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Exhibit 2.1
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AMENDED AND RESTATED
ACQUISITION AGREEMENT
DATED AS OF
SEPTEMBER 7, 2001
AMONG
GILAT TO HOME LATIN AMERICA (HOLLAND) N.V.,
rSTAR CORPORATION,
AND
GILAT SATELLITE NETWORKS LTD.
RELATING TO THE ACQUISITION OF
STARBAND LATIN AMERICA (HOLLAND) B.V.
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TABLE OF CONTENTS
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ARTICLE I. CERTAIN DEFINITIONS.................................................3
ARTICLE II. SALE AND PURCHASE OF THE SHARES...................................10
Section 2.1 Sale and Purchase of the Company Shares.....................10
Section 2.2 Closing Date................................................10
Section 2.3 Deliveries and Assignment of Right to Share Consideration...11
Section 2.4 Post-Closing Share Consideration Adjustments................11
Section 2.5 The Special Distribution....................................13
ARTICLE III. THE OFFER AND OTHER TRANSACTIONS.................................17
Section 3.1 Purchaser Tender Offer......................................17
Section 3.2 Voting Agreement............................................19
Section 3.3 Proxy Statement; Form F-4 and Stockholder Meeting...........19
Section 3.4 Financial Information of the Business.......................20
ARTICLE IV. REPRESENTATIONS AND WARRANTIES....................................21
Section 4.1 Representations and Warranties of the Gilat Parties.........22
Section 4.2 Representations and Warranties of Purchaser.................35
ARTICLE V. CONDITIONS TO CLOSING..............................................39
Section 5.1 Conditions to Each Party's Obligation to Effect the Sale....39
Section 5.2 Conditions to Obligations of Purchaser......................40
Section 5.3 Conditions to Obligations of Gilat Israel and Seller........41
ARTICLE VI. ADDITIONAL COVENANTS AND AGREEMENTS...............................43
Section 6.1 Directors and Officers......................................43
Section 6.2 Additional Agreements; Cooperation..........................43
Section 6.3 Publicity...................................................44
Section 6.4 Notification of Certain Matters.............................44
Section 6.5 Access to Information.......................................44
Section 6.6 Non-Solicitation............................................45
Section 6.7 Fees and Expenses...........................................47
Section 6.8 Insurance...................................................47
Section 6.9 Conduct of the Parties after the Closing Date...............48
Section 6.10 Maintenance of Transfer Agent...............................49
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ARTICLE VII. CONDUCT OF BUSINESS AND OF PURCHASER PRIOR TO THE CLOSING........50
Section 7.1 Conduct of Business Pending the Sale........................50
Section 7.2 Conduct of Business of Purchaser Pending the Sale...........51
Section 7.3 Gilat Review of Expenditures................................54
ARTICLE VIII. INDEMNIFICATION.................................................54
Section 8.1 Indemnification Generally by Gilat Israel and Seller........54
Section 8.2 Indemnification Generally by Purchaser......................56
Section 8.3 Notice of Claims for Indemnification........................58
Section 8.4 Survival of Representations and Warranties..................58
ARTICLE IX. TAX INDEMNITIES...................................................58
Section 9.1 Tax Indemnities.............................................58
Section 9.2 Character of Indemnity Payments.............................59
Section 9.3 Refunds.....................................................60
Section 9.4 Miscellaneous...............................................60
ARTICLE X. TERMINATION........................................................60
Section 10.1 Termination.................................................60
Section 10.2 Effect of Termination.......................................62
ARTICLE XI. MISCELLANEOUS.....................................................62
Section 11.1 Governing Law...............................................62
Section 11.2 Remedies....................................................62
Section 11.3 Successors and Assigns......................................63
Section 11.4 Amendment...................................................63
Section 11.5 Entire Agreement............................................63
Section 11.6 No Reliance on Other Information............................63
Section 11.7 Severability................................................63
Section 11.8 No Third Party Beneficiaries................................63
Section 11.9 Notices.....................................................64
Section 11.10 Delays or Omissions.........................................65
Section 11.11 Legal Fees..................................................65
Section 11.12 Titles and Subtitles........................................65
Section 11.13 Counterparts................................................65
EXHIBITS
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Exhibit 2.5 Fourth Amended and Restated Certificate of Incorporation
Exhibit 3.1 Option
Exhibit 3.2 Voting Agreement
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Exhibit 4.1(h) Master Agreement
SCHEDULES
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Gilat Parties' Disclosure Schedule
Purchaser's Schedules
4.2(b) Consents
4.2(f) Employee Agreements and Plans
4.2(g) Registration Rights
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AMENDED AND RESTATED
ACQUISITION AGREEMENT
This AMENDED AND RESTATED ACQUISITION AGREEMENT, dated as of September
7, 2001 (this "Agreement"), is among Gilat To Home Latin America (Holland) N.V.,
a Dutch corporation ("Seller"), rStar Corporation, a Delaware corporation
("Purchaser"), and Gilat Satellite Networks Ltd., an Israeli corporation, the
indirect parent of Seller and an indirect majority stockholder of Purchaser
("Gilat Israel" and together with Seller, the "Gilat Parties" and each a "Gilat
Party").
R E C I T A L S
A. Seller, Purchaser and Gilat Israel entered into an Acquisition
Agreement, dated April 23, 2001 (the "Original Acquisition Agreement"), and wish
to amend and restate in its entirety the Original Acquisition Agreement and the
related exhibits and schedules thereto as set forth in this Agreement and the
related exhibits and schedules hereto. The amendments to the Original
Acquisition Agreement reflect, among other things, Purchaser's satisfaction of
its accrued obligations under the Capital Lease (as defined below) to Spacenet
Inc., a Delaware corporation and the direct wholly-owned subsidiary of Gilat
Israel ("Spacenet"). Under the Original Acquisition Agreement, the satisfaction
of Purchaser's accrued obligations to Spacenet under the Capital Lease (the
"Capital Lease Obligation") was a condition precedent to the parties'
obligations to consummate the Sale (as defined below). Purchaser satisfied the
Capital Lease Obligation through the issuance and delivery of 19,396,552 shares
of Purchaser Stock (as defined below) to an affiliate of Spacenet on May 21,
2001, as contemplated by the Original Acquisition Agreement and pursuant to the
Agreement, dated April 23, 2001, between Spacenet and Purchaser.
B. Gilat Israel, with its global subsidiaries, is a leading
provider of telecommunications solutions based on VSAT (very small aperture
terminal) satellite network technology. Since its inception, Gilat Israel has
invested considerable resources, including hundreds of millions of dollars and
thousands of man-years, in research and development, proprietary technologies,
product design and manufacturing and marketing. Gilat Israel's technology is
used to deliver advanced satellite-based, end-to-end enterprise networking and
rural telephony solutions to customers across six continents, as well as
interactive broadband data services.
C. Gilat Israel's joint venture, StarBand Communications Inc.
("StarBand"), is the first to market with an "always-on", two-way, broadband
Internet access solution for the residential and small office and home office
markets that is available virtually everywhere in North America today. StarBand
offers a stand-alone Internet access service, as well as a bundled product with
direct-to-home television service using a single dish at the subscriber's
location. Gilat Israel and certain of its affiliates contributed to StarBand the
exclusive rights for North America to its consumer two-way VSAT technology, as
well as management, employees and technological expertise, including the
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operation of the satellite network. Through this venture, Gilat Israel and its
affiliates have gained significant experience in implementing and marketing such
services to consumers and small office and home office subscribers.
D. Gilat Israel and its affiliates have also developed substantial
experience in Latin America, particularly in providing satellite-based services
to corporate clients operating large-scale networks. Such experience has
included the obtaining of licenses to operate in the various Latin American
countries, experience in the development of networks for voice and data,
relationships with local partners and other relevant business experience.
E. StarBand Latin America (Holland) B.V. has been formed as a
direct wholly-owned subsidiary of Seller (the "Company"), for the purpose of
leveraging such investment, experience and know-how into the Latin American
market. As further described in this Agreement, Gilat Israel, Seller and their
affiliates shall contribute to the Company or to the Company's subsidiaries
(such contributing entities collectively referred to herein as the "Gilat
Business Entities") the business as currently conducted by the Company and the
non-exclusive rights in Mexico and the exclusive rights in the other Latin
American countries (including, among others Brazil, Argentina, Peru, and,
subject to certain restrictions, Chile) to (i) implement, operate and market
broadband Internet access services and voice services to consumers and small
office and home office subscribers, (ii) provide a bundled product with
direct-to-home television service using a single satellite dish and (iii)
provide such new technologies and products related to the foregoing as Gilat
Israel may in the future develop or make available to StarBand, which shall be
offered to the Company and/or the Company's subsidiaries upon commercially
reasonable terms via a two-way satellite-based network, together with the
related assets, licenses, rights, management, employees experience and know-how
(such business, related assets, licenses, rights, management, employees'
experience and know-how, shall be referred to herein as the "Business").
F. Seller wishes to sell to Purchaser, and Purchaser wishes to
purchase from Seller (the "Sale"), all of the issued and outstanding shares of
capital stock of the Company in exchange for the Share Consideration (as defined
below), on the terms and subject to the conditions set forth in this Agreement.
G. To further induce the parties hereto to enter into this
Agreement, certain principal stockholders of Purchaser, Gilat Israel and its
direct wholly-owned subsidiary, Gilat Satellite Networks (Holland) B.V. ("Xxxxx
Xxxxxxx") shall enter into a voting agreement pursuant to which they each shall
agree to vote, or cause to be voted, the shares of Purchaser Stock (as defined
below) beneficially owned or controlled by such stockholders in favor of the
Sale and the other transactions contemplated hereby and against any competing
proposal.
H. In contemplation of the Sale, Purchaser shall make a tender
offer (the "Offer") in compliance with the applicable provisions of the
Securities Exchange Act of
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1934, as amended (the "Exchange Act"), and the rules and regulation promulgated
under the Exchange Act, to purchase from its stockholders (other than Gilat
Israel and its Affiliates (as defined below)) up to 6,315,789 shares of
Purchaser Stock. The Offer shall be subject to this Agreement and shall
immediately following the consummation of the Sale.
NOW, THEREFORE, in consideration of the mutual promises,
representations, warranties, covenants and conditions set forth in this
Agreement, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and intending to be legally bound
hereby, the Parties hereby agree as follows:
CERTAIN DEFINITIONS
The following terms used in this Agreement shall have the meanings
specified below.
"Additional Share Consideration" has the meaning set forth in Section
2.4(e) hereof.
"Affiliate" means, with respect to any Person, any other Person that
directly or indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with, such Person; provided, however,
that unless expressly set forth otherwise herein, officers and directors of a
Party or of any corporation or other entity deemed to be an Affiliate of such
Party, shall not themselves be deemed an Affiliate of such Party solely by
virtue of serving as an officer or director thereof. For purposes of this
definition, "control" (including, with correlative meanings, the terms
"controlling," "controlled by" and "under common control with"), as applied to
any Person, means the possession, directly or indirectly, of the power to vote
fifty percent (50%) or more of the securities having voting power for the
election of directors of such Person or to otherwise direct or cause the
direction of the management and policies of that Person, whether through the
ownership of voting securities, by contract or otherwise.
"Agreement" means this Amended and Restated Acquisition Agreement.
"Applicable Net Income" means, for any Calculation Period, Purchaser's
consolidated net income (excluding extraordinary items of gain or loss and
before the amortization of goodwill and other intangible assets) generated
during the applicable Calculation Period by the Business, in each case: (i) as
determined in accordance with GAAP; and (ii) as reflected on audited financial
statements of the Business (the "Audited Statement"): (x) audited by independent
certified public accountants of recognized national standing (which may be the
regular auditors of Purchaser) selected Purchaser; and (y) filed by Purchaser
with the SEC or otherwise publicly announced or delivered to holders of the
Purchaser Stock.
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"Applicable Distribution Amount" means: (i) with respect to the First
Payment Date, the First Distribution Amount and (ii) with respect to the Second
Payment Date, the Second Distribution Amount.
"Assets" has the meaning set forth in Section 4.1(h)(i)(2) hereof.
"Audited Statement" has the meaning set forth in the definition of
Applicable Net Income.
"breaching party" has the meaning set forth in Section 11.2 hereof.
"Business" has the meaning set forth in the recitals to this Agreement.
"Business Contract" means any Contract by which the Assets or the
Business is bound or any Contract to which any of the Gilat Business Entities is
a party that is necessary to conduct the Business.
"Business Day" means a day on which both Seller and national banks doing
business in New York City are open for business.
"Business Documentation" has the meaning set forth in Section 6.5(b)
hereof.
"Calculation Period" has the meaning set forth in Section 2.4(b) hereof.
"Capital Lease" means the Amended and Restated Service Agreement between
ZapMe! Corporation and Spacenet, dated September 30, 1999, and such products and
services otherwise provided by Spacenet to the Company.
"Capital Lease Obligation" has the meaning set forth in the recitals
hereto.
"Certificate of Waiver" has the meaning set forth in Section 2.5(b)
hereof.
"Closing" and "Closing Date" have the respective meanings given to those
terms in Section 2.2 hereof.
"Company" has the meaning set forth in the recitals to this Agreement.
"Company Common Stock" has the meaning set forth in Section 4.1(f)
hereof.
"Company Material Adverse Effect" has the meaning set forth in Article
IV hereof.
"Company Shares" has the meaning set forth in Section 4.1(f)(i) hereof.
"Contract" means any written or oral contract, agreement, lease,
license, plan, instrument or other document, commitment, arrangement,
undertaking, understanding,
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practice or authorization that is binding on any Person or its property under
applicable Law.
"Control of Purchaser" means the direct or indirect beneficial ownership
of 51% or more of the outstanding shares of Purchaser Stock or the authority or
ability to elect a majority of the members of Purchaser's board of directors.
"Damages" means money damages determined on a dollar-for-dollar basis
after giving effect to any related offset or reduction, including any tax or
other benefits realized as a result of such damage. In determining any amount of
Damages arising out of or by reason of any breach of warranty or covenant
relating to taxes, such Damages shall be reduced by any resulting or related tax
benefit for the same or a different tax period or periods.
"Disclosure Schedule" has the meaning set forth in Section 4.1 hereof.
"DGCL" means Delaware General Corporation Law, as amended.
"D&O Resignations" has the meaning set forth in Section 6.1 hereof.
"$" or "dollars" shall means and refers to United States dollars.
"Employee Plans" has the meaning set forth in Section 4.1(k)(i) hereof.
"Employees" means the employees of the Business as of the date hereto or
as of the Closing Date as the context may required.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Expiration Date" has the meaning set forth in Section 2.5(d) hereof.
"First Calculation Period" has the meaning set forth in Section 2.4(a)
hereof.
"First Distribution Amount" has the meaning set forth in the Fourth
Amended and Restated Certificate of Incorporation.
"First Payment Date" has the meaning set forth in the Fourth Amended and
Restated Certificate of Incorporation.
"Fourth Amended and Restated Certificate of Incorporation" has the
meaning set forth in Section 2.5(a) hereof.
"Fully Diluted Basis" means at any time as applied to any calculation of
the number of securities of Purchaser, after giving effect to (x) all shares of
Purchaser Stock
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issued and outstanding at the time of determination, (y) all shares of Purchaser
Stock issuable upon the exercise of any option, warrants or similar right
outstanding at the time of determination and (z) all shares of Purchaser Stock
issuable upon the exercise of any conversion or exchange right contained in any
security convertible into or exchangeable for shares of Purchaser Stock.
"GAAP" means the accounting principles generally accepted in the United
States applied on a consistent basis.
"Gilat Business Entities" has the meaning set forth in the recitals to
this Agreement.
"Xxxxx Xxxxxxx" has the meaning set forth in the recitals hereto.
"Gilat Israel" has the meaning set forth in the introductory paragraph
to this Agreement.
"Gilat Material Adverse Effect" has the meaning ascribed to it in
Article IV hereof.
"Gilat Parties" has the meaning set forth in the introductory paragraph
to this Agreement.
"Gilat Registration Statement" has the meaning set forth in Section
3.3(a) hereof.
"Government" or "Governmental" means, or refers to, (a) the government
of the United States, Israel, or the Netherlands or the government of any
foreign country recognized by the governments of either the United States,
Israel, or the Netherlands; (b) the government of any state, province, county,
municipality, city, town or district of the United States, Israel, the
Netherlands or any foreign country (whose national government is so recognized);
and any multi-county district; and (c) any agency, department, authority,
commission, administration, court, magistrate, tribunal, arbitrator,
instrumentality or political subdivision of, or within the geographical
jurisdiction of, any government described in the foregoing clauses (a) and (b).
"Indemnifiable Claims" when used in, and for purposes of, Article 8
hereof means and includes any and all direct Damages and all expenses
(including, without limitation, reasonable legal and expert fees and expenses).
"IRS" means the United States Internal Revenue Service or any successor
thereto.
"Law" means any of the following of, or issued by, any Government, in
effect on or prior to the date hereof, any statute, law, act, ordinance, code,
resolution, rule, regulation, order, guideline, decree, judgment, license,
permit, certificate or certification, registration, concession, grant, franchise
or restriction; and any published official
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interpretation, or ruling (whether designated as public or private, substantive
or procedural).
"Liabilities" has the meaning set forth in Section 4.1(h)(i)(3) hereof.
"Licenses" has the meaning set forth in Section 4.1(q) hereof.
"Lien" means any mortgage, lien, security interest, pledge, encumbrance,
restriction on transferability, defect of title, charge or claim of any nature
whatsoever on any property or property interest.
"Master Agreement" has the meaning set forth in Section 4.1(h)(i)(1)
hereof.
"Maximum Distribution Amount" has the meaning set forth in the Fourth
Amended and Restated Certificate of Incorporation.
"NASD" has the meaning set forth in Section 4.1(c) hereof.
"NASDAQ" has the meaning set forth in Section 4.1(c) hereof.
"Offer" has the meaning set forth in the recitals hereto.
"Offer Consideration" has the meaning set forth in Section 3.1(a)
hereof.
"Offer Documents" has the meaning set forth in Section 3.1(c) hereof.
"Option" has the meaning set forth in Section 3.1(a) hereof.
"Ordinary Shares" means the Ordinary Shares of Gilat Israel.
"Party" means Purchaser, Seller or Gilat Israel, as the context
requires, and "Parties" means Purchaser, Seller and Gilat Israel, collectively.
"Penalty" means any civil or criminal penalty (including any interest
thereon), fine, levy, lien, assessment, charge, monetary sanction or payment, or
any payment in the nature thereof, of any kind required to be made to any
Government under any Law.
"Period" means any taxable year or any other period that is treated as a
taxable year with respect to which any Tax may be imposed under any applicable
statute, rule or regulation.
"Person" means a corporation, association, partnership, limited
liability company or partnership, joint venture, organization, business,
individual, trust, or any other entity or organization, including a Government
or any subdivision or agency thereof.
"Principal Stockholders" has the meaning set forth in Section 3.2
hereof.
"Proxy Statement" has the meaning set forth in Section 3.3(a) hereof.
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"Purchaser" has the meaning set forth in the introductory paragraph to
this Agreement.
"Purchaser Material Adverse Effect" has the meaning set forth in Article
IV hereof.
"Purchaser Stock" means the common stock, par value $.01, of Purchaser.
"Purchaser's Indemnified Persons" means:
(a) Purchaser and its current and former directors, officers,
employees, agents and stockholders, and
(b) subsequent to the Closing, the Company and its Subsidiaries, and
the officers (or the persons performing the functions of officers), employees
and agents of the Company and its Subsidiaries, serving as such subsequent to
the Closing (but only in their capacity as such from and after the Closing).
"Qualified Convertible Securities" has the meaning set forth in Section
2.5(d)(i)(B) hereof.
"Qualified Public Offering" has the meaning set forth in Section
2.5(a)(ii) hereof.
"Required Ordinary Shares" means that number of Ordinary Shares that
Purchaser is required to deliver to its stockholders in order to consummate the
Offer.
"Sale" has the meaning set forth in the recitals to this Agreement.
"SEC" has the meaning set forth in Section 3.1(c).
"SEC Documents" has the meaning set forth in Section 3.1(c) hereof.
"Second Calculation Period" has the meaning set forth in Section 2.4(b)
hereof.
"Second Distribution Amount" has the meaning set forth in the Fourth
Amended and Restated Certificate of Incorporation.
"Second Payment Date" has the meaning set forth in the Fourth Amended
and Restated Certificate of Incorporation.
"Securities Act" means the Securities Act of 1933, as amended.
"Seller" has the meaning set forth in the introductory paragraph to this
Agreement.
"Seller's Indemnified Persons" has the meaning set forth in Section
8.2(a) hereof.
"Share Consideration" has the meaning set forth in Section 2.1 hereof.
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"Spacenet" has the meaning set forth in the recitals hereto.
"Special Distribution" has the meaning set forth in Section 2.5(a)
hereof.
"Special Distribution Expiration Date" has the meaning set forth in
Section 2.5(c)(ii) hereof.
"StarBand" has the meaning set forth in the recitals hereto.
"Special Committee" has the meaning set forth in Section 4.2(i) hereof.
"State Income Tax" means all Taxes (whether denominated as franchise
taxes or otherwise) measured on or by income imposed by any State of the United
States of America (or any subdivision thereof).
"Stockholder Approval" has the meaning set forth in Section 3.3(b)
hereof.
"Stockholder Meeting" has the meaning set forth in Section 3.3(b)
hereof.
"Subsidiaries" has the meaning set forth in Section 4.1(g) hereof.
"Tax Code" means the Internal Revenue Code of 1986, as amended and as in
effect from time to time, and any law that shall have been a predecessor or
shall be a successor thereto.
"Tax Return" means any report, return, information return or other
information required to be supplied to a taxing authority in connection with
Taxes.
"Taxes" means all taxes, charges, fees, levies or other assessments,
including, without limitation, income, gross receipts, excise, environmental,
severance, occupation, property, sales, use, transfer, registration,
value-added, license, payroll, franchise, Social Security and unemployment taxes
imposed or required to be withheld by any Government or other tax of any kind
whatsoever, including any interest, penalties and additions thereto, whether
disputed or not.
"Transaction Proposal" has the meaning set forth in Section 6.6(a)
hereof.
"Unsolicited Superior Proposal" has the meaning set forth in Section
6.6(b) hereof.
"Voice Services" has the meaning set forth in Section 4.1(h)(iv) hereof.
"Voting Agreement" has the meaning set forth in Section 3.2 hereof.
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SALE AND PURCHASE OF THE SHARES
SALE AND PURCHASE OF THE COMPANY SHARES.
Subject to the terms and conditions of this Agreement, at the Closing,
Seller shall sell to Purchaser, and Purchaser shall purchase from Seller, the
Company Shares in exchange for 43,103,448 shares of Purchaser Stock,
representing the value $100 million divided by $2.32 (the "Share
Consideration").
CLOSING DATE.
The closing of the Sale (the "Closing") shall take place at the New York
offices of Xxxxx Xxxxxxx Xxxxxxx & Xxxxx LLP, located at 0000 Xxxxxx xx xxx
Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000, as soon as practicable after the last
of the conditions set forth in Section 5 hereof is fulfilled or waived (subject
to applicable Law) but in no event later than the fifth Business Day thereafter,
or at such other time and place and on such other date as the Parties shall
mutually agree; provided, however, that, without the mutual agreement of the
Parties, in no event shall the Closing occur later than November 30, 2001 (the
"Closing Date").
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DELIVERIES AND ASSIGNMENT OF RIGHT TO SHARE CONSIDERATION.
DELIVERIES OF GILAT ISRAEL AND SELLER. GILAT ISRAEL AND SELLER, AS THE CASE MAY
BE, SHALL DELIVER TO PURCHASER THE FOLLOWING:
CERTIFICATES REPRESENTING THE COMPANY SHARES, DULY ENDORSED IN BLANK OR WITH
STOCK POWERS DULY ENDORSED IN BLANK, TOGETHER WITH SUCH OTHER DOCUMENTS AS
PURCHASER MAY REASONABLY REQUEST TO EVIDENCE THE TRANSFER TO PURCHASER OF GOOD
TITLE IN AND TO THE COMPANY SHARES, FREE AND CLEAR OF ANY LIENS (INCLUDING,
WITHOUT LIMITATION, CONFIRMATION OF THE RECORDING OF ANY REGISTRATION REQUIRED
UNDER THE LAWS OF THE COMPANY'S JURISDICTION OF FORMATION); AND
THE OTHER INSTRUMENTS OR DOCUMENTS, AS SHALL BE REQUIRED BY PURCHASER UNDER
SECTION 5.2 HEREOF.
DELIVERIES OF PURCHASER. PURCHASER SHALL DELIVER TO SELLER THE FOLLOWING:
CERTIFICATES REPRESENTING THE SHARE CONSIDERATION, TOGETHER WITH SUCH OTHER
DOCUMENTS AS SELLER MAY REASONABLY REQUEST TO EVIDENCE THE TRANSFER TO SELLER OF
GOOD TITLE IN AND TO THE SHARE CONSIDERATION, FREE AND CLEAR OF ANY LIENS; AND
THE OTHER INSTRUMENTS OR DOCUMENTS, AS SHALL BE REQUIRED BY GILAT ISRAEL AND
SELLER, AS THE CASE MAY BE, UNDER SECTION 5.3 HEREOF.
ASSIGNMENT OF RIGHT TO SHARE CONSIDERATION. THE PARTIES AGREE THAT SELLER SHALL
HAVE THE RIGHT TO ASSIGN ALL OR PART OF ITS RIGHT TO THE SHARE CONSIDERATION
UNDER SECTION 2.1 HEREOF AND ITS RIGHTS TO THE DELIVERY OF THE CERTIFICATES
REPRESENTING SUCH SHARE CONSIDERATION UNDER SECTION 2.3(b)(i) HEREOF TO GILAT
ISRAEL, ANY OF ITS AFFILIATES, AND/OR STARBAND; PROVIDED, HOWEVER, THAT, IN EACH
SUCH CASE, THE ASSIGNEE OF ALL OR PART OF THE SHARE CONSIDERATION EXECUTES AND
DELIVERS A CERTIFICATE OF WAIVER TO PURCHASER.
POST-CLOSING SHARE CONSIDERATION ADJUSTMENTS.
COMPANY'S NET INCOME FOR 2002-2003.
IF THE COMPANY'S APPLICABLE NET INCOME FOR THE PERIOD FROM JULY 1, 2002 THROUGH
JUNE 30, 2003 (INCLUSIVE) (THE "FIRST CALCULATION PERIOD"), IS GREATER THAN OR
EQUAL TO $4,100,000 BUT NO MORE THAN $4,900,000, PURCHASER SHALL, PROMPTLY
FOLLOWING THE DETERMINATION OF THE APPLICABLE NET INCOME FOR SUCH PERIOD, ISSUE
2,685,382 SHARES OF PURCHASER STOCK TO GILAT ISRAEL.
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IF THE COMPANY'S APPLICABLE NET INCOME FOR THE FIRST CALCULATION PERIOD, IS
GREATER THAN OR EQUAL TO $4,900,000, PURCHASER SHALL, PROMPTLY FOLLOWING THE
DETERMINATION OF THE APPLICABLE NET INCOME FOR SUCH PERIOD, ISSUE 5,370,765
SHARES OF PURCHASER STOCK TO GILAT ISRAEL.
ANYTHING CONTAINED IN THIS SECTION 2.4(a) TO THE CONTRARY NOTWITHSTANDING, IN
THE EVENT THAT THE AUDITED STATEMENTS WITH RESPECT TO THE FIRST CALCULATION
PERIOD ARE NOT FILED WITH THE SEC OR OTHERWISE PUBLICLY ANNOUNCED OR DELIVERED
TO THE HOLDERS OF SHARES OF PURCHASER STOCK ON OR BEFORE DECEMBER 31, 2003, NO
SHARES OF PURCHASER STOCK SHALL BE ISSUED BY PURCHASER TO GILAT ISRAEL
PURSUANT TO THIS SECTION 2.4(a).
COMPANY'S NET INCOME FOR 2003-2004.
IF THE COMPANY'S APPLICABLE NET INCOME FOR THE PERIOD FROM JULY 1, 2003
THROUGH JUNE 30, 2004 (INCLUSIVE) (THE "SECOND CALCULATION PERIOD" AND,
TOGETHER WITH THE FIRST CALCULATION PERIOD, EACH A "CALCULATION PERIOD"), IS
GREATER THAN OR EQUAL TO $27,500,000, BUT NO MORE THAN $33,000,000, PURCHASER
SHALL, PROMPTLY FOLLOWING THE DETERMINATION OF THE APPLICABLE NET INCOME FOR
SUCH PERIOD, ISSUE 2,685,382 SHARES OF PURCHASER STOCK TO GILAT ISRAEL.
IF THE COMPANY'S APPLICABLE NET INCOME FOR THE SECOND CALCULATION PERIOD, IS
GREATER THAN OR EQUAL TO $33,000,000, PURCHASER SHALL, PROMPTLY FOLLOWING THE
DETERMINATION OF THE APPLICABLE NET INCOME FOR SUCH PERIOD, ISSUE 5,370,765
SHARES OF PURCHASER STOCK TO GILAT ISRAEL.
ANYTHING CONTAINED IN THIS SECTION 2.4(b) TO THE CONTRARY NOTWITHSTANDING, IN
THE EVENT THAT THE AUDITED STATEMENTS WITH RESPECT TO THE SECOND CALCULATION
PERIOD ARE NOT FILED WITH THE SEC OR OTHERWISE PUBLICLY ANNOUNCED OR DELIVERED
TO THE HOLDERS OF SHARES OF PURCHASER STOCK ON OR BEFORE DECEMBER 31, 2004, NO
SHARES OF PURCHASER STOCK SHALL BE ISSUED BY PURCHASER TO GILAT ISRAEL
PURSUANT TO THIS SECTION 2.4(b).
DELIVERY OF ADDITIONAL SHARE CONSIDERATION. IF PURCHASER ISSUES SHARES OF
PURCHASER STOCK TO GILAT ISRAEL PURSUANT TO THIS SECTION 2.4 (THE "ADDITIONAL
SHARE CONSIDERATION"), ON THE DATE OF SUCH ISSUANCE, PURCHASER SHALL DELIVER
TO GILAT ISRAEL THE CERTIFICATES REPRESENTING
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THE ADDITIONAL SHARE CONSIDERATION, TOGETHER WITH SUCH OTHER DOCUMENTS AS
GILAT ISRAEL MAY REASONABLY REQUEST TO EVIDENCE THE TRANSFER TO GILAT ISRAEL
OF GOOD TITLE IN AND TO THE ADDITIONAL SHARE CONSIDERATION, FREE AND CLEAR OF
ANY LIENS.
ASSIGNMENT OF RIGHT TO ADDITIONAL SHARE CONSIDERATION. THE PARTIES AGREE THAT
GILAT ISRAEL SHALL HAVE THE RIGHT TO ASSIGN ALL OR PART OF ITS RIGHT TO THE
ADDITIONAL SHARE CONSIDERATION UNDER SECTION 2.4(a) AND (b) HEREOF, AS WELL AS
THE DELIVERY OF THE CERTIFICATES REPRESENTING THE ADDITIONAL SHARE
CONSIDERATION UNDER SECTION 2.4(c) HEREOF, TO ANY OF ITS AFFILIATES AND/OR
STARBAND.
TERMINATION OF OBLIGATION TO ISSUE ADDITIONAL SHARE CONSIDERATION.
NOTWITHSTANDING ANYTHING TO THE CONTRARY SET FORTH HEREIN, THE PARTIES AGREE
THAT UPON PURCHASER'S COMPLETION OF A QUALIFIED PUBLIC OFFERING, PURCHASER
SHALL HAVE NO FURTHER OBLIGATION TO ISSUE ANY ADDITIONAL SHARE CONSIDERATION
TO GILAT UNDER THIS SECTION 2.4 AFTER THE DATE OF SUCH QUALIFIED PUBLIC
OFFERING.
THE SPECIAL DISTRIBUTION.
THE SPECIAL DISTRIBUTION.
IN CONNECTION WITH THE SALE AND THE OTHER TRANSACTIONS CONTEMPLATED HEREBY,
THE PARTIES HEREBY AGREE TO AMEND AND RESTATE PURCHASER'S THIRD AMENDED AND
RESTATED CERTIFICATE OF INCORPORATION IN THE FORM ATTACHED HERETO AS EXHIBIT
2.5 (THE "FOURTH AMENDED AND RESTATED CERTIFICATE OF INCORPORATION"). THE
PROPOSED AMENDMENTS SHALL (i) REPEAL THE PROHIBITION ON PURCHASER STOCKHOLDER
ACTION BY WRITTEN CONSENT, (ii) GRANT PURCHASER'S STOCKHOLDERS HOLDING AT
LEAST MAJORITY OF THE OUTSTANDING SHARES OF PURCHASER STOCK THE RIGHT TO CALL
A SPECIAL MEETING OF STOCKHOLDERS, AND (iii) GRANT PURCHASER'S STOCKHOLDERS
THE RIGHT TO RECEIVE A CASH DISTRIBUTION FROM PURCHASER PURSUANT TO SECTION
IV.B OF THE FOURTH AMENDED AND RESTATED CERTIFICATE OF INCORPORATION (THE
"SPECIAL DISTRIBUTION"). SUBJECT TO THE APPROVAL OF THE PROPOSED AMENDMENTS BY
THE HOLDERS OF A MAJORITY OF THE SHARES OF PURCHASER STOCK, THE RIGHT TO THE
SPECIAL DISTRIBUTION WILL ATTACH TO ALL OF THE OUTSTANDING SHARES OF PURCHASER
STOCK, IS REPRESENTED BY THE SAME CERTIFICATE THAT REPRESENTS SHARES OF
PURCHASER STOCK, AND WILL ENTITLE EACH HOLDER THEREOF TO THE SPECIAL
DISTRIBUTION, WHICH SHALL BE PAYABLE TO PURCHASER'S STOCKHOLDERS IN THE MANNER
DESCRIBED IN SECTION IV.B OF THE FOURTH AMENDED AND RESTATED CERTIFICATE
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OF INCORPORATION. PURCHASER'S OBLIGATION TO PAY THE SPECIAL DISTRIBUTION SHALL
EXPIRE ON THE DATE ON WHICH THE SECOND DISTRIBUTION AMOUNT (AS DEFINED IN THE
FOURTH AMENDED AND RESTATED CERTIFICATE OF INCORPORATION) IS DISTRIBUTED TO
HOLDERS OF SHARES OF PURCHASER STOCK, OR ON SUCH EARLIER DATE AS PRESCRIBED IN
SECTION IV.B OF THE FOURTH AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
AND SECTION 2.5(a)(ii) HEREOF.
NOTWITHSTANDING ANYTHING TO THE CONTRARY SET FORTH HEREIN, THE PARTIES AGREE
THAT UPON COMPLETION OF A QUALIFIED PUBLIC OFFERING, PURCHASER'S OBLIGATION TO
PAY THE SPECIAL DISTRIBUTION SHALL TERMINATE AND HOLDERS OF SHARES OF
PURCHASER STOCK SHALL HAVE NO RIGHTS WHATSOEVER IN, TO OR UNDER THE FIRST
DISTRIBUTION AMOUNT, THE SECOND DISTRIBUTION AMOUNT OR THE MAXIMUM
DISTRIBUTION AMOUNT. A "QUALIFIED PUBLIC OFFERING" IS THE CLOSING BY PURCHASER
OF A FIRMLY UNDERWRITTEN PUBLIC OFFERING OF PURCHASER STOCK RAISING GROSS
PROCEEDS TO PURCHASER OF AT LEAST $25 MILLION, WITH A PRICE FOR PURCHASER
STOCK OF AT LEAST $2.32 PER SHARE; IT BEING UNDERSTOOD BY THE PARTIES THAT
NEITHER GILAT ISRAEL NOR ITS AFFILIATES SHALL PARTICIPATE IN THE OFFERING.
GUARANTY. FOR THE BENEFIT OF EACH CURRENT AND FUTURE HOLDER OF SHARES OF
PURCHASER STOCK (OTHER THAN GILAT ISRAEL AND ITS AFFILIATES), GILAT ISRAEL
HEREBY AGREES THAT, IN THE EVENT THAT PURCHASER IS UNABLE TO MAKE THE SPECIAL
DISTRIBUTION TO ITS STOCKHOLDERS PURSUANT TO SECTION IV.B OF THE FOURTH
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION FOR ANY REASON, INCLUDING,
WITHOUT LIMITATION, BECAUSE IT HAS INSUFFICIENT FUNDS, NOT LATER THAN THREE
(3) BUSINESS DAYS PRIOR TO EACH PAYMENT DATE, GILAT ISRAEL WILL MAKE A CASH
CAPITAL CONTRIBUTION TO PURCHASER TO THE EXTENT AND IN AN AMOUNT NECESSARY FOR
PURCHASER TO SATISFY ITS OBLIGATION TO MAKE THE SPECIAL DISTRIBUTION UNDER
SECTION IV.B OF THE FOURTH AMENDED AND RESTATED CERTIFICATE OF INCORPORATION.
WAIVER OF SPECIAL DISTRIBUTION AND RESTRICTIONS ON TRANSFERS. FOR THE BENEFIT
OF EACH CURRENT AND FUTURE HOLDER OF SHARES OF PURCHASER STOCK (OTHER THAN
GILAT ISRAEL AND ITS AFFILIATES), GILAT ISRAEL AND SELLER, ON THEIR OWN
BEHALF, AND ON BEHALF OF THEIR AFFILIATES, HEREBY:
IRREVOCABLY WAIVE ANY AND ALL CLAIMS OR RIGHTS IT HAS IN, TO OR UNDER THE
SPECIAL DISTRIBUTION AND, WITHOUT LIMITING THE FOREGOING, AGREE THAT THEY SHALL
NOT BE ENTITLED
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TO RECEIVE ANY PORTION OF THE FIRST DISTRIBUTION AMOUNT, THE SECOND
DISTRIBUTION AMOUNT OR THE MAXIMUM DISTRIBUTION AMOUNT;
AGREE THAT PRIOR TO THE EARLIER OF (x) JUNE 30, 2004, (y) THE DATE ON WHICH
THE MAXIMUM DISTRIBUTION AMOUNT IS ACTUALLY PAID TO THE HOLDERS OF SHARES OF
PURCHASER STOCK UNDER SECTION IV.B OF THE FOURTH AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION, AND (z) THE DATE ON WHICH PURCHASER COMPLETES A
QUALIFIED PUBLIC OFFERING (SUCH EARLIER DATE REFERRED TO HEREIN AS THE
"SPECIAL DISTRIBUTION EXPIRATION DATE"), THEY SHALL NOT SELL, ASSIGN OR
OTHERWISE TRANSFER ANY SHARES OF PURCHASER STOCK HELD BY EITHER OF THEM TO ANY
PERSON, UNLESS, IN EACH CASE SUCH TRANSFER CONSTITUTES A PRIVATE TRANSACTION
(I.E., A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT) AND
(A) THE PROPOSED-TRANSFEREE AGREES TO HOLD THE TRANSFERRED SHARES OF PURCHASER
STOCK IN ITS OWN NAME AND NOT IN "STREET NAME" AND EXECUTES AND DELIVERS TO
PURCHASER A CERTIFICATE OF WAIVER (A "CERTIFICATE OF WAIVER") PURSUANT TO
WHICH THE PROPOSED-TRANSFEREE AGREES TO BE BOUND BY THE WAIVER AND THE
RESTRICTIONS ON THE TRANSFER OF SHARES OF PURCHASER STOCK SET FORTH IN THIS
SECTION 2.5(c) IN THE SAME MANNER AND TO THE SAME EXTENT AS GILAT ISRAEL,
SELLER AND THEIR AFFILIATES; (B) THE CERTIFICATES EVIDENCING SUCH SHARES OF
PURCHASER STOCK CONTAIN THE LEGEND REQUIRED UNDER SECTION 2.5(c)(iii) HEREOF;
AND (C) THE TRANSFER AGENT OF THE SHARES OF PURCHASER STOCK SHALL BE
INSTRUCTED (1) TO MAINTAIN A REGISTER OF ALL SHARES OF PURCHASER STOCK HELD BY
GILAT ISRAEL, SELLER, THEIR AFFILIATES AND THEIR PERMITTED ASSIGNEES AND
TRANSFEREES; (2) NOT TO PAY ANY SPECIAL DISTRIBUTION WITH RESPECT TO ANY
SHARES OF PURCHASER STOCK HELD BY ANY OF GILAT ISRAEL, SELLER, THEIR
AFFILIATES AND THEIR PERMITTED ASSIGNEES AND TRANSFEREES; AND (3) NOT TO
REGISTER THE TRANSFER OF ANY SUCH SHARES OF PURCHASER STOCK WITHOUT FIRST
HAVING OBTAINED AN OPINION OF COUNSEL TO THE EFFECT THAT THE REQUIREMENTS OF
CLAUSE (A) ABOVE HAVE BEEN SATISFIED; AND
AGREE AND ACKNOWLEDGE THAT THE CERTIFICATES REPRESENTING THE PURCHASER STOCK
HELD BY GILAT ISRAEL, SELLER AND THEIR AFFILIATES (AS WELL AS ANY CERTIFICATES
TRANSFERRED TO ANY TRANSFEREE IN ACCORDANCE WITH CLAUSE (ii) ABOVE), SHALL
BEAR A LEGEND INDICATING
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THE WAIVER AND RESTRICTIONS ON TRANSFER OF THE SHARES OF PURCHASER STOCK SET
FORTH IN THIS SECTION 2.5(c).
RESTRICTIONS ON NEW ISSUANCES.
FOR THE BENEFIT OF EACH CURRENT AND FUTURE HOLDER OF SHARES OF PURCHASER STOCK
(OTHER THAN GILAT ISRAEL AND ITS AFFILIATES), THE PARTIES AGREE THAT (AND
GILAT ISRAEL AND SELLER SHALL TAKE ALL STEPS REASONABLY NECESSARY TO ASSURE
THAT) UNTIL THE DATE IMMEDIATELY FOLLOWING THE SPECIAL DISTRIBUTION EXPIRATION
DATE, PURCHASER WILL NOT:
(A) sell or issue any additional shares of Purchaser Stock (other
than (1) shares of Purchaser Stock issued upon the exercise of stock options
for shares of Purchaser Stock that are outstanding as of the Closing Date and
(2) shares of Purchaser Stock issuable pursuant to employee stock option plans
or other stock based compensation plans; provided, however, that the number of
shares of Purchaser Stock that Purchaser may issue under the foregoing clause
(2) shall not exceed in the aggregate 1% of the issued and outstanding shares
of Purchaser Stock as of the closing of the Offer on a Fully Diluted Basis.
The Parties agree that all shares of Purchaser Stock issued under clauses (1)
and (2) of this paragraph (A) shall be entitled to the Special Distribution;
(B) sell, issue or grant any securities convertible into or
exercisable or exchangeable for shares of Purchaser Stock, in each case,
except to the extent that any such securities are not convertible into or
exercisable or exchangeable for shares of Purchaser Stock until the Expiration
Date (the "Qualified Convertible Securities"); or
(C) enter into any agreement that by its terms legally prohibits
Purchaser from making the Special Distribution.
NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED HEREIN, THE PARTIES AGREE
THAT PURCHASER SHALL NOT BE PRECLUDED OR RESTRICTED IN ANY WAY FROM SELLING,
ISSUING OR GRANTING, AS THE CASE MAY BE: (i) SHARES OF PURCHASER STOCK OR
SECURITIES CONVERTIBLE INTO OR EXERCISABLE OR EXCHANGEABLE FOR SHARES OF
PURCHASER STOCK (OTHER THAN QUALIFIED CONVERTIBLE SECURITIES) IF: (A) SUCH
SALE, ISSUANCE OR GRANT CONSTITUTES A PRIVATE TRANSACTION (I.E., A TRANSACTION
EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT); (B) THE PROPOSED PURCHASER
AGREES TO HOLD THE SHARES OF PURCHASER STOCK SO SOLD, ISSUED OR GRANTED IN ITS
OWN NAME AND NOT IN "STREET NAME;" (C) PRIOR TO SUCH SALE, ISSUANCE OR GRANT,
PURCHASER RECEIVES A DULY EXECUTED CERTIFICATE OF WAIVER FROM THE PERSON WHO
WILL RECEIVE SUCH SHARES OF PURCHASER STOCK OR SUCH CONVERTIBLE SECURITIES, AS
THE CASE MAY BE; (D) THE CERTIFICATES EVIDENCING SUCH SHARES CONTAIN THE
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LEGEND REQUIRED UNDER SECTION 2.5(c)(iii) HEREOF; AND (E) THE TRANSFER AGENT
OF THE SHARES OF PURCHASER STOCK SHALL BE INSTRUCTED (1) TO MAINTAIN A
REGISTER OF ALL SHARES ISSUED BY PURCHASER IN ACCORDANCE WITH THIS SECTION
2.5(d)(ii) AND THE PERMITTED ASSIGNEES AND TRANSFEREES OF SUCH SHARES OF
PURCHASER STOCK; (2) NOT TO PAY ANY SPECIAL DISTRIBUTION WITH RESPECT TO ANY
SHARES OF PURCHASER STOCK SO ISSUED; AND (3) NOT TO REGISTER THE TRANSFER OF
ANY SUCH SHARES WITHOUT FIRST HAVING OBTAINED AN OPINION OF COUNSEL TO THE
EFFECT THAT THE REQUIREMENTS OF CLAUSE (C) OF THIS SECTION 2.5(d)(ii) HAVE
BEEN SATISFIED, OR (II) ANY CLASS OF CAPITAL STOCK OF PURCHASER OTHER THAN
PURCHASER STOCK OR ANY SECURITIES CONVERTIBLE INTO OR EXERCISABLE OR
EXCHANGEABLE FOR SHARES OF A CLASS OF CAPITAL STOCK OF PURCHASER OTHER THAN
PURCHASER STOCK.
THE OFFER AND OTHER TRANSACTIONS
PURCHASER TENDER OFFER.
THE OFFER. AS SOON AS PRACTICABLE FOLLOWING THE EXECUTION OF THIS AGREEMENT,
PURCHASER SHALL COMMENCE (WITHIN THE MEANING OF RULE 14e-4(a)(4) PROMULGATED
UNDER THE EXCHANGE ACT) THE OFFER TO PURCHASE FROM ITS STOCKHOLDERS UP TO
6,315,789 SHARES OF PURCHASER STOCK IN EXCHANGE FOR SUCH STOCKHOLDER'S PRO
RATA SHARE OF THE OFFER CONSIDERATION; PROVIDED, HOWEVER, THAT NEITHER GILAT
ISRAEL NOR ANY OF ITS AFFILIATES SHALL TENDER ITS SHARES OF PURCHASER STOCK IN
THE OFFER. FOR PURPOSES OF THIS AGREEMENT, "OFFER CONSIDERATION" SHALL MEAN
$.95 AND .0738 OF AN ORDINARY SHARE FOR EACH SHARE OF PURCHASER STOCK VALIDLY
TENDERED IN, AND NOT PROPERLY WITHDRAWN FROM, THE OFFER; PROVIDED, HOWEVER,
THAT IN NO EVENT SHALL SUCH CONSIDERATION EXCEED, IN THE AGGREGATE, $6,000,000
(PLUS ANY AMOUNT OF CASH TO BE PAID IN LIEU OF FRACTIONAL ORDINARY SHARES) AND
466,105 ORDINARY SHARES. GILAT ISRAEL SHALL DELIVER TO PURCHASER THE REQUIRED
ORDINARY SHARES UPON PURCHASER'S EXERCISE OF THE OPTION GRANTED TO PURCHASER
PURSUANT TO AN AMENDED AND RESTATED OPTION AGREEMENT BETWEEN PURCHASER AND
GILAT ISRAEL, A FORM OF WHICH IS ATTACHED HERETO AS EXHIBIT 3.1 (THE
"OPTION"). PURCHASER AND GILAT ISRAEL SHALL ENTER INTO THE OPTION PRIOR TO THE
CLOSING.
Notwithstanding any other provisions of the Offer, if mutually agreed
to by Gilat Israel and Purchaser, Purchaser: (i) shall not be required to
accept for payment or, subject to any applicable rules and regulations of the
SEC (including, without limitation, Rule 14e-1(c) under the Exchange Act
relating to Purchaser's obligation to pay for or return tendered shares of
Purchaser Stock promptly after termination or withdrawal of the
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Offer), pay for any tendered shares; and (ii) may (x) delay the acceptance for
payment of any tendered shares and (y) terminate or, subject to the terms of
this Agreement, amend the Offer as to any shares not then paid for, if Gilat
Israel and Purchaser mutually agree that circumstances make it inadvisable to
proceed with the Offer. Purchaser may not otherwise change, modify, amend or
terminate the Offer without the prior express consent of Gilat Israel, which
consent shall not be unreasonably withheld.
EXPIRATION AND CONSUMMATION OF THE OFFER. THE OFFER SHALL EXPIRE ON THE CLOSE
OF BUSINESS ON THE CLOSING DATE. PAYMENT BY PURCHASER FOR ALL OF THE SHARES OF
PURCHASER STOCK ACCEPTED BY PURCHASER PURSUANT TO THE OFFER SHALL BE MADE
IMMEDIATELY FOLLOWING THE CLOSING; PROVIDED, HOWEVER, THAT THE OFFER SHALL BE
TERMINATED AND PURCHASER SHALL NOT ACCEPT FOR PAYMENT OR, SUBJECT TO ANY
APPLICABLE RULES AND REGULATIONS OF THE FEDERAL SECURITIES LAWS, PAY FOR ANY
SHARES OF PURCHASER STOCK TENDERED IN THE OFFER IF THIS AGREEMENT IS
TERMINATED OR THE SALE IS NOT CONSUMMATED FOR ANY REASON.
OFFER DOCUMENTS. AS SOON AS PRACTICABLE FOLLOWING THE EXECUTION OF THIS
AGREEMENT, PURCHASER SHALL PREPARE ALL NECESSARY FORMS, REPORTS, SCHEDULES,
STATEMENTS, AND OTHER DOCUMENTS (COLLECTIVELY, "SEC DOCUMENTS") WITH RESPECT
TO THE OFFER IN ACCORDANCE WITH APPLICABLE FEDERAL AND STATE SECURITIES LAWS,
INCLUDING, WITHOUT LIMITATION, A TENDER OFFER STATEMENT ON SCHEDULE TO (THE
"OFFER DOCUMENTS"). PURCHASER SHALL USE ALL OF ITS REASONABLE COMMERCIAL
EFFORTS TO FILE THE OFFER DOCUMENTS WITH THE SECURITIES & EXCHANGE COMMISSION
(THE "SEC") AND OTHER NECESSARY REGULATORY AUTHORITIES AS PROMPTLY AS
PRACTICABLE FOLLOWING THE DATE HEREOF; PROVIDED, HOWEVER, THAT SUCH OFFER
DOCUMENTS SHALL BE IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO GILAT
ISRAEL AND ITS COUNSEL. THE PARTIES AGREE THAT TO THE EXTENT NECESSARY TO
CONSUMMATE THE OFFER AND REQUIRED UNDER APPLICABLE LAW, GILAT ISRAEL AND
PURCHASER SHALL BE IDENTIFIED AS JOINT OFFERORS IN THE OFFER DOCUMENTS FILED
WITH THE SEC. PURCHASER WILL TAKE ALL STEPS REASONABLY NECESSARY TO CAUSE THE
OFFER DOCUMENTS TO BE DISSEMINATED TO ITS STOCKHOLDERS TO THE EXTENT AND IN
THE MANNER REQUIRED BY APPLICABLE FEDERAL AND STATE SECURITIES LAWS. IF AT ANY
TIME PRIOR TO THE CONSUMMATION OF THE OFFER ANY INFORMATION RELATING TO THE
BUSINESS, GILAT ISRAEL, SELLER OR PURCHASER, OR ANY OF THEIR RESPECTIVE
OFFICERS, DIRECTORS, OR AFFILIATES (INCLUDING THE OFFICERS AND DIRECTORS OF
SUCH AFFILIATES), SHOULD BE DISCOVERED BY GILAT ISRAEL, SELLER OR PURCHASER
WHICH SHOULD BE SET FORTH IN AN AMENDMENT OR SUPPLEMENT TO THE OFFER DOCUMENTS
SO THAT SUCH DOCUMENTS WOULD NOT INCLUDE ANY MISSTATEMENT OF A MATERIAL FACT
OR OMIT TO STATE ANY MATERIAL FACT NECESSARY TO MAKE THE STATEMENTS THEREIN,
IN LIGHT OF THE CIRCUMSTANCES UNDER WHICH THEY WERE MADE, NOT MISLEADING, THE
PARTY WHICH DISCOVERS SUCH INFORMATION SHALL
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PROMPTLY NOTIFY THE OTHER PARTIES HERETO AND AN APPROPRIATE AMENDMENT OR
SUPPLEMENT DESCRIBING SUCH INFORMATION SHALL BE PROMPTLY FILED WITH THE SEC
AND, TO THE EXTENT REQUIRED BY LAW, DISSEMINATED TO THE STOCKHOLDERS OF
PURCHASER.
VOTING AGREEMENT.
Simultaneously with the execution hereof, each of The Xxxxxxxxx 2000
Family Resource Trust, The Xxxxxxxxx Charitable Trust, CAVCO of North Florida,
Inc., The Arnouse Charitable Trust, and Xxxxxxx Arnouse (collectively, the
"Principal Stockholders"), Gilat Israel and Xxxxx Xxxxxxx shall each execute a
voting agreement substantially in the form attached hereto as Exhibit 3.2 (the
"Voting Agreement"), pursuant to which the parties shall agree to vote or
cause to be voted, at the Stockholder Meeting, all of the shares of Purchaser
Stock held by each such party in favor of the Sale and the other transactions
contemplated hereby (including any increase to Purchaser's authorized capital
stock, as may be required to consummate the Sale); provided, however, that the
Voting Agreement shall terminate immediately upon the termination of this
Agreement.
PROXY STATEMENT; FORM F-4 AND STOCKHOLDER MEETING.
PREPARATION AND FILING OF PROXY STATEMENT AND GILAT REGISTRATION STATEMENT. AS
SOON AS PRACTICABLE FOLLOWING THE EXECUTION OF THIS AGREEMENT, PURCHASER SHALL
PREPARE AND FILE WITH THE SEC A PROXY STATEMENT DESCRIBING THE SALE AND THE
OTHER TRANSACTIONS CONTEMPLATED HEREBY (THE "PROXY STATEMENT"); PROVIDED,
HOWEVER, THAT SUCH PROXY STATEMENT MUST BE IN FORM AND SUBSTANCE REASONABLY
SATISFACTORY TO SELLER AND ITS COUNSEL. AT THE SAME TIME, GILAT ISRAEL SHALL
PREPARE AND FILE ITS REGISTRATION STATEMENT ON FORM F-4 (OR SUCH OTHER
APPROPRIATE FORM, THE "GILAT REGISTRATION STATEMENT") COVERING THE ORDINARY
SHARES TO BE ISSUED IN CONNECTION WITH THE OFFER UPON EXERCISE OF THE OPTION
AND SHALL USE ITS COMMERCIALLY REASONABLE EFFORTS TO CAUSE THE GILAT
REGISTRATION STATEMENT TO BE DECLARED EFFECTIVE BY THE SEC AS PROMPTLY AS
PRACTICABLE. PURCHASER WILL USE ITS COMMERCIALLY REASONABLE EFFORTS TO CAUSE
THE PROXY STATEMENT TO BE MAILED TO PURCHASER'S STOCKHOLDERS AS PROMPTLY AS
PRACTICABLE AFTER THE GILAT REGISTRATION STATEMENT IS DECLARED EFFECTIVE UNDER
THE SECURITIES ACT, SUBJECT TO SEC REVIEW. NO FILING OF, OR AMENDMENT OR
SUPPLEMENT TO, SHALL BE MADE TO EITHER THE PROXY STATEMENT OR THE GILAT
REGISTRATION STATEMENT BY EITHER PURCHASER OR GILAT ISRAEL, AS THE CASE MAY
BE, WITHOUT PROVIDING THE OTHER A REASONABLE OPPORTUNITY TO REVIEW AND COMMENT
THEREON, EACH OF PURCHASER AND GILAT ISRAEL WILL ADVISE THE OTHER, PROMPTLY
AFTER IT RECEIVES NOTICE THEREOF, OF THE TIME WHEN THE GILAT REGISTRATION
STATEMENT HAS BECOME EFFECTIVE OR ANY SUPPLEMENT OR AMENDMENT HAS BEEN FILED,
THE ISSUANCE OF ANY STOP ORDER, OR ANY REQUEST BY THE SEC FOR AMENDMENT OF THE
PROXY STATEMENT OR THE GILAT REGISTRATION STATEMENT OR COMMENTS THEREON AND
RESPONSES THERETO
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OR REQUESTS BY THE SEC FOR ADDITIONAL INFORMATION. IF AT ANY TIME PRIOR TO THE
CLOSING DATE ANY INFORMATION RELATING TO GILAT ISRAEL, SELLER OR PURCHASER, OR
ANY OF THEIR RESPECTIVE OFFICERS, DIRECTORS, OR AFFILIATES (INCLUDING THE
OFFICERS AND DIRECTORS OF SUCH AFFILIATES), SHOULD BE DISCOVERED BY GILAT
ISRAEL, SELLER OR PURCHASER WHICH SHOULD BE SET FORTH IN AN AMENDMENT OR
SUPPLEMENT TO THE PROXY STATEMENT OR THE GILAT REGISTRATION STATEMENT, AS THE
CASE MAY BE, SO THAT ANY OF SUCH DOCUMENTS WOULD NOT INCLUDE ANY MISSTATEMENT
OF A MATERIAL FACT OR OMIT TO STATE ANY MATERIAL FACT NECESSARY TO MAKE THE
STATEMENTS THEREIN, IN LIGHT OF THE CIRCUMSTANCES UNDER WHICH THEY WERE MADE,
NOT MISLEADING, THE PARTY WHICH DISCOVERS SUCH INFORMATION SHALL PROMPTLY
NOTIFY THE OTHER PARTIES HERETO AND AN APPROPRIATE AMENDMENT OR SUPPLEMENT
DESCRIBING SUCH INFORMATION SHALL BE PROMPTLY FILED WITH THE SEC AND, TO THE
EXTENT REQUIRED BY LAW, DISSEMINATED TO THE STOCKHOLDERS OF PURCHASER.
STOCKHOLDER APPROVAL. AS SOON AS PRACTICABLE FOLLOWING THE EXECUTION OF THIS
AGREEMENT, PURCHASER SHALL (i) TAKE ALL ACTIONS REASONABLY NECESSARY IN
ACCORDANCE WITH THE DGCL AND PURCHASER'S THIRD AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION AND BYLAWS TO CONVENE AND HOLD A MEETING OF ITS
STOCKHOLDERS ("STOCKHOLDER MEETING") FOR THE PURPOSE OF OBTAINING THE APPROVAL
OF A MAJORITY OF ITS STOCKHOLDERS (THE "STOCKHOLDER APPROVAL") OF THIS
AGREEMENT, THE SALE, AND THE OTHER TRANSACTIONS CONTEMPLATED HEREBY (INCLUDING
ANY INCREASE TO PURCHASER'S AUTHORIZED CAPITAL STOCK, AS MAY BE REQUIRED TO
CONSUMMATE THE SALE); AND (ii) THROUGH ITS BOARD OF DIRECTORS, RECOMMEND TO
ITS STOCKHOLDERS THE APPROVAL AND ADOPTION OF THIS AGREEMENT, AND SUBJECT TO
THE SATISFACTION OF THE CONDITIONS SET FORTH HEREIN, THE SALE AND THE OTHER
TRANSACTIONS CONTEMPLATED HEREBY (INCLUDING ANY INCREASE TO PURCHASER'S
AUTHORIZED CAPITAL STOCK, AS MAY BE REQUIRED TO CONSUMMATE THE SALE).
NOTWITHSTANDING ANYTHING TO THE CONTRARY SET FORTH HEREIN, IF THE GILAT
REGISTRATION STATEMENT HAS NOT BEEN DECLARED EFFECTIVE BY THE SEC PRIOR TO THE
DATE OF THE STOCKHOLDER MEETING, PURCHASER AGREES TO TAKE SUCH ACTION, IN
ACCORDANCE WITH THE DGCL AND PURCHASER'S THIRD AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION AND BYLAWS, TO PROPERLY ADJOURN SUCH STOCKHOLDER
MEETING UNTIL SUCH TIME AS THE GILAT REGISTRATION STATEMENT HAS BEEN DECLARED
EFFECTIVE BY THE SEC.
FINANCIAL INFORMATION OF THE BUSINESS.
The Gilat Parties shall timely prepare, or shall cause to be timely
prepared, as promptly as practicable, and cause to be delivered to Purchaser a
balance sheet, income statement and such other financial statements for the
Business to the extent and in the form and manner required by the applicable
federal securities laws to be filed with the
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SEC or otherwise disclosed in the Proxy Statement, the Gilat Registration
Statement or the Offer Documents, as the case may be, in order to consummate
the Sale and the other transactions contemplated hereby.
REPRESENTATIONS AND WARRANTIES
In this Agreement, any reference to: (i) a "Company Material Adverse
Effect" shall mean any event, change or effect that fundamentally and
adversely affects the ability of the Company and its Subsidiaries, taken as a
whole, to own the Assets and operate the Business or otherwise materially and
adversely effects the financial condition of the Company or the Business as
reflected on the pro forma consolidated statements included in the Proxy
Statement that give effect to the Sale; provided, however, that none of the
following shall be deemed in themselves, either alone or in combination, to
constitute, and none of the following shall be taken into account in
determining whether there has been or will be, a Company Material Adverse
Effect: (a) any failure by the Company to meet internal projections or
forecasts or published revenue or earnings predictions for any period ending
on or after the date of this Agreement; (b) any adverse change, effect, event,
occurrence, state of facts or development attributable to conditions affecting
the industries in which the Company participates, the U.S. economy as a whole,
or foreign economies in any locations where Company or any of its Subsidiaries
has material operations or sales; (c) any adverse change, effect, event,
occurrence, state of facts or development arising from or relating to any
change in GAAP or any change in applicable Laws or the interpretation thereof;
or (d) any adverse change, effect, event, occurrence, state of facts or
development arising from or relating to actions required to be taken under
applicable Laws (other than the adoption of Laws which prevent the Company
from conducting the Business generally); (ii) "Purchaser Material Adverse
Effect" shall mean any event, change or effect that is materially adverse to
the financial condition, properties, assets (including intangible assets),
liabilities (including contingent liabilities), business, operations or
results of operations of Purchaser and its subsidiaries, taken as a whole; and
(iii) "Gilat Material Adverse Effect" shall mean any event, change or effect
that is materially adverse to the financial condition, properties, assets
(including intangible assets), liabilities (including contingent liabilities),
business, operations or results of operations of Gilat Israel and its
subsidiaries, taken as a whole. Notwithstanding the foregoing, with respect to
each of the Parties and after the date hereof, (i) changes or effects which
are primarily and directly caused by the execution and delivery of this
Agreement or the announcement of the transactions contemplated hereby and (ii)
changes in the market price or trading volume of a Parties' publicly traded
securities, shall not constitute a Company Material Adverse Effect, Purchaser
Material Adverse Effect or Gilat Material Adverse Effect, as the case may be
(it being understood that in any controversy concerning the applicability of
this proviso, the Party claiming the benefit of this proviso shall have the
burden of proof with respect to the elements of such proviso).
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In this Agreement, the words "aware," "knowledge" or similar words,
expressions or phrases with respect to a Party means such Party's actual
knowledge after reasonable inquiry of officers and directors of such Party and
its subsidiaries reasonably believed to have knowledge of the relevant
matters.
REPRESENTATIONS AND WARRANTIES OF THE GILAT PARTIES.
Gilat Israel and Seller, jointly and severally, represent and warrant
to Purchaser that, except as set forth in the Disclosure Schedule delivered by
Gilat Israel and Seller to Purchaser immediately prior to the execution and
delivery of this Agreement (the "Disclosure Schedule"), the statements
contained in Section 4.1 are true and correct. Reference to any Section in the
Disclosure Schedule shall be deemed to be a reference to all other Sections in
the Disclosure Schedule.
ORGANIZATION; STANDING AND AUTHORIZATION OF THE GILAT PARTIES. EACH OF GILAT
PARTIES IS AN ENTITY DULY ORGANIZED AND VALIDLY EXISTING AND IN GOOD STANDING
UNDER LAWS OF THE JURISDICTION OF ITS INCORPORATION. SELLER IS A DIRECT
WHOLLY-OWNED SUBSIDIARY OF GILAT TO HOME LATIN AMERICAN (NETHERLANDS ANTILLES)
N.V., WHICH IS A 97.5% CONTROLLED SUBSIDIARY OF XXXXX XXXXXXX. XXXXX XXXXXXX
IS THE DIRECT, WHOLLY-OWNED SUBSIDIARY OF GILAT ISRAEL. EACH OF THE GILAT
PARTIES HAS THE FULL POWER AND AUTHORITY TO OWN AND OPERATE ITS PROPERTIES AND
TO CARRY ON ITS BUSINESSES AS NOW CONDUCTED. EACH OF THE GILAT PARTIES HAS THE
POWER AND AUTHORITY TO ENTER INTO THIS AGREEMENT AND TO PERFORM ITS
OBLIGATIONS HEREUNDER AND ALL SUCH ACTION HAS BEEN DULY AND VALIDLY AUTHORIZED
BY ALL NECESSARY CORPORATE ACTION AND PROCEEDINGS. THIS AGREEMENT HAS BEEN
DULY AND VALIDLY AUTHORIZED, EXECUTED AND DELIVERED BY EACH OF THE GILAT
PARTIES, AND CONSTITUTES A VALID AND BINDING AGREEMENT OF SUCH EACH GILAT
PARTY, ENFORCEABLE AGAINST SUCH GILAT PARTY IN ACCORDANCE WITH ITS TERMS.
ORGANIZATION; STANDING AND CERTAIN ACTIONS OF THE COMPANY. THE COMPANY IS A
CORPORATION DULY ORGANIZED, VALIDLY EXISTING AND IN GOOD STANDING UNDER THE
LAWS OF THE NETHERLANDS AND WILL BE A DIRECT WHOLLY-OWNED SUBSIDIARY OF
SELLER. ON OR PRIOR TO THE CLOSING, THE COMPANY AND ITS SUBSIDIARIES, TAKEN AS
A WHOLE, SHALL OWN ALL OF THE ASSETS FREE AND CLEAR OF ANY LIENS AND SHALL
HAVE FULL AND COMPLETE RIGHTS, AUTHORITY AND POWER TO OPERATE AND CONDUCT THE
BUSINESS. AS OF THE CLOSING, THE COMPANY WILL CONDUCT NO BUSINESS OTHER THAN
THE BUSINESS.
CONSENTS; FILINGS. NO FILING OR REGISTRATION WITH, NO NOTIFICATION TO, AND NO
PERMIT, AUTHORIZATION, CONSENT OR APPROVAL OF, ANY GOVERNMENTAL ENTITY
(INCLUDING, WITHOUT LIMITATION, ANY FEDERAL, STATE OR LOCAL REGULATORY
AUTHORITY OR AGENCY) IS REQUIRED TO BE OBTAINED OR MADE BY ANY OF THE GILAT
PARTIES OR THE COMPANY IN CONNECTION WITH THE
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EXECUTION AND DELIVERY OF THIS AGREEMENT OR THE CONSUMMATION OF THE
TRANSACTIONS CONTEMPLATED HEREBY, EXCEPT AS WILL BE OBTAINED PRIOR TO THE
CLOSING DATE AND EXCEPT (i) AS REQUIRED BY (A) THE SECURITIES ACT AND THE
EXCHANGE ACT, (B) STATE SECURITIES OR "BLUE SKY" LAWS AND (C) THE NATIONAL
ASSOCIATION OF SECURITIES DEALERS, INC. ("NASD") OR THE NASDAQ NATIONAL MARKET
("NASDAQ"), AND (ii) SUCH OTHER FILINGS, REGISTRATIONS, NOTIFICATIONS,
PERMITS, AUTHORIZATIONS, CONSENTS OR APPROVALS THE FAILURE OF WHICH TO BE
OBTAINED, MADE OR GIVEN WOULD NOT, INDIVIDUALLY OR IN THE AGGREGATE, EITHER
HAVE A COMPANY MATERIAL ADVERSE EFFECT, A GILAT MATERIAL ADVERSE EFFECT OR AN
ADVERSE AFFECT UPON THE ABILITY OF THE GILAT PARTIES TO CONSUMMATE THE
TRANSACTIONS CONTEMPLATED HEREBY.
EFFECT OF AGREEMENTS; CONFLICTS.
The execution, delivery and performance by the Gilat Parties of this
Agreement and the consummation of the transactions contemplated hereby do not
and will not (i) violate, conflict with or result in a breach of any provision
of the Articles of Incorporation or Bylaws, or similar organizational
instruments of, the Gilat Parties or the Company, (ii) except to the extent
waived or consented to prior to the Closing Date, violate, conflict with, or
result in a breach of any provision of, require any consent, approval or
notice under, or constitute a default (or an event which, with notice or lapse
of time or both, would constitute a default) or result in a right of
termination or acceleration under, or result in the creation of any Lien upon
any of the properties or assets of the Gilat Parties or the Company under any
of the terms, conditions or provisions of any note, bond, mortgage, indenture,
deed of trust or a material Contract or other material instrument or
obligation to which (x) a Gilat Party is, or the Company as of the Closing
will be, a party or (y) by which a Gilat Party is, or the Company as of the
Closing will be, bound, or (z) to which a Gilat Party or the Company, or any
of its properties or assets, may be subject, (iii) violate any judgment,
ruling, order, writ, injunction, determination, award, decree, statute,
ordinance, rule or regulation applicable to a Gilat Party or the Company, or
any of its properties or assets, or (iv) cause the suspension or revocation of
any authorization, consent, approval or license obtained by or on behalf of a
Gilat Party or the Company, which violations, conflicts, breaches, defaults,
terminations, accelerations, liens, encumbrances, suspensions or revocations,
or which consents, approvals or notices the failure to obtain or give, would,
in the case of clauses (ii), (iii) and (iv), individually or in the aggregate,
be reasonably expected to result in a Company Material Adverse Effect.
LITIGATION AND COMPLIANCE.
EXCEPT AS DISCLOSED IN SEC DOCUMENTS FILED BY GILAT ISRAEL, THERE ARE NO
ACTIONS, SUITS OR PROCEEDINGS OF ANY KIND PENDING AGAINST, OR TO THE KNOWLEDGE
OF THE GILAT PARTIES, THREATENED AGAINST ANY OF THE GILAT PARTIES BEFORE ANY
COURT, GOVERNMENTAL OR REGULATORY AGENCY, BODY, COMMISSION OR ANY ARBITRATOR
THAT (A) QUESTIONS OR CALLS INTO QUESTION THE VALIDITY OF THIS AGREEMENT, (B)
INVOLVES OR ARISES OUT OF THE
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BUSINESS OR THE ASSETS (EXCEPT FOR SUCH ACTIONS, SUITS OR PROCEEDINGS THAT
WOULD NOT BE REASONABLY EXPECTED TO RESULT IN MATERIAL LIABILITY TO EITHER ONE
OR BOTH OF THE COMPANY OR THE BUSINESS), (C) MAY REASONABLY BE EXPECTED TO
HAVE A COMPANY MATERIAL ADVERSE EFFECT, A GILAT MATERIAL ADVERSE EFFECT OR AN
ADVERSE EFFECT UPON THE ABILITY OF THE GILAT PARTIES TO EFFECT THE
TRANSACTIONS CONTEMPLATED HEREBY, OR (D) WOULD REASONABLY BE EXPECTED TO
RESULT IN MATERIAL LIABILITY TO EITHER ONE OR BOTH OF THE COMPANY OR THE
BUSINESS AFTER THE CLOSING DATE.
EACH OF THE GILAT BUSINESS ENTITIES IS IN SUBSTANTIAL COMPLIANCE WITH, AND IS
NOT IN DEFAULT OR VIOLATION IN ANY RESPECT UNDER, ANY LAW APPLICABLE TO THE
BUSINESS OR ITS RESPECTIVE BUSINESS WHICH NONCOMPLIANCE, DEFAULT OR VIOLATION
WOULD BE REASONABLY EXPECTED TO RESULT IN A COMPANY MATERIAL ADVERSE EFFECT,
AND TO THE KNOWLEDGE OF THE GILAT PARTIES, NO SUCH DEFAULT OR VIOLATION HAS
BEEN ALLEGED.
CAPITALIZATION OF THE COMPANY; VALIDITY OF COMPANY SHARES AND ORDINARY SHARES.
AS OF THE CLOSING, THE AUTHORIZED CAPITAL STOCK OF THE COMPANY WILL CONSIST OF
100,000,000 SHARES OF COMMON STOCK, PAR VALUE EUR .01 (THE "COMPANY COMMON
STOCK") OF WHICH 60,000,000 SHARES WILL BE ISSUED AND OUTSTANDING (THE "COMPANY
SHARES"). AS OF THE CLOSING, SELLER WILL BE THE SOLE RECORD AND BENEFICIAL OWNER
OF ALL OF THE COMPANY SHARES FREE AND CLEAR OF ANY LIENS.
AS OF THE CLOSING, ALL OF THE COMPANY SHARES WILL BE VALIDLY ISSUED, FULLY
PAID, NON-ASSESSABLE AND, WITH RESPECT TO THIS TRANSACTION, FREE OF ANY
PREEMPTIVE RIGHTS OR SIMILAR RIGHTS CREATED BY STATUTE, THE ARTICLES OF
INCORPORATION OR BYLAWS OR SIMILAR ORGANIZATIONAL INSTRUMENTS OF THE COMPANY
OR ANY AGREEMENT TO WHICH THE COMPANY WILL BE A PARTY OR BY WHICH THE COMPANY
WILL BE BOUND. UPON THE CLOSING, PURCHASER SHALL ACQUIRE THE COMPANY SHARES
FREE AND CLEAR OF ALL LIENS.
AS OF THE CLOSING, EXCEPT AS SET FORTH IN SECTION 4.1(f)(iii) OF THE DISCLOSURE
SCHEDULE, THE COMPANY WILL NOT HAVE ANY COMMITMENTS TO ISSUE OR SELL ANY SHARES
OF ITS CAPITAL STOCK OR ANY OPTIONS, WARRANTS OR OTHER RIGHTS TO PURCHASE OR
SUBSCRIBE FOR, OR SECURITIES OR OBLIGATIONS CONVERTIBLE INTO, EXCHANGEABLE FOR
OR MEASURED BY THE MARKET PRICE OR VALUE OF, OR GIVING ANY PERSON ANY RIGHT TO
ACQUIRE FROM THE COMPANY, ANY SHARES OF ITS CAPITAL STOCK, AND NO SUCH OPTIONS,
WARRANTS OR OTHER
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RIGHTS OR SECURITIES OR OBLIGATIONS WILL BE OUTSTANDING. AS OF THE CLOSING,
THE COMPANY SHARES WILL NOT BE SUBJECT TO, AND THE COMPANY SHARES WILL NOT BE
ISSUED IN VIOLATION OF, ANY PREEMPTIVE RIGHTS (WITH RESPECT TO THIS
TRANSACTION ONLY), SHAREHOLDERS AGREEMENTS OR RIGHTS OF FIRST REFUSAL BY OR
WITH THE COMPANY OR SELLER.
ALL OF THE ORDINARY SHARES TO BE ISSUED UPON EXERCISE OF THE OPTION WILL BE
VALIDLY ISSUED, FULLY PAID, NON-ASSESSABLE AND FREE OF ANY PREEMPTIVE RIGHTS
OR SIMILAR RIGHTS CREATED BY STATUTE, THE ARTICLES OF ASSOCIATION AND
MEMORANDUM OF ASSOCIATION OR SIMILAR ORGANIZATIONAL INSTRUMENTS OF GILAT
ISRAEL OR ANY AGREEMENT TO WHICH GILAT ISRAEL IS A PARTY OR BY WHICH GILAT
ISRAEL IS BOUND. UPON ISSUANCE OF SUCH ORDINARY SHARES TO PURCHASER'S
STOCKHOLDERS UPON THE CONSUMMATION OF THE OFFER, SUCH STOCKHOLDERS WILL
ACQUIRE THE ORDINARY SHARES FREE AND CLEAR OF ALL LIENS.
SUBSIDIARIES OF THE COMPANY AND THE GILAT BUSINESS ENTITIES.
ON OR PRIOR TO THE CLOSING, THE GILAT PARTIES SHALL TRANSFER, OR CAUSE TO BE
TRANSFERRED, TO THE COMPANY ALL OWNERSHIP INTERESTS IN ANY ENTITIES FORMED BY
A GILAT PARTY EXCLUSIVELY TO CONDUCT THE BUSINESS, AS WELL AS IN GILAT TO HOME
BRAZIL HOLDINGS LTD. SUCH ENTITIES SHALL BE ON OR PRIOR TO THE CLOSING
SUBSIDIARIES OF THE COMPANY. THE GILAT PARTIES SHALL DELIVER TO PURCHASER ON
THE CLOSING A TRUE AND CORRECT LIST OF THE NAMES OF SUCH SUBSIDIARIES (THE
"SUBSIDIARIES") AND THEIR RESPECTIVE JURISDICTIONS OF ORGANIZATION. EXCEPT FOR
THE SUBSIDIARIES, AS OF THE CLOSING, THE COMPANY WILL NOT OWN ANY INTEREST,
DIRECT OR INDIRECT, AND WILL NOT HAVE ANY COMMITMENT TO PURCHASE ANY INTEREST,
DIRECT OR INDIRECT, IN ANY OTHER CORPORATION, PARTNERSHIP, LIMITED LIABILITY
COMPANY, JOINT VENTURE OR OTHER ENTERPRISE. EACH OF THE SUBSIDIARIES WILL BE
DULY ORGANIZED AND VALIDLY EXISTING AND IN GOOD STANDING UNDER THE LAWS OF THE
JURISDICTION OF ITS INCORPORATION, WITH FULL POWER AND AUTHORITY TO OWN AND
OPERATE ITS PROPERTIES AND TO CARRY ON ITS BUSINESSES AS NOW CONDUCTED.
SECTION 4.1(g)(ii) OF THE DISCLOSURE SCHEDULE SETS FORTH A TRUE AND COMPLETE
LIST OF ALL OF THE GILAT BUSINESS ENTITIES (OTHER THAN THE GILAT PARTIES) AND
THEIR RESPECTIVE JURISDICTIONS OF ORGANIZATION. EACH SUCH GILAT BUSINESS
ENTITIES IS DULY ORGANIZED AND VALIDLY EXISTING AND IN GOOD STANDING UNDER THE
LAWS OF THE JURISDICTION OF ITS
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INCORPORATION, WITH FULL POWER AND AUTHORITY TO OWN AND OPERATE ITS PROPERTIES
AND TO CARRY ON ITS BUSINESSES AS NOW CONDUCTED.
MASTER AGREEMENT; ASSETS AND LIABILITIES OF THE COMPANY; ENTIRE BUSINESS.
ON OR PRIOR TO THE CLOSING DATE, THE COMPANY SHALL:
have entered into a Master Agreement with Gilat Israel, substantially in the
form attached hereto as Exhibit 4.1(h) (the "Master Agreement"), pursuant to
which, among other things, the Company either directly or
indirectly through the Subsidiaries, shall be granted the non-exclusive right
to operate the Business in Mexico and the exclusive right to operate the
Business in the other Latin American countries (subject to the
limitations contained therein with respect to Chile);
have all right, title and interest in, to and under the assets of the
Business, including the Business Contracts described in Section 4.1(l) hereof,
each as set forth on Section 4.1(h)(i)(2) of the Disclosure
Schedule (the "Assets"); and
have assumed all of the liabilities of the Business (the "Liabilities")
including the material Liabilities set forth on Section 4.1(h)(i)(3) of
the Disclosure Schedule. For purposes of this Agreement and the
Disclosure Schedules, material Liabilities mean Liabilities that exceed $100,000
individually or $1 million in the aggregate.
NONE OF THE COMPANY, THE SUBSIDIARIES OR THE BUSINESS AS OF THE CLOSING WILL
BE SUBJECT TO OR HAVE ANY OBLIGATION WITH RESPECT TO ANY OBLIGATION OR
LIABILITY OF ANY KIND WHATSOEVER, WHETHER ACCRUED, ABSOLUTE, CONTINGENT,
DETERMINED, DETERMINABLE OR OTHERWISE THAT HAS A VALUE OF $100,000 OR MORE
OTHER THAN THE MATERIAL LIABILITIES LISTED ON SECTION 4.1(h)(i)(3) OF THE
DISCLOSURE SCHEDULE.
THE ASSETS, TOGETHER WITH THE COMMITMENTS OF THE GILAT PARTIES UNDER THE MASTER
AGREEMENT, AS OF THE CLOSING, WILL CONSTITUTE ALL OF THE ASSETS OF THE COMPANY
AND THE SUBSIDIARIES. EXCEPT AS SET FORTH ON SECTION 4.1(h)(iii) OF THE
DISCLOSURE SCHEDULE, THE ASSETS, TOGETHER WITH THE COMMITMENTS OF THE GILAT
PARTIES UNDER THE MASTER AGREEMENT, CONSTITUTE ALL OF THE ASSETS, OF ANY KIND OR
NATURE WHATSOEVER, OF ANY OF THE GILAT BUSINESS ENTITIES USED, OR INTENDED TO BE
USED, IN THE CONDUCT OF THE BUSINESS.
EXCEPT AS SET FORTH ON SCHEDULE 4.1(h)(iv), THE ASSETS, TOGETHER WITH THE
COMMITMENTS OF THE GILAT PARTIES UNDER THE MASTER AGREEMENT, CONSTITUTE ALL OF
THE ASSETS REASONABLY NECESSARY TO, IMMEDIATELY FOLLOWING THE CLOSING, OPERATE
THE BUSINESS, INCLUDING VOICE SERVICES RELATED TO THE BUSINESS ("VOICE
SERVICES"), AS CURRENTLY CONDUCTED AND (y) NO PORTION OF THE BUSINESS IS
CONDUCTED BY ANY PERSON OTHER THAN
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THE GILAT BUSINESS ENTITIES AND COMUNICACION Y TELEFONIA RURAL S.A., SERVICIOS
RURAL S.A., SERVICIOS RURALES DE TELECOMUNCACIONES S.A., CTR HOLDINGS LTD. AND
RURAL TELECOMUNICATIONS CHILE S.A., WHICH CONDUCT CERTAIN TELEPHONY SERVICES
IN CHILE.
AS OF THE CLOSING DATE, REVENUES GENERATED FROM VOICE SERVICES WILL HAVE AS OF
THE CLOSING DATE A POSITIVE CONTRIBUTION TO THE NET INCOME OF THE BUSINESS.
ALSO, AS OF THE CLOSING DATE, THE VALUE OF THE ASSETS SHALL EXCEED THE VALUE
OF THE LIABILITIES AS THEY WOULD BE REFLECTED ON A BALANCE SHEET OF THE
COMPANY, DATED THE CLOSING DATE, AND PREPARED IN ACCORDANCE WITH GAAP.
TITLE AND CONDITION OF ASSETS; LEASES.
THE GILAT BUSINESS ENTITIES, TAKEN AS A WHOLE, HAVE, AND THE COMPANY AND ITS
SUBSIDIARIES, TAKEN AS A WHOLE, AS OF THE CLOSING DATE, WILL HAVE GOOD TITLE
IN ALL OF THE ASSETS AND, WITH RESPECT TO THE TANGIBLE ASSETS, MARKETABLE
TITLE, FREE AND CLEAR OF MATERIAL LIENS, OTHER THAN THE MATERIAL LIENS SET
FORTH IN SECTION 4.1(h)(i)(2) OF THE DISCLOSURE SCHEDULE DESCRIBED ABOVE.
THE TANGIBLE ASSETS ARE IN GOOD WORKING CONDITION, ORDER AND REPAIR, SUITABLE
FOR THE PURPOSE FOR WHICH THEY ARE USED, ORDINARY WEAR AND TEAR EXCEPTED.
EXCEPT AS OTHERWISE SET FORTH IN SECTION 4.1(h)(i)(2) OF THE DISCLOSURE
SCHEDULE, AS OF THE CLOSING DATE, ALL OF THE ASSETS WILL BE OWNED BY THE
COMPANY OR ONE OF THE SUBSIDIARIES AND NONE OF THE GILAT BUSINESS ENTITIES
WILL HAVE ANY INTEREST IN SUCH ASSETS AFTER THE CLOSING DATE.
ALL OF THE REAL PROPERTIES AND ASSETS PURPORTED TO BE LEASED BY THE COMPANY
AND ITS SUBSIDIARIES AS OF THE CLOSING ARE SUBJECT TO VALID LEASES THAT ARE IN
FULL FORCE AND EFFECT, AND THERE DOES NOT EXIST, AND THE TRANSACTIONS
CONTEMPLATED HEREBY WILL NOT RESULT IN ANY DEFAULT OR EVENT THAT WITH NOTICE
OR THE LAPSE OF TIME, OR BOTH OR OTHERWISE, WOULD CONSTITUTE A DEFAULT UNDER
ANY SUCH LEASES. ALL REQUIRED CONSENTS TO TRANSFER SUCH LEASES, OR TO
SUB-LEASE THE REAL PROPERTIES AND ASSETS SUBJECT TO SUCH LEASE, TO THE COMPANY
OR A SUBSIDIARY, AS THE CASE MAY BE, ON OR PRIOR TO THE CLOSING WILL HAVE BEEN
OBTAINED.
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TAXES. EXCEPT AS SET FORTH ON SECTION 4.1(j) OF THE DISCLOSURE SCHEDULE, AND
WITH RESPECT TO THE SUBSIDIARIES TO THE BEST KNOWLEDGE OF THE GILAT PARTIES:
SELLER AND THE COMPANY AND ITS SUBSIDIARIES HAVE FILED OR CAUSED TO BE FILED
ALL MATERIAL TAX RETURNS REQUIRED TO HAVE BEEN FILED ON OR BEFORE THE CLOSING
DATE, AND ALL INFORMATION SET FORTH ON SUCH TAX RETURNS IS TRUE, ACCURATE AND
COMPLETE IN ALL MATERIAL RESPECTS;
SELLER AND THE COMPANY AND ITS SUBSIDIARIES HAVE PAID OR MADE ADEQUATE
PROVISION FOR ALL MATERIAL TAXES DUE AND PAYABLE BY THE COMPANY AND ITS
SUBSIDIARIES ON OR BEFORE THE CLOSING DATE;
THERE ARE NO MATERIAL UNPAID TAXES PAYABLE BY SELLER OR THE COMPANY, AND ITS
SUBSIDIARIES OR BY ANY OTHER PERSON THAT COULD RESULT IN ANY MATERIAL
LIABILITY TO PURCHASER;
THERE IS NO CURRENT OR PENDING AUDIT, EXAMINATION, ADMINISTRATIVE OR JUDICIAL
PROCEEDING, OR DEFICIENCY OR REFUND LITIGATION WITH RESPECT TO ANY TAXES OF OR
TAX RETURNS FILED BY SELLER OR THE COMPANY OR ITS SUBSIDIARIES, NOR HAS ANY
TAXING AUTHORITY FILED OR ASSERTED IN WRITING ANY CLAIM FOR THE ASSESSMENT OF
ANY UNPAID TAX AGAINST OR WITH RESPECT TO SELLER OR THE COMPANY OR ITS
SUBSIDIARIES;
SELLER AND THE COMPANY OR ITS SUBSIDIARIES ARE IN MATERIAL COMPLIANCE WITH ALL
APPLICABLE TAX INFORMATION REPORTING AND TAX WITHHOLDING REQUIREMENTS; SELLER
AND THE COMPANY AND ITS SUBSIDIARIES HAVE COLLECTED OR WITHHELD ALL AMOUNTS
REQUIRED TO BE COLLECTED OR WITHHELD BY THEM WITH RESPECT TO ANY TAXES, AND
ALL SUCH AMOUNTS HAVE BEEN PAID TO THE APPROPRIATE GOVERNMENTAL AGENCIES OR
SET ASIDE IN APPROPRIATE ACCOUNTS FOR FUTURE PAYMENT WHEN DUE; AND
SELLER'S, THE COMPANY'S, AND THE COMPANY'S SUBSIDIARIES' FINANCIAL STATEMENTS
FULLY AND PROPERLY REFLECT, AS OF THEIR RESPECTIVE DATES, THE MATERIAL
LIABILITIES OF SELLER, THE COMPANY, AND ITS SUBSIDIARIES, RESPECTIVELY, FOR ALL
TAXES.
For purposes of this Section 4.1(j), the term "material" shall mean an
amount of $100,000 or more.
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EMPLOYEE BENEFITS; ERISA.
SELLER HAS PREVIOUSLY MADE AVAILABLE (OR WILL MAKE AVAILABLE TO PURCHASER
PRIOR TO THE CLOSING DATE UPON REQUEST BY PURCHASER) TRUE AND COMPLETE COPIES
OR ACCURATE SUMMARIES OF ALL EMPLOYEE PLANS. FOR PURPOSES OF THIS AGREEMENT,
"EMPLOYEE PLANS" MEANS ALL TAX-QUALIFIED PENSION, DEFERRED COMPENSATION, STOCK
OPTION, STOCK PURCHASE, AND BONUS OR GROUP INSURANCE CONTRACTS AND ALL OTHER
EMPLOYEE BENEFIT PLANS, POLICIES OR PROGRAMS MAINTAINED FOR THE BENEFIT OF THE
EMPLOYEES.
THE EMPLOYEE PLANS, TO THE EXTENT SUBJECT TO ERISA, ARE IN COMPLIANCE WITH
ERISA AND OTHER RELEVANT EMPLOYMENT RELATED LAWS, EXCEPT TO THE EXTENT ANY
SUCH NONCOMPLIANCE WOULD NOT RESULT IN A MATERIAL LIABILITY TO THE COMPANY OR
THE BUSINESS AFTER THE CLOSING DATE. THERE ARE NO UNFUNDED OBLIGATIONS
RELATING TO PERIODS PRIOR TO THE CLOSING WITH RESPECT TO ANY EMPLOYEE PLAN.
EACH EMPLOYEE PLAN WHICH IS AN "EMPLOYEE PENSION BENEFIT PLAN" WITHIN THE
MEETING OF SECTION 3(2) OF ERISA AND WHICH IS INTENDED TO BE QUALIFIED UNDER
SECTION 401(a) OF THE CODE, HAS RECEIVED A FAVORABLE DETERMINATION LETTER FROM
THE INTERNAL REVENUE SERVICE WITH RESPECT TO "TRA" (AS DEFINED IN SECTION 1 OF
REV. PROC. 93-39) AND NEITHER GILAT ISRAEL NOR SELLER IS AWARE OF ANY
CIRCUMSTANCES LIKELY TO RESULT IN A REVOCATION OF ANY SUCH FAVORABLE
DETERMINATION LETTER. THERE IS NO PENDING OR THREATENED LITIGATION RELATING TO
THE EMPLOYEE PLANS THAT INVOLVES ANY EMPLOYEE OR THAT WOULD RESULT IN A
MATERIAL LIABILITY TO THE COMPANY AFTER THE CLOSING DATE. NONE OF THE GILAT
PARTIES OR THE COMPANY OR ITS SUBSIDIARIES HAS ENGAGED IN A TRANSACTION WITH
RESPECT TO ANY EMPLOYEE PLAN THAT, ASSUMING THE TAXABLE PERIOD OF SUCH
TRANSACTION EXPIRED AS OF THE DATE HEREOF, COULD SUBJECT THE COMPANY TO A TAX
OR PENALTY IMPOSED BY EITHER SECTION 4975 OF THE CODE OR SECTION 502(i) OF
ERISA IN AN AMOUNT WHICH WOULD BE MATERIAL. EMPLOYMENT MATTERS. SECTION
4.1(h)(ii)(3) OF THE DISCLOSURE SCHEDULE DESCRIBED ABOVE, SETS FORTH A TRUE
AND COMPLETE LIST OF THE NUMBER OF EMPLOYEES THAT WILL BE TRANSFERRED TO THE
COMPANY ON OR PRIOR TO THE CLOSING AND THEIR CURRENT POSITIONS WITH A GILAT
BUSINESS ENTITY. THERE ARE CURRENTLY NO OBLIGATIONS TO SUCH EMPLOYEES OTHER
THAN SALARIES, CUSTOMARY BENEFITS AND THE OPTIONS DESCRIBED ON SECTION
4.1(f)(iii) OF THE DISCLOSURE SCHEDULE. EACH OF THE GILAT PARTIES IS, AND THE
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COMPANY AND ITS SUBSIDIARIES AS OF THE CLOSING WILL BE, IN COMPLIANCE IN ALL
MATERIAL RESPECTS WITH ALL APPLICABLE LAWS RESPECTING EMPLOYMENT, HEALTH AND
EMPLOYMENT PRACTICES, TERMS AND CONDITIONS OF EMPLOYMENT, WAGES, HOURS AND
OCCUPATIONAL SAFETY, AND DISCRIMINATION IN EMPLOYMENT AND NONE OF THE GILAT
PARTIES IS, AND THE COMPANY AND ITS SUBSIDIARIES AS OF THE CLOSING WILL NOT
BE, ENGAGED IN ANY UNFAIR LABOR PRACTICE, WHERE THE FAILURE TO BE IN
COMPLIANCE (INDIVIDUALLY OR IN THE AGGREGATE) COULD HAVE A COMPANY MATERIAL
ADVERSE EFFECT OR COULD REASONABLY BE EXPECTED TO RESULT IN THE IMPOSITION
UPON THE COMPANY AFTER THE CLOSING DATE OF ANY MATERIAL PENALTY, LIABILITY,
PAYMENT OR OBLIGATION. THERE IS NO LABOR STRIKE, SLOWDOWN OR STOPPAGE PENDING
(OR, TO THE KNOWLEDGE OF THE GILAT PARTIES, ANY LABOR STRIKE OR STOPPAGE
THREATENED) AGAINST OR AFFECTING THE BUSINESS AFTER THE CLOSING DATE. TO THE
KNOWLEDGE OF THE GILAT PARTIES, NO PETITION FOR CERTIFICATION HAS BEEN FILED
AND IS PENDING BEFORE THE NATIONAL LABOR RELATIONS BOARD OR ANY SIMILAR
INTERNATIONAL REGULATORY ENTITY WITH RESPECT TO ANY EMPLOYEES. NONE OF THE
EMPLOYEES ARE, NOR WILL THEY BE AS OF THE CLOSING DATE, REPRESENTED BY ANY
LABOR UNION OR COVERED BY ANY COLLECTIVE BARGAINING AGREEMENT.
BUSINESS CONTRACTS.
SECTION 4.1(h)(i)(2) AND 4.1(h)(i)(3) OF THE DISCLOSURE SCHEDULE SETS FORTH
(x) ALL BUSINESS CONTRACTS TO WHICH THE COMPANY AND THE SUBSIDIARIES ARE A
PARTY OR BY WHICH ANY OF THE ASSETS OR THE BUSINESS ARE BOUND OR SUBJECT AND
(y) ALL OF THE BUSINESS CONTRACTS WHICH WILL BE TRANSFERRED TO THE COMPANY OR
A SUBSIDIARY ON OR PRIOR TO THE CLOSING, IN EACH CASE, EXCEPT FOR THOSE
BUSINESS CONTRACTS HAVING A TOTAL VALUE OF LESS THAN $100,000. EXCEPT AS SET
FORTH ON SECTION 4.1(h)(i)(2) AND 4.1(h)(i)(3) OF THE DISCLOSURE SCHEDULE,
NEITHER THE BUSINESS NOR THE ASSETS ARE SUBJECT TO OR BOUND BY ANY CONTRACT
HAVING A VALUE GREATER THAN OR EQUAL TO $100,000, WHICH IS A:
lease of real property or personal property;
license agreement;
employment or non-competition agreement;
agreement or other arrangement for the sale of goods or services to any
Government or Governmental authority;
agreement withany distributor, dealer, sales agent or representative;
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agreement with any manufacturer, supplier or customer with respect to
discounts or allowances or extended payment terms;
joint venture or partnership agreement;
agreement guaranteeing, indemnifying or creating liability for the obligations
or liabilities of another;
agreement for the borrowing or lending of money; agreement with any bank,
finance company or similar organization which acquires
accounts receivable or contracts for the sale or merchandise on credit;
agreement granting to any Person a Lien on any property or asset;
agreement for the construction or modification of any building or structure or
for the incurrence of any other capital expenditure in excess of $50,000; or
agreement which is material to the operation of the Business.
EXCEPT AS PROVIDED FOR IN THE MASTER AGREEMENT AND THE MASTER AGREEMENT
BETWEEN GILAT AND STARBAND, NEITHER THE BUSINESS NOR THE ASSETS IS SUBJECT TO
OR BOUND BY ANY CONTRACT WHICH IS AN AGREEMENT WHICH WILL RESTRICT ANY ONE OR
MORE OF PURCHASER, THE COMPANY AND THE SUBSIDIARIES FROM CONDUCTING THE
BUSINESS IN ANY MANNER ANYWHERE IN THE WORLD AFTER THE CLOSING.
ALL BUSINESS CONTRACTS ARE VALID AND IN FULL FORCE AND EFFECT AND CONSTITUTE
THE LEGAL, VALID AND BINDING OBLIGATIONS OF THE RELEVANT GILAT BUSINESS ENTITY
AND, TO THE KNOWLEDGE OF THE GILAT PARTIES, OF THE OTHER PARTIES THERETO.
THERE ARE NO EXISTING DEFAULTS BY THE GILAT BUSINESS ENTITIES TO ANY SUCH
BUSINESS CONTRACTS AND, TO THE KNOWLEDGE OF THE RELEVANT GILAT PARTIES, OF THE
OTHER PARTIES THERETO AND NO EVENT, ACT OR OMISSION HAS OCCURRED THAT WOULD
RESULT IN A DEFAULT THEREUNDER.
ON OR PRIOR TO THE CLOSING DATE, THE GILAT PARTIES SHALL, OR SHALL CAUSE THE
RELEVANT THE GILAT BUSINESS ENTITIES TO, ASSIGN AND TRANSFER ALL BUSINESS
CONTRACTS LISTED IN SECTION 4.1(h)(i)(2) AND 4.1(h)(i)(3) OF THE DISCLOSURE
SCHEDULE, TO THE COMPANY EFFECTIVE AS OF THE CLOSING DATE, AT WHICH TIME SUCH
BUSINESS CONTRACTS SHALL CONSTITUTE LEGAL, VALID AND BINDING OBLIGATIONS OF
THE COMPANY OR A SUBSIDIARY, AS THE CASE MAY BE, ENFORCEABLE IN ACCORDANCE
WITH THEIR RESPECTIVE TERMS. EXCEPT AS OTHERWISE SET FORTH IN SECTIONS
4.1(h)(i)(2) AND 4.1(h)(i)(3) OF THE DISCLOSURE SCHEDULE, ANY AND ALL CONSENTS
AND NOVATIONS NECESSARY TO TRANSFER AND ASSIGN THE BUSINESS CONTRACTS TO THE
COMPANY OR A SUBSIDIARY, AS THE CASE MAY BE, SHALL HAVE BEEN OBTAINED ON OR
PRIOR TO THE CLOSING.
INTELLECTUAL PROPERTY.
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THE GILAT BUSINESS ENTITIES OWN OR HAVE THE RIGHT TO USE ALL INTELLECTUAL
PROPERTY NECESSARY FOR THE CONDUCT OF THE BUSINESS. NONE OF THE INTELLECTUAL
PROPERTY INFRINGES OR VIOLATES THE INTELLECTUAL PROPERTY RIGHTS OF ANY THIRD
PARTIES. THE GILAT BUSINESS ENTITIES HAVE NOT RECEIVED ANY WRITTEN OR VERBAL
COMMUNICATION ALLEGING THAT THEY HAVE BEEN OR MAY BE ENGAGED IN, LIABLE FOR OR
CONTRIBUTING TO ANY INFRINGEMENT, NOR DO ANY OF THE GILAT BUSINESS ENTITIES HAVE
KNOWLEDGE THAT ANY SUCH COMMUNICATION WILL BE FORTHCOMING. THERE IS, TO THE
KNOWLEDGE OF THE GILAT BUSINESS ENTITIES, NO UNAUTHORIZED USE, EXERCISE,
EXPLOITATION, DISCLOSURE, INFRINGEMENT OR MISAPPROPRIATION OF ANY OF THE
INTELLECTUAL PROPERTY BY ANY THIRD PARTY, INCLUDING, WITHOUT LIMITATION, ANY
EMPLOYEE OR FORMER EMPLOYEE OF ANY OF THE GILAT BUSINESS ENTITIES. THE
INTELLECTUAL PROPERTY IS NOT SUBJECT TO ANY OUTSTANDING ORDER, JUDGMENT, DECREE,
STIPULATION OR AGREEMENT RESTRICTING IN ANY MANNER THE OWNERSHIP OR LICENSING
THEREOF BY PURCHASER. ON OR PRIOR TO THE CLOSING DATE, PURSUANT TO THE MASTER
AGREEMENT OR OTHERWISE, THE COMPANY OR A SUBSIDIARY, AS THE CASE MAY BE, SHALL
OWN OR HAVE THE RIGHT TO USE ALL OF THE INTELLECTUAL PROPERTY NECESSARY FOR THE
CONDUCT OF THE BUSINESS.
ALL OF THE LICENSED INTELLECTUAL PROPERTY IS LICENSED PURSUANT TO VALID WRITTEN
AGREEMENTS, ENFORCEABLE IN ACCORDANCE WITH THEIR TERMS.
FOR PURPOSES OF THIS SECTION 4.1(n):
"Copyrights" shall mean, as used in the Business, all registered and
unregistered copyrights and applications for copyright registration in every
country of the world; "Intellectual Property" shall mean Patents, Trademarks,
Copyrights and Know-How, including Licensed Intellectual Property;
"Know-How" shall mean, as used in the Business, technical information, trade
secrets, inventions, processes, specifications, manuals, reports, documents,
drawings, procedures, processes, devices, software and source code, software
documentation, flow charts, recording media, research and development data,
notebooks, marketing information, customer lists, database rights, other
tangible embodiments of information and proprietary rights other than
Copyrights, Patents and Trademarks, in every country of the world;
"Licensed Intellectual Property" shall mean all intellectual property owned by
third parties and licensed to any Gilat Business Entity and used in the
Business; "Patents" shall mean all utility and design patents and patent
applications (including any divisions, continuations, continuations-in-part,
reexaminations, extensions, renewals or
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reissues thereof), design, design registrations, utility models used in the
Business and any similar rights and applications therefor, in every country of
the world; and "Trademarks" shall mean all registered and unregistered
trademarks, service marks, trade dress, trade names, fictitious business names,
internet domain names, or other similar names used in the Business and
applications for registration of any of the foregoing, in every country of the
world.
ENVIRONMENTAL MATTERS. EXCEPT AS SET FORTH IN SECTION 4.1(o) OF THE DISCLOSURE
SCHEDULE AND EXCEPT AS WOULD NOT RESULT IN A COMPANY MATERIAL ADVERSE EFFECT:
EACH OF THE GILAT PARTIES HAS, AND THE COMPANY AND ITS SUBSIDIARIES AS OF THE
CLOSING WILL HAVE, OBTAINED ALL ENVIRONMENTAL PERMITS AND ALL LICENSES AND OTHER
AUTHORIZATIONS AND MADE ALL REGISTRATIONS AND GIVEN ALL NOTIFICATIONS THAT ARE
REQUIRED TO CONDUCT THE BUSINESS UNDER ANY APPLICABLE ENVIRONMENTAL LAW.
TO THE KNOWLEDGE OF THE GILAT PARTIES, THERE IS NO ENVIRONMENTAL CLAIM PENDING
AGAINST THE GILAT PARTIES OR THE COMPANY AND ITS SUBSIDIARIES UNDER AN
ENVIRONMENTAL LAW THAT WOULD RESULT IN MATERIAL LIABILITY TO THE COMPANY AFTER
THE CLOSING DATE.
EACH OF THE GILAT PARTIES IS, AND THE COMPANY AND ITS SUBSIDIARIES AS OF THE
CLOSING WILL BE, IN COMPLIANCE WITH (A) ALL TERMS AND CONDITIONS OF THEIR
ENVIRONMENTAL PERMITS AND (B) ALL APPLICABLE ENVIRONMENTAL LAWS.
NONE OF THE GILAT PARTIES GENERATE, TREAT, STORE, TRANSPORT, DISCHARGE, DISPOSE
OF OR RELEASE ANY HAZARDOUS MATERIALS ON OR FROM ANY PROPERTY NOW OR
PREVIOUSLY OWNED, LEASED OR USED BY THE GILAT PARTIES OR THAT WILL BE OWNED,
LEASED OR USED BY THE COMPANY AND ITS SUBSIDIARIES AFTER THE CLOSING.
FOR PURPOSES OF SECTION 4.1(o):
"Environment" shall mean any surface water, ground water, or drinking water
supply, land surface or subsurface strata, or ambient air and includes, without
limitation, any indoor location;
"Environmental Claim" means any written notice or written claim by any Person
alleging potential liability (including, without limitation, potential
liability for investigatory costs, cleanup costs, Governmental costs,
or harm, injuries or damages to any Person, property or
natural resources, and any fines or penalties) arising out of, based upon,
resulting from or relating to (A) the emission, discharge, disposal or other
release or threatened release in or into the Environment of any Hazardous
Materials or (B) circumstances forming the basis of any violation, or alleged
violation, of any applicable Environmental Law;
"Environmental Laws" means any federal, state, and local laws, codes,
and regulations as now or previously in effect relating to
pollution, the protection of human health, the
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protection of the Environment or the emission, discharge, disposal or other
release or threatened release of Hazardous Materials in or into the Environment;
"Environmental Permit" shall mean a permit, identification number, license or
other written authorization required under any applicable Environmental Law; and
"Hazardous Materials" shall mean all pollutants, contaminants, or chemical,
hazardous or toxic materials, substances, constituents or wastes, including,
without limitation, asbestos or asbestos-containing materials, polychlorinated
biphenyls and petroleum, oil, or petroleum or oil derivatives or constituents,
including, without limitation, crude oil or any fraction thereof.
SEC DOCUMENTS; GILAT REGISTRATION STATEMENT; FILING STATUS.
GILAT ISRAEL HAS FILED ALL SEC DOCUMENTS REQUIRED TO BE FILED BY IT SINCE
JANUARY 1, 2000 WITH THE SEC, EACH OF WHICH COMPLIED WHEN FILED IN ALL MATERIAL
RESPECTS WITH ALL APPLICABLE REQUIREMENTS OF THE SECURITIES ACT AND THE EXCHANGE
ACT AND DO NOT CONTAIN ANY UNTRUE STATEMENT OF A MATERIAL FACT OR OMIT TO STATE
ANY MATERIAL FACT REQUIRED TO BE STATED THEREIN OR NECESSARY TO MAKE THE
STATEMENTS THEREIN, IN LIGHT OF THE CIRCUMSTANCES UNDER WHICH THEY WERE MADE,
NOT MISLEADING. SINCE THE DATE OF GILAT ISRAEL'S ANNUAL REPORT ON FORM 20F FOR
THE YEAR ENDED JANUARY 1, 1999, GILAT ISRAEL HAS NOT HAD ANY GILAT MATERIAL
ADVERSE EFFECT.
NONE OF THE INFORMATION SUPPLIED OR TO BE SUPPLIED BY OR ON BEHALF OF GILAT
ISRAEL EXPRESSLY FOR INCLUSION OR INCORPORATION BY REFERENCE IN THE DEFINITIVE
FORM OF THE GILAT REGISTRATION STATEMENT TO BE FILED WITH THE SEC OR MAILED TO
PURCHASER'S STOCKHOLDERS WILL AT THE DATES MAILED TO PURCHASERS' STOCKHOLDERS
AND FILED WITH THE SEC CONTAIN ANY UNTRUE STATEMENT OF A MATERIAL FACT OR OMIT
TO STATE ANY MATERIAL FACT REQUIRED TO BE STATED THEREIN OR NECESSARY IN ORDER
TO MAKE THE STATEMENTS THEREIN, IN LIGHT OF THE CIRCUMSTANCES UNDER WHICH THEY
ARE MADE, NOT MISLEADING. THE GILAT REGISTRATION STATEMENT WILL COMPLY AS TO
FORM IN ALL MATERIAL RESPECTS WITH THE PROVISIONS OF THE SECURITIES ACT AND THE
RULES AND REGULATIONS PROMULGATED THEREUNDER EXCEPT THAT NO REPRESENTATION IS
MADE BY GILAT ISRAEL WITH RESPECT TO INFORMATION RELATING TO OR SUPPLIED BY
PURCHASER OR ITS AFFILIATES (EXCLUDING GILAT ISRAEL AND ITS OFFICERS AND
DIRECTORS, BUT INCLUDING THE OFFICERS AND DIRECTORS OF PURCHASER AND ITS OTHER
AFFILIATES).
GILAT ISRAEL IS A "FOREIGN PRIVATE ISSUER" AS THAT TERM IS DEFINED IN RULE 3B-4
UNDER THE EXCHANGE ACT.
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NO BROKER. EXCEPT FOR XXXXXX XXXXXXX XXXX XXXXXX & CO., WHOSE FEES WILL BE PAID
SOLELY BY SELLER, NEITHER GILAT ISRAEL NOR SELLER HAS EMPLOYED OR RETAINED ANY
BROKER, CONSULTANT OR OTHER INTERMEDIARY IN CONNECTION WITH THE TRANSACTIONS
CONTEMPLATED HEREBY WHO WOULD BE ENTITLED TO A BROKER'S, FINDER'S OR SIMILAR FEE
OR COMMISSION IN CONNECTION THEREWITH. LICENSES. ON OR PRIOR TO THE CLOSING, THE
COMPANY WILL HAVE, OR HAVE THE BENEFIT OF, ALL LICENSES, APPROVALS,
AUTHORIZATIONS, CONSENTS, FRANCHISES, ORDERS OR OTHER PERMITS OF ALL
GOVERNMENTAL OR REGULATORY AGENCIES, WHETHER FEDERAL, STATE, LOCAL OR FOREIGN,
AND OF ANY THIRD PARTIES (WHERE APPLICABLE), NECESSARY FOR THE OPERATION OF THE
BUSINESS AS CURRENTLY CONDUCTED (COLLECTIVELY, THE "LICENSES"); PROVIDED,
HOWEVER, THAT IN THE EVENT THAT ANY LICENSE CANNOT BE TRANSFERRED OR OTHERWISE
ASSIGNED TO THE COMPANY OR ONE OF ITS SUBSIDIARIES ON OR PRIOR TO CLOSING
(EITHER AS A RESULT OF PROHIBITIONS UNDER APPLICABLE LAW OR UNDER EXISTING TERMS
AND CONDITIONS OF ANY BUSINESS CONTRACTS), THE GILAT PARTIES SHALL TAKE ALL
ACTIONS REASONABLY NECESSARY TO ENSURE THAT, WITHOUT ANY COST OR EXPENSE TO THE
COMPANY, THE COMPANY HAS THE BENEFIT OF SUCH NON-TRANSFERABLE LICENSE ON OR
PRIOR TO THE CLOSING TO THE EXTENT NECESSARY TO OPERATE THE BUSINESS AS
CURRENTLY CONDUCTED. ALL LICENSES WILL BE IN FULL FORCE AND EFFECT AS OF THE
CLOSING.
REPRESENTATIONS AND WARRANTIES OF PURCHASER.
Purchaser hereby represents and warrants to Seller and Gilat Israel as follows:
ORGANIZATION AND AUTHORIZATION. PURCHASER IS A CORPORATION DULY INCORPORATED,
VALIDLY EXISTING AND IN GOOD STANDING UNDER LAWS OF THE STATE OF DELAWARE AND IS
QUALIFIED TO DO BUSINESS AND IS IN GOOD STANDING AS A FOREIGN CORPORATION IN
EACH JURISDICTION WHERE IT IS REQUIRED TO BE SO QUALIFIED BY THE CONDUCT OF ITS
BUSINESS OR THE NATURE OF ITS ASSETS. PURCHASER HAS THE FULL POWER AND AUTHORITY
TO OWN AND OPERATE ITS PROPERTIES AND TO CARRY ON ITS BUSINESS AS NOW CONDUCTED.
PURCHASER HAS THE POWER AND AUTHORITY TO ENTER INTO THIS AGREEMENT AND TO
PERFORM THE OBLIGATIONS HEREUNDER AND ALL SUCH ACTION HAS BEEN DULY AND VALIDLY
AUTHORIZED BY ALL NECESSARY CORPORATE PROCEEDINGS, SUBJECT TO SECTIONS 5.1(a)
AND (d) HEREOF. THIS AGREEMENT HAS BEEN DULY AND VALIDLY AUTHORIZED, EXECUTED
AND DELIVERED BY PURCHASER AND CONSTITUTES A VALID AND BINDING AGREEMENT OF
PURCHASER, ENFORCEABLE AGAINST PURCHASER IN ACCORDANCE WITH ITS TERMS.
CONSENTS; FILINGS. NO FILING OR REGISTRATION WITH, NOTIFICATION TO AND NO
PERMIT, AUTHORIZATION, CONSENT OR APPROVAL OF ANY GOVERNMENTAL ENTITY IS
REQUIRED BY PURCHASER OR ANY OF PURCHASER'S SUBSIDIARIES IN CONNECTION WITH THE
EXECUTION AND DELIVERY OF THIS AGREEMENT OR THE CONSUMMATION BY PURCHASER OF THE
TRANSACTIONS CONTEMPLATED HEREBY,
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EXCEPT AS SET FORTH IN SCHEDULE 4.2(b) HERETO AND EXCEPT: (i) AS REQUIRED BY (A)
THE SECURITIES ACT AND THE EXCHANGE ACT, (B) STATE SECURITIES OR "BLUE SKY"
LAWS, AND (C) THE NASDAQ AND (II) SUCH OTHER FILINGS, REGISTRATIONS,
NOTIFICATIONS, PERMITS, AUTHORIZATIONS, CONSENTS OR APPROVALS THE FAILURE OF
WHICH TO BE OBTAINED, MADE OR GIVEN WOULD NOT, INDIVIDUALLY OR IN THE AGGREGATE,
MATERIALLY IMPAIR PURCHASER'S ABILITY TO CONSUMMATE THE TRANSACTIONS
CONTEMPLATED HEREBY.
LITIGATION AND COMPLIANCE.
AS OF THE DATE HEREOF, EXCEPT AS DISCLOSED IN PURCHASER'S SEC DOCUMENTS, THERE
ARE NO ACTIONS, SUITS OR PROCEEDINGS OF ANY KIND PENDING AGAINST, OR TO
PURCHASER'S KNOWLEDGE, THREATENED AGAINST PURCHASER OR ANY OF ITS AFFILIATES
(EXCLUDING THE GILAT BUSINESS ENTITIES AND THEIR RESPECTIVE OFFICERS AND
DIRECTORS, BUT INCLUDING THE OFFICERS AND DIRECTORS OF PURCHASER AND ITS OTHER
AFFILIATES) BEFORE ANY COURT, GOVERNMENTAL OR REGULATORY AGENCY, BODY,
COMMISSION OR ANY ARBITRATOR THAT (A) QUESTIONS OR CALLS INTO QUESTION THE
VALIDITY OF THIS AGREEMENT OR (B) THAT MAY REASONABLY BE EXPECTED TO HAVE A
PURCHASER MATERIAL ADVERSE EFFECT OR AN ADVERSE EFFECT UPON THE ABILITY OF
PURCHASER TO EFFECT THE TRANSACTIONS CONTEMPLATED HEREBY. EACH OF PURCHASER AND
ITS SUBSIDIARIES IS IN SUBSTANTIAL COMPLIANCE WITH, AND IS NOT IN DEFAULT OR
VIOLATION IN ANY RESPECT UNDER, ANY LAW APPLICABLE TO ITS BUSINESS WHICH
NONCOMPLIANCE, DEFAULT OR VIOLATION WOULD BE REASONABLY EXPECTED TO HAVE A
PURCHASER MATERIAL ADVERSE EFFECT, AND TO THE KNOWLEDGE OF PURCHASER, NO SUCH
DEFAULT OR VIOLATION HAS BEEN ALLEGED.
EFFECT OF AGREEMENTS; CONFLICTS. THE EXECUTION, DELIVERY AND PERFORMANCE BY
PURCHASER OF THIS AGREEMENT AND THE CONSUMMATION OF THE TRANSACTIONS
CONTEMPLATED HEREBY, DO NOT AND WILL NOT (i) VIOLATE, CONFLICT WITH OR RESULT IN
A BREACH OF ANY PROVISION OF ITS ARTICLES OF INCORPORATION OR BYLAWS, (ii)
VIOLATE, CONFLICT WITH, OR RESULT IN A BREACH OF ANY PROVISION OF, REQUIRE ANY
CONSENT, APPROVAL OR NOTICE UNDER, OR CONSTITUTE A DEFAULT (OR AN EVENT THAT,
WITH NOTICE OR LAPSE OF TIME OR BOTH, WOULD CONSTITUTE A DEFAULT) OR RESULT IN A
RIGHT OF TERMINATION OR ACCELERATION UNDER, OR RESULT IN THE CREATION OF ANY
LIEN UPON, ANY OF THE PROPERTIES OR ASSETS OF PURCHASER UNDER ANY OF THE TERMS,
CONDITIONS OR PROVISIONS OF ANY NOTE, BOND, MORTGAGE, INDENTURE, DEED OF TRUST
OR A MATERIAL CONTRACT OR OTHER MATERIAL INSTRUMENT OR OBLIGATION TO WHICH
PURCHASER IS A PARTY OR BY WHICH PURCHASER IS BOUND OR
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TO WHICH PURCHASER, OR ANY OF ITS PROPERTIES OR ASSETS, MAY BE SUBJECT,
(iii) VIOLATE ANY JUDGMENT, RULING, ORDER, WRIT, INJUNCTION, DETERMINATION,
AWARD, DECREE, STATUTE, ORDINANCE, RULE OR REGULATION APPLICABLE TO PURCHASER,
OR ANY OF ITS RESPECTIVE PROPERTIES OR ASSETS, OR (iv) CAUSE THE SUSPENSION OR
REVOCATION OF ANY AUTHORIZATION, CONSENT, APPROVAL OR LICENSE OBTAINED BY OR ON
BEHALF OF PURCHASER, WHICH VIOLATIONS, CONFLICTS, BREACHES, DEFAULTS,
TERMINATIONS, ACCELERATIONS, LIENS, ENCUMBRANCES, SUSPENSIONS OR REVOCATIONS, OR
WHICH CONSENTS, APPROVALS OR NOTICES THE FAILURE TO OBTAIN OR GIVE, WOULD, IN
THE CASE OF CLAUSES (ii), (iii) AND (iv), INDIVIDUALLY OR IN THE AGGREGATE, BE
REASONABLY EXPECTED TO PREVENT, RESTRICT OR DELAY THE CONSUMMATION OF THE
TRANSACTIONS CONTEMPLATED HEREBY.
PURCHASER STOCK. ALL SHARES OF PURCHASER STOCK THAT WILL BE ISSUED AND DELIVERED
TO SELLER OR GILAT ISRAEL, AS THE CASE MAY BE, PURSUANT TO SECTIONS 2.1 AND 2.4
HEREOF WILL BE DULY AUTHORIZED AND, WHEN DELIVERED AND PAID FOR IN ACCORDANCE
WITH THE TERMS HEREUNDER, WILL BE VALIDLY ISSUED, FULLY PAID AND NON-ASSESSABLE,
AND FREE OF PREEMPTIVE RIGHTS WITH NO PERSONAL LIABILITY ATTACHING TO THE
OWNERSHIP THEREOF AND INCLUDED FOR TRADING ON THE NASDAQ UPON OFFICIAL NOTICE OF
ISSUANCE.
EMPLOYEE AGREEMENTS AND PLANS. SCHEDULE 4.2(f) HERETO SETS FORTH A TRUE AND
COMPLETE LIST OF ALL OF PURCHASER'S CURRENT BONUS, INCENTIVE, DEFERRED
COMPENSATION, STOCK PURCHASE, STOCK OPTION, STOCK APPRECIATION RIGHTS, GROUP
INSURANCE, SEVERANCE PAY, RETIREMENT, GOLDEN PARACHUTE OR OTHER BENEFIT PLAN,
CONTRACTS, OR EMPLOYMENT OR CONSULTING CONTRACTS APPLICABLE TO ANY OF THE
DIRECTORS AND OFFICERS OF PURCHASER AND ANY CONSULTANTS RETAINED BY PURCHASER,
WHICH PURCHASER SHALL MAKE AVAILABLE TO SELLER PRIOR TO THE CLOSING UPON REQUEST
BY SELLER.
CAPITALIZATION OF PURCHASER. THE AUTHORIZED CAPITAL STOCK OF PURCHASER CONSISTS
OF 200,000,000 SHARES OF PURCHASER STOCK AND 5,000,000 SHARES OF PREFERRED
STOCK, PAR VALUE $.01 PER SHARE, OF PURCHASER. AS OF AUGUST 28, 2001, 63,792,044
SHARES OF PURCHASER STOCK WERE ISSUED AND OUTSTANDING. ALL OF SUCH ISSUED AND
OUTSTANDING SHARES OF PURCHASER STOCK ARE VALIDLY ISSUED, FULLY PAID AND
NON-ASSESSABLE AND FREE OF PREEMPTIVE RIGHTS. AS OF THE DATE HEREOF, 3,046,122
SHARES OF PURCHASER STOCK WERE RESERVED FOR ISSUANCE UPON EXERCISE OF
OUTSTANDING OPTIONS, WARRANTS, CALLS, CLAIMS, RIGHTS (INCLUDING WITHOUT
LIMITATION ANY STOCK APPRECIATION OR SIMILAR RIGHTS), CONVERTIBLE SECURITIES OR
OTHER AGREEMENTS OR COMMITMENTS TO PURCHASE OR OTHERWISE ACQUIRE SHARES OF
PURCHASER'S CAPITAL STOCK. EXCEPT AS SET FORTH ABOVE AND AS OTHERWISE
CONTEMPLATED BY THIS AGREEMENT, THERE ARE NOT NOW, AND AS OF THE CLOSING DATE
THERE WILL NOT BE, ANY SHARES OF CAPITAL STOCK OF PURCHASER ISSUED OR
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OUTSTANDING OR ANY SUBSCRIPTIONS, OPTIONS, WARRANTS, CALLS, CLAIMS, RIGHTS
(INCLUDING WITHOUT LIMITATION ANY STOCK APPRECIATION OR SIMILAR RIGHTS),
CONVERTIBLE SECURITIES OR OTHER AGREEMENTS OR COMMITMENTS OF ANY CHARACTER
OBLIGATING PURCHASER TO ISSUE, TRANSFER OR SELL ANY OF ITS SECURITIES. EXCEPT AS
DISCLOSED IN SCHEDULE 4.2(g) HERETO, NONE OF PURCHASER AND ITS SUBSIDIARIES IS
PARTY TO ANY CONTRACT OR OTHER OBLIGATION RELATING TO OR PROVIDING FOR
REGISTRATION RIGHTS WITH RESPECT TO ITS CAPITAL STOCK.
SEC DOCUMENTS; PROXY STATEMENT AND OFFER DOCUMENTS; AND STOCKHOLDER MEETING.
PURCHASER HAS FILED ALL SEC DOCUMENTS REQUIRED TO BE FILED BY IT SINCE JANUARY
1, 2000 WITH THE SEC, EACH OF WHICH COMPLIED WHEN FILED IN ALL MATERIAL RESPECTS
WITH ALL APPLICABLE REQUIREMENTS OF THE SECURITIES ACT AND THE EXCHANGE ACT AND
DO NOT CONTAIN ANY UNTRUE STATEMENT OF A MATERIAL FACT OR OMIT TO STATE ANY
MATERIAL FACT REQUIRED TO BE STATED THEREIN OR NECESSARY TO MAKE THE STATEMENTS
THEREIN, IN LIGHT OF THE CIRCUMSTANCES UNDER WHICH THEY WERE MADE, NOT
MISLEADING.
NONE OF THE INFORMATION SUPPLIED OR TO BE SUPPLIED BY OR ON BEHALF OF PURCHASER
EXPRESSLY FOR INCLUSION OR INCORPORATION BY REFERENCE IN THE DEFINITIVE FORM OF
(A) THE PROXY STATEMENT, OR IN THE RELATED PROXY AND NOTICE OF MEETING OR OTHER
SOLICITING MATERIALS USED IN CONNECTION THEREWITH, OR (B) ANY OF THE OFFER
DOCUMENTS TO BE FILED WITH THE SEC OR MAILED TO PURCHASER'S STOCKHOLDERS WILL AT
THE DATES MAILED TO PURCHASERS' STOCKHOLDERS AND FILED WITH THE SEC CONTAIN ANY
UNTRUE STATEMENT OF A MATERIAL FACT OR OMIT TO STATE ANY MATERIAL FACT REQUIRED
TO BE STATED THEREIN OR NECESSARY IN ORDER TO MAKE THE STATEMENTS THEREIN, IN
LIGHT OF THE CIRCUMSTANCES UNDER WHICH THEY ARE MADE, NOT MISLEADING. THE PROXY
STATEMENT AND OFFER DOCUMENTS WILL COMPLY AS TO FORM IN ALL MATERIAL RESPECTS
WITH THE PROVISIONS OF THE SECURITIES ACT, THE EXCHANGE ACT AND THE RULES AND
REGULATIONS PROMULGATED THEREUNDER EXCEPT THAT NO REPRESENTATION IS MADE BY
PURCHASER WITH RESPECT TO INFORMATION RELATING TO OR SUPPLIED BY GILAT ISRAEL OR
ITS AFFILIATES (EXCLUDING PURCHASER AND ITS OFFICERS AND DIRECTORS, BUT
INCLUDING THE OFFICERS AND DIRECTORS OF GILAT ISRAEL AND ITS OTHER AFFILIATES).
IN ACCORDANCE WITH APPLICABLE FEDERAL SECURITIES LAWS, THE DGCL AND PURCHASER'S
CERTIFICATE OF INCORPORATION AND BYLAWS, THE STOCKHOLDER MEETING SHALL BE DULY
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CALLED AND HELD AND PROPER NOTICE THEREOF SHALL BE PROVIDED TO PURCHASER'S
STOCKHOLDERS.
NO RESTRICTIONS ON PAYMENT OF DIVIDENDS. EXCEPT AS CONTEMPLATED BY THIS
AGREEMENT, AS OF THE DATE HEREOF, PURCHASER IS NOT, AND AS OF THE CLOSING DATE
PURCHASER WILL NOT BE, SUBJECT TO ANY CONTRACT OR OTHER OBLIGATION WITH ANY
PERSON THAT IN ANY WAY PREVENTS, PROHIBITS, OR OTHERWISE RESTRICTS OR CONDITIONS
PURCHASER'S ABILITY TO MAKE OR PAY THE FIRST DISTRIBUTION AMOUNT, SECOND
DISTRIBUTION AMOUNT OR THE MAXIMUM DISTRIBUTION AMOUNT, AS THE CASE MAY BE,
UNDER SECTION IV.B OF THE FOURTH AMENDED AND RESTATED CERTIFICATE OF
INCORPORATION.
DISCLOSURE. ALL OF THE FACTS AND CIRCUMSTANCES NOT REQUIRED TO BE DISCLOSED AS
EXCEPTIONS UNDER OR TO ANY OF THE FOREGOING REPRESENTATIONS AND WARRANTIES MADE
BY PURCHASER BY REASON OF ANY MINIMUM DISCLOSURE REQUIREMENT IN ANY SUCH
REPRESENTATION AND WARRANTY WOULD NOT, IN THE AGGREGATE, HAVE A PURCHASER
MATERIAL ADVERSE EFFECT.
OPINION OF PURCHASER'S FINANCIAL ADVISOR. THE SPECIAL COMMITTEE OF THE BOARD OF
DIRECTORS OF PURCHASER (THE "SPECIAL COMMITTEE"), COMPRISED OF INDEPENDENT
DIRECTORS AND ESTABLISHED TO EVALUATE THE FAIRNESS OF THE TRANSACTIONS
CONTEMPLATED HEREBY TO PURCHASER'S STOCKHOLDERS, HAS RECEIVED AN OPINION FROM
CIBC WORLD MARKETS CORP., DATED ON OR PRIOR TO THE DATE OF THIS AGREEMENT, TO
THE EFFECT THAT, AS OF SUCH DATE, (i) THE CONSIDERATION TO BE PAID IN THE SALE
IS FAIR, FROM A FINANCIAL POINT OF VIEW, TO PURCHASER AND (ii) THE OFFER
CONSIDERATION TO BE RECEIVED BY THE HOLDERS OF PURCHASER STOCK IN THE OFFER IS
FAIR, FROM A FINANCIAL POINT OF VIEW, TO SUCH HOLDERS, OTHER THAN GILAT ISRAEL
AND ITS AFFILIATES. NO BROKER. EXCEPT FOR CIBC WORLD MARKETS CORP., WHOSE FEES
WILL BE PAID SOLELY BY PURCHASER, NEITHER PURCHASER NOR ANY OF ITS SUBSIDIARIES
HAS EMPLOYED OR RETAINED ANY BROKER, CONSULTANT OR OTHER INTERMEDIARY IN
CONNECTION WITH THE TRANSACTIONS CONTEMPLATED HEREBY WHO WOULD BE ENTITLED TO A
BROKER'S, FINDER'S OR SIMILAR FEE OR COMMISSION IN CONNECTION THEREWITH.
CONDITIONS TO CLOSING
CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE SALE.
The respective obligation of each Party to effect the Sale and the other
transactions contemplated hereby is subject to the satisfaction or waiver on or
prior to the Closing Date of the following conditions:
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STOCKHOLDER APPROVAL. THE STOCKHOLDER APPROVAL SHALL HAVE BEEN OBTAINED.
NO INJUNCTIONS OR RESTRAINTS. NO JUDGMENT, ORDER, DECREE, STATUTE, LAW,
ORDINANCE, RULE OR REGULATION ENTERED, ENACTED, PROMULGATED, ENFORCED OR ISSUED
BY ANY COURT OR OTHER GOVERNMENTAL ENTITY OF COMPETENT JURISDICTION OR OTHER
LEGAL RESTRAINT OR PROHIBITION SHALL BE IN EFFECT PREVENTING THE CONSUMMATION OF
THE TRANSACTIONS CONTEMPLATED HEREBY.
GOVERNMENTAL ACTION. NO ACTION OR PROCEEDING SHALL BE INSTITUTED BY ANY
GOVERNMENTAL AUTHORITY SEEKING TO PREVENT CONSUMMATION OF THE TRANSACTIONS
CONTEMPLATED HEREBY OR SEEKING MATERIAL DAMAGES IN CONNECTION WITH THE
TRANSACTIONS CONTEMPLATED HEREBY WHICH CONTINUES TO BE OUTSTANDING.
BOARD APPROVAL. A MAJORITY OF THE BOARD OF DIRECTORS OF PURCHASER, UPON
RECOMMENDATION OF THE SPECIAL COMMITTEE, SHALL HAVE APPROVED THE SALE AND THE
OTHER TRANSACTIONS CONTEMPLATED HEREBY.
GILAT REGISTRATION STATEMENT. THE GILAT REGISTRATION STATEMENT SHALL HAVE BECOME
EFFECTIVE UNDER THE SECURITIES ACT AND SHALL NOT BE THE SUBJECT OF ANY STOP
ORDER OR PROCEEDINGS SEEKING A STOP ORDER AND NO STOP ORDER OR SIMILAR
RESTRAINING ORDER SHALL BE THREATENED OR ENTERED BY THE SEC OR ANY STATE
SECURITIES ADMINISTRATION PREVENTING THE SALE OR THE OTHER TRANSACTIONS
CONTEMPLATED HEREBY.
THIRD PARTY CONSENTS. THE PARTIES SHALL HAVE RECEIVED ALL NECESSARY THIRD PARTY
AND GOVERNMENTAL CONSENTS AND SUCH CONSENTS SHALL BE IN FULL FORCE AND EFFECT AS
OF THE CLOSING DATE.
AMENDED AND RESTATED CERTIFICATE. THE PARTIES SHALL HAVE RECEIVED CONFIRMATION
THAT THE FOURTH AMENDED AND RESTATED CERTIFICATE OF INCORPORATION HAS BEEN FILED
WITH THE SECRETARY OF STATE OF THE STATE OF DELAWARE (PROVIDED THAT SUCH FILING
TAKE PLACE CONTEMPORANEOUSLY WITH THE CLOSING).
CONDITIONS TO OBLIGATIONS OF PURCHASER. The obligation of Purchaser to
consummate the Sale is subject to the satisfaction of the following express
conditions, each of which may be waived (in whole or in part) in writing by
Purchaser.
OPINION OF GILAT PARTIES' COUNSEL. AS MAY BE REASONABLY REQUESTED BY PURCHASER,
SPECIAL NETHERLANDS COUNSEL, ISRAELI COUNSEL AND/OR A SPECIAL U.S. COUNSEL TO
THE GILAT PARTIES, AS THE CASE MAY BE, SHALL DELIVER TO PURCHASER AN OPINION
DATED AS OF THE CLOSING DATE IN FORM AND SUBSTANCE CUSTOMARY FOR THE TYPE OF
TRANSACTIONS CONTEMPLATED HEREBY.
REPRESENTATIONS AND WARRANTIES. THE REPRESENTATIONS AND WARRANTIES OF GILAT
ISRAEL AND SELLER CONTAINED HEREIN AND IN ALL AGREEMENTS, DOCUMENTS AND
INSTRUMENTS EXECUTED AND
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DELIVERED PURSUANT HERETO SHALL BE TRUE AND CORRECT IN ALL MATERIAL RESPECTS
(EXCEPT THAT ANY SPECIFIC REPRESENTATIONS OR WARRANTIES THAT ARE QUALIFIED AS TO
MATERIALITY MUST BE TRUE AS WRITTEN) ON AND AS OF THE CLOSING DATE AS IF MADE ON
AND AS OF THE CLOSING DATE, EXCEPT FOR CHANGES CONTEMPLATED BY THIS AGREEMENT
(EXCEPT THAT ANY SUCH REPRESENTATIONS OR WARRANTIES MADE AS OF A SPECIFIC DATE
SHALL HAVE BEEN TRUE ON AND AS OF SUCH DATE), AND PURCHASER SHALL HAVE RECEIVED
CERTIFICATES, DATED AS OF THE CLOSING DATE, SIGNED BY AN EXECUTIVE OFFICER OF
EACH OF GILAT ISRAEL AND SELLER, TO THE FOREGOING EFFECT. THOSE REPRESENTATIONS
AND WARRANTIES OF THE GILAT PARTIES CONTAINED HEREIN THAT ARE TO BE TRUE AND
CORRECT AS OF THE CLOSING DATE, SHALL BE TRUE AND CORRECT IN ALL MATERIAL
RESPECTS ON AND AS OF THE CLOSING DATE. THE COMPANY SHALL HAVE BEEN FORMED AND
THE ASSETS TO BE TRANSFERRED AND ASSIGNED TO THE COMPANY SHALL HAVE BEEN
TRANSFERRED BY THE RELEVANT GILAT BUSINESS ENTITY ON OR PRIOR TO THE CLOSING
DATE AS CONTEMPLATED HEREBY.
COMPLIANCE WITH THIS AGREEMENT. GILAT ISRAEL AND SELLER SHALL HAVE PERFORMED AND
COMPLIED IN ALL MATERIAL RESPECTS WITH ALL AGREEMENTS, COVENANTS, OBLIGATIONS
AND CONDITIONS CONTAINED HEREIN WHICH ARE REQUIRED TO BE PERFORMED OR COMPLIED
WITH BY GILAT ISRAEL OR SELLER, AS THE CASE MAY BE, BEFORE OR AT THE CLOSING
(EXCEPT THAT ANY SPECIFIC AGREEMENT OR COVENANT THAT IS QUALIFIED AS TO
MATERIALITY MUST HAVE BEEN PERFORMED AS WRITTEN), AND PURCHASER SHALL HAVE
RECEIVED CERTIFICATES, DATED AS OF THE CLOSING DATE, SIGNED BY AN EXECUTIVE
OFFICER OF GILAT ISRAEL AND SELLER, TO THE FOREGOING EFFECT.
MASTER AGREEMENT. THE COMPANY SHALL HAVE ENTERED INTO THE MASTER AGREEMENT WHICH
SHALL BE IN FULL FORCE AND EFFECT ON THE CLOSING DATE.
VOTING AGREEMENT AND OPTION. GILAT ISRAEL SHALL, AND SHALL HAVE CAUSED XXXXX
XXXXXXX TO, HAVE EXECUTED AND DELIVERED THE VOTING AGREEMENT TO PURCHASER. IN
ADDITION, GILAT ISRAEL SHALL HAVE EXECUTED AND DELIVERED THE OPTION TO
PURCHASER.
PROCEEDINGS AND OTHER DOCUMENTS. ALL CORPORATE AND OTHER PROCEEDINGS IN
CONNECTION WITH THE TRANSACTIONS CONTEMPLATED HEREBY AND ALL DOCUMENTS
INCIDENTAL THERETO SHALL BE REASONABLY SATISFACTORY IN FORM, SCOPE AND SUBSTANCE
TO PURCHASER AND ITS COUNSEL, AND PURCHASER AND ITS COUNSEL SHALL HAVE RECEIVED
ALL SUCH COUNTERPART ORIGINALS OR CERTIFIED OR OTHER COPIES OF SUCH DOCUMENTS AS
PURCHASER OR THEIR COUNSEL MAY REASONABLY REQUEST.
CONDITIONS TO OBLIGATIONS OF GILAT ISRAEL AND SELLER.
The obligation of Gilat Israel and Seller to consummate the Sale is
subject to the satisfaction of the following express conditions, each of which
may be waived (in whole or in part) in writing by Gilat Israel and Seller.
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OPINION OF PURCHASER'S COUNSEL. AS MAY BE REASONABLY REQUESTED BY THE GILAT
PARTIES, XXXXX XXXXXXX XXXXXXX & XXXXX LLP, COUNSEL FOR PURCHASER, SHALL DELIVER
TO THE GILAT PARTIES AN OPINION DATED AS OF THE CLOSING DATE IN FORM AND
SUBSTANCE CUSTOMARY FOR THE TYPE OF TRANSACTIONS CONTEMPLATED HEREBY.
REPRESENTATIONS AND WARRANTIES. THE REPRESENTATIONS AND WARRANTIES OF PURCHASER
CONTAINED HEREIN AND IN ALL AGREEMENTS, DOCUMENTS AND INSTRUMENTS EXECUTED AND
DELIVERED PURSUANT HERETO SHALL BE TRUE AND CORRECT IN ALL MATERIAL RESPECTS
(EXCEPT THAT ANY SPECIFIC REPRESENTATIONS OR WARRANTIES THAT ARE QUALIFIED AS TO
MATERIALITY MUST BE TRUE AS WRITTEN) ON AND AS OF THE CLOSING DATE AS IF MADE ON
AND AS OF THE CLOSING DATE, EXCEPT FOR CHANGES CONTEMPLATED BY THIS AGREEMENT
(EXCEPT THAT ANY SUCH REPRESENTATIONS OR WARRANTIES MADE AS OF A SPECIFIC DATE
SHALL HAVE BEEN TRUE ON AND AS OF SUCH DATE), AND GILAT ISRAEL AND SELLER SHALL
HAVE RECEIVED CERTIFICATES, DATED AS OF THE CLOSING DATE, SIGNED BY AN EXECUTIVE
OFFICER OF PURCHASER, TO THE FOREGOING EFFECT. THOSE REPRESENTATIONS AND
WARRANTIES OF PURCHASER CONTAINED HEREIN THAT ARE TO BE TRUE AND CORRECT AS OF
THE CLOSING DATE, SHALL BE TRUE AND CORRECT IN ALL MATERIAL RESPECTS ON AND AS
OF THE CLOSING DATE.
COMPLIANCE WITH THIS AGREEMENT. PURCHASER SHALL HAVE PERFORMED AND COMPLIED IN
ALL MATERIAL RESPECTS WITH ALL AGREEMENTS, COVENANTS, OBLIGATIONS AND CONDITIONS
CONTAINED HEREIN WHICH ARE REQUIRED TO BE PERFORMED OR COMPLIED WITH BY
PURCHASER BEFORE OR AT THE CLOSING (EXCEPT THAT ANY SPECIFIC AGREEMENT OR
COVENANT THAT IS QUALIFIED AS TO MATERIALITY MUST HAVE BEEN PERFORMED AS
WRITTEN), AND EACH OF GILAT ISRAEL AND SELLER SHALL HAVE RECEIVED A CERTIFICATE,
DATED THE CLOSING DATE, SIGNED BY AN EXECUTIVE OFFICER OF PURCHASER, TO THE
FOREGOING EFFECT.
VOTING AGREEMENT AND OPTION. EACH OF THE PRINCIPAL STOCKHOLDERS SHALL HAVE
EXECUTED AND DELIVERED THE VOTING AGREEMENT TO PURCHASER. PURCHASER SHALL HAVE
EXECUTED AND DELIVERED THE OPTION TO GILAT ISRAEL.
DIRECTORS AND OFFICERS RESIGNATIONS. PURCHASER SHALL HAVE DELIVERED TO SELLER
ALL OF THE D&O RESIGNATIONS, AS CONTEMPLATED IN SECTION 6.1 HEREOF.
GILAT ISRAEL'S NOMINEES FOR DIRECTORS. AT THE STOCKHOLDER MEETING, GILAT
ISRAEL'S NOMINEES FOR MEMBERS OF PURCHASER'S BOARD OF DIRECTORS SHALL HAVE BEEN
ELECTED TO TAKE OFFICE EFFECTIVE AS OF THE CLOSING.
PROCEEDINGS AND OTHER DOCUMENTS. ALL CORPORATE AND OTHER PROCEEDINGS IN
CONNECTION WITH THE TRANSACTIONS CONTEMPLATED HEREBY AND ALL DOCUMENTS
INCIDENTAL THERETO SHALL BE REASONABLY SATISFACTORY IN FORM, SCOPE AND SUBSTANCE
TO SELLER AND ITS COUNSEL, AND SELLER
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AND ITS COUNSEL SHALL HAVE RECEIVED ALL SUCH COUNTERPART ORIGINALS OR CERTIFIED
OR OTHER COPIES OF SUCH DOCUMENTS AS SELLER OR ITS COUNSEL MAY REASONABLY
REQUEST.
ADDITIONAL COVENANTS AND AGREEMENTS
DIRECTORS AND OFFICERS.
Prior to or simultaneously with the execution of this Agreement,
Purchaser shall have delivered to Seller the written resignations of all of
Purchaser's directors and the chief executive officer, to be effective as of the
Closing Date, which resignations shall be irrevocable except in the event that
this Agreement is terminated (collectively, the "D&O Resignations").
ADDITIONAL AGREEMENTS; COOPERATION.
SUBJECT TO THE TERMS AND CONDITIONS HEREIN PROVIDED, EACH OF THE PARTIES AGREES
TO USE ITS REASONABLE BEST EFFORTS TO TAKE, OR CAUSE TO BE TAKEN, ALL ACTION AND
TO DO, OR CAUSE TO BE DONE, ALL THINGS NECESSARY, PROPER OR ADVISABLE TO
CONSUMMATE AND MAKE EFFECTIVE AS PROMPTLY AS PRACTICABLE THE TRANSACTIONS
CONTEMPLATED HEREBY, AND TO COOPERATE WITH EACH OTHER IN CONNECTION WITH THE
FOREGOING, INCLUDING USING ITS REASONABLE BEST EFFORTS (i) TO OBTAIN ALL
NECESSARY WAIVERS, CONSENTS AND APPROVALS FROM OTHER PARTIES TO LOAN AGREEMENTS,
MATERIAL LEASES AND OTHER MATERIAL CONTRACTS, (ii) TO OBTAIN ALL NECESSARY
CONSENTS, APPROVALS AND AUTHORIZATIONS AS ARE REQUIRED TO BE OBTAINED UNDER ANY
FEDERAL, STATE OR FOREIGN LAW OR REGULATIONS, (iii) TO DEFEND ALL LAWSUITS OR
OTHER LEGAL PROCEEDINGS CHALLENGING THIS AGREEMENT OR THE CONSUMMATION OF THE
TRANSACTIONS CONTEMPLATED HEREBY, (iv) TO LIFT OR RESCIND ANY INJUNCTION OR
RESTRAINING ORDER OR OTHER ORDER ADVERSELY AFFECTING THE ABILITY OF THE PARTIES
TO CONSUMMATE THE TRANSACTIONS CONTEMPLATED HEREBY, (v) TO EFFECT ALL NECESSARY
REGISTRATIONS AND FILINGS, INCLUDING, BUT NOT LIMITED TO, FILINGS UNDER THE
SECURITIES ACT AND EXCHANGE ACT AND SUBMISSIONS OF INFORMATION REQUESTED BY
GOVERNMENTAL AUTHORITIES, (vi) PROVIDE ALL NECESSARY INFORMATION FOR THE PROXY
STATEMENT, THE OFFER DOCUMENTS AND THE GILAT REGISTRATION STATEMENT, AND (vii)
TO FULFILL ALL CONDITIONS TO THIS AGREEMENT. WITHOUT LIMITING THE GENERALITY OF
THE FOREGOING, THE GILAT PARTIES SHALL USE THEIR RESPECTIVE BEST EFFORT TO TAKE,
OR CAUSE TO BE TAKEN, ALL ACTION REASONABLY NECESSARY TO CAUSE THE COMPANY TO BE
FORMED AND TO TRANSFER AND ASSIGN ALL OF THE ASSETS TO THE COMPANY AS
CONTEMPLATED HEREBY.
EACH OF THE PARTIES AGREES TO FURNISH TO THE OTHER PARTY HERETO SUCH NECESSARY
INFORMATION AND REASONABLE ASSISTANCE AS SUCH OTHER PARTY MAY REQUEST IN
CONNECTION WITH ITS PREPARATION OF NECESSARY FILINGS OR SUBMISSIONS TO ANY
REGULATORY OR GOVERNMENTAL AGENCY
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OR AUTHORITY, INCLUDING, WITHOUT LIMITATION, ANY FILINGS NECESSARY UNDER THE
PROVISIONS OF THE SECURITIES ACT, THE EXCHANGE ACT AND ANY OTHER APPLICABLE
FEDERAL OR STATE STATUTE OR REQUIRED BY NASDAQ.
PUBLICITY.
The Parties shall consult with each other in issuing any press release
and other public statements with respect to any of the transactions contemplated
hereby, and shall not issue any such press release or make any such public
statement prior to such consultation and agreement of all Parties as to their
content and timing, except as may be required by applicable Law.
NOTIFICATION OF CERTAIN MATTERS.
Each of the Parties shall promptly notify the other Parties of (i) its
obtaining of actual knowledge as to the matters set forth in clauses (x) and (y)
below, or (ii) the occurrence, or failure to occur, of any event, which
occurrence or failure to occur would be likely to cause (x) any representation
or warranty contained in this Agreement to be untrue or inaccurate in any
material respect at any time from the date hereof to the date the Sale is
consummated, or (y) any material failure of the Gilat Parties or Purchaser, as
the case may be, or of any officer, director, employee or agent thereof, to
comply with or satisfy any covenant, condition or agreement to be complied with
or satisfied by it under this Agreement; provided, however, that no such
notification shall affect the representations or warranties of the Parties or
the conditions to the obligations of the Parties hereunder.
ACCESS TO INFORMATION.
FROM THE DATE OF THIS AGREEMENT UNTIL THE CONSUMMATION OF THE SALE, THE GILAT
PARTIES WILL, AND WILL CAUSE THE COMPANY AND THE OTHER GILAT BUSINESS ENTITIES
TO, GIVE PURCHASER AND ITS AUTHORIZED AGENTS AND REPRESENTATIVES (INCLUDING
COUNSEL, ENVIRONMENTAL AND OTHER CONSULTANTS, ACCOUNTANTS AND AUDITORS) FULL
ACCESS DURING NORMAL BUSINESS HOURS TO ALL FACILITIES, PERSONNEL AND OPERATIONS
AND TO ALL BOOKS, RECORDS, DOCUMENTS, CONTRACTS, AND FINANCIAL STATEMENTS
RELEVANT TO THE CONDUCT OF THE BUSINESS, AND WILL PERMIT PURCHASER TO MAKE SUCH
INSPECTIONS AS IT MAY REASONABLY REQUIRE AND WILL CAUSE THE EXECUTIVE OFFICERS
OF EACH OF THE GILAT BUSINESS ENTITIES TO FURNISH PURCHASER WITH SUCH FINANCIAL
AND OPERATING DATA AND OTHER INFORMATION WITH RESPECT TO THE BUSINESS AS
PURCHASER MAY FROM TIME TO TIME REASONABLY REQUEST.
PURCHASER AGREES THAT INFORMATION RECEIVED BY IT CONCERNING THE OPERATIONS OF
THE BUSINESS SHALL BE CONSIDERED CONFIDENTIAL AND PURCHASER WILL NOT, AND WILL
CAUSE ITS AGENTS AND REPRESENTATIVES NOT TO, USE ANY INFORMATION OBTAINED
PURSUANT TO SECTION 6.5(a) FOR ANY PURPOSE UNRELATED TO THE CONSUMMATION OF THE
TRANSACTIONS CONTEMPLATED HEREBY. SUBJECT TO THE REQUIREMENTS OF LAW, PURCHASER
WILL KEEP CONFIDENTIAL, AND WILL CAUSE ITS AGENTS AND
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REPRESENTATIVES TO KEEP CONFIDENTIAL, ALL INFORMATION AND DOCUMENTS OBTAINED
PURSUANT TO SECTION 6.5(a) UNLESS SUCH INFORMATION (i) WAS ALREADY KNOWN TO
PURCHASER, (ii) BECOMES AVAILABLE TO PURCHASER FROM OTHER SOURCES NOT KNOWN BY
PURCHASER TO BE BOUND BY A CONFIDENTIALITY OBLIGATION, (iii) IS DISCLOSED WITH
PRIOR WRITTEN APPROVAL OF SELLER OR GILAT ISRAEL, OR (iv) IS OR BECOMES READILY
ASCERTAINABLE FROM PUBLISHED INFORMATION. IN THE EVENT THAT THIS AGREEMENT IS
TERMINATED OR THE TRANSACTIONS CONTEMPLATED HEREBY SHALL OTHERWISE FAIL TO BE
CONSUMMATED, PURCHASER SHALL PROMPTLY CAUSE ALL COPIES OF DOCUMENTS OR EXTRACTS
THEREOF CONTAINING INFORMATION AND DATA AS TO THE COMPANY TO BE RETURNED. IN THE
EVENT THAT THIS AGREEMENT HAS BEEN TERMINATED OR THE TRANSACTIONS CONTEMPLATED
HEREBY SHALL HAVE FAILED TO BE CONSUMMATED AND PURCHASER OR ANY OF ITS AGENTS OR
REPRESENTATIVES ARE REQUESTED OR REQUIRED (BY ORAL QUESTIONS, INTERROGATORIES,
REQUESTS FOR INFORMATION, OR DOCUMENTS IN LEGAL PROCEEDINGS, SUBPOENA, CIVIL
INVESTIGATIVE DEMAND, OR OTHER SIMILAR PROCESS) TO DISCLOSE ANY OF THE MATERIALS
DELIVERED OR OBTAINED PURSUANT TO THIS AGREEMENT (THE "BUSINESS DOCUMENTATION"),
PURCHASER SHALL PROVIDE SELLER WITH PROMPT WRITTEN NOTICE OF ANY SUCH REQUEST OR
REQUIREMENT SO THAT THE GILAT PARTIES OR THE OTHER GILAT BUSINESS ENTITIES, AS
THE CASE MAY BE, MAY SEEK A PROTECTIVE ORDER OR OTHER APPROPRIATE REMEDY. IF, IN
THE ABSENCE OF A PROTECTIVE ORDER OR OTHER REMEDY, PURCHASER OR ANY OF ITS
AGENTS OR REPRESENTATIVES ARE COMPELLED TO DISCLOSE ANY OF SUCH BUSINESS
DOCUMENTATION TO ANY TRIBUNAL OR ELSE STAND LIABLE FOR CONTEMPT OR SUFFER OTHER
CENSURE OR PENALTY, PURCHASER OR ITS AGENTS OR REPRESENTATIVES, AS THE CASE MAY
BE, MAY, WITHOUT LIABILITY HEREUNDER, DISCLOSE TO SUCH TRIBUNAL ONLY THAT
PORTION OF THE BUSINESS DOCUMENTATION WHICH COUNSEL FOR THE GILAT PARTIES
ADVISES IS LEGALLY REQUIRED TO BE DISCLOSED; PROVIDED, THAT PURCHASER SHALL
EXERCISE COMMERCIALLY REASONABLE EFFORTS TO PRESERVE THE CONFIDENTIALITY OF THE
BUSINESS DOCUMENTATION, INCLUDING, WITHOUT LIMITATION, BY COOPERATING WITH THE
GILAT PARTIES AND THE OTHER GILAT BUSINESS ENTITIES, AS THE CASE MAY BE, TO
OBTAIN AN APPROPRIATE PROTECTIVE ORDER OR OTHER RELIABLE ASSURANCE THAT
CONFIDENTIAL TREATMENT WILL BE ACCORDED THE BUSINESS DOCUMENTATION BY SUCH
TRIBUNAL.
NON-SOLICITATION.
NEITHER PURCHASER NOR ANY OF ITS AFFILIATES (EXCLUDING GILAT ISRAEL AND ITS
OFFICERS AND DIRECTORS, BUT INCLUDING THE OFFICERS AND DIRECTORS OF PURCHASER
AND ITS OTHER AFFILIATES) WILL, DIRECTLY OR INDIRECTLY, THROUGH ANY DIRECTORS,
OFFICERS, EMPLOYEES, AGENTS, REPRESENTATIVES OR OTHERWISE, SOLICIT, INITIATE,
FACILITATE OR ENCOURAGE (INCLUDING BY WAY OF FURNISHING OR DISCLOSING NON-PUBLIC
INFORMATION) ANY INQUIRIES OR THE MAKING OF ANY PROPOSAL WITH RESPECT
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TO ANY MERGER, CONSOLIDATION OR OTHER BUSINESS COMBINATION INVOLVING PURCHASER
OR ITS SUBSIDIARIES OR THE ACQUISITION OF ALL OR ANY SIGNIFICANT ASSETS OR
CAPITAL STOCK OF OR BY PURCHASER AND ITS SUBSIDIARIES (A "TRANSACTION PROPOSAL")
OR NEGOTIATE, EXPLORE OR OTHERWISE ENGAGE IN DISCUSSIONS WITH ANY PERSON (OTHER
THAN GILAT ISRAEL OR SELLER AND ITS REPRESENTATIVES) WITH RESPECT TO ANY
TRANSACTION PROPOSAL OR ENTER INTO ANY AGREEMENT, ARRANGEMENT OR UNDERSTANDING
REQUIRING IT TO ABANDON, TERMINATE OR FAIL TO CONSUMMATE THE TRANSACTIONS
CONTEMPLATED HEREBY.
NOTWITHSTANDING THE PROVISIONS OF SECTION 6.6(a) HEREOF, IN THE EVENT THAT PRIOR
TO THE CONSUMMATION OF THE SALE, THE BOARD OF DIRECTORS OF PURCHASER DETERMINES
IN GOOD FAITH, AFTER CONSULTATION WITH OUTSIDE COUNSEL, THAT IT IS NECESSARY TO
RESPOND TO AN UNSOLICITED SUPERIOR PROPOSAL (AS DEFINED BELOW) IN ORDER TO
COMPLY WITH ITS FIDUCIARY DUTIES TO PURCHASER'S STOCKHOLDERS UNDER APPLICABLE
LAW, THE BOARD OF DIRECTORS OF PURCHASER MAY (SUBJECT TO THIS AND THE FOLLOWING
SENTENCES) (x) WITHDRAW OR MODIFY ITS APPROVAL OR RECOMMENDATION OF THE SALE,
THIS AGREEMENT AND THE OTHER TRANSACTIONS CONTEMPLATED HEREBY, OR (y) APPROVE OR
RECOMMEND AN UNSOLICITED SUPERIOR PROPOSAL OR TERMINATE THIS AGREEMENT (AND
CONCURRENTLY WITH OR AFTER SUCH TERMINATION, IF IT SO CHOOSES, CAUSE PURCHASER
TO ENTER INTO ANY AGREEMENT WITH RESPECT TO ANY UNSOLICITED SUPERIOR PROPOSAL),
BUT IN EACH OF THE CASES SET FORTH IN THIS CLAUSE (y), NO ACTION SHALL BE TAKEN
BY PURCHASER PURSUANT TO CLAUSE (y) UNTIL A TIME THAT IS AFTER THE FIFTH (5TH)
BUSINESS DAY FOLLOWING SELLER'S RECEIPT OF WRITTEN NOTICE ADVISING SELLER THAT
THE BOARD OF DIRECTORS OF PURCHASER HAS RECEIVED AN UNSOLICITED SUPERIOR
PROPOSAL, SPECIFYING THE MATERIAL TERMS AND CONDITIONS OF SUCH UNSOLICITED
SUPERIOR PROPOSAL AND IDENTIFYING THE PERSON MAKING SUCH UNSOLICITED SUPERIOR
PROPOSAL, TO THE EXTENT SUCH IDENTIFICATION OF THE PERSON MAKING SUCH PROPOSAL
DOES NOT BREACH THE FIDUCIARY DUTIES OF THE BOARD OF DIRECTORS AS ADVISED BY
OUTSIDE LEGAL COUNSEL AND; PROVIDED, THAT IF THE BOARD OF DIRECTORS TAKES ANY
ACTION PURSUANT TO THE FOREGOING CLAUSES (x) AND (y), PURCHASER SHALL WITHIN TWO
(2) BUSINESS DAYS OF SUCH ACTION, PAY SELLER AN AMOUNT EQUAL TO 3% OF THE
CONSIDERATION PAYABLE BY PURCHASER UNDER SECTION 2.1 HEREOF AND REIMBURSE GILAT
ISRAEL, SELLER AND THE COMPANY FOR ANY OF THEIR OUT OF POCKET EXPENSES
(INCLUDING WITHOUT LIMITATION FEES AND EXPENSES OF OUTSIDE PROFESSIONALS) BY
WIRE TRANSFER OF IMMEDIATELY AVAILABLE FUNDS TO AN ACCOUNT SPECIFIED BY SELLER.
FOR PURPOSES OF THIS AGREEMENT, AN "UNSOLICITED SUPERIOR PROPOSAL" MEANS ANY
BONA FIDE, UNSOLICITED, WRITTEN PROPOSAL MADE BY A THIRD PARTY TO ENTER INTO AN
AGREEMENT WITH RESPECT TO A TRANSACTION PROPOSAL ON TERMS THAT THE BOARD OF
DIRECTORS OF PURCHASER DETERMINES IN
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ITS GOOD FAITH JUDGMENT (AFTER CONSULTATION WITH OUTSIDE COUNSEL AND A FINANCIAL
ADVISOR OF NATIONALLY RECOGNIZED REPUTATION) TO BE MORE FAVORABLE TO PURCHASER'S
STOCKHOLDERS (INCLUDING GILAT, BUT SOLELY IN ITS CAPACITY AS A STOCKHOLDER) THAN
THE SALE AND THE OTHER TRANSACTIONS CONTEMPLATED HEREBY.
IN ADDITION TO THE OBLIGATIONS OF PURCHASER SET FORTH IN PARAGRAPHS (a) AND (b)
OF THIS SECTION 6.6, PURCHASER SHALL IMMEDIATELY ADVISE SELLER ORALLY AND IN
WRITING OF ANY REQUEST FOR INFORMATION OR OF ANY TRANSACTION PROPOSAL, THE
MATERIAL TERMS AND CONDITIONS OF SUCH REQUEST OR TRANSACTION PROPOSAL, AND TO
THE EXTENT SUCH DISCLOSURE IS NOT A BREACH OF THE FIDUCIARY DUTIES OF THE BOARD
OF DIRECTORS AS ADVISED BY OUTSIDE LEGAL COUNSEL, THE IDENTITY OF THE PERSON
MAKING SUCH REQUEST OR TRANSACTION PROPOSAL.
NOTHING CONTAINED IN THIS SECTION 6.6 SHALL PROHIBIT PURCHASER FROM TAKING AND
DISCLOSING TO ITS STOCKHOLDERS A POSITION CONTEMPLATED BY RULE 14e-2(a)
PROMULGATED UNDER THE EXCHANGE ACT, OR FROM MAKING ANY DISCLOSURE TO PURCHASER'S
STOCKHOLDERS IF, IN THE GOOD FAITH JUDGMENT OF THE BOARD OF DIRECTORS OF
PURCHASER, AFTER CONSULTATION WITH OUTSIDE COUNSEL, FAILURE TO DISCLOSE WOULD BE
INCONSISTENT WITH ITS FIDUCIARY DUTIES TO PURCHASER'S STOCKHOLDERS UNDER
APPLICABLE LAW; PROVIDED, HOWEVER, THAT NEITHER PURCHASER NOR ITS BOARD OF
DIRECTORS NOR ANY COMMITTEE THEREOF SHALL, EXCEPT AS PERMITTED BY SECTION 6.6,
WITHDRAW OR MODIFY, OR PROPOSE PUBLICLY TO WITHDRAW OR MODIFY, ITS POSITION WITH
RESPECT TO THIS AGREEMENT OR THE SALE AND THE OTHER TRANSACTIONS CONTEMPLATED
HEREBY OR APPROVE OR RECOMMEND, OR PROPOSE PUBLICLY TO APPROVE OR RECOMMEND, AN
TRANSACTION PROPOSAL.
FEES AND EXPENSES.
Whether or not the Sale is consummated, the Parties shall each bear
their respective expenses incurred in connection with the Sale and other
transactions contemplated hereby, including, without limitation, the
preparation, execution and performance of this Agreement, and all fees and
expenses of investment bankers, finders, brokers, agents, representatives,
counsel and accountants.
INSURANCE.
Gilat Israel shall cause to be maintained in effect for not less than
three years from the Closing Date the current policies of the directors' and
officers' liability insurance maintained by Purchaser (provided that Gilat
Israel may substitute therefor policies of at least the same coverage that cover
Purchaser's current directors and officers which contain terms and conditions
that are no less advantageous) with respect to matters occurring on or prior to
the Closing Date; provided, that in no event shall Gilat Israel be required to
expend annually more than 200% of the amount Purchaser spent for these purposes
in the last fiscal year to maintain or procure insurance coverage. Gilat Israel
shall cause Purchaser to indemnify the directors of Purchaser to the fullest
extent
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permitted under the DGCL, including without limitation reimbursement for
reasonable and documented attorneys' fees.
CONDUCT OF THE PARTIES AFTER THE CLOSING DATE.
GILAT ISRAEL AND SELLER EACH AGREE TO USE THEIR RESPECTIVE COMMERCIALLY
REASONABLE EFFORTS TO ENSURE THAT FOLLOWING THE CLOSING DATE, (i) PURCHASER
REMAINS A PUBLIC COMPANY, WITH SHARES OF ITS COMMON STOCK LISTED FOR TRADING ON
THE NASDAQ -NATIONAL MARKET (OR, IF SUCH LISTING BECOMES REASONABLY
IMPRACTICABLE, LISTED OR QUOTED ON THE AMERICAN STOCK EXCHANGE, THE NASDAQ -
SMALL CAP OR ON THE BULLETIN BOARD (IN THAT ORDER OR PRIORITY)) AND (ii)
PURCHASER AND ITS SUBSIDIARIES OPERATES AND CONDUCTS ITS BUSINESS, AND USES ITS
CURRENT CASH AND CASH EQUIVALENT HOLDINGS IN A MANNER CONSISTENT WITH THE
OPERATION OF THE BUSINESS, INCLUDING THE VOICE SERVICES, AS CURRENTLY CONDUCTED,
FOR A PERIOD OF ONE YEAR FOLLOWING THE CLOSING DATE AND THEREAFTER AS OTHERWISE
APPROVED BY PURCHASER'S BOARD OF DIRECTORS INCLUDING A MAJORITY OF PURCHASER'S
INDEPENDENT DIRECTORS AS BEING IN THE BEST INTEREST OF PURCHASER'S SHAREHOLDERS.
NOTWITHSTANDING THE FOREGOING, THE PARTIES ACKNOWLEDGE THAT (x) PURCHASER
RECEIVED A DELISTING NOTICE FROM NASDAQ ON JUNE 27, 2001, (y) ON JUNE 29, 2001,
2001, PURCHASER SENT NOTICE TO NASDAQ REQUESTING A HEARING WITH A NASDAQ LISTING
QUALIFICATION PANEL WITH RESPECT TO THE DELISTING BY NASDAQ OF SHARES OF
PURCHASER STOCK, AND (z) PURCHASER'S ELIGIBILITY TO REMAIN LISTED FOR TRADING ON
THE NASDAQ NATIONAL MARKET IS SUBJECT TO THE OUTCOME OF THE QUALIFICATION
HEARING THAT WAS HELD ON AUGUST 9, 2001 BETWEEN THE NASDAQ HEARING PANEL AND
PURCHASER.
GILAT ISRAEL AND SELLER SHALL:
FOR THE LONGER OF (x) A PERIOD OF ONE YEAR FOLLOWING THE CLOSING DATE OR (y) THE
SPECIAL DISTRIBUTION EXPIRATION DATE, NOT PERMIT PURCHASER TO PAY OR DECLARE ANY
DIVIDENDS OR MAKE ANY OTHER DISTRIBUTIONS (OTHER THAN THE SPECIAL DISTRIBUTION);
FOR A PERIOD TWO YEARS FOLLOWING THE CLOSING DATE (AND WITHOUT LIMITING ANY
OBLIGATION UNDER APPLICABLE LAW), NOT PERMIT PURCHASER OR ANY OF ITS
SUBSIDIARIES TO ENTER INTO ANY MATERIAL TRANSACTION WITH GILAT ISRAEL OR ANY OF
ITS AFFILIATES ON TERMS WHICH ARE MATERIALLY LESS FAVORABLE TO PURCHASER AND ITS
SUBSIDIARIES AS COULD BE OBTAINED BY PURCHASER AND/OR ITS SUBSIDIARIES FROM AN
UNAFFILIATED THIRD PARTY IN AN ARMS-LENGTH TRANSACTION; AND
FOR THE LONGER OF (x) A PERIOD OF THREE YEARS FOLLOWING THE CLOSING DATE OR (y)
THE SPECIAL DISTRIBUTION EXPIRATION DATE, EXCEPT AS OTHERWISE PROVIDED IN THE
MASTER
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AGREEMENT, NOT CHARGE PURCHASER OR ANY OF ITS SUBSIDIARIES FOR ANY
ADMINISTRATIVE SERVICES (SUCH AS LEGAL, FINANCIAL AND ACCOUNTING SERVICES) OTHER
THAN AT GILAT'S ACTUAL COST THEREFOR.
DURING THE TERM OF THE MASTER AGREEMENT (INCLUDING, WITHOUT LIMITATION, ANY
AUTOMATIC RENEWALS THEREOF), IT SHALL NOT AGREE TO ANY AMENDMENT, MODIFICATION
OR OTHER CHANGE TO THE MASTER AGREEMENT WHICH IS DETRIMENTAL TO THE BUSINESS
INTERESTS OF ANY ONE OR MORE OF THE COMPANY, PURCHASER OR THE BUSINESS IN ANY
MATERIAL RESPECT.
MAINTENANCE OF TRANSFER AGENT.
For the benefit of each current and future holder of shares of Purchaser
Stock (other than Gilat Israel and its Affiliates), until the Special
Distribution Expiration Date, Purchaser shall maintain, and Gilat Israel and
Seller shall cause Purchaser to maintain: (i) an independent transfer agent of
shares of Purchaser Stock and (ii) cause such transfer agent to only register
and record the transfer of shares of Purchaser Stock in accordance with the
provisions of Section 2.5(c) hereof.
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CONDUCT OF BUSINESS AND OF PURCHASER PRIOR TO THE CLOSING
CONDUCT OF BUSINESS PENDING THE SALE.
EXCEPT AS OTHERWISE CONTEMPLATED HEREBY, PRIOR TO CLOSING, EXCEPT WITH THE PRIOR
CONSENT OF PURCHASER (WHICH CONSENT SHALL NOT BE UNREASONABLY WITHHELD), GILAT
ISRAEL AND SELLER SHALL, AND SHALL CAUSE EACH OF THE GILAT BUSINESS ENTITIES TO:
CONDUCT THEIR RESPECTIVE OPERATIONS WITH RESPECT TO THE BUSINESS IN THE ORDINARY
COURSE, INCLUDING COMPLYING IN ALL MATERIAL RESPECTS WITH ALL APPLICABLE LAWS
RELATING TO THE BUSINESS, AND MAINTAINING THE BOOKS AND RECORDS OF THE BUSINESS
IN ACCORDANCE WITH APPLICABLE LAW AND PAST PRACTICES;
MAINTAIN SATISFACTORY RELATIONSHIPS WITH SUPPLIERS, DISTRIBUTORS, CUSTOMERS AND
OTHERS HAVING BUSINESS RELATIONSHIPS WITH IT WITH RESPECT TO THE OPERATION OF
THE BUSINESS AND TAKE NO ACTION WHICH WOULD MATERIALLY ADVERSELY AFFECT THE
ABILITY OF THE PARTIES TO CONSUMMATE THE TRANSACTIONS CONTEMPLATED HEREBY; USE
COMMERCIALLY REASONABLE EFFORTS TO PRESERVE THE BUSINESS; AND
CONDUCT THEIR RESPECTIVE OPERATIONS IN A MANNER WHICH WILL NOT RESULT IN A GILAT
MATERIAL ADVERSE EFFECT.
WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, EXCEPT AS OTHERWISE
CONTEMPLATED HEREBY, PRIOR TO CLOSING, EXCEPT WITH THE PRIOR CONSENT OF
PURCHASER (WHICH CONSENT SHALL NOT BE UNREASONABLY WITHHELD), IN CONNECTION WITH
THE OPERATION OF THE BUSINESS, GILAT ISRAEL AND SELLER SHALL NOT NOR WILL IT
PERMIT ANY OF THE GILAT BUSINESS ENTITIES TO:
CREATE, INCUR, ASSUME, MAINTAIN OR PERMIT TO EXIST ANY DEBT FOR BORROWED MONEY
THAT MATERIALLY AFFECTS THE OPERATION OF THE BUSINESS OR THE ASSETS OTHER THAN
UNDER LINES OF CREDIT IN THE ORDINARY COURSE OF BUSINESS CONSISTENT WITH PAST
PRACTICES; (1) INCREASE IN ANY MANNER THE COMPENSATION OF ANY EMPLOYEE EXCEPT IN
THE ORDINARY COURSE OF BUSINESS CONSISTENT WITH PAST PRACTICE; (2) WITH RESPECT
TO THE EMPLOYEES, PAY OR AGREE TO PAY ANY PENSION, RETIREMENT ALLOWANCE OR OTHER
EMPLOYEE BENEFIT NOT REQUIRED, OR ENTER INTO OR AGREE TO ENTER INTO ANY
AGREEMENT OR ARRANGEMENT WITH SUCH EMPLOYEE, WHETHER PAST OR PRESENT, RELATING
TO ANY SUCH PENSION, RETIREMENT ALLOWANCE OR OTHER EMPLOYEE BENEFIT, EXCEPT AS
REQUIRED UNDER
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CURRENTLY EXISTING AGREEMENTS, PLANS OR ARRANGEMENTS; (3) GRANT ANY SEVERANCE OR
TERMINATION PAY TO, OR ENTER INTO ANY EMPLOYMENT OR SEVERANCE AGREEMENT WITH ANY
EMPLOYEE EXCEPT CONSISTENT WITH COMMERCIALLY ACCEPTABLE STANDARDS; OR (4) EXCEPT
AS MAY BE REQUIRED TO COMPLY WITH APPLICABLE LAW, BECOME OBLIGATED (OTHER THAN
PURSUANT TO ANY NEW OR RENEWED COLLECTIVE BARGAINING AGREEMENT) UNDER ANY NEW
PENSION PLAN, WELFARE PLAN, MULTIEMPLOYER PLAN, EMPLOYEE BENEFIT PLAN, BENEFIT
ARRANGEMENT, OR SIMILAR PLAN OR ARRANGEMENT, WHICH WAS NOT IN EXISTENCE ON THE
DATE HEREOF, INCLUDING ANY BONUS, INCENTIVE, DEFERRED COMPENSATION, STOCK
PURCHASE, STOCK OPTION, STOCK APPRECIATION RIGHT, GROUP INSURANCE, SEVERANCE
PAY, RETIREMENT OR OTHER BENEFIT PLAN, AGREEMENT OR ARRANGEMENT, OR EMPLOYMENT
OR CONSULTING AGREEMENT WITH OR FOR THE BENEFIT OF ANY EMPLOYEE OR AMEND ANY OF
SUCH PLANS OR ANY OF SUCH AGREEMENTS IN EXISTENCE ON THE DATE HEREOF; PROVIDED,
HOWEVER, THAT THIS CLAUSE (4) SHALL NOT PROHIBIT THE GILAT PARTIES OR THE GILAT
BUSINESS ENTITIES FROM RENEWING ANY SUCH PLAN, AGREEMENT OR ARRANGEMENT ALREADY
IN EXISTENCE ON TERMS NO MORE FAVORABLE TO THE PARTIES TO SUCH PLAN, AGREEMENT
OR ARRANGEMENT;
EXCEPT AS OTHERWISE EXPRESSLY CONTEMPLATED HEREBY, ENTER INTO ANY
OTHER BUSINESS CONTRACTS, EXCEPT FOR (1) BUSINESS CONTRACTS FOR THE PURCHASE,
SALE OR LEASE OF GOODS OR SERVICES INVOLVING PAYMENTS OR RECEIPTS BY THE GILAT
PARTIES OR THE GILAT BUSINESS ENTITIES NOT IN EXCESS OF $100,000, OR (ii) LEASES
FOR RENTAL SPACE IN AN AMOUNT NOT TO EXCEED $100,000 FOR ANY LEASE;
EXCEPT AS OTHERWISE EXPRESSLY CONTEMPLATED HEREBY, AUTHORIZE, RECOMMEND, PROPOSE
OR ANNOUNCE AN INTENTION TO AUTHORIZE, RECOMMEND OR PROPOSE, OR ENTER INTO ANY
AGREEMENT IN PRINCIPLE OR AN AGREEMENT WITH RESPECT TO ANY SALE, TRANSFER,
LEASE, LICENSE, PLEDGE, MORTGAGE, OR OTHER DISPOSITION OR ENCUMBRANCE OF A
MATERIAL AMOUNT OF ASSETS, OR ANY ENTRY INTO A MATERIAL BUSINESS CONTRACT OR ANY
AMENDMENT OR MODIFICATION OF ANY MATERIAL BUSINESS CONTRACT OR ANY RELEASE OR
RELINQUISHMENT OF ANY MATERIAL BUSINESS CONTRACT RIGHTS; OR
AUTHORIZE OR COMMIT TO MAKE CAPITAL EXPENDITURES WITH RESPECT TO AND IN
CONNECTION WITH THE OPERATION OF THE BUSINESS IN EXCESS OF $100,000.
CONDUCT OF BUSINESS OF PURCHASER PENDING THE SALE.
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EXCEPT AS OTHERWISE CONTEMPLATED HEREBY (INCLUDING, WITHOUT LIMITATION, THE
ACKNOWLEDGEMENT SET FORTH IN SECTION 7.2(b) HEREOF), PRIOR TO CLOSING, EXCEPT
WITH THE PRIOR CONSENT OF GILAT ISRAEL (WHICH CONSENT SHALL NOT BE
UNREASONABLY WITHHELD), EACH OF PURCHASER AND ITS SUBSIDIARIES WILL CONDUCT
THEIR RESPECTIVE OPERATIONS ACCORDING TO ITS ORDINARY COURSE OF BUSINESS
CONSISTENT WITH PAST PRACTICE, AND WILL USE ALL COMMERCIALLY REASONABLE
EFFORTS TO PRESERVE INTACT ITS BUSINESS ORGANIZATION, TO KEEP AVAILABLE THE
SERVICES OF ITS OFFICERS AND EMPLOYEES AND TO MAINTAIN SATISFACTORY
RELATIONSHIPS WITH SUPPLIERS, DISTRIBUTORS, CUSTOMERS AND OTHERS HAVING
BUSINESS RELATIONSHIPS WITH IT AND TAKE NO ACTION WHICH WOULD MATERIALLY
ADVERSELY AFFECT THE ABILITY OF THE PARTIES TO CONSUMMATE THE TRANSACTIONS
CONTEMPLATED HEREBY. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING,
PURCHASER WILL NOT NOR WILL IT PERMIT ANY OF ITS SUBSIDIARIES TO, WITHOUT THE
PRIOR WRITTEN CONSENT OF GILAT ISRAEL (WHICH CONSENT SHALL NOT BE UNREASONABLY
WITHHELD): AMEND ITS CERTIFICATE OF INCORPORATION OR BYLAWS OR OTHER
ORGANIZATIONAL INSTRUMENTS; EXCEPT AS OTHERWISE EXPRESSLY CONTEMPLATED HEREBY,
AUTHORIZE FOR ISSUANCE, ISSUE, SELL, DELIVER, GRANT ANY OPTIONS OR WARRANTS FOR,
OR OTHERWISE AGREE OR COMMIT TO ISSUE, SELL OR DELIVER ANY SHARES OF ANY CLASS
OF ITS CAPITAL STOCK OR ANY SECURITIES CONVERTIBLE INTO, SHARES OF ANY CLASS OF
ITS CAPITAL STOCK, EXCEPT PURSUANT TO AND IN ACCORDANCE WITH THE TERMS OF
CURRENTLY OUTSTANDING OPTIONS OR WARRANTS; EXCEPT AS OTHERWISE EXPRESSLY
CONTEMPLATED HEREBY, SPLIT, COMBINE OR RECLASSIFY ANY SHARES OF ITS CAPITAL
STOCK, 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 PURCHASE, REDEEM OR OTHERWISE ACQUIRE ANY SHARES OF ITS OWN CAPITAL
STOCK OR OF ANY OF ITS SUBSIDIARIES; (1) CREATE, INCUR, ASSUME, MAINTAIN OR
PERMIT TO EXIST ANY DEBT FOR BORROWED MONEY OTHER THAN UNDER EXISTING LINES OF
CREDIT IN THE ORDINARY COURSE OF BUSINESS CONSISTENT WITH PAST PRACTICE; (2)
ASSUME, GUARANTEE, ENDORSE OR OTHERWISE BECOME LIABLE OR RESPONSIBLE (WHETHER
DIRECTLY, CONTINGENTLY OR OTHERWISE) FOR THE OBLIGATIONS OF ANY OTHER PERSON
EXCEPT FOR ITS WHOLLY OWNED SUBSIDIARIES, IN THE ORDINARY COURSE OF BUSINESS AND
CONSISTENT WITH PAST PRACTICES; OR (3) MAKE ANY LOANS, ADVANCES OR
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CAPITAL CONTRIBUTIONS TO, OR INVESTMENTS IN, ANY OTHER PERSON IN AN AGGREGATE
AMOUNT EXCEEDING $100,000; (1) INCREASE IN ANY MANNER THE COMPENSATION OF ANY
EMPLOYEE, DIRECTOR OR OFFICER EXCEPT IN THE ORDINARY COURSE OF BUSINESS
CONSISTENT WITH PAST PRACTICE; (2) PAY OR AGREE TO PAY ANY PENSION, RETIREMENT
ALLOWANCE OR OTHER EMPLOYEE BENEFIT NOT REQUIRED, OR ENTER INTO OR AGREE TO
ENTER INTO ANY AGREEMENT OR ARRANGEMENT WITH SUCH DIRECTOR OR OFFICER OR
EMPLOYEE, WHETHER PAST OR PRESENT, RELATING TO ANY SUCH PENSION, RETIREMENT
ALLOWANCE OR OTHER EMPLOYEE BENEFIT, EXCEPT AS REQUIRED UNDER CURRENTLY EXISTING
AGREEMENTS, PLANS OR ARRANGEMENTS; (3) GRANT ANY SEVERANCE OR TERMINATION PAY
TO, OR ENTER INTO ANY EMPLOYMENT OR SEVERANCE AGREEMENT WITH ANY EMPLOYEE,
OFFICER OR DIRECTOR EXCEPT CONSISTENT WITH COMMERCIALLY ACCEPTABLE STANDARDS; OR
(4) EXCEPT AS MAY BE REQUIRED TO COMPLY WITH APPLICABLE LAW, BECOME OBLIGATED
(OTHER THAN PURSUANT TO ANY NEW OR RENEWED COLLECTIVE BARGAINING AGREEMENT)
UNDER ANY NEW PENSION PLAN, WELFARE PLAN, MULTIEMPLOYER PLAN, EMPLOYEE BENEFIT
PLAN, BENEFIT ARRANGEMENT, OR SIMILAR PLAN OR ARRANGEMENT, WHICH WAS NOT IN
EXISTENCE ON THE DATE HEREOF, INCLUDING ANY BONUS, INCENTIVE, DEFERRED
COMPENSATION, STOCK PURCHASE, STOCK OPTION, STOCK APPRECIATION RIGHT, GROUP
INSURANCE, SEVERANCE PAY, RETIREMENT OR OTHER BENEFIT PLAN, AGREEMENT OR
ARRANGEMENT, OR EMPLOYMENT OR CONSULTING AGREEMENT WITH OR FOR THE BENEFIT OF
ANY PERSON, OR AMEND ANY OF SUCH PLANS OR ANY OF SUCH AGREEMENTS IN EXISTENCE ON
THE DATE HEREOF; PROVIDED, HOWEVER, THAT THIS CLAUSE (4) SHALL NOT PROHIBIT
PURCHASER FROM RENEWING ANY SUCH PLAN, AGREEMENT OR ARRANGEMENT ALREADY IN
EXISTENCE ON TERMS NO MORE FAVORABLE TO THE PARTIES TO SUCH PLAN, AGREEMENT OR
ARRANGEMENT; EXCEPT AS OTHERWISE EXPRESSLY CONTEMPLATED HEREBY, ENTER INTO ANY
OTHER AGREEMENTS, COMMITMENTS OR CONTRACTS, EXCEPT FOR (i) AGREEMENTS,
COMMITMENTS OR CONTRACTS FOR THE PURCHASE, SALE OR LEASE OF GOODS OR SERVICES
INVOLVING PAYMENTS OR RECEIPTS BY PURCHASER OR ITS SUBSIDIARIES NOT IN EXCESS OF
$100,000, OR (ii) LEASES FOR RENTAL SPACE IN AN AMOUNT NOT TO EXCEED $100,000
FOR ANY LEASE; EXCEPT AS OTHERWISE EXPRESSLY CONTEMPLATED HEREBY, AUTHORIZE,
RECOMMEND, PROPOSE OR ANNOUNCE AN INTENTION TO AUTHORIZE, RECOMMEND OR PROPOSE,
OR ENTER INTO ANY
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AGREEMENT IN PRINCIPLE OR AN AGREEMENT WITH RESPECT TO, ANY PLAN OF
LIQUIDATION OR DISSOLUTION, ANY ACQUISITION OF A MATERIAL AMOUNT OF ASSETS OR
SECURITIES, ANY SALE, TRANSFER, LEASE, LICENSE, PLEDGE, MORTGAGE, OR OTHER
DISPOSITION OR ENCUMBRANCE OF A MATERIAL AMOUNT OF ASSETS OR SECURITIES OR ANY
MATERIAL CHANGE IN ITS CAPITALIZATION, OR ANY ENTRY INTO A MATERIAL CONTRACT
OR ANY AMENDMENT OR MODIFICATION OF ANY MATERIAL CONTRACT OR ANY RELEASE OR
RELINQUISHMENT OF ANY MATERIAL CONTRACT RIGHTS; AUTHORIZE OR COMMIT TO MAKE
CAPITAL EXPENDITURES IN EXCESS OF $100,000; MAKE ANY CHANGE IN THE ACCOUNTING
METHODS OR ACCOUNTING PRACTICES FOLLOWED BY PURCHASER; SETTLE ANY ACTION, SUIT,
CLAIM, INVESTIGATION OR PROCEEDING (LEGAL, ADMINISTRATIVE OR ARBITRATIVE) IN
EXCESS OF $200,000 WITHOUT THE CONSENT OF SELLER; OR AGREE TO DO ANY OF THE
FOREGOING.
DISCONTINUATION OF SCHOOL BUSINESS. NOTWITHSTANDING THE PROVISIONS OF SECTION
7.2(a), EACH OF THE GILAT PARTIES HEREBY ACKNOWLEDGE THAT PURCHASER IS AND WILL
CONTINUE TO, WITHOUT REQUIRING THE CONSENT OF GILAT ISRAEL OR SELLER AND
WITHOUT BEING SUBJECT TO THE RESTRICTIONS CONTAINED IN SECTION 7.2(a), TAKE
CERTAIN ACTION THAT IS NOT IN THE ORDINARY COURSE OF BUSINESS NOR CONSISTENT
WITH PAST PRACTICES IN CONNECTION WITH THE DISCONTINUATION AND WINDING DOWN OF
PURCHASER'S SCHOOL-RELATED BUSINESSES.
GILAT REVIEW OF EXPENDITURES.
Upon the execution of this Agreement, the Parties agree that Gilat
Israel shall have the right to review and approve all proposed cash
expenditures of Purchaser equal to or greater than $25,000 prior to their
disbursement. The Parties agree that from the date hereof until the Closing
Date, other than in the ordinary course consistent with past practice, as not
otherwise restricted by the provisions of Section 7.2(a) or as permitted by
Section 7.2(b), Purchaser shall not take any action that may materially affect
Purchaser's cash and cash equivalent holdings, which as of the date hereof
equals at least $36 million, including, without limitation, writing checks or
making cash disbursements of any kind, without the prior express consent of
both Gilat Israel and Purchaser's Chief Executive Officer.
INDEMNIFICATION
INDEMNIFICATION GENERALLY BY GILAT ISRAEL AND SELLER.
FROM AND AFTER THE CLOSING DATE, GILAT ISRAEL AND SELLER SHALL JOINTLY AND
SEVERALLY INDEMNIFY PURCHASER'S INDEMNIFIED PERSONS AGAINST, HOLD PURCHASER'S
INDEMNIFIED PERSONS
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HARMLESS FROM, AND PROMPTLY REIMBURSE PURCHASER'S INDEMNIFIED PERSONS FOR, ANY
AND ALL INDEMNIFIABLE CLAIMS INCURRED, SUFFERED, SUSTAINED OR REQUIRED TO BE
PAID BY ANY OF PURCHASER'S INDEMNIFIED PERSONS, RESULTING FROM, ARISING OUT
OF, BASED UPON OR IN RESPECT OF THE FOLLOWING (INCLUDING, WITHOUT LIMITATION,
ANY OF THE FOLLOWING SOUGHT TO BE IMPOSED, OR THAT UNDER ANY LAW OR LEGAL OR
EQUITABLE PRINCIPLE OR RIGHT OF ACTION COULD BE IMPOSED, UPON PURCHASER'S
INDEMNIFIED PERSONS): ANY FAILURE OR BREACH OF THE REPRESENTATIONS OR WARRANTIES
MADE BY GILAT ISRAEL AND SELLER IN SECTION 4.1 OF THIS AGREEMENT OR IN ANY
AGREEMENT, DOCUMENT OR INSTRUMENT EXECUTED AND DELIVERED PURSUANT HERETO OR IN
CONNECTION WITH THE CLOSING OF THE TRANSACTIONS HEREUNDER TO BE TRUE AS OF THE
DATE ON WHICH THEY ARE MADE;
ANY BREACH OF ANY COVENANT MADE BY GILAT ISRAEL OR SELLER IN THIS AGREEMENT; OR
ANY LIABILITY, PAYMENT OR OBLIGATION CONCERNING THE BUSINESS OR THE ASSETS OR
REQUIRED BY THIS AGREEMENT TO BE DISCLOSED BY GILAT ISRAEL OR SELLER TO
PURCHASER AND NOT SO DISCLOSED; PROVIDED, HOWEVER, THAT NEITHER OF THE GILAT
PARTIES SHALL HAVE ANY LIABILITY UNDER THIS SECTION 8.1 UNTIL THE AGGREGATE
AMOUNT TO WHICH PURCHASER'S INDEMNIFIED PERSONS WOULD OTHERWISE BE ENTITLED
EXCEEDS $100,00; AND PROVIDED, FURTHER, HOWEVER, THAT THE GILAT PARTIES
AGGREGATE LIABILITY UNDER THIS SECTION 8.1 SHALL NOT EXCEED $50 MILLION.
EACH OF THE GILAT PARTIES SHALL BE ENTITLED, AT ITS OPTION, TO ASSUME AND
CONTROL THE DEFENSE OF ANY CLAIMS, ACTIONS, SUITS OR PROCEEDINGS BY ANY THIRD
PARTY ALLEGED OR ASSERTED AGAINST PURCHASER'S INDEMNIFIED PERSONS IN RESPECT
OF, RESULTING FROM, RELATED TO OR ARISING OUT OF ANY SUCH LIABILITIES,
PAYMENTS AND OBLIGATIONS FOR WHICH INDEMNIFICATION UNDER THIS SECTION 8.1 IS
SOUGHT BY THEM AT ITS EXPENSE AND THROUGH COUNSEL SELECTED BY GILAT ISRAEL OR
SELLER, AS THE CASE MAY BE, AND APPROVED BY PURCHASER (WHICH APPROVAL SHALL
NOT BE UNREASONABLY WITHHELD, CONDITIONED OR DELAYED) IF GILAT ISRAEL OR
SELLER, AS THE CASE MAY BE, GIVES PROMPT NOTICE OF ITS INTENTION TO DO SO TO
PURCHASER'S INDEMNIFIED PERSONS AND REIMBURSES PURCHASER'S INDEMNIFIED PERSONS
FOR THEIR REASONABLE COSTS AND EXPENSES INCURRED PRIOR TO THE ASSUMPTION BY
GILAT ISRAEL OR SELLER, AS THE CASE MAY BE, OF SUCH DEFENSE; PROVIDED,
HOWEVER, THAT PURCHASER'S INDEMNIFIED PERSONS SHALL HAVE THE RIGHT TO EMPLOY
SEPARATE COUNSEL (INCLUDING LOCAL COUNSEL), AND THE RELEVANT GILAT PARTY SHALL
BEAR THE REASONABLE AND DOCUMENTED FEES, COSTS AND EXPENSES OF SUCH SEPARATE
COUNSEL IF (i) THE USE OF COUNSEL CHOSEN BY THE RELEVANT GILAT PARTY TO
REPRESENT PURCHASER'S INDEMNIFIED PERSONS WOULD PRESENT
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SUCH COUNSEL WITH A CONFLICT OF INTEREST OR (ii) THE ACTUAL OR POTENTIAL
DEFENDANTS IN, OR TARGETS OF, ANY SUCH ACTION INCLUDE BOTH PURCHASER'S
INDEMNIFIED PERSONS AND THE RELEVANT GILAT PARTY AND PURCHASER'S INDEMNIFIED
PERSONS SHALL HAVE REASONABLY CONCLUDED THAT THERE MAY BE LEGAL DEFENSES
AVAILABLE TO IT WHICH ARE DIFFERENT FROM OR ADDITIONAL TO THOSE AVAILABLE TO
THE RELEVANT GILAT PARTY. IN THE EVENT THAT GILAT ISRAEL OR SELLER, AS THE
CASE MAY BE, SHALL ASSUME THE DEFENSE OF ANY SUCH CLAIM, ACTION, SUIT OR
PROCEEDING AS AFORESAID, PURCHASER'S INDEMNIFIED PERSONS SHALL NEVERTHELESS BE
PERMITTED TO CONTINUE TO PARTICIPATE IN ANY SUCH CLAIM, ACTION, SUIT OR
PROCEEDING WITH COUNSEL OF THEIR CHOICE AT THE EXPENSE OF PURCHASER'S
INDEMNIFIED PERSONS.
INDEMNIFICATION GENERALLY BY PURCHASER.
FROM AND AFTER THE CLOSING DATE, PURCHASER SHALL INDEMNIFY GILAT ISRAEL AND
SELLER AND THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYERS, AGENTS AND
STOCKHOLDERS (COLLECTIVELY, THE "SELLER'S INDEMNIFIED PERSONS") AGAINST, HOLD
SELLER'S INDEMNIFIED PERSONS HARMLESS FROM, AND PROMPTLY REIMBURSE SELLER'S
INDEMNIFIED PERSONS FOR, ANY AND ALL INDEMNIFIABLE CLAIMS INCURRED, SUFFERED,
SUSTAINED OR REQUIRED TO BE PAID BY ANY OF SELLER'S INDEMNIFIED PERSONS
RESULTING FROM, ARISING OUT OF, BASED UPON OR IN RESPECT OF THE FOLLOWING
(INCLUDING, WITHOUT LIMITATION, ANY OF THE FOLLOWING SOUGHT TO BE IMPOSED, OR
WHICH UNDER ANY LAW OR LEGAL OR EQUITABLE PRINCIPLE OR RIGHT OF ACTION COULD
BE IMPOSED, UPON SELLER'S INDEMNIFIED PERSONS): ANY FAILURE OR BREACH OF THE
REPRESENTATIONS OR WARRANTIES MADE BY PURCHASER IN SECTION 4.2 OF THIS
AGREEMENT OR IN ANY AGREEMENT, DOCUMENT OR INSTRUMENT EXECUTED AND DELIVERED
PURSUANT HERETO OR IN CONNECTION WITH THE CLOSING OF THE TRANSACTIONS
CONTEMPLATED HEREUNDER TO BE TRUE ON THE DATE OF THIS AGREEMENT OR ON THE
CLOSING DATE; OR ANY BREACH OF ANY COVENANT MADE BY PURCHASER IN OR PURSUANT TO
THIS AGREEMENT; PROVIDED, HOWEVER, THAT PURCHASER SHALL NOT HAVE ANY LIABILITY
UNDER THIS SECTION 8.2 UNTIL THE AGGREGATE AMOUNT TO WHICH SELLER'S INDEMNIFIED
PERSONS WOULD OTHERWISE BE ENTITLED EXCEEDS $100,000; AND PROVIDED, FURTHER,
HOWEVER, THAT PURCHASER'S AGGREGATE LIABILITY UNDER THIS SECTION 8.2 SHALL NOT
EXCEED $50 MILLION.
PRIOR TO THE CLOSING, PURCHASER SHALL BE ENTITLED, AT ITS OPTION, TO ASSUME AND
CONTROL THE DEFENSE OF ANY CLAIMS, ACTIONS, SUITS OR PROCEEDINGS BY ANY THIRD
PARTY ALLEGED OR ASSERTED AGAINST SELLER'S INDEMNIFIED PARTIES IN RESPECT OF,
RESULTING FROM, RELATED TO OR ARISING OUT OF ANY SUCH LIABILITIES, PAYMENTS AND
OBLIGATIONS FOR WHICH INDEMNIFICATION UNDER THIS SECTION
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8.2 IS SOUGHT BY THEM AT ITS EXPENSE AND THROUGH COUNSEL SELECTED BY PURCHASER
AND APPROVED BY THE GILAT PARTIES (WHICH APPROVAL SHALL NOT BE UNREASONABLY
WITHHELD, CONDITIONED OR DELAYED) IF PURCHASER, GIVES PROMPT NOTICE OF ITS
INTENTION TO DO SO TO SELLER'S INDEMNIFIED PERSONS AND REIMBURSES SELLER'S
INDEMNIFIED PERSONS FOR THEIR REASONABLE COSTS AND EXPENSES INCURRED PRIOR TO
THE ASSUMPTION BY PURCHASER OF SUCH DEFENSE; PROVIDED, HOWEVER, THAT SELLER'S
INDEMNIFIED PERSONS SHALL HAVE THE RIGHT TO EMPLOY SEPARATE COUNSEL (INCLUDING
LOCAL COUNSEL), AND PURCHASER SHALL BEAR THE REASONABLE AND DOCUMENTED FEES,
COSTS AND EXPENSES OF SUCH SEPARATE COUNSEL IF (i) THE USE OF COUNSEL CHOSEN BY
PURCHASER TO REPRESENT SELLER'S INDEMNIFIED PERSONS WOULD PRESENT SUCH COUNSEL
WITH A CONFLICT OF INTEREST OR (ii) THE ACTUAL OR POTENTIAL DEFENDANTS IN, OR
TARGETS OF, ANY SUCH ACTION INCLUDE BOTH SELLER'S INDEMNIFIED PERSONS AND
PURCHASER AND SELLER'S INDEMNIFIED PERSONS SHALL HAVE REASONABLY CONCLUDED THAT
THERE MAY BE LEGAL DEFENSES AVAILABLE TO IT WHICH ARE DIFFERENT FROM OR
ADDITIONAL TO THOSE AVAILABLE TO PURCHASER.
AFTER THE CLOSING OR IF PURCHASER SHALL NOT HAVE ASSUMED THE DEFENSE OF ANY
CLAIM, ACTION OR PROCEEDING PURSUANT TO SECTION 8.1(a) HEREOF, SELLER'S
INDEMNIFIED PERSONS SHALL HAVE THE RIGHT, BUT NOT THE OBLIGATION, TO CONTEST,
DEFEND OR LITIGATE, AND TO RETAIN COUNSEL OF THEIR CHOICE IN CONNECTION WITH,
ANY CLAIM, ACTION, SUIT OR PROCEEDING BY ANY THIRD PARTY ALLEGED OR ASSERTED
AGAINST SELLER'S INDEMNIFIED PERSONS IN RESPECT OF, RESULTING FROM, RELATED TO
OR ARISING OUT OF ANY SUCH LIABILITIES, PAYMENTS AND OBLIGATIONS FOR WHICH
INDEMNIFICATION UNDER THIS SECTION 8.2 IS SOUGHT BY THEM AND THE COST AND
EXPENSE THEREOF SHALL BE SUBJECT TO THE INDEMNIFICATION OBLIGATIONS OF
PURCHASER HEREUNDER.
IF PURCHASER ACKNOWLEDGES IN WRITING ITS OBLIGATION TO INDEMNIFY SELLER'S
INDEMNIFIED PERSONS IN RESPECT OF SUCH LIABILITIES, PAYMENTS AND OBLIGATIONS
TO THE FULL EXTENT PROVIDED BY THIS SECTION 8.2, AND IT PROVIDES REASONABLE
EVIDENCE OF ITS ABILITY TO SATISFY ANY ADVERSE JUDGMENT, PURCHASER SHALL BE
ENTITLED, AT ITS OPTION, TO ASSUME AND CONTROL THE DEFENSE OF SUCH CLAIMS,
ACTIONS SUITS OR PROCEEDINGS AT ITS EXPENSE AND THROUGH COUNSEL OF ITS CHOICE
IF IT GIVES PROMPT NOTICE OF ITS INTENTION TO DO SO TO SELLER'S INDEMNIFIED
PERSONS AND REIMBURSES SELLER'S INDEMNIFIED PERSONS FOR THEIR COSTS AND
EXPENSES INCURRED PRIOR TO THE ASSUMPTION BY PURCHASER OF SUCH DEFENSE.
IN THE EVENT THAT PURCHASER SHALL ASSUME THE DEFENSE OF ANY SUCH CLAIM,
ACTION, SUIT OR PROCEEDING AS AFORESAID, SELLER'S INDEMNIFIED PERSONS SHALL
NEVERTHELESS BE PERMITTED TO CONTINUE TO PARTICIPATE IN ANY SUCH CLAIM,
ACTION, SUIT OR PROCEEDING WITH COUNSEL OF THEIR CHOICE AT SELLER'S
INDEMNIFIED PERSONS' EXPENSE.
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PURCHASER SHALL NOT BE ENTITLED TO SETTLE OR COMPROMISE ANY SUCH CLAIM,
ACTION, SUIT OR PROCEEDING WITHOUT THE PRIOR WRITTEN CONSENT OF SELLER, WHICH
CONSENT SHALL NOT BE UNREASONABLY WITHHELD, CONDITIONED OR DELAYED, EXCEPT
THAT THE CONSENT OF SELLER SHALL NOT BE REQUIRED IF SUCH SETTLEMENT WOULD
ENTAIL SOLELY THE PAYMENT OF CASH DAMAGES PAYABLE IN FULL (AND NOT BY
INSTALLMENT OR ON ANY DEFERRED BASIS) FOR WHICH PURCHASER SHALL BE RESPONSIBLE
AND SHALL EFFECT PAYMENT SIMULTANEOUSLY WITH THE EXECUTION OF ANY SETTLEMENT
AGREEMENT AND RELEASES (INCLUDING RELEASES OF SELLER'S INDEMNIFIED PERSONS)
AND PROVIDED THAT SUCH SETTLEMENT DOES NOT ENTAIL ANY ADMISSION OR STIPULATION
THAT COULD ADVERSELY AFFECT SELLER'S INDEMNIFIED PERSONS (OR THEIR SUCCESSORS
AND ASSIGNS).
NOTICE OF CLAIMS FOR INDEMNIFICATION.
Purchaser on the one hand, or Gilat Israel or Seller, on the other
hand, as the case may be, shall notify each other promptly, and in any event
within thirty (30) days, of the assertion by any third party of any claim
against any of Purchaser's Indemnified Persons or Seller's Indemnified
Persons, as the case may be, with respect to which any of them intend to make
a claim for indemnification under Section 8.1 or Section 8.2 hereof. Any
notice of any claim pursuant to Section 8.1 or Section 8.2 shall set forth the
dollar amount thereof sought by the party seeking indemnification, unless the
amount of such claim is not yet determinable (and such notice shall so state),
and a statement of the facts underlying such claim in reasonably sufficient
detail (to the extent such facts are readily available to the party claiming
indemnification) so as to inform the Party against which indemnification is
sought as to the basis of such claim and the manner in which the amount of
such claim was computed. The failure by an indemnified party to notify an
indemnifying party of an Indemnifiable Claim shall not relieve the
indemnifying party of any indemnification responsibility under Section 8.1 or
Section 8.2, provided that such failure does not materially prejudice the
ability of the indemnifying party to defend such Indemnifiable Claim.
Purchaser's Indemnified Persons and Seller's Indemnified Persons shall
cooperate with each other in any investigation by the others of any such
claim.
SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
All of the representations and warranties of Gilat Israel and Seller
contained in Section 4.1 hereof and of Purchaser contained in Section 4.2
hereof shall continue in effect until the second anniversary of the Closing
Date.
TAX INDEMNITIES
TAX INDEMNITIES. From and after the Closing Date, Gilat Israel and Seller
shall jointly and severally indemnify and hold Purchaser and the Company
harmless from all federal, state, local, foreign and other Taxes imposed on
Purchaser, the Company or any of its Subsidiaries (A) for any pre-Closing
period or (B) resulting from the transfer prior to the Closing of assets,
properties and businesses to the Company, or the consummation prior
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to the Closing of any other actions or transactions contemplated hereby.
Notwithstanding any other provision to the contrary in this Agreement, Gilat
Israel and Seller agree that after the Closing, no Tax Return (or amendments
to any previously filed Tax Return) with respect to the Company shall be filed
with or submitted to any Government without prior approval by Purchaser.
CHARACTER OF INDEMNITY PAYMENTS.
All amounts paid pursuant to Article 9 of this Agreement by one Party
to another Party (other than interest payments) shall be treated by such
Parties as an adjustment to the Share Consideration. In the event any taxing
authority shall assert, or applicable Law shall require, that any amount
referred to in the preceding sentence shall be treated as income to the
recipient thereof, then the amount of such payment, if, and only if, such
payment relates to Taxes, shall be adjusted to reflect the impact of all
applicable Taxes so that the recipient, after the impact of all Taxes is taken
into consideration, shall be in the same position as it would have been had
the event creating the obligation on the part of the payor to make such
payment never occurred.
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REFUNDS.
IN THE EVENT THAT PURCHASER OR THE COMPANY RECEIVES A REFUND OR CREDIT OF TAX
FOR WHICH GILAT ISRAEL OR SELLER, MADE A PAYMENT PURSUANT TO SECTION 9.1 OF
THIS AGREEMENT OR ANY OTHER PROVISION OF THIS AGREEMENT, THEN PURCHASER OR THE
COMPANY, AS THE CASE MAY BE, SHALL PROMPTLY PAY TO GILAT ISRAEL OR SELLER, AS
THE CASE MAY BE, THE AMOUNT OF SUCH REFUND (INCLUDING ANY ACCRUED INTEREST
PAID IN RESPECT OF SUCH REFUNDED TAX) OR CREDIT. IN THE EVENT THAT ANY REFUND
OR CREDIT OF TAXES FOR WHICH A PAYMENT HAS BEEN MADE TO GILAT ISRAEL OR
SELLER, AS THE CASE MAY BE, PURSUANT TO THIS SECTION 9.3(a) IS SUBSEQUENTLY
REDUCED OR DISALLOWED, GILAT ISRAEL AND SELLER SHALL, JOINTLY AND SEVERALLY,
INDEMNIFY AND HOLD HARMLESS THE PAYOR FOR ANY TAX LIABILITY ASSESSED AGAINST
SUCH PAYOR BY REASON OF THE REDUCTION OR DISALLOWANCE.
IN THE EVENT THAT GILAT ISRAEL OR SELLER RECEIVES A REFUND OR CREDIT OF TAX
FOR WHICH PURCHASER OR THE COMPANY MADE A PAYMENT PURSUANT TO SECTION 9.1 OR
ANY OTHER PROVISION OF THIS AGREEMENT, THEN GILAT ISRAEL OR SELLER, AS THE
CASE MAY BE, SHALL PROMPTLY PAY TO PURCHASER OR THE COMPANY, AS THE CASE MAY
BE, THE AMOUNT OF SUCH REFUND (INCLUDING ANY ACCRUED INTEREST PAID IN RESPECT
OF SUCH REFUNDED TAX) OR CREDIT. IN THE EVENT THAT ANY REFUND OR CREDIT OF
TAXES FOR WHICH A PAYMENT HAS BEEN MADE TO PURCHASER OR THE COMPANY PURSUANT
TO THIS SECTION 9.3(b) IS SUBSEQUENTLY REDUCED OR DISALLOWED, PURCHASER OR THE
COMPANY, AS THE CASE MAY BE, SHALL INDEMNIFY AND HOLD HARMLESS THE PAYOR FOR
ANY TAX LIABILITY ASSESSED AGAINST SUCH PAYOR BY REASON OF THE REDUCTION OR
DISALLOWANCE.
MISCELLANEOUS.
PRIOR TAX SHARING AGREEMENTS. This Agreement terminates and supersedes as of
the Closing Date any and all other tax sharing agreements, if any, in effect
on the Closing Date as to which the Company or any of its Subsidiaries is or
was a party, for all Taxes imposed by any federal, state, foreign or local
Government or taxing authority, regardless of the period for which such Taxes
are imposed.
SURVIVAL OF CLAIMS. Notwithstanding any other provision of this Agreement, no
claim for indemnification under this Article 9 may be made in respect of any
Tax that is asserted by any taxing authority after the applicable statute of
limitations period with respect to such Tax has expired, except for a claim
for indemnification for the cost of contesting such assertion.
TERMINATION
TERMINATION. This Agreement may be terminated at any time prior to the
Closing Date:
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BY THE WRITTEN CONSENT OF PURCHASER AND SELLER; BY EITHER PURCHASER OR SELLER,
IF THE TRANSACTIONS CONTEMPLATED HEREBY SHALL NOT HAVE BEEN CONSUMMATED PURSUANT
HERETO BY 5:00 P.M. EASTERN STANDARD TIME ON NOVEMBER 30, 2001, UNLESS SUCH DATE
SHALL HAVE BEEN EXTENDED BY MUTUAL WRITTEN CONSENT OF PURCHASER AND SELLER;
PROVIDED, HOWEVER, THAT A PARTY MAY NOT TERMINATE THIS AGREEMENT PURSUANT TO
THIS CLAUSE (b) IF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT ARE NOT
CONSUMMATED BY NOVEMBER 30, 2001 IS A RESULT OF A BREACH BY SUCH PARTY OF ITS
REPRESENTATIONS, WARRANTIES OR AGREEMENTS HEREUNDER.
BY PURCHASER, BY WRITTEN NOTICE TO SELLER IF ANY OF THE CONDITIONS SET FORTH IN
SECTIONS 5.1 OR 5.2 HEREOF (INCLUDING WITH RESPECT TO ANY REPRESENTATIONS AND
WARRANTIES) SHALL NOT HAVE BEEN, OR IT BECOMES APPARENT THAT ANY OF SUCH
CONDITIONS WILL NOT HAVE BEEN FULFILLED BY THE CLOSING DATE, UNLESS SUCH FAILURE
SHALL BE DUE TO FAILURE OF PURCHASER TO PERFORM OR COMPLY WITH ANY OF THE
COVENANTS, AGREEMENTS OR CONDITIONS HEREOF TO BE PERFORMED OR COMPLIED WITH BY
IT PRIOR TO THE CLOSING; BY SELLER, BY WRITTEN NOTICE TO PURCHASER IF ANY OF THE
CONDITIONS SET FORTH IN SECTIONS 5.1 OR 5.3 HEREOF (INCLUDING WITH RESPECT TO
ANY REPRESENTATIONS AND WARRANTIES) SHALL NOT HAVE BEEN, OR IT BECOMES APPARENT
THAT ANY OF SUCH CONDITIONS WILL NOT HAVE BEEN FULFILLED BY THE CLOSING DATE
(OTHER THAN SECTION 6.6 OF THIS AGREEMENT), UNLESS SUCH FAILURE SHALL BE DUE TO
FAILURE OF EITHER OF THE GILAT PARTIES TO PERFORM OR COMPLY WITH ANY OF THE
COVENANTS, AGREEMENTS OR CONDITIONS HEREOF TO BE PERFORMED OR COMPLIED WITH BY
THEM PRIOR TO CLOSING; BY SELLER, IF (i) SECTION 6.6 SHALL BE BREACHED BY
PURCHASER OR ANY OF ITS OFFICERS, DIRECTORS OR EMPLOYEES OR ANY INVESTMENT
BANKER, FINANCIAL ADVISOR, ATTORNEY, ACCOUNTANT OR OTHER REPRESENTATIVE OF
PURCHASER, IN ANY MATERIAL RESPECT AND PURCHASER SHALL HAVE FAILED PROMPTLY TO
TERMINATE THE ACTIVITY GIVING RISE TO SUCH BREACH FOLLOWING SUCH TIME AS
PURCHASER FIRST BECOMES AWARE THEREOF AND USED BEST EFFORTS TO CURE SUCH BREACH,
OR (ii) PURCHASER SHALL BREACH SECTION 6.6 BY FAILING TO PROMPTLY NOTIFY THE
GILAT PARTIES AS REQUIRED THEREUNDER; PROVIDED, IN THE CASE OF (i), PURCHASER
SHALL COMPLY WITH APPLICABLE REQUIREMENTS RELATING TO THE PAYMENT (INCLUDING THE
TIMING OF ANY PAYMENT) OF EACH OF THE GILAT PARTIES' EXPENSES AND THE FEES
REQUIRED BY SECTION 6.6 HEREOF; BY SELLER, IF (i) THE BOARD OF DIRECTORS OF
PURCHASER OR ANY COMMITTEE THEREOF, UNDER THE CIRCUMSTANCES CONTEMPLATED IN
SECTION 6.6 HEREOF, SHALL HAVE WITHDRAWN OR MODIFIED IN A MANNER ADVERSE TO THE
GILAT PARTIES ITS APPROVAL OR RECOMMENDATION OF THIS AGREEMENT OR
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THE SALE AND THE OTHER TRANSACTIONS CONTEMPLATED HEREBY OR FAILED TO RECONFIRM
ITS RECOMMENDATION WITHIN FIVE BUSINESS DAYS AFTER A WRITTEN REQUEST TO DO SO,
OR APPROVED OR RECOMMENDED ANY TRANSACTION PROPOSAL OR (ii) THE BOARD OF
DIRECTORS OF PURCHASER OR ANY COMMITTEE THEREOF SHALL HAVE RESOLVED TO TAKE
ANY OF THE FOREGOING ACTIONS; PROVIDED, THAT IN THE CASE OF CLAUSES (i) OR
(ii), PURCHASER SHALL COMPLY WITH APPLICABLE REQUIREMENTS RELATING TO THE
PAYMENT (INCLUDING THE TIMING OF ANY PAYMENT) OF EACH OF THE GILAT PARTIES'
EXPENSES AND THE FEE REQUIRED BY SECTION 6.6(b); OR BY PURCHASER, IF IT ELECTS
TO TERMINATE THIS AGREEMENT IN ACCORDANCE WITH SECTION 6.6(b); PROVIDED, THAT IT
HAS COMPLIED WITH ALL PROVISIONS THEREOF.
EFFECT OF TERMINATION.
In the event of the termination of this Agreement pursuant to this
Article 10, this Agreement shall become void and have no effect, without any
liability to any Person in respect thereof or of the transactions contemplated
hereby on the part of any Party except as otherwise provided in Section 11.2
hereof.
MISCELLANEOUS
GOVERNING LAW.
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF DELAWARE WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF
LAWS.
EACH OF THE PARTIES HERETO IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS,
PLEADING, NOTICES OR OTHER PAPERS BY THE MAILING OF COPIES THEREOF BY
REGISTERED, CERTIFIED OR FIRST CLASS MAIL, POSTAGE PREPAID, TO SUCH PARTY AT
SUCH PARTY'S ADDRESS SET FORTH HEREIN, OR BY ANY OTHER METHOD PROVIDED OR
PERMITTED UNDER DELAWARE LAW.
EACH PARTY IRREVOCABLY AND UNCONDITIONALLY AGREES AND CONSENTS THAT ANY SUIT,
ACTION OR OTHER LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT
SHALL BE BROUGHT AND HEARD IN STATE OF DELAWARE, AND EACH PARTY IRREVOCABLY
CONSENTS TO PERSONAL JURISDICTION IN ANY AND ALL TRIBUNALS IN THE STATE OF
DELAWARE.
REMEDIES.
The rights and remedies provided herein and all other rights and
remedies available at law or in equity are, to the extent permitted by law,
cumulative and not exclusive of any other right or remedy now or hereafter
available at law or in equity. In the event that a Party brings a claim,
action or proceeding against any of the other Parties alleging breach of such
Party's obligations hereunder (the "breaching party"), and the non-breaching
party successfully obtains a final, non-appealable ruling from a court of
competent jurisdiction that such breaching party has in fact breached its
obligations
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hereunder, such non-breaching party shall be entitled to be reimbursed for all
of its reasonable and documented out of pocket expenses for outside
professionals (including, attorneys and financial advisors) incurred by it in
connection with bringing the successful suit, claim or proceeding.
SUCCESSORS AND ASSIGNS.
Except as otherwise provided in Sections 2.3(c), 2.4(d) and 2.5
hereof, neither this Agreement nor any of the rights, interests or obligations
hereunder may be assigned by any Party without the prior written consent of
the other Parties; provided, however, that if the Parties mutually agree,
Purchaser may assign its rights, but not its obligations, hereunder to any
wholly-owned subsidiary of Purchaser formed by Purchaser specifically to
consummate the Sale. Except as otherwise expressly provided herein, the
provisions hereof shall inure to the benefit of, and be binding upon, the
successors and permitted assigns of the Parties hereto.
AMENDMENT.
This Agreement may be amended by the Parties at any time prior to the
consummation of the Sale. This Agreement may not be amended except by an
instrument in writing signed on behalf of each of the Parties.
ENTIRE AGREEMENT.
This Agreement and the Exhibits and Schedules hereto constitute the
entire agreement among the Parties with respect to the subject matter hereof.
There are no representations, warranties, covenants or undertakings with
respect to the subject matter hereof other than those expressly set forth
herein. This Agreement supersedes all prior agreements between the Parties
with respect to the subject matter hereof.
NO RELIANCE ON OTHER INFORMATION.
Except for the representations and warranties contained in this
Agreement, none of the Parties nor any representative, agent or affiliate or
other Person acting for any of them makes any other representation or
warranty, express or implied.
SEVERABILITY.
If any provision of this Agreement, including any phrase, sentence,
clause, section or subsection is inoperative or unenforceable for any reason,
such circumstances shall not have the effect of rendering the provision in
question inoperative or unenforceable in any other case or circumstance, or of
rendering any other provision or provisions herein contained invalid,
inoperative, or unenforceable to any extent whatsoever.
NO THIRD PARTY BENEFICIARIES.
Except as provided for in Section 2.5 hereof, nothing in this
Agreement shall confer any rights upon any Person or entity that is not a
party or permitted assignee of a party to this Agreement.
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NOTICES.
All notices and other communications required or permitted hereunder
shall be in writing and shall be delivered by hand, transmitted via facsimile
or mailed by first-class mail, postage prepaid, addressed
IF TO GILAT ISRAEL OR SELLER:
c/o Gilat Satellite Networks, Ltd.
00/X Xxxxx Xxxxxxx Xxxxxx
Daniv Park, Kiryat Xxxx
Petah Tikva, Israel
Facsimile: 972-3-921-3321
Attn: Xxxx Xxxxxxxxxx
with a copy to:
Xxxxxx & Xxxxxx
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
Attn: Xxxxxx X. Xxxxxx, Esq.
IF TO PURCHASER:
rStar Corporation
0000 Xxxxxxxxx Xxxxxxx, Xxxxx 000
Xxx Xxxxx, XX 00000
Facsimile No.: (000) 000-0000
Attention: Xxxxx Xxxxxxxxx, Chairman
with a copy to:
Xxxxx Xxxxxxx Xxxxxxx & Xxxxx LLP
0000 Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Facsimile No.: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxx, Esq.
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DELAYS OR OMISSIONS.
No delay or omission to exercise any right, power or remedy accruing
to the Parties upon any breach or default by the another Party under this
Agreement, shall impair any such right, power or remedy of the non-breaching
Parties, nor shall it be construed to be a waiver of any such breach or
default, or any acquiescence therein, or of or in any similar breach or
default thereafter occurring; nor shall any waiver of any single breach or
default be deemed a waiver of any other breach or default theretofore or
thereafter occurring. Any waiver, permit, consent or approval of any kind or
character on the part of any Party of any breach or default under this
Agreement or any waiver on the part of another Party of any provisions or
conditions of this Agreement, must be in writing and shall be effective only
to the extent specifically set forth in writing. All remedies, either under
this Agreement, or by law or otherwise afforded to a Party, shall be
cumulative and not alternative.
LEGAL FEES.
The provision of Section 7.2 to the contrary notwithstanding,
simultaneously with the Closing, Purchaser shall be entitled to pay, and it
shall pay, all reasonable legal fees and disbursements incurred by Purchaser
in connection with the transactions contemplated by this Agreement.
TITLES AND SUBTITLES.
The titles of the sections, paragraphs and subparagraphs of this
Agreement are for convenience of reference only and are not to be considered
in construing this Agreement.
COUNTERPARTS.
This Agreement may be executed in any number of counterparts, each of
which shall be an original, but all of which together shall constitute one
instrument.
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IN WITNESS WHEREOF, each of the Parties has caused this Agreement to
be duly executed on its behalf either by itself or by one of its officers
thereunto duly authorized, all as of the date and year first above written.
PURCHASER:
rSTAR CORPORATION
By: /s/ Xxxxx Xxxxxxxxx
-----------------------------------
Name: Xxxxx Xxxxxxxxx
Title: President and Chief Executive
Officer
SELLER:
GILAT TO HOME LATIN AMERICA
(HOLLAND) N.V.
By: /s/ Giora Oron
-----------------------------------
Name: Giora Oron
Title: Chief Executive Officer
GILAT SATELLITE NETWORKS LTD.
By: /s/ Xxxx Xxxxxxxxxx
-----------------------------------
Name: Xxxx Xxxxxxxxxx
Title: V.P. Finance, Administration
and CFO
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