Exhibit 99.2
Execution Copy
AGREEMENT AND PLAN OF MERGER
by and between
ECHOSTAR COMMUNICATIONS CORPORATION
AND
XXXXXX ELECTRONICS CORPORATION
Dated as of October 28, 2001
TABLE OF CONTENTS
ARTICLE 1 THE MERGER...................................................... 5
Section 1.1. The Merger................................................ 5
Section 1.2. Merger Effective Time; Closing............................ 5
Section 1.3. Effects of the Merger..................................... 5
Section 1.4. Certificate of Incorporation and By-laws.................. 5
Section 1.5. Surviving Corporation Board and Officers.................. 6
Section 1.6. Management Transition Committee........................... 6
Section 1.7. Additional Actions........................................ 6
ARTICLE 2 CONVERSION OF SECURITIES........................................ 6
Section 2.1. Conversion of Capital Stock............................... 6
Section 2.2. Exchange of Certificates.................................. 7
Section 2.3. No Fractional Share Certificates.......................... 9
Section 2.4. Exchange Fund Matters..................................... 9
Section 2.5. Treatment of EchoStar Stock Options....................... 10
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF ECHOSTAR...................... 12
Section 3.1. Organization and Standing................................. 12
Section 3.2. Subsidiaries.............................................. 12
Section 3.3. Corporate Power and Authority............................. 13
Section 3.4. Capitalization of EchoStar................................ 13
Section 3.5. Conflicts, Consents and Approvals......................... 14
Section 3.6. EchoStar SEC Documents.................................... 15
Section 3.7. Financial Statements; Liabilities......................... 15
Section 3.8. Absence of Certain Changes................................ 16
Section 3.9. Compliance with Law....................................... 16
Section 3.10. Litigation................................................ 16
Section 3.11. Taxes..................................................... 17
Section 3.12. Environmental and Safety Matters.......................... 17
Section 3.13. Employee Benefit Plans.................................... 18
Section 3.14. Intellectual Property..................................... 19
Section 3.15. Contracts................................................. 20
Section 3.16. Brokerage and Finder's and Other Fees; Opinion of
Financial Advisor......................................... 20
Section 3.17. Board and Stockholder Approval............................ 20
Section 3.18. Takeover Laws............................................. 21
i
TABLE OF CONTENTS
(continued)
Section 3.19. Restrictive Agreements.................................... 21
Section 3.20. Permits................................................... 21
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF XXXXXX....................... 22
Section 4.1. Organization and Standing................................. 22
Section 4.2. Subsidiaries.............................................. 23
Section 4.3. Corporate Power and Authority............................. 23
Section 4.4. Capitalization of Xxxxxx.................................. 23
Section 4.5. Conflicts, Consents and Approvals......................... 24
Section 4.6. Xxxxxx SEC Documents...................................... 25
Section 4.7. Financial Statements; Liabilities......................... 25
Section 4.8. Absence of Certain Changes................................ 26
Section 4.9. Compliance with Law....................................... 26
Section 4.10. Litigation................................................ 26
Section 4.11. Taxes..................................................... 26
Section 4.12. Environmental and Safety Matters.......................... 27
Section 4.13. Employee Benefit Plans.................................... 27
Section 4.14. Intellectual Property..................................... 28
Section 4.15. Contracts................................................. 29
Section 4.16. Brokerage and Finder's and Other Fees; Opinions of
Financial Advisors........................................ 29
Section 4.17. Board and Stockholder Approval............................ 30
Section 4.18. Takeover Laws............................................. 30
Section 4.19. Restrictive Agreements.................................... 30
Section 4.20. Permits................................................... 30
Section 4.21. Indian Entities........................................... 31
ARTICLE 5 COVENANTS OF THE PARTIES....................................... 31
Section 5.1. Mutual Covenants.......................................... 31
Section 5.2. Covenants of EchoStar..................................... 38
Section 5.3. Covenants of Xxxxxx....................................... 41
ARTICLE 6 CONDITIONS..................................................... 46
Section 6.1. Mutual Conditions......................................... 46
Section 6.2. Conditions to Obligations of Xxxxxx....................... 49
Section 6.3. Conditions to Obligations of EchoStar..................... 50
ARTICLE 7 TERMINATION AND AMENDMENT...................................... 51
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TABLE OF CONTENTS
(continued)
Section 7.1. Termination................................................ 51
Section 7.2. Effect of Termination; Fees and Expenses upon Termination.. 55
Section 7.3. Amendment.................................................. 56
Section 7.4. Extension; Waiver.......................................... 56
ARTICLE 8 MISCELLANEOUS.................................................. 56
Section 8.1. No Survival of Representations and Warranties.............. 56
Section 8.2. Notices.................................................... 56
Section 8.3. Interpretation; Absence of Presumption..................... 57
Section 8.4. Knowledge.................................................. 58
Section 8.5. Counterparts............................................... 58
Section 8.6. Entire Agreement; Severability............................. 58
Section 8.7. Third Party Beneficiaries.................................. 58
Section 8.8. Governing Law.............................................. 59
Section 8.9. Jurisdiction............................................... 59
Section 8.10. Specific Performance....................................... 59
Section 8.11. Assignment................................................. 59
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INDEX OF DEFINED TERMS
Action.................................................................... 17
Affiliate List............................................................ 37
Agreement................................................................. 1
Antitrust Law............................................................. 32
Applicable Law............................................................ 16
Articles of Merger........................................................ 5
Assumed PanAmSat Minority Share Consideration............................. 47
Certificate of Merger..................................................... 5
Certificates.............................................................. 7
Class A Exchange Ratio.................................................... 7
Closing................................................................... 5
Closing Date.............................................................. 5
Code...................................................................... 4
Combined Companies Material Adverse Effect................................ 46
Competing Transaction..................................................... 35
Confidentiality Agreement................................................. 34
Consent Solicitation Failure.............................................. 52
Delaware Certificate of Merger............................................ 5
Delaware Secretary of State............................................... 5
DGCL...................................................................... 5
EchoStar.................................................................. 1
EchoStar 10-K............................................................. 12
EchoStar 10-Q............................................................. 12
EchoStar Class A Common Stock............................................. 7
EchoStar Class B Common Stock............................................. 7
EchoStar Class C Common Stock............................................. 14
EchoStar Controlling Stockholder.......................................... 3
EchoStar Disclosure Schedule.............................................. 12
EchoStar ERISA Affiliate.................................................. 18
EchoStar FCC Licenses..................................................... 21
EchoStar Indemnified Parties.............................................. 44
EchoStar Indentures....................................................... 40
EchoStar Intellectual Property............................................ 19
EchoStar Material Adverse Effect.......................................... 12
EchoStar Notes............................................................ 40
EchoStar Permit Entities.................................................. 21
EchoStar Permits.......................................................... 21
EchoStar Plans............................................................ 18
EchoStar SEC Documents.................................................... 12
EchoStar Series A Preferred Stock......................................... 14
EchoStar Series B Preferred Stock......................................... 14
EchoStar Series C Preferred Stock......................................... 14
EchoStar Shares........................................................... 7
EchoStar Stockholder Consent.............................................. 3
EchoStar Transaction Agreements........................................... 13
Employee Matters Agreement................................................ 3
Environmental and Safety Requirements..................................... 17
ERISA..................................................................... 18
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INDEX OF DEFINED TERMS
(continued)
Exchange Act.............................................................. 11
Exchange Agent............................................................ 7
Exchange Debt............................................................. 2
Exchange Fund............................................................. 7
Exchange Shares........................................................... 1
FCC....................................................................... 21
FCC Consent Application................................................... 32
FCC Regulation............................................................ 33
GM $1-2/3 Common Stock.................................................... 2
GM Certificate of Incorporation........................................... 1
GM Debt/Equity Exchange................................................... 2
GM Series H Preference Stock.............................................. 2
GM Transactions........................................................... 2
GM/Xxxxxx Intellectual Property Agreement................................. 4
GM/Xxxxxx Separation Agreement............................................ 3
Governmental Authority.................................................... 7
HCG....................................................................... 1
HCI....................................................................... 1
HCSS...................................................................... 1
HSR Act................................................................... 15
HSSL...................................................................... 31
HTIL...................................................................... 31
Xxxxxx.................................................................... 1
Xxxxxx 10-K............................................................... 22
Xxxxxx 10-Q............................................................... 22
Xxxxxx Amended and Restated By-laws....................................... 6
Xxxxxx Amended and Restated Certificate of Incorporation.................. 6
Xxxxxx Class A Common Stock............................................... 7
Xxxxxx Class B Common Stock............................................... 7
Xxxxxx Class C Common Stock............................................... 1
Xxxxxx Common Stock....................................................... 7
Xxxxxx Disclosure Schedule................................................ 23
Xxxxxx ERISA Affiliate.................................................... 28
Xxxxxx Exchange Option.................................................... 11
Xxxxxx FCC Licenses....................................................... 30
Xxxxxx Intellectual Property.............................................. 28
Xxxxxx Material Adverse Effect............................................ 22
Xxxxxx Permit Entities.................................................... 30
Xxxxxx Permits............................................................ 30
Xxxxxx Plans.............................................................. 27
Xxxxxx Preference Stock................................................... 2
Xxxxxx Recapitalization................................................... 1
Xxxxxx SEC Documents...................................................... 22
Xxxxxx Transaction Agreements............................................. 23
Implementation Agreement.................................................. 4
Intellectual Property..................................................... 19
Interim EchoStar Stock.................................................... 48
Merger.................................................................... 1
Merger Commitment Letter.................................................. 2
v
INDEX OF DEFINED TERMS
(continued)
Merger Effective Time..................................................... 5
Merger Financing.......................................................... 2
Merger Financing Agreement................................................ 3
Minimum Amount............................................................ 48
Nasdaq.................................................................... 12
Nevada Secretary of State................................................. 5
Notice of Non-Recommendation.............................................. 53
NRS....................................................................... 5
NYSE...................................................................... 9
Option.................................................................... 10
Outside Date.............................................................. 51
PanAmSat.................................................................. 1
PanAmSat Financing Agreement.............................................. 3
PanAmSat Purchase Financing............................................... 3
PanAmSat Stock Purchase Agreement......................................... 1
PanAmSat Stock Sale....................................................... 1
Permits................................................................... 21
Permitted Equity Issuances................................................ 38
Person.................................................................... 7
Plan...................................................................... 40
Release................................................................... 18
Representatives........................................................... 35
SEC....................................................................... 11
Securities Act............................................................ 14
Series A Preferred Stock.................................................. 23
Settlement................................................................ 33
Significant Subsidiary.................................................... 13
Spin-Off.................................................................. 2
Subsidiary................................................................ 13
Surviving Corporation..................................................... 5
tax....................................................................... 17
Tax Certificates.......................................................... 34
Tax Opinions.............................................................. 34
Termination Fee........................................................... 55
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EXHIBITS
Exhibit A -- Terms of Amended and Restated Certificate of Incorporation and
Amended and Restated Bylaws of Xxxxxx
Exhibit B -- Form of EchoStar Tax Opinion
Exhibit C -- Form of Xxxxxx Tax Opinion
Exhibit D -- Form of EchoStar Tax Letter
Exhibit E -- Form of Xxxxxx Tax Letter
Exhibit F -- Form of EchoStar Controlling Stockholder Tax Letter
Exhibit G -- Form of Affiliate Agreement
Exhibit H -- Directors, Officers and Committees of Xxxxxx
Exhibit I -- Employee Matters Agreement
vii
SCHEDULES
---------
EchoStar Disclosure Schedule
-----------------------------
Section 3.2 Subsidiaries
Section 3.4 Capitalization of EchoStar
Section 3.5 Conflicts, Consents and Approvals
Section 3.7 Financial Statements; Liabilities
Section 3.8 Absence of Certain Changes
Section 3.9 Compliance with Law
Section 3.10 Litigation
Section 3.12 Environmental and Safety Matters
Section 3.13 Employee Benefit Plans
Section 3.14 Intellectual Property
Section 3.15 Contracts
Section 3.19 Restrictive Agreements
Section 3.20 Permits
Section 5.2(a) Covenants of EchoStar (Conduct of EchoStar's Operations)
Section 5.2(e) EchoStar Notes
Section 5.3(g) Supplemental Indentures and Registration Rights Regarding
Certain EchoStar Notes
viii
Xxxxxx Disclosure Schedule
---------------------------
Section 4.2 Subsidiaries
Section 4.4(c) Outstanding Subscriptions, Options, etc.
Section 4.5 Conflicts, Consents and Approvals
Section 4.7 Financial Statements; Liabilities
Section 4.8 Absence of Certain Changes
Section 4.9 Compliance with Law
Section 4.10 Litigation
Section 4.12 Environmental and Safety Matters
Section 4.13 Employee Benefit Plans
Section 4.14 Intellectual Property
Section 4.15 Contracts
Section 4.19 Restrictive Agreements
Section 4.20 Permits
Section 5.3(a) Covenants of Xxxxxx (Conduct of Xxxxxx' Operations)
ix
AGREEMENT AND PLAN OF MERGER
This Agreement and Plan of Merger (this "Agreement") is made and entered into as
of October 28, 2001, by and between EchoStar Communications Corporation, a
Nevada corporation ("EchoStar"), and Xxxxxx Electronics Corporation, a Delaware
corporation ("Xxxxxx").
WHEREAS, Xxxxxx and EchoStar desire to combine the business of
EchoStar with the Xxxxxx Business (as defined in the Implementation Agreement
(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 more fully provided herein; 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 Stock
Purchase Agreement (the "PanAmSat Stock Purchase Agreement"), entered into by
and among Xxxxxx, Xxxxxx Communications Galaxy, Inc., a California corporation
and an indirect wholly owned subsidiary of Xxxxxx ("HCG"), Xxxxxx Communications
Satellite Services, Inc., a California corporation and an indirect wholly owned
subsidiary of Xxxxxx ("HCSS"), and Xxxxxx Communications, Inc. a California
corporation and an indirect wholly owned subsidiary of Xxxxxx ("HCI"),
concurrently with the execution and delivery of this Agreement, in the form
attached to the Implementation Agreement as Exhibit A, HCI, HCG and HCSS have
agreed to sell to EchoStar, and EchoStar has agreed to purchase from HCI, HCG
and HCSS (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 Amended
and 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
Implementation Agreement), GM may, pursuant to one or more transactions, issue
shares of 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
provisions of 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) of the
Implementation Agreement 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, if any,
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 the Implementation 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
the Implementation Agreement (the transactions described in clauses (i) through
(iii) above are 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 the Implementation Agreement, the
GM/Xxxxxx Separation Agreement and the transactions contemplated thereby,
including the GM Charter Amendment (as defined in the Implementation Agreement),
the Xxxxxx Recapitalization and the Spin-Off (collectively, the "GM
Transactions"); and
WHEREAS, a certain lender has delivered a commitment letter to Xxxxxx
and EchoStar pursuant to which it has committed to lend to Xxxxxx (prior to the
Merger Effective Time) and the Surviving Corporation (as defined below)
(immediately after the Merger Effective Time) 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 to the Implementation Agreement as Exhibit B, or on
the terms set forth in any similar commitment or financing letter or other
agreement replacing, and having substantially the same effect as, the commitment
letter attached to the Implementation Agreement 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 to which Xxxxxxx X. Xxxxx is the sole trustee (the "EchoStar Controlling
Stockholder") are
2
concurrently entering into that certain Supplemental Agreement & Guaranty (the
"Supplemental Agreement"), in the form attached to the Implementation Agreement
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 to the Implementation Agreement 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 lender
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; 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 lender 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;
and
WHEREAS, the EchoStar Controlling Stockholder, acting by written
consent immediately after the execution of this 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 to the
Implementation Agreement as Exhibit E, adopting and approving this Agreement,
and, as a result of the EchoStar Stockholder Consent, no further approval of
this Agreement by the EchoStar Board of Directors or 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 to the Implementation Agreement 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 previously entered into by and among GM, Xxxxxx
and certain other parties thereto, or to be entered into by and between GM and
Xxxxxx concurrently with the execution and delivery of this Agreement, as
applicable, (ii) the Employee Matters Agreement (the "Employee Matters
Agreement") entered into by and between
3
EchoStar and Xxxxxx concurrently with the execution and delivery of this
Agreement, in the form attached as Exhibit J of this Agreement, and (iii) 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 B to
the GM/Xxxxxx Separation Agreement; and
WHEREAS, GM, Xxxxxx and EchoStar have entered into an Implementation
Agreement, dated as of the date hereof (the "Implementation Agreement"), setting
forth, among other things, the rights and obligations of GM with respect to the
consummation of the GM Transactions; and
WHEREAS, the Spin-Off will occur pursuant to the terms and conditions
of the Implementation Agreement; 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
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 this Agreement and the other
agreements referred to herein to which each is a party, as applicable, (iii) the
respective Boards of Directors of GM, Xxxxxx and EchoStar have approved the
Implementation Agreement, the PanAmSat Stock Purchase 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 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 sole stockholder
approve and adopt this Agreement and GM, in its capacity as the sole stockholder
of Xxxxxx shall have, at a meeting to be held immediately after the execution of
this Agreement, adopted and approved this Agreement, (vii) the Board of
Directors of EchoStar has recommended that its stockholders approve and adopt
this Agreement and the EchoStar Controlling Stockholder, in his capacity as
controlling stockholder of EchoStar, shall have, acting by written consent,
immediately after the execution of this Agreement, adopted and approved this
Agreement and (viii) the Board of Directors of Xxxxxx has approved the Xxxxxx
Charter Amendments (as defined in the Implementation Agreement) and GM shall, in
its capacity as the sole stockholder of Xxxxxx, at a meeting to be held
immediately after the execution of this Agreement, adopt and approve 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
4
consideration, the receipt and sufficiency of which are hereby acknowledged, and
intending to be legally bound hereby, the parties hereto hereby agree as
follows:
ARTICLE 1
THE MERGER
Section 1.1. The Merger. Upon the terms and subject to the
conditions hereof, and in accordance with the provisions of the General
Corporation Law of the State of Delaware (as amended from time to time, the
"DGCL") and the Nevada Revised Statutes (as amended from time to time, the
"NRS"), EchoStar shall merge with and into Xxxxxx as soon as practicable
following the satisfaction or waiver of the conditions set forth in Article 6.
Following the Merger, the separate corporate existence of EchoStar shall cease,
and Xxxxxx shall continue its existence under the laws of the State of Delaware.
Xxxxxx, in its capacity as the corporation surviving the Merger, is hereinafter
sometimes referred to as the "Surviving Corporation."
Section 1.2. Merger Effective Time; Closing. The Merger shall be
consummated by filing with (a) the Secretary of State of the State of Delaware
(the "Delaware Secretary of State") a certificate of merger (the "Delaware
Certificate of Merger") in such form as is required by and executed in
accordance with the DGCL, and (b) the Secretary of State of the State of Nevada
(the "Nevada Secretary of State") articles of merger (the "Articles of Merger")
in such form as is required by and executed in accordance with the NRS. The
Certificate of Merger and the Articles of Merger shall be referred to herein as
the "Certificate of Merger." The Merger shall become effective when the Delaware
Certificate of Merger has been filed with the Delaware Secretary of State and
the Articles of Merger have been filed with the Nevada Secretary of State, or at
such later time as shall be specified in each Certificate of Merger (the "Merger
Effective Time"). Prior to the filings referred to in this Section 1.2, a
closing (the "Closing") shall be held at the offices of Weil, Gotshal & Xxxxxx
LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, or such other place as the parties
hereto may agree, on a date to be mutually agreed to by the parties hereto,
which shall in any event be no later than the later to occur of (A) the earlier
to occur of sixteen (16) Business Days (as defined in the Implementation
Agreement) after (x) the date on which the condition set forth in Section 6.1(b)
shall have been satisfied and (y) the date on which the Department of Justice or
the Federal Trade Commission (as the case may be) and the parties shall have
executed a consent decree or other settlement permitting the consummation of the
Merger, provided that EchoStar shall have the right to reduce the time period
from sixteen (16) to as little as five (5) Business Days in the case of (x) and
(y) upon prior written notification to Xxxxxx and (B) if the time periods in
Section 1.2(A)(x) or (y) have expired, but all of the other conditions set forth
in Article VI have not been fulfilled or waived, one (1) business day after the
day on which the last to be fulfilled or waived of the conditions set forth in
Article 6 hereof shall have been fulfilled or waived (other than any of such
conditions that by their nature are to be fulfilled at the Closing, but subject
to the fulfillment or waiver of such conditions) (the "Closing Date").
Section 1.3. Effects of the Merger. From and after the Merger
Effective Time, the Merger shall have the effects set forth in this Agreement,
the Certificate of Merger, the DGCL and the NRS.
Section 1.4. Certificate of Incorporation and By-laws. The
Certificate of Merger shall provide that, at the Merger Effective Time (a) the
Certificate of Incorporation of Xxxxxx shall be amended and restated to provide
that the name of the Surviving Corporation shall
5
be EchoStar Communications Corporation and to embody the terms set forth on
Exhibit A hereto, with such changes as shall be mutually agreed between the
parties prior to the Mailing Date (as so amended, the "Xxxxxx Amended and
Restated Certificate of Incorporation") and, as so amended, shall be the
certificate of incorporation of the Surviving Corporation until thereafter
amended in accordance with the terms thereof and the DGCL and (b) the Amended
and Restated By-laws of Xxxxxx shall be amended and restated to embody the
relevant terms set forth on Exhibit A hereto, with such changes as shall be
mutually agreed between the parties prior to the Mailing Date (as so amended,
the "Xxxxxx Amended and Restated By-laws") and, as so amended, shall be the By-
laws of the Surviving Corporation until thereafter amended in accordance with
the terms thereof and the DGCL.
Section 1.5. Surviving Corporation Board and Officers. From and
after the Merger Effective Time the directors and certain officers of the
Surviving Corporation shall be determined as provided in Section 5.3(c) of this
Agreement until their respective successors are duly elected or appointed and
qualified in accordance with Applicable Law.
Section 1.6. Management Transition Committee. The parties agree
promptly to establish a Management Transition Committee comprised of the Chief
Executive Officer of EchoStar, one other EchoStar senior executive, the Chief
Executive Officer of Xxxxxx and one other Xxxxxx senior executive (and with such
other members as may be appointed by the unanimous approval of such four (4)
members) to assure a smooth and fair transition of the two companies'
managements to a combined management team. This committee will, among other
functions, make recommendations regarding the post-Merger Effective Time
officers and other key management team members of the Surviving Corporation, and
the respective responsibilities of such persons, with the objective of choosing
the best person for each position while also achieving a fair balance of
personnel selected from EchoStar and Xxxxxx. This committee will continue for at
least one year after the Merger Effective Time to make recommendations to the
Board of Directors of the Surviving Corporation on such matters and such other
matters as the Board of Directors of the Surviving Corporation may request;
provided that the Board of Directors of the Surviving Corporation at and after
the Merger Effective Time shall have the ultimate decision-making authority with
respect to all matters referred to or discussed by the Management Transition
Committee.
Section 1.7. Additional Actions. If, at any time after the Merger
Effective Time, the Surviving Corporation shall consider or be advised that any
further deeds, assignments or assurances in law or any other acts are necessary
or desirable to (a) vest, perfect or confirm, of record or otherwise, in the
Surviving Corporation its right, title or interest in, to or under any of the
rights, properties or assets of EchoStar, (b) comply with any filing, recording
or other requirement of any Applicable Law in connection with the Merger or (c)
otherwise carry out the provisions of this Agreement, the directors and officers
of the Surviving Corporation are authorized in the name of EchoStar or Xxxxxx,
as the case may be, or otherwise to take any and all such action.
ARTICLE 2
CONVERSION OF SECURITIES
Section 2.1. Conversion of Capital Stock. At and as of the Merger
Effective Time, by virtue of the Merger and without any action on the part of
Xxxxxx, EchoStar, any holder of Class A common stock, par value $0.01 per share
of EchoStar (the "EchoStar Class A
6
Common Stock"), any holder of Class B common stock, par value $0.01 per share,
of EchoStar (the "EchoStar Class B Common Stock" and, together with the EchoStar
Class A Common Stock, the "EchoStar Shares"), any holder of Xxxxxx Class A
Common Stock, or any foreign, federal, state or local governmental or regulatory
body, agency, instrumentality or authority (a "Governmental Authority") or any
other individual, corporation, limited liability company, partnership, trust or
unincorporated organization (each, a "Person"):
(a) subject to Section 2.3 below, each share of EchoStar Class A
Common Stock that is issued and outstanding immediately prior to the Merger
Effective Time shall be converted into and represent 1/.73 shares of Class A
common stock, par value $0.01 per share (the "Class A Exchange Ratio"), of
Xxxxxx (the "Xxxxxx Class A Common Stock");
(b) subject to Section 2.3 below, each share of EchoStar Class B
Common Stock that is issued and outstanding immediately prior to the Merger
Effective Time shall be converted into and represent 1/.73 shares of Class B
common stock, par value $0.01 per share (the "Class B Exchange Ratio" and
together with the Class A Exchange Ratio, the "Exchange Ratios"), of Xxxxxx (the
"Xxxxxx Class B Common Stock" and, together with the Xxxxxx Class A Common Stock
and the Xxxxxx Class C Common Stock, the "Xxxxxx Common Stock");
(c) each share of Xxxxxx Class C Common Stock that is issued and
outstanding immediately prior to the Merger Effective Time shall remain
outstanding;
(d) each other share of Xxxxxx capital stock, including the Xxxxxx
Preference Stock if any, that is issued and outstanding immediately prior to the
Merger Effective Time shall remain outstanding; and
(e) each share of capital stock of EchoStar held in the treasury of
EchoStar shall be cancelled and retired and no payment shall be made in respect
thereof.
Section 2.2. Exchange of Certificates.
(a) Exchange Agent. Following the Merger Effective Time, Xxxxxx
shall deposit with the exchange agent designated by Xxxxxx with EchoStar's prior
approval, which shall not be unreasonably withheld (the "Exchange Agent"), as
required for exchange in accordance with this Section 2.2, certificates (in a
form to be determined in EchoStar's sole discretion) representing (or other
evidence of ownership of) shares of Xxxxxx Class A Common Stock and Xxxxxx Class
B Common Stock issuable pursuant to Section 2.1(a) and (b) in exchange for
shares of EchoStar Class A Common Stock and EchoStar Class B Common Stock,
respectively, outstanding immediately prior to the Merger Effective Time upon
due surrender of the Certificates (as defined below) (or affidavits of loss in
lieu thereof) pursuant to the provisions of this Article 2 (such shares of
Xxxxxx Common Stock, together with any cash deposited with the Exchange Agent,
being hereinafter referred to as the "Exchange Fund").
(b) Exchange Procedures. As soon as practicable after the Merger
Effective Time, the Exchange Agent, pursuant to the terms of an exchange agent
agreement on terms and conditions acceptable to EchoStar and Xxxxxx, shall mail
to each holder of record of a certificate or certificates (or other evidence of
ownership) (the "Certificates") which immediately prior to the Merger Effective
Time represented outstanding shares of EchoStar Class A Common Stock or EchoStar
Class B Common Stock whose shares were converted into shares of Xxxxxx Class A
Common Stock or Xxxxxx Class B Common Stock pursuant to Section 2.1(a) or (b)
above: (i) a
7
letter of transmittal (which shall specify that delivery shall be effected, and
risk of loss and title to the Certificates shall pass, only upon delivery of the
Certificates (or affidavits in lieu thereof) to the Exchange Agent and shall be
in such form and have such other provisions as Xxxxxx may specify and which are
reasonably acceptable to EchoStar), and (ii) instructions for effecting the
surrender of the Certificates in exchange for certificates representing (or
other evidence of ownership of) shares of Xxxxxx Class A Common Stock or Xxxxxx
Class B Common Stock, as applicable, and cash in lieu of fractional shares. Upon
surrender of a Certificate for cancellation to the Exchange Agent, together with
a duly executed letter of transmittal, the holder of such Certificate shall be
entitled to receive in exchange therefor (x) a certificate representing (or
other evidence of ownership of) that number of shares of Xxxxxx Class A Common
Stock or Xxxxxx Class B Common Stock, as applicable, which such holder has the
right to receive pursuant to Section 2.1(a) or (b) above and (y) a check
representing the amount of unpaid dividends and distributions, if any, which
such holder has the right to receive pursuant to the provisions of this Article
2, and the amount of cash payable to such holder in lieu of fractional shares
pursuant to Section 2.3, in each case after giving effect to any required
withholding tax pursuant to Section 2.4(c) below, and the shares represented by
the Certificate so surrendered shall forthwith be cancelled. No interest will be
paid or accrued on cash in lieu of fractional shares, unpaid dividends and
distributions, if any, payable to holders of EchoStar Shares. In the event of a
transfer of ownership of EchoStar Shares which is not registered on the transfer
records of EchoStar, a certificate representing (or other evidence of ownership
of) the proper number of shares of Xxxxxx Class A Common Stock or Xxxxxx Class B
Common Stock, as applicable, together with a check for the cash to be paid in
lieu of unpaid dividends and distributions, if any, and in lieu of fractional
shares, in each case without interest, may be issued to such transferee if the
Certificate formerly representing such EchoStar Shares held by such transferee
is presented to the Exchange Agent, accompanied by all documents required to
evidence and effect such transfer and to evidence that any applicable stock
transfer taxes have been paid. Until surrendered as contemplated by this Section
2.2, each Certificate shall be deemed at any time after the Merger Effective
Time to represent that number of whole shares of Xxxxxx Class A Common Stock or
Xxxxxx Class B Common Stock into which the shares of EchoStar Class A Common
Stock or EchoStar Class B Common Stock formerly represented by such Certificates
shall have been converted in the Merger, together with the right to receive any
unpaid dividends and distributions and cash in lieu of fractional shares. At the
option of Xxxxxx, shares of Xxxxxx Class A Common Stock and Xxxxxx Class B
Common Stock to be issued in the Merger need not be certificated, but may be
evidenced on the books and records of Xxxxxx or its transfer agent, but Xxxxxx'
stockholders will be given the opportunity to receive certificates upon request
in accordance with Applicable Law.
(c) Distributions With Respect to Unexchanged Shares. Notwithstanding
any other provisions of this Agreement, no dividends or other distributions
declared or made after the Merger Effective Time with respect to shares of
Xxxxxx Class A Common Stock or Xxxxxx Class B Common Stock having a record date
after the Merger Effective Time shall be paid to the holder of any unsurrendered
Certificate, until the holder shall surrender such Certificate as provided in
this Section 2.2. Subject to the effect of Applicable Law, following surrender
of any such Certificate, there shall be paid to the holder of the certificates
representing (or other evidence of ownership of) shares of Xxxxxx Class A Common
Stock or Xxxxxx Class B Common Stock, as applicable, issued in exchange
therefor, without interest, (i) promptly following such surrender, the amount of
dividends or other distributions with a record date after the Merger Effective
Time theretofore payable with respect to such shares of Xxxxxx Common Stock and
not paid, less the amount of any withholding taxes which may be required thereon
pursuant to
8
Section 2.4(c) below, and (ii) at the appropriate payment date subsequent to
surrender, the amount of dividends or other distributions with a record date
after the Merger Effective Time but prior to surrender and a payment date
subsequent to surrender payable with respect to such shares of Xxxxxx Common
Stock, less the amount of any withholding taxes which may be required thereon.
(d) No Further Ownership Rights in EchoStar Shares. All shares of
Xxxxxx Class A Common Stock and Xxxxxx Class B Common Stock issued upon
surrender of Certificates in accordance with the terms hereof (including any
cash paid pursuant to this Article 2) shall be deemed to have been issued in
full satisfaction of all rights pertaining to such shares of EchoStar Class A
Common Stock or EchoStar Class B Common Stock represented thereby, and from and
after the Merger Effective Time there shall be no further registration of
transfers of shares of EchoStar Class A Common Stock or EchoStar Class B Common
Stock on the stock transfer books of EchoStar. If, after the Merger Effective
Time, Certificates are presented to the Surviving Corporation for any reason,
they shall be cancelled and exchanged as provided in this Section 2.2.
(e) Fees and Expenses of Exchange Agent. The Surviving Corporation
shall pay all fees and expenses of the Exchange Agent.
Section 2.3. No Fractional Share Certificates. No fractional shares
of Xxxxxx Class A Common Stock or Xxxxxx Class B Common Stock shall be issued in
the Merger, no dividend or distribution with respect to Xxxxxx Class A Common
Stock or Class B Common Stock shall be payable on or with respect to any such
fractional share interest, and such fractional share interest shall not entitle
the owner thereof to any rights as a stockholder of Xxxxxx. In lieu thereof, the
Surviving Corporation shall pay to the Exchange Agent promptly after the Merger
Effective Time cash sufficient as to allow the Exchange Agent to pay each owner
of such fractional share interest an amount in cash equal to the fraction of a
share of Xxxxxx Class A Common Stock or Xxxxxx Class B Common Stock, as
applicable, to which such owner would have been otherwise entitled multiplied by
the closing price of a share of Xxxxxx Class A Common Stock, as reported on the
New York Stock Exchange, Inc. ("NYSE") composite transactions reporting system
as reported in the New York City edition of the Wall Street Journal, or if not
reported therein, another authoritative source, for the trading day immediately
following the day on which the Merger Effective Time occurs, without interest
and net of any required withholding, subject to and in accordance with the terms
of this Agreement. For purposes of determining whether a Person holds a
fractional share of Xxxxxx Class A Common Stock or Xxxxxx Class B Common Stock,
all shares of Xxxxxx Class A Common Stock that a holder of shares of EchoStar
Class A Common Stock would otherwise be entitled to receive as a result of the
Merger shall be aggregated and all shares of Xxxxxx Class B Common Stock that a
holder of shares of EchoStar Class B Common Stock would otherwise be entitled to
receive as a result of the Merger shall be aggregated.
Section 2.4. Exchange Fund Matters.
(a) No Liability. None of the parties hereto, the Exchange Agent or
the Surviving Corporation shall be liable to any Person in respect of any shares
of Xxxxxx Class A Common Stock or Xxxxxx Class B Common Stock (or dividends or
distributions with respect thereto) or cash from the Exchange Fund delivered to
a public official pursuant to any applicable abandoned property, escheat or
similar law. If any Certificates shall not have been surrendered prior to seven
years after the Merger Effective Time (or immediately prior to such earlier date
on
9
which any cash, any dividends or distributions with respect to whole shares of
Xxxxxx Class A Common Stock or Xxxxxx Class B Common Stock in respect of such
Certificate would otherwise escheat to or become the property of any
Governmental Authority), any such cash, dividends or distributions in respect of
such Certificate shall, to the extent permitted by Applicable Law, become the
property of Xxxxxx, free and clear of all claims or interest of any Person
previously entitled thereto.
(b) Investment of Exchange Fund. The Exchange Agent shall invest any
cash included in the Exchange Fund, as directed by the Surviving Corporation, on
a daily basis. Any interest and other income resulting from such investments
shall be paid to the Surviving Corporation upon termination of the Exchange Fund
pursuant to Section 2.4(d).
(c) Withholding Rights. The Exchange Agent, on behalf of the Surviving
Corporation, shall be entitled to deduct and withhold from the consideration
otherwise payable pursuant to this Agreement to any holder of EchoStar Class A
Common Stock or EchoStar Class B Common Stock such amounts as may be required to
be deducted and withheld with respect to the making of such payment under the
Code, or under any provision of state, local or foreign tax law. To the extent
that amounts are so withheld and paid over to the appropriate taxing authority,
such withheld amounts will be treated for all purposes of this Agreement as
having been paid to the holder of EchoStar Class A Common Stock or EchoStar
Class B Common Stock in respect of which such deduction and withholding was
made.
(d) Lost, Stolen or Destroyed Certificates. In the event any
Certificate shall have been lost, stolen or destroyed, upon the making of an
affidavit of that fact by the person claiming such Certificate to be lost,
stolen or destroyed and, if required by the Surviving Corporation, the posting
by such person of a bond in customary amount as indemnity against any claim that
may be made against it with respect to such Certificate, the Exchange Agent will
issue in exchange for such lost, stolen or destroyed Certificate the shares of
Xxxxxx Class A Common Stock or Xxxxxx Class B Common Stock, as the case may be,
and any cash payable and any unpaid dividends or other distributions in respect
thereof pursuant to Article 2 upon due surrender of and deliverable in respect
of the EchoStar Shares represented by such Certificate pursuant to this
Agreement.
(e) Termination of Exchange Fund. Any portion of the Exchange Fund
which remains undistributed for six months after the Merger Effective Time shall
be delivered to the Surviving Corporation, and any holders of fractional
interests in Xxxxxx Class A Common Stock or Xxxxxx Class B Common Stock or any
holders of EchoStar Class A Common Stock or EchoStar Class B Common Stock
representing Xxxxxx Class A Common Stock or Xxxxxx Class B Common Stock who have
not theretofore complied with the provisions of this Article 2 shall thereafter
look only to the Surviving Corporation, as a general creditor thereof, for
satisfaction of their claims for Xxxxxx Class A Common Stock or Xxxxxx Class B
Common Stock, respectively, dividends and other distributions, if any, and any
cash in lieu of fractional shares thereof, as the case may be.
Section 2.5. Treatment of EchoStar Stock Options.
(a) Prior to the Merger Effective Time, Xxxxxx and EchoStar shall take
all such actions as may be necessary to cause each unexpired and unexercised
option, whether or not vested or exercisable, under stock option plans of
EchoStar with respect to EchoStar Class A Common Stock and EchoStar Class B
Common Stock, if any (each, an "Option"), to be
10
automatically converted at the Merger Effective Time into an option (a "Xxxxxx
Exchange Option") to purchase, on the same terms and conditions as were
applicable to each such Option immediately before the Merger Effective Time
(except for any changes in vesting rights or permitted time of exercise pursuant
to the terms of the stock option plans and stock option agreements in existence
on the date of this Agreement which result from the occurrence of the Merger),
the number of shares of Xxxxxx Class A Common Stock or Xxxxxx Class B Common
Stock equal to (x) the number of shares of EchoStar Class A Common Stock or
EchoStar Class B Common Stock, if any, as the case may be, subject to such
Option multiplied by (y) the Exchange Ratio (rounded up to the nearest whole
number) (that is, for each unexpired Option granted to an employee, the number
of shares under the Xxxxxx Exchange Option will be equal to the number of shares
of EchoStar Class A Common Stock or EchoStar Class B Common Stock, if any,
underlying such Option multiplied by the number of shares of Xxxxxx Class A
Common Stock or Xxxxxx Class B Common Stock referenced in Section 2.1(a)), at a
price per share (rounded down to the nearest cent) equal to (A) the exercise
price for the EchoStar Class A Common Stock or EchoStar Class B Common Stock, if
any, purchasable pursuant to such Option immediately prior to the Merger
Effective Time divided by (y) the Exchange Ratio (that is, for each Option
converted under this Section 2.5(a), the exercise price per share of the Xxxxxx
Exchange Option will equal the exercise price per share of the Option divided by
the number of shares of Xxxxxx Class A Common Stock or Xxxxxx Class B Common
Stock, as the case may be, referenced in Section 2.1(a)); 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 Xxxxxx Exchange Options, Xxxxxx shall
(i) reserve for issuance the number of shares of Xxxxxx Class A Common Stock and
Xxxxxx Class B Common Stock that will become subject to Xxxxxx Exchange Options
pursuant to this Section 2.5 and (ii) from and after the Merger Effective Time,
upon exercise of Xxxxxx Exchange Options, make available for issuance all shares
of Xxxxxx Class A Common Stock and Xxxxxx Class B Common Stock covered thereby,
subject to the terms and conditions applicable thereto.
(b) If and to the extent required by the terms of any applicable stock
option plans or pursuant to the terms of any applicable Options or restricted
stock units, EchoStar shall use commercially reasonable efforts to obtain the
consent of each holder of outstanding Options or restricted stock units to the
treatment of such Options and restricted stock units in accordance with this
Section 2.5.
(c) Prior to the Merger Effective Time, the Board of Directors of
Xxxxxx, or an appropriate committee of non-employee directors thereof, shall
adopt a resolution consistent with the interpretive guidance of the U.S.
Securities and Exchange Commission (the "SEC"), so that the disposition of the
Options and the acquisition of any shares of Xxxxxx Class A Common Stock and
Xxxxxx Class B Common Stock, any Xxxxxx Exchange Options or any other equity
securities or derivative securities of Xxxxxx pursuant to this Agreement by each
officer or director of EchoStar 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.
(d) Within thirty (30) days after the Merger Effective Time, Xxxxxx
shall file a registration statement or registration statements on Form S-8 or
another appropriate form with respect to the shares of Xxxxxx Common Stock
subject to the Xxxxxx Exchange Options, and shall use its commercially
reasonable efforts to maintain the effectiveness of such registration
11
statement(s) and maintain the current status of the prospectus(es) contained
therein for so long as such Xxxxxx Exchange Options remain outstanding. Xxxxxx
shall use commercially reasonable efforts to cause the shares of Xxxxxx Class A
Common Stock subject to such Xxxxxx Exchange Options to be approved for listing
on the NYSE or approved for quotation on the Nasdaq Stock Market ("Nasdaq")
within thirty (30) days after the Merger Effective Time.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF
ECHOSTAR
In order to induce Xxxxxx to enter into this Agreement, EchoStar
hereby represents and warrants to 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
(collectively with the EchoStar 10-K and EchoStar 10-Q, the "EchoStar SEC
Documents") filed 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 EchoStar and
EchoStar's Significant Subsidiaries (as defined below) is a corporation validly
existing and is in good standing under the laws of the State of Nevada, with
respect to EchoStar, 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 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 or have a material adverse
impact on its ability to consummate the transactions contemplated by the
EchoStar Transaction Agreements (as defined below). For the purposes of this
Agreement, a "EchoStar Material Adverse Effect" means an event, change,
circumstance or effect that has had or is reasonably likely to have a material
adverse effect on the business, operations, assets, liabilities or financial
condition of EchoStar and its Subsidiaries, taken as a whole, other than events,
changes, circumstances or effects that arise out of or result from (x) economic
factors affecting the economy or financial markets as a whole or generally
affecting the direct broadcast satellite industry (other than those that
materially disproportionately affect EchoStar and its Subsidiaries taken as a
whole) and (y) the announcement of the execution of this Agreement or the other
agreements contemplated hereby or the compliance by the parties with their
respective obligations hereunder and thereunder (including any cancellations of
or delays in customer orders, any reduction in sales, any disruption in
supplier, distributor, partner or similar relationships or any loss of
employees).
Section 3.2. Subsidiaries. Section 3.2 of the disclosure schedule
delivered by EchoStar to Xxxxxx and dated as of the date hereof (the "EchoStar
Disclosure Schedule") sets forth a list of all of the Subsidiaries (as defined
below) that are Significant Subsidiaries (as defined below), of EchoStar. Each
of the outstanding shares of capital stock of each of
12
EchoStar's Subsidiaries is duly authorized, validly issued, fully paid and
nonassessable, and is owned, directly or indirectly, by EchoStar free and clear
of all Encumbrances (as defined below) and has not been issued in violation of
any preemptive or similar rights. Other than as set forth in Section 3.2 of the
EchoStar Disclosure Schedule, there are no outstanding subscriptions, options,
warrants, puts, calls, agreements, understandings, claims or other commitments
or rights of any type relating to the issuance, sale, transfer or voting of any
securities of any Significant Subsidiary of EchoStar, nor are there outstanding
any securities which are convertible into or exchangeable for any shares of
capital stock of any Significant Subsidiary of EchoStar; and no Significant
Subsidiary of EchoStar has any obligation of any kind to issue any additional
securities or to pay for securities of EchoStar or any Significant Subsidiary of
EchoStar or any predecessor of any of the foregoing.
For the purposes of this Agreement, (x) the term "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 (y) the term "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 3.3. 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 (as defined below) 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, "EchoStar Transaction Agreements"
means this Agreement, the Implementation Agreement, the Merger Commitment
Letter, the Merger Financing Agreement, the PanAmSat Financing Agreement, the
PanAmSat Stock Purchase Agreement, the Registration Rights Letter Agreement (as
defined in the Implementation Agreement), the EchoStar Controlling Stockholder
Registration Rights Agreement (as defined in the Implementation Agreement), the
Supplemental Agreement and the Pledge Agreement and all other agreements
contemplated hereby or thereby to which EchoStar is (or will be) a party.
Section 3.4. Capitalization of EchoStar.
(a) As of the date of this Agreement, EchoStar's authorized capital
stock consists of (i) 1,600,000,000 shares of common stock, par value $0.01 per
share, of which (x) 800,000,000 shares have been designated EchoStar Class A
Common Stock, (y) 400,000,000 shares have been designated EchoStar Class B
Common Stock and (z) 400,000,000 shares have
13
been designated EchoStar Class C common stock, par value $0.01 per share (the
"EchoStar Class C Common Stock") and (ii) 20,000,000 shares of preferred stock,
par value $0.01 per share, of which (x) 1,616,681 shares have been designated
Series A Cumulative Preferred Stock, par value $0.01 per share ("EchoStar Series
A Preferred Stock"), (y) 900,000 shares have been designated Series B Senior
Redeemable Exchangeable Preferred Stock, par value $0.01 per share ("EchoStar
Series B Preferred Stock") and (z) 2,300,000 shares have been designated Series
C Cumulative Convertible Preferred Stock, par value $0.01 per share ("EchoStar
Series C Preferred Stock"). As of October 19, 2001 (i) 240,770,601 shares of
EchoStar Class A Common Stock (excluding shares held by EchoStar as treasury
shares) were issued and outstanding, (ii) 238,435,208 shares of EchoStar Class B
Common Stock (excluding shares held by EchoStar as treasury shares) were issued
and outstanding, (iii) no shares of EchoStar Class C Common Stock were issued
and outstanding, (iv) no shares of EchoStar Class A Common Stock or EchoStar
Class B Common Stock, respectively, were held by EchoStar as treasury shares and
(v) no shares of EchoStar Series A Preferred Stock, EchoStar Series B Preferred
Stock or EchoStar Series C Preferred Stock were issued and outstanding. Prior to
the Merger Effective Time, EchoStar will file a certificate with the Secretary
of State of Nevada withdrawing the designation of the Series A Preferred Stock,
the Series B Preferred Stock and the Series C Preferred Stock.
(b) Each outstanding share of EchoStar capital stock is duly
authorized and validly issued, fully paid and nonassessable, and has not been
issued in violation of any preemptive or similar rights. Except as set forth in
Section 3.4(b) of the EchoStar Disclosure Schedule, EchoStar 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 EchoStar on any
matter.
(c) Other than as contemplated by the EchoStar Transaction Agreements
or as set forth in Section 3.4(c) of the EchoStar 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 securities of EchoStar, nor are there
outstanding any securities which are convertible into or exchangeable for any
shares of capital stock of EchoStar; and EchoStar has no obligation of any kind
to issue any additional securities or to pay for securities of EchoStar or any
predecessor or affiliate. The issuance and sale of all of the shares of
EchoStar's capital stock described in this Section 3.4 have been in compliance
with federal and state securities laws. Except as set forth in Section 3.4(c) of
the EchoStar Disclosure Schedule, EchoStar has not agreed to register any of its
securities 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 securities of
EchoStar to any Person.
Section 3.5. Conflicts, Consents and Approvals. Except as set forth in
Section 3.5 of the EchoStar Disclosure Schedule, the execution and delivery by
EchoStar of the EchoStar Transaction Agreements and the consummation of the
transactions contemplated thereby will not:
(a) violate any provision of the certificate of incorporation or by-
laws (or equivalent organizational documents) of EchoStar or any of its
Significant 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
14
(with the giving of notice, the passage of time or both) to terminate,
accelerate, modify or call a default under, or result in the creation of any
Encumbrance upon any of the properties or assets of EchoStar or any of its
Significant Subsidiaries under, any of the terms, conditions or provisions of
any note, bond, mortgage, indenture, deed of trust, intellectual property or
other license, contract, undertaking, agreement, lease or other instrument or
obligation to which EchoStar or any of its Significant Subsidiaries is a party;
(c) violate any order, writ, injunction, decree, statute, rule or
regulation applicable to EchoStar or any of its Subsidiaries; or
(d) except as contemplated by the EchoStar Transaction Agreements,
require any consent or approval of or registration or filing by EchoStar or any
of its affiliates with, any third party or any Governmental Authority, other
than (i) FCC approvals, (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 EchoStar Material Adverse
Effect or have a material adverse impact on the ability of EchoStar to
consummate the transactions contemplated by the EchoStar Transaction Agreements.
Section 3.6. EchoStar SEC Documents.
(a) EchoStar has timely filed with the SEC all required reports,
filings, registration statements and other documents to be filed by them with
the SEC since January 1, 2000.
(b) As of its filing date, or as amended or supplemented prior to the
date hereof, each EchoStar SEC Document complied (and each EchoStar SEC Document
filed after the date of this Agreement will comply) as to form in all material
respects with the applicable requirements of the Exchange Act and the Securities
Act.
(c) No EchoStar SEC Document, as of its filing date, contained any
untrue statement of a material fact or omitted to state any material fact (and
no EchoStar SEC Document filed after the date of this Agreement will contain any
untrue statement of a material fact or omit to state any material fact)
necessary in order to make the statements made therein, in the light of the
circumstances under which they were made, not misleading.
Section 3.7. Financial Statements; Liabilities.
(a) The audited financial statements and unaudited interim financial
statements of EchoStar included in the EchoStar 10-K and the EchoStar 10-Q
(including any related notes or schedules) fairly present in all material
respects (and the audited financial statements and unaudited interim financial
statements of EchoStar included in EchoStar SEC Documents filed after the date
of this Agreement will fairly present in all material respects), in accordance
with GAAP (except as may be indicated in the notes thereto), the consolidated
financial position of EchoStar and its consolidated Subsidiaries as of the dates
thereof and its consolidated results of operations and changes in financial
position for the respective periods then
15
ended (subject to normal year-end adjustments and lack of footnote disclosure in
the case of any unaudited interim financial statements).
(b) EchoStar and its Subsidiaries have no liabilities or obligations
of any kind whatsoever, whether known or unknown, asserted or unasserted,
accrued, contingent, absolute, determined, determinable or otherwise, in each
case, other than:
(i) liabilities or obligations disclosed or provided for in the
balance sheet of EchoStar included in the EchoStar 10-K or 10-Q or
disclosed in the notes thereto;
(ii) liabilities incurred since September 30, 2001 in the
ordinary course of business;
(iii) liabilities or obligations under the EchoStar Transaction
Agreements or incurred in connection with the transactions contemplated
thereby;
(iv) obligations of EchoStar or its Subsidiaries under the
agreements, contracts, leases, licenses to which it is a party that would
be required by GAAP to be reflected on or reserved against on the balance
sheet of EchoStar included in the EchoStar 10-Q and which are so reflected
or reserved against thereon;
(v) as set forth in Section 3.7 of the EchoStar Disclosure
Schedule; and
(vi) other liabilities or obligations which, in the aggregate,
could not reasonably be expected to have a EchoStar Material Adverse
Effect, or have a material adverse impact on the ability of EchoStar to
consummate the transactions contemplated by the EchoStar Transaction
Agreements.
Section 3.8. Absence of Certain Changes. Except as set forth in
Section 3.8 of the EchoStar Disclosure Schedule and except as contemplated by
the EchoStar Transaction Agreements, since September 30, 2001, there has been no
(i) EchoStar Material Adverse Effect or (ii) development that has had or could
reasonably be expected to have a material adverse impact on the ability of
EchoStar to consummate the transactions contemplated by the EchoStar Transaction
Agreements.
Section 3.9. Compliance with Law. Except as set forth in Section 3.9
of the EchoStar Disclosure Schedule and except for the Environmental and Safety
Requirements (as defined below) which are addressed separately in Section 3.12
below, EchoStar and its Significant Subsidiaries are in compliance with, and at
all times since January 1, 1998 have been in compliance with, all applicable
laws, statutes, orders, rules, regulations, policies or guidelines promulgated,
or judgments, decisions or orders entered by any Governmental Authority
(collectively, "Applicable Law") relating to them or their businesses or
properties, except where the failure to be in compliance therewith could not, in
the aggregate, reasonably be expected to have a EchoStar Material Adverse Effect
or have a material adverse impact on the ability of EchoStar to consummate the
transactions contemplated by the EchoStar Transaction Agreements.
Section 3.10. Litigation. Except as set forth in Section 3.10 of the
EchoStar Disclosure Schedule, there is no suit, claim, action, proceeding or, to
its knowledge, investigation
16
("Action") pending or, to the knowledge of EchoStar, threatened against EchoStar
or any of its Subsidiaries or its or their properties which could reasonably be
expected to (a) have a EchoStar Material Adverse Effect or (b) have a material
adverse impact on the ability of EchoStar to consummate the transactions
contemplated by the EchoStar Transaction Agreements; provided, that with respect
to this Section 3.10(b), the foregoing representation is made as of the date of
this Agreement.
Section 3.11. Taxes. Each of EchoStar and its Subsidiaries has duly
filed (or there have been filed on their behalf) all federal and material state,
local and foreign income, franchise, excise, real and personal property and
other tax returns and reports (including, but not limited to, those filed on a
consolidated, combined or unitary basis) required to have been filed by it prior
to the date hereof (taking into account extensions). All of the foregoing
returns and reports are true and correct in all material respects, and EchoStar
and its Subsidiaries have paid, or adequately reserved for, all taxes required
to be paid in respect of all periods covered by such returns and reports. For
the purposes of this Agreement, the term "tax" shall include all federal, state,
local and foreign taxes, including interest and penalties thereon.
Section 3.12. Environmental and Safety Matters. Except as set forth
in Section 3.12 of the EchoStar Disclosure Schedule, and except for any facts,
conditions or circumstances that, in the aggregate, could not reasonably be
expected to have a EchoStar Material Adverse Effect: (i) EchoStar and its
Subsidiaries are and have been in compliance with all applicable Environmental
and Safety Requirements; (ii) no property currently or, to the knowledge of
EchoStar, formerly owned or operated by EchoStar or any Subsidiary has been
contaminated with any substance that could reasonably be expected to require
investigation or remediation pursuant to any Environmental and Safety
Requirements; (iii) neither EchoStar nor any of its Subsidiaries is subject to
any liability for any waste disposal or contamination on any third party
property; (iv) neither EchoStar nor any of its Subsidiaries has received any
notice, demand, letter, claim or request for information indicating that it may
be in violation of or subject to liability with respect to any Environmental and
Safety Requirements; (v) neither EchoStar nor any Subsidiary is subject to any
outstanding order, decree, injunction or other arrangement with any Governmental
Authority or any indemnity or other agreement with any other party relating to
any Environmental and Safety Requirements and for which EchoStar or the
Subsidiary retains any liability or obligation; (vi) to the knowledge of
EchoStar there are no other circumstances or conditions involving EchoStar or
any Subsidiary that could reasonably be expected to result in any claims,
liability, investigations or costs by or for EchoStar or any Subsidiary of
EchoStar in connection with any Environmental and Safety Requirements; and (vii)
EchoStar has made available to EchoStar copies of all material environmental
reports, studies, assessments and sampling data relating to EchoStar and its
Subsidiaries or that relates to the current EchoStar business or for which
indemnification does not exist and which are in the possession, custody or
control of EchoStar. For the purposes of this Agreement, the term "Environmental
and Safety Requirements" means all applicable federal, state, local and foreign
statutes, regulations, ordinances and other provisions having the force or
effect of law, all judicial and administrative orders and determinations and all
common law in each case concerning public health and safety, worker health and
safety, and pollution or protection of the environment (including all those
relating to the presence, use, production, generation, handling, transportation,
treatment, storage, disposal, distribution, labeling, testing, processing,
discharge, Release or threatened Release (whether onsite or offsite), control,
or cleanup of any hazardous materials, substances or wastes, chemical substances
or mixtures, pesticides, pollutants, contaminants, toxic chemicals, petroleum
products or byproducts, asbestos, polychlorinated biphenyls, noise or
radiation). For the purposes
17
of this Agreement, the term "Release" has the meaning set forth in the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended, or similar Environmental and Safety Requirements.
Section 3.13. Employee Benefit Plans. All benefit and compensation
plans, contracts, policies or arrangements covering current or former United
States employees of EchoStar and its Subsidiaries and current or former
directors of EchoStar, including "employee benefit plans" within the meaning of
Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), and deferred compensation, stock option, stock purchase, stock
appreciation rights, stock based, incentive and bonus plans (the "EchoStar
Plans"), are listed in Section 3.13 of the EchoStar Disclosure Schedule. Except
as set forth in Section 3.13 of the EchoStar Disclosure Schedule, all EchoStar
Plans are in compliance with, and have been administered and operated in
accordance with, the terms of such EchoStar Plans and Applicable Law, except for
any failure to so comply, operate or administer the EchoStar Plans that could
not reasonably be expected to have a EchoStar Material Adverse Effect. With
respect to each EchoStar Plan, a complete and correct copy of the most recent
plan document or agreement, all related trust and funding documents, and all
amendments thereto; the most recent summary plan description, and all related
summaries of material modifications; and all actuarial and financial reports for
the last three plan years, where applicable, have been provided or made
available to Xxxxxx. The Internal Revenue Service has issued a determination
letter to the effect that each such EchoStar Plan which is intended to be
qualified within the meaning of Section 401(a) or 501(c)(9) of the Code is so
qualified. Neither EchoStar nor any of its Subsidiaries has engaged in a
transaction with respect to any EchoStar Plan that, assuming the taxable period
of such transaction expired as of the date hereof, could subject EchoStar or any
Subsidiary to a tax or penalty imposed by either Section 4975 of the Code or
Section 502(i) of ERISA, except for any tax or penalty which could not
reasonably be expected to have an EchoStar Material Adverse Effect. No liability
under Subtitle C or D of Title IV of ERISA has been or is expected to be
incurred by EchoStar or any of its Subsidiaries with respect to any ongoing,
frozen or terminated "single-employer plan", within the meaning of Section
4001(a)(15) of ERISA, currently or formerly maintained by any of them, or the
single-employer plan of any entity which is considered one employer with
EchoStar under Section 4001 of ERISA or Section 414 of the Code (a "EchoStar
ERISA Affiliate"), except for any liability that could not reasonably be
expected to have a EchoStar Material Adverse Effect. EchoStar and the
Subsidiaries have not incurred and do not expect to incur any withdrawal
liability with respect to a multiemployer plan under Subtitle E of Title IV of
ERISA (regardless of whether based on contributions of a EchoStar ERISA
Affiliate), except for any liability that could not reasonably be expected to
have a EchoStar Material Adverse Effect. No event which constitutes a
"reportable event" as defined in Section 4043 of ERISA has occurred with respect
to any EchoStar Plan subject to Title IV of ERISA which presents a material risk
of the termination of any such EchoStar Plan and could reasonably be expected to
result in a EchoStar Material Adverse Effect. Except as set forth in Section
3.13 of the EchoStar Disclosure Schedule, no audit, claim, action or litigation
has been made, commenced or, to the knowledge of EchoStar, threatened with
respect to any EchoStar Plan that, if adversely determined, could reasonably be
expected to have a EchoStar Material Adverse Effect. Neither EchoStar nor any of
its Subsidiaries has any obligations for continuing coverage for retiree health
and life benefits (other than as required under Part 6 of Title I of ERISA or
other similar obligations under Applicable Law) under any EchoStar Plan, except
as listed in Section 3.13 of the EchoStar Disclosure Schedule. EchoStar or the
Subsidiaries may amend or terminate any such retiree plan at any time without
incurring any liability thereunder except for any liability which could not
reasonably be expected to have a EchoStar Material
18
Adverse Effect. Except as set forth in Section 3.13 of the EchoStar Disclosure
Schedule, there has been no amendment to, announcement by EchoStar or any of its
Subsidiaries relating to, or change in employee participation or coverage under,
any EchoStar Plan which would increase materially the expense of maintaining
such plan above the level of the expense incurred therefor for the most recent
fiscal year. Except as set forth in Section 3.13 of the EchoStar Disclosure
Schedule, neither the execution of this Agreement, shareholder approval of this
Agreement nor the consummation of the transactions contemplated hereby will (w)
entitle any employees of EchoStar or any of the Subsidiaries to severance pay or
any increase in severance pay upon any termination of employment after the date
hereof, (x) accelerate the time of payment or vesting or trigger any payment or
funding (through a grantor trust or otherwise) of compensation or benefits
under, increase the amount payable or trigger any other material obligation
pursuant to the terms of, any of the EchoStar Plans, (y) limit or restrict the
right of EchoStar or, after the consummation of the transactions contemplated
hereby, Xxxxxx to merge, amend or terminate any of the EchoStar Plans, or (z)
cause EchoStar or any of its Subsidiaries or, after the consummation of the
transactions contemplated hereby, Xxxxxx to record additional compensation
expense on its income statement with respect to any outstanding stock option or
other equity-based award. EchoStar does not have any labor unions and is not a
party to any collective bargaining agreements, in each case within the United
States.
Section 3.14. Intellectual Property.
(a) EchoStar and its Subsidiaries own or have a valid right to use
and shall own or have a valid right to use as of the Closing Date, all EchoStar
Intellectual Property, except where the failure to own or have a valid right to
use could not reasonably be expected to have a EchoStar Material Adverse Effect.
For the purposes of this Agreement, "Intellectual Property" means:
(i) all patents and patent applications, trademarks, service
marks, trade names (whether registered or unregistered) and pending
applications for registration of any of the foregoing, domain names,
copyrights and registrations and applications therefor, mask works and any
applications for registration thereof, trade secrets, inventions, know-how,
confidential and other intellectual property and proprietary rights arising
from or in respect of the foregoing; and
(ii) any and all computer programs, including any and all
software implementations (whether in source code or object code),
databases, including any and all data and collections of data, whether
machine readable or otherwise, and any other work product used to design
and develop any of the foregoing and all documentation relating to the
foregoing.
For the purposes of this Agreement, "EchoStar Intellectual Property" means all
Intellectual Property (x) owned by EchoStar or any of its Subsidiaries; or (y)
used or held for use by EchoStar or any of its Subsidiaries in their business
pursuant to a valid license agreement. Except as set forth in Section 3.14(a)
of the EchoStar Disclosure Schedule, each material item of EchoStar Intellectual
Property is owned or licensed by the respective businesses of EchoStar and its
Subsidiaries to no less advantageous extent in all material respects as during
the twelve (12) months prior to the date hereof. EchoStar and its Subsidiaries
have taken commercially reasonable action to maintain and protect their rights
in and to each material item of EchoStar Intellectual Property.
19
(b) Except as set forth in Section 3.14(b) of the EchoStar Disclosure
Schedule, neither EchoStar nor any of its Subsidiaries has received any written
claim or notice of infringement or misappropriation of, or conflict with, the
Intellectual Property rights of others, other than such as could not reasonably
be expected to have a EchoStar Material Adverse Effect. Except as set forth in
Section 3.14(b) of the EchoStar Disclosure Schedule, neither EchoStar nor any of
its Subsidiaries has provided any third party any written claim or notice that
such third party has infringed upon, misappropriated, or otherwise come into
conflict with, any EchoStar Intellectual Property. Except as set forth in
Section 3.14(b) of the EchoStar Disclosure Schedule, EchoStar and its
Subsidiaries possess all right, title, and interest in and to, or have a legal,
valid, binding and enforceable right to use, each material item of Intellectual
Property used by EchoStar or any of its Subsidiaries, free and clear of all
Encumbrances.
(c) The EchoStar Intellectual Property is sufficient to conduct, in
all material respects, the respective businesses of EchoStar and its
Subsidiaries after the Merger Effective Time as such businesses were conducted
immediately prior to the Merger Effective Time.
Section 3.15. Contracts. Except as set forth in Section 3.15 of the
EchoStar Disclosure Schedule, each material lease, license, contract, agreement
or obligation to which EchoStar or any of its Subsidiaries is a party or by
which any of them or any of their properties may be bound is valid, binding and
enforceable and in full force and effect, except where such failures to be
valid, binding and enforceable and in full force and effect could not, in the
aggregate, reasonably be expected to have a EchoStar Material Adverse Effect or
have a material adverse impact on the ability of EchoStar to consummate the
transactions contemplated by the EchoStar Transaction Agreements, and neither
EchoStar nor any of its Subsidiaries is in breach of or default thereunder, and,
to EchoStar's knowledge, no other party thereto is in breach of or default
thereunder, except for those breaches and defaults that could not reasonably be
expected to have a EchoStar Material Adverse Effect or have a material adverse
impact on the ability of EchoStar to consummate the transactions contemplated by
the EchoStar Transaction Agreements.
Section 3.16. Brokerage and Finder's and Other Fees; Opinion of
Financial Advisor.
(a) Except for EchoStar's obligations to UBS Warburg LLC and Deutsche
Banc Alex. Xxxxx Inc., neither EchoStar nor any of its affiliates, stockholders,
directors, officers or employees has incurred or will incur on behalf of
EchoStar or any affiliate of EchoStar, any brokerage, finder's or similar fee in
connection with the transactions contemplated by the EchoStar Transaction
Agreements.
(b) The Board of Directors of EchoStar has received the opinion of
Deutsche Bank Alex. Xxxxx Inc. to the effect that, as of the date of this
Agreement, the Class A Exchange Ratio is fair, from a financial point of view,
to the holders of EchoStar Class A Common Stock. EchoStar will provide a copy
thereof to Xxxxxx, for information purposes only, and Xxxxxx acknowledges that
it has no right to rely on such opinion.
Section 3.17. Board and Stockholder Approval. The Board of Directors
of EchoStar, at a meeting duly called and held, has duly determined that the
EchoStar Transaction Agreements and the transactions contemplated thereby are
advisable, fair to and in the best interests of EchoStar and its stockholders
and has authorized the EchoStar Transaction Agreements to be executed, delivered
and performed. Immediately following the execution of this Agreement and such
determinations, the Controlling Stockholder shall have executed and
20
delivered to EchoStar, in accordance with the provisions of the NRS, a written
consent approving and adopting this Agreement and the other EchoStar Transaction
Agreements and approving the transactions contemplated hereby and thereby. No
other vote or consent of the holders of any class or series of EchoStar capital
stock is necessary to approve and adopt this Agreement and the transactions
contemplated by the EchoStar Transaction Agreements.
Section 3.18. Takeover Laws. Prior to the date hereof, the Board of
Directors of EchoStar has taken all action necessary to exempt (a) the execution
of the EchoStar Transaction Agreements, (b) the Merger and (c) the transactions
contemplated thereby under or make the foregoing actions not subject to (i) any
takeover law or law that purports to limit or restrict business combinations or
the ability to acquire or vote shares and (ii) any stockholder rights plan or
any similar anti-takeover plan or device.
Section 3.19. Restrictive Agreements. Except as set forth in Section
3.19 of the EchoStar Disclosure Schedule, none of EchoStar, EchoStar's
Subsidiaries or any employee, officer, director or consultant of either EchoStar
or EchoStar's Subsidiaries is party to or bound by any agreement, contract,
policy, license, Permit, document, instrument, arrangement or commitment that
materially limits, or would materially limit after the Merger Effective Time,
the ability of either EchoStar or EchoStar's Subsidiaries or, to EchoStar's
knowledge, Xxxxxx or its Subsidiaries, to compete in any line of business or
with any Person or in any geographic area.
Section 3.20. Permits. For the purposes of this Agreement, the
"EchoStar Permits" shall mean all permits, approvals, authorizations,
certificates, consents, franchises, licenses, concessions and rights ("Permits")
issued or authorized by any Governmental Authority (as amended or modified) to,
or held by, EchoStar or any of its Subsidiaries (together, the "EchoStar Permit
Entities") including (a) all Permits issued by the FCC to any EchoStar Permit
Entity ("EchoStar FCC Licenses") and (b) all Permits issued to any EchoStar
Permit Entity by a Governmental Authority (other than the FCC) authorizing such
entity to provide broadcasting or other communications services (including the
provision of direct-to-home video programming). Set forth on Section 3.20 of the
EchoStar Disclosure Schedule is a true and complete list of (a) all EchoStar
Permits, (b) all pending applications for Permits that would be EchoStar
Permits, if issued or granted and (c) all pending applications by any EchoStar
Permit Entity for modification, extension or renewal of EchoStar Permits, except
that Section 3.20 of the EchoStar Disclosure Schedule need not list such
EchoStar Permits, applications therefor or applications in respect thereof that
are immaterial to the assets or business of EchoStar and its Subsidiaries taken
as a whole. The EchoStar Permits are all of the Permits required to be issued to
or held by the EchoStar Permit Entities in order to allow such entities to
conduct their respective businesses as currently conducted and the EchoStar
Permits are in full force and effect, except where the failure to possess any
such Permit or the failure of any such Permit to be in full force and effect
could not reasonably be expected to have a EchoStar Material Adverse Effect.
Without limiting the general provisions of Section 3.9, except as set forth on
Section 3.20 of the EchoStar Disclosure Schedule, each of the EchoStar Permit
Entities is in compliance with (i) its obligations under each of the EchoStar
Permits owned, held or possessed by it, and (ii) the rules and regulations of
the Governmental Authority issuing such EchoStar Permit, except in each case
where the failure to so comply could not reasonably be expected to have a
EchoStar Material Adverse Effect. Except as set forth on Section 3.20 of the
EchoStar Disclosure Schedule and except for proceedings affecting the satellite
industry in general, to EchoStar's knowledge, there is not pending or threatened
before the Federal Communications Commission or any successor agency ("FCC") or
any other Governmental Authority any proceeding, notice of violation, order of
forfeiture or
21
complaint, or investigation against any EchoStar Permit Entity relating to any
of the EchoStar Permits that could reasonably be expected to have a EchoStar
Material Adverse Effect. Without limiting the general provisions of Section 3.5,
Section 3.5(d) of the EchoStar Disclosure Schedule lists all of the consents or
approvals of, or registrations or filings by any EchoStar Permit Entity with,
any Governmental Authority necessary for EchoStar to transfer the EchoStar
Permits by consummating the transactions contemplated hereby.
Section 3.21. Amendment to By-Laws. EchoStar has amended its By-laws
to provide that the stockholders of EchoStar may act by written consent of the
holders of that number of shares required to take such action in order to be
effective and such By-laws, as so amended, remain in full force and effect.
ARTICLE 4
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 (collectively with
the Xxxxxx 10-K and Xxxxxx 10-Q, the "Xxxxxx SEC 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 4.1. 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 (as defined below) or have a material adverse
impact on its ability to consummate the transactions contemplated by the Xxxxxx
Transaction Agreements (as defined below). For the purposes of this Agreement, a
"Xxxxxx Material Adverse Effect" means an event, change, circumstance or effect
that has had or is reasonably likely to have a material adverse effect on the
business, operations, assets, liabilities or financial condition of Xxxxxx and
its Subsidiaries taken as a whole, other than events, changes, circumstances or
effects that arise out of or result from (x) economic factors affecting the
economy or financial markets as a whole or generally affecting the direct
broadcast satellite industry (other than those that materially
disproportionately affect Xxxxxx and its Subsidiaries taken as a whole), (y) the
Xxxxxx Recapitalization or the Spin-Off and (z) the announcement of the
execution of the this Agreement and the agreements contemplated hereby or the
compliance by the parties with their respective obligations hereunder and
thereunder (including any cancellations of or delays in customer orders, any
reduction in
22
sales, any disruption in supplier, distributor, partner or similar relationships
or any loss of employees).
Section 4.2. Subsidiaries. Section 4.2 of the disclosure schedule
delivered by Xxxxxx to EchoStar and dated as of the date hereof (the "Xxxxxx
Disclosure Schedule") sets forth a list of all of the Significant Subsidiaries
of Xxxxxx. Each of the outstanding shares of capital stock of each of Xxxxxx'
Subsidiaries is duly authorized, validly issued, fully paid and nonassessable,
and is owned, directly or indirectly, by Xxxxxx free and clear of all
Encumbrances and has not been issued in violation of any preemptive or similar
rights. Other than as set forth in Section 4.2 of the Xxxxxx Disclosure
Schedule, there are no outstanding subscriptions, options, warrants, puts,
calls, agreements, understandings, claims or other commitments or rights of any
type relating to the issuance, sale, transfer or voting of any securities of any
Significant Subsidiary of Xxxxxx, nor are there outstanding any securities which
are convertible into or exchangeable for any shares of capital stock of any
Significant Subsidiary of Xxxxxx; and no Significant Subsidiary of Xxxxxx has
any obligation of any kind to issue any additional securities or to pay for
securities of Xxxxxx or any Significant Subsidiary of Xxxxxx or any predecessor
of any of the foregoing.
Section 4.3. Corporate Power and Authority. Xxxxxx has (or will have
prior to execution thereof) all requisite corporate power and authority to enter
into the Xxxxxx Transaction Agreements (as defined below) 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 Implementation Agreement, the
PanAmSat Stock Purchase Agreement, the Merger Financing Agreement, the
Supplemental Agreement, the Pledge Agreement, the Stockholders Agreement, the GM
Registration Rights Agreement (as defined in the Implementation Agreement), the
GM/Xxxxxx Separation Agreement, the GM/Xxxxxx Tax Agreements, the GM/Xxxxxx
Intellectual Property Agreement, the Employee Matters Agreement, the GM/Xxxxxx
Special Employee Items Agreement, the Registration Rights Letter Agreement (as
defined in the Implementation Agreement), the Pension Plans Registration Rights
Agreement (as defined in the Implementation Agreement), the GM Registration
Rights Agreement (as defined in the Implementation Agreement), the EchoStar
Controlling Stockholder Registration Rights Agreement (as defined in the
Implementation Agreement) and all other agreements contemplated thereby to which
Xxxxxx is (or will be) a party.
Section 4.4. Capitalization of Xxxxxx.
(a) As of the date of this Agreement, Xxxxxx' authorized capital
stock consists of 1,000,000 shares of common stock, par value $0.01 per share,
and 10,000,000 shares of Series A Preferred Stock, of which 2,669,633 shares
have been designated Series A Preferred Stock, par value $0.10 per share
("Series A Preferred Stock"). As of the date hereof (i) 200 shares of common
stock (excluding shares held by Xxxxxx as treasury shares) were issued and
23
outstanding, (ii) 81,649,203 shares of common stock were held by Xxxxxx as
treasury shares and (iii) 2,669,633 shares of Series A Preferred Stock were
issued and outstanding.
(b) Each outstanding share of Xxxxxx capital stock is duly
authorized and validly issued, fully paid and nonassessable, and has not been
issued in violation of any preemptive or similar rights. As of the date of this
Agreement, each outstanding share of Xxxxxx capital stock is owned by GM free
and clear of all Encumbrances. Xxxxxx 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 Xxxxxx on any matter.
(c) Other than as contemplated by the GM Transaction Agreements or
the Xxxxxx Transaction Agreements, or as set forth in Section 4.4(c) of the
Xxxxxx Disclosure Schedule, there are no outstanding subscriptions, options,
warrants, puts, calls, agreements, understandings, claims or other commitments
or rights of any type relating to the issuance, sale or transfer of any
securities of Xxxxxx, nor are there outstanding any securities which are
convertible into or exchangeable for any shares of capital stock of Xxxxxx; and
Xxxxxx has no obligation of any kind to issue any additional securities or to
pay for securities of Xxxxxx or any predecessor or affiliate. The issuance and
sale of all of the shares of capital stock described in this Section 4.4 have
been in compliance with federal and state securities laws. Section 4.4(c) of the
Xxxxxx Disclosure Schedule accurately sets forth, as of September 30, 2001, the
number of shares of GM Class H Common Stock issuable upon exercise of options to
purchase shares of GM Class H Common Stock, and the exercise prices with respect
thereto, along with a list of the options to purchase shares of GM Class H
Common Stock held by each corporate officer of Xxxxxx and any of its
Subsidiaries. Except as set forth in Section 4.4(c) of the Xxxxxx Disclosure
Schedule or as contemplated by the GM/Xxxxxx Separation Agreement, Xxxxxx has
not agreed to register any securities under the Securities Act, or under any
state securities law or granted registration rights with respect to any
securities of Xxxxxx to any Person.
Section 4.5. Conflicts, Consents and Approvals. Except as set forth
in Section 4.5 of the Xxxxxx Disclosure Schedule, the execution and delivery of
the Xxxxxx Transaction Agreements by Xxxxxx and the GM Transaction Agreements
(as defined in the Implementation Agreement) by GM and the consummation of the
transactions contemplated thereby will not:
(a) violate any provision of the certificate of incorporation or by-
laws (or equivalent organizational documents) of Xxxxxx or any of its
Significant 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 Encumbrance upon any of the properties or assets
of Xxxxxx or any of its Significant Subsidiaries under, any of the terms,
conditions or provisions of any note, bond, mortgage, indenture, deed of trust,
intellectual property or other license, contract, undertaking, agreement, lease
or other instrument or obligation to which Xxxxxx or any of its Significant
Subsidiaries is a party;
(c) violate any order, writ, injunction, decree, statute, rule or
regulation applicable to Xxxxxx or any of its Subsidiaries; or
24
(d) except as contemplated by the Xxxxxx Transaction Agreements,
require any consent or approval of, or registration or filing by Xxxxxx or any
of its affiliates with, any third party or Governmental Authority, other than
(i) authorization for listing or quotation of the shares of Xxxxxx Class A
Common Stock to be issued in the Merger and Xxxxxx Class C Common Stock to be
outstanding immediately prior to the Merger Effective Time on the NYSE or
Nasdaq, subject to official notice of issuance, (ii) actions required by 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 Xxxxxx Material Adverse
Effect or have a material adverse impact on the ability of Xxxxxx to consummate
the transactions contemplated by the Xxxxxx Transaction Agreements.
Section 4.6. Xxxxxx SEC Documents.
(a) Xxxxxx has timely filed with the SEC all required reports,
filings, registration statements and other documents to be filed by them with
the SEC since January 1, 2000.
(b) As of its filing date, or as amended or supplemented prior to
the date hereof, each Xxxxxx SEC Document complied (and each Xxxxxx SEC Document
filed after the date of this Agreement will comply) as to form in all material
respects with the applicable requirements of the Exchange Act and the Securities
Act.
(c) No Xxxxxx SEC Document, as of its filing date, contained any
untrue statement of a material fact or omitted to state any material fact (and
no Xxxxxx SEC Document filed after the date of this Agreement will contain any
untrue statement of a material fact or omit to state any material fact)
necessary in order to make the statements made therein, in the light of the
circumstances under which they were made, not misleading.
Section 4.7. Financial Statements; Liabilities.
(a) The audited financial statements and unaudited interim
financial statements of Xxxxxx included in the Xxxxxx 10-K and the Xxxxxx 10-Q
(including any related notes or schedules) fairly present in all material
respects (and the audited financial statements and unaudited interim financial
statements of Xxxxxx included in Xxxxxx SEC Documents filed after the date of
this Agreement will fairly present in all material respects), in accordance with
GAAP (except as may be indicated in the notes thereto), the consolidated
financial position of Xxxxxx and its consolidated Subsidiaries as of the dates
thereof and its consolidated results of operations and changes in financial
position for the respective periods then ended (subject to normal year-end
adjustments and lack of footnote disclosure in the case of any unaudited interim
financial statements).
(b) Xxxxxx and its Subsidiaries have no liabilities or obligations
of any kind whatsoever, whether known or unknown, asserted or unasserted,
accrued, contingent, absolute, determined, determinable or otherwise, in each
case, other than:
(i) liabilities or obligations disclosed or provided for in the
balance sheet of Xxxxxx included in the Xxxxxx 10-K or 10-Q or disclosed in
the notes thereto;
25
(ii) liabilities incurred since September 30, 2001 in the
ordinary course of business;
(iii) liabilities or obligations under the Xxxxxx Transaction
Agreements or incurred in connection with the transactions contemplated
thereby;
(iv) obligations of Xxxxxx or its Subsidiaries under the
agreements, contracts, leases, licenses to which it is a party that would
be required by GAAP to be reflected on or reserved against on the balance
sheet of Xxxxxx included in the Xxxxxx 10-Q and which are so reflected or
reserved against thereon;
(v) as set forth in Section 4.7 of the Xxxxxx Disclosure
Schedule; and
(vi) other liabilities or obligations which, in the aggregate,
could not reasonably be expected to have a Xxxxxx Material Adverse Effect,
or have a material adverse impact on the ability of Xxxxxx to consummate
the transactions contemplated by the Xxxxxx Transaction Agreements.
Section 4.8. Absence of Certain Changes. Except as set forth in
Section 4.8 of the Xxxxxx Disclosure Schedule and except as contemplated by the
Xxxxxx Transaction Agreements, since September 30, 2001, there has been no (i)
Xxxxxx Material Adverse Effect or (ii) development that has had or could
reasonably be expected to have a material adverse impact on the ability of
Xxxxxx to consummate the transactions contemplated by the Xxxxxx Transaction
Agreements.
Section 4.9. Compliance with Law. Except as set forth in Section 4.9
of the Xxxxxx Disclosure Schedule, Xxxxxx and its Significant Subsidiaries are
in compliance with, and at all times since January 1, 1998 have been in
compliance with, all Applicable Law relating to them or their businesses or
properties, except where the failure to be in compliance therewith could not, in
the aggregate, reasonably be expected to have a Xxxxxx Material Adverse Effect
or have a material adverse impact on the ability of Xxxxxx to consummate the
transactions contemplated by the Xxxxxx Transaction Agreements.
Section 4.10. Litigation. Except as set forth in Section 4.10 of the
Xxxxxx Disclosure Schedule, there is no Action pending or, to the knowledge of
Xxxxxx, threatened against Xxxxxx or any of its Subsidiaries or its or their
properties which could reasonably be expected to (a) have a Xxxxxx Material
Adverse Effect or (b) have a material adverse impact on the ability of Xxxxxx to
consummate the transactions contemplated by the Xxxxxx Transaction Agreements;
provided, that with respect to Section 4.10(b), the foregoing representation is
made as of the date of this Agreement.
Section 4.11. Taxes. Each of Xxxxxx and its Subsidiaries have duly
filed (or there have been filed on their behalf) all federal and material state,
local and foreign income, franchise, excise, real and personal property and
other tax returns and reports (including, but not limited to, those filed on a
consolidated, combined or unitary basis) required to have been filed by it prior
to the date hereof (taking into account extensions). All of the foregoing
returns and reports, to the extent they relate to the income, assets or business
of Xxxxxx and its Subsidiaries, are true and correct in all material respects,
and Xxxxxx and its Subsidiaries have paid (or
26
payment has been made on its behalf), or adequately reserved for, all taxes
required to be paid in respect of all periods covered by such returns and
reports.
Section 4.12. Environmental and Safety Matters. Except as set forth
in Section 4.12 of the Xxxxxx Disclosure Schedule, and except for any facts,
conditions or circumstances that, in the aggregate, could not reasonably be
expected to have a Xxxxxx Material Adverse Effect: (i) Xxxxxx and its
Subsidiaries are and have been in compliance with all applicable Environmental
and Safety Requirements; (ii) no property currently or, to the knowledge of
Xxxxxx, formerly owned or operated by Xxxxxx or any Subsidiary has been
contaminated with any substance that could reasonably be expected to require
investigation or remediation pursuant to any Environmental and Safety
Requirements; (iii) neither Xxxxxx nor any of its Subsidiaries is subject to any
liability for any waste disposal or contamination on any third party property;
(iv) neither Xxxxxx nor any of its Subsidiaries has received any notice, demand,
letter, claim or request for information indicating that it may be in violation
of or subject to liability with respect to any Environmental and Safety
Requirements; (v) neither Xxxxxx nor any Subsidiary is subject to any
outstanding order, decree, injunction or other arrangement with any Governmental
Authority or any indemnity or other agreement with any other party relating to
any Environmental and Safety Requirements and for which Xxxxxx or the Subsidiary
retains any liability or obligation; (vi) to the knowledge of Xxxxxx there are
no other circumstances or conditions involving Xxxxxx or any Subsidiary that
could reasonably be expected to result in any claims, liability, investigations
or costs by or for Xxxxxx or any Subsidiary of Xxxxxx in connection with any
Environmental and Safety Requirements; and (vii) Xxxxxx has made available to
EchoStar copies of all material environmental reports, studies, assessments and
sampling data relating to Xxxxxx and its Subsidiaries or that relates to the
current Xxxxxx business or for which indemnification does not exist and which
are in the possession, custody or control of Xxxxxx.
Section 4.13. Employee Benefit Plans. All benefit and compensation
plans, contracts, policies or arrangements covering current or former United
States employees of Xxxxxx and its Subsidiaries and current or former directors
of Xxxxxx, including "employee benefit plans" within the meaning of Section 3(3)
of ERISA, and deferred compensation, stock option, stock purchase, stock
appreciation rights, stock based, incentive and bonus plans (the "Xxxxxx
Plans"), are listed in Section 4.13 of the Xxxxxx Disclosure Schedule. Except as
set forth in Section 4.13 of the Xxxxxx Disclosure Schedule, no Xxxxxx Plans
cover, or provide benefits to, employees of GM or its Subsidiaries (other than
Xxxxxx). Except as set forth in Section 4.13 of the Xxxxxx Disclosure Schedule,
all Xxxxxx Plans are in compliance with, and have been administered and operated
in accordance with, the terms of such Xxxxxx Plans and Applicable Law, except
for any failure to so comply, operate or administer the Xxxxxx Plans that could
not reasonably be expected to have a Xxxxxx Material Adverse Effect. With
respect to each Xxxxxx Plan, a complete and correct copy of the most recent plan
document or agreement, all related trust and funding documents, and all
amendments thereto; the most recent summary plan description, and all related
summaries of material modifications; and all actuarial and financial reports for
the last three plan years, where applicable, have been provided or made
available to EchoStar. The Internal Revenue Service has issued a determination
letter to the effect that each such Xxxxxx Plan which is intended to be
"qualified" within the meaning of Section 401(a) or 501(c)(9) of the Code is so
qualified. Neither Xxxxxx nor any of its Subsidiaries has engaged in a
transaction with respect to any Xxxxxx Plan that, assuming the taxable period of
such transaction expired as of the date hereof, could subject Xxxxxx or any
Subsidiary to a tax or penalty imposed by either Section 4975 of the Code or
Section 502(i) of
27
ERISA, except for any tax or penalty which could not reasonably be expected to
have a Xxxxxx Material Adverse Effect. No liability under Subtitle C or D of
Title IV of ERISA has been or is expected to be incurred by Xxxxxx or any of its
Subsidiaries with respect to any ongoing, frozen or terminated "single-employer
plan", within the meaning of Section 4001(a)(15) of ERISA, currently or formerly
maintained by any of them, or the single-employer plan of any entity which is
considered one employer with Xxxxxx under Section 4001 of ERISA or Section 414
of the Code (a "Xxxxxx ERISA Affiliate"), except for any liability that could
not reasonably be expected to have a Xxxxxx Material Adverse Effect. Xxxxxx and
the Subsidiaries have not incurred and do not expect to incur any withdrawal
liability with respect to a multiemployer plan under Subtitle E of Title IV of
ERISA (regardless of whether based on contributions of a Xxxxxx ERISA
Affiliate), except for any liability that could not reasonably be expected to
have a Xxxxxx Material Adverse Effect. No event which constitutes a "reportable
event" as defined in Section 4043 of ERISA has occurred with respect to any
Xxxxxx Plan subject to Title IV of ERISA which presents a material risk of the
termination of any such Xxxxxx Plan and could reasonably be expected to result
in a Xxxxxx Material Adverse Effect. Except as set forth in Section 4.13 of the
Xxxxxx Disclosure Schedule, no audit, claim, action or litigation has been made,
commenced or, to the knowledge of Xxxxxx, threatened with respect to any Xxxxxx
Plan that, if adversely determined, could reasonably be expected to have a
Xxxxxx Material Adverse Effect. Neither Xxxxxx nor any of its Subsidiaries has
any obligations for continuing coverage for retiree health and life benefits
(other than as required under Part 6 of Title I of ERISA or other similar
obligations under Applicable Law) under any Xxxxxx Plan, except as listed in
Section 4.13 of the Xxxxxx Disclosure Schedule. Xxxxxx or the Subsidiaries may
amend or terminate any such retiree plan at any time without incurring any
liability thereunder except for any liability which could not reasonably be
expected to have a Xxxxxx Material Adverse Effect. Except as set forth in
Section 4.13 of the Xxxxxx Disclosure Schedule, there has been no amendment to,
announcement by Xxxxxx or any of its Subsidiaries relating to, or change in
employee participation or coverage under, any Xxxxxx Plan which would increase
materially the expense of maintaining such plan above the level of the expense
incurred therefor for the most recent fiscal year. Except as set forth in
Section 4.13 of the Xxxxxx Disclosure Schedule, neither the execution of this
Agreement, stockholder approval of this Agreement nor the consummation of the
transactions contemplated hereby will (w) entitle any employees of Xxxxxx or any
of the Subsidiaries to severance pay or any increase in severance pay upon any
termination of employment after the date hereof, (x) accelerate the time of
payment or vesting or trigger any payment or funding (through a grantor trust or
otherwise) of compensation or benefits under, increase the amount payable or
trigger any other material obligation pursuant to the terms of, any of the
Xxxxxx Plans, (y) limit or restrict the right of Xxxxxx to merge, amend or
terminate any of the Xxxxxx Plans, or (z) cause Xxxxxx or any of its
Subsidiaries to record additional compensation expense on its income statement
with respect to any outstanding stock option or other equity-based award. Xxxxxx
does not have any labor unions and is not a party to any collective bargaining
agreements, in each case within the United States.
Section 4.14. Intellectual Property.
(a) Xxxxxx and its Subsidiaries own or have a valid right to use and
shall own or have a valid right to use as of the Closing Date, all Xxxxxx
Intellectual Property, except where the failure to own or have a valid right to
use could not reasonably be expected to have a Xxxxxx Material Adverse Effect.
For the purposes of this Agreement, "Xxxxxx Intellectual Property" means all
Intellectual Property (i) owned by Xxxxxx or any of its Subsidiaries or (ii)
used or held for use by Xxxxxx or any of its Subsidiaries in their business
pursuant to a valid
28
license agreement. Except as set forth in Section 4.14(a) of the Xxxxxx
Disclosure Schedule, each material item of Xxxxxx Intellectual Property is owned
or licensed by the respective businesses of Xxxxxx and its Subsidiaries to no
less advantageous extent in all material respects as during the twelve (12)
months prior to the date hereof. Xxxxxx and its Subsidiaries have taken
commercially reasonable action to maintain and protect their rights in and to
each material item of Xxxxxx Intellectual Property.
(b) Except as set forth in Section 4.14(b) of the Xxxxxx Disclosure
Schedule, neither Xxxxxx nor any of its Subsidiaries has received any written
claim or notice of infringement or misappropriation of, or conflict with, the
Intellectual Property rights of others, other than such as could not reasonably
be expected to have a Xxxxxx Material Adverse Effect. Except as set forth in
Section 4.14(b) of the Xxxxxx Disclosure Schedule, none of GM, Xxxxxx or any of
Xxxxxx' Subsidiaries has provided any third party any written claim or notice
that such third party has infringed upon, misappropriated, or otherwise come
into conflict with, any Xxxxxx Intellectual Property. Except as set forth in
Section 4.14(b) of the Xxxxxx Disclosure Schedule, Xxxxxx and its Subsidiaries
possess all right, title, and interest in and to, or have a legal, valid,
binding and enforceable right to use, each material item of Intellectual
Property used by Xxxxxx or any of its Subsidiaries, free and clear of all
Encumbrances.
(c) The Xxxxxx Intellectual Property is sufficient to conduct, in all
material respects, the respective businesses of Xxxxxx and its Subsidiaries
after the Merger Effective Time as such businesses were conducted immediately
prior to the Merger Effective Time.
Section 4.15. Contracts. Except as set forth in Section 4.15 of the
Xxxxxx Disclosure Schedule, each material lease, license, contract, agreement or
obligation to which Xxxxxx or any of its Subsidiaries is a party or by which any
of them or any of their properties may be bound is valid, binding and
enforceable and in full force and effect, except where such failures to be
valid, binding and enforceable and in full force and effect could not, in the
aggregate, reasonably be expected to have a Xxxxxx Material Adverse Effect or
have a material adverse impact on the ability of Xxxxxx to consummate the
transactions contemplated by the Xxxxxx Transaction Agreements, and neither
Xxxxxx nor any of its Subsidiaries is in breach of or default thereunder, and,
to Xxxxxx' knowledge, no other party thereto is in breach of or default
thereunder, except for those breaches and defaults that could not reasonably be
expected to have a Xxxxxx Material Adverse Effect or have a material adverse
impact on the ability of Xxxxxx to consummate the transactions contemplated by
the Xxxxxx Transaction Agreements.
Section 4.16. Brokerage and Finder's and Other Fees; Opinions of
Financial Advisors.
(a) Except for obligations to Xxxxxxx, Xxxxx & Co. and Credit Suisse
First Boston Corporation, neither Xxxxxx nor any of its affiliates,
stockholders, directors, officers or employees (in each case, other than GM) has
incurred or will incur on behalf of Xxxxxx or any affiliate of Xxxxxx, any
brokerage, finder's or similar fee in connection with the transactions
contemplated by the Xxxxxx Transaction Agreements. A copy of all agreements
relating to any such fee payable by Xxxxxx or any Subsidiary of Xxxxxx to
Xxxxxxx, Xxxxx & Co. and Credit Suisse First Boston Corporation have been (or
upon request will be) delivered to EchoStar.
(b) Each of Xxxxxxx, Sachs & Co. and Credit Suisse First Boston
Corporation has provided its written opinion, dated as of the date of this
Agreement and addressed to the Board of Directors of GM and to the Board of
Directors of Xxxxxx, to the effect
29
that, as of such date and based on current market conditions, the Exchange
Ratios in the Merger are fair, from a financial point of view, to the holders of
Xxxxxx 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. GM
and Xxxxxx have heretofore provided a copy of such opinions to EchoStar, for
information purposes only, and EchoStar acknowledges that it has no right to
rely on such opinions.
Section 4.17. Board and Stockholder Approval. The Board of Directors
of Xxxxxx, at a meeting duly called and held, has duly determined that the
Xxxxxx Transaction Agreements and the transactions contemplated thereby are
advisable, fair to and in the best interests of Xxxxxx and its stockholders and
has authorized the Xxxxxx Transaction Agreements to be executed, delivered and
performed. Immediately following the execution of this Agreement and such
determinations, GM, in its capacity as sole stockholder of Xxxxxx, shall have,
at a meeting of the sole stockholder, adopted and approved this Agreement (and
the execution, delivery and performance thereof) and the other Xxxxxx
Transaction Agreements and the transactions contemplated hereby and thereby.
Other than the approvals of Xxxxxx and GM as described in the immediately
preceding sentence and the approval of the Xxxxxx Transaction Agreements by GM,
no other vote or consent of the holders of any class or series of Xxxxxx capital
stock is necessary to approve and adopt this Agreement and the transactions
contemplated by the Xxxxxx Transaction Agreements (it being expressly
understood, however, that the Requisite Stockholder Approval is necessary to
approve the GM Transactions).
Section 4.18. Takeover Laws. Prior to the date hereof, the Board of
Directors of Xxxxxx has taken all action necessary to exempt (a) the execution
of the Xxxxxx Transaction Agreements, (b) the Merger and (c) the transactions
contemplated thereby under, or make the foregoing actions not subject to (i) any
takeover law or law that purports to limit or restrict business combinations or
the ability to acquire or vote shares and (ii) any stockholder rights plan or
any similar anti-takeover plan or device.
Section 4.19. Restrictive Agreements. Except as set forth in Section
4.19 of the Xxxxxx Disclosure Schedules, none of Xxxxxx, its Subsidiaries or any
employee, officer, director or consultant of Xxxxxx or its Subsidiaries is party
to or bound by any agreement, contract, policy, license, Permit, document,
instrument, arrangement or commitment that materially limits, or would
materially limit after the Merger Effective Time, the ability of either Xxxxxx
or any of its Subsidiaries or, to Xxxxxx' knowledge, EchoStar or any of
EchoStar's Subsidiaries, to compete in any line of business or with any Person
or in any geographic area.
Section 4.20. Permits. For the purposes of this Agreement, the
"Xxxxxx Permits" shall mean all Permits issued or authorized by any Governmental
Authority (as amended or modified) to, or held by, Xxxxxx or any of its
Subsidiaries (together, "Xxxxxx Permit Entities"), including (a) all Permits
issued by the FCC to any Xxxxxx Permit Entity ("Xxxxxx FCC Licenses") and (b)
all Permits issued to any Xxxxxx Permit Entity by a Governmental Authority
(other than the FCC) authorizing such entity to provide broadcasting or other
communications services (including the provision of direct-to-home video
programming). Set forth on Section 4.20 of the Xxxxxx Disclosure Schedule is a
true and complete list of (i) all Xxxxxx Permits, (ii) all pending applications
for Permits that would be Xxxxxx Permits, if issued or granted, and (iii) all
pending applications by any Xxxxxx Permit Entity for modification, extension or
renewal of Xxxxxx Permits, except that Section 4.20 of the Xxxxxx Disclosure
Schedule need not list such Xxxxxx Permits, applications therefor or
applications in respect thereof that are immaterial to the assets or business of
Xxxxxx and its Subsidiaries taken as a
30
whole. The Xxxxxx Permits are all of the Permits required to be issued to or
held by the Xxxxxx Permit Entities in order to allow such entities to conduct
their respective businesses as currently conducted and the Xxxxxx Permits are in
full force and effect, except where the failure to possess any such Permit or
the failure of any such Permit to be in full force and effect could not
reasonably be expected to have a Xxxxxx Material Adverse Effect. Without
limiting the general provisions of Section 4.9, except as set forth on Section
4.20 of the Xxxxxx Disclosure Schedule, each of the Xxxxxx Permit Entities is in
compliance with (i) its obligations under each of the Xxxxxx Permits owned, held
or possessed by it, and (ii) the rules and regulations of the Governmental
Authority issuing such Xxxxxx Permit, except, in each case, where the failure to
so comply could not reasonably be expected to have a Xxxxxx Material Adverse
Effect. Except as set forth on Section 4.20 of the Xxxxxx Disclosure Schedule
and except for proceedings affecting the satellite industry in general, to
Xxxxxx' knowledge, there is not pending or threatened before the FCC or any
other Governmental Authority any proceeding, notice of violation, order of
forfeiture or complaint, or investigation against any Xxxxxx Permit Entity
relating to any of the Xxxxxx Permits that could reasonably be expected to have
a Xxxxxx Material Adverse Effect. Without limiting the general provisions of
Section 4.5, Section 4.5(d) of the Xxxxxx Disclosure Schedule lists all of the
consents or approvals of, or registrations or filings by any Xxxxxx Permit
Entity with, any Governmental Authority necessary for Xxxxxx to transfer the
Xxxxxx Permits by consummating the transactions contemplated hereby.
Section 4.21. Indian Entities. The consummation by Xxxxxx of the
transactions contemplated by the Xxxxxx Transaction Agreements does not require
action to be taken by Xxxxxx Software Systems Limited ("HSSL") or Xxxxxx
Xxxx.xxx (India) Limited ("HTIL") or any of their respective Affiliates pursuant
to the Securities and Exchange Board of India (Substantial Acquisition of Shares
& Takeovers) Regulations 1997).
ARTICLE 5
COVENANTS OF THE PARTIES
The parties hereto agree as follows with respect to the period from
and after the execution of this Agreement.
Section 5.1. Mutual Covenants.
(a) General. Subject to Section 5.1(b)(v) below, each of the parties
hereto shall use commercially reasonable efforts (except where a different
efforts standard is specifically contemplated by the Xxxxxx Transaction
Agreements or the EchoStar Transaction Agreements, in which case such different
standard shall apply) to take all action and to do all things necessary, proper
or advisable to consummate the Merger and the transactions contemplated by this
Agreement (including using commercially reasonable efforts to cause the
conditions set forth in Article 6 for which such party is responsible to be
satisfied as soon as practicable and to prepare, execute and deliver such
further instruments and take or cause to be taken such other and further action
as any other party hereto shall reasonably request).
(b) Regulatory Matters.
(i) As soon as practicable, and in any event within twenty (20)
business days after the date hereof, each of the parties hereto shall file
any Notification and Report Forms and related material required to be filed
by it with the Federal Trade
31
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 this Agreement and shall promptly make any
further filings pursuant thereto that may be necessary, proper or
advisable.
(ii) As soon as practicable after the date hereof, each of the
parties hereto shall make, and shall cause their Subsidiaries to make, all
necessary filings with or applications to any Governmental Authority that
has issued either a EchoStar Permit or a Xxxxxx Permit, as the case may be,
with respect to the transactions contemplated by the GM Transaction
Agreements, the Xxxxxx Transaction Agreements and the EchoStar Transaction
Agreements, including any necessary applications to the FCC for consent to
the transfer of the EchoStar FCC Licenses and/or the Xxxxxx FCC Licenses
pursuant to the transactions contemplated hereby (the "FCC Consent
Application").
(iii) The parties shall, subject to Section 5.1(b)(v) below: (A)
use their 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 neither party shall,
without the prior consent of the other, agree with any Governmental
Authority 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 to a date within the
ninety (90)-day period prior to the Outside Date (as defined below); (B)
furnish to the other party such information and assistance as such party
reasonably may request in connection with the preparation of any
submissions to, or agency proceedings by, any Governmental Authority under
any Antitrust Law; (C) keep the other party promptly apprised of any
communications with, and inquiries or requests for information from, such
Governmental Authorities; (D) permit the other party to review any material
communication given by it to, and consult with the other party in advance
of any meeting or conference with, any Governmental Authority or, in
connection with any proceeding by a private party, with any other Person,
and to the extent permitted by such applicable Governmental Authority or
other Person, give the other party the opportunity to attend and
participate in such meetings and conferences; and (E) use their best
efforts to cause the condition set forth in Section 6.1(b) of this
Agreement to be satisfied; provided that no action shall be taken which
would be reasonably likely to (1) prevent delivery of the Tax Opinions (as
defined below) or the Ruling (as defined in the GM/Xxxxxx Separation
Agreement), or (2) cause the representations and assumptions underlying the
Tax Opinions or the Ruling not to be true and correct in all material
respects. For purposes of this Agreement, "Antitrust Law" means the Xxxxxxx
Act, as amended, the Xxxxxxx Act, as amended, the HSR Act, the Federal
Trade Commission Act, as amended, and all other federal, state and foreign
statutes, rules, regulations, orders, decrees, administrative and judicial
doctrines and other laws that are designed or intended to prohibit,
restrict or regulate actions having the purpose or effect of monopolization
or restraint of trade or lessening of competition through merger or
acquisition.
(iv) Subject to Section 5.1(b)(v) below, each party shall, and
shall cause its Subsidiaries to, (i) use their best efforts to diligently
prosecute all applications with the FCC, including the FCC Consent
Application, and all similar foreign Governmental Authorities for consent
to the transactions contemplated herein, (ii) use
32
their best efforts to resist or resolve any administrative proceeding or
suit, including appeals, that is instituted to challenge the grant of any
such applications, (iii) furnish to the other party such information and
assistance as such party reasonably may request in connection with the
preparation or prosecution of any such applications, (iv) keep the other
party promptly apprised of any communications with, and inquiries or
requests for information from, such Governmental Authorities with respect
to the transactions contemplated hereby and (v) use their best efforts to
cause the condition set forth in Section 6.1(c) of this Agreement to be
satisfied.
(v) Notwithstanding the covenants of the parties in Section
5.1(a), and Sections 5.1(b)(i), (ii), (iii) and (iv), nothing in this
Agreement shall require, or be deemed to require, (i) the parties to agree
to or effect any divestiture, hold separate any business or assets or take
any other similar action if doing so would result in the expected synergies
of the Merger being reduced to an amount that is no longer meaningful or
(ii) the parties to agree to or effect any divestiture, hold separate any
business or assets or take any other similar action that is not conditional
on the consummation of the Merger. No party shall take or agree to take any
action identified in clause (i) or (ii) of the immediately preceding
sentence without the prior consent of the other party.
(vi) In furtherance and not in limitation of the covenants of
the parties contained in Sections 5.1(b)(i), (ii), (iii) and (iv), each
party shall use its best efforts to resolve such objections if any, as may
be asserted with respect to the transactions contemplated hereby under any
rules and regulations of the FCC ("FCC Regulation") or any Antitrust Law.
In connection with the foregoing, if any administrative or judicial action
or proceeding, including any proceeding by a private party, is instituted
(or threatened to be instituted) challenging any transaction contemplated
by this Agreement as violative of any Antitrust Law or any FCC Regulation,
the parties shall, subject to Section 5.1(b)(v), use their best efforts 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 this
Agreement.
(vii) If any objections are asserted with respect to the
transactions contemplated hereby under any Antitrust Law or any FCC
Regulation or if any suit is instituted by any Governmental Authority or
any private party challenging any of the transactions contemplated hereby
as violative of any Antitrust Law or FCC Regulations, the parties shall,
subject to Section 5.1(b)(v) above, use their best efforts to resolve any
such objections or challenge as such Governmental Authority or private
party may have to such transactions under such law so as to permit
consummation of the transactions contemplated by this Agreement. In
furtherance and not in limitation of the foregoing, the parties (and, to
the extent required by any Governmental Authority, their Subsidiaries and
affiliates over which they exercise control) shall be required, subject to
Section 5.1(b)(v) above, to enter into a settlement, undertaking, consent
decree, stipulation or other agreement (each, a "Settlement") with a
Governmental Authority regarding antitrust or FCC matters in connection
with the transactions contemplated by this Agreement, including any
Settlement that requires any party to hold separate (including by
33
establishing a trust or otherwise) or to sell or otherwise dispose of any
of its assets or its Subsidiaries' assets.
(viii) Notwithstanding anything to the contrary herein, nothing
in this Section 5.1(b) shall limit (a) either party's right to terminate
this Agreement pursuant to Sections 7.1(b)(i) or 7.1(b)(ii), or (b) Xxxxxx'
right to terminate this Agreement pursuant to 7.1(c)(iv).
(c) Tax-Free Treatment. The parties intend the Merger to constitute a
reorganization described in Section 368(a) of the Code. All of the parties and
their respective affiliates shall use commercially reasonable efforts (x) to
cause the Merger to qualify as a reorganization described in Section 368(a) of
the Code as aforesaid, and (y) to obtain, as of the Merger Effective Time and,
if required, as of the filing of the GM Proxy/Consent Solicitation Statement,
the opinions (the "Tax Opinions") of Xxxxxxxx & Xxxxxxxx, special counsel to
EchoStar, and Weil, Gotshal & Xxxxxx LLP, counsel to Xxxxxx substantially, in
the form attached as Exhibits B and C, respectively, in each case to the effect
that the Merger will constitute a reorganization within the meaning of Section
368(a) of the Code, it being understood that in rendering such Tax Opinion, such
tax counsel shall be entitled to rely upon, among other things, representations
of officers of EchoStar and Xxxxxx and of the EchoStar Controlling Stockholder
contained in the tax certificates substantially in the form of Exhibits D, E and
F attached hereto (collectively, the "Tax Certificates") and other assumptions
as such tax counsel may reasonably require. No party hereto nor any of its
affiliates shall take any action that, or fail to take any action the failure of
which, would cause any of the representations in the Tax Certificates to be
untrue. The parties shall take the position for all purposes that the Merger
constitutes a reorganization within the meaning of Section 368(a) of the Code.
(d) NYSE Listing or Nasdaq Quotation. The parties hereto shall use
commercially reasonable efforts to cause the shares of Xxxxxx Class A Common
Stock to be issued pursuant to the Merger and the shares of Xxxxxx Class C
Common Stock to be approved for listing on the NYSE or to be approved for
quotation on Nasdaq, subject to official notice of issuance, prior to the
Closing Date; provided that the exchange on which application is first made for
listing shall be determined in EchoStar's sole discretion.
(e) Access. Except as required by any confidentiality agreement to
which GM, Xxxxxx or any of their Subsidiaries, on the one hand, or EchoStar or
any of its Subsidiaries, on the other hand, is a party or pursuant to Applicable
Law, from and after the date of this Agreement until the Merger Effective Time
(or the termination of this Agreement), the parties hereto shall (i) permit
representatives of the other parties to have reasonable access to the
properties, books, records, contracts, tax records and documents of the parties
and their respective Subsidiaries, to the extent related to the businesses of
Xxxxxx and its Subsidiaries and EchoStar and its Subsidiaries, as the case may
be, at all reasonable times, and in a manner so as not to interfere with the
normal operation of such party's and its Subsidiaries' premises and (ii) furnish
promptly such information concerning such party's and its Subsidiaries'
businesses as the other party or its representatives may reasonably request.
Such access shall be limited to the extent that antitrust counsel to either
party determines that such limitation is advisable under applicable Antitrust
Law. Information obtained by each party pursuant to this Section 5.1(e) shall be
subject to the provisions of the confidentiality agreement among GM, Xxxxxx and
EchoStar, dated October 20, 2001, as amended (the "Confidentiality Agreement"),
which agreement remains in full force and effect.
34
(f) Expenses. Except as otherwise provided in the EchoStar
Transaction Agreements or the Xxxxxx Transaction Agreements, whether or not the
Merger is consummated, each party hereto shall pay its own costs and expenses
associated with the EchoStar Transaction Agreements and the Xxxxxx Transaction
Agreements and the transactions contemplated thereby.
(g) No Solicitation.
(i) Each of the parties 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 party 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 EchoStar, on the one hand, or Xxxxxx, on the other hand, or any
acquisition of any capital stock or any material portion of the assets
(except for (1) acquisitions of assets in the ordinary course of business
consistent with past practice and permitted by Section 5.3(a)(v) of this
Agreement and (2) consummation of the transactions contemplated by the
EchoStar Transaction Agreements, the GM Transaction Agreements and the
Xxxxxx Transaction Agreements) of EchoStar or any of its Subsidiaries, on
the one hand, or Xxxxxx or any of its Subsidiaries, on the other hand, or
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 EchoStar or any of its Subsidiaries, on
the one hand, or Xxxxxx or any of its Subsidiaries, on the other hand; 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 any of the foregoing actions);
provided, however, that at any time prior to such time, if any, that the
Requisite Stockholder Approval (as defined in the GM/Xxxxxx Separation
Agreement) shall have been received with respect to the GM Transactions, Xxxxxx
may take any action described in the foregoing clauses (B) or (C) (in the case
of (C), only to the extent necessary to permit the discussions or negotiations
contemplated by clause (B)) or (D) in respect of any Person, but only if and to
the extent GM is so permitted under Section 5.1(j) of the Implementation
Agreement.
35
(ii) Each party agrees that it will, and will cause its
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 have
solicited or caused to be solicited by their respective financial advisors
indications of interest and proposals for a Competing Transaction.
(h) Additional Agreements. Each of the parties hereto will comply in
all material respects with Applicable Law in connection with its execution,
delivery and performance of the Xxxxxx Transaction Agreements and the EchoStar
Transaction Agreements and the transactions contemplated thereby.
(i) Blue Sky. Each of the parties hereto will use commercially
reasonable efforts to obtain prior to the Merger Effective Time all necessary
United States or foreign blue sky or similar securities law permits and
approvals required to permit the distribution of the shares of Xxxxxx Class A
Common Stock and Xxxxxx Class B Common Stock to be issued in accordance with the
provisions of this Agreement.
(j) Stock Options. Other than grants of stock options (i) to
individuals who are hired or are promoted on or after the date hereof, (ii)
after prior notice by EchoStar or Xxxxxx to the chief executive officer of the
other party describing special circumstances, to employees affected by such
circumstances, and (iii) to acquire not more than 3,000,000 shares of PanAmSat's
common stock, in each case which are made in the ordinary course of business
consistent with past practice and which will not accelerate in vesting or
exercisability as a result of or in connection with the transactions
contemplated by this Agreement as a result of a termination of employment of
such person), none of the parties hereto shall grant or cause to be granted any
options to acquire any GM Class H Common Stock or any capital stock of EchoStar,
Xxxxxx, PanAmSat or their respective Subsidiaries to any Person from and after
the date of this Agreement until the Merger Effective Time.
(k) The Merger Financing. As soon as reasonably practicable following
the date of this Agreement, EchoStar and Xxxxxx shall use commercially
reasonable efforts to (i) finalize and enter into a Merger Financing Agreement
which reflects, in all material respects, the terms and conditions in the Merger
Commitment Letter, and (ii) at or immediately prior to the Spin-Off Effective
Time (as defined in the Implementation Agreement), consummate the Merger
Financing in accordance with the Merger Financing Agreement and/or, subject to
the limitation set forth in Section 5.2(a)(i), with the proceeds from one or
more private placements or public offerings of debt or equity securities of
EchoStar. Subject to the remainder of this Section 5.1(k), EchoStar shall
control the terms and negotiation of the Merger Financing Agreement.
Notwithstanding anything to the contrary contained herein, the parties agree
that all material terms of the Merger Financing Agreement shall be reasonably
acceptable to Xxxxxx (and Xxxxxx agrees not to object to the commercial pricing
terms of such Merger Financing Agreement or to any other terms that are
consistent with the terms of the Merger Commitment Letter). EchoStar shall (x)
keep Xxxxxx apprised of all material developments in respect of the Merger
Financing, and (y) promptly provide Xxxxxx with copies of all drafts of
documents or other material correspondence related to the Merger Financing and,
with respect to such draft documents, provide Xxxxxx and its advisors with a
reasonable opportunity to comment on all drafts of such documents. Each of
Xxxxxx and EchoStar shall use commercially reasonable efforts to assist in
obtaining the Merger Financing, including by (1) making available to the other
party and the lenders in the Merger Financing and their representatives,
personnel, documents and information
36
of such party and its Subsidiaries, as may be reasonably requested by the other
party to facilitate the negotiation and consummation of the Merger Financing
(including in connection with the due diligence investigation by such lenders
and the preparation of business plans and the development of covenants) and (2)
cooperating with the other party in the negotiation of the Merger Financing
Agreement and, in connection with the closing of the Merger or the GM
Transactions, as the case may be, entering into security, guarantee and similar
agreements, effective prior to or upon the Spin-Off Effective Time as may be
required by the Merger Financing Agreement or reasonably requested by the other
party for purposes of consummating the Merger Financing in accordance with the
Merger Financing Agreement; provided, that nothing in this Section 5.1(k) shall
require Xxxxxx to modify its business plans or otherwise alter in any material
respect the manner in which it conducts its business.
(l) DirecTV Name. From and after the Merger Effective Time, the
DirecTV name shall be the brand adopted by the Surviving Corporation and those
of its Subsidiaries which are in the direct-to-home satellite television
business.
(m) Non-Disparagement. From and after the date of this Agreement, each
party hereto agrees that it and its Subsidiaries and affiliates shall not
disparage or in any way portray the other party or the other party's
Subsidiaries or affiliates or any of such Person's products, services or trade
names, either directly or indirectly, in the form of oral statements, written
statements, electronic communications or otherwise, in a negative light. In
furtherance thereof, neither party nor any of such party's Subsidiaries or
affiliates shall make, direct others to make, suggest to others to make or
otherwise directly or indirectly cause or assist others to make disparaging,
false or misleading statements (whether in the form of oral statements, written
statements, electronic or other communications), or engage in misleading conduct
regarding the other party or the other party's Subsidiaries or affiliates or any
of such Person's products, services or trade names. Notwithstanding the
foregoing, nothing in this Section 5.1(m) shall limit any party's ability to
continue to compete with the other party.
(n) No Announcement Regarding Surviving Platform. From and after the
date of this Agreement, without the prior written consent of the other party,
each party hereto agrees that it and its Subsidiaries and affiliates shall not
make, nor shall any of them direct others to make or suggest to others to make,
directly or indirectly, any public statements regarding which party's direct-to-
home platform will be utilized following consummation of the Merger. In any
case, the parties agree that the surviving platform will be MPEG2/DirecTV
compatible .
(o) Affiliates. Prior to the Merger Effective Time, each party shall
deliver to the other party a list (the "Affiliate List") identifying all Persons
who are, in the good faith judgment of such party, "affiliates" of such party
for purposes of Rule 145 of the Securities Act. Each party shall use
commercially reasonable efforts to deliver or cause to be delivered to the other
party, prior to the Merger Effective Time, an agreement (in the form of Exhibit
G attached hereto) executed by each Person listed on the Affiliate List and
executed by each Person who becomes an "affiliate" of such party for purposes of
Rule 145 of the Securities Act after delivery of the Affiliate List.
(p) Employment Agreement. EchoStar and the Chief Executive Officer of
EchoStar shall enter into an Employment Agreement, to become effective at the
Merger Effective Time, on terms to be agreed upon by such Chief Executive
Officer and the Chief Executive Officer of Xxxxxx, provided that the terms shall
be ratified by the independent directors of the Board of Directors of the
Surviving Corporation.
37
Section 5.2. Covenants of EchoStar.
(a) Conduct of EchoStar's Operations. During the period from the date
of this Agreement to the Merger Effective Time, except as expressly contemplated
by the EchoStar Transaction Agreements and the transactions expressly
contemplated thereby, EchoStar shall, and shall cause its Subsidiaries to,
conduct their respective businesses and operations in the ordinary course,
consistent with past practices, and use commercially reasonable efforts to
maintain and preserve their business organizations and their material rights and
franchises and to retain the services of the officers and key employees and
maintain relationships with customers, suppliers, lessees, licensees and other
third parties to the end that their goodwill and ongoing business shall not be
impaired in any material respect, including by continuing to compete with Xxxxxx
and its Subsidiaries. Without limiting the generality of the foregoing, during
the period from the date of this Agreement to the Merger Effective Time, except
as expressly contemplated by the EchoStar Transaction Agreements, EchoStar shall
not and shall cause its Subsidiaries not to, except as otherwise set forth in
Section 5.2(a) of the EchoStar Disclosure Schedule, without the prior written
consent of Xxxxxx:
(i) do or effect any of the following actions with respect to
EchoStar's or any of its Subsidiaries securities: (A) adjust, split,
combine, recapitalize or reclassify its capital stock, (B) make, declare or
pay any dividend or distribution on, or directly or indirectly redeem,
purchase or otherwise acquire, any shares of its capital stock or any
securities or obligations convertible into or exchangeable for any shares
of its capital stock, (C) grant any Person any right or option to acquire
any shares of its capital stock other than grants permitted pursuant to
Section 5.1(j) hereof, (D) issue, deliver or sell or agree to issue,
deliver or sell any additional shares of its capital stock or any
securities, instruments or obligations convertible into or exchangeable or
exercisable for any shares of its capital stock or such securities (except
pursuant to the exercise of outstanding options and options issued after
the date hereof in accordance with the terms of Section 5.1(j) of this
Agreement) or (E) enter into any agreement, understanding or arrangement
with respect to the sale or voting of its capital stock; provided, however,
EchoStar and its Subsidiaries shall be permitted to issue debt securities,
equity securities or convertible/exchangeable securities up to an aggregate
amount of net proceeds to EchoStar of One Billion Five Hundred Million
($1,500,000,000.00) or, if the Internal Revenue Service issues to GM an AOL
Section 355(e) Ruling (as defined in the Implementation Agreement), Two
Billion Five Hundred Million ($2,500,000,000.00) (collectively, "Permitted
Equity Issuances"); provided, further, however, that the entire net
proceeds of any and all Permitted Equity Issuances shall be held directly
by EchoStar (rather than any Subsidiaries of EchoStar) at the Merger
Effective Time;
(ii) take any action to intentionally and improperly interfere
with Xxxxxx' or its Subsidiaries' existing contractual or economic
relationships or with their suppliers, equipment manufacturers, dealers and
retailers by encouraging or inducing such Persons not to perform their
existing contracts with or otherwise conduct business with Xxxxxx or its
Subsidiaries;
(iii) sell, transfer, lease, pledge, mortgage, encumber or
otherwise dispose of any amount of EchoStar's or any of its Subsidiaries
property or assets that is material to EchoStar and its Subsidiaries, taken
as a whole, other than in the ordinary course of business, consistent with
past practice;
38
(iv) make or propose any changes in its certificate of
incorporation or by-laws (or equivalent organizational documents);
(v) merge or consolidate with any other Person, or acquire
assets or capital stock of any other Person which are material to EchoStar
and its Subsidiaries taken as a whole, or enter into any confidentiality
agreement with any Person with respect to any such transaction;
(vi) create any Subsidiaries which are material to EchoStar
and its Subsidiaries taken as a whole and which are not, directly or
indirectly, wholly-owned by EchoStar;
(vii) except for the adoption of a Plan providing for grants of
options to acquire EchoStar Class B Common Stock and the entering into an
employment agreement with the EchoStar Controlling Stockholder pursuant to
Section 5.1(p) hereof, enter into or modify any EchoStar Plan or other
employment, severance, change in control, termination or similar agreements
or arrangements with, or grant any bonuses, salary increases, severance or
termination pay to, or otherwise increase the compensation or benefits of,
any officer, director, consultant or employee of EchoStar or its
Subsidiaries, other than entering into or extending any employment
agreement, payment of severance or termination benefits or increases in
salary, bonus, compensation or benefits granted in the ordinary course of
business consistent with past practice, except as may be required by
Applicable Law or a binding written contract in effect on the date of this
Agreement;
(viii) except as may be required by Applicable Law or by
accounting principles, change any method or principle of accounting in a
material manner that is inconsistent with past practice;
(ix) take any action that would reasonably be expected to
result in the representations and warranties set forth in Article 3
becoming false or inaccurate such that the condition set forth in Section
6.2(a) would fail to be satisfied;
(x) enter into or carry out any other transaction which is
material to EchoStar and its Subsidiaries, taken as a whole, other than in
the ordinary and usual course of business;
(xi) take any action which could reasonably be expected to
adversely affect or delay the ability of any parties hereto to obtain any
approval of any Governmental Authority required to consummate the
transactions contemplated hereby;
(xii) except as specifically permitted in the Implementation
Agreement, amend the EchoStar Transaction Agreements to which Xxxxxx is not
a party; or
(xiii) agree in writing or otherwise to take any of the
foregoing actions.
(b) Notification of Certain Matters. EchoStar shall give prompt
notice to Xxxxxx of (i) the occurrence or non-occurrence of any event the
occurrence or non-occurrence of
39
which would cause any representation or warranty of EchoStar contained in this
Agreement to be untrue or inaccurate in any material respect at or prior to the
Merger Effective Time, (ii) any material failure of EchoStar to comply with or
satisfy any covenant, condition or agreement to be complied with or satisfied by
it hereunder and (iii) any EchoStar Material Adverse Effect; provided, however,
that the delivery of any notice pursuant to this Section 5.2(b) shall not limit
or otherwise affect the remedies available hereunder to Xxxxxx.
(c) Preparation and Filing of the EchoStar Information Statement.
EchoStar shall comply with Section 14(c) of the Exchange Act with respect to the
EchoStar Information Statement (as defined in the Implementation Agreement) in
accordance with the provisions of the Implementation Agreement.
(d) Permit Matters. During the period from the date of this
Agreement to the Merger Effective Time, EchoStar shall and shall cause its
Subsidiaries to (i) take all actions necessary to maintain and preserve the
EchoStar Permits and (ii) refrain from taking any action that would give the FCC
or any other Governmental Authority with jurisdiction reasonable grounds to
institute proceedings for the suspension, revocation or adverse modification of
any EchoStar Permits, except where the failure to take such action, or the
taking of such action, as the case may be, could not reasonably be expected to
have a EchoStar Material Adverse Effect.
(e) EchoStar Notes. EchoStar shall, on or prior to the date that
is 210 days after the date hereof either (i) use commercially reasonable efforts
to cause the indentures (the "EchoStar Indentures") relating to the debt
instruments of EchoStar and its Subsidiaries listed on Section 5.2(e) of the
EchoStar Disclosure Schedule (the "EchoStar Notes") to be amended to provide
that the consummation of the Merger and the other transactions contemplated by
the EchoStar Transaction Agreements will not constitute a "Change in Control"
under such EchoStar Indentures, or (ii) obtain additional committed financing,
on terms and conditions reasonably acceptable to Xxxxxx, sufficient in amount to
refinance all of the indebtedness outstanding under those EchoStar Indentures to
which an amendment to the "Change in Control" provision was not obtained.
Notwithstanding the foregoing, in lieu of soliciting such consent or obtaining
such additional financing, EchoStar may, not later than 210 days after the date
hereof, present to Xxxxxx a plan (a "Plan"), taking into account the prevailing
market for the EchoStar Notes, designed so that at and after the Merger
Effective Time, the Surviving Corporation and its Subsidiaries would not be in
breach of their obligations under the EchoStar Indentures and would be able to
comply with their obligations under the terms of each EchoStar Indenture. Xxxxxx
agrees to consider the Plan in good faith and notify EchoStar within 15 Business
Days of receiving the Plan as to whether EchoStar may implement the Plan. If
Xxxxxx agrees that EchoStar may implement the Plan, EchoStar shall as soon as
practicable thereafter implement the Plan. If Xxxxxx does not agree that
EchoStar may implement the Plan, EchoStar shall promptly, and in any event
within 20 Business Days thereafter, take one of the actions described in the
first sentence of this Section 5.2(e). If EchoStar determines to solicit
consents as described in subsection clause (i) of this Section 5.2(e), such
consents shall be solicited on reasonable and customary terms, including the
offering by EchoStar of a reasonable and customary consent fee or interest
payment modification in order to induce the requisite number of holders of
EchoStar Notes to consent to such amendments so as to not require EchoStar to
effect a "Change in Control" offer to the holders of such EchoStar Notes.
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Section 5.3. Covenants of Xxxxxx.
(a) Conduct of Xxxxxx' Operations. During the period from the
date of this Agreement to the Merger Effective Time, except (i) with respect to
the consummation of the GM Transactions (including the distribution, if any, by
Xxxxxx of a $4,200,000,000 note to GM or an affiliate thereof), (ii) as
expressly contemplated by the Xxxxxx Transaction Agreements and the transactions
expressly contemplated thereby, (iii) for any redemption of any shares of Series
A Preferred Stock in connection with the conversion, redemption or cancellation
of the GM Series H Preference Stock in accordance with the terms of the
Certificate of Designations relating to the GM Series H Preference Stock, (iv)
for any roll up transactions with respect to Xxxxxx' DBS business in Latin
America substantially in accordance with Section 5.3(a) of the Xxxxxx Disclosure
Schedule, and (v) for the sale or refinancing of the PanAmSat Note (as defined
in the GM/Xxxxxx Separation Agreement), Xxxxxx shall and shall cause its
Subsidiaries (other than PanAmSat and HSSL and their Subsidiaries) to, and shall
use commercially reasonable efforts to cause PanAmSat and HSSL to, conduct their
businesses and operations in the ordinary course, consistent with past practice,
and shall use their commercially reasonable efforts to maintain and preserve
their business organization and its material rights and franchises and to retain
the services of its officers and key employees and maintain relationships with
customers, suppliers, lessees, licensees and other third parties to the end that
their goodwill and ongoing business shall not be impaired in any material
respect, including by continuing to compete with EchoStar. Without limiting the
generality of the foregoing, during the period from the date of this Agreement
to the Merger Effective Time, except (i) with respect to the consummation of the
GM Transactions, (ii) as expressly contemplated by the Xxxxxx Transaction
Agreements and the transactions contemplated thereby, (iii) the sale or
refinancing of the PanAmSat Note, (iv) for any roll up transactions with respect
to Xxxxxx' DBS business in Latin America substantially in accordance with
Section 5.3(a) of the Xxxxxx Disclosure Schedule, or (v) as otherwise set forth
in Section 5.3(a) of the Xxxxxx Disclosure Schedule, Xxxxxx shall not and shall
cause its Subsidiaries (other than PanAmSat and HSSL and their Subsidiaries) not
to, and shall use commercially reasonable efforts to cause PanAmSat and HSSL and
their Subsidiaries not to, without the prior written consent of EchoStar:
(i) do or effect any of the following actions with
respect to Xxxxxx' or any of its Subsidiaries' securities: (A) adjust,
split, combine, recapitalize or reclassify its capital stock, (B) make,
declare or pay any dividend or distribution on, or directly or indirectly
redeem, purchase or otherwise acquire, any shares of its capital stock or
any securities or obligations convertible into or exchangeable for any
shares of its capital stock, (C) grant any Person any right or option to
acquire any shares of its capital stock other than grants in accordance
with the provisions of Section 5.1(j) hereof, (D) except with respect to
the issuance of Xxxxxx Preference Stock in connection with the Greater
Spinco Preference Share Exchange (as defined in the Implementation
Agreement), issue, deliver or sell or agree to issue, deliver or sell any
additional shares of its capital stock or any securities, instruments or
obligations convertible into or exchangeable or exercisable for any shares
of its capital stock or such securities (except pursuant to the exercise of
outstanding options and options issued after the date hereof in accordance
with the terms of Section 5.1(j) of this Agreement) or (E) enter into any
agreement, understanding or arrangement with respect to the sale or voting
of its capital stock;
(ii) take action to intentionally and improperly
interfere with EchoStar's or its Subsidiaries' existing contractual
economic relationships or with their
41
suppliers, equipment manufacturers, dealers and retailers by encouraging or
inducing such Persons not to perform their existing contracts with or
otherwise conduct business with EchoStar or its Subsidiaries;
(iii) sell, transfer, lease, pledge, mortgage, encumber or
otherwise dispose of any amount of Xxxxxx or any of its Subsidiaries'
property or assets that is material to Xxxxxx and its Subsidiaries, taken
as a whole, other than in the ordinary course of business, consistent with
past practice;
(iv) make or propose any changes in its certificate of
incorporation or by-laws (or equivalent organizational documents);
(v) merge or consolidate with any other Person or
acquire assets or capital stock of any other Person which are material to
Xxxxxx and its Subsidiaries, taken as a whole or enter into any
confidentiality agreement with any Person with respect to any such
transaction;
(vi) create any Subsidiaries which are material to Xxxxxx
and its Subsidiaries taken as a whole and which are not, directly or
indirectly, wholly owned by Xxxxxx;
(vii) enter into or modify any Xxxxxx Plan or other
employment, severance, change in control, termination or similar agreements
or arrangements with, or grant any bonuses, salary increases, severance or
termination pay to, or otherwise increase the compensation or benefits of,
any officer, director, consultant or employee of Xxxxxx or its
Subsidiaries, other than pursuant to the Employee Matters Agreement,
payment of severance or termination benefits or increases in salary,
compensation or benefits granted in the ordinary course of business
consistent with past practice or as provided for in the Employee Matters
Agreement contemplated by the GM/Xxxxxx Separation Agreement, except as may
be required by Applicable Law or a binding written contract in effect on
the date of this Agreement;
(viii) except as may be required by Applicable Law or by
accounting principles, change any method or principle of accounting in a
material manner that is inconsistent with past practice;
(ix) take any action that would reasonably be expected to
result in the representations and warranties set forth in Article 4
becoming false or inaccurate such that the condition set forth in Section
6.3(a) would fail to be satisfied;
(x) enter into or carry out any other transaction which
is material to Xxxxxx and its Subsidiaries, taken as a whole, other than in
the ordinary and usual course of business;
(xi) take any action which could reasonably be expected
to adversely affect or delay the ability of any parties hereto to obtain
any approval of any Governmental Authority required to consummate the
transactions contemplated hereby;
42
(xii) except as specifically permitted in the
Implementation Agreement, amend the Xxxxxx Transaction Agreements to which
EchoStar is not a party; or
(xiii) agree in writing or otherwise to take any of the
foregoing actions.
For purposes of this Agreement, the obligation of Xxxxxx to use commercially
reasonable efforts to cause PanAmSat or HSSL to take or not take any action
shall require only that Xxxxxx (i) vote the shares it owns in PanAmSat and HSSL
on any matter submitted by PanAmSat and HSSL, as applicable, for approval of its
respective stockholders, (ii) request that PanAmSat and HSSL act in a manner
consistent with the provisions of this Agreement and (iii) request that any
employees of Xxxxxx who serve as members of the Board of Directors of PanAmSat
or HSSL vote on matters submitted to the Board of Directors of PanAmSat or HSSL,
as applicable, to the extent that so voting would be considered by them to be in
the best interests of PanAmSat or HSSL, as applicable, and its respective
stockholders and otherwise consistent with their fiduciary duties as directors.
(b) Notification of Certain Matters. Xxxxxx shall give prompt
notice to EchoStar of (i) the occurrence or non-occurrence of any event the
occurrence or non-occurrence of which would cause any representation or warranty
of Xxxxxx contained in this Agreement to be untrue or inaccurate in any material
respect at or prior to the Merger Effective Time, (ii) any material failure of
Xxxxxx to comply with or satisfy any covenant, condition or agreement to be
complied with or satisfied by them hereunder and (iii) any Xxxxxx Material
Adverse Effect; provided, however, that the delivery of any notice pursuant to
this Section 5.3(b) shall not limit or otherwise affect the remedies available
hereunder to EchoStar.
(c) Xxxxxx Boards, Committees and Officers. Xxxxxx shall take
all appropriate action such that, at the Merger Effective Time, the Board of
Directors, committees of the Board of Directors, composition of such committees
(including chairpersons thereof) and certain officers of Xxxxxx (as indicated on
Exhibit H) shall be as set forth on Exhibit H until the earlier of the
resignation or removal of any individual listed on or designated in accordance
with Exhibit H or until their respective successors are duly appointed or
elected and qualified, as the case may be. On or prior to the Merger Effective
Time, the Management Transition Committee referred to in Section 1.6 hereof may
designate, with the unanimous approval of the members of the Management
Transition Committee, additional officers who shall be added to Exhibit H,
provided, that appointment of such additional officers must be approved by the
Board of Directors of the Surviving Corporation after the Merger Effective Time.
If any officer listed on or appointed in accordance with Exhibit H ceases to be
a full-time employee of Xxxxxx or EchoStar prior to the Merger Effective Time,
or if any director, committee member or committee chairman listed or designated
on Exhibit H is not available to serve as such at the Merger Effective Time, the
parties hereto shall, except as otherwise provided in Exhibit H, choose another
individual to serve in such individual's stead. On or prior to the Merger
Effective Time, Xxxxxx, to the extent necessary, shall deliver to EchoStar
evidence of the resignations of the directors of Xxxxxx not so designated to be
continuing to serve as directors of Xxxxxx after the Merger Effective Time, such
resignations to be effective as of the Merger Effective Time.
(d) Permit Matters. During the period from the date of this
Agreement to the Merger Effective Time, Xxxxxx shall and shall cause its
Subsidiaries to (i) take all actions necessary to maintain and preserve the
Xxxxxx Permits and (ii) refrain from taking any action that
43
would give the FCC or any other Governmental Authority with jurisdiction
reasonable grounds to institute proceedings for the suspension, revocation or
adverse modification of any Xxxxxx Permits, except where the failure to take
such action, or the taking of such action, as the case may be, could not
reasonably be expected to have a Xxxxxx Material Adverse Effect.
(e) Certain Matters with respect to Indian Entities. Notwithstanding
anything to the contrary contained herein or in any other Xxxxxx Transaction
Agreement, nothing in any of such agreements shall permit EchoStar or any other
Person, at any time prior to the Merger Effective Time, to (A) appoint or
influence the appointment of any officers or directors of HSSL or HTIL, (B)
control, direct or influence the management or policy decisions of HSSL or HTIL,
or (C) engage in any other activity or exercise any other rights that would
result in an assumption or change of control of HSSL or HTIL. For purposes of
this Section 5.3(e) "control" shall have the meaning specified in the Securities
and Exchange Board of India (Substantial Acquisition of Shares & Takeovers)
Regulations 1997.
(f) Indemnification; Directors' and Officers' Insurance.
(i) From and after the Merger Effective Time, the Surviving
Corporation agrees that it will indemnify and hold harmless each present
and former director and officer of EchoStar and each of its Subsidiaries,
and each person appointed by EchoStar to serve as director on another
corporation's board of directors (when acting in such capacity), determined
as of the Merger Effective Time (the "EchoStar Indemnified Parties"),
against any costs or expenses (including reasonable attorneys' fees),
judgments, fines, losses, claims, damages or liabilities (collectively,
"Costs") incurred in connection with any claim, action, suit, proceeding or
investigation, whether civil, criminal, administrative or investigative,
arising out of or pertaining to matters existing or occurring at or prior
to the Merger Effective Time, whether asserted or claimed prior to, at or
after the Merger Effective Time, to the fullest extent that EchoStar would
have been permitted under Nevada law and its articles of incorporation or
by-laws in effect on the date hereof to indemnify such person (and Merger
shall also advance expenses as incurred to the fullest extent permitted
under applicable law provided the person to whom expenses are advanced
provides an undertaking to repay such advances if it is ultimately
determined that such person is not entitled to indemnification); and
provided, further, that any determination required to be made with respect
to whether an officer's or director's conduct complies with the standards
set forth under Nevada law and EchoStar's articles of incorporation and by-
laws shall be made by independent counsel selected by the Surviving
Corporation.
(ii) Any EchoStar Indemnified Party wishing to claim
indemnification under paragraph (i) of this Section 5.3(f), upon learning
of any such claim, action, suit, proceeding or investigation, shall
promptly notify the Surviving Corporation thereof, but the failure to so
notify shall not relieve the Surviving Corporation of any liability it may
have to such EchoStar Indemnified Party if such failure does not materially
prejudice the indemnifying party. In the event of any such claim, action,
suit, proceeding or investigation (whether arising before or after the
Merger Effective Time), (i) the Surviving Corporation shall have the right
to assume the defense thereof and the Surviving Corporation shall not be
liable to such EchoStar Indemnified Parties for any legal expenses of other
counsel or any other expenses subsequently incurred by such EchoStar
Indemnified Parties in connection with the defense thereof, except that if
the Surviving Corporation elects not to assume such defense or counsel for
44
the EchoStar Indemnified Parties advises that there are issues which raise
conflicts of interest between the Surviving Corporation and the EchoStar
Indemnified Parties, the EchoStar Indemnified Parties may retain one
counsel satisfactory to them, and the Surviving Corporation shall pay all
reasonable fees and expenses of such counsel for the EchoStar Indemnified
Parties promptly as statements therefor are received, (ii) the EchoStar
Indemnified Parties will cooperate in the defense of any such matter and
(iii) the Surviving Corporation shall not be liable for any settlement
effected without its prior written consent; and provided, further, that the
Surviving Corporation shall not have any obligation hereunder to any
EchoStar Indemnified Party if and when a court of competent jurisdiction
shall ultimately determine, and such determination shall have become final,
that the indemnification of such EchoStar Indemnified Party in the manner
contemplated hereby is prohibited by applicable law. If such indemnity is
not available with respect to any EchoStar Indemnified Party, then the
Surviving Corporation and the EchoStar Indemnified Party shall contribute
to the amount payable in such proportion as is appropriate to reflect
relative faults and benefits.
(iii) For a period of six years after the Merger Effective Time,
the Surviving Corporation shall provide officers' and directors' liability
insurance ("D&O Insurance") covering the EchoStar Indemnified Parties for
all applicable incidents, acts or omissions occurring prior to the Merger
Effective Time, regardless of when, and occurring after the Merger
Effective Time until the six year anniversary of the Merger Effective Time.
Such insurance coverage shall be no less favorable to the EchoStar
Indemnified Parties in coverage or amount than the greater of (A) the
insurance coverage in effect for the Surviving Corporation's officers and
directors at the Spin-Off Effective time and (B) the insurance coverage in
effect for EchoStar's officers and directors as of the date hereof. The
term "coverage" as used in the Section 5.3(f) shall be deemed to include
all excess coverage.
(iv) If the Surviving Corporation or any of its successors or
assigns (i) shall consolidate with or merge into any other corporation or
entity and shall not be the continuing or surviving corporation or entity
of such consolidation or merger or (ii) shall transfer all or substantially
all of its properties and assets to any individual, corporation or other
entity, then, and in each such case, proper provisions shall be made so
that the successors and assigns of the Surviving Corporation shall assume
all of the obligations set forth in this Section.
(v) The provisions of this Section are intended to be for the
benefit of, and shall be enforceable by, each of the EchoStar Indemnified
Parties, their heirs and their representatives.
(g) Supplemental Indentures and Registration Rights Regarding Certain
EchoStar Notes. Xxxxxx shall execute and deliver at the Merger Effective Time
supplemental indentures in order to assume the obligations of EchoStar under the
indentures relating to the debt instruments of EchoStar and its Subsidiaries
listed on Schedule 5.3(g) of the EchoStar Disclosure Schedule, in each case in
accordance with the applicable EchoStar indenture. In addition, the Surviving
Corporation shall assume the obligations of EchoStar and its Subsidiaries under
those registration rights agreements set forth in Section 5.3(g) of the EchoStar
Disclosure Schedule.
45
ARTICLE 6
CONDITIONS
Section 6.1. Mutual Conditions. The obligations of the parties
hereto to consummate the Merger shall be subject to fulfillment of each and all
of the following conditions:
(a) No temporary restraining order, preliminary or permanent
injunction or other order or decree issued by a court of competent jurisdiction
or Governmental Authority of competent jurisdiction which prevents the
consummation of the Merger shall have been issued and remain in effect, and no
statute, rule or regulation shall have been enacted by any Governmental
Authority which prevents the consummation of the Merger.
(b) All waiting periods applicable to the consummation of the Merger
under the HSR Act and any similar law of foreign jurisdictions shall have
expired or been terminated and all approvals of, or filings with, any
Governmental Authority (other than the FCC) required to consummate the
transactions contemplated hereby shall have been obtained or made, other than
approvals and filings, the failure to obtain or make which, in the aggregate,
are not reasonably likely to have a Combined Companies Material Adverse Effect.
For the purposes of this Agreement, a "Combined Companies Material Adverse
Effect" means an event, change, circumstance or effect that has had or is
reasonably likely to have a material adverse effect on the business, operations,
assets, liabilities or financial condition of Xxxxxx, EchoStar and their
respective Subsidiaries, taken as a whole, assuming consummation of the Merger,
other than events, changes, circumstances or effects that arise out of or result
from (w) economic factors affecting the economy or financial markets as a whole
or generally affecting the direct broadcast satellite industry, (x) the Xxxxxx
Recapitalization, the Spin-Off and the GM Debt/Equity Exchanges, (y) the
announcement of the execution of the this Agreement and the other agreements
contemplated hereby (including any cancellations of or delays in customer
orders, any reduction in sales, any disruption in supplier, distributor, partner
or similar relationships or any loss of employees) and (z) any and all actions
taken by Xxxxxx or EchoStar pursuant to Section 5.1(b) hereof and the effects
thereof.
(c) All material orders and approvals of the FCC required in
connection with the consummation of the transactions contemplated hereby shall
have been obtained; provided, however, that the provisions of this Section
6.1(c) shall not be available to any party whose failure to fulfill its
obligations pursuant to Section 5.1(b) has been the cause of, or shall have
resulted in, the failure to obtain such consent or approval or action.
(d) The GM Transactions (including the GM Charter Amendment, the
Xxxxxx Recapitalization and the Spin-Off) shall have been consummated in
accordance with the terms contemplated by the Xxxxxx Transaction Agreements and
the GM Transaction Agreements; provided, however, that the consummation of any
Debt/Equity Exchange shall not be a condition to Closing.
(e) All of the conditions to the consummation of the Merger Financing
shall have been satisfied and the parties shall be prepared to consummate the
Merger Financing immediately following the Merger Effective Time.
(f) The shares of Xxxxxx Class A Common Stock to be issued pursuant
to the Merger and the shares of Xxxxxx Class C Common Stock outstanding
immediately prior to
46
the Merger Effective Time shall have been approved for listing on the NYSE or
approved for quotation on Nasdaq, subject to official notice of issuance.
(g) The GM Registration Rights Agreement (as defined in the
Implementation Agreement) and the EchoStar Controlling Stockholder Registration
Rights Agreement (as defined in the Implementation Agreement) have been entered
into and shall be in full force and effect; provided, however, that the
provisions of this Section 6.1(g) shall not be available to any party if such
party's failure to enter into a contract has been the cause of, or shall have
resulted in, the failure to enter into these agreements;
(h) The Surviving Corporation would be permitted to issue,
immediately following the Merger Effective Time, capital stock of the Surviving
Corporation having an aggregate fair market value that is at least equal to the
Minimum Amount (as defined below), without such issuance resulting in a breach
of Section 6.2(a) or Section 6.2(c) of the Implementation Agreement (without
regard to whether GM shall have determined that such issuance would not
jeopardize the Tax-Free Status of the Spin-Off (as defined in the Implementation
Agreement) pursuant thereto), it being understood that the determination of the
amount of capital stock of the Surviving Corporation that may be so issued:
(i) shall take into account (A) all capital stock of the Surviving
Corporation that is outstanding after giving effect to the consummation of
the Xxxxxx Recapitalization and the Merger, and (B) all options or rights
to acquire, and securities that are convertible into or exchangeable for,
capital stock of the Surviving Corporation that are outstanding after
giving effect to the consummation of the Xxxxxx Recapitalization and the
Merger (whether or not such options or rights or conversion or exchange
features are then exercisable or are contingent on the occurrence or non-
occurrence of a future event), to the extent that the acquisition of
capital stock thereunder would be presumed under Section 6.2(g) of the
Implementation Agreement to be part of a Section 355(e) Plan (as defined in
the Implementation Agreement) or otherwise reasonably would be expected to
be treated as part of a Section 355(e) Plan that includes the Spin-Off;
(ii) shall give effect to the presumptions set forth in Section 6.2(g)
of the Implementation Agreement and, in addition, shall be based on (A) the
assumption that the Surviving Corporation shall issue the Assumed PanAmSat
Minority Share Consideration (as defined below) and (B) the conclusive
presumption that the acquisition of the Assumed PanAmSat Minority Share
Consideration would be treated as part of a Section 355(e) Plan that
includes the Spin-Off; and
(iii) shall be based on the assumptions that, immediately after the
Merger Effective Time: (A) Xxxxxx Class C Common Stock has a fair market
value per share equal to the Recapitalization Price; (B) Xxxxxx Class A
Common Stock has a fair market value per share equal to the
Recapitalization Price, unless the Recapitalization Price is less than the
product of (1) the Average Price (as defined below) of a share of EchoStar
Class A Common Stock and (2) the Class A Exchange Ratio, in which case the
Xxxxxx Class A Common Stock shall have a fair market value per share equal
to such product; (C) Xxxxxx Class B Common Stock has a fair market value
per share determined on the basis of the advice of an investment banking
firm selected by GM and reasonably satisfactory to EchoStar; and (D) Xxxxxx
Preference Stock has a fair market value equal to the product of (1) the
number of shares of Xxxxxx Common Stock into
47
which such Xxxxxx Preference Stock would convert pursuant to the mandatory
conversion provision thereof if the Current Market Price (as defined in the
Certificate of Designation of the GM Series H Preference Stock) were equal
to the Recapitalization Price and (2) the Recapitalization Price.
For purposes of this Section 6.1(h):
(v) "Assumed PanAmSat Minority Share Consideration" shall mean
(1) that number of shares of Xxxxxx Class C Common Stock that the
parties hereto estimate reasonably could be expected to be issued in
consideration for the securities of PanAmSat that are issued and
outstanding as of the Spin-Off Effective Time and not owned by the
Surviving Corporation or an affiliate thereof, or (2) if the parties
cannot so agree to such an estimate, a number of shares of Xxxxxx
Class C Common Stock having an aggregate fair market value equal in
amount to 105% of the aggregate fair market value of the PanAmSat
common stock, and other securities of PanAmSat (excluding employee
stock options) that reasonably could be expected to be acquired for
capital stock of the Surviving Corporation, in each case that are
issued and outstanding as of the Spin-Off Effective Time and not owned
by the Surviving Corporation or an affiliate thereof, which (A) in the
case of the outstanding shares of common stock of PanAmSat shall be
equal to the product of the Average Price of a share of such PanAmSat
common stock and the number of shares of PanAmSat common stock issued
and outstanding as of the date of the Spin-Off Effective Time and not
owned by the Surviving Corporation or an affiliate thereof and (B) in
the case of any other securities of PanAmSat shall be determined on
the basis of the advice of an investment banking firm selected by GM
and reasonably satisfactory to EchoStar.
(w) "Average Price" of a share of capital stock of an issuer
shall mean the average (rounded to the nearest 1/10,000, or if there
shall not be a nearest 1/10,000, to the next highest 1/10,000) of the
Volume Weighted Average Trading Prices (as defined below) of such
share of capital stock of such issuer for each of the five (5)
consecutive trading days (or, if less, the number of trading days
following the Regulatory Approval Date (as defined in the Separation
Agreement) and before the Spin-Off Effective Time (as defined in the
Implementation Agreement)) ending on and including the trading day
immediately prior to the date of the Spin-Off Effective Time.
(x) "Minimum Amount" shall be equal to the excess of (x)
$1,000,000,000 (One Billion Dollars) over (y) the fair market value of
the capital stock of Xxxxxx into which the Interim EchoStar Stock
would convert at the Merger Effective Time; provided, however, that
the Minimum Amount shall not be less than $250,000,000 (Two Hundred
Fifty Million Dollars).
(y) "Interim EchoStar Stock" shall mean (1) capital stock of
EchoStar issued on or after the date hereof and prior to the Merger
Effective Time and (2) capital stock of EchoStar that would be issued
upon the exercise, conversion or exchange of options or rights to
acquire, or securities that are convertible into or exchangeable for,
capital stock of EchoStar or any successor entity thereto (whether or
not such options or rights or conversion or exchange
48
features are then exercisable or are contingent on the occurrence or
non-occurrence of a future event), to the extent that (A) such
options, rights or securities are issued on or after the date hereof
and prior to the Merger Effective Time and (B) the acquisition of
capital stock thereunder would be presumed under Section 6.2(g) of the
Implementation Agreement to be part of a Section 355(e) Plan or
otherwise reasonably would be expected to be treated as part of a
Section 355(e) Plan with the Spin-Off.
(z) "Volume Weighted Average Trading Price" means, with respect
to a share of capital stock of an issuer on any trading day (defined
as 9:30 a.m. through 4:30 p.m., Eastern Time), the weighted average of
the reported per share prices at which transactions in such share of
stock of such issuer are executed on the Nasdaq Stock Market during
such trading day (weighted based on the number of such shares traded
of such issuer, as such weighted average price appears on the
Bloomberg screen "Volume at Price" page for such shares of capital
stock of such issuer).
Section 6.2. Conditions to Obligations of Xxxxxx. The obligations of
Xxxxxx to consummate the Merger and the other transactions contemplated hereby
shall be subject to the fulfillment of the following conditions unless waived by
Xxxxxx:
(a) The representations and warranties of EchoStar set forth in
Article 3 herein shall be true and correct as of the date of this Agreement and
at and as of the Closing Date as though made on and as of the Closing Date
(except for representations and warranties made as of a specified date, which
need be true and correct only as of the specified date), except to the extent
that all of the breaches of such representations and warranties collectively
(without giving effect to any materiality or similar qualification) could not
reasonably be expected to result in a, and have not resulted in a continuing,
Combined Companies Material Adverse Effect; provided, however, that any and all
actions taken by EchoStar pursuant to Section 5.1(b) and the effects thereof on
the representations and warranties of EchoStar set forth in Article 3 shall be
ignored for purposes of this Section 6.2(a).
(b) EchoStar shall have performed in all material respects all of
its obligations hereunder to be performed by it at or prior to the Merger
Effective Time.
(c) EchoStar shall have furnished Xxxxxx with a certificate dated
the Closing Date signed on its behalf by its Chairman, President or any Vice
President to the effect that the conditions set forth in Sections 6.2(a) and (b)
have been satisfied.
(d) EchoStar shall have taken one of the actions contemplated by the
first sentence of Section 5.2(e) hereof or the Plan shall have been implemented
as contemplated thereby.
(e) Xxxxxx shall have received the Tax Opinion of Weil, Gotshal &
Xxxxxx LLP, counsel to Xxxxxx, substantially in the form attached hereto as
Exhibit C, on the basis of facts, representations and assumptions stated therein
as of the Merger Effective Time, to the effect that the Merger constitutes a
reorganization within the meaning of Section 368(a) of the Code, it being
understood that in rendering the Tax Opinion, such tax counsel shall be entitled
to rely upon, among other things, representations of officers of EchoStar and
Xxxxxx and of the
49
EchoStar Controlling Stockholder substantially in the form of Exhibits D, E and
F attached hereto and assumptions deemed necessary by such tax counsel.
Section 6.3. Conditions to Obligations of EchoStar. The obligation
of EchoStar to consummate the Merger and the transactions contemplated hereby
shall be subject to the fulfillment of the following conditions unless waived by
EchoStar:
(a) The representations and warranties of Xxxxxx set forth in
Article 4 herein shall be true and correct as of the date hereof and at and as
of the Closing Date as though made on and as of the Closing Date (except for
representations and warranties made as of a specified date, which need be true
and correct only as of the specified date), except to the extent that all of the
breaches of such representations and warranties collectively (without giving
effect to any materiality or similar qualification) could not reasonably be
expected to result in a, and have not resulted in a continuing, Combined
Companies Material Adverse Effect; provided, however, that any and all actions
taken by Xxxxxx pursuant to Section 5.1(b), and the effects thereof on the
representations and warranties of Xxxxxx set forth in Article 4 shall be ignored
for purposes of this Section 6.3(a).
(b) Xxxxxx shall have performed in all material respects all of its
obligations hereunder to be performed by it at or prior to the Merger Effective
Time.
(c) Xxxxxx shall have furnished EchoStar with a certificate dated
the Closing Date signed on behalf of it by the Chairman, President or any Vice
President to the effect that the conditions set forth in Sections 6.3(a) and (b)
have been satisfied.
(d) EchoStar shall have received the Tax Opinion of Xxxxxxxx &
Xxxxxxxx, special counsel to EchoStar, substantially in the form attached hereto
as Exhibit B, on the basis of facts, representations and assumptions stated
therein as of the Merger Effective Time, to the effect that the Merger
constitutes a reorganization within the meaning of Section 368(a) of the Code,
it being understood that in rendering the Tax Opinion, such tax counsel shall be
entitled to rely upon, among other things, representations of officers of
EchoStar and Xxxxxx and of the EchoStar Controlling Stockholder substantially in
the form of Exhibits D, E and F attached hereto and assumptions deemed necessary
by such tax counsel.
(e) The representations and warranties of GM set forth in Article 2
of the Implementation Agreement shall be true and correct as of the date hereof
and at and as of the closing date as though made on and as of the closing date
(except for representations and warranties made as of a specified date, which
need to be true and correct only as of the specified date), except to the extent
that all of the breaches of such representations and warranties collectively
(without giving effect to any materiality or similar qualification) could not
reasonably be expected to result in a, or have not resulted in a continuing,
Combined Companies Material Adverse Effect or a material adverse effect on
EchoStar's or Xxxxxx' ability to consummate the transactions contemplated by the
EchoStar Transaction Agreements or the Xxxxxx Transaction Agreements;
(f) GM shall have performed in all material respects all of its
obligations under the Implementation Agreement to be performed by it at or prior
to the Spin-Off Effective Time (as defined in the Implementation Agreement).
50
(g) GM shall have furnished EchoStar with a certificate dated the
closing date signed on its behalf by its Chairman, President or any Vice
President to the effect that the conditions set forth in Sections 6.3(e) and (f)
have been satisfied.
ARTICLE 7
TERMINATION AND AMENDMENT
Section 7.1. Termination. This Agreement may be terminated at any
time prior to the Merger Effective Time by written notice delivered by the
terminating party to the other parties:
(a) by mutual written consent duly authorized by the respective
Boards of Directors of Xxxxxx and EchoStar;
(b) by either Xxxxxx or EchoStar if:
(i) (A) any permanent injunction or other order of a court of
competent jurisdiction or other competent Governmental Authority preventing
the consummation of the Merger, (1) in an action brought by a federal,
state or local Governmental Authority under the Antitrust Laws of the
United States or FCC Regulations, shall have become final and
nonappealable, (2) in an action brought by a foreign Governmental Authority
under Antitrust Laws, shall have become final and nonappealable or (3) in
an action brought by any other Person (other than a Governmental Authority)
under the Antitrust Laws or FCC Regulations, shall have become final and
nonappealable; or (B) any permanent injunction or other order of a court of
competent jurisdiction or other competent Governmental Authority preventing
the consummation of the Merger, other than in an action brought under the
Antitrust Laws or FCC Rules, shall have become final and nonappealable;
(ii) the Merger shall not have been consummated before January
21, 2003 (the "Outside Date"), provided that (A) if all conditions to
Closing set forth in Article 6 have been satisfied or waived on or prior to
such date (other than those contained in Sections 6.1(b) and 6.1(c) and any
of such conditions that by their nature are to be fulfilled at the Closing)
and the Department of Justice or Federal Trade Commission has, prior to the
Outside Date, agreed with EchoStar and Xxxxxx to enter into to a consent
decree or other settlement permitting the consummation of the Merger, then
the Outside Date shall be extended to the Second Business Day immediately
following the date such consent decree or other settlement is filed in
court (but in no event later than five (5) Business Days following the
Outside Date), at which time, the parties shall consummate the Merger in
accordance with Section 1.2; or (B) such period shall be extended by the
Boards of Directors of both Xxxxxx and EchoStar (provided that the right to
terminate this Agreement under any provision of this Section 7.1(b)(ii)
shall not be available to any party whose failure (or whose affiliate's
failure, which in the case of Xxxxxx shall include GM) to perform any
material covenant or obligation under this Agreement or the other
Transaction Agreements has been the cause of or resulted in the failure of
the Merger to occur on or before such date); or
(iii) provided that there shall have occurred either a duly held
meeting of the GM common stockholders (including any adjournment or
postponement
51
thereof) at which a vote was taken or a solicitation of the written consent
of the GM common stockholders in accordance with the DGCL, the GM
Transactions fail to receive the Requisite Stockholder Approval either by
reason of a negative vote of the GM common stockholders or by reason of a
Consent Solicitation Failure. For the purposes of this Agreement, a
"Consent Solicitation Failure" means the failure to receive the Requisite
Stockholder Vote because written consents signed by a sufficient number of
holders within sixty (60) days of the earliest dated consent delivered in
the manner required by Section 228 of the DGCL were not obtained; unless
such failure to receive such written consents shall have resulted from GM's
abandonment of the consent solicitation, provided that GM shall have
delivered to EchoStar a Confirmation concurrently with such abandonment
and, provided, further, that the right of termination provided under this
clause (iii) shall be reinstated if GM shall fail to recommence the consent
solicitation as promptly as practicable after such abandonment and
provided, further, that only one such abandonment of the consent
solicitation (other than an abandonment by reason of an injunction granted
by a Governmental Authority having competent jurisdiction) shall be
permitted hereunder without giving rise to the right of termination.
(c) by Xxxxxx if:
(i) a breach by EchoStar of any representation or warranty
contained in Article 3 hereof has occurred, which breach, in the aggregate
with all other such breaches, if any, would give rise to a failure of a
condition set forth in Section 6.2(a) and cannot be cured by the Outside
Date);
(ii) a breach by EchoStar of any of the covenants or agreements
contained herein has occurred, which breach, in the aggregate with all
other such breaches, if any, would give rise to a failure of a condition
set forth in Section 6.2(b) and cannot be cured by the Outside Date;
(iii) a EchoStar Material Adverse Effect which also would be, or
would reasonably be expected to be, a Combined Companies Material Adverse
Effect, shall have occurred and be continuing at the time of termination,
and cannot be cured by the Outside Date; provided, however, that any and
all actions taken by EchoStar pursuant to Section 5.1(b) and the effects
thereof on the representations and warranties of EchoStar in Article 3
shall be ignored for the purposes of this Section 7.1(c)(iii);
(iv) (A) Unless the Department of Justice or the Federal Trade
Commission shall have agreed to a consent decree or other settlement
approving of the Merger prior to the fifteenth Business Day before the
Outside Date, the waiting period applicable to the consummation of the
Merger under the HSR Act shall not have expired or been terminated on or
prior to the date which is fifteen (15) Business Days before the Outside
Date, provided, that if the DOJ or the FTC shall have agreed to a consent
decree or other settlement permitting consummation of the Merger prior to
the fifteenth Business Day before the Outside Date, Xxxxxx shall not be
entitled to terminate this Agreement pursuant to this Section 7.1(c)(iv)
(A) unless the waiting period applicable to the consummation of the Merger
under the HSR Act shall not have expired or been terminated on or prior to
the date which is five (5) Business Days before the Outside Date (such
period of time between the fifteenth Business Day and the fifth Business
Day before the Outside Date, the ("Non-Termination Period"); provided,
further, that
52
EchoStar shall not be entitled to terminate the Merger Agreement pursuant
to any term hereof during the Non-Termination Period if EchoStar did not
have such right to terminate this Agreement immediately prior to the first
day of the Non-Termination Period; or (B) all material orders and approvals
of the FCC required in connection with the consummation of the transactions
contemplated hereby shall have not been obtained and become final on or
prior to the date which is ten (10) business days before the Outside Date
such that the condition in Section 6.1(c) is incapable of being fulfilled
unless the DOJ or FTC shall have agreed to a consent decree or other
settlement permitting consummation of the Merger prior to the fifteenth
Business Day before the Outside Date, in which case all material orders and
approvals of the FCC required in connection with the consummation of the
transactions contemplated hereby shall have not been obtained and become
final on or prior to the date which is three (3) Business Days after the
date the consent decree or other settlement permitting consummation of the
Merger is filed in court;
(v) (A) a breach by EchoStar of any representation or warranty
contained in the Implementation Agreement shall have occurred, which breach
cannot be cured by the Outside Date, except to the extent that all of the
breaches of such representations and warranties collectively (without
giving effect to any materiality or similar qualification) could not
reasonably be expected to have a material adverse impact on EchoStar's or
Xxxxxx' ability to consummate the transactions contemplated by the GM
Transaction Agreements, the EchoStar Transaction Agreements or the Xxxxxx
Transaction Agreements or (B) a material breach by EchoStar of any of the
covenants or agreements contained in the Implementation Agreement has
occurred, which breach cannot be cured by the Outside Date;
(vi) GM (A) shall have been notified by the IRS that the Ruling
(as defined in the Implementation Agreement) has been withdrawn,
invalidated or modified in an adverse manner or (B)(1) shall have been
notified by the IRS, or shall have otherwise reasonably determined, on the
basis of an opinion of outside tax counsel, in accordance with Section
6.1(d) of the Separation Agreement, that there is a more than immaterial
possibility that the consummation of the Spin-Off will not be tax-free and
(2) provided that the matter is capable of being resolved by a ruling by
the IRS, GM and Xxxxxx shall have been informed by the IRS that the IRS
will not issue a Subsequent Ruling (as defined in the implementation
Agreement) confirming the Ruling;
(vii) (A) the Merger Financing Agreement shall not have been
entered into, or the definitive terms thereof agreed, by the necessary
parties thereto on or prior to the date which is one hundred eighty (180)
calendar days after the date of this Agreement.
(viii) GM shall have delivered to EchoStar a Notice of Non-
Recommendation (as defined in the Implementation Agreement) pursuant to
Section 1.2(b) of the Implementation Agreement and the right to terminate
in respect of such Notice of Non-Recommendation shall not have been
terminated pursuant to Section 1.2(c) or 1.2(e) of the Implementation
Agreement.
(ix) GM shall propose to enter into an agreement or arrangement
with respect to a Competing Transaction after having complied with the
provisions of
53
Section 5.1(j)(i)(II) of the Implementation Agreement and shall have paid
the Termination Fee owed pursuant to Section 7.2(b) hereof.
(d) by EchoStar if:
(i) GM shall have entered into any agreement or arrangement
(other than a confidentiality agreement) regarding, or the Board of
Directors of GM or any committee of the Board of Directors of GM shall
approve or recommend, any Competing Transaction;
(ii) a breach by Xxxxxx of any representation or warranty
contained in Article 4 hereof has occurred, which breach, in the aggregate
with all other such breaches, would give rise to a failure of a condition
set forth in Section 6.3(a) and cannot be cured by the Outside Date;
(iii) a breach by Xxxxxx of any of the covenants or agreements
contained herein has occurred, which breach, in the aggregate with all
other such breaches, would give rise to a failure of a condition set forth
in Section 6.3(b) and cannot be cured by the Outside Date;
(iv) a Xxxxxx Material Adverse Effect which also would be, or
would reasonably be expected to be, a Combined Companies Material Adverse
Effect, shall have occurred and be continuing at the time of termination
and cannot be cured by the Outside Date; provided, however, that any and
all actions taken pursuant to Section 5.1(b), and the effects thereof on
the representations and warranties of Xxxxxx in Article 4 shall be ignored
for the purposes of this Section 7.1(d)(iv); or
(v) (A) a breach by GM or Xxxxxx of any representation or
warranty contained in the Implementation Agreement shall have occurred,
which breach cannot be cured by the Outside Date; except to the extent that
all of the breaches of such representations and warranties collectively
could not reasonably be expected to have a material adverse impact on
Xxxxxx' or EchoStar's ability to consummate the transactions contemplated
by the GM Transaction Agreements, the Xxxxxx Transactions Agreements or the
EchoStar Transaction Agreements; or (B) a material breach by GM or Xxxxxx
of any of the covenants or agreements contained in the Implementation
Agreement has occurred, which breach cannot be cured by the Outside Date.
(vi) GM shall have delivered to EchoStar a Notice of Non-
Recommendation (as defined in the Implementation Agreement) pursuant to
Section 1.2(b) of the Implementation Agreement (including by reason of GM
having failed to provide a Confirmation (as defined in the Implementation
Agreement) to EchoStar within the applicable Confirmation Period (as
defined in the Implementation Agreement) pursuant to Section 1.2(d) of the
Implementation Agreement) and EchoStar's right to terminate in respect of
such Notice of Non-Recommendation shall not have been terminated pursuant
to Section 1.2(c) or, in the case of a Notice of Non-Recommendation
pursuant to Section 1.2(b) only, Section 1.2(e) of the Implementation
Agreement.
54
Section 7.2. Effect of Termination; Fees and Expenses upon
Termination.
(a) In the event of the termination of this Agreement pursuant to
Section 7.1, this Agreement, except for the provisions of Section 5.1(f), this
Section 7.2 and Sections 8.2 through 8.11, shall become void and have no effect,
without any liability on the part of any party or its directors, officers,
employees or stockholders. Notwithstanding the foregoing, nothing in this
Section 7.2 shall relieve or release any party to this Agreement of liability
for a breach of any provision of this Agreement or invalidate the provisions of
the Confidentiality Agreement.
(b) If this Agreement is terminated (A) (i) by EchoStar or Xxxxxx
pursuant to Section 7.1(b)(iii), (ii) at any time after the date of this
Agreement and before such termination a Competing Transaction shall have been
publicly disclosed and (iii) within fifteen months of such termination GM or any
of its Subsidiaries enters into a definitive agreement with respect to, or
consummates, such Competing Transaction, (B) (i) by EchoStar or Xxxxxx pursuant
to Section 7.1(b)(iii), (ii) at any time after the date hereof, a Competing
Transaction shall have been publicly disclosed which Competing Transaction has
not been withdrawn or abandoned at the time of such stockholder vote and (iii)
within fifteen months of such termination GM or any of its Subsidiaries enters
into a definitive agreement with respect to, or consummates, any Competing
Transaction, or (C) by Xxxxxx pursuant to Sections 7.1(c)(viii) or (c)(ix) or by
EchoStar pursuant to Sections 7.1(d)(i) or (vi), then, in each case, Xxxxxx
shall pay or cause to be paid to EchoStar, in cash by wire transfer in
immediately available funds to an account designated by EchoStar, (x) on the
same day as the execution of a definitive agreement with respect to the
referenced Competing Transaction, in the event this Agreement is terminated by
EchoStar or Xxxxxx as described in clauses (A) or (B) above, or (y) no later
than one business day following such termination, in the event this Agreement is
terminated by EchoStar as described in clause (C) above, and (z) concurrently
with such termination in the event this Agreement is terminated by Xxxxxx as
described in clause (C) above, a termination fee and expense reimbursement in an
aggregate amount equal to $600,000,000.00 (Six Hundred Million Dollars) (the
"Termination Fee"), which amount shall not be subject to offset on deduction of
any kind by Xxxxxx.
(c) If this Agreement is terminated by EchoStar pursuant to Section
7.1(b)(i)(A)(l) or by Xxxxxx pursuant to Section 7.1(b)(i)(A)(l) or Section
7.1(c)(iv), EchoStar shall pay or cause to be paid to Xxxxxx, in cash by wire
transfer in immediately available funds to an account designated by Xxxxxx, no
later than one business day following such termination, if terminated by Xxxxxx,
or concurrently with such termination, if terminated by EchoStar, a termination
fee and expense reimbursement in an amount equal to $600,000,000.00 (Six Hundred
Million Dollars), which amount shall not be subject to offset or deduction of
any kind by EchoStar; provided, that the payment of one-half of the Termination
Fee shall not be required concurrently with such termination (and the parties
may elect to resolve such dispute in accordance with Section 8.9) if Xxxxxx'
failure (or the failure of any of its Affiliates) to comply with Section 5.1(b)
has been the cause of or resulted in the occurrence or non-occurrence which
permitted termination under Section 7.1(b)(i)(A)(l) or 7.1(c)(iv).
Notwithstanding anything to the contrary in this Section 7.2(c), if the parties
have available to them, and EchoStar is willing to accept, a settlement, consent
decree, stipulation or other agreement or resolution (each a "Settlement") with
the Department of Justice, the Federal Trade Commission or any other
Governmental Authority, but Xxxxxx terminates this Agreement pursuant to Section
7.1(b)(i)(A)(1) or Section 7.1(c)(iv) hereof then EchoStar shall not be required
to pay Xxxxxx the termination fee described in this Section 7.2(c).
55
(d) The parties hereto agree that the provisions contained in this
Section 7.2 are an integral part of the transactions contemplated by this
Agreement, that the damages resulting from the termination of this Agreement as
set forth in Sections 7.2(b) and (c) of this Agreement are uncertain and
incapable of accurate calculation and that the amounts payable pursuant to
Sections 7.2(b) and (c) hereof are reasonable forecasts of the actual damages
which may be incurred by the parties under such circumstances. The amounts
payable pursuant to Sections 7.2(b) and (c) hereof constitute liquidated damages
and not a penalty and shall be the sole monetary remedy in the event of
termination of this Agreement on the bases specified in such Sections. If either
party fails to pay to the other party any amounts due under Sections 7.2(b) and
(c), as applicable, in accordance with the terms hereof, the breaching party
shall pay the costs and expenses (including legal fees and expenses) of the
other party in connection with any action, including the filing of any lawsuit
or other legal action, taken to collect payment.
(e) Any amounts not paid when due pursuant to this Section 7.2 shall
bear interest from the date such payment is due until the date paid at a rate
equal to LIBO plus three percent. For purposes of this Agreement, LIBO shall
mean the current LIBO rate as quoted by Citibank, N.A., adjusted for reserve
requirements, if any, and subject to customary change of circumstance
provisions, for interest periods of six months.
Section 7.3. 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 which by law requires approval
or authorization by the stockholders of Xxxxxx or EchoStar, without such
approval or authorization. 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 7.4. Extension; Waiver. At any time prior to the Merger
Effective Time, Xxxxxx (with respect to EchoStar) and EchoStar (with respect to
Xxxxxx) by action taken or authorized by their respective Boards of Directors,
may, to the extent legally allowed, (a) extend the time for the performance of
any of the obligations or other acts of such other party, (b) waive any
inaccuracies in the representations and warranties of the other party contained
herein or in any document delivered pursuant hereto and (c) waive or extend the
time for compliance by such other party with any of the agreements or conditions
contained herein. Any agreement on the part of a party hereto to any such
extension or waiver shall be valid only if set forth in a written instrument
signed on behalf of such party.
ARTICLE 8
MISCELLANEOUS
Section 8.1. No Survival of Representations and Warranties. The
parties hereto hereby agree that the representations and warranties of Xxxxxx
and EchoStar contained in this Agreement or in any certificate, document or
instrument delivered in connection herewith (other than the Implementation
Agreement), shall not survive the Merger Effective Time.
Section 8.2. 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):
56
(a) if to Xxxxxx Electronics Corporation
000 Xxxxx Xxxxxxxxx Xxxxxxxxx
Xx Xxxxxxx, XX 00000
Attention: General Counsel
Telecopy No.: (000) 000-0000
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
Xxxxxxxx & Xxxxx
000 Xxxx Xxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Attention: R. Xxxxx Xxxx and
Xxxxxx X. Xxxxxxxx
Telecopy No.: (000) 000-0000
(b) if to EchoStar Communications Corporation
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, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxx and Xxxx X. X'Xxxxx
Telecopy No.: (000) 000-0000
Section 8.3. Interpretation; Absence of Presumption.
(a) For the purposes of this Agreement, (i) words in the singular
shall be held to include the plural and vice versa and words of one gender shall
be held to include the other gender as the context requires, (ii) the terms
"hereof", "herein", and "herewith" and words of similar import shall, unless
otherwise stated, be construed to refer to this Agreement as a whole (including
all of the Schedules and Exhibits hereto) and not to any particular provision of
this Agreement, and Article, Section, paragraph, Exhibit and Schedule references
are to the Articles, Sections, paragraphs, Exhibits and Schedules to this
Agreement unless otherwise specified, (iii) the word "including" and words of
similar import when used in this Agreement shall mean "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,
57
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) all
references to the word "shares" shall be deemed also to refer to fractions of
shares, as the context requires, (viii) "Dollars" or "$" means United States
Dollars, (ix) "cash" means Dollars in immediately available funds and (x) 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 8.4. Knowledge. For purposes of this Agreement, the knowledge
of (a) EchoStar and its Subsidiaries shall mean the knowledge, after due
inquiry, of the senior officers of EchoStar and its Subsidiaries and (b) Xxxxxx
shall mean the knowledge, after due inquiry, of the senior officers of Xxxxxx
and its Subsidiaries.
Section 8.5. 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 8.6. 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 economic or legal substance of the
transactions contemplated hereby is not affected in any manner adverse to any
party. Upon such determination, the parties shall negotiate in good faith in an
effort to agree upon such a suitable and equitable provision to effect the
original intent of the parties.
Section 8.7. Third Party Beneficiaries. Except as set forth in Section
5.3(f) hereto, 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.
58
Section 8.8. Governing Law. Except to the extent the provisions of the
NRS govern the Merger, this Agreement shall be governed and construed in
accordance with the laws of the State of Delaware without regard to principles
of conflicts of law. Each of the parties hereto agrees that this Agreement has
been entered into by the parties in express reliance upon 6 Del. C. Sec. 2708.
Section 8.9. Jurisdiction. Any suit, action or proceeding seeking to
enforce an provision of, or based on any matter arising out of or in connection
with, this Agreement or the transactions contemplated by this Agreement may be
brought against any of the parties in any Federal court located in the State of
Delaware, or any Delaware state court. Each party irrevocably and
unconditionally agrees (a) to be subject to the jurisdiction of the courts of
the State of Delaware and of the federal courts sitting in the State of
Delaware, and (b) (1) to the extent such party is not otherwise subject to
service of process in the State of Delaware, to appoint and maintain an agent in
the State of Delaware as such party's agent for service of legal process and (2)
that service of process may also be made on such party by prepaid certified mail
with a proof of mailing receipt validated by the United States Postal Service
constituting evidence of valid service, and that service made pursuant to (b)
(1) or (2) above shall have the same legal force and effect as if served upon
such party personally within the State of Delaware. For purposes of implementing
the parties' agreement to appoint and maintain an agent for service of process
in the State of Delaware, each such party does appoint [name] [address], as such
agent. Without limiting the generality of the foregoing, each party hereto
agrees that service of process upon such party at the address referred to in
Section 8.2, together with written notice of such service to such party, shall
be deemed effective service of process upon such party.
Section 8.10. Specific Performance. Except under such circumstances as
cause a termination fee to be payable pursuant to Section 7.2 by any of the
parties hereto based on such breach or threatened breach, 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 8.11. Assignment. Neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by any of the
parties hereto (whether by operation of law or otherwise) without the prior
written consent of the other party; provided, however, that, in connection with
the Financings, either party may assign all or any part of its rights under this
Agreement to any Person required by such party's financing sources in order to
secure such party's obligations to such financing sources. 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.
* * * * * *
59
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
set forth above.
ECHOSTAR COMMUNICATIONS CORPORATION
By: /s/ Xxxxx X. Xxxxxxxxx
--------------------------------
Name: Xxxxx X. Xxxxxxxxx
------------------------------
Title: Senior Vice President, General
Counsel and Secretary
-----------------------------
XXXXXX ELECTRONICS CORPORATION
By: /s/ Xxxxx X. Xxxxxx
--------------------------------
Name: Xxxxx X. Xxxxxx
------------------------------
Title: Vice President
-----------------------------
