EXHIBIT 10.11
EXCHANGE AGREEMENT
This Exchange Agreement (this "Agreement") dated as of , 2002, is
entered into among New UnitedGlobalCom, Inc., a Delaware corporation that upon
the effectiveness of the Merger described under "Background" below will be
renamed UnitedGlobalCom, Inc. ("United"), and each of the individuals indicated
as a "Stockholder" on the signature pages hereto (the "Stockholders").
BACKGROUND
As contemplated by the Agreement and Plan of Restructuring and Merger, dated as
of , 2002 (the "Merger Agreement"), among UnitedGlobalCom, Inc., a
Delaware corporation that upon the effectiveness of the Merger will be renamed
UGC Holdings, Inc. ("Old United"), United, United/New United Merger Sub, Inc., a
Delaware corporation ("Merger Sub"), Liberty Media Corporation, a Delaware
corporation, Liberty Media International, Inc., a Delaware corporation, Liberty
Global, Inc., a Delaware corporation, and the Persons indicated as "Founders" on
the signature pages thereto, the Stockholders have purchased and are the record
and beneficial holders of an aggregate of 1,500 shares of the Series E Preferred
Stock, par value $0.01 per share, of Old United (the "Preferred Shares"). In the
merger (the "Merger") of Merger Sub with and into Old United contemplated by the
Merger Agreement, the Preferred Shares will be converted into an aggregate of
1,500,000 shares of the Class A Common Stock, par value $0.01 per share
("Surviving Entity Class A Stock"), of Old United as the surviving entity in the
Merger (the "Surviving Entity"). Pursuant to the terms of the Surviving Entity's
Restated Certificate of Incorporation (the "Surviving Entity Charter"), (a)
immediately upon any transfer of a share of Surviving Entity Class A Stock to
any Person other than a Permitted Transferee who is also a Principal or a
Related Party, such share of Surviving Entity Class A Stock shall automatically
convert into one share of the Class C Common Stock, par value $0.01 per share
("Surviving Entity Class C Stock"), of the Surviving Entity and (b) immediately
upon the occurrence of a Class B Event, each outstanding share of Surviving
Entity Class A Stock shall automatically convert into one share of Surviving
Entity Class C Stock. The parties hereto desire to set forth the terms upon
which the Stockholders may exchange shares of Surviving Entity Class C Stock
with United for shares of Class A Stock, par value $0.01 per share ("United
Class A Stock"), of United. It is a condition to the consummation of the
transactions contemplated by the Merger Agreement, including the Merger, that
United and the Stockholders each execute and deliver this Agreement.
AGREEMENT
In consideration of the foregoing premises and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties agree as follows:
SECTION 1. Certain Definitions. In this Agreement, the following terms shall
have the indicated meanings:
Affiliate. As defined in the Stockholders Agreement.
Agreement. As defined in the preamble.
Class B Event. As defined in the Surviving Entity Charter as in effect
immediately following the Merger.
Exchange Rate. [ ] shares of United Class A Stock (as adjusted
from time to time to appropriately reflect the effect of any stock splits,
reverse splits, stock dividends, combinations and other
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similar events affecting the shares of United Class A Stock or Surviving
Entity Class C Stock and occurring after the effective time of the
Merger).(1)
Liberty. As defined in the Merger Agreement.
Merger. As defined under "Background" on the first page of this Agreement.
Merger Agreement. As defined under "Background" on the first page of this
Agreement.
Merger Sub. As defined under "Background" on the first page of this
Agreement.
Old United. As defined under "Background" on the first page of this
Agreement.
Old United Series E Preferred Stock. The United Series E Preferred Stock,
as defined in the Merger Agreement.
Permitted Transferee. As defined in the Stockholders Agreement.
Person. Any individual, corporation, partnership, limited partnership,
limited liability company, trust or other legal entity.
Preferred Shares. As defined under "Background" on the first page of this
Agreement.
Principal. As defined in the Surviving Entity Charter as in effect
immediately following the Merger.
Promissory Note. As defined in the applicable Subscription Agreement.
Purchase Price. As defined in the applicable Subscription Agreement.
Related Party. As defined in the Specified Indentures.
Specified Indentures. The (a) Indenture dated as of February 5, 1998,
between the Corporation and Firstar Bank, N.A. (f/k/a Firstar Bank of
Minnesota, N.A.) and (b) Indenture dated as of April 29, 1999, between the
Corporation and Firstar Bank, N.A., in each case as in effect on May 1,
2001.
Stockholders. As defined in the preamble.
Stockholders Agreement. The Stockholders Agreement, dated as of
, 2002, among United, Liberty Media Corporation, Liberty
Global, Inc. and the individuals designated as Founders on the signature
pages thereto.
Subscription Agreement. As defined in the Merger Agreement.
Surviving Entity. As defined under "Background" on the first page of this
Agreement.
Surviving Entity Charter. As defined under "Background" on the first page
of this Agreement.
Surviving Entity Class A Stock. As defined under "Background" on the first
page of this Agreement.
Surviving Entity Class C Stock. As defined under "Background" on the first
page of this Agreement.
United. As defined in the preamble.
United Class A Stock. As defined under "Background" on the first page of
this Agreement.
SECTION 2. Exchange. Subject to the terms and conditions of this Agreement,
each Stockholder shall be entitled at any time to cause United to exchange
shares of Surviving Entity Class C Stock held by such Stockholder for a number
of newly issued shares of United Class A Stock equal to the product of (a) the
number of shares of Surviving Entity Class C Stock surrendered for exchange in
accordance with this Agreement and (b) the Exchange Rate in effect at the time
of such exchange. No Stockholder shall transfer
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(1) The initial Exchange Rate will be equal to 1/1,500,000th of the result
(rounded to the nearest 1/10,000th of a share) of (A) the quotient of X
divided by Y minus (B) X. For purposes of the foregoing, "X" shall be equal
to the aggregate number of shares of Old United Class A Stock and Old United
Class B Stock outstanding immediately prior to the Closing and "Y" shall be
equal to 0.995049505.
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any shares of Surviving Entity Class A Stock or Surviving Entity Class C Stock
to any Person other than a Permitted Transferee who is also a Principal or a
Related Party. Notwithstanding anything in the foregoing to the contrary, no
Stockholder shall be entitled to cause United to exchange any shares of
Surviving Entity Class C Stock held by such Stockholder pursuant to this
Agreement if such Stockholder delivered a Promissory Note pursuant to a
Subscription Agreement in payment of the Purchase Price of any shares of Old
United Series E Preferred Stock, unless such Stockholder's liability under any
such Promissory Note has been satisfied in full. If the Stockholder's liability
under a Promissory Note is satisfied by means of any transaction or arrangement
involving such Stockholder or any Affiliate of such Stockholder becoming
indebted to United, such indebtedness (or any substitute or successor
arrangement) shall provide for full recourse to the Stockholder or the relevant
Affiliate in the event of the nonpayment thereof, shall provide for the payment
of interest at a fair market rate and contain other terms and conditions
consistent with an arm's length, fair market transaction, all of which terms
shall be reasonably acceptable to Liberty. The Stockholder or the relevant
Affiliate shall maintain at all times from the incurrence of such indebtedness
until such time that such indebtedness is satisfied in full, unencumbered assets
in an amount sufficient for the repayment of such indebtedness.
SECTION 3. No Fractional Shares. No fractional shares of United Class A Stock
shall be issued upon the exchange of shares of Surviving Entity Class C Stock.
If more than one share of Surviving Entity Class C Stock is surrendered for
exchange by the same holder at the same time, the number of full shares of
United Class A Stock that shall be issuable upon exchange thereof shall be
computed on the basis of the aggregate number of shares of Surviving Entity
Class C Stock so surrendered for exchange. Any fractional shares of United Class
A Stock shall instead be rounded down to the nearest whole share if such
fraction is less than 0.5 and rounded up to the nearest whole share if such
fraction is equal to or greater than 0.5 and United shall issue in such exchange
the appropriate number of full shares of United Class A Stock.
SECTION 4. Procedure for Exchange. A Stockholder desiring to exchange any
shares of Surviving Entity Class C Stock pursuant to this Agreement shall
surrender the certificate or certificates representing the shares of Surviving
Entity Class C Stock to be exchanged, duly endorsed and accompanied by
instruments of transfer to the Secretary of United. Upon receipt by the
Secretary of the foregoing certificate or certificates and instruments of
transfer, United shall cause to be issued to the Stockholder who surrendered
such certificate or certificates, or such Stockholder's nominee or nominees, the
appropriate number of shares of United Class A Stock and shall issue and deliver
to such Stockholder, or such Stockholder's nominee or nominees, a certificate or
certificates representing such shares. Any such exchange shall be deemed to have
been effected at the close of business on the date such shares are surrendered
for exchange in accordance with this Agreement, and the Person or Persons
entitled to receive the shares of United Class A Stock issuable upon such
exchange shall be treated for all purposes as the record holder or holders of
such shares of United Class A Stock on that date. A number of shares of United
Class A Stock equal to the sum of (a) the number of shares issuable upon
exchange of shares of Surviving Entity Class C Stock held by Stockholders from
time to time plus (b) the number of shares issuable upon exchange of shares of
Surviving Entity Class C Stock issuable upon conversion of shares of Surviving
Entity Class A Stock outstanding from time to time shall be set aside and
reserved for issuance upon such exchange.
SECTION 5. Entire Agreement. This Agreement contains all the terms and
conditions agreed upon by the parties hereto, and no other agreements, oral or
otherwise, regarding the subject matter hereof shall have any effect unless in
writing and executed by the parties after the date of this Agreement.
SECTION 6. Applicable Law, Jurisdiction. This Agreement shall be governed by
Colorado law without regard to conflicts of law rules. The parties hereby
irrevocably submit to the exclusive jurisdiction of any Colorado State or United
States Federal court sitting in Colorado, and only a State or Federal court
sitting in Colorado will have any jurisdiction over any action or proceeding
arising out of or relating to this Agreement or any agreement contemplated
hereby, and the undersigned hereby irrevocably agree that all claims in respect
of such action or proceeding may be heard and determined in such State or
Federal court. The undersigned further waive any objection to venue in such
state and any objection to any action or proceeding in such state on the basis
of a non-convenient forum. Each party hereby IRREVOCABLY WAIVES ANY RIGHT TO
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TRIAL BY JURY in any proceeding brought with respect to this Agreement or the
transactions contemplated hereby.
SECTION 7. Remedies. Each of the parties acknowledges and agrees that in the
event of any breach of this Agreement, the nonbreaching party would be
irreparably harmed and could not be made whole by monetary damages. Accordingly,
the parties to this Agreement, in addition to any other remedy to which they may
be entitled hereunder or at law or in equity, shall be entitled to compel
specific performance of this Agreement.
SECTION 8. Headings. The headings in this Agreement are for convenience only
and are not to be considered in interpreting this Agreement.
SECTION 9. Counterpart Execution. This Agreement may be executed in any number
of counterparts, each of which shall be deemed an original but all of which will
constitute a single agreement.
SECTION 10. Parties in Interest. Nothing in this Agreement, express or
implied, is intended to confer upon any Person other than the parties hereto and
their permitted successors and assigns any benefits, rights or remedies;
provided that, Liberty is an intended beneficiary of the provisions set forth in
the antepenultimate, penultimate and final sentences of Section 2, and each of
the parties hereto acknowledges and agrees that Liberty would be irreparably
harmed by any breach of such provisions, and could not be made whole by monetary
damages. Accordingly, Liberty, in addition to any other remedy to which it may
be entitled at law or in equity as an intended beneficiary of such provisions,
shall be entitled to compel specific performance of such provisions. Neither
this Agreement nor the rights or obligations of any party may be assigned or
delegated by operation of law or otherwise without the prior written consent of
each of the parties hereto; provided that, any Person that is a Permitted
Transferee who is also a Principal or a Related Party and who is the transferee
of any shares of Surviving Entity Class A Stock or Surviving Entity Class C
Stock shall, in connection with such transfer, execute a counterpart of this
Agreement and thereupon become a party to and subject to the terms of this
Agreement as a "Stockholder."
SECTION 11. Severability. The invalidity or unenforceability of any provision
of this Agreement in any application shall not affect the validity or
enforceability of such provision in any other application or the validity or
enforceability of any other provision.
SECTION 12. Interpretation. As used herein, except as otherwise indicated
herein or as the context may otherwise require, the words "include," "includes"
and "including" are deemed to be followed by "without limitation" whether or not
they are in fact followed by such words or words of like import; the words
"hereof," "herein," "hereunder" and comparable terms refer to the entirety of
this Agreement and not to any particular section hereof; any pronoun shall
include the corresponding masculine, feminine and neuter forms; the singular
includes the plural and vice versa; references to any agreement or other
document are to such agreement or document as amended and supplemented from time
to time; references to "Section" or another subdivision are to a section or
subdivision hereof; and all references to "the date hereof," "the date of this
Agreement" or similar terms (but excluding references to the date of execution
hereof) refer to the date first above written, notwithstanding that the parties
may have executed this Agreement on a later date.
SECTION 13. Rules of Construction. The parties hereto agree that they have
been represented by counsel during the negotiation, preparation and execution of
this Agreement and, therefore, waive the application of any law, regulation,
holding or rule of construction providing that ambiguities in an agreement or
other document will be construed against the party drafting such agreement or
document.
SECTION 14. Waivers and Amendments. No waiver of any provision of this
Agreement shall be deemed a further or continuing waiver of that provision or a
waiver of any other provision of this Agreement. This Agreement may not be
amended except in a writing signed by all of the parties hereto.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first written above.
NEW UNITEDGLOBALCOM, INC.,
a Delaware corporation
By:
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Name:
Title:
[STOCKHOLDERS]
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