EXHIBIT 99.1
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AGREEMENT AND PLAN OF RESTRUCTURING AND MERGER
among
UNITEDGLOBALCOM, INC.,
NEW UNITEDGLOBALCOM, INC.,
UNITED/NEW UNITED MERGER SUB, INC.,
LIBERTY MEDIA CORPORATION,
LIBERTY MEDIA INTERNATIONAL, INC.,
LIBERTY GLOBAL, INC.
and
EACH PERSON INDICATED AS A "FOUNDER"
ON THE SIGNATURE PAGES HERETO
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DATED AS OF DECEMBER 3, 2001
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TABLE OF CONTENTS
ARTICLE I DEFINITIONS....................................... 2
1.1 Definitions........................................ 2
1.2 Additional Terms................................... 7
ARTICLE II CONTRIBUTIONS, REORGANIZATION AND RELATED
TRANSACTIONS.............................................. 10
2.1 Pre-Closing Restructuring Transactions............. 10
2.2 Contributions and Restructuring.................... 11
2.3 Repayment of Indebtedness.......................... 13
2.4 Certain Adjustments................................ 14
2.5 United/New United Merger........................... 14
ARTICLE III [RESERVED]...................................... 16
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF LIBERTY MEDIA,
LIBERTY GLOBAL AND LMI........................... 16
4.1 Organization, Good Standing and Authority.......... 16
4.2 Power; Authorization and Validity; Consents; No
Conflicts.............................................. 16
4.3 Brokers' and Finders' Fees......................... 17
4.4 Legal Proceedings.................................. 17
4.5 Ownership of United Class B Stock.................. 17
4.6 [Reserved.]........................................ 17
4.7 Belmarken Notes.................................... 17
4.8 [Reserved.]........................................ 17
4.9 Investment Intent.................................. 17
4.10 Registration Statement; Proxy Statement............ 17
4.11 Liberty UPC Bonds.................................. 17
ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE FOUNDERS.... 18
5.1 Organization, Good Standing and Authority.......... 18
5.2 Power; Authorization and Validity; Consents; No
Conflicts.............................................. 18
5.3 Founder Newcos..................................... 19
5.4 Brokers' and Finders' Fees......................... 19
5.5 Information........................................ 19
5.6 Legal Proceedings.................................. 19
5.7 Ownership of United Class B Stock and New United
Class B Stock.......................................... 20
5.8 Investment Intent.................................. 20
5.9 Registration Statement; Proxy Statement............ 20
ARTICLE VI REPRESENTATIONS AND WARRANTIES OF UNITED AND NEW
UNITED........................................... 20
6.1 Representations and Warranties of United........... 20
6.2 Representations and Warranties of New United....... 30
ARTICLE VII CERTAIN COVENANTS OF THE PARTIES................ 34
7.1 Conduct of Business in Ordinary Course Pending
Closing................................................ 34
7.2 Stockholders Meeting............................... 38
7.3 Proxy Statement; Registration Statement; Other
Commission Filings..................................... 39
7.4 No Solicitation; Acquisition Proposals............. 40
7.5 Consents and Approvals............................. 40
7.6 Tax-Free Exchange.................................. 41
7.7 Stockholders Agreement............................. 41
7.8 Voting Agreement................................... 41
7.9 United/Liberty Agreement........................... 41
7.9A New United Covenant Agreement...................... 42
7.9B No Waiver Agreement................................ 42
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7.10 Standstill Agreement............................... 42
7.11 Registration Rights Agreement...................... 42
7.12 Exchange Agreement; Preferred Exchange Agreement... 42
7.13 Listing Application................................ 42
7.14 Investigation; Confidentiality..................... 42
7.15 [Reserved]......................................... 43
7.16 [Reserved.]........................................ 43
7.17 [Reserved.]........................................ 43
7.18 [Reserved.]........................................ 43
7.19 [Reserved.]........................................ 43
7.20 UPC Bonds.......................................... 43
7.21 Senior Secured Notes............................... 43
7.22 Fairness Opinions.................................. 44
7.23 Interim Stockholder Arrangements................... 44
ARTICLE VIII CONDITIONS PRECEDENT TO THE OBLIGATIONS OF EACH
PARTY TO CLOSE................................. 44
8.1 United Stockholder Approval........................ 44
8.2 HSR Act............................................ 44
8.3 Consents and Approvals............................. 45
8.4 Absence of Injunctions............................. 45
8.5 Fairness Opinions.................................. 45
8.6 Transaction Documents.............................. 45
ARTICLE IX CONDITIONS PRECEDENT TO THE OBLIGATIONS OF NEW
UNITED TO CLOSE.................................. 45
9.1 Representations and Warranties True as of the
Closing Date........................................... 45
9.2 Compliance with this Agreement..................... 45
9.3 Certificates....................................... 46
9.4 Opinion of Counsel to the Liberty Parties.......... 46
ARTICLE X CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE
PARTIES TO THE UNITED/NEW UNITED MERGER........... 46
10.1 United's Obligation................................ 46
10.2 New United's Obligation............................ 46
ARTICLE XI CONDITIONS PRECEDENT TO THE OBLIGATION OF THE
LIBERTY PARTIES TO CLOSE......................... 47
11.1 Representations and Warranties True as of the
Closing Date........................................... 47
11.2 Compliance with this Agreement..................... 47
11.3 Certificates....................................... 47
11.4 Opinion of Counsel to United....................... 47
11.5 [Reserved.]........................................ 47
11.6 Tax Opinion........................................ 47
11.7 [Reserved.]........................................ 48
11.8 [Reserved.]........................................ 48
11.9 Senior Secured Indenture........................... 48
11.10 Fee Letter......................................... 48
11.11 [Reserved.]........................................ 48
11.12 [Reserved.]........................................ 48
11.13 [Reserved.]........................................ 48
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ARTICLE XII CONDITIONS PRECEDENT TO THE OBLIGATION OF THE
FOUNDERS TO CLOSE............................... 48
12.1 Representations and Warranties True as of the
Closing Date........................................... 48
12.2 Compliance with this Agreement..................... 48
12.3 Certificates....................................... 48
12.4 [Reserved.]........................................ 48
12.5 Tax Opinion........................................ 48
ARTICLE XIII TAX MATTERS.................................... 49
13.1 [Reserved.]........................................ 49
13.2 [Reserved.]........................................ 49
13.3 [Reserved.]........................................ 49
13.4 Transfer Taxes..................................... 49
13.5 [Reserved.]........................................ 49
13.6 [Reserved.]........................................ 49
13.7 [Reserved.]........................................ 49
13.8 [Reserved.]........................................ 49
13.9 Restructuring Transaction Indemnity................ 49
13.10 Treatment of Indemnity Payments.................... 49
13.11 Survival........................................... 49
ARTICLE XIV CLOSING; CLOSING DATE........................... 50
14.1 Closing............................................ 50
14.2 Closing Deliveries................................. 50
ARTICLE XV SURVIVAL OF REPRESENTATIONS, WARRANTIES AND
COVENANTS; INDEMNIFICATION....................... 52
15.1 Survival of Representations, Warranties and
Covenants.............................................. 52
15.2 Indemnification by Liberty Party................... 52
15.3 Indemnification by Founders........................ 53
15.4 Indemnification by New United and United........... 53
15.5 Defense of Action.................................. 54
15.6 Limitations on Indemnification for Breach of
Representations and Warranties......................... 55
15.7 Insurance Proceeds................................. 55
15.8 Exclusive Monetary Remedy; No Consequential
Damages................................................ 55
ARTICLE XVI TERMINATION OF AGREEMENT........................ 56
16.1 Termination........................................ 56
16.2 Limitation of Liabilities in the Event of
Termination............................................ 56
16.3 Stockholder Arrangements........................... 56
ARTICLE XVII MISCELLANEOUS.................................. 57
17.1 Expenses........................................... 57
17.2 Entire Agreement; Release.......................... 57
17.3 Governing Law; Waiver of Jury Trial, Etc........... 57
17.4 Headings........................................... 57
17.5 Notices............................................ 57
17.6 Separability....................................... 58
17.7 Amendment; Waiver.................................. 59
17.8 Publicity.......................................... 59
17.9 Assignment and Binding Effect...................... 59
17.10 No Benefit to Others............................... 59
17.11 Counterparts....................................... 59
17.12 Interpretation..................................... 59
17.13 Rules of Construction.............................. 60
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AGREEMENT AND PLAN OF RESTRUCTURING AND MERGER
This
AGREEMENT AND PLAN OF RESTRUCTURING AND MERGER (this "Agreement") is
entered into as of December 3, 2001 among UnitedGlobalCom, Inc., a
Delaware
corporation ("United"), New UnitedGlobalCom, Inc., a
Delaware corporation ("New
United"), United/New United Merger Sub, Inc., a
Delaware corporation and a
wholly owned subsidiary of New United ("United/New United Merger Sub"), Liberty
Media Corporation, a
Delaware corporation ("Liberty Media"), Liberty Media
International, Inc., a
Delaware corporation ("LMI"), Liberty Global, Inc., a
Delaware corporation ("Liberty Global") and each Person indicated as a "Founder"
on the signature pages hereto (each such Person, a "Founder"). Capitalized terms
used and not otherwise defined in this Agreement have the respective meanings
ascribed thereto in Section 1.1.
WITNESSETH:
WHEREAS, United, Liberty Media and LMI have entered into an Amended and Restated
Agreement, dated as of May 25, 2001 (the "Letter Agreement"), setting forth the
terms and conditions upon which, among other things, the following transactions
will occur as part of the same plan of restructuring: (a) Liberty Media will
contribute or cause to be contributed to New United all of the shares of Class B
Common Stock, par value US $0.01 per share, of United ("United Class B Stock")
owned by Liberty Media and its wholly owned Subsidiaries in exchange for an
equal number of shares of Class C Common Stock, par value US $0.01 per share, of
New United ("New United Class C Stock"), (b) the Founders will contribute all of
the shares of United Class B Stock owned by them to their respective Founder
Newco (as defined herein) and cause each Founder Newco to merge into New United
in exchange for a number of shares of Class B Common Stock, par value US $0.01
per share, of New United ("New United Class B Stock") equal to the number of
shares of United's common stock then owned by such Founder Newco, (c) United/New
United Merger Sub will merge with and into United, with United being the
surviving entity in such merger and the outstanding stock of United being
converted into stock of New United or stock of the surviving entity in such
merger or cancelled, as more fully described herein, and (d) Liberty Media will
contribute all of the stock of its subsidiary, Liberty-Belmarken, Inc., a
Delaware corporation ("Liberty Sub"), and cash to New United in exchange for
shares of New United Class C Stock; and
WHEREAS, the parties have decided to revise the transactions contemplated by the
Letter Agreement in order to eliminate the contribution of certain assets to New
United and to enter into the transactions contemplated by this Agreement in lieu
thereof; and
WHEREAS, concurrent with the execution and delivery of this Agreement, the
Senior Notes Agreements are being entered into and, in accordance therewith, (a)
Liberty is acquiring from United 11,976,048 shares of United Class A Stock for
US $20,000,000 in cash (the "Note Shares") and an additional 14,970 shares of
United Class A Stock for US $25,000 in cash, (b) United is acquiring all of the
Senior Notes in exchange for US $20,000,000 in cash, (c) United is paying an
aggregate of US $241,309,065.79 (the "Make Whole Payment") to the holders of the
Senior Notes (collectively, the "Make Whole Bankers") in satisfaction in full of
its obligations under the Fee Letter, and (d) to facilitate the foregoing,
Liberty and Liberty Argentina, Inc., a
Delaware corporation and a wholly owned
Subsidiary of Liberty ("Liberty Argentina"), are paying a total of
US $241,309,065.79 to UIPI and United as prepayment in full of the indebtedness
evidenced by the $200,000,000 Note and as a partial prepayment of the
indebtedness evidenced by the $310,000,000 Notes;
NOW, THEREFORE, in consideration of the mutual promises, covenants and
agreements set forth herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto do
hereby agree as follows:
ARTICLE I
DEFINITIONS
1.1 Definitions. For purposes of this Agreement, the following terms shall
have the following meanings:
"$200,000,000 Note" means the promissory note, dated December 8, 2000, in
the principal amount of US $200 million payable by Liberty Media to United,
which promissory note is now held by UIPI.
"$310,000,000 Notes" means the promissory note, dated December 27, 2000, in
the principal amount of US $42,405,760 payable by Liberty Argentina to
United, which promissory note is now held by UIPI, the promissory note,
dated February 5, 2001, in the principal amount of US $33,827,447 payable
by Liberty Argentina to United, which promissory note is now held by UIPI,
and the promissory note, dated April 30, 2001, in the principal amount of
US $233,766,793 payable by Liberty Argentina to UIPI.
"Adjustment" means the deemed increase in a Tax, determined using the
assumptions set forth in the next sentence, resulting from an adjustment
made with respect to any amount reflected or required to be reflected on
any Tax Return relating to such Tax. For purposes of determining such
deemed increase in Tax, the following assumptions will be used: (a) in the
case of any Income Tax, the highest marginal Tax rate or, in the case of
any other Tax, the highest applicable Tax rate, in each case in effect with
respect to that Tax for the Taxable period or any portion of the Taxable
period to which the adjustment relates; and (b) such determination shall be
made without regard to whether any actual increase in such Tax will in fact
be realized with respect to the Tax Return to which such adjustment relates
(as a result, for example, of losses, credits or other offsets against
Tax).
"Affiliate" of a Person shall mean any Person that directly, or indirectly
through one or more intermediaries, Controls, is Controlled by, or is under
common Control with, the Person in question. Notwithstanding anything in
the foregoing to the contrary, under no circumstances will New United,
United or any of their respective Subsidiaries be considered an Affiliate
of Liberty or LMI.
"After-Tax Basis" shall mean an amount that, after subtraction of the
aggregate additional Taxes incurred or to be incurred by the party
receiving the indemnification payment, is equal to the amount of the
correlative Adjustment. For purposes of determining such additional Taxes
incurred or to be incurred, the following assumptions will be used: (a) in
the case of any Income Tax, the highest marginal Tax rate or, in the case
of any other Tax, the highest applicable Tax rate, in each case in effect
with respect to that Tax for the Taxable period or any portion of the
Taxable period to which the indemnification payment relates; and (b) such
determination shall be made without regard to whether any actual additional
Taxes will in fact be realized with respect to the Tax Return to which such
payment relates (as a result, for example, of losses, credits or other
offsets against Tax).
"August 1999 Agreement" means the letter agreement, dated August 30, 1999,
among UPC, United and Liberty Media, including the exhibits thereto.
"Available New United Commission Filings" means the Registration Statement.
"Average Market Price" means, with respect to any publicly traded security
as of any relevant date of determination, the average of the Closing Prices
per share or other unit of such security for the period of ten Trading Days
ending on and including the third Trading Day prior to such relevant date
of determination.
"Belmarken Loan Agreements" means, collectively, the Loan Agreement, dated
as of May 25, 2001, among Belmarken Holding B.V., UPC, UPC Internet Holding
B.V. and Liberty Sub, and all agreements, including pledge and security
agreements, entered into or to be entered into in connection therewith.
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"Belmarken Notes" means the 6% Guaranteed Discount Notes due 2007 issued
pursuant to the Belmarken Loan Agreements.
"Business Day" means any day other than Saturday, Sunday and a day on which
banks are required or permitted to close in Denver, Colorado or New York,
New York.
"Closing Date" means the date on which the Closing occurs.
"Closing Price" of a share or other unit of any security on any Trading Day
is (i) the last reported sale price for a share or other unit of such
security on such Trading Day as reported on the principal United States or
foreign securities exchange on which such security is listed or admitted
for trading or (ii) if such security is not listed or admitted for trading
on any such securities exchange, the last reported sale price for a share
or other unit of such security on such Trading Day as reported on The
Nasdaq Stock Market or (iii) if such security is not listed or admitted to
trading on any United States or foreign securities exchange or The Nasdaq
Stock Market, the average of the highest bid and lowest asked prices for a
share or other unit of such security on such Trading Day in the
over-the-counter market as reported by The National Quotation Bureau
Incorporated, or any similar organization.
"Code" means the Internal Revenue Code of 1986.
"Commission" means the United States Securities and Exchange Commission.
"Control" shall mean the ability to direct or cause the direction (whether
through the ownership of voting securities, by contract or otherwise) of
the management and policies of a Person or to control (whether
affirmatively or negatively and whether through the ownership of voting
securities, by contract or otherwise) the decision of such Person to engage
in the particular conduct at issue.
A "Controlled Affiliate" of a Person means any other Person that the first
Person directly, or indirectly through one or more intermediaries,
Controls.
"Controlling Principals" means Founders who are "Principals," as that term
is defined in the Indenture dated as of February 5, 1998 between United and
Firstar Bank, N.A., as trustee, and who hold a majority of the aggregate
voting power of all shares of United Common Stock and any other securities
issued by United that are entitled to vote generally for the election of
directors held by the Principals.
"December 7 Letter Agreement" means the Letter Agreement, dated as of
December 7, 2000, between United and Liberty Media (including the summary
of terms attached thereto).
"DOJ" means the United States Department of Justice.
"Environmental and Health Laws" means any U.S. federal, state or local law,
statute, rule or regulation or domestic common law relating to the
environment or occupational health and safety, including any statute,
regulation or order pertaining to (i) treatment, storage, disposal,
generation and transportation of pollutants, contaminants, chemicals,
industrial, toxic or hazardous substances, oil or petroleum products or
solid or hazardous waste (collectively, "Hazardous Substances"); (ii) air,
water and noise pollution; (iii) groundwater and surface water
contamination; (iv) the release into the environment of Hazardous
Substances, including without limitation emissions, discharges, injections,
spills, escapes or dumping of pollutants, contaminants or chemicals; (v)
the protection of wild life, marine sanctuaries and wetlands, including
without limitation all endangered and threatened species; (vi) storage
tanks, vessels and containers containing Hazardous Substances; (vii)
underground storage tanks, abandoned, disposed or discarded barrels and
other closed receptacles containing Hazardous Substances; (viii) health and
safety of employees; and (ix) manufacture, processing, use, distribution,
treatment, storage, disposal, transportation or handling of Hazardous
Substances. As used herein, the terms "release" and "environment" have the
meanings set forth in the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980.
"Exchange Act" means the Securities Exchange Act of 1934.
3
"Fee Letter" means the Fee Letter, dated April 29, 1999, among United, UIH
Funding Corp., Xxxxxxx Xxxxx Xxxxxx, Inc., TD Securities (USA), Inc., Chase
Securities, Inc. and Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation,
as amended on May 13, 1999 and May 23, 2001.
"Filing" means any registration, declaration, application or filing.
"Founders Agreements" means each of (a) the Founders Agreement to be
entered into prior to the Closing among certain Founders relating to
United, in the form attached to Section 5.1 of the Founders Disclosure
Schedule, and (b) the Founders Agreement to be entered into prior to the
Closing among the Founders relating to New United, in the form attached to
Section 5.1 of the Founders Disclosure Schedule.
"Founders Disclosure Schedule" means the disclosure schedule delivered
herewith by the Founders.
"FTC" means the United States Federal Trade Commission.
"GAAP" means generally accepted U.S. accounting principles as in effect as
of the relevant time.
"Governmental Authority" means any U.S. federal, state or local or any
foreign court, governmental department, commission, authority, board,
bureau, agency or other instrumentality.
"High Vote Securities" means United Class B Stock, United Equity Securities
that are convertible into or exercisable or exchangeable for shares of
United Class B Stock (contingently or otherwise) or that have a greater
vote per share (on an as-converted basis or otherwise) than the United
Class A Stock (whether generally, in the election of directors or generally
other than in the election of directors), or any Rights to acquire any of
the foregoing.
"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976,
and the rules and regulations promulgated thereunder.
"Income Tax" means any federal, state, local or foreign income tax,
including any interest, penalty, or addition thereto.
"Intellectual Property" means, collectively, patents, trademarks, trade
names, service marks, copyrights, applications for any of the foregoing and
trade secrets.
"Judgment" means any order, writ, injunction, award, judgment, ruling or
decree of any Governmental Authority.
"Law" means any U.S. federal, state or local or any foreign statute, code,
ordinance, decree, rule, regulation or general principle of common or civil
law or equity.
"Legal Proceedings" means, collectively, any private or governmental
actions, suits, complaints, arbitrations, legal or administrative
proceedings or investigations.
"Liberty" means Liberty Media and any successor (by merger, consolidation,
transfer of assets or otherwise) to all, or substantially all, of Liberty
Media's assets.
"Liberty 2009 Notes" means the notes of Liberty Media that may be issued by
Liberty Media to UIPI pursuant to Section 2.3.
"Liberty Disclosure Schedule" means the disclosure schedule delivered
herewith by Liberty Media.
"Liberty Parties" means Liberty, LMI and Liberty Global, individually and
collectively.
"Liberty UPC Bond Cost" means the sum of the amounts paid by Liberty and
its Affiliates to acquire the Liberty UPC Bonds, plus interest on each such
amount from and including the date such amount was paid by Liberty or the
applicable Affiliate of Liberty to and including the Closing Date at the
rate of 8% per annum, compounded quarterly, less the amount of any interest
payments actually received by Liberty and its Affiliates with respect to
any period prior to the Closing with respect to the Liberty UPC Bonds.
Schedule 1.1 sets forth the Liberty UPC Bond Cost as of November 30, 2001.
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"Liberty UPC Bonds" means all of the senior notes and senior discount notes
issued by UPC and held by Liberty and its Controlled Affiliates as of the
date of this Agreement, as set forth on Schedule 1.1.
"Licenses" means any licenses, franchises, authorizations, permits,
certificates, variances, exemptions, concessions, consents, leases, rights
of way, easements, instruments, orders and approvals, domestic or foreign,
of any Governmental Authority.
"Lien" shall mean any mortgage, pledge, lien, encumbrance, charge, or
security interest, but excluding any of the foregoing created or imposed by
or pursuant to the August 1999 Agreement, this Agreement or the other
Transaction Documents.
"NASD" shall mean the National Association of Securities Dealers, Inc.
"Partner's Purchase Right" means any right of first offer, right of first
refusal, right of last refusal, buy-sell, put-call, purchase or exchange
option or similar right in favor of a third party (a) granted under an
agreement that was in effect on June 25, 2000 and that is in effect on the
date hereof or (b) referred to in this Agreement (including a Schedule
hereto) or a disclosure schedule delivered pursuant hereto.
"Permitted Encumbrances", with respect to any Person, means the following
Liens: (i) Liens for Taxes, assessments or other governmental charges or
levies not at the time delinquent or thereafter payable without penalty or
being contested in good faith by appropriate proceedings and for which
adequate reserves shall have been set aside on the books of the applicable
Person in accordance with GAAP; (ii) Liens of carriers, warehousemen,
mechanics, materialmen and landlords incurred in the ordinary course of
business for sums not overdue or being contested in good faith by
appropriate proceedings and for which adequate reserves in accordance with
GAAP shall have been set aside on the books of the applicable Person; (iii)
Liens incurred in the ordinary course of business in connection with
workmen's compensation, unemployment insurance or other forms of
governmental insurance or benefits, or to secure performance of tenders,
statutory obligations, leases and contracts (other than for borrowed money)
entered into in the ordinary course of business or to secure obligations on
surety or appeal bonds; (iv) purchase money security interests or Liens on
property acquired or held by the applicable Person in the ordinary course
of business to secure the purchase price of such property or to secure
indebtedness incurred solely for the purpose of financing the acquisition
of such property; and (v) easements, restrictions and other minor defects
of title which are not, in the aggregate, material or which do not,
individually or in the aggregate, materially and adversely affect the value
of the property affected thereby.
"Person" means any individual, corporation, limited liability company,
partnership, joint venture, Governmental Authority, business association or
other entity.
"Priority Telecom" means Priority Telecom N.V., a private company
incorporated with limited liability under the laws of The Netherlands.
"Priority Telecom Shareholders Agreement" means the Shareholders Agreement
executed by UPC and Priority Telecom on August 11, 2000 and by each
shareholder of Priority Telecom thereafter as received, as amended or
modified thereafter and any other agreement or arrangement among the
shareholders of Priority Telecom with respect to the subject matter
thereof.
"Restrictions" means with respect to any capital stock, partnership
interest, membership interest in a limited liability company or other
equity interest or security, any voting or other trust or agreement,
option, warrant, preemptive right, right of first offer, right of first
refusal, escrow arrangement, proxy, buy-sell agreement, power of attorney
or other Contract (but excluding the August 1999 Agreement, the Belmarken
Loan Agreements, this Agreement and the other Transaction Documents), any
Law, License or Judgment that, conditionally or unconditionally, (a) grants
to any Person the right to purchase or otherwise acquire, or obligates any
Person to sell or otherwise dispose of or issue, or otherwise results or,
whether upon the occurrence of any event or with notice or lapse of time or
both or otherwise, may result in any Person acquiring, (i) any of such
capital stock or other equity interest or security; (ii) any of the
proceeds of, or any distributions paid or that are or may become payable
with respect to, any of such capital stock or other equity interest or
security; or (iii) any interest in such capital stock or other equity
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interest or security or any such proceeds or distributions; (b) restricts
or, whether upon the occurrence of any event or with notice or lapse of
time or both or otherwise, is reasonably likely to restrict the transfer or
voting of, or the exercise of any rights or the enjoyment of any benefits
arising by reason of ownership of, any such capital stock or other equity
interest or security or any such proceeds or distributions; or (c) creates
or, whether upon the occurrence of any event or with notice or lapse of
time or both or otherwise, is reasonably likely to create a Lien or
purported Lien affecting such capital stock or other equity interest or
security, proceeds or distributions.
"Rights" means securities of United (which may include United Equity
Securities) that (contingently or otherwise) are exercisable, convertible
or exchangeable for or into United Equity Securities (with or without
consideration) or that carry any right to subscribe for or acquire United
Equity Securities or securities exercisable, convertible or exchangeable
for or into United Equity Securities.
"Securities Act" means the Securities Act of 1933.
"Senior Notes" means the debt securities issued pursuant to the Indenture,
dated as of April 29, 1999, between United and Firstar Bank, N.A.
"Senior Secured Indenture" means the Indenture, dated as of February 5,
1998, between United and Firstar Bank, N.A. (f/k/a Firstar Bank of
Minnesota, N.A.).
"Senior Secured Notes" means the debt securities issued pursuant to the
Senior Secured Indenture.
"Specified Indentures" means (a) the Senior Secured Indenture and (b) the
Indenture, dated as of April 29, 1999, between United and Firstar Bank,
N.A.
"Subsidiary" means, with respect to any Person (a) a corporation a majority
in voting power of whose capital stock with voting power, under ordinary
circumstances, to elect directors is at the time, directly or indirectly,
owned by such Person, by a Subsidiary of such Person, or by such Person and
one or more Subsidiaries of such Person, without regard to whether the
voting of such stock is subject to a voting agreement or similar
Restriction, (b) a partnership or limited liability company in which such
Person or a Subsidiary of such Person is, at the date of determination, (i)
in the case of a partnership, a general partner of such partnership with
the power affirmatively to direct the policies and management of such
partnership or (ii) in the case of a limited liability company, the
managing member or, in the absence of a managing member, a member with the
power affirmatively to direct the policies and management of such limited
liability company, or (c) any other Person (other than a corporation) in
which such Person, a Subsidiary of such Person or such Person and one or
more Subsidiaries of such Person, directly or indirectly, at the date of
determination thereof, has (i) the power to elect or direct the election of
a majority of the members of the governing body of such Person (whether or
not such power is subject to a voting agreement or similar Restriction) or
(ii) in the absence of such a governing body, at least a majority ownership
interest. When used with respect to any Liberty Party, the term
"Subsidiary" shall not in any event include New United or any of its
Subsidiaries. For purposes of this definition, shares of capital stock of
United Austar, Inc. owned by United A/P will not be deemed to be directly
or indirectly owned by United or any of its Subsidiaries if, at the time
such determination is to be made, United A/P is not a Subsidiary of United.
"Tax" shall mean any income, corporation, gross receipts, profits, gains,
capital stock, capital duty, franchise, business, license, payroll,
withholding, social security, unemployment, disability, property, wealth,
welfare, stamp, environmental, transfer, excise, occupation, sales, use,
value added, alternative minimum, estimated or other similar tax (including
any fee, assessment or other charge in the nature of any tax) imposed by
any governmental authority (whether national, federal, state, local,
municipal, foreign or otherwise) or political subdivision thereof, and any
interest, penalties, additions to tax or additional amounts in respect of
the foregoing.
"Tax Returns" shall mean all reports, declarations of estimated tax,
information statements and returns relating to, or required to be filed in
connection with, any Taxes, including information returns or reports with
respect to backup withholding and other payments to third parties.
6
"Trading Day", with respect to any security, means a day on which the
principal United States or foreign securities exchange on which such
security is listed or admitted to trading, or The Nasdaq Stock Market if
such security is not listed or admitted to trading on any such securities
exchange, as applicable, is open for the transaction of business (unless
such trading shall have been suspended for the entire day) or, if the
applicable security is not listed or admitted to trading on any United
States or foreign securities exchange or The Nasdaq Stock Market, any
Business Day.
"Transaction Documents" means this Agreement, the Stockholders Agreement,
the Standstill Agreement, the Registration Rights Agreement, the Liberty
2009 Notes Registration Rights Agreement (if such agreement is entered into
as contemplated by Section 2.3), the Founder Newco Merger Agreements, the
United/New United Merger Agreement, the Voting Agreement, the No Waiver
Agreement, the New United Covenant Agreement, the Founders Agreements, the
Exchange Agreement, the Preferred Exchange Agreement, the United/Liberty
Agreement, the New United Charter, the New United By-laws, the Surviving
Entity Charter, the Surviving Entity By-laws, the Subscription Agreements,
all documents, instruments and agreements executed in connection with the
satisfaction of the Fee Letter Condition (including the Senior Notes
Agreements) and any and all other documents, instruments and agreements to
be executed and delivered in connection with the transactions contemplated
hereby (including in connection with the satisfaction of each party's
conditions hereunder) or thereby.
"UIPI" means United International Properties, Inc., a Colorado corporation
and wholly owned Subsidiary of United.
"United Disclosure Schedule" means the disclosure schedule delivered
herewith by United.
"United Equity Securities" means the United Common Stock and any other
voting securities issued by United, other than shares of United Preferred
Stock with customary limited voting rights.
"United Public Company" means any entity that (a) has equity securities
issued by it publicly traded on any internationally recognized United
States or foreign securities exchange, and (b) is a Subsidiary of United.
"UPC" means United Pan-Europe Communications, N.V., a company organized
under the laws of The Netherlands and a Subsidiary of United.
1.2 Additional Terms. As used in this Agreement, the following terms shall
have the meanings set forth in the referenced sections of this Agreement:
TERM SECTION
---- -------
Acceptance Notice........................................... 2.3(b)
Action...................................................... 15.5(a)
Additional Liberty Shares................................... 2.2(d)
Agreement................................................... Preamble
Basket Amount............................................... 15.6
Basket Exceptions........................................... 15.6
Belmarken Notes Value....................................... 2.2(d)
Cash Contribution........................................... 2.2(d)
Claims...................................................... 15.2
Class B Options............................................. 6.1(b)
Closing..................................................... 14.1
Contracts................................................... 6.1(c)(ii)
Contributing Party.......................................... 2.2(f)
DGCL........................................................ 2.5(a)
Effective Time.............................................. 2.5(b)
Equity Affiliate............................................ 6.1(f)(i)
Exchange Agreement.......................................... 7.12
Exchange Ratio.............................................. 2.5(b)
7
TERM SECTION
---- -------
Exchange Ratio Fairness Opinion............................. 7.22
Existing Liberty Notes...................................... 2.3
Existing New United Common Stock............................ 6.2(b)
Fairness Opinions........................................... 7.22
Fee Letter Condition........................................ 11.10
Founder..................................................... Preamble
Founder Consideration Shares................................ 2.2(b)
Founder Indemnified Parties................................. 15.3
Founder Material Adverse Effect............................. 5.1
Founder Newco Merger........................................ 2.2(b)
Founder Newco Merger Agreement.............................. 2.2(b)
Founder Newco............................................... 2.1(a)
Founder Shares.............................................. 2.1(a)
Indemnified Party........................................... 15.5(a)
Indemnifying Party.......................................... 15.5(a)
Indenture Fairness Opinion.................................. 7.22
Injunction.................................................. 7.5(a)
Letter Agreement............................................ Recitals
Liberty 2009 Notes Registration Rights Agreement............ 2.3
Liberty Argentina........................................... Recitals
Liberty Consideration Shares................................ 2.2(a)
Liberty Contribution Shares................................. 2.2(d)
Liberty Contribution Value.................................. 2.2(d)
Liberty Global.............................................. Preamble
Liberty Global Consideration Shares......................... 2.2(a)
Liberty Global Shares....................................... 2.2(a)
Liberty Guaranty............................................ 2.3
Liberty Material Adverse Effect............................. 4.1
Liberty Media............................................... Preamble
Liberty Media Indemnified Parties........................... 15.2
Liberty Notice.............................................. 2.3(b)
Liberty Sub................................................. Recitals
LMI......................................................... Preamble
Losses...................................................... 15.2
Make Whole Bankers.......................................... Recitals
Make Whole Payment.......................................... Recitals
Material Adverse Change..................................... 17.12
Material Adverse Effect..................................... 17.12
Material United Subsidiaries................................ 6.1(j)
Xxxxxx Xxxxxxx.............................................. 6.1(q)
New United.................................................. Preamble
New United By-laws.......................................... 2.1(b)
New United Charter.......................................... 2.1(b)
New United Class A Stock.................................... 2.5(b)
New United Class B Stock.................................... Recitals
New United Class C Stock.................................... Recitals
New United Commission Filing................................ 6.2(g)(i)
New United Covenant Agreement............................... 7.9A
New United Indemnified Parties.............................. 15.4
New United Material Adverse Effect.......................... 6.2(a)
New United Preferred Stock.................................. 6.2(b)(i)
8
TERM SECTION
---- -------
Note Repayment Amount....................................... 2.3
Note Shares................................................. Recitals
No Waiver Agreement......................................... 2.2(e)
Notes Holder................................................ 2.3(b)
Offered Notes............................................... 2.3(b)
Offer Notice................................................ 2.3(b)
Preferred Exchange Agreement................................ 7.12
Proxy Statement............................................. 7.3(a)
Purchased Notes............................................. 2.3(b)
Refinanced Indebtedness..................................... 7.1(b)
Refinancing Indebtedness.................................... 7.1(b)
Registration Rights Agreement............................... 7.11
Registration Statement...................................... 7.3(a)
Required Founder Consents................................... 5.2
Required Liberty Consents................................... 4.2
Required United Consents.................................... 6.1(c)(ii)
Restructuring Proceeds...................................... 2.2(d)
Restructuring Transaction................................... 13.9
Xxxxxxxxx................................................... 2.1(b)
Senior Notes Agreements..................................... 11.10
September 18 Letter Agreement............................... 17.2
Series E Certificate of Designation......................... 6.1(b)
Series E Holder............................................. 7.12
Standstill Agreement........................................ 7.10
Stockholders Agreement...................................... 7.7
Stock Purchase Fairness Opinion............................. 6.1(q)
Subscription Agreement...................................... 2.1(c)
Surviving Entity............................................ 2.5(a)
Surviving Entity By-laws.................................... 2.5(e)
Surviving Entity Charter.................................... 2.5(e)
Surviving Entity Class A Stock.............................. 2.5(b)
Surviving Entity Class B Stock.............................. 2.5(d)
Surviving Entity Class C Stock.............................. 2.5(d)
Surviving Entity Class D Stock.............................. 6.1(b)
Surviving Entity Series F Preferred Stock................... 2.5(b)
Surviving Entity Series G Preferred Stock................... 2.5(b)
Surviving Entity Series H Preferred Stock................... 2.5(b)
Total Liberty Shares........................................ 2.2(d)
Transfer Date............................................... 2.3(b)
United...................................................... Preamble
United 2001 Commission Filings.............................. 6.1(g)(i)
United A/P.................................................. 6.1(f)
United Class A Stock........................................ 2.1(a)
United Class B Stock........................................ Recitals
United Commission Filings................................... 6.1(g)(i)
United Common Stock......................................... 2.1(a)
United Form 10-K............................................ 6.1(g)(i)
United Indemnified Parties.................................. 15.4
United Investment........................................... 6.1(f)(i)
United Investment Agreements................................ 6.1(f)(i)
United June 10-Q............................................ 6.1(g)(i)
9
TERM SECTION
---- -------
United/Liberty Agreement.................................... 7.9
United Material Adverse Effect.............................. 6.1(a)
United/New United Merger.................................... 2.5(a)
United/New United Merger Agreement.......................... 2.5(a)
United/New United Merger Consideration...................... 2.5(b)
United/New United Merger Sub................................ Preamble
United/New United Merger Sub By-laws........................ 6.2(a)
United/New United Merger Sub Charter........................ 6.2(a)
United/New United Merger Sub Class B Stock.................. 2.5(d)
United/New United Merger Sub Class C Stock.................. 2.5(d)
United Preferred Stock...................................... 6.1(b)
United Series B Preferred Stock............................. 6.1(b)
United Series C Preferred Stock............................. 6.1(b)
United Series D Preferred Stock............................. 6.1(b)
United Series E Preferred Stock............................. 6.1(b)
United Stockholders Meeting................................. 7.2
United Stock Option Plans................................... 6.1(b)
UPC Form 10-K............................................... 6.1(g)(i)
UPC June 10-Q............................................... 6.1(g)(i)
Voting Agreement............................................ 7.8
ARTICLE II
CONTRIBUTIONS, REORGANIZATION AND RELATED TRANSACTIONS
2.1 Pre-Closing Restructuring Transactions. Prior to and as a condition
precedent of the Closing, the parties shall effect or cause to be effected the
following transactions:
(a) Each of the Founders will contribute, convey, transfer, assign and
deliver, free and clear of all Liens and Restrictions, except as set forth
in Section 5.7 of the Founders Disclosure Schedule, all and not less than
all of the shares of United Class B Stock held by such Founder as indicated
next to such Founder's name on Schedule 2.1(a) (collectively, the "Founder
Shares"), in each case together with the right to receive all unpaid
dividends and distributions declared or otherwise payable with respect to
such Founder Shares and associated stock purchase rights, if any, to
newly-formed single-member limited liability companies organized under the
laws of the State of
Delaware (each a "Founder Newco"). At all times from
the organization of each Founder Newco until the Closing (i) no Person
other than the Founder contributing shares of United Class B Stock to such
Founder Newco shall own any equity interest whatsoever in such Founder
Newco, (ii) the limited liability company membership interests in such
Founder Newco shall be owned by the applicable Founder free and clear of
any Liens and Restrictions, and such Founder Newco shall have no assets,
other than Founder Shares and shares of the Class A Common Stock, par value
US $0.01 per share, of United ("United Class A Stock" and, together with
the United Class B Stock, "United Common Stock") issued to such Founder
Newco upon conversion of Founder Shares pursuant to the following sentence,
and no liabilities or obligations, known or unknown, whether absolute,
accrued, fixed, contingent or otherwise, other than its obligations under
the applicable Founder Newco Merger Agreement. Each Founder will cause its
applicable Founder Newco to convert an adequate number of the Founder
Shares held by it into an equal number of shares of United Class A Stock in
order to ensure that, after giving effect to the Founder Newco Mergers and
the contribution contemplated by Section 2.2(a), New United will not own
50% or more of the voting power of United prior to the consummation of the
United/New United Merger.
10
(b) Xxxx X. Xxxxxxxxx ("Xxxxxxxxx"), as the sole stockholder of New
United, will cause the Certificate of Incorporation ("New United Charter")
and By-laws ("New United By-laws") of New United to be restated as set
forth in Exhibits 2.1(b)-1 and 2.1(b)-2, respectively.
(c) Immediately prior to the Closing, one or more Controlling Principals
will purchase from United an aggregate of 1,500 shares of United Series E
Preferred Stock for the purchase price set forth in, and otherwise pursuant
to the terms of, one or more Subscription Agreements between each such
Controlling Principal and United, in the form attached hereto as Exhibit
2.1(c) (each a "Subscription Agreement").
2.2 Contributions and Restructuring. At the Closing, upon the terms and
subject to the conditions set forth in this Agreement and in the order set forth
below (and otherwise substantially concurrently):
(a)(i) Xxxxxxxxx will contribute, convey, transfer, assign and deliver to
New United, free and clear of all Liens and Restrictions, one share of
United Class A Stock, together with the right to receive all unpaid
dividends and distributions declared or otherwise payable with respect to
such share of United Class A Stock and associated stock purchase rights, if
any, as a contribution to the capital of New United, and New United shall
accept such share of United Class A Stock as a contribution to its capital
and Xxxxxxxxx shall not receive any other consideration in exchange for
such contribution, (ii) Liberty Global will contribute, convey, transfer,
assign and deliver, or cause to be contributed, conveyed, transferred,
assigned and delivered, to New United, free and clear of all Liens and
Restrictions, all, but not less than all, of the shares of United Class B
Stock held by Liberty Global as indicated next to Liberty Global's name on
Schedule 2.2 hereto (the "Liberty Global Shares"), together with the right
to receive all unpaid dividends and distributions declared or otherwise
payable with respect to such Liberty Global Shares and associated stock
purchase rights, if any, and New United shall accept all, but not less than
all, the Liberty Global Shares and issue and deliver to Liberty Global, or
to the applicable Contributing Party or Contributing Parties, in exchange
therefor a number of shares of New United Class C Stock equal to the number
of Liberty Global Shares so contributed (the "Liberty Global Consideration
Shares"), (iii) Liberty will contribute, convey, transfer, assign and
deliver, or cause to be contributed, conveyed, transferred, assigned and
delivered, to New United, free and clear of all Liens and Restrictions,
all, but not less than all, of the Note Shares, together with the right to
receive all unpaid dividends and distributions declared or otherwise
payable with respect to such Note Shares and associated stock purchase
rights, if any, and New United shall accept all, but not less than all, the
Note Shares and issue and deliver to Liberty, or to the applicable
Contributing Party or Contributing Parties, in exchange therefor a number
of shares of New United Class C Stock equal to the number of Note Shares so
contributed (the "Liberty Consideration Shares") and (iv) New United will
convert the Liberty Global Shares into an equal number of shares of United
Class A Stock. Immediately prior to the contributions described in clauses
(ii) and (iii) of the previous sentence, there shall be no outstanding
shares of capital stock or other securities or ownership interests of New
United other than one share of New United Class A Stock held, beneficially
and of record, by Xxxxxxxxx.
(b) The Founders and New United will cause each of the Founder Newcos to
merge with and into New United (each, a "Founder Newco Merger") with the
limited liability company membership interests of each Founder Newco being
converted into an aggregate number of shares of New United Class B Stock
equal to the number of shares of United Common Stock held by such Founder
Newco at the time of such mergers (the "Founder Consideration Shares").
Each of these mergers will be consummated pursuant to an Agreement and Plan
of Merger substantially in the form attached hereto as Exhibit 2.2(b)
(each, a "Founder Newco Merger Agreement"). Prior to or simultaneous with
the Founder Newco Mergers, any Liens and Restrictions on shares of United
Common Stock held by each Founder Newco, including as set forth in Section
5.7 of the Founder Disclosure Schedule, shall be fully and unconditionally
released (without any liability whatsoever to New United or any of its
Subsidiaries or Affiliates) in accordance with instruments and documents as
are reasonably satisfactory to New United and the Liberty Parties and, from
and after the Founder Newco Mergers, such shares of United Common Stock
shall be free and clear of any Liens or Restrictions whatsoever. New United
will be the surviving entity in each of the Founder Newco Mergers.
11
(c) United, New United and United/New United Merger Sub shall effect the
United/New United Merger, as described in Section 2.5 below.
(d) Liberty Media will contribute, convey, transfer, assign and deliver,
or cause to be contributed, conveyed, transferred, assigned and delivered,
to New United, free and clear of all Liens and Restrictions:
(i) all of the Belmarken Notes (or any proceeds thereof) and all of
Liberty Sub's rights and obligations under the Belmarken Loan
Agreements; and
(ii) an amount of cash equal to US $200,000,000 (the "Cash
Contribution"); and
(iii) all of the Liberty UPC Bonds or, in the event of any refinancing
or restructuring of, or similar transaction with respect to, any of
UPC's indebtedness, the proceeds, if any, received in exchange for any
of the Liberty UPC Bonds in such transaction (the "Restructuring
Proceeds");
and New United shall issue and deliver to Liberty Media or the applicable
Contributing Party or Contributing Parties at the Closing, the following
shares of New United Class C Stock (the "Liberty Contribution Shares"):
(1) in exchange for, and in consideration of, the contribution of the
Belmarken Notes (or any proceeds thereof) and the assignment of Liberty
Sub's rights and obligations under the Belmarken Loan Agreements to New
United pursuant to Section 2.2(d)(i), a number of shares of New United
Class C Stock equal to the quotient of (A) US $856,800,000, plus
interest accrued on such amount from and including May 29, 2001 to the
Closing Date at the rate of 6% per annum, compounded quarterly,
calculated in the same manner as provided in the Belmarken Loan
Agreements for the accretion of interest on the Belmarken Notes
(irrespective of whether any Belmarken Notes are outstanding), (the
"Belmarken Notes Value") divided by (B) US $16.18; and
(2) in exchange for, and in consideration of, the Cash Contribution, a
number of shares of New United Class C Stock equal to the quotient of
(A) the amount of the Cash Contribution divided by (B) US $16.18; and
(3) in exchange for, and in consideration of, the Liberty UPC Bonds
and/or Restructuring Proceeds contributed to New United pursuant to
Section 2.2(d)(iii), a number of shares of New United Class C Stock
equal to the quotient of (A) the Liberty UPC Bond Cost divided by (B)
US $1.53;
provided that (A) if the quotient obtained by dividing the sum of the Belmarken
Notes Value plus the amount of the Cash Contribution plus the Liberty UPC Bond
Cost plus US $20,000,000 (such sum, the "Liberty Contribution Value"), by the
sum of the total number of Liberty Contribution Shares determined in accordance
with clauses (1), (2) and (3) above plus 11,976,048 (such sum, the "Total
Liberty Shares"), is greater than US $5.00, New United shall issue and deliver
to Liberty at the Closing a sufficient number of additional shares of New United
Class C Stock (the "Additional Liberty Shares") so that the quotient obtained by
dividing the Liberty Contribution Value by the sum of the Total Liberty Shares
plus the Additional Liberty Shares is equal to US $5.00 and (B) if the quotient
obtained by dividing the Liberty Contribution Value by the Total Liberty Shares
is less than US $5.00, the number of Liberty Contribution Shares issued and
delivered by New United to Liberty pursuant to this Section 2.2(d) shall be
reduced by a number of shares of New United Class C Stock so that the quotient
obtained by dividing the Liberty Contribution Value by the number of Liberty
Contribution Shares issued and delivered to Liberty by New United is equal to
US $5.00. For purposes of each provision of this Agreement other than this
Section 2.2(d) any Additional Liberty Shares issued and delivered pursuant to
this Section 2.2(d) shall be deemed to be Liberty Contribution Shares.
(e) Liberty Media, LMI and New United will enter into an agreement
pursuant to which New United will acknowledge that Liberty, LMI and their
respective Affiliates are intended beneficiaries of the covenants and
agreements set forth in Sections 7.11 and 11.15 of the Loan Agreement,
dated as of May 25, 2001, among Belmarken Holding B.V., UPC, UPC Internet
Holding B.V. and Liberty Sub, and New United will agree that it will not
amend, modify or waive in any respect or terminate any of such
12
covenants or agreements without the prior written consent of Liberty and
LMI (the "No Waiver Agreement").
(f) If Liberty or Liberty Global causes any Person to make all or part of
the contributions described in clauses (a) or (d) above, each such Person
shall become a party to this Agreement and the applicable Transaction
Documents (each such Person, a "Contributing Party").
2.3 Repayment of Indebtedness.
(a) At the Closing, immediately following the consummation of the transactions
set forth in Section 2.2, Liberty shall repay, or cause to be repaid, in full
the unpaid balance of the principal amount of the $310,000,000 Notes together
with all accrued and unpaid interest thereon (the "Note Repayment Amount") to
UIPI either by the delivery of cash or, as described below, Liberty 2009 Notes.
Upon receipt of the Note Repayment Amount, United shall irrevocably release, and
shall cause each beneficiary of Liberty Media's guaranty of the repayment of the
indebtedness evidenced by the $310,000,000 Notes (the "Liberty Guaranty") to
irrevocably release, Liberty from all of its obligations under the Liberty
Guaranty. Notwithstanding anything contained in the December 7 Letter Agreement,
the $310,000,000 Notes or the Liberty Guaranty, (i) the balance of the
indebtedness evidenced by the $310,000,000 Notes shall not be due and payable
until the Closing Date; provided, however, that if this Agreement is terminated
without the occurrence of the Closing, then the balance of such indebtedness
will be due and payable in cash on the date of termination of this Agreement,
(ii) prior to the Closing, Liberty Argentina may assign the $310,000,000 Notes,
in whole or in part, to Liberty and (iii) Liberty may repay, or cause to be
repaid, the balance of the indebtedness evidenced by the $310,000,000 Notes, in
whole or in part, by the delivery of Liberty 2009 Notes to UIPI at the Closing.
If Liberty repays, or causes to be repaid, the balance of the indebtedness
evidenced by the $310,000,000 Notes by the delivery of Liberty 2009 Notes, (A)
such Liberty 2009 Notes shall (1) except as set forth herein, be substantially
identical to Liberty's Senior Notes, due 2009, that were originally issued on
July 7, 1999 (the "Existing Liberty Notes"), (2) not, when delivered to UIPI at
the Closing, be registered pursuant to the Securities Act, (3) be issued with an
aggregate principal amount equal to the portion of the Note Repayment Amount
that is being repaid by delivery of such Liberty 2009 Notes, and (4) bear
interest on the principal amount thereof at a rate per annum equal to the market
yield on the Existing Liberty Notes as of the Closing Date (determined in the
manner set forth on Schedule 2.3), and (B) Liberty, United and UIPI shall, at
the Closing, enter into a registration rights agreement with respect to the
Liberty 2009 Notes in the form attached hereto as Exhibit 2.3 (the "Liberty 2009
Notes Registration Rights Agreement").
(b)(i) United shall not and shall cause each of its Subsidiaries at any time
holding Liberty 2009 Notes not to, transfer any Liberty 2009 Notes to any Person
other than a Person that is a wholly owned Subsidiary of United without first
complying with the provisions of this Section 2.3(b). If United or a United
Subsidiary holding any Liberty 2009 Notes (the "Notes Holder") desires to
transfer any Liberty 2009 Notes to a Person that is not a wholly owned
Subsidiary of United, such Notes Holder shall first deliver written notice to
Liberty by telecopy (a "Liberty Notice") on the fifth Business Day prior to the
date on which the Notes Holder intends to transfer such Liberty 2009 Notes (the
"Transfer Date"), setting forth the number of Liberty 2009 Notes such Notes
Holder intends to transfer on the Transfer Date (expressed as an aggregate
principal amount) and setting forth a time on the Transfer Date at which the
Notes Holder will deliver the Offer Notice telephonically as described in the
following sentence, which time shall be after 7:00 a.m. and prior to 8:00 a.m.
(in each case, Denver, Colorado time). On the Transfer Date, at the time set
forth in the Liberty Notice, the Notes Holder shall telephonically offer (the
"Offer Notice") to sell Liberty a number of Liberty 2009 Notes (expressed as an
aggregate principal amount) equal to the number of Liberty 2009 Notes set forth
in the Liberty Notice (the "Offered Notes"), free and clear of all Liens and
Restrictions, for cash in an amount per Liberty 2009 Note specified by the Notes
Holder (expressed as a percentage of the principal amount of each Liberty 2009
Note so offered).
(ii) If Liberty desires to purchase all, but not less than all, of the Offered
Notes, Liberty may accept such Offer Notice by notifying the Notes Holder
telephonically at the telephone number specified in the Offer Notice at or prior
to 10:00 a.m. (Denver, Colorado time) on the Transfer Date of its intention to
purchase the Offered Notes (the "Purchased Notes") for a cash purchase price per
Purchased Note as set forth in the Offer
13
Notice (the "Acceptance Notice"). The telephonic delivery of a timely Acceptance
Notice shall constitute a binding obligation of Liberty and the Notes Holder.
Liberty and the Notes Holder shall, on the Transfer Date and promptly following
the delivery of an Acceptance Notice, execute and deliver a customary agreement
for the purchase and sale of the Purchased Notes, which agreement shall contain
representations and warranties on the part of the Notes Holder that the
Purchased Notes are, and shall be at the closing of the sale of the Purchased
Notes to Liberty, owned by such Notes Holder, beneficially and of record, and
are not, and at the time of such closing will not be, subject to any Liens or
Restrictions whatsoever. The sale of the Purchased Notes to Liberty shall be
consummated on the third Business Day following the Transfer Date.
(iii) If Liberty does not telephonically deliver an Acceptance Notice to the
Notes Holder agreeing to purchase all of the Offered Notes, the Notes Holder
may, on the Transfer Date, sell the Offered Notes for a cash purchase price per
Offered Note that is no less than the purchase price per Offered Note set forth
in the Offer Notice to a bona fide third party. Any sale of Offered Notes
pursuant to the previous sentence shall be consummated no later than the third
Business Day following the Transfer Date. If the Notes Holder does not sell such
Offered Notes on the Transfer Date or does not consummate the sale thereof on or
before the third Business Day following the Transfer Date, such Offered Notes
may not be transferred without again complying with the procedures set forth in
this Section 2.3(b).
2.4 Certain Adjustments. If United or New United effects any stock dividend,
stock split, reverse stock split, recapitalization or reclassification affecting
the shares of its common stock or preferred stock of any class or series, or
otherwise effects any transaction that changes such shares into any other
securities (including securities of another entity) or effects any other
dividend or distribution (other than a normal cash dividend payable out of
current or retained earnings) on such shares, then the exchange ratios
(including the number and kind of shares) set forth in this Agreement for any
transaction not consummated prior to such event will, as appropriate, be
adjusted to reflect such event.
2.5 United/New United Merger.
(a) Simultaneously with the execution and delivery of this Agreement, United,
New United and United/ New United Merger Sub have entered into an Agreement and
Plan of Merger, dated the date hereof, a copy of which is attached hereto as
Exhibit 2.5(a) (the "United/New United Merger Agreement"). As described in
Section 2.2, subject to and upon the terms and conditions of the United/New
United Merger Agreement, at the Closing, United/New United Merger Sub shall, and
New United and United shall cause United/New United Merger Sub to, merge with
and into United in accordance with the provisions of the
Delaware General
Corporation Law (the "DGCL") (the "United/New United Merger"), the separate
corporate existence of United/New United Merger Sub shall cease and United shall
continue as the surviving entity in the United/ New United Merger (the
"Surviving Entity").
(b) By virtue of the United/New United Merger:
(i) all of the shares of United Series E Preferred Stock outstanding
immediately prior to the effective time of the United/New United Merger
(the "Effective Time") shall be converted into and represent the right to
receive, and shall be exchangeable for, an aggregate of 1,500,000 shares of
the Class A Common Stock, par value US $0.01 per share, of the Surviving
Entity ("Surviving Entity Class A Stock");
(ii) each share of United Class A Stock outstanding immediately prior to
the Effective Time shall be converted into and represent the right to
receive, and shall be exchangeable for, one share (the "Exchange Ratio") of
the Class A Common Stock, par value US $0.01 per share, of New United ("New
United Class A Stock")and each share of United Class B Stock outstanding
immediately prior to the Effective Time shall be converted into and
represent the right to receive and be exchangeable for, one share of New
United Class A Stock;
(iii) each share of United Series B Preferred Stock outstanding
immediately prior to the Effective Time shall be converted into and
represent the right to receive, and shall be exchangeable for, one share of
Convertible Preferred Stock, Series F, par value US $0.01 per share, of the
Surviving Entity ("Surviving Entity Series F Preferred Stock");
14
(iv) each share of United Series C Preferred Stock outstanding immediately
prior to the Effective Time shall be converted into and represent the right
to receive, and shall be exchangeable for, one share of 7% Series G
Convertible Senior Cumulative Preferred Stock, par value US $0.01 per
share, of the Surviving Entity ("Surviving Entity Series G Preferred
Stock"); and
(v) each share of United Series D Preferred Stock outstanding immediately
prior to the Effective Time shall be converted into and represent the right
to receive, and shall be exchangeable for, one share of 7% Series H
Convertible Senior Cumulative Preferred Stock, par value US $0.01 per
share, of the Surviving Entity ("Surviving Entity Series H Preferred
Stock")
(such shares of New United Class A Stock, Surviving Entity Series F Preferred
Stock, Surviving Entity Series G Preferred Stock and Surviving Entity Series H
Preferred Stock, the "United/New United Merger Consideration"); provided,
however, that each share of United Class A Stock, United Class B Stock, United
Series B Preferred Stock, United Series C Preferred Stock and United Series D
Preferred Stock that immediately prior to the Effective Time is held by New
United or that is held by United in treasury shall be canceled and retired
without payment of any consideration therefor and without any conversion thereof
into United/New United Merger Consideration. The rights, privileges, powers and
preferences of the New United Class A Stock, New United Class B Stock and New
United Class C Stock will be as provided in the New United Charter and New
United By-laws which shall continue in effect following the United/New United
Merger; provided that, effective immediately upon the Effective Time, the New
United Charter shall be amended to change the name of New United to
"UnitedGlobalCom, Inc."
(c) At the Effective Time, all outstanding options to purchase shares of United
Class A Stock or United Class B Stock (which options to purchase shares of
United Class B Stock shall consist solely of Class B Options) under a United
Stock Option Plan or any other contract, all of which are listed in Section
2.5(c) of the United Disclosure Schedule, shall remain outstanding, be assumed
by New United and thereafter be exercisable, at the same per share exercise
price and pursuant to the same terms and conditions, including vesting
conditions, for a number of shares of New United Class A Stock or New United
Class B Stock, as applicable, equal to the number of shares of United Class A
Stock or United Class B Stock for which such option was exercisable immediately
prior to the Effective Time.
(d) At the Effective Time, all of the shares of United/New United Merger Sub's
Class B Common Stock, par value US $0.01 per share ("United/New United Merger
Sub Class B Stock"), and Class C Common Stock, par value US $0.01 per share
("United/New United Merger Sub Class C Stock"), outstanding immediately prior to
the Effective Time and held by New United shall be converted into and represent
the right to receive, and shall be exchangeable for, respectively, an aggregate
of 1,500,000 shares of the Class B Common Stock, par value US $0.01 per share,
of the Surviving Entity ("Surviving Entity Class B Stock") and 300,000,000
shares of the Class C Common Stock, par value US $0.01 per share, of the
Surviving Entity ("Surviving Entity Class C Stock").
(e) As of and following the Effective Time, the Certificate of Incorporation
and By-laws of the Surviving Entity shall be as set forth on Exhibits 2.5(e)-1
and 2.5(e)-2, respectively (respectively, the "Surviving Entity Charter" and the
"Surviving Entity By-laws"). The rights, privileges, powers and preferences of
the Surviving Entity Class A Stock, Surviving Entity Class B Stock, Surviving
Entity Class C Stock, Surviving Entity Class D Stock, Surviving Entity Series F
Preferred Stock, Surviving Entity Series G Preferred Stock and Surviving Entity
Series H Preferred Stock shall, from and after the Effective Time, be as
provided in the Surviving Entity Charter and the Surviving Entity Bylaws.
(f) The terms of the foregoing exchanges (including the exchange rates) shall,
as appropriate, be subject to adjustment as set forth in Section 2.4 for events
occurring after the date hereof and prior to the Effective Time.
(g) As of and following the Effective Time, until their successors are duly
elected or appointed in accordance with the New United Charter, the New United
By-laws and the Voting Agreement, the directors, executive officers and certain
other officers of New United will be as set forth on Schedule 2.5(g).
15
ARTICLE III
[RESERVED]
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF
LIBERTY MEDIA, LIBERTY GLOBAL AND LMI
Each of the Liberty Parties, severally and not jointly, as to itself and the
assets, if any, being transferred by such Liberty Party pursuant hereto only,
represents and warrants to the other parties hereto, as follows:
4.1 Organization, Good Standing and Authority. Such Liberty Party (i) is a
corporation duly incorporated, validly existing and in good standing under the
laws of the jurisdiction of its incorporation, (ii) has all requisite corporate
power and authority to own, lease and operate its properties and to carry on its
business as now being conducted and (iii) is duly qualified or licensed and in
good standing to do business in each jurisdiction in which the property owned,
leased or operated by it or the nature of the business conducted by it makes
such qualification necessary, except where the failure to be so qualified or
licensed and in good standing has not had and is not reasonably likely to have
(1) a Material Adverse Effect on the assets being transferred by the Liberty
Parties pursuant hereto, taken as a whole, or (2) a material adverse effect on
the ability of the Liberty Parties to perform their respective obligations
under, and to consummate the transactions contemplated by, this Agreement and
the other Transaction Documents (each of clauses (1) and (2) above, a "Liberty
Material Adverse Effect").
4.2 Power; Authorization and Validity; Consents; No Conflicts. Such Liberty
Party has all requisite corporate power and authority to enter into and perform
its obligations under this Agreement and each Transaction Document to be
executed and delivered by it pursuant to this Agreement. The execution and
delivery by such Liberty Party of and, subject to the satisfaction of the
conditions set forth in this Agreement, the performance by it of its obligations
under, this Agreement and each Transaction Document to which it is or will be a
party have been duly authorized by all requisite corporate action of such
Liberty Party. This Agreement has been, and each of the other Transaction
Documents to be executed and delivered by such Liberty Party will be at or prior
to the Closing, duly executed and delivered by such Liberty Party, and assuming
the due execution and delivery by each other party hereto and thereto (other
than another Liberty Party), this Agreement constitutes, and when executed and
delivered by such Liberty Party pursuant to this Agreement, each Transaction
Document to which such Liberty Party is a party will constitute, the legal,
valid and binding obligation of such Liberty Party enforceable in accordance
with its terms, except as such enforceability may be affected by applicable
bankruptcy, reorganization, insolvency, moratorium or similar laws affecting
creditors' rights generally or by general equitable principles. Except for the
requirements under the HSR Act and except for any required notices, Filings,
consents, approvals or waivers set forth on Section 4.2 of the Liberty
Disclosure Schedule (the "Required Liberty Consents"), no consent, approval or
waiver of, notice to, or Filing with, any other Person is required, on behalf of
such Liberty Party in connection with the execution, delivery or performance by
such Liberty Party of this Agreement or by such Liberty Party of any of the
other Transaction Documents to which it is a party, or the consummation of the
transactions contemplated hereby and thereby, the failure of which to be
obtained, given or made, individually or in the aggregate, would have a Liberty
Material Adverse Effect. Except as set forth on Section 4.2 of the Liberty
Disclosure Schedule, the execution and delivery by such Liberty Party of this
Agreement and the other Transaction Documents to which they or any of them are
parties do not, and the performance by such Liberty Party, of their respective
obligations under this Agreement and the other Transaction Documents to which
they or any of them are parties will not, (i) violate or conflict with any
provision of the certificate of incorporation or bylaws of such Liberty Party,
(ii) assuming that the Required Liberty Consents of Governmental Authorities are
obtained, violate any of the terms, conditions or provisions of any Law, License
or Judgment to which such Liberty Party is subject or by which any of the
foregoing or their respective assets are bound, except that no representation is
made with respect to any foreign Law of any jurisdiction in which Liberty does
not, directly or through a Subsidiary, own assets or engage in business, or
(iii) assuming that the
16
Required Liberty Consents are given, made and obtained, result in a violation or
breach of, or (with or without the giving of notice or lapse of time or both)
constitute a default (or give rise to any right of termination, cancellation,
acceleration, repurchase, prepayment or repayment or to increased payments)
under or give rise to or accelerate any material obligation (including any
obligation to, or to offer to, repurchase, prepay, repay or make increased
payments) or result in the loss or modification of any material benefit under,
or result in a Lien or Restriction on any of the assets of such Liberty Party
being contributed pursuant to this Agreement pursuant to any Contract to which
such Liberty Party is a party or by which such Liberty Party or any of its
assets is bound, except in the case of any Law (other than Delaware law),
License or Judgment referred to in clause (ii) and any Contract referred to in
clause (iii), as would not, individually or in the aggregate, have a Liberty
Material Adverse Effect.
4.3 Brokers' and Finders' Fees. There is no broker, finder, investment banker
or similar intermediary which has been retained by, or is authorized to act on
behalf of, any Liberty Party or any of its Subsidiaries or any of their
respective officers or directors who will be entitled to any fee or commission
in connection with this Agreement or upon consummation of the transactions
contemplated hereby.
4.4 Legal Proceedings. There is no Judgment outstanding, or any Legal
Proceeding by or before any Governmental Authority or any arbitrator pending or,
to such Liberty Party's knowledge, threatened in writing, against such Liberty
Party that, individually or in the aggregate, could reasonably be expected to
have a Liberty Material Adverse Effect. Section 4.4 of the Liberty Disclosure
Schedule identifies certain Legal Proceedings pending or threatened against the
Liberty Parties and/or their respective Subsidiaries.
4.5 Ownership of United Class B Stock. Liberty Global is the record and
beneficial owner of 9,859,336 shares of United Class B Stock, free and clear of
all Liens and Restrictions, except as set forth in Section 4.5 of the Liberty
Disclosure Schedule or as may be or have been created by this Agreement or the
other Transaction Documents or by United or any of its Affiliates and except for
restrictions on transfer under federal or state securities laws.
4.6 [Reserved.]
4.7 Belmarken Notes. Liberty Media, through its ownership of Liberty Sub, owns
the Belmarken Notes or the proceeds of any payments thereunder and its rights
under the Belmarken Loan Agreements, free and clear of all Liens and
Restrictions, other than as may have been created by the Belmarken Loan
Agreements, this Agreement or the other Transaction Documents, or by United or
any of its Controlled Affiliates, except as may arise out of or in connection
with, or result from, a Restructuring Transaction and except for restrictions on
transfer under federal or state securities laws or applicable local laws.
4.8 [Reserved.]
4.9 Investment Intent. Such Liberty Party is acquiring shares of New United
Class C Stock pursuant to this Agreement for investment purposes only and
acknowledges that such shares may not be sold without registration under the
Securities Act and applicable state securities laws, unless an exemption
therefrom is available.
4.10 Registration Statement; Proxy Statement. The information supplied by such
Liberty Party in writing expressly for the purpose of inclusion in the
Registration Statement and the Proxy Statement shall not at the time the
Registration Statement is declared effective by the Commission, on the date the
Proxy Statement is first mailed to the stockholders of United, at the time of
the United Stockholders Meeting or on the Closing Date contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading.
4.11 Liberty UPC Bonds. Liberty Media or one or more of its Affiliates is the
record and beneficial owner of the Liberty UPC Bonds, free and clear of all
Liens and Restrictions, other than as may have been created by this Agreement or
the other Transaction Documents or by United or any of its Controlled
Affiliates, except as may arise out of or in connection with, or result from, a
Restructuring Transaction and except for restrictions on transfer under federal
or state securities laws or applicable local laws. Schedule 1.1 contains a
17
correct and complete description of the number and type of Liberty UPC Bonds
held by Liberty Media and its Controlled Affiliates as of the date hereof and,
as of November 30, 2001, the Liberty UPC Bond Cost.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
OF THE FOUNDERS
Each Founder, severally and not jointly, represents and warrants to the Liberty
Parties as follows:
5.1 Organization, Good Standing and Authority. If such Founder is not a
natural person, such Founder is (i) duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization, (ii) has all
requisite power and authority to own, lease and operate its properties and to
carry on its business as now being conducted and (iii) is duly qualified or
licensed and in good standing to do business in each jurisdiction in which the
property owned, leased or operated by it or the nature of the business conducted
by it makes such qualification necessary, except in each case where the failure
to be in good standing, to have such power and authority or to be so qualified
or licensed and in good standing has not had and is not reasonably likely to
have (1) a Material Adverse Effect on the applicable Founder Newco or (2) a
material adverse effect on the ability of such Founder or Founder Newco to
perform his or its respective obligations under, and to consummate the
transactions contemplated by, this Agreement and the other Transaction Documents
(each of clauses (1) and (2) above, a "Founder Material Adverse Effect"). To the
knowledge of such Founder there are no voting trusts, proxies or other
agreements or understandings with respect to the voting of the capital stock or
ownership interests of United, other than the agreements listed in Section 5.1
of the Founder Disclosure Schedule, true and complete copies of which have been
provided to the Liberty Parties.
5.2 Power; Authorization and Validity; Consents; No Conflicts. Such Founder,
in the case of a natural person, has all requisite legal capacity and, in the
case of a Founder that is not a natural person, has all requisite power and
authority, in each case to enter into and perform his or its obligations under
this Agreement and each Transaction Document to be executed and delivered by him
or it pursuant to this Agreement. The execution and delivery by such Founder of,
and, subject to the satisfaction of the conditions set forth in this Agreement,
the performance of his or its obligations under, this Agreement and each
Transaction Document to which he or it is or will be a party have been duly
authorized by all requisite action of such Founder. This Agreement has been duly
executed and delivered by such Founder and, assuming the due execution and
delivery by each Liberty Party, as applicable, this Agreement constitutes, and
when executed and delivered by such Founder pursuant to this Agreement, each
Transaction Document to which such Founder is a party will constitute, the
legal, valid and binding obligation of such Founder, enforceable in accordance
with its terms, except as such enforceability may be affected by applicable
bankruptcy, reorganization, insolvency, moratorium or similar laws affecting
creditors' rights generally or by general equitable principles. Except for the
filing of the certificate of formation for the applicable Founder Newco, and any
required notices, Filings, consents, approvals or waivers set forth on Section
5.2 of the Founder Disclosure Schedule (the "Required Founder Consents"), no
consent, approval or waiver of, notice to, or Filing with, any other Person is
required, on behalf of such Founder or the applicable Founder Newco in
connection with the execution, delivery or performance by such Founder of this
Agreement or any of the other Transaction Documents to which such Founder is a
party, or the consummation of the transactions contemplated hereby and thereby,
the failure of which to be obtained, given or made, individually or in the
aggregate, would have a Founder Material Adverse Effect or United Material
Adverse Effect. Except as set forth on Section 5.2 of the Founder Disclosure
Schedule, the execution and delivery by such Founder and the applicable Founder
Newco, as applicable, of this Agreement and the other Transaction Documents to
which such Founder or Founder Newco is a party do not, and the performance by
such Founder or Founder Newco of his or its obligations under this Agreement and
the other Transaction Documents to which such Founder or Founder Newco is a
party will not, (i) in the case of each Founder Newco and in the case of a
Founder that is not a natural person, violate such Founder Newco's or Founder's
certificate or articles of incorporation or formation, bylaws, trust agreement,
operating agreement, limited liability company agreement or other equivalent
organizational document, (ii) violate any of the terms, conditions or provisions
of any Law, License or Judgment to which
18
such Founder or Founder Newco is subject or by which such Founder or Founder
Newco or his or its assets are bound, except that no representation is made with
respect to any foreign Law of any jurisdiction in which United does not,
directly or through a Subsidiary, own assets or engage in business, or (iii)
assuming that the Required Founder Consents are given, made and obtained, result
in a violation or breach of, or (with or without the giving of notice or lapse
of time or both) constitute a default (or give rise to any right of termination,
cancellation or acceleration) under, or result in a Lien on any of the assets of
such Founder or Founder Newco pursuant to any Contract to which such Founder or
Founder Newco is a party or by which such Founder or Founder Newco or any of his
or its assets is bound, except in the case of any Law (other than Delaware law),
License or Judgment referred to in clause (ii) and any Contract referred to in
clause (iii), as would not have a Founder Material Adverse Effect or United
Material Adverse Effect.
5.3 Founder Newcos. On the Closing Date, the Founder Newco to be formed by
such Founder pursuant to Section 2.1(a) will (a) be a limited liability company,
duly organized, validly existing and in good standing under the laws of the
State of Delaware, (b) have all requisite power and authority to own its
properties and conduct its business, (c) be the record and beneficial owner of a
number of shares of United Common Stock equal to the number of Founder Shares
set forth next to such Founder's name on Schedule 2.1(a) (such shares consisting
of shares of United Class B Stock and shares of United Class A Stock issued upon
conversion of shares of United Class B Stock pursuant to the last sentence of
Section 2.1(a)) (together with all dividends and distributions paid with respect
to the Founder Shares after the date hereof and the right to receive all unpaid
dividends and distributions declared or otherwise payable with respect to such
shares of United Common Stock, and associated stock purchase rights, if any),
free and clear of all Liens and Restrictions except as set forth on Section 5.7
of the Founder Disclosure Schedule (each of which Liens and Restrictions shall
be fully and unconditionally released prior to or simultaneous with the Founder
Newco Mergers, as set forth in Section 2.2(b)) or as may be or have been created
by this Agreement or the other Transaction Documents or by New United, United or
any of their respective Controlled Affiliates, (d) have all requisite power and
authority to execute and deliver and perform its obligations under the
applicable Founder Newco Merger Agreement and to consummate the transactions
contemplated thereby and (e) will have duly executed and delivered the
applicable Founder Newco Merger Agreement. At all times from the formation of
the Founder Newco to be formed by such Founder pursuant to Section 2.1(a) until
the Closing, (x) no Person other than such Founder shall own any equity interest
whatsoever in such Founder Newco, (y) such Founder shall own all the limited
liability company membership interests in such Founder Newco free and clear of
any Liens and Restrictions, except as may be or have been created by this
Agreement and except for its obligations under the applicable Founder Newco
Merger Agreement, and (z) such Founder Newco shall have no assets other than the
shares of United Class A Stock and United Class B Stock, dividends and
distributions paid or made with respect to the Founder Shares after the date
hereof, rights to receive all unpaid dividends or distributions declared or
otherwise payable with respect to such shares of United Common Stock, and
associated rights referred to in clause (c) of the previous sentence, and no
liabilities or obligations, known or unknown, whether absolute, accrued, fixed,
contingent or otherwise, except for its obligations under the applicable Founder
Newco Merger Agreement.
5.4 Brokers' and Finders' Fees. There is no broker, finder, investment banker
or similar intermediary that has been retained by, or is authorized to act on
behalf of, any Founder or any officer, director or trustee thereof who will be
entitled to any fee or commission in connection with this Agreement or upon
consummation of the transactions contemplated hereby.
5.5 Information. Such Founder has been given full access to and ample
opportunity to review such financial and other information concerning the
transactions contemplated by this Agreement as he or it has deemed necessary to
make an informed investment decision and acknowledges that each other party has
afforded it the opportunity to make inquiries and obtain information from the
other parties hereto and their respective representatives and advisors.
5.6 Legal Proceedings. There is no Judgment outstanding, or any Legal
Proceeding by or before any Governmental Authority or any arbitrator pending, or
to such Founder's knowledge, threatened in writing, against such Founder or the
applicable Founder Newco that, individually or in the aggregate, could
reasonably be expected to have a Founder Material Adverse Effect or a United
Material Adverse Effect.
19
5.7 Ownership of United Class B Stock and New United Class B Stock. Such
Founder is the record and beneficial owner of the number of shares of United
Class B Stock set forth next to such Founder's name on Schedule 2.1(a), and
after giving effect to the transactions contemplated hereby will be the record
and beneficial owner of the equivalent number of shares of New United Class B
Stock, in each case free and clear of all Liens and Restrictions, except as set
forth in Section 5.7 of the Founder Disclosure Schedule or as may be or have
been created by this Agreement or the other Transaction Documents or by United
or any of its Controlled Affiliates and except for restrictions on transfer
under federal or state securities laws.
5.8 Investment Intent. Such Founder is acquiring shares of New United Class B
Stock pursuant to this Agreement for investment purposes only and acknowledges
that such shares may not be sold without registration under the Securities Act
and applicable state securities laws, unless an exemption therefrom is
available.
5.9 Registration Statement; Proxy Statement. The information supplied by such
Founder in writing expressly for the purpose of inclusion in the Registration
Statement and the Proxy Statement shall not at the time the Registration
Statement is declared effective by the Commission, on the date the Proxy
Statement is first mailed to the stockholders of United, at the time of the
United Stockholders Meeting or on the Closing Date contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
OF UNITED AND NEW UNITED
6.1 Representations and Warranties of United. United hereby represents and
warrants to the Liberty Parties and New United as follows:
(a) Organization, Good Standing and Authority. United (i) is a
corporation duly incorporated, validly existing and in good standing under
the laws of the State of Delaware, (ii) has all requisite corporate power
and authority to own, lease and operate its properties and carry on its
business as now being conducted, and (iii) is duly qualified or licensed
and in good standing to do business in each jurisdiction in which the
property owned, leased or operated by it or the nature of the business
conducted by it makes such qualification necessary, except where the
failure to be so duly qualified or licensed and in good standing,
individually or in the aggregate, would not have (1) a Material Adverse
Effect on United and its Subsidiaries, taken as a whole (or, after giving
effect to the United/New United Merger, the Surviving Entity and its
Subsidiaries, taken as a whole), or (2) a material adverse effect on the
ability of United or New United to perform its obligations under, and
consummate the transactions contemplated by, this Agreement and the other
Transaction Documents (each of clauses (1) and (2) above, a "United
Material Adverse Effect"). True and complete copies of the certificate of
incorporation and bylaws of United, each as amended to date, have been
filed with the Commission as exhibits to the United Commission Filings.
United is not in violation of any of the provisions of its certificate of
incorporation, bylaws or other equivalent organizational document.
(b) Capitalization and Ownership.
(i) As of the date hereof, the total authorized shares of capital stock
of United consists solely of 210,000,000 shares of United Class A Stock,
30,000,000 shares of United Class B Stock and 3,000,000 shares of
Preferred Stock, par value US $0.01 per share (the "United Preferred
Stock") (of which 139,031 shares have been designated as Convertible
Preferred Stock, Series B (the "United Series B Preferred Stock"),
425,000 shares have been designated as 7% Series C Senior Cumulative
Convertible Preferred Stock (the "United Series C Preferred Stock") and
287,500 shares have been designated as 7% Series D Senior Cumulative
Convertible Preferred Stock (the "United Series D Preferred Stock")).
The Board of Directors of United has duly authorized the
20
creation of a new series of United Preferred Stock, consisting of 1,500
authorized shares of United Preferred Stock designated the Series E
Preferred Stock ("United Series E Preferred Stock"). A true and complete
copy of the Certificate of Designation to establish the United Series E
Preferred Stock is attached hereto as Exhibit 6.1(b) (the "Series E
Certificate of Designation"). As of August 31, 2001, 86,030,256 shares
of United Class A Stock (including 5,569,240 shares of United Class A
Stock held by UPC, but not including 35,708 shares of United Class A
Stock held by United as treasury shares), 19,027,134 shares of United
Class B Stock, 113,983 shares of United Series B Preferred Stock,
425,000 shares of United Series C Preferred Stock and 287,500 shares of
United Series D Preferred Stock were issued and outstanding. All of the
outstanding shares of United Class A Stock, United Class B Stock and
United Preferred Stock are duly authorized, validly issued, fully paid
and nonassessable and are free and clear of any Lien or Restriction,
except for Liens and Restrictions created by the holders thereof and
restrictions on transfer arising under federal or state securities laws.
No shares of United Series E Preferred Stock will be issued except
pursuant to the Subscription Agreements as required by Section 2.1(c).
Each share of United Series E Preferred Stock, when issued in accordance
with the Subscription Agreements, will be duly authorized, validly
issued, fully paid and nonassessable and will be free and clear of any
Lien or Restriction, except pursuant to this Agreement and the other
Transaction Documents and except for restrictions on transfer arising
under federal or state securities laws. There are no other outstanding
shares of capital stock or other securities or ownership interests of
United other than shares of United Class A Stock issued after August 31,
2001 (i) upon conversion of shares of Class B Stock or United Preferred
Stock outstanding at August 31, 2001, (ii) paid as dividends on shares
of United Series C Preferred Stock or United Series D Preferred Stock in
accordance with their terms or (iii) upon the exercise of options
outstanding on such date as described in the immediately following
sentence that were issued under United's Stock Option Plans for
Non-Employee Directors and United's 1993 Stock Option Plan
(collectively, the "United Stock Option Plans," which term in the case
of the 1993 Stock Option Plan will include the proposed amendment to
such plan in the form set forth in Paragraph A. of Section 6.1(b) of the
United Disclosure Schedule if adopted by the stockholders of United at
the United Stockholders Meeting) (provided that prior to the United
Stockholders Meeting the parties may discuss the number of shares of
United Class A Stock authorized to be issued pursuant to such plan as a
result of the adoption of such amendment) and options issued after such
date under such United Stock Option Plans in compliance with Section
7.1(h) of this Agreement. As of August 31, 2001, United had reserved (i)
5,496,651 shares of United Class A Stock for issuance upon exercise of
outstanding options issued pursuant to the United Stock Option Plans and
(ii) 1,377,886 shares of United Class A Stock for issuance upon exercise
of stock options that as of such date remained available for grant under
the United Stock Option Plans. Other than the options outstanding at
August 31, 2001 described above or permitted to be granted thereafter as
provided in Section 7.1(h) or as described in Paragraph C. of Section
6.1(b) of the United Disclosure Schedule or shares of United Class B
Stock and United Preferred Stock outstanding at August 31, 2001 that may
be converted into shares of United Class A Stock, there are no
outstanding subscriptions, options, warrants, puts, calls, trusts
(voting or otherwise), rights, exchangeable or convertible securities or
other commitments or agreements of any nature relating to the capital
stock or other securities or ownership interests of United (including
any phantom shares, phantom equity interests or stock or equity
appreciation rights) or obligating United, at any time or upon the
happening of any event, to issue, transfer, deliver, sell, repurchase,
redeem or otherwise acquire, or cause to be issued, transferred,
delivered, sold, repurchased, redeemed or otherwise acquired, any of its
capital stock or any phantom shares, phantom equity interests or stock
or equity appreciation rights, or other ownership interests of United or
obligating United to grant, extend or enter into any such subscription,
option, warrant, put, call, trust, right, exchangeable or convertible
security, commitment or agreement. Without limiting the generality of
the foregoing (x) since June 25, 2000 United has not issued, granted or
sold, or agreed to issue, grant or sell, any shares of United Class B
Stock, any other High Vote Securities or any Rights to acquire any of
the foregoing and (y) from the date of this Agreement until the Closing
Date or the earlier termination of this Agreement, United shall not
issue, grant or sell, or agree to issue, grant or sell,
21
any shares of United Class B Stock, any other High Vote Securities or
any Rights to acquire any of the foregoing, other than the Class B
Options, as defined in Paragraph B.2. of Section 6.1(b) of the United
Disclosure Schedule (the "Class B Options"), which Class B Options
shall, if granted, have been granted in accordance with Section 7.1(h).
Except for the agreements listed in Section 5.1 of the Founder
Disclosure Schedule, to the knowledge of United, there are no voting
trusts, proxies or other agreements or understandings with respect to
the voting of the capital stock or ownership interests of United.
(ii) The total authorized shares of capital stock of the Surviving
Entity from and after the Closing will consist solely of 1,500,000
shares of Surviving Entity Class A Stock, 1,500,000 shares of Surviving
Entity Class B Stock, 301,500,000 shares of Surviving Entity Class C
Stock, 100,000,000 shares of the Class D Nonvoting Common Stock, par
value US $0.01 per share, of the Surviving Entity ("Surviving Entity
Class D Stock"), 139,031 shares of Convertible Preferred Stock, Series
B, par value $0.01 per share, 425,000 shares of 7% Series C Senior
Cumulative Convertible Preferred Stock, par value $0.01 per share,
287,500 shares of 7% Series D Senior Cumulative Convertible Preferred
Stock, par value $0.01 per share, 113,983 shares of Surviving Entity
Series F Preferred Stock, 425,000 shares of Surviving Entity Series G
Preferred Stock and 287,500 shares of Surviving Entity Series H
Preferred Stock. As of immediately following the Closing, there will be
no issued and outstanding shares of capital stock or other securities or
ownership interests of the Surviving Entity other than 1,500,000 shares
of Surviving Entity Class A Stock, 1,500,000 shares of Surviving Entity
Class B Stock, 300,000,000 shares of Surviving Entity Class C Stock,
113,983 shares of Surviving Entity Series F Preferred Stock, 425,000
shares of Surviving Entity Series G Preferred Stock and 287,500 shares
of Surviving Entity Series H Preferred Stock. Pursuant to the terms of
the Surviving Entity Charter, the Surviving Entity may only issue shares
of Surviving Entity Class D Stock in payment of dividends on shares of
Surviving Entity Series G Preferred Stock and Surviving Entity Series H
Preferred Stock and may only issue shares of the Surviving Entity's
preferred stock of any series if the Board of Directors of New United
first approves such issuance by the vote specified in the New United
Charter. The shares of Surviving Entity Class A Stock, Surviving Entity
Class B Stock, Surviving Entity Class C Stock, Surviving Entity Series F
Preferred Stock, Surviving Entity Series G Preferred Stock and Surviving
Entity Series H Preferred Stock to be issued pursuant to this Agreement
and the other Transaction Documents have been duly authorized, and, when
issued, will be validly issued, fully paid, nonassessable, free of
preemptive rights and free of Liens and Restrictions, other than Liens
or Restrictions created by the holder thereof and restrictions on
transfer under federal and state securities laws. To the knowledge of
United, there are no voting trusts, proxies or other agreements or
understandings with respect to the voting of the capital stock or
ownership interests of the Surviving Entity (other than this Agreement
and the other Transaction Documents). As of the Closing Date there will
be no outstanding subscriptions, options, warrants, puts, calls, trusts
(voting or otherwise), rights, exchangeable or convertible securities or
other commitments or agreements (other than this Agreement and the other
Transaction Documents) of any nature relating to the capital stock or
other securities or ownership interests of the Surviving Entity
(including any phantom shares, phantom equity interests or stock or
equity appreciation rights) or obligating the Surviving Entity, at any
time or upon the happening of any event, to issue, transfer, deliver,
sell, repurchase, redeem or otherwise acquire, or cause to be issued,
transferred, delivered, sold, repurchased, redeemed or otherwise
acquired, any of its capital stock or any phantom shares, phantom equity
interests or stock or equity appreciation rights, or other ownership
interests of the Surviving Entity or obligating the Surviving Entity to
grant, extend or enter into any such subscription, option, warrant, put,
call, trust, right, exchangeable or convertible security, commitment or
agreement.
(c) Power; Authorization and Validity; Consents; No Conflicts.
(i) United and its applicable Subsidiaries each has all requisite power
and authority to execute and deliver and perform its obligations under
this Agreement and each other Transaction Document to be executed and
delivered by it pursuant to this Agreement, and to consummate the
transactions
22
contemplated hereby and thereby. The execution and delivery by United or
the applicable Subsidiary thereof of this Agreement and the other
Transaction Documents to which it is or will be a party and, subject to
the satisfaction of the conditions set forth in this Agreement, the
consummation of the transactions contemplated hereby and thereby and the
performance by it of its obligations hereunder and thereunder have been
duly authorized by (x) the unanimous vote of the Board of Directors of
United (excluding directors designated by Liberty Media), (y) the
unanimous vote of the members of the Board of Directors of United who
are not Founders, Permitted Transferees of a Founder, officers or
directors or designees of Liberty Media or officers or directors of
United, voting separately, and (z) except for the approval of the
stockholders of United, all other requisite corporate action. This
Agreement has been, and each of the other Transaction Documents to be
executed and delivered by United and each applicable Subsidiary thereof
will be at or prior to the Closing, duly and validly executed and
delivered by United or the applicable Subsidiary, as the case may be.
Assuming the due execution and delivery by each Liberty Party, as
applicable, this Agreement constitutes, and each of the other
Transaction Documents when executed and delivered by United or the
applicable Subsidiary thereof will constitute, the legal, valid and
binding obligation of United or the applicable Subsidiary thereof, as
the case may be, enforceable in accordance with its terms, except as
such enforceability may be affected by applicable bankruptcy,
reorganization, insolvency, moratorium or similar laws affecting
creditors' rights generally or by general equitable principles.
(ii) Except for the requirements under the HSR Act, the filing of the
Certificate of Merger in connection with the United/New United Merger
and any required notices, Filings, consents, approvals or waivers set
forth in Paragraph A. of Section 6.1(c)(ii) of the United Disclosure
Schedule that, as indicated on such Section of the United Disclosure
Schedule as "Required United Consents," have not been obtained or made
as of the date hereof (the "Required United Consents"), no consent,
approval or waiver of, notice to, or Filing with, any other Person is
required on behalf of United or any of its Subsidiaries in connection
with the execution, delivery or performance by United of this Agreement
or by United or its applicable Subsidiaries, as the case may be, of any
of the other Transaction Documents to which it is or will be a party, or
the consummation of the transactions contemplated hereby or thereby
(including the United/New United Merger), the failure of which to be
obtained, given or made, individually or in the aggregate, would have a
United Material Adverse Effect or a New United Material Adverse Effect.
The execution and delivery of this Agreement and the other Transaction
Documents by United and its applicable Subsidiaries do not, and the
performance by United and its applicable Subsidiaries of their
respective obligations hereunder and thereunder will not, (x) assuming
the approval of United's stockholders described in Section 7.2 is
obtained, violate or conflict with any provision of the certificate of
incorporation, bylaws, operating agreement or other organizational or
governing documents of United or any of its Subsidiaries, (y) assuming
that the Required United Consents of Governmental Authorities are
obtained, except as described in footnote 1 to Section 6.1(c)(ii) of the
United Disclosure Schedule, violate any of the terms, conditions or
provisions of any Law, License or Judgment to which United or any of its
Subsidiaries is subject or by which any of the foregoing or any of their
respective assets are bound, except that no representation is made with
respect to any foreign Law of any jurisdiction in which United does not,
directly or through a Subsidiary, own assets or engage in business, or
(z) assuming that the Required United Consents are given, made and
obtained, result in a violation or breach of, or (with or without the
giving of notice or lapse of time or both) constitute a default (or give
rise to any right of termination, cancellation, amendment, acceleration,
repurchase, prepayment or repayment or to increased payments) under, or
give rise to or accelerate any material obligation (including any
obligation to, or to offer to, repurchase, prepay, repay or make
increased payments) or result in the loss or modification of any
material benefit under, or result in a Lien or Restriction on any of the
assets of United or any of its Subsidiaries pursuant to, any note, bond,
indenture, debenture, security agreement, trust agreement, lien,
mortgage, lease, agreement, contract, license, franchise, permit,
guaranty, joint venture agreement, or other agreement, instrument,
understanding, commitment or obligation, oral or written (collectively
"Contracts"), to which United or any of its
23
Subsidiaries is a party or by which United or any of its Subsidiaries or
any of their respective assets is bound, except in the case of any Law
(other than Delaware law), License or Judgment referred to in clause (y)
and any Contract (other than, for purposes of Article XV only, any
Contract evidencing or securing any outstanding indebtedness of United
or any of its Subsidiaries or pursuant to which any such outstanding
indebtedness was incurred) referred to in clause (z), as would not,
individually or in the aggregate, have a United Material Adverse Effect
or a New United Material Adverse Effect.
(d) Brokers' and Finders' Fees. Except for the amounts disclosed in
Section 6.1(d) of the United Disclosure Schedule for which United will have
sole responsibility and liability, there is no broker, finder, investment
banker or similar intermediary that has been retained by, or is authorized
to act on behalf of, United or any of its Subsidiaries or any of their
respective officers or directors who will be entitled to any fee or
commission in connection with this Agreement or upon consummation of the
transactions contemplated hereby.
(e) Legal Proceedings. There is no Judgment outstanding or any Legal
Proceeding by or before any Governmental Authority or any arbitrator
pending or, to United's knowledge, threatened in writing against United or
any of its Subsidiaries that, individually or in the aggregate, could
reasonably be expected to have a United Material Adverse Effect. Section
6.1(e) of the United Disclosure Schedule identifies certain Legal
Proceedings pending or threatened against United and/or its Subsidiaries.
United has provided to Liberty Media true and complete copies of any
notices or correspondence received by United or any of its subsidiaries or
by United A/P or any of its subsidiaries from any Person since June 25,
2000 relating to any default, acceleration or breach of, or potential
default, acceleration or breach of, or dispute regarding, any material
Contract evidencing or securing any outstanding indebtedness of United or
any of its subsidiaries or United A/P or any of its subsidiaries or
pursuant to which any such outstanding indebtedness was incurred.
(f) Subsidiaries and Affiliates; Assets.
(i) Section 6.1(f)(i) of the United Disclosure Schedule (x) lists each
direct and indirect Subsidiary of United and each Person in which United
directly or indirectly through a Subsidiary owns an investment accounted
for by the equity method (an "Equity Affiliate"), (y) except as set
forth in the final sentence of the preambulatory language to Section
6.1(f)(i) of the United Disclosure Schedule, describes the number and
kind of equity interests or securities, including interests or
securities convertible into or exchangeable or exercisable for any
equity interest or security, in each Subsidiary and Equity Affiliate
owned directly or indirectly by United (each a "United Investment") and
(z) lists all material agreements to which United or any of its
Subsidiaries are parties evidencing such equity interests or securities,
pursuant to which such interests or securities are held, evidencing
Restrictions (including Partner's Purchase Rights) affecting such
interests or securities or entered into in connection with the
acquisition of such interests or securities (unless all liabilities,
obligations and commitments thereunder have been performed in full and
there are no remaining liabilities, obligations or commitments (actual,
contingent or otherwise) thereunder) (the "United Investment
Agreements"). True and complete copies of the United Investment
Agreements have been provided to Liberty Media. With respect to each
United Investment Agreement that is not in English, United has provided
to Liberty Media a true and complete summary of the material terms and
conditions of such United Investment Agreement insofar as such terms and
conditions relate to any representation, warranty or covenant made by
United in this Agreement that is qualified by reference to the United
Disclosure Schedule or to the United Investment Agreements, and the
Liberty Parties may rely on each such summary as the complete
articulation of the terms of the applicable United Investment Agreement
as such terms relate to any representation, warranty or covenant made by
United in this Agreement (notwithstanding any language to the contrary
contained in any such summary). United or the applicable Subsidiary
thereof has good and valid title to the United Investments, free and
clear of all material Liens and Restrictions, other than as set forth in
Section 6.1(f)(i) of the United Disclosure Schedule or as may have been
created by this Agreement and except for restrictions on transfer
24
under federal or state securities laws or applicable local laws.
Assuming the due execution and delivery by each of the other parties
thereto, the United Investment Agreements constitute legal, valid and
binding obligations of United or the applicable Subsidiary that is a
party to such United Investment Agreement. Except as set forth in
Section 6.1(f)(i) of the United Disclosure Schedule, there is no Legal
Proceeding pending, or to the best of United's knowledge, threatened in
writing, against United or any of its Subsidiaries specifically relating
to any of such United Investments or United Investment Agreements.
(ii) Each of United's Subsidiaries and Equity Affiliates (x) is duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, (y) has all requisite power and
authority to own, lease and operate its properties and to carry on its
business as it is now being conducted and (z) is duly qualified to do
business and is in good standing in each jurisdiction in which the
properties owned, leased or operated by it, or the nature of its
activities make such qualification necessary, except in each case when
the failure to be in good standing, to have such power and authority or
to be so duly qualified or licensed and in good standing, individually
or in the aggregate, would not have a United Material Adverse Effect.
(iii) Except as set forth in Section 6.1(f)(iii) of the United
Disclosure Schedule, the assets owned or leased by United and its
Subsidiaries are suitable and adequate for the conduct of their
respective businesses and United or the applicable Subsidiary has good
and valid title to or valid leasehold or other contractual interests in
all such assets that are material to its business, taken as a whole,
free and clear of all Liens other than Permitted Encumbrances and Liens
the existence of which does not have and is not reasonably expected to
have a United Material Adverse Effect.
(iv) None of United or any of its Subsidiaries has guaranteed any of
the liabilities of United Australia/Pacific, Inc. ("United A/P") or any
of its subsidiaries, except as provided in Schedule 6.1(f)(iv). A
default under or acceleration of any of the liabilities of United A/P or
any of its subsidiaries, or a bankruptcy or similar event involving
United A/P or any of its subsidiaries, would not (with or without the
giving of notice or lapse of time or both) result in the acceleration
of, or give rise to the right to accelerate, any of the debt of United
or any of its Subsidiaries.
(g) Commission Filings; Financial Statements.
(i) United has heretofore made available to Liberty Media the
following, in the form filed with the Commission (in each case together
with all exhibits and schedules filed therewith and amendments thereto
filed prior to the date of this Agreement) (the "United Commission
Filings"): (A) United's Annual Reports on Form 10-K for the fiscal years
ended February 29, 1996, February 28, 1997, and the transition report
for the ten months ended December 31, 1998, as amended by Form 10-K/A,
and the Annual Reports on Form 10-K for the fiscal years ended December
31, 1999 and 2000 (the last such report being the "United Form 10-K"),
(B) United's Quarterly Reports on Form 10-Q for the fiscal quarters
ended June 30, 2001 (the "United June 10-Q") and September 30, 2001, (C)
UPC's Annual Reports on Form 10-K for the fiscal years ended December
31, 1998, 1999 and 2000 (the last such report being the "UPC Form
10-K"), (D) UPC's Quarterly Reports on Form 10-Q for the fiscal quarters
ended June 30, 2001 (the "UPC June 10-Q") and September 30, 2001, (E)
all definitive proxy and information statements relating to meetings of
United's and UPC's stockholders since January 1, 1997 to the date of
this Agreement, and (F) all other reports, registration statements,
forms and other documents filed by United and its Subsidiaries with the
Commission since January 1, 1997 to the date of this Agreement (all such
documents referred to in this clause (F) filed in 2001 and publicly
available on or prior to April 2, 2001 (each in the form publicly
available on April 2, 2001), together with the United Form 10-K and the
UPC Form 10-K (each in the form publicly available on April 2, 2001),
and the United June 10-Q and the UPC June 10-Q (each in the form
publicly available on August 14, 2001), the "United 2001 Commission
Filings"). The filings made available pursuant to the preceding sentence
constitute all of the reports, registration statements, proxy or
information statements, documents and forms (other than preliminary
material) that United and its Subsidiaries have been required to file
with the Commission since
25
January 1, 1997. All such filings and all reports, registration
statements, proxy or information statements and other documents filed by
United and its Subsidiaries with the Commission on or after the date
hereof but prior to the Closing Date (x) complied, or will comply, in
all material respects with the Securities Act or the Exchange Act, as
the case may be, and the rules and regulations under each such Act, and
(y) did not at the time they were filed, and will not at the time they
are filed, with the Commission contain any untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary in order to make the statements made therein, in
the light of the circumstances in which they were made, not misleading.
(ii) Except as disclosed in Section 6.1(g) of the United Disclosure
Schedule, each of the consolidated financial statements (including the
notes thereto) contained in the United Commission Filings and each other
report, registration statement, form and other document filed by United
and its Subsidiaries with the Commission from and after the date hereof
was or will be prepared in accordance with GAAP consistently applied
(except as may be indicated in the notes thereto) and Regulation S-X
under the Exchange Act and fairly presents or will fairly present the
consolidated financial position, results of operations and cash flows of
the registrant and its consolidated subsidiaries as of the respective
dates thereof and for the respective periods indicated therein subject
in the case of unaudited interim financial statements to normal
recurring year-end adjustments.
(iii) Except (i) for liabilities and obligations imposed under or
pursuant to this Agreement, the other Transaction Documents or the
United Investment Agreements or (ii) as reflected in the United 2001
Commission Filings or in Section 6.1(g) of the United Disclosure
Schedule, neither United nor any of its Subsidiaries has any liability,
obligation or commitment of any kind or nature, whether due or to become
due, whether absolute, accrued, fixed or contingent or otherwise, that
in any case or in the aggregate is or may be material to the business,
assets, results of operations or financial condition of United and its
Subsidiaries taken as a whole, except liabilities and obligations that
arose since June 30, 2001 in the ordinary course of business or that
arise from changes in general business or economic conditions or from
events affecting the industries in which United and its Subsidiaries
operate generally (none of which has resulted or is reasonably likely to
result in a United Material Adverse Effect or a New United Material
Adverse Effect).
(h) Absence of Certain Developments. Since June 30, 2001, other than as
otherwise permitted, contemplated or required by this Agreement or the
other Transaction Documents, (x) the business of United and each of its
Subsidiaries has been operated only in the ordinary course, (y) to United's
knowledge, except to the extent disclosed in Section 6.1(h) of the United
Disclosure Schedule, no event has occurred and no condition exists that,
individually or together with other events and conditions, has had or,
insofar as United can reasonably foresee, is reasonably likely to have, a
United Material Adverse Effect or a New United Material Adverse Effect, and
(z) there has been no material change in the accounting methods, practices
or policies of United or any of its Subsidiaries except as required by
changes in GAAP.
(i) Legal Compliance. Except as set forth in the United 2001 Commission
Filings or in Section 6.1(i) of the United Disclosure Schedule, United and
its Subsidiaries (x) are in compliance with, and have conducted their
respective businesses so as to comply with, the terms of their respective
Licenses and all applicable Laws, and (y) have all Licenses that are
required to operate their respective businesses, except in such cases where
the failure to so comply or to have such Licenses, either individually or
in the aggregate, has not had and is not reasonably expected to have a
United Material Adverse Effect or a New United Material Adverse Effect.
Without limiting the generality of the foregoing, the operations of the
businesses, assets and facilities of United and, to United's knowledge, its
Subsidiaries are in compliance with all applicable Environmental and Health
Laws, if any, except where the failure to comply has not had and is not
reasonably expected to have a United Material Adverse Effect or a New
United Material Adverse Effect.
26
(j) Taxes. Except as otherwise set forth in Section 6.1(j) of the United
Disclosure Schedule:
(i) Each of United and each of United's Subsidiaries identified in
Paragraph A. of Section 6.1(j) of the United Disclosure Schedule (the
"Material United Subsidiaries") has timely filed all material Tax
Returns that it was required to file. All such Tax Returns are true and
complete in all material respects. All material Taxes owed by United and
the Material United Subsidiaries (whether or not shown on any Tax
Return) have been timely paid. There are no Liens for material Taxes
(other than for current Taxes not yet due and payable or for items being
contested in good faith and for which there are adequate reserves in
accordance with GAAP on the books of the applicable entity) on any of
the assets of United or the Material United Subsidiaries.
(ii) Each of United and each of the Material United Subsidiaries has
withheld and paid all material Taxes required to have been withheld and
paid in connection with amounts paid or owing to any employee,
independent contractor or other third party.
(iii) No material deficiencies for any Taxes have been proposed,
asserted or assessed against United or any of the Material United
Subsidiaries that are not adequately reserved for in accordance with
GAAP in all cases applied on a consistent basis. No Tax Returns of
United or any of the Material United Subsidiaries are currently the
subject of an audit.
(iv) None of United or the Material United Subsidiaries has any current
non-contingent liability for the Taxes of any Person (other than United
and its Subsidiaries) under Treasury Regulations Section 1.1502-6 (or
any similar provision of state, local, or foreign law), as a transferee
or successor, by Contract, or otherwise.
(v) If the income of United or any of the Material United Subsidiaries
was required under federal, state, local, or foreign tax rules, to be
included on a consolidated, unitary, combined or other such Tax Return
filed by a Person other than any of United or the Material United
Subsidiaries, each such group has filed all material Tax Returns that it
was required to file with respect to United or any of the Material
United Subsidiaries for each period during which United or any of the
Material United Subsidiaries was a member of such group. All such
material Tax Returns were correct and complete in all material respects
insofar as they relate to United and the Material United Subsidiaries.
All material Taxes owed by such group with respect to United and the
Material United Subsidiaries (whether or not shown on a Tax Return) have
been paid for each taxable period during which United or any of the
Material United Subsidiaries was a member of its respective group.
(vi) The normal period within which to examine and/or assess Taxes on
the income of United or any of the Material United Subsidiaries has not
been extended with respect to any such Person by waiver of, or agreement
to extend, the applicable statute of limitations or otherwise.
(vii) Neither United nor any of the Material United Subsidiaries has
filed a consent under Section 341(f) of the Code.
(viii) Neither United nor any of the Material United Subsidiaries has
made any payments, nor are any of them obligated to make any payments,
and none of them is a party to any agreement that under certain
circumstances could obligate it to make any payments as a result of the
transactions contemplated by this Agreement or the other Transaction
Documents or otherwise to any employee, member, officer or director of,
or any independent contractor or other person who performs personal
services for, any of United or any of the Material United Subsidiaries
who is a "disqualified individual" (as such term is defined in proposed
Treasury Regulation section 1.280G-1) under any employment, severance or
termination agreement, other compensation arrangement or employee
benefit plan currently in effect which would be characterized as an
"excess parachute payment" (as such term is defined in Section
280G(b)(1) of the Code).
(ix) United has not taken any action and has no present plan or
intention to take any action that would cause the transactions
contemplated hereby or by the other Transaction Documents not to qualify
as a tax-free transaction pursuant to Section 351 of the Code.
27
(x) Neither United nor any of the Material United Subsidiaries is a
party to any tax sharing or allocation agreement with any other Person.
(xi) Other than the Material United Subsidiaries, none of United's
subsidiaries would, individually or all such subsidiaries considered in
the aggregate, constitute a "significant subsidiary" of United as such
term is defined in Section 1-02(w) of Regulation S-X promulgated under
the Exchange Act; provided that, for such purposes the term "5 percent"
shall be substituted in each instance in which the term "10 percent"
appears in Section 1-02(w) of Regulation S-X.
(k) Contracts and Commitments. Except for Contracts entered into after
June 30, 2001 that are disclosed in Section 6.1(k) of the United Disclosure
Schedule, all Contracts to which United or any of its Subsidiaries is a
party or by which any of them or their respective businesses or assets are
bound that are to be performed in whole or in part after the date hereof
and that are required to be filed with the Commission as "material
contracts" pursuant to Item 601 of Regulation S-K have been filed with the
United 2001 Commission Filings. Except as disclosed in Section 6.1(k) of
the United Disclosure Schedule, there is no material Contract or Judgment
binding upon United or any of its Subsidiaries (i) that has had or could
reasonably be expected to have the effect of prohibiting or materially
impairing any current business practice of, or the conduct of business as
currently conducted by, United or its Subsidiaries or limiting the right of
United or any of its Subsidiaries to compete in any line of business, (ii)
that purports to or would bind New United or any of its Subsidiaries or any
of the Liberty Parties or any of their respective Affiliates after giving
effect to the transactions contemplated hereby or (iii) in respect of
which, whether before or after giving effect to the transactions
contemplated hereby or by the other Transaction Documents, any act or
omission of any of the Liberty Parties or any of their respective
Affiliates would result in a violation or breach thereof, or constitute
(with or without the giving of notice or lapse of time or both), or permit
any Person to declare, a default or event of default thereunder, or give
rise to any right of termination, cancellation, amendment, acceleration,
repurchase, prepayment or repayment or to increased payments thereunder, or
give rise to or accelerate any obligation (including, without limitation,
any obligation to, or to offer to, repurchase, prepay, repay or make
increased payments) or result in the loss or modification of any rights or
benefits thereunder, or result in any Lien or Restriction on any of the
assets of, or otherwise have any material adverse effect on, United or any
of its Affiliates. True and complete copies of all Contracts listed in the
United Commission Filings or in Section 6.1(k) of the United Disclosure
Schedule have been provided to Liberty Media. Each of United and its
Subsidiaries has fulfilled in all material respects, or taken all actions
necessary to enable it to fulfill in all material respects when due, its
obligations under each of such Contracts to which it is a party, and none
of United or any or its Subsidiaries is in breach or violation of, or in
default (with or without the giving of notice or lapse of time or both)
under any of such Contracts, which breach, violation or default
individually or in the aggregate would reasonably be expected to have a
United Material Adverse Effect or a New United Material Adverse Effect.
(l) Intangible Property. Except as set forth in the United 2001
Commission Filings or Section 6.1(l) of the United Disclosure Schedule, one
or more of United and its Subsidiaries owns, or is licensed or otherwise
possesses legally enforceable rights to use, all Intellectual Property that
is used in the business of United and its Subsidiaries as currently
conducted, except to the extent that the failure to have such rights has
not had and is not reasonably likely to have a United Material Adverse
Effect. Except as set forth in the United 2001 Commission Filings or
Section 6.1(l) of the United Disclosure Schedule and except, in the case of
clauses (iii) and (iv), to the extent that any of the following has not had
and is not reasonably likely to have a United Material Adverse Effect, (i)
neither United nor any of its Subsidiaries has received notice of any claim
of infringement of the rights of others with respect to any patents,
trademarks, service marks, trade names, copyrights or other Intellectual
Property used or owned by United or any of its Subsidiaries, (ii) neither
United nor any of its Subsidiaries has any knowledge that United or any of
its Subsidiaries is infringing upon or otherwise violating, or has
infringed upon or otherwise violated, the rights of any third party with
respect to any patent, trademark, trade name, service xxxx, copyright or
other Intellectual Property, (iii) no current or former employee of United
or any of its Subsidiaries is or was a party to any confidentiality
agreement and/or agreement not to compete that
28
restricts or forbids such employee's performance of any activity that such
employee was hired to perform, and (iv) none of United or any of its
Subsidiaries is currently using or has in the past used without appropriate
authorization, any confidential information or trade secrets of any third
party. Since January 1, 1997, neither United nor any of its Subsidiaries
has received any notice alleging such conduct.
(m) Interested Party Transactions. Except to the extent reflected in the
United 2001 Commission Filings, Section 6.1(m) of the United Disclosure
Schedule lists all transactions between United or any of its Subsidiaries,
on the one hand, and any director, executive officer (or immediate family
member of such director or executive officer) or stockholder of United or
(other than United) any of its Subsidiaries, on the other hand, in which
the amount involved exceeds US $60,000 that is required to be disclosed
pursuant to Item 404 of Regulation S-K under the Exchange Act, other than
transactions required or permitted by this Agreement or the other
Transaction Documents and transactions otherwise disclosed in the United
Disclosure Schedule or pursuant to Contracts so disclosed.
(n) Minute Books. United has made available to Liberty Media copies of
the minute books of United and each of its wholly owned Subsidiaries. Such
minute books contain summaries of all meetings of directors and
shareholders or actions by written consent since the time of the applicable
Person's incorporation or organization, and such summaries are true and
complete in all material respects and reflect all transactions referred to
in such minutes accurately in all material respects.
(o) DGCL Section 203 and Similar Laws. Prior to the execution hereof, the
respective Boards of Directors of United and each of its Subsidiaries
approved each of the transactions contemplated by this Agreement and the
other Transaction Documents to the extent necessary to render inapplicable
thereto the limitations on business combinations contained in Section 203
of the Delaware General Corporation Law and any similar provision of any
other Law.
(p) Company Action. The Board of Directors of United (at a meeting duly
called and held) has by (i) the unanimous vote of the Board of Directors of
United (excluding directors designated by Liberty Media) and (ii) the
unanimous vote of the members of the Board of Directors of United who are
not Founders, Permitted Transferees of a Founder, officers or directors or
designees of Liberty Media or officers or directors of United, voting
separately: (A) determined and declared that this Agreement, the other
Transaction Documents (including the United/New United Merger Agreement)
and the transactions contemplated hereby and thereby (including the
United/New United Merger) are advisable and in the best interests of United
and its stockholders, (B) directed that such transactions (including the
United/New United Merger) be submitted for consideration by United's
stockholders at a special meeting of stockholders, and (C) adopted
resolutions approving this Agreement and the other Transaction Documents
and recommending approval and adoption hereof and thereof and of such
transactions by United's stockholders.
(q) Fairness Opinions. The Board of Directors of United has received the
written opinion of Xxxxxx Xxxxxxx & Co. Inc. ("Xxxxxx Xxxxxxx"),
satisfactory in form, scope and substance to United, as required pursuant
to Section 4.11 of each of the Specified Indentures with respect to the
transactions contemplated by the Stock Purchase Agreements, of even date
herewith, between Liberty UCOMA LLC and United (the "Stock Purchase
Fairness Opinion"). United has provided Liberty Media with a true and
complete copy of the Stock Purchase Fairness Opinion.
(r) Vote Required. The only vote of stockholders of United required under
the DGCL, NASD requirements and the certificate of incorporation and bylaws
of United in order to approve the transactions contemplated by this
Agreement and the other Transaction Documents is the affirmative vote in
favor of the United/New United Merger and the other transactions
contemplated by this Agreement and the other Transaction Documents of a
majority of the total number of votes entitled to be cast by the holders of
the issued and outstanding shares of United Class A Stock and United Class
B Stock voting as a single class, and no other vote or approval of or other
action by the holders of any capital stock of United is required for such
approval or for the consummation of any of the transactions contemplated
hereby or by the other Transaction Documents.
29
(s) No Investment Company. United is not an "investment company" subject
to the registration requirements of, or regulation as an investment company
under, the Investment Company Act of 1940.
(t) Registration Statement; Proxy Statement. The Registration Statement
and the Proxy Statement, except for any information supplied by any Liberty
Party in writing expressly for purpose of inclusion therein, shall not at
the time the Registration Statement is declared effective by the
Commission, on the date the Proxy Statement is first mailed to the
stockholders of United, at the time of the United Stockholders Meeting or
on the Closing Date contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under
which they were made, not misleading.
(u) [Reserved.]
(v) Priority Telecom. Neither United nor any of its Subsidiaries
(including UPC and its Subsidiaries) has taken, or permitted to be taken,
any action to satisfy a Stock Purchase Option (as defined in the Priority
Telecom Shareholders Agreement) through the issuance or delivery of
securities of United or UPC.
6.2 Representations and Warranties of New United. Assuming the accuracy of the
representations and warranties of the Liberty Parties and the Founders contained
in this Agreement and except as disclosed in the Liberty Disclosure Schedule,
New United hereby represents and warrants to the Liberty Parties and the
Founders as follows:
(a) Organization, Good Standing and Authority. Each of New United and its
Subsidiaries (i) is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization, (ii) has all
requisite power and authority to own, lease and operate its properties and
carry on its business as now being conducted, and (iii) is duly qualified
or licensed and in good standing to do business in each jurisdiction in
which the property owned, leased or operated by it or the nature of the
business conducted by it makes such qualification necessary, except where
the failure to be so duly qualified or licensed and in good standing,
individually or in the aggregate, would not have (1) a Material Adverse
Effect on New United and its Subsidiaries, taken as a whole, or (2) a
material adverse effect on the ability of New United to perform its
obligations under, and consummate the transactions contemplated by, this
Agreement and the other Transaction Documents (each of clauses (1) and (2)
above, a "New United Material Adverse Effect"). True and complete copies of
the New United Charter, the New United By-laws, and United/New United
Merger Sub's Certificate of Incorporation (the "United/New United Merger
Sub Charter") and By-laws (the "United/New United Merger Sub By-laws") are
attached hereto as Exhibits 2.1(b)-1, 2.1(b)-2, 6.2(a)-1 and 6.2(a)-2,
respectively. New United has heretofore provided Liberty with true and
complete copies of the Certificate of Incorporation and By-laws of New
United as in effect on the date hereof. Neither New United nor United/New
United Merger Sub is in violation of any of the provisions of its
Certificate of Incorporation or By-laws.
(b) Capital Stock.
(i) The total authorized shares of capital stock of New United consists
solely of one share of Common Stock, par value $0.01 per share
("Existing New United Common Stock"). As of the date hereof there are no
issued or outstanding shares of Existing New United Common Stock other
than one share of Existing New United Common Stock held, beneficially
and of record, by Xxxxxxxxx. As of the date hereof there are no
outstanding subscriptions, options, warrants, puts, calls, trusts
(voting or otherwise), rights, exchangeable or convertible securities or
other commitments or agreements of any nature (other than this Agreement
and the other Transaction Documents) relating to the capital stock or
other securities or ownership interests of New United (including any
phantom shares, phantom equity interests or stock or equity interests or
stock or equity appreciation rights) or obligating New United at any
time or upon the happening of any event, to issue, transfer, deliver,
sell, repurchase, redeem or otherwise acquire, or cause to be issued,
transferred, delivered, sold, repurchased, redeemed or otherwise
acquired, any of its capital stock or any phantom shares, phantom equity
interests or stock or equity appreciation rights, or other ownership
interests of New
30
United or obligating New United to grant, extend or enter into any such
subscription, option, warrant, put, call, trust, right, exchangeable or
convertible security, commitment or agreement. As of immediately prior
to the Closing, the total authorized shares of capital stock of New
United will consist solely of 800,000,000 shares of New United Class A
Stock, 564,075,000 shares of New United Class B Stock, 400,000,000
shares of New United Class C Stock and 10,000,000 shares of Preferred
Stock, par value US $0.01 per share (the "New United Preferred Stock").
No series of New United Preferred Stock will have been designated as of
immediately prior to the Closing. As of immediately prior to the Closing
there will be no issued or outstanding shares of capital stock or other
securities or ownership interests of New United other than one share of
New United Class A Stock held, beneficially and of record, by Xxxxxxxxx.
As of immediately prior to the Closing there will be no outstanding
subscriptions, options, warrants, puts, calls, trusts (voting or
otherwise), rights, exchangeable or convertible securities or other
commitments or agreements of any nature (other than this Agreement and
the other Transaction Documents) relating to the capital stock or other
securities or ownership interests of New United (including any phantom
shares, phantom equity interests or stock or equity appreciation rights)
or obligating New United, at any time or upon the happening of any
event, to issue, transfer, deliver, sell, repurchase, redeem or
otherwise acquire, or cause to be issued, transferred, delivered, sold,
repurchased, redeemed or otherwise acquired, any of its capital stock or
any phantom shares, phantom equity interests or stock or equity
appreciation rights, or other ownership interests of New United or
obligating New United to grant, extend or enter into any such
subscription, option, warrant, put, call, trust, right, exchangeable or
convertible security, commitment or agreement. As of immediately prior
to the Closing, the shares of New United Class A Stock, New United Class
B Stock and New United Class C Stock to be issued pursuant to this
Agreement and the other Transaction Documents will have been duly
authorized, and, when issued, will be validly issued, fully paid,
nonassessable, free of preemptive rights and free of Liens and
Restrictions, other than Liens or Restrictions created by the holder
thereof and restrictions on transfer under federal and state securities
laws. To the knowledge of New United, except as set forth in Section 5.1
of the Founders Disclosure Schedule there are no voting trusts, proxies
or other agreements or understandings with respect to the voting of the
capital stock or ownership interests of New United (other than this
Agreement and the other Transaction Documents).
(ii) The total authorized shares of capital stock of United/New United
Merger Sub consists solely of 15 shares of Class A Common Stock, par
value US $0.01 per share, 15 shares of United/New United Merger Sub
Class B Stock and 3,000 shares of United/New United Merger Sub Class C
Stock. As of the date hereof there are, and as of immediately prior to
the Closing there will be, no issued or outstanding shares of capital
stock or other securities or ownership interests of United/New United
Merger Sub other than 15 shares of United/New United Merger Sub Class B
Stock and 3,000 shares of United/New United Merger Sub Class C Stock all
of which is held by New United. As of the date hereof there are,and as
of the Closing Date there will be, no outstanding subscriptions,
options, warrants, puts, calls, trusts (voting or otherwise), rights,
exchangeable or convertible securities or other commitments or
agreements (other than this Agreement and the other Transaction
Documents) of any nature relating to the capital stock or other
securities or ownership interests of United/New United Merger Sub
(including any phantom shares, phantom equity interests or stock or
equity appreciation rights) or obligating United/New United Merger Sub,
at any time or upon the happening of any event, to issue, transfer,
deliver, sell, repurchase, redeem or otherwise acquire, or cause to be
issued, transferred, delivered, sold, repurchased, redeemed or otherwise
acquired, any of its capital stock or any phantom shares, phantom equity
interests or stock or equity appreciation rights, or other ownership
interests of United/New United Merger Sub or obligating United/New
United Merger Sub to grant, extend or enter into any such subscription,
option, warrant, put, call, trust, right, exchangeable or convertible
security, commitment or agreement. The outstanding shares of United/New
United Merger Sub Class B Stock and United/ New United Merger Sub Class
C Stock are duly authorized, validly issued, fully paid, nonassessable,
free of preemptive rights and free of Liens and Restrictions, other than
as may have been created by
31
this Agreement or the other Transaction Documents and except for
restrictions on transfer under federal or state securities laws.
(c) Power; Authorization and Validity; Consents; No Conflicts.
(i) Each of New United and United/New United Merger Sub has all
requisite power and authority to execute and deliver and perform its
obligations under this Agreement and each other Transaction Document to
be executed and delivered by it pursuant to this Agreement, and to
consummate the transactions contemplated hereby and thereby. The
execution and delivery by such party of this Agreement and the other
Transaction Documents to which it is or will be a party, and, subject to
the satisfaction of the conditions set forth in this Agreement, the
consummation of the transactions contemplated hereby and thereby
(including the United/New United Merger) and the performance by it of
its obligations hereunder and thereunder have been duly authorized by
the respective Boards of Directors of each of New United and United/New
United Merger Sub and by all other requisite corporate action on the
part of such parties. This Agreement has been, and each of the other
Transaction Documents to be executed and delivered by New United or
United/New United Merger Sub will be at or prior to the Closing, duly
and validly executed and delivered by such party. Assuming the due
execution and delivery by the other parties hereto or thereto, this
Agreement constitutes, and each of the other Transaction Documents when
executed and delivered by the applicable of New United or United/New
United Merger Sub will constitute, the legal, valid and binding
obligation of such party, enforceable in accordance with its terms,
except as such enforceability may be affected by applicable bankruptcy,
reorganization, insolvency, moratorium or similar laws affecting
creditors' rights generally or by general equitable principles.
(ii) Except for the requirements under the HSR Act, the filing of the
Certificate of Merger in connection with the United/New United Merger,
the filing of the certificates or articles of merger, as applicable, in
connection with the Founder Newco Mergers, and the Required United
Consents, no consent, approval or waiver of, notice to, or Filing with,
any other Person is required on behalf of New United or any of its
Subsidiaries in connection with the execution, delivery or performance
by New United or United/New United Merger Sub of this Agreement or any
of the other Transaction Documents to which any of them is or will be a
party, or the consummation of the transactions contemplated hereby or
thereby (including the United/New United Merger and the Founder Newco
Mergers), the failure of which to be obtained, given or made,
individually or in the aggregate, would have a New United Material
Adverse Effect. The execution and delivery of this Agreement and the
other Transaction Documents by New United and United/New United Merger
Sub do not, and the performance by them of their respective obligations
hereunder and thereunder will not, (x) violate or conflict with any
provision of the certificate of incorporation, bylaws, operating
agreement or other organizational or governing documents of New United
or any of its Subsidiaries, (y) assuming that the Required United
Consents of Governmental Authorities are obtained, violate any of the
terms, conditions or provisions of any Law, License or Judgment to which
New United or any of its Subsidiaries is subject or by which any of the
foregoing or any of their respective assets are bound, except that no
representation is made with respect to any foreign Law of any
jurisdiction in which neither New United nor United, directly or through
a Subsidiary, owns assets or engages in business, or (z) result in a
violation or breach of, or (with or without the giving of notice or
lapse of time or both) constitute a default (or give rise to any right
of termination, cancellation, amendment, acceleration, repurchase,
prepayment or repayment or to increased payments) under or give rise to
or accelerate any material obligation (including any obligation to, or
to offer to, repurchase, prepay, repay or make increased payments) or
result in the loss or modification of any material benefit under, or
result in a Lien or Restriction on any of the assets of New United or
any of its Subsidiaries pursuant to, any Contract to which New United or
any of its Subsidiaries is a party or by which New United or any of its
Subsidiaries or any of their respective assets is bound, except, in the
case of any Law (other than Delaware law), License or Judgment referred
to in clause (y), as would not have a New United Material Adverse
Effect.
32
(d) Brokers' and Finders' Fees. There is no broker, finder, investment
banker or similar intermediary that has been retained by, or is authorized
to act on behalf of, New United or any of its Subsidiaries or any of their
respective officers or directors who will be entitled to any fee or
commission in connection with this Agreement or upon consummation of the
transactions contemplated hereby.
(e) Legal Proceedings. There is no Judgment outstanding or any Legal
Proceeding by or before any Governmental Authority or any arbitrator
pending or, to New United's knowledge, threatened in writing, against New
United or any of its Subsidiaries that, individually or in the aggregate,
could reasonably be expected to have a New United Material Adverse Effect.
(f) Assets. The assets owned or leased by New United and its Subsidiaries
are suitable and adequate for the conduct of their respective businesses
and New United or the applicable Subsidiary has good and valid title to or
valid leasehold or other contractual interests in all such assets that are
material to its business, taken as a whole, free and clear of all Liens and
Restrictions other than Permitted Encumbrances and Liens the existence of
which does not have and is not reasonably expected to have a New United
Material Adverse Effect. As of the date hereof and as of immediately prior
to the Closing, New United and United/New United Merger Sub have no
material assets other than their rights under this Agreement and the other
Transaction Documents and other than, in the case of New United, the stock
of United/New United Merger Sub, and have not conducted or engaged in any
business other than executing, delivering and performing their respective
obligations under this Agreement and the other Transaction Documents.
(g) Commission Filings; Financial Statements; Liabilities.
(i) All reports, registration statements, proxy or information
statements and other documents filed by New United and its Subsidiaries
with the Commission after the date hereof (each a "New United Commission
Filing") (x) will comply with the Securities Act or the Exchange Act, as
the case may be, and the rules and regulations under each such Act, and
(y) will not at the time they are filed with the Commission contain any
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the
statements made therein, in the light of the circumstances in which they
were made, not misleading.
(ii) Each of the consolidated financial statements (including the notes
thereto) contained in the New United Commission Filings will be prepared
in accordance with GAAP consistently applied (except as may be indicated
in the notes thereto) and Regulation S-X under the Exchange Act and
fairly present the consolidated financial position, results of
operations and cash flows of the registrant and its consolidated
subsidiaries as at the respective dates thereof and for the respective
periods indicated therein, subject in the case of unaudited interim
financial statements to normal recurring year-end adjustments.
(iii) As of the date hereof and as of immediately prior to the Closing,
except for their respective obligations expressly provided for in (A)
this Agreement and the other Transaction Documents to which they are
party, and (B) the agreements described on Schedule 6.2(g)(iii), New
United and United/New United Merger Sub have no, and following the
United/New United Merger, New United and its Subsidiaries will have no,
liability, commitment or obligation of any kind or nature, whether due
or to become due, whether absolute, accrued, fixed or contingent or
otherwise. As of immediately following the Closing, New United and its
Subsidiaries will have no liability, commitment or obligation of any
kind or nature, whether due or to become due, whether absolute, accrued,
fixed or contingent or otherwise, other than (i) in the case of
Subsidiaries of New United, liabilities, commitments and obligations of
Liberty Sub, which liabilities, commitments and obligations were in
existence immediately prior to the Closing and (ii) liabilities,
obligations and commitments of New United expressly provided for in this
Agreement and the other Transaction Documents to which it is a party.
(h) Absence of Certain Developments. Since the date of the most recent
balance sheet included in the Available New United Commission Filings,
other than as otherwise permitted, contemplated or required
33
by this Agreement or the other Transaction Documents, (i) the business of
New United and each of its Subsidiaries has been operated only in the
ordinary course, (ii) no event has occurred and no condition exists that,
individually or together with other events and conditions, has had or,
insofar as New United can reasonably foresee, is reasonably likely to have,
a New United Material Adverse Effect, and (iii) there has been no change in
the accounting methods, practices or policies of New United or any of its
Subsidiaries.
(i) Legal Compliance. New United and its Subsidiaries (x) are in
compliance with, and have conducted their respective businesses so as to
comply with, the terms of their respective Licenses and all applicable
Laws, and (y) have all Licenses that are required to operate their
respective businesses, except in such cases where the failure to so comply
or to have such Licenses, either individually or in the aggregate, has not
had and is not reasonably expected to have a New United Material Adverse
Effect. Without limiting the generality of the foregoing, the operations of
the businesses, assets and facilities of New United and its Subsidiaries
are in compliance with all applicable Environmental and Health Laws, if
any, except where the failure to comply has not had and is not reasonably
expected to have a New United Material Adverse Effect.
(j) Contracts; No Breach. Each of New United and its Subsidiaries has
fulfilled in all material respects, or taken all actions necessary to
enable it to fulfill in all material respects when due, its obligations
under each Contract to which it is a party or by which it or any of its
assets are bound and none of New United or any of its Subsidiaries is in
breach or violation of, or in default (with or without the giving of notice
or lapse of time or both) under, and no circumstance or condition exists
that could give rise to, or permit any other Person to, declare a default
under, any of the Contracts to which it is a party or by which it or its
assets are bound, which breach, violation or default individually or in the
aggregate would reasonably be expected to have a New United Material
Adverse Effect.
(k) Section 203 and Similar Laws. Pursuant to the New United Charter and
the certificate of incorporation of United/New United Merger Sub, neither
Section 203 of the Delaware General Corporation Law nor any similar
provision of any other Law is applicable to business combinations involving
New United or any of its Subsidiaries.
(l) No Investment Company. New United is not, and immediately following
the consummation of the transactions contemplated hereby and by the other
Transaction Documents New United shall not be, an "investment company"
subject to the registration requirements of, or regulation as an investment
company under, the Investment Company Act of 1940.
(m) Registration Statement; Proxy Statement. The Registration Statement
and the Proxy Statement, except for any information supplied by any Liberty
Party in writing expressly for purpose of inclusion therein, shall not at
the time the Registration Statement is declared effective by the
Commission, on the date the Proxy Statement is first mailed to the
stockholders of United, at the time of the United Stockholders Meeting or
on the Closing Date contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under
which they were made, not misleading.
ARTICLE VII
CERTAIN COVENANTS OF THE PARTIES
7.1 Conduct of Business in Ordinary Course Pending Closing. From the date
hereof until the Closing or earlier termination of this Agreement:
(a) Except (1) for taking such actions or engaging in such transactions as
may be required or permitted by this Agreement, (2) as otherwise disclosed
herein, and (3) with the prior written consent of United (which consent
shall not be unreasonably withheld, except in the case of any action
described in clause (i) below (with respect to which United may choose to
grant or withhold its consent in its sole discretion)), Liberty shall: (i)
not take or omit to take any action that would or could reasonably be
34
expected to result in the failure of the conditions precedent set forth in
this Agreement to the parties' obligations to consummate the transactions
contemplated hereby and by the other Transaction Documents to be satisfied;
and (ii) not knowingly take any other action that would cause any of the
representations and warranties of the Liberty Parties set forth in this
Agreement to be untrue in any material respect if then made. Liberty Media
shall promptly after obtaining knowledge thereof notify United of the
occurrence of any event that has had or is reasonably likely to have a
Liberty Material Adverse Effect.
(b) Except (1) for taking such actions or engaging in such transactions as
may be required or permitted by this Agreement, (2) as described in Section
7.1(b) of the United Disclosure Schedule or as contemplated by Section
7.1(f) of this Agreement, and (3) with the prior written consent of Liberty
(which consent shall not be unreasonably withheld, except for any of the
following matters (with respect to which Liberty may choose to grant or
withhold its consent in its sole discretion): (A) any action by or
involving New United or any of its Subsidiaries and (B) any action
described in clause (v), (ix), (x) or (xiii) below), United shall, and
shall use all commercially reasonable efforts to cause those of its
Subsidiaries that are Controlled Affiliates to, and New United shall, and
shall cause its Subsidiaries to: (i) carry on their respective businesses
in the ordinary course consistent with past practice, (ii) except, in the
case of United and its Controlled Affiliates, pursuant to Partner's
Purchase Rights and except, in the case of United and its Controlled
Affiliates, for transfers among Controlled Affiliates of United or in the
ordinary course of business consistent with past practice, not sell, lease,
transfer or dispose of (including by way of dividend or distribution), or
create any Lien (other than, in the case of United and its Controlled
Affiliates, (A) the creation of any Lien on the assets of Subsidiaries of
United if United or any wholly owned Subsidiary of United is the sole
beneficiary of such Lien, (B) the creation of Permitted Encumbrances, (C)
the imposition of a Lien on any asset acquired after the date hereof by
United or any of its Subsidiaries, but only to the extent that the
imposition of such Lien on such asset is required by the terms of any
Contract evidencing secured indebtedness of United or its Subsidiaries and
disclosed in the United 2001 Commission Filings, as such terms were
disclosed in the United 2001 Commission Filings and (D) in the case of any
United Public Company and its Subsidiaries, Liens permitted by clause
(xi)(A)(5) below) on, any of their assets of substantial value, either
individually or in the aggregate; (iii) notify Liberty promptly of any
inquiry or proposal concerning any sale, lease, transfer or other
disposition referred to in clause (ii) above; (iv) not amend or modify in
any material respect any material United Investment Agreement (except for
amendments or modifications disclosed in Section 6.1(f)(i) of the United
Disclosure Schedule) or, except in the ordinary course of business
consistent with past practice, if any, any other material Contract; (v) not
(A) amend, modify or waive any provision of the United/New United Merger
Agreement, (B) amend or modify United's certificate of incorporation or
bylaws (except (1) pursuant to the United/New United Merger as contemplated
by the United/ New United Merger Agreement and (2) for the filing of the
Series E Certificate of Designation in the form attached hereto as Exhibit
6.1(b)), (C) amend or modify the New United Charter or New United By-laws,
(D) amend or modify the United/New United Merger Sub Charter or the
United/New United Merger Sub By-laws, (E) amend, modify or waive any
provision of any Subscription Agreement (and United shall not issue, or
agree to issue, any shares of United Series E Preferred Stock other than
pursuant to the Subscription Agreements as required by Section 2.1(c) of
this Agreement), any Founder Newco Merger Agreement or any other
Transaction Document, or (F) authorize or approve any of the foregoing;
(vi) except in the case of United and its Controlled Affiliates, for
acquisitions in existing or related lines of business of the Person making
such acquisition and for transactions permitted by clause (ii) above, not
acquire by merging or consolidating with, or by purchasing a substantial
portion of the assets of, or by any other manner, any business or any
corporation, partnership, limited liability company, association or other
business organization or division thereof; (vii) except, (A) in the case of
United, for the declaration, setting aside or payment of regular dividends
as provided by the terms of the United Preferred Stock outstanding on the
date hereof and, (B) in the case of a Subsidiary of United, for the
declaration, setting aside or payment of dividends to United or a wholly
owned Subsidiary thereof or pro rata to the stockholders of the Subsidiary
declaring, setting aside or paying such dividend or distribution, not
declare, set aside or pay any dividend or other distribution, not effect or
authorize any
35
recapitalization or similar transaction and not directly or indirectly
redeem, retire, purchase or otherwise acquire any of its capital stock or
other equity securities or options, warrants or rights to acquire any of
its capital stock or other equity securities; (viii) not effect or
authorize any stock split (other than stock splits by wholly owned
Subsidiaries of United or by wholly owned Subsidiaries of UPC), reverse
split (other than reverse splits by wholly owned Subsidiaries of United or
by UPC or Priority Telecom, but in the case of UPC or Priority Telecom only
to the extent necessary for the equity securities of either such Person to
remain listed for trading on The NASDAQ National Market or the Amsterdam
Stock Exchange, and only to the extent such reverse split by UPC or
Priority Telecom may be and is effected in compliance with any requirements
of applicable Law and any applicable Contracts evidencing or securing any
outstanding indebtedness or pursuant to which any such outstanding
indebtedness was incurred), stock dividend or combination involving any of
its capital stock or other equity securities (except for such transactions
among United and its wholly owned Subsidiaries and among UPC and its wholly
owned Subsidiaries) or issue or sell or agree to issue or sell any of its
capital stock or other equity securities or issue, sell, grant or agree to
issue, sell or grant any options, warrants or rights to acquire any of its
capital stock or other equity securities (except for such transactions
among United and its wholly owned Subsidiaries and among UPC and its wholly
owned Subsidiaries), or any phantom shares, phantom equity interests or
stock or equity appreciation rights, that would cause (A) any of United's
representations in Section 6.1(b) to be untrue in any material respect if
then made, (B) any of United's representations in Section 6.1(f)(i) to be
untrue in any material respect if then made, except in each case in this
clause (B) for (1) such issuances or sales by immaterial Subsidiaries and
(2) such issuances or sales that will not result in any material dilution
of United's direct or indirect interest in such Subsidiary or any loss of
material rights or any imposition of material penalties relating to such
interest or (C) any of New United's representations in Section 6.2(b) to be
untrue in any respect if then made; (ix) not engage in any material
transaction with any Founder or any family member or Affiliate of a
Founder, any director or officer of United or any of its Subsidiaries, or
any family member or Affiliate of such director or officer, or any other
Affiliate of United, but excluding employee matters in the ordinary course
of business and not in violation of any other covenant made in this
Agreement and the other Transaction Documents (for purposes of this clause
(ix) only, an "Affiliate" of a Founder or of a director or officer of
United or of United shall not include United, New United or any of their
respective Controlled Affiliates); (x) (A) in the case of United and its
Controlled Affiliates, not engage in any material transaction with New
United or any of its Controlled Affiliates and (B) in the case of New
United and its Controlled Affiliates, not engage in any material
transaction with United or any of its Controlled Affiliates, (xi) (A) in
the case of United and its Subsidiaries that are Controlled Affiliates, not
incur any indebtedness for borrowed money (including any Refinancing
Indebtedness that does not satisfy the proviso set forth in clause (5)
below) if the principal amount or accreted value of such indebtedness,
taken together with the aggregate principal amount or accreted value of all
other indebtedness incurred after the date hereof by United or any of its
Subsidiaries that are Controlled Affiliates, exceeds US $50,000,000 other
than (1) drawings under existing fixed or revolving credit facilities, (2)
the accretion of indebtedness under bonds, notes and other instruments
outstanding on the date hereof, (3) net obligations under interest rate or
currency swap arrangements, (4) intercompany indebtedness to United or
between United's Subsidiaries and (5) in the case of a United Public
Company and its Subsidiaries, indebtedness ("Refinancing Indebtedness")
incurred to refinance outstanding indebtedness ("Refinanced Indebtedness")
(provided that (a) the Refinancing Indebtedness has an average life and
final maturity no shorter than the average life and final maturity of the
applicable Refinanced Indebtedness, (b) the principal amount or accreted
value of the Refinancing Indebtedness is no greater than the principal
amount, plus accrued interest, or accreted value of the applicable
Refinanced Indebtedness, (c) the Refinancing Indebtedness is incurred by
the same Person that is the obligor of the applicable Refinanced
Indebtedness and is not guaranteed by any Person other than the guarantor,
if any, of the Refinanced Indebtedness and (d) the repayment of the
Refinancing Indebtedness is not secured by Liens on any assets other than
assets securing the repayment of the applicable Refinanced Indebtedness)
and (B) in the case of New United and its Subsidiaries, not incur any
liability, obligation or commitment of any kind or nature, whether due or
to become due, whether absolute, accrued, fixed or contingent or otherwise;
(xii) not take any action that would violate, conflict with or constitute a
breach of Section 3(b) of the Stockholders Agreement, Section 2(a) of the
36
New United Covenant Agreement or Sections 2(a) or (b) of the United/Liberty
Agreement, in each case to the same extent as though the applicable
agreement had been executed and delivered by the parties thereto on the
date hereof; (xiii) not take or omit to take any action that would or could
reasonably be expected to result in the failure of the conditions precedent
set forth in this Agreement and the other Transaction Documents to the
parties' obligations to consummate the transactions contemplated hereby and
by the other Transaction Documents to be satisfied; and (xiv) not knowingly
take any other action that would result in the representations and
warranties of United or New United set forth in this Agreement to be untrue
in any material respect if then made. Nothing contained in the foregoing
shall preclude United or any of its Subsidiaries or Controlled Affiliates
from disposing of immaterial (both individually and in the aggregate)
assets in the ordinary course of business consistent with past practice.
Notwithstanding anything in the foregoing to the contrary, nothing
contained in this Section 7.1(b) shall be deemed to (1) restrict United,
UPC, United A/P, UPC Polska, Inc. or Poland Communications, Inc. or any of
their respective "Subsidiaries" and "Restricted Affiliates" (as such terms
are defined in the indentures to which these Persons are party) from taking
any action if and to the extent that such a restriction would violate the
indentures binding on such Persons or (2) restrict UPC or any of its
Subsidiaries from taking any action if and to the extent that such a
restriction would violate the Belmarken Loan Agreements or UPC's Senior
Secured Credit Facility dated as of October 26, 2000. United shall promptly
after obtaining knowledge thereof notify Liberty of the occurrence of any
event that individually or together with any other event has had or is
reasonably likely to have a United Material Adverse Effect or New United
Material Adverse Effect.
(c) Except as expressly contemplated by Section 2.1(a) hereof and except
with the prior written consent of each of United and the Liberty Parties,
no Founder or Founder Newco shall sell, transfer or otherwise dispose of or
create any Lien or Restriction on any limited liability company membership
interest in any Founder Newco or any of the shares of United Class B Stock
or, in the case of a Founder Newco, United Class A Stock owned by it or any
interest therein, or take or omit to take any action that would or could
reasonably be expected to result in the failure of the conditions precedent
set forth in this Agreement to the parties' obligations to consummate the
transactions contemplated hereby and by the other Transaction Documents to
be satisfied. Each Founder shall promptly after obtaining knowledge thereof
notify each of United and the Liberty Parties of the occurrence of any
event that has had or is reasonably likely to have a Founder Material
Adverse Effect with respect to such Founder.
(d) Each party hereto shall promptly give written notice to the others
upon becoming aware of the occurrence or, to its knowledge, impending or
threatened occurrence, of any event that is reasonably likely to cause or
constitute a breach of any of its representations, warranties or covenants
hereunder as if its representations or warranties were then being made.
(e) United shall not, and shall not permit any of its Subsidiaries to,
take any action to satisfy a UPC Stock Purchase Option (as defined in the
Priority Telecom Shareholders Agreement) through the issuance or delivery
of securities of United or any of its Subsidiaries (including UPC but
excluding Priority Telecom) without the prior written consent of Liberty.
(f) United shall take or cause to be taken such action as may be necessary
to ensure that any default under or acceleration of any of the liabilities
of United A/P or any of its Subsidiaries, or a bankruptcy or similar event
involving United A/P or any of its Subsidiaries, at any time (whether
before or at any time after the Closing) would not (with or without the
giving of notice or lapse of time or both) result in the acceleration of,
or give rise to the right to accelerate, any of the indebtedness of United
or any of its Subsidiaries. Without limiting the generality of the
foregoing, the parties acknowledge that the covenant set forth in this
Section 7.1(f) shall not be satisfied if any Contract (including any
Contract evidencing or relating to indebtedness) to which United A/P or any
of its Subsidiaries is or becomes a party or pursuant to which any of their
respective assets are or become bound restricts in any manner the actions
of, or imposes any obligation, liability or commitment on, New United or
any of its Subsidiaries or United or any of its Subsidiaries except, in the
case of United and its Subsidiaries, as disclosed on Schedule 7.1(f). For
purposes of this Section 7.1(f), the Subsidiaries of United A/P shall
include Austar United Communications Limited and its Subsidiaries.
37
(g) United shall take or cause to be taken such action as may be necessary
to exempt the Liberty Parties and their respective Affiliates from the
effect of any Contract among only United and one or more of its Controlled
Affiliates or among only Controlled Affiliates of United (i) that purports
to or would bind any of the Liberty Parties or any of their respective
Affiliates after giving effect to the transactions contemplated hereby or
(ii) in respect of which, whether before or after giving effect to the
transactions contemplated hereby, any act or omission of any of the Liberty
Parties or any of their respective Affiliates would result in a violation
or breach thereof, or constitute (with or without due notice or lapse of
time or both), or permit any Person to declare, a default or event of
default thereunder, or give rise to any right of termination, cancellation,
amendment, acceleration, repurchase, prepayment or repayment or to
increased payments thereunder, or give rise to or accelerate any obligation
(including, without limitation, any obligation to, or to offer to,
repurchase, prepay, repay or make increased payments) or result in the loss
or modification of any rights or benefits thereunder, or result in any Lien
or Restriction on any of the assets of, or otherwise have any adverse
effect on, United or any of its Affiliates.
(h) Options to purchase not more than 17,500,000 shares of United Common
Stock ((1) which number (A) includes, and is not in addition to, the
options granted subject to stockholder approval as described in paragraph
B.1. of Section 6.1(b) of the United Disclosure Schedule, except to the
extent any such options are cancelled, and the Class B Options described in
paragraph B.2. of Section 6.1(b) of the United Disclosure Schedule and (B)
shall be reduced by the number of shares of United Class A Stock underlying
any options granted after August 31, 2001 to the date of this Agreement,
all of which options United represents and warrants comply with the
provisions of this Section 7.1(h) (including with respect to the exercise
prices thereof) and (2) which, except for any Class B Options described in
paragraph B.2. of Section 6.1(b) of the United Disclosure Schedule, may
only be options to purchase shares of United Class A Stock) (and no stock
appreciation rights, restricted stock awards or any other grants under
United's 1993 Stock Option Plan or otherwise other than such options to
purchase shares of Common Stock) may be granted, provided that any such
option shall have a per share exercise price equal to or greater than
either (x) the per share average of the Closing Prices for New United Class
A Stock for the 30 consecutive Trading Days beginning on and including the
first Trading Day following the Closing Date or (y) $5.00 per share (unless
a higher price is required pursuant to the terms of the relevant United
Stock Option Plan). Any such option shall specify (which specification
shall not be subject to change for any reason whatsoever), at the time of
the grant thereof, whether the exercise price thereof shall be as set forth
in clause (x) or (y) of the previous sentence.
(i) United shall promptly provide and shall use commercially reasonable
efforts to cause United A/P to promptly provide, Liberty with true and
complete copies of any notices or correspondence received by United or any
of its subsidiaries or by United A/P or any of its subsidiaries relating to
any default, acceleration or breach of, or potential default, acceleration
or breach of, or dispute regarding, any material Contract evidencing or
securing any outstanding indebtedness of United or any of its subsidiaries
or United A/P or any of its subsidiaries or pursuant to which any such
outstanding indebtedness was incurred.
7.2 Stockholders Meeting. United shall call a meeting of its stockholders (the
"United Stockholders Meeting") to be held as promptly as practicable for the
purpose of considering and voting upon the United/ New United Merger and each
other matter required to be approved by such stockholders in connection with the
transactions contemplated hereby or by the other Transaction Documents, and
shall submit the same to its stockholders for their approval. United will,
through its Board of Directors, recommend to its stockholders the approval of
the United/New United Merger and each such other matter and United will use its
best commercially reasonable efforts to solicit proxies in favor of the
United/New United Merger and each such other matter and otherwise to secure the
required vote of its stockholders. Each of the Founders and Liberty Global will
vote all shares of United's capital stock owned by them for the approval of the
United/New United Merger and each such other matter. Liberty Global will not
transfer record or beneficial ownership of any United Class B Stock prior to the
Closing except to a Controlled Affiliate of Liberty and unless the transferee,
simultaneous with such transfer, executes a counterpart to this Agreement and
thereupon becomes bound hereby to the same extent as Liberty Global (including
the obligation, subject to the satisfaction or waiver of
38
the terms and conditions of this Agreement, to take any actions that Liberty
Global is required to take at the Closing). No amendment to or modification or
waiver of any of the provisions of any of the Transaction Documents shall be
authorized, recommended or approved without the prior written consent of the
Liberty Parties.
7.3 Proxy Statement; Registration Statement; Other Commission Filings.
(a) As soon as reasonably practicable after the execution of this Agreement,
New United shall file with the Commission an amended registration statement on
Form S-4 (the "Registration Statement"), containing a form of prospectus that
includes the definitive proxy statement for the United Stockholders Meeting
(together with any amendments thereof or supplements thereto, the "Proxy
Statement"), registering under the Securities Act the shares of New United Class
A Stock issuable pursuant to the United/New United Merger and the shares of New
United Class A Stock issuable upon conversion of shares of New United Class B
Stock and New United Class C Stock issuable in connection with the transactions
contemplated by this Agreement and the other Transaction Documents (including
upon conversion of shares of New United Class B Stock issuable upon conversion
of shares of New United Class C Stock). The Registration Statement shall be in
form and substance reasonably satisfactory to the parties and shall include a
reasonable description of the Senior Notes Agreements and the actions taken in
order to satisfy the Fee Letter Condition. United and New United shall respond
promptly to any comments of the Commission and shall use all commercially
reasonable efforts to cause the Proxy Statement to be cleared by the Commission
and the Registration Statement to be declared effective as promptly as
practicable after such filing. Following the effectiveness of the Registration
Statement, United shall promptly mail the definitive Proxy Statement to its
stockholders. Each of United and New United will notify the Liberty Parties
promptly of the receipt of any comments from the Commission or its staff or any
other government officials and of any request by the Commission or its staff or
such other government officials for amendments or supplements to the
Registration Statement, the Proxy Statement or any filing incorporated therein
or for additional information, and will supply the Liberty Parties with copies
of all correspondence between it and any of its representatives, on the one
hand, and the Commission or its staff or any other government officials on the
other hand, with respect to the Registration Statement, the Proxy Statement, the
transactions contemplated by this Agreement and the other Transaction Documents
or any filing with the Commission relating thereto. Whenever any party hereto
becomes aware of any event that is required to be set forth in an amendment or
supplement to the Proxy Statement, the Registration Statement or any other
filing with the Commission in connection with this Agreement, the other
Transaction Documents or the transactions contemplated hereby or thereby, such
party shall promptly inform the other parties of such occurrence. United and New
United shall promptly prepare and file with the Commission any such amendment or
supplement and, following clearance thereof, if applicable, mail such amendment
or supplement to United's stockholders. United and New United shall cause the
Proxy Statement, the Registration Statement and all other of their respective
filings with the Commission with respect to this Agreement, the other
Transaction Documents or the transactions contemplated hereby or thereby to
comply in all material respects with the applicable provisions of the Securities
Act and the Exchange Act. To the extent information regarding any Liberty Party
or any of their respective Subsidiaries is required for the preparation of the
Proxy Statement or Registration Statement, the Liberty Parties shall promptly
provide such information to United and New United upon request.
(b) Until consummation of the transactions contemplated by this Agreement and
the other Transaction Documents or earlier termination of this Agreement, United
and New United, as applicable, shall each timely file all reports, registration
statements, proxy or information statements and other documents required to be
filed by it with the Commission after the date hereof, each of which filings
shall comply with all applicable requirements of the Securities Act and the
Exchange Act and the rules and regulations of the Commission under each such
Act. United and New United shall each promptly provide Liberty Media and its
counsel with copies of all filings with the Commission made by such party after
the date hereof and prior to the consummation of the transactions contemplated
by this Agreement and the other Transaction Documents or earlier termination of
this Agreement.
39
7.4 No Solicitation; Acquisition Proposals.
(a) [Reserved]
(b) Prior to consummation of the transactions contemplated by this Agreement
and the other Transaction Documents or earlier termination of this Agreement,
United and the Founders will not, and United will use its commercially
reasonable efforts to cause each of its Subsidiaries not to, directly or
indirectly, through any officer, director, employee, representative, agent, or
financial advisor, solicit, initiate or encourage inquiries or submission of
proposals or offers from any Person relating to any sale of all or any
substantial portion of the assets of or any equity interest in United, New
United or any of their respective Subsidiaries or any business combination with
United, New United or any of their respective Subsidiaries whether by merger,
purchase of assets, tender offer or otherwise or participate in any negotiation
regarding, or furnish to any other Person any information with respect to, or
otherwise cooperate in any way with, or assist in, facilitate or encourage, any
effort or attempt by any other Person to do or seek to do any of the foregoing,
in each case except as permitted by or disclosed pursuant to this Agreement
(including Section 7.1(b) of the United Disclosure Schedule) or with the prior
written consent of the Liberty Parties (which consent, in the case of any United
Public Company, shall not be unreasonably withheld). Each Founder will vote all
shares of voting stock in United beneficially owned by it, and United will vote
or cause to be voted all shares of its Subsidiaries beneficially owned by it,
against any transaction of the nature described above that is presented to it.
Each Founder and United or New United, as applicable, will notify the Liberty
Parties immediately if any inquiries or proposals are received by, any
information is requested from, or any negotiations or discussions are sought to
be initiated or continued with any Founder, United or New United, as applicable,
or any of their respective Subsidiaries, in each case in connection with any of
the foregoing. Each of the Founders and United shall use its best efforts to
cause all confidential materials previously furnished by it or on its behalf to
any third parties in connection with any of the foregoing to be promptly
returned to it and shall cease, or cause United and its Subsidiaries to cease,
any negotiations conducted in connection therewith.
7.5 Consents and Approvals.
(a) Subject to the terms and conditions of this Agreement and applicable law,
each of the parties hereto shall use its commercially reasonable efforts to
take, or cause to be taken, all actions and to do, or cause to be done, all
things reasonably necessary, proper or advisable to consummate and make
effective the transactions contemplated by this Agreement and the other
Transaction Documents as soon as reasonably practicable, including such actions
or things as any other party hereto may reasonably request in order to cause any
of the conditions to such party's obligation to consummate such transactions
specified in this Agreement to be fully satisfied. Without limiting the
generality of the foregoing, each of the parties hereto shall (and each shall
cause its directors, officers and Subsidiaries, and use its reasonable efforts
to cause its Affiliates, employees, agents, attorneys, accountants and
representatives, to) consult and fully cooperate with and provide reasonable
assistance to each other in (i) the preparation and filing with the Commission
of the Registration Statement, the Proxy Statement and any necessary amendments
or supplements to any of the foregoing; (ii) seeking to have such Proxy
Statement cleared by the Commission and such Registration Statement declared
effective by the Commission, in each case as soon as reasonably practicable
after filing thereof; (iii) taking such actions as may reasonably be required
under applicable state securities or blue sky laws in connection with the
transactions contemplated by this Agreement and the other Transaction Documents;
(iv) using its best commercially reasonable efforts to obtain all required
consents, approvals, waivers, licenses, permits, authorizations, registrations,
qualifications, or other permissions or actions by, and to give all required
notices to and to make all required Filings with and applications and
submissions to, any Governmental Authority or other Person, in each case
required in order to cause any of the conditions to each other party's
obligation to consummate such transactions to be fully satisfied; (v) filing all
pre-merger notification and report forms required under the HSR Act and
responding to any requests for additional information made by any Governmental
Authority pursuant to the HSR Act and cooperating with each other party in
complying with the requirements of the HSR Act; (vi) using commercially
reasonable efforts to cause the lifting of any permanent or preliminary
injunction or restraining order or other similar order issued or entered by any
court or other Governmental Authority (an "Injunction") preventing the
consummation of the transactions contemplated hereby or by the other Transaction
Documents; (vii) providing all such information about such
40
party, its Subsidiaries and its officers, directors, partners and Affiliates,
and making all applications and filings, as may be necessary or reasonably
requested in connection with any of the foregoing; (viii) using commercially
reasonable efforts to obtain the tax opinions referred to in Sections 10.1(b),
11.6 and 12.5; and (ix) in general, using commercially reasonable efforts to
consummate and make effective the transactions contemplated hereby.
Notwithstanding the foregoing, in making any such Filing and in order to obtain
any consent, approval, waiver, license, permit, authorization, registration,
qualification, or other permission or action or the lifting of any Injunction
referred to in the preceding sentence, (A) the parties and their respective
Affiliates shall not be required to (i) pay any consideration, except filing
fees; (ii) surrender, modify or amend in any respect any License or Contract
(including this Agreement), (iii) hold separately (in trust or otherwise),
divest itself of, or otherwise rearrange the composition of, any of its assets,
(iv) agree to any limitations on any such Person's freedom of action with
respect to future acquisitions of assets or with respect to any existing or
future business or activities or on the enjoyment of the full rights of
ownership, possession and use of any asset now owned or hereafter acquired by
any such Person, or (v) agree to any of the foregoing or any other conditions or
requirements of any Governmental Authority or other Person, in each case to the
extent that doing so would be adverse or burdensome to such Person in any
material respect. Prior to making any application to or filing with any
Governmental Authority or other Person in connection with this Agreement, each
party shall provide the other parties with drafts thereof and afford the other
parties a reasonable opportunity to comment on such drafts.
(b) The parties will cooperate with and assist one another in any challenge by
any party of the applicability to the transactions contemplated hereby (or by
the other Transaction Documents) of any state takeover law (or similar Laws of
any other jurisdiction) and, if any additional steps are necessary, will take
all reasonable steps to exempt the transactions contemplated hereby or by the
other Transaction Documents from any applicable state takeover law or similar
Law of any other jurisdiction.
(c) Without limiting the generality of Section 7.5(a), United and New United
shall cooperate with Liberty and its Affiliates to, at any time before or after
the Closing, at Liberty or LMI's request, obtain the approvals described in
footnote 1 to Section 6.1(c)(ii) of the United Disclosure Schedule.
7.6 Tax-Free Exchange. Each of the parties (a) shall use all reasonable
efforts to cause each of the transactions contemplated by Sections 2.2 and 2.5
of this Agreement to qualify as a tax-free exchange under Section 351 of the
Code, (b) will cooperate with the other parties to modify the structure of such
transactions if and to the extent necessary for each of such transactions to
constitute a tax-free exchange or a tax-free reorganization, (c) will not take
any action, and will not permit any of its Controlled Affiliates to take any
action, that would cause any of the transactions contemplated by Sections 2.2
and 2.5 of this Agreement not to qualify as a tax-free exchange under Section
351 of the Code, and (d) will cooperate with the accounting or law firms that
are to render the opinions referred to in Sections 10.1(b), 11.6 and 12.5 by
providing appropriate certifications as to factual matters. Following the
Closing, each party will report (or cause to be reported) each of the
transactions contemplated by Sections 2.2 and 2.5 of this Agreement as a
tax-free exchange under Section 351 of the Code on all tax returns and other tax
filings. Further, from and after the Closing the parties will continue to take
such actions as may be necessary to preserve the tax-free nature of each of the
transactions contemplated by Sections 2.2 and 2.5 of this Agreement and will not
take any action or permit any of its Controlled Affiliates to take any action
that would have the effect of disqualifying any of the transactions contemplated
by Sections 2.2 and 2.5 of this Agreement as a tax-free exchange under Section
351.
7.7 Stockholders Agreement. At the Closing, New United, each Founder, Liberty
and Liberty Global shall execute and deliver a Stockholders Agreement
substantially in the form attached hereto as Exhibit 7.7 (the "Stockholders
Agreement").
7.8 Voting Agreement. At the Closing, New United and each Founder shall
execute and deliver a Voting Agreement substantially in the form attached hereto
as Exhibit 7.8 (the "Voting Agreement").
7.9 United/Liberty Agreement. At the Closing, United, Liberty and Liberty
Global shall execute and deliver an agreement substantially in the form attached
hereto as Exhibit 7.9 (the "United/Liberty Agreement").
41
7.9A New United Covenant Agreement. At the Closing, New United, Liberty and
Liberty Global will execute and deliver the Agreement Regarding Additional
Covenants substantially in the form attached hereto as Exhibit 7.9A (the "New
United Covenant Agreement").
7.9B. No Waiver Agreement. At the Closing, New United, Liberty and LMI will
execute and deliver the No Waiver Agreement.
7.10 Standstill Agreement. At the Closing, New United, Liberty and Liberty
Global shall execute and deliver a Standstill Agreement substantially in the
form attached hereto as Exhibit 7.10 (the "Standstill Agreement").
7.11 Registration Rights Agreement. At the Closing, New United, Liberty and
Liberty Global shall execute and deliver a Registration Rights Agreement
substantially in the form attached hereto as Exhibit 7.11 (the "Registration
Rights Agreement").
7.12 Exchange Agreement; Preferred Exchange Agreement. At the Closing, (a)
United and each Founder that is a Controlling Principal and that purchased
shares of United Series E Preferred Stock as contemplated by Section 2.1(c) (any
such Person, a "Series E Holder") shall execute and deliver an Exchange
Agreement substantially in the form attached hereto as Exhibit 7.12(a) (the
"Exchange Agreement") and (b) United and New United shall execute and deliver a
Preferred Exchange Agreement having terms substantially as set forth on Exhibit
7.12(b) hereto (the "Preferred Exchange Agreement") and otherwise reasonably
acceptable to United, New United and Liberty.
7.13 Listing Application. New United shall apply to list for trading on the
National Market tier of The Nasdaq Stock Market the shares of New United Class A
Stock issuable in the United/New United Merger and upon conversion of the shares
of New United Class B Stock and New United Class C Stock issuable in connection
with the transactions contemplated by this Agreement and the other Transaction
Documents (including upon conversion of shares of New United Class B Stock
issuable upon conversion of shares of New United Class C Stock), and will use
all commercially reasonable efforts to cause such listing to be effective as of
the Closing.
7.14 Investigation; Confidentiality.
(a) From the date hereof until the Closing or earlier termination of this
Agreement, upon reasonable notice and subject to the waiver of confidentiality
obligations to third parties, each party hereto will, and will cause its
Controlled Affiliates to, (i) permit the other parties hereto and their
respective financial advisors and accounting and legal representatives to
conduct an investigation and evaluation of (x) in the case of United, Liberty
Sub and its business, and (y) in the case of the Liberty Parties, United, New
United and their respective Subsidiaries and their respective businesses, (ii)
provide such assistance as is reasonably requested and (iii) give access at
reasonable times to the properties, books, Contracts, commitments, records and
other information of, related to or concerning the businesses, assets,
operations and personnel of such Persons. Such access and any information
obtained by a party in connection with such investigation shall not affect or in
any way limit the effectiveness of any representation, warranty, covenant or
agreement made by any other party pursuant to this Agreement or any of the other
Transaction Documents.
(b) Each of United and New United agrees that pending consummation in full of
the transactions contemplated by this Agreement and the other Transaction
Documents, it and its Controlled Affiliates shall, and shall use commercially
reasonable efforts to cause their respective directors, officers, employees and
authorized representatives to, (i) hold in strict confidence all data and
information obtained by any of them pursuant hereto or in connection herewith or
in connection with the matters contemplated by the Letter Agreement from the
Liberty Parties, any of their respective Affiliates or their respective
authorized representatives (unless such information is or otherwise becomes
(through no breach of this covenant) public or readily ascertainable from public
or published information) and (ii) use all such data and information solely for
the purpose of consummating the transactions contemplated hereby and, except as
required by applicable Law or legal process or by the rules, regulations or
policies of The New York Stock Exchange, The Nasdaq Stock Market, the Stock
Market of Euronext Amsterdam or the Australian Stock Exchange shall not,
42
and shall use its diligent efforts to ensure that such directors, officers,
employees and authorized representatives do not, disclose such information to
others without the prior written consent of Liberty.
(c) Each Liberty Party agrees that pending consummation in full of the
transactions contemplated by this Agreement and the other Transaction Documents
and at all times thereafter, it and its Controlled Affiliates shall, and shall
use commercially reasonable efforts to cause their respective directors,
officers, employees and authorized representatives to, (i) hold in strict
confidence all data and information obtained by any of them pursuant hereto or
in connection herewith from United, any of its Affiliates or its authorized
representatives (unless such information is or otherwise becomes (through no
breach of this covenant) public or readily ascertainable from public or
published information) and (ii) use all such data and information solely for the
purpose of consummating the transactions contemplated hereby and, except as
required by applicable law or legal process or by the rules of The New York
Stock Exchange or The Nasdaq Stock Market, shall not, and shall use its diligent
efforts to ensure that such directors, officers, employees and authorized
representatives do not, disclose such information to others without the prior
written consent of United.
(d) If this Agreement is terminated, each of the Liberty Parties, on the one
hand, and United and New United, on the other, agree to (i) return or destroy
promptly, as and if so requested by the other parties, each and every document
furnished to it by the other parties or any Affiliate of such other parties, in
connection with the transactions contemplated hereby or by the other Transaction
Documents and any copies thereof that may have been made and to cause its
representatives and any representatives of others to whom such documents were
furnished promptly to return or destroy, as applicable, such documents and any
copies thereof any of them may have made, other than documents that are publicly
available, and (ii) refrain, and to use diligent efforts to cause its directors,
officers, employees and representatives to refrain, from using any of the data
or information referred to in subsection (b) or (c), as the case may be, for any
purpose.
7.15 [Reserved].
7.16 [Reserved.]
7.17 [Reserved.]
7.18 [Reserved.]
7.19 [Reserved.]
7.20 UPC Bonds. Except with the prior written consent of United (prior to
Closing) or New United (after the Closing) (which shall not, either in the case
of United or New United, be unreasonably withheld), from the date hereof until
the earlier of the termination of this Agreement and the first anniversary of
the Closing, Liberty will not, and will use commercially reasonable efforts to
cause each of its Controlled Affiliates not to, directly or indirectly purchase
or offer or agree to purchase any additional debt securities issued by UPC and
outstanding as of the date hereof. Except with the prior written consent of
Liberty (which shall not be unreasonably withheld) from the date hereof until
the earlier of the termination of this Agreement and the first anniversary of
the Closing, each of United and New United will not, and will use commercially
reasonable efforts to cause each of its Controlled Affiliates not to, directly
or indirectly purchase or offer or agree to purchase any debt securities issued
by UPC and outstanding on the date hereof.
7.21 Senior Secured Notes. Except with the prior written consent of Liberty
(which shall not be unreasonably withheld) and except, in the case of United, as
expressly required by the Senior Secured Indenture, from the date hereof until
the earlier of the termination of this Agreement and the first anniversary of
the Closing, each of United and New United will not, and will use commercially
reasonable efforts to cause each of its Controlled Affiliates not to, directly
or indirectly purchase or offer or agree to purchase any of the Senior Secured
Notes. Except with the prior written consent of United (prior to the Closing) or
New United (after the Closing) (which shall not, either in the case of United or
New United, be unreasonably withheld), from the date hereof until the earlier of
the termination of this Agreement and the first anniversary of the Closing,
Liberty will not, and will use commercially reasonable efforts to cause each of
its Controlled Affiliates not to, directly or indirectly purchase or offer or
agree to purchase any of the Senior Secured Notes.
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7.22 Fairness Opinions. United shall use commercially reasonable efforts to
promptly obtain (a) the written opinion of Xxxxxx Xxxxxxx satisfactory in form,
scope and substance to United to the effect that as of the date thereof the
Exchange Ratio pursuant to this Agreement is fair, from a financial point of
view, to the holders of United Class A Stock (other than Liberty, New United,
the Founders and their respective Affiliates) (the "Exchange Ratio Fairness
Opinion") and (b) the written opinion of Xxxxxx Xxxxxxx, satisfactory in form,
scope and substance to United, as required pursuant to Section 4.11 of the
Senior Secured Indenture with respect to the transactions contemplated hereby
and by the other Transaction Documents (the "Indenture Fairness Opinion" and,
together with the Exchange Ratio Fairness Opinion and the Stock Purchase
Fairness Opinion, the "Fairness Opinions"), and has taken or will take such
other actions as are required to comply with such sections of the Specified
Indentures. United will provide Liberty with true and complete copies of the
Exchange Ratio Fairness Opinion and the Indenture Fairness Opinion promptly
following its receipt thereof and will include an executed copy of the Exchange
Ratio Fairness Opinion in the Proxy Statement and the Registration Statement.
7.23 Interim Stockholder Arrangements. From the date hereof until the Closing
or the earlier termination of this Agreement, United, Liberty and the Founders
shall comply with the terms of the Stockholders Agreement and the Standstill
Agreement, in each case in the forms attached as exhibits hereto and, solely for
purposes of this covenant, as if (a) all references to "United" therein were
references to United, (b) all references to "United Class C Stock" therein were
references to United Class B Stock, (c) the "Maximum Percentage" were limited to
the percentage determined in accordance with clause (a) of the definition
thereof in the Standstill Agreement; provided that, (i) in clause (a)(i) of such
definition, the phrase "immediately after the closing of each of the
transactions contemplated by the Merger Agreement" shall be deemed to be
replaced with the phrase "immediately after the execution and delivery of the
Merger Agreement (including the purchase of the Note Shares (as defined in the
Merger Agreement) and the other shares of United Class A Stock purchased from
United on December 3, 2001 as contemplated by the third recital of the Merger
Agreement)" and (ii) in clause (a)(iii) of such definition, the phrase "25
million shares of Common Stock" shall be deemed to be replaced with the phrase
"20 million shares of Common Stock," and the proviso clause at the end thereof
shall be deemed deleted, and (d) the Note Shares and any shares of United Class
A Stock acquired by Liberty and its Controlled Affiliates in reliance on clause
(a)(iii) of the definition of "Maximum Percentage" were not exchangeable into
shares of United Class B Stock pursuant to Section 10(a) of the Stockholders
Agreement. Further, until the Closing or the earlier termination of this
Agreement, the Liberty Parties will be entitled to vote in their sole discretion
with respect to any action or transaction that would have required the approval
of the Class C Directors or the Liberty Directors if taken by New United or that
would be inconsistent with the provisions of this Agreement.
ARTICLE VIII
CONDITIONS PRECEDENT TO THE
OBLIGATIONS OF EACH PARTY TO CLOSE
The respective obligations of each party to consummate the transactions
contemplated by this Agreement and the other Transaction Documents are subject
to the satisfaction or the waiver by it of each of the following conditions on
or prior to the Closing Date:
8.1 United Stockholder Approval. The stockholders of United shall have
approved the United/New United Merger and each other matter submitted to the
vote of such stockholders pursuant to Section 7.2 by the requisite vote.
8.2 HSR Act. All applicable waiting periods under the HSR Act shall have
expired or been terminated, without any litigation having arisen therefrom that
remains outstanding or other action having been taken by the DOJ or the FTC that
remains unresolved.
44
8.3 Consents and Approvals.
(a) The parties hereto shall have obtained all consents, approvals and waivers
of, given all notices to, and made all Filings with (i) each Governmental
Authority identified on the Liberty Disclosure Schedule or the United Disclosure
Schedule or otherwise required in connection with the consummation of the
transactions contemplated hereby and by the other Transaction Documents, the
failure of which to be obtained, given or made would reasonably be expected to
have a Liberty Material Adverse Effect, a Material Adverse Effect on Liberty, a
United Material Adverse Effect or a New United Material Adverse Effect, and (ii)
the European Union, and all such consents, approvals, waivers, notices and
Filings referred to in clauses (i) and (ii) shall be in full force and effect.
(b) The parties hereto shall have obtained all consents, approvals and waivers
of, and given all notices to, each Person other than a Governmental Authority
identified on the Liberty Disclosure Schedule, the United Disclosure Schedule as
"Required United Consents," the Founders Disclosure Schedule or otherwise
required in connection with the consummation of the transactions contemplated
hereby and by the other Transaction Documents and all such consents, approvals,
waivers and notices shall be in full force and effect, in each case other than
those that if not obtained, in force or effect, made or given (as the case may
be) would not, either individually or in the aggregate, have a Liberty Material
Adverse Effect, a United Material Adverse Effect, a New United Material Adverse
Effect or a Founder Material Adverse Effect.
8.4 Absence of Injunctions. No permanent, preliminary or temporary injunction,
restraining order or similar order issued or entered by any court or other
Governmental Authority of competent jurisdiction, or other legal restraint or
prohibition, preventing consummation of the transactions contemplated hereby or
by the other Transaction Documents as provided herein and therein shall be in
effect.
8.5 Fairness Opinions. United shall have obtained the Exchange Ratio Fairness
Opinion and the Indenture Fairness Opinion and none of the Fairness Opinions
shall have been withdrawn.
8.6 Transaction Documents. Each of the Transaction Documents shall have been
executed and delivered, where applicable, effective as of the Closing, by the
parties thereto.
ARTICLE IX
CONDITIONS PRECEDENT TO THE
OBLIGATIONS OF NEW UNITED TO CLOSE
The obligation of New United to consummate the transactions contemplated by this
Agreement and the other Transaction Documents is subject to the fulfillment on
or prior to the Closing Date, of the following conditions, any one or more of
which may be waived by New United, provided that such waiver as it relates to
conditions to be satisfied by the Liberty Parties and Liberty Sub shall have
been consented to by United and such waiver as it relates to conditions to be
satisfied by the Founders or Founder Newcos shall have been consented to by
United and Liberty:
9.1 Representations and Warranties True as of the Closing Date.
(a) The representations and warranties of the Liberty Parties set forth in
Sections 4.1, 4.2, 4.5, 4.7, 4.10 and 4.11 shall be true in all material
respects on and as of the Closing Date with the same force and effect as though
made on and as of the Closing Date, except for changes permitted or contemplated
by this Agreement.
(b) The representations and warranties of each Founder set forth in Sections
5.1, 5.2, 5.3, 5.7 and 5.9 shall be true in all material respects on and as of
the Closing Date with the same force and effect as though made on and as of the
Closing Date, except for changes permitted or contemplated by this Agreement.
9.2 Compliance with this Agreement. The Liberty Parties, each Founder and each
Founder Newco shall have performed and complied in all material respects with
all agreements and covenants contained in this Agreement and the other
Transaction Documents that are required to be performed or complied with by them
on or prior to the Closing Date.
45
9.3 Certificates. Each Liberty Party, each Founder and each Founder Newco
shall have delivered to New United a certificate, dated the Closing Date and
signed by such party, in the case of each party that is a natural person, or by
an appropriate and duly authorized officer or representative of such party, in
the case of each party that is not a natural person, certifying that the
conditions specified in Sections 9.1 and 9.2 have been fulfilled.
9.4 Opinion of Counsel to the Liberty Parties. New United shall have received
the opinion of one or more counsel to the Liberty Parties and an opinion of one
or more counsel to the Founders and each Founder Newco, each dated the Closing
Date, in the form set forth on Exhibit 9.4 hereto.
ARTICLE X
CONDITIONS PRECEDENT TO THE
OBLIGATIONS OF THE PARTIES TO THE UNITED/NEW UNITED MERGER
10.1 United's Obligation. The obligation of United to consummate the
United/New United Merger is subject to the fulfillment on or prior to the
Closing Date of the following conditions, any one or more of which may be waived
by United:
(a) [Reserved.]
(b) United shall have received the opinion of Xxxxxxxx LLP, dated the
Closing Date, to the effect that, for United States federal income tax
purposes, (i) the formation and merger of each Founder Newco with and into
New United, and the merger of United/New United Merger Sub with and into
United should be disregarded, and the acquisitions contemplated by this
Agreement, including the direct or indirect contribution of assets by
Liberty and Liberty Global to New United, when viewed as a collective
whole, will be treated as a transfer by the various parties hereto of
property to New United pursuant to Section 351 of the Code, and (ii) no
gain or loss will be recognized by the stockholders of United upon the
receipt of stock in New United upon the merger of the Founder Newcos with
and into New United or upon the United/New United Merger. In rendering such
opinion, Xxxxxxxx LLP may require and rely upon (and may incorporate by
reference) representations and covenants made in certificates provided by
the parties hereto and upon such other documents and data as Xxxxxxxx LLP
deems appropriate as a basis for such opinion.
10.2 New United's Obligation. The obligations of New United and United/New
United Merger Sub to consummate the United/New United Merger are subject to the
fulfillment on or prior to the Closing Date of the following further conditions,
any one or more of which may be waived by New United for itself and on behalf of
United/New United Merger Sub, provided that in the case of clause (d) below such
waiver has been consented to by Liberty:
(a) [Reserved.]
(b) [Reserved.]
(c) [Reserved.]
(d) Opinion of Counsel to United. New United and United/New United Merger
Sub shall have received the opinion of Holme Xxxxxxx & Xxxx LLP, counsel to
United, dated the Closing Date, in the form set forth on Exhibit 11.4(b)
hereto.
(e) Other Transactions. The transactions to be consummated prior to the
United/New United Merger as set forth in Sections 2.1, 2.2(a) and 2.2(b)
shall have been consummated in accordance with this Agreement.
46
ARTICLE XI
CONDITIONS PRECEDENT TO THE OBLIGATION OF
THE LIBERTY PARTIES TO CLOSE
The obligations of the Liberty Parties to consummate the transactions
contemplated by this Agreement and the other Transaction Documents are subject
to the fulfillment on or prior to the Closing Date, of the following conditions,
any one or more of which may be waived by the Liberty Parties:
11.1 Representations and Warranties True as of the Closing Date.
(a) The representations and warranties of United set forth in Sections 6.1(a),
6.1(c), 6.1(f)(iv), 6.1(o), 6.1(p) and 6.1(t) shall be true in all material
respects on and as of the Closing Date with the same force and effect as though
made on and as of the Closing Date, except for changes permitted or contemplated
by this Agreement.
(b) The representations and warranties of New United set forth in Sections
6.2(a), 6.2(b)(i), 6.2(c), 6.2(k) and 6.2(m) shall be true in all material
respects on and as of the Closing Date with the same force and effect as though
made on and as of the Closing Date, except for changes permitted or contemplated
by this Agreement.
(c) The representations and warranties of each Founder set forth in Sections
5.1, 5.2, 5.3, 5.7 and 5.9 of this Agreement shall be true in all material
respects on and as of the Closing Date with the same force and effect as though
made on and as of the Closing Date, except for changes permitted or contemplated
by this Agreement.
11.2 Compliance with this Agreement.
(a) Except as set forth in (b) and (c) below, United, New United, each Founder
and each Founder Newco shall have performed and complied in all material
respects with all material agreements and material covenants contained in this
Agreement and the other Transaction Documents that are required to be performed
or complied with by them on or prior to the Closing Date.
(b) United shall have performed and complied in all respects with the
agreements and covenants contained in Sections 7.1(b)(v) and 7.1(f).
(c) New United shall have performed and complied in all respects with the
agreements and covenants contained in Sections 7.1(b)(v), 7.1(b)(xi)(B) and
7.1(b)(xii).
11.3 Certificates. Each of United, New United, each Founder and each Founder
Newco shall have delivered to the Liberty Parties a certificate, dated the
Closing Date and signed by such party, in the case of each party that is a
natural person, or by an appropriate and duly authorized officer or
representative of such party, in the case of each party that is not a natural
person, certifying that the conditions specified in Sections 11.1, 11.2, 11.9
and 11.10 have been fulfilled (insofar as each such Section relates to such
Person).
11.4 Opinion of Counsel to United. The Liberty Parties shall have received the
following opinions, each dated the Closing Date: (a) the opinion of Xxxxxxxx,
Xxxxx & Xxxxxxx, in the form set forth on Exhibit 11.4(a) hereto, (b) the
opinion of Holme Xxxxxxx & Xxxx LLP, in the form set forth on Exhibit 11.4(b)
hereto, (c) the opinion of Holme Xxxxxxx & Xxxx LLP, in the form set forth on
Exhibit 11.4(c) hereto and (d) the opinion of Holme Xxxxxxx & Xxxx LLP, in the
form set forth in Exhibit 11.4(d) hereto.
11.5 [Reserved.]
11.6 Tax Opinion. Liberty shall have received the opinion of Xxxxx Xxxxx
L.L.P., dated the Closing Date, to the effect that, for United States federal
income tax purposes, the transfers to New United in exchange for stock of New
United that are contemplated by this Agreement to be consummated on the Closing
Date, including the direct or indirect contribution of assets by Liberty and
Liberty Global to New United, when viewed as a collective whole, will be treated
as transfers of property to New United pursuant to Section 351 of the Code. In
rendering such opinion, Xxxxx Xxxxx L.L.P. may require and rely upon (and may
incorporate by
47
reference) representations and covenants made in certificates provided by the
parties hereto and upon such other documents and data as such counsel deems
appropriate as a basis for such opinions.
11.7 [Reserved.]
11.8 [Reserved.]
11.9 Senior Secured Indenture. No "Event of Default" within the meaning of
Sections 6.1(a), 6.1(b), 6.1(e), 6.1(g) or 6.1(h) of the Senior Secured
Indenture shall have occurred and, in the case of any such "Event of Default"
within the meaning of Sections 6.1(a), 6.1(b) or 6.1(e) of the Senior Secured
Indenture, be continuing and no "Acceleration Notice" shall have been properly
given (and not rescinded) pursuant to Section 6.2 of the Senior Secured
Indenture.
11.10 Fee Letter. All liabilities, obligations and commitments of any kind or
nature, whether due or to become due, whether absolute, accrued, fixed or
contingent or otherwise of New United under the Fee Letter shall have been
terminated by the execution, delivery and performance of the instruments
attached as Schedule 11.10 (the "Senior Notes Agreements") and no action taken
in connection with such termination of New United's liabilities, obligations and
commitments, contingent or otherwise, shall result in or give rise to any
material obligations or result in the loss or modification of any material
benefit of, or result in a Lien or Restriction on, any of the assets of New
United or any of its Subsidiaries (the "Fee Letter Condition").
11.11 [Reserved.]
11.12 [Reserved.]
11.13 [Reserved.]
ARTICLE XII
CONDITIONS PRECEDENT TO THE OBLIGATION OF
THE FOUNDERS TO CLOSE
The obligation of each of the Founders to consummate the transactions
contemplated by this Agreement and the other Transaction Documents is subject to
the fulfillment on or prior to the Closing Date of the following conditions, any
one or more of which may be waived by such Founder:
12.1 Representations and Warranties True as of the Closing Date. The
representations and warranties of the Liberty Parties set forth in Sections 4.1,
4.2, 4.5, 4.7, 4.10 and 4.11 of this Agreement shall be true in all material
respects on and as of the Closing Date with the same force and effect as though
made on and as of the Closing Date, except for changes permitted or contemplated
by this Agreement.
12.2 Compliance with this Agreement. The Liberty Parties shall have performed
and complied in all material respects with all agreements and covenants
contained in this Agreement and the other Transaction Documents that are
required to be performed or complied with by them on or prior to the Closing
Date.
12.3 Certificates. Each Liberty Party shall have delivered to Founders a
certificate, dated the Closing Date and signed by an appropriate and duly
authorized officer or representative of such Liberty Party, certifying that the
conditions specified in Sections 12.1 and 12.2 have been fulfilled.
12.4 [Reserved.]
12.5 Tax Opinion. The Founders shall have received the opinion of Xxxxxxxx
LLP, dated the Closing Date, to the effect that, for United States federal
income tax purposes, (i) the formation and merger of each Founder Newco with and
into New United, and the merger of United/New United Merger Sub with and into
United should be disregarded, and the acquisitions contemplated by this
Agreement, including the direct or indirect contribution of assets by Liberty
and Liberty Global to New United, when viewed as a collective whole, will be
treated as a transfer by the various parties hereto of property to New United
pursuant to Section 351 of the Code, and (ii) no gain or loss will be recognized
by the stockholders of United upon the receipt of stock in New United upon the
merger of the Founder Newcos with and into New United or the
48
merger of United/New United Merger Sub with and into United. In rendering such
opinion, Xxxxxxxx LLP may require and rely upon (and may incorporate by
reference) representations and covenants made in certificates provided by the
parties hereto and upon such other documents and data as Xxxxxxxx LLP deems
appropriate as a basis for such opinions.
ARTICLE XIII
TAX MATTERS
13.1 [Reserved.]
13.2 [Reserved.]
13.3 [Reserved.]
13.4 Transfer Taxes. All sales, use, transfer, stamp, value added, duty,
excise, stock transfer, real property transfer, real property recording, real
property gains and other similar taxes and fees arising out of or in connection
with the transactions contemplated by this Agreement and the other Transaction
Documents shall be paid by New United.
13.5 [Reserved.]
13.6 [Reserved.]
13.7 [Reserved.]
13.8 [Reserved.]
13.9 Restructuring Transaction Indemnity. If on or before the Closing Date,
UPC or Belmarken Holding B.V. refinances, restructures, reorganizes, or engages
in any similar transaction (a "Restructuring Transaction") with respect to or
affecting any of the Liberty UPC Bonds or the Belmarken Notes, and such
Restructuring Transaction causes Liberty or any of its Affiliates, successors or
assigns to recognize income or gain or otherwise incur any Tax, then New United
shall indemnify and hold harmless Liberty and its Affiliates, successors and
assigns, on an After-Tax Basis, from and against the amount of any Adjustments
that arise from such Restructuring Transaction. New United shall pay such
amounts within ten calendar days after the later of (1) the filing of any Tax
Return which includes such income or gain recognized, or which is otherwise
filed with respect to any Tax incurred, by Liberty, or any of its Affiliates,
successors or assigns in connection with such Restructuring Transaction, and (2)
the date New United receives notice from Liberty demanding payment of such
indemnity, and to the extent not paid within such ten-day period, the amount due
shall thereafter include interest thereon at a rate per annum equal to the prime
rate as publicly announced from time to time by The Bank of New York, adjusted
as and when changes to such rate shall occur, compounded semi-annually. New
United shall pay such indemnification amount, at its election, either (a) in
cash or (b) in shares of New United Class C Stock equal to the quotient of (x)
the amount of such indemnification payment, divided by (y) $5.00 (subject to
adjustment in the same manner as set forth in Section 2.4).
13.10 Treatment of Indemnity Payments. To the extent permitted by law, the
parties agree to treat indemnity payments under this Article XIII as adjustments
to the consideration paid for the assets being contributed by Liberty and
Liberty Global pursuant to this Agreement.
13.11 Survival. The covenants and agreements set forth in this Article XIII
and in Section 7.6 shall survive until the expiration of the statutes of
limitations applicable to liability to the relevant taxing authority for payment
of the Tax.
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ARTICLE XIV
CLOSING; CLOSING DATE
14.1 Closing. Subject to the terms and conditions of this Agreement, the
closing of the transactions contemplated by Sections 2.2, 2.3 and 2.5 (the
"Closing") shall take place at the executive offices of Liberty in Englewood,
Colorado, or at such other place as the parties may agree, beginning at 10:00
a.m., local time, on a Business Day selected by the parties that is on or prior
to the fifth Business Day following the day on which the last of the conditions
to the Closing set forth in Articles VIII, IX, X, XI and XII is satisfied or
waived, or on such later date as may be agreed to by the parties.
14.2 Closing Deliveries. At the Closing:
(a) each Founder shall deliver or cause to be delivered:
(i) to New United, such documents or instruments as may be necessary or
that New United may reasonably request in order to effect the merger of
each of the Founder Newcos into New United, in accordance with the
Founder Newco Merger Agreements and this Agreement, including (if
applicable) (A) delivery of certificates representing all of the issued
and outstanding limited liability company membership interests of the
applicable Founder Newco for cancellation against delivery of the
applicable Founder Consideration Shares and (B) evidence of the full and
unconditional release of any Liens and Restrictions on the shares of
United Common Stock held by each of the Founder Newcos, as set forth in
Section 2.2(b);
(ii) to Liberty, Liberty Global, New United and each other Founder,
duly executed counterparts of the Stockholders Agreement;
(iii) to New United and each other Founder, duly executed counterparts
of the Voting Agreement; and
(iv) if such Founder is a Series E Holder, (A) to United, the stock
certificate or stock certificates representing all shares of United
Series E Preferred Stock held by such Series E Holder for cancellation
against delivery of the appropriate number of shares of Surviving Entity
Class A Stock, as contemplated by the United/New United Merger
Agreement, and (B) to New United and each other Series E Holder, duly
executed counterparts of the Exchange Agreement.
(b) Liberty Global shall deliver or cause to be delivered:
(i) to New United, the stock certificate or stock certificates
representing the Liberty Global Shares, all duly endorsed in blank or
with separate notarized stock powers attached thereto duly executed in
blank and otherwise in proper form for transfer with all necessary
documentary or transfer tax stamps affixed;
(ii) to New United, Liberty and each Founder, duly executed
counterparts of the Stockholders Agreement;
(iii) to New United and Liberty, duly executed counterparts of the
Standstill Agreement and the Registration Rights Agreement; and
(iv) to New United and Liberty, duly executed counterparts of the New
United Covenant Agreement.
(c) Xxxxxxxxx shall deliver to New United a stock certificate representing
one share of United Class A Stock, duly endorsed in blank or with a
separate notarized stock power attached thereto duly executed in blank and
otherwise in proper form for transfer with all necessary documents or
transfer tax stamps affixed.
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(d) Liberty shall deliver or cause to be delivered:
(i) to New United, (A) the Belmarken Notes or the proceeds thereof, in
each case in proper form for transfer, (B) appropriate instruments, duly
executed by Liberty Sub, assigning all of Liberty Sub's rights and
obligations under the Belmarken Loan Agreements, (C) payment of the Cash
Contribution, (D) the Note Shares and (E) the Liberty UPC Bonds and/or
the Restructuring Proceeds, in each case in proper form for transfer;
(ii) to New United and LMI, duly executed counterparts of the No Waiver
Agreement;
(iii) [Reserved.]
(iv) to New United, Liberty Global and each Founder, duly executed
counterparts of the Stockholders' Agreement;
(v) to New United and Liberty Global, duly executed counterparts of the
Standstill Agreement and the Registration Rights Agreement;
(vi) to United and Liberty Global, duly executed counterparts of the
United/Liberty Agreement;
(vii) to Liberty Global and New United, duly executed counterparts of
the New United Covenant Agreement; and
(viii) to UIPI (A) payment of the Note Repayment Amount by delivery of
cash, Liberty 2009 Notes or a combination thereof, as provided in
Section 2.3 and (B) if applicable, a duly executed counterpart of the
Liberty 2009 Notes Registration Rights Agreement.
(e) New United shall deliver or cause to be delivered:
(i) to Liberty Global or the appropriate 4 Contributing Party or
Contributing Parties, newly issued stock certificates representing the
Liberty Global Consideration Shares;
(ii) to each Founder, newly issued stock certificates representing the
Founder Consideration Shares to be issued to such Founder pursuant to
Section 2.2(b), registered in the name of such Founder;
(iii) to Liberty or the appropriate Contributing Party or Contributing
Parties, newly issued stock certificates representing the Liberty
Consideration Shares and the Liberty Contribution Shares;
(iv) to Liberty, appropriate instruments, duly executed by New United,
assuming all of Liberty Sub's obligations under the Belmarken Loan
Agreements;
(v) to Liberty and LMI, duly executed counterparts of the No Waiver
Agreement;
(vi) to Liberty Global, Liberty and each Founder, duly executed
counterparts of the Stockholders Agreement;
(vii) to each Founder, duly executed counterparts of the Voting
Agreement;
(viii) to Liberty Global and Liberty, duly executed counterparts of the
Standstill Agreement and the Registration Rights Agreement;
(ix) to United, duly executed counterparts 4 of the Certificate of
Merger and the Preferred Exchange Agreement;
(x) to each Series E Holder, duly executed counterparts of the Exchange
Agreement; and
(xi) to Liberty and Liberty Global, duly executed counterparts of the
New United Covenant Agreement.
(f) United shall deliver or cause to be delivered:
(i) to New United, duly executed counterparts of the Certificate of
Merger and the Preferred Exchange Agreement;
51
(ii) to Liberty, (A) the $310,000,000 Notes for cancellation against
payment of the Note Repayment Amount by delivery of cash, Liberty 2009
Notes or a combination thereof, as provided in Section 2.3, (B) if
applicable, a counterpart of the Liberty 2009 Notes Registration Rights
Agreement, duly executed by UIPI and United and (C) an appropriate
instrument, duly executed by United and by each beneficiary of the
Liberty Guaranty, irrevocably releasing Liberty from all of its
obligations under the Liberty Guaranty; and
(iii) to Liberty and Liberty Global, duly executed counterparts of the
United/Liberty Agreement; and
(iv) to each Series E Holder, newly issued stock certificates
representing the shares of Surviving Entity Class A Stock to be issued
to such Series E Holder, as contemplated by the United/New United Merger
Agreement, registered in the name of such Series E Holder.
(g) LMI shall deliver or cause to be delivered to New United and Liberty,
duly executed counterparts of the No Waiver Agreement.
(h) Each of the parties shall also deliver or cause to be delivered the
certificates, opinions and other documents required by Articles VIII, IX,
X, XI and XII.
(i) All shares of New United Class C Stock required to be delivered to a
Liberty Party shall be represented by newly issued stock certificates
registered in the name of the applicable Liberty Party or, at its
direction, an Affiliate thereof. All payments of cash to be made to a party
or an Affiliate thereof shall be made by wire transfer of immediately
available funds to an account or accounts at a domestic bank identified by
the applicable party by written notice to the party making or causing to be
made such payment at least three Business Days prior to the applicable
Closing.
ARTICLE XV
SURVIVAL OF REPRESENTATIONS, WARRANTIES
AND COVENANTS; INDEMNIFICATION
15.1 Survival of Representations, Warranties and Covenants. All
representations and warranties contained in this Agreement shall survive the
execution and delivery hereof and the Closing hereunder, and, except as
otherwise specifically provided in this Agreement, shall thereafter terminate
and expire on the first anniversary of the Closing Date; provided, however, that
the representations and warranties set forth in Sections 4.2 (fourth and fifth
sentences only), 4.3, 4.4, 4.5, 4.7, 4.11, 5.3(c), 5.4, 5.7, 6.1(c)(ii), 6.1(d),
6.1(e), 6.1(f)(i) (second, third and fourth sentences only), 6.1(f)(iv),
6.1(g)(iii), 6.1(j), 6.1(k) (last sentence only), 6.1(o), 6.2(b)(i) (eighth
sentence only), 6.2(c)(ii), 6.2(d), 6.2(e), 6.2(g)(iii), 6.2.(j), and 6.2(k)
shall survive until the expiration of the applicable statute of limitations. The
covenants and agreements made by each party in this Agreement and the other
Transaction Documents will survive the Closing without limitation (except
pursuant to their terms). Any representation, warranty or covenant that is the
subject of a claim or dispute asserted in writing prior to the expiration of the
applicable of the above-stated periods shall survive with respect to such claim
or dispute until the final resolution thereof.
15.2 Indemnification by Liberty Party. Subject to written notice of such claim
for indemnification being given to the applicable Liberty Party within the
appropriate survival period referred to in Section 15.1, such Liberty Party,
severally and not jointly, hereby agrees to indemnify and hold New United and
its directors, officers, employees, Affiliates, agents, successors and assigns
(collectively, the "Liberty Media Indemnified Parties") harmless from and
against any and all losses, liabilities, damages, deficiencies, and obligations
("Losses") resulting from, based upon, arising out of or otherwise in respect
of, and all claims, actions, suits, proceedings, demands, judgments,
assessments, fines, interest, penalties, costs and expenses (including amounts
reasonably paid in settlement and reasonable legal, accounting, experts and
other fees, costs and expenses) ("Claims") incident or relating to or resulting
from, (a) any inaccuracy in or any breach of any representation or warranty of
such Liberty Party contained in this Agreement or in any certificate delivered
by or on behalf of such Liberty Party pursuant to this Agreement, (b) any
nonperformance or breach of any
52
covenant or agreement of such Liberty Party contained in this Agreement or (c)
any Claim brought by a third party against a Liberty Media Indemnified Party in
respect of any untrue statement of a material fact in the Proxy Statement or
Registration Statement, or omission to state any material fact required to be
stated therein, or necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading to the extent
that such untrue statement or omission was based upon information provided by or
on behalf of such Liberty Party in writing expressly for purposes of inclusion
in the Proxy Statement or Registration Statement.
15.3 Indemnification by Founders. Subject to written notice of such claim for
indemnification being given to the applicable Founder within the appropriate
survival period referred to in Section 15.1, such Founder, severally and not
jointly, hereby agrees to indemnify and hold New United and its directors,
officers, employees, Affiliates, agents, successors and assigns (collectively,
the "Founder Indemnified Parties") harmless from and against any and all Losses
resulting from, based upon, arising out of or otherwise in respect of, and all
Claims incident or relating to or resulting from (a) any inaccuracy in or any
breach of any representation or warranty of such Founder contained in this
Agreement or in any certificate delivered by or on behalf of such Founder or its
Founder Newco pursuant to this Agreement or the applicable Founder Newco Merger
Agreement, (b) any nonperformance or breach of any covenant or agreement of such
Founder contained in this Agreement, and (c) any Claim brought by a third party
against a Founder Indemnified Party in respect of any untrue statement of a
material fact in the Proxy Statement or Registration Statement, or omission to
state any material fact required to be stated therein, or necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading to the extent that such untrue statement or omission was
based upon information provided by or on behalf of such Founder in writing
expressly for purposes of inclusion in the Proxy Statement or Registration
Statement.
15.4 Indemnification by New United and United. Subject to written notice of
such claim for indemnification being given to New United within the appropriate
survival period referred to in Section 15.1, New United hereby agrees to
indemnify and hold each Liberty Party and their respective directors, officers,
employees, Affiliates, agents, successors and assigns (collectively, the "New
United Indemnified Parties") harmless from and against any and all Losses
resulting from, based upon, arising out of or otherwise in respect of, and all
Claims incident or relating to or resulting from (a) any inaccuracy in or any
breach of any representation or warranty of United or New United contained in
this Agreement or in any certificate delivered by or on behalf of United or New
United pursuant to this Agreement, (b) any nonperformance or breach of any
covenant or agreement of United or New United contained in this Agreement or any
other Transaction Document, (c) any Claim brought by a third party against a New
United Indemnified Party in respect of any untrue statement of a material fact
in the Proxy Statement or Registration Statement, or omission to state any
material fact required to be stated therein, or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading, except to the extent that such untrue statement or omission was
based upon information provided by or on behalf of a Liberty Party in writing
expressly for purposes of inclusion in the Proxy Statement or Registration
Statement, and (d) all obligations and liabilities of whatever kind and nature,
primary or secondary, direct or indirect, absolute or contingent, known or
unknown, whether arising before, on or after the Closing Date arising out of or
relating to the Belmarken Loan Agreements or any Restructuring Transaction,
other than to the extent such obligation or liability arises out of a breach of
a representation, warranty, covenant or agreement of the Liberty Parties
contained in this Agreement. Subject to written notice of such claim for
indemnification being given to United within the appropriate survival period
referred to in Section 15.1, United hereby agrees to indemnify and hold New
United and its directors, officers, employees, Controlled Affiliates, agents,
successors and assigns (collectively, the "United Indemnified Parties") harmless
from and against any and all Losses resulting from, based upon, arising out of
or otherwise in respect of, and all Claims incident or relating to or resulting
from (a) any inaccuracy in or any breach of any representation or warranty of
United contained in this Agreement or in any certificate delivered by or on
behalf of United pursuant to this Agreement, (b) any nonperformance or breach of
any covenant or agreement of United contained in this Agreement or any other
Transaction Document and (c) any Claim brought by a third party against a United
Indemnified Party in respect of any untrue statement of a material fact in the
Proxy Statement or Registration Statement, or omission to state any material
fact required to be stated therein, or necessary in order to make the statements
therein, in light of the
53
circumstances under which they were made, not misleading, except to the extent
that such untrue statement or omission was based upon information provided by or
on behalf of a Liberty Party in writing expressly for purposes of inclusion in
the Proxy Statement or Registration Statement.
15.5 Defense of Action.
(a) Any Person seeking indemnification under Section 15.2, 15.3 or 15.4 (the
"Indemnified Party") with respect to any third party claim, investigation,
action, suit or proceeding (collectively, an "Action") shall promptly give
notice of such Action to the party from which such indemnification is sought
(the "Indemnifying Party"). The Indemnified Party's failure to so notify the
Indemnifying Party of any Action shall not release the Indemnifying Party, in
whole or in part, from its obligations to indemnify under this Article, except
to the extent that the Indemnified Party's failure to so notify actually
prejudices the Indemnifying Party's ability to defend against such Action. The
Indemnified Party shall be entitled, at the sole expense and liability of the
Indemnifying Party, to exercise full control of the defense, compromise or
settlement of any such Action unless the Indemnifying Party, within a reasonable
time after the giving of such notice by the Indemnified Party, shall (i) deliver
a written confirmation to such Indemnified Party that the indemnification
provisions of Section 15.2, 15.3 or 15.4 (as the case may be) are applicable to
such Action and that, subject to the remaining provisions of this Article XV,
the Indemnifying Party will indemnify such Indemnified Party in respect of such
Action pursuant to the terms of Section 15.2, 15.3 or 15.4 (as the case may be),
(ii) notify such Indemnified Party in writing of the Indemnifying Party's
intention to assume the defense thereof, and (iii) retain legal counsel
reasonably satisfactory to such Indemnified Party to conduct the defense of such
Action.
(b) The Indemnified Party and the Indemnifying Party shall cooperate with the
party assuming the defense, compromise or settlement of any such Action in
accordance herewith in any manner that such party reasonably may request. If the
Indemnifying Party so assumes the defense of any such Action, the Indemnified
Party shall have the right to employ separate counsel and to participate in (but
not control) the defense, compromise, or settlement thereof, but the fees and
expenses of such counsel shall be the expense of such Indemnified Party unless
(i) the Indemnifying Party has specifically agreed to pay such fees and
expenses, (ii) any relief other than the payment of money damages is sought
against the Indemnified Party or (iii) the Indemnified Party shall have been
advised by its counsel that there may be one or more legal defenses available to
it that are different from or additional to those available to the Indemnifying
Party or that there may be a conflict of interest between the Indemnifying Party
and the Indemnified Party in the conduct of the defense of such Action (in
either of which cases the Indemnifying Party shall not have the right to direct
the defense, compromise or settlement of such Action on behalf of the
Indemnified Party), and in any such case the reasonable fees and expenses of
such separate counsel shall be borne by the Indemnifying Party, it being
understood and agreed, however, that the Indemnifying Party shall not be liable
for the fees and expenses of more than one separate firm of attorneys at any
time for the Indemnified Party together with its Affiliates, unless there shall
be a conflict of interest between the Indemnified Party and an Affiliate
thereof, in which case the Indemnifying Party shall not be liable for the fees
and expenses of more than an aggregate of two separate firms of attorneys at any
time for the Indemnified Party and its Affiliates. No Indemnified Party shall
settle or compromise or consent to entry of any judgment with respect to any
such Action for which it is entitled to indemnification hereunder without the
prior written consent of the Indemnifying Party, unless the Indemnifying Party
shall have failed, after reasonable notice thereof, to undertake control of such
Action in the manner provided above in this Section 15.5. The Indemnifying Party
shall not, without the written consent of the Indemnified Party, settle or
compromise or consent to entry of any judgment with respect to any such Action
(x) in which any relief other than the payment of money damages is or may be
sought against any Indemnified Party, or (y) that does not include as an
unconditional term thereof the giving by the claimant, party conducting such
investigation, plaintiff or petitioner to such Indemnified Party of a release
from all liability with respect to such Action.
(c) If the indemnification provisions contained in this Article XV and the
indemnification provisions contained in Article XIII are both applicable with
respect to any particular matter, then the indemnification provisions contained
in Article XIII shall be controlling and shall apply for all purposes as to such
matter.
54
15.6 Limitations on Indemnification for Breach of Representations and
Warranties. No indemnification by a Liberty Party or New United under Section
15.2 or 15.4 hereof in respect of an inaccuracy in or breach of any
representation or warranty in this Agreement or in any certificate delivered
pursuant hereto (other than, in each case, the Basket Exceptions, as defined
below), shall be due and payable (a) in respect of any individual claim unless
such claim equals or exceeds US $1,000,000, and (b) unless the aggregate amount
of such claims equal to or in excess of US $1,000,000 exceeds US $150,000,000
(the "Basket Amount"), whereupon the applicable Liberty Party or New United, as
the case may be, shall be obligated to pay only the excess of the aggregate
amount of such claims for indemnification over the Basket Amount. The
indemnification obligations under Sections 15.2 and 15.4 in respect of an
inaccuracy in or breach of any of the following representations or warranties
(collectively, the "Basket Exceptions") will not be subject to the limitations
of the preceding sentence: the representations and warranties in Sections 4.3,
6.1(d) and 6.2(d) ("Brokers' and Finders' Fees"); the representations and
warranties in Sections 4.5 ("Ownership of United Class B Stock"); the
representations and warranties in Sections 4.2 (fifth sentence only and only as
such sentence relates to (1) the certificates or articles of incorporation and
bylaws of the Liberty Parties and (2) Delaware Law), 6.1(c)(ii) (second sentence
only and only as such sentence relates to (1) the certificate of incorporation
and bylaws of United, (2) Delaware law and (3) any Contract evidencing or
securing any outstanding indebtedness of United or any of its Subsidiaries or
pursuant to which any such outstanding indebtedness was incurred) and 6.2(c)(ii)
("Consents and No Conflicts"); the representations and warranties in Sections
4.4, 6.1(e) and 6.2(e) ("Legal Proceedings"); the representations and warranties
in Sections 6.1(k) ("Contracts and Commitments") (last sentence only) and 6.2(j)
("Contracts; No Breach"); the representations and warranties in Section
6.1(f)(iv) ("United A/P"); the representations and warranties in Sections 6.1(o)
and 6.2(k) ("Section 203 and Similar Laws"); the representations and warranties
in the eighth sentence of Section 6.2(b)(i), that the shares of New United stock
to be issued pursuant to this Agreement and the other Transaction Documents have
been duly authorized and when issued will be validly issued, fully paid,
nonassessable and free of preemptive rights and Liens and Restrictions; the
representations and warranties in Section 6.1(j)(ix) ("Taxes"); the
representations and warranties in Section 4.7 ("Belmarken Notes"); the
representations and warranties in Section 4.11 ("Liberty UPC Bonds"); and the
representations and warranties in Sections 6.2(g)(iii) with respect to the
absence of New United liabilities. In the event of any inaccuracy in or any
breach of any representation or warranty in this Agreement or in any certificate
delivered pursuant hereto, if such representation or warranty contains a
materiality qualifier (including without limitation a reference to a Material
Adverse Effect, a Material Adverse Change, a Liberty Material Adverse Effect, a
New United Material Adverse Effect or a United Material Adverse Effect) then
such materiality qualifier shall be considered for purposes of determining
whether there has been any inaccuracy or breach subject to indemnification under
this Article XV, but such materiality qualifier shall not be considered for
purposes of determining whether any claim pursuant to this Article XV equals or
exceeds the monetary thresholds set forth in clauses (a) and (b) above.
15.7 Insurance Proceeds. The amount that any party may be required to pay to
another party pursuant to this Article XV shall be reduced (retroactively, if
necessary) by any insurance proceeds or refunds actually recovered by or on
behalf of the applicable Indemnified Party in reduction of the related Losses
and Claims. If an Indemnified Party shall have received the payment required by
this Article XV from the Indemnifying Party in respect of Losses and Claims and
shall subsequently receive insurance proceeds in respect of such Losses and
Claims, then the Indemnified Party shall promptly repay to the Indemnifying
Party a sum equal to the amount of such insurance proceeds or refunds actually
received, net of costs and expenses, but not exceeding the amount paid by the
Indemnifying Party in respect of such Losses and Claims.
15.8 Exclusive Monetary Remedy; No Consequential Damages. The parties hereto
hereby acknowledge and agree that their sole and exclusive remedy for monetary
damages with respect to any and all claims relating to the subject matter of
this Agreement (except damages resulting from the commission of fraud with
respect to the subject matter of this Agreement) shall be pursuant to the
indemnification provisions set forth in Articles XIII and XV; provided, however,
that nothing in this Section 15.8 shall limit in any way the availability of
specific performance, injunctive relief or other equitable remedies to which a
party may otherwise be entitled. In no event shall any party hereto be liable to
another party hereto for such other party's lost profits, lost revenues or other
indirect or consequential damages.
55
ARTICLE XVI
TERMINATION OF AGREEMENT
16.1 Termination. This Agreement may be terminated and the transactions
contemplated hereby and by the other Transaction Documents abandoned at any time
prior to the Closing (i) by the mutual written consent of United and Liberty,
(ii) by Liberty if United shall not have obtained the Exchange Ratio Fairness
Opinion and the Indenture Fairness Opinion on or before December 15, 2001, or
(iii) by either United or Liberty by giving written notice of termination to the
other if the Closing shall not have occurred on or before February 28, 2002;
provided, however, that (A) if the United Stockholders Meeting has not been held
on or before February 28, 2002, but (1) the United Stockholders Meeting is
scheduled to occur on or before March 29, 2002 and (2) the Proxy Statement was
mailed to United's Stockholders on or before February 14, 2002, then such date
shall be extended to Xxxxx 00, 0000, (X) if the Closing has not occurred solely
because a "Default" or "Event of Default" within the meaning of the Senior
Secured Indenture shall have occurred and be continuing (other than any "Event
of Default" within the meaning of Sections 6.1(a), 6.1(b), 6.1(e) or 6.1(h) of
the Senior Secured Indenture) and, as a result of the continuance of such
"Default" or "Event of Default," the condition to closing set forth in Section
11.1 (insofar as it relates to Section 6.1(c)(ii)(z)) shall not have been
satisfied, such "Default" or "Event of Default" is of a type that is amenable to
cure without violation of the terms of this Agreement and United is, and has
been since becoming aware of such "Default" or "Event of Default," vigorously
pursuing the cure of such "Default" or "Event of Default," such date shall be
extended once to the earliest of (1) April 13, 2002 and (2) 14 days from the
date that, but for the occurrence or continuance of such "Default" or "Event of
Default," all of the conditions to Closing (except for the delivery of
consideration, instruments, certificates and opinions to be delivered at the
Closing) were or could have been satisfied, and (C) if the Closing shall not
have occurred on or before February 28, 2002 solely because an "Acceleration
Notice" has been given (and not rescinded) pursuant to Section 6.2 of the Senior
Secured Indenture, and as a result the condition to Closing set forth in Section
11.9 has not been satisfied, but United is vigorously contesting such
Acceleration Notice in an appropriate legal forum in good faith, then such date
shall be extended to the earliest of (1) April 29, 2002, (2) such date that
United is no longer vigorously contesting such Acceleration Notice in an
appropriate legal forum in good faith and (3) such date that such Acceleration
Notice is rescinded; provided further, however, that the right to terminate this
Agreement under clause (iii) shall not be available to United, on the one hand,
or Liberty, on the other hand, if the failure of the Closing to occur prior to
such date was a result of, in the case of United, any breach by United or any of
its Affiliates or, in the case of Liberty, any breach by any Liberty Party or
any of its Affiliates, of any of the representations, warranties, covenants or
agreements of such Person contained herein or in the other Transaction
Documents.
16.2 Limitation of Liabilities in the Event of Termination. In the event of
any termination of this Agreement pursuant to Section 16.1, this Agreement shall
forthwith become wholly void and of no further force and effect and there shall
be no liability on the part of any of the parties hereto or their respective
Affiliates, officers or directors by reason hereof except (i) that the
provisions of Sections 2.3(a)(i) (proviso only), 7.14(b), 7.14(c), 7.14(d), this
Section 16.2, Section 16.3 and Article XVII shall survive the termination of
this Agreement, and (ii) nothing herein shall relieve any party hereto from
liability for any breach by it or any of its Affiliates of any of its or their
representations, warranties, covenants or agreements made herein or in the other
Transaction Documents.
16.3 Stockholder Arrangements. In the event of any termination of this
Agreement pursuant to Section 16.1, Liberty, United and the Founders will in
good faith negotiate agreements providing for stockholder and standstill
obligations and containing terms substantially similar to those provided for in
the forms of Stockholders Agreement and Standstill Agreement included as
exhibits to this Agreement, provided that (a) the "Maximum Percentage" or
similar provision in such agreements shall be computed in a manner consistent
with the methodology set forth in Section 7.23(c) hereof, (b) the Note Shares
and any shares of United Class A Stock acquired by Liberty and its Controlled
Affiliates in reliance on clause (a)(iii) of the definition of "Maximum
Percentage" shall not, pursuant to such agreements, be exchangeable into shares
of United Class B Stock as provided in Section 10(a) of the Stockholders
Agreement.
56
ARTICLE XVII
MISCELLANEOUS
17.1 Expenses. Except as set forth specifically herein, each party hereto
shall pay its own expenses (including fees and expenses of legal counsel,
investment bankers, brokers or other representatives or consultants) in
connection with the transactions contemplated hereby (whether or not such
transactions are consummated). United shall pay, or cause to be paid, (a) all
filing fees in connection with any filings under the HSR Act required to be made
by Xxxxxxxxx or by Liberty Media or any of its subsidiaries and (b) all filing
fees and other costs and expenses of any kind whatsoever (including fees and
expenses of counsel) in connection with obtaining or making any consents,
approvals or waivers of, notices to or filings with any third parties or
Governmental Authorities that are required to be obtained or made as a result of
the Closing occurring on any date after November 30, 2001. In the event of any
proceeding to enforce this Agreement, the prevailing party shall be entitled to
receive from the losing party all reasonable costs and expenses, including the
reasonable fees of attorneys, accountants and other experts, incurred by the
prevailing party in investigating and prosecuting (or defending) such action at
trial or upon any appeal.
17.2 Entire Agreement; Release. This Agreement (together with the Schedules
and Exhibits annexed hereto) and the other Transaction Documents contain, and
are intended as, a complete statement of all of the terms of the agreements
among the parties and their respective Affiliates with respect to the matters
provided for herein and therein, and, whether or not the Closing occurs,
supersede and discharge any previous agreements and understandings between the
parties with respect to those matters, including, the Letter Agreement and the
August 1999 Agreement; provided, however, that the letter agreement, dated
September 18, 2000, between United and Liberty Media (the "September 18 Letter
Agreement") shall survive the execution hereof in accordance with its terms,
except that (a) references therein to the "June 2000 Agreement" shall be deemed
to refer to the Letter Agreement and the reference in the third paragraph
thereof to the "Sum of the Parts" method set forth in paragraph 5 of Exhibit A
to the "June 2000 Agreement" shall instead be deemed to refer to the
Sum-of-the-Parts method described in paragraph 5 of the Letter Agreement, and
(b) the September 18 Letter Agreement shall terminate immediately upon the
occurrence of the Closing. Each of United, on the one hand, and Liberty and LMI,
on the other hand, furthermore, hereby releases and forever discharges each
other party and their respective Affiliates of and from any and all claims,
causes of action and liabilities of any kind whatsoever, now existing or
hereafter arising, whether known or unknown, that arise out of or in any way
relate to the Letter Agreement, its inducement, its negotiation, the negotiation
of definitive documents to consummate the transactions contemplated by it or its
alleged non-performance, including, without limitation, claims for fraud,
misrepresentation, non-disclosure, promissory estoppel, equitable estoppel,
breach of express contract, breach of implied contract or breach of the covenant
of good faith and fair dealing.
17.3 Governing Law; Waiver of Jury Trial, Etc. This Agreement shall be
governed by and construed in accordance with the laws of the State of Colorado
applied to contracts made and wholly performed in such State, without regard to
principles governing conflicts of law, except to the extent that the United/New
United Merger and the Founder Newco Mergers are necessarily governed by the laws
of the State of Delaware. Each of the parties (a) will submit itself to the
non-exclusive jurisdiction of any federal court located in the State of Colorado
or any Colorado state court having subject matter jurisdiction in the event any
dispute arises out of this Agreement, (b) agrees that venue will be proper as to
any proceeding brought in any such court with respect to such a dispute, (c)
will not attempt to deny or defeat such personal jurisdiction or venue by motion
or other request for leave from any such court and (d) WAIVES ANY RIGHT TO A
TRIAL BY JURY in any proceeding brought with respect to this Agreement or the
transactions contemplated hereby.
17.4 Headings. The table of contents and article and section headings of this
Agreement are for reference purposes only and are to be given no effect in the
construction or interpretation of this Agreement.
17.5 Notices. All notices and other communications hereunder shall be in
writing and shall be delivered personally, telecopied (if receipt of which is
confirmed by the person to whom sent), sent by nationally recognized overnight
delivery service or mailed by registered or certified mail (if return receipt is
requested)
57
to the parties at the following addresses (or to such other Person or address
for a party as shall be specified by such party by like notice) (notice shall be
deemed given upon receipt, if delivered personally, by overnight delivery
service or by telecopy, or on the third Business Day following mailing, if
mailed, except that notice of a change of address shall not be deemed given
until actually received):
(a) If to any Liberty Party, to it at:
00000 Xxxxxxx Xxxxxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxxxx X. Xxxxxxxxx
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
with copies to:
Xxxxx Xxxxx L.L.P.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxx Xx.
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
and
Xxxxxxx & Xxxxxx
000 00xx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Attention: Xxx X. Xxxxxx
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
(b) If to the Founders, to:
Xxxx Xxxxxxxxx
c/o UnitedGlobalCom, Inc.
0000 Xxxxx Xxxxxx Xxxxxx, #0000
Xxxxxx, Xxxxxxxx 00000
Attention: General Counsel
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
(c) If to any of United, New United or United/New United Merger Sub, to
such party at:
0000 Xxxxx Xxxxxx Xxxxxx, #0000
Xxxxxx, Xxxxxxxx 00000
Attention: General Counsel
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
with a copy to:
Holme Xxxxxxx & Xxxx LLP
0000 Xxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Attention: W. Xxxx Xxxxxx
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
17.6 Separability. If at any time any of the covenants or provisions contained
herein shall be deemed invalid or unenforceable by the laws of the jurisdiction
wherein it is to be enforced, such covenants or
58
provisions shall be considered divisible as to such portion and such covenants
or provisions shall become and be immediately amended and reformed to include
only such covenants or provisions as are enforceable by the court or other body
having jurisdiction of this Agreement; and the parties agree that such covenants
or provisions, as so amended and reformed, shall be valid and binding as though
the invalid or unenforceable portion had not been included herein.
17.7 Amendment; Waiver. No provision of this Agreement may be amended or
modified except by an instrument or instruments in writing signed by the parties
hereto. Any party may waive compliance by another with any of the provisions of
this Agreement. No waiver of any provision hereof shall be construed as a waiver
of any other provision. Any waiver must be in writing.
17.8 Publicity. Except as required by law or regulation or the requirements of
The Nasdaq Stock Market or The New York Stock Exchange, no public disclosure or
publicity concerning the subject matter hereof or the transactions contemplated
hereby or by the other Transaction Documents will be made without the prior
approval of Liberty and United.
17.9 Assignment and Binding Effect. Except as contemplated by Sections 2.2(f)
and 7.2, none of the parties hereto may assign any of its rights or delegate any
of its duties under this Agreement without the prior written consent of (i)
United or, following the United/New United Merger, New United, in the case of
any Liberty Party, and (ii) Liberty, in the case of any Founder, United or New
United. All of the terms and provisions of this Agreement shall be binding on,
and shall inure to the benefit of, the respective successors and permitted
assigns of the parties.
17.10 No Benefit to Others. The representations, warranties, covenants and
agreements contained in this Agreement are for the sole benefit of the parties
hereto, their respective Affiliates, and the respective successors and assigns
of the parties hereto and their respective Affiliates, and they shall not be
construed as conferring and are not intended to confer any rights on any other
Persons.
17.11 Counterparts. This Agreement may be executed by the parties hereto in
separate counterparts, each of which when so executed and delivered shall be an
original, but all such counterparts shall together constitute one and the same
instrument.
17.12 Interpretation. As used herein, except as otherwise indicated herein or
as the context may otherwise require, the words "include," "includes" and
"including" are deemed to be followed by "without limitation" whether or not
they are in fact followed by such words or words of like import; the words
"hereof," "herein," "hereunder" and comparable terms refer to the entirety of
this Agreement, including the Exhibits, Disclosure Schedules and other Schedules
hereto, and not to any particular article, section or other subdivision hereof
or Exhibit, Disclosure Schedule or Schedule hereto; the phrase "made available"
means that the information referred to has been made available if requested by
the party hereto to whom such information is to be made available; any pronoun
shall include the corresponding masculine, feminine and neuter forms; the
singular includes the plural and vice versa; references to any agreement or
other document are to such agreement or document as amended and supplemented
from time to time; references to any statute or regulation are to it as amended
and supplemented from time to time, and to any corresponding provisions of
successor statutes or regulations; references to "Article," "Section" or another
subdivision or to an "Exhibit" or "Schedule" are to an article, section or
subdivision hereof or an "Exhibit" or "Schedule" hereto; and all references to
"the date hereof," "the date of this Agreement" or similar terms (but excluding
references to the date of execution hereof) refer to the date first above
written, notwithstanding that the parties may have executed this Agreement on a
later date. In this Agreement, except as otherwise specifically provided, any
reference to any event, change, condition or effect being "material" with
respect to any Person or group of Persons means any material event, change,
condition or effect related to the condition (financial or otherwise),
properties, assets (including intangible assets), liabilities, business,
operations, results of operations or prospects of such Person or group of
Persons. In this Agreement, any reference to a "Material Adverse Change" or
"Material Adverse Effect" with respect to any Person or group of Persons means
any event, change or effect that is materially adverse to the condition
(financial or otherwise), properties, assets, liabilities, business, operations,
results of operations or prospects of such Person and its Subsidiaries, taken as
a whole, except to the extent that such change, event or effect is attributable
to or results from (i) changes affecting the securities or capital markets
59
or economic conditions generally in the country or countries in which such
Person or group of Persons conduct their businesses, (ii) changes affecting the
industries in which such Person or group of Persons operate generally (as
opposed to changes affecting any such Person or group of Persons specifically or
predominantly), (iii) the effect of the public announcement of this Agreement or
the pendency of the transactions contemplated hereby and by the other
Transaction Documents, or (iv) changes in GAAP. In this Agreement, any reference
to a party's "knowledge" means such party's actual knowledge after due inquiry
of officers, directors and other key employees of such party reasonably believed
to have knowledge of such matters. Any reference herein to a "day" or number of
"days" (without the explicit qualification of "Business") shall be deemed to
refer to a calendar day or number of calendar days. If any action or notice is
to be taken or given on or by a particular calendar day, and such calendar day
is not a Business Day, then such action or notice may be taken or given on the
next succeeding Business Day.
17.13 Rules of Construction. The parties hereto agree that they have been
represented by counsel during the negotiation, preparation and execution of this
Agreement and, therefore, waive the application of any law, regulation, holding
or rule of construction providing that ambiguities in an agreement or other
document will be construed against the party drafting such agreement or
document.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
UNITEDGLOBALCOM, INC.
By: /s/ XXXXXXX X. XXXXX
------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: President
NEW UNITEDGLOBALCOM, INC.
By: /s/ XXXXXXX X. XXXXX
------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: President
UNITED/NEW UNITED MERGER SUB, INC.
By: /s/ XXXXXXX X. XXXXX
------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: President
60
LIBERTY MEDIA CORPORATION
By: /s/ XXXXXXXXX X. XXXXXXXXX
----------------------------------
Name: Xxxxxxxxx X. Xxxxxxxxx
Title: Sr. Vice President
LIBERTY MEDIA INTERNATIONAL, INC.
By: /s/ XXXXXXXXX X. XXXXXXXXX
------------------------------------
Name: Xxxxxxxxx X. Xxxxxxxxx
Title: Sr. Vice President
LIBERTY GLOBAL, INC.
By: /s/ XXXXXXXXX X. XXXXXXXXX
------------------------------------
Name: Xxxxxxxxx X. Xxxxxxxxx
Title: Sr. Vice President
FOUNDERS:
/s/ XXXX X. XXXXXXXXX
--------------------------------------
Xxxx X. Xxxxxxxxx
X. XXXXXXXXX HOLDINGS, CO.
By: /s/ XXXX X. XXXXXXXXX
------------------------------------
Xxxx X. Xxxxxxxxx
General Partner
61
THE XXXX X. XXXXXXXXX FAMILY TRUST
By: /s/ XXXX X. XXXXXXXXX
----------------------------------
Xxxx X. Xxxxxxxxx Xxxxxx, Trustee
By Xxxx X. Xxxxxxxxx,
Attorney-in-Fact
By: /s/ XXXX X. XXXXXXXXX
------------------------------------
Xxxxx X. Xxxxxxx, Trustee
By Xxxx X. Xxxxxxxxx,
Attorney-in-Fact
By: /s/ XXXX X. XXXXXXXXX
------------------------------------
W. Xxxx Xxxxxx, Trustee
By Xxxx X. Xxxxxxxxx,
Attorney-in-Fact
THE MLS FAMILY PARTNERSHIP LLLP
By: THE XXXXXX XXXXXXXXX TRUST
General Partner
By: /s/ XXXX X. XXXXXXXXX
------------------------------------
Xxxx X. Xxxxxxxxx
Trustee
By: /s/ XXXX X. XXXXXXXXX
------------------------------------
Xxxx X. Xxxxxxx, Trustee
By Xxxx X. Xxxxxxxxx,
Attorney-in-Fact
/s/ XXXX X. XXXXXXXXX
--------------------------------------
Xxxx X. Xxxxxxxxx
62
XXXXXXXX LIMITED PARTNERSHIP
By: XXXXXX XXXXXXXX TRUST
GENERAL PARTNER
By: /s/ XXXXXX X. XXXXXXXX
------------------------------------
Xxxxxx X. Xxxxxxxx
Trustee
XXXXXX X. XXXXXXXX REVOCABLE TRUST
By: /s/ XXXXXX X. XXXXXXXX
------------------------------------
Xxxxxx X. Xxxxxxxx, Trustee
By Xxxxxx X. Xxxxxxxx,
Attorney-in-Fact
/s/ XXXXXX X. XXXXXXXX
--------------------------------------
Xxxxxx X. Xxxxxxxx
/s/ XXXXXX X. XXXXXXXX
--------------------------------------
Xxxxxx X. Xxxxxxxx
By Xxxxxx X. Xxxxxxxx,
Attorney-in-Fact
/s/ XXXXXX X. XXXXXXXX
--------------------------------------
Xxx Xxxxxxxx
By Xxxxxx X. Xxxxxxxx,
Attorney-in-Fact
/s/ XXXXXX X. XXXXXXXX
--------------------------------------
Xxxxx Xxxxxxx Xxxx
By Xxxxxx X. Xxxxxxxx,
Attorney-in-Fact
/s/ XXXXXX X. XXXXXXXX
--------------------------------------
Xxxxxxxx Xxxxx
By Xxxxxx X. Xxxxxxxx,
Attorney-in-Fact
63
/s/ XXXXXX X. XXXXXXX
--------------------------------------
Xxxxxx X. Xxxxxxx
XXXXXXX COMPANY
By: /s/ XXXXXX X. XXXXXXX
------------------------------------
Xxxxxx X. Xxxxxxx
General Partner
XXXXXX & XXXXXXX COMPANY
By: /s/ XXXXXX X. XXXXXXX
------------------------------------
Xxxxxx X. Xxxxxxx, Xx., Trustee
By Xxxxxx X. Xxxxxxx,
Attorney-in-Fact
XXXXX X. XXXXXXX LIVING TRUST
BY: /s/ XXXXXX X. XXXXXXX
------------------------------------
Xxxxx X. Xxxxxxx, Trustee
By Xxxxxx X. Xxxxxxx,
Attorney-in-Fact
XXXX X. XXXXXXX LIVING TRUST
By: /s/ XXXXXX X. XXXXXXX
------------------------------------
Xxxx X. Xxxxxxx, Trustee
By Xxxxxx X. Xxxxxxx,
Attorney-in-Fact
64
THE FRIES FAMILY PARTNERSHIP LLLP
By: THE XXXXX X. XXXXX TRUST
GENERAL PARTNER
By: /s/ XXXXXXX X. XXXXX
------------------------------------
Xxxxxxx X. Xxxxxxxx, Xx., Trustee
By Xxxxxxx X. Xxxxx,
Attorney-in-Fact
/s/ XXXXXXX X. XXXXX
--------------------------------------
Xxxxxxx X. Xxxxx
/s/ XXXX X. XXXXXX
--------------------------------------
Xxxx X. Xxxxxx
65
EXHIBIT 2.1(b)-1
RESTATED CERTIFICATE OF INCORPORATION
OF
NEW UNITEDGLOBALCOM, INC.
New UnitedGlobalCom, Inc., a Delaware corporation, hereby certifies as
follows:
1. The name of the corporation is New UnitedGlobalCom, Inc. (the
"Corporation"). The Corporation was incorporated under the name "New
UnitedGlobalCom, Inc.," and the original Certificate of Incorporation of the
Corporation was filed with the Delaware Secretary of State on February 5, 2001.
2. This Restated Certificate of Incorporation amends and restates the
provisions of the Certificate of Incorporation of the Corporation in its
entirety, and has been duly adopted in accordance with Sections 242 and 245 of
the General Corporation Law of the State of Delaware.
3. The text of the Certificate of Incorporation of the Corporation is
amended and restated to read in its entirety as follows:
FIRST: The name of the corporation (the "Corporation") is:
New UnitedGlobalCom, Inc.
SECOND: The address of the Corporation's current registered office in
the State of Delaware is 0000 Xxxxxx Xxxxxx in the City of Wilmington, County of
New Castle. The name of the Corporation's registered agent at that address is
The Corporation Trust Company.
THIRD: The purpose of the Corporation is to engage in any lawful act or
activity for which a corporation may be organized under the General Corporation
Law of the State of Delaware.
FOURTH:
(a) Authorized Shares.
The total number of shares of capital stock that the
Corporation shall have authority to issue is 1,868,000,000,
which shall be divided into the following classes:
(i) 800,000,000 shares shall be of a class designated
Class A Common Stock, par value $.01 per share
("Class A Common Stock");
(ii) 564,075,000 shares shall be of a class designated
Class B Common Stock, par value $.01 per share
("Class B Common Stock");
(iii) 400,000,000 shares shall be of a class designated
Class C Common Stock, par value $.01 per share
("Class C Common Stock" and, together with the Class
A Common Stock and the Class B Common Stock, the
"Common Stock"); and
(iv) 10,000,000 shares shall be of a class designated
Preferred Stock, par value $.01 per share ("Preferred
Stock").
Each share of Class A Common Stock, Class B Common Stock and
Class C Common Stock shall be identical in all respects except
as otherwise set forth in this Restated Certificate of
Incorporation (as it may from time to time hereafter be
amended or restated, this "Certificate"). The number of
authorized shares of Class A Common Stock or Class B Common
Stock may be increased or decreased (but not below the number
of shares thereof outstanding and the number reserved for
issuance upon the exercise, conversion or exchange of
outstanding options, warrants and convertible securities
(including, without limitation, the Class C Common Stock)) by
an amendment to this Certificate approved by the affirmative
vote of the holders of a majority of the combined voting power
of the Class A Common Stock, the Class B Common Stock and the
Class C Common Stock, voting together as a single class and
without separate class votes. The number of authorized shares
of Class C Common Stock may be increased or decreased (but not
below the number of shares thereof outstanding and the number
reserved for issuance upon the exercise, conversion or
exchange of outstanding options, warrants and convertible
securities) by an amendment to this Certificate approved by
the affirmative vote of (a) the holders of a majority of the
combined voting power of the Class A Common Stock, the Class B
Common Stock and the Class C Common Stock, voting together as
a single class, and (b) the holders of a majority of the Class
C Common Stock, voting as a separate class.
(b) Reclassification.
Effective upon the filing of this Restated Certificate of
Incorporation with the Secretary of State of the State of
Delaware, each share of the Common Stock, par value $0.01 per
share, of the Corporation that is issued and outstanding shall
thereupon be reclassified and changed, ipso facto and without
any other action on the part of the holder thereof, into one
share of Class A Common Stock.
(c) Voting Power of Common Stock.
Holders of Class A Common Stock shall be entitled to one vote
for each share of such stock held, holders of Class B Common
Stock shall be entitled to ten votes for each share of such
stock held and holders of Class C Common Stock shall be
entitled to ten votes for each share of such stock
2
held. Except as may otherwise be required by the laws of the
State of Delaware, by the provisions of this Certificate or
with respect to any Preferred Stock Designation, the holders
of outstanding shares of Class A Common Stock, the holders of
outstanding shares of Class B Common Stock, the holders of
outstanding shares of Class C Common Stock and the holders of
outstanding shares of each series of Preferred Stock entitled
to vote thereon, if any, shall vote as one class with respect
to all matters to be voted on by the stockholders of the
Corporation, and no separate vote or consent of the holders of
shares of Class A Common Stock, the holders of shares of Class
B Common Stock, the holders of shares of Class C Common Stock
or the holders of shares of any such series of Preferred Stock
shall be required for the approval of any such matter. With
respect to the election or removal of Regular Directors, (i)
prior to the occurrence of a Class B Event, the holders of
shares of Class A Common Stock, the holders of shares of Class
B Common Stock and the holders of any series of Preferred
Stock entitled to vote thereon shall vote together as a single
class and no vote of the holders of Class C Common Stock shall
be required with respect thereto and (ii) from and after the
occurrence of a Class B Event, the holders of shares of Class
A Common Stock, the holders of shares of Class B Common Stock,
the holders of shares of Class C Common Stock and the holders
of any series of Preferred Stock entitled to vote thereon
shall vote together as a single class with respect thereto.
With respect to the election or removal of Class C Directors,
the holders of the Class C Common Stock, for so long as any
such shares are outstanding, shall vote as a separate class
and no vote of the holders of Class A Common Stock, Class B
Common Stock or any series of Preferred Stock shall be
required with respect thereto.
(d) Conversion Rights
(i) Each share of Class B Common Stock shall be
convertible, at the option of the holder thereof,
into one share of Class A Common Stock at any time.
(ii) Subject to the following two sentences, each share of
Class C Common Stock shall be convertible, at the
option of the holder thereof, into one share of Class
A Common Stock at any time or, at any time following
the occurrence of a Conversion Event, one share of
Class B Common Stock. If a Conversion Event shall not
have occurred by June 25, 2010, then from and after
such date each share of Class C Common Stock shall be
convertible, at the option of the holder thereof,
into (A) 1.645 shares of Class A Common Stock at any
time or (B) 1.645 shares of Class B Common Stock at
any time following the occurrence of a Class B Event.
Shares of Class C Common Stock held by a Founder, or
Permitted Transferee of a Founder who is also a
Principal or a Related Party, may be converted into
Class B Common Stock at any time.
3
(iii) A holder wishing to convert shares of Class B Common
Stock or Class C Common Stock into shares of Class A
Common Stock, or shares of Class C Common Stock into
shares of Class B Common Stock, shall surrender the
certificate or certificates representing the shares
of Class B Common Stock or Class C Common Stock to be
converted, duly endorsed, to the Secretary of the
Corporation or to any transfer agent for the Class B
Common Stock or the Class C Common Stock, as
applicable, and shall notify the Secretary or
transfer agent in writing of the holder's desire to
so convert all or a specified portion of the shares
represented by such stock certificate or
certificates. If so required by the Corporation, any
certificate for shares surrendered for conversion
shall be accompanied by instruments of transfer, in
form satisfactory to the Corporation, duly executed
by the holder of such shares or the duly authorized
representative of such holder. Upon receipt by the
Secretary or transfer agent of the foregoing
certificate or certificates, notice and, if required,
instruments of transfer, the Corporation shall cause
to be issued to the holder who surrendered the
certificate or certificates representing shares of
Class B Common Stock or Class C Common Stock, or such
holder's nominee or nominees, either (A) one share
(or 1.645 shares if required by paragraph (d)(ii)
above) of Class A Common Stock for each share of
Class B Common Stock or Class C Common Stock
surrendered for conversion into Class A Common Stock,
and (B) one share (or 1.645 shares if required by
paragraph (d)(ii) above) of Class B Common Stock for
each share of Class C Common Stock surrendered for
conversion into Class B Common Stock, and shall issue
and deliver to such holder, or such holder's nominee
or nominees, a certificate or certificates
representing such shares as well as a certificate or
certificates representing shares of Class B Common
Stock or Class C Common Stock represented by any
surrendered certificate that were not converted. Such
conversion shall be deemed to have been made at the
close of business on the date of receipt by the
Corporation or any such transfer agent of the
certificate or certificates, notice and, if required,
instruments of transfer referred to above, and the
Person or Persons entitled to receive the shares of
Class A Common Stock or Class B Common Stock issuable
upon such conversion shall be treated for all
purposes as the record holder or holders of such
shares of Class A Common Stock or Class B Common
Stock on that date. A number of shares of Class A
Common Stock equal to the number of shares of Class B
Common Stock and Class C Common Stock outstanding
from time to time shall be set aside and reserved for
issuance upon conversion of shares of Class B Common
Stock or Class C Common Stock into Class A Common
Stock, and a number of shares of Class B Common Stock
equal to the number
4
of shares of Class C Common Stock outstanding from
time to time shall be set aside and reserved for
issuance upon conversion of shares of Class C Common
Stock into Class B Common Stock. Shares of Class B
Common Stock and Class C Common Stock that have been
so converted shall become treasury shares that may be
issued (subject to paragraph (b) of Article Fifth) or
retired by resolution of the Board of Directors of
the Corporation on the terms set forth in this
Certificate. Shares of Class A Common Stock shall not
be convertible into shares of Class B Common Stock or
Class C Common Stock. Shares of Class B Common Stock
shall not be convertible into shares of Class C
Common Stock.
(e) Dividends.
Subject to paragraph (f) of this Article Fourth, (i) whenever
a dividend is paid to the holders of Class A Common Stock, the
Corporation also shall pay to the holders of Class B Common
Stock and Class C Common Stock a dividend per share equal to
the dividend per share paid to the holders of the Class A
Common Stock, (ii) whenever a dividend is paid to the holders
of Class B Common Stock, the Corporation also shall pay to the
holders of the Class A Common Stock and the Class C Common
Stock a dividend per share equal to the dividend per share
paid to the holders of the Class B Common Stock and (iii)
whenever a dividend is paid to the holders of Class C Common
Stock, the Corporation also shall pay to the holders of the
Class A Common Stock and the Class B Common Stock a dividend
per share equal to the dividend per share paid to the holders
of the Class C Common Stock. Dividends shall be payable only
as and when declared by the Board of Directors of the
Corporation out of assets of the Corporation legally available
therefor.
(f) Share Distributions.
If at any time a distribution made or paid in Class A Common
Stock, Class B Common Stock, Class C Common Stock or any other
securities of the Corporation or of any other Person
(hereinafter sometimes called a "share distribution") is to be
made with respect to the Class A Common Stock, Class B Common
Stock or Class C Common Stock, such share distribution may be
declared and paid only as follows:
(i) Share distributions may be made or paid in shares of
Class A Common Stock, Class B Common Stock or Class C
Common Stock (or Convertible Securities that are
convertible into, exchangeable for or evidence the
right to purchase shares of any such class of Common
Stock), provided that (A) share distributions of
Class A Common Stock (or Convertible Securities that
are convertible into, exchangeable for or evidence
the right to purchase
5
shares of Class A Common Stock) may only be made to
holders of Class A Common Stock, (B) share
distributions of Class B Common Stock (or Convertible
Securities that are convertible into, exchangeable
for or evidence the right to purchase shares of Class
B Common Stock) may only be made to holders of Class
B Common Stock and (C) share distributions of Class C
Common Stock (or Convertible Securities that are
convertible into, exchangeable for or evidence the
right to purchase shares of Class C Common Stock) may
only be made to holders of Class C Common Stock. If a
share distribution is made of any class of Common
Stock (or Convertible Securities that are convertible
into, exchangeable for or evidence the right to
purchase shares of such class of Common Stock) to
holders of shares of such class of Common Stock, the
Corporation shall simultaneously effect a share
distribution, on an equal per share basis, of shares
of each other class of Common Stock (or Convertible
Securities that have the same characteristics, but
are convertible into, exchangeable for or evidence
the right to purchase shares of the appropriate class
of Common Stock) to holders of shares of such other
class of Common Stock.
(ii) A share distribution consisting of shares of any
class or series of securities of the Corporation or
any other Person other than Common Stock (or
Convertible Securities that are convertible into,
exchangeable for or evidence the right to purchase
shares of Common Stock) may be made, either on the
basis of a distribution of identical securities, on
an equal per share basis, to holders of Class A
Common Stock, Class B Common Stock and Class C Common
Stock or on the basis of a distribution of one class
or series of securities to holders of Class A Common
Stock and another class or series of securities to
holders of Class B Common Stock and Class C Common
Stock, provided that the securities so distributed
(and, if applicable, the securities into which the
distributed securities are convertible, or for which
they are exchangeable, or which the distributed
securities evidence the right to purchase) do not
differ in any respect other than their relative
voting rights and related differences in designation,
conversion and share distribution provisions, with
holders of shares of Class B Common Stock and Class C
Common Stock receiving the class or series having the
higher relative voting rights (without regard to
whether such rights differ to a greater or lesser
extent than the corresponding differences in voting
rights and related differences in designation,
conversion and share distribution provisions between
the Class A Common Stock, the Class B Common Stock
and the Class C Common Stock), provided that if the
securities so distributed constitute capital stock of
a Subsidiary of the Corporation, such rights shall
not differ to a greater extent than the
6
corresponding differences in voting rights,
designation, conversion and share distribution
provisions between the Class A Common Stock, the
Class B Common Stock and the Class C Common Stock,
and provided in each case that such distribution is
otherwise made on an equal per share basis.
(g) Reclassifications, Subdivisions and Combinations.
The Corporation shall not reclassify, subdivide or combine any
class of Common Stock without also reclassifying, subdividing
or combining each other class of Common Stock on an equal per
share basis.
(h) Class C Common Stock Proportional Purchase Right.
(i) If at any time prior to the occurrence of a
Conversion Event, and other than in connection with
the transactions to be effected pursuant to Section
2.2 of the Merger Agreement, the Corporation issues
shares of Class B Common Stock and after giving
effect to such issuance, together with any prior
issuances of Class B Common Stock with respect to
which the holders of Class C Common Stock did not
have any rights pursuant to this paragraph (h), the
Class C Voting Power is equal to or less than 90% of
the Class C Voting Power immediately prior to either
such issuance or the first of such issuances of Class
B Common Stock, each holder of shares of Class C
Common Stock shall have the right, exercisable as set
forth below, to acquire from the Corporation
additional shares of Class C Common Stock up to and
including such holder's pro rata share (based on the
number of shares of Class C Common Stock held by such
holder) of the aggregate number of shares of Class C
Common Stock that if issued in full will restore the
Class C Voting Power to 100% of the Class C Voting
Power immediately prior to either such issuance or
the first of such issuances of shares of Class B
Common Stock (whichever is greater, in the case of
multiple issuances). A holder of Class C Common Stock
that exercises its proportional purchase right
pursuant to this paragraph (h) may acquire such
additional shares of Class C Common Stock by, at such
holder's election, (A) surrendering shares of Class A
Common Stock in exchange for shares of Class C Common
Stock, on a one-for-one basis, (B) paying the
Corporation, in cash or such other form of
consideration as may be acceptable to the
Corporation, an amount per share of Class C Common
Stock equal to (x) the issue price per share of the
Class B Common Stock so issued (which, if paid in a
form of consideration other than cash or shares of
Class A Common Stock, shall be the fair market value
of the consideration so paid) or (y) with respect to
any shares of Class B Common Stock that were issued
in exchange for shares of Class A Common Stock, the
7
average of the Closing Prices per share of Class A
Common Stock for the period of ten Trading Days
ending on and including the last Trading Day prior to
such issuance of Class B Common Stock, in each case
appropriately adjusted to reflect the effect of any
stock splits, reverse stock splits, combinations,
stock dividends or other events affecting the Class B
Common Stock (the "Class C Proportional Purchase
Price"), or (C) any combination of the foregoing.
(ii) Notwithstanding the foregoing, the holders of Class C
Common Stock shall not have proportional purchase
rights pursuant to this paragraph (h) with respect to
an issuance of Class B Common Stock if the holders of
the Voting Stock outstanding immediately prior to
such issuance of shares of Class B Common Stock would
hold in the aggregate immediately following such
issuance outstanding shares of Voting Stock
representing less than 30% of the then Total Voting
Power of the Corporation.
(iii) The Corporation will provide prompt written notice
(the "Corporation Notice") to each holder of Class C
Common Stock, at the address set forth on the stock
transfer books of the Corporation, of any issuance or
issuances of shares of Class B Common Stock that
entitles such holders to acquire additional shares of
Class C Common Stock pursuant to this paragraph (h).
The Corporation Notice shall set forth: (A) a
reasonable description of the issuance or issuances
giving rise to such right, (B) the number of shares
of Class C Common Stock that such holder is entitled
to acquire, (C) the Class C Proportional Purchase
Price(s) and (D) a reasonable description of the
calculation of the matters set forth in (B) and (C)
above. Any holder of Class C Common Stock desiring to
acquire additional shares of Class C Common Stock
pursuant to this paragraph (h) shall deliver written
notice to the Corporation, within ten days following
such holder's receipt of the Corporation Notice,
setting forth the number of shares of Class C Common
Stock such holder desires to acquire pursuant to this
paragraph (h). The closing of such acquisition of
additional shares of Class C Common Stock shall occur
within 30 days following the holder's receipt of the
Corporation Notice, provided that such 30-day period
will be extended for up to an additional 60 days if
any required consents, approvals or waivers of
Governmental Authorities have not been obtained, or
applicable waiting periods have not expired or
terminated without litigation having been commenced
that remains outstanding, within the 30-day period.
8
(i) Preferred Stock.
The Board of Directors is authorized, subject to any
limitations prescribed by applicable law and further subject
to any approval rights of stockholders or the Class C
Directors, to provide from time to time for the issuance of
shares of Preferred Stock in series, and by filing a
certificate pursuant to the applicable law of the State of
Delaware (a "Preferred Stock Designation"), to establish the
rights, powers and preferences of each such series of
Preferred Stock, including the following:
(i) the number of shares of that series, which may
subsequently be increased or decreased (but not below
the number of shares of that series then outstanding)
by resolution of the Board of Directors, and the
distinctive serial designation thereof;
(ii) the voting powers, full or limited, if any, of the
shares of that series and the number of votes per
share;
(iii) the rights in respect of dividends on the shares of
that series, whether dividends shall be cumulative
and, if so, from which date or dates and the relative
rights or priority, if any, of payment of dividends
on shares of that series and any limitations,
restrictions or conditions on the payment of
dividends;
(iv) the relative amounts, and the relative rights or
priority, if any, of payment in respect of shares of
that series, which the holders of the shares of that
series shall be entitled to receive upon any
liquidation, dissolution or winding up of the
Corporation;
(v) the terms and conditions (including the price or
prices, which may vary under different conditions and
at different redemption or purchase dates), if any,
upon which all or any part of the shares of that
series may be redeemed or purchased by the
Corporation, and any limitations, restrictions or
conditions on such redemption or purchase;
(vi) the terms, if any, of any purchase, retirement or
sinking fund to be provided for the shares of that
series;
(vii) the terms, if any, upon which the shares of that
series shall be convertible into or exchangeable for
shares of any other class, classes or series, or
other securities, whether or not issued by the
Corporation;
(viii) the restrictions, limitations and conditions, if any,
upon issuance of indebtedness of the Corporation so
long as any shares of that series are outstanding;
and
9
(ix) any other preferences and relative, participating,
optional or other rights and limitations not
inconsistent with law, this Article Fourth or any
resolution of the Board of Directors pursuant to this
Article Fourth.
All shares of any one series of the Preferred Stock shall be
alike in all respects. Except to the extent otherwise
expressly provided in the Preferred Stock Designation for a
series of Preferred Stock, the holders of shares of such
series shall have no voting rights except as may be required
by the laws of the State of Delaware. Further, unless
otherwise expressly provided in the Preferred Stock
Designation for a series of Preferred Stock, no consent or
vote of the holders of shares of Preferred Stock or any series
thereof shall be required for any amendment to this
Certificate that would increase the number of authorized
shares of Preferred Stock or the number of authorized shares
of any series thereof or decrease the number of authorized
shares of Preferred Stock or the number of authorized shares
of any series thereof (but not below the number of authorized
shares of Preferred Stock of such series, as the case may be,
then outstanding). Except as may be provided by the Board of
Directors in a Preferred Stock Designation or by applicable
law, shares of any series of Preferred Stock that have been
redeemed (whether through the operation of a sinking fund or
otherwise) or purchased by the Corporation, or which, if
convertible or exchangeable, have been converted into or
exchanged for shares of stock of any other class or series
shall have the status of authorized and unissued shares of
Preferred Stock and may be reissued as a part of the series of
which they were originally a part or may be reissued as part
of a new series of Preferred Stock to be created by resolution
or resolutions of the Board of Directors or as part of any
other series of Preferred Stock.
(k) Liquidation, Dissolution or Winding Up.
In the event of a liquidation, dissolution or winding up of
the Corporation, whether voluntary or involuntary, after
payment or provision for payment of the debts and liabilities
of the Corporation and subject to the prior payment in full of
the preferential amounts to which any series of Preferred
Stock is entitled, the holders of shares of Common Stock of
all classes shall share equally, on a share for share basis,
in the assets of the Corporation remaining for distribution to
its common stockholders. Neither the consolidation or merger
of the Corporation with or into any other Person or Persons
nor the sale, transfer or lease of all or substantially all of
the assets of the Corporation shall itself be deemed to be a
liquidation, dissolution or winding up of the Corporation
within the meaning of this paragraph (k).
10
FIFTH:
(a) Classification and Election of Directors
(i) The business and affairs of the Corporation shall be
managed by a Board of Directors. The number of
directors shall be fixed by the Bylaws, but shall not
be fewer than nine nor more than twelve. Until the
first meeting of the stockholders of the Corporation
at which directors are elected following the
occurrence of a Class B Event, four directors (or
such greater number as represents not less than
one-third of the total number of directors then
authorized, rounded upwards to the nearest whole
number) shall be designated as "Class C Directors"
and will be elected by the holders of a majority of
the outstanding Class C Common Stock voting as a
separate class. Any directors that are not designated
as Class C Directors shall be designated as "Regular
Directors" and will be elected (A) prior to the
occurrence of a Class B Event, by the holders of a
plurality of the combined voting power of the
outstanding Class A Common Stock and Class B Common
Stock, voting together as a single class and (B) from
and after the occurrence of a Class B Event, by the
holders of a plurality of the combined voting power
of the outstanding Class A Common Stock, Class B
Common Stock and Class C Common Stock, voting
together as a single class. All directors will be
designated as Regular Directors immediately prior to
the election of directors at the first meeting of
stockholders of the Corporation at which directors
are elected following the occurrence of a Class B
Event.
(ii) The Regular Directors and the Class C Directors shall
be divided as evenly as possible into three classes,
designated Class I, Class II and Class III, and each
such class shall include at least one Class C
Director at all times that directors are designated
as Class C Directors. If the number of directors is
not evenly divisible by three, the remainder
positions shall be allocated first to Class III and
then to Class II. The terms of the Class I Directors
shall expire at the annual meeting of stockholders in
2003; the terms of the Class II Directors shall
expire at the annual meeting of stockholders in 2004;
and the terms of the Class III Directors shall expire
at the annual meeting of stockholders in 2005. At
each annual meeting of stockholders of the
Corporation, the successors of that class of
directors whose term expires at that meeting shall be
elected to hold office for a term expiring at the
annual meeting of stockholders of the Corporation
held in the third year following the year of their
election.
11
(b) Approval Rights of Class C Directors
Until the first meeting of the stockholders of the Corporation
at which directors are elected following the occurrence of a
Class B Event, the approval of a majority of the Class C
Directors then in office will be required in connection with
any of the following:
(i) the acquisition or disposition of assets, or issuance
of equity or debt securities by the Corporation or
any Controlled Affiliate in a single transaction or
in two or more transactions (related or unrelated) in
any consecutive twelve-month period with an aggregate
Value exceeding 30% of the Corporation's Market
Capitalization at the time of such transaction
(excluding a sale of the Corporation by merger or
otherwise, sale of all or substantially all of the
assets of the Corporation or a reorganization among
entities affiliated with the Corporation, provided
that the holders of the Class C Common Stock are
treated equally with the holders of the Class B
Common Stock and all holders of Class B Common Stock
are treated equally in such transaction or, in the
case of a sale of assets, in any distribution of the
proceeds thereof, on an as-converted basis assuming
the conversion of the Class C Common Stock into Class
B Common Stock whether or not a Conversion Event has
occurred);
(ii) (A) the issuance of shares of Class C Common Stock
(other than in connection with the exercise of the
proportional purchase rights described in paragraph
(h) of Article Fourth or as contemplated by the
Stockholders Agreement or the Merger Agreement) or
(B) the issuance, grant or sale of any options
exercisable for Class B Common Stock (other than the
Permitted Options);
(iii) the removal and replacement of the Chief Executive
Officer of the Corporation; provided that approval of
the Class C Directors will not be required so long as
any of the following four individuals is the
replacement Chief Executive Officer: Xxxxxxx X.
Xxxxx, Xxxx X. Xxxxxxx, Xxxx X. Xxxxxxxxx, or Xxxx X.
Xxxxxxxxx;
(iv) any amendment, alteration or repeal of any provision
of this Certificate or the Corporation's Bylaws
(including, without limitation, by merger,
consolidation, binding share exchange or otherwise)
that would be adverse to or would affect adversely
the rights of the holders of the Class B Common Stock
or Class C Common Stock or any of their respective
affiliates (including, without limitation, any change
in the number of members of the Corporation's Board
of Directors);
12
(v) any material transaction between the Corporation (or
any Controlled Affiliate), on the one hand, and (A)
any director or officer of the Corporation (or of any
Controlled Affiliate), (B) any Founder or (C) any
family member or affiliate of any Person referred to
in clauses (A) or (B), on the other hand, excluding
(X) transactions between the Corporation and any
Controlled Affiliate, and (Y) employment agreements,
grants to employees of options to purchase Class A
Common Stock and other employment related matters, in
any such case entered into in the ordinary course of
business;
(vi) any amendment, alteration or repeal of any provision
of the certificate of incorporation of Old United
then in effect (including, without limitation, by
merger, consolidation, binding share exchange or
otherwise) that would be adverse to or would affect
adversely the rights of the Corporation or the
holders of the Class C Common Stock or any of their
respective affiliates, prior to the exchange of all
of the outstanding shares of Class A common stock of
Old United for shares of Class A Common Stock
pursuant to the terms of the Exchange Agreement to be
entered into among the Corporation and the Principal
or Principals purchasing shares of the Series E
Preferred Stock, par value $0.01 per share, of Old
United, as contemplated by the Merger Agreement (the
"Exchange Agreement");
(vii) any issuance of any shares of preferred stock by Old
United other than any issuance of preferred stock by
Old United in the Merger, as specifically
contemplated by the Merger Agreement;
(viii) any sale, assignment, transfer, exchange,
contribution, pledge, encumbrance, grant of any
option with respect to, or other disposition,
directly or indirectly (a "Disposition"), by the
Corporation or any Subsidiary of the Corporation of,
or any action taken by the Corporation or any
Subsidiary of the Corporation in exercise (or
forbearance from exercise), waiver or amendment of
any rights to which any such Person may be entitled
with respect to, any debt securities issued or
indebtedness incurred by United Pan-Europe
Communications, N.V., a company organized in The
Netherlands ("UPC"), or any of its Subsidiaries,
which debt securities are held by, or which
indebtedness is owed to, the Corporation or any of
its Subsidiaries, including without limitation any
such Disposition, exercise or forbearance in
connection with any restructuring of the indebtedness
of UPC or any of its Subsidiaries; and
(ix) any change in the principal independent accounting
firm responsible for auditing the financial
statements of New United.
13
(c) Term of Office; Vacancies.
A director shall hold office until his or her successor shall
be elected and shall qualify, subject, however, to prior
death, resignation, retirement or removal from office. Subject
to the rights of holders of any series of Preferred Stock, any
newly created directorship resulting from an increase in the
number of Regular Directors or any other vacancy with respect
to the office of a Regular Director, however caused, shall be
filled by a majority of the Regular Directors then in office
or by a sole remaining Regular Director. Any newly created
directorship resulting from an increase in the number of Class
C Directors or any other vacancy with respect to the office of
a Class C Director, however caused, shall be filled by a
majority of the Class C Directors then in office or by a sole
remaining Class C Director. Any director elected by one or
more directors to fill a newly created directorship or other
vacancy shall, without regard to the class in which the
vacancy occurred, hold office until the next succeeding annual
meeting of stockholders and until his or her successor shall
have been elected and qualified. No decrease in the number of
directors constituting the Board of Directors shall shorten
the term of any incumbent director, except as may be provided
in a Preferred Stock Designation with respect to any
additional director elected by the holders of the applicable
series of Preferred Stock.
(d) Removal.
Subject to the rights of the holders of any series of
Preferred Stock, any or all of the Regular Directors
(including any individuals who are serving as Class C
Directors at the time that the Class C Common Stock ceases to
be outstanding) may be removed from the Board of Directors
with or without cause only (i) prior to the occurrence of a
Class B Event, upon the affirmative vote of the holders of at
least 66-2/3 percent of the combined voting power of the Class
A Common Stock and the Class B Common Stock, voting together
as a single class, and (ii) from and after the occurrence of a
Class B Event, upon the affirmative vote of holders of at
least 66-2/3 percent of the combined voting power of the Class
A Common Stock, Class B Common Stock and Class C Common Stock,
voting together as a single class, in each case at a meeting
of stockholders for which proper notice of the proposed
removal has been given. Any or all of the Class C Directors
may be removed, with or without cause, upon the affirmative
vote of the holders of a majority of the Class C Common Stock,
voting as a separate class, either at a meeting of
stockholders for which proper notice of the proposed removal
has been given or pursuant to a consent in writing signed by
holders of a majority of the Class C Common Stock.
14
(e) Notice of Nominations.
Advance notice of nominations for the election of directors,
other than nominations by the Board of Directors or a
committee thereof and other than nominations of Class C
Directors, shall be given to the Corporation in the manner
provided in the Bylaws.
SIXTH: To the fullest extent permitted by the General Corporation Law
of the State of Delaware, as now existing or hereafter amended, a director of
the Corporation shall not be liable to the Corporation or any of its
stockholders for monetary damages for breach of his fiduciary duty as a
director. Any amendment or repeal of this Article Sixth shall be prospective
only and shall not adversely affect any limitation, right or protection of a
director of the Corporation existing under this Article Sixth immediately before
the amendment or repeal.
SEVENTH:
(a) Right to Indemnification.
The Corporation shall indemnify and hold harmless, to the
fullest extent permitted by applicable law as it presently
exists or may hereafter be amended, any Person who was or is
made or is threatened to be made a party or is otherwise
involved in any action, suit or proceeding, whether civil,
criminal, administrative or investigative (a "proceeding") by
reason of the fact that he, or a Person for whom he is the
legal representative, is or was a director or officer of the
Corporation or is or was serving at the request of the
Corporation as a director, officer, employee or agent of
another corporation or of a partnership, joint venture, trust,
enterprise or nonprofit entity, including service with respect
to employee benefit plans, against all liability and loss
suffered and expenses (including attorneys' fees) reasonably
incurred by such Person. Such right of indemnification shall
inure whether or not the claim asserted is based on matters
which antedate the adoption of this Article Seventh. The
Corporation shall be required to indemnify or make advances to
a Person in connection with a proceeding (or part thereof)
initiated by such Person only if the proceeding (or part
thereof) was authorized by the Board of Directors of the
Corporation.
(b) Prepayment of Expenses.
The Corporation shall pay the expenses (including attorneys'
fees) incurred by a director or officer in defending any
proceeding in advance of its final disposition, provided,
however, that the payment of expenses incurred by a director
or officer in advance of the final disposition of the
proceeding shall be made only upon receipt of an undertaking
by the director or officer to repay all amounts advanced if it
should be ultimately
15
determined that the director or officer is not entitled to be
indemnified under this Article Seventh or otherwise.
(c) Claims.
If a claim for indemnification or payment of expenses under
this Article Seventh is not paid in full within 60 days after
a written claim therefor has been received by the Corporation,
the claimant may file suit to recover the unpaid amount of
such claim and, if successful in whole or in part, shall be
entitled to be paid the expense of prosecuting such claim. In
any such action the Corporation shall have the burden of
proving that the claimant was not entitled to the requested
indemnification or payment of expenses under applicable law.
(d) Non-Exclusivity of Rights.
The rights conferred on any Person by this Article Seventh
shall not be exclusive of any other rights that such Person
may have or hereafter acquire under any statute, provision of
this Certificate, the Bylaws, agreement, vote of stockholders
or resolution of disinterested directors or otherwise.
(e) Other Indemnification. The Corporation's obligation, if any,
to indemnify any person who was or is serving at its request
as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust, enterprise or
nonprofit entity shall be reduced by any amount such person
may collect as indemnification from such other corporation,
partnership, joint venture, trust, enterprise or nonprofit
entity.
EIGHTH: Except as provided in any Preferred Stock Designation and
except for any action permitted or required to be taken by the holders of the
Class C Common Stock, after the Corporation first has a class of securities
registered under Section 12(g) of the Securities Exchange Act of 1934, as
amended, or its equivalent and prior to the occurrence of a Conversion Event any
action required or permitted to be taken by the stockholders of the Corporation
must be taken at a duly called annual or special meeting of the stockholders and
may not be taken by consent in writing or otherwise.
NINTH: Except as otherwise required by law or provided in the Bylaws of
the Corporation, and subject to the rights of the holders of any class or series
of shares issued by the Corporation having a preference over the Common Stock as
to dividends or upon liquidation to elect directors in certain circumstances,
special meetings of the stockholders of the Corporation may be called only by
the Board of Directors pursuant to a resolution approved by the affirmative vote
of a majority of the directors then in office or at the request of holders of
Common Stock representing a majority of the Total Voting Power of the
Corporation.
TENTH: Subject to paragraph (b) of Article Fifth and to the provisions
of the Standstill Agreement, the Board of Directors shall have the power to
adopt, alter, amend
16
or repeal the Bylaws of the Corporation by vote of not less than a majority of
the directors then in office. The holders of shares of Voting Stock shall, to
the extent such power is at the time conferred on them by applicable law, also
have the power to adopt, alter, amend or repeal the Bylaws of the Corporation,
but only if such action receives at least 66-2/3 percent of the voting power of
the outstanding Common Stock, voting together as a single class.
ELEVENTH: Election of directors need not be by written ballot.
TWELFTH: Notwithstanding anything to the contrary in this Restated
Certificate of Incorporation, the affirmative vote of the holders of at least
66-2/3 percent of the voting power of the outstanding Common Stock, voting
together as a single class and, in the case of Article Fifth, a majority of the
voting power of the outstanding Class C Common Stock, if any, voting as a
separate class, shall be required to amend, alter, repeal or adopt any provision
inconsistent with any of Articles Fifth, Eighth, Ninth, Tenth, Eleventh and
Twelfth of this Certificate or to provide for any cumulative voting by
stockholders (in any such case including, without limitation, by merger,
consolidation, binding share exchange or otherwise). Except as permitted or
required by the Merger Agreement, the Corporation shall not amend, alter or
repeal, or permit to be amended, altered or repealed, any provision of the
Certificate of Incorporation of Old United (other than the provisions of
Articles First and Second thereof and except as provided in the proviso set
forth at the end of paragraph (a) of Article Fourth thereof) (including, without
limitation, by merger, consolidation, binding share exchange or otherwise) prior
to the exchange of all of the outstanding shares of Class A common stock of Old
United for shares of Class A Common Stock pursuant to the terms of the Exchange
Agreement, unless such amendment, alteration or repeal has been approved by the
affirmative vote of the holders of at least 66-2/3 percent of the voting power
of the outstanding Common Stock, voting together as a single class.
THIRTEENTH: The term of the existence of the Corporation shall be
perpetual.
FOURTEENTH: The capital stock of the Corporation shall not be
assessable. It shall be issued as fully paid, and the private property of the
stockholders shall not be liable for the debts, obligations or liabilities of
this Corporation. This Certificate shall not be subject to amendment in this
respect.
FIFTEENTH: The Corporation hereby elects not to be governed by Section
203 of the General Corporation Law of the State of Delaware.
SIXTEENTH: The following terms shall have the indicated meanings for
purposes of this Certificate.
"Business Day" means any day other than Saturday, Sunday and a day on
which banks are required or permitted to close in Denver, Colorado or New York,
New York.
"Change of Control," with respect to each Current Indenture, has the
meaning ascribed to such term in such Current Indenture.
17
"Certificate" has the meaning set forth in paragraph (a) of Article
Fourth.
"Class A Common Stock" has the meaning set forth in paragraph (a) of
Article Fourth.
"Class B Common Stock" has the meaning set forth in paragraph (a) of
Article Fourth.
"Class B Event" means the occurrence of any of the following events:
(a) the redemption in full of the Current Bonds, (b) the defeasance of the
applicable provisions of the Current Indentures in accordance with the terms
thereof so that neither Old United nor any of its subsidiaries would be required
in accordance with the terms of the Current Indentures to offer to repurchase
any of the Current Bonds (a "Change of Control Offer") if the Class C Common
Stock were to be converted in full into shares of Class B Common Stock, (c) a
waiver or amendment of the applicable provisions of the Current Indentures shall
have been effected so that neither Old United nor any of its subsidiaries would
be required to make a Change of Control Offer if the Class C Common Stock were
to be converted in full into shares of Class B Common Stock, or (d) a Change of
Control within the meaning of any of the Current Indentures (as to which an
event described in (a) (with respect to Current Bonds issued pursuant to such
Current Indenture), (b) or (c) has not occurred) otherwise occurs (other than as
a result of a breach of the Standstill Agreement by Liberty (as defined in the
Standstill Agreement)), provided that an occurrence described in this clause (d)
will not constitute a Class B Event if at such time Current Bonds with an
aggregate principal amount or accreted value, as applicable, in excess of
$200,000,000 that were issued under the Specified Indentures (as to which no
event described in clauses (b) or (c) has occurred) remain outstanding and no
Change of Control within the meaning of the Specified Indentures has occurred.
"Class C Common Stock" has the meaning set forth in paragraph (a) of
Article Fourth.
"Class C Director" has the meaning set forth in paragraph (a) of
Article Fifth.
"Class C Proportional Purchase Right" has the meaning set forth in
paragraph (h) of Article Fourth.
"Class C Voting Power" means the quotient, expressed as a percentage,
obtained by dividing (a) the number of votes in the election of directors
represented by the outstanding shares of Class C Common Stock as of the date of
determination, assuming the conversion in full of all such shares of Class C
Common Stock into shares of Class B Common Stock, by (b) the Total Voting Power
of the Corporation as of such date of determination.
"Closing Price" of a share or other unit of any security on any Trading
Day is (i) the last reported sale price for a share or other unit of such
security on such Trading Day as reported on the principal United States or
foreign securities exchange on which such security is listed or admitted for
trading or (ii) if such security is not listed or admitted for trading on any
such securities exchange, the last reported sale price for a share or other
18
unit of such security on such Trading Day as reported on The Nasdaq Stock Market
or (iii) if such security is not listed or admitted to trading on any United
States or foreign securities exchange or The Nasdaq Stock Market, the average of
the highest bid and lowest asked prices for a share or other unit of such
security on such Trading Day in the over-the-counter market as reported by The
National Quotation Bureau Incorporated, or any similar organization.
"Common Stock" has the meaning set forth in paragraph (a) of Article
Fourth.
"Controlled Affiliate" means any Person Controlled, directly or
indirectly, by the Corporation. "Control" for this purpose means the power to
direct or influence the direction of the management or policies of another
Person, whether by the ownership of voting securities, by contract or otherwise.
Without limiting the generality of the foregoing, any Person in which the
Corporation, directly or indirectly, beneficially owns 50% or more of the equity
securities (without regard to voting power in the election of directors) shall
be deemed to be a Controlled Affiliate.
"Conversion Event" means the occurrence of any of the following events:
(a) the Stockholders Agreement shall have terminated in accordance with its
terms for reasons other than the passage of time, or (ii) a Class B Event shall
have occurred.
"Convertible Securities" means any securities of the Corporation (other
than any class of Common Stock) that are convertible into, exchangeable for or
evidence the right to purchase any shares of any class of Common Stock, whether
upon conversion, exercise, exchange, pursuant to anti-dilution provisions of
such securities or otherwise.
"Corporation" has the meaning set forth in Article First.
"Corporation Notice" has the meaning set forth in paragraph (h) of
Article Fourth.
"Current Bonds" means the debt securities outstanding as of May 25,
2001 that were issued pursuant to the Current Indentures.
"Current Indentures" means (a) the Indenture dated as of February 5,
1998, between Old United and Firstar Bank, N.A. (f/k/a Firstar Bank of
Minnesota, N.A.), (b) the Indenture dated as of April 29, 1999, between Old
United and Firstar Bank, N.A., (c) the Indenture dated as of July 14, 1998,
between UPC Polska, Inc. (f/k/a @Entertainment, Inc.) ("Polska") and Bankers
Trust Company ("BTC"), (d) the Indenture dated January 20, 1999, between Polska
and BTC, (e) the Indenture dated January 27, 1999, between Polska and BTC, and
(f) the Indenture dated as of October 31, 1996, between Poland Communications,
Inc. and State Street Bank and Trust Company, in each case as were in effect on
May 1, 2001.
"Exchange Agreement" has the meaning set forth in paragraph (b)(vi) of
Article Fifth.
"Founder" has the meaning set forth in the Stockholders Agreement.
19
"Governmental Authority" means any U.S. federal, state or local or any
foreign court, governmental department, commission, authority, board, bureau,
agency or other instrumentality.
"Market Capitalization," with respect to the Corporation as of any
date, means the product of (a) the Market Value of one share of Class A Common
Stock as of such date multiplied by (b) the sum of (i) the total number of
shares of Common Stock then outstanding, plus (ii) the number of shares issuable
upon conversion of any outstanding shares of Preferred Stock that are
convertible into shares of Common Stock and have an effective per share
conversion price as of such date that is below the Market Value of the Class A
Common Stock as of such date.
"Market Value" means, with respect to any publicly traded security as
of any date, the average of the Closing Prices of such security for the five
consecutive Trading Days ending on such date.
"Merger" means the merger of United/New United Merger Sub, Inc. with
and into Old United as contemplated by the Merger Agreement.
"Merger Agreement" means the
Agreement and Plan of Restructuring and
Merger, dated December 3, 2001, among Old United, the Corporation, United/New
United Merger Sub, Inc., Liberty Media Corporation, Liberty Media International,
Inc., Liberty Global, Inc. and the Founders.
"Old United" means, prior to the effective time of the Merger,
UnitedGlobalCom, Inc., a Delaware corporation, and, at and following the
Effective Time of the Merger, UGC Holdings, Inc., a Delaware corporation and any
successor to UGC, Inc.
"Permitted Options" means options to purchase an aggregate of not more
than three million shares of Class B Common Stock, minus any options to purchase
shares of Class B Common Stock outstanding by reason of the assumption of
options by the Corporation in the Merger.
"Permitted Transferee" has the meaning set forth in the Stockholders
Agreement.
"Person" means any individual, corporation, partnership, limited
partnership, limited liability company, trust or other legal entity.
"Preferred Stock" has the meaning set forth in paragraph (i) of Article
Fourth.
"Preferred Stock Designation" has the meaning set forth in paragraph
(j) of Article Fourth.
"Principal" means any of Xxxxxx X. Xxxxxxx, Xxxxxx Xxxxxxxx, Xxxxxx
Xxxxxxxx, Xxxxxxxx Investments, Ltd (so long as it is controlled by Xxxxxx or
Xxxxxx Xxxxxxxx), Xxxx X. Xxxxxxxxx, X. Xxxxxxxxx Holdings, Co. and Xxxx X.
Xxxxxxxxx Family Trust (so long as each is controlled by Xxxx X. Xxxxxxxxx or
trustees appointed by him), Xxxxx X. Xxxxxxxxx and Xxxx X. Xxxxxxxxx.
20
"Regular Directors" has the meaning set forth in paragraph (a) of
Article Fifth.
"Specified Indentures" means (a) the Indenture dated as of February 5,
1998, between Old United and Firstar Bank, N.A. (f/k/a Firstar Bank of
Minnesota, N.A.) and (b) the Indenture dated as of April 29, 1999, between Old
United and Firstar Bank, N.A., in each case as were in effect on May 1, 2001.
"Standstill Agreement" means the Standstill Agreement to be entered
into among the Corporation, Liberty Media Corporation, Liberty Media
International, Inc., et al., as contemplated by the Merger Agreement.
"Stockholders Agreement" means the Stockholders Agreement to be entered
into among the Corporation, Liberty Media Corporation, Liberty Media
International, Inc., the individuals designated as Founders therein, et al., as
contemplated by the Merger Agreement.
"Subsidiary" means, when used with respect to any Person, (i) a
corporation in which such Person and/or one or more Subsidiaries of such Person,
directly or indirectly, owns capital stock having a majority of the voting power
of such corporation's capital stock to elect directors under ordinary
circumstances, and (ii) any other Person (other than a corporation) in which
such Person and/or one or more Subsidiaries of such Person, directly or
indirectly, has (x) a majority ownership interest or (y) the power to elect or
direct the election of a majority of the members of the governing body of such
first-named Person.
"Total Voting Power of the Corporation" means, as of any date of
determination, the aggregate number of votes in the election of directors
represented by all outstanding shares of Voting Stock, assuming for such
purposes the conversion in full of all shares of Class C Common Stock into
shares of Class B Common Stock (without regard to any restrictions on the
conversion of such shares of Class C Common Stock into shares of Class B Common
Stock imposed by this Certificate, by contract or otherwise).
"Trading Day", with respect to any security, means a day on which the
principal United States or foreign securities exchange on which such security is
listed or admitted to trading, or The Nasdaq Stock Market if such security is
not listed or admitted to trading on any such securities exchange, as
applicable, is open for the transaction of business (unless such trading shall
have been suspended for the entire day) or, if the applicable security is not
listed or admitted to trading on any United States or foreign securities
exchange or The Nasdaq Stock Market, any Business Day.
"Value" means, with respect to an asset, debt security or equity
security, the greater of (a) its fair market value, (b) the consideration to be
paid therefor, (c) its face amount, accreted value, redemption price or
liquidation preference and (d) in the case of a security convertible into or
exercisable or exchangeable for capital stock, the product of the number of
shares of capital stock for which such security may be exercised or exchanged or
into which such security may be converted and the Market Value of such capital
stock (or if such capital stock is not publicly traded capital stock but is
convertible
21
into, or exercisable or exchangeable for, publicly traded capital stock, the
Market Value of such publicly traded capital stock multiplied by the number of
shares of such publicly traded capital stock into or for which such capital
stock is convertible, exercisable or exchangeable). For purposes of this
definition, "capital stock" means any and all shares, interests, participations,
rights or other equivalents (however designated) of corporate stock, limited
liability company membership interests or partnership interests, whether common
or preferred.
"Voting Stock" means outstanding equity securities of the Corporation
generally entitled to vote in the election of directors.
IN WITNESS WHEREOF, this Restated Certificate of Incorporation has been
signed this __ day of _______, 200_.
NEW UNITEDGLOBALCOM, INC.
------------------------------------
Xxxx X. Xxxxxxxxx
Chief Executive Officer
22
EXHIBIT 2.1(b)-2
BYLAWS
OF
NEW UNITEDGLOBALCOM, INC.
Adopted ____________, 2002
INDEX TO BYLAWS
OF
NEW UNITEDGLOBALCOM, INC.
Section Page
------- ----
ARTICLE I Offices...................................................1
Section 1.01 Business Offices..........................................1
Section 1.02 Registered Office.........................................1
ARTICLE II Stockholders..............................................1
Section 2.01 Annual Meeting............................................1
Section 2.02 Special Meetings..........................................1
Section 2.03 Place of Meeting..........................................2
Section 2.04 Notice of Meetings........................................2
Section 2.05 Fixing Date for Determination of Stockholders of Record...2
Section 2.06 Voting List...............................................3
Section 2.07 Proxies...................................................3
Section 2.08 Quorum and Manner of Acting...............................3
Section 2.09 Nominations for the Election of Directors.................3
Section 2.10 Other Stockholder Proposals...............................4
ARTICLE III Board of Directors........................................5
Section 3.01 General Powers............................................5
Section 3.02 Number, Tenure and Qualifications.........................5
Section 3.03 Resignation...............................................5
Section 3.04 Regular Meetings..........................................5
Section 3.05 Special Meetings..........................................6
Section 3.06 Meetings by Telephone.....................................6
Section 3.07 Notice of Meetings........................................6
Section 3.08 Quorum and Manner of Acting...............................6
Section 3.09 Action Without a Meeting..................................6
Section 3.10 Executive and Other Committees............................7
Section 3.11 Compensation..............................................7
Section 3.12 Certain Actions...........................................7
ARTICLE IV Officers..................................................8
Section 4.01 Number and Qualifications.................................8
Section 4.02 Election and Term of Office...............................8
Section 4.03 Compensation..............................................8
Section 4.04 Resignation...............................................8
Section 4.05 Removal...................................................8
Section 4.06 Vacancies.................................................9
Section 4.07 Authority and Duties......................................9
Section 4.08 Surety Bonds.............................................10
i
ARTICLE V Stock....................................................11
Section 5.01 Issuance of Shares.......................................11
Section 5.02 Transfer of Shares.......................................11
Section 5.03 Registered Holders.......................................11
Section 5.04 Transfer Agents, Registrars and Paying Agents............11
ARTICLE VI Indemnification..........................................11
Section 6.01 Directors and Officers...................................11
Section 6.02 Employees and Other Agents...............................12
Section 6.03 Expenses.................................................12
Section 6.04 Enforcement..............................................12
Section 6.05 Non-Exclusivity of Rights................................13
Section 6.06 Survival of Rights.......................................13
Section 6.07 Insurance................................................13
Section 6.08 Amendments...............................................13
Section 6.09 Severability.............................................13
Section 6.10 Certain Definitions......................................14
ARTICLE VII Miscellaneous............................................15
Section 7.01 Waivers of Notice........................................15
Section 7.02 Presumption of Assent....................................15
Section 7.03 Voting of Securities by the Corporation..................15
Section 7.04 Seal.....................................................15
Section 7.05 Fiscal Year..............................................16
Section 7.06 Amendments...............................................16
ii
BYLAWS
OF
NEW UNITEDGLOBALCOM, INC.
ARTICLE I
Offices
Section 1.01 Business Offices. The corporation may have such offices,
either within or outside Delaware, as the board of directors may from time to
time determine or as the business of the corporation may require.
Section 1.02 Registered Office. The registered office of the
corporation required by the Delaware General Corporation Law to be maintained in
Delaware shall be as set forth in the certificate of incorporation, unless
changed as provided by law.
ARTICLE II
Stockholders
Section 2.01 Annual Meeting. An annual meeting of the stockholders
shall be held on such date as may be determined by the board of directors, for
the purpose of electing directors and for the transaction of such other business
as may come before the meeting. If the day fixed for the annual meeting shall be
a legal holiday, such meeting shall be held on the next succeeding business day.
If the election of directors shall not be held on the day designated herein for
any annual meeting of the stockholders, or at any adjournment thereof, the board
of directors shall cause the election to be held at a meeting of the
stockholders as soon thereafter as conveniently may be. Failure to hold an
annual meeting as required by these bylaws shall not invalidate any action taken
by the board of directors or officers of the corporation.
Section 2.02 Special Meetings. Special meetings of the stockholders,
for any purpose or purposes, unless otherwise prescribed by law or the
certificate of incorporation, may be called only by the board of directors
pursuant to a resolution approved by the affirmative vote of a majority of the
directors then in office, by the chairman of the board of directors or at the
request of holders of Common Stock (as defined in the certificate of
incorporation) representing a majority of the Total Voting Power (as defined in
the certificate of incorporation) of the corporation. Such resolution of the
board of directors or request by the holders of Common Stock shall state the
purpose or purposes of the proposed meeting.
Section 2.03 Place of Meeting. Each meeting of the stockholders shall
be held at such place, either within or outside Delaware, as may be designated
in the notice of meeting, or, if no place is designated in the notice, at the
principal office of the corporation.
Section 2.04 Notice of Meetings. Except as otherwise required by law,
notice in writing or by electronic transmission of each meeting of the
stockholders stating the place, day and hour of the meeting, the means of remote
communications, if any, by which stockholders and proxy holders may be deemed to
be present in person and vote at such meeting and, in the case of a special
meeting, the purpose or purposes for which the meeting is called, shall be
given, either personally (including delivery by private courier) or by first
class, certified or registered mail, or by electronic transmission, to each
stockholder of record entitled to notice of such meeting, not less than ten nor
more than 60 days before the date of the meeting. Such notice shall be deemed to
be given, if personally delivered, when delivered to the stockholder, and, if
mailed, when deposited in the United States mail, postage prepaid, directed to
the stockholder at his address as it appears on the records of the corporation,
and if by electronic transmission, when posted on an electronic network or
directed to the stockholder at an electronic mail address at which the
stockholder has consented to receive notice. If notice of two consecutive annual
meetings and all notices of meetings to any stockholder during the period
between such two consecutive annual meetings, or all, and at least two, payments
(if sent by first class mail) of dividends or interest on securities during a
12-month period, have been mailed or directed addressed to such person at his
address as shown on the records of the corporation and have been returned
undeliverable, the giving of such notice to such person shall not be required
until another address for such person is delivered to the corporation. When a
meeting is adjourned to another time or place, notice need not be given of the
adjourned meeting if the time and place thereof are announced at the meeting at
which the adjournment is taken. At the adjourned meeting the corporation may
transact any business that might have been transacted at the original meeting.
If the adjournment is for more than 30 days, or if after the adjournment a new
record date is fixed for the adjourned meeting, notice of the adjourned meeting
shall be given to each stockholder of record entitled to vote at the meeting in
accordance with the foregoing provisions of this Section 2.04.
Section 2.05 Fixing Date for Determination of Stockholders of Record.
For the purpose of determining stockholders entitled to notice of or to vote at
any meeting of stockholders or any adjournment thereof, or entitled to receive
payment of any dividend or other distribution or allotment of any rights, or
entitled to exercise any rights in respect of any change, conversion or exchange
of stock or for any other lawful action, the board of directors may fix, in
advance, a date as the record date for any such determination of stockholders,
which date shall be not more than 60 nor less than ten days before the date of
such meeting, and not more than 60 days prior to any other action. If no record
date is fixed then the record date shall be, for determining stockholders
entitled to notice of or to vote at a meeting of stockholders, the close of
business on the day next preceding the day on which notice is given, or, if
notice is waived, the close of business on the day next preceding the day on
which the meeting is held, or, for determining stockholders for any other
purpose, the close of business on the day on which the board of directors adopts
the resolution relating thereto. A determination of stockholders of record
entitled to notice of or to vote at a meeting of stockholders shall apply to any
adjournment of the meeting; provided, however, that the board of directors may
fix a new record date for the adjourned meeting.
2
Section 2.06 Voting List. The officer who has charge of the stock
ledger of the corporation shall prepare and make, at least ten days before every
meeting of stockholders, a complete list of the stockholders entitled to vote at
the meeting, arranged in alphabetical order, and showing the address of each
stockholder and the number of shares registered in the name of each stockholder.
Nothing contained in this Section 2.06 shall require the corporation to include
electronic mail addresses or other electronic contact information on such list.
Such list shall be open to the examination of any stockholder, for any purpose
germane to the meeting, for a period of at least ten days prior to the meeting,
either (a) on a reasonably accessible electronic network, provided that the
information required to gain access to such list is provided with the notice of
the meeting, or (b) during ordinary business hours, at a place within the city
where the meeting is to be held, which place shall be specified in the notice of
the meeting, or, if not so specified, at the place where the meeting is to be
held. In the event that the corporation determines to make the list available on
an electronic network, the corporation may take reasonable steps to ensure that
such information is available only to stockholders of the corporation. If the
meeting is to be held at a place, the list shall also be produced and kept at
the time and place of the meeting during the whole time thereof, and may be
inspected by any stockholder who is present. If the meeting is to be held solely
by means of remote communication, then the list shall also be open to the
examination of any stockholder during the whole time of the meeting on a
reasonably accessible electronic network, and the information required to access
such list shall be provided with the notice of the meeting.
Section 2.07 Proxies. Each stockholder entitled to vote at a meeting of
stockholders may authorize another person or persons to act for him by proxy,
but no such proxy shall be voted or acted upon after three years from its date,
unless the proxy provides for a longer period.
Section 2.08 Quorum and Manner of Acting. At all meetings of
stockholders, a majority of the combined voting power of the outstanding shares
of the corporation entitled to vote, represented in person or by proxy, shall
constitute a quorum. If a quorum is present, the affirmative vote of a majority
of the votes held by shares represented at a meeting at which a quorum is
present and entitled to vote on the subject matter shall be the act of the
stockholders, unless the vote of a greater proportion or number or voting by
classes is otherwise required by law, the certificate of incorporation or these
bylaws. In the absence of a quorum, a majority of the shares so represented may
adjourn the meeting from time to time in accordance with Section 2.04, until a
quorum shall be present or represented.
Section 2.09 Nominations for the Election of Directors. Except as
otherwise provided in the certificate of incorporation with respect to Class C
Directors (as defined in certificate of incorporation), nominations for election
to the board of directors must be made by the board of directors or by a
committee appointed by the board of directors for such purpose or by any
stockholder of any outstanding class of capital stock of the corporation
entitled to vote for the election of directors. Except as otherwise provided in
the certificate of incorporation with respect to Class C Directors (as defined
in certificate of incorporation), nominations by stockholders must be preceded
by timely notification in writing to the secretary of the
3
corporation. To be timely, a stockholder's notice shall be delivered to the
secretary at the principal executive offices of the corporation not later than
the close of business on the ninetieth (90th) day nor earlier than the close of
business on the one hundred twentieth (120th) day prior to the first anniversary
of the preceding year's annual meeting; provided, however, that in the event
that the date of the annual meeting is advanced more than thirty (30) days prior
to or delayed by more than thirty (30) days after the anniversary of the
preceding year's annual meeting, notice by the stockholder to be timely must be
so delivered not earlier than the close of business on the one hundred twentieth
(120th) day prior to such annual meeting and not later than the close of
business on the later of the ninetieth (90th) day prior to such annual meeting
or the tenth (10th) day following the day on which public announcement of the
date of such meeting is first made. Such notification shall contain the written
consent of each proposed nominee to serve as a director if so elected and the
following information as to each proposed nominee and as to each person, acting
alone or in conjunction with one or more other persons as a partnership, limited
partnership, syndicate or other group, who participates or is expected to
participate in making such nomination or in organizing, directing or financing
such nomination or solicitation of proxies to vote for the nominee:
(a) the name, age, residence address, and business address of
each proposed nominee and of each such person;
(b) the principal occupation or employment, the name, type of
business and address of the corporation or other organization in which such
employment is carried on of each proposed nominee and of each such person;
(c) the amount of stock of the corporation owned beneficially,
either directly or indirectly, by each proposed nominee and each such person;
and
(d) a description of any arrangement or understanding of each
proposed nominee and of each such person with each other or any other person
regarding future employment or any future transaction to which the corporation
will or may be a party.
The presiding officer of the meeting shall have the authority to
determine and declare to the meeting that a nomination not preceded by
notification made in accordance with the foregoing procedure shall be
disregarded.
Section 2.10 Other Stockholder Proposals. For business other than the
nomination for election of directors to be properly brought before any meeting
by a stockholder, the stockholder must have given timely notice thereof in
writing to the secretary of the corporation. To be timely, a stockholder's
notice shall be delivered to the secretary at the principal executive offices of
the corporation not later than the close of business on the ninetieth (90th) day
nor earlier than the close of business on the one hundred twentieth (120th) day
prior to the first anniversary of the preceding year's annual meeting; provided,
however, that in the event that the date of the annual meeting is advanced more
than thirty (30) days prior to or delayed by more than thirty (30) days after
the anniversary of the preceding year's annual meeting, notice by the
stockholder to be timely must be so delivered not earlier than the close of
business on the one hundred twentieth (120th) day prior to such annual meeting
and not later than the close of business on the later of
4
the ninetieth (90th) day prior to such annual meeting or the tenth (10th) day
following the day on which public announcement of the date of such meeting is
first made. A stockholder's notice to the secretary shall set forth as to each
matter the stockholder proposes to bring before the meeting:
(a) a brief description of the business desired to be brought
before the meeting and the reasons for conducting such business at the meeting;
(b) the name and address, as they appear on the corporation's
books, of the stockholder proposing such business, and the name and address of
the beneficial owner, if any, on whose behalf the proposal is made;
(c) the class and number of shares of the corporation which
are owned beneficially and of record by such stockholder of record and by the
beneficial owner, if any, on whose behalf of the proposal is made; and
(d) any material interest of such stockholder of record and
the beneficial owner, if any, on whose behalf the proposal is made in such
business.
ARTICLE III
Board of Directors
Section 3.01 General Powers. The business and affairs of the
corporation shall be managed by or under the direction of its board of
directors, except as otherwise provided in the Delaware General Corporation Law
or the certificate of incorporation.
Section 3.02 Number, Tenure and Qualifications. The number of directors
of the corporation shall be as set forth in the certificate of incorporation.
The board of directors shall be divided as evenly as possible into three classes
as provided in the certificate of incorporation. At each annual meeting of
stockholders, the successors of the class of directors whose term expires at
that meeting shall be elected to hold office for a term expiring at the annual
meeting of stockholders held in the third year following the year of their
election. Each director shall hold office until his successor shall have been
elected and qualified or until his earlier death, resignation or removal.
Directors need not be residents of Delaware or stockholders of the corporation.
Section 3.03 Resignation. Any director may resign at any time by giving
notice to the corporation in writing or by electronic transmission. A director's
resignation shall take effect upon receipt or, if a different time of
effectiveness is specified therein, at the time specified therein. Unless
otherwise specified therein, the acceptance of such resignation shall not be
necessary to make it effective.
Section 3.04 Regular Meetings. A regular meeting of the board of
directors shall be held immediately after and at the same place as the annual
meeting of stockholders, or as soon
5
thereafter as conveniently may be, at the time and place, either within or
without Delaware, determined by the board, for the purpose of electing officers
and for the transaction of such other business as may come before the meeting.
Failure to hold such a meeting, however, shall not invalidate any action taken
by any officer then or thereafter in office. The board of directors may provide
by resolution the time and place, either within or outside Delaware, for the
holding of additional regular meetings without other notice than such
resolution.
Section 3.05 Special Meetings. Special meetings of the board of
directors may be called only by the chief executive officer or any member of the
board of directors. Any such special meeting may take place at any convenient
place, either within or outside Delaware.
Section 3.06 Meetings by Telephone. Unless otherwise restricted by the
certificate of incorporation, members of the board of directors may participate
in a meeting of such board by means of conference telephone or other
communications equipment by means of which all persons participating in the
meeting can hear each other, and such participation in a meeting in such manner
shall constitute presence in person at the meeting.
Section 3.07 Notice of Meetings. Notice of each meeting of the board of
directors (except those regular meetings for which notice is not required)
stating the place, day and hour of the meeting shall be given to each director
at least five days prior thereto by the mailing of written notice by first
class, certified or registered mail, or at least two days prior thereto by
personal delivery (including delivery by private courier) of written notice or
by telephone, telegram, telex, cablegram or other similar method, except that in
the case of a meeting to be held pursuant to Section 3.06 notice may be given by
telephone one day prior thereto. The method of notice need not be the same to
each director. Notice shall be deemed to be given when deposited in the United
States mail, with postage thereon prepaid, addressed to the director at his
business or residence address, when delivered or communicated to the director or
when the telegram, telex, cablegram or other form of notice is personally
delivered to the director or delivered to the last address of the director
furnished by him to the corporation for such purpose. Neither the business to be
transacted at nor the purpose of any meeting of the board of directors need be
specified in the notice or waiver of notice of such meeting.
Section 3.08 Quorum and Manner of Acting. Except as otherwise may be
required by law, the certificate of incorporation (including, without
limitation, paragraph (b) of Article Fifth thereof) or these bylaws, a majority
of the number of directors fixed in accordance with these bylaws, present in
person, shall constitute a quorum for the transaction of business at any meeting
of the board of directors, and the vote of a majority of the directors present
at a meeting at which a quorum is present shall be the act of the board of
directors. If less than a quorum is present at a meeting, the directors present
may adjourn the meeting from time to time without further notice other than
announcement at the meeting, until a quorum shall be present. No director may
vote or act by proxy or power of attorney at any meeting of the board of
directors.
Section 3.09 Action Without a Meeting. Any action required or permitted
to be taken at any meeting of the board of directors or of any committee thereof
may be taken without a meeting, without prior notice and without a vote, if all
members of the board or committee, as the case may be, consent thereto in
writing or by electronic transmission and the writing or writings or electronic
transmission or transmissions are filed with the minutes of the proceedings of
the board or committee, as the case may be.
6
Section 3.10 Executive and Other Committees.
(a) The board of directors may designate one or more
committees, each committee to consist of one or more of the directors of the
corporation. The board may designate one or more directors as alternate members
of any committee, who may replace any absent or disqualified member at any
meeting of the committee. In the absence or disqualification of a member of a
committee, the member or members present at any meeting and not disqualified
from voting, whether or not such member or members constitute a quorum, may
unanimously appoint another member of the board of directors to act at the
meeting in the place of any such absent or disqualified member. Any such
committee, to the extent provided in the resolution of the board of directors,
shall have and may exercise all the powers and authority of the board of
directors in the management of the business and affairs of the corporation, and
may authorize the seal of the corporation to be affixed to all papers which may
require it; but no such committee shall have the power or authority in reference
to the following matters: (a) approving or adopting, or recommending to the
stockholders, any action or matter expressly required by the Delaware General
Corporation Law to be submitted to stockholders for approval or (b) adopting,
amending or repealing any bylaw of the corporation. The delegation of authority
to any committee shall not operate to relieve the board of directors or any
member of the board from any responsibility imposed by law. Subject to the
foregoing, the board of directors may provide such powers, limitations and
procedures for such committees as the board deems advisable. To the extent the
board of directors does not establish other procedures, each committee shall be
governed by the procedures set forth in Sections 3.04 (except as they relate to
an annual meeting), 3.05 through 3.09 and 7.01 and 7.02 as if the committee were
the board of directors. Each committee shall keep regular minutes of its
meetings, which shall be reported to the board of directors when required and
submitted to the secretary of the corporation for inclusion in the corporate
records.
Section 3.11 Compensation. Unless otherwise restricted by the
certificate of incorporation, the board of directors shall have the authority to
fix the compensation of directors. The directors may be paid their expenses, if
any, of attendance at each meeting of the board of directors and each meeting of
any committee of the board of which he is a member and may be paid a fixed sum
for attendance at each such meeting or a stated salary or both a fixed sum and a
stated salary. No such payment shall preclude any director from serving the
corporation in any other capacity and receiving compensation therefor.
Section 3.12 Certain Actions. The corporation shall not, and shall not
agree or commit to, and shall not permit any of its direct or indirect
subsidiaries to or agree or commit to, effect any transaction, or series of
related transactions, that involves (a) the issuance, delivery or payment of any
consideration (whether through the payment of cash, the issuance or delivery of
any securities, the transfer of assets or otherwise) by the corporation and any
of its direct or indirect subsidiaries having an aggregate fair market value in
excess of $10 million or (b) the incurrence, guarantee or assumption by the
corporation or any of its direct or indirect subsidiaries of any liabilities,
commitments or obligations, whether absolute, accrued, fixed,
7
contingent or otherwise, in an aggregate amount in excess of $10 million unless
such transaction, or series of related transactions, has first been reviewed and
approved by (x) the board of directors or (y) a committee of the board of
directors to which the board of directors has specifically delegated authority
with respect to such transaction or series of related transactions.
ARTICLE IV
Officers
Section 4.01 Number and Qualifications. The officers of the corporation
shall consist of a chairman of the board, chief executive officer, a president,
a chief operating officer, a chief financial officer, a secretary and such other
officers, including a vice-chairman or vice-chairmen of the board, one or more
vice-presidents, a treasurer and a controller, as may from time to time be
elected or appointed by the board. In addition, the board of directors or the
chief executive officer may elect or appoint such assistant and other
subordinate officers, including assistant vice-presidents, assistant secretaries
and assistant treasurers, as it or he shall deem necessary or appropriate. Any
number of offices may be held by the same person, except that no person may
simultaneously hold the offices of president and secretary.
Section 4.02 Election and Term of Office. Except as provided in the
certificate of incorporation and Sections 4.01 and 4.06 of these bylaws, the
officers of the corporation shall be elected by the board of directors annually
at the first meeting of the board held after each annual meeting of the
stockholders as provided in Section 3.04. If the election of officers shall not
be held as provided herein, such election shall be held as soon thereafter as
may be convenient. Each officer shall hold office until his successor shall have
been duly elected and shall have qualified or until the expiration of his term
in office if elected or appointed for a specified period of time or until his
earlier death, resignation or removal.
Section 4.03 Compensation. Officers shall receive such compensation for
their services as may be authorized or ratified by the board of directors and no
officer shall be prevented from receiving compensation by reason of the fact
that he is also a director of the corporation. Election or appointment as an
officer shall not of itself create a contract or other right to compensation for
services performed by such officer.
Section 4.04 Resignation. Any officer may resign at any time, subject
to any rights or obligations under any existing contracts between the officer
and the corporation, by giving notice to the corporation in writing or by
electronic transmission. An officer's resignation shall take effect upon receipt
or, if a different time of effectiveness is specified therein, at the time
stated therein. Unless otherwise specified therein, the acceptance of such
resignation shall not be necessary to make it effective.
Section 4.05 Removal. Unless otherwise provided in the certificate of
incorporation, any officer may be removed at any time by the board of directors,
or, in the case of assistant and other subordinate officers, by the chief
executive officer, whenever in its or his judgment, as the case may be, the best
interests of the corporation will be served thereby, but such removal shall
8
be without prejudice to the contract rights, if any, of the person so removed.
Election or appointment of an officer shall not in itself create contract
rights.
Section 4.06 Vacancies. Except as otherwise provided in the certificate
of incorporation, a vacancy occurring in any office by death, resignation,
removal or otherwise may be filled by the board of directors or the chief
executive officer.
Section 4.07 Authority and Duties. The officers of the corporation
shall have the authority and shall exercise the powers and perform the duties
specified below and as may be additionally specified by the chief executive
officer, the board of directors or these bylaws (and in all cases where the
duties of any officer are not prescribed by the bylaws or the board of
directors, such officer shall follow the orders and instructions of the chief
executive officer), except that in any event each officer shall exercise such
powers and perform such duties as may be required by law:
(a) Chairman of the Board. The chairman of the board, who
shall be elected from among the directors, shall preside at all meetings of the
corporation's stockholders and board of directors and perform such other duties
as may be assigned to him from time to time by the board of directors.
(b) Chief Executive Officer. The chief executive officer
shall, subject to the direction and supervision of the board of directors, (i)
have general and active control of the affairs of the corporation and general
supervision of its officers, agents and employees; (ii) in the absence of the
chairman of the board, preside at all meetings of the stockholders and the board
of directors; (iii) see that all orders and resolutions of the board of
directors are carried into effect; and (iv) perform all other duties incident to
the office of chief executive officer and as from time to time may be assigned
to him by the board if directors.
(c) President. The president shall, subject to the direction
and supervision of the board of directors, perform all duties incident to the
office of president and as from time to time may be assigned to him by the board
of directors. At the request of the chief executive officer or in his absence or
in the event of his inability or refusal to act, the president shall perform the
duties of the chief executive officer, and when so acting shall have all the
powers and be subject to all the restrictions of the chief executive officer.
(d) Chief Operating Officer. The chief operating officer
shall, subject to the direction and supervision of the board of directors,
supervise the day to day operations of the corporation and perform all other
duties incident to the office of chief operating officer as from time to time
may be assigned to him by the chairman of the board, the board of directors or
the chief executive officer. At the request of the president, or in his absence
or inability or refusal to act, the chief operating officer shall perform the
duties of the president, and when so acting shall have all the power of and be
subject to all the restrictions upon the president.
(e) Chief Financial Officer. The chief financial officer
shall: (i) be the principal financial officer and treasurer of the corporation
and have the care and custody of all funds, securities, evidences of
indebtedness and other personal property of the corporation and
9
deposit the same in accordance with the instructions of the board of directors;
(ii) receive and give receipts and acquittances for moneys paid in on account of
the corporation, and pay out of the funds on hand all bills, payrolls and other
just debts of the corporation of whatever nature upon maturity; (iii) unless
there is a controller, be the principal accounting officer of the corporation
and as such prescribe and maintain the methods and systems of accounting to be
followed, keep complete books and records of account, prepare and file all
local, state and federal tax returns, prescribe and maintain an adequate system
of internal audit and prepare and furnish to the chief executive officer and the
board of directors statements of account showing the financial position of the
corporation and the results of its operations; (iv) upon request of the board,
make such reports to it as may be required at any time; and (v) perform all
other duties incident to the office of chief financial officer and treasurer and
such other duties as from time to time may be assigned to him by the board of
directors or by the chief executive officer. Assistant treasurers, if any, shall
have the same powers and duties, subject to the supervision by the chief
financial officer. If there is no chief financial officer, these duties shall be
performed by the secretary or chief executive officer or other person appointed
by the board of directors.
(f) Vice-Presidents. The vice-president, if any (or if there
is more than one then each vice-president), shall assist the chief executive
officer and shall perform such duties as may be assigned to him by the chief
executive officer or the board of directors. Assistant vice presidents, if any,
shall have such powers and perform such duties as may be assigned to them by the
chief executive officer or by the board of directors.
(g) Secretary. The secretary shall: (i) keep the minutes of
the proceedings of the stockholders, the board of directors and any committees
of the board; (ii) see that all notices are duly given in accordance with the
provisions of these bylaws or as required by law; (iii) be custodian of the
corporate records and of the seal of the corporation; (iv) keep at the
corporation's registered office or principal place of business within or outside
Delaware a record containing the names and addresses of all stockholders and the
number and class of shares held by each, unless such a record shall be kept at
the office of the corporation's transfer agent or registrar; (v) have general
charge of the stock books of the corporation, unless the corporation has a
transfer agent; and (vi) in general, perform all duties incident to the office
of secretary and such other duties as from time to time may be assigned to him
by chief executive officer or the board of directors. Assistant secretaries, if
any, shall have the same duties and powers, subject to supervision by the
secretary.
Section 4.08 Surety Bonds. The board of directors may require any
officer or agent of the corporation to execute to the corporation a bond in such
sums and with such sureties as shall be satisfactory to the board, conditioned
upon the faithful performance of his duties and for the restoration to the
corporation of all books, papers, vouchers, money and other property of whatever
kind in his possession or under his control belonging to the corporation.
10
ARTICLE V
Stock
Section 5.01 Issuance of Shares. The issuance or sale by the
corporation of any shares of its authorized capital stock of any class,
including treasury shares, shall be made only upon authorization by the board of
directors, except as otherwise may be provided by law. Every issuance of shares
shall be recorded on the books of the corporation maintained for such purpose by
or on behalf of the corporation.
Section 5.02 Transfer of Shares. Upon presentation and surrender to the
corporation or to a transfer agent of the corporation of a certificate of stock
duly endorsed or accompanied by proper evidence of succession, assignment or
authority to transfer, payment of all transfer taxes, if any, and the
satisfaction of any other requirements of law, including inquiry into and
discharge of any adverse claims of which the corporation has notice, the
corporation or the transfer agent shall issue a new certificate to the person
entitled thereto, cancel the old certificate and record the transaction on the
books maintained for such purpose by or on behalf of the corporation. No
transfer of shares shall be effective until it has been entered on such books.
The corporation or a transfer agent of the corporation may require a signature
guaranty or other reasonable evidence that any signature is genuine and
effective before making any transfer. Transfers of uncertificated shares shall
be made in accordance with applicable provisions of law.
Section 5.03 Registered Holders. The corporation shall be entitled to
recognize the exclusive right of a person registered on its books as the owner
of shares to receive dividends, and to vote as such owner, and to hold liable
for calls and assessments a person registered on its books as the owner of
shares, and shall not be bound to recognize any equitable or other claim to or
interest in such share or shares on the part of any other person, whether or not
it shall have express or other notice thereof, except as otherwise provided by
the laws of Delaware.
Section 5.04 Transfer Agents, Registrars and Paying Agents. The board
of directors may at its discretion appoint one or more transfer agents,
registrars and agents for making payment upon any class of stock, bond,
debenture or other security of the corporation. Such agents and registrars may
be located either within or outside Delaware. They shall have such rights and
duties and shall be entitled to such compensation as may be agreed.
ARTICLE VI
Indemnification
Section 6.01 Directors and Officers. The corporation shall indemnify
its directors and officers to the fullest extent not prohibited by the Delaware
General Corporation Law or any other applicable law; provided, however, that the
corporation may modify the extent of such indemnification by individual
contracts with its directors and officers; and, provided, further, that the
corporation shall not be required to indemnify any director or officer in
connection with any proceeding (or part thereof) initiated by such person unless
(i) such indemnification is expressly
11
required to be made by law, (ii) the proceeding was authorized by the Board of
Directors of the corporation, (iii) such indemnification is provided by the
corporation, in its sole discretion, pursuant to the powers vested in the
corporation under the Delaware General Corporation Law or any other applicable
law or (iv) such indemnification is required to be made under Section 6.04.
Section 6.02 Employees and Other Agents. The corporation shall have
power to indemnify its employees and other agents as set forth in the Delaware
General Corporation Law or any other applicable law. The Board of Directors
shall have the power to delegate the determination of whether indemnification
shall be given to any such person to such officers or other persons as the Board
of Directors shall determine.
Section 6.03 Expenses.
(a) The corporation shall advance to any person who was or is
a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative, by reason of the fact that he is or was a director or officer of
the corporation, or is or was serving at the request of the corporation as a
director or officer of another corporation, partnership, joint venture, trust or
other enterprise, prior to the final disposition of the proceeding, promptly
following request therefor, all expenses incurred by any director or officer in
connection with such proceeding upon receipt of an undertaking by or on behalf
of such person to repay said amounts if it should be determined ultimately that
such person is not entitled to be indemnified under this Article VI or
otherwise.
(b) Notwithstanding the foregoing, unless otherwise determined
pursuant to Section 6.05, no advance shall be made by the corporation to an
officer of the corporation (except by reason of the fact that such officer is or
was a director of the corporation, in which event this paragraph shall not
apply) in any action, suit or proceeding, whether civil, criminal,
administrative or investigative, if a determination is reasonably and promptly
made (i) by the Board of Directors by a majority vote of a quorum consisting of
directors who were not parties to the proceeding, or (ii) if such quorum is not
obtainable, or, even if obtainable, a quorum of disinterested directors so
directs, by independent legal counsel in a written opinion, that the facts known
to the decision-making party at the time such determination is made demonstrate
clearly and convincingly that such person acted in bad faith or in a manner that
such person did not believe to be in or not opposed to the best interests of the
corporation.
Section 6.04 Enforcement. Without the necessity of entering into an
express contract, all rights to indemnification and advances to directors and
officers under this Article VI shall be deemed to be contractual rights and be
effective to the same extent and as if provided for in a contract between the
corporation and the director or officer. Any right to indemnification or
advances granted by this Article VI to a director or officer shall be
enforceable by or on behalf of the person holding such right in any court of
competent jurisdiction if (i) the claim for indemnification or advances is
denied, in whole or in part, or (ii) no disposition of such claim is made within
ninety (90) days of request therefor. The claimant in such enforcement action,
if successful in whole or in part, shall be entitled to be paid also the expense
of prosecuting his claim. In connection with any claim for indemnification, the
corporation shall be entitled to raise as a defense to any such action that the
claimant has not met the standards of conduct that make
12
it permissible under the Delaware General Corporation Law or any other
applicable law for the corporation to indemnify the claimant for the amount
claimed. In connection with any claim by an officer of the corporation (except
in any action, suit or proceeding, whether civil, criminal, administrative or
investigative, by reason of the fact that such officer is or was a director of
the corporation) for advances, the corporation shall be entitled to raise a
defense as to any such action clear and convincing evidence that such person
acted in bad faith or in a manner that such person did not believe to be in or
not opposed to the best interests of the corporation, or with respect to any
criminal action or proceeding that such person acted without reasonable cause to
believe that his conduct was lawful. Neither the failure of the corporation
(including its Board of Directors, independent legal counsel or its
stockholders) to have made a determination prior to the commencement of such
action that indemnification of the claimant is proper in the circumstances
because he has met the applicable standard of conduct set forth in the Delaware
General Corporation Law or any other applicable law, nor an actual determination
by the corporation (including its Board of Directors, independent legal counsel
or its stockholders) that the claimant has not met such applicable standard of
conduct, shall be a defense to the action or create a presumption that claimant
has not met the applicable standard of conduct. In any suit brought by a
director or officer to enforce a right to indemnification or to an advancement
of expenses hereunder, the burden of proving that the director or officer is not
entitled to be indemnified, or to such advancement of expenses, under this
Article VI or otherwise shall be on the corporation.
Section 6.05 Non-Exclusivity of Rights. The rights conferred on any
person by this Article VI shall not be exclusive of any other right which such
person may have or hereafter acquire under any applicable statute, provision of
the certificate of incorporation, bylaws, agreement, vote of stockholders or
disinterested directors or otherwise, both as to action in his official capacity
and as to action in another capacity while holding office. The corporation is
specifically authorized to enter into individual contracts with any or all of
its directors, officers, employees or agents respecting indemnification and
advances, to the fullest extent not prohibited by the Delaware General
Corporation Law or any other applicable law.
Section 6.06 Survival of Rights. The rights conferred on any person by
this Article VI shall continue as to a person who has ceased to be a director,
officer, employee or other agent and shall inure to the benefit of the heirs,
executors and administrators of such a person.
Section 6.07 Insurance. To the fullest extent permitted by the Delaware
General Corporation Law, or any other applicable law, the corporation, upon
approval by the Board of Directors, may purchase insurance on behalf of any
person required or permitted to be indemnified pursuant to this Article VI.
Section 6.08 Amendments. Any repeal or modification of this Article VI
shall only be prospective and shall not affect the rights under this Article VI
in effect at the time of the alleged occurrence of any action or omission to act
that is the cause of any proceeding against any agent of the corporation.
Section 6.09 Severability. If this Article VI or any portion hereof
shall be invalidated on any ground by any court of competent jurisdiction, then
the corporation shall nevertheless
13
indemnify each director and officer to the full extent not prohibited by any
applicable portion of this Article VI that shall not have been invalidated, or
by any other applicable law. If this Article VI shall be invalid due to the
application of the indemnification provisions of another jurisdiction, then the
corporation shall indemnify each director and officer to the full extent under
applicable law.
Section 6.10 Certain Definitions. For the purposes of this Article VI,
the following definitions shall apply:
(a) The term "proceeding" shall be broadly construed and shall
include, without limitation, the investigation, preparation, prosecution,
defense, settlement, arbitration and appeal of, and the giving of testimony in,
any threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative.
(b) The term "expenses" shall be broadly construed and shall
include, without limitation, court costs, attorneys' fees, witness fees, fines,
amounts paid in settlement or judgment and any other costs and expenses of any
nature or kind incurred in connection with any proceeding.
(c) The term "corporation" shall include, in addition to the
resulting corporation, any constituent corporation (including any constituent of
a constituent) absorbed in a consolidation or merger which, if its separate
existence had continued, would have had power and authority to indemnify its
directors, officers, and employees or agents, so that any person who is or was a
director, officer, employee or agent of such constituent corporation, or is or
was serving at the request of such constituent corporation as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, shall stand in the same position under the provisions
of this Article VI with respect to the resulting or surviving corporation as he
would have with respect to such constituent corporation if its separate
existence had continued.
(d) References to a "director," "executive officer,"
"officer," "employee," or "agent" of the corporation shall include, without
limitation, situations where such person is serving at the request of the
corporation as, respectively, a director, executive officer, officer, employee,
trustee or agent of another corporation, partnership, joint venture, trust or
other enterprise.
(e) References to "other enterprises" shall include employee
benefit plans; references to "fines" shall include any excise taxes assessed on
a person with respect to an employee benefit plan; and references to "serving at
the request of the corporation" shall include any service as a director,
officer, employee or agent of the corporation which imposes duties on, or
involves services by, such director, officer, employee, or agent with respect to
an employee benefit plan, its participants, or beneficiaries; and a person who
acted in good faith and in a manner he reasonably believed to be in the interest
of the participants and beneficiaries of an employee benefit plan shall be
deemed to have acted in a manner "not opposed to the best interests of the
corporation" as referred to in this Article VI.
14
ARTICLE VII
Miscellaneous
Section 7.01 Waivers of Notice. Whenever notice is required to be given
by law, by the certificate of incorporation or by these bylaws, a written waiver
thereof, signed by the person entitled to said notice or a waiver by electronic
transmission by the person entitled to notice, whether before or after the time
stated therein, shall be deemed equivalent to notice. Attendance of a person at
a meeting or (in the case of a stockholder) by proxy shall constitute a waiver
of notice of such meeting, except when the person attends a meeting for the
express purpose of objecting, at the beginning of the meeting, to the
transaction of any business because the meeting was not lawfully called or
convened. Neither the business to be transacted at, nor the purpose of, any
meeting need be specified in any written waiver of notice or waiver of notice by
electronic transmission unless required by these bylaws to be included in the
notice of such meeting.
Section 7.02 Presumption of Assent. A director or stockholder of the
corporation who is present at a meeting of the board of directors or
stockholders at which action on any corporate matter is taken shall be presumed
to have assented to the action taken unless his dissent shall be entered in the
minutes of the meeting or unless he shall file his written dissent to such
action with the person acting as the secretary of the meeting before the
adjournment thereof or shall forward such dissent by registered mail to the
secretary of the corporation immediately after the adjournment of the meeting.
Such right to dissent shall not apply to a director or stockholder who voted in
favor of such action.
Section 7.03 Voting of Securities by the Corporation. Unless otherwise
provided by resolution of the board of directors, on behalf of the corporation
the chairman of the board, chief executive officer, chief operating officer,
chief financial officer, president, secretary, treasurer or any vice-president
shall attend in person or by substitute appointed by him, or shall execute
written instruments appointing a proxy or proxies to represent the corporation
at, all meetings of the stockholders of any other corporation, association or
other entity in which the corporation holds any stock or other securities, and
may execute written waivers of notice with respect to any such meetings. At all
such meetings and otherwise, the chairman of the board, chief executive officer,
chief operating officer, chief financial officer, president, secretary,
treasurer or any vice-president, in person or by substitute or proxy as
aforesaid, may vote the stock or other securities so held by the corporation and
may execute written consents and any other instruments with respect to such
stock or securities and may exercise any and all rights and powers incident to
the ownership of said stock or securities, subject, however, to the
instructions, if any, of the board of directors.
Section 7.04 Seal. The corporate seal of the corporation shall be in
such form as adopted by the board of directors, and any officer of the
corporation may, when and as required, affix or impress the seal, or a facsimile
thereof, to or on any instrument or document of the corporation.
15
Section 7.05 Fiscal Year. The fiscal year of the corporation shall be
as established by the board of directors.
Section 7.06 Amendments. These bylaws may be amended or repealed only
in the manner set forth in the certificate of incorporation.
16
EXHIBIT 2.1(c)
UNITEDGLOBALCOM, INC.
SERIES E CONVERTIBLE PREFERRED STOCK
SUBSCRIPTION AGREEMENT
UnitedGlobalCom, Inc.
0000 Xxxxx Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Ladies and Gentlemen:
1. Subscription. The undersigned, [ ] (the "Purchaser"), intending to
be legally bound, hereby purchases from UnitedGlobalCom, Inc. (the "Company"),
and the Company hereby sells to the Purchaser, [ ] shares of the Series
E Convertible Preferred Stock, par value $0.01 per share, of the Company (the
"Preferred Stock") for an aggregate purchase price of [ ](1) (the
"Purchase Price") payable (i) in cash or (ii) in cash at least to the extent of
the aggregate par value of the Preferred Stock, and the remainder by delivery of
a promissory note made by the Purchaser payable to the Company with a principal
amount equal to the Purchase Price less the aggregate par value of the Preferred
Stock (a "Promissory Note"). Any Promissory Note delivered in payment of any
portion of the Purchase Price shall provide for full recourse to the Purchaser
in the event of the nonpayment thereof, shall provide for the accrual of
interest at a fair market rate and contain other terms and conditions consistent
with an arm's-length, fair market transaction, all of which terms shall be
reasonably acceptable to Liberty Media Corporation ("Liberty Media").
The Preferred Stock is convertible into shares of Class A Common Stock, par
value $0.01 per share (the "Class A Stock" and, together with the Preferred
Stock, the "Securities"), of the Company on the terms and conditions set forth
in the Certificate of Designation establishing the Preferred Stock (the
"Certificate of Designation").
2. Deliveries. Concurrently with the execution and delivery hereof, (a) the
Purchaser is delivering the Purchase Price to the Company by wire transfer of
immediately available funds in accordance with instructions from the Company
and, if applicable, by delivery of a Promissory Note and (b) the Company is
delivering to the Purchaser a certificate, in the name of the Purchaser and duly
executed by appropriate officers of the Company, representing the Preferred
Stock purchased hereby.
3. Representations and Warranties of the Purchaser. The Purchaser hereby
acknowledges, represents, warrants and agrees as follows:
(a) None of the Securities have been registered under the Securities Act
of 1933, as amended (the "Securities Act"), or any state securities laws.
The Purchaser understands that the offering and sale of the Securities is
intended to be exempt from registration under the Securities Act by virtue
of Section 4(2) thereof, and analogous provisions of state securities laws,
based, in part, upon the representations, warranties and agreements
contained in this Subscription Agreement.
(b) The Purchaser has received copies of the Certificate of Designation,
the SEC Filings (as defined below) and all other documents requested by the
Purchaser, has carefully reviewed such documents in
------------
(1) The per share purchase price of the Series E Preferred Stock will be equal
to 1/1,500th of the product (rounded up to the nearest cent) of (a) the
lesser of (1) $5.00 and (2) the Average Market Price of the United Class A
Stock as of the Closing Date, multiplied by (b) a number equal to (1) the
quotient of X divided by Y minus (2) X. For purposes of the foregoing, "X"
shall be equal to the aggregate number of shares of United Class A Stock and
United Class B Stock issued and outstanding immediately prior to the Closing
and "Y" shall be equal to 0.995049505.
their entirety and understands the information contained therein. For
purposes of this Subscription Agreement, "SEC Filings" shall mean the
Company's: (i) preliminary proxy statement filed with the Securities and
Exchange Commission ("SEC") on January 25, 2001; (ii) registration
statement filed with the SEC on [ ], (iv) Form 10-K for the year
ended December 31, 2000; (iv) Forms 10-Q filed with the SEC for the
quarters ended March 31, 2001, June 30, 2001 and September 30, 2001; and
(v) Form 8-K filed with the SEC on June 1, 2001.
(c) Neither the SEC nor any state securities commission has passed upon or
endorsed the merits of this offering of Securities or made any findings or
determination as to the fairness of the terms of this offering for
investment.
(d) In evaluating the suitability of an investment in the Company, the
Purchaser has not relied upon any representation or other information (oral
or written) by or from the Company other than as stated in the Certificate
of Designation and the SEC Filings.
(e) The Purchaser has taken no action that would give rise to any claim by
any person for brokerage commissions, finders' fees or the like relating to
this Subscription Agreement or the transactions contemplated hereby.
(f) The Purchaser, together with his attorneys, accountants, purchaser
representatives and tax advisors (collectively, the "Advisors"), has such
knowledge and experience in financial, tax, and business matters so as to
enable him to utilize the information made available to him in connection
with the offering of the Securities to evaluate the merits and risks of an
investment in the Securities and to make an informed investment decision
with respect thereto.
(g) The Purchaser is not relying on information provided by the Company
with respect to the financial, tax and other economic considerations of an
investment in the Securities, and in such regard the Purchaser has relied
on the advice of, and has consulted with, only his own Advisors.
(h) The Purchaser is acquiring the Securities solely for his own account
for investment and not with a view to resale or distribution thereof.
(i) The Purchaser acknowledges that he must bear the economic risk of an
investment in the Securities indefinitely because none of the Securities
may be sold, hypothecated or otherwise disposed of unless subsequently
registered under the Securities Act and applicable state securities laws or
an exemption from registration is available. In addition, Section 8 of this
Subscription Agreement imposes certain further restrictions on the transfer
of the Preferred Stock. Legends shall be placed on the certificates
evidencing the Securities to the effect that such Securities have not been
registered under the Securities Act or applicable state securities laws and
that such Securities are subject to certain restrictions on transfer
imposed by this Subscription Agreement, and appropriate notations to such
effect will be made in the Company's stock transfer books.
(j) The Purchaser has adequate means of providing for his current needs
and foreseeable personal contingencies and has no need for his investment
in the Securities to be liquid.
(k) The Purchaser is aware that an investment in the Securities involves
significant risks.
(l) The Purchaser is an "accredited investor," within the meaning of Rule
501(a) of Regulation D under the Securities Act ("Regulation D"), because
(i) he is a natural person who has a net worth or joint net worth with his
spouse in excess of $1,000,000 as of the date hereof; (ii) he is a natural
person who had an individual income in excess of $200,000 in each of the
two most recent calendar years [or a joint income with his spouse in excess
of $300,000 in each of those years] and has a reasonable expectation of
reaching the same income level in the current year; and (iii) he is a
director and an
2
executive officer of the Company. As used in this Subscription Agreement,
the term "net worth" means the excess of total assets over total
liabilities.(2)
(m) The Purchaser has had the opportunity to obtain any additional
information necessary to verify the accuracy of the SEC Filings and all
other documents received or reviewed by him in connection with the purchase
of the Securities and has had the opportunity to meet with representatives
of the Company and to have them answer any questions and provide additional
information regarding the terms and conditions of this particular
investment and the finances, operations, business and prospects of the
Company deemed relevant by the Purchaser and all such questions have been
answered and requested information provided to his full satisfaction.
(n) The Purchaser represents to the Company that the information contained
herein is complete and accurate and understands that such information is
being relied upon by the Company in determining the availability of an
exemption from registration under Federal and State securities laws in
connection with the offering and sale of the Securities. The Purchaser
further represents and warrants that he will notify the Company immediately
upon the occurrence of any material change therein occurring prior to the
Company's issuance of any Securities.
(o) The Purchaser has significant prior investment experience, including
investment in non-listed and non-registered securities. The Purchaser has a
sufficient net worth to sustain a loss of his entire investment in the
Securities if such a loss should occur. The Purchaser's overall commitment
to investments that are not readily marketable is not excessive in view of
his net worth and financial circumstances and the purchase of the
Securities will not cause such commitment to become excessive. The
investment is a suitable one for the Purchaser.
(p) If the Purchaser is paying a portion of the Purchase Price by delivery
of a Promissory Note, the Purchaser has, and shall maintain at all times
until such time that the Purchaser's obligations under the Promissory Note
are satisfied in full, unencumbered assets (other than the Securities)
having an aggregate value sufficient for the repayment of the Purchaser's
obligations under the Promissory Note
4. Representations and Warranties of the Company. The Company hereby
represents and warrants to the Purchaser as follows:
(a) The Company is duly incorporated, validly existing and in good
standing under the laws of its state of incorporation.
(b) The Company has duly authorized by all requisite corporate action the
issuance and sale of the Preferred Stock in accordance with the terms of
this Subscription Agreement and the issuance of the Class A Stock upon
conversion of the Preferred Stock in accordance with the Certificate of
Designation.
5. Indemnification. The Purchaser agrees to indemnify and hold harmless the
Company, its officers, directors, employees, agents, control persons and
affiliates against all losses, liabilities, claims, damages, and expenses
(including, but not limited to, any and all expenses incurred in investigating,
preparing, or defending against any litigation commenced or threatened) by
reason of or arising out of any actual or alleged false representation or
misrepresentation or warranty or breach or omission to state a material fact by
the Purchaser of any agreement herein or in any other document delivered in
connection with this Subscription Agreement.
6. Binding Effect. The Purchaser hereby acknowledges and agrees that this
Subscription Agreement shall survive the death or disability of the Purchaser
and shall be binding upon and inure to the benefit of the parties and their
heirs, executors, administrators, successors, legal representatives, and
permitted assigns.
7. Notices. Any notice or other communication required or permitted to be
given hereunder shall be in writing and shall be mailed by certified mail,
return receipt requested, or personally delivered to the party to whom it is to
be given (a) if to Company, at the address set forth above, or (b) if to the
Purchaser, at the
------------
(2) This representation is subject to change depending upon whether the
Purchaser is a natural person or a business entity and, with respect to the
bracketed portion, the state of the Purchaser's residence.
3
address set forth on the signature page hereof (or, in either case, to such
other address as the party shall have furnished in writing in accordance with
the provisions of this Section 7). Any notice or other communication given by
certified mail shall be deemed given at the time of certification thereof,
except for a notice changing a party's address which shall be deemed given at
the time of receipt thereof. Any notice or other communication personally
delivered shall be deemed given at the time of such personal delivery.
8. Assignability; Transfer Restrictions. This Subscription Agreement and the
rights, interests and obligations hereunder are not transferable or assignable
by the Purchaser. The Purchaser further agrees that he shall not, (a) offer,
transfer, pledge, encumber, contract to do any of the foregoing or otherwise
transfer or dispose of, whether or not for or without consideration
("Transfer"), directly or indirectly, any of the Securities to any person or
other entity whatsoever except in accordance with all applicable laws, including
Federal and State securities laws, or (b) Transfer, directly or indirectly, any
shares of Preferred Stock to any person or other entity whatsoever without the
prior written consent of Liberty Media, and that any purported Transfer in
violation of (a) or (b) shall be null and void.
9. Applicable Law. This Subscription Agreement shall be governed by and
construed in accordance with the internal laws of the State of Colorado without
regard to its conflicts of law principles. The Purchaser hereby irrevocably
submits to the jurisdiction of any Colorado State or United States Federal court
sitting in the City and County of Denver over any action or proceeding arising
out of or relating to this Subscription Agreement or any agreement contemplated
hereby, and the Purchaser hereby irrevocably agrees that all claims in respect
of such action or proceeding may be heard and determined in such Colorado State
or Federal court. The Purchaser further waives any objection to venue in such
State and any objection to any action or proceeding in such State on the basis
of a non-convenient forum. The Purchaser further agrees that any action or
proceeding brought against the Company shall be brought only in Colorado State
or United States Federal courts sitting in the City and County of Denver. THE
PURCHASER AGREES TO WAIVE HIS RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF
ACTION BASED UPON OR ARISING OUT OF THIS SUBSCRIPTION AGREEMENT OR ANY DOCUMENT
OR AGREEMENT CONTEMPLATED HEREBY.
10. Miscellaneous.
(a) This Subscription Agreement constitutes the entire agreement between the
Purchaser and the Company with respect to the subject matter hereof and
supersedes all prior oral or written agreements and understandings, if any,
relating to the subject matter hereof. The terms and provisions of this
Subscription Agreement may be modified or waived, or consent for the departure
therefrom granted, only by a written document executed by the party against whom
enforcement of such modification, waiver or consent is sought.
(b) The Purchaser's representations and warranties made in this Subscription
Agreement shall survive the execution and delivery hereof and he delivery of the
Securities.
(c) Each of the parties hereto shall pay its own fees and expenses (including
the fees of any attorneys, accountants, appraisers or other engaged by such
party) in connection with this Subscription Agreement and the transactions
contemplated hereby.
(d) This Subscription Agreement may be executed in one or more counterparts
each of which shall be deemed an original, but all of which shall together
constitute one and the same instrument.
(e) Each provision of this Subscription Agreement shall be considered separable
and if for any reason any provision or provisions hereof are determined to be
invalid or contrary to applicable law, such invalidity shall not impair the
operation of or affect the remaining portions of this Subscription Agreement.
(f) Paragraph titles are for descriptive purposes only and shall not control or
alter the meaning of this Subscription Agreement as set forth in the text.
(g) Liberty Media is an intended beneficiary of the final sentence of paragraph
1, clause (p) of paragraph 3 and clause (b) of paragraph 8, and Purchaser
acknowledges and agrees that Liberty Media would be irreparably harmed by any
breach of the final sentence of paragraph 1, clause (p) of paragraph 3 or any
direct or indirect Transfer of the Preferred Stock in violation of clause (b) of
paragraph 8, and could not be made
4
whole by monetary damages. Accordingly, Liberty Media, in addition to any other
remedy to which it may be entitled at law or in equity as an intended
beneficiary of such provisions, shall be entitled to compel specific performance
of such provisions.
IN WITNESS WHEREOF, the undersigned have executed this Subscription Agreement
this day of , 2002.
--------------------------------------
Name:
Address:
SUBSCRIPTION ACCEPTED AND AGREED
this day of , 2002
UNITEDGLOBALCOM, INC., a Delaware corporation
By:
---------------------------------------------
Name:
---------------------------------------------
Title:
---------------------------------------------
5
EXHIBIT 2.2(b)
FORM OF FOUNDER NEWCO
AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER (this "Agreement") is entered into as
of the ____ day of ________, 2002 by and between ____________, a Delaware
limited liability company ("Newco") and New UnitedGlobalCom, Inc., a Delaware
corporation ("United" and, together with Newco, the "Constituent Entities"),
pursuant to Section 264 of the General Corporation Law of the State of Delaware
and Section 18-209 of the Limited Liability Company Act of the State of
Delaware.
WITNESSETH
WHEREAS, each of the Constituent Entities desires that Newco merge with
and into United, with United as the surviving entity in such merger,
NOW, THEREFORE, the Constituent Entities, in consideration of the
mutual covenants, agreements and provisions set forth herein, do hereby
prescribe the terms and conditions of said merger and mode of carrying the same
into effect as follows:
FIRST: At the Effective Time (as defined below), Newco shall merge with
and into United (the "Merger"), with United being the surviving entity in the
Merger (the "Surviving Entity").
SECOND: The Certificate of Incorporation and By-laws of United as in
effect at the Effective Time, shall continue in full force and effect as the
Certificate of Incorporation and By-laws of the Surviving Entity, until such
time as they may be altered, amended, restated or repealed in accordance with
their respective terms.
THIRD: The manner of converting the outstanding shares of the capital
stock and the outstanding limited liability company interests of each of the
Constituent Entities into shares or other securities of the Surviving Entity
shall be as follows:
(a) Each share of capital stock of United that is issued and
outstanding at the Effective Time shall remain issued and outstanding following
the Merger and shall be unchanged as a result of the Merger.
(b) The entire limited liability company interest of Newco held by the
sole member of Newco shall automatically be converted at the Effective Time into
___ shares of the Class B Common Stock, par value $0.01 per share, of the
Surviving Entity.
FOURTH: The other terms and conditions of the Merger are as follows:
(a) The directors and officers of United shall be the directors and
officers of the
Surviving Entity and shall continue in office until the next annual meeting of
the stockholders of the Surviving Entity and until their respective successors
shall have been elected and qualified.
(b) The Merger shall become effective upon the filing of a duly
executed Certificate of Merger with the Secretary of State of the State of
Delaware (the "Effective Time"), in the form attached hereto as Exhibit A (the
"Certificate of Merger").
(c) From and after the Effective Time, all the property, rights,
privileges, franchises, patents, trademarks, licenses, registrations and other
assets of every kind and description of Newco shall be transferred to, vested in
and devolve upon the Surviving Entity without further act or deed and all
property, rights, and every other interest of the Surviving Entity and the Newco
shall be the property of the Surviving Entity to the same extent as they were of
the Surviving Entity and Newco, respectively, prior to the Merger. Newco and the
sole member of Newco hereby agree from time to time, as and when requested by
the Surviving Entity or by its successors or assigns, to execute and deliver or
cause to be executed and delivered all such deeds, stock powers, assignments and
other instruments and to take or cause to be taken such further or other actions
as the Surviving Entity may deem to be necessary or desirable in order to vest
in and confirm to the Surviving Entity title to and possession of any property
or assets of Newco acquired by reason of or as a result of the Merger and
otherwise to carry out the intent and purposes hereof, and the proper officers
and members of Newco and the proper officers and directors of the Surviving
Entity are fully authorized, in the name of Newco or otherwise, to take any and
all such action.
FIFTH: Prior to filing the Certificate of Merger, this Agreement shall
be approved and adopted by the sole member of Newco and the sole stockholder of
United.
SIXTH: Anything herein or elsewhere to the contrary notwithstanding,
this Agreement may be terminated and abandoned by the Board of Directors or sole
member, as applicable, of the Constituent Entities at any time prior to the
Effective Time. This Agreement may be amended by the Board of Directors or sole
member, as applicable, of the Constituent Entities at any time prior to the
Effective Time, provided that an amendment made subsequent to the adoption of
this Agreement by the sole stockholder or sole member, as applicable, of any
Constituent Entity shall not (1) alter or change the amount or kind of shares to
be received in exchange for the limited liability company interests of Newco or
(2) alter or change any of the terms and conditions of the Agreement if such
alteration or change would adversely affect the holders of any of the shares of
any class or series or any of the limited liability company interests of such
Constituent Entity.
2
IN WITNESS WHEREOF, the parties to this Agreement have executed this
Agreement as of the day and year first written above.
NEW UNITEDGLOBALCOM, INC.,
a Delaware corporation
By:
--------------------------------------
Name:
------------------------------------
Its:
-------------------------------------
[FOUNDER NEWCO],
a Delaware limited liability company
By:
--------------------------------------
Name:
------------------------------------
Its:
-------------------------------------
-----------------------------------------
[Founder]
(solely for purposes of paragraph (c) of
Article Fourth)
EXHIBIT A
FORM OF
CERTIFICATE OF MERGER
MERGING
[FOUNDER NEWCO], A DELAWARE LIMITED LIABILITY COMPANY
WITH AND INTO
NEW UNITEDGLOBALCOM, INC., A DELAWARE CORPORATION
THIS CERTIFICATE OF MERGER is hereby submitted pursuant to Section 264
of the General Corporation Law of the State of Delaware and Section 18-209 of
the Limited Liability Company Act of the State of Delaware.
1. The name and state of incorporation of the constituent entities (the
"Constituent Entities") are [Founder Newco], a Delaware limited liability
company ("Newco"), and New UnitedGlobalCom, Inc., a Delaware corporation
("United").
2. An Agreement and Plan of Merger (the "Agreement") has been approved,
adopted, certified, executed and acknowledged by each of the Constituent
Entities in accordance with the provisions of Section 264 of the General
Corporation Law of the State of Delaware and Section 18-209 of the Limited
Liability Company Act of the State of Delaware.
3. The name of the surviving entity is New UnitedGlobalCom, Inc. (the
"Surviving Entity").
4. The merger will become effective upon the filing of this Certificate
of Merger with the Secretary of State of the State of Delaware (the "Effective
Time").
5. At the Effective Time, the Certificate of Incorporation of United as
heretofore amended and as in effect on the date of the merger shall continue in
full force and effect as the Certificate of Incorporation of the Surviving
Entity.
6. The executed Agreement is on file at the principal place of business
of the Surviving Entity. Such address is 0000 Xxxxx Xxxxxx Xxxxxx, Xxxxx 0000,
Xxxxxx, Xxxxxxxx 00000.
7. A copy of the Agreement will be furnished by the Surviving Entity,
on request and without cost, to any stockholder or member of any Constituent
Entity.
IN WITNESS WHEREOF, this Certificate of Merger has been executed this
____ day of ________, 2002.
SURVIVING ENTITY:
NEW UNITEDGLOBALCOM, INC.,
a Delaware corporation
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
CERTIFICATE OF THE SECRETARY OF NEW UNITEDGLOBALCOM, INC.
I, Xxxxx X. Xxxxxxxx, the Secretary of New UnitedGlobalCom, Inc., a
Delaware corporation (the "Surviving Entity"), hereby certify, as such
Secretary, that the Agreement and Plan of Merger to which this Certificate is
attached, has been (a) duly adopted pursuant to Section 141 of the General
Corporation Law of the State of Delaware by the Board of Directors of the
Surviving Entity by the written consent of all of the directors of the Surviving
Entity, (b) duly executed on behalf of the Surviving Entity and [Newco], a
Delaware limited liability company, and (c) duly adopted pursuant to Section 228
of the General Corporation Law of the State of Delaware by the written consent
of the sole stockholder holding 100% of the issued and outstanding shares of the
Surviving Entity's capital stock, which Agreement and Plan of Merger was thereby
adopted as the act of the stockholders of the Surviving Entity, and the duly
adopted agreement and act of the Surviving Entity.
Witness my hand this ____ day of __________, 2002.
------------------------------------
Xxxxx X. Xxxxxxxx
Vice President of Business and Legal
Affairs and Secretary
EXHIBIT 2.3
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement") is made and entered into
this day of , 2002, between Liberty Media Corporation, a
Delaware corporation (the "Company"), UnitedGlobalCom, Inc., a Delaware
corporation ("UGC"), and United International Properties, Inc., a Colorado
corporation and wholly owned subsidiary of UGC ("UIPI", and together with UGC,
the "Purchasers").
This Agreement is made pursuant to the Merger Agreement, dated December 3, 2001,
among UGC, New UnitedGlobalCom, Inc., a Delaware corporation, United/New United
Merger Sub, Inc., a Delaware corporation, the Company, Liberty Media
International, Inc., a Delaware corporation, Liberty Global, Inc., a Delaware
corporation, and each Person indicated as a "Founder" on the signature pages
thereto (the "Merger Agreement"), which provides, in part, for the sale by the
Company to the Purchasers of an aggregate of $ original principal
amount of the Company's % Senior Notes due 2009 (the "Notes"). Pursuant to
Section 2.3 of the Merger Agreement, the Company has agreed to provide to the
Purchasers the registration rights set forth in this Agreement.
In consideration of the foregoing, the parties hereto agree as follows:
1. Definitions.
As used in this Agreement, the following capitalized defined terms shall have
the following meanings:
"1933 Act" shall mean the Securities Act of 1933, as amended from time to
time.
"1934 Act" shall mean the Securities Exchange Act of 1934, as amended from
time to time.
"Agreement" shall have the meaning set forth in the preamble.
"Business Day" shall mean a day that is not a Saturday, a Sunday, or a day
on which banking institutions in New York, New York are authorized or
required to be closed.
"Closing Date" shall mean the Closing Date as defined in the Merger
Agreement.
"Company" shall have the meaning set forth in the preamble and shall also
include the Company's successors.
"Indenture" shall mean the Indenture relating to the Notes, dated as of
July 7, 1999, between the Company and The Bank of New York, as trustee, as
supplemented by the Ninth Supplemental Indenture, dated as of ,
2002, between the Company and The Bank of New York, as trustee, as the same
may be amended, supplemented, waived or otherwise modified from time to
time in accordance with the terms thereof.
"Merger Agreement" shall have the meaning set forth in the second paragraph
of this Agreement.
"Named Purchasers" shall mean those Purchasers who are named as selling
security holders in the Shelf Registration Statement.
"Notes" shall have the meaning set forth in the second paragraph of this
Agreement.
"Person" shall mean an individual, partnership (general or limited),
corporation, limited liability company, trust or unincorporated
organization, or a government or agency or political subdivision thereof.
"Prospectus" shall mean the prospectus included in the Shelf Registration
Statement, including any preliminary prospectus, and any such prospectus as
amended or supplemented by any prospectus supplement, including any such
prospectus supplement with respect to the terms of the offering of the
Registrable Notes covered by the Shelf Registration Statement, and by all
other amendments and supplements to a prospectus, including post-effective
amendments, and in each case including all material incorporated by
reference therein.
1
"Purchasers" shall have the meaning set forth in the preamble and shall
also include any Permitted Assignees.
"Registrable Notes" shall mean the Notes; provided, however, that a
particular Note shall cease to be a Registrable Note for purposes of this
Agreement: (i) when a Shelf Registration Statement covering such Note shall
have been declared effective under the 1933 Act and such Note shall have
been disposed of pursuant to such Shelf Registration Statement; (ii) when
such Note has been sold to the public pursuant to Rule 144 under the 1933
Act; (iii) when such Note shall have ceased to be outstanding; (iv) when
such Note shall have become saleable pursuant to Rule 144(k) under the 1933
Act; or (v) when such Note is sold, transferred or disposed of to any
Person other than a Subsidiary of the Purchaser selling, transferring or
disposing of such Note.
"Registration Expenses" shall mean any and all expenses incident to the
performance of or compliance by the Company with this Agreement, including
without limitation: (i) all SEC filing fees, (ii) all fees and expenses
incurred in connection with compliance with state securities or blue sky
laws, (iii) all expenses of any Persons in preparing or assisting in
preparing, word processing, printing and distributing any Shelf
Registration Statement, any Prospectus, any amendments or supplements
thereto, any underwriting agreements, securities sales agreements and other
documents relating to the performance of and compliance with this
Agreement, (iv) all rating agency fees, (v) the fees and disbursements of
counsel for the Company and of the independent public accountants of the
Company, including the expenses of any "cold comfort" letters required by
or incident to such performance and compliance, (vi) the fees and expenses
of the Trustee, and any escrow agent or custodian, (vii) the fees of The
Depositary Trust Company ("DTC"), as depositary for the Registrable Notes;
and (viii) the reasonable fees and disbursements of a single counsel
representing the Purchasers in connection with preparing and filing the
initial Shelf Registration Statement or any amendments or supplements
thereto.
"SEC" shall mean the Securities and Exchange Commission or any successor
agency or government body performing the functions currently performed by
the United States Securities and Exchange Commission.
"Shelf Registration" shall mean a registration effected pursuant to Section
2.1 hereof.
"Shelf Registration Statement" shall mean a "shelf" registration statement
of the Company pursuant to the provisions of Section 2.1 hereof, which
covers the resale of all of the Registrable Notes, and all amendments to
such registration statement, including post-effective amendments, in each
case including the Prospectus contained therein, all exhibits thereto and
all material incorporated by reference therein.
"Subsidiary," when used with respect to any Person, shall mean any
corporation or other organization, whether incorporated or unincorporated,
of which such Person or any other Subsidiary of such Person is a general
partner or more than 50% of the securities or other interests having by
their terms ordinary voting power to elect more than 50% of the board of
directors or others performing similar functions with respect to such
corporation or other organization is directly or indirectly owned or
controlled by such Person, by any one or more of its Subsidiaries, or by
such Person and one or more of its Subsidiaries.
"Trustee" shall mean the trustee with respect to the Notes under the
Indenture.
2. Registration Under the 1933 Act.
2.1 Shelf Registration. At any time following the Closing Date, upon the
Company's receipt of a written request (the "Request") from all Purchasers
holding Registrable Notes that the Company effect the registration under the
Securities Act of all such Registrable Notes (the date of such receipt being the
"Request Date"), the Company will use commercially reasonable efforts to (a)
prepare and, as soon as practicable but not later than 60 days following the
Request Date, file with the SEC a Shelf Registration Statement on an appropriate
form under the 1933 Act covering resales of the Registrable Notes, which shall
include a plan of distribution requested by the Purchasers holding all of the
Registrable Notes that complies with the transaction requirements of the
appropriate form under the 1933 Act to be filed by the Company with respect to
Registrable Notes, (b) cause the Shelf Registration Statement to be declared
effective under the
2
1933 Act as soon as practicable but not later than 180 days of the Request Date,
(c) keep the Shelf Registration Statement continuously effective in order to
permit the Prospectus forming part thereof to be usable by the Named Purchasers
for a period of 180 days following the date on which the Shelf Registration
Statement becomes effective, or for such shorter period that will terminate when
all Registrable Notes covered by the Shelf Registration Statement have been sold
pursuant to the Shelf Registration Statement, exchanged or redeemed in
accordance with their terms or otherwise cease to be outstanding or become
saleable pursuant to Rule 144(k) under the 1933 Act (the "Effectiveness
Period"), and (d) notwithstanding any other provisions hereof, ensure that (i)
the Shelf Registration Statement and any amendment thereto and any Prospectus
forming part thereof and any supplement thereto complies in all material
respects with the 1933 Act and the rules and regulations thereunder, (ii) the
Shelf Registration Statement and any amendment thereto does not, when it becomes
effective, contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading and (iii) any Prospectus forming part of the Shelf
Registration Statement, and any supplement to such Prospectus (as amended or
supplemented from time to time), does not include an untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements, in light of the circumstances under which they were made, not
misleading. Notwithstanding the foregoing, if during the Effectiveness Period,
the Company is unable to file with the SEC, or have reviewed or declared
effective, a Shelf Registration Statement due to the application of Rule 3-01(c)
of Regulation S-X (a "Blackout Period"), then the applicable Effectiveness
Period shall be extended (A) in the case of the Company being unable to file (or
the SEC advising the Company that it will not review the Shelf Registration
Statement until financial statements for the most recent fiscal year of the
Company are included in the filing), for a period equal to the Blackout Period
plus 45 calendar days and (B) in the case of the Company's having filed a Shelf
Registration Statement (and not having been informed by the SEC to the effect
set forth in the preceding parenthetical) but being unable to have it declared
effective, for a period equal to the Blackout Period plus ten calendar days.
Notwithstanding the foregoing, in no event shall an Effectiveness Period exceed
a period of 270 calendar days.
The Company shall not permit any securities other than Registrable Notes to be
included in the Shelf Registration Statement. The Company further agrees, if
necessary, to supplement or amend the Shelf Registration Statement and the
Prospectus, as required by Section 3(b) below, and to furnish to the Named
Purchasers copies of any such supplement or amendment as promptly as reasonably
practicable after filing with the SEC.
2.2 Expenses. The Company shall pay all Registration Expenses in connection
with the registration pursuant to Section 2.1 hereof. In addition to such
Registration Expenses, if a Named Purchaser incurs any underwriting expenses,
discounts, commissions, transfer taxes or other selling costs, if any, relating
to the sale or disposition of such Named Purchaser's Registrable Notes pursuant
to the Shelf Registration Statement, the Company shall reimburse such Named
Purchaser for any such expenses incurred in an amount not to exceed 0.50% of the
aggregate principal amount of the Registrable Notes sold or disposed of in such
transaction.
2.3 Effectiveness. (a) The Company will be deemed not to have used
commercially reasonable efforts to cause the Shelf Registration Statement to
become, or to remain, effective during the requisite period if the Company
voluntarily takes any action that would, or omits to take any action which
omission would, result in any Shelf Registration Statement not being declared
effective or in the Named Purchasers covered thereby not being able to offer and
sell their Registrable Notes during that period as and to the extent
contemplated hereby, unless (i) such action is required by applicable law, or
(ii) such action is taken by the Company in good faith and for valid business
reasons (not including avoidance of the Company's obligations hereunder),
including the acquisition or divestiture of assets, so long as the Company
promptly thereafter complies with the requirements of Section 3(j) hereof, if
applicable.
Notwithstanding anything to the contrary contained herein, if at any time after
the filing or effectiveness of a Shelf Registration Statement the Company
determines, in its reasonable business judgment, that such registration and the
offering of Registrable Notes pursuant thereto could interfere with or otherwise
adversely affect any financing, acquisition, corporate reorganization, or other
material transaction or development involving the Company, or require the
Company to disclose matters that otherwise would not be required to be disclosed
at such time, then the Company may require the suspension by Named Purchasers,
for a period of
3
up to 45 calendar days (during which time the Effectiveness Period, if
applicable, will be suspended and which time the Effectiveness Period will
resume and will be extended for a period equal to such suspension period), of
the distribution of any of the Registrable Notes pursuant to such Shelf
Registration Statement by giving written notice to the Named Purchasers. Any
such notice need not specify the reasons for such suspension if the Company
determines, in its reasonable business judgment, that doing so would interfere
with or adversely affect such transaction or development or would result in the
disclosure of material non-public information to such Named Purchasers. Any such
suspension shall continue until the earlier to occur of the expiration of such
45-calendar-day period and the determination of the Company, notice of which is
given to the Named Purchasers, that such registration and offering would no
longer have an effect described in the first sentence of this paragraph. The
Company may not require the suspension by Named Purchasers of the distribution
of Registrable Notes pursuant to this paragraph more than twice.
(b) A Shelf Registration Statement will not be deemed to have become effective
unless it has been declared effective by the SEC; provided, however, that if,
after it has been declared effective, the offering of Registrable Notes pursuant
to a Shelf Registration Statement is interfered with by any stop order,
injunction or other order or requirement of the SEC or any other governmental
agency or court, the Shelf Registration Statement will be deemed not to have
become effective during the period of such interference, until the offering of
Registrable Notes pursuant to the Shelf Registration Statement may legally
resume.
3. Registration Procedures.
In connection with the obligations of the Company with respect to the Shelf
Registration Statement, the Company shall:
(a) prepare and file with the SEC a Shelf Registration Statement, within
the relevant time period specified in Section 2 hereof, on the appropriate
form under the 1933 Act, which form (i) shall be selected by the Company,
(ii) shall be available for the sale of the Registrable Notes by the Named
Purchasers, (iii) shall comply as to form in all material respects with the
requirements of the applicable form and include or incorporate by reference
all financial statements required by the SEC to be filed therewith or
incorporated by reference therein, and (iv) shall comply in all respects
with the requirements of Regulation S-T under the 1933 Act;
(b) prepare and file with the SEC such amendments and post-effective
amendments to the Shelf Registration Statement as may be necessary under
applicable law to keep the Shelf Registration Statement effective for the
Effectiveness Period; and cause each Prospectus to be supplemented by any
required prospectus supplement, and as so supplemented to be filed pursuant
to Rule 424 (or any similar provision then in force) under the 1933 Act and
comply with the provisions of the 1933 Act, the 1934 Act and the rules and
regulations thereunder applicable to them with respect to the disposition
of all Registrable Notes covered by the Shelf Registration Statement during
the Effectiveness Period in accordance with the plan of distribution
included in the Prospectus;
(c) (i) notify the Named Purchasers, at least ten Business Days prior to
filing, that a Shelf Registration Statement with respect to the Registrable
Notes is being filed and advising the Named Purchasers that the
distribution of Registrable Notes may only be made under the Shelf
Registration in accordance with one of the methods prescribed in the plan
of distribution included in the Shelf Registration Statement; (ii) furnish
to each Named Purchaser and to each underwriter of an underwritten offering
of Registrable Notes, if any, without charge, as many copies of each
Prospectus, including each preliminary Prospectus, and any amendment or
supplement thereto and such other documents as such Named Purchaser or
underwriter may reasonably request, including financial statements and
schedules and, if the Named Purchaser so requests, all exhibits in order to
facilitate the public sale or other disposition of the Registrable Notes;
and (iii) hereby consent to the use of the Prospectus or any amendment or
supplement thereto by each of the Named Purchasers in connection with the
offering and sale of the Registrable Notes covered by the Prospectus or any
amendment or supplement thereto;
(d) use commercially reasonable efforts to register or qualify the
Registrable Notes under all applicable state securities or "blue sky" laws
of such jurisdictions as any Named Purchaser and each underwriter of
4
an underwritten offering of Registrable Notes shall reasonably request by
the time the Shelf Registration Statement is declared effective by the SEC,
and do any and all other acts and things which may be reasonably necessary
or advisable to enable each such Named Purchaser and underwriter to
consummate the disposition in each such jurisdiction of the Registrable
Notes owned by such Named Purchaser; provided, however, that the Company
shall not be required to (i) qualify as a foreign corporation or as a
dealer in securities in any jurisdiction where it would not otherwise be
required to qualify but for this Section 3(d), (ii) take any action which
would subject it to general service of process or taxation in any such
jurisdiction where it is not then so subject, or (iii) conform its
capitalization or the composition of its assets at the time to the
securities or blue sky laws of such jurisdiction;
(e) notify promptly each Named Purchaser (i) when the Shelf Registration
Statement has become effective and when any post-effective amendments and
supplements thereto become effective, (ii) of any request by the SEC or any
state securities authority for post-effective amendments and supplements to
the Shelf Registration Statement and Prospectus or for additional
information after the Registration Statement has become effective, (iii) of
the issuance by the SEC or any state securities authority of any stop order
suspending the effectiveness of the Shelf Registration Statement or the
initiation of any proceedings for that purpose, (iv) if, between the
effective date of the Shelf Registration Statement and the closing of any
sale of Registrable Notes covered thereby, the representations and
warranties of the Company contained in any underwriting agreement,
securities sales agreement or other similar agreement, if any, relating to
the offering cease to be true and correct in all material respects, (v) of
the happening of any event or the discovery of any facts during the period
the Shelf Registration Statement is effective which makes any statement
made in the Shelf Registration Statement or the related Prospectus untrue
in any material respect or which requires the making of any changes in the
Shelf Registration Statement or Prospectus in order to make the statements
therein not misleading, (vi) of the receipt by the Company of any
notification with respect to the suspension of the qualification of the
Registrable Notes for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose and (vii) of any
determination by the Company that a post-effective amendment to the Shelf
Registration Statement would be appropriate;
(f) furnish to a single counsel for the Named Purchasers copies of any
comment letters received from the SEC or any other request by the SEC or
any state securities authority for amendments or supplements to a Shelf
Registration Statement and Prospectus or for additional information;
(g) make every commercially reasonable effort to obtain the withdrawal of
any order suspending the effectiveness of the Shelf Registration Statement
at the earliest possible moment;
(h) furnish to each Named Purchaser, and each underwriter, if any, without
charge, at least one conformed copy of the Shelf Registration Statement and
any post-effective amendment thereto, including financial statements and
schedules (without documents incorporated therein by reference and all
exhibits thereto, unless requested);
(i) facilitate the timely preparation, and delivery to DTC (if permissible
under DTC's rules) of, a global certificate representing the Registrable
Notes that are available for sell under the Shelf Registration Statement,
which certificate shall not bear any restrictive legends, and
simultaneously with the delivery of such certificate, cause the
cancellation of the certificates representing Registrable Notes delivered
to the Purchasers on the Closing Date;
(j) upon the occurrence of any event or the discovery of any facts, such as
contemplated by Sections 3(e)(v) and 3(e)(vii) hereof, as promptly as
practicable after the occurrence of such an event, use commercially
reasonable efforts to prepare a supplement or post-effective amendment to
the Shelf Registration Statement or the related Prospectus or any document
incorporated therein by reference or file any other required document so
that, as thereafter delivered to the purchasers of the Registrable Notes,
such Prospectus will not contain at the time of such delivery any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements therein, in light of the circumstances under which they
were made, not misleading. At such time as such public disclosure is
otherwise made or the Company determines that such disclosure is not
necessary, in each case to correct
5
any misstatement of a material fact or to include any omitted material
fact, the Company agrees promptly to notify each Named Purchaser of such
determination and to furnish each Named Purchaser such number of copies of
the Prospectus as amended or supplemented, as such Named Purchaser may
reasonably request;
(k) obtain a CUSIP number for the global certificate referred to in Section
3(i) above, not later than the effective date of the Shelf Registration
Statement;
(l) (i) cause the Indenture to be qualified under the Trust Indenture Act
of 1939, as amended, (the "TIA") in connection with the registration of the
Registrable Notes, (ii) cooperate with the Trustee and the Named Purchasers
to effect such changes to the Indenture as may be required for the
Indenture to be so qualified in accordance with the terms of the TIA, and
(iii) execute, and use commercially reasonable efforts to cause the Trustee
to execute, all documents as may be required to effect such changes, and
all other forms and documents required to be filed with the SEC to enable
the Indenture to be so qualified in a timely manner;
(m) enter into agreements (including underwriting agreements containing
usual and customary terms) and take all other customary and appropriate
actions in order to expedite or facilitate the disposition of such
Registrable Notes and in such connection whether or not an underwriting
agreement is entered into and whether or not the registration is an
underwritten registration:
(i) make such representations and warranties to the Named Purchasers and
the underwriters, if any, in form, substance and scope as are
customarily made by issuers to underwriters in similar underwritten
offerings or as may be reasonably requested by them;
(ii) obtain opinions of counsel to the Company (which counsel and
opinions (in form, scope and substance) shall be reasonably satisfactory
to the managing underwriters, if any) addressed to the Named Purchasers
and the underwriters, if any, covering the matters customarily covered
in opinions requested in sales of securities or underwritten offerings
and such other matters as may be reasonably requested by such
underwriters or the Named Purchasers;
(iii) in the case of an underwritten offering, obtain "cold comfort"
letters and updates thereof from the Company's independent certified
public accountants (and, if necessary, any other independent certified
public accountants of any subsidiary of the Company or of any business
acquired by the Company for which financial statements are, or are
required to be, included in the Shelf Registration Statement) addressed
to the underwriters, such letters to be in customary form and covering
matters of the type customarily covered in "cold comfort" letters to
underwriters in connection with similar underwritten offerings;
(iv) enter into a securities sales agreement with the Named Purchasers
and an agent of the Named Purchasers providing for, among other things,
the appointment of such agent for Named Purchasers for the purpose of
soliciting purchases of Registrable Notes, which agreement shall be in
form, substance and scope customary for similar offerings;
(v) if an underwriting agreement is entered into, cause the same to set
forth indemnification provisions and procedures substantially equivalent
to the indemnification provisions and procedures set forth in Section 4
hereof with respect to the underwriters and all other parties to be
indemnified pursuant to said Section or, at the request of any
underwriters, in the form customarily provided to such underwriters in
similar types of transactions; and
(vi) deliver such documents and certificates as may be reasonably
requested and as are customarily delivered in similar offerings to the
Named Purchasers and the managing underwriters, if any.
The above shall be done at (i) the effectiveness of the Shelf Registration
Statement (and each post-effective amendment thereto) and (ii) each closing
under any underwriting or similar agreement as and to the extent required
thereunder;
6
(n) at least ten Business Days prior to filing the Shelf Registration
Statement or any amendment to the Shelf Registration Statement or the
Prospectus or any supplement to the Prospectus, provide copies of such
document to the Named Purchasers and their counsel and to the underwriter
or underwriters of an underwritten offering of Registrable Notes, if any,
make such changes in any such document prior to the filing thereof as the
Named Purchasers or their counsel or the underwriter or underwriters
reasonably request and not file any such document in a form to which the
Named Purchasers or their counsel or any underwriter shall not have
previously been advised and furnished a copy of or to which the Named
Purchasers or their counsel or any underwriter shall reasonably object, and
make the representatives of the Company available for discussion of such
document as shall be reasonably requested by the Named Purchasers or their
counsel or any underwriter; provided, however, that the rights of each
Named Purchaser pursuant to this Section 3(n) shall survive only for so
long as such Named Purchaser holds any principal amount of Registrable
Notes;
(o) otherwise comply with all applicable rules and regulations of the SEC
and make available to its security holders, as soon as reasonably
practicable, an earnings statement covering at least 12 months which shall
satisfy the provisions of Section 11(a) of the 1933 Act and Rule 158
thereunder; and
(p) cooperate and assist in any filings required to be made with the
National Association of Securities Dealers, Inc. and in the performance of
any customary due diligence investigation by any underwriter and its
counsel.
The Company may (as a condition to any Purchaser's participation in the Shelf
Registration) require each Purchaser to furnish to the Company such information
regarding itself and the proposed distribution by it of its Registrable Notes as
the Company may from time to time reasonably request in writing for use in
connection with the Shelf Registration Statement or Prospectus included therein,
including without limitation, information specified in Item 507 of Regulation
S-K under the 1933 Act.
Each Named Purchaser agrees that, upon receipt of any notice from the Company of
the happening of any event or the discovery of any facts, each of the kind
described in Section 3(e)(v) hereof, such Named Purchaser will forthwith
discontinue disposition of Registrable Notes pursuant to the Shelf Registration
Statement until such Named Purchaser's receipt of the copies of the supplemented
or amended Prospectus contemplated by Section 3(j) hereof, and, if so directed
by the Company, such Named Purchaser will deliver to the Company (at its
expense) all copies in such Named Purchaser's possession, other than permanent
file copies then in such Named Purchaser's possession, of the Prospectus
covering such Registrable Notes current at the time of receipt of such notice.
If any of the Registrable Notes covered by any Shelf Registration Statement are
to be sold in an underwritten offering, the underwriter or underwriters and
manager or managers that will manage such offering will be selected by the Named
Purchasers, provided such selection is reasonably acceptable to the Company. No
Named Purchaser may participate in any underwritten registration hereunder
unless such Named Purchaser (a) agrees to sell its Registrable Notes on the
basis provided in any underwriting arrangements approved by the Persons entitled
hereunder to approve such arrangements, and (b) completes and executes all
questionnaires, powers of attorney, indemnities, underwriting agreements and
other documents required under the terms of such underwriting arrangements.
4. Indemnification; Contribution.
(a) The Company agrees to indemnify and hold harmless each Named Purchaser, each
Person who participates as an underwriter (any such Person being an
"Underwriter"), each of the respective directors and officers of each of the
foregoing, and each Person, if any, who controls any Named Purchaser or
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and expense, as
incurred, arising out of any untrue statement or alleged untrue statement
of a material fact contained in the Shelf Registration Statement (or any
amendment or supplement thereto) pursuant to which Registrable Notes were
registered under the 1933 Act, including all documents incorporated therein
by reference, or the omission or alleged omission therefrom of a material
fact required to be stated therein or necessary to make the statements
7
therein not misleading, or arising out of any untrue statement or alleged
untrue statement of a material fact contained in any Prospectus (or any
amendment or supplement thereto) or the omission or alleged omission
therefrom of a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading;
(ii) against any and all loss, liability, claim, damage and expense, as
incurred, to the extent of the aggregate amount paid in settlement of any
litigation, or any investigation or proceeding by any governmental agency
or body, commenced or threatened, or of any claim based upon any such
untrue statement or omission, or any such alleged untrue statement or
omission; provided that (subject to Section 4(d) below) any such settlement
is effected with the written consent of the Company; and
(iii) against any and all expense, as incurred (including the fees and
disbursements of counsel chosen by any indemnified party as provided
herein), reasonably incurred in investigating or defending against any
litigation, or any investigation or proceeding by any governmental agency
or body, commenced or threatened, or any claim based upon any such untrue
statement or omission, or any such alleged untrue statement or omission, to
the extent that any such expense is not paid under subparagraph (i) or (ii)
above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by or
on behalf of a Named Purchaser or Underwriter expressly for use in the Shelf
Registration Statement (or any amendment thereto) or any Prospectus (or any
amendment or supplement thereto), and provided further, that the Company shall
not indemnify any Underwriter or any Person who controls such Underwriter from
any loss, liability, claim or damage (or expense incurred in connection
therewith) alleged by any Person who purchased Registrable Notes from such
Underwriter if the untrue statement, omission or allegation thereof upon which
such loss, liability, claim or damage is based was made in (i) any preliminary
prospectus, if a copy of the Prospectus (as then amended or supplemented if the
Company shall have furnished any amendments or supplements thereto) was not sent
or given by or on behalf of such Underwriter to such Person at or prior to the
written confirmation of the sale of Registrable Notes to such Person, and if the
Prospectus (as so amended or supplemented) corrected the untrue statement or
omission giving rise to such loss, claim, damage or liability; (ii) any
Prospectus used by such Underwriter or any Person who controls such Underwriter,
after such time as the Company advised the Underwriters that the filing of a
post-effective amendment or supplement thereto was required, except the
Prospectus as so amended or supplemented, if the Prospectus as amended or
supplemented by such post-effective amendment or supplement would not have given
rise to such loss, liability, claim or damage; or (iii) any Prospectus used
after such time as the obligation of the Company to keep the same current and
effective has expired.
(b) Each Named Purchaser severally, but not jointly, agrees to indemnify and
hold harmless the Company, any other Named Purchaser, each Underwriter, if any,
and each of their respective directors and officers, and each Person, if any,
who controls the Company, such other Named Purchaser or Underwriter within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act, against any
and all loss, liability, claim, damage and expense described in the indemnity
contained in Section 4(a) hereof, as incurred, but only with respect to untrue
statements or omissions, or alleged untrue statements or omissions, made in the
Shelf Registration Statement (or any amendment thereto) or any Prospectus
included therein (or any amendment or supplement thereto) in reliance upon and
in conformity with written information with respect to such Named Purchaser
furnished to the Company by or on behalf of such Named Purchaser expressly for
use in the Shelf Registration Statement (or any amendment thereto) or such
Prospectus (or any amendment or supplement thereto); provided, however, that no
such Named Purchaser shall be liable for any claims hereunder in excess of the
amount of net proceeds received by such Named Purchaser from the sale of
Registrable Notes pursuant to the Shelf Registration Statement.
(c) Each indemnified party shall give written notice as promptly as reasonably
practicable to each indemnifying party of any action or proceeding commenced
against it in respect of which indemnity may be sought hereunder, and the
indemnifying party shall assume the defense thereof, including the employment of
8
counsel satisfactory to the indemnified party, and the payment of all expenses.
Any omission to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. Any such indemnified party shall have the right to employ separate
counsel in any such action or proceeding and to participate in the defense
thereof, but the fees and expenses of such separate counsel shall be paid by
such indemnified party unless (i) the indemnifying party has agreed to pay such
fees and expenses or (ii) the indemnifying party shall have failed to assume the
defense of such action or proceeding and employ counsel reasonably satisfactory
to the indemnified party in any such action or proceeding or (iii) the named
parties to any such action or proceeding (including any impleaded parties)
include both such indemnified party and indemnifying party, and the indemnified
party shall have been advised by its counsel that there may be a conflict of
interest between such indemnified party and indemnifying party in the conduct of
the defense of such action (in which case, if such indemnified party notifies
the indemnifying party in writing that it elects to employ separate counsel at
the expense of the indemnifying party, the indemnifying party shall not have the
right to assume the defense of such action or proceeding on behalf of such
indemnified party), it being understood, however, that the indemnifying party
shall not, in connection with any one such action or proceeding or separate but
substantially similar or related actions or proceedings arising out of the same
general allegations or circumstances, be liable for the reasonable fees and
expenses of more than one separate firm of attorneys (unless the members of such
firm are not admitted to practice in a jurisdiction where an action is pending,
in which case the indemnifying party shall pay the reasonable fees and expenses
of one additional firm of attorneys to act as local counsel in such
jurisdiction, provided the services of such counsel are substantially limited to
that of appearing as attorneys of record) at any time for all indemnified
parties, which firm shall be designated in writing by the indemnified party. No
indemnifying party shall, without the prior written consent of the indemnified
parties, settle or compromise or consent to the entry of any judgment with
respect to any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim whatsoever in
respect of which indemnification or contribution could be sought under this
Section 4 (whether or not the indemnified parties are actual or potential
parties thereto), unless such settlement, compromise or consent (A) includes an
unconditional release of each indemnified party from all liability arising out
of such litigation, investigation, proceeding or claim and (B) does not include
a statement as to or an admission of fault, culpability or a failure to act by
or on behalf of any indemnified party.
(d) If at any time an indemnified party shall have requested an indemnifying
party to reimburse the indemnified party for fees and expenses of counsel, such
indemnifying party agrees that it shall be liable for any settlement of the
nature contemplated by Section 4(a)(ii) hereof effected without its written
consent if (i) such settlement is entered into more than 45 days after receipt
by such indemnifying party of the aforesaid request, (ii) such indemnifying
party shall have received notice of the terms of such settlement at least 30
days prior to such settlement being entered into, and (iii) such indemnifying
party shall not have reimbursed such indemnified party in accordance with such
request prior to the date of such settlement.
(e) If the indemnification provided for in this Section 4 is for any reason
unavailable to hold harmless an indemnified party (other than by reason of the
first sentence of Section 4(c) hereof) in respect of any losses, liabilities,
claims, damages or expenses referred to therein, then each indemnifying party
shall contribute to the aggregate amount of such losses, liabilities, claims,
damages and expenses incurred by such indemnified party, as incurred, in such
proportion as is appropriate to reflect the relative fault of the Company on the
one hand and the Named Purchasers on the other hand in connection with the
statements or omissions which resulted in such losses, liabilities, claims,
damages or expenses, as well as any other relevant equitable considerations.
The relative fault of the Company on the one hand and the Named Purchasers on
the other hand shall be determined by reference to, among other things, whether
any such untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact relates to information supplied by or
on behalf of the Company or the Named Purchasers and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.
9
The Company and the Purchasers agree that it would not be just and equitable if
contribution pursuant to this Section 4 were determined by pro rata allocation
or by any other method of allocation which does not take account of the
equitable considerations referred to above in this Section 4. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 4 shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.
No Person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the 0000 Xxx) shall be entitled to contribution from any Person who was
not guilty of such fraudulent misrepresentation.
For purposes of this Section 4, each Person, if any, who controls a Named
Purchaser within the meaning of Section 15 of the 1933 Act or Section 20 of the
1934 Act shall have the same rights to contribution as such Named Purchaser, and
each Person, if any, who controls the Company within the meaning of Section 15
of the 1933 Act or Section 20 of the 1934 Act shall have the same rights to
contribution as the Company.
5. Miscellaneous.
5.1 Rule 144 and Rule 144A. For so long as the Company is subject to the
reporting requirements of Section 13 or 15 of the 1934 Act, the Company
covenants that it will file the reports required to be filed by it under the
1933 Act and Section 13(a) or 15(d) of the 1934 Act and the rules and
regulations adopted by the SEC thereunder. If the Company ceases to be so
required to file such reports, the Company covenants that it will upon the
request of any Purchaser deliver to a prospective purchaser such information as
is necessary to permit sales pursuant to Rule 144A under the 1933 Act to the
extent required from time to time to enable such Purchaser to sell its Notes
without registration under the 1933 Act within the limitation of the exemptions
provided by (i) Rule 144 under the 1933 Act, as such Rule may be amended from
time to time, (ii) Rule 144A under the 1933 Act, as such Rule may be amended
from time to time, or (iii) any similar rules or regulations hereafter adopted
by the SEC. Upon the request of any Purchaser, the Company will deliver to such
Purchaser a written statement as to whether it has complied with such
requirements. The Company's obligations under this Section 5.1 shall terminate
upon the consummation of the Effectiveness Period.
5.2 Regulation M. Each Purchaser covenants with the Company that, with respect
to any Notes owned or held by such Purchaser that such Purchaser continues to
own or hold at any time on or after the 90th day following the effective date of
the Shelf Registration Statement, such Purchaser will, upon receipt of written
notice from the Company of the Company's intention to bid for or purchase any
Note or any security of the same class and series as the Notes (within the
meaning of Regulation M promulgated by the SEC (or any successor or equivalent
rule or regulation, "Regulation M")) or to take any other action, directly or
indirectly, the taking of which would be proscribed by Regulation M during a
distribution of the Notes, such Purchaser will, and will cause its "affiliated
purchasers" (as defined in Rule 100 of Regulation M) to, cease distributing the
Notes for such period of time as the Company may reasonably deem necessary so
that the action or actions proposed to be taken, directly or indirectly, by it
may be taken in full compliance with Regulation M.
5.3 No Inconsistent Agreements. The Company has not entered into and the
Company will not after the date of this Agreement enter into any agreement which
is inconsistent with the rights granted to the Purchasers under this Agreement
or otherwise conflicts with the provisions hereof. The rights granted to the
Purchasers hereunder do not and will not for the term of this Agreement in any
way conflict with the rights granted to the holders of the Company's other
issued and outstanding securities under any such agreements.
5.4 Amendments and Waivers. The provisions of this Agreement, including the
provisions of this sentence, may not be amended, modified or supplemented, and
waivers or consents to departures from the provisions hereof may not be given
unless the Company has obtained the written consent of the Purchasers.
5.5 Notices. All notices and other communications provided for or permitted
hereunder shall be made in writing by hand delivery, registered first-class
mail, telecopier, or any courier guaranteeing overnight delivery (a) if to a
Purchaser, at the most current address given by such Purchaser to the Company by
means of a notice given in accordance with the provisions of this Section 5.5,
which address initially is the address set
10
forth in the Merger Agreement with respect to UGC; and (b) if to the Company,
initially at the Company's address set forth in the Merger Agreement, and
thereafter at such other address of which notice is given in accordance with the
provisions of this Section 5.5.
All such notices and communications shall be deemed to have been duly given: at
the time delivered by hand, if personally delivered; two Business Days after
being deposited in the mail, postage prepaid, if mailed; when receipt is
acknowledged, if telecopied; and on the next Business Day if timely delivered to
an air courier guaranteeing overnight delivery.
Copies of all such notices, demands, or other communications shall be
concurrently delivered by the Person giving the same to the Trustee under the
Indenture, at the address specified in such Indenture.
5.6 Assignment; Successor and Assigns. Each Purchaser may assign its rights
and obligations under this Agreement only to a Subsidiary of such Purchaser (any
such Subsidiary, a "Permitted Assignee") to whom such Purchaser has transferred
its Notes. This Agreement shall inure to the benefit of and be binding upon (a)
the successors and assigns of the Company and (b) the Permitted Assignees of the
Purchasers; provided that nothing in this Section 5.6 shall be deemed to permit
any assignment, transfer or other disposition of Notes in violation of the terms
of this Agreement, the Merger Agreement or the Indenture. If any Permitted
Assignee shall acquire Notes, in any manner, whether by operation of law or
otherwise, such Notes shall be held subject to all of the terms of this
Agreement, and by taking and holding such Notes such Permitted Assignee shall be
conclusively deemed to have agreed to be bound by and to perform all of the
terms and provisions of this Agreement, including the restrictions on resale set
forth in this Agreement and, if applicable, the Merger Agreement, and such
Permitted Assignee shall be entitled to receive the benefits hereof, in each
case as if such Permitted Assignee were a "Purchaser" hereunder. Any transferee
of Notes that is not a Subsidiary of a Purchaser shall not be entitled to the
benefits of this Agreement.
5.7 Specific Enforcement. Without limiting the remedies available to the
Purchasers, the Company acknowledges that any failure by the Company to comply
with its obligations under Sections 2.1 through 2.3 hereof may result in
material irreparable injury to the Purchasers for which there is no adequate
remedy at law, that it would not be possible to measure damages for such
injuries precisely and that, in the event of any such failure, the Purchasers
may obtain such relief as may be required to specifically enforce the Company's
obligations under Sections 2.1 through 2.3 hereof.
5.8 Counterparts. This Agreement may be executed in any number of counterparts
and by the parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.
5.9 Headings. The headings in this Agreement are for convenience of reference
only and shall not limit or otherwise affect the meaning hereof.
5.10 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK WITHOUT REGARD TO THE
PRINCIPLES OF CONFLICT OF LAWS THEREOF.
5.11 Severability. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable, the validity, legality and enforceability of
any such provision in every other respect and of the remaining provisions
contained herein shall not be affected or impaired thereby.
11
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
LIBERTY MEDIA CORPORATION
By:
------------------------------------
Name:
Title:
Confirmed and accepted as of
the date first above written:
UNITEDGLOBALCOM, INC.
By:
----------------------------------
Name:
Title:
UNITED INTERNATIONAL PROPERTIES, INC.
By:
----------------------------------
Name:
Title:
12
EXHIBIT 2.5(a)
UNITED/NEW UNITED
AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER (this "Agreement") is entered into as of the
3rd day of December, 2001, by and among New UnitedGlobalCom, Inc., a Delaware
corporation ("New United"), UnitedGlobalCom, Inc., a Delaware corporation
("United"), and United/New United Merger Sub, Inc., a Delaware corporation
("Merger Sub"), pursuant to Section 251 of the General Corporation Law of the
State of Delaware (the "DGCL").
WITNESSETH that:
WHEREAS, each of the parties to this Agreement intends for Merger Sub to merge
with and into United, with United as the surviving entity in such merger,
NOW, THEREFORE, the parties to this Agreement, in consideration of the mutual
covenants, agreements and provisions hereinafter contained, do hereby prescribe
the terms and conditions of said merger and the mode of carrying the same into
effect as follows:
FIRST: At the Effective Time, as hereinafter defined, Merger Sub shall be
merged with and into United (the "Merger"), with United being the surviving
entity in the Merger (the "Surviving Entity") and changing its name to "UGC,
Inc."
SECOND: At the Effective Time, the manner of converting the outstanding shares
of the capital stock of United and Merger Sub shall be as follows:
(a) All of the shares of United's Series E Convertible Preferred Stock,
par value $0.01 per share, that are issued and outstanding immediately
prior to the Effective Time shall be automatically converted into an
aggregate of 1,500,000 shares of Class A Common Stock, par value $0.01 per
share, of the Surviving Entity.
(b) Each share of United's Class A Common Stock, par value $0.01 per share
("United Class A Stock"), that is issued and outstanding immediately prior
to the Effective Time shall be automatically converted into and become one
share of Class A Common Stock, par value $0.01 per share, of New United
("New United Class A Stock").
(c) Each share of United's Class B Common Stock, par value $0.01 per share
("United Class B Stock"), that is issued and outstanding immediately prior
to the Effective Time shall be automatically converted into and become one
share of New United Class A Stock.
(d) Each share of United's Convertible Preferred Stock, Series B, par
value $0.01 per share ("United Series B Preferred Stock"), that is issued
and outstanding immediately prior to the Effective Time (except as provided
in paragraph (g) below and excluding Dissenting Shares) shall be
automatically converted into and become one share of Convertible Preferred
Stock, Series F, par value $0.01 per share, of the Surviving Entity.
(e) Each share of United's 7% Series C Senior Cumulative Convertible
Preferred Stock, par value $0.01 per share ("United Series C Preferred
Stock"), that is issued and outstanding immediately prior to the Effective
Time (except as provided in paragraph (g) below and excluding Dissenting
Shares) shall be automatically converted into and become one share of 7%
Series G Convertible Senior Cumulative Preferred Stock, par value $0.01 per
share, of the Surviving Entity.
(f) Each share of United's 7% Series D Senior Cumulative Convertible
Preferred Stock, par value $0.01 per share ("United Series D Preferred
Stock"), that is issued and outstanding immediately prior to the Effective
Time (except as provided in paragraph (g) below and excluding Dissenting
Shares) shall be automatically converted into and become one share of 7%
Series H Convertible Senior Cumulative Preferred Stock, par value $0.01 per
share, of the Surviving Entity.
(g) Each share of United Class A Stock, United Class B Stock, United
Series B Preferred Stock, United Series C Preferred Stock or United Series
D Preferred Stock that immediately prior to the Effective Time is held by
New United or that is held by United in treasury shall be cancelled and
retired without payment of any consideration therefor and without any
conversion thereof into any other securities or the right to receive any
other securities.
(h) All outstanding options to purchase shares of United Class A Stock
listed in Section 2.5(c) of the United Disclosure Schedule ("United Stock
Options") to that certain
Agreement and Plan of Restructuring and Merger,
dated as of November , 2001, by and among United, New United, Merger Sub,
Liberty Media Corporation, Liberty Media International, Inc., Liberty
Global, Inc. and each Founder (as therein defined) (the "Restructuring
Agreement"), shall remain outstanding, be assumed by New United and
thereafter be exercisable, at the same per share exercise price and
pursuant to the same terms and conditions, including vesting conditions,
for a number of shares of New United Class A Stock equal to the number of
shares of United Class A Stock for which such stock option was exercisable
immediately prior to the Effective Time.
(i) All of the shares of Merger Sub's Class B Common Stock, par value
$0.01 per share, and Class C Common Stock, par value $0.01 per share,
outstanding immediately prior to the Effective Time and held by New United
shall be converted into and become, respectively, an aggregate of 1,500,000
shares of Class B Common Stock, par value $0.01 per share, of the Surviving
Entity, and an aggregate of 300,000,000 shares of Class C Common Stock, par
value $0.01 per share, of the Surviving Entity.
(j) If, after the date of this Agreement but prior to the Effective Time,
either of United or New United effects any stock dividend, stock split,
reverse stock split, recapitalization or reclassification affecting the
shares of its common stock or preferred stock of any class or series, or
otherwise effects any transaction that changes such shares into any other
securities (including securities of another entity) or effects any other
dividend or distribution (other than a normal cash dividend payable out of
current or retained earnings) on such shares, then the terms of the
foregoing exchanges (including the exchange rates and the terms of the
conversion of the United Stock Options) shall, as appropriate, be adjusted
to reflect such event.
(k) As of and following the Effective Time, (x) the Certificate of
Incorporation and Bylaws of the Surviving Entity shall be as set forth on
Exhibit A and Exhibit B hereto, respectively, and (y) until their
successors are duly elected or appointed in accordance with the Certificate
of Incorporation and the Bylaws of the Surviving Entity and the terms of
the United/Liberty Agreement (as defined in the Restructuring Agreement),
the directors of Merger Sub immediately prior to the Effective Time shall
be the directors of the Surviving Entity.
(l) Notwithstanding any other provisions in this Agreement to the
contrary, shares of United Class B Stock, United Series B Preferred Stock,
United Series C Preferred Stock and United Series D Preferred Stock that
are outstanding immediately prior to the Effective Time and that are held
by stockholders who have not voted in favor of the Merger or consented
thereto in writing and who have properly demanded appraisal for such shares
in accordance with Section 262 of the DGCL (collectively, the "Dissenting
Shares"), shall not be converted into or represent the right to receive, or
be exchangeable for, any securities of New United or the Surviving Entity
as provided herein. Such stockholders instead shall be entitled to receive
payment of the appraisal value of such shares held by them in accordance
with Section 262 of the DGCL, except that all Dissenting Shares of
stockholders who have failed to perfect or who have effectively withdrawn
or otherwise lost their rights to appraisal under Section 262 of the DGCL,
shall thereupon be deemed to have been converted into and become, as of the
Effective Time, securities of New United as provided herein.
(m) At the Effective Time, New United shall execute and file with the
Secretary of State of the State of Delaware a Certificate of Amendment, in
the form attached hereto as Exhibit C, changing the name of New United to
"UnitedGlobalCom, Inc."
2
THIRD: The terms and conditions of the Merger are as follows:
(a) This Merger shall become effective at the time set forth in a
Certificate of Merger, in the form attached hereto as Exhibit D (the
"Certificate of Merger"), duly executed and filed with the Secretary of
State of the State of Delaware (the "Effective Time").
(b) At the Effective Time, all the property, rights, privileges,
franchises, patents, trademarks, licenses, registrations and other assets
of every kind and description of Merger Sub shall be transferred to, vested
in and devolve upon the Surviving Entity without further act or deed and
all property, rights, and every other interest of the Surviving Entity and
Merger Sub shall be as effectively the property of the Surviving Entity as
they were of the Surviving Entity and Merger Sub respectively.
FOURTH: Prior to the filing of the Certificate of Merger, this Agreement shall
be approved and adopted by the sole stockholder of Merger Sub, the sole
stockholder of New United, and the stockholders of United as provided in the
Restructuring Agreement.
FIFTH: Anything herein or elsewhere to the contrary notwithstanding, and subject
to the terms of the Restructuring Agreement, this Agreement may be terminated
and abandoned by the Board of Directors of any constituent entity at any time
prior to the Effective Time. This Agreement may be amended by the Board of
Directors of the constituent entities at any time prior to the Effective Time,
subject to the terms of the Restructuring Agreement, provided that an amendment
made subsequent to the adoption of this Agreement by the stockholders of any
constituent entity shall not (1) alter or change the amount or kind of shares,
securities, cash, property and/or rights to be received in exchange for, or on
conversion of, all or any of the shares of any class or series or any such
constituent entity, (2) alter or change any term of the Certificate of
Incorporation of the Surviving Entity of the Merger, or (3) alter or change any
of the terms and conditions of this Agreement if such alteration or change would
adversely affect the holders of any of the shares of any class or series of such
constituent entity.
SIXTH: Surrender and payment for securities of United shall occur as follows:
(a) At and after the Effective Time, certificates representing shares of
United Class A Stock shall represent an equal number of shares of New
United Class A Stock.
(b) Prior to the Effective Time, United shall appoint an agent, which may
be an affiliate of United or New United (the "Exchange Agent") for the
purpose of exchanging (i) certificates representing shares of United Class
B Stock for certificates representing an equal number of shares of New
United Class A Stock (the "Class B Consideration"), (ii) certificates
representing shares of United Series B Preferred Stock for certificates
representing an equal number of shares of Surviving Entity Series F
Preferred Stock (the "Series B Consideration"), (iii) certificates
representing shares of United Series C Preferred Stock for certificates
representing an equal number of shares of Surviving Entity Series G
Preferred Stock (the "Series C Consideration"), and (iv) certificates
representing shares of United Series D Preferred Stock for certificates
representing an equal number of shares of Surviving Entity Series H
Preferred Stock (the "Series D Consideration"). At the Effective Time, New
United shall deposit with the Exchange Agent (i) the Class B Consideration
to be paid in respect of shares of United Class B Stock, (ii) the Series B
Consideration to be paid in respect of shares of United Series B Preferred
Stock, (iii) the Series C Consideration to be paid in respect of shares of
United Series C Preferred Stock, and (iv) the Series D Consideration to be
paid in respect of shares of United Series D Preferred Stock. The
certificates representing the United Class B Stock, the United Series B
Preferred Stock, the United Series C Preferred Stock and the United Series
D Preferred Stock are referred to herein as the "Certificates," and the
Class B Consideration, the Series B Consideration, the Series C
Consideration and the Series D Consideration are referred to herein as the
"Merger Consideration." Promptly after the Effective Time, United will
send, or will cause the Exchange Agent to send, to each holder of United
Class B Stock, United Series B Preferred Stock, United Series C Preferred
Stock and United Series D Preferred Stock at the Effective Time, a letter
of transmittal and instructions (which shall specify that the delivery
shall be effected, and risk of loss and title shall pass, only upon proper
delivery of the Certificates to the Exchange Agent) for use in such
exchange.
3
(c) Upon surrender to the Exchange Agent of its Certificate, together with
a properly completed letter of transmittal, and receipt by the Exchange
Agent thereof, (i) each holder of shares of United Class B Stock will be
entitled to receive promptly the Class B Consideration in respect of the
shares of United Class B Stock represented by its Certificate, (ii) each
holder of United Series B Preferred Stock will be entitled to receive
promptly the Series B Consideration in respect of the shares of United
Series B Preferred Stock represented by its Certificate, (iii) each holder
of United Series C Preferred Stock will be entitled to receive promptly the
Series C Consideration in respect of the shares of United Series C
Preferred Stock represented by its Certificate, and (iv) each holder of
United Series D Preferred Stock will be entitled to receive promptly the
Series D Consideration in respect of the shares of United Series D
Preferred Stock represented by its Certificate. In addition, each holder of
United Class B Stock, United Series B Preferred Stock, United Series C
Preferred Stock and United Series D Preferred Stock shall be entitled to
receive any dividends and distributions payable but not yet paid with
respect to stock that is so held. Until so surrendered and received by the
Exchange Agent, each such Certificate shall represent after the Effective
Time, for all purposes, only the right to receive the Class B
Consideration, the Series B Consideration, the Series C Consideration and
the Series D Consideration, as the case may be.
(d) If any portion of the Merger Consideration is to be paid to an entity
other than the entity in whose name the Certificate so surrendered is
registered, it shall be a condition to such payment that such Certificate
shall be properly endorsed or otherwise be in proper form for transfer and
that the entity requesting such payment shall pay to the Exchange Agent any
transfer or other taxes required as a result of such payment to an entity
other than the registered holder of such Certificate, or establish to the
satisfaction of the Exchange Agent that such tax has been paid or is not
payable.
(e) After the Effective Time, there shall be no further registration of
transfers of shares of United Class A Stock, United Class B Stock, United
Series B Preferred Stock, United Series C Preferred Stock or United Series
D Preferred Stock. If, after the Effective Time, Certificates are presented
to the Surviving Entity, they shall be canceled and exchanged for the Class
B Consideration, the Series B Consideration, the Series C Consideration or
the Series D Consideration provided for, and in accordance with the
procedures set forth, in this Article Sixth.
(f) Any portion of the Merger Consideration that remains unclaimed by the
holders of United Class B Stock, United Series B Preferred Stock, United
Series C Preferred Stock and United Series D Preferred Stock one year after
the Effective Time shall be returned to United, upon demand, and any such
holder who has not exchanged its shares for the applicable Merger
Consideration in accordance with this Article Sixth prior to that time
shall thereafter look only to United for payment of such consideration and
any dividends and distributions in respect of such shares, in each case
without any interest thereon. Notwithstanding the foregoing, neither
United, New United nor any affiliate thereof will be liable to any such
holder for any amounts paid to a public official pursuant to applicable
abandoned property, escheat or similar laws.
(g) No dividends or other distributions with respect to the Merger
Consideration shall be paid to the holder of any Certificates until such
Certificates are surrendered and received by the Exchange Agent as provided
in this Article Sixth. Following such surrender and receipt by the Exchange
Agent, there shall be paid, without interest, to the entity in whose name
such Merger Consideration has been registered, (i) the amount of dividends
or other distributions with a record date after the Effective Time
previously paid or payable with respect to such Merger Consideration as of
the date of such surrender, and (ii) at the appropriate payment date, the
amount of dividends or other distributions with a record date after the
Effective Time but prior to surrender and a payment date subsequent to
surrender, payable with respect to such Merger Consideration.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
4
IN WITNESS WHEREOF, the parties to this Agreement have executed this Agreement
as of the day and year first written above.
NEW UNITEDGLOBALCOM, INC.,
a Delaware corporation
By: /s/ XXXXXXX X. XXXXX
------------------------------------
Name: Xxxxxxx X. Xxxxx
Its: President
UNITEDGLOBALCOM, INC.,
a Delaware corporation
By: /s/ XXXXXXX X. XXXXX
------------------------------------
Name: Xxxxxxx X. Xxxxx
Its: President
UNITED/NEW UNITED MERGER SUB, INC.,
a Delaware corporation
By: /s/ XXXXXXX X. XXXXX
------------------------------------
Name: Xxxxxxx X. Xxxxx
Its: President
5
EXHIBIT A
CERTIFICATE OF INCORPORATION OF SURVIVING ENTITY
EXHIBIT B
BYLAWS OF SURVIVING ENTITY
EXHIBIT C
FORM OF CERTIFICATE OF AMENDMENT
EXHIBIT D
FORM OF CERTIFICATE OF MERGER
EXHIBIT 2.5(e)-1
RESTATED CERTIFICATE OF INCORPORATION
OF
UNITEDGLOBALCOM, INC.
UnitedGlobalCom, Inc., a Delaware corporation, hereby certifies as
follows:
1. The name of the corporation is UnitedGlobalCom, Inc. (the
"Corporation"). The Corporation was incorporated under the name "United
Development Group, Inc.," and the original Certificate of Incorporation of the
Corporation was filed with the Delaware Secretary of State on May 30, 1989. The
name of the Corporation was subsequently changed to "United International
Holdings, Inc." by the filing of a Restated Certificate of Incorporation with
the Delaware Secretary of State on April 14, 1993. The Corporation filed a
Second Restated Certificate of Incorporation with the Delaware Secretary of
State on June 4, 1993. The name of the Corporation was subsequently changed to
"UnitedGlobalCom, Inc." by the filing of a Certificate of Amendment with the
Delaware Secretary of State on July 23, 1999.
2. This Restated Certificate of Incorporation amends and restates the
provisions of the Second Restated Certificate of Incorporation of the
Corporation, as amended, in its entirety and has been duly adopted in accordance
with Section 251 of the General Corporation Law of the State of Delaware.
3. The text of the Certificate of Incorporation of the Corporation is
amended and restated to read in its entirety as follows:
FIRST: The name of the corporation (the "Corporation") is:
UGC Holdings, Inc.
SECOND: The address of the Corporation's registered office in the State
of Delaware is 0000 Xxxxxx Xxxxxx in the City of Wilmington, County of New
Castle. The name of the Corporation's registered agent at that address is The
Corporation Trust Company.
THIRD: The purpose of the Corporation is to engage in any lawful act or
activity for which a corporation may be organized under the General Corporation
Law of the State of Delaware.
FOURTH: (a) Authorized Shares.
The total number of shares of capital stock that the
Corporation shall have authority to issue is 404,652,966,
which shall be divided into the following classes:
(i) 1,500,000 shares shall be of a class designated Class
A Common Stock, par value $0.01 per share ("Class A
Common Stock");
(ii) 1,500,000 shares shall be of a class designated Class
B Common Stock, par value $0.01 per share ("Class B
Common Stock");
(iii) 300,000,000 shares shall be of a class designated
Class C Common Stock, par value $0.01 per share
("Class C Common Stock");
(iv) 100,000,000 shares shall be of a class designated
Class D Nonvoting Common Stock, par value $0.01 per
share ("Class D Common Stock" and, together with the
Class A Common Stock, the Class B Common Stock and
the Class C Common Stock, the "Common Stock"); and
(v) 1,652,966 shall be of a class designated Preferred
Stock, par value $0.01 per share ("Preferred Stock").
Each share of Class A Common Stock, Class B Common Stock,
Class C Common Stock and Class D Common Stock shall be
identical in all respects except as otherwise set forth in
this Certificate of Incorporation (as it may from time to time
hereafter be amended or restated, this "Certificate"). The
number of authorized shares of Class A Common Stock, Class B
Common Stock, Class C Common Stock or Class D Common Stock may
be increased or decreased (but not below the number of shares
thereof outstanding and, in the case of the Class C Common
Stock, the number reserved for issuance upon conversion of the
Class A Common Stock) by an amendment to this Certificate
approved by the affirmative vote of the holders of a majority
of the combined voting power of the Class A Common Stock,
Class B Common Stock and Class C Common Stock, voting together
as a single class and without separate class votes (subject to
paragraph (h) of this Article Fourth); provided that, promptly
following the conversion of any shares of Class A Common Stock
into shares of Class C Common Stock pursuant to paragraph (c)
of this Article Fourth, the Corporation shall thereupon cause
to be executed, acknowledged and filed with the Delaware
Secretary of State a certificate identifying such shares of
Class A Common Stock, stating that the reissuance of such
shares of Class A Common Stock is prohibited and reciting
their retirement, all in accordance with Section 243(b) of the
General Corporation Law of the State of Delaware.
(b) Voting Power of Common Stock.
Other than as set forth in this paragraph (b) or in Article
Fifth, holders of Common Stock of each class shall be entitled
to one vote for each share of such stock held on any matter to
be voted upon by the stockholders of the Corporation. Except
as may otherwise be required by the laws of the State of
Delaware or by the provisions of this Certificate, the holders
of
2
outstanding shares of Class A Common Stock, the holders of
outstanding shares of Class B Common Stock and the holders of
outstanding shares of Class C Common Stock shall vote together
as one class with the holders of outstanding shares of each
other class of Common Stock with respect to all matters to be
voted on by the stockholders of the Corporation, and no
separate vote or consent of the holders of shares of Class A
Common Stock, the holders of shares of Class B Common Stock or
the holders of shares of Class C Common Stock shall be
required for the approval of any such matter. With respect to
the election or removal of Class A Directors, the holders of
shares of Class A Common Stock shall vote as a separate class
and no vote of the holders of shares of Class B Common Stock
or Class C Common Stock shall be required with respect
thereto. With respect to the election or removal of Class B
Directors, the holders of shares of Class B Common Stock shall
vote as a separate class and no vote of the holders of Class A
Common Stock or Class C Common Stock shall be required with
respect thereto. Except as may otherwise be required by the
laws of the State of Delaware, the holders of shares of Class
D Common Stock shall have no right to any vote of such shares
on any matter whatsoever to be voted upon by the stockholders
of the Corporation.
(c) Conversion.
(i) Each outstanding share of Class A Common Stock shall
automatically convert into one share of Class C
Common Stock immediately upon (A) the transfer
thereof to any Person other than a Permitted
Transferee who is also a Principal or a Related Party
or (B) the occurrence of a Class B Event, in either
case with no further action on the part of any holder
thereof.
(ii) Upon the conversion of any shares of Class A Common
Stock pursuant to clause (i) above, the holder
thereof shall promptly surrender the certificate or
certificates representing the shares of Class A
Common Stock so converted, duly endorsed, to the
Secretary of the Corporation or to any transfer agent
for the Class A Common Stock. If so required by the
Corporation, any certificate for shares surrendered
for conversion shall be accompanied by instruments of
transfer, in form satisfactory to the Corporation,
duly executed by the holder of such shares or the
duly authorized representative of such holder. Upon
receipt by the Secretary or transfer agent of the
foregoing certificate or certificates and, if
required, instruments of transfer, the Corporation
shall cause to be issued to the holder who
surrendered the certificate or certificates
representing shares of Class A Common Stock or such
holder's nominee or nominees, a certificate or
certificates representing either (A) the appropriate
number of
3
shares of Class C Common Stock (in the case of a
conversion pursuant to clause (i)(A) above) or (B)
one share of Class C Common Stock for each share of
Class A Common Stock represented by such surrendered
certificate (in the case of a conversion pursuant to
clause (i)(B) above), and shall issue and deliver to
such holder, or such holder's nominee or nominees,
such certificate or certificates as well as, in the
case of a conversion pursuant to clause (i)(A) above,
a certificate or certificates representing any shares
of Class A Common Stock represented by such
surrendered certificate that were not transferred in
a manner that effected a conversion thereof into
shares of Class C Common Stock. Such conversion shall
be deemed to have been effected at the close of
business on the date of the occurrence of the event
giving rise to such conversion, and the Person or
Persons entitled to receive the shares of Class C
Common Stock issuable upon such conversion shall be
treated for all purposes as the record holder or
holders of such shares of Class C Common Stock on
that date.
(iii) A number of shares of Class C Common Stock equal to
the number of shares of Class A Common Stock
outstanding from time to time shall be set aside and
reserved for issuance upon conversion of shares of
Class A Common Stock into Class C Common Stock.
Shares of Class A Common Stock that have been
converted pursuant to clause (i) shall be retired and
may not be reissued. Shares of Class A Common Stock
shall not be convertible into shares of Class B
Common Stock. Shares of Class B Common Stock shall
not be convertible into shares of any other class of
Common Stock. Shares of Class C Common Stock shall
not be convertible into shares of any other class of
Common Stock. Shares of Class D Common Stock shall
not be convertible into shares of any other class of
Common Stock.
(d) Dividends.
Subject to paragraph (e) of this Article Fourth, (i) whenever
a dividend is paid to the holders of Class A Common Stock, the
Corporation also shall pay to the holders of Class B Common
Stock, Class C Common Stock and Class D Common Stock a
dividend per share equal to the dividend per share paid to the
holders of the Class A Common Stock, (ii) whenever a dividend
is paid to the holders of Class B Common Stock, the
Corporation also shall pay to the holders of Class A Common
Stock, Class C Common Stock and Class D Common Stock a
dividend per share equal to the dividend per share paid to the
holders of Class B Common Stock, (iii) whenever a dividend is
paid to the holders of Class C Common Stock, the Corporation
also shall pay to the holders of Class A Common Stock, Class B
Common Stock and Class D Common Stock a dividend per share
4
equal to the dividend per share paid to the holders of the
Class C Common Stock and (iv) whenever a dividend is paid to
the holders of Class D Common Stock, the Corporation also
shall pay to the holders of Class A Common Stock, Class B
Common Stock and Class C Common Stock a dividend per share
equal to the dividend per share paid to the holders of Class D
Common Stock. Dividends shall be payable only as and when
declared by the Board of Directors of the Corporation out of
assets of the Corporation legally available therefor.
(e) No Share Distributions, Dividends, Subdivisions, Combinations
or Reclassifications.
The Corporation may not make or pay any distribution or
dividend in shares of its capital stock of any class, and may
not effect any subdivision, combination or reclassification of
shares of its capital stock of any class.
(f) Issuance of Class D Common Stock.
The Corporation shall not issue any shares of Class D Common
Stock except as payment of dividends on shares of Series G
Preferred Stock or Series H Preferred Stock in accordance with
the terms of the respective Certificates of Designation of the
Series G Preferred Stock and the Series H Preferred Stock.
(g) Redemption of Class D Common Stock.
(i) The Class D Common Stock may be redeemed, at the
option of the Corporation by the action of the Board
of Directors from time to time, in whole or in part,
at the Redemption Price on any date designated for
such redemption by the Board of Directors (a
"Redemption Date"). The Redemption Price shall be
payable in cash, by delivery of fully paid
nonassessable shares of New United Class A Stock or
any combination thereof. If all or a part of the
Redemption Price is paid by delivery of shares of New
United Class A Stock, the number of such shares to be
delivered as payment of the Redemption Price or such
portion thereof shall be equal to the quotient
obtained (rounded to the nearest 1/10,000th of a
share) by dividing (A) the Redemption Price, or the
portion thereof to be paid by the delivery of shares
of New United Class A Stock, by (B) the Average
Market Price of one share of New United Class A Stock
on the Redemption Date. If less than all of the
outstanding shares of Class D Common Stock are to be
redeemed on any Redemption Date, the shares of Class
D Common Stock to be redeemed shall be chosen pro
rata among all holders of Class D Common Stock. The
Corporation shall not be required to register a
transfer of (x) any shares of Class D Common
5
Stock for a period of 15 days next preceding any
selection of shares of Class D Common Stock to be
redeemed or (y) any shares of Class D Common Stock
selected or called for redemption.
(ii) Notice of redemption shall be given by or on behalf
of the Corporation, not more than 30 days nor less
than 10 days prior to the Redemption Date, to the
holders of record of the shares of Class D Common
Stock to be redeemed, but no defect in such notice or
in the mailing thereof shall affect the validity of
the proceedings for the redemption of any shares of
Class D Common Stock. In addition to any information
required by law, such notice shall set forth the
Redemption Price, the Redemption Date, the number of
shares to be redeemed, the portion of the Redemption
Price, if any, that the Corporation has elected to
pay through the delivery of shares of New United
Class A Stock and the place at which the shares of
Class D Common Stock called for redemption will, upon
presentation and surrender of the stock certificates
evidencing such shares, be redeemed. If fewer than
the total number of shares of Class D Common Stock
represented by a certificate are redeemed, a new
certificate representing the number of unredeemed
shares will be issued to the holder thereof without
cost to such holder.
(iii) No fractional shares of New United Class A Stock or
scrip shall be delivered upon redemption of Class D
Common Stock. As to any final fraction of a share of
New United Class A Stock that would otherwise be
issuable to a holder upon redemption of his shares of
Class D Common Stock (determined on the basis of the
total number of such holder's shares of Class D
Common Stock in respect of which shares of New United
Class A Stock are deliverable upon redemption), the
Corporation shall pay an amount in cash or by its
check equal to the same fraction of the Average
Market Price of one share of New United Class A Stock
on the Redemption Date.
(iv) The Corporation's right to pay the Redemption Price
of the shares of Class D Common Stock through the
delivery of shares of New United Class A Stock shall
be conditioned upon: (A) the Corporation's having
timely given a notice of redemption setting forth
such election as provided in clause (ii) of this
paragraph (g), (B) the Corporation's having obtained
and filed, on or before the Redemption Date, at the
office of the redemption agent for the Class D Common
Stock (or with the books of the Corporation if there
is no redemption agent) an opinion of counsel to the
effect that (1) the shares of New United Class A
Stock to be issued upon such redemption have been
duly authorized and, when issued and
6
delivered in payment of the Redemption Price of the
shares of Class D Common Stock to be redeemed, will
be validly issued, fully paid and non-assessable and
free from preemptive rights, (2) that the delivery of
such shares of New United Class A Stock upon such
redemption of shares of Class D Common Stock will not
violate the laws of the State of Delaware, and (3)
that the delivery of the shares of New United Class A
Stock upon such redemption of shares of Class D
Common Stock is exempt from the registration or
qualification requirements of the 1933 Act and
applicable state securities laws or, if no such
exemption is available, that the shares of New United
Class A Stock to be issued have been duly registered
or qualified under the 1933 Act and such applicable
state securities laws, and (C) the Corporation's
having filed, on or before the Redemption Date, at
the office of such redemption agent (or with the
books of the Corporation if there is no redemption
agent), a Certificate duly executed by an appropriate
officer of the Corporation setting forth the number
of shares of New United Class A Stock to be delivered
in payment of the Redemption Price of each share of
Class D Common Stock and the method of determining
the same (consistent with the provisions hereof). If
the foregoing conditions have not been satisfied
prior to or on the Redemption Date, the Corporation
shall pay the Redemption Price for the shares of
Class D Common Stock to be redeemed in cash.
(v) If notice of any redemption by the Corporation
pursuant to this paragraph (g) of Article Fourth
shall have been given as provided in clause (ii) of
this paragraph (g), and if on or before the
Redemption Date specified in such notice the
Corporation shall have deposited with the redemption
agent for the Class D Common Stock (or if there is no
redemption agent, shall have set apart so as to be
available for such purpose and only such purpose)
cash, shares of New United Class A Stock, or a
combination thereof, sufficient to redeem in full on
the Redemption Date at the Redemption Price the
number of shares of Class D Common Stock called for
redemption and, provided that the conditions set
forth in clause (iv) of this paragraph (g) have been
satisfied, then effective as of the close of business
on the Redemption Date, the shares of Class D Common
Stock called for redemption, notwithstanding that any
certificate therefor shall not have been surrendered
for cancellation, shall no longer be deemed
outstanding, and the holders thereof shall cease to
be stockholders with respect to such shares, and all
rights with respect to such shares shall forthwith
cease and terminate, except the right of the holders
thereof to receive cash, shares of New United Class A
Stock, or a combination thereof, as applicable, in
payment of the Redemption
7
Price of such shares, without interest, upon the
surrender of certificates representing the same.
(vi) Any shares of Class D Common Stock that are
exchanged, redeemed or for any other reason cease to
be outstanding shall be retired and may not be
reissued by the Corporation.
(h) New United Approvals.
Except (i) as set forth in the proviso at the end of paragraph
(a) of Article Fourth and (ii) for amendments or alterations
to Article First or Second of this Certificate, from and after
the effective time of the Merger and prior to such time as all
of the outstanding shares of Class A Common Stock have been
converted into shares of Class C Common Stock pursuant to
paragraph (c) of this Article Fourth and the shares of Class C
Common Stock received upon such conversion have been exchanged
for shares of New United Class A Common Stock pursuant to the
terms of the Exchange Agreement, any amendment, alteration or
repeal of any provision of this Certificate (including,
without limitation, by merger, consolidation, binding share
exchange or otherwise) may only be effected upon the approval
by the affirmative vote of the holders of at least 66-2/3
percent of the voting power of the outstanding common stock of
New United, voting together as a single class, as provided in
the certificate of incorporation of New United, in addition to
any required vote of the directors and stockholders of the
Corporation.
(i) Preferred Stock
The number of authorized shares, voting powers, designations,
preferences and relative, participating, optional or other
special rights and qualifications, limitations or restrictions
of the following series of Preferred Stock are as stated and
expressed in the exhibit with respect to such series attached
hereto as specified below and incorporated herein by reference
(each a "Preferred Designation")(1):
Exhibit A ....... Series B Preferred Stock
Exhibit B ....... Series C Preferred Stock
Exhibit C ....... Series D Preferred Stock
Exhibit D ....... Series F Preferred Stock
Exhibit E ....... Series G Preferred Stock
Exhibit F ....... Series H Preferred Stock
--------
(1) The Preferred Designations for the Series B Preferred Stock, Series C
Preferred Stock and Series D Preferred Stock will be identical to the existing
Certificates of Designation for the corresponding series of United's existing
Preferred Stock. The Preferred Designations for the Series F Preferred Stock,
Series G Preferred Stock and Series H Preferred Stock will have terms reasonably
satisfactory to United and Liberty Media, substantially as set forth on Schedule
A to this Exhibit 2.5(e)-1.
8
Except for the issuance of shares of Preferred Stock in the
Merger, as contemplated by the Merger Agreement, the
Corporation may not issue any shares of Preferred Stock
without the prior approval of the Board of Directors of New
United by the vote, or action by written consent, of such
Board of Directors of New United as required by the United
Charter. The Corporation shall not authorize any additional
series of Preferred Stock. Any shares of Preferred Stock that
are converted, exchanged, redeemed or for any other reason
cease to be outstanding shall be retired and may not be
reissued by the Corporation.
FIFTH: (a) Classification and Election of Directors.
The business and affairs of the Corporation shall be managed
by a Board of Directors. The number of directors shall be
fixed by the Bylaws, except that, as long as any shares of
Class A Common Stock are outstanding, (i) the number of
directors constituting the Corporation's entire board of
directors shall be equal to eight (except as required by any
Preferred Designation), (ii) four directors will be elected by
the holders of a plurality of the Class A Common Stock (the
"Class A Directors"), (iii) four directors will be elected by
the holders of a plurality of the Class B Common Stock (the
"Class B Directors") and (iv) any additional directors
required by the terms of any Preferred Designation will be
elected as provided in such Preferred Designation ("Preferred
Directors"). The Class C Common Stock and the Class D Common
Stock will not vote in the election of directors. From and
after such time as no Class A Common Stock is outstanding, the
directors shall no longer be classified as "Class A Directors"
and "Class B Directors," and all of the directors (other than
any Preferred Directors) shall be elected by the holders of a
majority of the Class B Common Stock.
(b) Term of Office; Vacancies.
A director shall hold office until his or her successor shall
be elected and shall qualify, subject, however, to his or her
prior death, resignation, retirement or removal from office.
Any vacancy with respect to the office of a Class A Director,
however caused, shall be filled by a majority of the Class A
Directors then in office or by a sole remaining Class A
Director. Any vacancy with respect to the office of a Class B
Director, however caused, shall be filled by a majority of the
Class B Directors then in office or by a sole remaining Class
B Director. From and after such time as no shares of Class A
Common Stock are outstanding, and except as provided in any
Preferred Designation, any newly created directorship
resulting from an increase in the number of directors or any
other vacancy with respect to the office of a director,
however caused, shall be filled by a majority of the directors
(other than Preferred Directors) then in office or by a sole
remaining director. Any director elected as provided above by
9
one or more directors to fill a newly created directorship or
other vacancy shall, without regard to the class in which the
vacancy occurred, hold office until the next succeeding annual
meeting of stockholders and until his or her successor shall
have been elected and qualified. No decrease in the number of
directors constituting the Board of Directors shall shorten
the term of any incumbent director, except as may be provided
in any Preferred Designation.
(c) Removal.
Any or all of the Class A Directors may be removed from the
Board of Directors with or without cause only upon the
affirmative vote of the holders of at least 66-2/3 percent of
the combined voting power of the Class A Common Stock, voting
as a separate class. Any or all of the Class B Directors may
be removed from the Board of Directors, with or without cause,
upon the affirmative vote of the holders of a majority of the
combined voting power of the Class B Common Stock, voting as a
separate class. From and after such time as no Class A Common
Stock is outstanding, any or all of the directors (except for
any Preferred Director) may be removed from the Board of
Directors, with or without cause, upon the affirmative vote of
the holders of a majority of the Class B Common Stock, voting
as a separate class. Removal of any Preferred Director may
only be effected as specified in the applicable Preferred
Designation.
(d) Required Vote.
So long as any shares of Class A Stock are outstanding, any
action to be taken by the Board of Directors may be taken only
upon the affirmative vote or consent in writing of (i) a
majority of all directors then in office, (ii) a majority of
the Class A Directors then in office and (iii) a majority of
the Class B Directors then in office. From and after such time
as no Class A Common Stock is outstanding, any action to be
taken by the Board of Directors may be taken only upon the
affirmative vote of a majority of the directors then in
office.
SIXTH: To the fullest extent permitted by the General Corporation Law
of the State of Delaware, as now existing or hereafter amended, a director of
the Corporation shall not be liable to the Corporation or any of its
stockholders for monetary damages for breach of his fiduciary duty as a
director. Any amendment or repeal of this Article Sixth shall be prospective
only and shall not adversely affect any limitation, right or protection of a
director of the Corporation existing under this Article Sixth immediately before
the amendment or repeal.
10
SEVENTH:
(a) Right to Indemnification.
The Corporation shall indemnify and hold harmless, to the
fullest extent permitted by applicable law as it presently
exists or may hereafter be amended, any Person who was or is
made or is threatened to be made a party or is otherwise
involved in any action, suit or proceeding, whether civil,
criminal, administrative or investigative (a "proceeding") by
reason of the fact that he, or a Person for whom he is the
legal representative, is or was a director or officer of the
Corporation or is or was serving at the request of the
Corporation as a director, officer, employee or agent of
another corporation or of a partnership, joint venture, trust,
enterprise or nonprofit entity, including service with respect
to employee benefit plans, against all liability and loss
suffered and expenses (including attorneys' fees) reasonably
incurred by such Person. Such right of indemnification shall
inure whether or not the claim asserted is based on matters
which antedate the adoption of this Article Seventh. The
Corporation shall be required to indemnify or make advances to
a Person in connection with a proceeding (or part thereof)
initiated by such Person only if the proceeding (or part
thereof) was authorized by the Board of Directors of the
Corporation.
(b) Prepayment of Expenses.
The Corporation shall pay the expenses (including attorneys'
fees) incurred by a director or officer in defending any
proceeding in advance of its final disposition, provided,
however, that the payment of expenses incurred by a director
or officer in advance of the final disposition of the
proceeding shall be made only upon receipt of an undertaking
by the director or officer to repay all amounts advanced if it
should be ultimately determined that the director or officer
is not entitled to be indemnified under this Article Seventh
or otherwise.
(c) Claims.
If a claim for indemnification or payment of expenses under
this Article Seventh is not paid in full within 60 days after
a written claim therefor has been received by the Corporation,
the claimant may file suit to recover the unpaid amount of
such claim and, if successful in whole or in part, shall be
entitled to be paid the expense of prosecuting such claim. In
any such action the Corporation shall have the burden of
proving that the claimant was not entitled to the requested
indemnification or payment of expenses under applicable law.
11
(d) Non-Exclusivity of Rights.
The rights conferred on any Person by this Article Seventh
shall not be exclusive of any other rights that such Person
may have or hereafter acquire under any statute, provision of
this Certificate, the Bylaws, agreement, vote of stockholders
or resolution of disinterested directors or otherwise.
(e) Other Indemnification.
The Corporation's obligation, if any, to indemnify any person
who was or is serving at its request as a director, officer,
employee or agent of another corporation, partnership, joint
venture, trust, enterprise or nonprofit entity shall be
reduced by any amount such person may collect as
indemnification from such other corporation, partnership,
joint venture, trust, enterprise or nonprofit entity.
EIGHTH: Any action that may be taken at any annual or special meeting
of the stockholders may be taken without a meeting, without prior notice and
without a vote, if a consent or consents in writing, setting forth the action so
taken, shall be signed by the holders of outstanding stock having not less than
the minimum number of votes that would be necessary to authorize or take such
action at a meeting at which all shares entitled to vote thereon were present
and voted and shall be delivered to the Secretary of the Corporation.
NINTH: Except as otherwise required by law or provided in the Bylaws of
the Corporation, and subject to the rights of the holders of any series of
Preferred Stock, special meetings of the stockholders of the Corporation may be
called only by the Board of Directors pursuant to a resolution approved by the
affirmative vote of a majority of the directors then in office, by the Chairman
of the Board of Directors or at the request of holders of a majority of the
Class A Common Stock, Class B Common Stock and Class C Common Stock, voting
together as a single class.
TENTH: The Board of Directors shall have the power to adopt, alter,
amend or repeal the Bylaws of the Corporation by a vote of the directors as
provided in paragraph (d) of Article Fifth. The holders of shares of Class A
Common Stock, Class B Common Stock and Class C Common Stock shall, to the extent
such power is at the time conferred on them by applicable law, also have the
power to adopt, alter, amend or repeal the Bylaws of the Corporation, but only
if such action receives at least a majority of the voting power of the
outstanding Class A Common Stock, Class B Common Stock and Class C Common Stock,
voting together as a single class.
ELEVENTH: Election of directors need not be by written ballot.
TWELFTH: The Corporation hereby elects not to be governed by Section
203 of the General Corporation Law of the State of Delaware.
12
THIRTEENTH: The following terms shall have the indicated meanings for
purposes of this Certificate.
"Average Market Price" means, with respect to any publicly traded
security as of any relevant date of determination, the average of the Closing
Prices per share or other unit of such security for the period of ten
consecutive Trading Days ending on and including the third Trading Day prior to
such relevant date of determination.
"Business Day" means any day other than Saturday, Sunday and a day on
which banks are required or permitted to close in Denver, Colorado or New York,
New York.
"Certificate" has the meaning set forth in paragraph (a) of Article
Fourth.
"Change of Control," with respect to each Current Indenture, has the
meaning ascribed to such term in such Current Indenture.
"Class A Common Stock" has the meaning set forth in paragraph (a) of
Article Fourth.
"Class A Director" has the meaning set forth in paragraph (a) of
Article Fifth.
"Class B Common Stock" has the meaning set forth in paragraph (a) of
Article Fourth.
"Class B Director" has the meaning set forth in paragraph (a) of
Article Fifth.
"Class B Event" means the occurrence of any of the following events:
(a) the redemption in full of the Current Bonds, (b) the defeasance of the
applicable provisions of the Current Indentures in accordance with the terms
thereof so that neither the Corporation nor any of its subsidiaries would be
required in accordance with the terms of the Current Indentures to offer to
repurchase any of the Current Bonds (a "Change of Control Offer") if the Class C
Common Stock, par value $0.01 per share ("New United Class C Common Stock"), of
New United were to be converted in full into shares of Class B Common Stock, par
value $0.01 per share, of New United ("New United Class B Common Stock"), (c) a
waiver or amendment of the applicable provisions of the Current Indentures shall
have been effected so that neither the Corporation nor any of its subsidiaries
would be required to make a Change of Control Offer if the New United Class C
Common Stock were to be converted in full into shares of New United Class B
Common Stock, or (d) a Change of Control within the meaning of any of the
Current Indentures (as to which an event described in (a) (with respect to
Current Bonds issued pursuant to such Current Indenture), (b) or (c) has not
occurred) otherwise occurs (other than as a result of a breach of the Standstill
Agreement by Liberty (as defined in the Standstill Agreement)), provided that an
occurrence described in this clause (d) will not constitute a Class B Event if
at such time Current Bonds with an aggregate principal amount or accreted value,
as applicable, in excess of $200,000,000 that were issued under the Specified
Indentures (as to which no event described in clauses (b) or (c) has occurred)
remain outstanding and no Change of Control within the meaning of the Specified
Indentures has occurred.
13
"Class C Common Stock" has the meaning set forth in paragraph (a) of
Article Fourth.
"Class D Common Stock" has the meaning set forth in paragraph (a) of
Article Fourth.
"Closing Price" of a share or other unit of any security on any Trading
Day means (i) the last reported sale price for a share or other unit of such
security on such Trading Day as reported on the principal United States or
foreign securities exchange on which such security is listed or admitted for
trading, or (ii) if such security is not listed or admitted for trading on any
such securities exchange, the last reported sale price for a share or other unit
of such security on such Trading Day as reported on The Nasdaq Stock Market, or
(iii) if such security is not listed or admitted to trading on any United States
or foreign securities exchange or The Nasdaq Stock Market, the average of the
highest bid and lowest asked prices for a share or other unit of such security
on such Trading Day in the over-the-counter market as reported by The National
Quotation Bureau Incorporated, or any similar organization.
"Common Stock" has the meaning set forth in paragraph (a) of Article
Fourth.
"Current Bonds" means the debt securities outstanding as of May 25,
2001 that were issued pursuant to the Current Indentures.
"Current Indentures" means (a) the Indenture dated as of February 5,
1998, between the Corporation and Firstar Bank, N.A. (f/k/a Firstar Bank of
Minnesota, N.A.), (b) the Indenture dated as of April 29, 1999, between the
Corporation and Firstar Bank, N.A., (c) the Indenture dated as of July 14, 1998,
between UPC Polska, Inc. (f/k/a @Entertainment, Inc.) ("Polska") and Bankers
Trust Company ("BTC"), (d) the Indenture dated January 20, 1999, between Polska
and BTC, (e) the Indenture dated January 27, 1999, between Polska and BTC, and
(f) the Indenture dated as of October 31, 1996, between Poland Communications,
Inc. and State Street Bank and Trust Company, in each case as were in effect on
May 1, 2001.
"Exchange Agreement" means the Exchange Agreement, dated as of
________, 2002, among New United and [_____________________].
"Merger" means the merger of Merger Sub with and into the Corporation
as contemplated by the Merger Agreement.
"Merger Agreement" means the
Agreement and Plan of Restructuring and
Merger, dated as of December 3, 2001 among the Corporation, New United, Merger
Sub, Liberty Media Corporation, Liberty Media International, Inc., Liberty
Global, Inc. and each Person indicated as a Founder on the signature pages
thereto.
"Merger Sub" means United/New United Merger Sub, Inc., a Delaware
corporation.
14
"New United" means UnitedGlobalCom, Inc., a Delaware corporation that
was formerly known as New UnitedGlobalCom, Inc.
"New United Class A Stock" means the Class A Common Stock, par value
$0.01 per share, of New United.
"Permitted Transferee" has the meaning set forth in the Stockholders
Agreement.
"Person" means any individual, corporation, partnership, limited
partnership, limited liability company, trust or other legal entity.
"Preferred Designation" has the meaning set forth in paragraph (g) of
Article Fourth.
"Preferred Stock" has the meaning set forth in paragraph (a) of Article
Fourth.
"Principal" means any of Xxxxxx X. Xxxxxxx, Xxxxxx Xxxxxxxx, Xxxxxx
Xxxxxxxx, Xxxxxxxx Investments, Ltd (so long as it is controlled by Xxxxxx or
Xxxxxx Xxxxxxxx), Xxxx X. Xxxxxxxxx, X. Xxxxxxxxx Holdings, Co. and Xxxx X.
Xxxxxxxxx Family Trust (so long as each is controlled by Xxxx X. Xxxxxxxxx or
trustees appointed by him), Xxxxx X. Xxxxxxxxx and Xxxx X. Xxxxxxxxx.
The "Redemption Price" of any share of Class D Common Stock called for
redemption shall be equal to the product of (a) the Underlying Shares of New
United Class A Stock of such share of Class D Common Stock on the Redemption
Date multiplied by (b) the Average Market Price of one share of New United Class
A Common Stock on the Redemption Date.
"Related Party" has the meaning set forth in the Specified Indentures.
"Specified Indentures" means (a) the Indenture dated as of February 5,
1998, between the Corporation and Firstar Bank, N.A. (f/k/a Firstar Bank of
Minnesota, N.A.) and (b) the Indenture dated as of April 29, 1999, between the
Corporation and Firstar Bank, N.A., in each case as in effect on May 1, 2001.
"Standstill Agreement" means the Standstill Agreement, dated as of
_______, 2002, among New United, Liberty Media Corporation and Liberty Global,
Inc.
"Stockholders Agreement" means the Stockholders Agreement, dated as of
________, 2002, among New United, Liberty Media Corporation, Liberty Global,
Inc. and the individuals designated as Founders on the signature pages thereto.
"Trading Day", with respect to any security, means a day on which the
principal United States or foreign securities exchange on which such security is
listed or admitted to trading, or The Nasdaq Stock Market if such security is
not listed or admitted to trading on any such securities exchange, as
applicable, is open for the transaction of business (unless such trading shall
have been suspended for the entire day) or, if the
15
applicable security is not listed or admitted to trading on any United States or
foreign securities exchange or The Nasdaq Stock Market, any Business Day.
The "Underlying Shares of New United Class A Stock" per share of Class
D Common Stock shall mean, initially, one share of New United Class A Stock
(subject to appropriate adjustment to reflect the effect of any stock dividend,
stock split, reverse stock split, recapitalization or reclassification affecting
the shares of New United Class A Stock).
"United Charter" has the meaning set forth in the Stockholders
Agreement.
16
IN WITNESS WHEREOF, this Restated Certificate of Incorporation has been
signed this __ day of _______, 2002.
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
17
SCHEDULE A
TO EXHIBIT 2.5(e)-1
SUMMARY OF TERMS OF PREFERRED DESIGNATIONS -
SERIES F, SERIES G AND SERIES H
Number Authorized: Series F Preferred Stock 139,031 shares
Series G Preferred Stock 425,000 shares
Series H Preferred Stock 287,500 shares
Terms Generally: Except as described herein or as reasonably agreed
upon by United and Liberty, the Series F Preferred
Stock, Series G Preferred Stock and Series H
Preferred Stock will generally have the same material
terms as, respectively, United's Series B Preferred
Stock, Series C Preferred Stock and Series D
Preferred Stock except as described below.
Dividends: In the case of the Series G Preferred Stock and the
Series H Preferred Stock, dividends will be payable
in (a) cash, (b) shares of New United Class A Stock
or (c) shares of Surviving Entity Class D Common
Stock. The number of shares of New United Class A
Common Stock or Surviving Entity Class D Common Stock
issued in lieu of any cash dividend will be
calculated by dividing the dividend payment amount by
the Market Value Amount (as defined in the relevant
Certificate of Designation) of New United Class A
Common Stock, with appropriate adjustment to reflect
any splits, reverse splits, combinations or the like
affecting the New United Class A Stock. The Surviving
Entity's Class D Common Stock will be redeemable as
set forth in the Surviving Entity Charter.
Exchange Offer: New United will agree with the Surviving Entity that,
concurrently with each dividend payment date for the
Surviving Entity's Preferred Stock, New United will
make an offer to exchange all of the outstanding
shares of Class D Stock for an equal number of shares
of New United Class A Stock, with appropriate
adjustment to reflect any splits, reverse splits,
combinations or the like affecting the New United
Class A Stock.
1
Exchange Rights: The Series F Preferred Stock, Series G Preferred
Stock and Series H Preferred Stock will not be
convertible into stock of the Surviving Entity, but
will instead be exchangeable into New United Class A
Stock (pursuant to an agreement between New United
and the Surviving Entity, which agreement may be
contained in the United/New United Merger Agreement)
on substantially the same basis that each such series
of Preferred Stock is currently convertible into
shares of United Class A Stock.
Redemption: The Series G Preferred Stock and Series H Preferred
Stock will be redeemable (on substantially the same
terms as United's Series C Preferred Stock and Series
D Preferred Stock are currently redeemable) in cash
or in shares of New United Class A Stock, determined
by dividing the redemption price by the Market Value
Amount of the New United Class A Stock.
2
EXHIBIT 2.5(e)-2
BYLAWS
OF
UGC HOLDINGS, INC.
Adopted ____________, 2002
INDEX TO BYLAWS
OF
UGC HOLDINGS, INC.
SECTION PAGE
------- ----
ARTICLE I Offices.............................................................1
Section 1.01 Business Offices....................................................1
Section 1.02 Registered Office...................................................1
ARTICLE II Stockholders........................................................1
Section 2.01 Annual Meeting......................................................1
Section 2.02 Special Meetings....................................................1
Section 2.03 Place of Meeting....................................................2
Section 2.04 Notice of Meetings..................................................2
Section 2.05 Fixing Date for Determination of Stockholders of Record.............2
Section 2.06 Voting List.........................................................3
Section 2.07 Proxies.............................................................3
Section 2.08 Quorum and Manner of Acting.........................................3
Section 2.09 Action Without a Meeting............................................3
ARTICLE III Board of Directors..................................................4
Section 3.01 General Powers......................................................4
Section 3.02 Number, Tenure and Qualifications...................................4
Section 3.03 Resignation.........................................................5
Section 3.04 Regular Meetings....................................................5
Section 3.05 Special Meetings....................................................5
Section 3.06 Meetings by Telephone...............................................5
Section 3.07 Notice of Meetings..................................................5
Section 3.08 Quorum and Manner of Acting.........................................5
Section 3.09 Action Without a Meeting............................................6
Section 3.10 Executive and Other Committees......................................6
Section 3.11 Compensation........................................................6
ARTICLE IV Officers............................................................7
Section 4.01 Number and Qualifications...........................................7
Section 4.02 Election and Term of Office.........................................7
Section 4.03 Compensation........................................................7
Section 4.04 Resignation.........................................................7
Section 4.05 Removal.............................................................7
Section 4.06 Vacancies...........................................................7
Section 4.07 Authority and Duties................................................8
Section 4.08 Surety Bonds........................................................9
i
SECTION PAGE
------- ----
ARTICLE V Stock ..............................................................9
Section 5.01 Issuance of Shares..................................................9
Section 5.02 Transfer of Shares.................................................10
Section 5.03 Registered Holders.................................................10
Section 5.04 Transfer Agents, Registrars and Paying Agents......................10
ARTICLE VI Indemnification....................................................10
Section 6.01 Directors and Officers.............................................10
Section 6.02 Employees and Other Agents.........................................10
Section 6.03 Expenses...........................................................11
Section 6.04 Enforcement........................................................11
Section 6.05 Non-Exclusivity of Rights..........................................12
Section 6.06 Survival of Rights.................................................12
Section 6.07 Insurance..........................................................12
Section 6.08 Amendments.........................................................12
Section 6.09 Severability.......................................................12
Section 6.10 Certain Definitions................................................13
ARTICLE VII Miscellaneous......................................................14
Section 7.01 Waivers of Notice..................................................14
Section 7.02 Presumption of Assent..............................................14
Section 7.03 Voting of Securities by the Corporation............................14
Section 7.04 Seal...............................................................14
Section 7.05 Fiscal Year........................................................14
Section 7.06 Amendments.........................................................15
ii
BYLAWS
OF
UGC HOLDINGS, INC.
ARTICLE I
Offices
Section 1.01 Business Offices. The corporation may have such offices,
either within or outside Delaware, as the board of directors may from time to
time determine or as the business of the corporation may require.
Section 1.02 Registered Office. The registered office of the
corporation required by the Delaware General Corporation Law to be maintained in
Delaware shall be as set forth in the certificate of incorporation, unless
changed as provided by law.
ARTICLE II
Stockholders
Section 2.01 Annual Meeting. An annual meeting of the stockholders
shall be held on such date as may be determined by the board of directors, for
the purpose of electing directors and for the transaction of such other business
as may come before the meeting. If the day fixed for the annual meeting shall be
a legal holiday, such meeting shall be held on the next succeeding business day.
If the election of directors shall not be held on the day designated herein for
any annual meeting of the stockholders, or at any adjournment thereof, the board
of directors shall cause the election to be held at a meeting of the
stockholders as soon thereafter as conveniently may be. Failure to hold an
annual meeting as required by these bylaws shall not invalidate any action taken
by the board of directors or officers of the corporation.
Section 2.02 Special Meetings. Except as otherwise required by law or
in the certificate of incorporation, special meetings of the stockholders, for
any purpose or purposes, unless otherwise prescribed by statute, may be called
only by the board of directors pursuant to a resolution approved by the
affirmative vote of a majority of directors then in office, by the chairman of
the board of directors, or at the request of holders of a majority of the Class
A Common Stock, Class B Common Stock and Class C Common Stock (as each such term
is defined in the certificate of incorporation), voting together as a single
class. Such request shall state the purpose or purposes of the proposed meeting.
1
Section 2.03 Place of Meeting. Each meeting of the stockholders shall
be held at such place, either within or outside Delaware, as may be designated
in the notice of meeting, or, if no place is designated in the notice, at the
principal office of the corporation.
Section 2.04 Notice of Meetings. Except as otherwise required by law,
notice in writing or by electronic transmission of each meeting of the
stockholders stating the place, day and hour of the meeting, the means of remote
communications, if any, by which stockholders and proxy holders may be deemed to
be present in person and vote at such meeting and, in the case of a special
meeting, the purpose or purposes for which the meeting is called, shall be
given, either personally (including delivery by private courier) or by first
class, certified or registered mail, or by electronic transmission, to each
stockholder of record entitled to notice of such meeting, not less than ten nor
more than 60 days before the date of the meeting. Such notice shall be deemed to
be given, if personally delivered, when delivered to the stockholder, and, if
mailed, when deposited in the United States mail, postage prepaid, directed to
the stockholder at his address as it appears on the records of the corporation,
and if by electronic transmission, when posted on an electronic network or
directed to the stockholder at an electronic mail address at which the
stockholder has consented to receive notice. If notice of two consecutive annual
meetings and all notices of meetings or the taking of action by written consent
without a meeting to any stockholder during the period between such two
consecutive annual meetings, or all, and at least two, payments (if sent by
first class mail) of dividends or interest on securities during a 12-month
period, have been mailed or directed addressed to such person at his address as
shown on the records of the corporation and have been returned undeliverable,
the giving of such notice to such person shall not be required until another
address for such person is delivered to the corporation. When a meeting is
adjourned to another time or place, notice need not be given of the adjourned
meeting if the time and place thereof are announced at the meeting at which the
adjournment is taken. At the adjourned meeting the corporation may transact any
business that might have been transacted at the original meeting. If the
adjournment is for more than 30 days, or if after the adjournment a new record
date is fixed for the adjourned meeting, notice of the adjourned meeting shall
be given to each stockholder of record entitled to vote at the meeting in
accordance with the foregoing provisions of this Section 2.04.
Section 2.05 Fixing Date for Determination of Stockholders of Record.
For the purpose of determining stockholders entitled to notice of or to vote at
any meeting of stockholders or any adjournment thereof, or entitled to receive
payment of any dividend or other distribution or allotment of any rights, or
entitled to exercise any rights in respect of any change, conversion or exchange
of stock or for any other lawful action, the board of directors may fix, in
advance, a date as the record date for any such determination of stockholders,
which date shall be not more than 60 nor less than ten days before the date of
such meeting, and not more than 60 days prior to any other action. If no record
date is fixed then the record date shall be, for determining stockholders
entitled to notice of or to vote at a meeting of stockholders, the close of
business on the day next preceding the day on which notice is given, or, if
notice is waived, the close of business on the day next preceding the day on
which the meeting is held, or, for determining stockholders for any other
purpose, the close of business on the day on which the board of directors adopts
the resolution relating thereto. A determination of stockholders of record
entitled to notice of or to vote at a meeting of stockholders shall apply to any
adjournment of the meeting; provided, however, that the board of directors may
fix a new record date for the
2
adjourned meeting. Notwithstanding the foregoing provisions of this Section
2.05, the record date for determining stockholders entitled to take, or receive
notice of, corporate action in writing without a meeting as provided in Section
2.11 shall be determined as provided in such Section.
Section 2.06 Voting List. The officer who has charge of the stock
ledger of the corporation shall prepare and make, at least ten days before every
meeting of stockholders, a complete list of the stockholders entitled to vote at
the meeting, arranged in alphabetical order, and showing the address of each
stockholder and the number of shares registered in the name of each stockholder.
Nothing contained in this Section 2.06 shall require the corporation to include
electronic mail addresses or other electronic contact information on such list.
Such list shall be open to the examination of any stockholder, for any purpose
germane to the meeting, for a period of at least ten days prior to the meeting,
either (a) on a reasonably accessible electronic network, provided that the
information required to gain access to such list is provided with the notice of
the meeting, or (b) during ordinary business hours, at a place within the city
where the meeting is to be held, which place shall be specified in the notice of
the meeting, or, if not so specified, at the place where the meeting is to be
held. In the event that the corporation determines to make the list available on
an electronic network, the corporation may take reasonable steps to ensure that
such information is available only to stockholders of the corporation. If the
meeting is to be held at a place, the list shall also be produced and kept at
the time and place of the meeting during the whole time thereof, and may be
inspected by any stockholder who is present. If the meeting is to be held solely
by means of remote communication, then the list shall also be open to the
examination of any stockholder during the whole time of the meeting on a
reasonably accessible electronic network, and the information required to access
such list shall be provided with the notice of the meeting.
Section 2.07 Proxies. Each stockholder entitled to vote at a meeting of
stockholders or to express consent or dissent to corporate action in writing
without a meeting may authorize another person or persons to act for him by
proxy, but no such proxy shall be voted or acted upon after three years from its
date, unless the proxy provides for a longer period.
Section 2.08 Quorum and Manner of Acting. At all meetings of
stockholders, a majority of the combined voting power of the outstanding shares
of the corporation entitled to vote, represented in person or by proxy, shall
constitute a quorum. If a quorum is present, the affirmative vote of a majority
of the shares represented at a meeting at which a quorum is present and entitled
to vote on the subject matter shall be the act of the stockholders, unless the
vote of a greater proportion or number or voting by classes is otherwise
required by law, the certificate of incorporation or these bylaws. In the
absence of a quorum, a majority of the shares so represented may adjourn the
meeting from time to time in accordance with Section 2.04, until a quorum shall
be present or represented.
Section 2.09 Action Without a Meeting.
(a) Written Consent. Unless otherwise provided in the
certificate of incorporation, any action required or permitted to be taken at
any meeting of the stockholders may be taken without a meeting, without prior
notice and without a vote, if a consent in writing,
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setting forth the action so taken, shall be signed by the holders of outstanding
stock having not less than the minimum number of votes that would be necessary
to authorize or take such action at a meeting at which all shares entitled to
vote thereon were present and voted (which consent may be signed in
counterparts). Every written consent shall bear the date of signature of each
stockholder who signs the consent and no written consent shall be effective to
take the corporate action referred to therein unless, within 60 days of the
earliest dated consent delivered to the corporation in the manner required by
the Delaware General Corporation Law, written consents signed by a sufficient
number of stockholders to take the action are delivered to the corporation in
the manner required by the Delaware General Corporation Law.
(b) Determination of Stockholders Entitled to Act By Consent.
For purposes of determining stockholders entitled to consent to corporate action
in writing without a meeting, the board of directors may fix, in advance, a date
as the record date for any such determination of stockholders, which date shall
be not more than ten days after the date upon which the resolution fixing the
record date is adopted by the board of directors. If no record date has been
fixed by the board of directors, the record date for determining stockholders
entitled to consent to corporate action in writing without a meeting, when no
prior action by the board of directors is required by the Delaware General
Corporation Law, shall be the first date on which a signed written consent
setting forth the action taken or proposed to be taken is delivered to the
corporation in the manner required by the Delaware General Corporation Law. If
no record date has been fixed by the board of directors and prior action by the
board of directors is required by the Delaware General Corporation Law, the
record date for determining stockholders entitled to consent to corporate action
in writing without a meeting shall be the close of business on the day on which
the board of directors adopts the resolution taking such prior action.
(c) Notice to Non-Consenting Stockholders. Prompt written
notice of the taking of corporate action without a meeting by less than
unanimous written consent shall be given to those stockholders who have not
consented in writing. Such notice shall be given in accordance with the
applicable provisions of Section 2.04.
ARTICLE III
Board of Directors
Section 3.01 General Powers. The business and affairs of the
corporation shall be managed by or under the direction of its board of
directors, except as otherwise provided in the Delaware General Corporation Law
or the certificate of incorporation.
Section 3.02 Number, Tenure and Qualifications. Except as otherwise
provided in the certificate of incorporation, the number of directors of the
corporation and the manner of electing such directors shall be as set forth from
time to time in a resolution of the board of directors. Directors shall be
elected at each annual meeting of stockholders. Each director shall hold office
until his successor shall have been elected and qualified or until his earlier
death, resignation or removal. Directors need not be residents of Delaware or
stockholders of the corporation.
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Section 3.03 Resignation. Any director may resign at any time by giving
notice to the corporation in writing or by electronic transmission. A director's
resignation shall take effect upon receipt or, if a different time of
effectiveness is specified therein, at the time specified therein. Unless
otherwise specified therein, the acceptance of such resignation shall not be
necessary to make it effective.
Section 3.04 Regular Meetings. A regular meeting of the board of
directors shall be held immediately after and at the same place as the annual
meeting of stockholders, or as soon thereafter as conveniently may be, at the
time and place, either within or without Delaware, determined by the board, for
the purpose of electing officers and for the transaction of such other business
as may come before the meeting. Failure to hold such a meeting, however, shall
not invalidate any action taken by any officer then or thereafter in office. The
board of directors may provide by resolution the time and place, either within
or outside Delaware, for the holding of additional regular meetings without
other notice than such resolution.
Section 3.05 Special Meetings. Special meetings of the board of
directors may be called only by the board of directors pursuant to a resolution
approved by the affirmative vote of a majority of the directors then in office.
The resolution calling the special meeting of the board of directors may fix any
convenient place, either within or outside Delaware, as the place for holding
any special meeting of the board of directors.
Section 3.06 Meetings by Telephone. Unless otherwise restricted by the
certificate of incorporation, members of the board of directors may participate
in a meeting of such board by means of conference telephone or other
communications equipment by means of which all persons participating in the
meeting can hear each other, and such participation in a meeting in such manner
shall constitute presence in person at the meeting.
Section 3.07 Notice of Meetings. Notice of each meeting of the board of
directors (except those regular meetings for which notice is not required)
stating the place, day and hour of the meeting shall be given to each director
at least five days prior thereto by the mailing of written notice by first
class, certified or registered mail, or at least two days prior thereto by
personal delivery (including delivery by private courier) of written notice or
by telephone, telegram, telex, cablegram or other similar method, except that in
the case of a meeting to be held pursuant to Section 3.07 notice may be given by
telephone one day prior thereto. The method of notice need not be the same to
each director. Notice shall be deemed to be given when deposited in the United
States mail, with postage thereon prepaid, addressed to the director at his
business or residence address, when delivered or communicated to the director or
when the telegram, telex, cablegram or other form of notice is personally
delivered to the director or delivered to the last address of the director
furnished by him to the corporation for such purpose. The business to be
transacted at, or the purpose of, any meeting of the board of directors shall be
specified in the notice or waiver of notice of such meeting.
Section 3.08 Quorum and Manner of Acting. Except as otherwise may be
required by law, the certificate of incorporation (including, without
limitation, paragraph (d) of Article Fifth thereof) or these bylaws, a majority
of the number of directors fixed in accordance with these bylaws, present in
person, shall constitute a quorum for the transaction of business at any
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meeting of the board of directors, and the vote of a majority of the directors
present at a meeting at which a quorum is present shall be the act of the board
of directors. If less than a quorum is present at a meeting, the directors
present may adjourn the meeting from time to time without further notice other
than announcement at the meeting, until a quorum shall be present. No director
may vote or act by proxy or power of attorney at any meeting of the board of
directors.
Section 3.09 Action Without a Meeting. Any action required or permitted
to be taken at any meeting of the board of directors or of any committee thereof
may be taken without a meeting, without prior notice and without a vote, if all
members of the board or committee, as the case may be, consent thereto in
writing or by electronic transmission and the writing or writings or electronic
transmission or transmissions are filed with the minutes of the proceedings of
the board or committee, as the case may be.
Section 3.10 Executive and Other Committees. The board of directors may
designate one or more committees, each committee to consist of one or more of
the directors of the corporation. The board may designate one or more directors
as alternate members of any committee, who may replace any absent or
disqualified member at any meeting of the committee. In the absence or
disqualification of a member of a committee, the member or members present at
any meeting and not disqualified from voting, whether or not such member or
members constitute a quorum, may unanimously appoint another member of the board
of directors to act at the meeting in the place of any such absent or
disqualified member. Any such committee, to the extent provided in the
resolution of the board of directors, shall have and may exercise all the powers
and authority of the board of directors in the management of the business and
affairs of the corporation, and may authorize the seal of the corporation to be
affixed to all papers which may require it; but no such committee shall have the
power or authority in reference to the following matters: (a) approving or
adopting, or recommending to the stockholders, any action or matter expressly
required by the Delaware General Corporation Law to be submitted to stockholders
for approval or (b) adopting, amending or repealing any bylaw of the
corporation. The delegation of authority to any committee shall not operate to
relieve the board of directors or any member of the board from any
responsibility imposed by law. Subject to the foregoing, the board of directors
may provide such powers, limitations and procedures for such committees as the
board deems advisable. To the extent the board of directors does not establish
other procedures, each committee shall be governed by the procedures set forth
in Sections 3.04 (except as they relate to an annual meeting), 3.05 through 3.09
and 7.01 and 7.02 as if the committee were the board of directors. Each
committee shall keep regular minutes of its meetings, which shall be reported to
the board of directors when required and submitted to the secretary of the
corporation for inclusion in the corporate records.
Section 3.11 Compensation. Unless otherwise restricted by the
certificate of incorporation, the board of directors shall have the authority to
fix the compensation of directors. The directors may be paid their expenses, if
any, of attendance at each meeting of the board of directors and each meeting of
any committee of the board of which he is a member and may be paid a fixed sum
for attendance at each such meeting or a stated salary or both a fixed sum and a
stated salary. No such payment shall preclude any director from serving the
corporation in any other capacity and receiving compensation therefor.
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ARTICLE IV
Officers
Section 4.01 Number and Qualifications. The officers of the corporation
shall consist of a chairman of the board, chief executive officer, a president,
a secretary and such other officers, including a vice-chairman or vice-chairmen
of the board, one or more vice-presidents, a treasurer and a controller, as may
from time to time be elected or appointed by the board. In addition, the board
of directors or the chairman of the board may elect or appoint such assistant
and other subordinate officers, including assistant vice-presidents, assistant
secretaries and assistant treasurers, as it or he shall deem necessary or
appropriate. Any number of offices may be held by the same person, except that
no person may simultaneously hold the offices of president and secretary.
Section 4.02 Election and Term of Office. Except as provided in
Sections 4.01 and 4.06, the officers of the corporation shall be elected by the
board of directors annually at the first meeting of the board held after each
annual meeting of the stockholders as provided in Section 3.06. If the election
of officers shall not be held as provided herein, such election shall be held as
soon thereafter as may be convenient. Each officer shall hold office until his
successor shall have been duly elected and shall have qualified or until the
expiration of his term in office if elected or appointed for a specified period
of time or until his earlier death, resignation or removal.
Section 4.03 Compensation. Officers shall receive such compensation for
their services as may be authorized or ratified by the board of directors and no
officer shall be prevented from receiving compensation by reason of the fact
that he is also a director of the corporation. Election or appointment as an
officer shall not of itself create a contract or other right to compensation for
services performed by such officer.
Section 4.04 Resignation. Any officer may resign at any time, subject
to any rights or obligations under any existing contracts between the officer
and the corporation, by giving notice to the corporation in writing or by
electronic transmission. An officer's resignation shall take effect upon receipt
or, if a different time of effectiveness is specified therein, at the time
stated therein. Unless otherwise specified therein, the acceptance of such
resignation shall not be necessary to make it effective.
Section 4.05 Removal. Any officer may be removed at any time by the
board of directors, or, in the case of assistant and other subordinate officers,
by the president (whether or not such officer was appointed by the chief
executive officer), whenever in its or his judgment, as the case may be, the
best interests of the corporation will be served thereby, but such removal shall
be without prejudice to the contract rights, if any, of the person so removed.
Election or appointment of an officer shall not in itself create contract
rights.
Section 4.06 Vacancies. A vacancy occurring in any office by death,
resignation, removal or otherwise may be filled by the board of directors, or,
if such office may be filled by
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the chairman of the board as provided in Section 4.01, by the chairman of the
board, for the unexpired portion of the term.
Section 4.07 Authority and Duties. The officers of the corporation
shall have the authority and shall exercise the powers and perform the duties
specified below and as may be additionally specified by the chairman of the
board, the board of directors or these bylaws (and in all cases where the duties
of any officer are not prescribed by the bylaws or the board of directors, such
officer shall follow the orders and instructions of the chairman of the board),
except that in any event each officer shall exercise such powers and perform
such duties as may be required by law:
(a) Chairman of the Board. The chairman of the board,
who shall be elected from among the directors, shall preside at all meetings of
the corporation's stockholders and board of directors and perform such other
duties as may be assigned to him from time to time by the board of directors.
(b) Chief Executive Officer. The chief executive
officer shall, subject to the direction and supervision of the board of
directors, (i) have general and active control of the affairs of the corporation
and general supervision of its officers, agents and employees; (ii) in the
absence of the chairman of the board, preside at all meetings of the
stockholders and the board of directors; (iii) see that all orders and
resolutions of the board of directors are carried into effect; and (iv) perform
all other duties incident to the office of chief executive officer and as from
time to time may be assigned to him by the board if directors.
(c) President. The president shall, subject to the
direction and supervision of the board of directors, supervise the day to day
operations of the company and perform all duties incident to the office of
president and as from time to time may be assigned to him by the board of
directors. At the request of the chief executive officer or in his absence or in
the event of his inability or refusal to act, the president shall perform the
duties of the chief executive officer, and when so acting shall have all the
powers and be subject to all the restrictions of the chief executive officer.
(d) Chief Operating Officer. The chief operating
officer shall, subject to the direction and supervision of the board of
directors, supervise the day to day operations of the corporation and perform
all other duties incident to the office of chief operating officer as from time
to time may be assigned to him by the chairman of the board, the board of
directors or the chief executive officer. At the request of the president, or in
his absence or inability or refusal to act, the chief operating officer shall
perform the duties of the president, and when so acting shall have all the power
of and be subject to all the restrictions upon the president.
(e) Chief Financial Officer. The chief financial
officer shall: (i) be the principal financial officer and treasurer of the
corporation and have the care and custody of all funds, securities, evidences of
indebtedness and other personal property of the corporation and deposit the same
in accordance with the instructions of the board of directors; (ii) receive and
give receipts and acquittances for moneys paid in on account of the corporation,
and pay out of the funds on hand all bills, payrolls and other just debts of the
corporation of whatever nature
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upon maturity; (iii) unless there is a controller, be the principal accounting
officer of the corporation and as such prescribe and maintain the methods and
systems of accounting to be followed, keep complete books and records of
account, prepare and file all local, state and federal tax returns, prescribe
and maintain an adequate system of internal audit and prepare and furnish to the
chairman of the board and the board of directors statements of account showing
the financial position of the corporation and the results of its operations;
(iv) upon request of the board, make such reports to it as may be required at
any time; and (v) perform all other duties incident to the office of chief
financial officer and treasurer and such other duties as from time to time may
be assigned to him by the board of directors or by the chief executive officer.
Assistant treasurers, if any, shall have the same powers and duties, subject to
the supervision by the chief financial officer. If there is no chief financial
officer, these duties shall be performed by the secretary or chief executive
officer or other person appointed by the board of directors.
(f) Vice-Presidents. The vice-president, if any (or if there is more
than one then each vice-president), shall assist the president and shall perform
such duties as may be assigned to him by the president, the chairman of the
board or the board of directors. Assistant vice presidents, if any, shall have
such powers and perform such duties as may be assigned to them by the chairman
of the board or by the board of directors.
(g) Secretary. The secretary shall: (i) keep the minutes of the
proceedings of the stockholders, the board of directors and any committees of
the board; (ii) see that all notices are duly given in accordance with the
provisions of these bylaws or as required by law; (iii) be custodian of the
corporate records and of the seal of the corporation; (iv) keep at the
corporation's registered office or principal place of business within or outside
Delaware a record containing the names and addresses of all stockholders and the
number and class of shares held by each, unless such a record shall be kept at
the office of the corporation's transfer agent or registrar; (v) have general
charge of the stock books of the corporation, unless the corporation has a
transfer agent; and (vi) in general, perform all duties incident to the office
of secretary and such other duties as from time to time may be assigned to him
by the president, the chairman of the board or the board of directors. Assistant
secretaries, if any, shall have the same duties and powers, subject to
supervision by the secretary.
Section 4.08 Surety Bonds. The board of directors may require any
officer or agent of the corporation to execute to the corporation a bond in such
sums and with such sureties as shall be satisfactory to the board, conditioned
upon the faithful performance of his duties and for the restoration to the
corporation of all books, papers, vouchers, money and other property of whatever
kind in his possession or under his control belonging to the corporation.
ARTICLE V
Stock
Section 5.01 Issuance of Shares. The issuance or sale by the
corporation of any shares of its authorized capital stock of any class,
including treasury shares, shall be made only upon authorization by the board of
directors, except as otherwise may be provided by law or the
9
certificate of incorporation. Every issuance of shares shall be recorded on the
books of the corporation maintained for such purpose by or on behalf of the
corporation.
Section 5.02 Transfer of Shares. Upon presentation and surrender to the
corporation or to a transfer agent of the corporation of a certificate of stock
duly endorsed or accompanied by proper evidence of succession, assignment or
authority to transfer, payment of all transfer taxes, if any, and the
satisfaction of any other requirements of law, including inquiry into and
discharge of any adverse claims of which the corporation has notice, the
corporation or the transfer agent shall issue a new certificate to the person
entitled thereto, cancel the old certificate and record the transaction on the
books maintained for such purpose by or on behalf of the corporation. No
transfer of shares shall be effective until it has been entered on such books.
The corporation or a transfer agent of the corporation may require a signature
guaranty or other reasonable evidence that any signature is genuine and
effective before making any transfer. Transfers of uncertificated shares shall
be made in accordance with applicable provisions of law.
Section 5.03 Registered Holders. The corporation shall be entitled to
recognize the exclusive right of a person registered on its books as the owner
of shares to receive dividends, and to vote as such owner, and to hold liable
for calls and assessments a person registered on its books as the owner of
shares, and shall not be bound to recognize any equitable or other claim to or
interest in such share or shares on the part of any other person, whether or not
it shall have express or other notice thereof, except as otherwise provided by
the laws of Delaware.
Section 5.04 Transfer Agents, Registrars and Paying Agents. The board
of directors may at its discretion appoint one or more transfer agents,
registrars and agents for making payment upon any class of stock, bond,
debenture or other security of the corporation. Such agents and registrars may
be located either within or outside Delaware. They shall have such rights and
duties and shall be entitled to such compensation as may be agreed.
ARTICLE VI
Indemnification
Section 6.01 Directors and Officers. The corporation shall indemnify
its directors and officers to the fullest extent not prohibited by the Delaware
General Corporation Law or any other applicable law; provided, however, that the
corporation may modify the extent of such indemnification by individual
contracts with its directors and officers; and, provided, further, that the
corporation shall not be required to indemnify any director or officer in
connection with any proceeding (or part thereof) initiated by such person unless
(i) such indemnification is expressly required to be made by law, (ii) the
proceeding was authorized by the Board of Directors of the corporation, (iii)
such indemnification is provided by the corporation, in its sole discretion,
pursuant to the powers vested in the corporation under the Delaware General
Corporation Law or any other applicable law or (iv) such indemnification is
required to be made under Section 6.04.
Section 6.02 Employees and Other Agents. The corporation shall have
power to indemnify its employees and other agents as set forth in the Delaware
General Corporation Law
10
or any other applicable law. The Board of Directors shall have the power to
delegate the determination of whether indemnification shall be given to any such
person to such officers or other persons as the Board of Directors shall
determine.
Section 6.03 Expenses.
(a) The corporation shall advance to any person who was or is a party
or is threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative, by reason of the fact that he is or was a director or officer of
the corporation, or is or was serving at the request of the corporation as a
director or officer of another corporation, partnership, joint venture, trust or
other enterprise, prior to the final disposition of the proceeding, promptly
following request therefor, all expenses incurred by any director or officer in
connection with such proceeding upon receipt of an undertaking by or on behalf
of such person to repay said amounts if it should be determined ultimately that
such person is not entitled to be indemnified under this Article VI or
otherwise.
(b) Notwithstanding the foregoing, unless otherwise determined pursuant
to Section 6.05, no advance shall be made by the corporation to an officer of
the corporation (except by reason of the fact that such officer is or was a
director of the corporation, in which event this paragraph shall not apply) in
any action, suit or proceeding, whether civil, criminal, administrative or
investigative, if a determination is reasonably and promptly made (i) by the
Board of Directors by a majority vote of a quorum consisting of directors who
were not parties to the proceeding, or (ii) if such quorum is not obtainable,
or, even if obtainable, a quorum of disinterested directors so directs, by
independent legal counsel in a written opinion, that the facts known to the
decision-making party at the time such determination is made demonstrate clearly
and convincingly that such person acted in bad faith or in a manner that such
person did not believe to be in or not opposed to the best interests of the
corporation.
Section 6.04 Enforcement. Without the necessity of entering into an
express contract, all rights to indemnification and advances to directors and
officers under this Article VI shall be deemed to be contractual rights and be
effective to the same extent and as if provided for in a contract between the
corporation and the director or officer. Any right to indemnification or
advances granted by this Article VI to a director or officer shall be
enforceable by or on behalf of the person holding such right in any court of
competent jurisdiction if (i) the claim for indemnification or advances is
denied, in whole or in part, or (ii) no disposition of such claim is made within
ninety (90) days of request therefor. The claimant in such enforcement action,
if successful in whole or in part, shall be entitled to be paid also the expense
of prosecuting his claim. In connection with any claim for indemnification, the
corporation shall be entitled to raise as a defense to any such action that the
claimant has not met the standards of conduct that make it permissible under the
Delaware General Corporation Law or any other applicable law for the corporation
to indemnify the claimant for the amount claimed. In connection with any claim
by an officer of the corporation (except in any action, suit or proceeding,
whether civil, criminal, administrative or investigative, by reason of the fact
that such officer is or was a director of the corporation) for advances, the
corporation shall be entitled to raise a defense as to any such action clear and
convincing evidence that such person acted in bad faith or in a manner that such
person did not believe to be in or not opposed to the best interests of the
corporation, or with
11
respect to any criminal action or proceeding that such person acted without
reasonable cause to believe that his conduct was lawful. Neither the failure of
the corporation (including its Board of Directors, independent legal counsel or
its stockholders) to have made a determination prior to the commencement of such
action that indemnification of the claimant is proper in the circumstances
because he has met the applicable standard of conduct set forth in the Delaware
General Corporation Law or any other applicable law, nor an actual determination
by the corporation (including its Board of Directors, independent legal counsel
or its stockholders) that the claimant has not met such applicable standard of
conduct, shall be a defense to the action or create a presumption that claimant
has not met the applicable standard of conduct. In any suit brought by a
director or officer to enforce a right to indemnification or to an advancement
of expenses hereunder, the burden of proving that the director or officer is not
entitled to be indemnified, or to such advancement of expenses, under this
Article VI or otherwise shall be on the corporation.
Section 6.05 Non-Exclusivity of Rights. The rights conferred on any
person by this Article VI shall not be exclusive of any other right which such
person may have or hereafter acquire under any applicable statute, provision of
the certificate of incorporation, bylaws, agreement, vote of stockholders or
disinterested directors or otherwise, both as to action in his official capacity
and as to action in another capacity while holding office. The corporation is
specifically authorized to enter into individual contracts with any or all of
its directors, officers, employees or agents respecting indemnification and
advances, to the fullest extent not prohibited by the Delaware General
Corporation Law or any other applicable law.
Section 6.06 Survival of Rights. The rights conferred on any person by
this Article VI shall continue as to a person who has ceased to be a director,
officer, employee or other agent and shall inure to the benefit of the heirs,
executors and administrators of such a person.
Section 6.07 Insurance. To the fullest extent permitted by the Delaware
General Corporation Law, or any other applicable law, the corporation, upon
approval by the Board of Directors, may purchase insurance on behalf of any
person required or permitted to be indemnified pursuant to this Article VI.
Section 6.08 Amendments. Any repeal or modification of this Article VI
shall only be prospective and shall not affect the rights under this Article VI
in effect at the time of the alleged occurrence of any action or omission to act
that is the cause of any proceeding against any agent of the corporation.
Section 6.09 Severability. If this Article VI or any portion hereof
shall be invalidated on any ground by any court of competent jurisdiction, then
the corporation shall nevertheless indemnify each director and officer to the
full extent not prohibited by any applicable portion of this Article VI that
shall not have been invalidated, or by any other applicable law. If this Article
VI shall be invalid due to the application of the indemnification provisions of
another jurisdiction, then the corporation shall indemnify each director and
officer to the full extent under applicable law.
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Section 6.10 Certain Definitions. For the purposes of this Article VI,
the following definitions shall apply:
(a) The term "proceeding" shall be broadly construed and shall
include, without limitation, the investigation, preparation, prosecution,
defense, settlement, arbitration and appeal of, and the giving of testimony in,
any threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative.
(b) The term "expenses" shall be broadly construed and shall
include, without limitation, court costs, attorneys' fees, witness fees, fines,
amounts paid in settlement or judgment and any other costs and expenses of any
nature or kind incurred in connection with any proceeding.
(c) The term "corporation" shall include, in addition to the
resulting corporation, any constituent corporation (including any constituent of
a constituent) absorbed in a consolidation or merger which, if its separate
existence had continued, would have had power and authority to indemnify its
directors, officers, and employees or agents, so that any person who is or was a
director, officer, employee or agent of such constituent corporation, or is or
was serving at the request of such constituent corporation as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, shall stand in the same position under the provisions
of this Article VI with respect to the resulting or surviving corporation as he
would have with respect to such constituent corporation if its separate
existence had continued.
(d) References to a "director," "executive officer,"
"officer," "employee," or "agent" of the corporation shall include, without
limitation, situations where such person is serving at the request of the
corporation as, respectively, a director, executive officer, officer, employee,
trustee or agent of another corporation, partnership, joint venture, trust or
other enterprise.
(e) References to "other enterprises" shall include employee
benefit plans; references to "fines" shall include any excise taxes assessed on
a person with respect to an employee benefit plan; and references to "serving at
the request of the corporation" shall include any service as a director,
officer, employee or agent of the corporation which imposes duties on, or
involves services by, such director, officer, employee, or agent with respect to
an employee benefit plan, its participants, or beneficiaries; and a person who
acted in good faith and in a manner he reasonably believed to be in the interest
of the participants and beneficiaries of an employee benefit plan shall be
deemed to have acted in a manner "not opposed to the best interests of the
corporation" as referred to in this Article VI.
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ARTICLE VII
Miscellaneous
Section 7.01 Waivers of Notice. Whenever notice is required to be given
by law, by the certificate of incorporation or by these bylaws, a written waiver
thereof, signed by the person entitled to said notice or a waiver by electronic
transmission by the person entitled to notice, whether before or after the time
stated therein, shall be deemed equivalent to notice. Attendance of a person at
a meeting or (in the case of a stockholder) by proxy shall constitute a waiver
of notice of such meeting, except when the person attends a meeting for the
express purpose of objecting, at the beginning of the meeting, to the
transaction of any business because the meeting was not lawfully called or
convened. Neither the business to be transacted at, nor the purpose of, any
meeting need be specified in any written waiver of notice or waiver of notice by
electronic transmission unless required by these bylaws to be included in the
notice of such meeting.
Section 7.02 Presumption of Assent. A director or stockholder of the
corporation who is present at a meeting of the board of directors or
stockholders at which action on any corporate matter is taken shall be presumed
to have assented to the action taken unless his dissent shall be entered in the
minutes of the meeting or unless he shall file his written dissent to such
action with the person acting as the secretary of the meeting before the
adjournment thereof or shall forward such dissent by registered mail to the
secretary of the corporation immediately after the adjournment of the meeting.
Such right to dissent shall not apply to a director or stockholder who voted in
favor of such action.
Section 7.03 Voting of Securities by the Corporation. Unless otherwise
provided by resolution of the board of directors, on behalf of the corporation
the chairman of the board, chief executive officer, president, secretary,
treasurer or any vice-president shall attend in person or by substitute
appointed by him, or shall execute written instruments appointing a proxy or
proxies to represent the corporation at, all meetings of the stockholders of any
other corporation, association or other entity in which the corporation holds
any stock or other securities, and may execute written waivers of notice with
respect to any such meetings. At all such meetings and otherwise, the chairman
of the board, chief executive officer, president, secretary, treasurer or any
vice-president, in person or by substitute or proxy as aforesaid, may vote the
stock or other securities so held by the corporation and may execute written
consents and any other instruments with respect to such stock or securities and
may exercise any and all rights and powers incident to the ownership of said
stock or securities, subject, however, to the instructions, if any, of the board
of directors.
Section 7.04 Seal. The corporate seal of the corporation shall be in
such form as adopted by the board of directors, and any officer of the
corporation may, when and as required, affix or impress the seal, or a facsimile
thereof, to or on any instrument or document of the corporation.
Section 7.05 Fiscal Year. The fiscal year of the corporation shall be
as established by the board of directors.
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Section 7.06 Amendments. These bylaws may be amended or repealed only
in the manner set forth in the certificate of incorporation.
15
EXHIBIT 6.1(b)
UNITEDGLOBALCOM, INC.
CERTIFICATE OF DESIGNATION
ESTABLISHING THE
VOTING POWERS, DESIGNATIONS, PREFERENCES, LIMITATIONS,
RESTRICTIONS, AND RELATIVE RIGHTS OF
SERIES E CONVERTIBLE PREFERRED STOCK
-----------------------------------------
PURSUANT TO SECTION 151 OF THE
GENERAL CORPORATION LAW OF THE STATE OF DELAWARE
-----------------------------------------
UNITEDGLOBALCOM, INC., a corporation organized and existing
under the General Corporation Law of the State of Delaware (the "Issuer"), does
hereby certify that (i) pursuant to authority conferred upon the Board of
Directors of the Issuer by its Second Restated Certificate of Incorporation, as
amended to date, and pursuant to the provisions of Section 151 of the Delaware
General Corporation Law (the "DGCL"), the Board of Directors of the Issuer has
authorized the creation and issuance of shares of the Issuer's Series E
Convertible Preferred Stock (the "Series E Preferred Stock") and appointed a
committee to fix the designations, preferences and rights of such Series E
Preferred Stock and (ii) the following resolution fixing the designations,
preferences and rights of such Series E Preferred Stock was duly adopted by such
committee of the Board of Directors of the Issuer on ____________, 2002, which
resolution remains in full force and effect. Certain capitalized terms used
herein are defined in Section 7.
RESOLVED, that pursuant to the authority expressly granted to
and vested in the Board of Directors of the Issuer by the
provisions of its Second Restated Certificate of Incorporation
as amended from time to time (the "Certificate of
Incorporation"), and pursuant to Section 151(g) of the General
Corporation Laws of the State of
1
Delaware, from the 3,000,000 shares of Preferred Stock, $0.01
par value per share, of the Issuer authorized to be issued
pursuant to the Certificate of Incorporation (the "Preferred
Stock"), there shall be a series of Preferred Stock designated
the Series E Convertible Preferred Stock, having the number of
shares and, to the extent that the designations, powers,
preferences and relative and other special rights and the
qualifications, limitations and restrictions of such Preferred
Stock are not stated and expressed in the Certificate of
Incorporation, the powers, preferences and relative and other
special rights and the qualifications, limitations and
restrictions thereof, as follows:
1. Designation and Number of Shares
1.1 The series of Preferred Stock will be known as the Series
E Convertible Preferred Stock.
1.2 The Series E Preferred Stock will consist of 1,500 shares
of the authorized but unissued shares of Preferred Stock of the Issuer.
2. Dividends, Distributions, Subdivisions, Combinations and
Reclassifications
2.1 Holders of Series E Preferred Stock will not be entitled
to receive any dividends or distributions with respect to shares of Series E
Preferred Stock except as set forth in Section 5 hereof.
2.2 The Issuer may not make or pay any distribution or
dividend in shares of Series E Preferred Stock, and may not effect any
subdivision, combination or reclassification of shares of Series E Preferred
Stock.
3. Ranking
3.1 The Series E Preferred Stock will, with respect to
distributions upon the liquidation, winding up or dissolution of the Issuer,
rank:
(a) senior to (i) all classes of Common Stock and
(ii) each series of Preferred Stock that is established after the date of this
Certificate of Designation, the terms of which do not expressly provide that
such series will rank senior to or on a parity with the Series E Preferred Stock
as to distributions upon the liquidation, winding up or dissolution of the
Issuer (collectively, with the Common Stock, referred to as the "Junior
Securities");
(b) on a parity with each series of Preferred Stock
issued that is established after the date of this Certificate of Designation,
the terms of which expressly provide that such series will rank on a parity with
the Series E Preferred Stock as to distributions upon the liquidation, winding
up or dissolution of the Issuer (collectively referred to as "Parity
Securities"); and
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(c) junior to (i) each series of Preferred Stock that
is authorized as of the date hereof and (ii) each series of Preferred Stock that
is established after the date of this Certificate of Designation, the terms of
which expressly provide that such series will rank senior to the Series E
Preferred Stock as to distributions upon liquidation, winding up or dissolution
of the Issuer (collectively referred to as "Senior Securities").
4. Conversion
4.1 If the Merger Agreement is terminated, then, following
such termination, each share of Series E Preferred Stock shall automatically
convert into [__________] shares of Class A Stock (as adjusted from time to time
to appropriately reflect the effect of any stock splits, reverse splits, stock
dividends, combinations and other similar events affecting the shares of Class A
Stock and occurring after the date of issuance of the Series E Preferred
Stock).(1)
4.2 On the effective date of the conversion of the Series E
Preferred Stock pursuant to Section 4.1, all rights with respect to the shares
of Series E Preferred Stock so converted, including the rights, if any, to
receive notices, will terminate, except the rights of Holders thereof to (1)
receive certificates for the number of shares of Class A Stock into which such
shares of Series E Preferred Stock have been converted; and (2) exercise the
rights to which they are entitled as Holders of Class A Stock.
4.3 The Issuer shall at all times reserve and keep available
for issuance upon the conversion of the Series E Preferred Stock, free from
preemptive rights, such number of its authorized but unissued shares of Class A
Stock as will from time to time be sufficient to permit the conversion of all
outstanding shares of Series E Preferred Stock, and shall take all action
required to increase the authorized number of shares of each class of Class A
Stock if at any time there shall be insufficient authorized unissued shares of
Class A Stock to permit such reservation or to permit the conversion of all
outstanding shares of Series E Preferred Stock.
4.4 If any shares of Class A Stock that would be issuable upon
conversion pursuant to this Section 4 require registration with or approval of
any Governmental Authority before such shares may be issued upon conversion, the
Issuer will as expeditiously as possible cause such shares to be duly registered
or approved, as the case may be. The Issuer will use commercially reasonable
efforts to list the shares of Class A Stock required to be delivered upon
conversion of shares of Series E Preferred Stock prior to such delivery upon the
principal national securities exchange or association, if any, upon which the
outstanding Class A Stock is listed at the time of such delivery.
---------
(1) Each share of Series E Preferred Stock will convert pursuant to this
provision into a number of shares of United Class A Stock equal to 1/1,500th
of the result (rounded down to the nearest share) of (A) the quotient of X
divided by Y minus (B) X. For purposes of the foregoing, "X" shall be equal
to the aggregate number of shares of United Class A Stock and United Class B
Stock outstanding immediately prior to the Closing and "Y" shall be equal
to 0.995049505.
3
4.5 The issuance or delivery of certificates evidencing shares
of Class A Stock upon the conversion of shares of Series E Preferred Stock shall
be made without charge to the Holder of shares of Series E Preferred Stock for
such certificates or for any tax in respect of the issuance or delivery of such
certificates or the securities represented thereby, and such certificates shall
be issued or delivered in the respective names of the Holders of the shares of
Series E Preferred Stock so converted. Certificates for shares of Series E
Preferred Stock shall bear such legends as the Issuer shall from time to time
reasonably deem appropriate.
4.6 No fractional shares of Class A Stock or securities
representing fractional shares of Class A Stock will be issued upon conversion
of the Series E Preferred Stock. If more than one share of Series E Preferred
Stock is held by a particular Holder at the time of such conversion, the number
of full shares of Class A Stock that shall be issuable upon conversion thereof
shall be computed on the basis of the aggregate number of shares of Series E
Preferred Stock held by such Holder. Any fractional shares of Class A Stock
shall instead be rounded down to the nearest whole share if such fraction is
less than 0.5 and rounded up to the nearest whole share if such fraction is
equal to or greater than 0.5 and the Issuer shall issue upon such conversion the
appropriate number of full shares of Class A Stock.
4.7 Each share of Class A Stock delivered to a Holder as a
result of the conversion of any shares of Series E Preferred Stock pursuant to
this Section 4 shall be accompanied by any rights associated generally with each
other share of Class A Stock outstanding as of the effective date of the
conversion.
5. Liquidation Preference
5.1 Upon any voluntary or involuntary liquidation, dissolution
or winding up of the Issuer, a Holder of a share of Series E Preferred Stock
will be entitled to be paid, out of assets of the Issuer available for
distribution, the Liquidation Preference of such share, and no other amount with
respect to such share, before any distribution is made on any Junior Securities.
5.2 If, upon any voluntary liquidation, dissolution or winding
up of the Issuer, the amounts payable with respect to the Liquidation Preference
of the Series E Preferred Stock and the liquidation preferences of all other
Parity Securities are not paid in full, the Holders of the Series E Preferred
Stock and the Parity Securities will share pro rata in proportion to the full
distribution to which each would otherwise be entitled in such liquidation,
dissolution or winding up.
5.3 Neither the sale, conveyance, exchange or transfer (for
cash, shares of stock, securities or other consideration) of all or
substantially all of the property or business of the Issuer (other than in
connection with the winding up of its business), nor the merger (including
without limitation the New United/Old United Merger) or consolidation of the
Issuer with or into any other Person, will be deemed to be a dissolution,
liquidation, or winding up, voluntary or involuntary, of the Issuer.
6. No Voting Rights
6.1 Holders of the Series E Preferred Stock have no voting
rights except as required by law.
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6.2 To the fullest extent permitted by law and the Certificate
of Incorporation of the Issuer, any action that may be taken by a vote of the
Series E Preferred Stock voting as a separate class may be taken without a
meeting, without prior notice and without a vote if a consent or consents in
writing, setting forth the action so taken, shall be signed by the Holders of
outstanding shares of Series E Preferred Stock having not less than the minimum
number of votes that would be necessary to authorize or take such action at a
meeting at which all shares of Series E Preferred Stock entitled to vote thereon
were present and voted and shall be delivered to the Issuer by delivery to its
registered office in the State of Delaware, the Issuer's principal place of
business, or an officer or agent of the Issuer having custody of the books in
which proceedings of meetings of stockholders are recorded.
7. Certain Definitions
Set forth below are certain defined terms used in this Certificate of
Designation.
7.1 "Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For purposes of this definition,
"control" (including, with correlative meanings, the terms "controlling,"
"controlled by" and "under common control with"), as used with respect to any
Person, shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of such Person,
whether through the ownership of voting securities, by agreement of or
otherwise.
7.2 "Business Day" means any day other than a Legal Holiday.
7.3 "Capital Stock" means any and all shares, interests,
participations, rights or other equivalents (however designated) of corporate
stock or partnership or membership interests, whether common or preferred.
7.4 "Class A Stock" means the Class A Common Stock, par value
$.01 per share, of the Issuer and any securities, cash or property into which
the Class A Common Stock may be changed or for which the Class A Common Stock
may be exchanged.
7.5 "Class B Stock" means the Class B Common Stock, par value
$.01 per share, of the Issuer and any securities, cash or property into which
the Class B Common Stock may be changed or for which the Class B Common Stock
may be exchanged.
7.6 "Common Stock" means the Class A Stock and Class B Stock
and each such class.
7.7 "Control" and derivative terms mean the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of another Person, whether through the ownership of
voting securities, by contract or otherwise.
7.8 "Holder" means a Person in whose name shares of Capital
Stock are registered.
5
7.9 "Issuer" means UnitedGlobalCom, Inc., a Delaware
corporation and any successor thereto by merger, consolidation, transfer of all
or substantially all its assets or otherwise.
7.10 "Junior Securities" is as defined in Section 3.1.
7.11 "Legal Holiday" means a Saturday, a Sunday or a day on
which banking institutions in New York, New York, Denver, Colorado or at a place
payment is to be received or shares delivered on conversion are authorized by
law, regulation or executive order to remain closed.
7.12 "Liquidation Preference" means [$10,000] per share of
Series E Preferred Stock.
7.13 "Merger Agreement" means the
Agreement and Plan of
Restructuring and Merger, dated as of _________, 2002, among the Issuer, New
UnitedGlobalCom, Inc., United/New United Merger Sub, Inc., Liberty Media
Corporation, Liberty Media International, Inc., Liberty Global, Inc., and the
Persons indicated as "Founders" on the signature pages thereto.
7.14 "New United/Old United Merger" means the merger of
United/New United Merger Sub, Inc. with and into the Issuer, with the Issuer as
the surviving entity in such merger, as contemplated by the Merger Agreement.
7.15 "Parity Securities" is as defined in Section 3.1.
7.16 "Person" means any individual, corporation, partnership,
limited liability company, joint venture, association, joint stock issuer,
interest, trust or unincorporated organization (including any subdivision or
ongoing business of any such entity or substantially all of the assets of any
such entity, subdivision or business).
7.17 "Preferred Stock" means the Preferred Stock, par value
$.01 per share, of the Issuer.
7.18 The "Registrar" shall be as established pursuant to
Section 8 hereof.
7.19 "Senior Securities" is as defined in Section 3.1.
7.20 "Series E Preferred Stock" means the Series E Preferred
Stock authorized by this Certificate of Designation.
7.21 "Subscription Agreements" means the UnitedGlobalCom, Inc.
Series E Convertible Preferred Stock Subscription Agreements, dated as of
[________], 2002, among the Issuer, on the one hand, and [________________], on
the other hand, relating to the purchase and sale of an aggregate of 1,500
shares of Series E Preferred Stock.
6
8. Registrar
8.1 The Issuer shall maintain an office or agency where shares
of Series E Preferred Stock may be presented for transfer (the "Registrar"). The
Issuer may appoint the Registrar in such location as it shall determine.
Notwithstanding the foregoing, the Issuer may act as the Registrar. The initial
Registrar for the Series E Preferred Stock shall be the Issuer.
9. Transfer of Shares; Replacement of Shares
9.1 No transfer of shares of Series E Preferred Stock shall be
effected unless such transfer complies with the terms of the Subscription
Agreement. Any transfer of shares of Series E Preferred Stock shall be effected
by delivery to the Registrar (or, if no Registrar is appointed, the Issuer) of
the certificate or certificates evidencing such shares of Series E Preferred
Stock (or an affidavit as to the loss, theft or destruction thereof) and a duly
executed assignment substantially in the form attached hereto as Exhibit A.
9.2 The Issuer shall issue a new certificate representing
shares of Series E Preferred Stock in place of any such certificate theretofore
issued by it that has been lost, stolen or destroyed upon the delivery of an
affidavit executed by the Holder of the shares of Series E Preferred Stock
represented by such lost, stolen or destroyed certificate, or such Holder's
legal representative, to such effect. The Issuer shall not require the posting
of any bond in connection with the issuance of such replacement certificate.
10. Other Provisions
10.1 All notices, requests or demands under this Certificate
of Designation will be in writing and will be deemed to have been duly given or
delivered (a) when personally delivered, (b) when delivered by facsimile
transmission upon telephone confirmation of the receipt thereof, or (c) one
Business Day after being given to an express courier with a reliable system for
tracking delivery, postage prepaid, and addressed (x) if to the Issuer, to:
UnitedGlobalCom, Inc., 0000 Xxxxx Xxxxxx Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxxxxx
00000, Attn: General Counsel, or to such other address provided by the Issuer by
notice to each Holder of Series E Preferred Stock, (y) if to the Registrar, to
the Issuer at the address indicated above and (z) if to a Holder of Series E
Preferred Stock, to such address indicated for such Holder on the stock transfer
books of the Issuer at the time such notice is sent. With respect to any notice
to a Holder of shares of the Series E Preferred Stock required to be provided
hereunder, neither failure to mail such notice, nor any defect therein or in the
mailing thereof, to any particular Holder shall affect the sufficiency of the
notice or the validity of the proceedings referred to in such notice with
respect to the other Holders of Series E Preferred Stock or affect the legality
or validity of any distribution, reclassification, consolidation, merger,
conveyance, transfer, dissolution, liquidation or winding up, or the vote upon
any such action.
10.2 If the date upon which any share delivery, payment,
notice or other action is, by the terms of this Certificate of Designation,
required to be made or taken is not a Business Day, such share delivery, payment
or other action shall instead be made or taken on the next succeeding Business
Day.
7
10.3 Shares of Series E Preferred Stock issued and reacquired
will be retired and canceled promptly after reacquisition thereof and, upon
compliance with the applicable requirements of Delaware law, have the status of
authorized but unissued shares of Preferred Stock of the Issuer undesignated as
to series and may with any and all other authorized but unissued shares of
Preferred Stock of the Issuer be designated or redesignated and issued or
reissued, as the case may be, as part of any series of Preferred Stock of the
Issuer other than Series E Preferred Stock.
10.4 Fractional shares of Series E Preferred Stock may not be
issued.
10.5 Any Holder of shares of Series E Preferred Stock may
proceed to protect and enforce its rights by any available remedy by proceeding
at law or in equity to protect and enforce any such rights, whether for the
specific enforcement of any provision in this Certificate of Designation or in
aid of the exercise of any power granted herein, or to enforce any other proper
remedy.
10.6 The shares of Series E Preferred Stock shall not be
subject to redemption.
8
IN WITNESS WHEREOF, UnitedGlobalCom, Inc. caused this
Certificate of Designation to be signed this ____ day of ________, 2002.
UNITEDGLOBALCOM, INC.
By:
-------------------------------
Name:
Title:
EXHIBIT A
FORM OF ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers
[__________] shares of the Series E Convertible Preferred Stock, $.01 par value
per share ("Series E Preferred Stock"), of UnitedGlobalCom, Inc., evidenced by
the attached certificate or certificates (or evidenced by a certificate or
certificates that have been lost, stolen or destroyed, as stated in the attached
affidavit) and standing in the undersigned's name on the stock transfer books of
the Issuer, to:
[Assignee's Name]
[Assignee's social security or tax identification number]
[Assignee's address and zip code]
and irrevocably appoints [__________________] as agent to transfer such shares
of Series E Preferred Stock on the stock transfer books of the Issuer. Such
agent may appoint another to act on his or her behalf.
Date: Signature*:
-------------------------- -------------------------------
*Sign exactly as the shares of Series E Preferred Stock are registered on the
stock transfer books of the Issuer.
Signature Guarantee**:
-----------------------------------
**Signature must be guaranteed by an "eligible guarantee institution" (i.e., a
bank, stockbroker, savings and loan association or credit union) meeting the
requirements of the Registrar (as defined in the Certificate of Designation
designating the Series E Preferred Stock), which requirements include membership
or participation in the Securities Transfer Agents Medallion Program ("STAMP")
or such other "signature guarantee program" as may be determined by the
Registrar in addition to, or in substitution for, STAMP, all in accordance with
the Securities Exchange Act of 1934, as amended.
EXHIBIT 6.2(a)-1
CERTIFICATE OF INCORPORATION
OF
UNITED/NEW UNITED MERGER SUB, INC.
The undersigned hereby establishes a corporation pursuant to the Delaware
General Corporation Law, and for such purpose hereby certifies as follows:
FIRST. The name of the corporation is United/New United Merger Sub, Inc.
SECOND. The address of its registered office in the State of Delaware is
0000 Xxxxxx Xxxxxx in the City of Xxxxxxxxxx, Xxxxxx xx Xxx Xxxxxx 00000. The
name of its registered agent at such address is The Corporation Trust Company.
THIRD. The nature of the business or purposes to be conducted or promoted
is to engage in any lawful act or activities for which corporations may be
organized under the Delaware General Corporation Law.
FOURTH. (a) The aggregate number of shares that the corporation shall have
authority to issue is 3,030 shares of common stock, each having a par value of
$.01, divided into 15 shares of Class A common stock, 15 shares of Class B
common stock and 3,000 shares of Class C common stock. The rights and privileges
of each class of common stock shall be identical in all respects.
(b) Cumulative voting shall not be allowed in the election of directors
or for any other purpose.
(c) No stockholder of the corporation shall have any preemptive or
similar right to subscribe for any additional shares of stock, or for other
securities of any class, or for rights, warrants or options to purchase stock or
for scrip, or for securities of any kind convertible into stock or carrying
stock purchase warrants or privileges.
FIFTH. The name and mailing address of the incorporator is:
Xxxxxxx X. Xxxxx
1700 Lincoln, Suite 4100
Xxxxxx, Xxxxxxxx 00000
SIXTH. The name and mailing address of the person who is to serve as the
initial director until the first annual meeting of stockholders or until his
successor is elected and has qualified is:
NAME MAILING ADDRESS
---- ---------------
Xxxx X. Xxxxxxxxx 0000 Xxxxx Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
SEVENTH. To the fullest extent permitted by the Delaware General
Corporation Law, as the same exists or may hereafter be amended, a director of
the corporation shall not be liable to the corporation or its stockholders for
monetary damages for breach of fiduciary duty as a director. Any repeal or
modification of this Article by the stockholders of the corporation shall be
prospective only and shall not adversely affect any right or protection of a
director of the corporation existing at the time of such repeal or modification.
EIGHTH. Elections of directors need not be by written ballot unless the
bylaws of the corporation so provide.
NINTH. The board of directors of the corporation is expressly authorized to
make, alter or repeal the bylaws of the corporation.
TENTH. The Corporation hereby elects not to be governed by Section 203 of
the General Corporation Law of the State of Delaware.
1
Dated this 29th day of November, 2001.
/s/ XXXXXXX X. XXXXX
--------------------------------------
Xxxxxxx X. Xxxxx -- Incorporator
Holme Xxxxxxx & Xxxx LLP
0000 Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000-0000
000-000-0000
[NO NOTARIZATION OR VERIFICATION REQUIRED]
2
EXHIBIT 6.2(a)-2
BYLAWS
OF
UNITED/NEW UNITED MERGER SUB, INC.
Adopted ____________, 2001
INDEX TO BYLAWS
OF
UNITED/NEW UNITED MERGER SUB, INC.
SECTION PAGE
------- ----
ARTICLE I Offices
Section 1.01 Business Offices............................................................1
Section 1.02 Registered Office...........................................................1
ARTICLE II Stockholders
Section 2.01 Annual Meeting..............................................................1
Section 2.02 Special Meetings............................................................1
Section 2.03 Place of Meeting............................................................1
Section 2.04 Notice of Meetings..........................................................1
Section 2.05 Fixing Date for Determination of Stockholders of Record.....................2
Section 2.06 Voting List.................................................................2
Section 2.07 Proxies.....................................................................3
Section 2.08 Quorum and Manner of Acting.................................................3
Section 2.09 Action Without a Meeting....................................................3
ARTICLE III Board of Directors
Section 3.01 General Powers..............................................................4
Section 3.02 Number, Tenure and Qualifications...........................................4
Section 3.03 Resignation.................................................................4
Section 3.04 Regular Meetings............................................................4
Section 3.05 Special Meetings............................................................4
Section 3.06 Meetings by Telephone.......................................................5
Section 3.07 Notice of Meetings..........................................................5
Section 3.08 Quorum and Manner of Acting.................................................5
Section 3.09 Action Without a Meeting....................................................5
Section 3.10 Executive and Other Committees..............................................5
Section 3.11 Compensation................................................................6
ARTICLE IV Officers
Section 4.01 Number and Qualifications...................................................6
Section 4.02 Election and Term of Office.................................................6
Section 4.03 Compensation................................................................6
Section 4.04 Resignation.................................................................7
Section 4.05 Removal.....................................................................7
Section 4.06 Vacancies...................................................................7
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SECTION PAGE
------- ----
Section 4.07 Authority and Duties........................................................7
Section 4.08 Surety Bonds................................................................8
ARTICLE V Stock
Section 5.01 Issuance of Shares..........................................................9
Section 5.02 Transfer of Shares..........................................................9
Section 5.03 Registered Holders..........................................................9
Section 5.04 Transfer Agents, Registrars and Paying Agents...............................9
ARTICLE VI Indemnification
Section 6.01 Directors and Officers......................................................9
Section 6.02 Employees and Other Agents.................................................10
Section 6.03 Expenses...................................................................10
Section 6.04 Enforcement................................................................10
Section 6.05 Non-Exclusivity of Rights..................................................11
Section 6.06 Survival of Rights.........................................................11
Section 6.07 Insurance..................................................................11
Section 6.08 Amendments.................................................................11
Section 6.09 Severability...............................................................11
Section 6.10 Certain Definitions........................................................11
ARTICLE VII Miscellaneous
Section 7.01 Waivers of Notice..........................................................12
Section 7.02 Presumption of Assent......................................................12
Section 7.03 Voting of Securities by the Corporation....................................13
Section 7.04 Seal.......................................................................13
Section 7.05 Fiscal Year................................................................13
Section 7.06 Amendments.................................................................13
ii
BYLAWS
OF
UNITED/NEW UNITED MERGER SUB, INC.
ARTICLE I
Offices
Section 1.01 Business Offices. The corporation may have such offices,
either within or outside Delaware, as the board of directors may from time to
time determine or as the business of the corporation may require.
Section 1.02 Registered Office. The registered office of the
corporation required by the Delaware General Corporation Law to be maintained in
Delaware shall be as set forth in the certificate of incorporation, unless
changed as provided by law.
ARTICLE II
Stockholders
Section 2.01 Annual Meeting. An annual meeting of the stockholders
shall be held on such date as may be determined by the board of directors, for
the purpose of electing directors and for the transaction of such other business
as may come before the meeting. If the day fixed for the annual meeting shall be
a legal holiday, such meeting shall be held on the next succeeding business day.
If the election of directors shall not be held on the day designated herein for
any annual meeting of the stockholders, or at any adjournment thereof, the board
of directors shall cause the election to be held at a meeting of the
stockholders as soon thereafter as conveniently may be. Failure to hold an
annual meeting as required by these bylaws shall not invalidate any action taken
by the board of directors or officers of the corporation.
Section 2.02 Special Meetings. Special meetings of the stockholders,
for any purpose or purposes, unless otherwise prescribed by statute, may be
called only by the Chairman of the board of directors or by the board of
directors pursuant to a resolution approved by the affirmative vote of a
majority of directors then in office. Such request shall state the purpose or
purposes of the proposed meeting.
Section 2.03 Place of Meeting. Each meeting of the stockholders shall
be held at such place, either within or outside Delaware, as may be designated
in the notice of meeting, or, if no place is designated in the notice, at the
principal office of the corporation.
Section 2.04 Notice of Meetings. Except as otherwise required by law,
notice in writing or by electronic transmission of each meeting of the
stockholders stating the place, day and hour of the meeting, the means of remote
communications, if any, by which stockholders and proxy holders may
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be deemed to be present in person and vote at such meeting and, in the case of a
special meeting, the purpose or purposes for which the meeting is called, shall
be given, either personally (including delivery by private courier) or by first
class, certified or registered mail, or by electronic transmission, to each
stockholder of record entitled to notice of such meeting, not less than ten nor
more than 60 days before the date of the meeting. Such notice shall be deemed to
be given, if personally delivered, when delivered to the stockholder, and, if
mailed, when deposited in the United States mail, postage prepaid, directed to
the stockholder at his address as it appears on the records of the corporation,
and if by electronic transmission, when posted on an electronic network or
directed to the stockholder at an electronic mail address at which the
stockholder has consented to receive notice. If notice of two consecutive annual
meetings and all notices of meetings or the taking of action by written consent
without a meeting to any stockholder during the period between such two
consecutive annual meetings, or all, and at least two, payments (if sent by
first class mail) of dividends or interest on securities during a 12-month
period, have been mailed or directed addressed to such person at his address as
shown on the records of the corporation and have been returned undeliverable,
the giving of such notice to such person shall not be required until another
address for such person is delivered to the corporation. When a meeting is
adjourned to another time or place, notice need not be given of the adjourned
meeting if the time and place thereof are announced at the meeting at which the
adjournment is taken. At the adjourned meeting the corporation may transact any
business that might have been transacted at the original meeting. If the
adjournment is for more than 30 days, or if after the adjournment a new record
date is fixed for the adjourned meeting, notice of the adjourned meeting shall
be given to each stockholder of record entitled to vote at the meeting in
accordance with the foregoing provisions of this Section 2.04.
Section 2.05 Fixing Date for Determination of Stockholders of Record.
For the purpose of determining stockholders entitled to notice of or to vote at
any meeting of stockholders or any adjournment thereof, or entitled to receive
payment of any dividend or other distribution or allotment of any rights, or
entitled to exercise any rights in respect of any change, conversion or exchange
of stock or for any other lawful action, the board of directors may fix, in
advance, a date as the record date for any such determination of stockholders,
which date shall be not more than 60 nor less than ten days before the date of
such meeting, and not more than 60 days prior to any other action. If no record
date is fixed then the record date shall be, for determining stockholders
entitled to notice of or to vote at a meeting of stockholders, the close of
business on the day next preceding the day on which notice is given, or, if
notice is waived, the close of business on the day next preceding the day on
which the meeting is held, or, for determining stockholders for any other
purpose, the close of business on the day on which the board of directors adopts
the resolution relating thereto. A determination of stockholders of record
entitled to notice of or to vote at a meeting of stockholders shall apply to any
adjournment of the meeting; provided, however, that the board of directors may
fix a new record date for the adjourned meeting. Notwithstanding the foregoing
provisions of this Section 2.05, the record date for determining stockholders
entitled to take, or receive notice of, corporate action in writing without a
meeting as provided in Section 2.11 shall be determined as provided in such
Section.
Section 2.06 Voting List. The officer who has charge of the stock
ledger of the corporation shall prepare and make, at least ten days before every
meeting of stockholders, a complete list of the stockholders entitled to vote at
the meeting, arranged in alphabetical order, and showing the address of each
stockholder and the number of shares registered in the name of each stockholder.
Nothing contained in this Section 2.06 shall require the corporation to include
electronic mail addresses or other electronic contact information on such list.
Such list shall be open to the examination of any stockholder, for any purpose
germane to the meeting, for a period of at
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least ten days prior to the meeting, either (a) on a reasonably accessible
electronic network, provided that the information required to gain access to
such list is provided with the notice of the meeting, or (b) during ordinary
business hours, at a place within the city where the meeting is to be held,
which place shall be specified in the notice of the meeting, or, if not so
specified, at the place where the meeting is to be held. In the event that the
corporation determines to make the list available on an electronic network, the
corporation may take reasonable steps to ensure that such information is
available only to stockholders of the corporation. If the meeting is to be held
at a place, the list shall also be produced and kept at the time and place of
the meeting during the whole time thereof, and may be inspected by any
stockholder who is present. If the meeting is to be held solely by means of
remote communication, then the list shall also be open to the examination of any
stockholder during the whole time of the meeting on a reasonably accessible
electronic network, and the information required to access such list shall be
provided with the notice of the meeting.
Section 2.07 Proxies. Each stockholder entitled to vote at a meeting of
stockholders or to express consent or dissent to corporate action in writing
without a meeting may authorize another person or persons to act for him by
proxy, but no such proxy shall be voted or acted upon after three years from its
date, unless the proxy provides for a longer period.
Section 2.08 Quorum and Manner of Acting. At all meetings of
stockholders, a majority of the combined voting power of the outstanding shares
of the corporation entitled to vote, represented in person or by proxy, shall
constitute a quorum. If a quorum is present, the affirmative vote of a majority
of the shares represented at a meeting at which a quorum is present and entitled
to vote on the subject matter shall be the act of the stockholders, unless the
vote of a greater proportion or number or voting by classes is otherwise
required by law, the certificate of incorporation or these bylaws. In the
absence of a quorum, a majority of the shares so represented may adjourn the
meeting from time to time in accordance with Section 2.04, until a quorum shall
be present or represented.
Section 2.09 Action Without a Meeting.
(a) Written Consent. Unless otherwise provided in the
certificate of incorporation, any action required or permitted to be taken at
any meeting of the stockholders may be taken without a meeting, without prior
notice and without a vote, if a consent in writing, setting forth the action so
taken, shall be signed by the holders of outstanding stock having not less than
the minimum number of votes that would be necessary to authorize or take such
action at a meeting at which all shares entitled to vote thereon were present
and voted (which consent may be signed in counterparts). Every written consent
shall bear the date of signature of each stockholder who signs the consent and
no written consent shall be effective to take the corporate action referred to
therein unless, within 60 days of the earliest dated consent delivered to the
corporation in the manner required by the Delaware General Corporation Law,
written consents signed by a sufficient number of stockholders to take the
action are delivered to the corporation in the manner required by the Delaware
General Corporation Law.
(b) Determination of Stockholders Entitled to Act By Consent.
For purposes of determining stockholders entitled to consent to corporate action
in writing without a meeting, the board of directors may fix, in advance, a date
as the record date for any such determination of stockholders, which date shall
be not more than ten days after the date upon which the resolution fixing the
record date is adopted by the board of directors. If no record date has been
fixed by the board of directors, the record date for determining stockholders
entitled to consent to corporate action in writing without a meeting, when no
prior action by the board of directors is required by the
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Delaware General Corporation Law, shall be the first date on which a signed
written consent setting forth the action taken or proposed to be taken is
delivered to the corporation in the manner required by the Delaware General
Corporation Law. If no record date has been fixed by the board of directors and
prior action by the board of directors is required by the Delaware General
Corporation Law, the record date for determining stockholders entitled to
consent to corporate action in writing without a meeting shall be the close of
business on the day on which the board of directors adopts the resolution taking
such prior action.
(c) Notice to Non-Consenting Stockholders. Prompt written
notice of the taking of corporate action without a meeting by less than
unanimous written consent shall be given to those stockholders who have not
consented in writing. Such notice shall be given in accordance with the
applicable provisions of Section 2.04.
ARTICLE III
Board of Directors
Section 3.01 General Powers. The business and affairs of the
corporation shall be managed by or under the direction of its board of
directors, except as otherwise provided in the Delaware General Corporation Law
or the certificate of incorporation.
Section 3.02 Number, Tenure and Qualifications. The number of directors
of the corporation and the manner of electing such directors shall be as set
forth in the certificate of incorporation. Directors shall be elected at each
annual meeting of stockholders. Each director shall hold office until his
successor shall have been elected and qualified or until his earlier death,
resignation or removal. Directors need not be residents of Delaware or
stockholders of the corporation.
Section 3.03 Resignation. Any director may resign at any time by giving
notice to the corporation in writing or by electronic transmission. A director's
resignation shall take effect upon receipt or, if a different time of
effectiveness is specified therein, at the time specified therein. Unless
otherwise specified therein, the acceptance of such resignation shall not be
necessary to make it effective.
Section 3.04 Regular Meetings. A regular meeting of the board of
directors shall be held immediately after and at the same place as the annual
meeting of stockholders, or as soon thereafter as conveniently may be, at the
time and place, either within or without Delaware, determined by the board, for
the purpose of electing officers and for the transaction of such other business
as may come before the meeting. Failure to hold such a meeting, however, shall
not invalidate any action taken by any officer then or thereafter in office. The
board of directors may provide by resolution the time and place, either within
or outside Delaware, for the holding of additional regular meetings without
other notice than such resolution.
Section 3.05 Special Meetings. Special meetings of the board of
directors may be called only by the Chief Executive Officer or any member of the
board of directors. The notice of the special meeting of the board of directors
may fix any convenient place, either within or outside Delaware, as the place
for holding any special meeting of the board of directors.
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Section 3.06 Meetings by Telephone. Unless otherwise restricted by the
certificate of incorporation, members of the board of directors may participate
in a meeting of such board by means of conference telephone or other
communications equipment by means of which all persons participating in the
meeting can hear each other, and such participation in a meeting in such manner
shall constitute presence in person at the meeting.
Section 3.07 Notice of Meetings. Notice of each meeting of the board of
directors (except those regular meetings for which notice is not required)
stating the place, day and hour of the meeting shall be given to each director
at least five days prior thereto by the mailing of written notice by first
class, certified or registered mail, or at least two days prior thereto by
personal delivery (including delivery by private courier) of written notice or
by telephone, telegram, telex, cablegram or other similar method, except that in
the case of a meeting to be held pursuant to Section 3.06 notice may be given by
telephone one day prior thereto. The method of notice need not be the same to
each director. Notice shall be deemed to be given when deposited in the United
States mail, with postage thereon prepaid, addressed to the director at his
business or residence address, when delivered or communicated to the director or
when the telegram, telex, cablegram or other form of notice is personally
delivered to the director or delivered to the last address of the director
furnished by him to the corporation for such purpose. The business to be
transacted at, or the purpose of, any meeting of the board of directors shall be
specified in the notice or waiver of notice of such meeting.
Section 3.08 Quorum and Manner of Acting. Except as otherwise may be
required by law, the certificate of incorporation (including, without
limitation, paragraph (d) of Article Fifth thereof) or these bylaws, a majority
of the number of directors fixed in accordance with these bylaws, present in
person, shall constitute a quorum for the transaction of business at any meeting
of the board of directors, and the vote of a majority of the directors present
at a meeting at which a quorum is present shall be the act of the board of
directors. If less than a quorum is present at a meeting, the directors present
may adjourn the meeting from time to time without further notice other than
announcement at the meeting, until a quorum shall be present. No director may
vote or act by proxy or power of attorney at any meeting of the board of
directors.
Section 3.09 Action Without a Meeting. Any action required or permitted
to be taken at any meeting of the board of directors or of any committee thereof
may be taken without a meeting, without prior notice and without a vote, if all
members of the board or committee, as the case may be, consent thereto in
writing or by electronic transmission and the writing or writings or electronic
transmission or transmissions are filed with the minutes of the proceedings of
the board or committee, as the case may be.
Section 3.10 Executive and Other Committees. The board of directors may
designate one or more committees, each committee to consist of one or more of
the directors of the corporation. The board may designate one or more directors
as alternate members of any committee, who may replace any absent or
disqualified member at any meeting of the committee. In the absence or
disqualification of a member of a committee, the member or members present at
any meeting and not disqualified from voting, whether or not such member or
members constitute a quorum, may unanimously appoint another member of the board
of directors to act at the meeting in the place of any such absent or
disqualified member. Any such committee, to the extent provided in the
resolution of the board of directors, shall have and may exercise all the powers
and authority of the board of directors in the management of the business and
affairs of the corporation, and may authorize the seal of the corporation to be
affixed to all papers which may require it; but no such committee shall have the
power or authority in reference to the following matters: (a) approving or
5
adopting, or recommending to the stockholders, any action or matter expressly
required by the Delaware General Corporation Law to be submitted to stockholders
for approval or (b) adopting, amending or repealing any bylaw of the
corporation. The delegation of authority to any committee shall not operate to
relieve the board of directors or any member of the board from any
responsibility imposed by law. Subject to the foregoing, the board of directors
may provide such powers, limitations and procedures for such committees as the
board deems advisable. To the extent the board of directors does not establish
other procedures, each committee shall be governed by the procedures set forth
in Sections 3.04 (except as they relate to an annual meeting), 3.05 through 3.09
and 7.01 and 7.02 as if the committee were the board of directors. Each
committee shall keep regular minutes of its meetings, which shall be reported to
the board of directors when required and submitted to the secretary of the
corporation for inclusion in the corporate records.
Section 3.11 Compensation. Unless otherwise restricted by the
certificate of incorporation, the board of directors shall have the authority to
fix the compensation of directors. The directors may be paid their expenses, if
any, of attendance at each meeting of the board of directors and each meeting of
any committee of the board of which he is a member and may be paid a fixed sum
for attendance at each such meeting or a stated salary or both a fixed sum and a
stated salary. No such payment shall preclude any director from serving the
corporation in any other capacity and receiving compensation therefor.
ARTICLE IV
Officers
Section 4.01 Number and Qualifications. The officers of the corporation
shall consist of a chairman of the board, chief executive officer, a president,
a chief operating officer, a chief financial officer, a secretary and such other
officers, including a vice-chairman or vice-chairmen of the board, one or more
vice-presidents, a treasurer and a controller, as may from time to time be
elected or appointed by the board. In addition, the board of directors or the
chief executive officer may elect or appoint such assistant and other
subordinate officers, including assistant vice-presidents, assistant secretaries
and assistant treasurers, as it or he shall deem necessary or appropriate. Any
number of offices may be held by the same person, except that no person may
simultaneously hold the offices of president and secretary.
Section 4.02 Election and Term of Office. Except as provided in
Sections 4.01 and 4.06, the officers of the corporation shall be elected by the
board of directors annually at the first meeting of the board held after each
annual meeting of the stockholders as provided in Section 3.04. If the election
of officers shall not be held as provided herein, such election shall be held as
soon thereafter as may be convenient. Each officer shall hold office until his
successor shall have been duly elected and shall have qualified or until the
expiration of his term in office if elected or appointed for a specified period
of time or until his earlier death, resignation or removal.
Section 4.03 Compensation. Officers shall receive such compensation for
their services as may be authorized or ratified by the board of directors and no
officer shall be prevented from receiving compensation by reason of the fact
that he is also a director of the corporation. Election or appointment as an
officer shall not of itself create a contract or other right to compensation for
services performed by such officer.
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Section 4.04 Resignation. Any officer may resign at any time, subject
to any rights or obligations under any existing contracts between the officer
and the corporation, by giving notice to the corporation in writing or by
electronic transmission. An officer's resignation shall take effect upon receipt
or, if a different time of effectiveness is specified therein, at the time
stated therein. Unless otherwise specified therein, the acceptance of such
resignation shall not be necessary to make it effective.
Section 4.05 Removal. Any officer may be removed at any time by the
board of directors, or, in the case of assistant and other subordinate officers,
by the chief executive officer, whenever in its or his judgment, as the case may
be, the best interests of the corporation will be served thereby, but such
removal shall be without prejudice to the contract rights, if any, of the person
so removed. Election or appointment of an officer shall not in itself create
contract rights.
Section 4.06 Vacancies. A vacancy occurring in any office by death,
resignation, removal or otherwise may be filled by the chief executive officer.
Section 4.07 Authority and Duties. The officers of the corporation
shall have the authority and shall exercise the powers and perform the duties
specified below and as may be additionally specified by the chief executive
officer, the board of directors or these bylaws (and in all cases where the
duties of any officer are not prescribed by the bylaws or the board of
directors, such officer shall follow the orders and instructions of the chief
executive officer), except that in any event each officer shall exercise such
powers and perform such duties as may be required by law:
(a) Chairman of the Board. The chairman of the board, who
shall be elected from among the directors, shall preside at all meetings of the
corporation's stockholders and board of directors and perform such other duties
as may be assigned to him from time to time by the board of directors.
(b) Chief Executive Officer. The chief executive officer
shall, subject to the direction and supervision of the board of directors, (i)
have general and active control of the affairs of the corporation and general
supervision of its officers, agents and employees; (ii) in the absence of the
chairman of the board, preside at all meetings of the stockholders and the board
of directors; (iii) see that all orders and resolutions of the board of
directors are carried into effect; and (iv) perform all other duties incident to
the office of chief executive officer and as from time to time may be assigned
to him by the board if directors.
(c) President. The president shall, subject to the direction
and supervision of the board of directors, perform all duties incident to the
office of president and as from time to time may be assigned to him by the board
of directors. At the request of the chief executive officer or in his absence or
in the event of his inability or refusal to act, the president shall perform the
duties of the chief executive officer, and when so acting shall have all the
powers and be subject to all the restrictions of the chief executive officer.
(d) Chief Operating Officer. The chief operating officer
shall, subject to the direction and supervision of the board of directors,
supervise the day to day operations of the corporation and perform all other
duties incident to the office of chief operating officer as from time to time
may be assigned to him by the chairman of the board, the board of directors or
the chief executive officer. At the request of the president, or in his absence
or inability or refusal to act, the
7
chief operating officer shall perform the duties of the president, and when so
acting shall have all the power of and be subject to all the restrictions upon
the president.
(e) Chief Financial Officer. The chief financial officer
shall: (i) be the principal financial officer and treasurer of the corporation
and have the care and custody of all funds, securities, evidences of
indebtedness and other personal property of the corporation and deposit the same
in accordance with the instructions of the board of directors; (ii) receive and
give receipts and acquittances for moneys paid in on account of the corporation,
and pay out of the funds on hand all bills, payrolls and other just debts of the
corporation of whatever nature upon maturity; (iii) unless there is a
controller, be the principal accounting officer of the corporation and as such
prescribe and maintain the methods and systems of accounting to be followed,
keep complete books and records of account, prepare and file all local, state
and federal tax returns, prescribe and maintain an adequate system of internal
audit and prepare and furnish to the chief executive officer and the board of
directors statements of account showing the financial position of the
corporation and the results of its operations; (iv) upon request of the board,
make such reports to it as may be required at any time; and (v) perform all
other duties incident to the office of chief financial officer and treasurer and
such other duties as from time to time may be assigned to him by the board of
directors or by the chief executive officer. Assistant treasurers, if any, shall
have the same powers and duties, subject to the supervision by the chief
financial officer. If there is no chief financial officer, these duties shall be
performed by the secretary or chief executive officer or other person appointed
by the board of directors.
(f) Vice-Presidents. The vice-president, if any (or if there
is more than one then each vice-president), shall assist the chief executive
officer and shall perform such duties as may be assigned to him by the chief
executive officer or the board of directors. Assistant vice presidents, if any,
shall have such powers and perform such duties as may be assigned to them by the
chief executive officer or by the board of directors.
(g) Secretary. The secretary shall: (i) keep the minutes of
the proceedings of the stockholders, the board of directors and any committees
of the board; (ii) see that all notices are duly given in accordance with the
provisions of these bylaws or as required by law; (iii) be custodian of the
corporate records and of the seal of the corporation; (iv) keep at the
corporation's registered office or principal place of business within or outside
Delaware a record containing the names and addresses of all stockholders and the
number and class of shares held by each, unless such a record shall be kept at
the office of the corporation's transfer agent or registrar; (v) have general
charge of the stock books of the corporation, unless the corporation has a
transfer agent; and (vi) in general, perform all duties incident to the office
of secretary and such other duties as from time to time may be assigned to him
by the chief executive officer or the board of directors. Assistant secretaries,
if any, shall have the same duties and powers, subject to supervision by the
secretary.
Section 4.08 Surety Bonds. The board of directors may require any
officer or agent of the corporation to execute to the corporation a bond in such
sums and with such sureties as shall be satisfactory to the board, conditioned
upon the faithful performance of his duties and for the restoration to the
corporation of all books, papers, vouchers, money and other property of whatever
kind in his possession or under his control belonging to the corporation.
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ARTICLE V
Stock
Section 5.01 Issuance of Shares. The issuance or sale by the
corporation of any shares of its authorized capital stock of any class,
including treasury shares, shall be made only upon authorization by the board of
directors, except as otherwise may be provided by law. Every issuance of shares
shall be recorded on the books of the corporation maintained for such purpose by
or on behalf of the corporation.
Section 5.02 Transfer of Shares. Upon presentation and surrender to the
corporation or to a transfer agent of the corporation of a certificate of stock
duly endorsed or accompanied by proper evidence of succession, assignment or
authority to transfer, payment of all transfer taxes, if any, and the
satisfaction of any other requirements of law, including inquiry into and
discharge of any adverse claims of which the corporation has notice, the
corporation or the transfer agent shall issue a new certificate to the person
entitled thereto, cancel the old certificate and record the transaction on the
books maintained for such purpose by or on behalf of the corporation. No
transfer of shares shall be effective until it has been entered on such books.
The corporation or a transfer agent of the corporation may require a signature
guaranty or other reasonable evidence that any signature is genuine and
effective before making any transfer. Transfers of uncertificated shares shall
be made in accordance with applicable provisions of law.
Section 5.03 Registered Holders. The corporation shall be entitled to
recognize the exclusive right of a person registered on its books as the owner
of shares to receive dividends, and to vote as such owner, and to hold liable
for calls and assessments a person registered on its books as the owner of
shares, and shall not be bound to recognize any equitable or other claim to or
interest in such share or shares on the part of any other person, whether or not
it shall have express or other notice thereof, except as otherwise provided by
the laws of Delaware.
Section 5.04 Transfer Agents, Registrars and Paying Agents. The board
of directors may at its discretion appoint one or more transfer agents,
registrars and agents for making payment upon any class of stock, bond,
debenture or other security of the corporation. Such agents and registrars may
be located either within or outside Delaware. They shall have such rights and
duties and shall be entitled to such compensation as may be agreed.
ARTICLE VI
Indemnification
6.01 Directors and Officers. The corporation shall indemnify its
directors and officers to the fullest extent not prohibited by the Delaware
General Corporation Law or any other applicable law; provided, however, that the
corporation may modify the extent of such indemnification by individual
contracts with its directors and officers; and, provided, further, that the
corporation shall not be required to indemnify any director or officer in
connection with any proceeding (or part thereof) initiated by such person unless
(i) such indemnification is expressly required to be made by law, (ii) the
proceeding was authorized by the Board of Directors of the corporation, (iii)
such indemnification is provided by the corporation, in its sole discretion,
pursuant to the powers vested in
9
the corporation under the Delaware General Corporation Law or any other
applicable law or (iv) such indemnification is required to be made under Section
6.04.
6.02 Employees and Other Agents. The corporation shall have power to
indemnify its employees and other agents as set forth in the Delaware General
Corporation Law or any other applicable law. The Board of Directors shall have
the power to delegate the determination of whether indemnification shall be
given to any such person to such officers or other persons as the Board of
Directors shall determine.
6.03 Expenses.
(a) The corporation shall advance to any person who was or is
a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative, by reason of the fact that he is or was a director or officer of
the corporation, or is or was serving at the request of the corporation as a
director or officer of another corporation, partnership, joint venture, trust or
other enterprise, prior to the final disposition of the proceeding, promptly
following request therefor, all expenses incurred by any director or officer in
connection with such proceeding upon receipt of an undertaking by or on behalf
of such person to repay said amounts if it should be determined ultimately that
such person is not entitled to be indemnified under this Article VI or
otherwise.
(b) Notwithstanding the foregoing, unless otherwise determined
pursuant to Section 6.05, no advance shall be made by the corporation to an
officer of the corporation (except by reason of the fact that such officer is or
was a director of the corporation, in which event this paragraph shall not
apply) in any action, suit or proceeding, whether civil, criminal,
administrative or investigative, if a determination is reasonably and promptly
made (i) by the Board of Directors by a majority vote of a quorum consisting of
directors who were not parties to the proceeding, or (ii) if such quorum is not
obtainable, or, even if obtainable, a quorum of disinterested directors so
directs, by independent legal counsel in a written opinion, that the facts known
to the decision-making party at the time such determination is made demonstrate
clearly and convincingly that such person acted in bad faith or in a manner that
such person did not believe to be in or not opposed to the best interests of the
corporation.
6.04 Enforcement. Without the necessity of entering into an express
contract, all rights to indemnification and advances to directors and officers
under this Article VI shall be deemed to be contractual rights and be effective
to the same extent and as if provided for in a contract between the corporation
and the director or officer. Any right to indemnification or advances granted by
this Article VI to a director or officer shall be enforceable by or on behalf of
the person holding such right in any court of competent jurisdiction if (i) the
claim for indemnification or advances is denied, in whole or in part, or (ii) no
disposition of such claim is made within ninety (90) days of request therefor.
The claimant in such enforcement action, if successful in whole or in part,
shall be entitled to be paid also the expense of prosecuting his claim. In
connection with any claim for indemnification, the corporation shall be entitled
to raise as a defense to any such action that the claimant has not met the
standards of conduct that make it permissible under the Delaware General
Corporation Law or any other applicable law for the corporation to indemnify the
claimant for the amount claimed. In connection with any claim by an officer of
the corporation (except in any action, suit or proceeding, whether civil,
criminal, administrative or investigative, by reason of the fact that such
officer is or was a director of the corporation) for advances, the corporation
shall be entitled to raise a defense as to any such action clear and convincing
evidence that such person acted in bad
10
faith or in a manner that such person did not believe to be in or not opposed to
the best interests of the corporation, or with respect to any criminal action or
proceeding that such person acted without reasonable cause to believe that his
conduct was lawful. Neither the failure of the corporation (including its Board
of Directors, independent legal counsel or its stockholders) to have made a
determination prior to the commencement of such action that indemnification of
the claimant is proper in the circumstances because he has met the applicable
standard of conduct set forth in the Delaware General Corporation Law or any
other applicable law, nor an actual determination by the corporation (including
its Board of Directors, independent legal counsel or its stockholders) that the
claimant has not met such applicable standard of conduct, shall be a defense to
the action or create a presumption that claimant has not met the applicable
standard of conduct. In any suit brought by a director or officer to enforce a
right to indemnification or to an advancement of expenses hereunder, the burden
of proving that the director or officer is not entitled to be indemnified, or to
such advancement of expenses, under this Article VI or otherwise shall be on the
corporation.
6.05 Non-Exclusivity of Rights. The rights conferred on any person by
this Article VI shall not be exclusive of any other right which such person may
have or hereafter acquire under any applicable statute, provision of the
certificate of incorporation, bylaws, agreement, vote of stockholders or
disinterested directors or otherwise, both as to action in his official capacity
and as to action in another capacity while holding office. The corporation is
specifically authorized to enter into individual contracts with any or all of
its directors, officers, employees or agents respecting indemnification and
advances, to the fullest extent not prohibited by the Delaware General
Corporation Law or any other applicable law.
6.06 Survival of Rights. The rights conferred on any person by this
Article VI shall continue as to a person who has ceased to be a director,
officer, employee or other agent and shall inure to the benefit of the heirs,
executors and administrators of such a person.
6.07 Insurance. To the fullest extent permitted by the Delaware General
Corporation Law, or any other applicable law, the corporation, upon approval by
the Board of Directors, may purchase insurance on behalf of any person required
or permitted to be indemnified pursuant to this Article VI.
6.08 Amendments. Any repeal or modification of this Article VI shall
only be prospective and shall not affect the rights under this Article VI in
effect at the time of the alleged occurrence of any action or omission to act
that is the cause of any proceeding against any agent of the corporation.
6.09 Severability. If this Article VI or any portion hereof shall be
invalidated on any ground by any court of competent jurisdiction, then the
corporation shall nevertheless indemnify each director and officer to the full
extent not prohibited by any applicable portion of this Article VI that shall
not have been invalidated, or by any other applicable law. If this Article VI
shall be invalid due to the application of the indemnification provisions of
another jurisdiction, then the corporation shall indemnify each director and
officer to the full extent under applicable law.
6.10 Certain Definitions. For the purposes of this Article VI, the
following definitions shall apply:
(a) The term "proceeding" shall be broadly construed and shall
include, without limitation, the investigation, preparation, prosecution,
defense, settlement, arbitration and appeal of, and the giving of testimony in,
any threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative.
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(b) The term "expenses" shall be broadly construed and shall
include, without limitation, court costs, attorneys' fees, witness fees, fines,
amounts paid in settlement or judgment and any other costs and expenses of any
nature or kind incurred in connection with any proceeding.
(c) The term "corporation" shall include, in addition to the
resulting corporation, any constituent corporation (including any constituent of
a constituent) absorbed in a consolidation or merger which, if its separate
existence had continued, would have had power and authority to indemnify its
directors, officers, and employees or agents, so that any person who is or was a
director, officer, employee or agent of such constituent corporation, or is or
was serving at the request of such constituent corporation as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, shall stand in the same position under the provisions
of this Article VI with respect to the resulting or surviving corporation as he
would have with respect to such constituent corporation if its separate
existence had continued.
(d) References to a "director," "executive officer,"
"officer," "employee," or "agent" of the corporation shall include, without
limitation, situations where such person is serving at the request of the
corporation as, respectively, a director, executive officer, officer, employee,
trustee or agent of another corporation, partnership, joint venture, trust or
other enterprise.
(e) References to "other enterprises" shall include employee
benefit plans; references to "fines" shall include any excise taxes assessed on
a person with respect to an employee benefit plan; and references to "serving at
the request of the corporation" shall include any service as a director,
officer, employee or agent of the corporation which imposes duties on, or
involves services by, such director, officer, employee, or agent with respect to
an employee benefit plan, its participants, or beneficiaries; and a person who
acted in good faith and in a manner he reasonably believed to be in the interest
of the participants and beneficiaries of an employee benefit plan shall be
deemed to have acted in a manner "not opposed to the best interests of the
corporation" as referred to in this Article VI.
ARTICLE VII
Miscellaneous
Section 7.01 Waivers of Notice. Whenever notice is required to be given
by law, by the certificate of incorporation or by these bylaws, a written waiver
thereof, signed by the person entitled to said notice or a waiver by electronic
transmission by the person entitled to notice, whether before or after the time
stated therein, shall be deemed equivalent to notice. Attendance of a person at
a meeting or (in the case of a stockholder) by proxy shall constitute a waiver
of notice of such meeting, except when the person attends a meeting for the
express purpose of objecting, at the beginning of the meeting, to the
transaction of any business because the meeting was not lawfully called or
convened. Neither the business to be transacted at, nor the purpose of, any
meeting need be specified in any written waiver of notice or waiver of notice by
electronic transmission unless required by these bylaws to be included in the
notice of such meeting.
Section 7.02 Presumption of Assent. A director or stockholder of the
corporation who is present at a meeting of the board of directors or
stockholders at which action on any corporate matter is taken shall be presumed
to have assented to the action taken unless his dissent shall be entered in
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the minutes of the meeting or unless he shall file his written dissent to such
action with the person acting as the secretary of the meeting before the
adjournment thereof or shall forward such dissent by registered mail to the
secretary of the corporation immediately after the adjournment of the meeting.
Such right to dissent shall not apply to a director or stockholder who voted in
favor of such action.
Section 7.03 Voting of Securities by the Corporation. Unless otherwise
provided by resolution of the board of directors, on behalf of the corporation
the chairman of the board, chief executive officer, chief operating officer,
chief financial officer, president, secretary, treasurer or any vice-president
shall attend in person or by substitute appointed by him, or shall execute
written instruments appointing a proxy or proxies to represent the corporation
at, all meetings of the stockholders of any other corporation, association or
other entity in which the corporation holds any stock or other securities, and
may execute written waivers of notice with respect to any such meetings. At all
such meetings and otherwise, the chairman of the board, chief executive officer,
chief operating officer, chief financial officer, president, secretary,
treasurer or any vice-president, in person or by substitute or proxy as
aforesaid, may vote the stock or other securities so held by the corporation and
may execute written consents and any other instruments with respect to such
stock or securities and may exercise any and all rights and powers incident to
the ownership of said stock or securities, subject, however, to the
instructions, if any, of the board of directors.
Section 7.04 Seal. The corporate seal of the corporation shall be in
such form as adopted by the board of directors, and any officer of the
corporation may, when and as required, affix or impress the seal, or a facsimile
thereof, to or on any instrument or document of the corporation.
Section 7.05 Fiscal Year. The fiscal year of the corporation shall be
as established by the board of directors.
Section 7.06 Amendments. These bylaws may be amended or repealed only
in the manner set forth in the certificate of incorporation.
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EXHIBIT 7.7
STOCKHOLDERS AGREEMENT
This Stockholders Agreement (this "Agreement") is entered into as of
________, 2002 among UnitedGlobalCom, Inc., a Delaware corporation formerly
known as New UnitedGlobalCom, Inc. ("United"), and Liberty Media Corporation and
Liberty Global, Inc. ("Liberty Global"), each of which is a Delaware
corporation, and each of the Persons identified on the signature page hereof as
a Founder (the "Founders").
Background
Pursuant to the
Agreement and Plan of Restructuring and Merger, dated
as of December 3, 2001 (the "Merger Agreement"), among United, Liberty, Liberty
Media International, Inc., a Delaware corporation ("LMI"), Liberty Global, the
Founders, UGC, Inc. a Delaware corporation formerly known as UnitedGlobalCom,
Inc. ("Old United") et al., the Founders have acquired Beneficial Ownership of
shares of Class B Stock of United, and the Liberty Parties have acquired
Beneficial Ownership of shares of Class C Stock of United. As required by the
Merger Agreement the parties hereto are entering into this Agreement, which will
govern certain aspects of their ownership of Common Stock.
Agreement
In consideration of the foregoing premises and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
Section 1. Certain Definitions. In this Agreement, the following terms
shall have the following meanings:
Affiliate. When used with reference to a specified Person, any Person
who directly or indirectly through one or more intermediaries, Controls, is
Controlled by, or is under common Control with, the Person specified, provided
that (i) no officer or director of a Person, or any Affiliate of such officer or
director, investing for his, her or its own account or otherwise acting in his,
her or its individual capacity, and no director of a Person, or any Affiliate of
such director, acting in his, her or its capacity as an officer, director,
trustee, representative or agent of a Person that is not an Affiliate of the
specified Person, and in each case not in concert with or at the direction or
request of, such specified Person shall be deemed to be an Affiliate of such
specified Person for purposes of this Agreement; (ii) no Liberty Party shall be
deemed to be an Affiliate of United and none of United and its Controlled
Affiliates shall be deemed to be an Affiliate of a Liberty Party and (iii) any
Person in which United, directly or indirectly, Beneficially Owns 50% or more of
the equity securities, without regard to voting power in the election of
directors, shall (without limiting the generality of this definition) be deemed
to be an Affiliate of United.
Agreement. As defined in the preamble.
Beneficial Ownership and derivative terms. As determined pursuant to
Rule 13d-3 and Rule 13d-5 under the Exchange Act and any successor regulation,
except that in determining Beneficial Ownership, without duplication, (i) equity
securities that may be acquired pursuant to Rights to acquire equity securities
that are exercisable more than sixty days after a date shall nevertheless be
deemed to be Beneficially Owned, and (ii) except for purposes of the definition
of "Change of Control," (x) Beneficial Ownership, if any, arising solely as a
result of being a party to a Transaction Agreement or the Merger Agreement shall
be disregarded, and (y) Beneficial Ownership, if any, arising solely from being
a member of a Group shall be disregarded.
Board. The Board of Directors of United.
Business Day. Any day other than Saturday, Sunday and a day on which
banks are required or permitted to close in Denver, Colorado or New York, New
York.
capital stock. Any and all shares, interests, participations, rights or
other equivalents (however designated) of corporate stock or partnership or
membership interests, whether common or preferred.
Change of Control. Any (a) change in the direct or indirect record or
Beneficial Ownership of any of the equity securities of United, Old United or
any of their respective Affiliates, (b) merger, consolidation, statutory share
exchange or other transaction involving United, Old United or any of their
respective Affiliates or (c) change in the composition of the board of directors
or other governing body of United, Old United or any of their respective
Affiliates.
Change of Control Covenant. Any covenant, agreement or other provision
(excluding requirements imposed by Law) pursuant to which the occurrence or
existence of a Change of Control would result in a violation or breach of,
constitute (with or without due notice or lapse of time or both) or permit any
Person to declare a default or event of default under, give rise to any right of
termination, cancellation, amendment, acceleration, repurchase, prepayment or
repayment or to increased payments under, give rise to or accelerate any
material obligation (including any obligation to, or to offer to, repurchase,
prepay, repay or make increased payments) or result in the loss or modification
of any material right or benefit under, or result in any Lien or give any Person
the right to obtain any Lien on any material asset pursuant to, any Contract to
which United, Old United or any of their respective Affiliates is or becomes a
party or to which United, Old United, any of their respective Affiliates or any
of their respective material assets are or become subject or bound.
Class A Stock. The Class A common stock, $0.01 par value per share, of
United.
Class B Event. As defined in the United Charter as in effect on the
date hereof.
Class B Stock. The Class B common stock, $0.01 par value per share, of
United.
Class C Stock. The Class C common stock, $0.01 par value per share, of
United.
Closing. As defined in the Merger Agreement.
Common Stock. The Class A Stock, the Class B Stock and the Class C
Stock.
Contract. Any note, bond, indenture, debenture, security agreement,
trust agreement, Lien, mortgage, lease, agreement, contract, license, franchise,
permit, guaranty, joint venture
2
agreement, or other agreement, instrument, understanding, commitment or
obligation, oral or written.
Controlled Affiliate. When used with reference to a specified Person,
an Affiliate of such Person that such Person directly, or through one or more
intermediaries, Controls; provided that, (a) none of United and its Controlled
Affiliates shall be deemed to be a Controlled Affiliate of a Liberty Party and
(b) any Person in which United, directly or indirectly, Beneficially Owns 50% or
more of the equity securities, without regard to voting power in the election of
directors, shall (without limiting the generality of this definition) be deemed
to be a Controlled Affiliate of United.
Control and derivative terms. The possession, directly or indirectly,
of the power to direct or cause the direction of the management and policies of
another Person, whether through the ownership of voting securities, by contract
or otherwise.
Control Person. Each of (1) the Chairman of the Board of Liberty, (2)
the President and Chief Executive Officer of Liberty, (3) the Executive Vice
President and Chief Operating Officer of Liberty, (4) each of the directors of
Liberty, and (5) the respective family members, estates and heirs of each of the
persons referred to in clauses (1) through (4) above and any trust or other
investment vehicle for the primary benefit of any of such persons or their
respective family members or heirs. "Family members" for this purpose means the
parents, descendants, step children, step grandchildren, nieces and nephews, and
spouse of the specified person.
Controlling Principals. Founders who are Principals and who hold a
majority of the aggregate voting power of the Equity Securities held by the
Founders who are Principals.
Conversion Event. As defined in the United Charter as in effect on the
date hereof.
Current Bonds. As defined in the United Charter as in effect on the
date hereof.
Designated Purchaser. As defined in Section 4(b).
Drag-Along Notice. As defined in Section 8(a).
Drag-Along Rights. The rights granted to the Founders pursuant to
Sections 8(a) and 8(b) to require the Liberty Parties to Transfer Common Stock.
Equity Securities. The Common Stock and any other securities hereafter
issued by United that are entitled to vote generally in the election of
directors.
Exchange Act. The Securities Exchange Act of 1934, as amended, and the
rules and regulations thereunder.
Exchange Agreement. That certain Exchange Agreement dated as of the
date hereof among United and certain of the Founders.
Exercising Holders. As defined in Section 7(b).
3
First Offer Notice. A Liberty Offer Notice or Founder Offer Notice.
Founder Acceptance Notice. As defined in Section 4(a).
Founder Election Period. As defined in Section 5(a).
Founder Offer Notice. As defined in Section 5(a).
Founder Offer Price. As defined in Section 5(a).
Founder Offered Shares. As defined in Section 5(a).
Founder Party: Each Founder and each Permitted Transferee of a Founder
that hereafter becomes bound by or who is required to become bound by this
Agreement for so long as such person is or is required to be so bound.
Founders. (i) As defined in the preamble and (ii) any person who (x)
immediately prior to the Closing was a member of the senior management of Old
United or a member of the Board of Directors of Old United, (y) owned shares of
Old United Class B Stock immediately prior to the Closing and Class B Stock
thereafter and (z) is designated as an additional Founder in the sole discretion
of the Controlling Principals, provided that such person executes and delivers
to United and the Liberty Parties a counterpart of this Agreement and to United
a counterpart of the Voting Agreement, agreeing to be bound by the provisions
hereof and thereof applicable to the Founders. A Person identified by clause (i)
or (ii) of this definition as a Founder will cease to be a Founder at such time
as such Person no longer Beneficially Owns any Class B Stock.
Founders Agreements. Means (a) the Founders Agreement dated [________]
among the Founders relating to United and (b) the Founders Agreement dated
[_______] among certain Founders relating to Old United.
Governmental Approval. Any notice to, filing with, or approval or
consent of a Government Authority required by applicable law with respect to any
action, including without limitation, the expiration or termination of any
applicable waiting period under the HSR Act.
Governmental Authority. Any U.S. federal, state or local or any foreign
court, governmental department, commission, authority, board, bureau, agency or
other instrumentality.
Group. As defined in Section 13(d) of the Exchange Act and the rules
and regulations thereunder, but the existence of the Transaction Agreements and
the Merger Agreement shall be disregarded in determining whether a Group exists.
HSR Act. The Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as
amended.
Judgment. Any order, writ, injunction, award, judgment, ruling or
decree of any Governmental Authority.
Law. Any U.S. federal, state or local or any foreign statute, code,
ordinance, decree, rule, regulation or general principle of common or civil law
or equity.
4
Liberty. Liberty Media Corporation, a Delaware corporation, and any
successor (by merger, consolidation, transfer or otherwise) to all or
substantially all of its assets; provided that in the event a Transferee Parent
becomes the Beneficial Owner of all or substantially all of the Equity
Securities then Beneficially Owned by Liberty as to which Liberty has
dispositive control, the term "Liberty" shall mean such Transferee Parent and
any successor (by merger, consolidation, transfer or otherwise) to all or
substantially all of its assets.
Liberty Acceptance Notice. As defined in Section 5(a).
Liberty Global. As defined in the preamble.
Liberty Offer Notice. As defined in Section 4(a).
Liberty Offer Price. As defined in Section 4(a).
Liberty Offered Shares. As defined in Section 4(a).
Liberty Parties. Liberty and Liberty Global and including any Permitted
Transferee of a Liberty Party who hereafter becomes bound by or who is required
to become bound by this Agreement for so long as such Person is or is required
to be so bound. Liberty Global and any such Permitted Transferee will each cease
to be a Liberty Party at such time as such Person is no longer a Controlled
Affiliate of Liberty.
Liberty Party Equity Securities. As defined in the Standstill
Agreement.
Liberty Purchase Period. As defined in Section 5(c).
License. Any license, franchise, authorization, permit, certificate,
variance, exemption, concession, consent, lease, right of way, easement,
instrument, order or approval domestic or foreign, of any Governmental
Authority.
Lien. Any mortgage, pledge, lien, encumbrance, charge, or security
interest.
LMI. As defined under "Background" on the first page of this Agreement.
Merger Agreement. As defined under "Background" on the first page of
this Agreement.
New United Covenant Agreement. The Agreement Regarding Additional
Covenants as of the date hereof among United and the Liberty Parties.
No Waiver Agreement. That certain No Waiver Agreement dated as of the
date hereof among Liberty, LMI and United.
Old United. As defined under "Background" on the first page of this
Agreement.
Old United Agreement. That certain Agreement dated as of the date
hereof among Old United and the Liberty Parties.
5
Old United Class B Stock. The Class B Common Stock, par value $0.01 per
Share, of Old United.
Outside Closing Date. As defined in Section 4(b).
Permitted Transferees. In the case of a Founder (the "specified
Founder"), (a) any other Founder, (b) such specified Founder's parents,
descendants, step children, step grandchildren, nieces and nephews, and spouses
of any of the foregoing, (c) such specified Founder's heirs, devisees and
legatees, and (d) partnerships and entities that are primarily owned by, and
trusts that are primarily for the benefit of, any of the Persons designated in
clauses (a), (b) and (c) (but only for so long as such relationship exists). In
the case of a Permitted Transferee of a Founder, such Founder or another
Permitted Transferee of such Founder. In the case of the Liberty Parties,
Liberty and any Person Controlled by Liberty.
Person. Person shall mean any individual, firm, corporation,
partnership, limited liability company, trust, joint venture, or other entity,
and shall include any successor (by merger or otherwise) of such entity.
Principals. Xxxxxx X. Xxxxxxx, Xxxxxx Xxxxxxxx, Xxxxxx Xxxxxxxx,
Xxxxxxxx Investments, Ltd (so long as it is controlled by Xxxxxx or Xxxxxx
Xxxxxxxx), Xxxx X. Xxxxxxxxx, X. Xxxxxxxxx Holdings, Co. (so long as it is
controlled by Xxxx X. Xxxxxxxxx), and Xxxx X. Xxxxxxxxx.
Proportionate Number of Shares. The Proportionate Number of Shares of
the Liberty Parties shall be the number of shares of Common Stock Beneficially
Owned by the Liberty Parties as to which they have dispositive power multiplied
by a fraction, the numerator of which is the number of shares of Class B Stock
proposed to be transferred by the Founder Parties as set forth in a Drag-Along
Notice and the denominator of which is the number of shares of Class B Stock
Beneficially Owned in the aggregate by the Founders and their Permitted
Transferees.
Registration Rights Agreement. That certain Registration Rights
Agreement dated as of the date hereof among United and the Liberty Parties.
Restriction. With respect to any capital stock, equity interest or
security, any voting or other trust or agreement, option, warrant, preemptive
right, right of first offer, right of first refusal, escrow arrangement, proxy,
buy-sell agreement, power of attorney or other Contract, any License or Judgment
that, conditionally or unconditionally, (a) grants to any Person the right to
purchase or otherwise acquire, or obligates any Person to sell or otherwise
dispose of or issue, or otherwise results or, whether upon the occurrence of any
event or with notice or lapse of time or both or otherwise, may result in any
Person acquiring, (i) any of such capital stock or other equity interest or
security; (ii) any of the proceeds of, or any distributions paid or that are or
may become payable with respect to, any of such capital stock or other equity
interest or security; or (iii) any interest in such capital stock or other
equity interest or security or any such proceeds or distributions; (b) restricts
or, whether upon the occurrence of any event or with notice or lapse of time or
both or otherwise, is reasonably likely to restrict the transfer or voting of,
or the exercise of any rights or the enjoyment of any benefits arising by reason
of ownership of, any such capital stock or other equity interest or security or
any such proceeds or distributions; or (c) creates or, whether upon the
occurrence of any event or with notice or lapse of time or both or otherwise, is
6
reasonably likely to create a Lien or purported Lien affecting such capital
stock or other equity interest or security, proceeds or distributions.
Rights. When used with respect to a Specified Person, securities of
such Person (which may include equity securities) that (contingently or
otherwise) are exercisable, convertible or exchangeable for or into equity
securities of such Person (with or without consideration) or that carry any
right to subscribe for or acquire equity securities or securities exercisable,
convertible or exchangeable for or into equity securities of such Person.
Sixty-Day Election Period. As defined in Section 4(a).
specified Founder. As defined in the definition of " Permitted
Transferees".
Standstill Agreement. That certain Standstill Agreement dated as of the
date hereof among United and the Liberty Parties.
Subject Shares. Shares of Class B Stock and, prior to June 25, 2010,
shares of Class C Stock.
Tag-Along Group. As defined in Section 7(b).
Tag-Along Notice. As defined in Section 7(a).
Tag-Along Right. As defined in Section 7(b).
Transaction Agreements. This Agreement, the Voting Agreement, the
Standstill Agreement, the New United Covenant Agreement, the Registration Rights
Agreement, the No Waiver Agreement, the Exchange Agreement, the United Charter,
the United Bylaws, the UPC Release, the Founders Agreements and the Old United
Agreement.
Transfer. Any sale, exchange, pledge (except a pledge in compliance
with this Agreement and the Standstill Agreement) or other transfer, direct or
indirect, of Class B Stock or Class C Stock or, when the context requires, Class
A Stock (including through the relinquishment of control of a Person holding
shares of such stock), provided, however, that none of the following shall
constitute a Transfer: (i) a conversion of Class C Stock into Class B Stock or
of Class B Stock or Class C Stock into Class A Stock, (ii) any transfer pursuant
to any tender or exchange offer approved by a majority of the Board, (iii) a
transfer by operation of law in connection with any merger, consolidation,
statutory share exchange or similar transaction involving United, (iv) a
transfer pursuant to a plan of liquidation of United that has been approved by a
majority of the Board or (v) in the case of Liberty, any transaction or series
of transactions involving the direct or indirect transfer (or relinquishment of
control) of a Person that holds Liberty Party Equity Securities ("Transferred
Person"), if (x) immediately after giving effect to such transaction or the last
transaction in such series, voting securities representing at least a majority
of the voting power of the outstanding voting securities of such Transferred
Person or its successor in such transaction or any ultimate parent entity
(within the meaning of the HSR Act) of such Transferred Person or its successor
(a "Transferee Parent") are Beneficially Owned by Persons who prior to such
transaction were Beneficial Owners of a majority of, or a majority of the voting
power of, the outstanding voting securities of Liberty (or
7
of any publicly traded class or series of voting securities of Liberty designed
to track the economic performance of a specified group of assets or businesses)
or who are Control Persons or any combination of the foregoing and (y) such
Transferee Parent becomes a party to this Agreement and the Standstill Agreement
with the same rights and obligations as Liberty.
Transferee Parent. As defined in the definition of "Transfer."
Transferor. As defined in Section 7(a).
Transferred Person. As defined in the definition of "Transfer".
Two-Business Day Election Period. As defined in Section 4(a).
United. As defined in the preamble
United Bylaws. The Bylaws of United, as such Bylaws may be amended from
time to time in accordance with the United Charter, such Bylaws and the New
United Covenant Agreement.
United Charter. The Restated Certificate of Incorporation of United as
filed with the Secretary of State of the State of Delaware on __________, 2002,
as it may be amended from time to time.
United/New United Merger. As defined in the Merger Agreement.
UPC. United Pan-Europe Communications, N.V., a company organized under
the laws of The Netherlands.
UPC Convertible Shares. As defined in Section 10(c).
UPC Ordinary Shares. As defined in Section 10(c).
UPC Release. Section 3 and Exhibit A of that certain Release, dated as
of February 22, 2001, among UPC, Old United, Liberty and LMI (but no other
provisions of such Release).
Voting Agreement. That certain Voting Agreement dated as of the date
hereof among United and the Founders.
Section 2. Action by Founders or Liberty Parties.
Whenever this Agreement contemplates any action to be taken by the
Founder Parties, each of the Founder Parties shall act at the direction of
Controlling Principals and Controlling Principals shall be (and hereby are)
authorized in such circumstances to take any contemplated action on behalf of
all of the Founder Parties. The Liberty Parties and United will be entitled to
rely, as binding on all the Founders, on any instrument signed by Controlling
Principals and on any representation by a Principal that such Principal is a
Controlling Principal or by a group of Principals that such Principals are
Controlling Principals. Whenever this Agreement contemplates any action to be
taken by the Liberty Parties or their Affiliates, each such party
8
shall act at the direction of Liberty and Liberty shall be (and hereby is)
authorized to take any contemplated action on behalf of all of the Liberty
Parties. The Founder Parties and United will be entitled to rely, as binding on
all the Liberty Parties, on any instrument signed by Liberty.
Section 3. Limitation on Conversion of Class C Stock; Other Covenants.
(a) Prior to a Conversion Event, the Liberty Parties will not convert
shares of Class C Stock into Class A Stock if, after giving effect to such
conversion, the aggregate voting power of the shares of Class A Stock and Class
B Stock then owned by the Liberty Parties would (x) exceed 50% of the combined
voting power of the shares of Class A Stock and Class B Stock then outstanding,
or (y) constitute a greater percentage of the combined voting power of the
shares of Class A Stock and Class B Stock then outstanding than the percentage
represented by the aggregate voting power of the shares of Class A Stock and
Class B Stock then Beneficially Owned by the Founder Parties, provided that the
limitations set forth in clauses (x) and (y) on the Liberty Parties' right to
convert the Class C Stock (i) will terminate if the aggregate voting power of
the shares of Class A Stock and Class B Stock Beneficially Owned by any other
Person or Group (other than a Group that is controlled by one or more
Controlling Principals and consists solely of Founder Parties) exceeds either of
such percentages and (ii) will not apply to any conversion of Class C Stock into
Class A Stock in connection with a sale or hedging transaction or to any related
pledge involving Class A Stock.
(b) Without the prior written consent of Liberty, which consent may be
granted or withheld in Liberty's sole discretion, United will not take any
action and will not permit any action to be taken on its behalf, and will use
its best commercially reasonable efforts to prevent any action from being taken
by or on behalf of any of its Affiliates, that would result in United, Old
United or any of their respective Affiliates being subject to or bound by any
Change of Control Covenant, unless any Change of Control involving or caused by
the action of Liberty, Liberty Global or any of their respective Affiliates
(other than a transfer by any of the foregoing to an unaffiliated third party of
Control of United, if such Control is obtained in the future) is exempted from
the application and effects of such Change of Control Covenant. United will not
be deemed to be in breach of the foregoing as a result of its or its Affiliates
entering into or maintaining in the ordinary course of business a License
granted by a Governmental Authority that includes a Change of Control Covenant
provided that (i) such License is of the kind and nature that customarily
requires approval of the Governmental Authority granting the same for a Change
of Control, (ii) the applicable Change of Control Covenant includes only terms
customarily imposed by such Governmental Authority in similar circumstances,
(iii) the maximum penalty for breach of such Change of Control Covenant is
termination of the applicable License, and (iv) United used its best
commercially reasonable efforts to obtain the exemption from the application and
effects of such Change of Control Covenant contemplated by the preceding
sentence. Without the prior written consent of Liberty, which consent may be
granted or withheld in Liberty's sole discretion, United will not take any
action or permit any action to be taken that would, or fail to take any action
or permit any action to be omitted where such failure or omission would, extend
or perpetuate the applicability of any Change of Control Covenant in effect as
of May 25, 2001 under the Current Bonds beyond the maturity date in effect as of
May 25, 2001 of the Current Bonds to which they relate. United will use its best
commercially reasonable efforts to take such actions as will cause the
conditions necessary to permit the conversion in full of the Class C Stock into
Class B Stock to be satisfied.
9
(c) If, following the occurrence of a Class B Event, any vote or other
action of United's stockholders is required in connection with the acquisition
of shares of Class B Stock by a Liberty Party or any of its Affiliates pursuant
to their purchase rights under the Standstill Agreement, United and the Founders
and their Permitted Transferees will use their respective best commercially
reasonable efforts to cause such vote or other action to be taken, including
calling a special meeting of stockholders or soliciting a written consent of
stockholders, and voting all Equity Securities held by such Persons at such
meeting in person or by proxy or signing a written consent of stockholders in
lieu of a meeting.
Section 4. Founders' Right of First Offer.
(a) No Liberty Party shall Transfer any Subject Shares to any Person
other than a Permitted Transferee in compliance with Section 6, or convert any
Subject Shares to Class A Stock, unless, prior to such Transfer or conversion,
the Liberty Parties first offer to sell the Subject Shares proposed to be
Transferred or converted (the "Liberty Offered Shares") to the Founders by
delivering a written notice (a "Liberty Offer Notice") to the Founders. The
Liberty Offer Notice shall state the number and class of Liberty Offered Shares
and the price per share (the "Liberty Offer Price") at which such Liberty Party
is offering the Liberty Offered Shares to the Founders and shall constitute a
binding, irrevocable offer, subject to the provisions of this Section 4, to sell
the Liberty Offered Shares to the Founders and any Designated Purchaser (as
defined below) at the Liberty Offer Price. Prior to the occurrence of a
Conversion Event, the number of Liberty Offered Shares proposed to be
Transferred, when taken together with the aggregate number of shares of Class A
Stock, received upon conversion of Subject Shares, Beneficial Ownership of which
shares of Class A Stock was theretofore Transferred by a Liberty Party, other
than to a Permitted Transferee or a Founder Party or Designated Purchaser or to
United, shall not exceed the sum of the total number of shares of Class A Stock
of which the Liberty Parties acquired Beneficial Ownership after the date hereof
(from Persons other than United (including upon the conversion of Class C Stock)
or the Founder Parties) plus the total number of shares of Class A Stock
received in the United/New United Merger upon conversion of shares of Class A
Common Stock, par value $0.01 per share, of Old United acquired by the Liberty
Parties after the execution and delivery of the Merger Agreement. In order to
accept the offer of the Liberty Offered Shares, Controlling Principals must
deliver a written notice of acceptance (a "Founder Acceptance Notice") to the
Liberty Parties agreeing to purchase all, but not less than all, of the Liberty
Offered Shares at the Liberty Offer Price. In order to be effective, a Founder
Acceptance Notice must (i) be signed by Controlling Principals (either
personally or by a duly authorized agent), (ii) designate which Founders and
Designated Purchasers are to purchase the Liberty Offered Shares and the number
of shares to be purchased by each such Founder and Designated Purchaser and
(iii) be delivered to the Liberty Parties no later than 5:00 p.m. Denver,
Colorado time on the last day of (A) if such Liberty Offer Notice relates to a
number of Subject Shares, the conversion of which to Class A Stock would not
reduce the aggregate voting power for the election of directors of Equity
Securities subject to this Agreement below 80% of the total voting power for the
election of directors of all Equity Securities outstanding, in each case
calculated as if all Class C Stock had been converted to Class B Stock, the
two-Business Day period (a "Two-Business Day Election Period") following the
date the Liberty Offer Notice is given; or (B) in all other cases, the sixty-day
period (a "Sixty-Day Election Period") following the date the Liberty Offer
Notice is given. A duly completed and delivered Founder Acceptance Notice shall
constitute a binding irrevocable
10
agreement by the Controlling Principals signing such notice and the Founders and
Designated Purchasers named therein to purchase the Liberty Offered Shares at
the Liberty Offer Price as provided in this Section 4. If a Founder Acceptance
Notice meeting the requirements specified above is not delivered within the
specified election period, then the Founders will be deemed to have rejected the
offer of the Liberty Offered Shares.
(b) Upon delivery of a Founder Acceptance Notice meeting the
requirements specified above within the specified election period, the Liberty
Parties will be obligated to sell, and the Controlling Principals and the
Founders and Designated Purchasers named in such Founder Acceptance Notice will
be jointly and severally obligated to buy, all of the Liberty Offered Shares at
the Liberty Offer Price. The closing of such purchase and sale shall occur at
such time and place as the parties thereto may agree, but in any event no later
than (i) the fifth Business Day after the Liberty Offer Notice is given, in the
case of a Liberty Offer Notice with a Two-Business Day Election Period, or (ii)
the 180th day after the Liberty Offer Notice is given, in the case of a Liberty
Offer Notice with a Sixty-Day Election Period (each, an "Outside Closing Date").
The purchase and sale will be without representation or warranty, except that
each party to the transaction will represent and warrant that it has all
requisite power and authority to enter into the transactions, and the Liberty
Parties transferring the shares will represent and warrant that they are
transferring valid title to such shares and such shares are being transferred
free and clear of any Lien or Restriction other than those created by this
Agreement, any other Transaction Agreement or the parties taking delivery of
such shares. Payment of the purchase price shall be in immediately available
United States Dollars. A "Designated Purchaser" means any Person other than a
Founder designated in a Founder Acceptance Notice as a purchaser of Liberty
Offered Shares. As a condition to acquiring any Liberty Offered Shares pursuant
to this Section 4, a Designated Purchaser must execute and deliver an
instrument, in form and substance reasonably acceptable to United and the
Liberty Parties, by which such Designated Purchaser agrees (i) to be subject to
all of the obligations of a Founder Party under this Agreement and the Voting
Agreement but, except for a Designated Purchaser that is a Permitted Transferee,
to have none of the rights of a Founder Party hereunder or thereunder and (ii)
in the case of a Designated Purchaser that is not a Permitted Transferee, to be
subject to all of the obligations of a Liberty Party under the Standstill
Agreement but to have none of the rights of a Liberty Party thereunder. Without
limiting the generality of the foregoing, except for the imposition of the
foregoing obligations on a Designated Purchaser, no Designated Purchaser that is
not a Permitted Transferee will be considered a Founder Party for any purpose
hereunder, including the termination provisions set forth in Section 13.
Immediately following the Transfer of Liberty Offered Shares to a Founder or
Designated Purchaser pursuant to this Section 4, such shares shall be converted
to Class A Stock, or, if (i) then permissible under the United Charter, or (ii)
such conversion would not result in a "Change of Control" pursuant to the
Current Indentures as then in effect, Class B Stock, provided that if the
Liberty Offered Shares are Class B Stock, such shares need not be converted into
Class A Stock.
(c) If (i) the Founders reject or are deemed to reject the offer of the
Liberty Offered Shares set forth in a Liberty Offer Notice, or (ii) the Founders
accept such offer but the purchase and sale of all of the Liberty Offered Shares
does not occur by the applicable Outside Closing Date for any reason other than
the Liberty Parties' failure to comply with their respective obligations under
Section 4(b), then the Liberty Parties shall be free to Transfer the Liberty
11
Offered Shares (or, if applicable, convert the Liberty Offered Shares into
shares of Class A Stock); provided that, in the case of a Transfer:
(A) such Liberty Offered Shares are converted into Class A Stock
prior to the Transfer, and
(B) in the case of a Liberty Offer Notice with a Sixty-Day
Election Period, the Transfer occurs at a price per share
equal to or higher than the Liberty Offer Price within 60 days
after the applicable of (x) the last day of the Sixty-Day
Election Period, if the offer set forth in the Liberty Offer
Notice was rejected or deemed rejected or (y) the applicable
Outside Closing Date, if the closing of the sale of the
Liberty Offered Shares pursuant to the Liberty Offer Notice
did not occur by such date; or
(C) in the case of a Liberty Offer Notice with a Two-Business Day
Election Period, the Transfer either occurs in accordance with
Clause (B) above or, if the Liberty Offer Price specified in
the applicable Liberty Offer Notice was the market price of
the Class A Stock (or, if the Class B Stock is then publicly
traded, the Class B Stock) at the time of such Liberty Offer
Notice, the Transfer occurs at a price not less than the then
current market price of the Class A Stock (whether higher or
lower than the Liberty Offer Price) within 15 days after the
applicable of (x) the last day of the Two-Business Day
Election Period, if the offer set forth in the Liberty Offer
Notice was rejected or deemed rejected or (y) the applicable
Outside Closing Date, if the closing of the sale of the
Liberty Offered Shares pursuant to the Liberty Offer Notice
did not occur by such date.
Any purported Transfer of Subject Shares in violation of this Section 4
shall be void and ineffective as against both the transferring Liberty Party and
the proposed transferee, and any purported conversion of Subject Shares in
violation of this Section 4 shall be void and ineffective.
Section 5. Liberty Parties' Right of First Offer.
(a) No Founder Party shall Transfer any Subject Shares to any Person
other than a Permitted Transferee in compliance with Section 6 or convert any
Subject Shares to Class A Stock, unless, prior to such Transfer or conversion,
such Founder Party first offers to sell the Subject Shares proposed to be
Transferred or converted (the "Founder Offered Shares") to the Liberty Parties
by delivering a written notice (a "Founder Offer Notice") to the Liberty
Parties. The Founder Offer Notice shall state the number and class of Founder
Offered Shares and the price per share (the "Founder Offer Price") at which such
Founder Party is offering the Founder Offered Shares to the Liberty Parties and
shall constitute a binding, irrevocable offer, subject to the provisions of this
Section 5, to sell the Founder Offered Shares to the Liberty Parties at the
Founder Offer Price. In
12
order to accept the offer of the Founder Offered Shares, Liberty must deliver a
written notice of acceptance (a "Liberty Acceptance Notice") to the offering
Founder Party agreeing to purchase, or to cause another Liberty Party or a
Permitted Transferee to purchase, all, but not less than all, of the Founder
Offered Shares at the Founder Offer Price. In order to be effective, a Liberty
Acceptance Notice must (i) be signed by Liberty and (ii) be delivered to the
offering Founder Party no later than 5:00 p.m. Denver, Colorado time on the last
day of the thirty day period (a "Founder Election Period") following the date
the Founder Offer Notice is given. A duly completed and delivered Liberty
Acceptance Notice shall constitute a binding irrevocable agreement by Liberty to
purchase, or to cause another Liberty Party or a Permitted Transferee to
purchase, the Founder Offered Shares at the Founder Offer Price as provided in
this Section 5. If a Liberty Acceptance Notice meeting the requirements
specified above is not delivered within the specified election period, then the
Liberty Parties will be deemed to have rejected the offer of the Founder Offered
Shares.
(b) Upon delivery of a Liberty Acceptance Notice meeting the
requirements specified above within the specified election period, the offering
Founder Party will be obligated to sell, and Liberty will be obligated to
purchase, or to cause another Liberty Party or a Permitted Transferee to
purchase, all of the Founder Offered Shares at the Founder Offer Price. The
closing of such purchase and sale shall occur at such time and place as the
parties thereto may agree, but in any event no later than the 60th day after the
Founder Offer Notice is given (provided that such 60 day period may be extended
for up to an additional 90 days to the extent that the acquisition of the
Founder Offered Shares requires any Governmental Approval that has not been
obtained during that period). The purchase and sale will be without
representation or warranty, except that each party to the transaction will
represent and warrant that it has all requisite power and authority to enter
into the transactions, and the Founder Party transferring the shares will
represent and warrant that it is transferring valid title to such shares and
such shares are being transferred free and clear of any Lien or Restriction
other than those created by this Agreement, any other Transaction Agreement or
the parties taking delivery of such shares. Payment of the purchase price shall
be in immediately available United States Dollars. As a condition to acquiring
any Founder Offered Shares, a Permitted Transferee of a Liberty Party that is
not then a party to this Agreement must execute and deliver an instrument, in
form and substance reasonably acceptable to United and the Controlling
Principals, by which such Permitted Transferee agrees to be subject to all of
the rights and obligations of a Liberty Party under this Agreement and the
Standstill Agreement.
(c) If (i) the Liberty Parties reject or are deemed to reject the offer
of the Founder Offered Shares set forth in a Founder Offer Notice, or (ii) the
Liberty Parties accept such offer but the purchase and sale of all of the
Founder Offered Shares does not occur within the time period specified in
Section 5(b) (as extended, if applicable, the "Liberty Purchase Period") for any
reason other than the Founders' failure to comply with their respective
obligations under Section 5(b), then the Founder Party delivering the Founder
Offer Notice shall be free to Transfer the Founder Offered Shares (or, if
applicable, convert the Founder Offered Shares into shares of Class A Stock),
provided that, in the case of a Transfer:
(A) the Transfer occurs at a price per share equal to or higher
than the Founder Offer Price within 60 days after the
applicable of (x) the last day of the Founder Election Period
if the offer set forth in the Founder Offer Notice was
rejected or deemed rejected or (y) the last day of the Liberty
Purchase Period if the closing of the sale of the Founder
Offered Shares pursuant to the Founder Offer Notice did not
occur by such date, and
13
(B) unless the aggregate number of Founder Offered Shares then
being Transferred by all Founder Parties to the same
transferee represents at least a majority of the aggregate
amount of Subject Shares Beneficially Owned by all Founders
and their Permitted Transferees and Designated Purchasers,
such Founder Offered Shares are converted into shares of Class
A Stock prior to the Transfer.
Any purported Transfer of Subject Shares in violation of this Section 5
shall be void and ineffective as against both the transferring Founder Party and
the proposed transferee, and any purported conversion of Subject Shares in
violation of this Section 5 shall be void and ineffective.
Section 6. Permitted Transfers.
(a) The Liberty Parties and any Founder Party may Transfer Subject
Shares to their respective Permitted Transferees without being obligated to
first deliver a First Offer Notice to any other party, provided that the
Permitted Transferee undertakes in writing to be subject to each of the terms of
this Agreement, and in the case of a Permitted Transferee of a Liberty Party,
the Standstill Agreement and, in the case of Permitted Transferees of the
Founder Parties, the Voting Agreement and is then subject to the rights and
obligations that apply to the Liberty Parties, in the case of Permitted
Transferees of a Liberty Party, or the Founder Parties, in the case of Permitted
Transferees of a Founder Party. Any purported Transfer to a Permitted Transferee
shall be void and ineffective as against both the transferring Liberty Party or
Founder Party, and the Permitted Transferee, if the Permitted Transferee fails
to become subject to this Agreement and subject to the rights and obligations of
the transferring Liberty Party or Founder Party.
(b) A Founder Party or Liberty Party may pledge or grant a security
interest in Subject Shares, or Rights to acquire Subject Shares, to a financial
institution to secure a bona fide loan made to such Founder Party or Liberty
Party, or in connection with a hedging transaction with a financial institution,
without becoming obligated to deliver a First Offer Notice; provided that the
lender or counter-party (i) may not become the registered holder of Subject
Shares as a consequence thereof, (ii) agrees in writing with the pledging party
(in an agreement which expressly provides that United and the non-pledging party
(the Liberty Parties or the Founders, as applicable) are third-party
beneficiaries thereof) that such secured party shall not foreclose upon or
Transfer any Subject Shares pursuant to the exercise of its remedies with
respect to such pledge or security interest unless it first complies with the
provisions of Section 4 as if it were a Liberty Party, in the case of a pledge
of Subject Shares held by a Liberty Party, and the provisions of Section 5 as if
it were a Founder Party, in the case of a pledge of Subject Shares held by a
Founder Party, and, in either case, if the applicable offer is rejected or
deemed rejected or the purchase and sale of the offered shares fail for any
reason to occur, it converts the Subject Shares subject to such pledge or
security interest into Class A Stock prior to such foreclosure or Transfer.
Notwithstanding the foregoing reference to the provisions of Section 4 and 5,
for pledges made to secure loans (or notional amounts in the case of hedging
transactions) of less than $15 million, (1) the maximum election period shall be
one (1) Business Day (rather than the Sixty-Day Election Period provided in
Section 4 or the thirty-day Founder Election Period provided in Section 5) and
(2) the closing of any purchase and sale of the pledged shares by the Liberty
Parties or the Founders, as applicable, pursuant to the exercise of their first
offer rights
14
shall occur within three (3) Business Days of the delivery of a First Offer
Notice by the secured party.
(c) Those pledges of common stock of Old United that were in effect on
May 25, 2001 and are identified on Appendix I hereto, and which apply to Subject
Shares as of the date hereof, shall not be deemed to have been made in violation
of the foregoing provisions of this Agreement, provided that the pledging
parties use their best commercially reasonable efforts to obtain the agreement
of the applicable lender or counter-party contemplated by Section 6(b).
Section 7. Tag-Along Rights.
(a) If (i) (A) the Liberty Parties propose to Transfer Liberty Offered
Shares representing a majority of the Class B and Class C Stock then
Beneficially Owned by the Liberty Parties or, when taken together with all prior
Transfers of such stock other than to a Permitted Transferee or the Founders and
their Designated Purchasers, a number of shares equal to a majority of such
stock Beneficially Owned by the Liberty Parties as of the date hereof, in either
case pursuant to a Liberty Offer Notice or Liberty Offer Notices delivered in
accordance with Section 4, (B) the Founders and their Designated Purchasers fail
to purchase such Liberty Offered Shares and (C) the Liberty Parties propose to
Transfer the Class A Stock obtained by the conversion of such Liberty Offered
Shares to a Person other than a Permitted Transferee, or (ii) (A) the Founder
Parties propose to Transfer Founder Offered Shares representing a majority of
the Class B Stock then Beneficially Owned by all Founder Parties, or, when taken
together with all prior Transfers of such stock other than to a Permitted
Transferee or the Liberty Parties, a number of shares equal to a majority of
such stock Beneficially Owned by the Founders and their Permitted Transferees as
of the date hereof, in either case pursuant to a Founder Offer Notice or Founder
Offer Notices delivered in accordance with Section 5, (B) the Liberty Parties
fail to purchase such Founder Offered Shares and (C) the Founder Parties propose
to Transfer such Founder Offered Shares to a Person other than a Permitted
Transferee, the proposed transferor(s) (the "Transferor") must first deliver a
notice (a "Tag-Along Notice") to the Founders, if the Transferor is one or more
Liberty Parties, or to the Liberty Parties, if the Transferor is one or more
Founder Parties, setting forth (w) the number of shares of Class A Stock or
shares of Class B Stock proposed to be Transferred (which shall be the same as
the number of Subject Shares subject to the applicable First Offer Notice), (x)
the price per share of Class A Stock or per share of Class B Stock at which the
shares of Class A Stock or shares of Class B Stock are proposed to be
Transferred (which shall be equal to or greater than the price per share set
forth in the applicable First Offer Notice), (y) all Liens and Restrictions to
which the shares of Class A Stock or shares of Class B Stock proposed to be
Transferred will be subject, and (z) whether the shares of Class A Stock or
shares of Class B Stock proposed to be Transferred are to be sold for cash or
other consideration and the other terms of the proposed Transfer.
(b) The Liberty Parties (if the Transferor is one or more Founder
Parties) or the Founder Parties (if the Transferor is one or more Liberty
Parties) (the applicable of the foregoing, the "Tag-Along Group") shall have the
right (the "Tag-Along Right"), exercisable by written notice delivered to the
Transferor not later than 15 Business Days following the date the Tag-Along
Notice is given, to elect to Transfer up to an aggregate number of shares of
Class B Stock and/or Class C Stock (and/or, if the Tag-Along Group consists of
one or more Liberty Parties, Class A Stock) owned by the members of the
Tag-Along Group equal to the number determined by
15
multiplying the number of shares of Class B Stock (or Class A Stock if the
Transferor is a Liberty Party) proposed to be transferred by the Transferor by a
fraction the numerator of which is the number of shares of Class B Stock and
Class C Stock (and, if the Tag-Along Group consists of one or more Liberty
Parties, Class A Stock) then owned in the aggregate by the members of the
Tag-Along Group and the denominator of which is the total number of shares of
Class B Stock and Class C Stock then owned in the aggregate by the Transferor
and the members of the Tag-Along Group (and, if the Tag-Along Group consists of
one or more Liberty Parties, shares of Class A Stock then owned by members of
the Tag-Along Group). The shares of Common Stock Transferred by the Liberty
Parties pursuant to the exercise of a Tag-Along Right may include shares of
Class A Stock, but only up to an aggregate number of shares of Class A Stock in
any such Transfer equal to the number determined by multiplying the total number
of shares of Common Stock that may be Transferred by the Liberty Parties
pursuant to such Tag-Along Right (computed in accordance with the preceding
sentence) by a fraction, the numerator of which is the number of shares of Class
A Stock then owned in the aggregate by the Liberty Parties and the denominator
of which is the total number of shares of Common Stock then owned in the
aggregate by the Liberty Parties. The Tag-Along Right shall be allocated among
the members of the Tag-Along Group by Liberty (in the case of the Liberty
Parties) or the Controlling Principals (in the case of the Founder Parties). The
number of shares to be Transferred by the Transferor shall be reduced by the
number of shares to be sold by the parties to this Agreement that exercise
Tag-Along Rights ("Exercising Holders").
(c) The terms on which any Transferor required to deliver a Tag-Along
Notice actually Transfers its shares of Class B Stock or shares of Class A Stock
shall not be more favorable, and shall include no more cash, than the terms on
which Exercising Holders Transfer their shares of Common Stock. Exercising
Holders may be required to make the same representations, warranties, covenants
and agreements as are given by the Transferor in connection with any Transfer
pursuant to this Section 7, but only insofar as they relate to such Exercising
Holder's ownership of the Common Stock subject to the Transfer, are
representations or warranties regarding the approval, authorization or
enforceability of such action, or are covenants or agreements to the effect that
such Exercising Holder will take such commercially reasonable actions as may be
necessary for the Transfer to lawfully occur and which the Transferor has also
agreed to take (other than any such actions which can reasonably be taken only
by the Transferor).
If any Liberty Party or Founder Party exercises its Tag-Along Right,
the Transferor required to deliver a Tag-Along Notice shall cause the documents
relating to the Transfer of its shares of Class A Stock or shares of Class B
Stock to the proposed transferee to be amended so that such documents include as
parties the Exercising Holders, and so as to provide that the proposed
transferee shall acquire from such Exercising Holders the number of shares of
Common Stock held by such Exercising Holders as to which the Tag-Along Right has
been exercised. The closing of the sale of Common Stock by any Exercising Holder
pursuant to this Section 7 shall, to the extent legally practicable, take place
at the same time and place as the closing of the Transfer by any Transferor
giving rise to the Tag-Along Right. At such closing, (x) the Exercising Holders
shall deliver to the transferee certificates representing the Common Stock
subject to the Transfer, free and clear of any Lien or Restriction (if the
Transferor's shares are being transferred free and clear of any Lien or
Restriction) other than those created by this Agreement, another Transaction
Agreement, the Transferor or the transferee, (y) the transferee
16
shall deliver to the Exercising Holders the consideration to be paid for such
Common Stock in accordance with the terms of the purchase and sale of such
Common Stock and of the Common Stock of the Transferor, and (z) subject to the
preceding paragraph, the Exercising Holders shall execute such other documents
and take such other actions as are reasonably necessary to consummate the sale
of such Common Stock and are also being taken by the Transferor (other than any
such actions as can reasonably be taken only by the Transferor). Any shares of
Class C Stock Transferred to a transferee pursuant to this Section shall be
converted immediately prior to such Transfer to Class A Stock or, if then
permissible under the United Charter, Class B Stock.
Any purported Transfer of Common Stock in violation of this Section 7
shall be void and ineffective as against both the Transferor and the proposed
transferee.
Section 8. Drag-Along Rights.
(a) If (A) the Founder Parties propose to Transfer Founder Offered
Shares in an amount equal to the greater of (1) a number of shares that
represents a majority of the Class B Stock then Beneficially Owned by all
Founders and their Permitted Transferees or (2) a number of shares that, when
taken together with all shares of Class B Stock previously Transferred to
Persons other than Permitted Transferees or the Liberty Parties, represents a
majority of the Class B Stock Beneficially Owned by the Founders and their
Permitted Transferees as of the date hereof, in either case, pursuant to a
Founder Offer Notice or Founder Offer Notices delivered in accordance with
Section 5, (B) the Liberty Parties fail to purchase such Founder Offered Shares
and (C) the Founder Parties propose to Transfer such Founder Offered Shares to
an unaffiliated third party that is not a Permitted Transferee, then the
Controlling Principals may deliver a notice (a "Drag-Along Notice") to the
Liberty Parties setting forth (w) the number of shares of Class B Stock proposed
to be Transferred (which shall be the same as the number of Subject Shares
subject to the applicable Founder Offer Notice), (x) the price per share at
which the shares of Class B Stock are proposed to be Transferred (which shall be
equal to or greater than the price per share set forth in the applicable Founder
Offer Notice), (y) all Liens and Restrictions to which the shares of Class B
Stock proposed to be Transferred will be subject, and (z) whether the Class B
Stock proposed to be Transferred is to be sold for cash or other consideration
and the other terms of the proposed Transfer.
(b) Upon receipt of a Drag-Along Notice, the Liberty Parties will be
required to Transfer to the proposed transferee, at the Liberty Parties'
election, (i) all shares of Class B Stock and Class C Stock Beneficially Owned
by the Liberty Parties as to which they have dispositive power, (ii) all shares
of Common Stock Beneficially Owned by the Liberty Parties as to which they have
dispositive power or (iii) the Proportionate Number of Shares Beneficially Owned
by the Liberty Parties (and, in the case of a Transfer pursuant to this clause
(iii), such Proportionate Number of Shares Beneficially Owned by the Liberty
Parties shall be comprised of shares of Common Stock of each class in the same
relative proportions as the Liberty Parties' aggregate Beneficial Ownership of
each such class bears to the Liberty Parties' aggregate Beneficial Ownership of
Common Stock of all classes); provided, however, that if, in connection with the
proposed Transfer by the Founders, Xx. Xxxx X. Xxxxxxxxx, X. Xxxxxxxxx Holdings,
Co., a Colorado limited partnership, The Xxxx X. Xxxxxxxxx Family Trust, Xx.
Xxxx X. Xxxxxxxxx and The MLS Family Partnership LP propose to Transfer to the
proposed transferee all shares of Common Stock Beneficially Owned by them, which
shares of Common Stock include shares of
17
Class B Stock representing at least 40% of the greater of (x) the number of
shares of Class B Stock Beneficially Owned by them in the aggregate as of the
date hereof and (y) the number of shares of Class B common stock of Old United
Beneficially Owned by them in the aggregate as of June 25, 2000, in each case
appropriately adjusted for stock splits, stock dividends and other similar
events, then the Liberty Parties will be required to Transfer to the proposed
transferee all shares of Common Stock Beneficially Owned by them as to which
they have dispositive power.
(c) The Liberty Parties may require that any Transfer with respect to
which the Founders exercise their Drag-Along Rights be structured as a
transaction in which all holders of Class B Stock and Class C Stock are treated
equally with respect to all shares of Common Stock being transferred and that is
a tax-free transaction for the Liberty Parties.
(d) Upon exercise by the Founders of Drag-Along Rights, the terms on
which the Liberty Parties actually Transfer their Common Stock shall not be less
favorable, and (subject to clause (c) above) shall not include less cash, than
the terms on which the Founder Parties Transfer their Class B Stock. The Liberty
Parties may be required to make the same representations, warranties, covenants
and agreements as are given by the Founder Parties in connection with any
Transfer pursuant to this Section 8, but only insofar as they relate to the
Liberty Parties' ownership of the Common Stock subject to the Transfer, are
representations or warranties regarding approval, authorization or
enforceability of such action, or are covenants or agreements to the effect that
the Liberty Parties will take such commercially reasonable actions as may be
necessary for the Transfer to lawfully occur and which the Founder Parties have
also agreed to take (other than any such action which can reasonably be taken
only by the Founders).
Upon exercise by the Founders of Drag-Along Rights, the Founders shall
cause the documents relating to the Transfer of their Class B Stock to the
proposed transferee to be amended so that such documents include as parties the
Liberty Parties, and so as to provide that the proposed transferee shall acquire
from the Liberty Parties the number of shares of Common Stock determined in
accordance with Section 8(b). Except as otherwise required in order to satisfy
Section 8(c), the closing of the sale of Common Stock by the Liberty Parties
pursuant to this Section 8 shall, to the extent legally practicable, take place
at the same time and place as the closing of the Transfer by the Founder
Parties. At such closing, (x) the Liberty Parties shall deliver to the
transferee certificates representing the Common Stock subject to the Transfer,
free and clear of any Lien or Restriction (if the Founder Parties' shares are
being transferred free and clear of any Lien or Restriction) other than those
created by this Agreement, any other Transaction Agreement or the transferee,
(y) the transferee shall deliver to the Liberty Parties the consideration to be
paid for such Common Stock in accordance with the terms of the purchase and sale
of such Common Stock and of the Class B Stock of the Founder Parties, and (z)
subject to the preceding paragraph, the Liberty Parties shall, to the same
extent as the Founder Parties with respect to the Class B Stock being
transferred by them, execute such other documents and take such other
commercially reasonable actions as may be necessary to consummate the sale of
such Common Stock (other than any such action which can reasonably be taken only
by the Founders). Any shares of Class C Stock Transferred to a transferee
pursuant to this Section 8 shall be converted immediately following such
Transfer to Class A Stock or, if (i) then permissible under the United Charter
or (ii) such conversion would not result in a "Change of Control" pursuant to
the Current Indentures as then in effect, Class B Stock.
18
Section 9. All Shares.
All Equity Securities at any time Beneficially Owned by the Liberty
Parties or the Founders or any of their Permitted Transferees shall be subject
to the terms of this Agreement.
Section 10. Exchange of Shares.
(a) United will, on request of Liberty and subject to applicable Law
and listing requirements, permit any Liberty Party or its Affiliates to exchange
any shares of Class A Stock or Class B Stock Beneficially Owned by such Liberty
Party or Affiliate for shares of Class C Stock or, following the conversion of
the Class C Stock, Class B Stock on a one-for-one basis.
(b) United will, on request of Liberty and subject to applicable Law
and listing requirements, permit any Liberty Party or its Affiliates to exchange
capital stock of UPC (or capital stock of any other Affiliate of United
(including, for purposes of this Section 10, any Person in which United,
directly or indirectly, Beneficially Owns 50% or more of the equity securities,
without regard to voting power in the election of directors)) Beneficially Owned
by such Liberty Party or Affiliate (which shares were acquired from UPC or such
Affiliate) for shares of Class C Stock or, following the conversion of the Class
C Stock, Class B Stock on the basis provided in subsection (c) of this Section
10 and otherwise on such basis as Liberty and United may agree, including the
receipt of required fairness opinions. United will use commercially reasonable
efforts to structure any such exchange so that it is tax-free to Liberty.
(c) Without limiting the generality of the foregoing, at any time and
from time to time after the occurrence of an event that, upon the giving of
notice by UPC would entitle UPC to convert the shares of its Series 1
Convertible Preference Shares A ("UPC Convertible Shares") Beneficially Owned by
Liberty into ordinary shares of UPC ("UPC Ordinary Shares") (i) Liberty will
have the right to put all or any portion of the UPC Convertible Shares or the
UPC Ordinary Shares received on conversion or redemption of the UPC Convertible
Shares or on exercise of warrants to United in exchange for shares of Class C
Stock, or, following the conversion of the Class C Stock, Class B Stock, valued
at the Agreed United Per Share Value (as defined in (and determined in
accordance with) Schedule 10(c) to this Agreement, except that any values
ascribed to United's direct or indirect investment in UPC Ordinary Shares and
UPC Convertible Shares shall not exceed the values ascribed to such securities
pursuant to the following sentence), and (ii) provided such exchange is tax-free
to Liberty, United will have the right to call such UPC Convertible Shares or
UPC Ordinary Shares from Liberty in exchange for shares of Class C Stock, or,
following the conversion of the Class C Stock, Class B Stock, valued at the
Average Market Price (as defined in the Merger Agreement) of the Class A Stock.
For purposes of such put or call: (A) the value of UPC Convertible Shares will
be as agreed by Liberty and United or, subject to Section 10(d), if they have
not agreed on such value within ten days after the date notice of exercise of a
put or call is given, as determined by an independent investment banking firm
selected by the parties taking into account, among other things, the average
closing sale price of the UPC Ordinary Shares for the period of 20 trading days
preceding the date of such notice, and (B) UPC Ordinary Shares will be valued at
the Average Market Price (as defined in the Merger Agreement) of the UPC
Ordinary Shares as of the date notice of exercise of a put or call is given. If
Liberty elects to exercise a put, United will use commercially reasonable
efforts to structure the exchange transaction so that it is tax-free to Liberty.
19
(d) If Liberty and United are unable to agree on the value of UPC
Convertible Shares and are unable to agree on the selection of an investment
banking firm to make such determination within the ten day period provided in
Section 10(c)(A), then either party may select such investment banking firm by
delivering written notice of such selection to the other party at any time after
the expiration of such ten day period; provided however, that if the party
receiving such a notice, within ten days after the receipt thereof, delivers
written notice to the other party designating an alternate investment banking
firm, then the two investment banking firms identified by the parties shall
select a third investment banking firm, which shall determine the value of the
UPC Convertible Shares as contemplated by Section 10(c)(A).
Section 11. Endorsement of Certificates.
(a) United shall endorse upon the certificate for each of the Equity
Securities Beneficially Owned by the Liberty Parties and the Founders a legend
substantially the same as the following legend:
"The securities represented by this certificate are subject to
a [Stockholders Agreement and a Standstill Agreement [in the
case of such securities held by Liberty Parties]], a
[Stockholders Agreement and a Voting Agreement [in the case of
such securities held by Founders]], each dated as of ________
__, 2002, copies of which are available from UnitedGlobalCom,
Inc. upon request, and any sale, pledge, hypothecation,
transfer, assignment or other disposition of such securities
is subject to such Stockholders Agreement and [Standstill
Agreement] [Voting Agreement]."
(b) Upon surrender to United of any certificate representing any Equity
Securities or Rights disposed of by a Liberty Party or any Affiliate of a
Liberty Party in a transaction described in Section 5(a)(ii) or (v) of the
Standstill Agreement or in clause (ii), (iii) or (iv) of the definition of
Transfer in Section 1, United shall promptly cause to be issued (i) to the
transferee or transferees of such Equity Securities or Rights one or more
certificates without the legend set forth in Section 11(a) and (ii) to the
holder of Equity Securities or Rights represented by such certificates so
surrendered one or more certificates representing such Equity Securities or
Rights, if any, as shall not have been so disposed of, with the legend set forth
in Section 11(a). Upon termination of this Agreement pursuant to Section 13 and
the surrender to United of any certificate representing Equity Securities or
Rights, United shall cause to be issued to the holder of such Equity Securities
or Rights one or more certificates without the legend set forth in Section
11(a).
Section 12. Representations and Warranties.
Each of the Liberty Parties, on the one hand, and the Founders and
United, on the other, severally and not jointly, represent and warrant to each
other as of the date of this Agreement as follows:
20
(a) Such party has the right, power, legal capacity and authority to
enter into and perform such party's obligations under this Agreement, and this
Agreement constitutes such party's valid and binding obligation, enforceable
against such party in accordance with its terms, subject, as to enforceability,
to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and similar laws affecting creditor's rights and remedies generally,
and to general principles of equity, including principles of commercial
reasonableness, good faith and fair dealing (regardless of whether enforcement
is sought in a proceeding at law or in equity).
(b) Such party has obtained all authorizations, permits, approvals or
consents of any Persons, as well as all authorizations, permits, approvals or
consents of any Governmental Authorities, necessary to enter into and perform
such party's obligations under this Agreement, except as would not, individually
or in the aggregate, materially adversely affect such party's ability to perform
its obligations under this Agreement.
(c) Such party is the lawful and Beneficial Owner of record of the
Equity Securities set forth opposite such party's name in Appendix I, free and
clear of any Lien or Restriction, except for those created by this Agreement or
any other Transaction Agreement, or as otherwise set forth in Appendix I. In the
case of a Founder, the number of equity securities of Old United Beneficially
Owned by such party as of June 25, 2000 is also set forth on Appendix I.(1)
(d) This Agreement and the transactions it contemplates do not conflict
with any applicable Law or any agreement to which such party is a party or
constitute a default under any such agreement, except as would not, individually
or in the aggregate, materially adversely affect such party's ability to perform
its obligations under this Agreement.
Section 13. Term and Termination.
(a) The Liberty Parties' covenants set forth in Section 3(a), the
parties' obligation to issue a Tag-Along Notice pursuant to Section 7 and the
Founder Parties' right to issue a Drag-Along Notice pursuant to Section 8 of
this Agreement will terminate on June 25, 2010, unless this Agreement is earlier
terminated in its entirety as described in this Section 13.
(b) This Agreement shall terminate as to any Liberty Party or Founder
(but not as to any Designated Purchaser) the voting power of whose Beneficially
Owned Equity Securities (together with that of its Permitted Transferees (which
for this purpose will not include another Founder or Permitted Transferee of
another Founder) and Controlled Affiliates) is reduced to 10% or less of the
voting power of equity securities in Old United that such Liberty Party or
Founder (together with its Permitted Transferees (which for this purpose will
not include another Founder or Permitted Transferee of another Founder) and
Controlled Affiliates) Beneficially Owned as of June 25, 2000. Notwithstanding
the parentheticals in the preceding sentence, for purposes of this Section
13(b), Xx. Xxxx X. Xxxxxxxxx shall be deemed to Beneficially Own all Equity
Securities Beneficially Owned by Xx. Xxxx X. Xxxxxxxxx, and Xx. Xxxx X.
Xxxxxxxxx shall be deemed to Beneficially Own all Equity Securities Beneficially
Owned by Xx. Xxxx X. Xxxxxxxxx. For purposes of this Section 13, the voting
power of outstanding shares of Class C Stock, if any, shall be calculated as if
such shares had been converted into Class B Stock.
--------
(1) Appendix I should be updated to reflect this information.
21
(c) This Agreement (other than Section 11(b)) shall terminate in its
entirety on the first to occur of (a) such time as (i) all of the Founders and
their Permitted Transferees that are parties to this Agreement as a group or
(ii) Xx. Xxxx X. Xxxxxxxxx, Xx. Xxxx X. Xxxxxxxxx and their Permitted
Transferees (which for this purpose will not include another Founder or
Permitted Transferee of another Founder) that are parties to this Agreement as a
group, no longer Beneficially Own a number of shares of Class B Stock equal to
at least 40% of the greater of (x) the number of shares of Class B Stock
Beneficially Owned by them in the aggregate as of the date hereof and (y) the
number of shares of Class B common stock of Old United Beneficially Owned by
them in the aggregate as of June 25, 2000, in each case appropriately adjusted
for stock splits, stock dividends and other similar events, provided that for
purposes of calculating such ownership, any Class B Stock transferred by such
Person to a Liberty Party shall be deemed to continue to be owned, or (b) the
consummation of a Transfer (whether in a single transaction or in one or more
related transactions) by the Founders and their Permitted Transferees that are
parties to this Agreement of shares of Class B Stock that represent at least a
majority of the aggregate amount of Class B Stock then Beneficially Owned by
them or that, when taken together with all shares of Class B Stock previously
Transferred to Persons other than Permitted Transferees, represent a majority of
the Class B Stock Beneficially Owned by the Founders and their Permitted
Transferees as of the date hereof, whether to one or more Liberty Parties or to
one or more unaffiliated third parties. For purposes of this Section 13,
"Founders" means Xxxx X. Xxxxxxxxx, Xxxx X. Xxxxxxxxx, Xxxxxx Xxxxxxxx and
Xxxxxx X. Xxxxxxx, Xx.
Section 14. Remedies. Each of the parties acknowledges and agrees that
in the event of any breach of this Agreement, the nonbreaching party would be
irreparably harmed and could not be made whole by monetary damages. Accordingly,
the parties to this Agreement, in addition to any other remedy to which they may
be entitled hereunder or at law or in equity, shall be entitled to compel
specific performance of this Agreement.
Section 15. Notices. All notices, requests, demands and other
communications required or permitted under this Agreement shall be in writing,
shall be deemed to have been duly given when delivered personally or, sent by
telecopy, or recognized service providing for guaranteed delivery, addressed as
follows:
(a) If to the Founders, to:
UnitedGlobalCom, Inc.
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Attention: President
Fax: 303/000-0000
22
with copies to:
UnitedGlobalCom, Inc.
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Attention: General Counsel
Fax: 303/000-0000
and
Holme Xxxxxxx & Xxxx LLP
0000 Xxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Attention: W. Xxxx Xxxxxx, Esq.
Fax: 303/000-0000
(b) If to the Liberty Parties, to:
Liberty Media Corporation
00000 Xxxxxxx Xxxx.
Xxxxxxxxx, Xxxxxxxx 00000
Attention: President
Fax: 720/000-0000
with a copy to:
Liberty Media Corporation
00000 Xxxxxxx Xxxx.
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxxxx X. Xxxxxxxxx, Esq.
Fax: 720/000-0000
Xxxxx Xxxxx LLP
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxx, Esq.
Fax: 212/000-0000
Liberty and the Controlling Principals shall be responsible for distributing any
notices they receive to the Liberty Parties and Founder Parties, respectively,
as necessary, as well as for supplying each other with any changes in the
addresses or telecopy numbers set forth in this Section 15. All notices,
requests, demands, waivers and communications shall be deemed to have been given
on the date of delivery or on the first Business Day after overnight delivery
was guaranteed by a recognized delivery service, except that any change of
address shall be effective
23
only upon actual receipt. Written notice given by telecopy shall be deemed
effective when confirmation is received by the sending party. Delivery shall be
deemed to have been made to each Founder on the date that delivery is made to
United at the address specified above (as it may be changed as provided herein).
Delivery shall be deemed to have been made to each Liberty Party on the date
that delivery is made to Liberty at the address specified above (as it may be
changed as provided herein).
Section 16. Entire Agreement. This Agreement, together with the other
Transaction Agreements and the Merger Agreement, contains all the terms and
conditions agreed upon by the parties hereto regarding the subject matter hereof
and thereof, and no other agreements, oral or otherwise, regarding the subject
matter hereof shall have any effect unless in writing and executed by the
parties after the date of this Agreement.
Section 17. Applicable Law, Jurisdiction; Waiver of Jury Trial. This
Agreement shall be governed by Colorado law without regard to conflicts of law
rules. The parties hereby irrevocably submit to the jurisdiction of any Colorado
State or United States Federal court sitting in Colorado, and only a State or
Federal Court sitting in Colorado will have any jurisdiction over any action or
proceeding arising out of or relating to this Agreement or any agreement
contemplated hereby, and the undersigned hereby irrevocably agree that all
claims in respect of such action or proceeding shall be heard and determined in
such State or Federal court. The undersigned further waive any objection to
venue in such State and any objection to any action or proceeding in such State
on the basis of a non-convenient forum. Each party hereby IRREVOCABLY WAIVES ANY
RIGHT TO A TRIAL BY JURY in any proceeding brought with respect to this
Agreement or the transactions contemplated hereby.
Section 18. Headings. The headings in this Agreement are for
convenience only and are not to be considered in interpreting this Agreement.
Section 19. Counterpart Execution. This Agreement may be executed in
any number of counterparts, each of which shall be deemed an original but all of
which will constitute a single agreement.
Section 20. Parties in Interest. Nothing in this Agreement, express or
implied, is intended to confer upon any Person other than the parties hereto and
their permitted successors and assigns, any benefits, rights or remedies. Except
as contemplated by the definitions of "Liberty" or "Transfer," neither this
Agreement nor the rights or obligations of any party may be assigned or
delegated (other than to a Permitted Transferee that becomes a party hereto in
accordance with the terms hereof) by operation of law or otherwise without the
prior written consent of Liberty and Controlling Principals.
Section 21. Severability. The invalidity or unenforceability of any
provision of this Agreement in any application shall not affect the validity or
enforceability of such provision in any other application or the validity or
enforceability of any other provision.
Section 22. Waivers and Amendments. No waiver of any provision of this
Agreement shall be deemed a further or continuing waiver of that provision or a
waiver of any other provision of this Agreement. This Agreement may not be
amended except in a writing signed by
24
Liberty, United and Controlling Principals. United may waive its rights under
this Agreement only with the prior approval of a majority of the Board.
Section 23. Interpretation. As used herein, except as otherwise
indicated herein or as the context may otherwise require, the words "include,"
"includes" and "including" are deemed to be followed by "without limitation"
whether or not they are in fact followed by such words or words of like import;
the words "hereof," "herein," "hereunder" and comparable terms refer to the
entirety of this Agreement, including the Appendix hereto, and not to any
particular article, section or other subdivision hereof or Appendix hereto; any
pronoun shall include the corresponding masculine, feminine and neuter forms;
the singular includes the plural and vice versa; references to any agreement or
other document are to such agreement or document as amended and supplemented
from time to time; references to any statute or regulation are to it as amended
and supplemented from time to time, and to any corresponding provisions of
successor statutes or regulations; references to "Article," "Section" or another
subdivision or to an "Appendix" are to an article, section or subdivision hereof
or an "Appendix" hereto; and all references to "the date hereof," "the date of
this Agreement" or similar terms (but excluding references to the date of
execution hereof) refer to the date first above written, notwithstanding that
the parties may have executed this Agreement on a later date. Any reference
herein to a "day" or number of "days" (without the explicit qualification of
"Business") shall be deemed to refer to a calendar day or number of calendar
days. If any action or notice is to be taken or given on or by a particular
calendar day, and such calendar day is not a Business Day, then such action or
notice may be taken or given on the next succeeding Business Day.
Section 24. Rules of Construction. The parties hereto agree that they
have been represented by counsel during the negotiation, preparation and
execution of this Agreement and, therefore, waive the application of any law,
regulation, holding or rule of construction providing that ambiguities in an
agreement or other document will be construed against the party drafting such
agreement or document.
[Signature Pages Follow]
25
Executed as of the date first set forth above.
UNITEDGLOBALCOM, INC.,
a Delaware corporation
By:
-----------------------------------
Name:
Title:
LIBERTY MEDIA CORPORATION,
a Delaware corporation
By:
-----------------------------------
Name:
Title:
LIBERTY GLOBAL, INC.,
a Delaware corporation
By:
-----------------------------------
Name:
Title:
FOUNDER SIGNATURES
THE X. XXXXXXXXX GROUP
Dated:
--------------------------- --------------------------------------
Xxxx X. Xxxxxxxxx
X. XXXXXXXXX HOLDINGS, CO.,
a Colorado limited partnership
Dated: By:
--------------------------- -----------------------------------
Xxxx X. Xxxxxxxxx
General Partner
THE XXXX X. XXXXXXXXX FAMILY TRUST
Dated: By:
--------------------------- -----------------------------------
Xxxx X. Xxxxxxxxx Xxxxxx
Trustee
Dated: By:
--------------------------- -----------------------------------
Xxxxx X. Xxxxxxx
Trustee
Dated: By:
--------------------------- -----------------------------------
W. Xxxx Xxxxxx
Trustee
MLS Family Partnership LLLP
By: The Xxxxxx Xxxxxxxxx Trust
General Partner
Dated: By:
--------------------------- -----------------------------------
Xxxx X. Xxxxxxxxx
Trustee
Dated: By:
--------------------------- -----------------------------------
Xxxx X. Xxxxxxx
Trustee
FOUNDER SIGNATURES
THE X. XXXXXXXXX GROUP
Dated:
--------------------------- --------------------------------------
Xxxx X. Xxxxxxxxx
FOUNDER SIGNATURES
THE XXXXXXXX GROUP
XXXXXXXX LIMITED PARTNERSHIP
By: Xxxxxx Xxxxxxxx Trust
General Partner
Dated: By:
--------------------------- -------------------------------
Xxxxxx X. Xxxxxxxx
Trustee
XXXXXX X. XXXXXXXX REVOCABLE TRUST
Dated: By:
--------------------------- -----------------------------------
Xxxxxx X. Xxxxxxxx
Trustee
Dated:
--------------------------- --------------------------------------
Xxxxxx X. Xxxxxxxx
Dated: *
--------------------------- --------------------------------------
Xxxxxx X. Xxxxxxxx
Dated: *
--------------------------- --------------------------------------
Xxx Xxxxxxxx
Dated: *
--------------------------- --------------------------------------
Xxxxx Xxxxxxx Xxxx
Dated: *
--------------------------- --------------------------------------
Xxxxxxxx Xxxxx
* by Xxxxxx X. Xxxxxxxx Attorney-in-Fact
FOUNDER SIGNATURES
THE XXXXXXX GROUP
Dated:
--------------------------- --------------------------------------
Xxxxxx X. Xxxxxxx
XXXXXXX COMPANY,
a Wyoming general partnership
Dated: By:
--------------------------- -----------------------------------
Xxxxxx X. Xxxxxxx
General Partner
XXXXXX & XXXXXXX COMPANY,
a Wyoming trust
Dated: By: *
--------------------------- -----------------------------------
Xxxxxx X. Xxxxxxx, Xx.
Trustee
XXXXX X. XXXXXXX LIVING TRUST
a Wyoming trust
Dated: By: *
--------------------------- -----------------------------------
Xxxxx X. Xxxxxxx
Trustee
XXXX X. XXXXXXX LIVING TRUST
a Wyoming trust
Dated: By: *
--------------------------- -----------------------------------
Xxxx X. Xxxxxxx
Trustee
* by Xxxxxx X. Xxxxxxx Attorney-in-Fact
APPENDIX 1
OWNERSHIP OF SECURITIES
OUTSTANDING
FOUNDER CLASS A STOCK CLASS B STOCK OPTIONS
------- ------------- ------------- -----------
Xxxxxx Xxxxxxx, Xx. -0- -0- 120,000
Xxxxxxx Company -0- 222,420 -0-
Xxxxxx & Xxxxxxx Xxxxxxx -0- 222,412 -0-
Xxxxx X. Xxxxxxx Living Trust -0- 222,412 -0-
Xxxx X. Xxxxxxx Living Trust -0- 111,200 -0-
Xxxxxxxx Xxxxx -0- 76,912 -0-
April X. Xxxx 67,200 32,756 -0-
Xxxxxx Xxxxxxxx -0- -0- 120,000
Xxxxxxxx Limited Partnership 150,000 1,796,940 -0-
Xxxxxx Xxxxxxxx -0- -0- -0-
Xxxxxx Xxxxxxxx Revocable Trust 137,134 222,368 -0-
Xxx Xxxxxxxx -0- 66,912 -0-
Xxxx X. Xxxxxxxxx 10,170 1,743,216(1) 995,087(5)
X. Xxxxxxxxx Holdings, Co. -0- 3,063,512(1) -0-
Xxxx Xxxxxxxxx 126,686(2) 170,736(3) 343,878
The Xxxx X. Xxxxxxxxx Family Trust -0- 400,000(3) -0-
The MLS Family Partnership LP 256,541(4) 410,000(3) -0-
--------------
(1) Xxxx X. Xxxxxxxxx and the X. Xxxxxxxxx Holdings, Co. have each pledged
520,000 shares of Class B Stock to Citibank Private Bank of Citicorp
North America Inc. ("Citibank")
(2) Xxxx Xxxxxxxxx has pledged 42,000 shares of Class A Stock to Citibank
and the remaining 84,686 shares of Class A Stock are subject to a
cashless collar with X.X. Xxxxxx International Bank.
(3) All of these shares are pledged to Citibank.
(4) All of these shares are subject to a Forward Sale Agreement with
Citibank.
(5) Subject to shareholder approval, granted an additional option by Old
United for 1,500,000 shares on December 6, 2000. This option will
become an option for shares of United pursuant to the Merger Agreement.
OWNERSHIP OF SECURITIES
CLASS A STOCK CLASS C STOCK
----------------- -----------------
Liberty Media Corporation [_______________] [_______________]
Liberty Global, Inc. [_______________] [_______________]
SCHEDULE 10(c)
1. The "Agreed United Per Share Value" for purposes of Section 10(c) of
the Agreement shall be equal to the SOP Value of United, determined in
accordance with the terms of the following paragraphs.
2. Promptly following the date notice is given of the exercise of a put
pursuant to Section 10(c), Liberty and United shall negotiate in good faith to
determine the SOP Value of United.
3. (a) If within ten days following the date notice of an exercise of a
put pursuant to Section 10(c) is given (or such longer period as Liberty and
United may agree) Liberty and United have not agreed upon the SOP Value of
United, the determination of such SOP Value shall be determined in accordance
with the appraisal procedures set forth in this paragraph 3.
(b) No later than the fifteenth day after the expiration of the
ten-day (or longer) period referred to in paragraph 3(a) (the "Selection Date"),
Liberty and United shall each notify the other of the nationally recognized
investment banking firm (an "Appraiser") selected by it to determine the SOP
Value of United (unless prior thereto the parties have jointly selected an
Appraiser). If either party fails to select or timely notify the other party of
its selection of an Appraiser, then the determination of the SOP Value of United
shall be made by the Appraiser selected by the other party. Each Appraiser shall
deliver a written report (the "Appraisal Report") to Liberty and United setting
forth such Appraiser's determination of the SOP Value of United within 20 days
of the Selection Date.
(c) If there is only one Appraiser, the SOP Value of United shall be
deemed to be the SOP Value as determined by such Appraiser. If there are two
Appraisers, and if the higher of the Appraisers' respective determinations of
such SOP Value is not more than 120% of the lower of such determinations, then
the SOP Value of United shall be equal to the average of such two
determinations. If the higher of the respective determinations of such SOP Value
is more than 120% of the lower of such determinations, then the two Appraisers
shall jointly select a third Appraiser within five days following the date on
which the last of the two Appraisal Reports was delivered, and each such
Appraiser shall furnish the third Appraiser with its work product used in
preparing its Appraisal Report; provided, however, that if the first two
Appraisers have not selected the third Appraiser within 10 days, either Liberty
or United may cause the American Arbitration Association of New York to appoint
such third Appraiser. Such third Appraiser shall deliver its Appraisal Report of
its determination of the SOP Value of United within 20 days of its appointment,
and in such case such SOP Value shall be equal to the average of the two closest
determinations; provided, however, that if the difference between the highest
and middle determinations is no more than 105% and no less than 95% of the
difference between the middle and lowest determinations, then the SOP Value of
United shall be equal to such middle determination. For these purposes, if any
such Appraiser expresses its determination of the SOP Value of United as a range
of values, such Appraiser's determination of such SOP Value shall be deemed to
be the midpoint of such range of values. The determination of the SOP Value of
United in accordance with the provisions of this Schedule 10(c) shall be final,
binding and conclusive, in the absence of manifest error.
(d) Each of Liberty and United shall use its commercially reasonable
efforts to cause its designated Appraiser to timely deliver its Appraisal
Report, If, pursuant to the foregoing procedures, a third determination is
required, each of Liberty and United shall use its commercially reasonable
efforts to cause its designated Appraiser to promptly take all actions necessary
for the joint selection by such two Appraisers of the third Appraiser and to
promptly make available to such third Appraiser the work product of such
Appraiser relating to its determination of the SOP Value of United and shall
also take all reasonable actions that are necessary in order to cause such third
Appraiser to timely deliver its Appraisal Report.
(e) All fees and expenses of any Appraiser conducting an appraisal
in accordance with this Schedule 10(c) shall be paid by the party or parties
retaining such Appraiser. If a single Appraiser or a third Appraiser is retained
pursuant to this Schedule 10(c), the fees and expenses of such Appraiser shall
be split equally between Liberty and United.
4. For purposes of this Schedule 10(c), the "SOP Value" of United shall
be equal to a sum-of-the-parts valuation of such Person on a per share basis.
For purposes of such sum-of-the-parts valuation (i) any publicly traded capital
stock held by United, directly or indirectly through a wholly-owned Subsidiary
(as defined in the Merger Agreement), shall be deemed to have a value equal to
the Average Market Price (as defined in the Merger Agreement) of such capital
stock on the relevant date of determination and (ii) any non-publicly traded
interest in any business held by United (a "Non-Public Interest") shall be
deemed to have a value equal to the price (on an equity-value basis and net of
taxes if a taxable sale is assumed), on the relevant date of determination, that
a willing buyer having full knowledge of all relevant facts would pay to buy
such Non-Public Interest in a single arm's-length transaction in which neither
party is under any compulsion to sell or buy and no other consideration is paid
or business relationships entered into.
EXHIBIT 7.8
VOTING AGREEMENT
This Voting Agreement (this "Agreement") dated as of _________ __,
2001, is entered into among New UnitedGlobalCom, Inc., a Delaware corporation
that upon the effectiveness of the Merger described under "Background" below
will be renamed UnitedGlobalCom, Inc. ("United"), and each of the Persons
indicated as a "Founder" on the signature pages hereto.
Background
The Founders are currently the beneficial owners of Class B Common
Stock, par value $.01 per share ("Old United Class B Common Stock"), of
UnitedGlobalCom, Inc., a Delaware corporation ("Old United"). Pursuant to
certain transactions described in the
Agreement and Plan of Restructuring and
Merger, dated as of December 3, 2001 (the "Merger Agreement"), among Old United,
United, United/New United Merger Sub, Inc., a Delaware corporation ("Merger
Sub"), Liberty Media Corporation, a Delaware corporation ("Liberty Media"),
Liberty Media International, Inc., a Delaware corporation, Liberty Global, Inc.,
a Delaware corporation, ("Liberty Global") and the Founders, prior to the merger
(the "Merger") of Merger Sub with and into Old United, the Founders will cause
their shares of Old United Class B Common Stock to be contributed to United in
exchange for an equal number of shares of the Class B Common Stock, par value
$0.01 per share, of United ("Class B Common Stock"). It is a condition to the
consummation of the transactions contemplated by the Merger Agreement, including
without limitation the Merger, that United and the Founders each execute and
deliver this Agreement.
United and the Founders wish to set forth certain agreements regarding
the manner of the election of the Board of Directors of United that will become
effective immediately upon the effectiveness of a Class B Event provided that
such Class B Event occurs prior to the earlier of June 25, 2010 or the
termination of the Stockholders Agreement in its entirety.
Agreement
In consideration of the foregoing premises and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
Section 1. Certain Definitions. In this Agreement, the following terms
shall have the following meanings:
Agreement. As defined in the preamble.
Board. The Board of Directors of United.
Class A Common Stock. The Class A Common Stock, par value $0.01 per
share, of United.
Class B Common Stock. As defined under "Background" on the first page
of this Agreement.
Class B Event. As defined in the Certificate of Incorporation of
United, as in effect immediately following the Merger.
Class C Common Stock. The Class C Common Stock, par value $0.01 per
share, of United.
Common Stock. The Class A Common Stock, the Class B Common Stock and
the Class C Common Stock.
Controlling Principals. Founders who are Principals and who hold a
majority of the aggregate voting power of all Equity Securities held by the
Founders who are Principals.
Effective Date. The first date on which any Class B Event occurs if
such Class B Event occurs prior to the first to occur of June 25, 2010 and the
termination of the Stockholders Agreement in its entirety.
Equity Securities. The Common Stock and any other securities hereafter
issued by United that are entitled to vote generally in the election of
directors.
Founder Director. As defined in Section 2(a).
Founders. As defined in the Stockholders Agreement.
Liberty. Liberty Media and any successor (by merger, consolidation,
transfer or otherwise) to all or substantially all of its assets.
Liberty Director. As defined in Section 2(a).
Liberty Global. As defined under "Background" on the first page of this
Agreement.
Liberty Media. As defined under "Background" on the first page of this
Agreement.
Liberty Parties. As defined in the Stockholders Agreement.
Merger. As defined under "Background" on the first page of this
Agreement.
Merger Agreement. As defined under "Background" on the first page of
this Agreement.
Merger Sub. As defined under "Background" on the first page of this
Agreement.
Old United. As defined under "Background" on the first page of this
Agreement.
Old United Class B Common Stock. As defined under "Background" on the
first page of this Agreement.
2
Permitted Transferee. As defined in the Stockholders Agreement.
Person. Any individual, firm, corporation, partnership, limited
partnership, limited liability company, trust, joint venture or other legal
entity, and shall include any successor (by merger or otherwise) of such entity.
Principal. Any of Xxxxxx X. Xxxxxxx, Xxxxxx Xxxxxxxx, Xxxxxx Xxxxxxxx,
Xxxxxxxx Investments, Ltd (so long as it is controlled by Xxxxxx or Xxxxxx
Xxxxxxxx), Xxxx X. Xxxxxxxxx, X. Xxxxxxxxx Holdings, Co. (so long as it is
controlled by Xxxx X. Xxxxxxxxx), Xxxxx X. Xxxxxxxxx and Xxxx X. Xxxxxxxxx.
Stockholders Agreement. The Stockholders Agreement dated as of the date
hereof among United, the Liberty Parties and the Founders.
Termination Date. As defined in Section 3.
United. As defined in the preamble.
Section 2. Founder Voting Obligation.
(a) Commencing immediately upon the Effective Date, (i) the
Controlling Principals shall have the right to nominate four
members of the Board or, if greater, such number of members of
the Board (rounded up to the next whole number) equal to
33-1/3% of the then-authorized number of members of the Board
(each such nominee, a "Founder Director"), (ii) pursuant to
the Standstill Agreement, the Liberty Parties will have the
right to nominate four members of the Board or, if greater,
such number of members of the Board (rounded up to the next
whole number) equal to 33-1/3% of the then-authorized number
of members of the Board (each such nominee, a "Liberty
Director"), and (iii) the Board shall nominate the remaining
members of the Board.
(b) Each Founder and its Permitted Transferees shall vote or cause
to be voted all Equity Securities owned by them (or with
respect to which such Founder or Permitted Transferee has the
right to vote or direct the voting) for the election to the
Board of those persons nominated in accordance with this
Section 2 and will not seek the removal of any director (other
than a Founder Director) except for cause; provided that, if
the Liberty Parties request that the Controlling Principals
vote in favor of the removal of any Liberty Director, the
Controlling Principals will vote or cause to be voted all
Equity Securities owned by them (or with respect to which they
have the right to vote or direct voting) in favor of the
removal of such Liberty Director.
(c) United shall take all necessary or desirable action
(including, without limitation, nominations of the Founder
Directors) in order to cause the Board to have the
constituency provided for in Section 2(a) and to give effect
to this Section 2(c). The Controlling Principals shall have
the right to nominate persons to fill any vacancy on the Board
created by the resignation, removal, incapacity or death of
3
any Founder Director. Pursuant to the Standstill Agreement,
Liberty shall have the right to nominate persons to fill any
vacancy on the Board created by the resignation, removal,
incapacity or death of any Liberty Director.
Section 3. Termination. This Agreement shall terminate in its entirety
on the first to occur of June 25, 2010 and the date that the Stockholders
Agreement is terminated in its entirety (the date upon which the first of such
events occurs, the "Termination Date").
Section 4. Applicable Law, Jurisdiction. This Agreement shall be
governed by Colorado law without regard to conflicts of law rules. The parties
hereby irrevocably submit to the exclusive jurisdiction of any Colorado State or
United States Federal court sitting in Colorado over any action or proceeding
arising out of or relating to this Agreement or any agreement contemplated
hereby, and the undersigned hereby irrevocably agree that all claims in respect
of such action or proceeding shall be heard and determined in such State or
Federal court. The undersigned further waive any objection to venue in such
State and any objection to any action or proceeding in such State on the basis
of a non-convenient forum. Each party hereby IRREVOCABLY WAIVES ANY RIGHT TO A
TRIAL BY JURY in any proceeding brought with respect to this Agreement or the
transactions contemplated hereby.
Section 5. Remedies. Each of the parties acknowledges and agrees that
in the event of any breach of this Agreement, the nonbreaching party would be
irreparably harmed and could not be made whole by monetary damages. Accordingly,
the parties to this Agreement, in addition to any other remedy to which they may
be entitled hereunder or at law or in equity, shall be entitled to compel
specific performance of this Agreement.
Section 6. Headings. The headings in this Agreement are for convenience
only and are not to be considered in interpreting this Agreement.
Section 7. Counterpart Execution. This Agreement may be executed in any
number of counterparts, each of which shall be deemed an original but all of
which will constitute a single agreement.
Section 8. Parties in Interest. Nothing in this Agreement, express or
implied, is intended to confer upon any Person other than the parties hereto and
their Permitted Transferees, and their permitted successors and assigns any
benefits, rights or remedies, except that Liberty is an intended beneficiary of
this Agreement. Neither this Agreement nor the rights or obligations of any
party may be assigned or delegated (other than to a Permitted Transferee in
accordance with the terms of the Stockholders Agreement) by operation of law or
otherwise without the prior written consent of the Controlling Principals and
United.
Section 9. Severability. The invalidity or unenforceability of any
provision of this Agreement in any application shall not affect the validity or
enforceability of such provision in any other application or the validity or
enforceability of any other provision.
Section 10. Interpretation. As used herein, except as otherwise
indicated herein or as the context may otherwise require, the words "include,"
"includes" and "including" are deemed to
4
be followed by "without limitation" whether or not they are in fact followed by
such words or words of like import; the words "hereof," "herein," "hereunder"
and comparable terms refer to the entirety of this Agreement and not to any
particular section hereof; any pronoun shall include the corresponding
masculine, feminine and neuter forms; the singular includes the plural and vice
versa; references to any agreement or other document are to such agreement or
document as amended and supplemented from time to time; references to "Section"
or another subdivision are to a section or subdivision hereof; and all
references to "the date hereof," "the date of this Agreement" or similar terms
(but excluding references to the date of execution hereof) refer to the date
first above written, notwithstanding that the parties may have executed this
Agreement on a later date.
Section 11. Rules of Construction. The parties hereto agree that they
have been represented by counsel during the negotiation, preparation and
execution of this Agreement and, therefore, waive the application of any law,
regulation, holding or rule of construction providing that ambiguities in an
agreement or other document will be construed against the party drafting such
agreement or document.
Section 12. Waivers and Amendments. No waiver of any provision of this
Agreement shall be deemed a further or continuing waiver of that provision or a
waiver of any other provision of this Agreement. This Agreement may not be
amended nor may any provision hereof be waived except in a writing signed by all
parties and Liberty or its successor. United may waive any provision of this
Agreement that imposes obligations on or restricts the rights of or actions by
the Founders and their Permitted Transferees only with the prior approval of a
majority of the Board.
[Remainder of page intentionally left blank]
5
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
NEW UNITEDGLOBALCOM, INC.,
a Delaware corporation
By:
----------------------------------
Name:
----------------------------------
Title:
----------------------------------
6
FOUNDER SIGNATURES
THE X. XXXXXXXXX GROUP
Dated:
----------------------- ---------------------------------------
Xxxx X. Xxxxxxxxx
X. XXXXXXXXX HOLDINGS, CO.,
a Colorado limited partnership
Dated: By:
----------------------- -----------------------------------
Xxxx X. Xxxxxxxxx
General Partner
THE XXXX X. XXXXXXXXX FAMILY TRUST
Dated: By:
----------------------- -----------------------------------
Xxxx X. Xxxxxxxxx Xxxxxx
Trustee
Dated: By:
----------------------- -----------------------------------
Xxxxx X. Xxxxxxx
Trustee
Dated: By:
----------------------- -----------------------------------
W. Xxxx Xxxxxx
Trustee
7
MLS Family Partnership LLLP
By: The Xxxxxx Xxxxxxxxx Trust
General Partner
Dated: By:
--------------------- -----------------------------------
Xxxx X. Xxxxxxxxx
Trustee
Dated: By:
--------------------- -----------------------------------
Xxxx X. Xxxxxxx
Trustee
8
FOUNDER SIGNATURES
THE X. XXXXXXXXX GROUP
Dated:
--------------------- -----------------------------------
Xxxx X. Xxxxxxxxx
9
FOUNDER SIGNATURES
THE XXXXXXXX GROUP
XXXXXXXX LIMITED PARTNERSHIP
By: Xxxxxx Xxxxxxxx Trust
General Partner
Dated: By:
------------------- ---------------------------------
Xxxxxx X. Xxxxxxxx
Trustee
XXXXXX X. XXXXXXXX REVOCABLE TRUST
Dated: By:
------------------- ---------------------------------
Xxxxxx X. Xxxxxxxx
Trustee
Dated:
------------------- -------------------------------------
Xxxxxx X. Xxxxxxxx
Dated: *
------------------- -------------------------------------
Xxxxxx X. Xxxxxxxx
Dated: *
------------------- -------------------------------------
Xxx Xxxxxxxx
Dated: *
------------------- -------------------------------------
Xxxxx Xxxxxxx Xxxx
10
Dated: *
------------------- -------------------------------------
Xxxxxxxx Xxxxx
* by Xxxxxx X. Xxxxxxxx Attorney-in-Fact
11
FOUNDER SIGNATURES
THE XXXXXXX GROUP
Dated: *
------------------- -------------------------------------
Xxxxxx X. Xxxxxxx
XXXXXXX COMPANY,
a Wyoming general partnership
Dated: By:
------------------- ---------------------------------
Xxxxxx X. Xxxxxxx
General Partner
XXXXXX & XXXXXXX COMPANY,
a Wyoming trust
Dated: By: *
------------------- ---------------------------------
Xxxxxx X. Xxxxxxx, Xx.
Trustee
XXXXX X. XXXXXXX LIVING TRUST
a Wyoming trust
Dated: By:
------------------- ---------------------------------
Xxxxx X. Xxxxxxx
Trustee
XXXX X. XXXXXXX LIVING TRUST
a Wyoming trust
Dated: By:
------------------- ---------------------------------
Xxxx X. Xxxxxxx
Trustee
* by Xxxxxx X. Xxxxxxx Attorney-in-Fact
12
EXHIBIT 7.9
AGREEMENT REGARDING OLD UNITED
This Agreement Regarding Old United (this "Agreement"), dated as of
_________ __, 2002, is entered into among UnitedGlobalCom, Inc., a Delaware
corporation that upon the effectiveness of the Merger described under
"Background" below shall be renamed UGC, Inc. ("Old United"), Liberty Media
Corporation, a Delaware corporation, and Liberty Global, Inc., a Delaware
corporation ("Liberty Global").
Background
The parties hereto have entered into an
Agreement and Plan of
Restructuring and Merger, dated as of November [__], 2001 (the "Merger
Agreement"), among Old United, New UnitedGlobalCom, Inc., a Delaware corporation
that at the effective time of the Merger shall be renamed UnitedGlobalCom, Inc.
("New United"), United/New United Merger Sub, Inc., a Delaware corporation
("Merger Sub"), Liberty, Liberty Media International, Inc., a Delaware
corporation ("LMI"), Liberty Global, and each Person indicated as a "Founder" on
the signature pages thereto. Subject to the terms and conditions set forth
therein, the Merger Agreement provides for the merger of Merger Sub with and
into Old United, with Old United as the surviving entity in such merger (the
"Merger"), among other transactions. It is a condition to the consummation of
the transactions contemplated by the Merger Agreement, including without
limitation the Merger, that Old United, Liberty and Liberty Global each execute
and deliver this Agreement.
Agreement
In consideration of the foregoing premises and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
Section 1. Certain Definitions. In this Agreement, the following terms
shall have the following meanings:
Affiliate. When used with reference to a specified Person, any Person
who directly or indirectly through one or more intermediaries, Controls, is
Controlled by, or is under common Control with, the Person specified, provided
that (i) no officer or director of a Person, or any Affiliate of such officer or
director, investing for his, her or its own account or otherwise acting in his,
her or its individual capacity, and no director of a Person, or any Affiliate of
such director, acting in his, her or its capacity as an officer, director,
trustee, representative or agent of a Person that is not an Affiliate of the
specified Person, and in each case not in concert with or at the direction or
request of, such specified Person shall be deemed to be an Affiliate of such
specified Person for purposes of this Agreement; (ii) no Liberty Party shall be
deemed to be an Affiliate of New United or Old United and none of New United,
Old United or their respective Controlled Affiliates shall be deemed to be an
Affiliate of a Liberty Party, (iii) any Person in which New United, directly or
indirectly, Beneficially Owns 50% or more of the equity securities, without
regard to voting power in the election of directors, shall (without limiting the
generality of this
definition) be deemed to be an Affiliate of New United and
(iv) any Person in which Old United, directly or indirectly, Beneficially Owns
50% or more of the equity securities, without regard to voting power in the
election of directors, shall (without limiting the generality of this
definition) be deemed to be an Affiliate of Old United.
Agreement. As defined in the preamble.
Beneficial Ownership and derivative terms. As determined pursuant to
Rule 13d-3 and Rule 13d-5 under the Exchange Act and any successor regulation,
except that in determining Beneficial Ownership, without duplication, (i) equity
securities that may be acquired pursuant to Rights to acquire equity securities
that are exercisable more than sixty days after a date shall nevertheless be
deemed to be Beneficially Owned, and (ii) except for purposes of the definition
of "Change of Control," (x) Beneficial Ownership, if any, arising solely as a
result of being a party to a Transaction Agreement or the Merger Agreement shall
be disregarded, and (y) Beneficial Ownership, if any, arising solely from being
a member of a Group shall be disregarded.
Change of Control. Any (a) change in the direct or indirect record or
Beneficial Ownership of any of the equity securities of New United, Old United
or any of their respective Affiliates, (b) merger, consolidation, statutory
share exchange or other transaction involving New United, Old United or any of
their respective Affiliates or (c) change in the composition of the board of
directors or other governing body of New United, Old United or any of their
respective Affiliates.
Change of Control Covenant. Any covenant, agreement or other provision
(excluding requirements imposed by Law) pursuant to which the occurrence or
existence of a Change of Control would result in a violation or breach of,
constitute (with or without due notice or lapse of time or both) or permit any
Person to declare a default or event of default under, give rise to any right of
termination, cancellation, amendment, acceleration, repurchase, prepayment or
repayment or to increased payments under, give rise to or accelerate any
material obligation (including any obligation to, or to offer to, repurchase,
prepay, repay or make increased payments) or result in the loss or modification
of any material right or benefit under, or result in any Lien or give any Person
the right to obtain any Lien on any material asset pursuant to, any Contract to
which New United, Old United or any of their respective Affiliates is or becomes
a party or to which New United, Old United, any of their respective Affiliates
or any of their respective material assets are or become subject or bound.
Common Stock. The New United Class A Stock, the New United Class B
Stock and the New United Class C Stock.
Contract. Any note, bond, indenture, debenture, security agreement,
trust agreement, Lien, mortgage, lease, contract, license, franchise, permit,
guaranty, joint venture agreement, or other agreement, instrument,
understanding, commitment or obligation, oral or written.
Control and derivative terms. The possession, directly or indirectly,
of the power to direct or cause the direction of the management and policies of
another Person, whether through the ownership of voting securities, by contract
or otherwise.
2
Controlled Affiliate. When used with reference to a specified Person,
an Affiliate of such Person that such Person directly, or through one or more
intermediaries, Controls; provided that, (a) none of New United and its
Controlled Affiliates or Old United and its Controlled Affiliates shall be
deemed to be a Controlled Affiliate of a Liberty Party, (b) any Person in which
New United, directly or indirectly, Beneficially Owns 50% or more of the equity
securities, without regard to voting power in the election of directors, shall
(without limiting the generality of this definition) be deemed to be a
Controlled Affiliate of New United and (c) any Person in which Old United,
directly or indirectly, Beneficially Owns 50% or more of the equity securities,
without regard to voting power in the election of directors, shall (without
limiting the generality of this definition) be deemed to be a Controlled
Affiliate of New United.
Current Bonds. As defined in the New United Charter as in effect on the
date hereof.
Equity Securities. The Common Stock and any other securities hereafter
issued by New United that are entitled to vote generally in the election of
directors.
Exchange Act. The Securities Exchange Act of 1934, as amended, and the
rules and regulations thereunder.
Founders. As defined in the Stockholders Agreement.
HSR Act. The Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as
amended.
Governmental Authority. Any U.S. federal, state or local or any foreign
court, governmental department, commission, authority, board, bureau, agency or
other instrumentality.
Group. As defined in Section 13(d) of the Exchange Act and the rules
and regulations thereunder, but the existence of the Transaction Agreements and
the Merger Agreement shall be disregarded in determining whether a Group exists.
Judgment. Any order, writ, injunction, award, judgment, ruling or
decree of any Governmental Authority.
Law. Any U.S. federal, state or local or any foreign statute, code,
ordinance, decree, rule, regulation or general principle of common or civil law
or equity.
License. Any license, franchise, authorization, permit, certificate,
variance, exemption, concession, consent, lease, right of way, easement,
instrument, order and approval, domestic or foreign, of any Governmental
Authority.
Lien. Any mortgage, pledge, lien, encumbrance, charge or security
interest.
Liberty. Liberty Media Corporation, a Delaware corporation, and any
successor (by merger, consolidation, transfer or otherwise) to all or
substantially all of its assets.
Liberty Global. As defined in the preamble.
Liberty Newco. As defined in the definition of "Liberty Restructuring."
3
Liberty Parties. Liberty and Liberty Global.
LMI. As defined in the "Background" above.
Merger. As defined under "Background" above.
Merger Agreement. As defined under "Background" above.
Merger Sub. As defined under "Background" above.
New United. As defined under "Background" above.
New United Bylaws. The Bylaws of New United, as such Bylaws may be
amended from time to time in accordance with the New United Charter, such Bylaws
and the Stockholders Agreement.
New United Charter. The Restated Certificate of Incorporation of New
United as filed with the Secretary of State of the State of Delaware on
__________, 2002, as it may be amended from time to time.
New United Class A Stock. The Class A Common Stock, par value $0.01 per
share, of New United.
New United Class B Stock. The Class B Common Stock, par value $0.01 per
share, of New United.
New United Class C Stock. The Class C Common Stock, par value $0.01 per
share, of New United.
Permitted Transferee. Any Person Controlled by Liberty.
Person. Any individual, corporation, limited liability company,
partnership, joint venture, Governmental Authority, business association or
other entity.
Restriction. With respect to any capital stock, partnership interest,
membership interest in a limited liability company or other equity interest or
security, any voting or other trust or agreement, option, warrant, preemptive
right, right of first offer, right of first refusal, escrow arrangement, proxy,
buy-sell agreement, power of attorney or other Contract and any License or
Judgment that, conditionally or unconditionally, (a) grants to any Person the
right to purchase or otherwise acquire, or obligates any Person to sell or
otherwise dispose of or issue, or otherwise results or, whether upon the
occurrence of any event or with notice or lapse of time or both or otherwise,
may result in any Person acquiring, (i) any of such capital stock or other
equity interest or security; (ii) any of the proceeds of, or any distributions
paid or that are or may become payable with respect to, any of such capital
stock or other equity interest or security; or (iii) any interest in such
capital stock or other equity interest or security or any such proceeds or
distributions; (b) restricts or, whether upon the occurrence of any event or
with notice or lapse of time or both or otherwise, is reasonably likely to
restrict the transfer or voting of, or the exercise of any rights or the
enjoyment of any benefits arising by reason of ownership of, any such capital
4
stock or other equity interest or security or any such proceeds or
distributions; or (c) creates or, whether upon the occurrence of any event or
with notice or lapse of time or both or otherwise, is reasonably likely to
create a Lien or purported Lien affecting such capital stock or other equity
interest or security, proceeds or distributions.
Rights. When used with respect to a specified Person, securities of
such Person (which may include equity securities) that (contingently or
otherwise) are exercisable, convertible or exchangeable for or into equity
securities of such Person (with or without consideration) or that carry any
right to subscribe for or acquire equity securities of such Person or securities
exercisable, convertible or exchangeable for or into equity securities of such
Person.
Standstill Agreement. That certain Standstill Agreement dated as of the
date hereof among United and the Liberty Parties.
Stockholders Agreement. That certain Stockholders Agreement dated as of
the date hereof among New United, the Liberty Parties and the Founders.
Subsidiary. As defined in the Standstill Agreement.
Transaction Agreements. As defined in the Stockholders Agreement.
Transfer. As defined in the Stockholders Agreement.
Section 2. Certain Covenants.
(a) Without limitation of any other applicable provision hereof or of
any other Transaction Agreement, without the prior written consent of Liberty,
which consent may be granted or withheld in Liberty's sole discretion, Old
United will not take any action and will not permit any action to be taken on
its behalf, and will use its best commercially reasonable efforts to prevent any
action from being taken by or on behalf of any of its Affiliates, that would
result in New United, Old United or any of their respective Affiliates being
subject to or bound by any Change of Control Covenant, unless any Change of
Control involving or caused by the action of Liberty, Liberty Global, LMI or any
of their respective Affiliates (other than a transfer by any of the foregoing to
an unaffiliated third party of Control of New United, if such Control is
obtained in the future) is exempted from the application and effects of such
Change of Control Covenant. Old United will not be deemed to be in breach of the
foregoing as a result of its or its Affiliates entering into or maintaining in
the ordinary course of business a License granted by a Governmental Authority
that includes a Change of Control Covenant provided that (i) such License is of
the kind and nature that customarily requires approval of the Governmental
Authority granting the same for a Change of Control, (ii) the applicable Change
of Control Covenant includes only terms customarily imposed by such Governmental
Authority in similar circumstances, (iii) the maximum penalty for breach of such
Change of Control Covenant is termination of the applicable License, and (iv)
Old United used its best commercially reasonable efforts to obtain the exemption
from the application and effects of such Change of Control Covenant contemplated
by the preceding sentence. Without the prior written consent of Liberty, which
consent may be granted or withheld in Liberty's sole discretion, Old United will
not take any action or permit any action to be taken that would, or fail to take
any action or permit any action to be omitted where such failure or omission
would, extend or perpetuate the applicability
5
of any Change of Control Covenant in effect as of May 25, 2001 under the Current
Bonds beyond the maturity date in effect as of May 25, 2001 of the Current Bonds
to which they relate. Old United will use its best commercially reasonable
efforts to take such actions as will cause the conditions necessary to permit
the conversion in full of the New United Class C Stock into New United Class B
Stock to be satisfied.
(b) Without limitation of any other applicable provision hereof or of
any other Transaction Agreement, without the prior written consent of Liberty,
Old United shall not, and shall not permit any of its Controlled Affiliates to,
(i) (A) enter into, or issue, assume or adopt, any Contract that would be or
that purports to be binding upon Liberty or any of its Affiliates or any of
their respective assets, or (B) enter into, or issue, assume or adopt, any
material Contract in respect of which any act or omission of Liberty or any of
its Affiliates would result in a violation or breach thereof, or constitute
(with or without due notice or lapse of time or both), or permit any Person to
declare, a default or event of default thereunder, or give rise to any right of
termination, cancellation, amendment, acceleration, repurchase, prepayment or
repayment or to increased payments thereunder, or give rise to or accelerate any
material obligation (including, without limitation, any obligation to, or to
offer to, repurchase, prepay, repay or make increased payments) or result in the
loss or modification of any material rights or benefits thereunder, or result in
any Lien or Restriction on any of the material assets of, or otherwise have any
adverse effect on, Old United or any of its Affiliates, or (ii) amend or modify
any Contract described in clause (i) of this sentence; provided however, that
this Section 2(b) shall not restrict Old United from subjecting itself or any of
its Controlled Affiliates to a Change of Control Covenant to the extent
permitted under Section 2(a).
Section 3. Termination. This Agreement shall terminate as to any
Liberty Party the voting power of whose Beneficially Owned Equity Securities
(together with that of its Permitted Transferees and Controlled Affiliates) is
reduced to 10% or less of the voting power of equity securities in Old United
that such Liberty Party (together with its Permitted Transferees and Controlled
Affiliates) Beneficially Owned as of June 25, 2000. For purposes of this Section
3, the voting power of outstanding shares of New United Class C Stock, if any,
shall be calculated as if such shares had been converted into shares of New
United Class B Stock.
Section 4. Applicable Law, Jurisdiction. This Agreement shall be
governed by Colorado law without regard to conflicts of law rules. The parties
hereby irrevocably submit to the jurisdiction of any Colorado State or United
States Federal court sitting in Colorado over any action or proceeding arising
out of or relating to this Agreement or any agreement contemplated hereby, and
the undersigned hereby irrevocably agree that all claims in respect of such
action or proceeding may be heard and determined in such State or Federal court.
The undersigned further waive any objection to venue in such State and any
objection to any action or proceeding in such State on the basis of a
non-convenient forum. Each party hereby IRREVOCABLY WAIVES ANY RIGHT TO A TRIAL
BY JURY in any proceeding brought with respect to this Agreement or the
transactions contemplated hereby.
Section 5. Remedies. Each of the parties acknowledges and agrees that
in the event of any breach of this Agreement, the nonbreaching party would be
irreparably harmed and could not be made whole by monetary damages. Accordingly,
the parties to this Agreement, in
6
addition to any other remedy to which they may be entitled hereunder or at law
or in equity, shall be entitled to compel specific performance of this
Agreement.
Section 6. Headings. The headings in this Agreement are for convenience
only and are not to be considered in interpreting this Agreement.
Section 7. Notices. All notices and other communications hereunder
shall be delivered to the parties hereto in the same manner as set forth in the
Merger Agreement.
Section 8. Severability. The invalidity or unenforceability of any
provision of this Agreement in any application shall not affect the validity or
enforceability of such provision in any other application or the validity or
enforceability of any other provision.
Section 9. Waivers and Amendments. No waiver of any provision of this
Agreement shall be deemed a further or continuing waiver of that provision or a
waiver of any other provision of this Agreement. This Agreement may not be
amended except in a writing signed by all parties.
Section 10. Interpretation. As used herein, except as otherwise
indicated herein or as the context may otherwise require, the words "include,"
"includes" and "including" are deemed to be followed by "without limitation"
whether or not they are in fact followed by such words or words of like import;
the words "hereof," "herein," "hereunder" and comparable terms refer to the
entirety of this Agreement and not to any particular article, section or other
subdivision hereof or Appendix hereto; any pronoun shall include the
corresponding masculine, feminine and neuter forms; the singular includes the
plural and vice versa; references to any agreement or other document are to such
agreement or document as amended and supplemented from time to time; references
to "Section" or another subdivision are to a section or subdivision hereof; and
all references to "the date hereof," "the date of this Agreement" or similar
terms (but excluding references to the date of execution hereof) refer to the
date first above written, notwithstanding that the parties may have executed
this Agreement on a later date.
Section 11. Rules of Construction. The parties hereto agree that they
have been represented by counsel during the negotiation, preparation and
execution of this Agreement and, therefore, waive the application of any law,
regulation, holding or rule of construction providing that ambiguities in an
agreement or other document will be construed against the party drafting such
agreement or document.
Section 12. Counterpart Execution. This Agreement may be executed in
any number of counterparts, each of which shall be deemed an original but all of
which will constitute a single agreement.
Section 13. Parties in Interest. Nothing in this Agreement, express or
implied, is intended to confer upon any Person other than the parties hereto,
their Permitted Transferees, in the case of the Liberty Parties, and their
permitted successors and assigns, any benefits, rights or remedies. Neither this
Agreement nor the rights or obligations of any party may be assigned or
delegated (other than, in the case of a Liberty Party, to a Permitted
Transferee) by operation of law or otherwise without the prior written consent
of Liberty and Old United. Notwithstanding the foregoing, any Person that
succeeds to Liberty's rights and obligations under the
7
Stockholders Agreement and the Standstill Agreement shall be entitled, as an
express third party beneficiary, to all of the rights of Liberty hereunder to
the same extent as if all references to Liberty herein referred to such Person.
8
IN WITNESS WHEREOF, the parties hereto have executed as of the date first set
forth above.
UNITEDGLOBALCOM, INC.,
a Delaware corporation
By:
---------------------------------
Name:
---------------------------------
Title:
---------------------------------
LIBERTY MEDIA CORPORATION,
a Delaware corporation
By:
---------------------------------
Name:
---------------------------------
Title:
---------------------------------
LIBERTY GLOBAL, INC.,
a Delaware corporation
By:
---------------------------------
Name:
---------------------------------
Title:
---------------------------------
9
EXHIBIT 7.9(A)
AGREEMENT REGARDING ADDITIONAL COVENANTS
This Agreement Regarding Additional Covenants (this "Agreement") is
entered into as of ________ __, 2002, among UnitedGlobalCom, Inc., a Delaware
corporation formerly known as New UnitedGlobalCom, Inc. ("United"), and Liberty
Media Corporation, and Liberty Global, Inc. ("Liberty Global"), each of which is
a Delaware corporation.
Background
Pursuant to the Agreement and Plan of Restructuring and Merger, dated
as of December 3, 2001 (the "Merger Agreement"), among United, Liberty, Liberty
Media International, Inc., a Delaware corporation ("LMI"), Liberty Global, the
Founders (as defined therein), UGC, Inc., a Delaware corporation formerly known
as UnitedGlobalCom, Inc. ("Old United"), et al., Liberty and Liberty Global have
acquired Beneficial Ownership of shares of Class C Common Stock, par value $.01
per share, of United. As required by the Merger Agreement, the parties hereto
are entering into this Agreement.
Agreement
Section 1. Certain Definitions. In this Agreement, the following terms
shall have the following meanings:
3-09 Person. As defined in Section 2(e).
Affiliate. When used with reference to a specified Person, any Person
who directly or indirectly through one or more intermediaries, Controls, is
Controlled by, or is under common Control with, the Person specified, provided
that (i) no officer or director of a Person, or any Affiliate of such officer or
director, investing for his, her or its own account or otherwise acting in his,
her or its individual capacity, and no director of a Person, or any Affiliate of
such director, acting in his, her or its capacity as an officer, director,
trustee, representative or agent of a Person that is not an Affiliate of the
specified Person, and in each case not in concert with or at the direction or
request of, such specified Person shall be deemed to be an Affiliate of such
specified Person for purposes of this Agreement; (ii) no Liberty Party shall be
deemed to be an Affiliate of United and none of United and its Controlled
Affiliates shall be deemed to be an Affiliate of a Liberty Party and (iii) any
Person in which United, directly or indirectly, Beneficially Owns 50% or more of
the equity securities, without regard to voting power in the election of
directors, shall (without limiting the generality of this definition) be deemed
to be an Affiliate of United.
Belmarken Loan Agreements. As defined in the Merger Agreement.
Belmarken Notes. As defined in the Merger Agreement.
Beneficial Ownership and derivative terms. As defined in the Standstill
Agreement.
Board. The Board of Directors of United.
Business Day. As defined in the Standstill Agreement.
Change of Control Covenant. As defined in the Stockholders Agreement.
Class C Director. As defined in the United Charter.
Commission. As defined in Section 2(e).
Contract. Any note, bond, indenture, debenture, security agreement,
trust agreement, Lien, mortgage, lease, contract, license, franchise, permit,
guaranty, joint venture agreement, or other agreement, instrument,
understanding, commitment or obligation, oral or written.
Control and derivative terms. The possession, directly or indirectly,
of the power to direct or cause the direction of the management and policies of
another Person, whether through the ownership of voting securities, by contract
or otherwise.
Controlled Affiliate. When used with reference to a specified Person,
any Affiliate of such Person that such Person directly, or indirectly through
one or more intermediaries, Controls; provided that, (a) none of United and its
Controlled Affiliates shall be deemed to be a Controlled Affiliate of a Liberty
Party and (b) any Person in which United, directly or indirectly, beneficially
owns 50% or more of the equity securities, without regard to voting power in the
election of directors, shall (without limiting the generality of this
definition) be deemed to be a Controlled Affiliate of United.
Equity Securities. The common stock of United and any other securities
hereafter issued by United that are entitled to vote generally in the election
of directors.
Exchange Act. The Securities Exchange Act of 1934, as amended, and the
rules and regulations thereunder.
GAAP. As defined in Section 2(e)
Governmental Authority. As defined in the Stockholders Agreement.
HSR Act. The Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as
amended.
Liberty. Liberty Media Corporation, a Delaware corporation, and any
successor (by merger, consolidation, transfer or otherwise) to all or
substantially all of its assets
Liberty Director. As defined in the Standstill Agreement.
Liberty Global. As defined in the preamble.
Liberty Parties. Liberty and Liberty Global and including any Permitted
Transferee of a Liberty Party who hereafter becomes bound by or who is required
to become bound by the
2
Stockholders Agreement for so long as such Person is or is required to be so
bound. LMI, Liberty Global and any such Permitted Transferee will each cease to
be a Liberty Party at such time as such Person is no longer a Controlled
Affiliate of Liberty.
Liberty Person. As defined in Section 2(e).
Lien. Any mortgage, pledge, lien, encumbrance, charge, or security
interest.
LMI. As defined under "Background" on the first page of this Agreement.
Merger Agreement. As defined under "Background" on the first page of
this Agreement.
Non-Complying Person. As defined in Section 2(e).
Old United. As defined under "Background" on the first page of this
Agreement.
Permitted Transferee. Liberty and any Person Controlled by Liberty.
Person. Person shall mean any individual, firm, corporation,
partnership, limited liability company, trust, joint venture, or other entity,
and shall include any successor (by merger or otherwise) of such entity.
Restriction. As defined in the Stockholders Agreement.
SAS 543. As defined in Section 2(e).
Standstill Agreement. That certain Standstill Agreement dated as of the
date hereof among United and the Liberty Parties.
Stockholders Agreement. The Stockholders Agreement dated as of the date
hereof among United, the Liberty Parties, and certain other stockholders of
United.
Subsidiary. As defined in the Standstill Agreement.
Transaction Agreements. As defined in the Stockholders Agreement.
Transfer. As defined in the Stockholders Agreement.
United Bylaws. The Bylaws of United, as such Bylaws may be amended from
time to time in accordance with the United Charter, such Bylaws and this
Agreement.
United Charter. The Restated Certificate of Incorporation of United as
filed with the Secretary of State of the State of Delaware on __________, 2002,
as it may be amended from time to time.
Section 2. Additional Covenants.
3
(a) Without limitation of any other applicable provision hereof or of
any other Transaction Agreement, without the prior written consent of Liberty,
United shall not, and shall not permit any of its Controlled Affiliates to,
(i)(A) enter into, or issue, assume or adopt, any Contract that would be or that
purports to be binding upon Liberty or any of its Affiliates or any of their
respective assets, or (B) enter into, or issue, assume or adopt any material
Contract in respect of which any act or omission of Liberty or any of its
Affiliates would result in a violation or breach thereof, or constitute (with or
without due notice or lapse of time or both), or permit any Person to declare, a
default or event of default thereunder, or give rise to any right of
termination, cancellation, amendment, acceleration, repurchase, prepayment or
repayment or to increased payments thereunder, or give rise to or accelerate any
material obligation (including, without limitation, any obligation to, or to
offer to, repurchase, prepay, repay or make increased payments) or result in the
loss or modification of any material rights or benefits thereunder, or result in
any Lien or Restriction on any of the material assets of, or otherwise have any
material adverse effect on, United or any of its Affiliates or (ii) amend or
modify any Contract described in clause (i) of this sentence; provided however,
that this Section 2(a) shall not restrict United or any of its Controlled
Affiliates from subjecting itself or any of its Controlled Affiliates to a
Change of Control Covenant permitted under Section 3(b) of the Stockholders
Agreement.
(b) Without limitation of any other applicable provision hereof or of
any other Transaction Agreement, United shall not, and shall not permit any of
its Subsidiaries to, directly or indirectly, effect any transaction or enter
into any Contract of any kind whatsoever between or among United or any of its
Subsidiaries, on the one hand, and Old United or any of its Controlled
Affiliates, on the other hand, or agree or commit to do any of the foregoing,
unless the proposed transaction or Contract has first been approved by the Board
by the vote of not less than a majority of the members thereof, which
affirmative vote shall include the affirmative vote of a majority of the Class C
Directors or Liberty Directors, as the case may be, or by unanimous written
consent.
(c) Without limitation of any other applicable provision hereof or of
any other Transaction Agreement, United shall not, and shall not permit any of
its Controlled Affiliates to, directly or indirectly, in whole or in part, sell,
assign, transfer, exchange, contribute, pledge, encumber, grant any option with
respect to or otherwise dispose of (each, a "Disposition") any of the Belmarken
Notes or any interest therein, or any rights under or interest in the Belmarken
Loan Agreements (including, without limitation, by Disposition of an interest in
a Person that holds any of the foregoing), or agree to do any of the foregoing,
unless the proposed Disposition has first been (i) reviewed by the Board, (ii)
in the case of a proposed Disposition to any Affiliate of United (including,
without limitation, Old United or any of its Affiliates), approved by the Board
by the vote of not less than a majority of the members thereof, which
affirmative vote shall include the affirmative vote of a majority of the Class C
Directors or Liberty Directors, as the case may be, or by unanimous written
consent, and (iii) in the case of any other proposed Disposition, approved by
the Board.
(d) Without limitation of any other applicable provision hereof or any
other Transaction Agreement, United shall not effect any amendment, alteration,
restatement or repeal of Section 3.12 of the United Bylaws unless the proposed
amendment, alteration, restatement or repeal has first been approved by the
Board by the vote of not less than a majority of the
4
members thereof, which affirmative vote shall include the affirmative vote of a
majority of the Class C Directors or Liberty Directors, as the case may be, or
by unanimous written consent.
(e) Without limitation of any other applicable provision hereof or any
other Transaction Agreement, United hereby agrees as follows:
(i) United shall provide to Liberty:
(A) within 45 days after the end of each fiscal year of
United, a preliminary balance sheet, income statement and consolidated
statement of stockholders equity (deficit) of United and its
subsidiaries for such fiscal year;
(B) within 60 days after the end of each fiscal year of
United, a final balance sheet, income statement and consolidated
statement of stockholders equity (deficit) of United and its
subsidiaries for such fiscal year;
(C) within 75 days after the end of each fiscal year of
United, draft consolidated financial statements, including related
footnotes, of United and its subsidiaries for such fiscal year and a
"Management's Discussion and Analysis of Results of Operations and
Financial Condition" (in such form as would be included in a Form 10-K
filed under the Exchange Act);
(D) no later than the 3rd business day prior to the day on
which United's Form 10-K shall be filed with the Securities and
Exchange Commission (the "Commission") (but, in any event, no later
than the 87th day following the end of each fiscal year of United),
final audited consolidated financial statements, including related
footnotes, of United and its subsidiaries for such fiscal year, which
shall be provided to Liberty in paper form and electronic format for
inclusion in Liberty's Form 10-K for the relevant fiscal year in the
same form in which United shall file the same with its Form 10-K for
the relevant fiscal year, and a "Management's Discussion and Analysis
of Results of Operations and Financial Condition" (in such form as
would be included in a Form 10-K filed under the Exchange Act);
(E) within 20 days after the end of each of the first three
fiscal quarters of each fiscal year of United, a preliminary income
statement of United and its subsidiaries for such fiscal quarter;
(F) within 35 days after the end of each of the first three
fiscal quarters of each fiscal year of United, a final balance sheet,
income statement and consolidated statement of stockholders equity
(deficit) of United and its subsidiaries for such fiscal quarter;
(G) within 40 days after the end of each of the first three
fiscal quarters of each fiscal year of United, draft financial
statements, including related footnotes, of United and its subsidiaries
for such fiscal quarter, which shall include final numbers that have
been reviewed in accordance with Statement of Auditing Standards No. 71
("SAS 71") (however, it being expressly understood that such auditors
will not be required to
5
issue a SAS 71 review report in accordance with such review) by
United's auditors, and a "Management's Discussion and Analysis of
Results of Operations and Financial Condition" (in such form as would
be included in a Form 10-Q filed under the Exchange Act); and
(H) within 25 days after the end of each month, (1) United's
internal financial reporting package for the prior month, which shall
report, at a minimum, revenue and earnings before interest, taxes,
depreciation and amortization (including, without limitation, a
budget-to-actual comparison) for United's major operating businesses,
and (2) an operational statistics report, which shall include
non-financial operating data for United's major operating businesses,
such as video, telephony and data subscribers, total revenue generating
units, homes passed, penetration and other operational statistics used
by the management of United to review United's operating results,
together with such management's comments regarding any significant
financial and non-financial variances.
Each of the financial statements referred to clauses (A) through (G) of this
Section 2(e)(i) shall be prepared in accordance with generally accepted
accounting principles in the United States, consistently applied ("GAAP"), and
shall comply in all material respects with the published rules and regulations
of the Commission that apply to the preparation of such interim financial
statements (pursuant to Article 10 of Regulation S-X) and annual financial
statements. In addition, United shall provide to Liberty copies of any
certificates certifying compliance by United or any of its subsidiaries with its
debt covenants under any indebtedness at the same time as such certificates are
supplied to any creditor or bank or to any trustee for distribution to the
holders of such indebtedness.
(ii) United shall use its best efforts to cause its auditors
to cooperate in all reasonable respects with Liberty's auditors to enable them,
as principal auditor, to perform and otherwise comply with applicable auditing
procedures prescribed by Statement on Auditing Standards, Section 543,
including, without limitation:
(A) confirming in writing, within 60 days after the
end of each fiscal year of Liberty and within 40 days after the end of
each of the first three fiscal quarters of each fiscal year of Liberty,
the independence of United's auditors under the requirements of The
American Institute of Certified Public Accountants and the Commission;
(B) meeting, with United's management present or,
with the prior approval of United's management, without United's
management present, during the first three fiscal quarters of each
fiscal year of United, prior to the 5th day before a filing is due with
the Commission for the immediately preceding fiscal quarter, with
Liberty's auditors to discuss the review procedures followed by
United's auditors and the results thereof;
(C) meeting, after United's auditors have completed
their SAS 71 review of United's third quarter results and preliminary
audit testing and have developed their final year end audit plan
(expected to be in early to mid December of each calendar year), with
United's management present or, with the prior approval of United's
6
management, without United's management present, with Liberty's
auditors to review the audit plan and working papers, including the
understanding of internal control, the assessment of control risk, any
audit testwork supporting significant transactions and any accounting
memoranda supporting the application of GAAP, of United's auditors (it
being agreed that Liberty's auditors shall have the right to issue
specific instructions to United's auditors as to the scope of their
audit work, if deemed necessary in the sole discretion of Liberty's
auditors);
(D) meeting, with United's management present or,
with the prior approval of United's management, without United's
management present, within 65 days after the end of each fiscal year of
Liberty, with Liberty's auditors to discuss the audit procedures
followed by United's auditors and the results thereof and to review the
working papers of United's auditors, including the understanding of
internal control, the assessment of control risk, any audit testwork
supporting significant transactions and any accounting memoranda
supporting the application of GAAP, including only those items set
forth in this item (D) and in item (C) immediately above which were
prepared or finalized subsequent to the completion by United's auditors
of their SAS 71 interim review of United's third quarter results and
completion by United's auditors of their preliminary audit testing; and
(E) making available for review by Liberty and its
auditors, promptly upon the request of Liberty, the working papers of
Old United for the years ended December 31, 2001 and December 31, 2000
to assist in the determination of the appropriate purchase accounting
adjustments required to be recorded by Liberty to reflect its
acquisition of shares of Old United and/or United, as applicable.
(iii) United shall cause its management personnel to (A) meet,
within 70 days after the end of each fiscal year of Liberty, with Liberty's
auditors to discuss the accounts of United and (B) cooperate with Liberty's
auditors in any supplemental tests of such accounts (it being agreed that the
determination of the extent of additional procedures, if any, to be applied
shall rest solely with Liberty's auditors).
(iv) United shall use its best efforts to cause its auditors
to provide to Liberty such auditors' written consent to the inclusion of or
reliance on their report in any filing made by Liberty with the Commission
requiring such consent not more than 24 hours after being provided with a final
version of such filing, which efforts shall include, without limitation, the
timely provision by United to its auditors of any letters of representations
required by such auditors in connection with the delivery of their consent to
Liberty and timely provision by Liberty to United and its auditors of
preliminary versions of such filing.
(v) United shall use its best efforts to (A) cause each of its
"significant subsidiaries" (as such term is defined in Rule 1-02 of Regulation
S-X) and each of its affiliates (1) which is accounted for using the equity
method of accounting and (2) with respect to which Liberty must provide
financial disclosure pursuant to Rule 3-09 of Regulation S-X, in each case
whether currently owned or hereafter acquired (each such significant subsidiary
and affiliate, a "3-09 Person"), to provide to Liberty financial statements
prepared in accordance with GAAP
7
that meet the requirements of Regulation S-X for inclusion in any filing made by
Liberty with the Commission requiring such financial statements prior to the 5th
day before such filing shall be made (such filing date to be determined in the
sole discretion of Liberty), and (B) cause the auditors of any such 3-09 Person
to provide to Liberty such auditors' written consent to the inclusion of or
reliance on their report in any such filing not more than 24 hours after being
provided with a final version of such filing, which efforts shall include,
without limitation, causing such 3-09 Person to provide to its auditors, on a
timely basis, any letters of representations required by such auditors in
connection with the delivery of their consent to Liberty and timely provision by
Liberty to such other auditors of preliminary versions of such filing. The
determination as to whether a Person qualifies as a 3-09 Person shall be made in
the reasonable judgment of Liberty and its auditors.
(vi) United shall not effect any acquisition, merger, exchange
or other transaction pursuant to which United would acquire a Person that would
qualify as a 3-09 Person, unless such Person can provide to Liberty, within the
time frames prescribed by Section 2(e)(v), financial statements prepared in
accordance with GAAP that comply in all respects with Regulation S-X, including,
without limitation, Rule 3-05 of Regulation S-X.
(vii) United shall, and shall use its best efforts to cause
each 3-09 Person to, afford to the officers, employees, counsel, auditors and
other authorized representatives of Liberty ("Liberty Persons") reasonable
access during normal business hours, to its personnel, auditors, books and
records and furnish promptly to such Liberty Persons such financial and
operating data and other information concerning its business, properties,
personnel and affairs as such Liberty Persons will from time to time reasonably
request and instruct the officers, directors, employees, counsel and auditors of
United and each 3-09 Person to discuss business operations, affairs and assets
of United and each 3-09 Person and otherwise fully cooperate with each Liberty
Person in its review of the business and financial affairs of United and each
3-09 Person, in each case to the extent reasonably necessary to enable Liberty
to comply timely with its reporting obligations under the Exchange Act. In
addition, if at any time Liberty and its auditors, in their reasonable judgment,
determine that the financial statements of United or any 3-09 Person (any such
Person, a "Non-Complying Person") were not prepared in accordance with GAAP, do
not comply in all material respects with Regulation S-X or will not be provided
to Liberty within the applicable time frame prescribed by this Section 2(e),
United shall use its best efforts to cause each Non-Complying Person to (A)
suspend the services of its current auditors and (B) afford to the Liberty
Persons access to all books, records and working papers of such Non-Complying
Person's current auditors necessary to enable a new auditor designated by
Liberty to perform a full audit of such Non-Complying Person.
(viii) United shall inform Liberty of any material accounting
or reporting issue arising during the course of United's fiscal year within a
reasonable period of time following the time at which any officer, director,
employee or auditor of United first becomes aware of such issue, if such issue
could, in United's reasonable judgment, materially impact the consolidated
financial statements of Liberty.
(ix) Liberty will bear all costs and expenses incurred (A) by
the Liberty Persons in connection with the exercise of Liberty's rights pursuant
to this Section 2(e) and (B)
8
by any auditors designated by Liberty to perform a full audit of a Non-Complying
Person pursuant to Section 2(e)(vii).
(x) At such time as any other Person to whom Liberty transfers
its voting or economic interest in United (in compliance with all of Liberty's
obligations under the Transaction Documents) becomes obligated to provide in
such Person's filings with the Commission financial disclosure regarding United
or is otherwise required to provide audited financial statements, such Person
will be entitled to all of the rights of Liberty under this Section 2(e).
(xi) Liberty will, and will cause its auditors to, provide the
representations required of a parent company and a parent company's auditors to
the auditors of United, if so requested in accordance with the Statement of
Auditing Standards promulgated by the American Institute of Certified Public
Accountants.
Section 3. Representations and Warranties.
Each of the Liberty Parties, severally and not jointly, on the one
hand, and United, on the other, represent and warrant to each other as of the
date of this Agreement as follows:
(a) Such party has the right, power, legal capacity and authority to
enter into and perform its obligations under this Agreement, and this Agreement
constitutes such party's valid and binding obligation, enforceable against it in
accordance with its terms, subject, as to enforceability, to applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
similar laws affecting creditor's rights and remedies generally, and to general
principles of equity, including principles of commercial reasonableness, good
faith and fair dealing (regardless of whether enforcement is sought in a
proceeding at law or in equity).
(b) Such party has obtained all authorizations, permits, approvals or
consents of any Persons, as well as all authorizations, permits, approvals or
consents of any Governmental Authorities, necessary to enter into and perform
such party's obligations under this Agreement, except as would not, individually
or in the aggregate, adversely affect such party's ability to perform its
obligations under this Agreement.
(c) This Agreement and the transactions it contemplates do not conflict
with any applicable law or any agreement to which such party is a party or
constitute a default under any such agreement, except as would not, individually
or in the aggregate, adversely affect such party's ability to perform its
obligations under this Agreement.
Section 4. Term and Termination. This Agreement shall terminate upon
the termination of the Stockholders Agreement.
Section 5. Remedies. Each of the parties acknowledges and agrees that
in the event of any breach of this Agreement, the nonbreaching party would be
irreparably harmed and could not be made whole by monetary damages. Accordingly,
the parties to this Agreement, in
9
addition to any other remedy to which they may be entitled hereunder or at law
or in equity, shall be entitled to compel specific performance of this
Agreement.
Section 6. Notices. All notices, requests, demands and other
communications required or permitted under this Agreement shall be in writing,
shall be deemed to have been duly given when delivered personally or, sent by
telecopy, or recognized service providing for guaranteed delivery, addressed as
follows:
(a) If to United, to:
UnitedGlobalCom, Inc.
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Attention: President
Fax: (000) 000-0000
with copies to:
UnitedGlobalCom, Inc.
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Attention: General Counsel
Fax: (000) 000-0000
and
Holme Xxxxxxx & Xxxx LLP
0000 Xxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Attention: W. Xxxx Xxxxxx, Esq.
Fax: (000) 000-0000
(b) If to the Liberty Parties, to:
Liberty Media Corporation
00000 Xxxxxxx Xxxx.
Xxxxxxxxx, Xxxxxxxx 00000
Attention: President
Fax: (000) 000-0000
10
with copies to:
Liberty Media Corporation
00000 Xxxxxxx Xxxx.
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxxxx X. Xxxxxxxxx, Esq.
Fax:(000) 000-0000
and
Xxxxx Xxxxx LLP
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxx, Esq.
Fax: (000) 000-0000
or to such other person or address or addresses as Liberty or United shall
specify by notice in accordance with this Section 6. Liberty shall be
responsible for distributing any notices it receives to the Liberty Parties, as
necessary. All notices, requests, demands, waivers and communications shall be
deemed to have been given on the date of delivery or on the first Business Day
after overnight delivery was guaranteed by a recognized delivery service, except
that any change of address shall be effective only upon actual receipt. Written
notice given by telecopy shall be deemed effective when confirmation is received
by the sending party. Delivery shall be deemed to have been made to each Liberty
Party on the date that delivery is made to Liberty at the address specified
above (as it may be changed as provided herein).
Section 7. Entire Agreement. This Agreement, together with the other
Transaction Agreements and the Merger Agreement, contains all the terms and
conditions agreed upon by the parties hereto, and no other agreements, oral or
otherwise, regarding the subject matter hereof shall have any effect unless in
writing and executed by the parties after the date of this Agreement.
Section 8. Applicable Law, Jurisdiction; Waiver of Jury Trial. This
Agreement shall be governed by Colorado law without regard to conflicts of law
rules. The parties hereby irrevocably submit to the jurisdiction of any Colorado
State or United States Federal court sitting in Colorado, and only a State or
Federal Court sitting in Colorado will have any jurisdiction over any action or
proceeding arising out of or relating to this Agreement or any agreement
contemplated hereby, and the undersigned hereby irrevocably agree that all
claims in respect of such action or proceeding shall be heard and determined in
such State or Federal court. The undersigned further waive any objection to
venue in such State and any objection to any action or proceeding in such State
on the basis of a non-convenient forum. Each party hereby IRREVOCABLY WAIVES ANY
RIGHT TO A TRIAL BY JURY in any proceeding brought with respect to this
Agreement or the transactions contemplated hereby.
Section 9. Headings. The headings in this Agreement are for convenience
only and are not to be considered in interpreting this Agreement.
11
Section 10. Counterpart Execution. This Agreement may be executed in
any number of counterparts, each of which shall be deemed an original but all of
which will constitute a single agreement.
Section 11. Parties in Interest. Except as provided in Section 2(e)
nothing in this Agreement, express or implied, is intended to confer upon any
Person other than the parties hereto, their Permitted Transferees, in the case
of the Liberty Parties, and their permitted successors and assigns, any
benefits, rights or remedies. Neither this Agreement nor the rights or
obligations of any party may be assigned or delegated (other than, in the case
of a Liberty Party, to a Permitted Transferee) by operation of law or otherwise
without the prior written consent of Liberty and United. Notwithstanding the
foregoing, any Person that succeeds to Liberty's rights and obligations under
the Stockholders Agreement and the Standstill Agreement shall be entitled, as an
express third party beneficiary, to all of the rights of Liberty hereunder to
the same extent as if all references to Liberty herein referred to such Person.
Section 12. Severability. The invalidity or unenforceability of any
provision of this Agreement in any application shall not affect the validity or
enforceability of such provision in any other application or the validity or
enforceability of any other provision.
Section 13. Waivers and Amendments. No waiver of any provision of this
Agreement shall be deemed a further or continuing waiver of that provision or a
waiver of any other provision of this Agreement. This Agreement may not be
amended except in a writing signed by Liberty and United.
Section 14. Interpretation. As used herein, except as otherwise
indicated herein or as the context may otherwise require, the words "include,"
"includes" and "including" are deemed to be followed by "without limitation"
whether or not they are in fact followed by such words or words of like import;
the words "hereof," "herein," "hereunder" and comparable terms refer to the
entirety of this Agreement and not to any particular article, section or other
subdivision hereof; any pronoun shall include the corresponding masculine,
feminine and neuter forms; the singular includes the plural and vice versa;
references to any agreement or other document are to such agreement or document
as amended and supplemented from time to time; references to any statute or
regulation are to it as amended and supplemented from time to time, and to any
corresponding provisions of successor statutes or regulations; references to
"Article," "Section" or another subdivision are to an article, section or
subdivision hereof; and all references to "the date hereof," "the date of this
Agreement" or similar terms (but excluding references to the date of execution
hereof) refer to the date first above written, notwithstanding that the parties
may have executed this Agreement on a later date. Any reference herein to a
"day" or number of "days" (without the explicit qualification of "Business")
shall be deemed to refer to a calendar day or number of calendar days. If any
action or notice is to be taken or given on or by a particular calendar day, and
such calendar day is not a Business Day, then such action or notice may be taken
or given on the next succeeding Business Day.
Section 15. Rules of Construction. The parties hereto agree that they
have been represented by counsel during the negotiation, preparation and
execution of this Agreement and, therefore, waive the application of any law,
regulation, holding or rule of construction providing
12
that ambiguities in an agreement or other document will be construed against the
party drafting such agreement or document.
[Signature Pages Follow]
13
Executed as of the date first set forth above.
UNITEDGLOBALCOM, INC.,
a Delaware corporation
By:
-------------------------------------------
Name:
Title:
LIBERTY MEDIA CORPORATION,
a Delaware corporation
By:
-------------------------------------------
Name:
Title:
LIBERTY GLOBAL, INC.,
a Delaware corporation
By:
-------------------------------------------
Name:
Title:
EXHIBIT 7.10
STANDSTILL AGREEMENT
This Standstill Agreement (this "Agreement") is entered into as of
_________ __, 2002, among UnitedGlobalCom, Inc., a Delaware corporation
(formerly known as New UnitedGlobalCom, Inc., "United"), and Liberty Media
Corporation and Liberty Global, Inc. ("Liberty Global"), each of which is a
Delaware corporation.
Background
Pursuant to the Agreement and Plan of Restructuring and Merger, dated
as of December 3, 2001 (the "Merger Agreement"), among United, Liberty, Liberty
Media International, Inc., a Delaware corporation ("LMI"), Liberty Global, the
Founders, UGC, Inc., a Delaware corporation formerly known as UnitedGlobalCom,
Inc. ("Old United"), et al., Liberty and Liberty Global have acquired Beneficial
Ownership of shares of Class C Stock of United. As required by the Merger
Agreement, the parties hereto are entering into this Agreement.
Agreement
In consideration of the foregoing premises and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
Section 1. Certain Definitions.
In this Agreement, the following terms have the following meanings.
Affiliate. When used with reference to a specified Person, any Person
who directly or indirectly through one or more intermediaries, Controls, is
Controlled by, or is under common Control with, the Person specified, provided
that (i) no officer or director of a Person, or any Affiliate of such officer or
director, investing for his, her or its own account or otherwise acting in his,
her or its individual capacity, and no director of a Person, or any Affiliate of
such director, acting in his, her or its capacity as an officer, director,
trustee, representative or agent of a Person that is not an Affiliate of the
specified Person, and in each case not in concert with, or at the direction or
request of, such specified Person shall be deemed to be an Affiliate of such
specified Person for purposes of this Agreement; (ii) no Liberty Party shall be
deemed to be an Affiliate of United and none of United and its Controlled
Affiliates shall be deemed to be an Affiliate of a Liberty Party and (iii) any
Person in which United, directly or indirectly, Beneficially Owns 50% or more of
the equity securities, without regard to voting power in the election of
directors, shall (without limiting the generality of this definition) be deemed
to be an Affiliate of United.
Agreement. As defined in the preamble.
Assumed Options. Class B Options (as defined in the Merger Agreement)
that were granted by Old United prior to, and were assumed by United at, the
consummation of the United/New United Merger.
Beneficial Ownership and derivative terms. As determined pursuant to
Rule 13d-3 and Rule 13d-5 under the Exchange Act and any successor regulation,
except that in determining Beneficial Ownership, without duplication, (i) equity
securities that may be acquired pursuant to Rights to acquire equity securities
that are exercisable more than sixty days after a date shall nevertheless be
deemed to be Beneficially Owned, (ii) Beneficial Ownership, if any, arising
solely as a result of being a party to a Transaction Agreement or the Merger
Agreement shall be disregarded and (iii) in the case of the Liberty Parties,
Beneficial Ownership, if any, by any Liberty Party of any securities
Beneficially Owned by any Controlling Principal, arising solely from the
existence of any contract, arrangement, understanding or relationship with one
or more Controlling Principals shall be disregarded.
Board: The Board of Directors of United.
Business Day. Any day other than Saturday, Sunday and a day on which
banks are required or permitted to close in Denver, Colorado or New York, New
York.
Class A Securities. Any Class A Stock or Rights to acquire Class A
Stock issued, granted or sold by United after the execution and delivery of this
Agreement, other than shares of Class A Stock issued pursuant to the exercise of
Rights to acquire Class A Stock that were outstanding immediately prior to the
execution and delivery of this Agreement.
Class A Stock. The Class A common stock, $0.01 par value per share, of
United.
Class B Event. As defined in the United Charter as in effect on the
date hereof.
Class B Stock. The Class B common stock, $0.01 par value per share, of
United.
Class C Director. As defined in the United Charter as in effect on the
date hereof.
Class C Stock. The Class C common stock, $0.01 par value per share, of
United.
Common Stock. The Class A Stock, the Class B Stock and the Class C
Stock.
Contract. Any note, bond, indenture, debenture, security agreement,
trust agreement, Lien, mortgage, lease, contract, license, franchise, permit,
guaranty, joint venture agreement, or other agreement, instrument,
understanding, commitment or obligation, oral or written.
Control and derivative terms. The possession directly or indirectly of
the power to direct or cause the direction of the management and policies of
another Person, whether through the ownership of voting securities, by contract
or otherwise.
Control Person. Each of (1) the Chairman of the Board of Liberty, (2)
the President and Chief Executive Officer of Liberty, (3) the Executive Vice
President and Chief Operating Officer of Liberty, (4) each of the directors of
Liberty, and (5) the respective family members, estates and heirs of each of the
persons referred to in clauses (1) through (4) above and any trust or other
investment vehicle for the primary benefit of any of such persons or their
respective family members or heirs. "Family members" for this purpose means the
parents, descendants, stepchildren, step grandchildren, nieces and nephews, and
spouses of the specified person.
2
Controlled Affiliate. When used with reference to a specified Person,
an Affiliate of such Person that such Person directly, or through one or more
intermediaries, Controls; provided that, (a) none of United and its Controlled
Affiliates shall be deemed to be a Controlled Affiliate of a Liberty Party and
(b) any Person in which United, directly or indirectly, Beneficially Owns 50% or
more of the equity securities, without regard to voting power in the election of
directors, shall (without limiting the generality of this definition) be deemed
to be a Controlled Affiliate of United.
Controlling Principals. As defined in the Stockholders Agreement.
Controlling Principal Director. As defined in Section 3(b)(i).
Conversion Event. As defined in the United Charter as in effect on the
date hereof.
Designated Purchaser. As defined in the Stockholders Agreement.
Equity Securities. The Common Stock and any other voting securities
issued by United (other than preferred stock with customary limited voting
rights).
Exchange Act. The Securities Exchange Act of 1934, as amended, and the
rules and regulations thereunder.
Founders. As defined in the Stockholders Agreement.
Fully Diluted Number. As defined within the definition of "Maximum
Percentage."
Governmental Approval. Any notice to, filing with, or approval or
consent of a Government Authority required by applicable law with respect to any
action, including without limitation, the expiration or termination of any
applicable waiting period under the HSR Act.
Governmental Authority. Any U.S. federal, state or local or any foreign
court, governmental department, commission, authority, board, bureau, agency or
other instrumentality.
Group. As defined in Section 13(d) of the Exchange Act and the rules
and regulations thereunder, but the existence of the Transaction Agreements and
the Merger Agreement shall be disregarded in determining whether a Group exists.
HSR Act. The Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as
amended.
High-Vote Securities. As defined in Section 4(b).
Law. Any U.S. federal, state or local or any foreign statute, code,
ordinance, decree, rule, regulation or general principle of common or civil law
or equity.
Liberty. Liberty Media Corporation, a Delaware corporation, and any
successor (by merger, consolidation, transfer or otherwise) to all or
substantially all of its assets; provided that in the event a Transferee Parent
becomes the Beneficial Owner of all or substantially all of the Equity
Securities then Beneficially Owned by Liberty as to which Liberty has
dispositive
3
control, the term "Liberty" shall mean such Transferee Parent and any successor
(by merger, consolidation, transfer or otherwise) to all or substantially all of
its assets.
Liberty Directors. As defined in Section 3(b)(i).
Liberty Global. As defined in the preamble.
Liberty Party Equity Securities. Equity Securities Beneficially Owned
(and Rights pursuant to which such Equity Securities are Beneficially Owned)
from time to time by the Liberty Parties or any of their Controlled Affiliates.
Liberty Parties. Liberty and Liberty Global, and any Permitted
Transferee of a Liberty Party who hereafter becomes bound by or who is required
to become bound by this Agreement for so long as such Person is or is required
to be so bound or would be required to be bound. Liberty Global and any such
Permitted Transferee will each cease to be a Liberty Party at such time as such
Person is no longer a Controlled Affiliate of Liberty.
Lien. Means any mortgage, pledge, lien, encumbrance, charge, or
security interest.
LMI. As defined under "Background" on the first page of this Agreement.
Maximum Percentage. That percentage of the outstanding Common Stock on
a fully diluted basis (assuming the exercise, conversion or exchange, as
applicable, of all outstanding Rights) (the "Fully Diluted Number") that is
equal to the greater of (a) the sum of (i) the percentage of the Fully Diluted
Number that the Common Stock Beneficially Owned by the Liberty Parties and their
respective Controlled Affiliates represents immediately after the closing of
each of the transactions contemplated by the Merger Agreement, plus (ii) the
percentage of the Fully Diluted Number represented by the aggregate amount of
Common Stock Beneficial Ownership of which is acquired by any of the Liberty
Parties or their respective Controlled Affiliates (x) from the other parties to
the Stockholders Agreement (specifically including shares the Beneficial
Ownership of which is acquired from United (whether pursuant to the Stockholders
Agreement or otherwise, but without duplication of amounts included pursuant to
clause (a)(i)), as well as from the Founders, their Permitted Transferees and
Designated Purchasers) as and when each such acquisition of Beneficial Ownership
occurs, and (y) pursuant to the UPC Release (specifically including any
purchases of Class A Stock held by UPC), plus (iii) the percentage of the Fully
Diluted Number represented by up to and including an additional 25 million
shares of Common Stock as and when Beneficial Ownership thereof is acquired by
any of the Liberty Parties or their respective Controlled Affiliates (such
number to be appropriately adjusted for stock splits, stock dividends and other
similar transactions); provided, that the percentage determined in accordance
with this clause (a)(iii), when added to the percentage determined in accordance
with clause (a)(i), shall not exceed 81%, and (b) the sum of (A) 81%, plus (B)
the percentage determined in accordance with clause (a)(ii)(x) of this
definition. If prior to the closing of any transaction referred to in clause
(a)(i) of the preceding sentence or any acquisition referred to in clause
(a)(ii) or (a)(iii) of the preceding sentence, United issues, grants or sells
any Equity Securities or Rights and such action alone or together with any
preceding or succeeding action gives rise to any purchase rights of any Liberty
Party under Section 7A or Section 7B of this Agreement or paragraph (h) of
Article Fourth of the
4
United Charter, then in calculating the percentages of the Fully Diluted Number
that the Common Stock Beneficially Owned by the Liberty Parties represents
immediately after the closing of any such transaction or acquisition referred to
in clause (a) of the preceding sentence, the Liberty Parties shall be assumed to
have exercised such purchase rights in full.
Merger Agreement. As defined under "Background" on the first page of
this Agreement.
New United Covenant Agreement. The Agreement Regarding Additional
Covenants as of the date hereof among United and the Liberty Parties.
No Waiver Agreement. That certain No Waiver Agreement dated as of the
date hereof among Liberty, LMI and United.
Offer. As defined in Section 6(a).
Offeree. As defined in Section 6(a).
Old United. As defined under "Background" on the first page of this
Agreement.
Permitted Options. Options to purchase a number of shares of Class B
Stock equal to (a) three million minus (b) the number of shares of Class B Stock
underlying the Assumed Options.
Permitted Transferees. As defined in the Stockholders Agreement.
Person. Person shall mean any individual, firm, corporation,
partnership, limited liability company, trust, joint venture, or other entity,
and shall include any successor (by merger or otherwise) of such entity.
Proposal. As defined in Section 6(c).
Public Offering Election. As defined in Section 7(h).
Public Offering Notice. As defined in Section 7(h).
Rights. When used with respect to a specified Person, securities of
such Person (which may include equity securities) that (contingently or
otherwise) are exercisable, convertible or exchangeable for or into equity
securities of such Person (with or without consideration) or that carry any
right to subscribe for or acquire equity securities or securities exercisable,
convertible or exchangeable for or into equity securities of such Person.
Securities Act. The Securities Act of 1933, as amended, and the rules
and regulations thereunder.
Stockholders Agreement. The Stockholders Agreement dated as of the date
hereof among United, the Liberty Parties, and certain other stockholders of
United.
Subsidiary. When used with respect to any Person, (i) a corporation in
which such Person and/or one or more Subsidiaries of such Person, directly or
indirectly, owns capital stock
5
having a majority of the voting power of such corporation's capital stock to
elect directors under ordinary circumstances, and (ii) any other Person (other
than a corporation) in which such Person and/or one or more Subsidiaries of such
Person, directly or indirectly, has (x) a majority ownership interest or (y) the
power to elect or direct the election of a majority of the members of the
governing body of such first-named Person.
Transaction Agreements. As defined in the Stockholders Agreement.
Transfer. Any sale, exchange, pledge (except a pledge in compliance
with this Agreement and the Stockholders Agreement) or other transfer, directly
or indirectly, of Class B Stock or Class C Stock or, when the context requires,
Class A Stock (including through relinquishment of Control of a Person holding
shares of such stock), provided, however, that none of the following shall
constitute a Transfer: (i) a conversion of Class C Stock into Class B Stock or
of Class B Stock or Class C Stock into Class A Stock, (ii) any transfer pursuant
to any tender or exchange offer approved by a majority of the Board, (iii) a
transfer by operation of law in connection with any merger, consolidation,
statutory share exchange or similar transaction involving United, (iv) a
transfer pursuant to a plan of liquidation of United that has been approved by a
majority of the Board or (v) in the case of Liberty, any transaction or series
of related transactions involving the direct or indirect transfer (or
relinquishment of Control) of a Person that holds Liberty Party Equity
Securities Class C Stock (a "Transferred Person"), if (x) immediately after
giving effect to such transaction or the last transaction in such series, voting
securities representing at least a majority of the voting power of the
outstanding voting securities of such Transferred Person or its successor in
such transaction or of any ultimate parent entity (within the meaning of the HSR
Act) of such Transferred Person or its successor (a "Transferee Parent") are
Beneficially Owned by Persons who prior to such transaction were Beneficial
Owners of a majority of, or a majority of the voting power of, the outstanding
voting securities of Liberty (or of any publicly traded class or series of
voting securities of Liberty designed to track the economic performance of a
specified group of assets or businesses) or who are Control Persons or any
combination of the foregoing and (y) such Transferee Parent becomes a party to
this Agreement and the Stockholders Agreement with the same rights and
obligations as Liberty.
Transferred Person. As defined in the definition of "Transfer."
Transferee Parent. As defined in the definition of "Transfer."
United. As defined in the preamble.
United Bylaws. The Bylaws of United, as such Bylaws may be amended from
time to time in accordance with the United Charter, such Bylaws and this
Agreement.
United Charter. The Restated Certificate of Incorporation of United as
filed with the Secretary of State of the State of Delaware on __________, 2002,
as it may be amended from time to time.
United/New United Merger. As defined in the Merger Agreement.
6
UPC. United Pan-Europe Communications, N.V., a company organized under
the laws of The Netherlands.
UPC Release. Section 3 of and Exhibit A to the Release, dated as of
February 22, 2001, among UPC, Old United, Liberty and LMI (but no other
provisions of such Release).
Voting Agreement. That certain Voting Agreement dated as of the date
hereof among United and the Founders.
Voting Power. As of any date of determination, the aggregate number of
votes of all outstanding Equity Securities and (without duplication) Equity
Securities issuable as of such date upon the exercise, conversion or exchange of
all Rights outstanding.
Section 2. Acquisition of Equity Securities or Rights; Other Covenants.
(a) (i) Except as specifically permitted by this Agreement
(including Section 2 and Section 6), the Liberty Parties shall not, and shall
not suffer or permit any of their respective Controlled Affiliates to, acquire
Beneficial Ownership of any Common Stock if immediately after such acquisition
the Common Stock Beneficially Owned, in the aggregate, by the Liberty Parties
and their Controlled Affiliates would exceed the Maximum Percentage.
(ii) No Liberty Party shall be in breach of Section 2(a)(i)
solely because the Liberty Parties and their respective Controlled Affiliates
become the Beneficial Owners of a number of shares of Common Stock exceeding the
Maximum Percentage after and solely because of any action taken by United or any
Affiliate of United (including the repurchase or redemption by United or any of
its Affiliates of Equity Securities or Rights, the issuance of Equity Securities
or Rights, including pursuant to an offer by United or any of its Affiliates to
its security holders of rights to subscribe for Equity Securities, the
expiration of Rights, or the declaration by United of a dividend in respect of
any class of Equity Securities payable at the election of such security holders
either in cash or in Equity Securities) in respect of which no Liberty Party or
Controlled Affiliate thereof shall have taken any action except as permitted to
be taken by holders of Equity Securities or Rights in their capacities as such
(including as a result of action taken in accordance with Section 6 hereof or an
election not to tender any of such Liberty Party's Equity Securities pursuant to
any such offer to repurchase, an election to purchase Equity Securities or
Rights pursuant to any such subscription offer or an election to be paid a
dividend in respect of the Liberty Party Equity Securities in Equity Securities
or Rights instead of cash).
(b) Except as contemplated by the Stockholders Agreement or
specifically permitted by this Agreement (including Section 6), each Liberty
Party shall not, and such Liberty Party shall not permit any of its Controlled
Affiliates to:
(i) solicit proxies with respect to Equity Securities or
become a participant in a solicitation of proxies
with respect to Equity Securities, in either case
within the meaning of Regulation 14A under the
Exchange Act (or any successor regulation), except
that any director of United may solicit proxies on
behalf of United or be a participant with United in a
solicitation of proxies to be voted in accordance
with the recommendation of the Board in each case;
7
(ii) form, join or participate in any Group with respect
to Equity Securities with any holder of Equity
Securities that is not a Liberty Party or Controlled
Affiliate thereof if the Equity Securities
Beneficially Owned by such Group would exceed the
Maximum Percentage, unless the Controlling Principals
are members of such Group;
(iii) deposit any Liberty Party Equity Securities in any
voting trust or subject any Liberty Party Equity
Securities to a voting agreement or other voting
arrangement, in any such case as a method of evading
or attempting to evade the requirements of this
Agreement;
(iv) solicit or encourage an Offer from a Person other
than a Liberty Party, a Founder, United or any
Controlled Affiliate of any of the foregoing Persons;
or
(v) call a meeting of United's stockholders, make a
proposal for consideration by United's stockholders
(except to the Board), or vote or consent to an
amendment of United's bylaws without the consent of
the Board (except as permitted by Section 3).
(c) If a Controlled Affiliate of a Liberty Party that has not
previously become a party to this Agreement acquires Beneficial Ownership of any
Equity Securities after the date hereof, such Liberty Party shall promptly cause
such Controlled Affiliate to deliver to United an undertaking to be bound by all
provisions of the Stockholders Agreement and this Agreement applicable to the
Liberty Party.
Section 3. Voting, Appraisal Rights.
(a) Each Liberty Party shall cause all of such Liberty Party's
Equity Securities to be present at all meetings of the stockholders of United at
which such Liberty Party shall be entitled to vote and as to which notice has
been properly given in accordance with the applicable provisions of the United
Charter and United Bylaws, or shall cause proxies to be present at all such
meetings, so as to enable all of such Liberty Party's Equity Securities to be
counted for quorum purposes. Except for (A) those matters as to which a Liberty
Party or the Class C Directors or Liberty Directors have approval rights
pursuant to this Agreement, the Stockholders Agreement or the United Charter and
(B) any matter that, pursuant to the New United Covenant Agreement, is required
to be approved by Liberty, if such approval has not been obtained, or that, by
the terms of Section 3.12 of the United Bylaws, is required to be reviewed,
voted upon and approved by the Board or a committee thereof, if such matter has
not been reviewed, voted upon and approved by the required vote of the Board or
a committee thereof, in any such case prior to the time such matter is presented
to the stockholders of United for their approval, each Liberty Party will vote
its Common Stock (i) with respect to any matter submitted for approval of
stockholders of United (other than those referred to in clauses (ii) and (iii)
below), in such Liberty Party's sole discretion, either (x) in the manner
recommended by a majority of the Board or (y) in the same proportion as the
holders of the remaining Common Stock vote with respect to
8
such matter, (ii) against any merger, consolidation, recapitalization,
dissolution or sale of all or substantially all of the assets of United not
approved by the Board, and (iii) with respect to the election or removal of
directors (x) following the occurrence of a Class B Event, as provided in
Section 3(b) below, and (y) otherwise, in its sole discretion. Notwithstanding
the foregoing, the Liberty Parties will be entitled to vote their Common Stock
in favor of any proposal to approve or necessary to implement the transactions
expressly contemplated by the Transaction Agreements, whether or not approval is
recommended by the Board. No Liberty Party will exercise appraisal rights as to
any matter.
(b) Following the occurrence of a Class B Event,
(i) The Liberty Parties shall have the right to nominate
four members of the Board or, if greater, such number
of members of the Board (rounded up to the next whole
number) equal to 33 1/3% of the then-authorized
number of members of the Board (each such nominee, a
"Liberty Director"); pursuant to the Voting
Agreement, the Controlling Principals will have the
right to nominate four members of the Board or, if
greater, such number of members of the Board (rounded
up to the next whole number) equal to 33 1/3% of the
then-authorized number of members of the Board (each
such nominee, a "Controlling Principal Director");
and the Board will nominate the remaining members of
the Board.
(ii) The Liberty Parties will vote or cause to be voted
all Equity Securities owned by them (or with respect
to which they have the right to vote or direct the
voting) that have the right to vote generally in the
election of directors for the election to the Board
of those persons nominated in accordance with this
Section 3(b) and Section 3(c) and will not seek the
removal of any director (other than a Liberty
Director) except for cause; provided that, if the
Controlling Principals request that the Liberty
Parties vote in favor of the removal of any
Controlling Principal Director, the Liberty Parties
will vote or cause to be voted all Equity Securities
owned by them (or with respect to which they have the
right to vote or direct the voting) that have the
right to vote on such matter in favor of the removal
of such Controlling Principal Director.
(iii) The approval of the Liberty Directors shall be
required for all matters set forth in paragraph (b)
of Article Fifth of the United Charter as in effect
on the date hereof, without regard to any limitation
that would otherwise apply as a result of the Class C
Stock ceasing to be outstanding.
(c) United shall take all necessary or desirable action
(including, without limitation, nominating the Liberty Directors) in order to
cause the Board to have the constituency provided for in Section 3(b) and to
give effect to this Section 3. In the absence of any nomination by the Liberty
Parties of a Liberty Director, the person or persons previously
9
nominated by the Liberty Parties and then serving shall be re-nominated if still
eligible to serve as provided herein. The Liberty Parties may request, and vote
in favor of, the removal of any Liberty Director, with or without cause. The
Liberty Parties will have the right to nominate a person to fill any vacancy on
the Board created by the resignation, removal, incapacity or death of any
Liberty Director. Pursuant to the Voting Agreement, the Controlling Principals
will have the right to nominate a person to fill any vacancy on the Board
created by the resignation, removal, incapacity or death of any Controlling
Principal Director.
Section 4. Certain United Covenants.
(a) If any consents, approvals, waivers or other action by, or
notices to, filings with or applications or submissions to, any Governmental
Authority or other third party are needed for any Liberty Party or any
Controlled Affiliate of a Liberty Party to exercise any rights under this
Agreement, any other Transaction Agreement or the United Charter (including the
purchase rights and approval rights of the holders of Class C Stock set forth
therein) or for the exercise of the approval rights of the Class C Directors or
Liberty Directors under the United Charter, this Agreement and the New United
Covenant Agreement, respectively, United shall cooperate with Liberty and use
its best commercially reasonable efforts to obtain and assist Liberty in
obtaining the necessary consents, approvals, waivers and other actions, and
making the necessary notices, filings, applications and submissions.
(b) United will not issue, grant or sell any shares of Class B
Stock, any Equity Securities convertible into or exercisable or exchangeable for
Class B Stock (contingently or otherwise) or that have a greater vote per share
(on an as-converted basis or otherwise) than the Class A Stock (whether
generally, in the election of directors or generally other than in the election
of directors) (collectively, "High-Vote Securities") or any Rights to acquire
any of the foregoing, other than to a Liberty Party or Controlled Affiliate
thereof, unless and until the Class C Stock has become convertible in full into
Class B Stock, except that (x) United may issue up to an aggregate of three
million shares of Class B Stock upon exercise of Assumed Options and Permitted
Options, and (y) United may, on majority vote of the Board and compliance with
applicable legal requirements, issue shares of a series of its preferred stock
convertible into Class B Stock, but with no other conversion rights, no voting
rights other than the limited voting rights customary in preferred stocks, and
no other special rights, provided that such convertible preferred stock shall
not be convertible into Class B Stock until the Class C Stock has become fully
convertible into Class B Stock, and the aggregate number of shares of Class B
Stock issuable upon conversion of all such preferred stock and the exercise of
the Assumed Options and the Permitted Options shall be less than the number of
shares that, if issued in one or more transactions following the occurrence of a
Conversion Event, would entitle the Liberty Parties to exercise the purchase
rights set forth in Section 7A (it being understood that such issuances will be
taken into account in determining the Liberty Parties' entitlement to exercise
such purchase rights).
(c) United will not issue, grant or sell any options exercisable
for Class B Stock other than the Permitted Options without Liberty's prior
consent.
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Section 5. Dispositions of Equity Securities.
(a) No Liberty Party shall Transfer or permit any of its
Controlled Affiliates to Transfer Beneficial Ownership of any Equity Securities,
unless the Transfer is (i) a Transfer to Liberty or a Controlled Affiliate of
Liberty that is or becomes a party to this Agreement in accordance with Section
2(c); (ii) a Transfer of Class A Stock to one or more underwriters in connection
with a bona fide public offering registered under the Securities Act; (iii) a
Transfer to a Founder or Designated Purchaser pursuant to Section 4 of the
Stockholders Agreement, provided that the transferee, if other than a Founder,
delivers to United an undertaking to be bound by all provisions of the
Stockholders Agreement and, in the case of a Designated Purchaser that is not a
Permitted Transferee, this Agreement; (iv) a Transfer pursuant to Section 7 or 8
of the Stockholders Agreement; or (v) a Transfer of Class A Stock that otherwise
complies with the terms of the Stockholders Agreement, provided that, in the
case of a Transfer pursuant to clause (ii) or this clause (v) other than to an
Affiliate, the transferring Liberty Party has no reason to believe that any
Person or Group would hold as a result of such a Transfer of Beneficial
Ownership more than ten percent of the Voting Power in the election of directors
as of the date of such Transfer.
(b) The Liberty Parties may pledge or grant a security interest in
Equity Securities to a financial institution to secure a bona fide loan made to
a Liberty Party or in connection with a hedging transaction with a financial
institution, so long as the Liberty Party complies with Section 6(b) of the
Stockholders Agreement.
(c) Any attempted Transfer in violation of this Agreement shall be
void.
Section 6. Offers for United.
(a) If any Person shall make an offer (an "Offer"): (i) to acquire
from United or from one or more stockholders thereof (by tender or exchange
offer or other public offer), or both (the "Offeree"), Equity Securities of
United, (ii) to acquire all, or substantially all, the assets of United, or
(iii) to effect a merger, consolidation, statutory share exchange or similar
transaction between or involving United and another Person, then United shall
give Liberty notice of such Offer promptly upon receipt by United thereof or, if
such disclosure of the existence or terms of such Offer is prohibited by the
terms thereof or if counsel for United determines that such disclosure prior to
a public announcement of such Offer may violate or result in the violation of
applicable United States securities laws, promptly after the public announcement
of such Offer. In no event will United give Liberty notice of such Offer less
than ten days prior to acceptance of such Offer.
(b) If any such Offer is made or proposed to an Offeree and not
rejected within five days, any Liberty Party or an Affiliate thereof may propose
a competing offer to the Board and the Board shall in the exercise of its
fiduciary duties consider in good faith waiving any provisions of this Agreement
that would restrict actions that might be taken by a Liberty Party or its
Affiliates in support of such competing offer or the transactions contemplated
thereby.
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(c) If United proposes (a "Proposal") to effect a sale of all or
substantially all of the assets of United or a merger, consolidation, statutory
share exchange or similar transaction between or involving United and another
Person or to issue in any transaction Class B Stock in an amount such that the
Liberty Parties' purchase rights would not apply to such issuance (whether as a
result of clause (h)(ii) of Article Fourth of the United Charter or Section
7A(d) of this Agreement), then United shall give Liberty notice of such Proposal
and, prior to taking any action to effectuate the same, United shall give
Liberty the opportunity to propose (or to cause an Affiliate of Liberty to
propose) an alternative transaction to the Board. If Liberty or an Affiliate
thereof proposes an alternative transaction to the Proposal to the Board, the
Board shall in the exercise of its fiduciary duties consider in good faith
waiving any provisions of this Agreement that would restrict actions that might
be taken by Liberty or its Affiliates in support of such alternative
transaction.
(d) United shall not enter into any agreement or make any covenant
that would preclude it from complying with this Section 6.
Section 7A. Purchase Rights -- High-Vote Securities.
(a) If, following the occurrence of a Conversion Event, United
issues, grants or sells any High-Vote Securities (including upon conversion,
exercise or exchange of previously issued Rights) and after giving effect
thereto, together with any prior issuances of Class B Stock with respect to
which the Liberty Parties did not have any purchase rights pursuant to this
Section 7A, including any issuance of Class B Stock or other High-Vote
Securities contemplated by Section 4(b) (which issuance for purposes of this
Section 7A shall be deemed to have occurred as of the later of the actual
issuance of such Class B Stock or other High-Vote Securities and immediately
after the occurrence of a Conversion Event), the combined voting power (whether
in the election of directors or otherwise) of the Liberty Parties' Equity
Securities is equal to or less than 90% of the combined voting power thereof
immediately prior to either such issuance or the first such issuance (or deemed
issuance), the Liberty Parties will be entitled, subject to applicable legal
requirements (which United will use its best commercially reasonable efforts to
cause to be satisfied or waived), to acquire from United additional shares of
Class B Stock, in the manner provided in this Section 7A, in an amount
sufficient to restore the combined voting power of the Equity Securities owned
by the Liberty Parties to 100% of the combined voting power of the Liberty
Parties' Equity Securities immediately prior to either such issuance or the
first such issuance or deemed issuance (whichever is greater, in the case of
multiple issuances) (appropriately adjusted for other acquisitions or
dispositions of Equity Securities by the Liberty Parties following such first
issuance or deemed issuances). For purposes of this Section 7A, the voting power
of the Liberty Parties' Equity Securities shall in all cases be calculated as if
any High-Vote Securities that are convertible into, or exercisable or
exchangeable for, Class B Stock had been converted into or exercised or
exchanged for Class B Stock.
(b) The Liberty Parties will be entitled to restore their voting
power in United as provided above by, at their election:
12
(i) subject to applicable Law and listing requirements,
surrendering shares of Class A Stock in exchange for
Class B Stock on a one-for-one basis;
(ii) purchasing from United additional shares of Class B
Stock for a purchase price per share, payable in cash
or such other form of consideration as may be
acceptable to United, equal to (x) the issue price
per share of the Class B Stock equivalent of the
High-Vote Securities so issued (which if paid other
than in cash or shares of Class A Stock shall be the
fair market value of the consideration so paid) or
(y) with respect to any High-Vote Securities that
were issued in exchange for shares of Class A Stock,
the average of the Closing Prices (as defined in the
United Charter as in effect on the date hereof) per
share of the Class A Stock for the ten consecutive
trading days preceding (A) the date on which the
additional shares of Class B Stock are purchased or
(B) the date on which such High-Vote Securities were
issued, whichever yields the lower price, in each
case appropriately adjusted to reflect the effect of
any stock splits, reverse splits, combination, stock
dividends or other events affecting the Class B
Stock; or
(iii) any combination of the foregoing.
(c) If the Liberty Parties become entitled to acquire additional
Class B Stock by purchase or exchange pursuant to the purchase rights
contemplated by this Section 7A, United shall provide notice of such entitlement
to Liberty within five Business Days after the issuance of any High-Vote
Securities that alone or together with any prior issuances has reduced the
voting power of the Liberty Parties' Equity Securities by ten percent or more.
The right of the Liberty Parties to acquire additional Class B Stock shall then
be contingent upon Liberty's (i) delivering a notice to United within ten days
after receipt of United's notice, in which notice Liberty states that it or one
or more other Liberty Parties or Controlled Affiliates will acquire additional
Class B Stock pursuant to its purchase rights, and (ii) tendering the applicable
consideration for such additional Class B Stock within 30 days after the later
of receipt by Liberty of United's notice and the date of the issuance of
High-Vote Securities that has reduced the voting power of the Liberty Parties'
Equity Securities by ten percent or more (subject to extension for up to 60
additional days if required to obtain Governmental Approval or for any
applicable waiting periods to expire or terminate).
(d) Notwithstanding the foregoing, if United issues Class B Stock
in any transaction in an amount such that, immediately following such issuance,
the Persons who were holders of outstanding Equity Securities immediately prior
to such issuance of Class B Stock then hold in the aggregate less than 30
percent of the voting power of United's outstanding Equity Securities in the
election of directors generally, then the Liberty Parties will not have a right
to restore or maintain their voting power in United pursuant to such purchase
rights.
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Section 7B. Preemptive Rights -- Class A Securities.
(a) If at any time after the execution and delivery of this
Agreement United issues, grants or sells any Class A Securities, the Liberty
Parties shall have the right, subject to applicable legal requirements (which
United will use its best commercially reasonable efforts to cause to be
satisfied or waived), but not the obligation, to acquire from United a portion
of such Class A Securities up to an amount sufficient to permit the Liberty
Parties to maintain the percentage of the total outstanding Common Stock
represented by the Liberty Parties' Equity Securities immediately prior to the
issuance of such Class A Securities, assuming for purposes of calculating such
percentage that all Rights, if any, constituting Class A Securities held by the
Liberty Parties or to be issued, granted or sold in such transaction have been
duly converted, exchanged or exercised in full (whether or not then convertible,
exchangeable or exercisable). If United desires to issue any Class A Securities,
it will first give written notice (an "Issuance Notice") thereof to the Liberty
Parties stating the number of Class A Securities proposed to be issued, granted
or sold, the date such Class A Securities are proposed to be issued, granted or
sold (which date shall be no more than 60 days nor less than 20 days after the
date such Issuance Notice is delivered to Liberty), the total per share
consideration to be received by United upon issue, grant or sale of such Class A
Securities (which consideration may, in the case of an underwritten public
offering for cash of Class A Stock or Rights convertible into or exchangeable or
exercisable for Class A Stock, may be expressed as a range of per share prices
(provided that such range shall be no more than the lesser of (A) 50% of the
lowest price in such range and (B) $5 per share)) and any other material terms
of the proposed transaction. Within 20 days following receipt of an Issuance
Notice, any Liberty Party may exercise its rights under this Section 7B by
giving written notice (a "Preemption Notice") to that effect to United, which
notice shall specify the maximum number of Class A Securities that such Liberty
Party elects to purchase. Failure to deliver a Preemption Notice within such 20
day period will constitute a waiver of the rights granted by this Section 7B as
to the particular issuance of Class A Securities specified in the Issuance
Notice.
(b) The per share price to be paid upon exercise of the rights
granted under this Section 7B with respect to any issuance, grant or sale of
Class A Securities shall be the lower of the lowest per share consideration at
which Class A Securities are issued, granted or sold in such issuance and the
consideration per share specified in the applicable Issuance Notice. The
consideration for which Class A Securities are offered or proposed to be offered
will be determined as follows: (i) in case of the proposed issuance of Class A
Securities for cash, the consideration per share will be the amount of cash per
share to be received by United after any underwriting discounts and (ii) in the
case of a proposed issuance of Class A Securities in whole or in part for
consideration other than cash, the value of the consideration other than cash
will be the fair market value of that consideration. The purchase price shall be
payable in cash or such other form of consideration as may be reasonably
acceptable to United, in an amount equal to the price per share of the Class A
Securities so issued (which if paid other than in cash shall be the fair market
value of the consideration so paid).
(c) Upon delivery of a Preemption Notice in accordance with
Section 7B(a), United and the Liberty Parties delivering such Preemption Notice
will enter into a purchase and sale agreement pursuant to which United will be
obligated to sell and such Liberty Parties will be obligated to buy the Class A
Securities specified in such Preemption Notice for the consideration
14
per share determined in accordance with Section 7B(b). The parties will make
representations and warranties customary for similar stock purchase
transactions, including, in the case of United, representations that all filings
made by it pursuant to the Exchange Act and the Securities Act are complete and
accurate in all material respects, that the most recent financial statements
provided by United to Liberty pursuant to Section 2(e) of the New United
Covenant Agreement fairly present the financial condition and results of
operations of United and its subsidiaries as of the dates and for the periods
covered thereby and that United has no material undisclosed liabilities. There
shall be no conditions to the parties' obligation to close such purchase and
sale other than (1) the closing of the issuance, grant or sale of the balance of
the Class A Securities covered by the Issuance Notice, (2) the absence of any
material breach of any of the representations and warranties described above,
assuming such representations and warranties had been made both on the date of
the Issuance Notice and on the closing date of such purchase and sale agreement,
and (3) in the case of the Liberty Parties' obligation to close, (A) the
issuance, grant or sale of the balance of the Class A Securities specified in
the Issuance Notice being on the terms specified therein (including, in the case
of an underwritten public offering for cash of Class A Stock or Rights, the
final price of such public offering being within the range set forth in the
Issuance Notice) and (B) the issuance, grant or sale of such Class A Securities
occurring within 20 days before or after the date specified therefor in the
Issuance Notice.
(d) Each issuance of Class A Securities to a Liberty Party must be
on terms not less favorable to such Liberty Party than the most favorable terms
on which United issues or proposes to issue in the transaction in connection
with which the preemptive right is being exercised Class A Securities to any
other Person (without discrimination based on differences in the number or
amount of Class A Securities to be acquired). Without limiting the generality of
the immediately preceding sentence, (i) each Liberty Party must be given the
same options and rights of election, if any, as to the kind(s) or amount(s) of
consideration to be paid or delivered for Class A Securities as any other
purchaser is given or was proposed to be given in the Issuance Notice and (ii)
the purchase price to be paid by each Liberty Party upon exercise of its rights
under this Section 7B will be paid upon terms which are not less favorable than
those on which the Class A Securities are sold to any other purchaser, unless
those terms provide for payment in a manner which could not reasonably be
duplicated by any Liberty Party, such as the transfer of specific property to
United, in which event such payment will be in cash or such other form of
consideration as may be reasonably acceptable to United, equal to the price per
share of the Class A Securities so issued (which if paid other than in cash
shall be the fair market value of the consideration so paid). The giving of an
Issuance Notice shall constitute the representation and warranty by United to
each Liberty Party that (A) the proposed issuance is not subject to conditions,
contingencies or material terms not disclosed in the Issuance Notice or in the
accompanying documents delivered therewith; and (B) neither the amount or kind
of consideration offered by any other purchaser of the Class A Securities nor
any other terms of the proposed issuance or of any other transaction or proposed
transaction with such purchaser or any of its Affiliates have been established
for the purpose of circumventing, increasing the cost of exercising or otherwise
impairing the Liberty Parties' preemptive rights under this Section 7B.
(e) Notwithstanding the foregoing, the Liberty Parties will not be
entitled to acquire Class A Securities pursuant to this Section 7B with respect
to (i) any issuance or sale of Class A Securities in connection with the
acquisition of a business (A) from a third party that is not an Affiliate of
United or of any Founder and (B) that is directly related to the then existing
15
businesses conducted by United and its Controlled Affiliates, (ii) any issuance
or grant of options to purchase shares of Class A Stock to employees of United
pursuant to an employee benefit plan approved by the Board, but only to the
extent that the percentage of the total outstanding Class A Stock issued and
issuable pursuant to all options to purchase shares of Common Stock granted
pursuant to all such employee benefit plans (irrespective of when such options
were issued) does not exceed 10% of the total outstanding Common Stock of
United, (iii) Equity Securities issued as a dividend to all holders of Equity
Securities or upon any subdivision or combination of all shares of Equity
Securities, or (iv) any issuance of Class A Stock pursuant to the exercise of
Rights as to which the Liberty Parties shall have been afforded the opportunity
to exercise their preemptive rights pursuant to this Section 7B.
(f) If the Liberty Parties waive or are deemed to have waived the
preemptive rights granted under this Section 7B with respect to any proposed
issuance of Class A Securities specified in an Issuance Notice, then United
shall be free to issue, sell or grant the Class A Securities described in such
Issuance Notice without the participation of any Liberty Party; provided that
such issuance, sale or grant closes within 60 days after the date of the
applicable Issuance Notice and is on terms no more favorable to any purchaser
than the terms proposed in such Issuance Notice. United shall not issue, sell or
grant any Class A Securities after any such 60 day period without again
complying with this Section 7B. The provisions of this Section 7B shall apply
successively to each and every issuance of Class A Securities.
Section 8. Representations and Warranties.
Each of the Liberty Parties, severally and not jointly, on the one
hand, and United, on the other, represent and warrant to each other as of the
date of this Agreement as follows:
(a) Such party has the right, power, legal capacity and authority
to enter into and perform its obligations under this Agreement, and this
Agreement constitutes such party's valid and binding obligation, enforceable in
accordance with its terms, subject, as to enforceability, to applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
similar laws affecting creditors' rights and remedies generally, and to general
principles of equity, including principles of commercial reasonableness, good
faith and fair dealing (regardless of whether enforcement is sought in a
proceeding at law or in equity).
(b) Such party has obtained all authorizations, permits, approvals
or consents of any Persons, including all authorizations, permits, approvals or
consents of any Governmental Authorities, necessary to enter into and perform
its obligations under this Agreement, except as would not, individually or in
the aggregate, adversely affect such party's ability to perform its obligations
under this Agreement.
(c) This Agreement and the transactions it contemplates do not
conflict with any applicable Law or any agreement to which it is a party or
constitute a default under any such agreement, except as would not, individually
or in the aggregate, adversely affect such party's ability to perform its
obligations under this Agreement.
16
Section 9. Legend.
(a) United shall cause a legend substantially similar to the
following effect to be placed on each certificate representing any Equity
Securities or Rights issued to each Liberty Party or its Affiliates:
"The securities represented by this certificate are
subject to a Stockholders Agreement and a Standstill
Agreement, each dated as of ________ __, 2002, copies of
which are available from UnitedGlobalCom, Inc. upon
request, and any sale, pledge, hypothecation, transfer,
assignment or other disposition of such securities is
subject to such Stockholders Agreement and Standstill
Agreement."
(b) Upon surrender to United of any certificate representing any
Equity Securities or Rights disposed of by a Liberty Party in a transaction
described in Section 5(a)(ii) or (v), or in clauses (ii), (iii) or (iv) of the
definition of Transfer in Section 1, United shall promptly cause to be issued
(i) to the transferee or transferees of such Equity Securities or Rights one or
more certificates without the legend set forth in Section 9(a) and (ii) to the
holder of Equity Securities or Rights represented by such certificates so
surrendered one or more certificates representing such Equity Securities or
Rights, if any, as shall not have been so disposed of, with the legend set forth
in Section 9(a). Upon termination of this Agreement pursuant to Section 11 below
and the surrender to United of any certificate representing Equity Securities or
Rights, United shall cause to be issued to the holder of such Equity Securities
or Rights one or more certificates without the legend set forth in Section 9(a).
Section 10. Remedies. Each of the parties acknowledges and agrees that
in the event of any breach of this Agreement, the nonbreaching party would be
irreparably harmed and could not be made whole by monetary damages. Accordingly,
the parties to this Agreement, in addition to any other remedy to which they may
be entitled hereunder or at law or in equity, shall be entitled to compel
specific performance of this Agreement.
Section 11. Termination. The provisions of this Agreement other than
Sections 4, 7A and 7B will expire on June 25, 2010, provided that this Agreement
will terminate in its entirety (except as provided in the following sentence) at
such time (whether earlier or later) as the Stockholders Agreement terminates in
accordance with its terms or by the mutual consent of the Controlling Principals
and Liberty. United's obligations under Section 9(b) shall survive the
termination of this Agreement.
Section 12. Notices. All notices, requests, demands and other
communications required or permitted hereunder shall be in writing, shall be
deemed to have been duly given when delivered personally or, sent by telecopy,
or recognized service providing for guaranteed delivery, addressed as follows:
17
(a) If to United, to it at:
UnitedGlobalCom, Inc.
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Attention: President
Fax:(000) 000-0000
with copies to:
UnitedGlobalCom, Inc.
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Attention: General Counsel
Fax: (000) 000-0000
and to
Holme Xxxxxxx & Xxxx LLP
0000 Xxxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Attention: W. Xxxx Xxxxxx, Esq.
Fax: (000) 000-0000
(b) If to the Liberty Parties, to:
Liberty Media Corporation
00000 Xxxxxxx Xxxx.
Xxxxxxxxx, Xxxxxxxx 00000
Attention: President
Fax:(000) 000-0000
with copies to:
Liberty Media Corporation
00000 Xxxxxxx Xxxx.
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxxxx X. Xxxxxxxxx, Esq.
Fax:(000) 000-0000
18
and to
Xxxxx Xxxxx LLP
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxx, Esq.
Fax: (000) 000-0000
or to such other person or address or addresses as Liberty or United shall
specify by notice in accordance with this Section 12. Liberty shall be
responsible for distributing any notices it receives to the Liberty Parties, as
necessary. All notices, requests, demands, waivers and communications shall be
deemed to have been received on the date of delivery or on the first Business
Day after delivery was guaranteed by a recognized delivery service, except that
any change of address shall be effective only upon actual receipt. Written
notice given by telecopy shall be deemed effective when confirmation is received
by the sending party. Delivery shall be deemed to have been made to each Liberty
Party on the date that delivery is made to Liberty at the address specified
above (as it may be changed as provided herein).
Section 13. Entire Agreement. This Agreement, together with the other
Transaction Agreements and the Merger Agreement, contains all the terms and
conditions agreed upon by the parties hereto, and no other agreements (except to
the extent referenced hereby), oral or otherwise, regarding the subject matter
hereof shall have any effect unless in writing and executed by the parties after
the date of this Agreement.
Section 14. Applicable Law, Jurisdiction; Waiver of Jury Trial. This
Agreement shall be governed by Colorado law without regard to conflict of law
rules. The parties hereby irrevocably submit to the jurisdiction of any Colorado
State or United States Federal court sitting in Colorado, and only a State or
Federal court sitting in Colorado will have any jurisdiction over any action or
proceeding arising out of or relating to this Agreement or any agreement
contemplated hereby, and the undersigned hereby irrevocably agree that all
claims in respect of such action or proceeding shall be heard and determined in
such a State or Federal court. The undersigned further waive any objection to
venue in such State and any objection to any action or proceeding in such State
on the basis of a non-convenient forum. Each party hereby IRREVOCABLY WAIVES ANY
RIGHT TO A TRIAL BY JURY in any proceeding brought with respect to this
Agreement or the transactions contemplated hereby.
Section 15. Headings. The headings in this Agreement are for
convenience only and are not to be considered in interpreting this Agreement.
Section 16. Counterpart Execution. This Agreement may be executed in
any number of counterparts, each of which shall be deemed an original but all of
which will constitute a single agreement.
Section 17. Parties in Interest. Nothing in this Agreement, express or
implied, is intended to confer upon any Person other than the parties hereto,
their Permitted Transferees, in the case of the Liberty Parties, and their
permitted successors and assigns any benefits, rights or remedies. Except as
contemplated by the definitions of "Liberty" and "Transfer" neither this
19
Agreement nor the rights or obligations of any party may be assigned or
delegated (other than, in the case of a Liberty Party, to a Permitted
Transferee), by operation of law or otherwise without the prior written consent
of Liberty and United.
Section 18. Severability. The invalidity or unenforceability of any
provision of this Agreement in any application shall not affect the validity or
enforceability of such provision in any other application or the validity or
enforceability of any other provision.
Section 19. Waivers and Amendments. No waiver of any provision of this
Agreement shall be deemed a further or continuing waiver of that provision or a
waiver of any other provision of this Agreement. This Agreement may not be
amended except in a writing signed by United and Liberty. The Board, by majority
vote, may in it sole discretion waive any provision of this Agreement that
imposes obligations on or restricts the rights of or actions by the Liberty
Parties.
Section 20. Interpretation. As used herein, except as otherwise
indicated herein or as the context may otherwise require, the words "include,"
"includes" and "including" are deemed to be followed by "without limitation"
whether or not they are in fact followed by such words or words of like import;
the words "hereof," "herein," "hereunder" and comparable terms refer to the
entirety of this Agreement and not to any particular article, section or other
subdivision hereof; any pronoun shall include the corresponding masculine,
feminine and neuter forms; the singular includes the plural and vice versa;
references to any agreement or other document are to such agreement or document
as amended and supplemented from time to time; references to any statute or
regulation are to it as amended and supplemented from time to time, and to any
corresponding provisions of successor statutes or regulations; references to
"Article," "Section" or another subdivision are to an article, section or
subdivision hereof; and all references to "the date hereof," "the date of this
Agreement" or similar terms (but excluding references to the date of execution
hereof) refer to the date first above written, notwithstanding that the parties
may have executed this Agreement on a later date. Any reference herein to a
"day" or number of "days" (without the explicit qualification of "Business")
shall be deemed to refer to a calendar day or number of calendar days. If any
action or notice is to be taken or given on or by a particular calendar day, and
such calendar day is not a Business Day, then such action or notice may be taken
or given on the next succeeding Business Day.
Section 21. Rules of Construction. The parties hereto agree that they
have been represented by counsel during the negotiation, preparation and
execution of this Agreement and, therefore, waive the application of any law,
regulation, holding or rule of construction providing that ambiguities in an
agreement or other document will be construed against the party drafting such
agreement or document.
[signature page follows]
20
Executed as of the date first set forth above.
UNITEDGLOBALCOM, INC.,
a Delaware corporation
By: -------------------------------------------
Its:
-------------------------------------------
LIBERTY MEDIA CORPORATION,
a Delaware corporation
By: -------------------------------------------
Its:
-------------------------------------------
LIBERTY GLOBAL, INC.,
a Delaware corporation
By: -------------------------------------------
Its:
-------------------------------------------
[signature page to Standstill Agreement]
================================================================================
EXHIBIT 7.11
REGISTRATION RIGHTS AGREEMENT
AMONG
NEW UNITEDGLOBALCOM, INC.,
LIBERTY MEDIA CORPORATION
AND
LIBERTY GLOBAL, INC.
DATED AS OF [________], 2002
================================================================================
TABLE OF CONTENTS
ARTICLE I DEFINITIONS.......................................................1
1.1 Definitions......................................................1
1.2 Internal References..............................................3
ARTICLE II REGISTRATION RIGHTS..............................................3
2.1 Demand Registration..............................................3
2.2 Piggyback Registration...........................................5
ARTICLE III REGISTRATION PROCEDURES.........................................7
3.1 Filings; Information.............................................7
3.2 Registration Expenses...........................................10
ARTICLE IV INDEMNIFICATION AND CONTRIBUTION................................10
4.1 Indemnification by the Company..................................10
4.2 Indemnification by Selling Holders..............................11
4.3 Conduct of Indemnification Proceedings..........................11
4.4 Contribution....................................................12
ARTICLE V MISCELLANEOUS....................................................13
5.1 Participation in Underwritten Registrations.....................13
5.2 Rule 144........................................................13
5.3 Holdback Agreements.............................................14
5.4 Termination.....................................................14
5.5 Amendments, Waivers, Etc. ......................................14
5.6 Counterparts....................................................14
5.7 Entire Agreement................................................14
5.8 Governing Law...................................................14
5.9 Assignment of Registration Rights...............................15
5.10 Notices.........................................................15
5.11 Interpretation..................................................16
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (this "Agreement"), is
entered into as of [___________], 2002, by and among New UnitedGlobalCom, Inc.,
a Delaware corporation (the "Company"), Liberty Media Corporation, a Delaware
corporation ("Liberty Media"), and Liberty Global, Inc. a Delaware corporation
("Liberty Global").
The Company, UnitedGlobalCom, Inc., a Delaware corporation
("United"), United/New United Merger Sub, Inc., a Delaware corporation
("MergerSub"), Liberty Global, Liberty Media International, Inc., a Delaware
corporation ("LMINT"), Liberty Media and certain stockholders of United (the
"Founders") are parties to an Agreement and Plan of Reorganization and Merger,
dated as of December 3, 2001 (the "Merger Agreement"), pursuant to which the
parties thereto will effect a transaction in which, among other things, (a) the
Founders and Liberty Global will contribute or cause to be contributed all of
the shares of Class B Common Stock, par value $0.01 per share, of United held by
them and Liberty Media will contribute or cause to be contributed certain shares
of Class A Common Stock, par value $0.01 per share, of United held, directly or
indirectly, by it to the Company in exchange for an equal number of shares of
the Company's Class B Common Stock, par value $0.01 per share ("Class B Stock")
(in the case of the Founders), or Class C Common Stock, par value $0.01 per
share ("Class C Stock") (in the case of Liberty Global), (b) the Company will
acquire United by means of a merger of Merger Sub with and into United, and (c)
Liberty Media will contribute, or cause to be contributed, cash and certain debt
securities to the Company in exchange for additional shares of Class C Stock;
and
WHEREAS, it is a condition precedent to the closing of the
transactions contemplated by the Merger Agreement that the parties hereto
execute and deliver this Agreement;
NOW THEREFORE, in consideration of the premises, mutual
promises and covenants contained in this Agreement and intending to be legally
bound, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
1.1 DEFINITIONS.
Terms defined in the Merger Agreement are used herein as therein
defined except as otherwise indicated below. In addition, the following terms,
as used herein, have the following meanings:
"Class A Stock" means the Company's Class A Common Stock, par
value $0.01 per share.
"Class B Stock" has the meaning set forth in the recitals
hereof.
"Class C Stock" has the meaning set forth in the recitals
hereof.
"Demand Registration" means a registration under the
Securities Act requested in accordance with Section 2.1.
"Initial Amount" means the number of shares of Class A Stock
beneficially owned (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) by the Liberty Holders, calculated without giving effect to any
conditions to the conversion of any securities of the Company, immediately
following the Closing (as adjusted for stock splits, reverse splits, stock
dividends, reclassifications, recapitalizations and similar events affecting the
Class A Stock).
"Liberty Holders" means each of Liberty Media, Liberty Global,
their respective Affiliates and any direct or indirect transferee of any
Registrable Securities held by any of such Persons.
"Liberty Media" means Liberty Media Corporation, a Delaware
corporation.
"Piggyback Registration" has the meaning set forth in Section
2.2.
"Registrable Securities" means all securities of the Company
or of any successor to the Company (by reason of merger, share exchange, sale of
all or substantially all the assets of the Company or otherwise) now owned or
hereafter acquired by any Liberty Holder. As to any particular Registrable
Securities, such securities shall cease to be Registrable Securities when (i)
such securities shall have been transferred or disposed of pursuant to an
effective registration statement under the Securities Act or an exemption from
the registration requirements of the Securities Act, new certificates therefor
not bearing a legend restricting further transfer shall have been delivered by
the Company and the subsequent transfer or disposition of such securities shall
not require their registration or qualification under the Securities Act or any
similar state law then in force or (ii) such securities shall have ceased to be
outstanding.
"Requesting Holders" means the Liberty Holders requesting a
Demand Registration and shall include Liberty Holders deemed "Requesting
Holders" pursuant to Section 2.1(c).
"Rule 144" means Rule 144 (or any successor rule of similar
effect) promulgated under the Securities Act.
"Selling Holder" means any Liberty Holder that is selling
Registrable Securities pursuant to a public offering registered hereunder.
"Shelf Registration" means a registration of shares to be sold
on a continuous or delayed basis pursuant to Rule 415 under the Securities Act
(or any successor provision thereto).
"Underwriter" means a securities dealer that purchases any
Registrable Securities as principal and not as part of such dealer's
market-making activities.
2
1.2 INTERNAL REFERENCES
Unless the context indicates otherwise, references to Articles,
Sections and paragraphs shall refer to the corresponding articles, sections and
paragraphs in this Agreement, and references to the parties shall mean the
parties to this Agreement.
ARTICLE II
REGISTRATION RIGHTS
2.1 DEMAND REGISTRATION.
(a) Liberty Media or its designee, on behalf of the Liberty
Holders, shall be entitled to make written requests from time to time for Demand
Registration of all or any part of the Registrable Securities held by the
Liberty Holders, provided that each such Demand Registration must be in respect
of Registrable Securities representing not less than the lower of (A) 10% of the
Initial Amount or, with respect to Registrable Securities other than shares of
Class A Stock, a number of such other securities having a fair market value
(based on the average of the closing prices of such securities on the principal
stock exchange or interdealer quotation system on which such securities are
traded for the five consecutive trading days immediately preceding the date of
the written request for such Demand Registration or, if such securities are not
publicly traded, as determined in good faith by the Company's Board of
Directors) equal to at least 10% of the product of (x) the Initial Amount,
multiplied by (y) the average of the closing prices of the Class A Stock on the
principal stock exchange or interdealer quotation system on which the Class A
Stock is traded for the same five trading day period or (B) all of the
Registrable Securities held by the Liberty Holders. Notwithstanding the
foregoing, the Company shall not be obligated to effect more than a total of
five (5) Demand Registrations and Liberty Media and any designee of Liberty
Media may make no more than two requests for a Demand Registration in any
12-month period.
(b) Any request for a Demand Registration will specify the
aggregate number and kind of Registrable Securities proposed to be sold and will
also specify the intended method of disposition thereof. A registration will not
count as a Demand Registration until it has become effective and at least 90% of
the Registrable Securities requested to be included in such Demand Registration
have been registered and sold.
(c) Upon receipt of any request for a Demand Registration by
Liberty Media or its designee, the Company shall promptly (but in any event
within ten days) give written notice of such proposed Demand Registration to
each of the Liberty Holders that, according to the stock transfer book of the
Company, holds Registrable Securities, and all such Liberty Holders (including
their respective direct or indirect transferees) shall have the right,
exercisable by written notice to the Company within 20 days of their receipt of
the Company's notice, to elect to include in such Demand Registration such
portion of their Registrable Securities as they may request. All such Persons
requesting to have their Registrable Securities included in a Demand
Registration in accordance with the preceding sentence shall be deemed to be
"Requesting Holders" for purposes of this Section 2.1.
3
(d) If Liberty Media or its designee so elects, the offering
of such Registrable Securities pursuant to such Demand Registration shall be in
the form of a "firm commitment" underwritten offering. The Company shall have
the right to select the Underwriters to be used in connection with any offering
under this Section 2.1, provided that such Underwriters, including the managing
Underwriters, shall be reasonably satisfactory to the Requesting Holders that
hold a majority of the Registrable Securities requested to be included in such
Demand Registration. Any request for Demand Registration may specify that
Registrable Securities are to be sold pursuant to a Shelf Registration.
(e) The Company will have the right to preempt any Demand
Registration with a primary registration by giving written notice, within ten
Business Days after the request for such Demand Registration was given, of such
intention to Liberty Media indicating that the Company has identified a specific
business need and use for the proceeds of the sale of such securities and had
contemplated such sale of securities prior to the date such written request was
given, and the Company shall use commercially reasonable efforts to effect a
primary registration within 90 days of such notice. In the ensuing primary
registration, the Liberty Holders will have the Piggyback Registration rights
set forth in Section 2.2 hereof. If the Company thereafter decides to abandon
its intention to pursue such sale of securities, it shall give notice thereof to
Liberty Media within two Business Days following the Company's decision. The
Company may exercise the right to preempt a Demand Registration only once in
each 360-day period; provided, that during each 360-day period the Company shall
use its reasonable best efforts to permit a period of at least 180 consecutive
days during which the Liberty Holders may effect a Demand Registration.
(f) If a Demand Registration involves an underwritten offering
and the managing Underwriter(s) advise the Company and the Requesting Holders in
writing that, in its opinion, the number of securities requested to be included
in such registration (including securities of the Company that are not
Registrable Securities) exceeds the number that can be sold in such offering
without adversely affecting the price of the offering, the Company will include
in such registration the Registrable Securities requested to be included in such
registration. If the number of Registrable Securities requested to be included
in such registration exceeds the number that, in the opinion of such managing
underwriter, can be sold in such offering, the number of such Registrable
Securities to be included in such Demand Registration shall be allocated pro
rata among all Requesting Holders on the basis of the relative number of
Registrable Securities then held by each such Requesting Holder (provided that
the number of Registrable Securities thereby allocated to any Requesting Holder
for inclusion in such Demand Registration that exceeds such Requesting Holder's
request shall be reallocated among the remaining Requesting Holders in like
manner) or in such other manner as the Requesting Holders may agree. If the
number of Registrable Securities requested to be included in such Demand
Registration is less than the number that, in the opinion of the managing
Underwriter(s), can be sold in such offering without adversely affecting the
price of the offering, the Company may include in such registration the
securities the Company proposes to sell up to the number of securities that, in
the opinion of the managing Underwriter(s), can be so sold in such offering. If
the number of Registrable Securities requested to be included in such Demand
Registration plus the number of securities proposed to be included in such
Demand Registration by the Company is less than the number that, in the opinion
of the managing Underwriter(s), can be sold in such offering without adversely
affecting the price of the offering, the securities requested to be
4
included in such Demand Registration by other Persons whose requests have been
approved by the Company may be included in such Demand Registration up to the
number of securities that, in the opinion of the managing Underwriter(s), can be
so sold. If any Registrable Securities requested to be registered pursuant to a
Demand Registration under this Section 2.1 are excluded from registration
hereunder, then the Liberty Holder(s) having Registrable Securities excluded
shall have the right to withdraw all, or any part, of their Registrable
Securities from such registration prior to its effectiveness.
2.2 PIGGYBACK REGISTRATION
(a) If the Company proposes to file a registration statement
under the Securities Act with respect to an offering of securities for the
account of any Person other than a Liberty Holder or for its own account (other
than a registration statement on Form S-4 or S-8 (or any substitute form that
may be adopted by the Commission)), the Company shall give written notice of
such proposed filing to the Liberty Holders as soon as reasonably practicable
(but in no event less than 15 days before the anticipated filing date),
undertaking to provide each Liberty Holder the opportunity to register on the
same terms and conditions such number of Registrable Securities as such Liberty
Holder may request (a "Piggyback Registration"). Each Liberty Holder will have
five Business Days after any such notice is given to notify the Company as to
whether it wishes to participate in a Piggyback Registration (which notice shall
not be deemed to be a request for a Demand Registration); provided that should a
Liberty Holder fail to provide timely notice to the Company, such Holder will
forfeit any rights to participate in the Piggyback Registration with respect to
such proposed offering. If the registration statement is filed on behalf of a
Person other than the Company, the Company will use its best efforts to have the
amount of Registrable Securities that the Liberty Holders wish to sell included
in the registration statement. If the Company or the Person for whose account
such offering is being made shall determine in its sole discretion not to
register or to delay the proposed offering, the Company may, at its election,
provide written notice of such determination to the Liberty Holders and (i) in
the case of a determination not to effect the proposed offering, shall thereupon
be relieved of the obligation to register such Registrable Securities in
connection therewith, and (ii) in the case of a determination to delay a
proposed offering, shall thereupon be permitted to delay registering such
Registrable Securities for the same period as the delay in respect of the
proposed offering. If the Piggyback Registration involves an underwritten public
offering, any Liberty Holder that requested that Registrable Securities be
included therein may elect, by written notice given to the Company prior to the
effective date of the registration statement therefor, not to register such
Registrable Securities in connection with such Piggyback Registration. As
between the Company and the Selling Holders, the Company shall be entitled to
select the Underwriters in connection with any Piggyback Registration.
(b) If a Piggyback Registration involves an underwritten
offering and the managing Underwriter(s) advise the Company in writing that, in
its opinion, the amount of securities requested to be included in such
registration by all selling securityholders and the Company, if applicable,
exceeds the amount which can be sold in such offering without adversely
affecting the price of such offering, then the Company will include in such
Piggyback Registration (A) if such Piggyback Registration relates to a primary
offering initiated by the Company, (i) first, the securities proposed to be sold
by the Company, (ii) second, to the extent the number of securities proposed to
be included in such Piggyback Registration by the Company is less than the
number of securities which the Company has been advised by the managing
Underwriter(s) can be sold in such offering without having the adverse effect
referred to above, the Registrable Securities requested to be included in such
Piggyback Registration by the Liberty Holders (provided that if the number of
such Registrable Securities, in combination with the number of securities
proposed to be included in such Piggyback Registration by the
5
Company, exceeds the number which the Company has been advised can be sold in
such offering without having the adverse effect referred to above, the number of
such Registrable Securities included in such Piggyback Registration shall be
allocated pro rata among all such Liberty Holders on the basis of the relative
number of Registrable Securities that each of the Liberty Holders has requested
to be included in such Piggy Registration or in such other manner as such
Liberty Holders may agree); and (B) if such Piggyback Registration relates to a
secondary offering initiated by any Person other than a Liberty Holder, (i)
first, the securities requested to be included in such registration by such
other Person (to the extent that the number of such securities does not exceed
the number of securities which the Company has been advised by the managing
Underwriter(s) can be sold in such offering without having the adverse effect
described above), (ii) second, to the extent the number of securities requested
to be included in such registration by such other Person is less than the number
of securities which the Company has been advised by the managing Underwriter(s)
can be sold in such offering without having the adverse effect referred to
above, the Registrable Securities requested to be included in such Piggyback
Registration by the Liberty Holders (provided that if the number of such
Registrable Securities, in combination with the securities of such other Person
to be included in such Piggyback Registration, exceeds the number which the
Company has been advised by the managing Underwriter(s) can be sold in such
offering without having the adverse effect referred to above, the number of such
Registrable Securities of the Liberty Holders included in such Piggyback
Registration shall be allocated pro rata among all such Liberty Holders on the
basis of the relative number of Registrable Securities each such Liberty Holder
has requested to be included in such Piggyback Registration or in such other
manner as such Liberty Holders may agree) and (iii) third, to the extent the sum
of the number of securities requested to be included in such Piggyback
Registration by such other Person plus the number of Registrable Securities
proposed to be included in such Piggyback Registration by the Liberty Holders is
less than the number of securities which the Company has been advised by the
managing Underwriter(s) can be sold in such offering without having the adverse
effect referred to above, the securities proposed to be sold by the Company (to
the extent that the number of such securities does not exceed, in combination
with the securities of such other Person and the Liberty Holders to be included
in such Piggyback Registration, the number of securities which the Company has
been advised by the managing Underwriter(s) can be sold in such offering without
having the adverse effect described above). If as a result of the provisions of
this Section 2.2(b) any Liberty Holder is not entitled to include all
Registrable Securities in a Piggyback Registration that such Liberty Holder has
requested to be so included, such Liberty Holder may withdraw such Liberty
Holder's request to include Registrable Securities in such Piggyback
Registration prior to its effectiveness.
(c) The Company shall not grant any piggyback registration or
similar rights to any Person that would provide such Person with piggyback
registration or similar rights that are senior to or pari passu with the rights
granted to the Liberty Holders hereunder.
6
ARTICLE III
REGISTRATION PROCEDURES
3.1 FILINGS; INFORMATION
In connection with the registration and offering of Registrable
Securities pursuant to Sections 2.1 and 2.2 hereof, the Company will use its
reasonable best efforts to effect the registration and offering of such
Registrable Securities as promptly as is reasonably practicable, and in
connection with any such request:
(a) The Company will expeditiously prepare and file with the
Commission a registration statement on any form for which the Company then
qualifies and that counsel for the Company shall deem appropriate and available
for the sale of the Registrable Securities to be registered thereunder in
accordance with the intended method of distribution thereof, and use its
reasonable best efforts to cause such filed registration statement to become and
remain effective for such period, not to exceed 180 days (or two years, in the
case of a Shelf Registration), as may be reasonably necessary to effect the sale
of the Registrable Securities registered thereunder; provided that if the
Company shall furnish to the Selling Holders a certificate signed by the
Company's Chairman, President or any Executive Vice-President or Vice-President
stating that the Company's Board of Directors has determined in good faith that
it would be detrimental or otherwise disadvantageous to the Company or its
stockholders for such a registration statement to be filed as expeditiously as
possible or for Registrable Securities to be offered pursuant to an effective
Shelf Registration, because the disclosure of information in any related
prospectus or prospectus supplement would materially interfere with any
acquisition, financing or other material event or transaction which is then
intended and the public disclosure of which at the time would be materially
prejudicial to the Company, the Company may postpone the filing or effectiveness
of a registration statement or any offering of Registrable Securities pursuant
to an effective Shelf Registration for a period of not more than 90 days;
provided that during each 360-day period the Company shall use its reasonable
best efforts to permit a period of at least 180 consecutive days during which
the Company will effect the registration of Registrable Securities or any
offering of Registrable Securities pursuant to an effective Shelf Registration
in accordance with this Agreement; and provided, further, that if (i) the
effective date of any registration statement filed pursuant to a Demand
Registration would otherwise be at least 45 calendar days, but fewer than 90
calendar days, after the end of the Company's fiscal year, and (ii) the
Securities Act requires the Company to include audited financials as of the end
of such fiscal year, the Company may delay the effectiveness of such
registration statement for such period as is reasonably necessary to include
therein its audited financial statements for such fiscal year.
(b) The Company will, if requested, prior to filing such
registration statement or any amendment or supplement thereto, furnish to the
Selling Holders, and each applicable managing Underwriter, if any, copies
thereof, and thereafter furnish to the Selling Holders and each such
Underwriter, if any, such number of copies of such registration statement,
amendment and supplement thereto (in each case including all exhibits thereto
and documents incorporated by reference therein) and the prospectus included in
such registration statement (including each
7
preliminary prospectus) as the Selling Holders or each such Underwriter may
reasonably request in order to facilitate the sale of the Registrable Securities
by the Selling Holders.
(c) After the filing of the registration statement, the
Company will promptly notify the Selling Holders of any stop order issued or, to
the Company's knowledge, threatened to be issued by the Commission and take all
reasonable actions required to prevent the entry of such stop order or to remove
it if entered.
(d) The Company will use its commercially reasonable efforts
to qualify the Registrable Securities for offer and sale under such other
securities or blue sky laws of the appropriate jurisdictions in the United
States; keep each such registration or qualification (or exemption therefrom)
effective during the period in which such registration statement is required to
be kept effective; and do any and all other acts and things which may be
reasonably necessary or advisable to enable each Selling Holder to consummate
the disposition of the Registrable Securities owned by such Selling Holder in
such jurisdictions; provided that the Company will not be required to (i)
qualify generally to do business in any jurisdiction where it would not
otherwise be required to qualify but for this paragraph 3.1(d), (ii) subject
itself to taxation in any such jurisdiction or (iii) consent to general service
of process in any such jurisdiction.
(e) The Company will as promptly as is practicable notify the
Selling Holders, at any time when a prospectus relating to the sale of the
Registrable Securities is required by law to be delivered in connection with
sales by an Underwriter or dealer, of the occurrence of any event requiring the
preparation of a supplement or amendment to such prospectus so that, as
thereafter delivered to the purchasers of such Registrable Securities, such
prospectus will not contain an untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading and promptly make available to the Selling Holders and to
the Underwriters any such supplement or amendment. Upon receipt of any notice of
the occurrence of any event of the kind described in the preceding sentence,
Selling Holders will forthwith discontinue the offer and sale of Registrable
Securities pursuant to the registration statement covering such Registrable
Securities until receipt by the Selling Holders and the Underwriters of the
copies of such supplemented or amended prospectus and, if so directed by the
Company, the Selling Holders will deliver to the Company all copies, other than
permanent file copies then in the possession of Selling Holders, of the most
recent prospectus covering such Registrable Securities at the time of receipt of
such notice. If the Company shall give such notice, the Company shall extend the
period during which such registration statement shall be maintained effective as
provided in Section 3.1(a) hereof by the number of days during the period from
and including the date of the giving of such notice to the date when the Company
shall make available to the Selling Holders such supplemented or amended
prospectus.
(f) The Company will enter into customary agreements
(including an underwriting agreement in customary form) and take such other
actions (including, without limitation, participation in road shows and investor
conference calls) as are required in order to expedite or facilitate the sale of
such Registrable Securities.
(g) At the request of any Underwriter in connection with an
underwritten offering the Company will furnish (i) an opinion of counsel,
addressed to the Underwriters,
8
covering such customary matters as the managing Underwriter may reasonably
request and (ii) a comfort letter or comfort letters from the Company's
independent public accountants covering such customary matters as the managing
Underwriter may reasonably request.
(h) If requested by the managing Underwriter or any Selling
Holder, the Company shall promptly incorporate in a prospectus supplement or
post-effective amendment such information concerning the Underwriters or Selling
Holders as the managing Underwriter or any Selling Holder reasonably requests to
be included therein, including without limitation, with respect to the
Registrable Securities being sold by such Selling Holder, the purchase price
being paid therefor by the Underwriters and with respect to any other terms of
the underwritten offering of the Registrable Securities to be sold in such
offering, and promptly make all required filings of such prospectus supplement
or post effective amendment.
(i) The Company shall promptly make available for inspection
by any Selling Holder or Underwriter participating in any disposition pursuant
to any registration statement, and any attorney, accountant or other agent or
representative retained by any such Selling Holder or Underwriter (collectively,
the "Inspectors"), all financial and other records, pertinent corporate
documents and properties of the Company (collectively, the "Records"), as shall
be reasonably necessary to enable them to exercise their due diligence
responsibility, and cause the Company's officers, directors and employees to
supply all information requested by any such Inspector in connection with such
registration statement; provided, however, that unless the disclosure of such
Records is necessary to avoid or correct a misstatement or omission in the
registration statement or the release of such Records is ordered pursuant to a
subpoena or other order from a court of competent jurisdiction, the Company
shall not be required to provide any information under this subparagraph (i) if
(A) the Company believes, after consultation with counsel for the Company, that
to do so would cause the Company to forfeit an attorney-client privilege that
was applicable to such information or (B) if either (1) the Company has
requested and been granted from the Commission confidential treatment of such
information contained in any filing with the Commission or documents provided
supplementally or otherwise or (2) the Company reasonably determines in good
faith that such Records are confidential and so notifies the Inspectors in
writing, unless prior to furnishing any such information with respect to (A) or
(B) such Holder of Registrable Securities requesting such information agrees to
enter into a confidentiality agreement in customary form and subject to
customary exceptions; provided further, however, that each Holder of Registrable
Securities agrees that it will, upon learning that disclosure of such Records is
sought in a court of competent jurisdiction, give notice to the Company and
allow the Company, at its expense, to undertake appropriate action to prevent
disclosure of the Records deemed confidential.
(j) The Company shall cause the Registrable Securities
included in any registration statement to be (i) listed on each securities
exchange, if any, on which similar securities issued by the Company are then
listed, or (ii) authorized to be quoted and/or listed (to the extent applicable)
on the Nasdaq National Market if the Registrable Securities so qualify.
(k) The Company shall provide a CUSIP number (if one has not
already been provided) for the Registrable Securities included in any
registration statement not later than the effective date of such registration
statement.
9
(l) The Company shall cooperate with each Selling Holder and
each Underwriter participating in the disposition of such Registrable Securities
and their respective counsel in connection with any filings required to be made
with the National Association of Securities Dealers, Inc.
(m) The Company shall during the period when the prospectus is
required to be delivered under the Securities Act, promptly file all documents
required to be filed with the Commission pursuant to Sections 13(a), 13(c), 14
or 15(d) of the Exchange Act.
(n) The Company will make generally available to its security
holders, as soon as reasonably practicable, an earnings statement covering a
period of 12 months, beginning within three months after the effective date of
the registration statement, which earnings statement shall satisfy the
provisions of Section 11(a) of the Securities Act and the rules and regulations
of the Commission thereunder.
The Company may require Selling Holders promptly to furnish in writing
to the Company such information regarding such Selling Holders, the plan of
distribution of the Registrable Securities and other information as the Company
may from time to time reasonably request or as may be legally required in
connection with such registration.
3.2 REGISTRATION EXPENSES
In connection with any registration effected hereunder, the Company
shall pay all expenses incurred in connection with such registration (the
"Registration Expenses") including the following: (i) registration and filing
fees with the Commission and the National Association of Securities Dealers,
Inc., (ii) fees and expenses of compliance with securities or blue sky laws
(including reasonable fees and disbursements of counsel in connection with blue
sky qualifications of the Registrable Securities), (iii) printing expenses, (iv)
fees and expenses incurred in connection with the listing or quotation of the
Registrable Securities, (v) fees and expenses of counsel to the Company and the
reasonable fees and expenses of independent certified public accountants for the
Company (including fees and expenses associated with the special audits or the
delivery of comfort letters), (vi) the reasonable fees and expenses of any
additional experts retained by the Company in connection with such registration,
(vii) all roadshow costs and expenses not paid by the Underwriters and (viii)
the reasonable fees and expenses of counsel for the Selling Holders. The Company
shall not be responsible for any underwriting discounts, selling commissions or
stock transfer taxes applicable to the sale of Registrable Securities.
ARTICLE IV
INDEMNIFICATION AND CONTRIBUTION
4.1 INDEMNIFICATION BY THE COMPANY
The Company agrees to indemnify and hold harmless each Selling Holder
and its Affiliates and their respective officers, directors, partners,
stockholders, members, employees, agents and representatives and each Person (if
any) that controls a Selling Holder within the meaning of either Section 15 of
the Securities Act or Section 20 of the Exchange Act, from and
10
against any and all losses, claims, damages, liabilities, costs and expenses
(including reasonable attorneys' fees) caused by, arising out of, resulting from
or related to any untrue statement or alleged untrue statement of a material
fact contained or incorporated by reference in any registration statement or
prospectus relating to the Registrable Securities (as amended or supplemented if
the Company shall have furnished any amendments or supplements thereto) or any
preliminary prospectus, or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, except insofar as such losses, claims,
damages or liabilities are caused by or based upon any information furnished in
writing to the Company by or on behalf of such Selling Holder expressly for use
therein or by the Selling Holder's failure to deliver a copy of the final
prospectus after the Company has furnished the Selling Holder with copies of the
same and such final prospectus corrected errors or omissions in a preliminary
prospectus that are the basis of such losses, claims, damages or liabilities.
Such indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of any Selling Holder or its Affiliates and
shall survive the transfer of the Registrable Securities by such Selling Holder.
4.2 INDEMNIFICATION BY SELLING HOLDERS
Each Selling Holder agrees to indemnify and hold harmless the Company,
its officers and directors, and each Person, if any, that controls the Company
within the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act to the same extent as the foregoing indemnity from the Company
to each Selling Holder, but only with reference to information furnished in
writing by or on behalf of such Selling Holder expressly for use in any
registration statement or prospectus relating to the Registrable Securities, or
any amendment or supplement thereto, or any preliminary prospectus. Each such
Selling Holder's liability under this Section 4.2 shall be limited to an amount
equal to the net proceeds (after deducting the underwriting discount and
expenses) received by such Selling Holder from the sale of such Registrable
Securities by such Selling Holder. The obligation of each Selling Holder shall
be several and not joint.
4.3 CONDUCT OF INDEMNIFICATION PROCEEDINGS
In case any proceeding (including any governmental investigation) shall
be instituted involving any Person in respect of which indemnity may be sought
pursuant to Section 4.1 or Section 4.2, such Person (the "Indemnified Party")
shall promptly so notify the Person against whom such indemnity may be sought
(the "Indemnifying Party") in writing; provided that the failure of the
Indemnified Party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations under this Article IV with respect to such
proceeding except to the extent that the Indemnifying Party is actually and
materially prejudiced by such failure to give notice. The Indemnifying Party
shall be entitled to participate in such proceeding and, subject to the
following sentence, assume the defense thereof with counsel retained by the
Indemnifying Party (the fees and expenses of which counsel shall be paid by the
Indemnifying Party) provided that such counsel is reasonably satisfactory to the
Indemnified Party. In any such proceeding, any Indemnified Party shall have the
right to retain its own counsel, but, after notice from the Indemnifying Party
of its election to assume the defense of such proceeding and of its retention of
counsel reasonably satisfactory to the Indemnified Party whose representation of
the Indemnified Party would not present such counsel with a conflict of
interest, the
11
Indemnifying Party shall not be liable for the fees and expenses of separate
counsel retained by the Indemnified Party subsequently incurred in connection
with the defense of such proceeding (other than reasonable costs of
investigation), unless (i) the Indemnifying Party and the Indemnified Party
shall have mutually agreed to the retention of such separate counsel or (ii) the
named parties to or targets of any such proceeding (including any impleaded
parties) include both the Indemnified Party and the Indemnifying Party and the
Indemnified Party shall have reasonably concluded that there may be legal
defenses available to it which are different from or additional to those
available to the Indemnifying Party (in which case the Indemnifying Party shall
not be entitled to assume the defense of such proceeding on the Indemnified
Party's behalf). It is understood that the Indemnifying Party shall not, in
connection with any proceeding or related proceedings in the same jurisdiction,
be liable for the fees and expenses of more than one separate firm of attorneys
(in addition to any local counsel) at any time for all such Indemnified Parties,
and that all such fees and expenses shall be reimbursed as they are incurred. In
the case of any such separate firm for the Indemnified Parties, such firm shall
be designated in writing by the Indemnified Parties. The Indemnifying Party
shall not be liable for any settlement of any proceeding effected without its
written consent, but if settled with such consent (not to be unreasonably
withheld), or if there be a final judgment for the plaintiff, the Indemnifying
Party shall indemnify and hold harmless such Indemnified Parties from and
against any loss or liability (to the extent stated above) by reason of such
settlement or judgment. No Indemnifying Party will consent to entry of any
judgment or enter into any settlement which does not include as an unconditional
term thereof the giving by the claimant or plaintiff to the Indemnified Party of
a release from all liability in respect of such claim or proceeding.
4.4 CONTRIBUTION
If the indemnification provided for in this Article IV is unavailable
to an Indemnified Party in respect of any losses, claims, damages or liabilities
in respect of which indemnity is to be provided hereunder, then each such
Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall to the
fullest extent permitted by law contribute to the amount paid or payable by such
Indemnified Party as a result of such losses, claims, damages or liabilities in
such proportion as is appropriate to reflect the relative fault of such party in
connection with the statements or omissions that resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative fault of the Company and a Selling Holder shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by such party and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
The Company and each Selling Holder agree that it would not be just and
equitable if contribution pursuant to this Section 4.4 were determined by pro
rata allocation or by any other method of allocation that does not take account
of the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an Indemnified Party as a result of the
losses, claims, damages or liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such Indemnified Party
in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Article IV, no Selling Holder shall be
required to contribute any amount in excess of the amount by which the
12
net proceeds of the offering (after deducting the underwriting discount and
expenses) received by such Selling Holder exceeds the amount of any damages
which such Selling Holder has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any Person who was
not guilty of such fraudulent misrepresentation.
ARTICLE V
MISCELLANEOUS
5.1 PARTICIPATION IN UNDERWRITTEN REGISTRATIONS
No Person may participate in any underwritten registered offering
contemplated hereunder unless such Person (a) agrees to sell its securities on
the basis provided in any underwriting arrangements approved by the Persons
entitled hereunder to approve such arrangements, (b) completes and executes all
questionnaires, powers of attorney, custody arrangements, indemnities,
underwriting agreements and other documents reasonably required under the terms
of such underwriting arrangements and this Agreement and (c) furnishes in
writing to the Company such information regarding such Person, the plan of
distribution of the Registrable Securities and other information as the Company
may from time to time request or as may be legally required in connection with
such registration; provided, however, that no such Person shall be required to
make any representations or warranties in connection with any such registration
other than representations and warranties as to (i) such Person's ownership of
his or its Registrable Securities to be sold or transferred free and clear of
all liens, claims and encumbrances, (ii) such Person's power and authority to
effect such transfer and (iii) such matters pertaining to compliance with
securities laws as may be reasonably requested; provided further, however, that
the obligation of such Person to indemnify pursuant to any such underwriting
agreements shall be several, not joint and several, among such Persons selling
Registrable Securities, and the liability of each such Person will be in
proportion to, and provided further that such liability will be limited to, the
net amount received by such Person from the sale of such Person's Registrable
Securities pursuant to such registration.
5.2 RULE 144
The Company covenants that it will file any reports required to be
filed by it under the Securities Act and the Exchange Act and that it will take
such further action as the Liberty Holders may reasonably request to the extent
required from time to time to enable the Liberty Holders to sell Registrable
Securities without registration under the Securities Act within the limitation
of the exemptions provided by Rule 144 under the Securities Act, as such Rule
may be amended from time to time, or any similar rule or regulation hereafter
adopted by the Commission. Upon the request of any Liberty Holder, the Company
will deliver to such Liberty Holder a written statement as to whether it has
complied with such reporting requirements.
13
5.3 HOLDBACK AGREEMENTS
For so long as the Liberty Holders own 10% or more of any class of
capital stock of the Company, subject to their rights pursuant to Sections 2.1
and 2.2 hereof, each Liberty Holder and the Company agrees that if requested by
the managing Underwriters in an underwritten public offering of equity
securities of the Company (including debt securities convertible or exchangeable
for such equity securities), whether for the account of the Company or another
Person, it will not effect any public offer to sell, sale or distribution,
including pursuant to Rule 144 under the Securities Act, of any equity security
of the Company (or any such convertible or exchangeable debt security), in each
case other than as part of such underwritten public offering and subject to
other customary exceptions, during the seven days prior to, and during the
180-day period (or such lesser period as the managing Underwriters may require)
beginning on the effective date of the registration statement for such
underwritten offering (or, in the case of an offering pursuant to a Shelf
Registration, the pricing date for such underwritten offering), provided that in
connection with such underwritten offering each officer and director of the
Company and each Founder is subject to restrictions identical to those imposed
on the Liberty Holders.
5.4 TERMINATION
The registration rights granted under this Agreement will terminate at
such time as there shall no longer be any Registrable Securities.
5.5 AMENDMENTS, WAIVERS, ETC.
This Agreement may not be amended, waived or otherwise modified or
terminated except by an instrument in writing signed by the Company and the
holders of at least 50% of the Registrable Securities then held by all the
Liberty Holders.
5.6 COUNTERPARTS
This Agreement may be executed in one or more counterparts, all of
which shall be considered one and the same agreement. Each party need not sign
the same counterpart.
5.7 ENTIRE AGREEMENT
This Agreement constitutes the entire agreement and supersedes all
prior agreements and understandings, both written and oral, among the parties
with respect to the subject matter hereof.
5.8 GOVERNING LAW
This Agreement shall be governed by, and construed in accordance with,
the internal laws of the State of Colorado regardless of the laws that might
otherwise govern under applicable principles of conflicts of law thereof.
14
5.9 ASSIGNMENT OF REGISTRATION RIGHTS
Each Liberty Holder may assign all or any part of its rights under this
Agreement to any Person to whom such Liberty Holder sells, transfers, assigns or
pledges Registrable Securities. If a Liberty Holder shall assign its rights
pursuant to this Agreement in connection with the transfer of less than all its
Registrable Securities, such Liberty Holder shall also retain its rights with
respect to its remaining Registrable Securities.
5.10 NOTICES
All notices, demands, requests, consents, approvals or other
communications (collectively, "Notices") required or permitted to be given
hereunder or that are given with respect to this Agreement shall be in writing
and shall be delivered personally, telecopied (if receipt thereof is confirmed
to the Person to whom sent), sent by nationally recognized overnight delivery
service with charges prepaid or mailed by registered or certified mail with
charges prepaid (if return receipt is requested), addressed (a) as set forth
below, (b) to such other address as a party shall have specified most recently
by written notice to other parties or (c) in the case of Notice to a Liberty
Holder for whom an address has not been provided pursuant to this Section 5.10,
to the address of such Liberty Holder as shown on the stock transfer books of
the Company on the date of such Notice. Notice shall be deemed given on the date
of transmission if transmitted by facsimile (with oral confirmation of receipt).
Notice otherwise sent as provided herein shall be deemed given when actually
delivered (or when delivery is refused) by hand, by certified mail or by
overnight courier service.
To the Company:
UnitedGlobalCom, Inc.
0000 Xxxxx Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Attn: General Counsel
Telephone: (000) 000-0000
Fax: (000) 000-0000
with a copy to:
Holme Xxxxxxx & Xxxx LLP
0000 Xxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Attn: Xxxx Xxxxxx
Telephone: (000) 000-0000
Fax: (000) 000-0000
15
To Liberty Media or Liberty:
Liberty Media Corporation
00000 Xxxxxxx Xxxxxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attn: General Counsel
Telephone:(000) 000-0000
Fax: (000) 000-0000
with a copy to:
Xxxxx Xxxxx L.L.P.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx X. Xxxxxx
Telephone: (000) 000-0000
Fax: (000) 000-0000
and
Xxxxxxx & Xxxxxx
633 17th Street, suite 3000
Xxxxxx, Xxxxxxxx 00000
Attn: Xxx X. Xxxxxx
Telephone: (000) 000-0000
Fax: (000) 000-0000
5.11 INTERPRETATION
As used herein, except as otherwise indicated herein or as the context
may otherwise require, the words "include," "includes" and "including" are
deemed to be followed by "without limitation" whether or not they are in fact
followed by such words or words of like import; the words "hereof," "herein,"
"hereunder" and comparable terms refer to the entirety hereof and not to any
particular article, section or other subdivision hereof or attachment hereto;
any pronoun shall include the corresponding masculine, feminine and neuter
forms; the singular includes the plural and vice versa; references to any
agreement or other document are to such agreement or document as amended and
supplemented from time to time; references to any statute or regulation are to
it as amended and supplemented from time to time, and to any corresponding
provisions of successor statutes or regulations; references to "Article,"
"Section" or another subdivision are to an article, section or subdivision
hereof; and all references to "the date hereof," "the date of this Agreement" or
similar terms (but excluding references to the date of execution hereof) refer
to the date first above written, notwithstanding that the parties may have
executed this Agreement on a later date. Any reference herein to a "day" or
number of "days" (without the explicit qualification of "Business") shall be
deemed to refer to a calendar day or number of calendar days. If any action or
notice is to be taken or given on or by a particular calendar day, and such
calendar day is not a Business Day, then such action or notice may be taken or
given on the next succeeding Business Day.
16
IN WITNESS WHEREOF, each of the parties has caused this
Agreement to be signed on its behalf by its officer thereunto duly authorized as
of the date first written above.
NEW UNITEDGLOBALCOM, INC.
By:
---------------------------------------
Name:
Title:
LIBERTY MEDIA CORPORATION
By:
---------------------------------------
Name:
Title:
17
EXHIBIT 7.12(a)
EXCHANGE AGREEMENT
This Exchange Agreement (this "Agreement") dated as of _________ __,
2002, is entered into among New UnitedGlobalCom, Inc., a Delaware corporation
that upon the effectiveness of the Merger described under "Background" below
will be renamed UnitedGlobalCom, Inc. ("United"), and each of the individuals
indicated as a "Stockholder" on the signature pages hereto (the "Stockholders").
Background
As contemplated by the Agreement and Plan of Restructuring and Merger,
dated as of _________, 2002 (the "Merger Agreement"), among UnitedGlobalCom,
Inc., a Delaware corporation that upon the effectiveness of the Merger will be
renamed UGC Holdings, Inc. ("Old United"), United, United/New United Merger Sub,
Inc., a Delaware corporation ("Merger Sub"), Liberty Media Corporation, a
Delaware corporation, Liberty Media International, Inc., a Delaware corporation,
Liberty Global, Inc., a Delaware corporation, and the Persons indicated as
"Founders" on the signature pages thereto, the Stockholders have purchased and
are the record and beneficial holders of an aggregate of 1,500 shares of the
Series E Preferred Stock, par value $0.01 per share, of Old United (the
"Preferred Shares"). In the merger (the "Merger") of Merger Sub with and into
Old United contemplated by the Merger Agreement, the Preferred Shares will be
converted into an aggregate of 1,500,000 shares of the Class A Common Stock, par
value $0.01 per share ("Surviving Entity Class A Stock"), of Old United as the
surviving entity in the Merger (the "Surviving Entity"). Pursuant to the terms
of the Surviving Entity's Restated Certificate of Incorporation (the "Surviving
Entity Charter"), (a) immediately upon any transfer of a share of Surviving
Entity Class A Stock to any Person other than a Permitted Transferee who is also
a Principal or a Related Party, such share of Surviving Entity Class A Stock
shall automatically convert into one share of the Class C Common Stock, par
value $0.01 per share ("Surviving Entity Class C Stock"), of the Surviving
Entity and (b) immediately upon the occurrence of a Class B Event, each
outstanding share of Surviving Entity Class A Stock shall automatically convert
into one share of Surviving Entity Class C Stock. The parties hereto desire to
set forth the terms upon which the Stockholders may exchange shares of Surviving
Entity Class C Stock with United for shares of Class A Stock, par value $0.01
per share ("United Class A Stock"), of United. It is a condition to the
consummation of the transactions contemplated by the Merger Agreement, including
the Merger, that United and the Stockholders each execute and deliver this
Agreement.
Agreement
In consideration of the foregoing premises and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
Section 1. Certain Definitions. In this Agreement, the following terms
shall have the indicated meanings:
Affiliate. As defined in the Stockholders Agreement.
Agreement. As defined in the preamble.
Class B Event. As defined in the Surviving Entity Charter as in effect
immediately following the Merger.
Exchange Rate. [________] shares of United Class A Stock (as adjusted
from time to time to appropriately reflect the effect of any stock splits,
reverse splits, stock dividends, combinations and other similar events affecting
the shares of United Class A Stock or Surviving Entity Class C Stock and
occurring after the effective time of the Merger).(1)
Liberty. As defined in the Merger Agreement.
Merger. As defined under "Background" on the first page of this
Agreement.
Merger Agreement. As defined under "Background" on the first page of
this Agreement.
Merger Sub. As defined under "Background" on the first page of this
Agreement.
Old United. As defined under "Background" on the first page of this
Agreement.
Old United Series E Preferred Stock. The United Series E Preferred
Stock, as defined in the Merger Agreement.
Permitted Transferee. As defined in the Stockholders Agreement.
Person. Any individual, corporation, partnership, limited partnership,
limited liability company, trust or other legal entity.
Preferred Shares. As defined under "Background" on the first page of
this Agreement.
Principal. As defined in the Surviving Entity Charter as in effect
immediately following the Merger.
Promissory Note. As defined in the applicable Subscription Agreement.
Purchase Price. As defined in the applicable Subscription Agreement.
Related Party. As defined in the Specified Indentures.
----------
(1) The initial Exchange Rate will be equal to 1/1,500,000th of the result
(rounded to the nearest 1/10,000th of a share) of (A) the quotient of X divided
by Y minus (B) X. For purposes of the foregoing, "X" shall be equal to the
aggregate number of shares of Old United Class A Stock and Old United Class B
Stock outstanding immediately prior to the Closing and "Y" shall be equal to
0.995049505.
2
Specified Indentures. The (a) Indenture dated as of February 5, 1998,
between the Corporation and Firstar Bank, N.A. (f/k/a Firstar Bank of Minnesota,
N.A.) and (b) Indenture dated as of April 29, 1999, between the Corporation and
Firstar Bank, N.A., in each case as in effect on May 1, 2001.
Stockholders. As defined in the preamble.
Stockholders Agreement. The Stockholders Agreement, dated as of
________, 2002, among United, Liberty Media Corporation, Liberty Global, Inc.
and the individuals designated as Founders on the signature pages thereto.
Subscription Agreement. As defined in the Merger Agreement.
Surviving Entity. As defined under "Background" on the first page of
this Agreement.
Surviving Entity Charter. As defined under "Background" on the first
page of this Agreement.
Surviving Entity Class A Stock. As defined under "Background" on the
first page of this Agreement.
Surviving Entity Class C Stock. As defined under "Background" on the
first page of this Agreement.
United. As defined in the preamble.
United Class A Stock. As defined under "Background" on the first page
of this Agreement.
Section 2. Exchange. Subject to the terms and conditions of this
Agreement, each Stockholder shall be entitled at any time to cause United to
exchange shares of Surviving Entity Class C Stock held by such Stockholder for a
number of newly issued shares of United Class A Stock equal to the product of
(a) the number of shares of Surviving Entity Class C Stock surrendered for
exchange in accordance with this Agreement and (b) the Exchange Rate in effect
at the time of such exchange. No Stockholder shall transfer any shares of
Surviving Entity Class A Stock or Surviving Entity Class C Stock to any Person
other than a Permitted Transferee who is also a Principal or a Related Party.
Notwithstanding anything in the foregoing to the contrary, no Stockholder shall
be entitled to cause United to exchange any shares of Surviving Entity Class C
Stock held by such Stockholder pursuant to this Agreement if such Stockholder
delivered a Promissory Note pursuant to a Subscription Agreement in payment of
the Purchase Price of any shares of Old United Series E Preferred Stock, unless
such Stockholder's liability under any such Promissory Note has been satisfied
in full. If the Stockholder's liability under a Promissory Note is satisfied by
means of any transaction or arrangement involving such Stockholder or any
Affiliate of such Stockholder becoming indebted to United, such indebtedness (or
any substitute or successor arrangement) shall provide for full recourse to the
Stockholder or the relevant Affiliate in the event of the nonpayment thereof,
shall provide for the payment of interest at a fair market rate and contain
other terms and conditions consistent with
3
an arm's length, fair market transaction, all of which terms shall be reasonably
acceptable to Liberty. The Stockholder or the relevant Affiliate shall maintain
at all times from the incurrence of such indebtedness until such time that such
indebtedness is satisfied in full, unencumbered assets in an amount sufficient
for the repayment of such indebtedness.
Section 3. No Fractional Shares. No fractional shares of United Class A
Stock shall be issued upon the exchange of shares of Surviving Entity Class C
Stock. If more than one share of Surviving Entity Class C Stock is surrendered
for exchange by the same holder at the same time, the number of full shares of
United Class A Stock that shall be issuable upon exchange thereof shall be
computed on the basis of the aggregate number of shares of Surviving Entity
Class C Stock so surrendered for exchange. Any fractional shares of United Class
A Stock shall instead be rounded down to the nearest whole share if such
fraction is less than 0.5 and rounded up to the nearest whole share if such
fraction is equal to or greater than 0.5 and United shall issue in such exchange
the appropriate number of full shares of United Class A Stock.
Section 4. Procedure for Exchange. A Stockholder desiring to exchange
any shares of Surviving Entity Class C Stock pursuant to this Agreement shall
surrender the certificate or certificates representing the shares of Surviving
Entity Class C Stock to be exchanged, duly endorsed and accompanied by
instruments of transfer to the Secretary of United. Upon receipt by the
Secretary of the foregoing certificate or certificates and instruments of
transfer, United shall cause to be issued to the Stockholder who surrendered
such certificate or certificates, or such Stockholder's nominee or nominees, the
appropriate number of shares of United Class A Stock and shall issue and deliver
to such Stockholder, or such Stockholder's nominee or nominees, a certificate or
certificates representing such shares. Any such exchange shall be deemed to have
been effected at the close of business on the date such shares are surrendered
for exchange in accordance with this Agreement, and the Person or Persons
entitled to receive the shares of United Class A Stock issuable upon such
exchange shall be treated for all purposes as the record holder or holders of
such shares of United Class A Stock on that date. A number of shares of United
Class A Stock equal to the sum of (a) the number of shares issuable upon
exchange of shares of Surviving Entity Class C Stock held by Stockholders from
time to time plus (b) the number of shares issuable upon exchange of shares of
Surviving Entity Class C Stock issuable upon conversion of shares of Surviving
Entity Class A Stock outstanding from time to time shall be set aside and
reserved for issuance upon such exchange.
Section 5. Entire Agreement. This Agreement contains all the terms and
conditions agreed upon by the parties hereto, and no other agreements, oral or
otherwise, regarding the subject matter hereof shall have any effect unless in
writing and executed by the parties after the date of this Agreement.
Section 6. Applicable Law, Jurisdiction. This Agreement shall be
governed by Colorado law without regard to conflicts of law rules. The parties
hereby irrevocably submit to the exclusive jurisdiction of any Colorado State or
United States Federal court sitting in Colorado, and only a State or Federal
court sitting in Colorado will have any jurisdiction over any action or
proceeding arising out of or relating to this Agreement or any agreement
contemplated hereby, and the undersigned hereby irrevocably agree that all
claims in respect of such action or proceeding may be heard and determined in
such State or Federal court. The undersigned further waive any objection to
venue in such state and any objection to any action or proceeding in such
4
state on the basis of a non-convenient forum. Each party hereby IRREVOCABLY
WAIVES ANY RIGHT TO TRIAL BY JURY in any proceeding brought with respect to this
Agreement or the transactions contemplated hereby.
Section 7. Remedies. Each of the parties acknowledges and agrees that
in the event of any breach of this Agreement, the nonbreaching party would be
irreparably harmed and could not be made whole by monetary damages. Accordingly,
the parties to this Agreement, in addition to any other remedy to which they may
be entitled hereunder or at law or in equity, shall be entitled to compel
specific performance of this Agreement.
Section 8. Headings. The headings in this Agreement are for convenience
only and are not to be considered in interpreting this Agreement.
Section 9. Counterpart Execution. This Agreement may be executed in any
number of counterparts, each of which shall be deemed an original but all of
which will constitute a single agreement.
Section 10. Parties in Interest. Nothing in this Agreement, express or
implied, is intended to confer upon any Person other than the parties hereto and
their permitted successors and assigns any benefits, rights or remedies;
provided that, Liberty is an intended beneficiary of the provisions set forth in
the antepenultimate, penultimate and final sentences of Section 2, and each of
the parties hereto acknowledges and agrees that Liberty would be irreparably
harmed by any breach of such provisions, and could not be made whole by monetary
damages. Accordingly, Liberty, in addition to any other remedy to which it may
be entitled at law or in equity as an intended beneficiary of such provisions,
shall be entitled to compel specific performance of such provisions. Neither
this Agreement nor the rights or obligations of any party may be assigned or
delegated by operation of law or otherwise without the prior written consent of
each of the parties hereto; provided that, any Person that is a Permitted
Transferee who is also a Principal or a Related Party and who is the transferee
of any shares of Surviving Entity Class A Stock or Surviving Entity Class C
Stock shall, in connection with such transfer, execute a counterpart of this
Agreement and thereupon become a party to and subject to the terms of this
Agreement as a "Stockholder."
Section 11. Severability. The invalidity or unenforceability of any
provision of this Agreement in any application shall not affect the validity or
enforceability of such provision in any other application or the validity or
enforceability of any other provision.
Section 12. Interpretation. As used herein, except as otherwise
indicated herein or as the context may otherwise require, the words "include,"
"includes" and "including" are deemed to be followed by "without limitation"
whether or not they are in fact followed by such words or words of like import;
the words "hereof," "herein," "hereunder" and comparable terms refer to the
entirety of this Agreement and not to any particular section hereof; any pronoun
shall include the corresponding masculine, feminine and neuter forms; the
singular includes the plural and vice versa; references to any agreement or
other document are to such agreement or document as amended and supplemented
from time to time; references to "Section" or another subdivision are to a
section or subdivision hereof; and all references to "the date hereof," "the
date of this Agreement" or similar terms (but excluding references to the date
of execution hereof) refer to
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the date first above written, notwithstanding that the parties may have executed
this Agreement on a later date.
Section 13. Rules of Construction. The parties hereto agree that they
have been represented by counsel during the negotiation, preparation and
execution of this Agreement and, therefore, waive the application of any law,
regulation, holding or rule of construction providing that ambiguities in an
agreement or other document will be construed against the party drafting such
agreement or document.
Section 14. Waivers and Amendments. No waiver of any provision of this
Agreement shall be deemed a further or continuing waiver of that provision or a
waiver of any other provision of this Agreement. This Agreement may not be
amended except in a writing signed by all of the parties hereto.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
NEW UNITEDGLOBALCOM, INC.,
a Delaware corporation
By:
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Name:
------------------------------------------
Title:
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[STOCKHOLDERS]
EXHIBIT 7.12(b)
TERMS OF PREFERRED EXCHANGE AGREEMENT
The Preferred Exchange Agreement will contain terms reasonably satisfactory
to United, New United and Liberty relating to New United's obligation to, from
time to time, (a) accept shares of Surviving Entity Series E Preferred Stock,
Surviving Entity Series F Preferred Stock and Surviving Entity Series G
Preferred Stock tendered for exchange in accordance with the terms of the
related Certificates of Designation and issue shares of New United Class A Stock
in exchange therefore and (b) offer to exchange (at intervals set forth in the
Preferred Exchange Agreement or on a continual basis) shares of Surviving Entity
Class D Stock for shares of New United Class A Stock.
