EXHIBIT 10.11
SEVENTH AMENDMENT TO
TAX SHARING AGREEMENT
by and among
AT&T CORP.,
LIBERTY MEDIA CORPORATION,
for itself and each member of the Liberty Group,
TELE-COMMUNICATIONS, INC.,
LIBERTY VENTURES GROUP LLC,
LIBERTY MEDIA GROUP LLC,
TCI STARZ, INC.,
TCI CT HOLDINGS, INC.,
and
each Covered Entity listed on the signature pages hereof,
dated as of December 30, 1999
1
This Seventh Amendment, dated as of December 30, 1999 (this "Seventh
Amendment"), to the Tax Sharing Agreement (the "Agreement") dated as of March 9,
1999, as amended by the First Amendment to the Tax Sharing Agreement dated as of
May 28, 1999, the Second Amendment (the "Second Amendment") to the Tax Sharing
Agreement dated as of September 24, 1999, the Third Amendment to the Tax Sharing
Agreement dated as of October 20, 1999, the Fourth Amendment to the Tax Sharing
Agreement dated as of October 28, 1999, the Fifth Amendment to the Tax Sharing
Agreement dated as of December 6, 1999, and the Sixth Amendment to the Tax
Sharing Agreement dated as of December 10, 1999, is entered into by and among
AT&T Corp., a New York corporation ("AT&T"), Liberty Media Corporation, a
Delaware corporation ("Liberty"), for itself and on behalf of each member of the
Liberty Group, Tele-Communications, Inc., a Delaware corporation, Liberty
Ventures Group LLC, a Delaware limited liability company, Liberty Media Group
LLC, a Delaware limited liability company, TCI Starz, Inc., a Colorado
corporation, TCI CT Holdings, Inc., a Delaware corporation, each Covered Entity
listed on the signature pages hereof, and each entity which becomes a party to
the Agreement pursuant to Section 23 thereto. Unless otherwise stated herein,
capitalized terms used in this Seventh Amendment shall have the meaning ascribed
to such terms in the Agreement.
WHEREAS, the parties have entered into the Agreement which governs the
sharing, allocation and reimbursement of federal, state, local and foreign taxes
by the members of the Common Stock Group and the Liberty Group;
WHEREAS, following the merger of SounDelux Entertainment Group, Inc.,
a California corporation ("SounDelux California") with and into its wholly owned
subsidiary, Soundelux Entertainment Group of Delaware, Inc., a Delaware
corporation ("Soundelux") and the reclassification of the stock of Soundelux, as
the surviving corporation in such merger, AT&T intends to acquire Soundelux in a
transaction qualifying as a tax-free reorganization under Section 368(a) of the
Code pursuant to an Agreement and Plan of Merger dated as of December 30, 1999
(the "Soundelux Merger Agreement") for and on behalf of the Liberty Group;
WHEREAS, the parties intend that any Tax Items arising from or
relating to the Soundelux Merger (as defined below), including any Tax Items of
Soundelux or any of its direct or indirect assets or subsidiaries, shall be
considered Tax Items attributable to the Liberty Group except to the extent set
forth herein; and
WHEREAS, the parties now wish to amend the Agreement in certain
respects to clarify the intent of the parties with respect to the sharing,
allocation and reimbursement of federal, state, local and foreign taxes by the
members of the Common Stock Group and the Liberty Group and to make such other
amendments, as provided herein;
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, the parties hereby amend the Tax Sharing Agreement as follows:
1. The Agreement is amended by inserting as Section 3(d)(xvi):
2
"(xvi) Soundelux Merger. Any Tax Item arising from or relating to
----------------
Soundelux, SounDelux California, C-Group Merger Corp. ("Soundelux Merger Sub")
or any of their respective direct or indirect subsidiaries or affiliates (or any
predecessor or successor of any of the foregoing under applicable corporate,
limited liability company, partnership or other organizational law) (the
"Soundelux Entities"); the status of any member of the Common Stock Group as the
successor under Code Section 381 (or comparable provision of state, local or
foreign Tax law) to any of the Soundelux Entities; any direct or indirect asset,
liability, business, investment or operation of any of the Soundelux Entities;
the merger of Soundelux Merger Sub with and into Soundelux (the "Soundelux
Merger"), the Soundelux Merger Agreement, the Reclassified Company Charter (as
defined in the Soundelux Merger Agreement), the Post-Merger Restructuring
Transactions (as defined in the Soundelux Merger Agreement), the Xxxx
Contributions (as defined in the Soundelux Merger Agreement), the
Reincorporation Merger (as defined in the Soundelux Merger Agreement), the
Reclassification (as defined in the Soundelux Merger Agreement), the MTS Earnout
(as defined in the Soundelux Merger Agreement), the Escrow Agreement (as defined
in the Soundelux Merger Agreement), the Registration Rights Agreement (as
defined in the Soundelux Merger Agreement), the Shareholders Agreement (as
defined in the Soundelux Merger Agreement), the issuance of New Liberty Media
Group Tracking Stock in the Soundelux Merger or any other transaction
contemplated by the Soundelux Merger Agreement, the Reclassified Company Charter
(as defined in the Soundelux Merger Agreement), the Sixth Supplement to Inter-
Group Agreement dated December 30, 1999 (the "Sixth Supplement"), or this
Seventh Amendment, the Escrow Agreement (as defined in the Soundelux Merger
Agreement), the Registration Rights Agreement (as defined in the Soundelux
Merger Agreement), the Shareholders Agreement (as defined in the Soundelux
Merger Agreement), or any other document to which Soundelux, Liberty or any of
their respective Subsidiaries (as defined in the Soundelux Merger Agreement) or
Affiliates (as defined in the Soundelux Merger Agreement) is a party that is
referred to in the Soundelux Merger Agreement, the Reclassified Company Charter
(as defined in the Soundelux Merger Agreement), the Sixth Supplement, the Escrow
Agreement (as defined in the Soundelux Merger Agreement), the Registration
Rights Agreement (as defined in the Soundelux Merger Agreement), the
Shareholders Agreement (as defined in the Soundelux Merger Agreement), or this
Seventh Amendment or executed in connection therewith (any of the foregoing Tax
Items specified in this sentence shall be referred to hereinafter as a
"Soundelux Tax Item"), shall be for the account of the Liberty Group (except to
the extent otherwise provided in this Section 3(d)(xvi) with respect to any
Soundelux Tax Item), and Liberty shall pay AT&T any Tax (or any reduction in any
Tax refund, credit or other benefit) attributable thereto. Notwithstanding
anything in the preceding sentence to the contrary, any Soundelux Tax Item shall
be for the account of AT&T hereunder if, and to the extent that, such Soundelux
Tax Item arises directly from and would not have arisen but for (i) any breach
by AT&T or Soundelux Merger Sub of any of their representations or covenants in
Sections 2.8(a), 5.4 and (except to the extent of any conflict between the
requirements of Section 10.1 of the Soundelux Merger Agreement and Article 9 of
this Agreement) 10.1 of the Soundelux Merger Agreement or (ii) any breach by
AT&T of any representation or covenant in the Inter-Group Agreement (except in
the case of clauses (i) and
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(ii), to the extent arising out of or relating to the adoption by the Capital
Stock Committee of the AT&T Board of Directors of the resolutions attached as
Exhibit A to the Second Supplement to the Inter-Group Agreement, dated as of
September 24, 1999 (the "Second Supplement") or any action taken by AT&T or any
other member of the Common Stock Group in good faith in accordance with the
terms of the Second Supplement or Second Amendment in connection with the Stock
Repurchase Program (as defined in the Second Supplement) or any Repurchase
Transaction or any action taken by AT&T at the request of Liberty as
contemplated by Section 1.2(d) of the Sixth Supplement or otherwise in writing),
and AT&T shall pay to the applicable Governmental Authority or to Liberty any
Tax, and shall pay to Liberty any reduction in any Tax refund, credit or other
benefit that is for the account of Liberty hereunder, attributable thereto."
2. The Agreement is amended by (i) deleting in Section 9(b) the word
"or" after the words "or any Subsidiary of 4MC during any such period for such
period," and before the words "(V) Xxxx for any taxable period ..." and (ii)
inserting in Section 9(b) the words ", or (VI) Soundelux for any taxable period
ending on or prior to the date of the closing of the Soundelux Merger or any
Subsidiary of Soundelux during any such period for such period" after the words
"or any Subsidiary of Xxxx during any such period for such period" and before
the words "; provided, however, that (i) AT&T shall be entitled to
participate ...."
3. The Agreement is amended by (i) inserting in Section 3(d)(xiv)
the words "Soundelux Merger Sub," after the words "Xxxx Merger Sub," and before
the words "nor 4MC Merger Sub ..."; (ii) inserting in Section 3(d)(xiv) the
words "Soundelux Merger Agreement," after the words "Xxxx Merger Agreement," and
before the words "or 4MC Merger Agreement ..."; and (iii) inserting in Section
3(d)(xiv) the word "Soundelux," after the words "any action (or failure to act)
of any of AGI, Ascent, Xxxx," and before the words "4MC or any of their
respective subsidiaries ...."
4. The agreement is amended by (i) inserting in Section 3(d)(xv) the
words ""Soundelux Transaction Documents" shall mean the Soundelux Merger
Agreement, the Sixth Supplement, the Seventh Amendment, the Reclassified Company
Charter (as defined in the Soundelux Merger Agreement), the Shareholders
Agreement (as defined in the Soundelux Merger Agreement), the Escrow Agreement
(as defined in the Soundelux Merger Agreement), or the Registration Rights
Agreement (as defined in the Soundelux Merger Agreement), or any other document
to which Soundelux, Liberty or any of their respective Subsidiaries (as defined
in the Soundelux Merger Agreement) or Affiliates (as defined in the Soundelux
Merger Agreement) is a party that is referred to in the Soundelux Merger
Agreement, the Sixth Supplement, the Seventh Amendment, the Reclassified Company
Charter (as defined in the Soundelux Merger Agreement), the Escrow Agreement (as
defined in the Soundelux Merger Agreement), the Shareholders Agreement (as
defined in the Soundelux Merger Agreement) or the Registration Rights Agreement
(as defined in the Soundelux Merger Agreement) or executed in connection
therewith." after the words "or this Sixth Amendment or executed in connection
therewith." and before the words ""Xxxx/AT&T Option" shall mean ..." and (ii)
inserting in Section 3(d)(xv) the
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words "Soundelux Transaction Documents," after the words "pursuant to any of the
Xxxx Transaction Documents," and before the words "the Contribution
Agreement ..."
5. Except as otherwise expressly provided herein, the Agreement
shall continue in full force and effect without modification.
IN WITNESS WHEREOF, each of the parties has caused this Seventh
Amendment to be executed by its respective duly authorized officer as of the
date first set forth above.
AT&T CORP.
By:/s/ Xxxxxx X. Xxxx
------------------
Name: Xxxxxx X. Xxxx
Title: Assistant Secretary
LIBERTY MEDIA CORPORATION, for
itself and for each member of the Liberty
Group
By:/s/ Xxxxxxx X. Xxxxxx
---------------------
Name: Xxxxxxx X. Xxxxxx
Title: Senior Vice President
6
Each of the Covered Entities listed below on this page hereby executes this
Seventh Amendment as a member of the Liberty Group to acknowledge that such
Person is bound by this Seventh Amendment as a member of the Liberty Group:
LIBERTY SP, INC.
By:/s/ Xxxxxxx X. Xxxxxx
---------------------
Name: Xxxxxxx X. Xxxxxx
Title: Senior Vice President
LIBERTY AGI, INC.
By:/s/ Xxxxxxx X. Xxxxxx
---------------------
Name: Xxxxxxx X. Xxxxxx
Title: Senior Vice President
LMC INTERACTIVE, INC.
By:/s/ Xxxxxxx X. Xxxxxx
---------------------
Name: Xxxxxxx X. Xxxxxx
Title: Senior Vice President
TELE-COMMUNICATIONS, INC.
By:/s/ Xxxxxxx X. Xxxxx
--------------------
Name: Xxxxxxx X. Xxxxx
Title: Sr. Executive Vice President
LIBERTY VENTURES GROUP LLC
By:/s/ Xxxxxxx X. Xxxxx
--------------------
Name: Xxxxxxx X. Xxxxx
Title: Vice President
LIBERTY MEDIA GROUP LLC
By:/s/ Xxxxxxx X. Xxxxxx
---------------------
Name: Xxxxxxx X. Xxxxxx
Title: Senior Vice President
TCI STARZ, INC.
By:/s/ Xxxxxxx X. Xxxxx
--------------------
Name: Xxxxxxx X. Xxxxx
Title: Vice President
TCI CT HOLDINGS, INC.
By:/s/ Xxxxxxx X. Xxxxxx
---------------------
Name: Xxxxxxx X. Xxxxxx
Title: Senior Vice President
