Exhibit 10
SERVICES AGREEMENT
This Services Agreement (this "AGREEMENT") is made and entered into
effective as of the 21st day of July, 2005 (the "EFFECTIVE DATE"), by and
between Discovery Holding Company, a Delaware corporation (the "COMPANY"), and
Liberty Media Corporation, a Delaware corporation ("PROVIDER"). For purposes of
this Agreement, terms used in capitalized form will have the meanings set forth
in Appendix A.
RECITALS
A. Prior to the Effective Date, the Company was a wholly owned
subsidiary of Provider. On the Effective Date, the Company became an
independent, publicly traded company through the distribution of the Company's
stock by Provider to its stockholders on a pro rata basis (the "SPIN OFF").
Through its subsidiaries and affiliates, the Company is engaged primarily in (1)
the production, acquisition and distribution of entertainment, educational and
information programming and software, (2) the retail sale and licensing of
branded and other specialty products and (3) the provision of creative, media
management and network services to the media and entertainment industries (the
"COMPANY BUSINESS").
B. The Company and Provider believe that it is in their mutual
interests for the Company to obtain services from Provider in connection with
the Company Business after the Spin Off and for the Company to compensate
Provider for the performance of such services.
C. The parties desire to set forth in this Agreement the services to be
performed by Provider to the Company and the basis upon which Provider will be
compensated by the Company.
AGREEMENT
For good and valuable consideration, the receipt and sufficiency of which
are acknowledged, the parties, intending to be bound legally, agree as follows:
SECTION 1. SERVICES TO BE PERFORMED
1.1 ENGAGEMENT. The Company engages Provider to provide to the Company
the services set forth in Section 1.2 in connection with the Company Business,
and Provider accepts such engagement, subject to and upon the terms and
conditions of this Agreement.
1.2 SERVICES PROVIDED BY PROVIDER. Provider will provide the following
services with respect to the Company Business, if and to the extent requested by
the Company (upon reasonable notice) during the Initial Term and any Renewal
Term of this Agreement:
(a) sharing office space at 00000 Xxxxxxx Xxxxxxxxx, Xxxxxxxxx,
Xxxxxxxx, including furniture, furnishings, certain equipment and, if
applicable, related software, and utilities and certain services related to the
foregoing, to the extent necessary or appropriate in order to facilitate the
provision of the Services hereunder; and
(b) providing personnel to perform services typically performed by
Provider's accounting, treasury, technical, legal, tax, and investor relations
departments, miscellaneous office and administrative services, including
management information systems, computer, network and telecommunications
services, insurance administration and risk management, and, as to any of the
Company's officers that are employees of Provider, the services of such officers
(collectively, the "SERVICES").
1.3 SERVICES NOT TO INTERFERE WITH PROVIDER'S BUSINESS. In providing the
Services set forth in Section 1.2, Provider will not be required to take any
action that would interfere with the orderly operations of Provider's business
activities.
1.4 BOOKS AND RECORDS. Provider will maintain reasonably complete and
detailed books and records in accordance with Provider's standard business
practices with respect to its provision of the Services to the Company pursuant
to this Agreement, including records supporting the allocation of costs and
expenses to the Company pursuant to Section 2. Provider will give the Company
and its duly authorized representatives, agents, and attorneys reasonable access
to all such books and records during Provider's regular business hours after
reasonable advance notice.
1.5 SERVICES TO AFFILIATES. Provider acknowledges that the Company may
request that certain Services be provided by Provider to Affiliates of the
Company, including for this purpose Discovery Communications, Inc. ("DCI").
Provider agrees to use commercially reasonable efforts to provide such Services
to Affiliates of the Company; provided, however, that Provider will have no
obligation to provide any Services to an Affiliate of the Company if Provider is
not permitted to do so under any agreement with a third-party. If the Company
notifies Provider that certain Services are being provided for any Affiliate of
the Company, including DCI, Provider will identify the costs and expenses
allocated to the Company pursuant to Section 2 that are properly attributable to
Services performed by Provider for each Affiliate of the Company separately.
Except to the extent required to separately identify costs and expenses properly
attributable to Services performed by Provider for any Affiliate of the Company,
all Services provided for any Affiliate of the Company will be deemed to be
Services performed for the Company for all purposes of this Agreement.
1.6 PARTICIPATION IN PROVIDER'S MASTER VENDOR PROGRAMS. Provider will
use commercially reasonable efforts to permit the Company and its Affiliates
(which for this purpose does not include DCI) to participate in any master
agreements with third-party vendors to Provider, if requested by the Company,
including equipment purchasing and software licensing programs. Provider and the
Company will negotiate in good faith to enter into any sublicenses for software,
containing customary terms and conditions, if appropriate to implement the
provisions of this Section 1.6.
SECTION 2. COMPENSATION FOR PROVIDING SERVICES
2.1 ALLOCATED PERSONNEL EXPENSES.
(a) The Company will pay Provider for the Services based on an
allocated portion of the personnel costs and related expenses that are incurred
by Provider in connection
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with the Services performed by it under this Agreement (collectively, the
"ALLOCATED EMPLOYEE EXPENSES"). The Allocated Employee Expenses will be set
forth in, or determined from time to time in the manner set forth in, Schedule
2.1 attached hereto, as such Schedule 2.1 may be periodically amended and
revised by the parties.
(b) ADJUSTMENT TO ALLOCATED EMPLOYEE EXPENSES. The Allocated
Employee Expenses will be estimated at the beginning of each calendar year based
on the anticipated Services to be provided to the Company during the upcoming
calendar year. Provider and the Company will review and evaluate the Allocated
Employee Expenses for reasonableness semiannually and will negotiate in good
faith to reach agreement on any appropriate adjustment to the Allocated Employee
Expenses based on such review and evaluation, including updating the aggregate
salaries and benefits of Provider Employees (and any other costs or expenses
included in Allocated Employee Expenses), revising the allocated percentages of
time spent providing Services to the Company and agreeing on the appropriate
effective date (which may be retroactive) of any such adjustment to the
Allocated Employee Expenses. The initial review of and adjustment to the
Allocated Employee Expenses will be effective as of January 1, 2006.
2.2 COST REIMBURSEMENT. In addition to the Allocated Employee Expenses
payable pursuant to Section 2.1, the Company also will reimburse Provider for
all direct out-of-pocket costs (with no markup) incurred by Provider, unless
such costs are paid directly by the Company, for postage and out-of-town courier
service charges, for any applicable software license fees attributable to
desktop or laptop computers utilized by employees of the Company, and for
expenses incurred by Provider Employees related to Services performed on behalf
of the Company, including travel and meals and entertainment related to such
Services, and for any other miscellaneous expenses that may be incurred by
Provider on behalf of the Company.
2.3 PAYMENT PROCEDURES.
(a) The Company will pay Provider, by wire or intrabank transfer
of funds or in such other manner specified by Provider to the Company, in
arrears on or before the last day of each calendar month beginning August 2005,
the Allocated Employee Expenses then in effect, in equal monthly installments if
the amount of any such payment is determined on a basis other than a monthly
amount.
(b) Any reimbursement to be made by the Company to Provider
pursuant to Section 2.2 will be paid by the Company to Provider within 15 days
after receipt by the Company of any invoice therefor, by wire or intrabank
transfer of funds or in such other manner as specified by Provider to the
Company. Provider will invoice the Company monthly for reimbursable expenses
incurred by Provider on behalf of the Company during the preceding calendar
month; PROVIDED, HOWEVER, that Provider may separately invoice the Company at
any time for any single reimbursable expense incurred by Provider on behalf of
the Company in an amount equal to or greater than $5,000. Any invoice or
statement pursuant to this Section 2.3(b) will be accompanied by supporting
documentation in reasonable detail with respect to the actual costs or expenses
incurred by Provider for which Provider is entitled to reimbursement.
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(c) Any payments not made when due under this Section 2.3 will
bear interest at the rate of 1.5% per month on the outstanding amount from and
including the due date to but excluding the date paid.
2.4 ALLOCATION BY AGREEMENT. Notwithstanding the preceding provisions of
Section 2, Provider and the Company may agree that the Company's payment to
Provider of a fixed amount will be full reimbursement as to any item for which
Provider may be entitled to reimbursement under this Agreement. As to any item
that is the subject of such agreement, the amount of the reimbursement fixed by
such agreement will control, it being agreed, however, that as to any item that
is not the subject of an agreement, the preceding provisions of Section 2 will
apply.
SECTION 3. TERM
3.1 TERM GENERALLY. The term of this Agreement will commence on the
Effective Date and will continue until December 31, 2005 (the "INITIAL TERM")
and shall be renewed automatically for successive one-year periods thereafter
(each a "RENEWAL TERM"), unless earlier terminated in accordance with Section
3.3.
3.2 CERTAIN SERVICES DISCONTINUED. At any time during the Initial Term
or any Renewal Term, upon at least 180 days' prior notice by Provider to the
Company or 30 days' prior notice by the Company to Provider, either Provider or
the Company may elect to discontinue providing to the Company or obtaining from
Provider some or all of the Services described in Section 1.2. In such event,
Provider's obligation to provide any Services that have been discontinued
pursuant to this Section 3.2, and the Company's obligation to compensate
Provider for any such Services, will cease as of the end of such 180-day period
or 30-day period, as the case may be, or such later date as may be specified in
the notice, and this Agreement will remain in effect with respect to any
Services that have not been so discontinued. Each party will remain liable to
the other for any required payment or performance accrued prior to the effective
date of discontinuance of any Service or termination of this Agreement in its
entirety.
3.3 TERMINATION. This Agreement will be terminated in the following
events:
(a) at any time upon at least 30 days' prior notice by the Company
to Provider;
(b) at any time upon at least 180 days' prior notice by Provider
to the Company;
(c) immediately upon notice (or at any time specified in such
notice) by Provider to the Company if a Change in Control or Bankruptcy Event
occurs with respect to the Company; or
(d) immediately upon notice (or at any time specified in such
notice) by the Company to Provider if a Change in Control or Bankruptcy Event
occurs with respect to Provider.
For purposes of this Section 3.3, a "Change in Control" will be deemed to have
occurred, with respect to the Company or Provider, as the case may be, if a
merger, consolidation, binding share
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exchange, acquisition, or similar transaction (each, a "TRANSACTION"), or series
of related Transactions, involving the Company or Provider (as applicable)
occurs as a result of which the voting power of all voting securities of the
Company or Provider (as applicable) outstanding immediately prior thereto
represent (either by remaining outstanding or being converted into voting
securities of the surviving entity) less than 50% of the voting power of the
Company or Provider (as applicable) or the surviving entity outstanding
immediately after such Transaction (or if the Company or Provider (as
applicable) or the surviving entity after giving effect to such Transaction is a
subsidiary of the issuer of securities in such Transaction, then the voting
power of all voting securities of the Company or Provider (as applicable)
outstanding immediately prior to such Transaction represent (by being converted
into voting securities of such issuer) less than 50% of the voting power of the
issuer outstanding immediately after such Transaction.
For purposes of this Section 3.3, a "Bankruptcy Event" will be deemed to have
occurred with respect to the Company or Provider, as the case may be, upon the
Company's or Provider's (as applicable) insolvency, general assignment for the
benefit of creditors, the voluntary commencement by the Company or Provider (as
applicable) of any case, proceeding, or other action seeking reorganization,
arrangement, adjustment, liquidation, dissolution, or consolidation of the
Company's or Provider's (as applicable) debts under any law relating to
bankruptcy, insolvency, or reorganization, or relief of debtors, or seeking
appointment of a receiver, trustee, custodian, or other similar official for the
Company or Provider (as applicable) or for all or any substantial part of the
Company's or Provider's (as applicable) assets (each, a "BANKRUPTCY
PROCEEDING"), or the involuntary filing against the Company or Provider (as
applicable) of any Bankruptcy Proceeding that is not stayed within 60 days after
such filing.
Upon any termination of this Agreement in accordance with this Section 3.3, the
Initial Term or Renewal Term then in effect will also terminate.
SECTION 4. SERVICES AND EMPLOYEES
4.1 PERSONNEL TO PROVIDE SERVICES. Provider will make available to the
Company on a non-exclusive basis, the appropriate personnel to perform the
duties required in connection with the Services, as may be reasonably requested
by the Company to be performed by Provider and as necessary and appropriate for
the proper and efficient administration and operation of the Company Business,
to the same extent and in the same manner as performed immediately prior to the
Effective Date. Provider will be responsible for hiring, supervising,
instructing, discharging, and otherwise managing such employees, and
administering any employee benefit plans applicable to such employees. The
Company acknowledges that the employees of Provider performing the Services for
the Company ("PROVIDER EMPLOYEES") also will be performing services for Provider
and may be performing services for certain Affiliates of Provider. The Company
also acknowledges that Provider may elect, in its discretion, to utilize
independent contractors rather than employees of Provider to perform the
Services from time to time, and such independent contractors will be included
within the definition of Provider Employees under this Agreement, where
applicable.
4.2 PROVIDER AS EMPLOYER. Notwithstanding the Services provided by
Provider Employees to the Company, the parties acknowledge that Provider is and
will remain the employer of all Provider Employees and will be responsible for
the employment and training of
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all Provider Employees and for the payment of salaries, wages, benefits
(including health insurance, retirement, and other similar benefits, if any) and
other compensation applicable to all Provider Employees, subject to payment by
the Company of the Allocated Employee Expenses in accordance with Section 2.1
(and except as expressly provided in Section 4.3). All Provider Employees will
be subject to the personnel policies of Provider and will be entitled to
participate in Provider's employee benefit plans to the same extent as similarly
situated employees of Provider performing services in connection with Provider's
business. Provider will be responsible for the payment of all federal, state,
and local withholding taxes on the compensation of all Provider Employees and
other such employment related taxes as are required by law. The Company will
cooperate with Provider to facilitate Provider's compliance with applicable
federal, state, and local laws, rules, regulations, and ordinances applicable to
the employment of all Provider Employees by Provider and their provision of
Services to the Company under this Agreement.
4.3 ADDITIONAL EMPLOYEE PROVISIONS. Provider will have the right to
terminate the employment of any Provider Employee at any time. A portion of any
severance payments payable to any Provider Employee spending 50% or more of such
person's time over the Look-Back Period (as defined below) in connection with
providing Services to the Company at the Company's request who separates from
employment with Provider during the Initial Term or any Renewal Term will be
allocated to the Company based on the percentage determined by dividing the
total number of months that such person was a Provider Employee providing
Services to the Company on a 50% or greater basis by the total number of months
that such person was employed by Provider or its predecessors, in each case to
the extent taken into account for purposes of determining any severance payments
payable to such person, or such other basis upon which the amount of the
severance payments payable to such person may be determined, multiplied by the
percentage of such person's time devoted to providing Services to the Company,
in each case with the percentage of such person's time devoted to providing
Services to the Company determined for the one-year period (or such applicable
shorter period of time if such Provider Employee was a Provider Employee for
less than one year) immediately preceding the date of separation of employment
(the "Look-Back Period"). The Company will not solicit any Provider Employee to
become an employee of the Company without the prior consent of Provider, unless
and until Provider terminates the employment of such Provider Employee.
SECTION 5. REPRESENTATIONS AND WARRANTIES
5.1 REPRESENTATIONS AND WARRANTIES OF PROVIDER. Provider represents and
warrants to the Company as follows:
(a) Provider is a corporation duly organized, validly existing,
and in good standing under the laws of the State of Delaware.
(b) Provider has the power and authority to enter into this
Agreement and to perform its obligations under this Agreement.
(c) Provider is not subject to any contractual or other legal
obligation that materially interferes with its full, prompt, and complete
performance under this Agreement.
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(d) The individual executing this Agreement on behalf of Provider
has the authority to do so.
5.2 REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to Provider as follows:
(a) The Company is a corporation duly organized, validly existing,
and in good standing under the laws of the State of Delaware.
(b) The Company has the power and authority to enter into this
Agreement and to perform its obligations under this Agreement.
(c) The Company is not subject to any contractual or other legal
obligation that materially interferes with its full, prompt, and complete
performance under this Agreement.
(d) The individual executing this Agreement on behalf of the
Company has the authority to do so.
SECTION 6. INDEMNIFICATION
6.1 INDEMNIFICATION BY PROVIDER. Provider will indemnify, defend, and
hold harmless the Company, its Affiliates, and each of their respective
officers, directors, employees and agents, and the successors and assigns of any
of them (collectively, the "COMPANY INDEMNITEES"), from and against any and all
claims, judgments, liabilities, losses, costs, damages, or expenses, including
reasonable counsel fees, disbursements, and court costs ("LOSSES"), that any
Company Indemnitee may suffer arising from or out of, or relating to, (a) any
breach by Provider of its obligations under this Agreement or (b) the
negligence, willful misconduct, fraud, or bad faith of Provider in performing
its obligations under this Agreement.
6.2 INDEMNIFICATION BY THE COMPANY. The Company will indemnify, defend,
and hold harmless Provider, its Affiliates, and each of their respective
officers, directors, employees and agents, and the successors and assigns of any
of them (collectively, the "PROVIDER INDEMNITEES"), from and against any and all
Losses that any Provider Indemnitee may suffer arising from or out of, or
relating to (a) any breach by the Company of its obligations under this
Agreement or (b) any acts or omissions of Provider in providing the employees
and Services to be provided by Provider pursuant to this Agreement (except to
the extent such Losses (i) arise from or relate to any breach by Provider of its
obligations under this Agreement, (ii) are attributable to the negligence,
willful misconduct, fraud, or bad faith of Provider or such other Provider
Indemnitee seeking indemnification under this Section 6.2, (iii) are covered by
insurance maintained by Provider or such other Provider Indemnitee, or (iv) are
payable by Provider pursuant to Section 7.12 or Section 7.15).
6.3 INDEMNIFICATION PROCEDURES.
(a) In connection with any indemnification provided for in this
Section 6, the party seeking indemnification (the "INDEMNITEE") will give the
party from which indemnification is sought (the "INDEMNITOR") prompt notice
whenever it comes to the Indemnitee's attention that the Indemnitee has suffered
or incurred, or may suffer or incur, any Losses for which it is
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entitled to indemnification under this Section 6, and, when known, the facts
constituting the basis for such claim (in reasonable detail). Failure by the
Indemnitee to so notify the Indemnitor will not relieve the Indemnitor of any
liability under this Agreement except to the extent that such failure prejudices
the Indemnitor in any material respect.
(b) After receipt of a notice pursuant to Section 6.3(a), the
Indemnitor will be entitled, if it so elects, to take control of the defense and
investigation with respect to such claim and to employ and engage attorneys
reasonably satisfactory to the Indemnitee to handle and defend such claim, at
the Indemnitor's cost, risk, and expense, upon written notice to the Indemnitee
of such election, which notice acknowledges the Indemnitor's obligation to
provide indemnification under this Agreement. The Indemnitor will not settle any
third-party claim that is the subject of indemnification without the written
consent of the Indemnitee, which consent will not be unreasonably withheld,
delayed or conditioned; PROVIDED, HOWEVER, that, after reasonable notice, the
Indemnitor may settle a claim without the Indemnitee's consent if such
settlement (i) makes no admission or acknowledgment of liability or culpability
with respect to the Indemnitee, (ii) includes a complete release of the
Indemnitee and its Affiliates and their respective officers, directors,
employees and agents, and (iii) does not require the Indemnitee to make any
payment not covered by indemnification by the Indemnitor hereunder or to forego
or take any action. The Indemnitee will cooperate in all reasonable respects
with the Indemnitor and its attorneys in the investigation, trial, and defense
of any lawsuit or action with respect to such claim and any appeal arising
therefrom (including the filing in the Indemnitee's name of appropriate cross
claims and counterclaims). The Indemnitee may, at its own cost, participate in
any investigation, trial, and defense of such lawsuit or action controlled by
the Indemnitor and any appeal arising therefrom. If there are one or more legal
defenses available to the Indemnitee that conflict with those available to, or
that are not available to, the Indemnitor, the Indemnitee will have the right,
at the expense of the Indemnitor, to engage separate counsel reasonably
acceptable to the Indemnitor and to participate in the defense of the lawsuit or
action.
(c) If, after receipt of a notice pursuant to Section 6.3(a), the
Indemnitor does not undertake to defend any such claim, the Indemnitee may, but
will have no obligation to, contest any lawsuit or action with respect to such
claim, and the Indemnitor will be bound by the result obtained with respect
thereto by the Indemnitee. The Indemnitee may not settle any lawsuit or action
with respect to which the Indemnitee is entitled to indemnification hereunder
without the consent of the Indemnitor, which consent will not be unreasonably
withheld, delayed, or conditioned.
(d) At any time after the commencement of defense of any lawsuit
or action, the Indemnitor may request the Indemnitee to agree in writing to the
abandonment of such contest or to the payment or compromise by the Indemnitor of
such claim, whereupon such action will be taken unless the Indemnitee determines
that the contest should be continued and so notifies the Indemnitor in writing
within 15 days of such request from the Indemnitor. Any request from the
Indemnitor that any contest be abandoned will specify the amount that the other
party or parties to the contested claim have agreed to accept in payment or
compromise of the claim. If the Indemnitee determines that the contest should be
continued, the Indemnitor will be liable under this Agreement only to the extent
of the lesser of (i) the amount that the other party or parties to the contested
claim had agreed to accept in payment or compromise as of the time the
Indemnitor made its request therefor to the Indemnitee, as specified in the
Indemnitor's
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request, or (ii) the amount for which the Indemnitor may be liable with respect
to such claim by reason of the provisions of this Agreement.
6.4 LIMITATION ON LIABILITY. In no event will any Indemnitor be liable
to any Indemnitee for any indirect, special, incidental, or consequential
damages with respect to any matter relating to this Agreement.
6.5 SURVIVAL. The terms and conditions of this Section 6 will survive
the expiration or termination of this Agreement, regardless of the reason for
such expiration or termination.
6.6 NO DUPLICATION WITH TAX SHARING AGREEMENT. For the avoidance of
doubt, as used in this Section 6, the term "Losses" does not include any Losses
that would properly be the subject of indemnification under, or that are
otherwise allocated under, the Tax Sharing Agreement, dated July 20, 2005,
between the Company and Provider.
SECTION 7. MISCELLANEOUS
7.1 ENTIRE AGREEMENT; SEVERABILITY. This Agreement constitutes the
entire agreement between the parties with respect to the subject matter of this
Agreement and supersedes all prior written and oral and all contemporaneous oral
agreements and understandings with respect to the subject matter of this
Agreement. Each provision of this Agreement will be considered severable. If for
any reason any provision of this Agreement is determined to be invalid or
unenforceable, such invalidity or unenforceability will not impair the operation
of or affect the enforceability of the other provisions of this Agreement, and
the remainder of this Agreement will continue in full force and effect.
7.2 NOTICES. All notices, consents, approvals, or other communications
under this Agreement will be made in writing and will be deemed to have been
duly given when delivered in person, by telecopy, or by registered or certified
mail (postage prepaid, return receipt requested) to the respective parties as
follows:
If to Provider: Liberty Media Corporation
00000 Xxxxxxx Xxxxxxxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx, Esq.
Telecopy: XXX-XXX-XXXX
If to the Company: Discovery Holding Company
00000 Xxxxxxx Xxxxxxxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx, Esq.
Telecopy: XXX-XXX-XXXX
or to such other address as the party to whom notice is given may have
previously furnished to the other party in writing in the manner set forth
above. Any notice or communication delivered in person will be deemed effective
on delivery. Any notice or communication sent by telecopy will be deemed
effective when receipt is confirmed. Any notice or communication sent by
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registered or certified mail, return receipt requested, will be deemed effective
when received, as evidenced by the return receipt.
7.3 GOVERNING LAW. THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF COLORADO REGARDLESS OF THE LAWS THAT
MIGHT OTHERWISE GOVERN UNDER PRINCIPLES OF CONFLICTS OF LAWS APPLICABLE THERETO.
7.4 RULES OF CONSTRUCTION. The descriptive headings in this Agreement
are inserted for convenience of reference only and are not intended to be part
of or to affect the meaning or interpretation of this Agreement. Words used in
this Agreement, regardless of the gender and number specifically used, will be
deemed and construed to include any other gender, masculine, feminine, or
neuter, and any other number, singular or plural, as the context requires. As
used in this Agreement, the word "including" or any variation thereof is not
limiting, and the word "or" is not exclusive. The word day means a calendar day.
If the last day for giving any notice or taking any other action is a Saturday,
Sunday, or a day on which banks in Denver, Colorado are closed, the time for
giving such notice or taking such action will be extended to the next day that
is not such a day.
7.5 PARTIES IN INTEREST. This Agreement will be binding on and inure
solely to the benefit of each party to this Agreement, and its successors and
permitted assigns, and nothing in this Agreement, express or implied, is
intended to confer upon any other Person any rights or remedies of any nature
whatsoever under or by reason of this Agreement.
7.6 COUNTERPARTS. This Agreement may be executed in counterparts, each
of which will be deemed to be an original, but all of which will constitute one
and the same agreement.
7.7 PAYMENT OF EXPENSES. Except as otherwise expressly provided in this
Agreement, each of the parties to this Agreement will bear its own expenses,
including the fees of any attorneys and accountants engaged by such party, in
connection with this Agreement.
7.8 NO PERSONAL LIABILITY. This Agreement will not create or be deemed
to create or permit any personal liability or obligation on the part of any
direct or indirect member, manager, or shareholder of either party to this
Agreement or any officer, director, employee, agent, representative, or investor
of either party, or of any member, manager, or shareholder of either party to
this Agreement.
7.9 BINDING EFFECT; ASSIGNMENT. This Agreement will inure to the benefit
of and be binding on the parties to this Agreement and their respective legal
representatives, successors and permitted assigns. This Agreement may not be
assigned by either party to this Agreement, except that Provider may assign its
rights and delegate its obligations under this Agreement to any Person that
acquires substantially all the assets of Provider (by merger, operation of law,
or otherwise) or to any Affiliate of Provider.
7.10 AMENDMENT. This Agreement may not be amended except by an instrument
in writing signed on behalf of both parties.
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7.11 EXTENSION; WAIVER. Either party to this Agreement may (a) extend the
time for the performance of any of the obligations or other acts of the other
party to this Agreement, or (b) waive compliance by the other party with any of
the agreements or conditions contained herein or any breach thereof. Any
agreement on the part of either party to any such extension or waiver will be
valid only if set forth in an instrument in writing signed on behalf of such
party. No consent or waiver, express or implied, by a party of any breach or
default by the other party in the performance of its obligations under this
Agreement will be deemed to be a consent to or waiver of any further or other
breach or default by such other party. Failure on the part of a party to
complain of an act, or failure to act, of the other party or to declare the
other party to be in default, irrespective of how long such failure continues,
will not constitute a waiver by such party of its rights under this Agreement.
7.12 LEGAL FEES; COSTS. If either party to this Agreement institutes any
action or proceeding, whether before a court or arbitrator, to enforce any
provision of this Agreement, the prevailing party will be entitled to receive
from the other party reasonable attorneys' fees and costs incurred in such
action or proceeding, whether or not such action or proceeding is prosecuted to
judgment, except as otherwise provided in Section 7.15.
7.13 FORCE MAJEURE. Neither party will be liable to the other party with
respect to any nonperformance or delay in performance of its obligations under
this Agreement to the extent such failure or delay is due to any action or
claims by any third party, labor dispute, labor strike, weather conditions or
any cause beyond a party's reasonable control. Each party agrees that it will
use all commercially reasonable efforts to continue to perform its obligations
under this Agreement, to resume performance of its obligations under this
Agreement, and to minimize any delay in performance of its obligations under
this Agreement notwithstanding the occurrence of any such event beyond such
party's reasonable control.
7.14 SPECIFIC PERFORMANCE. If either party threatens to take any action
in violation of the terms of this Agreement, the other party may apply to any
court of competent jurisdiction for an injunctive order prohibiting such
proposed action. Either party may institute and maintain any action or
proceeding against the other party to compel the specific performance of this
Agreement. The party against which such action or proceeding is brought hereby
waives the claim or defense that an adequate remedy at law exists, and such
party will not urge in any such action or proceeding the claim or defense that
such remedy at law exists.
7.15 ARBITRATION. Except as provided in Section 7.14, all disputes
arising under this Agreement that are not settled by the parties will be
submitted to binding arbitration under the then existing Commercial Arbitration
Rules of the American Arbitration Association. Arbitration proceedings will be
held in Denver, Colorado, or such other location agreed to by the parties. The
parties to the arbitration may agree on an arbitrator; otherwise, there will be
a panel of three arbitrators, one named in writing by each party within 20 days
after any party serves a notice of arbitration and the third arbitrator named by
the two arbitrators named by the parties. No person financially interested in
this Agreement or any party may serve as an arbitrator. The costs of the
arbitration and the fees of the arbitrator or arbitrators will be borne by the
non-prevailing party, unless the arbitrator provides otherwise in its decision.
The decision of the arbitrator or arbitrators will be final and conclusive and
binding on all the parties, and judgment thereon may be entered in any Colorado
court of competent jurisdiction.
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7.16 FURTHER ACTIONS. The parties will execute and deliver all documents,
provide all information, and take or forbear from all actions that may be
necessary or appropriate to achieve the purposes of this Agreement.
7.17 CONFIDENTIALITY.
(a) DEFINITION. "CONFIDENTIAL INFORMATION" means any information
marked, noticed, or treated as confidential by a party which such party holds in
confidence, including all trade secret, technical, business, or other
information, including customer or client information, however communicated or
disclosed, relating to past, present and future research, development and
business activities.
(b) OBLIGATIONS. Except with the prior consent of the disclosing
party, each party will:
(i) limit access to the Confidential Information of the
other party disclosed to such party hereunder to its employees, agents,
representatives, and consultants who have a need-to-know;
(ii) advise its employees, agents, representatives, and
consultants having access to such Confidential Information of the proprietary
nature thereof and of the obligations set forth in this Agreement; and
(iii) safeguard such Confidential Information by using a
reasonable degree of care to prevent disclosure of the Confidential Information
to third parties, but not less than that degree of care used by that party in
safeguarding its own similar information or material.
(c) EXCEPTIONS TO CONFIDENTIALITY. A party's obligations
respecting confidentiality under Section 7.17 will not apply to any of the
Confidential Information of the other party that a party can demonstrate: (i)
was, at the time of disclosure to it, in the public domain; (ii) after
disclosure to it, is published or otherwise becomes part of the public domain
through no fault of the recipient; (iii) was in the possession of the recipient
at the time of disclosure to it without being subject to any obligation of
confidentiality; (iv) was received after disclosure to it from a third party
who, to its knowledge, had a lawful right to disclose such information to it;
(v) was independently developed by the recipient without reference to the
Confidential Information; (vi) was required to be disclosed to any regulatory
body having jurisdiction over a party or any of their respective clients; or
(vii) was required to be disclosed by reason of legal, accounting, or regulatory
requirements beyond the reasonable control of the recipient. In the case of any
disclosure pursuant to clauses (vi) or (vii) of this paragraph (c), to the
extent practical, the recipient will give prior notice to the disclosing party
of the required disclosure and will use commercially reasonable efforts to
obtain a protective order covering such disclosure.
(d) SURVIVAL. The provisions of this Section 7.17 will survive the
expiration or termination of this Agreement, regardless of the reason for such
expiration or termination.
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This Agreement is signed by the parties as of the Effective Date.
COMPANY:
DISCOVERY HOLDING COMPANY, A
DELAWARE CORPORATION
By:
----------------------
Name:
Title:
PROVIDER:
LIBERTY MEDIA CORPORATION, A
DELAWARE CORPORATION
By:
----------------------
Name:
Title:
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APPENDIX A
DEFINITIONS
A.1 DEFINED TERMS. The following terms will have the following meanings
for all purposes of this Agreement:
"AFFILIATE" means, with respect to any Person, any other Person
controlling, controlled by, or under common control with such Person, with
"control" for such purpose meaning the possession, directly or indirectly, of
the power to direct or cause the direction of the management and policies of a
Person, whether through the ownership of voting securities or voting interests,
by contract, or otherwise. In addition, DCI will be considered an Affiliate of
the Company for purposes of Section 1.5 only. For the avoidance of doubt, after
the Spin Off, the Company and its subsidiaries will not be deemed to be
Affiliates of LMC, and LMC and its subsidiaries will not be deemed to be
Affiliates of the Company, for any purposes of this Agreement.
"PERSON" means any natural person, corporation, limited liability company,
partnership, trust, unincorporated organization, association, governmental
authority, or other entity.
A.2 OTHER DEFINITIONS. The following terms will have the meanings for
all purposes of this Agreement set forth in the Section reference provided next
to such term:
DEFINITION SECTION REFERENCE
---------- -----------------
Agreement Preamble
Allocated Employee Expenses 2.1(a)
Bankruptcy Event 3.3
Bankruptcy Proceeding 3.3
Change in Control 3.3
Company Preamble
Company Business Recitals
Company Indemnitees 6.1
Confidential Information 7.17
DCI 1.5
Effective Date Preamble
Indemnitee 6.3(a)
Indemnitor 6.3(a)
Initial Term 3.1
Look-Back Period 4.3
Losses 6.1
Provider Preamble
Provider Employees 4.1
Provider Indemnitees 6.2
Renewal Term 3.1
Services 1.2(b)
Spin Off Recitals
Transaction 3.3
Schedule 2.1
