EXHIBIT 2
CALL AGREEMENT
AGREEMENT, dated as of February 9, 1998, between
Tele-Communications, Inc., a Delaware corporation ("TCI"), and Xxxx Xxxxxxx,
a resident of Colorado, both in any Representative Capacity (as defined
below) and individually ("Xxxx"), Xxx Xxxxxxx, a resident of Colorado, both
in any Representative Capacity 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.
WHEREAS, TCI desires to have the right to acquire all of the
shares of its Common Stock, $1.00 par value per share, of any series that has
voting rights greater than one vote per share, that are beneficially owned by
the other parties to this Agreement; and
WHEREAS, each such other party, for himself and his successors
(including his estate upon his death), desires to grant such right to TCI;
NOW, THEREFORE, in consideration of the premises and for other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
1. Definitions.
1.1 Certain Definitions.
"Affiliate" means, when used with reference to a specified Person, any
Person that directly or indirectly through one or more intermediaries
Controls, is Controlled by or is under common Control with, such specified
Person.
"Agreement" means this Call Agreement, as the same may be amended or
supplemented from time to time.
"beneficially own" has the meaning ascribed thereto in Rule 13d-3 under
the Exchange Act, as interpreted by the Securities and Exchange Commission,
provided that a Person shall be deemed to have beneficial ownership of all
securities that such Person has a right to acquire without regard to the 60
day limitation in such Rule, and except that a Person shall not be deemed a
beneficial owner of, or to own beneficially, any securities as to which such
Person does not, directly or indirectly, have or share investment power
within the meaning of said Rule. The terms beneficially owned, own
beneficially and beneficial owner shall have correlative meanings.
"Xxxxx Estate" has the meaning given to it in the introductory paragraph
of this Agreement.
"Board of Directors" means the Board of Directors of the Company, or any
authorized committee thereof.
"Bob Estate" has the meaning given to it in the introductory paragraph
of this Agreement.
"Bona Fide Offer" has the meaning set forth in Section 2.3(b)(i) hereof.
"Call Period" has the meaning set forth in Section 2.2(b) hereof.
"Call Right" has the meaning set forth in Section 2.2(a) hereof.
A "Change of Control" shall have occurred with respect to the Company if:
(i) a merger or consolidation occurs between the Company and any
other Person in which the voting power of all voting securities of the
Company 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 the
surviving entity outstanding immediately after such merger or consolidation
(or if the Company 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
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 merger or
consolidation); or
(ii) in any share exchange, extraordinary dividend, acquisition,
disposition or recapitalization (or series of related transactions of such
nature) (other than a merger or consolidation) the holders of voting
securities of the Company immediately prior thereto continue to own
beneficially voting securities representing less than 50% of the voting
power of the Company (or any successor entity) immediately thereafter.
"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.
"Close of Business" means 5:00 p.m. local time in Denver, Colorado.
"Closing" has the meaning set forth in Section 4.1(a) hereof.
"Closing Date" has the meaning set forth in Section 4.1(a) hereof.
"Closing Date Amount" has the meaning set forth in Section 2.2(d) hereof.
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"Code" means the Internal Revenue Code of 1986, as amended, and the rules
and regulations from time to time promulgated thereunder.
"Commencement Date" has the meaning set forth in Section 2.3(c)(i) hereof.
"Common Stock" means the Common Stock, $1.00 par value per share, of the
Company, as constituted on the date of this Agreement, and any capital stock
into which such Common Stock may thereafter be changed (whether as a result
of a recapitalization, reorganization, merger consolidation, share exchange,
stock dividend or other transaction or event). The Common Stock currently is
issuable in series.
"Company" means Tele-Communications, Inc., a Delaware corporation, and
any successor (by merger, consolidation, sale, transfer, exchange, or
otherwise) to all or substantially all of its business and assets.
"Company Notice" has the meaning set forth in Section 2.2(b) hereof.
"Company Price" has the meaning set forth in Section 2.3(b)(ii) hereof.
"Control", as to any Person, means 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. "Controlled" and
"Controlling" shall have corresponding meanings.
"Current Market Price" of any security on any day means (i) the last
reported sale price (or, if no sale is reported, the average of the high and
low bid prices) on The Nasdaq Stock Market on such day, or (ii) if the
primary trading market for such security is not The Nasdaq Stock Market, then
the closing sale price regular way on such day (or, in case no such sale
takes place on such day, the reported closing bid price regular way on such
day) in each case on the New York Stock Exchange, or, if such security is not
listed or admitted to trading on such exchange, then on the principal
exchange on which such security is traded, or (iii) if the Current Market
Price of such security on such day is not available pursuant to one of the
methods specified above, then the average of the bid and asked prices for
such security on such day as furnished by any New York Stock Exchange member
firm selected from time to time by the Board of Directors for that purpose.
"Difference" has the meaning set forth in Section 3.2(b) hereof.
"Disposition" means any sale, assignment, alienation, gift, exchange,
conveyance, transfer, hypothecation or other disposition whatsoever, whether
voluntary or involuntary and whether direct or indirect. The term "dispose"
(whether or not capitalized) shall mean to make a Disposition.
"Election Notice" has the meaning set forth in Section 2.3(b)(iii).
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"Excepted Shares" means, subject to the last two sentences of this
definition, that number of Member Shares which, in the aggregate for all
Members, is equal to five percent (5%) of the largest total number
(calculated without duplication) of Member Shares beneficially owned
collectively by all Members at any time during the period from and after the
date of this Agreement until this Agreement shall no longer be in effect.
For purposes of determining the total number of Member Shares beneficially
owned by the Member at any time of determination during such period, the
Members shall be deemed to own all Member Shares actually beneficially owned
by them at such time and also to continue to beneficially own all Member
Shares, if any, sold or otherwise disposed of without violation of this
Agreement at any time prior to such time of determination, so that such
number of Member Shares as of any time of determination shall be calculated
as though the Members at all times continued to beneficially own all Member
Shares that they beneficially owned at any time during such period, without
deduction of any Member Shares that were disposed of at any time during that
period and in each case without duplication. In the event that the Company
(i) pays a dividend or distribution on the outstanding High Vote Stock in
shares of High Vote Stock, (ii) subdivides the outstanding High Vote Stock
into a greater number of shares of High Vote Stock, (iii) combines the
outstanding shares of High Vote Stock into a smaller number of shares of High
Vote Stock or (iv) issues by reclassification of or other change in the High
Vote Stock (whether pursuant to a merger or consolidation or otherwise) any
other shares of High Vote Stock, then (A) any such shares of High Vote Stock
received by any Member in exchange for or replacement of the Excepted Shares
shall themselves be Excepted Shares and (B) calculations of the number of
Excepted Shares as of any time pursuant to the first sentence of this
definition shall take appropriate account of such event.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exempt Transfer" means, with respect to any Member Shares of any
Member, any Disposition:
(i) that is a Permitted Pledge;
(ii) that is an exchange of Low Vote Stock of any class or series for
High Vote Stock of the corresponding class or series on a one-for-one basis
(but such High Vote Stock will continue to be Member Shares);
(iii) of Tag-Along Shares (as defined in the Xxxxxx Call Agreement)
pursuant to the Xxxxxx Call Agreement and Section 4.1 of the Stockholders
Agreement;
(iv) pursuant to Section 2.2 hereof;
(v) to another Member;
(vi) to a member of the Xxxxxx Group;
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(vii) that is an exchange or conversion of such Member Shares
that occurs by operation of law in connection with a merger or
consolidation of the Company with or into another corporation or a
reclassification or similar event, that has been duly authorized and
approved by the required vote of the Board of Directors and the
stockholders of the Company pursuant to its Restated Certificate of
Incorporation and Delaware law; provided, however, that any shares of
capital stock issued in exchange for or in reclassification of such
Member Shares or into which such Member Shares are converted in any
such transaction shall continue to be Member Shares for purposes of
this Agreement unless such transaction resulted in a Change of Control
of the Company;
(viii) to a Prospective Purchaser in compliance with subsections (a)
through (e), inclusive, of Section 2.3 hereof;
(ix) pursuant to Section 2.3(f) hereof;
(x) that is a gift or assignment for no consideration by such
Member (if a natural person) during his life to any one or more of his
Related Parties;
(xi) that is a transfer to the legal representatives of such Member
(if a natural person) 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;
(xii) subject to subsections (a) through (e), inclusive, of Section
2.3 hereof, pursuant to 4.2 of the Stockholders Agreement; or
(xiii) in the case of a pledge that when made qualified, and that
continues to qualify, as a Permitted Pledge, a bona fide transfer to
the pledgee or its nominee upon the bona fide exercise of such
pledgee's rights and remedies under such pledge, but not any further
transfer by such assignee except in an Exempt Transfer (including a
transfer permitted by Section 2.3 hereof); provided, however, that no
Disposition pursuant to clause (v), (x), (xi) or (xiii) shall be an
Exempt Transfer unless each Person to whom any such Disposition is made
(unless already such a party and so bound) simultaneously therewith
becomes a party to this Agreement and the Stockholders Agreement and
agrees to be bound hereby and thereby with respect to such Member Shares
to the same extent as such Member.
"Exercise Date" has the meaning set forth in Section 2.2(b) hereof.
"Free to Sell Date" has the meaning set forth in Section 2.3(b)(v) hereof.
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"Xxxx" has the meaning assigned to such term in the introductory
paragraph of this Agreement.
"Grant Consideration Amount" has the meaning set forth in Section 2.1
hereof.
"Gross Purchase Price" has the meaning set forth in Section 2.2(c) hereof.
"Gross Stock Value" has the meaning set forth in Section 2.2(d) hereof.
"Group" means either the Xxxxxxx Group or the Xxxxxx Group (as defined in
the Stockholders Agreement), as the context requires.
"High Vote Stock" means Common Stock of any series that has voting
rights greater than one vote per share. The High Vote Stock is currently
comprised of the Series B TCI Group Common Stock, Series B LMG Common Stock
and Series B Ventures Group Common Stock.
"Holder" has the meaning set forth in Section 2.2(b) hereof.
"Holder Election Notice" has the meaning set forth in Section 2.2(d)
hereof.
"Independent Committee" means a committee of the Board of Directors
consisting of directors other than a Member, any Permitted Transferee, or any
Related Party of any Member or any such Permitted Transferee.
"Xxx" has the meaning assigned to such term in the introductory
paragraph of this Agreement.
"Low Vote Stock" means Common Stock of any series that has voting rights
no greater than one vote per share. The Low Vote Stock is currently comprised
of Series A TCI Group Common Stock, Series A LMG Common Stock and Series A
Ventures Group Common Stock.
"Xxxxxxx Group" shall mean (i) each of Xxxx (individually and in any
Representative Capacity), Xxx (individually and in any Representative
Capacity), the Bob 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 become 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 Stock in a transaction or a
chain of transactions initiated by another member of the Xxxxxxx Group that
satisfy all applicable provisions of this Agreement (including, in the case
of a Permitted Pledge, the provisions of the definition of such term), except
for acquisitions in Exempt Transfers other than those described in clauses
(v), (x), or (xi) or (xiii) of the definition of "Exempt Transfer" in Section
1.1 hereof 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
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of its Related Parties is the direct or indirect Beneficial Owner of any High
Vote Stock. Unless Xxxxxx (or his estate), the Company and the Xxxxxxx Group
Representative otherwise agree in writing, no member of the Xxxxxx Group
shall be a member of the Xxxxxxx Group or a Related Party of any Member.
"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 initial Xxxxxxx Group
Representative is Xxx. The Xxxxxxx Group may, at any time by a written
notice delivered to the Company and the members of the Xxxxxx Group, remove
and replace the Person then serving as Xxxxxxx Group Representative, provided
that such representative shall at all times be a natural person and a member
of the Xxxxxxx Group.
"Xxxxxx" means Xxxx X. Xxxxxx, a resident of Colorado.
"Xxxxxx Call Agreement" means the Call Agreement, dated as of the date
hereof, between the Company, Xxxxxx and Xxxxxx Xxxxxx, as it may be amended
from time to time.
"Member" means any member of the Xxxxxxx Group.
"Member Shares" means, with respect to any Member, any and all shares of
High Vote Stock beneficially owned by such Member on the date hereof or of which
beneficial ownership is hereafter acquired by such Member or by any Permitted
Transferee from such Member or from another Permitted Transferee.
"Net Proceeds" has the meaning set forth in Section 3.2(a) hereof.
"Offered Shares" has the meaning set forth in Section 2.3(b)(i) hereof.
"Offering Period" has the meaning set forth in Section 3.2(a) hereof.
"Offer Notice" has the meaning set forth in Section 2.3(b)(ii) hereof.
"Permitted Pledge" means, with respect to any Member Shares, a bona fide
pledge of such Member Shares by the Member who beneficially owns them to an
unaffiliated commercial bank or financial institution to secure bona fide
borrowings by such Member permitted by applicable law; provided that such
bank or financial institution (for itself and its successors, assigns and
transferees) agrees with the Company in writing at the time of such pledge
that all such Member Shares shall continue to be subject to all of the
provisions of this Agreement and the Stockholders Agreement to the same
extent and with the same effect as if they continued to be beneficially owned
solely by such Member, other than those Member Shares, if any, as to which
such bank or other financial institution commences an action to foreclose or
takes any other action to enforce the security interest represented by such
pledge, irrevocably commits to the Company in writing (for itself and its
successors, assigns and transferees) to convert into shares of Low Vote Stock
on a share-for-share
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basis and (provided the Company cooperates as set forth in Section 2.3(g)
hereof) thereafter cooperates with the Company to consummate such conversion.
Nothing in this provision shall require any such bank or financial
institution to elect to convert any pledged Member Shares into Low Vote
Stock, but unless such election is made as provided above in this definition,
such Member Shares shall continue to be subject to this Agreement and the
Stockholders Agreement as provided above. Unless and at all times until the
time of the actual conversion of all Member Shares, if any, as to which such
an election is made by such bank or financial institution, the pledged Member
Shares shall continue to be subject to all of the provisions of this
Agreement to the same extent and with the same effect as if they continued to
be beneficially owned solely by such Member; provided, that if such an
election is made but the actual conversion of the Member Shares is not
completed within five Business Days after notice of that election is given to
the Company for any reason other than as a result of the failure of such bank
or financial institution to substantially comply with the requirements of
this definition or the entry of a court order enjoining such conversion, such
bank or financial institution may revoke such conversion election, whereupon
the number and kind of Member Shares as to which such election was made (but
not any Member Shares as to which such election was not made) shall cease to
be subject to this Agreement or the Stockholders Agreement unless
subsequently acquired by a Person who then is (or is required to be) a Member
of the Xxxxxxx Group.
In the case of a pledge that when made qualified and that continues
to qualify as a Permitted Pledge, if the lender, simultaneously with a bona
fide assignment of the loan secured by such pledge (or of a participation
interest therein), assigns to the assignee a proportionate part of such
lender's rights under such pledge, such assignment shall be an Exempt
Transfer and a Permitted Pledge provided that (i) the assignee is a
commercial bank or other financial institution that is not an Affiliate or
Related Party of any of the members of the Xxxxxxx Group or any of their
respective Related Parties, and (ii) prior to such assignment, such bank or
financial institution (for itself and its successors, assigns and
transferees) enters into a written agreement with the Company to the effect
stated in the proviso of the first sentence of this definition.
"Permitted Transferee" means, with respect to any Member, a Related
Party of such Member or another Person to whom any of such Member's Member
Shares are transferred, directly or indirectly, in an Exempt Transfer, in
each case if such Person is or is required to become a party to this
Agreement or is or is required to be bound by its terms and for so long as
such Person is the beneficial owner of any Member Shares.
"Per Share Value", as to any series of High Vote Stock on any relevant
day, means the average of the Current Market Prices of the Low Vote Stock
into which the shares of such series of High Vote Stock are convertible at
the option of the holder for the period of 30 consecutive trading days ending
on (i) in the case of any calculation pursuant to Section 2.2 hereof, the
last trading day prior to the date of Xxxxxx'x death, (ii) in the case of any
calculation of the Gross Purchase Price for purposes of Section 2.3(b), the
last trading day prior to the date the Offer Notice is given, and (iii) in
the case of any determination pursuant to Section 6.1, the last trading day
prior to the date on which a letter of intent or other documentation for the
proposed transaction is executed, in each case
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appropriately adjusted to take into account any stock dividends on the Low
Vote Stock, or any stock splits, reclassifications or combinations of the Low
Vote Stock, during the period following the first of such 30 trading days and
ending on the last full trading day immediately preceding the Closing Date.
"Person" means any natural person, corporation, partnership, joint
venture, limited liability company, trust, unincorporated organization,
association or other entity.
"Prohibited Premium" has the meaning set forth in Section 6.1(a) hereof.
"Prospective Purchaser" has the meaning set forth in Section 2.3(b)(i)
hereof.
"Public Sale Dollar Amount" has the meaning set forth in Section 3.1(a)
hereof.
"Public Sale Notice" has the meaning set forth in Section 3.1(a) hereof.
"Qualified Appraiser" means a Person who is nationally recognized as
being qualified and experienced in the appraisal of assets comparable to the
noncash consideration proposed to be given pursuant to the Bona Fide Offer
and shall not be an Affiliate or Related Party of any party to this
Agreement.
"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 one or more of such members, including, without
limitation, 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, 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 either such
members(s) or one or more Related Parties of such member(s).
"Registration Rights Agreement" has the meaning set forth in Section
2.2(e) hereof.
"Registration Statement" has the meaning set forth in Section 3.2(a)
hereof.
"Related Party" means, with respect to any Member or Permitted Transferee:
(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;
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(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 referred to in clause
(i), (ii) or (iii) of this definition,
provided that in any case under clause (i), (ii), (iii) or (iv) the requisite
relationship with such Member or Permitted Transferee described in such
clause is maintained and if, as the result of any completed or proposed act,
transaction or event, any Person who previously was Related Party of a Member
or a Permitted Transferee ceases to qualify as a Related Party of such Person
or if any shares of High Vote Stock beneficially owned by any such Related
Party are to be distributed or otherwise Disposed of to any Person not
already a party to this Agreement and bound by this Agreement as a Member of
the Xxxxxxx Group, then simultaneously therewith such Person must become a
party to this agreement and the Stockholders Agreement and agree to be bound
hereby and thereby with respect to such shares as a Member of the Xxxxxxx
Group.
"Representative Capacity" means, with respect to any Person that is a
party to this Agreement, such Person as an executor or administrator of the
Bob Estate, the Xxxxx Estate or any other estate, 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 Stock or Rights
to acquire any High Vote Stock issued by any Company or any other shares of
capital stock, Rights or other securities subject to any provisions of this
Agreement.
"Resale Stock" has the meaning set forth in Section 3.1(a) hereof.
"Sale of the Company" means any transaction which results in a Change in
Control of the Company, specifically excluding, however, any sale of any of
the Member Shares pursuant to the terms of this Agreement or any Member
Shares or other securities pursuant to the terms of the Xxxxxx Call
Agreement.
"Sales" has the meaning set forth in Section 3.2(a) hereof.
"Securities Act" means the Securities Act of 1933, as amended.
"Seller" has the meaning set forth in Section 3.1(a) hereof.
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"Series A Common Stock" means, collectively, the Series A TCI Group
Common Stock, Series A LMG Common Stock, and Series A Ventures Group Common
Stock, into which the Series B Common Stock of the corresponding series is
convertible.
"Series A LMG Common Stock" means the Tele-Communications, Inc. Series A
Liberty Media Group Common Stock.
"Series A TCI Group Common Stock" means the Tele-Communications, Inc.
Series A TCI Group Common Stock.
"Series A Ventures Group Common Stock" means the Tele-Communications,
Inc. Series A TCI Ventures Group Common Stock.
"Series B Common Stock" means, collectively, the Series B TCI Group
Common Stock, Series B LMG Common Stock and Series B Ventures Group Common
Stock set forth in the recitals hereto.
"Series B TCI Group Common Stock" means the Tele-Communications, Inc.
Series B TCI Group Common Stock.
"Series B LMG Common Stock" means the Tele-Communications, Inc. Series B
Liberty Media Group Common Stock.
"Series B Ventures Group Common Stock" means the Tele-Communications,
Inc. Series B TCI Ventures Group Common Stock.
"Series Purchase Price" has the meaning set forth in Section 2.2(c)
hereof.
"Series Stock Value" has the meaning set forth in Section 2.2(d) hereof.
"Settlement Agreement" has the meaning set forth in Section 7.3(b)
hereof.
"Stockholders Agreement" means the Stockholders' Agreement, dated as of
the date hereof, by and among the Company, Xxxxxx, Xxxxxx Xxxxxx, Xxxx, Xxx,
the Xxx Estate and the Xxxxx Estate, as it may be amended from time to time.
"Stock Proceeds Amount" has the meaning set forth in Section 3.1(b)
hereof.
"Subject Shares" has the meaning set forth in Section 2.2(a) hereof.
"Subsidiary", when used with respect to the Company, means any
corporation, partnership or other business entity of which an aggregate of
50% or more of the outstanding capital stock or other securities have
ordinary voting power to elect a majority of the board of directors,
managers,
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trustees or other controlling persons, or an equivalent controlling interest
therein, of such Person (irrespective of whether, at the time, capital stock
or other securities of any other class or classes of such entity shall have
or might have voting power by reason of the happening of any contingency) is,
or of which an aggregate of 50% or more of the interests in which are, at the
time, directly or indirectly, owned by the Company and/or one or more
Subsidiaries of the Company (irrespective of whether any other Person, by
reason of a pledge of capital stock or other securities or otherwise, shall
or might have ownership thereof or voting power with respect thereto by
reason of the happening of any contingency).
"Third Appraiser" has the meaning set forth in Section 2.3(c)(iv) hereof.
"Transferor" has the meaning set forth in Section 2.3(b)(i) hereof.
"Underwriters" has the meaning set forth in Section 3.2(a) hereof.
1.2 Terms Defined in the Stockholders Agreement. Capitalized terms
used but not defined in this Agreement are intended to have the definitions
assigned to them in the Stockholders Agreement, and such definitions are
hereby incorporated by reference.
1.3 Definitions Include the Singular and the Plural. Terms defined in
the singular include the plural and vice versa.
2. Grant of Call Right.
2.1 Grant. Subject to and on the terms and conditions set forth in this
Agreement, each Member, on behalf of himself, his Permitted Transferees and
his estate, heirs, administrators, executors, other legal representatives,
successors and assigns, hereby grants to the Company the call right, as
provided in Section 2.2 and Section 2.3 of this Agreement, and makes the
covenants for the benefit of the Company set forth herein. Subject to the
penultimate sentence of this Section 2.1, in consideration of the grant to it
of the call right and the making of such covenants, on or prior to February
9, 1998 (or on such earlier or later date as the parties to numbered
paragraph 4 of the Settlement Agreement may agree), the Company shall pay the
Xxxxxxx Group, collectively, the aggregate sum equal to the Grant
Consideration Amount. The "Grant Consideration Amount" shall be the sum,
determined after giving effect to all transfers of High Vote Stock of any
class or series required by the Settlement Agreement on or before such date,
of the respective products obtained by multiplying the aggregate number of
shares of High Vote Stock of each class or series beneficially owned (without
duplication) by the Xxxxxxx Group as of the date of payment by the same per
share dollar amount, if any, paid by the Company to the members of the Xxxxxx
Group for each share of High Vote Stock of that class or series beneficially
owned by them pursuant to Section 2.1 of the Xxxxxx Call Agreement. Based on
information available to the Company, the parties estimate that the Grant
Consideration Amount will be approximately One Hundred and Twenty-Four
Million Dollars ($124,000,000), but the actual Grant Consideration Amount
will be the amount determined as provided above in this Section 2.1. The
Grant Consideration Amount shall be
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allocated among the grant of the call right hereunder, the grant of the
acceleration feature of such call right contained herein and the making of
the other covenants contained herein in the same proportions (subject to
rounding differences) as the amount of the payment to Xxxxxx under Section
2.1 of the Xxxxxx Call Agreement is allocated among the comparable items of
the Xxxxxx Call Agreement. Such payment shall be made when due in cash by
wire transfer of next day funds to an account designated by the Xxxxxxx Group
Representative. Such payment shall be allocated among the Members in any
manner in which they agree among themselves. Without limiting the generality
of Section 7.1, the Company 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 and each of its Members under this Agreement
and shall not, in any event, have any liability to any Member as a result of
such reliance. The Company shall not be obligated to make such payment unless
or until the actions contemplated by numbered paragraph 4 of the Settlement
Agreement are duly taken on a timely basis or if this Agreement, the Xxxxxx
Call Agreement or the Stockholders Agreement is terminated or subject to
termination under Section 6.20(d) or 6.20(e) of the Stockholders Agreement.
Each member of the Xxxxxxx Group shall provide such information and otherwise
cooperate with the Company in such manner as the Company shall reasonably
request in order to determine and verify the number of shares of High Vote
Stock of each class or series beneficially owned by the Xxxxxxx Group on the
date of the payment provided for in this Section.
2.2 Call Right. (a) Subject to the last sentence of this
subsection (a), upon Xxxxxx'x death, the Company shall have the right (the
"Call Right"), exercisable by action of the Independent Committee, to
purchase all but not less than all of the shares of High Vote Stock
beneficially owned by each Member at the time of Xxxxxx'x death and all but
not less than all of the shares of High Vote Stock that are then beneficially
owned by any Permitted Transferee of any Member and which shares were
acquired directly or indirectly from a Member or another Permitted Transferee
of Member Shares in any Exempt Transfer or other transaction except a sale to
a prospective Purchaser in accordance with Section 2.3(b) hereof
(collectively for all Members and Permitted Transferees, the "Subject
Shares"). The Company may not exercise its Call Right under this Section 2.2
unless it concurrently exercises its corresponding call right under the
corresponding provisions of the Xxxxxx Call Agreement.
(b) The Company may exercise the Call Right, by giving written
notice of such exercise (the "Company Notice") to each Member and each such
Permitted Transferee, if any (collectively, the "Holder"), at any time during
the period commencing on and including the date of Xxxxxx'x death and ending
at the Close of Business on the 50th day after the date, following Xxxxxx'x
death, on which any legal action that may be required to confirm the
appointment of the personal representative(s) for Xxxxxx'x estate or for
Xxxxxx'x estate to act through its personal representative(s) has been
completed (such period, the "Call Period"). The date the Company Notice is
given to the Holder is referred to as the "Exercise Date."
(c) The total consideration payable to the members of the Xxxxxxx
Group collectively for all of the Subject Shares (the "Gross Purchase Price")
will be an amount equal to the
13
sum of the amounts determined in accordance with the following formula for
each series of High Vote Stock included in the Subject Shares: 110% of the
product of the Per Share Value for such series as of the date of Xxxxxx'x
death, multiplied by the number of shares of such series included in the
Subject Shares (such amount, as to each series, the "Series Purchase Price").
In calculating any Series Purchase Price or the Gross Purchase Price, the
number of Subject Shares and the number of shares of any series included in
the Subject Shares shall be calculated without duplication for any shares
that may, by virtue of the definition of "beneficially owned," be deemed to
be beneficially owned by more than one Member.
(d) The Gross Purchase Price will be payable in cash or, as to any
series of High Vote Stock included in the Subject Shares, in fully paid and
nonassessable shares of Low Vote Stock of the corresponding series, or any
combination of the foregoing, as the Xxxxxxx Group Representative, on behalf
of the Holder, may elect, subject to the rights of the Company pursuant to
Section 3.1, by written notice given to the Company at least 60 days prior to
the Closing Date (the "Holder Election Notice"). The Holder Election Notice
shall specify as to each series of High Vote Stock included in the Subject
Shares, the portion of the Series Purchase Price to be paid in Low Vote Stock
of the corresponding series (such portion, as to each series of High Vote
Stock, being the "Series Stock Value" and as to all series for which payment
in Low Vote Stock has been elected being, in the aggregate, the "Gross Stock
Value"). The Gross Purchase Price less the Gross Stock Value is herein
referred to as the "Closing Date Amount". Subject to the Company's right to
elect to require a public sale in accordance with Section 3, the Closing Date
Amount shall be delivered to the Xxxxxxx Group Representative, on behalf of
all Members and Permitted Transferees who held any of the Subject Shares
purchased in cash on the Closing Date.
(e) If the Holder has timely elected in accordance with Section
2.2(d) to receive any portion of the Gross Purchase Price in shares of Low
Vote Stock, the number of shares of any series of Low Vote Stock to be
delivered to the Holder on the Closing Date shall be equal to the quotient
obtained by dividing (i) the Series Stock Value for the corresponding series
of High Vote Stock by (ii) the Per Share Value of such corresponding series
of High Vote Stock. The shares to be so delivered on the Closing Date will
not have been registered for sale under the Securities Act and may not be
sold except pursuant to an effective registration statement or an exemption
from the registration requirements of the Securities Act. The Company will
be under no obligation to register such shares for resale except as otherwise
provided in a Registration Rights Agreement to be entered into by the Company
and the Holder on or prior to the Closing Date pursuant to which the Company
shall grant to the Holder registration rights with respect to such Shares not
less favorable to the Holder than any registration rights granted by the
Company to Xxxxxx pursuant to the Xxxxxx Call Agreement (the "Registration
Rights Agreement"). The certificates for the shares of Low Vote Stock to be
delivered to the Holder on the Closing Date shall bear a customary legend to
the foregoing effect but shall be free of any rights of the Company hereunder.
(f) Amounts payable pursuant to this Agreement in cash shall,
unless otherwise agreed by the Company and the Xxxxxxx Group Representative,
be paid by wire transfer of next day
14
funds on or prior to the Closing Date to an account designated in writing by
the Xxxxxxx Group Representative at least two (2) Business Days before the
Closing Date.
2.3 Acceleration of Call Right. (a) During the term of this
Agreement, neither any Member nor any Permitted Transferee shall dispose of
any Member Shares, except in an Exempt Transfer. If any Related Party of any
Member to whom such Member transfers any Member Shares in an Exempt Transfer
ceases to be a Related Party of its transferor and is not then a Related
Party of any other Member or Permitted Transferee, then such occurrence shall
be deemed to be a Disposition of the Member Shares then held by such Person
giving rise to the Company's purchase right unless the requirements of the
proviso in the definition of "Related Party" in Section 1.1 hereof are
satisfied.
(b) (i) If any Member or any Permitted Transferee (as applicable,
the "Transferor") receives a bona fide written offer (a "Bona Fide Offer")
from a Person who is not an Affiliate of any Member or any Permitted
Transferee (a "Prospective Purchaser") to purchase all or any of the Member
Shares beneficially owned by the Transferor and the Transferor desires to
accept the Bona Fide Offer, then prior to the acceptance of the Bona Fide
Offer by the Transferor, the Call Right shall accelerate as to the Member
Shares that are the subject of the Bona Fide Offer (the "Offered Shares")
and the Company may exercise the Call Right in the manner and to the extent
set forth in this Section 2.3(b).
(ii) The Transferor shall give written notice (the "Offer
Notice") to the Company of its receipt of the Bona Fide Offer and desire to
accept the same, which notice shall (A) state the identity of the
Prospective Purchaser and, if the Prospective Purchaser is not its own
ultimate parent within the meaning of the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended, the identity of its ultimate
parent(s) and (B) set forth all material terms of the Bona Fide Offer
(including the purchase price and the method of payment thereof). The
Company shall then have the option to exercise the Call Right as to all but
not less than all of the Offered Shares at the applicable price determined
in accordance with the following sentence and, subject to the remaining
provisions of this Section 2.3, on the terms of the Bona Fide Offer (as
disclosed in the Offer Notice). The price at which the Offered Shares may
be purchased by the Company shall be the lesser of (x) the price offered in
the Bona Fide Offer and (y) an amount equal to the Gross Purchase Price, as
determined in accordance with Section 2.2, that would be payable if the
Offered Shares were the Subject Shares (such lesser amount being, the
"Company Price"). The Transferor shall enclose with the Offer Notice a
true and complete copy of the Bona Fide Offer and all documents related
thereto. In determining the Company Price, (i) if any portion of the price
offered in the Bona Fide Offer consisted of consideration other than cash,
the fair market value of such non-cash consideration shall be deemed to be
equal to the amount determined by agreement of the Transferor and the
Company or, failing such agreement, as determined in accordance with the
procedures as set forth in Section 2.3(c); and (ii) the number of Subject
Shares and the number of shares of any series included in the Subject
Shares shall
15
be calculated without duplication for any shares that may, by virtue of the
definition of "beneficially owned," be deemed to be beneficially owned by
more than one Member.
(iii) The Company shall have the right, exercisable (if so
determined by the Independent Committee) by the written notice (an
"Election Notice") given to the Transferor on or before the Close of
Business on the tenth (10th) Business Day after receipt of the Offer
Notice, to exercise the Call Right as to the Offered Shares and to purchase
all but not less than all of the Offered Shares. If the Company duly
delivers an Election Notice for the Offered Shares in accordance with the
foregoing procedure, it shall (subject to the Company's right to elect to
pay a portion of the Company Price in debt securities in accordance with
Section 2.3(b)(iv) and subject to the Company's right to elect to require a
public sale in accordance with Section 3.1), purchase the Offered Shares
for cash, paid by wire transfer of next day funds on or prior to the
Closing Date to an account designated by the Transferor in writing at least
two (2) Business Days before such date. Notwithstanding the date fixed as
the Closing Date in Section 4.1, the Closing Date for the purchase and sale
of the Offered Shares pursuant to this Section 2.3 shall be subject to
extension in accordance with Section 2.3(c).
(iv) In the event that the Company Price is the price offered in
the Bona Fide Offer and any part of the price specified in the Bona Fide
Offer is proposed to be paid in debt securities, the Company may, in its
discretion, elect to pay the equivalent portion of the Company Price
through the issuance of debt securities with substantially similar terms in
an amount the fair market value of which is equal to the fair market value
of the equivalent portion of the debt securities specified in the Offer
Notice, in each case as agreed by the Company and the Transferor or,
failing such agreement, as determined in accordance with the procedures
specified in Section 2.3(c), taking into consideration relevant credit
factors relating to the Prospective Purchaser and the Company and the
marketability and liquidity of such debt securities.
(v) In the event that (A) no Election Notice has been given by
the tenth (10th) Business Day after receipt of the Offer Notice, or (B) if
an Election Notice is given, the Closing has not occurred by the 61st day
after the Election Notice is given (or such later date as the parties may
have scheduled for the Closing or to which the Closing may have been
extended pursuant to Section 2.3(c), for any reason other than a breach by
the Transferor or another Member or Permitted Transferee of its obligations
hereunder (the first to occur of such events being the "Free to Sell
Date"), then the Transferor shall have the right to sell all but not less
than all of the Offered Shares to the Prospective Purchaser at the price
(or a greater price) and upon the terms (or terms no more favorable to the
Prospective Purchaser) specified in the Offer Notice and, in connection
with any such sale the Transferor shall not be required to convert any of
the Offered Shares into shares of Low Vote Stock prior to the sale to such
Prospective Purchaser. The Transferor's right to sell the Offered Shares
to the Prospective Purchaser pursuant to this Section 2.3(b)(v) shall
expire and the provisions of this Section 2.3(b) shall be reinstated in the
event that the Prospective
16
Purchaser has not purchased such Offered Shares within ten (10) Business
Days after the Free to Sell Date.
(c) (i) If a Bona Fide Offer proposes to pay a portion of the price
for the Offered Shares in consideration other than cash and the Company and
the Transferor have not agreed upon the value thereof (or, in the case of
debt securities, if the Company has elected to pay a portion of the Company
Price in equivalent securities and the Company and the Transferor have not
agreed upon the value of the debt securities the Company proposes to issue)
by the Close of Business on the fifth (5th) Business Day prior to the date
otherwise fixed for the Closing (the "Commencement Date") then the
procedures set forth in this Section 2.3(c) shall be commenced and the
Closing Date shall be extended to the fifth (5th) Business Day following
the date on which the fair market value of the noncash consideration (or
Company issued debt securities) has been finally determined pursuant to
this Section 2.3(c).
(ii) The Company and the Transferor shall each retain a Qualified
Appraiser and notify the other party of its selection within five (5)
Business Days of the Commencement Date to render the determination required
by this Section 2.3(c). If either party fails to timely select its
Qualified Appraiser then the Qualified Appraiser selected by the other
party shall render such determination. The Company and the Transferor
shall each be responsible for the fees and expenses of the Qualified
Appraiser selected by it, unless only one Qualified Appraiser is selected
in which case the Company and the Transferor shall each bear 50% of such
fees and expenses. If a Third Appraiser is selected pursuant to this
Section 2.3(c) the fees and expenses of the Third Appraiser will be shared
equally by the Company and the Transferor.
(iii) The Qualified Appraisers selected by the parties shall
submit their respective independent determinations of the fair market value
of the noncash consideration (and, if applicable, Company issued debt
securities), within 15 Business Days after the Commencement Date. If the
respective determinations of such Qualified Appraisers vary by less than
ten percent (10%), the fair market value of the noncash consideration (and,
if applicable, Company issued debt securities) shall be the average of the
two determinations.
(iv) If such respective determinations vary by ten percent (10%)
or more, the two Appraisers shall promptly designate a third Qualified
Appraiser (the "Third Appraiser"). No party to this Agreement or any
Affiliate of any party to this Agreement or Qualified Appraiser shall,
provide any information to the Third Appraiser as to the determinations of
the initial Qualified Appraisers or otherwise influence the Third
Appraiser's determination in any way. The Third Appraiser shall submit its
determination of the fair market value of the noncash consideration (and,
if applicable, Company issued debt securities), within ten (10) Business
Days after the date on which the Third Appraiser is retained. If a Third
Appraiser is retained, the fair market value of the noncash consideration
(and, if applicable, Company issued debt securities) shall equal the
average of
17
the two closest of the three determinations, except that, if the difference
between the highest and middle determinations is no more than 105% and no
less than 95% of the difference between the middle and lowest
determinations, then the fair market value shall equal the middle
determination.
(v) In determining the fair market value of the noncash
consideration (and, if applicable, the Company issued debt securities),
each Qualified Appraiser retained pursuant to this Section 2.3(c) shall:
(A) assume that the fair market value of the applicable asset is the price
at which the asset would change hands between a willing buyer and a willing
seller, neither being under any compulsion to buy or sell and each having
reasonable knowledge of all relevant facts; (B) assume that the applicable
asset would be sold for cash; and (C) use valuation techniques then
prevailing in the relevant industry.
(d) No voluntary transfers of Member Shares may be made by any
Holder during the Call Period and if the Call Right is exercised, thereafter,
except (i) to the Company pursuant to the Call Right or (ii) in the case of
any pre-existing Permitted Pledge that continues to qualify as a Permitted
Pledge, a transfer of the pledged Member Shares to the pledgee (or its
nominee) as a result of the bona fide exercise by such pledgee of its rights
and remedies as contemplated by the definition of "Permitted Pledge" in
Section 1.1 hereof, but not any further transfer by such assignee (it being
understood that a conversion by the pledgee of the pledged Member Shares into
shares of Low Vote Stock in the manner and on the terms set forth in the
definition of "Permitted Pledge" in Section 1.1 hereof shall be permitted).
Accordingly, without limiting the generality of the foregoing, no voluntary
transfer may be made during such period pursuant to a Bona Fide Offer,
notwithstanding the Transferor's compliance with this Section 2.3 prior to
Xxxxxx'x death.
(e) If there shall be more than one Transferor in any transaction
or series of related transactions covered by an Offer Notice, and if, to the
extent permitted by this Agreement, the Company pays the Company Price with
more than one form of consideration, then unless otherwise agreed in writing
by the Transferors or by the Xxxxxxx Group Representative on their behalf,
each Transferor shall receive on a per share basis substantially the same
combination of consideration.
(f) Notwithstanding anything in this Agreement to the contrary,
one or more Members may, at any time and from time to time, sell a number of
Member Shares that in the aggregate for all transfers made pursuant to this
subsection by any or all of the Members is equal to or less than the number
of Excepted Shares, provided that each such sale is exempt from the
registration requirements of the Securities Act and is effected through
unsolicited broker transactions within the meaning of paragraph (g) and the
first sentence of paragraph (f) of Rule 144 of the General Rules and
Regulations under the Securities Act, as in effect on the date of this
Agreement. Prior to the consummation of a disposition of any Member Shares in
accordance with this Section 2.3(f), such Member Shares must be converted
into shares of Low Vote Stock of the corresponding series. The number of any
Member Shares disposed of pursuant to this Section 2.3(f) shall be subtracted
from the number of Excepted Shares. Upon the consummation of a disposition
of
18
Member Shares pursuant to this Section 2.3(f), the Xxxxxxx Group
Representative shall deliver to the Company a written notice stating the
number of Member Shares so disposed of, identifying the Member or Members
selling such Member Shares and the number sold by each, and the aggregate
number of Excepted Shares which the Members of the Xxxxxxx Group continues to
beneficially own.
(g) The Company agrees that if a Permitted Pledge of any Member
Shares is made and the lender forecloses or takes any other action to enforce
the security interest represented by such pledge and makes an irrevocable
commitment, in accordance with the definition of "Permitted Pledge" in
Section 1.1 hereof, to convert such Member Shares into shares of Low Vote
Stock on a share-for-share basis, the Company shall permit such conversion
and shall reasonably cooperate with such lender in effecting such conversion
as promptly as reasonably practicable and shall comply with Section 6.4(b) of
the Stockholders Agreement.
3. Public Sale Election.
3.1 Company Election. (a) Notwithstanding anything in Section 2.2(d)
or Section 2.3(b)(iii) to the contrary, but subject to Section 2.3(e), the
Company shall have the right to pay all or any portion of the Closing Date
Amount or Company Price, as applicable, in shares of Low Vote Stock in
accordance with the following procedures. At least five (5) Business Days
prior to the Closing Date, the Company shall notify (the "Public Sale
Notice") the Xxxxxxx Group Representative, on behalf of the Holder or each
Transferor, as the case may be, as to the portion of the Closing Date Amount
or Company Price, as applicable, to be paid in shares of Low Vote Stock (the
"Public Sale Dollar Amount"). The number of shares of Low Vote Stock (the
"Resale Stock") deliverable to the Underwriters pursuant to Section 3.2 shall
be that number of shares which when sold in accordance with Section 3.2 will
reasonably be expected to yield aggregate net proceeds collectively to all
the Member(s) and Permitted Transferee(s), if any, participating in the sale
(collectively, the "Seller") (after deduction of underwriting discounts and
commissions and assuming the payment by the Company of all other expenses of
registration and sale of the Resale Stock) of an aggregate amount equal to
the Stock Proceeds Amount.
(b) The term "Stock Proceeds Amount" shall mean the sum of (i)
Public Sale Dollar Amount, plus (ii) interest on the Public Sale Dollar
Amount, accruing from and including the Closing Date to the date of payment
pursuant to Section 3.2, at a rate equal to the weighted average interest
rate applicable as of the Closing Date to that portion of the consolidated
indebtedness of the Company that bears interest at a floating interest rate.
(c) Subject to the foregoing, the decision as to which series of
Low Vote Stock and the number of shares of each such series that will
comprise the Resale Stock shall be made by the Company at its discretion.
Such shares shall be held by the Company on behalf of the Seller pending the
Sales, and the Company shall be authorized to deliver such shares to the
Underwriters on such Seller's behalf prior to the closing of the Sales.
19
3.2 Public Sale. (a) On the Closing Date, the Company shall
provide an effective registration statement (the "Registration Statement")
registering under the Securities Act resales of the Resale Stock deliverable
pursuant to Section 3.1 having a maximum aggregate offering price (net of
underwriting fee and commissions) equal to the Stock Proceeds Amount. Such
Resale Stock shall be sold (at the Company's discretion but in the form of
one or more secondary offerings on behalf of each Seller) under the
Registration Statement during the period of not more than 45 days following
the Closing Date as specified by the Company (the "Offering Period"). The
Company may by notice to each Seller at any time shorten the Offering Period,
and in such event, the Offering Period as referred to herein shall mean such
shorter period. All sales (the "Sales") of the Resale Stock shall be made on
behalf of each Seller by underwriters selected by the Company (the
"Underwriters") pursuant to one or more block trades, underwritten offerings
or otherwise, in each case as determined by the Company. The actual net
proceeds from the Sales (after deduction of underwriting discounts and
commissions) are referred to as the "Net Proceeds". The Company shall pay
all expenses of registration and sale of the Resale Stock.
(b) On the fifth Business Day following the termination of the
Offering Period, the Company shall deliver the Net Proceeds to the Xxxxxxx
Group Representative, as agent for the Member(s) and Permitted Transferee(s),
if any, comprising the Seller, and if the Net Proceeds are less than the
Stock Proceeds Amount, the difference (the "Difference") shall be paid by the
Company in cash on such date to the Xxxxxxx Group Representative, as such
agent. The Company may elect to pay some or all of the Difference prior to
such date and in such event the interest component of the portion of the
Difference so paid early shall be calculated with respect to such earlier
payment date. If the Net Proceeds exceed the Stock Proceeds Amount, the
Company may retain the excess.
(c) The Company shall indemnify the Seller and the Underwriters in
respect of the Sales to the same extent as the Company would indemnify the
Holder and the Underwriters as provided in the Registration Rights Agreement,
but the Sales shall not be deemed to have been made pursuant to the Registration
Rights Agreement.
(d) Each Seller shall be required to cooperate with the Company in
connection with the Registration Statement and the Sales (including, without
limitation, by executing and delivering underwriting and other documents and
instruments, taking actions and providing information) as shall be reasonably
requested by the Company in connection therewith.
4. Closing Matters.
4.1 Closing Date. The consummation of the purchase and sale of (i) the
Subject Shares following the exercise of the Call Right pursuant to Section
2.2 or (ii) the Offered Shares following the exercise of the Call Right
pursuant to Section 2.3 (in each case, a "Closing") shall be held at 10:00
a.m. local time on, respectively, (x) the 155th day following the Exercise
Date, or (y) the 60th day following the date the Election Notice is given or
(z) such other date and at such other time as the Holder or the Transferor
and the Company may agree (the date on which any such Closing occurs is
referred to herein as the "Closing Date"). The Closing shall take place at
the principal
20
offices of the Company or at such other place as the Xxxxxxx Group
Representative and the Company may agree.
4.2 Closing Deliveries. At the Closing, the Company shall pay to the
Xxxxxxx Group Representative, as agent for the Member(s) and Permitted
Transferee(s), if any, comprising the Seller (i) any portion of the Closing
Date Amount or Company Price, as applicable, that was required to be paid in
cash in the manner provided in Section 2.2(f) or Section 2.3(b)(iii), as and
if applicable, (ii) deliver certificate(s) registered in the name of each
Seller for the number of shares of Low Vote Stock required to be delivered in
payment of the Gross Stock Value portion of the Gross Purchase Price, and
(iii) if the Company has elected to pay any or all of the Closing Date Amount
or Company Price, as applicable, in shares of Low Vote Stock pursuant to
Section 3.1, deliver the Registration Statement conforming to the
requirements of Section 3.2. At the Closing, each of the Member(s) and
Permitted Transferee(s), if any, participating in the sale shall be required,
as a condition to receiving payment, to deliver to the Company (i) a stock
certificate or certificates, duly endorsed for transfer or in blank,
representing such Person's Subject Shares or Offered Shares, as applicable,
(ii) if applicable, copies of Letters Testamentary or other documentation
evidencing the authority of such Person to transfer any of the Subject Shares
that are evidenced by certificates registered in the name of a Person other
than such Seller, (iii) a certificate, executed by or on behalf of such
Person, in which such Person represents and warrants to the Company that such
Person has good title to the Subject Shares or Offered Shares, as applicable,
being sold by him, free and clear of any liens, claims, charges or
encumbrances and has the legal authority to consummate such sale and (iv)
such other certificates and documents as the Company may reasonably request.
5. Certain Representations, Warranties and Covenants.
5.1 Representations and Warranties. Each party hereto hereby
represents and warrants to the other parties as follows (with such
representations and warranties surviving the execution, delivery and
performance of this Agreement):
(a) Such party has the legal right and all requisite power and
authority to make and enter into this Agreement and to perform his or its
obligations hereunder and comply with the provisions hereof. If such party
is the Company, the execution, delivery and performance of this Agreement by
the Company has been duly authorized by all necessary action on its part.
This Agreement has been duly executed and delivered by such party and
constitutes the valid and binding obligation of such party enforceable
against him or it in accordance with its terms except as enforcement may be
limited by 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
21
rise to any right of termination, cancellation or acceleration of any
obligation or to 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 his or 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
his or its obligations under and compliance with the provisions of this
Agreement. If such party is the Company, the execution, delivery and
performance of and compliance with this Agreement by it do not and will not
contravene its charter, by-laws or other organizational document; and
(c) No consent, approval, order or authorization of, or
registration, declaration or filing with, any governmental or regulatory
authority or any other person is required by such party in connection with
the execution, delivery or performance of this Agreement by such party,
except, with respect to the exercise of certain rights granted hereunder, in
connection with Federal and state securities laws.
5.2 General Covenants. (a) In the event that any sale of
shares pursuant to this Agreement would violate any rules or regulations of
any governmental or regulatory agency having jurisdiction or any other
material law, rule, regulation, order, judgment or decree applicable to the
parties hereto (including, with respect to the Company, its subsidiaries or
any of the Company's or such subsidiary's respective properties and assets),
then each party hereto hereby agrees (i) to cooperate with and assist the
other in filing such applications and giving such notices, (ii) to use
reasonable efforts to obtain, and to assist the other in obtaining, such
consents, approvals and waivers, and (iii) to take such other actions,
including supplying all information necessary for any filing, as any affected
party may reasonably request, all as and to the extent necessary or advisable
so that the consummation of such sale will not constitute or result in such a
violation.
(b) Each party hereto hereby further agrees that he or it shall
not take any action or enter into any agreement or arrangement restricting or
limiting his or its ability timely and fully to perform all his or its
obligations under this Agreement. The grant by the Members of the Xxxxxxx
Group of the voting rights and proxy provided for in Article II of the
Stockholders Agreement and the exercise of such rights and by this use of
such proxy agreement is not intended to be prohibited or otherwise affected.
6. Stockholder's Covenant Relating to a Sale of Company.
6.1 Limitation on Size of Premium. (a) In connection with any
proposed Sale of the Company, each Member agrees not to negotiate for or
require as a term of such transaction or as a condition to his agreement to
vote therefor that either (i) the holders of High Vote Stock receive for such
High Vote Stock or (ii) any Member or any Related Party or Affiliate of any
Member receives for the shares of High Vote Stock or Common Stock
beneficially owned by any of them, consideration the value of which on a per
share basis exceeds the value per share payable to (x) holders of shares of
Low Vote Stock into which such High Vote Stock is convertible or (y) holders
22
of Common Stock other than any Member or any Related Party or Affiliate of
any Member, in either case by more than ten percent (10%) (a "Prohibited
Premium"). For the purposes of computing the existence of a Prohibited
Premium, if any noncash consideration to be received by any holders of Common
Stock in any proposed Sale of the Company is the same for both (A) (i) the
holders of High Vote Stock or (ii) any Member or any Related Party or
Affiliate of any Member, as applicable, and (B) (x) holders of shares of Low
Vote Stock into which such High Vote Stock is convertible or (y) holders of
Common Stock other than any Member or any Related Party or Affiliate of any
Member, as applicable, a Prohibited Premium shall be deemed to exist if the
ratio of such noncash consideration given to the Persons listed in (A) above
exceeds the amount of such noncash consideration given to the Persons listed
in (B) above by more than ten percent (10%). If different forms of noncash
consideration are to be given to the Persons listed in (A) above than to the
Persons listed in (B) above, and there is any disagreement between the
Independent Committee and any such Person or the Xxxxxxx Group Representative
as to the value of any such consideration for the purposes of determining if
there is a Prohibited Premium, then the noncash consideration shall be valued
by using the appraisal procedures set forth in Section 2.3(c).
(b) If a proposed Sale of the Company containing a Prohibited
Premium is submitted to the stockholders of the Company for a vote, each
Member agrees that he will vote all of his Member Shares, and any other
shares of voting stock entitled to vote on such proposal beneficially owned
by him, against such proposal.
7. Miscellaneous.
7.1 Actions by Xxxxxxx Group. (a) Any notice, consent, approval or
other decision by or on behalf of the Xxxxxxx Group or any Member or Members
required or permitted by this Agreement shall be effective if expressed in a
writing which is either executed by the Xxxxxxx Group Representative or by
all such Member(s), and in either such case the parties to this Agreement may
assume that such the Xxxxxxx Group Representative or such Member(s), as the
case may be, has or have the power and authority to do so and may rely
conclusively on such writing as expressing the action of the Xxxxxxx Group or
such Member or Members, as the case may be.
(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 the Company and Xxxxxx. 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 shares of High Vote Stock.
7.2 Term. This Agreement shall continue in full force and effect until
the first to occur of the following: (i) all of the Member Shares have been
purchased by the Company, (ii) all of the Member Shares have been sold to one
or more Prospective Purchasers in compliance with Section 2.3(b) and (ii) the
Call Right under Section 2.2 has expired unexercised.
23
7.3 Binding Effect; Assignability; Entire Agreement; Legends (a)
Except as expressly provided herein, no party hereto may assign its rights or
delegate its obligations hereunder without the prior written consent of the
other parties hereto, except that the Company may assign its rights and
delegate its obligations without such consent to any successor corporation by
operation of law. Any assignment or delegation in contravention of this
Agreement shall be void and shall not relieve the assigning or delegating
party of any obligation hereunder. This Agreement and all of the provisions
hereof shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and permitted assigns.
(b) This Agreement sets forth the entire agreement and
understanding between the parties as to the subject matter hereof and merges
and supersedes all prior discussions, agreements and understandings of any
and every nature among them with respect to such subject matter. For the
sake of certainty, the parties specifically acknowledge that this Agreement
is not intended to merge, supersede or alter the provisions of (i) the
Stockholders Agreement or (ii) any provision of the Agreement, effective as
of January 5, 1998 and titled "AGREEMENT RE: SETTLEMENT OF XXXXXXX ESTATE
LITIGATION" among certain parties to such Stockholders' Agreement and certain
other Persons, as it may be amended from time to time (the "Settlement
Agreement"), other than numbered paragraph 10 thereof or (iii) any separate
agreement, release or instrument granted, entered into or delivered pursuant
to such Settlement Agreement.
(c) Except as expressly set forth herein, none of the provisions
of this Agreement shall inure to the benefit of or be enforceable by any
Person not a party hereto.
(d) The provisions of Section 6.4 of the Stockholders Agreement
are hereby incorporated by reference, with the same force and effect as if
set forth at this place.
7.4 Amendments and Waivers. Subject to Section 7.13 hereof, 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 the Company and the Xxxxxxx Group Representative.
7.5 Governing Law. This Agreement shall be governed by and construed
in accordance with the internal laws of the State of Delaware, regardless of
the laws that might be applicable under principles of conflicts of law.
7.6 Interpretation. The headings of the 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.
7.7 Notices. All notices, requests, demands, waivers and other
communications hereunder shall be in writing and shall be deemed to have been
duly given if delivered personally or mailed, certified or registered mail
with postage prepaid, sent by facsimile transmission (with
24
acknowledgment received), or by reliable overnight courier service, with
acknowledgment of receipt requested, to the intended recipient at: (i) in the
case of Xxxxxx or any other member of the Xxxxxx Group, to Xxxxxx or such
member at such address as he may from time to time specify by written notice
to the Company 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 the Company and Xxxxxx (or his estate, heirs or
personal representative) and (iii) in the case of the Company, to it at its
principal executive offices or at such changed address as it may from time to
time specify in writing to the Xxxxxxx Group Representative, the Company and
Xxxxxx (or his estate, heirs or personal representative).
All notices and other communications given to a party in
accordance with the provisions of this Agreement shall be deemed to have been
given (i) three Business Days after the same are sent by certified or
registered mail, postage prepaid, return receipt requested, (ii) on the date
when delivered by hand, (iii) on the date sent by facsimile transmission
(with acknowledgment received) unless such day is not a Business Day in which
case, the next Business Day following such day or (iv) one Business Day after
the same are sent by a reliable overnight courier service, with
acknowledgment of receipt requested. Notwithstanding the preceding sentence,
notice of change of address shall be effective only upon actual receipt
thereof.
7.8 No Implied Waivers. No action taken pursuant to this Agreement,
including, without limitation, 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.
7.9. 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.
7.10. Further Assurances. Each party shall cooperate and take such
actions as may be reasonably requested by another party in order to carry out
the provisions and purposes of this Agreement and the transactions
contemplated hereby. If, as a result of any recapitalization,
reorganization, merger, consolidation, share exchange or other transaction or
event shares of any substitute, different or new class or series of High Vote
Stock is issued or is issuable (upon exercise of warrants, options,
convertible securities or otherwise) to any Member, then if and to the extent
requested in writing by the Company, such shares shall be subject to terms as
nearly as equivalent as practicable to the provisions of this Agreement and
the Stockholders' Agreement applicable to such Member.
25
7.11. Remedies. In the event of a breach or a threatened breach by one
party to this Agreement of its obligations under this Agreement, each other
party, in addition to being entitled to exercise all rights granted by law,
including recovery of damages, shall be deemed to have suffered or be about
to suffer irreparable harm and will be entitled to specific performance of
its rights under this Agreement. The parties agree that the provisions of
this Agreement shall be specifically enforceable, it being agreed by the
parties that the remedy at law, including monetary damages, for breach of
such provision will be inadequate compensation for any loss and that any
defense in any action for specific performance that a remedy at law would be
adequate is waived.
7.12. Use of Certain Words. The use of the words "hereof", "herein",
"hereunder", and words of similar import shall refer to this entire
Agreement, and not to any particular article, section, subsection, clause, or
paragraph of this Agreement, unless the context clearly indicates otherwise.
The use in this Agreement of the masculine, feminine or neither shall be
deemed to include a reference to the others.
7.13. 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 hereof 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 or
decline to do so, the parties shall negotiate in good faith in an effort to
agree upon such a suitable and equitable provision.
7.14. 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 (AND 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 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
26
ANY MEANS, MANNER OR METHOD OTHER THAN IN THE MANNER PROVIDED FOR THE GIVING
OF NOTICES TO SUCH PARTY IN SECTION 7.7, AND AGREES THAT ANY PROCESS SERVED
UPON SUCH PARTY IN SUCH MANNER 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.
7.15. Facsimile Signatures. This Agreement and any other instrument
executed and delivered by any party pursuant to this Agreement may be
executed by facsimile signatures.
[Rest of Page Intentionally Left Blank]
27
7.16. 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.
7.17. 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.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed, as of the day and year first above written.
TELE-COMMUNICATIONS, INC.
By:
/s/ Tele-Communications, Inc.
--------------------------------------
Name:
Title:
/s/ Xxx Xxxxxxx
-----------------------------------------
Xxx Xxxxxxx, individually and as Trustee
of the Xxxxxxx Family Irrevocable Trusts
and the Xxxxxxx Issue GST Trusts
/s/ Xxxx Xxxxxxx
-----------------------------------------
Xxxx Xxxxxxx, individually and as Trustee
of the Xxxxxxx Family Irrevocable Trusts
and the Xxxxxxx Issue GST Trusts
ESTATE OF XXXXX XXXXXXX
By:
/s/ Xxx Xxxxxxx
-------------------------------------
Xxx Xxxxxxx, Personal
Representative
ESTATE OF XXX XXXXXXX
By:
/s/ Xxx Xxxxxxx
------------------------------------
Xxx Xxxxxxx, Personal
Representative
By:
/s/ Xxxx Xxxxxxx
------------------------------------
Xxxx Xxxxxxx, Personal
Representative
