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EXHIBIT 2.1
EXCHANGE AGREEMENT
This EXCHANGE AGREEMENT (this "Agreement") is entered into as of June 7,
1999 by and among American Mobile Satellite Corporation, a corporation duly
organized under the laws of the State of Delaware ("AMSC"), WorldSpace, Inc., a
corporation duly organized under the laws of the State of Maryland
("WorldSpace"), and XM Satellite Radio Holdings Inc., a corporation duly
organized under the laws of the State of Delaware ("XM Holdings").
W I T N E S S E T H:
WHEREAS, AMSC currently holds 100 shares of XM Holdings Common Stock,
which constitutes 80% of the issued and outstanding shares of XM Holdings Common
Stock;
WHEREAS, WorldSpace currently holds 25 shares of XM Holdings Common Stock,
which constitutes 20% of the issued and outstanding shares of XM Holdings Common
Stock;
WHEREAS, WorldSpace holds other assets relating to XM Holdings as set
forth below;
WHEREAS, WorldSpace desires to transfer to a trust ("XM Ventures") all of
WorldSpace's right, title and interests in and to all assets held by WorldSpace
relating to XM Holdings, other than certain debt of XM Holdings with a value
equal to $75 million;
WHEREAS, AMSC desires to acquire from XM Ventures the assets to be
transferred by WorldSpace to XM Ventures solely in exchange for the issuance by
AMSC to XM Ventures of shares of AMSC Common Stock; and
WHEREAS, XM Holdings desires to retire the debt of XM Holdings retained by
WorldSpace through the payment by XM Holdings to WorldSpace of cash in the
amount of $75 million.
NOW, THEREFORE, in consideration of the foregoing and for good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto, intending to be legally bound, hereby agree as
follows:
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ARTICLE 1
DEFINITIONS
Unless otherwise defined herein, the following terms shall have the
meanings specified below:
"AMRC" means American Mobile Radio Corporation, a Delaware corporation
whose name was changed to XM Satellite Radio Inc.
"AMRC Holdings" means AMRC Holdings, Inc., a Delaware corporation whose
name was changed to XM Satellite Radio Holdings Inc.
"AMSC Common Stock" means the voting common stock, par value $0.01 per
share, of AMSC.
"Acquired AMSC Stock" means the sum of the First Transfer and the
Second Transfer.
"Beneficially Own" means the ownership of any shares of AMSC Common Stock
as to which the person, entity, or group is the beneficial owner as determined
under Rule 13d-3 under the Exchange Act, provided that in calculating record or
beneficial ownership for purposes of this Agreement, the application of such
definition shall not result in the same shares of AMSC Common Stock being
counted more than once.
"Business Day" means any day other than a Saturday, Sunday or other day on
which the national or state banks located in New York, New York or Washington,
DC are authorized to be closed.
"Class A Stockholder" means Xxxx X. Xxxxxx, whose stock ownership in
WorldSpace is specified in a letter delivered by WorldSpace to AMSC as of the
date of this Agreement.
"Class B Stockholders" means all of the stockholders of WorldSpace as of
the date hereof other than the Class A Stockholder, which Class B Stockholders
(together with their stock ownership in WorldSpace) are listed in a letter
delivered by WorldSpace to AMSC as of the date of this Agreement, which list may
be corrected by WorldSpace at the Closing as reasonably acceptable to AMSC.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"FCC" means the Federal Communications Commission, or any successor
agency thereto.
"First Transfer" means 19.9% of the issued and outstanding shares of AMSC
Common Stock immediately prior to the Closing.
"Option Holders" means those persons or entities (and such persons' or
entities' respective heirs or successors in interest) holding options, warrants,
or other rights exercisable to acquire an interest in WorldSpace, which person
or entities (together with the number of such
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options, warrants, or rights) are listed in a letter delivered by WorldSpace to
AMSC as of the date of this Agreement, which list may be corrected by WorldSpace
at the Closing as reasonably acceptable to AMSC.
"SEC" means the Securities and Exchange Commission, or any successor
agency thereto.
"Second Transfer" means that number of shares of AMSC Common Stock equal
to 8,614,244 minus the number of shares of AMSC Common Stock in the First
Transfer.
"Securities Act" means the Securities Act of 1933, as amended.
"$75 Million Portion" means a portion of the principal amount of the
Bridge, Additional Amounts and Working Capital Loans issued by WorldSpace to
AMRC Holdings pursuant to the Bridge, Additional Amounts and Working Capital
Credit Facility dated as of May 16, 1997 among AMRC Holdings, AMRC, AMSC and
WorldSpace, as amended by Amendment No. 1 to Bridge, Additional Amounts and
Working Capital Credit Facility dated as of the date hereof, equal to $75
million.
"Significant Stockholders" means those WorldSpace Stockholders or Option
Holders that Beneficially Own more than 1% of the then outstanding shares of
AMSC Common Stock. In the event that the WorldSpace Stockholders or Option
Holders are direct or indirect beneficiaries of XM Ventures (provided that no
WorldSpace Stockholder or Option Holder shall be deemed to be an indirect
beneficiary of XM Ventures solely by reason of holding shares of WorldSpace
capital stock), then the determination of whether a WorldSpace Stockholder or
Option Holder is a Significant Stockholder shall be made by adding to the number
of shares of AMSC Common Stock owned of record or beneficially by any WorldSpace
Stockholder or Option Holder, that number of shares of AMSC Common Stock equal
to the product of the number of shares of AMSC Common Stock then owned by XM
Ventures multiplied by a fraction equal to the percentage of assets of XM
Ventures that such WorldSpace Stockholder or Option Holder would receive if XM
Ventures were to distribute all of its assets to the WorldSpace Stockholders
and/or Option Holders as of the date of the determination, assuming that all
options, warrants or other rights exercisable to acquire an interest in
WorldSpace held by such WorldSpace Stockholder or Option Holder had been
exercised by that WorldSpace Stockholder or Option Holder.
"Transferred XM Stock" means the 25 shares of XM Holdings Common Stock
owned by WorldSpace as of the date hereof.
"WorldSpace Stockholders" means the Class A Stockholder and the Class B
Stockholders and such Class A Stockholder's and Class B Stockholders' respective
heirs or successors in interest.
"XM Common Stock" means the common stock, par value $0.10 share, of XM
Satellite Radio, Inc.
"XM Holdings Common Stock" means the common stock, par value $0.10 share,
of XM Holdings.
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ARTICLE 2
EXCHANGE
2.1 Transfer of WorldSpace's XM Interest to XM Ventures.
(a) Prior to the Closing, WorldSpace shall establish XM Ventures as an
irrevocable trust in which WorldSpace shall have no reversionary interest. The
only beneficiaries of XM Ventures shall be WorldSpace and/or, at the election of
WorldSpace, the WorldSpace Stockholders and/or the Option Holders (but only upon
exercise by the Option Holders of their options, warrants or rights exercisable
to acquire an interest in WorldSpace), as well as such holders' heirs (in the
case of a natural person) or successors in interest (in the case of an
artificial person) excluding successors in interest resulting from a change in
control. WorldSpace shall name the trustee of XM Ventures, provided, however,
that any such trustee and any successor trustee must, in AMSC's reasonable
judgment, not have an adverse effect on AMSC's ability to apply for or hold FCC
licenses. AMSC acknowledges that the persons and entities identified as
potential trustees in a letter delivered by WorldSpace to AMSC on the date
hereof meet the requirements of the previous sentence. WorldSpace or XM
Ventures, as the case may be, shall give AMSC written notice of the identity of
the trustee or any successor trustee no later than five (5) Business Days prior
to appointment of the trustee or successor trustee.
(b) Prior to or at the Closing, WorldSpace shall release any related
security interest and shall transfer to XM Ventures all of WorldSpace's right,
title and interest in and to all assets held by WorldSpace relating to XM
Holdings and XM Satellite Radio, Inc., except for the $75 Million Portion
(collectively, the "XM Interest"), including without limitation, the following:
(i) The Transferred XM Stock;
(ii) That certain Convertible Note dated April 1, 1998 in the
principal amount of $54,536,112 convertible into 62.3270 shares of XM Holdings
Common Stock, and any interest accrued or capitalized with respect thereto ("XM
Convertible Note");
(iii) The Bridge, Additional Amounts and Working Capital Loans
issued by WorldSpace to AMRC Holdings pursuant to the Bridge, Additional Amounts
and Working Capital Credit Facility dated as of May 16, 1997 among AMRC
Holdings, AMRC, AMSC and WorldSpace, as amended by Amendment No. 1 to Bridge,
Additional Amounts and Working Capital Credit Facility dated as of the date
hereof, and any interest accrued or capitalized with respect thereto, other than
the $75 Million Portion;
(iv) Options to purchase (A) 97.2222 shares of XM Holdings
Common Stock pursuant to the Bridge Option, (B) 128.8876 shares of XM Holdings
Common Stock pursuant to the Additional Amounts Option, and (C) 3.5111 shares of
XM Holdings Common Stock pursuant to the Working Capital Option, each of which
is dated as of May 16, 1997 between AMRC Holdings and WorldSpace (each of (A),
(B) and (C) being collectively referred to as "XM Options"); and
(v) The 80.9389 shares of XM Common Stock pledged under the
Security Agreement, dated as of May 16, 1997 between AMRC Holdings and
WorldSpace.
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(c) If the trust beneficiaries of XM Ventures include the WorldSpace
Stockholders and/or the Option Holders, then upon receipt of the XM Interest, XM
Ventures shall issue to WorldSpace a note (the "WorldSpace Note"). The
WorldSpace Note shall provide that WorldSpace shall have no recourse in respect
of the WorldSpace Note to the AMSC Common Stock to be issued by AMSC to XM
Ventures hereunder, other than the right to receive proceeds from sales of AMSC
Common Stock made in conformance with the terms of this Agreement.
(d) At the Closing, XM Holdings shall redeem the $75 Million Portion
through the payment by XM Holdings to WorldSpace of cash in the amount of $75
million.
2.2 Exchange of AMSC Common Stock for XM Interest.
(a) At the Closing, XM Ventures shall transfer to AMSC the XM
Interest.
(b) In consideration of its receipt of the XM Interest, AMSC shall, at
the Closing, issue the First Transfer to XM Ventures and deliver to XM Ventures
certificates for such shares of AMSC Common Stock registered in the name of XM
Ventures, and agrees to issue the Second Transfer to XM Ventures subject only to
the satisfaction of the condition precedent set forth in Section 2.2(c) below.
(c) AMSC shall issue to XM Ventures the Second Transfer, and deliver
to XM Ventures certificates for such shares of AMSC Common Stock registered in
the name of XM Ventures, as expeditiously as possible but no later than five
Business Days after obtaining the requisite stockholder approval for such
issuance under Nasdaq NMS Rule 4460(i) (excluding the vote of any shares issued
under Section 2.2(b) hereof) (the "AMSC Stockholder Approval"). AMSC
acknowledges its obligation to deliver at or prior to the Closing the agreement
described in Section 2.3(b)(iv) hereof, and covenants that it shall (i) obtain
the AMSC Stockholder Approval as soon as practicable, but in no event later than
60 days following the Closing if the SEC does not review AMSC's proxy material,
or 120 days following the Closing if the SEC undertakes a review of AMSC's proxy
material; (ii) use commercially reasonable efforts, at its own expense, to cause
the stockholders executing such agreement to comply with their obligations
thereunder, and (iii) cooperate at its own expense with WorldSpace in any action
by WorldSpace to enforce the covenants of such stockholders under such
agreement. Notwithstanding the foregoing, if the SEC undertakes a review of
AMSC's proxy material and AMSC is unable as a result of such review to obtain
the AMSC Stockholder Approval prior to the 120th day following the Closing, AMSC
shall use commercially reasonable efforts to expedite the completion of the
SEC's review, and so long as AMSC is making such efforts, AMSC shall not be
deemed to be in breach of this Agreement for an additional 30 days following
such 120-day period; provided, however, that if AMSC requires information from
WorldSpace to complete the SEC's review, such time periods shall be extended for
the number of days that it takes WorldSpace to furnish such information.
(d) If AMSC obtains the AMSC Stockholder Approval prior to the Closing
Date, AMSC shall, at the Closing, issue the Second Transfer to XM Ventures and
deliver to XM Ventures certificates for such shares of AMSC Common Stock
registered in the name of XM Ventures.
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(e) In the event that, prior to the First Transfer and/or the Second
Transfer, the outstanding shares of AMSC Common Stock shall have been increased,
decreased, or changed into or exchanged for a different number or kind of shares
or securities by reorganization, recapitalization, reclassification, stock
dividend, stock split, or other like changes in AMSC's capitalization, then an
appropriate and proportionate adjustment shall be made in the number and kind of
shares to be thereafter delivered under the First Transfer and/or Second
Transfer, as the case may be; provided, however, that no adjustment shall be
required pursuant to this Section 2.2(e) for the issuance of:
(i) shares of AMSC Common Stock pursuant to any warrants,
rights, options, or any securities convertible or exchangeable for shares of
AMSC Common Stock outstanding as of the date hereof;
(ii) shares of AMSC Common Stock issued by AMSC under bona
fide employee benefit plans adopted by the Board of Directors of AMSC;
(iii) shares of AMSC Common Stock issued to stockholders of
any bona fide third party that merges into AMSC in proportion to their stock
holdings of such bona fide third party immediately prior to such merger, upon
such merger; or
(iv) shares of AMSC Common Stock pursuant to any agreement or
transaction with a bona fide third party that is determined by the Board of
Directors of AMSC, in good faith, to be commercially reasonable and in the best
interests of AMSC and its stockholders.
2.3 Closing.
(a) The transfer of the XM Interest described in Section 2.2(a) and
the AMSC Common Stock described in Section 2.2(b) shall occur at a closing (the
"Closing") to be held beginning at 10:00 A.M. at the offices of Xxxxxx & Xxxxxx,
located at 000 Xxxxxxx Xxxxxx, X.X., Xxxxxxxxxx, X.X. 00000, no later than three
(3) Business Days after the satisfaction or waiver of the conditions set forth
in Article 8 hereof or at such other place and time as the parties hereto may
agree (the date of the Closing being referred to herein as the "Closing Date").
(b) On the Closing Date, the following actions shall be taken in the
order specified below; provided, however, that all such actions shall be deemed
to occur simultaneously, and none of such actions shall be deemed to occur until
all of such actions have occurred :
(i) WorldSpace shall transfer the XM Interest to XM
Ventures;
(ii) XM Ventures shall transfer to AMSC the XM Interest;
(iii) AMSC shall issue the First Transfer to XM Ventures, and
deliver to XM Ventures certificates for such shares of AMSC Common Stock
registered in the name of XM Ventures;
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(iv) AMSC shall deliver to WorldSpace an agreement in the
form provided by AMSC to WorldSpace on the date hereof executed by AMSC
stockholders entitled to vote at least 50% of the then outstanding shares of
AMSC Common Stock, in which those stockholders agree to vote in favor of any
proposal presented for stockholder approval by AMSC management for the issuance
of the Second Transfer to XM Ventures;
(v) XM Holdings shall retire the $75 Million Portion through
the payment by XM Holdings to WorldSpace of cash in the amount of $75 million;
(vi) The Shareholder Agreement dated as of May 16, 1997 by
and among AMRC Holdings, WorldSpace and AMSC shall terminate. WorldSpace
acknowledges that it shall have no further rights or obligations under the
Pledge Cancellation and Investment Agreement dated as of January 15, 1999 by and
among XM Holdings, WorldSpace, AMSC, and for certain limited purposes, Baron
Asset Fund;
(vii) AMSC shall deliver to WorldSpace, XM Ventures amd XM
Holdings a certificate of AMSC executed by Xxxxxx Xxxxxxx, Chief Executive
Officer of AMSC, certifying that the representations and warranties of AMSC in
Article 5 hereof are true and correct in all material respects as of the Closing
Date;
(viii) XM Holdings shall deliver to WorldSpace, XM Ventures and
AMSC a certificate of XM Holdings executed by Xxxx Xxxxxx, Chief Executive
Officer of XM Holdings, certifying that the representations and warranties of XM
Holdings in Article 6 hereof are true and correct in all material respects as of
the Closing Date;
(ix) WorldSpace shall deliver to AMSC and XM Holdings a
certificate of WorldSpace executed by Xxxx X. Xxxxxx, Chief Executive Officer of
WorldSpace, certifying that the representations and warranties of WorldSpace in
Article 4 hereof are true and correct in all material respects as of the Closing
Date;
(x) AMSC shall deliver to WorldSpace, XM Ventures and XM
Holdings an opinion of outside counsel, such outside counsel and the form and
substance of such opinion to be reasonably satisfactory to WorldSpace, to the
effect that the execution, delivery and performance of this Agreement by AMSC,
and the consummation of the transactions contemplated hereby by AMSC, have been
authorized by all necessary corporate action on the part of AMSC, and that this
Agreement constitutes the legal, valid and binding obligation of AMSC
enforceable against it in accordance with the terms hereof, subject to
bankruptcy, insolvency, moratorium, reorganization, fraudulent transfer and
other laws affecting creditors' rights generally and to equitable principles;
(xi) WorldSpace shall deliver to AMSC and XM Holdings an
opinion of outside counsel, such outside counsel and the form and substance of
such opinion to be reasonably satisfactory to AMSC, to the effect that the
execution, delivery and performance of this Agreement by WorldSpace, and the
consummation of the transactions contemplated hereby by WorldSpace , have been
authorized by all necessary corporate action on the part of WorldSpace, and that
this Agreement constitutes the legal, valid and binding obligation of WorldSpace
enforceable against it in accordance with the terms hereof, subject to
bankruptcy,
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insolvency, moratorium, reorganization, fraudulent transfer and
other laws affecting creditors' rights generally and to equitable principles;
(xii) XM Holdings shall deliver to WorldSpace, XM Ventures and
AMSC an opinion of outside counsel, such outside counsel and the form and
substance of such opinion to be reasonably satisfactory to WorldSpace, to the
effect that the execution, delivery and performance of this Agreement by XM
Holdings, and the consummation of the transactions contemplated hereby by XM
Holdings, have been authorized by all necessary corporate action on the part of
XM Holdings, and that this Agreement constitutes the legal, valid and binding
obligation of XM Holdings enforceable against it in accordance with the terms
hereof, subject to bankruptcy, insolvency, moratorium, reorganization,
fraudulent transfer and other laws affecting creditors' rights generally and to
equitable principles.
ARTICLE 3
RESTRICTIONS ON AMSC STOCK
3.1 Distribution of Stock and Liquidity Restrictions.
(a) Except as set forth herein, XM Ventures shall not effect any
offer to sell, sale, contract to sell or otherwise dispose of any shares of AMSC
Common Stock. Notwithstanding the foregoing, XM Ventures may pledge shares of
AMSC Common Stock to a pledgee that is a bank, savings and loan association or
credit union organized under the laws of the United States or any state thereof,
the deposits of which are insured by a United States federal agency, pursuant to
a bona fide pledge of such shares as collateral security for indebtedness or
other obligations due to the pledgee, provided that such shares shall remain
subject to, and upon foreclosure, realization or other similar action by the
pledgee, shall be transferred only in accordance with, the provisions of Section
3.1(b).
(i) Upon the receipt by XM Ventures of the First Transfer, XM
Ventures may sell or otherwise dispose of and/or distribute to the WorldSpace
Stockholders and/or Option Holders (if and when such Option Holders become
stockholders of WorldSpace) up to 1.7 million shares of AMSC Common Stock
received under the First Transfer, and the remaining shares from the First
Transfer as well as all of the shares under the Second Transfer shall be held by
XM Ventures in accordance with the terms of this Agreement.
(ii) On or after the last day of each consecutive 3-month period
following the Closing Date, XM Ventures may sell or otherwise dispose of and/or
distribute to the WorldSpace Stockholders and/or Option Holders (if and when
such Option Holders become stockholders of WorldSpace) up to an additional 20%
of the Acquired AMSC Stock.
Any such sales, disposals or distributions by XM Ventures
pursuant to this Section 3.1(a) shall be made in compliance with the terms of
this Agreement (including without limitation Sections 3.1(b) and 7.7 hereof, and
the legend set forth in Section 4.9 hereof) and applicable securities laws.
(b) XM Ventures and each of the Significant Stockholders, without
the prior written consent of AMSC, which consent shall not be unreasonably
withheld, shall not
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(i) knowingly transfer in a directed sale any of the AMSC Common Stock held by
them to: (A) WorldSpace or any affiliate of WorldSpace (other than a WorldSpace
Stockholder or Option Holder in accordance with the terms of this Agreement);
(B) any alien or the representative of any alien; or (C) any corporation,
partnership, or other legal entity of which more than one-fourth of the capital
stock or other ownership interests is owned of record or voted by aliens, their
representatives, or by a foreign government or representative thereof; or (ii)
transfer, in any single transaction or in any related series of transactions to
any individual, entity, or group of individuals or entities, such number of
shares of AMSC Common Stock held by them constituting 5% or more of the then
outstanding shares of AMSC Common Stock. The parties hereto acknowledge and
agree that nothing in this Agreement is intended to restrict the right of XM
Ventures to adjust the amount of shares of AMSC Common Stock distributed to its
beneficiaries to give effect to the respective interests of WorldSpace
Stockholders and Option Holders in WorldSpace. XM Ventures and each Significant
Stockholder further agree to provide notice to any WorldSpace Stockholder or
Option Holder to whom XM Ventures or any Significant Stockholder distributes or
transfers any shares of AMSC Common Stock of the transfer and voting
restrictions imposed by Sections 3.1(b) and 3.2(a) hereof which would apply in
the event such WorldSpace Stockholder or Option Holder becomes a Significant
Stockholder.
(c) Except with respect to the rights of AMSC under this
Agreement, XM Ventures and WorldSpace acknowledge and agree that AMSC and XM
Holdings shall have no control over, and shall not in any way participate in,
any distribution by XM Ventures of AMSC Acquired Stock to the WorldSpace
Stockholders. The parties hereto further acknowledge and agree that neither AMSC
nor XM Holdings shall have any liability to XM Ventures, WorldSpace or to any
WorldSpace Stockholders arising out of or in connection with any such
distribution.
3.2 Voting Restrictions.
(a) From the Closing Date until the first date on which XM
Ventures and the Significant Stockholders hold less than 15% of the then
outstanding shares of AMSC Common Stock (the "Mirror Voting Period"), XM
Ventures and each Significant Stockholder shall, with respect to any vote or
consent by the holders of AMSC Common Stock on any matter, be present in person
or represented by proxy at any meeting of the AMSC stockholders to consider such
matter, and shall vote such shares of AMSC Common Stock held by them, or sign
any such consent, in proportion to the votes or consents of all other AMSC
stockholders voting on or consenting to such matter.
(b) Following the expiration of the Mirror Voting Period, XM
Ventures and the Significant Stockholders shall vote the AMSC Common Stock held
by XM Ventures and the Significant Stockholders, respectively, as each
determines in its own discretion.
3.3 Legends. The certificates for shares of AMSC Common Stock
distributed to Significant Stockholders shall, in respect of the restrictions on
voting set forth in Section 3.2(a), bear the following legend:
THE VOTING OF THE SHARES EVIDENCED BY THIS CERTIFICATE IS RESTRICTED BY THE
TERMS OF AN EXCHANGE AGREEMENT, DATED AS OF JUNE 7, 1999, COPIES OF WHICH ARE ON
FILE WITH THE ISSUER OF THIS CERTIFICATE. NO VOTE SHALL BE EFFECTIVE UNLESS AND
UNTIL THE TERMS AND CONDITIONS OF
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SECTION 3.2(a) OF THE AFORESAID EXCHANGE AGREEMENT HAVE BEEN COMPLIED WITH IN
FULL.
Certificates for shares of AMSC Common Stock distributed to Significant
Stockholders shall, in respect of the restrictions on transfer set forth in
Section 3.1(b), also bear the following legend:
THE SALE, ASSIGNMENT, TRANSFER OR OTHER DISPOSITION OF THE SHARES EVIDENCED BY
THIS CERTIFICATE IS RESTRICTED BY THE TERMS OF AN EXCHANGE AGREEMENT, DATED AS
OF JUNE 7, 1999, COPIES OF WHICH ARE ON FILE WITH THE ISSUER OF THIS
CERTIFICATE. NO SALE, ASSIGNMENT, TRANSFER OR OTHER DISPOSTION SHALL BE
EFFECTIVE UNLESS AND UNTIL THE TERMS AND CONDITIONS OF THE AFORESAID EXCHANGE
AGREEMENT, INCLUDING WITHOUT LIMITATION, SECTION 3.1(b) THEREOF, HAVE BEEN
COMPLIED WITH IN FULL.
AMSC shall, upon presentation of a certificate representing shares of
AMSC Common Stock with respect to which one or both of the foregoing
restrictions have expired or are not applicable, together with such evidence
(including, when such an opinion would customarily be required by AMSC of its
stockholders, an opinion of counsel obtained at the stockholder's expense and
reasonably satisfactory to AMSC) of such lapse or nonapplicability as AMSC would
reasonably request of stockholders who are similarly situated, promptly cause to
be issued a replacement certificate for such shares of AMSC Common Stock without
the applicable restrictive legend.
3.4 Registration Rights.
(a) Shelf Registration. AMSC shall use its best efforts to effect
at its expense (excluding expenses relating to services provided by counsel or
other advisors retained by persons other than AMSC) the registration for resale
of the shares of Acquired AMSC Stock, including without limitation the filing of
post-effective amendments, appropriate qualification under applicable blue sky
or other state securities laws and appropriate compliance with applicable
regulations issued under the Securities Act, as would permit or facilitate the
sale or distribution of all the shares of AMSC Common Stock on a delayed or
continuous basis in the manner (including manner of sale) reasonably requested
in writing by XM Ventures or the holders of such AMSC Common Stock (together,
the "Holders"). Such best efforts by AMSC shall include the following:
(i) As expeditiously as reasonably possible after the Closing
Date and in no event more than 30 days thereafter prepare and file, at AMSC's
expense, with the SEC pursuant to Rule 415 under the Securities Act on Form S-3
under the Securities Act (or in the event that AMSC is ineligible to use such
form, such other form as AMSC is eligible to use under the Securities Act)
covering the shares of AMSC Common Stock to be issued pursuant to this Agreement
("Shelf Registration Statement"). Thereafter, AMSC shall use its best efforts to
cause such Shelf Registration Statement and other filings to be declared
effective as expeditiously as reasonably possible. AMSC shall provide XM
Ventures and its counsel a reasonable opportunity to review any such Shelf
Registration Statement or amendment or supplement thereto prior to filing, and
XM Ventures and its counsel shall use their best efforts to complete such review
in a timely fashion.
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(ii) Prepare and file with the SEC such amendments and
supplements to such Shelf Registration Statement and the prospectus used in
connection with such Shelf Registration Statement as may be necessary to comply
with the provisions of the Securities Act with respect to the disposition of all
securities covered by such Shelf Registration Statement and notify the Holders
of the filing and effectiveness of such Shelf Registration Statement and any
amendments or supplements.
(iii) Furnish such numbers of copies of a current prospectus
conforming with the requirements of the Securities Act, copies of the Shelf
Registration Statement, any amendment or supplement thereto and any documents
incorporated by reference therein and such other documents as such Holders may
reasonably require in order to facilitate the disposition of shares of AMSC
Common Stock owned by such Holders.
(iv) Use its best efforts to register and qualify, as
expeditiously as reasonably possible, the securities covered by such Shelf
Registration Statement under such other securities or "Blue Sky" laws of such
jurisdictions in the United States as shall be reasonably requested by the
Holders; provided that AMSC shall not be required in connection therewith or as
a condition thereto to qualify to do business or to file a general consent to
service of process in any such states or jurisdictions.
(v) Notify the Holders immediately of the happening of any event
as a result of which the prospectus (including any supplements thereto or
thereof) included in such Shelf Registration Statement, as then in effect,
includes an untrue statement of material fact or omits to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading in light of the circumstances then existing, and use its best efforts
to promptly update and/or correct such prospectus.
(vi) Notify the Holders immediately of the issuance by the SEC or
any state securities commission or agency of any stop order suspending the
effectiveness of the Shelf Registration Statement or the initiation of any
proceedings for that purpose. AMSC shall use its best efforts to prevent the
issuance of any stop order and, if any stop order is issued, to obtain the
lifting thereof at the earliest possible time.
(vii) Use its best efforts to list, as expeditiously as reasonably
possible, the shares of AMSC Common Stock covered by such Shelf Registration
Statement with all securities exchange(s) and/or markets on which the AMSC
Common Stock is then listed and prepare and file any required filings with the
National Association of Securities Dealers, Inc. or any securities exchange or
market on which shares of AMSC Common Stock are traded.
(viii) Take all steps reasonably necessary to enable the Holders to
avail themselves of the prospectus delivery mechanism set forth in Rule 153 (or
successor thereto) under the Act, provided, however, that nothing shall require
AMSC to list AMSC Common Stock on any securities exchange or market on which
shares of AMSC Common Stock are not then traded.
(b) Blackout Periods. During any consecutive 365-day period,
AMSC may suspend the effectiveness of the Shelf Registration Statement on two
occasions to extend no
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longer than reasonably necessary and in no event more than 30 consecutive days,
separated, in each case, by at least 60 days from any prior blackout period, if
there is a possible acquisition or business combination or other transaction,
business development or event involving AMSC that may require disclosure in the
Shelf Registration Statement and the Board of Directors of AMSC determines in
the good faith exercise of its reasonable judgment that such disclosure is not
in the best interests of AMSC and its stockholders or obtaining any financial
statements relating to an acquisition or business combination required to be
included in the Shelf Registration Statement would be impracticable. In such a
case, AMSC shall promptly notify the Holders of the suspension of the Shelf
Registration Statement's effectiveness, provided that such notice shall not
require AMSC to disclose the possible acquisition or business combination or
other transaction, business development or event if the Board of Directors of
AMSC determines in good faith that such acquisition or business combination or
other transaction, business development or event should remain confidential.
Upon the abandonment, consummation, or termination of the possible acquisition
or business combination or other transaction, business development or event, or
the availability of the required financial statements with respect to a possible
acquisition or business combination, the suspension of the use of the Shelf
Registration Statement pursuant to this Section 3.4(b) shall cease and AMSC
shall promptly notify the Holders that disposition of Acquired AMSC Stock may be
resumed.
(c) Piggyback and Demand Registration Rights. Except as set
forth herein, at any time following the Closing Date, whenever AMSC proposes to
register any of its securities in an underwritten offering under the Securities
Act and the registration form to be used may be used for the registration of the
Acquired AMSC Stock (a "Piggyback Registration"), whether or not for sale for
its own account, AMSC shall give prompt written notice to the Holders of its
intention to effect such a registration, and shall include in such registration
all Acquired AMSC Stock with respect to which AMSC has received written requests
for inclusion therein from any Holders within 15 days after the receipt of
AMSC's notice, provided that no such notice shall be required and AMSC shall
have no obligation to provide piggyback registration rights to any Holder if
AMSC stockholders with priority with respect to piggyback registration rights
have exercised such rights and the managing underwriter of such offering advises
AMSC in writing that the inclusion of the securities held by the stockholders
with priority with respect to piggyback registration rights and requested to be
included in the offering, or the inclusion of any securities in addition to such
securities held by the stockholders with priority with respect to piggyback
registration rights, would adversely affect the marketability of such offering,
or, upon expiration or termination of the Registration Rights Agreements (as
defined below), the managing underwriter of any such offering advises AMSC in
writing that the inclusion of securities by the Holders would, in the good faith
judgment of such underwriter, adversely affect the marketability of such
offering. AMSC shall in any event have no obligation to provide piggyback
registration rights to any Holder if the managing underwriter of the relevant
offering advises AMSC that the inclusion in the offering of the Acquired AMSC
Stock held by the Holder would adversely affect the marketability of such
offering. The Piggyback Registration described in this Section 3.4(c) shall in
all events be subject and subordinate to the registration rights provided for
(i) in the Amended and Restated Registration Rights Agreement dated as of March
31, 1998, as amended through the date hereof, by and among AMSC, Xxxxxx
Electronics Corporation, Singapore Telecommunications Ltd. and Baron Capital
Partners, L.P., (ii) the Registration Rights Agreement dated as of March 31,
1998 by and between Motorola, Inc and AMSC, as amended through the date hereof,
including the rights to priority on inclusion of
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shares of AMSC Common Stock set forth therein, and (iii) the Registration Rights
Agreement by and among AMSC, Toronto Dominion Investments, Inc., Xxxxxx Guaranty
Trust Company of New York and Xxxxxx Communications Satellite Services, Inc.,
amended and restated as of April 19, 1996, as further amended and restated
through the date hereof (collectively, the "Registration Rights Agreements").
Other than the registration rights granted pursuant to the Registration Rights
Agreements, AMSC has not granted, and will not grant, to any person any
piggyback rights with priority over the rights granted to Holders hereunder.
Notwithstanding the foregoing, the Holders shall not be entitled to Piggyback
Registration in connection with the first underwritten offering by AMSC
following the Closing Date. Commencing upon the later of 24 months following the
Closing Date or the exercise or expiration of all demand rights under the
Registration Rights Agreements, but in no event later than 36 months after the
Closing Date, irrespective of whether all demand rights under the Registration
Rights Agreements have been exercised or expired, the Holders shall be entitled
to two underwritten demand registrations by AMSC with the SEC on customary terms
and procedures, subject to the right of the AMSC Board of Directors to delay
such registration for no more than 90 days upon the good faith determination
that such registration is not in the best interests of AMSC at that time. AMSC
shall not amend any of its existing registration rights agreement nor enter into
any new registration rights agreement granting registration rights that are
equal to or have priority over any of the rights granted to the Holders under
this Article 3.
(d) Rule 144. The WorldSpace Stockholders shall otherwise have no
registration rights with respect to the AMSC Common Stock held by them, but may
at any time, subject to the requirements of Section 3.1(b) hereof, offer, sell
or transfer the AMSC Common Stock held by them in accordance with the
requirements in Rule 144 under the Securities Act. AMSC shall make and keep
public information available, as those terms are understood and defined under
Rule 144, so as to make such Rule available to the Holders.
(e) Notice to Holders. AMSC's obligation to provide notice to any
Holder hereunder shall be satisfied if AMSC provides written notice to XM
Ventures and to such Holder addressed to the most recent address provided for
such Holder by XM Ventures in writing to AMSC.
(f) Eligibility. The registration rights described in this Section
3.4 shall not be available to any Holder who is not at the time a WorldSpace
Stockholder or an Option Holder.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
OF WORLDSPACE
WorldSpace represents and warrants to AMSC and XM Holdings that:
4.1 Corporate Existence and Power.
(a) WorldSpace is a corporation duly organized, validly existing
and in good standing under the laws of its jurisdiction of incorporation; and
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(b) WorldSpace has the corporate power and authority to execute,
deliver and perform its obligations under this Agreement.
4.2 Due Authorization; No Contravention.
The execution, delivery and performance by WorldSpace of this Agreement
have been duly authorized by all necessary corporate action, other than the
approval of the stockholders of WorldSpace contemplated by Section 4.5, and do
not and will not:
(a) Breach or violate the terms of the charter or bylaws of
WorldSpace or the terms of any contract to which WorldSpace is a party or by
which it is bound; or
(b) Violate any law or regulation applicable to WorldSpace.
4.3 Binding Effect. This Agreement has been duly authorized,
except for the approval of the stockholders of WorldSpace contemplated by
Section 4.5, executed and delivered by WorldSpace and constitutes the legal,
valid and binding obligation of it enforceable against it in accordance with the
terms hereof, subject to bankruptcy, insolvency, moratorium, reorganization,
fraudulent transfer and other laws affecting creditors' rights generally and to
equitable principles.
4.4 Consents. No consents or approvals of, or filings or
registrations with, any public body or authority are necessary, other than
possible pre-acquisition notification filings required under the
Xxxx-Xxxxx-Xxxxxx Improvements Acts of 1976, as amended ("HSR Act"), with
respect to the transactions contemplated hereby, and no consents or approvals of
any third parties are necessary in connection with the execution and delivery of
this Agreement by WorldSpace or the consummation by WorldSpace of the
transactions contemplated hereby.
4.5 Board and WorldSpace Stockholder Approvals. This Agreement and
the consummation of the transactions contemplated hereby have been approved by
all necessary action on the part of the Board of Directors of WorldSpace. The
Board of Directors of WorldSpace has adopted a resolution declaring the
transaction advisable, has recommended that the WorldSpace stockholders approve
this Agreement and the transactions contemplated hereby, and has called a
meeting of WorldSpace stockholders to approve this Agreement and the
transactions contemplated hereby in accordance with Section 7.10.
4.6 WorldSpace Stockholders. As of the date hereof, WorldSpace has
delivered an agreement or agreements to AMSC executed by WorldSpace stockholders
entitled to vote at least 50% of the issued and outstanding shares of WorldSpace
common stock. In such agreements, the stockholders agree to vote in favor of
this Agreement and the transactions contemplated hereby. The percentage of
WorldSpace stockholders who have executed such agreements in favor of AMSC shall
be sufficient under the charter and bylaws of WorldSpace and applicable law to
constitute the approval required by Section 4.5 above. Such WorldSpace
stockholders shall continue to hold, on the date of the vote of WorldSpace
stockholders with respect to this Agreement and the transaction contemplated
hereby, at least 50% of the shares of WorldSpace common stock eligible to vote
thereon.
4.7 Ownership of XM Interest. The Transferred XM Stock constitutes
all of the XM Holdings Common Stock held of record or beneficially by
WorldSpace, and WorldSpace has no
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options to purchase or acquire any XM Holdings Common Stock other than those
included in the XM Interest and otherwise has no right, title or interest in XM
Holdings, other than the $75 Million Portion. WorldSpace owns of record and
beneficially the Transferred XM Stock, with good and marketable title thereto
free and clear of all liens, claims or encumbrances. WorldSpace owns all of the
other assets constituting the XM Interest free and clear of all liens, claims or
encumbrances. Immediately after the Closing, AMSC shall have good and marketable
title in and to the XM Interest, free and clear of all liens, claims or
encumbrances. WorldSpace shall have no ownership or other economic interest in
XM Holdings immediately after the Closing other than those specified in a letter
delivered by WorldSpace to AMSC and XM Holdings as of the date hereof.
4.8 Access, Sophistication.
(a) WorldSpace has been provided copies of all reports and
registration statements filed by AMSC with the SEC pursuant to U.S. federal
securities laws since December 31, 1998 ("AMSC SEC Documents"), and has reviewed
such documents and has relied only on (i) statements and information contained
therein and (ii) the representations, warranties, terms and conditions of this
Agreement. WorldSpace will advise the WorldSpace Stockholders in its proxy
statement of the availability for review by each WorldSpace Stockholder of each
AMSC SEC Document.
(b) All documents, books and records requested by WorldSpace
pertaining to AMSC have been made available for inspection by WorldSpace and its
agents and representatives, and WorldSpace and its agents and representatives
have had a reasonable opportunity to ask questions of and receive answers from
AMSC or officers or employees acting on behalf of AMSC concerning the terms and
conditions of the issuance to XM Ventures of the AMSC Common Stock pursuant to
this Agreement (the "AMSC Acquired Stock") and the business and prospects of
AMSC. WorldSpace and its agents and representatives have such knowledge and
experience in financial and business matters as to enable them to utilize the
information made available to them in connection with the transactions
contemplated hereby, to evaluate the merits and risks of the issuance by AMSC to
XM Ventures of the Acquired AMSC Stock pursuant to Article 2 hereof, and to make
an informed decision with respect thereto and such an evaluation and informed
decision have been made.
4.9 Investment Representation. WorldSpace acknowledges that the
shares of AMSC Common Stock to be acquired by XM Ventures will not have been
registered under the Securities Act or any state or other jurisdiction's
securities laws. WorldSpace further acknowledges that the shares of AMSC Common
Stock must be held indefinitely by XM Ventures and may not be sold or
transferred, except in accordance with the terms of the legend set forth below.
WorldSpace will advise each WorldSpace Stockholder in its proxy statement of
these restrictions. WorldSpace acknowledges that the certificate or certificates
for shares of AMSC Common Stock will bear a legend substantially to the effect
set forth below and that a stop transfer order may be placed with respect
thereto.
THE SHARES OF COMMON STOCK REPRESENTED BY
THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
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ANY APPLICABLE SECURITIES LAWS OR ANY
JURISDICTION AND MAY NOT BE TRANSFERRED UNTIL
(A) A REGISTRATION UNDER SUCH SECURITIES ACT
AND SUCH APPLICABLE SECURITIES LAWS SHALL HAVE
BECOME EFFECTIVE WITH REGARD THERETO OR (B) IN
THE OPINION OF COUNSEL REASONABLY ACCEPTABLE
TO THE COMPANY, REGISTRATION UNDER SUCH
SECURITIES ACT AND SUCH APPLICABLE SECURITIES
LAWS IS NOT REQUIRED IN CONNECTION WITH SUCH
PROPOSED TRANSFER.
AMSC shall, upon presentation of a certificate representing
shares of AMSC Common Stock with respect to which the foregoing restriction is
not applicable, together with such evidence of such nonapplicability as AMSC may
reasonably request, promptly cause to be issued a replacement certificate for
such shares of AMSC Common Stock without the restrictive legend.
4.10 Tax and Other Consequences. WorldSpace has not relied in any
way upon any statement or representation by AMSC, XM Holdings, or their
advisors, relating to any tax and other valuation consequences arising from the
transactions contemplated by this Agreement. WorldSpace has not represented to
any WorldSpace Stockholder that WorldSpace has relied upon any such statement or
representation by AMSC, XM Holdings, or their advisors.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF AMSC
AMSC hereby represents and warrants to WorldSpace and XM Holdings
that:
5.1 Corporate Existence and Power.
(a) AMSC is a corporation duly organized, validly existing and
in good standing under the laws of its jurisdiction of incorporation.
(b) AMSC has the corporate power and authority to execute,
deliver, and perform its obligations under this Agreement.
5.2 Capital Structure. AMSC's authorized capital stock consists of
75 million shares of AMSC Common Stock, of which 32,332,824 were issued and
outstanding and none were held in treasury as of April 21, 1999, and 200,000
shares of AMSC Preferred Stock, none of which were issued and outstanding as of
April 21, 1999. All of the outstanding shares of AMSC Common Stock have been,
and all of the shares of Acquired AMSC Common Stock will be as of the date of
issuance of such shares, duly authorized, and validly issued, fully paid and
non-assessable. No shares of capital stock are, and no shares of Acquired Common
Stock shall as of the date of issuance of such shares be, entitled to preemptive
rights. As of April 21, 1999, 3,812,536 shares of AMSC Common Stock were
reserved for issuance upon the exercise of outstanding options and under other
employee
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benefit plans and 7,821,259 shares of AMSC Common Stock were reserved for
issuance upon the exercise of outstanding warrants. There are no other scrip,
rights to subscribe to, calls or commitments of any character whatsoever
relating to, or securities or rights exchangeable for or convertible into, any
shares of capital stock of AMSC, or contracts, commitments, understandings, or
arrangements by which AMSC is or may become bound to issue additional shares of
capital stock of AMSC or options, warrants, scrip, rights to subscribe to, or
commitments to purchase or acquire, any shares or securities or rights
convertible or exchangeable into shares, of capital stock of AMSC, and there
shall be no such rights relating to any shares of Acquired AMSC Common Stock as
of the date of issuance of such shares.
5.3 Due Authorization; No Contravention. The execution, delivery
and performance by AMSC of this Agreement have been duly authorized by all
necessary corporate action, other than the approval of the AMSC stockholders
contemplated by Section 2.2(c), and do not and will not:
(a) Breach or violate the terms of the Certificate of
Incorporation or bylaws of AMSC or the terms of any contract to which AMSC is a
party or by which it is bound; or
(b) Violate any law or regulation applicable to AMSC, including
but not limited to the rules and regulations promulgated from time to time by
the FCC.
5.4 Binding Effect. This Agreement has been duly authorized,
except for the approval of the stockholders of AMSC contemplated by Section
2.2(c) (which approval is not a condition to the Closing), executed and
delivered by AMSC and constitutes the legal, valid and binding obligation of
AMSC enforceable against it in accordance with the terms hereof, subject to
bankruptcy, insolvency, moratorium, reorganization, fraudulent transfer and
other laws affecting creditors' rights generally and to equitable principles.
5.5 Consents. No consents or approvals of, or filings or
registrations with, any public body or authority are necessary, other than
possible pre-acquisition filings required under the HSR Act with respect to the
transactions contemplated hereby, and no consents or approvals of any third
parties are necessary, in connection with the execution and delivery of this
Agreement by AMSC or the consummation by AMSC of the transactions contemplated
by this Agreement.
5.6 Tax and Other Consequences. AMSC has not relied in any way
upon any statement or representation by any of the other parties hereto, or
their advisors, relating to any tax and other valuation consequences arising
from the transactions contemplated by this Agreement.
5.7 Commission Filings. AMSC has filed with the SEC all forms,
reports, schedules, statements and other documents required to be filed by it
since December 31, 1996 (as supplemented and amended since the time of filing,
collectively, the "SEC Reports"), each of which complied when filed in all
material respects with all applicable requirements of the Securities Act and the
Exchange Act as of the time of such filings. None
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of the SEC Reports as of the time of such filings contained any untrue statement
of a material fact or omitted to state a material fact required to be stated
therein or necessary in order to make the statements therein, in light of the
circumstances in which they were made, not misleading.
5.8 Compliance With Law. Except as set forth in its SEC Reports,
AMSC has not and is not conducting its business in violation of any law,
regulation, judgment, order, decree, injunction, arbitration award, license,
authorization, opinion, agency requirement or permit of any governmental entity,
except for violations or possible violations that, individually or in the
aggregate, are not reasonably likely to have a material adverse effect on AMSC.
AMSC has all permits, licenses and franchises from governmental agencies
required to conduct its business as it is now being conducted, except for such
permits, licenses and franchises, the absence of which, individually or in the
aggregate, would not have a material adverse effect on AMSC.
5.9 AMSC Stockholders. The AMSC stockholders who will be
delivering at the Closing an agreement in the form delivered by AMSC to
WorldSpace on the date hereof relating to the AMSC Stockholder Approval own, in
the aggregate, at least 50% of the outstanding shares of AMSC Common Stock,
which percentage is sufficient to constitute a valid action of the holders of
AMSC Common Stock under the certificate of incorporation and bylaws of AMSC and
applicable law and under Nasdaq NMS Rule 4460(i). Such stockholders shall
continue to hold, on the date of the vote of AMSC stockholders with respect to
the AMSC Stockholder Approval, at least a majority of the shares of AMSC Common
Stock entitled to vote thereon.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF XM HOLDINGS
XM Holdings hereby represents and warrants to WorldSpace and AMSC that:
6.1 Corporate Existence and Power.
(a) XM Holdings is a corporation duly organized, validly
existing and in good standing under the laws of its jurisdiction of
incorporation; and
(b) XM Holdings has the corporate power and authority to
execute, deliver and perform its obligations under this Agreement.
6.2 Due Authorization; No Contravention. The execution, delivery
and performance by XM Holdings of this Agreement have been duly authorized by
all necessary corporate action, and do not and will not (i) breach or violate
the terms of the articles of incorporation or bylaws of XM Holdings or the terms
of any contract to which XM Holdings is a party or by which it is bound; or (ii)
violate any law or regulation applicable to XM Holdings.
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6.3 Binding Effect. This Agreement has been duly authorized,
executed and delivered by XM Holdings and constitutes the legal, valid and
binding obligation of it enforceable against it in accordance with the terms
hereof, subject to bankruptcy, insolvency, moratorium, reorganization,
fraudulent transfer and other laws affecting creditors' rights generally and to
equitable principles.
6.4 Consents. No consents or approvals of, or filings or
registrations with, any public body or authority are necessary, and no consents
or approvals of any third parties are necessary, in connection with the
execution and delivery of this Agreement by XM Holdings or the consummation by
XM Holdings of the transactions contemplated hereby.
ARTICLE 7
COVENANTS
7.1 Applications and Notices. As promptly as practicable after the
date hereof, the parties hereto shall submit any applications, notices or other
filings to any state or federal government agency, department or body, the
approval of which is required for consummation of the transactions contemplated
hereby. Without limiting the generality of the foregoing, the parties shall use
their best efforts to cooperate in good faith (i) to file no later than June 11,
1999 any pre-acquisition notification filings, if required, under the HSR Act
with respect to the transactions contemplated hereby, and (ii) to obtain as soon
as practicable early termination of any such filings.
7.2 Cooperation.
(a) The parties hereto shall each use its commercially
reasonable efforts in good faith to take or cause to be taken all action
necessary or desirable on its part so as to permit consummation of the
transactions contemplated hereby at the earliest possible date, including
seeking to obtain any necessary shareholder approval. No party hereto shall
take, or cause or to the best of its ability permit to be taken, any action that
would impair the prospects of completing the transactions contemplated hereby.
(b) Xxxx Xxxxxx shall use his commercially reasonable efforts in
good faith to provide relevant information in response to such requests that
AMSC may reasonably make in connection with AMSC's compliance with applicable
SEC and FCC laws, rules and regulations, including without limitation rules and
regulations relating to alien ownership.
7.3 Press Release. The parties hereto shall agree with each other
as to the form and substance of any press release and other public disclosures
related to this Agreement or the transactions contemplated hereby; provided,
however, that nothing contained herein shall prohibit any party hereto from
making any disclosure which its counsel deems necessary to comply with
applicable law.
7.4 Non-Competition. (a) WorldSpace agrees not to compete directly
or indirectly in the United States with the digital audio radio service business
of AMSC (the "DARS
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Business"), XM Holdings, or any successor to XM Holdings owned or controlled by
AMSC for so long as XM Ventures and Xxxx Xxxxxx Beneficially Own, directly or
indirectly, in the aggregate more than 10% of the then outstanding shares of
AMSC Common Stock and for a period of three years thereafter.
(b) Xxxx Xxxxxx agrees not to compete directly or indirectly
with the DARS Business in the United States of AMSC, XM Holdings, or any
successor to XM Holdings owned or controlled by AMSC for a period beginning on
the Closing Date and ending on the earlier of (i) the third anniversary of the
Closing, or (ii) such time as Xxxx Xxxxxx is no longer an employee, officer, or
director of WorldSpace or any affiliate of WorldSpace. For a period of three
years following the Closing, Xxxx Xxxxxx (the "receiving party") shall treat
confidentially and shall not disclose to any third party, without the prior
written consent of XM Holdings, any non-public information proprietary to XM
Holdings ("XM Confidential Information"). The confidentiality provisions of the
foregoing sentence shall not apply to information proprietary to, or developed
by, WorldSpace or WorldSpace International Network Inc. or any affiliate of
WorldSpace or WorldSpace International Network Inc. Information will not be
considered to be "XM Confidential Information" if it: (i) was known to the
receiving party before receipt thereof from XM Holdings; (ii) is disclosed to
the receiving party by a third party who has a right to make such disclosure;
(iii) is or becomes part of the public domain through no fault of the receiving
party; or (iv) is independently developed by the receiving party, WorldSpace,
WorldSpace International Network, Inc. or any affiliate of any of them without
dependence on any XM Confidential Information.
7.5 Definitive Agreement. The parties hereto specifically agree
and intend that this Agreement is and shall be construed as a definitive
agreement enforceable in accordance with its terms, including the required
satisfaction of the conditions precedent in Article 8 hereof, and have entered
into this Agreement intending to be bound by those terms. If there is any
disagreement as to any documentation referenced in this Agreement to be prepared
and executed on or prior to the Closing, then the unresolved terms of such
documentation shall not be deemed to be material so as to prevent enforcement of
this Agreement, and shall be determined in accordance with the dispute
resolution provision set forth in Section 9.5 hereof.
7.6 XM Ventures. WorldSpace shall cause XM Ventures to be formed
consistent with the terms of this Agreement, and upon its formation, to become a
party hereto at or before the Closing and to make the following representations
and warranties to AMSC and XM Holdings:
(a) Existence and Power.
(i) XM Ventures has been duly formed and is validly
existing under the laws of the jurisdiction of its organization.
(ii) XM Ventures has the power and authority to execute,
deliver and perform its obligations under this Agreement.
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(b) Due Authorization; No Contravention. The execution, delivery
and performance of this Agreement by XM Ventures have been duly authorized by
all necessary action, and do not and will not:
(i) Breach or violate the terms of any provision of the
organization documents of XM Ventures or other governing documents of XM
Ventures, or any contract to which XM Ventures is a party or by which it is
bound; or
(ii) Violate any requirement of law applicable to XM
Ventures.
(c) Binding Effect. This Agreement has been duly authorized,
executed and delivered by XM Ventures and constitutes the legal, valid and
binding obligation of it enforceable against it in accordance with the terms
hereof, subject to bankruptcy, insolvency, moratorium, reorganization,
fraudulent transfer and other laws affecting creditors' rights generally and to
equitable principles.
(d) Ownership of XM Interest. Upon transfer of the XM Interest
from WorldSpace, XM Ventures owns all of the assets constituting the XM Interest
free and clear of all liens, claims or encumbrances. Following the Closing, AMSC
shall have good and marketable title in and to the XM Interest.
(e) Investment Representation. XM Ventures is acquiring the
shares of AMSC Common Stock for its own account and not with a view to
distribution thereof and has no present intention to sell the shares of AMSC
Common Stock in violation of any securities laws, provided, however, that in
making the representation set forth herein, XM Ventures does not agree to hold
the shares of AMSC Common Stock for any minimum or other specific term and
reserves the right to dispose of the shares of AMSC Common Stock in accordance
with the terms of this Agreement. XM Ventures agrees that the shares of AMSC
Common Stock that it acquires shall bear a legend in the form set forth in
Section 4.7 hereof.
(f) WorldSpace Representations and Warranties. The
representations and warranties of WorldSpace set forth in Article 4 hereof are
accurate and correct in all material respects on and as of the Closing Date.
7.7 Distributions. All distributions of AMSC Acquired Stock by XM
Ventures, including, without limitation, the determination of the recipients of
and the amount of any distribution, shall be in compliance with the terms of
this Agreement and all applicable laws and regulations and shall not violate,
conflict with, or result in a breach of any provision of any agreement to which
XM Ventures or any of its assets may be subject.
7.8 AMSC Stockholder Agreement. AMSC will execute the agreement
referenced under Section 2.3(b)(iv) hereof.
7.9 AMSC Stockholder Meeting; Filings. AMSC will take all actions
required to be taken by it with respect to the AMSC Stockholder Approval under
Sections 2.2(c), and with
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respect to SEC filings under Section 3.4. AMSC will provide WorldSpace a
reasonable opportunity (in no event more than three Business Days) to review and
comment upon any disclosure in any AMSC proxy statement associated with the AMSC
Stockholder Approval to the extent such disclosure relates to WorldSpace,
WorldSpace Stockholders, WorldSpace International Network Inc. or WorldSpace
International Network Inc. stockholders.
7.10 WorldSpace Stockholders Meeting. WorldSpace will use its
commercially reasonable efforts to take, in accordance with applicable law and
its charter and bylaws, all action necessary to convene a meeting of WorldSpace
Stockholders or otherwise seek consent to obtain approval by WorldSpace
Stockholders of the transactions contemplated hereby (the "WorldSpace
Stockholder Approval") no later than June 23, 1999; provided, however that so
long as WorldSpace is making such efforts, WorldSpace shall not be in breach of
this provision until July 15, 1999. WorldSpace shall deliver a copy of this
Agreement to each of the WorldSpace Stockholders in connection with seeking such
stockholders' consent or approval.
7.11 AmeriSpace. WorldSpace will use commercially reasonable
efforts to implement as expeditiously as reasonably possible following the
Closing the terms of the letter relating to AmeriSpace in the form delivered by
WorldSpace and WorldSpace International to AMSC on the date hereof, and will not
take any actions contrary or inconsistent with the commitments and intent of the
parties expressed in such letter.
7.12 Reporting. AMSC and XM Holdings covenant and agree (i) to
treat and report for tax purposes the exchange of the Transferred XM Stock, the
XM Convertible Note, and the XM Options for AMSC Common Stock as a tax-free
reorganization under Section 368(a)(1)(B) of the Internal Revenue Code, (ii) to
treat and report for tax purposes the redemption by XM Holdings of the $75
Million Portion, as a retirement of a portion of the principal amount of the
Bridge, Additional Amounts and Working Capital Loans issued by WorldSpace to
AMRC Holdings pursuant to the Bridge, Additional Amounts and Working Capital
Credit Facility dated as of May 16, 1997 among AMRC Holdings, AMRC, AMSC and
WorldSpace, as amended by Amendment No. 1 to the Bridge, Additional Amounts and
Working Capital Credit Facility dated as of the date hereof, and (iii) to treat
and report for tax purposes the exchange of the remaining balance of such loans
for AMSC Common Stock as a retirement of the outstanding principal balance
thereof and accrued and unpaid interest on such loans. Neither AMSC nor XM
Holdings will take any action in connection with any audit or other proceeding
with the Internal Revenue Service or any state or local taxing authority that is
inconsistent with the foregoing undertakings.
ARTICLE 8
CONDITIONS PRECEDENT
8.1 Conditions Precedent - AMSC. The obligations of AMSC to
consummate the transactions contemplated by this Agreement shall be subject to
satisfaction of the following conditions at or prior to the Closing unless
waived by AMSC:
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(a) The representations and warranties of WorldSpace and XM
Ventures set forth in Article 4 and Section 7.6 hereof, respectively, shall be
true and correct in all material respects as of the date of this Agreement and
as of the Closing Date as though made on and as of the Closing Date; and
(b) WorldSpace shall have in all material respects performed all
obligations and complied with all covenants required by this Agreement to be
performed or complied with by it at or prior to the Closing.
8.2 Conditions Precedent -- WorldSpace. The obligations of WorldSpace
to consummate the transactions contemplated by this Agreement shall be subject
to satisfaction of the following conditions at or prior to the Closing unless
waived by WorldSpace:
(a) The representations and warranties of AMSC and of XM
Holdings set forth in Articles 5 and 6 hereof, respectively, shall be true and
correct in all material respects as of the date of this Agreement and as of the
Closing Date as though made on and as of the Closing Date;
(b) AMSC and XM Holdings shall have in all material respects
performed all of the respective obligations and complied with all of the
respective covenants required by this Agreement to be performed or complied with
by them at or prior to the Closing;
(c) WorldSpace shall have received the agreement referenced
under Section 2.3(b)(iv) hereof;
(d) WorldSpace shall have received the WorldSpace Stockholder
Approval as described under Section 7.10 hereof;
(e) WorldSpace shall have received a payment in cash from XM
Holdings of $75 million in connection with the retirement of the $75 Million
Portion; and
(f) The four operational agreements between XM Satellite Radio,
Inc. on the one hand, and each of DIRECTV, Inc., Clear Channel Communications,
Inc., Telecom Ventures and WorldSpace, respectively, executed as of the date of
this Agreement shall be in full force and effect.
8.3 Conditions Precedent -- AMSC and WorldSpace. The respective
obligations of the parties hereto to consummate the transactions contemplated
hereby shall be subject to satisfaction or waiver of the following conditions at
or prior to the Closing:
(a) Regulatory Approvals. The parties hereto shall have received
all regulatory approvals required in connection with the transactions
contemplated by this Agreement and all notice periods and waiting periods
required after the granting of any such approvals shall have passed.
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(b) No Prohibition. None of the parties hereto shall be subject
to any order, decree or injunction of a court or agency of competent
jurisdiction that enjoins or prohibits consummation of the transactions
contemplated by this Agreement.
(c) XM Holdings Investment. The Investment Agreement and
Distribution Agreement by and among General Motors Corporation, Clear Channel
Communication Inc. and DIRECTV, Inc. executed as of the date hereof shall be in
full force and effect, and the closing of the financings under such agreements
shall have taken place prior to or simultaneously with the Closing hereunder.
ARTICLE 9
MISCELLANEOUS
9.1 Survival. The representations and warranties of the parties
set forth in Articles 4, 5 and 6, and the covenants set forth in this Agreement
shall survive the Closing.
9.2 Obligations to Obtain Stockholder Approval.
(a) AMSC's obligation to deliver to XM Ventures the Second
Transfer shall not be subject to any condition other than the AMSC Stockholder
Approval, which is the sole condition to such obligation. Upon receipt of the
AMSC Stockholder Approval, the obligation of AMSC to deliver to XM Ventures the
Second Transfer on a timely basis shall be absolute and unconditional, and shall
not be subject to any counterclaims, right of setoff, deduction, diminution,
recoupment or defense of any kind. Any failure by AMSC to obtain the AMSC
Stockholder Approval shall have no effect on the survival of the representations
and warranties of AMSC under Article 5 hereof or the covenants of AMSC under
Articles 2 and 7, and Section 9.2(a) hereof, nor shall it render any
representation or warranty void or voidable or otherwise excuse the performance
by AMSC of the covenants set forth in Articles 2 or 7, and Section 9.2(a)
hereof. In the event AMSC breaches any of its representations, warranties or
covenants relating to the AMSC Stockholder Approval, WorldSpace shall have a
cause of action against AMSC for damages caused by such breach, and AMSC shall
indemnify WorldSpace against all reasonable costs and expenses (including legal
fees) incurred by WorldSpace in prosecuting such action.
(b) Any failure by WorldSpace to obtain the WorldSpace
Stockholder Approval shall have no effect on the survival of the representations
and warranties of WorldSpace under Article 4 hereof or the covenants of
WorldSpace under Article 7 hereof, nor shall it render any representation or
warranty void or voidable or otherwise excuse the performance by WorldSpace of
the covenants set forth in Articles 7 hereof. In the event WorldSpace breaches
any of its representations, warranties or covenants relating to the WorldSpace
Stockholder Approval, AMSC shall have a cause of action against WorldSpace for
damages caused by such breach, and WorldSpace shall indemnify AMSC against all
reasonable costs and expenses (including legal fees) incurred by AMSC in
prosecuting such action.
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9.3 Counterparts. This Agreement may be executed in any number of
separate counterparts, each of which, when so executed, shall be deemed an
original, and all of said counterparts taken together shall be deemed to
constitute but one and the same instrument.
9.4 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF DELAWARE.
9.5 Arbitration.
(a) The parties irrevocably consent to the exclusive
jurisdiction of arbitration in Washington, D.C. in accordance with the Expedited
Arbitration Rules of JAMS/Endispute for all purposes in connection with any
action or proceeding that arises out of or relates to this Agreement
(collectively, the "Proceedings"). The parties hereby agree that service of
summons, complaint, or other process in connection with any Proceedings may be
made as set forth in the Exchange Agreement with respect to service of notices,
and that service so made shall be effective as if personally made in the State
of Delaware.
(b) The arbitrators may issue any order for interim relief as
may be necessary to safeguard the property that is the subject of the
Proceedings, including without limitation, ordering the parties to take such
action as the arbitrator deems appropriate. In the event that the parties apply
to an arbitrator for interim relief, and such relief is not awarded, the parties
shall be at liberty to apply for relief to any competent judicial authority for
interim or conservatory measures, and they shall not by doing so be held to
infringe the agreement to arbitrate or to affect the relevant powers reserved to
the arbitrators. The arbitrators also have the power to award final relief of an
injunctive or declaratory nature, including the power to determine unresolved
terms in the closing documentation and to order the parties to perform in
accordance with such terms.
(c) Each of the parties hereto acknowledges that (i) it has
freely agreed that all Proceedings will be heard in accordance with this Section
9.5, (ii) the agreement to choose arbitration in Washington, D.C. in accordance
with the Expedited Arbitration Rules of JAMS/Endispute to hear all Proceedings
is reasonable and will not place such party at a disadvantage or otherwise deny
it its day in court, (iii) it is a knowledgeable, informed, sophisticated person
or business entity capable of understanding and evaluating the provisions set
forth in this Agreement, including this Section 9.5, and (iv) has been
represented by such counsel and other advisors of its choosing as it has deemed
appropriate in connection with its decision to enter into this Agreement,
including this Section 9.5.
9.6 Entire Agreement. This Agreement embodies the entire agreement
and understanding between the parties hereto with respect to the subject matter
hereof, and supersedes all prior or contemporaneous agreements and
understandings of such parties, verbal or written, relating to the subject
matter hereof and thereof and no representations or warranties are made by any
party hereto relating to the subject matter hereof except as set forth in this
Agreement.
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9.7 Interpretation. The headings of the Articles and Sections
herein are inserted for convenience of reference only and are not intended to be
a part of or to affect the meaning or interpretation of this Agreement.
9.8 Assignment. No party hereto shall assign or transfer its
interests hereunder without the prior written consent of the other parties
hereto.
9.9 Confidentiality. The parties hereto agree to maintain the
confidentiality hereof until such time as they may otherwise agree or as
required by law.
[SIGNATURES BEGIN ON THE NEXT PAGE]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their proper and duly authorized directors,
officers or representatives as of the day and year first above written.
AMERICAN MOBILE SATELLITE
CORPORATION
By: /s/Xxxx X. Xxxxxxx
-------------------------------------
Name: Xxxx X. Xxxxxxx
Title: Chairman
WORLDSPACE, INC.
By: /s/Xxxx Xxxxxx
------------------------------------
Name: Xxxx Xxxxxx
Title: Chairman & CEO
XM SATELLITE RADIO HOLDINGS INC.
By: /s/Xxxx Xxxxxx
------------------------------------
Name: Xxxx Xxxxxx
Title: President & CEO
Xxxx X. Xxxxxx agrees to be a signatory to this Agreement solely with respect to
Sections 3.1(b), 3.2(a), 7.2(b), 7.4(b), 7.5, and Article 9 (other than Section
9.2).
XXXX X. XXXXXX
/s/Xxxx X. Xxxxxx
----------------------------------------
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Accepted and Agreed as of
[the Closing Date]:
[XM VENTURES]
By:
Name:
Title:
1
