EXHIBIT 46
EXECUTION COPY
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AMENDED AND RESTATED
GOVERNANCE AGREEMENT
AMONG
USA NETWORKS, INC.,
VIVENDI UNIVERSAL, S.A.,
UNIVERSAL STUDIOS, INC.,
LIBERTY MEDIA CORPORATION,
AND
XXXXX XXXXXX
DATED AS OF DECEMBER 16, 2001
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TABLE OF CONTENTS
PAGE
ARTICLE I
STANDSTILL AND VOTING
SECTION 1.01. Acquisition of Voting Securities.............................2
SECTION 1.02. Further Restrictions on Conduct..............................2
SECTION 1.03. Reports......................................................3
SECTION 1.04. Transferees..................................................3
ARTICLE II
BOARD OF DIRECTORS AND RELATED MATTERS
SECTION 2.01. Board of Directors...........................................4
SECTION 2.02. Management of the Business...................................5
SECTION 2.03. Contingent Matters...........................................6
SECTION 2.04. Notice of Events.............................................7
PREEMPTIVE RIGHTS
SECTION 3.01. Liberty Preemptive Rights....................................7
SECTION 3.02. Investment Agreement.........................................8
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the Company................9
SECTION 4.02. Representations and Warranties of the Stockholders...........9
ARTICLE IV
DEFINITIONS
SECTION 5.01. "Affiliate".................................................10
SECTION 5.02. "Amended and Restated Stockholders Agreement"...............10
SECTION 5.03. "Assumptions"...............................................10
SECTION 5.04 "BDTV Entities".............................................10
SECTION 5.05. "Beneficial Ownership" or "Beneficially Own"................10
SECTION 5.06. "CEO".......................................................11
SECTION 5.07 "CEO Termination Date"......................................11
SECTION 5.08. "Commission"................................................11
SECTION 5.09. "Company Common Shares".....................................11
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SECTION 5.10. "Company Class B Stock".....................................11
SECTION 5.11. "Company Common Stock"......................................11
SECTION 5.12. "Consenting Party"..........................................11
SECTION 5.13. "Demand Registration".......................................11
SECTION 5.14. "Disabled"..................................................11
SECTION 5.15. "EBITDA"....................................................11
SECTION 5.16. "Equity Securities".........................................11
SECTION 5.17. "Exchange Act"..............................................11
SECTION 5.18. "Exchange Shares"...........................................12
SECTION 5.19. "Excluded Issuance".........................................12
SECTION 5.20. "Fair Market Value".........................................12
SECTION 5.21. "Issue Price"...............................................12
SECTION 5.22. "Liberty Director"..........................................12
SECTION 5.23. "Liberty Exchange Agreement"................................13
SECTION 5.24. "Liberty Holdco"............................................13
SECTION 5.25. "Ownership Percentage"......................................13
SECTION 5.26. "Permitted Ownership Percentage"............................13
SECTION 5.27. "Permitted Transferee"......................................13
SECTION 5.28. "Person"....................................................13
SECTION 5.29. "Sale Transaction"..........................................13
SECTION 5.30. "Securities Act"............................................13
SECTION 5.31. "Shares"....................................................13
SECTION 5.32. "Stockholders"..............................................13
SECTION 5.33. "Stockholders Group"........................................13
SECTION 5.34. "Subsidiary"................................................14
SECTION 5.35. "Third Party Transferee"....................................14
SECTION 5.36. "13D Group".................................................14
SECTION 5.37. "Total Debt"................................................14
SECTION 5.38. "Total Debt Ratio"..........................................14
SECTION 5.39. "Total Equity Securities"...................................14
SECTION 5.40. "Transfer"..................................................15
SECTION 5.41. "VU Director"...............................................15
SECTION 5.42. "Voting Securities".........................................15
ARTICLE VI
MISCELLANEOUS
SECTION 6.01. Notices.....................................................15
SECTION 6.02. Amendments; No Waivers......................................17
SECTION 6.03. Successors and Assigns......................................18
SECTION 6.04. Governing Law; Consent to Jurisdiction......................18
SECTION 6.05. Counterparts; Effectiveness.................................18
SECTION 6.06. Specific Performance........................................18
SECTION 6.07. Registration Rights.........................................19
SECTION 6.08. Termination.................................................20
SECTION 6.09. Severability................................................20
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SECTION 6.10. Cooperation.................................................20
SECTION 6.11 Adjustment of Share Numbers.................................20
SECTION 6.12. Entire Agreement............................................20
SECTION 6.13. Interpretation..............................................21
SECTION 6.14. Headings....................................................21
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AMENDED AND RESTATED GOVERNANCE AGREEMENT
Amended and Restated Governance Agreement, dated as of December 16, 2001,
among USA Networks, Inc., a Delaware corporation ("USAi," or the "COMPANY"),
Vivendi Universal, S.A., a SOCIETE ANONYME organized under the laws of France
("VU"), Universal Studios, Inc., for itself and on behalf of the members of its
Stockholders Group ("UNIVERSAL"), Liberty Media Corporation, for itself and on
behalf of the members of its Stockholders Group ("LIBERTY") and Mr. Xxxxx Xxxxxx
("XX. XXXXXX") for himself and on behalf of the members of his Stockholders
Group and. Capitalized terms used herein without definition have the meanings
ascribed to such terms in the Transaction Agreement (as hereinafter defined).
WHEREAS, the Company, VU, Universal, Liberty, Xx. Xxxxxx, and USANi LLC, a
Delaware limited liability company ("USANi"), have entered into a Transaction
Agreement, dated as of December 16, 2001 (the "TRANSACTION AGREEMENT"), pursuant
to which, among other things, (i) each of Universal and the Company will
contribute certain businesses to a limited liability partnership (the
"PARTNERSHIP") in exchange for interests in the Partnership, and (ii) each of
Universal, VU and Xx. Xxxxxx shall enter into a limited liability limited
partnership agreement (the "PARTNERSHIP AGREEMENT") under which a wholly owned
subsidiary of Universal will be the general partner and each of the Company,
USANi Sub LLC, a Delaware limited liability company and a wholly owned
subsidiary of USANi ("USANI SUB"), and Xx. Xxxxxx will be limited partners
(collectively, the "TRANSACTIONS");
WHEREAS, the parties hereto have agreed that the Company, Universal,
Liberty, Xx. Xxxxxx and VU shall enter into this Agreement in order to amend and
restate in its entirety the respective rights and obligations of the parties set
forth in the Governance Agreement, dated as of October 19, 1997 (the "1997
GOVERNANCE AGREEMENT");
WHEREAS, the Company, Universal, Liberty, Xx. Xxxxxx and VU desire to
establish in this Agreement certain terms and conditions concerning the
acquisition and disposition of securities of the Company by Universal and VU
(together, the "VU PARTIES"), and certain additional provisions concerning
Universal's, Liberty's, Xx. Xxxxxx'x and XX'x relationships with the Company,
none of which shall become effective until the Closing; and
WHEREAS, the parties hereto also desire to provide for certain amendments
to the Investment Agreement (the "INVESTMENT AGREEMENT"), among Universal, for
itself and on behalf of certain Subsidiaries, the Company, Home Shopping
Network, Inc. ("HSN"), and Liberty, for itself and on behalf of certain of its
Subsidiaries, dated as of October 19, 1997, as amended and restated as of
December 18, 1997.
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements contained herein, and intending to be legally bound hereby, the
Company, Universal, Liberty, Xx. Xxxxxx and VU hereby agree, effective as of the
Closing, as follows:
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ARTICLE I
STANDSTILL AND VOTING
SECTION 1.01. ACQUISITION OF VOTING SECURITIES. Subject to the last
sentence hereof, immediately following the Closing, neither the VU Parties nor
any of their Affiliates will acquire, directly or indirectly, the Beneficial
Ownership of any additional Equity Securities of the Company until such time
(the "TRIGGER DATE") that the Equity Securities Beneficially Owned by the VU
Parties and their Affiliates represent less than 20% (the "PERMITTED OWNERSHIP
PERCENTAGE") of the Total Equity Securities. Subject to the last sentence
hereof, following the Trigger Date, neither the VU Parties nor any of their
Affiliates will acquire, directly or indirectly, the Beneficial Ownership of any
additional Equity Securities of the Company such that the Equity Securities
Beneficially Owned by the VU Parties and their Affiliates following such
acquisition would be in excess of the Permitted Ownership Percentage. If at any
time the VU Parties become aware that they and their Affiliates Beneficially Own
more than the Permitted Ownership Percentage, then the VU Parties shall as soon
as is reasonably practicable (but in no manner that would require the VU Parties
to incur liability under Section 16(b) of the Exchange Act) take all action
necessary to reduce the amount of Equity Securities Beneficially Owned by such
Persons to an amount not greater than the Permitted Ownership Percentage. The
restrictions contained in this Section 1.01 shall cease to apply upon the later
of (x) the date that Xx. Xxxxxx no longer serves as CEO (provided that if Xx.
Xxxxxx no longer serves as CEO but continues to hold a proxy from Universal in
respect of Company Common Shares under the Amended and Restated Stockholders
Agreement, Xx. Xxxxxx shall be deemed to be continuing to serve as CEO until the
later of (i) such time as he no longer serves as CEO and (ii) such time as Xx.
Xxxxxx no longer holds the Universal proxy, with the later of such times being
referred to as the "CEO TERMINATION DATE") or becomes Disabled and (y) the date
on which VU no longer has the right to appoint a director to the Board of
Directors of the Company pursuant to Section 2.01 hereof (the later of clauses
(x) and (y), the "STANDSTILL TERMINATION DATE"). Notwithstanding anything to the
contrary contained herein, the provisions set forth in this Section 1.01 shall
not prevent the VU Parties and their Affiliates from exercising the Warrants and
continuing to Beneficially Own the shares thereunder.
SECTION 1.02. FURTHER RESTRICTIONS ON CONDUCT. The VU Parties covenant and
agree that until the Standstill Termination Date:
(a) except by virtue of VU's representation on the Board of Directors of
the Company and as otherwise contemplated under this Agreement and the
other agreements contemplated by the Transaction Agreement or as
otherwise permitted by the Board of Directors of the Company or the
CEO so long as Xx. Xxxxxx is CEO, neither the VU Parties nor any
Affiliate thereof will otherwise act, alone or in concert with others,
to seek to affect or influence the control of the management or Board
of Directors of the Company or the business, operations or policies of
the Company (it being agreed that this paragraph shall not prohibit
the VU Parties, their Affiliates and their respective employees from
engaging in ordinary course business activities with the Company);
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(b) other than to a Permitted Transferee, pursuant to the Transaction
Agreement or the Amended and Restated Stockholders Agreement, neither
the VU Parties nor any Affiliate thereof shall deposit any Equity
Securities in a voting trust or subject any Equity Securities to any
proxy, arrangement or agreement with respect to the voting of such
securities or other agreement having similar effect;
(c) neither the VU Parties nor any Affiliate thereof shall propose any
merger, tender offer or other business combination involving the
Company or any of its Affiliates; PROVIDED, that discussions relating
to the possibility of such a proposal in which Xx. Xxxxxx participates
shall not be deemed to be a breach of this covenant;
(d) neither the VU Parties nor any Affiliate thereof shall initiate or
propose any stockholder proposal or make, or in any way participate
in, directly or indirectly, any "solicitation" of "proxies" to vote,
or seek to influence any Person with respect to the voting of, any
Equity Securities, or became a "participant" in a "solicitation" (as
such terms are defined in Regulation 14A under the Exchange Act) in
opposition to the recommendation of the majority of the directors of
the Company with respect to any matter, except in response to a
solicitation by a third party;
(e) other than as is contemplated by this Agreement, the Transaction
Agreement, the Amended and Restated Stockholders Agreement and the
other agreements contemplated by the Transaction Agreement, neither
the VU Parties nor any Affiliate thereof shall join a partnership,
limited partnership, syndicate or other group, or otherwise act in
concert with any other Person (other than a Permitted Transferee), for
the purpose of acquiring, holding, voting or disposing of Equity
Securities, or otherwise become a "person" within the meaning of
Section 13(d)(3) of the Exchange Act; and
(f) neither the VU Parties nor any Affiliate thereof shall, directly or
indirectly, request that the Company or its Board of Directors amend
or waive any of the provisions of this Section 1.02.
SECTION 1.03. REPORTS. The VU Parties shall deliver to the Company,
promptly after any acquisition or Transfer of Equity Securities representing
more than a 1% change in the Ownership Percentage, an accurate written report
specifying the amount and class of Equity Securities acquired or Transferred in
such transaction and the amount of each class of Equity Securities owned by the
VU Parties and their Affiliates after giving effect to such transaction;
PROVIDED, HOWEVER, that no such report need be delivered with respect to any
such acquisition or Transfer of Equity Securities by the VU Parties or their
Affiliates that is reported in a statement on Schedule 13D filed with the
Commission and delivered to the Company by the VU Parties in accordance with
Section 13(d) of the Exchange Act. The Company shall be entitled to rely on such
reports and statements on Schedule 13D for all purposes of this Agreement.
SECTION 1.04. TRANSFEREES. No Third Party Transferee shall have any rights
or obligations under this Agreement, except as specifically provided for in this
Agreement and
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except that if such Third Party Transferee shall acquire Beneficial Ownership of
more than 5% of the outstanding Total Equity Securities upon consummation of any
Transfer or series of related Transfers from a Stockholder, to the extent such
Stockholder has the right to Transfer a Demand Registration assigns such right
in connection with a Transfer, such Third Party Transferee shall have the right
to initiate one or more Demand Registrations pursuant to Section 6.07 or any
registration rights agreement that replaces or supersedes Section 6.07 (and
shall be entitled to such other rights that a Stockholder would have applicable
to such Demand Registration), subject to the obligations of such Stockholder
applicable to such demand (and the number of Demand Registrations to which such
Stockholder is entitled under Section 6.07 hereof shall be correspondingly
decreased). Except in connection with open market transactions (other than
pursuant to an underwritten offering), neither the VU Parties, nor any of their
Affiliates, shall be entitled to Transfer to any single Third Party Transferee
(including Affiliates of such Third Party Transferee), in the aggregate, 10% or
more of the Total Equity Securities, unless the VU Parties cause such Third
Party Transferee (and its Affiliates, to the extent applicable) to agree to the
provisions set forth in Sections 1.01 and 1.02 hereof until such time as such
Third Party Transferee and its Affiliates own less than 10% of the Total Equity
Securities. Subject to applicable securities laws, except as provided in this
Section 1.04 and the Amended and Restated Stockholders Agreement, there are no
restrictions on Transfer on the Company Common Stock (and, in the case of the VU
Parties, the Warrants).
ARTICLE II
BOARD OF DIRECTORS AND RELATED MATTERS
SECTION 2.01. BOARD OF DIRECTORS. (a) Immediately following the Closing,
the Company Board of Directors shall include Xxxxxxxxx Xxxxxxx and Xxxx-Xxxxx
Xxxxxxx. VU shall have the right to nominate up to two VU Directors so long as
the number of Equity Securities Beneficially Owned by the VU Parties and their
Affiliates is at least equal to 75% of the number of Equity Securities
Beneficially Owned by the VU Parties and their Affiliates immediately following
the Closing (appropriately adjusted to reflect any stock splits and the like)
(so long as the Ownership Percentage of the VU Parties and their Affiliates is
at least equal to the lesser of (x) 15% of the Total Equity Securities and (y)
the percentage that is five percentage points less than the percentage of the
Total Equity Securities Beneficially Owned by the VU Parties and their
Affiliates immediately following the Closing). VU shall have the right to
nominate one VU Director so long as the VU Parties Beneficially Own a number of
Equity Securities at least equal to 50% of the number of the Equity Securities
Beneficially Owned by them immediately following the Closing (appropriately
adjusted to reflect any stock splits and the like) (so long as the VU Party's
Ownership Percentage is at least equal to 10% of the Total Equity Securities).
(b) The Company shall cause each VU Director and each Liberty Director, as
the case may be, to be included in the slate of nominees recommended by the
Board of Directors to the Company's stockholders for election as directors at
each annual meeting of the stockholders of the Company and shall use all
reasonable efforts to cause the election of each VU Director and Liberty
Director, as the case may be, including soliciting proxies in favor of the
election of such persons.
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(c) Within a reasonable time prior to the filing with the Commission of its
proxy statement or information statement with respect to each meeting of
stockholders at which directors are to be elected, the Company shall, to the
extent such Person is entitled to representation on the Company's Board of
Directors in accordance with this Agreement, provide VU and Liberty, as
applicable, with the opportunity to review and comment on the information
contained in such proxy or information statement applicable to the director
nominees designated by such Person.
(d) In the event that a vacancy is created at any time by the death,
disability, retirement, resignation or removal (with or without cause) of any VU
Director or Liberty Director, VU or Liberty, as the case may be, shall have the
right to designate a replacement VU Director or Liberty Director to fill such
vacancy, and the Company agrees to use its best efforts to cause such vacancy to
be filled with the replacement VU Director or Liberty Director so designated.
Upon the written request of VU or Liberty, each Stockholder shall vote (and
cause each of the members of its Stockholders Group to vote, if applicable), or
act by written consent with respect to, all Equity Securities Beneficially Owned
by it and otherwise take or cause to be taken all actions necessary to remove
the director designated by such requesting party and to elect any replacement
director designated by such party as provided in the first sentence of this
Section 2.01(d).
(e) Except as permitted by the Company Board of Directors, the parties
agree that no Company director who is a VU Director shall participate in any
action taken by the Company Board of Directors or the Company relating to any
business transaction between the Company and either of the VU Parties (including
their Affiliates), or relating to this Agreement or the Transaction Agreement,
including, without limitation, any amendment, modification or waiver hereof or
thereof.
(f) Following the Closing, the Company Board of Directors shall include
Xxxx X. Xxxxxx and Xxxxxx X. Xxxxxxx. Liberty shall have the right to nominate
up to two Liberty Directors so long as the number of Equity Securities
Beneficially Owned by Liberty is at least equal to 75% of the number of Equity
Securities Beneficially Owned by Liberty immediately following the Closing
(appropriately adjusted to reflect any stock splits and the like) (so long as
the Ownership Percentage of Liberty is at least equal to the lesser of (x) 15%
of the Total Equity Securities and (y) the percentage that is five percentage
points less than the percentage of the Total Equity Securities Beneficially
owned by Liberty immediately following the Closing). Liberty shall have the
right to nominate one Liberty Director so long as Liberty Beneficially Owns a
number of Equity Securities at least equal to 50% of the number of the Equity
Securities Beneficially Owned by it immediately following the Closing
(appropriately adjusted to reflect any stock splits and the like) (so long as
Liberty's Ownership Percentage is at least equal to 5% of the Total Equity
Securities).
SECTION 2.02. MANAGEMENT OF THE BUSINESS. Following the Closing and except
as indicated in Section 2.03 below, as required by Delaware law or the
Certificate of Incorporation of the Company and the By-Laws or as contemplated
by the Transaction Agreement and the agreements contemplated thereby, Xx.
Xxxxxx, so long as he is CEO and has not become Disabled, will continue to have
full authority to operate the day-to-day business affairs of the Company to the
same extent as prior to the Closing. The Company shall use its reasonable best
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efforts to cause one Liberty Director to be appointed as a member of a committee
of the Board of Directors and, to the extent such person qualifies under
applicable tax laws and Section 16(b) under the Exchange Act or other similar
requirements, the Compensation Committee of the Board of Directors.
SECTION 2.03. CONTINGENT MATTERS. So long as in the case of Liberty,
Liberty Beneficially Owns at least two-thirds of the number of Equity Securities
Beneficially Owned by it (including the Exchange Shares and through its equity
ownership of BDTV Entities) immediately following the Closing (appropriately
adjusted to reflect any stock splits and the like) (so long as such Ownership
Percentage equals at least 5% of the Total Equity Securities), and in the case
of Xx. Xxxxxx, Xx. Xxxxxx Beneficially Owns at least twenty million Company
Common Shares with respect to which he has a pecuniary interest (appropriately
adjusted to reflect any stock splits and the like) and the CEO Termination Date
(as defined in the Amended and Restated Stockholders Agreement and not as
defined in this Agreement) has not occurred and Xx. Xxxxxx has not become
Disabled, neither the Company nor any Subsidiary shall take any of the following
actions (any such action, a "CONTINGENT MATTER") without the prior approval of
Xx. Xxxxxx and/or Liberty, as applicable:
(a) any transaction not in the ordinary course of business, launching new
or additional channels or engaging in any new field of business, in any case,
that will result in, or will have a reasonable likelihood of resulting in,
Liberty or Xx. Xxxxxx or any Affiliate thereof being required under law to
divest itself of all or any part of its Equity Securities, or interests therein,
or any other material assets of such Person, or that will render such Person's
continued ownership of such securities, shares, interests or assets illegal or
subject to the imposition of a fine or penalty or that will impose material
additional restrictions or limitations on such Person's full rights of ownership
(including, without limitation, voting) thereof or therein. This Contingent
Matter will be applied based only on the Equity Securities, interests therein or
other material assets of Liberty or Xx. Xxxxxx or any Affiliate thereof as of
the Closing Date;
(b) if the Total Debt Ratio continuously equals or exceeds 4:1 over a
twelve-month period, then, for so long as the Total Debt Ratio continues to
equal or exceed 4:1:
(i) any acquisition or disposition (including pledges), directly or
indirectly, by the Company or any of its Subsidiaries of any assets
(including debt and/or equity securities) or business (by merger,
consolidation or otherwise), the grant or issuance of any debt or
equity securities of the Company or any of its Subsidiaries, other
than, in any of the foregoing, as contemplated by the Liberty Exchange
Agreement or the Exchange Shares), the redemption, repurchase or
reacquisition of any debt or equity securities of the Company or any
of its Subsidiaries, other than as contemplated by the Liberty
Exchange Agreement or the Exchange Shares, by the Company or any such
Subsidiary, or the incurrence of any indebtedness, or any combination
of the foregoing, in any such case, in one transaction or a series of
transactions in a six-month period, with a value of 10% or more of the
market value of the Total Equity Securities at the time of such
transaction, provided that the prepayment, redemption, repurchase or
conversion of prepayable, callable, redeemable or convertible
securities in accordance with the terms thereof shall not be a
transaction subject to this paragraph;
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(ii) voluntarily commencing any liquidation, dissolution or winding up of
the Company or any material Subsidiary;
(iii) any material amendments to the Certificate of Incorporation or Bylaws
of the Company (including the issuance of blank check preferred stock
containing super voting rights or class votes on any matter (except to
the extent such class vote is required by Delaware law or to the
extent the holder of such preferred stock may have the right to elect
directors upon the occurrence of a default in payment of dividends or
a redemption price));
(iv) engagement by the Company in any line of business other than media,
communications and entertainment products, services and programming,
and electronic retailing and commerce, or other businesses engaged
in by the Company as of the date of determination of the Total Debt
Ratio;
(v) adopting any stockholder rights plan (or any other plan or
arrangement that could reasonably be expected to disadvantage any
stockholder on the basis of the size or voting power of its
shareholding) that would adversely affect Liberty or Xx. Xxxxxx; and
(vi) entering into any agreement with any holder of Equity Securities in
such stockholder's capacity as such, as the case may be, which
grants such stockholder approval rights similar in type and
magnitude to those set forth in this Section 2.03.
SECTION 2.04. NOTICE OF EVENTS. In the event that (a) the Company intends
to engage in a transaction of a type that is described in Section 2.03, and (b)
the Company does not intend to seek consent from those parties that are required
to consent to a Contingent Matter (a "CONSENTING PARTY") due to the Company's
good faith belief that the specific provisions of such paragraph do not require
such consent but that reasonable people acting in good faith could differ as to
whether consent is required pursuant to such paragraph, the Company shall notify
the Consenting Parties as to the material terms of the transaction (including
the Company's estimate of the timing thereof) by written notice (including a
statement of the Total Debt Ratio) delivered as far in advance of engaging in
such transaction as is reasonably practicable unless such transaction was
previously publicly disclosed.
ARTICLE III
PREEMPTIVE RIGHTS
SECTION 3.01. LIBERTY PREEMPTIVE RIGHTS (a) In the event that after the
Closing Date, the Company issues or proposes to issue (other than to the Company
and its Affiliates or Liberty and its Affiliates, and other than pursuant to an
Excluded Issuance) any Company Common Shares (including Company Common Shares
issued upon exercise, conversion or exchange of options, warrants and
convertible securities, but excluding (x) shares of Company Common Stock issued
upon conversion of shares of Company Class B Stock, and (y) Exchange Shares
issued in accordance with the Liberty Exchange Agreement, and such issuance,
together
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with any prior issuances of less than 1% with respect to which Liberty had no
rights under this Section 3.01, shall be in excess of 1% of the total number of
Company Common Shares (based on the Assumptions) outstanding after giving effect
to such issuance, the Company shall give written notice to Liberty not later
than five business days after the issuance (an "ADDITIONAL ISSUANCE"),
specifying the number of Company Common Shares issued or to be issued and the
Issue Price (if known) per share. Liberty shall have the right (but not the
obligation) to purchase or cause one or more of the Liberty Holdcos to purchase
for cash a number (but not less than such number) of Company Common Shares
(allocated between Company Common Stock and Company Class B Common Stock in the
same proportion as the issuance or issuances giving rise to the preemptive right
hereunder, except to the extent that Liberty opts to receive Company Common
Stock in lieu of Company Class B Common Stock), so that Liberty and the Liberty
Holdcos shall collectively maintain the identical percentage equity beneficial
ownership interest in the Company that Liberty and the Liberty Holdcos
collectively owned immediately prior to the notice from the Company to Liberty
described in the first sentence of this paragraph (but not in excess of the
percentage equity beneficial ownership interest in the Company that Liberty and
the Liberty Holdcos collectively owned immediately following the Closing) after
giving effect to such Additional Issuance and to shares of Company Common Stock
that are to be issued to Liberty and the Liberty Holdcos pursuant to this
Section 3.01 by sending an irrevocable written notice to the Company not later
than fifteen business days after receipt of such notice (or, if later, two
business days following the determination of the Issue Price) from the Company
that it elects to purchase or to cause one or more of the Liberty Holdcos to
purchase all of such Company Common Shares (the "ADDITIONAL SHARES"). The
closing of the purchase of Additional Shares shall be the later of ten business
days after the delivery of the notice of election by Liberty and five business
days after receipt of any necessary regulatory approvals.
(b) Additional Issuances caused by the conversion of HSN's 5 7/8%
Convertible Subordinated Debentures due March 1, 2006 ("HSN CONVERTIBLE DEBT")
into Company Common Stock shall be at an Issue Price to Liberty of $10 per share
in cash. Other than with respect to the Issue Price, any such Additional
Issuance shall be governed by the provisions set forth in 3.01(a).
(c) The purchase or redemption of any Company Common Shares by the Company
or any of its Affiliates shall not result in an increase in the percentage of
Company equity that Liberty may be entitled to acquire pursuant to the
preemptive right in paragraph 3.01(a) above.
(d) Notwithstanding anything contained herein to the contrary, Liberty
shall have the rights set forth in Section 3.01(a) hereof with respect to the
transactions contemplated by the Expedia Merger Agreement to the extent Liberty
has not previously exercised such rights pursuant to Section 1.8 of the
Investment Agreement prior to its termination in accordance with the terms of
Section 3.02 hereof. Furthermore, notwithstanding the termination of Section 1.8
of the Investment Agreement pursuant to Section 3.02 hereof, for purposes of
determining the number of Company Common Shares that shall give rise to a notice
in accordance with Section 3.01(a) hereof, the Company shall include such number
of Company Common Shares not previously included in any preemptive notice prior
to the Closing Date.
SECTION 3.02. INVESTMENT AGREEMENT Section 1.7 and Section 1.8 of the
Investment Agreement shall be of no further force or effect and Universal and
Liberty shall cease
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to have any preemptive rights with respect to Equity Securities, except as
otherwise provided with respect to Liberty in Section 3.01 of this Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to Xx. Xxxxxx, the VU Parties and Liberty that (a) the
Company is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware and has the corporate power and
authority to enter into this Agreement and to carry out its obligations
hereunder, (b) the execution and delivery of this Agreement by the Company and
the consummation by the Company of the transactions contemplated hereby have
been duly authorized by all necessary corporate action on the part of the
Company and no other corporate proceedings on the part of the Company are
necessary to authorize this Agreement or any of the transactions contemplated
hereby, (c) this Agreement has been duly executed and delivered by the Company
and constitutes a valid and binding obligation of the Company, and, assuming
this Agreement constitutes a valid and binding obligation of each Stockholder,
is enforceable against the Company in accordance with its terms, (d) neither the
execution, delivery or performance of this Agreement by the Company constitutes
a breach or violation of or conflicts with the Company's Certificate of
Incorporation or By-laws or any material agreement to which the Company is a
party and (e) none of such material agreements would impair in any material
respect the ability of the Company to perform its obligations hereunder.
SECTION 4.02. REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDERS. Each
Stockholder, as to itself (and, in the case of Xx. Xxxxxx, as applicable),
represents and warrants to the Company and the other Stockholders that (a) it is
a corporation duly organized, validly existing and in good standing under the
laws of its jurisdiction of organization and he or it, as the case may be, has
the power and authority (corporate or otherwise) to enter into this Agreement
and to carry out his or its obligations hereunder, (b) the execution and
delivery of this Agreement by such Stockholder and the consummation by such
Stockholder of the transactions contemplated hereby have been duly authorized by
all necessary action on the part of such Stockholder and no other proceedings on
the part of such Stockholder are necessary to authorize this Agreement or any of
the transactions contemplated hereby, (c) this Agreement has been duly executed
and delivered by such Stockholder and constitutes a valid and binding obligation
of such Stockholder, and, assuming this Agreement constitutes a valid and
binding obligation of the Company, is enforceable against such Stockholder in
accordance with its terms, (d) neither the execution, delivery or performance of
this Agreement by such Stockholder constitutes a breach or violation of or
conflicts with its certificate of incorporation or by-laws (or similar governing
documents) or any material agreement to which such Stockholder is a party and
(e) none of such material agreements would impair in any material respect the
ability of such Stockholder to perform its obligations hereunder.
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ARTICLE V
DEFINITIONS
For purposes of this Agreement, the following terms shall have the
following meanings:
SECTION 5.01. "AFFILIATE" shall have the meaning set forth in Rule 12b-2
under the Exchange Act (as in effect on the date of this Agreement). For
purposes of this definition, (i) Matsushita Electric Industrial Co., Ltd.
("MEI") shall not be considered an Affiliate of Universal or any Subsidiary of
Universal so long as MEI does not materially increase its influence over
Universal following the Closing Date, (ii) natural persons shall not be deemed
to be Affiliates of each other, (iii) none of the Company, Xx. Xxxxxx, Liberty
or any of their respective Affiliates shall be deemed to be an Affiliate of the
VU Parties or their Affiliates, (iv) none of Xx. Xxxxxx, Liberty, the VU Parties
or any of their respective Affiliates shall be deemed to be an Affiliate of the
Company or its Affiliates, (v) none of the Company, the VU Parties, Liberty or
any of their respective Affiliates shall be deemed to be an Affiliate of Xx.
Xxxxxx or his Affiliates, and (vi) none of the Company, Xx. Xxxxxx, the VU
Parties or any of their respective Affiliates shall be deemed to be an Affiliate
of Liberty or its Affiliates.
SECTION 5.02. "AMENDED AND RESTATED STOCKHOLDERS AGREEMENT" shall mean the
stockholders agreement dated as of the date hereof among Liberty, VU, Universal
and Xx. Xxxxxx.
SECTION 5.03. "ASSUMPTIONS" shall have the meaning set forth in the
definition of Total Equity Securities.
SECTION 5.04. "BDTV ENTITIES" shall have the meaning specified in the
Amended and Restated Stockholders Agreement.
SECTION 5.05. "BENEFICIAL OWNERSHIP" or "BENEFICIALLY OWN" shall have the
meaning given such term in Rule 13d-3 under the Exchange Act and a Person's
Berneficial Ownership of Company Common Shares shall be calculated in accordance
with the provisions of such Rule; PROVIDED, HOWEVER, that for purposes of
Beneficial Ownership, (a) a Person shall be deemed to be the Beneficial Owner of
any Equity Securities (including any Exchange Shares) which may be acquired by
such Person (disregarding any legal impediments to such Beneficial Ownership),
whether within 60 days or thereafter, upon the conversion, exchange or exercise
of any warrants, options (which options held by Xx. Xxxxxx shall be deemed to be
exercisable), rights or other securities issued by the Company or any Subsidiary
thereof, (b) no Person shall be deemed to Beneficially Own any Equity Securities
solely as a result of such Person's execution of this Agreement (including by
virtue of holding a proxy with respect to any Equity Securities), the
Transaction Agreement or the Amended and Restated Stockholders Agreement, or
with respect to which such Person does not have a pecuniary interest, and (c)
Liberty shall be deemed to be the Beneficial Owner of the proportionate number
of Company Common Shares represented by Liberty's equity interest in a BDTV
Entity (as defined in the Amended and Restated Stockholders Agreement);
PROVIDED, FURTHER, that for purposes of calculating Beneficial Ownership, the
number of outstanding Company Common Shares shall be deemed to include the
number of Company Common Shares that would be outstanding if all Exchange Shares
were issued.
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SECTION 5.06. "CEO" shall mean the Chief Executive Officer of the Company
or any successor entity.
SECTION 5.07. "CEO TERMINATION DATE" shall have the meaning specified in
Section 1.01 of this Agreement.
SECTION 5.08. "COMMISSION" shall mean the Securities and Exchange
Commission.
SECTION 5.09. "COMPANY COMMON SHARES" shall mean shares of Company Common
Stock and Company Class B Stock.
SECTION 5.10. "COMPANY CLASS B STOCK" shall mean class B common stock, $.01
par value per share, of the Company.
SECTION 5.11. "COMPANY COMMON STOCK" shall mean common stock, $.01 par
value per share, of the Company.
SECTION 5.12. "CONSENTING PARTY" shall have the meaning set forth in
Section 2.03 of this Agreement.
SECTION 5.13. "DEMAND REGISTRATION" shall have the meaning set forth in
Section 6.07(b) of this Agreement.
SECTION 5.14. "DISABLED" shall mean the disability of Xx. Xxxxxx after the
expiration of more than 180 consecutive days after its commencement which is
determined to be total and permanent by a physician selected by Liberty (or, if
(i) the Liberty Termination date has occurred, and (ii) the VU Parties own 10%
or more of the Total Equity Securities, VU) and reasonably acceptable to Xx.
Xxxxxx, provided that Xx. Xxxxxx shall be deemed to be disabled only following
the expiration of 90 days following receipt of a written notice from the Company
and such physician specifying that a disability has occurred if within such
90-day period he fails to return to managing the business affairs of the
Company. Total disability shall mean mental or physical incapacity that prevents
Xx. Xxxxxx from managing the business affairs of the Company.
SECTION 5.15. "EBITDA" shall mean, for any period, for the Company and its
Subsidiaries, on a combined consolidated basis: net income plus (to the extent
reflected in the determination of net income) (i) provision for income taxes,
(ii) minority interest, (iii) interest income and expense, (iv) depreciation
and amortization, (v) amortization of cable distribution fees, and (vi)
amortization of non-cash distribution and marketing expense and non-cash
compensation expense.
SECTION 5.16. "EQUITY SECURITIES" shall mean the equity securities of the
Company calculated on a Company Common Stock equivalent basis, including the
Company Common Shares, Exchange Shares and those shares issuable upon exercise,
conversion or redemption of other securities of the Company not otherwise
included in this definition.
SECTION 5.17. "EXCHANGE ACT" shall mean the Securities Exchange Act of
1934, as amended, and the rules and regulations of the Commission promulgated
thereunder.
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SECTION 5.18. "EXCHANGE SHARES" shall mean the Silver King Exchange Shares
as defined in the Liberty Exchange Agreement.
SECTION 5.19. "EXCLUDED ISSUANCE" shall mean any issuance of Company Common
Stock (i) in a Sale Transaction, or (ii) which is "restricted stock" or the
ownership of which is otherwise subject to forfeiture ("RESTRICTED STOCK"),
provided that for purposes of this definition any stock covered by the
provisions of clause (ii) shall be deemed to have been issued on the date (the
"LAPSE DATE") the restrictions on such stock lapse or on which the stock is no
longer subject to forfeiture.
SECTION 5.20. "FAIR MARKET VALUE" for a security publicly traded in the
over-the-counter market (on either NASDAQ-NMS or NASDAQ) or on a recognized
exchange shall be the average closing price of such security for the three
trading days ending on the applicable day (or, if such day is not a trading day,
the trading day immediately preceding the applicable day), and for all other
securities or property "Fair Market Value" shall be determined, by a nationally
recognized investment banking firm which has not been engaged by the Company or
Liberty or their respective Affiliates for the prior three years, selected by
(i) the Company and (ii) Liberty; provided that, if the Company and Liberty
cannot agree on such an investment banking firm within 10 business days, such
investment banking firm shall be selected by a panel designated in accordance
with the rules of the American Arbitration Association. The fees, costs and
expenses of the American Arbitration Association and the investment banking firm
so selected shall be borne equally by the Company and Liberty.
SECTION 5.21. "ISSUE PRICE" shall mean the price per share equal to (i) in
connection with an underwritten offering of Company Common Shares, the initial
price at which the stock is offered to the public or other investors, (ii) in
connection with other sales of Company Common Shares for cash, the cash price
paid for such stock, (iii) in connection with the deemed issuances of Restricted
Stock, the Fair Market Value of the stock on the Lapse Date (as defined in the
definition of "Excluded Issuance" above), (iv) in connection with the issuance
of Company Common Shares as consideration in an acquisition by the Company, the
average of the Fair Market Value of the stock for the five trading days ending
on the third trading day immediately preceding (a) the date upon which
definitive agreements with respect to such acquisition were entered into if the
number of Company Common Shares issuable in such transaction is fixed on that
date, or (b) such later date on which the consideration, or remaining portion
thereof, issuable in such transaction becomes fixed, (v) in connection with a
compensatory issuance of shares of Company Common Stock, the Fair Market Value
of the Company Common Stock, and (vi) in all other cases, including, without
limitation, in connection with the issuance of Company Common Shares pursuant to
an option, warrant or convertible security (other than in connection with the
conversion of the HSN Convertible Debt, in which case the Issue Price shall be
$10 per share, or in connection with issuances described in clause (v) above),
the Fair Market Value of the Company Common Shares on the date of issuance.
SECTION 5.22. "LIBERTY DIRECTOR" shall mean (a) any executive
officer or director of Liberty designated by Liberty to serve on the Company's
Board of Directors, provided that the Company's Board of Directors is not
unable, in the exercise of its fiduciary responsibilities, to recommend that the
Company's stockholders elect such individual to serve on the Company's
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Board of Directors, or (b) any other Person designated by Liberty who is
reasonably acceptable to the Company.
SECTION 5.23. "LIBERTY EXCHANGE AGREEMENT" shall mean the Exchange
Agreement dated as of December 20, 1996, by and between the Company and Liberty
HSN, Inc.
SECTION 5.24. "LIBERTY HOLDCO" shall mean any holding company wholly owned
by Liberty and reasonably acceptable to the Company, formed solely for the
purpose of acquiring and holding an equity interest in the Company.
SECTION 5.25. "OWNERSHIP PERCENTAGE" means, with respect to any
Stockholder, at any time, the ratio, expressed as a percentage, of (i) the
Equity Securities Beneficially Owned by such Stockholder (disregarding any legal
impediments to such Beneficial Ownership) and its Affiliates to (ii) the sum of
(x) the Total Equity Securities and (y) with respect to such Stockholder, any
Company Common Shares included in clause (i) that are issuable upon conversion,
exchange or exercise of Equity Securities that are not included in clause (x).
SECTION 5.26. "PERMITTED OWNERSHIP PERCENTAGE" shall have the meaning set
forth in Section 1.01.
SECTION 5.27. "PERMITTED TRANSFEREE" shall mean Liberty or Xx. Xxxxxx and
the members of their respective Stockholder Groups.
SECTION 5.28. "PERSON" shall mean any individual, partnership, joint
venture, corporation, trust, unincorporated organization, government or
department or agency of a government.
SECTION 5.29. "SALE TRANSACTION" shall mean the consummation of a merger,
consolidation or amalgamation between the Company and another entity (other than
an Affiliate of the Company) in which the Company is acquired by such other
entity or a Person who controls such entity, or a sale of all or substantially
all of the assets of the Company to another entity, other than a subsidiary of
the Company.
SECTION 5.30. "SECURITIES ACT" shall mean the Securities Act of 1933, as
amended, and the rules and regulations of the Commission promulgated thereunder.
SECTION 5.31. "SHARES" shall have the meaning set forth in the preambles to
this Agreement.
SECTION 5.32. "STOCKHOLDERS" shall mean the VU Parties, Liberty and Xx.
Xxxxxx.
SECTION 5.33. "STOCKHOLDERS GROUP" shall mean (a) in respect of Universal
and VU, the Universal Stockholders Group (as defined in the Amended and Restated
Stockholders Agreement), (b) in respect of Liberty, the Liberty Stockholders
Group (as defined in the Amended and Restated Stockholders Agreement) and (c) in
respect of Xx. Xxxxxx, the Xx. Xxxxxx Stockholders Group (as defined in the
Amended and Restated Stockholders Agreement).
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SECTION 5.34. "SUBSIDIARY" shall mean, as to any Person, any corporation or
other entity at least a majority of the shares of stock or other ownership
interests of which having general voting power under ordinary circumstances to
elect a majority of the Board of Directors or similar governing body of such
corporation or other entity (irrespective of whether or not at the time stock of
any other class or classes shall have or might have voting power by reason of
the happening of any contingency) is, at the time as of which the determination
is being made, owned by such Person, or one or more of its Subsidiaries or by
such Person and one or more of its Subsidiaries.
SECTION 5.35. "THIRD PARTY TRANSFEREE" shall have the meaning ascribed to
such term in the Amended and Restated Stockholders Agreement.
SECTION 5.36. "13D GROUP" shall mean any group of Persons acquiring,
holding, voting or disposing of Voting Securities which would be required under
Section 13(d) of the Exchange Act and the rules and regulations thereunder (as
in effect, and based on legal interpretations thereof existing, on the date
hereof) to file a statement on Schedule 13D with the Commission as a "person"
within the meaning of Section 13(d)(3) of the Exchange Act if such group
Beneficially Owned Voting Securities representing more than 5% of any class of
Voting Securities then outstanding.
SECTION 5.37. "TOTAL DEBT" shall mean all obligations of the Company and
its Subsidiaries for money borrowed, at such time (including all long-term
senior and subordinated indebtedness, all short-term indebtedness, the stated
amount of all letters of credit issued for the account of the Company or any of
its Subsidiaries and (without duplication) all unreimbursed draws thereunder
(but excluding trade letters of credit)), net of cash (other than working
capital) or cash equivalent securities, as shown on the consolidated quarterly
or annual financial statements, including the notes thereto, of the Company and
its Subsidiaries included in the Company's filings under the Exchange Act for
such period, determined in accordance with GAAP, provided, however, that Total
Debt shall not include hedging, pledging, securitization or similar transactions
involving securities owned by the Company or its Subsidiaries to monetize the
underlying securities, to the extent such securities are the sole means of
satisfying such obligations and otherwise the fair value thereof.
SECTION 5.38. "TOTAL DEBT RATIO" shall mean, at any time, the ratio of (i)
Total Debt of the Company and its Subsidiaries on a combined consolidated basis
as of such time to (ii) EBITDA for the four fiscal quarter period ending as of
the last day of the most recently ended fiscal quarter as of such time.
SECTION 5.39. "TOTAL EQUITY SECURITIES" at any time shall mean, subject to
the next sentence, the total number of the Company's outstanding equity
securities calculated on a Company Common Stock equivalent basis (assuming (the
"ASSUMPTIONS") that all Exchange Shares have been issued). Any Equity Securities
Beneficially Owned by a Person that are not outstanding Voting Securities but
that, upon exercise, conversion or exchange, would become Voting Securities
(other than the Exchange Shares, which shall be deemed to be outstanding Equity
Securities for all purposes), shall be deemed to be outstanding for the purpose
of computing Total Equity Securities and the percentage of the Equity Securities
owned by such
-14-
Person but shall not be deemed to be outstanding for the purpose of computing
Total Equity Securities and the percentage of the Equity Securities owned by any
other Person.
SECTION 5.40. "TRANSFER" shall mean, directly or indirectly, to sell,
transfer, assign, pledge, encumber, hypothecate or similarly dispose of, either
voluntarily or involuntarily, or to enter into any contract, option or other
arrangement or understanding with respect to the sale, transfer, assignment,
pledge, encumbrance, hypothecation or similar disposition of, any Company Common
Shares Beneficially Owned by such Stockholder or any interest in any Company
Common Shares Beneficially Owned by such Stockholder, PROVIDED, HOWEVER, that, a
merger or consolidation in which a Stockholder is a constituent corporation
shall not be deemed to be the Transfer of any Company Common Shares Beneficially
Owned by such Stockholder (PROVIDED, that a significant purpose of any such
transaction is not to avoid the provisions of this Agreement). For purposes of
this Agreement, the conversion of Company Class B Stock into Company Common
Stock shall not be deemed to be a Transfer.
SECTION 5.41. "VU DIRECTOR" shall mean (a) any executive officer or
director of VU designated by VU to serve on the Company's Board of Directors,
provided that the Company's Board of Directors is not unable, in the exercise of
its fiduciary responsibilities to the Company's stockholders, to recommend that
the Company's stockholders elect such individual to serve on the Company's Board
of Directors, or (b) any other Person designated by VU who is reasonably
acceptable to the Company.
SECTION 5.42. "VOTING SECURITIES" shall mean at any particular time the
shares of any class of capital stock of the Company which are then entitled to
vote generally in the election of directors.
ARTICLE VI
MISCELLANEOUS
SECTION 6.01. NOTICES. All notices, requests and other communications to
any party hereunder shall be in writing (including telecopy) and shall be given,
if to Vivendi Universal, S.A. or Universal Studios, Inc., to:
Vivendi Universal, S.A.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx-Xxxxxxx Xxxxx
Xxxxxx Xxxxxxxx III
Facsimile: (000) 000-0000
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with a copy to:
Universal Studios, Inc.
000 Xxxxxxxxx Xxxx Xxxxx
Xxxxxxxxx Xxxx, Xxxxxxxxxx 00000
Attention: Xxxxx Xxxxxxx
Facsimile: (000) 000-0000
with a copy to:
Cravath, Swaine & Xxxxx
Worldwide Plaza
000 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxx
Facsimile: (000) 000-0000
if to Liberty Media Corporation, to:
Liberty Media Corporation
00000 Xxxxxxx Xxxxxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: General Counsel
Facsimile: (000) 000-0000
with a copy to:
Xxxxx Xxxxx L.L.P.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxxx X. XxXxxxx
Facsimile: (000) 000-0000
if to Xx. Xxxxxx, to:
Xxxxx Xxxxxx
Chairman and Chief Executive Officer
USA Networks, Inc.
Carnegie Hall Tower
000 X. 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
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with a copy to:
USA Networks, Inc.
Carnegie Hall Tower
000 X. 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: General Counsel
Facsimile: (000) 000-0000
with a copy to:
Wachtell, Lipton, Xxxxx & Xxxx
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxxxx
Facsimile: (000) 000-0000
if to the Company, to:
USA Networks, Inc.
Carnegie Hall Tower
000 X. 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: General Counsel
Facsimile: (000) 000-0000
with a copy to:
Wachtell, Lipton, Xxxxx & Xxxx
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
or such address or facsimile number as such party may hereafter specify for the
purpose by notice to the other parties hereto. Each such notice, request or
other communication shall be effective when delivered personally, telegraphed,
or telecopied, or, if mailed, five business days after the date of the mailing.
SECTION 6.02. AMENDMENTS; NO WAIVERS. (a) Any provision of this Agreement
may be amended or waived if, and only if, such amendment or waiver is in writing
and signed, in the case of an amendment, by the party whose rights or
obligations hereunder are affected by such amendment, or in the case of a
waiver, by the party or parties against whom the waiver is to be effective.
Approval by the VU Parties of any amendment to this Agreement (or any waiver of
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any provision hereof) shall be required only if it relates to Article I, Section
2.01 (as applied to the VU Parties), Article VI, or if such amendment or waiver
would adversely affect any rights of, or impose any obligations on, the VU
Parties provided hereunder or under the Amended and Restated Stockholders
Agreement. Any amendment or waiver by the Company shall be authorized by a
majority of the Board of Directors (excluding for this purpose any director who
is a VU Director or Liberty Director as provided for in this Agreement).
(b) No failure or delay by any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or remedies
provided by law.
SECTION 6.03. SUCCESSORS AND ASSIGNS. Except as provided in Section 1.04,
neither this Agreement nor any of the rights or obligations under this Agreement
shall be assigned, in whole or in part (except by operation of law pursuant to a
merger of VU or Liberty with another Person a significant purpose of which is
not to avoid the provisions of this Agreement), by any party without the prior
written consent of the other parties hereto. Subject to the foregoing, the
provisions of this Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and permitted assigns.
SECTION 6.04. GOVERNING LAW; CONSENT TO JURISDICTION. This Agreement shall
be construed in accordance with and governed by the internal laws of the State
of Delaware, without giving effect to the principles of conflicts of laws. Each
of the parties hereto hereby irrevocably and unconditionally consents to submit
to the non-exclusive jurisdiction of the courts of the State of Delaware, for
any action, proceeding or investigation in any court or before any governmental
authority ("LITIGATION") arising out of or relating to this Agreement and the
transactions contemplated hereby and further agrees that service of any process,
summons, notice or document by U.S. mail to its respective address set forth in
this Agreement shall be effective service of process for any Litigation brought
against it in any such court. Each of the parties hereto hereby irrevocably and
unconditionally waives any objection to the laying of venue of any Litigation
arising out of this Agreement or the transactions contemplated hereby in the
courts of the State of Delaware, and hereby further irrevocably and
unconditionally waives and agrees not to plead or claim in any such court that
any such Litigation brought in any such court has been brought in an
inconvenient forum. Each of the parties irrevocably and unconditionally waives,
to the fullest extent permitted by applicable law, any and all rights to trial
by jury in connection with any Litigation arising out of or relating to this
Agreement or the transactions contemplated hereby.
SECTION 6.05. COUNTERPARTS; EFFECTIVENESS. This Agreement may be signed in
any number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
This Agreement shall become effective upon the Closing, at which time this
Agreement shall supersede in all respects the 1997 Governance Agreement.
SECTION 6.06. SPECIFIC PERFORMANCE. The Company, Xx. Xxxxxx, Universal, VU
and Liberty each acknowledges and agrees that the parties' respective remedies
at law for a
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breach or threatened breach of any of the provisions of this Agreement would be
inadequate and, in recognition of that fact, agrees that, in the event of a
breach or threatened breach by the Company, Universal, VU or Liberty of the
provisions of this Agreement, in addition to any remedies at law, Xx. Xxxxxx,
Universal, VU, Liberty and the Company, respectively, without posting any bond
shall be entitled to obtain equitable relief in the form of specific
performance, a temporary restraining order, a temporary or permanent injunction
or any other equitable remedy which may then be available.
SECTION 6.07. REGISTRATION RIGHTS. (a) The VU Parties, Liberty and Xx.
Xxxxxx shall be entitled to customary registration rights relating to Company
Common Stock (and with respect to the VU Parties, the Warrants) owned by them as
of the Closing or acquired from the Company (including upon the exercise of the
Warrants) in the future (including the ability to transfer registration rights
in connection with the sale or other disposition of Company Common Stock as set
forth in this Agreement). In the case of the VU Parties, references in this
Section 6.07 to Company Common Stock shall be deemed to include the Warrants.
(b) If requested by a Stockholder, the Company shall be required promptly
to cause the Company Common Stock owned by such Stockholder or its Affiliates to
be registered under the Securities Act in order to permit such Stockholder or
such Affiliate to sell such shares in one or more (but not more than (i) in the
case of the VU Parties, four, (ii) in the case of Liberty, four and (iii) in the
case of Xx. Xxxxxx, three) registered public offerings (each, a "DEMAND
REGISTRATION"). Each Stockholder shall also be entitled to customary piggyback
registration rights. If the amount of shares sought to be registered by a
Stockholder and its Affiliates pursuant to any Demand Registration is reduced by
more than 25% pursuant to any underwriters' cutback, then such Stockholder may
elect to request the Company to withdraw such registration, in which case, such
registration shall not count as one of such Stockholder's Demand Registrations.
If a Stockholder requests that any Demand Registration be an underwritten
offering, then such Stockholder shall select the underwriter(s) to administer
the offering, provided that such underwriter(s) shall be reasonably satisfactory
to the Company. If a Demand Registration is an underwritten offering and the
managing underwriter advises the Stockholder initiating the Demand Registration
in writing that in its opinion the total number or dollar amount of securities
proposed to be sold in such offering is such as to materially and adversely
affect the success of such offering, then the Company will include in such
registration, first, the securities of the initiating Stockholder, and,
thereafter, any securities to be sold for the account of others who are
participating in such registration (as determined on a fair and equitable basis
by the Company). In connection with any Demand Registration or inclusion of a
Stockholder's or its Affiliate's shares in a piggyback registration, the
Company, such Stockholder and/or its Affiliates shall enter into an agreement
containing terms (including representations, covenants and indemnities by the
Company and such Stockholder), and shall be subject to limitations, conditions,
and blackout periods, customary for a secondary offering by a selling
stockholder. The costs of the registration (other than underwriting discounts,
fees and commissions) shall be paid by the Company. The Company shall not be
required to register such shares if a Stockholder would be permitted to sell the
Company Common Stock in the quantities proposed to be sold at such time in one
transaction under Rule 144 of the Securities Act or under another comparable
exemption therefrom.
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(c) If the Company and a Stockholder cannot agree as to what constitutes
customary terms within ten days of such Stockholder's request for registration
(whether in a Demand Registration or a piggyback registration), then such
determination shall be made by a law firm of national reputation mutually
acceptable to the Company and such Stockholder.
SECTION 6.08. TERMINATION. Except as otherwise provided in this Agreement,
this Agreement shall terminate (a) as to the VU Parties, at such time that the
VU Parties Beneficially Own Equity Securities representing less than 5% of the
Total Equity Securities, (b) as to Liberty, at such time that Liberty
Beneficially Owns Equity Securities representing less than 5% of the Total
Equity Securities and (c) as to Xx. Xxxxxx, at such time that the CEO
Termination Date has occurred or at such time as he becomes Disabled. In respect
of "Contingent Matters," such provisions shall terminate as to Xx. Xxxxxx and
Liberty as set forth therein.
SECTION 6.09. SEVERABILITY. If any term, provision, covenant or restriction
of this Agreement is held by a court of competent jurisdiction to be invalid,
void or unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated, provided that the parties hereto
shall negotiate in good faith to attempt to place the parties in the same
position as they would have been in had such provision not been held to be
invalid, void or unenforceable.
SECTION 6.10. COOPERATION. Each of Universal, VU, Liberty and Xx. Xxxxxx
covenants and agrees with the other to use its reasonable best efforts to cause
the Company to fulfill the Company's obligations under this Agreement.
SECTION 6.11. ADJUSTMENT OF SHARE NUMBERS. If, after the date of this
Agreement, there is a subdivision, split, stock dividend, combination,
reclassification or similar event with respect to any of the shares of capital
stock referred to in this Agreement, then, in any such event, the numbers and
types of shares of such capital stock referred to in this Agreement shall be
adjusted to the number and types of shares of such capital stock that a holder
of such number of shares of such capital stock would own or be entitled to
receive as a result of such event if such holder had held such number of shares
immediately prior to the record date for, or effectiveness of, such event.
SECTION 6.12. ENTIRE AGREEMENT. Except as otherwise expressly set forth
herein, this Agreement, the Amended and Restated Stockholders Agreement, the
Liberty Exchange Agreement, the Transaction Agreement and each of the other
agreements contemplated by the Transaction Agreement embody the complete
agreement and understanding among the parties hereto with respect to the subject
matter hereof and supersede and preempt any prior understandings, agreements or
representations by or among the parties, written or oral, that may have related
to the subject matter hereof in any way (including, without limitation,
effective upon the Closing, all stockholders agreements relating to the Company
(other than the Amended and Restated Stockholders Agreement) between Liberty and
Xx. Xxxxxx). Without limiting the generality of the foregoing, to the extent
that any of the terms hereof are inconsistent with the rights or obligations of
any party under any other agreement with any other party, the terms of this
Agreement shall govern.
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SECTION 6.13. INTERPRETATION. References in this Agreement to Articles and
Sections shall be deemed to be references to Articles and Sections of this
Agreement unless the context shall otherwise require. The words "include,"
"includes" and "including" shall be deemed to be followed by the phrase "without
limitation." The words "hereof," "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of such agreement or instrument.
SECTION 6.14. HEADINGS. The titles of Articles and Sections of this
Agreement are for convenience only and shall not be interpreted to limit or
otherwise affect the provisions of this Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
USA NETWORKS, INC.
By: /s/ Xxxxxx Xxxxxxxxxxx
------------------------------------
Name: Xxxxxx Xxxxxxxxxxx
Title: Senior Vice President
VIVENDI UNIVERSAL, S.A.
By: /s/ Xxxx-Xxxxx Xxxxxxx
-----------------------------------
Name: Xxxx-Xxxxx Xxxxxxx
Title: Chairman and CEO
UNIVERSAL STUDIOS, INC.
By: /s/ Guillaume Hannezo
-----------------------------------
Name: Guillaume Hannezo
Title: Special power of attorney
LIBERTY MEDIA CORPORATION
By: /s/ Xxxxxx X. Xxxxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: President and CEO
/s/ Xxxxx Xxxxxx
---------------------------------------
Xxxxx Xxxxxx
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