EXHIBIT 2.1
MERGER AGREEMENT
Among
INTELSAT (BERMUDA), LTD.,
PROTON ACQUISITION CORPORATION, and
PANAMSAT HOLDING CORPORATION,
Dated as of August 28, 2005
TABLE OF CONTENTS
ARTICLE I
The Merger...................................................................1
1.1. The Merger.............................................................1
1.2. Closing Date...........................................................1
1.3. Effective Time.........................................................2
1.4. Certificate of Incorporation...........................................2
1.5. Bylaws.................................................................2
1.6. Directors and Officers.................................................2
1.7. Conversion of Securities...............................................2
1.8. Surrender of Certificates..............................................3
1.9. No Further Ownership Rights in Company Common Stock....................4
1.10. Lost, Stolen or Destroyed Certificates.................................5
1.11. Dissenting Shares......................................................5
1.12. Withdrawal.............................................................5
1.13. Notice of Dissenters...................................................5
1.14. Withholding Taxes......................................................5
1.15. Transfer of Ownership..................................................6
1.16. Further Action.........................................................6
1.17. Company Equity Awards..................................................6
ARTICLE II
Representations and Warranties of the Company................................7
2.1. Organization; Subsidiaries; Charter Documents..........................7
2.2. Capitalization of the Company..........................................8
2.3. Corporate Authorization; Board Approval...............................10
2.4. Governmental Approvals................................................10
2.5. Non-Contravention.....................................................11
2.6. Company SEC Documents.................................................11
2.7. Financial Statements; No Undisclosed Liabilities;
Internal and Disclosure Controls......................................12
2.8. Information in Offer Documents........................................13
2.9. Absence of Certain Changes............................................13
2.10. Insurance.............................................................14
2.11. Real Property; Title to Assets........................................14
2.12. Company Intellectual Property.........................................15
2.13. Litigation............................................................15
2.14. Taxes.................................................................16
2.15. Employee Benefit Plans; ERISA.........................................17
2.16. Compliance with Laws; Permits.........................................19
2.17. Company Satellites....................................................19
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2.18. Environmental Matters.................................................20
2.19. Company Material Contracts............................................20
2.20. Finders' Fees.........................................................21
2.21. Opinion of Financial Advisor..........................................21
2.22. Takeover Statutes.....................................................21
2.23. Transactions with Affiliates..........................................21
2.24. Labor Matters.........................................................21
2.25. Limitation on Warranties..............................................21
ARTICLE III
Representations and Warranties of Parent and Merger Sub.....................22
3.1. Organization and Power; Subsidiaries..................................22
3.2. Corporate Authorization...............................................22
3.3. Governmental Authorization............................................22
3.4. Non-Contravention.....................................................23
3.5. Information Supplied..................................................23
3.6. Litigation............................................................23
3.7. Financing.............................................................24
3.8. Condition of the Business; Independent Investigation..................24
3.9. Qualifications to Hold Communications Licenses........................25
ARTICLE IV
Covenants...................................................................25
4.1. Conduct of the Company................................................25
4.2. Conduct of Parent.....................................................29
4.3. Debt Offer Documents, Proxy Statement; SEC Documents;
Company Financial Statements..........................................30
4.4. Company Stockholders' Meeting.........................................31
4.5. Confidentiality; Access to Information................................32
4.6. No Solicitation.......................................................33
4.7. Commercially Reasonable Efforts.......................................36
4.8. Regulatory Matters....................................................36
4.9. Approach to Proceedings...............................................38
4.10. Public Announcements..................................................39
4.11. Director and Officer Liability........................................39
4.12. Employee Benefits.....................................................40
4.13. Cooperation with Financing and Debt Registrations.....................42
4.14. Merger Sub............................................................43
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ARTICLE V
Conditions to the Merger....................................................43
5.1. Conditions to the Obligations of the Parties..........................43
5.2. Conditions to the Obligations of the Company..........................44
5.3. Conditions to the Obligations of Parent and Merger Sub................44
ARTICLE VI
Termination.................................................................46
6.1. Termination...........................................................46
6.2. Notice of Termination; Effect of Termination..........................48
6.3. Expenses; Termination Fees............................................49
ARTICLE VII
Miscellaneous...............................................................50
7.1. Certain Definitions...................................................51
7.2. Notices...............................................................58
7.3. Entire Agreement; Third Party Beneficiaries...........................59
7.4. Non-Survival of Representations and Warranties........................59
7.5. Amendments; No Waivers................................................60
7.6. Successors and Assigns................................................60
7.7. Governing Law.........................................................60
7.8. Exclusive Jurisdiction................................................60
7.9. Counterparts; Effectiveness...........................................60
7.10. Interpretation........................................................60
7.11. Disclosure Schedules..................................................61
7.12. Severability..........................................................61
7.13. Specific Performance..................................................61
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MERGER AGREEMENT
MERGER AGREEMENT (this "AGREEMENT"), dated as of August 28, 2005,
among PanAmSat Holding Corporation, a Delaware corporation (the "COMPANY"),
Intelsat (Bermuda), Ltd., a Bermuda company ("PARENT"), and Proton Acquisition
Corporation, a Delaware corporation and a wholly-owned subsidiary of Parent
("MERGER SUB").
Recitals
WHEREAS, Constellation, LLC, Carlyle Panamsat I, LLC, Carlyle Panamsat
II, LLC, PEP PAS, L.L.C., PEOP PAS, L.L.C. (collectively, the "STOCKHOLDERS")
beneficially own an aggregate of 71,315,359 shares of Company Common Stock,
which constitute approximately 58% of the outstanding capital stock of the
Company as of the date hereof;
WHEREAS, the respective Board of Directors of Parent, Merger Sub and
the Company have approved, and deem it advisable to consummate, the merger of
Merger Sub with and into the Company, with the Company surviving as the
Surviving Corporation, on the terms and conditions set forth herein;
WHEREAS, as a condition and an inducement to the willingness of
Parent and Merger Sub to enter into this Agreement, the Stockholders have
concurrently herewith entered into that certain Voting Agreement with Parent in
substantially the form attached hereto as Exhibit A; and
WHEREAS, Parent, Merger Sub and the Company desire to make certain
representations, warranties, covenants and agreements in connection with the
Merger (as hereinafter defined).
NOW, THEREFORE, in consideration of the premises and the respective
representations, warranties, covenants and agreements set forth herein, and,
intending to be legally bound hereby, the parties hereto agree as follows:
ARTICLE I
The Merger
1.1. THE MERGER. Upon the terms and subject to the conditions set
forth in this Agreement, at the Effective Time, Merger Sub shall be merged (the
"MERGER") with and into the Company in accordance with the General Corporation
Law of the State of Delaware, as amended (the "DGCL"), whereupon the separate
existence of Merger Sub shall cease, and the Company shall continue as the
surviving corporation (the "SURVIVING CORPORATION").
1.2. CLOSING DATE. Upon the terms and subject to the conditions set
forth in this Agreement, the closing of the Merger (the "CLOSING") shall take
place at 10:00 a.m. on a date (the "CLOSING DATE"), which shall be the date
after satisfaction or waiver of the conditions set forth in Article V other than
those conditions that by their nature are to be satisfied by actions taken at
the Closing, but subject to the fulfillment or waiver of those conditions, that
is the earlier of (a) a date during the Marketing Period to be specified by
Parent on no less than three Business
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Days' notice to the Company and (b) the final day of the Marketing Period, at
the offices of Wachtell, Lipton, Xxxxx & Xxxx, 00 Xxxx 00xx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000, or at such other time, date or place as agreed to in writing by
the parties hereto.
1.3. EFFECTIVE TIME. Upon the Closing, the Company and Merger Sub will
file a certificate of merger (the "CERTIFICATE OF MERGER") with the Secretary of
State of the State of Delaware as executed in accordance with the relevant
provisions of the DGCL. The Merger shall become effective at such time as the
Certificate of Merger is duly filed with the Secretary of State of the State of
Delaware or at such later time as is agreed by Parent and the Company and
specified in the Certificate of Merger (the "EFFECTIVE TIME"). The Merger shall
have the effects set forth in the DGCL. Without limiting the generality of the
foregoing, and subject thereto, at the Effective Time, all the properties,
rights, privileges, powers and franchises of the Company and Merger Sub shall
vest in the Surviving Corporation, and all debts, liabilities and duties of the
Company and Merger Sub shall become the debts, liabilities and duties of the
Surviving Corporation.
1.4. CERTIFICATE OF INCORPORATION. The certificate of incorporation of
the Company as in effect immediately prior to the Effective Time shall be
amended to read in its entirety in the same fashion as the certificate of
incorporation of Merger Sub, other than the incorporator of Merger Sub, the
exculpation and indemnification provisions (which shall remain unchanged), and
corporate name (which shall remain PanAmSat Holding Corporation), and, as so
amended, shall be the certificate of incorporation of the Surviving Corporation.
1.5. BYLAWS. The bylaws of the Company in effect at the Effective Time
shall be amended to read in their entirety in the same fashion as the bylaws of
Merger Sub, other than references to the corporate name of the Company (which
shall remain PanAmSat Holding Corporation), and, as so amended shall be the
bylaws of the Surviving Corporation until amended in accordance with applicable
law.
1.6. DIRECTORS AND OFFICERS. From and after the Effective Time, until
successors are duly elected or appointed and qualified in accordance with the
DGCL and the certificate of incorporation and bylaws of the Surviving
Corporation, (a) the directors of Merger Sub at the Effective Time shall be the
directors of the Surviving Corporation, and (b) the officers of the Company at
the Effective Time shall be the officers of the Surviving Corporation.
1.7. CONVERSION OF SECURITIES. Subject to the terms and conditions of
this Agreement, at the Effective Time, by virtue of the Merger and without any
action on the part of Parent, Merger Sub, the Company or the holders of any
securities of Merger Sub or the Company:
(a) MERGER CONSIDERATION. Each share of common stock, par value $0.01
per share, of the Company ("COMPANY COMMON STOCK") issued and outstanding
immediately prior to the Effective Time (other than shares of Company Common
Stock to be cancelled in accordance with Section 1.7(c), the Dissenting Shares,
and the shares of Company Common Stock beneficially owned by Parent or any
direct or indirect wholly owned Subsidiary of the Company, which shall remain
outstanding except that the number of such shares owned by Parent or such
Subsidiaries shall be adjusted in the Merger to maintain relative ownership
percentages) shall
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automatically be converted into the right to receive $25.00 per share plus the
amount, if any, of the Pro Rata Dividend, in cash without interest (the "MERGER
CONSIDERATION"), payable to the holder of such shares of Company Common Stock,
upon surrender, in the manner provided in Section 1.8, of the certificate that
formerly evidenced such share of Company Common Stock. All such shares of
Company Common Stock, when so converted, shall no longer be outstanding and
shall automatically be cancelled and retired and shall cease to exist, and each
holder of a certificate representing any such shares of Company Common Stock
shall cease to have any rights with respect thereto, except the right to receive
the Merger Consideration therefor, without interest, upon the surrender of such
certificate in accordance with Section 1.8.
(b) MERGER SUB. Each issued and outstanding share of common stock, par
value $0.01 per share, of Merger Sub shall be converted into one validly issued
and fully paid share, par value $0.01 per share, of the Surviving Corporation.
(c) Cancellation. Each share of Company Common Stock owned by the
Company immediately prior to the Effective Time shall be cancelled and
extinguished without any conversion thereof and no payment or other
consideration shall be made with respect thereto.
1.8. SURRENDER OF CERTIFICATES.
(a) EXCHANGE AGENT. Prior to the Effective Time, Parent shall select a
bank or trust company reasonably acceptable to the Company to act as the
exchange agent (the "EXCHANGE AGENT") for the holders of shares of Company
Common Stock in connection with the Merger and shall enter into an agreement
with the Exchange Agent which is reasonably acceptable to the Company. Promptly
and in any event no later than simultaneously with the Closing, the Company
shall deposit, or cause to be deposited, the proceeds of the PanAmSat Debt
Financing (including the cash on hand contemplated thereby, less the amount of
any fees or expenses paid by the Company) with the Exchange Agent, for the
benefit of the holders of shares of Company Common Stock and Parent shall
deposit, or cause to be deposited, with the Exchange Agent, for the benefit of
the holders of shares of Company Common Stock, cash in an aggregate amount equal
to the excess of (A) the product of (i) the number of shares of Company Common
Stock issued and outstanding at the Effective Time (other than shares of Company
Common Stock to be cancelled in accordance with Section 1.7(c), the Dissenting
Shares and the shares of Company Common Stock beneficially owned by Parent, or
the Company or any of their respective wholly-owned direct or indirect
Subsidiaries) and (ii) the Merger Consideration over (B) the proceeds of the
PanAmSat Debt Financing (including such cash on hand, less the amount of any
fees or expenses paid by the Company). Any funds deposited with the Exchange
Agent shall hereinafter be referred to as the "EXCHANGE FUND."
(b) EXCHANGE PROCEDURES. Promptly after the Effective Time, the
Surviving Corporation shall cause the Exchange Agent to mail to each holder of
record as of the Effective Time of a certificate or certificates (the
"Certificates") which immediately prior to the Effective Time represented
outstanding shares of Company Common Stock and whose shares were converted
pursuant to Section 1.7(a) into the right to receive the Merger Consideration:
(i) a 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 to the Exchange Agent and shall be in such form and
have such other provisions not inconsistent with this Agreement as
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Parent and Surviving Corporation shall reasonably specify) and (ii) instructions
for use in effecting the surrender of the Certificates in exchange for the
Merger Consideration to which the holder of such Certificate is entitled
pursuant to Section 1.7(a) (without limiting the effect of Section 1.11). Upon
surrender of a Certificate for cancellation to the Exchange Agent and such other
documents as may be reasonably requested by the Exchange Agent, together with
such letter of transmittal duly completed and validly executed in accordance
with the instructions thereto, the holder of such Certificate shall be entitled
to receive promptly in exchange therefor the aggregate Merger Consideration
which such holder has the right to receive pursuant to Section 1.7(a) (after
taking into account all Certificates surrendered by such holder), and each
Certificate so surrendered shall forthwith be cancelled. Until so surrendered,
each Certificate will represent, from and after the Effective Time, only the
right to receive the Merger Consideration in cash as contemplated by this
Article I. No interest shall accrue or be paid on the amounts payable pursuant
to this Article I upon surrender of a Certificate.
(c) NO LIABILITY. Notwithstanding anything to the contrary in this
Section 1.8, neither the Exchange Agent, Parent, the Surviving Corporation nor
any party hereto shall be liable to any Person in respect of any Merger
Consideration for any amount properly delivered to a public official pursuant to
any applicable abandoned property, escheat or similar law.
(d) TERMINATION OF EXCHANGE AGENT. Any portion of the Exchange Fund
which remains undistributed to the holders of Certificates six (6) months after
the Effective Time shall, at the request of Parent, be delivered to Parent (or
an affiliate of Parent) or otherwise on the instruction of Parent, and any
holders of the Certificates who have not surrendered such Certificates in
compliance with this Section 1.8 shall after such delivery look only to Parent
(subject to abandoned property, escheat and similar laws) for payment, as
general creditors thereof, of their claim for the Merger Consideration, without
interest, to which such holders may be entitled pursuant to Section 1.7(a). Any
such portion of the Exchange Fund remaining unclaimed by holders of shares of
Company Common Stock immediately prior to such time as such amounts would
otherwise escheat to or become property of any Governmental Authority shall, to
the extent permitted by law, become the property of Parent free and clear of any
claims or interest of any Person previously entitled thereto.
1.9. NO FURTHER OWNERSHIP RIGHTS IN COMPANY COMMON STOCK. From and
after the Effective Time, the holders of Company Common Stock outstanding
immediately prior to the Effective Time whose shares of Company Common Stock
were converted into the right to receive Merger Consideration in the Merger
shall cease to have any rights with respect to such shares of Company Common
Stock except as otherwise provided herein or by applicable law. The Merger
Consideration paid in exchange for shares of Company Common Stock in accordance
with the terms hereof shall be deemed to have been paid in full satisfaction of
all rights pertaining to such shares of Company Common Stock previously
represented by such Certificates. As of the Effective Time, the stock transfer
books of the Company shall be closed with respect to those stockholders whose
shares of Company Common Stock were converted into the right to receive the
Merger Consideration in the Merger and there shall be no further registration of
transfers on the records of the Surviving Corporation of such shares of Company
Common Stock that were outstanding immediately prior to the Effective Time. If,
after the Effective Time, Certificates with respect to those stockholders whose
shares of Company Common Stock were converted into the right to receive Merger
Consideration in the Merger are
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presented to the Surviving Corporation or the Exchange Agent for any reason,
such Certificates shall be cancelled and exchanged as provided for in this
Article I.
1.10. LOST, STOLEN OR DESTROYED CERTIFICATES. In the event any
Certificates shall have been lost, stolen or destroyed, the Exchange Agent shall
deliver in exchange for such lost, stolen or destroyed Certificates, upon the
making of an affidavit of that fact by the holder thereof, the Merger
Consideration to which the holder thereof is entitled pursuant to this Article
I; provided, however, Parent or the Surviving Corporation may, as a condition
precedent to such delivery, require the owner of such lost, stolen or destroyed
Certificates to deliver a bond in such sum as they may reasonably direct as
indemnity against any claim that may be made against Parent, the Surviving
Corporation, the Company or the Exchange Agent with respect to the Certificates
alleged to have been lost, stolen or destroyed.
1.11. DISSENTING SHARES. Notwithstanding any provision of this
Agreement to the contrary, any issued and outstanding shares of Company Common
Stock held by a Person who has the right to and has demanded appraisal of such
shares in accordance with Section 262 of the DGCL ("DISSENTING HOLDER"), and as
of the Effective Time has not failed to perfect, effectively withdrawn or lost
his right to such appraisal ("DISSENTING SHARES"), shall not be converted into
or represent a right to receive the Merger Consideration pursuant to Section
1.7(a), but such Dissenting Holder thereof shall only be entitled to such rights
in respect thereof as are granted by Section 262 of the DGCL.
1.12. WITHDRAWAL. Notwithstanding the provision of Section 1.11, if
any Dissenting Holder shall effectively withdraw or lose (through failure to
perfect or otherwise) his right to appraisal, then as of the Effective Time or
the occurrence of such event, whichever occurs later, such shares shall
automatically be converted into and represent only the right to receive the
Merger Consideration, as provided in Section 1.7(a), without interest thereon,
upon surrender of the certificate or certificates representing such shares in
accordance with Section 1.7(a).
1.13. NOTICE OF DISSENTERS. The Company shall provide Parent (i)
prompt notice of any written demands for appraisal or payment of the fair value
of any shares of Company Common Stock, the withdrawals of such demands and any
other related instruments served pursuant to the DGCL and received by the
Company and (ii) the opportunity to participate in all negotiations and
proceedings with respect to demands for appraisal under the DGCL. Except with
the prior written consent of Parent and, until the Effective Time, the Company
shall not voluntarily make any payment with respect to any demands for appraisal
and shall not settle or offer to settle any such demands.
1.14. WITHHOLDING TAXES. Each of the Exchange Agent, the Company, the
Surviving Corporation and Parent shall be entitled to deduct and withhold from
the Merger Consideration pursuant to the Merger such amounts as the Exchange
Agent, the Company, the Surviving Corporation and Parent are required to deduct
and withhold with respect to the making of such payment under the Internal
Revenue Code of 1986, as amended (the "CODE"), or under any applicable provision
of state, local or foreign Law. To the extent that amounts are so withheld, such
amounts shall be treated for all purposes of this Agreement as having been paid
to
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the holder of the Company Common Stock, in respect of which such deduction and
withholding was made by the Exchange Agent, the Company, the Surviving
Corporation or Parent.
1.15. TRANSFER OF OWNERSHIP. If the Merger Consideration is to be paid
to a Person other than the Person in whose name the surrendered Certificate
formerly evidencing shares of Company Common Stock is registered, it will be a
condition of payment that the Certificate so surrendered will be properly
endorsed and otherwise in proper form for transfer and that the Persons
requesting such payment will have paid to the Surviving Corporation or any agent
designated by it any transfer or other Taxes required by reason of the payment
of the amount specified in Section 1.7(a) to a Person other than the registered
holder of the Certificates surrendered, or established to the satisfaction of
the Surviving Corporation or any agent designated by it that such Tax has been
paid or is not payable.
1.16. FURTHER ACTION. At and after the Effective Time, the officers
and directors of the Surviving Corporation will be authorized to execute and
deliver, in the name and on behalf of the Company and Merger Sub, any deeds,
bills of sale, assignments or assurances and to take and do, in the name and on
behalf of the Company and Merger Sub, any other actions and things to vest,
perfect or confirm of record or otherwise in the Surviving Corporation any and
all right, title and interest in, to and under any of the rights, properties or
assets acquired or to be acquired by the Surviving Corporation as a result of,
or in connection with, the Merger.
1.17. COMPANY EQUITY AWARDS.
(a) COMPANY OPTIONS. As soon as practicable following the date of this
Agreement, the Board of Directors of the Company (the "BOARD OF DIRECTORS") (or,
if appropriate, any committee administering the Company's Second Amended and
Restated 2004 Stock Option Plan for Key Employees (the "2004 OPTION PLAN"), and
Fourth Amended and Restated Long-Term Stock Incentive Plan (together with the
2004 Option Plan, the "COMPANY EQUITY PLANS")) shall adopt such resolutions or
take such other actions as are required to adjust the terms of each outstanding
option to purchase shares of Company Common Stock (each a "COMPANY OPTION")
under any Company Equity Plan or otherwise, to provide that, at the Effective
Time, each Company Option, including each Performance Option (as defined in the
Amended and Restated Stock Option Agreements issued under the 2004 Option Plan),
shall (i) if unvested, vest in full, and (ii) automatically be cancelled at the
Effective Time and converted into the right to receive as soon as reasonably
practicable following the Effective Time (but in no event later than three
Business Days after the Effective Time) a lump sum cash payment (less applicable
Taxes required to be withheld with respect to such payment) equal to the product
of (i) the number of shares subject to such Company Option and (ii) the excess,
if any, of (A) $25.00 less (B) the exercise price per share of such Company
Option.
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(b) Restricted Shares. Each share of Company Common Stock granted to
any director of the Company that is subject to vesting or other lapse
restrictions pursuant to any Company Equity Plan (collectively, "RESTRICTED
SHARES") and that is outstanding immediately prior to the Effective Time shall
vest and become free of such restrictions as of the Effective Time, and, at the
Effective Time, the holder thereof shall, subject to this Article I, be entitled
to receive the Merger Consideration with respect to each such Restricted Share.
(c) No Other Company Equity Awards. The Company shall take all actions
reasonably necessary to ensure that from and after the Effective Time the
Surviving Corporation will not be bound by any options, rights, units, awards or
arrangements which would entitle any Person, other than Parent or its
Subsidiaries, to beneficially own shares of the Surviving Corporation or receive
any payments (other than as set forth in this Section 1.17) in respect of such
options, rights, units, awards or arrangements.
(d) Prior to the Effective Time, the Company shall deliver appropriate
notices (which notices shall have been approved by Parent) to each holder of
Company Options setting forth each holder's rights pursuant to the respective
Company Equity Plans, stating that such Company Options shall be treated in the
manner set forth in this Section 1.17.
(e) Deferred Stock Units. As soon as practicable following the date of
this Agreement, the Board of Directors (or, if appropriate, any committee
administering the Deferred Compensation Plan (the "DEFERRAL PLAN"), and
Supplemental Savings Plan, (the "SERP")) shall adopt such resolutions or take
such other actions as are required to adjust the terms of each outstanding
deferred stock unit (each a "DSU") under the Deferral Plan and SERP, to provide
that, at the Effective Time, each vested DSU shall automatically be cancelled at
the Effective Time and converted into a lump sum in cash equal to the Merger
Consideration, subject to the terms and conditions set forth in the Deferral
Plan or the SERP, as applicable, including the terms and conditions with respect
to distributions thereunder.
ARTICLE II
Representations and Warranties of the Company.
The Company hereby represents and warrants to Parent and Merger Sub
as follows, except as specifically described on the schedule (subject to Section
7.11) delivered by the Company to Parent in connection with the execution and
delivery of this Agreement (the "COMPANY DISCLOSURE SCHEDULE"):
2.1. ORGANIZATION; SUBSIDIARIES; CHARTER DOCUMENTS.
(a) ORGANIZATION. Each of the Company and its Significant Subsidiaries
is a corporation, partnership or other entity duly organized, validly existing
and in good standing under the Laws of the jurisdiction of its incorporation or
organization, and has the requisite corporate or other power and authority to
own, lease and operate its properties and to carry on its business as now being
conducted. Each Subsidiary of the Company that is not a Significant Subsidiary
is a corporation, partnership or other entity duly organized, validly existing
and in good standing under the Laws of the jurisdiction of its incorporation or
organization, and has the
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requisite corporate or other power and authority to own, lease and operate its
properties and to carry on its business as now being conducted, except where the
failure to be so duly organized, validly existing and in good standing or to
have such requisite corporate or other power and authority has not had and would
not, individually or in the aggregate, reasonably be expected to have a Company
Material Adverse Effect. Each of the Company and its Subsidiaries is duly
qualified or licensed to do business and is in good standing in each
jurisdiction in which the property owned, leased or operated by it or the nature
of the business conducted by it makes such qualification or licensing necessary,
except where the failure to be so duly qualified or licensed and in good
standing has not had and would not, individually or in the aggregate, reasonably
be expected to have a Company Material Adverse Effect.
(b) SUBSIDIARIES. Section 2.1(b) of the Company Disclosure Schedule
sets forth a complete list of the Company's Subsidiaries and all other entities
in which the Company owns, directly or indirectly, any shares of capital stock
or equity interests and such list sets forth the jurisdiction of organization of
each such Subsidiary and other entity as of the date hereof and separately
identifies each Significant Subsidiary.
(c) CHARTER DOCUMENTS. The Company has delivered or made available to
Parent: (i) a true and correct copy of the restated certificate of incorporation
and bylaws of the Company, each as amended to date (collectively, the "COMPANY
CHARTER DOCUMENTS") and (ii) true and correct copies of the certificate of
incorporation and bylaws, or like organizational documents, each as amended to
date (collectively, "SUBSIDIARY CHARTER DOCUMENTS") of each of its Significant
Subsidiaries, and each such instrument is in full force and effect and no other
organizational documents are applicable to or binding upon the Company or any
Significant Subsidiary. The Company is not in violation of any of the provisions
of the Company Charter Documents. No Subsidiary of the Company is in violation
of its respective Subsidiary Charter Documents in any material respect.
2.2. CAPITALIZATION OF THE COMPANY.
(a) COMPANY CAPITALIZATION. The authorized capital stock of the
Company consists of 400 million shares of the Company Common Stock and 50
million shares of preferred stock, par value $0.01 per share (the "PREFERRED
STOCK"). As of the close of business on August 25, 2005, (i) 122,598,093 shares
of the Company Common Stock were issued and outstanding and 5,070,136 shares of
the Company Common Stock were reserved for issuance upon the exercise of
outstanding Company Options, (ii) no shares of Preferred Stock were issued and
outstanding and (iii) no bonds, debentures, notes or other instruments or
evidence of indebtedness having the right to vote (or convertible into, or
exercisable or exchangeable for, securities having the right to vote) on any
matters of which stockholders of the Company may vote were issued or
outstanding. All outstanding shares of Company Common Stock are, and all shares
which may be issued pursuant to the Company Equity Plans will be, when issued in
accordance with the respective terms thereof, duly authorized, validly issued,
fully paid and non-assessable and not issued in violation of preemptive rights
or similar rights. Except (x) as set forth in Section 2.2 of the Company
Disclosure Schedule and (y) for changes since August 25, 2005 resulting from the
exercise of employee and director stock options outstanding on such date, there
are no outstanding (A) shares of capital stock or other voting securities of the
Company, (B) securities of the Company convertible into or exchangeable or
exercisable for
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shares of capital stock or voting securities of the Company, (C) options,
warrants, restricted stock, restricted stock units, or other rights to acquire
from the Company, and no preemptive or similar rights, subscriptions or other
rights, convertible securities, agreements, arrangements or commitments of any
character, relating to the capital stock or voting securities of the Company
obligating the Company to issue, register, transfer or sell, any capital stock,
voting securities or securities convertible into or exchangeable or exercisable
for capital stock or voting securities of the Company or obligating the Company
to grant, extend or enter into any such option, warrant, restricted stock units,
subscription or other right, convertible security, agreement, arrangement or
commitment or (D) equity equivalents, interests in the ownership or earnings of
the Company or other similar rights (the items in clauses (A), (B), (C) and (D)
being referred to collectively as the "COMPANY SECURITIES"). Except as set forth
in Section 2.2(a) of the Company Disclosure Schedule, none of the Company or its
Subsidiaries has any obligation, commitments or arrangements to redeem,
repurchase or otherwise acquire any of the Company Securities or any of the
Company Subsidiary Securities, including as a result of the transactions
contemplated by this Agreement, or to provide funds to or make any investment
(in the form of a loan, capital contribution or otherwise) in any Subsidiary or
other Person. Except as set forth in Section 2.2(a) of the Company Disclosure
Schedule, there are no voting trusts or registration rights or other agreements
or understandings to which the Company or any of its Subsidiaries is a party
with respect to the voting or disposition of the capital stock of the Company or
any of its Subsidiaries. No Company Subsidiary owns any capital stock of the
Company.
(b) SUBSIDIARY CAPITALIZATION. All outstanding shares of capital stock
or other interests of each Company Subsidiary have been duly authorized and
validly issued, are fully paid and nonassessable and were not issued in
violation of preemptive rights or similar rights. Except as set forth in Section
2.2(b) of the Company Disclosure Schedule, all of the outstanding shares of
capital stock of, or other ownership interests in, each Subsidiary of the
Company, are owned by the Company, directly or indirectly, free and clear of any
Liens other than the pledge of such stock or ownership interests to secure
Indebtedness reflected on the latest Company Financials. There are no
outstanding (i) options, warrants, restricted stock, restricted stock units or
other securities of the Company or any of its Subsidiaries which are convertible
into or exchangeable or exercisable for shares of capital stock or other voting
securities or ownership interests in any Subsidiary of the Company, or (ii)
rights to acquire from the Company or any of its Subsidiaries any capital stock,
equity equivalents, voting securities or other ownership interests in, or any
securities convertible into or exchangeable or exercisable for, any capital
stock, equity equivalents, voting securities or ownership interests in, any
Subsidiary of the Company or of any Subsidiary or other similar rights (the
items in clauses (i) and (ii) being referred to collectively as the "COMPANY
SUBSIDIARY SECURITIES") nor does the Company or any of its Subsidiaries have any
obligation to issue any Subsidiary Securities.
(c) INDEBTEDNESS. Section 2.2(c) of the Company Disclosure Schedule
sets forth a complete and correct list, as of the date of this Agreement, of
each Contract pursuant to which any Indebtedness of the Company or its
Subsidiaries is outstanding in an amount in excess of $1,000,000, together with
the amount outstanding thereunder as of the date of this Agreement. No Contract
pursuant to which any Indebtedness of the Company or its Subsidiaries is
outstanding or may be incurred provides for the right to vote (or is convertible
into, or exchangeable or exercisable for, securities having the right to vote)
on any matters on which the shareholders of the Company or its Subsidiaries may
vote. No event has occurred which entitles
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(with or without notice or lapse of time or both) the holder of any Indebtedness
set forth in Section 2.2(c) of the Company Disclosure Schedule to accelerate, or
which does accelerate, the maturity of any such Indebtedness.
2.3. CORPORATE AUTHORIZATION; BOARD APPROVAL.
(a) CORPORATE AUTHORIZATION. The Company has all necessary power and
authority to enter into this Agreement and each Transaction Document to which it
is a party, to perform its obligations hereunder and thereunder and to
consummate the transactions contemplated hereby and thereby. The execution,
delivery and performance by the Company of this Agreement and each Transaction
Document to which it is a party and the consummation by the Company of the
transactions contemplated hereby and thereby, have been duly and validly
authorized by all necessary corporate action, except, with respect to the
Merger, for the approval and adoption of this Agreement by the holders of a
majority of the outstanding shares of Company Common Stock entitled to vote on
this Agreement (the "COMPANY REQUISITE VOTE"). The Company Requisite Vote is the
only vote of holders of any class or series of securities necessary to approve
this Agreement and the transactions contemplated hereby. This Agreement and each
Transaction Document to which the Company is a party has been duly executed and
delivered by the Company and, assuming the due authorization, execution and
delivery by the other parties hereto and thereto, constitutes a valid and
binding agreement of the Company, enforceable against the Company in accordance
with its terms (subject to applicable bankruptcy, insolvency, reorganization,
moratorium, fraudulent transfer and other similar Laws affecting creditors
rights generally and, by general principles of equity, including good faith and
fair dealing, regardless of whether in a proceeding at equity or at law).
(b) BOARD APPROVAL. The Board of Directors of the Company has by
unanimous vote of all of the directors, at a meeting duly called and held on or
prior to the date hereof, (i) determined and declared that this Agreement and
the Merger are advisable and fair to and in the best interests of the Company
and its stockholders, (ii) approved this Agreement and the transactions
contemplated hereby, including the Merger and the transactions contemplated
thereby, (iii) resolved to make the Company Recommendation and (iv) directed
that this Agreement be submitted to the Company's stockholders for adoption.
2.4. GOVERNMENTAL APPROVALS. The execution, delivery and performance
by the Company of this Agreement, and the consummation by the Company of the
transactions contemplated hereby, require no action, permit, license,
authorization, certification, consent, approval, concession or franchise by or
in respect of, or filing with, any federal, state, or local U.S. or foreign
government, court, administrative agency, commission, arbitrator or other
governmental or regulatory agency or authority (a "GOVERNMENTAL AUTHORITY")
other than: (i) the filing of the Certificate of Merger with respect to the
Merger with the Secretary of State of the State of Delaware and appropriate
documents with the relevant authorities of other states in which the Company is
qualified to do business; (ii) compliance with any applicable requirements of
the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended (the "HSR
ACT"), and any other applicable Antitrust Laws; (iii) such filings with and
consents of the Federal Communications Commission ("FCC") as may be required
(including any notifications or other filings that do not require consent) (the
"FCC CONSENTS"); (iv) a joint filing by the Company and Parent of a notice to
the Committee on Foreign Investment in the United States ("CFIUS")
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pursuant to Section 721 of the Defense Production Act of 1950 ("EXON-XXXXXX
NOTICE"); (v) such other consents, approvals, orders, authorizations,
registrations, declarations, filings, notices and permits set forth in Section
2.4 of the Company Disclosure Schedule; (vi) the filing with the Securities and
Exchange Commission ("SEC") of (A) a Proxy Statement relating to the Company
Stockholders' Meeting and (B) such reports under Section 13(a), 13(d), 13(e),
15(d) or 16(a) of the Securities Exchange Act of 1934, as amended (together with
the rules and regulations thereunder, the "EXCHANGE ACT"), as may be required in
connection with this Agreement and the transactions contemplated by this
Agreement; (vii) such filings with or notices to The New York Stock Exchange;
(viii) those that may be required solely by reason of Parent's (as opposed to
any other third party's) participation in the transactions contemplated by this
Agreement; and (ix) such other consents, approvals, orders, authorizations,
registrations, declarations and filings the failure of which to be obtained or
made, individually or in the aggregate, would not reasonably be expected to have
a Company Material Adverse Effect or prevent or materially impede, interfere
with or hinder or delay the consummation of the transactions contemplated hereby
(the filings and consents (and any approvals, authorizations or expirations of
waiting periods thereunder) described in clauses (iii), (iv) and (v) above,
other than notice filings referred to in clause (v), are referred to as the
"COMPANY REQUIRED CONSENTS").
2.5. NON-CONTRAVENTION. Except as set forth in Section 2.5 of the
Company Disclosure Schedule, the execution, delivery and performance by the
Company of this Agreement and each Transaction Document to which it is a party
do not, and the consummation of the transactions contemplated hereby or thereby
will not: (i) contravene, conflict with or violate the Company Charter Documents
or Subsidiary Charter Documents; (ii) subject to obtaining the adoption of this
Agreement by the Company's stockholders as contemplated in Section 4.4 and
obtaining all the consents, approvals and authorizations specified in clauses
(i) through (ix) of Section 2.4, contravene or conflict with or constitute a
violation of any provision of any law, statute, ordinance, rule, code, or
regulation of any Governmental Authority ("LAW"), or any outstanding order,
writ, judgment, injunction, ruling, determination, award or decree by or with
any Governmental Authority ("ORDER") binding upon or applicable to the Company
or its Subsidiaries or by which any of their respective properties are bound or
affected; (iii) subject to obtaining all the consents, approvals and
authorizations and compliance with the matters referred to in clauses (i)
through (ix) of Section 2.4, constitute a default (or an event which with
notice, the lapse of time or both would become a default) under or give rise to
a right of termination, cancellation, modification or acceleration of any right
or obligation of the Company or any of its Subsidiaries, or cause increased
liability or fees or to the loss of a material benefit or imposition of a
penalty under (A) any Contract or (B) any Company Permit; or (iv) result in the
creation or imposition of any mortgage, lien, right of first refusal, pledge,
claim, license, charge, limitation in voting rights, encumbrance or other
security interest (collectively, the "LIENS") on any asset of the Company or any
of its Subsidiaries, other than, in the case of clauses (ii), (iii) or (iv), any
such contraventions, conflicts, violations, defaults, rights of termination,
cancellation, modification, acceleration or other occurrences or Liens that have
not had and would not, individually or in the aggregate, reasonably be expected
to have a Company Material Adverse Effect or prevent or materially impede,
interfere with or hinder or delay the consummation of the transactions
contemplated hereby.
2.6. COMPANY SEC DOCUMENTS. The Company and PanAmSat Corporation have
filed all registration statements, prospectuses, reports, schedules, forms,
statements and
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other documents (including exhibits and all other information incorporated by
reference) required to be filed by it with the SEC since January 1, 2002
(collectively, the "COMPANY SEC DOCUMENTS"). The Company SEC Documents (i) were
prepared in accordance and complied in all material respects with the
requirements of the Securities Act of 1933, as amended (together with the rules
and regulations thereunder, the "SECURITIES ACT"), or the Exchange Act, as the
case may be, applicable to the Company SEC Documents each as in effect on the
date so filed, and (ii) did not at the time they were filed contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading, except to
the extent corrected by a subsequently filed Company SEC Document filed and
publicly available prior to the date of this Agreement (including any financial
statements or other documentation incorporated by reference therein). No
Subsidiary of the Company (other than PanAmSat Corporation) is required to file
any form, report or other document with the SEC.
2.7. FINANCIAL STATEMENTS; NO UNDISCLOSED LIABILITIES; INTERNAL AND
DISCLOSURE CONTROLS.
(a) COMPANY FINANCIALS. Each of the consolidated financial statements
(including, in each case, any related notes thereto) contained in the Company
SEC Documents as of their respective dates (the "COMPANY FINANCIALS"): (i)
complied as to form in all material respects with all applicable accounting
requirements and with the published rules and regulations of the SEC with
respect thereto, (ii) was prepared in accordance with United States generally
accepted accounting principles ("GAAP") applied on a consistent basis throughout
the periods involved (except as may be indicated in the notes thereto or, in the
case of unaudited interim financial statements, as may be permitted by the SEC
on Forms 10-Q, 8-K or any successor forms under the Exchange Act), and (iii)
fairly presented in all material respects the consolidated financial condition
of the Company and its consolidated Subsidiaries as at the respective dates
thereof and the consolidated results of the Company's operations and cash flows
for the periods indicated. All of the Subsidiaries of the Company are
consolidated for accounting purposes as required by GAAP. The consolidated
balance sheet of the Company contained in the Company SEC Documents as of
December 31, 2004 is hereinafter referred to herein as the "COMPANY BALANCE
SHEET," and December 31, 2004 is hereinafter referred to herein as the "COMPANY
BALANCE SHEET DATE."
(b) NO UNDISCLOSED LIABILITIES. Neither the Company nor any of its
Subsidiaries has any liabilities or obligations of any nature (whether accrued,
absolute, contingent or otherwise) except (i) liabilities or obligations
disclosed or provided for in the Company Financials or the notes thereto or in
the Company SEC Documents filed prior to the date hereof and publicly available
after the filing of the Company SEC Document containing the Company Financials
or (ii) liabilities or obligations incurred in the ordinary course of business
consistent with past practice since the Company Balance Sheet Date, none of
which have had or would reasonably be expected to have, individually or in the
aggregate, a Company Material Adverse Effect.
(c) AMENDMENTS OR MODIFICATIONS. The Company has made available to
Parent a complete and correct copy of any amendments or modifications which have
not yet been
-12-
filed with the SEC to Company Material Contracts which previously had been filed
by the Company with the SEC pursuant to the Securities Act or the Exchange Act.
(d) INTERNAL AND DISCLOSURE CONTROLS. The management of the Company
has (i) implemented disclosure controls and procedures (as defined in Rule
13a-15(e) of the Exchange Act) to ensure that material information relating to
the Company, including its consolidated Subsidiaries, is made known to the
management of the Company by others within those entities, and (ii) has
disclosed, based on its most recent evaluation, to the Company's outside
auditors and the audit committee of the Board of Directors of the Company (A)
all significant deficiencies and material weaknesses in the design or operation
of internal control over financial reporting (as defined in Rule 13a-15(f) of
the Exchange Act) which are reasonably likely to adversely affect the Company's
ability to record, process, summarize and report financial data and (B) any
fraud, whether or not material, that involves management or other employees who
have a significant role in the Company's internal control over financial
reporting.
2.8. INFORMATION IN OFFER DOCUMENTS. None of the Proxy Statement to be
filed with the SEC in connection with the Merger, the Debt Offer Documents, nor
any amendment or supplement to the Proxy Statement or the Debt Offer Documents,
will contain, in the case of the Proxy Statement or any amendment or supplement
thereto, at the date the Proxy Statement or any such amendment or supplement is
first mailed to stockholders of the Company and at the time of the Company
Stockholders' Meeting, and in the case of the Debt Offer Documents or any
amendments or supplements thereto, at the time the Debt Offer Documents are
first made available to potential purchasers of the PanAmSat Debt Financing and
at the time of the consummation of the PanAmSat Debt Financing, any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading, except that no
representation or warranty is made by the Company with respect to statements
made or incorporated by reference therein based on information supplied by
Parent for inclusion or incorporation by reference in the Proxy Statement or the
Debt Offer Documents. The Proxy Statement will, when filed with the SEC, comply
as to form in all material respects with the requirements of the Exchange Act
and the rules and regulations promulgated thereunder.
2.9. ABSENCE OF CERTAIN CHANGES. (a) Except as set forth in Section
2.9(a) of the Company Disclosure Schedule or in the Company SEC Documents filed
and publicly available prior to the date hereof, since the Company Balance Sheet
Date through the date hereof, there has not been any change, development, event,
condition, occurrence or effect that individually or in the aggregate has had or
would reasonably be expected to have (i) a Company Material Adverse Effect or
(ii) a material adverse impact on the ability of the Company to consummate the
transactions contemplated hereby.
(b) Since June 30, 2005 through the date hereof, except as (i)
specifically contemplated by this Agreement, (ii) disclosed in the Company SEC
Documents filed and publicly available prior to the date of this Agreement or
(iii) set forth in Section 2.9(b) of the Company Disclosure Schedule the
businesses of the Company and its Subsidiaries have been conducted in all
material respects in the ordinary course of business consistent with past
practice
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and there has not occurred any action, event or failure to act that, if it had
occurred after the date of this Agreement, would have required the consent of
Parent under Section 4.1.
2.10. INSURANCE. A list of all launch and in-orbit satellite insurance
policies as of the date hereof is set forth in Section 2.10 of the Company
Disclosure Schedule. Copies of all such insurance policies have been made
available to Parent. Except as set forth in Section 2.10 of the Company
Disclosure Schedule: (i) all such policies are in full force and effect; (ii)
neither the Company nor any Subsidiary is in breach or default in any material
respect (including any such breach or default in any material respect with
respect to the payment of premiums or the giving of notice), and no event has
occurred which, with notice or the lapse of time, would constitute such a breach
or default, or permit termination or modification in any material respect, under
any policy; (iii) all premiums due thereon have been paid and the Company has
not received any written notice of cancellation, termination or non-renewal of
any such policy (other than in connection with settlement of any claims
thereunder); (iv) all appropriate insurers under such insurance policies have
been notified of all potentially insurable losses known to the Company and no
such insurer has informed the Company or any of its Subsidiaries of any denial
of coverage or reservation of rights thereto; and (v) to the knowledge of the
Company, no insurer on the policy has been declared insolvent or placed in
receivership, conservatorship or liquidation. Section 2.10 of the Company
Disclosure Schedule also sets forth all other material insurance policies in
effect as of the date hereof and owned, held by or applicable to the Company and
its Subsidiaries.
2.11. REAL PROPERTY; TITLE TO ASSETS.
(a) OWNED REAL PROPERTY. Section 2.11(a) of the Company Disclosure
Schedule contains a true and complete list of all the real property owned in fee
by the Company and its Subsidiaries (the "OWNED REAL PROPERTY"). To the
knowledge of the Company, each of the Company and its Subsidiaries has good,
valid, fee simple and marketable title to each parcel of Owned Real Property,
including, without limitation, all buildings, structures, fixtures and
improvements located thereon, in each case, free and clear of all Liens, except
(i) Liens set forth in Section 2.11(a) of the Company Disclosure Schedule, and
(ii) Permitted Liens. Except as set forth in Section 2.11(a) of the Company
Disclosure Schedule, there are no outstanding contracts for the sale of any of
the Owned Real Property or for the purchase of any real property. Except as set
forth in Section 2.11(a) of the Company Disclosure Schedule, there are no
leases, subleases, licenses, concessions or any other contracts, options or
rights of first refusal or agreements granting to any person or entity other
than the Company and its Subsidiaries any right to the possession, use,
occupancy or enjoyment of any of the Owned Real Property or any portion thereof.
(b) REAL PROPERTY LEASES. Section 2.11(b) of the Company Disclosure
Schedule contains a true and complete list of all leases, subleases,
sub-subleases, licenses and other agreements, including any amendments or
modifications thereto, under which the Company or any of its Subsidiaries,
leases, subleases, licenses uses or occupies (whether as landlord, tenant,
subtenant or pursuant to any other occupancy arrangement) or has the right to
use or occupy, now or in the future, any real property (collectively, the "REAL
PROPERTY LEASES," and the property subject to the Real Property Leases together
with the Owned Real Property, the "REAL PROPERTY"). The Company has previously
furnished or otherwise made available to Parent
-14-
true, correct and complete copies of all Real Property Leases. Each Real
Property Lease constitutes the valid and legally binding obligation of the
Company or its Subsidiaries, enforceable against the Company or its
Subsidiaries, as applicable, in accordance with its terms. Except as would not
reasonably be expected to have, individually or in the aggregate, a Company
Material Adverse Effect, with respect to each Real Property Lease (i) there is
no default or event which, with notice or lapse of time or both, would
constitute a default on the part of Company or its Subsidiaries, or, to the
knowledge of the Company, any other party thereto and (ii) except as set forth
in Section 2.11(b) of the Company Disclosure Schedule, neither the Company nor
any of its Subsidiaries, as applicable, has assigned, sublet or transferred its
leasehold interest. Each of the Company and its Subsidiaries has a good and
valid leasehold interest in each Real Property Lease free and clear of all
Liens, except (i) as set forth in Section 2.11(b) of the Company Disclosure
Schedule, and (ii) Permitted Liens.
2.12. COMPANY INTELLECTUAL PROPERTY. Section 2.12 of the Company
Disclosure Schedule lists all registrations or applications for registration of
any Company Intellectual Property. All rights in material Company Intellectual
Property are valid, subsisting and enforceable in all material respects and the
Company or its Subsidiaries owns or has the right to use all material Company
Intellectual Property, free and clear of all Liens, except as set forth on
Section 2.12 of the Company Disclosure Schedule and except for Permitted Liens.
Except as set forth in Section 2.12 of the Company Disclosure Schedule, (i) no
material Action is pending or, to the Company's knowledge, threatened against or
affecting the Company or any of its Subsidiaries or any of their respective
properties, which challenges the validity or use of, or the ownership by, the
Company and/or its Subsidiaries of the Company Intellectual Property; (ii) the
Company has no knowledge of any material infringement or infringing use of any
of the Company Intellectual Property or licenses by any Person; (iii) the
Company or the Subsidiaries take reasonable actions to maintain and protect the
material Company Intellectual Property, including confidential material Company
Intellectual Property, except as would not reasonably be expected to have,
individually or in the aggregate, a Company Material Adverse Effect, and (iv) to
the Company's knowledge, no infringement, misappropriation or violation of any
material intellectual property right or other proprietary right of any third
party has occurred or will result from the conduct of the business of the
Company and its Subsidiaries or from the signing and execution of this Agreement
or the consummation of the transactions contemplated hereby, and no written
claim has been made to the Company or any Subsidiary by any third party based
upon an allegation of any such infringement.
2.13. LITIGATION. There is no action, suit, investigation, claim,
charge or proceeding ("ACTIONS") pending against, or to the knowledge of the
Company, threatened against or affecting, the Company or any of its Subsidiaries
or any of their respective assets, properties or rights which, individually or
in the aggregate, would reasonably be expected to have a Company Material
Adverse Effect or prevent or materially impede, interfere with or hinder or
delay the consummation of the transactions contemplated hereby. As of the date
of this Agreement, no officer or director of the Company is a defendant in any
Action commenced by shareholders of the Company with respect to the performance
of his or her duties as an officer and/or director of the Company. Except as set
forth in Section 2.13 of the Company Disclosure Schedule, there exist no
Contracts with any of the directors and officers of the Company or its
Subsidiaries that provide for indemnification by the Company or its
Subsidiaries. Except as specifically disclosed in the Company SEC Documents
filed and publicly available prior to the
-15-
date of this Agreement, neither the Company nor any of its Subsidiaries nor any
of their respective properties or assets is or are subject to any Order that,
individually or in the aggregate, would reasonably be expected to have a Company
Material Adverse Effect or prevent or materially impede, interfere with or
hinder or delay the consummation of the transactions contemplated hereby.
2.14. TAXES. Except as set forth in Section 2.14 of the Company
Disclosure Schedule:
(a) The Company and each of its Subsidiaries, and each affiliated
group (within the meaning of Section 1504 of the Code) of which the Company or
any of its Subsidiaries is a member, has timely filed (or has had timely filed
on its behalf, taking into account all applicable extensions) all material Tax
Returns required by applicable Law to be filed by it. All such Tax Returns, as
they relate to the Company and its Subsidiaries are correct and complete in all
material respects. The Company and each of its Subsidiaries has paid (or has had
paid on its behalf) all material Taxes due and owing (whether or not shown on
any Tax Return) and has established an adequate reserve for the payment of all
Taxes not yet due and owing.
(b) The Company and each of its Subsidiaries has withheld and paid all
material Taxes required to have been withheld and paid in connection with any
amounts paid or owing to any employee, independent contractor, creditor,
stockholder, or other third party.
(c) As of the date of this Agreement, (i) none of the material Tax
Returns of the Company or its Subsidiaries have been examined by any Taxing
Authority and (ii) no material audit, action, proceeding or assessment is
pending or threatened by any such Taxing Authority against the Company or its
Subsidiaries.
(d) As of the Closing, neither the Company nor its Subsidiaries will
be a party to any tax allocation, tax sharing, tax indemnity or similar
agreement with respect to Taxes, except the Tax Separation Agreement.
(e) There are no Liens for Taxes (other than Taxes not yet due and
payable or which are being contested in good faith by appropriate proceedings)
upon any of the assets of the Company or any of its Subsidiaries.
(f) Neither the Company nor any of its Subsidiaries has ever been a
member of an "affiliated group" (as defined in Section 1504(a) of the Code),
except for any group of which the Company, General Motors Corporation or Xxxxxx
Electronics Corporation (now known as The DIRECTV Group, Inc.) was the common
parent corporation.
(g) Neither the Company nor any of its Subsidiaries will be required
to include any item of income in, or exclude any deduction from, taxable income
for any taxable period (or portion thereof) ending after the Closing Date as a
result of any: (i) change in method of accounting for a taxable period ending or
prior to the Closing Date; (ii) "closing agreement" as described in Section 7121
of the Code (or any corresponding or similar provision of state, local or
foreign Tax law) executed on or prior to Closing Date; or (iii) installment sale
or open transaction disposition made on or prior to the Closing Date.
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(h) Neither the Company nor any Company Subsidiary has distributed
stock of another entity, or had its stock distributed by another entity, in a
transaction that was purported or intended to be governed in whole or in part by
Section 355 or 361 of the Code.
2.15. EMPLOYEE BENEFIT PLANS; ERISA. Except as set forth in Section
2.15(a) of the Company Disclosure Schedule:
(a) All employee benefit plans within the meaning of Section 3(3) of
the Employment Retirement Income Security Act of 1974, as amended ("ERISA"), and
all stock purchase, stock option, severance, retention, employment,
change-in-control, fringe benefit, collective bargaining, bonus, incentive,
deferred compensation, employee loan, multiemployer and all other employee
benefit plans, policies or other arrangements, whether or not subject to ERISA
(including any funding mechanism therefor now in effect or required in the
future), whether formal or informal, oral or written, legally binding or not
(collectively, "PLANS"), under which (i) any current or former employee,
director or consultant of the Company or its Subsidiaries (the "COMPANY
EMPLOYEES") has any present or future right to benefits and which are
contributed to, sponsored by or maintained by the Company or any of its
Subsidiaries or (ii) the Company or any of its Subsidiaries has had or has any
present or future liability (collectively, the "COMPANY PLANS") are in
compliance with, and have been established, administered and operated in
accordance with, the terms of such Company Plans and applicable Law, except for
any failure to so comply, administer or operate the Company Plans that would not
reasonably be likely to have, individually or in the aggregate, a Company
Material Adverse Effect. All Company Plans that are maintained by the Company or
any of its Subsidiaries at any time since January 1, 2002 (collectively, the
"COMPANY MAINTAINED PLANS") are set forth in Section 2.15(a) of the Company
Disclosure Schedule. With respect to each Company Plan (other than any Company
Non-U.S. Plan, each of which shall be made available to Parent by the Company
within 30 days after the receipt by the Company of a written request from Parent
for such plan), the Company has made available to Parent a true, correct and
complete copy of: (i) each writing constituting a part of such Company Plan,
including without limitation all plan documents, employee communications,
benefit schedules, trust agreements, and insurance contracts and other funding
vehicles; (ii) the most recent Annual Report (Form 5500 Series) and accompanying
schedule, if any; (iii) the current summary plan description and any material
modifications thereto, if any (in each case, whether or not required to be
furnished under ERISA); (iv) the most recent annual financial report, if any;
(v) the most recent actuarial report, if any; and (vi) the most recent
determination letter from the IRS, if any.
(b) The Internal Revenue Service has issued a determination or opinion
letter to the effect that each such Company Maintained Plans which is intended
to be "qualified" within the meaning of Section 401(a) of the Code is so
qualified. Except as could not, individually or in the aggregate, result in a
Company Material Adverse Effect, (i) no event has occurred, and no condition
exists, that would subject the Company or its Subsidiaries, either directly or
by reason of their affiliation with any member of their "CONTROLLED GROUP"
(defined as any organization which is a member of a controlled group of
organizations within the meaning of Sections 414(b), (c), (m) or (o) of the
Code), to any tax, fine, lien, penalty or other liability imposed by applicable
Law; (ii) neither the Company nor any of its Subsidiaries has engaged in any
nonexempt prohibited transactions in connection with any Company Maintained Plan
(or its related trust) with respect to which the Company or its Subsidiaries or
any officer, director,
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employee of the Company or any of its Subsidiaries would be subject to either a
penalty pursuant to Section 502(i) of ERISA or a tax imposed by Section 4975 of
the Code; and (iii) neither the Company nor its Subsidiaries has incurred any
liability under the fiduciary provisions of ERISA. No Company Maintained Plan
that is subject to Part 3 of Subtitle B of Title I of ERISA has incurred any
"accumulated funded deficiency" (within the meaning of Section 302 of ERISA or
Section 412 of the Code), whether or not waived. None of the Company or its
Subsidiaries has participated in or contributed to any multiemployer plan as
defined in Section 3(37) of ERISA at any time during the prior six (6) years.
Neither the Company nor any of its Subsidiaries has incurred or could reasonably
be expected to incur any liability with respect to any Company Maintained Plan
that is subject to Title IV of ERISA, except for any liability that would not
reasonably be likely to have, individually or in the aggregate, a Company
Material Adverse Effect.
(c) With respect to any Company Plan, except as would not,
individually or in the aggregate, result in a Company Material Adverse Effect,
no (i) actions, suits or claims (other than routine claims for benefits in the
ordinary course) are pending or threatened and (ii) facts or circumstances exist
that could give rise to any such actions, suits or claims.
(d) Except as set forth in Section 2.15(d) of the Company Disclosure
Schedule, no Company Maintained Plan exists that, as a result of the execution
of this Agreement or the transactions contemplated by this Agreement or any
prior acquisitions or reorganizations of the Company (or any of its affiliates)
(whether alone or in connection with any subsequent event(s)), could result in
the (i) payment to any Company Employee of any money or other property; (ii)
provision of any benefits or other rights of any Company Employee; or (iii)
increase, acceleration or provision of any payments, benefits or other rights
(whether or not a "parachute payment" within the meaning of Section 280G of the
Code) to any Company Employee.
(e) Except as set forth in Section 2.15(e)-1 of the Company Disclosure
Schedule, all Company Maintained Plans maintained outside the United States
(collectively, the "COMPANY NON-U.S. PLANS") are in compliance with, and have
been established, administered and operated in accordance with, the terms of
such Company Non-U.S. Plans and applicable Law, except for any failure to so
comply, establish, administer or operate the Company Non-U.S. Plans as would not
reasonably be expected to have a Company Material Adverse Effect. All such
Company Non-U.S. Plans are set forth in Section 2.15(e) of the Company
Disclosure Schedule. All contributions or other payments which are due with
respect to each Company Non-U.S. Plan have been made in full and there are no
funding deficiencies thereunder, except to the extent any such events would not,
individually or in the aggregate, reasonably be expected to have a Company
Material Adverse Effect.
(f) The Company and its Subsidiaries have no liability for life,
health, medical or other welfare benefits to former employees or beneficiaries
or dependents thereof, except for health continuation coverage as required by
Section 4980B of the Code or Part 6 of Title I of ERISA and at no expense to the
Company and its Subsidiaries.
(g) The Company has caused its 2005 Severance Pay Plan to be amended
as set forth on Section 2.15(g) of the Company Disclosure Schedule.
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2.16. COMPLIANCE WITH LAWS; PERMITS.
(A) COMPLIANCE WITH LAWS. Except as disclosed in the Company SEC
Documents filed and publicly available prior to the date hereof and except for
such violations and failures to comply, and notices, Actions and assertions
concerning such violations and failures to comply, that have not had and would
not, individually or in the aggregate, reasonably be expected to have a Company
Material Adverse Effect or have a material adverse impact on the ability of the
Company or any of its Subsidiaries to consummate the transactions contemplated
by this Agreement: (i) the Company and each of its Subsidiaries has conducted
its business and is, in compliance with all Orders and Laws and corporate
policies applicable thereto and (ii) no notice, Action or assertion has been
received by the Company or any of its Subsidiaries or, to the knowledge of the
Company, has been filed, commenced or threatened against the Company or any of
its Subsidiaries alleging any violation of any Law applicable to them or by
which their respective properties are bound or affected.
(b) COMPANY PERMITS. Except as set forth in Section 2.16(b) of the
Company Disclosure Schedule, the Company and each of its Subsidiaries hold all
licenses, franchises, permits, certificates, approvals and authorizations from
Governmental Authorities (i) necessary to own and operate each Company Satellite
and all related earth stations and (ii) necessary for the lawful conduct of
their respective businesses except, in the case of clause (ii), where the
failure to hold the same has not had and would not, individually or in the
aggregate, reasonably be expected to have a Company Material Adverse Effect
(collectively, the "COMPANY PERMITS"). Section 2.16(b) of the Company Disclosure
Schedule sets forth a true and complete list as of the date hereof of all
Company Permits. The Company and its Subsidiaries are in compliance with the
terms of all Company Permits, except for such non-compliance as has not had and
would not, individually or in the aggregate, reasonably be expected to have a
Company Material Adverse Effect.
(c) PENDING APPLICATIONS. Section 2.16(c) of the Company Disclosure
Schedule sets forth a true and complete list as of the date hereof of the
Company's pending applications for authorization for satellites or earth
stations with Governmental Authorities.
2.17. COMPANY SATELLITES.
(a) COMPANY SATELLITES. Set forth in Section 2.17(a) of the Company
Disclosure Schedule is a complete and accurate list, by orbital location, of
each satellite listing the number and type of transponders thereon, owned in
whole or in part by the Company or any of its Subsidiaries as of the date of
this Agreement (each a "COMPANY SATELLITE"). Subject to applicable Law, the
Company has made available to Parent true and correct copies of the most recent
monthly "Health Status Report" in existence as of the date of this Agreement
summarizing all spacecraft related incidents and anomalies experienced by
Company Satellites known to the Company at such date. Except as set forth in
Section 2.17(a) of the Company Disclosure Schedule, as of the date hereof, the
Company has no knowledge of any spacecraft-related incidents or anomalies
experienced by Company Satellites or any latent design defects that are not
disclosed in the "Health Status Reports" referred to in the immediately
preceding sentence.
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(b) ITU FREQUENCY REGISTRATION. Section 2.17(b) of the Company
Disclosure Schedule contains a summary, by orbital location, of the status of
frequency registration at the International Telecommunications Union, of each
Company Satellite and each advanced published satellite filed on behalf of the
Company, including the identity of the sponsoring administration and the
frequency bands covered. Except as set forth in Section 2.17(b) of the Company
Disclosure Schedule, as of the date hereof, the Company has no knowledge of any
material and significant conflicting claim(s) with respect to its rights to use
the frequency assignment(s) described in its ITU filings at any such orbital
location(s) that reasonably would be expected to restrict or otherwise affect,
in either case in a materially adverse manner, the Company's ability to operate
the Company Satellite(s) on such frequency assignment(s) at such location(s).
2.18. ENVIRONMENTAL MATTERS. Except as set forth in Section 2.18 of
the Company Disclosure Schedule and except as would not reasonably be expected
to have, individually or in the aggregate, a Company Material Adverse Effect,
(i) each of the Company and its Subsidiaries is, and at all times prior, was in
compliance with all applicable Environmental Laws, (ii) no notice, notification,
demand, request for information, citation, summons or order has been received
by, no complaint has been filed against or received, no penalty has been
assessed against, and no investigation, action, claim, suit, proceeding or
review is pending or threatened by any Person against, the Company or any of its
Subsidiaries with respect to any matters relating to or arising out of any
Environmental Law which; (iii) no Hazardous Substance has been discharged,
disposed of, arranged to be disposed of, dumped, injected, pumped, deposited,
spilled, leaked, emitted or released by the Company at, on, under or from any
property or facility owned, leased or operated by the Company or its
Subsidiaries or, to the knowledge of the Company, by any prior owner, lessee or
operator; and (iv) there are no Environmental Liabilities. For purposes of this
Section, the terms "COMPANY" and its "SUBSIDIARIES" shall include any entity
which is, in whole or in part, a predecessor of the Company or any of its
Subsidiaries.
2.19. COMPANY MATERIAL CONTRACTS. All Company Material Contracts are
legal, valid and binding and in full force and effect and are enforceable by the
Company and its Subsidiaries in accordance with their respective terms in all
material respects. The Company and its Subsidiaries have performed in all
material respects all respective obligations required to be performed by them to
date under the Company Material Contracts and are not, and to the knowledge of
the Company are not alleged to be (with or without the lapse of time or the
giving of notice, or both), in breach or default thereunder in any material
respect. Section 2.19 of the Company Disclosure Schedule sets forth a complete
and correct list of all Company Material Contracts as of the date hereof except
that such schedule does not list (1) any Construction/Launch Contract where the
remaining payments to be made by the Company do not exceed $10 million, (2)
contracts to operate satellites of third parties entered into by the Company or
its Subsidiaries in the ordinary course of business, to the extent true and
correct copies of which have been made available to Parent prior to the date
hereof, and (3) the individual Customer Contracts with the Company Material
Customers but instead lists such Company Material Customers. True and correct
copies of the Company Material Contracts have been made available to Parent or
its advisors.
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2.20. FINDERS' FEES. Except for Xxxxxx Xxxxxxx, a copy of whose
engagement agreement has been provided to Parent, no investment banker, broker,
finder, other intermediary or other Person is entitled to any fee or commission
from the Company or any of its Subsidiaries in connection with the consummation
of the transactions contemplated by this Agreement.
2.21. OPINION OF FINANCIAL ADVISOR. THE Company has received the
opinion of Xxxxxx Xxxxxxx to the effect that, as of the date of such opinion,
the Merger Consideration to be received by the holders of shares of the Company
Common Stock in connection with the Merger is fair to such holders from a
financial point of view. An executed copy of such opinion has been made
available to Parent.
2.22. TAKEOVER STATUTES. The Company has elected in its restated
certificate of incorporation not to be governed by Section 203 of the DGCL such
that neither Section 203 of the DGCL nor the restrictions on "business
combinations" set forth therein apply to, or restrict the Company's authority to
effect or complete the Merger, this Agreement and the transactions contemplated
by this Agreement.
2.23. TRANSACTIONS WITH AFFILIATES. Except (i) as set forth in Section
2.23 of the Company Disclosure Schedule, (ii) as disclosed in the Company's
registration statement on Form S-1 filed on December 20, 2004, as amended prior
to the date hereof, (iii) as would not be required to be disclosed pursuant to
Item 404 of Regulation S-K, or (iv) those of a type available to employees of
the Company generally, there are no Contracts or transactions between the
Company or any of its Subsidiaries, on the one hand, and any (i) officer or
director of the Company or any of its Subsidiaries, (ii) any of the Stockholders
or any record or beneficial owner of five percent or more of the voting
securities of the Company or (iii) Affiliate of any such officer, director,
Stockholder or record or beneficial owner, on the other hand. For purposes of
this Section, the term "AFFILIATE" shall have the meaning provided in Rule
501(b) promulgated under the Securities Act.
2.24. LABOR MATTERS. Neither the Company nor any of its Subsidiaries
is a party to any collective bargaining agreement or other labor union contract
applicable to Persons employed by the Company or any Subsidiary, nor, to the
knowledge of the Company, are there any activities or proceedings of any labor
union to organize any such employees.
2.25. LIMITATION ON WARRANTIES. EXCEPT AS EXPRESSLY SET FORTH IN THIS
AGREEMENT, THE COMPANY MAKES NO REPRESENTATION OR WARRANTY TO PARENT, EXPRESS OR
IMPLIED, AT LAW OR IN EQUITY, WITH RESPECT TO THE COMPANY OR ANY SUBSIDIARY OF
THE COMPANY, INCLUDING WITH RESPECT TO MERCHANTABILITY OR FITNESS FOR ANY
PARTICULAR PURPOSE. ALL REPRESENTATIONS OR WARRANTIES NOT EXPRESSLY SET FORTH IN
THIS AGREEMENT ARE HEREBY DISCLAIMED, AND PARENT ACKNOWLEDGES THAT IT IS NOT
RELYING ON ANY REPRESENTATION OR WARRANTY OF THE COMPANY NOT EXPRESSLY SET FORTH
IN THIS AGREEMENT.
-21-
ARTICLE III
Representations and Warranties of Parent and Merger Sub
Parent and Merger Sub represent and warrant to the Company as set
forth below:
3.1. ORGANIZATION AND POWER; SUBSIDIARIES.
(a) ORGANIZATION. Each of Parent and Merger Sub is a limited liability
company, corporation or other entity, respectively, duly organized, validly
existing and in good standing under the Laws of the jurisdiction of its
incorporation or organization, and has the requisite corporate or other power
and authority to own, lease and operate its properties and to carry on its
business as now being conducted.
(b) CHARTER DOCUMENTS. Parent and Merger Sub have each delivered or
made available to the Company a true and correct copy of the Articles of
Incorporation and Bye-laws, as amended to date (collectively, the "FORMATION
DOCUMENTS"), and such instruments are in full force and effect and no other
organizational documents are applicable to or binding upon Parent or Merger Sub.
Parent and Merger Sub are not in violation of any of the provisions of the
applicable Formation Documents.
3.2. CORPORATE AUTHORIZATION. Parent and Merger Sub each has all
necessary power and authority to enter into this Agreement and each Transaction
Document to which it is a party, to perform its obligations hereunder and
thereunder and to consummate the transactions contemplated hereby and thereby.
The execution, delivery and performance by Parent and Merger Sub of this
Agreement and each Transaction Document to which it is a party and the
consummation by Parent of the transactions contemplated hereby and thereby, have
been duly and validly authorized by all necessary limited liability company
action. No vote of any class or series of Parent's (or of Intelsat, Ltd.'s or
Intelsat Holdings, Ltd.'s) capital stock is necessary in connection with the
execution of this Agreement or any Transaction Document and the consummation of
the transactions contemplated hereby and thereby. This Agreement and each
Transaction Document to which it is a party has been duly executed and delivered
by Parent, Merger Sub and, assuming the due authorization, execution and
delivery by the other parties hereto and thereto, constitutes a valid and
binding agreement of Parent, enforceable against Parent in accordance with its
terms (subject to applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer and other similar Laws affecting creditors rights generally
and, by general principles of equity, including good faith and fair dealing,
regardless whether in a proceeding at equity or at Law).
3.3. GOVERNMENTAL AUTHORIZATION. The execution, delivery and
performance by Parent and Merger Sub of this Agreement and each Transaction
Document to which it is a party, and the consummation by Parent of the
transactions contemplated hereby and thereby, require no action, permit,
license, authorization, certification, consent, approval, concession or
franchise by or in respect of, or filing with, any Governmental Authority other
than: (i) compliance with any applicable requirements of the HSR Act and any
other applicable Antitrust Laws; (ii) the FCC Consents; (iii) the joint filing
by the Company and Parent of the Exon-Xxxxxx Notice, (iv) such other consents,
approvals, orders, authorizations, registrations, declarations, filings, notices
and
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permits set forth in Section 2.4 of the Company Disclosure Schedule or Section
3.3 of the Parent Disclosure Schedule; (v) those that may be required solely by
reason of Company's (as opposed to any other third party's) participation in the
transactions contemplated by this Agreement and (vi) such other consents,
approvals, orders, authorizations, registrations, declarations and filings the
failure of which to be obtained or made individually or in the aggregate would
not reasonably be expected to impair the ability of Parent to perform their
obligations hereunder, or prevent or materially impede, interfere with or hinder
or delay the consummation of the transactions contemplated hereby (the filings
and consents (and any approvals, authorizations or expirations of waiting
periods thereunder) described in clauses (ii), (iii) and (iv) above, other than
notice filings referred to in clause (iv), are referred to as the "PARENT
REQUIRED CONSENTS", and, together with the Company Required Consents, the
"REQUIRED CONSENTS").
3.4. NON-CONTRAVENTION. The execution, delivery and performance by
Parent and Merger Sub of this Agreement and each Transaction Document to which
it is a party do not, and the consummation by Parent of the transactions
contemplated hereby and thereby will not: (i) contravene or conflict with the
Parent Formation Documents; (ii) subject to obtaining all the consents,
approvals and authorizations specified in clauses (i)-(iv) of Section 3.3,
contravene or conflict with or constitute a violation of any provision of any
Law or Order binding upon or applicable to Parent or Merger Sub; (iii) subject
to obtaining all the consents, approvals and authorizations specified in clauses
(i)-(vi) of Section 3.3, constitute a default (or an event which with notice,
the lapse of time or both would become a default) under or give rise to a right
of termination, cancellation or acceleration of any right or obligation of
Parent or Merger Sub under (A) any provision of any material Contract binding
upon Parent or (B) any material license, franchise, or permit held by Parent or
Merger Sub; or (iv) result in the creation or imposition of any Lien on any
asset of Parent or Merger Sub, other than, in the case of clauses (ii), (iii) or
(iv), any such contraventions, conflicts, violations, defaults, rights of
termination, cancellation or acceleration or Liens that would not, individually
or in the aggregate, reasonably be expected to impair the ability of Parent or
Merger Sub to perform their obligations hereunder, or prevent or materially
impede, interfere with or hinder or delay the consummation of the transactions
contemplated hereby.
3.5. INFORMATION SUPPLIED. None of the information supplied or to be
supplied by Parent or Merger Sub for inclusion or incorporation by reference in
the Proxy Statement or any amendment or supplement thereto or the Debt Offer
Documents or any amendment or supplement thereto will contain, in the case of
the Proxy Statement, at the date the Proxy Statement or any such amendment or
supplement is first mailed to stockholders of the Company and at the time of the
Company Stockholders' Meeting, and in the case of the Debt Offer Documents or
any amendments or supplements thereto, at the time the Debt Offer Documents are
first made available to potential purchasers of the PanAmSat Debt Financing and
at the time of the consummation of the PanAmSat Debt Financing, any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading.
3.6. LITIGATION. There is no action, suit, investigation or proceeding
pending against, or to the knowledge of Parent, threatened against or affecting,
Parent or Merger Sub or any of their respective properties which, individually
or in the aggregate, would reasonably be expected to impair the ability of
Parent or Merger Sub to perform its obligations hereunder, or
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prevent or materially impede, interfere with or hinder or delay the consummation
of the transactions contemplated hereby.
3.7. FINANCING. Simultaneously with the execution and delivery of this
Agreement, Parent has delivered to the Company true and correct copies of
binding commitment letters from Deutsche Bank AG Cayman, Deutsche Bank
Securities Inc., Citigroup Global Markets Inc., Credit Suisse First Boston,
Cayman Islands Branch, Xxxxxx Commercial Paper Inc., and Xxxxxx Brothers Inc.
(the "COMMITMENT LETTERS"). The financing contemplated by the Commitment Letters
(the "DEBT FINANCING") will provide sufficient funds to allow Parent, Merger Sub
and the Company to consummate the Merger on the terms and conditions set forth
in this Agreement and for the Company to pay the amounts in respect of the
Company Options required by Section 1.17.
3.8. CONDITION OF THE BUSINESS; INDEPENDENT INVESTIGATION.
(a) Notwithstanding anything contained in this Agreement to the
contrary, Parent and Merger Sub each acknowledges and agrees that the Company is
not making any representations or warranties whatsoever, express or implied,
beyond those expressly given by the Company in Article II. Any claims Parent or
Merger Sub may have for breach of representation or warranty shall be based
solely on the representations and warranties of the Company set forth in Article
II. Parent and Merger Sub further represents that neither the Company nor any of
its affiliates nor any other Person has made any representation or warranty,
express or implied, as to the accuracy or completeness of any information
regarding the Company or any of its Subsidiaries or the transactions
contemplated by this Agreement not expressly set forth in this Agreement, and
none of the Company or its affiliates or any other Person will have, or be
subject to, any liability to Parent or any other Person resulting from the
distribution to Parent or its representatives or Parent's use of, any such
information, publications or data room information provided to Parent or its
representatives, or any other document or information in any form provided to
Parent or its representatives in connection with the sale of the Company and it
Subsidiaries and the transactions contemplated hereby, except that nothing
herein shall constitute a waiver of any rights of Parent in the case of fraud.
(b) Parent acknowledges and agrees that it has made its own inquiry
and investigation into, and, based thereon, has formed an independent judgment
concerning, the Company and its Subsidiaries and their businesses and
operations. In connection with Parent's investigation of the Company and its
Subsidiaries and their businesses and operations, Parent and its representatives
have received from the Company or their representatives certain projections and
other forecasts for the Company and its Subsidiaries and certain estimates,
plans and budget information. Parent and Merger Sub each acknowledges and agrees
that (i) there are uncertainties inherent in attempting to make such
projections, forecasts, estimates, plans and budgets, (ii) Parent and Merger Sub
are familiar with such uncertainties, (iii) Parent and Merger Sub are taking
full responsibility for making their own evaluations of the adequacy and
accuracy of all estimates, projections, forecasts, plans and budgets so
furnished to Parent, Merger Sub or their respective representatives, and (iv)
neither Parent nor Merger Sub will (and each will cause all of its Subsidiaries
and other affiliates and all other Persons and representatives acting on its
behalf not to) assert any claim or cause of action against the Company its
Subsidiaries or any of the Company's direct or indirect directors, officers,
employees, agents, stockholders, affiliates,
-24-
consultants, counsel, accountants, investment bankers or representatives with
respect thereto, or hold any such other Person liable with respect thereto,
except that nothing herein shall constitute a waiver of any rights of Parent or
Merger Sub in the case of fraud.
3.9. QUALIFICATIONS TO HOLD COMMUNICATIONS LICENSES. Parent is
legally, financially and otherwise qualified under the Communications Act to be
the licensee of and to own and operate the Company Satellites and to perform its
obligations hereunder. To Parent's knowledge, no fact or circumstance exists
relating to the qualifications of Parent or any foreign qualifications of Parent
that (i) has prevented or delayed, or would reasonably be expected to prevent or
delay beyond the Outside Date, the FCC from granting approval of the FCC Consent
Application; or (ii) has prevented or delayed, or would reasonably be expected
to prevent or delay beyond the Outside Date, or otherwise disqualify Parent as
the licensee, owner, operator or transferee of any satellite in any foreign
jurisdiction, in each case assuming receipt of the Required Consents and the
satisfaction of the condition set forth in Section 5.3(a)(i).
ARTICLE IV
COVENANTS
4.1. CONDUCT OF THE COMPANY.
(a) ORDINARY COURSE. During the period from the date hereof and
continuing until the earlier of the termination of this Agreement or the
Effective Time, except as (x) set forth in Section 4.1 of the Company Disclosure
Schedule, (y) expressly contemplated by this Agreement or as required by
applicable Law or (z) consented to in writing by Parent (such consent not to be
unreasonably withheld or delayed), the Company shall, and shall cause each of
its Subsidiaries to, for the benefit of Parent, carry on its business in the
ordinary course consistent with past practice and, to the extent consistent
therewith, use all commercially reasonable efforts to preserve intact its
current business organizations, keep available the services of its current
officers and employees and preserve its relationships with customers, suppliers,
licensors, licensees, distributors and others having business dealings with it,
maintain in full force and effect the satellite launch and in-orbit insurance
policies listed on Section 2.10 of the Company Disclosure Schedule until the end
of their term and consult in good faith with Parent regarding (i) the decision
whether to replace any such policy which expires prior to the Closing Date, and
(ii) if replaced, the terms of the replacement policy, and with respect to other
types of insurance, maintain in full force and effect until the Closing
substantially the same levels of coverage of insurance with respect to the
assets, operations and activities of the Company and its Subsidiaries as a whole
as are in effect as of the date of this Agreement.
(b) REQUIRED CONSENT. Without limiting the generality of Section
4.1(a), and except as otherwise expressly permitted by this Agreement, or listed
on Section 4.1 of the Company Disclosure Schedule or as required by applicable
Law in existence on the date hereof, from the date hereof and continuing until
the earlier of the termination of this Agreement or the Effective Time, the
Company shall not, and shall not permit or cause any of its Subsidiaries to, for
the benefit of Parent without the prior written consent of Parent (such consent
not to be unreasonably withheld or delayed):
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(i) do or effect any of the following actions with respect to the
Company'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 other distribution on (other than dividends to the Company or its
Subsidiaries), or directly or indirectly redeem, purchase or otherwise acquire,
any shares of its capital stock or any securities or obligations convertible
into or exchangeable or exercisable for any shares of its capital stock;
PROVIDED, HOWEVER, that Company may declare and pay consistent with usual and
customary declaration, record and payment dates, the regular quarterly cash
dividend in respect of each of the third and fourth fiscal quarters of 2005
which shall not exceed $0.3875 per share of Company Common Stock, and
thereafter, consistent with its customary declaration, record and payment dates,
regular quarterly cash dividends in respect of each fully completed fiscal
quarter prior to the Closing Date, not to exceed $0.42625 per share of Company
Common Stock (such applicable amount, the "QUARTERLY DIVIDEND"); (C) grant any
Person any right or option to acquire any shares of capital stock, except for
stock options relating to not more than 100,000 shares of Company Common Stock
(having an exercise price of fair market value at date of grant) for grants to
new hires to fill vacant positions or in connection with promotions to fill
vacant positions, in each case, in the ordinary course of business consistent
with past practice; (D) issue, deliver, pledge, transfer or sell or agree to
issue, deliver, transfer or sell any Company Securities or Subsidiary Securities
(except pursuant to the exercise or vesting of Company Options, restricted stock
or restricted stock units outstanding on the date hereof or permitted to be
issued under this Section 4.1(b) or the issuance of previously deferred
restricted stock (provided such shares are included in the number of shares
reserved for issuance set forth in Section 2.2(a)(i))); (E) enter into any
agreement, understanding or arrangement with respect to the sale or voting of
its capital stock; or (F) make any adjustment to the amount of stock underlying,
or the exercise price of, any Company Options;
(ii) amend or cause, adopt or propose any amendments to (i) the
Company Charter Documents or any of the Subsidiary Charter Documents or (ii) any
material term of any outstanding Company Security or any Subsidiary Security;
(iii) adopt a plan or agreement of complete or partial liquidation,
dissolution, merger, consolidation, restructuring, recapitalization or other
reorganization of the Company or any of its Subsidiaries (other than a merger or
consolidation between direct or indirect wholly owned Subsidiaries);
(iv) merge or consolidate with any other Person or acquire assets or
capital stock of any Person (other than the acquisition of assets in the
ordinary course of business consistent with the Company's capital spending
budget set forth in Section 4.1(b)(viii) of the Company Disclosure Schedule);
(v) sell, transfer, license, assign, lease, pledge, mortgage,
encumber, subject to a material Lien (other than a Permitted Lien) or otherwise
dispose of any amount of the Company's or any of its Subsidiaries' property,
assets or rights, other than in the ordinary course of business consistent with
past practice or with respect to obsolete assets;
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(vi) change the orbital location or de-orbit or take any similar
action with respect to any Company Satellite, other than in the ordinary course
of business consistent with past practice;
(vii) incur or assume any Indebtedness (except for borrowings under
the Company's revolving credit facility), or amend the terms of any existing
material Indebtedness set forth in Section 2.2(c) of the Company Disclosure
Schedule or repay any Indebtedness (except Indebtedness arising under the
Company's revolving credit facility) which is secured by any assets of the
Company or any of its Subsidiaries;
(viii) (A) acquire or agree to acquire any satellite or other
spacecraft which the Company has not, on the date of this Agreement, previously
agreed in writing to acquire, or (B) make one or more investments or capital
expenditures; provided, however, that the Company may (x) continue or commence
capital programs as set forth in Section 4.1(b)(viii) of the Company Disclosure
Schedule, plus additional expenses solely for change orders of up to 10% of the
budgeted payments on each satellite shown thereon, (y) replace satellites and
other spacecraft (in each case other than satellites that are not Core
Satellites) that are not successfully launched, that are lost or destroyed or
whose operational capacity is reduced to less than 50% of its stated satellite
operational capacity, in each case in a commercially reasonable manner and
consistent with the Company's customary procurement practices, and (z) purchase
such terrestrial equipment as necessary to supply customers in the ordinary
course in connection with leases of transponder capacity by such customers or
other services provided to such customers;
(ix) (A) enter into, establish, adopt, terminate or modify any Company
Plan or any plan, policy, trust, fund, program or other agreement or arrangement
that would be a Company Plan if it were in existence as of the date of this
Agreement, (B) grant any bonuses, salary increases, severance or termination pay
to, or otherwise increase the compensation or benefits of, any present or former
officer, director, consultant or employee of the Company or its Subsidiaries,
other than (1) increases in salary or wages in the ordinary course of business
consistent with past practice, or (2) as may be required by applicable Law, the
Company Plans or a binding written contract in effect on the date of this
Agreement, (C) except as required by the terms of the Company Plans, accelerate
the vesting or payment of the compensation payable or the benefits provided or
to become payable or provided to any of the Company's or any of its
Subsidiaries', current or former directors, officers, employees or consultants,
or otherwise pay any amounts not due such individual under any existing Company
Plan, (D) establish, adopt, enter into or amend any collective bargaining
agreement or (E) fund any trust underlying any Company Plan except as required
by the terms of such Company Plan or trust in effect as of the date hereof;
PROVIDED that the foregoing shall not prevent (x) hiring and promoting officers
and employees to fill vacancies or (y) the participation of such officers and
employees in Company Plans, in each case under (x) and (y), in the ordinary
course of business consistent with past practice;
(x) except as may be required by applicable Law or GAAP, change any
method, policy, practice, procedure or principle of accounting;
(xi) (1) enter into any Contract that if existing on the date hereof
would be a Company Material Contract (other than a Customer Contract) except (A)
as contemplated by and
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in connection with an action permitted by the proviso to clause (viii) of this
Section 4.1(b), (B) as contemplated by clause (xix) of this Section 4.1(b) and
(C) as contemplated by Section 4.1(d), (2) enter into any Significant Capacity
Contract outside of the ordinary course of business, (3) terminate any Company
Material Contract (except pursuant to the terms thereof in response to a breach
by another party thereto) or any Customer Contract with any Company Material
Customer (except pursuant to the terms thereof in response to a breach by
another party thereto), (4) amend, supplement or modify in any material respect
any Company Material Contract other than a Customer Contract to which the
Company or any of its Subsidiaries is a party or amend, supplement or modify in
the aggregate in a materially adverse respect any Customer Contract to which the
Company or any of its Subsidiaries is a party, or (5) waive, release, cancel,
allow to lapse, convey, encumber or otherwise transfer any material rights or
claims under any Company Material Contract;
(xii) make any loan, advance or capital contribution to or investment
in any Person (including any present or former officer, director, consultant, or
employee of the Company or its Subsidiaries), other than loans, advances or
capital contributions to or investments in a Subsidiary of the Company;
(xiii) settle or compromise (A) any material Action, whether
administrative, civil or criminal, in law or in equity or (B) any material claim
under any insurance policy for the benefit of the Company or any of its
Subsidiaries;
(xiv) cancel any debts or waive any claims or rights of substantial
value (including the cancellation, compromise, release or assignment of any
Indebtedness owed to, or claims held by, the Company or any its Subsidiaries),
except for cancellations made or waivers granted in the ordinary course of
business consistent with past practice which, in the aggregate, are not material
to the Company and its Subsidiaries, taken as a whole;
(xv) make, change or rescind any material Tax election not consistent
with past practice; change any accounting period or method; or settle or
compromise any material Tax liability;
(xvi) cancel or terminate, or amend in any material and adverse way,
any satellite launch or in-orbit insurance policy of the Company or its
Subsidiaries, or fail to use reasonable best efforts to prevent any such policy
from being cancelled or terminated prior to the scheduled end of its term;
(xvii) terminate, shut down, discontinue or cease operations of any
business segment of the Company or any service offering;
(xviii) enter into, renew, materially amend or terminate any lease of
material real property;
(xix) enter into any partnerships, joint ventures or other similar
agreements;
(xx) take any action (including any action otherwise expressly
permitted hereby) that would reasonably be expected to (A) result in any of the
representations and warranties set forth in Article II becoming false or
inaccurate such that the condition set forth in
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Section 5.3(e) would fail to be satisfied or (B) adversely affect the likelihood
that any Regulatory Condition will be satisfied on a timely basis; or
(xxi) agree or commit, in writing or otherwise, to take any of the
foregoing actions.
(c) RESTORATION SERVICES. In the event of a total or partial failure
of any of Company Satellite, the Company agrees to notify Parent within
twenty-four (24) hours of the time that the Company has knowledge that a failure
has occurred and, as soon as practicable thereafter, provide Parent with a list
of the technical requirements of any services which the Company intends for
third parties to restore (the "Restoration Services"). The Company further
agrees to consider in good faith any offer Parent makes to provide such
Restoration Services.
(d) IN-BOUND CAPACITY LEASES. Prior to entering into any In-bound
Capacity Lease, the Company agrees to notify Parent that it desires to enter
into an In-bound Capacity Lease and request that Parent make a proposal to the
Company to provide such In-bound Capacity Lease. Parent shall within five
Business Days of receiving the Company's request for a proposal for such
In-bound Capacity Lease provide the Company with a proposal for such In-bound
Capacity Lease or notify the Company that it does not wish to provide such a
proposal. If Parent provides the Company with a proposal for an In-bound
Capacity Lease, the Company shall not obtain the services provided by such
proposed In-bound Capacity Lease from any other third party, unless such third
party provides an In-bound Capacity Lease on terms which are more favorable to
the Company in the aggregate than the terms proposed by Parent.
4.2. CONDUCT OF PARENT.
(a) CONDUCT. Parent agrees that, during the period from the date
hereof and continuing until the earlier of the termination of this Agreement or
the Closing, except as expressly contemplated by this Agreement, or as required
by applicable Law, and except as may be consented to in writing by the Company
(such consent not to be unreasonably withheld or delayed), Parent shall not, and
shall not permit any of its direct or indirect Subsidiaries or any Controlled
Affiliates to, (i) take any action or agree, in writing or otherwise, to take
any action that would reasonably be likely to result in any of the
representations and warranties set forth in Article III becoming false or
inaccurate such that the conditions set forth in Section 5.2(a) would fail to be
satisfied or (ii) enter into or consummate any agreements or arrangements for an
acquisition (via stock purchase, merger, consolidation, purchase of assets or
otherwise) in the fixed satellite services ("FSS") industry of any business
providing or currently capable of providing satellite service within, or
connecting via satellite to, North America or South America, in either case in
the C or Ku bands, it being understood that the foregoing shall not prevent
Parent, any of its Subsidiaries or any Controlled Affiliates from (x) acquiring
hardware (including satellites on the ground or in orbit, so long as such
acquisition does not include any orbital slot, license, or right to use or
occupy an orbital slot or license or associated business), (y) acquiring any FSS
business or orbital slots, in either case not involving the C or Ku bands or
involving the C or Ku bands but not providing or capable (at the time of such
acquisition) of providing satellite service within, or connecting via satellite
to, North America or South America, or (z) entering into any joint venture in
which Parent, directly or indirectly, holds an interest of 50% or less, so long
as, in each of cases (x), (y) and (z), the taking of any such action
-29-
is not, individually or in the aggregate, reasonably likely to adversely affect
the ability of Parent to obtain any of the Required Consents, or the ability of
the condition set forth in Section 5.3(a)(i) to be satisfied, by the Outside
Date.
(b) FINANCING. Parent shall use its commercially reasonable efforts to
obtain and effectuate the financing contemplated by the Commitment Letters on
the terms set forth therein. Parent agrees to notify the Company promptly and,
in any case, within 24 hours if, at any time prior to the Closing Date, (i) any
Commitment Letters shall expire or be terminated, modified or amended for any
reason, or (ii) any of the financing sources that is a party to any of the
Commitment Letters notifies Parent that such source will not be able to provide
financing substantially on the terms set forth in the applicable Commitment
Letter. Parent shall not amend or alter, or agree to amend or alter, the
Commitment Letters in any manner that could reasonably be expected to materially
delay or prevent the consummation of any of the transactions contemplated hereby
without the prior written consent of the Company.
4.3. DEBT OFFER DOCUMENTS, PROXY STATEMENT; SEC DOCUMENTS; COMPANY
FINANCIAL STATEMENTS.
(a) PROXY STATEMENT. As promptly as reasonably practicable following
the date hereof, the Company shall prepare and shall file (no later than the
tenth Business Day following the date hereof) with the SEC a preliminary Proxy
Statement, together with a form of proxy, with respect to the Company
Stockholders' Meeting at which the stockholders of the Company will be asked to
vote upon and approve this Agreement and the Merger and shall use its
commercially reasonable efforts to have the Proxy Statement and form of proxy
cleared by the SEC as soon as practicable following the date the Proxy Statement
is filed with the SEC and shall cause the Proxy Statement to be mailed to the
Company's stockholders as soon as practicable following the date the form of
proxy is cleared by the SEC. Parent will provide promptly the Company with any
information that may be reasonably requested in order to effectuate the
preparation and filing of the Proxy Statement. The Company will provide Parent
and its counsel with a reasonable opportunity to review the Proxy Statement
prior to its filing. The Company will respond as promptly as practicable to, and
provide Parent and its counsel with a reasonable opportunity to participate in
the Company's response to, any comments from the SEC and will notify Parent upon
the receipt of any comments from the SEC in connection with the filing of, or
amendments or supplements to, the Proxy Statement and shall provide Parent with
all correspondence between the Company and its Representatives, on the one hand,
and the SEC and its staff, on the other hand, relating to the Proxy Statement.
(b) INFORMATION. Whenever any event occurs which is required to be set
forth in an amendment or supplement to the Proxy Statement or the Debt Offer
Documents, the Company or Parent, as the case may be, will promptly inform the
other party of such occurrence and cooperate in filing with the SEC and/or
mailing to the stockholders of the Company, in the case of the Proxy Statement,
or to the extent required to potential purchasers of PanAmSat Debt Financing,
such amendment or supplement, in each case as promptly as practicable; provided,
however, with the respect to those Debt Offer Documents that are provided with
respect to bank loans (the "BANK BOOK"), the Company shall be obligated to
inform Parent only of such information regarding the Company as it would be
required to inform the lenders and banks under the Commitment Letters as if the
Company were a party thereto. Each of Parent and the
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Company shall cooperate and the Company shall provide Parent and its counsel
with a reasonable opportunity to review and comment on the Proxy Statement and
on any amendment or supplement to the Proxy Statement prior to filing such with
the SEC and will provide Parent with a copy of all such filings made with the
SEC. The information provided and to be provided by Parent, Merger Sub and the
Company, respectively, for use in the Proxy Statement or any amendment or
supplement thereto and the Debt Offer Documents or any amendment or supplement
thereto, in the case of the Proxy Statement, at the date the Proxy Statement or
any such amendment or supplement is first mailed to stockholders of the Company
and at the time of the Company Stockholders' Meeting, and in the case of the
Debt Offer Documents or any amendments or supplements thereto, at the time the
Debt Offer Documents are first made available to potential purchasers of
PanAmSat Debt Financing and at the time of the consummation of the PanAmSat Debt
Financing, any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading; PROVIDED that with respect to the Bank Book, the Company's only
obligation shall be to provide such information regarding the Company as it
would be required to inform the lenders and banks under the Commitment Letters
as if the Company were a party thereto. Parent shall provide to the Company a
copy of any disclosure relating to the Company and its Subsidiaries in the Bank
Book or any revision thereto and an opportunity to correct such disclosure prior
to the dissemination of the Bank Book or any such revision.
(c) COMPANY SEC DOCUMENTS. Each of the Company SEC Documents to be
filed by the Company after the date of this Agreement(but with respect to the
Proxy Statement, with respect to the final Proxy Statement only) when filed
(unless amended, in which case when amended), will comply in all material
respects with the applicable requirements of the Securities Act and the Exchange
Act, each as in effect on the date so filed (unless amended, in which case when
amended). None of the Company SEC Documents (including any financial statements
or schedules included or incorporated by reference therein) to be filed by the
Company after the date of this Agreement, when filed (unless amended, in which
case when amended), will contain any untrue statement of a material fact or omit
to state a material fact required to be stated or incorporated by reference
therein or necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading.
(d) COMPANY FINANCIAL STATEMENTS. Each of the audited and unaudited
financial statements (including any related notes) included in the Company SEC
Documents to be filed by the Company after the date of this Agreement, when
filed (unless amended, in which case when amended), will comply in all material
respects with all applicable accounting requirements and with the published
rules and regulations of the SEC with respect thereto, will have been prepared
in accordance with GAAP (except, in the case of unaudited quarterly statements,
as permitted by Form 10-Q of the SEC) applied on a consistent basis throughout
the periods involved (except as may be indicated in the notes thereto) and will
fairly present the consolidated financial position of the Company and its
Subsidiaries at the respective date thereof and the consolidated results of its
and their operations and cash flows for the periods indicated (subject, in the
case of unaudited quarterly statements, to normal year-end audit adjustments,
which were not and are not expected to be material in amount).
4.4. COMPANY STOCKHOLDERS' MEETING.
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(a) COMPANY'S OBLIGATIONS RELATING TO THE STOCKHOLDER APPROVAL
PROCESS. The Company shall, consistent with its obligations under Section 4.7,
as promptly as practicable following the execution of this Agreement:
(i) take all action, in accordance with the U.S. federal securities
laws, the DGCL, all other applicable Law and the Company Charter Documents,
necessary to call, hold and convene a meeting of its stockholders to consider
and vote on the adoption and approval of this Agreement and the approval of the
Merger to be held within 20 Business Days following the mailing of the Proxy
Statement to the holders of Company Common Stock (the "COMPANY STOCKHOLDERS'
MEETING");
(ii) subject to Section 4.4(b), include in the Proxy Statement the
recommendation of its Board of Directors in favor of the adoption and approval
of this Agreement and the approval of the Merger (the "COMPANY RECOMMENDATION");
and
(iii) use its commercially reasonable efforts, in accordance with the
U.S. federal securities laws, the DGCL and all other applicable Law, to solicit
from its stockholders entitled to vote thereon proxies to be voted at the
Company Stockholders' Meeting sufficient under applicable Law to constitute the
Company Requisite Vote.
(b) NON-RECOMMENDATION DETERMINATION. If the Company's Board of
Directors (or any authorized committee thereof) shall have determined, in good
faith and following the receipt of advice of legal counsel, that either (i)
prior to the mailing of the Proxy Statement, it is necessary not to make the
Company Recommendation, or (ii) after having made the Company Recommendation, it
is necessary to withdraw, revoke or modify such recommendation in any manner
adverse to Parent, in each case, in order to comply with its fiduciary duties
under applicable Law (a "NON-RECOMMENDATION DETERMINATION"), the Company shall
(x) promptly provide written notice thereof to Parent and (y) be permitted to
make a Non-Recommendation Determination; provided, however, that if a
Non-Recommendation Determination is in respect of a Superior Proposal, the
Company's Board of Directors (or any authorized committee thereof) may make a
Non-Recommendation Determination only if the Company shall have complied in all
respects with the applicable provisions of Section 4.6 with respect to such
Superior Proposal. Notwithstanding anything to the contrary in this Agreement,
unless this Agreement is earlier terminated in accordance with its terms, the
Company shall be required to submit this Agreement for approval by its
stockholders at the Company Stockholders' Meeting and comply with its other
obligations hereunder regardless of any Non-Recommendation Determination.
(c) CONDITIONS TO THE COMPANY'S OBLIGATIONS RELATING TO THE
STOCKHOLDER APPROVAL PROCESS. The Company's obligation to hold and convene a
meeting as set forth in Section 4.4(a)(i) and to take the actions set forth in
Section 4.4(a)(iii) is subject to the receipt of all required approvals and
clearances of the Proxy Statement from the SEC and that no restraining order
shall have been entered or threatened by the SEC with respect to the Proxy
Statement.
4.5. CONFIDENTIALITY; ACCESS TO INFORMATION.
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(a) CONFIDENTIALITY. The parties acknowledge that the Company and an
affiliate of Parent have previously executed a Confidentiality Agreement dated
April 19, 2005, as amended (the "CONFIDENTIALITY AGREEMENT"), which
Confidentiality Agreement will continue in full force and effect in accordance
with its terms, and Parent will hold, and will cause its directors, officers,
employees, agents and advisors (including attorneys, accountants, consultants,
bankers and financial advisors) to hold, any Evaluation Material (as defined in
the Confidentiality Agreement) confidential in accordance with the terms of the
Confidentiality Agreement.
(b) ACCESS TO INFORMATION. To the extent permitted by applicable Law,
from the date hereof and continuing until the earlier of the termination of this
Agreement or the Effective Time, the Company will and will cause its
Subsidiaries to (i) give Parent, its counsel, financial advisors, auditors and
other authorized representatives reasonable access during normal business hours
to the offices, properties, employees and personnel (including for purposes of
discussing post-Closing employment), books and records of the Company and its
Subsidiaries, (ii) furnish to Parent, its counsel, financial advisors, auditors,
financing sources that executed and delivered the Commitment Letters, and other
authorized representatives such financial and operating data and other
information as such persons may reasonably request (including for the purpose of
planning for post-closing integration between the parties), (iii) instruct the
Company's employees, auditors, counsel and financial advisors to cooperate with
Parent in its investigation of the business of the Company and its Subsidiaries
and in Parent's and its Subsidiaries' integration planning efforts and (iv)
deliver to Parent a copy of the monthly "Health Status Reports" at the same time
that such reports are delivered to the Company's customers in the ordinary
course of business consistent with past practice. The foregoing information
shall be held in confidence by Parent, its counsel, financial advisors, auditors
and other authorized representatives in accordance with the provisions of the
Confidentiality Agreement.
4.6. NO SOLICITATION.
(a) The Company 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 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:
(i) solicit, initiate or otherwise take action to facilitate
(including by way of furnishing information) or encourage the making by any
Person (other than the other parties hereto) of any proposal, offer or inquiry
(including any proposal from or offer to its shareholders) that constitutes, or
could reasonably be expected to lead to, a proposal for any merger,
reorganization, share exchange, tender offer, exchange offer, consolidation,
recapitalization, liquidation, dissolution, joint venture or other business
combination involving the Company or any of its Subsidiaries, or any purchase of
10% or more of the capital stock or a material portion of the assets of the
Company and its Subsidiaries on a consolidated basis (in each case, a "COMPETING
TRANSACTION");
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(ii) participate in any discussions or negotiations regarding, or
furnish or disclose to any Person any information with respect to or in
furtherance of, or take any other action to facilitate any inquiries with
respect, to any Competing Transaction; or
(iii) execute or enter into any agreement, understanding or
arrangement with respect to any Competing Transaction, or approve or recommend
or propose to approve or recommend any Competing Transaction or any agreement,
understanding or arrangement relating to any Competing Transaction (or resolve
or authorize or propose to agree to do any of the foregoing actions); provided,
however, that:
(A) at any time prior to such time, if any, that the Company Requisite
Vote shall have been received, the Company may take any action described in
the foregoing clause (ii) in respect of any Person, but only if (1) such
Person has delivered an unsolicited bona fide written proposal for a
Competing Transaction that, in the good faith judgment of the Company's
Board of Directors (or any authorized committee thereof), after
consultation with its financial advisors, is a Superior Proposal or is
reasonably likely to be or become a Superior Proposal and (2) the Board of
Directors of the Company (or any authorized committee thereof) determines
in good faith following the receipt of the advice of counsel that it is
necessary to do so in order to comply with its fiduciary duties under
applicable Law; provided, further, that (x) prior to the Company furnishing
any confidential information to such Person, such Person shall have entered
into a confidentiality agreement with the Company in substance
substantially similar to and no more favorable to such Person than the
Confidentiality Agreement (excluding any standstill provision) and (y) the
Company shall promptly notify (but in no event later than 24 hours) Parent
of any such inquiries, proposals or offers received by, any such
information requested from, or any such discussions or negotiations sought
to be initiated or continued with, any of its Representatives indicating,
in connection with such notice, the name of such Person and the material
terms and conditions (including without limitation with respect to any
rights and obligations of any shareholders) of any inquiries, proposals or
offers, and shall keep Parent reasonably informed as to the status thereof
and of any oral or written modifications to the possible terms of the
Competing Transaction that is the subject of such inquiries, proposals or
offers or status in each case, within 24 hours of such modification. The
Company agrees that it and its respective Subsidiaries will not enter into
any confidentiality agreement with any Person subsequent to the date of
this Agreement which prohibits the Company from providing such information
to Parent. The Company agrees that neither it nor any of its Subsidiaries
shall terminate, waive, amend or modify any provision of any standstill or
confidentiality agreement relating to the sale or other disposition of the
Company or any material portion of its or any of its Subsidiaries' equity
interests or assets to which it or any of its Subsidiaries is a party and
that it and its Subsidiaries shall enforce the provisions of any such
agreement by appropriate commercially reasonable action.
(B) The Company may enter into any agreement or arrangement (other
than a confidentiality agreement, which may be entered into if the
conditions of clause (A) above have been met) regarding any such Competing
Transaction, or the Company's Board of Directors (or any authorized
committee thereof) may approve or recommend to its stockholders (or resolve
to do so), or publicly propose to approve or recommend to its
-34-
stockholders, an unsolicited bona fide written proposal for a Competing
Transaction or make a Non-Recommendation Determination in connection with a
Superior Proposal, but only if (1) the Company and its Subsidiaries have
complied with their obligations under this Section 4.6 in all material
respects and with this clause (B) in all respects, (2) the Company has
first given Parent at least four Business Days to respond to such Competing
Transaction after the Company has notified Parent of all material terms of
such transaction as described above and that, in the absence of any further
action by Parent, (i) in the good faith judgment of the Company's Board of
Directors (or any authorized committee thereof), after consultation with
its financial advisors, the Company's Board of Directors (or any authorized
committee thereof) has concluded such Competing Transaction is a Superior
Proposal and (ii) the Company's Board of Directors (or any authorized
committee thereof), has determined in good faith and following the receipt
of the advice of counsel, that it is necessary to take such action (and
describing the action that it intends to take) in order to comply with its
fiduciary duties under applicable Law, and in each case having given due
consideration to any amendments or modifications to this Agreement proposed
by Parent during such four Business Days period; and (3) in the event the
Company intends to enter into any such agreement or arrangement (other than
a confidentiality agreement that may be entered into if the conditions of
clause (A) above have been met) regarding any such Competing Transaction,
the Company has previously terminated this Agreement in accordance with
Section 6.1(c)(ii) hereof and simultaneously paid the Company Termination
Fee pursuant to Section 6.3(b) hereof;
(C) nothing herein shall limit the Company's ability to comply in good
faith, to the extent applicable, with Rules 14d-9 and 14e-2 of the Exchange
Act with regard to a tender or exchange offer or to make any disclosure
required by applicable Law that the Company's Board of Directors (or any
authorized committee thereof) determines in good faith following the
receipt of the advice of counsel is required by applicable Law; provided,
however, that neither the Company nor the Company's Board of Directors (nor
any committee thereof) shall (i) recommend that the stockholders of the
Company tender their Company Common Stock in connection with any such
tender or exchange offer (or otherwise approve or recommend any Competing
Transaction) or (ii) withdraw or modify the Company Recommendation, unless
in each case the requirements of this Section 4.6 shall have been
satisfied.
(b) For the purposes of this Agreement, "SUPERIOR PROPOSAL" means a
bona fide, written proposal by a third party for a Competing Transaction not
solicited in violation of this Section 4.6 that is on terms that the Company's
Board of Directors (or any authorized committee thereof) determines in good
faith, after consultation with its counsel and financial advisors, would, if
consummated, result in a transaction that would be more favorable to the Company
and its stockholders (taking into account such factors as the Company's Board of
Directors (or any authorized committee thereof) in good xxxxx xxxxx relevant,
including the identity of the offeror and all legal, financial, regulatory and
other aspects of the proposal, including the terms of any financing and the
likelihood that the transaction will be consummated) than the Merger
contemplated by this Agreement would be if it were consummated; provided that to
be a Superior Proposal, the consummation of one or more steps in a Competing
Transaction must result in a third party (or the shareholders of such third
party) acquiring, directly or indirectly, more than 50% of the Company Common
Stock (or the surviving or
-35-
ultimate parent entity in such transaction) or all or substantially all of the
assets of the Company and its Subsidiaries, taken as a whole.
(c) The Company will, and will cause its Subsidiaries and their
respective Representatives to, cease and cause to be terminated immediately all
existing discussions or negotiations with any Persons conducted on or before the
date hereof with respect to any Competing Transaction and shall request that all
confidential information previously furnished to any such third parties be
returned or destroyed promptly in accordance with confidentiality agreements
with such third parties.
4.7. COMMERCIALLY REASONABLE EFFORTS. Subject to the terms and
conditions of this Agreement, each party will use its commercially reasonable
efforts (except where a different efforts standard is specifically contemplated
by this Agreement, in which case such different standard shall apply) to take,
or cause to be taken, all actions and to do, or cause to be done, all things
necessary, proper or advisable under applicable Laws and Orders to consummate
the transactions contemplated by this Agreement.
4.8. REGULATORY MATTERS.
(a) Within thirty (30) Business Days after the date hereof or any
shorter period as required by applicable Law, (i) each of Parent and the Company
shall file any Notification and Report Forms and related material required to be
filed by it with the Federal Trade Commission and the Antitrust Division of the
United States Department of Justice under the HSR Act, and Parent and the
Company shall make any similar required competition law filings under any other
applicable Laws, including, but not limited to, Antitrust Laws with respect to
the transactions contemplated by this Agreement, and shall promptly make any
further filings pursuant thereto that may be necessary, proper or advisable,
(ii) each of Parent and the Company shall make any required filings under any
other Antitrust Laws, and (iii) the Company shall make an application with the
Department of State relating to the registration of the Company or any of its
Subsidiaries as an exporter under ITAR (which application shall request that any
related ITAR licenses relating to the Company or any of its Subsidiaries as an
exporter under ITAR be transferred to the Company or any of its Subsidiaries
upon the Closing Date).
(b) Within thirty (30) Business Days after the date hereof, each of
Parent and the Company shall make, and shall cause its Subsidiaries to make all
necessary filings with or applications to any Governmental Authority that has
issued a Company Permit with respect to the transactions contemplated by this
Agreement, including any necessary applications to the FCC for its consent to
the transactions contemplated hereby with respect to a Company Permit issued by
the FCC (the "FCC CONSENT APPLICATION").
(c) Parent and the Company shall, and shall cause their respective
Subsidiaries to: (i) use their reasonable best efforts to obtain prompt
termination of any waiting period under the HSR Act and prompt termination of
any other requisite waiting period under any applicable Law; (ii) cooperate and
consult with each other in connection with the making of all filings,
notifications and any other material actions pursuant to this Section 4.8,
including subject to Applicable Law, by permitting counsel for the other party
to review in advance, and consider in good faith the views of the other party in
connection with, any proposed written
-36-
communication to any Governmental Authority and by providing counsel for the
other party with copies of all filings and submissions made by such party and
all correspondence between such party (and its advisors) with any Governmental
Authority and any other information supplied by such party and such party's
Subsidiaries to a Governmental Authority or received from such a Governmental
Authority in connection with the transactions contemplated by this Agreement,
provided, however, that materials may be redacted (x) to remove references
concerning the valuation of Parent, the Company, or any of their Subsidiaries,
and (y) as necessary to comply with contractual arrangements, and (z) as
necessary to address reasonable privilege or confidentiality concerns; (iii)
furnish to the other parties such information and assistance as such parties
reasonably may request in connection with the preparation of any submissions to,
or agency proceedings by, any Governmental Authority; (iv) promptly inform the
other party of any communications with, and inquiries or requests for
information from, such Governmental Authorities in connection with the
transactions contemplated by the Agreement; (v) consult with the other parties
in advance of any meeting or conference, whether in-person or by telephone, with
any such Governmental Authority or, in connection with any proceeding by a
private party, with any other Person, and to the extent permitted by such
applicable Governmental Authority or other Person, give the other parties the
opportunity to attend and participate in such meetings and conferences; and (vi)
use their reasonable best efforts to cause the Regulatory Conditions to be
satisfied.
(d) Parent and the Company shall, and shall cause their respective
Subsidiaries to: (i) use reasonable best efforts to diligently prosecute all
applications with the FCC, including the FCC Consent Application, and all
similar foreign Governmental Authorities for consent to the transactions
contemplated herein and to provide all appropriate filings and notifications to
foreign Governmental Authorities, (ii) furnish to the other parties such
information and assistance as such parties reasonably may request in connection
with the preparation or prosecution of any such applications, and (iii) keep the
other parties promptly apprised of any communications with, and inquiries or
requests for information from, such Governmental Authorities with respect to the
transactions contemplated hereby.
(e) In furtherance and not in limitation of the covenants of the
parties contained in Sections 4.8(a), (b), (c), and (d), each party agrees to
use its reasonable best efforts to address such objections, if any, as may be
asserted with respect to the transactions contemplated hereby under the
Communications Act of 1934, as amended (the "COMMUNICATIONS ACT"), the
Telecommunications Act of 1996, any rule, regulation or policy of the FCC,
and/or any statute, rule, regulation or policy of any other Governmental
Authority with respect to the operation of channels of radio communication
and/or the provision of communications services (including the provision of
direct-to-home video programming) (collectively, "COMMUNICATIONS REGULATION") or
any applicable Antitrust Law. In connection with the foregoing, each party
agrees to cooperate and use its reasonable best efforts to assist in any defense
by any other party hereto of the transactions contemplated by this Agreement
before any Governmental Authority reviewing the transactions contemplated by
this Agreement, including by providing (as promptly as practicable) such
information as may be requested by such Governmental Authority or such
assistance as may be reasonably requested by the other party hereto in such
defense.
(f) If any objections are asserted with respect to the transactions
contemplated hereby, or if any Action is instituted by, any Governmental
Authority or any private party
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challenging any of the transactions contemplated hereby as violative of any
applicable Antitrust Law or Communications Regulation or other applicable Law,
the parties shall, subject to Section 4.9, use their reasonable best efforts to
resolve any such objections or challenge as such Governmental Authority or
private party may have to such transactions under such Law with the goal of
enabling the transactions contemplated by this Agreement to be consummated by
the Outside Date. In furtherance of the parties' obligations under this Section
4.8, Parent and, to the extent requested by Parent, the Company, shall be
required, with the goal of enabling the parties to consummate the transactions
contemplated by this Agreement by the Outside Date, to, propose, negotiate,
commit to and enter into one or more settlements, undertakings, conditions,
consent decrees, stipulations and other agreements with or to one or more
Governmental Authorities (each, a "SETTLEMENT") in connection with the
transactions contemplated by this Agreement (including obtaining the requisite
consent of such Governmental Authorities), including one or more Settlements
that require Parent or, to the extent requested by Parent, the Company, to
restructure the operations of, and sell or otherwise divest or dispose of its or
its Subsidiaries' assets up to the Limit; provided, however, that (A) the
Company shall not take any of the foregoing actions without the consent of
Parent, and (B) Parent shall not take any of the foregoing actions without the
consent of the Company if such actions would bind the Company to do something
irrespective of whether the Closing occurs. In addition, Parent and the Company
and their respective Subsidiaries shall, subject to the preceding and next
succeeding sentences, use their respective reasonable best efforts to seek to
lift, reverse or remove any temporary restraining order, preliminary or
permanent injunction or other order or decree that would otherwise give rise to
a failure of any Regulatory Conditions. Notwithstanding anything to the contrary
in this Agreement, Parent shall not be obligated to agree, and neither the
Company nor any Subsidiary shall or shall agree without Parent's consent, to
take any action or to accept any condition, restriction, obligation or
requirement with respect to Parent, the Company, their respective Subsidiaries
or their and their Subsidiaries' assets if such action, condition, restriction,
obligation or requirement would be, or result in, individually or in the
aggregate, a Burdensome Condition.
(g) Notwithstanding anything to the contrary herein, nothing in this
Section 4.8 shall (i) limit either the Company's or Parent's right to terminate
this Agreement pursuant to Section 6 hereof so long as such party has complied
in all material respects with its obligations under this Section 4.8, or (ii)
require any party to amend this Agreement or to waive or forbear from exercising
any of its rights or remedies hereunder or under this Agreement.
4.9. APPROACH TO PROCEEDINGS. Parent will determine strategy, lead all
proceedings and coordinate all activities with respect to seeking any actions,
consents, approvals or waivers of any Governmental Authority as contemplated
hereby, and the Company and its Subsidiaries will take such actions as
reasonably requested by Parent in connection with obtaining such consents,
approvals or waivers. Notwithstanding Parent's rights to lead all proceedings as
provided in the prior sentence, Parent shall not require the Company to, and the
Company shall not be required to, take any action with respect to satisfying the
Regulatory Conditions which would bind the Company or its Subsidiaries
irrespective of whether the Closing occurs. For all purposes and provisions of
this Agreement, each requirement for the Company and its Subsidiaries to use
"reasonable best efforts" in respect of matters relating to the satisfaction of
the Regulatory Conditions is subject to the following qualifications: (1) except
as requested or directed by Parent, the Company shall not be obligated to offer
or agree to
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restructure the operations of, or sell or otherwise divest or dispose of any of
its or its Subsidiaries' assets, and (2) with respect to matters as to which
Parent has made a specific request or provided specific direction to the
Company, the Company and its Subsidiaries shall be deemed to satisfy their
reasonable best efforts obligation if it or they use reasonable best efforts to
accomplish the actions so requested or directed. Notwithstanding any other
provision of this Agreement, Parent and Merger Sub may withdraw or cause the
withdrawal, or request the Company to withdraw, any filing, notice or consent
without being deemed to be in breach of any obligation hereunder so long as
action was taken in good faith with the goal of enabling the transactions
contemplated by this Agreement to be consummated by the Outside Date.
4.10. PUBLIC ANNOUNCEMENTS. So long as this Agreement is in effect,
Parent and the Company will consult with each other before issuing any press
release or making any SEC filing or other public statement with respect to this
Agreement or the transactions contemplated hereby and, except as may be required
by applicable Law or the rules of the New York Stock Exchange (in which case the
issuing party shall use its reasonable best efforts to consult with the other
party before issuing any such press release or making any such SEC filing or
public statement), will not issue any such press release or make any such SEC
filing or other public statement prior to such consultation and providing the
other party with a reasonable opportunity to comment thereon.
4.11. DIRECTOR AND OFFICER LIABILITY.
(a) From and after the Effective Time, the bylaws and certificate of
incorporation of the Company shall contain provisions no less favorable with
respect to indemnification of, and advancement of expenses to, present and
former directors and officers of the Company than those set forth in the
Company's bylaws and restated certificate of incorporation on the date of this
Agreement, which provisions shall not be amended, repealed or otherwise modified
for a period of six years from the Closing Date in any manner that would
adversely affect the rights thereunder of the individuals who at the Closing are
present or former directors or officers of the Company, unless such modification
is required after the Closing by applicable Law. Parent shall obtain as of the
Effective Time "tail" insurance policies with a claims period of at least six
years from the Closing with respect to the directors' and officers' liability
insurance in amount and scope at least as favorable as the coverage applicable
to the Company's director's and officers for the period from August 20, 2004
through the Closing Date; PROVIDED, if the premiums for such tail insurance
policies exceed 200% of the per annum rate of premium paid by the Company as of
the date hereof for such insurance, then Parent shall provide a policy with the
best coverage as shall then be available at 200% of such rate (which annual
premium is set forth on Section 4.11 of the Company Disclosure Schedule);
(b) Parent agrees that for six years after the Closing Date, it shall,
and shall cause the Company and its Subsidiaries to, indemnify each Person who
is now, or has been at any time prior to the date hereof, a director or officer
of the Company or of any of its Subsidiaries, and each of their successors and
assigns (individually an "INDEMNIFIED PARTY" and collectively the "INDEMNIFIED
PARTIES"), with respect to any claim, liability, loss, damage, judgment, fine,
penalty, amount paid in settlement or compromise, cost or expense (including
reasonable fees and expenses of legal counsel), against any Indemnified Party in
his or her capacity as a officer or director of the Company or its Subsidiaries,
whenever asserted or
-39-
claimed, based in whole or in part on, or arising in whole or in part out of,
any facts or circumstances occurring at or prior to the Effective Time whether
commenced, asserted or claimed before or after the Effective Time, including
liability arising under the Securities Act, the Exchange Act or any other Law
and including any liability arising out of or pertaining to the transactions
contemplated by this Agreement, in each case to the same extent as provided in
the Company's bylaws or restated certificate of incorporation or any other
applicable contract or agreement in effect on the date of this Agreement. In the
event of any claim, liability, loss, damage, judgment, fine, penalty, amount
paid in settlement or compromise, cost or expense described in the preceding
sentence, the Company shall pay the reasonable fees and expenses of counsel
selected by the Indemnified Parties promptly after statements are received in
advance of settlement, judgment or other resolution thereof to such Indemnified
Party upon request reimbursement of documented expenses reasonably incurred,
provided the applicable Indemnified Parties provide an undertaking to repay all
advanced expenses if it is finally judicially determined that such Indemnified
Parties are not entitled to indemnification.
(c) If Parent, the Surviving Corporation or any of its successors or
assigns (i) consolidates with or merges into any other Person and shall not be
the continuing or surviving corporation or entity of such consolidation or
merger, or (ii) transfers or conveys all or substantially all of its properties
and assets to any Person, then, and in each such case, to the extent necessary,
proper provision shall be made so that the successors and assigns of Parent or
the Surviving Corporation, as the case may be, shall assume the obligations set
forth in this Section 4.11.
(d) The rights of each Indemnified Parties under this Section 4.11
shall be in addition to any rights such Person may have under the certificate of
incorporation, bylaws or similar organizational documents of the Company or any
of its Subsidiaries, or under applicable Law or under any agreement of any
Indemnified Party with the Company or any of its Subsidiaries. These rights
shall survive consummation of the Merger and are intended to benefit, and shall
be enforceable by, each Indemnified Party.
4.12. EMPLOYEE BENEFITS. (a) For the period beginning on the Closing Date
and ending on the Continuation Date, Parent shall, or shall cause the Company
and its other Subsidiaries to, maintain (i) employee benefit plans, programs and
arrangements, salaries and bonus programs (excluding equity-based plans,
retention and bonus programs (except for the Company's Sales Incentive Plan
which will continue in accordance with its terms through the calendar quarter in
which the Closing Date occurs) and any provision under the PanAmSat Corporation
Retirement Savings Plan increasing the company matching contribution in effect
since the Company Balance Sheet Date) for employees of the Company or any
Subsidiary of the Company immediately prior to the Closing Date who continue to
be so employed after the Closing Date, which are, in the aggregate, no less
favorable than those provided pursuant to Company Plans (excluding equity-based
plans, retention and bonus programs (except for the Company's Sales Incentive
Plan which will continue in accordance with its terms through the calendar
quarter in which the Closing Date occurs) and any provision under the PanAmSat
Corporation Retirement Savings Plan increasing the company matching contribution
in effect since the Company Balance Sheet Date) as of immediately before the
Closing Date, (ii) employee benefit plans, programs and arrangements, salaries
and bonus programs that are triggered upon the termination of employment for
employees of the Company or any Subsidiary
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of the Company immediately prior to the Closing Date who continue to be so
employed after the Closing Date, which are, in the aggregate, no less favorable
than those provided pursuant to the Company Maintained Plans as of immediately
before the Closing Date and (iii) contribution levels and loan provisions under
the defined contribution plans of the Company and its Subsidiaries, in each
case, at levels which are no less favorable than those provided as of
immediately prior to the Closing Date. Notwithstanding anything in this Section
4.12 to the contrary, for the three-year period beginning on the Closing Date,
Parent shall, or shall cause the Company and its other Subsidiaries to, honor
the terms of the Company's 2005 Severance Pay Plan as it exists on the date
hereof, subject to the amendment of the Severance Plan described in Section
2.15(g) hereof (the "SEVERANCE PLAN"). Employees of the Company or its
Subsidiaries immediately prior to the Closing Date who continue to be so
employed after the Closing Date (a "COVERED COMPANY EMPLOYEE") shall be given
credit for all service with the Company or any of its Subsidiaries (and service
credited by the Company or any of its Subsidiaries) prior to the Closing Date
(to the extent recognized as service under corresponding Company Plans in effect
immediately before the Closing Date) for crediting service for purposes of
eligibility to participate, vesting and determination of level of benefits
(other than for level of benefits under any defined benefit pension plan, except
as would result in the duplication of benefits or under plans or programs which
do not provide for credit for prior service for employees of Parent generally),
under (i) all employee benefit plans, programs and arrangements maintained by or
contributed to by Parent and its Subsidiaries (including, after the Closing
Date, the Company) in which such Covered Company Employees become participants,
and (ii) severance plans for purposes of calculating the amount of each Covered
Company Employee's severance benefits. After the Closing Date, Parent and the
Company shall (i) waive all limitations as to preexisting conditions and waiting
periods with respect to participation and coverage requirements applicable to
the Covered Company Employees under any welfare benefit plans that such Covered
Company Employees may be eligible to participate in after the Closing Date, to
the extent such waivers are consistent with the welfare benefit plans in which
the Covered Company Employees participated immediately prior to the Closing
Date, and (ii) provide each Covered Company Employee with credit for any
co-payments and deductibles paid during the portion of the relevant plan year
prior to the Closing Date in which the Closing Date occurs in satisfying any
applicable deductible or out-of-pocket requirements under any welfare plans that
such Covered Company Employees are eligible to participate in after the Closing
Date. Without limiting the generality of the foregoing, after the Closing Date,
Parent shall cause the Company to honor (1) those employment, termination and
severance agreements, in each case, to which the Company or any of its
Subsidiaries is a party and (2) those incentive compensation plans maintained by
the Company or any of its Subsidiaries, all as set forth in Section 4.12 of the
Company Disclosure Schedule, subject in each case to the terms of such
agreements and plans, including such terms governing amendment and termination
thereof. Except as expressly provided in the immediately preceding sentence,
this Section 4.12 shall not require Parent to continue or cause the Company to
continue any specific Company Plan or continue the employment of employees.
Notwithstanding anything herein to the contrary, no Person (other than the
parties hereto) shall have any rights or remedies pursuant to this Section 4.12.
(b) For the calendar year in which the Closing occurs (the "CLOSING
YEAR") the Company shall pay an annual bonus (the "CLOSING YEAR BONUS"), based
upon the sum of the Pre-Closing Amount plus the Post-Closing Amount, to
employees who remain employed with the Company or any of its Subsidiaries
through the date on which bonuses are generally paid by
-41-
Parent to similarly situated employees of Parent and its Subsidiaries (pro rata
for any employee hired by the Company after January 1 of the Closing Year). The
Closing Year Bonus shall be comprised of (x) an amount prorated through the
Closing Date based upon performance through the Closing Date (the "PRE-CLOSING
DATE AMOUNT") and (y) an amount based upon performance from the Closing Date
through December 31 of the Closing Year (the "POST CLOSING DATE AMOUNT"), and
shall be earned separately for each such period based upon achievement of
applicable performance goals during such period. In determining the amount of
the bonuses to be earned for the Pre-Closing Date Amount, the Company shall set
annual bonus targets for officers and employees with respect to any calendar
year prior to the Closing Year in amounts and on terms and conditions and other
criteria in the ordinary course of business consistent with past practice, and
such targets shall be substantially comparable to and no more likely to be
achieved at the time they are established than the corresponding performance
targets established for the Company's 2005 Annual Incentive Plan, and the
Company shall provide for no greater target or maximum bonus (expressed as a
percentage of base salary) for each participant in the Annual Incentive Plan
than was provided for in 2005 (other than in connection with promotions or newly
hired employees, provided that such target or maximum bonus amounts shall be
established in a manner consistent with similarly situated employees). All
annual bonuses paid pursuant to this Section 4.12(b) shall be paid as of the
date on which Purchaser and its Subsidiaries pay annual bonuses to employees of
Purchaser and its Subsidiaries generally; provided that with respect to any
employee who is (i) terminated by Parent or the Company without Cause (as
defined in the Severance Plan) or (ii) terminates employment for Good Reason (as
defined in Appendix A to the Severance Plan), in either case, on or after the
Closing Date, any such employee shall be paid, on or reasonably promptly after
the date of such termination, the Pre-Closing Date Amount. Parent shall set
annual bonus targets for Covered Company Employees with respect to 2006 and/or
2007, as applicable, under an annual bonus plan of Parent or its Subsidiaries
(the "PARENT BONUS PLAN") in amounts and on terms and conditions and other
criteria in the ordinary course of business consistent with the past practice of
Parent and its Subsidiaries (taking into account the effect of this transaction)
provided to similarly situated employees of Parent and its Subsidiaries and no
less likely to be achieved than bonuses established for similarly situated
employees of Parent and its Subsidiaries.
4.13. COOPERATION WITH FINANCING AND DEBT REGISTRATIONS.
(a) The Company shall provide, and shall cause its Subsidiaries to,
and shall use commercially reasonable efforts to cause the respective officers,
employees and Representatives, including legal and accounting, of the Company
and its Subsidiaries to provide, all cooperation reasonably requested by Parent
in connection with the Debt Financing and the Parent Debt Registrations
(including in connection therewith the filing of the Company's Financial
Statements if required by the SEC as part of the applicable registration
statements), and shall (i) in the case of the Debt Financing, cause appropriate
officers and employees to be available on a customary basis (A) to meet with
prospective lenders and investors in presentations, meetings, road shows and due
diligence sessions, to assist with the preparation of disclosure documents in
connection therewith, and (B) to execute and deliver any pledge and security
documents, other definitive financing documents, and other certificates
(including solvency certificates), legal opinions or documents as may be
reasonably or customarily requested by the banks and lenders in connection with
the terms of the PanAmSat Debt Financing, (ii) take all necessary corporate
action to consummate the PanAmSat Debt Financing
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immediately prior to the Closing, and (iii) in the case of the Debt
Financing and the Parent Debt Registrations, use commercially reasonable efforts
to cause its independent accountants and counsel to provide assistance to
Parent, including providing consent, on a customary basis, to Parent to use
their audit reports relating to the Company and its Subsidiaries and, at the
cost of Parent, to provide any necessary "comfort letters" and to prepare and
deliver other customary opinions and other deliverables.
(b) Provided that Parent provides to the Company such information
concerning Parent and its Subsidiaries and the Debt Financing as the Company
reasonably requests or requires in connection with the following, the Company
shall use commercially reasonable efforts to cause the following to occur: not
later than 30 days before the Closing Date, the Administrative Agent (as defined
in the Commitment Letters) and Parent shall have received audited, in the case
of year end, and unaudited, in the case of interim (which have been reviewed by
the independent accountants for the Company as provided in Statement on Auditing
Standards No. 100), consolidated financial statements of the Company and its
consolidated Subsidiaries) and financial statements relating to completed or
probable acquisitions (including pro forma financial statements), in each case
required by and meeting the requirements of Regulation S-X that would apply to a
Form S-1 registration statement being filed by the Company on such date of
delivery under the Securities Act of 1933, as amended (the "REQUIRED FINANCIAL
INFORMATION"); PROVIDED THAT, if on any date during such 30-day period prior to
the Closing Date financial statements for a later period-end would be required
if the Company filed a registration statement on Form S-1 on such date, and the
Administrative Agent requests that such financial statement be provided, then
financial statements with such later period-end meeting the forgoing
requirements shall have also been received reasonably promptly following such
request, and in any event, prior to the Closing Date.
4.14. MERGER SUB. Parent will take all action necessary to cause
Merger Sub to perform its obligations under this Agreement and to consummate the
Merger on the terms and conditions set forth in this Agreement. Merger Sub shall
not engage in any business which is not in connection with the Merger or other
transactions contemplated hereby.
ARTICLE V
Conditions to the Merger
5.1. CONDITIONS TO THE OBLIGATIONS OF THE PARTIES. The respective
obligations of the Company, Merger Sub and Parent to consummate the Merger are
subject to the satisfaction (or if permitted by applicable Law waiver by each
party, including Parent, for whose benefit the applicable condition exists) on
or before the Effective Time of each of the following conditions:
(a) NO ORDER. No temporary restraining order, preliminary or permanent
injunction or other order or decree issued by a court of competent jurisdiction
located in the United States or in another jurisdiction outside of the United
States in which the Company or any of its Subsidiaries, or Parent or any of its
Subsidiaries, engage in business activities that prohibits the consummation of
the Merger shall have been issued and remain in effect, and no Law shall have
been enacted, issued, enforced, entered, or promulgated after the date of the
Agreement that
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prohibits or makes illegal the consummation of any of the transactions
contemplated by this Agreement ; provided, however, that this condition shall be
deemed to be satisfied for and may not be asserted by any party that has not
used or is not using its reasonable best efforts to seek to lift, reverse or
remove any temporary restraining order, preliminary or permanent injunction or
other order or decree that would otherwise give rise to a failure of this
condition; provided, further, that Parent may waive this condition on its own
behalf, or on behalf of the Company or Merger Sub, so long as such waiver would
not result in criminal or civil liability of any officer, director, employee,
shareholder, control person or affiliate of the Company or any of its
Subsidiaries other than the Company or any of its Subsidiaries.
(b) ANTITRUST LAWS. All waiting periods applicable to the consummation
of the transactions contemplated by this Agreement under the HSR Act shall have
expired or been terminated;
(c) COMPANY STOCKHOLDER APPROVAL. This Agreement and the transactions
contemplated hereby shall have been approved and adopted and the Merger shall
have been approved by the stockholders of the Company by the Company Requisite
Vote.
5.2. CONDITIONS TO THE OBLIGATIONS OF THE COMPANY. The obligations of
the Company to consummate the Merger are subject to the fulfillment, on or prior
to the Effective Time, of each of the following conditions (any or all of which
may be waived by the Company in whole or in part to the extent permitted by
applicable Law):
(a) REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB. The
representations and warranties of Parent and Merger Sub set forth in Article III
herein shall be true and correct as of the date of this Agreement and at and as
of the Effective Time as though made at and as of the Effective Time (except for
representations and warranties made as of a specified date, which need be true
and correct only as of the specified date), except to the extent that all of the
breaches of such representations and warranties collectively (without giving
effect to any materiality or similar qualification) have not had and would not
reasonably be expected to result in a material adverse impact on Parent's
ability to consummate the transactions contemplated by this Agreement;
(b) PERFORMANCE OF OBLIGATIONS OF PARENT AND MERGER SUB. Parent and
Merger Sub shall have performed in all material respects all of its obligations
hereunder to be performed by it on or prior to the Effective Time; and
(c) OFFICER'S CERTIFICATE FROM PARENT. Parent shall have furnished the
Company with a certificate dated the Closing Date signed on its behalf by its
Chief Executive Officer or the Chief Financial Officer to the effect that the
conditions set forth in Sections 5.2(a) and 5.2(b) have been satisfied.
5.3. CONDITIONS TO THE OBLIGATIONS OF PARENT AND MERGER SUB. The
obligations of Parent and Merger Sub to consummate the Merger are subject to the
fulfillment, at or prior to the Effective Time, of each of the following
conditions (any or all of which may be waived by Parent in whole or in part to
the extent permitted by applicable Law):
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(a) GOVERNMENTAL CONSENTS. (i) All waiting periods applicable to the
consummation of the transactions contemplated by this Agreement under the HSR
Act shall have expired or been terminated and all approvals thereunder shall
have been obtained and no Burdensome Condition shall have been imposed on
Parent, the Company or their respective Subsidiaries in connection with such
termination or approval, (ii) all of the Required Consents shall have been
obtained, and (iii) all other notices, reports, applications and other filings
required to be made prior to the Effective Time by the Company or Parent or any
of their respective Subsidiaries with, and all other consents, registrations,
approvals, permits, clearances and authorizations required to be obtained prior
to the Effective Time by the Company or Parent or any of their respective
Subsidiaries from, any Governmental Authority the failure to make or obtain
which, individually or in the aggregate, have, or would reasonably be expected
to have, a Company Material Adverse Effect or render illegal the consummation of
the Merger shall have been made or obtained, in the cases of clauses (ii) and
(iii) as a Final Order and without any Burdensome Condition having been imposed
on Parent, the Company or their respective Subsidiaries in connection therewith.
For purposes of this Agreement, "FINAL ORDER" means an action or decision that
has been granted as to which (A) no request for a stay or any similar request is
pending, no stay is in effect, the action or decision has not been vacated,
reversed, set aside, annulled or suspended and any deadline for filing such a
request that may be designated by statute or regulation has passed, (B) no
petition for rehearing or reconsideration or application for review is pending
and the time for the filings of any such petition or application has passed, (C)
no Governmental Authority has undertaken to reconsider the action on its own
motion and the time within which it may effect such reconsideration has passed
and (D) no appeal is pending (including other administrative or judicial review)
or in effect and any deadline for filing any such appeal that may be specified
by statute or rule has passed, which in any such case (A), (B), (C) or (D) is
reasonably likely to result in vacating, reversing, setting aside, annulling,
suspending or modifying such action or decision (in the case of any modification
in a manner that would impose any term, condition or consequence that would
reasonably be expected to result in a Burdensome Condition).
(b) ORDERS. No Governmental Authority shall have obtained, or shall
have instituted an action or proceeding seeking, an Order that does, or would
reasonably be expected to, impose a Burdensome Condition or otherwise have a
Company Material Adverse Effect or a material adverse effect on the business or
operations of Parent, the Company and their respective Subsidiaries taken as a
whole.
(c) DEBT FINANCING. Parent shall have received the funds committed for
the Debt Financing on the terms and conditions set forth in the Commitment
Letters (as modified by any changes the borrowers are required to accept
pursuant to the terms contained in any related agreement) or upon terms and
conditions which are equal or more favorable to Parent, and to the extent that
any such term or condition is not set forth in the Commitment Letters, upon
terms and conditions which are reasonable and customary.
(d) MATERIAL ADVERSE EFFECT. There shall not have occurred any change,
development, event, condition, occurrence or effect that, individually or in the
aggregate, would reasonably be expected to have a Company Material Adverse
Effect.
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(e) REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The representations
and warranties of the Company set forth in Article II herein shall be true and
correct as of the date of this Agreement and at and as of the Effective Time as
though made at and as of the Effective Time (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 other than Section 2.9(a)) have not had and
would not reasonably be expected to result in a Company Material Adverse Effect
or a material adverse impact on the Company's ability to consummate the
transactions contemplated by this Agreement; PROVIDED that notwithstanding the
preceding, the representations and warranties of the Company contained in
Sections 2.2(a), 2.2(b) (solely with respect to the Company's PanAmSat
Corporation subsidiary), 2.2(c), 2.3, 2.20, 2.21, and 2.22 shall be true and
correct in all material respects.
(f) PERFORMANCE OF OBLIGATIONS OF THE COMPANY. The Company shall have
performed in all material respects all of its obligations hereunder to be
performed by it at or prior to the Effective Time; and
(g) OFFICER'S CERTIFICATE FROM THE COMPANY. The Company shall have
furnished Parent with a certificate dated the Closing Date signed on its behalf
by its Chief Executive Officer or the Chief Financial Officer to the effect that
the conditions set forth in Sections 5.3(e) and 5.3(f) have been satisfied.
ARTICLE VI
Termination
6.1. TERMINATION. This Agreement may be terminated at any time prior
to the Closing, notwithstanding any approval of this Agreement by the
stockholders of the Company(except in the case of (c)(ii)):
(a) by mutual written consent duly authorized by the respective Boards
of Directors of the Company and Parent;
(b) by either the Company or Parent if:
(i) the transactions have not been consummated by the date that is 455
days from the date hereof (such date, or such date as extended as set forth
below, the "OUTSIDE DATE"); provided, however, that the right to terminate this
Agreement under this Section 6.1(b)(i) shall not be available to any party whose
failure to perform any material covenant or obligation under this Agreement has
been the cause of or resulted in the failure of the Closing to occur on or
before such date; provided, further, that any termination of this Agreement by
the Company pursuant to Section 6.1(c)(iii) made on the Outside Date shall be
deemed to have been delivered prior to Parent's exercise of this termination
right on the Outside Date;
(ii) (A) the FCC shall have denied or dismissed any FCC Consent
Application, or shall have designated any FCC Consent Application for hearing,
excepting any denials or designations with respect to any Company Permit issued
by the FCC that are immaterial to the assets or business of the Company and its
Subsidiaries taken as a whole; or (B)
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five (5) Business Days shall have elapsed following such time as any permanent
injunction or other similar order of a court of competent jurisdiction or other
competent Governmental Authority (other than the FCC), in each case located in
the United States, preventing the consummation of the transactions contemplated
by this Agreement shall have been entered (so long as such permanent injunction
or similar order is still in effect at the expiration of such five (5) Business
Day period), regardless of whether such order is appealable or has been appealed
and, prior to such termination, the parties shall have used reasonable best
efforts to resist, resolve or lift, as applicable, such injunction or other
similar order; or
(iii) the Company Requisite Vote shall not have been obtained at the
Company Stockholders' Meeting; or
(c) by the Company if:
(i) a breach by Parent of any representation, warranty, covenant or
agreement contained in this Agreement shall have occurred, which breach, in the
aggregate with all other such breaches, if any, would give rise to a failure of
the conditions set forth in Section 5.2(a) or Section 5.2(b) hereof and which is
not cured within 30 days (or, if earlier, the day prior to the Outside Date)
following written notice to the party committing such breach given reasonably
promptly after the Company becomes Aware of such breach;
(ii) prior to the Company Stockholders' Meeting, the Company intends
to enter into an agreement or arrangement contemplated by Section
4.6(a)(iii)(B), after having complied in all material respects with all of the
provisions of Section 4.6, including having complied with Section 4.6(a)(iii)(B)
in all respects; or
(iii) if either (A) all of the conditions set forth in Section 5.1 and
Section 5.3 (other than the condition set forth in Section 5.3(c)) (and, in the
case of the condition set forth in Section 5.3(g), either such condition has
been satisfied or the Company confirms to Parent in writing that it is willing
and able to deliver the certificate referred to in Section 5.3(g) as if the date
of purported termination under this Section were the Closing Date) are satisfied
on the Outside Date or the last day of the Marketing Period, and the condition
set forth in Section 5.3(c) are not satisfied on the Outside Date or the last
day of the Marketing Period; provided, however, that the Company may not
exercise this termination right in this clause (A) if either (1) the Company's
failure to comply in any material respect with its obligations under Section
4.13 caused or contributed materially to the failure of the condition set forth
in Section 5.3(c) to be satisfied or (2) Parent and its relevant financing
sources have not received all of the information, certificates, consents and
documents required by Section 4.13 (or requested in accordance with Section
4.13(a)(i)(B) by the lenders and bank in connection with the Debt Financing, in
the case of Section 4.13(a)(i)(B)) and this fact caused or contributed
materially to the failure of the condition set forth in Section 5.3(c) to be
satisfied; or (B) on the Outside Date, any of the Regulatory Conditions has not
been satisfied, but all of the conditions set forth in Sections 5.1 and 5.3
other than any of the Regulatory Conditions (without regard to whether the
condition set forth in Sections 5.3(c) has been satisfied or not), have been
satisfied (and, in the case of the condition set forth in Section 5.3(g), either
such condition has been satisfied or the Company confirms to Parent in writing
that it is willing and able to deliver the certificate referred to in Section
5.3(g) as if the date of purported termination under this Section were the
Closing Date);
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provided, however, that the Company may not exercise the termination rights in
this clause (B) if the Company's failure to comply in any material respect with
its obligations under Section 4.8 or 4.9 caused or contributed materially to the
failure of any Regulatory Condition or if any Regulatory Condition has not been
satisfied as a result of any Action brought by or on behalf of the Company or by
any stockholder of the Company in his, her or its status as a stockholder; or
(iv) if a final and non-appealable Order of the FCC has been issued
that would cause any Regulatory Condition to be incapable of being satisfied
UNLESS (I) there are actions Parent believes in good faith can be taken by it or
an Affiliate to satisfy the Regulatory Conditions and Parent within 30 Business
Days of such issuance initiates and thereafter continues to use its reasonable
best efforts to take such or other good faith actions to satisfy the Regulatory
Conditions or (II) the Marketing Period begins within 20 Business Days of such
issuance, or (III) the conditions set forth in Sections 5.1 and 5.3 (other than
the Regulatory Conditions and Section 5.3(c)) are not satisfied or are incapable
of being satisfied; or
(d) by Parent if:
(i) a breach by the Company of any representation, warranty, covenant
or agreement contained in this Agreement shall have occurred, which breach, in
the aggregate with all other such breaches, if any, would give rise to a failure
of the conditions set forth in Section 5.3(e) or Section 5.3(f) hereof and which
is not cured by the 30th day (or, if earlier, the day prior to the Outside Date)
following written notice to the party committing such breach given reasonably
promptly after the Parent becomes Aware of such breach;
(ii) upon (A) a Non-Recommendation Determination or (B) the Company's
Board of Directors (or any authorized committee thereof) shall approve or
recommend (or resolved to do so) a Superior Proposal; or
(iii) upon any breach by the Company of its obligations under Section
4.4 to call, give notice of, convene and hold the Stockholders' Meeting as
contemplated thereby.
(iv) a tender offer or exchange offer for 20% or more of the
outstanding shares of Company Common Stock is commenced (other than by Parent or
a Subsidiary thereof), or a Competing Transaction (including any revision
thereto) is otherwise publicly announced, and the Company's Board of Directors
recommends that the stockholders of the Company tender their shares in such
tender or exchange offer or otherwise fails to recommend that such stockholders
reject such tender offer or exchange offer, or such Competing Transaction (or
revision) as the case may be, within the 10 Business Day period specified in
Rule 14e-2(a) under the Exchange Act (or within 17 Business Days of such
announcement of such other Competing Transaction (or revision)); provided
however for purposes of this Section 6.1(d)(iv), the reference in the definition
of Competing Transaction to "10% or more" and a "material portion" shall be
deemed to be a reference to "20% or more."
6.2. NOTICE OF TERMINATION; EFFECT OF TERMINATION.
(a) NOTICE OF TERMINATION. The party desiring to terminate this
Agreement pursuant to Section 6.1 shall give written notice of such termination
to the other parties in
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accordance with Section 7.2, specifying the provision hereof pursuant to which
such termination is effected.
(b) EFFECT OF TERMINATION. If this Agreement is terminated pursuant to
Section 6.1, this Agreement shall become void and of no effect with no liability
on the part of any party hereto, except that (i) the agreements contained in
Section 4.5(a), this Section 6.2, Section 6.3, Article VII and the
Confidentiality Agreement shall survive the termination hereof and (ii) no such
termination shall relieve any party of any liability or damages resulting from
any breach by that party of this Agreement PROVIDED that any damages recoverable
hereunder shall be reduced by the amount of any Company Termination Fee or
Parent Termination Fee actually received by the aggrieved party pursuant to
Section 6.3.
6.3. EXPENSES; TERMINATION FEES.
(a) EXPENSES. Except as otherwise specified in this Section 6.3 or
agreed in writing by the parties, all fees, costs and expenses incurred in
connection with this Agreement and the transactions contemplated by this
Agreement shall be paid by the party incurring such fees, cost or expense
whether or not the transactions contemplated hereby are consummated.
(b) COMPANY TERMINATION FEE. If this Agreement is terminated:
(i) by Parent pursuant to Section 6.1(d)(i), and at or prior to such
time (A) a Competing Transaction involving the Company shall have been
commenced, publicly disclosed or communicated to the Board of Directors of the
Company (or any authorized committee thereof) and not abandoned, and (B) within
6 months of any such termination, the Company or any of its affiliates either
enters into a definitive agreement regarding a Competing Transaction, or
consummates a transaction that would constitute a Competing Transaction, then
the Company shall pay to Parent, or as otherwise directed by Parent, in cash by
wire transfer in immediately available funds to an account designated by Parent,
on the same day as the execution of a definitive agreement with respect to the
referenced Competing Transaction, the Company Termination Fee; provided that,
for purposes of this Section 6.3(b), the definition of Competing Transaction
shall be deemed revised so that the reference to "10% or more" and "a material
portion" therein shall each be deemed to be a reference to "more than 50%";
(ii) by Parent or the Company pursuant to Section 6.1(b)(iii), the
Company shall pay to Parent, or as otherwise directed by Parent, the Company
Termination Fee, in cash by wire transfer in immediately available funds to an
account designated by Parent, concurrently with and as a condition to such
termination in the event of a termination by the Company and no later than one
Business Day following such termination in the event of a termination by
Purchaser;
(iii) by the Company pursuant to Section 6.1(c)(ii), the Company shall
pay to Parent, or as otherwise directed by Parent, the Company Termination Fee
in cash by wire transfer in immediately available funds to an account designated
by Parent, concurrently with and as a condition to such termination; or
(iv) by Parent, pursuant to Section 6.1(d)(ii)(A), 6.1(d)(ii)(B),
6.1(d)(iii) or 6.1(d)(iv) then the Company shall pay to Parent, or as otherwise
directed by Parent, the
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Company Termination Fee, in cash by wire transfer in immediately available funds
to an account designated by Parent, no later than one (1) Business Day following
such termination.
(c) PARENT EXPENSES. In the event this Agreement is terminated under
any of the circumstances described in Section 6.3(b) (but with respect to
Section 6.3(b)(i), without regard to whether any of the circumstances described
in clause (B) thereof have occurred), the Company shall reimburse Parent and
Merger Sub for all their expenses incurred in connection with this Agreement and
the Merger promptly, but in no event later than the date of such termination;
provided, however, that the aggregate amount of such reimbursement shall not
exceed $5,000,000. All payments made pursuant to this Section 6.3(c) shall be
made by wire transfer of same day funds to an account designated by Parent.
(d) DEFINITION OF COMPANY TERMINATION FEE. For purposes of this
Agreement, "COMPANY TERMINATION FEE" shall mean, (i) $64,000,000 if, on or
before the 59th day following the date hereof, either (A) the Agreement is
terminated under circumstances in which a Company Termination Fee is or may
become payable or (B) the Company Requisite Vote is obtained or (ii) $96,000,000
in all other cases.
(e) PARENT TERMINATION FEE. Parent agrees that, (A) if the Company
shall terminate this Agreement pursuant to Section 6.1(c)(iii), (B) Parent shall
terminate this Agreement pursuant to Section 6.1(b)(ii) or (C) the Company shall
terminate this Agreement pursuant to Section 6.1(c)(iv), then in any of cases
(A), (B) or (C) Parent shall pay to the Company a fee of $250 million in
immediately available funds no later than ten Business Days after such
termination by the Company or Parent (a "PARENT TERMINATION FEE") unless with
respect to clause (B) or (C) only the Company's failure to comply in any
material respect with its obligations under Section 4.8 or 4.9 caused or
contributed materially to the failure of the condition set forth in Section
5.3(a)(i) to be satisfied or to the issuance of the Order referred to in Section
6.1(c)(iv), or (iii) any Regulatory Condition has not been satisfied as a result
of any Action brought by or on behalf of the Company or any stockholder of the
Company in his, her or its capacity as a stockholder.
(f) REMEDIES. Parent and the Company agree that the provisions
contained in this Section 6.3 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 6.3(b) and (e) of this Agreement are
uncertain and incapable of accurate calculation and that the amounts payable
pursuant to Section 6.3(b) and (e) hereof are reasonable forecasts of the actual
damages which may be incurred by the parties under such circumstances. The
amounts payable pursuant to Sections 6.3(b) and (e) hereof constitute liquidated
damages and not a penalty and shall be the sole monetary remedy in the event a
Company Termination Fee or a Parent Termination Fee is paid in connection with a
termination of this Agreement on the bases specified in Section 6.3 hereof,
except as provided in Section 6.2(b)(ii). The parties acknowledge that in no
event shall the Company be responsible for paying the Company Termination Fee
more than once nor shall Parent be responsible for paying the Parent Termination
Fee more than once.
ARTICLE VII
Miscellaneous
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7.1. CERTAIN DEFINITIONS. For purposes of this Agreement, the
following terms shall have the meanings specified in this Section 7.1:
(a) "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.
(b) "APPLICABLE INSURANCE AGREEMENTS" means (i) the rights of PanAmSat
Corporation to receive a Reflight, a Partial Failure Reflight, a Partial Failure
Refund, and/or the Elected Amount related to launch of Galaxy 15 in accordance
with the Agreement, dated 5/17/01, for the Launching into Geostationary Transfer
Orbit of PanAmSat Light Satellites, as amended (each such term as defined in
such Agreement); (ii) the Galaxy 15 Launch Only Policy; and (iii) the Galaxy 15
Post-Separation Policy."
(c) "AWARE" means awareness by the chief executive officer, chief
operating officer or general counsel of Parent or the Company, as the case may
be, that an event or change has occurred and that such event or change would
give rise to a breach of representation, warranty, covenant or agreement.
(d) "BURDENSOME CONDITION" means (i) any condition, obligation or
requirement, individually or in the aggregate, to agree to sell or divest the
operations of (A) any assets of the Company or its Subsidiaries or (B) any
assets of Parent or its Subsidiaries other than up to any three revenue
producing station-kept satellites from among the Parent satellites designated,
as of the date hereof, as "IA-___" ("IA SPECIFIED SATELLITES") (three IA
Specified Satellites being referred to as the "LIMIT"), or (ii) in the event
Parent offers to sell or divest its assets to the Limit, the imposition by a
Governmental Authority of any additional condition, restriction, obligation or
requirement with respect to Parent, the Company, their respective Subsidiaries
or their and their Subsidiaries' assets (other than customary transition service
arrangements in connection with the sale or divestiture of any satellites within
the Limit) shall be deemed to be a Burdensome Condition.
(e) "BUSINESS DAY" means any day that is not a Saturday, a Sunday or a
day on which the commercial banks are required or permitted by law to be closed
in the City of New York in the State of New York.
(f) "COMPANY CREDIT AGREEMENT" means that certain Amended and Restated
Credit Facility, dated as of August 20, 2004, as amended and restated as of
March 22, 2005, among PanAmSat Corporation, the several Lenders from time to
time party thereto and Citicorp USA, Inc. as Administrative Agent.
(g) "COMPANY INTELLECTUAL PROPERTY" means (i) all domestic, foreign,
registered and pending applications for patents, trademarks, service marks,
copyrights, trade names, domain names and all material licenses running to or
from the Company or any of its Significant Subsidiaries relating to the
Company's or any of its Significant Subsidiaries'
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businesses or owned by the Company or any of its Significant Subsidiaries, (ii)
all material common law trademarks, service marks, copyrights and copyrightable
works (including databases, software and Internet site content), trade names,
brand names and logos; and (iii) all trade secrets, inventions, formulae, data,
improvements know-how, confidential information, material computer programs
(including any source code and object code) documentation, engineering and
technical drawings, processes, methodologies, trade dress, and all other
proprietary technology utilized in or incidental to the businesses of the
Company and its Significant Subsidiaries and all common law rights relating to
the foregoing.
(h) "COMPANY MATERIAL ADVERSE EFFECT" means, when used with reference
to one or more events, changes, circumstances or effects, a material adverse
effect on the business, operations, assets, liabilities or financial condition
of the Company and its Subsidiaries taken as a whole, other than (i) events,
changes, circumstances or effects that arise out of or result from economic,
political or regulatory factors generally affecting the economy, financial
markets, industries or countries in which the Company or any of its Subsidiaries
operates (whether such change results from any outbreak of hostility, terrorist
activity, war or otherwise) (except to the extent such event, circumstance,
change or effect has had a disproportionate effect on the Company and its
Subsidiaries as compared to other persons in the fixed satellite industry) or
(ii) sales, divestitures or restrictions imposed by a Governmental Authority or
pursuant to Settlements with a Governmental Authority, in connection with the
approvals contemplated by Section 4.8; provided, however, that a failure upon
launch or failure to successfully complete in-orbit testing of the Company
Satellite known as "Galaxy-15", with respect to which the full amount of the
insurance proceeds payable under the Applicable Insurance Agreements have been
received, or are reasonably expected to be received within six months following
the Closing, shall not in and of itself be considered a Company Material Adverse
Effect, but shall be considered together with other events, changes,
circumstances or effects in determining whether there has been a Company
Material Adverse Effect. The preceding proviso shall not constitute a
presumption about how other failures of the Company satellites are treated under
this definition.
(i) "COMPANY MATERIAL CONTRACT" means:
(i) any "MATERIAL CONTRACTS" (as such term is defined in Item
601(b)(10) of Regulation S-K of the SEC, but excluding Company Plans) with
respect to the Company and its Subsidiaries;
(ii) indentures, credit agreements, security agreements, mortgages,
guarantees, promissory notes and Contracts relating to or evidencing
indebtedness for borrowed money of the Company or any of its Subsidiaries in
excess of $1,000,000;
(iii) any non-competition agreement or any other agreement or
obligation which limits or purports to limit in any material respect the manner
in which, or the localities in which, the business of the Company or any of its
Subsidiaries may be conducted;
(iv) any partnership, joint venture or other similar agreement to
which the Company or any of its Subsidiaries is a party relating to the
formation, creation, operation, management or control of any partnership or
joint venture which is material to the Company and its Subsidiaries, taken as a
whole or in which the Company owns more than a 15% voting or
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economic interest (other than any such voting or economic interests that had a
carrying value of less than $5,000,000 on the Company's consolidated balance
sheet as of June 30, 2005 unless pursuant to such Contract the Company and its
Subsidiaries have a future funding obligation reasonably likely to require
funding of $2,500,000 or more in the aggregate);
(v) any Contract which is reasonably likely to prohibit or materially
delay the consummation of the transactions contemplated by this Agreement;
(vi) any material Contract with any present director or executive
officer of the Company or of any of its Subsidiaries or any stockholder who owns
or controls 10% or more of the Company's voting stock;
(vii) any Contract to acquire, operate or launch any satellite (a
"CONSTRUCTION/LAUNCH CONTRACT");
(viii) any Customer Contract with any customer for which all such
Contracts have a contracted cash backlog of $25,000,000 or more (each such
customer, a "COMPANY MATERIAL CUSTOMER"); and
(ix) In-Bound Capacity Leases other than in respect of the business of
G-2; and
(x) each Applicable Insurance Agreement.
(j) "CONTINUATION DATE" means December 31, 2006 if the Closing Date
occurs on or before September 1, 2006 or June 30, 2007 if the Closing Date
occurs after September 1, 2006.
(k) "CONTRACT" means any agreement, contract, subcontract, lease,
binding understanding, indenture, note, option, warranty, purchase order,
license, sublicense, insurance policy, benefit plan or legally binding
commitment or undertaking of any nature, as in effect as of the date hereof or
as may hereinafter be in effect.
(l) "Controlled Affiliate" means any Person that is an affiliate of
and controlled by any of the Stockholders.
(m) "CORE SATELLITES" means the satellites listed on Schedule 7.1.
(n) "CUSTOMER CONTRACT" means any Contract for the lease, sale or
provision of satellite transponder capacity on any one or more of the Company
Satellites.
(o) "DEBT OFFER DOCUMENTS" means the offering material pursuant to
which the PanAmSat Debt Financing is offered to potential purchasers.
(p) "ENVIRONMENTAL LAWS" means any and all federal, state, local and
foreign Law (including common law), Order or any agreement with any Governmental
Authority or other third party, relating to human health and safety, the
environment or to pollutants,
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contaminants, wastes or chemicals or toxic, radioactive, ignitable, corrosive,
reactive or otherwise Hazardous Substances, wastes or materials.
(q) "ENVIRONMENTAL LIABILITIES" means any and all liabilities of or
relating to the Company or any of its Significant Subsidiaries of any kind
whatsoever, whether accrued, contingent, absolute, determined, determinable or
otherwise, which (i) arise under or relate to matters covered by Environmental
Laws and (ii) arise from actions occurring or conditions existing on or prior to
the Closing.
(r) "HAZARDOUS SUBSTANCES" means any pollutant, contaminant, waste or
chemical or any toxic, radioactive, corrosive, reactive or otherwise hazardous
substance, waste or material, or any substance having any constituent elements
displaying any of the foregoing characteristics, including petroleum, its
derivatives, by-products and other hydrocarbons, or any substance, waste or
material regulated under any Environmental Laws.
(s) "IN-BOUND CAPACITY LEASE" means any Contract by which the Company
or any of its Subsidiaries leases or otherwise obtains a satellite or
transponder capacity from any unrelated party.
(t) "INDEBTEDNESS" means (i) indebtedness for borrowed money, whether
secured or unsecured, (ii) obligations under conditional or installment sale or
other title retention Contracts relating to purchased property, (iii)
capitalized lease obligations and (iv) guarantees of any of the foregoing of
another person.
(u) "ITAR" means the International Traffic in Arms Regulations.
(v) "KNOW" or "KNOWLEDGE" means, with respect to any party, the actual
knowledge of such party's executive officers after due inquiry.
(w) "MARKETING PERIOD" shall mean the first period of 30 consecutive
Business Days after the date hereof throughout which (A) the Merger Sub shall
have the Required Financial Information, and (B) the conditions set forth in
Section 5.1 and Section 5.3 (other than the conditions set forth in Section
5.3(c) and Section 5.3(g)) shall be satisfied, provided, however, that if during
the Marketing Period an event occurs that causes Parent to reasonably believe
that the condition set forth in Section 5.3(d) may not have been satisfied,
Parent may extend the Marketing Period from time to time by no more than 30
Business Days per such occurrence; provided that the Marketing Period may not be
extended beyond the Outside Date.
(x) "PANAMSAT DEBT FINANCING" means that portion of the Debt Financing
to be consummated by PanAmSat or any of its Subsidiaries, in accordance with the
Commitment Letters.
(y) "PARENT DEBT REGISTRATIONS" means the registration by
Parent of senior discount notes issued by Parent in February 2005 and the
registration by a direct or indirect subsidiary of Parent of senior notes issued
by in January 2005, in each case pursuant to a registration statement filed with
the SEC.
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(z) "PERMITTED LIENS" means: (i) Liens for Taxes and general and
special assessments not in default and payable without penalty and interest or
which are being contested in good faith by appropriate proceedings, (ii) Liens
granted prior to the date hereof which secure debt incurred pursuant to the
Company Credit Agreement, (iii) mechanic's, materialman's, carrier's, repairer's
and other similar Liens arising or incurred in the ordinary course of business
consistent with past practice or that are not yet due and payable or that are
being contested in good faith, and (iv) other Liens which, individually or in
the aggregate, are not material in amount and would not reasonably be expected
to materially interfere with the Company's or any of its Subsidiaries' use and
enjoyment of an asset or property or with the conduct of the business of the
Company or its Subsidiaries.
(aa) "PERSON" means an individual, corporation, limited liability
company, partnership, association, trust, joint venture, association,
unincorporated organization, other entity or group (as defined in the Exchange
Act).
(bb) "PRO RATA DIVIDEND" means with respect to any fiscal quarter in
respect of which the Company has not declared a dividend on shares of Company
Common Stock (or has declared a dividend with a record date after the Effective
Time), the product of (i) the quotient of (a) the number of days elapsed from
the first day of such fiscal quarter until the Effective Time divided by (b) the
total number of days in such fiscal quarter and (ii) the Quarterly Dividend; for
the avoidance of doubt, the Merger Consideration shall not include any amount in
respect of the Pro Rata Dividend, if the Closing occurs in any fiscal quarter in
respect of which the Company has declared a dividend on shares of Company Common
Stock, nor shall it include Pro Rata Dividends with respect to more than one
fiscal quarter.
(cc) "PROXY STATEMENT" means the proxy or information statement
(including, without limitation a Schedule 13E-3 filing, if required to be filed
under the Exchange Act) and all amendments or supplements thereto, if any,
similarly filed and mailed with respect to the Company Stockholders' Meeting.
(dd) "REGULATORY CONDITIONS" means any of the conditions set forth in
Section 5.1(a), Section 5.1(b), Section 5.3(a) or Section 5.3(b).
(ee) "SIGNIFICANT CAPACITY CONTRACT" means any Contract for the lease,
sale or provision of satellite transponder capacity on any one or more of the
Company Satellites either (A) involving six or more transponders in the
aggregate or (b) having a term of seven years or more.
(ff) "SIGNIFICANT SUBSIDIARY" means a Subsidiary of a Person that
would constitute a "significant subsidiary" within the meaning of Rule 1-02(w)
of Regulation S-X of the Exchange Act, if such Rule were applicable to such
Person.
(gg) "SUBSIDIARY" means, when used with reference to any entity, any
corporation or other organization, whether incorporated or unincorporated, (i)
of which such party or any other Subsidiary of such party is a general or
managing partner or (ii) the outstanding voting securities or interests of
which, having by their terms ordinary voting power to elect a majority of the
Board of Directors or others performing similar functions with respect
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to such corporation or other organization, is directly or indirectly owned or
controlled by such entity or by any one or more of its Subsidiaries.
(hh) "TAX RETURN" means any report, return, document, declaration or
other filing required to be supplied to any Taxing Authority or jurisdiction
(foreign or domestic) with respect to Taxes.
(ii) "TAX SEPARATION AGREEMENT" means the Tax Separation Agreement by
and between The DirectTV Group, Inc. and PanAmSat Corporation dated as of April
20, 2004.
(jj) "TAXES" means any and all taxes, charges, fees, levies or other
assessments, including, without limitation, income, gross receipts, excise, real
or personal property, sales, withholding, social security, retirement,
unemployment, occupation, use, goods and services, service use, license, value
added, capital, net worth, payroll, profits, franchise, transfer and recording
taxes, fees and charges, and any other taxes, assessment or similar charges
imposed by any Taxing Authority and any interest or penalties or additional
amounts, if any, attributable to, or imposed upon, or with respect to, any such
taxes, charges, fees, levies or other assessments.
(kk) "TAXING AUTHORITY" means the Internal Revenue Service or any
other taxing authority, whether domestic or foreign, including any state,
county, local or foreign government or any subdivision or taxing agency thereof.
(ll) "TRANSACTION DOCUMENTS" means this Agreement, and each other
agreement, document, or instrument or certificate contemplated by this Agreement
or to be executed by a party hereto in connection with the consummation of the
transactions contemplated by this Agreement.
(mm) The following terms are defined in the Section of this Agreement
as set forth after each such term below:
Term Section/Preamble
---- ----------------
2004 Option Plan.......................................................1.17(a)
Affiliate.................................................................2.23
Actions...................................................................2.13
Agreement.............................................................Preamble
Bank Book...............................................................4.3(b)
Board of Directors.....................................................1.17(a)
Certificates...........................................................1.8 (b)
Certificate of Merger......................................................1.3
CFIUS......................................................................2.4
Closing ...................................................................1.2
Closing Date...............................................................1.2
Closing Year...........................................................4.12(b)
Closing Year Bonus.....................................................4.12(b)
Code......................................................................1.14
Commitment Letters.........................................................3.7
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Communications Act......................................................4.8(e)
Communications Regulation...............................................4.8(e)
Company...............................................................Preamble
Company Balance Sheet...................................................2.7(a)
Company Balance Date....................................................2.7(a)
Company Charter Documents...............................................2.1(c)
Company Common Stock......................................................1.7a
Company Disclosure Schedule................................Article II Preamble
Company Employees......................................................2.15(a)
Company Equity Plans...................................................1.17(a)
Company Financials......................................................2.7(a)
Company Maintained Plans...............................................2.15(a)
Company Non-U.S. Plans.................................................2.15(e)
Company Option.........................................................1.17(a)
Company Permits........................................................2.16(b)
Company Plans..........................................................2.15(a)
Company Recommendation..............................................4.4(a)(ii)
Company Required Consents..................................................2.4
Company Requisite Vote..................................................2.3(a)
Company Satellite......................................................2.17(a)
Company SEC Documents......................................................2.6
Company Stockholders' Meeting........................................4.4(a)(i)
Company Securities......................................................2.2(a)
Company Subsidiary Securities...........................................2.2(b)
Company Termination Fee.................................................6.3(d)
Competing Transaction................................................4.6(a)(i)
Confidentiality Agreement...............................................4.5(a)
Controlled Group.......................................................2.15(b)
Covered Company Employee...............................................4.12(b)
DC Plan................................................................1.17(d)
Debt Financing.............................................................3.7
Deferral Plan..........................................................1.17(e)
DSU....................................................................1.17(e)
DGCL.......................................................................1.1
Dissenting Holder.........................................................1.11
Dissenting Shares.........................................................1.11
Effective Time.............................................................1.3
ERISA..................................................................2.15(a)
Exchange Act...............................................................2.4
Exchange Agent..........................................................1.8(a)
Exchange Fund...........................................................1.8(a)
Exon-Xxxxxx Notice.........................................................2.4
FCC........................................................................2.4
FCC Consents...............................................................2.4
FCC Consent Application.................................................4.8(b)
Final Order.............................................................5.3(a)
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Formation Documents.....................................................3.1(b)
FSS.....................................................................4.2(a)
GAAP....................................................................2.7(a)
Governmental Authority.....................................................2.4
Health Status Report....................................................4.5(b)
HSR Act....................................................................2.4
Indemnified Party......................................................4.11(b)
Law........................................................................2.5
Liens......................................................................2.5
Merger.....................................................................1.1
Merger Consideration....................................................1.7(a)
Merger Sub............................................................Preamble
Non-Recommendation Determination........................................4.4(b)
Order......................................................................2.5
Outside Date.........................................................6.1(b)(i)
Owned Real Property....................................................2.11(a)
Parent................................................................Preamble
Parent Bonus...........................................................4.12(b)
Parent Required Consents...................................................3.3
Parent Termination Fee..................................................6.3(e)
Plans..................................................................2.15(a)
Post-Closing Date Amount...............................................4.12(b)
Pre-Closing Date Amount................................................4.12(b)
Preferred Stock.........................................................2.2(a)
Quarterly Dividend ..................................................4.1(b)(i)
Real Property..........................................................2.11(b)
Real Property Leases...................................................2.11(b)
Representatives.........................................................4.6(a)
Required Consents..........................................................3.3
Required Financial Information.........................................4.13(b)
Restricted Shares......................................................1.17(b)
Restoration Services....................................................4.1(c)
SEC........................................................................2.4
Securities Act.............................................................2.6
Settlement..............................................................4.8(f)
Severance Plan............................................................4.12
Stockholders..........................................................Recitals
Subsidiary Charter Documents............................................2.1(c)
Superior Proposal.......................................................4.6(b)
SERP...................................................................1.17(e)
Surviving Corporation......................................................1.1
7.2. NOTICES. All notices shall be in writing and shall be deemed
given (i) when delivered personally, (ii) when telecopied (which is confirmed)
or (iii) when 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):
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if to Parent or Merger Sub, to:
Intelsat (Bermuda), Ltd.
Xxxxxxxxx Xxxxx Xxxxx, 0xx Xxxxx
00 Xxxxx Xxx Xxxx
Xxxxxxxx XX 00
Xxxxxxx
Xxxxxxxxx: General Counsel
with a copy to Parent's counsel (which shall not constitute notice to
Parent):
Wachtell, Lipton, Xxxxx & Xxxx
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Silk
Xxxx Xxxxxx
if to the Company, to:
PanAmSat Holding Corporation
00 Xxxxxxxx Xxxx
Xxxxxx, Xxxxxxxxxxx 00000
Attention: General Counsel
with a copy to the Company's counsel (which shall not constitute
notice to the Company):
Xxxxxxx Xxxxxxx & Xxxxxxxx LLP
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxx X. Xxxxxxxx
7.3. ENTIRE AGREEMENT; THIRD PARTY BENEFICIARIES. This Agreement, each
Transaction Document (including the Company Disclosure Schedule and any exhibits
hereto), the other agreements referred to in this Agreement, each other
Transaction Document, the Confidentiality Agreement and the Voting Agreement (i)
constitute the entire agreement among the parties with respect to the subject
matter hereof and thereof and supersede all prior agreements, understandings and
negotiations, both written and oral, between the parties with respect to such
subject matter and (ii) are not intended to confer upon any Person (other than
the parties hereto or thereto) any rights or remedies hereunder, except only as
specifically provided, following the Closing, the Indemnified Parties pursuant
to Section 4.11.
7.4. NON-SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The
representations and warranties contained herein or in any schedule, instrument
or other writing delivered pursuant hereto shall not survive the Closing. The
covenants and agreements contained herein of the parties hereto shall survive
the Closing without limitation (except for those which by their terms
contemplate a shorter survival time).
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7.5. AMENDMENTS; NO WAIVERS. Any provision of this Agreement may be
amended or waived prior to the Closing if, and only if, such amendment or waiver
is in writing and signed, in the case of an amendment, by the Company and Parent
or, in the case of a waiver, by the party against whom the waiver is to be
effective; provided, however, that after the adoption of this Agreement by the
stockholders of the Company, there shall be made no amendment that by Law
requires further approval by the Company's stockholders without obtaining the
further approval of such stockholders. No failure or delay by any party in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof nor shall any single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.
The rights and remedies herein provided shall be cumulative and not exclusive of
any rights or remedies provided by Law.
7.6. SUCCESSORS AND ASSIGNS. The provisions of this Agreement shall be
binding upon, inure to the benefit of and be enforceable by the parties hereto
and their respective successors and assigns; provided, however, that no party
may assign, delegate or otherwise transfer any of its rights or obligations
under this Agreement without the prior written consent of the other parties
hereto and any attempted assignment without such consent shall be null and void
without effect; and provided, further, that Parent and Merger Sub may assign
their respective rights or obligations hereunder to Intelsat Holdings, Ltd.
and/or any direct or indirect wholly-owned Subsidiaries of Intelsat Holdings,
Ltd. (or any successor thereto) without the prior written consent of the parties
hereto.
7.7. GOVERNING LAW. This Agreement and any controversies arising with
respect hereto shall be construed in accordance with and governed by the law of
the State of Delaware (without regard to principles of conflict of laws that
would apply the law of another jurisdiction).
7.8. EXCLUSIVE JURISDICTION. Any suit, action or proceeding seeking to
enforce any provision of, or based on any matter arising out of or in connection
with, this Agreement or the transactions contemplated by this Agreement shall be
brought against any of the parties in any Federal court located in the State of
Delaware, or any Delaware state court, and each of the parties hereto hereby
consents to the exclusive jurisdiction of such courts (and of the appropriate
appellate courts therefrom) in any such suit, action or proceeding and waives
any objection to venue laid therein. Process in any such suit, action or
proceeding may be served on any party anywhere in the world, whether within or
outside the State of Delaware. 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 7.2, together with written notice of such service to such
party, shall be deemed effective service of process upon such party.
7.9. COUNTERPARTS; EFFECTIVENESS. This Agreement may be executed in
two or more counterparts, all of which shall be considered one and the same
agreement and shall become effective when one or more counterparts have been
signed by each of the parties and delivered to the other party, it being
understood that all parties need not sign the same counterpart.
7.10. INTERPRETATION.
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(a) For the purposes of this Agreement, (i) words in the singular
shall be held to include the plural and vice versa and words of one gender shall
be held to include the other gender as the context requires, (ii) the terms
"HEREOF", "HEREIN", and "HEREWITH" and words of similar import shall, unless
otherwise stated, be construed to refer to this Agreement as a whole (including
all of the Exhibits and Schedules hereto) and not to any particular provision of
this Agreement, and Article, Section, paragraph, Exhibit and Schedule references
are to the Articles, Sections, paragraphs, Exhibits and Schedules to this
Agreement unless otherwise specified, (iii) the word "INCLUDING" and words of
similar import when used in this Agreement shall mean "INCLUDING, WITHOUT
LIMITATION," unless the context otherwise requires or unless otherwise
specified, (iv) the word "OR" shall not be exclusive, (v) provisions shall
apply, when appropriate, to successive events and transactions, (vi) unless
otherwise specified, all references to any period of days shall be deemed to be
to the relevant number of calendar days, (vii) "DOLLARS" or "$" means United
States dollars and (viii) "CASH" means dollars in immediately available funds.
(b) 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.
(d) This Agreement is intended to be an agreement of merger within the
meaning of Section 251 of the DGCL.
7.11. DISCLOSURE SCHEDULES. Any matter disclosed in any section of the
Company Disclosure Schedule shall be deemed disclosed for all purposes and all
sections of the Company Disclosure Schedule, to the extent it is readily
apparent from a reading of the disclosure that such disclosure is applicable to
such other sections; provided, however, that such disclosure shall not be deemed
to be an admission or representation as to the materiality of the item so
disclosed.
7.12. SEVERABILITY. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction or other authority
to be invalid, void, unenforceable or against its regulatory policy, the
remainder of the terms, provisions, covenants and restrictions of this Agreement
shall remain in full force and effect and shall in no way be affected, impaired
or invalidated. Upon such determination that any term, provision, covenant or
restriction of this Agreement is invalid, void, unenforceable or against
regulatory policy, the parties hereto shall negotiate in good faith to modify
this Agreement so as to effect the original intent of the parties as closely as
possible in an acceptable manner to the end that the transactions contemplated
hereby are fulfilled to the extent possible.
7.13. SPECIFIC PERFORMANCE. The parties agree that the remedies at law
for any breach or threatened breach, including monetary damages, are inadequate
compensation for any loss and that any defense in any action for specific
performance that a remedy at law would be adequate is waived. Accordingly, in
the event of any actual or threatened default in, or breach of, any of the
terms, conditions and provisions of this Agreement, the party or parties who are
or
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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.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the day and year
first above written.
INTELSAT (BERMUDA), LTD.
By /s/ Xxxxxxx X. Xxxxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Assistant Secretary
PROTON ACQUISITION CORPORATION
By /s/ Xxxxxxx X. Xxxxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Vice President and Secretary
PANAMSAT HOLDING CORPORATION
By /s/ Xxxxx Xxxxxxxx
---------------------------------
Name: Xxxxx Xxxxxxxx
Title: Executive Vice President and
General Counsel
[Signature Page to Merger Agreement]
