Exhibit 99.3
EXECUTION COPY
IMPLEMENTATION AGREEMENT
by and among
GENERAL MOTORS CORPORATION,
XXXXXX ELECTRONICS CORPORATION
and
ECHOSTAR COMMUNICATIONS CORPORATION
Dated as of October 28, 2001
TABLE OF CONTENTS
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ARTICLE 1..................................................................................... 5
THE GM TRANSACTIONS........................................................................... 5
Section 1.1. GM Board Approval of the GM Transactions............................ 5
Section 1.2. GM Stockholder Approval of the GM Transactions...................... 6
Section 1.3. Conditions to GM's Obligations Relating to the
Stockholder Approval Process........................................ 9
Section 1.4. Spin-Off of Xxxxxx from GM.......................................... 9
Section 1.5. Effects of the Spin-Off.............................................11
Section 1.6. Cooperation of Transfer Agents; Stockholder Records;
GM Class H Common Stock Certificates................................12
Section 1.7. Closing of Transfer Records.........................................13
Section 1.8. Cancellation........................................................13
Section 1.9. Treatment of Stock Options, LTAP Awards and
Restricted Stock Units..............................................13
Section 1.10. GM Charter Amendment................................................16
Section 1.11. Cooperation; Redemption of Xxxxxx Preferred Stock;
Xxxxxx Charter Amendments...........................................16
Section 1.12. Further Assurances Regarding the GM Transactions....................17
Section 1.13. Elimination of GM Class H Common Stock from GM
Certificate of Incorporation........................................18
ARTICLE 2.....................................................................................18
REPRESENTATIONS AND WARRANTIES OF GM..........................................................18
Section 2.1. Organization and Standing...........................................18
Section 2.2. Corporate Power and Authority.......................................19
Section 2.3. Conflicts, Consents and Approvals...................................19
Section 2.4. Ownership of Xxxxxx Capital Stock...................................21
Section 2.5. Capitalization; Class H Fraction....................................22
Section 2.6. Litigation..........................................................24
Section 2.7. Brokerage and Finder's Fees; Opinions of Financial Advisors.........24
Section 2.8. Spin-Off/Merger Registration Statement, GM Proxy/Consent
Solicitation Statement, EchoStar Information Statement and
GM Debt/Equity Exchange Registration Statement......................24
Section 2.9. Tax Representations.................................................25
Section 2.10. Requisite Approvals.................................................25
Section 2.11. Agreement with GM Pension Plans.....................................26
ARTICLE 3.....................................................................................27
REPRESENTATIONS AND WARRANTIES OF XXXXXX......................................................27
Section 3.1. Organization and Standing.............................................27
Section 3.2. Corporate Power and Authority.........................................27
Section 3.3. Spin-Off/Merger Registration Statement, GM Proxy/Consent
Solicitation Statement, EchoStar Information
Statement and GM Debt/Equity Exchange Registration Statement..........28
Section 3.4. Tax Representations...................................................28
ARTICLE 4.....................................................................................28
REPRESENTATIONS AND WARRANTIES OF ECHOSTAR....................................................29
Section 4.1. Organization and Standing.............................................29
Section 4.2. Corporate Power and Authority.........................................29
Section 4.3. Spin-Off/Merger Registration Statement, GM Proxy/Consent
Solicitation Statement, EchoStar Information
Statement and GM Debt/Equity Exchange Registration Statement..........30
Section 4.4. Tax Representations...................................................30
Section 4.5. Merger Agreement Representations and Warranties.......................30
ARTICLE 5.....................................................................................30
COVENANTS AND AGREEMENTS OF THE PARTIES......................................................30
Section 5.1. Mutual Covenants......................................................30
Section 5.2. Covenants of GM and Xxxxxx............................................45
Section 5.3. Covenants and Agreements of EchoStar..................................55
ARTICLE 6.....................................................................................59
TAX-FREE STATUS OF THE SPIN-OFF...............................................................59
Section 6.1. Representations and Warranties........................................59
Section 6.2. Restrictions Relating to the Spin-Off.................................59
Section 6.3. Cooperation and Other Covenants.......................................64
Section 6.4. Indemnification for Tax Liabilities...................................66
Section 6.5. Procedure for Indemnification for Tax Liabilities.....................69
Section 6.6. Arbitration...........................................................70
Section 6.7. Certain Stock Acquisitions............................................71
ARTICLE 7.....................................................................................72
INDEMNIFICATION...............................................................................72
Section 7.1. Indemnification by Xxxxxx.............................................72
Section 7.2. Indemnification by GM.................................................74
Section 7.3. Indemnification by EchoStar...........................................77
Section 7.4. Certain Definitions...................................................78
Section 7.5. Other Liabilities.....................................................79
Section 7.6. Tax Effects of Indemnification........................................79
Section 7.7. Effect of Insurance Upon Indemnification..............................80
Section 7.8. Procedure for Indemnification Involving Third-Party Claims............80
Section 7.9. Procedure for Indemnification Not Involving Third-Party Claims.......82
Section 7.10. Exclusive Remedies...................................................82
ARTICLE 8.....................................................................................82
TERMINATION AND AMENDMENT.....................................................................82
Section 8.1. Termination..........................................................82
Section 8.2. Effect of Termination................................................82
Section 8.3. Amendment............................................................82
Section 8.4. Extension; Waiver....................................................83
ARTICLE 9.....................................................................................83
MISCELLANEOUS.................................................................................83
Section 9.1. Survival.............................................................83
Section 9.2. Notices..............................................................83
Section 9.3. Interpretation; Absence of Presumption...............................85
Section 9.4. Counterparts.........................................................86
Section 9.5. Entire Agreement; Severability.......................................86
Section 9.6. Third Party Beneficiaries............................................87
Section 9.7. Governing Law........................................................87
Section 9.8. Specific Performance.................................................87
Section 9.9. Assignment...........................................................87
EXHIBITS
Exhibit A - Form of PanAmSat Stock Purchase Agreement
Exhibit B - Form of Merger Commitment Letter
Exhibit C - Supplemental Agreement
Exhibit D - Pledge Agreement
Exhibit E - Form of EchoStar Stockholder Consent
Exhibit F - Form of GM/Xxxxxx Separation Agreement
Exhibit G - Form of Merger Agreement
Exhibit H - Form of GM Charter Amendment
Exhibit I - Form of Certificate of Designations Relating to Xxxxxx Preference Stock
Exhibit J - Form of Stockholders Agreement
Exhibit K - Form of New Registration Rights Agreements Term Sheets
Exhibit L - Matters Pertaining to the GM Debt/Equity Exchange
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SCHEDULES
GM Disclosure Schedule
----------------------
Section 2.5(b) Capitalization; Class H Fraction
Section 2.6 Litigation
Section 6.2(f) Intercompany Indebtedness
Xxxxxx Disclosure Schedule
--------------------------
Section 6.2(f) Intercompany Indebtedness
Other Schedules
---------------
Schedule 7.2 Certain Claims
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INDEX OF DEFINED TERMS
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Adverse Notification.......................................................... 9
Affiliate.....................................................................78
Agreement..................................................................... 1
Ancillary Tax Opinions........................................................57
AOL...........................................................................23
AOL Registration Rights Agreement.............................................23
AOL Section 355(e) Ruling.....................................................63
Applicable Law................................................................42
Article 6 Dispute Party.......................................................70
Article 6 Indemnifying Party..................................................69
Assumed AOL Sale..............................................................63
Bankers.......................................................................64
Business Day..................................................................66
Certificates..................................................................12
Change in Tax Law.............................................................62
Claim.........................................................................33
Class H Fraction..............................................................37
Code.......................................................................... 4
Competing Transaction.........................................................40
Confidentiality Agreement.....................................................79
Confirmation.................................................................. 8
Confirmation Period........................................................... 8
Confirmation Request.......................................................... 8
Control.......................................................................68
Conversion Issuances..........................................................63
Current GM Pension Plans Registration Rights Agreement........................22
D&O Insurance.................................................................46
Debt/Equity Issuances.........................................................63
Denominator................................................................... 1
DGCL.......................................................................... 6
Dispute.......................................................................70
Dispute Notice................................................................70
Disqualifying Action..........................................................60
DTV Business..................................................................61
EchoStar...................................................................... 1
EchoStar 10-K.................................................................27
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EchoStar 10-Q.................................................................29
EchoStar Affiliate............................................................78
EchoStar Controlling Stockholder.............................................. 3
EchoStar Controlling Stockholder Registration Rights Agreement................28
EchoStar Indemnitees..........................................................78
EchoStar Information Statement................................................23
EchoStar Material Adverse Effect..............................................28
EchoStar Sale Process Claim...................................................58
EchoStar Section 368 Opinion..................................................48
EchoStar Securities Disclosure Document.......................................44
EchoStar Securities Issuance..................................................42
EchoStar Securities Issuances.................................................43
EchoStar Stockholder Consent.................................................. 4
EchoStar Transaction Agreements...............................................29
EchoStar/Xxxxxx Employee Matters Agreement....................................27
Encumbrances..................................................................20
Exchange Act..................................................................15
Exchange Debt................................................................. 2
Exchange Option...............................................................14
Exchange Shares............................................................... 2
Final Determination...........................................................67
GM............................................................................ 1
GM $1-2/3 Common Stock........................................................ 2
GM Affiliate..................................................................78
GM Board Policy Statement..................................................... 6
GM Business...................................................................75
GM Certificate of Incorporation............................................... 1
GM Charter Amendment..........................................................16
GM Class H Common Stock....................................................... 2
GM Debt/Equity Exchange....................................................... 2
GM Debt/Equity Exchange Registration Statement................................25
GM Disclosure Schedule........................................................21
GM Financial Advisor Fairness Opinions........................................ 6
GM Financial Advisors......................................................... 6
GM Indemnitees................................................................78
GM Insurance Policy...........................................................46
GM Notional Shares............................................................10
GM Pension Plans..............................................................26
GM Pension Plans Contribution and Transfer Agreement..........................26
GM Preference Stock...........................................................22
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GM Preferred Stock............................................................22
GM Proxy/Consent Solicitation Statement....................................... 7
GM Sale Process Claim.........................................................47
GM Series H Preference Stock.................................................. 2
GM Transaction Agreements.....................................................19
GM Transactions............................................................... 2
GM Transfer Agent.............................................................12
GM-Xxxxxx Sale Process Claim..................................................50
GM/Xxxxxx Intellectual Property Agreement..................................... 4
GM/Xxxxxx Separation Agreement................................................ 4
GM/Xxxxxx Tax Agreements...................................................... 4
Governmental Authority........................................................18
Greater Spinco Preference Share Exchange......................................10
Greater Spinco Preference Shares..............................................10
HCG........................................................................... 1
HCI........................................................................... 1
HCSS.......................................................................... 1
HSR Act.......................................................................20
HSSL..........................................................................35
Xxxxxx........................................................................ 1
Xxxxxx 10-K...................................................................27
Xxxxxx 10-Q...................................................................27
Xxxxxx Affiliate..............................................................78
Xxxxxx Amended and Restated By-laws...........................................17
Xxxxxx Business...............................................................72
Xxxxxx Capital Stock..........................................................68
Xxxxxx Certificate of Incorporation...........................................17
Xxxxxx Charter Amendments.....................................................17
Xxxxxx Class C Common Stock................................................... 2
Xxxxxx Class C Common Stock Exchange..........................................10
Xxxxxx Covered Person.........................................................46
Xxxxxx Disclosure Schedule....................................................62
Xxxxxx Financial Advisors..................................................... 6
Xxxxxx Holdings...............................................................43
Xxxxxx Incentive Plan.........................................................16
Xxxxxx Indemnitees............................................................78
Xxxxxx Material Adverse Effect................................................26
Xxxxxx Preference Stock....................................................... 2
Xxxxxx Recapitalization....................................................... 1
Xxxxxx Reorganization.........................................................43
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Xxxxxx Sale Process Claim.....................................................51
Xxxxxx Series A Preferred Stock...............................................17
Xxxxxx Transaction Agreements.................................................27
Xxxxxx Transfer Agent.........................................................12
Indemnified Party.............................................................33
Indemnifying Party............................................................79
Indemnitee....................................................................79
Indemnity Payment.............................................................79
Insurance Proceeds............................................................80
IRS...........................................................................30
IRS Submission................................................................31
Losses........................................................................49
LTAP..........................................................................14
Mailing Date.................................................................. 6
Merger........................................................................ 1
Merger Agreement.............................................................. 4
Merger Commitment Letter...................................................... 3
Merger Financing.............................................................. 3
Merger Financing Agreement.................................................... 3
Nasdaq........................................................................20
Negotiation Period............................................................70
Non-Recommendation Determination.............................................. 7
Notice of Non-Recommendation.................................................. 7
Notice of Proposed Mailing.................................................... 7
Numerator.....................................................................24
NYSE..........................................................................14
Option........................................................................13
PanAmSat...................................................................... 1
PanAmSat Financing Agreement.................................................. 3
PanAmSat Purchase Financing................................................... 3
PanAmSat Stock Purchase Agreement............................................. 1
PanAmSat Stock Sale........................................................... 1
Person........................................................................68
Pledge Agreement.............................................................. 3
Potential Disqualifying Action................................................60
PRIMESTAR Registration Rights Agreement.......................................23
Proposed Acquisition Transaction..............................................60
Recapitalization Amount....................................................... 2
Recapitalization Debt.........................................................44
Redactable Information........................................................31
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Refinancing Debt..............................................................44
Registration Rights Letter Agreement..........................................19
Remaining Shares..............................................................50
Remaining Shares Distribution.................................................52
Remaining Shares Section 355(e) Ruling........................................52
Representatives...............................................................40
Request.......................................................................82
Requisite Stockholder Approval................................................26
Ruling........................................................................ 9
Ruling Request................................................................31
Sale Process Loss.............................................................77
SEC........................................................................... 9
Section 355(e) Plan...........................................................58
Section 368 Opinion...........................................................57
Securities Act................................................................22
Separate Counsel..............................................................81
Settlement....................................................................55
Significant Subsidiary........................................................21
Solvency Opinion..............................................................50
Spin-Off...................................................................... 2
Spin-Off Effective Time.......................................................11
Spin-Off/Merger Registration Statement........................................24
Stockholders Agreement........................................................19
Subsequent Ruling.............................................................64
Subsequent Tax Opinion........................................................64
Subsidiary....................................................................21
Substantially All of the DTV Business.........................................62
Superior Proposal.............................................................41
Supplemental Agreement........................................................ 3
Tax...........................................................................68
Tax Control...................................................................68
Tax Counsel...................................................................57
Tax Materials.................................................................59
Tax Opinions..................................................................57
Tax-Free Status of the Spin-Off...............................................60
Tax-Related Losses............................................................67
Third-Party Claim.............................................................69
Transaction Agreements........................................................30
Transactions.................................................................. 6
U.S. Trust....................................................................23
Voting Stock..................................................................68
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Withdrawal Notice............................................................. 8
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IMPLEMENTATION AGREEMENT
This Implementation Agreement (this "Agreement") is made and entered
into as of October 28, 2001, by and among Xxxxxx Electronics Corporation, a
Delaware corporation ("Xxxxxx"), General Motors Corporation, a Delaware
corporation that owns directly all of the issued and outstanding capital stock
of Xxxxxx ("GM"), and EchoStar Communications Corporation, a Nevada corporation
("EchoStar").
WHEREAS, Xxxxxx and EchoStar desire to combine the business of
EchoStar with the Xxxxxx Business (as defined below), following the separation
of Xxxxxx from GM, pursuant to a merger of EchoStar with and into Xxxxxx, with
Xxxxxx as the surviving corporation (the "Merger"), as contemplated by the
Merger Agreement (as defined below); and
WHEREAS, it is a condition to the Merger that, at the time of the
consummation of the Merger, the Xxxxxx Recapitalization (as defined below) and
the Spin-Off (as defined below) be completed and that Xxxxxx be an independent,
publicly owned company comprising the Xxxxxx Business, separate from and no
longer wholly owned by GM; and
WHEREAS, subject to the terms and conditions set forth in the PanAmSat
Stock Purchase Agreement (the "PanAmSat Stock Purchase Agreement"), entered into
by and among Xxxxxx, Xxxxxx Communications, Inc., a California corporation and
an indirect wholly owned subsidiary of Xxxxxx ("HCI"), Xxxxxx Communications
Galaxy, Inc., a California corporation and an indirect wholly owned subsidiary
of Xxxxxx ("HCG"), and Xxxxxx Communications Satellite Services, Inc.,
California corporation and an indirect wholly owned subsidiary of Xxxxxx
("HCSS"), concurrently with the execution and delivery of this Agreement, in the
form attached hereto as Exhibit A, HCI, HCG and HCSS have agreed to sell to
EchoStar, and EchoStar has agreed to purchase from HCI, HCG and HTSC (such
transaction, the "PanAmSat Stock Sale"), all of the shares of capital stock of
PanAmSat Corporation, a Delaware corporation ("PanAmSat"), owned by HCI, HCG and
HCSS, in accordance with the terms and conditions set forth in the PanAmSat
Stock Purchase Agreement; and
WHEREAS, immediately prior to the Spin-Off, Xxxxxx shall distribute to
GM, in respect of GM's ownership interest in Xxxxxx, the Cash Dividend (as
defined in the GM/Xxxxxx Separation Agreement (as defined below)), and, if and
to the extent of any shortfall in funds available to Xxxxxx to pay in full the
Cash Dividend, the Demand Note (as defined in the GM/Xxxxxx Separation
Agreement), and in connection with such dividend the denominator (the
"Denominator") of the fraction described in Article Fourth, Division I, Section
(a)(4) of the Restated Certificate of Incorporation of GM, as amended (the "GM
Certificate of Incorporation"), will be reduced as contemplated by the GM/Xxxxxx
Separation Agreement (the "Xxxxxx Recapitalization"); and
WHEREAS, at any time after the date of this Agreement and prior to the
date that is six (6) months after the Spin-Off Effective Time (as defined in the
Merger Agreement), GM may,
pursuant to one or more transactions, issue shares of GM's Class H Common Stock,
par value $0.01 per share (the "GM Class H Common Stock"), or distribute shares
of Class C Common Stock of Xxxxxx, par value $0.01 per share (the "Xxxxxx Class
C Common Stock") (any such shares of GM Class H Common Stock or Xxxxxx Class C
Common Stock distributed by GM, the "Exchange Shares"), up to an aggregate of
one hundred million (100,000,000) Exchange Shares (subject to reduction pursuant
to the GM/Xxxxxx Separation Agreement and subject to increase by up to an
additional fifty million (50,000,000) Exchange Shares (but in no event shall
such increase exceed One Billion Dollars ($1,000,000,000.00)) in accordance with
Section 5.1(h) hereof, to holders of certain outstanding debt obligations of GM
("Exchange Debt") in exchange for such Exchange Debt (any such exchange, a "GM
Debt/Equity Exchange"); and
WHEREAS, immediately following the Xxxxxx Recapitalization, (i) GM,
pursuant to provisions to be implemented by means of an amendment of the GM
Certificate of Incorporation, shall distribute to the holders of record of GM
Class H Common Stock shares of Xxxxxx Class C 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 in connection with the Xxxxxx
Recapitalization, and the GM Class H Common Stock will be redeemed and canceled,
(ii) in connection therewith, GM shall distribute to holders of record of GM's
Series H 6.25% Automatically Convertible Preference Stock, par value $0.10 per
share (the "GM Series H Preference Stock"), shares of Preference Stock, par
value $0.10 per share, of Xxxxxx (the "Xxxxxx Preference Stock"), in exchange
for all of the outstanding shares of GM Series H Preference Stock in accordance
with the Certificate of Designations relating to the GM Series H Preference
Stock and the GM Series H Preference Stock will be canceled, and (iii) GM shall,
subject to Section 5.2(h) of this Agreement, either retain, or, immediately
following the redemption of shares of GM Class H Common Stock in exchange for
shares of Xxxxxx Class C Common Stock as described in clause (i) above,
distribute by means of a dividend to the holders of record of GM's Common Stock,
par value $1-2/3 per share (the "GM $1-2/3 Common Stock"), in respect of all
outstanding shares of GM $1-2/3 Common Stock, the remaining shares of Xxxxxx
Class C Common Stock held by GM and not previously distributed to the holders of
record of GM Class H Common Stock, in each case as provided in this Agreement
(the transactions described in clauses (i) through (iii) above being referred to
herein collectively as the "Spin-Off"); and
WHEREAS, consummation of the Xxxxxx Recapitalization and the Spin-Off
is conditioned on, among other things, the approval by the holders of a majority
of the outstanding shares of GM $1-2/3 Common Stock and 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 this Agreement, the GM/Xxxxxx
Separation Agreement and the transactions contemplated hereby and thereby,
including the GM Charter Amendment (as defined below), the Xxxxxx
Recapitalization and the Spin-Off (collectively, the "GM Transactions"); and
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WHEREAS, a certain lender has delivered a commitment letter to Xxxxxx
and EchoStar pursuant to which it has committed to lend to Xxxxxx or the
Surviving Corporation (as defined in the Merger Agreement) up to Five Billion
Five Hundred Twenty Five Million Dollars ($5,525,000,000.00) for the purpose of
financing the Recapitalization Amount (as defined in the GM/Xxxxxx Separation
Agreement), refinancing certain outstanding indebtedness in connection with the
consummation of the Merger and financing the combined business of Xxxxxx and
EchoStar following the Merger (the "Merger Financing") on the terms set forth in
the commitment letter attached hereto as Exhibit B or in any similar commitment
or financing letter or other agreement replacing, and having substantially the
same effect as, such commitment letter and reasonably acceptable to Xxxxxx (in
either case, the "Merger Commitment Letter"); and
WHEREAS, GM, Xxxxxx, EchoStar and The Samburu Warrior Revocable Trust,
a trust as to which Xxxxxxx X. Xxxxx is the sole trustee (the "EchoStar
Controlling Stockholder"), are concurrently entering into that certain
Supplemental Agreement & Guaranty (the "Supplemental Agreement"), in the form
attached hereto as Exhibit C, relating to the commitment of EchoStar to use its
best efforts to assist Deutsche Bank, A.G., New York, in obtaining commitments
from nationally recognized banking institutions to provide for an additional
amount of financing such that the aggregate amount of financing to be obtained
pursuant to the Merger Financing (including financing arranged pursuant to any
co-arrangements with co-arrangers as contemplated by the provisions of the
Merger Commitment Letter) shall be in the amount of at least Five Billion Five
Hundred Twenty Five Million Dollars ($5,525,000,000.00), and, in connection
therewith, the EchoStar Controlling Stockholder has pledged certain shares of
EchoStar stock to GM pursuant to that certain Pledge Agreement (the "Pledge
Agreement"), executed by the EchoStar Controlling Stockholder and GM
concurrently with the Supplemental Agreement, in the form attached hereto as
Exhibit D; and
WHEREAS, the Merger Financing will be consummated (i) in accordance
with one or more credit agreements (collectively, the "Merger Financing
Agreement") to be entered into by and among Xxxxxx, EchoStar and the lenders
parties thereto as soon as reasonably practicable following the date hereof
based on the terms set forth in the Merger Commitment Letter and/or (ii) with
the proceeds from one or more private placements or public offerings of debt or
equity securities of EchoStar as contemplated herein; and
WHEREAS, pursuant to the Merger Commitment Letter, a certain lender
has committed to lend to EchoStar up to One Billion Nine Hundred Million Dollars
($1,900,000,000.00) for the purpose of consummating the PanAmSat Stock Sale (the
"PanAmSat Purchase Financing"); and
WHEREAS, the PanAmSat Purchase Financing will be consummated (i) in
accordance with a credit agreement (the "PanAmSat Financing Agreement") to be
entered into by and among EchoStar and the lenders parties thereto as soon as
reasonably practicable following the
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date hereof based on the terms set forth in the Merger Commitment Letter and/or
(ii) with proceeds from one or more private placements or public offerings of
debt or equity securities of EchoStar as contemplated herein; and
WHEREAS, the EchoStar Controlling Stockholder, acting by written
consent immediately after the execution of the Merger Agreement, shall have
executed and delivered to EchoStar a written consent as the controlling
stockholder of EchoStar (the "EchoStar Stockholder Consent"), in the form
attached hereto as Exhibit E, adopting and approving the Merger Agreement, and,
as a result of the EchoStar Stockholder Consent, no further approval of the
Merger Agreement by the EchoStar Board of Directors or the EchoStar stockholders
will be required in order to consummate the Merger; and
WHEREAS, the Xxxxxx Recapitalization will occur pursuant to the
Separation Agreement (the "GM/Xxxxxx Separation Agreement") entered into by and
between GM and Xxxxxx concurrently with the execution and delivery of this
Agreement, in the form attached hereto as Exhibit F, and certain other matters
relating to the separation of Xxxxxx from GM will be implemented pursuant to
certain other agreements contemplated therein, including (i) the GM/Xxxxxx Tax
Agreements (as defined in the GM/Xxxxxx Separation Agreement) previously entered
into by and among GM, Xxxxxx and certain other parties thereto or entered into
by and between GM and Xxxxxx concurrently with the execution and delivery of
this Agreement, as applicable, and (ii) the Intellectual Property Agreement (the
"GM/Xxxxxx Intellectual Property Agreement") entered into by and between GM and
Xxxxxx concurrently with the execution and delivery of this Agreement, in the
form attached as Exhibit A to the GM/Xxxxxx Separation Agreement; and
WHEREAS, the Spin-Off will occur as contemplated by this Agreement;
and
WHEREAS, immediately after the Spin-Off and subject to satisfaction of
the conditions precedent thereto, the Merger will occur pursuant to an Agreement
and Plan of Merger (the "Merger Agreement") entered into by and among EchoStar
and Xxxxxx concurrently with the execution and delivery of this Agreement, in
the form attached hereto as Exhibit G; and
WHEREAS, the parties intend the Spin-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; and
WHEREAS, the parties intend the Merger to qualify as a reorganization
described in Section 368(a) of the Code; and
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WHEREAS, (i) the respective Boards of Directors of GM, Xxxxxx, and
EchoStar have determined that the Merger is advisable, desirable and in the best
interests of their respective stockholders, (ii) the respective Boards of
Directors of Xxxxxx and EchoStar have approved the Merger Agreement and the
other agreements referred to therein to which each is a party, as applicable,
(iii) the respective Boards of Directors of GM, Xxxxxx and EchoStar have
approved this Agreement and the other agreements referred to herein to which
each is a party, as applicable, (iv) the respective Boards of Directors of GM
and Xxxxxx have approved the Implementation Agreement and the GM/Xxxxxx
Separation Agreement and the other agreements referred to therein to which each
is a party, (v) the Board of Directors of GM has approved the GM Transactions,
including the GM Charter Amendment, and has determined, subject to its fiduciary
duties under Applicable Law (as defined below), to recommend that its
stockholders approve and adopt the GM Transactions as contemplated herein, (vi)
the Board of Directors of Xxxxxx has recommended that its stockholders approve
and adopt the Merger Agreement and GM shall have, in its capacity as the sole
stockholder of Xxxxxx, at a meeting to be held after the execution of the Merger
Agreement, adopted and approved the Merger Agreement, (vii) the Board of
Directors of EchoStar has recommended that its stockholders approve and adopt
the Merger Agreement and the EchoStar Controlling Stockholder shall have, in his
capacity as controlling stockholder of EchoStar, acting by written consent
immediately after the execution of the Merger Agreement, adopted and approved
the Merger Agreement such that the EchoStar Stockholder Approval (as defined in
the Merger Agreement) shall have been obtained, and (viii) the Board of
Directors of Xxxxxx has approved the Xxxxxx Charter Amendments (as defined
below) and GM shall have, in its capacity as the sole stockholder of Xxxxxx, at
a meeting to be held immediately after the execution of this Agreement, adopted
and approved the amendment of the Xxxxxx Certificate of Incorporation
constituting a part of the Xxxxxx Charter Amendments;
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:
ARTICLE 1
THE GM TRANSACTIONS
Section 1.1. GM Board Approval of the GM Transactions. GM's Board of
Directors, at a meeting duly convened and held on October 28, 2001, (a)
determined that, as of such date, the execution, delivery and performance of
this Agreement by GM and the consummation of the transactions contemplated
hereby would be advisable, desirable and in the best interests of GM and its
stockholders and that, as of such date, consummation of the GM Transactions
would be fair to the holders of GM $1-2/3 Common Stock and the holders of GM
Class H Common Stock; (b)
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approved this Agreement and the transactions contemplated hereby; and (c)
determined, subject to its fiduciary duties under Applicable Law, to recommend
the GM Transactions as fair to the holders of GM $1-2/3 Common Stock and the
holders of GM Class H Common Stock and to recommend and submit the GM
Transactions for their approval. 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 GM Transactions and the Merger (together,
the "Transactions") and certain other related transactions, taken as a whole,
the consideration to be provided to GM and its subsidiaries and to the holders
of GM $1-2/3 Common Stock (if applicable) and the holders of GM Class H Common
Stock in the GM Transactions is fair, from a financial point of view, to the
holders of GM $1-2/3 Common Stock and the holders of GM Class H Common Stock. 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
market conditions at such time, the exchange ratios contemplated by the Merger
Agreement are fair, from a financial point of view, to the holders of Xxxxxx
Class C Common Stock immediately prior to the Merger, including GM and the
holders of GM 1-2/3 Common Stock and GM Class H Common Stock, as applicable.
Section 1.2. GM Stockholder Approval of the GM Transactions.
(a) GM's Obligations Relating to the Stockholder Approval Process.
In addition to the obligations of GM and Xxxxxx set forth in Section 5.1(g)
below with respect to the preparation and filing of the Spin-Off/Merger
Registration Statement (as defined below), subject in all cases to the other
provisions of this Section 1.2 and to Section 1.3 below, GM shall, at such times
as it shall reasonably determine, consistent with its obligations under Section
5.1 below, following the satisfaction or waiver of each and all of the
conditions set forth in Section 1.3 below:
(i) take all other action, in accordance with the U.S. federal
securities laws, the Delaware General Corporation Law (as amended from time to
time, 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 (a copy of which has been heretofore provided to EchoStar)
(the "GM Board Policy Statement"), necessary to present the GM Charter
Amendment, the Xxxxxx Recapitalization and all other aspects of the GM
Transactions, including the Spin-Off, 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 (as defined below) of the GM Transactions;
(ii) include in a proxy statement or consent solicitation
statement of GM to be distributed to GM's common stockholders in connection with
the GM Transactions (as amended
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and supplemented from time to time, the "GM Proxy/Consent Solicitation
Statement") the recommendation of its Board of Directors in favor of the GM
Transactions;
(iii) mail the GM 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 commercially reasonable 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 to be obtained in connection with a
consent solicitation, in each case sufficient under Applicable Law to constitute
the Requisite Stockholder Approval of the GM Transactions.
(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 GM Transactions to its common stockholders
for their approval or (ii) after having recommended to its common stockholders
approval of the GM Transactions, 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 EchoStar (a
"Notice of Non-Recommendation"), in which event GM shall not be required to take
or continue any of the actions set forth in Section 1.2, and, subject to Section
1.2(c) and Section 1.2(e), the provisions of Sections 7.1(c)(viii) and
7.1(d)(vi) of the Merger Agreement shall apply.
(c) Notice of Proposed Mailing. At any time after delivering a
Notice of Non-Recommendation that has not been withdrawn pursuant to Section
1.2(e), GM may deliver a written notice to EchoStar that GM proposes to mail the
GM Proxy/Consent Solicitation Statement and submit the GM Transactions to its
common stockholders for their consideration notwithstanding such Non-
Recommendation Determination (a "Notice of Proposed Mailing"); provided, that GM
shall not deliver a Notice of Proposed Mailing unless GM shall have determined,
in good faith and upon advice of legal counsel, that taking into account such
Non-Recommendation Determination and the fiduciary duties of its Board of
Directors under Applicable Law, (A) GM is authorized under the DGCL to mail the
GM Proxy/Consent Solicitation Statement and submit the GM Transactions to its
common stockholders and (B) the receipt of the Requisite Stockholder Approval
(if received) would result in the GM Transactions being duly authorized by all
necessary corporate action on the part of GM. In the event that GM delivers a
Notice of Proposed Mailing, the provisions of Sections 7.1(c)(viii) and
7.1(d)(vi), as the case may be, of the Merger Agreement shall, commencing five
(5) Business Days (as defined below) after such delivery, no longer apply as a
result of such Notice of Non-Recommendation and the parties' right to terminate
the Merger Agreement pursuant to Sections 7.1(c)(viii) and 7.1(d)(vi), as the
case may be, thereof as a result of such Notice of Non-
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Recommendation shall terminate, in which case GM shall be required to mail the
GM Proxy/Consent Solicitation Statement and submit the GM Transactions to its
common stockholders in accordance with Section 1.2(a) notwithstanding such Non-
Recommendation Determination; provided, that the GM Proxy/Consent Solicitation
Statement may in such event include a recommendation that GM's common
stockholders reject the GM Transactions (or no recommendation with respect to
the GM Transactions) and such additional disclosure relating to the Non-
Recommendation Determination as may be required in order to avoid the
misstatement of a material fact or the omission of a material fact necessary to
make the statements therein not misleading or as otherwise may be required in
accordance with Applicable Law.
(d) Request for Confirmation. In the event that the conditions set
forth in Sections 1.3(a), (c) and (d) 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 GM Proxy/Consent Solicitation Statement, EchoStar
may from time to time make a written request (a "Confirmation Request") that GM
confirm in writing (a "Confirmation") that, as of the date of such Confirmation,
GM's Board of Directors continues to recommend the GM Transactions and has a
good faith intention and is prepared to submit the GM Transactions to GM's
common stockholders in accordance with Section 1.2(a), and continues to take all
actions in accordance with Section 5.1(a) in furtherance thereof, and is in
compliance with Section 5.1(j); provided, that EchoStar may not make any
Confirmation Request within ten (10) Business Days after it has received a
Confirmation. If EchoStar delivers a Confirmation Request to GM in accordance
with the preceding sentence, then either (i) GM shall provide a Confirmation to
EchoStar 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 EchoStar 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 7.1(d)(vi) of the Merger
Agreement shall apply.
(e) Withdrawal of Notice of Non-Recommendation. At any time after
delivering a Notice of Non-Recommendation pursuant to Section 1.2(b) hereof, GM
may deliver a written notice to EchoStar that the GM Board of Directors has
determined to recommend the GM Transactions to its common stockholders for their
approval and to withdraw the Notice of Non-Recommendation (a "Withdrawal
Notice"). In the event that GM delivers a Withdrawal Notice, commencing five (5)
Business Days after such delivery, the provisions of Sections 7.1(c)(viii) and
7.1(d)(vi) of the Merger Agreement shall no longer apply as a result of such
Notice of Non-Recommendation and the parties' rights to terminate the Merger
Agreement pursuant to Sections 7.1(c)(viii) and 7.1(d)(vi), as the case may be,
thereof as a result of such Notice of Non-Recommendation shall terminate, in
which case GM shall be required to mail the GM Proxy/Consent Solicitation
Statement and submit the GM Transactions to its common stockholders in
accordance with Section 1.2(a) notwithstanding such Non-Recommendation
Determination.
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Section 1.3. Conditions to GM's Obligations Relating to the
Stockholder Approval Process. GM's obligation to take the actions set forth in
Section 1.2 above is subject to the satisfaction of each and all of the
following conditions (any of which, other than the condition set forth in
Section 1.3(a), may be waived in whole or in part by GM, in its sole and
absolute discretion, after consultation with EchoStar):
(a) the U.S. Securities and Exchange Commission (the "SEC") shall
have declared the Spin-Off/Merger Registration Statement effective, all other
required approvals and clearances of the Spin-Off/Merger Registration Statement
and the GM Proxy/Consent Solicitation Statement shall have been received from
the SEC and no stop order suspending the effectiveness of the Spin-Off/Merger
Registration Statement shall be in effect and no similar restraining order shall
have been entered or threatened by the SEC with respect to the Transactions;
(b) all applicable material state and foreign blue sky or securities
permits or approvals required to mail the GM Proxy/Consent Solicitation
Statement and take the other actions set forth in Section 1.2 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 Transactions;
(c) GM shall have received the Ruling (as defined in the GM/Xxxxxx
Separation Agreement); and
(d) the Merger Financing Agreement shall have been executed and shall
be in full force and effect, and none of the agent banks thereunder shall have
notified Xxxxxx or EchoStar in writing that the transactions contemplated by the
Merger Financing Agreement are not reasonably likely to be consummated prior to
the date set forth in Section 7.1(b)(ii) of the Merger Agreement (any such
notification, an "Adverse Notification") such that there is a material risk that
the Merger Financing will not be available at or immediately prior to the Spin-
Off Effective Time.
Section 1.4. Spin-Off of Xxxxxx from GM.
(a) Subject to the consummation by GM and Xxxxxx of the Xxxxxx
Recapitalization in accordance with the terms and conditions of the GM/Xxxxxx
Separation Agreement, including the receipt by GM of all of the dividend
distributions contemplated by Section 1.1(a) of the GM/Xxxxxx Separation
Agreement in an amount equal to the Recapitalization Amount, the parties agree
that, immediately following the consummation of the Xxxxxx Recapitalization and
immediately prior to the Merger, GM and Xxxxxx shall promptly take all actions
within their control legally required to effect (i) the Xxxxxx Class C Common
Stock Exchange (as defined below) and (ii) provided that the GM Series H
Preference Stock shall not have been previously converted, redeemed or otherwise
canceled pursuant to the Certificate of Designations relating to the GM Series
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H Preference Stock, substantially concurrently therewith, the Greater Spinco
Preference Share Exchange (as defined below).
(b) For the purposes of this Agreement, the following terms shall
have the following meanings:
(i) "GM Notional Shares" means the aggregate number determined
by the Board of Directors of GM, in good faith and in accordance with the
provisions of the succeeding sentence, to be the aggregate number of notional
shares representing GM's retained economic interest in Xxxxxx. The aggregate
number of GM Notional Shares shall be calculated, as of any particular time, by
subtracting (A) the number of shares of GM Class H Common Stock issued and
outstanding as of such time from (B) the Denominator determined by the Board of
Directors of GM as of such point in time rather than as an average with respect
to any accounting period. Promptly following any determination by the Board of
Directors of GM of the aggregate number of GM Notional Shares pursuant to this
Agreement, GM shall provide written notice thereof to EchoStar (which notice
shall include the computation thereof);
(ii) "Greater Spinco Preference Share Exchange" means the
distribution by GM to the holders of the GM Series H Preference Stock of shares
of Xxxxxx Preference Stock having all of the rights, features and other
attributes of Greater Spinco Preference Shares (as defined below), such that all
of the outstanding shares of GM Series H Preference Stock shall be canceled in
accordance with the terms of the GM Certificate of Incorporation, including the
Certificate of Designations relating to the GM Series H Preference Stock;
(iii) "Greater Spinco Preference Shares" shall have the meaning
set forth in Section 6(iii)(d)(II) of the Certificate of Designations relating
to the GM Series H Preference Stock constituting part of the GM Certificate of
Incorporation;
(iv) "Xxxxxx Class C Common Stock Exchange" means (A) the pro
rata distribution to the holders of GM Class H Common Stock of shares of Xxxxxx
Class C Common Stock representing their proportionate economic interest in
Xxxxxx in exchange for all of the outstanding shares of GM Class H Common Stock
(i.e., the distribution of one share of Xxxxxx Class C 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, and (B) in the event that the number of
shares of Xxxxxx Class C Common Stock that would be issuable in order to
represent the GM Notional Shares determined as of immediately prior to the Spin-
Off Effective Time (and after giving effect to the adjustment to the Denominator
in connection with the Xxxxxx Recapitalization as contemplated by Section 1.1(b)
of the GM/Xxxxxx Separation Agreement) is greater than zero, the retention by
GM, or, immediately following the redemption of shares of GM Class H Common
Stock in exchange for shares of Xxxxxx
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Class C Common Stock as described in clause (A) above, the distribution by GM by
means of a dividend to the holders of GM $1-2/3 Common Stock, of all or a
portion of the remaining shares of Xxxxxx Class C Common Stock held by GM as of
such time, as contemplated by Section 5.2(h) below; and
(v) "Spin-Off Effective Time" means the effective time of the
Xxxxxx Class C Common Stock Exchange in accordance with the GM Certificate of
Incorporation, as amended pursuant to the GM Charter Amendment and Applicable
Law.
Section 1.5. Effects of the Spin-Off. From and after the Spin-Off
Effective Time, the Spin-Off shall have the effects specified in DGCL Sections
151 and 173 (as applicable) and set forth in this Agreement.
(a) Exchange of Xxxxxx Class C Common Stock for GM Class H Common
Stock. At and as of the Spin-Off Effective Time, by virtue of the Spin-Off and
without any action on the part of GM, Xxxxxx, any holder of capital stock of GM
or any other Person (as defined below), (i) for all purposes of determining the
record holders of Xxxxxx Class C Common Stock, the holders of record of GM Class
H Common Stock as of immediately prior to the Spin-Off Effective Time shall be
deemed to be holders of the shares of Xxxxxx Class C Common Stock distributed to
such holders pursuant to the Xxxxxx Class C 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 Class C Common Stock
distributed to such holder pursuant to the Xxxxxx Class C Common Stock Exchange.
(b) Distribution With Respect to GM $1-2/3 Common Stock. In the
event that GM effects the Remaining Shares Distribution (as defined below and as
contemplated by Section 5.2(h) of this Agreement), then, at and as of the Spin-
Off Effective Time, by virtue of the Spin-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 Class C Common Stock,
the holders of record of GM $1-2/3 Common Stock as of immediately prior to the
Spin-Off Effective Time shall be deemed to be holders of the shares of Xxxxxx
Class C Common Stock distributed to such holders pursuant to the Xxxxxx Class C
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 Class C Common Stock distributed to such holder pursuant to the Xxxxxx
Class C Common Stock Exchange.
(c) Exchange of Greater Spinco Preference Shares for GM Series H
Preference Stock. In accordance with the terms of the GM Certificate of
Incorporation, including the Certificate of Designations relating to the GM
Series H Preference Stock, GM shall, provided that the GM Series H Preference
Stock shall not have been previously converted, redeemed or otherwise canceled
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pursuant to the Certificate of Designations relating to the GM Series H
Preference Stock, pursuant to the Greater Spinco Preference Share Exchange, make
a distribution to the holders of the GM Series H Preference Stock of Xxxxxx
Preference Stock having all of the rights, features and other attributes of
Greater Spinco Preference Shares such that all of the outstanding shares of GM
Series H Preference Stock shall be canceled. At and as of the Spin-Off Effective
Time, by virtue of the Spin-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 Preference Stock, the
holders of record of GM Series H Preference Stock as of immediately prior to the
Spin-Off Effective Time shall be deemed to be holders of Xxxxxx Preference Stock
distributed to such holders pursuant to the Greater Spinco Preference Share
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, Xxxxxx Preference Stock
distributed to such holder pursuant to the Greater Spinco Preference Share
Exchange.
(d) Treasury Shares. At and as of the Spin-Off Effective Time, by
virtue of the Spin-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
Stock owned by GM as of immediately prior to the Spin-Off Effective Time shall
be canceled and retired, and no payment or distributions shall be made in
respect thereof.
Section 1.6. Cooperation of Transfer Agents; Stockholder Records; GM
Class H Common Stock Certificates.
(a) Cooperation. GM shall cooperate, and shall instruct Fleet
National Bank, 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
transfer agent for the Xxxxxx Class C Common Stock (the "Xxxxxx Transfer
Agent"), and Xxxxxx shall cooperate, and shall instruct the Xxxxxx Transfer
Agent to cooperate fully with GM and the GM Transfer Agent in connection with
the Spin-Off 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 Class
C 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 Spin-Off Effective Time
as described in Section 1.5(a) above, (ii) the issuance and delivery of
Certificates evidencing the shares of Xxxxxx Class C Common Stock to be retained
by GM, if any, and/or distributed to holders of GM $1-2/3 Common Stock as
described in Section 1.5(b) above, and (iii) the issuance and delivery of
Certificates evidencing the shares of Xxxxxx Preference Stock to be distributed
in exchange for all of the shares of GM Series H Preference Stock outstanding as
of immediately prior to the Spin-Off Effective Time as described in Section
1.5(c) above. GM and Xxxxxx shall jointly instruct the GM Transfer Agent and the
Xxxxxx Transfer Agent to cooperate with each other such that the Xxxxxx Transfer
Agent shall distribute letters of transmittal, in form reasonably satisfactory
to each of GM and Xxxxxx, to all holders of GM Class H Common Stock and GM
Series H Preference Stock as of
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immediately prior to the Spin-Off Effective Time in connection with the exchange
of Certificates evidencing shares of GM Class H Common Stock and GM Series H
Preference Stock for Certificates evidencing shares of Xxxxxx Class C Common
Stock and Xxxxxx Preference Stock, respectively.
(b) Following the Spin-Off Effective Time, GM shall instruct the GM
Transfer Agent to deliver to the Xxxxxx Transfer Agent true, correct and
complete copies of the transfer records reflecting the record holders of GM
Class H Common Stock and GM Series H Preference Stock, in each case as of
immediately prior to the Spin-Off Effective Time. Upon the reasonable request of
Xxxxxx from time to time after the Spin-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 and GM Series H Preference Stock as of
immediately prior to the Spin-Off Effective Time.
(c) Return or Destruction of GM Class H Common Stock Certificates.
GM and Xxxxxx shall use commercially reasonable efforts to enter into an
agreement with the Xxxxxx Transfer Agent relating to the exchange of
Certificates of Xxxxxx Class C Common Stock for Certificates of GM Class H
Common Stock in connection with the Spin-Off, which shall include provisions
reasonably satisfactory to GM and Xxxxxx generally to the effect that following
such time as any Certificates of GM Class H Common Stock are surrendered to the
Xxxxxx Transfer Agent for cancellation, Xxxxxx shall use commercially reasonable
efforts to cause the Xxxxxx Transfer 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.
Section 1.7. Closing of Transfer Records. From and after the Spin-
Off Effective Time, transfers of shares of GM Class H Common Stock or GM Series
H Preference Stock outstanding prior to the Spin-Off Effective Time shall not be
made on the stock transfer books of GM.
Section 1.8. Cancellation. From and after the Spin-Off Effective
Time, (a) 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 Class C Common Stock distributed in the Spin-Off and (b) each holder of
Certificates formerly representing shares of GM Series H Preference Stock will
thereafter cease to have any rights with respect to such shares, and such
Certificates will represent the Greater Spinco Preference Shares distributed in
the Spin-Off.
Section 1.9. Treatment of Stock Options, LTAP Awards and Restricted
Stock Units.
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(a) Prior to the Spin-Off Effective Time, in order to preserve the
economic interest and cost to exercise with respect to each employee 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 Spin-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 Spin-Off Effective Time, (i) the same number of
shares of Xxxxxx Class C 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 Spin-Off Effective Time and (ii) at a price per share
equal to the per share exercise price for the Option immediately prior to the
Spin-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 Class C Common Stock that will become subject to Exchange Options
pursuant to this Section 1.9 and (ii) from and after the Spin-Off Effective
Time, upon exercise of Exchange Options, make available for issuance all shares
of Xxxxxx Class C Common Stock covered thereby, subject to the terms and
conditions applicable thereto.
(b) Prior to the Spin-Off Effective Time, in order to preserve the
economic interest and cost to fund with respect to the Xxxxxx Long-Term
Achievement Plan (the "LTAP"), GM and Xxxxxx shall take all such actions as may
be necessary to cause, effective as of the Spin-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 Class C 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 Class C Common Stock (and not shares
of GM $1-2/3 Common 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 New York Stock Exchange
("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 Spin-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 Spin-Off Effective Time occurs; provided, that any
fractional share of Xxxxxx Class C Common Stock payable in accordance with the
calculation set forth in clause (ii) of this Section 1.9(b) shall be rounded to
the nearest whole share of Xxxxxx Class C Common Stock; provided, further, that
any payment under the LTAP which will become payable in shares of Xxxxxx Class C
Common Stock pursuant to this Section 1.9(b) shall be payable on the same terms
and conditions as were applicable to such payment immediately
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before the date of this Agreement. Xxxxxx shall (i) reserve for issuance the
number of shares of Xxxxxx Class C Common Stock that will become payable under
the LTAP pursuant to this Section 1.9 and (ii) from and after the Spin-Off
Effective Time, with respect to any payment under the LTAP which is payable in
shares of Xxxxxx Class C Common Stock, make available for issuance all such
shares of Xxxxxx Class C 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
Class C 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 commercially reasonable 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 1.9.
(e) Prior to the Spin-Off Effective Time, the Board of Directors of
GM or an appropriate committee of non-employee directors thereof, or the Board
of Directors of Xxxxxx or an appropriate committee of non-employee directors
thereof, as applicable, shall adopt a resolution consistent with the
interpretive guidance of the SEC, so that the disposition of each Option and the
acquisition of any shares of Xxxxxx Class C Common Stock, any Exchange Options
or any other equity securities or derivative securities of Xxxxxx pursuant to
this Agreement by each officer or director of GM or Xxxxxx who may become
subject to Section 16 of the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder (the "Exchange Act"), with
respect to Xxxxxx, shall be exempt for purposes of Section 16 of the Exchange
Act.
(f) GM and Xxxxxx shall take all such actions as may be necessary to
prevent Options, interests in the LTAP, restricted stock units with respect to
GM Class H Common Stock and other incentive compensation awards from being
adjusted to change the number of shares or the purchase price of shares with
respect to such awards (or triggering a payment obligation to such holders) as a
result of the Xxxxxx Recapitalization.
(g) Xxxxxx shall not be obligated to deliver GM Class H Common Stock
or Xxxxxx Class A Common Stock (or otherwise fund any cost) with respect to the
exercise of any Option which is held by an employee of GM or one of its
Subsidiaries (other than Xxxxxx and its Subsidiaries).
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(h) GM, Xxxxxx and each of Xxxxxx' Subsidiaries (including PanAmSat
and DTVLA) shall take all such actions as may be necessary to prevent stock
options, restricted stock units or other incentive compensation awards granted
to employees of Xxxxxx or any of its Subsidiaries (including PanAmSat and DTVLA)
after the signing of this Agreement from vesting or becoming exercisable as a
result of, or in connection with, any of the transactions contemplated by this
Agreement.
(i) To the extent provided in the Xxxxxx Electronics Corporation
Incentive Plan ("Xxxxxx Incentive Plan"), options granted under the Xxxxxx
Incentive Plan will terminate upon the consummation of a Change in Control
Event, as defined in the Xxxxxx Incentive Plan, unless the GM Committee, as
defined in the Xxxxxx Incentive Plan, provides for the assumption, substitution
or continuation of the options in accordance with the terms of the Xxxxxx
Incentive Plan. In consultation with EchoStar and Xxxxxx, the GM Committee or
its delegate (or any successor thereto under the terms of the Xxxxxx Incentive
Plan) shall, subject to Applicable Law and with the prior approval of EchoStar,
exercise its authority pursuant to the terms of the Xxxxxx Incentive Plan
(including Section 7(c)(iii) thereof) to limit the period of exercisability of
any stock option held by any employee who terminates employment for any reason
after the Closing Date to not more than two years beyond the date of such
termination of employment (but in no event beyond the term of the option). With
respect to actions which are taken pursuant to this Section 1.9(i) by the GM
Committee or its delegate with the approval of EchoStar, (i) neither of the
Xxxxxx Indemnitees nor the EchoStar Indemnitees shall be entitled to
indemnification under this Agreement from GM and (ii) the GM Indemnitees shall
be entitled to indemnification under this Agreement by Xxxxxx and EchoStar.
Section 1.10. GM Charter Amendment. The parties acknowledge that
the filing of an appropriate amendment to the GM Certificate of Incorporation,
substantially in the form attached as Exhibit H hereto with such additional
changes as may be approved by the GM Board of Directors and are required in
order to permit the declaration and payment by Xxxxxx of a promissory note to a
wholly owned subsidiary of GM (formed as a limited liability company) which
shall hold, directly or indirectly, all of GM's interest in Xxxxxx and the net
income of which shall be included in the Available Separate Consolidated Net
Income of Xxxxxx (as defined in the GM Certificate of Incorporation) as
contemplated by the provisions of the GM/Xxxxxx Separation Agreement (the "GM
Charter Amendment"), will be required in order to permit the reduction of the
Denominator and to permit the Xxxxxx Class C Common Stock Exchange, and that the
GM Charter Amendment will be consummated only after obtaining the Requisite
Stockholder Approval thereof as contemplated by this Agreement.
Section 1.11. Cooperation; Redemption of Xxxxxx Preferred Stock;
Xxxxxx Charter Amendments. Consistent with the terms and conditions of this
Agreement, each of GM and Xxxxxx shall, and shall cause its affiliates to,
cooperate with the other party in all respects to accomplish the Spin-Off and
promptly take, or cause to be taken, any and all actions within its control
necessary
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under Applicable Law, regulations and agreements in order to consummate and make
effective the Spin-Off immediately prior to the Merger Effective Time.
(a) Without limiting the generality of the foregoing, pursuant to
Article IV, Section 6(c) of the Amended and Restated Certificate of
Incorporation of Xxxxxx, as amended (the "Xxxxxx Certificate of Incorporation"),
Xxxxxx shall take all actions within its control necessary to enable it to
issue, as of immediately prior to the Spin-Off Effective Time, to GM for
distribution to the holder of the GM Series H Preference Stock pursuant to the
Greater Spinco Preference Share Exchange an appropriate number of shares of
Xxxxxx Preference Stock in redemption of all of the Xxxxxx Series A Preferred
Stock, par value $0.10 per share (the "Xxxxxx Series A Preferred Stock"), such
that all of the outstanding shares of GM Series H Preference Stock shall be
canceled as of the Spin-Off Effective Time as contemplated by Section 1.8 of
this Agreement. The parties acknowledge that such actions, to the extent
required to be taken, shall require the filing of an appropriate amendment to
the Xxxxxx Certificate of Incorporation.
(b) Each of GM and Xxxxxx shall take all actions within its control
legally required such that, as of immediately prior to the Spin-Off Effective
Time, the Xxxxxx Certificate of Incorporation shall have been amended and
restated (pursuant to one or more amendments in forms to be mutually agreed by
the parties hereto prior to the Mailing Date) to (i) authorize the Xxxxxx Class
A Common Stock (as defined in the Merger Agreement), the Xxxxxx Class B Common
Stock (as defined in the Merger Agreement) and the Xxxxxx Class C Common Stock
in accordance with the terms set forth as Exhibit A to the Merger Agreement,
(ii) include the Certificate of Designations relating to the Xxxxxx Preference
Stock, in the form attached hereto as Exhibit I, (iii) following the redemption
of the Xxxxxx Series A Preferred Stock, to eliminate the Xxxxxx Series A
Preferred Stock, (iv) to cause Xxxxxx to elect not to be governed by Section
203 of the DGCL, and (v) to authorize the necessary series of capital stock in
connection with the adoption of a stockholder rights plan as contemplated by
Section 5.1(p) below. Each of GM and Xxxxxx shall take all actions within its
control legally required such that, as of immediately prior to the Spin-Off
Effective Time, the By-laws of Xxxxxx shall have been amended and restated to
read in its entirety as mutually agreed among the parties hereto (as amended and
restated, the "Xxxxxx Amended and Restated By-laws", and together with the
Xxxxxx Certificate of Incorporation as amended and restated as contemplated
herein, the "Xxxxxx Charter Amendments").
Section 1.12. Further Assurances Regarding the GM Transactions.
Consistent with the terms and conditions of this Agreement and the GM/Xxxxxx
Separation Agreement, each of the parties shall use commercially reasonable
efforts (except where a different efforts standard is specifically contemplated
by the GM Transaction Agreements (as defined below), the Xxxxxx Transaction
Agreements (as defined below) or the EchoStar Transaction Agreements (as defined
below), in which case, such different standard shall apply) to promptly take, or
cause to be taken, any and all actions, and do, or cause to be done, all things
necessary under Applicable Law, regulations and agreements in order to
consummate and make effective the GM Transactions, including the
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Spin-Off. Without limiting the generality of the foregoing, each of the parties
shall cooperate with each other in all respects, and execute and deliver, or use
commercially reasonable efforts (except where a different efforts standard is
specifically contemplated by the GM Transaction Agreements, the Xxxxxx
Transaction Agreements or the EchoStar Transaction Agreements, in which case,
such different standard shall apply) to cause to have executed and delivered,
all instruments, including instruments of conveyance, assignment and transfer,
which shall include appropriate representations, warranties and covenants, and
to make all filings with, and to obtain all consents, approvals or
authorizations of, any foreign, federal, state or local governmental or
regulatory body, agency, instrumentality or authority ("Governmental Authority")
which are reasonably requested by the other parties in order to consummate and
make effective the GM Transactions, including the Spin-Off.
Section 1.13. 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 GM 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 GM
Proxy/Consent Solicitation Statement a 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
redemption of the outstanding GM Class H Common Stock and provided, further,
that the approval of such proposal by the GM common stockholders shall not be a
part of the Requisite Stockholder Approval).
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF GM
In order to induce EchoStar to enter into this Agreement, GM hereby
represents and warrants to EchoStar as follows, except as specifically described
in GM's annual report on Form 10-K for the fiscal year ended December 31, 2000,
GM's quarterly report on Form 10-Q for the fiscal quarter ended June 30, 2001
and all other reports, filings, registration statements and other documents
filed by GM with the SEC after June 30, 2001 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.
Section 2.1. Organization and 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
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operates makes such qualification necessary, except where the failure to be so
qualified or in good standing in such jurisdiction could not reasonably be
expected to have a material adverse impact on GM's ability to consummate the
transactions contemplated by the GM Transaction Agreements, a Xxxxxx Material
Adverse Effect (as defined in the Merger Agreement) or a material adverse effect
on Xxxxxx' ability to consummate the transactions contemplated by the Xxxxxx
Transaction Agreements.
Section 2.2. 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, the execution and delivery of the Xxxxxx Transaction
Agreements by Xxxxxx, and, subject to the recommendation of the GM Board of
Directors in accordance with the provisions of Section 1.2 above and receipt of
the Requisite Stockholder Approval, the consummation of the transactions
contemplated by the GM Transaction Agreements and the Xxxxxx 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 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.
For the purposes of this Agreement, "GM Transaction Agreements" means
this Agreement, the Stockholders Agreement (the "Stockholders Agreement") to be
entered into by and among GM, Xxxxxx and the EchoStar Controlling Stockholder
concurrently with the execution and delivery of this Agreement, in the form
attached hereto as Exhibit J, the Registration Rights Letter Agreement (the
"Registration Rights Letter Agreement") to be entered into by and among Xxxxxx,
XX, EchoStar, the EchoStar Controlling Stockholder and the GM Pension Plans (as
defined below) (or a trustee therefor) concurrently with the execution and
delivery of this Agreement, relating to the registration rights term sheet in
the form attached hereto as Exhibit K, the GM Registration Rights Agreement to
be entered into by and between Xxxxxx and GM as contemplated by the Registration
Rights Letter Agreement, the GM/Xxxxxx Separation Agreement, the Supplemental
Agreement, the Pledge Agreement, the GM/Xxxxxx Tax Agreements, the GM/Xxxxxx
Intellectual Property Agreement, the GM/Xxxxxx Special Employee Items Agreement
(as defined in the GM/Xxxxxx Separation Agreement), the Contribution and
Transfer Agreement to be entered into by and among GM and the GM Pension Plans
concurrently with the execution and delivery of this Agreement and all other
agreements contemplated hereby or thereby to which GM is (or will be) a party.
Section 2.3. Conflicts, Consents and Approvals. The execution and
delivery by GM of the GM Transaction Agreements, the execution and delivery by
Xxxxxx of the Xxxxxx
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Transaction Agreements, and the consummation of the transactions contemplated by
the GM Transaction Agreements and the Xxxxxx Transaction Agreements will not:
(a) violate any provision of the GM Certificate of Incorporation
(after giving effect to the GM Charter Amendment), the bylaws of GM, the GM
Board Policy Statement, the Xxxxxx Certificate of Incorporation, the Xxxxxx By-
laws (after giving effect to the Xxxxxx Charter Amendments) or the certificate
of incorporation or the bylaws of any of Xxxxxx' 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, accelerate, modify or call a default under, or
result in the creation of any liens, pledges, security interests, preemptive
rights, charges, restrictions, claims or other encumbrances of any kind or
nature (collectively, "Encumbrances") upon any of the properties or assets of GM
or any of its Significant Subsidiaries (as defined below), 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 or quotation of the shares of Xxxxxx Class C Common Stock and Xxxxxx
Class A Common Stock to be issued in connection with the Spin-Off and the
Merger, as applicable, on the NYSE or the Nasdaq Stock Market ("Nasdaq"),
subject to official notice of issuance, (ii) actions required by the Xxxx-Xxxxx-
Xxxxxx Antitrust Improvements Act of 1976, as amended, and the rules and
regulations promulgated thereunder (the "HSR Act"), and any similar laws of
foreign jurisdictions, and (iii) registrations or other actions required under
federal, state and foreign securities laws as are contemplated by this
Agreement;
except in the case of (b), (c) and (d) for any of the foregoing that, in the
aggregate, could not reasonably be expected to have a material adverse impact on
GM's ability to consummate the transactions contemplated by the GM Transaction
Agreements or a Xxxxxx Material Adverse Effect or a material adverse effect on
Xxxxxx' ability to consummate the transactions contemplated by the Xxxxxx
Transaction Agreements.
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(e) For the purposes of this Agreement, the following terms shall
have the following meanings:
(i) "Subsidiary", with respect to a Person, means any
corporation, limited liability company, partnership, trust or unincorporated
organization of which securities or interests having by the terms thereof
ordinary voting power to elect at least a majority of the board of directors or
others performing similar functions with respect to such corporation, limited
liability company, partnership, trust or unincorporated organization are
directly or indirectly owned or controlled by such Person or by any one or more
of its Subsidiaries, or by such Person and one or more of its Subsidiaries; and
(ii) "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.
Section 2.4. Ownership of Xxxxxx Capital Stock. As of the date of
this Agreement and through and until immediately prior to the Spin-Off Effective
Time (i.e., not giving effect to the Xxxxxx Class C Common Stock Exchange or the
Greater Spinco Preference Share Exchange), each outstanding share of Xxxxxx
capital stock is and shall be owned by GM, free and clear of all Encumbrances.
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Section 2.5. 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") of which 2,669,633 shares
are designated as GM Series H Preference Stock. As of October 25, 2001, (i)
555,503,649 shares of GM $1-2/3 Common Stock were issued and outstanding,
200,795,732 shares of GM $1-2/3 Common Stock were held by GM as treasury shares,
336,512 shares of GM $1-2/3 Common Stock were reserved for issuance upon
exercise of outstanding options and 27,093 shares of GM $1-2/3 Common Stock were
issuable with respect to awards under the LTAP; (ii) 876,982,994 shares of GM
Class H Common Stock were issued and outstanding, 81,564,668 shares of GM Class
H Common Stock were held by GM as treasury shares, 84,535 shares of GM Class H
Common Stock were reserved for issuance upon exercise of outstanding options,
1,048,325 shares of GM Class H Common Stock were issuable with respect to awards
under the LTAP and 139,293 shares of GM Class H Common Stock were issuable with
respect to restricted stock or restricted stock units; (iii) no shares of GM
Preferred Stock were issued and outstanding; and (iv) 2,669,633 shares of GM
Series H Preference Stock were issued and outstanding and no shares of GM Series
H Preference Stock were held by GM as treasury shares. Each outstanding share
of GM capital stock, including the GM Class H Common Stock and the GM Series H
Preference 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 the GM Series H Preference Stock, any shares of GM
Class H Common Stock to be issued pursuant to any GM Debt/Equity Exchange, as
contemplated by the Merger Agreement or as set forth in Section 2.5(b) of the
disclosure schedule delivered by GM to EchoStar and dated as of the date of this
Agreement (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 2.5, including the GM Class H Common Stock and the GM Series H
Preference Stock, have been in compliance with federal and state securities
laws. Section 2.5(b) of the GM 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, and the exercise prices with
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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 Restated Registration Rights Agreement, dated as of July 1, 2000, by and
among GM, United States Trust Company of New York ("U.S. Trust"), as Trustee of
the GM Special Hourly Employees Pension Trust established under the GM Hourly-
Rate Employees Pension Plan, and U.S. 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, and certain related agreements and
arrangements relating thereto (collectively, the "Current GM Pension Plans
Registration Rights Agreement"), (ii) the Registration Rights Agreement, dated
as of June 21, 1999, between GM and America Online, Inc. ("AOL"), and certain
related agreements and arrangements relating thereto (collectively, the "AOL
Registration Rights Agreement"), (iii) 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") and (iv) the Registration Rights Letter
Agreement, neither GM nor any GM Affiliate (as defined below) 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 GM/Xxxxxx Separation Agreement) that
would require registration of any shares of GM Class H Common Stock under the
Securities Act of 1933, as amended, and the rules and regulations promulgated
thereunder (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 September 30, 2001, the Numerator (as defined below) of the
Class H Fraction was 876,948,420 and the Denominator of the Class H Fraction was
1,299,745,326, in each case with respect to the quarterly accounting period
ended on such date. As of the date of this Agreement, the aggregate outstanding
shares of GM Series H Preference Stock were convertible, at the option of the
holder, into 24.1935 shares of GM Class H Common Stock for each share of GM
Series H Preference Stock, which number reflects all required adjustments as of
such date pursuant to the Certificate of Designations relating to the GM Series
H Preference Stock (including adjustments to reflect the three-for-one stock
split in respect of GM Class H Common Stock effected pursuant to a 200 percent
stock dividend paid on June 30, 2000 to holders of record of GM Class H Common
Stock as of June 13, 2000). On June 24, 2002, if not previously converted,
redeemed or otherwise canceled pursuant to the terms of the Certificate of
Designations relating to the GM Series H Preference Stock, subject to adjustment
pursuant to the terms of the Certificate of Designations relating to the GM
Series H Preference Stock in effect on the date of this Agreement, each share of
GM Series H Preference Stock will automatically convert into a certain number
(between 24.1935 and 30.0) of shares of GM Class H Common Stock determined
pursuant to the provisions of the Certificate of Designations relating to the GM
Series H Preference Stock. Upon any such
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conversion, assuming that GM Class H Common Stock remains outstanding as of such
time, the numerator (the "Numerator") of the Class H Fraction will be increased
to reflect such number of shares of GM Class H Common Stock issued upon
conversion and the Denominator of the Class H Fraction will be increased to
reflect such number of shares of GM Class H Common Stock issued upon conversion.
(d) All dividends paid on the GM Series H Preference Stock have been
declared by the Board of Directors of GM for payment on, and have been paid on,
each Preferential Dividend Payment Date (as defined in the Certificate of
Designations relating to the GM Series H Preference Stock) and there exist no
accrued and unpaid dividends on the GM Series H Preference Stock, other than
dividends which have accrued from or since the last Preferential Dividend
Payment Date and which will be declared and paid on dates consistent with past
practice.
Section 2.6. Litigation. Except as set forth on Section 2.6 of the GM
Disclosure Schedule, there is no suit, claim, action, proceeding or
investigation 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 could reasonably be expected to have a material
adverse impact on GM's ability to consummate the transactions contemplated by
the GM Transaction Agreements or a Xxxxxx Material Adverse Effect or a material
adverse effect on Xxxxxx' ability to consummate the transactions contemplated by
the Xxxxxx Transaction Agreements.
Section 2.7. Brokerage and Finder's Fees; Opinions of Financial
Advisors.
(a) Except for obligations to the GM Financial Advisors and the Xxxxxx
Financial Advisors, neither GM nor any GM Affiliates, stockholders, directors,
officers or employees has incurred or will incur on behalf of GM or any GM
Affiliate, any brokerage, finder's or similar fee in connection with the
transactions contemplated by the GM Transaction Agreements or the Xxxxxx
Transaction Agreements.
(b) The Board of Directors of GM has received the GM Financial Advisor
Fairness Opinions. GM has heretofore provided a copy of such opinions to
EchoStar for informational purposes only, and EchoStar acknowledges that it has
no right to rely on such opinion. As of the date of this Agreement, such
opinions have not been withdrawn, revoked or modified.
Section 2.8. Spin-Off/Merger Registration Statement, GM Proxy/Consent
Solicitation Statement, EchoStar Information Statement and GM Debt/Equity
Exchange Registration Statement. 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 (as
defined below)) for inclusion in (a) the Spin-Off/Merger Registration Statement,
at the time it becomes effective, (b) the GM Proxy/Consent Solicitation
Statement, at the date of mailing and at the date of voting or consent and
approval with respect thereto, (c) the information statement of
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EchoStar to be distributed to EchoStar's common stockholders in connection with
the Merger (as amended and supplemented from time to time, the "EchoStar
Information Statement"), at the date of mailing, and (d) any GM Debt/Equity
Exchange Registration Statement (as defined below), at the time it becomes
effective, 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 Spin-Off/Merger Registration
Statement, the GM Proxy/Consent Solicitation Statement, the EchoStar Information
Statement and any GM Debt/Equity Exchange Registration Statement 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. No representation or warranty is made by GM in this
Section 2.8 with respect to statements made or incorporated by reference therein
based on information provided by or on behalf of Xxxxxx or EchoStar for
inclusion in the Spin-Off/Merger Registration Statement, the GM Proxy/Consent
Solicitation Statement, the EchoStar Information Statement or any GM Debt/Equity
Exchange Registration Statement. For the purposes of this Agreement, (i) "Spin-
Off/Merger Registration Statement" means, collectively, the registration
statement(s) on Form S-4, as amended from time to time, relating to the Xxxxxx
Class C Common Stock (and other Xxxxxx securities, if applicable) to be
distributed pursuant to the Spin-Off and the Xxxxxx Class A Common Stock, Xxxxxx
Class B Common Stock and Xxxxxx Class C Common Stock to be issued pursuant to
the Merger, including any prospectus relating to the Xxxxxx Class A Common
Stock, Xxxxxx Class B Common Stock or Xxxxxx Class C Common Stock (and other
Xxxxxx securities, if applicable), as amended and supplemented from time to
time, and including the GM Proxy/Consent Solicitation Statement, as amended and
supplemented from time to time and the EchoStar Information Statement, as
amended and supplemented from time to time, and (ii) "GM Debt/Equity Exchange
Registration Statement" means the registration statement(s) on Form S-3 (or any
other appropriate form), as amended from time to time, relating to shares of GM
Class H Common Stock or Xxxxxx Class C Common Stock, as applicable, to be issued
in connection with any GM Debt/Equity Exchange, including any prospectus
relating to the GM Class H Common Stock or Xxxxxx Class C Common Stock, as
amended and supplemented from time to time.
Section 2.9. Tax Representations. GM currently believes that it will
be able to make any representations, warranties or covenants which are
reasonably likely to be requested by the IRS (as defined below) in connection
with the Ruling Request (as defined below).
Section 2.10. 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
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the outstanding shares of GM Class H Common Stock, voting as a separate class,
in each case to approve the GM Charter Amendment, the Xxxxxx Recapitalization
and all other aspects of the GM Transactions, including the Spin-Off (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 GM Transactions.
(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 have, in its capacity as the sole stockholder of
Xxxxxx, adopted and approved the Merger Agreement (and the execution, delivery
and performance thereof) and the transactions contemplated by the Xxxxxx
Transaction Agreements. No other vote or consent of the holders of any class or
series of Xxxxxx capital stock is necessary to approve and adopt the Merger
Agreement.
Section 2.11. Agreement with GM Pension Plans. Pursuant to the
Contribution and Transfer Agreement (the "GM Pension Plans Contribution and
Transfer Agreement") to be entered into by and among GM and the GM Pension
Plans, concurrently with the execution and delivery of this Agreement, U.S.
Trust, as Trustee of the GM Special Hourly Employees Pension Trust established
under the GM Hourly-Rate Employees Pension Plan, and U.S. 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 (together, the "GM Pension
Plans"), have agreed that, except as may be permitted under the terms of an IRS
private letter ruling requested by GM after the Merger Effective Time and
obtained in accordance with the terms of the GM Pension Plans Contribution and
Transfer Agreement, prior to the first day after the second anniversary of the
Spin-Off Effective Time, the GM Pension Plans will not enter into any agreement,
understanding or arrangement or any substantial negotiations with respect to any
disposition of GM Class H Common Stock, Xxxxxx Class C Common Stock, or any
successor security, except as expressly contemplated by the GM Transactions, and
has provided a copy of the GM Pension Plans Contribution and Transfer Agreement
to EchoStar.
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ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF XXXXXX
In order to induce EchoStar to enter into this Agreement, Xxxxxx hereby
represents and warrants to EchoStar as follows, except as specifically described
in Xxxxxx' annual report on Form 10-K for the fiscal year ended December 31,
2000 (the "Xxxxxx 10-K"), Xxxxxx' quarterly report on Form 10-Q for the fiscal
quarter ended September 30, 2001 (the "Xxxxxx 10-Q") and all other reports,
filings, registration statements and other documents filed by Xxxxxx with the
SEC after September 30, 2001 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.
Section 3.1. Organization and Standing. Each of Xxxxxx and Xxxxxx'
Significant Subsidiaries is a corporation 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, 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 could not reasonably be expected to have a
Xxxxxx Material Adverse Effect or have a material adverse impact on its ability
to consummate the transactions contemplated by the Xxxxxx Transaction
Agreements.
Section 3.2. 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.
For the purposes of this Agreement, "Xxxxxx Transaction Agreements"
means this Agreement, the Merger Agreement, the PanAmSat Stock Purchase
Agreement, the Merger Commitment, the Merger Financing Agreement, the
Supplemental Agreement, the Stockholders Agreement, the GM/Xxxxxx Separation
Agreement, the GM/Xxxxxx Tax Agreements, the EchoStar/Xxxxxx Employee Matters
Agreement ("EchoStar/Xxxxxx Employee Matters Agreement")
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entered into by and between EchoStar and Xxxxxx concurrently with the execution
and delivery of the Agreement, in the form attached as Exhibit I to the Merger
Agreement, the GM/Xxxxxx Intellectual Property Agreement, the GM/Xxxxxx Special
Employee Items Agreement (as defined in the GM/Xxxxxx Separation Agreement), the
Registration Rights Letter Agreement, the EchoStar Controlling Stockholder
Registration Rights Agreement ("EchoStar Controlling Stockholder Registration
Rights Agreement") to be entered into by and among Xxxxxx, EchoStar and the
EchoStar Controlling Stockholder as contemplated by the Registration Rights
Letter Agreement, the GM Pension Plans Registration Rights Agreement to be
entered into by and between Xxxxxx and the GM Pension Plans (or the trustee
therefor) as contemplated by the Registration Rights Letter Agreement, the GM
Registration Rights Agreement to be entered into by and between Xxxxxx and GM as
contemplated by the Registration Rights Letter Agreement and all other
agreements contemplated hereby or thereby to which Xxxxxx is (or will be) a
party.
Section 3.3. Spin-Off/Merger Registration Statement, GM Proxy/Consent
Solicitation Statement, EchoStar Information Statement and GM Debt/Equity
Exchange Registration Statement. 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
(a) the Spin-Off/Merger Registration Statement, at the time it becomes
effective, (b) the GM Proxy/Consent Solicitation Statement, at the date of
mailing and at the date of voting or consent and approval with respect thereto,
(c) the EchoStar Information Statement, at the date of mailing, and (d) any GM
Debt/Equity Exchange Registration Statement, at the time it becomes effective,
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 Spin-Off/Merger Registration Statement, the
GM Proxy/Consent Solicitation Statement, the EchoStar Information Statement and
any GM Debt/Equity Exchange Registration Statement 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. No representation or warranty is made by Xxxxxx in this Section 3.3 with
respect to statements made or incorporated by reference therein based on
information provided by or on behalf of GM or EchoStar for inclusion in the
Spin-Off/Merger Registration Statement, the GM Proxy/Consent Solicitation
Statement, the EchoStar Information Statement or any GM Debt/Equity Exchange
Registration Statement.
Section 3.4. Tax Representations. Xxxxxx currently believes that it
will be able to make and certify the statements set forth in Exhibit E to the
Merger Agreement and to make any representations, warranties or covenants which
are reasonably likely to be requested by the IRS or GM in connection with the
Ruling Request.
ARTICLE 4
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REPRESENTATIONS AND WARRANTIES OF ECHOSTAR
In order to induce GM and Xxxxxx to enter into this Agreement, EchoStar
hereby represents and warrants to GM and Xxxxxx as follows, except as
specifically described in EchoStar's annual report on Form 10-K for the fiscal
year ended December 31, 2000 (the "EchoStar 10-K"), EchoStar's quarterly report
on Form 10-Q for the fiscal quarter ended September 30, 2001 (the "EchoStar 10-
Q") and all other reports, filings, registration statements and other documents
filed by EchoStar with the SEC after September 30, 2001 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.
Section 4.1. Organization and Standing. Each of EchoStar and
EchoStar's Significant Subsidiaries is a corporation validly existing and in
good standing under the laws of the State of Nevada, with respect to EchoStar,
and (to the extent that such concepts or equivalent concepts are recognized in
such jurisdictions) under the laws of its state or other jurisdiction of
incorporation, with respect to EchoStar's Significant Subsidiaries, in each case
with all corporate power to carry on its business as now conducted. Each of
EchoStar and EchoStar's Subsidiaries is duly qualified to do business and is in
good standing (to the extent 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 could not reasonably be expected to have a
EchoStar Material Adverse Effect (as defined in the Merger Agreement) or have a
material adverse impact on its ability to consummate the transactions
contemplated by the EchoStar Transaction Agreements.
Section 4.2. Corporate Power and Authority. EchoStar has (or will have
prior to execution thereof) all requisite corporate power and authority to enter
into the EchoStar Transaction Agreements and to consummate the transactions
contemplated thereby. The execution and delivery of the EchoStar Transaction
Agreements by EchoStar and the consummation of the transactions contemplated
thereby to be effected by EchoStar have been (or will be prior to execution and
delivery thereof) duly authorized by all necessary corporate action on the part
of EchoStar. Each of the EchoStar Transaction Agreements has been (or will be)
duly executed and delivered by EchoStar and, assuming the due authorization,
execution and delivery by the other parties thereto, constitutes (or will
constitute when executed) the legal, valid and binding obligations of EchoStar,
enforceable against it in accordance with its terms, except as enforceability
may be limited by bankruptcy, similar laws of debtor relief and general
principles of equity.
For the purposes of this Agreement, (a) "EchoStar Transaction
Agreements" means this Agreement, the Merger Agreement, the Merger Commitment
Letter, the Merger Financing Agreement, the PanAmSat Financing Agreement, the
PanAmSat Stock Purchase Agreement, the Registration Rights Letter Agreement, the
EchoStar Controlling Stockholder Registration Rights
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Agreement, the EchoStar/Xxxxxx Employee Matters Agreement, the Supplemental
Agreement and all other agreements contemplated hereby or thereby to which
EchoStar is (or will be) a party; and (b) "Transaction Agreements" means,
collectively, the GM Transaction Agreements, the Xxxxxx Transaction Agreements
and the EchoStar Transaction Agreements.
Section 4.3. Spin-Off/Merger Registration Statement, GM Proxy/Consent
Solicitation Statement, EchoStar Information Statement and GM Debt/Equity
Exchange Registration Statement. None of the information provided by or on
behalf of EchoStar or any EchoStar Affiliate (as defined below) for inclusion in
(a) the Spin-Off/Merger Registration Statement, at the time it becomes
effective, (b) the GM Proxy/Consent Solicitation Statement, at the date of
mailing and at the date of voting or consent and approval with respect thereto,
(c) the EchoStar Information Statement, at the date of mailing, or (d) any GM
Debt/Equity Exchange Registration Statement, at the time it becomes effective,
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 Spin-Off/Merger Registration Statement, the
GM Proxy/Consent Solicitation Statement, the EchoStar Information Statement and
any GM Debt/Equity Exchange Registration Statement provided by or on behalf of
EchoStar or any EchoStar Affiliate will comply as to form in all material
respects with the provisions of the Securities Act and the Exchange Act. No
representation or warranty is made by EchoStar in this Section 4.3 with respect
to statements made or incorporated by reference therein based on information
provided by or on behalf of GM or Xxxxxx for inclusion in the Spin-Off/Merger
Registration Statement, the GM Proxy/Consent Solicitation Statement, the
EchoStar Information Statement or any GM Debt/Equity Exchange Registration
Statement.
Section 4.4. Tax Representations. EchoStar currently believes that it
will be able to make and certify the statements set forth in Exhibit D to the
Merger Agreement and to make any representations, warranties or covenants which
are reasonably likely to be requested by the IRS in connection with the Ruling
Request.
Section 4.5. Merger Agreement Representations and Warranties. Except
to the extent repeated in this Agreement, EchoStar hereby represents and
warrants to GM with respect to each of the matters set forth in Article 3 of the
Merger Agreement to the full extent set forth therein as though such
representations and warranties were made by EchoStar to GM in this Agreement.
ARTICLE 5
COVENANTS AND AGREEMENTS OF THE PARTIES
Section 5.1. Mutual Covenants.
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(a) General. Each of the parties hereto shall use commercially
reasonable efforts (except where a different efforts standard is specifically
contemplated by the GM Transaction Agreements, the Xxxxxx Transaction Agreements
or the EchoStar Transaction Agreements, in which case, such different standard
shall apply) to take all actions and to do all things necessary, proper or
advisable to consummate as soon as reasonably practicable the transactions
contemplated by the GM Transaction Agreements, the Xxxxxx Transaction Agreements
and the EchoStar Transaction Agreements, including with respect to the
satisfaction of each and all of the conditions set forth in Section 1.3 of this
Agreement, Article 6 of the GM/Xxxxxx Separation Agreement and Article 6 of the
Merger Agreement, in each case subject to the terms and conditions of such
agreement.
(b) Notification of Certain Matters. Each of the parties hereto shall
give prompt notice to the others of (i) the occurrence or non-occurrence of any
event the occurrence or non-occurrence of which would cause such party's
representations or warranties contained in this Agreement to be untrue or
inaccurate at or prior to the Merger Effective Time, and (ii) any material
failure of such party to comply with or satisfy any covenant, condition or
agreement to be complied with or satisfied by it hereunder; provided, however,
that the delivery of any notice pursuant to this Section 5.1(b) shall not limit
or otherwise affect the remedies available hereunder to any of the parties.
(c) The Ruling Request. As soon as reasonably practicable after the
date of this Agreement, GM shall submit to the Internal Revenue Service of the
United States Department of the Treasury (the "IRS") a request (the "Ruling
Request") for (i) the Ruling, (ii) an AOL Section 355(e) Ruling (as defined
below), (iii) a Remaining Shares Section 355(e) Ruling (as defined below), (iv)
a ruling that no gain or loss will be recognized by GM or any GM Affiliate on
the transfer of GM Class H Common Stock or Xxxxxx Class C Common Stock in any GM
Debt/Equity Exchange, and (v) any other ruling in connection with the Spin-Off
that GM, in consultation with EchoStar, 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. EchoStar shall
cooperate fully with GM in the preparation of the Ruling Request and any other
IRS Submission and shall make its officers, employees, advisors and others
associated with EchoStar available for meetings with GM and the IRS as requested
by GM. EchoStar shall 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. Unless the
Merger Agreement has been terminated, GM shall provide EchoStar 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 (A) GM, in its
good faith judgment, considers to be confidential and not germane to the
obligations of EchoStar or its affiliates under the EchoStar Transaction
Agreements or the obligations after the Merger Effective Time of Xxxxxx or its
affiliates under the Xxxxxx Transaction Agreements and (B) is not (and is not
reasonably expected to become) a part of any other publicly available
information, including any non-confidential filing. Unless the Merger Agreement
shall have been terminated, no IRS
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Submission shall be filed with the IRS unless, prior to such filing, EchoStar
shall have agreed as to the form and substance of such IRS Submission to the
extent that the IRS Submission (I) includes statements or representations
relating to facts that are or will be under the control of EchoStar or any of
its affiliates or (II) is relevant to (and the rulings described in clauses (i)
through (iii) of the first sentence of this Section shall be considered to be
relevant), or creates, any actual or potential obligations of, or limitations
on, EchoStar or any of its affiliates (including Xxxxxx for periods after the
Spin-Off Effective Time), including any such obligations of, or limitations on,
EchoStar or its affiliates or, after the Merger Effective Time, Xxxxxx or its
affiliates under the Xxxxxx Transaction Agreements and the EchoStar Transaction
Agreements, as applicable; 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
EchoStar' representatives and to give such representatives an opportunity to
review and comment on such IRS Submission prior to filing it with the IRS.
Unless the Merger Agreement is terminated, GM shall provide EchoStar with copies
of each IRS Submission as filed with the IRS promptly following the filing
thereof; provided that GM may redact any Redactable Information from the IRS
Submission. Neither GM nor GM's representatives shall conduct any substantive
communications with the IRS regarding any issue arising with respect to the
Ruling Request, including meetings or conferences with IRS personnel, whether
telephonically, in person or otherwise, without first notifying EchoStar or
EchoStar' representatives and giving EchoStar (or EchoStar's representatives) a
reasonable opportunity to participate, and a reasonable number of EchoStar's
representatives 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. Each of GM, Xxxxxx and EchoStar agrees
to use its best efforts to obtain the Ruling and the other rulings set forth in
the Ruling Request. If, with respect to a convertible debt obligation issued by
EchoStar that is outstanding as of the date hereof, or issued by EchoStar after
the date hereof but prior to the receipt of regulatory approval of the Merger,
in each case that (i) is not convertible into equity of EchoStar or any other
Person for at least two (2) years after the Spin-Off Effective Time and (ii) has
a conversion price that (at the time of the filing of the Ruling Request for an
existing convertible debt obligation and at the time of issuance for a newly
issued convertible debt obligation) exceeds the then-market value of the
underlying stock into which it is convertible by at least five percent (5%),
then GM shall seek to obtain (and EchoStar shall cooperate with GM in connection
therewith, in accordance with this Section 5.1(c)) a ruling as to the treatment
of the convertible debt obligation under Section 355(e) of the Code; provided
that, in the reasonable judgment of GM, seeking such a ruling would not
significantly and unreasonably delay or interfere with the ability of GM to
obtain the Ruling and the other rulings requested in the Ruling Request or with
the completion of the Spin-Off and the Merger, but, in such a case, without
prejudice to the rights of Xxxxxx, after the Merger Effective Time, to pursue a
Subsequent Ruling under Section 6.3(b)(iv).
(d) Tax-Free Treatment. Each of GM, Xxxxxx and EchoStar shall take the
position for all purposes that the Merger qualifies as a reorganization pursuant
to Section 368(a) of the Code (unless and until Xxxxxx and GM fail to obtain the
Section 368 Opinion (as defined below)
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as of the Merger Effective Time), and that the Spin-Off qualifies as a
distribution of Xxxxxx stock to GM stockholders with respect to which no gain or
loss will be recognized by GM or any GM Affiliate, Xxxxxx or their respective
stockholders pursuant to Section 355 and related provisions of the Code.
(e) Notifications to and Approvals of Governmental Authorities. Each
of the parties hereto shall use commercially reasonable efforts (except where a
different efforts standard is specifically contemplated by the GM Transaction
Agreements, the Xxxxxx Transaction Agreements or the EchoStar Transaction
Agreements, in which case, such different standard shall apply) to promptly make
all filings with any foreign, federal, state or local Governmental Authorities
as are required of such party to consummate the transactions contemplated by the
GM Transaction Agreements, the Xxxxxx Transaction Agreements and the EchoStar
Transaction Agreements, except for such filings which the failure to make would
not reasonably be expected to have a Xxxxxx Material Adverse Effect or an
EchoStar Material Adverse Effect or have a material adverse impact on the
ability of any party to consummate the transactions contemplated by the GM
Transaction Agreements, the Xxxxxx Transaction Agreements and the EchoStar
Transaction Agreements, as applicable, and shall supply to the other parties,
and to any foreign, federal, state or local Governmental Authority, any
information reasonably necessary to make effective the transactions contemplated
by the GM Transaction Agreements, the Xxxxxx Transaction Agreements and the
EchoStar Transaction Agreements.
(f) Director and Officer Indemnification.
(i) The certificate of incorporation and by-laws of Xxxxxx, from
and after the Spin-Off Effective Time, shall contain indemnification provisions,
with respect to directors and officers of Xxxxxx prior to the Spin-Off Effective
Time, as shall be mutually agreed among the parties hereto. Such indemnification
provisions shall not be amended, repealed or otherwise modified for a period of
six (6) years after the Spin-Off Effective Time in any manner that would
adversely affect the rights thereunder of individuals who at any time prior to
the Spin-Off Effective Time were directors or officers of Xxxxxx in respect of
actions or omissions occurring at or prior to the Spin-Off Effective Time,
unless and to the extent that such modification is required by law.
(ii) For six (6) years after the Spin-Off Effective Time, Xxxxxx
(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 an "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 Xxxxxx)) 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 by such director or officer in his
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or her capacity as such occurring at or prior to the Spin-Off Effective Time
(and shall pay expenses in advance of the final disposition of any such action
or proceeding to each Indemnified Party to the fullest extent permitted under
the DGCL, upon receipt from the Indemnified Party to whom expenses are advanced
of the undertaking to repay such advances contemplated by Section 145(e) of the
DGCL).
(iii) Without limiting the generality of the foregoing, in the
event that any Claim is brought against any Indemnified Party after the Spin-Off
Effective Time, (A) the Indemnified Parties may retain Xxxxxx' regularly engaged
independent legal counsel or other independent legal counsel reasonably
acceptable to Xxxxxx and (B) Xxxxxx shall pay all reasonable fees and expenses
of such counsel for the Indemnified Parties promptly as statements therefor are
received, provided that Xxxxxx shall not be liable for any settlement of any
Claim effected without its written consent. Any Indemnified Party wishing to
claim indemnification under this Section 5.1(f) upon learning of any such Claim
shall notify Xxxxxx (although the failure so to notify Xxxxxx shall not relieve
Xxxxxx from any liability which Xxxxxx may have under this Section 5.1(f),
except to the extent such failure materially prejudices Xxxxxx' position with
respect to such Claim), and shall deliver to Xxxxxx the undertaking contemplated
by Section 145(e) of the DGCL. The Indemnified Parties as a group may retain no
more than one 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 Indemnified Parties), an
actual conflict between the interests of any two or more Indemnified Parties, in
which event such additional counsel as may be required may be retained by the
Indemnified Parties.
(iv) Each Indemnified Party shall have rights as a third party
beneficiary under this Section 5.1(f) as separate contractual rights for his or
her benefit, and such rights shall be enforceable by such Indemnified Party, his
or her heirs and personal representatives.
(v) This Section 5.1(f) shall survive the consummation of the
Merger and the Merger Effective Time, and shall be binding on all successors and
assigns of Xxxxxx.
(vi) No amounts shall be owed or payable by Xxxxxx, pursuant to
this Section 5.1(f), in connection with any Claims brought, directly or
indirectly, against any Xxxxxx Covered Person (as defined in Section 5.2(b)(i)
hereof) in the event that coverage for such amounts is available under the GM
policies, maintained in accordance with Section 5.2(b) hereof, for such Claims.
(g) Preparation and Filing of the Spin-Off/Merger Registration
Statement, the GM Proxy/Consent Solicitation Statement and the EchoStar
Information Statement.
(i) As soon as reasonably practicable after the date of this
Agreement, the parties shall cooperate fully with each other to jointly prepare
the Spin-Off/Merger Registration
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Statement (which shall include each of the GM Proxy/Consent Solicitation
Statement and the EchoStar Information Statement). Xxxxxx shall take all
commercially reasonable action in order to cause the Spin-Off/Merger
Registration Statement, 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
Spin-Off/Merger Registration Statement 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 consult with each other and 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 regulator the purpose of which is to discuss
comments made by such regulators. The parties shall respond to any comments made
by the SEC or any state or foreign regulator as soon as reasonably practicable
following the receipt of such comments. No amendment or supplement to the Spin-
Off/Merger Registration Statement (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 consult and coordinate
with one another in determining the Mailing Date, and GM shall keep EchoStar
reasonably informed regarding the state and federal securities regulatory
process. The parties shall use commercially reasonable efforts to cause the
Spin-Off/Merger Registration Statement to be declared effective by the SEC and
to be approved by all other applicable foreign and state securities law
regulators in accordance with Applicable Law. The parties shall take all other
actions with respect to the preparation and delivery of the Spin-Off/Merger
Registration Statement as required by Section 1.2 hereof.
(ii) EchoStar shall promptly furnish Xxxxxx and GM with all
information concerning EchoStar or any Subsidiary of EchoStar as may be
necessary or reasonably requested by GM or Xxxxxx for inclusion in the Spin-
Off/Merger Registration Statement. GM and Xxxxxx shall promptly furnish EchoStar
with all information concerning GM, Xxxxxx, any Subsidiary of Xxxxxx (other than
PanAmSat and Xxxxxx Software Systems Limited ("HSSL")) and, to the extent
obtainable by GM or Xxxxxx using commercially reasonable efforts, PanAmSat and
HSSL, as may be necessary or reasonably requested by EchoStar for inclusion in
the Spin-Off/Merger Registration Statement. If at any time prior to the Merger
Effective Time, any information pertaining to EchoStar or any Subsidiary of
EchoStar contained in or omitted from the Spin-Off/Merger Registration Statement
makes the statements contained therein false or misleading, EchoStar shall
promptly inform Xxxxxx and GM and promptly provide the information necessary to
make the statements contained therein not false and 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 Spin-Off/Merger Registration Statement makes the statements contained
therein false or misleading, Xxxxxx and GM shall promptly inform EchoStar and
promptly
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provide the information necessary to make the statements contained therein not
false and misleading. If at any time prior to the Merger Effective Time, any
information pertaining to PanAmSat or HSSL contained in or omitted from the
Spin-Off/Merger Registration Statement, to the knowledge of GM or Xxxxxx, makes
the statements contained therein false or misleading, GM or Xxxxxx shall
promptly inform the other and EchoStar and shall use commercially reasonable
efforts to promptly provide the information necessary to make the statements
contained therein not false and misleading.
(iii) EchoStar shall promptly furnish GM with all information
concerning EchoStar or any Subsidiary of EchoStar, as may be necessary or
reasonably requested by GM for inclusion in the GM Proxy/Consent Solicitation
Statement. Xxxxxx shall promptly furnish GM with all information concerning
Xxxxxx, any Subsidiary of Xxxxxx (other than PanAmSat and HSSL) and, to the
extent obtainable by GM or Xxxxxx using commercially reasonable efforts,
PanAmSat and HSSL, as may be necessary or reasonably requested by GM for
inclusion in the GM Proxy/Consent Solicitation Statement. GM and Xxxxxx shall
promptly furnish EchoStar with all information concerning GM, Xxxxxx, any
Subsidiary of Xxxxxx (other than PanAmSat and HSSL) and, to the extent
obtainable by GM or Xxxxxx using commercially reasonable efforts, PanAmSat and
HSSL, as may be necessary or reasonably requested for inclusion by EchoStar in
the GM Proxy/Consent Solicitation Statement. If at any time prior to the Merger
Effective Time, any information pertaining to EchoStar or any Subsidiary of
EchoStar contained in or omitted from the GM Proxy/Consent Solicitation
Statement makes the statements contained therein false or misleading, EchoStar
shall promptly inform GM and promptly provide the information necessary to make
the statements contained therein not false and 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 GM Proxy/Consent Solicitation Statement makes the statements contained
therein false or misleading, Xxxxxx shall promptly inform GM and EchoStar and
promptly provide the information necessary to make the statements contained
therein not false and misleading. If at any time prior to the Merger Effective
Time, any information pertaining to PanAmSat or HSSL contained in or omitted
from the GM Proxy/Consent Solicitation Statement, to the knowledge of GM or
Xxxxxx, makes the statements contained therein false or misleading, GM or Xxxxxx
shall promptly inform the other and EchoStar and use commercially reasonable
efforts to promptly provide the information necessary to make the statements
contained therein not false and misleading. If at any time prior to the Merger
Effective Time, any information pertaining to GM contained in or omitted from
the GM Proxy/Consent Solicitation Statement makes the statements contained
therein false or misleading, GM shall promptly inform EchoStar and promptly
provide the information necessary to make the statements contained therein not
false and misleading.
(iv) GM and Xxxxxx shall promptly furnish EchoStar with all
information concerning GM, Xxxxxx, any Subsidiary of Xxxxxx (other than PanAmSat
and HSSL) and, to the extent obtainable by GM or Xxxxxx using commercially
reasonable efforts, PanAmSat and HSSL, as may be necessary or reasonably
requested by EchoStar for inclusion in the EchoStar Information Statement. If at
any time prior to the Merger Effective Time, any information pertaining to GM,
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Xxxxxx or any Subsidiary of Xxxxxx (other than PanAmSat or HSSL) contained in or
omitted from the EchoStar Information Statement makes the statements contained
therein false or misleading, Xxxxxx and GM shall promptly inform EchoStar and
promptly provide the information necessary to make the statements contained
therein not false and misleading. If at any time prior to the Merger Effective
Time, any information pertaining to PanAmSat or HSSL contained in or omitted
from the EchoStar Information Statement, to the knowledge of GM or Xxxxxx, makes
the statements contained therein false or misleading, GM or Xxxxxx shall
promptly inform the other and EchoStar and shall use commercially reasonable
efforts to promptly provide the information necessary to make the statements
contained therein not false and misleading. If at any time prior to the Merger
Effective Time, any information pertaining to EchoStar contained in or omitted
from the EchoStar Information Statement makes the statements contained therein
false or misleading, EchoStar shall promptly inform GM and Xxxxxx and promptly
provide the information necessary to make the statements contained therein not
false and misleading.
(h) GM Debt/Equity Exchange.
(i) The parties acknowledge and agree that GM currently intends
to issue or distribute up to one hundred million (100,000,000) shares (subject
to appropriate antidilution adjustments and subject to reduction pursuant to the
provisions of Section 1.3 of the GM/Xxxxxx Separation Agreement and subject to
increase by up to an additional fifty million (50,000,000) shares (but in no
event shall such Exchange Shares exceed One Billion Dollars ($1,000,000,000.00)
in accordance with the terms set forth on Exhibit L) of GM Class H Common Stock
or Xxxxxx Class C Common Stock, as applicable, in one or more transactions (each
referred to individually as a "GM Debt/Equity Exchange" and referred to
collectively as the "GM Debt/Equity Exchange" or "GM Debt/Equity Exchanges," as
the context requires), between the date hereof and the date that is six (6)
months following the Spin-Off Effective Time, to holders of Exchange Debt in
exchange for such Exchange Debt. The parties acknowledge that any issuance of
shares of GM Class H Common Stock pursuant to any GM Debt/Equity Exchange shall
increase the Numerator (but not the Denominator) of the Class H Fraction (as
defined below) by the number of shares of GM Class H Common Stock so issued, in
accordance with the terms and provisions of the GM Certificate of Incorporation.
The parties shall cooperate with each other in all respects in connection with
any GM Debt/Equity Exchange and, without limiting the foregoing, EchoStar and
Xxxxxx shall use commercially reasonable efforts to take any actions reasonably
requested by GM in connection with the consummation of any GM Debt/Equity
Exchange, including, after the Merger Effective Time, the registration of offers
and sales of shares of Xxxxxx Class C Common Stock in accordance with the terms
set forth on Exhibit L attached hereto. For the purposes of this Agreement,
"Class H Fraction" means, as of any particular time, the fraction described in
Article Fourth, Division I, Section (a)(4) of the GM Certificate of
Incorporation as of such time.
(ii) The parties further acknowledge that GM currently intends to
register (or cause to be registered) the issuance of shares of GM Class H Common
Stock to be issued or the
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distribution of shares of Xxxxxx Class C Common Stock to be distributed, as
applicable, in connection with any GM Debt/Equity Exchange for purposes of
resale pursuant to a GM Debt/Equity Exchange Registration Statement. EchoStar
and Xxxxxx shall promptly furnish GM with all information concerning EchoStar,
any Subsidiary of EchoStar, Xxxxxx or any Subsidiary of Xxxxxx (other than
PanAmSat and HSSL) and, to the extent obtainable by Xxxxxx using commercially
reasonable efforts, PanAmSat and HSSL, as may be requested for inclusion in any
GM Debt/Equity Exchange Registration Statement. GM shall promptly furnish
EchoStar and Xxxxxx with all information concerning GM or any Subsidiary of GM
as may be requested for inclusion in any GM Debt/Equity Exchange Registration
Statement. If at any time prior to the consummation of any GM Debt/Equity
Exchange, any information pertaining to EchoStar, any Subsidiary of EchoStar,
Xxxxxx or any Subsidiary of Xxxxxx (other than PanAmSat or HSSL), contained in
or omitted from any GM Debt/Equity Exchange Registration Statement makes the
statements contained therein false or misleading, EchoStar and Xxxxxx shall
promptly inform GM and promptly provide the information necessary to make the
statements contained therein not false and misleading. If at any time prior to
the consummation of any GM Debt/Equity Exchange, any information pertaining to
PanAmSat or HSSL contained in or omitted from any GM Debt/Equity Exchange
Registration Statement, to the knowledge of Xxxxxx, makes the statements
contained therein false or misleading, Xxxxxx shall promptly inform GM and use
commercially reasonable efforts to promptly provide the information necessary to
make the statements contained therein not false and misleading. If at any time
after the Spin-Off Effective Time and prior to the consummation of any GM
Debt/Equity Exchange, any information pertaining to GM or any Subsidiary of GM
contained in or omitted from any GM Debt/Equity Exchange Registration Statement
makes the statements contained therein false or misleading, GM shall promptly
inform EchoStar and Xxxxxx and promptly provide the information necessary to
make the statements contained therein not false and misleading.
(i) Certain Transaction Costs. Except as otherwise provided in the
Transaction Agreements or any other agreement between or among the parties
relating to the GM Transactions and/or the Merger, and any of the other
transactions contemplated in connection therewith, but only if such other
agreement has been disclosed by Xxxxxx and GM to EchoStar, all costs and
expenses incurred by GM, Xxxxxx, EchoStar or their respective Affiliates in
connection with the GM Transactions and/or the Merger, and any of the other
transactions contemplated in connection therewith, shall be paid by the party
that actually incurs such costs and expenses. Notwithstanding the foregoing, the
responsibility for certain transaction costs relating to the GM Transactions and
the Merger shall be allocated in accordance with the provisions of this Section
5.1(i).
(i) The following costs and expenses incurred by GM, Xxxxxx,
EchoStar or any of their respective affiliates shall be paid (or promptly
reimbursed upon invoice) fifty percent (50%) by GM and fifty percent (50%) by
EchoStar: (i) all reasonable out-of-pocket costs and expenses of printing and
distributing to stockholders the GM Proxy/Consent Solicitation Statement, the
EchoStar Information Statement, any prospectus contained in the Spin-Off/Merger
Registration Statement and any related soliciting or other materials, (ii) all
filing fees associated with filing of the
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Spin-Off/Merger Registration Statement and the EchoStar Information Statement
with the SEC and any other state and foreign securities law regulators, and
(iii) all listing fees associated with listing the shares of stock subject to
the Spin-Off/Merger Registration Statement, the EchoStar Information Statement,
and any GM Debt/Equity Exchange Registration Statement on the NYSE or for
quotation on the Nasdaq.
(ii) Xxxxxx shall pay (or promptly reimburse upon invoice) the
following:
(A) all costs and expenses of Xxxxxx, XX or any of their respective
affiliates relating primarily to the Merger, including all fees associated
with making any governmental or regulatory filings primarily in connection
with the Merger and the fees and expenses of the Xxxxxx transfer agent (or
any successor transfer agent) but excluding any fees and expenses described
in Section 5.1(i)(iii)(B); and
(B) the fees and expenses of Xxxxxxx, Xxxxx & Co. and Credit Suisse
First Boston Corporation, financial advisors to Xxxxxx in connection with
the Merger, and the fees and expenses of Weil, Gotshal & Xxxxxx LLP and
Xxxxxx & Xxxxxxx, legal advisors to Xxxxxx, and any other legal advisors to
Xxxxxx (in each case for legal services rendered to Xxxxxx), in connection
with the Merger.
(iii) GM or a GM Affiliate shall pay (or promptly reimburse upon
invoice) the following:
(A) all costs and expenses of GM, Xxxxxx or any of their respective
affiliates relating primarily to the GM Transactions, including the fees
and expenses of the GM transfer agent and any proxy or consent solicitation
agents, information agents or similar consultants or agents engaged by GM
in connection with effecting the GM Transactions but excluding any fees and
expenses described in Section 5.1(i)(ii)(B);
(B) the fees and expenses of Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated and Bear, Xxxxxxx & Co. Inc., financial advisors to GM in
connection with the GM Transactions, and Xxxxxxxx & Xxxxx and Xxxxxxxx,
Xxxxxx & Finger, legal advisors to GM, and any other legal advisors to GM
(in each case for legal services rendered to GM), in connection with the GM
Transactions;
(C) the fees and expenses incurred by Xxxxxx and GM in connection with
the negotiation and documentation of any Demand Note; and
(D) the fees, costs, and expenses incurred by Xxxxxx or GM in
connection with the Pre-Merger Finance (as defined in the Commitment
Letter).
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(j) No Solicitation.
(i) GM 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,
investment bankers, attorneys, accountants, agents or other advisors or
representatives (collectively, "Representatives"), directly or indirectly, to:
(A) 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 be expected to lead to, a proposal
for any merger, consolidation or other business combination involving
Xxxxxx, or any acquisition of any capital stock or any material portion of
the assets (except for (I) acquisitions of assets in the ordinary course of
business consistent with past practice and permitted by Section 5.3(a)(v)
of the Merger Agreement and (II) consummation of the transactions
contemplated by the EchoStar Transaction Agreements, the GM Transaction
Agreements and the Xxxxxx Transaction Agreements) of Xxxxxx or any of its
Subsidiaries, any GM Class H Common Stock or any combination of the
foregoing (in each case, a "Competing Transaction");
(B) 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;
(C) grant any waiver or release under any standstill or similar
agreement with respect to Xxxxxx or any of its Subsidiaries or GM Class H
Common Stock; or
(D) 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:
(I) at any time prior to such time, if any, that the Requisite
Stockholder Approval shall have been received with respect to the GM
Transactions, GM may take any action described in the foregoing
clauses (B) or (C) (in the case of clause (C), only to the extent
necessary to permit the discussions or negotiations contemplated by
clause (B)) 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
(as defined below) and (2) the Board of Directors
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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 furnishing any confidential
information to such Person, such Person shall have entered into a
confidentiality agreement with GM and/or Xxxxxx, provided that if such
confidentiality agreement contains provisions that are less
restrictive than the comparable provisions, or omits restrictive
provisions, contained in the Confidentiality Agreement (as defined in
the Merger Agreement), then the Confidentiality Agreement will be
deemed to be amended to contain, in substitution for such comparable
provisions, such less restrictive provisions, or to omit such
restrictive provisions, as the case may be, (y) GM shall promptly
notify EchoStar 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 EchoStar reasonably informed as to
the status thereof,
(II) GM may enter into any agreement or arrangement (other than a
confidentiality agreement, which may be entered into as contemplated
in clause (I) above) 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 it has first (1) given EchoStar at
least seventy-two (72) hours to respond to such Competing Transaction
after GM has notified EchoStar that, in the absence of any further
action by EchoStar, it would consider such Competing Transaction to be
a Superior Proposal and would be required to withdraw, revoke or
modify its recommendation of the GM Transactions, and given due
consideration to any amendments or modifications to the GM Transaction
Agreements, the Xxxxxx Transaction Agreements and/or the EchoStar
Transaction Agreements proposed by EchoStar during such period and (2)
thereafter caused Xxxxxx to terminate the Merger Agreement in
accordance with Section 7.1 thereof and simultaneously pay the
Termination Fee pursuant to Section 7.2 thereof; and
(III) 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.
(ii) For the purposes of this Agreement, the following terms
shall have the following meanings:
(A) "Superior Proposal" shall mean a bona fide, written proposal by a
third-party for a Competing Transaction that is on terms that the GM Board
of Directors determines in
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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
GM Transactions and the Merger; and
(B) "Applicable Law" shall mean all applicable laws, statutes, orders,
rules, regulations, policies or guidelines promulgated, or judgments,
decisions or orders entered, by any Governmental Authority.
(iii) GM 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. EchoStar
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.
(k) Public Announcements.
(i) Unless otherwise required by Applicable Law or requirements
of the NYSE or Nasdaq or any other applicable securities exchange (and in that
event only if time does not permit), at all times prior to the earlier of (A)
the Merger Effective Time, (B) the termination of this Agreement pursuant to
Section 8.1, and (C) any delivery by GM to EchoStar of a Notice of Non-
Recommendation (unless GM has subsequently delivered a Notice of Proposed
Mailing or a Withdrawal Notice prior to the termination of this Agreement
pursuant to Section 8.1), 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
GM Transaction Agreements, the Xxxxxx Transaction Agreements or the EchoStar
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 the Merger, the GM Transactions and the
other transactions contemplated by the GM Transaction Agreements, the Xxxxxx
Transaction Agreements and the EchoStar Transaction Agreements will be a joint
press release. Without limiting the foregoing, at all times prior to the earlier
of (A) the Merger Effective Time or (B) the termination of this Agreement
pursuant to Section 8.1, each of the parties hereto shall use commercially
reasonable 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.
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(ii) In addition, at all times prior to the Merger Effective
Time, the parties hereto shall consult with each other before filing any report
with respect to any period entirely or partially prior to the Merger Effective
Time required by or filed under the Securities Act or Exchange Act containing
any statement relating to the transactions and matters contemplated by the GM
Transaction Agreements, the Xxxxxx Transaction Agreements or the EchoStar
Transaction Agreements and shall not file any such report prior to such
consultation.
(l) Xxxxxx Reorganization.
(i) The parties acknowledge and agree that GM and Xxxxxx may,
prior to the Spin-Off Effective Time, on terms reasonably acceptable to EchoStar
(whose agreement will not be unreasonably withheld or delayed) implement a
corporate reorganization in connection with any GM Debt/Equity Exchange (the
"Xxxxxx Reorganization"), which would result in the creation of a holding
company (organized as a Delaware corporation) that would exist above Xxxxxx as a
parent company and below GM as a wholly owned subsidiary ("Xxxxxx Holdings"). As
a result of the Xxxxxx Reorganization, the holder of Common Stock, par value
$0.01 per share, of Xxxxxx would become the holder of Common Stock, par value
$0.01 per share, of Xxxxxx Holdings and the holder of Xxxxxx Series A Preferred
Stock would become the holder of Series A Preferred Stock, par value $0.10 per
share, of Xxxxxx Holdings.
(ii) Upon the reasonable request of any party hereto, subject to
the agreement of each of the parties (whose agreement will not be unreasonably
withheld or delayed), the parties shall promptly amend and restate any or all of
the GM Transaction Agreements, the Xxxxxx Transaction Agreements and the
EchoStar Transactions Agreements, and each and all of the other agreements
contemplated thereby (including, in each case, all exhibits, schedules and other
attachments thereto), to the extent appropriate in order to reflect the
implementation of the Xxxxxx Reorganization and the matters addressed in this
Section 5.1(l), and the parties hereby agree to execute and deliver any such
amendment and restatement of any or all of such agreements prior to the
implementation of the Xxxxxx Reorganization.
(m) EchoStar Securities Issuances.
(i) The parties acknowledge and agree that EchoStar, in
accordance with Section 5.2(a)(i) of the Merger Agreement, currently intends to
issue shares of EchoStar Class A Common Stock, debt securities or securities
convertible into or exchangeable therefor, in one or more transactions (each
referred to individually as a "EchoStar Securities Issuance" and referred to
collectively as the "EchoStar Securities Issuances" as the context requires),
between the date hereof and the Merger Effective Time. From the date hereof
until the earlier of (x) the Merger Effective Time and (y) the termination of
this Agreement, the parties shall cooperate with each other in all respects in
connection with any EchoStar Securities Issuance and, without limiting the
foregoing,
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GM and Xxxxxx shall use commercially reasonable efforts to take any actions
reasonably requested by EchoStar in connection with the consummation of any
EchoStar Securities Issuance.
(ii) The parties acknowledge that EchoStar may register the
issuance of the securities of EchoStar to be issued in connection with any
EchoStar Securities Issuance or may issue such securities in one or more
transactions that are exempt from the registration requirements of the
Securities Act. Any registration statement, offering memorandum or offering
circular relating to an EchoStar Securities Issuance is referred to herein as a
"EchoStar Securities Disclosure Document"). GM and Xxxxxx shall promptly furnish
EchoStar with all information concerning GM, Xxxxxx, any Subsidiary of Xxxxxx
(other than PanAmSat and HSSL) and, to the extent obtainable by GM or Xxxxxx
using commercially reasonable efforts, PanAmSat and HSSL, as may be reasonably
requested by EchoStar for inclusion in any EchoStar Securities Disclosure
Document. If at any time after the date hereof until the earlier of the (x)
Merger Effective Time and (y) the termination of this Agreement, any information
pertaining to GM, Xxxxxx or any Subsidiary of Xxxxxx (other than PanAmSat or
HSSL) contained in or omitted from the EchoStar Securities Disclosure Document
makes such statements contained therein false or misleading, Xxxxxx and GM shall
promptly inform EchoStar and promptly provide the information necessary to make
the statements contained therein not false and misleading. If, at any time after
the date hereof until the earlier of the (x) Merger Effective Time and (y) the
termination of this Agreement, any information pertaining to PanAmSat or HSSL
contained in or omitted from the EchoStar Securities Disclosure Document, to the
knowledge of GM or Xxxxxx, makes such statements contained therein false or
misleading, GM or Xxxxxx shall promptly inform the other and EchoStar and shall
use commercially reasonable efforts to promptly provide the information
necessary to make the statements contained therein not false and misleading.
(iii) EchoStar shall cause the entire net proceeds of any and
all EchoStar Securities Issuances to be held directly by EchoStar (rather than
any Subsidiary of EchoStar) at the Merger Effective Time.
(n) Recapitalization Debt Repayment. For a period of two (2) years
after the Merger Effective Time, Xxxxxx and EchoStar shall cause the portion of
the Merger Financing that will be incurred by Xxxxxx prior to the Spin-Off
Effective Time for the purpose of financing a portion of the Recapitalization
Amount (the "Recapitalization Debt") either to remain outstanding as debt of
Xxxxxx, or to be refinanced by new indebtedness of equal principal amount
incurred by Xxxxxx or DTV Enterprises LLC ("Refinancing Debt"), except to the
extent that the Recapitalization Debt or any Refinancing Debt is repaid during
such two (2)-year period from operating cash flow of Xxxxxx and its Subsidiaries
or from the proceeds of sale of one or more assets that were held by Xxxxxx and
its Subsidiaries prior to the Merger Effective Time.
(o) No Further Holding Company. Until the earlier of (i) six months
after the Merger Effective Time and (ii) the date on which GM has completed
Debt/Equity Exchanges for the
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full amount of Exchange Shares permitted hereunder, Xxxxxx (or if Xxxxxx
Holdings is formed prior to the Spin-Off Effective Time in accordance with
Section 5.1(l), Xxxxxx Holdings) shall not engage in any transaction that would
cause Xxxxxx (or, if Xxxxxx Holdings is so formed, Xxxxxx Holdings) to cease to
be the ultimate parent corporation of the group.
(p) Xxxxxx Stockholder Rights Plan. Xxxxxx shall adopt a
stockholder rights plan, effective as of the Spin-Off Effective Time, in a form
to be mutually agreed among the parties hereto.
Section 5.2. Covenants of GM and Xxxxxx.
(a) Amendments to and Termination of the GM Transaction Agreements
and Certain Other Agreements. Each of GM and Xxxxxx agrees that, prior to the
Merger Effective Time, it will, subject to the provisions of the immediately
following sentence, consult with EchoStar regarding any change, amendment or
waiver that is proposed to be made to any of the GM Transaction Agreements, the
Xxxxxx Transaction Agreements or any of the other agreements contemplated
thereby. During such period, no changes or amendments will be made to such
agreements, or waivers of rights under such agreements, without the written
consent of EchoStar, unless such changes or amendments, taken together with all
other changes and amendments (i) could not reasonably be foreseen to have an
adverse effect on the business, assets, liabilities or financial condition of
Xxxxxx and (ii) do not shift responsibility for any 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 or 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 GM Transactions or the Merger. Each
of GM and Xxxxxx agrees that 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 in connection with the termination of this Agreement, the GM/Xxxxxx
Separation Agreement or the Merger Agreement (each of which may be terminated in
accordance with its terms), without the written consent of EchoStar. Each of GM
and Xxxxxx shall promptly provide to EchoStar a copy of any amendment to any of
the GM Transaction Agreements or Xxxxxx Transaction Agreements.
(b) Director and Officer Insurance.
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(i) Claims-Made Coverage. Until the six (6) year anniversary of
the Spin-Off Effective Time, or until such earlier time as Xxxxxx requests, GM
shall provide directors' and officers' liability insurance ("D&O Insurance")
covering each Xxxxxx Covered Person for all applicable incidents, acts or
omissions occurring prior to the Spin-Off Effective Time, regardless of when,
prior to the six (6) year anniversary of the Spin-Off Effective Time (or Xxxxxx'
earlier termination of coverage), any claims relating to such incidents, acts or
omissions are presented. Except as set forth in 5.2(b)(iv), GM shall provide
such coverage at no cost to Xxxxxx. Such insurance coverage shall be no less
favorable to any Xxxxxx Covered Person in coverage or amount than the lesser of
(A) the coverage in effect at the Spin-Off Effective Time or (B) any applicable
insurance coverage in effect for GM at the time of the claim; provided, however,
that with respect to clause (B) above, if GM determines that (x) the amount or
scope of such coverage will be reduced to a level materially inferior to the
level of coverage in existence immediately prior to the Spin-Off Effective Time
or (y) the retention or deductible levels applicable to such coverage, if any,
will be increased to a level materially greater than the levels in existence
immediately prior to the Spin-Off Effective Time, GM shall give Xxxxxx notice of
such determination as promptly as practicable, but in no event less than thirty
(30) days prior to the effectiveness of such reduction in coverage or increase
in retention or deductible levels. Upon notice of such determination, Xxxxxx
shall be entitled to no less than ninety (90) days to evaluate its options
regarding continuance of coverage hereunder and may cancel all or any portion of
such coverage as of any day within such ninety (90) day period, regardless of
whether such date coincides with any anniversary of the Spin-Off Effective Time.
At any time during the period that GM is obligated to provide coverage pursuant
to this Section 5.2(b)(i), upon at least thirty (30) days prior written notice,
Xxxxxx may request GM to cancel all or any portion of such coverage as of the
next anniversary of the Spin-Off Effective Time. In the event of any
cancellation of coverage by Xxxxxx pursuant to this Section 5.2(b)(i), GM shall
have no obligation to provide such canceled coverage with respect to any period
from and after the effective date of such termination. The term "coverage" as
used in this Section 5.2(b) shall be deemed to include all applicable excess
coverage. For the purposes of this Agreement, (I) "Xxxxxx Covered Person" means
each individual who served at any time within the six (6) year period prior to
the Spin-Off Effective Time as a director, director nominee or officer of
Xxxxxx, any Xxxxxx Affiliate or any corporation to which Xxxxxx is a successor,
in each case to the extent covered by a particular GM Insurance Policy (as
defined below) providing D&O Insurance coverage; and (II) "GM Insurance Policy"
means any policy of insurance maintained by GM or any GM Affiliate prior to the
Spin-Off Effective Time.
(ii) Occurrence Coverage for Prior Acts. GM shall take no action
to remove any Xxxxxx Covered Person from D&O Insurance coverage under any GM
Insurance Policy effective at, or at any time prior to, the Spin-Off Effective
Time that is written on an occurrence basis.
(iii) Claims. With respect to any claims for incidents, acts or
omissions occurring prior to or at the Spin-Off Effective Time, for which any
Xxxxxx Covered Person may be
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entitled to assert a claim for recovery under any GM Insurance Policy providing
D&O Insurance coverage in accordance with the terms thereof, GM, at the request
of Xxxxxx, shall use commercially reasonable efforts in asserting, or assisting
Xxxxxx in asserting, such claims under any such GM Insurance Policy providing
D&O Insurance coverage; provided, that in all cases (A) Xxxxxx shall promptly
pay or reimburse GM for all costs and expenses incurred by GM in connection with
such claims (whether such claims were made before or are made after the Spin-Off
Effective Time), including retrospective premium adjustments to the extent
attributable to such claims, (B) to the full extent permitted by contract and
law, the control and administration of such GM Insurance Policies providing D&O
Insurance coverage, including with respect to any proposed buyouts of such GM
Insurance Policies, shall remain with GM, (C) such claims shall be subject to
(and recovery thereon shall be reduced by the amount of) any applicable
deductibles, retentions, self-insurance provisions or any payment or
reimbursement obligations of GM or any GM Affiliate in respect thereof, (D) with
respect to claims-made GM Insurance Policies, such claims must have been
incurred and reported prior to the Spin-Off Effective Time to the extent
required by such policies and (E) Xxxxxx shall promptly report to GM any such
claims. GM (or, in the event that the primary economic burden is to be borne by
Xxxxxx by virtue of deductibles, retentions and retrospective premium
adjustments, GM and Xxxxxx) and GM's insurers shall have the right to control
the investigation, defense and settlement of claims, but no such settlement may
be effected without the consent of Xxxxxx, which consent shall not be
unreasonably withheld or delayed, unless such settlement includes as an
unconditional term thereof the delivery of a written release of Xxxxxx and any
other insured parties from all liability in respect of such claim.
(iv) Treatment of Certain Retentions and Deductibles.
Responsibility for deductible and self-insured amounts with respect to any GM
Insurance Policy providing D&O Insurance coverage provided or maintained after
the Spin-Off Effective Time pursuant to Section 5.2(b)(i) or 5.2(b)(ii) as it
relates to coverage for any Xxxxxx Covered Person shall be borne one hundred
percent (100%) by Xxxxxx. Notwithstanding the foregoing, if GM and Xxxxxx are
involved in the same claim, GM and Xxxxxx shall negotiate in good faith the fair
allocation of any self-insurance retention or other deductible payable under the
GM Insurance Policies providing D&O Insurance coverage. Such allocation shall be
based upon all relevant factors, including, without limitation and as
appropriate, the relative number of Persons affiliated with Xxxxxx or GM that
are involved in such claim and the nature of the allegations with respect to
each such Person.
(v) Adjustment of Premiums Applicable to Period Prior to the
Spin-Off Merger Effective Time. Any premiums that have been paid or are payable
by Xxxxxx to GM with respect to D&O Insurance coverage under any of the GM
Insurance Policies maintained or provided prior to the Spin-Off Effective Time
shall be pro-rated, and as soon as practicable after the Spin-Off Effective Time
shall be either refunded by GM to Xxxxxx or paid by Xxxxxx to GM, as
appropriate, so that Xxxxxx is responsible for only those premiums relating to
(A) any full policy year ending prior to the Spin-Off Effective Time and (B) the
partial policy year ending at the Spin-Off Effective Time.
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(c) Letters of Accountants.
(i) To the extent applicable as a result of any requirement to
include their respective financial statements in the Spin-Off/Merger
Registration Statement, GM and Xxxxxx shall use commercially reasonable efforts
to cause to be delivered to EchoStar 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 the
Spin-Off/Merger Registration Statement shall become effective, addressed to
EchoStar 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 Spin-Off/Merger Registration Statement.
(ii) To the extent applicable as a result of any requirement to
include their respective financial statements in the EchoStar Information
Statement, GM and Xxxxxx shall use commercially reasonable efforts to cause to
be delivered to EchoStar to the extent permitted by applicable accounting
standards in connection with the EchoStar Information Statement two (2) letters
from the independent accountants of each of GM and Xxxxxx, one dated a date
within two (2) Business Days before the date on which the registration
statement(s) containing the EchoStar Information Statement shall become
effective and one dated a date within two (2) Business Days before the date on
which the EchoStar Information Statement is mailed to EchoStar's stockholders,
in each case addressed to EchoStar and its Board of Directors, customary in form
and scope for comfort letters delivered by independent public accountants in
connection with registration statements and information statements similar to
the EchoStar Information Statement.
(d) Pre-Closing Cooperation. GM and Xxxxxx promptly shall furnish
EchoStar with all information concerning each of them as may reasonably be
requested by EchoStar for use by Xxxxxxxx & Xxxxxxxx, special counsel to
EchoStar, in preparing its tax opinion to the effect that the Merger qualifies
as a reorganization pursuant to Section 368(a) of the Code (the "EchoStar
Section 368 Opinion"). GM and Xxxxxx shall provide EchoStar with such
representations and warranties as may reasonably be requested by EchoStar with
respect to the EchoStar Section 368 Opinion.
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(e) GM Sale Process Claims.
(i) EACH OF GM AND XXXXXX, ON BEHALF OF ITSELF AND THE GM
AFFILIATES AND THE XXXXXX AFFILIATES, RESPECTIVELY, ACKNOWLEDGES AND AGREES
THAT, EXCEPT FOR THE EXPRESS REPRESENTATIONS, WARRANTIES AND COVENANTS OF
ECHOSTAR SET FORTH IN THIS AGREEMENT, THE MERGER AGREEMENT OR ANY OF THE
AGREEMENTS CONTEMPLATED HEREBY OR THEREBY (INCLUDING THE TRANSACTION
AGREEMENTS), ECHOSTAR MAKES NO REPRESENTATION, WARRANTY OR COVENANT WHATSOEVER,
EXPRESS OR IMPLIED, IN CONNECTION WITH THIS AGREEMENT, THE MERGER AGREEMENT OR
ANY OF THE AGREEMENTS OR TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (INCLUDING
THE TRANSACTION AGREEMENTS). Each of GM and Xxxxxx, on behalf of itself and the
GM Affiliates and the Xxxxxx Affiliates, respectively, represents and warrants
to EchoStar that in making its determination to enter into, and to proceed with
the transactions contemplated by this Agreement, the Merger Agreement or any of
the agreements or transactions contemplated hereby or thereby (including the
Transaction Agreements), it has not relied on and will not rely on any
representation, warranty or covenant of EchoStar or any EchoStar Affiliate, or
of any of their respective Representatives, other than the express
representations, warranties and covenants of EchoStar set forth in this
Agreement or any of the agreements contemplated hereby to which each of
EchoStar, on the one hand, and GM or Xxxxxx on the other hand, is a party
(including the other Transaction Agreements).
(ii) Other than with respect to any claim based on a breach by
EchoStar of any of the Transaction Agreements to which EchoStar is a party, each
of GM and Xxxxxx, on behalf of itself and the GM Affiliates and the Xxxxxx
Affiliates, respectively, hereby waives, releases and forever discharges any and
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 or in
equity, whether related to, arising out of or due to occurrences or conditions
prior to, on or after the Merger Effective Time, and whether known or unknown,
suspected, or claimed) against EchoStar or any EchoStar Affiliate or any of
their respective Representatives which any of GM, any GM Affiliate, Xxxxxx or
any Xxxxxx Affiliate may have to the extent related to, arising out of or due
to, directly or indirectly, the investigation, consideration or pursuit
(including the adequacy of disclosures to and due diligence of GM, Xxxxxx or
any unaffiliated Persons and including any allegations of breach of fiduciary
duty with respect to the transactions contemplated by this Agreement and the
Merger Agreement) of one or more strategic business combination transactions
involving EchoStar or any EchoStar Affiliate, and one or more unaffiliated
Persons (any such claim, a "GM Sale Process Claim"), except to the extent that
any of GM or Xxxxxx hereafter incurs any Losses (as defined below) in respect
thereof arising out of a Third-Party Claim (as defined below). For the purposes
of this Agreement, "Losses" means any
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losses, liabilities, claims, obligations, Taxes (as defined below), demands,
judgments, damages, dues, penalties, assessments, fines (civil or criminal),
costs, liens, expenses, forfeitures, settlements or fees, attorneys' fees and
court costs or other expenses, of any nature or kind, whether or not the same
would properly be reflected on a balance sheet.
(iii) Other than with respect to any claim based on a breach by
EchoStar of any of the Transaction Agreements to which EchoStar is a party, each
of GM and Xxxxxx agrees that it shall not, and shall cause the GM Affiliates and
the Xxxxxx Affiliates, respectively, not to, seek to recover from EchoStar or
any EchoStar Affiliate or any of their respective Representatives any Losses to
the extent that such Losses relate to, arise out of or are due to a GM Sale
Process Claim unless and until such time, and only to the extent that, any of GM
or Xxxxxx incurs any Losses in respect thereof arising out of a Third-Party
Claim.
(f) Xxxxxx Sale Process Claims.
(i) XXXXXX, ON BEHALF OF ITSELF AND EACH XXXXXX AFFILIATE,
RESPECTIVELY, ACKNOWLEDGES AND AGREES THAT, EXCEPT FOR THE EXPRESS
REPRESENTATIONS, WARRANTIES AND COVENANTS OF GM SET FORTH IN THIS AGREEMENT, THE
GM/XXXXXX SEPARATION AGREEMENT OR ANY OF THE AGREEMENTS CONTEMPLATED HEREBY OR
THEREBY (INCLUDING THE TRANSACTION AGREEMENTS), GM MAKES NO REPRESENTATION,
WARRANTY OR COVENANT WHATSOEVER, EXPRESS OR IMPLIED, IN CONNECTION WITH THIS
AGREEMENT, THE GM/XXXXXX SEPARATION AGREEMENT, THE MERGER AGREEMENT OR ANY OF
THE AGREEMENTS OR TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (INCLUDING THE
TRANSACTION AGREEMENTS). Xxxxxx, on behalf of itself and each Xxxxxx Affiliate,
respectively, represents and warrants to GM that in making its determination to
enter into, and to proceed with the transactions contemplated by, this
Agreement, the GM/Xxxxxx Separation Agreement, the Merger Agreement and each of
the agreements contemplated hereby and thereby (including the Transaction
Agreements), it has not relied on and will not rely on any representation,
warranty or covenant of GM, any GM Affiliate, or any Representative of GM or any
GM Affiliate, other than the express representations, warranties and covenants
of GM set forth in this Agreement, the GM/Xxxxxx Separation Agreement or any of
the agreements contemplated hereby or thereby to which Xxxxxx and GM are each a
party (including the Transaction Agreements).
(ii) Other than with respect to any claim based on a breach by GM
of any of the Transaction Agreements to which GM is a party, Xxxxxx, on behalf
of itself and each Xxxxxx Affiliate, hereby waives, releases and forever
discharges any and 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
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related to, arising out of, or due to occurrences or conditions prior to, on or
after the Spin-Off Effective Time, and whether known or unknown, suspected, or
claimed) against GM, any GM Affiliate or any of their respective Representatives
which Xxxxxx or any Xxxxxx Affiliate may have to the extent related to, arising
out of or due to, directly or indirectly, the investigation, consideration or
pursuit (including the adequacy of disclosure by and due diligence of GM, Xxxxxx
or any unaffiliated Persons and including any allegations of breach of fiduciary
duty with respect to the transactions contemplated by this Agreement and the
Merger Agreement) of one or more strategic business combination transactions
involving Xxxxxx or any Xxxxxx Affiliate and one or more unaffiliated Persons
(any such claim, a "Xxxxxx Sale Process Claim"), except to the extent that
Xxxxxx hereafter incurs any Losses in respect thereof arising out of a Third-
Party Claim.
(iii) Other than with respect to any claim based on a breach by
GM of the Transaction Agreements to which GM is a party, Xxxxxx agrees that it
shall not, and shall cause each Xxxxxx Affiliate not to, seek to recover from
GM, any GM Affiliate or any of their respective Representatives any Losses, to
the extent that such Losses relate to, arise out of or are due to, directly or
indirectly, any Xxxxxx Sale Process Claim unless and until such time, and only
to the extent that, Xxxxxx incurs any Losses in respect thereof arising out of a
Third-Party Claim.
(g) GM-Xxxxxx Sale Process Claims.
(i) GM, ON BEHALF OF ITSELF AND EACH GM AFFILIATE, RESPECTIVELY,
ACKNOWLEDGES AND AGREES THAT, EXCEPT FOR THE EXPRESS REPRESENTATIONS, WARRANTIES
AND COVENANTS OF XXXXXX SET FORTH IN THIS AGREEMENT, THE GM/XXXXXX SEPARATION
AGREEMENT OR ANY OF THE AGREEMENTS CONTEMPLATED HEREBY OR THEREBY (INCLUDING THE
TRANSACTION AGREEMENTS), XXXXXX MAKES NO REPRESENTATION, WARRANTY OR COVENANT
WHATSOEVER, EXPRESS OR IMPLIED, IN CONNECTION WITH THIS AGREEMENT, THE GM/XXXXXX
SEPARATION AGREEMENT, THE MERGER AGREEMENT OR ANY OF THE AGREEMENTS OR
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (INCLUDING THE TRANSACTION
AGREEMENTS). GM, on behalf of itself and each GM Affiliate, respectively,
represents and warrants to Xxxxxx that in making its determination to enter
into, and to proceed with the transactions contemplated by, this Agreement, the
GM/Xxxxxx Separation Agreement, the Merger Agreement and each of the agreements
contemplated hereby and thereby (including the Transaction Agreements), it has
not relied on and will not rely on any representation, warranty or covenant of
Xxxxxx, any Xxxxxx Affiliate, or any Representative of Xxxxxx or any Xxxxxx
Affiliate, other than the express representations, warranties and covenants of
Xxxxxx set forth in this Agreement, the GM/Xxxxxx Separation Agreement or any of
the agreements contemplated hereby or thereby to which GM and Xxxxxx are each a
party (including the Transaction Agreements).
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(ii) Other than with respect to any claim based on a breach by
Xxxxxx of the Transaction Agreements to which Xxxxxx is a party, GM, on behalf
of itself and each GM Affiliate, hereby waives, releases and forever discharges
any and 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 Spin-Off Effective Time, and whether known or unknown,
suspected, or claimed) against Xxxxxx, any Xxxxxx Affiliate or any of their
respective Representatives which GM or any GM Affiliate may have to the extent
related to, arising out of or due to, directly or indirectly, the investigation,
consideration or pursuit (including the adequacy of disclosure by and due
diligence of Xxxxxx, XX or any unaffiliated Persons and including any
allegations of breach of fiduciary duty with respect to the transactions
contemplated by this Agreement and the Merger Agreement) of one or more
strategic business combination transactions involving Xxxxxx or any Xxxxxx
Affiliate and one or more unaffiliated Persons (any such claim, a "GM-Xxxxxx
Sale Process Claim"), except to the extent that GM hereafter incurs any Losses
in respect thereof arising out of a Third-Party Claim.
(iii) Other than with respect to any claim based on a breach by
Xxxxxx of the Transaction Agreements to which Xxxxxx is a party, GM agrees that
it shall not, and shall cause each GM Affiliate not to, seek to recover from
Xxxxxx, any Xxxxxx Affiliate or any of their respective Representatives any
Losses, to the extent that such Losses relate to, arise out of or are due to,
directly or indirectly, any GM-Xxxxxx Sale Process Claim unless and until such
time, and only to the extent that, GM incurs any Losses in respect thereof
arising out of a Third-Party Claim.
(h) Remaining Shares. In the event that either (i) the IRS requires,
as a condition to the issuance of the Ruling, that GM distribute all or any of
the Remaining Shares (as defined below) in the Spin-Off to the holders of the GM
$1-2/3 Common Stock or (ii) in connection with the Ruling Request, the IRS does
not issue a ruling to the effect that GM may retain and subsequently dispose of
the Remaining Shares, under conditions acceptable to GM in its sole and absolute
discretion, in a manner that will not cause the retention and disposition of the
Remaining Shares to be treated as part of a Section 355(e) Plan (as defined
below) that includes the GM Transactions and the Merger (a "Remaining Shares
Section 355(e) Ruling"), then GM shall distribute in the Spin-Off to the holders
of the GM $1-2/3 Common Stock (the "Remaining Shares Distribution") (A) in the
case of clause (i) above, all or the specified portion of the Remaining Shares
and (B) in the case of clause (ii) above, such number of the Remaining Shares
(up to the number of Remaining Shares then held by GM) as is necessary to allow
the condition contained in Section 6.1(h) of the Merger Agreement to be
satisfied. If the IRS issues a Remaining Shares Section 355(e) Ruling, then GM
may, in its sole and absolute discretion, retain, distribute or otherwise
dispose of or deal with the Remaining Shares; provided that GM shall comply with
any condition imposed by the IRS, in connection with the Ruling or the Remaining
Shares Section 355(e) Ruling, that relates to the Remaining Shares. For the
purposes of this Agreement, "Remaining Shares" means those shares of
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Xxxxxx Class C Common Stock, if any, held by GM immediately prior to the Spin-
Off Effective Time that (I) will not be distributed by GM to the holders of the
GM Class H Common Stock in the Spin-Off and (II) will not be transferred in any
GM Debt/Equity Exchange.
(i) Solvency Opinion. Prior to the Xxxxxx Recapitalization, Xxxxxx
shall use commercially reasonable efforts to seek an opinion of Xxxxxxxx Xxxxx
Xxxxxx & Xxxxx (the "Solvency Opinion"), a copy of which shall be provided to
EchoStar, if requested, regarding Xxxxxx' ability to declare the dividend
contemplated by the Xxxxxx Recapitalization.
(j) Certain Merger Agreement Covenants. GM shall use commercially
reasonable efforts to take all actions in its capacity as the sole stockholder
of Xxxxxx to allow Xxxxxx to comply with Xxxxxx' covenant in Section 5.3(a)(iv)
of the Merger Agreement. Except as expressly contemplated by any of the GM
Transaction Agreements, Xxxxxx Transaction Agreements or EchoStar Transaction
Agreements, GM shall not take any action in respect of Xxxxxx that, if taken by
Xxxxxx, would cause Xxxxxx to violate the covenants set forth in Sections
5.3(a)(iii), (v), (vi), (vii), (ix), (x), (xi) or (xiii) of the Merger
Agreement.
(k) GM Class H Common Stock. From and after the date hereof until
immediately prior to the Spin-Off Effective Time, except for (i) following the
effectiveness of the GM Charter Amendment, reducing the Denominator of the Class
H Fraction as contemplated by Section 1.1(b) of the GM/Xxxxxx Separation
Agreement, (ii) increasing the Numerator and the Denominator of the Class H
Fraction to include such number of shares of GM Class H Common Stock issued in
the event that shares are issued as a result of the conversion of the GM Series
H Preference Stock into GM Class H Common Stock, (iii) increasing the Numerator
and the Denominator of the Class H Fraction as a result of the grant and/or
exercise of employee stock options as provided in the GM Certificate of
Incorporation, (iv) adjusting the Numerator and the Denominator of the Class H
Fraction to reflect changes during the applicable quarterly accounting period
due to the passage of time and (v) increasing the Numerator of the Class H
Fraction to include the number of shares of GM Class H Common Stock issued as a
result of any GM Debt/Equity Exchange, and except as contemplated by the
Transaction Agreements and the transactions contemplated thereby, (A) GM shall
not adjust the Numerator or the Denominator of the Class H Fraction or take any
actions that would require it to do so and (B) GM shall not do or effect any of
the following actions with respect to the GM Class H Common Stock: (I) adjust,
split, combine, recapitalize or reclassify the GM Class H Common Stock, (II)
make, declare or pay any dividend or distribution on, or directly or indirectly
redeem, purchase or otherwise acquire, any shares of GM Class H Common Stock or
any securities or obligations convertible into or exchangeable for shares of GM
Class H Common Stock, (III) grant any Person any right or option to acquire any
shares of GM Class H Common Stock other than grants in accordance with, and to
the extent permitted by Xxxxxx pursuant to, Section 5.1(j) of the Merger
Agreement, (IV) issue, deliver or sell or agree to issue, deliver or sell any
additional shares of GM Class H Common Stock or any securities or obligations
convertible into or exchangeable for any shares of GM Class H Common Stock
(except
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pursuant to the exercise of outstanding options and options issued after the
date hereof in accordance with, and to the extent permitted by Xxxxxx pursuant
to, Section 5.1(j) of the Merger Agreement) or (V) enter into any agreement,
understanding or arrangement with respect to the sale or voting of GM Class H
Common Stock.
(l) GM Cooperation with Regulatory Matters.
(i) In furtherance of the covenants of Xxxxxx set forth in
Section 5.1(b) of the Merger Agreement, as soon as practicable, and in any event
within twenty (20) Business Days after the date hereof, GM 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
notifications under the laws of any foreign jurisdiction with respect to the
Merger and the transactions contemplated by the Merger Agreement and shall
promptly make any further filings pursuant thereto that may be necessary, proper
or advisable. GM shall, subject to Section 5.1(b)(v) of the Merger Agreement:
(A) use 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 Merger, and shall not, without the prior consent of
EchoStar, agree with any Governmental Authority to cause Xxxxxx not to
consummate the Merger for a period of time beyond the expiration of the waiting
period applicable to the consummation of the Merger under the HSR Act or to
extend the Closing Date (as defined in the Merger Agreement) to a date within
the ninety (90) day period prior to the Outside Date (as defined in the Merger
Agreement); (B) furnish to Xxxxxx and EchoStar such information and assistance
as EchoStar may reasonably request in connection with the preparation of any
submissions to, or agency proceeding by, any Governmental Authority under any
Antitrust Law (as defined in the Merger Agreement); (C) keep Xxxxxx and EchoStar
promptly apprised of any communications with, and inquiries or requests for
information from, such Governmental Authority; (D) permit Xxxxxx and EchoStar to
review any material communication given by it to, and consult with Xxxxxx and
EchoStar in advance of any meetings or conferences with, any Governmental
Authority or, in connection with any proceeding by a private party, with any
other Person, give Xxxxxx and EchoStar the opportunity to attend and participate
in such meetings and conferences; and (v) use best efforts to cooperate with
Xxxxxx and EchoStar to cause the conditions set forth in Section 6.1(b) of the
Merger Agreement to be satisfied; provided that GM shall not take any action
that would be reasonably likely to (1) prevent the delivery of the Tax Opinions
or the Ruling, or (2) cause the representations and assumptions underlying the
Tax Opinions or the Ruling not to be true and correct in all material respects.
(ii) In furtherance and not in limitation of the covenants of GM
contained in this Section 5.2(l), GM shall use best efforts in cooperating with
Xxxxxx to resolve such objections, if any, as may be asserted with respect to
the transactions contemplated by the Merger Agreement under any rules and
regulations of any Antitrust Law (as defined in the Merger Agreement). In
connection with the foregoing, if any administrative or judicial action or
proceeding,
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including any proceeding by a private party, is instituted (or threatened to be
instituted) challenging any transaction contemplated by the Merger Agreement as
violative of any Antitrust Law, GM shall, subject to Section 5.1(b)(v) of the
Merger Agreement, use best efforts in cooperating with Xxxxxx to avoid the
institution of any such action or proceeding and to contest and resist any such
action or proceeding and to have vacated, lifted, reversed or overturned any
decree, judgment, injunction or other order, whether temporary, preliminary or
permanent, that is in effect and that prohibits, prevents or restricts
consummation of the transactions contemplated by the Merger Agreement.
(iii) If any objections are asserted with respect to the
transactions contemplated by the Merger Agreement under any Antitrust Law or if
any suit is instituted by any Governmental Authority or any private party
challenging any of the transactions contemplated by the Merger Agreement as
violative of any Antitrust Law, GM shall, subject to Section 5.1(b)(v) of the
Merger Agreement, use its best efforts in cooperating with Xxxxxx 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 the Merger Agreement. In furtherance and not in
limitation of the foregoing, GM (and, to the extent required by any Governmental
Authority, their Subsidiaries and affiliates (other than Xxxxxx and any Xxxxxx
Affiliates) over which they exercise control) shall be required, subject to
Section 5.1(b)(v) of the Merger Agreement, to enter into a settlement,
undertaking, consent decree, stipulation or other agreement (each, a
"Settlement") with a Governmental Authority regarding antitrust matters in
connection with the transactions contemplated by the Merger Agreement, including
any Settlement that requires Xxxxxx to hold separate (including by establishing
a trust or otherwise) or to sell or otherwise dispose of any of its assets or
its subsidiaries' efforts.
Section 5.3. Covenants and Agreements of EchoStar.
(a) Amendments to and Termination of the EchoStar Transaction
Agreements. EchoStar agrees that, prior to the Merger Effective Time, it will,
subject to the provisions of the immediately following sentence, consult with GM
and Xxxxxx regarding any change, amendment or waiver that is proposed to be made
to any of the EchoStar Transaction Agreements or any of the other agreements
contemplated thereby. During such period, no changes or amendments will be made
to any such agreements, or waivers of rights under such agreements, without the
written consent of GM and Xxxxxx, unless such changes or amendments, taken
together with all other changes and amendments, (i) could not reasonably be
foreseen to have an adverse effect on the business, assets, liabilities or
financial condition of EchoStar or, following the Merger Effective Time, Xxxxxx,
and (ii) do not change in any substantive or non-immaterial respect any
conditions or termination provisions, change any terms or provisions in which a
change thereof would be prohibited after a stockholder vote, or impair or delay
the consummation of the Merger, any GM Debt/Equity Exchange or the GM
Transactions. EchoStar shall not, and shall not permit any of its affiliates
to, terminate any of the EchoStar Transaction Agreements or any of the other
agreements contemplated thereby, other than in connection with a termination of
this Agreement or the Merger
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Agreement (each of which may be terminated in accordance with its terms),
without the written consent of GM and Xxxxxx. EchoStar shall promptly provide GM
and Xxxxxx a copy of any amendment to any of the EchoStar Transaction
Agreements. Notwithstanding the foregoing, the parties agree that EchoStar may
take any of the foregoing actions with respect to the Merger Financing Agreement
and the PanAmSat Financing Agreement, subject to compliance with the relevant
terms of the Merger Agreement and the PanAmSat Stock Purchase Agreement,
respectively.
(b) Letter of Accountants.
(i) To the extent applicable as a result of any requirement to
include its financial statements in the Spin-Off/Merger Registration Statement,
EchoStar shall use commercially reasonable efforts to cause to be delivered to
GM and Xxxxxx to the extent permitted by applicable accounting standards, if and
to the extent applicable in view of the status of Xxxxxx as a registrant under
the Securities Act in connection with Spin-Off/Merger Registration Statement,
letters from the independent accountants of EchoStar, dated a date within two
(2) Business Days before the date on which the Spin-Off/Merger Registration
Statement shall become effective, addressed to Xxxxxx and GM 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 the Spin-Off/Merger Registration Statement.
(ii) To the extent applicable as a result of any requirement to
include its financial statements in any GM Debt/Equity Exchange Registration
Statement, each of EchoStar and Xxxxxx shall use commercially reasonable efforts
to cause to be delivered to GM to the extent permitted by applicable accounting
standards, if and to the extent applicable in view of the status of GM as a
registrant under the Securities Act in connection with any GM Debt/Equity
Exchange Registration Statement, letters from the respective independent
accountants of EchoStar and Xxxxxx, dated as of a date within two (2) Business
Days before the date on which any GM Debt/Equity Exchange Registration Statement
shall become effective, addressed to GM and the GM 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 GM Debt/Equity Exchange Registration Statement.
(iii) To the extent applicable as a result of any requirement to
include its financial statements in any GM Proxy/Consent Solicitation Statement,
EchoStar and Xxxxxx shall use commercially reasonable efforts to cause to be
delivered to GM to the extent permitted by applicable accounting standards in
connection with any GM Proxy/Consent Solicitation Statement two (2) letters from
the independent accountants of EchoStar, one dated a date within two (2)
Business Days before the date on which the registration statement(s) containing
such GM Proxy/Consent Solicitation Statement shall become effective and one
dated a date within two (2) Business Days before the date on which such GM
Proxy/Consent Solicitation Statement is mailed to GM's stockholders, in each
case addressed to GM and the GM Board of Directors, customary in form
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and scope for comfort letters delivered by independent public accountants in
connection with proxy or consent solicitation statements similar to such GM
Proxy/Consent Solicitation Statement.
(c) Merger Agreement Covenants. EchoStar hereby covenants to GM
as to each of the matters set forth in the covenants made by EchoStar in the
Merger Agreement to the full extent set forth therein as though such covenants
were made by EchoStar to GM in this Agreement.
(d) Pre-Closing Cooperation. EchoStar promptly shall furnish GM
with all information concerning it and its affiliates as may reasonably be
requested by GM (i) for inclusion in the Ruling Request or any other IRS
Submission and (ii) for use by (A) Weil, Gotshal & Xxxxxx LLP, counsel to Xxxxxx
and GM, in preparing its opinion to the effect that the Merger qualifies as a
reorganization pursuant to Section 368 of the Code (the "Section 368 Opinion")
and (B) Xxxxxxxx & Xxxxx, special counsel to GM (together with Weil, Gotshal &
Xxxxxx LLP, "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 "Ancillary Tax Opinions" and, together with the
Section 368 Opinion, the "Tax Opinions").
(e) EchoStar Sale Process Claims.
(i) ECHOSTAR, ON BEHALF OF ITSELF AND EACH ECHOSTAR
AFFILIATE, RESPECTIVELY, ACKNOWLEDGES AND AGREES THAT, EXCEPT FOR THE EXPRESS
REPRESENTATIONS, WARRANTIES AND COVENANTS OF GM AND XXXXXX SET FORTH IN THIS
AGREEMENT, THE MERGER AGREEMENT OR ANY OF THE AGREEMENTS CONTEMPLATED HEREBY OR
THEREBY (INCLUDING THE TRANSACTION AGREEMENTS), GM AND XXXXXX MAKE NO
REPRESENTATION, WARRANTY OR COVENANT WHATSOEVER, EXPRESSED OR IMPLIED, IN
CONNECTION WITH THIS AGREEMENT, THE MERGER AGREEMENT OR ANY OF THE AGREEMENTS OR
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (INCLUDING THE TRANSACTION
AGREEMENTS). EchoStar, on behalf of itself and each EchoStar Affiliate,
respectively, represents and warrants to GM and Xxxxxx that in making its
determination to enter into, and to proceed with the transactions contemplated
by, this Agreement, the Merger Agreement or any of the agreements contemplated
hereby and thereby (including the Transaction Agreements), it has not relied on
and will not rely on any representation, warranty or covenant of GM, Xxxxxx, any
GM Affiliate or any Xxxxxx Affiliate, or any Representative of GM, Xxxxxx, any
GM Affiliate or any Xxxxxx Affiliate, other than (A) the express
representations, warranties and covenants of GM set forth in this Agreement or
any of the agreements contemplated hereby to which each of GM, on the one hand,
and EchoStar, on the other hand, is a party and (B) the express representations,
warranties
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and covenants of Xxxxxx (with respect to which, in each case, GM makes no
representation, warranty or covenant except as expressly provided therein) set
forth in the Merger Agreement (including the Xxxxxx Disclosure Schedule (as
defined below)), this Agreement or any of the agreements contemplated hereby or
thereby to which Xxxxxx, on the one hand, and EchoStar, on the other hand, is a
party (including the Transaction Agreements).
(ii) Other than with respect to any claim based on a breach by
GM or Xxxxxx of any of the EchoStar Transaction Agreements to which GM or
Xxxxxx, as applicable, is a party, EchoStar, on behalf of itself and the
EchoStar Affiliates, hereby waives, releases and forever discharges any and 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 Merger Effective Time, and whether known or unknown, suspected,
or claimed) against GM, any GM Affiliate, Xxxxxx, any Xxxxxx Affiliate or any of
their respective Representatives which any of EchoStar or any EchoStar Affiliate
may have to the extent related to, arising out of or due to, directly or
indirectly, the investigation, consideration or pursuit (including the adequacy
of disclosures to and due diligence of EchoStar, any EchoStar Affiliate, GM,
Xxxxxx, any Xxxxxx Affiliate or any unaffiliated Persons and including any
allegations of breach of fiduciary duty with respect to the transactions
contemplated by this Agreement and the Merger Agreement) of one or more
strategic business combination transactions involving Xxxxxx or any Xxxxxx
Affiliate, and one or more unaffiliated Persons (any such claim, a "EchoStar
Sale Process Claim"), except to the extent that EchoStar hereafter incurs any
Losses in respect thereof arising out of a Third-Party Claim.
(iii) Other than with respect to any claim based on a breach by
GM or Xxxxxx of any Transaction Agreements to which GM or Xxxxxx, as applicable,
is a party, EchoStar agrees that it shall not, and shall cause the EchoStar
Affiliates not to, seek to recover from GM, any GM Affiliate, Xxxxxx, any Xxxxxx
Affiliate or any of their respective Representatives any Losses to the extent
that such Losses relate to, arise out of or are due to an EchoStar Sale Process
Claim unless and until such time, and only to the extent that EchoStar incurs
any Losses in respect thereof arising out of a Third-Party Claim.
(f) Payment of Demand Note. EchoStar shall use commercially
reasonable efforts to cooperate with Xxxxxx to ensure that the Demand Note, if
any, shall, subject to the consummation of the Merger, be paid in full
immediately upon the occurrence of the Merger Effective Time as set forth in
Section 1.1(a)(ii) of the GM/Xxxxxx Separation Agreement.
(g) Mailing of the EchoStar Information Statement. EchoStar shall
mail the EchoStar Information Statement to its stockholders on a date reasonably
proximate to the Mailing Date in compliance with Applicable Law, including
Regulation 14(c) of the Exchange Act.
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ARTICLE 6
TAX-FREE STATUS OF THE SPIN-OFF
Section 6.1. Representations and Warranties.
(a) Xxxxxx. Xxxxxx hereby represents and warrants that (i) it has
examined or, prior to the Spin-Off Effective Time, will examine the Ruling and
any other rulings issued by the IRS in connection with the Spin-Off, the Tax
Opinions, each IRS Submission, the representation letters relating to the Tax
Opinions and 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"), which to the extent related to Xxxxxx shall
be in form and substance reasonably satisfactory to Xxxxxx, and (ii) the facts
presented and the representations made therein, to the extent descriptive of
Xxxxxx (including the business purposes for the Spin-Off, the representations in
the Tax Materials to the extent that they relate to Xxxxxx, the timing and
amount of, and other circumstances relating to, any issuance of GM Class H
Common Stock occurring prior to the completion of the Spin-Off and the plans,
proposals, intentions and policies of Xxxxxx), are true, correct and complete in
all material respects; provided that Xxxxxx makes no representation or warranty
with respect to such facts presented and representations made regarding those
issuances that are specifically described in Section 6.1(b) below. The
representations and warranties set forth in this Section 6.1(a) shall be true
and correct as of the date hereof and at all times through and including the
Spin-Off Effective Time.
(b) GM. GM hereby represents and warrants that (i) it has examined
or, prior to the Spin-Off Effective Time, 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 Spin-Off, the
representations in the Tax Materials to the extent that they relate to GM, the
timing and amount of, and other circumstances relating to, the contribution by
GM of shares of GM Class H Common Stock to certain employee benefit plans of GM
in June 2000, the offering of newly issued shares of GM Class H Common Stock in
exchange for outstanding shares of GM $1-2/3 Common Stock in May 2000 and any
issuance of GM Class H Common Stock GM in any GM Debt/Equity Exchange, and the
plans, proposals, intentions and policies of GM), are true, correct and complete
in all material respects. The representations and warranties set forth in this
Section 6.1(b) shall be true and correct as of the date hereof and at all times
through and including the Spin-Off Effective Time.
Section 6.2. Restrictions Relating to the Spin-Off.
(a) In General. The parties intend the Spin-Off to qualify as a
distribution of Xxxxxx stock to GM stockholders with respect to which no gain or
loss is recognized by GM or any
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GM Affiliate, Xxxxxx or their respective stockholders pursuant to Section 355
and related provisions of the Code (such nonrecognition, the "Tax-Free Status of
the Spin-Off"). Neither Xxxxxx nor EchoStar shall, nor shall Xxxxxx or EchoStar
permit any of their respective Subsidiaries to, take any action (including
entering into any agreement, understanding or arrangement or any substantial
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
Spin-Off to fail so to qualify in any respect or to any extent (any such action
or failure to act, a "Disqualifying Action"). Further, neither Xxxxxx nor
EchoStar shall, nor shall Xxxxxx or EchoStar permit any of their respective
Subsidiaries to, take any action (including entering into any agreement,
understanding or arrangement or any substantial negotiations with respect to any
transaction or series of transactions) that, or fail to take any action the
failure of which, would result in a more than immaterial possibility that the
Tax-Free Status of the Spin-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, which
discretion shall be exercised in good faith solely to preserve the Tax-Free
Status of the Spin-Off, that the Potential Disqualifying Action would not
jeopardize the Tax-Free Status of the Spin-Off. Notwithstanding the foregoing,
if and to the extent that any Potential Disqualifying Action is described in and
specifically permitted pursuant to Sections 6.2(d), (e) or (f), such Potential
Disqualifying Action shall not be subject to the prior consent of GM pursuant to
this Section 6.2(a).
(b) [Intentionally omitted]
(c) Proposed Acquisition Transactions. Until the first day after the
second anniversary of the Spin-Off Effective Time, neither Xxxxxx nor EchoStar
shall, nor shall Xxxxxx or EchoStar permit any of their respective Subsidiaries
to:
(i) enter into any agreement, understanding or arrangement or
any substantial negotiations with respect to any transaction or series of
transactions (any such transaction, including any issuance or transfer of an
option (as defined for purposes of Section 355(e) of the Code), but excluding
the GM Transactions and the Merger, a "Proposed Acquisition Transaction") that
is, or that is presumed to be, for purposes of Section 355(e) of the Code and
applicable proposed, temporary or final Treasury Regulations promulgated
thereunder, part of a plan or series of related transactions (any such plan or
series of related transactions, as defined for purposes of Section 355(e) of the
Code, a "Section 355(e) Plan") pursuant to which, either individually or taken
together with the GM Transactions, the Merger, the Assumed AOL Sale (as defined
below), if any, the Conversion Issuances (as defined below) and the Debt/Equity
Issuances (as defined below), one or more Persons acquire directly or indirectly
stock or other interests (in any entity or combination of entities) that
represent a fifty percent (50%) or greater interest in (A) the total combined
voting power of all outstanding shares of Voting Stock (as defined below) of
Xxxxxx or any successor corporation or (B) the total value of all outstanding
shares of Xxxxxx Capital Stock (as defined below); or
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(ii) to the extent that Xxxxxx or EchoStar has the right and
power to prohibit any agreement, understanding or arrangement or any substantial
negotiations with respect to a Proposed Acquisition Transaction, permit any
agreement, understanding or arrangement or any substantial negotiations with
respect to a Proposed Acquisition Transaction to occur;
unless, in each case, prior to entering into such agreement, understanding or
arrangement or commencing substantial negotiations with respect to such Proposed
Acquisition Transaction, GM has determined, in its reasonable discretion, which
discretion shall be exercised in good faith solely to preserve the Tax-Free
Status of the Spin-Off, that the consummation of such Proposed Acquisition
Transaction would not jeopardize the Tax-Free Status of the Spin-Off. For the
purposes of the preceding sentence, subject to Section 6.2(g), any acquisition
of GM Class H Common Stock prior to the completion of the Spin-Off shall be
treated as an acquisition of Voting Stock of Xxxxxx.
(d) Continuation of the DTV Business. Until the first day after the
second anniversary of the Spin-Off Effective Time:
(i) Xxxxxx shall continue the active conduct of its DTV
Business (as defined below) as conducted by Xxxxxx immediately prior to the
Spin-Off. Xxxxxx shall conduct the DTV 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 DTV Business was so
conducted immediately prior to the Spin-Off Effective Time. Xxxxxx shall
continue the active conduct of the DTV 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 Article 6,
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, "DTV Business" means the business currently conducted by DIRECTV
Enterprises, Inc., a Delaware corporation and a direct wholly owned Subsidiary
of Xxxxxx, and DIRECTV Operations, Inc., a California corporation and a direct
wholly owned Subsidiary of DIRECTV Enterprises, Inc.
(ii) Subject always to Section 6.2(e), Xxxxxx shall not (A)
dispose of or otherwise discontinue the conduct of Substantially All of the DTV
Business (as defined below) (but Xxxxxx shall not be prohibited under this
Section 6.2(d)(ii) from disposing of or discontinuing one or more trades or
businesses that constitute part of the DTV Business so long as Xxxxxx does not
dispose of or discontinue the conduct of Substantially All of the DTV Business)
or (B) dispose of any business or assets that would cause the DTV Business to be
operated in a manner that is inconsistent in any material respect with the
business purposes for the Spin-Off as set forth in the Tax Materials, in each
case unless GM has determined, in its reasonable discretion, which discretion
shall be exercised in good faith solely to preserve the Tax-Free Status of the
Spin-Off, that such disposition or discontinuance would not jeopardize the Tax-
Free Status of the Spin-Off. For the
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purposes of this Agreement, "Substantially All of the DTV Business" shall mean
sixty percent (60%) or more of the DTV Business, based on the fair market value
of the assets, both tangible and intangible, of the DTV Business as of the Spin-
Off Effective Time. For the purposes of this clause (d)(ii), asset retirements,
sale-leaseback arrangements and discontinuances of product lines within a trade
or business the active conduct of which is continued shall not be deemed to be a
disposition or discontinuance of a trade or business or portion thereof.
(iii) Solely for purposes of this Section 6.2(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) Continuity of Business.
(i) Until the first day after the second anniversary of the
Spin-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) sixty percent (60%) of the gross assets of
Xxxxxx or (y) sixty percent (60%) 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, which discretion shall be exercised in
good faith solely to preserve the Tax-Free Status of the Spin-Off, that such
transaction would not jeopardize the Tax-Free Status of the Spin-Off. 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 Spin-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 6.2(e) as to whether sixty percent (60%) or more of the gross assets of
Xxxxxx or sixty percent (60%) of the consolidated gross assets of Xxxxxx and
such Subsidiaries have been sold, transferred or otherwise disposed of.
(iii) Solely for purposes of this Section 6.2(e), 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.
(f) Intercompany Indebtedness. Except as set forth on Section 6.2(f)
of the GM Disclosure Schedule and Section 6.2(f) of the disclosure schedule
delivered by Xxxxxx to EchoStar and dated as of the date of this Agreement (the
"Xxxxxx Disclosure Schedule"), from the Spin-Off Effective Time until the first
day after the second anniversary of the Spin-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
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Xxxxxx or any Xxxxxx Affiliate, on the other hand, other than (i) payables
incurred in the ordinary course of business and (ii) any indebtedness
distributed to GM as a part of the Xxxxxx Recapitalization.
(g) Certain Presumptions. For the purposes of this Section 6.2, it
shall be presumed that no issuance of GM Class H Common Stock that occurred on
or prior to May 1, 2001 is part of a Section 355(e) Plan that includes any
Proposed Acquisition Transaction. For the purposes of this Section 6.2, (i)
unless the IRS has issued a ruling to GM to the effect that no disposition by
the holder of the GM Series H Preference Stock (or any successor securities,
including the Xxxxxx Preference Stock, and including securities received upon
conversion or exchange of the GM Series H Preference Stock or any successor
securities) of any such stock or securities will be treated as part of a Section
355(e) Plan that includes the GM Transactions and the Merger, (an "AOL Section
355(e) Ruling"), it shall be conclusively presumed that the holder of the GM
Series H Preference Stock (or any successor securities, including the Xxxxxx
Preference Stock, and including securities received upon conversion or exchange
of the GM Series H Preference Stock or any successor securities) will dispose of
all such stock and securities in a transaction (such transaction, the "Assumed
AOL Sale") that is part of a Section 355(e) Plan that includes the GM
Transactions and the Merger; (ii) unless the IRS has issued a ruling to the
contrary based on representations reasonably acceptable to GM, it shall be
conclusively presumed that each security or instrument that is outstanding
immediately prior to the Merger Effective Time and convertible into, or
exchangeable or exercisable for, capital stock of EchoStar (other than stock
options issued to employees of EchoStar or its Subsidiaries in connection with
the performance of services) will be converted, exchanged or exercised after the
Merger Effective Time into or for the largest number of shares of capital stock
of Xxxxxx that may be issued thereunder, in each case in a transaction (such
transactions, collectively, the "Conversion Issuances") that is part of a
Section 355(e) Plan that includes the GM Transactions and the Merger; and (iii)
it shall be conclusively presumed that any shares of GM Class H Common Stock
issued or Xxxxxx Class C Common Stock distributed (or that may be distributed)
by GM pursuant to any GM Debt/Equity Exchange was or will be issued or
distributed, as the case may be, in a transaction (such transactions,
collectively, the "Debt/Equity Issuances") that is part of a Section 355(e) Plan
that includes the GM Transactions and the Merger.
(h) Permitted Actions and Transactions. Notwithstanding the
foregoing, the provisions of this Section 6.2 shall not prohibit Xxxxxx or
EchoStar, as the case may be, from implementing any Potential Disqualifying
Action, including any Proposed Acquisition Transaction, upon which the IRS has
granted a favorable ruling in, or which is described in reasonable detail in,
the Ruling or any Subsequent Tax Opinion (as defined below) or Subsequent Ruling
(as defined below).
(i) Valuation of Class B Common Stock. With respect to any Proposed
Acquisition Transaction occurring after the Merger Effective Time, for purposes
of GM's determination as described in Section 6.2(c), GM, relying on the advice
of the investment bankers
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referred to in Section 6.1(h)(iii)(B) of the Merger Agreement (the "Bankers")
shall determine the fair market value of the Xxxxxx Class B Common Stock taking
into account (i) the valuation methodology that was employed in the
determination of the fair market value of such stock under Section
6.1(h)(iii)(B) of the Merger Agreement; (ii) any Change in Tax Law (as defined
in the GM/Xxxxxx Separation Agreement) or a material change in, or failure of, a
relevant fact; and (iii) any change or development occurring after the Merger
Effective Time in the valuation methodology, practices or standards determined
by the Bankers generally used by professionals regularly engaged in the
valuation of securities.
Section 6.3. Cooperation and Other Covenants.
(a) Notice of Subsequent Xxxxxx Actions. Each of Xxxxxx and EchoStar,
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 Spin-Off or that otherwise reasonably could be expected to have an impact on
the Tax-Free Status of the Spin-Off; provided that GM may redact any Redactable
Information.
(b) Post-Closing Cooperation.
(i) Each of Xxxxxx and EchoStar, on the one hand, and GM, on the
other hand, shall cooperate with the other and shall take (or refrain from
taking) all such actions as the other may reasonably request in connection with
obtaining any determination by GM referred to in Section 6.2. Such cooperation
shall include providing any information, representations and/or covenants
reasonably requested by the other to enable either party (or counsel for such
party) to obtain and maintain either (A) an opinion of counsel selected by 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 6.2 would not jeopardize the Tax-
Free Status of the Spin-Off (a "Subsequent Tax Opinion") or (B) an IRS private
letter ruling to the same effect (a "Subsequent Ruling"). From and after any
date on which (x) Xxxxxx or EchoStar, on the one hand, or GM, on the other hand,
makes any representation 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 EchoStar makes any representation to GM for the
purpose of any determination required to be made by GM pursuant to Section 6.2,
in connection with obtaining any such determination or the receipt of a
Subsequent Tax Opinion or Subsequent Ruling and until the first day after the
second anniversary of the date of such determination or receipt, neither party
shall take (nor shall it refrain from taking) any action that would have caused
such representation to be untrue 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 Spin-Off, that such action would not
jeopardize the Tax-Free Status of the Spin-Off.
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(ii) In the event that Xxxxxx notifies GM that it or EchoStar
desires to take a Potential Disqualifying Action or other action described in
Section 6.2 and GM concludes that such action might jeopardize the Tax-Free
Status of the Spin-Off, GM shall, at the request of Xxxxxx, elect either (A) to
use commercially reasonable efforts to obtain a Subsequent Ruling that would
permit Xxxxxx or EchoStar to take the specified action, with Xxxxxx and EchoStar
to cooperate fully in connection with such efforts, or (B) to provide all
reasonable cooperation to Xxxxxx or EchoStar in connection with Xxxxxx or
EchoStar obtaining such a Subsequent Ruling in form and substance reasonably
satisfactory to GM. All expenses incurred in connection with obtaining such
Subsequent Ruling shall be borne by Xxxxxx. If the parties obtain a Subsequent
Ruling that would permit Xxxxxx or EchoStar to take a Potential Disqualifying
Action or other action described in Section 6.2 without jeopardizing the Tax-
Free Status of the Spin-Off, then GM shall make a favorable determination as to
the specified action under Section 6.2, 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
Spin-Off, based upon (i) a Change in Tax Law (as defined in the GM/Xxxxxx
Separation Agreement) on or after the date on which the Subsequent Ruling is
issued or (ii) 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 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 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 6.2(c).
(iv) At the request of Xxxxxx, made after the Merger Effective
Time, GM shall seek to obtain a Subsequent Ruling, or shall provide cooperation
to Xxxxxx and EchoStar in connection with Xxxxxx and EchoStar obtaining a
Subsequent Ruling, in each case in accordance with clause (ii) of this Section
6.3(b), as to the treatment under Section 355(e) of the Code of one or more
convertible securities that may be issued by EchoStar after the date of this
Agreement and prior to the Merger Effective Time.
(c) Notice.
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(i) Xxxxxx or EchoStar, as the case may be, shall give GM written
notice of any intention to effect or permit any Potential Disqualifying Action
or other action or transaction described in Section 6.2 at such time within a
period of time reasonably sufficient to enable GM (A) to make the determination
referred to in Section 6.2 or (B) to prepare and seek a Subsequent Tax Opinion
or a Subsequent Ruling in connection with such proposed action or transaction.
Each such notice by Xxxxxx or EchoStar, as the case may be, 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 by the Board
of Directors of Xxxxxx or EchoStar or any of their respective affiliates, 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 a Subsequent Ruling in connection with such proposed
action or transaction. All information provided by any of the parties to any
other party pursuant to this Section 6.3 shall be kept strictly confidential by
the receiving party or parties in accordance with the confidentiality
obligations of Article 3 of the GM/Xxxxxx Separation Agreement (which are
incorporated herein by reference).
(ii) Promptly, but in any event within fifteen (15) days, other
than a Saturday, Sunday or a day on which banking institutions located in the
State of New York or Michigan are authorized or obligated by law or executive
order to close (such day, a "Business Day"), after GM receives such written
notice from Xxxxxx or EchoStar, as the case may be, GM shall evaluate such
information and notify Xxxxxx or EchoStar, as the case may be, in writing of (A)
such determination or (B) GM's intent to seek a Subsequent Tax Opinion or a
Subsequent Ruling or, as the case may be, GM's election to permit Xxxxxx or
EchoStar to seek a Subsequent Ruling pursuant to Section 6.3(b)(ii)(B). If GM
makes a determination that a Potential Disqualifying Action or other action or
transaction described in Section 6.2 would jeopardize the Tax-Free Status of the
Spin-Off, such notice to Xxxxxx or EchoStar shall set forth, in reasonable
detail, the reasons therefor. A party that receives a Subsequent Tax Opinion or
Subsequent Ruling shall notify each other party that is not otherwise provided
with a copy of the Subsequent Tax Opinion or Subsequent Ruling, promptly, but in
any event within two Business Days, after the receipt of the Subsequent Tax
Opinion or Subsequent Ruling.
Section 6.4. Indemnification for Tax Liabilities.
(a) General. Notwithstanding any other provision of this Agreement or
any provision of any of the GM/Xxxxxx Tax Agreements to the contrary, but
subject to Section 6.4(b), Xxxxxx shall, indemnify, defend and hold harmless GM
and each GM Affiliate (or any successor to
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any of them) from and against any and all (i) Taxes imposed pursuant to a Final
Determination, (ii) accounting, legal and other professional fees and court
costs incurred in connection with such Taxes and (iii) costs and expenses that
may 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 (A) any Disqualifying Action taken by Xxxxxx,
EchoStar or any of their respective Subsidiaries or affiliates or (B) any other
breach by Xxxxxx, or EchoStar, of any of their respective representations,
warranties or covenants made in this Article 6.
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 EchoStar pays its indemnification obligation in full.
(b) Exceptions to Indemnification. If GM (i) makes a determination
pursuant to any clause of Section 6.2 on the basis of a Subsequent Tax Opinion
or Subsequent Ruling or otherwise, that a Proposed Disqualifying Action or other
action described in Section 6.2 would not jeopardize the Tax-Free Status of the
Spin-Off and (ii) delivers to Xxxxxx written notice of such determination
pursuant to Section 6.3(c), then Xxxxxx shall have no obligation to indemnify GM
or any GM Affiliate in respect of such action pursuant to Section 6.4(a), except
to the extent that any Tax-Related Losses result from the inaccuracy,
incorrectness or incompleteness of any representation provided by Xxxxxx or
EchoStar, or the failure by Xxxxxx or EchoStar to comply with any covenant, in
each case upon which such Subsequent Tax Opinion or Subsequent Ruling and/or
determination was based.
(c) Timing and Method of Tax Indemnification Payments. Xxxxxx shall
pay any amount that is due and payable to GM pursuant to this Section 6.4 on or
before the ninetieth (90th) day following the earlier of agreement of the
parties or a Final Determination that such amount is due and payable to GM. All
payments pursuant to this Section 6.4 shall be made by wire transfer to the bank
account designated by GM for such purpose, and, on the date of such wire
transfer, Xxxxxx or EchoStar, as the case may be, shall give GM notice of the
transfer.
(d) Certain Definitions. For the purposes of this Agreement, the
following terms shall have the following meanings:
(i) "Final Determination" means the final resolution of liability
for any Tax for a taxable period (A) 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; (B) by a decision, judgment, decree or other order by a court of
competent jurisdiction, which has become
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final and unappealable; (C) 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; (D) 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 (E) by any other final disposition, including by
reasons of the expiration of the applicable statute of limitations or by mutual
agreement of the parties;
(ii) "Xxxxxx Capital Stock" means any class or series of capital
stock of Xxxxxx or of any successor corporation;
(iii) "Person" means any individual, corporation, limited
liability company, partnership, trust or unincorporated organization or
government or any agency or political subdivision thereof;
(iv) "Tax" means any (A) 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; (B) liability for the payment of any amount of the type
described in clause (A) 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 (C) liability for the payment of
any amount of the type described in clause (A) or clause (B) above as a result
of any express or implied obligation to indemnify or otherwise assume or succeed
to the liability of any other Person;
(v) "Tax Control" has the meaning given to "control" in Section
368(c) of the Code; and
(vi) "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.
(e) Prior Period Agreements. Except for the GM/Xxxxxx Tax Agreements,
any and all existing Tax sharing agreements and practices regarding Taxes and
their payment, allocation or sharing between GM or any Subsidiary of GM
(including former subsidiaries and affiliates of GM) and Xxxxxx or any
Subsidiary of Xxxxxx shall be terminated with respect to Xxxxxx and all
Subsidiaries of Xxxxxx as of the Spin-Off Effective Time, and no remaining
liabilities thereunder shall exist thereafter.
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Section 6.5. Procedure for Indemnification for Tax Liabilities.
(a) Notice of Claim. If GM receives notice of the assertion of any (i)
claim, (ii) suit, (iii) arbitration, or (iv) inquiry, proceeding or
investigation by or before any Governmental Authority, in any case asserted by
or in right of a Person other than GM or any GM Affiliate, Xxxxxx or any Xxxxxx
Affiliate (a "Third-Party Claim"), with respect to which Xxxxxx (the "Article 6
Indemnifying Party") may be obligated under Section 6.4 to provide
indemnification, GM shall give Xxxxxx 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 of its
obligations under Section 6.4, except to the extent that Xxxxxx 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 Article 6 Indemnifying Party shall jointly control
the defense of, and cooperate with each other with respect to defending, any
Third-Party Claim with respect to which the Article 6 Indemnifying Party is
obligated under Section 6.4 to provide indemnification.
(ii) The Article 6 Indemnifying Party 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 Article 6 Indemnifying Party nor GM shall make any
statements or take any actions that could reasonably result in the shifting of
liability for 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 Article 6
Indemnifying Party 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 Article 6 Indemnifying Party 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
commercially reasonable 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 Claim without the prior written consent of the
Article 6 Indemnifying 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 joint control of the defense of any such Third-Party
Claim shall be paid by the party that incurs such costs and expenses.
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Section 6.6. Arbitration. Any dispute between the parties arising out
of or relating to this Article 6, including the interpretation of this Article 6
(in each case, a "Dispute"), shall be resolved only in accordance with the
following provisions:
(a) Negotiation. GM and Xxxxxx or EchoStar, as the case may be (the
"Article 6 Dispute Party"), shall attempt in good faith to resolve any Dispute
promptly through negotiations of the parties. Either party may deliver to the
other 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 GM and the Article 6 Dispute Party 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
of GM and the Article 6 Dispute Party 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 6.6(b). The results of such arbitration shall be final and binding on
the parties.
(b) Arbitration Procedure. Either party 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 6.6. Within twenty
(20) days following receipt of the written notice of arbitration, GM and the
Article 6 Dispute Party shall each appoint one arbitrator. The two arbitrators
so appointed shall appoint the third arbitrator. If either GM or the Article 6
Dispute Party 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. Whether selected by GM and the Article 6 Dispute Party or otherwise, each
arbitrator selected to resolve such dispute shall be a tax attorney or tax
accountant who is generally recognized in the tax community as a qualified and
competent tax practitioner with experience in the tax area involved in the issue
or issues to be resolved. Such arbitrators shall be empowered to determine
whether the Article 6 Dispute Party is required to indemnify GM pursuant to
Section 6.4 and to determine the amount of the related indemnification payment.
Each of GM and the Article 6 Dispute Party 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. (S)(S)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.
(c) Exclusive Remedies. Except for the right to pursue equitable
remedies, the remedies provided in this Article 6 shall be deemed the sole and
exclusive remedies of the parties with respect to the subject matters of the
indemnification provisions of Section 6.4. The parties hereto specifically
acknowledge that, in accordance with, but without limitation to, Section 9.8, GM
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shall have the right to obtain an injunction or other appropriate equitable
remedy, in the event that Xxxxxx or EchoStar or any Subsidiary or affiliate of
either of them proposes to take any Potential Disqualifying Action or other
action described in Section 6.2 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 6.
Section 6.7. Certain Stock Acquisitions. Each of Xxxxxx (as to itself
and its affiliates) and EchoStar (as to itself, its affiliates and the EchoStar
Controlling Stockholder) represents, warrants and covenants that:
(a) Before the date that is more than two (2) years after the Spin-
Off, none of Xxxxxx, EchoStar, the EchoStar Controlling Stockholder or any other
controlling shareholder (within the meaning of Treasury Regulation Section
1.355-7T(k)(3) (or any successor regulation)) of Xxxxxx or EchoStar, or any
affiliate of any of them, will acquire (within the meaning of Section 355(e) of
the Code) any shares of Xxxxxx capital stock or EchoStar capital stock from AOL.
(b) None of Xxxxxx, EchoStar, the EchoStar Controlling Stockholder or
any other controlling shareholder (within the meaning of Treasury Regulation
Section 1.355-7T(k)(3) (or any successor regulation)) of Xxxxxx or EchoStar, or
any affiliate of any of them, has discussed or will discuss with AOL or a
potential buyer of capital stock of GM or Xxxxxx owned by AOL, prior to or at
the time of the Spin-Off, an acquisition (within the meaning of Section 355(e)
of the Code) of shares of GM capital stock or Xxxxxx capital stock from AOL.
(c) None of Xxxxxx, EchoStar, the EchoStar Controlling Stockholder or
any other controlling shareholder (within the meaning of Treasury Regulation
Section 1.355-7T(k)(3) (or any successor regulation)) of Xxxxxx or EchoStar, or
any affiliate of any of them, will enter into, prior to or at the time of the
Spin-Off, an agreement, understanding, arrangement or substantial negotiations
regarding an acquisition (within the meaning of Section 355(e) of the Code) of
any shares of GM capital stock or Xxxxxx capital stock from AOL.
(d) None of Xxxxxx, EchoStar, the EchoStar Controlling Stockholder or
any other controlling shareholder (within the meaning of Treasury Regulation
Section 1.355-7T(k)(3) (or any successor regulation)) of Xxxxxx or EchoStar, or
any affiliate of any of them has a plan or intention to acquire (within the
meaning of Section 355(e) of the Code) any shares of Xxxxxx capital stock to be
held by AOL after the Spin-Off.
(e) In the case of an acquisition (within the meaning of Section
355(e) of the Code) of AOL's shares of capital stock of GM prior to the Spin-
Off, at no time before such acquisition xxxx Xxxxxx, EchoStar or the EchoStar
Controlling Stockholder or any other controlling shareholder (within the meaning
of Treasury Regulation Section1.355-7T(k)(3) (or any successor regulation)) of
Xxxxxx or EchoStar discuss the Spin-Off with (i) AOL, (ii) a potential buyer of
shares
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of capital stock of GM owned by AOL or (iii) any controlling shareholder (within
the meaning of Treasury Regulation Section 1.355-7T(k)(3) (or any successor
regulation)) of any potential buyer of capital stock of GM owned by AOL, in each
case other than discussions under which no information is provided other than
information generally made available to the investing public.
ARTICLE 7
INDEMNIFICATION
Section 7.1. Indemnification by Xxxxxx. Subject to Section 7.5 below
and, with respect to the indemnification of the GM Indemnitees, subject to the
consummation of the Spin-Off and Section 7.1(g) below:
(a) Xxxxxx shall indemnify, defend and hold harmless the GM
Indemnitees (as defined below) from and against any and all Losses incurred or
sustained by the GM Indemnitees to the extent arising from Third Party Claims
relating to, arising out of or due to, directly or indirectly, the business or
operations of Xxxxxx or any Xxxxxx Affiliate (the "Xxxxxx Business"),
irrespective of whether such Losses relate to, arise out of or are due to
occurrences or conditions prior to, at or after the Spin-Off Effective Time, and
including all Losses relating to, arising out of or due to, directly or
indirectly, (i) any business or operations previously owned by Xxxxxx or any
Xxxxxx Affiliate and disposed of prior to the Spin-Off Effective Time or (ii)
any occurrence relating to any disposition of any such business or operations,
except in each case of clause (i) and clause (ii), to the extent otherwise
provided in Section 7.2(i) with respect to Losses that may result from certain
claims as described on Schedule 7.2 attached hereto;
(b) Xxxxxx shall indemnify, defend and hold harmless the GM
Indemnitees and, prior to the Merger Effective Time, the EchoStar Indemnitees
from and against any and all Losses incurred or sustained by the GM Indemnitees
or the EchoStar Indemnitees to the extent arising from Third Party Claims
relating to, arising out of or due to, directly or indirectly, (i) any breach by
Xxxxxx or any Xxxxxx Affiliate (x) with respect to the GM Indemnitees, at or
after the Spin-Off Effective Time, and (y) with respect to the EchoStar
Indemnitees, prior to the Merger Effective Time, in each case of any of the
covenants to be performed by Xxxxxx or any Xxxxxx Affiliate that are contained
in the Xxxxxx Transaction Agreements or any of the agreements contemplated
thereby, and (ii) any breach prior to or as of the Merger Effective Time by
Xxxxxx of the representations and warranties set forth in Sections 3.1, 3.2 and
3.3 of this Agreement; provided, however, that any such Losses relating to,
arising out of or due to any breach by Xxxxxx of Section 3.3 of this Agreement
shall be limited to actual out-of-pocket Losses arising from Third-Party Claims;
(c) Xxxxxx shall indemnify, defend and hold harmless the GM
Indemnitees from and against any and all actual out-of-pocket Losses incurred or
sustained by the GM Indemnitees to the extent arising from Third-Party Claims
relating to, arising out of or due to any untrue statement
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or alleged untrue statement of a material fact contained in, or incorporated by
reference into, any report of Xxxxxx with respect to any period entirely or
partially prior to the Spin-Off Effective Time required by or filed under the
Exchange Act, or any filing made prior to the Spin-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 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 such report or filing was made; provided,
further, that this Section 7.1(c) shall not apply to the Spin-Off/Merger
Registration Statement, the GM Proxy/Consent Solicitation Statement, the
EchoStar Information Statement or any GM Debt/Equity Exchange Registration
Statement (which are addressed in Section 7.1(b) by reference to the
representations and warranties set forth in Sections 3.3);
(d) Xxxxxx shall indemnify, defend and hold harmless the GM
Indemnitees from and against any and all actual out-of-pocket Losses incurred or
sustained by the GM Indemnitees 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,
any report of GM with respect to any period entirely or partially prior to the
Spin-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 Spin-Off Effective Time under the
Securities Act relating to Xxxxxx, any Xxxxxx Affiliate, the Xxxxxx Business or
the GM Class H Common Stock by GM, 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 such 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 or any GM Affiliate or any of their
respective Representatives by or on behalf of Xxxxxx or 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 statements or omissions relating to 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 7.1(d) shall not apply to the
Spin-Off/Merger Registration Statement, the GM Proxy/Consent Solicitation
Statement, the EchoStar Information
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Statement or any GM Debt/Equity Exchange Registration Statement (which are
addressed in Section 7.1 (b) by reference to the representations and warranties
set forth in Section 3.3);
(e) Xxxxxx shall indemnify, defend and hold harmless the GM
Indemnitees from and against any and all Losses incurred or sustained by the GM
Indemnitees to the extent arising from Third Party Claims relating to or arising
out of actions taken (or omitted to be taken) from and after the Spin-Off
Effective Time by Xxxxxx, any Xxxxxx Affiliate or the Xxxxxx transfer agent (or
any successor transfer agent) in connection with (i) effecting the exchange of
Certificates evidencing shares of Xxxxxx Class C Common Stock and Xxxxxx
Preference Stock for Certificates evidencing shares of GM Class H Common Stock
or GM Series H Preference Stock, as applicable, (ii) recognizing the persons who
were record holders of GM Class H Common Stock, GM $1-2/3 Common Stock, if
applicable, or GM Series H Preference Stock immediately prior to the Spin-Off
Effective Time, or GM in the event that GM retains any shares of Xxxxxx Class C
Common Stock following the Spin-Off, as the record holders of Xxxxxx Class C
Common Stock or Xxxxxx Preference Stock, as applicable, or (iii) affording such
persons the dividend, voting and other rights and privileges incident to the
Xxxxxx Class C Common Stock or Xxxxxx Preference Stock, as applicable;
(f) Xxxxxx shall indemnify, defend and hold harmless the GM
Indemnitees from and against any and all Losses incurred or sustained by the GM
Indemnitees to the extent arising from Third Party Claims relating to or arising
out of actions taken (or omitted to be taken) from and after the Spin-Off
Effective Time by Xxxxxx, any Xxxxxx Affiliate or the Xxxxxx Transfer Agent (or
any successor transfer agent), upon the conversion of Xxxxxx Preference Stock
into (or exchange of Xxxxxx Preference Stock for) Xxxxxx Class C Common Stock
(or any successor security) in accordance with its terms in connection with (i)
effecting the exchange of Certificates evidencing shares of Xxxxxx Class C
Common Stock (or any successor security) for Certificates evidencing shares of
Xxxxxx Preference Stock, (ii) recognizing the persons who were record holders of
Xxxxxx Preference Stock immediately prior to such conversion (or exchange) as
the record holders of Xxxxxx Class C Common Stock, or (iii) affording such
persons the dividend, voting and other rights and privileges incident to the
Xxxxxx Class C Common Stock; and
(g) Nothing in this Section 7.1 shall obligate Xxxxxx to indemnify
any of the GM Indemnitees from and against any Losses incurred or sustained by
the GM Indemnitees (i) arising solely or primarily from GM's actions in the
capacity of or interest as the sole stockholder of Xxxxxx prior to the Spin-Off
Effective Time or (ii) relating to, arising out of or due to, directly or
indirectly, any Xxxxxx Sale Process Claim.
Section 7.2. Indemnification by GM. Subject to Section 7.5 below
and, with respect to the indemnification of the Xxxxxx Indemnitees, subject to
the consummation of the Spin-Off:
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(a) GM shall indemnify, defend and hold harmless the Xxxxxx
Indemnitees and the EchoStar Indemnitees (as defined below) from and against any
and all Losses incurred or sustained by them to the extent arising from Third
Party Claims relating to, arising out of or due to, directly or indirectly, the
business or operations of GM or any GM Affiliate (the "GM Business"),
irrespective of whether such Losses relate to, arise out of or are due to
occurrences or conditions prior to, at, or after the Spin-Off Effective Time,
except to the extent such Losses relate to, arise out of or are due to, directly
or indirectly, the Xxxxxx Business as described in Section 7.1(a);
(b) GM shall indemnify, defend and hold harmless the Xxxxxx
Indemnitees and the EchoStar Indemnitees from and against any and all Losses
incurred or sustained by them to the extent arising from Third Party Claims
relating to, arising out of or due to, directly or indirectly, (i) any breach by
GM or any GM Affiliate of any of the covenants to be performed by it that are
contained in the GM Transaction Agreements or any of the agreements contemplated
thereby and (ii) any breach prior to or as of the Merger Effective Time by GM of
the representations and warranties set forth in Sections 2.1, 2.2, 2.3(a),(c)
and (d), 2.4, 2.5 (but only with respect to representations specifically
relating to the GM Class H Common Stock, the GM Series H Preference Stock and
the Class H Fraction), 2.8 and 2.10 of this Agreement; provided, however, that
any such Losses relating to, arising out of or due to any breach by GM of
Section 2.8 of this Agreement shall be limited to actual out-of-pocket Losses
arising from Third-Party Claims;
(c) except to the extent provided in Section 7.1(d), GM shall
indemnify, defend and hold harmless the Xxxxxx Indemnitees from and against any
and all actual out-of-pocket Losses incurred or sustained by them 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, any report of GM with respect to any period
entirely or partially prior to the Spin-Off Effective Time required by or filed
under the Exchange Act, or any filing made prior to the Spin-Off Effective Time
under the Securities Act by GM, 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
GM 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
GM or any GM Affiliate or any of their respective Representatives by or on
behalf of Xxxxxx or any Xxxxxx Affiliate or any of their respective
Representatives specifically for use in preparing such report or filing by GM;
provided, further, that GM 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 Xxxxxx or any
Xxxxxx Affiliate existing at the time such report or filing was made; provided,
further, that this Section 7.2(c) shall not apply to the Spin-Off/Merger
Registration Statement, the GM Proxy/Consent Solicitation Statement, the
EchoStar Information Statement or any GM Debt/Equity Exchange Registration
Statement (which are addressed in Section 7.2(b) by reference to the
representations and warranties set forth in Sections 2.8);
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(d) GM shall indemnify, defend and hold harmless the Xxxxxx
Indemnitees from and against any and all actual out-of-pocket Losses incurred or
sustained by them 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, any report of
Xxxxxx with respect to any period entirely or partially prior to the Spin-Off
Effective Time required by or filed under the Exchange Act relating to GM, any
GM Affiliate, the GM Business or the GM $1-2/3 Common Stock, or any filing made
prior to the Spin-Off Effective Time under the Securities Act relating to GM,
any GM Affiliate, the GM Business or the GM $1-2/3 Common Stock 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 with respect to any such report
or filing of Xxxxxx, XX 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 Xxxxxx or any Xxxxxx Affiliate or any 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 GM 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 Xxxxxx
or any Xxxxxx Affiliate existing at the time such report or filing was made;
provided, further, that this Section 7.2(d) shall not apply to the Spin-
Off/Merger Registration Statement, the GM Proxy/Consent Solicitation Statement,
the EchoStar Information Statement or any GM Debt/Equity Exchange Registration
Statement (which are addressed in Section 7.2(b) by reference to the
representations and warranties set forth in Sections 2.8);
(e) GM shall indemnify, defend and hold harmless the Xxxxxx
Indemnitees from and against any and all Losses incurred or sustained by them to
the extent arising from Third Party Claims relating to or arising out of actions
taken (or omitted to be taken) prior to the Spin-Off Effective Time by GM or any
GM Affiliate or the GM Transfer Agent (or any predecessor thereof) in connection
with (i) recognizing any person who is or was at any time a record holder of GM
Class H Common Stock, GM $1-2/3 Common Stock or GM Series H Preference Stock as
a record holder of GM Class H Common Stock, GM $1-2/3 Common Stock or GM Series
H Preference Stock, as applicable, or (ii) affording such persons the dividend,
voting and other rights and privileges incident to the GM Class H Common Stock,
GM $1-2/3 Common Stock or GM Series H Preference Stock, as applicable;
(f) GM shall indemnify, defend and hold harmless the Xxxxxx
Indemnitees and the EchoStar Indemnitees from and against any and all Losses
incurred or sustained by them to the extent arising from Third Party Claims
relating to, arising out of or due to any indebtedness for borrowed money of GM
or any GM Affiliate to the extent paid by Xxxxxx or any Xxxxxx Affiliate or
EchoStar or any EchoStar Affiliate at any time from and after the Spin-Off
Effective Time;
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(g) GM shall indemnify, defend and hold harmless the Xxxxxx
Indemnitees from and against any and all Losses incurred or sustained by them to
the extent arising from Third-Party Claims relating to, arising out of or due
to, directly or indirectly, the investigation, consideration or pursuit
(including the adequacy of disclosures to and due diligence of GM, Xxxxxx or any
unaffiliated third Persons and including any allegations of breach of fiduciary
duty with respect to the transactions contemplated by this Agreement and the
Merger Agreement) of one or more strategic business combination transactions
involving Xxxxxx or any Xxxxxx Affiliate, and one or more unaffiliated Persons
(any such Loss, a "Sale Process Loss"), to the extent that any such Sale Process
Loss relates to, arises out of or is due to actions or omissions by GM, any GM
Affiliate, Xxxxxx, any Xxxxxx Affiliate or any of their respective
Representatives;
(h) except with respect to the adoption by Xxxxxx of a stockholder
rights plan as contemplated by Section 5.1(p) above, GM shall indemnify, defend
and hold harmless the Xxxxxx Indemnitees and the EchoStar Indemnitees from and
against any and all Losses incurred or sustained by them to the extent arising
from Third-Party Claims relating to, arising out of or due to, directly or
indirectly, the failure of any of the GM Transactions, at the time it is
effected, to be in compliance with all applicable provisions of the DGCL; and
(i) GM shall indemnify, defend and hold harmless the Xxxxxx
Indemnitees and the EchoStar Indemnitees from and against any and all losses
incurred or sustained by them to the extent arising out of or due to, directly
or indirectly, those claims made by The Boeing Company set forth on Schedule 7.2
attached hereto, but only to the extent that the aggregate amount of all such
claims exceeds Six Hundred Seventy Million Dollars ($670,000,000.00).
Section 7.3. Indemnification by EchoStar. Subject to Section 7.5
below:
(a) EchoStar shall indemnify, defend and hold harmless the GM
Indemnitees and, prior to the Merger Effective Time, the Xxxxxx Indemnities from
and against any and all Losses incurred or sustained by them to the extent
arising from Third Party Claims relating to, arising out of or due to, directly
or indirectly, (a) any breach by EchoStar or any EchoStar Affiliate of any of
the covenants to be performed by it that are contained in the EchoStar
Transaction Agreements or any of the agreements contemplated thereby and (b) any
breach prior to or as of the Merger Effective Time by EchoStar of the
representations and warranties set forth in Sections 4.1, 4.2 and 4.3 of this
Agreement; provided, however, that any such Losses relating to, arising out of
or due to any breach by EchoStar of Section 4.3 of this Agreement shall be
limited to actual out-of-pocket Losses arising from Third-Party Claims; and
(b) EchoStar shall indemnify, defend and hold harmless the GM
Indemnitees from and against any and all losses incurred or sustained by them to
the extent arising from Third Party
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Claims relating to, arising out of or due to, directly or indirectly, the
adoption by Xxxxxx of a stockholder rights plan as contemplated by Section
5.1(p) above.
Section 7.4. Certain Definitions. For the purposes of this
Agreement, the following terms shall have the following meanings:
(a) "Affiliate" or "affiliate" means with respect to EchoStar, Xxxxxx
or GM, an EchoStar Affiliate, a Xxxxxx Affiliate or a GM Affiliate, as the case
may be.
(b) "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;
(c) "EchoStar 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 EchoStar as of such time;
(d) "EchoStar Indemnitees" means EchoStar, all EchoStar Affiliates
and each of their respective directors, officers and employees (in their
capacities as such);
(e) "GM 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 GM as of such time; provided,
however, that the term "GM Affiliate," as of any particular time, shall not
include Xxxxxx or any Xxxxxx Affiliate as of such time;
(f) "GM Indemnitees" means GM, all GM Affiliates and each of their
respective directors, officers and employees (in their capacities as such);
(g) "Xxxxxx Affiliate" means (i) with respect to any time prior to
the Spin-Off Effective Time, a Person that, directly or indirectly through one
or more intermediaries, was Controlled by Xxxxxx as of such time and (ii) with
respect to any time after the Spin-Off Effective Time, a Person that, directly
or indirectly through one or more intermediaries, Controls, is Controlled by or
is under common Control with Xxxxxx as of such time; and
(h) "Xxxxxx Indemnitees" means Xxxxxx, all Xxxxxx Affiliates and each
of their respective directors, officers and employees (in their capacities as
such).
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Section 7.5. Other Liabilities.
(a) This Article 7 shall not be applicable to any Tax-Related Losses,
which shall be governed by the GM/Xxxxxx Tax Agreements and Article 6 of this
Agreement.
(b) Other than as expressly set forth in this Article 7, this Article
7 shall not be applicable to any Losses relating to, arising out of or due to,
directly or indirectly, any breach of the provisions of any contract, agreement
or understanding other than this Agreement, the GM Transaction Agreements, the
Xxxxxx Transaction Agreements, the EchoStar Transaction Agreements and the other
agreements contemplated hereby and thereby, as applicable, solely between GM or
any GM Affiliate, on the one hand, and Xxxxxx or any Xxxxxx Affiliate, on the
other hand, which was entered into in the ordinary course of business or with
respect to which a copy has been heretofore provided to EchoStar, which Losses
shall be governed by the terms of such contract, agreement or understanding.
Section 7.6. Tax Effects of Indemnification.
(a) Any indemnification payment made under this Agreement between GM,
on the one hand, and Xxxxxx or EchoStar, on the other hand, shall be
characterized for tax purposes as if such payment were made in connection with
the Spin-Off, and shall therefore be treated, to the extent permitted by law, as
either (i) a distribution from Xxxxxx to GM or (ii) an offset to the
distribution made by Xxxxxx to GM pursuant to Section 1.1(a) of the GM/Xxxxxx
Separation Agreement.
(b) The amount of any Loss or Tax-Related Losses for which
indemnification is provided under this Agreement shall be (i) increased to take
account of net Tax cost, if any, incurred by the Person that is entitled to seek
indemnification under this Agreement ("Indemnitee") arising from the receipt or
accrual of an amount that a Person that is obligated to provide indemnification
under this Agreement (an "Indemnifying Party") is required to pay to an
Indemnitee under this Agreement ("Indemnity Payment") hereunder (grossed up for
such increase) and (ii) reduced to take account of net Tax benefit, if any,
realized by the Indemnitee arising from incurring or paying such Loss or Tax-
Related Losses. In computing the amount of any such Tax cost or Tax benefit,
the Indemnitee shall be deemed to recognize all other items of income, gain,
loss, deduction or credit before recognizing any item arising from the receipt
or accrual of any Indemnity Payment hereunder or incurring or paying any
indemnified Loss or Tax-Related Losses. Any Indemnity Payment hereunder shall
initially be made without regard to this Section 7.6 and shall be increased or
reduced to reflect any such net Tax cost (including gross-up) or net Tax benefit
only after the Indemnitee has actually realized such cost or benefit. For the
purposes of this Agreement, an Indemnitee shall be deemed to have "actually
realized" a net Tax cost or a net Tax benefit to the extent that, and at such
time as, the amount of Taxes payable by such Indemnitee is increased above or
reduced below, as the
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case may be, the amount of Taxes that such Indemnitee would be required to pay
but for the receipt or accrual of the Indemnity Payment or the incurrence or
payment of such Loss or Tax-Related Losses, as the case may be. The amount of
any increase or reduction hereunder shall be adjusted to reflect any Final
Determination with respect to the Indemnitee's liability for Taxes, and payments
between the applicable parties to reflect such adjustment shall be made if
necessary.
Section 7.7. Effect of Insurance Upon Indemnification. The amount
which an Indemnifying Party is required to pay to any Indemnitee pursuant to
this Article 7 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 Indemnitee, net of any applicable
premium adjustment and tax effect ("Insurance Proceeds") and other amounts
actually recovered by such Indemnitee in reduction of the related Loss, it being
understood and agreed that each of the parties shall use commercially reasonable
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 an Indemnity Payment in
respect of a Loss 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.
Section 7.8. 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 Agreement to provide indemnification (other than
pursuant to Article 6), 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 7, 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
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such Indemnitee shall cooperate in the defense of such Third-Party Claim. Such
Indemnifying Party shall 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 7 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 of 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 7 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 7.8(b), the Indemnifying Party and the Indemnified Party shall
control the defense of, and cooperate with each other with respect to defending,
any Third-Party Claim with respect to which each party is claiming that it is
entitled to indemnification under this Article 7. If either the Indemnifying
Party or the Indemnified 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 commercially reasonable 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 joint
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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.
Section 7.9. 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 7 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.
Section 7.10. Exclusive Remedies. Except for the right to pursue
equitable remedies and for acts constituting fraud and criminal misconduct, the
remedies provided in this Article 7 shall be deemed the sole and exclusive
remedies of the parties among each other, from and after the Merger Effective
Time, in connection with or arising out of the subject matters of this
Article 7.
ARTICLE 8
TERMINATION AND AMENDMENT
Section 8.1. Termination. Prior to the Spin-Off Effective Time, this
Agreement shall terminate automatically upon termination of the Merger
Agreement.
Section 8.2. Effect of Termination. In the event of the termination
of this Agreement pursuant to Section 8.1 above, this Agreement, except for the
provisions of Section 5.1(i), all of Article 7, this Section 8.2 and all of
Article 9, shall become void and have no effect, without any liability under
this Agreement on the part of either party or its Subsidiaries or their
respective directors, officers, employees or stockholders. Notwithstanding the
foregoing, nothing in this Section 8.2 shall relieve either party to this
Agreement of liability for a breach of any provision of this Agreement or
invalidate the provisions of the Confidentiality Agreement.
Section 8.3. Amendment. This Agreement may be amended by the
parties hereto, by action taken or authorized by their respective Boards of
Directors; provided, however, that no amendment shall be made following the
receipt of the Requisite Stockholder Approval that alters or
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changes (a) the amount or kind of shares, securities, cash, property and/or
rights to be received by the holders of GM Class H Common Stock or GM $1-2/3
Common Stock pursuant to this Agreement or (b) any of the terms and conditions
of this Agreement if such alteration or change would adversely affect the
holders of GM Class H Common Stock or GM $1-2/3 Common Stock 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.
Section 8.4. Extension; Waiver. At any time prior to the Merger
Effective Time, GM (with respect to EchoStar) and EchoStar (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 the parties hereto to
any such extension or waiver shall be valid only if set forth in a written
instrument signed on behalf of such parties.
ARTICLE 9
MISCELLANEOUS
Section 9.1. Survival. The representations and warranties made
herein by the parties hereto shall not survive the Merger Effective Time, except
that the representations and warranties set forth in Sections 2.1, 2.2, 2.3(a),
(c) and (d), 2.4, 2.5 (but only with respect to representations specifically
relating to the GM Class H Common Stock, the GM Series H Preference Stock and
the Class H Fraction), 2.8, 2.10, 3.1, 3.2, 3.3, 4.1, 4.2 and 4.3 and Article 6
and the covenants and agreements contained herein which by their terms require
performance after the Merger Effective Time shall survive indefinitely.
Section 9.2. Notices. All notices and other communications hereunder
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):
(a) if to GM:
000 Xxxxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxxx X. Xxxxxxxx
Telecopy No.: (000) 000-0000
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with a copy to:
Xxxxxxxx & Xxxxx
000 Xxxx Xxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Attention: R. Xxxxx Xxxx and Xxxxxx X. Xxxxxxxx
Telecopy No.: (000) 000-0000
and with a copy to:
Weil, Gotshal & Xxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxxxx X. Xxxxx and Xxxxxxx X. Xxxxxxxx
Telecopy No.: (000) 000-0000
and, if delivered pursuant to Article 6, with a copy to:
GM
000 Xxxxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Chief Tax Officer
Telecopy No.: (000) 000-0000
(b) if to Xxxxxx:
000 Xxxxx Xxxxxxxxx Xxxxxxxxx
X.X.Xxx 000
Xx Xxxxxxx, Xxxxxxxxxx 00000
Attention: General Counsel
Telecopy No.: (000) 000-0000
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and with a copy to:
Weil, Gotshal & Xxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxxxx X. Xxxxx and Xxxxxxx X. Xxxxxxxx
Telecopy No.: (000) 000-0000
with a copy to:
Xxxxxxxx & Xxxxx
000 Xxxx Xxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Attention: R. Xxxxx Xxxx and Xxxxxx X. Xxxxxxxx
Telecopy No.: (000) 000-0000
and, if delivered pursuant to Article 6, with a copy to:
Xxxxxx
000 Xxxxx Xxxxxxxxx Xxxxxxxxx
X.X. Xxx 000
Xx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx and Xxxxx X. Xxxxxxx
Telecopy No.: (000) 000-0000
(3) if to EchoStar:
0000 Xxxxx Xxxxx Xx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxxx, General Counsel
Telecopy No.: (000) 000-0000
with a copy to:
Xxxxxxxx & Xxxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx and Xxxx X. X'Xxxxx
Telecopy No.: (000) 000-0000
Section 9.3. Interpretation; Absence of Presumption.
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(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", "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 hereto) and not to any particular provision of this
Agreement, and Article, Section, paragraph and Exhibit references are to the
Articles, Sections, paragraphs and Exhibits to this Agreement unless otherwise
specified, (iii) the use of the word "including" and words of similar import
when used in this Agreement shall mean "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) 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, (viii) "cash" means dollars in immediately
available funds and (ix) the phrase "the date hereof" means the date of this
Agreement.
(b) 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.
(c) 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.
Section 9.4. 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.
Section 9.5. Entire Agreement; Severability.
(a) This Agreement (including the documents and the instruments
referred to herein) and the Confidentiality Agreement contain the entire
agreement between the parties with respect to the subject matter hereof, and
supersede all previous agreements, negotiations, discussions, writings,
understandings, commitments and conversations with respect to such subject
matter, and 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
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economic or legal substance of the transactions contemplated hereby is not
affected in any manner adverse to either 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.
Section 9.6. Third Party Beneficiaries. Except with respect to the
provisions of Sections 5.1(f) and 5.2(b) and the intended beneficiaries thereof,
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 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.
Section 9.7. Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of Delaware without
regard to principles of conflicts of law.
Section 9.8. 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.
Section 9.9. 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 hereto; provided, however, that each of GM
and Xxxxxx shall have the right to assign all or any part of its rights,
interests or obligations under this Agreement to any parent thereof (whether as
a result of recapitalization, reorganization, merger or otherwise), and, in
connection with any such assignment, if and to the extent requested by any of
the parties hereto, the parties shall restate this Agreement in its entirety to
reflect such assignment and execute and deliver to each other any such
restatement of this Agreement, except that no such assignment shall relieve GM
or Xxxxxx of any of their respective obligations hereunder or be permitted
without the prior written consent of EchoStar if any such assignment would have
an adverse effect on EchoStar or, after the Merger Effective Time, Xxxxxx,
including with respect to any potential tax or other liabilities or obligations.
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.
* * * * * *
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IN WITNESS WHEREOF, each of the undersigned, intending to be legally
bound, has caused this Agreement to be duly executed and delivered on the date
first above written.
GENERAL MOTORS CORPORATION
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------------------------
Name: Xxxxxx X. Xxxxxxxx
------------------------------------------
Title: Assistant General Counsel
------------------------------------------
XXXXXX ELECTRONICS CORPORATION
By: /s/ Xxxxx X. Xxxxxx
------------------------------------------
Name: Xxxxx X. Xxxxxx
------------------------------------------
Title: Vice President
------------------------------------------
ECHOSTAR COMMUNICATIONS CORPORATION
By: /s/ Xxxxx X. Xxxxxxxxx
------------------------------------------
Name: Xxxxx X. Xxxxxxxxx
------------------------------------------
Title: Senior Vice President, General Counsel
and Secretary
------------------------------------------
