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EXHIBIT 10.1
EXECUTION COPY
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AMENDED AND RESTATED
STOCKHOLDERS AGREEMENT
by and among
HALLMARK ENTERTAINMENT, INC.,
LIBERTY MEDIA CORPORATION,
LIBERTY CROWN, INC.,
VISN MANAGEMENT CORP.,
XX XXXXXX PARTNERS (BHCA), L.P.
THE XXX XXXXXX COMPANY, INC.
and
CROWN MEDIA HOLDINGS, INC.
dated as of
March 15, 2001
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TABLE OF CONTENTS
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ARTICLE I
DEFINITIONS
Section 1.1 Definitions................................................2
ARTICLE II
CORPORATE GOVERNANCE
Section 2.1 Composition of the Board of Directors of the Company.......7
Section 2.2 Removal....................................................7
Section 2.3 Vacancies..................................................7
Section 2.4 Board Committees...........................................7
Section 2.5 Termination of Rights and Obligations......................8
Section 2.6 Limitation on Transactions with Affiliates.................8
Section 2.7 Directors' Indemnification.................................9
Section 2.8 Corporate Opportunities Policy.............................9
ARTICLE III
TRANSFERABILITY AND PURCHASE RIGHTS
Section 3.1 Restrictions on Transferability............................9
Section 3.2 Restrictive Legend.........................................9
Section 3.3 Notice of Proposed Transfers; Securities Law Compliance...10
Section 3.4 Permitted Transfers.......................................10
Section 3.5 Tag-Along Rights..........................................10
Section 3.6 Purchase Rights...........................................12
ARTICLE IV
REGISTRATION RIGHTS
Section 4.1 Demand Registration.......................................13
Section 4.2 Piggy-back Registration...................................15
Section 4.3 Registration Procedures...................................16
Section 4.4 Registration Expenses.....................................19
Section 4.5 Indemnification and Contribution..........................19
Section 4.6 Other Provisions..........................................23
ARTICLE V
RIGHTS RELATING TO INVESTMENT IN ODYSSEY
Section 5.1 Actions of Odyssey Governance Committee...................23
Section 5.2 Restriction on Transfer of the Company's Interests in
Odyssey.................................................26
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Section 5.3 Termination of Rights and Obligations.....................26
ARTICLE VI
GENERAL
Section 6.1 Entire Agreement..........................................26
Section 6.2 Amendment and Waiver......................................26
Section 6.3 Notices...................................................26
Section 6.4 Assignment; Benefit.......................................29
Section 6.5 Absence of Presumption....................................29
Section 6.6 Counterparts..............................................29
Section 6.7 Headings..................................................29
Section 6.8 Governing Law; Jurisdiction and Forum.....................29
Section 6.9 Specific Enforcement......................................30
Section 6.10 Severability..............................................30
Section 6.11 Covered Shares............................................30
Exhibit A Notice of Registration Statement and Selling Securityholder
Questionnaire
Exhibit B Corporate Opportunities Policy
Exhibit C Designated Representative of NICC
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AMENDED AND RESTATED STOCKHOLDERS AGREEMENT
This AMENDED AND RESTATED STOCKHOLDERS AGREEMENT (this "Agreement"),
dated as of March 15, 2001 by and among Hallmark Entertainment, Inc., a Delaware
corporation ("HEI"), Liberty Media Corporation, a Delaware corporation
("Liberty"), Liberty Crown, Inc., a Delaware corporation ("Liberty Sub") and
transferee of Liberty's interest herein pursuant to Section 3.4 of the Original
Stockholders Agreement (as defined below), VISN Management Corp., a Delaware
corporation ("VISN"), XX Xxxxxx Partners (BHCA), L.P., a Delaware limited
partnership ("JPM") and successor to Chase Equity Associates, L.P., The Xxx
Xxxxxx Company, Inc., a New York corporation ("Xxxxxx") and together with
Liberty Sub, VISN and JPM, the "Minority Stockholders" and the Minority
Stockholders together with HEI, the "Contributing Stockholders"), and Crown
Media Holdings, Inc., a Delaware corporation (the "Company").
WITNESSETH:
WHEREAS, the Contributing Stockholders, as amended, other than Xxxxxx
and Liberty Sub are parties to a Contribution Agreement, dated as of January 27,
2000 (the "Contribution Agreement") pursuant to which they acquired shares of
Class A common stock, par value $.01 per share ("Class A Stock") or of Class B
common stock, par value $.01 per share ("Class B Stock") in return for, among
other things, the contribution of certain assets to the Company; and
WHEREAS, the Contributing Stockholders other than Xxxxxx have
previously entered into a Stockholders Agreement dated as of May 9, 2000 (the
"Original Stockholders Agreement") to govern certain of their rights, duties and
obligations; and
WHEREAS, on May 9, 2000, Liberty transferred (as defined below) its
interests in Company Common Stock (as defined below) to its Affiliate (as
defined below) Liberty Sub in accordance with Section 3.4 of the Original
Stockholders Agreement; and
WHEREAS, Xxxxxx and the Company are parties to a Contribution Agreement
dated as of the date hereof (the "Xxxxxx Contribution Agreement") pursuant to
which Xxxxxx is acquiring shares of Class A Stock, in return for, among other
things, the contribution of certain assets to the Company; and
WHEREAS, pursuant to the Contribution Agreement and the Xxxxxx
Contribution Agreement, the Contributing Stockholders have acquired and own the
number of shares of Class A Stock and Class B Stock set forth opposite their
respective names on Appendix I attached hereto and hereby made a part hereof;
and
WHEREAS, the parties hereto desire to enter into this Amended and
Restated Stockholders Agreement to amend the Original Stockholders Agreement to
add Xxxxxx as a party and to govern certain of their rights, duties and
obligations.
NOW THEREFORE, in consideration of the premises and the
representations, warranties, covenants and agreements contained herein, and for
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, and intending to be legally bound hereby, the parties
hereto hereby agree as follows:
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ARTICLE I
DEFINITIONS
Section 1.1. Definitions. (a) As used in this Agreement the following
defined terms shall have the following meanings:
"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
(a) 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 or otherwise or (b) beneficial
ownership of 10% or more of the voting securities of such Person.
"Affiliate Transaction" has the meaning set forth in Section 2.6.
"Agreement" has the meaning set forth in the Preamble.
"Applicable Securities" means in relation to a Registration Statement
the Registrable Securities identified in the related Demand Notice or Piggy-back
Notice.
"Average Price" means a price equal to the average of the closing
prices of the shares of Class A Stock on the exchange or national market on
which the Class A Stock is traded or listed for the five trading days
immediately preceding the date of the closing of a specified transaction.
"Board" has the meaning set forth in Section 2.1.
"Class A Stock" has the meaning set forth in the Recitals.
"Class B Stock" has the meaning set forth in the Recitals.
"Commission" means the United States Securities and Exchange
Commission.
"Company" has the meaning set forth in the Preamble.
"Company Common Stock" means Class A Stock and Class B Stock.
"Company Voting Stock" means Class A Stock and Class B Stock and all
other securities of the Company entitling the holder thereof to vote for the
election of directors to the Board.
"Contributing Stockholders" has the meaning set forth in the Preamble.
"Contribution Agreement" has the meaning set forth in the Recitals.
"Demand" has the meaning set forth in Section 4.1(a).
"Demand Notice" has the meaning set forth in Section 4.1(a).
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"Demanding Stockholder" has the meaning set forth in Section 4.1(a).
"DLJ" means Xxxxxxxxx, Lufkin and Xxxxxxxx Securities Corporation.
"Effective Time" means the date on which the Commission declares a
Registration Statement effective or on which a Registration Statement otherwise
becomes effective.
"Effectiveness Period" means as to a Registration Statement the period
during which such Registration Statement is effective.
"Election" means, with respect to a Registration, that a Stockholder
has delivered a completed and signed Notice and Questionnaire to the Company in
accordance with the provisions hereof and provided such other information with
respect to such Stockholder and its Applicable Securities as may be required by
the Company to enable such Stockholder to use the related Prospectus in
connection with sales of such Applicable Securities.
"Exchange Act" means the United States Securities Exchange Act of 1934,
as amended.
"Exercise Notice" has the meaning set forth in Section 3.6(c).
"HEI" has the meaning set forth in the Preamble.
"Xxxxxx" has the meaning set forth in the Preamble.
"Xxxxxx Contribution Agreement" has the meaning set forth in the
Recitals.
"Indemnified Person" has the meaning set forth in Section 4.5(a).
"Indemnitee" has the meaning set forth in Section 4.5(c).
"Indemnitor" has the meaning set forth in Section 4.5(c).
"Independent Directors" means members of the Company's Board who are
not officers, partners, employees or directors of the Stockholders, the Company
or their respective Affiliates, who have been selected in accordance with
Section 2.1(c) and who comply with the applicable definition of independent
director for purposes of the exchange or national market on which the Class A
Stock is traded or listed.
"Intended Offering Notice" has the meaning set forth in Section 4.2(a).
"IPO" means the initial public offering of shares of the Company's
Class A Stock on May 4, 2000.
"IPO Lock-up Period" has the meaning set forth in Section 3.1(b).
"JPM" has the meaning set forth in the Preamble.
"Liberty" has the meaning set forth in the Preamble.
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"Liberty Sub" has the meaning set forth in the Preamble.
"Minority Stockholders" has the meaning set forth in the Preamble.
"NASD Rules" means the Rules of the National Association of Securities
Dealers, Inc., as amended.
"NICC" means the National Interfaith Cable Coalition, Inc., a Maryland
not-for-profit corporation.
"NICC Representative" has the meaning set forth in Section 5.1.
"Notice and Questionnaire" means a Notice of Registration Statement and
Selling Securityholder Questionnaire substantially in the form of Exhibit A
hereto.
"Odyssey" means Odyssey Holdings, L.L.C., a Delaware limited liability
company.
"Odyssey Agreement" has the meaning set forth in Section 5.1.
"Original Stockholders Agreement" has the meaning set forth in the
Recitals.
"Parent" of a Person means any other Person which is the beneficial
owner (within the meaning of Rule 13d-3 under the Exchange Act) of a majority of
the securities ordinarily entitled to vote for the election of directors (or
persons performing similar functions) or the specified Person or directly, or
indirectly, through one or more intermediaries, controls the Person specified.
For purposes of this definition, control of a Person means the power, direct or
indirect, to direct or cause the direction of the management or policies of such
Person whether by contract or otherwise.
"Participating Stockholder" has the meaning set forth in Section
4.2(a).
"Person" means an individual, partnership, corporation, trust, limited
liability company or unincorporated organization, or other entity or
organization, including a government or agency or political subdivision thereof.
"Piggy-back Notice" has the meaning set forth in Section 4.2(a).
"Prospectus" means the prospectus (including, without limitation, any
preliminary prospectus, any final prospectus and any prospectus that discloses
information previously omitted from a prospectus filed as part of an effective
Registration Statement in reliance upon Rule 430A under the Securities Act or
any successor rule thereto) included in a Registration Statement, as amended or
supplemented by any prospectus supplement with respect to the terms of the
offering of any portion of the Applicable Securities covered by a Registration
Statement and by all other amendments and supplements to such prospectus,
including all material incorporated by reference in such prospectus and all
documents filed after the date of such prospectus by the Company under the
Exchange Act and incorporated by reference therein.
"Purchase Right Notice" has the meaning set forth in Section 3.6(c).
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"Registrable Securities" means (a) the shares of the applicable class
of Company Common Stock acquired by any Stockholder pursuant to the Contribution
Agreement or the Xxxxxx Contribution Agreement, (b) the shares of the applicable
class of Company Common Stock acquired by any Stockholder pursuant to Section
3.4(i), (c) the shares of the applicable class of Company Common Stock otherwise
acquired by any Stockholder up to a maximum of 5% of the outstanding shares of
Company Common Stock (calculated on a fully diluted basis) as of the date of a
Demand Notice or an Intended Offering Notice, as the case may be, and (d) any
securities of the Company issued or issuable with respect to any shares of
Company Common Stock referred to in subdivision (a), (b) or (c) upon conversion
of such shares or by way of stock dividend or stock split or in connection with
a combination or conversion of shares, recapitalization, merger, consolidation
or other reorganization or otherwise, other than in each case Unrestricted
Securities.
"Registration" means a registration under the Securities Act effected
pursuant to Section 4.1 or Section 4.2.
"Registration Expenses" means all expenses incident to the Company's
performance of or compliance with any Registration of Registrable Securities
pursuant to this Agreement, including, without limitation, National Association
of Securities Dealers, Inc. fees, all fees and expenses of complying with
securities or blue sky laws, all word processing, duplicating and printing
expenses, messenger and delivery expenses, the fees and disbursements of counsel
for the Company and of its independent public accountants, including the
expenses of any special audits or "comfort" letters required by or incident to
such performance and compliance, premiums and other costs of policies of
insurance obtained by the Company against liabilities arising out of the public
offering of Registrable Securities being registered, but excluding fees and
disbursements of counsel retained by any Stockholder, premiums and other costs
of policies of insurance obtained by any Stockholder or its agents or
underwriter against liabilities arising out of the public offering of the
Registrable Securities being registered, any fees and disbursements of
underwriters customarily paid by sellers of securities who are not the issuers
of such securities, all underwriting discounts and commissions and transfer
taxes, if any, and registration and filing fees relating to Registrable
Securities.
"Registration Statement" means a registration statement filed under the
Securities Act by the Company pursuant to the provisions of Section 4.1 or
Section 4.2, including the Prospectus contained therein, any amendments and
supplements to such registration statement, including post-effective amendments,
all exhibits and all material incorporated by reference in such registration
statement.
"Related Documents" has the meaning set forth in the Contribution
Agreement.
"Rules and Regulations" means the published rules and regulations of
the Commission promulgated under the Securities Act or the Exchange Act, as in
effect at any relevant time.
"Sale Notice" has the meaning set forth in Section 3.5(c).
"Securities Act" means the United States Securities Act of 1933, as
amended.
"Stockholder Allotment" has the meaning set forth in Section 3.5(a).
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"Stockholders" means each Person, other than the Company, who has
executed this Agreement and each Person who is required to become a party to
this Agreement in the future in accordance with the terms hereof.
"Stockholders' Shares" has the meaning set forth in Section 3.5(a).
"Subsidiary" of any Person means any corporation or other entity of
which securities or other ownership interests having ordinary voting power to
elect a majority of the Board of Directors or other Persons performing similar
functions are at the time directly or indirectly owned or controlled by such
Person or one or more Subsidiaries of such Person.
"Tag-Along Notice" has the meaning set forth in Section 3.5(c).
"Tag-Along Sale" has the meaning set forth in Section 3.5(a).
"Tag-Along Sale Date" has the meaning set forth in Section 3.5(c).
"Transfer" means a sale, assignment, encumbrance, gift, pledge,
hypothecation or other disposition of Company Common Stock or any interest
therein; provided that a pledge of Company Common Stock to a financial
institution in a bona fide transaction shall not be deemed to be a Transfer for
the purposes of this Agreement, so long as the Stockholder retains full voting
power in such shares prior to any event of default, it being understood that in
the event of such default such transferee shall have no rights or obligations
under this Agreement.
"Transferor Stockholder" has the meaning set forth in Section 3.3.
"Underwriter" means any underwriter of Applicable Securities designated
pursuant to Section 4.1(f) hereof.
"Unrestricted Securities" means any shares of Company Common Stock that
(i) have been registered under an effective registration statement under the
Securities Act and have been disposed of pursuant to such effective registration
statement, (ii) have been transferred in compliance with Rule 144 or Rule 145
under the Securities Act (or in each case any successor provision thereto) under
circumstances in which any legend relating to restrictions on transfer under the
Securities Act is removed, (iii) are transferable pursuant to paragraph (k) of
Rule 144 or paragraph (d) of Rule 145 under the Securities Act (or in each case
any successor provision thereto), (iv) have otherwise been transferred and a new
security not subject to transfer restrictions under the Securities Act has been
delivered upon such transfer by or on behalf of the Company or (v) cease to be
outstanding.
"VISN" has the meaning set forth in the Preamble.
"VISN Director" has the meaning set forth in Section 5.1.
(b) For the purposes hereof, (i) words in the singular shall be held to
include the plural and vice versa and words of one gender shall be held to
include the other gender as the context requires, (ii) the terms "hereof,"
"herein," and "herewith" and words of similar import shall, unless otherwise
stated, be construed to refer to this Agreement as a whole and not to any
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particular provision of this Agreement, and Article, Section and paragraph
references are to the Articles, Sections and paragraphs to this Agreement unless
otherwise specified, (iii) the word "including" and words of similar import when
used in this Agreement shall mean "including, without limitation," unless the
context otherwise requires or unless otherwise specified, (iv) the word "or"
shall not be exclusive, and (v) provisions shall apply, when appropriate, to
successive events and transactions.
ARTICLE II
CORPORATE GOVERNANCE
Section 2.1. Composition of the Board of Directors of the Company.
Subject to Section 2.5, each of the Stockholders hereby agrees to take, at any
time and from time to time, all action necessary such that the Board of
Directors of the Company (the "Board") shall consist of not less than 11
directors, who shall be nominated as follows: (a) HEI shall have the right to
nominate six members of the Board; provided that one such nominee shall be the
Chief Executive Officer of the Company, (b) Liberty, VISN and JPM shall each
have the right to nominate one member of the Board and (c) at least two members
of the Board shall be Independent Directors nominated by the Board. Each
Stockholder entitled to vote for the election of directors to the Board shall
vote its shares of Company Voting Stock or execute written consents, as the case
may be, and shall take all other action necessary in order to ensure compliance
with this Section 2.1. The Company shall take such action as may be required
under applicable law to and shall otherwise use reasonable efforts to cause the
composition of the Board to be as set forth in this Section 2.1.
Section 2.2. Removal. Each Stockholder agrees that at any time that it
is then entitled to vote or execute a written consent for the removal and/or
replacement of any director of the Company, (a) it shall not vote or execute a
written consent for any of its shares of Company Voting Stock in favor of the
removal and/or replacement of any individual who shall have been nominated
pursuant to Section 2.1, unless the Stockholder entitled to nominate such
director shall have requested such removal and/or replacement in writing and (b)
it shall vote or execute a written consent for all of its shares of Company
Voting Stock in favor of and shall take all other action necessary to cause the
removal and/or replacement of an individual nominated pursuant to Section 2.1 if
so requested in writing by the Stockholder entitled to nominate such individual.
Subject to Section 2.5, nothing contained in this Section 2.2 shall affect the
right of any Stockholder to nominate a member of the Board pursuant to Section
2.1.
Section 2.3. Vacancies. If, as a result of the death, disability,
retirement, resignation, removal or otherwise there shall exist or occur any
vacancy on the Board, then the Stockholder entitled under Section 2.1 to
nominate such director whose death, disability, retirement, resignation or
removal resulted in such vacancy, may, subject to the provisions of Section 2.5,
designate another individual to fill such capacity and serve as a director of
the Company. Each Stockholder shall, if such Stockholder is then entitled to
vote for the election of such designee as a director of the Company, vote or
execute a written consent for its shares of Company Voting Stock in order to
ensure that such designee be elected to the Board and the Company shall use
reasonable efforts to cause such vacancy to be filled by such designee.
Section 2.4. Board Committees. The Board shall establish an Audit
Committee which shall consist of the Independent Directors.
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Section 2.5. Termination of Rights and Obligations. The right of any
Stockholder to nominate or designate a member or members of the Board pursuant
to this Article II, and all related obligations of the Company and each other
Stockholder with respect thereto contained in this Article II, shall terminate
on the later of such date as such Stockholder (i) ceases to beneficially own in
the aggregate at least 5% of the shares of Company Common Stock then issued and
outstanding and (ii) ceases to beneficially own at least 75% of the Company
Common Stock set forth opposite such Stockholder's name on Appendix I
(appropriately adjusted for stock splits, dividends or combinations of shares of
Company Common Stock after the IPO); provided that the provisions of Section 4.5
shall survive the termination of this Agreement.
Section 2.6. Limitation on Transactions with Affiliates. The Company
shall not, and shall not permit any of its Subsidiaries to, directly or
indirectly, sell any of its material properties or assets to, or purchase any
material property or assets from, or enter into any material contract,
transaction, agreement, understanding, loan, advance or guaranty with, or for
the benefit of, any Affiliate of the Contributing Stockholders (each of the
foregoing, an "Affiliate Transaction"), unless such Affiliate Transactions are
entered into in good faith and on commercially reasonable terms and (i) with
respect to any Affiliate Transactions that, together with all related Affiliate
Transactions, have an aggregate value of not more than $35,000,000, such
Affiliate Transactions are approved by a majority of the Independent Directors
and (ii) with respect to any Affiliate Transactions that, together with all
related Affiliate Transactions, have an aggregate value of more than
$35,000,000, such Affiliate Transactions are approved by a majority of the
members of the Board not nominated by such Contributing Stockholder.
Notwithstanding the foregoing, the following shall be deemed not to be
Affiliate Transactions: (i) transactions pursuant to the Trademark License
Agreement dated as of December 1, 2000, by and between Hallmark Cards,
Incorporated and Crown Media International, Inc., the Trademark License
Agreement dated as of December 1, 2000, by and between Hallmark Cards,
Incorporated and Crown Entertainment Limited, the Trademark License Agreement
dated as of May 1, 2000 by and between Xxxxxxxx Xxxxxxxxx, Inc. and Odyssey, the
Program License Agreement dated May 12, 1998 between HED and H&H Programming -
Asia, LLC (or its assignee), the Security Agreement dated as of August 1, 1999
by and between Hallmark Entertainment Networks, Inc. and Hallmark Cards,
Incorporated, the Promissory Note dated as of November 19, 1999, by and between
HC Crown Corporation and Crown Media, Inc., any of the Related Documents or any
contract, agreement, understanding, loan or guaranty described in, or filed as
an exhibit to, the registration statement, as amended, under which shares were
sold in the IPO; (ii) transactions pursuant to the Contribution Agreement or the
Xxxxxx Contribution Agreement; (iii) transactions in connection with the
non-exclusive licensing of any service xxxx or trademark of an Affiliate or
Affiliates of any Contributing Stockholder to the Company that do not require
payment (other than in connection with names of movies, miniseries or series);
(iv) transactions pursuant to the Program License Agreement dated as of the date
hereof between XX.XX & Merchandising AG and Odyssey, the Program License
Agreement dated November 13, 1998 between Xxxxxx and Odyssey and the Amendment
thereto dated as of the date hereof, the License Agreement dated as of the date
hereof between Xxxxxx and Odyssey, the Program License Agreement dated May 12,
1998 between Xxxxxx and H&H Programming-Asia, LLC (or its assignee), and the
License Agreement dated May 12, 1998 between Xxxxxx and H&H Programming-Asia,
LLC; and (v)
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transactions between or among the Company and any wholly owned Subsidiary of the
Company, provided that such Subsidiary remains a wholly owned Subsidiary of the
Company.
Section 2.7. Directors' Indemnification. During the term of this
Agreement, the Company will use its reasonable best efforts to obtain directors'
and officers' liability insurance covering the full Board in a form and amount
consistent with industry practice to the extent such insurance is available on
reasonable terms.
Section 2.8. Corporate Opportunities Policy. The Board of Directors of
HEI has adopted and approved a corporate opportunities policy substantially in
the form of Exhibit B. HEI shall act in accordance with the provisions of its
corporate opportunities policy during the term of such policy unless otherwise
agreed by a majority of the members of the Board not nominated by HEI.
ARTICLE III
TRANSFERABILITY AND PURCHASE RIGHTS
Section 3.1. Restrictions on Transferability. (a) No Company Common
Stock may be Transferred except upon compliance with the provisions of the
Securities Act and this Agreement, and any attempted Transfer other than in
accordance with the terms hereof is void ab initio and transfers no right, title
or interest in or to such Company Common Stock to the purported transferee,
buyer, donee, assignee or encumbrance holder.
(b) Except as permitted by Section 3.4, the Stockholders agree that
they will not Transfer more than 25% of the shares of Company Common Stock set
forth opposite such Stockholder's name on Appendix I (appropriately adjusted for
stock splits, stock dividends or combinations of shares of Company Common Stock
after the date hereof) prior to the second anniversary of the Original
Stockholders Agreement, without the written consent of each other Stockholder.
Section 3.2. Restrictive Legend. (a) Each certificate representing any
portion of Company Common Stock that is held by a Stockholder shall be stamped
or otherwise imprinted with a legend in substantially the following form (in
addition to any legend required under applicable state securities laws):
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"). THE SECURITIES MAY NOT BE SOLD OR OFFERED
FOR SALE OR OTHERWISE DISTRIBUTED EXCEPT IN CONJUNCTION WITH
AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER
THE SECURITIES ACT, OR IN COMPLIANCE WITH RULE 144 OR PURSUANT
TO ANOTHER EXEMPTION. THE SECURITIES ARE ALSO SUBJECT TO
PROVISIONS OF THE STOCKHOLDERS AGREEMENT DATED MAY 9, 2000, AS
IT MAY BE AMENDED FROM TIME TO TIME IN ACCORDANCE WITH THE
PROVISIONS
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THEREOF (THE "AGREEMENT"), WHICH CONTAINS RESTRICTIONS ON
TRANSFER AND TAG-ALONG PROVISIONS. COPIES OF THE AGREEMENT
MAY BE OBTAINED FROM THE SECRETARY OF THE COMPANY."
(b) If any shares of Company Common Stock shall cease to be Registrable
Securities, the Company shall, upon the written request of the holder thereof
and such other documentation as may be reasonably requested, issue to such
holder a new certificate evidencing such shares without the legend required by
Section 3.2(a) endorsed thereon.
Section 3.3. Notice of Proposed Transfers; Securities Law Compliance.
Prior to any proposed Transfer of any Company Common Stock, unless there is in
effect a Registration Statement covering the proposed Transfer, the Stockholder
intending to Transfer such Company Common Stock (the "Transferor Stockholder")
shall give written notice to the Company of such Transferor Stockholder's
intention to effect such Transfer. Each such notice shall set forth the name of
the proposed transferee, the number of shares proposed to be transferred and the
proposed amount and form of consideration to be paid for such Company Common
Stock (other than Transfers by a Stockholder to one or more Affiliates of such
Stockholder); provided that in the event of a Transfer pursuant to Rule 144
under the Securities Act, the Transferor may satisfy the requirements of this
Section 3.3 by filing Form 144 with the Company at the time such form is filed
with the Securities and Exchange Commission.
Section 3.4. Permitted Transfers. Notwithstanding Section 3.1, but
subject to compliance with the applicable provisions of the Securities Act and
Section 3.3, the following Transfers may be made and HEI shall have no
obligation under Section 3.5 with respect thereto: (i) Transfers by a
Stockholder to one or more Affiliates of such Stockholder, or to one or more
executives of such Stockholder pursuant to a stock-based compensation plan, or
to one or more other Stockholders, or to one or more Affiliates of any other
Stockholder, subject to the transferee executing a signature page hereof and
thereby becoming a party hereto (as a Stockholder) and agreeing that it shall
receive the same rights hereunder and be bound by the same obligations
hereunder, except as provided in this Section 3.4 and Section 3.5, as the
Transferor Stockholder; (ii) Transfers pursuant to a merger, consolidation or
other business combination involving all of the outstanding Company Common Stock
and a third party which, prior to entering into an agreement with the Company
with respect to such business combination, was not an Affiliate of the Company
or tender or exchange offer for all of the outstanding Company Common Stock by a
third party which, prior to the commencement of such offer, was not an Affiliate
of the Company; or (iii) Transfers by Liberty Sub to UnitedGlobalCom, Inc. or an
Affiliate thereof.
Section 3.5. Tag-Along Rights. (a) Except as permitted by Section 3.4
or in the case of sales pursuant to Article IV, if HEI, at any time or from time
to time, in a single transaction or series of related transactions occurring
within a six-month period, or within a longer period if pursuant to a single
agreement, proposes to Transfer 20% or more of the outstanding shares of Company
Common Stock (a "Tag-Along Sale"), then each Minority Stockholder shall have the
right, but not the obligation, to participate in such Tag-Along Sale by selling
the number of shares of Company Common Stock respectively owned by it as
calculated in the following manner. Such shares of Company Common Stock which
were acquired by the Minority
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Stockholders pursuant to the Contribution Agreement or the Xxxxxx Contribution
Agreement and which are owned by the Minority Stockholders or their Affiliates
which are Parties to this Agreement are hereinafter referred to as the
"Stockholders' Shares;" provided, however that shares of Company Common Stock
transferred from another Stockholder to a Minority Stockholder or its Affiliates
(other than an Affiliate of such transferring Stockholder) shall not be deemed
to be Stockholders' Shares. The number of shares of Company Common Stock that
each Minority Stockholder shall be entitled to include in such Tag-Along Sale
(the "Stockholder Allotment") shall equal the product of (i) the total number of
shares of Company Common Stock proposed to be Transferred pursuant to the
Tag-Along Sale or such greater number of shares that the proposed purchaser in
the Tag-Along Sale shall agree to purchase or otherwise acquire, times (ii) a
fraction, the numerator of which shall equal the number of Stockholders' Shares
owned by such Minority Stockholder and its Affiliates which are parties to this
Agreement on the date of the Sale Notice, and the denominator of which shall
equal the sum of (A) the number of shares of Company Common Stock owned by HEI
and its Affiliates on the date of the Sale Notice plus (B) the total number of
Stockholders' Shares owned by all Minority Stockholders and their Affiliates
which are parties to this Agreement on the date of the Sale Notice.
(b) Any such sales by the Minority Stockholders shall be on the same
terms and conditions as the proposed Tag-Along Sale by HEI; provided, however
that no participating Minority Stockholder shall be required to make any
representation or warranty in connection with the Tag-Along Sale, other than as
to the enforceability of each agreement entered into in connection with such
Tag-Along Sale with respect to the Minority Stockholder and its ownership and
authority to sell, free of consent and approval requirements, liens, claims and
encumbrances, the shares of Company Common Stock proposed to be sold by it. Each
participating Minority Stockholder shall (and hereby agrees to), without
limitation as to time, indemnify and hold harmless, to the full extent permitted
by law, each of the other Stockholders against all losses, claims, damages,
liabilities, costs (including costs of preparation) and expenses (including
attorneys' fees and disbursements) arising out of or relating to any
representation or warranty made by, or covenant of, such participating Minority
Stockholder or any agent, employee, officer, or director of such participating
Minority Stockholder in connection with or relating to or under the terms of
each agreement entered into in connection with such Tag-Along Sale, except
insofar as the same are based solely upon written information furnished in
writing to such participating Minority Stockholder by such other Minority
Stockholder expressly for use therein.
(c) HEI shall promptly provide each of the Minority Stockholders with
written notice (the "Sale Notice") not less than 15 days prior to the proposed
date of the Tag-Along Sale (the "Tag-Along Sale Date"). In order to facilitate
the prompt delivery of the Sale Notice, the Company hereby covenants to provide
HEI and the Minority Stockholders participating in a Tag-Along Sale access to
the stock record books of the Company. Each Sale Notice shall set forth:
(i) the name of each proposed transferee or purchaser of Company
Common Stock in the Tag-Along Sale;
(ii) the number of shares of Company Common Stock proposed to be
Transferred by HEI and, if applicable, such greater number of shares
that the proposed purchaser is willing to purchase in connection with
the Tag-Along Sale;
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(iii) the proposed amount and form of consideration to be paid
for such shares of Company Common Stock and the material terms and
conditions of payment offered by each proposed transferee or
purchaser;
(iv) confirmation that the proposed purchaser or transferee has
been informed of the "Tag-Along Rights" provided for herein and has
agreed to purchase shares of Company Common Stock in accordance with
the terms hereof;
(v) such Minority Stockholder's Stockholder Allotment; and
(vi) the Tag-Along Sale Date.
Each Minority Stockholder who wishes to participate in the Tag-Along
Sale shall provide written notice (or oral notice confirmed immediately in
writing) (the "Tag-Along Notice") to HEI not less than seven days prior to the
Tag-Along Sale Date. The Tag-Along Notice shall set forth the number of shares
of Company Common Stock that such Minority Stockholder elects to include in the
Tag-Along Sale, which shall not exceed such Minority Stockholder's Stockholder
Allotment.
HEI shall determine the aggregate number of shares of Company Common
Stock to be sold by each participating Minority Stockholder in any given
Tag-Along Sale in accordance with the terms hereof, and the Tag-Along Notices
given by the Minority Stockholders shall constitute their binding agreements to
sell such shares at the price and on the terms and conditions applicable to such
sale.
If a Tag-Along Notice is not received by HEI participating in the
Tag-Along Sale from a Minority Stockholder prior to the seven-day period
specified above, HEI shall have the right to Transfer the number of shares of
Company Common Stock specified in the Sale Notice to the proposed purchaser or
transferee without any participation by such Minority Stockholder, but only at a
price and upon terms and conditions no more favorable to HEI than stated in such
Sale Notice and only if such sale occurs on a date within 60 days of the
Tag-Along Sale Date.
Section 3.6. Purchase Rights. (a) In the event that the Company
proposes to issue Company Common Stock in a public offering in exchange for
cash, and as a result thereof Liberty and its Affiliates which are Parties to
this Agreement would cease to own in the aggregate at least 10% of the
outstanding Company Common Stock, then Liberty shall have the right to purchase
from the Company for cash, at a price per share equal to the public offering
price, that number of shares of Class A Stock such that it and its Affiliates
which are Parties to this Agreement own in the aggregate 10% of the outstanding
Company Common Stock immediately following such public offering.
(b) In the event that the Company proposes to issue Company Common
Stock in a private transaction in exchange for cash, and as a result thereof
Liberty and its Affiliates which are Parties to this Agreement would cease to
own in the aggregate at least 10% of the outstanding Company Common Stock, then
Liberty shall have the right to purchase from the Company for cash, at a price
per share equal to the Average Price on the closing date of such transaction,
that number of shares of Class A Stock such that it and its Affiliates which are
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Parties to this Agreement own in the aggregate 10% of the outstanding Company
Common Stock immediately following such private transaction.
(c) The Company shall promptly provide Liberty with written notice (the
"Purchase Right Notice") not less than 15 days prior to the proposed date of the
issuance of Company Common Stock that is subject to Section 3.6(a) or (b). Each
Purchase Right Notice shall set forth the number of shares of Company Common
Stock proposed to be issued, the proposed date of the issuance and the number of
shares of Class A Stock which Liberty is entitled to purchase pursuant to
Section 3.6(a) and (b).
If Liberty wishes to purchase shares pursuant to Section 3.6(a) or (b),
Liberty shall provide written notice (or oral notice confirmed immediately in
writing) (the "Exercise Notice") to the Company not less than seven days prior
to the proposed issuance date. The delivery of the Exercise Notice shall
constitute Liberty's binding agreement to purchase the number of shares of Class
A Stock set forth in the Purchase Right Notice at the price and on the terms set
forth in this Section 3.6. The closing of such purchase shall be on the closing
date for the public offering under Section 3.6(a) or the private transaction
under Section 3.6(b), as the case may be.
If an Exercise Notice is not received by the Company prior to the
seven-day period specified above, Liberty's rights under this Section 3.6 shall
expire with respect to such issuance.
ARTICLE IV
REGISTRATION RIGHTS
Section 4.1. Demand Registration. (a) (i) HEI shall have the right, on
not more than four occasions in the aggregate, and no more frequently than once
during any six-month period, and (ii) the Minority Stockholders as a group shall
have the right (though such right need not be jointly exercised by the Minority
Stockholders), on not more than two occasions in the aggregate (it being
understood and agreed that two or more Minority Stockholders may make joint
Demands hereunder or any Minority Stockholder may join in a Demand made by any
other Minority Stockholder, and any such joint Demand or joining in of a Demand
shall be deemed to be a single Demand for all purposes hereof), and no more
frequently than once during any six-month period, to require the Company to
register for offer and sale under the Securities Act (a "Demand") all or a
portion of the Registrable Securities held by such Stockholder, subject to the
restrictions set forth herein; provided that no Stockholder shall be entitled to
make a Demand hereunder unless the Registrable Securities subject to such Demand
represent at least 7% of the aggregate shares of Company Common Stock then
issued and outstanding.
As promptly as practicable after the Company receives from a
Stockholder (the "Demanding Stockholder") a notice pursuant to this Section
4.1(a) (a "Demand Notice"), a copy of which shall have also been delivered to
each other Minority Stockholder at the same time as to the Company, demanding
that the Company register for offer and sale under the Securities Act
Registrable Securities, subject to Section 4.1(b), the Company shall (i) use all
reasonable efforts to file as promptly as reasonably practicable with the
Commission a Registration Statement relating to the offer and sale of the
Applicable Securities on such form as the Company may reasonably deem
appropriate (provided that the Company shall not, unless the Company
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otherwise determines, be obligated to register any securities on a "shelf"
registration statement or otherwise to register securities for offer or sale on
a continuous or delayed basis) and, thereafter, (ii) after the filing of an
initial version of the Registration Statement, use reasonable efforts to cause
such Registration Statement to be declared effective under the Securities Act as
promptly as practicable after the date of filing of such Registration Statement;
provided, however, that no Demanding Stockholder shall be entitled to be named
as a selling securityholder in the Registration Statement or to use the
Prospectus forming a part thereof for resales of Registrable Securities unless
such Demanding Stockholder has made an Election. Subject to Section 4.1(b), the
Company shall use reasonable efforts to keep each Registration Statement
continuously effective in order to permit the Prospectus forming a part thereof
to be usable by such Demanding Stockholder for resales of Registrable Securities
for an Effectiveness Period ending on the earlier of (i) 30 days from the
Effective Time of such Registration Statement and (ii) such time as all of such
securities have been disposed of by the selling securityholders.
(b) The Company shall have the right to postpone (or, if necessary or
advisable, withdraw) the filing, or delay the effectiveness, of a Registration
Statement, or fail to keep such Registration Statement continuously effective or
not amend or supplement the Registration Statement or included Prospectus, if
the Company determines based upon the advice of counsel that it would be
advisable to not disclose in the Registration Statement a planned or proposed
financing, acquisition or other corporate transaction or other material
information, and the Company shall have determined in good faith that such
disclosure is not in the best interests of the Company and its stockholders;
provided that no one such postponement shall exceed 90 days in any six-month
period and all such postponements shall not exceed 180 days in the aggregate.
The Company shall advise the Demanding Stockholder of any such determination as
promptly as practicable after such determination.
(c) In connection with an underwritten offering, if the managing
underwriter or underwriters advise the Company that in its or their opinion the
number of Applicable Securities subject to a Demand exceeds the number which can
be sold in such offering, the Company shall include in such Registration the
number of Applicable Securities that, in the opinion of such managing
underwriter or underwriters, can be sold in such offering (provided that, in the
event of a joint Demand, the Applicable Securities included shall be allocated
pro rata among the Demanding Stockholders on the basis of the relative number of
Applicable Securities each such Demanding Stockholder has requested to be
included in such Registration).
(d) The Company may include in any registration requested pursuant to
Section 4.1(a) hereof other securities for sale for its own account or for the
account of another Person, subject to the following sentence. In connection with
an underwritten offering, if the managing underwriter or underwriters advise the
Company that in its or their opinion the number of Applicable Securities
requested by the Demanding Stockholder, together with other securities for sale
for the account of the Company or any other Person, to be registered exceeds the
number which can be sold in such offering, the Company shall include in such
Registration the number of Applicable Securities and other securities that, in
the opinion of such managing underwriter or underwriters, can be sold in such
offering as follows: (i) first, the Applicable Securities requested to be
registered by the Demanding Stockholder and (ii) second, any other securities
requested to be included in such Registration.
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(e) A Demanding Stockholder shall have the right to withdraw any Demand
(i) prior to the time the Registration Statement in respect of such Demand has
been declared effective, (ii) upon the issuance by the Commission or any other
governmental agency of a stop order, injunction or other order which interferes
with such Registration, (iii) upon the Company's availing itself of Section
4.1(b), or (iv) if such Demanding Stockholder is prevented pursuant to Section
4.1(c) or (d) from selling all of the Applicable Securities it requested to be
registered. Notwithstanding such request to withdraw the Demand, the
Registration requested by such Demanding Stockholder shall nonetheless be deemed
to have been effected (and, therefore, requested) for purposes of Section 4.1(a)
hereof if such Demanding Stockholder withdraws any Demand (A) pursuant to clause
(i) of the preceding sentence after the Commission filing fee is paid with
respect thereto or (B) pursuant to clause (iv) of the preceding sentence in
circumstances where at least 50% of the Applicable Securities requested to be
included in such Registration by such Demanding Stockholder could have been
included, and in each case, (x) the Company has not availed itself of Section
4.1(b) with respect to such Registration request or (y) the Company has availed
itself of Section 4.1(b) and the withdrawal request is not made within 10 days
after the termination of the suspension period occasioned by the Company's
exercise of its rights under Section 4.1(b). If a Demanding Stockholder
withdraws a Demand but the Company nevertheless determines to complete, within
30 days after such withdrawal, the Registration so requested as to securities
other than the Applicable Securities, such Demanding Stockholder shall be
entitled to participate in such Registration pursuant to Section 4.2, but in
such case the Intended Offering Notice shall be required to be given to such
Demanding Stockholder at least five business days prior to the anticipated
filing date of the Registration Statement, or if such Registration Statement has
already been filed, within 10 business days after receipt of the request to
withdraw Demand from such Demanding Stockholder and such Demanding Stockholder
shall be required to give the Piggy-back Notice no later than 3 business days
after the Company's delivery of such Intended Offering Notice.
(f) In the event that any Registration pursuant to this Section 4.1
shall involve, in whole or in part, an underwritten offering, one co-lead
managing underwriter shall be selected by the Company and shall be reasonably
acceptable to the Demanding Stockholder, and the other co-lead underwriter shall
be selected by the Demanding Stockholder, provided that, in the event of a joint
Demand, the other co-lead underwriter shall be selected by a majority in
interest (by reference to the number of Applicable Securities requested to be
included in the Registration) of the Demanding Stockholders, and shall be
reasonably acceptable to the Company. Any additional co-managing underwriters
shall be selected by the Company.
Section 4.2. Piggy-back Registration. (a) If at any time the Company
intends to file on its behalf or on behalf of any of its securityholders a
registration statement under the Securities Act in connection with a public
offering of any securities of the Company on a form and in a manner that would
permit the registration for offer and sale under the Securities Act of
Registrable Securities, other than a registration statement on Form S-8 or Form
S-4, then the Company shall give written notice (an "Intended Offering Notice")
of such intention to each Stockholder then holding Registrable Securities at
least 20 business days prior to the anticipated filing date of such registration
statement. Such Intended Offering Notice shall offer to include in such
registration statement for offer to the public such number of Registrable
Securities as each Stockholder may request, subject to the conditions set forth
herein, and shall specify, to the extent then known, the number and class of
securities proposed to be registered, the proposed
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date of filing of such registration statement, any proposed means of
distribution of such securities, any proposed managing underwriter or
underwriters of such securities and a good faith estimate by the Company of the
proposed maximum offering price of such securities, as such price is proposed to
appear on the facing page of such registration statement. Each Stockholder shall
advise the Company in writing (such written notice being a "Piggy-back Notice")
not later than 10 business days after the Company's delivery to such Stockholder
of the Intended Offering Notice, if such stockholder desires to participate in
such offering. The Piggy-back Notice shall set forth the number of Registrable
Securities such Stockholder desires to have included in the registration
statement and offered to the public. Upon the request of the Company, each
Stockholder electing to include Registrable Securities in the Registration
Statement (a "Participating Stockholder") shall enter into such underwriting,
custody and other agreements as are customary in connection with registered
secondary offerings or necessary or appropriate in connection with the offering.
No Participating Stockholder shall be entitled to be named as a selling
securityholder in the Registration Statement or to use the Prospectus forming a
part thereof for sales of Registrable Securities unless such Participating
Stockholder has made an Election.
(b) In connection with an underwritten offering, if the managing
underwriter or underwriters advise the Company in writing that in its or their
opinion the number of securities proposed to be registered exceeds the number
that can be sold in such offering, the Company shall include in such
Registration the number of securities that, in the opinion of such managing
underwriter or underwriters, can be sold as follows: (i) first, the securities
that the Company proposes to sell or, if the Registration is in response to a
Demand, the securities that the Demanding Stockholder proposes to sell (in the
event of a joint Demand, pro rata in proportion to the number of Applicable
Securities requested to be included by each Demanding Stockholder), (ii) second,
Applicable Securities requested to be included in such Registration by the
Participating Stockholders, and, if the Registration is in response to a Demand,
the securities that the Company proposes to sell (pro rata in proportion to the
number of Applicable Securities requested to be included by each Participating
Stockholder and, if applicable, the Company) and (iii) third, other securities
requested to be included in such Registration.
(c) The rights of each Stockholder pursuant to Section 4.1 hereof and
this Section 4.2 are cumulative, and the exercise of rights under one such
Section shall not exclude the subsequent exercise of rights under the other such
Section (except to the extent expressly provided otherwise herein).
Notwithstanding anything herein to the contrary, the Company may abandon and/or
withdraw any registration as to which any right under Section 4.2 may exist at
any time and for any reason without liability hereunder. In such event, the
Company shall notify each Stockholder to the extent that it has delivered a
Piggy-back Notice to such Stockholder to participate therein.
Section 4.3. Registration Procedures. In connection with a Registration
Statement, the following provisions shall apply:
(a) The Company shall furnish to each Demanding Stockholder or
Participating Stockholder, prior to the Effective Time, a copy of the
Registration Statement as initially filed with the Commission, and each
amendment thereto and each amendment or supplement, if any, to the Prospectus
included therein.
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(b) Subject to Section 4.1(b) and in respect of a Registration
Statement under Section 4.1, the Company shall use reasonable best efforts to
promptly take such action as may be necessary so that (i) each of the
Registration Statement and any amendment thereto and the Prospectus forming part
thereof and any amendment or supplement thereto (and each report or other
document incorporated therein by reference in each case), when it becomes
effective, complies in all material respects with the Securities Act and the
Exchange Act and the Rules and Regulations, (ii) each of the 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) each of the Prospectus forming part of the Registration Statement, and
any amendment or supplement to such Prospectus, does not at any time during the
period during which the Company is required to keep a Registration Statement
effective under Section 4.1(a) include an untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not misleading.
(c) The Company shall, promptly upon learning thereof, advise each
Demanding Stockholder or Participating Stockholder, and shall confirm such
advice in writing if so requested by any Demanding Stockholder or Participating
Stockholder:
(i) when a Registration Statement and any amendment thereto has
been filed with the Commission and when the Registration Statement or
any post-effective amendment thereto has become effective;
(ii) of any request by the Commission for amendments or
supplements to the Registration Statement or the Prospectus included
therein or for additional information with respect to the Registration
Statement and Prospectus;
(iii) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the
initiation of any proceedings for such purpose;
(iv) of the receipt by the Company of any notification with
respect to the suspension of the qualification of the securities
included in the Registration Statement for sale in any jurisdiction or
the initiation of any proceeding for such purpose; and
(v) following the effectiveness of any Registration Statement, of
the happening of any event or the existence of any state of facts that
requires the making of any changes in the Registration Statement or
the Prospectus included therein so that, as of such date, such
Registration Statement and Prospectus do not contain an untrue
statement of a material fact and do not omit to state a material fact
required to be stated therein or necessary to make the statements
therein (in the case of the Prospectus, in light of the circumstances
under which they were made) not misleading (which advice shall be
accompanied by an instruction to each Demanding Stockholder or
Participating Stockholder to suspend the use of the Prospectus until
the requisite changes have been made, which instruction each Demanding
Stockholder or Participating Stockholder agrees to follow).
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(d) In respect of a Registration Statement under Section 4.1 (and not
Section 4.2), the Company shall use all reasonable efforts to prevent the
issuance, and if issued to obtain the withdrawal, of any order suspending the
effectiveness of the Registration Statement at the earliest possible time.
(e) The Company shall furnish to each Demanding Stockholder or
Participating Stockholder, without charge, at least one copy of the Registration
Statement and all post-effective amendments thereto, including financial
statements and schedules, and, if such holder so requests in writing, all
reports, other documents and exhibits that are filed with or incorporated by
reference in the Registration Statement.
(f) The Company shall, during the period during which the Company is
required to keep a Registration Statement continuously effective under Section
4.1(a) or elects to keep such effective under Section 4.2, deliver to each
Demanding Stockholder or Participating Stockholder, without charge, as many
copies of the Prospectus (including each preliminary Prospectus) included in the
Registration Statement and any amendment or supplement thereto as each Demanding
Stockholder or Participating Stockholder may reasonably request, and the Company
consents (except during the continuance of any event described in Section 4.1(b)
or Section 4.3(c)(v) hereof) to the use of the Prospectus, with any amendment or
supplement thereto, by each Demanding Stockholder or Participating Stockholder
in connection with the offering and sale of the Applicable Securities covered by
the Prospectus and any amendment or supplement thereto during such period.
(g) Prior to any offering of Applicable Securities pursuant to the
Registration Statement, the Company shall use reasonable efforts to (i) register
or qualify or cooperate with each Demanding Stockholder or Participating
Stockholder and its respective counsel in connection with the registration or
qualification of such Applicable Securities for offer and sale under the
securities or "blue sky" laws of such jurisdictions within the United States as
each Demanding Stockholder or Participating Stockholder may reasonably request,
(ii) keep such registrations or qualifications in effect and comply with such
laws so as to permit the continuance of offers and sales in such jurisdictions
for the period during which the Company is required to keep a Registration
Statement continuously effective under Section 4.1(a) and (iii) take any and all
other reasonable actions requested by each Demanding Stockholder or
Participating Stockholder which are necessary to enable the disposition in such
jurisdictions of such Applicable Securities; provided, however, that in no event
shall the Company be obligated to (1) qualify as a foreign corporation or as a
dealer in securities in any jurisdiction where it would not otherwise be
required to so qualify but for this Agreement or (2) file any general consent to
service of process or subject itself to tax in any jurisdiction where it is not
so subject.
(h) The Company shall cooperate with each Demanding Stockholder or
Participating Stockholder to facilitate the timely preparation and delivery of
certificates representing Applicable Securities to be sold pursuant to the
Registration Statement, which certificates shall comply with the requirements of
any United States securities exchange upon which any Applicable Securities are
listed (provided that nothing herein shall require the Company to list any
Registrable Securities on any securities exchange on which they are not
currently listed) or the NASD Rules, as applicable, and which certificates shall
be free of any restrictive legends and in such permitted denominations and
registered in such names as each Demanding Stockholder
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or Participating Stockholder may request in connection with the sale of
Applicable Securities pursuant to the Registration Statement.
(i) The Company shall use reasonable efforts to:
(i) make such reasonable representations and warranties in the
applicable underwriting agreement to the Underwriters, in form,
substance and scope as are customary;
(ii) in connection with any underwritten offering, obtain
opinions of counsel to the Company (which counsel and opinions (in
form, scope and substance) shall be reasonably satisfactory to the
Underwriters) addressed to the Underwriters, covering such matters as
are customary to the extent reasonably required by the applicable
underwriting agreement;
(iii) in connection with any underwritten offering, obtain "cold
comfort" letters and updates thereof from the independent public
accountants of the Company (and, if necessary, from the independent
public accountants of any subsidiary of the Company or of any business
acquired by the Company for which financial statements and financial
data are, or are required to be, included in the Registration
Statement), addressed to each Demanding Stockholder or Participating
Stockholder (if such Demanding Stockholder or Participating
Stockholder has provided such letter, representations or
documentation, if any, required for such cold comfort letter to be so
addressed) and the Underwriters, in customary form and covering
matters of the type customarily covered in "cold comfort" letters in
connection with secondary underwritten offerings of equity securities;
and
(iv) in connection with any underwritten offering, deliver such
documents and certificates as may be reasonably requested by each
Demanding Stockholder or Participating Stockholder and the
Underwriters, if any, including, without limitation, certificates to
evidence compliance with any conditions contained in the underwriting
agreement or other agreements entered into by the Company.
(j) In respect of a Registration Statement under Section 4.1 (and not
Section 4.2), the Company shall use reasonable efforts to take all other steps
reasonably necessary to effect the timely registration, offering and sale of the
Applicable Securities covered by the Registration Statements contemplated
hereby.
Section 4.4. Registration Expenses. The Company shall bear the
Registration Expenses in connection with the performance of its obligations
under Sections 4.1, 4.2 and 4.3. Each Demanding Stockholder or Participating
Stockholder shall bear all other expenses relating to any Registration or sale
in which such Demanding Stockholder or Participating Stockholder participates
pro rata with the other Stockholders participating therein, including all of the
fees and expenses of counsel to such Demanding Stockholder or Participating
Stockholder, any applicable underwriting discounts or commissions and
registration or filing fees with respect to the Applicable Securities.
Section 4.5. Indemnification and Contribution. (a) Upon the
effectiveness of the Registration of Applicable Securities pursuant to Section
4.1 or 4.2, the Company shall
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indemnify and hold harmless each Demanding Stockholder or Participating
Stockholder and each Underwriter or selling agent, and each of their respective
officers and directors and each Person who controls such Demanding Stockholder
or Participating Stockholder, Underwriter or selling agent within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act (each such
Person being sometimes referred to as an "Indemnified Person") from and against
any losses, claims, damages or liabilities, joint or several, (or actions in
respect thereof) to which such Indemnified Person may become subject under the
Securities Act, the Exchange Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue statement of a material fact
contained in any Registration Statement under which such Applicable Securities
are registered under the Securities Act, or any Prospectus contained therein or
furnished by the Company to any Indemnified Person, or any amendment or
supplement thereto in each case relating to the sale of Applicable Securities,
or arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, and the Company hereby agrees to reimburse
such Indemnified Person for any reasonable legal or other expenses reasonably
incurred by it in connection with investigating or defending any such loss,
claim, damage or liability (or action in respect thereof) as such expenses are
incurred; provided, however, that (i) the Company shall not be liable to any
such Indemnified Person in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in such
Registration Statement or Prospectus, or amendment or supplement, in reliance
upon and in conformity with written information furnished to the Company by or
on behalf of such Indemnified Person or by or on behalf of any Demanding
Stockholder or Participating Stockholder expressly for use therein; (ii) the
Company shall not be liable to the extent that any loss, claim, damage,
liability (or action or proceeding in respect thereof) or expense arises out of
or is based upon (a) the use of any Prospectus after such time as the obligation
of the Company to keep the same effective and current has expired, or (b) the
use of any Prospectus after such time as the Company has advised each Demanding
Stockholder or Participating Stockholder in writing that a post-effective
amendment or supplement thereto is required, except such Prospectus as so
amended or supplemented; and (iii) the Company shall not be liable to any Person
who participates as an Underwriter in the offering or sale of Registrable
Securities or any other Person, if any, who controls such Underwriter within the
meaning of the Securities Act, to the extent that any loss, claim, damage,
liability (or action or proceeding in respect thereof) or expense arises out of
the matters described in the first proviso of this sentence or in (a) or (b)
above or such Person's failure to send or give a copy of the final prospectus or
supplement to the Persons asserting an untrue statement or alleged untrue
statement or omission or alleged omission at or prior to the written
confirmation of the sale of Registrable Securities to such Person if such
statement or omission was timely corrected in such final prospectus or
supplement.
(b) Each Demanding Stockholder or Participating Stockholder agrees,
severally and not jointly, as a consequence of the inclusion of Applicable
Securities in such Registration Statement, and each Underwriter or selling agent
shall agree, as a consequence of facilitating such disposition of Applicable
Securities, severally and not jointly, to (i) indemnify and hold harmless the
Company and each other Demanding Stockholder or Participating Stockholder, their
respective directors and officers and each Person, if any, who controls the
Company or each other Demanding Stockholder or Participating Stockholder, within
the meaning of either Section
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15 of the Securities Act or Section 20 of the Exchange Act, against any losses,
claims, damages or liabilities (or actions in respect thereof) to which the
Company or each other Demanding Stockholder or Participating Stockholder, or
such other Persons may become subject, under the Securities Act, the Exchange
Act or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon an untrue statement
or alleged untrue statement of a material fact contained in such Registration
Statement or Prospectus, or any amendment or supplement thereto, or arise out of
or are based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, unless such untrue statement or alleged untrue statement or
omission or alleged omission was subsequently remedied in an amendment or
supplement to such Registration Statement or Prospectus and the Company failed
to comply with the delivery requirements of the Securities Act, in each case to
the extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Company by or on behalf of
such indemnifying Demanding Stockholder or Participating Stockholder, the
Underwriter or selling agent or its agent, expressly for use therein, and (ii)
subject to the limitation set forth immediately preceding this clause (ii),
reimburse the Company and each other Demanding Stockholder or Participating
Stockholder, for any legal or other expenses reasonably incurred by it in
connection with investigating or defending any such action or claim as such
expenses are incurred.
(c) Promptly after receipt by any Person entitled to indemnity (an
"Indemnitee") under Section 4.5(a) or (b) hereof of notice of the commencement
of any action or claim, such Indemnitee shall, if a claim in respect thereof is
to be made against an indemnifying Person (an "Indemnitor") under this Section
4.5, notify such Indemnitor in writing of the commencement thereof, but the
omission so to notify the Indemnitor shall not relieve it from any liability
which it may have to any Indemnitee except to the extent of any actual
prejudice. In case any such action shall be brought against any Indemnitee, it
shall notify an Indemnitor of the commencement thereof, such Indemnitor shall be
entitled to participate therein and, to the extent that it shall wish, jointly
with any other Indemnitor similarly notified, to assume the defense thereof,
with counsel satisfactory to such Indemnitee, and, after notice from the
Indemnitor to such Indemnitee of its election so to assume the defense thereof,
such Indemnitor shall not be liable to such Indemnitee under this Section 4.5
for any legal expenses of other counsel or any other expenses, in each case
subsequently incurred by such Indemnitee, in connection with the defense
thereof. No Indemnitor shall, without the prior written consent of the
Indemnitee, effect the settlement or compromise of, or consent to the entry of
any judgment with respect to, any pending or threatened action or claim in
respect of which indemnification or contribution may be sought hereunder
(whether or not the Indemnitee is an actual or potential party to such action or
claim) unless such settlement, compromise or judgment (i) includes an
unconditional release of the Indemnitee from all liability arising out of such
action or claim and (ii) does not include a statement as to, or an admission of,
fault, culpability or a failure to act, by or on behalf of any Indemnitee.
Notwithstanding the foregoing, an Indemnitee shall have the right to
employ separate counsel reasonably acceptable to the Indemnitor in any such
proceeding and to participate in (but not control, other than as provided in (3)
below) the defense thereof, but the fees and expenses of such counsel shall be
at the expense of such Indemnitee unless (1) the Indemnitor has agreed to
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pay such fees and expenses; (2) the Indemnitor shall have failed after notice to
assume the defense of such proceeding; or (3) the named parties to any such
proceeding (including any impleaded parties) include both such Indemnitee and
the Indemnitor or any of its affiliates or controlling persons, and a conflict
of interest will exist if such counsel represents such Indemnitee and the
Indemnitor (or such affiliate or controlling person) and in the case of (3), the
Indemnitee shall have the right to control the Indemnitee's defense and in each
of the cases, if such Indemnitee notifies the Indemnitor in writing that it
elects to employ separate counsel, the reasonable fees and expenses of such
counsel shall be at the expense of the Indemnitor; it being understood, however,
that the Indemnitor shall not, in connection with any one such proceeding or
separate but substantially similar or related proceedings in the same
jurisdiction, 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 (together with appropriate local counsel) at any time for all such
Indemnitees, which firm shall be designated by the Indemnitee that had the
largest number of shares included in the applicable registration statement. An
Indemnitor shall not be liable for any settlement of an action effected without
its written consent.
(d) If the indemnification provided for in this Section 4.5 is
unavailable to or insufficient to hold harmless an Indemnitee under Section
4.5(a) or (b) hereof in respect of any losses, claims, damages or liabilities
(or actions in respect thereof) referred to therein, then each Indemnitor shall
contribute to the amount paid or payable by such Indemnitee as a result of such
losses, claims, damages or liabilities (or actions in respect thereof) in such
proportion as is appropriate to reflect the relative fault of the Indemnitor and
the Indemnitee in connection with the statements or omissions which resulted in
such losses, claims, damages or liabilities (or actions in respect thereof), as
well as any other relevant equitable considerations. The relative fault of such
Indemnitor and Indemnitee shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact relates to information
supplied by such Indemnitor or by such Indemnitee, and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The parties hereto agree that it would not be just
and equitable if contribution pursuant to this Section 4.5(d) were determined
solely by pro rata allocation (even if each Demanding Stockholder or
Participating Stockholder or any Underwriters or selling agents or all of them
were treated as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable considerations referred
to in this Section 4.5(d). The amount paid or payable by an Indemnitee as a
result of the losses, claims, damages or liabilities (or actions in respect
thereof) referred to above shall be deemed to include any legal or other fees or
expenses reasonably incurred by such Indemnitee in connection with investigating
or defending any such action or claim. 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. The obligations of each Demanding Stockholder or
Participating Stockholder and any Underwriters or selling agents in this Section
4.5(d) to contribute shall be several in proportion to the number of Applicable
Securities registered or underwritten or sold, as the case may be, by them and
not joint.
Notwithstanding any other provision of this Section 4.5(d), any
Demanding Stockholder or Participating Stockholder shall not be required to
contribute any amount in excess of the amount by which the net proceeds received
by such Stockholder from the sale of Company
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Common Stock pursuant to a Registration Statement exceeds the amount of damages
which such Stockholder has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission.
(e) The obligations of the Company under this Section 4.5 shall be in
addition to any liability which the Company may otherwise have to any Indemnitee
and the obligations of any Indemnified Person under this Section 4.5 shall be in
addition to any liability which such Indemnified Person may otherwise have to
the Company. The remedies provided in this Section 4.5 are not exclusive and
shall not limit any rights or remedies that may otherwise be available to an
Indemnitee at law or in equity.
Section 4.6. Other Provisions. (a) The respective indemnities,
agreements and other provisions set forth in this Article IV or made pursuant to
this Article IV shall remain in full force and effect, regardless of any
investigation (or any statement as to the results thereof) made by or on behalf
of any Stockholder, any director, officer or partner of any Stockholder, any
agent or Underwriter, any director, officer or partner of such agent or
Underwriter, or any Affiliate of any of the foregoing, and shall survive the
registration, offering and sale of the Applicable Securities of each
Stockholder.
(b) Each Stockholder shall cooperate with respect to any Registration
effected under this Agreement and shall provide such information, documents, and
instruments as may be reasonably requested in connection therewith.
(c) Each Stockholder agrees, if so requested by the managing
underwriter in any underwritten offering of the Company's securities, not to
effect any public sale or distribution of Registrable Securities (other than
pursuant to such underwritten offering) during the 30 days prior to and the 90
days after any registration statement for any such underwritten offering of the
Company's securities (either for its own account or for the benefit of the
holders of any securities of the Company) has become effective (or such period
of time shorter than 90 days that is sufficient and appropriate, in the sole
opinion of the managing underwriter, in order to complete the sale and
distribution of securities included in such registration).
(d) Each Stockholder agrees to keep confidential the fact that the
Company has exercised its rights under Section 4.1(b), any advice of the Company
pursuant to Section 4.3(c) and any other confidential information provided by
the Company in connection with this Agreement.
(e) The Company shall use reasonable best efforts to file all reports
required to be filed with respect to the Company under Section 13 or Section
15(d) of the Exchange Act during such time as there are any Registrable
Securities.
ARTICLE V
RIGHTS RELATING TO INVESTMENT IN ODYSSEY
Section 5.1. Actions of Odyssey Governance Committee. For so long as
(a) the Company or any of its Affiliates shall be entitled to a representative
on the Odyssey Governance Committee (as defined in the Amended and Restated
Company Agreement of Odyssey, effective
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as of November 13, 1998 (the "Odyssey Agreement")) or is otherwise entitled to
consent to the taking of the actions set forth below pursuant to the Odyssey
Agreement and (b) VISN and its Affiliates which are Parties to this Agreement
either (i) are entitled to nominate or designate a member of the Board of
Directors of the Company (the "VISN Director") or (ii) beneficially own any
Odyssey Preferred Interests (as defined in the Odyssey Agreement), neither the
Company nor any of its Affiliates shall, without the written consent of the VISN
Director or the representative of NICC designated on Exhibit C, or otherwise
designated by NICC and delivered in writing to the Company (the "NICC
Representative"), vote in favor of (or otherwise consent to), directly or
through their representatives:
(i) (A) any change in the following provisions of the Odyssey
Agreement: Section 5.7 (but solely in the case of Section 5.7.2, with
respect to the creation or issuance of any interest senior to, or pari
passu with, the Preferred Interest), Section 6.6, Section 6.7.2,
Section 6.9, Section 8.1 (but only insofar as Section 8.1 relates to
the Preferred Interest), Section 8.3 (but only insofar as Section 8.3
relates to or establishes the priority for the Preferred Interest),
Section 10.1.1, Section 10.3 (but only insofar as Section 10.3 relates
to the Preferred Interest) or Section 13.3 or (B) any of the actions
described in the following provisions of the Odyssey Agreement: Section
6.2.2.1, Section 6.2.2.4 (but solely with respect to the creation or
issuance of any interest senior to, or pari passu with, the Preferred
Interest) or clause (b) of Section 6.2.2.5 (but solely with respect to
the incurrence of debt which restricts payments made in connection with
the NICC Budget (as defined in the Odyssey Agreement));
(ii) (A) any repayment or redemption of any Odyssey interest
outstanding as of the date of the IPO junior to the Preferred Interest
or (B) any repayment or redemption of any interest junior to, or pari
passu with, the Preferred Interest created or issued after the IPO in
an amount in excess of the aggregate proceeds received from the sale or
issuance of such interests);
(iii) any sale or transfer of all or substantially all of
Odyssey's assets unless the transferee of such assets assumes all of
the obligations contained in Section 6.6, Section 6.7.2 and Section 6.9
of the Odyssey Agreement and agrees not to take the actions described
in Section 6.2.2.1 or clause (b) of Section 6.2.2.5 (but solely with
respect to the incurrence of debt which restricts payments made in
connection with the NICC Budget) of the Odyssey Agreement without the
consent of the VISN Director or the NICC Representative, in each case
until the later of the fifth anniversary of the IPO or the second
anniversary of such sale or transfer;
(iv) any merger or other business combination involving
Odyssey where Odyssey is not the surviving entity unless at the time of
such merger or business combination (A) the surviving entity assumes
the Preferred Interest on terms no less favorable to VISN than those
set forth in the Odyssey Agreement including, but not limited to,
Section 5.7 (but solely in the case of Section 5.7.2, with respect to
the creation or issuance of any interest senior to, or pari passu with,
the Preferred Interest), Section 8.1 (but only insofar as Section 8.1
relates to the Preferred Interest), Section 8.3 (but only insofar as
Section 8.3 relates or establishes the priority for the Preferred
Interest), Section 10.1.1, Section 10.3 (but only insofar as Section
10.3 relates to the Preferred Interest) and
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Section 13.3, (B) references to Odyssey in Sections 5.1(ii), (iii),
(iv), (v), (vi) and (viii) of this Agreement shall be deemed to refer
to such surviving entity and (C) the surviving entity assumes all of
the obligations contained in Section 6.6, Section 6.7.2 and Section 6.9
of the Odyssey Agreement and agrees not to take the actions described
in Section 6.2.2.1, Section 6.2.2.4 (but solely with respect to the
creation or issuance of any interest senior to, or pari passu with, the
Preferred Interest) and clause (b) of Section 6.2.2.5 (but solely with
respect to the incurrence of debt which restricts payments made in
connection with the NICC Budget) of the Odyssey Agreement until the
later of the fifth anniversary of the IPO or the second anniversary of
such merger or business combination, provided Section 6.2.2.4 shall
only expire when the Preferred Interest has been redeemed, and
provided, further that the obligations of the surviving entity under
this clause (C) shall not so expire in the case of a merger or other
business combination in which the holders of equity interests in
Odyssey (not including the Preferred Interests) immediately before such
transaction own at least a majority of the equity interests in such
surviving entity (or its Parent) (not including the Preferred
Interests) in substantially the same proportions as their ownership
prior to such transaction.
(v) the dissolution of Odyssey, except in connection with a
complete liquidation of the business conducted by Odyssey because such
business is being discontinued;
(vi) (A) any sale or transfer of all or substantially all of
Odyssey's assets to, or any merger or other business combination
involving Odyssey with, the Company or any of its Affiliates or (B) any
other material transaction (with respect to Odyssey) with the Company
or any of its Affiliates that is not on an arm's length basis or on
commercially reasonable terms if such transaction results in (1) an
excessive or unfair financial benefit to the Company or any of its
Affiliates and (2) an inability of Odyssey to satisfy its obligations
under Section 6.6 of the Odyssey Agreement or with respect to the
Preferred Interests. In such event the Company agrees to apply the
amount by which its excessive or unfair financial benefit exceeds the
financial benefit that the Company would have received if the
transaction had been entered into on an arm's length basis or on
commercially reasonable terms to satisfy such Odyssey obligations;
(vii) any sale or transfer of all or substantially all of
Odyssey's assets, or any merger or other business combination involving
Odyssey where Odyssey is not the surviving entity, in each case prior
to the second anniversary of the IPO; or
(viii) any amendment or modification to the Odyssey Agreement,
the result of which would be that (A) none of the Company or any of its
Affiliates or their respective representatives would have the right to
consent to the taking of the actions listed in subparagraphs (i) though
(vii) above, (B) VISN would have any increased liability or additional
obligations under the Odyssey Agreement, or (C) there would occur any
adverse change to VISN's Capital Account (as defined in the Odyssey
Agreement) with respect to the Preferred Interests except to reflect
the redemption thereof pursuant to Section 5.7 of the Odyssey
Agreement.
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Section 5.2. Restriction on Transfer of the Company's Interests in
Odyssey.
(a) The Company shall not Transfer any of its Odyssey Common Interests
(as defined in the Odyssey Agreement) prior to the second anniversary of the IPO
without the consent of the VISN Director or the NICC Representative.
(b) The Company shall not Transfer of any of its Odyssey Common
Interests after the second anniversary of the IPO unless such Transfer is
subject to a requirement that the transferee agree to assume the Company's
obligations under Section 5.1 hereof, provided that the transferee's obligations
under Section 5.1 hereof shall expire on the later of (i) the fifth anniversary
of the IPO, (ii) the second anniversary of such Transfer or (iii) the repayment
or redemption of VISN's Odyssey Preferred Interest, provided that
notwithstanding the foregoing, the transferee's obligations under Section 5.1
shall expire upon the dissolution of Odyssey.
Section 5.3. Termination of Rights and Obligations. The rights of VISN,
or NICC, as the case may be, under Section 5.1 and 5.2 shall terminate (if not
theretofore terminated) pursuant to the terms of Section 5.1 or 5.2 on the later
of such date as VISN and its Affiliates which are Parties to this Agreement
cease to (i) be entitled to nominate or designate a member of the Board of
Directors of the Company or (ii) beneficially own any Odyssey Preferred
Interests.
ARTICLE VI
GENERAL
Section 6.1. Entire Agreement. This Agreement contains the entire
agreement between the parties hereto with respect to the subject matter hereof
and replaces the Original Stockholders Agreement and there are no agreements,
understandings, representations or warranties between the parties hereto other
than those set forth or referred to herein.
Section 6.2. Amendment and Waiver. This Agreement, including this
Section 6.2, may be amended, and waivers or consents to departures from the
provisions hereof may be given, only by a written instrument duly executed, in
the case of an amendment, by the Company and each Stockholder, or in the case of
a waiver or consent, by each party against whom the waiver or consent, as the
case may be, is to be effective.
Section 6.3. Notices. All notices, requests and other communications to
any party hereunder shall be in writing (including facsimile transmission) and
shall be given as follows:
(a) if to the Company or HEI to:
Hallmark Cards, Incorporated
Department 339
0000 XxXxx
Xxxxxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxxx, Vice President,
General Counsel
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
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with copies to:
Hallmark Entertainment, Inc.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx von Gal
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Wachtell, Lipton, Xxxxx & Xxxx
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
(b) if to JPM, to:
XX Xxxxxx Partners (BHCA), L.P.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx Xxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to:
Xxxxx, Xxxxx & Xxxxx
0000 Xxxxxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxx X. Xxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
(c) if to Liberty, to:
Liberty Media Corporation
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxx, Senior Vice President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
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with a copy to:
Liberty Media Corporation
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx Xxxxxx, Senior Vice President and
General Counsel
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a further copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
000 Xxxxx Xxxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000-0000
Attention: Xxx Xxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
(d) if to VISN, to:
VISN Management Corp.
000 Xxxxxxx Xxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to:
Xxxxxxxx Chance Xxxxxx & Xxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxxx X. Xxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
e) if to Xxxxxx, to:
The Xxx Xxxxxx Company, Inc.
0000 X. XxXxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attention: General Counsel
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
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with a copy to:
Xxxxxx & Xxxxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxx, Esq.
Telephone: (000) 000 0000
Facsimile: (000) 000-0000
Section 6.4. Assignment; Benefit. The terms and provisions of this
Agreement shall not be assignable or transferable and except for Indemnitees and
as otherwise expressly provided herein there shall be no third party
beneficiaries hereto; provided, however, that any Affiliate of a Stockholder
that beneficially owns Registrable Securities may exercise such Stockholder's
rights under Article III hereof. All the terms and provisions of this Agreement
shall be binding upon, shall inure to the benefit of and shall be enforceable by
the respective legal successors and permitted assigns of the parties hereto.
Section 6.5. Absence of Presumption. This Agreement shall be construed
without regard to any presumption or rule requiring construction or
interpretation against the party drafting or causing any instrument to be
drafted.
Section 6.6. 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.
Section 6.7. Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
Section 6.8. Governing Law; Jurisdiction and Forum. THIS AGREEMENT
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
DELAWARE, WITHOUT GIVING EFFECT TO ANY PROVISIONS RELATING TO CONFLICTS OF LAWS.
THE PARTIES HEREBY IRREVOCABLY SUBMIT TO THE JURISDICTION OF THE COURTS OF THE
STATE OF DELAWARE SOLELY IN RESPECT OF THE INTERPRETATION AND ENFORCEMENT OF THE
PROVISIONS OF THIS AGREEMENT AND IN RESPECT OF THE TRANSACTIONS CONTEMPLATED
HEREBY, AND HEREBY WAIVE, AND AGREE NOT TO ASSERT, AS A DEFENSE IN ANY ACTION,
SUIT OR PROCEEDING FOR THE INTERPRETATION OR ENFORCEMENT HEREOF, THAT IT IS NOT
SUBJECT THERETO OR THAT SUCH ACTION, SUIT OR PROCEEDING MAY NOT BE BROUGHT OR IS
NOT MAINTAINABLE IN SAID COURTS OR THAT THE VENUE THEREOF MAY NOT BE APPROPRIATE
OR THAT THIS AGREEMENT MAY NOT BE ENFORCED IN OR BY SUCH COURTS, AND THE PARTIES
HERETO IRREVOCABLY AGREE THAT ALL CLAIMS WITH RESPECT TO SUCH ACTION OR
PROCEEDING SHALL BE HEARD AND DETERMINED IN SUCH A DELAWARE STATE COURT. THE
PARTIES HEREBY CONSENT TO AND GRANT ANY SUCH COURT JURISDICTION OVER SUCH
PARTIES AND OVER THE SUBJECT MATTER OF SUCH DISPUTE AND AGREE THAT MAILING
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OF PROCESS OR OTHER PAPERS IN CONNECTION WITH ANY SUCH ACTION OR PROCEEDING IN
THE MANNER PROVIDED IN SECTION 6.3 OR IN SUCH OTHER MANNER AS MAY BE PERMITTED
BY LAW SHALL BE VALID AND SUFFICIENT SERVICE THEREOF.
EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE
UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND
THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY
RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION
DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY CERTIFIES AND
ACKNOWLEDGES THAT (A) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY
HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (B) EACH PARTY
UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (C) EACH PARTY
MAKES THIS WAIVER VOLUNTARILY, AND (D) EACH PARTY HAS BEEN INDUCED TO ENTER INTO
THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN
THIS SECTION 6.8.
Section 6.9. Specific Enforcement. Each party hereto acknowledges that
remedies at law may be inadequate to protect any other party against any actual
or threatened breach of this Agreement by the other parties and, without
prejudice to any other rights and remedies otherwise available to any party,
each party agrees to the granting of injunctive relief in any other party's
favor without proof of actual damages. In the event of litigation relating to
this Agreement, if a court of competent jurisdiction determines that this
Agreement has been breached by a party, then such party shall reimburse the
other party for costs and expenses (including, but not limited to, reasonable
legal fees and expenses) incurred in connection with all such litigation.
Section 6.10. Severability. The provisions of this Agreement shall be
deemed severable and the invalidity or unenforceability of any provision shall
not affect the validity or enforceability of the other provisions hereof. If any
provision of this Agreement, or the application thereof to any Person or entity
or any circumstance, is invalid or unenforceable, (a) a suitable and equitable
provision shall be substituted therefor in order to carry out, so far as may be
valid and enforceable, the intent and purpose of such original provision and (b)
the remainder of this Agreement and the application of such provision to other
Persons, entities or circumstances shall not be affected by such invalidity or
unenforceability, nor shall such invalidity or unenforceability affect the
validity or enforceability of such provision, or the application thereof, in any
other jurisdiction.
Section 6.11. Covered Shares. All of the provisions of this Agreement
shall apply to and include (a) Company Common Stock acquired pursuant to the
Contribution Agreement or the Xxxxxx Contribution Agreement; (b) Company Common
Stock acquired from another Stockholder and, (c) to the extent received in
respect of shares of Company Common Stock acquired pursuant to the Contribution
Agreement or the Xxxxxx Contribution Agreement, all securities and instruments
(i) received by a Stockholder as a dividend or other payment, or (ii)
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issued in connection with a split of such shares or as a result of any exchange
for or reclassification of such shares or a reorganization, recapitalization,
consolidation or merger. Appendix I hereto identifies those shares of Company
Common Stock subject to the provisions of this Agreement as of the date hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective authorized officers as of the day and year first
above written.
CROWN MEDIA HOLDINGS, INC.
By: /s/ XXXXXXX X. XXXXXX
-------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Chief Financial Officer
HALLMARK ENTERTAINMENT, INC.
By: /s/ XXXXXX X. XXXXXXXXX
-------------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Vice President
LIBERTY MEDIA CORPORATION
By: /s/ XXXXX XXXX
-------------------------------------
Name: Xxxxx Xxxx
Title: Senior Vice President
LIBERTY CROWN, INC.
By: /s/ XXXXX XXXX
-------------------------------------
Name: Xxxxx Xxxx
Title: Senior Vice President
VISN MANAGEMENT CORP.
By: /s/ XXXXXXX X. XXXX, XX.
-------------------------------------
Name: Xxxxxxx X. Xxxx, Xx.
Title: Chair - VMC
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XX XXXXXX PARTNERS (BHCA) L.P.
By JPMP MASTER FUND MANAGER L.P.
its general partner
By JPMP CAPITAL CORP.
its general partner
By: /s/ XXXXXX X. XXXXXXX
-------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title:
THE XXX XXXXXX COMPANY, INC.
By: /s/ XXXXX XXXXXX
-------------------------------------
Name: Xxxxx Xxxxxx
Title: General Counsel and
Executive Vice President,
Legal and Business Affairs
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APPENDIX I
Name Class A Stock Class B Stock
---- ------------- -------------
Hallmark Entertainment, Inc. -- 30,670,422
Liberty Crown, Inc. 9,154,930 --
VISN Management Corp. 6,338,028 --
XX Xxxxxx Partners (BHCA), L.P. 3,836,620 --
The Xxx Xxxxxx Company, Inc. 5,377,721 --
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EXHIBIT A
[NAME OF ISSUER]
Notice of Registration Statement
and
Selling Securityholder Questionnaire
(Date)
Reference is hereby made to the Amended and Restated Stockholders
Agreement (the "Stockholders Agreement") among Hallmark Entertainment, Inc., a
Delaware corporation, Liberty Media Corporation, a Delaware corporation, Liberty
Crown, Inc., a Delaware corporation, VISN Management Corp., a Delaware
corporation, XX Xxxxxx Partners (BHCA), L.P., a Delaware limited partnership,
and The Xxx Xxxxxx Company, Inc., a New York corporation (collectively, the
"Stockholders") and Crown Media Holdings, Inc., a Delaware corporation (the
"Company"). Pursuant to the Stockholders Agreement, the Company [has filed] with
the United States Securities and Exchange Commission (the "Commission") a
registration statement on Form ____ (the "Registration Statement") for the
registration and resale under the Securities Act of 1933, as amended (the
"Securities Act"), of shares of Company Common Stock. All capitalized terms not
otherwise defined herein shall have the meanings ascribed thereto in the
Stockholders Agreement.
The Stockholder is entitled to have the Registrable Securities owned by
it included in the Registration Statement. In order to have Registrable
Securities included in the Registration Statement, this Notice of Registration
Statement and Selling Securityholder Questionnaire ("Notice and Questionnaire")
must be completed, executed and delivered to the Company's counsel at the
address set forth herein for receipt ON OR BEFORE [DEADLINE FOR RESPONSE]. If
the Stockholder does not complete, execute and return this Notice and
Questionnaire by such date, the Stockholder (i) will not be named as a selling
securityholder in the Registration Statement and (ii) may not use the Prospectus
forming a part thereof for resales of Registrable Securities.
Certain legal consequences arise from being named as a selling
securityholder in the Registration Statement and related Prospectus.
Accordingly, the Stockholder is advised to consult its own securities law
counsel regarding the consequences of being named or not being named as a
selling securityholder in the Registration Statement and related Prospectus.
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ELECTION
The Stockholder (the "Selling Securityholder") hereby elects to include
in the Registration Statement the Registrable Securities beneficially owned by
it and listed below in Item (3). The Selling Securityholder, by signing and
returning this Notice and Questionnaire, agrees to be bound with respect to such
Registrable Securities by the terms and conditions of this Notice and
Questionnaire.
The Selling Securityholder hereby provides the following information to
the Company and represents and warrants that such information is accurate and
complete:
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QUESTIONNAIRE
(1) Full Legal Name of Selling Securityholder:
(2) Address for Notices to Selling Securityholder:
Telephone:
Fax:
Contact Person:
(3) Except as set forth below in this Item (3), the undersigned does not
beneficially own any shares of any class of Company Common Stock.
(a) Number of Registrable Securities and shares of each class of
Company Common Stock beneficially owned: ___
(b) Number of Registrable Securities which the undersigned wishes to be
included in the Registration Statement: ___
(4) Beneficial Ownership of Other Securities of the Company:
Except as set forth below in this Item (4), the undersigned Selling
Securityholder is not the beneficial or registered owner of any shares of any
class of Company Common Stock or any other securities of the Company, other than
the Registrable Securities and shares of Company Common Stock listed above in
Item (3).
State any exceptions here:
(5) Relationships with the Company:
Except as set forth below, neither the Selling Securityholder nor any
of its affiliates, officers, directors or principal equity holders (5% or more)
has held any position or office or has
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had any other material relationship with the Company (or its predecessors or
affiliates) during the past three years.
State any exceptions here:
(6) Plan of Distribution:
Except as set forth below, the undersigned Selling Securityholder
intends to distribute the Registrable Securities listed above in Item (3) only
as follows (if at all): Such Registrable Securities may be sold from time to
time directly by the undersigned Selling Securityholder or, alternatively,
through underwriters, broker-dealers or agents. Such Registrable Securities may
be sold in one or more transactions at fixed prices, at prevailing market prices
at the time of sale, at varying prices determined at the time of sale, or at
negotiated prices. Such sales may be effected in transactions (which may involve
crosses or block transactions) (i) on any national securities exchange or
quotation service on which the Registered Securities may be listed or quoted at
the time of sale, (ii) in the over-the-counter market, (iii) in transactions
otherwise than on such exchanges or services or in the over-the-counter market,
or (iv) through the writing of options. In connection with sales of the
Registrable Securities or otherwise, the Selling Securityholder may enter into
hedging transactions with broker-dealers, which may in turn engage in short
sales of the Registrable Securities in the course of hedging the positions they
assume. The Selling Securityholder may also sell Registrable Securities short
and deliver Registrable Securities to close out such short positions, or loan or
pledge Registrable Securities to broker-dealers that in turn may sell such
securities.
State any exceptions here:
By signing below, the Selling Securityholder acknowledges that it
understands its obligation to comply, and agrees that it will comply, with the
provisions of the Exchange Act and the Rules and Regulations, particularly
Regulation M.
By signing below, the Selling Securityholder consents to the disclosure
of the information contained herein in its answers to Items (1) through (6)
above and the inclusion of such information in the Registration Statement and
related Prospectus. The Selling Securityholder understands that such information
will be relied upon by the Company in connection with the preparation of the
Registration Statement and related Prospectus.
In accordance with the Selling Securityholder's obligation under the
Stockholders Agreement to provide such information as may be required by law for
inclusion in the Registration Statement, the Selling Securityholder agrees to
promptly notify the Company of any inaccuracies or changes in the information
provided herein which may occur subsequent to the date hereof at any time while
the Registration Statement remains in effect. All notices hereunder
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and pursuant to the Stockholders Agreement shall be made in writing, by
hand-delivery or air courier guaranteeing overnight delivery as follows:
(i) To the Company:
[Name of Issuer]
[Address]
(ii) With a copy to:
[Company Counsel]
[Address]
Once this Notice and Questionnaire is executed by the Selling
Securityholder and received by the Company's counsel, the terms of this Notice
and Questionnaire, and the representations and warranties contained herein,
shall be binding on, shall inure to the benefit of and shall be enforceable by
the respective successors, heirs, personal representatives, and assigns of the
Company and the Selling Securityholders. This Agreement shall be governed in all
respects by the laws of the State of New York.
IN WITNESS WHEREOF, the undersigned, by authority duly given, has
caused this Notice and Questionnaire to be executed and delivered either in
person or by its duly authorized agent.
Dated:
-----------------
Selling Securityholder
By:
Name:
Title:
PLEASE RETURN THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE FOR RECEIPT ON
OR BEFORE [DEADLINE FOR RESPONSE] TO THE COMPANY'S COUNSEL AT:
[Company Counsel]
[Address]
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EXHIBIT B
Corporate Opportunities Policy
Crown Media Holdings, Inc. will be the primary (but not exclusive)
vehicle for the pursuit of corporate opportunities relating to the ownership and
operation of pay television channels dedicated to family programming ("Pay
Television Opportunities") that are provided or otherwise made available to
Hallmark Entertainment, Inc. and its subsidiaries. However, the term Pay
Television Opportunities does not include opportunities (1) developed by or made
available to any public company that is a subsidiary of Hallmark Entertainment,
Inc. or any of Hallmark Entertainment, Inc.'s subsidiaries (other than Crown
Media Holdings, Inc. and its subsidiaries), (2) relating to the production or
distribution of programming that is developed by, or provided or made available
to, a subsidiary of Hallmark Entertainment, Inc. that does not own or operate
pay television channels dedicated to family programming and whose primary
business is the production or distribution of programming, (3) arising out of or
relating to Pay Television Opportunities that have been provided or made
available to Crown Media Holdings, Inc. but which Crown Media Holdings, Inc. has
determined not to pursue or has failed to pursue within the applicable time
period reasonably specified by Hallmark Entertainment, Inc., or (4) that
Hallmark Entertainment, Inc. or any of its subsidiaries is legally or
contractually obligated to provide or make available to a person other than
Crown Media Holdings, Inc.
Crown Media Holdings, Inc. is not obligated to pursue any Pay
Television Opportunity presented to it by Hallmark Entertainment, Inc. If Crown
Media Holdings, Inc. determines not to pursue or fails to pursue an opportunity,
in each case within such time as Hallmark Entertainment, Inc. may reasonably
specify (taking into account the type and nature of the Pay Television
Opportunity provided or made available) in its communication to Crown Media
Holdings, Inc. relating to such Pay Television Opportunity, then Hallmark
Entertainment, Inc. and its subsidiaries may pursue such Pay Television
Opportunity.
This policy is effective from the completion of the initial public
offering of Class A Common Stock of Crown Media Holdings, Inc. This policy
automatically terminates upon the first to occur of (1) Hallmark Entertainment,
Inc. and its subsidiaries ceasing to beneficially own, in the aggregate, at
least a majority in voting power of the outstanding voting securities of Crown
Media Holdings, Inc. entitled to vote generally upon all matters submitted to
common stockholders and (2) the third anniversary of the completion of the
initial public offering of Class A Common Stock of Crown Media Holdings, Inc.
The Hallmark Entertainment, Inc. board of directors is required to act
in accordance with its fiduciary duties owed to Hallmark Entertainment, Inc. and
Hallmark Entertainment, Inc.'s fiduciary duties, if any, to its subsidiaries in
making all determinations in connection with this policy. With respect to any
Pay Television Opportunity that may be subject to this policy and any obligation
(fiduciary or otherwise) to one or more other subsidiaries, the Hallmark
Entertainment, Inc. board of directors will have discretion to determine,
without reference to this policy, to which of Crown Media Holdings, Inc. or such
other subsidiary of Hallmark Entertainment, Inc. such Pay Television Opportunity
will be provided or made available. Notwithstanding anything set forth in this
policy, Hallmark Entertainment, Inc. will have no obligation to exercise any
rights it may have as a shareholder, partner or member of any entity that is not
a wholly owned subsidiary or to exercise any rights available to it under
agreements with other shareholders, partners or members, in order to implement
determinations under this
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policy. All determinations of the Hallmark Entertainment, Inc. board of
directors with respect to this policy and the interpretation of this policy are
conclusive and binding.
Hallmark Entertainment, Inc.'s board of directors from time to time may
amend, modify or rescind this policy or adopt additional or other policies or
make exceptions with respect to the application of this policy in connection
with particular facts and circumstances, all as the Hallmark Entertainment, Inc.
board of directors may determine, consistent with its fiduciary duties and in
accordance with Section 2.8 of the Stockholders Agreement dated as of May 9,
2000 by and among Hallmark Entertainment, Inc., Liberty Media Corporation, VISN
Management Corp., Chase Equity Associates, L.P. and Crown Media Holdings, Inc.
The transactions contemplated by the Contribution Agreement shall not
create any inference or course of dealing as to the opportunities to which this
policy applies.
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EXHIBIT C
Designated Representative of NICC
NICC representative: Xxxxxxx Xxxx
1
