EXECUTION VERSION
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INVESTMENT AGREEMENT
between
ECHOSTAR COMMUNICATIONS CORPORATION
and
VIVENDI UNIVERSAL, S.A.
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Dated as of
December 14, 2001
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TABLE OF CONTENTS
Page
Article I
Purchase and Sale of Preferred Stock; Closing
Section 1.01. Purchase and Sale of the Preferred Stock......................2
Section 1.02. Closing.......................................................2
Section 1.03. Transactions To Be Effected at the Closing....................2
Article II
Representations and Warranties of the Company
Section 2.01. Organization and Standing.....................................3
Section 2.02. Capitalization; Valid Issuance; Registration Rights
Agreements..................................................3
Section 2.03. Authorization; Enforceability.................................4
Section 2.04. No Violation; Consents........................................5
Section 2.05. SEC Filings; Financial Statements.............................6
Section 2.06. Material Adverse Change.......................................6
Section 2.07. Private Offering..............................................7
Section 2.08. Litigation....................................................7
Section 2.09. Permits and Licenses..........................................7
Section 2.10. Merger Transaction Agreements; Board Matters..................7
Section 2.11. State Takeover Statutes.......................................8
Article III
Representations and Warranties of the Investor
Section 3.01. Organization and Standing.....................................8
Section 3.02. Authorization; Enforceability.................................8
Section 3.03. No Violation; Consents........................................9
Section 3.04. Private Offering.............................................10
Section 3.05. ▇▇▇▇▇▇ Reorganization........................................10
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Article IV
Covenants
Section 4.01. Certain Assurances...........................................10
Section 4.02. HSR Act Notification.........................................11
Section 4.03. Board Representation.........................................11
Section 4.04. Issuances of Class C Common Stock by the Surviving
Corporation; Equalization Payments.........................11
Section 4.05. Standstill...................................................13
Section 4.06. MFN Protection...............................................14
Section 4.07. Surviving Corporation Bound by Terms of Investment...........15
Section 4.08. Commercial Agreements........................................15
Section 4.09. Amendments to the Merger Agreement...........................15
Section 4.10. Reservation of Shares; Listing...............................15
Section 4.11. Legends......................................................16
Section 4.12. Filing of Certificate of Designations........................17
Section 4.13. Fees and Expenses............................................17
Section 4.14. Commercially Reasonable Efforts..............................17
Section 4.15. Publicity....................................................18
Section 4.16. Transfer of Non-Voting Preferred Stock.......................18
Section 4.17. Registration of Shares to be Issued in the Merger............19
Section 4.18. Market Sales During Company Offering.........................19
Section 4.19. Waiver of Appraisal Rights...................................19
Article V
Conditions Precedent
Section 5.01. Conditions to Each Party's Obligation........................20
Section 5.02. Conditions to Obligation of the Investor.....................20
Section 5.03. Conditions to Obligation of the Company......................22
Section 5.04. Frustration of Closing Conditions............................23
Section 5.05. Effect of Certain Waivers of Closing Conditions..............23
Article VI
Termination, Amendment and Waiver
Section 6.01. Termination..................................................23
Section 6.02. Effect of Termination........................................24
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Article VII
General Provisions
Section 7.01. Assignment; Successors.......................................24
Section 7.02. No Third-Party Beneficiaries.................................25
Section 7.03. Notices......................................................25
Section 7.04. Interpretation; Exhibits and Schedules; Certain
Definitions................................................26
Section 7.05. Counterparts.................................................27
Section 7.06. Entire Agreement.............................................27
Section 7.07. Severability.................................................27
Section 7.08. Consent to Jurisdiction......................................27
Section 7.09. Governing Law................................................28
Section 7.10. Waiver of Jury Trial.........................................28
Section 7.11. Amendments and Waivers.......................................28
Section 7.12. Specific Performance.........................................28
Section 7.13. Survival of Representations and Warranties...................28
INVESTMENT AGREEMENT (this "Agreement") dated as of December 14, 2001,
between ECHOSTAR COMMUNICATIONS CORPORATION, a Nevada corporation (the
"Company"), and VIVENDI UNIVERSAL, S.A., a societe anonyme organized under the
laws of France (the "the Investor").
WHEREAS the Investor desires to purchase from the Company, and the
Company desires to issue and sell to the Investor shares of Series D mandatorily
convertible participating preferred stock, par value $0.01 per share, of the
Company (the "Preferred Stock") having the rights, powers and preferences set
forth in the Certificate of Designations (as defined below);
WHEREAS, in connection with the purchase and sale of the Preferred
Stock and as a condition to the willingness of the Investor to enter into this
Agreement, the Company has agreed to issue to the Investor, upon consummation of
the transactions contemplated by this Agreement, contingent value rights (the
"CVRs") pursuant to the Contingent Value Rights Agreement in the form attached
hereto as Exhibit A, with such changes thereto as are mutually agreed by the
Investor and the Company (the "CVR Agreement"); and
WHEREAS, in connection with the purchase and sale of the Preferred
Stock and as a condition to the willingness of the Investor to enter into this
Agreement, the Company has agreed to enter into a Registration Rights Agreement
with the Investor in the form attached hereto as Exhibit B, with such changes
thereto as are mutually agreed by the Investor and the Company (the
"Registration Rights Agreement"), pursuant to which the Company will grant
certain rights to the Investor with respect to the registration under the
Securities Act of 1933, as amended, and the rules and regulations thereunder
(the "Securities Act") of shares of Class A Common Stock (as defined below)
issuable upon conversion of the Preferred Stock or settlement of the CVRs;
WHEREAS, concurrently with the execution and delivery of this
Agreement, the Investor and certain stockholders of the Company have entered
into a Stockholder Voting Agreement, dated as of December 14, 2001 (the
"Stockholder Voting Agreement"), concerning certain voting and governance
agreements relating to the Company and its capital stock to become effective
upon consummation of the transactions contemplated by this Agreement;
WHEREAS, concurrently with the purchase and sale of the Preferred Stock
pursuant to this Agreement and the issuance of the CVRs pursuant to the CVR
Agreement and as a condition to the willingness of the Investor to enter into
this Agreement, the Company and the Investor will enter into commercial
agreements relating to (i) new interactive services, (ii) linear channel
broadcast rights, (iii) set-top-box technology commitments and (iv) film
broadcast and exhibition arrangements, on the terms set forth in Annexes I
through IV, respectively (the "Commercial Agreements").
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NOW, THEREFORE, in consideration of the representations, warranties,
covenants and agreements contained in this Agreement and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows:
Article I
Purchase and Sale of Preferred Stock; Closing
Section 1.01 Purchase and Sale of the Preferred Stock. On the terms and
subject to the conditions set forth in this Agreement, at the Closing (as
defined below), the Company shall issue, sell and deliver to the Investor, and
the Investor shall purchase and accept from the Company, 5,760,479 shares of
Preferred Stock, for a purchase price, payable as set forth in Section 1.02,
equal to $260.395 per share (the "Purchase Price"). The purchase and sale of the
Preferred Stock pursuant to this Agreement and the issuance of the CVRs pursuant
to the CVR Agreement are collectively referred to in this Agreement as the
"Investment".
Section 1.02. Closing. Upon the terms and subject to the conditions
contained in this Agreement, the closing of the Investment (the "Closing") shall
take place at the offices of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇, at 10:00 a.m. on the fifth business day following the
satisfaction (or, to the extent permitted, waiver) of the conditions set forth
in Section 5.01 (other than any of such conditions that by their nature are to
be fulfilled at Closing, but subject to the fulfillment or waiver of such
conditions), or, if on such day any condition set forth in Section 5.02 or 5.03
has not been satisfied (or, to the extent permitted, waived by the party
entitled to the benefit thereof), as soon as practicable after all the
conditions set forth in Article V have been satisfied (or, to the extent
permitted, waived by the parties entitled to the benefits thereof) (other than
any of such conditions that by their nature are to be fulfilled at Closing, but
subject to the fulfillment or waiver of such conditions), or at such other
place, time and date as shall be agreed between the Company and the Investor.
The date on which the Closing occurs is referred to in this Agreement as the
"Closing Date".
Section 1.03. Transactions To Be Effected at the Closing. At the
Closing:
(a) the Company shall deliver to the Investor: (i) against payment of
the Purchase Price, a certificate or certificates representing in the aggregate
5,760,479 shares of Preferred Stock, which shall be in definitive form and
registered in the name of the Investor or such wholly owned subsidiary of the
Investor as shall be designated in writing by the Investor at least two business
days prior to the Closing Date; and (ii) each document and other instrument to
be delivered by or on behalf of the Company pursuant to Section 5.02; and
(b) the Investor shall deliver to the Company: (i) against delivery of
a certificate or certificates representing in the aggregate 5,760,479 shares of
Preferred Stock, payment, by wire transfer to a bank account designated in
writing by the Company (such designation to be made at least two business days
prior to the Closing Date), of immediately available funds in an
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amount equal to the Purchase Price and (ii) each document and other instrument
to be delivered by the Investor pursuant to Section 5.03.
Article II
Representations and Warranties of the Company
The Company hereby represents and warrants to the Investor, as of the
date of this Agreement, as follows:
Section 2.01. Organization and Standing. Each of the Company and the
Company's "significant subsidiaries" (as such term is defined in Rule 1-02 of
Regulation S-X promulgated under the Securities Exchange Act of 1934, as
amended, and the rules and regulations thereunder (the "Exchange Act")) is duly
incorporated, validly existing and in good standing under the laws of its state
or other jurisdiction of incorporation (to the extent such concepts or
equivalent concepts are recognized in such jurisdictions) and has all requisite
corporate power and authority to own and operate its properties and assets and
to carry on its business as it is now being conducted. Each of the Company and
the Company's "significant subsidiaries" (as so defined) is duly qualified to
transact business as a foreign corporation and is in good standing (to the
extent such concepts or equivalent concepts are recognized in such
jurisdictions) in each jurisdiction in which the character of the properties
owned or leased by it or the nature of its business makes such qualification
necessary, except for any such failures to so qualify or be in good standing
that would not, individually or in the aggregate, reasonably be expected
to have a material adverse effect on the business, assets, financial condition
or results of operations of the Company and its subsidiaries, taken as a whole
(a "Material Adverse Effect"). The Company has delivered to the Investor true
and complete copies of the Company's Articles of Incorporation, as amended to
date, and By-laws, as in effect on the date hereof.
Section 2.02. Capitalization; Valid Issuance; Registration Rights
Agreements. (a) As of the date of this Agreement, the Company's authorized
capital stock consists of (i) 1,600,000,000 shares of common stock, par value
$0.01 per share, of which (x) 800,000,000 shares have been designated Class A
Common Stock (the "Class A Common Stock"), (y) 400,000,000 shares have been
designated Class B Common Stock (the "Class B Common Stock") and (z) 400,000,000
shares have been designated Class C Common Stock (the "Class C Common Stock")
and (ii) 20,000,000 shares of preferred stock, par value $0.01 per share, of
which (x) 1,616,681 shares have been designated Series A Cumulative Preferred
Stock, par value $0.01 per share ("Series A Preferred Stock"), (y) 900,000
shares have been designated Series B Senior Redeemable Exchangeable Preferred
Stock, par value $0.01 per share ("Series B Preferred Stock") and (z) 2,300,000
shares have been designated Series C Cumulative Convertible Preferred Stock, par
value $0.01 per share ("Series C Preferred Stock"). As of December 7, 2001, (i)
240,948,821 shares of Class A Common Stock (excluding shares held by the Company
as treasury shares) were issued and outstanding, (ii) 238,435,208 shares of
Class B Common Stock (excluding shares held by the Company as treasury shares)
were issued and outstanding, (iii) no shares of Class C Common Stock were issued
and outstanding, (iv) no shares of Class A Common Stock or Class B Common Stock,
respectively, were held by the
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Company as treasury shares and (v) no shares of Series A Preferred Stock, Series
B Preferred Stock or Series C Preferred Stock were issued and outstanding. Prior
to the Closing, the Company will file a certificate with the Secretary of State
of the State of Nevada withdrawing the designation of the Series A Preferred
Stock, the Series B Preferred Stock and the Series C Preferred Stock.
(b) Each outstanding share of capital stock of the Company referred to
in paragraph (a) of this Section 2.02 is duly authorized and validly issued,
fully paid and nonassessable, and has not been issued in violation of any
preemptive or similar rights. Except as set forth in Section 2.02(b) of the
disclosure schedule, dated as of the date hereof and delivered by the Company to
the Investor on the date hereof (the "Company Disclosure Schedule"), the Company
has no authorized or outstanding bonds, debentures, notes or other obligations
or securities, the holders of which have the right to vote with the stockholders
of the Company on any matter.
(c) As of the Closing Date, each share of Preferred Stock to be issued
to the Investor will be duly authorized and validly issued, fully paid and
nonassessable, and will not have been issued in violation of any preemptive or
similar rights.
(d) The shares of Class A Common Stock issuable upon the conversion of
the Preferred Stock and issuable upon the settlement of the CVRs have been, and
at all times prior to such conversion or settlement will be, duly authorized and
adequately reserved in contemplation of such issuance or settlement. As of the
date of its issuance, each share of Class A Common Stock issuable upon
conversion of the Preferred Stock or upon settlement of the CVRs or an
Equalization Payment (as defined below), as applicable, will have been validly
issued and will be fully paid and nonassessable, and will not have been issued
in violation of any preemptive or similar rights.
(e) The Company has provided the Investor with true and complete copies
of all agreements in effect on the date of this Agreement pursuant to which the
Company has agreed to register any of its securities under the Securities Act.
Section 2.03. Authorization; Enforceability. The Company has all
requisite corporate power and authority to execute, deliver and perform its
obligations under this Agreement and under each of the CVR Agreement, the
Registration Rights Agreement and the Certificate of Designations (this
Agreement and each such other agreement or document, together with the
Stockholder Voting Agreement, collectively, the "Investment Transaction
Documents"), and has taken all corporate action necessary to authorize the
execution, delivery and performance by it of each Investment Transaction
Document to which it is, or will be, a party, and to consummate the Investment
and the other transactions contemplated hereby and thereby. No other corporate
or stockholder proceeding on the part of the Company is necessary for such
authorization, execution, delivery and consummation. The Company has duly
executed and delivered this Agreement and, at the Closing, the Company will have
duly executed and delivered each of the other Investment Transaction Documents
to be executed and delivered by it at or prior to Closing. This Agreement
constitutes, and each of the other Investment Transaction Documents to which the
Company is, or will be, a party, when executed and delivered by the
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Company, will constitute, assuming the due authorization, execution and delivery
by the Investor of this Agreement and the other Investment Transaction Documents
to which it is, or will, be a party, a legal, valid and binding obligation of
the Company, each enforceable against the Company in accordance with its terms.
Section 2.04. No Violation; Consents. (a) Subject to the governmental
filings and other matters referred to in Section 2.04(b), the execution,
delivery and performance by the Company of this Agreement and each of the other
Investment Transaction Documents to which it is, or will be, a party and the
consummation by the Company of the Investment and the other transactions
contemplated hereby and thereby do not and will not contravene (i) any
applicable foreign, federal or state statute, rule, regulation, order, writ,
decree, injunction or judgment or (ii) any applicable stock exchange or trading
market rule or listing requirement, except for any such contravention that would
not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. The execution, delivery and performance by the Company of this
Agreement and each of the other Investment Transaction Documents to which it is,
or will be, a party and the consummation of the Investment and the other
transactions contemplated hereby and thereby (i) will not conflict with or
violate any provision of the Articles of Incorporation or By-laws or other
governing documents of the Company and (ii) except as set forth in Section
2.04(a) of the Company Disclosure Schedule, will not (A) violate, result in a
breach of or constitute (with or without due notice or lapse of time or both) a
default (or give rise to any right of termination, cancelation or acceleration)
under any contract, lease, loan agreement, mortgage, security agreement, trust
indenture, note, bond or other agreement or instrument (collectively,
"Contract") to which the Company is a party or by which the Company is bound or
to which any of its assets is subject, or (B) result in the creation or
imposition of any mortgage, pledge, lien, security interest, claim, restriction,
charge or encumbrance of any kind (collectively, "Lien") upon any of the assets
of the Company, except for any such violations, breaches, defaults or Liens that
would not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.
(b) Except for (i) the filings by the Company, if any, required by the
▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as amended, and the rules
and regulations thereunder (the "HSR Act") and any similar laws of foreign
jurisdictions, (ii) applicable filings, if any, required by applicable federal,
state or foreign securities laws, (iii) the filing of the Certificate of
Designations with the Secretary of State of the State of Nevada and (iv) any
required approvals of the Federal Communications Commission or any successor
agency, in each case, which shall be made (or are not required to be made) on or
prior to the Closing Date, no consent, authorization or order of, or filing or
registration with, any foreign, federal, state or local court or governmental or
regulatory agency or authority or applicable stock exchange or trading market
(collectively, "Governmental Authority") or other person is required to be
obtained or made by the Company for the execution, delivery and performance of
this Agreement or any of the other Investment Transaction Documents to which it
is, or will be, a party or the consummation by the Company of the Investment or
the other transactions contemplated hereby or thereby, except where the failure
to obtain such consents, authorizations or orders, or make such filings or
registrations, would not, individually or in the aggregate, reasonably be
expected
6
to have a Material Adverse Effect or a material adverse effect on the ability of
the Company to consummate the transactions contemplated hereby or thereby.
Section 2.05. SEC Filings; Financial Statements. (a) The Company and
each subsidiary of the Company that is required to file documents with the
Securities and Exchange Commission (the "SEC") has filed all reports, schedules,
forms, statements and other documents required to be filed with the SEC since
January 1, 2000 (the "SEC Documents"). As of the respective dates of their
filing with the SEC (or as amended or supplemented prior to the date hereof),
the SEC Documents complied as to form in all material respects with the
applicable provisions of the Securities Act and the Exchange Act, as the case
may be, and did not 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 made therein, in light of the circumstances under which they
were made, not misleading.
(b) The consolidated financial statements of the Company included in
the SEC Documents comply as to form in all material respects with applicable
accounting requirements and the published rules and regulations of the SEC with
respect thereto, were prepared in accordance with generally accepted accounting
principles (except as may be indicated in the notes thereto and except, in the
case of unaudited statements, as permitted by Form 10-Q of the SEC) applied on a
consistent basis during the periods involved (except as may be indicated in the
notes thereto) and fairly present the consolidated financial position of the
Company and its consolidated subsidiaries as of the dates thereof and the
consolidated results of their operations, cash flows and changes in
stockholders' equity for the respective periods then ended (subject, in the case
of the unaudited statements, to normal year-end audit adjustments and lack of
footnote disclosure). Except (i) for liabilities or obligations incurred since
September 30, 2001 in the ordinary course of business, (ii) for liabilities or
obligations under the EchoStar Transaction Agreements (as such term is defined
in the Agreement and Plan of Merger dated as of October 28, 2001, by and between
the Company and ▇▇▇▇▇▇ Electronics Corporation, a Delaware corporation
("▇▇▇▇▇▇"), as amended as of the date of this Agreement (as it may be amended
from time to time (but without prejudice to the condition to Closing set forth
in Section 5.02(e)), the "Merger Agreement")) and the exhibits, schedules and
annexes thereto that have been publicly filed or true and complete copies of
which the Company has provided to the Investor prior to the date of this
Agreement, (iii) as set forth in Section 2.05(b) of the Company Disclosure
Schedule, (iv) for liabilities or obligations under the Merger Commitment Letter
(as such term is defined in the Merger Agreement) or (v) as disclosed, provided
for or reserved against in the SEC Documents filed prior to the date of this
Agreement (as such documents have been amended or supplemented prior to the date
of this Agreement, the "Filed SEC Documents"), the Company does not have any
liabilities or obligations of any nature (whether accrued, absolute, contingent,
unasserted or otherwise) that, individually or in the aggregate, would
reasonably be expected to have a Material Adverse Effect.
Section 2.06. Material Adverse Change. Except as disclosed in the Filed
SEC Documents or in any public disclosure made by the Company or any of its
subsidiaries after September 30, 2001 and prior to the date of this Agreement,
each of which public disclosures is set forth in Section 2.06 of the Company
Disclosure Schedule (the "Prior Public Disclosures") or
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as otherwise set forth in Section 2.06 of the Company Disclosure Schedule, since
September 30, 2001, there has not been any event, change, occurrence or
development of a state of circumstances or facts that, individually or in the
aggregate, has had, or would reasonably be expected to have (i) a Material
Adverse Effect or (ii) a material adverse effect on the ability of the Company
to perform its obligations under this Agreement or any of the other Investment
Transaction Documents.
Section 2.07. Private Offering. Subject to the truth and accuracy of
the Investor's representations and warranties set forth in Section 3.04, the
offer, sale and issuance by the Company of the Preferred Stock pursuant to this
Agreement and the issuance and delivery of the CVRs pursuant to the CVR
Agreement are exempt from the registration requirements of the Securities Act.
Section 2.08. Litigation. Except (i) as disclosed in the Filed SEC
Documents or the Prior Public Disclosures, (ii) as set forth in Section 2.08 of
the Company Disclosure Schedule or (iii) for any proceedings or investigations
relating to the transactions contemplated by the Merger Agreement, there are not
any (a) outstanding judgments against or affecting the Company or any of its
subsidiaries, (b) proceedings pending or, to the knowledge of the Company,
threatened against or affecting the Company or any of its subsidiaries or (c)
investigations by any Governmental Authority that are, to the knowledge of the
Company, pending or threatened against the Company or any of its subsidiaries
that (i) in any manner challenge or seek to prevent, enjoin, alter or materially
delay the Investment or (ii) if resolved adversely to the Company or any of its
subsidiaries, would, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect.
Section 2.09. Permits and Licenses. Except (i) as disclosed in the
Filed SEC Documents or the Prior Public Disclosures or (ii) as set forth in
Section 2.09 of the Company Disclosure Schedule, the Company and its
subsidiaries have obtained and maintain in effect all governmental permits,
licenses, franchises and authorizations required for the Company and its
subsidiaries to conduct their respective businesses as currently conducted,
except for those of which the failure to obtain or maintain in effect would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
Section 2.10. Merger Transaction Agreements; Board Matters. (a) The
board of directors of ▇▇▇▇▇▇ has taken all corporate action necessary to approve
the Investment and the other transactions contemplated by this Agreement in
accordance with the terms of the Merger Agreement (including the amendment to
the Merger Agreement referred to in Section 2.10(b)) and, if applicable, the
other Transaction Agreements (as such term is defined in the Implementation
Agreement dated as of October 28, 2001, by and among General Motors Corporation,
a Delaware corporation ("GM"), ▇▇▇▇▇▇ and the Company, as amended as of the date
of this Agreement (as it may be amended from time to time (but without prejudice
to the condition to Closing set forth in Section 5.2(e)), the "Implementation
Agreement")), and all consents of GM and ▇▇▇▇▇▇, and the lenders under the
Merger Commitment Letter (as such term is defined in the Merger Agreement),
necessary thereunder in connection therewith have been obtained. No other
consent of, or approval by, any person is required under the terms of the Merger
Agreement or the other Transaction Agreements in connection with the execution
and
8
delivery of this Agreement by the Company or for the consummation of the
Investment and the other transactions contemplated by this Agreement and the
other Investment Transaction Documents.
(b) The Merger Agreement has been amended to provide that (i)
▇▇▇▇-▇▇▇▇▇ ▇▇▇▇▇▇▇, chairman and chief executive officer of the Investor
("JMM"), will be a member of the board of directors of the Surviving Corporation
(as such term is defined in the Merger Agreement, with such term having the same
meaning when used in this Agreement, the "Surviving Corporation") in the merger
(the "Merger") provided for in Article I of the Merger Agreement, effective at
the closing of the Merger in accordance with Section 5.3(c) of the Merger
Agreement, with a term expiring at the second annual election of the directors
of the Surviving Corporation following consummation of the Merger, and (ii) the
by-laws of the Surviving Corporation shall provide that all members of the board
of directors of the Surviving Corporation, whether or not such director is a
member of the relevant committee, shall be entitled to receive notice of each
meeting of each committee of such board of directors and that each director
shall be entitled to attend each meeting of any such committee, whether or not
such director is a member of such committee, and each such amendment remains in
full force and effect. Effective on or prior to the date of this Agreement, the
board of directors of the Company has adopted a resolution to amend the By-laws
of the Company, effective as of the Closing Date, to provide members of the
board of directors of the Company with the notice and meeting attendance rights
described in clause (ii) of the immediately preceding sentence in connection
with committees of the board of directors of the Company, and such resolution
remains in full force and effect.
Section 2.11. State Takeover Statutes. The requirements of the
Acquisition of Controlling Interest Statute and the Combinations with Interested
Stockholders Statute under the Nevada Revised Statutes do not apply to this
Agreement and the other Investment Transaction Documents and the transactions
contemplated hereby and thereby.
Article III
Representations and Warranties of the Investor
The Investor hereby represents and warrants to the Company, as of the
date of this Agreement, as follows:
Section 3.01. Organization and Standing. The Investor is duly organized
and validly existing under the laws of France and has all requisite corporate
power and authority to carry on its business as presently conducted.
Section 3.02. Authorization; Enforceability. The Investor has all
requisite corporate power and authority to execute, deliver and perform its
obligations under this Agreement and under each other Investment Transaction
Document to which it is, or will be, a party, and has taken all corporate action
necessary to authorize the execution, delivery and performance by it of each of
such Investment Transaction Documents and to consummate the
9
Investment and the other transactions contemplated hereby and thereby. No other
corporate or stockholder proceeding on the part of the Investor is necessary for
such authorization, execution, delivery and consummation. The Investor has duly
executed and delivered this Agreement and, at the Closing, the Investor will
have duly executed and delivered each of the other Investment Transaction
Documents to be executed and delivered by it at or prior to Closing. This
Agreement constitutes, and each of the other Investment Transaction Documents to
which the Investor is, or will be, a party, when executed and delivered by the
Investor, will constitute, assuming the due authorization, execution and
delivery by the Company of this Agreement and the other Investment Transaction
Documents to which it is, or will be, a party, a legal, valid and binding
obligation of the Investor, each enforceable against the Investor in accordance
with its terms.
Section 3.03. No Violation; Consents. (a) Subject to the governmental
filings and other matters referred to in Section 3.03(b), the execution,
delivery and performance by the Investor of this Agreement and each of the other
Investment Transaction Documents to which it is, or will be, a party and the
consummation by Investor of the Investment and the other transactions
contemplated hereby and thereby do not and will not contravene (i) any
applicable foreign, federal or state statute, rule, regulation, order, writ,
decree, injunction or judgment or (ii) any applicable stock exchange or trading
market rule or listing requirement, except for any such contravention that would
not, individually or in the aggregate, reasonably be expected to have a material
adverse effect on the ability of the Investor to timely perform its obligations
under this Agreement or under any other Investment Transaction Document to which
it is, or will be, a party. The execution, delivery and performance by the
Investor of this Agreement and each of the other Investment Transaction
Documents to which it is, or will be, a party and the consummation of the
Investment and the other transactions contemplated hereby and thereby (i) will
not (A) violate, result in a breach of or constitute (with or without due notice
or lapse of time or both) a default (or give rise to any right of termination,
cancelation or acceleration) under any Contract to which the Investor is party
or by which the Investor is bound or to which any of its assets is subject, or
(B) result in the creation or imposition of any Lien upon any of the assets of
the Investor, except for any such violations, breaches, defaults or Liens that
would not, individually or in the aggregate, reasonably be expected to have a
material adverse effect on the ability of the Investor to timely perform its
obligations under this Agreement or under any other Investment Transaction
Document to which it is, or is specified to be, a party, and (ii) will not
conflict with or violate any provision of the Restated Corporate Statutes of the
Investor.
(b) Except for (i) the filings by the Investor, if any, required by the
HSR Act and any similar laws of foreign jurisdictions, (ii) applicable filings,
if any, with the SEC pursuant to the Exchange Act and (iii) any required
approvals of the Federal Communications Commission or any successor agency, in
each case, which shall be made (or are not required to be made) on or prior to
the Closing Date, no consent, authorization or order of, or filing or
registration with, any Governmental Authority or other person is required to be
obtained or made by the Investor for the execution, delivery and performance of
any of this Agreement or any of the other Investment Transaction Documents to
which it is, or will be, a party or the consummation by the Investor of the
Investment or the other transactions contemplated hereby or thereby, except
where the failure to obtain such consents, authorizations or orders, or make
such filings or
10
registrations, would not, individually or in the aggregate, reasonably be
expected to have a material adverse effect on the ability of the Investor to
timely perform its obligations under this Agreement or any other Investment
Transaction Document to which it is, or will be, a party.
Section 3.04. Private Offering. (a) The Preferred Stock purchased by
the Investor pursuant to this Agreement and the CVRs to be issued to the
Investor pursuant to the CVR Agreement, and any shares of Class A Common Stock
to be issued upon conversion or settlement thereof, are being acquired for
investment only and not with a view to any public distribution thereof, and the
Investor shall not offer to sell or otherwise dispose of the Class A Common
Stock so acquired by it (the Preferred Stock and the CVRs by their terms being
nontransferable) in violation of any of the registration requirements of the
Securities Act.
(b) The Investor understands that the offering and sale of the
Preferred Stock pursuant to this Agreement and the issuance and delivery of the
CVRs pursuant to the CVR Agreement are being effected in a transaction exempt
from registration under the Securities Act, and that such securities (and the
Class A Common Stock issuable upon conversion or settlement thereof) must be
held indefinitely unless a subsequent disposition thereof is registered under
the Securities Act or is exempt from such registration.
(c) The Investor has sufficient knowledge and experience in financial
and business matters so as to be capable of evaluating the merits and risks of
the Investment and is capable of bearing the economic risks of the Investment.
Section 3.05. ▇▇▇▇▇▇ Reorganization. The Investor acknowledges and
agrees that (i) no vote or consent of the Investor shall be required under any
Investment Transaction Document or applicable law in connection with the ▇▇▇▇▇▇
Reorganization (as such term is defined in the Implementation Agreement),
including any amendment and restatement of any Transaction Agreement (as defined
in the Implementation Agreement) in connection therewith, (ii) no
representation, warranty, covenant or agreement contained in any Investment
Transaction Document shall be deemed to have been breached as a result of the
▇▇▇▇▇▇ Reorganization (as so defined) (including any amendment and restatement
of any Transaction Agreement (as so defined) in connection therewith) and (iii)
no closing condition in any Investment Transaction Document shall be deemed not
to have been satisfied as a result of the ▇▇▇▇▇▇ Reorganization (as so defined)
(including any amendment and restatement of any Transaction Agreement (as so
defined) in connection therewith).
Article IV
Covenants
Section 4.01. Certain Assurances. Prior to the Closing, the Company and
the Investor shall not, and shall not permit any of their respective
subsidiaries to, take any action that would, to the knowledge of such party,
result in (i) any of the representations and warranties of such party set forth
in this Agreement that are qualified as to materiality or Material Adverse
Effect becoming untrue, (ii) any of such representations and warranties that are
not so qualified
11
becoming untrue in any material respect or (iii) any of the conditions set forth
in Article V not being satisfied. Each of the parties agrees to and shall use
its respective commercially reasonable efforts to cause the conditions for the
benefit of the other party set forth in Article V to be satisfied.
Section 4.02. HSR Act Notification. To the extent required by the HSR
Act, each of the Company and the Investor shall (a) use commercially reasonable
efforts to file or cause to be filed, within 10 business days after the date of
this Agreement, or as promptly thereafter as practicable, with the United States
Federal Trade Commission and the Antitrust Division of the United States
Department of Justice, all reports and other documents required to be filed by
it under the HSR Act concerning the transactions contemplated hereby and (b) use
commercially reasonable efforts (including after the Closing Date if Non-Voting
Preferred Stock (as defined below) is issued and delivered at the Closing in
accordance with the provisions of Section 6.01(a)(iii)) to promptly comply with
or cause to be complied with any requests by the United States Federal Trade
Commission or the Antitrust Division of the United States Department of Justice
for additional information concerning such transactions, in each case so that
the waiting period applicable to this Agreement and the transactions
contemplated hereby under the HSR Act shall expire as soon as practicable after
the execution and delivery of this Agreement. Each of the Company and the
Investor agrees to request, and to cooperate with the other in requesting, early
termination of any applicable waiting period under the HSR Act. In addition, to
the extent reasonably requested by the Company, the Investor will, and will
cause its subsidiaries to, cooperate with the Company in providing information
to, and responding to questions posed by, the United States Federal Trade
Commission or the Antitrust Division of the United States Department of Justice
in connection with the review of the Merger under the HSR Act.
Section 4.03. Board Representation. The Company shall take such action
as may be necessary to appoint JMM to the board of directors of the Company
effective as of the Closing Date. At all times prior to the Merger, for so long
as the Investor and its subsidiaries own any combination of shares of Preferred
Stock issued to the Investor and its subsidiaries on the Closing Date (the
"Initial Preferred Shares") and Class A Common Stock issued upon conversion of
any of the Initial Preferred Shares which, taken together, would represent, if
all Initial Preferred Shares were converted, at least 51% of the Class A Common
Stock issuable upon conversion of all the Initial Preferred Shares (as adjusted
for stock splits, combinations, subdivisions and similar changes to the
Company's capital structure) (the "51% Test"), the Company shall take all
appropriate action to cause JMM to be nominated for re-election as a member of
the board of directors of the Company in connection with each meeting of the
stockholders of the Company called for the election of directors coincident with
the expiration of his then current term, including by using its commercially
reasonable efforts to cause JMM to be so elected at each such meeting.
Section 4.04. Issuances of Class C Common Stock by the Surviving
Corporation; Equalization Payments. During the period commencing on the date on
which the Merger is consummated and ending on the earlier of (x) the date on
which the CVR Agreement is terminated in accordance with its terms (other than
pursuant to Section 1.06 thereof, in which
12
case ending on the date that is 30 months following the date on which the Merger
is consummated) and (y) the date that is 30 months following the date on which
the Merger is consummated, for so long as the Investor and its wholly owned
subsidiaries own that number of shares of Class A common stock, par value $0.01
per share, of the Surviving Corporation (the "New Class A Common Stock") as is
equal to at least 51% of the number of shares of Class A Common Stock issuable
upon conversion of all of the Initial Preferred Shares (as adjusted for the
Class A Exchange Ratio (as such term is defined in the Merger Agreement) and for
stock splits, combinations, subdivisions and similar changes to the capital
structure of the Company or the Surviving Corporation, as the case may be), the
Surviving Corporation shall not issue any shares of Class C common stock, par
value $0.01 per share, of the Surviving Corporation (the "New Class C Common
Stock"), or securities convertible into or exchangeable for, New Class C Common
Stock (other than (a) as permitted pursuant to, or contemplated by, the terms of
the Transaction Agreements (as such term is defined in the Implementation
Agreement) and the exhibits, schedules and annexes thereto as in effect as of
the date of this Agreement that have been publicly filed or true and complete
copies of which the Company has provided to the Investor prior to the date of
this Agreement, (b) in exchange for outstanding shares of Class B common stock
of the Surviving Corporation or (c) pursuant to any employee benefit,
compensation or bonus plan of the Surviving Corporation), unless on the date of
such issuance the Surviving Corporation pays to the Investor an amount (at the
election of the Surviving Corporation, in cash or in shares of New Class A
Common Stock) equal to the amount, if any, by which the opening market price of
the New Class C Common Stock on the date of such issuance exceeds the opening
market price of the New Class A Common Stock on the date of such issuance,
multiplied by the number of shares of New Class C Common Stock issued (or, in
the case of securities convertible into or exchangeable for Class C Common
Stock, the number of shares into which such securities are convertible or
exchangeable) (an "Equalization Payment"); provided, however, that upon receipt
of a certified copy of resolutions adopted by the board of directors of the
Surviving Corporation authorizing the issuance of shares of New Class C Common
Stock within a specified ten business day period, the Investor agrees not to
effect (and to cause its subsidiaries and controlled affiliates not to effect)
any sales, transfers or other dispositions of any securities of the Surviving
Corporation (including any hedging or derivative transactions involving any such
securities) during such ten business day period . The maximum number of shares
of New Class C Common Stock in respect of the issuance of which the Investor
will be entitled to receive an Equalization Payment shall be equal to the number
of shares of Class A Common Stock into which the Preferred Stock held by the
Investor and its wholly owned subsidiaries converts immediately prior to the
effective time of the Merger (as adjusted for the Class A Exchange Ratio (as
such term is defined in the Merger Agreement) upon consummation of the Merger),
and each Equalization Payment shall reduce on a one-for-one basis, based on the
number of shares of New Class C Common Stock in respect of which such
Equalization Payment was made, the number of shares of New Class C Common Stock
in respect of which the Investor will be entitled to receive future Equalization
Payments as a result of the issuance of additional shares of New Class C Common
Stock. Similarly, each sale of shares of New Class A Common Stock by the
Investor or any of its subsidiaries after the effective time of the Merger shall
reduce on a one-for-one basis, based on the number of shares of New Class A
Common Stock sold, the number of shares of New Class C Common Stock in
13
respect of which the Investor will be entitled to receive future Equalization
Payments as a result of the issuance of additional shares of New Class C Common
Stock.
Section 4.05. Standstill. (a) For so long as (i) (x) the Investor and
its affiliates own greater than 1% of the outstanding capital stock of the
Company or the Surviving Corporation, (y) a designee of the Investor is a member
of the board of directors of the Company or JMM is a member of the board of
directors of the Surviving Corporation or (z) the Commercial Agreement set forth
in Annex I remains in full force and effect and (ii) ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ ("CWE") is
the chief executive officer (or, subject to paragraph (b) of this Section 4.05,
a member of the board of directors) of the Company or the Surviving Corporation,
neither the Investor nor any of its subsidiaries or controlled affiliates will,
nor will the Investor or any of its subsidiaries on controlled affiliates
authorize any of their agents or representatives to, without the prior written
consent of the board of directors of the Company or the Surviving Corporation
(as the case may be), directly or indirectly:
(i) acquire or propose to acquire any securities (or "beneficial
ownership" (as such term is defined in Rule 13d-3 under the Exchange Act)
thereof) of the Company or the Surviving Corporation if as a result of such
acquisition the ownership interest of the Investor and its affiliates in
the Company or the Surviving Corporation (as the case may be) would be more
than 1% greater than the ownership interest of the Investor and its
affiliates in the Company on the Closing Date or in the Surviving
Corporation as of the effective time of the Merger, as the case may be;
(ii) initiate or propose to initiate any tender or exchange offer or
merger or other business combination involving the Company or any of its
subsidiaries or the Surviving Corporation or any of its subsidiaries;
(iii) participate in any "solicitation" of "proxies" (as such terms
are used in the proxy rules of the SEC) or consents to vote any voting
securities of the Company or the Surviving Corporation;
(iv) form, join or in any way participate in a "group" (as such term
is defined under the Exchange Act) with respect to any voting securities of
the Company or the Surviving Corporation (except as expressly contemplated
by the Stockholder Voting Agreement);
(v) submit any "shareholder proposal" (as such term is used in Rule
14a-8 under the Exchange Act) to the Company or the Surviving Corporation;
(vi) otherwise act, alone or in concert with others, to seek to
control or influence the management, board of directors or policies of the
Company or the Surviving Corporation (other than through a designee of the
Investor on any such board of directors acting in his capacity as a
director);
(vii) request the Company or the Surviving Corporation to amend any
provision of this paragraph (a) (including this clause); or
14
(viii) enter into any agreement (other than the Stockholder Voting
Agreement) with respect to any of the foregoing actions (the restrictions
contained in the foregoing clauses (i)-(viii) are referred to as the
"Standstill Obligations").
(b) The Standstill Obligations shall terminate and be of no effect if,
during any time that CWE is a member of the board of directors of the Company or
the Surviving Corporation (as the case may be) but is not the chief executive
officer of the Company or the Surviving Corporation (as the case may be):
(i) the Company or the Surviving Corporation enters into an agreement
relating to an Acquisition Proposal (as defined below); or
(ii) any person or group of persons commences (x) a tender offer or
exchange offer to acquire 50% or more of the outstanding voting securities
of the Company or the Surviving Corporation or (y) a "solicitation" of
"proxies" (as such terms are used in the proxy rules of the SEC) or
consents to vote any voting securities relating to the election of the
board of directors of the Company or the Surviving Corporation.
The term "Acquisition Proposal" means any (i) merger, consolidation, business
combination, binding share exchange or similar transaction involving the Company
or the Surviving Corporation that would result in holders of outstanding voting
capital stock of the Company or the Surviving Corporation immediately prior to
such transaction holding, directly or indirectly, voting capital stock of the
surviving person in such transaction (or any ultimate parent thereof)
representing less than 50% of the voting power in the election of members of the
board of directors (or comparable governing body) of all outstanding capital
stock of such surviving person (or such ultimate parent) immediately after such
transaction, (ii) sale, lease or other disposition or series of related
dispositions, directly or indirectly, by merger, consolidation or otherwise of
assets of the Company or its subsidiaries or the Surviving Corporation or its
subsidiaries, representing 50% or more of the consolidated assets of the Company
and its subsidiaries or the Surviving Corporation and its subsidiaries (as the
case may be), (iii) issue, sale or other disposition or series of related
dispositions by the Company or the Surviving Corporation of (including by of
merger, consolidation, binding share exchange or any similar transaction)
securities (or options, rights or warrants to purchase, or securities
convertible into such securities) representing 50% or more of the voting power
of the Company or the Surviving Corporation (as the case may be) to a single
purchaser or an affiliated group of purchasers or (iv) other transaction or
series of related transactions pursuant to which any person or entity shall
acquire "beneficial ownership" (as such term is defined in Rule 13d-3 under the
Exchange Act), or the right to acquire "beneficial ownership" of, 50% or more of
the outstanding voting securities of the Company or the Surviving Corporation
(as the case may be).
Section 4.06. MFN Protection. The Company shall not, at any time within
45 days of the date of this Agreement, enter into any other strategic
equity-based financing (which shall not include a commercial bank financing or a
public or Rule 144A debt or equity offering or any private placement of debt or
equity securities to any financial investor).
15
Section 4.07. Surviving Corporation Bound by Terms of Investment. The
Company shall take all steps reasonably requested by the Investor to ensure that
the Surviving Corporation shall honor and be bound by all of the terms of this
Agreement and the CVR Agreement after the consummation of the Merger, including
by causing the Surviving Corporation to execute and deliver such instruments of
assignment and take such other action as the Investor may reasonably request.
Section 4.08. Commercial Agreements. (a) The parties shall negotiate in
good faith definitive agreements relating to the Commercial Agreements with the
goal of completing such definitive agreements prior to the Closing Date. With
respect to any of such Commercial Agreements the definitive agreement for which
has not been completed prior to the Closing Date, the parties agree that the
terms of such arrangement set forth in the relevant Annex hereto represent all
essential terms between the parties and shall be binding on the parties
effective as of the Closing Date. Regardless of whether a definitive agreement
has been entered into with respect thereto, from and after the Closing Date each
Commercial Agreement shall be deemed to be an "Investment Transaction Document"
for purposes of the representations and warranties set forth in Sections 2.03
and 2.04.
(b) Promptly following consummation of the Merger, the Surviving
Corporation shall take all actions reasonably requested by the Investor to
ensure that DIRECTV Enterprises, Inc. and its subsidiaries operating the DirecTV
broadcast satellite business become parties to the Commercial Agreements and
that the terms thereof become binding on such companies.
Section 4.09. Amendments to the Merger Agreement. The Company shall not
consent to any amendment to the Merger Agreement (or to any exhibit, schedule or
annex thereto) that would permit, except to the extent any such issuance is
permitted by the terms of the Merger Agreement as in effect as of the date of
this Agreement, the issuance of additional shares of GM Class H Common Stock (as
such term is used in the Merger Agreement), including any modification of such
term thereunder, without the prior written consent of Investor.
Section 4.10. Reservation of Shares; Listing. (a) The Company shall:
(i) cause to be authorized and reserve and keep available at all times
during which any shares of Preferred Stock remain outstanding, free from
preemptive rights, out of its treasury stock or authorized but unissued
shares of capital stock, or both, solely for the purpose of effecting the
conversion of the shares of Preferred Stock pursuant to the terms of the
Certificate of Designations, a sufficient number of shares of Class A
Common Stock to provide for the issuance of the maximum number of shares
issuable upon conversion of outstanding shares of Preferred Stock; and
(ii) issue and cause the Company's transfer agent to deliver such
shares of Class A Common Stock as required upon conversion of the shares of
Preferred Stock on the terms and subject to the conditions set forth in the
Certificate of Designations, and take all actions necessary to ensure that
all such shares will, when issued and paid for pursuant to the conversion
of the shares of Preferred Stock, be duly and validly issued, fully paid
and nonassessable.
16
(b) The Company shall use its commercially reasonable efforts to cause,
prior to the Closing Date, the Class A Common Stock issuable upon conversion of
the Preferred Stock or in connection with settlement of the CVRs to be listed on
the Nasdaq National Market or other principal national securities exchange on
which the Class A Common Stock is then listed, or in the case of Class A Common
Stock to be issued in connection with settlement of the CVRs, prior to such
settlement.
Section 4.11. Legends. (a) So long as applicable, each certificate
representing any portion of the Preferred Stock or shares of Class A Common
Stock issuable upon conversion of the Preferred Stock shall be stamped or
otherwise imprinted with a legend in the following form:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT") OR THE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES. SUCH SHARES MAY NOT BE OFFERED, SOLD, TRANSFERRED,
PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF
SUCH REGISTRATION OTHER THAN PURSUANT TO AN EXEMPTION FROM SUCH
REGISTRATION REQUIREMENTS."
After the above requirement for a legend is no longer applicable because the
shares of Class A Common Stock issued upon conversion of the Preferred Stock are
freely transferable under the Securities Act, the Company shall remove such
legend upon request from a holder of such shares, if outside counsel for such
holder reasonably determines that the transfer of such shares is no longer
restricted by the Securities Act and outside counsel for the Company reasonably
concurs in such determination.
(b) In addition to the legend contemplated by Section 4.11(a), each
certificate representing any portion of the Preferred Stock shall be stamped or
otherwise imprinted with a legend in the following form (with the bracketed
language contained therein only being included in such legend if Non-Voting
Preferred Stock is issued and delivered at the Closing in accordance with the
provisions of Section 6.01(a)(iii)):
"IN ACCORDANCE WITH THE TERMS OF THE CERTIFICATE OF DESIGNATIONS
PURSUANT TO WHICH THE SHARES REPRESENTED BY THIS CERTIFICATE WERE
ISSUED, THE SHARES REPRESENTED BY THIS CERTIFICATE ARE NOT
TRANSFERRABLE OTHER THAN BY THE INITIAL HOLDER TO A PERMITTED
TRANSFEREE [OR A VOTING PERMITTED TRANSFEREE] (AS SUCH TERMS ARE
USED IN SUCH CERTIFICATE OF DESIGNATIONS) AND IMMEDIATELY PRIOR
TO ANY PURPORTED SALE, ASSIGNMENT, TRANSFER OR OTHER DISPOSITION
OF THE SHARES REPRESENTED BY THIS CERTIFICATE, SUCH SHARES SHALL
AUTOMATICALLY CONVERT INTO SHARES OF CLASS A COMMON STOCK, PAR
VALUE $0.01, OF THE ISSUER, IN ACCORDANCE WITH ARTICLE 5 OF SUCH
CERTIFICATE OF
17
DESIGNATIONS, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF
THE ISSUER."
The investor hereby acknowledges that its ability to transfer any shares of
Preferred Stock is restricted by the terms of the Certificate of Designations
and that the transfer agent for the Company will not implement any transfer in
violation of such restrictions.
(c) Each certificate representing any portion of the Preferred Stock or
shares of Class A Common Stock issuable upon conversion of the Preferred Stock
shall be stamped or otherwise imprinted with a legend (and, to the extent
applicable, each uncertificated share of Preferred Stock or Class A Common Stock
shall have an appropriate designation made in the book-entry records relating
thereto) in the following form:
"THESE SHARES MAY ALSO BE SUBJECT TO CERTAIN RESTRICTIONS ON
TRANSFER SET FORTH IN A REGISTRATION RIGHTS AGREEMENT DATED AS OF
/!/, BETWEEN THE ISSUER AND VIVENDI UNIVERSAL, S.A., AND IN
A STOCKHOLDER AGREEMENT DATED AS OF DECEMBER 14, 2002, AMONG
VIVENDI UNIVERSAL, S.A., ▇▇▇▇▇▇ ELECTRONICS CORPORATION AND
GENERAL MOTORS CORPORATION, AND TO CERTAIN RESTRICTIONS ON VOTING
SET FORTH IN A STOCKHOLDER VOTING AGREEMENT DATED AS OF DECEMBER
14, 2001, BETWEEN VIVENDI UNIVERSAL, S.A., AND CERTAIN
STOCKHOLDERS OF THE ISSUER."
Such legend shall be removed promptly upon the termination of the underlying
agreements.
Section 4.12. Filing of Certificate of Designations. On or prior to the
Closing Date, the board of directors of the Company shall adopt appropriate
resolutions for the issuance of the Preferred Stock, and the Company shall file
with the Secretary of State of the State of Nevada a Certificate of Designations
for the Preferred Stock pursuant to Section 78.1955 of the Nevada Revised
Statutes, in the form attached hereto as Exhibit C, with such changes as are
mutually agreed by the Investor and the Company (the "Certificate of
Designations"). Unless the Preferred Stock to be issued and delivered at the
Closing is to be Non-Voting Preferred Stock in accordance with the provisions of
Section 6.01(a)(iii), the Certificate of Designations shall not include any of
the bracketed provisions included in the form thereof attached hereto as Exhibit
C (other than the bracketed phrase "[other than such voting rights as are
expressly provided in Sections 8.2, 8.3 and 8.4]" in Section 8.1 thereof).
Section 4.13. Fees and Expenses. All fees and expenses incurred in
connection with this Agreement and the transactions contemplated by this
Agreement shall be paid by the party incurring such fees or expenses.
Section 4.14. Commercially Reasonable Efforts. Upon the terms and
subject to the conditions set forth in this Agreement, each of the parties shall
use commercially
18
reasonable efforts to take, or cause to be taken, all actions, and to do, or
cause to be done, and to assist and cooperate with the other parties in doing,
all things necessary, proper or advisable to consummate and make effective, in
the most expeditious manner practicable, the transactions contemplated by this
Agreement, including (i) the obtaining of all necessary actions or nonactions,
waivers, consents and approvals from Government Authorities and the making of
all necessary registrations and filings (including filings with Governmental
Authorities, if any) and the taking of all reasonable steps as may be necessary
to obtain an approval or waiver from, or to avoid an action or proceeding by,
any Governmental Authority, (ii) the obtaining of all necessary consents,
approvals or waivers from third parties, (iii) the defending of any lawsuits or
other legal proceedings, whether judicial or administrative, challenging this
Agreement or the consummation of the transactions contemplated by this
Agreement, including seeking to have any stay or temporary restraining order
entered by any court or other Governmental Authority vacated or reversed and
(iv) the execution and delivery of any additional instruments necessary to
consummate the transactions contemplated by, and to fully carry out the purposes
of, this Agreement. Nothing in this Section 4.14 shall be deemed to require any
party to waive any substantial rights or agree to any substantial limitation on
its operations or to dispose of any significant asset or collection of assets.
Each party will promptly inform the other party in writing of any litigation
commenced against such party in respect of the transactions contemplated by this
Agreement.
Section 4.15. Publicity. No public release or announcement concerning
the transactions contemplated hereby shall be issued by any party without the
prior consent of the other party (which consent shall not be unreasonably
withheld), except as such release or announcement may be required by law or the
rules or regulations of any United States or foreign securities exchange, in
which case the party required to make the release or announcement shall allow
the other party reasonable time to comment on such release or announcement in
advance of such issuance. The parties agree that the initial press release to be
issued with respect to the transactions contemplated by this Agreement shall be
in the form heretofore agreed to by the parties. The provisions of this Section
4.15 shall not restrict the ability of a party to summarize or describe the
transactions contemplated by this Agreement in any prospectus or similar
offering document so long as the other party is provided a reasonable
opportunity to review such disclosure in advance.
Section 4.16. Transfer of Non-Voting Preferred Stock. If the Preferred
Stock issued and delivered to the Investor at the Closing is Non-Voting
Preferred Stock and thereafter the Investor or any Permitted Transferee (as such
term is defined in the Certificate of Designations) thereof proposes at any time
to sell, assign, transfer or dispose of all the shares of Non-Voting Preferred
Stock to a person which is not a Permitted Transferee in such a manner as not to
cause such shares to be automatically converted into shares of Class A Common
Stock pursuant to Section 5.1(a)(iii) of the Certificate of Designations (a
"Non-Conversion Transfer"), the Investor shall give notice to the Company, at
least 10 business days prior to entering into any binding agreement to transfer
such shares (or, in the absence of such an agreement, prior to consummating any
such transfer), of the proposed Non-Conversion Transfer, which notice (the
"Transfer Notice") shall include the name of the proposed transferee. The
Investor shall not enter into any such agreement or consummate any such proposed
Non-Conversion Transfer
19
unless the Company shall give its written consent to such Non-Conversion
Transfer, which consent may not be unreasonably withheld. If the Company shall
give such consent to the Investor, such consent shall be effective with respect
to the Non-Conversion Transfer specified in the Transfer Notice for a period of
60 calendar days from the date of the Company's consent, unless such period is
extended in writing by the Company.
Section 4.17. Registration of Shares to be Issued in the Merger. The
Company shall cause the shares of New Class A Common Stock to be issued to the
Investor (and its wholly owned subsidiaries) in the Merger to be registered on
the same registration statement on Form S-4 as the shares of New Class A Common
Stock to be issued to the public stockholders of the Company in the Merger will
be registered.
Section 4.18. Market Sales During Company Offering. If the Company or
the Surviving Corporation, as the case may be, notifies the Investor that the
Company is planning to conduct an offering of securities (whether or not
registered under the Securities Act), the Investor will cooperate with the
Company in good faith with respect to any sales on the market of Class A Common
Stock or New Class A Common Stock, as the case may be, by the Investor during
the pendency of such offering in order to reduce the impact, if any, that such
sales might have on the success of such offering, it being understood and agreed
by the parties that the foregoing commitment shall not be deemed to prevent or
otherwise restrict the ability of the Investor to effect any such sales during
such period.
Section 4.19. Waiver of Appraisal Rights. With respect to any shares of
Preferred Stock, or Class A Common Stock issued upon the conversion thereof,
owned or "beneficially owned" by the Investor (as such term is defined in Rule
13d-3 under the Exchange Act), the Investor hereby waives and relinquishes all
rights set forth in Section 92A.300 et. seq. of the Nevada Revised Statutes to
which the Investor would otherwise be entitled in the absence of this waiver and
relinquishment with respect to the Merger or any of the other transactions or
actions provided for by the Transaction Agreements (as such term is defined in
the Implementation Agreement). Without limiting the generality of the foregoing,
the Investor hereby waives and relinquishes any and all rights to dissent from,
and obtain payment of the fair value of the Preferred Stock, or Class A Common
Stock issued upon the conversion thereof, in respect of, the Merger or any of
the other transactions or actions provided for by the Transaction Agreements (as
so defined). The Investor acknowledges and agrees that with respect to the
Merger or any of the other transactions or actions provided for by the
Transaction Agreements (as so defined) it shall have no right to (i) receive
notice pursuant to Section 92A.410 of the Nevada Revised Statutes from the
Company or (ii) deliver to the Company notice of intent to demand payment for
the Investor's shares of Preferred Stock, or Class A Common Stock issued upon
the conversion thereof, with respect to the Merger or any of the other
transactions or actions provided for by the Transaction Agreements (as so
defined) pursuant to Section 92A.420 of the Nevada Revised Statutes.
20
Article V
Conditions Precedent
Section 5.01. Conditions to Each Party's Obligation. The respective
obligation of the parties to consummate the transactions contemplated by this
Agreement is subject to the satisfaction or waiver on or prior to the Closing
Date of the following conditions:
(a) Governmental Approvals. The waiting period under the HSR Act shall
have expired or been terminated. All other authorizations, consents, orders or
approvals of, or declarations or filings with, or expirations of waiting periods
imposed by, any Governmental Authority required for the consummation of the
Investment shall have been obtained or filed or shall have occurred, other than
authorizations, consents, orders, approvals, declarations, filings and
expirations, the failure to obtain, make or occur of which, individually or in
the aggregate, are not reasonably likely to have a material adverse effect on
the ability of the parties to consummate the transactions contemplated by this
Agreement and the other Investment Transaction Documents.
(b) No Injunctions or Restraints. No temporary restraining order,
preliminary or permanent injunction or other order issued by any court of
competent jurisdiction or other legal restraint or prohibition preventing the
consummation of the Investment shall be in effect.
Section 5.02. Conditions to Obligation of the Investor. The obligation
of the Investor to consummate the transactions contemplated by this Agreement is
subject to the satisfaction (or waiver by the Investor) on or prior to the
Closing Date of the following conditions:
(a) Representations and Warranties. The representations and warranties
of the Company in this Agreement that are qualified as to materiality shall be
true and correct, and those not so qualified shall be true and correct in all
material respects, as of the date hereof, except to the extent such
representations and warranties expressly relate to an earlier date (in which
case such representations and warranties qualified as to materiality shall be
true and correct, and those not so qualified shall be true and correct in all
material respects, on and as of such earlier date), in each case except for
failures to be true and correct that would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect. The
Investor shall have received a certificate signed by the chief executive officer
and the chief financial officer of the Company to such effect.
(b) Performance of Obligations of the Company. The Company shall have
performed or complied in all material respects with all obligations and
covenants required by this Agreement to be performed or complied with by the
Company by the time of the Closing, and the Investor shall have received a
certificate signed by the chief executive officer and the chief financial
officer of the Company to such effect.
(c) Opinion of Counsel. The Investor shall have received an opinion
from counsel to the Company (which may be the general counsel of the Company),
dated the Closing Date,
21
and addressed to the Investor, in form and substance reasonably acceptable to
the Investor, as to the validity of the securities being issued pursuant to this
Agreement and the CVR Agreement.
(d) Absence of Proceedings. There shall not be pending or threatened
any suit, action or proceeding by any Governmental Authority challenging or
seeking to restrain or prohibit the Investment or any other transaction
contemplated by this Agreement or the other Investment Transaction Documents.
(e) EchoStar Transaction Agreements. The Merger Agreement and each
other EchoStar Transaction Agreement (as that term is defined in the Merger
Agreement) shall be in full force and effect, unamended in any manner from the
form of such agreements as in effect as of the date of this Agreement (other
than any such amendments as may be necessary or appropriate to provide for the
▇▇▇▇▇▇ Reorganization (as such term is defined in the Implementation Agreement)
or any other amendment, in each case that would not materially adversely affect
the Investor's interests as a holder of Preferred Stock or CVRs), except for
those amendments to which the Investor consents in writing in accordance with
Section 4.09.
(f) Material Adverse Change. From the date of this Agreement to the
Closing Date, there shall not have been any event, change, occurrence or
development of a state of circumstances or facts that, individually or in the
aggregate, has had, or would reasonably be expected to have, a Material Adverse
Effect, other than any event, change, development of a state of circumstances or
facts that arise out of or result from (i) the Company's performance of its
obligations under, or taking of any actions expressly permitted or contemplated
by, the terms of any of the EchoStar Transaction Agreements (as such term is
defined in the Merger Agreement) or Investment Transaction Documents, (ii)
economic factors affecting the economy or financial markets as a whole or
generally affecting the direct broadcast satellite industry (other than those
that materially disproportionately affect the Company and its subsidiaries,
taken as a whole), (iii) the public announcement of the Investment or the other
transactions contemplated by this Agreement and the other Investment Transaction
Documents, (iv) any matter disclosed in the Filed SEC Documents, the Prior
Public Disclosures or the Company Disclosure Schedule or (v) any of such events,
changes, developments or facts referred to in clauses (i) through (iv), taken
together.
(g) Certificate of Designations. The Company shall have filed with the
Secretary of State of the State of Nevada the Certificate of Designations.
(h) CVR Agreement. The Investor shall have received a counterpart of
the CVR Agreement, which shall have been executed and delivered by a duly
authorized officer of the Company.
(i) Registration Rights Agreement. The Investor shall have received a
counterpart of the Registration Rights Agreement, which shall have been executed
and delivered by a duly authorized officer of the Company.
(j) Stockholder Voting Agreement. The Investor shall have received a
counterpart of the Stockholder Voting Agreement which shall have been executed
and delivered by CWE
22
and a duly authorized trustee of each trust through which CWE holds capital
stock of the Company.
(k) Other Documents. The Company shall have furnished to the Investor
(i) a long-form good standing certificate relating to the Company issued by the
Secretary of State of the State of Nevada and dated the Closing Date and (ii) a
certificate of the Secretary of the Company covering such matters as are
customarily covered by such certificates, in form and substance reasonably
acceptable to the Investor.
Section 5.03. Conditions to Obligation of the Company. The obligation
of the Company to consummate the transactions contemplated by this Agreement is
subject to the satisfaction (or waiver by the Company) on or prior to the
Closing Date of the following conditions:
(a) Representations and Warranties. The representations and warranties
of the Investor made in this Agreement qualified as to materiality shall be true
and correct, and those not so qualified shall be true and correct in all
material respects, as of the date hereof, except to the extent such
representations and warranties expressly relate to an earlier date (in which
case such representations and warranties qualified as to materiality shall be
true and correct, and those not so qualified shall be true and correct in all
material respects, on and as of such earlier date), in each case except for
failures to be true and correct that would not, individually or in the
aggregate, reasonably be expected to have a material adverse effect on the
ability of the Investor to timely perform its obligations under this Agreement
or any other Investment Transaction Document to which it is, or is specified to
be, a party. The Company shall have received a certificate signed by an
authorized officer of the Investor to such effect.
(b) Performance of Obligations of the Investor. The Investor shall have
performed or complied in all material respects with all obligations and
covenants required by this Agreement to be performed or complied with by the
Investor by the time of the Closing, and the Company shall have received a
certificate signed by an authorized officer of the Investor to such effect.
(c) CVR Agreement. The Company shall have received a counterpart of the
CVR Agreement, which shall have been executed and delivered by a duly authorized
officer of the Investor.
(d) Registration Rights Agreement. The Company shall have received a
counterpart of the Registration Rights Agreement, which shall have been executed
and delivered by a duly authorized officer of the Investor.
(e) Stockholder Voting Agreement. The Company shall have received a
counterpart of the Stockholder Voting Agreement, which shall have been executed
and delivered by a duly authorized officer of the Investor.
23
(f) Certificate of the Secretary. The Company shall have received a
certificate of the Secretary of the Investor covering such matters as are
customarily covered by such certificates, in form and substance reasonably
acceptable to the Company.
Section 5.04. Frustration of Closing Conditions. Neither the Investor
nor the Company may rely on the failure of any condition set forth in this
Article V to be satisfied if such failure was caused by such party's failure to
act in good faith or to use its commercially reasonable efforts to cause the
Closing to occur, as required by Section 4.15.
Section 5.05. Effect of Certain Waivers of Closing Conditions. If prior
to the Closing any party (the "waiving party") has knowledge of any breach by
any other party of any representation, warranty or covenant contained in this
Agreement, and such other party acknowledges in writing that the effect of such
breach is a failure of any condition to the waiving party's obligations set
forth in this Article V and the waiving party proceeds with the Closing, the
waiving party shall be deemed to have waived such breach and the waiving party
and its successors, assigns and affiliates shall not be entitled to ▇▇▇ for
damages or to assert any other right or remedy for any losses arising from any
matters relating to such condition or breach, notwithstanding anything to the
contrary contained herein or in any certificate delivered pursuant hereto.
Article VI
Termination, Amendment and Waiver
Section 6.01. Termination. (a) Notwithstanding anything to the contrary
in this Agreement, this Agreement may be terminated and the Investment and the
other transactions contemplated by this Agreement abandoned at any time prior to
the Closing:
(i) by mutual written consent of the Company and the Investor;
(ii) by either the Company or the Investor, if any Governmental
Authority shall have issued a nonappealable final order, decree or
ruling or taken any other action having the effect of permanently
restraining, enjoining or otherwise prohibiting the transactions
contemplated by this Agreement;
(iii) unless the Company is in material breach of this Agreement
at such time, by the Company at any time on or after February 28,
2002, if the Closing shall not have theretofore occurred because the
condition set forth in the first sentence of Section 5.01(a) shall not
have been satisfied prior to such time; provided that the Company
shall have given the Investor at least three business days' notice of
its intention to terminate this Agreement pursuant to this clause
(iii); and provided further, that if the Company shall have delivered
such a notice, the Investor shall be entitled to elect by written
notice delivered to the Company prior to the date of the Company's
intended termination of this Agreement, as specified in the Company's
notice to the Investor, to purchase Preferred Stock having the rights,
powers and preferences set forth in Exhibit C hereto, including
24
the bracketed provisions therein identified as applicable to a series
of non-voting Preferred Stock (the "Non-Voting Preferred Stock"), upon
which election having been received by the Company, (x) the condition
set forth in the first sentence of Section 5.01(a) shall be deemed to
be no longer of any force or effect in this Agreement and (y) the
Company's right to terminate this Agreement pursuant to this clause
(iii) shall expire and have no further force or effect, unless at any
time thereafter when all conditions to Closing have been satisfied or
waived in accordance with Section 1.02, the Investor shall fail to
satisfy its obligations to be fulfilled at the Closing within the time
specified in Section 1.02 for the Closing to occur after the
satisfaction or waiver of all conditions to Closing in accordance with
such Section 1.02, in which event the Company shall be permitted to
terminate this Agreement at any time after the Investor has so failed
to so fulfill its obligations; or
(iv) by the non-breaching party, if either the Company or the
Investor shall have materially breached any of its representations,
warranties, covenants, agreements or obligations that has rendered the
satisfaction of the condition set forth in Section 5.02(a) or 5.02(b)
or 5.03(a) or 5.03(b), as the case may be, incapable of fulfillment
under this Agreement.
(b) In the event of termination by the Company or the Investor pursuant
to this Section 6.01, written notice thereof shall forthwith be given to the
other and the transactions contemplated by this Agreement shall be terminated,
without further action by any party.
Section 6.02. Effect of Termination. If this Agreement is terminated
and the transactions contemplated hereby are abandoned as described in Section
6.01, each of the parties shall be relieved of its duties and obligations
arising under this Agreement, the provisions of this Agreement shall have no
further force or effect after the date of such termination and such termination
shall be without liability of any party (or any stockholder, director, officer,
partner, employee, agent, consultant or representative of such party) to any
other party to this Agreement; provided that if such termination shall result
from the willful (a) failure of any party to fulfill a condition to the
performance of the obligations of the other party, (b) failure to perform a
covenant of this Agreement or (c) breach by any party hereto of any
representation or warranty contained herein, such failing or breaching party
shall be fully liable for any and all losses (excluding consequential damages)
incurred or suffered by the other party as a result of such failure or breach;
and provided, further, that the provisions of Section 4.13, this Article VI and
Article VII shall survive any termination hereof pursuant to Section 6.01.
Article VII
General Provisions
Section 7.01. Assignment; Successors. (a) This Agreement and the rights
and obligations hereunder shall not be assignable or transferable by any party
(other than, with respect to the Company, by operation of law in connection with
the consummation of the Merger) without the prior written consent of the other
party hereto. Notwithstanding the
25
foregoing, the Investor may assign its right to purchase the Preferred Stock
pursuant to this Agreement and receive delivery of the associated CVRs pursuant
to the CVR Agreement to a wholly owned subsidiary of the Investor without the
prior written consent of any other party; provided, however, that no assignment
shall limit or affect the assignor's obligations hereunder. Any attempted
assignment in violation of this Section 7.01 shall be void.
(b) This Agreement and the provisions hereof shall be binding upon and
shall inure to the benefit of each of the parties and their respective
successors and permitted assigns.
Section 7.02. No Third-Party Beneficiaries. This Agreement is for the
sole benefit of the parties hereto and their permitted assigns and nothing
herein expressed or implied shall give or be construed to give to any person,
other than the parties hereto and such assigns, any legal or equitable rights
hereunder.
Section 7.03. Notices. All notices or other communications required or
permitted to be given hereunder shall be in writing and shall be delivered by
hand or sent by facsimile or sent, postage prepaid, by registered, certified or
express mail or overnight courier service and shall be deemed given when so
delivered by hand or facsimile (upon receipt of confirmation), or if mailed, one
day after mailing, as follows:
(i) if to the Investor,
Vivendi Universal
▇▇, ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ Cedex 08
France
Fax: ▇▇-▇-▇▇▇▇-▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇▇▇▇ Hannezo
with a copy to:
Cravath, Swaine & ▇▇▇▇▇
Worldwide Plaza
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.; and
26
(ii) if to the Company,
EchoStar Communications Corporation
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, General Counsel
with a copy to:
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇ ▇. ▇'▇▇▇▇▇
Section 7.04. Interpretation; Exhibits and Schedules; Certain
Definitions. (a) The headings contained in this Agreement, in any Annex, Exhibit
or Schedule hereto and in the table of contents to this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. All Annexes, Exhibits and Schedules annexed
hereto or referred to herein are hereby incorporated in and made a part of this
Agreement as if set forth in full herein. Any capitalized terms used in any
Annex, Schedule or Exhibit but not otherwise defined therein, shall have the
meaning as defined in this Agreement. When a reference is made in this Agreement
to a Section, Annex, Exhibit or Schedule, such reference shall be to a Section
of, or an Annex, Exhibit or Schedule to, this Agreement unless otherwise
indicated.
(b) For all purposes hereof:
"affiliate" of any person means another person that directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with, such first person.
"control" (including the terms "controlling, "controlled by" and "under
common control with") means the possession, direct or indirect, of the power to
direct or cause the direction of the management and policies of a person,
whether through the ownership of voting securities, by contract, or otherwise.
"including" means including, without limitation.
"person" means any individual, firm, corporation, partnership, limited
liability company, trust, joint venture, Governmental Authority or other entity.
"subsidiary" of any person means another person, an amount of the
voting securities, other voting rights or voting partnership interests of which
is sufficient to elect at least
27
a majority of its board of directors or other governing body (or, if there are
no such voting interests, 50% or more of the equity interests of which) is owned
directly or indirectly by such first person.
Section 7.05. Counterparts. This Agreement may be executed in one or
more counterparts, all of which shall be considered one and the same agreement,
and shall become effective when one or more such counterparts have been signed
by each of the parties and delivered to the other parties.
Section 7.06. Entire Agreement. This Agreement, the Non-Disclosure
Agreement dated as of December 8, 2001, between the Company and the Investor and
the other Investment Transaction Documents, along with the Annexes, Schedules
and Exhibits thereto and thereto, contain the entire agreement and understanding
among the parties hereto with respect to the subject matter hereof and supersede
all prior agreements and understandings relating to such subject matter. None of
the parties shall be liable or bound to any other party in any manner by any
representations, warranties or covenants relating to such subject matter except
as specifically set forth herein or in the other Investment Transaction
Documents.
Section 7.07. Severability. This Agreement shall be deemed severable,
and the invalidity or unenforceability of any term or provision hereof shall not
affect the validity or enforceability of this Agreement or of any other term or
provision hereof. Furthermore, in lieu of any such invalid or unenforceable term
or provision, the parties hereto intend that there shall be added as a part of
this Agreement a provision as similar in terms to such invalid or unenforceable
provision as may be possible and be valid and enforceable.
Section 7.08. Consent to Jurisdiction. Each party irrevocably submits
to the jurisdiction of (a) the Supreme Court of the State of New York, New York
County, (b) the United States District Court for the Southern District of New
York and (c) any Colorado state court or federal court sitting in Colorado, for
the purposes of any suit, action or other proceeding arising out of this
Agreement, any other Investment Transaction Document or any transaction
contemplated hereby or thereby. Each party agrees to commence any such action,
suit or proceeding in the United States District Court for the Southern District
of New York, in the Supreme Court of the State of New York, New York County or
in any Colorado state court or federal court sitting in Colorado. Each party
further agrees that service of any process, summons, notice or document by U.S.
registered mail to such party's respective address set forth above shall be
effective service of process for any action, suit or proceeding in New York or
Colorado with respect to any matters to which it has submitted to jurisdiction
in this Section 7.08. Each party irrevocably and unconditionally waives any
objection to the laying of venue of any action, suit or proceeding arising out
of this Agreement, any other Investment Transaction Document or the transactions
contemplated hereby and thereby in (i) the Supreme Court of the State of New
York, New York County, (ii) the United States District Court for the Southern
District of New York or (iii) in any Colorado state court or federal court
sitting in Colorado, and hereby and thereby further irrevocably and
unconditionally waives and agrees not to plead or claim in any such court that
any such action, suit or proceeding brought in any such court has been brought
in an inconvenient forum.
28
Section 7.09. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York regardless of the
laws that might otherwise apply under applicable principles of law thereof.
Section 7.10. Waiver of Jury Trial. Each party hereby waives to the
fullest extent permitted by applicable law, any right it may have to a trial by
jury in respect to any litigation directly or indirectly arising out of, under
or in connection with this Agreement, any other Investment Transaction Document
or any transaction contemplated hereby or thereby. Each party (a) certifies that
no representative, agent or attorney of any other party has represented,
expressly or otherwise, that such other party would not, in the event of
litigation, seek to enforce the foregoing waiver and (b) acknowledges that it
and the other parties hereto have been induced to enter into this Agreement and
the other Investment Transaction Document, as applicable, by, among other
things, the mutual waivers and certifications in this Section 7.10.
Section 7.11. Amendments and Waivers. This Agreement may not be amended
except by an instrument in writing signed on behalf of each of the parties
hereto. By an instrument in writing, the Investor, on the one hand, or the
Company, on the other hand, may waive compliance by the other with any term or
provision of this Agreement that such other party was or is obligated to comply
with or perform.
Section 7.12. Specific Performance. The parties hereto agree that the
remedy at law for any breach of this Agreement may be inadequate, and that, as
between the Company and the Investor, any party by whom this Agreement is
enforceable shall be entitled to specific performance in addition to any other
appropriate relief or remedy. Such party may, in its sole discretion, apply to a
court of competent jurisdiction for specific performance or injunctive or such
other relief as such court may deem just and proper in order to enforce this
Agreement as between the Company and the Investor, or prevent any violation
hereof, and, to the extent permitted by applicable law, as between the Company
the Investor, each party waives any objection to the imposition of such relief.
Section 7.13. Survival of Representations and Warranties. The parties
agree that the representations and warranties of the Company and the Investor
contained in this Agreement or in any certificate, document or instrument
delivered in connection herewith (other than the representations and warranties
of the Company set forth in Section 2.02(c) and 2.02(d)), shall not survive
Closing.
29
IN WITNESS WHEREOF, the Company and the Investor have duly executed
this Agreement as of the date first written above.
ECHOSTAR COMMUNICATIONS CORPORATION,
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Senior Vice President
and General Counsel
VIVENDI UNIVERSAL, S.A.,
By /s/ ▇▇▇▇-▇▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇-▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Chairman and Chief
Executive Officer
EXHIBIT A
[Form of]
CVR AGREEMENT
EXHIBIT A
===============================================================================
CONTINGENT VALUE RIGHTS AGREEMENT
between
ECHOSTAR COMMUNICATIONS CORPORATION,
and
VIVENDI UNIVERSAL, S.A.
-----------------------------
Dated as of
/o/
-----------------------------
================================================================================
TABLE OF CONTENTS
Page
Article I
Terms of the CVRs
SECTION 1.01. Issuance and Delivery of the CVRs; Form of CVRs..............1
SECTION 1.02. Maturity Date; CVR Payment Calculation.......................2
SECTION 1.03. Roll-Over of the CVRs Upon Consummation of the
Merger; Change of Control Transactions During the
Protection Period.........................................3
SECTION 1.04. CVRs Not Transferable........................................5
SECTION 1.05. Early Termination of CVRs....................................5
SECTION 1.06. Antidilution.................................................5
SECTION 1.07. Payment Terms................................................6
SECTION 1.08. No Interest on CVR Payments..................................6
SECTION 1.09. Determination that No Payment is Due.........................6
Article II
Covenants
SECTION 2.01. Payment of Amounts, if any, to Holders of CVRs...............6
SECTION 2.02. Reservation of Class A Common Shares.........................6
SECTION 2.03. Antimanipulation.............................................7
SECTION 2.04. Certain Notices..............................................8
Article III
Remedies of the Holders of CVRs on Event of Defaults
SECTION 3.01. Event of Default Defined; Acceleration of Maturity...........8
SECTION 3.02. Remedies Cumulative; Delay or Omission Not Waiver
of Default...................................................9
Article IV
Other Change of Control Transactions
SECTION 4.01. Company May Merge, Etc.......................................10
SECTION 4.02. Successor Substituted........................................10
SECTION 4.03. Termination..................................................10
-i-
Article V
General Provisions
SECTION 5.01. Notices......................................................11
SECTION 5.02. Interpretation; Exhibits and Schedules; Certain
Definitions..................................................12
SECTION 5.03. Counterparts.................................................12
SECTION 5.04. Severability.................................................13
SECTION 5.05. Governing Law................................................13
SECTION 5.06. Amendments and Waivers.......................................13
-ii-
CONTINGENT VALUE RIGHTS AGREEMENT (this "Agreement") dated as of /o/,
between ECHOSTAR COMMUNICATIONS CORPORATION, a Nevada corporation (the
"Company"), and VIVENDI UNIVERSAL, S.A., a societe anonyme organized under the
laws of France (the "Investor").
WHEREAS, pursuant to the Investment Agreement dated as of December 14,
2001 (the "Investment Agreement"), between the Company and the Investor, and as
a condition to the willingness of the Investor to enter into the Investment
Agreement, the Company has agreed to issue and deliver to the Investor, upon
consummation of the transactions contemplated by the Investment Agreement, one
contingent value right having the terms set forth in this Agreement (the "CVRs")
for each share of Class A common stock, par value $0.01 per share, of the
Company ("Class A Common Stock", which term shall include any class of capital
stock of the Company into which the Class A Common Stock may be reclassified,
converted or exchanged as contemplated by Section 1.06) issuable upon the
conversion of shares of Series D mandatorily convertible participating preferred
stock, par value $0.01 per share, of the Company (the "Preferred Stock")
purchased by the Investor pursuant to the Investment Agreement;
WHEREAS the Company has duly authorized the creation and issue of the
CVRs, and to provide therefor the Company has duly authorized the execution and
delivery of this Agreement; and
WHEREAS, all things necessary have been done to make the CVRs the valid
obligations of the Company and to make this Agreement a valid agreement of the
Company, in each case in accordance with the terms of this Agreement.
NOW, THEREFORE, in consideration of the premises and the consummation
of the transactions contemplated by this Agreement and the Investment Agreement
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto hereby agree as follows:
Article I
Terms of the CVRs
SECTION 1.01. Issuance and Delivery of the CVRs; Form of CVRs.
Effective upon the consummation of the issuance, sale and delivery of the
Preferred Stock to the Investor pursuant to the Investment Agreement, there
shall be issued and delivered to the Investor pursuant to this Agreement,
without any further action on the part of the Company or the Investor, that
number of CVRs as is equal to the number of shares of Class A Common Stock into
which the Preferred Stock is convertible as of the closing date of the purchase
and sale pursuant to the Investment Agreement (the "Initial CVR Amount"). The
CVRs shall be in uncertificated form and shall be evidenced by Schedule I
hereto, and the number of CVRs initially indicated on Schedule I shall be equal
to the Initial CVR Amount. The number of CVRs indicated on Schedule I as being
outstanding and owned by the Investor or its wholly owned
2
subsidiaries shall be adjusted from time to time (i) in accordance with Section
1.04, based on sales of Class A Common Stock by the Investor or its wholly owned
subsidiaries and (ii) pursuant to the provisions of Section 1.06. The number of
CVRs indicated on Schedule I shall be considered to be "held" by the Investor or
its wholly owned subsidiary and "outstanding", notwithstanding the fact that the
CVRs are in uncertificated form.
SECTION 1.02. Maturity Date; CVR Payment Calculation. The Company shall
pay to the Investor on the date (the "Maturity Date") that is the earliest to
occur of:
(i) 36 months following the consummation of the merger (the
"Merger") provided for in Article I of the Agreement and Plan of
Merger dated as of October 28, 2001, by and between the Company and
▇▇▇▇▇▇ Electronics Corporation, a Delaware corporation ("▇▇▇▇▇▇"), as
amended as of the date of this Agreement (as it may be amended from
time to time, the "Merger Agreement");
(ii) 30 months following the acquisition by the Company of all of
▇▇▇▇▇▇'▇ indirect equity interests in PanAmSat Corporation, a Delaware
corporation ("PanAmSat"), pursuant to the terms of the Stock Purchase
Agreement dated as of October 28, 2001, among the Company, ▇▇▇▇▇▇,
▇▇▇▇▇▇ Communications Galaxy, Inc., ▇▇▇▇▇▇ Communications Satellite
Services, Inc. and ▇▇▇▇▇▇ Communications, Inc. (as it may be amended
from time to time, the "PanAmSat Stock Purchase Agreement"); or
(iii) 30 months following the termination of the Merger Agreement
and the termination of the PanAmSat Stock Purchase Agreement (with (a)
any termination of the PanAmSat Stock Purchase Agreement by the
Company upon written notice to the other parties thereto in accordance
with the terms thereof being deemed a termination thereof, (b) any
termination of the PanAmSat Stock Purchase Agreement by mutual
agreement of ▇▇▇▇▇▇ and the Company in accordance with the terms
thereof being deemed a termination thereof and (c) any purported
termination of the PanAmSat Stock Purchase Agreement by ▇▇▇▇▇▇ upon
written notice to the Company in accordance with the terms thereof
being deemed a termination thereof, unless as promptly as practicable
after the Company's receipt of ▇▇▇▇▇▇'▇ notice purporting to terminate
the PanAmSat Stock Purchase Agreement, the Company notifies ▇▇▇▇▇▇ in
writing that it objects to such purported termination, in which case
such purported termination shall not be deemed a termination of the
PanAmSat Stock Purchase Agreement hereunder until the earliest to
occur of (1) the date on which Company notifies ▇▇▇▇▇▇ in writing that
the Company is no longer contesting such purported termination, (2)
the date on which a court of competent jurisdiction issues a final,
non-appealable order to the effect that ▇▇▇▇▇▇'▇ purported termination
was in accordance with the terms of the PanAmSat Stock Purchase
Agreement and (3) the date that is 30 months after the date of
▇▇▇▇▇▇'▇ written notice purporting to terminate the PanAmSat Stock
Purchase Agreement)
(such 30- or 36-month period, as applicable, being referred to as the
"Protection Period"), for each outstanding CVR held by the Investor and its
wholly owned subsidiaries on the Maturity Date, the amount (payable as set forth
in Section 1.07), if any, as determined by the Company, by which (x) the
Reference Price (as defined below) exceeds (y) the Volume Weighted Average Price
(as defined below) of Class A Common Stock for the 20 trading days ended five
trading
3
days prior to the Maturity Date (the "20-Day Average Price"); provided, however,
that the maximum payment in respect of each CVR shall be (i) if on or prior to
the Maturity Date, the Merger has been consummated, an amount equal to 15% of
the Reference Price and (ii) if on the Maturity Date, the Merger has not been
consummated, an amount equal to 35% of the Reference Price (such 15% amount or
35% amount, as applicable, the "Payment Cap"), and, upon the payment in full of
any such amount, all of the CVRs then outstanding and this Agreement shall
thereupon automatically terminate and become null and void without any further
action on the part of any party hereto, and the holders thereof and the parties
hereto shall have no further rights with respect thereto or hereto. Such
determination by the Company absent manifest error shall be final and binding on
the Company and the Investor. The term "Reference Price" shall mean $26.0395,
which amount shall be subject to adjustment from time to time as set forth in
Section 1.06, and all references in this Agreement, whether or not expressly so
stated, shall be to the Reference Price then in effect. The term "Volume
Weighted Average Price" shall mean, with respect to the Class A Common Stock on
any trading day, the volume weighted average price per share for the regular
trading session (defined as 9:30 a.m. through 4:00 p.m., Eastern Time) during
such trading day, as published by Bloomberg (or its successor corporation) on
page "AQR"(or its successor page), or if not published by Bloomberg (or its
successor corporation), on such national securities market or exchange upon
which the volume weighted average price per share for the Class A Common Stock
is reported for such trading day, or if the volume weighted average price per
share for the Class A Common Stock is not reported on a national securities
market or exchange for such trading day, as determined in good faith by the
board of directors of the Company.
SECTION 1.03. Roll-Over of the CVRs Upon Consummation of the Merger;
Change of Control Transactions During the Protection Period. (a) Roll-Over Upon
Merger. Upon consummation of the Merger, this Agreement and the CVRs shall
become obligations of the surviving corporation in the Merger (the "Surviving
Corporation"), and at all times thereafter all references herein (i) to Class A
Common Stock, shall be deemed to be references to the Class A common stock, par
value $0.01 per share, of the Surviving Corporation into which each share of
Class A Common Stock shall be converted at the effective time of the Merger and
(ii) to the Company, shall be to the Surviving Corporation.
(b) Change of Control Transactions; Acceleration Election. If at any time
during the Protection Period the Company proposes to enter into a Change of
Control Transaction (as defined below), the Company shall, as soon as
practicable following the first public disclosure of such Change of Control
Transaction but in no event less than five business days prior to the
consummation thereof (or such lesser period as the Company has knowledge of the
proposed consummation), provide written notice to the Investor of its intention
to enter into such Change of Control Transaction, which notice shall specify the
date on which such Change of Control Transaction is expected to be consummated.
If the Investor so elects by providing written notice (an "Acceleration
Election") to the Company no more than two business days prior to the expected
date of consummation of such Change of Control Transaction (as specified in the
Company's notice to the Investor), the Company shall pay to the Investor on the
date of consummation of such Change of Control Transaction (the "Change of
Control Date"), for each outstanding CVR held by the Investor and its wholly
owned subsidiaries on the Change of Control Date, the amount (payable as set
forth in Section 1.07), if any, as
4
determined by the Company, by which (x) the Reference Price exceeds (y) the
20-Day Average Price (with the 20-Day Average Price calculated as if the Change
of Control Date were the Maturity Date), subject to the Payment Cap, and, upon
the payment in full of any such amount, all of the CVRs then outstanding and
this Agreement shall thereupon automatically terminate and become null and void
without any further action on the part of any party hereto, and the holders
thereof and the parties hereto shall have no further rights with respect thereto
or hereto. Such determination by the Company absent manifest error shall be
final and binding on the Company and the Investor. If the Investor does not make
an Acceleration Election, the terms of Article IV shall, if applicable, apply by
their terms to such Change of Control Transaction. The term "Change of Control
Transaction" shall mean any merger, consolidation, tender offer, statutory share
exchange or sale, lease or transfer of all or substantially all of the Company's
assets or similar transaction or group of related transactions, in each case to
which the Company is a party (or, in the case of a tender offer, in which
capital stock of the Company is the subject security), the consummation of which
results in a Change of Control (as defined below); provided that (a) neither the
Merger nor any of the transactions provided for by the Merger Agreement or the
other Transaction Agreements (as such term is defined in the Implementation
Agreement dated as of October 28, 2001, among the Company, ▇▇▇▇▇▇ and General
Motors Corporation, a Delaware corporation, as amended as of the date of this
Agreement and as it may be amended from time to time), shall constitute a Change
of Control Transaction; and (b) the consummation of the transactions
contemplated by the PanAmSat Stock Purchase Agreement, including any issuance of
shares of Class A Common Stock in connection therewith, shall not constitute a
Change of Control Transaction. The term "Change of Control" shall mean (a) any
transaction or series of related transactions (including a tender offer, merger
or consolidation) the result of which is that holders of outstanding voting
capital stock of the Company immediately prior to such transaction or series of
related transactions hold, directly or indirectly, capital stock of the
surviving person in such transaction or series of related transactions (or any
ultimate parent thereof) representing less than 50% of the voting power in the
election of members of the board of directors (or comparable governing body) of
all outstanding capital stock of such surviving person (or such ultimate parent)
immediately after such transaction or series of related transactions; or (b) the
sale, lease or transfer of all or substantially all of the Company's assets to
any "person" or "group", within the meaning of Section 13(d)(3) and 14(d)(2) of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or any
successor provision to either of the foregoing, including any group acting for
the purpose of acquiring, holding or disposing of securities within the meaning
of Rule 13d-5(b)(1) under the Exchange Act, other than to any subsidiary or
subsidiaries of the Company.
5
SECTION 1.04. CVRs Not Transferable. The CVRs shall not be transferable
other than from the Investor to a wholly owned subsidiary of the Investor or
from a wholly owned subsidiary of the Investor to the Investor or another wholly
owned subsidiary of the Investor. Upon the sale, transfer or other disposition
by the Investor or a wholly owned subsidiary of the Investor (other than to the
Investor or a wholly owned subsidiary of the Investor) of any shares of Class A
Common Stock that were issued upon the conversion of shares of Preferred Stock
or upon consummation of the Merger, that number of CVRs as is equal to the
number of shares of Class A Common Stock so sold, transferred or otherwise
disposed of shall thereupon automatically terminate and become null and void,
and the Investor (or such wholly owned subsidiary) shall have no further rights
with respect thereto.
SECTION 1.05. Early Termination of CVRs. If the Volume Weighted Average
Price of the Class A Common Stock exceeds 120% of the Reference Price on each
trading day for 90 consecutive calendar days (x) if the event the occurrence of
which caused the Protection Period to commence was the consummation of the
Merger in accordance with Section 1.02(i), at any time during the 30-month
period beginning on the date that is six months after the date on which the
Merger was consummated and ending on the Maturity Date and (y) if the
commencement of the Protection Period was caused by the occurrence of the events
listed in either Section 1.02(ii) or Section 1.02(iii), at any time during the
Protection Period, in either such case all of the CVRs then outstanding and this
Agreement shall thereupon automatically terminate and become null and void
without any further action on the part of any party hereto, and the holders
thereof and the parties hereto shall have no further rights with respect thereto
or hereto.
SECTION 1.06. Antidilution. If the Company shall at any time (whether
before or after consummation of the Merger) in any manner subdivide (by stock
split, stock dividend or otherwise) or combine (by reverse stock split or
otherwise) the number of outstanding shares of Class A Common Stock or effect a
merger, consolidation, statutory share exchange or other similar transaction in
which shares of Class A Common Stock are reclassified, converted into or
exchanged for a different number of shares of Class A Common Stock or shares of
capital stock of a different class, the number of outstanding CVRs shall
thereupon automatically be similarly subdivided, combined or changed and the
Reference Price shall thereupon automatically be appropriately adjusted (in the
case of a merger, consolidation, statutory share exchange or other similar
transaction, based on the relevant exchange ratio). Upon consummation of the
Merger, the number of outstanding CVRs and the Reference Price will
automatically be adjusted to reflect the exchange of Class A Common Stock for
Class A Common Stock of the Surviving Corporation based on the following
formulas:
(i) the number of CVRs shall be adjusted by multiplying the number of
outstanding CVRs immediately prior to the consummation of the Merger by the
Class A Exchange Ratio (as such term is defined in the Merger Agreement);
and
(ii) the Reference Price shall be adjusted by dividing the Reference
Price in effect immediately prior to the consummation of the Merger by the
Class A Exchange Ratio (as such term is defined in the Merger Agreement).
6
SECTION 1.07. Payment Terms. Payments of any amounts in respect of the
CVRs shall be made, in the Company's sole discretion, subject to Section 2.02,
(i) in cash by wire transfer of immediately available funds to a bank account
designated in writing by the Investor, (ii) by the issuance and delivery to the
Investor of the number of shares of Class A Common Stock obtained by dividing
(x) the payment amount by (y) the product of (I) the 20-Day Average Price
applicable to such payment and (II) 0.95 or (iii) in cash and shares of Class A
Common Stock (with the number of shares of Class A Common Stock to be issued and
delivered being determined by subtracting from the total payment amount the
amount paid in cash and dividing that amount by the product of (I) the 20-Day
Average Price applicable to such payment and (II) 0.95). No fractional shares of
Class A Common Stock shall be issued to any holder of CVRs in respect of any
payment made in the form of shares of Class A Common Stock. Instead of any
fractional shares of Class A Common Stock that would otherwise be issuable to
any such holder, the Company shall pay to such holder in respect of such
fractional interest in an amount in cash equal to the product of (x) such
fractional interest and (y) the 20-Day Average Price applicable to such payment.
SECTION 1.08. No Interest on CVR Payments. Other than in the case of
interest on the Default Amount (as defined in Section 3.01) with respect to any
CVR, which shall be calculated in accordance with Section 3.01, no interest
shall accrue on any amounts payable with respect to the CVRs.
SECTION 1.09. Determination that No Payment is Due. If the Company
determines that no amount is payable with respect to the CVRs to the holders
thereof on the Maturity Date, the Change of Control Date (if an Acceleration
Election shall have been made by the Investor with respect thereto) or the
Default Payment Date (as defined in Section 3.01), as the case may be, the
Company shall give written notice of such determination to the Investor. Upon
making such determination, absent manifest error, the CVRs and this Agreement
shall terminate and become null and void without any further action on the part
of any party hereto, and the holders thereof and the parties hereto shall have
no further rights with respect thereto or hereto. The failure to give such
notice or any defect therein shall not affect the validity of such
determination.
Article II
Covenants
SECTION 2.01. Payment of Amounts, if any, to Holders of CVRs. The
Company will duly and punctually pay the amounts, if any, in the manner provided
for in Section 1.07, payable with respect to the CVRs in accordance with the
terms of this Agreement.
SECTION 2.02. Reservation of Class A Common Shares. The Company shall
be permitted to pay any amounts in respect of CVRs in shares of Class A Common
Stock pursuant to Section 1.07 only if it has reserved for issuance and delivery
upon maturity or early settlement of the CVRs such number of shares of Class A
Common Stock as shall be issuable upon maturity or early settlement of the CVRs.
All such shares of Class A Common Stock shall be duly authorized and, when
issued, shall be validly issued, fully paid and nonassessable, free
7
and clear of all liens, security interests, charges and other encumbrances, and
will not have been issued in violation of any preemptive or similar rights.
SECTION 2.03. Antimanipulation. (a) During the period commencing 180
calendar days prior to the Maturity Date and ending on the date that is 30
trading days prior to the Maturity Date (the "Limited Sale Period"), in addition
to any restrictions on sales arising under the federal securities laws or other
applicable laws, the Investor shall not, and shall not permit any of its
subsidiaries or controlled affiliates to, sell (including any constructive sale
by means of a hedging, derivative or similar transaction) shares of Class A
Common Stock (i) on any trading day (x) on which the opening bid with respect to
the Class A Common Stock is lower than the closing price on the preceding
trading day by 2% or more or $0.50 or more, whichever is more restrictive or (y)
in an amount greater than the sum of (I) 3.75% of the trading volume of the
Class A Common Stock on the preceding trading day and (II) 3.75% of the trading
volume of the Class A Common Stock during the first half of the trading day on
the date of sale or (ii) during the last hour of trading on any trading day. In
addition, all sales of Class A Common Stock by the Investor and its subsidiaries
and controlled affiliates during the Limited Sale Period (i) shall comply with
the volume limitations required by Rule 144 under the Securities Act of 1933, as
amended (the "Securities Act"), (ii) shall be effected by means of "brokers'
transactions" (as such term is used in Rule 144 under the Securities Act), (iii)
shall not constitute the opening transaction in the security on any trading day
and (iv) shall not be at a price that is less than the prevailing market price
(the lowest current independent published bid).
(b) During the period commencing 30 trading days prior to the Maturity Date
and ending on the Maturity Date (the "Restricted Period"), (i) the Investor
shall not, and shall not permit any of its subsidiaries or controlled affiliates
to, sell (including any constructive sale by means of a hedging, derivative or
similar transaction), in open market transactions, privately negotiated
transactions or otherwise, any Class A Common Stock and (ii) the Company shall
not, and shall not permit any of its subsidiaries or controlled affiliates to,
repurchase or redeem (or publicly announce an intention or plan to repurchase or
redeem), or otherwise acquire, in open market purchases, privately negotiated
transactions or otherwise, any Class A Common Stock or Class C common stock, par
value $0.01 per share, of the Surviving Corporation (the "Class C Common
Stock"), or any securities convertible into or exchangeable for, Class A Common
Stock or Class C Common Stock, other than privately negotiated repurchases or
redemptions of Class C Common Stock.
(c) Notwithstanding anything to the contrary in this Section 2.03, the
Investor and its affiliates shall be permitted to sell Class A Common Stock (i)
during the Restricted Period or (ii) in an amount greater than that permitted
during the Limited Sale Period, in each case if the Investor gives the Company
at least 3 business days prior notice of its intention to do so. Upon the first
to occur of any sales that are the subject of such notice or any such sales for
which notice is not provided in violation of this Section 2.03(c), all of the
CVRs then outstanding and this Agreement shall thereupon automatically terminate
and become null and void without any further action on the part of any party
hereto, and the holders thereof and the parties hereto shall have no further
rights with respect thereto or hereto.
8
SECTION 2.04. Certain Notices. (a) Subject to Section 2.03(c), as soon
as practicable after the Investor or any of its wholly owned subsidiaries has
sold, transferred or otherwise disposed of any Class A Common Stock, the
Investor shall inform the Company of such sale, transfer or other disposition by
written notice in substantially the form attached as Exhibit A hereto. Schedule
I hereto shall thereupon be adjusted to reduce the number of outstanding CVRs in
accordance with Section 1.04.
(b) Whenever an adjustment is made pursuant to Section 1.06, the
Company shall promptly prepare a certificate setting forth such adjustment and a
brief statement of the facts accounting for such adjustment and shall as
promptly as practicably thereafter deliver such certificate to the Investor. Any
such adjustment absent manifest error shall be final and binding on the Company
and the Investor. Schedule I hereto shall thereupon be adjusted to indicate the
number of outstanding CVRs after giving effect to such subdivision, combination
or change, and to indicate the Reference Price then in effect.
(c) If an early termination of the CVRs occurs pursuant to, and in
accordance with, the provisions of Section 1.05, the Company shall promptly
provide the Investor with written notice of such occurrence, together with all
information reasonably necessary for the Investor to confirm such occurrence.
(d) Notwithstanding anything to the contrary in this Section 2.04, any
reduction in the number of outstanding CVRs in accordance with Section 1.04, any
adjustment to the number of outstanding CVRs or the Reference Price in
accordance with Section 1.06, or any early termination of the CVRs in accordance
with Section 1.05 shall, in each case, automatically occur upon the happening of
the event giving rise to such reduction, adjustment or termination, regardless
of whether the Company has received or given notice of such event or revised
Schedule I as provided for in this Section 2.04.
Article III
Remedies of the Holders of CVRs on Event of Defaults
SECTION 3.01. Event of Default Defined; Acceleration of Maturity.
"Event of Default", with respect to CVRs, means any one of the following events
which shall have occurred and be continuing (whatever the reason for such Event
of Default and whether it shall be voluntary or involuntary or be effected by
operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
(a) the Company shall default in the payment of all or any part of the
amounts payable in respect of the CVRs as and when the same shall become
due and payable either at the Maturity Date, or the Change of Control Date
or otherwise; or
(b) a court of competent jurisdiction shall enter a decree or order
for relief in respect of the Company in an involuntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, or appointing a receiver, liquidator, assignee, custodian, trustee
or sequestrator (or similar official) of the
9
Company or for any substantial part of its property or ordering the winding
up or liquidation of its affairs, and such decree or order shall remain
unstayed and in effect for a period of 60 days; or
(c) the Company shall commence a voluntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect, or
consent to the entry of an order for relief in an involuntary case under
any such law, or consent to the appointment of or taking possession by a
receiver, liquidator, assignee, custodian, trustee or sequestrator (or
similar official) of the Company or for any substantial part of its
property, or make any general assignment for the benefit of creditors.
If an Event of Default occurs and is continuing, then, and in each and every
such case, unless all of the CVRs shall have already become due and payable or
have expired or terminated, the Investor by notice in writing to the Company may
declare all CVRs then outstanding to be due and payable immediately (the date of
such notice being the "Default Payment Date"), and upon any such declaration the
Default Amount (as defined below) for each such CVR shall become immediately due
and payable and, thereafter, shall bear interest, calculated at the interest
rate from time to time announced by Citibank, N.A., as its prime rate plus 2%,
until payment is made to the Investor on behalf of the holders of all CVRs then
outstanding, and, upon the payment in full of any such amount, all of the CVRs
then outstanding and this Agreement shall thereupon automatically terminate and
become null and void without any further action on the part of any party hereto,
and the holders thereof and the parties hereto shall have no further rights with
respect thereto or hereto. The term "Default Amount" shall mean (i) with respect
to an Event of Default described in clause (a) of the first sentence of this
Section 3.01, the amount (payable as set forth in Section 1.07) that shall have
become due and payable at the Maturity Date or the Change of Control Date, as
the case may be and (ii) with respect to an Event of Default described in
clauses (b) or (c) of the first sentence of this Section 3.01, the amount
(payable as set forth in Section 1.07), if any, as determined by the Company
(which determination absent manifest error shall be final and binding on the
Company and the Investor), by which (x) the Reference Price exceeds (y) the
20-Day Average Price (with the 20-Day Average Price calculated as if the Default
Payment Date were the Maturity Date), subject to the Payment Cap.
SECTION 3.02. Remedies Cumulative; Delay or Omission Not Waiver of
Default. No right or remedy herein conferred upon the Investor is intended to be
exclusive of any other right or remedy, and every right and remedy shall, to the
extent permitted by law, be cumulative and in addition to every other right and
remedy given hereunder or now or hereafter existing at law or in equity or
otherwise. The assertion or employment of any right or remedy hereunder, or
otherwise, shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy. No delay or omission of the Investor to exercise
any right or power accruing upon any Event of Default occurring and continuing
as set forth in Section 3.01 shall impair any such right or power or shall be
construed to be a waiver of any such Event of Default or an acquiescence
therein.
10
Article IV
Other Change of Control Transactions
SECTION 4.01. Company May Merge, Etc. (a) If at any time prior to the
beginning of the Protection Period the Company proposes to enter into a Change
of Control Transaction in which the capital stock of the Company is exchanged
for or changed into other stock or securities or the Investor does not make an
Acceleration Election pursuant to Section 1.03 in connection with a Change of
Control Transaction during the Protection Period, the Company shall not
consummate such Change of Control Transaction, unless:
(i) the surviving person in such Change of Control Transaction, or any
ultimate parent thereof, if not the Company (the "Surviving Person"), is a
corporation, partnership or trust organized and existing under the laws of
the United States of America, any state thereof or the District of Columbia
and expressly assumes the obligation to pay all amounts payable in respect
of the CVRs and the performance of every covenant of this Agreement on the
part of the Company to be performed or observed;
(ii) immediately after giving effect to such transaction and treating
any indebtedness which becomes an obligation of the Surviving Person, the
Company or any subsidiary of the Surviving Person or the Company as a
result of such transaction as having been incurred by the Surviving Person,
the Company or such subsidiary at the time of such transaction, no Event of
Default shall have happened and be continuing; and
(iii) the Company has delivered to the Investor a certificate signed
by the chief executive officer or the chief financial officer of the
Company in his or her capacity as such an officer stating that such Change
of Control Transaction complies with this Article IV and that all
conditions precedent herein provided for relating to such transaction have
been complied with.
(b) Nothing in this Section 4.01 shall affect the right of the Investor
to make an Acceleration Election pursuant to Section 1.03 with respect to any
Change of Control Transaction proposed during the Protection Period, and, if the
Investor does not make such an Acceleration Election, the provisions of Section
1.06 shall apply to such Change of Control Transaction in accordance with their
terms.
SECTION 4.02. Successor Substituted. Upon the consummation of any
Change of Control Transaction in accordance with Section 4.01 in which the
Company is not the surviving person in such Change of Control Transaction or the
ultimate parent thereof, the Surviving Person shall succeed to, and be
substituted for, and may exercise every right and power of, the Company under
this Agreement with the same effect as if the Surviving Person had been named as
the Company herein and, thereafter, the predecessor person shall be relieved of
all obligations and covenants under this Agreement and the CVRs.
SECTION 4.03. Termination. This Agreement shall terminate and be of no
further force and effect without any further action on the part of any party
hereto automatically upon the termination of all outstanding CVRs in accordance
with the terms hereof.
11
Article V
General Provisions
SECTION 5.01. Notices. All notices or other communications required or
permitted to be given hereunder shall be in writing and shall be delivered by
hand or sent by facsimile or sent, postage prepaid, by registered, certified or
express mail or overnight courier service and shall be deemed given when so
delivered by hand or facsimile, or if mailed, three days after mailing (one
business day in the case of express mail or overnight courier service), as
follows:
(i) if to the Investor,
Vivendi Universal
▇▇, ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ Cedex 08
France
Fax: ▇▇-▇-▇▇▇▇-▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇▇▇▇ Hannezo
with a copy to:
Cravath, Swaine & ▇▇▇▇▇
Worldwide Plaza
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.; and
(ii) if to the Company,
EchoStar Communications Corporation
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, General Counsel
12
with a copy to:
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇ ▇. ▇'▇▇▇▇▇
SECTION 5.02. Interpretation; Exhibits and Schedules; Certain
Definitions. (a) The headings contained in this Agreement, in any Annex, Exhibit
or Schedule hereto and in the table of contents to this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. All Annexes, Exhibits and Schedules annexed
hereto or referred to herein are hereby incorporated in and made a part of this
Agreement as if set forth in full herein. Any capitalized terms used in any
Annex, Schedule or Exhibit but not otherwise defined therein, shall have the
meaning as defined in this Agreement. When a reference is made in this Agreement
to a Section, Annex, Exhibit or Schedule, such reference shall be to a Section
of, or an Annex, Exhibit or Schedule to, this Agreement unless otherwise
indicated.
(b) For all purposes hereof:
"affiliate" of any person means another person that directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with, such first person.
"control" (including the terms "controlling," "controlled by" and
"under common control with") means the possession, direct or indirect, of the
power to direct or cause the direction of the management and policies of a
person, whether through the ownership of voting securities, by contract, or
otherwise.
"including" means including, without limitation.
"person" means any individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust, unincorporated
association, joint venture, governmental authority or other entity of whatever
nature.
"subsidiary" of any person means another person, an amount of the
voting securities, other voting rights or voting partnership interests of which
is sufficient to elect at least a majority of its board of directors or other
governing body (or, if there are no such voting interests, 50% or more of the
equity interests of which) is owned directly or indirectly by such first person.
SECTION 5.03. Counterparts. This Agreement may be executed in one or
more counterparts, all of which shall be considered one and the same agreement,
and shall become effective when one or more such counterparts have been signed
by each of the parties and delivered to the other parties.
13
SECTION 5.04. Severability. This Agreement shall be deemed severable,
and the invalidity or unenforceability of any term or provision hereof shall not
affect the validity or enforceability of this Agreement or of any other term or
provision hereof. Furthermore, in lieu of any such invalid or unenforceable term
or provision, the parties hereto intend that there shall be added as a part of
this Agreement a provision as similar in terms to such invalid or unenforceable
provision as may be possible and be valid and enforceable.
SECTION 5.05. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York regardless of the
laws that might otherwise apply under applicable principles of law thereof.
SECTION 5.06. Amendments and Waivers. This Agreement may not be amended
except by an instrument in writing signed on behalf of each of the parties
hereto. By an instrument in writing, the Investor, on the one hand, or the
Company, on the other hand, may waive compliance by the other with any term or
provision of this Agreement that such other party was or is obligated to comply
with or perform.
14
IN WITNESS WHEREOF, the Company and the Investor have duly executed
this Agreement as of the date first written above.
ECHOSTAR COMMUNICATIONS
CORPORATION,
By:
-------------------------------------
Name:
Title:
VIVENDI UNIVERSAL, S.A.,
By:
------------------------------------
Name
Title:
EXHIBIT A
FORM OF NOTICE OF SALE
On [insert date], the Investor sold [insert number] shares of Class A
Common Stock, which shares were issued to the Investor upon the conversion of
shares of Preferred Stock or upon consummation of the Merger. The number of CVRs
held by the Investor as indicated on Schedule I to the Contingent Value Rights
Agreement dated as of /o/, between EchoStar Communications Corporation and
Vivendi Universal, S.A. (the "CVR Agreement") should, accordingly, be reduced by
the number of shares of Class A Common Stock indicated above as having been
sold, in accordance with Section 1.04 of the CVR Agreement. Terms used but not
defined herein have the meanings ascribed thereto in the CVR Agreement.
Very truly yours,
VIVENDI UNIVERSAL, S.A.,
by
----------------------------------
Name:
Title:
SCHEDULE I
OUTSTANDING CVRs
I. Initial CVR Amount: 57,604,790
II. Adjustments
Number of
Shares of
Adjustments for Date of Class A Adjustments Number of
Sales of Class A Notice of Common Pursuant to CVRs Reference
Common Stock Sale Stock Sold Section 1.06 Outstanding Price
---------------- --------- ---------- ------------ ----------- ---------
EXHIBIT B
[Form of]
REGISTRATION RIGHTS AGREEMENT
EXHIBIT B
================================================================================
REGISTRATION RIGHTS AGREEMENT
between
ECHOSTAR COMMUNICATIONS CORPORATION,
and
VIVENDI UNIVERSAL, S.A.
-----------------------------
Dated as of
/o/
-----------------------------
================================================================================
TABLE OF CONTENTS
Page
ARTICLE I
Definitions
SECTION 1.01. Definitions..........................................1
ARTICLE II
Registration Rights
SECTION 2.01. Piggy-Back Registration..............................4
SECTION 2.02. Demand Registration..................................6
SECTION 2.03. Other Matters in Connection with Registrations.......7
SECTION 2.04. Certain Delay Rights.................................7
SECTION 2.05. Expenses.............................................9
SECTION 2.06. Registration and Qualification.......................9
SECTION 2.07. Underwriting........................................12
SECTION 2.08. Indemnification and Contribution....................13
SECTION 2.09. Holdback Agreements.................................15
SECTION 2.10. Priority Rights of Holders..........................16
SECTION 2.11. Holder Covenants....................................16
SECTION 2.12. Termination.........................................17
ARTICLE III
Miscellaneous
SECTION 3.01. Amendments and Waivers..............................17
SECTION 3.02. Notices.............................................17
SECTION 3.03. Interpretation......................................18
SECTION 3.04. Severability........................................19
SECTION 3.05. Counterparts........................................19
SECTION 3.06. Entire Agreement; No Third-Party Beneficiaries......19
SECTION 3.07. Governing Law.......................................19
SECTION 3.08. Assignment..........................................19
SECTION 3.09. Enforcement.........................................19
i
REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated as of /o/,
between ECHOSTAR COMMUNICATIONS CORPORATION, a Nevada corporation (the
"Company"), and the Holders, as defined herein.
WHEREAS, pursuant to the Investment Agreement dated as of December 14,
2001 (the "Investment Agreement"), between the Company and Vivendi Universal,
S.A., a societe anonyme organized under the laws of France (the "Investor"), and
as a condition to the willingness of the Investor to consummate the transactions
contemplated by the Investment Agreement, the Company has agreed to grant to the
Holders (as defined below) certain registration rights with respect to their
respective Registrable Securities (as defined below).
NOW, THEREFORE, in consideration of the premises and the consummation
of the transactions contemplated by this Agreement and the Investment Agreement
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto hereby agree as follows:
ARTICLE I
Definitions
SECTION 1.01. Definitions.
The following terms, when used in this Agreement, shall have the
following meanings:
"affiliate" of any person means another person that, directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with, the first person.
"Board of Directors" means the Board of Directors of the Company or any
duly authorized committee of that board.
"Class A Common Stock" means the Class A common stock, par value $0.01
per share, of the Company.
"Commission" means the Securities and Exchange Commission or any
successor governmental body or agency.
"control" (including the terms "controlling," "controlled by" and
"under common control with") means the possession, direct or indirect, of the
power to direct or cause the direction of the management and policies of a
person, whether through the ownership of voting securities, by contract, or
otherwise.
"CVR Agreement" means the Contingent Value Rights Agreement dated as of
/o/, between the Company and the Investor.
"Demand Registration" has the meaning ascribed thereto in Section
2.02(a)(i).
2
"Demand Request" has the meaning ascribed thereto in Section 2.02(a).
"Disadvantageous Condition" has the meaning ascribed thereto in Section
2.04.
"Effective Period" means the period from the date on which the Merger
Agreement is terminated in accordance with its terms until the first date on
which all Registrable Securities are eligible for sale in their entirety
pursuant to Rule 144 in a 150-day period, based on the then average trading
volume of such Registrable Securities.
"Governmental Authority" means any federal, state or local court or
governmental or regulatory agency or authority or applicable stock exchange or
trading market.
"Holder" means a person who owns Registrable Securities and is:
(i) the Investor;
(ii) a wholly owned subsidiary of the Investor; or
(iii) any transferee which has acquired from the Investor or a wholly
owned subsidiary of the Investor (x) Class A Common Stock that represented
20% or more of the Class A Common Stock issuable upon conversion of all the
Preferred Stock (defined below) on the date of issuance of such Preferred
Stock, as adjusted for stock splits, combinations, subdivisions and other
similar changes to the capital structure of the Company; plus, at any time
after the Maturity Date, the Change of Control Date or the Default Payment
Date, as applicable (each as defined in the CVR Agreement) (y) at least 20%
of the Class A Common Stock, if any, issued pursuant to the settlement of
the contingent value rights issued pursuant to the CVR Agreement (the
"CVRs").
"Inspectors" has the meaning ascribed thereto in Section 2.06(h).
"Investment Agreement" has the meaning ascribed thereto in the recitals
of this Agreement.
"1933 Act" means the Securities Act of 1933, as amended.
"1934 Act" or "Exchange Act" means the Securities Exchange Act of 1934,
as amended.
"Merger Agreement" means the Agreement and Plan of Merger dated as of
October 28, 2001, by and between the Company and ▇▇▇▇▇▇ Electronics Corporation,
a Delaware corporation, as it may be amended from time to time.
"person" means any individual, firm, corporation, partnership, limited
liability company, trust, joint venture, Governmental Entity or other entity.
"Piggy-back Registration" has the meaning ascribed thereto in Section
2.01(a).
3
"Preferred Stock" means the Series D mandatorily convertible
participating preferred stock, par value $0.01 per share, issued pursuant to the
Investment Agreement.
"Records" has the meaning ascribed thereto in Section 2.06(h).
"Registrable Securities" means Class A Common Stock (x) issued or
issuable upon conversion of any Preferred Stock issued pursuant to the
transactions contemplated by the Investment Agreement, or (y) Class A Common
Stock issued pursuant to the settlement of the CVRs pursuant to the CVR
Agreement.
As used in this definition of Registrable Securities, (A) the term
"Class A Common Stock" shall include any shares of stock or other securities
into which or for which shares of Class A Common Stock may hereafter be changed,
converted or exchanged and any other shares or securities issued to holders of
Class A Common Stock (or such shares of stock or other securities into which or
for which shares of Class A Common Stock are so changed, converted or exchanged)
upon any reclassification, share combination, share subdivision, share dividend,
share exchange, merger, consolidation or similar transaction or event and (B)
the term "Preferred Stock" shall include any shares of stock or other securities
into which or for which shares of Preferred Stock may hereafter be changed,
converted or exchanged and any other shares or securities issued to holders of
Preferred Stock (or such shares of stock or other securities into which or for
which shares of Preferred Stock are so changed, converted or exchanged) upon any
reclassification, share combination, share subdivision, share dividend, share
exchange, merger, consolidation or similar transaction or event.
As to any particular Registrable Securities, such Registrable
Securities shall cease to be Registrable Securities as soon as (A) such
Registrable Securities have been sold or otherwise disposed of pursuant to a
registration statement that was filed with the Commission in accordance with
this Agreement and declared effective under the 1933 Act, (B) based on an
opinion of counsel reasonably acceptable to the Company and the Holder of such
Registrable Securities, such Registrable Securities are eligible for sale in
their entirety pursuant to Rule 144 in a 150-day period, based on the then
average trading volume of such Registrable Securities, (C) such Registrable
Securities shall have been otherwise sold, transferred or disposed of by a
Holder to any person that is not a Holder or (D) such Registrable Securities
shall have ceased to be outstanding.
"Registration Expenses" means any and all expenses incident to the
Company's performance of or compliance with the provisions of this Agreement,
including (i) the fees, disbursements and expenses of the Company's counsel and
accountants (including in connection with the delivery of opinions and comfort
letters); (ii) all expenses and fees of compliance with securities and blue sky
laws; (iii) all expenses and fees, including filing fees, in connection with the
preparation, printing and filing of one or more registration statements (and
amendments thereto) pursuant to this Agreement; (iv) the cost of producing or
printing any agreements among underwriters and underwriting agreements and any
blue sky memoranda and legal investment memoranda; (v) the expenses and fees,
including filing fees, incident to securing any required review by the National
Association of Securities Dealers, Inc. of the Registrable Securities to be
disposed of or the terms of any disposition of Registrable Securities; (vi) all
fees and expenses
4
payable in connection with the quotation of any Registrable Securities on any
automated interdealer quotation system or the listing of any Registrable
Securities on any securities exchange on which the Class A Common Stock is then
quoted or listed; (vii) all transfer agents' and registrars' expenses and fees
in connection with any offering or disposition of Registrable Securities; (viii)
all security engraving and security printing expenses; (ix) all messenger and
delivery expenses and fees; provided, however, that Registration Expenses shall
exclude (w) all transfer taxes, if any, relating to the sale or disposition of
the Registrable Securities; (x) all underwriting discounts and underwriting
commissions, if any, in connection with the sale of any Registrable Securities;
(y) the fees and expenses of counsel and other advisors for any Holder and (z)
all out-of-pocket expenses of the underwriters, if any, including fees and
expenses of counsel for the underwriters.
"Rule 144" means Rule 144 (or any successor rule to similar effect)
promulgated under the 1933 Act.
"Section 2.04 Period" has the meaning ascribed thereto in Section 2.04.
"Section 2.06(e) Period" has the meaning ascribed thereto in Section
2.06(e).
"Selling Holder" means any Holder who sells Registrable Securities
pursuant to a public offering registered pursuant to this Agreement.
Internal References. Unless the context indicates otherwise, references
to Articles, Sections and paragraphs shall refer to the corresponding articles,
sections and paragraphs in this Agreement, and references to the parties shall
mean the parties to this Agreement.
ARTICLE II
Registration Rights
SECTION 2.01. Piggy-Back Registration. (a) Whenever during the
Effective Period the Company shall propose to file a registration statement
under the 1933 Act relating to its Class A Common Stock (other than pursuant to
a registration statement on Form S-4 (or any other registration statement
registering shares to be issued in a merger, consolidation, acquisition or
similar transaction) or Form S-8 or any successor forms, or an offering of
securities in connection with an exchange offer to existing stockholders or
otherwise pursuant to a dividend reinvestment plan, stock purchase plan or other
employee benefit plan), whether or not for its own account, the Company shall
(i) provide a written notice at least 30 days prior to the filing thereof to
each Holder, specifying the approximate date on which the Company proposes to
file such registration statement and advising such Holder of its right to have
any or all (subject to Section 2.01(b)) of the Registrable Securities held by
such Holder included among the securities to be covered thereby and (ii) at the
written request of any such Holder received by the Company within 20 days after
the date of such written notice from the Company, include (subject to Section
2.01(b) and such Holder's compliance with Section 2.11(c)) among the securities
covered by such registration statement the number of Registrable Securities that
such Holder shall have requested be so included (a "Piggy-back Registration").
The Company shall require
5
the lead or managing underwriter, if any, of any proposed underwritten offering
to permit the Holders of Registrable Securities requested to be covered by the
registration statement for such offering to include (subject to Section 2.01(b)
and such Holder's compliance with Section 2.11(c)) such securities in such
offering on the same terms and subject to the same conditions as any similar
securities included therein; provided, however, that the Company shall not be
required under this Section 2.01(a) to use any efforts to cause any lead or
managing underwriter of any such offering to permit any such Holder to include
any such securities in such offering unless such Holder accepts the terms of any
underwriting agreed upon between the Company (and any other Holder whose
securities are included in such offering) and such underwriter (and any other
underwriter) and performs such Holder's obligations thereunder.
(b) Each Holder of Registrable Securities desiring to participate in a
Piggy-back Registration may include shares of Class A Common Stock in any
registration statement relating to such offering to the extent that the
inclusion of such shares of Class A Common Stock shall not reduce the number of
shares of Class A Common Stock to be offered and sold by the Company pursuant
thereto. If the Company or lead or managing underwriter for an underwritten
offering pursuant to Section 2.01(a) determines that marketing factors require a
limitation on the number of shares of Class A Common Stock to be offered and
sold by the stockholders of the Company in such offering, there shall be
included in the offering only that number of shares of Class A Common Stock of
stockholders of the Company that the Company or such lead or managing
underwriter reasonably and in good faith believes will not jeopardize the
success of the offering of all the shares of Class A Common Stock that the
Company desires to sell for its own account (including a material reduction in
the price per share of the shares of Class A Common Stock to be sold).
In such event, and provided the lead or managing underwriter has so
notified the Company in writing (if applicable), the number of shares of Class A
Common Stock to be offered and sold by stockholders of the Company, including
Holders of Registrable Securities desiring to participate in such offering,
shall be allocated among such stockholders of the Company pro rata on the basis
of the relative number of shares requested to be included therein by each such
stockholder.
(c) Nothing in this Section 2.01 shall create any liability on the part
of the Company to the Holders of Registrable Securities if the Company for any
reason should decide not to file a registration statement proposed to be filed
pursuant to Section 2.01(a) or to withdraw a registration statement filed
pursuant to Section 2.01(a) subsequent to its filing, regardless of any action
whatsoever that a Holder may have taken, whether as a result of the issuance by
the Company of any notice under this Section 2.01 or otherwise; provided that
the Investor shall be entitled to initiate or continue such registration as a
Demand Registration pursuant to Section 2.02 following such failure to file or
withdrawal to the extent that such registration by the Investor would otherwise
satisfy the requirements of Section 2.02 and provided further that the Company
shall be obligated to pay all Registration Expenses to the extent incurred in
connection with any such registration statement proposed to be filed or
withdrawn subsequent to its filing.
6
(d) A request by Holders to include Registrable Securities in a
proposed underwritten offering pursuant to Section 2.01(a) shall not be deemed
to be a request for a Demand Registration.
SECTION 2.02. Demand Registration. (a) Upon written notice to the
Company from the Investor at any time during the Effective Period (the "Demand
Request") requesting that the Company effect the registration under the 1933 Act
of any or all of the Registrable Securities held by the Investor or any other
Holder, which notice shall specify the intended method or methods of disposition
of such Registrable Securities, the Company shall prepare and, as promptly as is
practicable, and in any event within 60 days after such request, file with the
Commission a registration statement with respect to such Registrable Securities
and thereafter use its best efforts to cause such registration statement to be
declared effective under the 1933 Act for purposes of dispositions in accordance
with the intended method or methods of disposition stated in such request.
Notwithstanding any other provision of this Agreement to the contrary:
(i) the Investor may exercise its rights to request registration in
respect of Registrable Securities held by the Investor or any other Holder
under this Section 2.02(a) on not more than four occasions (each such
registration being referred to herein as a "Demand Registration"); and
(ii) the Company shall not be required to effect more than one Demand
Registration in any calendar year.
(b) Notwithstanding any other provision of this Agreement to the
contrary, a Demand Registration requested by the Investor pursuant to this
Section 2.02 shall not be deemed to have been effected, and, therefore, not
requested and the rights of the Investor shall be deemed not to have been
exercised for purposes of Section 2.02(a), (i) if the Investor has not received
notice (confirmed by the Commission) that such Demand Registration has become
effective under the 1933 Act or (ii) if such Demand Registration, after it
became effective under the 1933 Act, was not maintained effective under the 1933
Act (other than as a result of any stop order, injunction or other order or
requirement of the Commission or other Governmental Entity solely on the account
of a material misrepresentation or omission of the Investor) for at least 120
days (or such shorter period ending when all the Registrable Securities covered
thereby have been disposed of pursuant thereto (but in no event before the
expiration of the 90-day period referred to in Section 4(3) of the 1933 Act and
Rule 174 promulgated thereunder, if applicable)).
The time periods referred to in the preceding sentence shall be
extended, with respect to any Demand Registration, by the number of days in any
Section 2.04 Period and/or Section 2.06(e) Period applicable to such Demand
Registration.
If a Demand Request is made by the Investor during the Effective Period
but the related Demand Registration shall be deemed not to have been exercised
under the circumstances set forth in this Section 2.02(b), then the Investor
shall be deemed not to have used one of its rights to request a Demand
Registration under this Section 2.02 and shall continue to have such right.
7
(c) The Company shall have the same rights to piggy-back any shares of
Class A Common Stock on a Demand Registration initiated pursuant to this Section
2.02 as a Holder of Registrable Securities would have in a Piggy-back
Registration, and other stockholders of the Company may exercise any piggy-back
registration rights granted to them by the Company with respect to such Demand
Registration; provided however, that notwithstanding anything to the contrary in
this Agreement, if the lead or managing underwriter referred to in Section 2.03
determines that marketing factors require a limitation on the number of shares
of Class A Common Stock to be offered and sold pursuant to such Demand
Registration, there shall be included in the offering only that number of shares
of Class A Common Stock that such lead or managing underwriter reasonably and in
good faith believes will not jeopardize the success of the offering (including a
material reduction in the price per share of the Registrable Securities to be
sold). In such event, the shares of Class A Common Stock to be included in such
Demand Registration shall be apportioned (i) first, to any Registrable
Securities that the Holders propose to sell in such Demand Registration, pro
rata among such Holders on the basis of the relative number of Registrable
Securities requested to be included therein by each such Holder, (ii) second, to
any Class A Common Stock that the Company proposes to sell in such Demand
Registration and (iii) third, among any shares of Class A Common Stock that
other stockholders of the Company propose to sell in such Demand Registration,
pro rata among such stockholders on the basis of the relative number of shares
requested to be included therein by each such stockholder.
SECTION 2.03. Other Matters in Connection with Registrations. In the
event that any Demand Registration shall involve, in whole or in part, an
underwritten offering, the Investor shall have the right to designate an
underwriter or underwriters as the lead or managing underwriter or underwriters
of such underwritten offering, subject to the approval of Company, which
approval shall not be unreasonably withheld.
SECTION 2.04. Certain Delay Rights. Notwithstanding any other provision
of this Agreement to the contrary, if at any time while a registration statement
relating to a Piggy-back Registration or a Demand Registration is effective, the
Company provides written notice to each Holder of Registrable Securities covered
by any such registration statement that the Board of Directors has determined,
in its reasonable business judgment, that it would be materially disadvantageous
to the Company (because the sale of Registrable Securities covered by such
registration statement or the disclosure of information therein or in any
related prospectus or prospectus supplement would materially interfere with or
otherwise adversely affect in any material respect any acquisition, financing,
corporate reorganization or other material transaction or development involving
the Company (a "Disadvantageous Condition")) for sales of Registrable Securities
thereunder to then be permitted, and setting forth in general terms the reasons
for such determination, the Company may refrain from maintaining current the
prospectus contained in such registration statement until such Disadvantageous
Condition no longer exists (notice of which the Company shall promptly deliver
to each Holder or Registrable Securities covered by such registration
statement).
Furthermore, notwithstanding any other provision of this Agreement to
the contrary, with respect to any registration statement filed, or to be filed,
pursuant to Section 2.01 or 2.02, if the Company provides written notice to each
Holder of Registrable Securities to be covered by such registration statement
that the Board of Directors has determined, in its
8
reasonable business judgment, that it would be materially disadvantageous to the
Company (because of a Disadvantageous Condition) for such a registration
statement to be maintained effective, or to be filed or to become effective, and
setting forth in general terms the reasons for such determination, the Company
shall be entitled to cause such registration statement to be withdrawn or the
effectiveness of such registration statement to be terminated, or, in the event
no registration statement has been filed, the Company shall be entitled to not
file such registration statement, until such Disadvantageous Condition no longer
exists (notice of which the Company shall promptly deliver to each Holder of
Registrable Securities covered, or to be covered, by such registration
statement).
With respect to each Holder of Registrable Securities covered by any
registration statement relating to a Piggy-back Registration or a Demand
Registration, upon receipt by such Holder of any notice from the Company of a
Disadvantageous Condition, such Holder shall forthwith discontinue use of the
prospectus and any prospectus supplement under such registration statement and
shall suspend sales of Registrable Securities until such Disadvantageous
Condition no longer exists. Furthermore, if so directed by the Company by such
notice, such Holder will deliver to the Company all copies (other than permanent
file copies) then in such Holder's possession of the prospectus and prospectus
supplements then covering such Registrable Securities at the time of receipt of
such notice. In the event that the Company makes an election under this Section
2.04, each Holder agrees to keep confidential the fact of such election and any
information provided by the Company in connection therewith.
Notwithstanding any other provision of this Agreement to the contrary,
(i) the maintaining current of a prospectus (and the suspension of sales of
Registrable Securities) in connection with a Demand Registration may not be
delayed under this Section 2.04 for more than a total of 90 days in any
twelve-month period and (ii) neither the filing nor the effectiveness of any
registration statement under Section 2.02 may be delayed for more than a total
of 90 days pursuant to this Section 2.04. The time period during which any
registration statement under Section 2.02 must be maintained effective pursuant
to Section 2.02(b) shall be extended by the number of days in any delay period
imposed pursuant to this Section 2.04 (a "Section 2.04 Period"). In no event
shall the Company be entitled to delay the maintaining current of a prospectus
(and the suspension of sales of Registrable Securities) in connection with any
Demand Registration or to delay the filing or effectiveness of any registration
statement under Section 2.02 unless the Company shall (i) concurrently prohibit
sales by other security holders under registrable statements covering securities
held by such other securityholders and (ii) forbid purchases and sales of
securities of the Company in the open market by senior executives of the
Company, other than pursuant to a "written plan for trading securities", as such
phrase is used under Rule 10b5-1 under the Exchange Act.
In the event any registration statement in respect of a Demand
Registration is withdrawn or the effectiveness of such registration statement is
terminated, or a registration statement is not filed in respect of a Demand
Registration, in each case pursuant to this Section 2.04, then the Investor
shall have the right to withdraw its request for such Demand Registration at any
time following receipt of any notice from the Company of a Disadvantageous
Condition, and, if the Investor so withdraws its request, the Investor shall be
deemed not to have used one of its rights to request a Demand Registration under
Section 2.02 and shall continue to have such right.
9
SECTION 2.05. Expenses. Except as otherwise provided in this Agreement,
the Company shall pay all Registration Expenses with respect to each
registration under this Agreement.
SECTION 2.06. Registration and Qualification. If and whenever the
Company is required by the provisions of this Agreement to effect the
registration of any Registrable Securities under the 1933 Act as provided in
Section 2.01 or 2.02, the Company shall as promptly as practicable (but subject,
in the case of any registration as provided in Section 2.02, to the provisions
thereof):
(a) prepare and file with the Commission (within 60 days after such
request) a registration statement (as well as any necessary supplements and
amendments thereto) which counsel for the Company shall deem appropriate on such
form as shall be available for the sale of such Registrable Securities in
accordance with the intended method of distribution thereof and use its best
efforts to cause such registration statement to become effective and remain
effective until the earlier to occur of (i) such time as all Registrable
Securities covered by such registration statement have been disposed of in
accordance with the intended methods of disposition set forth in such
registration statement (but in no event before the expiration of the 90-day
period referred to in Section 4(3) of the 1933 Act and Rule 174 promulgated
thereunder, if applicable) and (ii) 120 days after such registration statement
becomes effective which period shall be extended in the case of any Demand
Registration by the number of days in any Section 2.04 Period and/or Section
2.06(e) Period applicable to such Demand Registration; provided, however, that,
before filing a registration statement or prospectus or any amendments or
supplements thereto, or comparable statements under securities or blue sky laws
of any jurisdiction, the Company shall (x) provide counsel selected by the
Investor with an opportunity to participate in the preparation of such
registration statement and each prospectus included therein (and each amendment
or supplement thereto) to be filed with the Commission, which shall be subject
to the review and approval (which approval shall not be unreasonably withheld)
of such counsel, and (y) notify each Selling Holder and such counsel of any stop
order issued or, to the best knowledge of the Company, threatened by the
Commission and take all reasonable action required to prevent the entry of such
stop order or to remove it if entered;
(b) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration statement effective
until the earlier to occur of (i) such time as all Registrable Securities
covered by such registration statement have been disposed of in accordance with
the intended methods of disposition set forth in such registration statement
(but in no event before the expiration of the 90-day period referred to in
Section 4(3) of the 1933 Act and Rule 174 promulgated thereunder, if applicable)
and (ii) 120 days after such registration statement becomes effective which
period shall be extended in the case of any Demand Registration by the number of
days in any Section 2.04 Period and/or Section 2.06(e) Period applicable to such
Demand Registration, and comply with the provisions of the 1933 Act with respect
to the disposition of all securities covered by such registration statement
during such period in accordance with the intended methods of disposition set
forth in such registration statement;
10
(c) furnish, without charge, to each Holder of such Registrable
Securities and to any underwriter of such Registrable Securities, prior to the
filing of such registration statement, copies of such registration statement as
proposed to be filed and thereafter such number of copies of such registration
statement, each amendment and supplement thereto (in each case, including all
exhibits thereto), the prospectus included in such registration statement
(including each preliminary prospectus), in conformity with the requirements of
the 1933 Act, such documents incorporated by reference in such registration
statement or prospectus and such other documents as such Holder or underwriter
may reasonably request, in order to facilitate the sale of the Registrable
Securities by the Selling Holders;
(d) use its commercially reasonable efforts to register or qualify such
Registrable Securities under such other securities or blue sky laws of such
jurisdictions as each Holder of Registrable Securities covered by such
Registration Statement requests and do any and all other acts and things which
may be reasonably necessary or advisable to enable each such Holder to
consummate the disposition of the Registrable Shares held by such Holder in such
jurisdictions; provided that the Company shall not be required to (i) qualify
generally to do business in any jurisdiction in which it would not otherwise be
required to qualify but for this Section 2.06(d), (ii) subject itself to
taxation in any such jurisdiction or (iii) consent to general service of process
in any such jurisdiction;
(e) promptly notify each Selling Holder in writing (i) at any time when
a prospectus relating to such Registrable Securities is required to be delivered
under 1933 Act, upon discovery that, or upon the occurrence of any event as a
result of which, the prospectus included in such registration statement contains
an untrue statement of a material fact or omits to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading in light of the circumstances under which they were made or (ii) of
any request by the Commission or any other Governmental Entity for any amendment
of or supplement to any registration statement or other document relating to
such offering, and in either such case the Company shall promptly prepare a
supplement or amendment to such prospectus and furnish to each Selling Holder a
reasonable number of copies of a supplement to or an amendment of such
prospectus as may be necessary so that, after delivery to the purchasers of such
Registrable Securities, such prospectus shall not contain an untrue statement of
a material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading in light of the
circumstances under which they were made (the number of days from (x) the date
the written notice contemplated by this paragraph (e) is given by the Company to
(y) the date on which the Company delivers to the Selling Holders the supplement
or amendment contemplated by this paragraph (e) is referred to in this Agreement
as a "Section 2.06(e) Period");
(f) use its commercially reasonable efforts to cause such Registrable
Securities to be registered with or approved by such other Governmental Entities
as may be necessary by virtue of the business and operations of the Company to
enable each Holder of Registrable Securities covered by such Registration
Statement to consummate the disposition of the Registrable Securities held by
such Holder;
(g) enter into and perform customary agreements (including an
underwriting agreement in customary form, if the offering is underwritten) and
take such other actions as are
11
reasonably required in order to expedite or facilitate the disposition of such
Registrable Securities, and each Selling Holder shall also enter into and
perform its obligations under such agreements;
(h) make available for inspection by any lead or managing underwriter
participating in any disposition pursuant to such registration statement, any
Selling Holder, counsel selected by the Investor and any attorney, accountant or
other agent retained by any lead or managing underwriter, or the Investor
(collectively, the "Inspectors") all financial and other records, pertinent
corporate documents and properties of the Company (collectively, the "Records")
as shall be reasonably necessary to enable the Inspectors to exercise their due
diligence responsibility and cause the Company's officers, directors and
employees and the independent public accountants of the Company to supply all
information reasonably requested by any such Inspector in connection with such
registration statement. Any Records that the Company determines, in good faith,
to be confidential and in respect of which the Company notifies each Selling
Holder that such Records are confidential shall not be disclosed by the
Inspectors unless (x) the disclosure of such Records is necessary to avoid or
correct a misstatement or omission in the applicable registration statement (in
which case, the Selling Holders shall cooperate with the Company in seeking
confidential treatment of such Records) or (y) the release of such Records is
ordered pursuant to a subpoena or other order from a court of competent
jurisdiction. Each Selling Holder agrees that it shall, upon learning that
disclosure of such Records is sought in a court of competent jurisdiction, give
notice to the Company and allow the Company, at the Company's expense, to
undertake appropriate action to prevent disclosure of such Records;
(i) in the event such sale is effected pursuant to an underwritten
offering, obtain a "comfort" letter or comfort letters from the Company's
independent public accountants in customary form and covering such matters of
the type customarily covered by cold comfort letters as counsel for the lead or
managing underwriter or counsel for the Investor reasonably requests;
(j) furnish, at the request of any Selling Holder, on the date such
Registrable Securities are delivered to any underwriter for sale pursuant to
such registration or, if such Registrable Securities are not being sold through
any underwriter, on the date the registration statement with respect to such
Registrable Securities becomes effective, an opinion, dated as of such date, of
counsel representing the Company for the purposes of such registration,
addressed to the underwriters, if any, and to each Selling Holder, covering such
legal matters with respect to the registration as any Selling Holder may
reasonably request and are customarily included in such opinions;
(k) otherwise use its best efforts to comply with all applicable rules
and regulations of the Commission and make available to each Selling Holder, as
soon as reasonably practicable, an earnings statement covering a period of 12
months beginning after the effective date of the registration statement, in a
manner which satisfies the provisions of Section 11(a) of the 1933 Act;
(l) cause all such Registrable Securities to be quoted on each
interdealer quotation system or listed on each securities exchange, if any, on
which other securities of the
12
same class issued by the Company are then quoted or listed (subject to notice of
issuance); provided that the applicable listing requirements are satisfied;
(m) use its commercially reasonable efforts to assist the Selling
Holders in the marketing of Registrable Securities in connection with
underwritten offerings (including, to the extent reasonably consistent with work
commitments, using reasonable efforts to have officers of the Company
participate in "road shows" and analyst or investor presentations scheduled in
connection with such registration provided that the Selling Holders shall give
such officers reasonable advance notice concerning the scheduling of any such
presentations);
(n) if requested, furnish for delivery in connection with the closing
of any offering of Registrable Securities pursuant to a registration effected
pursuant to Section 2.01 or 2.02 unlegended certificates representing ownership
of the Registrable Securities being sold in such denominations as shall be
requested by the Selling Holders or the underwriters;
(o) promptly notify the Selling Holders of any stop order issued or, to
the Company's knowledge, threatened to be issued by the Commission and take all
reasonable actions required to prevent the entry of such stop order or to remove
it if entered;
(p) cause the Registrable Securities to be included in any registration
statement not later than the effective date of such registration statement;
(q) cooperate with each Selling Holder and each Underwriter
participating in the disposition of such Registrable Securities and their
respective counsel in connection with any filings required to be made with the
National Association of Securities Dealers, Inc.;
(r) during the period when the prospectus is required to be delivered
under the Securities Act, promptly file all documents required to be filed by
the Company with the Commission pursuant to Sections 13(a), 13(c), 14 or 15(d)
of the Exchange Act; and
(s) keep each Selling Holder reasonably advised as to the initiation
and progress of such registration.
SECTION 2.07. Underwriting. If requested by the underwriters for any
underwritten offering of Registrable Securities pursuant to a registration
requested under Section 2.02(a), the Company shall enter into an underwriting
agreement with such underwriters for such offering, which agreement will contain
such representations and warranties by the Company and such other terms and
provisions as are customarily contained in underwriting agreements with respect
to secondary distributions, including indemnification and contribution
provisions substantially to the effect and to the extent provided in Section
2.08, and agreements as to the provision of opinions of counsel and accountants'
letters to the effect and to the extent provided in Sections 2.06(i) and
2.06(j), respectively. Such underwriting agreement shall also contain such
representations and warranties by such Selling Holders and such other terms and
provisions as are customarily contained in underwriting agreements with respect
to secondary distributions, including indemnification and contribution
provisions substantially to the effect and to the extent provided in Section
2.08.
13
SECTION 2.08. Indemnification and Contribution. (a) The Company agrees
to indemnify and hold harmless, to the fullest extent permitted by law, each
Holder, its officers, directors, agents, trustees, stockholders and each person,
if any, who controls each Holder (within the meaning of either Section 15 of the
1933 Act or Section 20 of the ▇▇▇▇ ▇▇▇) and any investment advisor of such
Holder from and against any and all losses, claims, damages, liabilities and
expenses (including reasonable costs of investigation and reasonable attorneys'
fees, disbursements and expenses) arising out of or based upon (i) any untrue
statement or alleged untrue statement of a material fact contained in any
registration statement or any amendment thereof, any preliminary prospectus or
prospectus (as amended or supplemented if the Company shall have furnished any
amendment or supplements thereto) relating to the Registrable Securities or any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, except insofar as such
untrue statement or omission or alleged untrue statement or omission was made
(x) in reliance upon and in conformity with any information furnished to the
Company in writing by such Holder or, if applicable, the underwriters, legal
counsel, or other agents of such Holder, expressly for use therein, (y) in any
prospectus used after such time as the Company advised such Holder in writing
that the filing of a post-effective amendment or supplement thereto was
required, other than such prospectus as so amended or supplemented or (z) in any
prospectus used after such time as the obligation of the Company to keep such
prospectus effective and current shall have expired or (ii) any violation by the
Company of the 1933 Act or the 1934 Act in connection with such registration.
The Company shall also indemnify any underwriters of the Registrable Securities,
their officers and directors and each person that controls such underwriters
(within the meaning of either Section 15 of the 1933 Act or Section 20 of the
▇▇▇▇ ▇▇▇) to the same extent and subject to the same limitations as provided in
this Section 2.08 with respect to the indemnification of the Holders; and
provided further that the Company shall not be liable for an underwriter's
failure to send or give a copy of the final prospectus or supplement to the
persons asserting an untrue statement or alleged untrue statement or omission or
alleged omission at or prior to the written confirmation of the sale of
Registrable Securities to such person if such statement or omission was
corrected in such final prospectus or supplement.
(b) In connection with any registration statement pursuant to which
Registrable Securities owned by any Holders are being registered as provided in
Section 2.01 or 2.02, each such Holder shall furnish to the Company in writing
such information with respect to such Holder as the Company may reasonably
request for use in connection with any such registration statement or related
prospectus and agrees to indemnify and hold harmless the Company, its officers,
directors, agents, trustees and stockholders and each person, if any, that
controls the Company (within the meaning of either Section 15 of the 1993 Act or
Section 20 of the ▇▇▇▇ ▇▇▇) from and against any and all losses, claims,
damages, liabilities and expenses (including reasonable costs of investigation
and reasonable attorneys' fees, disbursements and expenses) arising out of or
based upon any untrue statement or alleged untrue statement of a material fact
contained in any registration statement or any amendment thereof, any
preliminary prospectus or prospectus (as amended or supplemented if the Company
shall have furnished any amendment or supplement thereto) relating to the
Registrable Securities or any omission or alleged omission to state therein a
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, but only insofar as
such losses, claims, damages, liabilities and expenses are caused by information
furnished in writing
14
to the Company by such Holder, or, if applicable, the underwriters, legal
counsel, or other agents of such Holder, expressly for use therein; provided
however that in no event shall any Holder be required to indemnify any person
described in this Section 2.08(b) in an amount in excess of the amount of the
net proceeds received by such Holder in connection with sales of Registrable
Securities covered by any such registration under the Securities Act.
(c) Each party indemnified under paragraph (a) or (b) above shall,
promptly after receipt of notice of a claim or action against such indemnified
party in respect of which indemnity may be sought hereunder, notify the
indemnifying party in writing of the claim or action; provided that the failure
to notify the indemnifying party shall not relieve it from any liability that it
may have to an indemnified party on account of the indemnity agreement contained
in paragraph (a) or (b) above except to the extent that the indemnifying party
was actually substantially prejudiced by such failure, and in no event shall
such failure relieve the indemnifying party from any other liability that it may
have to such indemnified party. If any such claim or action shall be brought
against an indemnified party, and it shall have notified the indemnifying party
thereof, unless based on the advice of counsel to such indemnified party a
conflict of interest between such indemnified party and indemnifying parties may
exist in respect of such claim, the indemnifying party shall be entitled to
participate therein and, to the extent that it wishes, jointly with any other
similarly notified indemnifying party, to assume the defense thereof. After
notice from the indemnifying party to the indemnified party of its election to
assume the defense of such claim or action and the prompt undertaking of such
defense with counsel reasonably acceptable to the indemnified party, the
indemnifying party shall not be liable to the indemnified party under this
Section 2.08 for any legal or other expenses subsequently incurred by the
indemnified party in connection with the defense thereof. Any indemnifying party
against whom indemnity may be sought under this Section 2.08 shall not be liable
to indemnify an indemnified party if such indemnified party settles such claim
or action without the consent of the indemnifying party (such consent not to be
unreasonably withheld, delayed or conditional). The indemnifying party may not
agree to any settlement of any such claim or action, other than solely for
monetary damages for which the indemnifying party shall be responsible
hereunder, the result of which any remedy or relief shall be applied to or
against the indemnified party, without the prior written consent of the
indemnified party, which consent shall not be unreasonably withheld. In any
action hereunder as to which the indemnifying party has assumed the defense
thereof, the indemnified party shall continue to be entitled to participate in
the defense thereof, with counsel of its own choice, but the indemnifying party
shall not be obligated hereunder to reimburse the indemnified party for the
costs thereof unless (i) the indemnifying party agrees to pay such costs or (ii)
the indemnifying party fails to promptly assume and continue the defense of such
claim or action with counsel reasonably satisfactory to the indemnified party.
(d) If the indemnification provided for in this Section 2.08 from an
indemnifying party shall for any reason be unavailable to an indemnified party
(other than in accordance with its terms) in respect of any loss, claim, damage,
liability or expense referred to herein, then such indemnifying party shall, in
lieu of indemnifying such indemnified party, contribute to the amount paid or
payable by such indemnified party as a result of such loss, claim, damage,
liability or expense in such proportion as is appropriate to reflect the
relative fault of such indemnifying party on the one hand and of such
indemnified party on the other hand in connection with the statements or
omissions (or actions) that resulted in such losses,
15
claims, damages, liabilities or expenses as well as any other relevant equitable
considerations. The relative fault of the indemnifying party on the one hand and
the indemnified party on the other hand shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by such indemnifying party or indemnified party and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The amount paid or payable by an
indemnified party as a result of the loss, claim, damage, liability or expense
in respect thereof referred to above in this paragraph (d), shall be deemed to
include, for purposes of this paragraph (d), any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 2.08 were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in this paragraph (d). Notwithstanding
any other provision of this Section 2.08, no Holder shall be required to
contribute any amount in excess of the amount by which the proceeds of the
offering received by such Holder exceeds the amount of any damages which such
Holder has otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the ▇▇▇▇ ▇▇▇) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. Each Holder's
obligation to contribute is several in the proportion that the proceeds of the
offering received by such Holder bears to the total proceeds of the offering,
and not joint.
(e) The obligations of the parties under this Section 2.08 shall be in
addition to any liability that any party may otherwise have to any other party.
SECTION 2.09. Holdback Agreements.
(a) From the date of this Agreement to the date on which the Merger
Agreement is terminated in accordance with its terms, each Holder agrees not to
effect (and to cause its controlled affiliates not to effect) any sale or
distribution (including any open market sales and any offerings made in reliance
on Rule 144A under the 1933 Act or similar distribution) of any Registrable
Securities or any other equity security of the Company, or any securities
convertible into or exchangeable or exercisable for Registrable Securities or
other equity securities of the Company, including a sale pursuant to Rule 144
and any hedging or derivative transaction involving such securities.
(b) To the extent not inconsistent with applicable law, in the event
that any Registrable Securities shall be registered in connection with an
underwritten offering, each Holder agrees not to effect (and to cause its
controlled affiliates not to effect) any public sale or distribution (including
any open market sales and any offerings made in reliance on Rule 144A under the
1933 Act or similar distribution) of Registrable Securities or any other equity
security of the Company, or any securities convertible into or exchangeable or
exercisable for Registrable
16
Securities or other equity securities of the Company, including a sale pursuant
to Rule 144 and any hedging or derivative transaction involving any such
securities, during the 14 days prior to, and during the 90-day period beginning
on, the later of (i) the effective date of such registration or (ii) the
commencement of a public distribution of such Registrable Securities pursuant to
such registration, in each case if and to the extent requested by the Company or
the lead or managing underwriter of such underwritten offering.
(c) In connection with any registration of Registrable Securities in
connection with an underwritten offering, the Company agrees not to effect any
public sale or distribution of any of its equity securities, or any securities
convertible into or exchangeable or exercisable for its equity securities
(except pursuant to a registration statement on Form S-4 or Form S-8 or any
successor or similar forms thereto) during the 20 days prior to, and during the
90-day period beginning on, the later of (i) the effective date of such
registration or (ii) the commencement of a public distribution of such
Registrable Securities pursuant to such registration.
(d) In the event of a proposed offering of debt or equity securities by
the Company for its own account at any time during the Effective Period, whether
or not such offering is to be registered under the 1933 Act or any Registrable
Securities shall be registered in connection therewith, if requested in writing
by the Company, each Holder agrees not to effect (and to cause its controlled
affiliates not to effect) any public sale or distribution (including any open
market sales and offerings made in reliance on Rule 144A under the 1933 Act or
similar distribution) of Registrable Securities or any other equity security of
the Company, or any securities convertible into or exchangeable or exercisable
for Registrable Securities or other equity securities of the Company, including
a sale pursuant to Rule 144 and any hedging or derivative transaction involving
any such securities, for such period prior to or following such offering, not to
exceed 75 days in any calendar year, as the Company may so request.
SECTION 2.10. Priority Rights of Holders. The Company hereby agrees not
to enter into any agreement for the registration, sale or distribution of any of
the Company's securities with terms that conflict with the terms set forth in
this Agreement with respect to each Holder.
SECTION 2.11. Holder Covenants. Each Holder hereby covenants and agrees
that:
(a) it will not sell any Registrable Securities under any registration
statement covering Registrable Securities until is has received notice from the
Company that such registration statement and any post-effective amendments
thereto have become effective; provided that the Company shall notify each
Holder promptly when such registration statement and any post-effective
amendments thereto have become effective;
(b) it will comply with the prospectus delivery requirements of the
Securities Act as applicable to it in connection with the sales of Registrable
Securities pursuant to a registration statement;
(c) it shall promptly furnish to the Company such information regarding
the Holder, the Registrable Securities held by it and the distribution proposed
by
17
the Holder as the Company may request in writing and shall otherwise cooperate
with the Company to the extent such information or cooperation is required in
connection with any registration, qualification or compliance referred to in
this Agreement;
(d) it shall notify the Company as promptly as practicable of any
inaccuracy or change in information previously furnished to the Company or of
the happening of any event, in either case as a result of which any prospectus
relating to such registration contains an untrue statement of a material fact
regarding the Holder or the distribution of such Registrable Securities or omits
to state any material fact regarding the Holder or the distribution of such
Registrable Securities required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, and to furnish to the Company promptly any additional
information required to correct and update any previously furnished information
or required such that such prospectus shall not contain, with respect to the
Holder or the distribution of such Registrable Securities, an untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
SECTION 2.12. Termination. Effective immediately upon the consummation
of the transactions contemplated by the Merger Agreement, this Agreement (other
than Article III, which shall survive such termination) shall thereupon
automatically terminate and become null and void without any further action on
the part of any party hereto.
ARTICLE III
Miscellaneous
SECTION 3.01. Amendments and Waivers. This Agreement may not be amended
except by an instrument in writing signed on behalf of each of the parties
hereto. By an instrument in writing, the Investor, on the one hand, or the
Company, on the other hand, may waive compliance by the other with any term or
provision of this Agreement that such other party was or is obligated to comply
with or perform.
SECTION 3.02. Notices. All notices or other communications required or
permitted to be given hereunder shall be in writing and shall be delivered by
hand or sent by facsimile or sent, postage prepaid, by registered, certified or
express mail or overnight courier service and shall be deemed given when so
delivered by hand or facsimile (upon receipt of confirmation), or if mailed, one
day after mailing, as follows:
(a) If to the Company, to:
18
EchoStar Communications Corporation
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, General Counsel
with a copy to:
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq. and ▇▇▇▇ ▇. ▇'▇▇▇▇▇, Esq.
(b) If to the Investor or any other Holder, to:
Vivendi Universal
▇▇, ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ Cedex 08
France
Fax: ▇▇-▇-▇▇▇▇-▇▇▇▇
Attention: Mr. Guillamme Hannezo
with a copy to:
Cravath, Swaine & ▇▇▇▇▇
Worldwide Plaza
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Fax: ▇▇▇-▇▇▇-▇▇▇▇
SECTION 3.03. Interpretation. (a) The headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
(b) For all purposes hereof:
"including" means including, without limitation.
"subsidiary" of any person means another person, an amount of the
voting securities, other voting rights or voting partnership interests of which
is sufficient to elect at least a majority of its board of directors or other
governing body (or, if there are no such voting interests, 50% or more of the
equity interests of which) is owned directly or indirectly by such first person.
19
SECTION 3.04. Severability. This Agreement shall be deemed severable,
and the invalidity or unenforceability of any term or provision hereof shall not
affect the validity or enforceability of this Agreement or of any other term or
provision hereof. Furthermore, in lieu of any such invalid or unenforceable term
or provision, the parties hereto intend that there shall be added as a part of
this Agreement a provision as similar in terms to such invalid or unenforceable
provision as may be possible and be valid and enforceable.
SECTION 3.05. Counterparts. This Agreement may be executed in one or
more counterparts, all of which shall be considered one and the same agreement,
and shall become effective when one or more such counterparts have been signed
by each of the parties and delivered to the other parties.
SECTION 3.06. Entire Agreement; No Third-Party Beneficiaries. This
Agreement (i) constitutes the entire agreement and supersedes all prior
agreements and understandings, both written and oral, among the parties with
respect to the subject matter hereof and (ii) except for the provisions of
Section 2.08, is not intended to confer upon any person other than the parties
hereto any rights or remedies hereunder.
SECTION 3.07. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York regardless of the
laws that might otherwise apply under applicable principles of law thereof.
SECTION 3.08. Assignment. Except as provided in clause (ii) or (iii) of
the definition of Holder, neither this Agreement nor any of the rights,
interests or obligations under this Agreement shall be assigned, in whole or in
part, by operation of law or otherwise, by any of the parties without the prior
written consent of the other parties. Any purported assignment without such
consent shall be void. Subject to the preceding sentences, this Agreement will
be binding upon, inure to the benefit of, and be enforceable by, the parties and
their respective successors and assigns.
SECTION 3.09. Enforcement. The parties agree that irreparable damage
would occur and that the parties would not have any adequate remedy at law in
the event that any of the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise breached. It is
accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement in any New York state court, any
Federal court located in the State of New York or any Colorado state court or
Federal court located in the State of Colorado, this being in addition to any
other remedy to which they are entitled at law or in equity. In addition, each
of the parties hereto (i) consents to submit itself to the personal jurisdiction
of any New York state court or any Federal court located in the State of New
York or any Colorado state court or Federal court located in the State of
Colorado in the event any dispute arises out of this Agreement, (ii) agrees that
it will not attempt to deny or defeat such personal jurisdiction by motion or
other request for leave from any such court, (iii) agrees that it will not bring
any action relating to this Agreement in any court other than a New York state
court or any Federal court sitting in the State of New York or any Colorado
state court or Federal court located in the State of Colorado and (iv) waives
any right to trial by jury with respect to any claim or proceeding related to or
arising out of this Agreement or any transaction contemplated hereby.
IN WITNESS WHEREOF, the Company and the Holders have caused this
Agreement to be duly executed as of the day and year first above written.
ECHOSTAR COMMUNICATIONS CORPORATION,
by
---------------------------------------
Name:
Title:
VIVENDI UNIVERSAL, S.A.,
by
---------------------------------------
Name:
Title:
EXHIBIT C
[Form of]
CERTIFICATE OF DESIGNATIONS
EXHIBIT C
ECHOSTAR COMMUNICATIONS CORPORATION
CERTIFICATE OF DESIGNATIONS
ESTABLISHING THE
VOTING POWERS, DESIGNATIONS, PREFERENCES, LIMITATIONS,
RESTRICTIONS, AND RELATIVE RIGHTS OF
SERIES D MANDATORILY CONVERTIBLE PARTICIPATING PREFERRED
STOCK
PURSUANT TO SECTION 78.1955 OF THE
Nevada Revised Statutes
I, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, the Senior Vice President, General Counsel and
Secretary of EchoStar Communications Corporation (the "Issuer"), a corporation
organized and existing under the laws of the State of Nevada, do hereby certify
that pursuant to authority conferred upon the Board of Directors of the Issuer
by its Amended and Restated Articles of Incorporation and pursuant to the
provisions of Section 78.1955 of the Nevada Revised Statutes, the Issuer's Board
of Directors, on _____, 2002, adopted the following resolution establishing the
Issuer's Series D Mandatorily Convertible Participating Preferred Stock, which
resolution remains in full force and effect. Certain capitalized terms used
herein are defined in Article 11.
RESOLVED, that pursuant to the authority vested in the Board of Directors
of the Corporation by the Amended and Restated Articles of Incorporation,
the Board of Directors does hereby provide for the issue of a series of
Preferred Stock, $0.01 par value, of the Corporation, to be designated
"Series D Mandatorily Convertible Participating Preferred Stock" (referred
to herein as the "Series D Preferred Stock"), having the number of shares
and, to the extent that the designations, powers, preferences and relative
and other special rights and the qualifications, limitations and
restrictions of such Series D Preferred Stock are not stated and expressed
in the Amended and Restated Articles of Incorporation, the powers,
preferences and relative and other special rights and the qualifications,
limitations and restrictions thereof, as follows:
ARTICLE 1 DESIGNATION AND NUMBER OF SHARES
SECTION 1.1 The series will be known as the "Series D Mandatorily
Convertible Participating Preferred Stock".
SECTION 1.2 The Series D Preferred Stock will be a series consisting of
5,760,479 shares of the authorized but unissued preferred stock of the Issuer.
ARTICLE 2 DIVIDENDS AND DISTRIBUTIONS
SECTION 2.1 The Holders of shares of Series D Preferred Stock shall be
entitled to receive, when and as declared by the Board of Directors, but only
out of funds legally available therefor, dividends or distributions on each date
that dividends or other distributions (including any distributions of Capital
Stock, evidences of indebtedness, other securities or any other assets) are
payable or distributable on or in respect of Class A Common Stock of the Issuer,
in an amount per whole share of Series D Preferred Stock equal to the aggregate
amount (in cash, securities or other property) of dividends or other
distributions that would be payable on such date to a Holder of that number of
shares of Common Stock into which one share of Series D Preferred Stock shall be
convertible at the Conversion Rate (defined below). Each such dividend or
distribution shall be paid to each Holder of record of shares of Series D
Preferred Stock on the record date, not exceeding sixty days preceding such
payment date, fixed for the purpose by the Board of Directors in advance of
payment of each particular dividend or distribution (which record date shall be
the same date as the record date for the corresponding payment of dividends or
distributions on the Class A Common Stock). Any share of Series D Preferred
Stock originally issued after a dividend or distribution record date and on or
prior to the dividend or distribution payment date to which such record date
relates shall not be entitled to receive the dividend or distribution payable on
such dividend or distribution payment date or any amount in respect of the
period from the date of such issuance to such dividend or distribution payment
date. Holders of shares of Series D Preferred Stock shall not be entitled to any
dividends or distributions, whether payable or distributable in cash, property
or stock, in excess of full dividends or distributions as herein provided.
SECTION 2.2 So long as any shares of Series D Preferred Stock shall be
outstanding, no dividend shall be declared or paid or set aside for payment or
other distribution declared or made upon the Common Stock or upon any other
stock ranking junior to the Series D Preferred Stock as to dividends or
distribution of assets upon Liquidation, nor shall any Common Stock nor any
other stock of the Issuer ranking junior to or on a parity with the Series D
Preferred Stock as to dividends or distribution of assets upon Liquidation be
redeemed, purchased or otherwise acquired for any consideration (or any monies
be paid to, set aside or made available for a sinking fund for the redemption of
any shares of any such stock) by the Issuer (except by conversion into or
exchange for stock of the Issuer ranking junior to the Series D Preferred Stock
as to distribution of assets upon Liquidation), unless, in each case, the full
dividends (including the dividend to be due upon payment of such dividend,
distribution, redemption, purchase or other acquisition) on all outstanding
shares of Series D Preferred Stock shall have been, or shall then be, paid.
ARTICLE 3 RANKING
The preferences of each share of Series D Preferred Stock as to
distribution of assets upon Liquidation shall be in every respect on a parity
with the preferences of every
2
other share of capital stock of the Issuer which is not specifically made senior
or junior to the Series D Preferred Stock as to distribution of assets upon
Liquidation. The rights of the Common Stock will be junior to the Series D
Preferred stock as to distributions upon Liquidation to the extent herein
provided.
ARTICLE 4 OPTIONAL CONVERSION AND CONVERSION PROCEDURES
SECTION 4.1 (a) Each Holder of Series D Preferred Stock shall have the
right, at its option, at any time and from time to time to convert, subject to
the terms and provisions of this Article 4, any or all of such Holder's shares
of Series D Preferred Stock. In such case, each whole share of Series D
Preferred Stock shall be converted into ten (10) fully paid and nonassessable
shares of Class A Common Stock (the "Conversion Rate").
(b) The conversion right of a Holder of Series D Preferred Stock shall
be exercised by the Holder by the surrender of the certificates representing
shares to be converted to the Issuer or to the Transfer Agent accompanied by the
Conversion Notice.
(i) Immediately prior to the close of business on the Conversion Date,
each converting Holder of Series D Preferred Stock shall be deemed to be
the Holder of record of Class A Common Stock issuable upon conversion of
such Holder's Series D Preferred Stock notwithstanding that the share
register of the Issuer shall then be closed or that certificates
representing such Class A Common Stock shall not then be actually delivered
to such Person.
(ii) Upon notice from the Issuer, each Holder of Series D Preferred
Stock so converted shall promptly surrender to the Issuer or the Transfer
Agent certificates representing the shares so converted (if not previously
delivered), duly endorsed in blank or accompanied by proper instruments of
transfer.
(iii) On any Conversion Date, all rights with respect to the shares of
Series D Preferred Stock so converted, including the rights, if any, to
receive notices, will terminate, except the rights of Holders thereof to:
(1) receive certificates for the number of shares of Class A Common Stock
into which such shares of Series D Preferred Stock have been converted; (2)
the payment in cash or shares of Class A Common Stock of any declared and
unpaid dividends and distributions accrued thereon pursuant to Section 4.2
hereof; and (3) exercise the rights to which they are entitled as Holders
of Class A Common Stock.
(c) If the Conversion Date shall not be a Business Day, then such
conversion right shall be deemed exercised on the next Business Day.
SECTION 4.2 (a) When shares of Series D Preferred Stock are converted
pursuant to this Article 4, any declared and unpaid dividends and distributions
on the Series D Preferred Stock so converted to which the Holder of such Series
D Preferred
3
Stock is entitled in accordance with Section 2.1 hereof, to (but not including)
the Conversion Date, shall be due and payable, at the Issuer's option,
(i) in cash;
(ii) in a number of fully paid and nonassessable shares of Class A
Common Stock equal to the quotient obtained by dividing (A) the amount of
declared and unpaid dividends payable to the Holder of Series D Preferred
Stock so converted by (B) 95% of the current market price, determined in
accordance with subsection (b) below, on the Conversion Date; or
(iii) a combination thereof.
(b) The current market price per share of Class A Common Stock on any
date shall be deemed to be the average of the Daily Market Prices for the ten
(10) consecutive trading days ending on the last full trading day on the
exchange or market referred to in determining such Daily Market Prices prior to
the time of determination.
(c) No payment or adjustment shall be made by the Issuer upon any
conversion of Series D Preferred Stock on account of any dividends or
distributions on the Class A Common Stock or other securities issued upon
conversion.
SECTION 4.3 (a) In case the Issuer shall (i) subdivide its outstanding
shares of Common Stock into a greater number of shares of Common Stock or (ii)
combine its outstanding shares of Common Stock into a smaller number of shares
of Common Stock, the Issuer shall effect the same subdivision, combination or
similar change with respect to the Series D Preferred Stock of the Issuer as is
made with respect to the Common Stock such that the Holder of any share of
Series D Preferred Stock thereafter surrendered for conversion shall be entitled
to receive the number of shares of Common Stock which such Holder would have
owned immediately following such action had such shares of Series D Preferred
Stock been converted immediately prior thereto. Any adjustment made pursuant to
this subsection (a) shall become effective immediately after the record date in
the case of a dividend or distribution and shall become effective immediately
after the effective date in the case of a subdivision or combination.
(b) Except as permitted in Article 6 with respect to a Change of
Control Transaction, in case of any consolidation of the Issuer with, or merger
of the Issuer into, any other Person, or any merger of another Person into the
Issuer, or any statutory exchange of securities with another corporation
(including any exchange effected in connection with a merger of a third
corporation into the Issuer), or any sale, conveyance or transfer of all or
substantially all of the assets of the Issuer (in each case other than any such
consolidation, merger, statutory exchange, sale, conveyance or transfer that
does not result in any reclassification, conversion, exchange or cancellation of
outstanding shares of Common Stock), appropriate provision shall be made in the
agreement governing any such consolidation, merger, statutory exchange, sale,
conveyance or transfer so that the holder of each share of Series D Preferred
Stock
4
outstanding immediately prior to the consummation of such consolidation, merger,
statutory exchange, sale, conveyance or transfer shall have the right thereafter
to convert such share into the kind and amount of securities, cash or other
property receivable upon such consolidation, merger, statutory exchange, sale,
conveyance or transfer by a Holder of the number of shares of Class A Common
Stock into which such share of Series D Preferred Stock might have been
converted immediately prior to such consolidation, merger or statutory exchange,
assuming such Holder of Class A Common Stock failed to exercise his rights of
election, if any, as to the kind or amount of securities, cash or other property
receivable upon such consolidation, merger, statutory exchange, sale, conveyance
or transfer (provided that if the kind or amount of securities, cash or other
property receivable upon such consolidation, merger, statutory exchange, sale,
conveyance or transfer is not the same for each share of Class A Common Stock in
respect of which such rights of election shall not have been exercised
("non-electing share"), then for the purpose of this subsection (b) the kind and
amount of securities, cash or other property receivable upon such consolidation,
merger, statutory exchange, sale, conveyance or transfer for each non-electing
share shall be deemed to be the kind and amount so receivable per share by a
plurality of the non-electing shares). Thereafter, the holders of the Series D
Preferred Stock shall be entitled to appropriate adjustments with respect to
their conversion rights to the end that the provisions set forth in this Section
4.3 shall correspondingly be made applicable, as nearly equivalent as
practicable, in relation to any shares of stock or other securities or other
property thereafter deliverable on the conversion of the Series D Preferred
Stock. The provisions of this subsection (b) shall similarly apply to successive
consolidations, mergers or statutory exchanges. The provisions of this
subsection (b) shall not apply to the Merger or any of the other transactions or
actions provided for by the Transaction Agreements (as such term is defined in
the Implementation Agreement).
SECTION 4.4 The Issuer shall at all times reserve and keep available for
issuance upon the conversion of the Series D Preferred Stock, such number of its
authorized but unissued shares of Class A Common Stock as will from time to time
be sufficient to permit the conversion of all outstanding shares of Series D
Preferred Stock, and shall take all action required to increase the authorized
number of shares of Class A Common Stock if at any time there shall be
insufficient authorized but unissued shares of Class A Common Stock to permit
such reservation or to permit the conversion of all outstanding shares of Series
D Preferred Stock.
SECTION 4.5 The issuance or delivery of certificates for Class A Common
Stock upon the conversion of shares of Series D Preferred Stock shall be made
without charge to the converting Holder of shares of Series D Preferred Stock
for such certificates or for any tax in respect of the issuance or delivery of
such certificates or the securities represented thereby, and such certificates
shall be issued or delivered in the respective names of, or in such names as may
be directed by, the Holders of the shares of Series D Preferred Stock converted;
provided, however, that the Issuer shall not be required to pay any tax which
may be payable in respect of any transfer involved in the issuance and delivery
of any such certificate in a name other than that of the Holder of the shares of
5
Series D Preferred Stock converted, and the Issuer shall not be required to
issue or deliver such certificate unless or until the Person or Persons
requesting the issuance or delivery thereof shall have paid to the Issuer the
amount of such tax or shall have established to the reasonable satisfaction of
the Issuer that such tax has been paid or is not payable.
ARTICLE 5 MANDATORY CONVERSION
SECTION 5.1 (a) Subject to Section 5.1(b), each share of Series D Preferred
Stock shall be automatically converted into ten (10) fully paid and
nonassessable shares of Class A Common Stock, upon the occurrence of any of the
following events or dates (each, a "Conversion Trigger Event"), without any
action on the part of any Holder:
(i) the effective time of the Merger provided for in Article I of the
Merger Agreement;
(ii) on the first date that the sum of (A) the number of shares of
Class A Common Stock into which the shares of Series D Preferred Stock then
held of record and beneficially by the Initial Holder [or any Voting
Permitted Transferee]*are convertible on such date and (B) the number of
shares of Class A Common Stock, if any, theretofore received by the Initial
Holder [or any Voting Permitted Transferee] upon conversion of shares of
Series D Preferred Stock, for which shares of Class A Common Stock the
Initial Holder [or any Voting Permitted Transferee] shall continue to be
the record and beneficial owner as of the date of any determination under
this clause (ii), shall cease to constitute 51% or more of the aggregate
number of shares of Class A Common Stock into which the shares of Series D
Preferred Stock issued to the Initial Holder on the Issuance Date were
convertible into on such date (as such aggregate number may be adjusted
from time to time as necessary to reflect appropriately any stock splits,
subdivisions, combinations and similar changes to the Capital Stock of the
Issuer);
(iii) the purported sale, assignment, transfer or other disposition of
a share of Series D Preferred Stock or beneficial ownership thereof [(A)]
by the Initial Holder to any Person other than a Permitted Transferee [or a
Voting Permitted Transferee or (B) by a Voting Permitted Transferee to any
other Person]; or
(iv) _____, 2007 [FIVE YEARS FROM ISSUE DATE];
unless such share of Series D Preferred Stock shall have earlier have been
converted in accordance with Article 4 hereof or this Article 5. For purposes of
this Section 5.1 and
----------
* Throughout this Certificate of Designations, text enclosed by bold brackets
applies only if the Series D Preferred Stock is initially issued as
non-voting stock as contemplated by Section 6.01(a)(iii) of the Investment
Agreement.
6
Section 13.2, the terms "beneficial owner" and "beneficially" shall be construed
in accordance with Rule 13d-3 under the Exchange Act.
(b) Any such conversion pursuant to Section 5.1(a) shall be effected
(i) in the case of the Conversion Trigger Event in clause (i) of Section 5.1(a),
immediately prior to the effective time of the Merger; (ii) in the case of the
Conversion Trigger Event in clause (ii) or (iv) thereof, on the date specified
therein, and (iii) in the case of the Conversion Trigger Event in clause (iii)
thereof, immediately prior to such sale, transfer or other disposition. Any
conversion effected pursuant to clause (iii) of Section 5.1(a) shall apply only
to such share or shares of Series D Preferred Stock as are so sold, transferred
or otherwise disposed of. Any conversion pursuant to clause (ii) or (iii) of
Section 5.1(a) shall become effective notwithstanding any failure by the Initial
Holder to notify the Issuer of any change in ownership pursuant to Section 13.2
hereof.
(c) For purposes of this Section 5.1, the "Initial Holder" shall be
deemed to include any Permitted Transferee of the Initial Holder which is then a
Holder of any shares of Series D Preferred Stock.
SECTION 5.2 (a) Upon notice from the Issuer, each Holder of Series D
Preferred Stock converted in accordance with Section 5.1 hereof shall promptly
surrender to the Issuer or the Transfer Agent certificates representing the
shares so converted (if not previously delivered), duly endorsed in blank or
accompanied by proper instruments of transfer.
(b) Upon any conversion of shares of Series D Preferred Stock in
accordance with Section 5.1 hereof, all rights with respect to the shares of
Series D Preferred Stock so converted, including the rights of a Holder, if any,
to receive notices, will terminate, except the rights of Holders thereof to: (i)
receive certificates for the number of shares of Class A Common Stock into which
such shares of Series D Preferred Stock have been converted; (ii) the payment in
cash or shares of Class A Common Stock of any declared and unpaid dividends and
distributions accrued thereon to (but not including) the date of such conversion
pursuant to Section 4.2 hereof; and (iii) exercise the rights to which they are
entitled as Holders of Class A Common Stock.
ARTICLE 6 CHANGE OF CONTROL
SECTION 6.1 (a) Without limiting the rights of Holders of shares of Series
D Preferred Stock pursuant to Article 4, in the event that a Change of Control
Transaction shall occur, the Holders shall be entitled to be paid in full, to
the extent of funds legally available therefor, an amount in cash per share of
Series D Preferred Stock equal to the Liquidation Preference, plus any declared
and unpaid dividends accrued thereon to (but not including) the Change in
Control Date (as defined in Section 6.1(d)).
(b) If the Surviving Corporation, if any, resulting from any Change of
Control Transaction shall be a Person other than the Issuer, the Surviving
Corporation shall execute and deliver an agreement for the benefit of the
Holders of the Series D
7
Preferred Stock providing that each Holder of outstanding shares of Series D
Preferred Stock immediately prior to the Change of Control Transaction shall
thereafter have the right to demand payment from the Surviving Corporation of
the amounts payable to such Holder pursuant to Section 6.1(a), with respect to
such Holder's shares of Series D Preferred Stock.
(c) Immediately prior to the consummation of a Change in Control
Transaction, all shares of Series D Preferred Stock shall cease to be
outstanding, the Holders thereof shall cease to be stockholders with respect to
such shares and all rights with respect to such shares of Series D Preferred
Stock, including the rights of a Holder, if any, to convert such shares and to
receive notices, will terminate, except the rights of a Holder thereof to
receive payment of the amount due to such Holder pursuant to Section 6.1(a) with
respect to such Holder's shares of Series D Preferred Stock.
(d) Upon notice from the Issuer (or the Surviving Corporation, if
applicable) of the occurrence of a Change in Control Transaction, which notice
shall include the date on which the Change in Control Transaction occurred (the
"Change of Control Date") and the amount per share of Series D Preferred Stock
outstanding immediately prior to such Change in Control Transaction payable
pursuant to Section 6.1(a), each Holder of Series D Preferred Stock shall
promptly surrender to the Issuer or the Transfer Agent the certificates formerly
representing such Series D Preferred Stock (if not previously delivered), duly
endorsed in blank or accompanied by proper instruments of transfer, and the
Issuer or the Surviving Corporation, as the case may be, shall pay to the
surrendering Holder promptly after such surrender all amounts payable in respect
of the shares of Series D Preferred Stock represented by such surrendered
certificate.
ARTICLE 7 LIQUIDATION
SECTION 7.1 In the event of any Liquidation the Holders of shares of Series
D Preferred Stock shall be entitled, before any distribution or payment is made
on any date to the Holders of the Common Stock or any other stock of the Issuer
ranking junior to the Series D Preferred Stock as to distribution of assets upon
Liquidation, to be paid in full the greater of (i) an amount per share of Series
D Preferred Stock equal to the Liquidation Preference, plus any declared and
unpaid dividends thereon from the date fixed for payment of such dividends to
the date fixed for Liquidation and (ii) an amount per share of Common Stock to
which such Holders of shares of Series D Preferred Stock would have been
entitled upon Liquidation if such Holders had converted such shares of Series D
Preferred Stock into Class A Common Stock immediately prior to the date fixed
for Liquidation. If such payment shall have been made in full to all Holders of
shares of Series D Preferred Stock, then the Holders of shares of Series D
Preferred Stock as such shall have no right or claim to any of the remaining
assets of the Issuer.
SECTION 7.2 If the assets of the Issuer available for distribution to the
Holders of shares of Series D Preferred Stock upon any Liquidation shall be
insufficient to pay in
8
full all amounts to which such Holders shall be entitled pursuant to Section
7.1, no such distribution shall be made on account of any shares of any other
class or series of Preferred Stock ranking on a parity with the Series D
Preferred Stock as to distribution of assets upon Liquidation unless
proportionate distributive amounts shall be paid on account of all outstanding
shares of Series D Preferred Stock, ratably in proportion to the full
distributable amounts for which Holders of all such parity shares are
respectively entitled upon such Liquidation.
ARTICLE 8 VOTING RIGHTS
SECTION 8.1 Except as otherwise provided by law and the articles of
incorporation of the Issuer, the Holders of Series D Preferred Stock shall have
no voting rights [other than such voting rights as are expressly provided in
Sections 8.2, 8.3 and 8.4] [other than such voting rights as are expressly
provided in Sections 8.3 and 8.4, provided, that if a Voting Trigger shall have
occurred, the Holders of Series D Preferred Stock shall thereafter have such
voting rights as are expressly provided in Sections 8.2, 8.3 and 8.4 hereof].
SECTION 8.2 A Holder of Series D Preferred Stock shall be entitled to vote
on any matter on which the Holders of Class A Common Stock are entitled to vote.
With respect to any such matter, each Holder of Series D Preferred Stock shall
be entitled to one vote for each whole share of Class A Common Stock that would
be issuable to such Holder upon the conversion of all the shares of Series D
Preferred Stock held by such Holder on the record date for the determination of
stockholders entitled to vote and, subject to Sections 8.3 and 8.4, the Holders
of Series D Preferred Stock shall vote together as a single class with the
Holders of Class A Common Stock and any other class of Common Stock voting as a
single class with the Class A Common Stock with respect to such matter in
accordance with the Nevada Revised Statutes or the articles of incorporation of
the Issuer.
SECTION 8.3 Subject to Section 8.4, the vote or consent of the Holders of
at least a majority in aggregate Liquidation Preference of the shares of Series
D Preferred Stock at the time outstanding, voting separately as a single class,
given in person or by proxy, either in writing without a meeting or by vote at
any meeting called for the purpose, shall be necessary for effecting or
validating:
(a) the issuance of any shares of Series D Preferred Stock in excess of
the number of shares of such stock authorized in this Certificate of
Designations or a decrease in the number of authorized shares of Series D
Preferred Stock below the number of shares of Series D Preferred Stock then
outstanding; provided, however, that adjustments to the number of outstanding
shares of Series D Preferred Stock may be made by the Issuer pursuant to, and in
accordance with, Section 4.3 hereof without the vote or consent of the Holders
of Series D Preferred Stock; and
(b) any amendment, alteration or repeal of any provision of the
articles of incorporation, this Certificate of Designations or the by-laws of
the Issuer (including
9
any such alteration, amendment or repeal accomplished by merger, consolidation
or otherwise) that would alter or change, or abolish, the voting powers,
preferences or special rights of the Series D Preferred Stock in any manner
adverse to the Holders thereof, including without limitation any change that is
in any manner adverse to the par value, liquidation preference or dividend
rights, place or currency of payment, enforcement rights or conversion rights;
provided, however, that the vote or consent of the Holders of Series D Preferred
Stock voting separately as a class shall not be necessary for effecting or
validating (i) any amendment of the articles of incorporation so as to authorize
or create, or to increase or decrease the authorized amount of, or to issue any
shares of Capital Stock of the Issuer other than Series D Preferred Stock, (ii)
any amendment or supplement to the Certificate of Designations permitted by
Article 10 hereof or (iii) any consolidation of the Issuer with, or merger of
the Issuer into, any other Person or any merger of another Person into the
Issuer, provided that, (x) if the Issuer is the Surviving Corporation, the
Series D Preferred Stock shall remain outstanding without any amendment to this
Certificate of Designations that would adversely affect the preferences, rights
or powers of the Series D Preferred Stock and (y) if the Issuer is not the
Surviving Corporation, (1) the Surviving Corporation is a corporation organized
and existing under the laws of the United States or any State thereof or the
District of Columbia and (2) the shares of Series D Preferred Stock are
converted into or exchanged for and become shares of preferred or preference
stock of the Surviving Corporation, having the same powers, preferences and
relative, participating, optional or other special rights and qualifications,
limitations and restrictions as provided for the Series D Preferred Stock in
this Certificate of Designations as in effect immediately prior to such
transaction.
In all such cases contemplated by this Section 8.3, each share of Series D
Preferred Stock shall be entitled to one vote.
SECTION 8.4 Notwithstanding anything to the contrary in this Certificate of
Designations, the Holders of Series D Preferred Stock shall not be entitled to
any vote, nor shall their consent be required, with respect to the Merger or any
of the other transactions or actions provided for by the Transaction Agreements
(as such term is defined in the Implementation Agreement), including any
amendment to the Merger Agreement or any other Transaction Agreement.
ARTICLE 9 NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES,
INCORPORATORS AND STOCKHOLDERS
No director, officer, employee, incorporator or stockholder of the Issuer
or any of its Affiliates, as such, shall have any liability for any obligations
of the Issuer and any of its Affiliates under the Series D Preferred Stock or
the Certificate of Designations or for any claim based on, in respect of, or by
reason of, such obligations or their creation, except as otherwise provided
under the laws of the State of Nevada. Each Holder of the Series D Preferred
Stock waives and releases all such liability. The waiver and release are part of
the consideration for issuance of the Series D Preferred Stock.
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ARTICLE 10 AMENDMENT, SUPPLEMENT AND WAIVER
SECTION 10.1 Without the consent of any Holder of the Series D Preferred
Stock, the Issuer may amend or supplement this Certificate of Designations to
cure any ambiguity, defect or inconsistency, to provide for uncertificated
Series D Preferred Stock in addition to or in place of certificated Series D
Preferred Stock, to provide for the assumption of the Issuer's obligations to
Holders of the Series D Preferred Stock in the case of a merger or consolidation
(subject to the requirements set forth in Section 8.3(b), if applicable), to
make any change that would provide any additional rights or benefits to the
Holders of the Series D Preferred Stock or that does not adversely affect the
legal rights under this Certificate of Designations of any such Holder.
SECTION 10.2 Except as otherwise provided herein (including, without
limitation, Section 8.3 hereof, if applicable), the Issuer is entitled to amend
its articles of incorporation to authorize one or more additional series of
preferred stock, file certificates of designations, and issue without
restriction, from time to time, any stock or other securities ranking junior to,
senior to or on a parity with the Series D Preferred Stock as to distributions
of assets upon Liquidation.
ARTICLE 11 CERTAIN DEFINITIONS
Set forth below are certain defined terms used in this Certificate of
Designations.
SECTION 11.1 "AFFILIATE" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For purposes of this definition,
"control" (including, with correlative meanings, the terms "controlling,"
"controlled by" and "under common control with"), as used with respect to any
person, shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of such person,
whether through the ownership of voting securities, by agreement or otherwise;
provided, however, that beneficial ownership of 10% or more of the voting
securities of a person shall be deemed to be control.
SECTION 11.2 "BUSINESS DAY" means any day other than a Legal Holiday.
SECTION 11.3 "CAPITAL STOCK" means any and all shares, interests,
participations, rights or other equivalents (however designated) of corporate
stock or partnership or membership interests, whether common or preferred.
SECTION 11.4 "CHANGE OF CONTROL" means
(a) any transaction or series of related transactions (including a
tender offer, merger or consolidation) the result of which is that holders of
outstanding voting Capital Stock of the Issuer immediately prior to such
transaction or series of related transactions hold, directly or indirectly,
Capital Stock of the surviving Person, in such transaction or series of related
transactions (or any ultimate parent thereof) representing
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less than 50% of the voting power in the election of members of the board of
directors (or comparable governing body) of all outstanding Capital Stock of
such surviving Person (or such ultimate parent) immediately after such
transaction or series of related transactions; or
(b) the sale, lease or transfer of all or substantially all of the
Issuer's assets to any "person" or "group", within the meaning of Section
13(d)(3) and 14(d)(2) of the Exchange Act, or any successor provision to either
of the foregoing, including any group acting for the purpose of acquiring,
holding or disposing of securities within the meaning of Rule 13d-5(b)(1) under
the Exchange Act, other than any Subsidiary or Subsidiaries of the Company.
SECTION 11.5 "CHANGE OF CONTROL TRANSACTION" means any merger,
consolidation, tender offer, statutory share exchange or sale, lease or transfer
of all or substantially all of the Issuer's assets or similar transaction or
group of related transactions, in each case to which the Issuer is a party (or,
in the case of a tender offer, in which Capital Stock of the Issuer is the
subject security), the consummation of which results in a Change of Control;
provided that (a) neither the Merger nor any of the transactions provided for by
the Merger Agreement or the other Transaction Agreements (as such term is
defined in the Implementation Agreement), shall constitute a Change of Control
Transaction; and (b) the consummation of the transactions contemplated by the
PanAmSat Stock Purchase Agreement, including any issuance of shares of Class A
Common Stock in connection therewith, shall not constitute a Change of Control
Transaction.
SECTION 11.6 "CLASS A COMMON STOCK" means the Issuer's authorized $.01 par
value Class A common stock.
SECTION 11.7 "CLASS B COMMON STOCK" means the Issuer's authorized $.01 par
value Class B common stock.
SECTION 11.8 "COMMON STOCK" means the Class A Common Stock and the Class B
Common Stock as constituted on the date of filing of this Certificate of
Designations, and shall also include any Capital Stock of any class of the
Issuer thereafter authorized that shall not be limited to a fixed sum in respect
of the rights of the Holders thereof to participate in dividends or in the
distribution of assets upon the Liquidation of the Issuer.
SECTION 11.9 The "CONVERSION DATE" shall be the date the Issuer or the
Transfer Agent receives the Conversion Notice.
SECTION 11.10 "CONVERSION NOTICE" is written notice from the Holder to the
Issuer stating that the Holder elects to convert all or a portion of the shares
of Series D Preferred Stock represented by certificates delivered to the Issuer
or the Transfer Agent contemporaneously. The Conversion Notice will specify or
include:
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(i) The number of shares of Series D Preferred Stock being converted
by the Holder,
(ii) The name or names (with address and taxpayer identification
number) in which a certificate or certificates for shares of Class A Common
Stock are to be issued,
(iii) A written instrument or instruments of transfer in form
reasonably satisfactory to the Issuer or the Transfer Agent duly executed
by the Holder or its duly authorized legal representative, and
(iv) Transfer tax stamps or funds therefor, if required pursuant to
Section 4.5.
SECTION 11.11 "DAILY MARKET PRICE" means the price of a share of Class A
Common Stock on the relevant date, determined (a) on the basis of the last
reported sale price regular way of the Class A Common Stock as reported on the
Nasdaq National Market (the "NNM"), or if the Class A Common Stock is not then
listed on the NNM, as reported on such national securities exchange upon which
the Class A Common Stock is listed, or (b) if there is no such reported sale on
the day in question, on the basis of the average of the closing bid and asked
quotations regular way as so reported, or (c) if the Class A Common Stock is not
listed on the NNM or on any national securities exchange, on the basis of the
average of the high bid and low asked quotations regular way on the day in
question in the over-the-counter market as reported by the National Association
of Securities Dealers Automated Quotation System, or if not so quoted, as
reported by National Quotation Bureau, Incorporated, or a similar organization.
SECTION 11.12 "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
SECTION 11.13 "HOLDER" means a Person in whose name a share or shares of
Capital Stock are registered.
SECTION 11.14 "HSR ACT" means the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements
Act of 1976, as amended, and the rules and regulations thereunder.
SECTION 11.15 "▇▇▇▇▇▇" means ▇▇▇▇▇▇ Electronics Corporation, a Delaware
corporation.
SECTION 11.16 "IMPLEMENTATION AGREEMENT" means the Implementation
Agreement, dated as of October 28, 2001, among the Issuer, General Motors and
▇▇▇▇▇▇, as it may be amended from time to time.
SECTION 11.17 "INITIAL HOLDER" means Vivendi Universal, a societe anonyme
organized under the laws of the Republic of France.
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SECTION 11.18 "INVESTMENT AGREEMENT" means the Investment Agreement, dated
December 14, 2001, between the Issuer and the Initial Holder, as it may be
amended from time to time.
SECTION 11.19 "ISSUANCE DATE" means the date on which the Series D
Preferred Stock is originally issued under this Certificate of Designations.
SECTION 11.20 "ISSUER" means EchoStar Communications Corporation, a Nevada
corporation.
SECTION 11.21 "LEGAL HOLIDAY" means a Saturday, a Sunday or a day on which
banking institutions in the City of New York or at a place payment is to be
received are authorized by law, regulation or executive order to remain closed.
If a payment date is a Legal Holiday at a place of payment, payment may be made
at that place on the next succeeding day that is not a Legal Holiday, and no
interest shall accrue for the intervening period.
SECTION 11.22 "LIQUIDATION" means any liquidation, dissolution or
winding-up of the affairs of the Issuer, whether voluntary or involuntary;
provided that for purposes of Article 7, a consolidation or merger of, or share
exchange by, the Issuer with any other Person shall not constitute a
Liquidation.
SECTION 11.23 "LIQUIDATION PREFERENCE" means $260.395 per share of Series D
Preferred Stock.
SECTION 11.24 "MERGER" means the merger provided for in Article 1 of the
Merger Agreement.
SECTION 11.25 "MERGER AGREEMENT" means the Agreement and Plan of Merger,
dated as of October 28, 2001, by and between the Issuer and ▇▇▇▇▇▇, as it may be
amended from time to time.
SECTION 11.26 "PANAMSAT STOCK PURCHASE AGREEMENT" means the Stock Purchase
Agreement, dated as of October 28, 2001, among the Issuer, ▇▇▇▇▇▇, ▇▇▇▇▇▇
Communications Galaxy, Inc., ▇▇▇▇▇▇ Communications Satellite Services, Inc. and
▇▇▇▇▇▇ Communications, Inc., as it may be amended from time to time.
SECTION 11.27 "PERMITTED TRANSFEREE" means any direct or indirect,
wholly-owned Subsidiary of the Initial Holder.
SECTION 11.28 "PERSON" means any individual, corporation, partnership,
joint venture, association, joint-stock issuer, trust or unincorporated
organization (including any subdivision or ongoing business of any such entity
or substantially all of the assets of any such entity, subdivision or business).
SECTION 11.29 "SEC" means the Securities and Exchange Commission.
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SECTION 11.30 "SECURITIES ACT" means the Securities Act of 1933, as
amended.
SECTION 11.31 "SERIES D PREFERRED STOCK" means the Series D Preferred Stock
authorized in this Certificate of Designations.
SECTION 11.32 "SUBSIDIARY" means, with respect to any person, any
corporation, association or other business entity of which more than 50% of the
total voting power of shares of Capital Stock entitled (without regard to the
occurrence of any contingency) to vote in the election of directors, managers or
trustees thereof is at the time owned or controlled, directly or indirectly, by
such person or one or more of the other Subsidiaries of such person or a
combination thereof.
SECTION 11.33 "SURVIVING CORPORATION" means, in the case of any merger or
consolidation to which the Issuer is a party, the Person surviving such merger
or resulting from such consolidation, as the case may be.
SECTION 11.34 The "TRANSFER AGENT" shall be as established pursuant to
Article 12 hereof.
[SECTION 11.35 "VOTING PERMITTED TRANSFEREE" means any Person to whom the
Initial Holder or any Permitted Transferee proposes, prior to the occurrence of
any Voting Trigger, to sell, assign, transfer or otherwise dispose of all of the
shares of Series D Preferred Stock then held by the Initial Holder and any such
Permitted Transferee if (a) the Issuer shall have consented to such sale,
assignment, transfer or other disposition in accordance with Section
6.01(a)(iii) of the Investment Agreement, (b) the waiting period under the HSR
Act with respect to such sale, assignment, transfer or other disposition, if
required under the HSR Act with respect to shares of Series D Preferred Stock in
order for such shares to be entitled to the voting or consent rights provided in
Section 8.2 hereof, shall have expired or been terminated and (c) the Initial
Holder or Permitted Transferee, as applicable, and such Person shall have
obtained prior to the consummation of such sale, assignment, transfer or other
disposition any other approval, consent or permit that may be required under any
applicable federal, state or foreign statute, rule, regulation, order, writ,
decree, injunction or judgment, including, without limitation, any applicable
rules or policies of any securities exchange or self-regulatory organization,
with respect to such consummation.]
[SECTION 11.36 "VOTING TRIGGER" means the first to occur of either of the
following events:
(a) the expiration or termination of the waiting period under the HSR
Act with respect to the ownership by the Initial Holder (or any Permitted
Transferee that is then a Holder) of shares of Series D Preferred Stock entitled
to the voting or consent rights provided in Section 8.2 hereof; or
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(b) the sale, assignment, transfer or other disposition of record and
beneficial ownership of all of the shares of Series D Preferred Stock then held
by the Initial Holder and any Permitted Transferee to a Voting Permitted
Transferee.]
ARTICLE 12 TRANSFER AGENT AND REGISTRAR
The Issuer may, but shall not be required to, appoint a transfer agent and
registrar for the Series D Preferred Stock and shall give notice to the holders
of any such appointment. The Issuer may, in its sole discretion, remove the
Transfer Agent in accordance with the agreement between the Issuer and the
Transfer Agent; provided that the Issuer shall appoint a successor transfer
agent who shall accept such appointment prior to the effectiveness of such
removal.
ARTICLE 13 OTHER PROVISIONS
SECTION 13.1 With respect to any notice to a Holder of shares of Series D
Preferred Stock required to be provided hereunder, neither failure to mail such
notice, nor any defect therein or in the mailing thereof, to any particular
Holder shall affect the sufficiency of the notice or the validity of the
proceedings referred to in such notice with respect to the other Holders or
affect the legality or validity of any distribution, rights, warrant,
reclassification, consolidation, merger, conveyance, transfer, dissolution,
liquidation or winding up, or the vote upon any such action. Any notice which
was mailed in the manner herein provided shall be conclusively presumed to have
been duly given whether or not the Holder receives the notice.
SECTION 13.2 With respect to any purported sale, assignment, transfer or
other disposition of any shares of Series D Preferred Stock or beneficial
ownership thereof (including any sales, assignments, transfers or dispositions
to a Permitted Transferee, but excluding any proposed sale, assignment, transfer
or disposition to a Voting Permitted Transferee, for which the notice
requirements are specified in the Investment Agreement), the Holder thereof
shall provide at least three (3) Business Days' written notice to the Secretary
of the Issuer of the intended date of such sale, assignment, transfer or
disposition of the Series D Preferred Stock and the identity of such purported
transferee or transferees.
SECTION 13.3 All notices or other communications required or permitted to
be given hereunder shall be in writing and shall be delivered by hand or sent by
facsimile or sent, postage prepaid, by registered, certified or express mail or
overnight courier service and shall be deemed given when so delivered by hand or
facsimile, or if mailed, three days after mailing (one business day in the case
of express mail or overnight courier service), as follows:
(a) if to the Issuer:
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Senior Vice President, General
Counsel and Secretary
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
(b) if to a Holder: at the address of such Holder as the same appears
on the stock ledger of the Issuer, provided that each such Holder may designate
in writing another address for notices or other communications required or
permitted to be given hereunder.
SECTION 13.4 Shares of Series D Preferred Stock issued and reacquired by
the Issuer will be retired and canceled promptly after reacquisition thereof
and, upon compliance with the applicable requirements of Nevada law, have the
status of authorized but unissued shares of preferred stock of the Issuer
undesignated as to series and may with any and all other authorized but unissued
shares of preferred stock of the Issuer be designated or redesignated and issued
or reissued, as the case may be, as part of any series of preferred stock of the
Issuer.
SECTION 13.5 No fractional shares of Class A Common Stock or securities
representing fractional shares of Class A Common Stock will be issued upon
conversion or as dividends payable on the Series D Preferred Stock. Any
fractional interest in a share of Class A Common Stock resulting from conversion
or dividend payment will be paid in cash based on the last reported sale price
of the Class A Common Stock on the Nasdaq National Market (or any national
securities exchange or authorized quotation system on which the Class A Common
Stock is then listed) at the close of business on the trading day next preceding
the date of conversion or dividend payment date, as the case may be, or on the
trading day next preceding such later time as the Issuer is legally and
contractually able to pay for such fractional shares. For purposes of
determining whether a Person would receive a fractional share of Class A Common
Stock upon conversion or as dividends payable on the Series D Preferred Stock,
all shares of Class A Common Stock that such Holder of shares of Series D
Preferred Stock would otherwise be entitled to receive as a result of such
conversion or dividends shall be aggregated.
SECTION 13.6 No Holder of shares of Series D Preferred Stock shall be
entitled to the rights set forth in Section 92A.300 et. seq. of the Nevada
Revised Statutes. Without limiting the generality of the foregoing, no Holder of
shares of Series D Preferred Stock shall have any rights to dissent from, or
obtain payment of the fair value of such Holder's shares of Series D Preferred
Stock in the event of, any of the corporate actions set forth in Section 92A.380
of the Nevada Revised Statutes, including, without limitation, the consummation
of a plan of merger with respect to which the approval of the Holders of any
Capital Stock of the Issuer is required. Each Holder of shares of Series D
Preferred Stock shall have no right to (i) receive notice pursuant to Section
92A.410 of the Nevada Revised Statutes from the Issuer or (ii) deliver to the
Issuer notice of intent to demand payment for such Holder's shares of Series D
Preferred Stock pursuant to Section 92A.420 of the Nevada Revised Statutes.
17
SECTION 13.7 All notice periods referred to herein shall commence on the
date of the mailing of the applicable notice.
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IN WITNESS WHEREOF, EchoStar Communications Corporation has caused this
Certificate of Designations to be signed by ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, its Senior Vice
President, General Counsel and Secretary, this ___ of ___, 2002.
ECHOSTAR COMMUNICATIONS
CORPORATION
-----------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Senior Vice President, General
Counsel and Secretary
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