EXHIBIT 99.1
STOCKHOLDERS' AGREEMENT
STOCKHOLDERS' AGREEMENT, dated as of February 9, 1998, by and among Tele-
Communications, Inc., a Delaware corporation ("TCI"); Xxxx X. Xxxxxx, a resident
of Colorado ("JCM"); Xxxxxx Xxxxxx, a resident of Colorado ("LM"); Xxxx Xxxxxxx,
a resident of Colorado, both in any Representative Capacity (as defined in
Exhibit A to this Agreement) and individually ("Xxxx"); Xxx Xxxxxxx, a resident
of Colorado, both in any Representative Capacity (as defined in Exhibit A to
this Agreement) and individually ("Xxx"); the Estate of Xxx Xxxxxxx (the "Xxx
Estate"); the Estate of Xxxxx Xxxxxxx (the "Xxxxx Estate"); and each individual
or entity which hereafter becomes a party to or bound by this Agreement in
accordance with its terms.
PREAMBLE
TCI, JCM, Gary, Kim, the Xxx Estate and the Xxxxx Estate are, together with
certain other persons, the parties to a certain Agreement, effective as of
January 5, 1998 and titled "AGREEMENT RE: SETTLEMENT OF XXXXXXX ESTATE
LITIGATION" (the "Settlement Agreement").
This Agreement is the "Shareholders' Agreement" referred to in the
Settlement Agreement, and each party to this Agreement has independently
concluded that the execution, delivery and performance of this Agreement is in
his, her or its best interests.
In consideration of the foregoing premises and the covenants and agreements
contained in this Agreement and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties, intending
to be legally bound, agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Defined Terms. Capitalized terms used in this
Agreement have the respective meanings given them in Exhibit A.
Section 1.2 Certain Rules of Construction. Certain rules for the
interpretation and construction of this Agreement are contained in Section 6.1.
ARTICLE II
VOTING OF SHARES
Section 2.1 Board Representation of Xxxxxxx Group. (a) Subject
to subsections 2.1(b), 2.1(c) and 2.1(d), in each election of directors of any
Company (whether at a meeting or by written consent in lieu of a meeting or
otherwise), JCM (or his legal representative, if he is incapacitated) will vote
or cause to be voted all High Vote Shares Beneficially Owned by him for the
election as one of the directors of such Company (the "Designated Director" of
such Company) either Xxx Xxxxxxx or another individual designated by the Xxxxxxx
Group, provided that the following requirements are satisfied:
(i) Xxx Xxxxxxx will be the Xxxxxxx Group's initial nominee as the
Designated Director of TCI. Not later than the tenth day
after the Xxxxxxx Group Representative receives written notice
from JCM or such Company of the intended mailing (at any time
after the date of this Agreement) of notice to stockholders of
any Company of a meeting for the purpose of electing
directors, the Xxxxxxx Group Representative shall notify each
of JCM, TCI and such Company in writing of the name of the
individual designated by the Xxxxxxx Group as their nominee as
Designated Director. If no such notice is given on a timely
basis, JCM, TCI and such Company may for all purposes treat
the then incumbent individual, if any, then serving as the
Designated Director of such Company as the nominee designated
by the Xxxxxxx Group for election as Designated Director in
such election.
(ii) No Company nor JCM shall be required to nominate, appoint,
elect reappoint, reelect or vote for the election,
appointment, reelection or reappointment of any individual
serving or nominated to serve as the Designated Director of
any Company if, in the good faith judgment of the Board of
Directors of such Company or JCM, (A) there has been any
action or omission by such Person or any other event or
circumstance affecting or existing with respect to such Person
that would constitute cause for removal of a director of a
business corporation under the laws of the jurisdiction of
incorporation of such Company, (B) such individual does not,
at the time of nomination and at the time of election or
appointment, meet all eligibility requirements under
applicable law and of NASDAQ or any stock exchange on which
securities of such Company are listed or quoted or (C) such
individual is directly or indirectly a director, officer or
Affiliate of any Entity that directly or indirectly competes
with any significant business of any Company or any Affiliate
of any Company. JCM or such Company shall give the Xxxxxxx
Group Representative prompt written notice of any
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determination by him or it that any nominee of the Xxxxxxx
Group is disqualified under the terms of this clause (ii), and
the Xxxxxxx Group Representative may, within five Business
Days after such notice is given, nominate a substitute who
meets the requirements of this clause (ii). For purposes of
this clause (ii) the fact that Xxx Xxxxxxx or another nominee
as a Designated Director commenced the actions and proceedings
referred to in the Settlement Agreement shall not itself be a
disqualification of any of the kinds referred to above in this
clause.
(iii) If any individual proposed by the Xxxxxxx Group Representative
to serve as the Designated Director of any Company who
satisfies the requirements set forth in clause (ii) above is
not nominated by the Board of Directors of that Company for
election or is not appointed to fill a vacancy contemplated by
subsection 2.1(b), but such individual is nominated on a
timely basis by the Xxxxxxx Group Representative in a manner
permitted by applicable law and the certificate of
incorporation and by-laws of that Company, JCM shall (subject
to the terms and conditions set forth in this Section 2.1)
vote all High Vote Shares Beneficially Owned by him for the
election of such individual as one of the directors of such
Company.
(b) Subject to subsections 2.1(a), 2.1(c) and 2.1(d), in the event of
any vacancy in the office of Designated Director of any Company results from
the resignation, death or removal of the incumbent Designated Director and if
the Board of Directors of that Company has the legal authority to fill the
vacancy for the balance of that incumbent's term with a substitute appointed
by such Board, JCM and the Xxxxxxx Group Representative will use their
respective best efforts to cause such Board to exercise that authority and
fill the vacancy with an individual designated by the Xxxxxxx Group
Representative in a written notice delivered to Xxxxxx not later than three
Business Days after such vacancy occurs.
(c) For the sake of certainty, subsections 2.1(a) and 2.1(b) are
intended to create obligations or rights with respect to only one Designated
Director for each Company. Without limiting the generality of the foregoing
sentence, in the event that the Board of Directors of any Company is or shall
be classified, neither JCM nor any Company will be obligated to nominate,
elect, appoint or vote for more than one Designated Director for the entire
Board of Directors, and the requirements of subsections 2.1(a) and 2.1(b)
will apply only to the election of the members of the class that includes
such sole Designated Director.
(d) The parties acknowledge and agree that the directors of each
Company are or may be subject to fiduciary duties to stockholders or other
security holders under mandatory provisions of law. In addition, although
this Section 2.1 is intended (subject to its express terms and conditions) to
bind JCM to vote High Vote Shares Beneficially Owned by him if, as and when
required by this
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Agreement, the parties recognize and agree that nothing contained in this
Agreement constitutes a guarantee or other assurance that any nominee of the
Xxxxxxx Group as the Designated Director of a Company will be elected or
remain in office.
Section 2.2 VOTING ON OTHER MATTERS
(a) In the case of any matter (other than the election or appointment
of a Designated Director subject to Section 2.1) submitted or to be submitted
to a vote or the written consent of, or other action by, the holders of any
class or series of High Vote Shares of any Company at a time when any member
of the Xxxxxxx Group and any member of the Xxxxxx Group Beneficially Own any
such High Vote Shares, JCM, on behalf of the Xxxxxx Group, and the Xxxxxxx
Group Representative, on behalf of the Xxxxxxx Group, will use their
reasonable efforts to consult with each other in advance concerning the
manner in which each Group will vote or otherwise act with respect to such
matter. Subject to the next sentence, if such Persons are unable to reach
unanimous agreement concerning the manner in which each Group will vote or
otherwise act with respect to such matter, each member of the Xxxxxx Group
and each Member of the Xxxxxxx Group will vote or otherwise act with respect
to such matter in the manner directed by JCM. If JCM shall fail in any
material respect to vote for any qualified nominee of the Xxxxxxx Group as
Designated Director for any Company if, as and when required by Section 2.1
or if the directors of any Company fail to fill any vacancy referred to in
Section 2.1(b) with the substitute proposed as provided therein, then unless
such failure is the result of the failure of such nominee to agree to serve
or otherwise caused by any act or omission of such nominee or any member of
the Xxxxxxx Group, the members of the Xxxxxxx Group shall have complete
discretion in determining the manner in which they will vote their High Vote
Shares in such Company with respect to any such matter that is submitted to
the holders of such High Vote Shares (and the rights and powers granted to
JCM with respect to such High Vote Shares in subsection 2.2(b) shall be
suspended) unless and until JCM or such directors shall correct such failure
by voting for or appointing the Xxxxxxx Group's nominee on a subsequent
occasion or otherwise.
(b) In furtherance of the purposes and intent of this Section, each
member of the Xxxxxxx Group hereby grants to JCM or to his designee(s), with
full power of substitution, an irrevocable proxy to vote, in person or by
proxy and at any annual or special meeting of stockholders (or adjournment
thereof), by written consent or otherwise, all High Vote Shares in each and
every Company (whether now existing or hereafter created) now or at any time
hereafter Beneficially Owned by such member. Each member of the Xxxxxxx
Group affirms and agrees that such proxy is coupled with an interest and, to
the maximum extent permitted by applicable law, is irrevocable and shall
survive the disability, incapacity, bankruptcy, insolvency, dissolution,
liquidation or death of such member and shall extend to such member's heirs,
successors, assigns and legal representatives. Each member of the Xxxxxxx
Group hereby ratifies and confirms all that JCM or his designee(s) or
substitute(s) may lawfully do or cause to be done by virtue of such proxy.
Each member of the Xxxxxxx Group agrees to execute any separate form of
proxy, written consent to
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action or other instrument that JCM may at any time and from time to time
reasonably request in order to evidence such member's proxy and to carry out
the purposes and intent of this Section.
Section 2.3 Other Actions. Each party to this Agreement agrees that
whenever this Agreement requires any action on the part of any party in his
capacity as a holder of any High Vote Shares of any Company, such party will,
solely in such capacity, take all steps reasonably necessary to make such
action effective, including attending and voting at any meeting of
stockholders (or any adjournment thereof) all shares of High Vote Shares held
by such party in favor of such action, or executing or causing to be
executed, as promptly as practicable, a consent in writing to the taking of
such action.
ARTICLE III
ACQUISITION OPPORTUNITIES
Section 3.1 PARTICIPATION OFFER.
(a) Subject to the terms and provisions of this Article III, if JCM
shall hereafter acquire, and shall determine to exercise, any right (an
"Acquisition Right") to acquire any Equity Securities or any Rights to
acquire any Equity Securities of any Covered Issuer from such Covered Issuer
or any third-party which is not a Related Party or Affiliate of JCM
(collectively, "Subject Securities"), other than an Exempt Acquisition Right,
JCM shall promptly notify the Xxxxxxx Group Representative of such
Acquisition Right and shall either offer or cause such Covered Issuer or
third party to offer to the Xxxxxxx Group (a "Participation Offer"), in the
manner hereinafter set forth, the opportunity to acquire, collectively and on
economic terms on a per share or per security basis that are substantially
identical to those offered to JCM, up to, but in no event more than the
number or amount (as appropriate) of Subject Securities equal to the product
obtained by multiplying the total number or amount (as appropriate) of such
Subject Securities as to which JCM exercises such Acquisition Right by a
fraction the numerator of which is the total number of High Vote Shares
Beneficially Owned by any and all members of the Xxxxxxx Group as of the date
the applicable Participation Notice is given and the denominator of which is
the sum of (i) the total number of High Vote Shares Beneficially Owned by any
and all members of the Xxxxxxx Group as of such date plus (ii) the total
number of High Vote Shares Beneficially Owned by any and all members of the
Xxxxxx Group as of such date. If, when and to the extent the options to
acquire shares of TCI capital stock created in favor of JCM by the June 16
Stock Transaction (as defined in the Settlement Agreement) are exercised,
they shall collectively constitute an Acquisition Right subject to this
Article III, but the number of shares which are Subject Shares with respect
to such Acquisition Right shall be reduced by the number of TCI Low Vote
Shares that the Xxxxx Estate has the right to exchange pursuant to numbered
paragraph 24 of the Settlement Agreement. The term Acquisition Right
includes any right of JCM (if and to the extent exercised) to acquire Equity
Securities of a Covered Issuer in connection with a "going private"
transaction involving that Covered Issuer.
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(b) The Xxxxxxx Group may exercise in whole or in part its rights under
Section 3.1(a) with respect to any Acquisition Right. Subject to the terms
and conditions set forth Section 3.2, the Subject Securities that the Xxxxxxx
Group shall be entitled to acquire with respect to any Participation Offer
may be allocated among the members of the Xxxxxxx Group in any manner in
which they agree among themselves. Without limiting the generality of
Section 6.2, the members of the Xxxxxx Group and each Covered Issuer shall be
entitled to rely exclusively and conclusively on information provided by the
Xxxxxxx Group Representative as to any such allocation or other matters in
connection with the exercise of the rights of the Xxxxxxx Group under this
Article III and shall not, in any event, have any liability to any member of
the Xxxxxxx Group as a result of such reliance.
Section 3.2 NOTICES OF ACCEPTANCE AND OTHER PROCEDURAL MATTERS.
(a) Unless JCM and the Xxxxxxx Group Representative otherwise agree, in
order to accept a Participation Offer, the Xxxxxxx Group members must, on or
before the date of execution and delivery by JCM (or any of his Controlled
Affiliates or designees), execute and deliver to the Covered Issuer or the
third-party referred to in Section 3.1(a), as the case may be, all of the
agreements, instruments and other documents required to be executed and
delivered by JCM (or any of his Affiliates or designees) in connection with
the exercise of the relevant Acquisition Right; provided that the
representations, warranties, covenants, conditions and other terms and
provisions thereof are substantially identical on a per share or per security
basis as the terms and conditions of any such agreements, instruments and
other documents required to be executed and delivered by JCM (or any of his
Controlled Affiliates or designees), subject to any variations customary in
similar transactions to reflect differences in the sizes of participations
and other differences in the particular circumstances of such participants.
(b) In order to accept any opportunity presented to the Xxxxxxx Group by
JCM pursuant to Section 3.1, the Xxxxxxx Group Representative must give a
written notice of acceptance to JCM, not later than 21 days after JCM gives
the Xxxxxxx Group Representative written notice of such opportunity. If the
Xxxxxxx Group does not duly elect on a timely basis to accept any
Participation Offer for all or any portion of its allocated number or amount
of the Subject Securities, or in the event any unexcused default by any
member of the Xxxxxxx Group in purchasing all of such Subject Securities if,
as and when required by the terms of the agreements, instruments and
documents executed and delivered pursuant to subsection 3.2(a), then in
addition to any other rights or remedies otherwise available to the Covered
Issuer, any third-party offeror, JCM or any other Person participating in
that or a related transaction, (i) the Covered Issuer or third-party referred
to in Section 3.1(a), as the case may be, may sell or otherwise dispose of
the Subject Securities that the Xxxxxxx Group does not elect to acquire or
fails to purchase to JCM or any other Person and on any terms selected by it
in its absolute discretion, without being required to re-offer such Subject
Securities to the Xxxxxxx Group, (ii) JCM shall be relieved of all further
obligations or liabilities to the Xxxxxxx Group pursuant to this Article III
with respect to that Acquisition Right and (iii) in
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the case of any such unexcused default by any member of the Xxxxxxx Group,
JCM also will be relieved of all further obligations or liabilities to such
defaulting member with respect to any future Acquisition Right.
(c) Without limiting the generality of subsection 3.2 (a), (i) if an
Acquisition Right is in conjunction with the borrowing of money from JCM or
any of his Affiliates or Related Parties, then no member of the Xxxxxxx Group
shall have any right to participate therein unless such member (or its
Affiliates) purchases or participates, on a pro rata basis, in the related
financing on the same basis as JCM or any of his Affiliates or Related
Parties or (ii) if an Acquisition Right is part of a larger transaction or
one of a series of related transactions pursuant to which JCM or any of his
Affiliates or Related Parties have agreed (or are required to agree in order
to exercise such Acquisition Right) to provide consideration or make
commitments or undertakings beyond simply paying the purchase price for the
Equity Securities that are subject to such Acquisition Right, then no member
of the Xxxxxxx Group shall have any right to participate therein unless such
member (or its Affiliates) agrees to and has the ability to provide the same
consideration, make the same commitments and undertakings and, in general,
consummate such larger transaction or series of related transactions on
substantially the same per share or per security basis as JCM or any of this
Affiliates or Related Parties.
ARTICLE IV
TAG-ALONG AND DRAG-ALONG RIGHTS
Section 4.1 TAG-ALONG RIGHT.
(a) Subject to the terms and conditions set forth in this Section 4.1,
if, at any time after the date of this Agreement, any member of the Xxxxxx
Group (a "Selling Stockholder") proposes to Transfer to any Person(s),
including TCI or any of its Affiliates (the "Prospective Purchaser"), any TCI
High Vote Shares of any class or series, other than in an Exempt Transfer,
such Selling Stockholder shall not consummate or enter into a binding
agreement to consummate such sale unless the Prospective Purchaser, one or
more members of the Xxxxxx Group, any other Person or Persons designated by
JCM or any combination of the foregoing (in any such case, the "Buyers")
shall offer to purchase TCI High Vote Shares of the same class or series that
were Beneficially Owned by any one or more members of the Xxxxxxx Group as of
the date of the applicable Tag-Along Notice and that at all times thereafter
continue to be owned by one or more members of the Xxxxxxx Group until sold
pursuant to this Section ("Eligible Shares"). In no event will Eligible
Shares include any TCI High Vote Shares the Beneficial Ownership of which is
acquired after the date the Tag-Along Notice is given or which cease to be
Beneficially Owned by a member of the Xxxxxxx Group at any time prior to the
sale and purchase of such TCI High Vote Shares pursuant to this Section 4.1.
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(b) Prior to any sale by any Selling Stockholder subject to subsection
4.1(a), such Selling Stockholder or JCM shall give the Xxxxxxx Group
Representative a written notice (the "Tag-Along Notice") that shall set
forth: (i) the number of TCI High Vote Shares subject to the proposed sale;
(ii) the name and address of the Prospective Purchaser; and (iii) the
proposed amount and kind(s) of consideration (including a good faith estimate
of the value of any non-cash consideration) and terms and conditions of
payment offered by the Prospective Purchaser. The Xxxxxxx Group may exercise
its tag-along right under this Section 4.1 by delivery to JCM, within 21 days
after the date the applicable Seller's Notice is given, of a written notice
(the "Tag-Along Exercise Notice") signed by the Xxxxxxx Group Representative
and stating the aggregate number of Eligible Shares that the Xxxxxxx Group
proposes to include in the proposed sale (which number may not exceed the
number determined under subsection (c) of this Section 4.1)(the "Tag-Along
Shares"), as well as the name of each member of the Xxxxxxx Group who will
participate in such sale and the number of Tag-Along Shares allocated to each
such participating member. If no Tag-Along Exercise Notice is received
during such ten-day period or if any one or more members of the Xxxxxxx Group
otherwise fail to comply with the requirements set forth in this Section 4.1,
each Selling Stockholder will have the right for 180 days thereafter to
effect or enter into a binding agreement to effect the proposed sale,
provided that the terms and conditions relating to the amount, kind and
payment of consideration are not materially more favorable to the Selling
Stockholder than those stated in the Tag-Along Notice (or any subsequent
communication by JCM with the Xxxxxxx Group or the Xxxxxxx Group
Representative). Notwithstanding the foregoing, if a proposed sale is
subject to the receipt of any regulatory approval or expiration of any
waiting period under applicable law, the time period during which such sale
may be consummated or such binding agreement may be entered into shall be
extended until the expiration of five Business Days after all such approvals
have been received and all such waiting periods have expired, but in no event
shall such time period exceed an additional 180 days.
(c) The aggregate number of Eligible Shares of any class or series as to
which the Xxxxxxx Group, collectively, shall be entitled to exercise the
tag-along right under this Section 4.1 with respect to any transaction
referenced in any Tag-Along Notice shall be up to, but in no event more than
the product obtained by multiplying the total number of TCI High Vote Shares
of such class or series that the Prospective Purchaser is willing to purchase
from the members of the Xxxxxx Group and the members of the Xxxxxxx Group,
collectively, by a fraction the numerator of which is the total number of
Eligible Shares of that class or series Beneficially Owned by any and all
members of the Xxxxxxx Group as of the date the applicable Seller's Notice is
given and the denominator of which is the sum of (i) the total number of
Eligible Shares of that class or series Beneficially Owned by any and all
members of the Xxxxxxx Group as of such date plus (ii) the total number of
TCI High Vote Shares of that class or series Beneficially Owned by any and
all members of the Xxxxxx Group as of such date. Subject to the terms and
conditions set forth in this Section 4.1, the total number of Tag-Along
Shares that the Xxxxxxx Group shall be entitled to sell with respect to any
transaction referenced in any Tag-Along Notice may be allocated among the
members of the Xxxxxxx Group in any manner in which they agree among
themselves. Without limiting the
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generality of Section 6.2 the members of the Xxxxxx Group and the Prospective
Purchaser shall be entitled to rely exclusively and conclusively on
information provided by the Xxxxxxx Group Representative as to any such
allocation or other matters in connection with the exercise of the rights of
the Xxxxxxx Group under this Section 4.1 and shall not, in any event, have
any liability to any member of the Xxxxxxx Group as a result of such
reliance. The Xxxxxxx Group shall be entitled to exercise the tag-along right
under this Section 4.1 only with respect to issued and outstanding Tag-Along
Shares held by participating members of the Xxxxxxx Group and shall not be
entitled to exercise such right with respect to any Eligible Shares
underlying any unexercised Rights.
(d) Any purchase of Tag-Along Shares from the Xxxxxxx Group pursuant to
this Section 4.1 shall be on terms and conditions relating to the kind,
amount and terms of payment of consideration for such Tag-Along Shares that
are substantially identical, on a per share or per security basis, to the
terms and conditions offered by the Prospective Purchaser to the Selling
Stockholder.
(e) Any member of the Xxxxxxx Group who desires to exercise its rights
under this Section 4.1 must (i) agree and be able to sell to the Buyers good
and marketable title to the Tag-Along Shares proposed to be sold, free and
clear of all liens and restrictions (other than any applicable restrictions
on transfer of such Tag-Along Shares by the Buyers under the federal
securities laws), (ii) satisfy, as of the time of the closing of the sale by
the Selling Stockholder to the Prospective Purchaser, any and all conditions
to the sale by such member to the Buyers that are substantially identical to
those required to be satisfied by the Selling Stockholder (other than any
conditions that relate uniquely to the Selling Stockholder) and (iii) make or
provide to or for the benefit of the Buyers representations, warranties,
covenants and indemnities that are substantially identical to those required
to be made or provided by the Selling Stockholder to or for the benefit of
the Prospective Purchaser (other than any representations and warranties that
relate uniquely to the Selling Stockholder). (f) Any amendments,
modifications or waivers of the terms and conditions on which the Selling
Stockholder proposes or agrees to sell TCI High Vote Shares to a Prospective
Purchaser occurring after the conclusion of the ten-day period referred to in
subsection 4.1(b) shall not be deemed to require that such transaction be
re-offered to the Xxxxxxx Group unless the effect of such amendment,
modification or waiver is to make the terms of such sale materially more
favorable to the Selling Stockholder than the terms set forth in the last
Tag-Along Notice delivered prior to the conclusion of such period, and no
increase or decrease in the market value of the consideration offered in any
such sale shall constitute an amendment, modification or waiver of any
provision of such sale requiring further compliance with the provisions of
this Section 4.1.
(g) Subject to the terms and conditions contained in any agreement
entered into with the Buyers, and without limiting any other rights or
remedies that any Prospective Purchaser, Buyer or member of the Xxxxxx Group
may have, in the event that any member or members of the Xxxxxxx Group fail
to satisfy on a timely basis any condition to consummation of the purchase of
any Tag- 9
Along Shares by the Buyers, the Tag-Along Shares proposed to be sold by such
member or members of the Xxxxxxx Group shall be excluded from such sale, and
the members of the Xxxxxx Group shall be entitled to substitute additional
TCI High Vote Shares owned by them in place of such excluded Tag-Along
Shares.
(h) Nothing contained in this Section shall obligate JCM, any Selling
Stockholder, any Prospective Purchaser or any Buyer to consummate any sale
contemplated by this Section 4.1 and (subject to the terms of any binding
definitive sale agreement which may be entered into) such proposed sale may
be abandoned by such Persons at any time, whether before or after the giving
of any Tag-Along Notice or Tag-Along Exercise Notice.
(i) If the decision of JCM to pursue any sale that otherwise would be
subject to this Section 4.1 is a result of any judgment, order or decree
requiring a sale or other Disposition by any or all members of the Xxxxxx
Group of any of its or their High Vote Shares of or other interests in such
Company or imposing penalties or sanctions upon any member of the Xxxxxx
Group, any Company or any Affiliate of either if such interests are
maintained and if, in the good faith opinion of JCM, compliance with the time
periods, procedures or other provisions of this Section 4.1 would be
inconsistent with such judgment, order or decree or with avoiding any such
penalties or sanctions, then JCM may, with the consent of the Xxxxxxx Group
Representative (which consent shall not be withheld unreasonably), modify or
forego strict compliance with such time periods, procedures and provisions so
long as the essential purpose and intent of this Section 4.1 are preserved.
Section 4.2 DRAG-ALONG RIGHT.
(a) For purposes of this Section 4.2, the term "Approved Sale" shall
mean any proposal made or approved by JCM to Transfer to any Person(s),
including any Company or any Affiliate of any Company (a "Drag-Along
Purchaser"), in one transaction or a series of transactions, either all or
substantially all of the High Vote Shares of any Company Beneficially Owned
by him, or substantially all of the business or assets of any Company, in
either case regardless of whether such transaction or series of transactions
take the form of or include a merger or consolidation, a sale of all or
substantially all of assets of such Company, a sale of outstanding capital
stock or another type of transaction.
(b) If JCM at any time proposes an Approved Sale, the members of the
Xxxxxxx Group (the "Other Stockholders") will, subject to the terms and
conditions set forth in this Section 4.2, consent to, vote for, participate
in and raise no objections against such Approved Sale and will take all
reasonable actions in connection with the consummation of such Approved Sale
requested by JCM or the Drag-Along Purchaser. If the Approved Sale is
structured as a sale of outstanding High Vote Shares of any class or series
(an "Approved Stock Sale"), each such Other Stockholder must elect to either
(i) convert into Low Vote Shares of the issuer all High Vote Shares of each
affected class or series then owned by such Other Stockholder or thereafter
acquired by such Other Stockholder
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upon any exercise of any Rights to acquire any High Vote Shares or (ii) agree
to sell or otherwise Dispose of all of the High Vote Shares of such class or
series Beneficially Owned by such Other Stockholder (including any such High
Vote Shares issuable upon exercise of any unexercised Rights held by such
Other Stockholder) on terms and conditions substantially identical, on a per
share or per security basis, to those applicable to the High Vote Shares of
such class or series Beneficially Owned by JCM. If any such Other Stockholder
elects the option described in clause (ii) of the immediately preceding
sentence, the purchase price payable for any High Vote Shares issuable upon
exercise of any unexercised Rights held by such Other Stockholder shall be
reduced by the amount of cash or the fair market value of any other
consideration that would be payable by a holder thereof upon exercise.
(c) Without limiting the generality of subsection 4.2(b), if any
Approved Sale is structured as a sale of stock, each Other Stockholder will,
subject to the terms and conditions of this Section 4.2, enter into the same
form of sale agreement as the members of the Xxxxxx Group participating in
such sale, and provide the purchaser with such representations and warranties
as to such Other Stockholder's power and authority to sell and its ownership
of the securities being sold by such Other Stockholder to such purchaser,
with such covenants and with such indemnification for breach of such
representations, warranties and covenants as are customarily given by selling
stockholders in similar transactions. In the event any dispute arises over
whether the form of any such requested representations, warranties, covenants
or indemnities is considered customary in such transactions, such dispute
shall promptly be submitted to a law firm reasonably satisfactory to the
Xxxxxxx Group Representative and JCM, whose determination shall be binding
upon the parties.
(d) Nothing contained in this Section 4.2 shall obligate JCM, any
member of the Xxxxxx Group, any Company or any Drag-Along Purchaser to
consummate any proposed Approved Sale and, subject to the terms of any
binding definitive agreement for an Approved Sale which may be entered into,
any such proposed Approved Sale may be abandoned by any or all of such
Persons at any time.
(e) If the decision of JCM to pursue an Approved Sale with respect to
any Company is a result of any judgment, order or decree requiring a sale or
other Disposition by any or all members of the Xxxxxx Group of its or their
interests in such Company or imposing penalties or sanctions upon any member
of the Xxxxxx Group, any Company or any Affiliate of either if such interests
are maintained and if, in the good faith opinion of JCM compliance with the
time periods, procedures or other provisions of this Section 4.2 would be
inconsistent with such judgment, order or decree or with avoiding any such
penalties or sanctions, then JCM may, with the consent of the Xxxxxxx Group
Representative (which consent shall not be withheld unreasonably), modify or
forego strict compliance with such time periods, procedures and provisions so
long as the essential purpose and intent of this Section 4.2 are preserved.
11
ARTICLE V
CERTAIN REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 5.1. Representations and Warranties. Each party to this
Agreement represents and warrants to each other party that:
(a) Such party has the legal right and capacity, and all requisite
power and authority, to make and enter into this Agreement and to perform its
obligations hereunder and to comply with the provisions hereof. The
execution, delivery and performance of this Agreement by such party has been
duly authorized by all necessary action on the part of such party. This
Agreement has been duly executed and delivered by such party and constitutes
the valid and binding obligation of such party enforceable against it in
accordance with its terms, except as such enforcement may be limited by
applicable bankruptcy, insolvency, moratorium or other similar laws affecting
the rights of creditors generally and except that the availability of
equitable remedies, including specific performance, is subject to the
discretion of the court before which any proceeding therefor may be brought.
(b) The execution, delivery and performance of this Agreement by such
party, and the compliance by such party with the provisions hereof, do not
and will not (with or without notice or lapse of time, or both) conflict
with, or result in any violation of, or default under, or give rise to any
right of termination, cancellation or acceleration of any obligation or the
loss of a material benefit under, any loan or credit agreement, note, bond,
mortgage, indenture, lease or other agreement, instrument, permit,
concession, franchise, license, judgment, order, decree, statute, law,
ordinance, rule or regulation applicable to such party or any of its
properties or assets, other than any such conflicts, violations, defaults, or
other effects which, individually or in the aggregate, do not and will not
prevent, restrict or impede such party's performance of its obligations under
and compliance with the provisions of this Agreement. If such party is an
Entity, the execution, delivery and performance of this Agreement by such
party does not and will not contravene the charter, bylaws or other
organizational documents of such party.
Section 5.2. Revocation of Any Prior Proxies;No Impairment. Other
than the BT Proxy, each member of the Xxxxxxx Group or the Xxxxxx Group
hereby revokes all proxies and voting instructions, if any, with respect to
any High Vote Shares previously given by such Person and agrees that, except
as permitted by this Agreement, such member will not grant or give any other
proxies or voting instructions with respect to any High Vote Shares of any
Company, enter into any voting trust or other arrangement or agreement with
respect to the voting of any High Vote Shares of any Company now owned or
hereafter acquired by such Person, or agree, in any manner, to vote or
dispose of any such High Vote Shares of any Company in any manner other than
as provided herein or in an applicable Call Agreement. No party, by entering
into or amending any agreement, any transfer of securities or assets or any
other voluntary action, avoid or seek to avoid the
12
observance or performance of any of the terms of this Agreement or any Call
Agreement applicable to such party or any securities Beneficially Owned by
such party. The term "BT Proxy" means the voting rights granted to Bankers
Trust Company in the event of an exercise of remedies under a Permitted
Pledge of certain TCI High Vote Shares. The members of the Xxxxxxx Group
represent and warrant to the Company and the members of the Xxxxxxx Group
that the BT Proxy (including the terms and conditions of use of the BT Proxy)
is in a form customary for similar arm's length loan transactions between
similarly situated parties.
Section 5.3. Reasonable Efforts. Each party to this Agreement shall
use reasonable efforts to take, or cause to be taken, all lawful actions,
and to do, or cause to be done, and to assist and cooperate with the other
parties hereto in doing, all lawful things, necessary, proper or advisable to
carry out the intent and purposes of this Agreement, including (i) applying
for, obtaining and maintaining in effect all necessary actions or nonactions,
waivers, consents and approvals from Governmental Authorities and the making
of all necessary registrations and filings (including filings with
Governmental Authorities, if any) and the taking of all reasonable steps as
may be necessary to obtain an approval or waiver from, or to avoid an action
or proceeding by, any Governmental Authority, (ii) obtaining all other
necessary consents, approvals or waivers from third parties, (iii) defending
any lawsuits or other legal proceedings, whether judicial or administrative,
challenging the legality or validity of this Agreement or any part hereof,
including seeking to have any stay or temporary restraining order entered by
any court or other Governmental Authority vacated or reversed and (iv)
executing and delivering any additional instruments necessary to carry out
the intent and purposes of this Agreement; provided, however, that nothing in
this Section 5.2 shall require any such party to agree to, approve or
otherwise be bound by or satisfy any condition of any kind referred to in
Section 6.3 or to agree to any change to or waiver of the terms of this
Agreement or either Call Agreement or any waiver of any breach or violation
hereof or thereof or any rights or remedies with respect thereto. Without
limiting the generality of the foregoing, the parties will cooperate with
each other in seeking to structure any Approved Sale in the most
tax-efficient manner reasonably possible, consistently with the essential
purposes and intent of the applicable provisions of this Agreement.
Section 5.4 COVENANTS REGARDING DISPOSITIONS.
(a) Except for Exempt Transfers, no member of the Xxxxxx Group or the
Xxxxxxx Group shall sell, convey, exchange, pledge, hypothecate, give,
donate, distribute, assign or otherwise transfer, whether voluntarily,
involuntarily, directly or indirectly, any High Vote Shares of any Company,
any Rights to acquire any shares of or any voting or dispositive rights with
respect to any High Vote Shares of any Company or any other securities
subject to this Agreement or any Call Agreement, whether voluntary or
involuntary and whether directly or indirectly (any such action being
referred to as a "Disposition"), unless (i) such Disposition is made in
accordance with all applicable provisions of this Agreement and any
applicable Call Agreement, and (ii) prior to consummation of such Disposition
each Person to whom any such Disposition is made shall agree
13
in writing to be bound by the provisions hereof applicable to members of the
same Group as the transferor; provided, however, that clause (ii) of this
sentence shall not apply to any Disposition that is an "Exempt Transfer"
under any provision of this Agreement or the applicable Call Agreement unless
such provision expressly requires that the transferee become a party hereto
or thereto. Any purported Disposition in violation of this Agreement shall be
null and void and of no force or effect, and each party agrees that the
issuer of the securities involved in any such Disposition may (and may direct
each registrar and transfer agent, if any, for such securities to) refuse to
register or record any such purported Disposition on its transfer and
registration books and records or to otherwise recognize such purported
Disposition. For the sake of certainty, the term "Disposition" includes any
distribution or other Disposition of any securities subject to this Section
by the Xxx Estate or the Xxxxx Estate to any of the decedent's heirs or any
other Person.
(b) If, notwithstanding the foregoing, any purported Disposition in
violation of this Agreement is made, then (in addition to any other rights or
remedies of the parties hereto) the provisions of this Agreement (including
this Section) shall apply to each transferee and all securities involved in
such Disposition as fully as if such transferee were a party to this
Agreement and bound by all of the provisions hereof that are or were
applicable to the Person making such Disposition, whether or not such
transferee is required to or shall formally agree to become a party to or be
bound by this Agreement.
(c) If, notwithstanding the foregoing, any purported Disposition in
violation of this Agreement is held by a court of competent jurisdiction upon
entry of a final judgment or order to be effective, the parties intend that,
to the maximum extent permitted by applicable law, the provisions of this
Agreement (including this Section) shall apply to each transferee and all
securities involved in such Disposition as fully as if such transferee were a
party to this Agreement and bound by all of the provisions hereof which were
applicable or intended to be applicable to the Person making such
Disposition, whether or not such transferee is required to or shall formally
agree to be a party hereto.
Section 5.5. ADDITION OF SPIN-OFF COMPANIES AS PARTIES. If any
Spin-Off Company is created after the date of this Agreement, the parties
will use their respective reasonable efforts to cause such Spin-Off Company
to agree in writing to become a party to this Agreement and to be bound by
the provisions hereof applicable to Companies generally. If such Spin-Off
Company does not so agree, the parties agree that the provisions of this
Agreement that are applicable to the High Vote Shares or other securities of
Companies generally shall continue to apply to the parties and the parties
will use their good faith, reasonable efforts to negotiate and agree upon any
appropriate and equitable modifications to such provisions reasonably
required in order to carry out the intent and purposes of such provisions as
they relate to such Spin-Off Company, so far as may be possible and
reasonably practicable given the failure of such Spin-Off Company to become a
party to this Agreement.
14
ARTICLE VI
MISCELLANEOUS
Section 6.1. TERMS GENERALLY; CERTAIN RULES OF CONSTRUCTION.
(a) The definitions in Exhibit A shall apply equally to both the
singular and plural forms of the terms defined. Whenever the context may
require, any pronoun shall include the corresponding masculine, feminine and
neuter forms. The word "or" is not exclusive and means "and/or." The words
"include", "includes" and "including" shall be deemed to be followed by the
phrase "without limitation". The words "herein", "hereof" and "hereunder" and
words of similar import refer to this Agreement in its entirety and not to
any part hereof unless the context shall otherwise require. All references
herein to Sections, subsections, Exhibits and Schedules shall be deemed
references to and Sections or subsections of, and Exhibits and Schedules to,
this Agreement unless the context shall otherwise require. Unless otherwise
expressly provided herein or unless the context shall otherwise require, any
references as of any time to any agreement (including this Agreement) or
other agreement, instrument or document or to any statute or regulation or
any specific section or other provision thereof are to it as amended and
supplemented through such time (and, in the case of a statute or regulation
or specific section or other provision thereof, to any successor of such
statute, regulation, section or other provision). Any reference in this
Agreement to a "day" or number of "days" (without the explicit qualification
of "Business") shall be interpreted as a reference to a calendar day or
number of calendar days. If any action or notice is to be taken or given on
or by a particular calendar day, and such calendar day is not a Business Day,
then such action or notice shall be deferred until, or may be taken or given
on, the next Business Day. Unless otherwise expressly provided herein or
unless the context shall otherwise require, any provision of this Agreement
using a term (by way of example and without limitation, such as "members of
the Xxxxxxx Group," "members of the Xxxxxx Group," "Affiliate" or Controlled
Affiliate") thedefinition of which is based on a specified characteristic,
qualification, feature or status shall, as of any time, refer only to such
Persons who or other things which have the specified characteristic,
qualification, feature or status as of that particular time. When used with
reference to any Right, the term "exercise" shall mean to exercise the right
to subscribe for, purchase or otherwise acquire shares of capital stock
represented by such Right, and variants of such word (including "exercised"
and "exercisable") shall have correlative meanings.
(b) In the event of any stock split, stock dividend, recapitalization
or other change in any Company's capital structure affecting the outstanding
shares of any class or series of its capital stock, there shall be an
appropriate adjustment in the kind, number or percentage of shares of such
class or series specified in any provision of this Agreement under which (i)
an action requires the approval or consent of the holders of a specified or
determinable number or percentage of shares of such class or series or (ii)
the effectiveness, enforceability or parameters of a right granted to any
15
Person, or an agreement, covenant or obligation of any Person, is stated to
depend upon ownership of a specified or determinable number or percentage of
shares of such class or series.
(c) In the event that any shares of capital stock or other securities
of any issuer of any class or series are or could be deemed to be
Beneficially Owned by more than one member of the Xxxxxxx Group or more than
one member of the Xxxxxx Group, then for purposes of any provision of this
Agreement under which (i) an action requires the approval or consent of the
members of either Group that Beneficially Own a specified or determinable
number or percentage of such shares of capital stock or other securities or
(ii) the effectiveness, enforceability or parameters of any right or
obligation of either Group or any or all members thereof is stated to depend
upon or be based upon Beneficial Ownership of a specified or determinable
number, amount or percentage of shares or other securities of such class or
series, no such share or other security shall be deemed to be Beneficially
Owned by more than one member of such Group or shall otherwise be counted or
taken into account more than once.
(d) The headings of the articles and sections contained in this
Agreement are solely for the purpose of reference, are not part of the
agreement of the parties and shall not affect the meaning or interpretation
of this Agreement.
(e) Each party and its own legal counsel have participated in the
drafting of this Agreement, and this Agreement will be construed simply and
according to its fair meaning and not strictly for or against any party.
Section 6.2. DETERMINATIONS AND GROUP ACTIONS GENERALLY.
(a) Unless otherwise expressly provided herein, all decisions and
determinations (including any decision as to whether to give any consent or
approval) required or permitted to be made hereunder by any one or more
Persons (including any party or parties to this Agreement) shall be made by
such Person or Persons in its or their sole discretion. Any notice, consent,
approval or other decision by or on behalf of either Group or required or
permitted by this Agreement shall be effective if expressed in a writing
which is either (i) executed by a member or members of such Group that
Beneficially Own issued and outstanding TCI High Vote Shares equal to at
least a majority of the aggregate number of all issued and outstanding TCI
High Vote Shares Beneficially Owned by all members of such Group
collectively, or (ii) in the case of the Xxxxxxx Group, executed by the
Xxxxxxx Group Representative or (iii) in the case of the Xxxxxx Group,
executed by JCM, and in any such case the parties to this Agreement may
assume that such member or members, the Xxxxxxx Group Representative or JCM,
as the case may be, has the power and authority to do so and may rely
conclusively on such writing as expressing the action of the Xxxxxxx Group or
the Xxxxxx Group, as the case may be. JCM shall not be liable, in damages or
otherwise, to any party to this Agreement, any Company, any of the
Affiliates, stockholders, directors, officers, employees or agents of any
such Person or to any other Person for or by reason of any action or
16
omission in his capacity as the representative of the Xxxxxx Group. No
Xxxxxxx Group Representative shall be liable, in damages or otherwise, to any
party to this Agreement, any Company, any of the Affiliates, stockholders,
directors, officers, employees or agents of any such Person or to any other
Person for or by reason of any action or omission in his capacity as the
Xxxxxxx Group Representative unless such act or failure to act was not within
the scope of the authority or discretion conferred on the Xxxxxxx Group
Representative by this Agreement.
(b) The Xxxxxxx Group may designate any of its members as the Xxxxxxx
Group Representative by written notice of such designation (and containing
such representatives address for notices and other communications) delivered
to TCI and JCM. In the event of the death, incapacity or removal of the
Person serving as the Xxxxxxx Group Representative, the Xxxxxxx Group shall
promptly designate a successor. Pending such designation, each party to this
Agreement shall be entitled to treat as the Xxxxxxx Group Representative the
member of the Xxxxxxx Group who holds of record the greatest number of TCI
High Vote Shares.
(c) Unless otherwise expressly provided in this Agreement, this
Agreement is not intended to create any "group" obligations or liabilities;
the obligations and liabilities of the members of each Group shall be several
and not joint; and no member of either Group or nor any other party hereto or
Person referred to herein shall have any obligation or liability for the
obligations or liabilities of any other member of such Group, any other party
or any other Person. Without limiting the generality of the foregoing,
unless otherwise expressly provided in this Agreement, if any member of
either Group becomes obligated to purchase, sell or vote any shares of
capital stock or other securities pursuant to this Agreement, such obligation
shall be solely the individual obligation of such member. Each party shall
be separately and independently entitled to rely on the representations and
warranties of each other party made to in this Agreement and to the benefit
of all agreements, covenants, obligations and commitments of each other party
made with or to such party or the Group of which such party is a member.
(d) No member of either Group who acquires any shares of capital stock
or other securities from any member of the other Group shall be or become a
member of such other Group unless otherwise agreed in writing by such
acquiring member, JCM and the Xxxxxxx Representative.
17
Section 6.3. RIGHTS OF OWNERSHIP; OBLIGATIONS SUBJECT TO APPLICABLE
LAWS. Nothing contained in this Agreement shall create any obligation or
restriction on the part of any member of either Group in the exercise and
enjoyment of full rights of ownership of any shares of capital stock or other
securities Beneficially Owned by such Person, except as expressly provided in
this Agreement. The obligations of JCM and any other member of the Xxxxxx
Group pursuant to Article II, III or IV shall in all cases be subject to and
qualified by (i) the mandatory requirements of applicable laws, rules and
regulations from time to time in effect, including the receipt of all
consents and approvals of Governmental Authorities required and the
expiration of all waiting periods applicable under any such law, rule or
regulation without the commencement or threat of commencement of any action
or proceeding seeking to enjoin or impose damages or penalties by reason of
the consummation of any transaction contemplated by any such Article or to
impose any restrictions, limitations, requirements or conditions which are or
might be burdensome or adverse to any member of the Xxxxxx Group or any
Company, and (ii) the absence of any material breach or violation of this
Agreement or either Call Agreement by any member of the Xxxxxxx Group.
Section 6.4. LEGENDS; STOP TRANSFERS.
(a) Each certificate or other instrument representing any shares of
capital stock, Rights or other securities that are Beneficially Owned by any
member of either Group that are subject to any of the provisions of this
Agreement or either Call Agreement shall bear a legend substantially in the
following form, in addition to any other legend required under applicable law
or by contract:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS
AND CONDITIONS OF A CERTAIN STOCKHOLDERS' AGREEMENT AND/OR CALL
AGREEMENT, EACH DATED AS OF FEBRUARY __, 1998 BY AND AMONG
TELE-COMMUNICATIONS, INC., A DELAWARE CORPORATION, AND CERTAIN OF ITS
STOCKHOLDERS. A COPY OF EACH SUCH AGREEMENT IS ON FILE AT THE PRINCIPAL
OFFICE OF THE ISSUER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE.
THE SALE, PLEDGE, TRANSFER OR OTHER DISPOSITION OF THE SECURITIES
REPRESENTED BY THIS CERTIFICATE OR ANY INTEREST THEREIN IS RESTRICTED BY
SUCH AGREEMENT(S) AND ANY SUCH SALE, PLEDGE, TRANSFER OR OTHER
DISPOSITION MAY BE MADE ONLY UPON COMPLIANCE THEREWITH. SUCH
AGREEMENT(S) ALSO CONTAIN(S) PROVISIONS RELATING TO THE EXERCISE OF
CERTAIN VOTING AND CONSENT RIGHTS, IF ANY, OF THE HOLDER OF THE
SECURITIES REPRESENTED BY THIS CERTIFICATE AND MAY GRANT THE ISSUER OR
OTHERS THE RIGHT TO PURCHASE SUCH SHARES UNDER CERTAIN CIRCUMSTANCES."
(b) Unless the Person(s) to whom such Disposition is made (the
"transferor(s)") is already a party to and bound by this Agreement or an
applicable Call Agreement or is required by the terms
18
hereof or thereof to become such a party or this Agreement, or an applicable
Call Agreement requires that the shares, Rights or other securities Disposed
of continue to be subject to this Agreement or an applicable Call Agreement,
if any shares of capital stock, Rights or other securities represented by a
certificate or other instrument that bears the legend set forth in subsection
6.4(a) are Disposed of in a transaction that is permitted by the provisions
of this Agreement and the provisions of an applicable Call Agreement, the
transferor(s) shall be entitled to receive from the issuer a new certificate
or instrument, of like tenor but without the legend set forth in subsection
6.4(a), representing the shares, Rights or other securities so Disposed of
that are not required to continue to be subject to either this Agreement or
such applicable Call Agreement. In the case of any such Disposition of only
part of the shares, Rights or other securities evidenced by a certificate
bearing such legend, the certificate representing the shares, Rights or other
securities that are not Disposed of shall continue to bear such legend.
(c) Each Company agrees that it shall not, and shall direct each
registrar and transfer agent of the Company not to, register any Disposition
of any securities of such Company by any member of either Group that is not
made in compliance with the applicable provisions of this Agreement.
Section 6.5. BINDING EFFECT; ASSIGNABILITY. This Agreement and all of
the provisions hereof (including the exhibits and schedules hereto) shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors, assigns, heirs, executors, administrators and personal
representatives, and except as otherwise expressly provided herein, nothing
in this Agreement, express or implied, is intended or shall be construed to
confer upon or give any Person other than the parties any right, benefit,
remedy or claim under or by reason of this Agreement or any term, covenant or
condition hereof. Except as otherwise specifically permitted or required
pursuant to this Agreement, neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any party without the
prior written consent of TCI, JCM and the Xxxxxxx Group Representative. The
disability, incapacity, bankruptcy, insolvency, dissolution, liquidation or
death of any member of the Xxxxxx Group or any member of the Xxxxxxx Group
shall not result in the termination or otherwise affect the rights or
obligations of any such Person under this Agreement, it being agreed that
such member's heirs, successors, assigns and legal representatives shall, in
their capacities as such, succeed to all of such member's rights and
obligations hereunder. Without limiting the generality of the foregoing, in
the event of the disability, incapacity, or death of JCM, his executors or
other legal representatives, in their capacities as such, and his heirs or
distributees shall succeed to all of JCM's rights and obligations hereunder;
provided, however, that, unless JCM's executors, administrators or heirs
otherwise agree with the Xxxxxxx Group Representative, in the event of JCM's
death, (x) all High Vote Shares of any Company of any class or series subject
to the voting rights of JCM under Section 2.2 shall be voted (or any other
action required or requested of the holders of shares of that class or series
shall be taken) in the manner directed or recommended bythe Board of
Directors of that Company and (y) unless TCI shall elect, on or before the
latest date permitted by the Xxxxxxx Call Agreement, to exercise its Call
Right under Section 2.2 of the Xxxxxxx Call Agreement, or if having made that
election the closing under such Call
19
Agreement shall not occur when required (otherwise as a result of a default
by any member of the Xxxxxxx Group), all further rights and obligations of
the parties under Sections 2.1 and 2.2 (as modified by clause (x) of this
provision) shall terminate as of that latest date or the required closing
date, as the case may be.
Section 6.6. AMENDMENTS AND WAIVERS. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers of or consents to departures from the provisions
hereof may not be given unless approved in writing by TCI, JCM and the
Xxxxxxx Group Representative. For the sake of certainty, the parties
specifically agree that (i) any supplemental agreement or instrument by which
any Person who is not already a party to this Agreement agrees, as required
or permitted by this Agreement, to become a party to and be bound by this
Agreement and (ii) any amendment or supplement to this Agreement to reflect
transfers or other transactions in accordance with this Agreement, and which
does not, in either case, purport to amend, modify, waive or supplement in
any material respect any of the substantive provisions hereof, shall be
effective if executed by such Person, TCI, JCM and the Xxxxxxx Group
Representative.
Section 6.7 GOVERNING LAW. This Agreement and the validity,
interpretation and performance of the terms and provisions hereof shall be
governed by, and construed in accordance with, the laws of the State of
Delaware, without regard to the provisions thereof relating to choice or
conflict of laws.
Section 6.8 NOTICES. All notices, requests, consents, demands,
elections and other communications required or permitted hereunder shall be
in writing and shall be given to the intended recipient at: (i) in the case
of JCM or any member of the Xxxxxx Group, to JCM at such address as he may
from time to time specify by written notice to TCI, each other Company that
shall be a party to this Agreement, and the Xxxxxxx Group Representative,
(ii) in the case of the Xxxxxxx Group Representative or any member of the
Xxxxxxx Group, to the Xxxxxxx Group Representative at such address as he may
from time to time specify by written notice to TCI, each other Company that
shall be a party to this Agreement, and JCM, and (iii) in the case of TCI or
any other Company, to it at its principal executive offices or at such
changed address as it may from time to time specify in writing to JCM, the
Xxxxxxx Group Representative and each other Company that shall be a party to
this Agreement. Any such notice, request, consent, demand, election or other
communication shall be deemed to have been duly given if personally delivered
or sent by registered or certified mail, return receipt requested, Express
Mail, Federal Express or similar overnight delivery service for next Business
Day delivery or by telegram, telex or facsimile transmission and will be
deemed given, unless earlier received: (1) if sent by certified or registered
mail, return receipt requested, five calendar days after being deposited in
the United States mail, postage prepaid; (2) if sent by Express Mail, Federal
Express or similar overnight delivery service for next Business Day delivery,
the next Business Day after being entrusted to such service, with delivery
charges prepaid or charged to
20
the sender's account; (3) if sent by telegram or telex or facsimile
transmission, on the date sent; and (4) if delivered by hand, on the date of
delivery.
Section 6.9 NO IMPLIED WAIVERS. No action taken pursuant to this
Agreement, including any investigation by or on behalf of any party, shall be
deemed to constitute a waiver by the party taking such action of compliance
with any representations, warranties, covenants or agreements contained
herein or made pursuant hereto. The waiver by any party hereto of a breach
of any provision of this Agreement shall not operate or be construed as a
waiver of any preceding or succeeding breach and no failure by any party to
exercise any right or privilege hereunder shall be deemed a waiver of such
party's rights or privileges hereunder or shall be deemed a waiver of such
party's rights to exercise the same at any subsequent time or times
hereunder.
Section 6.10 ENTIRE AGREEMENT. This Agreement (together with the
Exhibits and Schedules hereto, if any) constitutes the entire agreement of
the parties with respect to the specific subject matter hereof, and merges
and supersedes all prior agreements and undertakings, both written and oral,
among the parties with respect to such specific subject matter. For the sake
of certainty, the parties specifically acknowledge that (i) this Agreement is
not intended to merge, supersede or alter the provisions of (A) either Call
Agreement, (B) any provision of the Settlement Agreement other than numbered
paragraph 8 thereof, or (C) any separate agreement, release or instrument
granted, entered into or delivered pursuant to the Settlement Agreement; and
(ii) unless this Agreement is terminated under subsection (b), (c), (d) or
(e) of Section 6.20, this Agreement and the Call Agreements will, as among
the parties and effective as of the Effective Date, merge and supersede the
letter agreement, dated June 17, 1988, among Xxx Xxxxxxx, Xxxxxx and
Xxxxxx-Tribune Corp. relating to the shares of TCI Common Stock owned by
them. The respective representations and warranties of the parties shall
survive the execution and delivery of this Agreement.
Section 6.11 INSPECTION. Copies of this Agreement will be available
for inspection or copying by any stockholder of TCI or any other Company
that shall be a party to this Agreement through the secretary of TCI or such
other Company.
Section 6.12 COUNTERPARTS. This Agreement may be executed in one or
more counterparts, each of which shall be deemed to be an original and all
of which together shall be deemed to constitute one and the same agreement.
Section 6.13. FURTHER ASSURANCES. Each party shall cooperate and take
such actions as may be reasonably requested by another party in order to
carry out the provisions and purposes of this Agreement and the transactions
contemplated hereby.
Section 6.14. SPECIFIC PERFORMANCE; INJUNCTIVE RELIEF; REMEDIES ARE
CUMULATIVE. Without intending to limit the rights or remedies available to
any of the parties pursuant to this Agreement, a Call Agreement, at law or in
equity (all of which shall be cumulative), each of the parties
21
acknowledges that a violation by such party of any provision of this
Agreement will cause the other parties irreparable injury for which an
adequate remedy at law is not available and, therefore, the parties agree
that the provisions of this Agreement shall be specifically enforceable, that
each party shall be entitled to an injunction, restraining order, decree of
specific performance or other form of equitable relief from any court of
competent jurisdiction restraining any other party from committing any breach
or threatened breach of, or otherwise specifically to enforce, any provision
of this Agreement, and each party hereby waives and agrees not to assert in
any action or proceeding in which any such form of relief is sought any
defense that a remedy at law would be adequate. The rights and remedies
herein expressly provided are cumulative and not exclusive of any other
rights or remedies which any party would otherwise have pursuant hereto, at
law, in equity, by statute or otherwise.
Section 6.15 SEVERABILITY. If any provision of this Agreement or the
application thereof to any person or circumstance is held by a court of
competent jurisdiction to be invalid, void or unenforceable, the remaining
provisions hereof, or the application of such provision to persons or
circumstances other than those as to which it has been held invalid or
unenforceable, shall remain in full force and effect and shall in no way be
affected, impaired or invalidated thereby, provided, that if any provision
hereof or the application thereof shall be so held to be invalid, void or
unenforceable by a court of competent jurisdiction, then such court may
substitute therefor a suitable and equitable provision in order to carry out,
so far as may be valid and enforceable, the intent and purpose of the
invalid, void or unenforceable provision and, if such court shall fail to
decline to do so, the parties shall negotiate in good faith in an effort to
agree upon such a suitable and equitable provision. To the extent that any
provision shall be judicially unenforceable in any one or more states, such
provision shall not be affected with respect to any other state, each
provision with respect to each state being construed as several and
independent.
Section 6.16 CONSENT TO JURISDICTION; SERVICE OF PROCESS; WAIVER OF
JURY TRIAL
(a) TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, EACH PARTY HERETO
HEREBY IRREVOCABLY AND UNCONDITIONALLY (I) SUBMITS, FOR ITSELF AND ITS
PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF ANY STATE OR FEDERAL COURT
SITTING IN WILMINGTON, DELAWARE (INCLUDING OF ANY APPELLATE COURT TO WHICH AN
APPEAL OF ANY JUDGMENT, ORDER, DECREE OR DECISION OF ANY SUCH COURT MAY BE
TAKEN) IN ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR EITHER CALL AGREEMENT OR FOR RECOGNITION OR ENFORCEMENT OF ANY
JUDGMENT RENDERED IN ANY SUCH SUIT, ACTION OR PROCEEDING, (II) WAIVES ANY
OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY
SUCH SUIT, ACTION OR PROCEEDING IN ANY SUCH COURT, INCLUDING ANY CLAIM THAT
ANY SUCH SUIT, ACTION OR PROCEEDING HAS BEEN BROUGHT IN AN INCONVENIENT
FORUM, (III) WAIVES ALL RIGHTS TO A TRIAL BY JURY IN ANY SUCH
22
SUIT, ACTION OR PROCEEDING, AND (IV) WAIVES PERSONAL SERVICE OF ANY SUMMONS,
COMPLAINT OR OTHER PROCESS BY ANY MEANS, MANNER OR METHOD OTHER THAN IN THE
MANNER PROVIDED FOR THE GIVING OF NOTICES TO SUCH PARTY IN SECTION 6.8, AND
AGREES THAT ANY PROCESS SERVED UPON SUCH PARTY IN SUCH MANNER PROVIDED FOR IN
SECTION 6.8 SHALL HAVE THE SAME VALIDITY AND LEGAL FORCE AND EFFECT AS IF
SERVED UPON SUCH PARTY PERSONALLY WITHIN WILMINGTON, DELAWARE.
(b) Nothing in this Section shall affect the right of any party to
serve legal process in any other manner permitted by law or affect the right
of any party to bring any action or proceeding against any other party or its
property in the courts of any other jurisdiction. The consents to
jurisdiction set forth in this Section shall not constitute general consents
to service of process in the State of Delaware, shall have no effect for any
purpose except as provided in this Section and shall not be deemed to confer
rights on any Person other than the parties to this Agreement.
Section 6.17. FACSIMILE SIGNATURES. This Agreement and any proxy or
other instrument executed and delivered by any party pursuant to this
Agreement may be executed by facsimile signatures.
Section 6.18 ATTORNEYS' FEES. In any action or proceeding brought to
enforce any provision of this Agreement, and in any action or proceeding
otherwise arising under or with respect to this Agreement, the prevailing
party shall be entitled to recover reasonable attorneys' fees in addition to
any other available remedy.
Section 6.19. EXPENSES. Except as otherwise expressly provided in this
Agreement, each party will pay its own costs and expenses in connection with
the negotiation, preparation, execution, delivery and performance of this
Agreement, any amendment or supplement to or modification of this Agreement
and any and all other agreements, instruments, certificates and other
documents furnished pursuant hereto or in connection herewith.
Section 6.20 TERMINATION; LAPSE OF CERTAIN PROVISIONS.
(a) This Agreement shall terminate automatically without the necessity
of action by any party upon the first to occur of (i) the written agreement
by JCM and the Xxxxxxx Group Representative to terminate this Agreement; and
(ii) the delivery to TCI, each other Company that shall be a party to this
Agreement and the Xxxxxxx Group Representative of a notice of termination
executed by JCM at any time after the date on which the Xxxxxx Group or the
Xxxxxxx Group ceases, otherwise than as a result of a breach or violation of
this Agreement or any Call Agreement, to collectively Beneficially Own issued
and outstanding TCI High Vote Shares entitling the holders thereof to 5% or
more of the total number of Director Votes represented by all TCI High Vote
Shares then outstanding.
23
(b) If any action required to be taken or completed prior to the
Closing Date (as defined in the Settlement Agreement) by any provision of the
Settlement Agreement, including those required or contemplated by paragraph 4
of the Settlement Agreement, is not duly taken or completed as provided
therein, then without limiting any rights or remedies otherwise available to
him, JCM may elect at any time thereafter to terminate this Agreement
effective as of the date of delivery by him of a written notice of
termination to TCI and the Xxxxxxx Group Representative.
(c) If a member of either Group no longer owns any High Vote Shares of
any Company, otherwise than as a result of a breach or violation of this
Agreement or any applicable Call Agreement, such party will cease to be a
party to this Agreement, but this Agreement shall continue in full force and
effect and continue to be binding on all other parties. In addition, unless
JCM and the Xxxxxxx Group Representative otherwise agree in writing, if any
such party subsequently acquires Beneficial Ownership of any High Vote Shares
of any Company, such party shall be required to simultaneously once again
become a party to this Agreement and a member of his original Group.
(d) If any of the actions contemplated by numbered paragraph 4 of the
Settlement Agreement are not taken when and substantially as set forth in
such paragraph (otherwise than by reason of a material default by JCM of his
obligations thereunder) or if the payment contemplated by Section 2.1 of the
Xxxxxx Call Agreement is not made on or prior to the Effective Date otherwise
than by reason of a material default by JCM in the performance of his
obligations hereunder, under the Xxxxxx Call Agreement or under the
Settlement Agreement, then in addition to any other rights and remedies he
may have by contract, at law, in equity or otherwise, JCM may at any time
after the Effective Date elect, by written notice to TCI and the Xxxxxxx
Group Representative, to terminate this Agreement and/or the Xxxxxx Call
Agreement unless such action is taken or such payment is made prior to the
expiration of such ten-day period.
(e) If any of the actions contemplated by numbered paragraph 4 of the
Settlement Agreement are not taken when and substantially as set forth in
such paragraph (otherwise than by reason of a material default by any member
of the Xxxxxxx Group of his obligations thereunder) or if the payment
contemplated by Section 2.1 of the Xxxxxxx Call Agreement is not made on or
prior to the Effective Date otherwise than by reason of a material default by
any member of the Xxxxxxx Group in the performance of his obligations
hereunder, under the Xxxxxxx Call Agreement or under the Settlement
Agreement, then in addition to any other rights and remedies they may have by
contract, at law, in equity or otherwise, the Xxxxxxx Group Representative,
on behalf of the Xxxxxxx Group,
24
may at any time after the Effective Date elect, by not less than 10 days'
prior written notice to TCI and JCM, to terminate this Agreement and/or the
Xxxxxxx Call Agreement unless such action is taken or such payment is made
prior to the expiration of such ten-day period.
Section 6.21 ALLOCATION OF CONSIDERATION. If, in connection with any
transaction covered by Section 4.1 or Section 4.2, any member of the Xxxxxx
Group proposes to transfer to any Prospective Purchaser or Drag-Along
Purchaser (as the case may be) any assets, securities or other property or
consideration in addition to the High Vote Shares referred to in such
Section, then the total consideration payable to such member of the Xxxxxx
Group for such assets, securities, other property or consideration and High
Vote Shares shall be allocated among such items in such manner as JCM, such
Prospective Purchaser or Drag-Along Purchaser (as the case may be) and the
Xxxxxxx Group Representative shall agree in writing or if such Persons,
despite their good faith efforts, fail to agree, then in proportion to the
respective fair market values of such items.
IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the date first written above.
/s/Xxx Xxxxxxx
-----------------------------------------
Xxx Xxxxxxx, individually and as Trustee
of the Xxxxxxx Family Irrevocable Trusts
and the Xxxxxxx Issue GST Trusts
/s/ Xxxx Xxxxxxx
------------------------------------------
Xxxx Xxxxxxx, individually and as Trustee
of the Xxxxxxx Family Irrevocable Trusts
and the Xxxxxxx Issue GST Trusts
ESTATE OF XXXXX XXXXXXX
By:
/s/ Xxx Xxxxxxx
------------------------------
Xxx Xxxxxxx, Personal
Representative
25
ESTATE OF XXX XXXXXXX
By:
/s/ Xxx Xxxxxxx
-------------------------------
Xxx Xxxxxxx, Personal
Representative
By:
/s/ Xxxx Xxxxxxx
-------------------------------
Xxxx Xxxxxxx, Personal
Representative
TELE-COMMUNICATIONS, INC.
By:
/s/ Tele-Communications, Inc.
-----------------------------
Its:
-----------------------------
/s/ Xx. Xxxx X. Xxxxxx
----------------------------------
XX. XXXX X. XXXXXX
/s/ Xxxxxx Xxxxxx
---------------------------------
XXXXXX XXXXXX
EXHIBIT A
DEFINED TERMS
The following terms shall have the following respective meanings:
"Acquisition Right" has the meaning assigned to such term in
Section 3.1(a).
"Affiliate" means, with respect to any Person, any other Person that,
directly or indirectly through or with one or more intermediaries, controls,
is controlled by or is under common control with, such Person. The term
"affiliated" (whether or not capitalized) shall have a correlative meaning.
For purposes of this Agreement, unless JCM and the Xxxxxxx Group
Representative otherwise agree in writing, no member of either Group shall be
deemed to be an Affiliate of any member of the other Group.
"Agreement" means this Agreement, including all Exhibits and Schedules
hereto, if any, as the same may be amended from time to time in accordance
with its terms.
"Approved Sale" has the meaning assigned to such term in Section
4.2(a). "Approved Stock Sale" has the meaning assigned to such term in
Section 4.2(b).
"Beneficial Owner" means, with reference to any security, a direct or
indirect beneficial owner of such security within the meaning of Rule 13d-3
under the Exchange Act, as in effect on and as interpreted by the Commission
through the date of this Agreement, and the terms (whether or not
capitalized) "beneficially own," "beneficially owned" and "owned
beneficially" shall have correlative meanings; provided, however, that any
Person who at any time beneficially owns any Right to acquire such security
shall not be deemed to beneficially own the underlying securities unless or
until such Right is exercised. Notwithstanding the foregoing, unless
otherwise expressly provided in this Agreement:
(i) no Person who is a member of either Group or any "group"
referred to in Rule 13d-5 under the Exchange Act shall be deemed to be
the Beneficial Owner of any securities of which such Person would not be
a Beneficial Owner absent such group membership;
(ii) a Person shall not be deemed a Beneficial Owner of any
securities if such beneficial ownership (A) arises solely as a result of
a revocable proxy delivered in response to a proxy or consent
solicitation made pursuant to, and in accordance with, the Exchange Act
and the applicable rules and regulations thereunder and is not also then
reportable on Schedule 13D under the Exchange Act or (B) arises solely
as a
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result of the possession of any right, power or proxy with respect to
such securities arising under this Agreement;
(iii) TCI shall not be deemed to be a Beneficial Owner or to share
Beneficial Ownership of any shares or other securities that are subject
to either Call Agreement; and
(iv) JCM shall not be deemed to beneficially own any securities
beneficially owned by LM and vice versa;
The terms "beneficially own" and "beneficially owning" or similar variants,
whether or not capitalized, shall have meanings that are correlative to
this definition of the term "Beneficial Owner."
"Xxxxx Estate" has the meaning given to it in the introductory
paragraph of this Agreement.
"Xxx Estate" has the meaning given to it in the introductory paragraph
of this Agreement.
"BT Proxy" has the meaning given to it in Section 5.2.
"Business Day" means any day other than a Saturday, a Sunday or a day
on which banking institutions in either New York, New York or Denver,
Colorado are authorized or obligated by law or executive order to close.
"Buyers" has the meaning given to it in Section 4.1(a).
"Call Agreement" means either the Xxxxxx Call Agreement or the Xxxxxxx
Call Agreement, as the context requires.
"Charitable Transferee" means, with respect to either Group, any
private charitable foundation or donor advised fund established by one or
more members of such Group that, in either case, (i) is controlled directly
or indirectly solely by one or more members of such Group, and (ii) meets the
requirements under the Code for such member(s) or Related Parties to deduct
donations to such foundation or donor advised fund.
"Code" means the Internal Revenue Code of 1986, as amended, and the
rules and regulations from time to time promulgated thereunder.
"Company" means (i) TCI or (ii) any Spin-Off Company as long as and
only so long as it (A) has Common Stock registered under Section 12(b) or
12(g) of the Exchange Act and (B) a
2-A
majority of TCI's directors then in office are also members of the Board of
Directors of such Spin-Off Company and such TCI directors constitute a
majority of the Board of Directors of such Spin-Off Company.
"Control" as used with respect to any Person, means the possession,
directly or indirectly through or with one or more intermediaries, of the
power to direct or cause the direction of the management and policies of such
Person, whether through the ownership of voting securities, by contract or
otherwise. The terms "controlled by" and "under common control with" shall
have correlative meanings.
"Controlled Affiliate," when used with respect to a specified Person,
means each Affiliate of such Person that is Controlled by such Person and
which is not Controlled by or under common Control with any other Person
(except one or more other Controlled Affiliates of such specified Person);
provided, however, that no Affiliate of such Person which otherwise would be
a Controlled Affiliate of such specified Person shall, for purposes of this
Agreement, be deemed to be a Controlled Affiliate of such Person unless such
specified Person possesses, directly or indirectly, the power to direct
decisions regarding the disposition and voting of the High Vote Shares held
by such Affiliate without breach or violation of any applicable contractual
or fiduciary or other legal duty or requirement by such specified Person, any
of its Affiliates or any individual designated by such Person or any of its
Affiliates as a member of the board of directors or other governing or
managing body of such Affiliate.
"Covered Issuer" means (i) TCI, or (ii) any Controlled Affiliate of
TCI formed or organized after the date of this Agreement that issues or
proposes to issue any securities covered by an Acquisition Right (other than
an Exempt Acquisition Right) or (iii) any other issuer of Equity Securities
as to which JCM acquires an Acquisition Right (other than an Exempt
Acquisition Right) and in which TCI has a substantial economic or equity
interest.
"Designated Director" has the meaning assigned to such term in Section
2.1(a).
"Director Votes" when used with reference to any share of capital
stock of any class or series of any issuer means the number of votes, if any,
with respect to the election of directors of such issuer that a record holder
of a single share of such class or series ordinarily is entitled to cast with
respect to the election of such issuer's directors generally, whether at all
times or only so long as no other class or series of capital stock of the
Corporation has such voting power by reason of any contingency.
"Disposition" has the meaning assigned to such term in Section 5.4;
however, the term "Disposition" does not include the granting of any
revocable proxy that satisfies clause (ii) (A) of the proviso of the
definition of "Beneficial Owner" above.
3-A
"Drag-Along Purchaser" has the meaning assigned to such term in
Section 4.2(a).
"Effective Date" means the Closing Date, as defined in the Settlement
Agreement, or such earlier or later date agreed to by the parties thereto for
consummation of the transactions contemplated by paragraph 4 thereof.
"Eligible Shares" has the meaning assigned to such term in Section 4.1(a).
"Entity" means any corporation, limited liability company, general or
limited partnership, joint venture, association, joint stock company, trust,
other unincorporated business or organization or other Person which is not
either a natural person or a governmental authority or agency.
"Equity Security" means any High Vote Share or Low Vote Share of any
Covered Issuer and includes any Right to acquire any such High Vote Share or
Low Vote Share.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exempt Acquisition Right" means any Acquisition Right that:
(i) constitutes or is for Equity Securities that constitute all
or any part of the consideration receivable by JCM in any Exempt
Transfer;
(ii) is for any Equity Securities that are issued or offered by
any issuer to all holders of shares of such issuer's capital stock of
any class or series on a proportionate basis, including as a stock
dividend or other distribution upon, any subdivision, combination or
recapitalization of or other change in capital structure affecting the
outstanding shares of such class or series;
(iii) is for Equity Securities that are sold by any issuer pursuant
to a bona fide public offering pursuant to a registration statement
filed under the Securities Act of 1933, as amended;
(iv) constitutes or is for Equity Securities as to which the
Xxxxxxx Group had the opportunity to participate or exercise preemptive
rights;
(v) is for any Equity Securities issued upon exercise of any
Rights to acquire such Equity Securities that were sold, issued or
otherwise granted to JCM prior to the date of this Agreement or granted
to JCM thereafter as part of a transaction as to which JCM had an Exempt
Acquisition Right or as part of an Acquisition Right as to which the
Xxxxxxx Group had the opportunity to participate in accordance with
Article III;
4-A
(vi) was or relates to any Equity Securities granted to or
acquired by JCM prior to the date of this Agreement;
(vii) arises from either Call Agreement;
(viii) is granted or offered by any member of the Xxxxxxx Group
with respect to any Equity Securities Beneficially Owned by such member;
or
(xi) is offered or granted as, or is for Equity Securities that
are offered or granted as, compensation (including deferred
compensation) for any past, present or future services by the recipient
as an officer, director, consultant or in any similar capacity to the
issuer or any of its subsidiaries or Affiliates or otherwise offered or
granted to the recipient by virtue of the recipient's status as an
officer, director or consultant to, or a person performing similar
functions for, the issuer or any of its subsidiaries or Affiliates.
"Exempt Transfer" means, with respect to any High Vote Share of any
Company or any Rights to acquire any High Vote Share of any Company Beneficially
Owned by any member of the Xxxxxx Group:
(i) an exchange of such security for another security, cash or
other property that occurs by operation of law in connection with a
merger or consolidation of the issuer with or into another corporation,
which merger or consolidation has been duly authorized and approved by
the required vote of the Board of Directors and each class of the
stockholders of such issuer pursuant to its charter documents and the
laws of the state of its incorporation;
(ii) an exchange of such security for, or a conversion of such
security into, a security of any other class, series or issue which
occurs by operation of law as the result of a recapitalization or
similar event which has been duly authorized and approved by the
required vote of the Board of Directors and each class of the
stockholders of the issuer pursuant to its charter documents and the
laws of its state of incorporation;
(iii) any surrender of such security upon redemption or repurchase
of such security by the issuer or any of its Controlled Affiliates;
(iv) any Permitted Pledge of such security and any transfer of
such pledged security to the pledgee upon foreclosure;
(v) a Disposition to another member of the Xxxxxx Group or the
Xxxxxxx Group or any Controlled Affiliate of a member of either Group;
5-A
(vi) a gift or assignment for no consideration by such Person
during his life to any one or more of his Related Parties;
(vii) any transfer to the legal representatives of an individual
upon his death or adjudication of incompetency or by any such legal
representatives to any Person to whom the transferor could have
transferred such security pursuant to any clause of this definition;
(viii) a transfer of High Vote Shares of any Company by one or more
members of the Xxxxxx Group to any Charitable Transferee and any
subsequent transfer by any such Charitable Transferee of any such
shares;
(ix) any sale or other Disposition of such security to any Person
who shall by a written instrument become a party to this Agreement and
bound by the provisions hereof applicable to the members of the Xxxxxx
Group;
(x) any involuntary sale or other Disposition of such security,
including any sale or other Disposition upon the death or bankruptcy of
the holder or ordered by any Governmental Authority;
(xi) any sale or other Disposition of such security pursuant to
an offer made by a Prospective Purchaser on the same terms, on a per
share or per security basis, to all members of each Group who hold
securities of the same class or series; or
(xii) any sale or other Disposition of any High Vote Shares of any
Company that is pursuant to or contemplated by Article III or IV or
Section 5.4 of this Agreement or is pursuant to Section 2.3(f) of, or
any other "Exempt Transfer" as defined in, the Xxxxxx Call Agreement;
provided, however, that no Disposition pursuant to clause (vi) or (vii) shall
be an Exempt Transfer, unless each Person to whom any such Disposition is
made, unless already a party to this Agreement and bound by the provisions
hereof applicable to members of the Xxxxxx Group or a Controlled Affiliate of
such a party, shall by a written instrument become a party to this Agreement
and bound by the provisions hereof applicable to the members of the Xxxxxx
Group.
"Xxxx" has the meaning assigned to such term in the introductory
paragraph of this Agreement.
"Governmental Authority" means any nation or government, any state or
other political subdivision thereof and any court, commission, agency or
other body exercising executive, legislative, judicial or regulatory
functions.
6-A
"Group" means either the Xxxxxx Group or the Xxxxxxx Group, as the
context requires.
"High Vote Share" means, with reference to any issuer, any share of
Voting Stock of such issuer of any class or series that has more than one
Director Vote per share.
"JCM" has the meaning assigned to such term in the introductory
paragraph of this Agreement.
"Xxx" has the meaning assigned to such term in the introductory
paragraph of this Agreement.
"LM" has the meaning assigned to such term in the introductory
paragraph of this Agreement.
"Low Vote Share" means, with reference to any issuer, any share of
Voting Stock of such issuer of any class or series that has not more than one
Director Vote per share.
"Xxxxxxx Call Agreement" means the Call Agreement, dated as of the
date of this Agreement, among TCI and each member of the Xxxxxxx Group.
"Xxxxxxx Group" shall mean (i) each of Xxxx (individually and in any
Representative Capacity), Xxx (individually and in any Representative
Capacity), the Xxx Estate, the Xxxxx Estate, each other Person who now or
hereafter has a Representative Capacity with respect to either of such
estates or any trust established thereunder, (ii) each other Person who is
required to or becomes a party to this Agreement and a member of the Xxxxxxx
Group pursuant to any provision of this Agreement, (iii) each other Person
who at any time acquires any High Vote Shares of any Company in a transaction
or a chain of transactions initiated by another member of the Xxxxxxx Group,
other than Exempt Transfers and (iv) each spouse or other Related Party of
any member of the Xxxxxxx Group, in each case so long as such Person is or is
required to be a party to this Agreement or such Person or any of its Related
Parties is the direct or indirect Beneficial Owner of any High Vote Shares of
any Company.
"Xxxxxxx Group Representative" means any natural person who is a
member of the Xxxxxxx Group duly appointed and serving as the representative
of the Xxxxxxx Group for purposes of this Agreement. The Xxxxxxx Group may,
at any time by a written notice delivered to TCI and the members of the
Xxxxxx Group, remove and replace the Person then serving as Xxxxxxx Group
Representative, provided that such representative shall at all times be a
natural person and a member of the Xxxxxxx Group.
"Xxxxxx Call Agreement" means the Call Agreement, dated as of the date
of this Agreement, among TCI and each member of the Xxxxxx Group.
7-A
"Xxxxxx Group" shall mean (i) each of JCM and LM, (ii) each other
Person who is required to or becomes a party to this Agreement and a member
of the Xxxxxx Group pursuant to any provision of this Agreement, (iii) each
other Person who at any time acquires any High Vote Shares of any Company in
a transaction or a chain of transactions initiated by another member of the
Xxxxxx Group, other than Exempt Transfers and (iv) each spouse or other
Related Party of any Member of the Xxxxxx Group, in each case so long as such
Person is or is required to be a party to this Agreement or such Person or
any of its Related Parties is the direct or indirect Beneficial Owner of any
High Vote Shares of any Company.
"Other Stockholder" has the meaning assigned to such term in Section
4.2(b).
"Participation Offer" has the meaning assigned to such term in Section
3.1(a).
"Permitted Pledge" means, with respect to any security, a bona fide
pledge of by a Beneficial Owner or other holder of such security to a
financial institution to secure borrowings.
"Person" means any individual, corporation, limited liability company,
general or limited partnership, joint venture, association, joint stock
company, trust, unincorporated business or organization, governmental
authority or other legal entity or legal person, whether acting in an
individual, fiduciary or other capacity.
"Prospective Purchaser" has the meaning assigned to such term in
Section 4.1(a).
"Qualified Trust" means, with respect to any member of either Group,
any trust that is directly or indirectly controlled solely by one or more
members of such Group and the beneficiaries of which are one or more Related
Parties or Charitable Transferees of such members(s), including any such
trust that is so controlled and (i) qualifies under the Code as a so-called
"charitable remainder trust," provided that the income beneficiaries consist
solely of one or more Related Parties of such member(s) and the remainder
interest reverts to one or more Charitable Transferees of such trustee(s), or
(ii) qualifies under the Code as a so-called "charitable lead trust,"
provided that the income beneficiaries consist solely of one or more
Charitable Transferees and the remainder interest reverts to such trustee(s)
or one or more Related Parties of such member(s).
"Related Party" means, with respect to any member of either Group,
(i) the spouse, siblings and lineal descendants (which shall include
a Person adopted before the age of 18) of such Person or any spouse of
any such sibling or lineal descendant;
(ii) any Qualified Trust;
8-A
(iii) a custodian under the Uniform Gifts to Minors Act or similar
fiduciary for the exclusive benefit of such Person's children during
their lives or a Charitable Transferee; or
(iv) a corporation, limited liability company, private foundation or
other entity organized under the laws of any state in the United States
which is Controlled by, and all equity, participation, beneficial or
similar interests (and rights to acquire any thereof, contingently or
otherwise) of which are beneficially owned solely by such Person or such
Person and one or more Related Parties of such Person.
"Representative Capacity" means, with respect to any Person that is a
party to this Agreement, such Person as an executor or administrator of the
Xxx Estate, the Xxxxx Estate or any other estate, as a trustee of any trust
or in any other fiduciary or representative capacity if such Person, in such
capacity, directly or indirectly possesses or shares the power to vote or
dispose or direct the voting or disposition of any High Vote Shares or Rights
to acquire any High Vote Shares issued by any Company or any other shares of
capital stock, Rights or other securities subject to any provisions of this
Agreement.
"Rights" means, with respect to any capital stock of any class or
series, any options, warrants, shares of convertible preferred stock,
convertible notes or other securities, instruments or rights, however
denominated, which are convertible into or exercisable or exchangeable for,
or otherwise carry the right to subscribe for, purchase or otherwise acquire
any shares of such capital stock (or any other Rights with respect to any
such shares), whether with or without payment of additional consideration and
whether immediately or upon the occurrence of a specified date the
satisfaction or happening of any condition or contingency.
"Selling Stockholder" has the meaning assigned to such term in Section
4.1(a).
"Settlement Agreement" has the meaning assigned to such term in the
preamble to this Agreement.
"Spin-Off Company" a wholly owned subsidiary of TCI any High Vote
Shares of which are distributed to the common stockholders of TCI pursuant to
a stock dividend or other distribution, if and so long as such subsidiary
continues to be a Controlled Affiliate of TCI or JCM.
"Subject Securities " has the meaning assigned to such term in Section
3.1(a).
"Tag-Along Exercise Notice" has the meaning assigned to such term in
Section 4.1(b).
"Tag-Along Notice" has the meaning assigned to such term in Section
4.1(b).
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"Tag-Along Shares" has the meaning assigned to such term in Section
4.1(b).
"TCI" has the meaning assigned to such term in the introductory
paragraph of this Agreement.
"Transfer" means, when used with respect to any security, any sale,
exchange or other assignment of Beneficial Ownership of such security for
value, but such term shall not include any transfer of the power to vote a
security to the extent required to avoid any forfeiture or divestiture of any
securities or property or other adverse result under any law, rule,
regulation, judgment, order or decree, any delivery of a revocable proxy, any
redemption, purchase or other acquisition in any manner (whether or not for
any consideration) by the issuer of such security the conversion or exchange
of such security for another security of the same issuer, the exercise of any
Right, any other exercise of any conversion, exchange, purchase or other
right of holders of securities of the same class, series or issue generally
or the expiration or failure to exercise any Right or any other conversion,
exchange, purchase or right of the holder of such security.
"Voting Stock" when used with reference to any issuer and to any
election of directors of such issuer or any other matter which submitted or
to be submitted to a vote or the written consent of, or other action by,
stockholders of such issuer, means any class or series of capital stock of
such issuer that has voting power with respect to such election or other
matter. For purposes of Article II, an obligation on the part of any Person
to vote any Voting Stock with regard to any matter applies only to those
shares held by such Person on the applicable record date or other date for
determining the holders of Voting Stock of that class or series entitled to
vote on such matter.
10-A
