Exhibit 2
VOTING AGREEMENT
VOTING AGREEMENT, dated as of April 20, 2004 (this "Agreement"),
between Constellation, LLC, a Delaware limited liability company ("Newco"), The
DIRECTV Group, Inc., a Delaware corporation ("Parent"), Xxxxxx Communications,
Inc., a Delaware corporation and a direct wholly owned subsidiary of Parent
("HCI"), Xxxxxx Communications Galaxy, Inc., a Delaware corporation and a direct
wholly owned subsidiary of Parent ("HCG") and Xxxxxx Communications Satellite
Services, Inc., a Delaware corporation and a direct wholly owned subsidiary of
Parent ("HCSS", and together with Parent, HCI, HCG and HCSS, the "Stockholders"
and individually each a "Stockholder").
WHEREAS, concurrently herewith, Newco, PanAmSat Corporation, a
Delaware corporation (the "Company"), Parent, and PAS Merger Sub, Inc., a
Delaware corporation (the "Merger Sub") and a wholly owned subsidiary of Parent,
are entering into a Transaction Agreement (the "Transaction Agreement";
capitalized terms used but not defined herein shall have the meanings set forth
in the Transaction Agreement), pursuant to which (and subject to the terms and
conditions set forth therein) Merger Sub will merge with and into the Company
(the "Merger") and each outstanding share of common stock, par value $0.01 per
share, of the Company (the "Company Common Stock"), other than the Company
Common Stock held by the Stockholders and certain other capital stock identified
therein, will be converted into the right to receive the Merger Consideration;
WHEREAS, (i) HCI is the beneficial owner 14,477,240 shares of Company
Common Stock, (ii) HCG is the beneficial owner of 88,605,390 shares of Company
Common Stock and (iii) HCSS is the beneficial owner of 17,729,545 shares of
Company Common Stock (collectively, the "Owned Shares"; the Owned Shares,
including any shares acquired by any Stockholder after the date hereof and prior
to the termination hereof, including without limitation, as a result of a stock
dividend, stock split, recapitalization, combination, reclassification,
exchange, or change of such shares, or upon exercise or conversion of any
securities, that are, from time to time, beneficially owned by any Stockholder
sometimes referred to herein as the "Shares" or otherwise, are collectively
referred to herein as the "Covered Shares");
WHEREAS, in order to induce Newco to enter into the Transaction
Agreement and to proceed with the transactions contemplated thereby, including
the Merger, Newco and the Stockholders are entering into this Agreement; and
WHEREAS, the Stockholders acknowledge that Newco is entering into the
Transaction Agreement in reliance on the representations, warranties, covenants
and other agreements of the Stockholders set forth in this Agreement and would
not enter into the Transaction Agreement if any Stockholder did not enter into
this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements herein contained, and intending to be legally bound
hereby, Newco and the Stockholders hereby agree as follows:
1. Agreement to Vote.
(a) Prior to the Termination Date (as defined herein), each
Stockholder agrees that it shall at any meeting of the stockholders of the
Company (whether annual or special and whether or not an adjourned or postponed
meeting), however called, (i) when a meeting is held, appear at such meeting or
otherwise cause the Covered Shares to be counted as present thereat for the
purpose of establishing a quorum, (ii) vote (or caused to be voted) in person or
by proxy all Covered Shares in favor of the Merger and any other matters
necessary for consummation of the Merger and (iii) vote (or cause to be voted)
all Covered Shares against (A) any proposal for any recapitalization,
reorganization, liquidation, merger, sale of assets or other business
combination between the Company and any other person (other than the Merger) and
(B) any other action that could reasonably be expected to impede, interfere
with, delay, postpone or adversely affect the Merger or any of the transactions
contemplated by the Transaction Agreement, any transactions contemplated by this
Agreement or any transaction that results in a breach in any material respect of
any covenant, representation or warranty or other obligation or agreement of the
Company or Parent under the Transaction Agreement.
(b) EACH STOCKHOLDER HEREBY GRANTS TO, AND APPOINTS, NEWCO, THE
SENIOR MEMBER OF NEWCO, AND ANY OTHER DESIGNEE OF NEWCO, EACH OF THEM
INDIVIDUALLY, SUCH STOCKHOLDER'S IRREVOCABLE (UNTIL THE TERMINATION DATE) PROXY
AND ATTORNEY-IN-FACT (WITH FULL POWER OF SUBSTITUTION) TO VOTE THE COVERED
SHARES AS INDICATED IN CLAUSE (a) OF THIS SECTION 1. EACH STOCKHOLDER INTENDS
THIS PROXY TO BE IRREVOCABLE (UNTIL THE TERMINATION DATE) AND COUPLED WITH AN
INTEREST AND WILL TAKE SUCH FURTHER ACTION OR EXECUTE SUCH OTHER INSTRUMENTS AS
MAY BE NECESSARY TO EFFECTUATE THE INTENT OF THIS PROXY AND HEREBY REVOKES ANY
PROXY PREVIOUSLY GRANTED BY SUCH STOCKHOLDER WITH RESPECT TO THE COVERED SHARES.
(c) Except as set forth in clause (a) of this Section 1, No
Stockholder shall be restricted from voting in favor of, against or abstaining
with respect to any matter presented to the stockholders of the Company. In
addition, nothing in this Agreement shall give Newco the right to vote any
Covered Shares at any meeting of the stockholders of the Company other than as
provided in this Section 1.
2. No Inconsistent Agreements. Each Stockholder hereby covenants and
agrees that, except as contemplated by this Agreement, it (a) has not entered
into, and shall not enter into at any time prior to the Termination Date, any
voting agreement or voting trust with respect to the Covered Shares and (b) has
not granted, and shall not grant at any time prior to the Termination Date, a
proxy or power of attorney with respect to the Covered Shares, in either case,
which is inconsistent with its obligations pursuant to this Agreement.
3. Termination. This Agreement shall terminate upon the earliest of
(a) the Effective Time, (b) the termination of the Transaction Agreement in
accordance with its terms and (c) written notice of termination of this
Agreement by Newco to the Stockholders (any such date shall be referred to
herein as the "Termination Date"); provided that Section 5(d) shall survive any
termination of this Agreement.
4. Representations and Warranties.
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(a) Representations and Warranties of Newco. Newco hereby represents
and warrants to the Stockholders as follows:
(i) Valid Existence. Newco is a limited liability company
duly organized, validly existing and in good standing under the laws
of the jurisdiction under which it is organized.
(ii) Authority Relative to This Agreement. Newco has all
necessary power and authority to execute and deliver this Agreement,
to perform its obligations hereunder and to consummate the
transactions contemplated hereby. The execution, delivery and
performance of this Agreement by Newco and the consummation by Newco
of the transactions contemplated hereby have been duly and validly
authorized by all necessary action, and no other proceedings on the
part of Newco are necessary to authorize this Agreement or to
consummate the transactions contemplated hereby. This Agreement has
been duly and validly authorized, executed and delivered by Newco
and, assuming due authorization, execution and delivery by the
Stockholders, constitutes a legal, valid and binding obligation of
Newco, enforceable against Newco 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).
(iii) No Conflicts. Except for the applicable requirements
of the Exchange Act (A) no filing with, and no permit, authorization,
consent or approval of, any state, federal or foreign governmental
authority is necessary on the part of Newco for the execution and
delivery of this Agreement by Newco and the consummation by Newco of
the transactions contemplated hereby and (B) neither the execution
and delivery of this Agreement by Newco nor the consummation by Newco
of the transactions contemplated hereby nor compliance by Newco with
any of the provisions hereof shall (1) conflict with or violate the
organizational documents of Newco, (2) result in any breach or
violation of, or constitute a default (or an event which, with notice
or lapse of time or both, would become a default) under, or give to
others any rights of termination, amendment, acceleration or
cancellation of, or result in the creation of a Lien on any property
or asset of Newco pursuant to, any Contract to which Newco is a party
or by which Newco or any property or asset of Newco is bound or
affected or (3) violate any order, writ, injunction, decree, statute,
rule or regulation applicable to Newco or any of its properties or
assets, except in the case of (2) or (3) for violations, breaches or
defaults that would not in the aggregate materially impair the
ability of Newco to perform its obligations hereunder.
(b) Representations and Warranties of Stockholder. Each of the
Stockholders, jointly and severally, hereby represents and warrants to Newco as
follows:
(i) Ownership of Securities. The Stockholders are owners
of record of the Covered Shares, free and clear of Liens and each of
HCI, HCG and HCSS has sole voting power and sole power of disposition
with respect to all of their respective Covered Shares, with no
restrictions, subject to applicable federal securities laws on their
rights of disposition pertaining thereto (other than as created by
this Agreement). As of the date hereof, the Stockholders do not own
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beneficially or of record any equity securities of the Company other
than the Owned Shares. No Stockholder has appointed or granted any
proxy which is still in effect with respect to the Covered Shares.
(ii) Existence, Power; Binding Agreement. Each Stockholder
is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation and
has all requisite power and authority to execute and deliver this
Agreement, to perform its obligations hereunder and to consummate the
transactions contemplated hereby. This Agreement has been duly and
validly executed and delivered by the Stockholders and, assuming due
authorization, execution and delivery by Newco, constitutes a legal,
valid and binding obligation of each of the Stockholders, enforceable
against such Stockholder 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).
(iii) No Conflicts. Except for the applicable requirements
of the Exchange Act (A) no filing with, and no permit, authorization,
consent or approval of, any state, federal or foreign governmental
authority is necessary on the part of any Stockholder for the
execution and delivery of this Agreement by the Stockholders and the
consummation by any Stockholder of the transactions contemplated
hereby and (B) neither the execution and delivery of this Agreement
by the Stockholders nor the consummation by any Stockholder of the
transactions contemplated hereby nor compliance by any Stockholder
with any of the provisions hereof shall (1) conflict with or violate,
any provision of the organizational documents of any Stockholder, (2)
result in any breach or violation of, or constitute a default (or an
event which, with notice or lapse of time or both, would become a
default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, or result in the creation
of a Lien on any property or asset of any Stockholder pursuant to,
any Contract to which a Stockholder is a party or by which a
Stockholder or any property or asset of a Stockholder is bound or
affected or (3) violate any order, writ, injunction, decree, statute,
rule or regulation applicable to a Stockholder or any of their
respective properties or assets, except in the case of (2) or (3) for
violations, breaches or defaults that would not in the aggregate
materially impair the ability of such Stockholder to perform its
obligations hereunder.
(iv) Litigation. There is no action, suit, investigation,
complaint or other proceeding pending against any Stockholder or, to
the knowledge of the Stockholders, any other Person or, to the
knowledge of the Stockholders, threatened against any Stockholder or
any other Person that restricts in any material respect or prohibits
(or, if successful, would restrict or prohibit) the exercise by any
party of its rights under this Agreement or the performance by any
party of its obligations under this Agreement.
5. Certain Covenants of Stockholder. Except in accordance with the
terms of this Agreement, each Stockholder, jointly and severally, hereby
covenants and agrees as follows:
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(a) No Solicitation. Each of the Stockholders agrees that, prior to
the Termination Date and except as permitted in the Transaction Agreement, it
shall not, nor shall it permit any of its Subsidiaries (other the Company and
its Subsidiaries) to, nor shall it authorize or permit any of its or such
Subsidiaries' 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 to the
Transaction Agreement) of any Competing Transaction;
(ii) participate in any discussions or negotiations
regarding, or furnish or disclose to any Person any information with
respect to or in furtherance of, or take any other action 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).
(b) Restriction on Transfer, Proxies and Non-Interference. Each
Stockholder hereby agrees, at any time to the Termination Date, and except as
contemplated hereby, not to (i) sell, transfer, pledge, encumber, assign or
otherwise dispose of, or enter into any contract, option or other arrangement or
understanding with respect to the sale, transfer, pledge, encumbrance,
assignment or other disposition of, any of the Covered Shares, (ii) grant any
proxies or powers of attorney, deposit any Covered Shares into a voting trust or
enter into a voting agreement with respect to any Covered Shares or (iii)
knowingly take any action that would make any representation or warranty of the
Stockholders contained herein untrue or incorrect or have the effect of
preventing or disabling Stockholder from performing its obligations under this
Agreement. Notwithstanding anything to contrary in this Section 5.1(b), each
Stockholder shall be permitted to sell, transfer or assign to another wholly
owned subsidiary of Parent ("Transferee"); provided, that, (i) such Transferee
shall agree in writing to become a party to, and be bound to the same extent as
the transferring Stockholder by the terms of, this Agreement; whereupon such
Transferee shall become a "Stockholder" hereunder and (ii) such transferring
Stockholder shall provide Newco with notice of the sale, transfer or assignment.
Any sale, transfer or assignment in violation of this provision shall be void.
(c) The Stockholders agree, at any time prior to the Termination
Date, to promptly notify Newco of the number of any new Shares acquired by the
Stockholders, if any, after the date hereof.
(d) Stockholder Profit.
(i) In the event that the Transaction Agreement shall have
been terminated and a Termination Fee is payable to Newco at any time
with respect to such termination, each Stockholder, as applicable,
shall pay to Newco an amount equal to 50% of such Stockholder's
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profit (determined in accordance with this Section 5(d)) (i) from the
sale or other disposition of any Shares pursuant to a Competing
Transaction so long as the agreement with respect to such Competing
Transaction is entered into or consummated within 12 months of the
termination of this Agreement, (ii) from the sale or other
disposition of any Shares (including a distribution to a
Stockholder's shareholders, unless such distributee agrees to be
bound by the terms of this Agreement) within 12 months of the
termination of this Agreement which is not pursuant to a bona fide
public offering of shares of Company Common Stock which sale or
disposition is made at such time as a Competing Transaction is
pending or (iii) from the sale of other disposition of any Shares
pursuant to a Superior Proposal so long as the agreement with respect
to such Superior Proposal is entered into or consummated within 12
months of the termination of this Agreement. Payment shall be made
promptly upon the receipt of the proceeds from such sale or other
disposition any only shall be required to be paid if completed.
(ii) For purposes of this Section 5(d), the profit of a
Stockholder shall equal (A) the aggregate consideration received by
such Stockholder for the Shares that were sold or disposed of,
valuing any non-cash consideration (including any residual interest
in the Company) at its fair market value on the date of such
consummation, less (B) $23.50 per Share multiplied by the number of
Shares sold or disposed of less (C) all out-of-pocket transaction
costs incurred by such Stockholder directly in connection with such
sale or disposition. With respect to a distribution of Shares to
shareholders of a Stockholder at such time as a Competing Transaction
is pending with respect to which a payment is required under Section
5(d)(i) above, the aggregate consideration shall be deemed to be the
amount proposed to be paid pursuant to the Competing Transaction.
(iii) For purposes of this Section 5(d), the fair market
value of any non-cash consideration consisting of:
(1) securities listed on a national securities
exchange or traded or quoted on the Nasdaq shall be equal
to the average closing price per share of such security as
reported on the composite trading system of such exchange
or by Nasdaq for the five trading days ending on the
trading day immediately prior to the date of the value
determination; and
(2) consideration which is other than cash or
securities of the form specified in clause (1) of this
Section 5(d)(iii) shall be determined by a nationally
recognized independent investment banking firm mutually
agreed upon by the Newco and Stockholder within ten
Business Days of the event requiring selection of such
banking firm; provided, however, that if the parties are
unable to agree within two Business Days after the date of
such event as to the investment banking firm, then the
parties shall each select one firm, and those firms shall
select a third investment banking firm, which third firm
shall make such determination; provided further, that the
fees and expenses of such investment banking firm shall be
borne equally by Newco and the Stockholders. The
determination of the investment-banking firm shall be
binding upon the parties.
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(iv) Any payment of profit under this Section 5(d) shall
be paid in the same proportion of cash and non-cash consideration as
the aggregate consideration received by the Stockholders in the
Competing Transaction or other disposition.
(v) The Stockholders shall not engage in any transaction
with respect to the Shares with the primary purpose of depriving
Newco of the intended benefits of this Agreement.
6. Further Assurances. From time to time, at the other party's
request and without further consideration, each party hereto shall take such
reasonable further action as may reasonably be necessary or desirable to
consummate and make effective the transactions contemplated by this Agreement.
7. Amendment; No Waiver. Any provision of this Agreement may be
amended or waived prior to the Effective Time if, and only if, such amendment or
waiver is in writing and signed, in the case of an amendment, by each
Stockholder and Newco or, in the case of a waiver, by the party against whom the
waiver is to be effective. 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.
8. Non-survival of Representations and Warranties. The respective
representations and warranties of the Stockholders and Newco contained herein
shall not survive the closing of the transactions contemplated hereby and by the
Transaction Agreement.
9. Notices. All notices shall be in writing and shall be deemed given
(i) when delivered personally, (ii) when telecopied (which is confirmed) or
(iii) one business day after dispatching by a nationally recognized overnight
courier service to the parties at the following addresses (or at such other
address for a party as shall be specified by like notice):
If to the Stockholders, to:
The DIRECTV Group, Inc.
X.X. Xxx 000
0000 X. Xxxxxxxx Xxxxxxx
Xx Xxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxx
Telecopy Number: (000) 000-0000
with a copy to Stockholders' counsel (which shall not constitute
notice to the Stockholders):
Weil, Gotshal & Xxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxxxx X. Xxxxx
Xxxxxxx X. Xxxxxxxx
Telecopy No.: (000) 000-0000
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If to Newco:
Constellation, LLC
c/o Kohlberg Kravis Xxxxxxx & Co. L.P.
0 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
with a copy to Newco's counsel (which shall not constitute notice to
the Stockholders):
Xxxxxxx Xxxxxxx & Xxxxxxxx LLP
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile No: (000) 000-0000
Attention: Xxxx X. Xxxxxxxx
Xxxxx X. Xxxxxx
10. 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.
11. Entire Agreement; Assignment. This Agreement and the Transaction
Agreement (a) constitutes the entire agreement among the parties hereto with
respect to the subject matter hereof and supersedes all prior agreements and
undertakings, both written and oral, among the parties hereto with respect to
the subject matter hereof and (b) shall not be assigned by operation of law or
otherwise, except (i) that Newco may assign all or any of its rights and
obligations hereunder to any direct or indirect wholly owned subsidiary of
Newco; provided, however, that no such assignment shall relieve the assigning
party of its obligations hereunder if such assignee does not perform such
obligations.
12. Legal Counsel. The Stockholders acknowledge that they have been
advised by, and have had the opportunity to consult with, their own attorney
prior to entering into this Agreement. The Stockholders acknowledge that the
attorneys for Newco represent Newco and do not represent the Stockholders in
connection with the Transaction Agreement, this Agreement or any of the
transactions contemplated hereby or thereby.
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13. Confidentiality. The Stockholders agree (i) to hold any
non-public information regarding this Agreement and the Merger in strict
confidence and (ii) except as required by law or legal process not to divulge
any such non-public information to any third person.
14. Specific Performance. The parties agree that the remedies at law
for any breach or threatened breach, including monetary damages, are inadequate
compensation for any loss and that any defense in any action for specific
performance that a remedy at law would be adequate is waived. Accordingly, in
the event of any actual or threatened default in, or breach of, any of the
terms, conditions and provisions of this Agreement, the party or parties who are
or are to be thereby aggrieved shall have the right to specific performance and
injunctive or other equitable relief of its rights under this Agreement, in
addition to any and all other rights and remedies at law or in equity, and all
such rights and remedies shall be cumulative. Any requirements for the securing
or posting of any bond with such remedy are waived.
15. 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).
16. 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 9 together with written notice of such service to such
party, shall be deemed effective service of process upon such party
17. Headings. The 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.
18. Counterparts. 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.
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IN WITNESS WHEREOF, Newco and the Stockholders have caused to be
executed or executed this Agreement as of the date first written above.
Constellation, LLC
/s/ Xxxxxxxxx Xxxxx
-----------------------------------------
Name: Xxxxxxxxx Xxxxx
Title: President
The DIRECTV Group, Inc.
/s/ Xxxxx X. Xxxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Executive Vice President and
Chief Financial Officer
Xxxxxx Communications, Inc.
/s/ Xxxxx X. Xxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Senior Vice President and
General Counsel
Xxxxxx Communications Galaxy, Inc.
/s/ Xxxxx X. Xxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Senior Vice President and
General Counsel
Xxxxxx Communications Satellite Services, Inc.
/s/ Xxxxx X. Xxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Senior Vice President and
General Counsel
