EXHIBIT A
EXECUTION COPY
STOCK PURCHASE AGREEMENT
BY AND AMONG
THE NEWS CORPORATION LIMITED,
XXXXXX ELECTRONICS CORPORATION
AND
GENERAL MOTORS CORPORATION
____________________
Dated as of April 9, 2003
TABLE OF CONTENTS
Page
ARTICLE I
SALE AND PURCHASE OF SHARES .................................................... 4
1.1 Sale and Purchase of Shares ....................................... 4
ARTICLE II
PURCHASE PRICE AND PAYMENT ..................................................... 4
2.1 Amount of Purchase Price .......................................... 4
2.2 Payment of Purchase Price ......................................... 4
ARTICLE III
CLOSING AND TERMINATION ........................................................ 5
3.1 Closing Date ...................................................... 5
3.2 Termination of Agreement .......................................... 5
3.3 Notice of Termination; Effect of Termination ...................... 8
3.4 Fees and Expenses upon Termination ................................ 8
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF GM ........................................... 11
4.1 Organization and Good Standing .................................... 11
4.2 Corporate Power and Authority ..................................... 11
4.3 Conflicts, Consents and Approvals ................................. 12
4.4 Ownership of Xxxxxx Capital Stock ................................. 13
4.5 Capitalization; Class H Fraction .................................. 13
4.6 Ownership and Transfer of Shares .................................. 14
4.7 Litigation ........................................................ 14
4.8 Brokerage and Finder's Fees; Opinions of Financial Advisors ....... 15
4.9 Information for Inclusion in the Proxy/Consent Solicitation
Statement, the Registration Statements and Other Filings .......... 15
4.10 Tax Representations ............................................... 16
4.11 Requisite Approvals ............................................... 16
4.12 Agreement with GM Employee Benefit Plans .......................... 16
4.13 Investment Intention .............................................. 16
4.14 Limitation on Warranties .......................................... 17
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF XXXXXX ....................................... 17
5.1 Organization and Good Standing .................................... 17
5.2 Subsidiaries ...................................................... 18
5.3 Corporate Power and Authority ..................................... 18
5.4 Capitalization .................................................... 18
5.5 Conflicts, Consents and Approvals ................................. 19
5.6 Xxxxxx SEC Documents .............................................. 20
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TABLE OF CONTENTS
(continued)
Page
5.7 Financial Statements; Liabilities ................................. 21
5.8 Absence of Certain Changes ........................................ 22
5.9 Compliance with Law ............................................... 22
5.10 Litigation ........................................................ 22
5.11 Taxes ............................................................. 22
5.12 Environmental and Safety Matters .................................. 22
5.13 Employee Benefit Plans ............................................ 23
5.14 Intellectual Property ............................................. 25
5.15 Contracts ......................................................... 25
5.16 Brokerage and Finder's and Other Fees; Opinions of Financial
Advisors .......................................................... 26
5.17 Board and Stockholder Approval .................................... 26
5.18 Takeover Laws ..................................................... 26
5.19 Restrictive Agreements ............................................ 26
5.20 Permits ........................................................... 27
5.21 Tax Representations ............................................... 28
5.22 Information for Inclusion in the Proxy/Consent Solicitation
Statement, the Registration Statements and Other Filings .......... 28
5.23 Real Estate ....................................................... 28
5.24 Limitation on Warranties .......................................... 29
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER ................................ 29
6.1 Organization and Good Standing .................................... 30
6.2 Corporate Power and Authority ..................................... 30
6.3 Conflicts; Consents and Approvals ................................. 31
6.4 Capitalization of the Purchaser ................................... 32
6.5 Purchaser Filings ................................................. 33
6.6 Financial Statements .............................................. 33
6.7 Litigation ........................................................ 34
6.8 Investment Intention .............................................. 34
6.9 Financial Advisors ................................................ 34
6.10 Board and Stockholder Approval .................................... 34
6.11 Financing ......................................................... 35
6.12 Tax Representations ............................................... 35
6.13 Information for Inclusion in the Proxy/Consent Solicitation
Statement, the Registration Statements and Other Filings .......... 35
6.14 Merger Sub ........................................................ 36
6.15 Limitation on Warranties .......................................... 36
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TABLE OF CONTENTS
(continued)
Page
ARTICLE VII
THE TRANSACTIONS ............................................................... 36
7.1 GM Board Approval of the Transactions ............................. 36
7.2 GM Stockholder Approval of the Transactions and the GM Charter
Amendment ......................................................... 37
7.3 Conditions to GM's Obligations Relating to the Stockholder
Approval Process .................................................. 39
7.4 Recapitalization of Xxxxxx ........................................ 40
7.5 Split-Off of Xxxxxx from GM ....................................... 40
7.6 Effects of the Split-Off .......................................... 41
7.7 Cooperation; Stockholder Records .................................. 42
7.8 Closing of Transfer Records ....................................... 43
7.9 Cancellation ...................................................... 43
7.10 Treatment of Stock Options, LTAP Awards and Restricted Stock
Units; Section 16 Matters ......................................... 43
7.11 GM Charter Amendment .............................................. 45
7.12 Xxxxxx Charter and By-law Amendments .............................. 45
7.13 Elimination of GM Class H Common Stock from GM Certificate of
Incorporation ..................................................... 45
7.14 Merger Agreement .................................................. 45
7.15 Pension Transfer Agreement ........................................ 45
ARTICLE VIII
CONDUCT OF BUSINESS ............................................................ 46
8.1 Conduct of Business of Xxxxxx ..................................... 46
8.2 Restrictions on Conduct of Business ............................... 46
8.3 Permit Matters .................................................... 48
ARTICLE IX
ADDITIONAL AGREEMENTS .......................................................... 48
9.1 Preparation and Filing of the Registration Statements, the
Proxy/Consent Solicitation Statement and Other Filings ............ 48
9.2 Access to Information ............................................. 51
9.3 Reasonable Best Efforts to Consummate Transactions ................ 51
9.4 Regulatory Matters ................................................ 51
9.5 [Intentionally Omitted] ........................................... 54
9.6 No Solicitation ................................................... 54
9.7 Pre-Closing Cooperation Regarding Tax Ruling and Related Matters .. 57
9.8 Publicity ......................................................... 59
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TABLE OF CONTENTS
(continued)
Page
9.9 Notification of Certain Matters ................................... 59
9.10 Certain Transaction Costs ......................................... 60
9.11 Changes to Transaction Agreements ................................. 60
9.12 Director and Officer Indemnification .............................. 60
9.13 Refinancing; Indian Entities ...................................... 62
9.14 Letters of Accountants ............................................ 62
9.15 Merger Agreement Covenants ........................................ 63
9.16 NYSE Listing ...................................................... 63
9.17 Issuance of Preferred Limited Voting Ordinary Shares; ASX
Listing ........................................................... 63
9.18 Delivery of Merger Consideration .................................. 64
9.19 Blue Sky .......................................................... 64
9.20 Special Dividend .................................................. 64
ARTICLE X
CONDITIONS TO CLOSING .......................................................... 65
10.1 Conditions Precedent to Obligations of Each Party ................. 65
10.2 Conditions Precedent to Obligations of the Purchaser .............. 66
10.3 Conditions Precedent to Obligations of GM ......................... 67
ARTICLE XI
DOCUMENTS TO BE DELIVERED ...................................................... 69
11.1 Documents to be Delivered by GM ................................... 69
11.2 Documents to be Delivered by the Purchaser ........................ 69
ARTICLE XII
TAX-FREE STATUS OF THE SPLIT-OFF ............................................... 69
12.1 Representations and Warranties .................................... 69
12.2 Restrictions Relating to the Split-Off ............................ 70
12.3 Cooperation and Other Covenants ................................... 75
12.4 Indemnification for Tax Liabilities ............................... 79
12.5 Procedure for Indemnification for Tax Liabilities ................. 82
12.6 Exclusivity of Article XII ........................................ 83
ARTICLE XIII
INDEMNIFICATION ................................................................ 83
13.1 Indemnification by GM ............................................. 83
13.2 Indemnification by the Purchaser; Sharing of Certain Amounts ...... 85
13.3 Indemnification by Xxxxxx ......................................... 86
13.4 Tax Effects of Indemnification .................................... 87
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TABLE OF CONTENTS
(continued)
Page
13.5 Effect of Insurance Upon Indemnification .......................... 88
13.6 Procedure for Indemnification Involving Third-Party Claims ........ 88
13.7 Procedure for Indemnification Not Involving Third-Party Claims .... 90
13.8 Exclusive Remedies ................................................ 90
13.9 Other Liabilities ................................................. 90
ARTICLE XIV
MISCELLANEOUS .................................................................. 90
14.1 Certain Definitions ............................................... 90
14.2 Further Assurances ................................................ 108
14.3 No Survival of Representations and Warranties ..................... 108
14.4 Notices ........................................................... 108
14.5 Interpretation; Absence of Presumption ............................ 109
14.6 Counterparts ...................................................... 110
14.7 Entire Agreement; Severability .................................... 110
14.8 Third Party Beneficiaries ......................................... 111
14.9 Governing Law ..................................................... 111
14.10 Specific Performance .............................................. 111
14.11 Assignment ........................................................ 111
14.12 Amendment ......................................................... 112
14.13 Extension; Waiver ................................................. 112
14.14 Dispute Resolution ................................................ 112
14.15 Arbitration ....................................................... 113
14.16 Consent to Jurisdiction ........................................... 113
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EXHIBITS
Exhibit A - Form of GM Charter Amendment
Exhibit B - Separation Agreement
Exhibit C - Merger Agreement
Exhibit D - Form of Xxxxxx Charter Amendment
Exhibit E - Form of Xxxxxx By-laws Amendment
Exhibit F - Program Access Commitments
Exhibit G - Joint Defense Agreement
Exhibit H - GM Registration Rights Agreement
Exhibit I - Employee Matters Agreement
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STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT, dated as of April 9, 2003 (the "Agreement"), by
and among The News Corporation Limited, an Australia corporation (the
"Purchaser"), Xxxxxx Electronics Corporation, a Delaware corporation ("Xxxxxx"),
and General Motors Corporation, a Delaware corporation ("GM").
W I T N E S S E T H:
WHEREAS, GM currently owns all of the outstanding capital stock of Xxxxxx;
WHEREAS, the currently outstanding Class H Common Stock, par value $0.10
per share, of GM (the "GM Class H Common Stock") represents an approximately
80.1% indirect economic interest in the financial performance of Xxxxxx, and GM
retains an approximately 19.9% economic interest in the financial performance of
Xxxxxx;
WHEREAS, simultaneously with the Stock Sale, GM, pursuant to provisions to
be implemented pursuant to this Agreement and by means of an amendment of the GM
Restated Certificate of Incorporation (the "GM Certificate of Incorporation")
substantially in the form attached hereto as Exhibit A (the "GM Charter
Amendment"), shall distribute to the holders of record of GM Class H Common
Stock as of immediately prior to the Split-Off Effective Time shares of common
stock, par value $0.01 per share, of Xxxxxx (the "Xxxxxx Common Stock") in
exchange for all of the outstanding shares of GM Class H Common Stock in
accordance with the GM Certificate of Incorporation, as amended pursuant to the
GM Charter Amendment, and the GM Class H Common Stock shall thereupon be
redeemed and cancelled (the "Split-Off");
WHEREAS, GM and Xxxxxx desire to consummate the separation of Xxxxxx from
GM pursuant to a Separation Agreement in the form attached hereto as Exhibit B
(the "Separation Agreement"), to be entered into concurrently with the execution
of this Agreement;
WHEREAS, pursuant to the Split-Off, Xxxxxx shall become an independent,
publicly owned company, separate from and no longer wholly owned by GM;
WHEREAS, prior to and as a condition to the Split-Off, Xxxxxx shall
distribute a special cash dividend to GM in an amount equal to Two Hundred
Seventy-Five Million Dollars ($275,000,000) (the "Special Dividend");
WHEREAS, simultaneously with, and as a condition to consummation of the
Split-Off, GM shall sell to the Purchaser (or a Qualified Subsidiary of the
Purchaser designated by the Purchaser) and the Purchaser shall purchase (or
cause its Qualified Subsidiary to purchase) from GM, all of GM's shares of Class
B common stock, par value $0.01 per share, of Xxxxxx (the "Xxxxxx Class B Common
Stock"), representing its
retained economic interest in Xxxxxx immediately prior to the Split-Off, held as
of such time (the "Shares") for the purchase price and upon the terms and
conditions hereinafter set forth (the "Stock Sale");
WHEREAS, the Purchaser's Subsidiary NPAL currently owns all of the
outstanding capital stock of Merger Sub;
WHEREAS, immediately following the consummation of the Split-Off and the
Stock Sale, Xxxxxx and the Purchaser shall merge Merger Sub with and into Xxxxxx
(the "Merger"), with Xxxxxx as the surviving corporation (the "Surviving
Corporation"), as more fully described in the Agreement and Plan of Merger
substantially in the form attached hereto as Exhibit C (the "Merger Agreement");
WHEREAS, pursuant to the Merger, (x) all of the Shares shall remain
outstanding as shares of Surviving Corporation Class B Common Stock and shall,
immediately after the Merger Effective Time, convert into an equal number of
shares of common stock of the Surviving Corporation (the "Surviving Corporation
Common Stock"), (y) all of the outstanding capital stock of Merger Sub shall be
converted into shares of Surviving Corporation Common Stock, such that
immediately following the Merger Effective Time, the Purchaser and its
Subsidiaries own, including the shares described in clause (x) above,
thirty-four percent (34%) of the aggregate number of the issued and outstanding
shares of the Surviving Corporation Common Stock and the Surviving Corporation
Class B Common Stock and (z) all of the shares of Xxxxxx Common Stock
outstanding as of immediately prior to the Merger Effective Time not held by the
Purchaser or any Subsidiary of the Purchaser shall be converted into shares of
Surviving Corporation Common Stock representing sixty-six percent (66%) of the
aggregate number of the Surviving Corporation Common Stock and the Surviving
Corporation Class B Common Stock outstanding immediately after the Merger
Effective Time and Purchaser Stock and/or cash, as applicable, in accordance
with the terms and conditions of the Merger Agreement;
WHEREAS, the Special Dividend, the consummation of the Split-Off and the
separation of Xxxxxx from GM as contemplated by the Separation Agreement
(collectively, the "Xxxxxx Separation Transactions" and, together with the Stock
Sale and the Merger, the "Transactions") are conditioned on, among other things,
the approval by the holders of a majority of the outstanding shares of the
Common Stock, par value $1-2/3 per share, of GM (the "GM $1-2/3 Common Stock")
and by the holders of a majority of the outstanding shares of GM Class H Common
Stock, each voting as a separate class and both voting together as a single
class based on their respective per share voting power, of matters pertaining to
the Transactions, including the GM Charter Amendment;
WHEREAS, in connection with the Transactions, Xxxxxx and the Purchaser are
entering into the Employee Matters Agreement;
WHEREAS, in connection with the issuance of any Purchaser Stock to GM
pursuant to this Agreement, Purchaser shall, among other things, grant to GM
certain
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registration rights and market access rights pursuant to the GM Registration
Rights Agreement;
WHEREAS, the consummation of the Stock Sale is conditioned upon the
consummation of the Split-Off and shall occur on the Closing Date at the time of
the consummation of the Split-Off;
WHEREAS, the consummation of the Merger is conditioned upon the
consummation of the Split-Off and the Stock Sale and shall occur on the Closing
Date immediately after the consummation of the Split-Off and the Stock Sale;
WHEREAS, the Purchaser is unwilling to acquire any shares of Xxxxxx capital
stock unless Xxxxxx shall become a publicly-traded company simultaneously with
such acquisition;
WHEREAS, the parties intend the Split-Off to qualify as a distribution of
Xxxxxx stock to GM stockholders with respect to which no gain or loss will be
recognized pursuant to Section 355 and related provisions of the Internal
Revenue Code of 1986, as amended, together with the rules and regulations
promulgated thereunder (the "Code"), by GM, Xxxxxx and their respective
stockholders;
WHEREAS, the respective Boards of Directors of GM, Xxxxxx and the Purchaser
have determined that the transactions contemplated hereby are advisable,
desirable and in the best interests of their respective stockholders and, by
resolutions duly adopted, the respective Boards of Directors of GM, Xxxxxx and
the Purchaser have approved and adopted this Agreement;
WHEREAS, immediately after the execution of this Agreement, each of GM, as
the sole stockholder of Xxxxxx, and the Purchaser's Subsidiary NPAL, as the sole
stockholder of Merger Sub, shall have approved the Merger and adopted the Merger
Agreement at a meeting of the stockholders of Xxxxxx and Merger Sub,
respectively; and
WHEREAS, certain terms used in this Agreement are defined in Section 14.1
hereof;
NOW, THEREFORE, in consideration of the premises and the representations,
warranties, covenants and agreements contained herein, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and intending to be legally bound hereby, the parties hereby agree
as follows:
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ARTICLE I
SALE AND PURCHASE OF SHARES
1.1 Sale and Purchase of Shares. Upon the terms and subject to the
conditions contained herein, on the Closing Date, GM shall sell, assign,
transfer, convey and deliver to the Purchaser (or a Qualified Subsidiary of the
Purchaser designated in writing by the Purchaser at least three (3) Business
Days prior to Closing), and the Purchaser shall (or shall cause its Qualified
Subsidiary to) purchase from GM, the Shares.
ARTICLE II
PURCHASE PRICE AND PAYMENT
2.1 Amount of Purchase Price. The purchase price for the Shares (the
"Purchase Price") shall be (a) in respect of 80% of the Shares purchased by
Purchaser (the "Fixed Price Shares"), $14.00 per Share in cash, and (b) in
respect of 20% of the Shares purchased by Purchaser (the "Variable Price
Shares"), that number of shares of Purchaser Stock equal to the product
resulting from multiplying (i) the Exchange Ratio (as defined in the Merger
Agreement) by (ii) the number of Variable Price Shares; provided, however, that
the Purchaser may elect, by written notice (the "SPA Cash Payment Election
Notice") to GM and Xxxxxx on or before the third Business Day prior to the
Closing Date, that the Purchase Price in respect of the Variable Price Shares
shall consist entirely or partly of cash, rather than entirely of Purchaser
Stock, with cash replacing such portion of the Purchaser Stock as is specified
in the SPA Cash Payment Election Notice in an amount of cash (without interest
thereon) equal to $14.00 per share of Xxxxxx Class B Common Stock acquired for
cash in lieu of Purchaser Stock (the "Cash Value"); provided, however, that in
the event that the 20-Day Average Purchaser Stock Price is greater than $26.88
determined for the period ending on and including the fifth Business Day prior
to the Closing Date, then the Cash Value shall equal the product obtained by
multiplying (i) such 20-Day Average Purchaser Stock Price by (ii) the Exchange
Ratio. Any such SPA Cash Payment Election Notice shall specify (A) the
percentage of Variable Price Shares to be acquired for cash (the "Cash
Fraction") and (B) the percentage of Variable Price Shares to be acquired for
Purchaser Stock (the "Stock Fraction"), the aggregate of which shall equal one
hundred percent (100%).
2.2 Payment of Purchase Price. On the Closing Date, the Purchaser shall (a)
pay (or shall cause its Qualified Subsidiary to pay) to GM the appropriate
amount (determined in accordance with Section 2.1) of the Purchase Price in
cash, which shall be paid by wire transfer of immediately available funds into
an account designated in writing by GM at least one (1) Business Day prior to
the Closing, and (b) to the extent the Purchaser does not elect to pay in cash
for all of the Variable Price Shares, issue to GM the appropriate number of
shares (determined in accordance with Section 2.1) of Purchaser Stock. If
between the date of this Agreement and the Closing Date, the outstanding shares
of Purchaser Stock shall have been changed into a different number of shares or
a different class, by reason of any stock dividend, subdivision,
reclassification,
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recapitalization, rights offering, split, combination or exchange of shares, the
Purchaser Stock paid with respect to Variable Price Shares and the $14.08,
$17.92 and $26.88 amounts set forth herein or in the Merger Agreement, as
applicable, correspondingly shall be adjusted to the extent warranted to reflect
such stock dividend, subdivision, reclassification, recapitalization, rights
offering, split, combination or exchange of shares. In addition, each
determination of a fraction or a percentage of a share or a ratio set forth in
this Agreement shall be calculated to the nearest five decimal places.
ARTICLE III
CLOSING AND TERMINATION
3.1 Closing Date. Subject to the satisfaction of the conditions set forth
in Article X hereof (or the waiver thereof by the party entitled to waive that
condition), the closing of the sale and purchase of the Shares provided for in
Section 1.1 hereof (the "Closing") shall take place at the offices of Weil,
Gotshal & Xxxxxx LLP located at 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
simultaneously with the consummation of the Split-Off at the Split-Off Effective
Time (or at such other time and place as the parties may designate in writing)
on a date to be specified by the parties hereto, which shall be no later than
one (1) Business Day after the day on which the last of the conditions set forth
in Article X hereof shall have been fulfilled or waived (other than any of such
conditions that by their nature are to be fulfilled at the Closing, but subject
to the fulfillment or waiver of such conditions). The date on which the Closing
shall be held is referred to in this Agreement as the "Closing Date".
3.2 Termination of Agreement. This Agreement may be terminated prior to the
Closing as follows:
(a) by mutual written consent duly authorized by the respective Boards
of Directors of GM and the Purchaser;
(b) by either GM or the Purchaser if:
(i) the transactions contemplated hereby shall not have been
consummated by April 9, 2004 (as such date may be extended pursuant to this
Section 3.2(b)(i), the "Outside Date"); provided, however, that the right
to terminate this Agreement under this Section 3.2(b)(i) shall not be
available to any party whose failure (or whose affiliate's failure) to
perform any material covenant or obligation under this Agreement or the
other Transaction Agreements has been the cause of or resulted in the
failure of the Closing to occur on or before such date; provided further,
that (x) in the event that all of the conditions specified in Article X
hereof shall have been satisfied (or waived) or, in the case of conditions
which by their terms are required to be satisfied substantially
concurrently with the Closing, are capable of being satisfied at such time,
other than the conditions set forth in Sections 10.3(e) or 10.3(f) hereof,
then the Outside Date shall be extended until the second Business Day
following the satisfaction (or waiver) of
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the conditions in such Sections 10.3(e) and 10.3(f), (y) in the event
that the Mailing Date is delayed pursuant to Section 7.3(d) hereof, the
Outside Date shall be extended automatically and without any further
action by any party hereto by the number of days following the delivery
of a Notice of Non-Mailing that the Mailing Date was delayed; and (z)
in the event that (A) the Mailing Date (as such date may have been
extended pursuant to the provisions of clause (y) above) has occurred
by the Outside Date, (B) the Requisite Stockholder Approval has not
been obtained by the Outside Date, (C) all of the conditions specified
in Article X hereof (other than the conditions set forth in Sections
10.3(e) and 10.3(f) hereof) shall have been satisfied (or waived), or,
in the case of conditions which by their terms are required to be
satisfied substantially concurrently with the Closing, are capable of
being satisfied at such time and (D) either (x) a duly held meeting of
the GM stockholders at which a vote was taken has not been held or (y)
in the case of a consent solicitation, the sixty (60) day period from
the earliest dated consent delivered in the manner required by Section
228 of the DGCL has not yet expired, then the Outside Date shall be
extended automatically and without any further action by any party
hereto until the second Business Day following such time as the events
specified in either clause (x) or (y) of clause (D) hereof shall have
occurred; provided, however, that no extension pursuant to clause (x),
(y) or (z) of this Section 3.2(b)(i) shall extend the Outside Date
beyond July 9, 2004.
(ii) (A) the FCC shall have denied any FCC Consent
Application, or shall have designated any FCC Consent Application for
hearing, excepting any denials or designations with respect to Xxxxxx
FCC Licenses that are immaterial to the assets or business of Xxxxxx
and its Subsidiaries taken as a whole; or (B) five (5) Business Days
shall have elapsed following such time as any permanent injunction or
other similar order of a court of competent jurisdiction or other
competent Governmental Authority, in each case located in the United
States, (other than the FCC) preventing the consummation of the
Transactions shall have been entered (so long as such permanent
injunction or similar order is still in effect at the expiration of
such five (5) Business Day period), regardless of whether such order is
appealable or has been appealed and, prior to such termination, the
parties shall have used reasonable best efforts to resist, resolve or
lift, as applicable, such injunction or other similar order; or
(iii) provided that there shall have occurred either a duly
held meeting of the GM common stockholders (including any adjournment
or postponement thereof) at which a vote was taken or a solicitation of
the written consent was made, of the GM common stockholders in
accordance with the Delaware General Corporation Law (as amended from
time to time, the "DGCL"), the Requisite Vote Matters fail to receive
the Requisite Stockholder Approval either by reason of a negative vote
of the GM common stockholders or by reason of a Consent Solicitation
Failure. For the purposes of this Agreement, a "Consent Solicitation
Failure" means the failure to receive the Requisite Stockholder
Approval of the Requisite Vote Matters because written consents (or
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proxies for written consents) signed by holders of a sufficient number
of shares of GM common stock were not obtained within sixty (60) days
of the earliest dated consent delivered in the manner required by
Section 228 of the DGCL, unless such failure to receive such written
consents shall have resulted from GM's abandonment of the consent
solicitation; provided, that (x) GM shall have delivered to the
Purchaser a Confirmation concurrently with such abandonment and (y) the
right of termination provided under this clause (iii) shall be
reinstated if GM shall fail to recommence the consent solicitation as
promptly as practicable after such abandonment.
(c) by GM if:
(i) a breach by the Purchaser of any representation,
warranty, covenant or agreement contained in this Agreement shall have
occurred, which breach, in the aggregate with all other such breaches,
if any, would give rise to a failure of the conditions set forth in
Section 10.3(a), (b) or (c) hereof and cannot be cured by the Outside
Date (except that, for purposes of this Section 3.2(c)(i), the phrase
"and would not reasonably be expected to result in" contained in
Section 10.3(a) shall be deemed to have been omitted from such
determination);
(ii) GM shall have delivered to the Purchaser a
Notice of Non-Recommendation pursuant to Section 7.2(b) hereof; or
(iii) GM shall propose to enter into a definitive
agreement providing for a Competing Transaction that constitutes a
Superior Proposal after having complied with the provisions of Section
9.6 hereof and, concurrently with a termination pursuant to this
Section 3.2(c)(iii), shall pay the GM Termination Fee owed pursuant to
Section 3.4(a) hereof.
(d) by the Purchaser if:
(i) a breach by GM or Xxxxxx of any representation,
warranty, covenant or agreement contained in this Agreement shall have
occurred, which breach, in the aggregate with all other such breaches,
if any, would give rise to a failure of the conditions set forth in
Section 10.2(a) or Section 10.2(b) hereof and cannot be cured by the
Outside Date (except that, for purposes of this Section 3.2(d)(i), the
phrase "and would not reasonably be expected to result in" contained in
Section 10.2(a) shall be deemed to have been omitted from such
determination);
(ii) GM shall have delivered to the Purchaser a
Notice of Non-Recommendation pursuant to Section 7.2(b) hereof
(including by reason of GM having failed to provide a Confirmation to
the Purchaser within the applicable Confirmation Period pursuant to
Section 7.2(d) hereof);
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(iii) either GM or Xxxxxx shall have entered into any
agreement or arrangement (other than a confidentiality agreement)
regarding, or the Board of Directors of GM or Xxxxxx or any committee
of the Board of Directors of GM or Xxxxxx shall approve or recommend,
any Competing Transaction; or
(iv) a Xxxxxx Material Adverse Effect shall have occurred
and be continuing at the time of termination and cannot be cured by the
Outside Date; provided, however, that any and all actions taken
pursuant to Section 9.4 and the effects thereof on the representations
and warranties of Xxxxxx in Article V shall be ignored for the purposes
of this Section 3.2(d)(iv).
(e) automatically and without any further action by the parties
if (1) the 20-Day Average Purchaser Stock Price (measured as of the date of
determination rather than the Closing Date) is less than $14.08 at any time
between the date hereof and the Closing Date, and (2) during such time as the
events specified in clause (1) hereto shall have occurred and be continuing GM
shall have delivered to Purchaser written notice (the "Floor Price Termination
Notice") that it is terminating this Agreement as a result thereof and (3) at or
prior to 5:00 p.m. (New York time) on the seventh (7/th/) Business Day following
the delivery to Purchaser of the Floor Price Termination Notice, the Purchaser
shall not have delivered to GM a Top-Off Election Notice.
3.3 Notice of Termination; Effect of Termination. Any termination of
this Agreement pursuant to Section 3.2 hereof shall be effective immediately
upon the delivery of written notice by the terminating party to the other
parties hereto, except for termination under Section 3.2(e) which shall occur
automatically and without any further actions by any of the parties. In the
event of the termination of this Agreement pursuant to Section 3.2 hereof, this
Agreement shall be of no further force or effect, except (i) as set forth in
this Section 3.3, Section 3.4, Section 9.10, Section 12.2(a) and Article XIV
hereof, each of which shall survive the termination of this Agreement without
limitation, and (ii) nothing herein shall relieve any party from liability for
any breach of this Agreement or invalidate the provisions of the Confidentiality
Agreement.
3.4 Fees and Expenses upon Termination.
(a) If this Agreement is terminated:
(i) by the Purchaser or GM pursuant to Section 3.2(b)(i), and
at or prior to such time the GM stockholders have not voted on the GM
Transactions and GM has delivered a Notice of Non-Recommendation and
either (x) (1) at or prior to the time of such delivery of a Notice of
Non-Recommendation, a Competing Transaction involving Xxxxxx (other
than a distribution of the capital stock of Xxxxxx to stockholders of
GM in a transaction not in connection with a combination of the Xxxxxx
business with the business of another unaffiliated Person) shall have
been commenced, publicly disclosed or
8
communicated to the Board of Directors of GM or Xxxxxx and not
abandoned, and (2) within twelve (12) months of any such termination,
GM or Xxxxxx enters into a definitive agreement regarding a Competing
Transaction with the Person who made such Competing Transaction
proposal, or one of its affiliates, or (y) within twelve (12) months of
any such termination, a Spin-Off Distribution (as defined herein) shall
have been either publicly announced by GM or consummated, then, in each
case, GM shall pay to the Purchaser, in cash by wire transfer in
immediately available funds to an account designated by the Purchaser,
on the same day as the execution of a definitive agreement with respect
to the referenced Competing Transaction or the announcement or
consummation of a Spin-Off Distribution, as applicable, a termination
fee and expense reimbursement in an aggregate amount equal to
$300,000,000.00 (Three Hundred Million Dollars) (the "GM Termination
Fee");
(ii) by the Purchaser or GM pursuant to Section 3.2(b)(iii),
and (x) at or prior to the time this Agreement is terminable by either
party pursuant to Section 3.2(b)(iii), a Competing Transaction
involving Xxxxxx (other than a distribution of the capital stock of
Xxxxxx to stockholders of GM in a transaction not in connection with a
combination of the Xxxxxx business with the business of another
unaffiliated Person) shall have been publicly disclosed or reported in
the press and not abandoned, (y) the Board of Directors of GM shall
have recommended against such Competing Transaction and shall have
continued to recommend the Transactions, and (z) within twelve (12)
months of any such termination, GM or Xxxxxx enters into a definitive
agreement (other than a confidentiality agreement) regarding a
Competing Transaction with the Person who made such Competing
Transaction proposal, or one of its affiliates, then GM shall pay to
the Purchaser the GM Termination Fee, in cash by wire transfer in
immediately available funds to an account designated by the Purchaser,
on the same day as the execution of a definitive agreement with respect
to the referenced Competing Transaction;
(iii) by GM pursuant to Section 3.2(c)(ii), then GM shall pay
to the Purchaser, in cash by wire transfer in immediately available
funds to an account designated by the Purchaser, on the same day as
such termination, a termination fee and expense reimbursement in an
aggregate amount equal to $150,000,000.00 (One Hundred Fifty Million
Dollars) (the "Non-Recommendation Fee"); provided, however, that if
within twelve (12) months of any such termination, either (x) GM or
Xxxxxx enters into a definitive agreement (other than a confidentiality
agreement) regarding a Competing Transaction with a Person who had
proposed a Competing Transaction to GM or Xxxxxx after the date hereof
and on or prior to the 75/th/ calendar day following the date of
termination of this Agreement, or (y) a Spin-Off Distribution shall
have been publicly announced by GM or consummated, then, in each case,
GM shall pay to the Purchaser, in cash by wire transfer in immediately
available funds to an account designated by the Purchaser, on the same
day as the execution of a
9
definitive agreement with respect to the referenced Competing
Transaction or the announcement or consummation of a Spin-Off
Distribution, as applicable, an additional termination fee and expense
reimbursement in an amount equal to $150,000,000.00 (One Hundred Fifty
Million Dollars) (the "Additional Non-Recommendation Fee");
(iv) by GM pursuant to Section 3.2(c)(iii), then GM shall
pay to the Purchaser the GM Termination Fee, in cash by wire transfer
in immediately available funds to an account designated by the
Purchaser, concurrently with such termination;
(v) by the Purchaser pursuant to Section 3.2(d)(ii), then
GM shall pay to the Purchaser the Non-Recommendation Fee, in cash by
wire transfer in immediately available funds to an account designated
by the Purchaser, no later than one (1) Business Day following such
termination; provided, however, that if within twelve (12) months of
any such termination, either (x) GM or Xxxxxx enters into a definitive
agreement (other than a confidentiality agreement) regarding a
Competing Transaction with a Person who had proposed a Competing
Transaction to GM or Xxxxxx after the date hereof and on or prior to
the 75/th/ calendar day following the date of termination of this
Agreement, or (y) a Spin-Off Distribution shall have been publicly
announced by GM or consummated, then, in each case, GM shall pay to the
Purchaser the Additional Non-Recommendation Fee, in cash by wire
transfer in immediately available funds to an account designated by the
Purchaser, on the same day as the execution of a definitive agreement
with respect to the referenced Competing Transaction or the
announcement or consummation of a Spin-Off Distribution, as applicable;
(vi) by the Purchaser pursuant to Section 3.2(d)(iii), then
GM shall pay to the Purchaser the GM Termination Fee, in cash by wire
transfer in immediately available funds to an account designated by the
Purchaser, no later than one (1) Business Day following such
termination; or
(vii) automatically pursuant to Section 3.2(e), then the
Purchaser shall pay to GM, in cash by wire transfer in immediately
available funds to an account designated by GM, no later than one (1)
Business Day following such termination, a termination fee and expense
reimbursement in an aggregate amount equal to $150,000,000.00 (One
Hundred Fifty Million Dollars).
(b) The parties hereto agree that the provisions contained in
this Section 3.4 are an integral part of the transactions contemplated
by this Agreement, that the damages resulting from the termination of
this Agreement as set forth in Section 3.4(a) of this Agreement are
uncertain and incapable of accurate calculation and that the amounts
payable pursuant to Section 3.4(a) hereof are reasonable forecasts of
the actual damages which may be incurred by the parties under such
circumstances. The amounts payable pursuant to Section 3.4(a) hereof
constitute liquidated damages and not a penalty and shall be the sole
monetary remedy in the event of termination of this
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Agreement on the bases specified in Section 3.2 hereof. If either GM or the
Purchaser, as applicable, fails to pay the other party any amounts due under
Section 3.4(a) in accordance with the terms hereof, such party shall pay the
costs and expenses (including reasonable outside legal fees and expenses) of the
other party in connection with any action, including the filing of any lawsuit
or other legal action, taken to collect payment. The parties acknowledge that in
no event shall GM be responsible for paying the GM Termination Fee, the
Non-Recommendation Fee or the Additional Non-Recommendation Fee more than once
nor shall GM be responsible for paying both (i) the GM Termination Fee and (ii)
the Non-Recommendation Fee and, if applicable, the Additional Non-Recommendation
Fee.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF GM
GM hereby represents and warrants to the Purchaser as follows, except as
specifically described in GM's annual report on Form 10-K for the fiscal year
ended December 31, 0000 (xxx "XX 10-K") and all other reports, filings,
registration statements and other documents (collectively with the GM 10-K, the
"GM SEC Documents") filed by GM with the SEC after December 31, 2002 and prior
to the date hereof (as such documents have been amended since the time of their
filing and prior to the date hereof), all of which are of public record (it
being understood that the representations and warranties of GM set forth in this
Article IV shall not be qualified by any risk factor disclosure in the GM SEC
Documents).
4.1 Organization and Good Standing. GM is a corporation validly existing
and in good standing under the laws of the State of Delaware with all corporate
power to carry on its business as now conducted. GM is duly qualified to do
business and is in good standing (to the extent that such concepts or equivalent
concepts are recognized in such jurisdictions) in each jurisdiction in which the
nature of the business conducted by it or the property it owns, leases or
operates makes such qualification necessary, except where the failure to be so
qualified or in good standing in such jurisdiction would not reasonably be
expected to have a material adverse impact on GM's ability to consummate the
transactions contemplated by the GM Transaction Agreements.
4.2 Corporate Power and Authority. GM has (or will have prior to execution
thereof) all requisite corporate power and authority to enter into the GM
Transaction Agreements and to consummate the transactions contemplated thereby.
The execution and delivery of the GM Transaction Agreements by GM, and, subject
to the recommendation of the GM Board of Directors in accordance with the
provisions of Section 7.2 hereof and receipt of the Requisite Stockholder
Approval of the Requisite Vote Matters, the consummation of the transactions
contemplated by the GM Transaction Agreements to be effected by GM have been (or
will be prior to execution and delivery thereof) duly authorized by all
necessary corporate action on the part of GM. Each of the GM Transaction
Agreements has been (or will be) duly executed and delivered by GM and, assuming
the due authorization, execution and delivery by the other parties
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thereto, constitutes (or will constitute when executed) the legal, valid and
binding obligation of GM, enforceable against GM in accordance with its terms,
except as enforceability may be limited by bankruptcy, similar laws of debtor
relief and general principles of equity.
4.3 Conflicts, Consents and Approvals. Except as set forth in Section 4.3
of the disclosure schedule delivered by GM to the Purchaser and dated as of the
date of this Agreement (the "GM Disclosure Schedule"), the execution and
delivery by GM of the GM Transaction Agreements and the consummation of the
transactions contemplated by the GM Transaction Agreements will not:
(a) violate any provision of GM's Certificate of Incorporation (after
giving effect to the GM Charter Amendment), GM's by-laws or the GM Board Policy
Statement;
(b) violate, conflict with, or result in a breach of any provision of,
or constitute a default (or an event which, with the giving of notice, the
passage of time or both, would constitute a default) under, require the consent
of any party under, or entitle any party (with the giving of notice, the passage
of time or both) to terminate, accelerate, modify or call a default under, or
result in the creation of any Encumbrance (other than a Permitted Encumbrance)
upon any of the properties or assets of GM or any of its Significant
Subsidiaries (other than Xxxxxx and its Subsidiaries) under, any of the terms,
conditions or provisions of any note, bond, mortgage, indenture, deed of trust,
intellectual property or other license, contract, undertaking, agreement, lease
or other instrument or obligation to which GM or any of its Significant
Subsidiaries (other than Xxxxxx and its Subsidiaries) is a party;
(c) violate any order, writ, injunction, decree, statute, rule or
regulation applicable to GM or any of its Significant Subsidiaries (other than
Xxxxxx and its Subsidiaries); or
(d) except as contemplated by the GM Transaction Agreements or the
Merger Agreement, require any consent or approval of, or registration or filing
by GM or any of its Affiliates (other than Xxxxxx and its Subsidiaries) with,
any third party or Governmental Authority, other than (i) authorization for
listing of the shares of Surviving Corporation Common Stock to be issued in
connection with the Split-Off and the Merger, as applicable, on the New York
Stock Exchange ("NYSE"), (ii) actions required by the HSR Act and the
competition laws of foreign jurisdictions, (iii) registrations or other actions
required under federal, state and foreign securities laws as are contemplated by
this Agreement or (iv) notifications to or applications for consent from
Governmental Authorities required with respect to the Xxxxxx Permits;
except in the case of (b), (c) and (d) for any of the foregoing that, in
the aggregate, would not reasonably be expected to have a material adverse
impact on GM's ability to consummate the transactions contemplated by the GM
Transaction Agreements.
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4.4 Ownership of Xxxxxx Capital Stock. As of the date of this Agreement and
through and until immediately prior to the Split-Off Effective Time (i.e., not
giving effect to the Xxxxxx Common Stock Exchange), each outstanding share of
Xxxxxx capital stock is and shall be owned directly by GM, free and clear of all
Encumbrances.
4.5 Capitalization; Class H Fraction.
(a) As of the date of this Agreement: GM's authorized capital stock
consists of 2,000,000,000 shares of GM $1-2/3 Common Stock; 3,600,000,000 shares
of GM Class H Common Stock; 6,000,000 shares, no par value per share, of
Preferred Stock ("GM Preferred Stock"); and 100,000,000 shares, $0.10 par value
per share, of Preference Stock ("GM Preference Stock"). As of April 7, 2003:
1,107,518,293 shares of GM Class H Common Stock were issued and outstanding,
1,444,030 shares of GM Class H Common Stock were held by GM as treasury shares,
92,888,852 shares of GM Class H Common Stock were reserved for issuance upon
exercise of outstanding options, 1,928,644 shares of GM Class H Common Stock
were issuable with respect to awards under the Xxxxxx Long Term Achievement Plan
(the "LTAP") and 3,209,565 shares of GM Class H Common Stock were issuable with
respect to restricted stock or restricted stock units. Each outstanding share of
GM Class H Common Stock is duly authorized and validly issued, fully paid and
nonassessable and has not been issued in violation of any preemptive or similar
rights. GM has no authorized or outstanding bonds, debentures, notes or other
obligations or securities, the holders of which have the right to vote with the
stockholders of GM on any matter.
(b) Other than as set forth in Section 4.5(b) of the GM Disclosure
Schedule, there are no outstanding subscriptions, options, warrants, puts,
calls, agreements, understandings, claims or other commitments or rights of any
type relating to the issuance, sale or transfer of any GM Class H Common Stock,
nor are there outstanding any securities which are convertible into or
exchangeable for any shares of GM Class H Common Stock and, except as expressly
provided by the GM Transaction Agreements, GM has no obligation of any kind to
issue any additional shares of GM Class H Common Stock or to pay for shares of
GM Class H Common Stock. The issuance and sale of all of the shares of capital
stock described in this Section 4.5, including the GM Class H Common Stock, have
been in compliance with federal and state securities laws. Section 4.5(b) of the
GM Disclosure Schedule accurately sets forth, as of the date indicated, the
number of shares of GM Class H Common Stock issuable upon exercise of options to
purchase shares of GM Class H Common Stock, and the exercise prices with respect
thereto, along with a list of the options to purchase shares of GM Class H
Common Stock held by each corporate officer of GM and Xxxxxx. Other than (i) the
First Amended and Restated Registration Rights Agreement, dated as of March 12,
2003, by and among GM, U.S. Trust Company of New York ("U.S. Trust"), as Trustee
of the GM Special Salaried Employees Pension Trust established under the GM
Retirement Program for Salaried Employees (the "GM Salaried Pension Plan"), U.S.
Trust, as Trustee of the GM Special Hourly Employees Pension Trust established
under the GM Hourly-Rate Employees Pension Plan (the "GM Hourly Pension Plan"),
and U.S.
13
Trust, as Trustee of the Sub-Trust of the GM Welfare Benefit Trust established
under the GM Welfare Benefit Trust, a voluntary employees' beneficiary
association trust established to fund certain collectively bargained hourly
retiree health care benefits under the GM Health Care Program for Hourly
Employees and certain collectively bargained hourly retiree life insurance
benefits under the GM Life and Disability Benefits Program for Hourly Employees
and such benefits under other applicable collectively bargained welfare plans
(the "VEBA" and, together with the GM Salaried Pension Plan and the GM Hourly
Pension Plan, the "GM Employee Benefit Plans") (collectively, the "Current GM
Employee Benefit Plans Registration Rights Agreement") and the First Amended and
Restated Transfer Agreement (the "GM Employee Benefit Plans Transfer
Agreement"), dated March 12, 2003, between GM and U.S. Trust, as trustee for the
GM Salaried Pension Plan, the GM Hourly Pension Plan and the VEBA and all side
letters and other agreements and arrangements related thereto and to the Current
GM Employee Benefit Plans Registration Rights Agreement, and (ii) the
Registration Rights Agreement, dated as of April 28, 1999, between GM and
PRIMESTAR, Inc., and certain related agreements and arrangements relating
thereto (collectively, the "PRIMESTAR Registration Rights Agreement"), neither
GM nor any GM Affiliate has entered into or agreed to enter into any contract,
agreement or understanding (other than such other contracts, agreements or
understandings contemplated by this Agreement, the Merger Agreement or the
Separation Agreement) that would require registration of any shares of GM Class
H Common Stock under the Securities Act or under any state securities law or
granted registration rights with respect to any shares of GM Class H Common
Stock to any Person.
(c) As of April 3, 2003, the numerator of the Class H Fraction was
1,107,518,293 and the denominator of the Class H Fraction was 1,381,891,609, in
each case as determined as of such point in time rather than as an average with
respect to any accounting period.
4.6 Ownership and Transfer of Shares. At the Closing, GM will be the record
and beneficial owner of the Shares, free and clear of any and all Encumbrances.
Such Shares, when sold to the Purchaser, will have been validly issued, fully
paid, non-assessable, free of all Encumbrances, and will not be subject to any
registration rights, preemptive rights or any restriction on the voting or
transfer thereof other than restrictions imposed by federal, state or foreign
securities laws. At the Closing, GM will convey to the Purchaser good and
marketable title to the Shares, free and clear of any and all Encumbrances.
Assuming the accuracy of the representation and warranty set forth in Section
6.8 hereof, such conveyance shall not require registration under the Securities
Act or any state or foreign securities laws.
4.7 Litigation. Except as set forth on Section 4.7 of the GM Disclosure
Schedule, there is no Action pending or, to the knowledge of GM, threatened
against GM or any of its Significant Subsidiaries (other than Xxxxxx and its
Subsidiaries) or its or their properties which would reasonably be expected to
have a material adverse impact on GM's ability to consummate the transactions
contemplated by the GM Transaction Agreements.
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4.8 Brokerage and Finder's Fees; Opinions of Financial Advisors.
(a) Except for the GM Financial Advisors and the Xxxxxx Financial
Advisors, neither GM nor any of its Affiliates (other than Xxxxxx and its
Subsidiaries), stockholders, directors, officers or employees has incurred or
will incur on behalf of GM or any of its Affiliates (other than Xxxxxx and its
Subsidiaries), any brokerage, finder's or similar fee in connection with the
transactions contemplated by the GM Transaction Agreements.
(b) The Board of Directors of GM has received the GM Financial Advisor
Fairness Opinions and the Xxxxxx Financial Advisor Fairness Opinions. GM has
heretofore provided, or will provide, a copy of such opinions to the Purchaser
for informational purposes only, and the Purchaser acknowledges that it has no
right to rely on such opinions. As of the date of this Agreement, such opinions
have not been withdrawn, revoked or modified.
4.9 Information for Inclusion in the Proxy/Consent Solicitation Statement,
the Registration Statements and Other Filings. None of the information provided
by or on behalf of GM or any GM Affiliate (except to the extent it constitutes
information provided by or on behalf of Xxxxxx or any Xxxxxx Affiliate) for
inclusion in (i) the Proxy/Consent Solicitation Statement, at the date of
mailing and at the date of voting or consent and approval with respect thereto,
(ii) the Registration Statements, at the time they become effective and (iii)
any other Disclosure Document, at the date of such Disclosure Document, shall
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made, not
misleading. The information in the Proxy/Consent Solicitation Statement, the
Registration Statements and any other Disclosure Document provided by or on
behalf of GM or any GM Affiliate (except to the extent it constitutes
information provided by or on behalf of Xxxxxx or any Xxxxxx Affiliate) will
comply as to form in all material respects with the provisions of the Securities
Act and the Exchange Act, as applicable. No representation or warranty is made
by GM in this Section 4.9 with respect to statements made or incorporated by
reference therein based on information provided by or on behalf of Xxxxxx or any
Xxxxxx Affiliate or the Purchaser or any Purchaser Affiliate for inclusion in
the Proxy/Consent Solicitation Statement, the Registration Statements or any
other Disclosure Document. For the purposes of this Agreement, "Registration
Statements" means, collectively, the registration statements, as amended from
time to time, relating to the Xxxxxx Common Stock to be distributed pursuant to
the Split-Off, and the Surviving Corporation Common Stock and the Purchaser
Stock to be issued pursuant to the Merger, including any prospectus relating to
the Xxxxxx Common Stock, the Surviving Corporation Common Stock and the
Purchaser Stock as the case may be, each as amended and supplemented from time
to time, and including the Proxy/Consent Solicitation Statement.
15
4.10 Tax Representations. GM currently believes that it will be able
to make any representation, warranty or covenant which is reasonably likely to
be requested by the IRS in connection with the Ruling Request.
4.11 Requisite Approvals.
(a) The affirmative votes of the holders of each of (i)
a majority of the voting power of all outstanding shares of GM $1-2/3 Common
Stock and GM Class H Common Stock, voting together as a single class based on
their respective per share voting power pursuant to the provisions set forth in
the GM Certificate of Incorporation, as amended, (ii) a majority of the
outstanding shares of GM $1-2/3 Common Stock, voting as a separate class, and
(iii) a majority of the outstanding shares of GM Class H Common Stock, voting as
a separate class (collectively, the "Requisite Stockholder Approval"), are the
only votes of the holders of any class or series of GM capital stock that will
be obtained or are necessary in order to approve the Requisite Vote Matters.
(b) At a stockholder meeting held immediately after the approval
of the Merger Agreement by the Xxxxxx Board of Directors and the execution of
the Merger Agreement, GM shall, in its capacity as the sole stockholder of
Xxxxxx, adopt and approve the Merger Agreement (and the execution, delivery and
performance thereof) and the transactions contemplated by the Xxxxxx Transaction
Agreements.
4.12 Agreement with GM Employee Benefit Plans. Pursuant to the GM
Employee Benefit Plans Transfer Agreement, the GM Employee Benefit Plans have
(A) agreed that the GM Employee Benefit Plans will not transfer or otherwise
dispose or enter into an agreement, understanding or arrangement or any
substantial negotiations with respect to any transfer or disposition, of any GM
Class H Common Stock, Xxxxxx Common Stock or Surviving Corporation Common Stock
or any successor security prior to one (1) year following the Split-Off
Effective Time; provided, that if there is an agreement, understanding,
arrangement or negotiation regarding such a transfer or disposition within such
one (1) year period, then the GM Employee Benefit Plans will not be permitted to
transfer any such shares prior to the later to occur of (i) the date which is
two (2) years after the Split-Off Effective Time, and (ii) the date which is six
(6) months after the date such agreement, understanding, arrangement or
negotiation is consummated or terminated, as the case may be and (B) provided
all consents and approvals required by them (other than any approval by them in
their capacity as stockholders of GM) in order to consummate the Transactions.
GM has provided a copy of the GM Employee Benefit Plans Transfer Agreement to
the Purchaser.
4.13 Investment Intention. To the extent applicable, GM is acquiring
the Purchaser Stock for its own account, for investment purposes only and not
with a view to a distribution (as such term is used in Section 2(11) of the
Securities Act) thereof. GM understands that the Purchaser Stock to be issued
pursuant to the Stock Sale has not been registered under the Securities Act and
cannot be sold unless subsequently registered under the Securities Act or an
exemption from such registration is available.
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4.14 Limitation on Warranties. EXCEPT AS EXPRESSLY SET FORTH IN THIS
AGREEMENT, GM MAKES NO REPRESENTATION OR WARRANTY TO THE PURCHASER, EXPRESS OR
IMPLIED, AT LAW OR IN EQUITY, WITH RESPECT TO THE SHARES, GM, XXXXXX OR ANY
SUBSIDIARY OF XXXXXX, INCLUDING WITH RESPECT TO MERCHANTABILITY OR FITNESS FOR
ANY PARTICULAR PURPOSE. ALL REPRESENTATIONS OR WARRANTIES NOT EXPRESSLY SET
FORTH IN THIS AGREEMENT ARE HEREBY DISCLAIMED, AND THE PURCHASER ACKNOWLEDGES
THAT IT IS NOT RELYING ON ANY REPRESENTATION OR WARRANTY OF GM NOT EXPRESSLY SET
FORTH IN THIS AGREEMENT.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF XXXXXX
Xxxxxx hereby represents and warrants to the Purchaser as follows,
except as specifically described in (a) Xxxxxx' annual report on Form 10-K for
the fiscal year ended December 31, 2002 (the "Xxxxxx 10-K") and all other
reports, filings, registration statements and other documents (collectively with
the Xxxxxx 10-K, the "Xxxxxx SEC Documents") filed by Xxxxxx with the SEC after
December 31, 2002 and prior to the date hereof (as such documents have been
amended since the time of their filing and prior to the date hereof) and (b)
PanAmSat's annual report on Form 10-K for the fiscal year ended December 31,
2002 (the "PanAmSat 10-K") and all other reports, filings, registration
statements and other documents (collectively with the PanAmSat 10-K, the
"PanAmSat SEC Documents") filed by PanAmSat with the SEC after December 31, 2002
and prior to the date hereof (as such documents have been amended since the time
of their filing and prior to the date hereof), all of which are of public record
(it being understood that the representations and warranties of Xxxxxx set forth
in this Article V shall not be qualified by any risk factor disclosure in the
Xxxxxx SEC Documents or the PanAmSat SEC Documents).
5.1 Organization and Good Standing. Each of Xxxxxx and Xxxxxx'
Significant Subsidiaries is a corporation or limited liability company validly
existing and in good standing under the laws of the State of Delaware, with
respect to Xxxxxx, and (to the extent such concepts or equivalent concepts are
recognized in such jurisdictions) under the laws of its state or other
jurisdiction of incorporation or organization, with respect to Xxxxxx'
Significant Subsidiaries, in each case, with all corporate (and other) power to
carry on its business as now conducted. Each of Xxxxxx and Xxxxxx' Subsidiaries
is duly qualified to do business and is in good standing (to the extent that
such concepts or equivalent concepts are recognized in such jurisdictions) in
each jurisdiction in which the nature of the business conducted by it or the
property it owns, leases or operates makes such qualification necessary, except
where the failure to be so qualified or in good standing in such jurisdiction
has not had and would not reasonably be expected to have a Xxxxxx Material
Adverse Effect or have a material adverse impact on Xxxxxx' ability to
consummate the transactions contemplated by the Xxxxxx Transaction Agreements.
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5.2 Subsidiaries. Section 5.2 of the disclosure schedule delivered by
Xxxxxx to the Purchaser and dated as of the date hereof (the "Xxxxxx Disclosure
Schedule") sets forth a list of all of the Subsidiaries of Xxxxxx. Xxxxxx does
not own, directly or indirectly, any equity or other ownership interest in any
Person, except as set forth in Section 5.2 of the Xxxxxx Disclosure Schedule.
Except as set forth in Section 5.2 of the Xxxxxx Disclosure Schedule, Xxxxxx is
not subject to any obligation or requirement to provide funds to or make any
investment (in the form of a loan, capital contribution or otherwise) in any
such entity. Except as set forth in Section 5.2 of the Xxxxxx Disclosure
Schedule, each of the outstanding shares of capital stock or other ownership
interests of each of Xxxxxx' Subsidiaries is duly authorized, validly issued,
fully paid and nonassessable, and is owned, directly or indirectly, by Xxxxxx
free and clear of all Encumbrances and no such shares or other ownership
interests have been issued in violation of any preemptive or similar rights.
Other than as set forth in Section 5.2 of the Xxxxxx Disclosure Schedule, there
are no outstanding subscriptions, options, warrants, puts, calls, agreements,
understandings, claims or other commitments or rights of any type relating to
the issuance, sale, transfer or voting of any securities of any Subsidiary of
Xxxxxx, nor are there outstanding any securities which are convertible into or
exchangeable for any shares of capital stock or membership interests of any
Subsidiary of Xxxxxx; and no Subsidiary of Xxxxxx has any obligation of any kind
to issue any additional securities or to pay for securities of Xxxxxx or any
Subsidiary of Xxxxxx or any predecessor of any of the foregoing.
5.3 Corporate Power and Authority. Xxxxxx has (or will have prior to
execution thereof) all requisite corporate power and authority to enter into the
Xxxxxx Transaction Agreements and to consummate the transactions contemplated
thereby. The execution and delivery of each of the Xxxxxx Transaction Agreements
by Xxxxxx and the consummation of the transactions contemplated thereby to be
effected by Xxxxxx have been (or will be prior to execution and delivery
thereof) duly authorized by all necessary corporate action on the part of
Xxxxxx. Each of the Xxxxxx Transaction Agreements has been (or will be) duly
executed and delivered by Xxxxxx and, assuming the due authorization, execution
and delivery by the other parties thereto, constitutes (or will constitute when
executed) the legal, valid and binding obligation of Xxxxxx, enforceable against
Xxxxxx in accordance with its terms, except as enforceability may be limited by
bankruptcy, similar laws of debtor relief and general principles of equity.
5.4 Capitalization.
(a) As of the date of this Agreement, Xxxxxx' authorized capital
stock consists of (i) 2,500,000,000 shares of Xxxxxx Common Stock, (ii)
2,500,000,000 shares of Xxxxxx Class B Common Stock and (iii) 9,000,000 shares
of Preferred Stock, par value $0.10 per share. As of the date hereof, (i)
1,395,127,000 shares of Xxxxxx Common Stock were issued and outstanding, (ii)
86,764,553 shares of Xxxxxx Class B Common Stock were issued and outstanding and
(iii) no shares of Xxxxxx Common Stock or Xxxxxx Class B Common Stock were held
by Xxxxxx as treasury shares.
18
(b) Each outstanding share of Xxxxxx capital stock is duly
authorized and validly issued, fully paid and nonassessable, and has not been
issued in violation of any preemptive or similar rights. Each outstanding share
of Xxxxxx capital stock is owned by GM. Xxxxxx has no authorized or outstanding
bonds, debentures, notes or other obligations or securities, the holders of
which have (or upon the occurrence of certain specified events would have) the
right to vote with the stockholders of Xxxxxx on any matter.
(c) Other than as contemplated by the Xxxxxx Transaction
Agreements or as set forth in Section 5.4(c) of the Xxxxxx Disclosure Schedule,
(i) there are no outstanding subscriptions, options, warrants, puts, calls,
agreements, understandings, claims or other commitments or rights of any type
relating to the issuance, sale or transfer of any securities of Xxxxxx, nor are
there outstanding any securities which are convertible into or exchangeable for
any shares of capital stock of Xxxxxx and (ii) Xxxxxx has no obligation of any
kind to issue any additional securities or to pay for securities of Xxxxxx or
any predecessor or affiliate. The issuance and sale of all of the shares of
capital stock described in this Section 5.4 have been in compliance with federal
and state securities laws. Section 5.4(c) of the Xxxxxx Disclosure Schedule
accurately sets forth the number of shares of GM Class H Common Stock issuable
upon exercise of options to purchase shares of GM Class H Common Stock as of the
date hereof, and the exercise prices with respect thereto, along with a list of
the options to purchase shares of GM Class H Common Stock held by each corporate
officer of Xxxxxx and any of its Subsidiaries. Except as set forth in Section
5.4(c) of the Xxxxxx Disclosure Schedule or as contemplated by the Separation
Agreement, Xxxxxx has not agreed to register any securities under the Securities
Act or under any state securities law or granted registration rights with
respect to any securities of Xxxxxx to any Person.
(d) Section 5.4(d) of the Xxxxxx Disclosure Schedule sets forth,
as of the date hereof, a list and description of all dividends and distributions
declared or issued by Xxxxxx and each of its Subsidiaries since January 1, 2002.
5.5 Conflicts, Consents and Approvals. Except as set forth in Section
5.5 of the Xxxxxx Disclosure Schedule, the execution and delivery of the Xxxxxx
Transaction Agreements by Xxxxxx and GM and the consummation of the transactions
contemplated thereby will not:
(a) violate any provision of the certificate of incorporation (in
the case of Xxxxxx, as the same may be amended by the Xxxxxx Charter Amendment
in accordance with this Agreement) or by-laws (in the case of Xxxxxx, as the
same may be amended by the Xxxxxx By-laws Amendment in accordance with this
Agreement) (or equivalent organizational documents) of Xxxxxx or any of its
Subsidiaries;
(b) violate, conflict with, or result in a breach of any
provision of, or constitute a default (or an event which, with the giving of
notice, the passage of time or both, would constitute a default) under, require
the consent of any party under, or entitle any party (with the giving of notice,
the passage of time or both) to terminate,
19
accelerate, modify or call a default under, or result in the creation of any
Encumbrance (other than a Permitted Encumbrance) upon any of the properties or
assets of Xxxxxx or any of its Subsidiaries under, any of the terms, conditions
or provisions of any note, bond, mortgage, indenture, deed of trust,
intellectual property or other license, contract, undertaking, agreement, lease
or other instrument or obligation to which Xxxxxx or any of its Subsidiaries is
a party;
(c) violate any order, writ, injunction, decree, statute, rule or
regulation applicable to Xxxxxx or any of its Subsidiaries; or
(d) except as contemplated by the Xxxxxx Transaction Agreements,
require any consent or approval of, or registration or filing by Xxxxxx or any
of its Affiliates with, any third party or Governmental Authority, other than
(i) authorization for listing on the NYSE of the shares of Surviving Corporation
Common Stock to be issued in connection with the Split-Off and the Merger, (ii)
actions required by the HSR Act and the competition laws of foreign
jurisdictions, (iii) registrations or other actions required under federal,
state and foreign securities laws as are contemplated by this Agreement, and
(iv) notifications to or applications for consent from Governmental Authorities
required with respect to the Xxxxxx Permits;
except in the case of (b), (c) and (d) for any of the foregoing that,
in the aggregate, (i) would not reasonably be expected to have a material
adverse impact on the ability of Xxxxxx to consummate the transactions
contemplated by the Xxxxxx Transaction Agreements and (ii) have not had and
would not reasonably be expected to have a Xxxxxx Material Adverse Effect.
5.6 Xxxxxx SEC Documents.
(a) Xxxxxx and each of its Significant Subsidiaries has timely
filed with the SEC all required reports, filings, registration statements and
other documents required to be filed by them with the SEC since January 1, 2002.
(b) As of its filing date, or as amended or supplemented prior to
the date hereof, each Xxxxxx SEC Document and each SEC Document of its
Significant Subsidiaries complied (and each Xxxxxx SEC Document filed after the
date of this Agreement will comply) as to form in all material respects with the
applicable requirements of the Exchange Act and the Securities Act.
(c) No Xxxxxx SEC Document nor any SEC Document of its
Significant Subsidiaries, as of its filing date, contained any untrue statement
of a material fact or omitted to state any material fact (and no Xxxxxx SEC
Document nor any SEC Document of its Significant Subsidiaries filed after the
date of this Agreement will contain any untrue statement of a material fact or
omit to state any material fact) necessary in order to make the statements made
therein, in the light of the circumstances under which they were made, not
misleading.
20
5.7 Financial Statements; Liabilities. (a) The audited financial
statements of Xxxxxx included in the Xxxxxx 10-K (including any related notes or
schedules) fairly present in all material respects (and the audited financial
statements and unaudited interim financial statements of Xxxxxx included in the
Xxxxxx SEC Documents filed after the date of this Agreement will fairly present
in all material respects), in accordance with GAAP (except as may be indicated
in the notes thereto), the consolidated financial position of Xxxxxx and its
consolidated Subsidiaries as of the dates thereof and its consolidated results
of operations and changes in financial position for the respective periods then
ended (subject to normal year-end adjustments and lack of footnote disclosure in
the case of any unaudited interim financial statements).
(b) The audited financial statements of PanAmSat included in the
PanAmSat 10-K (including any related notes or schedules) fairly present in all
material respects, in accordance with GAAP (except as may be indicated in the
notes thereto), the consolidated financial position of PanAmSat and its
consolidated Subsidiaries as of the dates thereof and its consolidated results
of operations and changes in financial position for the respective periods then
ended (subject to normal year-end adjustments and lack of footnote disclosure in
the case of any unaudited interim financial statements).
(c) Xxxxxx and its Subsidiaries have no liabilities or
obligations of any kind whatsoever, whether known or unknown, asserted or
unasserted, accrued, contingent, absolute, determined, determinable or
otherwise, in each case, other than:
(i) liabilities or obligations disclosed or provided for
in the consolidated balance sheet of Xxxxxx included in the Xxxxxx 10-K
or disclosed in the notes thereto or in the consolidated balance sheet of
PanAmSat included in the PanAmSat 10-K or disclosed in the notes thereto;
(ii) liabilities or obligations incurred since December 31,
2002 in the ordinary course of business;
(iii) liabilities or obligations under the Xxxxxx
Transaction Agreements or incurred in connection with the transactions
contemplated thereby;
(iv) liabilities or obligations of Xxxxxx or its
Subsidiaries under the agreements, contracts, leases, licenses to which
it is a party that would be required by GAAP to be reflected on or
reserved against on the balance sheet of Xxxxxx included in the Xxxxxx
10-K or of PanAmSat included in the PanAmSat 10-K and which are so
reflected or reserved against thereon;
(v) as set forth in Section 5.7 of the Xxxxxx Disclosure
Schedule; and
21
(vi) other liabilities or obligations which, in the
aggregate, have not had and would not reasonably be expected to have a
Xxxxxx Material Adverse Effect, or have a material adverse impact on the
ability of Xxxxxx to consummate the transactions contemplated by the
Xxxxxx Transaction Agreements.
5.8 Absence of Certain Changes. Except as set forth in Section 5.8 of
the Xxxxxx Disclosure Schedule and except as contemplated by the Xxxxxx
Transaction Agreements, since December 31, 2002, there has not been one or more
events, changes, circumstances or effects that, in the aggregate, have had or
would reasonably be expected to have (i) a Xxxxxx Material Adverse Effect or
(ii) a material adverse impact on the ability of Xxxxxx to consummate the
transactions contemplated by the Xxxxxx Transaction Agreements.
5.9 Compliance with Law. Except as set forth in Section 5.9 of the
Xxxxxx Disclosure Schedule, Xxxxxx and its Subsidiaries are in compliance with,
and at all times since January 1, 2002 have been in compliance with, all
Applicable Laws relating to them or their businesses or properties, except for
failures to be in compliance therewith that, in the aggregate, have not had and
would not reasonably be expected to have a Xxxxxx Material Adverse Effect or
have a material adverse impact on the ability of Xxxxxx to consummate the
transactions contemplated by the Xxxxxx Transaction Agreements.
5.10 Litigation. Except as set forth in Section 5.10 of the Xxxxxx
Disclosure Schedule, there is no Action pending or, to the Knowledge of Xxxxxx,
threatened against Xxxxxx or any of its Subsidiaries or its or their properties
(a) in respect of which, as of the date hereof, the adverse party is asserting
damages in excess of $25,000,000.00 (Twenty-Five Million Dollars), or (b) which
would reasonably be expected to have a material adverse impact on the ability of
Xxxxxx to consummate the transactions contemplated by the Xxxxxx Transaction
Agreements.
5.11 Taxes. Except as would not have a Xxxxxx Material Adverse Effect,
(i) each of Xxxxxx and its Subsidiaries has duly filed (or there have been filed
on their behalf) all federal and material state, local and foreign Tax Returns
(including those filed on a consolidated, combined or unitary basis) required to
have been filed by it prior to the date hereof (taking into account extensions)
and (ii) all of the foregoing Tax Returns, to the extent they relate to the
income, assets or business of Xxxxxx and its Subsidiaries, are true and correct
in all material respects, and Xxxxxx and its Subsidiaries have paid (or payment
has been made on its behalf), or adequately reserved for, all Taxes required to
be paid in respect of all periods covered by such Tax Returns.
5.12 Environmental and Safety Matters. Except as set forth in Section
5.12 of the Xxxxxx Disclosure Schedule, and except for any facts, conditions or
circumstances that, in the aggregate, have not had and would not reasonably be
expected to have a Xxxxxx Material Adverse Effect: (i) Xxxxxx and its
Subsidiaries are and have been in compliance with all applicable Environmental
and Safety Requirements; (ii) no
22
property currently or, to the Knowledge of Xxxxxx, formerly owned or operated by
Xxxxxx or any of its Subsidiaries has been contaminated with any substance that
would require investigation or remediation pursuant to any Environmental and
Safety Requirements; (iii) neither Xxxxxx nor any of its Subsidiaries is subject
to any liability for any waste disposal or contamination on any third party
property; (iv) neither Xxxxxx nor any of its Subsidiaries has received any
notice, demand, letter, claim or request for information indicating that it may
be in violation of, or subject to liability with respect to, any Environmental
and Safety Requirements; (v) neither Xxxxxx nor any of its Subsidiaries is
subject to any outstanding order, decree, injunction or other arrangement with
any Governmental Authority or any indemnity or other agreement with any other
party relating to any Environmental and Safety Requirements and for which Xxxxxx
or any of its Subsidiaries retains any liability or obligation; (vi) to the
Knowledge of Xxxxxx, there are no other circumstances or conditions involving
Xxxxxx or any of its Subsidiaries that would result in any claims against, or
liability, investigations or costs of, Xxxxxx or any of its Subsidiaries in
connection with any Environmental and Safety Requirements; and (vii) Xxxxxx has
made available to the Purchaser copies of all material environmental reports,
studies, assessments and sampling data relating to Xxxxxx and its Subsidiaries
or that relates to the current Xxxxxx business or for which indemnification does
not exist and which are in the possession, custody or control of Xxxxxx.
5.13 Employee Benefit Plans. All "employee benefit plans" within the
meaning of Section 3(3) of ERISA, and all employment, retention, change of
control agreements and all retirement, severance, disability, cafeteria (section
125), life insurance, health, deferred compensation, stock option, stock
purchase, stock appreciation rights, stock based, incentive and bonus plans,
contracts, policies or arrangements covering current or former employees or
directors of Xxxxxx and its Subsidiaries (the "Xxxxxx Plans") are listed in
Section 5.13 of the Xxxxxx Disclosure Schedule. Except as set forth in Section
5.13 of the Xxxxxx Disclosure Schedule, no Xxxxxx Plans cover, or provide
benefits to, employees of GM or its Subsidiaries (other than Xxxxxx and its
Subsidiaries). Except as set forth in Section 5.13 of the Xxxxxx Disclosure
Schedule, all Xxxxxx Plans are in compliance with, and have been administered
and operated in accordance with, the terms of such Xxxxxx Plans and Applicable
Law including ERISA and the Code, except for any failure to so comply, operate
or administer the Xxxxxx Plans that would not have a Xxxxxx Material Adverse
Effect. With respect to each Xxxxxx Plan, a complete and correct copy of the
most recent plan document or agreement, all related trust and funding documents,
and all amendments thereto; the most recent summary plan description, and all
related summaries of material modifications; and all actuarial and financial
reports for the last three plan years, where applicable, have been provided or
made available to the Purchaser. The Internal Revenue Service has issued a
determination letter to the effect that each such Xxxxxx Plan which is intended
to be "qualified" within the meaning of Section 401(a) or 501(c)(9) of the Code
is so qualified. Neither Xxxxxx nor any of its Subsidiaries has engaged in a
transaction with respect to any Xxxxxx Plan that, assuming the taxable period of
such transaction expired as of the date hereof, could subject Xxxxxx
23
or any of its Subsidiaries to a tax or penalty imposed by either Section 4975 of
the Code or Section 502(i) of ERISA, except for any tax or penalty which would
not have a Xxxxxx Material Adverse Effect. No liability under Subtitle C or D of
Title IV of ERISA has been or is expected to be incurred by Xxxxxx or any of its
Subsidiaries with respect to any ongoing, frozen or terminated "single-employer
plan", within the meaning of Section 4001(a)(15) of ERISA, currently or formerly
maintained by any of them, or the single-employer plan of any entity which is
considered one employer with Xxxxxx under Section 4001 of ERISA or Section 414
of the Code (a "Xxxxxx ERISA Affiliate"), except as set forth in Section 5.13 of
the Xxxxxx Disclosure Schedule or for any liability that would not have a Xxxxxx
Material Adverse Effect. Xxxxxx and its Subsidiaries have not incurred and do
not expect to incur any withdrawal liability with respect to a multiemployer
plan under Subtitle E of Title IV of ERISA (regardless of whether based on
contributions of a Xxxxxx ERISA Affiliate), except for any liability that would
not have a Xxxxxx Material Adverse Effect. Except as set forth in Section 5.13
of the Xxxxxx Disclosure Schedule no event which constitutes a "reportable
event" as defined in Section 4043 of ERISA has occurred with respect to any
Xxxxxx Plan subject to Title IV of ERISA which presents a material risk of the
termination or partial termination of any such Xxxxxx Plan or would result in a
Xxxxxx Material Adverse Effect. Except as set forth in Section 5.13 of the
Xxxxxx Disclosure Schedule, no audit, claim, action or litigation has been made,
commenced or, to the Knowledge of Xxxxxx, threatened with respect to any Xxxxxx
Plan that, if adversely determined, would have a Xxxxxx Material Adverse Effect.
Neither Xxxxxx nor any of its Subsidiaries has any obligations for continuing
coverage for retiree health and life benefits (other than as required under Part
6 of Title I of ERISA or other similar obligations under Applicable Law) under
any Xxxxxx Plan, except as listed in Section 5.13 of the Xxxxxx Disclosure
Schedule. Xxxxxx or its Subsidiaries may amend or terminate any such retiree
plan at any time without incurring any liability thereunder except for any
liability which would not have a Xxxxxx Material Adverse Effect or as set forth
in Section 5.13 of the Xxxxxx Disclosure Schedule. Except as set forth in
Section 5.13 of the Xxxxxx Disclosure Schedule, neither the execution of this
Agreement, stockholder approval of this Agreement nor the consummation of the
transactions contemplated hereby will (w) entitle any employee of Xxxxxx or any
of the Subsidiaries to severance pay or any increase in severance pay upon any
termination of employment after the date hereof, (x) accelerate the time of
payment or vesting or trigger any payment or funding (through a grantor trust or
otherwise) of compensation or benefits under, increase the amount payable or
trigger any other material obligation pursuant to the terms of, any of the
Xxxxxx Plans, (y) limit or restrict the right of Xxxxxx to merge, amend or
terminate any of the Xxxxxx Plans, or (z) cause Xxxxxx or any of its
Subsidiaries to record additional compensation expense on its income statement
with respect to any outstanding stock option or other equity-based award. Except
as set forth in Section 5.13 of the Xxxxxx Disclosure Schedule, neither Xxxxxx
nor any of its Subsidiaries has any labor unions, trade unions, or employee
associations. Neither Xxxxxx nor any of its Subsidiaries is a party to any
collective bargaining agreements or other agreements with any labor unions,
trade unions, or employee associations.
24
5.14 Intellectual Property.
(a) Xxxxxx and its Subsidiaries own or have a valid right to use
each item of Intellectual Property used or held for use by Xxxxxx or any of its
Subsidiaries, except for failures to own or have valid rights to use, that in
the aggregate, have not had, and would not reasonably be expected to have, a
Xxxxxx Material Adverse Effect. Except as set forth in Section 5.14(a) of the
Xxxxxx Disclosure Schedule, each material item of Xxxxxx Intellectual Property
is owned or licensed by the respective businesses of Xxxxxx and its Subsidiaries
to no less advantageous extent in all material respects as during the twelve
(12) months prior to the date hereof. Xxxxxx and its Subsidiaries have taken all
commercially reasonable action to maintain and protect their rights in and to
each material item of Xxxxxx Intellectual Property.
(b) Except as set forth in Section 5.14(b) of the Xxxxxx
Disclosure Schedule: (i) neither Xxxxxx nor any of its Subsidiaries has received
any written claim or notice of infringement or misappropriation of, or conflict
with, the Intellectual Property rights of others, other than such as, in the
aggregate, would not have a Xxxxxx Material Adverse Effect; (ii) none of GM,
Xxxxxx or any of Xxxxxx' Subsidiaries has provided any third party any written
claim or notice that such third party has infringed upon, misappropriated, or
otherwise come into conflict with, any Xxxxxx Intellectual Property; and (iii)
Xxxxxx and its Subsidiaries possess all right, title, and interest in and to, or
have a legal, valid, binding and enforceable right to use, each material item of
Intellectual Property used or held for use by Xxxxxx or any of its Subsidiaries,
free and clear of all Encumbrances.
(c) The Xxxxxx Intellectual Property is sufficient to conduct,
in all material respects, the respective businesses of Xxxxxx and its
Subsidiaries after the Closing as such businesses were conducted immediately
prior to the Closing.
5.15 Contracts. Except as set forth in Section 5.15 of the Xxxxxx
Disclosure Schedule, each material lease, license, contract, agreement or
obligation to which Xxxxxx or any of its Subsidiaries is a party or by which any
of them or any of their properties may be bound is valid, binding and
enforceable and in full force and effect, except where such failures to be
valid, binding and enforceable and in full force and effect, in the aggregate,
have not had and would not reasonably be expected to have a Xxxxxx Material
Adverse Effect or have a material adverse impact on the ability of Xxxxxx to
consummate the transactions contemplated by the Xxxxxx Transaction Agreements.
Neither Xxxxxx nor any of its Subsidiaries is in breach of or default under any
such lease, license, contract, agreement or obligation, and, to Xxxxxx'
Knowledge, no other party thereto is in breach of or default thereunder, except
for those breaches and defaults that, in the aggregate, have not had and would
not reasonably be expected to have a Xxxxxx Material Adverse Effect or have a
material adverse impact on the ability of Xxxxxx to consummate the transactions
contemplated by the Xxxxxx Transaction Agreements.
25
5.16 Brokerage and Finder's and Other Fees; Opinions of Financial
Advisors.
(a) Except for obligations to the Xxxxxx Financial Advisors,
neither Xxxxxx nor any of its affiliates, stockholders, directors, officers or
employees (in each case, other than GM) has incurred or will incur on behalf of
Xxxxxx or any affiliate of Xxxxxx, any brokerage, finder's or similar fee in
connection with the transactions contemplated by the Xxxxxx Transaction
Agreements. Copies of all agreements relating to any such fee payable by Xxxxxx
or any Subsidiary of Xxxxxx to the Xxxxxx Financial Advisors have been (or upon
request will be) delivered to the Purchaser.
(b) The Board of Directors of Xxxxxx has received the Xxxxxx
Financial Advisor Fairness Opinions. GM and Xxxxxx have heretofore provided, or
will provide, a copy of such opinions to the Purchaser, for information purposes
only, and the Purchaser acknowledges that it has no right to rely on such
opinions. As of the date of this Agreement, each such opinion has not been
withdrawn, revoked or modified.
5.17 Board and Stockholder Approval. The Board of Directors of Xxxxxx,
at a meeting duly called and held, has duly determined that the Xxxxxx
Transaction Agreements and the transactions contemplated thereby are advisable,
fair to and in the best interests of Xxxxxx and its stockholders and has
authorized the Xxxxxx Transaction Agreements to be executed, delivered and
performed. Immediately following the execution of this Agreement and such
determinations, GM, in its capacity as sole stockholder of Xxxxxx, shall have,
at a meeting of the sole stockholder, adopted and approved this Agreement (and
the execution, delivery and performance thereof) and the other Xxxxxx
Transaction Agreements and the transactions contemplated hereby and thereby.
Other than the approvals of GM as described in the immediately preceding
sentence and the approval of the Xxxxxx Transaction Agreements by GM, no other
vote or consent of the holders of any class or series of Xxxxxx capital stock is
necessary to approve and adopt this Agreement and the transactions contemplated
by the Xxxxxx Transaction Agreements (it being expressly understood, however,
that the Requisite Stockholder Approval of the Requisite Vote Matters is
necessary to approve the Transactions).
5.18 Takeover Laws. Prior to the date hereof, the Board of Directors
of Xxxxxx has taken all action, if any, necessary to exempt (a) the execution of
the Xxxxxx Transaction Agreements and (b) the transactions contemplated thereby
under, or make the foregoing actions not subject to (i) any takeover law or law
that purports to limit or restrict business combinations or the ability to
acquire or vote shares and (ii) any stockholder rights plan or any similar
anti-takeover plan or device.
5.19 Restrictive Agreements. Except as set forth in Section 5.19 of
the Xxxxxx Disclosure Schedule, none of Xxxxxx, its Subsidiaries or any
employee, officer, director or consultant of Xxxxxx or its Subsidiaries is party
to or bound by any agreement, contract, document, instrument, arrangement or
commitment that materially limits, or would materially limit after the Closing,
the ability of either Xxxxxx or any of
26
its Subsidiaries or, to Xxxxxx' Knowledge, the Purchaser or any of Purchaser's
Subsidiaries, to compete in any line of business or with any Person or in any
geographic area.
5.20 Permits. For the purposes of this Agreement, the "Xxxxxx Permits"
shall mean all permits, approvals, authorizations, certificates, consents,
franchises, licenses, concessions and rights ("Permits") issued or authorized by
any Governmental Authority (as amended or modified) to, or held by, Xxxxxx or
any of its Subsidiaries (together, "Xxxxxx Permit Entities"), including (a) all
Permits issued by the Federal Communications Commission or any successor agency
or any bureau or division thereof acting on delegated authority ("FCC") to any
Xxxxxx Permit Entity ("Xxxxxx FCC Licenses") and (b) all Permits issued to any
Xxxxxx Permit Entity by any Governmental Authority other than the FCC
authorizing such entity to operate channels of radio communication or provide
broadcasting or other communications services (including the provision of
direct-to-home video programming). Set forth on Section 5.20 of the Xxxxxx
Disclosure Schedule is a true and complete list, as of the date of this
Agreement, of (i) all Xxxxxx Permits, (ii) all pending applications for Permits
that would be Xxxxxx Permits, if issued or granted, and (iii) all pending
applications by any Xxxxxx Permit Entity for modification, extension or renewal
of Xxxxxx Permits, or waiver of any condition thereto, except that Section 5.20
of the Xxxxxx Disclosure Schedule need not list such Xxxxxx Permits,
applications therefor or applications in respect thereof that are immaterial to
the assets or business of Xxxxxx or any of its Subsidiaries. The Xxxxxx Permits
set forth in Section 5.20 of the Xxxxxx Disclosure Schedule are all of the
Permits required to be issued to or held by the Xxxxxx Permit Entities in order
to allow such entities to conduct their respective businesses as currently
conducted and the Xxxxxx Permits are validly held and in full force and effect,
except where the failures to possess any such Permit or the failure of any such
Permit to be validly held or in full force and effect, in the aggregate, have
not had and would not reasonably be expected to have a Xxxxxx Material Adverse
Effect. Without limiting the general provisions of Section 5.9, except as set
forth on Section 5.20 of the Xxxxxx Disclosure Schedule, each of the Xxxxxx
Permit Entities is in compliance with (i) its obligations under each of the
Xxxxxx Permits owned, held or possessed by it, and (ii) the rules and
regulations of the Governmental Authority issuing such Xxxxxx Permit, except
where the failure to so comply, in the aggregate, would not have a Xxxxxx
Material Adverse Effect. Except as set forth on Section 5.20 of the Xxxxxx
Disclosure Schedule and except for rulemaking or other proceedings of general
applicability, to Xxxxxx' Knowledge, there is not pending or threatened before
the FCC or any other Governmental Authority any proceeding, notice of violation,
order of forfeiture or complaint, or investigation against any Xxxxxx Permit
Entity relating to any of the Xxxxxx Permits that have had or would reasonably
be expected to have a Xxxxxx Material Adverse Effect. Without limiting the
general provisions of Section 5.5, Section 5.5(d) of the Xxxxxx Disclosure
Schedule lists all of the consents or approvals of, or registrations or filings
by Xxxxxx or its Subsidiaries with, any Governmental Authority necessary in
connection with the consummation of the Transactions with respect to the Xxxxxx
Permits, except that Section 5.5(d) of the Xxxxxx Disclosure Schedule need not
list consents, approvals,
27
registrations or filings with respect to Xxxxxx Permits that, when taken
together, are immaterial to the assets or business of Xxxxxx and its
Subsidiaries taken as a whole.
5.21 Tax Representations. Xxxxxx currently believes that it will be
able to make any representation, warranty or covenant which is reasonably likely
to be requested by the IRS in connection with the Ruling Request.
5.22 Information for Inclusion in the Proxy/Consent Solicitation
Statement, the Registration Statements and Other Filings. None of the
information provided by or on behalf of Xxxxxx or any Xxxxxx Affiliate (except
to the extent it constitutes information provided by or on behalf of GM or any
GM Affiliate) for inclusion in (i) the Proxy/Consent Solicitation Statement, at
the date of mailing and at the date of voting or consent and approval with
respect thereto, (ii) the Registration Statements, at the time they become
effective, and (iii) any other Disclosure Document, at the date of such
Disclosure Document, shall contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they are made, not misleading. The information in the Proxy/Consent Solicitation
Statement, the Registration Statements and any other Disclosure Document
provided by or on behalf of Xxxxxx or any Xxxxxx Affiliate (except to the extent
it constitutes information provided by or on behalf of GM or any GM Affiliate)
will comply as to form in all material respects with the provisions of the
Securities Act and the Exchange Act, as applicable. No representation or
warranty is made by Xxxxxx in this Section 5.22 with respect to statements made
or incorporated by reference therein based on information provided by or on
behalf of GM or any GM Affiliate or the Purchaser or any Purchaser Affiliate for
inclusion in the Proxy/Consent Solicitation Statement, the Registration
Statements or any other Disclosure Document.
5.23 Real Estate. Section 5.23 of the Xxxxxx Disclosure Schedule sets
forth a complete and accurate list of each parcel of real property that Xxxxxx
or its Subsidiaries purports to own, lease, license, use, or occupy, and that
consists of more than thirty thousand (30,000) square feet of space or upon
which an uplink, ground station, broadcasting facility, transmission facility or
reception facility is located (each, a "Material Real Property"). Complete and
accurate copies of all material agreements relating to the ownership, occupancy,
or use of the Material Real Properties have been made available to the
Purchaser. Each of Xxxxxx and its Subsidiaries: (a) has good and marketable (or
indefeasible in jurisdictions where the term "marketable" is not customarily
used) title in fee simple (or freehold estate in jurisdictions where the term
"fee simple" is not customarily used) to the real property Xxxxxx or its
Subsidiaries purports to own; and (b) has valid and subsisting leasehold
interests in all of the leased real property Xxxxxx or its Subsidiaries purports
to lease, in each case free and clear of any Encumbrances, other than Permitted
Encumbrances and Encumbrances which have not had and would not reasonably be
expected to have, in the aggregate, a Xxxxxx Material Adverse Effect. Each
parcel of real property owned or leased by Xxxxxx or its Subsidiaries (including
all buildings, structures, improvements and fixtures located thereon,
thereunder, thereover or therein, and all appurtenances thereto and other
aspects
28
thereof): (i) is in good operating condition and repair and is structurally
sound and free of defects, with no alterations or repairs being required thereto
under Applicable Law or insurance company requirements; and (ii) is otherwise
suitable, sufficient, adequate and appropriate in all respects (including
physical, structural, operational, legal, practical and otherwise) for its
current use, operation and occupancy, and for the conduct of Xxxxxx' and its
Subsidiaries' businesses as currently conducted, except, in each such case, for
such failures to meet such standards as have not had and would not be reasonably
expected to have, in the aggregate, a Xxxxxx Material Adverse Effect. No
Material Real Property of Xxxxxx or any of its Subsidiaries is subject to any
sales contracts, option, right of first refusal or similar agreement or
arrangement with any third party, other than those which have not had and would
not reasonably be expected to have, in the aggregate, a Xxxxxx Material Adverse
Effect. No condemnation, eminent domain, or similar proceeding exists, is
pending or, to the Knowledge of Xxxxxx, is threatened, with respect to or that
would affect, any Material Real Property of Xxxxxx or its Subsidiaries, except
for such proceedings as have not had and would not reasonably be expected to
have, in the aggregate, a Xxxxxx Material Adverse Effect. Neither Xxxxxx nor any
of its Subsidiaries has given, nor have they received, any notice that a breach
or an event of default exists, and to the Knowledge of Xxxxxx, no condition or
event has occurred that with the giving of notice or the lapse of time or both,
would constitute a breach or event of default, by Xxxxxx or any of its
Subsidiaries or any other Person, with respect to any agreements, contracts,
arrangements, deeds, options, deeds of trust, mortgages, leases, covenants,
conditions, restrictions, easements or other documents granting to Xxxxxx or any
of its Subsidiaries title to or an interest or right in, or otherwise affecting,
real property, except for such breaches and events of defaults as have not had
and would not be reasonably expected to have, in the aggregate, a Xxxxxx
Material Adverse Effect.
5.24 Limitation on Warranties. EXCEPT AS EXPRESSLY SET FORTH IN THIS
AGREEMENT, XXXXXX MAKES NO REPRESENTATION OR WARRANTY TO THE PURCHASER, EXPRESS
OR IMPLIED, AT LAW OR IN EQUITY, WITH RESPECT TO THE SHARES, GM, XXXXXX OR ANY
SUBSIDIARY OF XXXXXX, INCLUDING WITH RESPECT TO MERCHANTABILITY OR FITNESS FOR
ANY PARTICULAR PURPOSE. ALL REPRESENTATIONS OR WARRANTIES NOT EXPRESSLY SET
FORTH IN THIS AGREEMENT ARE HEREBY DISCLAIMED, AND THE PURCHASER ACKNOWLEDGES
THAT IT IS NOT RELYING ON ANY REPRESENTATION OR WARRANTY OF XXXXXX NOT EXPRESSLY
SET FORTH IN THIS AGREEMENT.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser hereby represents and warrants to GM and Xxxxxx as
follows, except as described in the Purchaser's annual report on Form 20-F for
the fiscal year ended June 30, 2002 and filed with the SEC on December 31, 2002
(the "Purchaser 20-F") and all other reports, filings, registration statements
and other documents (collectively, the "Purchaser Filings") filed by the
Purchaser with the SEC, the Australian
29
Stock Exchange Limited (the "ASX") and the Australian Securities and Investments
Commission after June 30, 2002 and prior to the date hereof (as such documents
have been amended since the time of their filing and prior to the date hereof),
all of which are of public record (it being understood that the representations
and warranties of the Purchaser set forth in this Article VI shall not be
qualified by any risk factor disclosure in the Purchaser Filings).
6.1 Organization and Good Standing. The Purchaser is a corporation
validly existing and in good standing under the laws of Australia (to the extent
that such concepts or equivalent concepts are recognized in such jurisdiction)
with all corporate power to carry on its business as now conducted. Merger Sub
is a newly formed corporation validly existing and in good standing under the
laws of the State of Delaware. Each of the Purchaser and Purchaser's
Subsidiaries is duly qualified to do business and is in good standing (to the
extent that such concepts or equivalent concepts are recognized in such
jurisdictions) in each jurisdiction in which the nature of the business
conducted by it or the property it owns, leases or operates makes such
qualification necessary, except where the failure to be so qualified or in good
standing in such jurisdiction has not had and would not reasonably be expected
to have a Purchaser Material Adverse Effect or have a material adverse impact on
the Purchaser's ability to consummate the transactions contemplated by this
Agreement.
6.2 Corporate Power and Authority.
(a) The Purchaser has (or will have prior to execution thereof)
all requisite corporate power and authority to execute and deliver this
Agreement, the Merger Agreement and each other agreement, document, instrument
or certificate contemplated by this Agreement or the Merger Agreement or to be
executed by the Purchaser in connection with the consummation of the
transactions contemplated hereby and thereby (the "Purchaser Documents"), and to
consummate the transactions contemplated hereby and thereby. The execution and
delivery of this Agreement and the Purchaser Documents by the Purchaser and the
consummation of the transactions contemplated by this Agreement and the
Purchaser Documents to be effected by the Purchaser have been (or will be prior
to execution and delivery thereof) duly authorized by all necessary corporate
action on the part of the Purchaser. This Agreement and each of the Purchaser
Documents have been (or will be) duly executed and delivered by the Purchaser
and, assuming the due authorization, execution and delivery by the other parties
hereto and thereto, constitute (or will constitute when executed) legal, valid
and binding obligations of the Purchaser, enforceable against the Purchaser in
accordance with their respective terms, except as enforceability may be limited
by bankruptcy, similar laws of debtor relief and general principles of equity.
(b) Merger Sub has all requisite corporate power and authority
to enter into the Merger Agreement and to consummate the Merger contemplated
thereby. The execution and delivery of the Merger Agreement by Merger Sub and
the consummation of the Merger and other transactions contemplated thereby to be
effected by Merger Sub have been duly authorized by all necessary corporate
action on the part of
30
Merger Sub. The Merger Agreement has been duly executed and delivered by Merger
Sub and, assuming the due authorization, execution and delivery by the other
parties thereto, constitutes the legal, valid and binding obligation of Merger
Sub, enforceable against Merger Sub in accordance with its terms, except as
enforceability may be limited by bankruptcy, similar laws of debtor relief and
general principles of equity.
6.3 Conflicts; Consents and Approvals. Except as set forth on
Section 6.3 of the disclosure schedule delivered by the Purchaser to GM and
Xxxxxx and dated as of the date hereof (the "Purchaser Disclosure Schedule"),
the execution and delivery by the Purchaser of this Agreement and the Purchaser
Documents, the execution and delivery by Merger Sub of the Merger Agreement and
the consummation of the transactions contemplated hereby and thereby will not:
(a) violate any provision of the Purchaser's certificate of
incorporation or by-laws (or equivalent organizational documents), Merger Sub's
certificate of incorporation or Merger Sub's by-laws;
(b) violate, conflict with, or result in a breach of any
provision of, or constitute a default (or an event which, with the giving of
notice, the passage of time or both, would constitute a default) under, require
the consent of any party under, or entitle any party (with the giving of notice,
the passage of time or both) to terminate, accelerate, modify or call a default
under, or result in the creation of any Encumbrance (other than a Permitted
Encumbrance) upon any of the properties or assets of the Purchaser, Merger Sub
or any of the Purchaser's Significant Subsidiaries under, any of the terms,
conditions or provisions of any note, bond, mortgage, indenture, deed of trust,
intellectual property or other license, contract, undertaking, agreement, lease
or other instrument or obligation to which the Purchaser, Merger Sub or any of
the Purchaser's Significant Subsidiaries is a party;
(c) violate any order, writ, injunction, decree, statute, rule
or regulation applicable to the Purchaser, Merger Sub or any of the Purchaser's
Significant Subsidiaries; or
(d) require any consent or approval of, or registration or
filing by the Purchaser or Merger Sub with, any third party or Governmental
Authority, other than (i) with respect to the Purchaser Stock to be issued by
the Depositary in connection with the Stock Sale or Merger, authorization for
listing the shares of the Purchaser Stock on the NYSE, (ii) application for
quotation on the ASX of the Preferred Limited Voting Ordinary Shares underlying
the Purchaser Stock to be issued by the Depositary in the Stock Sale or Merger,
(iii) actions required by the HSR Act and the competition laws of foreign
jurisdictions, (iv) registrations or other actions required under federal, state
and foreign securities laws as are contemplated by this Agreement or (v)
notifications to or applications for consent from Governmental Authorities
required with respect to the Xxxxxx Permits;
31
except, in the case of (b), (c) and (d), for any of the foregoing that, in the
aggregate, would not reasonably be expected to have a material adverse impact on
the ability of the Purchaser and Merger Sub to consummate the transactions
contemplated by this Agreement and the Purchaser Documents. Section 6.3(e) of
the Purchaser Disclosure Schedule sets forth a list of all partners and other
owners of equity in entities through which the Purchaser conducts it operations
in Latin America from whom consent may be required in connection with the
Transactions (collectively, the "Specified Foreign Persons").
6.4 Capitalization of the Purchaser.
(a) As of April 4, 2003, the Purchaser's capital stock consists
of 2,095,999,003 issued and outstanding Ordinary Shares ("Ordinary Shares") and
3,215,474,597 issued and outstanding Preferred Limited Voting Ordinary Shares
("Preferred Limited Voting Ordinary Shares"). As of April 4, 2003, 463,634,561
American Depositary Receipts ("American Depositary Receipts") were on issue
representing American Depositary Shares ("American Depositary Shares") of the
Purchaser (such American Depositary Shares are hereinafter referred to as the
"Purchaser Stock"), each of which represents four (4) issued and outstanding
Preferred Limited Voting Ordinary Shares of the Purchaser. Except as may be
otherwise disclosed by the Purchaser to GM and Xxxxxx prior to the first day
during which the 20-Day Average Purchaser Stock Price is to be calculated
pursuant to the Merger Agreement: (i) since April 4, 2003, there have been no
changes (other than to the number of outstanding shares) to the Purchaser's
capital stock, including the classes and series; powers, designations,
preferences and rights; qualifications, limitations and restrictions; and terms
and provisions thereof; (ii) there is no stockholder rights plan issued by the
Purchaser with respect to its securities; and (iii) the Purchaser has no
authorized or outstanding bonds, debentures, notes or other obligations or
securities, the holders of which have (or upon the occurrence of certain
specified events would have) the right to vote with shareholders of the
Purchaser on any matter. Each outstanding share of the Purchaser capital stock
is duly authorized and validly issued, fully paid and non-assessable, and has
not been issued in violation of any preemptive or similar rights.
(b) Each Preferred Limited Voting Ordinary Share to be issued
and deposited by the Purchaser pursuant to the Deposit Agreement in connection
with any Purchaser Stock to be issued by the Depositary in connection with the
Stock Sale and the Merger will be duly authorized and, when issued and delivered
in accordance with the terms of this Agreement and the Merger Agreement,
respectively, validly issued, fully paid and nonassessable, free and clear of
all Encumbrances and will not be issued in violation of any preemptive or
similar rights. The Purchaser Stock to be issued by the Depositary in connection
with the Stock Sale and the Merger will be issued under the terms of the Deposit
Agreement. As of the Closing, the Deposit Agreement shall be a legal, valid and
binding obligation of the Purchaser and the Depositary, enforceable against the
Purchaser and the Depositary in accordance with its terms, except as
enforceability may be limited by bankruptcy, similar laws of debtor relief and
general principles of equity. Upon issuance by the Depositary, as contemplated
by this
32
Agreement and the Merger Agreement, the Purchaser Stock to be issued by the
Depositary in connection with the Stock Sale and the Merger shall be validly
issued, and the registered holders thereof shall be entitled to the rights of a
registered holder of the American Depositary Receipts evidencing such Purchaser
Stock, as specified in the Deposit Agreement and in the American Depositary
Receipts representing such Purchaser Stock, free and clear of all Encumbrances.
As of the Closing, the Purchaser shall have (i) issued and allotted the
Preferred Limited Voting Ordinary Shares underlying any Purchaser Stock to be
issued by the Depositary in connection with the Stock Sale and the Merger to
Citicorp Nominees Pty Limited (the "Custodian") and made such entries in the
register of members of the Purchaser as are required by the Australian
Corporations Act to record the Custodian as a member of the Purchaser in respect
of such Preferred Limited Voting Ordinary Shares, (ii) delivered to the
Custodian such evidence as the Custodian reasonably requires confirming that
such underlying Preferred Limited Voting Ordinary Shares have been issued to and
registered in the name of the Custodian, (iii) obtained in principle approval
from the ASX indicating that it will grant official quotation to any Preferred
Limited Voting Ordinary Shares underlying any Purchaser Stock to be issued by
the Depositary in connection with the Stock Sale and the Merger and (iv)
received authorization for listing of the Purchaser Stock to be issued by the
Depositary in connection with the Stock Sale and the Merger on the NYSE (subject
to official notice of issuance).
6.5 Purchaser Filings.
(a) The Purchaser has timely filed and made available to GM and
Xxxxxx all required reports, filings, registration statements and other
documents required to be filed by it with the SEC, the ASX, the Australian
Securities and Investment Commission and any other applicable foreign securities
regulatory authorities since January 1, 2002.
(b) As of its filing date, or as amended or supplemented prior
to the date hereof, each Purchaser Filing complied (and each Purchaser Filing
filed after the date of this Agreement will comply) as to form in all material
respects with the applicable requirements of the Exchange Act, the Securities
Act and any applicable foreign securities laws or regulations (except for the
exclusion from the Purchaser 20-F of the financial statements of Gemstar-TV
Guide International, Inc.).
(c) No Purchaser Filing, as of its filing date, contained any
untrue statement of a material fact or omitted to state any material fact (and
no Purchaser Filing filed after the date of this Agreement will contain any
untrue statement of a material fact or omit to state any material fact)
necessary in order to make the statements made therein, in the light of the
circumstances under which they were made, not misleading.
6.6 Financial Statements. The audited financial statements and
unaudited interim financial statements of the Purchaser included in the
Purchaser Filings fairly present in all material respects (and the audited
financial statements and unaudited
33
interim financial statements of the Purchaser included in the Purchaser Filings
filed after the date of this Agreement will fairly present in all material
respects), in accordance with Australian generally accepted accounting
principles with appropriate reconciliation to GAAP (except as may be indicated
in the notes thereto) as required by the rules of the SEC (except, in the case
of unaudited statements, as permitted by forms or rules of the SEC), the
consolidated financial position of the Purchaser and its consolidated
Subsidiaries as of the dates thereof and its consolidated results of operations
and changes in financial position for the respective periods then ended (subject
to normal year-end adjustments and lack of footnote disclosure in the case of
any unaudited interim financial statements).
6.7 Litigation. There is no Action pending or, to the knowledge of
the Purchaser, threatened against the Purchaser, Merger Sub or their respective
properties which would reasonably be expected to have a material adverse impact
on the ability of the Purchaser and Merger Sub to consummate the transactions
contemplated by this Agreement and the Purchaser Documents.
6.8 Investment Intention. The Purchaser is acquiring the Shares and
the shares of Surviving Corporation Class B Common Stock (and, after the
conversion following the Merger, Surviving Corporation Common Stock) for its own
account, for investment purposes only and not with a view to the distribution
(as such term is used in Section 2(11) of the Securities Act) thereof. The
Purchaser understands that the Shares and the shares of Surviving Corporation
Class B Common Stock (and, after the conversion following the Merger, Surviving
Corporation Common Stock) have not been registered under the Securities Act and
cannot be sold unless subsequently registered under the Securities Act or an
exemption from such registration is available.
6.9 Financial Advisors.
(a) Except for obligations to Citigroup Global Markets Inc. and
XX Xxxxxx Securities Inc. (none of which will be the responsibility of Xxxxxx or
the Surviving Corporation), neither the Purchaser nor any Purchaser Affiliate,
stockholder, director, officer or employee has incurred or will incur on behalf
of the Purchaser or any Purchaser Affiliate, any brokerage, finder's or similar
fee in connection with the transactions contemplated by this Agreement and the
Purchaser Documents.
(b) The Board of Directors of the Purchaser has received the
opinions of Citigroup Global Markets Inc. and XX Xxxxxx Securities Inc. dated as
of April 9, 2003, to the effect that, the consideration to be paid by Purchaser
is fair, from a financial point of view, to Purchaser. The Purchaser has
heretofore provided, or will provide, a copy of such opinion to GM for
informational purposes only, and GM acknowledges that it has no right to rely on
such opinion. As of the date of this Agreement, such opinion has not been
withdrawn, revoked or modified.
6.10 Board and Stockholder Approval. The Boards of Directors of the
Purchaser and Merger Sub, at meetings duly called and held, have duly determined
that
34
this Agreement, the Merger Agreement and the transactions contemplated hereby
and thereby are advisable, fair to and in the best interests of the Purchaser,
Merger Sub and their respective stockholders and have authorized this Agreement
and the Merger Agreement to be executed, delivered and performed. Immediately
following the execution of this Agreement and such determinations, the
Purchaser's Subsidiary NPAL, in its capacity as sole stockholder of Merger Sub,
shall have, at a meeting of the sole stockholder, adopted and approved the
Merger Agreement (and the execution, delivery and performance thereof) and the
transactions contemplated thereby. Other than the approvals of NPAL as described
in the immediately preceding sentence and the approval of this Agreement and the
Merger Agreement by NPAL, no other vote or consent of the holders of any class
or series of Merger Sub capital stock or class or series of NPAL's or the
Purchaser's capital stock is necessary to approve and adopt this Agreement, the
Merger Agreement and the transactions contemplated hereby and thereby.
6.11 Financing. The Purchaser has, and will have on the Closing Date,
sufficient cash to purchase the Shares (to the extent the Purchase Price is to
be paid in cash) and, in any case, to consummate the transactions contemplated
by this Agreement, including payments of fees and expenses contemplated
hereunder.
6.12 Tax Representations. The Purchaser currently believes that it
will be able to make any representation, warranty or covenant which is
reasonably likely to be requested by the IRS in connection with the Ruling
Request.
6.13 Information for Inclusion in the Proxy/Consent Solicitation
Statement, the Registration Statements and Other Filings. None of the
information provided by or on behalf of the Purchaser or any Purchaser Affiliate
for inclusion in (a) the Proxy/Consent Solicitation Statement, at the date of
mailing and at the date of voting or consent and approval with respect thereto,
(b) the Registration Statements, at the time they become effective and (c) any
other Disclosure Document, at the date of such Disclosure Document, shall
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made, not
misleading. The information in the Proxy/Consent Solicitation Statement, the
Registration Statements and any other Disclosure Document provided by or on
behalf of the Purchaser or any Purchaser Affiliate will comply as to form in all
material respects with the provisions of the Securities Act and the Exchange
Act, as applicable. No representation or warranty is made by the Purchaser in
this Section 6.13 or in Sections 6.5 and 6.6 hereof with respect to Gemstar-TV
Guide International, Inc. or with respect to statements made or incorporated by
reference therein based on information provided by or on behalf of GM or any GM
Affiliate or Xxxxxx or any Xxxxxx Affiliate for inclusion in the Proxy/Consent
Solicitation Statement, the Registration Statements or any other Disclosure
Document.
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6.14 Merger Sub.
(a) Merger Sub was formed solely for the purpose of engaging in
the transactions contemplated hereby and by the other Transaction Agreements and
has not taken any actions, engaged in any business activities, incurred any
liabilities or obligations or conducted any operations other than in connection
with (i) its formation or (ii) the transactions expressly contemplated by the
Transaction Agreements. Merger Sub has no wholly or non-wholly owned
subsidiaries.
(b) The authorized capital stock of Merger Sub consists of 3000
shares of common stock, par value $ 0.01 per share (the "Merger Sub Common
Shares"). There are issued and outstanding 100 Merger Sub Common Shares, all of
which are owned by NPAL free and clear of all Encumbrances, and no other shares
of capital stock of Merger Sub, or securities convertible into or exchangeable
for capital stock of Merger Sub, are issued and outstanding. The Purchaser owns,
directly or indirectly, all of the capital stock of NPAL.
6.15 Limitation on Warranties. EXCEPT AS EXPRESSLY SET FORTH IN THIS
AGREEMENT, THE PURCHASER MAKES NO REPRESENTATION OR WARRANTY TO GM OR XXXXXX,
EXPRESS OR IMPLIED, AT LAW OR IN EQUITY, WITH RESPECT TO THE PURCHASER OR ANY
SUBSIDIARY OF THE PURCHASER, INCLUDING WITH RESPECT TO MERCHANTABILITY OR
FITNESS FOR ANY PARTICULAR PURPOSE. ALL REPRESENTATIONS OR WARRANTIES NOT
EXPRESSLY SET FORTH IN THIS AGREEMENT ARE HEREBY DISCLAIMED, AND EACH OF GM AND
XXXXXX ACKNOWLEDGES THAT IT IS NOT RELYING ON ANY REPRESENTATION OR WARRANTY OF
THE PURCHASER NOT EXPRESSLY SET FORTH IN THIS AGREEMENT.
ARTICLE VII
THE TRANSACTIONS
7.1 GM Board Approval of the Transactions.
(a) GM's Board of Directors, at a meeting duly convened and held
on April 9, 2003: (i) determined that, as of such date, the execution, delivery
and performance of this Agreement and the Separation Agreement by GM and the
consummation of the transactions contemplated hereby and thereby would be
advisable, desirable and in the best interests of GM and its stockholders and
that, as of such date, the Transactions, taken as a whole, on the terms and
conditions of the Transaction Agreements, are fair to the holders of GM $1-2/3
Common Stock and the holders of GM Class H Common Stock; (ii) approved this
Agreement and the Separation Agreement and the transactions contemplated hereby
and thereby; and (iii) determined, subject to its fiduciary duties under
Applicable Law, to recommend and submit the Transactions,
36
including the GM Charter Amendment, to the holders of GM $1-2/3 Common Stock and
the holders of GM Class H Common Stock for their approval.
(b) In connection with this determination, each of Xxxxxxx
Lynch, Pierce, Xxxxxx & Xxxxx Incorporated and Bear, Xxxxxxx & Co. Inc. (the "GM
Financial Advisors") has provided its written opinion, dated as of such date and
addressed to the Board of Directors of GM (the "GM Financial Advisor Fairness
Opinions"), to the effect that, as of such date and taking into account all
relevant financial aspects of the Transactions taken as a whole, the
consideration to be provided to GM and the holders of GM Class H Common Stock,
as applicable, in the Transactions is fair, from a financial point of view, to
the holders of GM $1-2/3 Common Stock as a class and to the holders of GM Class
H Common Stock as a class, respectively. In addition, each of Xxxxxxx, Xxxxx &
Co. and Credit Suisse First Boston Corporation (the "Xxxxxx Financial Advisors")
has provided its written opinion, dated as of such date and addressed to the
Board of Directors of GM and to the Board of Directors of Xxxxxx, to the effect
that, as of such date and based on current market conditions, the consideration
to be received by the holders of Xxxxxx Common Stock in the Merger is fair, from
a financial point of view, to the holders of Xxxxxx Common Stock as of
immediately prior to the Merger (other than Purchaser and its Affiliates) (the
"Xxxxxx Financial Advisor Fairness Opinions"). The Purchaser acknowledges and
agrees that GM may determine, in its sole and absolute discretion, to request
additional opinions (or confirmations of non-withdrawal or updates with respect
to the GM Financial Advisor Fairness Opinions and the Xxxxxx Financial Advisor
Fairness Opinions) from the GM Financial Advisors and the Xxxxxx Financial
Advisors in connection with the Transactions, including in connection with
seeking the Requisite Stockholder Approval of the Requisite Vote Matters;
provided, however, that the foregoing shall not affect in any manner GM's
obligations under Section 7.2 hereof or any provision of this Agreement;
provided further, that, to the extent that GM's Board of Directors deems
appropriate, the foregoing may be taken into account for purposes of Section
7.2(b) hereof.
7.2 GM Stockholder Approval of the Transactions and the GM Charter
Amendment.
(a) GM's Obligations Relating to the Stockholder Approval
Process. Subject in all cases to the other provisions of this Section 7.2 and to
Section 7.3 below, GM shall, at such times as it shall reasonably determine,
consistent with its obligations under Section 9.3 below, following the
satisfaction or waiver of each and all of the conditions set forth in Section
7.3 below:
(i) take all action, in accordance with the U.S. federal
securities laws, the DGCL, all other Applicable Law, its certificate of
incorporation, its bylaws and the policy statement of its Board of
Directors regarding certain capital stock matters (the "GM Board Policy
Statement", a copy of which has been heretofore provided to the Purchaser),
necessary to present (A) the GM Charter Amendment (as a separate matter for
approval), (B) the Xxxxxx Certificate of Incorporation (as the same shall
be amended pursuant to the
37
Xxxxxx Charter Amendment), including the Excess Shares Provision (as a
separate matter for ratification), (C) the Xxxxxx Separation
Transactions, including the Special Dividend (as a separate matter for
approval and ratification, as applicable), (D) the Stock Sale (as a
separate matter for ratification), (E) the Merger (as a separate matter
for ratification) and (F) with the prior written consent of Purchaser
(which consent shall not be unreasonably withheld or delayed), any
other aspects of the Transactions determined by GM to be submitted for
stockholder approval (collectively, the "Requisite Vote Matters") to
the holders of GM $1-2/3 Common Stock and GM Class H Common Stock for
their consideration and in order to seek the Requisite Stockholder
Approval of the Requisite Vote Matters (it being understood and agreed
that the Transactions are conditioned on the Requisite Stockholder
Approval of all separate matters constituting part of the Requisite
Vote Matters);
(ii) include in a proxy statement or consent solicitation
statement (as determined by GM in its sole and absolute discretion) of GM
to be distributed to GM's common stockholders in connection with seeking
the Requisite Stockholder Approval of the Requisite Vote Matters (as
amended and supplemented from time to time, the "Proxy/Consent Solicitation
Statement") the recommendation of its Board of Directors in favor of the
Requisite Vote Matters;
(iii) mail the Proxy/Consent Solicitation Statement to its
common stockholders (the date on which such mailing is commenced being
referred to herein as the "Mailing Date"); and
(iv) use reasonable best efforts, in accordance with the
U.S. federal securities laws, the DGCL and all other Applicable Law, to
solicit from its common stockholders entitled to vote thereon, as
determined by GM in its sole and absolute discretion, either (A) proxies to
be voted at a stockholders meeting or (B) written consents (or proxies for
written consents) to be obtained in connection with a consent solicitation,
in each case sufficient under Applicable Law to constitute the Requisite
Stockholder Approval of the Requisite Vote Matters.
(b) Non-Recommendation Determination. If GM's Board of Directors
shall have determined, in good faith and upon advice of legal counsel, that, in
accordance with its fiduciary duties under Applicable Law, either (i) it cannot
or will not be able to recommend the Requisite Vote Matters to its common
stockholders for their approval or (ii) after having recommended to its common
stockholders approval of the Requisite Vote Matters, it is required to withdraw,
revoke or modify in any adverse manner such recommendation (in either case, a
"Non-Recommendation Determination"), GM shall promptly provide written notice
thereof to the Purchaser (a "Notice of Non-Recommendation"), in which event GM
shall not be required to take or continue any of the actions set forth in this
Section 7.2, and the provisions of Sections 3.2(c)(ii) and 3.2(d)(ii) of this
Agreement shall apply.
38
(c) [Intentionally Omitted.]
(d) Request for Confirmation. In the event that the conditions
set forth in Section 7.3 have been satisfied for not less than ten (10) Business
Days, and continue to be satisfied, but GM shall not have commenced the mailing
of the Proxy/Consent Solicitation Statement, the Purchaser may from time to time
make a written request (a "Confirmation Request") that GM confirm in writing
that, as of the date of such confirmation, GM's Board of Directors continues to
recommend the Requisite Vote Matters and has a good faith intention and is
prepared to submit the Requisite Vote Matters to GM's common stockholders in
accordance with Section 7.2(a), and continues to take all actions in accordance
with Section 9.3 in furtherance thereof, and is in compliance with Section 9.6
(a "Confirmation"); provided, that the Purchaser may not make any Confirmation
Request within ten (10) Business Days after it has received a Confirmation. If
the Purchaser delivers a Confirmation Request to GM in accordance with the
preceding sentence, then either (i) GM shall provide a Confirmation to the
Purchaser within five (5) Business Days following its receipt of the
Confirmation Request (a "Confirmation Period") or (ii) in the event that GM
fails to provide a Confirmation to the Purchaser within the applicable
Confirmation Period, GM shall be deemed to have delivered a Notice of
Non-Recommendation as of the end of such Confirmation Period and the provisions
of Section 3.2(d)(ii) of this Agreement shall apply.
7.3 Conditions to GM's Obligations Relating to the Stockholder
Approval Process. GM's obligation to take the actions set forth in Section 7.2
is subject to the satisfaction of each and all of the following conditions (any
of which, other than the condition set forth in Section 7.3(a), may be waived in
whole or in part by GM, in its sole and absolute discretion, after consultation
with the Purchaser):
(a) the United States Securities and Exchange Commission (the
"SEC") shall have declared the Registration Statements effective, all other
required approvals and clearances of the Registration Statements and the
Proxy/Consent Solicitation Statement shall have been received from the SEC and
no stop order suspending the effectiveness of any of the Registration Statements
shall be in effect, and no similar restraining order shall have been entered or
threatened by the SEC with respect to the proxy/consent solicitation and/or
registration relating to the Transactions;
(b) all applicable material state and foreign blue sky or
securities permits or approvals required to mail the Proxy/Consent Solicitation
Statement and take the other actions set forth in Section 7.2 above shall have
been received in accordance with Applicable Law and no restraining order shall
have been entered or threatened by any state securities administrator or any
foreign securities administrator with respect to the proxy/consent solicitation
and/or registration relating to the Transactions;
(c) GM (i) shall have received the Ruling, (ii) shall not have
been notified by the IRS that the Ruling has been withdrawn, invalidated or
modified in
39
an adverse manner, and (iii) shall not have been notified by the IRS, and shall
not have otherwise reasonably determined, on the basis of an opinion of outside
tax counsel, that there is a more than immaterial possibility that the
consummation of the Split-Off will not be tax-free as contemplated by this
Agreement; and
(d) GM shall not have reasonably determined, based on facts and
circumstances arising after the date hereof, that there is a material risk that
any or all of the conditions set forth in Sections 10.1(a), (b) and (c) hereof
shall not be satisfied prior to the Outside Date, in which case GM shall
promptly notify the Purchaser in writing (such notice, a "Notice of
Non-Mailing").
7.4 Recapitalization of Xxxxxx.
(a) Prior to the Split-Off Effective Time, GM and Xxxxxx shall
take any and all such actions (pursuant to one or more transactions) as they
shall reasonably determine so that GM shall hold, immediately prior to Split-Off
Effective Time, a number of shares of Xxxxxx Common Stock equal to the Split-Off
Numerator and a number of shares of Xxxxxx Class B Common Stock equal to the
Split-Off Denominator minus the Split-Off Numerator. As a result, the aggregate
number of shares of Xxxxxx Common Stock and Xxxxxx Class B Common Stock held by
GM immediately prior to the Split-Off Effective Time shall be equal to the
Split-Off Denominator.
(b) For the purposes of this Agreement, "Split-Off Numerator"
means the numerator of the fraction described in Article Fourth, Division I,
Section (a)(4) of the GM Certificate of Incorporation, as amended by the GM
Charter Amendment, determined as of immediately prior to the Split-Off Effective
Time and determined as of such point in time rather than as an average with
respect to any accounting period. For the purposes of this Agreement, "Split-Off
Denominator" means the denominator of the fraction (the "Class H Fraction")
described in Article Fourth, Division I, Section (a)(4) of the GM Certificate of
Incorporation, as amended by the GM Charter Amendment, determined as of
immediately prior to the Split-Off Effective Time and determined as of such
point in time rather than as an average with respect to any accounting period.
Any determination of the Split-Off Numerator or the Split-Off
Denominator shall be made by the GM Board of Directors in accordance with the
preceding paragraph. Promptly following any determination by the GM Board of
Directors of the Split-Off Numerator or the Split-Off Denominator pursuant to
this Agreement, GM shall provide written notice thereof to the Purchaser (which
notice shall include the computation thereof).
7.5 Split-Off of Xxxxxx from GM.
(a) The parties agree that, immediately prior to the
consummation of the Stock Sale as contemplated by this Agreement, (i) GM shall
cause the Split-Off Fraction (expressed as a number) to be at least 0.80
(without rounding up),
40
but shall not cause such number to be increased beyond the minimum amount
necessary to increase such number to 0.801, and (ii) GM and Xxxxxx shall take
all actions within their control legally required to effect the Xxxxxx Common
Stock Exchange in order to accomplish the Split-Off; provided that all
conditions set forth in Article X (other than the consummation of the Xxxxxx
Common Stock Exchange) shall have been satisfied or waived and the parties shall
be prepared to cause the consummation of the Stock Sale simultaneously with the
consummation of the Split-Off at the Split-Off Effective Time. The parties agree
that, notwithstanding any other provision of this Agreement, GM and Xxxxxx are
expressly permitted to take the actions contemplated in this Section 7.5(a).
(b) For the purposes of this Agreement, the following
terms shall have the following meanings:
(i) "Xxxxxx Common Stock Exchange" means the pro
rata distribution at the Redemption Effective Time to the holders of GM
Class H Common Stock of one share of Xxxxxx Common Stock in exchange for
each outstanding share of GM Class H Common Stock such that all of the
outstanding shares of GM Class H Common Stock shall be redeemed and
canceled in accordance with the terms of the GM Certificate of
Incorporation, as amended pursuant to the GM Charter Amendment (it being
understood and agreed that GM shall, simultaneously with the Xxxxxx
Common Stock Exchange, consummate the sale of the Shares to the Purchaser
in accordance with the terms of this Agreement); and
(ii) "Split-Off Fraction" means the fraction
obtained by dividing (A) the Split-Off Numerator by (B) the Split-Off
Denominator.
7.6 Effects of the Split-Off. From and after the Split-Off
Effective Time, the Split-Off shall have the effects specified in DGCL Section
151 and set forth in this Agreement.
(a) Exchange of Xxxxxx Common Stock for GM Class H
Common Stock. At and as of the Split-Off Effective Time, by virtue of the
Split-Off and without any action on the part of GM, Xxxxxx, any holder of
capital stock of GM or any other Person, (i) for all purposes of determining the
record holders of Xxxxxx Common Stock, the holders of record of GM Class H
Common Stock as of immediately prior to the Split-Off Effective Time shall be
deemed to be holders of the shares of Xxxxxx Common Stock distributed to such
holders pursuant to the Xxxxxx Common Stock Exchange and (ii) subject to any
transfer of such stock, each such holder shall be entitled to receive all
dividends payable on, and exercise voting rights and all other rights and
privileges with respect to, the shares of Xxxxxx Common Stock distributed to
such holder pursuant to the Xxxxxx Common Stock Exchange.
(b) Treasury Shares. At and as of the Split-Off
Effective Time, by virtue of the Split-Off, without any action on the part of
GM, Xxxxxx, any holder of capital stock of GM or any other Person, each share of
GM Class H Common
41
Stock owned by GM, Xxxxxx or their respective Affiliates as of immediately prior
to the Split-Off Effective Time shall be cancelled and retired, and no payment
or distributions shall be made in respect thereof.
7.7 Cooperation; Stockholder Records.
(a) Cooperation. GM shall cooperate, and shall instruct
EquiServe Trust Company, N.A., in its capacity as the transfer agent for the GM
Class H Common Stock (the "GM Transfer Agent"), to cooperate fully with Xxxxxx
and the exchange agent to be designated by Xxxxxx and the Purchaser in
accordance with the Merger Agreement (the "Exchange Agent"), and Xxxxxx shall
cooperate, and shall instruct the Exchange Agent to cooperate fully with GM and
the GM Transfer Agent in connection with the Split-Off, the Merger and all
related matters, including those matters relating to (i) the issuance and
delivery of certificates representing, or other evidence of ownership of (any
such instruments, "Certificates"), the shares of Xxxxxx Common Stock to be
distributed in exchange for all of the shares of GM Class H Common Stock
outstanding as of immediately prior to the Split-Off Effective Time, (ii) the
issuance and delivery of Certificates evidencing the Shares of Xxxxxx Class B
Common Stock to be sold to the Purchaser in accordance with this Agreement and
(iii) following the consummation of the Merger, the issuance and delivery of
Certificates evidencing the shares of Surviving Corporation Common Stock and
Purchaser Stock (if any) and cash (if any) to be issued or distributed in
connection with the Merger. GM and Xxxxxx shall jointly instruct the GM Transfer
Agent and the Exchange Agent to cooperate with each other such that the Exchange
Agent shall distribute letters of transmittal, in form reasonably satisfactory
to each of GM and Xxxxxx and following the consummation of the Merger, the
Surviving Corporation, to all holders of GM Class H Common Stock as of
immediately prior to the Split-Off Effective Time in connection with the
exchange of Certificates evidencing shares of GM Class H Common Stock for,
Certificates evidencing shares of Surviving Corporation Common Stock and
Purchaser Stock (if any) and cash (if any). Following such time as any
Certificates of GM Class H Common Stock are surrendered to the Exchange Agent
for cancellation, Xxxxxx shall use reasonable best efforts to cause the Exchange
Agent to certify as to their destruction or promptly deliver such Certificates
of GM Class H Common Stock to GM, as may be requested by GM.
(b) Stockholder Records. Following the Split-Off
Effective Time, GM shall instruct the GM Transfer Agent to deliver to the
Exchange Agent true, correct and complete copies of the transfer records
reflecting the record holders of GM Class H Common Stock as of immediately prior
to the Split-Off Effective Time. Upon the reasonable request of Xxxxxx from time
to time after the Split-Off Effective Time in connection with any legitimate
corporate purpose, GM shall cooperate, and shall instruct the GM Transfer Agent
to cooperate, in providing Xxxxxx reasonable access to all historical share,
transfer and dividend payment records with respect to the holders of GM Class H
Common Stock as of immediately prior to the Split-Off Effective Time.
42
7.8 Closing of Transfer Records. From and after the Split-Off
Effective Time, transfers of shares of GM Class H Common Stock outstanding prior
to the Split-Off Effective Time shall not be made on the stock transfer books of
GM.
7.9 Cancellation. From and after the Split-Off Effective Time,
each holder of a Certificate or Certificates formerly representing shares of GM
Class H Common Stock will thereafter cease to have any rights with respect to
such shares, and such Certificates will represent the shares of Xxxxxx Common
Stock distributed in the Split-Off (or, until exchanged as provided in the
Merger Agreement, the right to receive the Merger Consideration following the
consummation of the Merger).
7.10 Treatment of Stock Options, LTAP Awards and Restricted
Stock Units; Section 16 Matters.
(a) Prior to the Split-Off Effective Time, in order to
preserve the economic interest and cost to exercise with respect to each stock
option to purchase GM Class H Common Stock, GM and Xxxxxx shall take all such
actions as may be necessary to cause each such unexpired and unexercised option,
whether or not vested or exercisable, under stock option plans of GM or Xxxxxx
with respect to GM Class H Common Stock (each, an "Option") to be automatically
converted at the Split-Off Effective Time into an option (an "Exchange Option")
to purchase, on the same terms and conditions as were applicable to each such
Option immediately before the Split-Off Effective Time (except for any changes
in vesting rights or acceleration of exercise rights pursuant to the terms of
the stock option plans and related agreements in existence on the date of this
Agreement, that result from the occurrence of the Transactions), (i) the same
number of shares of Xxxxxx Common Stock as the holder of such Option would have
been entitled to purchase had such holder exercised each such Option in full
immediately prior to the Split-Off Effective Time and (ii) at a price per share
equal to the per share exercise price for the Option immediately prior to the
Split-Off Effective Time; provided, however, that in the case of any Option to
which Section 421 of the Code applies by reason of its qualification under
Section 422 of the Code, the conversion formula shall be adjusted, if necessary,
to comply with Section 424(a) of the Code. In connection with the issuance of
Exchange Options, Xxxxxx shall (i) reserve for issuance the number of shares of
Xxxxxx Common Stock that will become subject to Exchange Options pursuant to
this Section 7.10 and (ii) from and after the Split-Off Effective Time, upon
exercise of Exchange Options, make available for issuance all shares of Xxxxxx
Common Stock covered thereby, subject to the terms and conditions applicable
thereto.
(b) Prior to the Split-Off Effective Time, in order to
preserve the economic interest and cost to fund with respect to the LTAP, GM and
Xxxxxx shall take all such actions as may be necessary to cause, effective as of
the Split-Off Effective Time, (i) any portion of a payment under the LTAP which
is payable in shares of GM Class H Common Stock to be payable in the same number
of shares of Xxxxxx Common Stock (and not shares of GM Class H Common Stock),
and (ii) any portion of a payment under the LTAP which is payable in shares of
GM $1-2/3 Common Stock to be payable in a number of shares of Xxxxxx Common
Stock (and not shares of GM $1-2/3 Common
43
Stock) determined pursuant to the following formula: the number of shares of GM
$1-2/3 Common Stock that would otherwise be payable shall be multiplied by the
ratio of (x) the average of the daily high and low trading prices of a share of
GM $1-2/3 Common Stock on the NYSE as quoted by a publicly available stock
quotation service for the three (3) stock trading days ending on and including
the fifth trading day before the date on which the Split-Off Effective Time
occurs, divided by (y) the average of the daily high and low trading prices of a
share of GM Class H Common Stock on the NYSE as quoted by a publicly available
stock quotation service for the three (3) stock trading days ending on and
including the fifth trading day before the date on which the Split-Off Effective
Time occurs; provided, that any fractional share of Xxxxxx Common Stock payable
in accordance with the calculation set forth in clause (ii) of this Section
7.10(b) shall be rounded to the nearest whole share of Xxxxxx Common Stock;
provided, further, that any payment under the LTAP which will become payable in
shares of Xxxxxx Common Stock pursuant to this Section 7.10(b) shall be payable
on the same terms and conditions as were applicable to such payment immediately
before the date of this Agreement. Xxxxxx shall (i) reserve for issuance the
number of shares of Xxxxxx Common Stock that will become payable under the LTAP
pursuant to this Section 7.10 and (ii) from and after the Split-Off Effective
Time, with respect to any payment under the LTAP which is payable in shares of
Xxxxxx Common Stock, make available for issuance all such shares of Xxxxxx
Common Stock, subject to the terms and conditions applicable thereto.
(c) Restricted stock units with respect to GM Class H
Common Stock and other incentive compensation awards payable in, or determined
by reference to, shares of GM Class H Common Stock will be converted into an
equal number of restricted stock units (or incentive compensation awards) with
respect to Xxxxxx Common Stock.
(d) If and to the extent required by the terms of the
LTAP, any awards under the LTAP, any applicable stock option plan or pursuant to
the terms of any applicable Options or restricted stock units (or incentive
compensation awards), GM and Xxxxxx shall use reasonable best efforts to obtain
the consent of each holder of outstanding Options or restricted stock units (or
incentive compensation awards) to the treatment of such Options and restricted
stock units (or incentive compensation awards), and such rights to payment under
the LTAP, in accordance with this Section 7.10.
(e) Prior to the Split-Off Effective Time, the Board of
Directors of GM or an appropriate committee of non-employee directors thereof,
and/or the Board of Directors of Xxxxxx or an appropriate committee of
non-employee directors thereof, as applicable, shall adopt one or more
resolutions consistent with the interpretive guidance of the SEC, so that the
disposition of each Option and the acquisition or disposition of any shares of
Xxxxxx Common Stock, any Exchange Options or any other equity securities or
derivative securities of Xxxxxx in connection with the Transactions by each
officer or director of GM or Xxxxxx or any other Person, in each case who is or
who may become subject to Section 16 of the Exchange Act with respect to Xxxxxx,
shall be exempt for purposes of Section 16 of the Exchange Act.
44
7.11 GM Charter Amendment. The parties acknowledge that (i) the
filing and effectiveness of the GM Charter Amendment is a condition of the
Xxxxxx Separation Transactions and will be required in order to permit the
Xxxxxx Common Stock Exchange, and (ii) the GM Charter Amendment will be filed
and become effective only after obtaining the Requisite Stockholder Approval of
the Requisite Vote Matters as contemplated by this Agreement.
7.12 Xxxxxx Charter and By-law Amendments. Xxxxxx shall use
reasonable best efforts to take all actions within its control legally required
such that, as of immediately prior to the Split-Off Effective Time, (i) the
Xxxxxx Certificate of Incorporation shall have been amended to read in its
entirety substantially as set forth in the certificate of incorporation attached
hereto as Exhibit D (the "Xxxxxx Charter Amendment") and (ii) the By-laws of
Xxxxxx shall have been amended to read in their entirety substantially as set
forth in the by-laws attached hereto as Exhibit E (the "Xxxxxx By-laws
Amendment").
7.13 Elimination of GM Class H Common Stock from GM Certificate
of Incorporation. The parties acknowledge that it is GM's current intention,
following the redemption of the outstanding GM Class H Common Stock in
connection with the Transactions, to amend and restate the GM Certificate of
Incorporation to eliminate the GM Class H Common Stock from the GM Certificate
of Incorporation. At GM's election, GM may include in the Proxy/Consent
Solicitation Statement a separate proposal to GM common stockholders to amend
the GM Certificate of Incorporation in accordance with Applicable Law to
eliminate the GM Class H Common Stock from the GM Certificate of Incorporation
at any time determined by GM in its sole and absolute discretion (provided, that
such time shall not be earlier than the time of the consummation of the Xxxxxx
Common Stock Exchange and provided, further, that the approval of such proposal
by the GM common stockholders shall not be a part of the Requisite Stockholder
Approval of the Requisite Vote Matters for purposes of this Agreement).
7.14 Merger Agreement. Immediately after the execution of this
Agreement, each of GM, as the sole stockholder of Xxxxxx, and the Purchaser's
Subsidiary NPAL, as the sole stockholder of Merger Sub, shall approve the Merger
and adopt the Merger Agreement at a meeting of the stockholders of Xxxxxx and
Merger Sub, respectively.
7.15 Pension Transfer Agreement. Except as contemplated by
Section 3(b) of the GM Employee Benefit Plans Transfer Agreement, GM agrees not
to release the GM Employee Benefit Plans from any of their obligations,
including restrictions on transfer of GM Class H Common Stock, Xxxxxx Common
Stock or Surviving Corporation Common Stock (or any successor securities) under
the GM Employee Benefit Plans Transfer Agreement, without the prior written
consent of the Purchaser. GM agrees not to amend the GM Employee Benefit Plans
Transfer Agreement without the prior written consent of the Purchaser.
45
ARTICLE VIII
CONDUCT OF BUSINESS
8.1 Conduct of Business of Xxxxxx. During the period from the
date of this Agreement to the Closing, except (i) as contemplated by the Xxxxxx
Transaction Agreements and the transactions contemplated hereby and thereby,
including the consummation of the Transactions and (ii) as otherwise set forth
in Section 8.2 of the Xxxxxx Disclosure Schedule, Xxxxxx shall, and shall cause
its Subsidiaries to, (x) conduct their businesses and operations in the ordinary
course, consistent with past practice, and (y) shall use their reasonable best
efforts to maintain and preserve their business organization and their material
rights and franchises and to retain the services of their officers and key
employees and maintain relationships with customers, suppliers, lessees,
licensees and other third parties to the end that their goodwill and ongoing
business shall not be impaired in any material respect.
8.2 Restrictions on Conduct of Business. Without limiting the
generality of the terms of Section 8.1 hereof, during the period from the date
of this Agreement to the Closing, except as contemplated by the Xxxxxx
Transaction Agreements and the transactions contemplated hereby and thereby,
including the consummation of the Transactions, and except as otherwise set
forth in Section 8.2 of the Xxxxxx Disclosure Schedule, Xxxxxx shall not and
shall cause its Subsidiaries not to, without the prior written consent of the
Purchaser (which consent shall not be unreasonably withheld or delayed):
(a) do or effect any of the following actions with
respect to Xxxxxx' or any of its Subsidiaries' securities: (i) adjust, split,
combine, recapitalize or reclassify its capital stock; (ii) except for the
Xxxxxx Common Stock Exchange and the Special Dividend, make, declare or pay any
dividend on (other than dividends to Xxxxxx or its Subsidiaries), or directly or
indirectly redeem, purchase or otherwise acquire, any shares of its capital
stock or any securities or obligations convertible into or exchangeable for any
shares of its capital stock; (iii) grant any Person any right or option to
acquire any shares of capital stock (other than options or rights issued to
directors and employees of Xxxxxx or its Subsidiaries as set forth in Section
8.2(a)(iii) of the Xxxxxx Disclosure Schedule); (iv) except with respect to the
Xxxxxx Common Stock Exchange, issue, deliver or sell or agree to issue, deliver
or sell any additional shares of its capital stock or any securities,
instruments or obligations convertible into or exchangeable or exercisable for
any shares of its capital stock or such securities (except pursuant to the
exercise of outstanding options or rights and options or rights issued to
directors and employees after the date hereof by Xxxxxx or its Subsidiaries as
set forth in Section 8.2(a)(iv) of the Xxxxxx Disclosure Schedule); or (v) enter
into any agreement, understanding or arrangement with respect to the sale or
voting of its capital stock;
(b) permit any Person other than GM to own any shares of
Xxxxxx' issued and outstanding capital stock;
46
(c) sell, transfer, lease, pledge, mortgage, encumber or
otherwise dispose of any amount of Xxxxxx' or any of its Subsidiaries' property
or assets that is material to Xxxxxx and its Subsidiaries, taken as a whole,
including any Material Real Property, other than in the ordinary course of
business consistent with past practice, or terminate any contract or right
relating to any Material Real Property;
(d) make or propose any changes in its certificate of
incorporation or by-laws (or equivalent organizational documents);
(e) merge or consolidate with any other Person or
acquire assets or capital stock of any other Person which are material to Xxxxxx
and its Subsidiaries, taken as a whole or enter into any confidentiality
agreement with any Person with respect to any such transaction;
(f) create any Subsidiaries which are material to Xxxxxx
and its Subsidiaries taken as a whole and which are not, directly or indirectly,
wholly owned by Xxxxxx;
(g) enter into or modify any Xxxxxx Plan or other
employment, severance, change in control, termination or similar agreements or
arrangements with, or grant any bonuses, salary increases, severance or
termination pay to, or otherwise increase the compensation or benefits of, any
officer, director, consultant or employee of Xxxxxx or its Subsidiaries, other
than, in each case, in the ordinary course of business consistent with past
practice as summarized in Section 8.2(g) of the Xxxxxx Disclosure Schedule or as
may be required by Applicable Law or a binding written contract in effect on the
date of this Agreement;
(h) except as may be required by Applicable Law or by
accounting principles, change any method or principle of accounting in a
material manner that is inconsistent with past practice;
(i) amend the Transaction Agreements to which the
Purchaser is not a party;
(j) take any action that would reasonably be expected to
result in any representations and warranties set forth in Articles IV and V
becoming false or inaccurate such that the condition set forth in Section
10.2(a) would fail to be satisfied;
(k) except as described in Section 8.2(k) of the Xxxxxx
Disclosure Schedule, incur any material indebtedness or amend the terms of any
existing material indebtedness;
(l) except as contemplated by the Joint Defense
Agreement, settle any Actions, whether now pending or hereafter made or brought,
or enter into any consent decree, injunction or similar restraint or form of
equitable relief in settlement of
47
any Action, in each case on terms which include a material limitation on the
business or operations of Xxxxxx after the Closing Date;
(m) except as set forth in Section 8.2(m) of the Xxxxxx
Disclosure Schedule, (i) enter into any joint venture, partnership or other
similar arrangement that is material to Xxxxxx and its Subsidiaries taken as a
whole or (ii) enter into any transaction described on Section 8.2(m)(ii) of the
Xxxxxx Disclosure Schedule; or
(n) agree in writing or otherwise to take any of the
foregoing actions.
8.3 Permit Matters. During the period from the date of this
Agreement to the Closing, Xxxxxx shall and shall cause its Subsidiaries to use
reasonable best efforts to maintain and preserve the Xxxxxx Permits, other than
those Xxxxxx Permits the loss of which would not, in the aggregate, have or
reasonably be expected to have a Xxxxxx Material Adverse Effect.
ARTICLE IX
ADDITIONAL AGREEMENTS
9.1 Preparation and Filing of the Registration Statements, the
Proxy/Consent Solicitation Statement and Other Filings.
(a) As soon as reasonably practicable after the date of
this Agreement, the parties shall cooperate fully with each other in connection
with the preparation of the Registration Statements, the Proxy/Consent
Solicitation Statement and any other statements, reports or filings with the SEC
or state or foreign securities regulators relating to the Transactions and any
other materials to be disseminated by GM to its stockholders in connection with
the Transactions (the foregoing being collectively referred to herein as the
"Disclosure Documents"). Each of the Purchaser, GM and Xxxxxx, as and to the
extent applicable, shall take all commercially reasonable actions in order to
cause the Registration Statements and any other Disclosure Documents, including
any and all amendments thereto, to be executed and filed with the SEC and
submitted or filed with any applicable foreign and state securities law
regulators in accordance with Applicable Law, in each case as soon as reasonably
practicable after the date hereof. The parties shall promptly provide each other
with copies of, and consult with each other and prepare written responses with
respect to, any written comments received from the SEC and other state and
foreign securities regulators with respect to the Registration Statements, the
Proxy/Consent Solicitation Statement and any other Disclosure Documents and
promptly advise each other of any oral comments received from the SEC and other
state and foreign securities regulators, and, to the extent reasonably
practicable under the circumstances, shall offer a reasonable opportunity to
appropriate representatives of the other parties to participate in any telephone
calls with the SEC or any state or foreign securities regulator the purpose of
which is to discuss
48
comments made by such regulators. The parties shall respond to any comments made
by the SEC or any state or foreign securities regulator as soon as reasonably
practicable following the receipt of such comments (it being understood and
agreed that GM shall be expressly permitted to respond as it deems appropriate
(subject to Purchaser's concurrence therewith, which concurrence shall not be
unreasonably withheld or delayed) to any comments by the SEC or any state or
foreign securities regulators relating to the formulation of the Requisite Vote
Matters to be submitted by GM to its stockholders for approval). No amendment or
supplement to any Registration Statement, the Proxy/Consent Solicitation
Statement or any other Disclosure Document (or any related materials) will be
filed or submitted to the SEC or any state or foreign regulator or publicly
disseminated by any of the parties without the approval of the other parties,
which shall not be unreasonably withheld or delayed. The parties shall use
reasonable best efforts to cause the Registration Statements to be declared
effective by the SEC and to obtain appropriate approvals from all other
applicable foreign and state securities law regulators in accordance with
Applicable Law, except for any such approvals the failure of which would not
reasonably be expected to have a material adverse impact on the ability of the
parties to consummate the transactions contemplated by the Transaction
Agreements. The parties shall take all other actions with respect to the
preparation and delivery of the Registration Statements, the Proxy/Consent
Solicitation Statement and any other Disclosure Documents as required by Section
7.2 hereof.
(b) The Purchaser shall, and shall cause Merger Sub to,
promptly furnish Xxxxxx and GM with all information concerning the Purchaser,
Merger Sub and, to the extent applicable and obtainable by the Purchaser or
Merger Sub using reasonable best efforts, any Purchaser Affiliate, as may be
requested for inclusion in the Registration Statements. GM and Xxxxxx shall
promptly furnish the Purchaser with all information concerning GM, Xxxxxx, any
Subsidiary of Xxxxxx (other than PanAmSat and HSSL) or, to the extent obtainable
by GM or Xxxxxx using reasonable best efforts, PanAmSat and HSSL, as may be
requested for inclusion in the Registration Statements. If at any time prior to
the Merger Effective Time, any information pertaining to the Purchaser or Merger
Sub contained in or omitted from the Registration Statements makes the
statements contained therein false or misleading, the Purchaser shall promptly
inform Xxxxxx and GM and shall promptly provide the information necessary to
make the statements contained therein not false or misleading. If at any time
prior to the Merger Effective Time, any information pertaining to any Purchaser
Affiliate contained in or omitted from the Registration Statements, to the
knowledge of the Purchaser, makes the statements contained therein false or
misleading, the Purchaser shall promptly inform Xxxxxx and GM and shall use
reasonable best efforts to promptly provide the information necessary to make
the statements contained therein not false or misleading. If at any time prior
to the Merger Effective Time, any information pertaining to GM, Xxxxxx or any
Subsidiary of Xxxxxx (other than PanAmSat or HSSL) contained in or omitted from
the Registration Statements makes the statements contained therein false or
misleading, Xxxxxx and GM shall promptly inform the Purchaser and shall promptly
provide the information necessary to make the statements contained therein not
false or misleading. If at any time prior to the Merger Effective Time, any
information pertaining to
49
PanAmSat or HSSL contained in or omitted from the Registration Statements, to
the Knowledge of Xxxxxx, makes the statements contained therein false or
misleading, Xxxxxx shall promptly inform GM and the Purchaser and shall use
reasonable best efforts to promptly provide the information necessary to make
the statements contained therein not false or misleading.
(c) The Purchaser shall, and shall cause Merger Sub to,
promptly furnish GM with all information concerning the Purchaser, Merger Sub
and, to the extent obtainable by the Purchaser or Merger Sub using reasonable
best efforts, any Purchaser Affiliate, as may be requested for inclusion in the
Proxy/Consent Solicitation Statement or any other Disclosure Document. Xxxxxx
shall promptly furnish GM with all information concerning Xxxxxx, any Subsidiary
of Xxxxxx (other than PanAmSat and HSSL) or, to the extent obtainable by Xxxxxx
using reasonable best efforts, PanAmSat and HSSL, as may be requested for
inclusion in the Proxy/Consent Solicitation Statement or any other Disclosure
Document. GM and Xxxxxx shall promptly furnish the Purchaser with all
information concerning GM, Xxxxxx, any Subsidiary of Xxxxxx (other than PanAmSat
and HSSL) or, to the extent obtainable by GM or Xxxxxx using reasonable best
efforts, PanAmSat and HSSL, as may be requested for inclusion in the
Proxy/Consent Solicitation Statement or any other Disclosure Document. If at any
time prior to the Merger Effective Time, any information pertaining to the
Purchaser or Merger Sub contained in or omitted from the Proxy/Consent
Solicitation Statement or any other Disclosure Document makes the statements
contained therein false or misleading, the Purchaser shall promptly inform GM
and shall promptly provide the information necessary to make the statements
contained therein not false or misleading. If at any time prior to the Merger
Effective Time, any information pertaining to any Purchaser Affiliate contained
in or omitted from the Proxy/Consent Solicitation Statement or any other
Disclosure Document, to the knowledge of the Purchaser, makes the statements
contained therein false or misleading, the Purchaser shall promptly inform GM
and use reasonable best efforts to promptly provide the information necessary to
make the statements contained therein not false or misleading. If at any time
prior to the Merger Effective Time, any information pertaining to Xxxxxx or any
Subsidiary of Xxxxxx (other than PanAmSat or HSSL) contained in or omitted from
the Proxy/Consent Solicitation Statement or any other Disclosure Document makes
the statements contained therein false or misleading, Xxxxxx shall promptly
inform GM and the Purchaser and shall promptly provide the information necessary
to make the statements contained therein not false or misleading. If at any time
prior to the Merger Effective Time, any information pertaining to PanAmSat or
HSSL contained in or omitted from the Proxy/Consent Solicitation Statement or
any other Disclosure Document, to the Knowledge of Xxxxxx, makes the statements
contained therein false or misleading, Xxxxxx shall promptly inform GM and the
Purchaser and use reasonable best efforts to promptly provide the information
necessary to make the statements contained therein not false or misleading. If
at any time prior to the Merger Effective Time, any information pertaining to GM
contained in or omitted from the Proxy/Consent Solicitation Statement or any
other Disclosure Document makes the statements contained therein false or
50
misleading, GM shall promptly inform the Purchaser and shall promptly provide
the information necessary to make the statements contained therein not false or
misleading.
9.2 Access to Information. Except as required by any confidentiality
agreement to which GM, Xxxxxx or any of their Subsidiaries, on the one hand, or
the Purchaser or any of its Subsidiaries, on the other hand, is a party or
pursuant to Applicable Law, from and after the date of this Agreement until the
Closing (or the termination of this Agreement), Xxxxxx shall (i) permit
representatives of the Purchaser to have reasonable access to the properties,
books, records, contracts, tax records and documents of Xxxxxx and its
Subsidiaries, to the extent related to the businesses of Xxxxxx and its
Subsidiaries, at all reasonable times, and in a manner so as not to interfere
with the normal operation of Xxxxxx' and its Subsidiaries' premises and
businesses and (ii) furnish promptly such information concerning Xxxxxx' and its
Subsidiaries' businesses as the Purchaser or its representatives may reasonably
request. Such access shall be limited to the extent that antitrust counsel to
any party hereto determines that such limitation is advisable under applicable
Antitrust Law. Information obtained by the Purchaser pursuant to this Section
9.2 shall be subject to the provisions of the confidentiality agreement among
GM, Xxxxxx and the Purchaser, dated February 12, 2003 (as amended, modified or
supplemented from time to time, the "Confidentiality Agreement"), which
agreement remains in full force and effect.
9.3 Reasonable Best Efforts to Consummate Transactions. Each of the
parties hereto shall use reasonable best efforts (except where a different
efforts standard is specifically contemplated by the Transaction Agreements, in
which case such different standard shall apply) to take all action and to do all
things necessary, proper or advisable to consummate the transactions
contemplated by the Transaction Agreements (including using reasonable best
efforts to cause the conditions set forth in Article X for which such party is
responsible to be satisfied as soon as practicable and to prepare, execute and
deliver such further instruments and take or cause to be taken such other and
further action as any other party hereto shall reasonably request).
9.4 Regulatory Matters.
(a) As soon as practicable, and in any event within twenty (20)
Business Days after the date hereof, each of the parties hereto shall file any
Notification and Report Forms and related material required to be filed by it
with the Federal Trade Commission and the Antitrust Division of the United
States Department of Justice under the HSR Act and any similar required
competition law filings under the laws of any foreign jurisdiction with respect
to the transactions contemplated by this Agreement and shall promptly make any
further filings pursuant thereto that may be necessary, proper or advisable.
(b) As soon as practicable, and in any event within twenty (20)
Business Days after the date hereof, each of the parties hereto shall make, and
shall cause its Subsidiaries to make, all necessary filings with or applications
to any Governmental Authority that has issued a Xxxxxx Permit with respect to
the transactions contemplated
51
by the Transaction Agreements, including any necessary applications to the FCC
for its consent to the transactions contemplated hereby with respect to the
Xxxxxx FCC Licenses (the "FCC Consent Application").
(c) The parties shall: (i) use their reasonable best efforts to
obtain prompt termination of any waiting period under the HSR Act (including any
extension of the initial thirty (30) day waiting period with respect to the
purchase and sale of the Shares and the Transactions); (ii) furnish to the other
parties such information and assistance as such parties reasonably may request
in connection with the preparation of any submissions to, or agency proceedings
by, any Governmental Authority under any Antitrust Law; (iii) keep the other
parties promptly apprised of any communications with, and inquiries or requests
for information from, such Governmental Authorities; (iv) permit the other
parties to review any material communication given by it to, and consult with
the other parties in advance of any meeting or conference with, any such
Governmental Authority or, in connection with any proceeding by a private party,
with any other Person, and to the extent permitted by such applicable
Governmental Authority or other Person, give the other parties the opportunity
to attend and participate in such meetings and conferences; and (v) use their
reasonable best efforts to cause the conditions set forth in Sections 10.1(a),
10.1(b), 10.3(e) and 10.3(f) of this Agreement to be satisfied (including, in
the case of Sections 10.3(e) and (f), to the extent the Closing is effected
notwithstanding the failure of such conditions to be satisfied, using their
reasonable best efforts to cause such conditions to be satisfied as promptly as
practicable following Closing). For the purposes of this Agreement, "Antitrust
Law" means the Xxxxxxx Act, as amended, the Xxxxxxx Act, as amended, the HSR
Act, the Federal Trade Commission Act, as amended, and all other federal, state
and foreign statutes, rules, regulations, orders, decrees, administrative and
judicial doctrines and other laws that are designed or intended to prohibit,
restrict or regulate actions having the purpose or effect of monopolization or
restraint of trade or lessening of competition through merger or acquisition.
(d) Each party shall, and shall cause its Subsidiaries to, (i)
use reasonable best efforts to diligently prosecute all applications with the
FCC, including the FCC Consent Application, and all similar foreign Governmental
Authorities for consent to the transactions contemplated herein, (ii) furnish to
the other parties such information and assistance as such parties reasonably may
request in connection with the preparation or prosecution of any such
applications, (iii) keep the other parties promptly apprised of any
communications with, and inquiries or requests for information from, such
Governmental Authorities with respect to the transactions contemplated hereby,
and (iv) use its reasonable best efforts to cause the condition set forth in
Section 10.1(c) of this Agreement to be satisfied.
(e) In furtherance and not in limitation of the covenants of the
parties contained in Sections 9.4(a), (b), (c) and (d), each party agrees to use
its reasonable best efforts to address such objections, if any, as may be
asserted with respect to the transactions contemplated hereby under the
Communications Act of 1934, as amended, the Telecommunications Act of 1996, any
rule, regulation or policy of the
52
FCC, and/or any statute, rule, regulation or policy of any other Governmental
Authority with respect to the operation of channels of radio communication
and/or the provision of communications services (including the provision of
direct-to-home video programming) (collectively, "Communications Regulation") or
any Antitrust Law. In connection with the foregoing, each party agrees to
cooperate and use its reasonable best efforts to assist in any defense by any
other party hereto of the Merger and the other transactions contemplated by this
Agreement before any Governmental Authority reviewing the Merger and the other
transactions contemplated by this Agreement, including by promptly providing
such information as may be reasonably requested by such Governmental Authority
or such assistance as may be reasonably requested by the other party hereto in
such defense. In addition, the parties, as provided in Section 9.4(f) below,
agree to, and agree to cause their respective Affiliates to, abide by the
program-access related undertakings and commitments set forth in Exhibit F
hereto.
(f) If any objections are asserted with respect to the
transactions contemplated hereby under any Antitrust Law or any Communications
Regulation or if any suit is instituted by any Governmental Authority or any
private party challenging any of the transactions contemplated hereby as
violative of any Antitrust Law or Communications Regulation, the parties shall
use their reasonable best efforts to resolve any such objections or challenge as
such Governmental Authority or private party may have to such transactions under
such law so as to permit consummation of the transactions contemplated by this
Agreement. In furtherance of the parties' obligations under this Section 9.4,
the Purchaser and Xxxxxx shall be required to (and, to the extent required by
any Governmental Authority, shall cause their respective current and future
Affiliates to), propose, negotiate, commit to and enter into one or more
settlements, undertakings, conditions, consent decrees, stipulations and other
agreements with or to one or more Governmental Authorities (each, a
"Settlement") in connection with the transactions contemplated by this Agreement
(including obtaining the requisite consent of such Governmental Authorities),
including one or more Settlements that require the Purchaser or Xxxxxx to (i)
abide by the program-access related undertakings and commitments set forth on
Exhibit F hereto and any additional or modified program-access related
undertakings and commitments that may be reasonably required to facilitate a
Settlement with any such Governmental Authority and (ii) restructure the
operations of, and sell or otherwise divest or dispose of its assets and/or the
assets of its current and future Affiliates (other than any requirement to
divest or dispose of capital stock of Xxxxxx); provided, however, that (I) (A)
neither the Purchaser nor any Purchaser Affiliate shall be required to take (or
direct the taking of) any of the foregoing actions, or any other action
contemplated by this Section 9.4, (i) if any such actions would reasonably be
expected to have a material adverse effect on the business or operations of the
Purchaser or any material Purchaser Affiliate or any material business segment
of the Purchaser or of a material Purchaser Affiliate or (ii) if the Board of
Directors of the Purchaser determines, in good faith, that the taking of such
actions would be reasonably likely to have a material adverse effect on the
anticipated economic or business benefits of the Stock Sale or any of the
Transactions (collectively, the "Purchaser Materiality Exceptions"), (B) neither
Xxxxxx nor any Xxxxxx Affiliate shall take (or commit to take)
53
any of the foregoing actions that would reasonably be expected to have a
material adverse effect on the business or operations of Xxxxxx or any Xxxxxx
Affiliate or any material business segment of Xxxxxx or any Xxxxxx Affiliate
without the prior written consent of the Purchaser, and (C) neither Xxxxxx nor
any Xxxxxx Affiliate shall be required to take (or commit to take) any of the
foregoing actions or any other actions required by this Section 9.4 that would
reasonably be expected to have a material adverse effect on the business or
operations of Xxxxxx or any Xxxxxx Affiliate or any material business segment of
Xxxxxx or any Xxxxxx Affiliate; provided, further, that a Settlement that
consists of the undertakings and commitments set forth on Exhibit F hereto
without any further actions being required to be taken (or committed to being
taken), other than such actions as would (x) be reasonably contemplated to be
taken (or committed to be taken) by such undertakings and commitments and (y)
not be material to the business or operations of the Purchaser or any material
Purchaser Affiliate or any material business segment of the Purchaser or of a
material Purchaser Affiliate, will not constitute a Purchaser Materiality
Exception, and (II) that the provisions of clause (I) above shall not apply in
respect of Settlements with Specified Foreign Governmental Authorities, the
terms of which Settlements shall (i) prior to Closing, be determined by the
Purchaser and Xxxxxx acting together in good faith and (ii) following Closing,
to the extent the Purchaser and Xxxxxx have not previously obtained all required
consents, waivers, approvals or other authorizations of Specified Foreign
Governmental Authorities required in connection with the Transactions (or which
the Purchaser and Xxxxxx determine should be obtained in connection with the
Transactions), be determined by the Purchaser and Xxxxxx acting together in good
faith, with any determinations by Xxxxxx to be made by a majority of the Xxxxxx
Independent Directors (as defined in the Xxxxxx By-Laws); provided, however,
that (x) neither Xxxxxx nor any Xxxxxx Affiliate, nor the Purchaser nor any
Purchaser Affiliate shall be required to take (or commit to take) any action
with respect to any Specified Foreign Governmental Authority that is not
conditioned upon the Closing of the transactions contemplated hereby, (y) the
parties will act in such a manner as to minimize the aggregate cost of any
Settlement to the parties and (z) neither the Xxxxxx Indemnitees nor the GM
Indemnitees shall be required to waive or limit their rights to indemnification
under Section 13.2.
(g) Notwithstanding anything to the contrary herein, nothing in
this Section 9.4 shall (i) limit either GM's or the Purchaser's right to
terminate this Agreement pursuant to Sections 3.2(b)(i) or 3.2(b)(ii) hereof, or
(ii) require any party to amend this Agreement or any other Transaction
Agreement or to waive or forbear from exercising any of its rights or remedies
hereunder or under any other Transaction Agreement.
9.5 [Intentionally Omitted]
9.6 No Solicitation.
(a) Each of GM and Xxxxxx agrees that, during the term of this
Agreement, it shall not, nor shall it permit any of its Subsidiaries to, nor
shall it authorize or knowingly permit any of its or its Subsidiaries' officers,
directors, employees,
54
investment bankers, attorneys, accountants, agents or other advisors or
representatives (collectively, "Representatives"), directly or indirectly, to:
(i) solicit, initiate or knowingly facilitate or encourage
the making by any Person (other than the other parties hereto) of any
proposal, offer or inquiry that constitutes, or could reasonably be
expected to lead to, a proposal for any merger, consolidation or other
business combination involving Xxxxxx and a third party, or any acquisition
by a third party of any capital stock or any material portion of the assets
(except for (A) acquisitions of assets in the ordinary course of business
consistent with past practice and permitted by Section 8.2 of this
Agreement, (B) dispositions of the assets or capital stock of DIRECTV Latin
America, LLC ("DIRECTVLA") pursuant to an order or orders of a court of
competent jurisdiction and (C) consummation of the transactions
contemplated by the Transaction Agreements) of Xxxxxx or any of its
Significant Subsidiaries, or shares of GM Class H Common Stock or any
combination of the foregoing (in each case, a "Competing Transaction");
(ii) participate in any discussions or negotiations
regarding, or furnish or disclose to any Person any information with
respect to or in furtherance of, or take any other action knowingly to
facilitate any inquiries with respect to any Competing Transaction;
(iii) grant any waiver or release under any standstill or
similar agreement with respect to Xxxxxx or any of its Subsidiaries; or
(iv) execute or enter into any agreement, understanding or
arrangement (other than a confidentiality agreement) with respect to any
Competing Transaction, or approve or recommend or propose to approve or
recommend any Competing Transaction or any agreement, understanding or
arrangement relating to any Competing Transaction (or resolve or authorize
or propose to agree to do any of the foregoing actions);
provided, however, that:
(A) at any time prior to such time, if any, that the Requisite
Stockholder Approval shall have been received with respect to the Requisite Vote
Matters, GM and Xxxxxx may take any action described in the foregoing clauses
(ii) or (iii) (in the case of clause (iii), only to the extent necessary to
permit the discussions or negotiations contemplated by clause (ii)) in respect
of any Person, but only if (1) such Person has delivered a proposal for a
Competing Transaction that, in the good faith judgment of the GM Board of
Directors is a Superior Proposal or is reasonably likely to lead to the delivery
of a Superior Proposal and (2) the Board of Directors of GM, after consultation
with counsel, determines in good faith that it is required to do so in order to
comply with its fiduciary duties; provided, further, that (x) prior to GM or
Xxxxxx furnishing any confidential information to such Person, such Person shall
have entered into a confidentiality agreement with GM and/or Xxxxxx in substance
substantially
55
similar to the Confidentiality Agreement and (y) GM and Xxxxxx shall promptly
notify (but in no event later than 48 hours) the Purchaser of any such
inquiries, proposals or offers received by, any such information requested from,
or any such discussions or negotiations sought to be initiated or continued
with, any of its Representatives indicating, in connection with such notice, the
name of such Person and the material terms and conditions of any inquiries,
proposals or offers, and shall keep the Purchaser reasonably informed as to the
status thereof;
(B) each of GM and Xxxxxx may enter into any agreement or arrangement
(other than a confidentiality agreement, which may be entered into as
contemplated in this Section 9.6) regarding any such Competing Transaction, or
approve or recommend to its stockholders (or resolve to do so), or publicly
propose to approve or recommend to its stockholders, any such Competing
Transaction, but only if (1) GM has first given the Purchaser at least
seventy-two (72) hours to respond to such Competing Transaction after GM has
notified the Purchaser that, in the absence of any further action by the
Purchaser, it would consider such Competing Transaction to be a Superior
Proposal and would be required to withdraw, revoke or modify its recommendation
of the Requisite Vote Matters, and given due consideration to any amendments or
modifications to this Agreement proposed by the Purchaser during such period and
(2) thereafter GM has terminated this Agreement in accordance with Section
3.2(c)(iii) hereof and simultaneously paid the GM Termination Fee pursuant to
Section 3.4(a)(iv) hereof; and
(C) nothing herein shall limit GM's ability to comply in good faith,
to the extent applicable, with Rules 14d-9 and 14e-2 of the Exchange Act with
regard to a tender or exchange offer or to make any disclosure required by
Applicable Law.
(b) For the purposes of this Agreement, "Superior Proposal" means
a bona fide, written proposal by a third party for a Competing Transaction not
solicited in violation of this Section 9.6 that is on terms that the GM Board of
Directors determines in good faith, after consultation with its financial
advisors and counsel, would, if consummated, result in a transaction that would
be more favorable to GM and its stockholders (taking into account such factors
as the GM Board of Directors in good xxxxx xxxxx relevant, including the
identity of the offeror and all legal, financial, regulatory and other aspects
of the proposal, including the terms of any financing and the likelihood that
the transaction will be consummated) than the transactions contemplated by the
Transactions.
(c) Each of GM and Xxxxxx agrees that it will, and will cause its
Subsidiaries and its and their respective Representatives to, cease and cause to
be terminated immediately all existing discussions or negotiations with any
Persons conducted on or before the date hereof with respect to any Competing
Transaction. The Purchaser acknowledges that, prior to the date of this
Agreement, GM and Xxxxxx solicited or caused to be solicited by their respective
financial advisors indications of interest and proposals for a Competing
Transaction.
56
9.7 Pre-Closing Cooperation Regarding Tax Ruling and Related Matters.
(a) As soon as reasonably practicable after the date of this
Agreement, GM shall submit to the IRS a request (the "Ruling Request") for the
Ruling, and any other ruling in connection with the Split-Off that GM, in
consultation with the Purchaser, deems to be appropriate. The initial Ruling
Request and any supplemental materials submitted to the IRS relating thereto
(each, an "IRS Submission") shall be prepared by GM. GM shall provide the
Purchaser and Xxxxxx with a reasonable opportunity to review and comment on each
IRS Submission prior to the filing of such IRS Submission with the IRS; provided
that GM may redact from any IRS Submission any information ("Redactable
Information") that (i) GM, in its good faith judgment, considers to be
confidential and not germane to the Purchaser's or Xxxxxx' obligations under the
Transaction Agreements and (ii) is not (and is not reasonably expected to
become) a part of any other publicly available information, including any
non-confidential filing; provided, further, that any information that GM
proposes to redact shall be provided to a senior tax partner in the law firm of
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP ("Skadden") designated by the Purchaser
(the "Purchaser Tax Advisor"), upon receipt by GM of an acknowledgement and
undertaking by the Purchaser Tax Advisor that the information provided to the
Purchaser Tax Advisor shall be held in strict confidence (including from other
attorneys at Skadden and from the Purchaser and its other Representatives). The
Purchaser hereby agrees to the limitations on the use of the information placed
on the Purchaser Tax Advisor and hereby waives any claim to such information,
whether pursuant to the Purchaser Tax Advisor's duty of loyalty to the Purchaser
or otherwise. The Purchaser Tax Advisor shall make his or her own determination
as to whether the information that GM proposes to redact is germane to the
Purchaser's or Xxxxxx' obligations under the Transaction Agreements ("Germane").
If the Purchaser Tax Advisor concludes that the information is Germane, then the
Purchaser Tax Advisor may request that GM waive the confidentiality requirement
with respect to such information solely to allow the Purchaser Tax Advisor to
disclose such information to the Purchaser. GM shall consider in good faith any
such request by the Purchaser Tax Advisor, and if GM determines that the
information proposed to be redacted by GM is Germane, then GM shall waive the
confidentiality requirement described above with respect to such information
solely as may be necessary to permit the Purchaser Tax Advisor to disclose such
information to the Purchaser. If GM again determines that the information
proposed to be redacted by GM is not Germane, then the matter shall be resolved
in accordance with Section 14.15 of this Agreement, in which event the Purchaser
Tax Advisor shall be entitled to disclose any such information to other
attorneys at Skadden and to the Chief Financial Officer, one (1) Deputy Chief
Financial Officer, the General Counsel and one (1) Deputy General Counsel of the
Purchaser, each of whom shall agree to hold such information in strict
confidence, solely for the purpose of any such arbitration in accordance with
Section 14.15 of this Agreement and not to use such information directly or
indirectly in a manner adverse to the interests of Xxxxxx and GM (except
pursuant to such arbitration). Notwithstanding anything to the contrary
contained in this paragraph (a), but subject to the provisions of Section
9.7(c), GM shall
57
have the right (without regard to the provisions of this proviso) to submit any
redacted information to the IRS at such time or times as GM may determine.
(b) The Purchaser and Merger Sub promptly shall furnish GM with
all information concerning both of them as may reasonably be requested by GM (i)
for inclusion in the Ruling Request or any other IRS Submission and (ii) for use
by Xxxxxxxx & Xxxxx, special counsel to GM ("Tax Counsel"), in preparing its
opinions to the effect that the recapitalization of the GM $1-2/3 Common Stock
and the GM Class H Common Stock arising from the adoption of the GM Charter
Amendment will be tax free to GM, the holders of the GM $1-2/3 Common Stock and
the holders of the GM Class H Common Stock, and the GM Class H Common Stock is
stock of GM for United States federal income tax purposes (the "Tax Opinions").
The Purchaser and Merger Sub shall cooperate in good faith with GM in the
preparation of the Ruling Request and any other IRS Submission and shall make
their respective officers, employees, advisors and others associated with the
Purchaser or Merger Sub available for meetings with GM and the IRS as reasonably
requested by GM. The Purchaser and Merger Sub shall make a good faith effort to
provide GM with such representations and warranties and such covenants as may be
requested by the IRS or reasonably requested by GM in connection with the Ruling
Request or any other IRS Submission or reasonably requested by GM with respect
to the Tax Opinions.
(c) No IRS Submission shall be filed with the IRS unless, prior
to such filing, the Purchaser shall have agreed in writing as to the contents of
such IRS Submission, but the Purchaser's written agreement shall be necessary
for and apply only to the extent that the IRS Submission (i) includes statements
or representations relating to facts that are or will be under the control of
the Purchaser or any Purchaser Affiliates or (ii) is relevant to, or creates,
any actual or potential obligations of, or limitations on, the Purchaser or any
of its affiliates (including Xxxxxx for periods after the Split-Off Effective
Time), including any such obligations of, or limitations on, the Purchaser or
its affiliates under the Transaction Agreements; provided, however, that if the
IRS requests same-day filing of an IRS Submission that does not include any
material issue or statement, then GM is required only to make a good faith
effort to notify the Purchaser's representatives and to give such
representatives an opportunity to review and comment on such IRS Submission
prior to filing it with the IRS. The Purchaser shall provide GM with the
Purchaser's written agreement (to the extent required by the preceding sentence)
within five (5) Business Days of delivery of the draft IRS Submission to the
Purchaser by GM. If the Purchaser does not deliver its written agreement within
such five (5) Business Day period, the Purchaser will be deemed for all purposes
of this Agreement to have delivered its written agreement to the draft IRS
Submission, unless the Purchaser delivers within such five (5) Business Day
period a specific, written objection to a provision of the draft IRS Submission.
GM's written response to any such written objection shall be deemed the delivery
of a new draft IRS Submission. GM shall provide the Purchaser with copies of
each IRS Submission as filed with the IRS promptly following the filing thereof;
provided that, subject to the procedures with regard to Redactable Information
set forth in paragraph (a) above, GM may redact any Redactable
58
Information from the IRS Submission. Neither GM nor GM's representatives shall
conduct any substantive communications with the IRS regarding any material issue
arising with respect to the Ruling Request, including meetings or conferences
with IRS personnel, whether telephonically, in person or otherwise, without
first notifying the Purchaser or the Purchaser's representatives and giving the
Purchaser (or the Purchaser's representatives) a reasonable opportunity to
participate, and a reasonable number of the Purchaser's representatives, not to
exceed the number of GM's and Xxxxxx' representatives to be present and not to
exceed four (4) in any event, shall have an opportunity to participate in all
conferences or meetings with IRS personnel that take place in person, regardless
of the nature of the issues expected to be discussed.
(d) Each of GM, Xxxxxx and the Purchaser agrees to use reasonable
best efforts to obtain the Ruling and the other rulings set forth in the Ruling
Request.
9.8 Publicity. Unless otherwise required by Applicable Law or
requirements of the NYSE or any other applicable securities exchange (and in
that event only if time does not permit), at all times prior to the earlier of
(i) the Merger Effective Time, (ii) the termination of this Agreement pursuant
to Section 3.2 and (iii) any delivery by GM to the Purchaser of a Notice of
Non-Recommendation, the parties hereto shall consult with each other before
issuing any press release or other public announcement or public communication
(including such communications as would require a filing under Rule 425, Rule
165 and Rule 166 of the Securities Act or Rule 14a-12 of the Exchange Act) with
respect to the transactions and matters contemplated by the Transaction
Agreements and shall not issue any such press release, public announcement or
public communication prior to such consultation; provided, that the initial
press release relating to this Agreement, the Transactions and the other
transactions contemplated by the Transaction Agreements will be a joint press
release. Without limiting the foregoing, at all times prior to the earlier of
(x) the Merger Effective Time or (y) the termination of this Agreement pursuant
to Section 3.2, each of the parties hereto shall use reasonable best efforts to
comply in all material respects with the requirements of Rule 425, Rule 165 and
Rule 166 of the Securities Act and Rule 14a-12 of the Exchange Act.
9.9 Notification of Certain Matters. The Purchaser shall give prompt
notice to GM, and in any event within thirty (30) days of becoming aware
thereof, and GM and Xxxxxx shall give prompt notice to the Purchaser, and in any
event within thirty (30) days of becoming aware thereof, of the occurrence, or
failure to occur, of any event, which occurrence or failure to occur would cause
(i) any representation or warranty contained in this Agreement to be untrue or
inaccurate at or prior to the Closing or (ii) any material failure by the
Purchaser, Xxxxxx or GM, as the case may be, or of any officer, director,
employee or agent thereof, to comply with or satisfy any covenant, condition or
agreement to be complied with or satisfied by it under this Agreement or (iii)
any Xxxxxx Material Adverse Effect or Purchaser Material Adverse Effect. The
parties agree to discuss the matters contained in any such notice promptly
following the delivery thereof. Notwithstanding the foregoing, neither the
delivery of any notice pursuant to this Section 9.9, nor the discussion of the
matters contained therein, shall
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limit or otherwise affect the rights and remedies available hereunder to the
party receiving such notice, including its ability to assert any of the
conditions in Article X hereto.
9.10 Certain Transaction Costs. Except as otherwise provided in the
Transaction Agreements, all costs and expenses incurred by GM, Xxxxxx, the
Purchaser or their respective Affiliates in connection with the Transactions and
any of the other transactions contemplated in connection therewith shall be paid
by the party that actually incurs such costs and expenses. For the avoidance of
doubt, it is understood and agreed that the Purchaser shall pay all filing fees
associated with filing any Registration Statement of the Purchaser or any other
Disclosure Document of the Purchaser with the Securities and Exchange Commission
and any other state and foreign securities law regulators.
9.11 Changes to Transaction Agreements. Each of GM and Xxxxxx agrees
that, prior to the Closing, it will consult with the Purchaser regarding any
changes or amendments that are proposed to be made to, or waivers of provisions
in, the Transaction Agreements, whether before or after any such agreement is
entered into by the respective parties thereto. No such change or amendment or
waiver will be made to the forms or terms of any such agreement attached hereto
or attached to the Separation Agreement without the Purchaser's consent, unless
all such changes and amendments and waivers, taken as a whole, (i) would not
reasonably be foreseen to have an adverse effect on the business, assets,
liabilities or financial condition of Xxxxxx and its Subsidiaries, and (ii) do
not shift responsibility for liabilities between GM and any GM Affiliate, on the
one hand, and Xxxxxx and any Xxxxxx Affiliate, on the other hand, change in any
substantive and non-immaterial respect any conditions or termination provisions,
change any terms or provisions in which a change thereof would be prohibited
after receipt of the Requisite Stockholder Approval, or impair or delay the
consummation of the Transactions. Each of GM and Xxxxxx agrees that, prior to
the Merger Effective Time, it shall not, and shall not permit any of its
affiliates to, terminate any of the GM Transaction Agreements, the Xxxxxx
Transaction Agreements or any of the other agreements contemplated thereby
(other than this Agreement, which may be terminated in accordance with its
terms), other than in the case of automatic termination upon termination of this
Agreement, without the written consent of the Purchaser. Each of GM and Xxxxxx
agrees to deliver promptly to Purchaser copies of any and all notices delivered
by either of such Persons to the other under any of the Transaction Agreements,
with such copies of such notices to be delivered to Purchaser in accordance with
Section 14.4 hereof.
9.12 Director and Officer Indemnification.
(a) The certificate of incorporation and by-laws of the Surviving
Corporation shall contain indemnification provisions, with respect to directors
and officers of Xxxxxx prior to the Merger Effective Time, as set forth in the
Xxxxxx Charter Amendment and the Xxxxxx By-laws Amendment. Such indemnification
provisions shall not be amended, repealed or otherwise modified for a period of
six (6)
60
years after the Merger Effective Time in any manner that would adversely affect
the rights thereunder of individuals who, at any time prior to the Merger
Effective Time, were directors or officers of Xxxxxx in respect of actions or
omissions occurring at or prior to the Merger Effective Time (including the
Merger and the transactions contemplated by this Agreement and the Merger
Agreement), unless and to the extent that such modification is required by
Applicable Law.
(b) For six (6) years after the Merger Effective Time, the
Surviving Corporation (and any successor corporation) shall indemnify, defend
and hold harmless, to the fullest extent permitted under the DGCL, the present
and former officers and directors of Xxxxxx and its Subsidiaries (each a "Xxxxxx
Indemnified Party") against all losses, claims, damages, liabilities, fees and
expenses (including reasonable fees and disbursements of counsel and judgments,
fines, losses, claims, liabilities and amounts paid in settlement (provided that
any such settlement is effected with the written consent of the Surviving
Corporation)) in connection with any claim, suit, action, proceeding or
investigation (a "Claim") that is, in whole or in part, based on or arising out
of the fact that such Person is or was a director or officer of Xxxxxx or its
Subsidiaries and arising out of actions or omissions occurring at or prior to
the Merger Effective Time (including the Merger and the other transactions
contemplated by the Xxxxxx Transaction Agreements) (and shall pay expenses in
advance of the final disposition of any such action or proceeding to each Xxxxxx
Indemnified Party, to the fullest extent permitted under the DGCL, upon receipt
from the Xxxxxx Indemnified Party to whom expenses are advanced of the
undertaking to repay such advances contemplated by Section 145(e) of the DGCL).
(c) Without limiting the generality of the foregoing, in the
event that any Claim is brought against any Xxxxxx Indemnified Party after the
Merger Effective Time, (i) the Xxxxxx Indemnified Parties may retain the
Surviving Corporation's regularly engaged independent legal counsel or other
independent legal counsel reasonably acceptable to the Surviving Corporation and
(ii) the Surviving Corporation shall pay all reasonable fees and expenses of
such counsel for the Xxxxxx Indemnified Parties promptly as statements therefor
are received; provided that the Surviving Corporation shall not be liable for
any settlement of any Claim effected without its written consent. Any Xxxxxx
Indemnified Party wishing to claim indemnification under this Section 9.12 upon
learning of any such Claim shall notify the Surviving Corporation (although the
failure so to notify the Surviving Corporation shall not relieve the Surviving
Corporation from any liability which the Surviving Corporation may have under
this Section 9.12, except to the extent such failure materially prejudices the
Surviving Corporation's position with respect to such Claim), and shall deliver
to the Surviving Corporation the undertaking contemplated by Section 145(e) of
the DGCL. The Xxxxxx Indemnified Parties as a group may retain no more than one
(1) law firm (in addition to local counsel) to represent them with respect to
each such matter unless there is, under applicable standards of professional
conduct (as determined by counsel to the Xxxxxx Indemnified Parties), an actual
conflict between the interests of any two (2) or
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more Xxxxxx Indemnified Parties, in which event such additional counsel as may
be required may be retained by the Xxxxxx Indemnified Parties.
(d) Each Xxxxxx Indemnified Party shall have rights as a third
party beneficiary under this Section 9.12 as separate contractual rights for his
or her benefit, and such rights shall be enforceable by such Xxxxxx Indemnified
Party, his or her heirs and personal representatives.
(e) This Section 9.12 shall survive the consummation of the
Merger and the Merger Effective Time and shall be binding on all successors and
assigns of the Surviving Corporation.
(f) No amounts shall be owed or payable by the Surviving
Corporation, pursuant to this Section 9.12, in connection with any Claims
brought, directly or indirectly, against any Xxxxxx Covered Person in the event
that coverage for such amounts is available under the GM policies, maintained in
accordance with Section 1.6 of the Separation Agreement, for such Claims.
9.13 Refinancing; Indian Entities.
(a) The Purchaser will cooperate with Xxxxxx and its Subsidiaries
in obtaining committed financing, on terms and conditions reasonably acceptable
to Xxxxxx and the Purchaser, sufficient in amount to refinance all of the
indebtedness of PanAmSat outstanding at the Closing under those agreements set
forth on Section 9.13 of the Xxxxxx Disclosure Schedule, which could by the
terms accelerate upon the Closing of the transactions contemplated by this
Agreement. Xxxxxx agrees to request that the lenders thereunder consent to the
Transactions such that no such refinancing is required.
(b) The Purchaser shall use reasonable best efforts to assist
Xxxxxx and its Subsidiaries in complying with their respective obligations under
the Securities and Exchange Board of India (Substantial Acquisition of Shares &
Takeovers) Regulations (1997).
9.14 Letters of Accountants.
(a) To the extent applicable as a result of any requirement to
include (or incorporate by reference) their respective financial statements in
the Registration Statements, GM shall use reasonable best efforts to cause to be
delivered to Xxxxxx and the Purchaser, and GM and Xxxxxx shall use reasonable
best efforts to cause to be delivered to the Purchaser, to the extent permitted
by applicable accounting standards, letters from the independent accountants of
each of GM and Xxxxxx, dated a date within two (2) Business Days before the date
on which such Registration Statement shall become effective, addressed to the
Purchaser and its Board of Directors, customary in form and scope for comfort
letters delivered by independent public accountants in connection with
registration statements similar to such Registration Statement.
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(b) To the extent applicable as a result of any requirement to
include (or incorporate by reference) its financial statements in the
Registration Statements, the Purchaser shall use reasonable best efforts to
cause to be delivered to GM and Xxxxxx to the extent permitted by applicable
accounting standards a letter from the independent accountants of the Purchaser,
dated a date within two (2) Business Days before the date on which such
Registration Statement shall become effective, addressed to GM and Xxxxxx and
their respective Boards of Directors, customary in form and scope for comfort
letters delivered by independent public accountants in connection with
registration statements similar to such Registration Statement.
(c) To the extent applicable as a result of any requirement to
include (or incorporate by reference) its financial statements in the
Proxy/Consent Solicitation Statement, the Purchaser shall use reasonable best
efforts to cause to be delivered to GM to the extent permitted by applicable
accounting standards in connection with the Proxy/Consent Solicitation Statement
two (2) letters from the independent accountants of the Purchaser, one dated a
date within two (2) Business Days before the date on which any Registration
Statement containing the Proxy/Consent Solicitation Statement shall become
effective and one dated a date within two (2) Business Days before the date on
which the Proxy/Consent Solicitation Statement is mailed to GM's stockholders,
in each case addressed to GM and its Board of Directors, customary in form and
scope for comfort letters delivered by independent public accountants in
connection with registration statements similar to the Registration Statements
and proxy or consent solicitation statements similar to the Proxy/Consent
Solicitation Statement.
9.15 Merger Agreement Covenants. The Purchaser, for itself and on
behalf of Merger Sub, hereby covenants to GM as to each of the matters set forth
in the covenants made by the Purchaser and Merger Sub in the Merger Agreement to
the full extent therein as though such covenants were by the Purchaser, for
itself and on behalf of Merger Sub, in this Agreement. The Purchaser hereby
fully and unconditionally guarantees the timely payment, performance and
discharge by Merger Sub of all of its obligations under the Merger Agreement to
take place prior to the Merger Effective Time.
9.16 NYSE Listing. The parties hereto shall use reasonable best
efforts to cause the shares of Surviving Corporation Common Stock to be issued
pursuant to the Merger to be approved for listing on the NYSE, subject to
official notice of issuance, prior to the Merger Effective Time.
9.17 Issuance of Preferred Limited Voting Ordinary Shares; ASX
Listing. In the event Purchaser Stock is to be issued in the Merger and/or the
Stock Sale, prior to the Closing, the Purchaser shall have taken, or shall have
caused to be taken, all actions necessary to be taken by it for the issuance of
the Preferred Limited Voting Ordinary Shares underlying the Purchaser Stock, the
authorization of any Purchaser Stock to be issued by the Depositary in
connection with the Merger and/or the Stock Sale for listing on the NYSE
(subject to official notice of issuance), the approval in principle from the ASX
indicating that it will grant official quotation to any Preferred Limited
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Voting Ordinary Shares underlying any Purchaser Stock to be issued by the
Depositary in connection with the Merger and/or the Stock Sale, any necessary
approval of the Australian Securities and Investments Commission or other
regulatory authority, the receipt of all state and foreign securities or blue
sky permits or approvals and the receipt of all material consents and approvals
of third parties. After the Closing, with respect to any Preferred Limited
Voting Ordinary Shares underlying any Purchaser Stock to be issued by the
Depositary in connection with the Merger and/or the Stock Sale, the Purchaser
shall make all filings and notifications with the ASX and the Australian
Securities and Investments Commission as may be necessary for so long as the
Purchaser, in its sole discretion, determines to have its securities quoted on
the ASX.
9.18 Delivery of Merger Consideration. In the event Purchaser Stock is
to be issued in the Stock Sale or the Merger, at the Closing, (i) the Purchaser
shall cause Citibank, N.A., as Depositary (the "Depositary") under the Amended
and Restated Deposit Agreement, dated as of December 3, 1996 (as amended by the
letter agreement, dated as of December 17, 2001 (the "Deposit Agreement"))
between the Purchaser and the Depositary and certain other persons, to deliver
to GM and the Exchange Agent, as applicable, the Purchaser Stock to be issued by
the Depositary in connection with the Stock Sale or the Merger; provided, that
the Purchaser shall cause the Depositary not to issue the Purchaser Stock in
connection with the Stock Sale or the Merger prior to the Purchaser issuing to
the Depositary the Preferred Limited Voting Ordinary Shares underlying the
Purchaser Stock and (ii) the Purchaser shall deliver to GM and the Exchange
Agent a holding statement (or such other evidence as is acceptable to GM and the
Exchange Agent) for any Preferred Limited Voting Ordinary Shares to be issued by
the Purchaser in connection with the Stock Sale or the Merger in compliance with
the Australian Securities Clearing House Business Rules evidencing that such
Preferred Limited Voting Ordinary Shares have been issued to and registered as
of the Closing.
9.19 Blue Sky. Each of the parties hereto will use reasonable best
efforts to obtain prior to the Split-Off Effective Time all necessary United
States or foreign blue sky or similar securities law permits and approval
required to permit the distribution of the Xxxxxx Common Stock to be issued
pursuant to the Split-Off and the Surviving Corporation Common Stock and
Purchaser Stock to be issued in connection with the Stock Sale or the Merger.
9.20 Special Dividend. Prior to the Split-Off Effective Time (but
after the Requisite Stockholder Approval of the Requisite Vote Matters), Xxxxxx
shall declare and pay the Special Dividend to GM in cash (it being understood
and agreed that the declaration and payment of the Special Dividend by Xxxxxx to
GM shall not result in any adjustment to the Class H Fraction).
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ARTICLE X
CONDITIONS TO CLOSING
10.1 Conditions Precedent to Obligations of Each Party. The respective
obligations of each party to this Agreement to consummate the transactions
contemplated by this Agreement is subject to the fulfillment, on or prior to the
Closing Date, of each of the following conditions:
(a) no temporary restraining order, preliminary or permanent
injunction or other order or decree issued by a court of competent jurisdiction
located in the United States that prevents the consummation of the Transactions
shall have been issued and remain in effect;
(b) all waiting periods applicable to the consummation of the
Transactions under the HSR Act shall have expired or been terminated and all
approvals of, or filings with, any Governmental Authority located in the United
States (other than the FCC) required to consummate the transactions contemplated
under the Transaction Agreements shall have been obtained or made, other than
approvals and filings, the failure to obtain or make which, in the aggregate,
would not reasonably be expected to have a material adverse effect on the
prospects of the business or operations of the Surviving Corporation following
the Merger;
(c) all approvals of the FCC required in connection with the
consummation of the Transactions shall have been obtained, other than approvals
with respect to Xxxxxx FCC Licenses that are immaterial to the assets or
business of Xxxxxx and its Subsidiaries taken as a whole;
(d) each of the Requisite Vote Matters shall have received the
Requisite Stockholder Approval;
(e) the GM Charter Amendment shall have been filed with the
Secretary of State of the State of Delaware, and shall have become effective, in
accordance with the DGCL;
(f) (i) the SEC shall have declared the Registration Statements
effective, (ii) no stop order suspending the effectiveness of any Registration
Statement shall be in effect, (iii) no similar restraining order shall have been
entered by the SEC or any state or foreign securities law regulators with
respect to the Transactions and (iv) all required approvals and clearances of
the SEC and all material applicable state and foreign securities law regulators
in connection with the Transactions, shall have been received in accordance with
Applicable Law;
(g) the Ancillary Separation Agreements shall have been entered
into and shall be in full force and effect;
65
(h) the shares of Surviving Corporation Common Stock to be issued
pursuant to the Merger shall have been approved for listing on the NYSE, subject
to official notice of issuance; and
(i) all conditions necessary to consummate the Xxxxxx Common
Stock Exchange simultaneously with the Stock Sale shall have been satisfied.
10.2 Conditions Precedent to Obligations of the Purchaser. The
obligation of the Purchaser to consummate the transactions contemplated by this
Agreement is subject to the fulfillment, on or prior to the Closing Date, of
each of the following conditions (any or all of which may be waived by the
Purchaser in whole or in part to the extent permitted by Applicable Law):
(a) the representations and warranties of GM and Xxxxxx set forth
in Article IV and Article V herein shall be true and correct as of the date of
this Agreement and at and as of the Closing Date as though made on and as of the
Closing Date (except for representations and warranties made as of a specified
date, which need be true and correct only as of the specified date), except
(other than in the case of Section 4.6 hereof) to the extent that all of the
breaches of such representations and warranties collectively (without giving
effect to any materiality or similar qualification) have not had and would not
reasonably be expected to result in a Xxxxxx Material Adverse Effect that cannot
be cured by the Outside Date and, in the case of representations and warranties
of GM, has not had a material adverse impact on GM's ability to consummate the
transactions contemplated by the GM Transaction Agreements; provided, however,
that any and all actions required to be taken pursuant to Section 9.4 and the
effects thereof on the representations and warranties of GM and Xxxxxx set forth
in Article IV and Article V shall be ignored for purposes of this Section
10.2(a);
(b) GM and Xxxxxx shall have performed in all material respects
all of their respective obligations hereunder to be performed by them on or
prior to the Closing Date;
(c) GM and Xxxxxx shall have furnished the Purchaser with a
certificate dated the Closing Date signed on its behalf by its Chairman,
President or any Vice President to the effect that the conditions set forth in
Sections 10.2(a) and (b) have been satisfied;
(d) certificates representing the Shares shall have been, or
shall at the Closing be, validly delivered and transferred to the Purchaser,
free and clear of any and all Encumbrances;
(e) GM shall have provided the Purchaser with an affidavit of
non-foreign status that complies with Section 1445 of the Code (a "FIRPTA
Affidavit");
(f) there shall not have occurred after the date hereof and be
continuing any Xxxxxx Material Adverse Effect; provided, however, that any and
all
66
actions taken pursuant to Section 9.4 and the effects thereof shall be ignored
for the purposes of this Section 10.2(f); and
(g) To the extent that the Ruling (i) includes statements or
representations relating to facts that are or will be under the control of the
Purchaser or any of its affiliates or (ii) is relevant to, or creates any actual
or potential obligations of or limitations on, the Purchaser or any of its
affiliates (or, for periods after the Split-Off Effective Time, Xxxxxx or its
affiliates), such Ruling is reasonably satisfactory to the Purchaser, and the
IRS has not notified GM or any party to this Agreement that the Ruling has been
withdrawn, invalidated or modified in any manner that is or would reasonably be
expected to be adverse to the Purchaser or any of its affiliates (or, for
periods after the Split-Off Effective Time, Xxxxxx or its affiliates).
10.3 Conditions Precedent to Obligations of GM. The obligations
of GM to consummate the transactions contemplated by this Agreement are subject
to the fulfillment, prior to or on the Closing Date, of each of the following
conditions (any or all of which may be waived by the GM in whole or in part to
the extent permitted by Applicable Law):
(a) the representations and warranties of the Purchaser set forth
in Article VI herein shall be true and correct as of the date of this Agreement
and at and as of the Closing Date as though made on and as of the Closing Date
(except for representations and warranties made as of a specified date, which
need be true and correct only as of the specified date), except to the extent
that all of the breaches of such representations and warranties collectively
(without giving effect to any materiality or similar qualification) have not had
and would not reasonably be expected to result in a Purchaser Material Adverse
Effect that cannot be cured by the Outside Date or has not had a material
adverse impact on the Purchaser's ability to consummate the transactions
contemplated by this Agreement; provided, however, that any and all actions
required to be taken pursuant to Section 9.4 and the effects thereof on the
representations and warranties of the Purchaser set forth in Article VI shall be
ignored for purposes of this Section 10.3(a);
(b) the representations and warranties of the Purchaser set forth
in Section 6.14 herein shall be true and correct as of the date of this
Agreement and at and as of the Closing Date as though made on and as of the
Closing Date;
(c) the Purchaser shall have performed in all material respects
all of its obligations hereunder and under the Merger Agreement to be performed
by it on or prior to the Closing Date;
(d) the Purchaser shall have furnished GM with a certificate
dated the Closing Date signed on its behalf by its Chairman, President or any
Vice President to the effect that the conditions set forth in Sections 10.3(a),
(b) and (c) have been satisfied;
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(e) no temporary restraining order, preliminary or permanent
injunction or other order or decree by a court of competent jurisdiction outside
the United States, or any other Governmental Authority of competent jurisdiction
outside the United States, that prevents the consummation of the Transactions
shall have been issued and remain in effect;
(f) all approvals of, or filings with, any Governmental Authority
outside the United States required to consummate the Transactions shall have
been obtained or made, and all waiting periods applicable to the consummation of
the Transactions under the competition laws of jurisdictions outside the United
States shall have expired or been terminated;
(g) GM (i) shall have received a ruling (the "Ruling") from the
IRS, in form and substance reasonably satisfactory to GM, to the effect that the
distribution of Xxxxxx Common Stock to the holders of record of GM Class H
Common Stock pursuant to the Xxxxxx Common Stock Exchange will constitute a
distribution with respect to which no gain or loss will be recognized by GM,
Xxxxxx or their respective stockholders pursuant to Section 355 and related
provisions of the Code; (ii) shall not have been notified by the IRS that the
Ruling has been withdrawn, invalidated or modified in an adverse manner; and
(iii) shall not have been notified by the IRS, and shall not have otherwise
reasonably determined, on the basis of an opinion of outside tax counsel, that
there is a more than immaterial possibility that the consummation of the
Split-Off will not be tax-free as contemplated by this Agreement;
(h) GM shall have received the Tax Opinions in form and substance
reasonably satisfactory to GM;
(i) the shares of Purchaser Stock to be issued pursuant to the
Stock Sale and the Merger shall have been approved for listing on the NYSE,
subject to official notice of issuance;
(j) in the event that the Purchaser elects to have all or a
portion of the Purchaser Consideration consist of cash, the Purchaser shall have
made (or shall be making concurrently with the Closing) the cash deposit
required by Section 1.8(a) of the Merger Agreement;
(k) prior to the Split-Off Effective Time, Xxxxxx shall have
declared and paid the Special Dividend to GM in cash;
(l) the last to be fulfilled of the conditions set forth in
Sections 10.1(b), 10.1(c), 10.1(d) and 10.3(g) shall not have been fulfilled
prior to October 12, 2003;
(m) the GM Registration Rights Agreement shall have been entered
into and shall be in full force and effect; and
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(n) the Employee Matters Agreement shall have been entered into
and shall be in full force and effect.
ARTICLE XI
DOCUMENTS TO BE DELIVERED
11.1 Documents to be Delivered by GM. At the Closing, GM shall
deliver, or cause to be delivered, to the Purchaser the following:
(a) stock certificates representing the Shares, duly endorsed in
blank or accompanied by stock transfer powers and with all requisite stock
transfer tax stamps attached;
(b) the certificate referred to in Section 10.2(c) hereof;
(c) duly executed FIRPTA Affidavit for GM; and
(d) such other documents as the Purchaser shall reasonably
request.
11.2 Documents to be Delivered by the Purchaser. At the Closing,
the Purchaser shall deliver to GM the following:
(a) evidence of the wire transfer referred to in Section 2.2
hereof;
(b) the certificate referred to in Section 10.3(d) hereof; and
(c) such other documents as GM shall reasonably request.
ARTICLE XII
TAX-FREE STATUS OF THE SPLIT-OFF
12.1 Representations and Warranties.
(a) Xxxxxx. Xxxxxx hereby represents and warrants that (i) it has
examined (or will upon receipt examine) (A) the Ruling and any other rulings
issued by the IRS in connection with the Split-Off, (B) the Tax Opinions, (C)
each IRS Submission, (D) the representation letters relating to the Tax Opinions
and (E) any other materials delivered or deliverable by GM and others in
connection with the rendering by Tax Counsel of the Tax Opinions and the
issuance by the IRS of the Ruling and such other rulings (all of the foregoing,
collectively, the "Tax Materials") and (ii) the facts presented and the
representations made therein, to the extent descriptive of Xxxxxx (including the
business purposes for the Split-Off and the representations in the Tax Materials
to the extent that they relate to Xxxxxx and the plans, proposals, intentions
and
69
policies of Xxxxxx), are, or will be from the time presented or made through and
including the Split-Off Effective Time, true, correct and complete in all
material respects. Except for the Tax Allocation Agreements, there are no Tax
sharing agreements and practices regarding Taxes and their payment, allocation
and sharing between any former subsidiary or affiliate of GM (other than Xxxxxx
or a Subsidiary of Xxxxxx), on the one hand, and Xxxxxx or any Subsidiary of
Xxxxxx, on the other hand.
(b) GM. GM hereby represents and warrants that (i) it has
examined (or upon receipt will examine) the Tax Materials and (ii) the facts
presented and the representations made therein, to the extent descriptive of GM
(including the business purposes for the Split-Off and the representations in
the Tax Materials to the extent that they relate to GM and the plans, proposals,
intentions and policies of GM), are, or will be from the time presented or made
through and including the Split-Off Effective Time, true, correct and complete
in all material respects.
(c) Purchaser. The Purchaser hereby represents and warrants that
(i) upon receipt it will examine the Tax Materials and (ii) following such
examination, to the extent that the Purchaser approves in writing the facts
presented and the representations made therein which are descriptive of the
Purchaser (including the business purposes for the Split-Off and the
representations in the Tax Materials to the extent that they relate to the
Purchaser and the plans, proposals, intentions and policies of the Purchaser),
such facts and representations will be true, correct and complete in all
material respects. Neither the Purchaser nor any Subsidiary of the Purchaser
nor, to the knowledge of the Purchaser, any other Person from whom ownership of
GM Class H Common Stock would be attributed to the Purchaser for purposes of
Section 355(e) of the Code or any member of a "coordinating group" (as defined
in Treasury Regulation Section 1.355-7T(h)(4) (or any successor thereto)) that
includes the Purchaser (or any Person from whom ownership of GM Class H Common
Stock would be attributed to such member for purposes of Section 355(e) of the
Code) (any such Person or member, a "Tax Related Party") that is not a
Subsidiary of the Purchaser owns any shares of GM Class H Common Stock or any
rights, warrants or options to acquire, or securities convertible into or
exchangeable for GM Class H Common Stock; provided, that for purposes of this
representation, the term "knowledge" shall not require any inquiry or
investigation; provided further, that the immediately preceding proviso shall
not limit Purchaser's obligations set forth in Section 12.3(f). The
representations and warranties set forth in this Section 12.1(c) shall be true
and correct as of the date of this Agreement or, with respect to the Tax
Materials, as of the date approved, and at all times through and including the
Split-Off Effective Time.
12.2 Restrictions Relating to the Split-Off.
(a) General. The parties intend the Split-Off to qualify as a
distribution of Xxxxxx stock to GM stockholders with respect to which gain or
loss is not recognized by GM, Xxxxxx or their respective stockholders pursuant
to Section 355 and related provisions of the Code (such nonrecognition, the
"Tax-Free Status of the Split-Off").
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(i) Neither Xxxxxx nor the Purchaser shall, nor shall
Xxxxxx or the Purchaser permit any of their respective Subsidiaries to,
take any action within its control (including entering into any agreement,
understanding or arrangement or any negotiations with respect to any
transaction or series of transactions) that, or fail to take any action
within its control the failure of which, would cause the Split-Off to fail
so to qualify (any such action or failure to act, a "Disqualifying
Action"); provided, however, that the term "Disqualifying Action" shall not
include (x) any action, or failure to act, that is contemplated by the
terms of the Transaction Agreements or (y) any failure to take action to
mitigate the effects of a breach by Xxxxxx, occurring prior to the
Split-Off Effective Time, of a representation, warranty or covenant
contained in the Transaction Agreements, regardless of whether such breach
or its effects continue after the Split-Off Effective Time.
(ii) Prior to the first day following the second
anniversary of the Split-Off Effective Time and except as otherwise
provided in this Agreement, neither Xxxxxx nor the Purchaser shall, nor
shall Xxxxxx or the Purchaser permit any of their respective Subsidiaries
to, take any action (including entering into any agreement, understanding
or arrangement or any negotiations with respect to any transaction or
series of transactions) within its control that, or fail to take any action
within its control the failure of which, would result in a more than
immaterial possibility that the Tax-Free Status of the Split-Off would be
jeopardized (any such action or failure to act, a "Potential Disqualifying
Action"), including any action or failure to act that would be reasonably
likely to be inconsistent with any representation made in the Tax
Materials, unless, prior to the taking of the Potential Disqualifying
Action, GM has determined, in its reasonable discretion, that the Potential
Disqualifying Action would not jeopardize the Tax-Free Status of the
Split-Off; provided, that in the circumstances described in Section
12.2(h), GM's discretion shall be exercised in the manner described in
Section 12.2(h).
(b) Prohibition on Acquisitions by the Purchaser. Without
limiting the provisions of Section 12.2(a) hereof, except as provided herein and
in the Merger Agreement, and except for any subsequent acquisition by a
Subsidiary of the Purchaser of the shares of Xxxxxx Capital Stock acquired by
the Purchaser (or any of its Subsidiaries) pursuant to this Agreement and the
Merger Agreement, from the date hereof until the day after the first anniversary
of the Split-Off, the Purchaser shall not, nor shall the Purchaser permit any
Tax-Related Party that is a Subsidiary of the Purchaser to, acquire or enter
into any agreement, understanding, arrangement or negotiations to acquire, any
shares of GM Class H Common Stock, Xxxxxx Capital Stock or any rights, warrants
or options to acquire, or securities convertible into or exchangeable for, GM
Class H Common Stock or Xxxxxx Capital Stock. Following the day after the first
anniversary of the Split-Off, the Purchaser shall be permitted to acquire or
enter into any agreement, understanding, arrangement or negotiations to acquire,
any shares of Xxxxxx Capital Stock or any rights, warrants or options to
acquire, or securities convertible into
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or exchangeable for, Xxxxxx Capital Stock without being required to obtain any
prior determination from GM as described in Section 12.2(a)(ii), but subject
always to the Purchaser's obligations under Section 12.2(a)(i) hereof.
(c) Continuation of the DIRECTV Business. Until the first
day after the second anniversary of the Split-Off Effective Time, Xxxxxx shall
continue the active conduct of its DIRECTV Business (as defined below) as
conducted by Xxxxxx immediately prior to the Split-Off. Xxxxxx shall conduct the
DIRECTV Business directly (including through one or more entities that are
treated as disregarded entities for United States federal income tax purposes),
to the extent that the DIRECTV Business was so conducted immediately prior to
the Split-Off Effective Time. Xxxxxx shall continue the active conduct of the
DIRECTV Business primarily through officers and employees of Xxxxxx or any of
Xxxxxx' Subsidiaries (and not primarily through independent contractors) who are
not also officers or employees of GM or of any GM Affiliate; provided, however,
that for the purposes of this Section 12.2(c), neither Xxxxxx nor any of the
Subsidiaries of Xxxxxx shall be deemed to be Subsidiaries of GM or of any of the
Subsidiaries of GM. For the purposes of this Agreement, "DIRECTV Business" means
the business currently conducted by DIRECTV Holdings LLC, a Delaware limited
liability company and wholly owned Subsidiary of Xxxxxx, DIRECTV Enterprises,
LLC, a Delaware limited liability company and an indirect, wholly owned
Subsidiary of Xxxxxx, and DIRECTV Operations, LLC, a California limited
liability company and a direct, wholly owned Subsidiary of DIRECTV Enterprises,
LLC.
(d) Continuity of Business.
(i) Subject to the provisions of Section 12.2(i),
until the first day after the second anniversary of the Split-Off Effective
Time, (A) Xxxxxx shall not voluntarily dissolve or liquidate and (B) except
in the ordinary course of business, neither Xxxxxx nor any of Xxxxxx'
Subsidiaries directly or indirectly controlled by Xxxxxx shall sell,
transfer or otherwise dispose of or agree to dispose of assets (including,
for this purpose, any shares of capital stock of such Subsidiaries) that,
in the aggregate, constitute more than (x) fifty percent (50%) of the gross
assets of Xxxxxx or (y) fifty percent (50%) of the consolidated gross
assets of Xxxxxx and such Subsidiaries, unless, prior to the consummation
of such transaction, GM has determined, in its reasonable discretion, that
such transaction would not jeopardize the Tax-Free Status of the Split-Off;
provided, that after the first day after the second anniversary of the
Split-Off Effective Time, no such prior determination by GM shall be
required to be obtained by this Section 12.2(d). The amount of gross assets
of Xxxxxx and such Subsidiaries shall be based on the fair market value of
each such asset as of the Split-Off Effective Time.
(ii) Sales, transfers or other dispositions by Xxxxxx
or any of its Subsidiaries to Xxxxxx or one or more Subsidiaries directly
or indirectly controlled by Xxxxxx shall not be included in any
determination under this Section 12.2(d) as to whether more than fifty
percent (50%) of the gross assets of
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Xxxxxx or more than fifty percent (50%) of the consolidated gross assets of
Xxxxxx and such Subsidiaries have been sold, transferred or otherwise
disposed of.
(iii) Solely for the purposes of this Section 12.2(d),
Xxxxxx shall not be treated as directly or indirectly controlling a
Subsidiary unless Xxxxxx owns, directly or indirectly, shares of capital
stock of such Subsidiary constituting Tax Control of the Subsidiary.
(e) Intercompany Indebtedness. Except as set forth on
Section 12.2(e) of the GM Disclosure Schedule and Section 12.2(e) of the Xxxxxx
Disclosure Schedule, from the Split-Off Effective Time until the first day after
the second anniversary of the Split-Off Effective Time, neither GM nor Xxxxxx
shall, nor shall they permit any of their respective Subsidiaries to, create,
incur, assume or allow to exist any indebtedness between GM or any GM Affiliate,
on the one hand, and Xxxxxx or any Xxxxxx Affiliate, on the other hand, other
than payables incurred in the ordinary course of business.
(f) Certain Presumptions. For the purposes of this Section
12.2, but without creating any implication that any of the following is true, it
shall be presumed that:
(i) the acquisition by the Purchaser of shares of
Xxxxxx Common Stock pursuant to this Agreement and the acquisition by the
Purchaser of shares of Surviving Corporation Common Stock pursuant to the
Merger, as applicable, is an acquisition of stock that is part of a plan or
series of related transactions that includes the Split-Off;
(ii) except as provided in clause (iii) below, no
issuance of GM Class H Common Stock that occurred on or prior to March 20,
2003 is part of a plan or series of related transactions that includes the
Split-Off;
(iii) bunless the IRS has issued a Subsequent Ruling to
the contrary, the contribution by GM of 149,200,000 shares of GM Class H
Common Stock to the GM Employee Benefit Plans that occurred on March 12,
2003, is an acquisition of stock that is part of a plan or series of
related transactions that includes the Split-Off;
(iv) any acquisition of GM Class H Common Stock (prior
to the Split-Off) or Xxxxxx Capital Stock (after the Split-Off) by a
retirement plan maintained by GM or any GM Affiliate or by Xxxxxx or any
Xxxxxx Affiliate for their respective employees that is qualified under
Section 401(a) or 403(a) of the Code other than, unless the IRS rules
otherwise in the Ruling or has issued a Subsequent Ruling to the contrary,
(A) the contribution of GM Class H Common Stock described in clause (iii)
above, (B) a contribution of Xxxxxx Capital Stock to such a plan by Xxxxxx
or a Xxxxxx Affiliate which is not
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pursuant to the provisions of the mandatory matching contribution contained
in the Xxxxxx Section 401(k) plan as in existence on the date hereof and
(C) acquisitions of GM Class H Common Stock or Xxxxxx Capital Stock by such
a plan which are required or directed by Xxxxxx, is not an acquisition of
stock that is part of a plan or series or related transactions that
includes the Split-Off; and
(v) any acquisition of GM Class H Common Stock (prior
to the Split-Off) or Xxxxxx Capital Stock (after the Split-Off) by an
employee, director or independent contractor of Xxxxxx or any Xxxxxx
Affiliate pursuant to the exercise of a stock option, stock right or a
grant of stock or otherwise in connection with the performance of services
(but only if such compensation is not excessive by reference to the
services performed) other than an employee, director or independent
contractor who is (or after the acquisition would be) a five percent (5%)
shareholder of Xxxxxx or is part of a group joined in a coordinated effort
to acquire five percent (5%) or more of the Xxxxxx Capital Stock is not an
acquisition of stock that is part of a plan or series or related
transactions that includes the Split-Off.
Presumptions (iv) and (v) above can be withdrawn or modified on a
prospective basis by GM based on a Change in Tax Law that adversely affects the
applicability of the presumption; provided that future calculations of stock
which may be issued by Xxxxxx pursuant to clause (h) below shall take into
account, where necessary, withdrawn or modified presumptions.
(g) Permitted Actions and Transactions. Notwithstanding the
foregoing, the provisions of this Section 12.2 shall not prohibit Xxxxxx or the
Purchaser from implementing any Potential Disqualifying Action upon which the
IRS has granted a favorable ruling in, or which is described in reasonable
detail in, the Ruling.
(h) Certain Potential Disqualifying Actions.
(i) Notwithstanding anything to the contrary in
Section 12.2(a) if, in one or more Potential Disqualifying Actions
occurring after the Merger and prior to the second anniversary of the
Split-off Effective Time, Xxxxxx proposes to issue a number of shares of
Surviving Corporation Common Stock that, in the aggregate, is no greater,
on the basis of voting power and fair market value, than ninety percent
(90%) of the number of shares of Surviving Corporation Common Stock that
could be issued by Xxxxxx without breach of Section 12.2(a) immediately
following the Merger as determined pursuant to, and fixed by, Section
12.3(d), then, if Xxxxxx elects to avail itself of the procedures described
in this Section 12.2(h) in lieu of the other procedures described in this
Section 12.2 and Section 12.3 hereof, GM shall make a favorable
determination as to each such Potential Disqualifying Action under Section
12.2(a), unless there has been, after the Merger, a Change in Tax Law or a
change in, or failure of, a relevant fact, in each case that adversely
affects the computation of the number of shares of capital stock, on the
basis of voting power or fair market value that
74
Xxxxxx may issue without such issuance resulting in a breach of Section
12.2(a). Xxxxxx shall give GM written notice of its intention to effect a
Potential Disqualifying Action described in this Section 12.2(h), together
with a computation in reasonable detail of the basis for the conclusion
that the Potential Disqualifying Action is governed by this Section 12.2(h)
and shall provide such other information as GM shall reasonably request,
and GM shall make such determination within ten (10) Business Days after
receipt of such notice and computation. Nothing in this Section 12.2(h)
obligates Xxxxxx to elect to avail itself of the procedures described
herein in lieu of the other procedures described in this Section 12.2 and
Section 12.3 hereof.
(ii) After the second anniversary of the Split-off
Effective Time, Xxxxxx shall be permitted to issue, in one or more
transactions, or enter into any agreement, understanding, arrangement or
substantial negotiations to issue, any number of shares of Surviving
Corporation Common Stock without being required to obtain any prior
determination by GM as described in Section 12.2(a)(ii), but subject always
to Xxxxxx' obligations under Section 12.2(a)(i) hereof.
(i) Sale of PanAmSat. Notwithstanding anything to the
contrary in this Article XII, after the Split-Off Effective Time, Xxxxxx shall
be permitted to cause the sale of any stock, securities or assets of PanAmSat
(whether by sale, merger, exchange or otherwise), and any such sale shall not be
taken into account in determining whether the requirements of Section 12.2(d)
have been satisfied.
12.3 Cooperation and Other Covenants.
(a) Notice of Subsequent Actions. Each of Xxxxxx and the
Purchaser, on the one hand, and GM, on the other hand, shall furnish the other
with a copy of any ruling requests or other documents delivered to the IRS that
relate to the Split-Off or that otherwise reasonably could be expected to have
an impact on the Tax-Free Status of the Split-Off; provided, that GM may redact
from any IRS Submission any Redactable Information.
(b) Post-Closing Cooperation.
(i) Xxxxxx, the Purchaser and GM shall cooperate with
the others and shall take (or refrain from taking) all such actions as the
others may reasonably request in connection with obtaining any
determination by GM referred to in Section 12.2 or any ruling to the effect
that some or all of the 149,200,000 shares of GM Class H Common Stock
contributed by GM on March 12, 2003 to the GM Employee Benefit Plans were
not acquired as part of a plan or series of related transactions that
includes the Split-Off. Such cooperation shall include providing any
information, representations and/or covenants reasonably requested by the
others to enable any other party (or counsel for such party) to obtain and
maintain either (A) an opinion of counsel selected by
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GM, in its sole and absolute discretion, confirming, in form and substance
reasonably satisfactory to GM, that the taking of a Potential Disqualifying
Action or other action described in Section 12.2 would not jeopardize the
Tax-Free Status of the Split-Off (a "Subsequent Tax Opinion") or (B) an IRS
private letter ruling to the same effect or to the effect that some or all
of the 149,200,000 shares of GM Class H Common Stock contributed by GM on
March 12, 2003 to the GM Employee Benefit Plans were not acquired as part
of a plan or series of related transactions that includes the Split-Off (a
"Subsequent Ruling"). From and after any date on which (x) Xxxxxx, the
Purchaser or GM makes any representation or covenant to the IRS for the
purpose of obtaining a Subsequent Ruling or to counsel selected by GM for
the purpose of obtaining a Subsequent Tax Opinion or (y) Xxxxxx or the
Purchaser makes any representation or covenant to GM for the purpose of any
determination required to be made by GM pursuant to Section 12.2, in
connection with obtaining any such determination or the receipt of a
Subsequent Tax Opinion or Subsequent Ruling and (with respect solely to any
representation given) until the first day after the second anniversary (or
such later date as may be agreed upon at the time such representation is
made) of the date of such determination or receipt, the party making such
representation or covenant shall take no action that would have caused such
representation to be untrue or covenant to be breached unless the other
party has determined, in its reasonable discretion, which discretion shall
be exercised in good faith solely to preserve the Tax-Free status of the
Split-Off, that such action would not jeopardize the Tax-Free Status of the
Split-Off. Such representations and warranties, once made in writing, shall
be considered Tax Materials subject to the provisions of Section 12.1
hereof.
(ii) In the event that after the Split-Off Effective
Time Xxxxxx notifies GM that it desires to take or permit a Potential
Disqualifying Action or other action described in Section 12.2 and GM
concludes that such action might jeopardize the Tax-Free Status of the
Split-Off and that GM does not intend to seek a Subsequent Tax Opinion, GM
and Xxxxxx, acting jointly, shall use reasonable best efforts to obtain a
Subsequent Ruling that would permit Xxxxxx to take or permit the specified
action, with each party cooperating fully in connection with such efforts.
If the parties obtain a Subsequent Ruling that would permit Xxxxxx to take
or permit a Potential Disqualifying Action or other action described in
Section 12.2 without jeopardizing the Tax-Free Status of the Split-Off,
then GM shall make a favorable determination as to the specified action
under Section 12.2, unless GM determines, based on an opinion of tax
counsel, that there is a more than immaterial possibility that the
specified action nonetheless will jeopardize the Tax-Free Status of the
Split-Off, based upon (A) a Change in Tax Law on or after the date on which
the Subsequent Ruling is issued or (B) a change in, or failure of, a
relevant fact (including an error in stating, or an omission to state, a
relevant fact in any IRS Submission or otherwise); provided, that if GM
makes such a determination in accordance with the requirements described
above, then the parties shall request that the IRS confirm the
76
Subsequent Ruling if the matter is capable of being resolved by a further
ruling from the IRS.
(iii) GM shall not file any request for a Subsequent
Ruling without the prior written consent of Xxxxxx, which consent shall not
be unreasonably withheld or delayed, if a favorable Subsequent Ruling would
be reasonably likely to have the effect of (A) reducing by more than an
immaterial amount the amount of equity that may be issued by Xxxxxx in
transactions that, if consummated as of the proposed date of such request,
would not have resulted in a breach of Section 12.2(a) or (B) otherwise
being relevant to, or creating, any actual or potential obligations of, or
limitations on, Merger Sub, the Purchaser, Xxxxxx or any of their
Affiliates.
(c) Notice.
(i) Xxxxxx or the Purchaser (as appropriate) shall
give GM written notice of any intention to effect or permit any Potential
Disqualifying Action or other action or transaction described in Section
12.2 within a period of time reasonably sufficient to enable GM (A) to make
the determination referred to in Section 12.2 or (B) to prepare and seek a
Subsequent Tax Opinion or, acting jointly with Xxxxxx pursuant to Section
12.3(b)(ii), a Subsequent Ruling in connection with such proposed action or
transaction. Each such notice by Xxxxxx or the Purchaser (as appropriate)
shall set forth the terms and conditions of the proposed action or
transaction, including, as applicable, the nature of any related action
proposed to be taken, the approximate number of shares of Xxxxxx Capital
Stock proposed to be transferred or issued (directly or indirectly, in
accordance with the provisions of Section 355(e) of the Code), the
approximate value of Xxxxxx assets (or assets of any Subsidiary of Xxxxxx)
proposed to be transferred, the proposed timetable for such action or
transaction, and the number of shares of Xxxxxx Capital Stock otherwise
then owned by the other party to the proposed action or transaction
(directly or indirectly, in accordance with the provisions of Section
355(e) of the Code), all with sufficient particularity to enable GM to make
any such required determination, including information required to prepare
and seek a Subsequent Tax Opinion or, acting jointly with Xxxxxx pursuant
to Section 12.3(b)(ii), a Subsequent Ruling in connection with such
proposed action or transaction. All information provided by any of the
parties to the other parties pursuant to this Section 12.3 shall be kept
confidential by the receiving parties to the same extent as that provided
in Article 2 of the Separation Agreement.
(ii ) Except as provided in Section 12.2(h), promptly,
but in any event within fifteen (15) Business Days, after GM receives such
written notice from Xxxxxx or the Purchaser, GM shall evaluate such
information and notify Xxxxxx or the Purchaser in writing of (A) such
determination or (B) GM's intent to seek a Subsequent Tax Opinion or,
acting jointly with Xxxxxx pursuant to Section 12.3(b)(ii), a Subsequent
Ruling. If GM makes a determination that a
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Potential Disqualifying Action or other action or transaction described in
Section 12.2 would jeopardize the Tax-Free Status of the Split-Off, such
notice to Xxxxxx or the Purchaser shall set forth, in reasonable detail,
the reasons therefor. A party that receives a Subsequent Tax Opinion or
Subsequent Ruling shall notify the other party (if the other party is not
otherwise provided with a copy of the Subsequent Tax Opinion or Subsequent
Ruling), promptly, but in any event within two (2) Business Days, after the
receipt of the Subsequent Tax Opinion or Subsequent Ruling and GM shall
notify Xxxxxx and the Purchaser of its revised determination based on such
Subsequent Tax Opinion or Subsequent Ruling within two (2) Business Days
after GM's receipt thereof.
(d) Agreement on the Number of Shares Issuable by Xxxxxx.
Prior to the Split-Off, GM and Xxxxxx shall agree on the number of shares of
Xxxxxx Common Stock or Surviving Corporation Common Stock, as applicable, that
Xxxxxx could issue after giving effect to the Split-Off, the Stock Sale and the
Merger and giving effect to the presumptions contained in Section 12.2(f),
without violating Section 12.2(a)(i), assuming for purposes of such calculation
that each share so issued was considered part of a plan or series of related
transactions that includes the Split-Off.
(e) Certain Post-Closing Actions Requested by GM. After the
Split-Off Effective Time, if reasonably requested by GM in writing, Xxxxxx will
take an action (or fail to take an action) to mitigate the effects of a breach
by Xxxxxx prior to the Split-Off Effective Time of a representation or covenant
in this Article XII; provided that (i) Xxxxxx' obligations under this Section
12.3(e) are subject to GM's agreement to pay and indemnify Xxxxxx against all
reasonable costs and expenses of taking or refraining from taking such action
and (ii) any such action (or failure to take such action), even if reasonably
requested, does not and will not adversely impact in any material respect the
business, operations or financial conditions of Xxxxxx or any of its material
subsidiaries or divisions; and provided further, that GM's remedies with respect
to any breach of this Section 12.3(e) by Xxxxxx shall consist solely and
exclusively of (x) specific performance or injunctive relief with respect to the
action or failure to act in question and (y) reimbursement of reasonable costs
incurred in enforcing GM's rights under this Section 12.3(e), and neither GM nor
any subsidiary or affiliate of GM shall be entitled to indemnification for any
monetary damages in connection with any failure to mitigate the effects of any
such breach whether under this Agreement or otherwise (except for such
reimbursement of the reasonable costs described in clause (y) of this Section
12.3(e)).
(f) Post-Signing Obligations with respect to Tax Related
Parties. Within thirty (30) days after the date hereof, acting exclusively
through one or more of its senior officers, the Purchaser shall make due inquiry
(as defined in Section 14.1(b) hereof) as to the direct and indirect ownership
of GM Class H Common Stock by any Tax Related Party (x) that is not a Subsidiary
of the Purchaser and (y) ten percent (10%) of the voting power of which is owned
directly by the Purchaser and/or one or more Subsidiaries of the Purchaser.
After the date hereof, if a senior officer of the Purchaser obtains actual
knowledge that any Tax-Related Party owns, directly or indirectly, any GM Class
H Common Stock, the Purchaser shall promptly report such
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ownership in writing to GM and thereafter GM shall take such ownership into
account in making any determination required by this Article XII.
(g) Adoption of Stockholder Rights Plan. During the
Prohibition Period, Xxxxxx shall (other than as may be required to comply with
the fiduciary duties of the Xxxxxx Board of Directors under Applicable Law (the
"Fiduciary Limitation")): (A) if requested by GM, adopt and maintain during the
Prohibition Period a stockholder rights plan with flip-in and flip-over
provisions providing for the dilution of economic and voting rights of certain
acquiring persons with respect to Xxxxxx, which stockholder rights plan shall
contain customary terms and be in customary form for plans of this type
(including a 10% trigger for the definition of an "acquiring person") and shall
contain such other terms and provisions as may be reasonably requested by GM in
order to preserve the Tax-Free Status of the Split-Off, (B) amend any existing
stockholder rights plan to the extent reasonably requested by GM in order to
preserve the Tax-Free Status of the Split-Off; provided, however, that any such
amendment shall require the consent of Xxxxxx (which shall not be unreasonably
withheld or delayed with respect to clause (x) below) if it is inconsistent with
(x) the requirement in clause (A) that terms of the rights plan are "customary"
or (y) any other specific requirements referred to in clause (A) above (which
for this purpose shall mean the flip-in provision, the flip-over provision and
the 10% trigger) and (C) not redeem any of the stockholder rights described in
any such plan during the Prohibition Period; provided, however, that any such
stockholder rights plan shall not apply to the Purchaser and its Subsidiaries
beyond the period ending on the first day following the first anniversary of the
Split-Off Effective Time (provided that the Purchaser is not in material breach
of any of its covenants under this Article XII and, in the event that the
Purchaser is in such material breach, the provisions thereof shall not be
applicable to the Purchaser and its Subsidiaries (and they shall not be
considered an "acquiring person" thereunder) until from and after such time as
(1) GM shall have notified the Purchaser of such breach and (2) following such
notification, the Purchaser or its Subsidiaries acquires any additional shares
of capital stock of Xxxxxx. For the avoidance of doubt, Xxxxxx will not have any
obligation under this Section 12.3(g) or Section 12.4 to adopt or amend or
maintain (and not redeem) the stockholder rights provided in any stockholder
rights plan during any portion of the Prohibition Period which is more than one
year after the Split-Off Effective Time except with respect to a Prohibited
Party (as defined in the Xxxxxx Charter Amendment) described in the proviso of
the definition of Prohibition Period.
12.4 Indemnification for Tax Liabilities.
(a) General.
(i) Notwithstanding any other provision of this
Agreement or any provision of any of the Tax Allocation Agreements to the
contrary, but subject to Section 12.4(b), Xxxxxx shall indemnify, defend
and hold harmless GM and each GM Affiliate (or any successor to any of
them) from and against any and all (A) Taxes imposed pursuant to a Final
Determination, (B) accounting, legal and other professional fees and court
costs incurred in
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connection with such Taxes (other than such costs incurred in the joint
defense of a Third-Party Claim, which costs are subject to Section 13.6(c)
below) and (C) costs and expenses that result from adverse tax consequences
to GM or GM's stockholders (including all costs, expenses and damages
associated with stockholder litigation or controversies) (collectively,
"Tax-Related Losses"), incurred by GM or any GM Affiliate, to the extent
caused by (w) any Disqualifying Action taken by Xxxxxx or any of its
Subsidiaries after the Split-Off Effective Time, (x) any other breach by
Xxxxxx of its covenants made in this Article XII, or (y) any failure
(whether as a result of the Fiduciary Limitation or for any other reason,
except, in all cases, for any failure required by an order of a court of
competent jurisdiction (provided that in the event that such order is not
final, Xxxxxx shall use reasonable best efforts to have such order
reversed)) to take any action required by Section 12.3(g) or that would
have been required by Section 12.3(g) in the absence of the Fiduciary
Limitation (each such action, an "Indemnification Action"); provided,
however, that Xxxxxx shall have no obligation to indemnify GM or any GM
Affiliate in respect of a breach by Xxxxxx of a covenant contained in this
Article XII, to the extent that the covenant relates to actions or
activities of Xxxxxx occurring at or prior to the Split-Off Effective Time;
and provided, further, that except to the extent provided in Section
12.3(e) and subject to the limitations set forth in Section 12.3(e) and the
exceptions set forth in Section 12.4(b), Xxxxxx shall have no duty to take
any action to mitigate the effects of a breach by Xxxxxx prior to the
Split-Off Effective Time of a representation or a covenant contained in
this Article XII, and provided, further, that, in the event that the Merger
is consummated, Xxxxxx shall indemnify, defend and hold harmless GM and
each GM Affiliate (or any successor to any of them) from and against only
fifty percent (50%) of any such Tax-Related Losses that relate to or arise
out of any such action taken, or omission of any action required pursuant
to the Transaction Agreements to be taken, by Xxxxxx during the Interim
Period (as defined in the Separation Agreement);
(ii) Notwithstanding any other provision of this
Agreement to the contrary, but subject to Section 12.4(b), the Purchaser
shall indemnify, defend and hold harmless GM and each GM Affiliate (or any
successor to any of them) from and against any and all Tax-Related Losses
incurred by GM or any GM Affiliate, to the extent caused by (x) any
Disqualifying Action taken by the Purchaser or any of its Subsidiaries or
affiliates (other than Xxxxxx and its Subsidiaries) or (y) any other breach
by the Purchaser of any of its representations or covenants made in this
Article XII.
All interest or penalties incurred in connection with such
Tax-Related Losses shall be computed for the time period up to and including the
date that Xxxxxx or the Purchaser pays its indemnification obligation in full.
To the extent that GM or any GM Affiliate (or successor thereto) seeks
indemnification pursuant to this Section 12.4 for Taxes described in clauses
(ii) and/or (iii) of the definition of "Taxes", the aggregate amount of the
indemnification for Tax Related Losses shall not exceed the amount of Tax
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Related Losses for which GM would have been indemnified pursuant to this
Agreement if the underlying Tax (within the meaning of clause (i) of the
definition of "Taxes") had been imposed entirely upon GM; provided, that for the
avoidance of doubt, (i) this sentence shall not apply to indemnification for
Taxes described in clause (i) of the definition of "Taxes" and (ii) Persons
other than parties to this Agreement will not be treated as third party
beneficiaries for purposes of this Agreement by reason of clauses (ii) and/or
(iii) of the definition of "Taxes".
(b) Exceptions to Indemnification. If GM (i) makes a
determination pursuant to any clause of Section 12.2 other than a determination
made pursuant to Section 12.2(h), on the basis of a Subsequent Tax Opinion or
Subsequent Ruling or otherwise, that a Potential Disqualifying Action or other
action described in Section 12.2 would not jeopardize the Tax-Free Status of the
Split-Off and (ii) delivers to Xxxxxx or the Purchaser (as appropriate) written
notice of such determination pursuant to Section 12.3(c), then the person to
whom GM delivered such notice shall have no obligation to indemnify GM or any GM
Affiliate in respect of such action pursuant to Section 12.4(a), except to the
extent that any Tax-Related Losses result from the inaccuracy, incorrectness or
incompleteness of any representation provided by the person to whom GM delivered
such notice or the failure by the person to whom GM delivered such notice to
comply with any covenant, in each case upon which such Subsequent Tax Opinion or
Subsequent Ruling and/or determination was based. Nothing contained in this
Article XII shall be interpreted as requiring the Purchaser or Xxxxxx to
indemnify GM or any GM Affiliate against any Tax-Related Loss to the extent that
such Tax-Related Loss arises from the recognition of taxable income or gain by
GM, any GM Affiliate or any GM shareholder as a result of any failure by GM to
distribute (within the meaning of Section 355(a)(1) of the Code) an amount of
Xxxxxx stock constituting control (within the meaning of Section 368(c) of the
Code) of Xxxxxx. No indemnification under Section 12.4(a) shall arise as a
result of or relating to any breach by Xxxxxx or the Purchaser of any covenants
or obligations set forth in Section 12.3(e).
(c) Timing and Method of Tax Indemnification Payments. Xxxxxx or
the Purchaser, as the case may be, (in each case, the "Indemnitor") shall pay
any amount that is due and payable to GM pursuant to this Section 12.4 on or
before the ninetieth (90th) day following the earlier of the date of an
agreement of the parties or the date of a Final Determination that such amount
is due and payable to GM. All payments pursuant to this Section 12.4 shall be
made by wire transfer to the bank account designated by GM for such purpose,
and, on the date of such wire transfer, the Indemnitor shall give GM notice of
the transfer.
(d) Prior Period Agreements. Except for the Tax Allocation
Agreements, any and all existing Tax sharing agreements and practices regarding
Taxes and their payment, allocation or sharing between (i) GM or any Subsidiary
of GM other than Xxxxxx or a Subsidiary of Xxxxxx, on the one hand, and (ii)
Xxxxxx or any Subsidiary of Xxxxxx, on the other hand, shall be terminated with
respect to Xxxxxx and all Subsidiaries of Xxxxxx as of the Split-Off Effective
Time, and no remaining liabilities thereunder shall exist thereafter.
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12.5 Procedure for Indemnification for Tax Liabilities.
(a) Notice of Claim. If GM receives notice of the assertion of
any Third-Party Claim with respect to which Xxxxxx or the Purchaser may be
obligated under Section 12.4 to provide indemnification, GM shall give Xxxxxx or
the Purchaser (as applicable) notice thereof (together with a copy of such
Third-Party Claim, process or other legal pleading) promptly after becoming
aware of such Third-Party Claim; provided, however, that the failure of GM to
give notice as provided in this section shall not relieve Xxxxxx or the
Purchaser (as applicable) of its obligations under Section 12.4, except to the
extent that Xxxxxx or the Purchaser (as applicable) is actually prejudiced by
such failure to give notice. Such notice shall describe such Third-Party Claim
in reasonable detail.
(b) Obligation of Indemnifying Party.
(i) GM and the Indemnitor shall jointly control the
defense of, and cooperate with each other with respect to defending, any
Third-Party Claim with respect to which the Indemnitor is obligated under
Section 12.4 to provide indemnification; provided that the Indemnitor shall
forfeit such joint control right with respect to a particular Third-Party
Claim if the Indemnitor or any Affiliate of the Indemnitor makes any public
statement or filing, or takes any action (including the filing of any
submission or pleading, or the giving of a deposition or production of
documents, in any administrative or court proceeding) in connection with
such Third-Party Claim that is inconsistent in a material respect with any
representation or warranty made by the Indemnitor in this Agreement or the
Tax Materials.
(ii) The Indemnitor and GM shall exercise their rights to
jointly control the defense of any such Third-Party Claim solely for the
purpose of defeating such Third-Party Claim and, unless required by
Applicable Law, neither the Indemnitor nor GM shall make any statements or
take any actions that would reasonably be expected to result in the
shifting of liability for Losses or Tax-Related Losses arising out of such
Third-Party Claim from the party making such statement or taking such
action (or any of its affiliates) to the other party (or any of its
affiliates).
(iii) Statements made or actions taken by either the
Indemnitor or GM in connection with the defense of any such Third-Party
Claim shall not prejudice the rights of such party in any subsequent action
or proceeding between the parties.
(iv) If either GM or the Indemnitor fails to jointly defend
any such Third-Party Claim, then the other party shall solely defend such
Third-Party Claim and the party failing to jointly defend shall use
reasonable best efforts to cooperate with the other party in its defense of
such Third-Party Claim; provided, however, that GM may not compromise or
settle any such Third-Party
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Claim without the prior written consent of the Indemnitor, which consent
shall not be unreasonably withheld or delayed. All costs and expenses of
either party in connection with, and during the course of, the joint
control of the defense of any such Third-Party Claim shall be paid by the
party that incurs such costs and expenses.
12.6 Exclusivity of Article XII.
(a) This Article XII constitutes the complete and exclusive
agreement of the parties with respect to the indemnification of GM for
Tax-Related Losses contained in Section 12.4. Any conflict between the terms of
this Section 12.6 and any other provision of this Agreement, or any provision of
any other agreement, shall be resolved in favor of this Section 12.6, unless
such other provision expressly provides that it shall be given priority over
this specific section.
(b) Except for the right to pursue equitable remedies, the
remedies provided to GM in this Article XII shall be deemed the sole and
exclusive remedies of GM with respect to the subject matters set forth in this
Article XII. The parties hereto specifically acknowledge that, in accordance
with, but without limitation to, Section 14.10, GM shall have the right to
obtain an injunction or other appropriate equitable remedy, in the event that
Xxxxxx or the Purchaser, or any Subsidiary or affiliate of Xxxxxx or the
Purchaser, proposes to take any Potential Disqualifying Action or other action
described in Section 12.2 without the prior consent of GM or proposes otherwise
to take an action that is prohibited, or to fail to take an action that is
required, pursuant to this Article XII. The representations and warranties
contained in Section 12.1(a) shall terminate upon Closing. The representations
and warranties contained in Section 12.1(c) shall terminate upon Closing except
as necessary to preserve GM's rights to pursue the remedies afforded GM in
Sections 12.3(e) and 12.4 with respect to representations and warranties made at
or prior to the Split-Off Effective Time. The covenants contained in Article XII
shall not terminate upon Closing.
ARTICLE XIII
INDEMNIFICATION
13.1 Indemnification by GM. GM shall indemnify, defend and hold
harmless the Purchaser Indemnitees from and against any and all Losses incurred
or sustained by the Purchaser Indemnitees to the extent arising from Third-Party
Claims (except in the case of Sections 13.1(b) and 13.1(d), which need not arise
from Third-Party Claims) relating to, arising out of or due to:
(a) any untrue statement or alleged untrue statement of a
material fact contained in, or incorporated into, the GM Disclosure Portions of
the Disclosure Documents, or the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading;
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(b) (i) any and all Losses arising under Title IV of ERISA or
the Code with respect to any "multiemployer plan" (as defined in Section
4001(a)(3) of ERISA) or any "pension plan" (as defined in Section 3(2) of ERISA
and which is subject to Section 412 of the Code) currently or previously
maintained, contributed to or required to be contributed to by GM or any ERISA
Affiliate of GM (other than Xxxxxx or any Xxxxxx Affiliate) (other than Losses
in respect of any current or former employee of Xxxxxx or any Xxxxxx Affiliate
with respect to their employment with Xxxxxx or any Xxxxxx Affiliate), (ii) any
and all Losses relating to post-retirement health or life insurance benefits
(other than in respect of any employee (including any former employee) of Xxxxxx
or any Xxxxxx Affiliate with respect to their employment with Xxxxxx or any
Xxxxxx Affiliate), in each case with respect to any current or former employee
of GM or any GM Affiliate arising from any plan, contract or other arrangement
with respect to which GM or any GM Affiliate is a party, and (iii)
notwithstanding clause (i) above, any and all Losses relating to the payment of
benefits to the persons listed on Section 13.1(b) of the GM Disclosure Schedule
from any employee benefit or retirement plan sponsored, maintained or
contributed to by GM or any GM Affiliate; provided, however, that (A) the
indemnification provided in this Section 13.1(b) shall have no effect on the
respective rights and obligations of GM and Xxxxxx pursuant to the Separation
Agreement and the Ancillary Separation Agreements and (B) the indemnification
provided for in clause (iii) shall not pertain to or relieve Xxxxxx of its
obligations to pay and, pursuant to Section 5.1(f) of the Separation Agreement,
indemnify the GM Indemnitees from and against any and all Losses relating to
benefit obligations of Xxxxxx owing to such persons arising out of any employee
benefit plan or retirement plan sponsored, maintained or contributed to by
Xxxxxx or any Xxxxxx Affiliate; provided, that for the purposes of this Section
13.1(b), the term "Xxxxxx Affiliate" shall be deemed to include any entity
previously owned, directly or indirectly, by Xxxxxx;
(c) (i) any GM Sales Process Claim; provided, however, that (A)
other than with respect to any claim based on a breach of the Transaction
Agreements, the Purchaser on behalf of itself and the Purchaser Affiliates,
respectively, hereby waives, releases and forever discharges any and all GM
Sales Process Claims, except to the extent that the Purchaser or any Purchaser
Affiliate hereafter incurs any Losses in respect thereof arising out of a claim
by a Person other than the Purchaser or any Purchaser Affiliate and (B) other
than with respect to any claim based on a breach of the Transaction Agreements,
the Purchaser agrees that it shall not, and shall cause the Purchaser Affiliates
not to, seek to recover from GM or any GM Affiliate or any of their respective
Representatives for any Losses to the extent that such Losses relate to, arise
out of or are due to a GM Sales Process Claim unless and until such time as, and
only to the extent that, any of the Purchaser or any Purchaser Affiliate incurs
any Losses in respect thereof arising out of a claim by a Person other than the
Purchaser or any Purchaser Affiliate; and (ii) the declaration and payment by
Xxxxxx to GM of the Special Dividend; and
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(d) any failure of the representations and warranties set forth
in Section 4.6 hereof (other than the last sentence thereof) to be true and
correct at the Closing.
13.2 Indemnification by the Purchaser; Sharing of Certain Amounts.
(a) The Purchaser shall indemnify, defend and hold harmless the
GM Indemnitees and the Xxxxxx Indemnitees from and against any and all Losses
incurred or sustained by the GM Indemnitees or the Xxxxxx Indemnitees, as
applicable, to the extent arising from Third-Party Claims relating to, arising
out of or due to any untrue statement or alleged untrue statement of a material
fact contained in, or incorporated by reference into, the Purchaser Disclosure
Portions of the Disclosure Documents, or the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading (it being understood and agreed that, for
the purposes of this Agreement, "Purchaser Disclosure Portions" means any and
all information furnished by or on behalf of the Purchaser or any Purchaser
Affiliate or any of their respective Representatives, for inclusion in the
Disclosure Documents, including all information relating to: (i) the Purchaser
or any Purchaser Affiliate, the capital stock of the Purchaser, the business or
operations of the Purchaser, financial information and data relating to the
Purchaser or any Purchaser Affiliate (including both historical and pro forma
financial data), or (ii) plans regarding the business or operations of the
Purchaser or any Purchaser Affiliate and other forward-looking information
regarding the Purchaser or any Purchaser Affiliate).
(b) The Purchaser shall indemnify, defend and hold harmless the
Xxxxxx Indemnitees and the GM Indemnitees from and against any and all Losses to
the extent relating to, arising out of or due to Third-Party Claims for Losses
in the case of clause (i) below, and any and all fines and monetary penalties
imposed by a Special Foreign Governmental Authority in the case of clause (ii)
below, incurred or sustained by the Xxxxxx Indemnitees or the GM Indemnitees, as
applicable, relating to, arising out of or due to:
(i) effectuating the Closing notwithstanding the failure
of the Purchaser and/or any of its Affiliates to obtain all consents,
waivers, approvals and/or other authorizations required in connection with
the Transactions from any Specified Foreign Person; and
(ii) effectuating the Closing notwithstanding (x) the
failure of the Purchaser, GM, Xxxxxx and/or any of their respective
Affiliates to obtain any consent, waiver, approval or other authorization
from, or make any filing with, any Specified Foreign Governmental Authority
required in connection with the Transactions, (y) the failure of the
Purchaser, GM, Xxxxxx and/or any of their respective Affiliates, to comply
with any applicable waiting period of any Specified Foreign Governmental
Authority required to be complied with in connection with the Transactions
and/or (z) the existence of a temporary
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restraining order, preliminary or permanent injunction or other order or
decree issued by any Specified Foreign Governmental Authority.
(c) The Purchaser shall indemnify, defend and hold harmless the
GM Indemnitees and the Xxxxxx Indemnitees from and against any and all Losses
incurred or sustained by the GM Indemnitees and the Xxxxxx Indemnitees, as
applicable, to the extent arising from Third-Party Claims relating to, arising
out of or due to any Purchaser Sales Process Claim; provided, however, that (i)
other than with respect to any claim based on a breach of the Transaction
Agreements, GM on behalf of itself and the GM Affiliates and Xxxxxx on behalf of
itself and the Xxxxxx Affiliates, respectively, hereby waive, release and
forever discharge any and all Purchaser Sales Process Claims, except to the
extent that GM or any GM Affiliate or Xxxxxx or any Xxxxxx Affiliate, as
applicable, hereafter incurs any Losses in respect thereof arising out of a
claim by a Person other than GM or any GM Affiliate or Xxxxxx or any Xxxxxx
Affiliate, as applicable, and (ii) other than with respect to any claim based on
a breach of the Transaction Agreements, each of GM and Xxxxxx agrees that it
shall not, and shall cause its respective Affiliates not to, seek to recover
from the Purchaser or any Purchaser Affiliate or any of their respective
Representatives for any Losses to the extent that such Losses relate to, arise
out of or are due to a Purchaser Sales Process Claim unless and until such time
as, and only to the extent that, any of GM or any GM Affiliate or Xxxxxx or any
Xxxxxx Affiliate incurs any Losses in respect thereof arising out of a claim by
a Person other than GM or any GM Affiliate or Xxxxxx or any Xxxxxx Affiliate, as
applicable.
13.3 Indemnification by Xxxxxx. Xxxxxx shall indemnify, defend and
hold harmless the Purchaser Indemnitees from and against any and all Losses
incurred or sustained by the Purchaser Indemnitees to the extent arising from
Third-Party Claims relating to, arising out of or due to:
(a) any untrue statement or alleged untrue statement of a
material fact contained in, or incorporated by reference into, the Xxxxxx
Disclosure Portions (as defined in the Separation Agreement) of the Disclosure
Documents, or the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading;
(b) any untrue statement or alleged untrue statement of a
material fact contained in, or incorporated by reference into, any report or
filing of Xxxxxx with respect to any period entirely or partially prior to the
Split-Off Effective Time required by or filed under the Exchange Act, or any
filing made prior to the Split-Off Effective Time under the Securities Act by
Xxxxxx, or the omission or alleged omission to state in any such report or
filing a material fact required to be stated therein or necessary to make the
statements therein not misleading; provided, however, that Xxxxxx shall not be
liable in any such case to the extent that any such Losses relate to, arise out
of or are based upon any such untrue statement or alleged untrue statement or
omission or alleged omission made in any such report or filing in reliance upon
and in conformity with written information furnished to Xxxxxx or any Xxxxxx
Affiliate or any
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of their respective Representatives by or on behalf of GM or any GM Affiliate or
any of their respective Representatives specifically for use in preparing such
report or filing by Xxxxxx; provided, further, that Xxxxxx shall not be liable
in any such case to the extent that any such Losses relate to, arise out of or
are based upon statements or omissions relating to any plans, proposals,
intentions or policies of GM or any GM Affiliate existing at the time that such
report or filing was made; provided, further, that this Section 13.3(b) shall
not apply to the Disclosure Documents (which matters are addressed in Section
13.3(a) above); and
(c) any untrue statement or alleged untrue statement of a
material fact contained in, or incorporated by reference into, any report or
other filing of GM with respect to any period entirely or partially prior to the
Split-Off Effective Time required by or filed under the Exchange Act relating to
Xxxxxx, any Xxxxxx Affiliate, the Xxxxxx Business or the GM Class H Common
Stock, or any filing made prior to the Split-Off Effective Time under the
Securities Act by GM relating to Xxxxxx, any Xxxxxx Affiliate, the Xxxxxx
Business or the GM Class H Common Stock, or the omission or alleged omission to
state in any such report or filing a material fact required to be stated therein
or necessary to make the statements therein not misleading; provided, however,
that, with respect to any report or filing of GM, Xxxxxx shall be liable in any
such case only to the extent that any such Losses arise out of or are based upon
any such untrue statement or alleged untrue statement or omission or alleged
omission made in any such report or filing in reliance upon and in conformity
with written information furnished to GM, any GM Affiliate or any of their
respective Representatives by or on behalf of Xxxxxx, any Xxxxxx Affiliate or
any of their respective Representatives specifically for use in preparing such
report or filing by GM; provided, further, that Xxxxxx shall not be liable in
any such case to the extent that any such Losses relate to, arise out of or are
based upon any plans, proposals, intentions or policies of GM or any GM
Affiliate existing at the time such report or filing was made; provided,
further, that this Section 13.3(c) shall not apply to the Disclosure Documents
(which matters are addressed in Section 13.3(a) above).
13.4 Tax Effects of Indemnification.
(a) Any indemnification payment made under this Agreement by the
Purchaser to any GM Indemnitee, or by GM to any Purchaser Indemnitee, shall for
all Tax purposes, except as required by Applicable Law, be characterized as an
adjustment to the Purchase Price. Any indemnification payment made under this
Agreement by GM to any Xxxxxx Indemnitee, or by Xxxxxx to any GM Indemnitee,
shall for all Tax purposes, except as required by Applicable Law, be
characterized as a distribution from Xxxxxx to GM or a contribution by GM to
Xxxxxx, as applicable, made immediately prior to the Split-Off Effective Time.
Any indemnification payment made under this Agreement by the Purchaser to any
Xxxxxx Indemnitee shall for all Tax purposes, except as required by Applicable
Law, be characterized as a contribution by the Purchaser to Xxxxxx.
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(b) The amount of any Loss for which indemnification is provided
under this Agreement shall be adjusted in accordance with Section 5.5(b) of the
Separation Agreement.
13.5 Effect of Insurance Upon Indemnification. The amount which a
Person obligated to provide indemnification under this Agreement (an
"Indemnifying Party") is required to pay to any Person entitled to seek
indemnification under this Agreement (an "Indemnitee") pursuant to this Article
XIII shall be reduced (including retroactively) by any payment actually received
and retained by an Indemnitee from an insurance carrier or paid by an insurance
carrier on behalf of the insured, net of any applicable premium adjustment
("Insurance Proceeds") and other amounts actually recovered by such Indemnitee
in reduction of the related Loss, it being understood and agreed that each of
GM, Xxxxxx and the Purchaser shall use reasonable best efforts to collect any
such proceeds or other amounts to which it or any of its Affiliates is entitled,
without regard to whether it is the Indemnifying Party hereunder. No Indemnitee
shall be required, however, to collect any such proceeds or other amounts prior
to being entitled to indemnification from an Indemnifying Party hereunder. If an
Indemnitee receives a payment from an Indemnifying Party in respect of a Loss
(an "Indemnity Payment") and subsequently receives Insurance Proceeds or other
amounts in respect of such Loss, then such Indemnitee shall pay to such
Indemnifying Party an amount equal to the difference between (a) the sum of the
amount of such Indemnity Payment and the amount of such Insurance Proceeds or
other amounts actually received and (b) the amount of such Loss, in each case
adjusted (at such time as appropriate adjustment can be determined) to reflect
any premium adjustment attributable to such claim.
13.6 Procedure for Indemnification Involving Third-Party Claims.
(a) Notice of Claim. If any Indemnitee receives notice of the
assertion of any Third-Party Claim with respect to which an Indemnifying Party
is obligated under this Article XIII to provide indemnification, such Indemnitee
shall give such Indemnifying Party notice thereof (together with a copy of such
Third-Party Claim, process or other legal pleading) promptly after becoming
aware of such Third-Party Claim; provided, however, that the failure of any
Indemnitee to give notice as provided in this section shall not relieve any
Indemnifying Party of its obligations under this Article XIII, except to the
extent that such Indemnifying Party is actually prejudiced by such failure to
give notice. Such notice shall describe such Third-Party Claim in reasonable
detail.
(b) Obligation of Indemnifying Party. An Indemnifying Party, at
such Indemnifying Party's own expense and through counsel chosen by such
Indemnifying Party (which counsel shall be reasonably acceptable to the
Indemnitee), may elect to defend any Third-Party Claim. If an Indemnifying Party
elects to defend a Third-Party Claim, then, within ten (10) Business Days after
receiving notice of such Third-Party Claim (or sooner, if the nature of such
Third-Party Claim so requires), such Indemnifying Party shall notify the
Indemnitee of its intent to do so, and such Indemnitee shall cooperate in the
defense of such Third-Party Claim. Such Indemnifying Party shall
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pay such Indemnitee's reasonable out-of-pocket expenses incurred in connection
with such cooperation. Such Indemnifying Party shall keep the Indemnitee
reasonably informed as to the status of the defense of such Third-Party Claim.
After notice from an Indemnifying Party to an Indemnitee of its election to
assume the defense of a Third-Party Claim, such Indemnifying Party shall not be
liable to such Indemnitee under this Article XIII for any legal or other
expenses subsequently incurred by such Indemnitee in connection with the defense
thereof other than those expenses referred to in the preceding sentence;
provided, however, that such Indemnitee shall have the right to employ one law
firm as counsel, together with a separate local law firm in each applicable
jurisdiction ("Separate Counsel"), to represent such Indemnitee in any action or
group of related actions (which firm or firms shall be reasonably acceptable to
the Indemnifying Party) if, in such Indemnitee's reasonable judgment at any
time, either a conflict of interest between such Indemnitee and such
Indemnifying Party exists in respect of such claim, or there may be defenses
available to such Indemnitee which are different from or in addition to those
available to such Indemnifying Party and the representation of both parties by
the same counsel would be inappropriate, and in that event (i) the reasonable
fees and expenses of such Separate Counsel shall be paid by such Indemnifying
Party (it being understood, however, that the Indemnifying Party shall not be
liable for the expenses of more than one Separate Counsel (excluding local
counsel) with respect to any Third-Party Claim (even if against multiple
Indemnitees)) and (ii) each such Indemnifying Party and such Indemnitee shall
have the right to conduct its own defense in respect of such claim. If an
Indemnifying Party elects not to defend against a Third-Party Claim, or fails to
notify an Indemnitee of its election as provided in this Article XIII within the
period of ten (10) Business Days described above, the Indemnitee may defend,
compromise, and settle such Third-Party Claim and shall be entitled to
indemnification hereunder (to the extent permitted hereunder); provided,
however, that no such Indemnitee may compromise or settle any such Third-Party
Claim without the prior written consent of the Indemnifying Party, which consent
shall not be unreasonably withheld or delayed. Notwithstanding the foregoing,
the Indemnifying Party shall not, without the prior written consent of the
Indemnitee, settle or compromise any Third-Party Claim or consent to the entry
of any judgment which does not include as an unconditional term thereof the
delivery by the claimant or plaintiff to the Indemnitee of a written release
from all liability in respect of such Third-Party Claim.
(c) Joint Defense of Certain Claims. Notwithstanding the
provisions of Section 13.6(b) hereof, GM, Xxxxxx and the Purchaser shall jointly
control the defense of, and cooperate with each other with respect to defending,
any Third-Party Claim with respect to which any two or more parties are claiming
that they are entitled to indemnification under Section 13.1, 13.2 or 13.3. If
any party fails to defend jointly any such Third-Party Claim, the other party
shall solely defend such Third-Party Claim and the party failing to defend
jointly shall use reasonable best efforts to cooperate with the other party in
its defense of such Third-Party Claim; provided, however, that neither party may
compromise or settle any such Third-Party Claim without the prior written
consent of the other party, which consent shall not be unreasonably withheld or
delayed. All costs and expenses of either party in connection with, and during
the course of, the
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joint control of the defense of any such Third-Party Claim shall be initially
paid by the party that incurs such costs and expenses. Such costs and expenses
shall be reallocated and reimbursed in accordance with the respective
indemnification obligations of the parties at the conclusion of the defense of
such Third-Party Claim.
13.7 Procedure for Indemnification Not Involving Third-Party Claims.
If any Indemnitee desires to assert against an Indemnifying Party any claim for
indemnification under this Article XIII other than a Third-Party Claim, the
Indemnitee shall deliver to the Indemnifying Party notice of its demand for
satisfaction of such claim (a "Request"), specifying in reasonable detail the
amount of such claim and the basis for asserting such claim. Within thirty (30)
days after the Indemnifying Party has been given a Request, the Indemnifying
Party shall either (i) satisfy the claim requested to be satisfied in such
Request by delivering to the Indemnitee payment by wire transfer or a certified
or bank cashier's check payable to the Indemnified Party in immediately
available funds in an amount equal to the amount of such claim, or (ii) notify
the Indemnitee that the Indemnifying Party contests such claim by delivering to
the Indemnitee a written notice of an objection to such claim that specifies in
reasonable detail the basis for contesting such claim.
13.8 Exclusive Remedies. Except for the right to pursue equitable
remedies and for acts constituting fraud and criminal misconduct, the remedies
provided in this Article XIII shall be deemed the sole and exclusive remedies of
the parties, from and after the Merger Effective Time, with respect to the
subject matters of the indemnification provisions of this Article XIII.
13.9 Other Liabilities. Except as provided in Section 13.4(b) hereof,
this Article XIII shall not be applicable to any matter which is governed by
Article XII of this Agreement.
ARTICLE XIV
MISCELLANEOUS
14.1 Certain Definitions.
(a) For purposes of this Agreement, the following terms shall
have the meanings specified in this Section 14.1:
"20-Day Average Purchaser Stock Price" shall have the meaning ascribed to
such term in the Merger Agreement.
"Action" means a suit, claim, action, proceeding or investigation.
"Additional Non-Recommendation Fee" shall have the meaning ascribed to such
term in Section 3.4(a)(iii) hereof.
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"Affiliate" or "affiliate" means with respect to GM, Xxxxxx or the
Purchaser, a GM Affiliate, a Xxxxxx Affiliate or a Purchaser Affiliate, as the
case may be.
"Agreement" shall have the meaning ascribed to such term in the
preamble hereof.
"American Depositary Receipts" shall have the meaning ascribed to such
term in Section 6.4(a) hereof.
"American Depositary Shares" shall have the meaning ascribed to such
term in Section 6.4(a) hereof.
"Ancillary Separation Agreements" shall have the meaning ascribed to
such term in the Separation Agreement.
"Antitrust Law" shall have the meaning ascribed to such term in Section
9.4(c) hereof.
"Applicable Law" means all applicable laws, statutes, orders, rules,
regulations, policies or guidelines promulgated, or judgments, decisions or
orders entered by any Governmental Authority.
"ASX" shall have the meaning ascribed to such term in Article VI
hereof.
"Business Day" means any day of the year on which national banking
institutions in New York are open to the public for conducting business and are
not required or authorized to close.
"Cash Fraction" shall have the meaning ascribed to such term in
Section 2.1. hereof.
"Certificates" shall have the meaning ascribed to such term in Section
7.7(a) hereof.
"Change in Tax Law" means any amendment to, or change in (including any
announcement of a prospective change, such as, but not limited to, the reporting
of legislation by the House Ways and Means Committee or the Senate Finance
Committee, or the proposal of a legislative change), the laws or regulations of
the United States, or any official administrative pronouncement (including the
issuance of any proposed regulation or IRS pronouncement) or judicial decision
interpreting or applying such laws or regulations, in each case that has an
effective date that is proposed to precede the Split-Off Effective Time or that
otherwise applies to or affects the tax treatment of the Split-Off or affects
the impact that a Potential Disqualifying Action would have on the Tax-Free
Status of the Split-Off.
"Claim" shall have the meaning ascribed to such term in Section 9.12(b)
hereof.
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"Class H Fraction" shall have the meaning ascribed to such term in
Section 7.4(b) hereof.
"Closing" shall have the meaning ascribed to such term in Section 3.1
hereof.
"Closing Date" shall have the meaning ascribed to such term in Section
3.1 hereof.
"Code" shall have the meaning ascribed to such term in the preamble
hereof.
"Communications Regulation" shall have the meaning ascribed to such
term in Section 9.4(e) hereof.
"Competing Transaction" shall have the meaning ascribed to such term in
Section 9.6(a)(i) hereof.
"Confidentiality Agreement" shall have the meaning ascribed to such
term in Section 9.2 hereof.
"Confirmation" shall have the meaning ascribed to such term in Section
7.2(d) hereof.
"Confirmation Period" shall have the meaning ascribed to such term in
Section 7.2(d) hereof.
"Confirmation Request" shall have the meaning ascribed to such term in
Section 7.2(d) hereof.
"Consent Solicitation Failure" shall have the meaning ascribed to such
term in Section 3.2(b)(iii) hereof.
"Control" means the possession, direct or indirect, of the power to
direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities, by contract or otherwise or
the beneficial ownership (as such term is used in Rule 13d-3 of the Exchange
Act) of more than fifty percent (50%) of the voting securities of a Person.
"Current GM Employee Benefit Plans Registration Rights Agreement" shall
have the meaning ascribed to such term in Section 4.5(b) hereof.
"Custodian" shall have the meaning ascribed to such term in Section
6.4(b) hereof.
"Department of Labor" means the United States Department of Labor.
"Deposit Agreement" shall have the meaning ascribed to such term in
Section 9.18 hereof.
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"Depositary" shall have the meaning ascribed to such term in Section
9.18 hereof.
"DGCL" shall have the meaning ascribed to such term in Section
3.2(b)(iii) hereof.
"DIRECTV Business" shall have the meaning ascribed to such term in
Section 12.2(c) hereof.
"Disclosure Documents" shall have the meaning ascribed to such term in
Section 9.1(a) hereof.
"Dispute" shall have the meaning ascribed to such term in Section 14.15
hereof.
"Dispute Notice" shall have the meaning ascribed to such term in
Section 14.15(a) hereof.
"Disqualifying Action" shall have the meaning ascribed to such term in
Section 12.2(a)(i) hereof.
"Employee Matters Agreement" means the Employee Matters Agreement in
the form set forth as Exhibit I, to be entered into between Xxxxxx and the
Purchaser concurrently with the execution of this Agreement.
"Encumbrance" means any lien, pledge, mortgage, deed of trust, security
interest, claim, lease, charge, option, right of first refusal, preemptive
rights, restriction, easement, servitude, or any transfer restriction under any
shareholder or similar agreement, other than, if any such Encumbrance relates to
capital stock or Permitted Encumbrances of the type set forth in clause (v) of
the definition thereof.
"Environmental and Safety Requirements" means all applicable federal,
state, local and foreign statutes, regulations, ordinances and other provisions
having the force or effect of law, all judicial and administrative orders and
determinations and all common law in each case concerning public health and
safety, worker health and safety, and pollution or protection of the environment
(including all those relating to the presence, use, production, generation,
handling, transportation, treatment, storage, disposal, distribution, labeling,
testing, processing, discharge, Release or threatened Release (whether onsite or
offsite), control, or cleanup of any hazardous materials, substances or wastes,
chemical substances or mixtures, pesticides, pollutants, contaminants, toxic
chemicals, petroleum products or byproducts, asbestos, polychlorinated
biphenyls, noise or radiation).
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and the applicable regulations promulgated thereunder.
"Excess Shares Provision" means Section 4 of Article IV of the Xxxxxx
Charter Amendment.
93
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.
"Exchange Agent" shall have the meaning ascribed to such term in
Section 7.7(a) hereof.
"Exchange Option" shall have the meaning ascribed to such term in
Section 7.10(a) hereof.
"Exchange Ratio" shall have the meaning ascribed to such term in the
Merger Agreement.
"FCC" shall have the meaning ascribed to such term in Section 5.20
hereof.
"FCC Consent Application" shall have the meaning ascribed to such term
in Section 9.4(b) hereof.
"Final Determination" means the final resolution of liability for any
Tax for a taxable period (i) by IRS Form 870 or 870-AD (or any successor forms
thereto), on the date of acceptance by or on behalf of the taxpayer, or by a
comparable form under the laws of other jurisdictions; except that a Form 870 or
870-AD or comparable form that reserves (whether by its terms or by operation of
law) the right of the taxpayer to file a claim for refund and/or the right of
the taxing authority to assert a further deficiency shall not constitute a Final
Determination; (ii) by a decision, judgment, decree or other order by a court of
competent jurisdiction, which has become final and unappealable; (iii) by a
closing agreement or accepted offer in compromise under Section 7121 or 7122 of
the Code, or comparable agreements under the laws of other jurisdictions; (iv)
by any allowance of a refund or credit in respect of an overpayment of Tax, but
only after the expiration of all periods during which such refund may be
recovered (including by way of offset) by the taxing jurisdiction; or (v) by any
other final disposition, including by reasons of the expiration of the
applicable statute of limitations or by mutual agreement of the parties.
"FIRPTA Affidavit" shall have the meaning ascribed to such term in
Section 10.2(e) hereof.
"Fixed Price Shares" shall have the meaning ascribed to such term in
Section 2.1.
"Floor Price Termination Notice" shall have the meaning ascribed to
such term in Section 3.2(e).
"GAAP" means generally accepted United States accounting principles as
of the date hereof.
"GM" shall have the meaning ascribed to such term in the preamble
hereof.
94
"GM $1-2/3 Common Stock" shall have the meaning ascribed to such term
in the preamble hereof.
"GM 10-K" shall have the meaning ascribed to such term in Article IV
hereof.
"GM Affiliate" shall have the meaning ascribed to such term in the
Separation Agreement.
"GM Board Policy Statement" shall have the meaning ascribed to such
term in Section 7.2(a)(i) hereof.
"GM Certificate of Incorporation" shall have the meaning ascribed to
such term in the preamble hereof.
"GM Charter Amendment" shall have the meaning ascribed to such term in
the preamble hereof.
"GM Class H Common Stock" shall have the meaning ascribed to such term
in the preamble hereof.
"GM Disclosure Portions" shall have the meaning ascribed to such term
in the Separation Agreement.
"GM Disclosure Schedule" shall have the meaning ascribed to such term
in Section 4.5(b) hereof.
"GM Employee Benefit Plans" shall have the meaning ascribed to such
term in Section 4.5(b) hereof.
"GM Employee Benefit Plans Transfer Agreement" shall have the meaning
ascribed to such term in Section 4.5(b) hereof.
"GM Financial Advisor Fairness Opinions" shall have the meaning
ascribed to such term in Section 7.1(b) hereof.
"GM Financial Advisors" shall have the meaning ascribed to such term in
Section 7.1(b) hereof.
"GM Hourly Pension Plan" shall have the meaning ascribed to such term
in Section 4.5(b) hereof.
"GM Indemnitees" means GM, all GM Affiliates and each of their
respective directors, officers and employees (in their capacities as such).
"GM Preference Stock" shall have the meaning ascribed to such term in
Section 4.5(a) hereof.
95
"GM Preferred Stock" shall have the meaning ascribed to such term in
Section 4.5(a) hereof.
"GM Registration Rights Agreement" shall mean the Registration Rights
Agreement in the form attached hereto as Exhibit H, to be entered into by and
between GM and Purchaser concurrently with the execution of this Agreement.
"GM Salaried Pension Plan" shall have the meaning ascribed to such term
in Section 4.5(b) hereof.
"GM Sales Process Claim" means all claims (including any and all
claims, controversies, actions, causes of action, cross-claims, counter-claims,
demands, debts, compensatory damages, liquidated damages, punitive or exemplary
damages, other damages, claims for costs and attorneys' fees, or liabilities of
any nature whatsoever in law and in equity, whether related to, arising out of,
or due to occurrences or conditions prior to, on or after the Split-Off
Effective Time, and whether known or unknown, suspected, or claimed) related to,
arising out of or due to, directly or indirectly, the investigation,
consideration, pursuit or entering into (including the adequacy of disclosure by
and due diligence of GM or Xxxxxx and including any allegations of breach of
fiduciary duty by Persons associated with, including directors of, GM or Xxxxxx
with respect to the transactions contemplated by the Transaction Agreements) of
one or more strategic transactions involving Xxxxxx or any Xxxxxx Affiliate and
one or more unaffiliated Persons.
"GM SEC Documents" shall have the meaning ascribed to such term in
Article IV.
"GM Termination Fee" shall have the meaning ascribed to such term in
Section 3.4(a)(i) hereof.
"GM Transaction Agreements" means this Agreement, the Separation
Agreement, the Ancillary Separation Agreements, the Joint Defense Agreement and
the GM Registration Rights Agreement.
"GM Transfer Agent" shall have the meaning ascribed to such term in
Section 7.7(a) hereof.
"Governmental Authority" means any government or governmental or
regulatory body thereof, or political subdivision thereof, whether federal,
state, local, U.S. or non-U.S., or any agency, instrumentality or authority
thereof, or any court or arbitrator (public or private).
"HSR Act" shall mean the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act
of 1976, as amended, and the rules and regulations promulgated thereunder.
"HSSL" means Xxxxxx Software Systems Limited.
96
"Xxxxxx" shall have the meaning ascribed to such term in the preamble
hereof.
"Xxxxxx 10-K" shall have the meaning ascribed to such term in Article V
hereof.
"Xxxxxx Affiliate" shall have the meaning ascribed to such term in the
Separation Agreement.
"Xxxxxx Business" shall mean the business of Xxxxxx and its
Subsidiaries taken as a whole.
"Xxxxxx By-laws Amendment" shall have the meaning ascribed to such term
in Section 7.12 hereof.
"Xxxxxx Capital Stock" means any class or series of capital stock of
Xxxxxx or of any successor corporation
"Xxxxxx Charter Amendment" shall have the meaning ascribed to such term
in Section 7.12 hereof.
"Xxxxxx Class B Common Stock" shall have the meaning ascribed to such
term in the preamble hereof.
"Xxxxxx Common Stock" shall have the meaning ascribed to such term in
the preamble hereof.
"Xxxxxx Common Stock Exchange" shall have the meaning ascribed to such
term in Section 7.5(b)(i) hereof.
"Xxxxxx Covered Person" shall have the meaning ascribed to such term in
the Separation Agreement.
"Xxxxxx Disclosure Portions" shall have the meaning ascribed to such
term in the Separation Agreement.
"Xxxxxx Disclosure Schedule" shall have the meaning ascribed to such
term in Section 5.2 hereof.
"Xxxxxx ERISA Affiliate" shall have the meaning ascribed to such term
in Section 5.13 hereof.
"Xxxxxx Existing Pension Plan" means any "pension plan" (as defined in
Section 3(2) of ERISA and which is subject to Section 412 of the Code) currently
maintained by Xxxxxx or any Xxxxxx Affiliates.
"Xxxxxx FCC Licenses" shall have the meaning ascribed to such term in
Section 5.20 hereof.
97
"Xxxxxx Financial Advisor Fairness Opinions" shall have the meaning
ascribed to such term in Section 7.1(b) hereof.
"Xxxxxx Financial Advisors" shall have the meaning ascribed to such
term in Section 7.1(b) hereof.
"Xxxxxx Indemnified Party" shall have the meaning ascribed to such term
in Section 9.12(b) hereof.
"Xxxxxx Indemnitees" means Xxxxxx, all Xxxxxx Affiliates and each of
their respective directors, officers and employees (in their capacities as
such).
"Xxxxxx Independent Directors" shall have the meaning ascribed to such
term in the Xxxxxx By-Laws.
"Xxxxxx Intellectual Property" means all Intellectual Property (i)
owned by Xxxxxx or any of its Subsidiaries or (ii) used or held for use by
Xxxxxx or any of its Subsidiaries in their business pursuant to a valid license
agreement.
"Xxxxxx' Knowledge" or "to the Knowledge of Xxxxxx" shall have the
meaning ascribed to such term in Section 14.1(b) hereof.
"Xxxxxx Material Adverse Effect" means, when used with reference to one
or more events, changes, circumstances or effects, a material adverse effect on
the business, operations, assets, liabilities or financial condition of Xxxxxx
and its Subsidiaries taken as a whole, other than events, changes, circumstances
or effects that arise out of or result from (or, in the case of clause (iii)
below, directly arise out of or result from) (i) economic factors affecting the
economy or financial markets as a whole (whether such change results from any
outbreak of hostility, terrorist activity, war or otherwise), (ii) economic,
political or regulatory factors generally affecting the industries or countries
in which Xxxxxx or any of its Subsidiaries operates, (iii) the announcement of
the execution of this Agreement and the agreements contemplated hereby or the
compliance by the parties with their respective obligations hereunder and
thereunder (including any cancellations of or delays in customer orders, any
reduction in sales, any disruption in supplier, distributor, partner or similar
relationships or any loss of employees), (iv) any conditions imposed by, or
actions taken at the direction of, any Governmental Authority in connection with
the transactions contemplated hereby (including compliance with any requests or
orders of the Pension Benefit Guaranty Corporation relating to a Xxxxxx Existing
Pension Plan) and (v) the occurrence of any of the events described in Section
14.1 of the Xxxxxx Disclosure Schedule; provided, however, that, without
limiting the effect of Applicable Law relating to the allocation of the burden
of proof applicable to assertions as to the presence or absence of a Xxxxxx
Material Adverse Effect (other than with respect to clause (iii) above), Xxxxxx
shall have the burden of proof with respect to any assertion by it of the
applicability of the exception to the definition of Xxxxxx Material Adverse
Effect set forth in clause (iii) above.
98
"Xxxxxx Permit Entities" shall have the meaning ascribed to such term
in Section 5.20 hereof.
"Xxxxxx Permits" shall have the meaning ascribed to such term in
Section 5.20 hereof.
"Xxxxxx Plans" shall have the meaning ascribed to such term in Section
5.13 hereof.
"Xxxxxx SEC Documents" shall have the meaning ascribed to such term in
Article V hereof.
"Xxxxxx Separation Transactions" shall have the meaning ascribed to
such term in the preamble hereof.
"Xxxxxx Transaction Agreements" means this Agreement, the Separation
Agreement, the Merger Agreement, the Employee Matters Agreement, the Ancillary
Separation Agreements and the Joint Defense Agreement.
"Indemnification Action" shall have the meaning ascribed to such term
in Section 12.4(a) hereof.
"Indemnifying Party" shall have the meaning ascribed to such term in
Section 13.5 hereof.
"Indemnitee" shall have the meaning ascribed to such term in Section
13.5 hereof.
"Indemnitor" shall have the meaning ascribed to such term in Section
12.4(c) hereof.
"Indemnity Payment" shall have the meaning ascribed to such term in
Section 13.5 hereof.
"Insurance Proceeds" shall have the meaning ascribed to such term in
Section 13.5 hereof.
"Intellectual Property" means:
(i) all patents and patent applications, trademarks, service marks,
trade names (whether registered or unregistered) and pending applications for
registration of any of the foregoing, domain names, copyrights and registrations
and applications therefor, mask works and any applications for registration
thereof, trade secrets, inventions, know-how, confidential and other
intellectual property and proprietary rights arising from or in respect of the
foregoing; and
(ii) any and all computer programs, including any and all software
implementations (whether in source code or object code), databases, including
any and all
99
data and collections of data, whether machine readable or otherwise, and any
other work product used to design and develop any of the foregoing and all
documentation relating to the foregoing.
"Interim Period" shall have the meaning ascribed to such term in the
Separation Agreement.
"IRS" means the Internal Revenue Service of the United States
Department of the Treasury.
"IRS Submission" shall have the meaning ascribed to such term in
Section 9.7(a) hereof.
"Joint Defense Agreement" shall mean the Joint Defense Agreement, dated
as of the date hereof and attached hereto as Exhibit G.
"Losses" shall have the meaning ascribed to such term in the Separation
Agreement.
"LTAP" shall have the meaning ascribed to such term in Section 4.5(a)
hereof.
"Mailing Date" shall have the meaning ascribed to such term in Section
7.2(a)(iii) hereof.
"Material Real Property" shall have the meaning ascribed to such term
in Section 5.23 hereof.
"Merger" shall have the meaning ascribed to such term in the preamble
hereof.
"Merger Agreement" shall have the meaning ascribed to such term in the
preamble hereof.
"Merger Consideration" shall have the meaning ascribed to such term in
the Merger Agreement.
"Merger Effective Time" shall have the meaning ascribed to such term in
the Merger Agreement.
"Merger Sub" shall have the meaning ascribed to such term in the
Separation Agreement.
"Merger Sub Common Shares" shall have the meaning ascribed to such term
in Section 6.14(b) hereof.
"Negotiation Period" shall have the meaning ascribed to such term in
Section 14.15(a) hereof.
100
"Non-Recommendation Determination" shall have the meaning ascribed to
such term in Section 7.2(b) hereof.
"Non-Recommendation Fee" shall have the meaning ascribed to such term
in Section 3.4(a)(iii) hereof.
"Notice of Non-Mailing" shall have the meaning ascribed to such term in
Section 7.3(d) hereof.
"Notice of Non-Recommendation" shall have the meaning ascribed to such
term in Section 7.2(b) hereof.
"NPAL" means News Publishing Australia Limited, a Delaware corporation.
"NYSE" shall have the meaning ascribed to such term in Section 4.3(d)
hereof.
"Option" shall have the meaning ascribed to such term in Section
7.10(a) hereof.
"Ordinary Shares" shall have the meaning ascribed to such term in
Section 6.4(a) hereof.
"Outside Date" shall have the meaning ascribed to such term in Section
3.2(b)(i) hereof.
"PanAmSat" means PanAmSat Corporation, a Delaware corporation.
"PanAmSat 10-K" shall have the meaning ascribed to such term in Article
V.
"PanAmSat SEC Documents" shall have the meaning ascribed to such term
in Article V.
"Permits" shall have the meaning ascribed to such term in Section 5.20
hereof.
"Permitted Encumbrances" means (i) all defects, exceptions,
restrictions, easements, rights of way and encumbrances disclosed in policies of
title insurance that have been made available to the Purchaser; (ii) statutory
liens for current Taxes, assessments or other governmental charges not yet
delinquent or the amount or validity of which is being contested in good faith
by appropriate proceedings; provided an appropriate reserve is established
therefor; (iii) mechanics', carriers', workers', repairers' and similar
Encumbrances arising or incurred in the ordinary course of business; (iv)
zoning, entitlement and other land use and environmental regulations by any
Governmental Authority; and (v) restrictions on transfer pursuant to federal,
state and foreign securities laws.
"Person" means any individual, corporation, partnership, limited
liability company, firm, joint venture, association, joint-stock company, trust,
unincorporated organization, Governmental Authority or other entity.
101
"Potential Disqualifying Action" shall have the meaning ascribed to
such term in Section 12.2(a)(ii) hereof.
"Preferred Limited Voting Ordinary Shares" shall have the meaning
ascribed to such term in Section 6.4(a) hereof.
"PRIMESTAR Registration Rights Agreement" shall have the meaning
ascribed to such term in Section 4.5(b) hereof.
"Prohibition Period" shall have the meaning ascribed to such term in
the Xxxxxx Charter Amendment.
"Proxy/Consent Solicitation Statement" shall have the meaning ascribed
to such term in Section 7.2(a)(ii) hereof.
"Purchase Price" shall have the meaning ascribed to such term in
Section 2.1 hereof.
"Purchaser" shall have the meaning ascribed to such term in the
preamble hereof.
"Purchaser Affiliate" means, as of any particular time, a Person that,
directly or indirectly through one or more intermediaries, Controls, is
Controlled by or is under common Control with the Purchaser as of such time;
provided, however, that the term "Purchaser Affiliate" shall not include Xxxxxx
and its Subsidiaries.
"Purchaser Consideration" shall have the meaning ascribed to such term
in the Merger Agreement.
"Purchaser Disclosure Portions" shall have the meaning ascribed to such
term in Section 13.2(a) hereof.
"Purchaser Disclosure Schedule" shall have the meaning ascribed to such
term in Section 6.3 hereof.
"Purchaser Documents" shall have the meaning ascribed to such term in
Section 6.2(a) hereof.
"Purchaser Filings" shall have the meaning ascribed to such term in
Article VI hereof.
"Purchaser Indemnitees" means the Purchaser, all Purchaser Affiliates
and each of their respective directors, officers and employees (in their
capacities as such).
"Purchaser Material Adverse Effect" means, when used with reference to
one or more events, changes, circumstances or effects, a material adverse effect
on the business, operations, assets, liabilities or financial condition of the
Purchaser and its Subsidiaries taken as a whole, other than events, changes,
circumstances or effects that arise out of or
102
result from (i) economic factors affecting the economy or financial markets as a
whole (whether such change results from any outbreak of hostility, terrorist
activity, war or otherwise), and (ii) economic, political or regulatory factors
generally affecting the industries or countries in which the Purchaser or any of
its Subsidiaries operates.
"Purchaser Materiality Exception" shall have the meaning ascribed to
such term in Section 9.4(f) hereof.
"Purchaser Sales Process Claim" means all claims (including any and all
claims, controversies, actions, causes of action, cross-claims, counter-claims,
demands, debts, compensatory damages, liquidated damages, punitive or exemplary
damages, other damages, claims for costs and attorneys' fees, or liabilities of
any nature whatsoever in law and in equity, whether related to, arising out of,
or due to occurrences or conditions prior to, on or after the Split-Off
Effective Time, and whether known or unknown, suspected, or claimed) related to,
arising out of or due to, directly or indirectly, the investigation,
consideration, pursuit or entering into (including the adequacy of disclosure by
and due diligence of the Purchaser and including any allegations of breach of
fiduciary duty by Persons associated with, including directors of, the Purchaser
with respect to the transactions contemplated by the Transaction Agreements) of
one or more strategic transactions involving the Purchaser or any Purchaser
Affiliate and one or more unaffiliated Persons.
"Purchaser Stock" shall have the meaning ascribed to such term in
Section 6.4(a) hereof.
"Qualified Subsidiary" means a Subsidiary in which (i) the Purchaser
owns 80% or more of the outstanding capital stock and (ii) the remainder of such
outstanding capital stock is either (x) widely held and publicly traded or (y)
owned by another Qualified Subsidiary of the Purchaser.
"Redactable Information" shall have the meaning ascribed to such term
in Section 9.7(a) hereof.
"Redemption Effective Time" shall have the meaning ascribed to such
term in the GM Charter Amendment.
"Registration Statements" shall have the meaning ascribed to such term
in Section 4.9 hereof.
"Release" has the meaning set forth in the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended, or similar
Environmental and Safety Requirements.
"Representatives" shall have the meaning ascribed to such term in
Section 9.6(a) hereof.
103
"Request" shall have the meaning ascribed to such term in Section 13.7
hereof.
"Requisite Stockholder Approval" shall have the meaning ascribed to
such term in Section 4.11(a) hereof.
"Requisite Vote Matters" shall have the meaning ascribed to such term
in Section 7.2(a)(i) hereof.
"Ruling" shall have the meaning ascribed to such term in Section
10.3(g) hereof.
"Ruling Request" shall have the meaning ascribed to such term in
Section 9.7(a) hereof.
"SEC" shall have the meaning ascribed to such term in Section 7.3(a)
hereof.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
"Separate Counsel" shall have the meaning ascribed to such term in
Section 13.6(b) hereof.
"Separation Agreement" shall have the meaning ascribed to such term in
the preamble hereof.
"Service Agent" shall have the meaning ascribed to such term in Section
14.16 hereof.
"Settlement" shall have the meaning ascribed to such term in Section
9.4(f) hereof.
"Shares" shall have the meaning ascribed to such term in the preamble
hereof.
"Significant Subsidiary" means a Subsidiary of a Person that would
constitute a "significant subsidiary" within the meaning of Rule 1-02 of
Regulation S-X of the Exchange Act, if such Rule were applicable to such Person.
"SPA Cash Payment Election Notice" shall have the meaning ascribed to
such term in Section 2.1.
"Special Dividend" shall have the meaning ascribed to such term in the
preamble hereof.
"Special Employee Items Agreement" means the Special Employee Items
Agreement, substantially in the form set forth as Exhibit C to the Separation
Agreement.
"Specified Foreign Governmental Authority" means any Governmental
Authority specified on Section 13.2(b)(i) of the Purchaser Disclosure Schedule.
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"Specified Foreign Persons" shall have the meaning ascribed to such
term in Section 6.3(e) hereof.
"Spin-Off Distribution" means a distribution (whether by dividend,
distribution, merger or otherwise) of capital stock of Xxxxxx to some or all of
the stockholders of GM, either alone or in connection with the sale of not more
than 5% of the outstanding capital stock of Xxxxxx to one or more Persons in
negotiated transactions; provided that the foregoing shall not occur in
connection with a combination of the Xxxxxx Business with the business of
another unaffiliated Person, unless such Person acquires beneficial ownership of
5% or less of the surviving or acquiring entity in such transaction.
"Split-Off" shall have the meaning ascribed to such term in the
preamble hereof.
"Split-Off Denominator" shall have the meaning ascribed to such term in
Section 7.4(b) hereof.
"Split-Off Effective Time" shall have the meaning ascribed to such term
in the Separation Agreement.
"Split-Off Fraction" shall have the meaning ascribed to such term in
Section 7.5(b)(iii) hereof.
"Split-Off Numerator" shall have the meaning ascribed to such term in
Section 7.4(b) hereof.
"Stock Fraction" shall have the meaning ascribed to such term in
Section 2.1 hereof.
"Stock Sale" shall have the meaning ascribed to such term in the
preamble hereof.
"Subsequent Ruling" shall have the meaning ascribed to such term in
Section 12.3(b)(i) hereof.
"Subsequent Tax Opinion" shall have the meaning ascribed to such term
in Section 12.3(b)(i) hereof.
"Subsidiary" with respect to a Person, means any corporation, limited
liability company, partnership, trust or unincorporated organization of which
such Person owns, directly or indirectly, 50% or more of the outstanding stock
or other equity interests, the holders of which are entitled to vote for the
election of the board of directors or others performing similar functions with
respect to such corporation, limited liability company, partnership, trust or
unincorporated organization.
"Superior Proposal" shall have the meaning ascribed to such term in
Section 9.6(b) hereof.
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"Surviving Corporation" shall have the meaning ascribed to such term in
the preamble hereof.
"Surviving Corporation Common Stock" shall have the meaning ascribed to
such term in the preamble hereof.
"Surviving Corporation Class B Common Stock" shall have the meaning
ascribed to such term in the Merger Agreement.
"Tax" means any (i) United States federal, state or local or non-United
States income, gross receipts, license, payroll, employment, excise, severance,
stamp, occupation, premium, windfall profits, environmental (including taxes
under Section 59A of the Code), customs duties, capital stock, franchise,
profits, withholding, social security (or similar), unemployment, disability,
real property, personal property, sales, use, transfer, registration, value
added, alternative or add-on minimum, estimated or other tax, assessment or
governmental charge of any kind whatever imposed by any Governmental Authority,
including any interest, penalty or addition thereto, whether disputed or not,
(ii) liability for the payment of any amount of the type described in clause (i)
above arising as a result of being (or having been) a member of any group or
being (or having been) included or required to be included in any Tax return
related thereto and (iii) liability for the payment of any amount of the type
described in clause (i) or clause (ii) above as a result of any express or
implied obligation to indemnify or otherwise assume or succeed to the liability
of any other Person.
"Tax Allocation Agreements" shall mean (i) the Agreement for the
Allocation of United States Federal Income Taxes, by and among GM, Xxxxxx,
Xxxxxx Electronics Corporation (formerly XX Xxxxxx Electronics Corporation), HE
Holdings, Inc. (formerly Xxxxxx Aircraft Company), and Delco Electronics
Corporation, effective as of December 29, 1985, as amended, (ii) the Tax Sharing
Agreement, by and among GM, Xxxxxx and HE Holdings, Inc. (subsequently renamed
Raytheon Corporation), dated as of December 17, 1997, as amended, (iii) the
Agreement between Xxxxxx and GM and Delco Electronics Corporation regarding
prior years' income Taxes and (iv) the Amended and Restated Agreement for the
Allocation of United States Income Taxes, by and between GM and Xxxxxx, dated as
of March 20, 2003.
"Tax Control", as to Xxxxxx, means GM's direct ownership of at least
eighty percent (80%) of both (i) Voting Stock and (ii) each class and series of
Xxxxxx Capital Stock other than Voting Stock and, as to any other corporation,
shall have a correlative meaning that takes into account the principles of
Section 368(c) of the Code.
"Tax Counsel" shall have the meaning ascribed to such term in Section
9.7(b) hereof.
"Tax-Free Status of the Split-Off" shall have the meaning ascribed to
such term in Section 12.2(a) hereof.
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"Tax Materials" shall have the meaning ascribed to such term in Section
12.1(a) hereof.
"Tax Opinions" shall have the meaning ascribed to such term in Section
9.7(b) hereof.
"Tax-Related Losses" shall have the meaning ascribed to such term in
Section 12.4(a) hereof.
"Tax-Related Party" shall have the meaning ascribed to such term in
Section 12.1(c) hereof.
"Tax Return" means all returns, declarations, reports, estimates,
information returns and statements required to be filed in respect of any Taxes.
"Third-Party Claim" means any claim, suit, arbitration, inquiry,
proceeding or investigation by or before any Governmental Authority or asserted
by a Person other than GM or any GM Affiliate, Xxxxxx or any Xxxxxx Affiliate or
the Purchaser or any Purchaser Affiliate.
"Top-Off Election Notice" shall have the meaning ascribed to such term
in the Merger Agreement.
"Transactions" shall have the meaning ascribed to such term in the
preamble hereof.
"Transaction Agreements" means the GM Transaction Agreements and the
Xxxxxx Transaction Agreements.
"U.S. Trust" shall have the meaning ascribed to such term in Section
4.5(b) hereof.
"Variable Price Shares" shall have the meaning ascribed to such term in
Section 2.1.
"VEBA" shall have the meaning ascribed to such term in Section 4.5(b)
hereof.
"Voting Stock" means the total combined voting power of all outstanding
shares of Xxxxxx Capital Stock entitled to vote generally in the election of
directors of Xxxxxx.
(b) References to a party's "Knowledge" or "to the Knowledge
of" a party and similar terms shall refer to the knowledge, after due inquiry,
of the senior officers of such party; provided that for purposes of this
definition only, "due inquiry" shall be deemed to have been exercised if such
persons make reasonable written inquiry of the appropriate persons at the
applicable entities and follow up such inquiry with such number of telephone
calls or further written inquiries, as the inquiring party, in its
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reasonable good faith judgment would deem appropriate if acting in its own
interest, and review any responses to such inquiries.
14.2 Further Assurances. From time to time, as and when requested by
any party hereto, the other party or parties hereto, as applicable, shall
execute and deliver, or cause to be executed and delivered, all such documents
and instruments and shall take, or cause to be taken, all such further or other
actions, as such other party may reasonably deem necessary or desirable to
consummate the transactions contemplated by this Agreement or any of the
agreements contemplated by this Agreement.
14.3 No Survival of Representations and Warranties. The parties
hereto hereby agree that the representations and warranties of GM, Xxxxxx and
the Purchaser contained in this Agreement, other than in Article XII and Section
4.6 hereof (other than the last sentence of Section 4.6 hereof), or in any
certificate, document or instrument delivered in connection herewith, other than
the Separation Agreement, shall not survive the Closing.
14.4 Notices. All notices shall be in writing and shall be deemed
given if delivered personally, telecopied (which is confirmed) or dispatched by
a nationally recognized overnight courier service to the parties at the
following addresses (or at such other address for a party as shall be specified
by like notice):
If to Xxxxxx, to:
000 Xxxxx Xxxxxxxxx Xxxxxxxxx
Xx Xxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxx
Telecopy No.: (000) 000-0000
With a copy to:
Weil, Gotshal & Xxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxxxx X. Xxxxx
Xxxxxxx X. Xxxxxxxx
Telecopy No.: (000) 000-0000
If to GM, to:
000 Xxxxxxxxxxx Xxxxxx
Xxxxxxx, XX 00000-0000
Attention: Xxxxxx X. Xxxxxxxx
Telecopy No.: (000) 000-0000
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With a copy to:
Jenner & Block, LLC
Xxx XXX Xxxxx
Xxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxxx
Telecopy No.: (000) 000-0000
if with regard to Article XII of this Agreement, also with a copy to:
Xxxxxxxx & Xxxxx
000 X. Xxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxxxx, P.C.
Telecopy No.: (000) 000-0000
If to the Purchaser, to:
c/o The News Corporation Limited
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxx
Telecopy No.: (000) 000-0000
With a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
Xxxx Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxx X. Xxxxx
Xxxxxx X. Xxxxx
Telecopy No.: (000) 000-0000
14.5 Interpretation; Absence of Presumption.
(a) 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
(including all of the Exhibits and Schedules hereto) and not to any particular
provision of this Agreement, and Article, Section, paragraph, Exhibit and
Schedule references are to the Articles, Sections, paragraphs, Exhibits and
Schedules to this Agreement unless otherwise specified, (iii) the word
"including" and words of similar import when used in this Agreement shall mean
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"including, without limitation," unless the context otherwise requires or unless
otherwise specified, (iv) the word "or" shall not be exclusive, (v) provisions
shall apply, when appropriate, to successive events and transactions, (vi)
unless otherwise specified, all references to any period of days shall be deemed
to be to the relevant number of calendar days, (vii) "dollars" or "$" means
United States dollars and (viii) "cash" means dollars in immediately available
funds.
(b) For the purposes of this Agreement, the obligation of
Xxxxxx to cause its Subsidiaries to take or not take any action with respect to
PanAmSat and HSSL and their Subsidiaries shall be deemed to be satisfied,
notwithstanding any standards to the contrary, if Xxxxxx uses its reasonable
best efforts to cause PanAmSat and HSSL and their Subsidiaries to take or not
take such action. For purposes of this Agreement, the obligation of Xxxxxx to
use reasonable best efforts to cause PanAmSat or HSSL to take or not take any
action shall require only that Xxxxxx (i) exercise all voting rights on any
matter submitted by PanAmSat and HSSL, as applicable, for approval of its
respective stockholders, (ii) exercise all rights under any contract or
agreement to which Xxxxxx is a party, (iii) cause its representatives acting as
officers or members of the board of directors of PanAmSat or HSSL, as
applicable, subject to their fiduciary duties to such entities and their
stockholders under Applicable Law, to exercise all rights as officers and
directors of PanAmSat and HSSL, as applicable, and (iv) otherwise use its
reasonable best efforts to cause PanAmSat and HSSL to take or not take such
specified actions if Xxxxxx had prior knowledge that PanAmSat or HSSL was
considering taking or not taking such specified actions. For purposes of this
Agreement, the obligation of Xxxxxx to cause DIRECTVLA to take or not take any
action shall be subject to any fiduciary duties of DIRECTVLA and the members of
its Executive Committee.
(c) The Article, Section and paragraph headings contained in
this Agreement are for reference purposes only and shall not affect in any way
the meaning or interpretation of this Agreement. (d) This Agreement shall be
construed without regard to any presumption or rule requiring construction or
interpretation against the party drafting or causing any instrument to be
drafted.
14.6 Counterparts. This Agreement may be executed in counterparts,
which together shall constitute one and the same Agreement. The parties may
execute more than one copy of the Agreement, each of which shall constitute an
original.
14.7 Entire Agreement; Severability.
(a) This Agreement (including the documents and the
instruments referred to herein), the Confidentiality Agreement and the other
Transaction Agreements contain the entire agreement between the parties with
respect to the subject matter hereof, supersede all previous agreements,
negotiations, discussions, writings, understandings, commitments and
conversations with respect to such subject matter and
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there are no agreements or understandings between the parties other than those
set forth or referred to herein or therein.
(b) 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 or in
jurisdictions 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, so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
adverse to any party. Upon such determination, the parties shall negotiate in
good faith in an effort to agree upon such a suitable and equitable provision to
effect the original intent of the parties.
14.8 Third Party Beneficiaries. The Xxxxxx Indemnified Parties and
their respective successors shall be third party beneficiaries of the
indemnification provisions of Section 9.12 hereof, as applicable, and shall be
entitled to enforce those provisions in each such case as fully and to the same
extent as if they were parties to this Agreement. Except as provided in the
previous sentence, (i) the provisions of this Agreement are solely for the
benefit of the parties and are not intended to confer upon any person except the
parties any rights or remedies hereunder and (ii) there are no third party
beneficiaries of this Agreement and this Agreement shall not provide any third
person with any remedy, claim, liability, reimbursement, claim of action or
other right in excess of those existing without reference to this Agreement.
14.9 Governing Law. This Agreement shall be governed and construed
in accordance with the laws of the State of Delaware (without regard to
principles of conflicts of laws).
14.10 Specific Performance. The parties agree that the remedies at
law for any breach or threatened breach, including monetary damages, are
inadequate compensation for any loss and that any defense in any action for
specific performance that a remedy at law would be adequate is waived.
Accordingly, in the event of any actual or threatened default in, or breach of,
any of the terms, conditions and provisions of this Agreement, the party or
parties who are or are to be thereby aggrieved shall have the right to specific
performance and injunctive or other equitable relief of its rights under this
Agreement, in addition to any and all other rights and remedies at law or in
equity, and all such rights and remedies shall be cumulative. Any requirements
for the securing or posting of any bond with such remedy are waived.
14.11 Assignment. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the parties
hereto (whether by operation of law or otherwise) without the prior written
consent of the other parties; provided, however, that notwithstanding the
foregoing or anything contained in any Transaction Agreement, (i) the Purchaser
and Xxxxxx shall be permitted to assign their rights under the Transaction
Agreements to one or more financing sources in order to
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secure such party's obligation thereto and (ii) the Purchaser may assign its
right to purchase the Shares hereunder to a Qualified Subsidiary of the
Purchaser, in which case the Purchaser (or, in the event the Purchaser
designates a Qualified Subsidiary as the purchaser of Shares, then the
Purchaser) shall provide representations and warranties with respect to such
Qualified Subsidiary covering the matters contained in Article VI hereof and
such Qualified Subsidiaries shall be bound by the covenants contained herein
that bind the Purchaser, to the extent applicable; provided, further, that no
such assignment shall relieve the assigning party from any obligations
hereunder. Subject to the preceding sentence, this Agreement shall be binding
upon, inure to the benefit of and be enforceable by the parties and their
respective successors and assigns. It is understood and agreed that the
Purchaser (or a Qualified Subsidiary of the Purchaser) currently expects to, and
nothing in the Transaction Agreements shall restrict the Purchaser (or its
Qualified Subsidiary) from, transferring any shares of Surviving Corporation
Common Stock, or assigning any rights under the Transaction Agreements, to one
or more Qualified Subsidiaries of the Purchaser.
14.12 Amendment. This Agreement may be amended by the parties hereto,
by action taken or authorized by their respective Boards of Directors; provided,
however, that, except as may be permitted by Applicable Law, no amendment shall
be made following the receipt of the Requisite Stockholder Approval that alters
or changes (i) the amount or type of consideration to be received by GM or (ii)
any of the terms and conditions of this Agreement if such alteration or change
would adversely affect the holders of the GM Class H Common Stock or the holders
of the GM $1-2/3 Common Stock, in each case without the approval, if required,
of the holders of GM Class H Common Stock or GM $1-2/3 Common Stock.
Notwithstanding the foregoing, this Agreement may not be amended except by an
instrument in writing signed on behalf of each of the parties hereto.
14.13 Extension; Waiver. Except as otherwise provided in this
Agreement, at any time prior to the Merger Effective Time, GM and Xxxxxx (with
respect to the Purchaser) and the Purchaser (with respect to GM and Xxxxxx), by
action taken or authorized by their respective Boards of Directors, may, to the
extent legally allowed, (a) extend the time for the performance of any of the
obligations or other acts of such other party, (b) waive any inaccuracies in the
representations and warranties of the other party contained herein or in any
document delivered pursuant hereto and (c) waive or extend the time for
compliance by such other party with any of the agreements or conditions
contained herein. Any agreement on the part of a party hereto to any such
extension or waiver shall be valid only if set forth in a written instrument
signed on behalf of such party.
14.14 Dispute Resolution. GM, Xxxxxx and the Purchaser shall attempt
in good faith to resolve any dispute among the parties arising out of or
relating to this Agreement promptly through negotiations of the parties prior to
seeking any other legal or equitable remedy.
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14.15 Arbitration. Any dispute between the parties hereto arising out
of or relating to Article XII or Article XIII hereof, including the
interpretation of Article XII or Article XIII (in each case, a "Dispute"), shall
be resolved only in accordance with the following provisions:
(a) Negotiation. GM, Xxxxxx and/or the Purchaser (as
applicable) shall attempt in good faith to resolve any Dispute promptly through
negotiations of the parties. Any party may deliver to another a written notice
of a Dispute, which shall set forth, in reasonable detail, the nature of the
Dispute (a "Dispute Notice"). Within twenty (20) Business Days after the receipt
of such Dispute Notice, the appropriate representatives of the relevant parties
shall meet to attempt to resolve such Dispute. If such Dispute has not been
resolved within the period of twenty (20) Business Days following the initial
meeting of the representatives following the receipt of a Dispute Notice (the
"Negotiation Period"), or if one of the parties fails or refuses to negotiate
such Dispute, then the issue shall be settled by arbitration pursuant to Section
14.15(b) hereof. The results of such arbitration shall be final and binding on
the parties.
(b) Arbitration Procedure. Any party to a Dispute may initiate
arbitration with regard to such Dispute by giving the other party written notice
either (i) at any time following the end of the Negotiation Period or (ii) if
the parties do not meet within twenty (20) Business Days of the receipt of the
Dispute Notice, at any time thereafter. The arbitration shall be conducted by
three arbitrators in accordance with the Rules for Non-Administered Arbitration
of Business Disputes promulgated by the Center for Public Resources, as in
effect on the date hereof, except as otherwise provided in this Section 14.15.
Within twenty (20) days following receipt of the written notice of arbitration,
the disputing parties shall each appoint one arbitrator. The two arbitrators so
appointed shall appoint the third arbitrator. If either of the disputing parties
shall fail to appoint an arbitrator within such twenty (20) day period, the
arbitration shall be by the sole arbitrator appointed by the other party.
Regardless of who selects the arbitrator, each arbitrator selected to resolve a
Dispute under Article XII shall be an attorney or accountant who is generally
recognized in the relevant community as a qualified and competent practitioner
with experience in the subject matter area involved in the issue or issues to be
resolved. Such arbitrators shall be empowered to determine whether the disputing
party is required to indemnify any indemnifiable party pursuant to Section 12.4
or Sections 13.1 and 13.2 (as applicable) and to determine the amount of the
related indemnification payment. Each of the disputing parties shall bear fifty
percent (50%) of the aggregate expenses of the arbitrators. The arbitration
shall be governed by the United States Arbitration Act, 9 U.S.C. ss.ss.1-14. The
place of arbitration shall be New York, New York. The final decision of the
arbitrators shall be rendered no later than one (1) year from the date of the
written notice of arbitration.
14.16 Consent to Jurisdiction. Except with respect to Article XII and
XIII hereof, any action, suit or proceeding arising out of any claim that the
parties cannot settle through good faith negotiations shall be litigated
exclusively in the state courts of Delaware. Each of the parties hereto hereby
irrevocably and unconditionally (i) submits
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to the jurisdiction of the state courts of Delaware for any such action, suit or
proceeding, (ii) agrees not to commence any such action, suit or proceeding
except in the state courts of Delaware, (iii) waives, and agrees not to plead or
to make, any objection to the venue of any such action, suit or proceeding in
the state courts of Delaware, (iv) waives, and agrees not to plead or to make,
any claim that any such action, suit or proceeding brought in the state courts
of Delaware has been brought in an improper or otherwise inconvenient forum, (v)
waives, and agrees not to plead or to make, any claim that the state courts of
Delaware lack personal jurisdiction over it and (vi) waives its right to remove
any such action, suit or proceeding to the federal courts except when such
courts are vested with sole and exclusive jurisdiction by statute. GM, Xxxxxx
and the Purchaser shall cooperate with each other in connection with any such
action, suit or proceeding to obtain reliable assurances that confidential
treatment will be accorded any information that any party shall reasonably deem
to be confidential or proprietary. Each of the parties hereto irrevocably
designates and appoints its respective Service Agent as its agent to receive
service of process in any such action, suit or proceeding. Each of the parties
hereto further covenants and agrees that, until the expiration of all applicable
statutes of limitations relating to potential claims under this Agreement, each
such party shall maintain a duly appointed agent for the service of summonses
and other legal process in the State of Delaware, and shall promptly notify the
other party hereto of any change in the name or address of its Service Agent and
the name and address of any replacement for its Service Agent, if such agent is
no longer the Service Agent named herein. This Section 14.16 is meant to comply
with 6 Del. C. Section 2708. For the purposes of this Agreement "Service Agent"
means, for GM and for Xxxxxx, The Corporation Trust Company, with offices on the
date hereof at 0000 Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxx of Xxx Xxxxxx, Xxxxxxxx
00000, or, for either party, such other Person at such other address as such
party may specify in a notice provided to the Purchaser after the date of this
Agreement in accordance with Section 14.4 of this Agreement. For the purposes of
this Agreement, "Service Agent" means, for the Purchaser and for Merger Sub,
Corporation Service Company, with offices on the date hereof at 0000 Xxxxxxxxxxx
Xxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxxxxx 00000, or such other Person at such other
address as the Purchaser may specify in a notice provided to the other parties
after the date of this Agreement in accordance with Section 14.4 of this
Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto duly authorized,
as of the date first written above.
XXXXXX ELECTRONICS CORPORATION
By: /s/ Xxxxx X. Xxxxxx
-------------------------------
Name: Xxxxx X. Xxxxxx
Title: Senior Vice President
and General Counsel
THE NEWS CORPORATION LIMITED
By: /s/ Xxxxxx X. Xxxxxxx
-------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Director
GENERAL MOTORS CORPORATION
By: /s/ Xxxxxx X. Xxxxxxxx
-------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Assistant General
Counsel
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