1
TERMINATION TO SHAREHOLDER AGREEMENT
This TERMINATION TO SHAREHOLDER AGREEMENT (this "Agreement"), dated as of
June 11, 1997, is made and entered into by and among M.G. "Xxx" Xxxxxxxxx ("Xxx
Xxxxxxxxx"), individually and as trustee of the Xxxxxxxxx Charitable Remainder
Unitrust, u/t/a/ dated January 22, 1990 (the "PR Charitable Trust"), Xxxxxxx X.
Xxxxxxxxx ("Xxx Xxxxxxxxx"), individually and as trustee of the Xxxxxxx and Xxxx
Xxxxxxxxx Children's Trust, u/t/a/ dated September 18, 1995 (the "TR Family
Trust"), The Christian Broadcasting Network, Inc., a Virginia corporation
("CBN"), Liberty IFE, Inc., a Colorado corporation ("LIFE"), and International
Family Entertainment, a Delaware corporation (the "Company")
RECITALS
WHEREAS, the parties have entered into that certain Amended and Restated
Shareholder Agreement, dated as of September 1, 1995, which provides, inter
alia, for the grant to LIFE of certain rights of first refusal with respect to
sales of Class A Common Stock, par value $0.01 per share, of the Company (the
"Class A Stock"), the grant to LIFE and CBN of certain go along rights, the
grant to LIFE of a put option, the grant to LIFE and CBN of certain registration
rights, the covenant by the Company to issue no additional shares of Class A
Stock, and the grant to Xxx Xxxxxxxxx, Xxx Xxxxxxxxx, the PR Charitable Trust,
LIFE and CBN of certain preemptive rights (the "Shareholder Agreement");
WHEREAS, it is intended that Xxx Xxxxxxxxx, individually and as trustee of
the PR Charitable Trust, and as trustee of the Xxxxxx X. Xxxxxxxxx Irrevocable
Trust, u/t/a dated December 18, 1996, the Xxxxxxxxx X. Xxxxxxxx Irrevocable
Trust, u/t/a dated December 18, 1996, and the Xxx X. Xxxxxxx Irrevocable Trust,
u/t/a/ dated December 18, 1996 (the Xxxxxx X. Xxxxxxxxx Irrevocable Trust, the
Xxxxxxxxx X. Xxxxxxxx Irrevocable Trust and the Xxx X. Xxxxxxx Irrevocable
Trust, together, the "Irrevocable Trusts"), Xxxx X. Xxxxxxxxx and Xxx Xxxxxxxxx,
as joint tenants, Xxx Xxxxxxxxx, individually, and as trustee of each of the TR
Family Trust and the Xxxxxxx X. Xxxxxxxxx Charitable Trust, u/t/a/ dated
December 30, 1996 (the "TR Charitable Trust"), and as custodian to and for
each of Xxxxxxx X. Xxxxxxxxx, Xxxxx X. Xxxxxxxxx, Xxxxxxxxx X. Xxxxxxxxx, Xxxxxx
X. Xxxxxxxxx and Xxxxxxxx X. Xxxxxxxxx under the Virginia Uniform Transfers to
Minors Act (Xxx Xxxxxxxxx, the PR Charitable Trust, the Irrevocable Trusts, Xxxx
X. Xxxxxxxxx, Xxx Xxxxxxxxx, the TR Family Trust and the TR Charitable Trust,
collectively, the "Robertsons"), and Fox Kids Worldwide, Inc., a Delaware
corporation ("FKWW") enter into that certain Stock Purchase Agreement, pursuant
to which FKWW will agree, on the terms and subject to the conditions therein, to
purchase from the Robertsons those shares of Class A Stock, in the form of Class
B Common Stock, par value $0.01 per share, of the Company (the "Class B Stock")
issuable upon the conversion thereof,
2
and shares of Class B Stock owned by the Robertsons (as amended from time to
time in accordance with its terms, the "Xxxxxxxxx Purchase Agreement");
WHEREAS, it is intended that CBN and FKWW enter into that certain Stock
Purchase Agreement, pursuant to which FKWW will agree, on the terms and subject
to the conditions therein, to purchase from CBN those shares of Class B Stock
owned by CBN (as amended from time to time in accordance with its terms, the
"CBN Purchase Agreement");
WHEREAS, it is intended that Regent University, a Virginia corporation
("Regent") and FKWW enter into that certain Stock Purchase Agreement, pursuant
to which FKWW will agree, on the terms and subject to the conditions therein, to
purchase from Regent those shares of Class B Stock owned by Regent (as amended
from time to time in accordance with its terms, the "Regent Purchase
Agreement");
WHEREAS, it is intended that FKWW, Liberty Media Corporation, a Delaware
corporation, and LIFE enter into that certain Contribution and Exchange
Agreement (as amended from time to time in accordance with its terms, the
"Contribution Agreement"), pursuant to which LIFE will agree, on the terms and
subject to the conditions therein, to contribute its shares of Class C Common
Stock, par value $0.01 per share, of the Company and its $23 million principal
amount of 6% Convertible Secured Notes due 2004 of the Company (the "Notes"), to
FKWW (the "Contribution") in exchange for shares of Series A Preferred Stock of
FKWW;
WHEREAS, in connection with the execution of the Contribution Agreement,
LIFE and CBN have executed that certain Waiver, dated as of the date hereof (the
"Waiver"), which, subject to its terms and conditions, waives certain rights
under the Shareholder Agreement;
WHEREAS, as a condition to its willingness to enter into the Agreement and
Plan of Merger, dated as of the date hereof, by and among FKWW, Fox Kids Merger
Corporation, a Delaware corporation and wholly-owned subsidiary of FKWW, and the
Company (the "Merger Agreement"), the Xxxxxxxxx Purchase Agreement, the CBN
Purchase Agreement, the Regent Purchase Agreement and the Contribution
Agreement, FKWW has required that the parties agree to terminate the Shareholder
Agreement by entering into this Agreement; and
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration given to each party hereto, the receipt of which is
hereby acknowledged, the parties agree as follows.
1. Termination. Effective upon (but not prior to) the earlier of (i) the
closing of the Contribution under the Contribution Agreement and (ii) the
Effective Time of the Merger (as defined in the Merger Agreement), each and
every provision of the Shareholder Agreement shall be terminated in full and
from and after such date the Shareholder Agreement shall be void and of no
further force and effect, and the rights and obligations of the parties
thereunder shall
2
3
terminate. If both the Xxxxxxxxx Purchase Agreement and the Merger Agreement
shall be terminated, this Agreement shall thereupon terminate and be of no
effect, unless the termination pursuant to this provision has already become
effective.
2. Miscellaneous.
2.1 Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns. Other than as set forth in the immediately succeeding sentence, no
party may assign any of its rights, or delegate any of its duties or obligation
hereunder, under this Agreement without the prior written consent of the other
parties, and any such purported assignment or delegation shall be void ab
initio.
2.2 Dispute Resolution. Any dispute or claim arising hereunder shall
be settled by arbitration. Any party may commence arbitration by sending a
written notice of arbitration to the other party. The notice will state the
dispute with particularity. The arbitration hearing shall be commenced thirty
(30) days following the date of delivery of notice of arbitration by one party
to the other, by the American Arbitration Association ("AAA") as arbitrator. The
arbitration shall be conducted in Alexandria, Virginia in accordance with the
commercial arbitration rules promulgated by AAA, and each party shall retain the
right to cross-examine the opposing party's witnesses, either through legal
counsel, expert witnesses or both. The decision of the arbitrator shall be
final, binding and conclusive on all parties (without any right of appeal
therefrom) and shall not be subject to judicial review. As part of his decision,
the arbitrator may allocate the cost of arbitration, including fees of attorneys
and experts, as he or she deems fair and equitable in light of all relevant
circumstances. Judgment on the award rendered by the arbitrator may be entered
in any court of competent jurisdiction.
2.3 Governing Law. This Agreement shall be governed by and construed
both as to validity and performance and enforced in accordance with the laws of
the Commonwealth of Virginia without giving effect to the choice of law
principles thereof.
2.4 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
2.5 Headings. The section and subsection headings contained in this
Agreement are included for convenience only and form no part of the agreement
between the parties.
2.6 Amendments. This Agreement may not be modified, amended, altered
or supplemented, except upon the execution and delivery of a written agreement
executed by the parties hereto.
3
4
2.7 No Third Party Beneficiaries. This Agreement is not intended to
benefit, and shall not run to the benefit of or be enforceable by, any other
person or entity other than the Parties hereto and their permitted successors
and assigns.
[REMAINDER OF PAGE LEFT INTENTIONALLY BLANK]
4
5
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
/s/ X.X. Xxxxxxxxx
-----------------------------------
M.G. "Xxx" Xxxxxxxxx
THE XXXXXXXXX CHARITABLE REMAINDER
UNITRUST
/s/ X.X. Xxxxxxxxx
-----------------------------------
By: M.G. "Xxx" Xxxxxxxxx, as Trustee
/s/ Xxxxxxx Xxxxxxxxx
-----------------------------------
Xxxxxxx X. Xxxxxxxxx
THE XXXXXXX AND XXXX XXXXXXXXX
CHILDREN'S TRUST
/s/ Xxxxxxx Xxxxxxxxx
-----------------------------------
By: Xxxxxxx Xxxxxxxxx, as Trustee
THE CHRISTIAN BROADCASTING
NETWORK, INC.
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------------
Its: President
-----------------------------------
LIBERTY IFE, INC.
By: /s/ Xxxxx Xxxx
-----------------------------------
Its:
-----------------------------------
[SIGNATURES CONTINUED ON NEXT PAGE)
6
INTERNATIONAL FAMILY
ENTERTAINMENT, INC.
By: /s/ X. X. Xxxxxxxxx
-----------------------------------
Its: Chairman of the Board
-----------------------------------
