EXHIBIT 7(M)
STOCKHOLDERS' AGREEMENT
STOCKHOLDERS' AGREEMENT, dated as of February 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
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Section 1.1 Defined Terms. Capitalized terms used in this Agreement
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have the respective meanings given them in Exhibit A.
Section 1.2 Certain Rules of Construction. Certain rules for the
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interpretation and construction of this Agreement are contained in Section 6.1.
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ARTICLE II
VOTING OF SHARES
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Section 2.1 Board Representation of Xxxxxxx Group. (a) Subject to
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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
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EXHIBIT 7(M)
any Company. JCM or such Company shall give the Xxxxxxx Group
Representative prompt written notice of any 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
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EXHIBIT 7(M)
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 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
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(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,
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EXHIBIT 7(M)
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
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
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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
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Section 3.1 Participation Offer
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(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
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EXHIBIT 7(M)
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.
(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.
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(a) Unless JCM and the Xxxxxxx Group Representative otherwise agree, in
order to accept a Participation Offer, the Xxxxxxx Group members must, on or
befor e 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,
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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
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EXHIBIT 7(M)
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 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
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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
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Section 4.1 Tag-Along Right.
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(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
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EXHIBIT 7(M)
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.
(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
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EXHIBIT 7(M)
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 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
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EXHIBIT 7(M)
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-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.
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(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
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EXHIBIT 7(M)
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 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.
20
EXHIBIT 7(M)
(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.
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.
21
EXHIBIT 7(M)
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 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.
22
EXHIBIT 7(M)
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 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.
23
EXHIBIT 7(M)
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.
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") the
definition of which is based on a
24
EXHIBIT 7(M)
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 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
25
EXHIBIT 7(M)
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 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
26
EXHIBIT 7(M)
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.
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 HEREBY ARE SUBJECT TO (i) THE SHAREHOLDERS'
AGREEMENT, DATED AS OF FEBRUARY 9, 1998, AMONG THE REGISTERED HOLDER
HEREOF, CERTAIN OTHER PARTIES AND THE CORPORATION AND (ii) THE CALL
AGREEMENT, DATED AS OF FEBRUARY 9, 1998, AMONG THE REGISTERED HOLDER
HEREOF, CERTAIN OTHER PARTIES AND THE CORPORATION. COPIES OF SUCH
SHAREHOLDERS AGREEMENT AND CALL AGREEMENT ARE ON FILE AT THE PRINCIPLE
OFFICES OF THE CORPORATION. THE SECURITIES REPRESENTED MAY BE TRANSFERRED
OR VOTED ONLY IN ACCORDANCE WITH SAID SHAREHOLDERS AGREEMENT AND SAID CALL
AGREEMENT."
27
EXHIBIT 7(M)
(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 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
28
EXHIBIT 7(M)
of the holders of shares of that class or series shall be taken) in the manner
directed or recommended by the 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 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
29
EXHIBIT 7(M)
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 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
30
EXHIBIT 7(M)
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 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
31
EXHIBIT 7(M)
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 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
32
EXHIBIT 7(M)
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.
(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
33
EXHIBIT 7(M)
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,
34
EXHIBIT 7(M)
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.
--------------------------------------------
Xxx Xxxxxxx, individually and as Trustee
of the Xxxxxxx Family Irrevocable Trusts
and the Xxxxxxx Issue GST Trusts
--------------------------------------------
Xxxx Xxxxxxx, individually and as Trustee
of the Xxxxxxx Family Irrevocable Trusts
and the Xxxxxxx Issue GST Trusts
ESTATE OF XXXXX XXXXXXX
By:
----------------------------------------
Xxx Xxxxxxx, Personal
Representative
35
EXHIBIT 7(M)
ESTATE OF XXX XXXXXXX
By: ________________________________
Xxx Xxxxxxx, Personal
Representative
By: ________________________________
Xxxx Xxxxxxx, Personal
Representative
36
EXHIBIT 7(M)
TELE-COMMUNICATIONS, INC.
By: ____________________________
Its: ____________________________
_______________________________
XX. XXXX X. XXXXXX
_______________________________
XXXXXX XXXXXX
37
EXHIBIT 7(M)
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
38
EXHIBIT 7(M)
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
39
EXHIBIT 7(M)
as it (A) has Common Stock registered under Section 12(b) or 12(g) of the
Exchange Act and (B) 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.
40
EXHIBIT 7(M)
"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
41
EXHIBIT 7(M)
the Xxxxxxx Group had the opportunity to participate in accordance with
Article III;
(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;
42
EXHIBIT 7(M)
(v) a Disposition to another member of the Xxxxxx Group or the
Xxxxxxx Group or any Controlled Affiliate of a member of either Group;
(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.
43
EXHIBIT 7(M)
"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.
"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
44
EXHIBIT 7(M)
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.
"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,
45
EXHIBIT 7(M)
(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;
(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.
46
EXHIBIT 7(M)
"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).
"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.
47
