THE DIRECTV GROUP, INC. El Segundo, California 90245
THE
DIRECTV GROUP, INC.
▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
El
Segundo, California 90245
May 6,
2008
Liberty
Media Corporation
▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Englewood,
Colorado 80112
Ladies
and Gentlemen:
Liberty
Media Corporation, a Delaware corporation, together with its wholly-owned
subsidiaries Greenlady Corporation and Greenlady II, LLC (collectively "Liberty"), is the
Beneficial Owner of 548,720,752 shares (the "Liberty Shares") of
common stock, par value $.01 per share (the "Common Stock"), of
The DIRECTV Group, Inc., a Delaware corporation ("DIRECTV"). This
letter agreement (the “Agreement”) will
confirm certain understandings and agreements reached between DIRECTV and
Liberty.
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1.
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Acknowledgements. It
is acknowledged that:
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(a) As of May
5, 2008, DIRECTV had 1,145,842,353 issued and outstanding shares of Common
Stock. Accordingly, as of the date of this Agreement and based on
such number of issued and outstanding shares of Common Stock, the Liberty Shares
represent approximately 47.888% (the "Maximum Percentage")
of all issued and outstanding shares of Common Stock.
(b) Liberty
Media Corporation and DIRECTV have entered into a letter agreement dated
December 21, 2006 (the "Letter Agreement"),
pursuant to which Liberty and any other applicable “Person” (as defined in the
Amended and Restated Certificate of Incorporation of DIRECTV as filed with the
Secretary of State of the State of Delaware on December 22, 2003 (the “DIRECTV
Certificate”)) are each considered a “Purchaser Successor” as defined in
the DIRECTV Certificate and are accordingly subject to the requirements set
forth in Section 6 of Article V of the DIRECTV Certificate, as well as other
applicable provisions of the DIRECTV Certificate, and of the Amended and
Restated By-Laws of DIRECTV as in effect from time to time (the “DIRECTV
By-Laws”) and the Related Party Policies and Procedures adopted by the Board of
Directors of DIRECTV, as in effect from time to time.
(c) In
accordance with the DIRECTV Certificate, the requirements of Sections 5 and 6 of
Article V of the DIRECTV Certificate (the "Certificate
Requirements") would otherwise cease by their terms to apply under
certain circumstances, including, without limitation, the acquisition by one or
more Persons specified in the DIRECTV Certificate of Beneficial Ownership of 50%
or more of the outstanding voting securities of DIRECTV in a transaction or
series of transactions approved by an affirmative vote of a majority of the
independent directors of the Board of Directors of DIRECTV (as that term is
defined in the DIRECTV By-Laws, the “Independent
Directors”).
(d) Subject
to the understandings and agreements of Liberty in this Agreement, the Board of
Directors of DIRECTV, including, without limitation, the Independent Directors,
has authorized a share repurchase program of up to $3 billion in addition to
previously completed purchases of shares of Common Stock by the Company, which
share repurchase program may be increased by further Board authorization,
including the authorization by a majority of the Independent Directors (the
“Repurchase
Program”). Such Repurchase Program may be effected through
open market transactions, accelerated share repurchases, negotiated
transactions, issuer tender offers or otherwise.
(e) Liberty
does not presently intend to sell any Liberty Shares to DIRECTV pursuant to the
Repurchase Program or otherwise. As a result, the repurchase by
DIRECTV of Common Stock through the Repurchase Program will cause Liberty's
percentage ownership of issued and outstanding shares of Common Stock to
increase to greater than the Maximum Percentage, and may result in Liberty
having Beneficial Ownership in the aggregate of 50% or more of the issued and
outstanding shares of Common Stock.
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2.
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General
Agreements.
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(a) Nothing
in this Agreement shall amend or affect any obligation of Liberty under the
Letter Agreement, including, without limitation, its agreement that it is a
"Purchaser Successor" under Section 6 of Article V of the DIRECTV
Certificate.
(b) Liberty
agrees that, notwithstanding Liberty’s level of Beneficial Ownership of Common
Stock from time to time (whether less, at, or greater than 50% of the
outstanding voting securities of DIRECTV from time to time), the Certificate
Requirements shall continue to apply to it by virtue of this Agreement during
and after consummation of the Repurchase Program, and that any shares of Common
Stock acquired by DIRECTV under the Repurchase Program shall be considered to
remain issued and outstanding shares of Common Stock for purposes of determining
the Beneficial Ownership of the Purchaser Group in accordance with the DIRECTV
Certificate, except as otherwise provided in this Agreement.
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3.
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Voting;
Proxy.
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(a) Liberty
agrees that, at any meeting of the stockholders of DIRECTV, however called, or
at any adjournment or postponement thereof (a “DIRECTV Stockholders’
Meeting”), or in any other circumstances upon which a vote, consent or
other approval (including, without limitation, by written consent) is sought or
obtained by or from the stockholders of DIRECTV, Liberty shall:
(i)
(x) when a DIRECTV Stockholders’ Meeting is held, appear at such DIRECTV
Stockholders’ Meeting or otherwise cause the Liberty Shares that represent
Excess Voting Power to be counted as present thereat for the purpose of
establishing a quorum, and (y) cause the Liberty Shares that represent Excess
Voting Power to be voted in the same manner as, and in the same proportion to,
the votes or actions of all DIRECTV stockholders, other than the votes or
actions of the Purchaser Group, at any such DIRECTV Stockholders’ Meeting or
under any such other circumstances upon which a vote, consent or other approval
(including, without limitation, by written consent) is sought or obtained by or
from the stockholders of DIRECTV; and
(ii) notwithstanding
Section 3(a)(i), (x) if DIRECTV proposes to amend Section 6 of Article V of the
DIRECTV Certificate as set forth in Exhibit A (the
“Amendment”), and proposes to have the Amendment approved at a DIRECTV
Stockholders’ Meeting, Liberty shall appear at such DIRECTV Stockholders’
Meeting or otherwise cause the Liberty Shares to be counted as present thereat
for the purpose of establishing a quorum, and (y) cause the Liberty Shares to be
voted in favor of the Amendment, at any such DIRECTV Stockholders’ Meeting or
under any such other circumstances upon which such vote, consent or other
approval (including, without limitation, by written consent) in respect of the
Amendment is sought or obtained by or from the stockholders of
DIRECTV.
(b) With
respect to any stockholder action by written consent in respect of any matter,
Liberty and DIRECTV agree that Liberty shall not vote Liberty Shares that
represent Excess Voting Power unless the Independent Directors have consented to
the same in advance. The provisions of Section 3(a)(i) shall not
apply to any Liberty Shares which do not represent Excess Voting
Power.
(c) As a
means of ensuring Liberty’s obligations under Section 3(a), Liberty
hereby irrevocably constitutes and appoints any officer(s) of DIRECTV designated
as proxy or proxies by the Independent Directors (“Designated Proxy”) as
its attorney and proxy in accordance with the General Corporation Law of the
State of Delaware (the “General Corporation Law”), with full power of
substitution and re-substitution, to cause:
(i) Liberty
Shares representing Excess Voting Power to be voted at any DIRECTV Stockholders’
Meeting, to execute consents in respect of its Liberty Shares representing
Excess Voting Power as, and to the extent, provided in Sections 3(a)(i) and (b)
and to take all action contemplated in Sections 3(a)(i) and (b) on behalf of
Liberty (the “Excess Voting Power Proxy”); and
(ii) Liberty
Shares to be voted at any DIRECTV Stockholders’ Meeting, to execute consents in
respect of the Liberty Shares as, and to the extent, provided in Section
3(a)(ii) and to take all action contemplated in Section 3(a)(ii) on behalf of
Liberty (the “Amendment Proxy”).
Liberty
hereby revokes all other proxies and powers of attorney with respect to its
Liberty Shares that may have heretofore been appointed or granted which are
inconsistent with the provisions hereof, and represents that any proxies
heretofore given in respect of its Liberty Shares, if any, are
revocable.
(d) Liberty
hereby affirms that the irrevocable proxy is coupled with an interest and is
intended to be irrevocable in accordance with the provisions of Section 212 of
the General Corporation Law. If for any reason the proxy granted herein is not
irrevocable or is for any reason unenforceable, then ▇▇▇▇▇▇▇ irrevocably agrees
to vote or to direct the voting or the execution of written consents in respect
of its Liberty Shares in accordance with Section 3(a).
(e) The
irrevocable Excess Voting Power Proxy shall automatically terminate on the date
on which this Agreement terminates in accordance with Section 8. The irrevocable
Amendment Proxy shall automatically terminate upon the first to occur of the
following: (A) the date on which this Agreement terminates in
accordance with Section 8, and (B) the date on which the Amendment is approved
by the requisite vote of stockholders at a DIRECTV Stockholders’ Meeting or by
written consent of DIRECTV stockholders. Prior to such dates, the
Excess Voting Power Proxy and the Amendment Proxy shall not be terminated by any
act of Liberty or by operation of law, or by the occurrence of any other event
or events, it being understood that actions taken by the Designated Proxy
hereunder prior to the termination of this Agreement shall be and remain valid
as if such event or events had not occurred, regardless of whether or not
DIRECTV has received notice of the same. For avoidance of doubt,
termination of the irrevocable Amendment Proxy shall not affect in any manner,
revoke or terminate the irrevocable Excess Voting Power Proxy.
(f) The
inspector of elections at any DIRECTV Stockholders’ Meeting shall have the sole
authority to make any determinations with regard to the voting of Liberty
Shares, including, without limitation, Liberty Shares that represent Excess
Voting Power and any other determinations required under this Section 3 and any
determination by such inspector of elections shall be conclusive and binding,
absent manifest error.
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4.
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Additional Purchases
of Common Stock.
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(a) Additional
Purchases. Liberty agrees that it shall not, nor shall it
authorize or permit any member of the Purchaser Group and any Purchaser
Successors, to acquire any additional voting securities of DIRECTV (or
Beneficial Ownership thereof), other than (i) in a transaction which complies
with the requirements of this Agreement and in Section 6 of Article V of the
DIRECTV Certificate (as made applicable through the provisions hereof), or (ii)
if the percentage Beneficial Ownership of the outstanding voting securities of
the Purchaser Group and any Purchaser Successors at any time (as determined in
accordance with Section 4(b)) shall have been reduced to less than the Maximum
Percentage, other than as a result of the issuance by DIRECTV of voting
securities pursuant to stock awards or option awards to directors or current or
former employees of DIRECTV or its Subsidiaries, the Purchaser Group may acquire
additional voting securities (or Beneficial Ownership thereof) not to exceed
that number which restores such percentage Beneficial Ownership to not more than
the Maximum Percentage. Liberty shall be deemed to have satisfied its
obligations under this Section 4(a) in respect of any Purchaser Successor that
is not a Subsidiary of Liberty if, in connection with the transaction that
results in such Person becoming a Purchaser Successor that is not a Subsidiary,
Liberty obtains a written agreement, reasonably satisfactory to DIRECTV and
enforceable by it, which obligates such Purchaser Successor to comply with the
provisions of this Agreement that are applicable to such Purchaser
Successor.
(b) Determination of Percentage
Beneficial Ownership. For purposes of Section 4(a)(ii) and in
determining whether the Certificate Requirements shall have ceased to apply at
any time in accordance with Section 6 of Article V of the DIRECTV Certificate,
and for purposes of Section 8 of this Agreement, the percentage Beneficial
Ownership of the outstanding voting securities of the Purchaser Group and
Purchaser Successors at any time shall be determined as follows:
First,
the number of shares of voting securities Beneficially Owned at such time by the
Purchaser Group, together with the number of shares of voting securities
Beneficially Owned by all Purchaser Successors, shall be determined, in
accordance with Section 13(d) of the Exchange Act as provided in the DIRECTV
Certificate. This number shall be the numerator.
Second,
the number of issued and outstanding voting securities of DIRECTV at such time
shall be determined and there shall be added to such number an amount of voting
securities equal to the number of shares of Common Stock purchased by DIRECTV
pursuant to the Repurchase Program. This number shall be the
denominator.
Third,
the numerator, determined as provided above, shall be divided by the
denominator, determined as provided above, and the resulting percentage shall be
considered the percentage Beneficial Ownership of the Purchaser Group and all
Purchaser Successors at such time.
The
foregoing determination shall be made by the Independent Directors, based on
such information, opinions, reports or statements presented by such persons as
the Independent Directors reasonably believe are within such persons’
professional or expert competence and selected with reasonable care by or on
behalf of DIRECTV. Any such determination by the Independent
Directors shall be conclusive and binding, absent manifest error.
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5.
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Additional Covenants
of Liberty.
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(a) Inconsistent
Agreement. Liberty hereby covenants and agrees that it (i) has not
entered into and shall not, at any time prior to the termination of this
Agreement, enter into any agreement that would restrict, limit or interfere with
the performance of Liberty's obligations hereunder and (ii) shall not, at any
time prior to the termination of this Agreement, knowingly take any action that
would reasonably be expected to have the effect of preventing or disabling
Liberty from performing its obligations under this Agreement.
(b) Restrictions on
Proxies. Other than pursuant to the terms of this Agreement, without the
prior written consent of DIRECTV or as otherwise provided in this Agreement,
Liberty hereby agrees to not, directly or indirectly, grant any proxies or enter
into any voting trust or other agreement or arrangement (i) during the term of
this Agreement with respect to the voting of any Liberty Shares representing
Excess Voting Power, and (ii) up to and until the termination of the Amendment
Proxy pursuant to Section 3(e) with respect to the voting of any Liberty Shares,
unless such proxy, voting trust or other agreement or arrangement requires that
Liberty Shares affected thereby be voted as required by this
Agreement.
(c) Voting
Trust. Liberty agrees that, if requested by DIRECTV, it shall
transfer shares of Common Stock Beneficially Owned by it representing Excess
Voting Power to an entity authorized to act as trustee, for the purpose of
vesting in such entity the right to vote such shares of the Common Stock in
accordance with this Agreement, pursuant to a voting trust agreement, acceptable
to the parties, in compliance with Section 218 of the General Corporation
Law. Such voting trust arrangement, if implemented, shall terminate
(i) upon termination of this Agreement, (ii) as otherwise agreed to by the
parties or (iii) with respect to any shares of Common Stock that cease to
represent Excess Voting Power, upon such shares ceasing to represent Excess
Voting Power.
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6.
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Representations and
Warranties of Liberty.
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Liberty
hereby represents and warrants to DIRECTV as follows:
(a) Authority for this
Agreement. Liberty has all necessary power and authority to execute and
deliver this Agreement and to consummate the transactions contemplated hereby.
The execution and delivery of this Agreement by Liberty and the consummation by
Liberty of the transactions contemplated hereby (i) will not violate any order,
writ, injunction, decree, statute, rule, regulation or law applicable to Liberty
or by which any of its Liberty Shares are bound, (ii) will not violate or
constitute a breach or default under any agreement by which Liberty or the
Liberty Shares may be bound, (iii) will not require the consent of or any notice
or other filing with any third party, including, without limitation, any
governmental authority, and (iv) have been duly and validly authorized, and no
other proceedings on the part of Liberty are necessary to authorize this
Agreement or to consummate the transactions contemplated hereby. This Agreement
has been duly and validly executed and delivered by Liberty and, assuming it has
been duly and validly authorized, executed and delivered by DIRECTV, constitutes
a legal, valid and binding agreement of Liberty, enforceable against Liberty in
accordance with its terms, except to the extent that enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance or other similar laws relating to or affecting enforcement of
creditors’ rights generally, and general principles of equity (regardless of
whether enforcement is considered in a proceeding at law or in equity). There is
no party to any other agreement or arrangement, whose consent is required for
the execution and delivery of this Agreement or the consummation by Liberty of
the transactions contemplated hereby.
(b) Ownership of Shares.
As of the date hereof, the entities comprising Liberty are the sole record and
Beneficial Owner of 548,720,752 Liberty Shares, free and clear of all pledges,
liens, proxies, claims, charges, security interests, preemptive rights, voting
trusts, voting agreements, options, rights of first offer or refusal and any
other encumbrances or arrangements whatsoever with respect to the ownership,
transfer or other voting of the Liberty Shares (collectively, “Liens”) other than
the pledge agreement with Bank of America covering a portion of the Liberty
Shares, encumbrances created by this Agreement and any restrictions on transfer
under applicable federal and state securities laws. As of the date hereof, there
are no outstanding options, warrants or rights to purchase or acquire, or
agreements or arrangements relating to the voting of, any Liberty Shares (other
than the agreements specified in Schedule 1) and
Liberty has the sole authority to direct the voting of the Liberty Shares in
accordance with the provisions of this Agreement and the sole power of
disposition with respect to the Liberty Shares, with no restrictions, subject to
applicable federal and state securities laws on Liberty's rights of disposition
pertaining thereto (other than Liens or restrictions created by this
Agreement). Except for the Liberty Shares, as of the date hereof,
Liberty does not Beneficially Own or own of record any Equity Securities of
DIRECTV or any of its Subsidiaries.
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7.
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Representations and
Warranties of DIRECTV.
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(a) Authority for this
Agreement. DIRECTV hereby represents and warrants to Liberty
that DIRECTV has all necessary corporate power and authority to execute and
deliver this Agreement and to consummate the transactions contemplated hereby.
The execution and delivery of this Agreement by DIRECTV and the consummation by
DIRECTV of the transactions contemplated hereby (i) will not violate any order,
writ, injunction, decree, statute, rule, regulation or law applicable to
DIRECTV, (ii) will not violate or constitute a breach or default under any
agreement by which DIRECTV may be bound, (iii) will not require the consent of
or any notice or other filing with any third party, including, without
limitation, any governmental authority, and (iv) have been duly and validly
authorized, and no other proceedings on the part of DIRECTV are necessary to
authorize this Agreement or to consummate the transactions contemplated hereby.
This Agreement has been duly and validly executed and delivered by DIRECTV and,
assuming it has been duly and validly authorized, executed and delivered by
Liberty, constitutes a legal, valid and binding obligation of DIRECTV
enforceable against DIRECTV in accordance with its terms, except to the extent
that enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance or other similar laws relating to or affecting
enforcement of creditors’ rights generally, and general principles of equity
(regardless of whether enforcement is considered in a proceeding at Law or in
equity).
(b) Issued and Outstanding
Shares. As of May 5, 2008, there were 1,145,842,353 issued and
outstanding shares of Common Stock.
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8.
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Termination.
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Except as
provided below in this Section 8, this Agreement and all of its provisions shall
terminate upon the first to occur of the following: (a) mutual
agreement of Liberty and DIRECTV (with the approval of its Independent
Directors); and (b) if the Certificate Requirements (as made applicable by this
Agreement or otherwise) shall have ceased to apply as a result of (i) a
determination by an affirmative vote of a majority of the Independent Directors,
(ii) the Purchaser Group otherwise acquires Beneficial Ownership of 50% or more
of the outstanding voting securities of DIRECTV (as determined in accordance
with Section 4(b) of this Agreement), under the circumstances described in
clauses (i) or (ii) of Section 6 of Article V of the DIRECTV Certificate or
(iii) the members of the Purchaser Group and the Purchaser Successors acquire
aggregate Beneficial Ownership of 80% or more of the outstanding voting
securities of DIRECTV (as determined in accordance with Section 4(b) of this
Agreement). Notwithstanding the foregoing, Sections 10(a), (b), (e), (g), (h), (i) and (j) shall survive
any termination of this Agreement. Nothing in this Section 8 shall be deemed
to release any party from any liability for any breach by such party of their
representations and warranties or any other terms and provisions of this
Agreement.
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9.
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Definitions.
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As used
in this Agreement, the following terms, when capitalized and unless otherwise
expressly provided or unless the context otherwise requires, shall have the
following meanings.
“Beneficial Owner” and
“Beneficial
Ownership” and words of similar import have the meaning
assigned to such terms in Rule 13d-3 and Rule 13d-5 promulgated under the
Exchange Act and a Person’s Beneficial Ownership of securities shall be
calculated in accordance with the provisions of such Rules.
“Excess Voting Power”
(as calculated, from time to time, as required by this Agreement) means the
aggregate percentage voting power represented by the Liberty Shares of the
voting power of the Common Stock issued and outstanding on the record date for
the determination of stockholders entitled to receive notice of, and to vote at,
any DIRECTV Stockholders' Meeting, or in any other circumstances upon which a
vote, consent or other approval (including, without limitation, by written
consent) is required, on the date of such vote, consent or approval, less the
Maximum Percentage. For purposes of this Agreement, the number
of Liberty Shares that represent Excess Voting Power at any time shall be equal
to the product of (i) the percentage amount at such time, determined as provided
above, multiplied by (ii) the number of shares of Common Stock issued and
outstanding at such time.
“Exchange Act” means
the Securities Exchange Act of 1934 and the rules and regulations promulgated
thereunder, as amended.
“Person” means any
individual, firm, corporation, partnership, company, limited liability company,
trust, joint venture, association, governmental entity, unincorporated
organization or other entity.
“Purchaser Group”
shall mean (i) any of Liberty Media Corporation, Greenlady Corporation,
Greenlady II, LLC or any Subsidiaries of any of such named entities, (ii) any
Purchaser Successor, or (iii) any Person acting as agent for or in concert with
any of the foregoing with respect to the acquisition, voting or other Beneficial
Ownership of any voting securities of DIRECTV.
“Purchaser Successor”
shall mean (i) any Person to whom any member of the Purchaser Group transfers
(other than pursuant to open market transactions) more than 10% of the
outstanding voting securities of DIRECTV, or (ii) any successor (by merger,
consolidation, transfer of assets or otherwise) to any member of the Purchaser
Group or any portion of its business and assets, which beneficially owns more
than 10% of the outstanding voting securities of DIRECTV.
A “Subsidiary” of any
Person means another Person (a) an amount of the voting securities, other voting
ownership or voting partnership interest of which is sufficient to elect at
least a majority of its board or other governing body (or, if there are no such
voting interests, 50% or more of the equity interests of which is Beneficially
Owned directly or indirectly by such first Person) or (b) which is required to
be consolidated with such Person under U.S. generally accepted accounting
principles, as in effect at the time such term is
relevant. Notwithstanding the foregoing, neither IAC/InterActiveCorp
nor Expedia, Inc. will be deemed to be Subsidiaries of Liberty based solely on
Liberty’s Beneficial Ownership of voting securities of either such issuer on the
date hereof and provided that the existing voting arrangements in respect
thereof remain in effect.
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10.
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Miscellaneous.
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(a) Governing
Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware.
(b) Jurisdiction. The
parties hereby irrevocably and unconditionally consent to submit to the
exclusive jurisdiction of the Delaware Chancery Courts, or, if the Delaware
Chancery Courts do not have subject matter jurisdiction, of the state courts of
the State of Delaware located in Wilmington, Delaware, or of the United States
of America located in any district within such state, with respect to any Action
arising out of or relating to this Agreement and the transactions contemplated
hereby, and further agree that service of any process, summons, notice or
document by U.S. registered mail to the respective addresses set forth in Section 10(h) of this
Agreement shall be effective service of process for any Action brought against
the parties in any such court. The parties hereby irrevocably and
unconditionally waive any objection to the laying of venue of any Action arising
out of this Agreement or the transactions contemplated herby in the courts
referenced in the preceding sentence, and hereby further irrevocably and
unconditionally waive and agree not to plead or claim in any such court that any
such action, suit or proceeding brought in any such court has been brought in an
inconvenient forum.
(c) Equitable
Relief. Each party agrees that irreparable damage would occur
in the event that any of the provisions of this Agreement were not performed in
accordance with its specific terms or were otherwise breached. It is
accordingly agreed that each party shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement, this being in addition to any other
remedy to which it is entitled at law or in equity.
(d) Counterparts. This
Agreement may be executed in counterparts, which together shall constitute one
instrument. Facsimiles of duly executed signature pages are
acceptable and shall deemed to be originals.
(e) Entire
Agreement. This Agreement constitutes the entire agreement
among the parties hereto pertaining to the subject matter hereof and supersedes
all prior agreements and understandings (except, for the avoidance of doubt, the
Letter Agreement) of the parties in connection herewith, and no covenant,
representation or condition not expressed in this Agreement shall affect, or be
effective to interpret, change or restrict, the express provisions of this
Agreement.
(f) Modification. This
Agreement may be amended or modified only by the written consent of the parties
hereto.
(g) Waiver of Jury
Trial. EACH OF THE PARTIES HERETO IRREVOCABLY AND
UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY
AND ALL RIGHTS TO TRIAL BY JURY IN CONNECTION WITH ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE MATTERS CONTEMPLATED
HEREBY.
(h) Notices. All
notices or other communications required or permitted hereunder shall be in
writing and shall be delivered personally, by facsimile (with confirming copy
sent by one of the other delivery methods specified herein), by overnight
courier or sent by certified, registered or express air mail, postage prepaid,
and shall be deemed given when so delivered personally, or when so received by
facsimile or courier, or, if mailed, three calendar days after the date of
mailing, as follows:
If to
Liberty:
Liberty Media Corporation
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Englewood,
CO 80112
Facsimile: (▇▇▇)
▇▇▇-▇▇▇▇
Attention: General
Counsel
If to DIRECTV:
The DIRECTV Group, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
El Segundo,
CA 90245
Facsimile: (▇▇▇)
▇▇▇-▇▇▇▇
Attention: General
Counsel
or to
such other address and with such other copies as any party hereto shall notify
the other parties hereto (as provided above) from time to time.
(i) Interpretation. This
Agreement shall be construed without regard to any presumption or rule requiring
the construction or interpretation against the party drafting or causing any
agreement, instrument or document to be drafted.
(j) Expenses. In
the event of any litigation or other legal proceeding with respect to this
Agreement or the rights and obligations of the parties hereunder, the prevailing
party shall be entitled to recover from the other party all of such prevailing
party’s fees, costs and expenses relating to or arising out, of any such
litigation or other legal proceeding, including, without limitation, attorneys
fees and disbursements.
(k) Successors. This
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns. Without limiting the
generality of the foregoing, ▇▇▇▇▇▇▇ acknowledges and agrees that all members of
the Purchaser Group and, to the extent required by Section 4(a), all Purchaser
Successors shall be subject to this Agreement.
(l) Adjustment of Share
Numbers. If, after the date of this Agreement, there is a
subdivision, split, stock dividend, combination, reclassification or similar
event with respect to the Common Stock, then, in any such event, the numbers and
types of shares of Common Stock referred to in this Agreement shall be
appropriately adjusted to the number and types of shares of Equity Securities
that a holder of such number of shares of Common Stock would own or be entitled
to receive as a result of any such event.
If the
foregoing is in accordance with Liberty’s understandings and agreements with
DIRECTV, please sign and return the duplicate of this Agreement enclosed
herewith, whereupon this Agreement shall constitute a binding agreement between
Liberty and DIRECTV with respect to the matters set forth herein.
Very
truly yours,
The
DIRECTV Group, Inc.
By: /s/ ▇▇▇▇▇
▇.
▇▇▇▇▇▇
Name:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title:
Executive Vice President and General Counsel
Accepted
and Agreed to effective as of the date first written above.
Liberty
Media Corporation
By: /s/
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Name:
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Title:
Executive Vice President
Greenlady
Corporation
By: /s/
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Name:
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Title:
Executive Vice President
Greenlady
II, LLC
By: /s/
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Name:
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Title:
Executive Vice President
EXHIBIT
A
ARTICLE
V
AMENDED
AND RESTATED
CERTIFICATE
OF INCORPORATION
OF
THE
DIRECTV GROUP, INC.
(FORMERLY,
▇▇▇▇▇▇ ELECTRONICS CORPORATION)
SECTION
6. Standstill
Neither
any member of the Purchaser Group nor any Purchaser Successor shall enter into
any transaction or series of transactions as a result of which the members of
the Purchaser Group, together with all Purchaser Successors, collectively would
have beneficial ownership (as such term is defined in Section 13(d) of the
Securities Exchange Act of 1934 and the rules and regulations promulgated
thereunder, as amended (the "Exchange Act")) in the aggregate of 50% or more of
the outstanding voting securities of the Corporation, unless:
(i) in
connection therewith, such member of the Purchaser Group or Purchaser Successor
commences a tender or exchange offer for all of the outstanding voting
securities of the Corporation (at a price at least equal to the market price
thereof immediately prior to the earlier of the public announcement or
commencement thereof) or acquires, or enters into an agreement to acquire, all
of such voting securities pursuant to a merger or other business combination
transaction with the Corporation (it being understood that the prohibitions set
forth in the first sentence of this Section 6 of this Article V shall not apply
(A) to any such offer, merger or transaction or (B) from and after the
consummation of such offer, merger or transaction if, but only if, as a result
of the consummation thereof the members of the Purchaser Group, together with
any Purchaser Successor, have beneficial ownership in the aggregate of 50% or
more of the outstanding voting securities of the Corporation);
(ii) such
transaction or series of transactions is approved by an affirmative vote of a
majority of the independent directors of the Board of Directors of the
Corporation; or
(iii) a
party that is not an Affiliate of any member of the Purchaser Group or of any
Purchaser Successor acquires (and continues to hold), or has announced its
intention (and is currently seeking) to acquire, through any transaction or
series of transactions, including through any tender or exchange offer,
beneficial ownership in the aggregate of 25% or more of the outstanding voting
securities of the Corporation or has announced its intention (and is currently
seeking) to effect a merger or other business combination transaction with the
Corporation as a result of which such party would become the beneficial owner of
25% or more of the outstanding voting securities of the surviving corporation of
the merger or business combination, which merger or other business combination
has been approved by the Board of Directors of the Corporation; provided, however, in the event
that any member of the Purchaser Group or any Purchaser Successor makes any such
acquisition pursuant to the exception provided in this clause (iii) then, unless
such acquisition was also in accordance with clause (i) or (ii) above or unless
either of the following paragraphs is also applicable, a majority of the Board
of Directors of the Corporation shall continue to consist of independent
directors.
The
requirements set forth in Section 5 and Section 6 of this Article V shall cease
to apply from and after the first to occur of (x) such time as a majority of the
independent directors so determines, (y) the acquisition of beneficial ownership
of 50% or more of the outstanding voting securities of the Corporation under the
circumstances described in clauses (i) or (ii) above or (z) the members of the
Purchaser Group and the Purchaser Successors acquire aggregate beneficial
ownership of 80% or more of the outstanding voting securities of the
Corporation. In determining whether Section 5 and Section 6 of this
Article V shall have ceased to apply at any time in accordance with this
paragraph, the percentage beneficial ownership of the outstanding voting
securities of the Purchaser Group and Purchaser Successors at any time shall be
determined as follows:
First,
the number of shares of voting securities beneficially owned at such time by the
Purchaser Group, together with the number of shares of voting securities
beneficially owned by all Purchaser Successors, shall be the
numerator.
Second,
the number of issued and outstanding voting securities of the Corporation at
such time shall be determined and there shall be added to such number an amount
of voting securities equal to the number of shares of Common Stock purchased by
the Corporation from and after May 6, 2008. This number shall be the
denominator.
Third,
the numerator, determined as provided above, shall be divided by the
denominator, determined as provided above, and the resulting percentage shall be
considered the percentage beneficial ownership of the Purchaser Group and all
Purchaser Successors at such time.
The
foregoing determination, or any other calculation as to the beneficial ownership
of the outstanding voting securities of any Person, shall be made by the
“independent directors”, based on such information, opinions, reports or
statements presented by such Persons as the “independent directors” reasonably
believe are within such Persons’ professional or expert competence and selected
with reasonable care by or on behalf of the Corporation. Any such
determination by the “independent directors” shall be conclusive and binding,
absent manifest error.
As used
in these Articles, the following terms shall have the meanings set forth
below:
An
“Affiliate” of any Person shall mean another Person that directly or indirectly,
through one or more intermediaries, Controls, is Controlled by, or is under
common Control with, such first Person. Liberty Media Corporation and
the Corporation shall not be deemed Affiliates of one another.
“Control”
shall mean, with respect to any Person, the possession, directly or indirectly,
of the power to direct or cause the direction of the management or policies of
such Person, whether through ownership of securities or partnership, membership,
limited liability company, or other ownership interests, by contract or
otherwise and the terms “Controlling” and “Controlled” have meanings correlative
to the foregoing.
“Purchaser
Group” shall mean (i) any of Liberty Media Corporation, Greenlady Corporation,
Greenlady II, LLC or any Subsidiaries of any of such named entities, (ii) any
Purchaser Successor, or (iii) any Person acting as agent for or in concert with
any of the foregoing with respect to the acquisition, voting or other Beneficial
Ownership of any voting securities of DIRECTV.
“Purchaser
Successor” shall mean (i) any Person to whom any member of the Purchaser Group
transfers (other than pursuant to open market transactions) more than 10% of the
outstanding voting securities of the Corporation, or (ii) any successor (by
merger, consolidation, transfer of assets or otherwise) to any member of the
Purchaser Group or any portion of its business and assets, which beneficially
owns more than 10% of the outstanding voting securities of the
Corporation.