EXHIBIT 10.1
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CONTINGENT VALUE RIGHTS AGREEMENT
between
ECHOSTAR COMMUNICATIONS CORPORATION,
and
VIVENDI UNIVERSAL, S.A.
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Dated as of
January 22, 2002
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TABLE OF CONTENTS
Page
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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
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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...............................................................................12
SECTION 5.05. Governing Law..............................................................................13
SECTION 5.06. Amendments and Waivers.....................................................................13
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CONTINGENT VALUE RIGHTS AGREEMENT (this
"Agreement") dated as of January 22, 2002, 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
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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.
The Company acknowledges that pursuant to Section 7.01(a) of
the Investment Agreement, the Investor has assigned the right to receive the
CVRs to Financiere De Videocommunication, its indirect wholly owned subsidiary.
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)
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(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 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
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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 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.
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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).
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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 (i) 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 and (ii) the Investor shall have received an opinion from
counsel to the Company, dated the date of such issuance and delivery and
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addressed to the Investor, in form and substance reasonably acceptable to the
Investor, as to the validity of the securities so issued and delivered. All such
shares of Class A Common Stock shall be duly authorized and, when issued, shall
be validly issued, fully paid and nonassessable, free 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
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hereto, and the holders thereof and the parties hereto shall have no
further rights with respect thereto or hereto.
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
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(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 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: ▇▇▇▇▇ ▇. ▇▇▇▇▇; and
(ii) if to the Company,
EchoStar Communications Corporation
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, General Counsel
with a copy to:
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇ ▇. ▇'▇▇▇▇▇
12
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.
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.
13
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: /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 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
Adjustments for Date of Number of Shares of Adjustments
Sales of Class A Notice of Class A Common Pursuant to Number of CVRs Reference
Common Stock Sale Stock Sold Section 1.06 Outstanding Price
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