STANDSTILL AGREEMENT BY AND AMONG MSG ENTERTAINMENT SPINCO, INC. (TO BE RENAMED MADISON SQUARE GARDEN ENTERTAINMENT CORP.) AND THE DOLAN FAMILY GROUP
Exhibit 10.1
BY AND AMONG
MSG ENTERTAINMENT SPINCO, INC.
(TO BE RENAMED MADISON SQUARE GARDEN ENTERTAINMENT CORP.)
AND
THE XXXXX FAMILY GROUP
Standstill Agreement (this “Agreement”), dated as of April 3, 2020, by and among MSG Entertainment Spinco, Inc. (to be renamed Madison Square Garden Entertainment Corp.), a Delaware corporation (the “Company”), each of the members of the Xxxxx Family Group listed on Schedule I to this Agreement (the “Xxxxx Family Parties”) and, as and to the extent provided herein, their transferees, successors and assigns.
WITNESSETH:
WHEREAS, as of the date of this Agreement, the Xxxxx Family Parties own all of the outstanding shares of Class B Common Stock of The Madison Square Garden Company, par value $.01 per share (“MSG Class B Common Stock”), and also own shares of Class A Common Stock of The Madison Square Garden Company, par value $.01 per share (“MSG Class A Common Stock”);
WHEREAS, The Madison Square Garden Company intends to distribute (the “Distribution”) to the holders of MSG Class A Common Stock all of the outstanding shares of the Company’s Class A Common Stock, $.01 par value (the “Class A Common Stock”), and to the holders of MSG Class B Common Stock all of the outstanding shares of the Company’s Class B Common Stock, $.01 par value (the “Class B Common Stock” and, together with the Class A Common Stock, the “Common Stock”); and
WHEREAS, the Company and the Xxxxx Family Parties wish to provide for certain restrictions that will be applicable to the Xxxxx Family Parties following the Distribution, all as provided herein.
NOW, THEREFORE, in consideration of the premises and the mutual agreements contained herein, the parties hereby agree as follows:
| 1. |
During the 12-month period beginning on the date the Distribution is consummated (the “Distribution Date”), the Xxxxx Family Parties shall obtain the prior approval of a majority of the Company’s Independent Directors prior to acquiring Common Stock of the Company through a tender offer that results in members of the Xxxxx Family Group beneficially owning more than 50% of the total number of outstanding shares of Common Stock of the Company. For purposes of this Standstill Agreement, the term “Independent Directors” means the directors of the Company who have been determined by the Company’s Board of Directors to be independent directors for purposes of the New York Stock Exchange corporate governance standards.
| 2. | Transfers and Related Matters. |
(a) Transfers. Each Xxxxx Family Party agrees that if at any time or from time to time prior to the first anniversary of the Distribution Date it desires to sell, transfer or otherwise dispose of, directly or indirectly (including any transfer of equity or beneficial interests in an entity that is a Xxxxx Family Party or any other entity to which shares of Class B Common Stock may have been transferred, directly or indirectly) (a “Transfer”), any or all of its shares of Class B Common Stock to any Xxxxx Person (as defined below) who is not a Xxxxx Family Party, such Xxxxx Family Party shall, prior to the consummation of such Transfer, cause the transferee to execute a joinder agreement in the form attached hereto as Exhibit A (a “Joinder”), pursuant to which such transferee shall agree to be bound by the
2
provisions of this Standstill Agreement as a Xxxxx Family Party. In addition, if prior to the first anniversary of the Distribution Date, any person becomes a member of the Xxxxx Family Group, the Xxxxx Family Parties shall cause such person to execute a Joinder. “Xxxxx Person” means any individual who is a member of the “immediate family” (as defined in Rule 16a-1(e) under the Securities Exchange Act of 1934, as amended) of a Xxxxx Family Party; an entity that controls, is controlled by, or is under common control with, a Xxxxx Family Party; or a trust or estate in which a Xxxxx Family Party has an interest (including as a trustee or beneficiary).
(b) Legends. The Company may, at its election, require that any certificate representing shares of Class B Common Stock that are covered by this Standstill Agreement and that are issued prior to the first anniversary of the Distribution Date shall have endorsed thereon a legend which shall read substantially as follows:
“The shares represented by this certificate are held subject to the terms of a certain Standstill Agreement, dated April 3, 2020, by and among Madison Square Garden Entertainment Corp. and the Xxxxx Family Group, as amended from time to time, a copy of which is on file with the Secretary of Madison Square Garden Entertainment Corp., and such shares may not be sold, transferred or otherwise disposed of, directly or indirectly, except in accordance with the terms of such Standstill Agreement.”
Following the first anniversary of the Distribution Date, any stockholder may require the Company to remove the foregoing legend from any of such stockholder’s share certificates promptly after the surrender of any such certificate for such purpose.
3
| 3. | Miscellaneous. |
(a) Specific Performance. The Company and each Xxxxx Family Party acknowledge that it will be impossible to measure in money the damage to a party hereto if another party fails to comply with any of the obligations imposed by this Standstill Agreement, that every such obligation herein is material and that, in the event of any such failure, the non-breaching party will not have an adequate remedy at law or in damages. Accordingly, each party hereto consents to the issuance of an injunction or the enforcement of other equitable remedies against it without bond or other security, to compel performance by such party of all the terms hereof, and waives any defenses of (i) failure of consideration, (ii) breach of any other provision of this Agreement and (iii) availability of relief in damages.
(b) Amendments. This Standstill Agreement may not be amended, modified or altered except by a writing duly signed by the party against which such amendment or modification is sought to be enforced and with the consent of a majority of the Independent Directors.
(c) Successors and Assigns. This Standstill Agreement shall be binding upon and inure to the benefit of the Company, the Xxxxx Family Parties and the respective successors and permitted assigns of the Company and the Xxxxx Family Parties. This Standstill Agreement may not be assigned by either the Company or a Xxxxx Family Party without the prior written consent of the other party hereto. The Company shall assign its rights and obligations hereunder (and no consent thereto shall be required under this Section 3(c)) to any entity that succeeds to all or substantially all of its assets, by merger or otherwise, including to any holding company that may be formed to be the parent of the Company, if such entity becomes the issuer of the securities then owned by the Xxxxx Family Parties.
4
(d) Termination. This Agreement shall terminate on the first anniversary of the date hereof, but a termination shall not affect any rights accrued prior to such termination.
(e) Counterparts. This Standstill Agreement may be executed in one or more counterparts, each of which shall be deemed an original, and all of which together shall constitute one and the same instrument.
(f) Headings. The headings in this Standstill Agreement are for reference purposes only and shall not constitute a part hereof.
(g) Construction. This Standstill Agreement shall be governed by, and construed in accordance with, the internal laws of the State of New York without giving any effect to principles of conflicts of laws.
(h) Notices. All notices hereunder shall be in writing and shall be deemed to have been given at the time when mailed by certified mail, addressed to the address below stated of the party to which notice is given, or to such changed address as such party may have fixed by notice:
5
To the Company:
MSG Entertainment Spinco, Inc. (to be renamed Madison Square Garden Entertainment Corp.)
Xxx Xxxxxxxxxxxx Xxxxx
Xxx Xxxx, XX 00000
Attn: General Counsel
Facsimile:
Email:
To a Xxxxx Family Party:
c/o Xxxxx X. Xxxxxxx
00 Xxxx Xxxx Xxxx
Xxxxxx Xxx, XX 00000
Facsimile: (000) 000-0000
E-mail: xxxxxxxxx@xxxxx.xxx
With copies to (which shall not constitute notice):
Xxxxx Family Office LLC
000 Xxxxxxxxx Xxxx Xxxxx
Xxxxxxxx, Xxx Xxxx 00000
Attn: Xxxxxx X. Xxxxx
Facsimile: (000) 000-0000
E-mail: XXxxxx@xxxxxx.xxx
and
Debevoise & Xxxxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxx
Facsimile: (000) 000-0000
E-mail: xxxxx@xxxxxxxxx.xxx
provided, however, that any notice of change of address shall be effective only upon receipt.
(i) Severability. If any provision of this Standstill Agreement or the application of any provision hereof to any person or circumstance is held invalid, the remainder of this Standstill Agreement and the application of such provision to other persons or circumstances shall not be affected unless the provision held invalid shall substantially impair the benefits of the remaining portions of this Standstill Agreement.
6
(j) Entire Agreement. This Standstill Agreement is intended by the parties as a final expression of their agreement and is intended to be a complete and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter contained herein. There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein. This Agreement supersedes all prior agreements and understandings between the parties with respect to such subject matter.
(k) Attorneys’ Fees. In any action or proceeding brought to enforce any provision of this Agreement, or where any provision hereof is validly asserted as a defense, the successful party shall be entitled to recover reasonable attorneys’ fees in addition to any other available remedy.
7
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first written above.
| MSG ENTERTAINMENT SPINCO, INC. (to be renamed Madison Square Garden Entertainment Corp.) | ||
| By: | /s/ Xxxxxx Xxxxxxxxxx | |
| Name: | Xxxxxx Xxxxxxxxxx | |
| Title: | President | |
| XXXXXXX X. XXXXX, individually, and as Trustee of the Xxxxxxx X. Xxxxx 2009 Revocable Trust and existing and future Grantor Retained Annuity Trusts for his benefit |
| /s/ Xxxxxxx X. Xxxxx |
| Xxxxxxx X. Xxxxx |
| XXXXX X. XXXXX, individually, and as Trustee of the Xxxxx X. Xxxxx 2009 Revocable Trust and existing and future Grantor Retained Annuity Trusts for her benefit |
| /s/ Xxxxx X. Xxxxx |
| Xxxxx X. Xxxxx |
| XXXXX X. XXXXX, individually |
| /s/ Xxxxx X. Xxxxx |
| Xxxxx X. Xxxxx |
[Signature Page to Standstill Agreement]
| XXXXXX X. XXXXX, individually |
| /s/ Xxxxx X. Xxxxx |
| Xxxxxx X. Xxxxx |
| XXXXXXXX XXXXX XXXXX, individually |
| /s/ Xxxxxxxx Xxxxx Xxxxx |
| Xxxxxxxx Xxxxx Xxxxx |
| XXXXXXX X. XXXXX-XXXXXXX, individually |
| /s/ Xxxxxxx X. Xxxxx-Xxxxxxx |
| Xxxxxxx X. Xxxxx-Xxxxxxx |
| XXXXXXXX X. XXXXX, individually, and as a Trustee of the Xxxxxxx X. Xxxxx Children Trusts FBO Xxxxxxxx X. Xxxxx, Xxxxxxx X. Xxxxx-Xxxxxxx, Xxxxxxxx Xxxxx Xxxxx, Xxxxxx X. Xxxxx and Xxxxx X. Xxxxx, and as Trustee of the Xxxx Xxxxx 1989 Trust and the Xxxx Xxxxx 1989 Trust |
| /s/ Xxxxxxxx X. Xxxxx |
| Xxxxxxxx X. Xxxxx |
| XXXX X. XXXXX, not individually, but as a Trustee of the Xxxxxxx X. Xxxxx Children Trust FBO Xxxxxxxx X. Xxxxx and the Xxxxxxx X. Xxxxx Children Trust FBO Xxxxx X. Xxxxx |
[Signature Page to Standstill Agreement]
| /s/ Xxxx X. Xxxxx |
| Xxxx X. Xxxxx |
| XXXXXXX X. XXXXX, not individually, but as a Trustee of the Xxxxxxx X. Xxxxx Children Trusts FBO Xxxxxxxx Xxxxx Xxxxx and the Xxxxxxx X. Xxxxx Children Trust FBO Xxxxxx X. Xxxxx |
| /s/ Xxxxxxx X. Xxxxx |
| Xxxxxxx X. Xxxxx |
| XXXX X. XXXXX, not individually, but as a Trustee of the Xxxxxxx X. Xxxxx Children Trust FBO Xxxxxxx X. Xxxxx-Xxxxxxx, the Xxxxxxx X. Xxxxx 2009 Family Trusts, the Xxxxxxx X. Xxxxx 2012 Grandchildren Trusts and the Xxxxxxx X. Xxxxx 2012 Descendants Trust |
| /s/ Xxxx X. Xxxxx |
| Xxxx X. Xxxxx |
| XXXXX XXXXX XXXXXXXX, not individually, but as a Trustee of the Xxxxxxx X. Xxxxx 2009 Family Trusts, the Xxxxxxx X. Xxxxx 2012 Grandchildren Trusts and the Xxxxxxx X. Xxxxx 2012 Descendants Trust |
| /s/ Xxxxx Xxxxx Xxxxxxxx |
| Xxxxx Xxxxx Xxxxxxxx |
[Signature Page to Standstill Agreement]
