-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, C3PTkc2VW2FX6nmmKFF64A+cySpRw+Tv79U/D3OWqu91cykQ8zEgaSUjnBO8l9Tf l8CVPjHeu6Y6lZweozywAA== 0001005150-99-000019.txt : 19990112 0001005150-99-000019.hdr.sgml : 19990112 ACCESSION NUMBER: 0001005150-99-000019 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 5 FILED AS OF DATE: 19990111 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: GILAT SATELLITE NETWORKS LTD CENTRAL INDEX KEY: 0000897322 STANDARD INDUSTRIAL CLASSIFICATION: RADIO & TV BROADCASTING & COMMUNICATIONS EQUIPMENT [3663] IRS NUMBER: 000000000 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: SEC FILE NUMBER: 005-49455 FILM NUMBER: 99504336 BUSINESS ADDRESS: STREET 1: GILAT HOUSE YEGIA KAPAYIM STREET STREET 2: DANIV PARK CITY: KIRYAT ARYE PETAH TI STATE: L3 BUSINESS PHONE: 7037349401 MAIL ADDRESS: STREET 1: GILAT HOUSE YEGIA KAPAYIM STREET STREET 2: DANIV PARK CITY: KIRYAT ARYE PETAH TI STATE: L3 ZIP: 00000 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: GE AMERICAN COMMUNICATIONS INC CENTRAL INDEX KEY: 0001076479 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 132849985 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: FOUR RESEARCH WAY CITY: PRINCETON STATE: NJ ZIP: 08540 BUSINESS PHONE: 6099874000 MAIL ADDRESS: STREET 1: FOUR RESEARCH WAY CITY: PRINCETON STATE: NJ ZIP: 08540 SC 13D 1 SCHEDULE 13D UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 SCHEDULE 13D UNDER THE SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. )1 GILAT SATELLITE NETWORKS LTD. - -------------------------------------------------------------------------------- (NAME OF ISSUER) ORDINARY SHARES, PAR VALUE NIS .01 PER SHARE - -------------------------------------------------------------------------------- (TITLE OF CLASS OF SECURITIES) M51474100 - -------------------------------------------------------------------------------- (CUSIP NUMBER) PHILIP V. OTERO, FOUR RESEARCH WAY, PRINCETON, NJ 08540 (609) 987-4013 - -------------------------------------------------------------------------------- (NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO RECEIVE NOTICES AND COMMUNICATIONS) DECEMBER 31, 1998 - -------------------------------------------------------------------------------- (DATE OF EVENT WHICH REQUIRES FILING OF THIS STATEMENT) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(b)(3) or (4), check the following box. [ ] 1 The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). CUSIP NO. M51474100 PAGE 2 OF 29 --------- --- ---- SCHEDULE 13D 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON GE AMERICAN COMMUNICATIONS, INC. IRS # 13-2849985 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / / (b) /X/ 3 SEC USE ONLY 4 SOURCE OF FUNDS* SC 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) /X/ 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware 7 SOLE VOTING POWER 5,000,000 NUMBER OF SHARES 8 SHARED VOTING POWER BENEFICIALLY -0- OWNED BY EACH 9 SOLE DISPOSITIVE POWER REPORTING 5,000,000 PERSON WITH 10 SHARED DISPOSITIVE POWER -0- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 5,000,000 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* / / 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 31% 14 TYPE OF REPORTING PERSON* CO *SEE INSTRUCTIONS BEFORE FILLING OUT! CUSIP NO. M51474100 PAGE 3 OF 29 --------- --- ---- SCHEDULE 13D 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON GE SUBSIDIARY, INC. 22 IRS # 14-1682339 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / / (b) /X/ 3 SEC USE ONLY 4 SOURCE OF FUNDS* Not applicable 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) /X/ 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware 7 SOLE VOTING POWER Disclaimed. See 11 below NUMBER OF SHARES 8 SHARED VOTING POWER BENEFICIALLY -0- OWNED BY EACH 9 SOLE DISPOSITIVE POWER REPORTING Disclaimed. See 11 below PERSON WITH 10 SHARED DISPOSITIVE POWER -0- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON Beneficial ownership of all Ordinary Shares is disclaimed by GE Subsidiary, Inc. 22 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* / / Not applicable 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) Disclaimed. See 11 above. 14 TYPE OF REPORTING PERSON* CO *SEE INSTRUCTIONS BEFORE FILLING OUT! CUSIP NO. M51474100 PAGE 4 OF 29 --------- --- ---- SCHEDULE 13D 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON GENERAL ELECTRIC CAPITAL CORPORATION IRS # 13-1500700 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / / (b) /X/ 3 SEC USE ONLY 4 SOURCE OF FUNDS* Not applicable 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) /X/ 6 CITIZENSHIP OR PLACE OF ORGANIZATION New York 7 SOLE VOTING POWER Disclaimed. See 11 below NUMBER OF SHARES 8 SHARED VOTING POWER BENEFICIALLY -0- OWNED BY EACH 9 SOLE DISPOSITIVE POWER REPORTING Disclaimed. See 11 below. PERSON WITH 10 SHARED DISPOSITIVE POWER -0- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON Beneficial ownership of all Ordinary Shares is disclaimed by General Electric Capital Corporation 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* / / Not applicable. 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) Disclaimed. See 11 above. 14 TYPE OF REPORTING PERSON* CO *SEE INSTRUCTIONS BEFORE FILLING OUT! CUSIP NO. M51474100 PAGE 5 OF 29 --------- --- ---- SCHEDULE 13D 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON GENERAL ELECTRIC CAPITAL SERVICES, INC. IRS # 06-11095031 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / / (b) /X/ 3 SEC USE ONLY 4 SOURCE OF FUNDS* Not applicable 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) /X/ 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware 7 SOLE VOTING POWER Disclaimed. See 11 below NUMBER OF SHARES 8 SHARED VOTING POWER BENEFICIALLY -0- OWNED BY EACH 9 SOLE DISPOSITIVE POWER REPORTING Disclaimed. See 11 below PERSON WITH 10 SHARED DISPOSITIVE POWER -0- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON Beneficial ownership of all Ordinary Shares is disclaimed by General Electric Capital Services, Inc. 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* / / Not applicable 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) Disclaimed. See 11 above. 14 TYPE OF REPORTING PERSON* CO *SEE INSTRUCTIONS BEFORE FILLING OUT! CUSIP NO. M51474100 PAGE 6 OF 29 --------- --- ---- SCHEDULE 13D 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON GENERAL ELECTRIC COMPANY IRS # 14-0089340 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / / (b) /X/ 3 SEC USE ONLY 4 SOURCE OF FUNDS* Not applicable 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) /X/ 6 CITIZENSHIP OR PLACE OF ORGANIZATION New York 7 SOLE VOTING POWER Disclaimed. See 11 below NUMBER OF SHARES 8 SHARED VOTING POWER BENEFICIALLY -0- OWNED BY EACH 9 SOLE DISPOSITIVE POWER REPORTING Disclaimed. See 11 below PERSON WITH 10 SHARED DISPOSITIVE POWER -0- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON Beneficial ownership of all Ordinary Shares is disclaimed by General Electric Company 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* / / Not applicable 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) Disclaimed. See 11 above. 14 TYPE OF REPORTING PERSON* CO *SEE INSTRUCTIONS BEFORE FILLING OUT! CUSIP NO. M51474100 PAGE 7 OF 29 --------- --- ---- ITEM 1. SECURITY AND ISSUER This Schedule 13D (this "Statement") relates to the Ordinary Shares, par value NIS .01 per share (the "Ordinary Shares"), of Gilat Satellite Networks Ltd., a corporation organized under the laws of Israel (the "Company" or "Gilat"), the principal executive offices of which are located at Yegia Kapayim St., Kyriat Arye, Petah Tikva 49130, Israel. ITEM 2. IDENTITY AND BACKGROUND (a) - (c). This Statement is being filed by GE American Communications, Inc. ("GE Americom" or the "Reporting Person"), for and on behalf of itself, GE Subsidiary, Inc. 22 ("GES 22"), General Electric Capital Corporation ("GECC"), General Electric Capital Services, Inc. ("GECS") and General Electric Company ("GE," and together with GE Americom, GES 22, GECC and GECS, the "Filing Persons"). The agreement among each of the Filing Persons that this Statement be filed on behalf of each of them is attached hereto as Exhibit 1. GE Americom is a majority-owned (directly and indirectly) subsidiary of GES 22; GES 22 is a wholly-owned subsidiary of GECC; GECC is a wholly-owned subsidiary of GECS; and GECS is a wholly-owned subsidiary of GE. GE Americom is a Delaware corporation. GE Americom engages in providing satellite communications services through its own fleet of spacecraft and maintains its principal executive offices at Four Research Way, Princeton, NJ 08540. GES 22 is a Delaware corporation. GES 22 is a holding company for various other GE companies and maintains its principal executive offices at Four Research Way, Princeton, NJ 08540. GECC is a New York corporation. GECC, together with its subsidiaries, engages in financing services that include lending, equipment management services and annuities and maintains its principal executive offices at 260 Long Ridge Road, Stamford, Connecticut 06927. GECS is a Delaware corporation. GECS owns two principal subsidiaries which, together with their affiliates, constitute GE's principal financial services business. GECS maintains its principal executive offices at 260 Long Ridge Road, Stamford, Connecticut 06927. GE is a New York corporation. GE engages in providing a wide variety of industrial, commercial and consumer products and services. GE maintains its principal executive offices at 3135 Easton Turnpike, Fairfield, Connecticut 06431. For the information required herein with respect to the identity and background of each officer and director of the Filing Persons, see Schedules I, II, III, IV and V attached hereto and hereby incorporated herein. The information required herein with respect to the respective executive officers and directors of the Filing Persons is to the best knowledge of the Filing Persons. If subsequent to the date of this Statement additional information is received with respect to such individuals which would cause a material change in the information contain herein, an amendment to this Statement will be filed that will set forth such change in information. (d) and (e). Except as set forth in Schedule VI, which is hereby incorporated herein, during the last five years, none of the Filing Persons, nor, to the best of their knowledge, any of the directors or executive officers, has been (i) convicted in a criminal proceeding (excluding traffic violations and similar misdemeanors) or (ii) a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or a finding of any violation with respect to such laws. (f). All of the executive officers and directors of the Filing Persons are U.S. citizens, except that (i) Nigel D.T. Andrews, a GECS director and executive officer and a GECC director, is a citizen of the United Kingdom, (ii) Paolo Fresco, a director of GE, is an Italian citizen, (iii) Claudio X. Gonzalez, a director of GE, is a citizen of Mexico, (iv) Kaj Ahlmann, an executive officer and a CUSIP NO. M51474100 PAGE 8 OF 29 --------- --- ---- director of GECS, is a citizen of Denmark, (v) Andrea Jung, a director of GE, is a citizen of Canada and (vi) G.S. Malm, the senior vice president-Asia of GE, is a citizen of Sweden. ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION GE Americom acquired 5,000,000 Ordinary Shares from the Company in series of transactions, including (1) a merger (the "Merger") in which GE Capital Spacenet Services, Inc., a Delaware corporation ("Spacenet"), previously owned by GE Americom, was acquired by the Company, pursuant to an Agreement and Plan of Merger, dated as of September 25, 1998, by and among GE Americom, Spacenet, Gilat, and Jonah Acquisition Corp., a Delaware corporation and a wholly owned subsidiary of Gilat ("Jonah") (the "Merger Agreement"); (2) the licensing of a certain trademark to Gilat, pursuant to a Trademark Agreement, dated as of December 31, 1998, between an affiliate of GE Americom and Gilat; (3) the sale of the stock of GE Capital Spacenet Services - Europe GmbH, a company organized under the laws of Germany ("GE GmbH") to the Company, pursuant to a Stock Purchase Agreement, dated as of September 25, 1998, between an affiliate of GE Americom and Gilat; and, (4) the sale of the stock of Spacenet Services B.V., a company organized under the laws of the Netherlands ("GE BV") to the Company, pursuant to a Stock Purchase Agreement, dated as of September 25, 1998, between an affiliate of GE Americom and Gilat. ITEM 4. PURPOSE OF TRANSACTION The Reporting Person has acquired Ordinary Shares in connection with the sale of Spacenet, GE GmbH and GE BV to the Company in the Merger, the stock purchases listed in Item 3 above and other related transactions. Depending upon market conditions and other factors, the current intention of the Reporting Person is to maintain its ownership level at its current level. The Reporting Person, however, reserves the right to, and may in the future choose to, change its purpose with respect to its investment and take such actions as it deems appropriate in light of the circumstances including, without limitation, to dispose of all or a portion of the Ordinary Shares which it now owns or may hereafter acquire. The Reporting Person is entitled to receive additional Ordinary Shares from the Company, under a Non-Transferable Contingent Stock Right (the "Contingent Right"), dated as of December 31, 1998, between GE Americom, Gilat and certain other parties, including particularly as a result of the book value of Spacenet (as adjusted pursuant to the Merger Agreement) at closing, certain post-closing sales of certain Spacenet products and/or services or under a specified contract between Spacenet and a customer and similar arrangements. The number of additional Ordinary Shares that the Reporting Person is entitled to receive as a result of these arrangements presently cannot be estimated. Under a Shareholders' Agreement by and among Yoel Gat, Amiram Levinberg, Joshua Levinberg, Shlomo Tirosh and Gideon Kaplan (collectively, the "Founders Group"), DIC Technology Holdings Ltd. and PEC Israel Economic Corporation (collectively, the "IDB Group") and GE Americom, on behalf of itself and its affiliates (the "GE Parties"), dated as of December 31, 1998 (the Founders Group, the IDB Group and the GE Parties being referred to collectively as the "Major Shareholders"), the GE Parties have the right to designate two (2) individuals as nominees for directors of Gilat. The Board of Directors of Gilat is currently comprised of seven (7) members. The GE Parties have not yet exercised this right. See Item 6 below for more information about the Shareholders' Agreement. Under the Shareholders' Agreement, the Reporting Person is restricted in its ability to purchase additional Ordinary Shares of Gilat and in its ability to dispose of Ordinary Shares for the next three (3) years as further described in Item 6 below. Except as otherwise set forth herein, none of the Filing Persons has any current plans or proposals which relate to or would result in the matters set forth in items (a) - (j) of Item 4 of Schedule 13D. ITEM 5. INTEREST IN SECURITIES OF THE ISSUER (a). As of the date of this report, the Reporting Person beneficially owns an aggregate of 5,000,000 Ordinary Shares of the Company which represents approximately 31% of the 16,132,224 Ordinary Shares of the Company outstanding as of December 31, 1998 (based on 11,132,224 shares outstanding on 11/1/98 as described on the proxy statement of the Company dated November 9, 1998). GES 22, GECC, GECS and GE disclaim beneficial ownership in any Ordinary Shares. CUSIP NO. M51474100 PAGE 9 OF 29 --------- --- ---- (b). GE Americom has sole power to vote and dispose of the Ordinary Shares. None of the Filing Persons, nor, to the best of their knowledge, any of their executive officers and directors, presently has the power to vote or to direct the vote or to dispose or direct the disposition of any of the securities which they may be deemed to beneficially own. (c). None of the Filing Persons, nor, to the best of their knowledge, any of their executive officers or directors, has effected any transactions in the securities of the Company in the past 60 days. (d). No person is known to have the power to direct the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, securities held by GE Americom except for GE Americom. (e). Not applicable. Neither the filing of the Statement or any amendment thereto, nor anything contained herein is intended as, or should be construed as, an admission that any Filing Person is the "beneficial owner" of any Ordinary Shares which any other Filing Person is deemed to beneficially own. ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER. Under the Shareholders' Agreement, the Major Shareholders (including the Reporting Person) have agreed to vote all of their Ordinary Shares in accordance with the recommendation of the Board of Directors of Gilat (except that no Major Shareholder shall be obligated by the Shareholders' Agreement to vote in accordance with the recommendations of the Board of Directors of Gilat to the extent that (i) such vote relates to a merger (which merger results in a Change of Control (as defined in the Shareholders' Agreement) or sale of all or substantially all of the Company or a reorganization or restructuring of the Company changing the rights of shareholders in a significant and adverse manner or a transaction with substantially similar results or (ii) such Major Shareholder in reasonable good faith determines that voting in accordance with such recommendation is directly and materially adverse to the interests of such Major Shareholder, solely in its capacity as a shareholder(s) of the Company (provided, that notwithstanding the preceding proviso, all of the Major Shareholders shall at all times be required to comply with all of the other terms of the Shareholders' Agreement)). In addition, for a period of three (3) years from the date of the Shareholders' Agreement, the Major Shareholders will vote their Ordinary Shares, and will direct their representatives on the Board of Directors of Gilat to vote, in favor of the retention in their respective offices of all senior officers of Gilat holding such offices as of the date of the Shareholders' Agreement. Under the Shareholders' Agreement, the GE Parties have agreed to certain "stand-still" provisions to be in effect during the term of such agreement, including restrictions on: (i) the acquisition (other than pursuant to the Merger Agreement and related agreements) of any of Gilat's assets, businesses or properties or any Ordinary Shares, or any securities convertible into, exchangeable for, or exercisable for Ordinary Shares, of Gilat if such acquisition of Ordinary Shares, securities convertible into, exchangeable for, or exercisable for Ordinary Shares would result in the GE Parties being the beneficial owners of more than thirty-three percent (33%) of the Ordinary Shares of Gilat then outstanding; provided, that in the event of a bona fide tender offer for at least 50% of the outstanding Ordinary Shares of Gilat by a party not affiliated with any of the Major Shareholders at a price in excess of the Market Price (as defined in the Shareholders' Agreement) of such Ordinary Shares immediately prior to the announcement of such tender offer, the GE Parties shall be free, during the pendency of such bona fide tender offer, to commence a tender offer for all of the outstanding Ordinary Shares or to acquire Ordinary Shares in the open market or otherwise notwithstanding this provision (i); and, (ii) the ability to take certain corporate actions, including, (a) solicit, initiate or participate in any "solicitation" of "proxies" or become a participant in any "election contest" (as such terms are defined in Regulation 14A under the Securities Exchange Act of 1934), (b) call, or in any way participate in a call for, any special or extraordinary meeting of shareholders of Gilat, (c) initiate or propose any shareholder proposal or participate in the making of, or solicit shareholders for the approval of, one or more shareholder proposals relating to the Ordinary Shares, (d) subject any of its Ordinary Shares to a voting trust or voting arrangement, (e) form or join or in any way participate in any group of Major Shareholders with respect to the Ordinary Shares otherwise than as a result of the Shareholders' Agreement, (f) solicit or propose to effect or negotiate any form of business combination, restructuring, recapitalization or other extraordinary transaction involving any change of control of the Company, (g) disclose or act upon any intention, plan or proposal with respect to the Ordinary Shares or the Company which is inconsistent with the terms of the Shareholders' Agreement, (h) seek election to or seek to place a representative or nominee on the CUSIP NO. M51474100 PAGE 10 OF 29 --------- ---- ---- Board of Directors of the Company or seek the removal of any member of the Board of Directors of the Company, in each case otherwise than in accordance with the terms of the Shareholders' Agreement, and (i) assist, advise, encourage or act in concert with any person with respect to, or seek to do, any of the foregoing. Under the Shareholders' Agreement, the GE Parties have agreed to obtain the prior written consent of each of the holders of a majority of Ordinary Shares then held by the Founders Group and the holders of a majority of the Ordinary Shares then held by the IDB Group prior to transferring any Ordinary Shares on or prior to a date three (3) years from the date of the Shareholders' Agreement, if as a result of such transfer, the GE Parties collectively own less than fifteen percent 15% of the then outstanding Ordinary Shares of Gilat; provided, however, that these restrictions shall cease to apply (1) on any Determination Date (as defined in the Shareholders' Agreement) with respect to the Unrestricted Percentage (as defined in the Shareholders' Agreement) of the Ordinary Shares held in the aggregate by the GE Parties on the date of the Shareholders' Agreement, (2) at any time that the GE Parties hold less than 5% of the then outstanding Ordinary Shares of the Company, (3) if at any date the Market Price of the Ordinary Shares is below $7.00 per share (adjusted to give effect to any change in the capitalization of the Company, including as a result of any stock split, stock dividend or stock combination), (4) under certain circumstances described in a Registration Rights Agreement, and (5)(a) in respect of a Change of Control Transaction (as defined in the Shareholders' Agreement) that has been approved by a majority of the directors of the Company with no material interest in the matter being considered (other than in their capacities as shareholders of the Company), or if at such time there are no such directors with no material interest in the matter being considered, a majority of the Board of Directors of the Company, unless the holders of a majority of the Ordinary Shares then held by the Founders Group and the holders of a majority of the Ordinary Shares then held by the IDB Group, respectively, each certify in writing in response to a reasonable request by GE that they intend, in connection with such Change of Control Transaction, to maintain the ownership of all or substantially all of the Ordinary Shares owned by them immediately prior to the commencement of such Change of Control Transaction and, solely in their capacities as shareholders of the Company, to oppose (to the extent such opposition is in compliance with the terms of the Shareholders' Agreement and applicable law) such Change of Control Transaction or (b) following any Change of Control Transaction, provided that no GE Parties participated in any manner in the relevant Change of Control Transaction. Under the Shareholders' Agreement, the GE Parties have also agreed to give advance notice to the Major Shareholders of any transfer of Ordinary Shares of Gilat held by any of the GE Parties. The Ordinary Shares beneficially owned by the Reporting Person were issued in a private placement and accordingly are subject to restrictions on transfer under applicable securities laws. The Reporting Person has been granted certain registration rights under a registration rights agreement, dated as of December 31, 1998, between GE Americom, Gilat and certain other parties. ITEM 7. MATERIAL TO BE FILED AS EXHIBITS. Schedule Description - -------- ----------- I. Directors and executive officers of GE Americom. II. Directors and executive officers of GES 22. III. Directors and executive officers of GECC. IV. Directors and executive officers of GECS. V. Directors and executive officers of GE. VI. Litigation Exhibit Description - ------- ----------- 1. Joint Filing Agreement. 2. Shareholders' Agreement dated as of December 31, 1998, by and among the Founders Group, the IDB Group and the GE Parties. 3. Non-Transferable Contingent Stock Right dated as of December 31, 1998, by and among GE Americom, Gilat and Jonah. 4. Registration Rights Agreement dated as of December 31, 1998, by and among GE Americom, Gilat and certain other parties. CUSIP NO. M51474100 PAGE 11 OF 29 --------- ---- ---- SIGNATURES After reasonable inquiry and to the best of its knowledge and belief, the undersigned certifies that the information set forth in this statement is true, complete and correct. Date: January 11, 1999 GE AMERICAN COMMUNICATIONS, INC. /s/ Philip V. Otero ----------------------------------- By: Philip V. Otero Title: Senior Vice President, Legal/Regulatory Operations Date: January 11, 1999 GE SUBSIDIARY, INC. 22 /s/ Philip V. Otero ----------------------------------- By: Philip V. Otero Title: Senior Vice President, Secretary Date: January 11, 1999 GENERAL ELECTRIC CAPITAL CORPORATION /s/ Robert E. Healing ----------------------------------- By: Robert E. Healing Title: Attorney-in-Fact Date: January 11, 1999 GENERAL ELECTRIC CAPITAL SERVICES, INC. /s/ Robert E. Healing ----------------------------------- By: Robert E. Healing Title: Attorney-in-Fact Date: January 11, 1999 GENERAL ELECTRIC COMPANY /s/ Robert E. Healing ----------------------------------- By: Robert E. Healing Title: Corporate Counsel CUSIP NO. M51474100 PAGE 12 OF 29 --------- ---- ---- SCHEDULE AND EXHIBIT INDEX Schedule Description - -------- ----------- I. Directors and executive officers of GE Americom. II. Directors and executive officers of GES 22. III. Directors and executive officers of GECC. IV. Directors and executive officers of GECS. V. Directors and executive officers of GE. VI. Litigation Exhibit Description - ------- ----------- 1. Joint Filing Agreement. 2. Shareholders' Agreement dated as of December 31, 1998, by and among the Founders Group, the IDB Group and the GE Parties. 3. Non-Transferable Contingent Stock Right dated as of December 31, 1998, by and among GE Americom, Gilat and Jonah. 4. Registration Rights Agreement dated as of December 31, 1998, by and among GE Americom, Gilat and certain other parties. CUSIP NO. M51474100 PAGE 13 OF 29 --------- ---- ---- Schedule I GE AMERICAN COMMUNICATIONS, INC. DIRECTORS AND EXECUTIVE OFFICERS
DIRECTORS: PRESENT PRESENT BUSINESS PRINCIPAL NAME ADDRESS OCCUPATION - ---- ------- ---------- John F. Connelly GE Americom Chairman, Chief Executive Four Research Way Officer and President, Princeton, NJ 08540 GE Americom John C. DiMarco, Jr. GE Americom Senior Vice President, Four Research Way Enterprise Systems Princeton, NJ 08540 GE Americom Phillip V. Otero GE Americom Senior Vice President, Four Research Way Legal/Regulatory Operations Princeton, NJ 08540 GE Americom EXECUTIVE OFFICERS: PRESENT PRESENT BUSINESS PRINCIPAL NAME ADDRESS OCCUPATION - ---- ------- ---------- John F. Connelly GE Americom Chairman, Chief Executive Four Research Way Officer and President, Princeton, NJ 08540 GE Americom John C. DiMarco, Jr. GE Americom Senior Vice President, Four Research Way Enterprise Systems Princeton, NJ 08540 GE Americom Phillip V. Otero GE Americom Senior Vice President, Four Research Way Legal/Regulatory Operations Princeton, NJ 08540 GE Americom Gregg A. Holst GE Americom Senior Vice President, Four Research Way Finance Operations Princeton, NJ 08540 GE Americom Walter H. Braun GE Americom Senior Vice President, Four Research Way General Manager, Engineering Princeton, NJ 08540 and Operations GE Americom Andreas M. Georghiou GE Americom Senior Vice President, Four Research Way Global Satellite Services Princeton, NJ 08540 GE Americom
CUSIP NO. M51474100 PAGE 14 OF 29 --------- ---- ----
PRESENT PRESENT BUSINESS PRINCIPAL NAME ADDRESS OCCUPATION - ---- ------- ---------- Dennis F. Helper GE Americom Senior Vice President, Four Research Way Human Resources Operations Princeton, NJ 08540 GE Americom Mary T. Stewart GECC Senior Vice President, Financing 260 Long Ridge Road and Business Development Stamford, CT 06927 GE Americom Emmett B. Hume GE Americom Senior Vice President, Four Research Way Marketing Princeton, NJ 08540 GE Americom Anders Johnson GE Americom Senior Vice President, Four Research Way Risk Management Princeton, NJ 08540 GE Americom Robert Phelan GE Americom Senior Vice President, Four Research Way Quality Programs Princeton, NJ 08540 GE Americom John Repko GE Americom Senior Vice President, Four Research Way Chief Information Officer Princeton, NJ 08540 GE Americom Richard A. Langhans GE Americom Vice President, Technology Four Research Way GE Americom Princeton, NJ 08540 George Monaster GE Americom Vice President, Four Research Way Marketing Communications Princeton, NJ 08540 GE Americom John A. Nelsen GE Americom Vice President, Four Research Way Market Development Princeton, NJ 08540 GE Americom Daniel J. Harel GE Americom Vice President, Space Four Research Way Systems and Operations Princeton, NJ 08540 GE Americom Michael J. Noon GE Americom Vice President, Terrestrial Four Research Way Systems and Operations Princeton, NJ 08540 GE Americom Carl Capista GE Americom Vice President, Satellite Four Research Way Services-North America Princeton, NJ 08540 GE Americom
CUSIP NO. M51474100 PAGE 15 OF 29 --------- ---- ----
PRESENT PRESENT BUSINESS PRINCIPAL NAME ADDRESS OCCUPATION - ---- ------- ---------- Daniel Dzamba, Jr. GE Americom Vice President, Marketing- Four Research Way Data Products Princeton, NJ 08540 GE Americom Tim Angst GE Americom Vice President, Broadband Four Research Way and Data Services Princeton, NJ 08540 GE Americom Stuart Jacob GE Americom Vice President, Marketing- Four Research Way Media Services Princeton, NJ 08540 GE Americom Jeffrey L. Hyde GECS Senior Tax Counsel, 777 Long Ridge Road GECS Stamford, CT 06927 Joseph T. Cassidy GECS Director-Federal Compliance, 777 Long Ridge Road GECS Stamford, CT 06927 Hanaa Nasr GE Americom Tax Accountant, Four Research Way GE Americom Princeton, NJ 08540 Kenneth E. Kempson GECS Senior Tax Counsel- 777 Long Ridge Road Examinations, Stamford, CT 06927 GECS Stuart G. Wessler GE Americom Tax Counsel, Four Research Way GE Americom Princeton, NJ 08540 John Amato GECS Tax Counsel-State Tax, 777 Long Ridge Road GECS Stamford, CT 06927 Patricia Lecouras GE Capital Commercial Real Estate, Inc. Quality Black Belt, 260 Long Ridge Road GE Capital Commercial Real Estate, Inc. Stamford, CT 06927 Gary J. Schulman GECS State Tax Planner, 777 Long Ridge Road GECS Stamford, CT 06927 Mark R. O'Leary GE Americom Associate General Counsel, Four Research Way GE Americom Princeton, NJ 08540
CUSIP NO. M51474100 PAGE 16 OF 29 --------- ---- ----
PRESENT PRESENT BUSINESS PRINCIPAL NAME ADDRESS OCCUPATION - ---- ------- ---------- Mara Yoelson Trenchard GE Americom Counsel, Four Research Way GE Americom Princeton, NJ 08540 Walker Allen GE Americom Associate General Counsel, Four Research Way GE Americom Princeton, NJ 08540
CUSIP NO. M51474100 PAGE 17 OF 29 --------- ---- ---- Schedule II GENERAL ELECTRIC SUBSIDIARY, INC. 22 DIRECTORS AND EXECUTIVE OFFICERS
DIRECTORS: PRESENT PRESENT BUSINESS PRINCIPAL NAME ADDRESS OCCUPATION - ---- ------- ---------- John F. Connelly GE Americom Chairman, Chief Executive Four Research Way Officer and President, Princeton, NJ 08540 GE Americom John C. DiMarco, Jr. GE Americom Senior Vice President, Four Research Way Enterprise Systems Princeton, NJ 08540 GE Americom Phillip V. Otero GE Americom Senior Vice President, Four Research Way Legal/Regulatory Operations Princeton, NJ 08540 GE Americom EXECUTIVE OFFICERS: PRESENT PRESENT BUSINESS PRINCIPAL NAME ADDRESS OCCUPATION - ---- ------- ---------- John F. Connelly GE Americom Chairman, Chief Executive Four Research Way Officer and President, Princeton, NJ 08540 GE Americom Gregg A. Holst GE Americom Senior Vice President, Four Research Way Finance Operations Princeton, NJ 08540 GE Americom Phillip V. Otero GE Americom Senior Vice President, Four Research Way Legal/Regulatory Operations Princeton, NJ 08540 GE Americom Victor F. Guaglianone GE Americom Vice President and Associate Four Research Way General Counsel, GECS Princeton, NJ 08540 Dave Tucker GECS Vice President, Manager- 777 Long Ridge Road GE Capital Corporate Audit, Stamford, CT 06927 GECS Jeffrey L. Hyde GECS Senior Tax Counsel, 777 Long Ridge Road GECS Stamford, CT 06927
CUSIP NO. M51474100 PAGE 18 OF 29 --------- ---- ----
PRESENT PRESENT BUSINESS PRINCIPAL NAME ADDRESS OCCUPATION - ---- ------- ---------- Joseph T. Cassidy GECS Director-Federal Compliance, 777 Long Ridge Road GECS Stamford, CT 06927 Kenneth E. Kempson GECS Senior Tax Counsel- 777 Long Ridge Road Examinations, Stamford, CT 06927 GECS Stuart G. Wessler GE Americom Tax Counsel, Four Research Way GE Americom Princeton, NJ 08540 John Amato GECS Tax Counsel-State Tax, 777 Long Ridge Road GECS Stamford, CT 06927 Patricia Lecouras GE Capital Commercial Real Estate, Inc. Quality Black Belt, 260 Long Ridge Road GE Capital Commercial Real Estate, Inc. Stamford, CT 06927 Gary J. Schulman GECS State Tax Planner, 777 Long Ridge Road GECS Stamford, CT 06927 Mark R. O'Leary GE Americom Assistant General Counsel, Four Research Way GE Americom Princeton, NJ 08540 Mara Yoelson Trenchard GE Americom Counsel, Four Research Way GE Americom Princeton, NJ 08540
CUSIP NO. M51474100 PAGE 19 OF 29 --------- ---- ---- Schedule III GENERAL ELECTRIC CAPITAL CORPORATION DIRECTORS AND EXECUTIVE OFFICERS
DIRECTORS: PRESENT PRESENT BUSINESS PRINCIPAL NAME ADDRESS OCCUPATION - ---- ------- ---------- N.D.T. Andrews GECC Executive Vice 260 Long Ridge Road President, GECC Stamford, CT 06927 N.E. Barton GECC Senior Vice President. 260 Long Ridge Road General Counsel and Stamford, CT 06927 Secretary, GECC J.R. Bunt GE Vice President and 3135 Easton Turnpike Treasurer, GE Fairfield, CT 06431 David M. Cote GE Appliances President and Chief Executive Appliance Park Officer GE Appliances Louisville, KY 40225 D.D. Dammerman GE Vice President and 3135 Easton Turnpike Executive Officer Fairfield, CT 06431 B.W. Heineman, Jr. GE Senior Vice President, 3135 Easton Turnpike General Counsel and Fairfield, CT 06431 Secretary, GE Jeffrey R. Immelt GE Medical Systems President and Chief Executive 3000 N. Grandview Blvd. Officer Waukesha, WI 53188 W. James McNerney, Jr. GE Aircraft Engines President and Chief Executive 1 Neumann Way Officer Cincinnati, OH 45215 John H. Myers GE Investment Corporation Chairman and President 3003 Summer Street Stamford, CT 06904 R.L. Nardelli GE President and Chief One River Road Executive Officer Schenectady, NY 12345 GE Power Systems
CUSIP NO. M51474100 PAGE 20 OF 29 --------- ---- ----
PRESENT PRESENT BUSINESS PRINCIPAL NAME ADDRESS OCCUPATION - ---- ------- ---------- D.J. Nayden GECC President and Chief 260 Long Ridge Road Operating Officer, GECC Stamford, CT 06927 M.A. Neal GECC Executive Vice 260 Long Ridge Road President, GECC Stamford, CT 06927 J.A. Parke GECC Senior Vice President, 260 Long Ridge Road Finance, GECC Stamford, CT 06927 J.M. Samuels GE Vice President and 3135 Easton Turnpike Senior Counsel, Fairfield, CT 06431 Corporate Taxes, GE E.D. Stewart GECC Executive Vice 260 Long Ridge Road President, GECC Stamford, CT 06927 J.F. Welch, Jr. GE Chairman and Chief 3135 Easton Turnpike Executive Officer, GE Fairfield, CT 06431 G.C. Wendt GECC Chairman and Chief 260 Long Ridge Road Executive Officer, GECC Stamford, CT 06927 EXECUTIVE OFFICERS: G.C. Wendt GECC Chairman and Chief 260 Long Ridge Road Executive Officer, GECC Stamford, CT 06927 D.J. Nayden GECC President and Chief 260 Long Ridge Road Operating Officer, GECC Stamford, CT 06927 N.D.T. Andrews GECC Executive Vice 260 Long Ridge Road President, GECC Stamford, CT 06927 M.A. Neal GECC Executive Vice 260 Long Ridge Road President, GECC Stamford, CT 06927 E.D. Stewart GECC Executive Vice 260 Long Ridge Road President, GECC Stamford, CT 06927
CUSIP NO. M51474100 PAGE 21 OF 29 --------- ---- ----
PRESENT PRESENT BUSINESS PRINCIPAL NAME ADDRESS OCCUPATION - ---- ------- ---------- N.E. Barton GECC Senior Vice President, 260 Long Ridge Road General Counsel and Stamford, CT 06927 Secretary, GECC J.A. Colica GECC Senior Vice President, 260 Long Ridge Road and Manager Global Risk Stamford, CT 06927 Management M.D. Fraizer GECC Senior Vice President, 292 Long Ridge Road Insurance/Investment Stamford, CT 06927 Products, GECC R.L. Lewis GECC Senior Vice President, 1600 Sumner Street and General Manager 6th Floor Structured Finance Stamford, CT 06905 Group, GECC J.A. Parke GECC Senior Vice President, 260 Long Ridge Road Finance, GECC Stamford, CT 06927 L.J. Toole GECC Senior Vice President, 260 Long Ridge Road Human Resources, Stamford, CT 06927 GECC J.S. Werner GECC Senior Vice President, 201 High Ridge Road Corporate Treasury and Stamford, CT 06927 Global Funding Operation, GECC
CUSIP NO. M51474100 PAGE 22 OF 29 --------- ---- ---- Schedule IV GENERAL ELECTRIC CAPITAL SERVICES, INC. DIRECTORS AND EXECUTIVE OFFICERS
DIRECTORS: PRESENT PRESENT BUSINESS PRINCIPAL NAME ADDRESS OCCUPATION - ---- ------- ---------- G.C. Wendt GECS Chairman, President 260 Long Ridge Road and Chief Executive Stamford, CT 06927 Officer, GECS K. Ahlmann Employers Reinsurance Corp. Executive Vice 5200 Metcalf President, GECS. Overland Park, KS 66202 President and Chief Operating Officer, Employers Reinsurance Corp. N.D.T. Andrews GECC Executive Vice 260 Long Ridge Road President, GECC Stamford, CT 06927 J.R. Bunt GE Vice President and 3135 Easton Turnpike Treasurer, GE Fairfield, CT 06431 David M. Cote GE Appliances President and Chief Executive Appliance Park Officer, GE Appliances Louisville, KY 40225 D.D. Dammerman GE Vice Chairman and 3135 Easton Turnpike Executive Officer, GE Fairfield, CT 06431 B.W. Heineman, Jr. GE Senior Vice President, 3135 Easton Turnpike General Counsel and Fairfield, CT 06431 Secretary, GE Jeffrey R. Immelt GE Medical Systems President and Chief Executive 3000 N. Grandview Blvd. Officer Waukesha, WI 53188 W. James McNerney, Jr. GE Aircraft Engines President and Chief Executive 1 Neumann Way Officer Cincinnati, OH 45215 John H. Myers GE Investment Corporation Chairman and President 3003 Summer Street Stamford, CT 06904
CUSIP NO. M51474100 PAGE 23 OF 29 --------- ---- ----
PRESENT PRESENT BUSINESS PRINCIPAL NAME ADDRESS OCCUPATION - ---- ------- ---------- R.L. Nardelli GE President and Chief Executive One River Road Officer GE Power Systems Schenectady, NY 12345 D.J. Nayden GECC President and Chief 260 Long Ridge Road Operating Officer, Stamford, CT 06927 GECC M.A. Neal GECC Executive Vice 260 Long Ridge Road President, GECC Stamford, CT 06927 J.M. Samuels GE Vice President and 3135 Easton Turnpike Senior Counsel, Fairfield, CT 06431 Corporate Taxes, GE E.D. Stewart GECC Executive Vice 260 Long Ridge Road President, GECC Stamford, CT 06927 J.F. Welch, Jr. GE Chairman and Chief 3135 Easton Turnpike Executive Officer, GE Fairfield, CT 06431 EXECUTIVE OFFICERS: Joan C. Amble GECC Vice President and Comptroller 260 Long Ridge Road Stamford, CT 06927 G.C. Wendt GECC Chairman and Chief 260 Long Ridge Road Executive Officer, GECC Stamford, CT 06927 Barbara E. Daniele GECC Vice President and Senior 260 Long Ridge Road Litigation Counsel Stamford, CT 06927 Richard D'Avino GECC Vice President and Senior 777 Long Ridge Road Counsel, Taxes Stamford, CT 06927 G.C. Wendt GECS Chairman, President 260 Long Ridge Road and Chief Executive Stamford, CT 06927 Officer, GECS
CUSIP NO. M51474100 PAGE 24 OF 29 --------- ---- ----
PRESENT PRESENT BUSINESS PRINCIPAL NAME ADDRESS OCCUPATION - ---- ------- ---------- K. Ahlmann Employers Reinsurance Corp. Executive Vice 5200 Metcalf President, GECS. Overland Park, KS 66202 President and Chief Operating Officer, ERC N.D.T. Andrews GECC Executive Vice 260 Long Ridge Road President, GECC Stamford, CT 06927 D.J. Nayden GECC President and Chief 260 Long Ridge Road Operating Officer, GECC Stamford, CT 06927 M.A. Neal GECC Executive Vice 260 Long Ridge Road President, GECC Stamford, CT 06927 E.D. Stewart GECC Executive Vice 260 Long Ridge Road President, GECC Stamford, CT 06927 N.E. Barton GECC Senior Vice President, 260 Long Ridge Road General Counsel and Stamford, CT 06927 Secretary, GECC J.A. Parke GECC Senior Vice President, 260 Long Ridge Road Finance, GECC Stamford, CT 06927 L.J. Toole GECC Senior Vice President, 260 Long Ridge Road Human Resources, Stamford, CT 06927 GECC J.S. Werner GECC Senior Vice President, 201 High Ridge Road Corporate Treasury and Stamford, CT 06927 Global Funding
CUSIP NO. M51474100 PAGE 25 OF 29 --------- ---- ---- Schedule V GENERAL ELECTRIC COMPANY DIRECTORS AND EXECUTIVE OFFICERS
DIRECTORS: PRESENT PRESENT BUSINESS PRINCIPAL NAME ADDRESS OCCUPATION - ---- ------- ---------- J.J. Cash, Jr. Harvard Business School Professor of Business Baker Library 187 Administration, Graduate Soldiers Field School of Business Boston, MA 02163 Administration, Harvard University S.S. Cathcart 222 Wisconsin Avenue Director and Retired Suite 103 Chairman of the Board, Lake Forest, IL 60045 Illinois Tool Works D.D. Dammerman GE Vice Chairman of the Board and 3135 Easton Turnpike Executive Officer, GE Fairfield, CT 06431 P. Fresco Fiat SpA Vice Chairman of the Via Nizza 250 Board and Executive 10126, Torino, Italy Officer, GE C.X. Gonzalez Kimberly-Clark de Chairman of the Board Mexico, S.A. de C.V. and Chief Executive Jose Luis Lagrange 103, Officer, Kimberly- Tercer Piso Clark de Mexico, S.A. de C.V. Colonia Los Morales Mexico, D.F. 11510 Andrea Jung Avon Products Former member of the 1345 Avenue of the the Board of Directors Americas Federated Department NY, NY 10001 Stores G.G. Michelson Federated Department Former Member of the Board of Stores Directors -- Federated 151 West 34th Street Department Stores New York, NY 10001 E.F. Murphy GE Vice Chairman of the 3135 Easton Turnpike Board and Executive Fairfield, CT 06431 Officer, GE S. Nunn King & Spalding Partner, King & Spalding 191 Peachtree Street, N.E. Atlanta, GA 30303
CUSIP NO. M51474100 PAGE 26 OF 29 --------- ---- ----
PRESENT PRESENT BUSINESS PRINCIPAL NAME ADDRESS OCCUPATION - ---- ------- ---------- J. D. Opie GE Vice Chairman of the 3135 Easton Turnpike Board and Executive Fairfield, CT 06431 Officer, GE R. S. Penske Penske Corporation Chairman of the Board 13400 Outer Drive, West and President Detroit, MI 48239-4001 Penske Corporation F.H.T. Rhodes Cornell University President Emeritus, 3104 Snee Building Cornell University Ithaca, NY 14853 A.C. Sigler Champion International Former Chairman of the Board, Corporation Former Chief Executive 1 Champion Plaza Officer and Director Stamford, CT 06921 Champion International Corporation D.A. Warner III J.P. Morgan & Co., Inc. Chairman of the Board and and Morgan Guaranty Chief Executive Officer Trust Co. J.P. Morgan & Co. 60 Wall Street & Co., Incorporated New York, NY 10260 and Morgan Guaranty Trust Company J.F. Welch, Jr. GE Chairman of the Board 3135 Easton Turnpike and Chief Executive Fairfield, CT 06431 Officer, GE EXECUTIVE OFFICERS: J.F. Welch, Jr. GE Chairman of the Board 3135 Easton Turnpike and Chief Executive Fairfield, CT 06431 Officer, GE P.D. Ameen GE Vice President and 3135 Easton Turnpike Comptroller, GE Fairfield, CT 06431 J.R. Bunt GE Vice President and 3135 Easton Turnpike Treasurer, GE Fairfield, CT 06431 D. L. Calhoun GE Vice President and Nela Park Treasurer Cleveland, OH 44122
CUSIP NO. M51474100 PAGE 27 OF 29 --------- ---- ----
PRESENT PRESENT BUSINESS PRINCIPAL NAME ADDRESS OCCUPATION - ---- ------- ---------- W. J. Conaty GE Senior Vice President 3135 Easton Turnpike Human Resources, GE Fairfield, CT 06431 D.M. Cote GE Senior Vice President -- GE 3135 Easton Turnpike Appliances Fairfield, CT 06431 D.D. Dammerman GE Vice Chairman of the Board and 3135 Easton Turnpike Executive Officer, GE Fairfield, CT 06431 L.S. Edelheit GE Senior Vice President P.O. Box 8 -- Corporate Research Schenectady, NY 12301 and Development, GE B.W. Heineman, Jr. GE Senior Vice President, 3135 Easton Turnpike General Counsel Fairfield, CT 06431 and Secretary, GE J.R. Immelt GE Senior Vice President P.O. 414 Medical Systems Milwaukee, WI 53201 G.S. Malm GE Senior Vice President - 3135 Easton Turnpike Asia Fairfield, CT 06431 W.J. McNerney GE Senior Vice President, 1 Neumann Way GE Aircraft Engines Cincinnati, OH 05215 E.F. Murphy GE Vice Chairman of the Board 3135 Easton Turnpike and Executive Officer Fairfield, CT 06431 R.L. Nardelli GE Senior Vice President, One River Road GE Power Systems Schenectady, NY 12345 R.W. Nelson GE Vice President 3135 Easton Turnpike Corporate Financial Fairfield, CT 06431 Planning and Analysis, GE J. D. Opie GE Vice Chairman of the 3135 Easton Turnpike Board and Executive Fairfield, CT 06431 Officer, GE
CUSIP NO. M51474100 PAGE 28 OF 29 --------- ---- ----
PRESENT PRESENT BUSINESS PRINCIPAL NAME ADDRESS OCCUPATION - ---- ------- ---------- G.M. Reiner GE Senior Vice President 3135 Easton Turnpike Chief Information Fairfield, CT 06431 Officer, GE J.G. Rice GE Vice President, GE 2901 East Lake Road Transportation Systems Erie, PA 16531 G.L. Rogers GE Senior Vice President 1 Plastics Avenue GE Plastics, GE Pittsfield, MA 01201 K.S. Sherin GE Senior Vice President and 3135 Easton Turnpike Chief Financial Fairfield, CT 06431 Officer, GE L.G. Trotter GE Senior Vice President, GE 41 Woodford Avenue Industrial Systems Plainville, CT 06062
CUSIP NO. M51474100 PAGE 29 OF 29 --------- ---- ---- Schedule VI 1. Her Majesty's Inspectorate of Pollution v. IGE Medical Systems Limited (St. Albans Magistrates Court, St. Albans, Hertsfordshire, England, Case No. 04/00320181) In April, 1994, General Electric Medical Systems' U.K. subsidiary, IGE Medical Systems Limited ("IGEMS") discovered the loss of a radioactive barium source at the Radlett, England facility. The lost source, used to calibrate nuclear camera detectors, emits a very low level of radiation. IGEMS immediately reported the loss as required by the U.K. Radioactive Substances Act. An ensuing investigation, conducted in cooperation with government authorities, failed to locate the source. On July 21, 1994, Her Majesty's Inspectorate of Pollution ("HMIP") charged IGEMS with violating the Radioactive Substances Act by failing to comply with a condition of registration. The Act provides that a registrant like IGEMS, which "does not comply with a limitation or condition subject to which (it) is so registered ... shall be guilty of (a criminal) offense." Condition 7 of IGEMS' registration states that it "shall so far as is reasonably practicable prevent ... loss of any registered source." At the beginning of trial on February 24, 1995, IGEMS entered a guilty plea and agreed to pay of fine of (pound) 5,000 and assessed costs of (pound) 5,754. The prosecutors presentation focused primarily on the 1991 change in internal IGEMS procedures and, in particular, the source logging procedure. The prosecutor complimented IGEMS' investigation and efforts to locate the source and advised the court that IGEMS had no previous violations of the Radioactive Substances Act. He also told the court that the Radlett plant had been highlighted as an exemplary facility to HMIP inspectors as part of their training. In mitigation, IGEMS emphasized the significant infrastructure and expense undertaken by IGEMS to provide security for radiation sources and the significant effort and expense incurred in attempting to locate the missing source. EX-1 2 EXHIBIT 1 EXHIBIT 1 JOINT FILING AGREEMENT Pursuant to Rule 13d-1(f) promulgated under the Securities Exchange Act of 1934, as amended, the undersigned each hereby agrees to the joint filing, on behalf of each of the undersigned, of this Schedule 13D dated January 11, 1999, and all subsequent amendments thereto. This Joint Filing Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Dated: January 11, 1999 GE AMERICAN COMMUNICATIONS, INC. By: /s/ Philip V. Otero ------------------------------------ Name: Philip V. Otero Title: Senior Vice President, Legal/ Regulatory Operations GE SUBSIDIARY, INC. 22 By: /s/ Philip V. Otero ------------------------------------ Name: Philip V. Otero Title: Senior Vice President, Secretary GENERAL ELECTRIC CAPITAL CORPORATION By: /s/ Robert E. Healing ------------------------------------ Name: Robert E. Healing Title: Attorney-in-Fact GENERAL ELECTRIC CAPITAL SERVICES, INC. By: /s/ Robert E. Healing ------------------------------------ Name: Robert E. Healing Title: Attorney-in-Fact GENERAL ELECTRIC COMPANY By: /s/ Robert E. Healing ------------------------------------ Name: Robert E. Healing Title: Corporate Counsel EX-2 3 EXHIBIT 2 EXHIBIT 2 SHAREHOLDERS' AGREEMENT SHAREHOLDERS' AGREEMENT ("Agreement"), dated as of December 31, 1998, by and among Yoel Gat, Amiram Levinberg, Joshua Levinberg, Shlomo Tirosh and Gideon Kaplan (collectively, the "Founders Group"), DIC Technology Holdings Ltd. and PEC Israel Economic Corporation (collectively, the "IDB Group"), and General Electric Company, GE American Communications, Inc. ("GE Americom"), General Electric Finance Holding GMBH and General Electric Plastics B.V. (collectively, "GE"). Each of Yoel Gat, Amiram Levinberg, Joshua Levinberg, Shlomo Tirosh and Gideon Kaplan is individually referred to herein as a "Founder" and collectively as the "Founders," each of the Founders Group, the IDB Group and GE is sometimes hereinafter referred to as a "Group" and collectively as the "Groups," and each of the Founders, DIC Technology Holdings Ltd., PEC Israel Economic Corporation and GE and any other individual, corporation, limited liability company, partnership, trust, unincorporated organization, other entity or a government or any agency or political subdivision thereof (a "Person") who shall become a party to or agree to be bound by the terms of this Agreement after the date hereof is sometimes hereinafter referred to as a "Shareholder" and collectively as the "Shareholders." W I T N E S S E T H: WHEREAS, the Shareholders are or will be the owners beneficially and of record of the number of Ordinary Shares, par value NIS 0.01 per share (the "Ordinary Shares"), of Gilat Satellite Networks Ltd. (the "Company") set forth below each of their names on the signature pages hereto; and WHEREAS, the Shareholders desire for their mutual benefit and protection to enter into this Agreement for the purpose of regulating certain aspects of their relationship with respect to the Company and to set forth certain of their respective rights and obligations with respect to their Ordinary Shares (whether issued or acquired hereafter, including all Ordinary Shares issuable upon the exercise of warrants, options or other rights to acquire Ordinary Shares, or upon the conversion or exchange of any security). NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, the parties hereby agree as follows: Section 1. Management 1.1 Election of Directors. The Shareholders hereby agree that they will vote all of the Ordinary Shares then held by them at any meetings of the shareholders of the Company (or in any action in lieu thereof) in order that the Board of Directors of the Company shall be comprised of seven (7) members. So long as the Founders Parties (as defined below) shall (a) collectively own not less than thirty percent (30%) of the number of Ordinary Shares owned by them on the date hereof or (b) at least one of the Founders shall be serving as an employee of the Company, the holders of a majority of the Ordinary Shares held by the Founders Group (and if no such Ordinary Shares are then held by the Founders Group, then any Founders then serving as employees of the Company) shall have the right to designate three individuals as nominees for election as directors of the Company (collectively, the "Founder Directors"). So long as the IDB Group shall collectively own (A) not less than fifty percent (50%) of the number of Ordinary Shares owned by them on the date hereof, the holders of a majority of the Ordinary Shares held by the IDB Group shall have the right to designate two individuals as nominees for election as directors of the Company or (B) less than fifty percent (50%) but not less than twenty-five percent (25%) of the number of Ordinary Shares owned by them on the date hereof, the holders of a majority of the Ordinary Shares held by the IDB Group shall have the right to designate one individual as a nominee for election as a director of the Company (any such directors, collectively, the "IDB Directors"). So long as the GE Parties (as defined below) shall collectively own (A) not less than fifty percent (50%) of the number of Ordinary Shares owned by them on the date hereof, GE shall have the right to designate two individuals as nominees for election as directors of the Company or (B) less than fifty percent (50%) but not less than thirty-three percent (33%) of the number of Ordinary Shares owned by them on the date hereof, GE shall have the right to designate one individual as a nominee for election as a director of the Company (any such directors, collectively, the "GE Directors"). Each of the Founders Parties, the IDB Group and the GE Parties hereby agree to vote their Ordinary Shares at any meeting of the shareholders of the Company (or in any action in lieu thereof) in favor of the election of the Founder Directors, the IDB Directors and the GE Directors. 1.2 Definitions. For purposes of this Agreement: 1.2.1 "Founders Parties" shall mean the Founders and any members of their immediate families, trusts for the benefit of any of the Founders and/or members of their immediate families, and Persons which the Founders and/or members of their immediate families control. 1.2.2 "control" (including, with correlative meanings, the terms "controlling," "controlled by," and "under common control with"), as used with respect to any Person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities or by contract or otherwise. 1.2.3 "affiliate" shall mean, with respect to any Person, any other Person directly or indirectly controlling, controlled by, or under common control with such Person; provided, however, that no Person shall be deemed to be 2 an affiliate of another Person solely by reason of such Person's investment in the Company. 1.2.4 "GE Parties" shall mean GE and its affiliates. 1.3 Increase in Number of Directors. In the event the Company is required by Israeli law or other applicable law or regulation to include one or more independent directors from the public on the Board of Directors of the Company and the then serving directors of the Company are unable to satisfy such requirement, the Shareholders agree to vote all of the Ordinary Shares then held by them in order that the Board of Directors be increased in size by the minimum number of directors necessary to facilitate compliance with such law or regulation and to vote all of the Ordinary Shares in favor of nominees reasonably acceptable to each of the Groups (which nominees shall be residents and citizens of the State of Israel) eligible to fulfill such legal or regulatory requirement. 1.4 Vacancies and Removal; Action by Shareholders. If a vacancy is created on the Board of Directors by reason of the death, disability, removal or resignation of any director, the party, if any, which, under Section 1.1, is entitled to nominate the director whose death, disability, removal or resignation resulted in such vacancy shall be entitled to designate a new nominee to serve as director, and the Shareholders and, to the extent consistent with applicable law, their nominee directors shall use their best efforts as soon as reasonably practicable to take any and all actions within their control to fill such vacancy with such nominee. In addition, the Shareholders and, to the extent consistent with applicable law, their nominee directors shall use their best efforts as soon as reasonably practicable to take any and all actions within their control to remove any directors and reduce the size of the Board of Directors to the extent that such removal is intended to remove a nominee to the Board of Directors whom the relevant party is no longer entitled to nominate in accordance with the terms of Section 1.1 hereof. Each of the Founders Parties, the IDB Group and the GE Parties hereby agree to vote their Ordinary Shares in favor of such nominees, removals and reductions, as applicable. 1.5 Shareholder Voting. (a) Each of the Shareholders hereby agrees that it will attend and take all necessary actions to constitute a portion of the applicable quorum at any relevant meeting of the shareholders of the Company, and at any such meeting (or in any action in lieu thereof) it will vote all of the Ordinary Shares then owned by it in accordance with, and to fully give effect to, the terms of this Agreement, and, to the extent not contrary to the terms of this Agreement or applicable law or regulation, with the recommendations of the Board of Directors of the Company with respect to any resolutions or other matters submitted to a vote of the shareholders of the Company (other than matters relating to the election of directors which are explicitly governed by Section 1.1 hereof); provided, however, that no Group shall be obligated by this Section 1.5(a) to vote in accordance with the recommendations of the Board of Directors to the extent that (i) such vote 3 relates to a merger (which merger results in a Change of Control (as defined below) or sale of all or substantially all of the Company or a reorganization or restructuring of the Company changing the rights of shareholders in a significant and adverse manner or a transaction with substantially similar results or (ii) such Group in reasonable good faith determines that voting in accordance with such recommendation is directly and materially adverse to the interests of such Group, solely in its capacity as a shareholder(s) of the Company (provided, that notwithstanding the preceding proviso, all of the Groups shall at all times be required to comply with all of the other terms of this Agreement). Subject to Section 2.1(b) hereof, in the event that the Board of Directors shall not make any recommendation with respect to any such resolution or other matter submitted to a vote of the shareholders of the Company, each of the Shareholders shall be free, subject to compliance with the terms of this Agreement, to vote thereon as such Shareholder deems appropriate. (b) For a period of three (3) years from the date of this Agreement, each of the Shareholders hereby agrees that at any meeting of the shareholders of the Company (or in any action in lieu thereof) it will vote all of the Ordinary Shares then owned by it in favor of, and will (to the extent permitted by applicable law) direct its respective nominee(s) on the Board of Directors of the Company to vote at any meeting of, or in any action by, the Board of Directors in favor of the retention in their respective offices of all senior officers of the Company holding such offices as of the date of this Agreement, including, but not limited to, the Chairman, the Chief Executive Officer, the President, the Chief Operating Officer, the General Counsel and the Chief Financial Officer of the Company; provided, however, that nothing in this Section 1.5(b) shall require any nominee to the Board of Directors of the Company to vote in any manner which such nominee in good faith determines will violate such nominee's fiduciary duties under applicable law. 1.6 Other Voting Agreements. Each of the Parties hereby agrees that no two Groups shall enter into any formal voting trusts, agreements or other similar arrangements (other than pursuant to this Agreement and the Agreement and Plan of Merger, by and among GE Americom, GE Capital Spacenet Services, Inc. ("Spacenet"), Jonah Acquisition Corp. and the Company, dated as of September 25, 1998, and pursuant to the transactions contemplated hereunder and thereunder) (each, an "Other Agreement") in respect of the voting of all or a portion of the Ordinary Shares owned by them or in respect of the voting by their respective nominee(s) to the Board of Directors of the Company, which Other Agreement is not consented to in writing by the third Group (the "Outside Group"), for so long as such Outside Group shall be entitled, pursuant to the terms of Section 1.1 hereof, to nominate at least one member of the Board of Directors of the Company. Nothing in this Section 1.6 shall prevent the members of any Group (or their respective nominees to the Board of Directors) from entering into any such voting trust, agreement or other similar arrangements solely among the members of such Group 4 (or their respective nominees), in each case to the extent permitted by applicable law. Section 2. Standstill 2.1 Restrictions on Certain Activities by GE. GE hereby agrees that during the term of the Agreement it will not, and will not permit any of the GE Parties to, without the prior approval of the holders of a majority of the Ordinary Shares then held by the Founders Group or the holders of a majority of the Ordinary Shares then held by the IDB Group, respectively: (a) Acquire (other than pursuant to the Merger Agreement and the contracts and agreements referred to therein) or offer to acquire, whether by purchase, gift or by joining a partnership or other Group (as defined in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")), any assets (other than acquisitions of inventory or other materials in the ordinary course of business of the Company), businesses or properties of the Company, or any Ordinary Shares of the Company, securities convertible into, exchangeable for, or exercisable for Ordinary Shares, which acquisitions of Ordinary Shares or securities convertible into, exchangeable for, or exercisable for Ordinary Shares, result in the GE Parties being the beneficial owners of greater than thirty-three percent (33%) of the Ordinary Shares of the Company then outstanding; provided, that in the event of a bona fide tender offer (a "Third Party Tender Offer") for at least 50% of the outstanding Ordinary Shares of the Company by a party not affiliated with any of the Groups at a price in excess of the Market Price (as defined below) of such Ordinary Shares immediately prior to the announcement of such Third Party Tender Offer, the GE Parties shall be free, during the pendency of the Third Party Tender Offer, to commence a tender offer for all of the outstanding Ordinary Shares or to acquire Ordinary Shares on the open market or otherwise notwithstanding the provisions of this Section 2.1(a). Any Ordinary Shares acquired pursuant to the proviso at the end of the preceding sentence shall be subject to all of the terms of this Agreement. For purposes of this Agreement, "Market Price" of the Ordinary Shares shall mean the average closing sales price per Ordinary Share on the principal securities market on which such Ordinary Shares are traded for the twenty (20) trading days ending on the day prior to the date of commencement of a Third Party Tender Offer. 5 (b) (i) Solicit, initiate or participate in any "solicitation" of "proxies" or become a participant in any "election contest" (as such terms are defined in Regulation 14A under the Exchange Act); (ii) Call, or in any way participate in a call for, any special or extraordinary meeting of shareholders of the Company; (iii) Initiate or propose any shareholder proposal or participate in the making of, or solicit shareholders for the approval of, one or more shareholder proposals relating to the Ordinary Shares; (iv) Subject any of its Ordinary Shares to any voting trust or voting agreement or arrangement, except as otherwise provided herein; (v) Form, join or in any way participate in any Group with respect to any Ordinary Shares (or any securities the ownership of which would make the owner thereof a beneficial owner of Ordinary Shares) otherwise than as a result of this Agreement; (vi) Solicit or propose to effect or negotiate any form of business combination, restructuring, recapitalization or other extraordinary transaction involving any change of control of the Company; (vii) Disclose or act upon any intention, purpose, plan or proposal with respect to its Ordinary Shares or the Company which is inconsistent with the terms of this Agreement; (viii) Seek election to or seek to place a representative or nominee on the Board of Directors of the Company or seek the removal of any member of the Board of Directors of the Company, in each case otherwise than in accordance with the terms of this Agreement; or (ix) Assist, advise, encourage or act in concert with any Person with respect to, or seek to do, any of the foregoing. 2.2 Release of Certain Restrictions Under Certain Circumstances. (a) Notwithstanding the provisions of Section 2.1 above, the restrictions set forth in Section 2.1 shall not apply in respect of any transaction or event (a "Change of Control Transaction") that results or is reasonably likely to result in a Change of Control (as defined below) of the Company, unless the holders of a majority of the Ordinary Shares then held by the Founders Group and the holders of a majority of the Ordinary Shares then held by the IDB Group, respectively, each certify in writing in response to a reasonable request by GE that they intend, in connection with such Change of Control Transaction, to maintain ownership of all or substantially all of the Ordinary Shares owned by them immediately prior to the commencement of such Change of Control Transaction and, solely in their capacities as shareholders of the Company, to oppose (to the extent such opposition is in compliance with the terms of this Agreement and applicable law) such Change of Control Transaction. For purposes of this Agreement, a "Change of Control" shall mean: (i) any "person" or "group" (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that a Person shall be deemed to have 6 beneficial ownership of all shares that such Person has the right to acquire, whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of more than 50% of the total voting power of the voting stock of the Company, whether as a result of issuance of securities of the Company, any merger, consolidation, liquidation or dissolution of the Company, any direct or indirect transfer of securities or otherwise; (ii) (1) another corporation merges into the Company or the Company consolidates with or merges into any other corporation, or (2) the Company conveys, transfers or leases all or substantially all its assets (computed on a consolidated basis) to any person or group, in one transaction or a series of transactions other than any conveyance, transfer or lease between the Company and a subsidiary of the Company, in each case in one transaction or a series of related transactions with the effect that either (x) immediately after such transaction any person or entity or group (as so defined) of persons or entities (other than any of the Parties hereto) shall have become the beneficial owner of securities of the surviving corporation of such merger or consolidation representing a majority of the combined voting power of the outstanding securities of the surviving corporation ordinarily having the right to vote in the election of directors or (y) the securities of the Company that are outstanding immediately prior to such transaction and which represent 100% of the combined voting power of the securities of the Company ordinarily having the right to vote in the election of directors are changed into or exchanged for cash, securities or property, unless pursuant to such transaction such securities are changed into or exchanged for, in addition to any other consideration, securities of the surviving corporation that represent immediately after such transaction, at least a majority of the combined voting power of the securities of the surviving corporation ordinarily having the right to vote in the election of directors; or (iii) during any period of two consecutive years, individuals who at the beginning of such period constituted the Board of Directors of the Company (together with any new directors whose election by such Board of Directors or whose nomination for election by the shareholders of the Company was approved by a vote of 50% of the directors of the Company then still in office who were either directors at the beginning of such period or whose election or nomination for election was previously so approved) cease for any reason to constitute a majority of the Board of Directors of the Company then in office. (b) Notwithstanding anything else herein to the contrary, the restrictions set forth in Section 2.1 shall no longer apply at any time that each of (i) the Founders Group (together with any other Founders Parties) and (ii) the IDB Group no longer collectively hold at least fifty percent (50%) of the Ordinary Shares held by them, respectively, on the date of this Agreement. 2.3 Put by Founders Group and IDB Group in Certain Circumstances. In the event (a "Put Event") that following any waiver of the restrictions set forth in Section 2.1 pursuant to the waiver provisions set forth in the first paragraph of Section 2.1, GE (together with any other GE Parties) at any time collectively are the beneficial owners of greater than fifty percent (50%) of the 7 outstanding Ordinary Shares, each of the Founders Parties and the IDB Group shall have an option (the "Put Option"), on ten days' written notice from one or more of the Founders Parties (the "Founders Notice") or from one or more members of the IDB Group (the "IDB Notice"), to cause GE to purchase all or a portion of the Ordinary Shares then owned by it at the Market Price (as defined below). The GE Parties shall give the IDB Group and the Founders prompt notice of the occurrence of a Put Event and the Put Option shall be effective until ninety days from the receipt by the Founders and the IDB Group of such written notice. For purposes of this Agreement, "Market Price" shall mean the closing price of the Ordinary Shares on the principal securities exchange or other market on which the Ordinary Shares are then traded or quoted for the last trading day preceding the date of the relevant Founders Notice or IDB Notice, as applicable. 3. Restrictions on Transfer 3.1 General Restrictions on Transfer. Except as otherwise provided in Section 3.4 below, for a period of three (3) years from the date of this Agreement, each GE Party agrees that such GE Party will not, without the prior written consent of each of the holders of a majority of the Ordinary Shares then held by the Founders Group and the holders of a majority of the Ordinary Shares then held by the IDB Group, directly or indirectly, sell, hypothecate, give, bequeath, transfer, assign, pledge or in any other way whatsoever encumber or dispose of (any such event, a "Transfer") any Ordinary Shares now or hereafter at any time owned by such Shareholder (or any interest therein) to another Person ("Transferee"), if as a result of such Transfer the GE Parties shall collectively own less than fifteen percent (15%) of the then outstanding Ordinary Shares of the Company; provided, however, that the restrictions set forth in this Section 3.1 and in Section 3.4 below shall cease to apply (1) on any Determination Date (as defined below) with respect to the Unrestricted Percentage (as defined below) of the Ordinary Shares held in the aggregate by the GE Parties on the date hereof, (2) at any time that the GE Parties shall collectively own less than 5% of the then outstanding Ordinary Shares of the Company, (3) if at any date the Market Price of the Ordinary Shares is below $7.00 per share (adjusted to give effect to any change in the capitalization of the Company, including as a result of any stock split, stock dividend or stock combination), (4) under the circumstances permitting a Contingent Demand Registration Request as described in Section 3.1(2) of the Registration Rights Agreement dated on or about the date hereof among the Company and certain GE entities, and (5) (q) in respect of a Change of Control Transaction that has been approved by a majority of the directors of the Company with no material interest in the matter being considered (other than in their capacities as shareholders of the Company), or if at such time there are no such directors with no material interest in the matter being considered, a majority of the Board of Directors of the Company, unless the holders of a majority of the Ordinary Shares then held by the Founders Group and the holders of a majority of the Ordinary Shares then held by the IDB Group, respectively, each certify in writing in response to a reasonable request by 8 GE that they intend, in connection with such Change of Control Transaction, to maintain the ownership of all or substantially all of the Ordinary Shares owned by them immediately prior to the commencement of such Change of Control Transaction and, solely in their capacities as shareholders of the Company, to oppose (to the extent such opposition is in compliance with the terms of this Agreement and applicable law) such Change of Control Transaction or (r) following any Change of Control Transaction, provided that no GE Parties participated in any manner in the relevant Change of Control Transaction. For purposes of this Agreement, "Unrestricted Percentage" shall mean at any given time (the "Determination Date") a percentage equal to the difference between (a) one hundred percent (100%) minus (b) the greater of (x) the percentage of the Ordinary Shares held by the Founders Parties on the date hereof still held by the Founders Parties on the Determination Date or (y) the percentage of the Ordinary Shares held by the IDB Group on the date hereof still held by the IDB Group on the Determination Date (by way of example, if at the Determination Date the Founders Parties and the IDB Group hold 40% and 60%, respectively, of the Ordinary Shares held by them on the date hereof, the restrictions set forth in this Section 3.1 and in Section 3.4 below shall no longer apply to 40% (i.e. 100% minus 60%) of the Ordinary Shares held by the GE Parties on the date hereof). The parties to this Agreement will use their respective best efforts to cause the Company not to transfer, and to instruct any transfer agent in respect of the Ordinary Shares not to transfer, upon its books or stock records any Ordinary Shares to any Person to the extent prohibited by this Agreement and any purported transfer in violation hereof shall be null and void and of no effect. Notwithstanding the foregoing, a Shareholder which is a GE Party may, without the consents required by the first sentence of this Section 3.1, Transfer all or part of its or his Ordinary Shares to a GE Transferee (as defined below), provided that such GE Transferee in each such case, as a condition precedent to the validity of such Transfer, agrees in a writing reasonably satisfactory to counsel for the Founders Group and the IDB Group to be bound by all of the terms and conditions of this Agreement as if named as a "Shareholder" hereunder. For purposes of this Agreement, a "GE Transferee" of any GE Party shall be (i) any other Shareholder or, to the extent permitted by applicable law, the Company or (ii) any affiliate of such GE Party. 3.2 Involuntary Transfer. In the case of any Transfer of title or beneficial ownership of the Ordinary Shares of a Shareholder which is a GE Party upon default, foreclosure, forfeit, court order, or otherwise than by a voluntary decision on the part of the respective GE Party (an "Involuntary Transfer"), such GE Party (or its legal representatives) shall promptly (but in no event later than two (2) business days after such Involuntary Transfer) furnish written notice to the Founders Group and the IDB Group indicating that the Involuntary Transfer has occurred, specifying the name of the Person to whom such Ordinary Shares have been transferred, giving a detailed description of the circumstances giving rise to, and stating the legal basis for, the Involuntary Transfer. 9 3.3 Veto on Certain Sales by GE Parties. Notwithstanding anything in this Agreement to the contrary, during the term of the Agreement, none of the GE Parties shall Transfer any of the Ordinary Shares held by it to any Competitor (as defined below), without the prior written consent of each of (i) the holders of a majority of the Ordinary Shares then held by the Founders Group and (ii) the holders of a majority of the Ordinary Shares then held by the IDB Group. In addition to any other consent or notice that may be required pursuant to the terms of this Agreement, each GE Party agrees to give the Founders Group and the IDB Group at least ten (10) days' advance written notice of any proposed Transfer which requires consent pursuant to this Section 3.3, including the number of Ordinary Shares to be transferred and the identity of the proposed transferee. For the purposes of this Agreement, the term "Competitor" shall mean any Person with a public equity market capitalization of at least $200 million that prior to such acquisition of Ordinary Shares is engaged in a material manner in the satellite communications manufacturing, equipment or service industries. Notwithstanding the other provisions of this Section 3.3, (i) the GE Parties shall be permitted to Transfer Ordinary Shares in any open-market or reasonably similar "blind" Transfer notwithstanding that the other party to such Transfer may be a Competitor, provided that such GE Party in good faith did not know, and did not have any reasonable basis to believe, that such other party was a Competitor, and (ii) the GE Parties shall be permitted to Transfer Ordinary Shares without giving effect to the restrictions set forth in this Section 3.3 (x) in respect of a Change of Control Transaction for such Ordinary Shares that has been approved by a majority of the directors of the Company with no material interest in the matter being considered (other than in their capacities as shareholders of the Company), or if at such time there are no such directors with no material interest in the matter being considered, a majority of the Board of Directors of the Company, unless the holders of a majority of the Ordinary Shares then held by the Founders Group and the holders of a majority of the Ordinary Shares then held by the IDB Group, respectively, each certify in writing in response to a reasonable request by GE that they intend, in connection with such Change of Control Transaction, to maintain the ownership of all or substantially all of the Ordinary Shares owned by them immediately prior to the commencement of such Change of Control Transaction and, solely in their capacities as shareholders of the Company, to oppose (to the extent such opposition is in compliance with the terms of this Agreement and applicable law) such Change of Control Transaction, and (y) at any time that the GE Parties shall collectively own less than 5% of the then outstanding Ordinary Shares of the Company. 3.4 Restrictions on Liens. During the three year period referred to in Section 3.1 above, no GE Party shall create, incur or assume or suffer to exist any lien, security interest, pledge, claim, option, right of first refusal or first offer or other encumbrance ("Liens") on their respective Ordinary Shares other than Liens created pursuant to the terms of this Agreement and the Agreement and Plan of Merger by and among GE Americom, Spacenet, Jonah Acquisition Corp. and the 10 Company, dated as of September 25, 1998; provided, however, that the restrictions set forth in this Section 3.4 shall not apply to any bona fide pledge of Ordinary Shares to a commercial bank, savings and loan institution or any other similar lending institution as security for any indebtedness to such lender, provided, that prior to any such pledge, the Founders Group and the IDB Group are informed in writing of such pledge and the pledgee shall deliver to each of the Founders Group and the IDB Group its written agreement, in form and substance satisfactory to counsel for such Groups, that upon any foreclosure such pledgee shall comply with the terms of this Agreement applicable to the GE Parties and will be bound by all of the terms and conditions of this Agreement as if named as a "Shareholder" hereunder. Any attempt to place a Lien upon the Ordinary Shares in violation of this Agreement shall be null and void and the parties to this Agreement will use their respective best efforts to insure that neither the Company nor any transfer agent shall give any effect to such attempted encumbrance in its stock records. 3.5 Tax Matters Agreement. Notwithstanding anything in this Agreement to the contrary, if at any time GE becomes entitled to the registration rights set forth in Section 16(c) of the Tax Matters Agreement (the "Tax Agreement") dated as of September 25, 1998, among GE Americom, the Company, Spacenet and the Spacenet Subsidiaries (as defined in the Tax Agreement), GE shall be permitted to Transfer such number of Ordinary Shares equal to the number of Tax Demand Shares (as defined in, and determined in accordance with, the terms of the Registration Rights Agreement, dated as of December 31, 1998, among the Company and GE (as defined therein)); provided, however, that the restrictions set forth in Section 3.3 hereof shall apply to any such Transfer. Section 4. Rights of First Refusal (i) If at any time during the term of this Agreement a Shareholder receives from an unrelated third party, or makes to an unrelated third party, a bona fide offer in writing to purchase all or a portion of his or its Ordinary Shares (the "Shareholder Offer"), and such Shareholder (the "Offering Shareholder") desires to sell such Ordinary Shares pursuant to the Shareholder Offer, he or it shall deliver notice of such election (the "Offer Notice") in writing to each of the other Groups (other than the Group to which the Offering Shareholder belongs) together with a copy of such Shareholder Offer. Such Offer Notice shall state the terms of such Shareholder Offer and the identity and business address of the offeror (the "Offeror") and shall be deemed an offer by the Offering Shareholder to sell all of his or its Ordinary Shares that are the subject of the Shareholder Offer (the "Offered Shares") at a purchase price and on the terms and conditions as set forth in the bona fide offer accompanying the Offer Notice. (ii) Subject to the other terms of the Agreement (including but not limited to Section 2) each of the other Groups (other than the Group to which the Offering Shareholder belongs; together with the Founders Parties or the GE 11 Parties, as applicable, the "Other Groups") shall have a first option (each a "First Option") to purchase a portion of the Offered Shares equal to the product of (a) the number of Offered Shares multiplied by (b) a fraction, the numerator of which is the number of Ordinary Shares owned by such Other Group and the denominator of which is the aggregate number of Ordinary Shares owned by the Other Groups collectively. A First Option shall be exercisable by written notice from the relevant Other Group to the Offering Shareholder and the other Other Group within the fifteen business days (the "First Option Period") immediately following receipt of the Offer Notice. If one of the Other Groups does not exercise its First Option with respect to all or a portion of the Offered Shares subject to its First Option within the First Option Period, the other Other Group shall thereafter have the second option (the "Second Option") to purchase all or a portion of such Offered Shares. The Second Option shall be exercisable by written notice from the Buyer to the Offering Shareholder and the other Other Group within the fifteen business days (the "Second Option Period") immediately following the expiration of the First Option Period. Any allocation among the members of an Other Group of the rights set forth in this Section 4(ii) shall be at the sole discretion of the members of such Other Group; provided, that such allocation shall be set forth in the written notice delivered to the Offering Shareholders pursuant to this Section 4(ii). (iii) If either the First Option or the First Option together with the Second Option are not exercised with respect to all of the Offered Shares, then, all exercises of such options to purchase shall be null and void, and the Offering Shareholder shall be entitled to sell all, but not less than all, of the Offered Shares to the Offeror, but only on terms no more favorable to the Offeror than those contained in the Shareholder Offer and within thirty (30) days from the expiration of the Second Option Period (the "Disposition Period"). If the Offering Shareholder does not sell the relevant Offered Shares in strict compliance with this Section 4(iii), any other disposition of its or his Ordinary Shares must be made only pursuant to a new bona fide offer and the provisions of this Section 4 or otherwise in accordance with the terms of this Agreement. (iv) The closing of any purchase and sale contemplated by Section 4(ii) above shall take place at the offices of the Company, at 10:00 a.m, on the fortieth business day after delivery of the Offer Notice, or such other time and place as agreed upon by the parties. At the closing, the Offering Shareholder shall deliver in exchange for the purchase price due hereunder certificates for the Ordinary Shares being sold duly endorsed for transfer with signatures guaranteed and with all applicable documentary and/or transfer stamps affixed. (v) The provisions of this Section 4 shall not apply to (a) any Transfers pursuant to a registration statement under the Securities Act of 1933, as amended (the "Securities Act"), or in a sale transaction in the course of trading in the 12 Company's Ordinary Shares on the National Market System or Small Capitalization System of the National Association of Securities Dealers, Inc. or any other securities exchange (including, but not limited to, pursuant to a block trade), (b) any Transfers (1) in respect of a Change of Control Transaction that has been approved by a majority of the directors of the Company with no material interest in the matter being considered (other than in their capacities as shareholders of the Company), or if at such time there are no such directors with no material interest in the matter being considered, a majority of the Board of Directors of the Company, unless the holders of a majority of the Ordinary Shares then held by the Founders Group and the holders of a majority of the Ordinary Shares then held by the IDB Group, respectively, each certify in writing in response to a reasonable request by GE that they intend, in connection with such Change of Control Transaction, to maintain the ownership of all or substantially all of the Ordinary Shares owned by them immediately prior to the commencement of such Change of Control Transaction and, solely in their capacities as shareholders of the Company, to oppose (to the extent such opposition is in compliance with the terms of this Agreement and applicable law) such Change of Control Transaction or (2) following any Change of Control Transaction, provided that no GE Parties participated in any manner in the relevant Change of Control Transaction, or (c) any Transfers by any member of a Group or a Permitted Transferee (as defined below) thereof, on the one hand, to another member of such Group or a Permitted Transferee of any member of such Group, on the other hand, provided, that any such Permitted Transferee in each such case agrees in a writing satisfactory to counsel for the Groups of which the relevant transferor is not a member (or a Permitted Transferee thereof) to be bound by all of the terms and conditions of this Agreement as if named as a "Shareholder" hereunder. For purposes of this Agreement, a "Permitted Transferee" of any Person shall be (a) the Company (b) such Person's spouse, parents, step-parents, brothers, sisters or half-siblings; (c) such Person's children, step-children or their lineal descendants; (d) any trust of which such Person is the trustee and the sole beneficiaries of which are such Person, such Person's spouse, parents, step-parents, brothers, sisters, half-siblings, children, step-children or their lineal descendants; (e) any partnership, the general partner(s) and limited partner(s) (if any) of which are one or more of such Person, such Person's spouse, parents, step-parents, brothers, sisters, half-siblings, children, step-children or their lineal descendants; or (f) any affiliate of such Person. (vi) If at any time the members of any Group (together with any other Founders Parties or GE Parties, as applicable) no longer collectively hold 50% of the Ordinary Shares held by them on the date of this Agreement, such Group (together with any other Founders Parties or GE Parties, as applicable) shall no longer have rights to a First Option or the Second Option in relation to any Offered Shares and all calculations pursuant to Section 4(ii) hereof shall be made without inclusion of any Ordinary Shares held by members of such Group (together with any other 13 Founders Parties or GE Parties, as applicable); provided that, upon reasonable request of any other Group, each Group shall reasonably and in good faith determine whether it intends to exercise any first-refusal rights under this Section 4 and shall reasonably promptly give notice of such determination to the other Groups and, following any such notice of having no intention of exercising its rights, until such time as such Group notifies the other Groups of a change of its intentions, such Group shall no longer have rights to a First Option or the Second Option in relation to any Offered Shares and all calculations pursuant to Section 4(ii) hereof shall be made without inclusion of any Ordinary Shares held by members of such Group (together with any other Founders Parties or GE Parties, as applicable). In addition, if at any time the members of any Group (together with any other Founders Parties or GE Parties, as applicable) no longer collectively hold 5% or more of the Ordinary Shares then outstanding, such Group (together with any other Founders Parties or GE Parties, as applicable) shall be permitted to sell the Ordinary Shares held by members of such Group (together with any other Founders Parties or GE Parties, as applicable) without giving effect to the restrictions set forth in this Section 4. (vii) The provisions of this Section 4 shall apply regardless of the form of consideration contained in the Shareholder Offer. If and to the extent that any Shareholder Offer shall include any non-cash consideration, any member of an Other Group may exercise its rights under its First Option or Second Option, as applicable, with respect to the non-cash consideration portion of such Shareholder Offer by delivering either substantially identical non-cash consideration or cash in the amount of the fair market value of such non-cash consideration, which fair market value shall be determined by agreement of the relevant parties or by a nationally recognized independent valuation consultant or appraiser (with experience in evaluating such property) selected by the relevant member of the Other Group and reasonably satisfactory to the Offering Shareholder. 5. Representations and Warranties of the Shareholders. Each of the Shareholders represents and warrants to each other as follows: 5.1 Organization. If it is an entity, it is a corporation, limited partnership or other entity duly organized and validly existing under the laws of its respective jurisdiction of organization. 5.2 Authority. It has full power and authority to execute, deliver and perform this Agreement and to consummate the transactions contemplated hereby. 5.3 Binding Obligation. The execution, delivery and performance of this Agreement by it and the consummation by it of the transactions contemplated hereby have been duly and validly authorized by all necessary action on its part, 14 and this Agreement constitutes its binding obligation, enforceable against it in accordance with its terms, except insofar as enforceability may be limited by bankruptcy, insolvency, moratorium or other laws which may affect creditors' rights and remedies generally and by principles of equity (regardless of whether enforceability is considered in a proceeding in equity or at law). 5.4 No Conflict. The execution, delivery and performance of this Agreement by it and the consummation by it of the transactions contemplated hereby will not, with or without the giving of notice or the lapse of time, or both, (i) violate any provision of law, statute, rule or regulation to which it is subject, (ii) violate any order, judgment or decree applicable to it, or (iii) conflict with, or result in a breach or default under, any term or condition of its certificate of incorporation, bylaws or equivalent governing document or any material agreement or other material instrument to which it is a party or by which it or its property is bound. Section 6. Legend on Certificates. The Shareholders agree that the following legend or such legend as shall be substituted therefor by amendment of this Agreement shall be placed on the certificates representing any Ordinary Shares owned by each of them and shall be maintained on each and every such certificate so long as the applicable restrictions contained in this Agreement remain in effect: "THE SHARES EVIDENCED BY THIS CERTIFICATE ARE SUBJECT TO THE PROVISIONS OF A SHAREHOLDERS' AGREEMENT DATED AS OF DECEMBER 31, 1998 (THE "SHAREHOLDERS' AGREEMENT") AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED EXCEPT IN ACCORDANCE WITH THE SHAREHOLDERS' AGREEMENT, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY." Section 7. Term of Agreement. This Agreement shall terminate on the tenth anniversary of this Agreement. Section 8. Entire Agreement; Amendments. This Agreement, including the other documents and writings referred to herein or delivered pursuant hereto and which form a part hereof, contains the entire understanding of the parties with respect to its subject matter. There are no restrictions, agreements, promises, warranties, covenants or undertakings with respect to such matters other than those expressly set forth herein or therein. This Agreement supersedes all prior agreements and understandings between the parties with respect to its subject matter, including but not limited to the Voting Agreement, dated as of March 25, 1993, by and among the Founders, the IDB Group and the Athena Group (as defined therein), and the Shareholders Agreement, dated as of March 25, 1993, by and among the Founders and the IDB Group, both of which hereby shall be terminated for all purposes as of the date of this Agreement; provided, that all of 15 the parties hereto acknowledge the existence of a voting agreement among the members of the IDB Group, which voting agreement will remain in full force and effect after the date of this Agreement until amended, modified or terminated by the parties thereto. This Agreement may not be amended except by an instrument in writing signed on behalf of all of the parties hereto. Any agreement on the part of a party hereto to any extension or waiver shall be valid only if set forth in an instrument in writing signed on behalf of such party. Section 9. Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated. It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any of such which may be hereafter declared invalid, void or unenforceable. Section 10. Headings. The section and paragraph headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. Section 11. Notices. All notices, requests, claims, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given on the date of delivery, if personally delivered, or if mailed (registered or certified mail (in the case of international mailings, by first-class air-mail), postage prepaid, return receipt requested), on the fifth (5th) business day following mailing as follows: If to the Founders Group: c/o Gilat Satellite Networks Ltd. Gilat House Yegia Kapayim St., Kiryat Arye Petah Tikva 49130 Israel Fax: (972) 3-921-2252 Attention: General Counsel with a copy to: Kleinhendler & Halevy 30 Kalisher Street Tel Aviv, Israel 65257 Fax: (972) 3-510-7528 Attention: Gene Kleinhendler, Adv. and 16 Skadden, Arps, Slate, Meagher & Flom LLP 919 Third Avenue New York, NY 10022 Fax: (212) 735-2000 Attention: Hildy Shandell, Esq. If to the IDB Group: c/o DIC Communication and Technology Ltd. 14 Beit Hashoeva Lane Tel Aviv, Israel 65814 Fax: 972-3-560-2327 Attention: The Managing Director and c/o PEC Israel Electric Corporation 511 Fifth Avenue New York, New York 10017 Fax: (212) 509-6281 Attention: President If to GE: c/o GE American Communications, Inc. 4 Research Way Princeton, NJ 08540-6684 Fax: (609) 987-4233 Attention: General Counsel with a copy to: Hogan & Hartson L.L.P. 555 13th Street NW Washington, D.C. 20004 Fax: 202-637-5910 Attention: Steve Kaufman, Esq. or to such other address as any party may have furnished to the others in writing in accordance herewith, except that notices of change of address shall only be effective fifteen days after mailing notice thereof as set forth above. Section 12. Successors and Assigns. All agreements herein contained shall apply to and bind, and inure to the benefit of and be enforceable by, each of the parties hereto and each of their respective heirs, executors, administrators, successors and permitted assigns. Section 13. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LOCAL 17 LAW OF THE STATE OF ISRAEL WITHOUT GIVING EFFECT TO CHOICE OF LAW PRINCIPLES. Section 14. Recapitalization, Exchanges, Stock Options, etc. Affecting the Ordinary Shares. As used in this Agreement, Ordinary Shares include any such shares issued upon exercise of stock options, warrants or other convertible securities. The provisions of this Agreement shall apply to the full extent set forth herein with respect to (a) the Ordinary Shares and any option, right or warrant to acquire Ordinary Shares and owned on the date hereof or hereafter acquired, and (b) any and all shares of capital stock of the Company or any successor or assign of the Company (whether by merger, consolidation, sale of assets or otherwise) which may be issued in respect of, in exchange for, or in substitution for the Ordinary Shares, by combination, recapitalization, reclassification, merger, consolidation or otherwise. In the event of any change in the capitalization of the Company, as a result of any stock split, stock dividend or stock combination, the provisions of this Agreement shall be appropriately adjusted. Section 15. Consent to Jurisdiction. Each Shareholder agrees that any proceeding arising out of or relating to this Agreement or the breach or threatened breach of this Agreement may be commenced and prosecuted in a court in the State of Israel. Each Shareholder hereby irrevocably and unconditionally consents and submits to the non-exclusive personal jurisdiction of any court in the State of Israel in respect of any such proceeding. Each Shareholder consents to service of process upon it with respect to any such proceeding by registered mail, return receipt requested, and by any other means permitted by applicable laws and rules. Each Shareholder waives any objection that it may now or hereafter have to the laying of venue of any such proceeding in any court in the State of Israel and any claim that it may now or hereafter have that any such proceeding in any court in the State of Israel has been brought in an inconvenient forum. Section 16. Injunctive Relief. Each of the parties to this Agreement acknowledges and agrees that in the event of any breach of this Agreement, the non-breaching party or parties would be irreparably harmed and could not be made whole by monetary damages. It is accordingly agreed that the parties will waive the defense in any action for injunctive relief, including specific performance, that a remedy at law would be adequate and that the parties, in addition to any other remedy to which they may be entitled to at law or in equity, shall be entitled to injunctive relief, including specific performance, to enforce this Agreement in any action instituted in any court of the State of Israel or any court in the United States or any state thereof having subject matter jurisdiction for such action. Section 17. Additional Documents. Each party hereto agrees to execute any and all further documents and writings within its powers and to perform such other actions which may be or become necessary or expedient to effectuate and carry out this Agreement. 18 Section 18. No Third-Party Benefits. None of the provisions of this Agreement shall be for the benefit of, or enforceable by, any third-party beneficiary. Section 19. No Inconsistent Agreements. None of the parties hereto will hereafter enter into any agreements with respect to its Ordinary Shares which are inconsistent with or violate in any material respects the rights granted to the other parties under this Agreement. Section 20. Information Regarding Beneficial Ownership. Each Shareholder agrees to promptly provide to the Company and the other Shareholders any information or representations that the Company or such other Shareholder may reasonably request regarding such holder's beneficial ownership of Ordinary Shares. Section 21. Counterparts. This Agreement may be executed simultaneously in one or more counterparts, each of which shall be deemed to be an original but all of which together shall constitute one and the same instrument. Section 22. Definition. As used in this Agreement, "business day" shall refer to any day which in the City of New York and in the State of Israel is neither a legal holiday nor a day on which banking institutions are required or authorized by law or regulation to close. 19 IN WITNESS WHEREOF, the parties hereto have executed and delivered this Agreement as of the date first above written. By: /s/ Yoel Gat By: /s/ Amiram Levinberg -------------------------- -------------------------- Name: Yoel Gat Name: Amiram Levinberg Number of Number of Ordinary Shares: 204,465 Ordinary Shares: 380,465 By: /s/ Joshua Levinberg By: /s/ Shlomo Tirosh -------------------------- -------------------------- Name: Joshua Levinberg Name: Shlomo Tirosh Number of Number of Ordinary Shares: 94,120 Ordinary Shares: 340,570 By: /s/ Gideon Kaplan -------------------------- Name: Gideon Kaplan Number of Ordinary Shares: 212,795 DIC COMMUNICATION AND PEC ISRAEL ECONOMIC CORPORATION TECHNOLOGY LTD. By: /s/ Dov Tadmor By: /s/ William Gold -------------------------- -------------------------- Name: Dov Tadmor Name: William Gold Title: Managing Director Title: Treasurer Number of Number of Ordinary Shares: 682,418 Ordinary Shares: 746,917 GENERAL ELECTRIC COMPANY By: /s/ James R. Bunt -------------------------- Name: James R. Bunt Title: Vice President and Treasurer Number of Ordinary Shares: 72,496 20 GE AMERICAN COMMUNICATIONS, INC. By: /s/ John F. Connelly ------------------------- Name: John F. Connelly Title: President and Chief Executive Officer Number of Ordinary Shares: 4,766,621 GENERAL ELECTRIC FINANCE HOLDING GMBH By: /s/John F. Connelly ------------------------- Name: John F. Connelly Title: Attorney-in-Fact Number of Ordinary Shares: 152,716 GENERAL ELECTRIC PLASTICS B.V. By: /s/ John F. Connelly ------------------------- Name: John F. Connelly Title: Attorney-in-Fact Number of Ordinary Shares: 8,167 21 EX-3 4 EXHIBIT 3 EXHIBIT 3 NON-TRANSFERABLE CONTINGENT STOCK RIGHT THIS NON-TRANSFERABLE CONTINGENT STOCK RIGHT ("Right") is entered into as of December 31, 1998, by and among GE AMERICAN COMMUNICATIONS, INC., a Delaware corporation ("GE Americom"), GE CAPITAL SPACENET SERVICES, INC., a Delaware corporation and a wholly owned subsidiary of GE Americom ("Spacenet"), GILAT SATELLITE NETWORKS LTD., a corporation organized under the laws of Israel ("Gilat"), and JONAH ACQUISITION CORP., a Delaware corporation and a wholly owned subsidiary of Gilat ("Merger Sub"). WHEREAS, GE Americom, Spacenet, Gilat and Merger Sub have entered into an Agreement and Plan of Merger dated as of September 25, 1998 ("Merger Agreement") pursuant to which Merger Sub will be merged with and into Spacenet, pursuant to and subject to the terms and conditions of the Merger Agreement; WHEREAS, this Right represents a portion of the consideration being paid by Gilat for Spacenet and is being delivered by Gilat to GE Americom pursuant to Section 2.1(b) of the Merger Agreement; WHEREAS, each capitalized term used herein and not otherwise defined shall have the meaning set forth in the Merger Agreement; NOW, THEREFORE, in consideration of the foregoing and of the respective agreements hereinafter set forth, the parties hereto hereby agree as follows: ARTICLE I. POST-CLOSING ADJUSTMENTS SECTION 1.1. Post-Closing Adjustments. (a) Closing Balance Sheet. Within 90 days after the Closing Date, GE Americom shall cause to be prepared and delivered to Gilat an audited consolidated balance sheet of Spacenet and the Spacenet Subsidiaries (which, for purposes of this Section 1.1, shall include those entities set forth on Schedule 2.2(a) of the Merger Agreement) as of the Closing Date (the "Closing Audited Balance Sheet"), which Closing Audited Balance Sheet shall be prepared by GE Americom in accordance with generally accepted accounting principles, as in effect in the United States, and substantially in the form of and in a manner consistent with past practice, and which shall be audited by KPMG Peat Marwick LLP or such other "Big Five" accounting firm (other than PricewaterhouseCoopers LLP) as GE Americom shall determine. Together with the Closing Audited Balance Sheet, GE 1 Americom shall deliver to Gilat a balance sheet (hereinafter referred to as the "Adjusted Closing Audited Balance Sheet") which shall be identical to the Closing Audited Balance Sheet except that it shall be adjusted (w) to exclude any bad debt reserve or similar reserve with respect to accounts receivable, (x) to include $2.0 million for the contract referred to in Schedule 2.2(k) of the Merger Agreement, (y) to exclude the Excluded Balance Sheet Assets (as defined in Section 1.1(b)) as provided in Section 1.1(b) below and (z) to deduct the Balance Sheet Liabilities (as defined in Section 1.1(c)) as provided in Section 1.1(c) below (but shall not be adjusted to add any amount for spare parts). (b) Excluded Assets and Adjusting Liabilities. The following balance sheet items (collectively, the "Excluded Balance Sheet Assets") shall be excluded from the Adjusted Closing Audited Balance Sheet: (i) Any Deferred Tax Asset (as defined in Schedule 2.2 of the Merger Agreement); (ii) Any goodwill asset other than the AB Goodwill (as defined in Schedule 2.2 of the Merger Agreement); (iii) Any TR Inventory (as defined in Schedule 2.2 of the Merger Agreement) in excess of $5.5 million; (iv) Any TR Fixed Assets (as defined in Schedule 2.2 of the Merger Agreement) in excess of $8 million; (v) Any TS Prepaid and Long Term Assets (as defined in Schedule 2.2 of the Merger Agreement); and (vi) Any Spacenet Intercompany Receivables (as defined in Schedule 2.2 of the Merger Agreement); and (vii) An amount of $3.0 million. (c) Balance Sheet Liabilities. The following balance sheet items (collectively, the "Balance Sheet Liabilities") shall be deducted from the Adjusted Closing Audited Balance Sheet: (i) $500,000; (ii) Any TS/CL Liabilities (as defined in Schedule 2.2 of the Merger Agreement) in excess of $2.5 million; and (iii) Any Spacenet Intercompany Payables (as defined in Schedule 2.2 of the Merger Agreement). 2 (d) Resolution of Objections. If Gilat or its representatives shall have any objections to the Adjusted Closing Audited Balance Sheet, Gilat shall deliver a written notice describing such objections to GE Americom within 60 days after receiving the Adjusted Closing Audited Balance Sheet. Gilat and GE Americom (by themselves or through their respective representatives) will use their reasonable best efforts to engage in good-faith negotiations to resolve any such objections promptly after receipt by GE Americom of such notice. If a final resolution is not obtained promptly after GE Americom first receives notice of Gilat's objections to the Adjusted Closing Audited Balance Sheet, the parties shall submit their disagreement to Deloitte & Touche LLP or such other "Big Five" accounting firm (other than KPMG Peat Marwick LLP or PricewaterhouseCoopers LLP) as GE Americom and Gilat may agree upon (the "Independent Third Party") for resolution. The Independent Third Party, acting as experts and not as arbitrators, upon a review of the Adjusted Closing Audited Balance Sheet and consideration of the written objections thereto, shall resolve any such remaining objections and revise the Adjusted Closing Audited Balance Sheet (as agreed to by GE Americom and Gilat or as revised following resolution by the Independent Third Party, the "Final Adjusted Closing Audited Balance Sheet"), determine the Consideration Adjustment (as defined in Section 1.1(e)), if any, and communicate the foregoing to Gilat and GE Americom in writing, not later than 30 days following the submission of such dispute to the Independent Third Party (unless Gilat and GE Americom agree, upon request of the Independent Third Party, to provide the Independent Third Party with additional time to make its determination, which agreement shall not be unreasonably withheld). (e) Consideration Adjustment. In the event that the net assets, calculated by subtracting total net liabilities from total net assets on the Final Adjusted Closing Audited Balance Sheet (the "Net Assets"), shall be equal to or greater than Eighty-Five Million U.S. Dollars ($85,000,000) (the "Required Amount"), Gilat shall, within six months after the Closing Date (if possible) and in any event promptly after final determination of the Net Asset amount (either by agreement of Gilat and GE Americom or the determination of the Independent Third Party), issue and deliver to GE Americom such number of Gilat Ordinary Shares as is equal in value to the amount by which Net Assets exceeds the Required Amount (the "Consideration Adjustment"), with each Gilat Ordinary Share being deemed to have a value equal to (a) if the average closing price of the Gilat Ordinary Shares on the Nasdaq Stock Market for the five consecutive trading days immediately preceding the date of determination is more than 10% higher or more than 10% lower, as the case may be, than $41.3816 (the "Determination Price"), then such average closing price, or (b) if such average closing price is within 10% of $41.3816, then $41.3816. For the avoidance of doubt, in order to calculate the Net Assets, Gilat and GE Americom agree that any Spacenet inventory resulting from the equipment purchases referred to in paragraph (1) of Schedule 6.19 of the Merger Agreement and paid for prior to Closing shall be included in computing Net 3 Assets; any inventory that is not paid for, and any payable associated therewith, shall be excluded in computing Net Assets. (f) Utilization of Deferred Tax Asset. For the period following the Closing through the fifth anniversary thereof, to the extent that the Surviving Corporation and the Spacenet Subsidiaries, on a consolidated basis, have pre-tax gross income in any calendar year, Gilat shall within 45 days after the end of each such calendar year notify GE Americom in writing of the amount of the pre-tax gross income and the amount of U.S. corporate income tax the Surviving Corporation would have paid if such pre-tax gross income had constituted taxable income to the Surviving Corporation for such calendar year ("Post-Closing Tax Savings"). Within 10 days of receipt of such notice, Gilat shall issue to GE Americom a number of Gilat Ordinary Shares equal to the amount of the Post-Closing Tax Savings divided by the Determination Price. Notwithstanding the foregoing, Gilat shall not be obligated to issue any Gilat Ordinary Shares to GE Americom to the extent that the aggregate amount of Post-Closing Tax Savings exceeds the lesser of the Deferred Tax Asset and $2 million. (g) Determinations of Independent Third Party. The determinations of the Independent Third Party shall for all purposes (including without limitation purposes of Section 1.3(b)) be conclusive, final and non-appealable, shall not be subject to judicial review under any circumstances and shall be binding on Gilat and GE Americom and their respective affiliates. Each of Gilat and GE Americom and their respective affiliates hereby waive the right to appeal any decision of the Independent Third Party, whether to a court of law or otherwise, or to seek to stay or vacate any determination of the Independent Third Party. The fees and expenses of the Independent Third Party incurred in the resolution of such objections shall be shared equally by Gilat and GE Americom. In all cases, Gilat and GE Americom each shall provide each other, their respective representatives and the Independent Third Party full reasonable access to the books and records, any other information, including work papers of its accountants, and to any employees to the extent necessary for the preparation of all financial statements referred to in this Section 1.1. (h) Issuances in Lieu of Cash. To the extent that the amount of any cash that GE Americom has a right to receive pursuant to the Merger Agreement is reduced pursuant to Section 2.4 of the Merger Agreement, GE Americom shall be entitled under this Right to receive from Gilat a number of Gilat Ordinary Shares with a value that is equal to the amount by which such cash is reduced (with each Gilat Ordinary Share being deemed to have a value equal to the Determination Price). 4 SECTION 1.2. CERTAIN RESTRICTIONS. (a) Until the time Gilat Ordinary Shares are issued under this Right, dividends will not accrue on and GE Americom will not be entitled to any dividends on the Gilat Ordinary Shares which may be issued under this Right, and GE Americom will not be entitled to exercise any voting rights of such shares. (b) The maximum number of Gilat Ordinary Shares to be issued purant to this Right shall not exceed the lesser of (i) Three Million (3,000,000) Gilat Ordinary Shares or (ii) the number of Gilat Shares issued to GE Americom pursuant to Section 2.1(b) of the Merger Agreement minus one. (c) All Gilat Ordinary Shares to be issued pursuant to this Right shall be issued within five (5) years from the Closing Date. (d) In no event shall GE Americom be entitled to receive any cash or property other than Gilat Ordinary Shares pursuant to this Right. SECTION 1.3. CERTAIN ADJUSTMENTS. (a) If between the date hereof and the time at which Gilat is required to deliver Gilat Ordinary Shares to GE Americom pursuant to this Right, the outstanding Gilat Ordinary Shares shall be changed into a different number of shares by reason of any reclassification, recapitalization, split-up, combination or exchange of shares, or any dividend payable in shares or other securities shall be declared thereon with a record date within such period, the number of Gilat Ordinary Shares to be delivered to GE Americom pursuant to this Right shall be adjusted accordingly to provide to GE Americom the same economic effect as contemplated by this Right prior to such reclassification, recapitalization, split-up, combination, exchange or dividend. (b) If between the date hereof and the time at which Gilat is required to deliver Gilat Ordinary Shares to GE Americom pursuant to this Right, Gilat agrees to sell all or substantially all of its assets or agrees to any merger, consolidation, reorganization, division or other corporate transaction in which Gilat Ordinary Shares are converted into another security or into the right to receive securities or property, Gilat and GE Americom agree that any Gilat Ordinary Shares to be issued under this Right shall be issued prior to such conversion. GE Americom and Gilat shall engage in good faith negotiations to determine the number of Gilat Ordinary Shares to be issued. If GE Americom and Gilat are unable to promptly resolve such determination, the parties shall submit their disagreement to the Independent Third Party for prompt resolution. Such issuance of Gilat Ordinary Shares shall be in full satisfaction of Gilat's obligation to issue Gilat Ordinary Shares pursuant to this Right. 5 ARTICLE II. GENERAL PROVISIONS SECTION 2.1. NOTICES. All notices and other communications given or made pursuant hereto shall be in writing and shall be deemed to have been duly given or made as of the date delivered, mailed or transmitted, and shall be effective upon receipt, if delivered personally, mailed by registered or certified mail (postage prepaid, return receipt requested) to the parties at the following addresses (or at such other address for a party as shall be specified by like changes of address) or sent by electronic transmission to the telecopier number specified below: (A) If to GE Americom or Spacenet: GE American Communications, Inc. Four Research Way Princeton, NJ 08540-6684 Telecopier No.: (609) 987-4381 Attention: John Dimarco WITH A COPY (WHICH SHALL NOT CONSTITUTE NOTICE) TO: Hogan & Hartson L.L.P. Columbia Square 555 Thirteenth Street, N.W. Washington, D.C. 20004 Telecopier No.: (202) 637-5910 ATTENTION: Peter A. Rohrbach, Esq. (B) If to Gilat or Merger Sub: Gilat Satellite Networks Ltd. Yegia Kapayim St., Kiryat Arye Petah Tikva 49130 Israel Telecopier No.: (972) 3-921-3321 Attention: Yoav Leibovitch 6 WITH A COPY (WHICH SHALL NOT CONSTITUTE NOTICE) TO: Kleinhendler & HaLevy Law Offices 30 Kalisher Street Tel-Aviv 65257 Israel Telecopier No.: (972)3-510-7528 Attention: Gene Kleinhendler, Esq. and Skadden, Arps, Slate, Meagher & Flom LLP 919 Third Avenue New York, N.Y. 10022 Telecopier No.: (212) 735-2000 Attention: Hildy Shandell, Esq. SECTION 2.2. HEADINGS. The headings contained in this Right are for reference purposes only and shall not affect in any way the meaning or interpretation of this Right. SECTION 2.3. SEVERABILITY. If any term or other provision of this Right is invalid, illegal or incapable of being enforced by any rule of law or public policy, all other conditions and provisions of this Right shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Right so as to effect the original intent of the parties as closely as possible in an acceptable manner to the end that the transactions contemplated hereby are fulfilled to the extent possible. SECTION 2.4. ENTIRE AGREEMENT. This Right (together with the Merger Agreement and the Exhibits, the Schedules and the other documents delivered pursuant hereto and thereto) and the Confidentiality Agreement constitute the entire agreement of the parties and supersede any prior agreements and undertakings, both written and oral, between the parties, or any of them, with respect to the subject matter hereof and, except as otherwise expressly provided herein, are not intended to confer upon any other person any rights or remedies hereunder. 7 SECTION 2.5. SPECIFIC PERFORMANCE. The transactions contemplated by this Right are unique. accordingly, each of the parties acknowledges and agrees that, in addition to all other remedies to which it may be entitled, each of the parties hereto is entitled to a decree of specific performance, provided such party is not in material default hereunder. SECTION 2.6. ASSIGNMENT. Neither this Right nor any of the rights, interests or obligations hereunder shall be assigned by any of the parties hereto (whether by operation of law or otherwise). this Right shall be binding upon, inure to the benefit of and be enforceable by the parties and their respective successors and assigns. SECTION 2.7. THIRD PARTY BENEFICIARIES. This Right shall be binding upon and inure solely to the benefit of each party hereto, and nothing in this Right, express or implied, is intended to or shall confer upon any other person any Right, benefit or remedy of any nature whatsoever under or by reason of this right. SECTION 2.8. GOVERNING LAW. Except as otherwise provided herein, this Right 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 principles of conflicts of law. SECTION 2.9. COUNTERPARTS. This Right may be executed and delivered in one or more counterparts, and by the different parties hereto in separate counterparts, each of which when executed and delivered shall be deemed to be an original but all of which taken together shall constitute one and the same agreement. 8 IN WITNESS WHEREOF, each of the parties hereto has caused this Right to be executed and delivered on its behalf as of the date first written above. GE AMERICAN COMMUNICATIONS, INC. By: /s/ John F. Connelly --------------------------- Name: John F. Connelly Title: President and Chief Executive Officer GE CAPITAL SPACENET SERVICES, INC. By: /s/ Gino O. Picasso ---------------------------- Name: Gino O. Picasso Title: President GILAT SATELLITE NETWORKS LTD. By: /s/ Yoel Gat ------------------------------ Name: Yoel Gat Title: Chief Executive Officer JONAH ACQUISITION CORPORATION By: /s/ Yoav Leibovitch ------------------------------- Name: Yoav Leibovitch Title: Vice President, Chief Financial Officer and Secretary 9 EX-4 5 EXHIBIT 4 EXHIBIT 4 REGISTRATION RIGHTS AGREEMENT REGISTRATION RIGHTS AGREEMENT, dated as of December 31, 1998 (the "Agreement"), among Gilat Satellite Networks Ltd., a corporation formed under the laws of the State of Israel (the "Company"), General Electric Company, a corporation incorporated under the laws of the State of New York ("GE Parent"), GE American Communications, Inc., a corporation incorporated under the laws of the State of Delaware ("GE Americom"), General Electric Finance Holding GmbH, a corporation formed under the laws of Germany ("GmbH"), and General Electric Plastics B.V., a corporation formed under the laws of the Netherlands ("BV," and, collectively with GE Parent, GMBH and GE Americom, "GE"). 1. Introduction. The parties hereto are parties to (i) the separate Agreement and Plan of Merger (the "US Merger Agreement"), dated September 25, 1998, with GE Americom, GE Capital Spacenet Services, Inc. ("Spacenet"), the Company and Jonah Acquisition Corp., (ii) the separate Stock Purchase Agreement (the "GMBH Agreement"), dated September 25, 1998, by and between GmbH and the Company, (iii) the separate Stock Purchase Agreement (the "BV Agreement," and, together with the GMBH Agreement and the US Merger Agreement, collectively, the "Merger Agreement"), dated September 25, 1998, by and between BV and the Company, respectively, pursuant to which the Company has agreed, among other things, to issue 4,927,504 shares (the "Merger Shares") of its Ordinary Shares, par value NIS 0.01 per share (the "Ordinary Shares"), to GE and (iv) the separate Trademark Agreement, dated December 31, 1998 (the "Trademark Agreement"), among GE Parent, Spacenet and the Company, pursuant to which the Company has agreed among other things, to issue 72,496 Ordinary Shares (the "Trademark Shares," and, together with the Merger Shares and any Contingent Shares (as defined below), the "GE Shares") to GE Parent. This Agreement shall become effective upon the issuance of such securities to GE pursuant to the Merger Agreement and to GE Parent pursuant to the Trademark Agreement. Concurrently with the execution hereof, GE is entering into a Shareholders' Agreement with certain other shareholders of the Company (the "Shareholders Agreement") with respect to the Ordinary Shares owned by it. Certain capitalized terms used in this Agreement are defined in Section 2 hereof; unless otherwise stated, references to sections shall be to sections of this Agreement. 2. Definitions. For the purposes of this Agreement: (1) The term "Affiliate" means, with respect to any Person, any other Person that, directly or indirectly controls, or is controlled by or under common control with the first such Person. For the purpose of this definition, "control" (including the terms "controlling", "controlled by" and "under common control with"), as used with respect to any Person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities or by contract or agency or otherwise. (2) The term "Bulk Transferee" means any Person other than GE or any of its Affiliates who is at such time a holder of GE Shares representing at least 5% of the then outstanding Ordinary Shares, provided that (x) the transfer of such GE Shares to, and the holding of such shares by, such Bulk Transferee complies in all respects with the applicable terms of the Shareholders Agreement and (y) such Bulk Transferee executes an instrument, in form and substance reasonably satisfactory to the Company, pursuant to which it agrees to be bound by the terms of this Agreement as if named as a party herein. (3) The term "Holder" means a holder of Registrable Securities or, unless the context otherwise requires, securities convertible into or exercisable for Registrable Securities; provided that no Person shall be a Holder for the purposes of this Agreement unless (i) such Person is GE or an Affiliate of GE or a Bulk Transferee and (b) any transfer to, and the holding by, such Person of such Registrable Securities are in compliance with the terms of the Shareholders Agreement. (4) The term "Person" shall mean an individual or a corporation, association, partnership, limited liability company, joint venture, organization, business, trust or any other entity or organization, including a government or any subdivision or agency thereof, and shall include any successor (by merger or otherwise) of such entity. (5) The terms "register," "registered" and "registration" refer to a registration effected by preparing and filing a registration statement in compliance with the Securities Act and the declaration or ordering of effectiveness of such registration statement. (6) The term "Registrable Securities" means any GE Shares issued pursuant to the Merger Agreement and the Trademark Agreement or pursuant to the Non-Transferable Contingent Stock Right described in Section 2.1 of the Merger Agreement (any shares issued under such Non-Transferable Contingent Stock Right being referred to herein as "Contingent Shares") and, in each case, held by GE or any of its Affiliates or any Bulk Transferee (and any and all shares of capital stock of the Company or any successor or assign of the Company (whether by merger, consolidation, sale of assets or otherwise) which may be issued in respect of, in exchange for, or in substitution for such GE Shares or Contingent Shares, by combination, recapitalization, reclassification, dividend, merger, consolidation or otherwise); provided, however, that Registrable Securities shall cease to be Registrable Securities when and to the extent that (i) such Registrable Securities have been sold pursuant to an effective registration statement under the Securities Act or pursuant to an exemption from the 2 registration requirements thereof (other than pursuant to the "First Immediate Registration Statement" or an "Additional Registration Statement" as contemplated by Section 3.1(1)), (ii) such Registrable Securities have become eligible for resale pursuant to Rule 144(k) of the Securities Act (or any similar provision then in force) or (iii) such Registrable Securities have ceased to be outstanding. (7) The term "Securities Act" shall mean the Securities Act of 1933, as amended, or any successor statute. (8) The term "Underwritten Offering" shall mean a firm commitment public offering through a nationally recognized underwriter. 3. Registration under Securities Act, etc. 3.1 Immediate, Contingent, Initial and Tax Demand Registrations (1) Immediate Registration. The Company shall use its reasonable best efforts to prepare and cause to be filed with the Securities and Exchange Commission (the "Commission") a registration statement on Form F-3 or any other applicable short-form registration statement relating to the sale by the Holders of all Registrable Securities (the "First Immediate Registration Statement"), which First Immediate Registration Statement shall be filed at such time as GE and the Company reasonably agree will allow the Company in using its reasonable best efforts to cause such First Immediate Registration Statement to be declared effective by the Commission on the Closing Date or as soon as reasonably practicable thereafter. The Company shall promptly notify GE of such effectiveness. The Company shall keep such First Immediate Registration Statement effective until the Holders, using all reasonable practical and diligent efforts, are able to effect the transfer of their Registrable Securities to certain of their Affiliates. The Company shall reasonably cooperate with the Holders in enabling them to effect such transfers, which transfers shall (a) solely be made to one or more Affiliates of GE and (b) comply in all respects with the terms of the Shareholders Agreement. GE shall immediately notify the Company of the completion of the relevant transfers. The Company shall have the right to withdraw the effectiveness of the First Immediate Registration Statement (x) at any time from and after receipt of the notification described in the preceding sentence from GE and (y) at any time (following notice from the Company to GE of the effectiveness of the First Immediate Registration Statement) that the Holders are not using all reasonable practical and diligent efforts to effect the transfer of their Registrable Securities (provided that GE shall be deemed not to be using all reasonable practical and diligent efforts to effect such transfer if, without limitation, GE shall not have sent its written request to the transfer agent with respect to the transfer of the Registrable Securities and taken all such other steps reasonably in its control in order to effect the transfer of Registrable Securities within ten (10) business days of being notified by the Company of the 3 effectiveness of the First Immediate Registration Statement). If following the date hereof (i) the Company issues or proposes to issue Contingent Shares to any of the Holders or (ii) GE's counsel advises GE that it is reasonably necessary or advisable for GE Parties to register additional transfers ("Counsel Recommended Transfers") solely among GE and its Affiliates in addition to the First Immediate Registration Statement and GE so notifies the Company in writing (attaching a copy of the advice from counsel), the Company shall (subject to Section 3.4 below) reasonably promptly file up to one (and not more than one) additional registration statement with respect to Contingent Shares and such registration statements as are necessary to register the Counsel Recommended Transfers, in each case on Form F-3 or any other applicable short-form registration statement (an "Additional Immediate Registration Statement," and, together with the First Immediate Registration Statement, an "Immediate Registration Statement") at such time as reasonably designated by written notice to the Company from any GE party and use its reasonable best efforts to cause such Additional Immediate Registration Statement to be declared effective by the Commission as soon as reasonably practicable thereafter; provided, however, to the extent that the First Immediate Registration Statement is still effective at such time, the Company may use such First Immediate Registration Statement, as amended or supplemented, to fulfill its obligations with respect to the filing of an Additional Immediate Registration Statement. All of the procedures, rights and obligations set forth herein with respect to the First Immediate Registration Statement shall then apply with respect to such Additional Immediate Registration Statement. Notwithstanding anything herein to the contrary, in connection with any Immediate Registration Statement, (q) all reasonable costs and expenses incurred in connection with any registration, filing and offering of Registrable Securities pursuant to this Section 3.1(1), including (without limitation) all reasonable registration, filing and qualification fees, printers' and accounting fees, fees and disbursements of counsel for the Company and all reasonable costs incurred in connection with the preparation of the Immediate Registration Statement, shall be paid and borne by GE and GE shall promptly reimburse the Company for any such costs or expenses incurred by the Company or any of its Affiliates and (r) all sections of the Immediate Registration Statement relating to the transfer of securities thereunder, including any "plan of distribution" or similar section and any section relating to the selling shareholders, shall be prepared by GE; provided, however, that if any securities other than Registrable Securities are registered on any Immediate Registration Statement, a pro rata share of all costs shall be allocated to such other securities and shall not be the responsibility of GE. (2) Contingent Demand Registration Request. If Gilat is in breach of any of its representations, warranties and consents set forth in the Merger Agreement, which breach is likely to result in a Jonah Material Adverse Effect (as defined in the Merger Agreement), upon receipt of a written request from GE (the "Contingent Demand Notice"), the Company shall use its reasonable best efforts to prepare and cause to be filed with the Commission as soon as reasonably 4 practicable after receipt of such notice a registration statement relating to the offer and sale by Holders of Registrable Securities (the "Contingent Demand Shares") for which registration is requested in the Contingent Demand Notice (the "Contingent Demand Registration Statement"). The Contingent Demand Registration Statement will be a Short-Form Registration (as defined below) whenever the Company is permitted to use Form F-2 or F-3 or any other applicable short-form registration statement (provided, however, that to the extent that a Contingent Demand Registration is to be effected pursuant to an Underwritten Offering, the Company shall include in the Short-Form Registration any additional disclosure as reasonably requested by the managing underwriters (which additional disclosure is reasonably customary in the reasonable opinion of such managing underwriters to be included in underwritten offerings by similarly situated companies)). The Contingent Demand Notice shall specify in writing such number of Registrable Securities that the Holders request be included in the Contingent Demand Registration Statement and the intended method of distribution of such Registrable Securities (which method of distribution may include an Underwritten Offering). If the first Contingent Demand Registration Statement does not result in the disposition of all of the Contingent Demand Shares, Gilat shall file additional Contingent Demand Registration Statements until all of the Contingent Demand Shares have been sold. Notwithstanding the foregoing, the Company shall not be required to effect: (i) any registration if the Contingent Demand Shares that the Company shall have been requested to register shall, as of the date of the request, represent less than one percent (1%) of the outstanding Ordinary Shares; (ii) any registration if the Registrable Securities that the Company shall have been requested to register shall, as of the date of the request, have a Market Value (as defined below) of less than $30 million or represent all of the Ordinary Shares then held in the aggregate by the GE Parties; or (iii) any registration during the pendency of any Blackout Period (as hereinafter defined). A registration of Registrable Securities under this Section 3.1(2) is referred to herein as a "Contingent Demand Registration". The Company shall use its reasonable best efforts to cause such Contingent Demand Registration Statement to be declared effective by the Commission as soon as reasonably practicable after the filing thereof. (3) Initial Demand Registration Requests. From and after the date on which the Company releases to the general public its year-end financial results for the year ended December 31, 1999, upon receipt of each written request from GE (the "Initial Demand Notice"), the Company shall use its reasonable best efforts to prepare and cause to be filed with the Commission a registration statement relating to the offer and sale by Holders of Registrable Securities of up to such number of Registrable Securities (the "Initial Demand Shares"), the sale of all of which Initial Demand Shares by such Holders will result in the GE Shares then held by GE and its Affiliates representing not less than 15% of the outstanding Ordinary Shares on such date as the Initial Demand Notice is received by the Company (each, an "Initial Demand Registration Statement"). The first Initial Demand Registration Statement shall be on Form F-1 or any similar long-form registration ("Long-Form Registrations"); provided, however, that to the extent agreed to in writing by GE, the first Initial 5 Demand Registration Statement may be a registration statement on Form F-2 or F-3 or any similar short-form registration (a "Short-Form Registration") whenever the Company is permitted to use Form F-2 or F-3 or any other applicable short-form registration statement. Each subsequent Initial Demand Registration Statements will be a Short-Form Registration whenever the Company is permitted to use Form F-2 or F-3 or any other applicable short-form registration statement (provided, however, that to the extent that an Initial Demand Registration Statement relates to an Underwritten Offering, the Company shall include in the Short-Form Registration any additional disclosure as reasonably requested by the managing underwriters (which additional disclosure is reasonably customary in the reasonable opinion of such managing underwriters to be included in underwritten offerings by similarly situated companies)). Subject to the limitations set forth in this Section, the Initial Demand Notice shall specify such number of Registrable Securities that the Holders request be included in the Initial Demand Registration Statement. Such Initial Demand Notice shall specify in writing the intended method of distribution of such Registrable Securities (which method of distribution may include an Underwritten Offering). Notwithstanding the foregoing, the Company shall not be required to effect: (i) any registration if the Initial Demand Shares that the Company shall have been requested to register shall, as of the date of the request, represent less than one percent (1%) of the outstanding Ordinary Shares; (ii) any registration if the Registrable Securities that the Company shall have been requested to register shall, as of the date of the request, have a Market Value (as defined below) of less than $30 million or represent all of the Ordinary Shares then held in the aggregate by the GE Parties; or (iii) any registration during the pendency of any Blackout Period (as hereinafter defined). A registration of Registrable Securities under this Section 3.1(3) is referred to herein as an "Initial Demand Registration". The Company shall use its reasonable best efforts to cause each Initial Demand Registration Statement to be declared effective by the Commission as soon as reasonably practicable after the filing thereof. Notwithstanding anything herein to the contrary, in connection with any Initial Demand Registration Statement after the first Initial Demand Registration Statement, all reasonable costs and expenses incurred in connection with any registration, filing and offering of Registrable Securities pursuant to this Section 3.1(3), including (without limitation) all reasonable registration, filing and qualification fees, printers' and accounting fees, fees and disbursements of counsel for the Company and all reasonable costs incurred in connection with the preparation of the Immediate Registration Statement, shall be paid and borne by GE and GE shall promptly reimburse the Company for any such costs or expenses incurred by the Company or any of its Affiliates; provided, however, that if any securities other than Registrable Securities are registered on any Initial Demand Registration Statement, a pro rata share of all costs shall be allocated to such other securities and shall not be the responsibility of GE. 6 (4) Tax Demand Registration Request. If at any time GE becomes entitled to the registration rights set forth in Section 16(c) of the Tax Matters Agreement (the "Tax Agreement"), dated as of September 25, 1998, among GE Americom, the Company, Spacenet and the Spacenet Subsidiaries (as defined in the Tax Agreement), then upon receipt of a written request from GE (the "Tax Demand Notice"), the Company shall (subject to Section 3.4 below) use its reasonable best efforts to prepare and cause to be filed with the Commission a registration statement (the "Tax Demand Registration Statement") relating to the offer and sale by Holders of solely up to such number of Registrable Securities (the "Tax Demand Shares"), the sale of all of which Tax Demand Shares by such Holders will reasonably be expected in the opinion of a nationally-recognized investment bank (which may be the managing underwriter) to result in net proceeds to the Holders in an amount sufficient to pay (x) any Tax (as defined in the Tax Agreement) pursuant to Section 367 of the Code (as defined in the Tax Agreement) (including, pursuant to the GE Americom GRA (as defined in the Tax Agreement)) or Section 368 of the Code to which GE may be subject as a result of the circumstances described in such Section 16(c) and (y) any Tax paid by GE to any Taxing Authority (as defined in the Tax Agreement) in connection with or relating to any sale by GE of such Tax Demand Shares (a "Tax Demand Registration"). Tax Demand Registrations will be Short-Form Registrations whenever the Company is permitted to use Form F-2 or F-3 or any other applicable short-form registration statement (provided, however, that to the extent that a Tax Demand Registration is to be effected pursuant to an Underwritten Offering, the Company shall include in the Short-Form Registration any additional disclosure as reasonably requested by the managing underwriters (which additional disclosure is reasonably customary in the reasonable opinion of such managing underwriters to be included in underwritten offerings by similarly situated companies; and, provided, further, that the Company shall only be required to include such additional disclosure to the extent that the inclusion of such additional disclosure does not require unreasonable investments of time by management of the Company). Subject to the limitations set forth in the second preceding sentence, the Tax Demand Notice shall specify such number of Registrable Securities that the Holders request be included in the Tax Demand Registration Statement. Notwithstanding the foregoing, the Company shall not be required to effect: (i) any registration if the Tax Demand Shares that the Company shall have been requested to register shall, as of the date of the request, represent less than one percent (1%) of the outstanding Ordinary Shares or (ii) more than one Tax Demand Registration Statement for all Holders; and the Company shall be entitled to delay any Tax Demand Registration during the pendency of any Blackout Period (as hereinafter defined). The Company shall use its reasonable best efforts to cause such Tax Demand Registration Statement to be declared effective by the Commission as soon as reasonably practicable after the filing thereof. Notwithstanding anything herein to the contrary, in connection with any Tax Demand Registration Statement, (q) all reasonable costs and expenses incurred in connection with any registration, filing and offering of Registrable Securities pursuant to this Section 3.1(4), including (without limitation) all 7 reasonable registration, filing and qualification fees, printers' and accounting fees, fees and disbursements of counsel for the Company and all reasonable costs incurred in connection with the preparation of the Tax Demand Registration Statement, shall be paid and borne by GE and GE shall promptly reimburse the Company for any such costs or expenses incurred by the Company or any of its Affiliates and (r) all sections of the Tax Demand Registration Statement relating to the transfer of securities thereunder, including any "plan of distribution" or similar section and any section relating to the selling shareholders, shall be prepared by GE; provided, however, that if any securities other than Registrable Securities are registered on any Tax Demand Registration Statement, a pro rata share of all costs shall be allocated to such other securities and shall not be the responsibility of GE. 3.2 Registration Upon Demand (1) At any time after the third anniversary of this Agreement, each of one or more Holders of Registrable Securities may make a written demand (an "Ordinary Demand Notice") that the Company file with the Commission a registration statement to effect the registration (an "Ordinary Demand Registration," and collectively with an Initial Demand Registration, a Contingent Demand Registration and a Tax Demand Registration, each a "Demand Registration") of all or part of such Holders' Registrable Securities (as applicable, an "Ordinary Demand Registration Statement," and collectively with any Initial Demand Registration Statement, a Contingent Demand Registration Statement and a Tax Demand Registration Statement, each a "Demand Registration Statement"). Ordinary Demand Registrations will be Short-Form Registrations whenever the Company is permitted to use Form F-2 or F-3 or any other applicable short-form registration statement; provided, however, that to the extent that an Ordinary Demand Registration is to be effected pursuant to an Underwritten Offering, the Company shall include in the Short-Form Registration any additional disclosure as reasonably requested by the managing underwriters (which additional disclosure is reasonably customary in the reasonable opinion of such managing underwriters to be included in underwritten offerings by similarly situated companies); and, provided, further, that following the first two Ordinary Demand Registrations to be effected pursuant to an Underwritten Offering, the Company shall only be required to include such additional disclosure to the extent that the Holders of the relevant Registrable Securities bear and pay all reasonable costs and expenses incurred in connection with such registration, filing and offering of Registrable Securities pursuant to this Section 3.2(1), including (without limitation) all reasonable registration, filing and qualification fees, printers' and accounting fees, fees and disbursements of counsel for the Company and all reasonable costs incurred in connection with the preparation of such Ordinary Demand Registration Statement. Such Ordinary Demand Notice shall specify in writing the intended method of distribution of such Registrable Securities (which method of distribution may include an Underwritten Offering). Upon receipt of a valid Ordinary Demand Notice for an Ordinary Demand Registration, the Company shall use its reasonable 8 best efforts to register under the Securities Act as soon as reasonably practicable the Registrable Securities which Holders have requested the Company to register in accordance with this Section 3.2, all to the extent necessary to permit the disposition (in accordance with the intended methods thereof as aforesaid) of the Registrable Securities so to be registered. Notwithstanding the foregoing, the Company shall not be required to effect: (i) any registration if the Registrable Securities that the Company shall have been requested to register shall, as of the date of the request, have a Market Value (as defined below) of less than $30 million or represent all of the Ordinary Shares then held in the aggregate by the GE Parties; or (ii) any registration during the pendency of any Blackout Period. For purposes of this Agreement, "Market Price" shall mean the average of the closing price for the Ordinary Shares on the principal securities exchange or other market on which the Ordinary Shares are then traded or quoted for the ten trading days preceding the date of the Ordinary Demand Notice. (2) Notwithstanding anything to the contrary in this Agreement, the Company shall not be required to file a Demand Registration Statement relating to any Holder's request under Section 3.1(2), 3.1(3), 3.1(4) or 3.2(1) if the Company has commenced the preparation of, or is in the midst of, an offering of any securities of the Company pursuant to a registration statement under the Securities Act or in reliance on Rule 144A or any similar exemption from the registration requirements of the Securities Act. Any participation of the GE Parties in any such offering shall be solely on a piggy-back basis pursuant to the terms of Section 3.3 hereof and not on a demand basis under Section 3.1(2), Section 3.1(3), Section 3.1(4) or Section 3.2(1). (3) A registration requested pursuant to Section 3.1(2), 3.1(3), 3.1(4) or 3.2(1) hereof shall not be deemed to have been effected (i) if a Demand Registration Statement with respect thereto has not been declared effective by the Commission, (ii) if after it has become effective, such registration is materially interfered with by any stop order, injunction or similar order or requirement of the Commission or other governmental agency or court for any reason not attributable to any of the Holders and has not thereafter become effective, or (iii) the conditions to closing specified in the underwriting agreement, if any, entered into in connection with such registration are not satisfied or waived, other than by reason of a failure on the part of a Holder. (4) Subject to Section 3.8 below, the Company may, at its option, allow other persons or entities having registration rights to include their Ordinary Shares, or elect to include authorized but unissued Ordinary Shares to be sold by the Company, in a registration to be effected pursuant to Section 3.1(1), 3.1(2), 3.1(3), 3.1(4) or 3.2(1). 9 3.3 "Piggy-Back" Registrations 1. If, at any time after the earlier to occur of (x) the third anniversary of this Agreement and (y) the termination of the obligations of the GE Parties (as defined in the Shareholders Agreement) under clause (1) of Section 3.1 of the Shareholders Agreement in accordance with the terms of such Section 3.1, the Company proposes to register any securities under the Securities Act in connection with any offering of its securities (other than a registration statement on Form S-8 or Form F-4, or their successors, or any other form for a similar limited purpose, or any registration statement covering only securities proposed to be issued in exchange for securities or assets of another corporation or in connection with any similar transaction), whether or not for its own account, the Company shall furnish reasonably prompt written notice to GE and any Bulk Transferees (provided that GE has notified the Company of such Person's status as a Bulk Transferee) of its intention to effect such registration and the intended method of distribution in connection therewith. Upon the written request of a Holder made to the Company within five (5) calendar days after the receipt of such notice by the Company, the Company shall include in such registration the requested number of the Holder's Registrable Securities (each, a "Piggy-Back Registration"); provided, however, that: a. if, at any time after giving such 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, the Company shall determine for any reason not to register such securities, the Company may, at its election, give written notice of such determination to each Holder of Registrable Securities who shall have made a request for registration as hereinabove provided and thereupon the Company shall be relieved of its obligation to register any Registrable Securities in connection with such registration (but not from its obligation to pay the expenses in connection therewith, as provided in Section 3.7); and b. if such registration involves an Underwritten Offering, all Holders of Registrable Securities requesting to be included in the Company's registration must sell their Registrable Securities to the underwriters selected by the Company on the same terms and conditions as apply to the Company or any other holders of Ordinary Shares being sold pursuant to such registration. 2. Nothing in this Section 3.3 shall create any liability on the part of the Company or any other Person to the Holders if the Company or any other Person should, for any reason, decide not to file a registration statement proposed to be filed pursuant to Section 3.3(1) (any such registration statement, a "Piggy-Back Registration Statement," and, collectively with a Demand Registration Statement and an Immediate Registration Statement, each a "Registration 10 Statement") or to withdraw such Piggy-Back Registration Statement subsequent to its filing (except for the Company's obligation to pay the expenses in connection therewith as provided in Section 3.7), regardless of any action whatsoever that a Holder may have taken, whether as a result of the issuance by the Company of any notice under Section 3.3(1) or otherwise. 3. A request to include Registrable Securities in a proposed Underwritten Offering pursuant to Section 3.3(1) shall not be deemed to be a Demand Registration pursuant to Section 3.1(2) or Section 3.1(3). 3.4 Blackout Periods for Holders. If the Company reasonably and in good faith determines that (i) the filing of a Registration Statement or the compliance by the Company with its disclosure obligations in connection with a Registration Statement would require the disclosure of material information that the Company has a bona fide and significant business purpose for preserving as confidential or (ii) such registration would be likely to have a significant and adverse effect on any proposal or plan by the Company to engage in any material financing transaction, acquisition of securities or assets (other than in the ordinary course of business) or any merger, consolidation, tender offer or similar transaction and the Company promptly gives the Holders written notice of such determination following their request to register any Registrable Securities, the Company may delay the filing of a Registration Statement and shall not be required to maintain the effectiveness thereof or amend or supplement a Registration Statement for a period expiring upon the earlier to occur of (A) the date on which such material information is disclosed to the public or ceases to be material, in the case of clause (i), (B) the date on which such transaction is completed or abandoned, in the case of clause (ii), or (C) sixty (60) calendar days after the Company makes such good faith determination, in the case of either clauses (i) or (ii) (a "Blackout Period"); provided, that (x) during any period of three hundred and sixty-five (365) consecutive days the aggregate length of all Blackout Periods may not exceed a total of one hundred and eighty (180) days and (y) if any such event occurs prior to the effectiveness of the relevant Registration Statement, the Holders of Registrable Securities, if any, initiating the request for such registration will be entitled to withdraw such request, and if such request is withdrawn such registration will not count as one of the permitted registrations under Section 3.1 or 3.2, as applicable. The period referred to in Section 3.5(1) shall be extended by the length of any Blackout Period occurring during such periods. The Company shall promptly notify each Holder of the commencement and expiration or earlier termination of any Blackout Period occurring during the pendency of any registration hereunder in which such Holder is participating. 3.5 Obligations of the Company. Except as otherwise provided herein (including, but not limited to, pursuant to Section 3.1(1), Section 3.1(3) and Section 3.1(4) above), whenever the Company is required to effect the registration of any 11 Registrable Securities under Section 3.1, 3.2 or 3.3, as applicable, the Company shall, as soon as reasonably practicable: 1. Prepare and file with the Commission a Registration Statement with respect to such Registrable Securities on a form selected by the Company (except as otherwise set forth above) and use its reasonable best efforts to cause such Registration Statement to become effective and (except as otherwise set forth herein) to keep such Registration Statement effective until the earlier of (i) completion of the offering to which the Registration Statement relates or (ii) forty (40) calendar days from the date of effectiveness (or such longer period as is required in order to complete any distribution pursuant to a customary over-allotment option granted to the underwriters in the underwriting agreement relating to an Underwritten Offering); provided, however, that before filing such Registration Statement or any amendments thereto, the Company 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 and shall not file any such documents to which such counsel reasonably and promptly objects prior to the filing thereof solely to the extent that such objection relates to information (x) included in such document relating to the Holders or (y) as to which the Company fails to certify in writing (in response to a reasonable written request of the relevant Holders) that such information will be subject to the Company's indemnification obligation set forth in Section 3.10 below, and provided, further, that the Company may discontinue any registration of its securities that is being effected pursuant to Section 3.1, 3.2 or 3.3 at any time prior to the effective date of the Registration Statement relating thereto. Notwithstanding the foregoing, nothing contained herein shall require the Company to include in any Registration Statement any material nonpublic information known to any Holder, the failure of which to disclose prior to any sale of Registrable Securities by such Holder would result in a violation of any United States federal or state securities laws by such Holder. 2. Prepare and file with the Commission such amendments and supplements to such Registration Statement and the prospectus used in connection with such Registration Statement as may be necessary to comply with the provisions of applicable law with respect to the disposition of all securities covered by such Registration Statement. 3. Furnish to the Holders of Registrable Securities registering such securities such numbers of copies of a prospectus, including a preliminary prospectus, in conformity with the requirements of applicable law, and such other documents as each such Holder may reasonably request in order to facilitate the disposition of Registrable Securities owned by it. 4. Use its reasonable best efforts to register and qualify the securities covered by such Registration Statement under state blue sky laws in any 12 jurisdictions in the United States in which such registration and qualification is reasonably requested by any Holder; provided, that the Company shall not be required in connection therewith or as a condition thereto to qualify to do business or to file a general consent to service of process in any such jurisdictions or to subject itself to taxation in any such jurisdiction. 5. In the event of any Underwritten Offering, enter into and perform its obligations under an underwriting agreement, in form and substance reasonably satisfactory to the Company, with the managing underwriter of such offering. 6. Promptly notify the Holders: (i) when the Registration Statement or any post-effective amendment to the Registration Statement has become effective; (ii) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or the initiation of any proceedings by any Person for that purpose; and (iii) of the receipt by the Company of any written notification with respect to the suspension of the qualification of any Registrable Securities for sale in any jurisdiction or the initiation or written threat of any proceeding for such purpose. 7. Notify the Holders, at any time when a prospectus relating thereto is required to be delivered under applicable law, of 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 a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing. Any Holders shall cease using such prospectus immediately upon receipt of notice from the Company to that effect. If so requested by the Company, each Holder promptly shall return to the Company any copies of any prospectus in its possession other than permanent file copies) that contains an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing. Subject to Section 3.4 above, at the request of any such Holder, the Company shall promptly prepare and furnish to such Holder 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 light of the circumstances then existing. 8. If any such Registration Statement refers to any Holder by name or otherwise as the holder of any securities of the Company, and if such Holder reasonably believes it is or may be deemed to be a control Person in relation to, or an Affiliate of, the Company, then such Holder shall have the right to require (i) the insertion therein of language, in form and substance reasonably satisfactory 13 to such Holder, to the effect that the holding by such Holder is not be construed as a recommendation by such Holder of the investment quality of the Company's securities covered thereby and that such holding does not imply that such Holder will assist in meeting any future financial requirements of the Company, or (ii) in the event that such reference to such Holder by name or otherwise is not, in the opinion of both counsel to the Company and such Holder, required by the Securities Act or any similar federal statute then in force, the deletion of the reference to such Holder. 9. Only in the case of an Underwritten Offering, and to the extent reasonably requested by the managing underwriters of such Underwritten Offering, use its reasonable best efforts to cause to be furnished to the Holders (x) a signed opinion from counsel to the Company addressed to the underwriters, and (y) a "comfort" letter from the Company's independent certified public accounting firm, covering such matters of the type customarily covered by such opinions and "comfort" letters as the lead managing underwriter may reasonably request. 10. Use reasonable best efforts to cause the transfer agent to remove restrictive legends on certificates representing the securities covered by such Registration Statement, as appropriate and to the extent such removal is permitted by applicable law and any applicable agreements. 11. Use reasonable best efforts to have the securities covered by such Registration Statement listed on the same quotation system or market, if any, as the Ordinary Shares. 12. Execute and deliver all instruments and documents (including in an Underwritten Offering an underwriting agreement in reasonable and customary form) and take such other reasonable and customary actions as the holders of Registrable Securities requesting registration may reasonably request in order to effect an Underwritten Offering of such Registrable Securities; provided, however, that notwithstanding anything herein to the contrary, the Company shall not be obligated to devote any management efforts to supporting any registration for any Holder of Registrable Securities hereunder other than a customary "road show" for one Underwritten Offering. 3.6 Furnish Information; Hold-Back Agreement. 1. It shall be a condition precedent to the obligation of the Company to include any Registrable Securities of any Holder in a Registration Statement pursuant to Section 3.1, 3.2 or 3.3, as applicable, that the Holder shall furnish to the Company such information regarding itself, the Registrable Securities held by it, and the intended method of disposition of such Registrable Securities as shall be required to effect the registration of the Registrable Securities held by such Holder. Any such information, or any comments on any such information included in a draft of a Registration Statement provided to a Holder for its comment, shall be 14 provided to the Company within any reasonable time period requested by the Company. 2. Each Holder of Registrable Securities agrees, whether or not such Holder's Registrable Securities are included in any such registration, not to effect any sale or distribution, including any sale pursuant to Rule 144 under the Securities Act, of any Registrable Securities, or of any security convertible into or exchangeable or exercisable for any Registrable Securities (other than as part of such offering), (x) without the consent of the Company in the case of a non-underwritten offering for a period commencing three calendar days before and ending thirty calendar days after, or (y) without the consent of the managing underwriter in the case of an Underwritten Offering, during a period commencing seven calendar days before and ending 90 calendar days after (or, in each case, ending after such lesser number of calendar days as the Company or the lead managing underwriter, as applicable, shall designate for other parties subject to a similar "hold-back" obligation), in each case, after the effective date of any offering of the Company's securities. 3. Each Holder shall notify the Company, at any time when a prospectus is required to be delivered under applicable law, of the happening of any event as a result of which the prospectus included in the applicable Registration Statement, as then in effect, in each case only with respect to information provided by such Holder, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing. All Holders shall immediately upon the happening of any such event cease using such prospectus. If so requested by the Company, each Holder promptly shall return to the Company any copies of any prospectus in its possession (other than permanent file copies) that contains an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing. 4. It is understood that in any Underwritten Offering in addition to any Ordinary Shares (the "initial shares") the underwriters have committed to purchase, the underwriting agreement may grant the underwriters an option to purchase up to a number of additional authorized but unissued Ordinary Shares (the "option shares") equal to 15% of the initial shares (or such other maximum amount as the NASD may then permit), solely to cover over-allotments. Ordinary Shares proposed to be sold by the Company and the other sellers shall be allocated between initial shares and option shares as agreed. The number of initial shares and option shares to be sold by requesting Holders shall be allocated pro rata among all such Holders on the basis of the relative number of shares of Registrable Securities each such Holder has requested to be included in such registration. 15 3.7 Expenses of Registration. Except as otherwise set forth herein (including, but not limited to, pursuant to Section 3.1(1), Section 3.1(3), Section 3.1(4) and Section 3.2(1) above), the Company shall bear and pay all reasonable expenses incurred in connection with any registration, filing or qualification of Registrable Securities pursuant to Section 3.1, 3.2 or 3.3, as applicable, including (without limitation) all registration, filing and qualification fees, printers' and accounting fees, fees and disbursements of counsel for the Company, but excluding underwriting discounts and commissions and stock transfer taxes relating to the Registrable Securities. Notwithstanding the foregoing, only reasonable fees and disbursements of one counsel to all Holders up to a maximum of $10,000 per registration shall be required to be paid and borne by the Company. Any such counsel for the Holders shall be selected by the holders of a majority of the Registrable Securities being registered. 3.8 Underwriting Requirements; Cut-Backs. In connection with any Underwritten Offering of a Holder's Registrable Securities, (1) in the case of any Demand Registration, the Holders of a majority of the Registrable Securities to be registered shall be permitted to select the lead managing underwriter, subject to the reasonable approval of the Company, or, in the case of a Piggy-Back Registration, the Holders must accept the underwriters selected by the Company, and (2) the Company shall be required under Section 3.1, 3.2 or 3.3 to register only such quantity of Registrable Securities as the lead managing underwriter determines, in its sole discretion, will not interfere with the successful marketing of the offering. To the extent that (x) the lead managing underwriter advises the Company (in the case of an Underwritten Offering) or (y) the Holders selling Registrable Securities in such registration and the Company reasonably agree (in the case of a non-Underwritten Offering) that the registration of all of the Ordinary Shares sought to be registered will interfere with the successful marketing of the offering, in the case of a registration pursuant to Section 3.1(1), 3.1(2), 3.1(3), 3.1(4) or 3.2(1), the Ordinary Shares to be included shall first be apportioned among the Holders on a pro rata basis (based on the number of Ordinary Shares proposed to be registered by each). If the Holders are permitted to register all of the Registrable Securities that they requested be registered, in connection with such offering, any remaining Ordinary Shares to be included in such registration shall be allocated among the Company and such other holders of Ordinary Shares whose Ordinary Shares are to be included in such Registration Statement pursuant to Section 3.2(4) above in such proportion as they shall agree upon. In the case of a registration pursuant to Section 3.3, subject to the last paragraph of Section 3.3(2), as applicable, the Ordinary Shares to be included therein shall be apportioned as follows: (i) first, the Company and any holders of securities of the Company (other than the Holders) exercising any demand registration right granted to such holders shall be entitled to register all Ordinary Shares that the Company or such other holders propose to sell for their own account, in such proportion as they shall agree upon; and (ii) second, the Holders shall be entitled to register, on a pro rata basis together with any other holder of securities of the Company exercising any piggy- 16 back registration rights (based on the number of Ordinary Shares proposed to be registered by each), up to that number of Registrable Securities that is equal to the remaining number of Ordinary Shares that (x) the lead managing underwriter advises (in the case of an Underwritten Offering) or (y) any holders of Ordinary Shares (including any Holders) participating in such registration and the Company reasonably agree (in the case of a non-Underwritten Offering) may be registered in connection with such offering without interfering with the successful marketing thereof. 3.9 Delay of Registration. No Holder shall have any right to obtain or seek an injunction restraining or otherwise delaying any registration as the result of any controversy that might arise with respect to the interpretation or implementation of this Agreement. 3.10 Indemnification. In the event any Registrable Securities are included in a Registration Statement under Section 3.1, 3.2 or 3.3, as applicable: 1. To the extent permitted by law, the Company will indemnify and hold harmless each Holder and each Person, if any, who controls such Holder within the meaning of the Securities Act and the Securities Exchange Act of 1934, as amended (the "1934 Act"), and their respective directors, officers, partners, employees and affiliates (each, an "Indemnified Person"), against any losses, claims, damages, or liabilities to which they may become subject insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon (collectively, a "Violation") (i) any untrue statement or alleged untrue statement of a material fact contained in such Registration Statement, including any final prospectus contained therein or any amendments or supplements thereto or (ii) the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances in which they were made, not misleading, and the Company will pay to each Indemnified Person any reasonable legal or other expenses incurred by it in connection with investigating or defending any such loss, claim, damage, liability or action; provided, that the indemnity agreement contained in this Section 3.10(1) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the written consent of the Company, nor shall the Company be liable in any such case for any such loss, claim, damage, liability or action to the extent that it arises out of or is based upon a Violation which occurs in reliance upon and in conformity with information furnished by any Holder for use in connection with such registration (including, but not limited to, pursuant to Section 3.1(1) or 3.1(4) above) or is caused by any failure by any Holder to deliver a prospectus or preliminary prospectus (or amendment or supplement thereto) as and when required under the Securities Act after such prospectus has been timely furnished by the Company; and provided, further, that the Company will not be liable hereunder (A) in the case of any Underwritten Offering, to any Person who participates as an underwriter in the offering or sale of 17 Registrable Securities or any other Person, if any, who controls such underwriter within the meaning of the Securities Act, or (B) in the case of any offering other than an Underwritten Offering, to any seller of Registrable Securities covered by such Registration Statement or any other Person, if any, who controls such seller within the meaning of the Securities Act, under the indemnity agreement in this Section 3.10(1) with respect to any preliminary prospectus or final prospectus or final prospectus as amended or supplemented, as the case may be, to the extent that any such loss, claim, damage or liability of such underwriter or controlling Person (or seller or controlling Person, as the case may be) results from the fact that such underwriter (or seller, as the case may be) sold Registrable Securities to a Person to whom therewas not sent or given, at or prior to the written confirmation of such sale, a copy of the preliminary prospectus or of the final prospectus or of the final prospectus as then amended or supplemented, whichever is most recent, if the Company has previously furnished copies thereof to such underwriter (or seller, as the case may be) if the relevant material misstatement or omission or alleged material misstatement or omission giving rise to such loss, claim, damage or liability was cured in such preliminary prospectus or final prospectus, as so amended or supplemented, as the case may be. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of such seller, director, officer, employee, agent, underwriter or controlling Person, and shall survive the transfer of such securities by such seller. 2. To the extent permitted by law, each Holder, jointly and severally, will indemnify and hold harmless the Company, each of its directors, each of its officers, who has signed the Registration Statement, and each Person, if any, who controls the Company within the meaning of the Securities Act or the 1934 Act, against any losses, claims, damages or liabilities (joint or several) to which any of the foregoing Persons may become subject, insofar as such losses, claims, damages or liabilities (or actions in respect thereto) arise out of or are based upon any Violation, in each case to the extent (and only to the extent) that such Violation is caused (x) by any untrue statement or alleged untrue statement contained in, or by any omission or alleged omission from, information furnished to the Company by any Holder for use in any such Registration Statement or prospectus (including, but not limited to, pursuant to Section 3.1(1) or 3.1(4) above) or (y) any failure by the Holder to deliver a prospectus or preliminary prospectus (or amendment or supplement thereto) as and when required under the Securities Act after such prospectus has been timely furnished by the Company. Such Holder will pay any reasonable legal or other expenses incurred by any Indemnified Person pursuant to this Section 3.10(2) in connection with investigating or defending any such loss, claim, damage, liability or action; provided, that the indemnity agreement contained in this Section 3.10(2) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the written consent of the Holder. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of the 18 Company or any such director, officer or controlling Person and shall survive the transfer of such securities by such seller. 3. Promptly after receipt by an indemnified party under this Section 3.10 of notice of the commencement of any action (including any governmental action), such indemnified party will, if a claim in respect thereof is to be made against any indemnifying party under this Section 3.10, deliver to the indemnifying party a written notice of the commencement thereof, and the indemnifying party shall have the right to participate in, and, to the extent the indemnifying party so desires, jointly with any other indemnifying party similarly noticed, to assume the defense thereof with counsel mutually satisfactory to the indemnifying parties; provided, that an indemnified party (together with all other indemnified parties that may be represented without conflict by one counsel) shall have the right to retain one separate counsel, with the reasonable fees and expenses to be paid by the indemnifying party, if representation of such indemnified party by the counsel retained by the indemnifying party would be inappropriate (in the written reasonable opinion of counsel to the indemnifying party) due to actual or potential differing interests between such indemnified party and any other party represented by such counsel in such proceeding. The failure to deliver written notice to the indemnifying party within a reasonable time of the commencement of any such action, if prejudicial to its ability to defend such action, shall relieve such indemnifying party of any liability to the indemnified party under this Section 3.10. 4. To the extent that a reasonably similar undertaking is not included in any relevant underwriting agreement or other relevant contractual agreement, the Company may require, as a condition to including any Registrable Securities in any Registration Statement filed in accordance with Section 3.1, 3.2 or 3.3, as applicable, hereof, that the Company shall have received an undertaking reasonably satisfactory to it from the prospective seller of such Registrable Securities or any underwriter, to indemnify and hold harmless (in the same manner and to the same extent as set forth in Section 3.10(2) hereof) the Company and its directors and officers and each other Person, if any, who controls the Company within the meaning of the Securities Act, with respect to any statement or alleged statement in or omission or alleged omission from such Registration Statement, any preliminary, final or summary prospectus contained therein, or any such amendment or supplement, if such statement or alleged statement or omission or alleged omission was made in reliance upon and in conformity with information furnished to the Company by or on behalf of such seller or underwriter for use in the preparation of such registration statement, preliminary, final or summary prospectus or amendment or supplement. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of the Company or any such director, officer or controlling Person and shall survive the transfer of such securities by such seller. 19 5. To the extent the indemnification provided for in this Section 3.10 is unavailable to an indemnified party or insufficient in respect of any losses, claims, damages, liabilities or judgments referred to therein, then each indemnifying party, in lieu of indemnifying such indemnified party, shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages, liabilities and judgments (i) in such proportion as is appropriate to reflect the relative benefits received by each of the Company, the Holders and any underwriters from the offering of the Registrable Securities or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company, the Holders and the any underwriters in connection with the statements or omissions which resulted in such losses, claims, damages, liabilities or judgments, as well as any other relevant equitable considerations. The relative benefits received by the Company on the one hand, and the Holders and any underwriters on the other hand shall be deemed to be in the same proportion as the total net proceeds from the offering (after deducting underwriting discounts and commissions, but before deducting expenses) received by the Company and the Holders (as applicable) and the total underwriting discounts and commissions received by any underwriters. The relative fault of the Company, the Holders and any underwriters shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company, the Holders or any underwriters, as applicable, and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The parties agree that it would not be just and equitable if contribution pursuant to this clause (e) were determined by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to in this clause (e). The amount paid or payable by an indemnified party as a result of the losses, claims, damages, liabilities or judgments referred to in this clause (e) shall be deemed to include, subject to the limitations set forth above, any legal or other expenses incurred by such indemnified party in connection with investigating or defending any matter, including any action, that could have given rise to such losses, claims, damages, liabilities or judgments. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. 6. The obligations of the Company and the Holders under this Section 3.10 shall survive the completion of any offering of Registrable Securities under a Registration Statement pursuant to Section 3.1, 3.2 or 3.3, as applicable. 20 4. Miscellaneous. 4.1 Successors and Assigns. The provisions of this Agreement shall inure to the benefit of and be binding upon the respective successors and permitted assigns of the parties hereto; provided that no rights or obligations of GE hereunder may be transferred or assigned other than in connection with a transfer of GE Shares to an Affiliate of GE or to a Bulk Transferee, which transfer is made in compliance with the terms of this Agreement and the Shareholders Agreement. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and permitted assigns any rights, remedies, obligations or liabilities under or by reason of this Agreement. Nothing contained herein shall be construed as permitting any transfer of any securities of the Company in violation of any applicable law or agreement, including but not limited to the terms of the Shareholders Agreement. 4.2 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York without giving effect to the conflict of laws provisions thereof. Each of the Company and the Holders hereby submits to the nonexclusive jurisdiction of the United States District Court for the Southern District of New York and of any New York State court sitting in New York City for purposes of all legal proceedings arising out of or relating to this Agreement and the transactions contemplated hereby. Each of the Company and the Holders irrevocably waives, to the fullest extent permitted by law, any objection which it may now or hereafter have to the laying of the venue of any such proceeding brought in such a court and any claim that any such proceeding brought in such a court has been brought in an inconvenient forum. 4.3 Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, and all of which together shall constitute one and the same instrument. 4.4 Captions and Headings. The captions and headings used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement. 4.5 Notices. Unless otherwise provided, any notice or other communication required or permitted to be given or effected under this Agreement shall be in writing and shall be deemed effective upon personal or facsimile delivery to the party to be notified or one business day after deposit with an internationally recognized courier service, delivery fees prepaid, and addressed to the party to be notified at the following respective addresses, or at such other addresses as may be designated by written notice; provided, that any notice of change of address shall be deemed effective only upon receipt. 21 If to the Company: c/o Gilat Satellite Networks Ltd. Gilat House Yegia Kapayim Street, Kiryat Arye Petah Tikva 49130 Israel Fax: 972-3-925-2252 Attention: General Counsel with a copy to: Kleinhendler & Halevy 30 Kalisher Street Tel Aviv, Israel Fax: 972-3-510-7528 Attention: Gene Kleinhendler, Adv. and Skadden, Arps, Slate, Meagher & Flom LLP 919 Third Avenue New York, NY 10022 Fax: (212) 735-2000 Attention: Hildy Shandell, Esq. If to GE or any Holder: c/o GE American Communications, Inc. 4 Research Way Princeton, New Jersey 08540-6684 Fax: 609-987-4233 Attention: General Counsel with a copy to: Hogan & Hartson L.L.P. 555 13th Street NW Washington, D.C. 20004 Fax: 202-637-5910 Attention: Steve Kaufman, Esq. 4.6 Amendments and Waivers. The provisions of this Agreement, including the provisions of this sentence, may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof 22 may not be given, unless the Company has obtained written consent of the Holders of at least a majority of the outstanding Registrable Securities affected by such amendment, modification, supplement, waiver or departure; provided, however, that no amendment, modification, supplement, waiver or consent to the departure with respect to the provisions of Section 3.10 hereof shall be effective as against any Person unless consented to in writing by such Person. 4.7 Severability. If one or more provisions of this Agreement are held to be unenforceable under applicable law, such provisions shall be excluded from this Agreement and the balance of this Agreement shall be interpreted as if such provision were so excluded and shall be enforceable in accordance with its terms. 4.8 Entire Agreement. Other than applicable provisions of the Shareholders Agreement, this Agreement contains the entire understanding of the parties hereto with respect to the subject matter contained herein, and supersedes and cancels all prior agreements, negotiations, correspondence, undertakings and communications of the parties, oral or written, respecting such subject matter. Other than as set forth in the Shareholders Agreement, there are no restrictions, promises, representations, warranties, agreements or undertakings of any party hereto with respect to the matters contemplated hereby, other than those set forth herein or made hereunder. 23 IN WITNESS WHEREOF, the parties, each by its duly authorized signatory, have executed this Agreement as of the date first above written. GENERAL ELECTRIC COMPANY By /s/ James R. Bunt ------------------------ Name: James R. Bunt Title: Vice President and Treasurer GE AMERICAN COMMUNICATIONS, INC. By /s/ John F. Connelly -------------------------- Name: John F. Connelly Title: President and Chief Executive Officer GENERAL ELECTRIC FINANCE HOLDING GMBH By /s/ John F. Connelly ----------------------------- Name: John F. Connelly Title: Attorney-in-Fact GENERAL ELECTRIC PLASTICS B.V. By /s/ John F. Connelly -------------------------- Name: John F. Connelly Title: Attorney-in-Fact GILAT SATELLITE NETWORKS LTD. By /s/ Yoel Gat ------------------------ Name: Yoel Gat Title: Chief Executive Officer 24 -----END PRIVACY-ENHANCED MESSAGE-----