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EXHIBIT 99.2
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ASSET EXCHANGE AGREEMENT
between
NEWS AMERICA INCORPORATED
and
PLD TELEKOM INC.
Dated April 19, 1998
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TABLE OF CONTENTS
Page
ARTICLE I
EXCHANGE OF STOCK
1.1. Exchange of Holdings Shares...................................3
ARTICLE II
THE CLOSING
2.1. Time and Place of Closing.....................................3
2.2. Deliveries by News America....................................3
2.3. Deliveries by PLD.............................................4
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PLD
3.1. Organization; Qualification...................................4
3.2. Capitalization of PLD and PeterStar...........................5
3.3. Authority Relative to this Agreement..........................5
3.4. Consents and Approvals; No Violation..........................6
3.5. Reports.......................................................6
3.6. Financial Statements..........................................7
3.7. Undisclosed Liabilities.......................................7
3.8. Absence of Certain Changes or Events..........................7
3.9. Certain Disclosure Matters....................................9
3.10. Legal Proceedings, etc.......................................9
3.11. Permits.....................................................10
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF NEWS AMERICA
4.1. Organization. ...............................................10
4.2. Authority Relative to this Agreement. .......................10
4.3. Consents and Approvals; No Violation.........................11
4.4. Fees and Commissions.........................................11
4.5. Title........................................................11
4.6. Investment Intent; Private Placement.........................12
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ARTICLE V
COVENANTS OF THE PARTIES
5.1. Conduct of Business of PLD and PeterStar.....................12
5.2. Access to Information........................................13
5.3. Expenses.....................................................14
5.4. Further Assurances...........................................14
5.5. Public Statements............................................15
5.6. Consents and Approvals.......................................15
5.7. Supplements to Schedules.....................................16
5.8. Completion of Ancillary Agreements...........................16
ARTICLE VI
CLOSING CONDITIONS
6.1. Conditions to Each Party's Obligations to Effect the
Transactions Contemplated Hereby..........................16
6.2. Conditions to Obligations of News America....................17
6.3. Conditions to Obligations of PLD.............................19
ARTICLE VII
REGISTRATION RIGHTS
7.1. Registration on Request......................................20
7.2. Incidental Registration......................................22
7.3. Registration Procedures......................................24
7.4. Provision of Information; Transfer of Shares
After Registration .......................................28
7.5. Indemnification..............................................28
ARTICLE VIII
TERMINATION AND ABANDONMENT
8.1. Termination..................................................30
8.2. Procedure and Effect of Termination..........................31
ARTICLE IX
SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION
9.1. Survival of Representations..................................31
9.2. Statements as Representations................................31
9.3. PLD's Indemnification of News America........................31
9.4. News America's Indemnification of PLD........................32
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9.5. Conditions of Indemnification................................32
9.6. Cushion......................................................33
9.7. Limitation of Liability......................................33
9.8. Remedies Cumulative..........................................34
9.9. Assignment of Certain Representations, Warranties and
Indemnification Obligations...............................34
ARTICLE X
MISCELLANEOUS PROVISIONS
10.1. Amendment and Modification. ................................35
10.2. Waiver of Compliance; Consents..............................35
10.3. Notices.....................................................35
10.4. Assignment..................................................36
10.5. Confidentiality.............................................36
10.6. Governing Law...............................................37
10.7. Counterparts................................................37
10.8. Interpretation..............................................37
10.9. Entire Agreement............................................38
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ASSET EXCHANGE AGREEMENT
ASSET EXCHANGE AGREEMENT (this "Agreement"), dated April 19, 1998,
by and between:
NEWS AMERICA INCORPORATED, a corporation organized under the laws of
the State of Delaware ("News America"), with an address at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, and
PLD TELEKOM INC., a corporation organized under the laws of Delaware
("PLD"), with an address at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇.
W I T N E S S E T H:
WHEREAS, PLD is a provider of local, long distance and international
telecommunications services in the Russian Federation and Kazakstan; and
WHEREAS, News America and Cable and Wireless Plc, a company
registered under the laws of England under the number 238525 ("C&W"), are
substantially simultaneously with the execution and delivery of this Agreement
entering into that certain Stock Purchase Agreement (the "Stock Purchase
Agreement"), pursuant to which News America will purchase from (a) Navona
Communications Corporation Ltd. (a wholly owned subsidiary of C&W), a
corporation organized under the laws of Bermuda ("Navona"), (i) 10,555,739
shares of common stock, par value $.01 per share ("PLD Common Stock"), of PLD,
constituting as at April 16, 1998 approximately 31.21% of the presently issued
and outstanding capital stock of PLD (the "PLD Shares"), and (ii) 12,000 shares
of common stock, par value USD$1.00 per share, of PLD Holdings Ltd., a limited
liability company organized under the laws of Bermuda ("Holdings"), constituting
100% of the issued and outstanding capital stock of Holdings (the "Holdings
Shares"), which is the owner of eleven percent (11%) of the outstanding common
equity interests in PeterStar Company Limited, a closed joint stock company
organized under the laws of the Russian Federation ("PeterStar") and (b) C&W, a
warrant dated June 28, 1995, conferring on C&W the right to purchase up to
250,000 shares (subject to adjustment on the occurrence of certain events) of
PLD Common Stock at an exercise price of 11.3125 Canadian dollars per share,
expiring on June 22, 1999 a copy of which is attached hereto as Exhibit A (the
"PLD Warrant"; the
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PLD Warrant and the PLD Shares are collectively referred to herein as the "PLD
Interest") and
WHEREAS, PLD deems it to be advisable and in the best interests of
PLD and its shareholders to facilitate the acquisition of the PLD Interest and
the Holdings Shares by News America; and
WHEREAS, News America has advised PLD and C&W that it does not wish
to hold the Holdings Shares and that it is not willing to consummate the
acquisition of the PLD Interest and the Holdings Shares unless it can
substantially simultaneously therewith exchange the Holdings Shares with PLD for
additional shares of PLD Common Stock; and
WHEREAS, PLD deems it advisable and in the best interests of PLD and
its shareholders to acquire the Holdings Shares in exchange for shares of PLD
Common Stock; and
WHEREAS, PLD presently owns sixty percent (60%) of the equity
interest in PeterStar; and
WHEREAS, immediately prior to the consummation of the transaction
contemplated hereby, PLD shall have acquired, pursuant to a Share Purchase
Agreement between PLD and C&W (the "CIBBV Purchase Agreement"), 100 shares of
common stock, par value ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ Guilders per share, of CommStruct
International Byelorussia BV, a closed limited liability company organized under
the laws of The Netherlands ("CIBBV"), constituting 100% of the issued and
outstanding capital stock (the "CIBBV Shares") of CIBBV, which is the owner of
fifty percent (50%) of the outstanding common equity interests in Belarus-
Netherlands Belcel Joint Venture ("Belcel") and one hundred percent (100%) of
the outstanding common equity interests in Baltic Operations Ltd. - Latvia, from
C&W in exchange for 200,000 shares of PLD Common Stock plus 300,000 shares of
PLD Common Stock in consideration for the assignment of certain liabilities of
CIBBV to PLD or its designee; and
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements hereinafter set forth, the parties, intending to be
legally bound, hereby agree as follows:
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ARTICLE I
EXCHANGE OF STOCK
1.1. Exchange of Holdings Shares.
(a) On the Closing Date and substantially simultaneously with,
and subject to, the purchase of the Holdings Shares by News America as described
in the Stock Purchase Agreement, News America agrees to sell, assign, transfer
and deliver to PLD, and PLD agrees to purchase and acquire from News America,
all of News America's right, title and interest to the Holdings Shares.
(b) On the Closing Date and against delivery of the Holdings
Shares as set forth above, PLD will issue and deliver to News America 3,705,631
newly-issued, fully paid and nonassessable shares of PLD Common Stock (the "New
PLD Shares"), registered in the name of News America or its designee or nominee.
ARTICLE II
THE CLOSING
2.1. Time and Place of Closing. Subject to the terms and conditions
of this Agreement, the consummation of the transaction contemplated hereby (the
"Closing") shall take place at the offices of Skadden, Arps, Slate, ▇▇▇▇▇▇▇ &
▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ on the third business day
after News America shall have delivered to PLD written notice that the
conditions set forth in Section 6.2 hereof have been satisfied (the "Closing
Date"), or at such other time and place as shall be determined by mutual
agreement of the parties.
2.2. Deliveries by News America. At the Closing, News America will
deliver or cause to be delivered the following to PLD:
(a) Immediately upon (and subject to) the receipt thereof from
C&W, the stock certificates or other instruments representing all of the
Holdings Shares, duly endorsed in blank or accompanied by duly executed
instruments of transfer, together with any other documents that are necessary to
transfer to PLD all of News America's right, title and interest in and to the
Holdings Shares theretofore acquired from C&W or its affiliates;
(b) the Officer's Certificate referred to in Section 6.3(d)
hereof;
(c) the Opinion of Counsel referred to in Section 6.3(e)
hereof; and
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(d) such other documents, instruments and writings as are
required to be delivered by News America at or prior to the Closing Date
pursuant to this Agreement or otherwise required in connection herewith.
2.3. Deliveries by PLD. At the Closing, PLD will deliver the
following to News America:
(a) stock certificates, registered in the name of News America
or its nominee or designee, representing 3,705,631 shares of duly issued, fully
paid and nonassessable PLD Common Stock, and any other documents that are
necessary to transfer to News America good and marketable title to such shares;
(b) the Officer's Certificate referred to in Section 6.2(f)
hereof;
(c) the Opinion of Counsel referred to in Section 6.2(g)
hereof; and
(d) such other documents, instruments and writings as are
required to be delivered by News America at or prior to the Closing Date
pursuant to this Agreement or otherwise required in connection herewith.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PLD
PLD represents and warrants to News America as follows (for purposes
of Sections 3.7, 3.8, 3.9, 3.10 and 3.11 hereof, the term PLD, as of the Closing
Date, shall mean PLD and its subsidiaries taken as a whole, including without
limitation, the assets, liabilities, business and operations of Belcel acquired
pursuant to the CIBBV Purchase Agreement):
3.1. Organization; Qualification. PLD is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware, and has all requisite corporate power and authority to own, lease, and
operate its properties and to carry on its business as now being conducted. PLD
is duly qualified or licensed to do business as a foreign corporation and is in
good standing in each jurisdiction in which the property owned, leased or
operated by it or the nature of the business conducted by it makes such
qualification necessary. Schedule 3.1 sets forth, as of the date of this
Agreement, each jurisdiction in which PLD is qualified to do business as a
foreign corporation. PLD has heretofore
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delivered to News America complete and correct copies of its Certificate of
Incorporation and Bylaws as currently in effect.
3.2. Capitalization of PLD and PeterStar. Set forth on Schedule 3.2
is the number of shares in the capital stock or other equity interests of each
of PLD and PeterStar which are issued and outstanding as of the date of this
Agreement. All such shares are validly issued, fully paid and nonassessable.
Other than this Agreement, or as set forth in Schedule 3.2, there is no
subscription, option, warrant, call, right, agreement or commitment relating to
the issuance, sale, delivery or transfer by PLD and PeterStar of any shares of
capital stock or other equity interest (including any right of conversion or
exchange under any outstanding security or other instrument). There are no
outstanding contractual obligations of PLD and PeterStar to repurchase, redeem
or otherwise acquire any outstanding shares of capital stock or other equity
interest of PLD or PeterStar. There are no restrictions or limitations contained
in the organizational documents of PLD or in any contract, agreement, document
or other instrument to which PLD or any direct or indirect subsidiary is a party
or of which PLD or any direct or indirect subsidiary is aware that restricts, or
purports to restrict, the ability of C&W or any of its direct or indirect
subsidiaries to transfer the PLD Interest to News America or that create or give
rise to, by reason of the transfer of the PLD Interest to News America, any
pledge, security interest, lien, charge, encumbrance, claim, option or
limitation affecting the ability of News America to vote such shares or to
exercise any other rights appurtenant thereto under the Stock Purchase
Agreement. The New PLD Shares, taken together with the PLD Shares, will
represent an aggregate of not less than thirty-eight (38%) of the outstanding
PLD shares after giving effect to the issuance of the New PLD Shares. The PLD
Warrant is exercisable for shares of PLD Common Stock in accordance with its
terms.
3.3. Authority Relative to this Agreement. PLD has full corporate
power and authority to execute, deliver and perform its obligations under this
Agreement and all ancillary agreements to which it is a party and to consummate
the transactions contemplated hereby and thereby. The execution and delivery of
this Agreement and all ancillary agreements to which it is a party and the
consummation of the transactions contemplated hereby and thereby have been duly
and validly authorized, by the Board of Directors and, if required, shall be
duly and validly authorized by the shareholders of PLD prior to the Closing
Date, and no other corporate proceedings on the part of PLD are necessary to
authorize this Agreement or to consummate the transactions contemplated hereby
and thereby. This Agreement and each such ancillary agreement to which PLD is a
party has been duly and validly executed and delivered by PLD, and assuming that
this Agreement
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constitutes a valid and binding agreement of News America, constitutes a valid
and binding agreement of PLD, enforceable against PLD in accordance with its
terms, except that such enforceability may be limited by applicable bankruptcy,
insolvency, moratorium or other similar laws affecting or relating to
enforcement of creditors' rights generally or general principles of equity.
3.4. Consents and Approvals; No Violation. Except as set forth in
Schedule 3.4, the execution and delivery by PLD of this Agreement and all
ancillary agreements to which it is a party will not (i) conflict with or result
in any breach of any provision of the Certificate of Incorporation or Bylaws, or
similar charter documents, of PLD, (ii) require any consent, approval,
authorization or permit of, or filing with or notification to, any governmental
or regulatory authority, (iii) result in a default (or give rise to any right of
termination, cancellation or acceleration) under any of the terms, conditions or
provisions of any note, bond, mortgage, indenture, license, agreement or other
instrument or obligation to which PLD is a party or by which PLD or any of its
assets may be bound, except for such defaults (or rights of termination,
cancellation or acceleration) as to which requisite waivers or consents have
been obtained, or (iv) violate any order, writ, injunction, decree, statute,
rule or regulation applicable to PLD or any of its assets.
(b) Except as set forth in Schedule 3.4 and except for the
filings by News America and PLD required by Title II of the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇
Antitrust Improvements Act of 1976, as amended (the "HSR Act"), no declaration,
filing or registration with, or notice to, or authorization, consent or approval
of any governmental or regulatory body or authority is necessary for the
consummation by PLD of the transactions contemplated hereby.
3.5. Reports. Since January 1, 1997, PLD has, pursuant to the
Securities Act of 1933, as amended (the "Securities Act") and the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), filed or caused to be
filed with the United States Securities and Exchange Commission ("SEC") all
material forms, statements, reports and documents (including all exhibits,
amendments and supplements thereto) required to be filed by them with respect to
the business and operations of PLD under each of the Securities Act and the
Exchange Act and the respective rules and regulations thereunder, all of which
complied in all material respects with all applicable requirements of the
appropriate act and the rules and regulations thereunder in effect on the date
each such report was filed. True and complete copies of each of such forms,
statements, reports and documents, and such exhibits, have been delivered to
News America.
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3.6. Financial Statements. PLD has previously furnished to News
America copies of (a) PLD's audited consolidated and (b) PeterStar's audited (i)
balance sheets as of December 31, in each of the years 1997, 1996 and 1995 and
(ii) related consolidated statements of income and retained earnings and
consolidated changes in financial position of PLD and PeterStar for the fiscal
years then ended, together with the respective reports thereon of KPMG Peat
Marwick LLP and KPMG, as independent auditors of PLD for 1997, and 1996 and
1995, respectively, and KPMG, as independent auditors of PeterStar. Each of the
balance sheets included in the financial statements referred to in this Section
3.6 (including the related notes thereto) present fairly the financial
information purported to be set therein as of the dates thereof, and the other
related statements included therein (including the related notes thereto)
present fairly the results of operations and changes in financial position for
the periods then ended, all in conformity with generally accepted accounting
principles applied on a consistent basis, except as otherwise noted therein. For
purposes of this Agreement, the audited consolidated balance sheet of PLD and
the audited balance sheet of PeterStar as of December 31, 1997 are hereinafter
referred to as (the "Companies' Balance Sheets").
3.7. Undisclosed Liabilities. Except as set forth in Schedule 3.7,
neither PLD nor PeterStar has any material liability or obligation, secured or
unsecured (whether absolute, accrued, contingent or otherwise, and whether due
or to become due), of a nature required by generally accepted accounting
principles to be reflected in a corporate balance sheet or disclosed in the
notes thereto, which are not accrued or reserved against in the Companies'
Balance Sheets or disclosed in the notes thereto in accordance with generally
accepted accounting principles.
3.8. Absence of Certain Changes or Events. Except as set forth in
Schedule 3.8 or in PLD's Annual Report on Form 10-K for the year ended December
31, 1997, since the date of the Companies' Balance Sheets there has
not been:
(a) any material adverse change in the business, prospects,
operations, properties, assets, liabilities, competition, earnings, or condition
(financial or otherwise) of PLD or PeterStar, or any failure by PLD or PeterStar
to pay its debts when due;
(b) any event or condition of any character which either
individually or in the aggregate, might reasonably be expected to have a
material adverse effect on the business, prospects, operations, properties,
assets, liabilities, competition, earnings or condition (financial or
otherwise), of PLD or PeterStar;
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(c) any damage, destruction or loss (regardless of whether
covered by insurance) that might reasonably be expected to have a material
adverse effect on the business, prospects, operation, properties, assets,
liabilities, competition, earnings, or condition (financial or otherwise), of
PLD or PeterStar;
(d) any declaration, setting aside or payment of any dividend
or other distribution (whether in cash, stock, property, or any combination of
the foregoing) with respect to the capital stock or other equity interest of PLD
or PeterStar except as specifically provided for in this Agreement;
(e) any increase in the compensation paid, payable or to
become payable by PLD or PeterStar to its officers, directors or employees
(other than increases for employees in the ordinary course of business and
consistent with past practice), any hiring of new officers, directors or
employees (other than hiring of new employees in the ordinary course of business
consistent with past practice) or any increase in any bonus, insurance, pension
or other employee benefit plan, payments or arrangement (including loans) made
to, for or with any officers, directors, or employees (other than increases for
employees in the ordinary course of business and consistent with past practice
or other increases pursuant to written employee benefit plans);
(f) any entry into, material amendment of, or termination of,
any material agreement, material commitment or material transaction by PLD or
PeterStar, including, without limitation, any (i) merger, consolidation, share
exchange, acquisition or disposition of assets or stock or any financing
transaction or capital expenditure, (ii) indenture, mortgage, note, agreement or
other instrument relating to the borrowing of money (other than intercompany
accounts), (iii) partnership or joint venture agreement, (iv) material license
agreement relating to intellectual property (other than off-the-shelf software
licenses), or (v) agreement to amend its charter or other organizational
documents or any other document, contract, agreement, arrangement, undertaking
or instrument relating to any of the foregoing;
(g) any entry into, material change to the terms or conditions
of termination of, any license, permit, franchise, governmental approval or
decree pursuant to which PLD or PeterStar provides telephony, data transmission
or other telecommunications services;
(h) any notes or accounts receivable or portions of notes or
accounts receivable written off by PLD or PeterStar as uncollectible, other than
in the ordinary course of business and consistent with past practice;
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(i) any material obligation or material liability paid
(whether absolute, accrued, contingent or otherwise), or any lien or encumbrance
in connection therewith discharged, by PLD or PeterStar, other than (i) in the
ordinary course of business and consistent with past practice, or (ii) current
liabilities shown on the financial statements and current liabilities incurred
since their date;
(j) any properties or assets, real, personal or mixed,
tangible or intangible, of PLD or PeterStar mortgaged, pledged or subjected to
any security interest, lien or encumbrance;
(k) except as specifically provided for in this Agreement, any
sale, assignment, transfer, lease, dividend, distribution or other disposition
of any of property or assets by PLD or PeterStar, other than sales of products
in the ordinary course of business; or
(l) any agreement, understanding or undertaking to do any of
the foregoing by PLD or PeterStar.
3.9. Certain Disclosure Matters.
News America has been furnished with copies of each of the
documents, contracts, agreements, licenses, permits and other instruments
identified on Schedule 3.9 hereof (collectively, the "Written Disclosure
Materials"). All of the Written Disclosure Materials are true and complete
copies of each of the documents, contracts, agreements, licenses, permits and
other instruments that they purport to represent, and the Written Disclosure
Materials, together with the schedules attached hereto, collectively represent a
true, fair and complete portrayal of the material business operations of PLD and
PeterStar. None of the Written Disclosure Materials contains an untrue statement
of material fact or omits to state any fact required to be stated therein or
necessary, in light of the circumstances under which such statements are made,
so as not to be misleading, except to the extent that such statements were later
amended, revised or updated by PLD or PeterStar.
3.10. Legal Proceedings, etc. Except as set forth in Schedule 3.10,
there are no claims, actions, or proceedings pending or investigation pending
or, to PLD's knowledge, threatened against or relating to PLD or PeterStar
before any court, governmental or regulatory authority or body acting in an
adjudicative capacity. Except as set forth in Schedule 3.10, none of PLD or
PeterStar is subject to any outstanding judgment, rule, order, writ, injunction
or decree of any court, governmental or regulatory authority.
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3.11. Permits. Each of PLD and PeterStar has all material permits,
licenses, franchises and other governmental authorizations, consents and
approvals (collectively, "Permits") necessary to conduct its business as
presently conducted. Except as set forth in Schedule 3.11, neither PLD nor
PeterStar has received any written notification that it is in violation of any
of such Permits, or any law, statute, order, rule, regulation, ordinance or
judgment of any governmental or regulatory body or authority applicable to it.
Each of PLD and PeterStar is in compliance with all material Permits, laws,
statutes, orders, rules, regulations, ordinances, or judgments of any
governmental or regulatory body or authority applicable to it.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF NEWS AMERICA
News America represents and warrants to PLD as follows:
4.1. Organization. News America is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware.
News America has heretofore delivered to PLD complete and correct copies of its
organizational documents as currently in effect.
4.2. Authority Relative to this Agreement. News America has full
power and authority to execute, deliver and perform all obligations under this
Agreement and all ancillary agreements to which it is a party and to consummate
the transactions contemplated hereby and thereby. The execution and delivery of
this Agreement and all ancillary agreements to which it is a party and the
consummation of the transactions contemplated hereby and thereby have been duly
and validly authorized by News America and no other proceedings on the part of
News America are necessary to authorize this Agreement or to consummate the
transactions contemplated hereby. This Agreement and all ancillary agreements to
which it is a party have been duly and validly executed and delivered by News
America, and assuming that this Agreement and each such ancillary agreement
constitutes a valid and binding agreement of PLD, constitutes a valid and
binding agreement of News America, enforceable against News America in
accordance with its terms, except that such enforceability may be limited by
applicable bankruptcy, insolvency, moratorium or other similar laws affecting or
relating to enforcement of creditors' rights generally or general principles of
equity.
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4.3. Consents and Approvals; No Violation. (a) Except as set forth
in Schedule 4.3, neither the execution and delivery of this Agreement by News
America nor the exchange by News America of the Holdings Shares pursuant to this
Agreement will (i) conflict with or result in any breach of any provision of the
organizational documents of News America, (ii) require any consent, approval,
authorization or permit of, or filing with or notification to, any governmental
or regulatory authority, or (iii) result in a default (or give rise to any right
of termination, cancellation or acceleration) under any of the terms, conditions
or provisions of any note, bond, mortgage, indenture, agreement, lease or other
instrument or obligation to which News America or any of its subsidiaries are a
party or by which any of their respective assets may be bound, except for such
defaults (or rights of termination, cancellation or acceleration) as to which
requisite waivers or consents have been obtained.
(b) Except for the filings by News America and PLD required by
Title II of the HSR Act, no declaration, filing or registration with, or notice
to, or authorization, consent or approval of any governmental or regulatory body
or authority is necessary for the consummation by News America of the
transactions contemplated hereby.
4.4. Fees and Commissions. No broker, finder or other person is
entitled to any brokerage fees, commissions or finder's fees in connection with
the transaction contemplated hereby by reason of any action taken by News
America. News America hereby covenants that it will pay to PLD or otherwise
discharge, and will indemnify and hold PLD harmless from and against, any and
all claims or liabilities for all brokerage fees, commissions and finder's fees
(other than as described above) incurred by reason of any action taken by News
America.
4.5. Title. News America makes no representations or warranties
regarding the title to the Holdings Shares (including the interest in PeterStar)
that are the subject of this Agreement or the business or operation of PeterStar
or any other matter relating to the Holdings Shares or their provenance;
provided, however, that News America shall represent in writing to PLD on the
Closing Date that News America shall have taken no action with respect to the
Holdings Shares that would interfere with the transfer to PLD, and the receipt
by PLD, of title to the Holdings Shares which is of the same quality as the
title thereto which News America received from C&W. News America hereby assigns
to PLD each of the representations and warranties made by C&W to News America in
the Stock Purchase Agreement.
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4.6. Investment Intent; Private Placement.
(a) News America is knowledgeable, sophisticated and
experienced in making, and is qualified to make, decisions with respect to
investments in equity securities presenting an investment decision like that
involved in the acquisition of the New PLD Shares. News America or its counsel,
accountants or other investment advisers have requested, received, reviewed and
considered all information deemed relevant by them in making an informed
decisions to acquire the New PLD Shares.
(b) News America is acquiring the New PLD Shares for
investment for its own account only and not with a view to, or for resale in
connection with, any "distribution" thereof within the meaning of the
Securities Act. News America has no present intention of selling, granting any
participation in, or otherwise distributing the New PLD Shares, except in
compliance with the Securities Act or pursuant to an available exemption
thereunder.
(c) News America understands that the New PLD Shares have not
been registered under the Securities Act or registered or qualified under any
state securities law in reliance on specific exemptions therefrom, which
exemptions may depend upon, among other things, the bona fide nature of News
America's investment intent as expressed herein. News America is familiar with
Rule 144 under the Securities Act, as presently in effect, and understands the
resale limitations imposed thereby and by the Securities Act. News America
further understands that the certificate(s) representing the New PLD Shares
shall bear the following legend:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933 OR UNDER ANY APPLICABLE STATE SECURITIES LAWS. THE SHARES MAY
NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
EXEMPTION THEREFROM.
ARTICLE V
COVENANTS OF THE PARTIES
5.1. Conduct of Business of PLD and PeterStar. Except as described
in Schedule 5.1, during the period from the date of this Agreement to the
Closing
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Date, PLD will, and will cause PeterStar to, conduct their respective businesses
and operations according to their ordinary and usual course of business
consistent with past practice. Without limiting the generality of the foregoing,
and, except as contemplated in this Agreement or as described in Schedule 5.1,
prior to the Closing Date, without the prior written consent of News America,
PLD will not, and will not permit PeterStar to:
(a) (i) create, incur or assume any amount of indebtedness for
money borrowed, other than in the ordinary course of business, or (ii) assume,
guarantee, endorse or otherwise become liable or responsible (whether directly,
contingently or otherwise) for the obligations of any other person except in the
ordinary course of business; provided, PLD and PeterStar may endorse negotiable
instruments in the ordinary course of business;
(b) declare, set aside or pay any dividend or other
distribution (whether in cash, stock or property or any combination thereof) in
respect of their respective capital stock, or redeem or otherwise acquire any
shares of their respective capital stock;
(c) enter into any agreement, commitment or transaction
(including without limitation any borrowing, capital expenditure or capital
financing), except agreements, commitments or transactions in the ordinary
course of business or as contemplated herein provided, that PLD may nevertheless
effect the public offering of shares of PLD Common Stock as contemplated by the
terms of (i) that certain Indenture, dated May 31, 1996, among the parties
signatories thereto, relating to the $123,000,000 14% senior discount notes due
2004, (ii) that certain Indenture, dated May 31, 1996, among the parties
signatories thereto, relating to the $26,000,000 9% convertible subordinated
notes due 2006 (each such Indenture are collectively referred to herein as the
"Indentures") and (iii) the Revolving Credit Note and Warrant Agreement relating
to PLD's $12,400,000 12% Series A Revolving Credit Notes due 1998 and
$3,100,000 12% Series B Revolving Credit Notes due 1998; or
(d) enter into any contract, agreement, commitment or
arrangement, whether written or oral, with respect to any of the transactions
set forth in the foregoing paragraphs (a) through (c).
5.2. Access to Information. Between the date of this Agreement and
the Closing Date, PLD will, and will cause PeterStar, during ordinary business
hours and upon reasonable notice to, (i) give News America and its accountants,
counsel, financial advisors and other authorized representatives (the "News
America Repre-
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sentatives") reasonable access to all books, records, plants, offices and other
facilities and properties of PLD and PeterStar to which News America is
permitted access by law, (ii) permit News America to make such reasonable
inspections thereof as News America may reasonably request; (iii) cause the
officers and advisors of PLD and PeterStar to furnish News America with such
financial and operating data and other information with respect to the business
and properties of PLD and PeterStar as News America may from time to time
reasonably request; (iv) cause the officers and advisors of PLD and PeterStar
to furnish News America a copy of each report, schedule or other document filed
by them with any governmental agency or authority, provided, however, that (A)
any such investigation shall be conducted in such a manner as not to interfere
unreasonably with the operation of the business of PLD and PeterStar or PLD's
relationship with the other shareholders of PeterStar, (B) PLD and PeterStar
shall not be required to take any action which would constitute a waiver of the
attorney-client privilege and (C) PLD and PeterStar need not supply News
America with any information which PLD or PeterStar is under a legal obligation
not to supply.
All information furnished to or obtained by News America and any
News America Representatives pursuant to this Section 5.2 shall be subject to
the confidentiality provisions set forth in Section 10.5 hereof.
5.3. Expenses. Whether or not the transactions contemplated hereby
are consummated, all costs and expenses incurred in connection with this
Agreement and the transactions contemplated hereby shall be borne by the party
incurring such costs and expenses.
5.4. Further Assurances. Subject to the terms and conditions of this
Agreement, each of the parties hereto will use all reasonable efforts to take,
or cause to be taken, all action, and to do, or cause to be done, all things
necessary, proper or advisable under applicable laws and regulations to
consummate and make effective the sale, assignment, transfer and delivery of the
PLD Interest, and the Holdings Shares and the interest in PeterStar represented
thereby, pursuant to this Agreement. From time to time after the date hereof,
without further consideration, News America will, at its own expense, execute
and deliver such documents to PLD as PLD may reasonably request in order more
effectively to vest in PLD good title to the Holdings Shares. From time to time
after the date hereof, without further consideration, PLD will, at its own
expense, execute and deliver such documents to News America or its designee
(which may include C&W) as News America or such designee may reasonably request
in order more effectively to consummate the sale, assignment,
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transfer and delivery of (a) the New PLD Shares pursuant to this Agreement and
(b) the PLD Interest and the Holdings Shares pursuant to the Stock Purchase
Agreement.
5.5. Public Statements. The parties shall consult with each other
prior to issuing any public announcement, statement or other disclosure with
respect to this Agreement or the transactions contemplated hereby and shall not
issue any such public announcement, statement or other disclosure prior to such
consultation. Notwithstanding the foregoing, the parties may make public
announcements, statements or other disclosures with respect to this Agreement
and the transactions contemplated hereby without such consultation to the extent
and under the circumstances in which the parties are legally compelled (by
deposition, interrogatory, request for documents, subpoena, civil investigative
demand or similar process, or by order of a court or tribunal of competent
jurisdiction) to do so, or in order to comply with applicable rules or
requirements of any stock exchange, government department or agency or other
regulatory authority, or as required by any securities law or regulation or
other legal requirement, in any such case in circumstances where such
consultation would not be practicable.
5.6. Consents and Approvals.
(a) PLD and News America shall cooperate with each other and
(i) promptly prepare and file all necessary documentation, (ii) effect all
necessary applications, notices, petitions and filings and execute all
agreements and documents, (iii) use all reasonable efforts to obtain all
necessary permits, consents, approvals and authorizations of all governmental
bodies and (iv) use all reasonable efforts to obtain all necessary Permits,
consents, approvals and authorizations of all other parties, in the case of
each of the foregoing clauses (i), (ii) and (iii), necessary or advisable to
consummate the transactions contemplated by this Agreement or required by the
terms of any note, bond, mortgage, indenture, deed of trust, license,
franchise, permit, concession, contract, lease or other instrument to which
PLD, Holdings, PeterStar or News America or any of their subsidiaries are a
party or by which any of them is bound. PLD shall have the right to review and
approve in advance all characteristics of the information relating to PLD or
PeterStar; and each of PLD and News America shall have the right to review and
approve in advance all characterizations of the information relating to the
transactions contemplated by this Agreement which appear in any filing made in
connection with the transactions contemplated hereby. The parties hereto agree
that they will consult with each other with respect to the obtaining of all
such necessary Permits, consents, approvals and authorizations of all third
parties and governmental bodies. Each of PLD and News America shall designate
separate counsel with respect to all applications, notices,
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petitions and filings (joint or otherwise) relating to this Agreement and the
transactions contemplated hereby on behalf of PLD, on the one hand and News
America on the other hand, with all governmental bodies.
(b) The parties hereto shall consult with each other prior to
proposing or entering into any stipulation or agreement with any foreign or
United States governmental authority or agency or any third party in connection
with any foreign or United States governmental consents and approvals legally
required for the consummation of the transactions contemplated hereby and shall
not propose or enter into any such stipulation or agreement without the other
party's prior written consent, which consent shall not be unreasonably withheld.
5.7. Supplements to Schedules. PLD, on the one hand, and News
America, on the other hand, shall have the right from time to time prior to the
Closing to supplement or amend its Schedules with respect to any matter
hereafter arising which if existing or known at the date of this Agreement would
have been required to be set forth or described in such Schedules. Any such
supplemental or amended disclosure shall be deemed to have cured any breach of
any representation or warranty made in this Agreement for purposes of Article
IX, but will not be deemed to have cured any such breach made in this Agreement
and to have been disclosed as of the date of this Agreement for purposes of
determining whether or not the conditions set forth in Article VI hereof have
been satisfied.
5.8. Completion of Ancillary Agreements. Each party will use
reasonable efforts to take or cause to be taken, all action, and do or cause to
be done all things reasonably necessary or advisable to perform their respective
obligations under, in the case of PLD, the CIBBV Exchange Agreement and, in the
case of News America, the Stock Purchase Agreement, each in the form as executed
on the date hereof.
ARTICLE VI
CLOSING CONDITIONS
6.1. Conditions to Each Party's Obligations to Effect the
Transactions Contemplated Hereby. The respective obligations of each party to
effect the transactions contemplated hereby shall be subject to the fulfillment
at or prior to the Closing Date of the following conditions:
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(a) The waiting period under the HSR Act applicable to the
consummation of the transactions contemplated hereby shall have expired or been
terminated;
(b) No preliminary or permanent injunction or other order or
decree by any federal, state, local or foreign court which prevents the
consummation of the transactions contemplated hereby shall have been issued and
remain in effect (each party agreeing to use its reasonable best efforts to have
any such injunction, order or decree lifted) and no statute, rule or regulation
shall have been enacted by any federal, state, local or foreign government or
governmental agency which prohibits the consummation of the transactions
contemplated hereby;
(c) All foreign and United States federal, state and local
government consents and approvals required for the consummation of the transac-
tions contemplated hereby shall have become Final Orders (a "Final Order" means
a final order after all opportunities for rehearing are exhausted (whether or
not any appeal thereof is pending)) and shall not be subject to terms and
conditions; and
(d) If so required, a resolution shall have passed at the
annual meeting of stockholders (or, if applicable, at any special meeting of
stockholders) of PLD, convened after proper notice to and/or waiver of such
notice by the stockholders, with a quorum of the stockholders present or
represented, to approve the transaction contemplated hereby.
6.2. Conditions to Obligations of News America. The obligation of
News America to effect the transactions contemplated by this Agreement shall be
subject to the fulfillment at or prior to the Closing Date of the following
additional conditions:
(a) There shall not have occurred and be continuing any event
or events, either individually or in the aggregate, which would have a material
and adverse effect on the property, business, operations, prospects or condition
(financial or otherwise) of PLD;
(b) PLD shall have performed and complied with in all material
respects the covenants and agreements contained in this Agreement required to be
performed and complied with by it at or prior to the Closing Date, and the
representations and warranties of PLD set forth in this Agreement shall be true
and correct in all material respects as of the date of this Agreement and as of
the Closing Date as though made at and as of the Closing Date;
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(c) News America and C&W shall have closed the transactions
contemplated by the Stock Purchase Agreement simultaneously with the
transactions contemplated hereby;
(d) News America and PLD shall have executed and delivered a
Director Nomination Agreement containing terms and conditions satisfactory to
News America and PLD and such agreement shall be in full force and effect;
(e) The common stock of PLD shall be quoted on The Nasdaq
Stock Market, and no action shall have been taken or shall be pending or
threatened in respect of the delisting of the common stock of PLD from
eligibility for such quotation;
(f) News America shall have received a certificate from an
authorized officer of PLD, dated the Closing Date, to the effect that to the
officer's knowledge, the conditions set forth in Section 6.2(a) and (b) have
been satisfied; and
(g) News America shall have received an opinion from E. ▇▇▇▇▇
▇▇▇▇▇▇▇▇, Senior Vice President and General Counsel of PLD, dated the Closing
Date and satisfactory in form and substance to News America and its counsel,
substantially to the effect that:
(i) PLD is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware and has
the corporate power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby; and the execution and delivery
of this Agreement and the consummation of the transactions contemplated hereby
have been duly authorized by requisite corporate action taken on the part of
PLD;
(ii) this Agreement has been executed and delivered
by PLD and is a valid and binding obligation of the PLD enforceable against it
in accordance with its terms, except (A) that such enforcement may be subject to
bankruptcy, insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights, and (B) that the remedy of
specific performance and injunctive and other forms of equitable relief may be
subject to certain equitable defenses and to the discretion of the court before
which any proceeding therefore may be brought; and
(iii) the issuance and sale of the New PLD Shares to
News America pursuant to this Agreement are not required to be registered under
the Securities Act.
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As to any matter contained in such opinion which involves the laws
of any jurisdiction other than the Federal laws of the United States or the laws
of the State of New York, such counsel may rely upon opinions of counsel
admitted in such other jurisdictions. Any opinions relied upon by such counsel
as aforesaid shall be delivered together with the opinion of such counsel. Such
opinion may expressly rely as to matters of fact upon certificates furnished by
PLD and appropriate officers and directors of each of PLD and PeterStar and by
public officials.
6.3. Conditions to Obligations of PLD. The obligations of PLD to
effect the transaction contemplated by this Agreement shall be subject to the
fulfillment at or prior to the Closing Date of the following additional
conditions:
(a) News America shall have performed and complied with in all
material respects the covenants and agreements contained in this Agreement
required to be performed and complied with by it at or prior to the Closing
Date, and the representations and warranties of News America set forth in this
Agreement shall be true and correct in all material respects as of the date of
this Agreement and as of the Closing Date as though made at and as of the
Closing Date;
(b) PLD shall have received stock certificates representing
all of the Holdings Shares, duly endorsed in blank or accompanied by duly
executed instruments of transfer, together with any other documents that are
necessary to transfer to PLD good and marketable title to the Holdings Shares;
(c) News America and C&W shall have closed the transactions
contemplated by the Stock Purchase Agreement, including the purchase by News
America from C&W of the Holdings Shares;
(d) PLD and C&W shall have closed the transactions
contemplated by the CIBBV Purchase Agreement, including the purchase by PLD of
the CIBBV shares;
(e) PLD shall have received from special Bermuda counsel to
C&W a reliance letter dated the Closing Date to the effect that PLD may rely on
such counsel's opinion to News America in connection with the Stock Purchase
Agreement and assuming that News America transfers to PLD the Holdings Shares
with the same quality of title that News America received from C&W, PLD will be
the beneficial and registered holder of the Holdings Shares upon the
consummation of the transactions contemplated hereby;
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(f) PLD shall have received a certificate from an authorized
officer of News America, dated the Closing Date, to the effect that to the
officer's knowledge, the conditions set forth in Section 6.3(a) have been
satisfied; and
(g) PLD shall have received an opinion from Skadden, Arps,
Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, special counsel to News America, dated the Closing
Date and satisfactory in form and substance to PLD and its counsel,
substantially to the effect that:
(i) News America is a corporation organized and in
good standing under the laws of the State of Delaware and has the power and
authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby; and the execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby have been
duly authorized by requisite action taken on the part of News America; and
(ii) this Agreement has been executed and delivered
by News America and is a valid and binding obligation of News America, enforce-
able against it in accordance with its terms, except (A) that such enforcement
may be subject to bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect relating to creditors' rights, and (B)
that the remedy of specific performance and injunctive and other forms of
equitable relief may be subject to certain equitable defenses and to the
discretion of the court before which any proceeding therefore may be brought.
As to any matter contained in such opinion which involves the laws
of any jurisdiction other than the Federal laws of the United States or the laws
of the State of New York, such counsel may rely upon opinions of counsel
admitted in such other jurisdictions. Any opinions relied upon by such counsel
as aforesaid shall be delivered together with the opinion of such counsel. Such
opinion may expressly rely as to matters of fact upon certificates furnished by
News America and appropriate officers and directors of News America and by
public officials.
ARTICLE VII
REGISTRATION RIGHTS
7.1. Registration on Request.
(a) Request. Upon the written request of News America or any
permitted successor or assign requesting that PLD effect the registration under
the Securities Act of all or part of any of the PLD Interest that is not
registered under
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the Securities Act, the New PLD Shares or any other security of PLD owned, from
time to time, by News America which is registrable under the applicable laws of
the United States (the "Registrable Securities") and specifying the intended
method of disposition thereof, PLD will, subject to the terms of this Agreement,
use its best efforts to effect the registration under the Securities Act of the
Registrable Securities which PLD has been so requested to register for
disposition in accordance with the intended method of disposition stated in such
request; provided, that the request for registration pursuant to this Section
7.1 shall relate to the intention to dispose of not less than 25% of the
Registrable Securities then owned by News America or its subsidiaries or
affiliates or permitted successors or assigns. For purposes of this Article VII,
the term "News America" shall include, as the context requires, all holders of
Registrable Securities.
(b) Registration Statement Form. Registrations under this
Section 7.1 shall be on such appropriate registration form of the SEC (i) as
shall be selected by PLD and as shall be reasonably acceptable to News America
and (ii) as shall permit the disposition of such Registrable Securities in
accordance with the intended method or methods of disposition specified in the
request for such registration. If, in connection with any registration under
Section 7.1 which is proposed by PLD to be on Form S-3 or any similar short form
registration statement which is a successor to Form S-3, the managing
underwriters, if any, shall advise PLD in writing that in their opinion the use
of another permitted form is of material importance to the success of the
offering, then such registration shall be on such other permitted form.
(c) Expenses. PLD shall pay all Registration Expenses in
connection with only one (1) registration effected in accordance with this
Section 7.1; provided, however, that if at or prior to the fifth anniversary of
the date of this Agreement News America, its affiliates and subsidiaries, and
any permitted successors and assigns, collectively own more than 50% of the
aggregate Registrable Securities subject to this Agreement (such number to take
account of any stock splits, dividends, combinations or other adjustments
affecting any of the Registrable Securities), then the holders of Registrable
Securities shall be entitled to one (1) additional registration effected in
accordance with this Section 7.1 in respect of which PLD shall pay all
Registration Expenses.
(d) Effective Registration Statement. A registration requested
pursuant to this Section 7.1 shall not be deemed to have been effected (i)
unless a registration statement with respect thereto has become effective,
provided that a registration which does not become effective after PLD has filed
a registration
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statement with respect thereto solely by reason of the refusal to proceed of
News America (other than a refusal to proceed based upon the advice of counsel
relating to a matter with respect to PLD) shall be deemed to have been effected
by PLD at the request of News America unless News America shall have elected to
pay all Registration Expenses in connection with such registration, (ii) if,
after it has become effective, such registration becomes subject to any stop
order, injunction or other order or requirement of the SEC or other governmental
agency or court for any reason, or (iii) the conditions to closing specified in
the purchase agreement or underwriting agreement entered into in connection with
such registration are not satisfied, other than by reason of some act or
omission by News America.
(e) Selection of Underwriters. If a requested registration
pursuant to this Section 7.1 involves an underwritten offering, the managing or
lead underwriter or underwriters thereof shall be selected by News America and
shall be acceptable to PLD, which shall not unreasonably withhold its acceptance
of any such underwriters.
(f) Notwithstanding anything to the contrary contained herein,
PLD shall be entitled to postpone for a reasonable period of time (but in no
event more than 120 days) the filing of a registration statement if, at the time
it receives a request for such registration, (i) PLD reasonably determines, on
the basis of written advice to such effect from outside counsel or an investment
banking firm representing PLD, that such registration and the offering and
sales thereunder by News America would materially interfere with any financing,
acquisition, corporate reorganization or other material transaction or
development involving PLD or any of its subsidiaries, and promptly gives News
America notice of such determination, (ii) PLD would be required to undergo a
special interim audit or to prepare and file with the SEC sooner than would
otherwise be required pro forma or other financial statements.
7.2. Incidental Registration.
(a) Right to Include Registrable Securities. If PLD at any
time proposes to register any of its securities under the Securities Act (other
than by a registration on Form S-8, or any successor form thereto, relating to a
stock option plan, stock purchase plan, managing directors' plan, savings or
similar plan and other than pursuant to Section 7.1), whether or not for sale
for its own account, it will each such time give prompt written notice to News
America of its intention to do so and of News America's rights under this
Section 7.2. Upon the written request of News America made within 20 days after
the receipt of any such notice (which request shall specify the Registrable
Securities intended to be disposed of by News America
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and the intended method of disposition thereof), PLD will, subject to the terms
of this Agreement, use its best efforts to effect the registration under the
Securities Act of all Registrable Securities which PLD has been so requested to
register by News America, to the extent requisite to permit the disposition (in
accordance with the intended methods thereof as aforesaid) of the Registrable
Securities so to be registered, by inclusion of such Registrable Securities in
the registration statement which covers the securities which News America
proposes to register, provided that if, at any time after giving written notice
of its intention to register any securities and prior to the effective date of
the registration statement filed in connection with such registration, PLD shall
determine for any reason either not to register or to delay registration of such
securities, PLD may, at its election, give written notice of such determination
to News America and, thereupon, (i) in the case of a determination not to
register, shall be relieved of its obligation to register any Registrable
Securities in connection with such registration (but not from its obligation to
pay the Registration Expenses in connection therewith), without prejudice,
however, to the rights of News America to request that such registration be
effected as a registration under Section 7.1, and (ii) in the case of a
determination to delay registering, shall be permitted to delay registering any
Registrable Securities, for the same period as the delay in registering such
other securities. Except for the shares registered pursuant to this Section 7.2,
no registration effected under this Section 7.2 shall relieve PLD of its
obligation to effect any registration upon request under Section 7.1, nor shall
any such registration hereunder be deemed to have been effected pursuant to
Section 7.1. PLD will pay all Registration Expenses in connection with each
registration of Registrable Securities requested pursuant to this Section 7.2.
(b) Priority in Incidental Registrations. If (i) a
registration pursuant to this Section 7.2 involves an underwritten offering of
the securities so being registered, whether or not for sale for the account of
PLD, to be distributed (on a firm commitment basis) by or through one or more
underwriters of recognized standing under underwriting terms appropriate for
such a transaction, (ii) the Registrable Securities so requested to be
registered for sale for the account of holders of Registrable Securities are not
also to be included in such underwritten offering (either because PLD has not
been requested so to include such Registrable Securities pursuant to Section
7.4(b) or, if requested to do so, is not obligated to do so under Section
7.4(b), and (iii) the managing underwriter of such underwritten offering shall
inform PLD and News America of its belief that the distribution of all or a
specified number of such Registrable Securities concurrently with the securities
being distributed by such underwriters would interfere with the successful
marketing of the securities being distributed by such underwriters (such writing
to state the basis of
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such belief and the approximate number of such Registrable Securities which may
be distributed without such effect), then PLD may, upon written notice to News
America, reduce the number of such Registrable Securities the registration of
which shall have been requested by News America so that the resultant aggregate
number of such Registrable Securities so included in such registration shall be
equal to the number of shares stated in such managing underwriter's letter.
7.3. Registration Procedures. If and whenever PLD is required to
effect the registration of any Registrable Securities under the Securities Act
as provided in Sections 7.1 and 7.2, PLD shall, as expeditiously as possible:
(i) prepare and (in the case of a registration pursuant
to Section 7.1, such filing to be made within 60 days after the request
of News America) file with the SEC the requisite registration statement
to effect such registration (including such audited financial
statements as may be required by the Securities Act or the rules and
regulations promulgated thereunder) and thereafter use its best
efforts to cause such registration statement to become and remain
effective, provided however that PLD may discontinue any registration
of its securities which are not Registrable Securities (and, under the
circumstances specified in Section 7.2(a), its securities which are
Registrable Securities) at any time prior to the effective date of the
registration statement relating thereto, provided further that before
filing such registration statement or any amendments thereto, PLD will
furnish to the counsel selected by the holders of Registrable
Securities which are to be included in such registration copies of all
such documents proposed to be filed, which documents will be subject to
the review of such counsel;
(ii) prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration
statement effective and to comply with the provisions of the Securities
Act with respect to the disposition of all securities covered by such
registration statement until the earlier of such time as all of such
securities have been disposed of in accordance with the intended
methods of disposition by the seller or sellers thereof set forth in
such registration statement or (i) in the case of a registration
pursuant to Section 7.1, the expiration of 180 days after such
registration statement becomes effective, or (ii) in the case of a
registration pursuant to Section 7.2, the expiration of 90 days after
such registration statement becomes effective;
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(iii) furnish to News America and each underwriter, if
any, of the securities being sold such number of conformed copies of
such registration statement and of each such amendment and supplement
thereto (in each case including all exhibits), such number of copies of
the prospectus contained in such registration statement (including each
preliminary prospectus and any summary prospectus) and any other
prospectus filed under Rule 424 under the Securities Act, in conformity
with the requirements of the Securities Act, and such other documents,
as News America and underwriter, if any, may reasonably request in
order to facilitate the public sale or other disposition of the
Registrable Securities owned by News America;
(iv) use its best efforts to register or qualify all
Registrable Securities and other securities covered by such
registration statement under such other securities laws or blue sky
laws of such jurisdictions in the United States as News America and any
underwriter of the securities being sold by News America may reasonably
request, to keep such registrations or qualifications in effect for so
long as such registration statement remains in effect, and take any
other action which may be reasonably necessary or advisable to enable
News America and any such underwriter to consummate the disposition in
such jurisdictions of the securities owned by News America, except that
PLD shall not for any such purpose be required to qualify generally to
do business as a foreign corporation in any jurisdiction wherein it
would not but for the requirements of this subdivision (iv) be
obligated to be so qualified, to subject itself to taxation in any
such jurisdiction or to consent to general service of process in any
such jurisdiction;
(v) use its best efforts to cause all Registrable
Securities covered by such registration statement to be registered with
or approved by such other governmental agencies or authorities as may
be necessary to enable News America to consummate the disposition of
such Registrable Securities;
(vi) furnish to News America a signed counterpart,
addressed to News America and the underwriters, if any, of:
(x) an opinion of counsel for PLD, dated the
effective date of such registration statement (or, if such registration includes
an underwritten public offering, an opinion dated the date of the closing under
the underwriting agreement), reasonably satisfactory in form and substance to
News
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America and its counsel and covering such matters as are customarily covered in
opinions of issuer's counsel in transactions of this sort, and
(y) a "comfort" letter (or, in the case News
America does not satisfy the conditions for receipt of a "comfort" letter
specified in Statement on Auditing Standards No. 72, an "agreed upon procedures"
letter), dated the effective date of such registration statement (and, if such
registration includes an underwritten public offering, a letter of like kind
dated the date of the closing under the underwriting agreement), signed by the
independent public accountants who have certified PLD's financial statements
included in such registration statement, covering substantially the same matters
with respect to such registration statement (and the prospectus included
therein) and, in the case of the accountants' letter, with respect to events
subsequent to the date of such financial statements, as are customarily covered
in opinions of issuer's counsel and in accountants' letters delivered to the
underwriters in underwritten public offerings of securities (with, in the case
of an "agreed upon procedures" letter, such modifications or deletions as may be
required under Statement on Auditing Standards No. 35) and, in the case of the
accountants' letter, such other financial matters, and, in the case of the legal
opinion, such other legal matters, as News America (or the underwriters, if any)
may reasonably request;
(vii) notify News America and the managing under writer
or underwriters, if any, promptly and confirm such advice in
writing promptly thereafter:
(v) when the registration statement, the
prospectus or any prospectus supplement related thereto or post-effective
amendment to the registration statement has been filed, and, with respect to the
registration statement or any post-effective amendment thereto, when the same
has become effective;
(w) of any request by the SEC for amendments
or supplements to the registration statement or the prospectus or for additional
information;
(x) of the issuance by the SEC of any stop order
suspending the effectiveness of the registration statement or the initiation of
any proceedings by any Person for that purpose;
(z) of the receipt by PLD of any notification
with respect to the suspension of the qualification of any Registrable
Securities for sale under the securities or blue sky laws of any jurisdiction or
the initiation or threat of any proceeding for such purpose; and
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(viii) notify News America at any time when a pro-
spectus relating thereto is required to be delivered under the
Securities Act, upon PLD's discovery that, or upon the happening of any
event as a result of which, the prospectus included in such
registration statement, as then in effect, includes an untrue statement
of a material fact or omits to state any material fact required to be
stated therein or necessary to make the statements therein not
misleading in the light of the circumstances then existing, and at the
request of News America promptly prepare and furnish to News America
and each underwriter, if any, a reasonable number of copies of a
supplement to or an amendment of such prospectus as may be necessary so
that, as thereafter delivered to the purchasers of such securities,
such prospectus shall not include an untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in the light of
the circumstances then existing;
(ix) use its best efforts to obtain the withdrawal of
any order suspending the effectiveness of the registration statement at
the earliest possible moment; and
(x) otherwise use its best efforts to comply with all
applicable rules and regulations of SEC, and make available to its
security holders, as soon as reasonably practicable, an earnings
statement covering the period of at least twelve months, but not more
than eighteen months, beginning with the first day of PLD's first full
calendar month after the effective date of such registration statement,
which earnings statement shall satisfy the provisions of Section 11(a)
of the Securities Act and Rule 158 thereunder, and will furnish to News
America at least five business days prior to the filing thereof a copy
of any amendment or supplement to such registration statement or
prospectus and shall not file any thereof to which News America shall
have reasonably objected on the grounds that such amendment or
supplement does not comply in all material respects with the
requirements of the Securities Act or of the rules or regulations
thereunder.
PLD will not file any registration statement or amendment thereto
hereunder or any prospectus or any supplement thereto (including such documents
incorporated by reference and proposed to be filed after the initial filing of
the registration statement) to which News America shall reasonably object,
provided that
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PLD may file such document in a form required by law or upon the advice of its
counsel.
News America agrees by acquisition of such Registrable Securities
that, upon receipt of any notice from PLD of the occurrence of any event of the
kind described in subdivision (viii) of this Section 7.3, it will forthwith
discontinue its disposition of Registrable Securities pursuant to the
registration statement relating to such Registrable Securities until its receipt
of the copies of the supplemented or amended prospectus contemplated by
subdivision (viii) of this Section 7.3 and, if so directed by PLD, will deliver
to PLD (at PLD's expense) all copies, other than permanent file copies, then in
its possession of the prospectus relating to such Registrable Securities current
at the time of receipt of such notice. In the event PLD shall give any such
notice, the period mentioned in paragraph (ii) of this Section 7.3 shall be
extended by the length of the period from and including the date when News
America shall have received such notice to the date on which each such seller
has received the copies of the supplemented or amended prospectus contemplated
by paragraph (viii) of this Section 7.3.
7.4. Provision of Information; Transfer of Shares After
Registration.
(a) News America shall, prior to the filing of any
Registration Statement pursuant to this Agreement, provide PLD in writing with
such information specified in Item 507 of Regulation S-K under the Securities
Act and any other similar information reasonably requested by PLD for use in
connection with such Registration Statement or any related prospectus or
preliminary prospectus. News America shall promptly furnish to PLD all
information required to be disclosed in order to make the information previously
furnished to PLD not materially misleading.
(b) News America agrees that it will not effect any disposi-
tion of the Registrable Securities that would constitute a sale within the
meaning of the Securities Act except as contemplated in the Registration
Statement or as otherwise in compliance with applicable securities laws,
including, without limitation, to the extent applicable, the prospectus
delivery requirements of the Securities Act.
7.5. Indemnification.
(a) Indemnification by PLD. In the event of any registration
of any securities of PLD under the Securities Act, PLD will, and hereby does
agree to, indemnify and hold harmless News America against any losses, claims,
damages or liabilities, joint or several, to which News America or any director
or officer of
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News America or underwriter or controlling person may become subject under the
Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions or proceedings, whether commenced or threatened, in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in any registration statement
under which such securities were registered under the Securities Act, any
preliminary prospectus, final prospectus or summary prospectus contained
therein, or any amendment or supplement thereto, or any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading. Such indemnification
shall be subject to customary terms and provisions governing indemnification in
transactions of this type; provided, however, that PLD shall not be liable in
any such case to the extent that such loss, claim, damages or liability arises
out of, or is based upon (i) an untrue statement of a material fact made in such
Registration Statement, or any omission of a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, made in reliance upon
and in conformity with written information furnished to PLD by or on behalf of
News America specifically for use in preparation of such Registration Statement,
(ii) the failure of News America to comply with the covenants and agreements
contained in Sections 7.3 or 7.4(a) hereof respecting sale of the Registrable
Securities or (iii) any untrue statement of a material fact, or any omission of
a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading, in any prospectus that is corrected in any subsequent prospectus
that was delivered to News America prior to the pertinent sale or sales by News
America.
(b) Indemnification by News America. PLD may require, as a
condition to including any Registrable Securities in any registration statement
filed pursuant to Section 7.3, that PLD shall have received an undertaking
satisfactory to it from News America of such Registrable Securities, to
indemnify and hold harmless (in the same manner and to the same extent as set
forth in subdivision (a) of this Section 7.5) PLD, each director of PLD each
officer of PLD and each other person, if any, who controls PLD within the
meaning of the Securities Act, with respect to (i) any statement or alleged
statement in or omission or alleged omission from such registration statement,
any preliminary prospectus, final prospectus or summary prospectus contained
therein, or any amendment or supplement thereto, if such statement or alleged
statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to PLD through an instrument duly
executed by News America specifically stating that it is for use in
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the preparation of such registration statement, preliminary prospectus, final
prospectus, summary prospectus, amendment or supplement, (ii) the failure of
News America to comply with the covenants and agreements contained in the last
paragraph of Section 7.3 or in Section 7.4(a) hereof respecting sale of the
Registrable Securities or (iii) any untrue statement of a material fact, or any
omission of a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading, in any prospectus that is corrected in any subsequent
prospectus that was delivered to News America prior to the pertinent sale or
sales by News America.
ARTICLE VIII
TERMINATION AND ABANDONMENT
8.1. Termination.
(a) This Agreement may be terminated at any time prior to the
Closing Date, by mutual written consent of News America and PLD.
(b) This Agreement may be terminated by News America, on the
one hand, or PLD, on the other hand, if the transactions contemplated hereby
shall not have been consummated on or before June 30, 1998; provided, however,
that the right to terminate this Agreement pursuant to this Section 8.1(b) shall
not be available to any party whose failure to perform any of its covenants or
obligations under this Agreement has been the cause of or resulting in the
failure of the transactions contemplated by this Agreement to occur on or prior
to the aforesaid date.
(c) This Agreement may be terminated by either News America,
on the one hand, or PLD, on the other hand, if (i) any governmental or
regulatory body, the consent of which is a condition to the obligations of PLD
and News America to consummate the transactions contemplated hereby, shall have
determined not to grant its consent and all appeals of such determination shall
have been taken and have been unsuccessful, or (ii) any court of competent
jurisdiction shall have issued an order, judgment or decree permanently
restraining, enjoining or otherwise prohibiting the transactions contemplated
hereby and such order, judgment or decree shall have become final and
nonappealable.
(d) This Agreement may be terminated by News America, on the
one hand, or PLD, on the other hand, if there has been a material violation or
breach of any agreement, representation or warranty contained in this Agreement
which violation or breach has not been waived by the non-breaching party.
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35
8.2. Procedure and Effect of Termination. In the event of
termination of this Agreement and abandonment of the transactions contemplated
hereby by either or both of the parties pursuant to Section 8.1, written notice
thereof shall forthwith be given by the terminating party to the other party and
this Agreement shall terminate and the transactions contemplated hereby shall be
abandoned, without further action by any of the parties hereto without prejudice
to any claims of a party to this Agreement arising prior to the date of such
termination in respect of any breach of any representation, warranty or
agreement contained in this Agreement and provided that (a) the provisions of
Sections 5.4 and Article X (except for section 10.4) hereof shall survive such
termination, and (b) that regardless of such termination the provisions of
Article IX hereof shall continue with respect to any such claims. If this
Agreement is terminated as provided herein all filings, applications and other
submissions made pursuant to this Agreement, to the extent practicable, shall be
withdrawn from the agency or other person to which they were made.
ARTICLE IX
SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION
9.1. Survival of Representations. All representations, warranties
and agreements made by PLD or News America in this Agreement shall survive the
Closing until one (1) year after the Closing.
9.2. Statements as Representations. PLD's Written Disclosure
Materials and any statements contained herein made by News America shall be
deemed representations and warranties within the meaning of Section 9.1 hereof.
9.3. PLD's Indemnification of News America. Subject to the
conditions of this Article VIII, PLD hereby agrees that it shall indemnify,
defend and hold harmless News America and any parent, subsidiary and affiliate
of News America (collectively, the "News America Group") from and against all
demands, claims, actions or causes of action, assessments, losses, damages,
liabilities, costs and expenses, including, without limitation, interest,
penalties and attorneys' fees and expenses (collectively, "Damages"), asserted
against, resulting to, imposed upon or incurred by any of News America Group,
directly or indirectly, arising out of or resulting from a breach of any
representation, warranty or agreement of PLD contained in or made pursuant to
this Agreement or any facts or circumstances constituting such a breach
(collectively, "News America's Indemnifiable Claims"); provided, however, that
the indemnification obligation of PLD with respect to any
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inaccuracy in any of the representations or warranties made by PLD in this
Agreement shall arise only in the event that PLD had knowledge of such
inaccuracy on or before the Closing; provided, further, that for purposes of
this Agreement "knowledge" shall mean knowledge on the part of any member of
management of PLD or knowledge of such circumstances that would lead a person
not negligent to investigate and, more likely than not, obtain actual knowledge.
9.4. News America's Indemnification of PLD. Subject to the
conditions of this Article VIII, News America hereby agrees that it shall
indemnify, defend and hold harmless PLD and any parent, subsidiary and affiliate
of PLD (collectively, the "PLD Group") from and against all Damages asserted
against, resulting to, imposed upon or incurred by any of the PLD Group,
directly or indirectly, arising out of or resulting from a breach of any
representation, warranty or agreement of News America contained in or made
pursuant to this Agreement or any facts or circumstances constituting such a
breach ("PLD Indemnifiable Claims"; PLD's Indemnifiable Claims and News
America's Indemnifiable Claims are collectively referred to herein as the
"Indemnifiable Claims"); provided, however, that the indemnification obligation
of News America with respect to any inaccuracy in any of the representations or
warranties made by News America in this Agreement shall arise only in the event
that News America had knowledge of such inaccuracy on or before the Closing;
provided, further, that for purposes of this Agreement "knowledge" shall mean
knowledge on the part of any member of management of News America or knowledge
of such circumstances that would lead a person not negligent to investigate and,
more likely than not, obtain actual knowledge.
9.5. Conditions of Indemnification. The obligations and liabilities
of PLD under Section 9.3 or News America under Section 9.4, respectively, with
respect to Indemnifiable Claims resulting from the assertion of liability by
third parties shall be subject to the following terms and conditions:
(a) The member of the News America Group or the PLD Group, as
the case may be, asserting the existence of an Indemnifiable Claim (the
"Indemnified Party") will give notice of any such Indemnifiable Claim to the
party from whom Indemnification is sought (the "Indemnifying Party"), and the
Indemnifying Party shall undertake the defense thereof by representation of
their choosing, and will consult with the Indemnified Party concerning such
defense during the course thereof.
(b) In the event that the Indemnifying Party within a
reasonable time after notice of any Indemnifiable Claim, fails to defend, the
Indemnified Party against which such Indemnifiable Claim has been asserted will
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(upon further notice to the Indemnifying Party) have the right to undertake the
defense, compromise or settlement of such Indemnifiable Claim on behalf of and
for the account and risk of the Indemnifying Party.
(c) Anything in this Section 9.5 to the contrary
notwithstanding, (i) if there is a reasonable probability that an Indemnifiable
Claim may materially and adversely affect the Indemnified Party other than as a
result of money damages or other money payments, the Indemnified Party shall
have the right to defend, compromise or settle such Indemnifiable Claim, and
(ii) the Indemnifying Party shall not, without the Indemnified Party written
consent, settle or compromise any Indemnifiable Claim or consent to entry of any
judgment in respect thereof, unless (A) the Indemnifying Party delivers to the
Indemnified Party in advance its written agreement satisfactory to the
Indemnified Party which provides that amounts paid and incurred or to be
incurred by the Indemnified Party in connection with such Indemnifiable Claim
shall be repaid promptly by the Indemnifying Party to the Indemnified Party
(subject to the limitations of this Article VIII), and (B) such settlement,
compromise or consent includes as an unconditional term thereof the giving by
the claimant or the plaintiff to the Indemnified Party and/or such member, as
the case may be, a release from all liability in respect to such Indemnifiable
Claim.
9.6. Cushion. The provisions for indemnity contained in Section 9.3
and Section 9.4 hereof shall only be effective with respect to an Indemnifiable
Claim (or, if more than one Indemnifiable Claim is asserted, with respect to all
Indemnifiable Claims) to the extent the amount (or aggregate amount, in the case
of more than one Indemnifiable Claim) of damages sustained in connection
therewith exceeds One Hundred Thousand dollars (USD$100,000), but to the extent
that the amount or amounts of damages in respect of Indemnifiable Claims exceeds
$100,000, the indemnity provisions hereunder shall apply to all such damages,
without regard to the $100,000 level.
9.7. Limitation of Liability. Anything in this Agreement to the
contrary notwithstanding, the liability of an Indemnifying Party to indemnify an
Indemnified Party against any damages sustained in connection with any
Indemnifiable Claim shall be limited to Indemnifiable Claims as to which written
notice shall have been given to the Indemnifying Party on or prior to the
earlier of the first anniversary date of the Closing Date or public release of
audited financials of PLD covering the fiscal year ended December 31, 1998,
whether or not the Indemnified Party has actually settled or incurred any
expense with respect to such Damages. Furthermore, anything in this Agreement to
the contrary notwithstanding, if such Indemnifiable Claim relates to a
representation or warranty made by (a) News
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America, the amount of liability shall be limited to $100,000 and (b) PLD, the
amount of liability shall be converted to PLD Common Stock and issued to News
America at the same rate/value as the PLD shares issued to News America by PLD
pursuant to Section 1.1 hereof, provided that the amount of liability of PLD
shall be limited to twenty million U.S. dollars ($20,000,000). In the event that
the rules of any stock exchange upon which the PLD Common Stock is then traded,
or any interdealer quotation system upon which quotations for the PLD Common
Stock are then available, shall not permit the issuance of PLD Common Stock
without either the approval of shareholders of PLD or the receipt of some other
approval, then in satisfaction of its liability to indemnify pursuant to this
Article IX, PLD shall issue the maximum number of shares of PLD Common Stock as
can then be issued in accordance with such rules, and shall issue in respect of
the remainder of such liability shares of preferred stock having such terms and
conditions as may be agreed upon between News America and PLD, such preferred
stock to be convertible into PLD Common Stock at such time as any requisite
shareholder or other approval is obtained.
9.8. Remedies Cumulative. The remedies provided herein shall be
cumulative and shall not preclude the assertion by News America or PLD of any
other rights or the seeking of any other remedies against the other party, as
the case may be.
9.9. Assignment of Certain Representations, Warranties and
Indemnification Obligations. In lieu of making any representations or warranties
with respect to the Holdings Shares being sold to and exchange with PLD
hereunder, News America hereby assigns to the benefit of PLD, its successors and
assigns, the representations, warranties and agreements made by C&W in the Stock
Purchase Agreement with respect to the Holdings Shares and its indemnification
obligations under such agreement, and agrees that PLD has the right to rely upon
such representations, warranties and agreements, and enforce such
indemnification obligations, as fully as if it were a party to the Stock
Purchase Agreement. PLD acknowledges and agrees that its sole recourse with
respect to the Holdings Shares is to seek indemnification from C&W with respect
thereto and further agrees that News America shall have no liability therefor.
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ARTICLE X
MISCELLANEOUS PROVISIONS
10.1. Amendment and Modification. Subject to applicable law, this
Agreement may be amended, modified or supplemented only by written agreement
signed by all of the parties hereto.
10.2. Waiver of Compliance; Consents. Except as otherwise provided
in this Agreement, any failure of any of the parties to comply with any
obligation, covenant, agreement or condition herein may be waived by the party
entitled to the benefits thereof only by a written instrument signed by the
party granting such waiver, but such waiver shall not operate as a waiver of, or
estoppel with respect to, any subsequent or other failure.
10.3. Notices. All notices and other communications hereunder shall
be in writing and shall be deemed effectively given upon personal delivery to
the party to be notified, on the next Business Day after delivery to a
recognized overnight courier service, upon confirmation of receipt of a
facsimile transmission, or five days after deposit with the United States Post
Office, by registered or certified mail (return receipt requested), postage
prepaid, to the parties at the following addresses (or at such other address for
a party as shall be specified by like notice; provided that notices of a change
of address shall be effective only upon receipt thereof):
If to PLD, to:
PLD Telekom Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇
If to News America, to:
News America Incorporated
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
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Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: General Counsel
(with a copy to:
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.)
10.4. Assignment. This Agreement and all of the provisions hereof
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns, but neither this Agreement nor any
of the rights, interests or obligations hereunder shall be assigned by any party
hereto, including by operation of law without the prior written consent of the
other party, nor is this Agreement intended to confer upon any other person
except the parties hereto any rights or remedies hereunder; provided, however,
that (a) PLD will have the right, at any time at or prior to the Closing, to
designate in writing, in accordance with applicable law, one or more of its
Affiliates to purchase, in whole or in part, the Holdings Shares on the terms
set out in this Agreement, and PLD shall remain jointly and severally liable
with its designee(s) under this Agreement following such designation, (b) News
America will have the right, at any time at or prior to the Closing, to
designate in writing, in accordance with applicable law, one or more of its
affiliates to purchase, in whole or in part, the New PLD Shares on the terms set
out in this Agreement, and News America shall remain jointly and severally
liable with its designee(s) under this Agreement following such designation and
(c) News America shall have the right, at its sole discretion, to assign to ZAO
LogoVAZ ("LogoVAZ") its rights to purchase one-half of the New PLD Shares (and,
if such rights are exercised, such rights shall be exercised by News America and
LogoVAZ concurrently as to the entire portion of the New PLD Shares); provided,
that it shall be a condition to any assignment under clauses (b) or (c) hereof
that the assignee represent and warrant to PLD as to the matters set forth in
Section 4.6, and otherwise agrees to be bound by the terms of this Agreement as
if such assignee had been a party to this Agreement.
10.5. Confidentiality. Each of the Parties hereto will hold, and
will use its reasonable, good faith efforts to cause its respective
shareholders, partners,
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members, directors, officers, employees, accountants, counsel, consultants,
agents and financial or other advisors (collectively "Agents") to hold, in
confidence all information (whether oral or written), including this Agreement
and the documents contemplated herein, concerning the transactions contemplated
by this Agreement furnished to such Party by or on behalf of any other Party in
connection with such transactions, unless legally compelled (by deposition,
interrogatory, request for documents, subpoena, civil investigative demand or
similar process, or by order of a court or tribunal of competent jurisdiction,
or in order to comply with applicable rules or requirements of any stock
exchange, government department or agency or other regulatory authority, or by
requirements of any securities law or regulation or other legal requirement) to
disclose any such information or documents, and except to the extent that such
information or documents can be shown to have been (a) previously known on a
nonconfidential basis by such Party, (b) in the public domain through no fault
of such Party or (c) acquired by such Party on a nonconfidential basis from
sources not known by such Party to be bound by any obligation of confidentiality
in relation thereto. Notwithstanding the foregoing provisions of this Section
10.5, each Party may disclose such information to its Agents in connection with
the transactions contemplated by this Agreement or any of the other ancillary
Agreements so long as such Agents are informed by such Party of the confidential
nature of such information and are required by such Party to treat such
information confidentially, and to certain governmental agencies in connection
with the procurement of the governmental authorizations contemplated by this
Agreement. The obligation of each Party to hold any such information in
confidence shall be satisfied if such Party exercises the same care with respect
to such information as it would take to preserve the confidentiality of its own
similar information. If this Agreement is terminated, each Party will, and will
use its reasonable, good faith efforts to cause its respective Agents, to
destroy or deliver to the other Party, upon request, all documents and other
materials, and all copies thereof, obtained by such Party or on its behalf from
the other Party hereto in connection with this Agreement that are subject to
such confidence.
10.6. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York (regardless of
the laws that might otherwise govern under applicable New York principles of
conflicts of law) as to all matters, including but not limited to matters of
validity, construction, effect, performance and remedies.
10.7. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
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10.8. Interpretation. The article and section headings contained in
this Agreement are solely for the purpose of reference, are not part of the
agreement of the parties and shall not in any way affect the meaning or
interpretation of this Agreement. As used in this Agreement, (a) the term
"person" shall mean and include an individual, a partnership, a joint venture, a
corporation, a trust, an unincorporated organization and a governmental entity
or any department or agency thereof, (b) the term "subsidiary" when used in
reference to any other person shall mean any corporation of which outstanding
securities having ordinary voting power to elect a majority of the Board of
Directors of such corporation are owned directly or indirectly by such other
person and (c) the terms "affiliate" and "parent" shall have the meanings set
forth in Rule 12b-2 of the Exchange Act.
10.9. Entire Agreement. This Agreement, including the documents,
schedules and certificates referred to herein, embody the entire agreement and
understanding of the parties hereto in respect of the transactions contemplated
by this Agreement. There are no restrictions, promises, representations,
warranties, covenants or undertakings, other than those expressly set forth or
referred to herein or therein. This Agreement supersedes all prior agreements
and understandings between the parties with respect to such transactions.
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IN WITNESS WHEREOF, PLD and News America have caused this agreement
to be signed by their respective duly authorized officers as of the date first
above written.
NEWS AMERICA INCORPORATED
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
---------------
Name: ▇▇▇▇ ▇▇▇▇▇▇
Title:
PLD TELEKOM INC.
By: /s/ ▇▇▇▇▇ ▇.▇. ▇▇▇▇
-------------------
Name: ▇▇▇▇▇ ▇.▇. ▇▇▇▇
Title: President and Chief
Executive Officer
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PLD TELEKOM INC.
SCHEDULES TO
ASSET EXCHANGE AGREEMENT, DATED APRIL 19, ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇. ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
INCORPORATED
SCHEDULE 3.1 JURISDICTION IN WHICH PLD TELEKOM INC. IS QUALIFIED TO DO BUSINESS
AS A FOREIGN CORPORATION
State of New York
SCHEDULE 3.2 CAPITALIZATION OF PLD TELEKOM INC. AND PETERSTAR COMPANY LIMITED
PLD Telekom Inc. - 33,324,290 shares of Common Stock issued and outstanding
PeterStar Company Limited - 40,000,000 ordinary shares issued and outstanding
Schedule of outstanding warrants and options to purchase shares of PLD Common
Stock is attached. In addition, the terms of the Company's 12% Series A and
Series B Revolving Credit Notes due 1998 provide for the issuance, in certain
specified circumstances, of additional and/or default warrants, all as more
fully described in PLD Telekom Inc.'s Annual Report on Form 10-K for the year
ended December 31, 1997.
On April 19, 1998, the Board of Directors of PLD Telekom Inc. granted options in
respect of 750,000 shares of Common Stock to certain officers of PLD, as
discussed and agreed previously with News America Incorporated.
In connection with the consent solicitation made by PLD Telekom Inc., and
completed in March 1998, relating to PLD's outstanding 14% Senior Discount Notes
due 2004 (the "Senior Notes") and 9% Convertible Subordinated Discount Notes due
2006 (the "Convertible Notes"), PLD Telekom Inc. issued to all consenting
bondholders, warrants to purchase shares of Common Stock. Specifically, PLD has
issued, effective March 31, 1998, (i) 123,000 warrants to purchase 1.8 shares of
Common Stock at an exercise price of $6.90 per share to the holders of the
Senior Notes and (ii) 22,700 warrants to purchase 2 shares of Common Stock at an
exercise price of $6.90 per share to the holders of the Convertible Notes. Each
such warrant has a term of five years.
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In connection with PLD's acquisition of Ultra Pass Systems Limited, PLD has
entered into a Share Purchase Agreement pursuant to which it has agreed to issue
to the shareholders of Ultra Pass shares of PLD Common Stock having an aggregate
market value of $1,750,000. The transaction is expected to close in late April
or May 1998.
As described in greater detail in PLD's Annual Report on Form 10-K for the year
ended December 31, 1997, in connection with the acquisition of additional
interests in Technocom Limited in November 1997, PLD Telekom Inc. entered into
revised put and call agreements with the minority shareholders of Technocom
(Elite International Limited and Plicom Limited) regarding put and call option
arrangements for their remaining minority stakes.
The organizational documents of PeterStar Company Limited contain certain
pre-emptive rights in the case of transfers of the ordinary shares of PeterStar.
Such pre-emptive rights are not triggered by the contemplated transactions since
no shares of PeterStar are being transferred.
SCHEDULE 3.4 CONSENTS AND APPROVALS
Filing under ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Anti-Trust Improvement Act of 1976
Filing with The Nasdaq Stock Market of a Notification Form for Listing of
Additional Shares with respect to the New PLD Shares
Approval by shareholders of PLD Telekom Inc., if required by Nasdaq
If shareholder approval is required, the filing of preliminary and definitive
proxy statements with the Securities and Exchange Commission
If required, approval from the holders of PLD's (i) $123,000,000 14% Senior
Discount Notes due 2004, (ii) $26,000,000 9% Convertible Subordinated Notes due
2006 and (iii) $12,400,000 12% Series A Revolving Credit Notes due 1998 and
$3,100,000 12% Series B Revolving Credit Notes due 1998
SCHEDULE 3.7 UNDISCLOSED LIABILITIES
None
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SCHEDULE 3.8 ABSENCE OF CERTAIN CHANGES OR EVENTS
None
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SCHEDULE 3.9 WRITTEN DISCLOSURE MATERIALS
The following Written Disclosure Materials have been furnished to News America:
PLD TELEKOM
PLD 10-K for the year ended December 31, 1997
PLD Certificate of Incorporation, dated February 28, 1997.
PLD Bylaws, dated [N/A].
PLD Prospectus for 1994 Offering of 15,750,000 Common Shares.
PLD Offering Memorandum for $123,000,000 14% Senior Discount Notes due 2004
and Warrants to purchase 4,182,000 Common Shares and $26,500,000 9%
Convertible Subordinated Notes due 2006, dated May 24,1996.
Indenture of 14% Senior Notes due 2004 by and among PLD, NWE Capital, PLD
Asset Leasing, PLD Capital, Baltic Communications, Wireless Technology
Corporations and The Bank of New York, dated May 31, 1996.
Indenture of 9% Convertible Subordinated Note due 2006 by and among PLD,
NWE Capital, PLD Asset Leasing, PLD Capital, Baltic Communications,
Wireless Technology Corporations and The Bank of New York, dated May 31,
1996.
Consent Solicitation Statement from PLD to the Holders of the 14% Senior
Discount Notes and the 9% Convertible Subordinated Notes, dated March 4,
1998.
Subscription Agreement between PLD and Navona Communications, dated March
3, 1994.
Schedule of PLD Shareholder Ownership as at December 31, 1997.
Notice of Tax Assessment for PLD, dated February 6, 1998.
Schedule of Outstanding PLD Indebtedness as at December 31, 1997.
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Equipment Supply Contract between PLD and Nokia Telecommunications, dated
July 31, 1997.
Equipment Supply Contract between PLD and Tadiran Telecommunications, dated
July 7, 1997.
Put and Call Option Agreement between PLD and Elite International, dated
December 28, 1994.
Amended and Restated Put and Call option Agreement between PLD and Elite
International, dated November 26, 1997.
Put and Call Option Agreement between PLD and Plicom Limited, dated
December 28, 1994.
Amendment to Put and Call Option Agreement between PLD and Plicom Limited,
dated November 26, 1997
Amended and Restated Service Agreement between PLD and ▇▇▇▇▇ ▇.▇. ▇▇▇▇,
dated August 1, 1997.
Service Agreement between PLD and ▇▇▇▇ ▇▇▇▇▇▇, as amended, dated July 30,
1997.
Amended and Restated Service Agreement between PLD and ▇▇▇▇▇ ▇▇▇▇▇▇▇, dated
August 1, 1997.
BALTIC COMMUNICATIONS LIMITED
Charter of the Closed Joint Stock Company Baltic Communications Limited,
dated June 20, 1996.
TELEPORT - TP
Charter of the Closed Joint Stock Company Teleport-TP, dated May 28, 1996.
Shareholders Agreement with Intertelekom, dated [N/A] (Russian Only)
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Supply Contract (152-28) between Teleport and Rostelecom, dated April 28,
1997.
Service Agreement between Intelstat and JSC Teleport-TP, dated October 28,
1996.
BECET
Founding Agreement of Joint Stock Company of Closed Type BECET
International, dated January 14, 1994
Charter Agreement of Joint Stock Company of Closed Type BECET
International, dated January 14, 1994.
Minutes of First BECET Stockholders Meeting, dated January 14, 1994.
Founding Agreement of Joint Stock Company of Closed Type BECET
International, dated March 5, 1996, and Amendment thereto, dated November
27, 1996.
Charter Agreement of Joint Stock Company of Closed Type BECET
International, dated March 5, 1996, and Amendment thereto, dated November
7, 1996.
Joint Venture Agreement between Wireless Technology Corporations, Wireless
Telecommunications Network and BECET, dated December 13, 1993.
Kazakhstan License (Number 61) issued to BECET February 4, 1994.
Equipment Supply Contract between BECET and Motorola, Inc, dated May 4,
1994.
Interconnection Agreement between BECET and Ministry of Communications of
Kazakhstan, dated February 4, 1994, as amended and superseded by Agreement
between Kazakhtelecom and BECET, dated February 28, 1996, and Protocol #1
thereto, dated October 9, 1996.
Installation and Optimization Services Agreement between BECET and
Motorola, dated May 4, 1994.
Sample of BECET International Cellular Service Contract.
TECHNOCOM
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Technocom Memorandum of Association, dated February 7, 1995.
Technocom Articles of Association, dated June 12, 1996.
Technocom Subscription and Shareholders Agreement, dated December 28, 1994,
as amended, November 26, 1997.
Share Purchase Agreement among Plicom, PLD, Technocom and ▇▇▇▇ ▇▇▇▇▇▇,
dated November 26, 1997.
Share Purchase Agreement among Elite International, Technocom and PLD,
dated November 26, 1997.
License (2463) issued to MTR-Sviaz, dated June 5, 1994.
Equipment Purchase and Installation Contract between Technocom and
Scientific-Atlanta, Inc., dated November 16, 1995.
PETERSTAR
Agreement to Create PeterStar, dated March 9, 1992.
Amendments to the Foundation Agreement relating to PeterStar, dated October
20, 1994.
Cooperation Agreement between PeterStar and Petersburg Telephone Network,
dated January 4, 1995.
Cooperation Agreement between PeterStar and Petersburg Telephone Network,
dated August 29, 1997.
Consulting Service Agreement between PeterStar and NWE Capital, dated
January 1, 1997.
Equipment Supply Contract (#96005) between St. Petersburg Telephone Network
and Lucent Technologies, dated September 18, 1996.
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Equipment Supply Contract (#96006) between St. Petersburg Telephone Network
and Lucent Technologies, dated September 18, 1996.
Equipment Supply Contract between PeterStar and Lucent Technologies dated
November 13, 1997, and Supplementary Agreement No. 1 thereto, dated
November 13, 1997.
Equipment Supply Contract between PeterStar and Lucent Technologies, dated
November 21, 1997.
Service Agreement between PeterStar and Lucent Technologies, dated November
13, 1997.
Service Agreement between PeterStar and Lucent Technologies, dated November
21, 1997.
Agreement on Special Bank Accounts between PeterStar, St. Petersburg
Telephone Network and BNP-Dresdner Bank, dated [N/A].
Pledge Agreement among PeterStar and Lucent Technologies, dated December
20, 1996.
Price Agreement between PeterStar and St. Petersburg Telephone Network,
dated [N/A].
Equipment Sale and Purchase Agreement by and among PeterStar and St.
Petersburg Telephone Network, dated [N/A].
SCHEDULE 3.10 LEGAL PROCEEDINGS, ETC.
None
SCHEDULE 3.11 PERMITS
None
SCHEDULE 5.1 PRE-CLOSING ACTIONS
None
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