DISTRIBUTION AND RESTRICTED PROCEEDS AGREEMENT
Exhibit 2
DISTRIBUTION AND RESTRICTED PROCEEDS AGREEMENT
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PARTIES: |
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Xxx Xxxxxxx Irrevocable Trust, created under Agreement creating the Xxxxxxx Family Irrevocable Trusts, dated March 29, 1996, by Xxx Xxxxxxx, as Grantor and initial trustee (the “Xxx Trust”); and |
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The Estate of Xxx X. Xxxxxxx (the “Bob Estate”). |
RECITALS:
Deutsche Bank Trust Company Americas (the “Bank”) and the Bob Estate are parties to that certain Restated Demand Note dated October 15, 2002 (the “Note”). Capitalized terms used in this Agreement without definition shall have the meanings given to them in the Note.
Concurrent with this Agreement, the Bob Estate and the Xxx Trust intend to enter into the Stock Exchange Agreement dated February 25, 2004 (the “Exchange Agreement”) among the Bob Estate, Xxxx Xxxxxxx, Xxxxxxx Securities LLC and GMag LLC, the Xxx Trust, three other trusts, and Liberty Media Corporation (“Liberty”), pursuant to which Liberty will deliver to the Bob Estate certain shares of Liberty’s Series A common stock, par value $.01 per share (the “Series A common stock”) in exchange for Series B common stock of Liberty (the “Exchange”).
Following the execution of this Agreement, the Xxx Trust and the Bank intend to enter into a Promissory Note, Guaranty and Pledge Agreement (collectively, the “Xxx Xxxx”) pursuant to which the Bank will agree to loan the Xxx Trust $40 million, in accordance with the terms agreed upon by the Bank and the Xxx Trust.
The Xxx Trust wishes to have the Bob Estate:
1. execute an Authorization Agreement in a form acceptable to the Bank (the “Authorization Agreement”), pursuant to which the Bob Estate will agree, when and if the Exchange is consummated, to distribute to the Xxx Trust 8,560,500 shares of Series A common stock (the “Shares”); and
2. execute a Guarantee Agreement in a form acceptable to the Bank providing for a guarantee by the Bob Estate of the Xxx Xxxx from the date of the Closing of the Exchange until such time as the Bank and the Bob Estate agree such guarantee is no longer necessary (the “Bob Guarantee”).
The Bob Estate wishes to have the Xxx Estate to enter into a Pledge Agreement and Guarantee Agreement (collectively, the “Pledge and Guarantee Agreements”) in a form acceptable to the Bank pursuant to which the Xxx Estate will guarantee of $30 million of the outstanding debt of the Bob Estate on the Note (“Xxx Gurantee”)
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pursuant to which certain Shares and the proceeds thereof will be pledged to the Bank as security for the Xxx Guarantee.
In consideration of the mutual agreements, representations, warranties and covenants contained in this Agreement, and in consideration of the Xxx Trust and Bob Estate entering into the Exchange Agreement, the parties represent, warrant and agree, on the terms and conditions set forth below, as follows:
ARTICLE 1. OWNERSHIP OF SHARES
After distribution to the Xxx Trust as provided below and except to the extent set forth in the Pledge and Gurantee Agreements and the Xxx Guarantee, (1) the Shares and all proceeds thereof, shall be the property of the Xxx Trust, unless and until delivered to the Bank pursuant to this Agreement, (2)the Xxx Trust shall have and own all income and all dividends payable with respect to the Shares, and (3) the Bob Estate shall have no ownership or other rights or interests in the Shares or any gain, loss or income regarding the Shares or any proceeds thereof.
ARTICLE 2. REPRESENTATION, WARRANTY AND COVENANTS OF THE BOB ESTATE
Section 2.1 Valid Agreement. The Bob Estate hereby represents and warrants to the Xxx Trust that this Agreement has been duly and validly executed and delivered by the Bob Estate and, assuming the due execution and delivery hereof by each other party hereto, is a valid and binding obligation of the Bob Estate, enforceable against the Bob Estate in accordance with its respective terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting the rights of creditors generally and by general principles of equity.
Section 2.2 Distribution of Shares. When and if the Exchange is consummated under the Exchange Agreement, the Bob Estate shall, immediately after consummation of the Exchange (and not before or concurrently with), assign, transfer and deliver the Shares to the Xxx Trust (the “Distribution”), all in accordance with the Authorization Agreement.
Section 2.3 Ancillary Agreements.
(a) The Bob Estate will negotiate in good faith with the Bank and will execute and deliver to the Bank the Authorization Agreement and the Bob Guarantee covering the subject matters stated in the Recitals above.
(b) The Bob Estate will negotiate in good faith with the Xxx Trust and will execute and deliver to the Xxx Trust an Indemnification and Contribution Agreement covering the subject matters contained in the draft Indemnification and Contribution Agreement attached hereto as Exhibit A.
Section 2.4 Amendment of the Exchange Agreement. The Bob Estate will not (a) approve of or consent to any amendment of the Exchange Agreement as in effect upon execution thereof, (b) approve of or consent to, or take action, to terminate the
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Exchange Agreement or (c) grant any waivers regarding any terms or provisions of the Exchange Agreement, that, in any case, materially affects the rights and obligations of the Xxx Trust (or any of its beneficiaries) unless both the Bob Estate and the Xxx Trust approve in writing of such amendment, termination or waiver.
ARTICLE 3. REPRESENTATION, WARRANTY AND COVENANTS OF THE XXX TRUST
Section 3.1 Valid Agreement. The Xxx Trust hereby represents and warrants to the Bob Estate that this Agreement has been duly and validly executed and delivered by the Xxx Trust and, assuming the due execution and delivery hereof by each other party hereto, is a valid and binding obligation of the Xxx Trust, enforceable against the Xxx Trust in accordance with its respective terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting the rights of creditors generally and by general principles of equity.
Section 3.2 Placement of Shares. The Xxx Trust will place the Shares in an account at the Bank and will comply with its obligations under the Pledge and Guarantee Agreements and the Xxx Guarantee.
Section 3.3 Ancillary Agreements.
(a) The Xxx Trust will negotiate in good faith with the Bank and execute and deliver to the Bank the Pledge and Guarantee Agreements covering the subject matters stated in the Recitals above.
(b) The Xxx Trust will negotiate in good faith with the Bob Estate and will execute and deliver to the Bob Estate an Indemnification and Contribution Agreement covering the subject matters contained in the draft Indemnification and Contribution Agreement attached hereto as Exhibit A.
ARTICLE 4. INVESTMENT OF RESTRICTED PROCEEDS
Section 4.1 Investment Vehicles. The Xxx Trust may invest and reinvest the the Shares and any proceeds thereof from time to time in (a) stock of Liberty, (b) obligations of, or guaranteed by, the United States Government or any agency thereof, or (c) time deposits, federally insured money-market funds, or certificates of deposit issued by the Bank.
Section 4.2 Interest. Subject to the terms and conditions of the Pledge and Guarantee Agreements, the Xxx Trust shall be permitted to distribute any interest income earned by or on the Shares or the proceeds thereof to the Xxx Trust’s beneficiaries.
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ARTICLE 5. BANK PAYMENTS
Section 5.1 Other Circumstances. At any time, the Xxx Trust may, in its sole discretion, pay all or any portion of the proceeds of the Shares to the Bank, to be applied toward the amounts owed by the Bob Estate to the Bank under the Note, but allocable to the Xxx Trust. Any payment made under this Section 5.2 will reduce the amount of the Xxx Guarantee on a dollar-for-dollar basis.
ARTICLE 6. TERMINATION
This Agreement shall terminate upon the earliest of (a) payment in full of the Note by the Bob Estate, (b) the payment to the Bank of $30 million by the Xxx Trust pursuant to Section 5.1or (c) the termination of the Exchange Agreement with respect to the Bob Estate without a closing thereunder of the Exchange by the Bob Estate.
ARTICLE 7. MISCELLANEOUS
Section 7.1 Notices. Any notice or other communication required or permitted under this Agreement shall be in writing and shall be delivered personally, sent by facsimile transmission, overnight, certified, registered or express mail, postage prepaid. Any such notice shall be deemed given when delivered if so delivered personally, by facsimile transmission, or by overnight mail or, if mailed, three business days after the date of deposit in the United States mails, as follows:
if to the Xxx Trust to: |
If to the Bob Estate, to: |
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Xxx Xxxxxxx Irrevocable
Trust |
The Estate of Xxx X.
Xxxxxxx |
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with a copy to: |
with a copy to: |
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Xxxxx X. Xxxxxxxx, Esq. |
Xxxxxx X. Xxxxx, Esq. |
Any party may, by notice given in accordance with this Section to the other parties, designate another address or person for receipt of notices hereunder.
Section 7.2 Entire Agreement. This Agreement contains the entire agreement among the parties with respect to the transactions described herein, and supersedes all prior agreements, written or oral, with respect to the subject matter of this Agreement.
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Section 7.3 Waivers and Amendments; Non-Contractual Remedies. This Agreement may be amended, superseded, canceled, renewed or extended, and the terms of this Agreement may be waived, only by a written instrument signed by the parties or, in the case of a waiver, by the party against whom the waiver is sought to be enforced. No waiver on the part of any party of any right, power or privilege, nor any single or partial exercise of any such right, power or privilege, shall preclude any further exercise thereof or the exercise of any other such right, power or privilege. The rights and remedies provided in this Agreement are cumulative and are not exclusive of any rights or remedies that any party may otherwise have at law or in equity.
Section 7.4 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Colorado, other than such laws, rules, regulations and case law that would result in the application of the laws of a jurisdiction other than the State of Colorado.
Section 7.5 Binding Effect; Assignment. This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and assigns and legal representatives. This Agreement is assignable by any of the parties upon written notice by the assigning party to the remaining parties.
Section 7.6 Counterparts; Facsimile Signatures. This Agreement may be executed in separate counterparts, and may be delivered by facsimile, each of which when so executed and delivered shall be deemed an original, but all of which shall together constitute one and the same instrument.
Section 7.7 Headings. The headings in this Agreement are for reference only, and shall not affect the interpretation of this Agreement.
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IN WITNESS WHEREOF, this Agreement has been executed and delivered on behalf of each of the parties hereto as of the day and year last written below.
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Xxx Xxxxxxx Irrevocable Trust, created under Agreement creating the Xxxxxxx Family Irrevocable Trusts, dated March 29, 1996, by Xxx Xxxxxxx, as Grantor and initial trustee |
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The Estate of Xxx X. Xxxxxxx |
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By: |
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/s/ Xxxx Xxxxxxx |
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Xxxx Xxxxxxx, Personal Representative |
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By: |
/s/ Xxxxxxx Xxxxxxx |
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Date: |
February 25, 2004 |
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Xxxxxxx Xxxxxxx, Trustee |
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Date: |
February 25, 2004 |
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By: |
/s/ Xxxxxxx Xxxxxxxx |
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Xxxxxxx Xxxxxxxx, Trustee |
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Date: |
February 25, 2004 |
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By: |
/s/ Xxxx Xxxxxxx |
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Xxxx Xxxxxxx, Trustee |
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Date: |
February 25, 2004 |
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EXHIBIT A TO
DISTRIBUTION AND RESTRICTED PROCEEDS AGREEMENT
Draft of Indemnification and Contribution Agreement
(See Attached)
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