Exhibit 10.7
GSN AGREEMENT
THIS AGREEMENT (this "Agreement") is made as of February 23, 2001, by and
among Liberty Media Corporation ("LMC"), Liberty Digital, Inc. ("LDIG") and LDIG
Gamenet, Inc. ("Gamenet").
RECITALS
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A. LMC, LDIG and Gamenet have entered into the Membership Purchase
Agreement (the "Purchase Agreement") made as of February 23, 2001, by and among
LMC, LDIG, Gamenet, Sony Pictures Entertainment, Inc., Sony Pictures Cable
Ventures I Inc. ("SPCV") and TGSC Management, Inc. ("TGSC") pursuant to which
Gamenet will acquire a 50% interest in Game Show Network, LLC ("LLC").
B. The Purchase Agreement provides that a portion of the purchase price
of the 50% interest in LLC which is being acquired by Gamenet is to be paid by
delivery of a promissory note in the principal amount of $100,000,000. As an
accommodation to LDIG and Gamenet, LMC desires to issue the promissory note
attached in the form of Exhibit A hereto (the "Note") to SPCV and TGSC as
co-maker with Gamenet in accordance with the terms of this Agreement.
NOW THEREFORE, in consideration of the foregoing premises and for value
received, the parties agree as follows:
1. At the Closing (as defined in the Purchase Agreement), LMC and Gamenet
will issue the Note to SPCV and TGSC, and LMC hereby assigns and directs that
SPCV and TGSC transfer any interest in the LLC attributable to the portion of
the purchase price represented by the Note to Gamenet.
2. As consideration for the issuance of the Note by LMC, LDIG will cause
its wholly-owned subsidiary, Liberty IP, Inc., to assign and transfer to LMC
888,517 shares of the common stock of Internet Pictures Corporation free and
clear of all liens, charges or encumbrances.
3. Upon issuance of the Note, Gamenet will prepay the interest on the
Note by transferring 676,353 shares of LDIG's Series A Common Stock, $.01 par
value per share, to SPCV and TGSC.
4. Gamenet agrees that it will be primarily obligated to satisfy all
remaining obligations under the Note and that if LMC, for any reason, pays or
otherwise satisfies any of such obligations, LMC will deliver a notice to
Gamenet specifying the amount of such obligation paid or satisfied by LMC. Upon
receipt of such notice, Gamenet will immediately (but in no event later than one
business day after its receipt of such notice) reimburse LMC for any such
amounts. If Gamenet fails to reimburse LMC as provided above, Gamenet will
assign and transfer to LMC a percentage
membership interest in the LLC (the "LLC Interest") equal to the greater of (i)
the Specified Percentage (as defined below) or (ii) the percentage equivalent of
$110,000,000 divided by the fair market value of the LLC at such time, as
determined in accordance with paragraph 5. Gamenet's obligation to assign and
transfer an interest in the LLC will be secured by a security interest in
Gamenet's interest in the LLC evidenced by a Security Agreement in the form of
Exhibit B attached hereto. If Gamenet assigns and transfers the LLC Interest to
LMC as provided above, following the assignment and transfer of the LLC Interest
to LMC, LMC and Gamenet agree that, (a) as between LMC and Gamenet, LMC will be
solely responsible for all remaining obligations under the Note and LMC will
indemnify Gamenet for any such remaining obligations, and (b) LMC will not
assume, and Gamenet will retain, all obligations to make future mandatory
capital contributions to the LLC, including, without limitation, the mandatory
capital contributions required pursuant to Section 3.2 of the Amended and
Restated Operating Agreement for Game Show Network, LLC made as of February 23,
2001 by and among Sony Pictures Entertainment, Inc., SPCV, TGSC, LDIG and
Gamenet. "Specified Percentage" shall mean the percentage equivalent of (i) $100
million divided by (ii) the product of (x) the sum of $275 million and the
aggregate amount of cash capital contributions made by Gamenet to the LLC after
the date hereof and (y) two.
5. If Gamenet is required to transfer the LLC Interest to LMC, the fair
market value of the LLC will be determined through negotiations between LMC and
Gamenet, or if LMC and Gamenet cannot reach agreement as to the fair market
value of the LLC within 10 days of the date that Gamenet is required to
reimburse LMC, the determination of the fair market value of the LLC shall be
made by an investment banking or valuation firm selected by LMC.
6. Each of LMC, LDIG and Gamenet agrees to execute and deliver such
other instruments and documents that may be necessary or advisable to evidence
the transactions set forth in this Agreement.
7. This Agreement will be governed by and construed in accordance with
the laws of the State of Colorado, without regard to its conflicts of laws
rules.
8. This Agreement will be binding on, and will inure to the benefit of
the parties hereto and their respective successors and assigns.
9. This Agreement may not be altered, amended, changed, terminated or
modified, or compliance with any provision waived, in any respect or any
particular, except by written instrument executed by each of the parties hereto.
10. This Agreement may be executed in any number of counterparts, each
of which will be deemed an original but all of which will constitute one and the
same instrument.
[Signature page follows]
IN WITNESS WHEREOF, each of the undersigned has caused this Agreement to be
executed by an authorized officer or an authorized person on its behalf as of
the date first above written.
LIBERTY MEDIA CORPORATION
By: --------------------------------
Name: --------------------------------
Title: --------------------------------
LIBERTY DIGITAL, INC.
By: --------------------------------
Name: Xxxx X. Xxxxxxx
Title: Executive Vice President
LDIG GAMENET, INC.
By: --------------------------------
Name: Xxxx X. Xxxxxxx
Title: Executive Vice President
[SIGNATURE PAGE TO GSN AGREEMENT]
