Exhibit 1
Execution copy dated 2 February 2000
ENECO WED-ACTIVITEITEN B.V.
N.V. ENECO
UPC NEDERLAND N.V.
BELMARKEN HOLDING B.V.
AND
UNITED PAN-EUROPE COMMUNICATIONS N.V.
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SHARE PURCHASE AGREEMENT
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CONTENTS
CLAUSE PAGE
1. DEFINITIONS AND INTERPRETATION .............................. 9
2. SALE AND PURCHASE ........................................... 10
3. CONDITIONS PRECEDENT ........................................ 10
4. CONSIDERATION ............................................... 11
5. COMPLETION .................................................. 12
6. DUE DILIGENCE INVESTIGATION ................................. 13
7. WARRANTIES AND INDEMNIFICATION .............................. 14
8. WARRANTY CLAIMS ............................................. 15
9. REPRESENTATIONS AND WARRANTIES AS TO ALL PARTIES ............ 17
10. INTERCOMPANY INDEBTEDNESS ................................... 18
11. RELEASES .................................................... 19
12. EMPLOYMENT .................................................. 20
13. INTERIM ARRANGEMENTS ........................................ 20
14. POST COMPLETION OBLIGATIONS ................................. 20
15. CONFIDENTIALITY ............................................. 22
16. ANNOUNCEMENTS ............................................... 22
17. EXPENSES .................................................... 22
18. ASSIGNMENT .................................................. 23
19. PARENT GUARANTEES ........................................... 23
20. NO RESCISSION ............................................... 23
21. ENTIRE AGREEMENT; AMENDMENT ................................. 23
22. NOTICES ..................................................... 23
23. GOVERNING LAW; JURISDICTION ................................. 24
SCHEDULE (I) Business Plan
SCHEDULE 1.1 Definitions
SCHEDULE 4.1 (a) Third party loans
SCHEDULE 4.1 (b) BNG Loans
SCHEDULE 5.2(d) Share Transfer Deed
SCHEDULE 5.2(g) Joint Marketing Agreement
SCHEDULE 5.2(h) Shared Facilities Agreement
SCHEDULE 6.2 Data Room Index
SCHEDULE 7.1 Warranties
SCHEDULE 11.1 Companies' Guarantees
SCHEDULE 11.2 Seller's Guarantees
SCHEDULE 13 (a) Companies Budget 2000
SCHEDULE 14.4 Tax
SCHEDULE 14.8 (a) Draft Articles of Association UPC Nederland N.V.
SCHEDULE 14.8 (b) Draft Supervisory Board Regulations UPC Nederland N.V.
ANNEX 1.1 Disclosure Letter
ANNEX 1.3 Companies' Articles of Association
ANNEX 1.4 Extract of Netwerkdiensten
ANNEX 1.5 Extract of K&T
ANNEX 4.6 Year 2000 Letters
ANNEX 6 Companies' conduct of business since Balance Sheet Date
ANNEX 7.1 Employees
ANNEX 7.2 Authorised Personnel
ANNEX 8 Agreements influencing material legal relationships with
the Companies
ANNEX 10.1 Property Interest To Be Transferred
ANNEX 10.2 K&T Lease Agreements
ANNEX 10.3 Lease Agreements To Be Transferred
ANNEX 13 30 June 1999 Pro Forma Accounts
SHARE PURCHASE AGREEMENT
This Agreement is made this ________ day of February 2000
BETWEEN:
1. ENECO WED-ACTIVITEITEN BV, a private limited liability company (besloten
vennootschap met beperkte aansprakelijkheid) incorporated under the laws of
The Netherlands, having its principal place of business in Rotterdam, The
Netherlands, registered with the Commercial Register at Rotterdam under
number 24281163 (the "Seller");
2. NV ENECO, a public company (naamloze vennootschap) incorporated under the
laws of The Netherlands, having its principal place of business in
Rotterdam, The Netherlands, registered with the Commercial Register at
Rotterdam under number 24246970 (the Seller's Parent");
3. BELMARKEN HOLDING BV, a private company with limited liability (besloten
vennootschap met beperkte aansprakelijkheid) incorporated under the laws of
The Netherlands, having its principal place of business in Amsterdam, The
Netherlands, registered with the Commercial Register at Amsterdam under
number 33201321 (the "Buyer");
4. UPC NEDERLAND NV, a public company (naamloze vennootschap) incorporated
under the laws of The Netherlands, having its principal place of business
in Amsterdam, The Netherlands, registered with the Commercial Register at
Almere under number 33303479 ("UPC-NL")
5. UNITED PAN-EUROPE COMMUNICATIONS NV, a public company incorporated under
the laws of The Netherlands, having its principal place of business in
Amsterdam, The Netherlands, registered with the Commercial Register at
Amsterdam under number 3433274976 (the "Buyer's Parent");
WHEREAS:
the Seller is the owner of
(i) 50,001 shares with a nominal value of NLG 1,000 each (the
"Netwerkdiensten Shares") in the capital of Eneco K&T Netwerkdiensten
BV, a private company with limited liability (besloten vennootschap
met beperkte aansprakelijkheid) incorporated under the laws of The
Netherlands, having its principal place of business in Rotterdam, The
Netherlands registered with the Commercial Register at Rotterdam under
number 24243501 ("Netwerkdiensten"), together constituting all of the
issued and outstanding share capital of Netwerkdiensten; and
(ii) 200 shares with a nominal value of NLG 1,000 each (the "K&T Shares")
in the capital of Eneco Kabel TV & Telecom BV, a private company with
limited liability (besloten vennootschap met beperkte
aansprakelijkheid) incorporated under the laws of The Netherlands,
having its principal place of business in Rotterdam, The Netherlands
registered with the Commercial Register at Rotterdam under number
24275603 ("K&T"), together constituting all of the issued and
outstanding share capital of K & T;
the K&T Shares and the Netwerkdiensten Shares are hereinafter together referred
to as the "Shares"; K&T and Netwerkdiensten are hereinafter together referred to
as the "Companies";
Netwerkdiensten owns and operates telecommunications infrastructure located in
different municipalities in the south western part of The Netherlands (the
"Network"); K&T is involved in the marketing and sales of services rendered
over the Network;
the Buyer acknowledges that pursuant to the agreement entered into by NV ENECO,
a public company with limited liability (naamloze vennootschap)
incorporated under the laws of The Netherlands, having its principal place
of business in Rotterdam, The Netherlands, registered with the Commercial
Register at Rotterdam under number 24246970 ("NV ENECO"), Seller and
Netwerkdiensten, dated 11 June 1999 and a deed of de-merger dated 30
November 1999, the Signaalkabelnet has been split off from Netwerkdiensten
(splitsing);
NV ENECO and Netwerkdiensten have entered into an agreement, dated 11 June
1999, pursuant to which Netwerkdiensten has sold to NV ENECO certain PABX
telephone systems (as further described in said agreement);
NV ENECO and K&T have entered into an agreement, dated 5 July 1999, pursuant to
which K&T will deliver to NV ENECO certain services with respect to NV
ENECO's telephone systems (as further described in said agreement);
NV ENECO and Netwerkdiensten have entered into an agreement regarding the
holding of certain infrastructure on locations owned by NV ENECO, dated 24
June 1999 and will enter into a lease agreement pursuant to article 3 of
such agreement;
Pursuant to a deed of contribution dated 31 December 1998 NV ENECO transferred
the beneficial ownership to all its rights in rem (zakelijke rechten) with
respect to the Network to the extent located in the municipality of
Rotterdam to Netwerkdiensten;
(i) NV ENECO and K&T executed a deed of transfer dated 30 December 1999
pursuant to which K&T acquired from NV ENECO 4000 shares with a nominal
value of NLG 100 each in the share capital of Spirit Interactieve Diensten
BV; and
(ii) NV ENECO and the municipality of Leerdam intend to enter into an
agreement pursuant to which NV ENECO will become the holder of the entire
share capital of ReCaiTel BV (which agreement is dependant on the
approval of the municipal counsel of Leerdam) and NV ENECO intends to
transfer the shares it owns in ReCaiTel BV to Netwerkdiensten before
Completion;
the Buyer wishes to acquire the Shares with the intention to merging the
business of the Companies with that of its subsidiaries engaged in the same
business, initially UPC-NL and agrees to support the business objectives
set out in the Business Plan attached in Schedule (I);
whilst the Seller is willing to sell the Shares, the Seller wishes to pursue a
strategy, together with the Buyer of marketing their products to business
and residential customers of the Companies and the Buyer's subsidiaries
engaged in the same business; these arrangements form an essential reason
for the Seller to enter into this Agreement on the terms herein contained;
specific arrangements are set forth in the Joint Marketing Agreement
attached to this Agreement;
the Seller has enabled the Buyer to conduct a due diligence review of the
Companies, and has provided the Buyer and the Buyer's professional advisers
with access to extensive documentation regarding the Companies, as well as to
the Companies' senior management;
the Seller and the Buyer have observed the relevant provisions of the Merger
Code (SER-besluit Fusiegedragsregels 1975) and each of the Works Councils
(ondernemingsraad) of the Seller and of UPC-NL, have issued their advice in
respect of the transactions contemplated hereby;
the parties have obtained all necessary internal approvals to enter into this
Agreement and consummate the transactions contemplated herein.
IT IS HEREBY AGREED AS FOLLOWS:
DEFINITIONS AND INTERPRETATION
1.1 Capitalised terms used in this Agreement and not otherwise defined shall
have the meaning ascribed to them in Schedule 1.1.
1.2 The recitals, Schedules and Annexes to this Agreement form an integral part
hereof.
1.3 References herein to Articles, Schedules or Annexes are references to
Articles of and Schedules or Annexes to this Agreement unless the context
requires otherwise.
1.4 Unless the context requires otherwise, singular words shall include the
plural and vice-versa and words in a particular gender shall include all
genders.
1.5 Unless the contrary is specifically stated, the words "include" or
"including" are used to indicate that the matters listed are not a complete
enumeration of all matters covered.
1.6 References to persons shall include legal entities (rechtspersonen), as
well as associations and partnerships without legal personality.
1.7 English language words used in this Agreement intend to describe Dutch
legal concepts only and the consequences of the use of these words in
English law or any other foreign law shall be disregarded. In the event of
a discrepancy between an English language word and a Dutch language word
used to clarify the same, the meaning of the Dutch language word shall
prevail.
1.8 Headings are inserted for ease of reading only and may not be used for the
interpretation of this Agreement.
1.9 References to any statute or regulation or any provision thereof include a
reference to any amendments thereof enacted before the date of this
Agreement.
sale and purchase
The Seller hereby sells to the Buyer and the Buyer hereby purchases from
the Seller the Shares, together with all rights attached thereto, subject
to the terms and conditions of this Agreement.
CONDITIONS PRECEDENT
1.1 The obligations of each of the Seller and the Buyer hereunder including the
transfer of the Shares and the payment of the Purchase Price is subject to
the following conditions precedent (opschortende voorwaarden) being
satisfied or waived in accordance with this Article:
the Director-General (directeur-generaal) of the Dutch Competition
Authority (Nederlandse Mededingingsautoriteit) having issued a
decision under Article 37.4 or Article 40 or Article 46.1 or a
license (vergunning) within the meaning of Article 41.1 of the Dutch
Competition Act (Mededingingswet) (the "Act") or the Minister of
Economic Affairs (Minister van Economische Zaken) having issued a
license under Article 47 of the Act with respect to all transactions
and agreements contemplated by this Agreement and, if such decision
or license is given subject to conditions, such conditions having
been approved by the parties (such approval not to be unreasonably
delayed or withheld) or four weeks, including any suspension period,
having expired from a notification within the meaning of Article 34
of the Act of the intention to effect Completion and no decision
within the meaning of Article 37.2 of the Act having been made or
thirteen weeks including any suspension period having expired from
the application within the meaning of Article 42 of the Act for a
license to effect Completion and no decision within the meaning of
Article 41.2 of the Act having been made;
the notifications to and consultations with the trade unions and the SER
Merger Committee pursuant to the Netherlands merger code (SER-
besluit Fusiegedragsregels 1975) having been completed and
objections from the unions concerned, if any, having been dealt with
in a manner satisfactory to the Seller and the Buyer; and
the Works Council (Ondernemingsraad) of the Companies having issued either
(a) an unconditional positive advice or (b) a positive advice with
conditions acceptable to the Companies and the Buyer, on the
transactions contemplated by this Agreement.
1.2 The parties shall use their best efforts to achieve satisfaction of the
conditions set out in Article 3.1 as soon as possible after the date of
this Agreement. If, however, the condition set out in Article 3.1 will not
be satisfied before 1 June 2000, the Seller and the Buyer have the right to
terminate this Agreement.
1.3 If at any time the Buyer or the Seller becomes aware of any fact or
circumstance which might prevent a condition set out in Article 3.1 from
being satisfied before Completion, it shall immediately inform the other.
CONSIDERATION
1.4 The Purchase Price of the Shares shall be an amount of NLG 2,350,000,000
(two billion three hundred and fifty million Netherlands Guilders minus):
(a) the amounts payable at 31 December 1999 by the Companies to third
parties pursuant to the loan agreements specified in Schedule 4.1 (a);
(b) all Intercompany Indebtedness to be paid by the Buyer to the Seller
pursuant to Article 10 of this Agreement which will include the
amounts due by the Majority Owned Affiliates and the Companies to any
company in the Seller's Group pursuant to the current account between
any company in the Seller's Group, the Companies and the Majority
Owned Affiliates as appears at the Completion Date. For the avoidance
of doubt, the current account will include:
the amount of NLG 51,000,000 (fifty-one million Netherlands Guilders) to be paid
by Netwerkdiensten to the municipality of Rotterdam pursuant to Article 2 (a) of
the replacement agreement between the municipality of Rotterdam, Netwerkdiensten
and the Seller's Parent dated 23 December 1999 (the "Vervangingsovereenkomst");
the amount of NLG 37,500,000 (thirty seven million five hundred thousand
Netherlands Guilders) to be paid by Netwerkdiensten to the municipality of
Rotterdam pursuant to Article 2 (b) of the Vervangingsovereenkomst; and
the amounts payable at the Completion Date by the Companies to Bank Nederlandse
Gemeenten NV pursuant to the loan agreements specified in Schedule 4.1 (b);
the amount of NLG 22,263,000 (twenty two million two hundred and sixty three
thousand Netherlands Guilders) payable by the Companies to Generale Bank; and
(c) the total amount of NLG 28,762,000 (twenty eight million seven hundred
and sixty two thousand Netherlands Guilders) provided for in the
preliminary internal management accounts of the Companies and/or the
Majority Owned Affiliates in relation to the matter referred to in
Article 7.3 of this Agreement (the "Article 7.3 Provisions").
1.5 As soon as possible after the Completion Date and in no event later than
six months thereafter the Seller shall prepare a post-completion adjustment
statement to be verified and agreed to by the Buyer (the "Completion
Statement"), which Completion Statement will set out:
the exact amounts as due by the Majority Owned Affiliates and the Companies
to any companies in the Seller's Group pursuant to the current account
between any companies in the Seller's Group, the Companies and the
Majority Owned Affiliates as at the Completion Date; and
the exact amount by which the Article 7.3 Provisions exceeded or do not
provide for the actual costs in relation to the matter referred to in
Article 7.3.
1.6 If it appears that there are differences between the Article 7.3 Provisions
as at the Completion Date and the Completion Statement, the Purchase Price
as set out in Article 4.1 above will be adjusted accordingly. Any
difference shall be paid by the Seller to the Buyer or the Buyer to the
Seller, as the case may be, forthwith. Interest shall be payable on this
difference (if any) at a three months EURIBOR interest rate.
1.7 The Buyer agrees that the Seller will include the Article 7.3 Provisions in
the 1999 Fiscal Unity Tax Return.
COMPLETION
1.8 Completion shall take place at the offices of ▇▇▇▇▇▇▇▇ Chance, ▇▇▇▇▇▇▇▇▇▇
▇▇▇, ▇▇▇▇▇▇▇▇▇, at 11.00 hours on 1 March 2000 (the "Completion Date")
unless otherwise agreed between the Seller and the Buyer in writing and
subject to the conditions set forth in Article 3.1 having been either
satisfied or waived.
1.9 Each of the parties shall perform the following at Completion in the order
set out below it being understood and agreed that the valid execution of
all of the following shall be a condition for the effectiveness of each of
the following:
the Buyer shall pay the Purchase Price payable in cash pursuant to Article 4.1
by telephone transfer into bank account number ▇▇.▇▇.▇▇.▇▇▇ with ABN AMRO
Bank NV, in the name of Stichting Beheer Derdengelden ▇▇▇▇▇▇▇▇ Chance, to
be held to the order of the Buyer pending the execution of the Share
Transfer Deed;
the Seller will procure that NV ENECO will resign voluntarily as Managing
Director (statutaire directeur) of the Companies and (to the extent
applicable) the Majority Owned Affiliates, after which the General Meeting
of Shareholders of the Companies and the Majority Owned Affiliates will
grant NV ENECO full and final discharge (decharge) in respect of its
management of the Companies and (to the extent applicable) the Majority
Owned Affiliates;
the Seller, the Buyer and the Companies shall sign the Share Transfer Deed;
the Parties shall procure the settlement of the Intercompany Indebtedness in
accordance with Article 10;
the Buyer shall submit to the Seller evidence of the willingness of the agreed
relevant parties to release the Seller's Guarantees;
the Seller shall submit to the Buyer evidence of the release of the Companies'
Guarantees;
the Seller's Parent and UPC-NL shall execute the Joint Marketing Agreement,
substantially in the form attached hereto as Schedule 5.2 (g);
the Seller's Parent shall, and the parties shall procure that the Companies
shall, execute the Shared Facilities Agreement, substantially in the form
attached hereto as Schedule 5.2 (h); and
the parties shall do all such further acts and execute all such further
documents as may reasonably be necessary to fully effect the transactions
contemplated by this Agreement.
1.10 Neither the Buyer nor the Seller shall be obliged to perform its
obligations set out in Article 5.2 unless the Seller, the Buyer or UPC-NL
respectively, complies in all material respects with all of its obligations
under Article 5.2 and the other provisions of this Agreement.
1.11 If on the Completion Date the Buyer or UPC-NL fails to comply with any of
its obligations under Article 5.2, and irrespective whether or not such
failure is attributable to the Buyer or UPC-NL, the Seller may at its
option (but without prejudice to any other right or remedy it may have) by
notice in writing to the Buyer:
(a) rescind this Agreement with immediate effect; or
proceed with Completion to the extent reasonably practicable; or
postpone Completion one or more times but not beyond a date which is more than
60 (sixty) days after the Completion Date; and
failing Completion at any new date set for Completion under (c), rescind this
Agreement.
1.12 If the Seller postpones Completion in accordance with Article 5.4 (c), the
provisions of this Agreement apply as if the date to which Completion is
postponed, is the Completion Date.
1.13 If the Seller rescinds this Agreement in accordance with Article 5.4, all
further rights and obligations of the parties shall cease immediately upon
rescission, but rescission shall not affect the accrued rights and
obligations of the parties at the date of rescission.
DUE DILIGENCE INVESTIGATION
1.14 The Buyer, UPC-NL and the Buyer's Parent acknowledge and agree that they
have performed, with the assistance of professional legal, accountancy,
financial, technical and tax advisors, a due diligence investigation (the
"Due Diligence Investigation") in form, scope and substance to their
reasonable satisfaction, and furthermore,
(a) that for the purposes of the Due Diligence Investigation they and
their advisors have had sufficient opportunity to review any and all
information made available to them and their advisors;
that they and their advisors have obtained other information that they and their
advisors deemed proper and necessary for the purposes of entering into this
Agreement, through interviews, presentations, site visits and questions
submitted to the Seller, the Companies and their advisors; and
that they have raised with the Seller and the Companies any and all specific
issues which they considered relevant in connection with the transactions
contemplated hereby.
1.15 The data room information set out in Schedule 6.2, the Disclosure Letter,
the information made available to the Buyer in written answers to questions
and in interviews, presentations and site visits, or which was made
available in any other way, and all information that the Buyer and UPC-NL
obtained or should reasonably have obtained during the Due Diligence
Investigation, or information that otherwise was made or has become
available to the Buyer, UPC-NL and the Buyer's Parent or is in the public
domain as at 31 December 1999 (all of this information hereinafter referred
to as "Disclosed Information"), shall be deemed to have been disclosed to
the Buyer.
1.16 The Buyer acknowledges that the representations and warranties contained in
this Agreement are the only representations, warranties or other assurances
of any kind given by or on behalf of the Seller and the Companies on which
the Buyer may rely in entering into this Agreement.
1.17 The Buyer hereby declares that it is not aware of any matter or thing which
is inconsistent with the representations and warranties contained in this
Agreement or constitutes, or may constitute in the foreseeable future, a
breach or a non-fulfilment of any of those.
WARRANTIES and indemnification
1.18 The Seller represents and warrants (staat ervoor in) to the Buyer that each
of the Warranties (as set forth in Schedule 7.1 hereto) is true, complete
and accurate in all respects and not misleading on the date hereof and will
be so on Completion except for such matters as the Seller has disclosed to
the Buyer in the Disclosed Information, unless explicitly stated otherwise
in respect of any Warranty.
1.19 The Seller does not represent and warrant any future income or proceeds
from the activities contemplated by the Companies, even if such future
predictions have been included in information provided by the Seller to the
Buyer.
1.20 The Seller shall indemnify the Companies and Encalls BV ("Encalls") from
and against all amounts payable to claimants and all reasonable legal costs
and expenses which the Companies or Encalls incur as a result of the claim
made by Superweb VOF against Encalls in relation to
EnCalls purported incapability to deliver sufficient capacity pursuant to
the agreement of 13 August 1999 or any other agreement between Superweb VOF
and Encalls.
Seller shall only indemnify the Companies as set out above to the extent it has
been granted the time and possibility by the Buyer and the Companies to, on
behalf of, in the name and for the benefit of the Companies, (i) defend the
Companies and Encalls against any claims made by Superweb VOF (ii) file and
pursue counterclaims against Superweb and (iii) file and pursue claims against
telecommunications providers for not providing Encalls and/or the Companies with
sufficient capacity.
In this respect, Seller shall be entitled to, on behalf of the Companies and/or
Encalls, take control of the defence, counterclaim(s), indemnification(s),
settlement(s), negotiation(s) or other proceedings in relation to any such
claims or other events which may give rise to any liability on the part of the
Seller or the Seller's Parent and to employ and engage lawyers of their own
choice to handle and defend such matter at the Seller's cost and expense.
The Buyer agrees to and will procure that the Companies will co-operate in all
respects with the Seller in this respect. Any proceeds, recoveries, refunds,
reductions or other benefits shall be taken into account in the amount claimed
by the Companies from the Seller. Parties and the Companies will use their best
endeavours and co-operate to ensure that damages are limited as much as
possible.
If and to the extent the Buyer or UPC-NL itself is (after becoming the parent
company of Encalls) are held liable by Superweb VOF for the exact same matter as
set out above in this Article 7.3, the Seller shall indemnify the Buyer or UPC-
NL in the exact same way and subject to the same limitations as set out above.
WARRANTY CLAIMS
1.21 The Seller shall indemnify the Buyer (or at the Buyer's option, UPC-NL or
the Companies) and/or the Majority Owned Affiliates from and against all
direct damages, losses, liabilities, reasonable costs and expenses which
the Buyer, UPC-NL or one of the Companies incurs as a result of any of the
Warranties not being true, accurate, complete or being misleading. The
Seller and the Seller's Parent shall fulfil their obligations under
Schedule 14.4 of this Agreement.
1.22 The Seller shall not be liable in respect of:
(A) any claim under Articles 7 or 8 resulting from a breach of the
Warranties contained in Section 5 of Schedule 7.l unless notice in
writing stating in reasonable detail the nature of such claim has been
given to the Seller ultimately within the statutory limitation period
in respect of such claim; and
(B) any other claim under Articles 7 or 8 unless notice in writing stating
in reasonable detail the nature of such claim has been given to the
Seller ultimately 18 (eighteen) calendar months after Completion.
1.23 The Seller shall not be liable in respect of any claim:
(A) under Articles 7 or 8 resulting from a breach of the Warranties
contained in Section 2, Section 3 and Section 5 of Schedule 7.1, if
the amount recoverable from the Seller in respect of such claim does
not amount to at least NLG 10,000 (ten thousand Netherlands Guilders);
and
(B) under Articles 7 or 8 resulting from a breach of any other Warranty,
if the amount recoverable from the Seller in respect of such claim
does not amount to at least NLG 2,500,000 (two million five hundred
thousand Netherlands Guilders).
For the purpose of this Article 8.3 only, claims arising in respect of the
same subject matter or from the same cause shall be considered one and the
same claim.
1.24 The Seller shall not be liable in respect of any claim under Articles 7 or
8, unless
(A) Except with respect to any claim resulting from a breach of the
Warranties contained in Section 5 of Schedule 7.1, the sum of the
amounts recoverable from the Seller in respect of all claims (provided
each of such claims exceeds the threshold set out in Article 8.3) is
at least NLG 20,000,000 (twenty million Netherlands Guilders); or
(B) the amounts recoverable from the Seller of at least six different
claims (provided each of such claims exceeds the thresholds set out in
Article 8.3 (b) amount in total to at least NLG 15,000,000 (fifteen
million Netherlands Guilders),
in which case the aggregate amount claimed may be recovered from the Seller
in full.
1.25 The Seller's total liability in respect of claims under Articles 7 or 8
shall be limited to the following maximum amounts:
(A) NLG 235,000,000 (two hundred and thirty five million Netherlands
Guilders) with respect to claims that do not arise (i) under Article
2.1 of Schedule 14.4, or (ii) under Article 1.2.4, 1.3.4 or 1.4.4 of
Schedule 14.4 (which are hereafter referred to as "General Claims")
(claims arising under Article 2.1 of Schedule 14.4 are referred to as
"Transfer Tax Claims"; claims arising under Article 1.2.4, 1.3.4 or
1.4.4 of Schedule 14.4 are referred to as "16th Condition Claims");
(b) with respect to Transfer Tax Claims, to a maximum amount equal to NLG
235,000,000 less all General Claims and all "16th Condition Claims" to the
extent such latter claims exceed NLG 75,000,000 (seventy five million
Netherlands Guilders), provided that such amount shall never be less than
NLG 30,000,000 (thirty million Netherlands Guilders);
(c) with respect to "16th Condition Claims", to a maximum amount equal to NLG
235,000,000 less all General Claims and all Transfer Tax Claims to the
extent such latter claims exceed NLG 30,000,000 (thirty million Netherlands
Guilders), provided that such amount shall never be less than NLG
75,000,000 (seventy five million Netherlands Guilders).
1.26 The provisions contained in the Articles 8.2, 8.3, 8.4 and 8.5 do not apply
to any claims resulting from a breach of the Warranties contained in
Section 2 and Section 3 of Schedule 7.1 and do not apply to any claims
under Article 7.3.
REPRESENTATIONS AND WARRANTIES AS TO ALL PARTIES
Each party represents and warrants to the other parties that at the date hereof
and at the Completion Date:
(A) it is duly organised and validly existing under the laws of the
jurisdiction in which it was incorporated;
it has the requisite power and authority (corporate and other) to own its
property and to carry on its business currently conducted and it is in law fully
empowered to execute and deliver this Agreement and any other agreements
contemplated herein to which it is a party and to consummate the transactions
contemplated herein;
the execution of this Agreement and the agreements contemplated herein have been
duly authorised by all requisite corporate action;
this Agreement and all other agreements or obligations undertaken in connection
with the transactions contemplated herein constitute or will constitute,
following the execution thereof, the valid and legally binding obligations of
such party, enforceable against it in accordance with the respective terms,
subject as to enforcement of the rights of creditors;
the execution and performance by each party to this Agreement, and the
agreements contemplated herein shall not to the best knowledge of the parties
violate the provisions of any applicable law and shall not violate their
respective articles of association, deed of incorporation or by-laws or other
similar documents (each as amended from time to time), or any resolution of its
supervisory board, management board or other corporate governing body or of its
shareholders, violate any judgement, decree, order or award of any court,
governmental entity or arbitrator;
no party to this agreement or any agreement contemplated herein is precluded by
the terms of any contract, agreement or other instrument by which it is bound
from entering into this Agreement, or such other agreement or from the
consummation by such party of the transactions contemplated herein;
no consent, approval, order or authorisation of, or registration, declaration or
filing with, any person is required in connection with the execution and
consummation of this Agreement, or the agreements contemplated herein, except
for the consents or approvals specified in Article 3.
INTERCOMPANY INDEBTEDNESS
Unless otherwise provided for in this Agreement, at Completion, the Seller shall
procure the repayment of all amounts due to the Companies and the Majority
Owned Affiliates by any companies in the Seller's Group, and the Buyer
shall procure that the Companies and the Majority Owned Affiliates shall
repay all amounts due to any companies in the Seller's Group (including
amounts due in relation to the current account between any company in the
Seller's Group and the Companies and the Majority Owned Affiliates), in
each case as at the date of Completion
and together with interest accruing up to the date of Completion (the
"Intercompany Indebtedness"). For the avoidance of doubt, the Intercompany
Indebtedness shall exclude any amounts referred to in Article 10.2.
1.27 The Seller shall procure the repayment of all amounts due to the Companies
and the Majority Owned Affiliates by any of the companies in the Seller's
Group, and the Buyer shall procure that the Companies and the Majority
Owned Affiliates shall repay all amounts due to any companies in the
Seller's Group by the Companies, that are incurred in or relate to the
period prior to Completion on account of the Tax Burden Distribution
Agreements or on account of any of the Companies and the Majority Owned
Affiliates having formed part of the VAT Fiscal Unity or on account of any
other several tax liability that is paid by one of the Companies and the
Majority Owned Affiliates but (on an arm's length basis) attributable to
any of the companies in the Seller's Group (or vice versa). Such repayment
shall be made if and to the extent the amount is included in a tax
assessment, tax return or otherwise and will be increased by the (on an
arms' length basis) attributable amount of interest as included in the tax
assessment or tax returns, as well as a market rate of interest for the
subsequent period (if any) during which the repayment is not made.
RELEASES
1.28 The Seller shall arrange for the Companies and the Majority Owned
Affiliates to be released on or before Completion from all joint and
several liability, guarantees, sureties, pledges, mortgages and any other
form of security whatsoever granted or entered into by the Companies or the
Majority Owned Affiliates for any debts or other obligations of the Seller
or any company in the Seller's Group (the "Companies' Guarantees")
including the ones listed in Schedule 11.1, with the exception of Several
Tax Liability, and shall indemnify the Buyer and any company in the Buyer's
Group against any liabilities incurred by the Buyer or the Companies for
such debts or other obligations of the Seller.
1.29 Parties shall arrange for the Seller and any company in the Seller's Group
to be released on or before Completion from all joint and several
liability, guarantees, sureties, pledges, mortgages and any other form of
security whatsoever granted or entered into by the Seller or any company in
the Seller's Group for any debts or other obligations of the Companies or
the Majority Owned Affiliates (the "Seller's Guarantees") including the
ones listed in Schedule 11.2, with the exception of Several Tax Liability,
and shall indemnify the Seller and any company in the Seller's Group
against any liabilities incurred by the Seller or any company in the
Seller's Group for such debts or other obligations of the Companies or the
Majority Owned Affiliates.
1.30 The Seller's Parent shall withdraw the guarantee granted by the Seller's
Parent to all creditors of the Companies in general under Section 2:403,
paragraph 1, sub f of the Netherlands Civil Code as soon as possible after
the execution of this Agreement. The Buyer shall indemnify the Seller's
Parent for any payments to be made by the Seller's Parent to creditors of
the
Companies and for all costs and expenses including all reasonable legal
fees incurred by the Seller's Parent in connection with creditors opposing
the termination of the Seller's Parent liability in accordance with the
said section provided that the Seller's Parent shall not make any payments
to such creditors without prior consultation with the Companies.
EMPLOYMENT
The Buyer agrees that there will be no dismissal of employees or change adverse
to the employees in the terms and conditions of employment of employees of the
Companies as a consequence of the acquisition of the Shares by the Buyer and as
a consequence of merging the business of the Companies or supporting the
business objectives set out in the Business Plan referred to in recital (I).
INTERIM ARRANGEMENTS
During the period from the date of this Agreement up to Completion, the
Seller shall not without the prior written consent of the Buyer (which
shall not be unreasonably withheld or delayed) do or omit anything which
would cause the Companies:
(A) to operate its business other than in the ordinary course of business,
consistent with past practice and in accordance with the Companies'
Budget 2000 attached as Schedule 13 (a);
to make any expenditure which is not within the ordinary course
of the business of the Companies;
to make any dividend payments, or other similar distributions of
whatever nature, including distributions from reserves; or
to enter into any agreements (i) with a (fixed) term exceeding 12
months, (ii) which cannot be terminated at less than 12
months notice, or (iii) with the Seller, the Seller's Parent
or any other company in the Seller's Group.
POST COMPLETION OBLIGATIONS
1.31 The parties shall at any time after Completion do any additional acts and
execute any additional documents as shall be necessary to fully effect the
transactions contemplated by this Agreement.
1.32 The Buyer shall be solely responsible for arranging its own insurance
policies relating to the Companies as from the Completion Date. The Seller
shall keep in force all current insurance policies relating to the
Companies (the "Policies") until the Completion Date. The Buyer shall pay
to the Seller the proportion of the insurance premiums attributable from
the period from Completion until the cancellation of cover under the
Policies.
1.33 The Buyer shall give the Seller at its request, subject to the payment by
the Seller of any out-of-pocket expenses involved, access to the records of
the Companies in order for the Seller to comply with its statutory and
tax-related obligations generally and in particular to complete its annual
accounts for the Fiscal Year ending 31 December 1998 and for the Fiscal
Year ending 31 December 1999.
1.34 The Seller and the Buyer agree with respect to certain tax matters in
accordance with Schedule 14.4 and the Buyer and UPC-NL will procure the
timely and full performance of any obligation of any of the Companies
and/or the Majority Owned Affiliates arising from or in connection with
such Schedule 14.4.
1.35 The Seller hereby covenants and undertakes that during a period of three
years after the Completion Date, it shall not itself nor any company in the
Seller's Group, without the Buyer's written consent, establish or directly
engage in any business equal to and competing with the core business
carried on by the Companies as at the Completion Date. The Buyer
acknowledges that the Seller and the Seller's Group shall be allowed to
indirectly be engaged in such business resulting from a merger, joint
venture or other form of co-operation between any company in the Seller's
Group and a third party in the field of the current businesses of the
Seller's Group other than the business of the Companies as carried on at
the Completion Date.
1.36 In the event that, pursuant to Section 4.5 of Schedule 7.1, title or rights
in rem (zakelijke rechten) to any of the Assets or the Network would be
vested in any third party, Seller shall at the first request of the Buyer
exercise its best endeavours and provide all reasonable assistance to
transfer such ownership rights or rights in rem to Buyer, or, in the event
such transfer cannot be achieved, to use its best endeavours and provide
all reasonable assistance to have comparable rights in rem granted to Buyer
with a view to Buyer's continued undisturbed use of the Assets and Network.
All costs related hereto will be for the account of the Buyer.
1.37 The Seller hereby covenants and undertakes that it will co-operate in all
reasonable ways to allow the Companies to enjoy the benefits of third party
agreements of the Seller's Group that are material for the conduct of the
business of the Companies, all at the expense of the Buyer.
1.38 The Buyer and the Buyer's Parent agree and will procure that, during a
period of two years after Completion, NV ENECO will be allowed and entitled
to make a binding nomination for the appointment of one member of the
supervisory board (raad van commissarissen) of UPC-NL. The supervisory
board member so appointed will have, inter alia, specific responsibility
for supervising (i) the activities of the Companies and the Buyer in the
current operating area of the Companies (ii) the merging of the business
and operations of the Companies with that of the Buyer, (iii) the extent to
which the Companies are being managed in accordance with the Business Plan,
(iv) the position and employment conditions of the personnel of the
Companies and the Majority Owned Affiliates, all in accordance with this
Agreement. To that effect, the articles of association of UPC NL will be
amended in the form attached hereto as Schedule
14.8 (a) and board regulations will be adopted by the supervisory board of
UPC-NL to this effect in the form attached hereto as Schedule 14.8 (b).
CONFIDENTIALITY
1.39 Each party undertakes that it will not and represents and warrants (staat
ervoor in) that its employees will not at any time hereafter use or
disclose to any person any confidential information disclosed by the other
party before or after the date of this Agreement or any confidential
information concerning the Companies and shall make every effort to prevent
the use or disclosure of such confidential information.
1.40 The obligations in Article 15.1 shall not apply to:
(A) confidential information in the possession of one party prior to
disclosure by the other parties or rightfully acquired from sources
other than the other parties;
use or disclosure of confidential information required by law or any
governmental or regulatory authority; or
confidential information which becomes publicly known except by an other
parties' breach of the above.
1.41 Each party shall impose the obligations contained in Article 15.1 on all
companies in their Group and represents and warrants (staat ervoor in) to
the other parties that all companies in such party's Group shall comply
therewith.
ANNOUNCEMENTS
1.42 No party may make any announcement concerning the transactions contemplated
by this Agreement unless it has first obtained the other parties' prior
written consent, which consent shall not be unreasonably withheld or
delayed.
1.43 Article 16.1 does not apply to an announcement required by law or any
governmental or regulatory authority, if the party required to make such
announcement has, if practicable, first consulted and taken into account
the reasonable requests of the other parties.
1.44 No party may disclose to any person the terms of this Agreement without the
other parties' prior written consent.
EXPENSES
Each party shall pay its own costs relating to the negotiation,
preparation, execution and performance of this Agreement and any documents
executed pursuant thereto.
ASSIGNMENT
None of the parties to this Agreement may assign or transfer any of its rights
or obligations under this Agreement without the prior written consent of the
other parties hereto.
parent guarantees
1.45 The Buyer's Parent hereby guarantees to the Seller the due fulfilment of
all of the Buyer's and UPC-NL's obligations under this Agreement and any
agreements executed pursuant to this Agreement.
1.46 The Seller's Parent hereby guarantees to the Buyer and UPC-NL the due
fulfilment of all of the Seller's obligations under this Agreement and any
agreements executed pursuant to this Agreement.
NO RESCISSION
The Buyer and UPC-NL hereby waive their right to request rescission of this
Agreement on the grounds of breach (toerekenbare tekortkoming) or error
(dwaling).
ENTIRE AGREEMENT; AMENDMENT
This Agreement constitutes the entire agreement between and understanding of the
parties hereto in respect of the subject matters contained herein and any
preceding or concurrent oral or written agreements, arrangements or
understandings between the parties in relation to such subject matters, are
hereby superseded, except for the Confidentiality Agreement between the Seller's
Parent and the Buyer's Parent dated 8 April 1999 which shall continue to apply
as provided therein and which shall terminate upon Completion. A variation to
this Agreement is valid only if it is in writing and signed by each of the
parties hereto.
NOTICES
1.47 All notices or other communications relating to this Agreement shall be in
writing in the English language and shall be delivered personally or sent
by courier or by prepaid registered mail with return receipt requested or
by telefax with a copy sent by prepaid registered mail with return receipt
requested to the following address:
If to the Buyer: Belmarken Holding BV
▇▇▇▇▇▇▇▇ ▇▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇
Attention: General Counsel
If to UPC-NL: UPC Nederland NV
▇▇▇▇▇▇▇▇ ▇▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇
Attention: General Counsel
If to the Seller: ENECO WED-Activiteiten BV
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇▇ ▇▇ ▇▇▇▇▇▇
Attention: Board of Management (directie)
With a copy to: ▇▇▇▇▇▇▇▇ Chance
Apollolaan 171
1077 AS Amsterdam
Attention: ▇▇ ▇. ▇▇▇▇▇▇
If to the Buyer's Parent: United Pan-Europe Communications N.V.
▇▇▇▇. ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇
Attention: General Counsel
If to the Seller's Parent: NV ENECO
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇▇
Attention: Board of Management (directie)
A party may change its address for the purpose of this Agreement by giving
notice of such change to the other parties in accordance with the provisions of
this Article. In the absence of evidence of earlier receipt, a notice or other
communication is deemed given (i) if sent by mail, at the end of the day shown
as the day of receipt on the return receipt sent with the same, (ii) if sent by
hand delivery, when delivered or (iii) if sent by telefax, on the date of
despatch.
GOVERNING LAW; JURISDICTION
1.48 This Agreement is governed by the laws of The Netherlands.
1.49 All disputes arising in connection with this Agreement shall be submitted
to the District Court (Arrondissementsrechtbank) in Rotterdam, The
Netherlands, subject to appeal and appeal in the second instance to the
Supreme Court of The Netherlands.
IN WITNESS WHEREOF this Agreement is signed on the date first written above.
ENECO WED-ACTIVITEITEN B.V. BELMARKEN HOLDING B.V.
/s/ B. v. Oosteroom /s/ ▇.▇. ▇▇▇▇▇▇▇▇▇
----------------------------- -------------------------
Name: B. v. Oosteroom Name: ▇. ▇. ▇▇▇▇▇▇▇▇▇
Title: Attorney-in-Fact Title: Attorney-in-Fact
UPC NEDERLAND N.V.
/s/ O.T. ▇▇▇▇▇▇▇
--------------------------
Name: O.T. ▇▇▇▇▇▇▇
Title: General Counsel
N.V. ENECO UNITED PAN-EUROPE COMMUNICATIONS
N.V.
/s/ ▇. ▇▇▇▇ /s/ A.M. Tuijten
------------------ -----------------------
Name: ▇. ▇▇▇▇ Name: A. M. Tuijten
Title: Chairman, Board of Managing Directors Title: Attorney-in-Fact
ENECO K&T Netwerkdiensten B.V., ENECO KabelTV & Telecom B.V., ReCaiTel BV and
Encalls BV hereby confirm their adherence to the provisions of this Agreement
that impose specific obligations or grant specific rights to these respective
parties.
ENECO K&T NETWERKDIENSTEN B.V. RECAITEL BV
___________________________ _____________________________
Name: Name:
Title: Title:
ENECO KABELTV & TELECOM B.V. ENCALLS BV
___________________________ _____________________________
Name: Name:
Title: Title:
SCHEDULE 1.1
DEFINITIONS
"Affiliates" means with respect to K&T: Educatief Net B.V.,
Spirit Interactive Diensten B.V. and Mediakabel
B.V., and with respect to Netwerkdiensten: Encalls
BV and (as of the Completion Date) ReCaiTel BV;
"Affiliate Shares" means the shares which are held by the Companies
in their respective Affiliates;
"Agreement" means this Share Purchase Agreement including its
recitals and all Schedules and Annexes hereto;
"Agreement on K&T Networks
at ENECO Premises" means the agreement on keeping and maintaining
the K&T Networks at ENECO Premises, attached to
the Shared Facilities Agreement as Schedule 3;
Article 7.3 Provisions has the meaning ascribed to it in Article 4.1 of
this Share Purchase Agreement;
"1998 Annual Accounts" means the respective internal unaudited annual
accounts of the Companies for the Fiscal Year
1998, consisting of the balance sheets of the
Companies as at 31 December 1998, the profit and
loss accounts of the Companies for the period
ended 31 December 1998 and the notes thereto;
"Assets" has the meaning ascribed to it in paragraph 4.1 of
Schedule 7.1 to the Share Purchase Agreement;
"Balance Sheet Date" means 30 June 1999;
"Business Day" means any day of the week (other than a Saturday
or Sunday) on which banks are generally open for
business in Amsterdam;
"Buyer" Belmarken Holding B.V.;
"Buyer's Parent" United Pan-Europe Communications N.V.;
"Buyer's Group" means the Buyer's Parent and its present and
future subsidiaries (dochtermaatschappijen) other
than the Companies and their current subsidiaries
but not including limited partnerships
(commanditaire vennootschappen) and general
partnerships (vennootschappen onder firma);
"CATV Subscribers" means (i) the total number of individual cable
television subscribers of the Companies, as billed
by NV ENECO and (ii) the total number of cable
television subscribers of the Companies, sharing a
connection, as billed by K&T.
"Companies" has the meaning ascribed to it in Recital (A) of
this Share Purchase Agreement;
"Company's Guarantees" has the meaning ascribed to it in Article 11.1 of
this Share Purchase Agreement;
"Completion" means the carrying out of each of the actions
listed in Article 5.2 of this Share Purchase
Agreement;
"Completion Date" has the meaning ascribed to it in Article 5.1 of
this Share Purchase Agreement;
"Completion Statement" has the meaning ascribed to it in Article 4.2 of
this Share Purchase Agreement;
"Co-operation Manual" has the meaning ascribed to it in Article 2.2 of
the Joint Marketing Agreement;
"Defaulting Party" has the meaning ascribed to it in Article 10.1 of
the Joint Marketing Agreement;
"Disclosed Information" has the meaning ascribed to it in Article 6.2 of
this Share Purchase Agreement;
"Disclosure Letter" means the letter from the Seller to the Buyer of
even date herewith disclosing to the Buyer matters
which are inconsistent with the Warranties or
matters referred to in Schedule 14.4, as
countersigned by the Buyer for approval, attached
hereto as Annex 1.1;
"Due Diligence Investigation" has the meaning ascribed to it in Article 6.1 of
the Share Purchase Agreement;
"ENECO Premises" means land, facilities and premises owned,
operated or maintained by NV ENECO;
"ENECO Products" has the meaning ascribed to it in Recital (C) of
the Joint Marketing Agreement;
"Fiscal Year" means the Companies' respective fiscal year as set
forth in their respective Articles of Association;
"Group" means a party and its present and future
subsidiaries (dochtermaatschappijen) other than
the Companies and their current subsidiaries but
not including limited partnerships (commanditaire
vennootschappen) and general partnerships
(vennootschappen onder firma);
"Initial Term" has the meaning ascribed to it in Article 11 of
the Joint Marketing Agreement;
"Intercompany Indebtedness" has the meaning ascribed to it in Article 10.1 of
the Share Purchase Agreement;
"Internet Subscribers" means the total number of subscriptions of the
Companies for Internet services in the residential
and business market using the infrastructure of
the Companies, based on the total number of
subscription agreements signed by subscribers with
respect thereto.
"Joint Marketing Activities" has the meaning ascribed to it in Article 2.1 of
the Joint Marketing Agreement;
"Joint Marketing Agreement" the Joint Marketing Agreement substantially in the
form of Schedule 5.2 (h) to the Share Purchase
Agreement;
"30 June 1999 Pro Forma
Accounts" means the respective pro forma accounts of the
Companies for the first six months of the Fiscal
Year 1999, consisting of the pro forma combined
balance sheet of the Companies as at 30 June 1999,
the pro forma combined profit and loss account of
the Companies for the period ended on 30 June
1999 and the notes thereto;
"K&T" has the meaning ascribed to it in Recital (A) of
the Share Purchase Agreement;
"K&T Lease Agreements" has the meaning ascribed to it in Article 10.2 of
Schedule 7.1 to the Share Purchase Agreement;
"K&T Networks" means the telecom networks, and all ancillary
parts owned by Netwerkdiensten;
"K&T Shares" has the meaning ascribed to it in Recital (A) of
the Share Purchase Agreement;
"Key Person" means the parties' personnel identified as such in
the Co- operation Manual, including the Project
Managers, and their replacements appointed under
Article 4.2 of the Joint Marketing Agreement;
"Lease Agreements To Be
Transferred" has the meaning ascribed to it in Article 10.3 of
Schedule 7.1 to the Share Purchase Agreement;
"Majority Owned Affiliates" means with respect to Netwerkdiensten: Encalls BV
and (as of the Completion Date) ReCaiTel BV;
"Marketing" has the meaning ascribed to it in Recital (D) of
the Joint Marketing Agreement;
"Media" means activities of the Partner (as defined in the
Joint Marketing Agreement) and its Group relating
to the distribution of television and radio
programmes, the provision of internet services and
all other telecommunication services of the Joint
Marketing Agreement;
"Netwerkdiensten" has the meaning ascribed to it in Recital (A) of
this Share Purchase Agreement;
"Netwerkdiensten Shares" has the meaning ascribed to it in Recital (A) of
this Share Purchase Agreement;
"Network" has the meaning ascribed to it in Recital (B) of
this Share Purchase Agreement;
"Non-Defaulting Party" has the meaning ascribed to it in Article 11.2 of
the Joint Marketing Agreement;
"Policies" has the meaning ascribed to it in Article 14.2 of
this Share Purchase Agreement; and "Policy" means
any one of them;
"Project Manager" means the nominee of the Seller's Parent or the
Partner appointed in accordance with Article 6 of
the Joint Marketing Agreement;
"Project Team" means the persons used by the Seller's Parent and
the Partner to perform their obligations under the
Joint Marketing Agreement, including the Key
Persons and the other persons specified in the
Co-operation Manual of the Joint Marketing
Agreement;
"Property Interests
To Be Transferred" has the meaning ascribed to it in Article 10.1 of
Schedule 7.1 to this Share Purchase Agreement;
"Purchase Price" has the meaning ascribed to it in Article 4.1 of
this Share Purchase Agreement;
"Seller's Group" means the Seller's Parent and its present and
future subsidiaries (dochtermaatschappijen) other
than the Companies and their subsidiaries, but not
including limited partnerships (commanditaire
vennootschappen) and general partnerships
(vennootschappen onder firma);
"Seller's Guarantees" has the meaning ascribed to it in Article 11.2 of
this Share Purchase Agreement;
"Seller's Parent" means NV ENECO;
"Several Tax Liability" means the several liability that rests on each
member of the fiscal unity for corporate income
tax purposes pursuant to Article 39
Invorderingswet 1990, as well as the several
liability that rests on each member of the fiscal
unity for value added tax purposes pursuant to
Article 43 Invorderingswet 1990;
"Share Transfer Deed" means a share transfer deed with respect to the
Shares, substantially in the form of Schedule 5.2
(c) to this Share Purchase Agreement;
"Shares" has the meaning ascribed to it in Recital (A) of
this Share Purchase Agreement;
"Shared Facilities Agreement" the Shared Facilities Agreement substantially in
the form of Schedule 5.2 (h) to this Share
Purchase Agreement;
"Signaalkabelnet" a signal network necessary for NV ENECO's energy
supply processes;
"Tax" or "Taxes" means all forms of taxation whether direct or
indirect and whether levied by reference to
income, profits, asset values, turnover, added
value or other reference and statutory,
governmental, provincial, local governmental or
municipal impositions, duties, contributions,
rates and levies (including without limitation
social security contributions and any other
payroll taxes), real estate and ground lease
(erfpacht) taxes whether imposed by way of
withholding or deduction for or on account of tax
or otherwise) and all penalties, charges, costs
and interest relating thereto;
"Tax Burden
Distribution Agreements" has the meaning ascribed to it in Article 1.2.7.
of Schedule 14.4 (in respect of Netwerkdiensten)
and Article 1.3.7 of Schedule 14.4 (in respect of
K&T) and Article 1.4.7. of Schedule 14.4 (in
respect of Encalls BV);
"Termination Notice" has the meaning ascribed to it in Article 11.2 of
the Joint Marketing Agreement;
"UPC-NL" means UPC Nederland NV;
"VAT Fiscal Unity" means the group of entities, to which
Netwerkdiensten and/or K&T and/or any of the
Majority Owned Affiliates have belonged at any
moment, and which is treated as a single
entrepreneur for value added tax purposes,
pursuant to the decisions of the tax inspector,
dated 1 November 1998 (in respect of
Netwerkdiensten and ReCaitel BV), 1 April 1999 (in
respect of K&T) and 1 June 1999 (in respect of
Encalls BV);
"VAT Fiscal Unity Tax Return" means any value added tax return in respect of any
period during which Netwerkdiensten and/or K&T
and/or any of the Majority Owned Affiliates are
included in the VAT Fiscal Unity;
"VAT Fiscal Unity Tax
Assessment" means any value added tax levied by way of
assessment from or in relation to the Value Added
Tax Fiscal Unity, in respect of any period during
which Netwerkdiensten and/or K&T and/or any of the
Majority Owned Affiliates are included in the VAT
Fiscal Unity;
"Vervangingsovereenkomst" has the meaning ascribed to it in Article 4.1 of
this Share Purchase Agreement;
"Warranties" means the statements contained in Schedule 7.1;
and "Warranty" means any one of them.
SCHEDULE (I)
BUSINESS PLAN
SCHEDULE 4.1 (a)
THIRD PARTY LOANS
1. Equity & Law Levensverzekeringen; details as at 31 December 1999
Interest: 9%
Number: 250/251
Repayment date: 2-1-2002
Term: 10 years
Principal AmountNLG 750,000 and NLG 750,000
Repaid NLG 0
Outstanding NLG 750,000 and NLG 750,000
SCHEDULE 4.1 (b)
BNG LOANS
SCHEDULE 5.2 (d)
SHARE TRANSFER DEED
SCHEDULE 5.2 (g)
JOINT MARKETING AGREEMENT
SCHEDULE 5.2 (h)
SHARED FACILITIES AGREEMENT
SCHEDULE 6.2
DATA ROOM INDEX
SCHEDULE 7.1
WARRANTIES
Where in this Schedule 7.1 reference is made to the "Companies", the "Companies"
shall be deemed to include the "Majority Owned Affiliates".
1. COMPANIES
1.1 The Companies have been duly incorporated and are validly existing under
the laws of the Netherlands. The Companies have not been dissolved or
declared insolvent. No proceeding is pending for the dissolution of the
Companies, no action or request is pending to declare the Companies
insolvent and the Companies have neither petitioned for nor have been
granted a moratorium or a suspension of payments.
1.2 The Companies are not a party to a statutory merger or demerger within the
meaning of Book 2 of the Netherlands Civil Code, except as set forth in the
Signaalkabelnet Agreement.
1.3 The correct and complete text of the Articles of Association of the
Companies as they will read at Completion are attached hereto as Annex 1.3.
1.4 Netwerkdiensten is registered with the Commercial Register of the Chamber
of Commerce at Rotterdam under number 24243501 in conformity with the
extract attached hereto as Annex 1.4 and the information contained in the
extract is correct and complete.
1.5 K&T is registered with the Commercial Register of the Chamber of Commerce
at Rotterdam under number 24275603 in conformity with the extract attached
hereto as Annex 1.5 and the information contained in the extract is correct
and complete.
2. SHARES
2.1 The Seller is the sole legal and beneficial owner of the Shares and has
full power, right and authority to transfer the Shares to the Buyer. The
Netwerkdiensten Shares and the K&T Shares constitute the entire issued and
outstanding share capital of Netwerkdiensten and K&T, respectively.
2.2 The Shares are duly authorized, validly issued and fully paid up. The
Shares are free and clear of any liens, charges, claims, restrictions or
encumbrances of any kind, including usufruct (vruchtgebruik) and pledge
(pandrecht).
2.3 There are no outstanding depository receipts (certificaten van aandelen)
with respect to the Shares. There are no outstanding rights to subscribe
for any shares in the Companies. In particular there are no share options,
warrants or convertible debentures relating to the Companies.
2.4 No resolution has been made and no action has been taken by the Companies
to declare or distribute dividends, to repay capital or to make any other
distribution of reserves or capital, except as shown in the 1998 Annual
Accounts. The Companies have not issued any profit sharing bonds or
otherwise attributed rights to third parties to share in the past, present
or future income or profit, reserves or liquidation surpluses of the
Companies.
3. AFFILIATE SHARES
3.1 The Companies are directly or indirectly the sole legal and beneficial
owner of the Affiliate Shares. The Companies have no direct or indirect
shareholdings or participations other than the Affiliate Shares.
3.2 The Affiliate Shares are duly authorized, validly issued and fully paid up.
The Affiliate Shares are free and clear of any liens, charges, claims,
restrictions or encumbrances of any kind, including usufruct and pledges.
3.3 There are no outstanding depository receipts (certificaten van aandelen)
with respect to the Affiliate Shares. There are no outstanding rights to
subscribe for any shares of the Affiliates. In particular there are no
share options, warrants or convertible debentures relating to the
Affiliates.
3.4 No resolution has been made and no action has been taken by the Majority
Owned Affiliates to declare or distribute dividends, to repay capital or to
make any other distribution of reserves or capital, except as shown in the
1998 Annual Accounts. The Majority Owned Affiliates have not issued any
profit sharing bonds or otherwise attributed rights to third parties to
share in the past, present or future income or profits, reserves or
liquidation surpluses of the Majority Owned Affiliates.
4. ASSETS
4.1 Subject to paragraph 4.5, the Companies have legal and beneficial title to
all assets shown in the 1998 Annual Accounts and all assets acquired since
the Balance Sheet Date (collectively: the "Assets"), except for (i) such
part of the Assets as has been used or sold by the Companies in the
ordinary course of business since the Balance Sheet Date, and (ii) the
transfer of (a) the Signaalkabelnet pursuant to the Signaalkabelnet
agreement referred to under recital (C) of this Agreement, and (b) the PABX
systems referred to under recital (D) of this Agreement, which have been
sold to NV ENECO.
4.2 The Assets are free and clear of any mortgage, pledge or other security
interest, and are not subject to priority or pre-emptive rights or any
purchase or option agreement, other than as shown in the 1998 Annual
Accounts.
4.3 The Assets are all assets that are required and that are currently in use
by the Companies to operate the Network and to provide the
telecommunications services as mentioned in Recital (B).
4.4 As at 30 November 1999, the Companies had 588,599 CATV Subscribers and as
at 31 December 1999, the Companies had 7,252 Internet Subscribers.
4.5 Uncertainty exists in The Netherlands with respect to (i) the ability of a
cable network operator to own network elements placed in or on real
property owned by third parties, (ii) the question whether such network
elements are movable or immovable, as well as (iii) the formalities to be
observed to properly transfer title to such assets from one person to
another. These uncertainties also apply to the relevant assets of the
Companies, but no other person has ever claimed to be the owner of or
otherwise to be entitled to such assets as a consequence of these
uncertainties.
4.6 In respect of the Year 2000, the Companies have sent certain of their
customers a letter substantially in the form attached hereto as Annex 4.6.
5. TAXES
5.1 Unless otherwise provided for in this Agreement, all Taxes for which any of
the Companies is liable (including amounts pursuant to the Tax Burden
Distribution Agreements) have been paid or accrued for in accordance with
the applicable statutory provisions, all returns for such Taxes have been
filed in accordance with the applicable statutory provisions and the
Companies, the Seller and NV ENECO have duly performed in all material
respects all other obligations imposed on them by any statutory provision
in connection with Taxes. With respect to the Seller and NV ENECO, the
preceding sentence only applies to those obligations of the Seller and NV
ENECO which have arisen by reason only of the existence of the Fiscal Unity
(as defined in Schedule 14.4) (in the relationship between the Seller on
the one hand and the Companies on the other hand) or the VAT Fiscal Unity
(in the relationship between NV ENECO on the one hand and the Companies on
the other hand).
5.2 Netwerkdiensten has continuously been a member of the fiscal unity of the
Seller for corporate income tax purposes since 1 January 1998.
5.3 K&T has continuously been a member of the fiscal unity of the Seller for
corporate income tax purposes since 31 March 1998.
5.4 Netwerkdiensten has continuously been a member of the fiscal unity of NV
ENECO for value added tax purposes since 1 November 1998.
5.5 K&T has continuously been a member of the fiscal unity of NV ENECO for
value added tax purposes since 1 April 1999.
5.6 A request has been made for Encalls BV to become a member of the fiscal
unity of the Seller for corporate income tax purposes as per 1 January
1999. Encalls BV has continuously been a member of the fiscal unity of NV
ENECO for value added tax purposes since 1 June 1999. ReCaiTel B.V. has
continuously been a member of the fiscal unity of NV ENECO for value added
tax purposes since 1 November 1998.
5.7 There are no rulings with any body which levies or collects Taxes to which
one (or more) of the Companies or one (or more) of the Affiliates is a
party or which are otherwise applicable to it, except as provided for in
the Disclosure Letter.
5.8 None of the Companies has any material dispute with any tax authority,
except as provided for in the Disclosure Letter.
5.9 Any and all value added tax registrations have been made by the Companies
and Affiliates.
6. CONDUCT OF BUSINESS SINCE THE BALANCE SHEET DATE
Except as disclosed in the Disclosure Letter, except as specifically set
out in this Agreement, except as set forth in Annex 6 and except with
respect to the issue discussed in Article 7.3 of this Agreement, in the
period between the Balance Sheet Date and the date hereof, the Companies
have not disposed of any Assets material to the 30 June 1999 Pro Forma
Accounts other than in the ordinary course of business and the Companies
have not become subject to any material commitment other than in the
ordinary course of business.
7. MANAGEMENT, EMPLOYEES, PENSIONS
7.1 All the employees employed by the Companies as at the date of this
Agreement are listed in Annex 7.1.
7.2 Except for (i) the persons listed in the extract of the Rotterdam Chamber
of Commerce, (ii) as provided for in this Agreement, and (iii) as listed in
Annex 7.2, there are no persons holding power of attorney or who are
authorised to dispose of any funds of the Companies or to commit the
Companies in any other way.
7.3 The Companies have at all times fulfilled their obligations regarding the
Employees listed in Annex 7.1 concerning payment of wages, social security
contributions and payment or accrual of pension premiums (including
backservice obligations, if any).
8. AGREEMENTS, RELATIONS
Except as set forth in Annex 8, the execution of this Agreement and the
consummation of the transactions contemplated thereby, do not and shall not
in and of themselves cause any existing material legal relationship with
the Companies to be varied or terminated.
9. LITIGATION
Save as provided for in the 1998 Annual Accounts and save for the issue
referred to in Article 7.3 of this Agreement, the Companies have not
received any notification of, are not a party to or, to the best knowledge
of the Seller under threat of, any litigation involving an amount in excess
of one million Netherlands Guilders (NLG 1,000,000) that is material to the
Companies taken as a whole. To the best knowledge of the Seller, and save
as provided for in the 1998 Annual Accounts, the Companies are not the
subject of investigation by any governmental, administrative or regulatory
body of the Netherlands or of the European Commission, as the case may be,
other than the current litigation between the tax authorities and
Netwerkdiensten regarding real property transfer tax (which is a test case
procedure and may result in subsequent similar claims of the tax
authorities) and possible routine regulatory inquiries.
10. BUSINESS PREMISES AND REAL PROPERTY
10.1 Annex 10.1 lists the property interests that are owned by NV ENECO and are
to be transferred by NV ENECO to the Companies (the "Property Interests To
Be Transferred"). The Property Interests To Be Transferred are free from
mortgages, attachments (beslagen), personal (kwalitatieve) obligations,
easements (erfdienstbaarheden) and other rights in rem (zakelijk rechten),
perpetual clauses (kettingbedingen) and other encumbrances, except as set
out in the relevant title deeds or public registers.
10.2 Annex 10.2 lists all the real property leased or rented by the Companies
from NV ENECO, and such property leased or rented by the Companies to third
parties, with annual lease rentals in excess of NLG 25,000 (twenty five
thousand) Netherlands Guilders) (the "K&T Lease Agreements").
10.3 Annex 10.3 lists all the lease agreements pursuant to which NV ENECO leases
as lessee property from certain landlords, that are transferred pursuant to
Section 6:159 of the Dutch Civil Code by NV ENECO to Netwerkdiensten,
subject to consent for such transfer being obtained from the respective
landlords (the "Lease Agreements To Be Transferred").
11. ENVIRONMENTAL MATTERS
11.1 The Companies have not received any notice, report or other communication
claiming, stating or alleging material violation of or material non-
compliance with any environmental law.
11.2 To the best knowledge of the Seller, the Companies are not party to or
otherwise required to comply with any environmental agreement
(milieuconvenant, milieubeleidsovereenkomst).
12. PERMITS
The Companies have obtained all material licenses, permits, consents,
approvals and filed all notifications, forms and documents necessary for
the current operations and business and the unhindered continuation
thereof, pursuant to the 1998 Telecommunications Act and the 1987 Media Act
(as subsequently amended).
13. ACCOUNTS
The 30 June 1999 Pro Forma Accounts have been prepared on a basis consistent
with the principles as applied by the Companies in the preparation of the 1998
Annual Accounts attached hereto as Annex 13, using the same accounting
principles and practices. The 30 June 1999 Pro Forma Accounts present a true and
fair view (getrouw beeld) of the financial position of the Companies as at 30
June 1999 and the results of operations for the period ending 30 June 1999. It
is understood that where in this Agreement separate arrangements are made which
are not (wholly or partially) reflected in such accounts, no claims can be made
under this clause.
14 GENERAL
Notwithstanding Article 7.2 of this Agreement and except for information
originating from sources outside the Seller's organisation or outside the
Seller's control, the information provided to the Buyer, UPC-NL and the Buyer's
Parent listed in Schedule 6.2 is true, correct and not misleading in all
material respects.
SCHEDULE 11.1
COMPANIES' GUARANTEES
SCHEDULE 11.2
SELLER'S GUARANTEES
SCHEDULE 13 (a)
COMPANIES BUDGET 2000
SCHEDULE 14.4
TAX
1. Corporate Income Tax
1.1 In this Schedule:
"Acquisition of CAI Network" means the acquisition of cable networks as
such and/or the acquisition of legal entities
owning such cable networks.
"1999 Encalls BV Tax Return" means all those elements of the 1999 Fiscal
Unity Tax Return that relate to the corporate
tax position of Encalls BV for the year ended
31 December 1999;
"1999 Encalls BV Tax
Assessment" means the final tax assessment for the 1999
Fiscal Unity Tax Return, as determined by the
tax inspector or (as the case may be) the tax
court, which assessment cannot be disputed
anymore, as well as (i) any preliminary
assessments related with the 1999 Fiscal
Unity Tax Return (ii) any costs and interests
charged by the tax authorities in connection
therewith (iii) any additional assessments,
to the extent that the amount levied or
refunded by virtue of such assessment is
attributable to the 1999 Encalls BV Tax
Return;
"1998 Fiscal Unity Tax
Return" means the corporate income tax return for the
Fiscal Unity for the year ended 31 December,
1998;
"1999 Fiscal Unity Tax
Return" means the corporate income tax return for the
Fiscal Unity for the year ended 31 December,
1999;
"1998 Netwerkdiensten
Tax Return" means all those elements of the 1998 Fiscal
Unity Tax Return that relate to the corporate
tax position of Netwerkdiensten for the year
ended 31 December, 1998;
"1999 Netwerkdiensten Tax
Return" means all those elements of the 1999 Fiscal
Unity Tax Return that relate to the corporate
tax position of Netwerkdiensten for the year
ended 31 December, 1999;
"Fiscal Unity" means the Seller, as parent company, and its
subsidiary companies, including
Netwerkdiensten, K&T and Encalls BV K&T and
Netwerkdiensten are deemed to be absorbed by
Seller for corporate income tax purposes as
per 1 January, 1998 pursuant to the decision
("beschikking") of the Rotterdam tax
inspector ("Belastingdienst/▇▇▇▇▇
ondernemingen Rotterdam") dated 18 January,
1999 and (in respect of K&T) as per 31 March,
1998 pursuant to the decision of the
Rotterdam tax inspector (as mentioned above)
also dated 18 January, 1999. Encalls BV will
be deemed to be absorbed by Seller for
corporate income tax purposes as per 1
January 1999;
"1998 Netwerkdiensten
Tax Assessment" means the final tax assessment for the 1998
Fiscal Unity Tax Return, as determined by the
tax inspector or (as the case may be) the tax
court, which assessment cannot be disputed
anymore, as well as (i) any preliminary
assessments related
with the 1998 Fiscal Unity Tax Return (ii)
any costs and interests charged by the tax
authorities in connection therewith (iii) any
additional assessments, to the extent that
the amount levied or refunded by virtue of
such assessment is attributable to the 1998
Netwerkdiensten Tax Return;
"1999 Netwerkdiensten Tax
Assessment" means the final tax assessment for the 1999
Fiscal Unity Tax Return, as determined by the
tax inspector or (as the case may be) the tax
court, which assessment cannot be disputed
anymore, as well as (i) any preliminary
assessments related with the 1999 Fiscal
Unity Tax Return (ii) any costs and interests
charged by the tax authorities in connection
therewith (iii) any additional assessments,
to the extent that the amount levied or
refunded by virtue of such assessment is
attributable to the 1999 Netwerkdiensten Tax
Return;
"1998 K&T Tax Return" means all those elements of the 1998 Fiscal
Unity Tax Return that relate to the corporate
tax position of K&T for the year ended 31
December 1998;
"1999 K&T Tax Return" means all those elements of the 1999 Fiscal
Unity Tax Return that relate to the corporate
tax position of K&T for the year ended 31
December 1999;
"1998 K&T Tax Assessment" means the final tax assessment for the 1998
Fiscal Unit Tax Return, as determined by the
tax inspector or (as the case may be) the tax
court, which assessment cannot be disputed
anymore, as well as (i) any preliminary
assessments related with the 1998 Fiscal
Unity Tax Return (ii) any costs and interests
charged by the tax authorities in connection
therewith (iii) any additional assessments,
to the extent that the amount levied or
refunded by virtue of such assessment is
attributable to the 1998 K&T tax return.
"1999 K&T Tax Assessment" means the final tax assessment for the 1999
Fiscal Unity Tax Return, as determined by the
tax inspector or (as the case may be) the tax
court, which assessment cannot be disputed
anymore, as well as (i) any preliminary
assessments related with the 1999 Fiscal
Unity Tax Return (ii) any costs and interests
charged by the tax authorities in connection
therewith (iii) any additional assessments,
to the extent that the amount levied or
refunded by virtue of such assessment is
attributable to the 1998 K&T tax return.
1.2 Netwerkdiensten
1.2.1 The 1998 and 1999 Netwerkdiensten Tax Return will be entirely for the
risk and the account of Netwerkdiensten.
1.2.2 To the best knowledge of the Seller, tainted transactions which trigger
the sanction as meant in the 16th condition of the standard conditions of
the Fiscal Unity did not occur. The Buyer and the Buyer's Parent will
procure that Netwerkdiensten and a subsequent fiscal unity to which
Netwerkdiensten may belong, will not take a different position, unless
otherwise authorised by the Seller or NV ENECO in advance.
1.2.3 For the avoidance of doubt, in the event the sanction mentioned in the
16th condition is applied notwithstanding the above, the tax due by
reason thereof will be on-charged by the Seller to Netwerkdiensten under
the Tax Burden Distribution Agreement.
1.2.4 In the event the sanction mentioned in the 16th condition is applied, the
Seller will be liable to reimburse the amount on-charged pursuant to
Article 1.2.3 of this Schedule.
1.2.5 The liability of the Seller pursuant to Article 1.2.4 of this Schedule
will be reduced by the amount calculated in accordance with the following
formula:
A = (B - C) x D
Whereby:
A= amount of reduction
B= fair market value of the (for Netherlands corporate income tax purposes
depreciable) assets and liabilities of Netwerkdiensten, as meant in the 16th
condition
C= tax book value of such assets and liabilities if the 16th condition had not
been applied
D= seventeen and one half per cent (17.5%)
The obligations of the Seller under Article 1.2.4 and 1.2.5 of this Schedule are
subject to the limitations mentioned in Article 8 of this Agreement.
1.2.6 Netwerkdiensten will provide Seller with all data, assistance and co-
operation reasonably required by Seller to complete and file the 1998 and
1999 Fiscal Unity Tax Return in time, in so far as such tax return
relates to the 1998 and 1999 Netwerkdiensten Tax Return.
1.2.7 Netwerkdiensten accepts full responsibility for the compilation and
preparation of the 1998 and 1999 Netwerkdiensten Tax Return and Seller
agrees to accept the 1998 and 1999 Netwerkdiensten Tax Return as drafted
by Netwerkdiensten for inclusion in the 1998 and 1999 Fiscal Unity Tax
Return provided the 1998 and 1999 Netwerkdiensten Tax Return (i) does not
include unreasonable elements and (ii) is not inconsistent with the 1998
and 1999 Fiscal Unity Tax Return.
1.2.8 As soon as such is reasonably possible, Seller will provide
Netwerkdiensten with copies of all communications with the tax
authorities in relation to the 1998 and 1999 Netwerkdiensten Tax Return
and the 1998 and 1999 Netwerkdiensten Tax Assessment, including but not
limited to, requests for further extensions of the deadline for filing
the 1998 and 1999 Fiscal Unity Tax Return, decisions on such requests,
notifications of deviation from the 1998 and 1999 Netwerkdiensten Tax
Return, questionnaires from the tax authorities and responses from Seller
to such questionnaires related with the 1998 and 1999 Netwerkdiensten Tax
Return and letters of objection (`bezwaarschriften') related with the
1998 and 1999 Netwerkdiensten Tax Return. For the avoidance of doubt, it
is expressly agreed that the Seller will not have to provide any
information regarding the Fiscal Unity or any other matter if such
information does not have a material bearing on the 1998 and 1999
Netwerkdiensten Tax Return.
1.2.9 Seller and Netwerkdiensten agree that each of them will not take (nor
refrain from taking) any action vis-a-vis the tax authorities concerning
any element of the 1998 and 1999 Netwerkdiensten Tax Return and the 1998
and 1999 Netwerkdiensten Tax Assessment, unless the other party has given
its express consent to do so. In the event parties disagree on a decision
regarding such action on the 1998 and 1999 Netwerkdiensten Tax Return
and/or the 1998 and 1999 Netwerkdiensten Tax Assessment, Netwerkdiensten
is authorised to decide the matter in its sole discretion, provided,
however, that it will consult with the Seller and will comply with any
legitimate requests made by the Seller.
1.2.10 The 1998 and 1999 Netwerkdiensten Tax Assessment will be entirely for the
risk and the account of Netwerkdiensten except for Tax related to the
transactions referred to in recitals ( C) and (D) of this Agreement. Any
amounts paid by the Fiscal Unity in respect of the 1998 and 1999
Netwerkdiensten Tax Assessment will be promptly reimbursed by
Netwerkdiensten, regardless of whether any portion of such assessment is
being disputed or not, and under reduction of the liability, if any, of
the Seller pursuant to Articles 1.2.4 and 1.2.5 of this Schedule 14.4.
1.2.11 The agreement between Seller and Netwerkdiensten dated 11 June, 1999
regarding, among others, the allocation of the tax burden between Seller
and Netwerkdiensten will be fully complied with to the extent this does
not conflict with the provisions of Article 1.2.4, 1.2.5 and 1.2.10 of
this Schedule 14.4. For the avoidance of doubt, to the extent possible,
the fiscal unity conditions as laid down in the decision of the tax
inspector of 18 January 1999 will also apply among Netwerkdiensten and
Seller for all other purposes.
1.2.12 The Seller and the Seller's Parent did not and will not make any
agreement with the corporate tax inspector that has a material bearing on
the 1998 Netwerkdiensten Tax Return (in particular, the fiscal opening
balance sheet) and the 1999 Netwerkdiensten Tax Return, with the
exception of any agreements referred to in the Disclosure Letter, which
will be adhered to by Netwerkdiensten, the Buyer, the Seller and the
Seller's Parent. In this respect it is agreed that, where the Seller's
Parent's position is relevant in respect of the contribution to
Netwerkdiensten of the Rotterdam cable network in 1998, the Seller's
Parent will accept the valuation (and matters related thereto) as
proposed by Netwerkdiensten and the Buyer, provided these proposals do
not contravene the agreements referred to in the Disclosure Letter.
1.3 K&T
1.3.1 The 1998 and 1999 K&T Tax Return will be entirely for the risk and the
account of K&T.
1.3.2 To the best knowledge of the Seller, tainted transactions which trigger
the sanction as meant in the 16th condition of the standard conditions of
the Fiscal Unity did not occur. The Buyer and the Buyer's Parent will
procure that K&T and a subsequent fiscal unity to which K&T may
belong, will not take a different position, unless otherwise authorized
by the Seller or NV ENECO in advance.
1.3.3 For the avoidance of doubt, in the event the sanction mentioned in the
16th condition is applied notwithstanding the above, the tax due by
reason thereof will be on-charged by the Seller to K&T under the Tax
Burden Distribution Agreement.
1.3.4 In the event the sanction mentioned in the 16th condition is applied, the
Seller will be liable to reimburse the amount on-charged pursuant to
Article 1.3.3 of this Schedule.
1.3.5 The liability of the Seller pursuant to Article 1.3.4 of this Schedule
will be reduced by the amount calculated in accordance with the following
formula:
A=(B-C)xD
Whereby:
A= amount of reduction
B= fair market value of the (for Netherlands corporate income tax purposes
depreciable) assets and liabilities of K&T, as meant in the 16th condition
C= tax book value of such assets and liabilities if the 16th condition had not
been applied
D= seventeen and one half per cent (17.5%)
The obligations of the Seller under Articles 1.3.4 and 1.3.5 of this Schedule
are subject to the limitations mentioned in Article 8 of this Agreement.
1.3.6 K&T will provide Seller with all data, assistance and co-operation
reasonably required by Seller to complete and file the 1998 and 1999
Fiscal Unity Tax Return in time, in so far as such tax return relates to
the 1998 and 1999 K&T Tax Return.
1.3.7 K&T accepts full responsibility for the compilation and preparation of
the 1998 and 1999 K&T Tax Return and Seller agrees to accept the 1998 and
1999 K&T Tax Return as drafted by K&T for inclusion in the 1998 and 1999
Fiscal Unity Tax Return provided the 1998 and 1999 K&T Tax Return (i)
does not include unreasonably elements and (ii) is not inconsistent with
the 1998 and 1999 Fiscal Unity Tax Return.
1.3.8 As soon as such is reasonably possible, Seller will provide K&T with
copies of all communications with the tax authorities in relation to the
1998 and 1999 K&T Tax Return and the 1998 and 1999 K&T Tax Assessment,
including but not limited to requests for further extensions of the
deadline for filing the 1998 and 1999 Fiscal Unity Tax Return, decision
on such requests, notifications of deviation from the 1998 and 1999 K&T
Tax Return, questionnaires from the tax authorities and responses from
Seller to such questionnaires related with the 1998 and 1999 K&T Tax
Return and letters of objection ("bezwaarschriften") related with the
1998 and 1999 K&T Tax Return. For the avoidance of doubt, it is expressly
agreed that the Seller will not have to provide any information regarding
the Fiscal Unity or any other matter if such information does not have a
material bearing on the 1998 and 1999 K&T Tax Return.
1.3.9 Seller and K&T agree that each of them will not take (nor refrain from
taking) any action vis-a-vis the tax authorities concerning any element
of the 1998 and 1999 K&T Tax Return and the 1998 and 1999 K&T Tax
Assessment, unless the other party has given its express consent to do
so. In the event parties disagree on a decision regarding such action on
the 1998 and 1999 K&T Tax Return and/or the 1998 and 1999 K&T Tax
Assessment, K&T is authorised to decide the matter in its sole
discretion, provided, however, that it will consult with the Seller and
will comply with any legitimate requests made by the Seller.
1.3.10 The 1998 and 1999 K&T Tax Assessment will be entirely for the risk and
the account of K&T. Any amounts paid by the Fiscal Unity in respect of
the 1998 and 1999 K&T Tax Assessment will be promptly reimbursed by K&T,
regardless of whether any portion of such assessment is being disputed or
not. and under reduction of the liability, if any, of the Seller pursuant
to Articles 1.3.4 and 1.3.5 of this Schedule 14.4.
1.3.11 The agreement between Seller and K&T dated 11 June 1999 regarding, among
others, the allocation of the tax burden between Seller and K&T will be
fully complied with. For the avoidance of doubt, to the extent possible,
the fiscal unity conditions as laid down in the decision of the tax
inspector of 18 January 1999 will also apply among K&T and Seller for all
other purposes.
1.3.12 The Seller and the Seller's Parent did not and will not make any
agreement with the corporate tax inspector that has a material bearing on
the 1998 K&T Tax Return (in particular, the fiscal opening balance sheet)
and the 1999 K&T Tax Return, with the exception of any agreements
referred to in the Disclosure Letter, which will be adhered to by K&T,
the Buyer, the Seller and the Seller's Parent.
1.4 Encalls BV
1.4.1 The 1999 Encalls BV Tax Return will be entirely for the risk and the
account of Encalls BV.
1.4.2 To the best knowledge of the Seller, tainted transactions, which trigger
the sanction, as meant in the 16th condition of the standard conditions
of the Fiscal Unity did not occur. The Buyer and the Buyer's Parent will
procure that Encalls BV and a subsequent fiscal unity to which Encalls BV
may belong, will not take a different position, unless otherwise
authorised by the Seller or NV ENECO in advance.
1.4.3 For the avoidance of doubt, in the event the sanction mentioned in the
16th condition is applied notwithstanding the above, the tax due by
reason thereof will be on-charged by the Seller to Encalls BV under the
Tax Burden Distribution Agreement.
1.4.4 In the event the sanction mentioned in the 16th condition is applied, the
Seller will be liable to reimburse the amount on-charged pursuant to
Article 1.4.3 of this Schedule.
1.4.5 The liability of the Seller pursuant to Article 1.4.4 of this Schedule
will be reduced by the amount calculated in accordance with the following
formula:
A=(B-C) x D
Whereby:
A= amount of reduction
B= fair market value of the (for Netherlands corporate income tax
purposes depreciable assets and liabilities of Encalls BV, as meant in
the 16th condition
C= tax book value of such assets and liabilities if the 16th condition
had not been applied
D= seventeen and one half per cent (17.5%)
The obligations of the Seller under Article 1.4.4 and 1.4.5 of this
Agreement are subject to the limitations mentioned in Article 8 of this
Agreement.
1.4.6 Encalls BV will provide Seller with all data, assistance and co-operation
reasonably required by Seller to complete and file the 1999 Fiscal Unity
Tax Return in time, in so far as such tax return relates to the 1999
Encalls BV Tax Return.
1.4.7 Encalls BV accepts full responsibility for the compilation and
preparation of the 1999 Encalls BV Tax Return and Seller agrees to accept
the 1999 Encalls BV Tax Return as drafted by Encalls BV for inclusion in
the 1999 Fiscal Unity Tax Return provided the 1999 Encalls BV Tax Return
(i) does not include unreasonably elements and (ii) is not inconsistent
with the 1999 Fiscal Unity Tax Return.
1.4.8 As soon as such is reasonably possible, Seller will provide Encalls BV
with copies of all communications with the tax authorities in relation to
the 1999 Encalls BV Tax Return and the 1999 Encalls BV Tax Assessment,
including but not limited to requests for further extensions of the
deadline for filing the 1999 Fiscal Unity Tax Return, decisions on such
requests, notifications of deviation form the 1999 Encalls BV Tax Return,
questionnaires from the tax authorities and responses from Seller to such
questionnaires related with the 1999 Encalls BV Tax Return and letters of
objection ("bezwaarschriften") related with the 1999 Encalls BV Tax
Return. For the avoidance of doubt, it is expressly agreed that the
Seller will not have to provide any information regarding the Fiscal
Unity or any other matter if such information does not have a material
bearing on the 1999 Encalls BV Tax Return.
1.4.9 Seller and Encalls BV agree that each of them will not take (nor refrain
from taking) any action vis-a-vis the tax authorities concerning any
element of the 1999 Encalls BV Tax Return and the 1999 Encalls BV Tax
Assessment, unless the other party has given its express consent to do
so. In the event parties disagree on a decisions regarding such action on
the 1999 Encalls BV Tax Return and/or the 1999 Encalls BV Tax Assessment,
Encalls BV is authorised to decide the matter in its sole discretion,
provided, however, that it will consult with the Seller and will comply
with any legitimate requests made by the Seller.
1.4.10 The 1999 Encalls BV Tax Assessment will be entirely for the risk and the
account of Encalls BV. Any amounts paid by the Fiscal Unity in respect of
the 1999 Encalls BV Tax Assessment will be promptly reimbursed by Encalls
BV, regardless of whether any portion of such
assessment is being disputed or not and under reduction of the liability,
if any, of the Seller pursuant to Articles 1.4.4 and 1.4.5 of this
Schedule 14.4.
1.4.11 The agreement between Seller and Encalls BV dated [ ] January 2000
regarding, among others, the allocation of the tax burden between Seller
and Encalls BV will be fully complied with. For the avoidance of doubt,
to the extent possible, the fiscal unity conditions to be laid down in
the decisions of the tax inspector will also apply among Encalls BV and
Seller for all other purposes.
1.4.12 The Buyer will procure that Encalls BV will not revoke the fiscal unity
request as meant in Article 5.6 of Schedule 7.1, or jeopardise in any
other way the granting of this request.
1.4.13 The Seller and the Seller's Parent did not make and will not make any
agreement with the corporate tax inspector that has a material bearing on
the 1999 Encalls Tax Return.
2. Real Property Transfer Tax
2.1 Parties acknowledge the existence of the real property transfer tax
exposure in relation to the acquisition (verkrijging) of CAI-networks (as
more specifically described in the Disclosure Letter) and agree that
Seller will bear such transfer tax including any amount of interest,
penalty and/or related costs charged by the Netherlands tax authorities
(if any) with respect to those networks acquired prior to the Completion
Date, regardless of the party from whom the CAI-networks were acquired.
2.2 Netwerkdiensten consents to the de facto control by NV ENECO of the
litigation, also of those assessments issued in respect of acquisitions
by Netwerkdiensten prior to Completion Date. In this respect, the Buyer
and Netwerkdiensten shall grant NV ENECO the time and possibility to, on
behalf of and in the name of Netwerkdiensten, defend Netwerkdiensten
against claims made by the tax authorities, take control of the defence,
indemnification(s), settlement(s), negotiation(s) or other proceedings in
relation to such procedures or events which may give rise to any
liability of the Seller or NV ENECO, and the Seller shall have the right
to employ and engage counsel of its own choice to handle and defend such
matters at its own cost and expense.
Before NV ENECO will agree with the tax authorities on any final settlement, it
will consult with Netwerkdiensten and the Buyer who then may elect to accept all
liability towards the tax authorities with respect to such claims made and who
then will be entitled to take control of the defence, indemnification(s),
settlement(s), negotiation(s) or other proceedings including entering into other
final settlements, in exchange for NV ENECO paying to Netwerkdiensten or the
Buyer the amount it would have paid to the tax authorities under the proposed
settlement.
3. Value Added Tax
3.1 Each of Netwerkdiensten, K&T and those Affiliates which are included in
the VAT Fiscal Unity will provide NV ENECO with all data, assistance and
co- operation reasonably required
by NV ENECO to complete and file the VAT Fiscal Unity Tax Return, in so
far as such tax return relates to Netwerkdiensten, K&T and the Affiliates
respectively.
3.2 Each of Netwerkdiensten, K&T and the Affiliates agrees to co-operate with
NV ENECO so that the inspector will promptly be notified that the Fiscal
Unity has ceased to exist following the execution of this agreement, as
meant in Article 43 Invorderingswet 1990.
4. Capital tax
In the event Netwerkdiensten has acquired the remaining ReCaiTel BV shares it
does not own yet in the form of a transaction which qualifies for the exemption
from capital tax as meant in articles 37(1)(a) and 37(2)(a) of the Netherlands
Wet op belastingen van rechtsverkeer, Netwerkdiensten and the Buyer agree that:
(a) they will not take any action (and that they will refrain from
taking any action) that may jeopardise the application of such
exemption; and
(b) they will at all times comply with the requirements of this
exemption as referred to in the Netherlands Wet op belastingen van
rechtsverkeer as well as the Netherlands Uitvoeringsbesluit
belastingen van rechtsverkeer.
SCHEDULE 14.8 (a)
DRAFT ARTICLES OF ASSOCIATION UPC NEDERLAND NV
SCHEDULE 14.8 (b)
DRAFT SUPERVISORY BOARD REGULATIONS UPC NEDERLAND NV
ANNEX 1.1
DISCLOSURE LETTER
ANNEX 1.3
COMPANIES' ARTICLES OF ASSOCIATION
ANNEX 1.4
EXTRACT OF NETWERKDIENSTEN
ANNEX 1.5
EXTRACT OF K&T
ANNEX 4.6
YEAR 2000 LETTERS
ANNEX 6
COMPANIES' CONDUCT OF
BUSINESS SINCE THE BALANCE SHEET DATE
ANNEX 7.1
EMPLOYEES
ANNEX 7.2
AUTHORISED PERSONNEL
ANNEX 8
AGREEMENTS INFLUENCING MATERIAL
LEGAL RELATIONSHIPS WITH THE COMPANIES
ANNEX 10.1
PROPERTY INTERESTS TO BE TRANSFERRED
. The property interests referred to in the draft notarial deed of Loeff
▇▇▇▇▇▇ ▇▇▇▇▇▇▇, dated 21 June 1999
ANNEX 10.2
K&T LEASE AGREEMENTS
--------------------------------------------------------------------------------
Lease agreement between NV ENECO Facilitair Bedrijf i.o. and ENECO K&T
Netwerkdiensten BV regarding ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇
--------------------------------------------------------------------------------
Lease agreement between NV ENECO Facilitair Bedrijf i.o. and ENECO Kabel
TV&Telecom Diensten regarding ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇
--------------------------------------------------------------------------------
Co-location agreement between ReCaiTel BV and Libertel BV
--------------------------------------------------------------------------------
Lease agreement between ENECO Kabel TV & Telecom BV and Aircheck Nederland
--------------------------------------------------------------------------------
Co-location agreement between ENECO KabelTV & Telecom BV and Federa NV
--------------------------------------------------------------------------------
Lease agreement between ReCaiTel BV and PTT Telecom BV regarding Randweg,
Lekkerkerk
--------------------------------------------------------------------------------
Co-location agreement between ENECO Kabel TV & Telecom BV and Libertel BV
regarding ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇
--------------------------------------------------------------------------------
Lease agreement between ENECO Kabel TV & Telecom BV and Dutchtone NV
regarding ▇▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇▇▇▇
--------------------------------------------------------------------------------
ANNEX 10.3
LEASE AGREEMENTS TO BE TRANSFERRED
--------------------------------------------------------------------------------
Lease agreement between the municipality of Rotterdam and Erasmus
1. University dated 11 October 1983
--------------------------------------------------------------------------------
Lease agreement between the municipality of Rotterdam and housing
2. association "Onze Woninggemeenschap"
--------------------------------------------------------------------------------
Lease agreement between the municipality of Rotterdam and roman catholic
3. building society "Voor het huisgezin"
--------------------------------------------------------------------------------
Lease agreement between the municipality of Rotterdam and housing
4. association "Rotterdam aan Zee"
--------------------------------------------------------------------------------
ANNEX 13
30 JUNE PRO FORMA ACCOUNTS