EXHIBIT 99.2
EXECUTION COPY
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ASSET PURCHASE AGREEMENT
BY AND AMONG
XXXXXX ELECTRONICS CORPORATION
PRIMESTAR, INC.,
PRIMESTAR PARTNERS L.P.,
TEMPO SATELLITE, INC.
AND
THE STOCKHOLDERS OF PRIMESTAR, INC. LISTED HEREIN
DATED AS OF JANUARY 22, 1999
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TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS................................................................... 1
ARTICLE II
SALE AND PURCHASE OF TRANSFERRED ASSETS; ASSUMPTION OF ASSUMED
LIABILITIES...................................................................14
Section 2.1. Sale and Purchase of the Option.................................14
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Section 2.2. Sale and Purchase of Transferred Assets.........................14
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Section 2.3. Assumption of Assumed Liabilities...............................17
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ARTICLE III
PURCHASE PRICE................................................................21
Section 3.1. Purchase Price..................................................21
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Section 3.2. Allocation of Purchase Price....................................22
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ARTICLE IV
THE CLOSINGS..................................................................24
Section 4.1. The Closings....................................................24
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Section 4.2. Closing Deliveries of Seller....................................25
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Section 4.3. Closing Deliveries of Primestar and PLP.........................25
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Section 4.4. Closing Deliveries of Buyer.....................................25
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Section 4.5. Transfer Taxes..................................................25
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Section 4.6. Property Taxes..................................................26
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ARTICLE V
REPRESENTATIONS AND WARRANTIES OF SELLER AND PRIMESTAR........................26
Section 5.1. Organization....................................................26
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Section 5.2. Authority.......................................................26
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Section 5.3. Noncontravention................................................27
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Section 5.4. Taxes...........................................................27
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Section 5.5. Intellectual Property...........................................29
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Section 5.6. Ownership of Rights and Assets Conveyed.........................29
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Section 5.7. Assigned Contracts..............................................29
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Section 5.8. Litigation......................................................31
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Section 5.9. Governmental Authorization......................................31
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Section 5.10. Compliance With Applicable Law..................................32
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Section 5.11. FCC Matters.....................................................32
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Section 5.12. Condition of Assets.............................................34
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Section 5.13. Absence of Material Adverse Effect and Certain
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Changes or Events..............................................34
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Section 5.14. Insurance.......................................................34
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Section 5.15. Restrictive Covenants...........................................34
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Section 5.16. Brokers.........................................................35
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Section 5.17. Indebtedness....................................................35
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ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF PLP AND THE STOCKHOLDERS....................35
Section 6.1. Organization....................................................35
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Section 6.2. Authority.......................................................35
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Section 6.3. Noncontravention................................................36
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Section 6.4. Capacity Option.................................................36
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Section 6.5. Authority.......................................................37
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Section 6.6. Noncontravention................................................37
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ARTICLE VII
REPRESENTATIONS AND WARRANTIES OF BUYER.......................................38
Section 7.1. Organization and Standing.......................................38
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Section 7.2. Authority.......................................................38
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Section 7.3. Noncontravention................................................38
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Section 7.4. Governmental Authorization......................................39
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Section 7.5. Litigation......................................................39
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Section 7.6. Brokers.........................................................40
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ARTICLE VIII
COVENANTS.....................................................................40
Section 8.1. Covenants.......................................................40
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Section 8.2. Advice of Changes...............................................43
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Section 8.3. Notices and Consents............................................44
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Section 8.4. Assignment of the FCC License...................................45
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Section 8.5. Public Announcements............................................47
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Section 8.6. Access to Information ..........................................47
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Section 8.7. Tax Matters.....................................................48
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Section 8.8. Commercially Reasonable Efforts; Further
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Assurances.....................................................48
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Section 8.9. Insurance.......................................................49
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Section 8.10. Bulk Transfer Laws..............................................50
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Section 8.11. Amendment of Certain Agreements.................................50
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ARTICLE IX
CONDITIONS TO TRANSFER OF GROUND SATELLITE ASSETS.............................50
Section 9.1. Conditions to Each Party's Obligations..........................50
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Section 9.2. Conditions to Obligations of Buyer..............................51
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Section 9.3. Conditions to Obligations of Seller, Primestar and
PLP............................................................53
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ARTICLE X
CONDITIONS TO TRANSFER OF IN-ORBIT SATELLITE ASSETS...........................54
Section 10.1. Conditions to Each Party's Obligations.........................54
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Section 10.2. Conditions to Obligations of Buyer.............................55
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Section 10.3. Conditions to Obligations of Seller, Primestar and
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PLP...........................................................57
ARTICLE XI
TERMINATION...................................................................58
Section 11.1. Termination....................................................58
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Section 11.2. Effect of Termination..........................................59
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ARTICLE XII
SURVIVAL......................................................................60
Section 12.1. Survival.......................................................60
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ARTICLE XIII
INDEMNIFICATION...............................................................61
Section 13.1. Indemnification by Primestar and the Stockholders..............61
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Section 13.2. Indemnification by Buyer.......................................61
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Section 13.3. Procedures for Indemnification.................................62
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Section 13.4. Termination of Indemnification Obligations.....................64
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Section 13.5. Certain Limitations............................................65
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ARTICLE XIV
GENERAL PROVISIONS............................................................66
Section 14.1. Assignment.....................................................66
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Section 14.2. Parties in Interest............................................66
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Section 14.3. Amendment......................................................67
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Section 14.4. Waiver; Remedies...............................................67
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Section 14.5. Effect of Investigation........................................67
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Section 14.6. Fees and Expenses..............................................67
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Section 14.7. Notices........................................................67
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Section 14.8. Captions; Currency.............................................70
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Section 14.9. Entire Agreement...............................................71
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Section 14.10. Severability...................................................71
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Section 14.11. Dispute Resolution.............................................71
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Section 14.12. Exhibits and Schedules; Disclosure.............................72
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Section 14.13. Governing Law..................................................73
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Section 14.14. Counterparts...................................................73
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Section 14.15. Interpretation.................................................73
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ASSET PURCHASE AGREEMENT
ASSET PURCHASE AGREEMENT dated as of January 22, 1999 by and between
Xxxxxx Electronics Corporation, a Delaware corporation ("Buyer"), Primestar,
Inc., a Delaware corporation ("Primestar"), Primestar Partners L.P., a Delaware
limited partnership ("PLP"), Tempo Satellite, Inc., an Oklahoma corporation
("Seller") and, with respect to certain provisions hereof, each of the
Stockholders (as defined herein).
W I T N E S S E T H:
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WHEREAS, Primestar desires to sell and cause to be sold, and Buyer
desires to purchase, all of Primestar's rights to the Option (as defined herein)
pursuant to the Tempo Agreement (as defined herein), all pursuant to the terms
and subject to the conditions set forth in this Agreement;
WHEREAS, after giving effect to such transfer pursuant to which Buyer
will obtain an option to acquire the Transferred Assets (as defined herein),
Seller desires to transfer or cause to be transferred, and Buyer desires to
purchase, all of Seller's right, title and interest in and to the Transferred
Assets, and Seller desires to transfer or cause to be transferred, and Buyer
desires to assume, the Assumed Liabilities (as defined herein), all pursuant to
the terms and subject to the conditions set forth in this Agreement;
WHEREAS, PLP desires to relinquish its rights under the Capacity
Option (as defined herein) and any other rights it may have to the Transferred
Assets in connection with the transactions contemplated hereby;
NOW, THEREFORE, in consideration of the premises and of the mutual
representations, warranties, covenants and agreements hereinafter contained, the
parties hereto agree as follows:
ARTICLE I
DEFINITIONS
For purposes of this Agreement, the following terms shall have the
following meanings (such meanings to be equally
applicable to both the singular and the plural forms of the terms defined):
"AAA Rules" shall have the meaning set forth in Section 14.11.
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"Acceptable Alternative Arrangement" shall mean any arrangement
satisfactory to Seller and its counsel and to Buyer and its counsel that: (a)
to the fullest extent feasible in light of any regulatory constraint assures the
parties hereto as nearly as possible the same economic results as if the
transactions contemplated by this Agreement had occurred as contemplated herein;
provided, however, that no party hereto shall be obligated to enter into any
such arrangement which would require it to make expenditures or dispose of
assets in excess of the amount of expenditures or dispositions of assets
contemplated by this Agreement unless compensated for such arrangement; (b)
would, in the reasonable judgment of Seller and Buyer, be reasonably expected
either not to require FCC consent or to result in such consent being granted, if
required; and (c) would, in the reasonable judgment of Seller and Buyer, be
reasonably expected to result in clearance of the arrangement by the relevant
antitrust enforcement agencies, if required.
"Action" shall mean any action, suit or proceeding at law or in
equity, arbitration, inquiry, investigation or governmental, administrative,
regulatory or other proceeding by or before any Governmental Entity.
"Affiliate" shall mean, with respect to any Person, any other Person
directly or indirectly controlling, controlled by or under common control with
such Person. For purposes of the immediately preceding sentence, the term
"control" (including, with correlative meanings, the terms "controlling",
"controlled by" and "under common control with"), as used with respect to any
Person, means the possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of such Person, whether
through ownership of voting securities, by contract or otherwise. Without any
inference of control, Seller shall be deemed an Affiliate of Primestar, and vice
versa, for purposes of this Agreement.
"Agreement" shall mean this Asset Purchase Agreement, as the same may
be amended, modified or supplemented from time to time in accordance with its
terms.
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"Antitrust Division" shall have the meaning set forth in Section 8.3.
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"Assigned Contracts" shall mean, without duplication, the Ground
Satellite Contracts, the In-Orbit Satellite Contracts and all contract rights
and obligations of Primestar under the Tempo Agreement solely relating to the
Option.
"Assumed Liabilities" shall have the meaning set forth in Section
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2.3(b).
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"Business" shall mean any business activity of Seller and Primestar
relating to the construction, operation, launch and ownership of the Ground
Satellite and the In-Orbit Satellite.
"Business Day" shall mean a day that is not a Saturday, a Sunday or a
day on which banking institutions in New York, New York are not required to be
open.
"Buyer Group" shall have the meaning set forth in Section 13.1.
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"Buyer Material Adverse Effect" shall mean a material adverse effect
on, or any effect that results in a material adverse change in, (1) the
business, condition (financial or otherwise), operations, results of operations,
assets or liabilities of Buyer or (2) the ability of Buyer or Newco, as the case
may be, to consummate the transactions contemplated by this Agreement.
"Capacity Option" shall have the meaning set forth in Section 6.4.
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"CERCLA" shall means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended to the date hereof.
"Claims Made Policies" shall have the meaning set forth in Section
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8.9(a).
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"Closing" shall mean, (i) with respect to the Ground Satellite Assets,
the portion of the Option relating thereto and the Ground Satellite Liabilities,
the Initial Closing, and (ii) with respect to the In-Orbit Satellite Assets, the
portion of the Option relating thereto and the In-Orbit Satellite Liabilities,
the Subsequent Closing.
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"Closing Date" shall mean the Initial Closing Date and/or the
Subsequent Closing Date, as applicable.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
"Communications Act" shall mean the Federal Communications Act of
1934, as amended.
"Confidentiality Agreement" shall mean that certain confidentiality
agreement, dated as of October 7, 1998, between Primestar and DIRECTV
Enterprises, Inc., a wholly owned Subsidiary of Buyer. Buyer hereby agrees to
be bound by the Confidentiality Agreement on the same terms as DIRECTV
Enterprises, Inc. Seller and PLP hereby agree to be bound by such agreement on
the same terms as Primestar.
"Consents" shall mean consents, waivers, approvals, allowances,
novations, authorizations, permits, filings, orders, registrations and
notifications.
"Contracts" shall mean all Intellectual Property and other license
agreements, manufacturing agreements, supply agreements, programming agreements,
purchase orders, sales orders, distributor agreements, sales representation
agreements, warranty agreements, indemnity agreements, service agreements,
insurance policies and arrangements, guarantee agreements, credit agreements,
notes, mortgages, employment and consulting agreements, security agreements,
financing leases, comfort letters, foreign currency forward exchange contracts,
confidentiality agreements, joint venture agreements, partnership agreements,
leases (other than Leases), open bids, powers of attorney and all other
agreements and contracts and binding memoranda of understanding, letters of
intent and commitments, including, in each case, all amendments, modifications
and supplements thereto and waivers and consents thereunder.
"Damages" shall mean any and all losses, Liabilities, claims, damages,
deficiencies, obligations, fines, payments, Taxes, Liens, costs and expenses,
matured or unmatured, absolute or contingent, accrued or unaccrued, liquidated
or unliquidated, known or unknown, whenever arising and whether or not resulting
from Third Party Claims (including the costs and expenses of any and all Actions
or other legal matters; all amounts paid in connection with any demands,
assessments, judgments, settlements and compromises relating thereto; interest
and penalties recovered by a third party with respect thereto; out-of-pocket
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expenses and reasonable attorneys', accountants' and other experts' fees and
expenses reasonably incurred in investigating, preparing or defending against
any such Actions or other legal matters or in asserting, preserving or enforcing
an Indemnitee's rights hereunder; and any losses that may result from the
granting of injunctive relief as a result of any such Actions or other legal
matters).
"DBS" shall mean Direct Broadcast Satellite.
"Demand" shall have the meaning set forth in Section 14.11.
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"Disputes" shall have the meaning set forth in Section 14.11.
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"Environmental Laws" shall mean any and all applicable Laws and
Licenses issued, promulgated or entered into by any Governmental Entity relating
to the environment, the protection or preservation of human health or safety,
including the health and safety of employees, the preservation or reclamation of
natural resources, or the management, Release or threatened Release of Hazardous
Materials, in each case as in effect on the date hereof and as may be amended
from time to time.
"Environmental Liabilities" shall mean all Damages, including the
costs and expenses of investigation and defense of any claim, and of any
settlement or judgment, of whatever kind or nature, contingent or otherwise,
matured or unmatured, foreseeable or unforeseeable, any of which are incurred as
a result of the presence, Release or threatened Release of Hazardous Materials
or a violation of Environmental Laws and including the following:
(i) Damages for personal injury, or injury to property or natural
resources occurring upon or off of any of the real properties used at any time
in the Business or any Former Business related to the Business, including, but
not limited to, lost profits, consequential damages (including from business
interruptions and from diminution in the value of any property), the cost of
demolition and rebuilding of any improvements (including landscaping on real
property), interest and penalties;
(ii) fees incurred for the services of attorneys, consultants,
contractors, experts, laboratories and all other costs incurred in connection
with the investigation or remediation of Hazardous Materials or violation of
Environmental
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Laws or the enforcement of any rights or remedies under Environmental Laws; and
(iii) Liability to any third person or Governmental Entity for costs
expended in connection with the items referenced in subparagraphs (i) and (ii)
of this definition.
"FCC" shall mean the Federal Communications Commission and any
successor agency thereto.
"FCC Consent" shall mean an order, action or decision by the FCC (or
by FCC staff pursuant to delegated authority) consenting to the assignment of
the FCC License from Seller to Buyer or Newco, which is not subject to a
Material Condition that is unacceptable to Buyer.
"FCC License" shall mean Seller's FCC authorization to construct,
launch and operate DBS satellites using 11 FCC-specified frequencies at the 119
West Longitude orbital location.
"Final Order" shall mean the FCC Consent where (i) the FCC Consent has
not been reversed, stayed, enjoined, annulled, set aside, suspended or modified
by any Governmental Entity; (ii) no timely request for judicial or
administrative stay, reconsideration or review is pending before any
Governmental Entity, or the right to such judicial or administrative stay,
reconsideration or review of the FCC Consent has been waived in writing by each
party having such right; (iii) the FCC Consent is not under reconsideration or
review by the FCC on its own motion; and (iv) the times for filing any request
for judicial or administrative stay, reconsideration and review of the FCC
Consent, or for the FCC to reconsider the FCC Consent on its own motion, have
expired.
"Former Business" shall mean any corporation, partnership, entity,
division, business unit, business, assets, plant, product line, operations or
contract (including any assets and Liabilities comprising the same) that has
been sold, conveyed, assigned, transferred or otherwise disposed of or divested
by Seller, Primestar, PLP or any of their respective Subsidiaries (or any of
their predecessors) or the operations, activities or production of which has
been discontinued, abandoned, completed or otherwise terminated by Seller,
Primestar, PLP or any of their respective Subsidiaries (or any of their
predecessors), in each of the foregoing cases, as of the Initial Closing Date.
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"FTC" shall have the meaning set forth in Section 8.3.
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"GAAP" shall mean generally accepted accounting principles in the
United States of America, as in effect on the date of this Agreement.
"GM" shall mean General Motors Corporation, a Delaware corporation.
"Governmental Entity" shall mean any federal, state or local
government or any court, arbitral tribunal, administrative or regulatory agency
or commission or other governmental authority or agency, domestic, foreign or
international.
"Ground Satellite" shall mean the Seller's high power DBS satellite
constructed by Loral under the Loral Contract, which is currently located on the
ground.
"Ground Satellite Assets" shall have the meaning set forth in Section
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2.2(a).
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"Ground Satellite Contracts" shall mean all Contracts (including
insurance policies or arrangements necessary for the construction, launch,
ownership or operation) that relate to the construction, launch, ownership or
operation of the Ground Satellite, including, to such extent, the Loral Contract
and all satellite work in process and launch work in process pursuant thereto,
and all tangible and intangible deliverables pursuant to such Contracts, and
including all rights to enforce such Contracts. Schedule 1.1(a) identifies
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certain of the material Ground Satellite Contracts.
"Ground Satellite Liabilities" shall have the meaning set forth in
Section 2.3(a).
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"Hazardous Materials" shall mean those materials, substances or wastes
that are regulated by, or form the basis of liability under, any Environmental
Law, including PCBs, pollutants, solid wastes, explosive or regulated
radioactive materials or substances, hazardous or toxic materials, substances,
wastes or chemicals, petroleum (including crude oil or any fraction thereof) or
petroleum distillates, asbestos or asbestos containing materials, materials
listed in 49 C.F.R. Section 172.101 and materials defined as hazardous
substances pursuant to Section 101(14) of CERCLA.
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"HSR Act" shall mean the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act
of 1976, as amended, including the rules and regulations promulgated thereunder.
"Indemnifying Party" shall have the meaning set forth in Section
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13.3(a).
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"Indemnitee" shall mean any member of the Buyer Group or the Seller
Group which may seek indemnification under this Agreement.
"Initial Closing" shall have the meaning set forth in Section 4.1(a).
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"Initial Closing Date" shall have the meaning set forth in Section
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4.1(a).
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"Initial Purchase Price" shall have the meaning set forth in Section
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3.1(a).
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"In-Orbit Satellite" shall mean the Seller's high power DBS satellite
constructed by Loral under the Loral Contract, which was launched in March 1997
and is currently on station at 119 West Longitude.
"In-Orbit Satellite Assets" shall have the meaning set forth in
Section 2.2(b).
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"In-Orbit Satellite Contracts" shall mean all Contracts (including
insurance policies or arrangements necessary for the construction, launch,
ownership or operation) that relate to the construction, launch, ownership or
operation of the In-Orbit Satellite, including the Loral Contract and all
satellite work in process and launch work in process pursuant thereto (to the
extent not included in the Ground Satellite Contracts), and all tangible and
intangible deliverables pursuant to such Contracts, and including all rights to
enforce such Contracts. Schedule 1.1(b) identifies certain of the material In-
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Orbit Satellite Contracts.
"In-Orbit Satellite Liabilities" shall have the meaning set forth in
Section 2.3(b).
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"Intellectual Property" shall mean (1) all inventions (whether
patentable or unpatentable and whether or not reduced to practice), all
improvements thereto, and all patents (including utility and design patents,
industrial designs and utility
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models), patent applications, and patent and invention disclosures, and all
other rights of inventorship, worldwide, together with all reissuances,
continuations, continuations-in-part, divisions, revisions, supplementary
protection certificates, extensions and reexaminations thereof; (2) all
trademarks, service marks, trade names, trade dress, logos, business and product
names and slogans, worldwide, and registrations and applications for
registration thereof; (3) all copyrights in copyrightable works, and all other
rights of authorship, worldwide, and all applications, registrations and
renewals in connection therewith; (4) all mask works and semiconductor chip
rights, worldwide, and all applications, registrations and renewals in
connection therewith; (5) all trade secrets and confidential business and
technical information (including ideas, research and development, know-how,
formulas, technology, compositions, manufacturing and production processes and
techniques, technical data, engineering, production and other designs, drawings,
engineering notebooks, industrial models, software and specifications); (6) all
computer and electronic data processing programs and software, both source code
and object code (including data and related documentation, flow charts,
diagrams, descriptive texts and programs, computer print-outs, underlying tapes,
computer databases and similar items), computer applications and operating
programs; (7) all rights to xxx for and remedies against past, present and
future infringements of any or all of the foregoing and rights of priority and
protection of interests therein under the Laws of any jurisdiction worldwide;
(8) all copies and tangible embodiments of any or all of the foregoing (in
whatever form or medium, including electronic media); and (9) all other
proprietary, intellectual property and other rights relating to any or all of
the foregoing.
"IRS" shall mean the Internal Revenue Service.
"Knowledge" shall mean actual knowledge after reasonable inquiry and
investigation.
"Laws" shall mean all laws, statutes, constitutions, treaties, rules,
regulations, ordinances, codes, judgments, rulings, orders, writs, decrees,
stipulations, injunctions, restraining orders and binding determinations of all
Governmental Entities.
"Leases" shall mean all leases, subleases and other arrangements with
respect to real property, including, in each
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case, all amendments, modifications and supplements thereto and waivers and
consents thereunder.
"Liability" shall mean any and all debts, liabilities, obligations and
commitments, whether known or unknown, asserted or unasserted, fixed, absolute
or contingent, matured or unmatured, accrued or unaccrued, liquidated or
unliquidated, due or to become due, whenever or however arising (including
whether arising out of any Contract or Lease or tort based on negligence, strict
liability or otherwise) and whether or not the same would be required by GAAP to
be reflected as a liability in financial statements or disclosed in the notes
thereto.
"Licenses" shall mean all licenses, permits, authorizations, consents,
certificates, registrations, variances, exemptions, waivers, franchises and
other approvals from any Governmental Entity, including the FCC License and
environmental Licenses.
"Liens" shall mean, with respect to any property or assets, any
mortgage, deed of trust, pledge, hypothecation, assignment, security interest,
lien, charge, easement, encumbrance, preference, priority or other security
agreement or preferential arrangement of any kind or nature with respect to such
property or assets (including any conditional sale or other title retention
agreement having substantially the same economic effect as any of the
foregoing).
"Loral" shall mean Space Systems/Loral, Inc., a Delaware corporation.
"Loral Contract" shall mean TPO-1-290 BSS Construction Agreement,
dated as of February 22, 1990, between Seller and Loral, as amended to the date
hereof.
"Material Condition" shall have the meaning set forth in Section 8.4.
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"Medium Power Agreement" shall mean that certain agreement dated as of
the date hereof among Buyer, Primestar, PLP, Primestar MDU, Inc. and the
Stockholders.
"Newco" shall have the meaning set forth in Section 2.1.
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"Occurrence Basis Policies" shall have the meaning set forth in
Section 8.9(a).
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"Option" shall mean the exclusive, irrevocable and freely transferable
option granted to Primestar by TSAT pursuant to the Tempo Agreement whereby
Primestar is entitled to acquire for an exercise price of $2.5 million, all of
the right, title and interest of Tempo in, to and under the Transferred Assets.
"Ordinary Course of Business" shall mean the ordinary course of
business consistent with past custom and practice (including with respect to
quantity and frequency).
"Outside Date" shall mean December 31, 1999, subject to extension
thereof as contemplated in Article XI.
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"Panel" shall have the meaning set forth in Section 14.11.
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"Permitted Liens" shall mean Liens for (1) Taxes, assessments and
other governmental charges, if such Taxes, assessments or charges shall not be
due and payable; (2) workmen's, repairmen's or other similar Liens (inchoate or
otherwise) arising or incurred in the Ordinary Course of Business in respect of
obligations which are not overdue; (3) minor title defects, recorded easements
or Liens affecting real property, which defects, easements or Liens do not,
individually or in the aggregate, impair the continued use, occupancy, value or
marketability of title of the real property to which they relate, assuming that
the property is used on substantially the same basis as such property is
currently being used in the Business; (4) the Capacity Option; (5) the Option;
and (6) the Reimbursement Obligation; provided, however, that Liens described in
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clauses (1) and (2) above shall only constitute Permitted Liens with respect to
periods prior (but not including) to the applicable Closing as contemplated
hereunder.
"Person" shall mean any individual, partnership, joint venture, trust,
corporation, limited liability entity, unincorporated organization or other
entity (including a Governmental Entity).
"Pre-Closing Period" shall have the meaning set forth in Section 4.6.
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"Purchase Price" shall have the meaning set forth in Section 3.1(b).
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"Regulatory Provisions" shall mean all applicable requirements of the
Communications Act and the published
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policies, rules, decisions, and regulations of the FCC as amended from time to
time.
"Reimbursement Obligation" shall mean the Liability in the aggregate
amount of $465 million owed to PLP by Seller in connection with the construction
of the Ground Satellite and the In-Orbit Satellite.
"Related to the Business" shall mean related primarily to, used
primarily in, arising primarily from, or held primarily for use in, the
Business, or otherwise necessary for the operation of the Business.
"Release" shall have the meaning set forth in Section 101(22) of
CERCLA.
"Retained Liabilities" shall have the meaning set forth in Section
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2.3(c).
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"Revised Statements" shall have the meaning set forth in Section
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3.2(a).
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"Satellite Contracts" shall mean the Ground Satellite Contracts and
the In-Orbit Satellite Contracts.
"Seller Affiliated Group" shall have the meaning set forth in Section
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5.4(a).
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"Seller Group" shall have the meaning set forth in Section 13.2.
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"Seller Specified Affiliates" shall have the meaning set forth in
Section 2.2(a).
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"Stockholders" shall mean those stockholders of Primestar set forth on
the signature pages hereto.
"Subsequent Closing" shall have the meaning set forth in Section
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4.1(b).
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"Subsequent Closing Date" shall have the meaning set forth in Section
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4.1(b).
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"Subsequent Purchase Price" shall have the meaning set forth in
Section 3.1(b).
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"Subsidiary" of a specified Person shall mean any corporation or other
entity of which securities or other ownership interests having ordinary voting
power to elect a majority of the Board of Directors or other Persons performing
similar functions are directly or indirectly owned by such Person.
"Taxes" shall mean all taxes, charges, duties, fees, levies or other
assessments, including income, excise, property, sales, use, gross receipts,
recording, insurance, value added, profits, license, withholding, payroll,
employment, net worth, capital gains, transfer, stamp, social security,
environmental, occupation and franchise taxes, imposed by any Governmental
Entity, and including any interest, penalties and additions attributable thereto
and any Liability in respect of any of the foregoing amounts as a transferee or
as an indemnitor, guarantor or surety or in a similar capacity under any
Contract, arrangement, agreement, understanding or commitment (whether oral or
written).
"Tempo Agreement" shall mean the TSAT Tempo Agreement, dated as of
February 6, 1998, between Primestar and TSAT, as amended as contemplated in this
Agreement to provide for, among other things, the ability to exercise the Option
in part.
"Third Party Claim" shall have the meaning set forth in Section
-------
13.3(a).
-------
"Threshold" shall have the meaning set forth in Section 13.5(a).
---------------
"Transferred Asset Material Adverse Effect" shall mean a material
adverse effect on the use or benefit of any of the Transferred Assets.
"Transferred Assets" shall have the meaning set forth in Section
-------
2.2(b).
------
"Transfer Taxes" shall have the meaning set forth in Section 4.5.
-----------
"TSAT" shall mean TCI Satellite Entertainment Inc., a Delaware
corporation.
"TSAT Merger Agreement" shall mean the TSAT Merger Agreement, dated as
of February 6, 1998, between TSAT and Primestar.
13
ARTICLE II
SALE AND PURCHASE OF TRANSFERRED ASSETS; ASSUMPTION OF ASSUMED LIABILITIES
Section 2.1 Sale and Purchase of the Option. Subject to the terms
-------------------------------
and conditions and in reliance upon the representations and warranties contained
herein, (i) at the Initial Closing (as defined herein), Primestar shall sell,
assign, convey, transfer and deliver to Buyer, or, at Buyer's option, to DIRECTV
Enterprises, Inc. or one or more other direct or indirect Subsidiaries of Buyer
(collectively, "Newco"), all of Primestar's right, title and interest in and to
the Option, to the extent it relates to the Ground Satellite, and (ii) at the
Subsequent Closing (as defined herein) Primestar shall sell, assign, convey,
transfer and deliver to Buyer, or, at Buyer's option to Newco, all of
Primestar's remaining right, title and interest in and to the Option.
Section 2.2 Sale and Purchase of Transferred Assets.
---------------------------------------
(a) Assets to be Transferred to Buyer at the Initial Closing.
--------------------------------------------------------
Subject to the terms and conditions and in reliance upon the representations and
warranties contained herein, upon the Initial Closing, Buyer shall exercise the
Option in part with respect to the acquisition of the Ground Satellite Assets
and, pursuant to such exercise, Seller shall sell, assign, convey, transfer and
deliver to Buyer, or, at Buyer's option, Newco, all of the right, title and
interest of Seller (and shall cause to be so transferred and delivered all of
the right, title and interest), if any, of TSAT, Primestar and any direct or
indirect Subsidiary of TSAT or Primestar (collectively, the "Seller Specified
Affiliates")) in and to all assets, properties and rights (whether tangible or
intangible, real, personal or mixed, fixed, contingent or otherwise and wherever
located) related to, associated with, or used in connection with the Ground
Satellite (other than the FCC License) (collectively, the "Ground Satellite
Assets"), free and clear of all Liens (other than Permitted Liens), which
assets, properties and rights include the following:
(i) the Ground Satellite or, if title to the Ground Satellite shall
not have transferred to Seller under the Loral Contract, all right, title and
interest of Seller in and to the Ground Satellite thereunder;
14
(ii) all of the right, title and interest of Seller in and to the
Ground Satellite Contracts, including all rights of Seller with respect to the
construction, launch, ownership or operation of the Ground Satellite; and
(iii) all of the right, title and interest of Seller in and to any
Intellectual Property to the extent such Intellectual Property relates to the
construction, launch, ownership or operation of the Ground Satellite.
(b) Assets to be Transferred to Buyer at the Subsequent Closing.
-----------------------------------------------------------
Subject to the terms and conditions and in reliance upon the representations and
warranties contained herein, upon the Subsequent Closing, Buyer shall exercise
the Option in part with respect to the acquisition of the In-Orbit Satellite
Assets and, pursuant to such exercise, Seller shall sell, assign, convey,
transfer and deliver to Buyer, or, at Buyer's option, Newco, all of the right,
title and interest of Seller (and shall cause to be so transferred and delivered
all of the right, title and interest, if any, of each of the Specified Seller
Affiliates) in and to all assets, properties and rights (whether tangible or
intangible, real, personal or mixed, fixed, contingent or otherwise and wherever
located) related to, associated with, or used in connection with the In-Orbit
Satellite (collectively, the "In-Orbit Satellite Assets," and, together with the
Ground Satellite Assets and the Option, the "Transferred Assets"), free and
clear of all Liens (other than Permitted Liens), which assets, properties and
rights include the following:
(i) the In-Orbit Satellite or, if title to the In-Orbit Satellite
shall not have transferred to Seller under the Loral Contract, all right, title
and interest of Seller in and to the In-Orbit Satellite thereunder;
(ii) all of the right, title and interest of Seller in
and to (x) all Licenses granted to Seller by the FCC with respect to the
Transferred Assets, including the FCC License, and (y) any application for
modification of the FCC License that was filed prior to the date hereof or that
may be filed hereafter until the Subsequent Closing;
(iii) all of the right, title and interest of Seller in and to the In-
Orbit Satellite Contracts, including all rights under the Loral Contract for
Damages or insurance proceeds relating to claims made by Seller prior to the
date hereof, a summary of which is set forth in Schedule 2.2(b)(iii) and any
--------------------
15
claims made by Buyer after the Subsequent Closing Date, in connection with the
In-Orbit Satellite; and
(iv) all of the right, title and interest of Seller in and to any
Intellectual Property to the extent such Intellectual Property relates to the
construction, launch, ownership or operation of the In-Orbit Satellite.
It is specifically acknowledged and agreed by Buyer that Seller is not
assigning, transferring or conveying to Buyer the right to acquire any assets
pursuant to this Agreement other than the Transferred Assets.
(c) Anything contained herein to the contrary notwithstanding, this
Agreement will not constitute an assignment, an attempted assignment or an
agreement to assign any Contract, Lease or License if an assignment or attempted
assignment of the same without the Consent of any other party or parties thereto
would constitute a breach thereof or in any way impair the rights of Seller,
Primestar, Buyer or Newco thereunder. Each of Seller and Primestar will use its
commercially reasonable efforts (at Sellers's and Primestar's expense), and
Buyer will cooperate (it being understood that such cooperation will not include
any requirement to pay any consideration or offer or grant any financial
accommodation in excess of any Contractual obligation required under the terms
of such agreement) in all reasonable respects with Seller and Primestar to
obtain prior to the Closing all Consents and to resolve all impracticalities of
assignments or transfers necessary to sell, assign, convey, transfer and deliver
to Buyer or Newco (if Buyer so elects) the Transferred Assets. If any such
Consent is not obtained or if an attempted assignment would be ineffective or
would impair Seller's, Primestar's, Buyer's or Newco's rights under any such
Contract, Lease or License so that Buyer or Newco (if Buyer so elects) would not
receive all such rights, then (1) each of Seller and Primestar will (x) ensure
that the full benefits of any such Contract, Lease or License are provided or
caused to be provided to Buyer or Newco (if Buyer so elects), and (y) pay
promptly or cause to be paid promptly to Buyer or Newco (if Buyer so elects)
when received all monies and other properties received by Seller, any Seller
Specified Affiliates or any other Affiliate of Seller on its behalf with respect
to a Contract, Lease or License to the extent that Buyer (or Newco) would have
been entitled to receive such monies and other properties if such Consent had
been obtained; and (2) in consideration of Seller and Primestar providing or
causing to be provided to Buyer or Newco (if Buyer so elects) the full benefits
16
thereof, Buyer or Newco will perform and discharge on behalf of Seller and
Primestar all of Seller's and Primestar's liabilities, obligations or
commitments thereunder which are Assumed Liabilities described in Section 2.3 in
-----------
accordance with the provisions thereof. In addition, Seller and Primestar will
take such other actions (at Seller's and Primestar's expense) as may reasonably
be requested by Buyer in order to place Buyer or Newco (if Buyer so elects),
insofar as reasonably possible, in the same position as if such Contract, Lease
or License had been transferred as contemplated hereby and so that all the
benefits relating thereto, including possession, use, potential for gain and
dominion, control and command, shall inure to Buyer or Newco (if Buyer so
elects), subject to the assumption by Buyer of all obligations and risks that
arise after the Closing Date with respect to such Contract, Lease or License
including all risks of loss thereunder. Notwithstanding the foregoing, if any
such Consent is not obtained prior to the Closing, Seller will continue to use
its commercially reasonable efforts (at Seller's expense) to obtain all such
Consents (and, if and when such Consents are obtained, the transfer of the
applicable Contract, Lease or License will be effected in accordance with the
terms of this Agreement).
Section 2.3 Assumption of Assumed Liabilities.
---------------------------------
(a) Assumption of Ground Satellite Liabilities. Subject to Section
------------------------------------------ -------
2.3(c), effective as of the Initial Closing, and upon the terms and subject to
------
the conditions of this Agreement, Buyer hereby assumes (i) all Liabilities of
Seller arising from and after the Initial Closing Date under or in respect of
the Ground Satellite Assets and (ii) that portion of the Reimbursement
Obligation attributable to the construction of the Ground Satellite; provided,
--------
that, with respect to the preceding clause (i), such assumption shall not
include assumption of any Liabilities (x) which relate to any Ground Satellite
Contract as to which Seller is in default under such obligations at the Initial
Closing Date (or would be in default on the Initial Closing Date, assuming the
giving of any applicable notices and the lapse of any applicable waiting periods
under the Ground Satellite Contracts) (provided further that the portion of any
Liabilities under the Ground Satellite Contracts as to which Seller is not in
default shall not be excluded hereby) or (y) which are due and payable on or
before the Initial Closing Date. In addition (but without duplication), Buyer
agrees to assume, effective as of the Initial Closing Date, the payment of
approximately $17.5 million which may be due under the Loral Contract with
respect to the launch of the Ground
17
Satellite and the in-orbit acceptance thereof, in each case, in accordance with
the terms of the Loral Contract. The Liabilities required to be assumed by Buyer
pursuant to this Section 2.3(a) are referred to herein collectively as the
-------------
"Ground Satellite Liabilities." Except as set forth in this Section 2.3(a), it
--------------
is hereby expressly understood and agreed that neither Buyer nor any Affiliates
of Buyer will assume or undertake to pay, perform or discharge and none thereof
will be liable for, and Seller will remain liable for and pay, perform and
discharge when due, all Liabilities of Seller arising under the Ground Satellite
Assets other than the Ground Satellite Liabilities.
(b) Assumption of In-Orbit Liabilities. Subject to Section 2.3(c),
---------------------------------- --------------
effective as of the Subsequent Closing, and upon the terms and subject to the
conditions of this Agreement, Buyer agrees to assume (i) all Liabilities of
Seller arising from and after the Subsequent Closing Date under or in respect of
the In-Orbit Satellite Assets and (ii) that portion of the Reimbursement
Obligation attributable to the construction of the In-Orbit Satellite; provided,
--------
that in the case of the preceding clause (i) such assumption shall not include
assumption of any Liabilities (x) which relate to any In-Orbit Satellite
Contract as to which Seller is in default under such obligations at the
Subsequent Closing Date (or would be in default at the Subsequent Closing Date,
assuming the giving of any applicable notices and the lapse of any applicable
waiting periods under the In-Orbit Satellite Contracts), provided further that
the portion of any Liabilities under the In-Orbit Satellite Contracts as to
which Seller is not in default shall not be excluded hereby or (y) which are due
and payable on or before the Subsequent Closing Date. In addition (but without
duplication), Buyer agrees to assume, effective as of the Subsequent Closing
Date, the payment of $8 million which may be due under the Loral Contract with
respect to the in-orbit acceptance of the In-Orbit Satellite and Liabilities not
to exceed $17 million with respect to disputes with Loral regarding the
insurance required by the terms of the Loral Contract and the tracking,
telemetry and control provided by Loral with respect to the In-Orbit Satellite,
in each case in accordance with the terms of the Loral Contract. The
Liabilities required to be assumed by Buyer pursuant to this Section 2.3(b) are
--------------
referred to herein collectively as the "In-Orbit Satellite Liabilities" and,
together with the Ground Satellite Liabilities, the "Assumed Liabilities."
Except as expressly set forth in this Section 2.3(b), it is hereby expressly
--------------
understood and agreed that neither Buyer nor any Affiliates of Buyer will assume
or undertake to pay, perform or discharge and none thereof will be liable for,
and Seller will remain liable for and pay, perform and discharge
18
when due, all Liabilities of Seller arising under the In-Orbit Satellite Assets
other than the In-Orbit Satellite Liabilities.
(c) Retained Liabilities. Anything contained herein to the contrary
--------------------
notwithstanding, neither Buyer nor any Affiliate of Buyer will assume or
undertake to pay, perform or discharge and none thereof will be liable for, and
Seller or Primestar, as the case may be, will remain liable for and pay, perform
and discharge when due, all Liabilities which are not Assumed Liabilities. For
the purposes of clarity, and without limiting the generality of the foregoing,
Retained Liabilities (as defined below) include all Liabilities of Seller and
Primestar arising under the Transferred Assets that accrued, occurred or existed
on or prior to the Initial Closing Date, in the case of the Ground Satellite
Assets (whether asserted prior to, on or after the Initial Closing Date, and on
or prior to the Subsequent Closing Date, in the case of the In-Orbit Satellite
Assets (whether asserted prior to, on or after the applicable Closing Date)
(collectively, the "Retained Liabilities") other than the Assumed Liabilities,
including the following Liabilities:
(i) all Liabilities based upon, arising out of, relating to or
otherwise in connection with the Tempo Agreement other than Liabilities under
such agreement directly attributable to the Option or the Assumed Liabilities;
(ii) all Liabilities based upon, arising out of, relating to or
otherwise in connection with any actual or threatened or future Action with
respect to any events, actions, occurrences, omissions, circumstances or
conditions occurring or existing on or prior to the Initial Closing Date, in the
case of the Ground Satellite Assets, and on or prior to the Subsequent Closing
Date, in the case of the In-Orbit Satellite Assets, related to the Transferred
Assets, other than Actions based on Buyer's failure to pay, perform or discharge
any Assumed Liabilities;
(iii) all Liabilities based upon, arising out of, relating to or
otherwise in connection with any (A) tort, breach or violation of or non-
compliance with any Contract or Lease pursuant to which Seller or its Affiliates
is a party or to which their assets may be subject, or (B) infringement,
violation of Law or regulatory noncompliance (whether civil or criminal), in
each case occurring on or prior to the Initial Closing Date, in the case of the
Ground Satellite Assets, and on or prior to the Subsequent Closing Date, in the
case of the In-Orbit Satellite
19
Assets (except for any such non-compliance relating to the failure of Seller to
pay any Assumed Liability);
(iv) all Environmental Liabilities based upon, arising out of,
relating to or otherwise in connection with events, actions, occurrences,
omissions, circumstances or conditions related to the Transferred Assets
occurring or existing on or prior to the Initial Closing Date, in the case of
the Ground Satellite Assets, and on or prior to the Subsequent Closing Date, in
the case of the In-Orbit Satellite Assets;
(v) all Liabilities in respect of current or former employees of
Seller or any of its Subsidiaries or Affiliates based upon, arising out of,
relating to or otherwise in connection with employment by Seller or any of its
Subsidiaries or Affiliates at any time prior to, on or after the Subsequent
Closing Date, whether pursuant to benefit plans or otherwise;
(vi) all Liabilities for or relating to indebtedness for borrowed
money, other than the Reimbursement Obligation;
(vii) all Liabilities for or relating to the guarantee of any
indebtedness or obligation of any Person;
(viii) all Liabilities related to any Former Businesses;
(ix) all Liabilities for Transfer Taxes, income, sales,
use and other Taxes arising in connection with the consummation of the
transactions contemplated hereby;
(x) all Liabilities for any Taxes of Seller or Primestar, and all
Liabilities for Taxes that relate to the Transferred Assets or the Assumed
Liabilities for periods (or portions thereof) up to and including the Initial
Closing Date, in the case of the Ground Satellite Assets, and up to and
including the Subsequent Closing Date, in the case of the In-Orbit Satellite
Assets;
(xi) Liabilities under the Loral Contract, if any, that do not relate
to the Transferred Assets;
(xii) Liabilities for which Seller or any of its Affiliates are made
responsible pursuant to this Agreement; and
20
(xiii) all Liabilities relating to tracking, telemetry and control
with respect to the Ground Satellite and the In-Orbit Satellite.
ARTICLE III
PURCHASE PRICE
Section 3.1 Purchase Price. Subject to the terms and conditions set
--------------
forth herein, in consideration for the sale, assignment, conveyance, transfer
and delivery of:
(a) the Ground Satellite Assets and that portion of the Option
relating thereto, Buyer will, at the Initial Closing, deliver the following
aggregate consideration (the "Initial Purchase Price"):
(i) to Primestar and PLP, in such proportions as Buyer, Primestar and
PLP shall mutually agree, the sum of Nine Million Seven Hundred Fifty Thousand
Dollars ($9,750,000), in payment for (A) the assignment of all rights of
Primestar under the portion of the Option relating to the Ground Satellite
Assets and (B) the termination of PLP's rights under the Capacity Option to the
extent it relates to PLP's rights with respect to the Ground Satellite;
(ii) to TSAT, the sum of Seven Hundred Fifty Thousand Dollars
($750,000), in payment of that portion of the exercise price under the Option
relating to the Ground Satellite Assets;
(iii) the assumption by Buyer of that portion of the Reimbursement
Obligation attributable to construction of the Ground Satellite (which portion
is in the principal amount of One Hundred Thirty-Nine Million Five Hundred
Thousand Dollars ($139,500,000)), and
(iv) the assumption by Buyer of the Ground Satellite Liabilities;
(b) the In-Orbit Satellite Assets, Buyer will, at the Subsequent
Closing, deliver to Seller the following consideration (the "Subsequent Purchase
Price" and together with the Initial Purchase Price, the "Purchase Price"):
(i) to Primestar and PLP, in such proportions as Buyer, Primestar and
PLP shall mutually agree, the sum of Twenty Two Million Seven Hundred Fifty
Thousand Dollars ($22,750,000), in
21
payment for (A) the assignment of all rights of Primestar under the portion of
the Option relating to the In-Orbit Satellite Assets and (B) the termination of
PLP's rights under the Capacity Option to the extent it relates to PLP's rights
with respect to the In-Orbit Satellite;
(ii) to TSAT, the sum of One Million Seven Hundred Fifty Thousand
Dollars ($1,750,000), in payment of that portion of the exercise price under the
Option relating to the In-Orbit Satellite Assets;
(iii) the assumption by Buyer of that portion of the Reimbursement
Obligation attributable to construction of the In-Orbit Satellite (which portion
is in the principal amount of Three Hundred Twenty Five Million Five Hundred
Thousand Dollars ($325,500,000); and
(iv) the assumption by Buyer of the In-Orbit Satellite Liabilities.
The Buyer undertakes to pay and discharge in full that portion of the
Reimbursement Obligation attributable to construction of the Ground Satellite
($139,500,000) on the Initial Closing Date, immediately after the assumption by
Buyer of the same, and to pay and discharge in full that portion of the
Reimbursement Obligation attributable to construction of the In-Orbit Satellite
($325,500,000) on the Subsequent Closing Date, immediately after the assumption
by Buyer of the same. PLP agrees that (i) Seller shall be released from any
portion of the Reimbursement Obligation assumed, satisfied and discharged by
Buyer hereunder and (ii) the aggregate liability of Buyer in respect of the
Reimbursement Obligation, if assumed, satisfied and discharged by Buyer in
accordance with Section 3.1(a) and Section 3.1(b) shall not exceed $139,500,000
-------------- --------------
on the Initial Closing Date and $325,500,000 on the Subsequent Closing Date. All
payments of money pursuant to this Section 3.1 shall be made by wire transfer of
-----------
immediately available funds to a bank account or accounts designated by the
recipient.
Section 3.2 Allocation of Purchase Price.
----------------------------
(a) Not later than 120 days after the Subsequent Closing Date (or if this
Agreement is terminated after the Initial Closing Date but prior to the
Subsequent Closing Date, not later than 120 days thereafter), Buyer shall
provide to Seller (and, when applicable, Primestar) copies of Form 8594 and any
required exhibits thereto (the "Asset Acquisition Statement") with Buyer's
22
proposed allocation of the purchase price paid by Buyer with respect to the
Transferred Assets. Within 20 days after the receipt of such Asset Acquisition
Statement, Seller (and, when applicable, Primestar) shall propose to Buyer any
changes to such Asset Acquisition Statement or shall indicate its concurrence
therewith, which concurrence shall not be unreasonably withheld. Thereafter,
Buyer shall provide to Seller (and, when applicable, Primestar) from time to
time revised copies of the Asset Acquisition Statement (the "Revised
Statements") so as to report any matters on the Asset Acquisition Statement that
need updating (including purchase price adjustments, if any). Within 20 days
after the receipt of any Revised Statement, Seller (and, when applicable,
Primestar) shall propose to Buyer any changes to such Revised Statement or shall
indicate its concurrence therewith, which concurrence shall not be unreasonably
withheld. Seller's (or Primestar's) failure to notify Buyer of any objection to
the Asset Acquisition Statement or a Revised Statement within 20 days after the
delivery thereof shall constitute Seller's (or Primestar's) concurrence
therewith. Subject to and in accordance with Section 3.2(b) below, Buyer and
--------------
Seller (and, when applicable, Primestar) shall endeavor in good faith to resolve
any differences with respect to the Asset Acquisition Statement or any Revised
Statements within 20 days after Buyer's receipt of notice of objections or
suggested changes from Seller (and, when applicable, Primestar). The costs of
preparing the Asset Acquisition Statement and any supporting materials
(including any appraisals) shall be borne equally by Buyer and Seller (and, when
applicable, Primestar).
(b) Subject to the provisions of the following sentence of this Section
-------
3.2(b), the Purchase Price for the Transferred Assets shall be allocated in
------
accordance with the Asset Acquisition Statement or, if applicable, the last
Revised Statement, provided by Buyer to Seller and Primestar pursuant to Section
-------
3.2(a) above, and, subject to the requirements of any applicable Tax law or
------
election, all Tax returns and reports filed by Buyer, Seller and Primestar shall
be prepared consistently with such allocation. If Seller or, when applicable,
Primestar, shall have withheld its consent to such allocation (which consent
shall not be unreasonably withheld) and Buyer and Seller have acted in good
faith to resolve the differences with respect to the items on the Asset
Acquisition Statement or any Revised Statement for a period of 20 days after
Buyer's or Primestar's receipt of notice of objections or suggested changes from
Seller, and, within such 20-day period, Buyer and Seller (or, when applicable,
Primestar) are unable to resolve such differences which, in the aggregate, are
material in relation to the Purchase
23
Price for the Transferred Assets within such 20 day period, (i) Buyer and Seller
shall, subject to the requirements of any applicable Tax law or election, file
all Tax returns and reports in a manner consistent with the allocation provided
in such statements and (ii) Buyer, Seller and Primestar shall refer any issues
as to which such differences exist to an independent accounting firm mutually
acceptable to Buyer, Seller and Primestar for resolution, which shall resolve
such issues within 30 days of the date submitted and whose resolution shall be
final and binding on the parties hereto. The fees and expenses of such
accounting firm shall be borne equally by Buyer, Seller and Primestar.
ARTICLE IV
THE CLOSINGS
Section 4.1 The Closings. (a) The closing of the transactions
------------
relating to the Ground Satellite Assets and the portion of the Option relating
thereto, the Ground Satellite Liabilities and that portion of the Reimbursement
Obligation relating to the Ground Satellite Assets, (the "Initial Closing") will
take place (i) at the offices of Weil, Gotshal & Xxxxxx LLP, 000 Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx, at 10:00 a.m. New York time, on the fifth Business Day
following the later of expiration or termination of the applicable waiting
period under the HSR Act and the satisfaction or waiver of all other conditions
set forth in Article IX, or (ii) at such other place, date and time as Seller
and Buyer may agree. The date of the Initial Closing is referred to herein as
the "Initial Closing Date."
(b) The closing of the transactions relating to the In-Orbit Satellite
Assets and the portion of the Option relating thereto, the In-Orbit Satellite
Liabilities and that portion of the Reimbursement Obligation relating to the In-
Orbit Satellite Assets, (the "Subsequent Closing") will take place (i) at the
offices of Weil, Gotshal & Xxxxxx LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, at
10:00 a.m. New York time, on the fifth Business Day following the expiration or
termination of the applicable waiting period under the HSR Act, FCC approval of
the assignment of the FCC License to Buyer or Newco, as the case may be, as set
forth in Article VIII and the satisfaction or waiver of all other conditions set
forth in Article X, or (ii) at such other place, date and time as Seller and
Buyer may agree. The date of the Subsequent Closing is referred to herein as
the "Subsequent Closing Date."
24
Section 4.2 Closing Deliveries of Seller. At the applicable Closing,
----------------------------
Seller will deliver to Buyer (i) such bills of sale and instruments of
assignment, conveyance and transfer as shall reasonably be requested by Buyer to
effect or evidence the sale, assignment, conveyance, transfer and delivery of
the Ground Satellite Assets or the In-Orbit Satellite Assets, as applicable, to
Buyer or Newco, as the case may be, and (ii) all closing certificates, opinions
of counsel and other documents required to be delivered by Seller to Buyer at
such Closing pursuant to this Agreement.
Section 4.3 Closing Deliveries of Primestar and PLP. At the
---------------------------------------
applicable Closing, (i) Primestar shall deliver to Buyer (or, at Buyer's
election, Newco) such bills of sale and instruments of assignment, conveyance
and transfer as shall reasonably be requested by Buyer to effect or evidence the
sale, assignment, conveyance, transfer and delivery of the Option to Buyer (or,
at Buyer's election, Newco) , (ii) PLP shall deliver to Buyer (against payment
therefor as provided in Section 3.1(a)(3)) and Section 3.1(b)(3) such
------------------ -----------------
instruments evidencing the satisfaction and discharge of all Liabilities related
to assets conveyed at such Closing owed to PLP by Seller as shall be reasonably
requested by Buyer, including the satisfaction and discharge of the
Reimbursement Obligation and the termination of the Capacity Option and (iii)
all closing certificates, opinions of counsel and other documents required to be
delivered by Primestar and PLP to Buyer at such Closing pursuant to this
Agreement.
Section 4.4 Closing Deliveries of Buyer. At the applicable Closing,
---------------------------
Buyer will deliver to Seller (i) the Initial Purchase Price or the Remaining
Purchase Price, as applicable, (ii) such instruments of assumption as shall
reasonably be requested by Seller to effect or evidence the assumption by Buyer
of the Liabilities being assumed pursuant to Section 2.2(a) or Section 2.2(b)
-------------- --------------
and (iii) all closing certificates, opinions and other documents required to be
delivered by Buyer to Seller at such Closing pursuant to this Agreement.
Section 4.5 Transfer Taxes. All applicable sales and transfer Taxes
--------------
(including Taxes, if any, imposed upon the transfer of personal property) and
filing, recording, registration, stamp, documentary and other Taxes and fees
("Transfer Taxes") that are payable in connection with this Agreement, the
transactions contemplated by this Agreement or the documents giving effect to
such transactions will be paid by Seller.
25
Section 4.6 Property Taxes. All personal property Taxes applicable
--------------
to the Ground Satellite Assets or the In-Orbit Satellite Assets for a taxable
period that includes but does not end on the applicable Closing Date that are
not paid prior to such Closing Date shall be prorated as of such Closing Date
based on the ratio of the number of days in the portion of the taxable period
that ends on such Closing Date (each, a "Pre-Closing Period") and the number of
days in the entire taxable period. To the extent that personal property Taxes
applicable to the Ground Satellite Assets or the In-Orbit Satellite Assets
attributable to the applicable Pre-Closing Period have not been paid on or prior
to such Closing Date, Seller will pay such amount to Buyer on such Closing Date
(or thereafter, promptly after request by Buyer if not identified by Seller on
such Closing Date).
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF SELLER AND PRIMESTAR
Seller and Primestar, jointly and severally, represent and warrant to
Buyer as follows:
Section 5.1 Organization. Each of Seller and Primestar is a
------------
corporation duly organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation. Each of Seller and Primestar has all
requisite power and authority, corporate or otherwise, to carry on its business
as presently conducted.
Section 5.2 Authority. Each of Seller and Primestar has all
---------
requisite power and authority, corporate or otherwise, to execute and deliver
this Agreement and to perform all of its obligations hereunder. Each of Seller
and Primestar has all requisite power and authority, corporate or otherwise, to
execute and deliver each instrument of transfer and other document to be
delivered by it pursuant to this Agreement and to perform all of its obligations
hereunder and thereunder. The execution and delivery by each of Seller and
Primestar of this Agreement and the performance by Seller and Primestar of its
respective obligations hereunder have been duly authorized by all necessary and
proper corporate action. No consent of the stockholders of Seller or Primestar,
other than consents already obtained, is required in connection with the
execution and delivery of this Agreement by each of Seller and Primestar and the
performance by each of them of their respective obligations hereunder. This
Agreement has been duly executed and delivered by Seller and
26
Primestar and constitutes the legal, valid and binding obligation of each of
them, enforceable against each of them in accordance with its terms. Each
instrument of transfer and other document to be delivered by Seller and
Primestar pursuant to this Agreement will be duly executed and delivered by each
of them and, when so executed and delivered, will constitute the legal, valid
and binding obligation of each of them, enforceable against each of them in
accordance with its terms.
Section 5.3 Noncontravention. The execution and delivery by each of
----------------
Seller and Primestar of this Agreement and each instrument of transfer and other
document to be delivered by each of them pursuant to this Agreement, the
performance by each of Seller and Primestar of its respective obligations to be
performed hereunder and the consummation of the transactions contemplated hereby
and thereby will not, (A) contravene or conflict with the certificate of
incorporation, by-laws or other organizational documents of Seller or Primestar
or any of their Subsidiaries; (B) contravene or conflict with or constitute a
violation of any provision of any Law or License (subject to compliance with the
HSR Act and the rules and regulations promulgated thereunder, and the Regulatory
Provisions) to which Seller, Primestar or any of their respective properties or
assets is subject; or (C) conflict with, result in a breach of, constitute a
default under, result in the acceleration of, cause Seller or Primestar to make
an offer to purchase under, create in any party the right to accelerate,
terminate, modify or cancel, require any notice or give rise to a loss of any
benefit under, any of the Transferred Assets or any Contract, Lease, Lien or
other arrangement to which Seller or Primestar is a party or by which it is
bound or to which any of the Transferred Assets is subject or result in the
creation or imposition of any Liens (other than Permitted Liens) on any of the
Transferred Assets, other than any loss of benefit, Lien or any other such event
which would not have a Transferred Asset Material Adverse Effect or adversely
affect the ability of Seller and Primestar to consummate the transactions
contemplated hereby or by any instrument of transfer or other document to be
delivered by them pursuant to this Agreement.
Section 5.4 Taxes.
-----
(a) Except as set forth on Schedule 5.4, all federal, state, local
------------
and foreign Tax returns required to be filed by or on behalf of Seller or
Primestar or any consolidated, combined, affiliated or unitary group of which
Seller or Primestar is or has ever been a member (together, the "Seller
Affiliated Group")
27
have been timely filed or requests for extensions have been timely filed and any
such extensions have been granted and have not expired and each such tax return
was complete and correct in all material respects. All Taxes with respect to
taxable periods covered by such tax returns and all other material Taxes for
which Seller or the Seller Affiliated Group is otherwise liable that are due
have been paid in full and to the extent the liabilities for such Taxes are not
due, adequate reserves have been established in accordance with GAAP.
(b) All Taxes due with respect to any completed and settled audit,
examination or deficiency litigation with any taxing authority for which Seller
or Primestar is or might otherwise be liable have been paid in full.
(c) There is no audit, examination, deficiency or refund litigation
pending and no taxing authority has given written notice of the commencement of
any audit, examination or deficiency litigation with respect to any Taxes.
(d) None of the Transferred Assets (i) is tax-exempt use property
within the meaning of section 168(h) of the Code, (ii) directly or indirectly
secures any debt the interest on which is exempt under the Code or (iii) is
property that is required to be treated as being owned by any Person (other than
Seller or P) pursuant to the provisions of section 168(f)(8) of the Internal
Revenue Code of 1954, as amended, and in effect immediately before the enactment
of the Tax Reform Act of 1986.
(e) No Liens for Taxes exist with respect to any of the Transferred
Assets, except for Permitted Liens.
(f) No claim has been made by an authority in a jurisdiction where
Seller or Primestar or any member of the Seller Affiliated Group does not file
Tax returns that they are or may be subject to taxation by that jurisdiction.
(g) Seller, Primestar and each member of the Seller Affiliated Group
has withheld all Taxes required to have been withheld under all applicable
statutes and regulations in connection with amounts paid or owing to any
employee, independent contractor, creditor, stockholder, or other third party,
and such withholdings have either been paid to the appropriate governmental
agencies as and when due in accordance with Law or set aside in accounts for
such purpose.
28
(h) No issues have been raised with a representative or employee of
Seller or Primestar or any of their respective Affiliates (and are currently
pending) by the Internal Revenue Service or any other taxing authority in
connection with any of the Tax returns referred to in Section 5.4(a) or
--------------
otherwise that could affect the Tax reporting in respect of the Transferred
Assets subsequent to the Initial Closing Date (with respect to the Ground
Satellite Assets) or the Subsequent Closing Date (with respect to all other
Transferred Assets).
Section 5.5 Intellectual Property. Seller owns or has the right to
---------------------
use pursuant to license, sublicense, agreement or permission all Intellectual
Property currently necessary for the use or operation of the Transferred Assets.
Seller has no Knowledge of any condition or event that would prevent Buyer from
obtaining in a timely manner all Intellectual Property necessary to use or
operate any of the Transferred Assets.
Section 5.6 Ownership of Rights and Assets Conveyed.
---------------------------------------
(a) Primestar has not exercised the Option and will not exercise the
Option prior to the Subsequent Closing Date. Neither Primestar nor any Affiliate
of Primestar has any right to acquire any of the Transferred Assets, other than
the right to exercise or transfer the Option and Primestar's rights under the
TSAT Merger Agreement. Primestar has good and valid title to the Option, free
and clear of all Liens.
(b) Seller has good and valid title to all of the Transferred Assets
(other than the Option) to be transferred by it hereunder, free and clear of all
Liens, except for Permitted Liens and those other Liens set forth on Schedule
--------
5.6(b), all of which will be discharged on the applicable Closing Date.
------
(c) The delivery to Buyer of the bills of sale and other instruments
of assignment, conveyance and transfer pursuant to this Agreement will transfer
to Buyer good and valid title to the Transferred Assets, free and clear of all
Liens, except for Permitted Liens.
Section 5.7 Assigned Contracts.
------------------
(a) Schedule 5.7 sets forth in reasonable detail all of the Assigned
------------
Contracts. Seller has made available to Buyer and within five days after
Buyer's request will deliver to Buyer a true, correct and complete copy of each
Assigned Contract, as amended to date, and true, correct and complete
29
copies of all material correspondence with respect to the other parties to each
Assigned Contract, the deliverables thereunder (including the construction,
launch, operation or insurance of the satellites) and the transactions
contemplated thereby, including all such correspondence with Loral.
(b) Except as set forth on Schedule 5.7, Seller has complied with and
------------
performed in all material respects all of its obligations required to be
performed prior to the date hereof under each of the Assigned Contracts to which
it is a party and each of Seller and Primestar will comply with and perform in
all material respects all of its obligations required to be performed prior to
the applicable Closing Date hereof under each of the Assigned Contracts (except
as provided in Section 2.3(a) and Section 2.3(b).
-------------- --------------
(c) With respect to each Assigned Contract: (i) the arrangement or
agreement is a legal, valid and binding obligation of Seller or Primestar, as
the case may be, and, to the Knowledge of Seller and Primestar, each of the
other parties thereto, enforceable against such parties in accordance with the
terms thereof, and is in full force and effect; (ii) the transfer of such
Assigned Contract to Buyer or Newco pursuant to this Agreement will not cause
such Assigned Contract to fail to be legal, valid, binding and enforceable and
in full force and effect on identical terms immediately following the applicable
Closing; (iii) except as set forth on Schedule 5.7, neither Seller nor Primestar
------------
is in breach or default under any Assigned Contract to which it is a party, and
no event has occurred which, with notice or lapse of time, or both, would
constitute a breach or default by Seller, or permit termination, modification or
acceleration under the arrangement or agreement; (iv) to the Knowledge of
Seller, except as set forth on Schedule 5.7, no third party is in breach or
------------
default or failed to comply with or perform all of its obligations under any
Assigned Contract, and no event has occurred which, with notice or lapse of
time, or both, would constitute a breach or default by such party thereunder or
permit termination, modification or acceleration under the arrangement or
agreement; (v) except as set forth on Schedule 5.7, neither Seller nor Primestar
------------
has received written or oral notice canceling, terminating or repudiating or
exercising any option to cancel, terminate or repudiate under any of the
Assigned Contracts to which it is a party; (vi) neither Seller nor Primestar has
any Knowledge that the validity of any of the Assigned Contracts to which it is
a party is being contested by a third party; (vii) except as set forth on
Schedule 5.7, other than Consents previously received, each Assigned
30
Contract is assignable to Buyer or Newco without the Consent of, with or to any
Person.
(d) There are no claims for Damages made by any Specified Seller
Affiliates against Loral under the Loral Contract, other than the claim assigned
to Buyer pursuant to Section 2.2(b)(iii).
-------------------
Section 5.8 Litigation.
----------
(a) Except as set forth on Schedule 5.8(a), (i) there is not in
---------------
effect any judgment, ruling, order, writ, decree, stipulation or injunction by
or with any Governmental Entity to which Seller, Primestar or any of their
respective Affiliates is party or by which Seller, Primestar, any of their
respective Affiliates or any properties or assets of any of the foregoing is
bound, and which relates to or affects the Transferred Assets, the Assumed
Liabilities, this Agreement or the transactions contemplated hereby, and (ii)
none of Seller, Primestar or any of their respective Affiliates is party to,
engaged in or, to the Knowledge of Seller and Primestar, threatened with any
Action which relates to or affects the Transferred Assets, the Assumed
Liabilities, this Agreement or the transactions contemplated hereby, and, to the
Knowledge of Seller and Primestar, no event has occurred and no condition exists
which could reasonably be expected to result in any such Action.
(b) None of Seller, Primestar or any of their respective Affiliates
is in default under or with respect to any judgment, ruling, order, writ,
decree, stipulation or injunction of the type described in Section 5.8(a).
--------------
(c) None of the Actions set forth on Schedule 5.8(a) could reasonably
---------------
be expected to have a Transferred Asset Material Adverse Effect.
Section 5.9 Governmental Authorization. The execution and delivery
--------------------------
by Seller and Primestar of this Agreement and each instrument of transfer or
other document to be delivered pursuant to this Agreement, the consummation of
the transactions contemplated hereby and thereby, and the performance by Seller
and Primestar of their respective obligations to be performed hereunder, do not
require any Consent of, with or to any Governmental Entity, except (A) for (i)
compliance with any applicable requirements of the HSR Act and the rules and
regulations thereunder, and (ii) compliance with any applicable requirements of
the Regulatory Provisions; and (B) where the
31
failure to obtain or make such Consents would not prevent or delay in any
material respect the consummation of the transactions contemplated hereby or
thereby or otherwise prevent Seller or Primestar from performing its obligations
under this Agreement or any instrument of transfer or other document to be
delivered pursuant to this Agreement in accordance with the terms and subject to
the conditions hereof and thereof, and would not, individually or in the
aggregate, have a Transferred Asset Material Adverse Effect.
Section 5.10 Compliance With Applicable Law. Except as set forth on
------------------------------
Schedule 5.10, (i) each of Seller and Primestar has complied in all material
-------------
respects, and the Transferred Assets are in compliance, in all material
respects, with all Laws (including Environmental Laws), (ii) no claims or
complaints from any Governmental Entities or other Persons have been asserted or
received in writing by Seller, Primestar or their respective Affiliates during
the past three years, or by oral notice since April 1, 1998, related to or
affecting the Transferred Assets or the Assumed Liabilities and, to the best
Knowledge of Seller and Primestar, no claims or complaints are threatened,
alleging that Seller, Primestar or their respective Affiliates is in violation
of any Laws or Licenses applicable to the Transferred Assets or the Assumed
Liabilities, and (iii) none of Seller, Primestar or their respective Affiliates
has received notice from any Governmental Entity of any proceedings to take all
or any part of the Transferred Assets or other properties of Seller or Primestar
(whether leased or owned) related to or affecting the Transferred Assets or the
Assumed Liabilities by condemnation or right of eminent domain and, to the
Knowledge of Seller and Primestar, no such proceedings are threatened, except,
in each such case, for such noncompliance, claims, complaints or proceedings
which would not have, individually or in the aggregate, a Transferred Asset
Material Adverse Effect.
Section 5.11 FCC Matters.
-----------
(a) The FCC License is validly held by Seller. Seller has always
controlled the FCC License and the system authorized thereunder. Seller has
timely and completely performed all obligations required to date under the FCC
License and the Regulatory Provisions. Schedule 5.11(a) sets forth all material
----------------
filings, applications and other reports submitted in connection with the FCC
License. Except as set forth in Schedule 5.11(c), Seller has taken all actions
----------------
required of Seller to date to achieve international coordination of the
authorized system, including all actions required to date to achieve (a) all
32
necessary modifications to the International Telecommunication Union's Region 2
Broadcasting-Satellite Service Plan and associated feeder link plan set forth at
Appendices 30 and 30A to the International Radio Regulations and (b)
coordination of the DBS system's Telemetry, Tracking and Control functions.
Such DBS system has been designed and constructed to comply with, and is in
compliance with, all obligations required to date under the FCC License and the
applicable Regulatory Provisions, including the geographic service requirements
currently imposed on DBS providers.
(b) Except for the transactions contemplated hereby, no Person other
than Seller (and Primestar and PLP, with respect to capacity only) has any
right, title or interest in, or with respect to, the FCC License, and the rights
being transferred by Seller and Primestar hereunder with regard to the FCC
License, constitute all of the rights, including Contractual rights, held by
Seller and its Affiliates with regard to the FCC License.
(c) Seller has delivered to Buyer a true, correct and complete copy of
the FCC License. The FCC License is in full force and effect and is unimpaired
by any adverse condition, other than any condition on the face of the license.
Seller and Primestar have delivered to Buyer true, correct and complete copies
of all material correspondence from the FCC to Seller, and from Seller to the
FCC, relating to the FCC License. Except as set forth on Schedule 5.11(c), no
----------------
application or Action is pending for the renewal or modification of the FCC
License, and no application, complaint or Action is pending or, to the Knowledge
of Seller or Primestar, threatened, that may result in the revocation,
modification, non-renewal or suspension of the FCC License or the imposition of
any administrative or judicial sanction with respect to Seller. Neither Seller
nor Primestar has any Knowledge of any failure of Seller to comply (whether or
not known by or disclosed to the FCC or any other Person) in all material
respects with all Regulatory Provisions applicable to the Transferred Assets,
and with the terms and conditions of the FCC License, including any due
diligence obligations or reporting requirements associated with the FCC License.
(d) Except as contemplated by Section 8.3, no Consent of, with or to
-----------
the FCC is required under the applicable Regulatory Provisions to be obtained or
made by Seller or Primestar in connection with the transactions contemplated by
this Agreement, except such as may already have been obtained and made.
33
Section 5.12 Condition of Assets. (a) Each of Seller and Primestar
-------------------
has disclosed, and made available, to Buyer all of the material information
known by them with respect to the operation and condition of the Transferred
Assets. Schedule 5.12 sets forth a summary of such information in all material
-------------
respects.
(b) The Satellite Contracts include all of the Contracts, insurance
policies and arrangements necessary for the construction, launch or insurance of
the Ground Satellite and the In-Orbit Satellite.
Section 5.13 Absence of Material Adverse Effect and Certain Changes
------------------------------------------------------
or Events.
---------
Except as set forth on Schedule 5.13, no conditions exist which could
-------------
reasonably be expected to have, individually or in the aggregate, a Transferred
Asset Material Adverse Effect (after taking into account any insurance proceeds
actually received). Except as set forth on Schedule 5.13, since December 31,
-------------
1997 there have not been any events, occurrences, changes or developments which,
individually or in the aggregate, have had or could reasonably be expected to
have a Transferred Asset Material Adverse Effect.
Section 5.14 Insurance. Schedule 5.14 sets forth a complete list of
--------- -------------
insurance policies and surety bonds which Seller or Primestar maintains with
respect to the Transferred Assets or any satellite or other facility related to
the Transferred Assets. All such policies are in full force and effect and
shall remain in full force and effect through the applicable Closing Date; all
premiums with respect thereto covering all periods up to and including the date
hereof have been paid (and covering all periods up to and including the
applicable Closing Date will be paid prior to the applicable Closing Date); and
no notice of cancellation or termination has been received with respect to any
such policy. Except as set forth on Schedule 5.14, neither Seller nor Primestar
-------------
has been refused any insurance with respect to the Transferred Assets by any
insurance carrier to which either of them have applied for any such insurance or
with which either of them have carried insurance during the last three years.
Section 5.15 Restrictive Covenants. Except as set forth on Schedule
--------------------- --------
5.15, neither Seller nor any of its Affiliates is a party to or bound by any
----
covenant not to compete or restricting the development, manufacture, marketing,
sale or
34
distribution of, or other right with respect to, any products or
services related to the Transferred Assets.
Section 5.16 Brokers. Except for Xxxxxxx Xxxxx & Co., whose
-------
compensation shall be paid by Seller, Seller represents and warrants to Buyer
that neither it nor any of its Affiliates has authorized any Person to act as
broker, finder or in any other similar capacity in connection with the
transactions contemplated by this Agreement or the Medium Power Agreement and
the negotiations leading thereto which will have a right of payment from or
claim against Buyer or any of its Subsidiaries or Affiliates.
Section 5.17 Indebtedness. Seller is not liable for any indebtedness
------------
for borrowed money to any Person and is not subject to any Liability with
respect to any of its Affiliates other than the Reimbursement Obligation (which
Liability is being discharged pursuant to the terms hereof).
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF PLP AND THE STOCKHOLDERS
PLP represents and warrants to Buyer as follows:
Section 6.1 Organization. PLP is a limited partnership duly
------------
organized, validly existing and in good standing under the laws of the State of
Delaware.
Section 6.2 Authority. PLP has all requisite power and authority, to
---------
execute and deliver this Agreement and to perform all of its obligations
hereunder. PLP has all requisite power and authority, corporate or otherwise,
to execute and deliver each instrument of transfer and other document to be
delivered by it pursuant to this Agreement and to perform all of its obligations
hereunder and thereunder. The execution and delivery by PLP of this Agreement
and the performance by PLP of its obligations hereunder have been duly
authorized by all necessary and proper action on the part of PLP and its general
partners. This Agreement has been duly executed and delivered by PLP and
constitutes the legal, valid and binding obligation of it, enforceable against
it in accordance with its terms. Each instrument of transfer and other document
to be delivered by PLP pursuant to this Agreement will be duly executed and
delivered by it and, when so executed and delivered, will constitute the legal,
valid and binding obligation of it, enforceable against it in accordance with
its terms.
35
Section 6.3 Noncontravention. The execution and delivery by PLP of
----------------
this Agreement and each instrument of transfer and other document to be
delivered by it pursuant to this Agreement and the performance by PLP of its
obligations to be performed hereunder and the consummation of the transactions
contemplated hereby and thereby will not, (A) contravene or conflict with the
organizational documents of PLP or any of its Subsidiaries; (B) contravene or
conflict with or constitute a violation of any provision of any Law or License
(subject to compliance with the HSR Act and the rules and regulations
promulgated thereunder, and the Regulatory Provisions) to which PLP or any of
its properties or assets is subject; or (C) conflict with, result in a breach
of, constitute a default under, result in the acceleration of, cause PLP to make
an offer to purchase under, create in any party the right to accelerate,
terminate, modify or cancel, require any notice or give rise to a loss of any
benefit under, any of the Transferred Assets or any Contract, Lease, Lien or
other arrangement to which PLP is a party or by which it is bound or to which
any of the Transferred Assets is subject or result in the creation or imposition
of any Liens (other than Permitted Liens) on any of the Transferred Assets,
other than any loss of benefit, Lien or any other such event which would not
have a Transferred Asset Material Adverse Effect or adversely affect the ability
of PLP to consummate the transactions contemplated hereby or by any instrument
of transfer or other document to be delivered by them pursuant to this
Agreement.
Section 6.4 Capacity Option.
---------------
PLP has delivered to Buyer a true, correct and complete copy of the
agreement (the "Capacity Option Agreement") pursuant to which PLP has the been
granted the option (the "Capacity Option") to lease capacity from Seller on each
of the Satellites and true, correct and complete copies of all material
correspondence with respect to the Capacity Option Agreement. PLP agrees not to
exercise any of its rights under the Capacity Option Agreement prior to the
Subsequent Closing Date. PLP will relinquish any and all rights under the
Capacity Option effective upon the Subsequent Closing. PLP represents and
warrants that as a result of such relinquishment and after giving effect to the
assumption, payment and discharge in full of the Reimbursement Obligation at the
Initial Closing and the Subsequent Closing as provided in Section 3.1, it has no
-----------
right with respect to the Transferred Assets and no monies are owed to it by
Seller or Buyer.
36
Each Stockholder represents and warrants to Buyer as follows:
Section 6.5 Authority. Such Stockholder has all requisite power and
---------
authority to execute and deliver this Agreement and to perform all of such
Stockholder's obligations contemplated hereby. Such Stockholder has all
requisite power and authority, corporate or otherwise, to execute and deliver
each document to be delivered by it pursuant to this Agreement and to perform
its obligations hereunder and thereunder. The execution and delivery by such
Stockholder of this Agreement and the performance by such Stockholder of its
obligations hereunder have been duly authorized by all necessary and proper
action on the part of such Stockholder. This Agreement has been duly executed
and delivered by such Stockholder and constitutes the legal, valid and binding
obligation of such Stockholder, enforceable against such Stockholder in
accordance with its terms.
Section 6.6 Noncontravention. The execution and delivery by such
----------------
Stockholder of this Agreement and each other document to be delivered by it
pursuant to this Agreement and the performance by such Stockholder of its
obligations to be performed hereunder contemplated hereby and thereby will not,
(A) contravene or conflict with the organizational documents of such Stockholder
or any of its Subsidiaries; (B) contravene or conflict with or constitute a
violation of any provision of any Law or License (subject to compliance with the
HSR Act and the rules and regulations promulgated thereunder, and the Regulatory
Provisions) to which such Stockholder or any of its properties or assets is
subject; or (C) conflict with, result in a breach of, constitute a default
under, result in the acceleration of, cause such Stockholder to make an offer to
purchase under, create in any party the right to accelerate, terminate, modify
or cancel, require any notice or give rise to a loss of any benefit under, any
of the Transferred Assets or any Contract, Lease, Lien or other arrangement to
which such Stockholder is a party or by which it is bound or to which any of its
assets or properties are subject or result in the creation or imposition of any
Liens (other than Permitted Liens) on any of the assets or properties of such
Stockholder, other than any loss of benefit, Lien or any other such event which
would not have a material adverse effect on such Stockholder or adversely affect
the ability of such Stockholder to consummate the transactions contemplated
hereby or by any other document to be delivered by it pursuant to this
Agreement.
37
ARTICLE VII
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller as follows:
Section 7.1 Organization and Standing. Buyer is a corporation duly
-------------------------
organized, validly existing and in good standing under the laws of the State of
Delaware.
Section 7.2 Authority. Buyer has all requisite power and authority,
---------
corporate or otherwise, to execute and deliver this Agreement and to perform all
of its obligations contemplated hereby. Buyer has all requisite power and
authority, corporate or otherwise, to execute and deliver each instrument of
transfer and other document to be delivered by it pursuant to this Agreement and
to perform all of its obligations hereunder and thereunder. Other than the
consent of the Board of Directors of GM, the execution and delivery by Buyer of
this Agreement and the performance by Buyer of its obligations hereunder have
been duly authorized by all necessary and proper corporate action. Buyer hereby
agrees that it will recommend approval of this Agreement and the transactions
contemplated hereby to the Board of Directors of GM. Except as contemplated in
this Section 7.2, no consent of the stockholder of Buyer is required in
-----------
connection with the execution and delivery by Buyer of this Agreement and the
performance of all of its obligations hereunder. This Agreement has been duly
executed and delivered by Buyer and constitutes the legal, valid and binding
obligation of Buyer, enforceable against it in accordance with its terms. Each
instrument of transfer and other document to be delivered by Buyer pursuant to
this Agreement will be duly executed and delivered by Buyer and, when so
executed and delivered, will constitute the legal, valid and binding obligation
of Buyer, enforceable against Buyer in accordance with its terms.
Section 7.3 Noncontravention. The execution and delivery by Buyer of
----------------
this Agreement and each instrument of transfer and other document to be
delivered by Buyer pursuant to this Agreement, the performance by Buyer of its
obligations to be performed hereunder and the consummation of the transactions
contemplated hereby and thereby will not, (A) contravene or conflict with the
certificate of incorporation, by-laws or other organizational documents of Buyer
or any of its Subsidiaries; (B) contravene or conflict with or constitute a
violation of any provision of any Law or License (subject to compliance with the
HSR Act and the rules and regulations promulgated thereunder, and
38
the Regulatory Provisions) to which Buyer or any of its properties or assets is
subject; or (C) conflict with, result in a breach of, constitute a default
under, result in the acceleration of, cause Buyer to make an offer to purchase
under, create in any party the right to accelerate, terminate, modify or cancel,
require any notice or give rise to a loss of any benefit under, any Contract,
Lease, Lien or other arrangement to which Buyer is a party or by which it is
bound or to which any of its properties or assets is subject or result in the
creation or imposition of any Liens (other than Permitted Liens) on any assets
of Buyer, other than any loss of benefit, Lien or any other such event which
would not have a Buyer Material Adverse Effect or adversely affect the ability
of Buyer to consummate the transactions contemplated hereby or by any instrument
of transfer or other document to be delivered by it pursuant to this Agreement.
Section 7.4 Governmental Authorization. The execution and delivery
--------------------------
by Buyer of this Agreement and each instrument of transfer or other document to
be delivered pursuant to this Agreement, the consummation of the transactions
contemplated hereby and thereby and the performance by Buyer of its obligations
to be performed hereunder, do not require any Consent of, with or to any
Governmental Entity, except (A) for (i) compliance with any applicable
requirements of the HSR Act and the rules and regulations thereunder, and (ii)
compliance with any applicable requirements of the Regulatory Provisions; and
(B) where the failure to obtain or make such Consents would not prevent or delay
in any material respect the consummation of the transactions contemplated hereby
or thereby or otherwise prevent Buyer from performing its obligations under this
Agreement or any instrument of transfer or other document to be delivered
pursuant to this Agreement in accordance with the terms and subject to the
conditions hereof and thereof, and would not, individually or in the aggregate,
have a Buyer Material Adverse Effect.
Section 7.5 Litigation. There is not in effect any judgment, ruling,
----------
order, writ, decree, stipulation or injunction by or with any Governmental
Entity to which Buyer or any of its Affiliates is party or by which Buyer or any
of its Affiliates or any properties or assets of any of the foregoing is bound,
and which relates to or affects the Transferred Assets, the Assumed Liabilities,
this Agreement or the transactions contemplated hereby, and (ii) none of Buyer
or any of its Affiliates is party to, engaged in or, to the Knowledge of Buyer,
threatened with any Action which relates to or affects the Transferred Assets,
the
39
Assumed Liabilities, this Agreement or the transactions contemplated hereby,
and, to the Knowledge of Buyer, no event has occurred and no condition exists
which could reasonably be expected to result in any such Action.
Section 7.6 Brokers. Except for Xxxxxxx, Sachs & Co., whose
-------
compensation shall be paid by Buyer, Buyer represents and warrants to Seller
that it has not authorized any Person to act as broker, finder or in any other
similar capacity in connection with the transactions contemplated by this
Agreement or the Medium Power Agreement and the negotiations leading thereto
which will have a right of payment from or claim against Seller or any of its
Subsidiaries or Affiliates.
ARTICLE VIII
COVENANTS
Section 8.1 Covenants.
---------
(a) Operation of Business.
---------------------
(i) During the period between the date hereof and the Initial Closing
Date, in the case of the Ground Satellite Assets, and the Subsequent Closing
Date, in the case of the In-Orbit Satellite Assets, (A) each of Seller and
Primestar shall use commercially reasonable efforts (1) to preserve the value
and utility of the Transferred Assets, (2) to preserve the goodwill of its
suppliers and others having business relations with Seller or Primestar with
respect to any Transferred Assets and (3) to perform and observe all the terms,
covenants and conditions required to be performed and observed by either of them
under the Assigned Contracts, as applicable, and all FCC and other Licenses with
respect to the Transferred Assets; (B) neither Seller nor Primestar shall agree
to materially modify the deliverables pursuant to, or waive the performance of
any material obligation under, any of the Assigned Contracts without the consent
of Buyer, which consent shall not be unreasonably withheld; and (C) Seller and
Primestar shall take all actions commercially reasonably necessary to keep the
FCC License in full force and effect until the Subsequent Closing Date.
(ii) If it comes to the attention of Seller or Primestar that any
events or circumstances regarding the Transferred Assets require the taking of
any action to preserve the value and utility of the Transferred Assets, Seller
or
40
Primestar will (A) promptly notify Buyer of such events or circumstances and of
any potential responses to such events and circumstances of which Seller or
Primestar is aware and (B) take such actions as shall be requested by Buyer and
reasonably required to preserve such value and utility.
(b) Satellites.
----------
(i) From the date of this Agreement until the Initial Closing
Date, in the case of the Ground Satellite and, the Subsequent Closing Date, in
the case of the In-Orbit Satellite, Seller agrees to continue to perform its
obligations under the Satellite Contracts.
(ii) Seller shall cause to be issued prior to the Initial Closing
Date, the insurance with respect to the In-Orbit Satellite which insurance was
in effect on October 1, 1998 as described on Schedule 2.2(b)(iii); provided,
-------------------- --------
that in no event shall such insurance provide for exclusion of coverage with
respect to failures similar to those previously experienced.
(c) Insurance. Seller and Primestar will maintain the payment of all
---------
premiums on any insurance policies and surety bonds maintained with respect to
the Transferred Assets up to and including the Subsequent Closing Date.
(d) Loral Contract. (i) The parties hereto agree that all rights
--------------
under the Loral Contract for Damages or insurance proceeds relating to claims
made by Seller prior to the date hereof, a summary of which is set forth in
Schedule 2.2(b)(iii), and any claims made by Buyer after the Subsequent Closing
--------------------
Date, in connection with the In-Orbit Satellite and all proceeds received in
connection with the foregoing are considered Transferred Assets.
(ii) Buyer shall have the exclusive right to control all aspects of
such claims, including the prosecution and settlement of such claims; provided,
--------
that Buyer shall not, without Seller's prior consent (which consent shall not be
unreasonably withheld), settle, compromise or discharge (including consenting to
the entry of any judgment) any such claim prior to the Subsequent Closing Date
and, provided, further, that Seller and Primestar agree to cooperate with Buyer
-------- -------
prior to the Subsequent Closing Date in connection with Buyer's prosecution and
settlement of such claim. Seller shall not pursue further any claims under the
Loral Contract unless requested to do so by Buyer prior to the Subsequent
Closing Date
41
nor enter into any amendment or modification to the Loral Contract without the
prior written consent of Buyer.
(e) Books and Records. Neither Seller nor Primestar will dispose of
-----------------
or destroy any business records or files related to the Business or any Former
Business which do not constitute Transferred Assets for the greater of (x)
twelve years after the applicable Closing Date or (y) any applicable statutory
or retention period (including any extension thereof). Prior to disposing of or
destroying any such business records or files in accordance with the preceding
sentence, Seller or Primestar will provide not less than 30 days' prior written
notice to Buyer, specifying the business records and files proposed to be
disposed of or destroyed. If, prior to the scheduled date for such disposal or
destruction, Buyer requests in writing that any of the business records or files
proposed to be disposed of or destroyed be delivered to Buyer, Seller or
Primestar will arrange promptly, after receipt of an appropriate confidentiality
agreement executed by Buyer, for the delivery of the requested business records
and files to a location specified by, and at the expense of, Buyer.
(f) Power of Attorney with Respect to Assets. On the applicable
----------------------------------------
Closing Date, each of Seller, Primestar and PLP (at its sole cost and expense)
will constitute and appoint Buyer its true and lawful attorney, with full power
of substitution, in its name and on its behalf but for the benefit of Buyer, to
institute and prosecute all proceedings that Buyer may deem proper in order to
collect, assert or enforce any claim, right or title of any kind in or to the
Transferred Assets or the Assumed Liabilities, or to defend or compromise any
Action in respect of any of such Transferred Assets or Assumed Liabilities, and
to take all such action in relation thereto as Buyer shall deem advisable. Each
such party acknowledges that such powers will be coupled with an interest and
will not be revocable by either of them for any reason. Buyer will retain for
its own account any amount collected as a result of any action taken pursuant to
the foregoing powers.
(g) No Solicitation. Except for the transactions contemplated by this
---------------
Agreement until the Subsequent Closing Date, Seller and its Affiliates shall
not, nor shall Seller authorize or permit any officer, director or employee of,
or any investment banker, attorney, accountant, or other representative retained
by, Seller or such Affiliates to, directly or indirectly, solicit, initiate,
encourage or entertain (including by way of furnishing information) discussions,
inquiries, offers or
42
proposals or participate in any discussions or negotiations for the purpose or
with the intention of leading to any proposal or offer from any Person which
constitutes or concerns, or may reasonably be expected to lead to, any proposal
for a transaction involving any proposal or offer to acquire any portion of the
Transferred Assets. Seller shall promptly (and in any event within two Business
Days) notify Buyer in writing of any inquiry it receives from any Person (and
shall set forth in such notice the identity of such Person) with respect to the
subject matter of the first sentence of this Section 8.1(g). Seller will
--------------
immediately cease and cause to be terminated any existing activities,
discussions or negotiations with any Person conducted heretofore with respect to
any of the foregoing. Seller will (x) promptly request all Persons who
heretofore have executed a confidentiality agreement in connection with such
Persons' consideration of acquiring the Transferred Assets to return or destroy
all confidential information heretofore furnished to such Persons by or on
behalf of Seller and (y) enforce all obligations under such confidentiality
agreements. At the Subsequent Closing, Seller will assign to Buyer all their
rights under all confidentiality agreements relating to the sale of or other
transactions involving the Transferred Assets. Upon the Subsequent Closing, the
Confidentiality Agreement will be terminated.
(h) Representations and Warranties. Seller will not nor will it
------------------------------
permit any of its Affiliates to take or agree or commit to take any action on or
prior to the Subsequent Closing Date that could reasonably be expected to result
in any of its representations or warranties hereunder being untrue.
Section 8.2 Advice of Changes. Seller, Primestar and PLP, on the one
-----------------
hand, and Buyer, on the other hand, will each give prompt notice to the other
upon becoming aware of (i) the occurrence, or failure to occur, of any event
which would be likely to cause any representation or warranty of such party
contained in this Agreement to be untrue or inaccurate and (ii) any failure on
its part to comply with or satisfy any covenant, condition or agreement to be
complied with or satisfied by it under this Agreement on or prior to the
applicable Closing Date. The notifying party will use its commercially
reasonable efforts to prevent or promptly remedy any matter which is or would be
the subject of any such notice. No notice pursuant to this Section 8.2 will
-----------
affect any representations or warranties, covenants, agreements, obligations or
conditions set forth herein.
43
Section 8.3 Notices and Consents. Buyer shall give all required
--------------------
notices to third parties, and shall use its commercially reasonable efforts to
obtain any material third-party Consents that may be required, in connection
with the transactions contemplated by this Agreement. Seller shall give all
required notices to third parties, and shall use its commercially reasonable
efforts to obtain all required Consents, including all Consents required by
counterparties to the Ground Satellite Contracts and the In-Orbit Satellite
Contracts, all required Consents of Governmental Entities and bondholders or
lenders of Seller or any of its Affiliates, and any other material third-party
Consents that may be required or that Buyer reasonably may request, in
connection with the transactions contemplated by this Agreement. Within five
Business Days following the date of this Agreement (but in no event prior to
approval of the Board of Directors of GM) Buyer and Seller hereto shall file any
Notification and Report Forms and related materials that it may be required to
file with the Federal Trade Commission ("FTC") and the Antitrust Division of the
United States Department of Justice (the "Antitrust Division") under the HSR
Act, and shall make any further filings pursuant thereto that may be necessary,
proper or advisable. Within five calendar days following the date of this
Agreement, Buyer and Seller shall make all notifications and file all
applications and related materials that it may be required to file with the FCC
or any other Governmental Entity having authority with respect to Licenses for
the use of orbital slots or the provision of communications services or other
communications Licenses in connection with the transactions contemplated hereby,
and, subject to Section 8.4 below, shall use commercially reasonable efforts to
-----------
obtain at the earliest practicable date all necessary Consents, including a
Final Order, for assignment of the FCC License. At the time that the parties
file an application with the FCC to obtain the FCC Consent and Final Order,
Primestar and TSAT shall submit a letter request to the FCC to withdraw any
pending request to transfer control of the FCC License, which request may be
made contingent upon giving of the FCC Consent. As promptly as is practicable
after the date of this Agreement, each of Buyer and Seller shall take any
additional action (including the implementation of an Acceptable Alternative
Arrangement (to the extent subject to action by the FCC) and submit any
additional filings, submissions or applications required by the FCC, the FTC and
the Antitrust Division, that may be necessary, proper or advisable to effect to
the fullest extent feasible the consummation of the transactions contemplated by
this Agreement) in connection with any other Consents of, to or with any
Governmental Entities and third parties that it may be required to give, make or
obtain and shall
44
refrain from taking any action the purpose or effect of which could reasonably
be expected to make it less likely that such Consents will be given, made or
obtained on the terms provided for in this Agreement. Without limiting the
generality of the foregoing, each of Buyer and Seller shall: (i) cooperate in
all respects with each other in connection with any filing, submission,
adversarial proceeding or the timing thereof; (ii) in connection with any
investigation or other inquiry, including any proceeding initiated by a private
party, keep the other parties hereto informed on a timely basis of any material
communication received by such party from, or given by such party to, the FTC,
the Antitrust Division, the FCC or any other Governmental Entity and of any
material communication received or given in connection with any Action by a
private party, in each case regarding any of the transactions contemplated by
this Agreement, and permit any other party hereto to preview any material
communication given by or to it; and (iii) consult with each other, in advance
of any meeting or conference with such Governmental Entities or, in connection
with any Action by a private party. Each of Buyer and Seller will use its
commercially reasonable efforts to obtain such approvals as promptly as possible
and, in this regard, provide all information reasonably requested, assist and
cooperate with one another to make the necessary filings and take such steps as
may be necessary to secure the non-objection of the relevant antitrust and
regulatory authorities, including a Final Order for assignment of the FCC
License.
Section 8.4 Assignment of the FCC License. In accordance with
-----------------------------
Section 8.3, upon execution of this Agreement, Seller shall seek a Final Order
-----------
of the assignment of the FCC License to Buyer or Newco. Each of Buyer, Seller,
Primestar and PLP shall take all commercially reasonable steps necessary, and
shall supply to the other such parties and/or to the FCC all information
reasonably necessary, to obtain such Final Order, and shall use its commercially
reasonable efforts, including the implementation of an Acceptable Alternative
Arrangement, to effect to the fullest extent feasible the consummation of the
transactions contemplated in this Agreement. The parties shall also cooperate
with respect to any required submission to the FCC and/or the International
Telecommunication Union, including any submission required to allow use of the
101 and 119 West Longitude orbital locations in conjunction with a single
consumer satellite receive antenna. Notwithstanding the foregoing, nothing
contained in this Agreement shall create any obligation on the part of Buyer to
accept (as a condition to receipt of such Final Order or otherwise): (i) any
restriction on the right of Buyer to operate pursuant to the FCC License held by
Buyer with
45
respect to frequencies at any orbital location, including the right to use all
assigned frequencies authorized thereunder to provide high-powered DBS services,
other than any such restrictions generally imposed on operators of high powered
DBS services by applicable Regulatory Provisions, and restrictions of the types
generally and customarily imposed by the FCC on operators of high powered DBS
services, and such other restrictions, which, individually, or in the aggregate,
do not have a Transferred Asset Material Adverse Effect or a Buyer Material
Adverse Effect; (ii) any change in the management or ownership (other than as
contemplated hereunder) of Buyer, or in any voting or other rights of any
shareholder of Buyer or its Affiliates; or (iii) a requirement that Buyer
dispose of all or any part of the frequencies at any orbital location
owned by Buyer, (each of the conditions contained in the foregoing Sections
--------
8.4(i), (ii) and (iii), which Buyer is under no obligation to accept, are
----------------------
referred to herein as a "Material Condition"). Subject to Section 11.1(c), each
---------------
of the parties hereto agrees that if the FCC Consent has not been obtained on or
before September 30, 1999, each party will use its commercially reasonable
efforts to negotiate and enter into a mutually acceptable Acceptable Alternative
Arrangement prior to December 31, 1999. If an Acceptable Alternative Arrangement
is not entered into on or before December 31, 1999, either party may terminate
this Agreement on or after such date. If an Acceptable Alternative Arrangement
is entered into on or prior to December 31, 1999, each of the parties hereto
shall continue to use their commercially reasonable efforts to obtain the FCC
Consent.
If an Acceptable Alternative Arrangement is entered into, upon receipt
of the FCC Consent, Seller shall immediately assign the FCC License to Buyer or
Newco and such Acceptable Alternative Arrangement shall be cancelled
concurrently with such transfer. Thereafter, at the closing of the transactions
contemplated hereby and thereby, the Purchase Price will be paid by Buyer to
Seller, after giving effect to any reductions in the amount thereof for all
payments made to Seller under such Acceptable Alternative Arrangement.
If an Acceptable Alternative Arrangement is entered into on or prior
to the termination hereof, the provisions of this Agreement shall continue to be
in full force and effect, subject to any modifications of the terms hereof in
connection with the Acceptable Alternative Arrangement, including a date certain
upon which the Acceptable Alternative Arrangement shall terminate upon which
this Agreement may be terminated by either party.
46
Notwithstanding the foregoing, Seller shall continue to perform all of
its material obligations under the FCC License until the earlier of the
Subsequent Closing Date or the date of termination of this Agreement, and shall
use commercially reasonable efforts to continue to remain in "due diligence" in
accordance with the construction and operation of the DBS system (as the term is
used in the FCC's rules and as defined in this Regulatory Provisions), and to
hold a valid authorization for its DBS system, until the earlier of the
Subsequent Closing Date or the date of termination of this Agreement.
Section 8.5 Public Announcements. No press release or announcement
--------------------
concerning the transactions contemplated hereby will be issued by any party
hereto without the prior consent of the other parties hereto, except as such
release or announcement may be required by Law in which case the party required
to make the release or announcement will allow the other party reasonable time
to comment on such release or announcement in advance of such issuance.
Section 8.6 Access to Information. From the date of this Agreement
---------------------
through the Subsequent Closing Date, each of Seller and Primestar shall afford
to Buyer and its representatives free and full access at all reasonable times to
the properties, personnel, books and records relating to the Transferred Assets
and the Assumed Liabilities (such access not to unreasonably interfere with the
business of Seller or Primestar) in order that the Buyer and its representatives
may have full opportunity to make such investigations as they may reasonably
desire to make of all matters relating to the transactions contemplated
hereunder. Any proprietary information provided pursuant to this Section 8.6
-----------
shall be kept confidential by Buyer and shall not be revealed to any Person
other than the respective officers, directors, employees, agents and
representatives of such parties (it being agreed that Buyer shall be liable for
any breach of this Section 8.6 by any of its officers, directors, employees,
-----------
agents and representatives), except to the extent such information (i) is or
becomes generally available to the public (other than as a result of a breach of
this Section 8.6 by Buyer), (ii) was previously known by Buyer, (iii) hereafter
-----------
is disclosed to Buyer without restrictions on its use by a Person who, to the
Knowledge of Buyer, is not bound by an agreement of confidentiality with Seller
with respect thereto; or (iv) is required to be disclosed under any applicable
Law or under subpoena or other legal process. No such investigation shall
diminish in any respect any of the representations or warranties of Seller or
Primestar or Buyer's rights in respect of
47
any inaccuracy or breach thereof. The parties hereto shall be entitled to seek
injunctive relief or such other remedy as may be available at law or in equity
for any breach by another party of this Section.
Section 8.7 Tax Matters. Seller, Primestar and Buyer shall cooperate
-----------
fully with each other and make available or cause to be made available to each
other in a timely fashion such Tax data, prior Tax returns and filings and other
information as may be reasonably required for the preparation by Buyer,
Primestar or Seller of any Tax returns, elections, consents or certificates
required to be prepared and filed by Buyer, Primestar or Seller and any audit or
other examination by any taxing authority, or judicial or administrative
proceeding relating to liability for Taxes in connection with the transactions
contemplated hereby. Buyer, Primestar and Seller will each retain and provide to
the other party all records and other information which may be relevant to any
such Tax return, audit or examination, proceeding or determination, and will
each provide the other party with any final determination of any such audit or
examination, proceeding or determination that affects any amount required to be
shown on any Tax return of the other party for any period. Without limiting the
generality of the foregoing, each of Buyer, Primestar and Seller will retain
copies of all Tax returns, supporting work schedules and other records relating
to Tax periods or portions thereof ending prior to or on the Closing Date. To
the extent that Buyer incurs additional out-of-pocket expenses in order to
deliver Tax return information to Seller or Primestar, Seller or Primestar shall
reimburse Buyer for the amount of all additional expenses.
Section 8.8 Commercially Reasonable Efforts; Further Assurances.
---------------------------------------------------
(a) Each of Buyer and Seller will use its commercially reasonable
efforts to cause to be fulfilled the conditions to the respective obligations of
the other party set forth in Articles IX and X.
(b) From time to time, as and when requested by either party hereto,
the other party will execute and deliver, or cause to be executed and delivered,
all such documents and instruments and will take, or cause to be taken, all such
reasonable actions, as such other party may reasonably deem necessary or
desirable to consummate the transactions contemplated by this Agreement,
including the orderly transfer and transition of the Transferred Assets to Buyer
or Newco, as the case may be, and any other
48
assets Related to the Business, including the books and records thereof. None of
the parties hereto shall take any action or fail to take any action which would
reasonably be expected to frustrate the intent and purposes of this Agreement or
the transactions contemplated hereby.
(c) Anything contained in this Agreement to the contrary
notwithstanding, none of the parties hereto will nor will any Affiliate thereof
be required to commence litigation, divest or hold separate any business or
assets, or agree to any limitation on such party's or Affiliate's ability to
control in any respect its business or operations in connection with the
consummation of the transactions contemplated by this Agreement.
Section 8.9 Insurance.
---------
(a) Rights in Insurance Policies. Buyer will have the exclusive right
----------------------------
to (i) assert claims (and Seller will use commercially reasonable efforts to
assist Buyer in asserting claims) with respect to the Transferred Assets under
insurance policies of Seller, Primestar, any Seller Specified Affiliates or
their respective Subsidiaries which are "occurrence basis" policies ("Occurrence
Basis Policies") arising out of insured incidents occurring from the date
coverage thereunder first commenced until the Subsequent Closing Date to the
extent that the terms and conditions of any such Occurrence Basis Policies so
allow and (ii) continue to prosecute claims with respect to the Transferred
Assets properly asserted with the insurance carrier prior to the Subsequent
Closing Date (and Seller and Primestar will use their commercially reasonable
efforts to assist Buyer in connection therewith) under insurance policies of
Seller or Primestar which are on a "claims made" basis ("Claims Made Policies")
arising out of insured incidents occurring from the date coverage thereunder
first commenced until the Subsequent Closing Date to the extent that the terms
and conditions of any such Claims Made Policies so allow, provided that all of
Seller's or Primestar's reasonable costs and expenses incurred in connection
with the foregoing are advanced by Buyer. All recoveries in respect of such
claims shall be for the account of Buyer. In addition, Buyer may purchase (at
Buyer's expense), prior to, on or after the Subsequent Closing Date, discovery
coverage with respect to Claims Made Policies to provide coverage with respect
to such Claims Made Policies for claims submitted by Buyer after the Subsequent
Closing Date with respect to incidents occurring prior to the Subsequent Closing
Date, and all recoveries under such discovery coverage will be for the account
of Buyer.
49
(b) Actions of Seller and Primestar. Neither Seller nor Primestar
-------------------------------
will amend, commute, terminate, buy-out, extinguish liability under or otherwise
modify any Occurrence Basis Policies or Claims Made Policies under which Buyer
has rights to assert claims pursuant to Section 8.9(a) in a manner that would
--------------
adversely affect any such rights of Buyer. In the event Buyer consents to any
such action, Seller and Primestar will pay to Buyer their respective equitable
share (based on the amount of premiums paid by or allocated to the Transferred
Assets in respect of the applicable policy) of any proceeds received by Buyer as
a result of such action (after deducting Seller's and Primestar's reasonable
costs and expenses incurred in connection with such action).
Section 8.10 Bulk Transfer Laws. Seller shall comply with the
------------------
provisions of any bulk transfer and similar laws which may be applicable to the
transactions contemplated by this Agreement.
Section 8.11 Amendment of Certain Agreements. Seller agrees to use
-------------------------------
all commercially reasonable efforts to amend the Tempo Agreement to provide for
the Option to be exercisable in part so as to allow Buyer to exercise the Option
on the Initial Closing Date with respect to the Ground Satellite Assets and on
the Subsequent Closing Date with respect to the In-Orbit Satellite Assets.
ARTICLE IX
CONDITIONS TO TRANSFER OF GROUND SATELLITE ASSETS
Section 9.1 Conditions to Each Party's Obligations. The respective
--------------------------------------
obligations of each party to effect the transfer of the Ground Satellite Assets,
the Option and the rights under the Option as contemplated in Section 2.2(a) are
--------------
subject to the satisfaction or waiver on or prior to the Initial Closing Date of
each of the following conditions:
(a) Regulatory Approvals. All applicable waiting periods (and any
--------------------
extensions thereof) under the HSR Act shall have expired or otherwise been
terminated.
(b) No Injunctions or Restraints. No Law issued by any Governmental
----------------------------
Entity or prohibition preventing the
50
consummation of the transactions contemplated by this Agreement shall be in
effect.
The parties hereto expressly acknowledge that the consummation of the
transactions contemplated by the Medium Power Agreement is not a condition to
the consummation of the transactions contemplated hereby.
Section 9.2 Conditions to Obligations of Buyer. The obligations of
----------------------------------
Buyer to effect the transfer of the Ground Satellite Assets and the Option as
contemplated by Section 2.2(a) are subject to the satisfaction or waiver by
--------------
Buyer on or prior to the Initial Closing Date of each of the following
conditions:
(a) Representations and Warranties. The representations and
------------------------------
warranties of Seller, Primestar and PLP set forth in this Agreement (x) that are
qualified as to materiality shall be true and correct in all respects and (y)
that are not so qualified shall be true and correct in all material respects, in
each case as of the date of this Agreement and as of the Initial Closing Date as
though made on and as of the Initial Closing Date, and each of Seller, Primestar
and PLP shall have delivered to Buyer a certificate signed by one of its
executive officers confirming the foregoing as of the Initial Closing Date;
provided, however, that the certification made with respect to the
-------- -------
representations and warranties contained in Sections 5.8(a) and 5.10(i) shall be
---------------------------
satisfied if, as of the Initial Closing Date, such representation or warranty
shall not have become inaccurate in a manner that would reasonably be likely to
result in a material diminution in the value of the Transferred Assets or the
benefits expected to be derived by Buyer as a result of the transactions
contemplated hereby or which otherwise would reasonably be likely to have a
Transferred Asset Material Adverse Effect.
(b) Performance of Obligations of Seller, Primestar and PLP. Each and
-------------------------------------------------------
all of the covenants and agreements of Seller, Primestar and PLP to be performed
or complied with pursuant to this Agreement on or prior to the Initial Closing
Date shall have been fully performed and complied with in all material respects,
and each of Seller, Primestar and PLP shall have delivered to Buyer a
certificate signed by one of its executive officers confirming the foregoing as
of the Initial Closing Date.
(c) Litigation, Etc. There shall not exist or have been instituted or
---------------
be pending any Action (i) which could reasonably be expected to make illegal, or
to materially delay or
51
otherwise directly or indirectly materially restrain or prohibit the
consummation of the transactions contemplated by this Agreement, or which could
reasonably be expected to result in material Damages in connection with the
transactions contemplated by this Agreement, (ii) which could reasonably be
expected to result in (x) the prohibition of ownership or the operation by Buyer
of any portion of the Transferred Assets or (y) the Buyer being compelled to
dispose of or to hold separately any portion of the business or assets of Buyer
or its Affiliates or Subsidiaries as a result of the transactions contemplated
by this Agreement, (iii) which could reasonably be expected to result in any
material diminution in the benefits expected to be derived by Buyer as a result
of the transactions contemplated by this Agreement or (iv) which otherwise has
had or could reasonably be expected to have a Transferred Asset Material Adverse
Effect or a material adverse effect on the ability of Buyer to consummate the
transactions contemplated hereby.
(d) Laws, Etc. On or after the date of this Agreement, there shall
---------
not exist or have been enacted, entered, enforced, promulgated or deemed
applicable to the transactions contemplated by this Agreement, any Law or any
other action taken by any Governmental Entity that has resulted, or could
reasonably be expected to result, directly or indirectly, in any of the
consequences referred to in clauses (i) through (iv) of Section 9.2(c).
--------------
(e) No Material Adverse Change. There shall not have occurred (or
--------------------------
reasonably be expected to occur) any event, change or development which has had
or could reasonably be expected to have a Transferred Asset Material Adverse
Effect or a material adverse effect on the ability of Buyer to consummate the
transactions contemplated hereby.
(f) Consents. All material Consents of all Persons (including
--------
Governmental Entities) required to be obtained prior to the Initial Closing Date
in connection with the execution, delivery and performance of this Agreement by
Seller, Primestar, PLP and Buyer, shall have been obtained and shall be in full
force and effect.
(g) Opinion of Counsel. Buyer shall have received the opinions of
------------------
Xxxxx & Xxxxx L.L.P., counsel to Seller and the General Counsel of Seller, in
each case in a form reasonably agreeable to Buyer and Seller.
52
(h) Amendment of Certain Agreements. (i) The amendment to the Tempo
-------------------------------
Agreement providing for the Option to be exercisable in part so as to allow
Buyer to exercise the Option on the Initial Closing Date with respect to the
Ground Satellite Assets and on the Subsequent Closing Date with respect to the
In-Orbit Satellite Assets shall have been duly executed and delivered.
(ii) The TSAT Merger Agreement shall have been terminated in
accordance with its terms and no party thereto shall have any Liability to any
other party hereto as a result of such termination.
(i) Termination of Capacity Option Agreement. Those portions of the
----------------------------------------
Capacity Option Agreement relating to the Ground Satellite shall have been
terminated in accordance with its terms, effective concurrently with the Initial
Closing.
Section 9.3 Conditions to Obligations of Seller, Primestar and PLP.
------------------------------------------------------
The obligations of Seller, Primestar and PLP to effect the transfer of the
Ground Satellite Assets and the Option as contemplated by Section 2.2(a) is
--------------
subject to the satisfaction or waiver by Seller, Primestar and PLP on or prior
to the Initial Closing Date of each of the following conditions:
(a) Representations and Warranties. The representations and
------------------------------
warranties of Buyer set forth in this Agreement (x) that are qualified as to
materiality shall be true and correct in all respects and (y) that are not so
qualified shall be true and correct in all material respects, in each case as of
the date of this Agreement and as of the Initial Closing Date as though made on
and as of the Initial Closing Date, and Buyer shall have delivered to Seller, a
certificate signed by an executive officer of Buyer confirming the foregoing as
of the Initial Closing Date; provided, however, that the certification made with
-------- -------
respect to the representations and warranties contained in Section 7.5(a) shall
--------------
be satisfied if, as of the Initial Closing Date, such representation or warranty
shall not have become inaccurate in a manner that would reasonably be likely to
result in a material diminution in the value of the Transferred Assets or the
benefits expected to be derived by Seller as a result of the transactions
contemplated hereby or which otherwise would reasonably be likely to have a
Buyer Material Adverse Effect.
(b) Performance of Obligations of Buyer. Each and all of the
-----------------------------------
covenants and agreements of Buyer to be performed or
53
complied with pursuant to this Agreement on or prior to the Initial Closing Date
shall have been fully performed and complied with in all material respects, and
Buyer shall have delivered to Seller, a certificate signed by an executive
officer of Buyer confirming the foregoing as of the Initial Closing Date.
(c) Opinion of Counsel. Buyer shall have received the opinion of
------------------
Weil, Gotshal & Xxxxxx LLP, counsel to Buyer, in a form reasonably agreeable to
Buyer and Seller.
ARTICLE X
CONDITIONS TO TRANSFER OF IN-ORBIT SATELLITE ASSETS
Section 10. Conditions to Each Party's Obligations. The respective
--------------------------------------
obligations of each party to effect the transfer of the In-Orbit Satellite
Assets as contemplated by Section 2.2(b) are subject to the satisfaction or
--------------
waiver on or prior to the Subsequent Closing Date of each of the following
conditions:
(a) Regulatory Approvals. All applicable waiting periods (and any
--------------------
extensions thereof), if any, under the HSR Act shall have expired or otherwise
been terminated, and the parties hereto shall have received the Final Order;
provided, however, that Buyer shall have the unilateral right to waive this
-------- -------
condition with respect to the Final Order and to cause the transfer of the In-
Orbit Satellite Assets to occur at any time after issuance of the FCC Consent,
provided that all other conditions of this Article X are satisfied or waived by
the parties and subject to the termination provisions of Article XI. In the
event that the In-Orbit Satellite Assets are transferred under this Article X by
virtue of a decision by Buyer to waive the Final Order requirement or by mutual
agreement of the parties, and the FCC Consent is subsequently reversed or
modified in a manner that is materially adverse to either party, the parties
shall make commercially reasonable efforts to enter into an Acceptable
Alternative Arrangement. In the event that the parties are unable to enter into
such an Acceptable Alternative Arrangement, each party agrees to use its
commercially reasonable efforts to unwind this Agreement to the extent necessary
to place each party in the position that it was in before the Subsequent Closing
Date.
(b) No Injunctions or Restraints. No Law issued by any Governmental
----------------------------
Entity or prohibition preventing the consummation of the transactions
contemplated by this Agreement shall be in effect.
54
Section 10.2 Conditions to Obligations of Buyer. The obligations of
----------------------------------
Buyer to effect the transfer of the In-Orbit Satellite Assets as contemplated by
Section 2.2(b) are subject to the satisfaction or waiver by Buyer on or prior to
--------------
the Subsequent Closing Date of each of the following conditions:
(a) Representations and Warranties. The representations and
------------------------------
warranties of Seller, Primestar and PLP set forth in this Agreement (x) that are
qualified as to materiality shall be true and correct in all respects and (y)
that are not so qualified shall be true and correct in all material respects, in
each case as of the date of this Agreement and as of the Subsequent Closing Date
as though made on and as of the Subsequent Closing Date, and each of Seller,
Primestar and PLP shall have delivered to Buyer a certificate signed by one of
its executive officers confirming the foregoing as of the Subsequent Closing
Date; provided, however, that the certification made with respect to the
-------- -------
representations and warranties contained in Sections 5.8(a) and 5.10(i) shall be
---------------------------
satisfied if, as of the Subsequent Closing Date, such representation or warranty
shall not have become inaccurate in a manner that would reasonably be likely to
result in a material diminution in the value of the Transferred Assets or the
benefits expected to be derived by Buyer as a result of the transactions
contemplated hereby or which otherwise would reasonably be likely to have a
Transferred Asset Material Adverse Effect.
(b) Performance of Obligations of Seller, Primestar and PLP. Each and
-------------------------------------------------------
all of the covenants and agreements of Seller, Primestar and PLP to be performed
or complied with pursuant to this Agreement on or prior to the Subsequent
Closing Date shall have been fully performed and complied with in all material
respects, and each of Seller, Primestar and PLP shall have delivered to Buyer a
certificate signed by one of its executive officers confirming the foregoing as
of the Subsequent Closing Date.
(c) Litigation, Etc. There shall not exist or have been instituted or
---------------
be pending any Action (i) which could reasonably be expected to make illegal, or
to materially delay or otherwise directly or indirectly materially restrain or
prohibit, the consummation of the transactions contemplated by this Agreement,
or which could reasonably be expected to result in material Damages in
connection with the transactions contemplated by this Agreement, (ii) which
could reasonably be expected to result in (x) the prohibition of ownership or
the operation by
55
Buyer of any portion of the Transferred Assets or (y) the Buyer being compelled
to dispose of or to hold separately any portion of the business or assets of
Buyer or its Affiliates or Subsidiaries as a result of the transactions
contemplated by this Agreement, (iii) which could reasonably be expected to
result in any material diminution in the benefits expected to be derived by
Buyer as a result of the transactions contemplated by this Agreement or (iv)
which otherwise has had or could reasonably be expected to have a Transferred
Asset Material Adverse Effect or a material adverse effect on the ability of
Buyer to consummate the transactions contemplated hereby.
(d) Laws, Etc. On or after the date of this Agreement, there shall
---------
not exist or have been enacted, entered, enforced, promulgated or deemed
applicable to the transactions contemplated by this Agreement, any Law or any
other action taken by any Governmental Entity that has resulted, or could
reasonably be expected to result, directly or indirectly, in any of the
consequences referred to in clauses (i) through (iv) of Section 10.2(c).
---------------
(e) No Material Adverse Change. There shall not have occurred (or
--------------------------
reasonably be expected to occur) any event, change or development which has had
or could reasonably be expected to have a Transferred Asset Material Adverse
Effect or a material adverse effect on the ability of Buyer to consummate the
transactions contemplated hereby.
(f) Consents. All material Consents of all Persons (including
--------
Governmental Entities) required to be obtained prior to the Subsequent Closing
in connection with the execution, delivery and performance of this Agreement by
Seller, Primestar, PLP and Buyer, shall have been obtained and shall be in full
force and effect. Without limiting the generality of the foregoing, all
Consents set forth on Schedule 10.2(f) shall have been obtained and shall be in
----------------
full force and effect.
(g) Tax Certificates. Seller and Primestar shall have furnished to
----------------
Buyer affidavits of non-foreign status that comply with Section 1445 of the Code
and all tax clearance certificates or similar documents which may be required by
any state taxing authority in order to relieve Buyer of any obligation to
withhold any portion of the Purchase Price.
(h) Opinion of Counsel. Buyer shall have received the opinions of
------------------
Xxxxx & Xxxxx L.L.P., counsel to Sellers, and the
56
General Counsel of Sellers in each case in a form reasonably agreeable to Buyer
and Seller.
(i) Additional Conditions. Buyer shall be satisfied, and Seller shall
---------------------
certify to Buyer to the effect that, there exists on such date no arrangements
whereby any of Seller, Primestar, PLP or their respective Affiliates has any
Contract or other interest with respect to any of the Transferred Assets except
as expressly set forth hereunder.
(j) Termination of Capacity Option Agreement. Those portions of the
----------------------------------------
Capacity Option Agreement relating to the In-Orbit Satellite shall have been
terminated in accordance with its terms, effective concurrently with the
Subsequent Closing.
Section 10.3 Conditions to Obligations of Seller, Primestar and PLP.
------------------------------------------------------
The obligations of Seller, Primestar and PLP to effect the transfer of the In-
Orbit Satellite Assets as contemplated by Section 2.2(b) is subject to the
--------------
satisfaction or waiver by Seller, Primestar and PLP on or prior to the
Subsequent Closing Date of each of the following conditions:
(a) Representations and Warranties. The representations and
------------------------------
warranties of Buyer set forth in this Agreement (x) that are qualified as to
materiality shall be true and correct in all respects and (y) that are not so
qualified shall be true and correct in all material respects, in each case as of
the date of this Agreement and as of the Subsequent Closing Date as though made
on and as of the Subsequent Closing Date, and Buyer shall have delivered to
Seller, a certificate signed by an executive officer of Buyer confirming the
foregoing as of the Subsequent Closing Date; provided, however, that the
-------- -------
certification made with respect to the representations and warranties contained
in Section 7.5(a) shall be satisfied if, as of the Subsequent Closing Date, such
--------------
representation or warranty shall not have become inaccurate in a manner that
would reasonably be likely to result in a material diminution in the value of
the Transferred Assets or the benefits expected to be derived by Seller as a
result of the transactions contemplated hereby or which otherwise would
reasonably be likely to have a Buyer Material Adverse Effect.
(b) Performance of Obligations of Buyer. Each and all of the
-----------------------------------
covenants and agreements of Buyer to be performed or complied with pursuant to
this Agreement on or prior to the Subsequent Closing Date shall have been fully
performed and
57
complied with in all material respects, and Buyer shall have delivered to
Seller, a certificate signed by an executive officer of Buyer confirming the
foregoing as of the Subsequent Closing Date.
(c) Opinion of Counsel. Seller shall have received the opinion of
------------------
Weil, Gotshal & Xxxxxx LLP, counsel to Buyer, in a form reasonably agreeable to
Buyer and Seller.
ARTICLE XI
TERMINATION
Section 11.1 Termination. This Agreement may be terminated and the
-----------
transactions contemplated by this Agreement abandoned at any time prior to the
Initial Closing Date or the Subsequent Closing Date:
(a) by the mutual written agreement of Buyer and Seller;
(b) by Buyer or Seller (solely with respect to the Subsequent Closing
Date) if the conditions set forth in Article X have not been satisfied by the
Outside Date; provided, however, that neither Buyer, on the one hand, nor
-------- -------
Seller, on the other hand, may so terminate this Agreement if the failure to
satisfy the conditions set forth in Article X is due to the failure of Buyer, on
the one hand, or Seller, on the other hand, to perform in all material respects
each of its obligations required to be performed on or prior to the Subsequent
Closing Date;
(c) by Buyer or Seller, subject to Section 8.4, if the transactions
-----------
contemplated hereby have not been consummated by the Outside Date.
(d) by Buyer or Seller, if there shall be any Law that makes
consummation of the transactions contemplated by this Agreement illegal or
otherwise prohibited or if any Governmental Entity shall have issued an order,
decree or ruling or taken any other action permanently restraining, enjoining or
otherwise prohibiting the consummation of the transactions contemplated by this
Agreement, and such order, decree, ruling or other action shall not be subject
to appeal or shall have become final and unappealable;
58
(e) by Buyer, if there shall have been a breach of any representation,
warranty, covenant or agreement on the part of Seller, Primestar, PLP or any
Stockholder set forth in this Agreement, or if any representation or warranty of
Seller, Primestar or PLP set forth in this Agreement shall have become untrue,
in any such case such that the breach of such representation, warranty, covenant
or agreement could reasonably be expected to have a Transferred Asset Material
Adverse Effect if not remedied prior to the applicable Closing Date, provided,
--------
that if such breach is curable by Seller prior to the Outside Date through the
exercise of its commercially reasonable efforts, then for so long as Seller
continues to exercise such commercially reasonable efforts to cure the same,
Buyer may not terminate this Agreement pursuant to this Section 11.1(e);
---------------
(f) by Seller, if there shall have been a breach of any
representation, warranty, covenant or agreement on the part of Buyer set forth
in this Agreement, or if any representation or warranty of Buyer set forth in
this Agreement shall have become untrue, in any such case such that the breach
of such representation, warranty, covenant or agreement could reasonably be
expected to have a Transferred Asset Material Adverse Effect if not remedied
prior to the applicable Closing Date, provided, that if such breach is curable
--------
by Buyer prior to the Outside Date through the exercise of its commercially
reasonable efforts, then for so long as Buyer continues to exercise such
commercially reasonable efforts to cure the same, Seller may not terminate this
Agreement pursuant to this Section 11.1(f); or
---------------
(g) by Buyer or Seller, if the Board of Directors of GM shall fail to
approve the transactions contemplated hereby within 10 Business Days of the date
hereof.
Section 11.2 Effect of Termination. In the event of the termination
---------------------
of this Agreement pursuant to Section 11.1 and subject to Section 13.5(c), this
------------ ---------------
Agreement, other than with respect to Section 8.5, the second and fourth
-----------
sentences of Section 8.6 and Section 14.6, which shall continue in effect, shall
----------- ------------
thereafter become void and have no effect, without any liability on the part of
any party or its Subsidiaries or Affiliates in respect thereof, except that
nothing herein will relieve any party from liability for any breach of this
Agreement and, if the Initial Closing occurred, this provision shall have no
effect with respect to the previous consummation of such transaction.
59
ARTICLE XII
SURVIVAL
Section 12.1 Survival. The respective representations and warranties
--------
of each of Seller, Primestar, PLP and Buyer contained in this Agreement (other
than the representations and warranties with respect to title contained in
Section 5.6, Taxes contained in Section 5.4 and FCC matters contained in Section
----------- ----------- -------
5.11 or on any related schedule hereto or in any certificate or document
----
delivered pursuant hereto and representations and warranties with respect to
brokers contained in Section 5.16 and Section 7.6) will survive the execution
------------ -----------
and delivery of this Agreement, the consummation of the transactions
contemplated hereby and the Subsequent Closing Date and will continue in full
force and effect until the earlier to occur of (i) the termination of this
Agreement prior to the Closing Date, and (ii) two years after the Subsequent
Closing Date, and then terminate and expire with respect to any theretofore
unasserted claims arising out of or otherwise in respect of any falsity, breach
or inaccuracy of such representations and warranties. The representations and
warranties with respect to Taxes and FCC matters contained in Section 5.4 and
-----------
Section 5.11, respectively, or on any related schedule hereto or in any related
------------
certificate or document delivered pursuant hereto and the representations and
warranties with respect to brokers contained in Section 5.16 and Section 7.6
------------ -----------
will survive the execution and delivery of this Agreement, the consummation of
the transactions contemplated hereby and the Subsequent Closing Date until 60
days after all applicable statutes of limitation (including any extensions
thereof) have expired and then expire with respect to any theretofore unasserted
claims arising out of or otherwise in respect of any falsity, breach or
inaccuracy of such representations and warranties. The representations and
warranties with respect to title contained in Section 5.6 or on any related
-----------
schedule hereto or in any related certificate or document delivered pursuant
hereto will survive the execution and delivery of this Agreement, the
consummation of the transactions contemplated hereby and the Subsequent Closing
Date without time limitation, but will terminate if this Agreement terminates
prior to the Subsequent Closing Date.
60
ARTICLE XIII
INDEMNIFICATION
Section 13.1 Indemnification by Primestar and the Stockholders.
-------------------------------------------------
Subject to the other provisions of this Article XIII, each of Primestar and each
of the Stockholders, jointly and severally (except that the obligation of GE
American Communications, Inc. shall be several, as to its pro rata share, based
on the percentage of equity ownership of GE American Communications, Inc. in
Primestar), shall indemnify, defend and hold harmless Buyer and its Subsidiaries
and Affiliates and their respective employees, directors, officers,
stockholders, representatives and agents (collectively, the "Buyer Group") from
and against, and pay or reimburse, as the case may be, the Buyer Group for, any
and all Damages, as incurred, suffered by Buyer or any other member of the Buyer
Group based upon, arising out of or otherwise in any way relating to or in
respect of:
(a) any falsity, breach or inaccuracy of any representation or
warranty made by Seller, Primestar, PLP or any Stockholder herein or in any
certificate or other document delivered pursuant hereto (except that no
Stockholder shall be obligated to provide indemnification for any falsity,
breach or inaccuracy of any representation or warranty with respect to any other
Stockholder);
(b) any breach or violation of any covenant or agreement of Seller,
Primestar, PLP or the Stockholders contained herein or in any certificate or
other document delivered pursuant hereto;
(c) any Retained Liability;
(d) the enforcement by the Buyer Group of their rights to be
indemnified, defended and held harmless under this Agreement; or
(e) the discharge of the indebtedness owed to PLP as contemplated by
Section 3.1(a)(3) and Section 3.1(b)(3).
----------------- -----------------
Section 13.2 Indemnification by Buyer. Subject to the other
------------------------
provisions of this Article XIII, Buyer shall indemnify, defend and hold harmless
Seller and its Subsidiaries and Affiliates and their respective employees,
directors, officers, stockholders, representatives and agents (collectively, the
61
"Seller Group") from and against, and pay or reimburse, as the case may be, the
Seller Group for, any and all Damages, as incurred, suffered by Seller or any
other member of the Seller Group based upon, arising out of or otherwise in any
way relating to or in respect of:
(a) any falsity, breach or inaccuracy of any representation or
warranty made by Buyer herein or in any certificate or other document delivered
pursuant hereto;
(b) any breach or violation of any covenant or agreement of Buyer
contained herein or in any certificate or other document delivered pursuant
hereto;
(c) the Assumed Liabilities; or
(d) the enforcement by the Seller Group of their rights to be
indemnified, defended and held harmless under this Agreement.
Section 13.3 Procedures for Indemnification.
------------------------------
(a) If a claim or demand is made against an Indemnitee, or an
Indemnitee shall otherwise learn of an assertion, by any Person who is not a
party to this Agreement (or an Affiliate thereof) (a "Third Party Claim") as to
which one or more parties (collectively, the "Indemnifying Party") may be
obligated to provide indemnification pursuant to this Agreement, such Indemnitee
will notify the Indemnifying Party in writing, and in reasonable detail, of the
Third Party Claim reasonably promptly after becoming aware of such Third Party
Claim; provided, however, that failure to give such notification will not affect
-------- -------
the indemnification provided hereunder except to the extent the Indemnifying
Party shall have been actually prejudiced as a result of such failure.
(b) If a Third Party Claim is made against an Indemnitee and the
Indemnifying Party unconditionally and irrevocably acknowledges in writing its
obligation to indemnify the Indemnitee therefor (subject to verification that
any losses or costs in respect thereof constitute Damages and compliance with
the other terms hereof), the Indemnifying Party will be entitled to assume the
defense thereof (at the expense of the Indemnifying Party) with counsel selected
by the Indemnifying Party and reasonably satisfactory to the Indemnitee. Should
the Indemnifying Party so elect to assume the defense of a Third Party Claim,
the Indemnifying Party will not be liable to the
62
Indemnitee for any legal or other expenses subsequently incurred by the
Indemnitee in connection with the defense thereof; provided that, if in any
Indemnitee's reasonable judgment a conflict of interest exists in respect of
such claim, such Indemnitee shall have the right to employ separate counsel
(which shall be reasonably satisfactory to the Indemnifying Party) and one local
counsel to represent such Indemnitee and in that event the reasonable fees and
expenses of each such counsel shall be paid by such Indemnifying Party. If the
Indemnifying Party assumes the defense of any Third Party Claim, the Indemnitee
shall have the right to participate in the defense thereof and to employ
counsel, at its own expense (except as otherwise provided in the preceding
sentence), separate from the counsel employed by the Indemnifying Party. The
Indemnifying Party shall be liable for the fees and expenses of counsel employed
by the Indemnitee for any period during which the Indemnifying Party has failed
to assume the defense thereof or if it does not expressly elect to assume the
defense thereof (including acknowledging its indemnification obligation as
aforesaid). If the Indemnifying Party assumes the defense of any Third Party
Claim, the Indemnifying Party will promptly supply to the Indemnitee copies of
all correspondence and documents relating to or in connection with such Third
Party Claim and keep the Indemnitee fully informed of all developments relating
to or in connection with such Third Party Claim (including providing to the
Indemnitee on request updates and summaries as to the status thereof). If the
Indemnifying Party chooses to defend a Third Party Claim, all the Indemnitees
shall reasonably cooperate with the Indemnifying Party in the defense thereof
(such cooperation to be at the expense, including reasonable legal fees and
expenses, of the Indemnifying Party).
(c) If the Indemnifying Party unconditionally and irrevocably
acknowledges in writing its obligation to indemnify the Indemnitee for a Third
Party Claim (subject to verification that any losses or costs in respect thereof
constitute Damages and compliance with the other terms hereof), the Indemnitee
will agree to any settlement, compromise or discharge of such Third Party Claim
which the Indemnifying Party may recommend and which by its terms obligates the
Indemnifying Party to pay the full amount of Damages in connection with such
Third Party Claim and unconditionally and irrevocably releases the Indemnitee
(and the other members of the Buyer Group or the Seller Group, as the case may
be) completely from all Liability in connection with such Third Party Claim,
provided, however, that, without the Indemnitee's prior written consent, the
-------- -------
Indemnifying Party shall not consent to any settlement, compromise or discharge
(including
63
the consent to entry of any judgment), and the Indemnitee may refuse to agree to
any such settlement, compromise or discharge that, in the reasonable opinion of
the Indemnitee could reasonably be expected to materially and adversely affect
the Indemnitee. If the Indemnifying Party unconditionally and irrevocably
acknowledges in writing its obligation to indemnify the Indemnitee for a Third
Party Claim, the Indemnitee shall not (unless required by law) admit any
liability with respect to, or settle, compromise or discharge, such Third Party
Claim without the Indemnifying Party's prior written consent (which consent
shall not be unreasonably withheld).
(d) Any claim on account of Damages which does not involve a Third
Party Claim shall be asserted by reasonably prompt written notice given by the
Indemnitee to the Indemnifying Party from whom such indemnification is sought.
The failure by any Indemnitee so to notify the Indemnifying Party shall not
relieve the Indemnifying Party from any liability which it may have to such
Indemnitee under this Agreement, except to the extent that the Indemnifying
Party shall have been actually prejudiced by such failure. If the Indemnifying
Party does not dispute its liability to the Indemnitee with respect to the claim
made in such notice by notice to the Indemnitee prior to the expiration of a 30-
calendar-day period following the Indemnifying Party's receipt of notice of such
claim, the claim shall be conclusively deemed a liability of the Indemnifying
Party under this Agreement. The Indemnifying Party shall pay the amount of such
liability to the Indemnitee on demand or, in the case of any notice in which the
amount of the claim (or any portion thereof) is estimated, on such later date
when the amount of such claim (or such portion thereof) becomes finally
determined. If the Indemnifying Party has timely disputed its liability with
respect to such claim, as provided above, the Indemnifying Party and the
Indemnitee shall proceed in good faith to negotiate a resolution of such dispute
and, if not resolved through negotiations by the 90th day after notice of such
claim was given to the Indemnifying Party, the Indemnifying Party and the
Indemnitee will resolve such dispute in accordance with Section 14.11.
-------------
Section 13.4 Termination of Indemnification Obligations. The
------------------------------------------
obligations of each party to indemnify, defend and hold harmless the other party
and other Indemnitees (i) pursuant to Section 13.1(a) and Section 13.2(a) shall
--------------- ---------------
terminate when the applicable representation or warranty expires pursuant to
Article XII, (ii) pursuant to Section 13.1(b) and Section 13.2(b) shall
--------------- ---------------
terminate upon the later to occur of (A) two years after the Subsequent Closing
Date and (B) six months after the
64
last day on which the obligations described in Sections 13.1(b) and 13.2(b)
----------------------------
shall have been required to be performed and (iii) pursuant to Sections 13.1(c),
-----------------
(d) and (e), and Sections 13.2(c) and (d) shall continue without time limitation
----------- ------------------------
and shall not terminate at any time; provided, however, that as to clauses (i)
-------- -------
and (ii) above, such obligations to indemnify, defend and hold harmless shall
not terminate with respect to any individual item as to which the Indemnitee
shall have, before the expiration of the applicable period, made a claim by
delivering a notice (stating in reasonable detail the basis of such claim) to
the Indemnifying Party.
Section 13.5 Certain Limitations.
-------------------
(a) No monetary amount shall be payable by Seller or Buyer to any
member of the Buyer Group or the Seller Group, respectively, with respect to the
indemnification of any claims pursuant to Section 13.1(a) or Section 13.2(a), as
--------------- ---------------
the case may be (other than with respect to the representations and warranties
in Sections 5.2, 5.4, 5.6, 5.10(i), 5.11, 5.12, 5.16, and 7.6) until the
----------------------------------------------------------
aggregate amount of Damages actually incurred by the Buyer Group or the Seller
Group, as the case may be, with respect to all claims shall exceed on a
cumulative basis Two Hundred Fifty Thousand Dollars ($250,000) (the
"Threshold"), in which event Primestar and each of the Stockholders or Buyer, as
the case may be, shall be responsible for the full amount of such Damages,
including the initial $250,000 of Damages which are subject to the Threshold.
Claims made pursuant to the representations and warranties contained in or made
pursuant to Sections 5.2, 5.4, 5.6, 5.10(i), 5.11, 5.12, 5.16, and 7.6 will not
----------------------------------------------------------
be subject to the Threshold.
(b) Except for Damages arising out of, attributable to or resulting
from any breach of the representations and warranties in Sections 5.2, 5.4, 5.6,
-----------------------
5.11 and 5.12, no member of the Buyer Group or the Seller Group, as the case may
-------------
be, shall have any right to obtain an indemnification payment under this
Agreement to the extent amounts received by the members of such group as
indemnification payments hereunder equal or exceed the Purchase Price; provided,
--------
that the limitation on Damages set forth in this Section 13.5(b) shall in no way
---------------
affect the amount of any Assumed Liabilities assumed by Buyer or the amount of
Retained Liabilities retained by Seller or the Specified Seller Affiliates.
(c) Anything contained herein to the contrary notwithstanding, and
without limiting the rights of Buyer and the
65
Buyer Group against the Seller, Primestar, MDU and PLP hereunder, the
indemnification provided for in this Article XIII shall be the sole and
exclusive remedy of Buyer and the Buyer Group against the Stockholders with
respect to the matters described in subsections 13.1(a) through (e).
In addition, if the transactions contemplated hereby are terminated
prior to the Subsequent Closing Date in accordance with the terms hereof, and
without limiting any rights against the Seller, Primestar, MDU and PLP, the
Buyer Group will not have the right to seek indemnification from any Stockholder
except with respect to (i) any breach by such Stockholder of its obligations
hereunder to be performed prior to such termination and (ii) any Third Party
Claims.
ARTICLE XIV
GENERAL PROVISIONS
Section 14.1 Assignment. No party to this Agreement shall convey,
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assign or otherwise transfer any of its rights or obligations under this
Agreement without the prior written consent of the other parties hereto in their
sole and absolute discretion, except that Buyer may (without obtaining any
consent) assign its rights, interests or obligations under this Agreement, in
whole or in part, to any direct or indirect Subsidiary. Any conveyance,
assignment or transfer requiring the prior written consent of the other parties
hereto which is made without such consent shall be void ab initio. No
---------
assignment of this Agreement will relieve the assigning party of its obligations
hereunder.
Section 14.2 Parties in Interest. This Agreement is binding upon and
-------------------
is for the benefit of the parties hereto and their respective successors and
permitted assigns. This Agreement is not made for the benefit of any Person not
a party hereto, and no Person other than the parties hereto or their respective
successors and permitted assigns will acquire or have any benefit, right, remedy
or claim under or by reason of this Agreement, except that members of the Buyer
Group and the Seller Group shall be entitled to the rights to indemnification
provided to the Buyer Group and the Seller Group, respectively, hereunder. The
Stockholders are parties to this Agreement with respect to the following
Sections and Articles only: Sections 6.5, 6.6 and 8.1(g) and Articles XII, XIII
and XIV.
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Section 14.3 Amendment. This Agreement cannot be amended, modified
---------
or supplemented except by a written agreement executed by Buyer and Seller.
Section 14.4 Waiver; Remedies. No failure or delay on the part of
----------------
either Buyer or Seller in exercising any right, power or privilege hereunder
will operate as a waiver thereof, nor will any waiver on the part of either
Buyer or Seller of any right, power or privilege hereunder operate as a waiver
of any other right, power or privilege hereunder, nor will any single or partial
exercise of any right, power or privilege hereunder preclude any other or
further exercise thereof or the exercise of any other right, power or privilege
hereunder. The rights and remedies herein provided are cumulative and, except
as otherwise provided in Section 13.5(c), are not exclusive of any rights or
---------------
remedies which the parties may otherwise have at law or in equity.
Section 14.5 Effect of Investigation. All representations,
-----------------------
warranties, covenants and agreements made by Seller in this Agreement or in any
certificates, statements or other documents delivered pursuant to this Agreement
shall be unaffected by any investigation made by or on behalf of Buyer or
Knowledge obtained as a result thereof or otherwise.
Section 14.6 Fees and Expenses. Each of Buyer, on the one hand, and
-----------------
Seller and Primestar, on the other hand, agrees to pay, without right of
reimbursement from the other, all costs and expenses incurred by it, incident to
the performance of its obligations hereunder, including the fees and
disbursements of counsel, accountants, financial advisors, experts and
consultants employed by the respective parties in connection with the
transactions contemplated hereby, whether or not the transactions contemplated
by this Agreement are consummated.
Section 14.7 Notices. All notices, requests, claims, demands and
-------
other communications required or permitted to be given hereunder shall be in
writing and shall be delivered by hand or telecopied or sent, postage prepaid,
by registered, certified or express mail or reputable overnight courier service
and will be deemed given when so delivered by hand or telecopied, or three
Business Days after being so mailed (one Business Day in the case of express
mail or overnight courier service). All such notices, requests, claims, demands
and other communications shall be addressed as set forth below, or pursuant to
such other instructions as may be designated in writing by the party to receive
such notice:
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(a) If to Buyer:
Xxxxxx Electronics Corporation
000 Xxxxx Xxxxxxxxx Xxxxxxxxx
Xx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx
---------
Chief Financial Officer
Telecopy: (000) 000-0000
--------
with a copy to:
Weil, Gotshal & Xxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxxx X. Xxxxx, Esq.
---------
Telecopy: (000) 000-0000
--------
(b) If to Seller, Primestar or PLP:
Primestar, Inc.
0000 Xxxxx Xxxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxx Xxxxx
---------
Chief Executive Officer
Telecopy: (000) 000-0000
--------
with a copy to:
Xxxxx & Xxxxx, L.L.P.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Leaf
---------
Telecopy: (000) 000-0000
--------
(c) If to any Stockholder:
If to Cox:
0000 Xxxx Xxxxx Xxxxx
Xxxxxxx, XX 00000
Attention of Xxxx Xxxxx
Facsimile: (000) 000-0000
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With a separate copy delivered to:
Dow, Xxxxxx & Xxxxxxxxx
0000 Xxx Xxxxxxxxx Xxxxxx, X.X.
Xxxxx 000
Xxxxxxxxxx, XX 00000
Attention of Xxxxxx Xxxxxxx, Esq.
Facsimile: (000) 000-0000
If to MediaOne:
US WEST Media Group, Inc.
000 Xxxxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
Attention of President
Facsimile: (000) 000-0000
With a separate copy delivered to:
MediaOne Group, Inc.
000 Xxxxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
Attention of General Counsel
Facsimile: (000) 000-0000
If to GE:
GE American Communications
Four Research Way
Princeton, NJ 08540
Attention: Xxxx Xxxxxxxx
Facsimile: (000) 000-0000
With a separate copy delivered to:
Xxxxx & Xxxxxxx
000 00xx Xxxxxx, XX
Xxxxxxxxxx, X.X. 00000
Attention: Xxxxxxx X. Xxxxx
Facsimile: (000) 000-0000
If to TWE:
000 Xxxxxx Xxxxx
Xxxxxxxx, XX 00000
Attention of General Counsel,
Time Warner Cable
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Facsimile: (000) 000-0000
With a separate copy delivered to:
Cravath, Swaine & Xxxxx
000 Xxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention of Xxxx X. Xxxxxxx, Esq.
Facsimile: (000) 000-0000
If to Xxxxxxxx:
0000 Xxxxxxxxxx Xxxxx
Xxxx Xxxxxxxx, XX 00000
Attention of Xxxxxx X. Xxxxx
Facsimile: (000) 000-0000
With a separate copy delivered to:
Xxxxx, Xxxxxxx & Xxxxx
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention of Xxxxxx X. Xxxxxxxxxx, Esq.
Facsimile: (000) 000-0000
If to Comcast:
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attention: Xxxx X. Xxxxxx
Facsimile: (000) 000-0000
With a separate copy delivered to:
Comcast Corporation
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attention of Xxxxxx X. Block
Facsimile: (000) 000-0000
Section 14.8 Captions; Currency. The article, section and paragraph
------------------
captions herein and the table of contents hereto are for convenience of
reference only, do not constitute part of this Agreement and will not be deemed
to limit or otherwise affect any of the provisions hereof. Unless otherwise
specified, all references contained in this Agreement, in any exhibit or
schedule referred to herein or in any instrument or
70
document delivered pursuant hereto to dollars or "$" shall mean United States
Dollars. Unless otherwise specified, all references herein to numbered articles
and sections are to articles and sections of this Agreement, all references
herein to schedules are to schedules to this Agreement and all references herein
to exhibits are to exhibits to this Agreement.
Section 14.9 Entire Agreement. This Agreement constitutes the entire
----------------
agreement between the parties with respect to the subject matter hereof and this
Agreement supersedes all prior negotiations, agreements and understandings of
the parties of any nature, whether oral or written, relating thereto, other than
the Confidentiality Agreement.
Section 14.10 Severability. If any provision of this Agreement or the
------------
application thereof to any Person or circumstance is determined by a court of
competent jurisdiction to be invalid, void or unenforceable, the remaining
provisions hereof, or the application of such provision to Persons or
circumstances other than those as to which it has been held invalid or
unenforceable, shall remain in full force and effect and shall in no way be
affected, impaired or invalidated thereby. If the economic or legal substance of
the transactions contemplated hereby is affected in any manner adverse to any
party as a result thereof, the parties shall negotiate in good faith in an
effort to agree upon a suitable and equitable substitute provision to effect the
original intent of the parties.
Section 14.11 Dispute Resolution. Except as provided in Section 3.2(b)
------------------ --------------
and subject to Section 13.3, resolution of any and all disputes arising from or
------------
in connection with this Agree ment, whether based on contract, tort, or
otherwise (collectively, "Disputes"), shall be exclusively governed by and
settled in accordance with the provisions of this Section 14.11. The parties
-------------
hereto shall use all commercially reasonable efforts to settle all Disputes
without resorting to mediation, arbitration or otherwise. If any Dispute
remains unsettled, a party hereto may commence proceedings hereunder by
delivering a written notice from a Senior Vice President or comparable executive
officer of such party (the "Demand") to the other parties providing reasonable
description of the Dispute to the others and expressly requesting mediation
hereunder. The parties hereby agree to submit all Disputes to non-binding
mediation before a mediator reasonably acceptable to all parties involved in
such Dispute. If, after such mediation, the parties subject to such mediation
disagree regarding the mediator's
71
recommendation, such Dispute shall be submitted to arbitration under the terms
hereof, which arbitration shall be final, conclusive and binding upon the
parties, their successors and assigns. The arbitration shall be conducted in Los
Angeles, California by three arbitrators acting by majority vote (the "Panel")
selected by agreement of the parties not later than ten (10) days after delivery
of the Demand or, failing such agreement, appointed pursuant to the commercial
arbitration rules of the American Arbitration Association, as amended from time
to time (the "AAA Rules"). The decision of the Panel shall be rendered promptly
but in no event more than 60 days after the conclusion of submission of
evidence. If an arbitrator so selected becomes unable to serve, his or her
successors shall be similarly selected or appointed. The arbitration shall be
conducted pursuant to the Federal Arbitration Act and such procedures as the
parties subject to such arbitration may agree, or, in the absence of or failing
such agreement, pursuant to the AAA Rules. Notwithstanding the foregoing: (i)
each party to a Dispute shall have the right to audit the books and records of
the other party to such dispute that are reasonably related to the Dispute; (ii)
each party to a Dispute shall provide to the other, reasonably in advance of any
hearing, copies of all documents which such party intends to present in such
hearing; and (iii) each party to a Dispute shall be allowed to conduct
reasonable discovery through written requests for information, document
requests, requests for stipulation of fact and depositions, the nature and
extent of which discovery shall be determined by the parties. The award shall be
in writing and shall specify the factual and legal basis for the award. The
Panel shall apportion all costs and expenses of arbitration, including the
Panel's fees and expenses and fees and expenses of experts, between the
prevailing and non-prevailing party as the Panel deems fair and reasonable.
Notwithstanding the foregoing, in no event may the Panel award consequential,
special, exemplary or punitive damages. Any arbitration award, including
injunctive relief, shall be binding and enforceable against the parties hereto
and judgment may be entered thereon in any court of competent jurisdiction.
Section 14.12 Exhibits and Schedules; Disclosure. All exhibits and
----------------------------------
schedules attached hereto are hereby incorporated in and made a part of this
Agreement as if set forth in full herein. Capitalized terms used in the
schedules hereto but not otherwise defined therein shall have the respective
meanings assigned to such terms in this Agreement. Disclosure of any item in
any section of or on any schedule to this Agreement shall not constitute
disclosure of such item in any other section
72
of or on any other schedule to this Agreement, whether or not the existence of
the item or its contents should be or is relevant to any other section of or
schedule to this Agreement, unless an explicit cross-reference thereto appears
in such other section or schedule.
Section 14.13 Governing Law. This Agreement will be governed by and
-------------
construed in accordance with the internal laws of the State of New York
applicable to contracts made and to be performed entirely within such State,
without regard to the conflicts of law principles of such State.
Section 14.14 Counterparts. This Agreement may be executed in separate
------------
counterparts, each such counterpart being deemed to be an original instrument,
and all such counterparts shall together constitute the same agreement.
Section 14.15 Interpretation. For the purposes of this Agreement, (i)
--------------
words in the singular shall be held to include the plural and vice versa and
----------
words of one gender shall be held to include the other gender as the context
requires, (ii) the terms "hereof", "herein", and "herewith" and words of similar
import shall, unless otherwise stated, be construed to refer to this Agreement
as a whole and not to any particular provision of this Agreement, (iii) the word
"including" and words of similar import when used in this Agreement shall mean
"including, without limitation", unless otherwise specified, and (iv) the word
"or" shall not be exclusive.
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IN WITNESS WHEREOF, this Agreement has been duly executed and
delivered by the duly authorized officers of the parties on the date first
hereinabove written.
XXXXXX ELECTRONICS CORPORATION
By /s/ Xxxxxxx Xxxxx
-----------------------------
Name: Xxxxxxx Xxxxx
Title: President
PRIMESTAR, INC.
By /s/ Xxxx X. Xxxxx
----------------------------
Name: Xxxx X. Xxxxx
Title: Chief Executive Officer
PRIMESTAR PARTNERS L.P., by PRIMESTAR Partner 1, Inc.
and PRIMESTAR Partner 2, Inc., general partners
By /s/ Xxxx X. Xxxxx
----------------------------
Name: Xxxx X. Xxxxx
Title: Vice President of each of PRIMESTAR Partner
1, Inc. and PRIMESTAR Partner 2, Inc.
TEMPO SATELLITE, INC.
By /s/ Xxxxxxx X. Xxxxxxx
----------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Senior Vice President
TIME WARNER ENTERTAINMENT COMPANY, L.P.,
by AMERICAN TELEVISION AND COMMUNICATIONS CORPORATION,
a general partner
By /s/ Xxxxxxx X. Xxxxx
--------------------------
Name: Xxxxxxx X. Xxxxx
Title: Vice President and Deputy General Counsel
IN WITNESS WHEREOF, this Agreement has been duly executed and
delivered by the duly authorized officers of the parties on the date first
hereinabove written.
XXXXXX ELECTRONICS CORPORATION
By /s/ Xxxxxxx Xxxxx
-----------------------------
Name: Xxxxxxx Xxxxx
Title: President
PRIMESTAR, INC.
By /s/ Xxxx X. Xxxxx
----------------------------
Name: Xxxx X. Xxxxx
Title: Chief Executive Officer
PRIMESTAR PARTNERS L.P., by PRIMESTAR Partner 1, Inc.
and PRIMESTAR Partner 2, Inc., general partners
By /s/ Xxxx X. Xxxxx
----------------------------
Name: Xxxx X. Xxxxx
Title: Vice President of each of PRIMESTAR Partner
1, Inc. and PRIMESTAR Partner 2, Inc.
TEMPO SATELLITE, INC.
By /s/ Xxxxxxx X. Xxxxxxx
----------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Senior Vice President
TIME WARNER ENTERTAINMENT COMPANY,
L.P.,
by AMERICAN TELEVISION AND COMMUNICATIONS CORPORATION,
a general partner
By /s/ Xxxxxxx X. Xxxxx
--------------------------
Name: Xxxxxxx X. Xxxxx
Title: Vice President and Deputy General Counsel
ADVANCE/XXXXXXXX PARTNERSHIP,
by ADVANCE COMMUNICATION CORP., as general partner
By /s/ Xxxxxxx X. Futon
----------------------------
Name: Xxxxxxx X. Futon
Title: Senior Vice President
COMCAST CORPORATION
By /s/ Xxxxx X. Xxxxxxx
---------------------------
Name: Xxxxx X. Xxxxxxx
Title: President
XXX COMMUNICATIONS, INC.
By /s/ Xxxxx X. Xxxxx
--------------------------
Name: Xxxxx X. Xxxxx
Title: Senior Vice President of Finance
MEDIAONE OF DELAWARE, INC.
By /s/ Miles X. Xxxxxxxxx
-----------------------------
Name: Miles X. Xxxxxxxxx
Title: Vice President
GE AMERICAN COMMUNICATIONS, INC.
By /s/ Xxxx X. Xxxxxxxx
-----------------------------
Name: Xxxx X. Xxxxxxxx
Title: Chairman and Chief Executive Officer
