indemnification. . . . . . . . . . . . . . . . . 20
8.6. Cushion. . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
8.7. Limitation of Liability. . . . . . . . . . . . . . . . . . . . 21
8.8. Remedies Cumulative. . . . . . . . . . . . . . . . . . . . . . 21
8.9. Assignment of Certain Representations, Warranties and
Indemnification Rights . . . . . . . . . . . . . . . . . . . . 21
ARTICLE IX
MISCELLANEOUS PROVISIONS . . . . . . . . . . 22
9.1. Amendment and Modification. . . . . . . . . . . . . . . . . . 22
9.2. Waiver of Compliance; Consents . . . . . . . . . . . . . . . . 22
9.3. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
9.4. Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . 24
9.5. Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . 24
9.6. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . 25
9.7. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . 25
9.8. Interpretation . . . . . . . . . . . . . . . . . . . . . . . . 25
9.9. Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . 25
STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT (this "Agreement"), dated April 19,
1998, by and between:
NEWS AMERICA INCORPORATED, a Delaware corporation ("Buyer"),
with an address at 1211 Avenue of the Americas, New York, New York 10036,
and
CABLE AND WIRELESS PLC, a company registered under the laws of
England under the number 238525 ("C&W"), with an address at 124 Theobalds
Road, London WC1X 8RX.
W I T N E S S E T H:
WHEREAS, (a) Navona Communications Corporation Ltd. (a direct
wholly owned subsidiary of C&W), a corporation organized under the laws of
Bermuda ("Navona"), owns (i) 10,055,739 shares of common stock, par value
USD$.01 per share ("PLD Common Stock"), of PLD Telekom Inc., a corporation
organized under the laws of Delaware ("PLD"), constituting as of April 16,
1998 approximately 30.17% of the presently issued and outstanding capital
stock of PLD (the "PLD Shares"), and (ii) 12,000 shares of common stock,
par value USD$1.00 per share, of PLD Holdings Ltd., a limited liability
company organized under the laws of Bermuda ("Holdings"), constituting 100%
of the issued and outstanding capital stock of Holdings (the "Holdings
Shares"), which is the owner of eleven percent (11%) of the outstanding
common equity interests in PeterStar Company Limited, a closed joint stock
company organized under the laws of the Russian Federation ("PeterStar");
and (b) C&W owns a warrant dated June 28, 1995, conferring on C&W the right
to purchase PLD Common Stock, a copy of which is attached hereto as Exhibit
A (the "PLD Warrant"; the PLD Warrant and the PLD Shares are collectively
referred to herein as the "Pre-Exchange PLD Interest") and
WHEREAS, C&W also owns 100 shares of common stock, par value 400
Netherlands Guilders per share, of CommStruct International Byelorussia
B.V., a closed limited liability company organized under the laws of The
Netherlands ("CIBBV"), constituting 100% of the issued and outstanding
capital stock of CIBBV (the "CIBBV Shares"); and
WHEREAS, C&W and PLD are agreeing (the "CIBBV Exchange
Agreement"), substantially simultaneously with the execution and delivery
of this Agreement, on the terms and conditions upon which C&W will exchange
the CIBBV Shares, together with certain indebtedness owed to C&W by CIBBV,
with PLD for 500,000 newly issued shares of PLD Common Stock (the "CIBBV
Exchange Shares"), which exchange will be completed prior to the
consummation of the transactions contemplated by this Agreement; and
WHEREAS, C&W desires to sell and transfer, or to cause the sale
and transfer, to Buyer, and Buyer desires to purchase, the Pre-Exchange PLD
Interest and the CIBBV Exchange Shares (collectively, the "PLD Interest")
and the Holdings Shares, as more specifically provided herein;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements hereinafter set forth, the parties, intending to
be legally bound, hereby agree as follows:
ARTICLE I
SALE OF STOCK; CONSIDERATION
1.1. Sale by C&W. Upon the terms and subject to the
satisfaction of the conditions contained in this Agreement and the delivery
to C&W of good title to the CIBBV Exchange Shares, C&W agrees to sell,
assign, transfer and deliver to Buyer the CIBBV Exchange Shares and the PLD
Warrant and to cause Navona to sell, assign, transfer and deliver the PLD
Shares and the Holdings Shares to Buyer, and Buyer agrees to purchase and
acquire, (a) all of the right, title and interest of C&W in and to the
CIBBV Exchange Shares and the PLD Warrant and (b) all of the right, title
and interest of Navona in and to the PLD Shares and the Holdings Shares.
1.2. Consideration for the Sale by C&W. (a) On the Closing
Date (as hereinafter defined) and upon the terms and subject to the
satisfaction of the conditions contained in this Agreement, in
consideration of the aforesaid sale, assignment, transfer and delivery of
the PLD Interest and the Holdings Shares, Buyer will pay, or cause to be
paid, to C&W or its written designee, by interbank transfer of immediately
available funds an amount equal to Eighty Million United States dollars
(USD$80,000,000) (the "Purchase Price").
ARTICLE II
THE CLOSING
2.1. Time and Place of Closing. Subject to the terms and
conditions of this Agreement, the consummation of the transaction
contemplated hereby (the "Closing") shall take place at the offices of
Skadden, Arps, Slate, Meagher & Flom LLP, 919 Third Avenue, New York, New
York 10022 on the third business day after Buyer shall have delivered to
C&W written notice that the conditions set forth in Section 6.2 hereof have
been satisfied (the "Closing Date") or at such other time and place as
shall be determined by mutual agreement of the parties.
2.2. Deliveries by C&W. At the Closing, C&W will deliver or
cause to be delivered the following to Buyer:
(a) Stock certificates representing all of the PLD Shares
and the Holdings Shares and the certificate or other instrument
representing the PLD Warrant, each duly endorsed in blank or accompanied by
duly executed instruments of transfer, together with any other documents
that are necessary to transfer to Buyer good and marketable title to the
PLD Shares, the PLD Warrant, the CIBBV Exchange Shares and the Holdings
Shares, as the case may be;
(b) the Officer's Certificate referred to in Section 6.2(f)
hereof;
(c) the Opinion of Counsel referred to in Section 6.2(g)
hereof; and
(d) such other documents, instruments and writings as are
required to be delivered by C&W at or prior to the Closing Date pursuant to
this Agreement or otherwise reasonably required in connection herewith.
2.3. Deliveries by Buyer. At the Closing, Buyer will deliver
the following to C&W:
(a) the Purchase Price by interbank transfer of immediately
available funds;
(b) the Officer's Certificate referred to in Section 6.3(c)
hereof;
(c) the Opinion of Counsel referred to in Section 6.3(d)
hereof; and
(d) such other documents, instruments and writings as are
required to be delivered by Buyer at or prior to the Closing Date pursuant
to this Agreement or otherwise reasonably required in connection herewith.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF C&W
C&W represents and warrants to Buyer as follows:
3.1. Organization. (a) C&W is a public limited company duly
organized and validly existing under the laws of England and has all
requisite power to enter into this Agreement and to dispose, or to cause
Navona to dispose, of the PLD Shares and the Holdings Shares in accordance
with this Agreement and to perform its obligations hereunder.
(b) Navona is a corporation duly organized and validly existing
under the laws of Bermuda and has all requisite power to dispose or cause
the disposition of the PLD Shares and the Holdings Shares in accordance
with this Agreement and to perform its obligations hereunder.
3.2. Authority Relative to this Agreement and the Ancillary
Agreements. C&W and Navona each has full corporate power and authority to
execute, deliver and perform its obligations under this Agreement and the
CIBBV Exchange Agreement and to perform its obligations hereunder and
thereunder. The execution and delivery of this Agreement and the CIBBV
Exchange Agreement and the performance of its obligations hereunder and
thereunder have been duly and validly authorized by C&W and Navona, and no
other corporate proceedings on the part of C&W or Navona are necessary to
authorize this Agreement or the performance of its obligations hereunder
and thereunder. This Agreement and the CIBBV Exchange Agreement have each
been duly and validly executed and delivered by C&W, and, assuming that
this Agreement and the CIBBV Exchange Agreement each constitutes a valid
and binding agreement of Buyer and each other party thereto, constitutes a
valid and binding agreement of C&W, enforceable against C&W in accordance
with its terms, except that such enforceability may be limited by
applicable bankruptcy, insolvency, moratorium or other similar laws
affecting or relating to enforcement of creditors' rights generally or
general principles of equity.
3.3. Title. C&W indirectly through Navona owns the Pre-Exchange
PLD Interest and the Holdings Shares and will, upon the completion of the
sale and exchange transactions under the CIBBV Exchange Agreement, own the
CIBBV Exchange Shares, in each case free and clear of all pledges, security
interests, liens, charges, encumbrances, claims, options or limitations
affecting its ability to vote such shares or to transfer such shares to
Buyer or to exercise any other rights appurtenant thereto. Except (a) for
the PLD Interest and the Holdings Shares that are the subject of this
Agreement and (b) such agreements, contracts, instruments, arrangements or
understandings to which PLD or any of its direct or indirect subsidiaries,
but not C&W or Navona, is a party, neither C&W nor any of its direct or
indirect subsidiaries owns any shares or other equity interests in, or is a
party to any agreement, contract, instrument, arrangement or understanding
enabling a party upon notice, exercise or conversion to acquire shares or
other equity interests in, PLD or Holdings. Except as set forth in
Schedule 3.3, Holdings does not own any material assets other than its
equity interest in PeterStar and does not have any material liabilities
(for purposes of this sentence, assets or liabilities individually or in
the aggregate exceeding US$500,000 shall be deemed "material"). At the
Closing, Buyer will acquire good title to the PLD Interest and the Holdings
Shares, free and clear of all pledges, security interests, liens, charges,
encumbrances, claims, options or limitations of any nature whatsoever. At
or prior to the Closing Date all agreements between Holdings on the one
part and any direct or indirect parent of Holdings on the other part shall
have been terminated without any residual liability on the part of Holdings
thereunder. Except for this Agreement and the CIBBV Exchange Agreement and
their respective obligations thereunder, neither C&W nor Navona has
entered into any subscription, option, warrant, call, right, agreement or
understanding for the sale, delivery, assignment or transfer by C&W or
Navona of the PLD Interest, the Holdings Shares or the interest held by
Holdings directly in PeterStar.
3.4. Consents and Approvals; No Violation.
(a) Except as set forth in Schedule 3.4, neither the
execution and delivery of this Agreement and the CIBBV Exchange Agreement
by C&W, nor the sale by C&W or Navona of the PLD Interest or the Holdings
Shares pursuant to this Agreement, will (i) conflict with or result in any
breach of any provision of the Articles of Incorporation or Bylaws, or
similar charter documents, of C&W, Navona or Holdings, (ii) other than as
may be required as a result of the identity of Buyer or any of Buyer's
successors or assigns, require any consent, approval, authorization or
permit of, or filing with or notification to, any governmental or
regulatory authority to be made or obtained by C&W, Navona or Holdings,
(iii) result in a default (or give rise to any right of termination,
cancellation or acceleration) under any of the terms, conditions or
provisions of any note, bond, mortgage, indenture, license, agreement or
other instrument or obligation to which C&W, Navona or Holdings or by which
C&W, Navona or Holdings or any of their respective assets (except that no
representation or warranty is made as to any note, bond, mortgage,
indenture, license, agreement or other instrument or obligation to which
PLD, PeterStar or Belcel, but not C&W, Navona or Holdings, is a party or
by which PLD, PeterStar or Belcel, but not C&W, Navona or Holdings, are
bound) may be bound, except for such defaults (or rights of termination,
cancellation or acceleration) as to which requisite waivers or consents
have been obtained, or (iv) violate any order, writ, injunction, decree,
statute, rule or regulation applicable to C&W, Navona or Holdings or any of
their respective assets (except that no representation or warranty is made
as to any order, writ, injunction, decree, statute, rule or regulation
applicable to PLD, PeterStar or Belcel, but not C&W, Navona or Holdings).
(b) Except as set forth in Schedule 3.4 and except for the
filings by Buyer and PLD required by Title II of the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended (the "HSR Act"), it is not
necessary for C&W or Navona to make any declaration, filing or registration
with, or to give notice to, or to receive the authorization, consent or
approval of, any governmental or regulatory body or authority for the
consummation by C&W and Navona of the transactions contemplated hereby.
3.5. Financial Statements; Undisclosed Liabilities; Certain Tax
Matters.
(a) C&W has previously furnished to Buyer copies of
Holdings' audited (i) balance sheets as of December 31, 1997 and (ii)
related audited statements of income and retained earnings and changes in
financial position of Holdings for the fiscal year then ended, together
with the report thereon of KPMG Audit plc, independent auditors (subject,
in the case of the final signature on such audit and report, to the
information set forth in Schedule 3.5). To the Knowledge of C&W (as the
term "Knowledge" is defined in Section 8.3 hereof), such financial reports
present fairly the financial information purported to be set forth therein
as of the dates, or for the periods, described therein, all in conformity
with the accounting principles described therein.
(b) Except as set forth in Schedule 3.5, to the Knowledge
of C&W, as of the date of the Holdings balance sheet referred to in Section
3.5(a)(i) hereof, Holdings has no material liability or obligation,
secured or unsecured (whether absolute, accrued, contingent or otherwise,
and whether due or to become due), of a nature required by generally
accepted accounting principles to be reflected in a corporate balance sheet
or disclosed in the notes thereto, which is not accrued or reserved against
in the financial reports referred to in Section 3.5(a) hereof or disclosed
in the notes thereto in accordance with generally accepted accounting
principles.
3.6. Absence of Certain Changes or Events. Except as set forth
in Schedule 3.6, since the date of the financial reports referred to in
Section 3.5(a) hereof, to the Knowledge of C&W there has not been:
(a) any material adverse change in the business, prospects,
operations, properties, assets, liabilities, competition, earnings, or
condition (financial or otherwise), of Holdings or any failure by Holdings
to pay its debts when due;
(b) any event or condition of any character which, either
individually or in the aggregate, might reasonably be expected to have a
material adverse effect on the business, prospects, operations, properties,
assets, liabilities, competition, earnings or condition (financial or
otherwise), of Holdings;
(c) any damage, destruction or loss (regardless of whether
covered by insurance) that might reasonably be expected to have a material
adverse effect on the business, prospects, operation, properties, assets,
liabilities, competition, earnings, or condition (financial or otherwise),
of Holdings;
(d) any declaration, setting aside or payment of any
dividend or other distribution (whether in cash, stock, property, or any
combination of the foregoing) with respect to the capital stock of Holdings
except as specifically provided for in this Agreement;
(e) any increase in the compensation paid, payable or to
become payable by Holdings to its officers, directors or employees (other
than increases for employees in the ordinary course of business and
consistent with past practice), any hiring of new officers, directors or
employees (other than hiring of new employees in the ordinary course of
business consistent with past practice) or any increase in any bonus,
insurance, pension or other employee benefit plan, payments or arrangement
(including loans) made to, for or with any officers, directors, or
employees (other than increases for employees in the ordinary course of
business and consistent with past practice or other increases pursuant to
written employee benefit plans);
(f) any entry into, material amendment of, or termination
of, any material agreement, material commitment or material transaction by
Holdings, including, without limitation, any (i) merger, consolidation,
share exchange, acquisition or disposition of assets or stock or any
financing transaction or capital expenditure, (ii) indenture, mortgage,
note, agreement or other instrument relating to the borrowing of money
(other than intercompany accounts), (iii) partnership or joint venture
agreement, (iv) material license agreement relating to intellectual
property (other than off-the-shelf software licenses), or (v) agreement to
amend its charter or other organizational documents or any other document,
contract, agreement, arrangement, undertaking or instrument relating to any
of the foregoing;
(g) any entry into, material change to the terms or
conditions of or termination of, any license, permit franchise,
governmental approval or decree pursuant to which Holdings provides
telephony, data transmission or other telecommunications services of any
kind or character;
(h) any notes or accounts receivable or portions of notes
or accounts receivable written off by Holdings as uncollectible, other than
in the ordinary course of business and consistent with past practice;
(i) any material obligation or material liability paid
(whether absolute, accrued, contingent or otherwise), or any lien or
encumbrance in connection therewith discharged, by Holdings, other than (i)
in the ordinary course of business and consistent with past practice, or
(ii) current liabilities shown on the financial reports referred to in
Section 3.5(a) hereof and current liabilities incurred since their date;
(j) any mortgage, pledge or security interest, lien or
encumbrance created in or with respect to any property or assets, real,
personal or mixed, tangible or intangible, of Holdings;
(k) except as specifically provided for in this Agreement,
any sale, assignment, transfer, lease, dividend, distribution or other
disposition of any property or assets by Holdings other than in the
ordinary course of business; or
(l) any agreement, understanding or undertaking to do any
of the foregoing by Holdings;
provided, that the representations and warranties set forth in this Section
3.6 with respect to the business, operations, properties, assets,
liabilities, competition, earnings, or condition (financial or otherwise)
of Holdings shall not be deemed to be representations or warranties as to
the business, operations, properties, assets, liabilities, competition,
earnings, or condition (financial or otherwise) of PLD or PeterStar and for
the avoidance of doubt, the occurrence of any of the matters referred to in
(a) through (l) above in relation to PeterStar shall not be a breach of the
representations and warranties relating to Holdings set forth in (a)
through (l) above.
3.7. Legal Proceedings, etc. Except as set forth in Schedule
3.7, to the Knowledge of C&W, there are no claims, actions, or proceedings
pending or investigation pending or threatened against or relating to
Holdings before any court, governmental or regulatory authority or body
acting in an adjudicative capacity. Except as set forth in Schedule 3.7,
to the knowledge of C&W, Holdings is not subject to any outstanding
judgment, rule, order, writ, injunction or decree of any court,
governmental or regulatory authority.
3.8. Fees and Commissions. Except as previously disclosed by
C&W to Buyer in writing, no broker, finder or other person is entitled to
any brokerage fees, commissions or finder's fees in connection with the
transaction contemplated hereby by reason of any action taken by C&W. C&W
hereby covenants that it will pay to Buyer or otherwise discharge, and will
indemnify and hold Buyer harmless from and against, any and all claims or
liabilities for all brokerage fees, commissions and finder's fees (other
than as described above) incurred by reason of any action taken by C&W.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to C&W as follows:
4.1. Organization. Buyer is a corporation duly organized,
validly existing and in good standing under the laws of the State of
Delaware. Buyer has heretofore delivered to C&W complete and correct
copies of its Certificate of Incorporation and By-Laws as currently in
effect.
4.2. Authority Relative to this Agreement and the Buyer
Ancillary Agreements. Buyer has full power and authority to execute,
deliver and perform all obligations under this Agreement, the Asset
Exchange Agreement referred to in Section 8.8 hereof and the Director
Nomination Agreement referred to in Section 6.2(e) hereof (collectively,
the "Buyer Ancillary Agreements") and to consummate the transactions
contemplated hereby and thereby. The execution and delivery of this
Agreement and the Buyer Ancillary Agreements and the performance of its
obligations hereunder and thereunder have been duly and validly authorized
by Buyer, and no other proceedings on the part of Buyer are necessary to
authorize this Agreement or the Buyer Ancillary Agreements or to perform
its obligations hereunder or thereunder. This Agreement and the Buyer
Ancillary Agreements (in the case of the Buyer Ancillary Agreements, in the
form delivered to C&W on the date hereof) have been duly and validly
executed and delivered by Buyer, and assuming that this Agreement and each
such Buyer Ancillary Agreement to which it is a party constitutes a valid
and binding agreement of C&W or the relevant party to the Buyer Ancillary
Agreements, constitutes a valid and binding agreement of Buyer, enforceable
against Buyer in accordance with its terms, except that such enforceability
may be limited by applicable bankruptcy, insolvency, moratorium or other
similar laws affecting or relating to enforcement of creditors' rights
generally or general principles of equity.
4.3. Consents and Approvals; No Violation. (a) Except as set
forth in Schedule 4.3, neither the execution and delivery of this Agreement
nor the Buyer Ancillary Agreements by Buyer nor the purchase by the Buyer
or its permitted designee or assignee as provided in Section 9.4 hereof of
the PLD Interest and the Holdings Shares pursuant to this Agreement, or the
performance of the Buyer Ancillary Agreements, will (i) conflict with or
result in any breach of any provision of the Certificate of Incorporation
or By-Laws of Buyer, (ii) require any consent, approval, authorization or
permit of, or filing with or notification to, any governmental or
regulatory authority, or (iii) result in a default (or give rise to any
right of termination, cancellation or acceleration) under any of the terms,
conditions or provisions of any note, bond, mortgage, indenture, agreement,
lease or other instrument or obligation to which Buyer or any of its
subsidiaries are a party or by which any of their respective assets may be
bound, except for such defaults (or rights of termination, cancellation or
acceleration) as to which requisite waivers or consents have been obtained.
(b) Except for the filings by Buyer or its permitted
designee or assignee as provided in Section 9.4 hereof and PLD required
by Title II of the HSR Act, no declaration, filing or registration with, or
notice to, or authorization, consent or approval of any governmental or
regulatory body or authority is necessary for the consummation by Buyer of
the transactions contemplated hereby.
4.4. Fees and Commissions. No broker, finder or other person is
entitled to any brokerage fees, commissions or finder's fees in connection
with the transaction contemplated hereby by reason of any action taken by
Buyer. Buyer hereby covenants that it will pay to C&W or otherwise
discharge, and will indemnify and hold C&W harmless from and against, any
and all claims or liabilities for all brokerage fees, commissions and
finder's fees incurred by reason of any action taken by Buyer.
4.5. Investment Intent. Buyer is purchasing the PLD Interest for
its own account and not with a view towards the public sale or distribution
thereof in violation of the Securities Act.
ARTICLE V
COVENANTS OF THE PARTIES
5.1. Conduct of Business of Holdings. Except as described in
Schedule 5.1, during the period from the date of this Agreement to the
Closing Date, C&W covenants that Holdings will conduct its business and
operations according to its ordinary and usual course of business
consistent with past practice. Without limiting the generality of the
foregoing, and, except as contemplated in this Agreement or as described in
Schedule 5.1, prior to the Closing Date, without the prior written consent
of Buyer, C&W will not permit Holdings to:
(a) (i) create, incur or assume any amount of indebtedness
for money borrowed, other than in the ordinary course of business, or (ii)
assume, guarantee, endorse or otherwise become liable or responsible
(whether directly, contingently or otherwise) for the obligations of any
other person except in the ordinary course of business; provided, Holdings
may endorse negotiable instruments in the ordinary course of business;
(b) declare, set aside or pay any dividend or other
distribution (whether in cash, stock or property or any combination
thereof) in respect of its capital stock, or redeem or otherwise acquire
any shares of its capital stock;
(c) enter into any agreement, commitment or transaction
(including without limitation any borrowing, capital expenditure or capital
financing), except agreements, commitments or transactions in the ordinary
course of business or as contemplated herein; or
(d) enter into any contract, agreement, commitment or
arrangement, whether written or oral, with respect to any of the
transactions set forth in the foregoing paragraphs (a) through (c).
5.2. Expenses. Whether or not the transactions contemplated
hereby are consummated, all costs and expenses incurred in connection with
this Agreement and the transactions contemplated hereby shall be borne by
the party incurring such costs and expenses.
5.3. Further Assurances. Subject to the terms and conditions
of this Agreement, each of the parties hereto will use all reasonable
efforts to take, or cause to be taken, all action, and to do, or cause to
be done, all things reasonably necessary, proper or advisable under
applicable laws and regulations to consummate and make effective the sale,
assignment, transfer and delivery by C&W or Navona to Buyer or PLD of the
PLD Interest and the Holdings Shares and the interests in PLD and PeterStar
represented thereby, pursuant to this Agreement. From time to time after
the date hereof, without further consideration, C&W and Navona will, at
their own expense, execute and deliver such documents to Buyer or PLD as
Buyer or PLD may reasonably request in order more effectively to vest in
Buyer or PLD, as the case may be, good title to the PLD Interest and the
Holdings Shares. From time to time after the date hereof, without further
consideration, Buyer will, at its own expense, execute and deliver such
documents to C&W or PLD as C&W or PLD may reasonably request in order more
effectively to consummate the sale, assignment, transfer and delivery of
the PLD Interest and the Holdings Shares pursuant to this Agreement.
5.4. Public Statements. The parties shall consult with each
other prior to issuing any public announcement, statement or other
disclosure with respect to this Agreement or the transactions contemplated
hereby and shall not issue any such public announcement, statement or other
disclosure prior to such consultation. Notwithstanding the foregoing, the
parties may make public announcements, statements or other disclosures with
respect to this Agreement and the transactions contemplated hereby without
such consultation to the extent and under the circumstances in which the
parties are legally compelled (by deposition, interrogatory, request for
documents, subpoena, civil investigative demand or similar process, or by
order of a court or tribunal of competent jurisdiction) to do so, or in
order to comply with applicable rules or requirements of any stock
exchange, government department or agency or other regulatory authority, or
as required by any securities law or regulation or other legal requirement,
in any such case in circumstances where such consultation would not be
practicable.
5.5. Consents and Approvals.
(a) C&W and Buyer shall (in the case of C&W, in relation to
the consents and approvals set forth in Schedule 3.4 and any other consents
and approvals required to be obtained by C&W and, in the case of Buyer, in
relation to the consents and approvals set forth in Schedule 4.3 and any
other consents and approvals required to be obtained by Buyer) (i)
promptly prepare and file all necessary documentation, (ii) effect all
necessary applications, notices, petitions and filings and execute all
agreements and documents, (iii) use all reasonable efforts to obtain all
necessary permits, consents, approvals and authorizations of all
governmental bodies (including, in the case of Buyer, Buyer's and PLD's
obligations to file with the United States Federal Trade Commission and the
United States Department of Justice any notifications required to be filed
under the HSR Act and the rules and regulations promulgated thereunder with
respect to the transactions contemplated hereby) and (iv) use all
reasonable efforts to obtain all necessary permits, consents, approvals and
authorizations necessary or advisable to consummate the transactions
contemplated by this Agreement or required by the terms of any note, bond,
mortgage, indenture, deed of trust, license, franchise, permit, concession,
contract, lease or other instrument to which, in the case of C&W, C&W,
Holdings or Navona is a party or by which any of them are bound or, in the
case of Buyer, Buyer or any of its subsidiaries are a party or by which
any of them is bound. Each of Buyer and C&W will provide reasonable
assistance to the other in order to obtain the consents and approvals
referred to above. Each of C&W and Buyer shall have the right to review,
and be consulted in advance to the extent practicable, as to all
characterizations of the information relating to the transactions
contemplated by this Agreement which appear in any filing made in
connection with the transactions contemplated hereby. The parties hereto
agree that they will consult with each other with respect to the obtaining
of all such necessary permits, consents, approvals and authorizations of
all third parties and governmental bodies.
(b) The parties hereto shall consult with each other prior
to proposing or entering into any stipulation or agreement with any foreign
or United States governmental authority or agency or any third party in
connection with any foreign or United States governmental consents and
approvals legally required for the consummation of the transactions
contemplated hereby and shall not propose or enter into any such
stipulation or agreement without the other party's prior written consent,
which consent shall not be unreasonably withheld.
5.6. Transfer of Complus Enterprises Holding S.A. On, or prior
to the Closing, C&W shall have taken all action necessary to ensure that
Holdings does not, directly or indirectly, own any shares in Complus
Enterprises Holding S.A. ("Complus"). Buyer acknowledges that substantially
simultaneously with the transfer of the shares in Complus held by Holdings
as contemplated by this Section 5.6, Holdings will (a) assign to the person
to which such shares in Complus are transferred (the "Complus Transferee")
all right title and interest Holdings has in the Share Sale and Purchase
Agreement dated December 14, 1994 between Complus Holding S.A. and Holdings
(the "December 1994 Agreement"), pursuant to which Holdings Purchased 688
shares in Complus; and (b) irrevocably undertake to exercise its power
under Clause 4.3 of the Settlement Agreement (the "Settlement Agreement")
dated May 30, 1997 between Complus, Complus Holding, S.A. and Holdings to
direct that any amounts payable by Complus Holding, S.A. in respect of any
indebtedness or other liabilities of or incurred by Complus shall be paid
to the Complus Transferee or such other person as the Complus Transferee
may direct. Notwithstanding the provisions of clauses (a) and (b) of the
immediately preceding sentence, C&W undertakes that such assignment and
undertaking will exclude the full benefit of (i) the tax indemnity set
forth in Section 9 of the December 1994 Agreement (to the extent that any
tax liability therein referred to is imposed on or otherwise becomes a
liability of Holdings) and (ii) the indemnity in favor of Holdings provided
in Section 4.3 of the Settlement Agreement.
5.7. HSR Act. Buyer will promptly and in any event within 5
Business Days (as defined herein) after the date hereof make such filings
as may be required to be made by it under the HSR Act in connection with
the transactions contemplated hereby.
5.8. Supplements to Schedules. C&W, on the one hand, and Buyer,
on the other hand, shall have the right from time to time prior to the
Closing to supplement or amend its Schedule with respect to any matter
hereafter arising which if existing or known at the date of this Agreement
would have been required to be set forth or described in such Schedule.
Any such supplemental or amended disclosure shall be deemed to have cured
any breach of any representation or warranty made in this Agreement for all
purposes of this Agreement, except that notwithstanding the immediately
preceding clause no such supplemental or amended disclosure shall be deemed
to have cured any such breach made in this Agreement and to have been
disclosed as of the date of this Agreement for purposes of determining
whether or not the conditions set forth in Article VI hereof have been
satisfied.
5.9. Completion of Ancillary Agreements. Each party will use
reasonable efforts to take or cause to be taken, all action, and do or
cause to be done all things reasonably necessary or advisable to perform
their respective obligations under, in the case of C&W, the CIBBV Exchange
Agreement and, in the case of Buyer, the Buyer Ancillary Agreements, each
in the form as executed on the date hereof.
ARTICLE VI
CLOSING CONDITIONS
6.1. Conditions to Each Party's Obligations to Effect the
Transactions Contemplated Hereby. The respective obligations of each party
to effect the transactions contemplated hereby shall be subject to the
fulfillment at or prior to the Closing Date of the following conditions:
(a) The waiting period under the HSR Act applicable to the
consummation of the transactions contemplated hereby shall have expired or
been terminated;
(b) No preliminary or permanent injunction or other order
or decree by any federal, state, local or foreign court which prevents the
consummation of the transactions contemplated hereby shall have been issued
and remain in effect (each party agreeing to use its reasonable best
efforts to have any such injunction, order or decree lifted) and no
statute, rule or regulation shall have been enacted by any federal, state,
local, or foreign government or governmental agency which prohibits the
consummation of the transactions contemplated hereby;
(c) The CIBBV Exchange Shares shall have been issued and
delivered to C&W by PLD in accordance with the terms of the CIBBV Exchange
Agreement; and
(d) All foreign and United States federal, state and local
government consents and approvals required for the consummation of the
transactions contemplated hereby (including, without limitation, the
consent of the Bermuda Monetary Authority) shall have become Final Orders
(a "Final Order" means a final order after all opportunities for rehearing
are exhausted (whether or not any appeal thereof is pending)) and shall not
be subject to terms and conditions.
6.2. Conditions to Obligations of Buyer. The obligation of
Buyer to effect the transactions contemplated by this Agreement shall be
subject to the fulfillment at or prior to the Closing Date of the following
additional conditions:
(a) There shall not have occurred and be continuing any
event or events, either individually or in the aggregate, which would have
a material and adverse effect on the property, business, operations,
prospects or condition (financial or otherwise) of PLD or PeterStar;
(b) C&W shall have performed and complied with in all
material respects the covenants and agreements contained in this Agreement
required to be performed and complied with by it at or prior to the Closing
Date, and the representations and warranties of C&W set forth in this
Agreement, giving effect to the amendment or supplement of any schedule
pursuant to Section 5.8 hereof, shall be true and correct in all material
respects as of the date of this Agreement and as of the Closing Date as
though made at and as of the Closing Date;
(c) Buyer shall have received stock certificates
representing all of the PLD Shares, the CIBBV Exchange Shares and the
Holdings Shares and the certificate or other instrument representing the
PLD Warrant, each duly endorsed in blank or accompanied by duly executed
instruments of transfer, together with any other documents that are
necessary to transfer to Buyer good and marketable title to the PLD Shares,
the CIBBV Exchange Shares, the PLD Warrant and the Holdings Shares, as the
case may be;
(d) The conditions to closing under the Asset Exchange
Agreement (as defined in Section 8.8 hereof) annexed hereto as Schedule 6.2
shall have been satisfied or waived by Buyer;
(e) Buyer and PLD shall have executed and delivered a
Director Nomination Agreement dated April 19, 1998, containing terms and
conditions substantially as set forth in the draft thereof previously
delivered by Buyer to C&W, and such agreement shall be in full force and
effect;
(f) Buyer shall have received a certificate from an
authorized officer of C&W, dated the Closing Date, to the effect that to
the officer's knowledge, the conditions set forth in Section 6.2 (b) have
been satisfied; and
(g) Buyer shall have received opinions from counsel to C&W,
dated the Closing Date and satisfactory in form and substance to Buyer and
its counsel,
(A) substantially to the effect that:
(i) C&W is a corporation duly organized and validly
existing under the laws of the jurisdiction of its organization and has the
corporate power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby; and the execution and
delivery of this Agreement and the consummation of the transactions
contemplated hereby have been duly authorized by requisite corporate action
taken on the part of C&W;
(ii) this Agreement has been executed and delivered by
C&W and is a valid and binding obligation of C&W, enforceable against it in
accordance with its terms, except (A) that such enforcement may be subject
to bankruptcy, insolvency, reorganization, moratorium or other similar laws
now or hereafter in effect relating to creditors' rights, and (B) that the
remedy of specific performance and injunctive and other forms of equitable
relief may be subject to certain equitable defenses and to the discretion
of the court before which any proceeding therefore may be brought;
(iii) C&W, by reason of delivery of certificates for
or other instruments representing the PLD Shares in the name of Buyer, will
cause Buyer to own such shares free and clear of any adverse claim (as
defined in Article 8 of the Uniform Commercial Code as in effect in the
State of New York) as of the Closing date; and
(B) in respect of Bermuda law, in relation to the Holdings
Shares, an opinion customary for Bermuda counsel to give in
relation to the legal title obtained by the person registered in
the share register of a company incorporated in Bermuda
Such opinions may expressly rely as to matters of fact upon
certificates furnished by C&W and appropriate officers and directors of
each of PLD, Holdings and PeterStar and by public officials.
(h) Buyer shall have received a copy of a compliance
certificate from the Registrar of Companies of Bermuda confirming that
Holdings is not in default of any filing or fees due to be made to the
Bermuda Government, dated as of a date within 5 Business Days prior to the
Closing Date.
6.3. Conditions to Obligations of C&W. The obligations of C&W
to effect the transaction contemplated by this Agreement shall be subject
to the fulfillment at or prior to the Closing Date of the following
additional conditions:
(a) C&W shall have received the Purchase Price;
(b) Buyer shall have performed and complied with in all
material respects the covenants and agreements contained in this Agreement
required to be performed and complied with by it at or prior to the Closing
Date, and the representations and warranties of Buyer set forth in this
Agreement, giving effect to the amendment or supplement of any schedule
pursuant to Section 5.8 hereof, shall be true and correct in all material
respects as of the date of this Agreement and as of the Closing Date as
though made at and as of the Closing Date;
(c) C&W shall have received a certificate from an
authorized officer of Buyer, dated the Closing Date, to the effect that to
the officer's knowledge, the conditions set forth in Section 6.3(b) have
been satisfied; and
(d) C&W shall have received an opinion from Skadden, Arps,
Slate, Meagher & Flom LLP, special counsel to Buyer, dated the Closing Date
and satisfactory in form and substance to C&W and its counsel,
substantially to the effect that:
(i) Buyer is a corporation organized and in good
standing under the laws of the State of Delaware and has the power and
authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby; and the execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby have
been duly authorized by requisite action taken on the part of Buyer; and
(ii) this Agreement has been executed and delivered by
Buyer and is a valid and binding obligation of Buyer, enforceable against
it in accordance with its terms, except (A) that such enforcement may be
subject to bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect relating to creditors' rights, and
(B) that the remedy of specific performance and injunctive and other forms
of equitable relief may be subject to certain equitable defenses and to the
discretion of the court before which any proceeding therefore may be
brought.
As to any matter contained in such opinion which involves the
laws of any jurisdiction other than the Federal laws of the United States
or the laws of the State of New York, such counsel may rely upon opinions
of counsel admitted in such other jurisdictions. Any opinions relied upon
by such counsel as aforesaid shall be delivered together with the opinion
of such counsel. Such opinion may expressly rely as to matters of fact
upon certificates furnished by Buyer and appropriate officers and directors
of Buyer and by public officials.
ARTICLE VII
TERMINATION AND ABANDONMENT
7.1. Termination.
(a) This Agreement may be terminated at any time prior to
the Closing Date, by mutual written consent of Buyer and C&W.
(b) This Agreement may be terminated by Buyer, on the one
hand, or C&W, on the other hand, if the transactions contemplated hereby
shall not have been consummated on or before June 30, 1998, provided, that
the right to terminate this Agreement pursuant to this Section 7.1(b) shall
not be available to any party whose failure to perform any of its covenants
or obligations under this Agreement has been the cause of or resulting in
the failure of the transactions contemplated by this Agreement to occur on
or prior to the aforesaid date.
(c) This Agreement may be terminated by either Buyer, on
the one hand, or C&W, on the other hand, if (i) any governmental or
regulatory body, the consent of which is a condition to the obligations of
C&W and Buyer to consummate the transactions contemplated hereby, shall
have determined not to grant its consent and all appeals of such
determination shall have been taken and have been unsuccessful, or (ii) any
court of competent jurisdiction shall have issued an order, judgment or
decree permanently restraining, enjoining or otherwise prohibiting the
transactions contemplated hereby and such order, judgment or decree shall
have become final and nonappealable.
(d) This Agreement may be terminated by Buyer, on the one
hand, or C&W, on the other hand, if there has been a material violation or
breach of any agreement, representation or warranty contained in this
Agreement which violation or breach has not been waived by the non-
breaching party (it being agreed that the failure of Buyer to comply with
its undertaking contained in Section 5.7 hereof shall be deemed a material
breach of this Agreement).
7.2. Procedure and Effect of Termination. In the event of
termination of this Agreement and abandonment of the transactions
contemplated hereby by either or both of the parties pursuant to Section
7.1, written notice thereof shall forthwith be given by the terminating
party to the other party and this Agreement shall terminate and the
transactions contemplated hereby shall be abandoned, without further action
by any of the parties hereto without prejudice to any claims of a party to
this Agreement arising prior to the date of such termination in respect of
any breach of any representation, warranty or agreement contained in this
Agreement and provided that (a) the provisions of Sections 5.4 and Article
IX (except for section 9.4) hereof shall survive such termination, and (b)
that regardless of such termination the provisions of Article VIII hereof
shall continue with respect to any such claims. If this Agreement is
terminated as provided herein all filings, applications and other
submissions made pursuant to this Agreement, to the extent practicable,
shall be withdrawn from the agency or other person to which they were made.
ARTICLE VIII
SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION
8.1. Survival of Representations. The representations and
warranties set forth in Articles III and IV of this Agreement (including in
the schedules delivered pursuant thereto) shall survive the Closing until
one (1) year after the Closing.
8.2. Limitations on C&W Representations and Warranties;
Investigation. C&W has not made in this agreement or otherwise, and
nothing in this Agreement shall be construed to be, a representation or
warranty of any nature in relation to PLD, any of its subsidiaries or
affiliates (including PeterStar), or Belcel, or the past, current or future
property, business, operations, prospect or condition (financial or
otherwise) of PLD, PeterStar or Belcel and Buyer confirms that it has not
entered into this Agreement or performed its obligations under this
Agreement in reliance on any such representation or warranty by C&W.
8.3. C&W's Indemnification of Buyer. Subject to the conditions
of this Article VIII, C&W hereby agrees that it shall indemnify, defend and
hold harmless Buyer and any parent, subsidiary and affiliate of Buyer
(collectively, the "Buyer Group") from and against all demands, claims,
actions or causes of action, assessments, losses, damages, liabilities,
costs and expenses, including, without limitation, interest, penalties and
reasonable attorneys' fees and expenses (collectively, "Damages"), asserted
against, resulting to, imposed upon or incurred by any of the Buyer Group,
directly or indirectly, arising out of or resulting from a breach of any
representation, warranty or agreement of C&W contained in or made pursuant
to this Agreement or any facts or circumstances constituting such a breach
(collectively, "Buyer's Indemnifiable Claims"); provided, however, that the
indemnification obligation of C&W with respect to any breach of any of the
representations or warranties made by C&W in this Agreement shall arise
only in the event that C&W had knowledge of such breach on or before the
Closing. For purposes of this Agreement, "Knowledge" of C&W shall mean the
knowledge of Roger Mortimer, Joseph Lyon and John Macpherson (collectively,
the "Designated Persons"). C&W represents and warrants that the Designated
Persons are the only current management personnel of C&W or Holdings who
have substantial executive, management, or financial responsibilities for
Holdings who would be reasonably likely to be aware of facts or
circumstances that could cause a representation or warranty made by C&W in
this Agreement to be false in any material respect.
8.4. Buyer's Indemnification of C&W. Subject to the conditions
of this Article VIII, Buyer hereby agrees that it shall indemnify, defend
and hold harmless C&W and any parent, subsidiary and affiliate of C&W
(collectively, the "C&W Group") from and against all Damages asserted
against, resulting to, imposed upon or incurred by any of the C&W Group,
directly or indirectly, arising out of or resulting from a breach of any
representation, warranty or agreement of Buyer contained in or made
pursuant to this Agreement or any facts or circumstances constituting such
a breach ("C&W Indemnifiable Claims"; C&W's Indemnifiable Claims and
Buyer's Indemnifiable Claims are collectively referred to herein as the
"Indemnifiable Claims"); provided, however, that the indemnification
obligation of Buyer with respect to any breach in any of the
representations or warranties made by Buyer in this Agreement shall arise
only in the event that Buyer had knowledge of such breach on or before the
Closing.
8.5. Conditions of Indemnification. The obligations and
liabilities of C&W under Section 8.3 or Buyer under Section 8.4,
respectively, with respect to Indemnifiable Claims resulting from the
assertion of liability by third parties shall be subject to the following
terms and conditions:
(a) The member of the C&W Group or the Buyer Group, as the
case may be, asserting the existence of an Indemnifiable Claim (the
"Indemnified Party") will give notice of any such Indemnifiable Claim to
the party from whom Indemnification is sought (the "Indemnifying Party"),
and the Indemnifying Party shall undertake the defense thereof by
representation of their choosing, and will consult with the Indemnified
Party concerning such defense during the course thereof.
(b) In the event that the Indemnifying Party within a
reasonable time after notice of any Indemnifiable Claim, fails to defend,
the Indemnified Party against which such Indemnifiable Claim has been
asserted will (upon further notice to the Indemnifying Party) have the
right to undertake the defense, compromise or settlement of such
Indemnifiable Claim on behalf of and for the account and risk of the
Indemnifying Party.
(c) Anything in this Section 8.5 to the contrary
notwithstanding, (i) if there is a reasonable probability that an
Indemnifiable Claim may materially and adversely affect the Indemnified
Party other than as a result of money damages or other money payments (for
example, as a result of injunctive or other equitable relief), the
Indemnified Party shall have the right to defend, compromise or settle such
Indemnifiable Claim provided, that the Indemnifying Party shall not be
bound by any determination, compromise or settlement of any such
Indemnifiable Claim without its consent, which shall not unreasonably be
withheld, and (ii) the Indemnifying Party shall not, without the
Indemnified Party's written consent, settle or compromise any Indemnifiable
Claim or consent to entry of any judgment in respect thereof unless (A) the
Indemnifying Party delivers to the Indemnified Party in advance its written
agreement satisfactory to the Indemnified Party which provides that amounts
paid and incurred or to be incurred by the Indemnified Party in connection
with such Indemnifiable Claim shall be repaid promptly by the Indemnifying
Party to the Indemnified Party (subject to the limitations of this Article
VIII), and (B) such settlement, compromise or consent includes as an
unconditional term thereof the giving by the claimant or the plaintiff to
the Indemnified Party a release from all liability in respect to such
Indemnifiable Claim.
8.6. Cushion. The provisions for indemnity contained in Section
8.3 and Section 8.4 hereof shall only be effective with respect to an
Indemnifiable Claim (or, if more than one Indemnifiable Claim is asserted,
with respect to all Indemnifiable Claims) to the extent the amount (or
aggregate amount, in the case of more than one Indemnifiable Claim) of
damages sustained in connection therewith exceeds Three Hundred Thousand
dollars (USD$300,000), but to the extent that the amount or amounts of
damages in respect of Indemnifiable Claims exceeds $300,000, the indemnity
provisions hereunder shall apply to all such damages, without regard to the
$300,000 level.
8.7. Limitation of Liability. Anything in this Agreement to the
contrary notwithstanding, the liability of an Indemnifying Party to
indemnify an Indemnified Party against any damages sustained in connection
with any Indemnifiable Claim shall be limited to Indemnifiable Claims as to
which written notice shall have been given to the Indemnifying Party on or
prior to the earlier of the first anniversary date of the Closing Date or
public release of audited financials of PLD or PeterStar, as the case may
be, covering the fiscal year ended December 31, 1998, whether or not the
Indemnified Party has actually settled or incurred any expense with respect
to such Damages. Furthermore, anything in this Agreement to the contrary
notwithstanding, (a) the liability of C&W pursuant to this Article VIII for
all claims for indemnification or damages arising under this Agreement,
taken together with any liability that C&W may have for indemnification or
damages arising under the CIBBV Exchange Agreement, shall be limited to the
Purchase Price received by C&W and (b) the liability of Buyer pursuant to
this Article VIII shall be limited to twenty-five percent (25%) of the
Purchase Price.
8.8. Remedies Cumulative. The remedies provided herein shall be
cumulative and shall not preclude the assertion by Buyer of any other
rights or the seeking of any other remedies against the other party, as the
case may be, provided, however, that all claims for Damages under this
Agreement shall be governed by the provisions of this Article VIII, and
provided further, that the cushion provided in Section 8.6 hereof and the
limitation of liability provided in Section 8.7 hereof shall also apply to
all other liabilities arising out of the transactions contemplated hereby
but grounded in a legal or equitable theory other than a breach of
representation, warranty or agreement set forth in this Agreement.
8.9. Assignment of Certain Representations, Warranties and
Indemnification Rights. C&W hereby (a) acknowledges that pursuant to an
Asset Exchange Agreement, by and between Buyer and PLD (the "Asset Exchange
Agreement"), and subject to the sale, assignment, transfer and delivery of
the Holdings Shares from C&W pursuant to this Agreement, Buyer will,
substantially simultaneously with the purchase of the Holdings Shares as
described in Section 1.1 hereof, sell, assign, transfer and deliver to PLD,
and PLD will acquire from Buyer, all of the right, title and interest
acquired by Buyer hereunder in and to the Holdings Shares and (b) agrees
that its representations, warranties and agreements made in this Agreement
with respect to the Holdings Shares, and Buyer's indemnification rights
under this Article VIII, may be assigned by Buyer to the benefit of PLD,
and that PLD shall have the right to rely upon such representations,
warranties and agreements, and to enforce such indemnification rights
without any recourse to Buyer, as fully as if it were a party to this
Agreement.
ARTICLE IX
MISCELLANEOUS PROVISIONS
9.1. Amendment and Modification. Subject to applicable law,
this Agreement may be amended, modified or supplemented only by written
agreement signed by all of the parties hereto.
9.2. Waiver of Compliance; Consents. Except as otherwise
provided in this Agreement, any failure of any of the parties to comply
with any obligation, covenant, agreement or condition herein may be waived
by the party entitled to the benefits thereof only by a written instrument
signed by the party granting such waiver, but such waiver shall not operate
as a waiver of, or estoppel with respect to, any subsequent or other
failure.
9.3. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed effectively given upon personal
delivery to the party to be notified, on the next Business Day after
delivery to an internationally recognized overnight courier service, upon
confirmation of receipt of a facsimile transmission, or five days after
deposit with the United States Post Office or the Royal Mail, by registered
or certified mail (return receipt requested), postage prepaid, to the
parties at the following addresses (or at such other address for a party as
shall be specified by like notice; provided that notices of a change of
address shall be effective only upon receipt thereof):
(a) If to C&W, to:
Cable and Wireless plc
124 Theobalds Road
London WC1X 8RX
United Kingdom
Facsimile: (44) 171 315 5051
Attention: Company Secretary
(with a copy to:
Cleary, Gottlieb, Steen & Hamilton
Level 5
City Place House
55 Basinghall Street
London EC2V 5EH
United Kingdom
Facsimile: (44) 171 600 1698
Attention: Andrew C. Shutter
(b) If to Buyer, to:
News America Incorporated
1211 Avenue of the Americas
New York, New York 10036
Facsimile: (212) 768-2029
Attention: General Counsel
(with a copy to:
Skadden, Arps, Slate, Meagher & Flom LLP
919 Third Avenue
New York, New York 10022
Facsimile: (212) 735-2000
Attention: Alan G. Straus, Esq.)
(c) In the case of notices given to C&W or Buyer, a copy
thereof shall simultaneously be given to PLD at:
PLD Telekom Inc.
680 Fifth Avenue
24th Floor
New York, New York 10019
Facsimile: (212) 262-8870
Attention: James Hatt
9.4. Assignment. This Agreement and all of the provisions
hereof shall be binding upon and inure to the benefit of the parties hereto
and their respective assigns permitted in accordance with this Section 9.4,
but neither this Agreement nor any of the rights, interests or obligations
hereunder shall be assigned by any party hereto, including by operation of
law without the prior written consent of the other party, nor is this
Agreement intended to confer upon any other person except the parties
hereto any rights or remedies hereunder; provided, however, that (a) Buyer
will have the right, at any time prior to the sixth business day following
the date hereof, to designate in writing, in accordance with applicable
law, one of its directly or indirectly wholly owned subsidiaries, or a
limited liability company or other organization all of the membership
interests in which are owned, directly or indirectly, by Buyer, to
purchase, in whole or in part, the PLD Interest and the Holdings Shares
on the terms set out in this Agreement, and Buyer shall remain jointly and
severally liable with its designee under this Agreement following such
designation; provided, however, that no such designation shall be permitted
if as a result thereof any consent, approval, authorization or permit of,
or filing with or notification to, any governmental or regulatory
authority, other than as specified on Schedule 4.3 hereto, as in effect on
the date hereof, would be required, and (b) certain representations,
warranties and agreements, and indemnification rights of Buyer be assigned
to PLD as set forth in Section 8.9 hereof.
9.5. Confidentiality. Each of the Parties hereto will hold, and
will use its reasonable, good faith efforts to cause its respective
shareholders, partners, members, directors, officers, employees,
accountants, counsel, consultants, agents and financial or other advisors
(collectively "Agents") to hold, in confidence all information (whether
oral or written), including this Agreement and the documents contemplated
herein, concerning the transactions contemplated by this Agreement
furnished to such Party by or on behalf of any other Party in connection
with such transactions, unless legally compelled (by deposition,
interrogatory, request for documents, subpoena, civil investigative demand
or similar process, or by order of a court or tribunal of competent
jurisdiction), or in order to comply with applicable rules or requirements
of any stock exchange, government department or agency or other regulatory
authority, or if required by any securities law or regulation or other
legal requirement to disclose any such information or documents, and except
to the extent that such information or documents can be shown to have been
(a) previously known on a nonconfidential basis by such Party, (b) in the
public domain through no fault of such Party or (c) acquired by such Party
on a nonconfidential basis from sources not known by such Party to be bound
by any obligation of confidentiality in relation thereto. Notwithstanding
the foregoing provisions of this Section 9.5, each Party may disclose such
information to its Agents in connection with the transactions contemplated
by this Agreement or any of the other ancillary Agreements so long as such
Agents are informed by such Party of the confidential nature of such
information and are required by such Party to treat such information
confidentially, and to certain governmental agencies in connection with the
procurement of the governmental authorizations contemplated by this
Agreement. The obligation of each Party to hold any such information in
confidence shall be satisfied if such Party exercises the same care with
respect to such information as it would take to preserve the
confidentiality of its own similar information. If this Agreement is
terminated, each Party will, and will use its reasonable, good faith
efforts to cause its respective Agents to, destroy or deliver to the other
Party, upon request, all documents and other materials, and all copies
thereof, obtained by such Party or on its behalf from the other Party
hereto in connection with this Agreement that are subject to such
confidence.
9.6. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York (regardless
of the laws that might otherwise govern under applicable New York
principles of conflicts of law) as to all matters, including but not
limited to matters of validity, construction, effect, performance and
remedies.
9.7. Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
9.8. Interpretation. The article and section headings contained
in this Agreement are solely for the purpose of reference, are not part of
the agreement of the parties and shall not in any way affect the meaning or
interpretation of this Agreement. As used in this Agreement, (a) the term
"person" shall mean and include an individual, a partnership, a joint
venture, a corporation, a trust, an unincorporated organization and a
governmental entity or any department or agency thereof, (b) the term
"subsidiary" when used in reference to any other person shall mean any
corporation of which outstanding securities having ordinary voting power to
elect a majority of the Board of Directors of such corporation are owned
directly or indirectly by such other person, (c) the terms "affiliate" and
"parent" shall have the meanings set forth in Rule 12b-2 of the Exchange
Act, (d) the term "Business Day" shall mean any day other than a Saturday,
Sunday or other day on which banks in the State of New York are authorized
or required to be closed and (e) PLD shall not be deemed to be a subsidiary
of C&W.
9.9. Entire Agreement. This Agreement, including the documents,
schedules and certificates referred to herein, embody the entire agreement
and understanding of the parties hereto in respect of the transactions
contemplated by this Agreement. There are no restrictions, promises,
representations, warranties, covenants or undertakings, other than those
expressly set forth or referred to herein or therein. This Agreement
supersedes all prior agreements and understandings between the parties with
respect to such transactions.
IN WITNESS WHEREOF, C&W and Buyer have caused this agreement to
be signed by their respective duly authorized officers as of the date first
above written.
NEWS AMERICA INCORPORATED
By: /s/ JOHN P. NALLEN
------------------------------
Name: JOHN P. NALLEN
Title: SENIOR VICE PRESIDENT
CABLE AND WIRELESS PLC
By: /s/ R. F. MORTIMER
------------------------------
Name: R. F. MORTIMER
Title: DIRECTOR, GLOBAL BUSINESS
Exhibit 6.2 Certain Conditions to Closing under the Asset Exchange
Agreement
[Note: Capitalized terms used but not defined in this Schedule 6.2 have the
respective meanings given in the Asset Exchange Agreement.]
a. There shall not have occurred and be continuing any event or
events, either individually or in the aggregate, which would
have a material and adverse effect on the property,
business, operations, prospects or condition (financial or
otherwise) of PLD;
b. PLD shall have performed and complied with in all material
respects the covenants and agreements contained in the Asset
Exchange Agreement required to be performed and complied
with by it at or prior to the Closing Date thereunder, and
the representations and warranties of PLD set forth in the
Asset Exchange Agreement shall be true and correct in all
material respects as of the date of the Asset Exchange
Agreement and as of the Closing Date thereunder as though
made at and as of the Closing Date, and Venture shall have
received a certificate to that effect signed by authorized
officers of PLD;
c. The common stock of PLD shall be quoted on The Nasdaq Stock
Market, and no action shall have been taken or shall be
pending or threatened in respect of the delisting of the
common stock of PLD from eligibility for such quotation;
d. If required by the rules of The National Association of
Securities Dealers, Inc. in respect of the issuance of the
New PLD Shares, the stockholders of PLD shall have duly
approved the issuance of such shares under the CIBBV
Exchange Agreement and the C&W Stock Purchase Agreement,
which approval shall not have been rescinded and shall be in
full force and effect;
e. PLD shall have received the consent of its bondholders
pursuant to the Indentures to operate in Belarus;
f. Venture shall have received a certificate from an authorized
officer of PLD, dated the Closing Date, to the effect that
to the officer's knowledge, the conditions set forth in the
foregoing paragraphs a. and b. have been satisfied; and
g. Venture shall have received an opinion from _________,
counsel to PLD, dated the Closing Date and satisfactory in
form and substance to Venture and its counsel, substantially
to the effect that:
(1) PLD is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware
and has the corporate power and authority to execute and deliver the
Asset Exchange Agreement and to consummate the transactions
contemplated hereby; and the execution and delivery of the Asset
Exchange Agreement and the consummation of the transactions
contemplated hereby have been duly authorized by requisite corporate
action taken on the part of PLD;
(2) the Asset Exchange Agreement has been executed and
delivered by PLD and is a valid and binding obligation of the PLD
enforceable against it in accordance with its terms, except (A) that
such enforcement may be subject to bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in
effect relating to creditors' rights, and (B) that the remedy of
specific performance and injunctive and other forms of equitable
relief may be subject to certain equitable defenses and to the
discretion of the court before which any proceeding therefore may be
brought; and
(3) the issuance and sale of New PLD Shares to Venture
pursuant to the Asset Exchange Agreement are not required to be
registered under the Securities Act.
Exhibit 2
STOCK PURCHASE AGREEMENT
between
PLD TELEKOM INC.
and
CABLE AND WIRELESS PLC
Dated April 19, 1998
TABLE OF CONTENTS
Page
ARTICLE I
SALE OF STOCK; CONSIDERATION
1.1. Sale by C&W . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.2. Consideration for the Sale by C&W. . . . . . . . . . . . . . . . 2
ARTICLE II
THE CLOSING
2.1. Time and Place of Closing . . . . . . . . . . . . . . . . . . . . 2
2.2. Deliveries by C&W . . . . . . . . . . . . . . . . . . . . . . . . 3
2.3. Deliveries by Buyer . . . . . . . . . . . . . . . . . . . . . . . 3
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF C&W
3.1. Organization . . . . . . . . . . . . . . . . . . . . . . . . . . 3
3.2. Authority Relative to this Agreement . . . . . . . . . . . . . . 4
3.3. Title. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
3.4. Consents and Approvals; No Violation . . . . . . . . . . . . . . 5
3.5. Financial Statements; Undisclosed Liabilities . . . . . . . . . . 5
3.6. Fees and Commissions. . . . . . . . . . . . . . . . . . . . . . . 5
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER
4.1. Organization . . . . . . . . . . . . . . . . . . . . . . . . . . 6
4.2. Authority Relative to this Agreement . . . . . . . . . . . . . . 6
4.4. Consents and Approvals; No Violation; Receipt of Information . . 6
4.5. Fees and Commissions. . . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE V
COVENANTS OF THE PARTIES
5.1. Conduct of Business of CIBBV. . . . . . . . . . . . . . . . . . . 7
5.2. Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
5.3. Further Assurances . . . . . . . . . . . . . . . . . . . . . . . 8
5.4. Public Statements . . . . . . . . . . . . . . . . . . . . . . . . 8
5.5. Consents and Approvals. . . . . . . . . . . . . . . . . . . . . . 9
5.7. Supplements to Schedules. . . . . . . . . . . . . . . . . . . . . 10
5.8. Hart-Scott-Rodino. . . . . . . . . . . . . . . . . . . . . . . . 10
5.9. Termination of Intercompany Agreements; Settlement of
Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . 10
5.10. Maintenance of Guarantee . . . . . . . . . . . . . . . . . . . . 11
5.11. Secondment . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
ARTICLE VI
CLOSING CONDITIONS
6.1. Conditions to Each Party's Obligations to Effect the
Transactions Contemplated Hereby. . . . . . . . . . . . . . . 11
6.2. Conditions to Obligations of Buyer . . . . . . . . . . . . . . . 12
6.3. Conditions to Obligations of C&W . . . . . . . . . . . . . . . . 12
ARTICLE VII
TERMINATION AND ABANDONMENT
7.1. Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
7.2. Procedure and Effect of Termination . . . . . . . . . . . . . . . 14
ARTICLE VIII
SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION
8.1. Survival of Representations . . . . . . . . . . . . . . . . . . . 14
8.2. C&W's Indemnification of Buyer . . . . . . . . . . . . . . . . . 14
8.3. Buyer's Indemnification of C&W . . . . . . . . . . . . . . . . . 15
8.4. Conditions of Indemnification. . . . . . . . . . . . . . . . . . 15
8.5. Cushion. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
8.6. Limitation of Liability. . . . . . . . . . . . . . . . . . . . . 16
8.7. Remedies Cumulative. . . . . . . . . . . . . . . . . . . . . . . 17
ARTICLE IX
MISCELLANEOUS PROVISIONS
9.1. Amendment and Modification. . . . . . . . . . . . . . . . . . . 17
9.2. Waiver of Compliance; Consents . . . . . . . . . . . . . . . . . 17
9.3. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
9.4. Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
9.5. Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . 19
9.6. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . 20
9.7. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . 20
9.8. Interpretation . . . . . . . . . . . . . . . . . . . . . . . . . 20
9.9. Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . 20
STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT (this "Agreement"), dated April 19,
1998, by and between:
PLD TELEKOM INC., a company incorporated under the laws of the
State of Delaware ("Buyer"), with an address at 680 Fifth Avenue, 24th
Floor, New York, New York 10019, and
CABLE AND WIRELESS PLC, a company registered under the laws of
England under the number 238525 ("C&W"), with an address at 124 Theobalds
Road, London WC1X 8RX.
W I T N E S S E T H:
WHEREAS, C&W owns directly 100 shares of common stock, par value
NLG 400 per share, of CommStruct International Byelorussia BV, a company
organized under the laws of The Netherlands ("CIBBV"), constituting 100% of
the issued and outstanding capital stock of CIBBV (the "CIBBV Shares"),
which is the owner of (i) fifty percent (50%) of the outstanding common
equity interests (the "Belcel Shares") in Belarus-Netherlands Belcel Joint
Venture ("Belcel") and (ii) one hundred percent (100%) of the outstanding
common equity interests (the "Baltic Operations Shares") in Baltic Opera-
tions Ltd. - Latvia ("Baltic Operations", and together with CIBBV and
Belcel, the "CIBBV Group"); and
WHEREAS, C&W desires to sell and transfer, or to cause the sale
and transfer, to Buyer, and Buyer desires to purchase, the CIBBV Shares, as
more specifically provided herein;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements hereinafter set forth, the parties, intending to
be legally bound, hereby agree as follows:
ARTICLE I
SALE OF STOCK; CONSIDERATION
1.1. Sale by C&W. Upon the terms and subject to the satisfac-
tion of the conditions contained in this Agreement, C&W agrees to sell,
assign, transfer and deliver to Buyer, and Buyer agrees to purchase and
acquire, all of the right, title and interest of C&W in and to the CIBBV
Shares. In addition, C&W will assign to Buyer or its designee the benefit
of the Loan Agreement, dated November 28, 1995, between C&W and CIBBV, as
amended (the "Loan Agreement").
1.2. Consideration for the Sale by C&W. On the Closing Date (as
hereinafter defined) and upon the terms and subject to the satisfaction of
the conditions contained in this Agreement, Buyer will issue and deliver to
C&W an aggregate of 500,000 newly-issued, fully paid and non-assessable
shares of Common Stock (the "Buyer Shares"), par value $0.01 per share, of
Buyer, registered in the name of C&W or its designee or nominee, allocated
as follows :
(a) an aggregate of 200,000 shares of Common Stock of Buyer
in consideration of the aforesaid sale, assignment, transfer and delivery
of the CIBBV Shares
(b) an aggregate of 300,000 shares of Common Stock of Buyer
in consideration of the aforesaid assignment of the Loan Agreement.
ARTICLE II
THE CLOSING
2.1. Time and Place of Closing. Subject to the terms and
conditions of this Agreement, the consummation of the transaction contem-
plated hereby (the "Closing") shall take place at the offices of Skadden,
Arps, Slate, Meagher & Flom LLP, 919 Third Avenue, New York, New York
10022-3897 on the third Business Day (as defined herein) after Buyer shall
have delivered to C&W written notice that the conditions set forth in
Section 6.2 hereof have been satisfied (the "Closing Date") or at such
other time and place as shall be determined by mutual agreement of the
parties.
2.2. Deliveries by C&W. At the Closing, C&W will deliver or
cause to be delivered the following to Buyer:
(a) duly certified evidence, acceptable to Buyer, of one or
more entries in the share registry of CIBBV evidencing the transfer of
title to the CIBBV Shares to Buyer, together with any other documents that
are necessary to transfer to Buyer good and marketable title to the CIBBV
Shares;
(b) duly executed documentation, in form and substance
reasonably acceptable to Buyer, evidencing the assignment of the benefit of
the Loan Agreement to Buyer or its designee;
(c) the Officer's Certificate referred to in Section 6.2(e)
hereof; and
(d) such other documents, instruments and writings as are
reasonably required to be delivered by C&W at or prior to the Closing Date
pursuant to this Agreement or otherwise reasonably required in connection
herewith.
2.3. Deliveries by Buyer. At the Closing, Buyer will deliver
the following to C&W:
(a) one or more stock certificates, registered in the name
of C&W or its nominee or designee, representing the Buyer Shares;
(b) the Officer's Certificate referred to in Section 6.3(c)
hereof; and
(c) such other documents, instruments and writings as are
reasonably required to be delivered by Buyer at or prior to the Closing
Date pursuant to this Agreement or otherwise reasonably required in
connection herewith.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF C&W
C&W represents and warrants to Buyer as follows:
3.1. Organization.
(a) C&W is a public limited company duly organized and
validly existing under the laws of England and has all requisite power to
enter into this Agreement and to dispose of the CIBBV Shares in accordance
with this Agreement and to perform the transactions contemplated hereby.
(b) CIBBV is a company duly organized and validly existing
under the laws of The Netherlands. C&W has heretofore delivered to Buyer
complete and correct copies of the organizational documents of CIBBV as
currently in effect.
3.2. Authority Relative to this Agreement. C&W has full
corporate power and authority to execute, deliver and perform its
obligations under this Agreement and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly and
validly authorized by C&W, and no other corporate proceedings on the part
of C&W are necessary to authorize this Agreement or to consummate the
transactions contemplated hereby. This Agreement has been duly and validly
executed and delivered by C&W, and assuming that this Agreement constitutes
a valid and binding agreement of Buyer, constitutes a valid and binding
agreement of C&W, enforceable against C&W in accordance with its terms,
except that such enforceability may be limited by applicable bankruptcy,
insolvency, moratorium or other similar laws affecting or relating to
enforcement of creditors' rights generally or general principles of equity.
3.3. Title.
(a) C&W directly owns the CIBBV Shares that are the subject
of this Agreement free and clear of all pledges, security interests, liens,
charges, encumbrances, claims, options or limitations affecting its ability
to vote such shares or to transfer such shares to Buyer or to exercise any
other rights appurtenant thereto. The CIBBV Shares that are the subject of
this Agreement are the only shares or other equity interests in, or
agreements, contracts, instruments, arrangements or understandings enabling
a party upon exercise or conversion to acquire shares or other equity
interests in, CIBBV. At the Closing, Buyer will acquire good title to the
CIBBV Shares, free and clear of all pledges, security interests, liens,
charges, encumbrances, claims, options or limitations of any nature
whatsoever. There is no subscription, option, warrant, call, right,
agreement or understanding for the sale, delivery, assignment or transfer
by C&W of the CIBBV Shares.
(b) Subject, in the case of the Belcel Shares, to the
provisions of the charter of Belcel, CIBBV owns the Belcel Shares and the
Baltic Operations Shares free and clear of all pledges, security interests,
liens, charges, encumbrances, claims, options or limitations affecting its
ability to vote such shares or to exercise any other rights appurtenant
thereto.
3.4. Consents and Approvals; No Violation.
(a) Except as set forth in Schedule 3.4, neither the
execution and delivery of this Agreement by C&W, nor the sale by C&W of the
CIBBV Shares pursuant to this Agreement, will (i) conflict with or result
in any breach of any provision of the Articles of Incorporation or Bylaws,
or similar charter documents, of C&W or Belcel or (ii) require any consent,
approval, authorization or permit of, or filing with or notification to,
any governmental or regulatory authority to be made or obtained by C&W or
CIBBV.
(b) Except as set forth in Schedule 3.4, C&W is not
required to make or obtain any declaration, filing or registration with, or
notice to, or authorization, consent or approval of any governmental or
regulatory body or authority for the consummation by C&W of the
transactions contemplated hereby.
3.5. Financial Statements; Undisclosed Liabilities.
(a) C&W has previously furnished to Buyer copies of CIBBV's
unaudited (i) balance sheets as of December 31, 1997 and (ii) related
unaudited statements of income and retained earnings and changes in
financial position of CIBBV for the fiscal year then ended. To the
knowledge of C&W, such financial report presents fairly the financial
information purported to be set forth therein as of the dates, or for the
periods, described therein, all in conformity with the accounting
principles described therein. Notwithstanding the foregoing, C&W is making
no representation as to whether the receivables set out in the financial
statements are or will be collectible.
(b) Except as set forth in Schedule 3.5, to the knowledge
of C&W, CIBBV has not incurred any material liability or obligation,
secured or unsecured (whether absolute, accrued, contingent or otherwise,
and whether due or to become due), of a nature required by generally
accepted accounting principles to be reflected in a corporate balance sheet
or disclosed in the notes thereto, which are not accrued or reserved
against in the financial reports referred to in Section 3.5(a) hereof or
disclosed in the notes thereto in accordance with generally accepted
accounting principles whether at or after the date of the financial report
referred to in Section 3.5(a) hereof, except those which were incurred in
the ordinary course of business in line with past practice.
3.6. Fees and Commissions. No broker, finder or other person is
entitled to any brokerage fees, commissions or finder's fees in connection
with the transaction contemplated hereby by reason of any action taken by
C&W. C&W hereby covenants that it will pay to Buyer or otherwise
discharge, and will indemnify and hold Buyer harmless from and against, any
and all claims or liabilities for all brokerage fees, commissions and
finder's fees (other than as described above) incurred by reason of any
action taken by C&W.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to C&W as follows:
4.1. Organization. Buyer is a corporation duly organized,
validly existing and in good standing under the laws of the State of
Delaware. Buyer has heretofore delivered to C&W complete and correct
copies of its Certificate of Incorporation and Bylaws as currently in
effect.
4.2. Authority Relative to this Agreement. Buyer has full power
and authority to execute, deliver and perform all obligations under this
Agreement and to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly and validly authorized by
Buyer and no other proceedings on the part of Buyer are necessary to
authorize this Agreement or to consummate the transactions contemplated
hereby. This Agreement has been duly and validly executed and delivered by
Buyer, and assuming that this Agreement constitutes a valid and binding
agreement of C&W, constitutes a valid and binding agreement of Buyer,
enforceable against Buyer in accordance with its terms, except that such
enforceability may be limited by applicable bankruptcy, insolvency,
moratorium or other similar laws affecting or relating to enforcement of
creditors' rights generally or general principles of equity.
4.3. Buyer Shares. The Buyer Shares, when issued in accordance
with the terms and conditions of this Agreement, will be validly issued,
fully paid and non-assessable shares of Common Stock of Buyer, free and
clear of all pledges, security interests, liens, charges, encumbrances,
claims, options or limitations affecting C&W's ability to vote such shares
or to exercise any other rights appurtenant thereto
4.4. Consents and Approvals; No Violation; Receipt of
Information.
(a) Except as set forth in Schedule 4.4, neither the
execution and delivery of this Agreement by Buyer nor the purchase by Buyer
of the CIBBV Shares pursuant to this Agreement will (i) conflict with or
result in any breach of any provision of the organizational documents of
Buyer, (ii) require any consent, approval, authorization or permit of, or
filing with or notification to, any governmental or regulatory authority,
or (iii) result in a default (or give rise to any right of termination,
cancellation or acceleration) under any of the terms, conditions or
provisions of any note, bond, mortgage, indenture, agreement, lease or
other instrument or obligation to which Buyer or any of its subsidiaries
are a party or by which any of their respective assets may be bound, except
for such defaults (or rights of termination, cancellation or acceleration)
as to which requisite waivers or consents have been obtained.
(b) No declaration, filing or registration with, or notice
to, or authorization, consent or approval of any governmental or regulatory
body or authority is necessary for the consummation by Buyer of the
transactions contemplated hereby.
(c) Buyer or its counsel, accountants or other advisers
have requested, received, reviewed and considered all information deemed
relevant by them, including, without limitation, information regarding
currency and taxation issues, in making the decision to enter into this
Agreement and to acquire the CIBBV Shares on the terms and conditions set
forth herein.
4.5. Fees and Commissions. No broker, finder or other person is
entitled to any brokerage fees, commissions or finder's fees in connection
with the transaction contemplated hereby by reason of any action taken by
Buyer making such representation. Buyer hereby covenants that it will pay
to C&W or otherwise discharge, and will indemnify and hold C&W harmless
from and against, any and all claims or liabilities for all brokerage fees,
commissions and finder's fees (other than as described above) incurred by
reason of any action taken by Buyer.
ARTICLE V
COVENANTS OF THE PARTIES
5.1. Conduct of Business of CIBBV. Except as described in
Schedule 5.1, during the period from the date of this Agreement to the
Closing Date, C&W covenants that CIBBV will conduct its business and
operations according to its ordinary and usual course of business
consistent with past practice. Without limiting the generality of the
foregoing, and, except as contemplated in this Agreement or as described in
Schedule 5.1, prior to the Closing Date, without the prior written consent
of Buyer, C&W will not permit CIBBV to:
(a) (i) create, incur or assume any amount of indebtedness
for money borrowed, other than in the ordinary course of business in line
with past practice, or (ii) assume, guarantee, endorse or otherwise become
liable or responsible (whether directly, contingently or otherwise) for the
obligations of any other person except in the ordinary course of business
in line with past practice; provided, CIBBV may endorse negotiable
instruments in the ordinary course of business and may enter into the
proposed guarantee set forth on Schedule 3.5;
(b) declare, set aside or pay any dividend or other
distribution (whether in cash, stock or property or any combination
thereof) in respect of its capital stock, or redeem or otherwise acquire
any shares of its capital stock;
(c) enter into any agreement, commitment or transaction
(including without limitation any borrowing, capital expenditure or capital
financing), except agreements, commitments or transactions in the ordinary
course of business in line with past practice or as contemplated herein; or
(d) enter into any contract, agreement, commitment or
arrangement, whether written or oral, with respect to any of the
transactions set forth in the foregoing paragraphs (a) through (c).
5.2. Expenses. Whether or not the transactions contemplated
hereby are consummated, all costs and expenses incurred in connection with
this Agreement and the transactions contemplated hereby shall be borne by
the party incurring such costs and expenses.
5.3. Further Assurances. Subject to the terms and conditions
of this Agreement, each of the parties hereto will use all reasonable
efforts to take, or cause to be taken, all action, and to do, or cause to
be done, all things reasonably necessary, proper or advisable under
applicable laws and regulations to consummate and make effective the sale,
assignment, transfer and delivery of the CIBBV Shares to Buyer and the
issuance and delivery of the Buyer Shares to C&W pursuant to this
Agreement. From time to time after the date hereof, without further
consideration, C&W will, at its own expense, execute and deliver such
documents to Buyer as Buyer may reasonably request in order more
effectively to vest in Buyer good title to the CIBBV Shares and to assign
the benefit of the Loan Agreement (and any other liabilities to be assigned
to Buyer or its designee pursuant to Section 5.9 hereof) to Buyer or its
designee. From time to time after the date hereof, without further
consideration, Buyer will, at its own expense, execute and deliver such
documents to C&W as C&W may reasonably request in order more effectively to
consummate the issuance and delivery of the Buyer Shares pursuant to this
Agreement.
5.4. Public Statements. The parties shall consult with each
other prior to issuing any public announcement, statement or other
disclosure with respect to this Agreement or the transactions contemplated
hereby and shall not issue any such public announcement, statement or other
disclosure prior to such consultation, unless legally compelled (by
deposition, interrogatory, request for documents, subpoena, civil
investigative demand or similar process, or by order of a court or tribunal
of competent jurisdiction), or in order to comply with applicable rules or
requirements of any stock exchange, government department or agency or
other regulatory authority, or by requirements of any securities law or
regulation or other legal requirement in circumstances where such
consultation would not be practicable.
5.5. Consents and Approvals.
(a) C&W and Buyer shall (i) promptly prepare and file all
necessary documentation, (ii) effect all necessary applications, notices,
petitions and filings and execute all agreements and documents, (iii) use
all reasonable efforts to obtain all necessary permits, consents, approvals
and authorizations of all governmental bodies and (iv) use all reasonable
efforts to obtain all necessary permits, consents, approvals and
authorizations of all other parties, in the case of C&W, as specified on
Schedule 3.4 and, in the case of Buyer, as specified on Schedule 4.4
(including without limitation any approval required from the shareholders
of Buyer and the holders of the debt of the Buyer), together with any other
approvals or consents identified by the parties after the signing of this
Agreement as being required in order, respectively, for C&W to sell, and
for Buyer to acquire, the CIBBV Shares, and, respectively, for Buyer to
issue to C&W, and for C&W to acquire, the Buyer Shares. Each of Buyer and
C&W shall provide reasonable assistance to the other in order to obtain the
consents and approvals referred to herein. Each of C&W and Buyer shall
have the right to review and be consulted in advance as to all
characterizations of the information relating to the transactions
contemplated by this Agreement which appear in any filing made in
connection with the transactions contemplated hereby. The parties hereto
agree that they will consult with each other with respect to the obtaining
of all such necessary permits, consents, approvals and authorizations of
all third parties and governmental bodies.
(b) The parties hereto shall consult with each other prior
to proposing or entering into any stipulation or agreement with any foreign
or United States governmental authority or agency or any third party in
connection with any foreign or United States governmental consents and
approvals legally required for the consummation of the transactions
contemplated hereby and shall not propose or enter into any such
stipulation or agreement without the other party's prior written consent,
which consent shall not be unreasonably withheld.
5.6. Completion of Ancillary Agreements. Subject to the terms
and conditions of this Agreement, each party will use all reasonable
efforts to take or cause to be taken, all action, and do or cause to be
done all things reasonably necessary, proper or advisable to ensure the
completion of, in the case of C&W, the Share Purchase Agreement, and in the
case of Buyer, the Asset Exchange Agreement, dated the date hereof, between
Buyer and News America (the "Asset Exchange Agreement") and the Directors
Nomination Agreement, between Buyer and News America, each in the form as
executed on the date hereof, and to perform all of their respective
obligations thereunder.
5.7. Supplements to Schedules. C&W, on the one hand, and Buyer,
on the other hand, shall have the right from time to time prior to the
Closing to supplement or amend its Schedules with respect to any matter
hereafter arising which if existing or known at the date of this Agreement
would have been required to be set forth or described in such Schedules.
Any such supplemental or amended disclosure shall be deemed to have cured
any breach of any representation or warranty made in this Agreement for
purposes of this Agreement, but will not be deemed to have cured any such
breach made in this Agreement and to have been disclosed as of the date of
this Agreement for purposes of determining whether or not the conditions
set forth in Article VI hereof have been satisfied.
5.8. Hart-Scott-Rodino. Buyer shall use its best efforts to
assist News America Incorporated ("News America") in the prompt preparation
and filing of the filing required to be made by News America under Title II
of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended
(the "HSR Act"), with respect to the transactions contemplated by the share
purchase agreement, dated as of the date hereof, between C&W and News
America (the "Share Purchase Agreement"), and Buyer shall promptly, and in
any event within five (5) Business Days (as defined herein) from the date
of this Agreement, make the filing required to be made by Buyer under the
HSR Act with respect to the transactions contemplated by the Share Purchase
Agreement.
5.9. Termination of Intercompany Agreements; Settlement of
Liabilities. At the Closing Date, the benefit of the Loan Agreement shall
be assigned to Buyer or its designee pursuant to the terms of this
Agreement. In addition, at or prior to the Closing Date, all intercompany
agreements relating to loans or other indebtedness for money borrowed
(including, for the avoidance of doubt, on a "current account" basis),
between C&W or its subsidiaries or affiliates controlled by C&W (other than
the CIBBV Group), on the one hand, and and CIBBV, Belcel or Baltic
Operations, on the other hand, other than the Loan Agreement, shall have
either been terminated or assigned to Buyer or its designee, in either case
without any residual liability on the part of CIBBV, Belcel or Baltic
Operations thereunder to C&W or any of its subsidiaries or affiliates
controlled by C&W outside of the CIBBV Group as of the Closing Date, and
vice versa. For the avoidance of doubt, this provision does not apply to
any amounts that might be required to be paid by Belcel to any of C&W's
subsidiaries or affiliates controlled by C&W in relation to lines leased
through the Ministry of Transport of Belarus, Beltelekom or the Republican
Exchange.
5.10. Maintenance of Guarantee. Following completion of the
transactions contemplated hereby, C&W shall maintain, in full force and
effect, its corporate guarantee (the "Guarantee") in relation to the
obligations of Belcel under the Loan Agreement, dated February 21, 1995,
between Belcel and Nordbanken until the earlier of the expiration of its
obligations under the Loan Agreement or until another guarantee is put in
place, provided that in no event shall C&W be required to increase or
extend its liabilities under the existing form of the Guarantee. To the
extent that C&W is called to perform its obligations under the Guarantee in
full or in part, Buyer shall indemnify C&W for the full amount actually
paid by C&W under the Guarantee. In addition, Buyer shall not, and shall
ensure that Belcel does not, make further drawdowns under such Loan
Agreement and shall use best efforts to put a substitute guarantee in
place.
5.11. Secondment. C&W shall use its best efforts to second
Richard Rogerson and Ian Reidy to Buyer under the terms of the existing
Agreement for the Provision of Support Services, dated November 27, 1996,
between C&W and Buyer, at cost plus 7.2%, for a period of six months from
the Closing Date.
ARTICLE VI
CLOSING CONDITIONS
6.1. Conditions to Each Party's Obligations to Effect the
Transactions Contemplated Hereby. The respective obligations of each party
to effect the transactions contemplated hereby shall be subject to the
fulfillment at or prior to the Closing Date of the following conditions:
(a) No preliminary or permanent injunction or other order
or decree by any federal, state, local or foreign court which prevents the
consummation of the transactions contemplated hereby shall have been issued
and remain in effect (each party agreeing to use its reasonable best
efforts to have any such injunction, order or decree lifted) and no
statute, rule or regulation shall have been enacted by any federal, state,
local, or foreign government or governmental agency which prohibits the
consummation of the transactions contemplated hereby;
(b) All foreign and United States federal, state and local
government consents and approvals required for the consummation of the
transactions contemplated hereby shall have become Final Orders (a "Final
Order" means a final order after all opportunities for rehearing are
exhausted (whether or not any appeal thereof is pending)) and shall not be
subject to terms and conditions; and-
(c) All approvals and consents specified on Schedules 3.4
and 4.4 hereto, together with any necessary approvals or consents
identified by the parties hereto following the date of this Agreement as
being required in order for C&W to sell, and for Buyer to acquire, the
CIBBV Shares, and for Buyer to issue to C&W, and for C&W to acquire, the
Buyer Shares shall have been obtained.
6.2. Conditions to Obligations of Buyer. The obligation of
Buyer to effect the transactions contemplated by this Agreement shall be
subject to the fulfillment at or prior to the Closing Date of the following
additional conditions:
(a) C&W shall have performed and complied with in all
material respects the covenants and agreements contained in this Agreement
required to be performed and complied with by it at or prior to the Closing
Date, and the representations and warranties of C&W set forth in this
Agreement, giving effect to the amendment or supplement of any schedule
pursuant to Section 5.6 hereof, shall be true and correct in all material
respects as of the date of this Agreement and as of the Closing Date as
though made at and as of the Closing Date;
(b) the transactions contemplated hereby shall have been
approved by all necessary corporate actions by CIBBV;
(c) the conditions to the closing of the Share Purchase
Agreement (other than the issuance of the Buyer Shares to C&W pursuant to
this Agreement) shall have been met, and C&W and News America shall be
prepared to close the transactions contemplated by the Share Purchase
Agreement immediately after the closing of the transactions contemplated
hereby;
(d) Buyer shall have received duly certified evidence,
acceptable to Buyer, of one or more entries in the share registry of CIBBV
evidencing the transfer of title to the CIBBV Shares to Buyer, together
with any other documents that are necessary to transfer to Buyer good and
marketable title to the CIBBV Shares; and
(e) Buyer shall have received a certificate from an
authorized officer of C&W, dated the Closing Date, to the effect that to
the officer's knowledge, the conditions set forth in Section 6.2(a) and (b)
have been satisfied.
6.3. Conditions to Obligations of C&W. The obligations of C&W
to effect the transaction contemplated by this Agreement shall be subject
to the fulfillment at or prior to the Closing Date of the following
additional conditions:
(a) one or more stock certificates representing the Buyer
Shares shall have been delivered to C&W or its nominee or designee;
(b) Buyer shall have performed and complied with in all
material respects the covenants and agreements contained in this Agreement
required to be performed and complied with by it at or prior to the Closing
Date, and the representations and warranties of Buyer set forth in this
Agreement, giving effect to the amendment or supplement of any schedule
pursuant to Section 5.6 hereof, shall be true and correct in all material
respects as of the date of this Agreement and as of the Closing Date as
though made at and as of the Closing Date; and
(c) C&W shall have received a certificate from an
authorized officer of Buyer, dated the Closing Date, to the effect that to
the officer's knowledge, the conditions set forth in Section 6.3(b) have
been satisfied.
ARTICLE VII
TERMINATION AND ABANDONMENT
7.1. Termination.
(a) This Agreement may be terminated at any time prior to
the Closing Date, by mutual written consent of Buyer and C&W.
(b) This Agreement may be terminated by Buyer, on the one
hand, or C&W, on the other hand, if the transactions contemplated hereby
shall not have been consummated on or before June 30, 1998; provided,
however, that the right to terminate this Agreement pursuant to this
Section 7.1(b) shall not be available to any party whose failure to perform
any of its covenants or obligations under this Agreement has been the cause
of or resulting in the failure of the transactions contemplated by this
Agreement to occur on or prior to the aforesaid date.
(c) This Agreement may be terminated by either Buyer, on
the one hand, or C&W, on the other hand, if (i) any governmental or
regulatory body, the consent of which is a condition to the obligations of
C&W and Buyer to consummate the transactions contemplated hereby, shall
have determined not to grant its consent and all appeals of such
determination shall have been taken and have been unsuccessful, or (ii) any
court of competent jurisdiction shall have issued an order, judgment or
decree permanently restraining, enjoining or otherwise prohibiting the
transactions contemplated hereby and such order, judgment or decree shall
have become final and nonappealable.
(d) This Agreement may be terminated by Buyer, on the one
hand, or C&W, on the other hand, if there has been a material violation or
breach of any agreement, representation or warranty contained in this
Agreement which violation or breach has not been waived by the non-
breaching party or otherwise rectified. Without limiting the generality of
the foregoing, the failure by Buyer to file the HSR filing to be made by
Buyer, as set forth in Section 5.8 and within the time period set forth in
Section 5.8, shall constitute a material breach of this Agreement by Buyer.
7.2. Procedure and Effect of Termination. In the event of
termination of this Agreement and abandonment of the transactions
contemplated hereby by either or both of the parties pursuant to Section
7.1, written notice thereof shall forthwith be given by the terminating
party to the other party and this Agreement shall terminate and the
transactions contemplated hereby shall be abandoned, without further action
by any of the parties hereto, without prejudice to any claims of a party to
this Agreement arising prior to the date of such termination out of any
breach of any agreement, representation or warranty contained in this
Agreement and Article VIII shall continue in respect of such claims. In
addition, the obligations of the parties hereto under Section 5.4 and
Article IX shall survive termination of this Agreement. If this Agreement
is terminated as provided herein all filings, applications and other
submissions made pursuant to this Agreement, to the extent practicable,
shall be withdrawn from the agency or other person to which they were made.
ARTICLE VIII
SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION
8.1. Survival of Representations. All representations and
warranties of the parties, being those in Articles III and IV, including
the schedules thereto, shall survive the Closing until one (1) year after
the Closing.
8.2. C&W's Indemnification of Buyer. Subject to the conditions
of this Article VIII, C&W hereby agrees that it shall indemnify, defend and
hold harmless Buyer and any parent, subsidiary and affiliate of Buyer
(collectively, the "Buyer Group") from and against all demands, claims,
actions or causes of action, assessments, losses, damages, liabilities,
costs and expenses, including, without limitation, interest, penalties and
reasonable attorneys' fees and expenses (collectively, "Damages"), asserted
against, resulting to, imposed upon or incurred by any of the Buyer Group,
directly or indirectly, arising out of or resulting from a breach of any
representation, warranty or agreement of C&W contained in or made pursuant
to this Agreement or any facts or circumstances constituting such a breach
(collectively, "Buyer's Indemnifiable Claims"); provided, however, that the
indemnification obligation of C&W with respect to any breach of any of the
representations or warranties made by C&W in this Agreement shall arise
only in the event that C&W had knowledge of such breach on or before the
Closing. For purposes of this Agreement, "knowledge" of C&W shall mean the
knowledge of Roger Mortimer, Joseph Lyon and John Macpherson (collectively,
the "Designated Persons"). C&W represents and warrants that the Designated
Persons are the only current management personnel of C&W or CIBBV who have
substantial executive, management or financial responsibilities for CIBBV
who would be reasonably likely to be aware of facts or circumstances that
could cause a representation or warranty made by C&W in this Agreement to
be false in any material respect.
8.3. Buyer's Indemnification of C&W. Subject to the conditions
of this Article VIII, Buyer hereby agrees that it shall indemnify, defend
and hold harmless C&W and any parent, subsidiary and affiliate of C&W
(collectively, the "C&W Group") from and against all Damages asserted
against, resulting to, imposed upon or incurred by any of the C&W Group,
directly or indirectly, arising out of or resulting from a breach of any
representation, warranty or agreement of Buyer contained in or made
pursuant to this Agreement or any facts or circumstances constituting such
a breach ("C&W Indemnifiable Claims"; C&W's Indemnifiable Claims and
Buyer's Indemnifiable Claims are collectively referred to herein as the
"Indemnifiable Claims"); provided, however, that the indemnification
obligation of Buyer with respect to any breach of any of the
representations or warranties made by Buyer in this Agreement shall arise
only in the event that Buyer had knowledge of such breach on or before the
Closing. For purposes of this Agreement "knowledge" of Buyer shall mean
actual knowledge on the part of any member of management of Buyer or actual
knowledge of such circumstances that would lead a person not negligent to
investigate and, more likely than not, obtain actual knowledge.
8.4. Conditions of Indemnification. The obligations and
liabilities of C&W under Section 8.2 or Buyer under Section 8.3,
respectively, with respect to Indemnifiable Claims resulting from the
assertion of liability by third parties shall be subject to the following
terms and conditions:
(a) The member of the C&W Group or the Buyer Group, as the
case may be, asserting the existence of an Indemnifiable Claim (the
"Indemnified Party") will give notice of any such Indemnifiable Claim to
the party from whom Indemnification is sought (the "Indemnifying Party"),
and the Indemnifying Party shall undertake the defense thereof by
representation of their choosing, and will consult with the Indemnified
Party concerning such defense during the course thereof.
(b) In the event that the Indemnifying Party within a
reasonable time after notice of any Indemnifiable Claim, fails to defend,
the Indemnified Party against which such Indemnifiable Claim has been
asserted will (upon further notice to the Indemnifying Party) have the
right to undertake the defense, compromise or settlement of such
Indemnifiable Claim on behalf of and for the account and risk of the
Indemnifying Party.
(c) Anything in this Section 8.4 to the contrary
notwithstanding, (i) if there is a reasonable probability that an
Indemnifiable Claim may materially and adversely affect the Indemnified
Party other than as a result of money damages or other money payments (for
example, as a result of injunctive or other equitable relief), the
Indemnified Party shall have the right to defend, compromise or settle such
Indemnifiable Claim, provided that the Indemnifying Party will not be bound
by any determination concerning any Indemnifiable Claim so defended or any
compromise or settlement effected without the consent of the Indemnifying
Party, such consent not to be unreasonably withheld, and (ii) the
Indemnifying Party not shall not, without the Indemnified Party's written
consent, settle or compromise any Indemnifiable Claim or consent to entry
of any judgment in respect thereof, unless (A) the Indemnifying Party
delivers to the Indemnified Party in advance its written agreement
satisfactory to the Indemnified Party which provides that amounts paid and
incurred or to be incurred by the Indemnified Party in connection with such
Indemnifiable Claim shall be repaid promptly by the Indemnifying Party to
the Indemnified Party (subject to the limitations of this Article VIII),
and (B) such settlement, compromise or consent includes as an unconditional
term thereof the giving by the claimant or the plaintiff to the Indemnified
Party, as the case may be, a release from all liability in respect to such
Indemnifiable Claim.
8.5. Cushion. The provisions for indemnity contained in Section
8.2 and Section 8.3 hereof shall only be effective with respect to an
Indemnifiable Claim (or, if more than one Indemnifiable Claim is asserted,
with respect to all Indemnifiable Claims) to the extent the amount (or
aggregate amount, in the case of more than one Indemnifiable Claim) of
damages sustained in connection therewith exceeds Three Hundred Thousand
dollars (USD$300,000), but to the extent that the amount or amounts of
damages in respect of Indemnifiable Claims exceeds $300,000, the indemnity
provisions hereunder shall apply to all such damages, without regard to the
$300,000 limit; provided, however, that no cushion shall apply under this
Agreement to the indemnification by Buyer of C&W pursuant to Section 5.10
hereof.
8.6. Limitation of Liability. Anything in this Agreement to the
contrary notwithstanding, the liability of either party in respect of any
breach of any representation, warranty or agreement under this Agreement
shall be limited to claims as to which written notice shall have been given
to the Indemnifying Party on or prior to the first anniversary date of the
Closing Date, whether or not the Indemnified Party has actually settled or
incurred any expense with respect to such Damages. Furthermore, anything
in this Agreement to the contrary notwithstanding, (a) the liability of C&W
pursuant to this Agreement shall be limited to the aggregate market value
on the Closing Date of the Buyer Shares received by C&W (calculated based
on the last sale price of the Common Stock of Buyer on The Nasdaq Stock
Market on the Closing Date (the "Market Value")), as reduced by any amounts
actually paid or required to be paid by C&W in respect of all liabilities
of C&W arising out of the transactions contemplated under the Share
Purchase Agreement,whether under Article VIII of such Agreement or
otherwise, and (b) the liability of Buyer pursuant to this Agreement shall
be limited to twenty-five percent (25%) of the Market Value of the Buyer
Shares; provided, however, that, such cap on the liability of Buyer shall
not apply to the indemnification by Buyer of C&W pursuant to Section 5.10
hereof.
8.7. Remedies Cumulative. The remedies provided herein shall be
cumulative and shall not preclude the assertion by Buyer of any other
rights or the seeking of any other remedies against the other party, as the
case may be; provided, however, all claims under this Agreement shall be
governed by this Article VIII and provided further that the cushion
provided in Section 8.6 hereof and the limitation of liability provided in
Section 8.7 hereof shall also apply to all liabilities arising out of the
transactions contemplated hereby but grounded in a legal or equitable
theory other than a breach of representation, warranty or agreement set
forth in this Agreement.
ARTICLE IX
MISCELLANEOUS PROVISIONS
9.1. Amendment and Modification. Subject to applicable law,
this Agreement may be amended, modified or supplemented only by written
agreement signed by all of the parties hereto.
9.2. Waiver of Compliance; Consents. Except as otherwise
provided in this Agreement, any failure of any of the parties to comply
with any obligation, covenant, agreement or condition herein may be waived
by the party entitled to the benefits thereof only by a written instrument
signed by the party granting such waiver, but such waiver shall not operate
as a waiver of, or estoppel with respect to, any subsequent or other
failure.
9.3. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed effectively given upon personal
delivery to the party to be notified, on the next Business Day after
delivery to an internationally recognized overnight courier service, upon
confirmation of a facsimile transmission, or five days after deposit with
the United States Post Office or the Royal Mail, by registered or certified
mail (return receipt requested), postage prepaid, to the parties at the
following addresses (or at such other address for a party as shall be
specified by like notice; provided that notices of a change of address
shall be effective only upon receipt thereof):
If to C&W, to:
Cable and Wireless plc
124 Theobalds Road
London WC1X 8RX
United Kingdom
Facsimile: (44) 171 315 5051
Attention: Company Secretary
(with a copy to:
Cleary, Gottlieb, Steen & Hamilton
Level 5, City Place House
55 Basinghall Street
London EC2V 5EH
United Kingdom
Facsimile: (44) 171-600-1698
Attention: Edward F. Greene)
If to Buyer, to:
PLD Telekom Inc.
680 Fifth Avenue
24th Floor
New York, New York 10019
Facsimile: (212) 262-8870
Attention: James Hatt
In the case of notices given to C&W or Buyer, a copy thereof shall
simultaneously be given to News America at:
News America Incorporated
1211 Avenue of the Americas
New York, New York 10036
Facsimile: (212) 768-2029
Attention: General Counsel
(with a copy to:
Skadden, Arps, Slate, Meagher & Flom LLP
919 Third Avenue
New York, New York 10022
Facsimile: (212) 735-2000
Attention: Alan G. Straus, Esq.)
9.4. Assignment. This Agreement and all of the provisions
hereof shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and permitted assigns, but neither this
Agreement nor any of the rights, interests or obligations hereunder shall
be assigned by any party hereto, including by operation of law without the
prior written consent of the other party, nor is this Agreement intended to
confer upon any other person except the parties hereto any rights or
remedies hereunder.
9.5. Confidentiality. Each of the Parties hereto will hold, and
will use its reasonable, good faith efforts to cause its respective
shareholders, partners, members, directors, officers, employees,
accountants, counsel, consultants, agents and financial or other advisors
(collectively "Agents") to hold, in confidence all information (whether
oral or written), including this Agreement and the documents contemplated
herein, concerning the transactions contemplated by this Agreement
furnished to such Party by or on behalf of any other Party in connection
with such transactions, unless legally compelled (by deposition,
interrogatory, request for documents, subpoena, civil investigative demand
or similar process, or by order of a court or tribunal of competent
jurisdiction), or in order to comply with applicable rules or requirements
of any stock exchange, government department or agency or other regulatory
authority, or by requirements of any securities law or regulation or other
legal requirement to disclose any such information or documents, and except
to the extent that such information or documents can be shown to have been
(a) previously known on a nonconfidential basis by such Party, (b) in the
public domain through no fault of such Party or (c) acquired by such Party
on a nonconfidential basis from sources not known by such Party to be bound
by any obligation of confidentiality in relation thereto. Notwithstanding
the foregoing provisions of this Section 9.5, each Party may disclose such
information to its Agents in connection with the transactions contemplated
by this Agreement so long as such Agents are informed by such Party of the
confidential nature of such information and are required by such Party to
treat such information confidentially, and to certain governmental agencies
in connection with the procurement of the governmental authorizations
contemplated by this Agreement. The obligation of each Party to hold any
such information in confidence shall be satisfied if such Party exercises
the same care with respect to such information as it would take to preserve
the confidentiality of its own similar information. If this Agreement is
terminated, each Party will, and will use its reasonable, good faith
efforts to cause its respective Agents to, destroy or deliver to the other
Party, upon request, all documents and other materials, and all copies
thereof, obtained by such Party or on its behalf from the other Party
hereto in connection with this Agreement that are subject to such
confidence.
9.6. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York (regardless
of the laws that might otherwise govern under applicable New York
principles of conflicts of law) as to all matters, including but not
limited to matters of validity, construction, effect, performance and
remedies.
9.7. Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
9.8. Interpretation. The article and section headings contained
in this Agreement are solely for the purpose of reference, are not part of
the agreement of the parties and shall not in any way affect the meaning or
interpretation of this Agreement. As used in this Agreement, (a) the term
"person" shall mean and include an individual, a partnership, a joint
venture, a corporation, a trust, an unincorporated organization and a
governmental entity or any department or agency thereof, (b) the term
"subsidiary" when used in reference to any other person shall mean any
corporation of which outstanding securities having ordinary voting power to
elect a majority of the Board of Directors of such corporation are owned
directly or indirectly by such other person, (c) the terms "affiliate" and
"parent" shall have the meanings set forth in Rule 12b-2 of the Exchange
Act and (d) the term "Business Day" shall mean any day other than a
Saturday, Sunday or other day on which banks in the State of New York are
authorized or required to be closed..
9.9. Entire Agreement. Subject to the proviso in the final
sentence of this Section, this Agreement, including the documents,
schedules and certificates referred to herein, embody the entire agreement
and understanding of the parties hereto in respect of the transactions
contemplated by this Agreement. There are no restrictions, promises,
representations, warranties, covenants or undertakings, other than those
expressly set forth or referred to herein or therein. This Agreement
supersedes all prior agreements and understandings between the parties with
respect to such transactions; provided, that, notwithstanding the
foregoing, the Confidentiality and Non-Disclosure Agreement, dated
September 6, 1996, between the parties hereto shall survive, in full force
and effect, the execution and delivery of this Agreement.
IN WITNESS WHEREOF, C&W and Buyer have caused this agreement to
be signed by their respective duly authorized officers as of the date first
above written.
PLD TELEKOM INC.
By: /s/ JAMES R.S. HATT
-------------------------------
Name: JAMES R.S. HATT
Title: DIRECTOR
CABLE AND WIRELESS PLC
By: /s/ R. F. MORTIMER
-------------------------------
Name: R. F. MORTIMER
Title: DIRECTOR, GLOBAL
BUSINESS
Exhibit 3
ASSET EXCHANGE AGREEMENT
between
NEWS AMERICA INCORPORATED
and
PLD TELEKOM INC.
Dated April 19, 1998
TABLE OF CONTENTS
Page
ARTICLE I
EXCHANGE OF STOCK
1.1. Exchange of Holdings Shares . . . . . . . . . . . . . . . . . . . 3
ARTICLE II
THE CLOSING
2.1. Time and Place of Closing . . . . . . . . . . . . . . . . . . . . 3
2.2. Deliveries by News America. . . . . . . . . . . . . . . . . . . . 3
2.3. Deliveries by PLD . . . . . . . . . . . . . . . . . . . . . . . . 4
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PLD
3.1. Organization; Qualification . . . . . . . . . . . . . . . . . . . 4
3.2. Capitalization of PLD and PeterStar . . . . . . . . . . . . . . . 5
3.3. Authority Relative to this Agreement . . . . . . . . . . . . . . 5
3.4. Consents and Approvals; No Violation . . . . . . . . . . . . . . 6
3.5. Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.6. Financial Statements . . . . . . . . . . . . . . . . . . . . . . 7
3.7. Undisclosed Liabilities . . . . . . . . . . . . . . . . . . . . . 7
3.8. Absence of Certain Changes or Events . . . . . . . . . . . . . . 7
3.9. Certain Disclosure Matters. . . . . . . . . . . . . . . . . . . . 9
3.10. Legal Proceedings, etc. . . . . . . . . . . . . . . . . . . . . . 9
3.11. Permits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF NEWS AMERICA
4.1. Organization. . . . . . . . . . . . . . . . . . . . . . . . . . 10
4.2. Authority Relative to this Agreement. . . . . . . . . . . . . . 10
4.3. Consents and Approvals; No Violation . . . . . . . . . . . . . . . 11
4.4. Fees and Commissions. . . . . . . . . . . . . . . . . . . . . . . 11
4.5. Title. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.6. Investment Intent; Private Placement. . . . . . . . . . . . . . . 12
ARTICLE V
COVENANTS OF THE PARTIES
5.1. Conduct of Business of PLD and PeterStar. . . . . . . . . . . . . 12
5.2. Access to Information . . . . . . . . . . . . . . . . . . . . . . 13
5.3. Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
5.4. Further Assurances . . . . . . . . . . . . . . . . . . . . . . . 14
5.5. Public Statements . . . . . . . . . . . . . . . . . . . . . . . . 15
5.6. Consents and Approvals. . . . . . . . . . . . . . . . . . . . . . 15
5.7. Supplements to Schedules. . . . . . . . . . . . . . . . . . . . . 16
5.8. Completion of Ancillary Agreements. . . . . . . . . . . . . . . . 16
ARTICLE VI
CLOSING CONDITIONS
6.1. Conditions to Each Party's Obligations to Effect the
Transactions Contemplated Hereby . . . . . . . . . . . . . . . 16
6.2. Conditions to Obligations of News America. . . . . . . . . . . . 17
6.3. Conditions to Obligations of PLD . . . . . . . . . . . . . . . . 19
ARTICLE VII
REGISTRATION RIGHTS
7.1. Registration on Request. . . . . . . . . . . . . . . . . . . . . 20
7.2. Incidental Registration . . . . . . . . . . . . . . . . . . . . . 22
7.3. Registration Procedures . . . . . . . . . . . . . . . . . . . . . 24
7.4. Provision of Information; Transfer of Shares After
Registration . . . . . . . . . . . . . . . . . . . . . . . . . 28
7.5. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . 28
7.6. Transfer of Registration Rights . . . . . . . . . . . . . . . . . 30
ARTICLE VIII
TERMINATION AND ABANDONMENT
8.1. Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
8.2. Procedure and Effect of Termination . . . . . . . . . . . . . . . 31
ARTICLE IX
SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION
9.1. Survival of Representations. . . . . . . . . . . . . . . . . . . 31
9.2. Statements as Representations. . . . . . . . . . . . . . . . . . 31
9.3. PLD's Indemnification of News America. . . . . . . . . . . . . . 31
9.4. News America's Indemnification of PLD. . . . . . . . . . . . . . 32
9.5. Conditions of Indemnification. . . . . . . . . . . . . . . . . . 32
9.6. Cushion. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
9.7. Limitation of Liability. . . . . . . . . . . . . . . . . . . . . 33
9.8. Remedies Cumulative. . . . . . . . . . . . . . . . . . . . . . . 34
9.9. Assignment of Certain Representations, Warranties and
Indemnification Obligations . . . . . . . . . . . . . . . . . . 34
ARTICLE X
MISCELLANEOUS PROVISIONS
10.1. Amendment and Modification. . . . . . . . . . . . . . . . . . . 35
10.2. Waiver of Compliance; Consents . . . . . . . . . . . . . . . . . 35
10.3. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
10.4. Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
10.5. Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . 36
10.6. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . 37
10.7. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . 37
10.8. Interpretation . . . . . . . . . . . . . . . . . . . . . . . . . 37
10.9. Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . 38
ASSET EXCHANGE AGREEMENT
ASSET EXCHANGE AGREEMENT (this "Agreement"), dated April 19,
1998, by and between:
NEWS AMERICA INCORPORATED, a corporation organized under the laws
of the State of Delaware ("News America"), with an address at 1211 Avenue
of the Americas, New York, New York 10036, and
PLD TELEKOM INC., a corporation organized under the laws of
Delaware ("PLD"), with an address at 680 Fifth Avenue, New York, New York
10019.
W I T N E S S E T H:
WHEREAS, PLD is a provider of local, long distance and
international telecommunications services in the Russian Federation and
Kazakstan; and
WHEREAS, News America and Cable and Wireless Plc, a company
registered under the laws of England under the number 238525 ("C&W"), are
substantially simultaneously with the execution and delivery of this
Agreement entering into that certain Stock Purchase Agreement (the "Stock
Purchase Agreement"), pursuant to which News America will purchase from (a)
Navona Communications Corporation Ltd. (a wholly owned subsidiary of C&W),
a corporation organized under the laws of Bermuda ("Navona"), (i)
10,555,739 shares of common stock, par value $.01 per share ("PLD Common
Stock"), of PLD, constituting as at April 16, 1998 approximately 31.21% of
the presently issued and outstanding capital stock of PLD (the "PLD
Shares"), and (ii) 12,000 shares of common stock, par value USD$1.00 per
share, of PLD Holdings Ltd., a limited liability company organized under
the laws of Bermuda ("Holdings"), constituting 100% of the issued and
outstanding capital stock of Holdings (the "Holdings Shares"), which is the
owner of eleven percent (11%) of the outstanding common equity interests in
PeterStar Company Limited, a closed joint stock company organized under the
laws of the Russian Federation ("PeterStar") and (b) C&W, a warrant dated
June 28, 1995, conferring on C&W the right to purchase up to 250,000 shares
(subject to adjustment on the occurrence of certain events) of PLD Common
Stock at an exercise price of 11.3125 Canadian dollars per share, expiring
on June 22, 1999 a copy of which is attached hereto as Exhibit A (the "PLD
Warrant"; the PLD Warrant and the PLD Shares are collectively referred to
herein as the "PLD Interest") and
WHEREAS, PLD deems it to be advisable and in the best interests
of PLD and its shareholders to facilitate the acquisition of the PLD
Interest and the Holdings Shares by News America; and
WHEREAS, News America has advised PLD and C&W that it does not
wish to hold the Holdings Shares and that it is not willing to consummate
the acquisition of the PLD Interest and the Holdings Shares unless it can
substantially simultaneously therewith exchange the Holdings Shares with
PLD for additional shares of PLD Common Stock; and
WHEREAS, PLD deems it advisable and in the best interests of PLD
and its shareholders to acquire the Holdings Shares in exchange for shares
of PLD Common Stock; and
WHEREAS, PLD presently owns sixty percent (60%) of the equity
interest in PeterStar; and
WHEREAS, immediately prior to the consummation of the transaction
contemplated hereby, PLD shall have acquired, pursuant to a Share Purchase
Agreement between PLD and C&W (the "CIBBV Purchase Agreement"), 100 shares
of common stock, par value 400 Netherlands Guilders per share, of
CommStruct International Byelorussia BV, a closed limited liability company
organized under the laws of The Netherlands ("CIBBV"), constituting 100% of
the issued and outstanding capital stock (the "CIBBV Shares") of CIBBV,
which is the owner of fifty percent (50%) of the outstanding common equity
interests in Belarus-Netherlands Belcel Joint Venture ("Belcel") and one
hundred percent (100%) of the outstanding common equity interests in Baltic
Operations Ltd. - Latvia, from C&W in exchange for 200,000 shares of PLD
Common Stock plus 300,000 shares of PLD Common Stock in consideration for
the assignment of certain liabilities of CIBBV to PLD or its designee; and
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements hereinafter set forth, the parties, intending to
be legally bound, hereby agree as follows:
ARTICLE I
EXCHANGE OF STOCK
1.1. Exchange of Holdings Shares.
(a) On the Closing Date and substantially simultaneously
with, and subject to, the purchase of the Holdings Shares by News America
as described in the Stock Purchase Agreement, News America agrees to sell,
assign, transfer and deliver to PLD, and PLD agrees to purchase and acquire
from News America, all of News America's right, title and interest to the
Holdings Shares.
(b) On the Closing Date and against delivery of the
Holdings Shares as set forth above, PLD will issue and deliver to News
America 3,705,631 newly-issued, fully paid and nonassessable shares of PLD
Common Stock (the "New PLD Shares"), registered in the name of News America
or its designee or nominee.
ARTICLE II
THE CLOSING
2.1. Time and Place of Closing. Subject to the terms and
conditions of this Agreement, the consummation of the transaction
contemplated hereby (the "Closing") shall take place at the offices of
Skadden, Arps, Slate, Meagher & Flom LLP, 919 Third Avenue, New York, New
York 10022 on the third business day after News America shall have
delivered to PLD written notice that the conditions set forth in Section
6.2 hereof have been satisfied (the "Closing Date"), or at such other time
and place as shall be determined by mutual agreement of the parties.
2.2. Deliveries by News America. At the Closing, News America
will deliver or cause to be delivered the following to PLD:
(a) Immediately upon (and subject to) the receipt thereof
from C&W, the stock certificates or other instruments representing all of
the Holdings Shares, duly endorsed in blank or accompanied by duly executed
instruments of transfer, together with any other documents that are
necessary to transfer to PLD all of News America's right, title and
interest in and to the Holdings Shares theretofore acquired from C&W or its
affiliates;
(b) the Officer's Certificate referred to in Section 6.3(d)
hereof;
(c) the Opinion of Counsel referred to in Section 6.3(e)
hereof; and
(d) such other documents, instruments and writings as are
required to be delivered by News America at or prior to the Closing Date
pursuant to this Agreement or otherwise required in connection herewith.
2.3. Deliveries by PLD. At the Closing, PLD will deliver the
following to News America:
(a) stock certificates, registered in the name of News
America or its nominee or designee, representing 3,705,631 shares of duly
issued, fully paid and nonassessable PLD Common Stock, and any other
documents that are necessary to transfer to News America good and
marketable title to such shares;
(b) the Officer's Certificate referred to in Section 6.2(f)
hereof;
(c) the Opinion of Counsel referred to in Section 6.2(g)
hereof; and
(d) such other documents, instruments and writings as are
required to be delivered by News America at or prior to the Closing Date
pursuant to this Agreement or otherwise required in connection herewith.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PLD
PLD represents and warrants to News America as follows (for
purposes of Sections 3.7, 3.8, 3.9, 3.10 and 3.11 hereof, the term PLD, as
of the Closing Date, shall mean PLD and its subsidiaries taken as a whole,
including without limitation, the assets, liabilities, business and
operations of Belcel acquired pursuant to the CIBBV Purchase Agreement):
3.1. Organization; Qualification. PLD is a corporation duly
organized, validly existing and in good standing under the laws of the
State of Delaware, and has all requisite corporate power and authority to
own, lease, and operate its properties and to carry on its business as now
being conducted. PLD is duly qualified or licensed to do business as a
foreign corporation and is in good standing in each jurisdiction in which
the property owned, leased or operated by it or the nature of the business
conducted by it makes such qualification necessary. Schedule 3.1 sets
forth, as of the date of this Agreement, each jurisdiction in which PLD is
qualified to do business as a foreign corporation. PLD has heretofore
delivered to News America complete and correct copies of its Certificate of
Incorporation and Bylaws as currently in effect.
3.2. Capitalization of PLD and PeterStar. Set forth on Schedule
3.2 is the number of shares in the capital stock or other equity interests
of each of PLD and PeterStar which are issued and outstanding as of the
date of this Agreement. All such shares are validly issued, fully paid and
nonassessable. Other than this Agreement, or as set forth in Schedule 3.2,
there is no subscription, option, warrant, call, right, agreement or
commitment relating to the issuance, sale, delivery or transfer by PLD and
PeterStar of any shares of capital stock or other equity interest
(including any right of conversion or exchange under any outstanding
security or other instrument). There are no outstanding contractual
obligations of PLD and PeterStar to repurchase, redeem or otherwise acquire
any outstanding shares of capital stock or other equity interest of PLD or
PeterStar. There are no restrictions or limitations contained in the
organizational documents of PLD or in any contract, agreement, document or
other instrument to which PLD or any direct or indirect subsidiary is a
party or of which PLD or any direct or indirect subsidiary is aware that
restricts, or purports to restrict, the ability of C&W or any of its direct
or indirect subsidiaries to transfer the PLD Interest to News America or
that create or give rise to, by reason of the transfer of the PLD Interest
to News America, any pledge, security interest, lien, charge, encumbrance,
claim, option or limitation affecting the ability of News America to vote
such shares or to exercise any other rights appurtenant thereto under the
Stock Purchase Agreement. The New PLD Shares, taken together with the PLD
Shares, will represent an aggregate of not less than thirty-eight (38%) of
the outstanding PLD shares after giving effect to the issuance of the New
PLD Shares. The PLD Warrant is exercisable for shares of PLD Common Stock
in accordance with its terms.
3.3. Authority Relative to this Agreement. PLD has full
corporate power and authority to execute, deliver and perform its
obligations under this Agreement and all ancillary agreements to which it
is a party and to consummate the transactions contemplated hereby and
thereby. The execution and delivery of this Agreement and all ancillary
agreements to which it is a party and the consummation of the transactions
contemplated hereby and thereby have been duly and validly authorized, by
the Board of Directors and, if required, shall be duly and validly
authorized by the shareholders of PLD prior to the Closing Date, and no
other corporate proceedings on the part of PLD are necessary to authorize
this Agreement or to consummate the transactions contemplated hereby and
thereby. This Agreement and each such ancillary agreement to which PLD is
a party has been duly and validly executed and delivered by PLD, and
assuming that this Agreement constitutes a valid and binding agreement of
News America, constitutes a valid and binding agreement of PLD, enforceable
against PLD in accordance with its terms, except that such enforceability
may be limited by applicable bankruptcy, insolvency, moratorium or other
similar laws affecting or relating to enforcement of creditors' rights
generally or general principles of equity.
3.4. Consents and Approvals; No Violation. Except as set forth
in Schedule 3.4, the execution and delivery by PLD of this Agreement and
all ancillary agreements to which it is a party will not (i) conflict with
or result in any breach of any provision of the Certificate of
Incorporation or Bylaws, or similar charter documents, of PLD, (ii) require
any consent, approval, authorization or permit of, or filing with or
notification to, any governmental or regulatory authority, (iii) result in
a default (or give rise to any right of termination, cancellation or
acceleration) under any of the terms, conditions or provisions of any note,
bond, mortgage, indenture, license, agreement or other instrument or
obligation to which PLD is a party or by which PLD or any of its assets may
be bound, except for such defaults (or rights of termination, cancellation
or acceleration) as to which requisite waivers or consents have been
obtained, or (iv) violate any order, writ, injunction, decree, statute,
rule or regulation applicable to PLD or any of its assets.
(b) Except as set forth in Schedule 3.4 and except for the
filings by News America and PLD required by Title II of the Hart-Scott-
Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act"), no
declaration, filing or registration with, or notice to, or authorization,
consent or approval of any governmental or regulatory body or authority is
necessary for the consummation by PLD of the transactions contemplated
hereby.
3.5. Reports. Since January 1, 1997, PLD has, pursuant to the
Securities Act of 1933, as amended (the "Securities Act") and the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), filed or
caused to be filed with the United States Securities and Exchange
Commission ("SEC") all material forms, statements, reports and documents
(including all exhibits, amendments and supplements thereto) required to be
filed by them with respect to the business and operations of PLD under each
of the Securities Act and the Exchange Act and the respective rules and
regulations thereunder, all of which complied in all material respects with
all applicable requirements of the appropriate act and the rules and
regulations thereunder in effect on the date each such report was filed.
True and complete copies of each of such forms, statements, reports and
documents, and such exhibits, have been delivered to News America.
3.6. Financial Statements. PLD has previously furnished to News
America copies of (a) PLD's audited consolidated and (b) PeterStar's
audited (i) balance sheets as of December 31, in each of the years 1997,
1996 and 1995 and (ii) related consolidated statements of income and
retained earnings and consolidated changes in financial position of PLD and
PeterStar for the fiscal years then ended, together with the respective
reports thereon of KPMG Peat Marwick LLP and KPMG, as independent auditors
of PLD for 1997, and 1996 and 1995, respectively, and KPMG, as independent
auditors of PeterStar. Each of the balance sheets included in the
financial statements referred to in this Section 3.6 (including the related
notes thereto) present fairly the financial information purported to be set
therein as of the dates thereof, and the other related statements included
therein (including the related notes thereto) present fairly the results of
operations and changes in financial position for the periods then ended,
all in conformity with generally accepted accounting principles applied on
a consistent basis, except as otherwise noted therein. For purposes of
this Agreement, the audited consolidated balance sheet of PLD and the
audited balance sheet of PeterStar as of December 31, 1997 are hereinafter
referred to as (the "Companies' Balance Sheets").
3.7. Undisclosed Liabilities. Except as set forth in Schedule
3.7, neither PLD nor PeterStar has any material liability or obligation,
secured or unsecured (whether absolute, accrued, contingent or otherwise,
and whether due or to become due), of a nature required by generally
accepted accounting principles to be reflected in a corporate balance sheet
or disclosed in the notes thereto, which are not accrued or reserved
against in the Companies' Balance Sheets or disclosed in the notes thereto
in accordance with generally accepted accounting principles.
3.8. Absence of Certain Changes or Events. Except as set forth
in Schedule 3.8 or in PLD's Annual Report on Form 10-K for the year ended
December 31, 1997, since the date of the Companies' Balance Sheets there
has not been:
(a) any material adverse change in the business, prospects,
operations, properties, assets, liabilities, competition, earnings, or
condition (financial or otherwise) of PLD or PeterStar, or any failure by
PLD or PeterStar to pay its debts when due;
(b) any event or condition of any character which either
individually or in the aggregate, might reasonably be expected to have a
material adverse effect on the business, prospects, operations, properties,
assets, liabilities, competition, earnings or condition (financial or
otherwise), of PLD or PeterStar;
(c) any damage, destruction or loss (regardless of whether
covered by insurance) that might reasonably be expected to have a material
adverse effect on the business, prospects, operation, properties, assets,
liabilities, competition, earnings, or condition (financial or otherwise),
of PLD or PeterStar;
(d) any declaration, setting aside or payment of any
dividend or other distribution (whether in cash, stock, property, or any
combination of the foregoing) with respect to the capital stock or other
equity interest of PLD or PeterStar except as specifically provided for in
this Agreement;
(e) any increase in the compensation paid, payable or to
become payable by PLD or PeterStar to its officers, directors or employees
(other than increases for employees in the ordinary course of business and
consistent with past practice), any hiring of new officers, directors or
employees (other than hiring of new employees in the ordinary course of
business consistent with past practice) or any increase in any bonus,
insurance, pension or other employee benefit plan, payments or arrangement
(including loans) made to, for or with any officers, directors, or
employees (other than increases for employees in the ordinary course of
business and consistent with past practice or other increases pursuant to
written employee benefit plans);
(f) any entry into, material amendment of, or termination
of, any material agreement, material commitment or material transaction by
PLD or PeterStar, including, without limitation, any (i) merger,
consolidation, share exchange, acquisition or disposition of assets or
stock or any financing transaction or capital expenditure, (ii) indenture,
mortgage, note, agreement or other instrument relating to the borrowing of
money (other than intercompany accounts), (iii) partnership or joint
venture agreement, (iv) material license agreement relating to intellectual
property (other than off-the-shelf software licenses), or (v) agreement to
amend its charter or other organizational documents or any other document,
contract, agreement, arrangement, undertaking or instrument relating to any
of the foregoing;
(g) any entry into, material change to the terms or
conditions of termination of, any license, permit, franchise, governmental
approval or decree pursuant to which PLD or PeterStar provides telephony,
data transmission or other telecommunications services;
(h) any notes or accounts receivable or portions of notes
or accounts receivable written off by PLD or PeterStar as uncollectible,
other than in the ordinary course of business and consistent with past
practice;
(i) any material obligation or material liability paid
(whether absolute, accrued, contingent or otherwise), or any lien or
encumbrance in connection therewith discharged, by PLD or PeterStar, other
than (i) in the ordinary course of business and consistent with past
practice, or (ii) current liabilities shown on the financial statements and
current liabilities incurred since their date;
(j) any properties or assets, real, personal or mixed,
tangible or intangible, of PLD or PeterStar mortgaged, pledged or subjected
to any security interest, lien or encumbrance;
(k) except as specifically provided for in this Agreement,
any sale, assignment, transfer, lease, dividend, distribution or other
disposition of any of property or assets by PLD or PeterStar, other than
sales of products in the ordinary course of business; or
(l) any agreement, understanding or undertaking to do any
of the foregoing by PLD or PeterStar.
3.9. Certain Disclosure Matters.
News America has been furnished with copies of each of the
documents, contracts, agreements, licenses, permits and other instruments
identified on Schedule 3.9 hereof (collectively, the "Written Disclosure
Materials"). All of the Written Disclosure Materials are true and complete
copies of each of the documents, contracts, agreements, licenses, permits
and other instruments that they purport to represent, and the Written
Disclosure Materials, together with the schedules attached hereto,
collectively represent a true, fair and complete portrayal of the material
business operations of PLD and PeterStar. None of the Written Disclosure
Materials contains an untrue statement of material fact or omits to state
any fact required to be stated therein or necessary, in light of the
circumstances under which such statements are made, so as not to be
misleading, except to the extent that such statements were later amended,
revised or updated by PLD or PeterStar.
3.10. Legal Proceedings, etc. Except as set forth in Schedule
3.10, there are no claims, actions, or proceedings pending or investigation
pending or, to PLD's knowledge, threatened against or relating to PLD or
PeterStar before any court, governmental or regulatory authority or body
acting in an adjudicative capacity. Except as set forth in Schedule 3.10,
none of PLD or PeterStar is subject to any outstanding judgment, rule,
order, writ, injunction or decree of any court, governmental or regulatory
authority.
3.11. Permits. Each of PLD and PeterStar has all material
permits, licenses, franchises and other governmental authorizations,
consents and approvals (collectively, "Permits") necessary to conduct its
business as presently conducted. Except as set forth in Schedule 3.11,
neither PLD nor PeterStar has received any written notification that it is
in violation of any of such Permits, or any law, statute, order, rule,
regulation, ordinance or judgment of any governmental or regulatory body or
authority applicable to it. Each of PLD and PeterStar is in compliance
with all material Permits, laws, statutes, orders, rules, regulations,
ordinances, or judgments of any governmental or regulatory body or
authority applicable to it.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF NEWS AMERICA
News America represents and warrants to PLD as follows:
4.1. Organization. News America is a corporation duly
organized, validly existing and in good standing under the laws of the
State of Delaware. News America has heretofore delivered to PLD complete
and correct copies of its organizational documents as currently in effect.
4.2. Authority Relative to this Agreement. News America has
full power and authority to execute, deliver and perform all obligations
under this Agreement and all ancillary agreements to which it is a party
and to consummate the transactions contemplated hereby and thereby. The
execution and delivery of this Agreement and all ancillary agreements to
which it is a party and the consummation of the transactions contemplated
hereby and thereby have been duly and validly authorized by News America
and no other proceedings on the part of News America are necessary to
authorize this Agreement or to consummate the transactions contemplated
hereby. This Agreement and all ancillary agreements to which it is a party
have been duly and validly executed and delivered by News America, and
assuming that this Agreement and each such ancillary agreement constitutes
a valid and binding agreement of PLD, constitutes a valid and binding
agreement of News America, enforceable against News America in accordance
with its terms, except that such enforceability may be limited by
applicable bankruptcy, insolvency, moratorium or other similar laws
affecting or relating to enforcement of creditors' rights generally or
general principles of equity.
4.3. Consents and Approvals; No Violation. (a) Except as set
forth in Schedule 4.3, neither the execution and delivery of this Agreement
by News America nor the exchange by News America of the Holdings Shares
pursuant to this Agreement will (i) conflict with or result in any breach
of any provision of the organizational documents of News America, (ii)
require any consent, approval, authorization or permit of, or filing with
or notification to, any governmental or regulatory authority, or (iii)
result in a default (or give rise to any right of termination, cancellation
or acceleration) under any of the terms, conditions or provisions of any
note, bond, mortgage, indenture, agreement, lease or other instrument or
obligation to which News America or any of its subsidiaries are a party or
by which any of their respective assets may be bound, except for such
defaults (or rights of termination, cancellation or acceleration) as to
which requisite waivers or consents have been obtained.
(b) Except for the filings by News America and PLD
required by Title II of the HSR Act, no declaration, filing or registration
with, or notice to, or authorization, consent or approval of any
governmental or regulatory body or authority is necessary for the
consummation by News America of the transactions contemplated hereby.
4.4. Fees and Commissions. No broker, finder or other person is
entitled to any brokerage fees, commissions or finder's fees in connection
with the transaction contemplated hereby by reason of any action taken by
News America. News America hereby covenants that it will pay to PLD or
otherwise discharge, and will indemnify and hold PLD harmless from and
against, any and all claims or liabilities for all brokerage fees,
commissions and finder's fees (other than as described above) incurred by
reason of any action taken by News America.
4.5. Title. News America makes no representations or warranties
regarding the title to the Holdings Shares (including the interest in
PeterStar) that are the subject of this Agreement or the business or
operation of PeterStar or any other matter relating to the Holdings Shares
or their provenance; provided, however, that News America shall represent
in writing to PLD on the Closing Date that News America shall have taken no
action with respect to the Holdings Shares that would interfere with the
transfer to PLD, and the receipt by PLD, of title to the Holdings Shares
which is of the same quality as the title thereto which News America
received from C&W. News America hereby assigns to PLD each of the
representations and warranties made by C&W to News America in the Stock
Purchase Agreement.
4.6. Investment Intent; Private Placement.
(a) News America is knowledgeable, sophisticated and
experienced in making, and is qualified to make, decisions with respect to
investments in equity securities presenting an investment decision like
that involved in the acquisition of the New PLD Shares. News America or
its counsel, accountants or other investment advisers have requested,
received, reviewed and considered all information deemed relevant by them
in making an informed decisions to acquire the New PLD Shares.
(b) News America is acquiring the New PLD Shares for
investment for its own account only and not with a view to, or for resale
in connection with, any "distribution" thereof within the meaning of the
Securities Act. News America has no present intention of selling, granting
any participation in, or otherwise distributing the New PLD Shares, except
in compliance with the Securities Act or pursuant to an available exemption
thereunder.
(c) News America understands that the New PLD Shares have
not been registered under the Securities Act or registered or qualified
under any state securities law in reliance on specific exemptions
therefrom, which exemptions may depend upon, among other things, the bona
fide nature of News America's investment intent as expressed herein. News
America is familiar with Rule 144 under the Securities Act, as presently in
effect, and understands the resale limitations imposed thereby and by the
Securities Act. News America further understands that the certificate(s)
representing the New PLD Shares shall bear the following legend:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN
ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 OR UNDER ANY
APPLICABLE STATE SECURITIES LAWS. THE SHARES MAY NOT
BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN EXEMPTION THEREFROM.
ARTICLE V
COVENANTS OF THE PARTIES
5.1. Conduct of Business of PLD and PeterStar. Except as
described in Schedule 5.1, during the period from the date of this
Agreement to the Closing Date, PLD will, and will cause PeterStar to,
conduct their respective businesses and operations according to their
ordinary and usual course of business consistent with past practice.
Without limiting the generality of the foregoing, and, except as
contemplated in this Agreement or as described in Schedule 5.1, prior to
the Closing Date, without the prior written consent of News America, PLD
will not, and will not permit PeterStar to:
(a) (i) create, incur or assume any amount of indebtedness
for money borrowed, other than in the ordinary course of business, or (ii)
assume, guarantee, endorse or otherwise become liable or responsible
(whether directly, contingently or otherwise) for the obligations of any
other person except in the ordinary course of business; provided, PLD and
PeterStar may endorse negotiable instruments in the ordinary course of
business;
(b) declare, set aside or pay any dividend or other
distribution (whether in cash, stock or property or any combination
thereof) in respect of their respective capital stock, or redeem or
otherwise acquire any shares of their respective capital stock;
(c) enter into any agreement, commitment or transaction
(including without limitation any borrowing, capital expenditure or capital
financing), except agreements, commitments or transactions in the ordinary
course of business or as contemplated herein provided, that PLD may
nevertheless effect the public offering of shares of PLD Common Stock as
contemplated by the terms of (i) that certain Indenture, dated May 31,
1996, among the parties signatories thereto, relating to the $123,000,000
14% senior discount notes due 2004, (ii) that certain Indenture, dated May
31, 1996, among the parties signatories thereto, relating to the
$26,000,000 9% convertible subordinated notes due 2006 (each such Indenture
are collectively referred to herein as the "Indentures") and (iii) the
Revolving Credit Note and Warrant Agreement relating to PLD's $12,400,000
12% Series A Revolving Credit Notes due 1998 and $3,100,000 12% Series B
Revolving Credit Notes due 1998; or
(d) enter into any contract, agreement, commitment or
arrangement, whether written or oral, with respect to any of the
transactions set forth in the foregoing paragraphs (a) through (c).
5.2. Access to Information. Between the date of this Agreement
and the Closing Date, PLD will, and will cause PeterStar, during ordinary
business hours and upon reasonable notice to, (i) give News America and its
accountants, counsel, financial advisors and other authorized
representatives (the "News America Representatives") reasonable access to
all books, records, plants, offices and other facilities and properties of
PLD and PeterStar to which News America is permitted access by law, (ii)
permit News America to make such reasonable inspections thereof as News
America may reasonably request; (iii) cause the officers and advisors of
PLD and PeterStar to furnish News America with such financial and operating
data and other information with respect to the business and properties of
PLD and PeterStar as News America may from time to time reasonably request;
(iv) cause the officers and advisors of PLD and PeterStar to furnish News
America a copy of each report, schedule or other document filed by them
with any governmental agency or authority, provided, however, that (A) any
such investigation shall be conducted in such a manner as not to interfere
unreasonably with the operation of the business of PLD and PeterStar or
PLD's relationship with the other shareholders of PeterStar, (B) PLD and
PeterStar shall not be required to take any action which would constitute a
waiver of the attorney-client privilege and (C) PLD and PeterStar need not
supply News America with any information which PLD or PeterStar is under a
legal obligation not to supply.
All information furnished to or obtained by News America and any
News America Representatives pursuant to this Section 5.2 shall be subject
to the confidentiality provisions set forth in Section 10.5 hereof.
5.3. Expenses. Whether or not the transactions contemplated
hereby are consummated, all costs and expenses incurred in connection with
this Agreement and the transactions contemplated hereby shall be borne by
the party incurring such costs and expenses.
5.4. Further Assurances. Subject to the terms and conditions
of this Agreement, each of the parties hereto will use all reasonable
efforts to take, or cause to be taken, all action, and to do, or cause to
be done, all things necessary, proper or advisable under applicable laws
and regulations to consummate and make effective the sale, assignment,
transfer and delivery of the PLD Interest, and the Holdings Shares and the
interest in PeterStar represented thereby, pursuant to this Agreement.
From time to time after the date hereof, without further consideration,
News America will, at its own expense, execute and deliver such documents
to PLD as PLD may reasonably request in order more effectively to vest in
PLD good title to the Holdings Shares. From time to time after the date
hereof, without further consideration, PLD will, at its own expense,
execute and deliver such documents to News America or its designee (which
may include C&W) as News America or such designee may reasonably request in
order more effectively to consummate the sale, assignment, transfer and
delivery of (a) the New PLD Shares pursuant to this Agreement and (b) the
PLD Interest and the Holdings Shares pursuant to the Stock Purchase
Agreement.
5.5. Public Statements. The parties shall consult with each
other prior to issuing any public announcement, statement or other
disclosure with respect to this Agreement or the transactions contemplated
hereby and shall not issue any such public announcement, statement or other
disclosure prior to such consultation. Notwithstanding the foregoing, the
parties may make public announcements, statements or other disclosures with
respect to this Agreement and the transactions contemplated hereby without
such consultation to the extent and under the circumstances in which the
parties are legally compelled (by deposition, interrogatory, request for
documents, subpoena, civil investigative demand or similar process, or by
order of a court or tribunal of competent jurisdiction) to do so, or in
order to comply with applicable rules or requirements of any stock
exchange, government department or agency or other regulatory authority, or
as required by any securities law or regulation or other legal requirement,
in any such case in circumstances where such consultation would not be
practicable.
5.6. Consents and Approvals.
(a) PLD and News America shall cooperate with each other
and (i) promptly prepare and file all necessary documentation, (ii) effect
all necessary applications, notices, petitions and filings and execute all
agreements and documents, (iii) use all reasonable efforts to obtain all
necessary permits, consents, approvals and authorizations of all
governmental bodies and (iv) use all reasonable efforts to obtain all
necessary Permits, consents, approvals and authorizations of all other
parties, in the case of each of the foregoing clauses (i), (ii) and (iii),
necessary or advisable to consummate the transactions contemplated by this
Agreement or required by the terms of any note, bond, mortgage, indenture,
deed of trust, license, franchise, permit, concession, contract, lease or
other instrument to which PLD, Holdings, PeterStar or News America or any
of their subsidiaries are a party or by which any of them is bound. PLD
shall have the right to review and approve in advance all characteristics
of the information relating to PLD or PeterStar; and each of PLD and News
America shall have the right to review and approve in advance all
characterizations of the information relating to the transactions
contemplated by this Agreement which appear in any filing made in
connection with the transactions contemplated hereby. The parties hereto
agree that they will consult with each other with respect to the obtaining
of all such necessary Permits, consents, approvals and authorizations of
all third parties and governmental bodies. Each of PLD and News America
shall designate separate counsel with respect to all applications, notices,
petitions and filings (joint or otherwise) relating to this Agreement and
the transactions contemplated hereby on behalf of PLD, on the one hand and
News America on the other hand, with all governmental bodies.
(b) The parties hereto shall consult with each other prior
to proposing or entering into any stipulation or agreement with any foreign
or United States governmental authority or agency or any third party in
connection with any foreign or United States governmental consents and
approvals legally required for the consummation of the transactions
contemplated hereby and shall not propose or enter into any such
stipulation or agreement without the other party's prior written consent,
which consent shall not be unreasonably withheld.
5.7. Supplements to Schedules. PLD, on the one hand, and News
America, on the other hand, shall have the right from time to time prior to
the Closing to supplement or amend its Schedules with respect to any matter
hereafter arising which if existing or known at the date of this Agreement
would have been required to be set forth or described in such Schedules.
Any such supplemental or amended disclosure shall be deemed to have cured
any breach of any representation or warranty made in this Agreement for
purposes of Article IX, but will not be deemed to have cured any such
breach made in this Agreement and to have been disclosed as of the date of
this Agreement for purposes of determining whether or not the conditions
set forth in Article VI hereof have been satisfied.
5.8. Completion of Ancillary Agreements. Each party will use
reasonable efforts to take or cause to be taken, all action, and do or
cause to be done all things reasonably necessary or advisable to perform
their respective obligations under, in the case of PLD, the CIBBV Exchange
Agreement and, in the case of News America, the Stock Purchase Agreement,
each in the form as executed on the date hereof.
ARTICLE VI
CLOSING CONDITIONS
6.1. Conditions to Each Party's Obligations to Effect the
Transactions Contemplated Hereby. The respective obligations of each party
to effect the transactions contemplated hereby shall be subject to the
fulfillment at or prior to the Closing Date of the following conditions:
(a) The waiting period under the HSR Act applicable to the
consummation of the transactions contemplated hereby shall have expired or
been terminated;
(b) No preliminary or permanent injunction or other order
or decree by any federal, state, local or foreign court which prevents the
consummation of the transactions contemplated hereby shall have been issued
and remain in effect (each party agreeing to use its reasonable best
efforts to have any such injunction, order or decree lifted) and no
statute, rule or regulation shall have been enacted by any federal, state,
local or foreign government or governmental agency which prohibits the
consummation of the transactions contemplated hereby;
(c) All foreign and United States federal, state and local
government consents and approvals required for the consummation of the
transactions contemplated hereby shall have become Final Orders (a "Final
Order" means a final order after all opportunities for rehearing are
exhausted (whether or not any appeal thereof is pending)) and shall not be
subject to terms and conditions; and
(d) If so required, a resolution shall have passed at the
annual meeting of stockholders (or, if applicable, at any special meeting
of stockholders) of PLD, convened after proper notice to and/or waiver of
such notice by the stockholders, with a quorum of the stockholders present
or represented, to approve the transaction contemplated hereby.
6.2. Conditions to Obligations of News America. The obligation
of News America to effect the transactions contemplated by this Agreement
shall be subject to the fulfillment at or prior to the Closing Date of the
following additional conditions:
(a) There shall not have occurred and be continuing any
event or events, either individually or in the aggregate, which would have
a material and adverse effect on the property, business, operations,
prospects or condition (financial or otherwise) of PLD;
(b) PLD shall have performed and complied with in all
material respects the covenants and agreements contained in this Agreement
required to be performed and complied with by it at or prior to the Closing
Date, and the representations and warranties of PLD set forth in this
Agreement shall be true and correct in all material respects as of the date
of this Agreement and as of the Closing Date as though made at and as of
the Closing Date;
(c) News America and C&W shall have closed the transactions
contemplated by the Stock Purchase Agreement simultaneously with the
transactions contemplated hereby;
(d) News America and PLD shall have executed and delivered
a Director Nomination Agreement containing terms and conditions
satisfactory to News America and PLD and such agreement shall be in full
force and effect;
(e) The common stock of PLD shall be quoted on The Nasdaq
Stock Market, and no action shall have been taken or shall be pending or
threatened in respect of the delisting of the common stock of PLD from
eligibility for such quotation;
(f) News America shall have received a certificate from an
authorized officer of PLD, dated the Closing Date, to the effect that to
the officer's knowledge, the conditions set forth in Section 6.2(a) and (b)
have been satisfied; and
(g) News America shall have received an opinion from E.
Clive Anderson, Senior Vice President and General Counsel of PLD, dated the
Closing Date and satisfactory in form and substance to News America and its
counsel, substantially to the effect that:
(i) PLD is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware and
has the corporate power and authority to execute and deliver this Agreement
and to consummate the transactions contemplated hereby; and the execution
and delivery of this Agreement and the consummation of the transactions
contemplated hereby have been duly authorized by requisite corporate action
taken on the part of PLD;
(ii) this Agreement has been executed and delivered by
PLD and is a valid and binding obligation of the PLD enforceable against it
in accordance with its terms, except (A) that such enforcement may be
subject to bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect relating to creditors' rights, and
(B) that the remedy of specific performance and injunctive and other forms
of equitable relief may be subject to certain equitable defenses and to the
discretion of the court before which any proceeding therefore may be
brought; and
(iii) the issuance and sale of the New PLD Shares to
News America pursuant to this Agreement are not required to be registered
under the Securities Act.
As to any matter contained in such opinion which involves the
laws of any jurisdiction other than the Federal laws of the United States
or the laws of the State of New York, such counsel may rely upon opinions
of counsel admitted in such other jurisdictions. Any opinions relied upon
by such counsel as aforesaid shall be delivered together with the opinion
of such counsel. Such opinion may expressly rely as to matters of fact
upon certificates furnished by PLD and appropriate officers and directors
of each of PLD and PeterStar and by public officials.
6.3. Conditions to Obligations of PLD. The obligations of PLD
to effect the transaction contemplated by this Agreement shall be subject
to the fulfillment at or prior to the Closing Date of the following
additional conditions:
(a) News America shall have performed and complied with in
all material respects the covenants and agreements contained in this
Agreement required to be performed and complied with by it at or prior to
the Closing Date, and the representations and warranties of News America
set forth in this Agreement shall be true and correct in all material
respects as of the date of this Agreement and as of the Closing Date as
though made at and as of the Closing Date;
(b) PLD shall have received stock certificates representing
all of the Holdings Shares, duly endorsed in blank or accompanied by duly
executed instruments of transfer, together with any other documents that
are necessary to transfer to PLD good and marketable title to the Holdings
Shares;
(c) News America and C&W shall have closed the transactions
contemplated by the Stock Purchase Agreement, including the purchase by
News America from C&W of the Holdings Shares;
(d) PLD and C&W shall have closed the transactions
contemplated by the CIBBV Purchase Agreement, including the purchase by PLD
of the CIBBV shares;
(e) PLD shall have received from special Bermuda counsel to
C&W a reliance letter dated the Closing Date to the effect that PLD may
rely on such counsel's opinion to News America in connection with the Stock
Purchase Agreement and assuming that News America transfers to PLD the
Holdings Shares with the same quality of title that News America received
from C&W, PLD will be the beneficial and registered holder of the Holdings
Shares upon the consummation of the transactions contemplated hereby;
(f) PLD shall have received a certificate from an
authorized officer of News America, dated the Closing Date, to the effect
that to the officer's knowledge, the conditions set forth in Section 6.3(a)
have been satisfied; and
(g) PLD shall have received an opinion from Skadden, Arps,
Slate, Meagher & Flom LLP, special counsel to News America, dated the
Closing Date and satisfactory in form and substance to PLD and its counsel,
substantially to the effect that:
(i) News America is a corporation organized and in
good standing under the laws of the State of Delaware and has the power and
authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby; and the execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby have
been duly authorized by requisite action taken on the part of News America;
and
(ii) this Agreement has been executed and delivered by
News America and is a valid and binding obligation of News America,
enforceable against it in accordance with its terms, except (A) that such
enforcement may be subject to bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect relating to
creditors' rights, and (B) that the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to certain
equitable defenses and to the discretion of the court before which any
proceeding therefore may be brought.
As to any matter contained in such opinion which involves the
laws of any jurisdiction other than the Federal laws of the United States
or the laws of the State of New York, such counsel may rely upon opinions
of counsel admitted in such other jurisdictions. Any opinions relied upon
by such counsel as aforesaid shall be delivered together with the opinion
of such counsel. Such opinion may expressly rely as to matters of fact
upon certificates furnished by News America and appropriate officers and
directors of News America and by public officials.
ARTICLE VII
REGISTRATION RIGHTS
7.1. Registration on Request.
(a) Request. Upon the written request of News America or
any permitted successor or assign requesting that PLD effect the
registration under the Securities Act of all or part of any of the PLD
Interest that is not registered under the Securities Act, the New PLD
Shares or any other security of PLD owned, from time to time, by News
America which is registrable under the applicable laws of the United States
(the "Registrable Securities") and specifying the intended method of
disposition thereof, PLD will, subject to the terms of this Agreement, use
its best efforts to effect the registration under the Securities Act of the
Registrable Securities which PLD has been so requested to register for
disposition in accordance with the intended method of disposition stated in
such request; provided, that the request for registration pursuant to this
Section 7.1 shall relate to the intention to dispose of not less than 25%
of the Registrable Securities then owned by News America or its
subsidiaries or affiliates or permitted successors or assigns. For
purposes of this Article VII, the term "News America" shall include, as the
context requires, all holders of Registrable Securities.
(b) Registration Statement Form. Registrations under this
Section 7.1 shall be on such appropriate registration form of the SEC (i)
as shall be selected by PLD and as shall be reasonably acceptable to News
America and (ii) as shall permit the disposition of such Registrable
Securities in accordance with the intended method or methods of disposition
specified in the request for such registration. If, in connection with any
registration under Section 7.1 which is proposed by PLD to be on Form S-3
or any similar short form registration statement which is a successor to
Form S-3, the managing underwriters, if any, shall advise PLD in writing
that in their opinion the use of another permitted form is of material
importance to the success of the offering, then such registration shall be
on such other permitted form.
(c) Expenses. PLD shall pay all Registration Expenses in
connection with only one (1) registration effected in accordance with this
Section 7.1; provided, however, that if at or prior to the fifth
anniversary of the date of this Agreement News America, its affiliates and
subsidiaries, and any permitted successors and assigns, collectively own
more than 50% of the aggregate Registrable Securities subject to this
Agreement (such number to take account of any stock splits, dividends,
combinations or other adjustments affecting any of the Registrable
Securities), then the holders of Registrable Securities shall be entitled
to one (1) additional registration effected in accordance with this Section
7.1 in respect of which PLD shall pay all Registration Expenses.
(d) Effective Registration Statement. A registration
requested pursuant to this Section 7.1 shall not be deemed to have been
effected (i) unless a registration statement with respect thereto has
become effective, provided that a registration which does not become
effective after PLD has filed a registration statement with respect thereto
solely by reason of the refusal to proceed of News America (other than a
refusal to proceed based upon the advice of counsel relating to a matter
with respect to PLD) shall be deemed to have been effected by PLD at the
request of News America unless News America shall have elected to pay all
Registration Expenses in connection with such registration, (ii) if, after
it has become effective, such registration becomes subject to any stop
order, injunction or other order or requirement of the SEC or other
governmental agency or court for any reason, or (iii) the conditions to
closing specified in the purchase agreement or underwriting agreement
entered into in connection with such registration are not satisfied, other
than by reason of some act or omission by News America.
(e) Selection of Underwriters. If a requested registration
pursuant to this Section 7.1 involves an underwritten offering, the
managing or lead underwriter or underwriters thereof shall be selected by
News America and shall be acceptable to PLD, which shall not unreasonably
withhold its acceptance of any such underwriters.
(f) Notwithstanding anything to the contrary contained
herein, PLD shall be entitled to postpone for a reasonable period of time
(but in no event more than 120 days) the filing of a registration statement
if, at the time it receives a request for such registration, (i) PLD
reasonably determines, on the basis of written advice to such effect from
outside counsel or an investment banking firm representing PLD, that such
registration and the offering and sales thereunder by News America would
materially interfere with any financing, acquisition, corporate
reorganization or other material transaction or development involving PLD
or any of its subsidiaries, and promptly gives News America notice of such
determination, (ii) PLD would be required to undergo a special interim
audit or to prepare and file with the SEC sooner than would otherwise be
required pro forma or other financial statements.
7.2. Incidental Registration.
(a) Right to Include Registrable Securities. If PLD at any
time proposes to register any of its securities under the Securities Act
(other than by a registration on Form S-8, or any successor form thereto,
relating to a stock option plan, stock purchase plan, managing directors'
plan, savings or similar plan and other than pursuant to Section 7.1),
whether or not for sale for its own account, it will each such time give
prompt written notice to News America of its intention to do so and of News
America's rights under this Section 7.2. Upon the written request of News
America made within 20 days after the receipt of any such notice (which
request shall specify the Registrable Securities intended to be disposed of
by News America and the intended method of disposition thereof), PLD will,
subject to the terms of this Agreement, use its best efforts to effect the
registration under the Securities Act of all Registrable Securities which
PLD has been so requested to register by News America, to the extent
requisite to permit the disposition (in accordance with the intended
methods thereof as aforesaid) of the Registrable Securities so to be
registered, by inclusion of such Registrable Securities in the registration
statement which covers the securities which News America proposes to
register, provided that if, at any time after giving written notice of its
intention to register any securities and prior to the effective date of the
registration statement filed in connection with such registration, PLD
shall determine for any reason either not to register or to delay
registration of such securities, PLD may, at its election, give written
notice of such determination to News America and, thereupon, (i) in the
case of a determination not to register, shall be relieved of its
obligation to register any Registrable Securities in connection with such
registration (but not from its obligation to pay the Registration Expenses
in connection therewith), without prejudice, however, to the rights of News
America to request that such registration be effected as a registration
under Section 7.1, and (ii) in the case of a determination to delay
registering, shall be permitted to delay registering any Registrable
Securities, for the same period as the delay in registering such other
securities. Except for the shares registered pursuant to this Section 7.2,
no registration effected under this Section 7.2 shall relieve PLD of its
obligation to effect any registration upon request under Section 7.1, nor
shall any such registration hereunder be deemed to have been effected
pursuant to Section 7.1. PLD will pay all Registration Expenses in
connection with each registration of Registrable Securities requested
pursuant to this Section 7.2.
(b) Priority in Incidental Registrations. If (i) a
registration pursuant to this Section 7.2 involves an underwritten offering
of the securities so being registered, whether or not for sale for the
account of PLD, to be distributed (on a firm commitment basis) by or
through one or more underwriters of recognized standing under underwriting
terms appropriate for such a transaction, (ii) the Registrable Securities
so requested to be registered for sale for the account of holders of
Registrable Securities are not also to be included in such underwritten
offering (either because PLD has not been requested so to include such
Registrable Securities pursuant to Section 7.4(b) or, if requested to do
so, is not obligated to do so under Section 7.4(b), and (iii) the managing
underwriter of such underwritten offering shall inform PLD and News America
of its belief that the distribution of all or a specified number of such
Registrable Securities concurrently with the securities being distributed
by such underwriters would interfere with the successful marketing of the
securities being distributed by such underwriters (such writing to state
the basis of such belief and the approximate number of such Registrable
Securities which may be distributed without such effect), then PLD may,
upon written notice to News America, reduce the number of such Registrable
Securities the registration of which shall have been requested by News
America so that the resultant aggregate number of such Registrable
Securities so included in such registration shall be equal to the number of
shares stated in such managing underwriter's letter.
7.3. Registration Procedures. If and whenever PLD is required
to effect the registration of any Registrable Securities under the
Securities Act as provided in Sections 7.1 and 7.2, PLD shall, as
expeditiously as possible:
(i) prepare and (in the case of a registration
pursuant to Section 7.1, such filing to be made within 60 days after
the request of News America) file with the SEC the requisite
registration statement to effect such registration (including such
audited financial statements as may be required by the Securities Act
or the rules and regulations promulgated thereunder) and thereafter
use its best efforts to cause such registration statement to become
and remain effective, provided however that PLD may discontinue any
registration of its securities which are not Registrable Securities
(and, under the circumstances specified in Section 7.2(a), its
securities which are Registrable Securities) at any time prior to the
effective date of the registration statement relating thereto,
provided further that before filing such registration statement or any
amendments thereto, PLD will furnish to the counsel selected by the
holders of Registrable Securities which are to be included in such
registration copies of all such documents proposed to be filed, which
documents will be subject to the review of such counsel;
(ii) prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration
statement effective and to comply with the provisions of the
Securities Act with respect to the disposition of all securities
covered by such registration statement until the earlier of such time
as all of such securities have been disposed of in accordance with the
intended methods of disposition by the seller or sellers thereof set
forth in such registration statement or (i) in the case of a
registration pursuant to Section 7.1, the expiration of 180 days after
such registration statement becomes effective, or (ii) in the case of
a registration pursuant to Section 7.2, the expiration of 90 days
after such registration statement becomes effective;
(iii) furnish to News America and each underwriter, if
any, of the securities being sold such number of conformed copies of
such registration statement and of each such amendment and supplement
thereto (in each case including all exhibits), such number of copies
of the prospectus contained in such registration statement (including
each preliminary prospectus and any summary prospectus) and any other
prospectus filed under Rule 424 under the Securities Act, in
conformity with the requirements of the Securities Act, and such other
documents, as News America and underwriter, if any, may reasonably
request in order to facilitate the public sale or other disposition of
the Registrable Securities owned by News America;
(iv) use its best efforts to register or qualify all
Registrable Securities and other securities covered by such
registration statement under such other securities laws or blue sky
laws of such jurisdictions in the United States as News America and
any underwriter of the securities being sold by News America may
reasonably request, to keep such registrations or qualifications in
effect for so long as such registration statement remains in effect,
and take any other action which may be reasonably necessary or
advisable to enable News America and any such underwriter to
consummate the disposition in such jurisdictions of the securities
owned by News America, except that PLD shall not for any such purpose
be required to qualify generally to do business as a foreign
corporation in any jurisdiction wherein it would not but for the
requirements of this subdivision (iv) be obligated to be so qualified
, to subject itself to taxation in any such jurisdiction or to consent
to general service of process in any such jurisdiction;
(v) use its best efforts to cause all Registrable
Securities covered by such registration statement to be registered
with or approved by such other governmental agencies or authorities as
may be necessary to enable News America to consummate the disposition
of such Registrable Securities;
(vi) furnish to News America a signed counterpart,
addressed to News America and the underwriters, if any, of:
(x) an opinion of counsel for PLD, dated the
effective date of such registration statement (or, if such registration
includes an underwritten public offering, an opinion dated the date of the
closing under the underwriting agreement), reasonably satisfactory in form
and substance to News America and its counsel and covering such matters as
are customarily covered in opinions of issuer's counsel in transactions of
this sort, and
(y) a "comfort" letter (or, in the case News
America does not satisfy the conditions for receipt of a "comfort" letter
specified in Statement on Auditing Standards No. 72, an "agreed upon
procedures" letter), dated the effective date of such registration
statement (and, if such registration includes an underwritten public
offering, a letter of like kind dated the date of the closing under the
underwriting agreement), signed by the independent public accountants who
have certified PLD's financial statements included in such registration
statement, covering substantially the same matters with respect to such
registration statement (and the prospectus included therein) and, in the
case of the accountants' letter, with respect to events subsequent to the
date of such financial statements, as are customarily covered in opinions
of issuer's counsel and in accountants' letters delivered to the
underwriters in underwritten public offerings of securities (with, in the
case of an "agreed upon procedures" letter, such modifications or deletions
as may be required under Statement on Auditing Standards No. 35) and, in
the case of the accountants' letter, such other financial matters, and, in
the case of the legal opinion, such other legal matters, as News America
(or the underwriters, if any) may reasonably request;
(vii) notify News America and the managing
underwriter or underwriters, if any, promptly and confirm such advice
in writing promptly thereafter:
(v) when the registration statement, the
prospectus or any prospectus supplement related thereto or post-effective
amendment to the registration statement has been filed, and, with respect
to the registration statement or any post-effective amendment thereto, when
the same has become effective;
(w) of any request by the SEC for amendments or
supplements to the registration statement or the prospectus or for
additional information;
(x) of the issuance by the SEC of any stop order
suspending the effectiveness of the registration statement or the
initiation of any proceedings by any Person for that purpose;
(z) of the receipt by PLD of any notification
with respect to the suspension of the qualification of any Registrable
Securities for sale under the securities or blue sky laws of any
jurisdiction or the initiation or threat of any proceeding for such
purpose; and
(viii) notify News America at any time when a
prospectus relating thereto is required to be delivered under the
Securities Act, upon PLD's discovery that, or upon the happening of
any event as a result of which, the prospectus included in such
registration statement, as then in effect, includes an untrue
statement of a material fact or omits to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances then
existing, and at the request of News America promptly prepare and
furnish to News America and each underwriter, if any, a reasonable
number of copies of a supplement to or an amendment of such prospectus
as may be necessary so that, as thereafter delivered to the purchasers
of such securities, such prospectus shall not include an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading in the light of the circumstances then existing;
(ix) use its best efforts to obtain the withdrawal of
any order suspending the effectiveness of the registration statement
at the earliest possible moment; and
(x) otherwise use its best efforts to comply with all
applicable rules and regulations of SEC, and make available to its
security holders, as soon as reasonably practicable, an earnings
statement covering the period of at least twelve months, but not more
than eighteen months, beginning with the first day of PLD's first full
calendar month after the effective date of such registration
statement, which earnings statement shall satisfy the provisions of
Section 11(a) of the Securities Act and Rule 158 thereunder, and will
furnish to News America at least five business days prior to the
filing thereof a copy of any amendment or supplement to such
registration statement or prospectus and shall not file any thereof to
which News America shall have reasonably objected on the grounds that
such amendment or supplement does not comply in all material respects
with the requirements of the Securities Act or of the rules or
regulations thereunder.
PLD will not file any registration statement or amendment thereto
hereunder or any prospectus or any supplement thereto (including such
documents incorporated by reference and proposed to be filed after the
initial filing of the registration statement) to which News America shall
reasonably object, provided that PLD may file such document in a form
required by law or upon the advice of its counsel.
News America agrees by acquisition of such Registrable Securities
that, upon receipt of any notice from PLD of the occurrence of any event of
the kind described in subdivision (viii) of this Section 7.3, it will
forthwith discontinue its disposition of Registrable Securities pursuant to
the registration statement relating to such Registrable Securities until
its receipt of the copies of the supplemented or amended prospectus
contemplated by subdivision (viii) of this Section 7.3 and, if so directed
by PLD, will deliver to PLD (at PLD's expense) all copies, other than
permanent file copies, then in its possession of the prospectus relating to
such Registrable Securities current at the time of receipt of such notice.
In the event PLD shall give any such notice, the period mentioned in
paragraph (ii) of this Section 7.3 shall be extended by the length of the
period from and including the date when News America shall have received
such notice to the date on which each such seller has received the copies
of the supplemented or amended prospectus contemplated by paragraph (viii)
of this Section 7.3.
7.4. Provision of Information; Transfer of Shares After
Registration.
(a) News America shall, prior to the filing of any
Registration Statement pursuant to this Agreement, provide PLD in writing
with such information specified in Item 507 of Regulation S-K under the
Securities Act and any other similar information reasonably requested by
PLD for use in connection with such Registration Statement or any related
prospectus or preliminary prospectus. News America shall promptly furnish
to PLD all information required to be disclosed in order to make the
information previously furnished to PLD not materially misleading.
(b) News America agrees that it will not effect any
disposition of the Registrable Securities that would constitute a sale
within the meaning of the Securities Act except as contemplated in the
Registration Statement or as otherwise in compliance with applicable
securities laws, including, without limitation, to the extent applicable,
the prospectus delivery requirements of the Securities Act.
7.5. Indemnification.
(a) Indemnification by PLD. In the event of any
registration of any securities of PLD under the Securities Act, PLD will,
and hereby does agree to, indemnify and hold harmless News America against
any losses, claims, damages or liabilities, joint or several, to which News
America or any director or officer of News America or underwriter or
controlling person may become subject under the Securities Act or
otherwise, insofar as such losses, claims, damages or liabilities (or
actions or proceedings, whether commenced or threatened, in respect
thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in any registration
statement under which such securities were registered under the Securities
Act, any preliminary prospectus, final prospectus or summary prospectus
contained therein, or any amendment or supplement thereto, or any omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading. Such
indemnification shall be subject to customary terms and provisions
governing indemnification in transactions of this type; provided, however,
that PLD shall not be liable in any such case to the extent that such loss,
claim, damages or liability arises out of, or is based upon (i) an untrue
statement of a material fact made in such Registration Statement, or any
omission of a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they
were made, not misleading, made in reliance upon and in conformity with
written information furnished to PLD by or on behalf of News America
specifically for use in preparation of such Registration Statement, (ii)
the failure of News America to comply with the covenants and agreements
contained in Sections 7.3 or 7.4(a) hereof respecting sale of the
Registrable Securities or (iii) any untrue statement of a material fact, or
any omission of a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which
they were made, not misleading, in any prospectus that is corrected in any
subsequent prospectus that was delivered to News America prior to the
pertinent sale or sales by News America.
(b) Indemnification by News America. PLD may require, as a
condition to including any Registrable Securities in any registration
statement filed pursuant to Section 7.3, that PLD shall have received an
undertaking satisfactory to it from News America of such Registrable
Securities, to indemnify and hold harmless (in the same manner and to the
same extent as set forth in subdivision (a) of this Section 7.5) PLD, each
director of PLD each officer of PLD and each other person, if any, who
controls PLD within the meaning of the Securities Act, with respect to (i)
any statement or alleged statement in or omission or alleged omission from
such registration statement, any preliminary prospectus, final prospectus
or summary prospectus contained therein, or any amendment or supplement
thereto, if such statement or alleged statement or omission or alleged
omission was made in reliance upon and in conformity with written
information furnished to PLD through an instrument duly executed by News
America specifically stating that it is for use in the preparation of such
registration statement, preliminary prospectus, final prospectus, summary
prospectus, amendment or supplement, (ii) the failure of News America to
comply with the covenants and agreements contained in the last paragraph of
Section 7.3 or in Section 7.4(a) hereof respecting sale of the Registrable
Securities or (iii) any untrue statement of a material fact, or any
omission of a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they
were made, not misleading, in any prospectus that is corrected in any
subsequent prospectus that was delivered to News America prior to the
pertinent sale or sales by News America.
ARTICLE VIII
TERMINATION AND ABANDONMENT
8.1. Termination.
(a) This Agreement may be terminated at any time prior to
the Closing Date, by mutual written consent of News America and PLD.
(b) This Agreement may be terminated by News America, on
the one hand, or PLD, on the other hand, if the transactions contemplated
hereby shall not have been consummated on or before June 30, 1998;
provided, however, that the right to terminate this Agreement pursuant to
this Section 8.1(b) shall not be available to any party whose failure to
perform any of its covenants or obligations under this Agreement has been
the cause of or resulting in the failure of the transactions contemplated
by this Agreement to occur on or prior to the aforesaid date.
(c) This Agreement may be terminated by either News
America, on the one hand, or PLD, on the other hand, if (i) any
governmental or regulatory body, the consent of which is a condition to the
obligations of PLD and News America to consummate the transactions
contemplated hereby, shall have determined not to grant its consent and all
appeals of such determination shall have been taken and have been
unsuccessful, or (ii) any court of competent jurisdiction shall have issued
an order, judgment or decree permanently restraining, enjoining or
otherwise prohibiting the transactions contemplated hereby and such order,
judgment or decree shall have become final and nonappealable.
(d) This Agreement may be terminated by News America, on
the one hand, or PLD, on the other hand, if there has been a material
violation or breach of any agreement, representation or warranty contained
in this Agreement which violation or breach has not been waived by the non-
breaching party.
8.2. Procedure and Effect of Termination. In the event of
termination of this Agreement and abandonment of the transactions
contemplated hereby by either or both of the parties pursuant to Section
8.1, written notice thereof shall forthwith be given by the terminating
party to the other party and this Agreement shall terminate and the
transactions contemplated hereby shall be abandoned, without further action
by any of the parties hereto without prejudice to any claims of a party to
this Agreement arising prior to the date of such termination in respect of
any breach of any representation, warranty or agreement contained in this
Agreement and provided that (a) the provisions of Sections 5.4 and Article
X (except for section 10.4) hereof shall survive such termination, and (b)
that regardless of such termination the provisions of Article IX hereof
shall continue with respect to any such claims. If this Agreement is
terminated as provided herein all filings, applications and other
submissions made pursuant to this Agreement, to the extent practicable,
shall be withdrawn from the agency or other person to which they were made.
ARTICLE IX
SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION
9.1. Survival of Representations. All representations,
warranties and agreements made by PLD or News America in this Agreement
shall survive the Closing until one (1) year after the Closing.
9.2. Statements as Representations. PLD's Written Disclosure
Materials and any statements contained herein made by News America shall be
deemed representations and warranties within the meaning of Section 9.1
hereof.
9.3. PLD's Indemnification of News America. Subject to the
conditions of this Article VIII, PLD hereby agrees that it shall indemnify,
defend and hold harmless News America and any parent, subsidiary and
affiliate of News America (collectively, the "News America Group") from and
against all demands, claims, actions or causes of action, assessments,
losses, damages, liabilities, costs and expenses, including, without
limitation, interest, penalties and attorneys' fees and expenses
(collectively, "Damages"), asserted against, resulting to, imposed upon or
incurred by any of News America Group, directly or indirectly, arising out
of or resulting from a breach of any representation, warranty or agreement
of PLD contained in or made pursuant to this Agreement or any facts or
circumstances constituting such a breach (collectively, "News America's
Indemnifiable Claims"); provided, however, that the indemnification
obligation of PLD with respect to any inaccuracy in any of the
representations or warranties made by PLD in this Agreement shall arise
only in the event that PLD had knowledge of such inaccuracy on or before
the Closing; provided, further, that for purposes of this Agreement
"knowledge" shall mean knowledge on the part of any member of management of
PLD or knowledge of such circumstances that would lead a person not
negligent to investigate and, more likely than not, obtain actual
knowledge.
9.4. News America's Indemnification of PLD. Subject to the
conditions of this Article VIII, News America hereby agrees that it shall
indemnify, defend and hold harmless PLD and any parent, subsidiary and
affiliate of PLD (collectively, the "PLD Group") from and against all
Damages asserted against, resulting to, imposed upon or incurred by any of
the PLD Group, directly or indirectly, arising out of or resulting from a
breach of any representation, warranty or agreement of News America
contained in or made pursuant to this Agreement or any facts or
circumstances constituting such a breach ("PLD Indemnifiable Claims"; PLD's
Indemnifiable Claims and News America's Indemnifiable Claims are
collectively referred to herein as the "Indemnifiable Claims"); provided,
however, that the indemnification obligation of News America with respect
to any inaccuracy in any of the representations or warranties made by News
America in this Agreement shall arise only in the event that News America
had knowledge of such inaccuracy on or before the Closing; provided,
further, that for purposes of this Agreement "knowledge" shall mean
knowledge on the part of any member of management of News America or
knowledge of such circumstances that would lead a person not negligent to
investigate and, more likely than not, obtain actual knowledge.
9.5. Conditions of Indemnification. The obligations and
liabilities of PLD under Section 9.3 or News America under Section 9.4,
respectively, with respect to Indemnifiable Claims resulting from the
assertion of liability by third parties shall be subject to the following
terms and conditions:
(a) The member of the News America Group or the PLD Group,
as the case may be, asserting the existence of an Indemnifiable Claim (the
"Indemnified Party") will give notice of any such Indemnifiable Claim to
the party from whom Indemnification is sought (the "Indemnifying Party"),
and the Indemnifying Party shall undertake the defense thereof by
representation of their choosing, and will consult with the Indemnified
Party concerning such defense during the course thereof.
(b) In the event that the Indemnifying Party within a
reasonable time after notice of any Indemnifiable Claim, fails to defend,
the Indemnified Party against which such Indemnifiable Claim has been
asserted will (upon further notice to the Indemnifying Party) have the
right to undertake the defense, compromise or settlement of such
Indemnifiable Claim on behalf of and for the account and risk of the
Indemnifying Party.
(c) Anything in this Section 9.5 to the contrary
notwithstanding, (i) if there is a reasonable probability that an
Indemnifiable Claim may materially and adversely affect the Indemnified
Party other than as a result of money damages or other money payments, the
Indemnified Party shall have the right to defend, compromise or settle such
Indemnifiable Claim, and (ii) the Indemnifying Party shall not, without the
Indemnified Party written consent, settle or compromise any Indemnifiable
Claim or consent to entry of any judgment in respect thereof, unless (A)
the Indemnifying Party delivers to the Indemnified Party in advance its
written agreement satisfactory to the Indemnified Party which provides that
amounts paid and incurred or to be incurred by the Indemnified Party in
connection with such Indemnifiable Claim shall be repaid promptly by the
Indemnifying Party to the Indemnified Party (subject to the limitations of
this Article VIII), and (B) such settlement, compromise or consent includes
as an unconditional term thereof the giving by the claimant or the
plaintiff to the Indemnified Party and/or such member, as the case may be,
a release from all liability in respect to such Indemnifiable Claim.
9.6. Cushion. The provisions for indemnity contained in Section
9.3 and Section 9.4 hereof shall only be effective with respect to an
Indemnifiable Claim (or, if more than one Indemnifiable Claim is asserted,
with respect to all Indemnifiable Claims) to the extent the amount (or
aggregate amount, in the case of more than one Indemnifiable Claim) of
damages sustained in connection therewith exceeds One Hundred Thousand
dollars (USD$100,000), but to the extent that the amount or amounts of
damages in respect of Indemnifiable Claims exceeds $100,000, the indemnity
provisions hereunder shall apply to all such damages, without regard to the
$100,000 level.
9.7. Limitation of Liability. Anything in this Agreement to the
contrary notwithstanding, the liability of an Indemnifying Party to
indemnify an Indemnified Party against any damages sustained in connection
with any Indemnifiable Claim shall be limited to Indemnifiable Claims as to
which written notice shall have been given to the Indemnifying Party on or
prior to the earlier of the first anniversary date of the Closing Date or
public release of audited financials of PLD covering the fiscal year ended
December 31, 1998, whether or not the Indemnified Party has actually
settled or incurred any expense with respect to such Damages. Furthermore,
anything in this Agreement to the contrary notwithstanding, if such
Indemnifiable Claim relates to a representation or warranty made by (a)
News America, the amount of liability shall be limited to $100,000 and (b)
PLD, the amount of liability shall be converted to PLD Common Stock and
issued to News America at the same rate/value as the PLD shares issued to
News America by PLD pursuant to Section 1.1 hereof, provided that the
amount of liability of PLD shall be limited to twenty million U.S. dollars
($20,000,000). In the event that the rules of any stock exchange upon
which the PLD Common Stock is then traded, or any interdealer quotation
system upon which quotations for the PLD Common Stock are then available,
shall not permit the issuance of PLD Common Stock without either the
approval of shareholders of PLD or the receipt of some other approval, then
in satisfaction of its liability to indemnify pursuant to this Article IX,
PLD shall issue the maximum number of shares of PLD Common Stock as can
then be issued in accordance with such rules, and shall issue in respect of
the remainder of such liability shares of preferred stock having such terms
and conditions as may be agreed upon between News America and PLD, such
preferred stock to be convertible into PLD Common Stock at such time as any
requisite shareholder or other approval is obtained.
9.8. Remedies Cumulative. The remedies provided herein shall be
cumulative and shall not preclude the assertion by News America or PLD of
any other rights or the seeking of any other remedies against the other
party, as the case may be.
9.9. Assignment of Certain Representations, Warranties and
Indemnification Obligations. In lieu of making any representations or
warranties with respect to the Holdings Shares being sold to and exchange
with PLD hereunder, News America hereby assigns to the benefit of PLD, its
successors and assigns, the representations, warranties and agreements made
by C&W in the Stock Purchase Agreement with respect to the Holdings Shares
and its indemnification obligations under such agreement, and agrees that
PLD has the right to rely upon such representations, warranties and
agreements, and enforce such indemnification obligations, as fully as if it
were a party to the Stock Purchase Agreement. PLD acknowledges and agrees
that its sole recourse with respect to the Holdings Shares is to seek
indemnification from C&W with respect thereto and further agrees that News
America shall have no liability therefor.
ARTICLE X
MISCELLANEOUS PROVISIONS
10.1. Amendment and Modification. Subject to applicable law,
this Agreement may be amended, modified or supplemented only by written
agreement signed by all of the parties hereto.
10.2. Waiver of Compliance; Consents. Except as otherwise
provided in this Agreement, any failure of any of the parties to comply
with any obligation, covenant, agreement or condition herein may be waived
by the party entitled to the benefits thereof only by a written instrument
signed by the party granting such waiver, but such waiver shall not operate
as a waiver of, or estoppel with respect to, any subsequent or other
failure.
10.3. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed effectively given upon personal
delivery to the party to be notified, on the next Business Day after
delivery to a recognized overnight courier service, upon confirmation of
receipt of a facsimile transmission, or five days after deposit with the
United States Post Office, by registered or certified mail (return receipt
requested), postage prepaid, to the parties at the following addresses (or
at such other address for a party as shall be specified by like notice;
provided that notices of a change of address shall be effective only upon
receipt thereof):
If to PLD, to:
PLD Telekom Inc.
680 Fifth Avenue
24th Floor
New York, New York 10019
Facsimile: (212) 262-8870
Attention: James Hatt
If to News America, to:
News America Incorporated
1211 Avenue of the Americas
New York, New York 10036
Facsimile: (212) 768-2029
Attention: General Counsel
(with a copy to:
Skadden, Arps, Slate, Meagher & Flom LLP
919 Third Avenue
New York, New York 10022
Facsimile: (212) 735-2000
Attention: Alan G. Straus, Esq.)
10.4. Assignment. This Agreement and all of the provisions
hereof shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and permitted assigns, but neither this
Agreement nor any of the rights, interests or obligations hereunder shall
be assigned by any party hereto, including by operation of law without the
prior written consent of the other party, nor is this Agreement intended to
confer upon any other person except the parties hereto any rights or
remedies hereunder; provided, however, that (a) PLD will have the right, at
any time at or prior to the Closing, to designate in writing, in accordance
with applicable law, one or more of its Affiliates to purchase, in whole or
in part, the Holdings Shares on the terms set out in this Agreement, and
PLD shall remain jointly and severally liable with its designee(s) under
this Agreement following such designation, (b) News America will have the
right, at any time at or prior to the Closing, to designate in writing, in
accordance with applicable law, one or more of its affiliates to purchase,
in whole or in part, the New PLD Shares on the terms set out in this
Agreement, and News America shall remain jointly and severally liable with
its designee(s) under this Agreement following such designation and
(c) News America shall have the right, at its sole discretion, to assign to
ZAO LogoVAZ ("LogoVAZ") its rights to purchase one-half of the New PLD
Shares (and, if such rights are exercised, such rights shall be exercised
by News America and LogoVAZ concurrently as to the entire portion of the
New PLD Shares); provided, that it shall be a condition to any assignment
under clauses (b) or (c) hereof that the assignee represent and warrant to
PLD as to the matters set forth in Section 4.6, and otherwise agrees to be
bound by the terms of this Agreement as if such assignee had been a party
to this Agreement.
10.5. Confidentiality. Each of the Parties hereto will hold,
and will use its reasonable, good faith efforts to cause its respective
shareholders, partners, members, directors, officers, employees,
accountants, counsel, consultants, agents and financial or other advisors
(collectively "Agents") to hold, in confidence all information (whether
oral or written), including this Agreement and the documents contemplated
herein, concerning the transactions contemplated by this Agreement
furnished to such Party by or on behalf of any other Party in connection
with such transactions, unless legally compelled (by deposition,
interrogatory, request for documents, subpoena, civil investigative demand
or similar process, or by order of a court or tribunal of competent
jurisdiction, or in order to comply with applicable rules or requirements
of any stock exchange, government department or agency or other regulatory
authority, or by requirements of any securities law or regulation or other
legal requirement) to disclose any such information or documents, and
except to the extent that such information or documents can be shown to
have been (a) previously known on a nonconfidential basis by such Party,
(b) in the public domain through no fault of such Party or (c) acquired by
such Party on a nonconfidential basis from sources not known by such Party
to be bound by any obligation of confidentiality in relation thereto.
Notwithstanding the foregoing provisions of this Section 10.5, each Party
may disclose such information to its Agents in connection with the
transactions contemplated by this Agreement or any of the other ancillary
Agreements so long as such Agents are informed by such Party of the
confidential nature of such information and are required by such Party to
treat such information confidentially, and to certain governmental agencies
in connection with the procurement of the governmental authorizations
contemplated by this Agreement. The obligation of each Party to hold any
such information in confidence shall be satisfied if such Party exercises
the same care with respect to such information as it would take to preserve
the confidentiality of its own similar information. If this Agreement is
terminated, each Party will, and will use its reasonable, good faith
efforts to cause its respective Agents, to destroy or deliver to the other
Party, upon request, all documents and other materials, and all copies
thereof, obtained by such Party or on its behalf from the other Party
hereto in connection with this Agreement that are subject to such
confidence.
10.6. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York (regardless
of the laws that might otherwise govern under applicable New York
principles of conflicts of law) as to all matters, including but not
limited to matters of validity, construction, effect, performance and
remedies.
10.7. Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
10.8. Interpretation. The article and section headings
contained in this Agreement are solely for the purpose of reference, are
not part of the agreement of the parties and shall not in any way affect
the meaning or interpretation of this Agreement. As used in this
Agreement, (a) the term "person" shall mean and include an individual, a
partnership, a joint venture, a corporation, a trust, an unincorporated
organization and a governmental entity or any department or agency thereof,
(b) the term "subsidiary" when used in reference to any other person shall
mean any corporation of which outstanding securities having ordinary voting
power to elect a majority of the Board of Directors of such corporation are
owned directly or indirectly by such other person and (c) the terms
"affiliate" and "parent" shall have the meanings set forth in Rule 12b-2 of
the Exchange Act.
10.9. Entire Agreement. This Agreement, including the
documents, schedules and certificates referred to herein, embody the entire
agreement and understanding of the parties hereto in respect of the
transactions contemplated by this Agreement. There are no restrictions,
promises, representations, warranties, covenants or undertakings, other
than those expressly set forth or referred to herein or therein. This
Agreement supersedes all prior agreements and understandings between the
parties with respect to such transactions.
IN WITNESS WHEREOF, PLD and News America have caused this
agreement to be signed by their respective duly authorized officers as of
the date first above written.
NEWS AMERICA INCORPORATED
By: /s/ JOHN P. NALLEN
--------------------------------
Name: JOHN P. NALLEN
Title: SENIOR VICE PRESIDENT
PLD TELEKOM INC.
By: /s/ JAMES R.S. HATT
--------------------------------
Name: JAMES R.S. HATT
Title: DIRECTOR
EXHIBIT 4
PLD TELEKOM INC.
680 Fifth Avenue
New York, New York 10019
April 19, 1998
News America Incorporated
1211 Avenue of the Americas
New York, New York 10036
Re: Directors Nomination Agreement
Gentlemen:
Reference is made to (i) that certain Stock Purchase Agreement,
dated April 19, 1998 (the "Stock Purchase Agreement"), by and between Cable
and Wireless plc, a public limited company organized under the laws of
England ("C&W"), and News America Incorporated, a corporation organized
under the laws of the State of Delaware ("News America"), relating to the
purchase by News America from C&W of the PLD Shares, the PLD Warrant, the
CIBBV Exchange Shares and the Holdings Shares (each, as defined in the
Stock Purchase Agreement and collectively, the "PLD Interest"), which PLD
Interest shall, immediately upon the consummation of the transactions
contemplated by the Stock Purchase Agreement and the Asset Exchange
Agreement (as defined below), be assigned by News America to NewsLogo LLC,
a Delaware limited liability company that is a newly-formed indirect
subsidiary of News America (the "Venture), and (ii) that certain Asset
Exchange Agreement, dated April 19, 1998, by and between PLD Telekom Inc.,
a Delaware corporation ("PLD") and News America Incorporated (the "Asset
Exchange Agreement"; the Asset Exchange Agreement and the Stock Purchase
Agreement are collectively referred to herein as the "Agreements") relating
to the exchange by News America with PLD of the Holdings Shares for the New
PLD Shares (as defined in the Asset Exchange Agreement). Upon the
consummation of the transactions contemplated by the Stock Purchase
Agreement and the Asset Exchange Agreement and the assignment referred to
above, the Venture will own approximately thirty-eight percent (38%) of the
issued and outstanding capital stock of PLD.
In recognition of the significant shareholding position that will
be held by the Venture after consummation of the transactions contemplated
by the Stock Purchase Agreement and the Asset Exchange Agreement, we have
agreed with you as follows:
1. Designation and Number of Directors.
(a) Simultaneously with the closing of the Agreements, PLD shall
use its best efforts to take, or cause to be taken, all action, and to do,
or cause to be done, all things necessary and reasonably appropriate (i) to
cause the Board of Directors of PLD to set the size of the Board at ten
(10) and (ii) to cause the Board to elect as directors four (4) individuals
designated by the Venture.
(b) Thereafter, throughout the term of this Agreement, PLD will
nominate and solicit proxies (and if properly executed and otherwise valid,
cause such proxies to be voted in accordance with the instructions thereon)
for election as directors at each annual meeting of stockholders (or, if
applicable, at any special meeting of stockholders) of PLD, that number of
individuals designated by the Venture.
(c) The number of individuals that the Venture shall be
permitted to designate will be based upon the aggregate percentage of the
total issued and outstanding shares of PLD's common stock (the "Total
Shares Outstanding") owned of record and beneficially by the Venture, and
The News Corporation Limited and its subsidiaries and affiliates, together,
as follows:
Number of designees Percentage of Total Shares Outstanding Owned
4 23% or over
3 15% 22.99%
2 10% 14.99%
1 5%-9.9%
0 below 5%
(d) In the event that the number of directors comprising the
entire Board shall be increased beyond ten (10), the number of directors
that the Venture shall be entitled to designate based on its share
ownership shall be appropriately and proportionately adjusted, any number
resulting from such adjustment which is not a whole number being rounded up
to the nearest whole number.
(e) Any person who is designated by the Venture and subsequently
elected as a director of PLD shall be referred to herein as a "Venture
Director".
2. Removal and Replacement of Directors. (a) The Venture shall
be entitled at any time and for any reason (or for no reason) to designate
a Venture Director for removal, and at any meeting of stockholders called
for the purpose of voting on the removal of directors, PLD shall use its
best efforts to take, or cause to be taken, all action, and to do, or cause
to be done, all things necessary and reasonably appropriate to cause the
Board, or the stockholders of PLD, as the case may be, to remove such
Venture Director.
(b) If, prior to his or her election to the Board pursuant to
the terms of this letter agreement, an individual designated by Venture
shall be unable or unwilling to serve as a director of PLD, the Venture
shall be entitled to nominate a replacement who shall then be designated
for purposes of this letter agreement. If, following election to the Board
pursuant to this letter agreement, a Venture Director shall resign or be
removed or be unable to serve for any reason prior to the expiration of his
or her term as a director of PLD, the Venture shall notify the Board in
writing of a replacement director, and PLD shall use its best efforts to
cause the Board to take all action necessary or appropriate to cause such
replacement director to be elected as a director of PLD.
3. Term. This letter agreement shall commence on the date
hereof and remain in force for a period of ten (10) years from the date
hereof.
4. Miscellaneous.
(a) Amendment and Modification. Subject to applicable law, this
Agreement may be amended, modified or supplemented only by written
agreement signed by the parties hereto.
(b) Waiver of Compliance; Consents. Except as otherwise
provided in this Agreement, any failure of either of the parties hereto to
comply with any obligation, covenant, agreement or condition herein may be
waived by the party entitled to the benefits thereof only by a written
instrument signed by the party granting such waiver, but such waiver shall
not operate as a waiver of, or estoppel with respect to, any subsequent or
other failure.
The parties agree that proportional representation on the Board
of Directors of PLD at least as favorable to the Venture as is set forth in
this Agreement is of the essence of this Agreement, and the parties further
agree that if the specific terms of this Agreement shall be unable to be
implemented by reason of the rules of any regulatory or supervisory body
having jurisdiction over PLD or the PLD Common Stock, the parties will
negotiate with each other in good faith to implement an alternative system
of proportional representation as near as practicable to the arrangement
set forth herein.
(c) Notices. All notices and other communications hereunder
shall be in writing and shall be deemed given if delivered personally or by
facsimile transmission, telexed or mailed by registered or certified mail
(return receipt requested), postage prepaid, to the parties at the
following addresses (or at such other address for a party as shall be
specified by like notice; provided that notice of a change of address shall
be effective only upon receipt thereof):
(i) If to Buyer, to:
News America Incorporated
1211 Avenue of the Americas
New York, New York 10036
Facsimile: (212) 768-2029
Attention: General Counsel
(with a copy to:
Skadden, Arps, Slate, Meagher & Flom LLP
919 Third Avenue
New York, New York 10022
Facsimile: (212) 735-2000
Attention: Alan G. Straus, Esq.)
(ii) If to PLD, to:
PLD Telekom Inc.
680 Fifth Avenue
24th Floor
New York, New York 10019
Facsimile: (212) 262-8870
Attention: James Hatt
(d) Assignment. This Agreement and all of the provisions hereof
shall be binding upon and inure to the benefit of the parties hereto and
their respective successors and permitted assigns.
(e) Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware (regardless
of the laws that might otherwise govern under applicable Delaware
principles of conflicts of law) as to all matters, including but not
limited to matters of validity, construction, effect, performance and
remedies.
(f) Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
(g) Interpretation. The article and section headings contained
in this Agreement are solely for the purpose of reference, are not part of
the agreement of the parties and shall not in any way affect the meaning or
interpretation of this Agreement.
(h) Entire Agreement. This Agreement, including the documents,
schedules and certificates referred to herein, embody the entire agreement
and understanding of the parties hereto in respect of the transactions
contemplated by this Agreement. There are no restrictions, promises,
representations, warranties, covenants or undertakings, other than those
expressly set forth or referred to herein or therein. This Agreement
supersedes all prior agreements and understandings between the parties with
respect to such transactions.
If this letter correctly sets forth the agreement between us,
please countersign in the space provided below, whereupon this letter shall
become a binding agreement between us.
Very truly yours,
PLD TELEKOM INC.
By: /s/ JAMES R.S. HATT
-----------------------
Name: JAMES R.S. HATT
Title: DIRECTOR
Accepted and agreed to
as of the date first above written:
NEWS AMERICA INCORPORATED
By: /s/ JOHN P. NALLEN
----------------------
Name: JOHN P. NALLEN
Title: SENIOR VICE PRESIDENT
EXHIBIT 5
COMBINED AMENDMENT TO
STOCK AND ASSET PURCHASE AGREEMENTS
COMBINED AMENDMENT TO STOCK AND ASSET PURCHASE AGREEMENTS (this
"Amendment"), dated June 29, 1998, by and among News America Incorporated,
a corporation organized under the laws of the State of Delaware ("Buyer"),
News PLD LLC, a limited liability company organized under the laws of the
State of Delaware ("News PLD LLC"), all of the membership interests in
which are owned directly or indirectly by Buyer, Cable and Wireless plc, a
company registered under the laws of England under the number 238525
("C&W") and PLD Telekom Inc., a Delaware corporation ("PLD"). All
capitalized terms used herein and not otherwise defined shall have the
respective meanings given to such terms in the Stock Purchase Agreement (as
defined below).
W I T N E S S E T H:
WHEREAS, Buyer and C&W have entered into that certain Stock
Purchase Agreement, dated as of April 19, 1998 (the "Stock Purchase
Agreement"); and
WHEREAS, Buyer has assigned its rights under the Stock Purchase
Agreement to its directly and indirectly wholly owned subsidiary News PLD
LLC; and
WHEREAS, pursuant to Section 7.1 (b) of the Stock Purchase
Agreement, the Stock Purchase Agreement may be terminated by Buyer, on the
other hand, or C&W, on the other hand, if the transactions contemplated
thereby should not have been consummated on or before June 30, 1998; and
WHEREAS, the parties hereto have agreed to amend the Stock
Purchase Agreement to extend such termination date to August 7, 1998; and
WHEREAS, C&W and PLD have entered into that certain Stock
Purchase Agreement, dated as of April 19, 1998 (the "C&W/PLD Stock Purchase
Agreement"), and Buyer and PLD have entered into that certain Asset
Exchange Agreement, dated as of April 19, 1998 (the "Asset Exchange
Agreement"), which agreements are intended to be consummated substantially
simultaneously with the consummation of the transactions contemplated by
the Stock Purchase Agreement, and for convenience the parties hereto and
thereto have agreed to combine into this single instrument their agreements
to extend the termination date under all such agreements to August 7, 1998;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements hereinafter set forth, the parties, intending to
be legally bound, hereby agree as follows:
Section 1. Amendment and Modification of the Stock Purchase
Agreement, C&W/PLD Stock Purchase Agreement and Asset
Exchange Agreement.
(a) In Section 7.1(b) of the Stock Purchase Agreement the date
"June 30, 1998" referred to therein is hereby deleted and the date "August
7, 1998" is inserted in lieu thereof.
(b) In recognition of the assignment to News PLD LLC by Buyer of
its rights under the Stock Purchase Agreement in accordance with Section
9.4 thereof, News PLD LLC is hereby added as a party to the Stock Purchase
Agreement, and it shall be constituted with all such rights with respect
thereto as would have been appurtenant had it been an original signatory
thereto, provided always that such assignment satisfies the requirements of
the proviso to Section 9.4(a) of the Stock Purchase Agreement and the
requirements relating to the ownership of News PLD LLC as the Buyer's
designee under that Section 9.4(a) and does not in any way extend the
rights of the designee as contemplated thereby.
(c) In Section 7.1(b) of the C&W/PLD Stock Purchase Agreement
the date "June 30, 1998" referred to therein is hereby deleted and the date
"August 7, 1998" is inserted in lieu thereof.
(d) In Section 8.1(b) of the Asset Exchange Agreement the date
"June 30, 1998" referred to therein is hereby deleted and the date "August
7, 1998" is inserted in lieu thereof.
Section 2. No Other Amendments
(a) Except as expressly modified by this Amendment, the terms and
conditions of the Stock Purchase Agreement, C&W/PLD Stock Purchase
Agreement and Asset Exchange Agreement shall remain in full force and
effect.
IN WITNESS WHEREOF, Buyer, News PLD LLC, C&W and PLD have caused
this Amendment to be signed by their respective duly authorized officers as
of the date first above written.
NEWS AMERICA INCORPORATED
By: /s/ LAWRENCE JACOBS
--------------------------
Name: LAWRENCE JACOBS
Title: SENIOR VICE PRESIDENT AND
DEPUTY GENERAL COUNSEL
NEWS PLD LLC
By: /s/ JANET L. NOVA
--------------------------
Name: JANET L. NOVA
Title: PRESIDENT AND
SECRETARY
CABLE AND WIRELESS PLC
By: /s/ PETA WILSON
--------------------------
Name: PETA WILSON
Title: SENIOR AND REGIONAL LEGAL
ADVISOR
PLD TELEKOM INC.
By: /s/ E. CLIVE ANDERSON
--------------------------
Name: E. CLIVE ANDERSON
Title: SENIOR VICE PRESIDENT,
SECRETARY AND
GENERAL COUNSEL
EXHIBIT 6
SECOND COMBINED AMENDMENT TO
STOCK AND ASSET PURCHASE AGREEMENTS
SECOND COMBINED AMENDMENT TO STOCK AND ASSET PURCHASE AGREEMENTS
(this "Amendment"), dated August 7, 1998, by and among News America
Incorporated, a corporation organized under the laws of the State of
Delaware ("Buyer"), News PLD LLC, a limited liability company organized
under the laws of the State of Delaware ("News PLD LLC"), all of the
membership interests in which are owned directly or indirectly by Buyer,
Cable and Wireless plc, a company registered under the laws of England
under the number 238525 ("C&W") and PLD Telekom Inc., a Delaware
corporation ("PLD").
W I T N E S S E T H:
WHEREAS, (i) Buyer and C&W have entered into that certain Stock
Purchase Agreement, dated as of April 19, 1998 (the "Stock Purchase
Agreement"), (ii) C&W and PLD have entered into that certain Stock Purchase
Agreement, dated as of April 19, 1998 (the "C&W/PLD Stock Purchase
Agreement"), and (iii) Buyer and PLD have entered into that certain Asset
Exchange Agreement, dated as of April 19, 1998 (the "Asset Exchange
Agreement," and together with the Stock Purchase Agreement and the C&W/PLD
Stock Purchase Agreement, the "Acquisition Agreements"), which Acquisition
Agreements provide that any of the parties hereto may terminate any of the
Acquisition Agreements to which it is a party if the transactions
contemplated by such Acquisition Agreement should not have been consummated
on or before June 30, 1998 (the "Termination Date"); and
WHEREAS, the parties hereto have entered into that certain
Combined Amendment to Stock and Asset Purchase Agreements, dated June 29,
1998 (the "Combined Amendment"), extending the Termination Date to August
7, 1998; and
WHEREAS, the parties hereto have agreed to amend the Combined
Amendment to further extend the Termination Date to August 17, 1998;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements hereinafter set forth, the parties, intending to
be legally bound, hereby agree as follows:
Section 1. Amendment and Modification of the Combined Amendment.
(a) In Section 1(a) of the Combined Amendment the date "August 7,
1998" referred to therein is hereby deleted and the date "August 17, 1998"
is inserted in lieu thereof.
(b) In Section 1(c) of the Combined Amendment the date "August 7,
1998" referred to therein is hereby deleted and the date "August 17, 1998"
is inserted in lieu thereof.
(c) In Section 1(d) of the Combined Amendment the date "August 7,
1998" referred to therein is hereby deleted and the date "August 17, 1998"
is inserted in lieu thereof.
Section 2. No Other Amendments
(a) Except as expressly modified by this Amendment, the terms and
conditions of the Stock Purchase Agreement, C&W/PLD Stock Purchase
Agreement and Asset Exchange Agreement shall remain in full force and
effect.
IN WITNESS WHEREOF, Buyer, News PLD LLC, C&W and PLD have caused
this Amendment to be signed by their respective duly authorized officers as
of the date first above written.
NEWS AMERICA INCORPORATED
By: /s/ LAWRENCE JACOBS
----------------------------
Name: LAWRENCE JACOBS
Title: SENIOR VICE PRESIDENT AND
DEPUTY GENERAL COUNSEL
NEWS PLD LLC
By: /s/ JANET L. NOVA
----------------------------
Name: JANET L. NOVA
Title: PRESIDENT AND SECRETARY
CABLE AND WIRELESS PLC
By: /s/ ROGER MORTIMER
----------------------------
Name: ROGER MORTIMER
Title: DIRECTOR, GLOBAL
BUSINESSES
PLD TELEKOM INC.
By: /s/ S. P. EDWARDS
----------------------------
Name: S. P. EDWARDS
Title: CHIEF FINANCIAL OFFICER
AND DIRECTOR
Exhibit 7
THIRD AMENDMENT TO
ASSET EXCHANGE AGREEMENT
THIRD AMENDMENT TO ASSET EXCHANGE AGREEMENT (this "Amendment"),
dated August , 1998, by and among News America Incorporated, a corporation
organized under the State of Delaware ("News America"), News PLD LLC, a
limited liability company organized under the laws of the State of Delaware
("News PLD LLC"), all of the membership interests in which are owned
directly or indirectly by News America, and PLD Telekom Inc., a corporation
organized under the laws of the State of Delaware ("PLD"). All capitalized
terms used herein and not otherwise defined shall have the respective
meanings provided such terms in the Asset Exchange Agreement (as defined
below).
W I T N E S S E T H:
WHEREAS, News America and PLD have entered into that certain
Asset Exchange Agreement, dated as of April 19, 1998 (the "Asset Exchange
Agreement"); and
WHEREAS, News America has assigned its rights under the Stock
Purchase Agreement to its directly and indirectly wholly owned subsidiary
News PLD LLC; and
WHEREAS, the parties hereto have agreed to amend the Asset
Exchange Agreement upon the terms and the conditions set forth herein; and
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements hereinafter set forth, the parties, intending to
be legally bound, hereby agree as follows:
I. Amendments and Modifications to the Asset Exchange Agreement.
Section 7.1(c) of the Asset Exchange Agreement is hereby deleted
in its entirety and the following new Section 7.1(c) is inserted in lieu
thereof:
(c) Expenses. PLD shall pay all Registration Expenses in
connection with only one (1) registration effected in accordance with
this Section 7.1; provided, however, that if at the fifth anniversary
of the date of this Agreement News America, its affiliates and
subsidiaries, and any permitted successors and assigns, collectively
own 50% or more of the aggregate Registrable Securities subject to
this Agreement (such number to take account of any stock splits,
dividends, combinations or other adjustments affecting any of the
Registrable Securities), then for a period of three years following
the fifth anniversary of the date of this Agreement, the holders of
Registrable Securities shall be entitled to one (1) additional
registration effected in accordance with this Section 7.1 in respect
of which PLD shall pay all Registration Expenses.
II. Miscellaneous Provisions.
(a) Amendment and Modification. Subject to applicable law, this
Amendment may be amended, modified or supplemented only by written
agreement signed by the parties hereto.
(b) Waiver of Compliance; Consents. Except as otherwise
provided in this Amendment, any failure of either of the parties hereto to
comply with any obligation, covenant, agreement or condition herein may be
waived by the party entitled to the benefits thereof only by a written
instrument signed by the party granting such waiver, but such waiver shall
not operate as a waiver of, or estoppel with respect to, any subsequent or
other failure.
(c) Notices. All notices and other communications hereunder
shall be in writing and shall be deemed given if delivered personally or by
facsimile transmission, telexed or mailed by registered or certified mail
(return receipt requested), postage prepaid, to the parties at the
addresses stated in the Asset Exchange Agreement.
(d) Assignment. This Amendment and all of the provisions hereof
shall be binding upon and inure to the benefit of the parties hereto and
their respective successors and permitted assigns.
(e) Governing Law. This Amendment shall be governed by and
construed in accordance with the laws of the State of Delaware (regardless
of the laws that might otherwise govern under applicable Delaware
principles of conflicts of law) as to all matters, including but not
limited to matters of validity, construction, effect, performance and
remedies.
(f) Counterparts. This Amendment may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
(g) Interpretation. The article and section headings contained
in this Amendment are solely for the purpose of reference, are not part of
the agreement of the parties and shall not in any way affect the meaning or
interpretation of this Amendment.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, News America, News PLD LLC and PLD have
caused this Amendment to be signed by their respective duly authorized
officers as of the date first above written.
NEWS AMERICA INCORPORATED
By: /s/ JANET L. NOVA
---------------------------------
Name: JANET L. NOVA
Title: VICE PRESIDENT
NEWS PLD LLC
By: /s/ JANET L. NOVA
---------------------------------
Name: JANET L. NOVA
PRESIDENT AND SECRETARY
PLD TELEKOM INC.
By: /s/ E. CLIVE ANDERSON
---------------------------------
Name: E. CLIVE ANDERSON
Title: SENIOR VICE PRESIDENT,
SECRETARY AND
GENERAL COUNSEL
EXHIBIT 8
WARRANT
TO PURCHASE COMMON STOCK OF
PETERSBURG LONG DISTANCE INC.
EXPIRING JUNE 22, 1999
THIS IS TO CERTIFY THAT Cable & Wireless ("C&W"), or registered assigns, is
entitled to purchase from Petersburg Long Distance Inc., an Ontario, Canada
corporation (the "Company"), at any time, all or any part of 250,000 duly
authorized, validly issued, fully paid and nonassessable shares of Common
Stock of the Company, no par value per share ("Common Stock"), at a
purchase price equal to Canadian $11.3125 per share (the "Purchase Price"),
subject to adjustment as set forth herein, and is entitled also to exercise
the other appurtenant rights, powers and privileges hereinafter set forth.
THE EXERCISE AND TRANSFER OF THIS WARRANT ARE
RESTRICTED BY THE PROVISIONS OF SECTION 3 HEREOF
Section 1. Exercise of Warrant.
To exercise this Warrant in whole or in part, the holder hereof
shall deliver to the Company at its principal office in Toronto, Ontario,
in Canada, (a) a written notice, in substantially the form of the
Subscription Notice appearing at the end of this Warrant, of such holder's
election to exercise this Warrant, which notice shall specify the number of
shares of Common Stock to be purchased, (b) cash or a certified check
payable to the Company in an amount equal to the aggregate purchase price
of the number of shares of Common Stock being purchased and (c) this
Warrant. The Company shall as promptly as practicable, and in any event
within 15 days thereafter, execute and deliver or cause to be executed and
delivered, in accordance with such notice, a certificate or certificates
representing the aggregate number of shares of Common Stock specified in
such notice. The stock certificate or certificates so delivered shall be
in the denomination of 100 shares each or such lesser or greater
denomination as may be specified in such notice, and subject to compliance
with Section 3 hereof, and shall be issued in the name of such holder or
such other name as shall be designated in such notice. Subject to the
foregoing, such certificate or certificates shall be deemed to have been
issued and such holder or any other person so designated to be named
therein shall be deemed for all purposes to have become a holder of record
of such shares as of the date such notice is received by the Company as
aforesaid. If this Warrant shall have been exercised only in part, the
Company shall, at the time of delivery of said certificate or certificates,
deliver to such holder a new Warrant evidencing the rights of such holder
to purchase the remaining shares of Common Stock called for by this
Warrant, which new Warrant shall in all other respects be identical to this
Warrant, or, at the request of such holder, appropriate notation may be
made on this Warrant and the same returned to such holder. The Company
shall pay all expenses, taxes and other charges payable in connection with
the preparation, issue and delivery of such stock certificates and new
Warrants, except that, in case such stock certificates or new Warrants,
shall be registered in a name or names other than the name of the holder of
this Warrant, funds sufficient to pay all stock transfer taxes payable upon
the issuance of such stock certificate or certificates or new Warrants
shall be paid by the holder hereof at the time of delivering the notice of
exercise mentioned above.
All shares of Common Stock issued upon the exercise of this
Warrant shall be validly issued, fully paid and nonassessable and, if the
Common Stock is then listed on a national securities exchange, shall be
duly listed thereon.
Section 2. TRANSFER, DIVISION AND COMBINATION.
The Company agrees to maintain at its principal office in
Toronto, Ontario, in Canada, books for the registration and transfer of the
Warrant, and, subject to the provisions of Section 3 hereof, this Warrant
and all rights hereunder are transferable, in whole, on such books at such
office, upon surrender of this Warrant at such office, together with a
written assignment of this Warrant duly executed by the holder hereof or
his agent or attorney and funds sufficient to pay any stock transfer taxes
payable upon the making of such transfer. Upon such surrender and payment,
the Company shall execute and deliver a new Warrant or Warrants in the name
of the assignee or assignees and in the denominations specified in such
instrument of assignment, and this Warrant shall promptly be cancelled. If
and when this Warrant is assigned in blank, the Company may (but shall not
be obliged to) treat the bearer hereof as the absolute owner of this
Warrant for all purposes, and the Company shall not be affected by any
notice to the contrary. A Warrant may be exercised by a new holder for the
purchase of shares of Common Stock without having a new Warrant issued.
This Warrant may be divided or combined with other Warrants upon
presentation hereof at such principal office in Toronto, Ontario, in
Canada, together with a written notice specifying the names and
denominations in which new Warrants are to be issued, signed by the holder
hereof or his agent or attorney. Subject to compliance with the preceding
paragraph as to any transfer that may be involved in such division or
combination, the Company shall execute and deliver a new Warrant or
Warrants in exchange for the Warrant or Warrants to be divided or combined
in accordance with such notice.
Section 3. RESTRICTIONS ON EXERCISE AND TRANSFER OF WARRANTS
AND COMMON STOCK.
This Warrant shall be exercisable (a) only under circumstances
such that the issue of Common Stock issuable upon such exercise is exempt
from the requirements of registration under the United States Securities
Act of 1933, as amended (or any similar statute then in effect) (the "1933
Act") and any applicable state securities law or (b) upon registration of
such Common Stock in compliance therewith. This Warrant shall be
transferable only under circumstances such that the transfer is exempt from
the requirements of registration under the 1933 Act and any applicable
state securities law. In addition, this Warrant and any shares of Common
Stock issued upon exercise hereof shall only be transferable in accordance
with applicable Canadian provincial securities legislation. By acceptance
hereof, the holder agrees to comply with such legislation.
Before any transfer or attempted transfer of all or any part of
this Warrant or such Common Stock, the holder hereof or thereof shall give
the Company written notice of its intention so to do describing briefly the
manner of any such proposed transfer. Promptly after receiving such
written notice, the Company shall present copies thereof to Company counsel
and to any special counsel designated by the holder. If, in the opinion of
counsel for the Company and counsel, if any, for the holder, the proposed
transfer may be effected without registration under the 1933 Act and any
applicable state securities law of any such securities and may be effected
in compliance with Canadian provincial securities legislation, the Company,
as promptly as practicable, shall notify the holder of such opinion,
whereupon the securities proposed to be transferred may be transferred in
accordance with the terms of such notice. The Company shall not be
required to effect any such transfer before the receipt of such favourable
opinion or opinions or the effectiveness of registration.
Section 4. CERTAIN COVENANTS.
The Company covenants and agrees that it will at all times
reserve and set apart and have, free from preemptive rights, a number of
shares of authorized but unissued Common Stock, or other stock or
securities deliverable pursuant to this Warrant, sufficient to enable it at
any time to fulfil all its obligations hereunder.
Section 5. NOTICES.
In case the Company proposes
(a) to pay any dividend payable in stock (of any class or
classes) or in Convertible Securities, as defined below, upon its
Common Stock or make any distribution (other than ordinary cash
dividends) to the holders of its Common Stock, or
(b) to grant to the holders of its Common Stock generally any
rights or options, or
(c) to effect any capital reorganization or reclassification of
capital stock of the Company, or
(d) to consolidate with, or merger into, any other corporation
or to transfer its property as an entirety or substantially as an
entirety, or
(e) to effect the liquidation, dissolution or winding up of the
Company,
then the Company shall cause notice of any such intended action to be
given to all holders of record of outstanding Warrants not less than 30
days before the date on which the transfer books of the Company shall close
or a record be taken for such stock dividend, distribution or granting of
rights or options, or the date when such capital reorganization,
reclassification, consolidation, merger, transfer, liquidation, dissolution
or winding up shall be effective, as the case may be.
Any notice or other document required or permitted to be given or
delivered to holders of record of Warrants shall be mailed first-class
postage prepaid to each such holder at the last address shown on the books
of the Company maintained for the registry and transfer of the holders of
record of Common Stock issued pursuant to Warrants shall be mailed first-
class postage prepaid to each such holder at such holder's address as the
same appears on the stock records of the Company. Any notice or other
document required or permitted to be given or delivered to the Company
shall be mailed first-class postage prepaid to the principal office of the
Company, at Toronto, Ontario, in Canada, or delivered to the office of one
of the Company's executive officers at such address, or such other address
within the United States of America as shall have been furnished by the
Company to the holders of record of such Warrants and the holders of record
of such Common Stock.
Section 6. LIMITATION OF LIABILITY; NOT SHAREHOLDERS.
No provision of this Warrant shall be construed as conferring
upon the holder hereof the right to vote or to consent or to receive
dividends or to receive notice as a shareholder in respect of meetings of
shareholders for the election of directors of the Company or any other
matter whatsoever as shareholders of the Company. No provision hereof, in
the absence of affirmative action by the holder hereof to purchase shares
of Common Stock, and no mere enumeration herein of the rights or privileges
of the holder hereof, shall give rise to any liability of such holder for
the purchase price as a shareholder of the Company, whether such liability
is asserted by the Company, creditors of the Company or others.
Section 7. LOSS, DESTRUCTION, ETC. OF WARRANT.
Upon receipt of evidence satisfactory to the Company of the loss,
theft, mutilation or destruction of any Warrant, and in the case of any
such loss, theft or destruction upon delivery of a bond of indemnity in
such form and amount as shall be reasonably satisfactory to the Company, or
in the event of such mutilation upon surrender and cancellation of the
Warrants, the Company will make and deliver a new Warrant, of like tenor,
in lieu of such lost, stolen, destroyed or mutilated Warrant. Any Warrant
issued under the provisions of this Section 7 in lieu of any Warrant
alleged to be lost, destroyed or stolen, or of any mutilated Warrant, shall
constitute an original contractual obligation on the part of the Company.
Section 8. Exercise of Warrant.
This Warrant shall become exercisable immediately upon its
issuance to the initial holder.
Section 9. ADJUSTMENT OF NUMBER OF SHARES ISSUABLE
PURSUANT TO THIS WARRANT.
A "Unit" shall consist initially of one share of Common Stock of
the Company as such stock is constituted on the date of this Warrant. The
number of shares of Common Stock comprising a Unit shall be subject to
adjustment from time to time as follows:
(a) Effect of "Split-ups" and "Split-downs"; Stock Dividends.
If at any time or from time to time the Company shall subdivide as a whole,
by reclassification, by the issuance of a stock dividend on the Common
Stock payable in Common Stock, or otherwise, the Common Stock comprising a
Unit that may be purchased hereunder shall be increased proportionately as
of the effective or record date of such action. The issuance of such a
stock dividend shall be treated as a subdivision of the whole number of
shares of Common Stock outstanding immediately before the record date for
such dividend into a number of shares equal to such whole number of shares
so outstanding plus the number of shares issued as a stock dividend. In
case at any time or from time to time the Company shall combine as a whole,
by reclassification or otherwise, the number of shares of Common Stock then
outstanding into a lesser number of shares of Common Stock, with or without
par value, the number of shares of Common Stock comprising a Unit which may
be purchased hereunder shall be reduced proportionately as of the effective
date of such action.
(b) Effect of Certain Dividends. If on any date the Company
makes a distribution to holders of its Common Stock (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing corporation) of evidences of its indebtedness or
assets, the number of shares of Common Stock theretofore comprising a Unit
shall be adjusted as of the close of business on said date to a number
determined by multiplying the number of shares theretofore comprising a
Unit by a fraction, the numerator of which shall be the lesser of the
Current Price or the Market Price immediately prior to such distribution,
and the denominator of which shall be the lesser of such Current Price or
Market Price minus the fair market value (as determined in good faith by
the Board of Directors of the Company) of the portion of the assets or
evidences of indebtedness so to be distributed to one share of Common
Stock.
(c) Effect of Merger or Consolidation. If the Company shall,
while this Warrant remains outstanding, enter into any consolidation with
or merger into any other corporation wherein the Company is not the
continuing corporation, or wherein securities of a corporation other than
the Company are distributable to holders of Common Stock of the Company, or
sell or convey its property as an entirety or substantially as an entirety,
and in connection with such consolidation, merger, sale or conveyance,
shares of stock or other securities shall be issuable or deliverable in
exchange for the Common Stock of the Company, the holder of this Warrant
shall thereafter be entitled to purchase pursuant to this Warrant (in lieu
of the number of shares of Common Stock that such holder would have been
entitled to purchase or acquire immediately before the effective date of
such consolidation, merger, sale or conveyance), the shares of stock or
other securities to which such number of shares of Common Stock would have
been entitled at the time of such consolidation, merger, sale or
conveyance, at an aggregate purchase price equal to that which would have
been payable if such number of shares of Common Stock had been purchased
upon exercise of a Warrant immediately prior thereto. In case of any such
consolidation, merger, sale or conveyance, appropriate provision (as
determined by a resolution of the Board of Directors of the Company) shall
be made with respect to the rights and interests thereafter of the holders
of this Warrant, to the end that all the provisions of this Warrant
(including adjustment provisions) shall thereafter be applicable as nearly
as reasonably practicable, in relation to such stock or other securities.
(d) Reorganization and Reclassification. In case of any capital
reorganisation or any reclassification of the capital stock of the Company
(except as provided in Section 9(a)) while this Warrant remains
outstanding, the holder of this Warrant shall thereafter be entitled to
purchase pursuant to this Warrant (in lieu of the number of shares of
Common Stock immediately before such reorganization or reclassification)
the shares of stock of any class or classes or other securities or property
to which such number of shares of Common Stock would have been entitled at
the time of such consolidation, merger, sale or conveyance, at an aggregate
purchase price equal to that which would have been payable if such number
of shares of Common Stock had been purchased immediately before such
reorganization or reclassification. In case of any such reorganization or
reclassification, appropriate provision (as determined by resolution of the
Board of Directors of the Company) shall be made with respect to the rights
and interests thereafter of the holders of this Warrant, to the end that
all the provisions of this Warrant (including adjustment provisions) shall
thereafter be applicable, as nearly as reasonably practicable, in relation
to such stock or other securities or property.
(e) Adjustment of Unit after a "Diluting Issue". If on any date
on or after the date of this Warrant any additional shares of Common Stock
(other than shares issued upon exercise of this Warrant) shall be issued in
connection with a rights offering to shareholders of the Company (a "Rights
Offering") for a consideration per share (or, in the case of any
transactions contemplated in paragraph (1) of this Section 9(e), shall be
deemed to be issued for a Presumed Consideration per share) less than 95%
of the Market Price on the date such Common Stock was issued or deemed to
have been issued, the number of shares of Common Stock therefore comprising
a Unit shall be adjusted as at the close of business on such date to a
number equal to the product (computed to the nearest ten thousandth of a
share) resulting from the multiplication of (i) the total number of shares
of Common Stock comprising a Unit immediately before such adjustment by
(ii) a fraction, the numerator of which is (x) the total number of shares
of Common Stock outstanding immediately before such issue plus the number
of additional shares being issued, and the denominator of which is (y) the
total number of shares of Common Stock outstanding immediately prior to
such issue plus the number of shares of Common Stock that the aggregate
consideration received (or, without duplication, the Presumed Consideration
deemed to have been received) for the total number of additional shares so
issued would purchase at the Market Price on such date, excluding from both
the numerator and denominator of such fraction shares of Common Stock
issuable pursuant to exercise of this Warrant.
For the purpose of this Section 9(e), the following provisions
shall be applicable with respect to the issuance of additional shares of
Common Stock pursuant to a Rights Offering, and the computation set forth
in the immediately preceding paragraph:
(1) Rights below Market Price. In case the Company shall on or
after the date of this Warrant grant any rights pursuant to a Rights
Offering to subscribe for or to purchase additional shares of Common
Stock and the Presumed Consideration per share received and receivable
by the Company for such additional shares under such Rights Offering
shall be less than 95% of the Market Price in effect at such time, the
maximum number of additional shares of Common Stock issuable pursuant
to such rights shall be deemed to have been issued as of the date of
the granting of such rights, and the Company shall be deemed to have
received the Presumed Consideration therefor. No adjustment (except
as provided in paragraph (2) of this Section 9(e)) shall be made upon
the actual issuance of Common Stock upon the exercise of rights
granted pursuant to such Rights Offering.
(2) Superseding Adjustment of Number of Shares of Common Stock
Comprising a Unit. If, at any time after any adjustment of the shares
of Common Stock comprising a Unit shall have been made on the basis of
shares of Common Stock deemed to be issued by reason of the provisions
of the foregoing paragraph (1) of this Section 9(e) on the basis of
the granting of certain rights pursuant to a Rights Offering, or after
any new adjustments of the shares of Common Stock comprising a Unit
shall have been made on the basis of shares of Common Stock deemed to
be issued by reason of the provisions of this paragraph (2), such
rights shall expire, and a portion of such rights shall not have been
exercised, then such previous adjustment shall be rescinded and
annulled and the shares of Common Stock that were deemed to have been
issued by virtue of the computation made in connection with the
adjustment so rescinded and annulled, shall no longer be deemed to
have been issued by virtue of such computation. Thereupon, a re-
computation shall be made of the effect of such rights on the basis
of:
(i) treating the number of additional shares of Common
Stock, if any, theretofore actually issued pursuant to the
exercise of such expired rights as having been issued on the date
or dates of such exercise for the consideration actually received
therefor (computed as provided in paragraph (3) of this Section
9(e)), and
(ii) treating the maximum number of additional shares of
Common Stock, if any, thereafter issuable pursuant to the
previous exercise of such rights as having been issued as of the
date of the granting of such rights and treating the Presumed
Consideration therefor as received as of such date;
and, on such basis, such new adjustment, if any, of the number of shares of
Common Stock comprising a Unit shall be made as may be required by the
first paragraph of this Section 9(e), which new adjustment shall supersede
the previous adjustment so rescinded and annulled for the Warrant exercised
after such new adjustment.
(3) Computation of Consideration and Presumed Consideration.
For the purposes of this Section 9:
(i) The consideration received by the Company upon the
actual issuance of additional shares of Common Stock shall be
deemed to be the sum of the amount of cash and the fair value of
property (as determined in good faith by resolution of the Board
of Directors of the Company as at the time of issue or "deemed
issue" in the case of the following paragraph (ii)) received or
receivable by the Company as the consideration or part of the
consideration (v) at the time of issuance of the Common Stock,
(w) for the issuance of any rights upon the exercise of which
such Common Stock was issued and (x) at the time of the actual
exercise of such right upon the exercise of which such Common
Stock was issued, in each case without deduction for commissions
and expenses incurred by the Company for any underwriting of, or
otherwise in connection with the issue or sale of such rights or
Common Stock, but after deduction of any sums paid by the Company
in cash upon the exercise of, and pursuant to, such rights in
respect of fractional shares of Common Stock;
(ii) The consideration deemed to have been received by the
Company for additional shares of Common Stock deemed to be issued
pursuant to rights granted pursuant to a Rights Offering by
reason of transactions of the character described in this Section
9(e) (herein called the "Presumed Consideration" therefor) shall
be the consideration (determined as provided in the foregoing
paragraph (i)) that would be received or receivable by the
Company at or before the actual issue of such shares of Common
stock so deemed to be issued, if all rights necessary to effect
the actual issue of the number of shares deemed to have been
issued and been exercised and the minimum consideration received
or receivable by the Company upon such exercise had been
received; all computed without regard to the possible future
effect on anti-dilution provisions on such rights.
(f) Statement of Adjustment of Unit and Current Price. Whenever
the number of shares of Common Stock comprising a Unit is adjusted pursuant
to any of the foregoing provisions of this Section 9, the Company shall
promptly prepare a written statement signed by the President of the
Company, setting forth the adjustment in the number of shares comprising a
Unit purchasable hereunder, determined as provided in this Section, and the
amount of the then effective Current Price, and in reasonable detail the
facts requiring such adjustment and the calculation thereof. Such
treatment shall be filed among the permanent records of the Company and a
copy thereof shall be furnished to any holder of this Warrant without
request and shall at all reasonable times during business hours be open to
inspection by such holders. The Company shall also promptly cause a
notice, stating that such an adjustment has been effected and setting forth
the increased or decreased number of shares purchasable and the amount of
the then effective Current Price, to be mailed, first-class postage
prepaid, to the holders of record of this Warrant.
(g) Determination by the Board of Directors. All determinations
by the Board of Directors of the Company under the provisions of this
Section 9 shall be made in good faith with due regard to the interests of
the holders of this Warrant and the other holders of securities of the
Company and in accordance with good financial practice, and all valuations
made by the Board of Directors of the Company under the terms of this
Section 9 must be made with due regard to any market quotations of
securities involved in, or related to, the subject of such valuation.
For all purposes of this Section 9 and this Warrant, unless the
context otherwise requires, the following terms have the following
respective meanings:
"Common Stock": (i) the Company's presently authorized Common
Stock as such class exists on the date of this Warrant, (ii) securities
issued upon exercise of this Warrant, and (iii) stock of the Company of any
class thereafter authorized that ranks, or is entitled to a participation,
as to assets or dividends, substantially on a parity with Common Stock.
"Company": Petersburg Long Distance Inc., an Ontario, Canada
corporation, and any other corporation assuming the Company's obligations
with respect to this Warrant pursuant to this Section 9.
"Current Price": per share of Common Stock, the amount equal to
the quotient resulting from dividing (i) the Purchase Price per Unit herein
provided by (ii) the number of shares (including any fractional share) of
Common Stock comprising a Unit on such date.
"Market Price ": per share of Common Stock at any date, 100 % of
the average of the daily market prices for 30 consecutive business days
commencing 45 business days before such date to holders of Common Stock of
the Company generally. The market price for each such business day shall
be the last sale price on such day as reported on the consolidated
transaction reporting system for the Toronto Stock Exchange or the
principal securities exchange on which the Common Stock is then listed or
admitted to trading, or, if no sale takes place on such day or on any such
exchange, the average of the closing bid and asked prices on such day as so
reported, or, if the Common Stock is not then listed or admitted to trading
on any stock exchange, the market price for each such business day shall be
the average of the reported closing bid and asked prices on such day in the
over-the-counter market, as reported by the National Association of
Securities Dealers Automated Quotation Service. If the Common Stock is not
traded in the over-the-counter market, the market price shall be determined
by the Company's Board of Directors in their good faith business judgment.
"Presumed Consideration": the meaning specified in Section
9(e)(3)(ii).
Section 10. GOVERNING LAW.
This Warrant shall be governed by the laws of the Province of
Ontario, Canada without regard to its conflict of laws principles or rules.
IN WITNESS WHEREOF, the Company has caused this Warrant to be
signed in its name by its duly authorized officer.
Dated: June 28, 1995
PETERSBURG LONG DISTANCE INC.
By: /s/ CLAYTON A. WAITE
--------------------------
Name: CLAYTON A. WAITE
Title: SENIOR VICE PRESIDENT
SUBSCRIPTION NOTICE
The undersigned, the holder of the foregoing Warrant, hereby
elects to exercise purchase rights represented by such Warrant for, and to
purchase thereunder, ________ shares of the Common Stock covered by such
Warrant and herewith makes payment in full therefore of U.S. $_______ cash
and requests that certificates for such shares (and any securities or
property deliverable upon such exercise) be issued in the name of and
delivered to __________ whose address is ____________________.
The undersigned agrees that, in the absence of an effective
registration statement with respect to Common Stock issued upon this
exercise, the undersigned is acquiring such Common Stock for investment and
not with a view to distribution thereof and that the certificate or
certificates representing such Common Stock may bear a legend substantially
as follows: "The shares represented by this certificate have not been
registered under the United States Securities Act of 1933, as amended, and
may not be transferred except as provided in Section 3 of the Warrant to
purchase Common Stock of Petersburg Long Distance Inc. expiring June 22,
1999.
The undersigned also agrees to comply with all applicable
Canadian provincial securities laws relating to the transfer or other
disposition of such Common Stock.
Dated: ______________________________
Signature guaranteed:
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto______________ the rights represented by the foregoing
Warrant of ____________ and appoints ______________ attorney to transfer
said rights on the books of said corporation, with full power of
substitution in the premises.
Dated: August 14, 1998 /s/ R. F. MORTIMER
-----------------------------
Signature guaranteed:
NOTICE: The signature to this assignment must correspond with the name as
written upon the face of the within Warrant in every particular, without or
enlargement or any change whatever.
Exhibit 9
ASSIGNMENT
THIS ASSIGNMENT (this "Assignment"), dated as of April 23, 1998,
by and between News America Incorporated, a corporation organized under the
laws of Delaware ("Assignor"), and News PLD LLC, a limited liability
company organized under the laws of Delaware ("Assignee") (unless otherwise
defined herein, all capitalized terms used herein shall have the meanings
given them in the Stock Purchase Agreement referenced below).
WITNESSETH:
WHEREAS, the Assignor and Cable & Wireless plc, a public limited
company registered under the laws of England ("C&W"), have entered into
that certain Stock Purchase Agreement, dated as of April 19, 1998 (the
"Stock Purchase Agreement"), which provides for the sale by C&W and Navona
Communications Corporation Ltd. (a direct wholly owned subsidiary of C&W),
a corporation organized under the laws of Bermuda, and the purchase by
Assignor, of the PLD Interest; and
WHEREAS, the Assignor and PLD Telekom Inc., a corporation
organized under the laws of Delaware ("PLD"), have entered into that
certain Asset Exchange Agreement, dated as of April 19, 1998 (the "Asset
Exchange Agreement"; the Asset Exchange Agreement and the Stock Purchase
Agreement are collectively referred herein as the "Acquisition Agreements"
and the transactions contemplated thereby are collectively referred to
herein as the "Acquisition"), which provides for the exchange by Assignor
of the Holdings Shares with PLD for the New PLD Shares (as defined in the
Asset Exchange Agreement); and
WHEREAS, in connection with the Acquisition, Assignor desires to
assign all of its right, title and interest in and to the Acquisition
Agreements, and Assignee desires to accept such assignment and assume the
obligations of Assignor thereunder; and
NOW, THEREFORE, in consideration of the premises and of the
mutual covenants and agreements herein contained, the parties agree as
follows:
1. Assignment of Acquisition Agreements
(a) Assignor hereby assigns all of its right, title and interest
in, under and to the Acquisition Agreements to Assignee.
(b) Assignee hereby accepts the foregoing assignment and assumes
and agrees to pay, perform and discharge all obligations under the
Acquisition Agreements on the part of the Assignor to be paid, performed
and discharged from and after the date hereof. The Assignor hereby agrees
and acknowledges that it shall remain jointly and severally liable with the
Assignee under the Acquisition Agreements.
2. Miscellaneous
(a) Amendment and Modification. Subject to applicable law, this
Assignment may be amended, modified or supplemented only by written
agreement signed by the parties hereto.
(b) Waiver of Compliance; Consents. Except as otherwise
provided in this Assignment, any failure of either of the parties hereto to
comply with any obligation, covenant, agreement or condition herein may be
waived by the party entitled to the benefits thereof only by a written
instrument signed by the party granting such waiver, but such waiver shall
not operate as a waiver of, or estoppel with respect to, any subsequent or
other failure.
(c) Assignment. This Assignment and all of the provisions
hereof shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and permitted assigns.
(d) Further Assurances. In connection with this Assignment,
each party shall execute and deliver any additional documents and
instruments and perform any additional acts that may be necessary or
appropriate to effectuate and perform the provisions of this Assignment.
(e) Governing Law. This Assignment shall be governed by and
construed in accordance with the laws of the State of New York (regardless
of the laws that might otherwise govern under applicable Delaware
principles of conflicts of law) as to all matters, including but not
limited to matters of validity, construction, effect, performance and
remedies.
(f) Counterparts. This Assignment may be executed in two or
more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have cause this Assignment
to be executed by their respective representatives, thereunto duly
authorized, as of the day and year first above written.
NEWS AMERICA INCORPORATED
By: /s/ JANET L. NOVA
---------------------------------------
Name: JANET L. NOVA
Title: VICE PRESIDENT
NEWS PLD LLC
By: /s/ JANET L. NOVA
---------------------------------------
Name: JANET L. NOVA
Title: PRESIDENT AND SECRETARY
Exhibit 10
AGREEMENT OF JOINT FILING
Pursuant to Rule 13d-1(k)(1) under the Securities Exchange Act of
1934, the undersigned hereby consent to the joint filing on their behalf of
a single Schedule 13D and any amendments thereto, with respect to the
ownership by each of the undersigned of shares of Common Stock of PLD
Telekom Inc. The undersigned hereby further agree that this statement may
be executed in any number of counterparts, each of which when so executed
shall be deemed to be an original, but all of which counterparts shall
together constitute one and the same instrument.
Dated: August 24, 1998
THE NEWS CORPORATION LIMITED
By: /s/ ARTHUR M. SISKIND
-------------------------------------
Name: ARTHUR M. SISKIND
Title: DIRECTOR
NEWS AMERICA INCORPORATED
By: /s/ ARTHUR M. SISKIND
-------------------------------------
Name: ARTHUR M. SISKIND
Title: DIRECTOR
NEWS PLD LLC
By: /s/ LAWRENCE JACOBS
------------------------------------
Name: LAWRENCE JACOBS
Title: VICE PRESIDENT
/s/ K. RUPERT MURDOCH
------------------------------------
K. RUPERT MURDOCH
