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Exhibit 99.34
[CONFORMED COPY]
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STOCKHOLDERS AGREEMENT
AMONG
UNIVERSAL STUDIOS, INC.,
LIBERTY MEDIA CORPORATION,
XXXXX XXXXXX,
HSN, INC.
AND
THE SEAGRAM COMPANY LTD.
DATED AS OF OCTOBER 19, 1997
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TABLE OF CONTENTS
Page
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ARTICLE I
DEFINITIONS
SECTION 1.1 Certain Defined Terms......................................... 1
SECTION 1.2 Other Defined Terms........................................... 9
SECTION 1.3 Other Definitional Provisions................................. 11
ARTICLE II
STANDSTILL
SECTION 2.1 Liberty Standstill with Universal............................. 11
ARTICLE III
CORPORATE GOVERNANCE
SECTION 3.1 Liberty Board Representation.................................. 12
SECTION 3.2 Certain Restrictions.......................................... 12
SECTION 3.3 Voting on Certain Matters..................................... 13
SECTION 3.4 Restrictions on Other Agreements.............................. 15
SECTION 3.5 Irrevocable Proxy of Universal................................ 16
SECTION 3.6 Irrevocable Proxy of Liberty.................................. 16
SECTION 3.7 Cooperation................................................... 17
ARTICLE IV
TRANSFER OF COMMON SHARES
SECTION 4.1 Restrictions on Transfer by Liberty and Xxxxxx................ 18
SECTION 4.2 Universal Purchase of Liberty Equity.......................... 20
SECTION 4.3 Going-Private Transaction..................................... 24
SECTION 4.4 Xxxxxx Right to Put Shares.................................... 25
SECTION 4.5 Tag-Along for Xxxxxx and Liberty for Transfers by Universal .. 29
SECTION 4.6 Tag-Along for Liberty for Transfers by Xxxxxx to Universal.... 30
SECTION 4.7 Tag-Along for Liberty for Transfers by Xxxxxx to a Third Party 32
SECTION 4.8 Right of First Refusal between Universal and Xxxxxx........... 33
SECTION 4.9 Right of First Refusal between Liberty and Xxxxxx............. 35
SECTION 4.10 Right of First Refusal of Universal.......................... 38
SECTION 4.11 Transfers of Class B Shares.................................. 38
SECTION 4.12 Transferees.................................................. 39
SECTION 4.13 Notice of Transfer........................................... 41
SECTION 4.14 Compliance with Transfer Provisions.......................... 41
ARTICLE V
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BDTV ENTITY ARRANGEMENTS
SECTION 5.1 Management................................................. 41
SECTION 5.2 Treatment of Contingent Shares and Exchange Shares......... 42
SECTION 5.3 Changes to BDTV Structures................................. 42
SECTION 5.4 Transfers of BDTV Interests................................ 42
ARTICLE VI
MISCELLANEOUS
SECTION 6.1 Conflicting Agreements..................................... 43
SECTION 6.2 Duration of Agreement...................................... 43
SECTION 6.3 Further Assurances......................................... 44
SECTION 6.4 SCL Agreement to Cooperate................................. 44
SECTION 6.5 Amendment and Waiver....................................... 44
SECTION 6.6 Severability............................................... 45
SECTION 6.7 Effective Date............................................. 45
SECTION 6.8 Entire Agreement........................................... 45
SECTION 6.9 Successors and Assigns..................................... 45
SECTION 6.10 Counterparts.............................................. 45
SECTION 6.11 Liabilities Under Federal Securities Laws................. 45
SECTION 6.12 Remedies.................................................. 46
SECTION 6.13 Notices................................................... 46
SECTION 6.14 Governing Law; Consent to Jurisdiction.................... 48
SECTION 6.15 Interpretation............................................ 48
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STOCKHOLDERS AGREEMENT
STOCKHOLDERS AGREEMENT dated as of October 19, 1997 among Universal
Studios, Inc., a Delaware corporation ("Universal"), for itself and on behalf of
the members of the Universal Stockholders Group, Liberty Media Corporation, a
Delaware corporation ("Liberty"), for itself and on behalf of the members of the
Liberty Stockholders Group, Xxxxx Xxxxxx ("Xxxxxx"), for himself and on behalf
of the members of the Xxxxxx Stockholders Group, HSN, Inc., a Delaware
corporation (the "Company") (solely for purposes of Sections 4.4(g), 4.5(d) and
6.3) and The Seagram Company Ltd., a Canadian corporation ("SCL") (solely for
purposes of Sections 4.2(f) and 6.4). Capitalized terms used herein without
definition have the meanings ascribed to such terms in the Investment Agreement.
WHEREAS, Universal, Liberty, the Company and Home Shopping Network,
Inc. have entered into an Investment Agreement, dated as of October 19, 1997 (as
amended and restated, as of December 18, 1997, the "Investment Agreement"),
pursuant to which (i) Universal will contribute certain domestic production and
distribution television production assets, and certain other television assets
to a newly formed subsidiary of the Company (the "LLC") in exchange for cash and
securities of the Company and the LLC, (ii) Liberty has the right under certain
circumstances to contribute assets to the LLC in exchange for securities of the
Company or the LLC and/or to purchase additional securities of the Company
and/or the LLC for cash, and (iii) Universal, Liberty, Xxxxxx and the Company
will enter into certain other agreements and arrangements referred to in the
Investment Agreement (collectively, the "Transactions");
WHEREAS, the parties under the Investment Agreement have agreed that
Universal, Liberty, Xxxxxx, the Company (solely for purposes of Sections 4.4(g),
4.5(d) and 6.3) and SCL (solely for purposes of Sections 4.2(f) and 6.4) shall
enter into this Agreement in order to specify certain of their respective rights
and obligations; and
WHEREAS, the parties hereto desire to enter into certain
arrangements relating to the Company, to be effective as of the Closing, except
that the agreements in Section 3.3(e) shall be effective as of the date hereof.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and obligations hereinafter set forth, the parties hereto hereby agree
as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 Certain Defined Terms. As used herein, the following
terms shall have the following meanings:
"Affiliate" means, with respect to any Person, any other Person that
directly, or indirectly through one or more intermediaries, controls, is
controlled by or is under common
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control with, such specified Person, for so long as such Person remains so
associated to the specified Person. For purposes of this definition, (i)
Matsushita Electric Industrial Co., Ltd. ("MEI") shall not be considered an
Affiliate of Universal or any Subsidiary of Universal so long as MEI does not
materially increase its influence over Universal or any such Subsidiary
following the date hereof and (ii) natural persons shall not be deemed to be
Affiliates (other than, in the case of Universal, any descendant of Xxxxxx
Xxxxxxxx who is a director or executive officer of SCL).
"Agreement" means this Stockholders Agreement as it may be amended,
supplemented, restated or modified from time to time.
"Approved Shares" has the meaning ascribed to such term in Exhibit A
to the Merger Agreement.
"beneficial owner" or "beneficially own" has the meaning given such
term in Rule 13d-3 under the Exchange Act and a Person's beneficial ownership of
Common Shares, LLC Shares or Voting Securities shall be calculated in accordance
with the provisions of such Rule; provided, however, that for purposes of
determining beneficial ownership, (i) a Person shall be deemed to be the
beneficial owner of any equity (including all Contingent Shares and Exchange
Shares) which may be acquired by such Person (disregarding any legal impediments
to such beneficial ownership), whether within 60 days or thereafter, upon the
conversion, exchange or exercise of any warrants, options (which options held by
Xxxxxx shall be deemed to be exercisable, other than with respect to the Xxxxxx
Put), rights or other securities (including LLC Shares) issued by the Company or
any Subsidiary thereof, (ii) no Person shall be deemed to beneficially own any
equity solely as a result of such Person's execution of this Agreement
(including by virtue of holding a proxy with respect to any shares or having a
put obligation or call right with respect to any shares) or any other
Transaction Agreement, (iii) Liberty shall be deemed to be the beneficial owner
of the proportionate number of Common Shares represented by Liberty's equity
interest in a BDTV Entity, other than for purposes of Articles III and V of this
Agreement and (iv) Universal shall be deemed to be the beneficial owner of any
shares subject to an option pursuant to Section 4.1(d); provided, further, that
for purposes of calculating beneficial ownership, the number of outstanding
Common Shares of the Company shall be deemed to include the number of Common
Shares that would be outstanding if all outstanding LLC Shares were exchanged
for Common Shares pursuant to the Exchange Agreement and all Contingent Shares
and Exchange Shares were issued. Notwithstanding the foregoing, for purposes of
calculating the Minimum Stockholder Amount, a person shall be deemed to be the
beneficial owner only of outstanding Common Shares.
"BDTV I" means BDTV, Inc., a Delaware corporation.
"BDTV II" means BDTV II, Inc., a Delaware corporation.
"BDTV III" means BDTV III, Inc., a Delaware corporation.
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"BDTV Entities" means, collectively, the BDTV Limited Entities and
the BDTV Unrestricted Entities.
"BDTV Limited Entities" means, collectively, BDTV I and BDTV II.
"BDTV Unrestricted Entities" means BDTV III and each other BDTV
Entity that may be formed subsequent to the date hereof; provided that each of
Liberty and Xxxxxx acknowledges and agrees that any corporation, partnership,
limited liability company or other business association hereafter formed by
Xxxxxx and Liberty to hold Common Shares will be a BDTV Unrestricted Entity and
will be a corporation, partnership, limited liability company or other business
association having a capital structure and governance rights substantially
similar to that of BDTV III.
"Board" means the Board of Directors of the Company.
"Business Day" shall mean any day that is not a Saturday, a Sunday
or other day on which banks are required or authorized by law to be closed in
The City of New York.
"Capital Stock" means, with respect to any Person at any time, any
and all shares, interests, participations or other equivalents (however
designated, whether voting or non-voting) of capital stock, partnership
interests (whether general or limited) or equivalent ownership interests in or
issued by such Person.
"Cause" means (i) the conviction of, or pleading guilty to, any
felony, or (ii) the wilful, continued and complete failure to attend to managing
the business affairs of the Company, after written notice of such failure from
the Board and reasonable opportunity to cure.
"CEO" means the Chief Executive Officer of the Company.
"CEO Termination Date" means the later of (i) such time as Xxxxxx no
longer serves as CEO and (ii) such time as Xxxxxx no longer holds the Universal
Proxy.
"Class B Common Stock" means the Class B common stock, par value
$.01 per share, of the Company and any securities issued in respect thereof, or
in substitution therefor, in connection with any stock split, dividend or
combination, or any reclassification, recapitalization, merger, consolidation,
exchange or other similar reorganization (other than Common Stock).
"Closing" has the meaning ascribed to such term in the Investment
Agreement.
"Commission" means the Securities and Exchange Commission, and any
successor commission or agency having similar powers.
"Common Shares" means, collectively, the Common Stock and the Class
B Common Stock.
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"Common Stock" means the common stock, par value $.01 per share, of
the Company and any securities issued in respect thereof, or in substitution
therefor, in connection with any stock split, dividend or combination, or any
reclassification, recapitalization, merger, consolidation, exchange or other
similar reorganization.
"Contingent Right" means the right of Liberty HSN to receive the
Contingent Shares pursuant to the Merger Agreement.
"Contingent Shares" means the shares of Class B Common Stock (or
other securities) which the Company is obligated to issue to Liberty HSN
following the Effective Time (as defined in the Merger Agreement) pursuant to
Exhibit A to the Merger Agreement.
"control" (including the terms "controlled by" and "under common
control with"), with respect to the relationship between or among two or more
Persons, means the possession, directly or indirectly, of the power to direct or
cause the direction of the affairs or management of a Person, whether through
the ownership of voting securities, as trustee or executor, by contract or
otherwise.
"Current Market Value" means, with respect to any security, the
average of the daily closing prices on the Nasdaq National Market (or the
principal exchange or market on which such security may be listed or may trade)
for such security for the 20 consecutive trading days commencing on the 22nd
trading day prior to the date as of which the Current Market Value is being
determined. The closing price for each day shall be the closing price, if
reported, or, if the closing price is not reported, the average of the closing
bid and asked prices as reported by the Nasdaq National Market (or such
principal exchange or market) or a similar source selected from time to time by
the Company for such purpose. In the event such closing prices are unavailable,
the Current Market Value shall be the Fair Market Value of such security
established by independent investment banking firms in accordance with the
procedures specified in Section 4.2(d). For purposes of this Agreement, the
Current Market Value of a share of Class B Common Stock shall be equal to the
Current Market Value of a share of Common Stock.
"Xxxxxx Interest Purchase Price" means the cash amount (or cash
value of equity) invested by Xxxxxx in a BDTV Entity plus interest, from the
date of such contribution to the date of purchase, on such amount at the rate of
interest per annum in effect from time to time and publicly announced by The
Bank of New York as its prime rate of interest, compounded annually. For
purposes of BDTV I, BDTV II and BDTV III, the cash amount (or cash value of
equity) invested by Xxxxxx is $100.
"Xxxxxx Note" means the promissory note by Xxxxxx in favor of the
Company, dated as of August 24, 1995.
"Xxxxxx Stockholder Group" means Xxxxxx and Xxxxxx'x 90% owned and
controlled Affiliates.
"Director" means any member of the Board.
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"Disabled" means the disability of Xxxxxx after the expiration of
more than 180 consecutive days after its commencement which is determined to be
total and permanent by a physician selected by Universal (or if the Universal
Termination Date has occurred, Liberty) and reasonably acceptable to Xxxxxx;
provided that Xxxxxx shall be deemed to be disabled only following the
expiration of 90 days following receipt of a written notice from the Company and
such physician specifying that a disability has occurred if within such 90-day
period he fails to return to managing the business affairs of the Company. A
total disability shall mean mental or physical incapacity that prevents Xxxxxx
from managing the business affairs of the Company.
"Eligible Stockholder Amount" means, in the case of Xxxxxx, the
equivalent of 1,100,000 Common Shares and, in the case of Liberty (including, in
the case of Liberty, the proportionate number of Common Shares represented by
Liberty's equity interest in any BDTV Entity and Common Shares issuable to
Liberty or a member of the Liberty Stockholder Group pursuant to the Contingent
Rights and the Holder Exchange Agreement), 1,000,000 shares of Common Stock, in
each case determined on a fully diluted basis (taking into account, in the case
of Xxxxxx, all unexercised Options, whether or not then exercisable).
"Equity" means any and all shares of Capital Stock of the Company,
securities of the Company convertible into, or exchangeable for, such shares
(including, without limitation, the Contingent Shares, the Exchange Shares and
the LLC Shares), and options, warrants or other rights to acquire such shares.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Exchange Agreement" means the exchange agreement, of even date
herewith, among Universal, Liberty and the Company, as it may be amended,
supplemented, restated or modified from time to time.
"Exchange Shares" means the Silver King Exchange Shares as defined
in the Holder Exchange Agreement.
"Fair Market Value" means, as to any securities or other property,
the cash price at which a willing seller would sell and a willing buyer would
buy such securities or property in an arm's-length negotiated transaction
without time constraints.
"FCC" means the Federal Communications Commission or its successor.
"FCC Regulations" means, as of any date, all federal communications
statutes and all rules, regulations, orders, decrees and policies of the FCC as
then in effect, and any interpretations or waivers thereof or modifications
thereto.
"Fundamental Changes" shall have the meaning ascribed to such term
in the Governance Agreement.
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"Governance Agreement" means the Governance Agreement, among the
Company, Xxxxxx, Universal and Liberty, dated as of even date herewith, as it
may be amended, supplemented, restated or modified from time to time.
"Group" shall have the meaning assigned to it in Section 13(d)(3) of
the Exchange Act.
"Holder Exchange Agreement" means the Exchange Agreement, dated as
of December 20, 1996, by and between the Company and Liberty.
"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended.
"Independent Investment Banking Firm" means an investment banking
firm of nationally recognized standing that is, in the reasonable judgment of
the Person engaging such firm, qualified to perform the task for which it has
been engaged.
"Initial Interest" means, with respect to any Stockholder, all of
the Common Shares beneficially owned by such Stockholder and its Permitted
Transferees immediately following the Closing.
"Liberty HSN" means Liberty HSN, Inc., a Colorado corporation.
"Liberty Stockholder Group" means Liberty and those Subsidiaries of
Liberty or TCI that, from time to time, hold Equity subject to this Agreement.
"Liquid Securities" means (i) common equity securities of the
Universal Parent Company which are publicly traded on a national securities
exchange or quoted on the Nasdaq National Market of the class or series with the
largest public float of any class or series of such securities or (ii)
securities of Universal (or any holding company of Universal that directly or
indirectly beneficially owns 100% of the equity of Universal (Universal or any
such holding company being hereinafter referred to as the "Issuer")) which are
publicly traded on a national securities exchange or quoted on the Nasdaq
National Market; provided that the aggregate market value of the Universal
Liquid Securities received by Liberty pursuant to Section 4.2 or 4.3 shall, on
the date of receipt, represent not more than one-third of the aggregate market
value of all such outstanding securities on such date (other than the securities
beneficially owned by any Affiliate of the Issuer or Liberty) (such securities
of the Issuer, the "Universal Liquid Securities").
"LLC" means USANi, LLC, a Delaware limited liability company and a
subsidiary of the Company, and any of its successors.
"LLC Shares" means shares representing a proportionate interest in
the capital and profits and losses of the LLC.
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"Market Sale" means a "brokers' transaction" within the meaning of
Section 4(4) of the Securities Act.
"Merger Agreement" means the Agreement and Plan of Exchange and
Merger, dated as of August 25, 1996, among the Company (formerly Silver King
Communications, Inc.), House Acquisition Corp., Liberty HSN and Home Shopping
Network, Inc.
"Minimum Stockholder Amount" means Common Shares representing at
least 50.1% of the outstanding voting power of the outstanding Common Shares.
"Non-Liquid Securities" means securities of the Issuer other than
Liquid Securities.
"Options" means options to acquire capital stock of the Company
granted by the Company to Xxxxxx and outstanding from time to time.
"Permitted Business Combination" shall mean (x) a tender or exchange
offer by Universal or an Affiliate for all the Common Shares of the Company that
is accepted by a majority of the Company's Public Stockholders or (y) a merger
(other than a merger following a tender or exchange offer complying with (x)
above) involving the Company and Universal or an Affiliate that is approved, in
addition to any vote required by law, by a majority of the Company's Public
Stockholders so long as, in the case of (x) and (y) above, a committee of the
Directors (excluding any Directors designated by Universal or Liberty pursuant
to the terms of the Governance Agreement, as it may be amended, modified or
waived from time to time, and any other directors who have a conflict of
interest) determines that the tender offer, exchange offer or merger, as the
case may be, is fair to the Company's stockholders (other than Universal and its
Affiliates).
"Permitted Designee" means any Person designated by a Stockholder,
who shall be reasonably acceptable to the other Stockholders, to exercise such
Stockholder's rights pursuant to Section 4.2, 4.4, 4.8 or 4.9.
"Permitted Transferee" means (i) with respect to Liberty, any of its
Subsidiaries or any Subsidiary of TCI, (ii) with respect to Universal, the
Universal Parent Company and any Subsidiary of the Universal Parent Company, and
(iii) with respect to Xxxxxx, any of his 90% owned and controlled Affiliates. In
addition, each of Liberty, Universal and Xxxxxx shall each be a Permitted
Transferee of its respective Permitted Transferees.
"Person" means any individual, corporation, limited liability
company, limited or general partnership, joint venture, association, joint-stock
company, trust, unincorporated organization, government or any agency or
political subdivisions thereof or any Group comprised of two or more of the
foregoing.
"Public Stockholders" means any stockholder of the Company that,
together with its Affiliates (a) has sole or shared voting power with respect to
Voting Securities representing no more than 10% of the voting power on the
applicable vote or (b) has sole or
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shared power to dispose of Equity representing no more than 10% of the Equity to
be tendered or exchanged in any applicable tender or exchange offer, as the case
may be.
"Put Provision" means the right of Liberty to cause Universal to
purchase Non-Liquid Securities described in Section 4.2(f).
"Reference Rate" means, for any day, a fixed rate per annum equal to
the yield, expressed as a percentage per annum, obtained at the official auction
of 90-day United States Treasury Bills most recently preceding the date thereof
plus 100 basis points.
"Securities Act" means the Securities Act of 1933, as amended.
"Spin-Off Agreement" means the agreement, dated as of October 19,
1997, among Universal, Liberty and the Company relating to the disposition of
certain businesses of the Company in certain circumstances, as it may be
amended, supplemented, restated or modified from time to time.
"Stockholder" means each of Universal, Liberty and Xxxxxx.
"Stockholder Group" means one or more of the Xxxxxx Stockholder
Group, the Liberty Stockholder Group and the Universal Stockholder Group. For
purposes of this Agreement, (i) prior to the time that Liberty acquires Xxxxxx'x
interest in a BDTV Entity, each BDTV Entity shall be deemed to be a member of
the Liberty Stockholder Group except as otherwise expressly set forth herein and
(ii) a Permitted Designee shall be deemed to be a member of a Stockholder's
Stockholder Group (other than for purposes of Section 4.1(a)(x)).
"Subsidiary" means, with respect to any Person, any corporation or
other entity of which at least a majority of the voting power of the voting
equity securities or equity interest is owned, directly or indirectly, by such
Person.
"TCI" means Tele-Communications, Inc., a Delaware corporation and
the parent of Liberty.
"Third Party Transferee" means any Person to whom a Stockholder
(including a Third Party Transferee subject to this Agreement pursuant to
Sections 4.12(b) and 4.12(c)) or a Permitted Transferee Transfers Common Shares,
other than a Permitted Transferee of such Stockholder or a member of another
Stockholder Group.
"Transaction Agreements" means each of the agreements specified in
or contemplated by Sections 9.3 and 9.4(b) of the Investment Agreement.
"Transfer" means, directly or indirectly, to sell, transfer, assign,
pledge, encumber, hypothecate or similarly dispose of, either voluntarily or
involuntarily, or to enter into any contract, option or other arrangement or
understanding with respect to the sale, transfer, assignment, pledge,
encumbrance, hypothecation or similar disposition of, any Common Shares
beneficially owned by a Stockholder or any interest in any Common Shares
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beneficially owned by a Stockholder, provided, however, that a merger or
consolidation in which a Stockholder is a constituent corporation shall not be
deemed to be the Transfer of any Common Shares beneficially owned by such
Stockholder (provided, that a significant purpose of any such transaction is not
to avoid the provisions of this Agreement). For purposes of this Agreement, the
conversion of shares of Class B Common Stock into shares of Common Stock shall
not be deemed to be a Transfer.
"Universal Parent Company" means SCL and any of its successors.
"Universal Standstill Termination Date" means the Standstill
Termination Date as defined in the Governance Agreement.
"Universal Stockholder Group" means Universal, together with the
Universal Parent Company and any Subsidiary of the Universal Parent Company
that, from time to time, hold Equity subject to this Agreement.
"Voting Securities" means at any time shares of any class of capital
stock of the Company which are then entitled to vote generally in the election
of Directors.
SECTION 1.2 Other Defined Terms. The following terms shall have the
meanings defined for such terms in the Sections set forth below:
Term Section
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Aggrieved Stockholder Section 6.11(c)
Appraisal Section 4.2(d)
Appraised Value Section 4.2(c)
Call Notice Section 4.2(a)
Call Right Section 4.2(a)
Cash Consideration Section 4.2(g)
Company Preamble
Covered Market Sale Section 4.8(a)
Xxxxxx Preamble
Xxxxxx Departure Section 4.2(c)
Xxxxxx Loan Amount Section 4.1(f)
Xxxxxx Put Section 4.4(a)
Xxxxxx Put Closing Date Section 4.4(d)
Xxxxxx Put Event Section 4.4(a)
Xxxxxx Put Event Date Section 4.4(a)
Xxxxxx Put Event Shares Section 4.4(a)
Xxxxxx Put Notice Section 4.4(a)
Xxxxxx Put Shares Section 4.4(a)
Xxxxxx Share Put Price Section 4.4(b)
Xxxxxx Tag-Along Notice Section 4.7(a)
Xxxxxx Tag-Along Sale Section 4.7(a)
Xxxxxx Tag-Along Shares Section 4.7(a)
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Xxxxxx Termination Date Section 6.2(a)
Escrow Section 4.4(f)
Excess Interest Section 4.3
Exchange Notice Section 4.11(a)
Investment Agreement Recitals
L/D Offer Notice Section 4.9(b)
L/D Offer Price Section 4.9(c)
L/D Other Party Section 4.9(b)
L/D Transferring Party Section 4.9(a)
Liberty Preamble
Liberty Proxy Section 3.6(a)
Liberty Proxy Shares Section 3.6(a)
Liberty Purchase Price Section 4.2(c)
Liberty Put Right Section 4.2(b)
Liberty Termination Date Section 6.2(b)
Litigation Section 6.12
Market Value Section 4.2(f)
Net Proceeds Section 4.2(g)
Non-Liquid Purchase Price Section 4.2(f)
Non-Transferring Stockholder Section 4.11(a)
Offer Notice Section 4.8(b)
Offer Price Section 4.8(c)
Other Stockholder Section 4.8(b)
Ownership Percentage Section 2.1
Permitted Ownership Percentage Section 2.1
Prime Rate Section 4.4(f)
Publicly Traded Section 4.2(f)
Put Notice Section 4.2(b)
Put Provision Section 4.2(f)
Put Provision Notice Section 4.2(f)
Sale Period Section 4.2(g)
SCL Threshhold Section 4.2(f)
Shortfall Amount Section 4.2(g)
Shortfall Provisions Section 4.2(g)
Specified Votes Section 4.1(c)
Standstill Termination Date Section 2.1
Stockholder Tag-Along Notice Section 4.6(b)
Stockholder Tag-Along Sale Section 4.6(b)
Stockholder Tag-Along Shares Section 4.6(b)
Tag-Along Offeree Section 4.5(a)
Transactions Preamble
Transferring Party Section 4.8(a)
Transferring Stockholders Section 4.11(a)
Universal Preamble
Universal Proxy Section 3.5(a)
Universal Proxy Shares Section 3.5(a)
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Universal Tag-Along Notice Section 4.5(a)
Universal Tag-Along Sale Section 4.5(a)
Universal Tag-Along Shares Section 4.5(a)
Universal Termination Date Section 6.2(a)
Weighted Average Market Price Section 4.4(b)
SECTION 1.3 Other Definitional Provisions. (a) The words "hereof",
"herein" and "hereunder" and words of similar import when used in this Agreement
shall refer to this Agreement as a whole and not to any particular provision of
this Agreement, and Article and Section references are to this Agreement unless
otherwise specified.
(b) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
(c) For purposes of calculating the amount of outstanding Common
Shares or Equity as of any date and the number of Common Shares or Equity
beneficially owned by any Person as of any date, (i) any Common Shares held in
the Company's treasury or owned by any Subsidiaries of the Company shall be
disregarded, (ii) all LLC Shares beneficially owned by Universal and Liberty
shall be assumed to have been converted into Common Shares in accordance with
the provisions of the Exchange Agreement and (iii) all Contingent Shares and
Exchange Shares and any other securities of the Company issued to Liberty or
Universal in accordance with the exercise of its respective preemptive rights
pursuant to Section 1.8 or 1.7 of the Investment Agreement, respectively, shall
be assumed to have been converted into Common Shares. Notwithstanding the
foregoing, for purposes of calculating the Minimum Stockholder Amount and the
voting power for purposes of Section 4.4(f) (other than clause (B)(x) thereof)
and 4.5(a) (other than clause (ii)(x) thereof), only the number of Common Shares
actually outstanding shall be included in such calculation.
ARTICLE II
STANDSTILL
SECTION 2.1 Liberty Standstill with Universal. Liberty covenants and
agrees with Universal that, from and after the Closing and until the earlier to
occur of (i) the Liberty Termination Date and (ii) such date as Universal
beneficially owns fewer Common Shares than Liberty beneficially owns (the
"Standstill Termination Date"):
(a) neither Liberty nor any of its Affiliates will (x) acquire,
directly or indirectly, the beneficial ownership of any additional Equity of the
Company such that the Common Shares beneficially owned by Liberty and its
Affiliates (the "Ownership Percentage") following such acquisition would
represent in the aggregate more than the greater of (A) 20% and (B) the
percentage of Common Shares beneficially owned by Liberty following any Holder
Closing (as defined in Section 1.5(f) of the Investment Agreement) up to 25%
(the "Permitted Ownership Percentage") of all outstanding Common Shares;
provided that if Liberty (i) fails to elect to exercise its preemptive rights
pursuant to Section 1.8 of the Investment Agreement or (ii) prior to the
Universal Standstill Termination Date, Transfers any
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Equity, the Permitted Ownership Percentage shall be reduced to reflect such
lower Ownership Percentage of Liberty following such failure to elect or such
Transfer (provided, that if Liberty's initial Ownership Percentage is less than
20%, such reduction shall be calculated as if Liberty's initial Ownership
Percentage were 20%) or (y) propose to the Board the acquisition by Liberty and
its Affiliates of the then outstanding Equity not owned by Liberty in a merger,
tender offer or other business combination.
(b) Notwithstanding anything to the contrary herein, (i) except as
expressly provided herein, neither Liberty nor any Affiliate thereof shall
permit any entity in which it beneficially owns, directly or indirectly, in
excess of 50% of the outstanding voting securities (regardless of whether
Liberty or such Affiliate acquires beneficial ownership of such entity after the
date of this Agreement) to beneficially own any Common Shares. Notwithstanding
the foregoing, the acquisition (whether by merger, consolidation or otherwise)
by Liberty or any Affiliate thereof of any entity that beneficially owns Common
Shares shall not constitute a violation of the Permitted Ownership Percentage;
provided that a significant purpose of any such transaction is not to avoid the
provisions of this Agreement; and provided, further that the provisions of
clause (ii) below are complied with and (ii) except as set forth in the next
sentence, if at any time Liberty becomes aware that it and its Affiliates
beneficially own more than the Permitted Ownership Percentage (including by
virtue of acquisitions referred to in clause (i) above), then Liberty, subject
to the next sentence, shall as soon as is reasonably practicable (but in no
manner that would require Liberty to incur liability under Section 16(b) of the
Exchange Act) take all action necessary to reduce the amount of Common Shares
beneficially owned by such Persons to an amount not greater than the Permitted
Ownership Percentage. If the Ownership Percentage of Liberty and its Affiliates
exceeds the Permitted Ownership Percentage solely by reason of repurchases of
Common Shares by the Company, then Liberty shall not be required to reduce the
amount of the Common Shares beneficially owned by such Persons (except that
Liberty shall not exercise its preemptive rights under the Investment Agreement
to maintain such higher Ownership Percentage).
ARTICLE III
CORPORATE GOVERNANCE
SECTION 3.1 Liberty Board Representation. From and after the Closing
and until the Standstill Termination Date, Liberty shall not be entitled to
designate for nomination more than two directors for election to the Board,
subject to applicable law, including FCC Regulations.
SECTION 3.2 Certain Restrictions. Except as set forth in the
Investment Agreement and the Transaction Agreements, without the prior written
consent of Universal, prior to the earlier of the Liberty Termination Date and
the Standstill Termination Date, Liberty agrees not to, and to cause each of its
Affiliates not to, directly or indirectly, alone or in concert with others:
(a) seek election to, seek to place a representative on, or seek the
removal (other than for cause) of any member of, the Board, act alone or in
concert with others to
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seek to affect or influence the control of the management or Board or the
business, operations or policies of the Company except by virtue of Liberty's
representation on the Board of the Company or LLC Board pursuant to Section
2.02(e) of the Governance Agreement and as otherwise contemplated by the
Governance Agreement (including the right to consent to Fundamental Changes
pursuant to Section 2.04 of the Governance Agreement) and the other Transaction
Agreements (it being agreed that this paragraph shall not prohibit Liberty, its
Affiliates and their respective employees from engaging in ordinary course
business activities with the Company);
(b) other than to a Permitted Transferee or pursuant to this
Agreement, deposit any Equity in a voting trust or subject any Equity to any
proxy, arrangement or agreement with respect to the voting of such securities or
other agreement having a similar effect, except for agreements or arrangements
with a Permitted Designee reasonably acceptable to the other Stockholders and
not inconsistent with or for the purpose of evading the terms of this Agreement;
(c) other than as is permitted by this Agreement, propose any
acquisition of the Company (whether by merger, tender offer or otherwise);
(d) except as permitted by Section 4.3, initiate or propose any
stockholder proposal or make, or in any way participate in, directly or
indirectly, any "solicitation" of "proxies" to vote, or seek to influence any
Person with respect to the voting of, any Equity, or become a "participant" in a
"solicitation" (as such terms are defined in Regulation 14A under the Exchange
Act) in opposition to the recommendation of the majority of the Directors with
respect to any matter except (x) in response to a solicitation by a third party
and (y) to facilitate a tender or exchange offer by Liberty or an Affiliate
permitted under the Governance Agreement in response to a third party tender or
exchange offer for more than a majority of the outstanding Common Shares,
provided such third party tender or exchange offer is being recommended against
by the Board;
(e) other than as is contemplated by this Agreement, the Governance
Agreement, the Investment Agreement and the Transaction Agreements, join a
partnership, limited partnership, syndicate or other Group, or otherwise act in
concert with any other Person (other than a Permitted Transferee or Universal or
Xxxxxx), for the purpose of acquiring, holding, voting or disposing of Equity,
or otherwise become a "person" within the meaning of Section 13(d)(3) of the
Exchange Act; or
(f) request that the Company or the Board amend or waive any of the
provisions of this Section 3.2;
provided, that Liberty will not be deemed to be in violation of this Section 3.2
as a result of any action by Xxxxxx (including by a BDTV Entity as a result of
an action by Xxxxxx) that is not within Liberty's control.
SECTION 3.3 Voting on Certain Matters. (a) In connection with any
vote or action by written consent of the stockholders of the Company relating to
any matter that
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constitutes a Fundamental Change, subject to Section 4.2 hereof, each
Stockholder agrees (and agrees to cause each member of its Stockholders Group,
if applicable), with respect to any Common Shares with respect to which it or he
has the power to vote (whether by proxy, the ownership of voting securities of a
BDTV Entity or otherwise) (including all shares held by any BDTV Entity), to
vote against (and not act by written consent to approve) such Fundamental Change
(including not voting or not executing a written consent with respect to the
Common Shares beneficially owned by a BDTV Entity) if any Stockholder has not
consented to such Fundamental Change in accordance with the provisions of the
Governance Agreement and to take or cause to be taken all other reasonable
actions required, to the extent permitted by law, to prevent the taking of any
action by the Company with respect to a Fundamental Change without the consent
of each such Stockholder who has the right to consent to such Fundamental Change
pursuant to the terms of the Governance Agreement.
(b) Each of Liberty and Xxxxxx agrees to vote (and cause each member
of its or his Stockholder Group to vote, if applicable), or act by written
consent with respect to any Common Shares with respect to which it or he has the
power to vote (whether by proxy, the ownership of voting securities of a BDTV
Entity or otherwise) (including all shares held by any BDTV Entity) in favor of
each of the designees of Universal which Universal has a right to designate
pursuant to the Governance Agreement. At such time as Liberty shall be entitled
to designate directors to the Board pursuant to the terms of the Governance
Agreement, each of Universal and Xxxxxx agrees to vote (and cause each member of
its or his Stockholders Group to vote, if applicable), or act by written consent
with respect to, any Common Shares with respect to which it or he has the power
to vote (whether by proxy, the ownership of voting securities of a BDTV Entity
or otherwise) (including all shares held by any BDTV Entity) in favor of each of
the designees of Liberty.
(c) Upon the written request of Universal or Liberty, each
Stockholder, in such Stockholder's capacity as a stockholder only, agrees to
vote (and cause each member of its Stockholders Group to vote, if applicable),
or act by written consent with respect to any Common Shares with respect to
which it or he has the power to vote (whether by proxy, the ownership of voting
securities of a BDTV Entity or otherwise) (including all shares held by any BDTV
Entity) and otherwise take or cause to be taken all actions necessary to remove
any Director designated by such requesting party and to elect any replacement
Director designated by such party as provided in the Governance Agreement.
Unless all the Stockholders otherwise agree, no Stockholder or any member of its
Stockholders Group shall take any action to cause the removal of any Director
designated by Universal or any Director designated by Liberty except (i) in the
case of a Director designated by Universal, upon the written request of
Universal, and (ii) in the case of a Director designated by Liberty, upon the
written request of Liberty; provided, however, that any required approval of the
FCC shall have been obtained prior to so doing.
(d) Subject to applicable law, Universal and Xxxxxx agree that
following the CEO Termination Date or such date that Xxxxxx becomes Disabled and
so long as Xxxxxx beneficially owns Voting Securities representing at least 7.5%
of the outstanding Voting Securities (excluding Voting Securities beneficially
owned by Liberty and Universal), Xxxxxx shall vote (and cause each member of his
Stockholders Group to vote, if applicable), or act by
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written consent with respect to any Common Shares beneficially owned by him or
with respect to which he has the power to vote (whether by proxy, ownership of
voting securities of a BDTV Entity or otherwise), at Universal's option
exercised by written notice to Xxxxxx delivered at least 5 Business Days prior
to the date of the meeting applicable to the vote or the date by which consents
in writing must be delivered, either (i) in his own discretion or (ii) in the
same proportion as the Public Stockholders vote their shares of Common Stock. In
the event that Universal elects clause (ii) of this paragraph (d), it shall be
Universal's responsibility to coordinate with the Company's tabulation agent so
that Xxxxxx'x vote in accordance with such clause shall be given effect. The
rights and obligations of Universal and Xxxxxx under this Section 3.3(d) shall
terminate when Universal is no longer entitled to designate at least two
Directors. In addition to the foregoing, Xxxxxx agrees, subject to his
Disability, to use his reasonable efforts to facilitate any FCC approvals
required in connection with the transactions or events contemplated by the
Spin-Off Agreement or this Agreement in the event of the CEO Termination Date or
his Disability.
(e) For purposes of Sections 3.3 and 3.6 and Article V of this
Agreement as well as the stockholders agreement in effect as of the date hereof
between Liberty and Xxxxxx, each of Liberty and Xxxxxx hereby consents and
agrees to the taking of any action by any of Xxxxxx, a BDTV Entity or Liberty,
which action is reasonably necessary or appropriate to approve and consummate
the transactions pursuant to the Investment Agreement (other than a spin-off in
accordance with Section 9.14 of the Investment Agreement) and the Transaction
Agreements (and including the additional incentive compensation arrangements
relating to Xxxxxx). Neither Xxxxxx nor Liberty shall enter into, or permit any
material amendment to, or waiver or modification of material rights or
obligations under the Investment Agreement or the Transaction Agreements
(including by the Company) without the prior written consent of the other
Stockholder. The consent granted by the first sentence of this paragraph is
intended to be specifically limited by the foregoing sentence.
(f) Liberty will not be deemed to be in violation of paragraphs (a),
(b) or (c) of this Section 3.3 as a result of any action by Xxxxxx (including by
a BDTV Entity as a result of an action by Xxxxxx) that is not within Liberty's
control.
SECTION 3.4 Restrictions on Other Agreements. No Stockholder or any
of its or his Permitted Transferees shall enter into or agree to be bound by any
stockholder agreements or arrangements of any kind with any Person with respect
to any Equity (including, without limitation, the deposit of any Common Shares
in a voting trust or forming, joining or in any way participating in or
assisting in the formation of a Group with respect to any Common Shares, other
than any such Group consisting exclusively of Liberty, Universal and Xxxxxx and
any of their respective Affiliates and Permitted Transferees) and no Stockholder
(other than Universal or Liberty or any of their respective Permitted
Transferees) or any of its or his Permitted Transferees shall enter into or
agree to be bound by any agreements or arrangements of any kind with any Person
to incur indebtedness for purposes of purchasing Equity (other than to exercise
Options or to purchase Common Shares pursuant to Section 4.8 or 4.9 of this
Agreement), except (i) for such agreements or arrangements as are now in effect
or as are contemplated by the Transaction Agreements, (ii) as contemplated by or
in connection with the Stock Exchange Agreement, dated May 20, 1997, between
Xxxx
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X. Xxxxx and the Company, (iii) in connection with a proposed sale of BDTV
Entity securities or Common Shares otherwise permitted hereunder or (iv) for
such agreements or arrangements with a Permitted Designee reasonably acceptable
to the other Stockholders and not inconsistent with or for the purpose of
evading the terms of this Agreement.
SECTION 3.5 Irrevocable Proxy of Universal. (a) Subject to
paragraphs (b) and (c) below, until the earlier of the date that (x) Xxxxxx is
no longer CEO or (y) Xxxxxx is Disabled, Xxxxxx shall be entitled to exercise
voting authority and authority to act by written consent over all Common Shares
beneficially owned by each member of the Universal Stockholder Group (the
"Universal Proxy Shares") on all matters submitted to a vote of the Company's
stockholders or by which the Company's stockholders may act by written consent
pursuant to a conditional proxy (which proxy is irrevocable and coupled with an
interest for purposes of Section 212 of the Delaware General Corporation Law)
(the "Universal Proxy"); provided, that in the event that Xxxxxx is removed by
the Board as CEO for any reason other than Cause, Xxxxxx shall be deemed to
continue to be CEO hereunder and shall be entitled to exercise the Universal
Proxy set forth herein until the earlier of (A) such time as he has abandoned
efforts to cause his reinstatement as CEO and (B) the next stockholders meeting
of the Company at which he had an adequate opportunity to nominate and elect his
slate of directors (unless at such stockholders meeting Xxxxxx'x slate of
directors is elected and Xxxxxx is promptly thereafter reinstated as CEO).
(b) Notwithstanding the foregoing, the Universal Proxy shall not be
valid with respect to any of the Universal Proxy Shares in connection with any
vote for (or consent to approve) any matter that is a Fundamental Change which
Universal has the right to consent to pursuant to the terms of the Governance
Agreement and with respect to which Universal has not consented.
(c) The Universal Proxy shall terminate as provided for in Section
3.5(a) or, if earlier, (i) immediately upon a material breach by Xxxxxx of the
terms of Section 3.3(a), the first sentence of Section 3.3(b), Section 3.3(c)
(as applicable to Universal) or Section 3.5(b) of this Agreement, (ii) at such
time as Xxxxxx has been convicted of, or has pleaded guilty to, any felony
involving moral turpitude or (iii) at such time as Xxxxxx ceases to beneficially
own 5,000,000 Common Shares with respect to which he has a pecuniary interest;
provided, in the case of clauses (ii) and (iii) above, that Universal sends
notice of such termination to Xxxxxx within 30 days after the event giving rise
to such termination, in which case the Universal Proxy shall terminate
immediately upon the receipt of such notice.
(d) Notwithstanding anything to the contrary set forth in this
Agreement, the Universal Proxy is personal to Xxxxxx and may not be assigned by
Xxxxxx by operation of law or otherwise and shall not inure to Xxxxxx'x
successors without the prior written consent of Universal.
SECTION 3.6 Irrevocable Proxy of Liberty. (a) Until the earlier of
such time as Xxxxxx ceases to be entitled to exercise rights under this Section
3.6 pursuant to Section 6.2(c) or the Liberty Termination Date, Xxxxxx shall be
entitled to exercise voting authority and authority to act by written consent
over all Common Shares beneficially owned by each
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member of the Liberty Stockholder Group (the "Liberty Proxy Shares"), on all
matters submitted to a vote of the Company's stockholders or by which the
Company's stockholders may act by written consent pursuant to a conditional
proxy (which proxy is irrevocable and coupled with an interest for purposes of
Section 212 of the Delaware General Corporation Law) (the "Liberty Proxy");
provided, that in the event that Xxxxxx is removed by the Board as CEO for any
reason other than Cause, Xxxxxx shall be deemed to continue to be CEO hereunder
and shall be entitled to exercise the Liberty Proxy set forth herein until the
earlier of (A) such time as he has abandoned efforts to cause his reinstatement
as CEO and (B) the next stockholders meeting of the Company at which he had an
adequate opportunity to nominate and elect his slate of directors (unless at
such stockholders meeting Xxxxxx'x slate of directors is elected and Xxxxxx is
promptly thereafter reinstated as CEO).
(b) Notwithstanding the foregoing, the Liberty Proxy shall not be
valid with respect to any of the Liberty Proxy Shares in connection with any
vote for (or consent to approve) any matter that is a Fundamental Change which
Liberty has the right to consent to pursuant to the terms of the Governance
Agreement with respect to which Liberty has not consented.
(c) Notwithstanding the foregoing, so long as Liberty holds its
Eligible Stockholder Amount and after termination of Liberty's consent right
with respect to Fundamental Changes as provided in the Governance Agreement,
Xxxxxx, with respect to matters that constitute Fundamental Changes, will vote
the Liberty Proxy Shares in the manner directed by Liberty.
(d) The Liberty Proxy shall terminate as provided for in Section
3.6(a) or, if earlier, (i) immediately upon a material breach by Xxxxxx of the
terms of Section 3.3(a), the second sentence of Section 3.3(b), Section 3.3(c)
(as applicable to Liberty) or Section 3.6(b) of this Agreement, (ii) at such
time as Xxxxxx has been convicted of, or has pleaded guilty to, any felony
involving moral turpitude or (iii) at such time as Xxxxxx ceases to beneficially
own 5,000,000 Common Shares with respect to which he has a pecuniary interest;
provided, in the case of clauses (ii) and (iii) above, that Liberty sends notice
of such termination to Xxxxxx within 30 days after receiving notice of the event
giving rise to such termination, in which case the Liberty Proxy shall terminate
immediately upon the receipt of such notice.
(e) Notwithstanding anything to the contrary set forth herein, the
Liberty Proxy is personal to Xxxxxx and may not be assigned by Xxxxxx and shall
not inure to Xxxxxx'x successors without the prior written consent of Liberty.
SECTION 3.7 Cooperation. Each Stockholder shall vote (or act or not
act by written consent with respect to) all of its Common Shares (and any Common
Shares with respect to which it has the power to vote (whether by proxy or
otherwise) and shall, as necessary or desirable, attend all meetings in person
or by proxy for purposes of obtaining a quorum, and execute all written consents
in lieu of meetings, as applicable, to effectuate the provisions of this Article
III.
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ARTICLE IV
TRANSFER OF COMMON SHARES
SECTION 4.1 Restrictions on Transfer by Liberty and Xxxxxx. (a)
Until the CEO Termination Date or such time as Xxxxxx becomes Disabled, subject
to the other provisions of this Agreement, neither Liberty nor Xxxxxx shall
Transfer or otherwise dispose of (including pledges), directly or indirectly,
any Common Shares beneficially owned by its Stockholder Group other than (w)
Transfers of Common Shares by Xxxxxx in order to pay taxes arising from the
granting, vesting and/or exercise of the Options and/or the payment of bonuses
on repayment of the Xxxxxx Note, (x) Transfers of Common Shares by Liberty to
members of the Liberty Stockholder Group or by Xxxxxx to members of the Xxxxxx
Stockholder Group, (y) a pledge or grant of a security interest in vested Common
Shares (other than the pledge of certain Common Shares pursuant to prior
arrangements between Xxxxxx and the Company) or pledges by a member of the
Liberty Stockholder Group of securities of a BDTV Entity that Liberty is
entitled to Transfer under (b)(iii) below in connection with bona fide
indebtedness in which the pledgee of the applicable Common Shares (or securities
of such BDTV Entity) agrees that, upon any default or exercise of its rights
under such pledge or security arrangement, it will offer to sell the pledged
Common Shares (or securities of such BDTV Entity) to the non-pledging
Stockholder(s) (or its or his designee) for an amount equal to the lesser of the
applicable amount of such indebtedness and the fair market value of such pledged
Common Shares (or securities of such BDTV Entity), and (z) Transfers of Options
or Common Shares to the Company by Xxxxxx or his Affiliates in connection with a
"cashless" exercise of the Options (including Options granted to Xxxxxx on the
date hereof or in the future).
(b) Notwithstanding the restrictions contained in subsection (a)
above (and in addition to the foregoing exceptions, but subject to the right of
first refusal described in Section 4.9 on behalf of Xxxxxx (or his designee)
with respect to Transfers by members of the Liberty Stockholder Group and to a
right of first refusal on behalf of Liberty (or its designee) with respect to
Transfers by members of the Xxxxxx Stockholder Group (which rights shall be
assignable)): (i) following August 24, 2000 either Liberty or Xxxxxx may
Transfer all or any portion of the Common Shares beneficially owned by its
Stockholder Group (and, in the case of Liberty only, its entire interest in the
BDTV Entities) to an unaffiliated third party, provided, however, that a
Transfer by Xxxxxx to a third party or to Universal (other than in connection
with the Xxxxxx Put) shall be subject to the Xxxxxx Tag-Along Right pursuant to
Section 4.7, (ii) following the CEO Termination Date or such time as Xxxxxx
becomes Disabled, Xxxxxx may, Transfer all or any portion of the Common Shares
held by his Stockholder Group to an unaffiliated third party, and (iii) either
Liberty or Xxxxxx may Transfer any portion of the Common Shares (including, in
the case of Liberty, all or a portion of a BDTV Entity interest) held by its
Stockholder Group to an unaffiliated third party, provided that, (a) following
such Transfer such Stockholder Group retains its Eligible Stockholder Amount of
Common Shares and (b) in the case of the Transfer of an interest in or Common
Shares held by a BDTV Limited Entity as of the date hereof, following such
Transfer, Liberty, Xxxxxx and Universal and each of their respective Stockholder
Groups collectively beneficially own the Minimum Stockholder Amount.
Notwithstanding the previous sentence and the restrictions contained in
paragraph (a) above and subject to the requirement, with respect to a Transfer
by Liberty of an interest in or Common Shares held
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by a BDTV Limited Entity as of the date hereof, that the Stockholders and their
respective Stockholder Groups collectively beneficially own the Minimum
Stockholder Amount, either Liberty or Xxxxxx may transfer any of its Common
Shares in one or more transactions that comply with the requirements of Rule 144
or 145 (as applicable) under the Securities Act.
(c) Until August 24, 2000, Universal shall not voluntarily Transfer
any Common Shares or convert any shares of Class B Common Stock into shares of
Common Stock such that it directly or indirectly owns a number of Common Shares
having an aggregate number of votes that is less than the number of votes
represented by the Common Shares it so owns immediately following the Closing
(the "Specified Votes"); provided that this restriction shall not prohibit
Universal from converting any shares of Class B Common Stock into shares of
Common Stock so long as, within 60 days of such conversion, Universal purchases
a number of shares of Common Stock such that it directly or indirectly owns a
number of Common Shares having the Specified Votes; provided, further, that this
restriction shall not be applicable to a Transfer of all Common Shares that
Universal beneficially owns.
(d) With respect to any Transfer by Liberty with respect to which
Xxxxxx would have a right pursuant to Section 4.9 that would result, after
giving effect to such Transfer, in the Stockholders and their respective
Stockholder Groups beneficially owning less than the Minimum Stockholder Amount,
and with respect to which Xxxxxx does not elect to exercise his right to
purchase the Liberty Common Shares proposed to be Transferred, Xxxxxx shall not
fail to respond to the L/D Offer Notice or elect not to exercise his rights
under such Section prior to offering Universal the opportunity to cause Xxxxxx
to purchase such shares, subject to the terms and conditions described below. If
Universal (or, at Universal's option, a member of its Stockholder Group) shall
elect to cause Xxxxxx to purchase the Liberty Common Shares proposed to be
Transferred, Universal shall loan Xxxxxx an amount of cash equal to the purchase
price for the Liberty Common Shares proposed to be Transferred and Xxxxxx shall
purchase such Common Shares in accordance with the terms of Section 4.9. Such
loan shall be represented by a non-recourse note which shall be secured by the
Liberty Common Shares to be purchased and shall contain such other terms and
conditions as shall be reasonably satisfactory to Xxxxxx and Universal. Xxxxxx
shall grant to Universal an option to acquire such Common Shares, exercisable at
Universal's option at any time at an exercise price equal to the purchase price
for such shares, which exercise price may be satisfied by the cancellation of
the note referred to above and which option shall be transferable to the same
extent as the Common Shares underlying the option would be transferable;
provided that Universal shall not Transfer the option so long as Xxxxxx retains
the Universal Proxy if it is necessary to retain such shares in order to
maintain the Minimum Stockholder Amount (except that Universal may Transfer the
option or the underlying Common Shares in connection with a Transfer of all
Common Shares that Universal beneficially owns). Xxxxxx shall vote such shares
as if they were subject to the Universal Proxy. To the extent that applicable
law prohibits Universal and Xxxxxx from entering into the arrangements described
above, Xxxxxx and Universal shall cooperate in good faith and use commercially
reasonable efforts to enter into alternative arrangements to maintain the
Minimum Stockholder Amount in a manner that provides for minimal disruption to
the existing governance arrangements and fairly balances each Stockholder's
interest.
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SECTION 4.2 Universal Purchase of Liberty Equity. (a) Universal, or,
at Universal's option, its Permitted Designee, may elect to purchase from
Liberty all (but not less than all) of Liberty's Equity (it being understood
that, for purposes of this Section 4.2, Liberty's Equity shall not include the
Contingent Rights) (the "Call Right") (i) prior to the CEO Termination Date or
such time as Xxxxxx becomes Disabled, if (x) Xxxxxx and Universal consent to the
taking of any action by the Company which would constitute a Fundamental Change
described in Section 2.04(ii) of the Governance Agreement, and (y) Liberty has
the right to consent to but does not consent to such Fundamental Change pursuant
to the terms of the Governance Agreement (other than a merger or similar
business combination between the Company and Universal or any of their
respective Affiliates so long as the Liberty Stockholder Group collectively
beneficially owns more than 12.5% of the outstanding Common Shares) and (ii) at
any time on or after the CEO Termination Date or such time as Xxxxxx becomes
Disabled. Universal may exercise the Call Right by, in the case of clause
(a)(i), requesting Xxxxxx to, and Xxxxxx shall, upon Universal's request,
deliver written notice (a "Call Notice") to Liberty or, in the case of clause
(a)(ii), by delivering a Call Notice to Liberty. Such Call Notice shall state
that Universal has elected to exercise its Call Right and, subject to paragraph
(e) below, shall set forth the form of consideration proposed to be used by
Universal to pay the Liberty Purchase Price. Universal's right to use a
Permitted Designee shall be subject to Universal's obligations under the first
sentence of paragraphs (e) and (f) hereof.
(b) In the event that the CEO Termination Date has occurred or
Xxxxxx has become Disabled, Liberty may elect to require Universal or, at
Universal's option, its designee, to purchase all (but not less than all) of
Liberty's Equity (except for the Contingent Rights) (the "Liberty Put Right") at
any time, by delivering a written notice (a "Put Notice") to Universal stating
that Liberty elects to exercise the Liberty Put Right.
(c) The purchase price (the "Liberty Purchase Price") to be paid by
Universal to Liberty for Liberty's Equity pursuant to paragraph (a) or (b) above
shall equal the Appraised Value (plus, in the event the closing is delayed
pursuant to the second sentence of paragraph (h), accrued interest at the
Reference Rate from the date that is 20 Business Days following the date of the
Put Notice or the Call Notice through the date of the closing), determined as of
the date of that the Call Notice or the Put Notice is delivered, and shall be
payable in the form of consideration specified in paragraphs (e) or (f), as
applicable, below. The "Appraised Value" shall be determined on the basis of the
private market value of the Company and shall take into account Liberty's
significant influence in the Company at the time of such purchase, including
consent rights on Fundamental Changes pursuant to the Governance Agreement
(regardless of whether such rights have terminated under Section 4.3 or clause
(e)(ii) below), entitlement to representation on the LLC Board of Directors and
the Board and similar governance rights; provided that such basis shall not
assume (and the Independent Investment Banking Firms described in paragraph (d)
making the Appraisal will be instructed not to consider) the value of the
Company in an "auction" proceeding; provided, further that the Appraised Value
shall be modified to reflect any consideration received or receivable in respect
of any distribution to Liberty in connection with a spin-off contemplated by
Section 9.14 of the Investment Agreement. If such payment occurs in connection
with the CEO Termination Date or Xxxxxx becoming Disabled (the "Xxxxxx
Departure"), the impact of
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the Xxxxxx Departure shall be taken into account by the Independent Investment
Banking Firms.
(d) Promptly upon receipt by Universal of the Put Notice or by
Liberty of the Call Notice, each of Universal and Liberty shall select an
Independent Investment Banking Firm each of which shall promptly make a
determination (each such determination, an "Appraisal") of the Appraised Value
of Liberty's Equity in accordance with the provisions of paragraph (c) above. If
the higher of such Appraisals is less than or equal to 110% of the lower of such
Appraisals, then the Appraised Value shall be equal to the average of such
Appraisals. If the higher of such Appraisals is greater than 110% of the lower
of such Appraisals, then a third Independent Investment Banking Firm (which
shall be an Independent Investment Banking Firm that shall not have been engaged
by the Company, Liberty or Universal for the three years prior to the date of
such selection) shall be selected by the first two Independent Investment
Banking Firms, which third Independent Investment Banking Firm shall promptly
make a determination of the Appraised Value. The Appraised Value shall equal the
average of the two of such three Appraisals closest in value (or if there are no
such two, then of all three Appraisals).
(e) If Universal elects to exercise its Call Right, Universal shall
use its best efforts to make tax-free consideration consisting of Liquid
Securities available to Liberty in a tax-free transaction; provided that
Universal may provide, in lieu of Liquid Securities, Non-Liquid Securities the
receipt of which constitutes tax-free consideration and that are subject to the
Put Provision described in Section 4.2(f). If, notwithstanding Universal's best
efforts, such a tax-free transaction is not available, (i) Universal shall not
be entitled to exercise the Call Right, (ii) Liberty shall cease to have any
right to consent to any action that constitutes a Fundamental Change described
in Section 2.04(ii) of the Governance Agreement (other than a merger or similar
business combination between the Company and Universal or any of their
respective Affiliates so long as the Liberty Stockholder Group collectively
beneficially owns more than 12.5% of the outstanding Common Shares) and if any
such failure to consent to any such Fundamental Change (other than a Fundamental
Change described in the parenthetical in clause (ii) above) triggered
Universal's Call Right pursuant to clause (a)(i) of this Section 4.2, Liberty
shall be deemed to have consented to the Fundamental Change, and (iii) Liberty
shall be entitled to exercise the Liberty Put Right on the terms described in
paragraph (b) above, notwithstanding whether or not the CEO Termination Date has
occurred or Xxxxxx has become Disabled.
(f) In the event that Universal provides Non-Liquid Securities to
Liberty, Liberty may at any time or from time to time elect to require Universal
(or, if Universal is not the Issuer of such securities, the Issuer) to purchase
all or a portion of such Non-Liquid Securities (the "Put Provision") at any time
by delivering a written notice (a "Put Provision Notice") to Universal stating
that Liberty elects to exercise the Put Provision; provided that Universal shall
guarantee any obligation of the Issuer hereunder but shall not be relieved of
any of its obligations hereunder as a result of any Issuer being required to
purchase such Non-Liquid Securities; provided, further, that in no event shall
Liberty be entitled to exercise the Put Provision on more than two occasions.
The purchase price (the "Non-Liquid Purchase Price") to be paid by Universal to
Liberty for Liberty's Non-Liquid Securities shall equal the
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Market Value, determined as of the date that the Put Provision Notice is
delivered, and shall be payable in cash. The "Market Value" shall be determined
on the basis of (i) if the Non-Liquid Securities are publicly traded on a
national securities exchange or quoted on the Nasdaq National Market ("Publicly
Traded"), the average of the daily closing prices for such securities on the
principal exchanges or market on which such securities may be listed or may be
traded at such time for the five trading days prior to the date of the Put
Provision Notice or (ii) if the Non-Liquid Securities are not Publicly Traded,
the appraised value of such securities determined in accordance with the
procedures set forth in Section 4.2(d) on the basis of what a willing buyer
would pay for such securities in an arm's length transaction with a willing
seller, taking into account, among other factors, an appropriate minority
discount. In the event that the Non-Liquid Securities are Publicly Traded and
Liberty has delivered the Put Provision Notice, Universal may elect, in lieu of
satisfying all or a portion of the Put Provision, to have Liberty sell the
Non-Liquid Securities over a reasonable period to be mutually agreed upon by
Universal and Liberty and otherwise in accordance with the Shortfall Provisions,
with the term "Market Value" substituted for the term "Liberty Purchase Price"
for such purposes. In the event that Universal lacks sufficient funds (or is
otherwise unable) to satisfy the Put Provision, SCL agrees, subject to the
existing MEI arrangements and applicable law, that so long as SCL beneficially
owns, directly or indirectly, at least 66- 2/3% of the Equity of Universal
(excluding any Equity beneficially owned by Liberty or its Affiliates) (the "SCL
Threshhold"), SCL shall provide funds to Universal (for debt or equity
securities of Universal on commercially reasonable terms) in an amount
sufficient to satisfy the Non-Liquid Purchase Price or, at SCL's option,
purchase from Liberty (on terms and conditions reasonably satisfactory to the
parties) the applicable Non-Liquid Securities in exchange for the Non-Liquid
Purchase Price; provided that if neither Universal nor SCL satisfies the Put
Provision and the Issuer of the Non-Liquid Securities has outstanding a class of
Publicly Traded securities, Liberty may cause the Issuer to register the
Non-Liquid Securities to be sold over a reasonable period to be mutually agreed
upon by Universal and Liberty and otherwise in accordance with the Shortfall
Provisions, with the term "Market Value" substituted for the term "Liberty
Purchase Price" for such purposes. In lieu of providing all or a portion of the
cash to Universal or to Liberty, SCL may substitute a number of Liquid
Securities of SCL determined in the manner set forth in paragraph 4.2(h) and
subject to sale by Liberty in accordance with the Shortfall Provisions, with the
term "Market Value" substituted for the term "Liberty Purchase Price" for such
purposes. The obligation of SCL set forth in the preceding sentence with respect
to any outstanding Non-Liquid Securities shall terminate upon 10 Business Days'
notice to Liberty that SCL's beneficial ownership of the Equity of Universal
will decrease below the SCL Threshhold, which notice shall include reasonable
detail of the transaction which will cause such decrease.
(g) If Liberty exercises the Liberty Put Right, Universal shall use
its reasonable best efforts to make tax-free consideration consisting of Liquid
Securities available to Liberty in a tax-free transaction; provided that
Universal may provide, in lieu of Liquid Securities, Non-Liquid Securities that
are subject to the Put Provision described in Section 4.2(f). If,
notwithstanding Universal's reasonable best efforts, such consideration cannot
be made available, the consideration payable in respect of the Liberty Purchase
Price shall consist solely of cash ("Cash Consideration") and/or Liquid
Securities in respect of which Liberty shall receive customary registration
rights. If Liberty receives Liquid Securities
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pursuant to this paragraph (f) in connection with a taxable transaction, and,
within three months of the receipt of such Liquid Securities (or within such
shorter period as Liberty shall elect by giving written notice of such election
to Universal pursuant to the final sentence of this paragraph (f)) (any such
period, the "Sale Period"), Liberty shall sell such Liquid Securities and shall
receive in consideration therefor aggregate cash proceeds on a per share basis
(net of any underwriting discounts or commissions or other reasonable
out-of-pocket selling expenses) (the "Net Proceeds") which, together with any
Cash Consideration, are less on a per share basis than the Liberty Purchase
Price, Universal shall pay to Liberty, within ten Business Days of the receipt
by Universal of written notice from Liberty of the amount of such Net Proceeds,
at Universal's option, an amount of cash by wire transfer of same day funds
and/or additional Liquid Securities equal to the difference between (x) the
Liberty Purchase Price on a per share basis and (y) the sum of the Net Proceeds
and the Cash Consideration on a per share basis (such difference, the "Shortfall
Amount"). Liberty shall in good faith seek to minimize the Shortfall Amount. If
Universal elects to pay all or any part of the Shortfall Amount with Liquid
Securities, Liberty shall have the rights with respect to such Liquid Securities
set forth in the immediately preceding sentence to the extent that the Net
Proceeds from the sale of such Liquid Securities within the Sale Period
applicable thereto, together with any cash received in respect of the Shortfall
Amount, do not equal the Shortfall Amount. If the Net Proceeds from the sale of
any Liquid Securities during the applicable Sale Period (including any Liquid
Securities received in respect of the Shortfall Amount) received by Liberty
pursuant to this paragraph (f) are greater than the Liberty Purchase Price on a
per share basis, Liberty shall promptly pay to Universal, by wire transfer of
same day funds, an amount equal to the difference between the Net Proceeds and
the Liberty Purchase Price. To the extent Liberty only sells a portion of the
Liquid Securities during any applicable Sale Period, the provisions of this
paragraph (f) with respect to Liquid Securities shall be applied on a pro rata
basis to the portion of the Liquid Securities that are so sold. Notwithstanding
the foregoing, Liberty shall be entitled by written notice to Universal on the
date Liberty receives the Liquid Securities to terminate the Sale Period as to
any or all Liquid Securities received by Liberty pursuant to this paragraph (f)
in which event neither Liberty nor Universal shall have any obligation to the
other under this paragraph (f) to the extent that the Net Proceeds on a per
share basis from the sale of any such Liquid Securities as to which Liberty has
so terminated the Sale Period is greater or less than the applicable Liberty
Purchase Price on a per share basis. The provisions of this paragraph (g) (other
than the first two sentences are referred to herein as the "Shortfall
Provisions."
(h) Subject to the next succeeding sentence, the closing of any
purchase of Liberty's Equity pursuant to the Call Right or the Liberty Put Right
shall occur no later than two Business Days following the later to occur of (i)
the determination of the Appraised Value and (ii) the receipt of any necessary
approvals (including, without limitation, any required approval of the
stockholders of Universal or the Universal Parent Company or any applicable
regulatory approvals) with respect to the purchase of Liberty's Equity or the
issuance of Liquid Securities or the purchase thereof by Liberty. If Liberty
exercises the Liberty Put Right or Universal exercises the Call Right during the
60-day period described in Section 2 of the Spin-Off Agreement (and Universal
elects to require the Company to effect the spin-off within such period) or
following Universal's election within such period to effect the spin-off but
prior to the consummation of such spin-off, then, notwithstanding anything to
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the contrary set forth herein, Universal may delay the closing of such purchase
until the earlier to occur of (i) the fourteen month anniversary of the CEO
Termination Date and (ii) consummation of such spin-off. The number of Liquid
Securities or publicly traded Non-Liquid Securities to be delivered to Liberty
at the closing of the Call Right or the Liberty Put Right shall be determined
based upon weighted average daily closing prices of such securities on the
principal exchange or market on which such shares may be listed or may be traded
at such time for the 60 trading days immediately prior to the second trading day
prior to such closing date. For purposes of determining such weighted average
market price, the closing price for each day shall be the closing price, if
reported, or, if the closing price is not reported, the average of the high and
low sales prices as reported by such principal exchange or market or a similar
source selected from time to time by the Company for such purpose. In the case
of Non-Liquid Securities which are not Publicly Traded, the number of securities
to be delivered shall be the appraised value of such securities determined in
accordance with the procedures set forth in Section 4.2(d) on the basis of what
a willing buyer would pay for such securities in an arm's length transaction
with a willing seller, taking into account, among other factors, an appropriate
minority discount
(i) Universal shall only be required to purchase shares of a
BDTV Entity or any other Person holding Equity in connection with the exercise
of the Call Right or the Liberty Put Right if such BDTV Entity or such other
Person is a wholly-owned Subsidiary of Liberty (or its applicable Affiliate) and
Universal receives representations and warranties, reasonably satisfactory in
form and substance to Universal, that such BDTV Entity or such other Person does
not own assets or liabilities other than the Equity and customary indemnities
with respect thereto.
SECTION 4.3 Going-Private Transaction. If Universal (i)
proposes to purchase all of the shares of Common Stock held by the Public
Stockholders of the Company in a Permitted Business Combination, (ii) agrees to
acquire all of Liberty's Equity in exchange for the Liberty Purchase Price
described in Section 4.2(c) and calculated in the manner described in Section
4.2(d) and (iii) shall have used its best efforts to make tax-free consideration
consisting of Liquid Securities available to pay the Liberty Purchase Price in a
tax-free transaction to Liberty (provided that Universal may provide, in lieu of
Liquid Securities, Non-Liquid Securities that are subject to the Put Provision
described in Section 4.2(f), mutatis mutandis), then Liberty shall consent to
such transaction if such transaction constitutes a Fundamental Change and shall
not dissent from, abstain from voting with respect to or vote its Common Shares
against the proposed transaction; provided in the event that Liberty's stock
ownership were such as to qualify Liberty as a Public Stockholder, for purposes
of the vote required under the definition of Permitted Business Combination,
Liberty's vote shall be disregarded for the Public Stockholder vote required
pursuant thereto. If, notwithstanding Universal's best efforts, such a tax-free
transaction is not available, Liberty shall be permitted to retain its Equity in
the Company (or the surviving entity of such Permitted Business Combination) and
its rights under the Governance Agreement (other than the right described in
Section 2.04(ii) thereof (other than with respect to a merger or similar
business combination between the Company and Universal or any of their
respective Affiliates so long as the Liberty Stockholder Group collectively
beneficially owns more than 12.5% of the outstanding Common Shares)) in
connection with such Permitted Business
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Combination; provided that, if Liberty would beneficially own 20% or more of the
outstanding Equity (such excess being the "Excess Interest")) after giving
effect to such Permitted Business Combination, then Universal shall purchase,
and Liberty shall sell to Universal, the Excess Interest on terms and conditions
reasonably acceptable to Liberty and which shall be no less favorable to Liberty
than the price paid to the Public Stockholders in such Permitted Business
Combination; provided, further, that Universal shall reimburse Liberty for 50%
of any actual tax liability incurred or payable (including to TCI under
Liberty's tax-sharing agreement with TCI) by Liberty in connection with
Universal's acquisition of the Excess Interest. To the extent that Liberty would
own 20% or less of the outstanding Equity representing a greater percentage of
voting power, Liberty shall convert such number of shares of Class B Common
Stock into shares of Common Stock in order to reduce its voting power to an
equivalent percentage of the outstanding Equity. Universal shall continue to
have the rights described in Section 4.2(a) (mutatis mutandis) and Liberty shall
continue to have the rights described in Section 4.2(b) (mutatis mutandis) with
respect to any Equity in the Company (or such surviving entity) that is retained
by Liberty following any such Permitted Business Combination and Universal's
purchase of any Excess Interest; provided that Universal makes tax-free
consideration consisting of Liquid Securities available to Liberty in a tax-free
transaction.
SECTION 4.4 Xxxxxx Right to Put Shares. (a) Following the CEO
Termination Date or such time as Xxxxxx becomes Disabled (each such event, a
"Xxxxxx Put Event"), Xxxxxx shall have the right (the "Xxxxxx Put") to require
Universal or, at Universal's option, its designee, to purchase for cash all (but
not less than all) of the Common Shares beneficially owned by Xxxxxx that were
acquired from the Company (other than securities of any BDTV Entity) in which he
has a pecuniary interest (the "Xxxxxx Put Shares"), for the Xxxxxx Share Put
Price as is specified in paragraphs (b) and (c) below. Xxxxxx may exercise the
Xxxxxx Put by delivering a written notice (the "Xxxxxx Put Notice") at any time
following the date of the applicable Xxxxxx Put Event (the "Xxxxxx Put Event
Date") and on or prior to the first anniversary of the Xxxxxx Put Event Date to
Universal stating that Xxxxxx elects to exercise the Xxxxxx Put, and upon
receipt of such Xxxxxx Put Notice, Universal, or at Universal's option, its
designee, shall purchase such Xxxxxx Put Shares, subject to the terms of this
Section 4.4. So long as Xxxxxx is not disadvantaged as determined in his good
faith judgment, with respect to any options to be exercise by Xxxxxx in
connection with his exercise of the Xxxxxx Put, Universal shall be permitted to
determine whether Xxxxxx shall exercise such options through "cashless" exercise
option.
(b) If the Xxxxxx Put Event occurs at any time prior to the
fourth anniversary of the Closing, the purchase price per Xxxxxx Put Share (the
"Xxxxxx Share Put Price") shall be equal to the weighted average daily closing
prices of a share of the Common Stock on the Nasdaq National Market (or such
principal exchange or market on which such shares may be listed or may be traded
at such time) (the "Weighted Average Market Price") for the five trading days
immediately following the date on which a public announcement of the Xxxxxx Put
Event is made. For purposes of determining the Weighted Average Market Price,
the closing price for each day shall be the closing price, if reported, or, if
the closing price is not reported, the average of the high and low sales prices
as reported by the Nasdaq National Market (or such principal exchange or market)
or a similar source selected from time to time
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by the Company for such purpose. In the event such prices are unavailable, the
Weighted Average Market Price shall be the Fair Market Value of such security
established by Independent Investment Banking Firms in accordance with the
procedures specified in Section 4.2(d) (with Xxxxxx having the rights of Liberty
in such Section, mutatis mutandis).
(c) If the Xxxxxx Put Event occurs at any time on or after the
fourth anniversary of the Closing, the Xxxxxx Share Put Price shall be equal to
(i) if the Xxxxxx Put is exercised no later than 10 Business Days after the
Xxxxxx Put Event Date, the Weighted Average Market Price for the five trading
days immediately preceding public announcement of the Xxxxxx Put Event or (ii)
if the Xxxxxx Put is exercised after the tenth Business Day following the Xxxxxx
Put Event Date and on or prior to the first anniversary of the Xxxxxx Put Event
Date, the Weighted Average Market Price for the five trading days immediately
prior to the exercise of the Xxxxxx Put.
(d) Subject to the receipt of applicable regulatory approvals
and subject to paragraph (f) below, the closing of the sale of the Xxxxxx Put
Shares shall occur as soon as reasonably practicable, and in any case no later
than 20 Business Days following receipt of the Xxxxxx Put Notice (such date or
such later date as set forth in paragraph (f) below, the "Xxxxxx Put Closing
Date"). The aggregate Xxxxxx Share Put Price shall be payable by wire transfer
of same day funds to an account specified by Xxxxxx no less than two Business
Days prior to the Xxxxxx Put Closing Date. Prior to the Xxxxxx Put Closing Date,
Xxxxxx shall exercise any Options (whether on a cashless exercise basis or
otherwise) necessary in order to deliver Common Shares to Universal (or such any
other transferee pursuant to paragraph (f) below) in connection with the Xxxxxx
Put. In the event of any stock split, stock dividend or similar distribution
following the date of determination of the Xxxxxx Share Put Price, the Xxxxxx
Share Put Price shall be appropriately adjusted.
(e) In the case, prior to the Xxxxxx Put Event Date, Universal
or a Permitted Transferee of Universal Transfers to a Third Party Transferee (A)
more than 50% of Universal's Initial Interest or (B) an amount of Equity such
that (x) the percentage voting power of the Common Shares beneficially owned by
the Third Party Transferee and its Affiliates after giving effect to such
transaction or transactions would be greater than that beneficially owned by
Universal and its Stockholder Group after giving effect to such transaction or
transactions, (y) the percentage voting power of the Common Shares beneficially
owned by the Third Party Transferee and its Affiliates after giving effect to
such transaction or transactions would be greater than that beneficially owned
by Liberty and the members of its Stockholder Group or any other stockholder and
(z) the percentage voting power of the Common Shares beneficially owned by the
applicable transferee and its Affiliates after giving effect to such transaction
would be greater than 15% of the voting power of the outstanding Common Shares
of the Company, such Third Party Transferee shall have, and such Transfer shall
be conditioned upon such Third Party Transferee expressly assuming in writing
(which shall be reasonably satisfactory to Xxxxxx), the obligations of Universal
set forth in Section 4.4 and Universal shall cease to have any obligations
pursuant to Section 4.4. Notwithstanding the foregoing, Universal shall cease to
have any obligation pursuant to Section 4.4 if, prior to the Xxxxxx Put Event
Date, it ceases to beneficially own more than 10% of the Common Shares.
Transfers of Common Shares by Universal or its
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Permitted Transferees on or after the Xxxxxx Put Event Date shall not affect the
obligations of such parties pursuant to this Section.
(f) In the event that regulatory restrictions prevent or could
be reasonably expected to prevent Universal from acquiring Xxxxxx Put Shares at
such time as Xxxxxx exercises the Xxxxxx Put, Universal and Xxxxxx each agrees
as follows:
(i) Upon receipt of the Xxxxxx Put Notice, Universal
shall use its reasonable best efforts, including promptly
making all required regulatory filings, so that the Xxxxxx Put
can be consummated as promptly as reasonably practicable.
(ii) Upon receipt of the Xxxxxx Put Notice, Universal
shall use its best efforts to enter into an escrow arrangement
(the "Escrow") (subject to applicable law and the availability
of a suitable escrow agent on commercially reasonable terms
and conditions) pursuant to which Xxxxxx would deposit the
Xxxxxx Put Shares in an escrow account and title to the Xxxxxx
Put Shares would be transferred to the escrow agent, for the
benefit of Universal (provided that such shares would continue
to be subject to the Universal Proxy in accordance with
Section 3.5). The escrow arrangements shall further provide
that the Xxxxxx Put Shares shall be released to Universal, at
the option of Universal, at any time and subject to applicable
law, without the consent of Xxxxxx, whether for sale to a
third party or otherwise. Any dividends or distributions on
the Xxxxxx Put Shares from and after the time that the Xxxxxx
Put Shares are deposited in the escrow account shall be
similarly held for the benefit of Universal. At the time the
Xxxxxx Put Shares are deposited in an escrow account,
Universal shall pay to Xxxxxx the aggregate Xxxxxx Share Put
Price in the manner set forth in paragraph (d) above). Xxxxxx
agrees to cooperate in good faith with Universal to the extent
necessary to facilitate the escrow arrangements described
herein.
(iii) In the event that Universal is not able to
arrange the Escrow in accordance with clause (ii) above within
20 Business Days of the date of the Xxxxxx Put Notice (which
period may be extended at Xxxxxx'x option), (x) Universal
shall, subject to applicable law, use its reasonable best
efforts to make a non-recourse loan (the "Xxxxxx Loan Amount")
to Xxxxxx in an aggregate amount not to exceed 45% of the
aggregate Xxxxxx Share Put Price, which loan shall be secured
by the Xxxxxx Put Shares (including any distributions with
respect thereto) and which shall contain other terms and
conditions subject to applicable law and otherwise reasonably
satisfactory to Universal and Xxxxxx and (y) Universal shall
begin to pay to Xxxxxx interest on the amount equal to the
difference between the aggregate Xxxxxx Share Put Price and
the Xxxxxx Loan Amount at the prime rate in effect from time
to time as announced by The Chase Manhattan Bank (the "Prime
Rate") which interest rate shall be increased by 100 basis
points on each of the six month and one year anniversary of
the date of the Xxxxxx Put Notice; provided that such interest
rate shall not exceed
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the greater of (x) the Prime Rate and (y) 10%. Interest shall
cease to accrue and become payable at any such time as
Universal is able to either consummate the Escrow (including
paying Xxxxxx the remainder of the Xxxxxx Share Put Price) or
otherwise pays to Xxxxxx the remainder of the Xxxxxx Share Put
Price. Interest shall be paid monthly, on each monthly
anniversary of the date on which interest begins to accrue,
with any remaining accrued interest paid at the closing. The
Xxxxxx Share Put Price payable at the closing shall be reduced
by the amount of any loan pursuant to this paragraph (iii).
(iv) To the extent that Universal is unable to
consummate the Xxxxxx Put within eighteen months of the date
of the Xxxxxx Put Notice, Universal shall make arrangements
for a financial institution to sell the Xxxxxx Put Shares to a
third party, within 10 trading days following such
eighteen-month period, with the net proceeds thereof to be
paid to Xxxxxx; provided that if such net proceeds are less
than the Xxxxxx Put Price (including any interest accrued but
unpaid to the date of payment to Xxxxxx), Universal shall pay
to Xxxxxx, in cash, an amount equal to such deficiency;
provided, further, that if such net proceeds are greater than
the Xxxxxx Put Price (including any interest accrued but
unpaid to the date of payment to Xxxxxx), Xxxxxx shall pay to
Universal, in cash, an amount equal to such excess.
(v) If the Escrow is not effected and the spin-off
occurs, Xxxxxx and Universal shall cooperate in good faith to
enter into appropriate arrangements to ensure that the Xxxxxx
Put Price reflects the value of the shares of the regulated
subsidiary being spun off and any other dividend or
distribution, as appropriate, without Xxxxxx taking market
risk on the spun-off shares (and without having the benefit of
any increase in the value of the spun-off shares). Xxxxxx and
Universal will cooperate in good faith to enter into any
agreement with respect to such arrangements and voting
arrangements with respect to the spun-off shares prior to the
Closing.
(vi) Xxxxxx shall in good faith cooperate with
Universal to consummate the Xxxxxx Put and, subject to the
foregoing obligations of Universal, to provide a means of
consummating the Xxxxxx Put which, to the extent reasonably
practicable, would permit Universal to own and vote the Xxxxxx
Put Shares to the extent permitted by law.
In connection with the foregoing, the Company agrees to cooperate in good faith
with Universal in order to permit Universal to acquire beneficial ownership of
the Xxxxxx Put Shares which may include, without limitation, exchanging
additional LLC Shares with Universal for the Xxxxxx Put Shares or granting an
option to purchase shares of Common Stock in a number equal to the number of
Xxxxxx Put Shares; provided that the Company shall not be required to take any
action that would or could reasonably be expected to have substantial adverse
tax, accounting or financial consequences to the Company or its Subsidiaries
(including the LLC)). In addition, each of Xxxxxx and the Company agree that, so
long as there would not be any substantial adverse tax or accounting
consequences to the
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Company or Xxxxxx, at Universal's option, they will use their reasonable best
efforts to transfer options to Universal in lieu of Common Shares.
(g) Liberty acknowledges and agrees that Transfers by Xxxxxx
to Universal pursuant to this Section 4.4 shall not result in any right of first
refusal by Liberty pursuant to Section 4.9.
SECTION 4.5 Tag-Along for Xxxxxx and Liberty for Transfers by
Universal. (a) Subject to prior compliance by Universal with Section 4.8, if
Universal or any members of its Stockholder Group shall desire to Transfer in
one transaction or a series of related transactions either
(i) more than 50% of Universal's Initial Interest or
(ii) an amount of Equity such that (x) the percentage voting
power of the Common Shares beneficially owned by the
applicable transferee and its Affiliates after giving effect
to such transaction or transactions would be greater than that
beneficially owned by Universal and its Affiliates after
giving effect to such transaction or transactions, (y) the
percentage voting power of the Common Shares beneficially
owned by the applicable transferee and its Affiliates after
giving effect to such transaction or transactions would be
greater than that held by Liberty and its Stockholder Group or
any other stockholder and (z) the percentage voting power of
the Common Shares beneficially owned by the applicable
transferee and its Affiliates after giving effect to such
transaction would be greater than 25% of the voting power of
the outstanding Equity of the Company
to any Person (including any Group), other than to a Person that was a Permitted
Transferee of Universal prior to the occurrence of such transaction and other
than pursuant to Section 4.8 to the extent that Liberty previously received a
Universal Tag-Along Notice pursuant to this Section 4.5 (with respect to the
transaction which gave rise to the proposed transaction pursuant to Section 4.8)
and did not exercise its rights thereunder (either such transaction or series of
related transactions, a "Universal Tag-Along Sale"), Universal shall give prior
written notice of such intended Transfer to Liberty and Xxxxxx (each, a
"Tag-Along Offeree") no later than the date on which Universal gives the Offer
Notice to Xxxxxx pursuant to Section 4.8(b). Such notice (the "Universal
Tag-Along Notice") shall set forth the terms and conditions of such proposed
Transfer, including the name of the proposed transferee, the amount of Equity
proposed to be Transferred (including the number of securities previously or
proposed to be Transferred to the applicable transferee or its Affiliates in a
related transaction) (the "Universal Tag-Along Shares"), the purchase price per
Common Share on an equivalent basis proposed to be paid therefor and the payment
terms and type of Transfer to be effectuated.
(b) Within 10 Business Days after delivery of the Universal
Tag-Along Notice by Universal to the Tag-Along Offerees, each Tag-Along Offeree
shall, by written notice to Universal, each have the opportunity and right to
sell to the transferee in such proposed
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Transfer (upon the same terms and conditions as Universal or the most favorable
terms and conditions to Universal provided for in any one of a series of related
transactions) up to that number of Common Shares beneficially owned by such
Tag-Along Offeree as shall equal the product of (x) a fraction, the numerator of
which is the number of Universal Tag-Along Shares and the denominator of which
is the aggregate number of Common Shares beneficially owned as of the date of
the Universal Tag-Along Notice by Universal and its Stockholder Group,
multiplied by (y) the number of Common Shares beneficially owned by such Tag-
Along Offeree and its Stockholder Group as of the date of the Universal
Tag-Along Notice. In the event that the proposed transferee is unwilling to
purchase all of the Common Shares that Universal, Xxxxxx and Liberty propose to
Transfer hereunder, the number of Common Shares that a Stockholder, including
Universal, may sell pursuant to Section 4.5(a) shall be determined by
multiplying the maximum number of Common Shares that the proposed transferee of
the Universal Tag-Along Shares is willing to purchase on the terms set forth in
the Universal Tag-Along Notice by a fraction, the numerator of which is the
number of Common Shares that such Stockholder and its Stockholder Group proposes
to sell hereunder (subject to the maximum amount for each Stockholder calculated
pursuant to the preceding sentence) and the denominator of which is the
aggregate number of Common Shares that all Stockholders exercising rights under
this Section 4.5, including Universal, and the members of their respective
Stockholder Groups propose to sell hereunder.
(c) At the closing of any proposed Transfer in respect of
which a Universal Tag-Along Notice has been delivered, each Tag-Along Offeree
shall deliver, free and clear of all liens, to the proposed transferee
certificates evidencing the Common Shares to be sold thereto duly endorsed with
Transfer powers and shall receive in exchange therefore the consideration to be
paid by the proposed transferee in respect of such Common Shares. No transferee
shall be required to purchase shares of a BDTV Entity (or any form of Equity
other than Common Shares) in connection with the Universal Tag-Along Sale and
each of Liberty and Xxxxxx shall cooperate so that any transferor will be able
to purchase directly any Common Shares held by a BDTV Entity and not the shares
of any BDTV Entity.
(d) The Company shall cooperate with Universal and Liberty to
deliver Common Shares upon exchange by Universal or Liberty or any member of
their respective Stockholder Groups of LLC Shares or Exchange Shares in
connection with any such Transfer.
(e) This Section 4.5 shall not be applicable to any Transfer
pursuant to Section 4.8 to the extent that Liberty previously received a
Universal Tag-Along Notice pursuant to this Section 4.5 (with respect to the
transaction which gave rise to the proposed transaction pursuant to Section 4.8)
and did not exercise its rights thereunder.
(f) No Transfer or Transfers by Universal or any member of its
Stockholder Group constituting a Universal Tag-Along Sale shall be effected
absent compliance with this Section 4.5.
SECTION 4.6 Tag-Along for Liberty for Transfers by Xxxxxx to
Universal. (a) If Universal or any member of its Stockholder Group shall desire
to purchase from Xxxxxx or any member of his Stockholder Group, and Xxxxxx or
any member of his Stockholder Group
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shall desire to Transfer to Universal or any member of its Stockholder Group,
any Common Shares beneficially owned by him , other than as set forth in
paragraph (e) below, (a "Stockholder Tag-Along Sale"), Universal shall give not
less than 10 Business Days' prior written notice to Liberty of such intended
Transfer. Such notice (the "Stockholder Tag-Along Notice") shall set forth the
terms and conditions of such proposed Transfer, including the number of Common
Shares proposed to be Transferred (the "Stockholder Tag-Along Shares"), the
purchase price per Common Share proposed to be paid therefor and the payment
terms and type of Transfer to be effectuated.
(b) Within 10 days after delivery of the Stockholder Tag-Along
Notice by Universal to Liberty, Liberty shall, by written notice to Universal,
have the opportunity and right to sell to Universal or its designee in such
proposed Transfer (upon the same terms and conditions as Xxxxxx) up to that
number of Common Shares beneficially owned by Liberty (including Liberty's pro
rata portion of any shares held by a BDTV Entity) as shall equal the product of
(x) a fraction, the numerator of which is the number of Stockholder Tag-Along
Shares and the denominator of which is the aggregate number of Common Shares
beneficially owned as of the date of the Stockholder Tag-Along Notice by Xxxxxx
and his Stockholder Group (excluding shares held by any BDTV Entity that were
not contributed by Xxxxxx), multiplied by (y) the number of Common Shares
beneficially owned by Liberty and its Stockholder Group (including Liberty's pro
rata portion of any shares held by a BDTV Entity) as of the date of the
Stockholder Tag-Along Notice. The number of Common Shares that Xxxxxx or Liberty
may sell to Universal pursuant to Section 4.6(a) shall be determined by
multiplying the maximum number of Stockholder Tag-Along Shares that Universal is
willing to purchase on the terms set forth in the Stockholder Tag-Along Notice
by a fraction, the numerator of which is the number of Common Shares that such
Stockholder and its Stockholder group proposes to sell hereunder (subject to the
maximum amount for Liberty calculated pursuant to the preceding sentence) and
the denominator of which is the aggregate number of Common Shares that Xxxxxx
and Liberty and their respective Stockholder Groups propose to sell hereunder.
(c) At the closing of any proposed Transfer in respect of
which a Stockholder Tag-Along Notice has been delivered, Liberty shall deliver,
free and clear of all liens, to Universal certificates evidencing the Common
Shares to be sold thereto duly endorsed with Transfer powers and shall receive
in exchange therefore the consideration to be paid by Universal in respect of
such Common Shares as described in the Stockholder Tag-Along Notice. Neither
Universal nor any member of its Stockholder Group shall be required to purchase
shares of a BDTV Entity in connection with the Universal Tag-Along Sale and each
of Liberty and Xxxxxx shall cooperate so that any transferee will be able to
purchase directly any Common Shares held by a BDTV Entity and not the shares of
any BDTV Entity.
(d) Xxxxxx and the members of his Stockholders Group shall not
effect any Transfer or Transfers constituting a Stockholder Tag-Along Sale
absent compliance with this Section 4.6.
(e) This Section 4.6 shall not be applicable to (i) any
Transfer by Xxxxxx to Universal pursuant to the exercise of the Xxxxxx Put
Right, (ii) any Transfer by Xxxxxx to
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Universal of an aggregate of not more than 1,000,000 Common Shares within any
rolling twelve-month period (including any shares Transferred pursuant to
Section 4.7(e)(i)), (iii) any Transfer by Xxxxxx to Universal in connection with
Section 4.8 to the extent that Liberty received a Xxxxxx Tag-Along Notice
pursuant to Section 4.7 and did not exercise its rights thereunder, (iv) any
Transfer by Xxxxxx to Universal of any Common Shares acquired by Xxxxxx from
Liberty or (v) pursuant to Section 4.1(a)(w) or 4.1(a)(z).
SECTION 4.7 Tag-Along for Liberty for Transfers by Xxxxxx to a
Third Party. (a) If Xxxxxx shall desire to Transfer to any third party other
than Universal and the members of its Stockholder Group any of the Common Shares
beneficially owned by him or any member of his Stockholder Group (other than as
set forth in paragraph (e) below or other than as covered by Section 4.6), in
one transaction or a series of related transactions (the "Xxxxxx Tag-Along
Sale"), Xxxxxx shall give prior written notice to Liberty of such intended
Transfer no later than the date on which Xxxxxx gives the Offer Notice to
Universal pursuant to Section 4.8(b). Such notice (the "Xxxxxx Tag-Along
Notice") shall set forth the terms and conditions of such proposed Transfer,
including the number of Common Shares proposed to be Transferred (the "Xxxxxx
Tag-Along Shares"), the purchase price per Common Share proposed to be paid
therefor and the payment terms and type of Transfer to be effectuated.
(b) Within 10 days after delivery of the Xxxxxx Tag-Along
Notice by Xxxxxx to Liberty, Liberty shall, by written notice to Xxxxxx, have
the opportunity and right to sell to such third party in such proposed Transfer
(upon the same terms and conditions as Xxxxxx) up to that number of Common
Shares beneficially owned by Liberty (including Liberty's pro rata portion of
any shares held by a BDTV Entity) as shall equal the product of (x) a fraction,
the numerator of which is the number of Xxxxxx Tag-Along Shares and the
denominator of which is the aggregate number of Common Shares beneficially owned
as of the date of the Xxxxxx Tag-Along Notice by Xxxxxx and his Affiliates
(excluding shares held by any BDTV Entity that were not contributed by Xxxxxx),
multiplied by (y) the number of Common Shares beneficially owned by Liberty
(including Liberty's pro rata portion of any shares held by a BDTV Entity) as of
the date of the Xxxxxx Tag-Along Notice. The number of Common Shares that Xxxxxx
or Liberty may sell to a third party pursuant to Section 4.7(a) shall be
determined by multiplying the maximum number of Xxxxxx Tag-Along Shares that
such third party is willing to purchase on the terms set forth in the Xxxxxx
Tag-Along Notice by a fraction, the numerator of which is the number of Common
Shares that such Stockholder proposes to sell hereunder (subject to the maximum
amount for Liberty calculated pursuant to the preceding sentence) and the
denominator of which is the aggregate number of Common Shares that Xxxxxx and
Liberty propose to sell hereunder.
(c) At the closing of any proposed Transfer in respect of
which a Xxxxxx Tag-Along Notice has been delivered, Liberty shall deliver, free
and clear of all liens, to such third party certificates evidencing the Common
Shares to be sold thereto duly endorsed with Transfer powers and shall receive
in exchange therefore the consideration to be paid by such third party in
respect of such Common Shares as described in the Xxxxxx Tag-Along Notice. No
transferee shall be required to purchase shares of a BDTV Entity in connection
with the Xxxxxx Tag-Along Sale and each of Liberty and Xxxxxx shall cooperate so
that any transferee
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will be able to purchase directly any Common Shares held by a BDTV Entity and
not the shares of any BDTV Entity.
(d) Xxxxxx and the members of his Stockholders Group shall not
effect any Transfer or Transfers constituting a Xxxxxx Tag-Along Sale absent
compliance with this Section 4.7.
(e) This Section 4.7 shall not be applicable to the Transfer
by Xxxxxx or any member of his Stockholder Group (i) of an aggregate of not more
than 1,000,000 Common Shares within any rolling twelve-month period (including
any shares Transferred pursuant to Section 4.6(e)(ii)), (ii) pursuant to Section
4.1(a)(w) or 4.1(a)(z), (iii) in a Market Sale or (iv) following such time as
Xxxxxx is no longer CEO other than any Transfer made in connection with Xxxxxx
ceasing to be CEO.
SECTION 4.8 Right of First Refusal between Universal and
Xxxxxx. (a) Any Transfer of Common Shares by Universal or Xxxxxx or members of
each of their respective Stockholder Groups (the "Transferring Party") will be
subject to the right of first refusal provisions of this Section 4.8 other than
a Transfer (i) between Universal and any member of the Universal Stockholder
Group or between members of the Universal Stockholder Group, (ii) by Xxxxxx
permitted by Section 4.1(a) hereof, (iii) in connection with any Market Sale
(other than any Market Sale (a "Covered Market Sale") involving the Transfer of
250,000 or more Common Shares in any rolling twelve month period) or (iv) a
Transfer of an aggregate of not more than 1,000,000 Common Shares within any
rolling twelve-month period (including any shares Transferred pursuant to
Section 4.6(e)(ii) and Section 4.7(e)(i).
(b) Prior to effecting any Transfer described in Section
4.8(a), the Transferring Party shall deliver a written notice (the "Offer
Notice") to Xxxxxx, if the Transferring Party is Universal or an Affiliate
thereof, or to Universal, if the Transferring Party is Xxxxxx or an Affiliate
thereof (the recipient of such notice, the "Other Stockholder"), which Offer
Notice shall specify (i) the Person to whom the Transferring Party proposes to
make such Transfer or the proposed manner of Transfer in the case of a public
offering or a Covered Market Sale, (ii) the number or amount and description of
the Common Shares to be Transferred, (iii) except in the case of a public
offering or a Covered Market Sale, the Offer Price (as defined below), and (iv)
all other material terms and conditions of the proposed Transfer, including a
description of any non-cash consideration sufficiently detailed to permit
valuation thereof, and which Offer Notice shall be accompanied by any written
offer from the prospective transferee to purchase such Common Shares, if
available and permitted pursuant to the terms thereof. The Offer Notice shall
constitute an irrevocable offer to the Other Stockholder or its designee, for
the period of time described below, to purchase all (but not less than all) of
such Common Shares upon the same terms specified in the Offer Notice, subject to
Section 4.8(g) and as otherwise set forth in this Section 4.8. The Other
Stockholder may elect to purchase all (but not less than all) of the Common
Shares at the Offer Price (or, if the Offer Price includes property other than
cash, the equivalent in cash of such property as determined in accordance with
Section 4.8(g)) and upon the other terms and conditions specified in the Offer
Notice.
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(c) For purposes of this Section 4.8, "Offer Price" shall be
defined to mean on a per share or other amount of Common Shares basis (i) in the
case of a third party tender offer or exchange offer, the tender offer or
exchange offer price per Common Share taking into account any provisions thereof
with respect to proration and any proposed second step or "back-end"
transaction, (ii) in the case of a public offering or a Covered Market Sale, the
Current Market Value per Common Share as of the date the election notice of the
Other Stockholder hereinafter described is delivered and (iii) in the case of a
privately-negotiated transaction, the proposed sale price per Common Share.
(d) If the Other Stockholder elects to purchase the offered
Common Shares, it shall give notice to the Transferring Party within 10 Business
Days of its receipt of the Offer Notice of its election (or in the case of a
third party tender offer or exchange offer, not later than five Business Days
prior to the expiration date of such offer, provided that all conditions to such
offer (other than with respect to the number of Common Shares tendered) shall
have been satisfied or waived and the Offer Notice shall have been provided at
least ten Business Days prior to the expiration date of such offer), which shall
constitute a binding obligation, subject to standard terms and conditions for a
stock purchase contract between two significant stockholders of an issuer
(provided that the Transferring Party shall not be required to make any
representations or warranties regarding the business of the Company), to
purchase the offered Common Shares, which notice shall include the date set for
the closing of such purchase, which date shall be no later than 20 Business Days
following the delivery of such election notice, or, if later, five Business Days
after receipt of all required regulatory approvals; provided that the closing
shall only be delayed pending receipt of required regulatory approvals if (i)
the Other Stockholder is using reasonable efforts to obtain the required
regulatory approvals, (ii) there is a reasonable prospect of receiving such
regulatory approvals and (iii) if such closing is delayed more than 90 days
after the date of the Other Stockholder's notice of election to purchase, then
the Other Stockholder agrees to pay interest at the Reference Rate to the
Transferring Party from such date to the closing date. Notwithstanding the
foregoing, such time periods shall not be deemed to commence with respect to any
purported notice that does not comply in all material respects with the
requirements of this Section 4.8(d). The Other Stockholder may assign its rights
to purchase under this Section 4.8 to any Person who is a Permitted Designee.
(e) Subject to Section 4.8(f) in the case of a Covered Market
Sale, if the Other Stockholder does not respond to the Offer Notice within the
required response time period or elects not to purchase the offered Common
Shares, the Transferring Party shall be free to complete the proposed Transfer
(to the same proposed transferee, in the case of privately- negotiated
transaction) on terms no less favorable to the Transferring Party or its
Affiliate, as the case may be, than those set forth in the Offer Notice,
provided that (x) such Transfer is closed within (I) 90 days after the latest of
(A) the expiration of the foregoing required response time periods, or (B) the
receipt by the Transferring Party of the foregoing election notice or, in the
case of (A) or (B), if later, five Business Days following receipt of all
required regulatory approvals; provided that the closing shall only be delayed
pending receipt of required regulatory approvals if (i) the Transferring
Stockholder is using reasonable efforts to obtain the required regulatory
approvals and (ii) there is a reasonable prospect of receiving such regulatory
approvals or, (II) in the case of a public offering, within 20 days of the
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declaration by the Commission of the effectiveness of a registration statement
filed with the Commission pursuant to this Agreement, and (y) the price at which
the Common Shares are transferred must be equal to or higher than the Offer
Price (except in the case of a public offering, in which case the price at which
the Common Shares are sold (before deducting such approvals underwriting
discounts and commissions) shall be equal to at least 90% of the Offer Price).
(f) If the Other Stockholder does not respond to the Offer
Notice with respect to a Covered Market Sale within the required response time
period or elects not to purchase the offered Common Shares, the Transferring
Party shall be free to complete the proposed Covered Market Sale in one or more
transactions during the 90-day period commencing on the latest of (i) the
expiration of the required response time period described in Section 4.8(d) or
(ii) receipt by the Transferring Party of the election notice described in
Section 4.8(d), provided that the price at which each Common Share is
transferred (excluding brokerage commissions) shall be at least equal to 90% of
the Offer Price.
(g) If (i) the consideration specified in the Offer Notice
consists of, or includes, consideration other than cash or a publicly traded
security for which a closing market price is published for each Business Day, or
(ii) any property other than Common Shares is proposed to be transferred in
connection with the transaction to which the Offer Notice relates, then the
price payable by the Other Stockholder under this Section 4.8 for the Common
Shares being transferred shall be equal to the Fair Market Value of such
consideration which shall be determined in the manner set forth in Section
4.2(d) (with Xxxxxx or Universal having the rights of Liberty in such Section,
mutatis mutandis). Notwithstanding anything to the contrary contained in this
Section 4.8, the time periods applicable to an election by the Other Stockholder
to purchase the offered securities set forth in Section 4.8(a) shall not be
deemed to commence until the Fair Market Value has been determined, provided
that, in the case of a third party tender offer or exchange offer, in no event
shall any such election be permitted later than five Business Days prior to the
latest time by which Common Shares shall be tendered in order to be accepted
pursuant to such offer or to qualify for any proration applicable to such offer
if all conditions to such offer (other than the number of shares tendered) have
been satisfied or waived. Each of Xxxxxx and Universal agrees to use its best
efforts to cause the Fair Market Value to be determined as promptly as
practicable but in no event later than 10 Business Days after the receipt by the
Other Stockholder of the Offer Notice.
(h) Liberty acknowledges and agrees that Transfers by Xxxxxx
to Universal pursuant to this Section 4.8 shall not result in any right of first
refusal by Liberty pursuant to Section 4.9.
SECTION 4.9 Right of First Refusal between Liberty and Xxxxxx.
(a) Any Transfer of Common Shares by a member of the Liberty Stockholder Group
or a member of the Xxxxxx Stockholder Group (the "L/D Transferring Party") will
be subject to the right of first refusal provisions of this Section 4.9, other
than a Transfer by a member of the Liberty Stockholder Group or the Xxxxxx
Stockholder Group permitted by Section 4.1(a) hereof, a Transfer by Liberty
pursuant to Section 4.2, 4.3, 4.5 hereof, a Transfer by Xxxxxx with respect
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to which Liberty has a right pursuant to Section 4.6, a Transfer that is a sale
described in Sections 4.6(e)(ii) and 4.7(e)(i) or a Market Sale that is not a
Covered Market Sale.
(b) Prior to effecting any Transfer referred to in Section
4.9(a), the L/D Transferring Party shall deliver written notice (the "L/D Offer
Notice") to Xxxxxx, if the L/D Transferring Party is a member of the Liberty
Stockholder Group, or to Liberty, if the L/D Transferring Party is a member of
the Xxxxxx Stockholder Group (the recipient of such notice, the "L/D Other
Party"), which Offer Notice shall specify (i) the Person to whom the L/D
Transferring Party proposes to make such Transfer or the proposed manner of
Transfer in the case of a public offering or a Covered Market Sale, (ii) the
number or amount and description of the Common Shares to be Transferred, (iii)
except in the case of a public offering or a Covered Market Sale, the L/D Offer
Price (as defined below), and (iv) all other material terms and conditions of
the proposed Transfer, including a description of any non-cash consideration
sufficiently detailed to permit valuation thereof, and which Offer Notice shall
be accompanied by any written offer from the prospective transferee to purchase
such Common Shares, if available and permitted pursuant to the terms thereof.
The L/D Offer Notice shall constitute an irrevocable offer to the L/D Other
Party, for the period of time described below, to purchase all (but not less
than all) of such Common Shares.
(c) For purposes of this Section 4.9, "L/D Offer Price" shall
mean the purchase price per Common Share to be paid to the L/D Transferring
Party in the proposed transaction (as it may be adjusted in order to determine
the net economic value thereof). In the event that the consideration payable to
the L/D Transferring Party in a proposed transaction consists of securities, the
purchase price per share shall equal the fair market value of such securities
divided by the number of Common Shares to be Transferred. Such fair market value
shall be the market price of any publicly traded security and, if such security
is not publicly traded, the fair market value shall be equal to the appraised
value (calculated in accordance with the method described in Section 4.2(d)) of
such security.
(d) If the L/D Other Party elects to purchase the offered
Common Shares, it shall give notice to the L/D Transferring Party within ten
Business Days after receipt of the L/D Offer Notice of its election (or in the
case of a third party tender offer or exchange offer, not later than five
Business Days prior to the expiration date of such offer, provided that all
conditions to such offer (other than with respect to the number of Common Shares
tendered) shall have been satisfied or waived and the L/D Offer Notice shall
have been provided at least ten Business Days prior to the expiration date of
such offer), which shall constitute a binding obligation, subject to standard
terms and conditions for a stock purchase contract between two significant
stockholders of an issuer (provided that the L/D Transferring Party shall not be
required to make any representations or warranties regarding the business of the
Company), to purchase the offered Common Shares, which notice shall include the
date set for the closing of such purchase, which date shall be no later than 20
Business Days following the delivery of such election notice, or, if later, five
Business Days after receipt of all required regulatory approvals; provided that
the closing shall only be delayed pending receipt of required regulatory
approvals if (i) the L/D Other Party is using reasonable efforts to obtain the
required regulatory approvals, (ii) there is a reasonable prospect of receiving
such regulatory approvals and (iii) if such closing is delayed more than 90 days
after the date
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of the L/D Other Party's notice of election to purchase, then the L/D Other
Party agrees to pay interest at the Reference Rate to the L/D Transferring Party
from such date to the closing date. Notwithstanding the foregoing, such time
periods shall not be deemed to commence with respect to any purported notice
that does not comply in all material respects with the requirements of this
Section 4.9(d). Liberty and Xxxxxx may assign their respective rights to
purchase under this Section 4.9 to any Person who is a Permitted Designee.
(e) Subject to Section 4.9(f) in the case of a Covered Market
Sale, if the L/D Other Stockholder does not respond to the L/D Offer Notice
within the required response time period or elects not to purchase the offered
Common Shares, the L/D Transferring Party shall be free to complete the proposed
Transfer (to the same proposed transferee, in the case of a privately-negotiated
transaction) on terms no less favorable to the L/D Transferring Party or its
Affiliate, as the case may be, than those set forth in the L/D Offer Notice,
provided that (x) such Transfer is closed within (I) 90 days after the latest of
(A) the expiration of the foregoing required response time periods, or (B) the
receipt by the L/D Transferring Party of the foregoing election notice or, in
the case of (A) or (B), if later, five Business Days following receipt of all
required regulatory approvals; provided that the closing shall only be delayed
pending receipt of required regulatory approvals if (i) the L/D Transferring
Stockholder is using reasonable efforts to obtain the required regulatory
approvals and (ii) there is a reasonable prospect of receiving such regulatory
approvals, or (II) in the case of a public offering, within 20 days of the
declaration by the Commission of the effectiveness of a registration statement
filed with the Commission pursuant to this Agreement, and (y) the price at which
the Common Shares are transferred must be equal to or higher than the L/D Offer
Price (except in the case of a public offering, in which case the price at which
the Common Shares are sold (before deducting underwriting discounts and
commissions) shall be equal to at least 90% of the L/D Offer Price).
(f) If the L/D Other Stockholder does not respond to the L/D
Offer Notice with respect to a Covered Market Sale within the required response
time period or elects not to purchase the offered Common Shares, the L/D
Transferring Party shall be free to complete the proposed Covered Market Sale in
one or more transactions during the 90-day period commencing on the latest of
(i) the expiration of the required response time period described in Section
4.9(d) or (ii) receipt by the L/D Transferring Party of the election notice
described in Section 4.9(d), provided that the price at which each Common Share
is transferred (excluding brokerage commissions) shall be at least equal to 90%
of the L/D Offer Price.
(g) If the L/D Other Party elects to exercise its right of
first refusal under this Section 4.9, the L/D Other Party shall pay the L/D
Offer Price in cash (by wire transfer of immediately available funds) or by the
delivery of marketable securities having an aggregate fair market value equal to
the L/D Offer Price, provided, that if the securities to be so delivered by the
L/D Other Party would not, in the L/D Transferring Party's possession, have at
least the same general degree of liquidity as the securities the L/D
Transferring Party was to receive in such proposed transaction (determined by
reference to the L/D Transferring Party's ability to dispose of such securities
(including, without limitation, the trading volume of such securities and the
L/D Other Party's percentage ownership of the issuer of such securities)), then
the L/D Other Party shall be required to deliver securities having an
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appraised value (calculated in accordance with the method described in Section
4.2(d)) equal to the L/D Offer Price. If the L/D Other Party delivers securities
in payment of the L/D Offer Price, it will cause the issuer of such securities
to provide the L/D Transferring Party with customary registration rights related
thereto (if, in the other transaction, the L/D Transferring Party would have
received cash, cash equivalents, registered securities or registration rights).
Each of Xxxxxx and Liberty agrees to use his or its commercially reasonable
efforts (but not to expend any money) to preserve for the other Stockholder, to
the extent possible, the tax benefits available to it in such proposed
transaction, and to otherwise seek to structure such transaction in the most tax
efficient method available. Notwithstanding the foregoing, if Xxxxxx pays the
L/D Offer Price in securities, such securities must be securities that Liberty
is permitted to own under applicable FCC Regulations.
(h) Notwithstanding anything to the contrary contained in this
Section 4.9, the time periods applicable to an election by the L/D Other Party
to purchase the offered securities shall not be deemed to commence until the
fair market value has been determined, provided that, in the case of a third
party tender offer or exchange offer, in no event shall any such election be
permitted later than five Business Days prior to the latest time by which Common
Shares shall be tendered in such offer if all conditions to such offer (other
than the number of shares tendered) have been satisfied or waived. Each of
Xxxxxx and Liberty agrees to use his and its best efforts to cause the fair
market value to be determined as promptly as practicable, but in no event later
than ten Business Days after the receipt by the L/D Other Stockholder of the L/D
Offer Notice.
SECTION 4.10 Right of First Refusal of Universal. (a) Subject
to the right of first refusal of Xxxxxx pursuant to Section 4.9, any direct or
indirect Transfer of Common Shares by a member of the Liberty Stockholder Group
prior to August 24, 2000 with respect to which Xxxxxx would have a right of
first refusal pursuant to Section 4.9 will be subject to a right of first
refusal by Universal on the same terms and conditions as are applicable to
Xxxxxx pursuant to Section 4.9, mutatis mutandis.
(b) Universal acknowledges and agrees that its right of first
refusal pursuant to this Section 4.10 is subject to the right of first refusal
by Xxxxxx pursuant to Section 4.9.
(c) This Section 4.10 shall only be applicable to the initial
Transfer by Liberty of a number of Common Shares having an aggregate number of
votes equal to the Specified Votes.
SECTION 4.11 Transfers of Class B Shares. (a) Subject to the
rights of first refusal pursuant to Sections 4.8, 4.9 and 4.10 and subject to
paragraph (c) below, in the event that any Stockholder (the "Transferring
Stockholder") proposes to Transfer any shares of Class B Common Stock, such
Stockholder shall send a written notice (which obligation may be satisfied by
the delivery of the applicable Offer Notice) (the "Exchange Notice") to each
other Stockholder (the "Non-Transferring Stockholders"), that such Transferring
Stockholder intends to Transfer shares of Class B Common Stock, including the
number of such shares proposed to be Transferred. Each Non-Transferring
Stockholder shall give notice to the Transferring Stockholder within 20 days of
its receipt of the Exchange Notice of its desire to
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exchange some or all of such shares of Class B Common Stock proposed to be
Transferred for an equivalent number of shares of Common Stock. If each of the
Non-Transferring Stockholders desires to exchange some or all of such shares and
to the extent that such shares are not otherwise Transferred to any Stockholder
(or its Permitted Designee) pursuant to Section 4.8, 4.9 or 4.10, such shares of
Class B Common Stock shall be exchanged (i) if the Transferring Stockholder is
other than Xxxxxx, first with Xxxxxx (to the extent he elects to exchange),
second, with respect to any remaining shares, with Universal (to the extent that
Universal elects to exchange) (if Universal is not the Transferring Stockholder)
and third, with Liberty and (ii) if the Transferring Stockholder is Xxxxxx, then
with Universal (to the extent that Universal elects to exchange), with any
remaining shares of Class B Common Stock exchanged with Liberty (to the extent
that Liberty elects to exchange). Except to the extent necessary to avoid
liability under Section 16(b) of the Exchange Act and subject to applicable law,
any such exchange shall be consummated immediately prior to the consummation of
any such Transfer.
(b) If any shares of Class B Common Stock proposed to be
Transferred are not exchanged pursuant to the provisions of paragraph (a) above,
prior to any such Transfer, the Transferring Stockholder shall convert, or cause
to be converted, such shares of Class B Common Stock into shares of Common Stock
(or such other securities of the Company into which such shares are then
convertible).
(c) The provisions of Section 4.11(a) and 4.11(b) shall not be
applicable to any Transfers (i) to a member of such Stockholder's Stockholder
Group, (ii) by Universal to a Permitted Designee of Universal; provided that (x)
Universal and all members of its Stockholder Group were precluded by FCC
Regulations from purchasing the shares purchased by such Permitted Designee and
(y) such Permitted Designee is reasonably satisfactory to Xxxxxx, (iii) pursuant
to a pledge or grant of a security interest in compliance with clause (y) of
Section 4.1(a), (iv) from one Stockholder or its Stockholder Group to the other
Stockholder or its Stockholder Group subject to the terms of this Agreement, (v)
any sale by Universal that would constitute a Universal Tag-Along Sale, (vi) any
sale by Liberty in connection with a Universal Tag-Along Sale or following the
Standstill Termination Date or (vii) by Universal following the CEO Termination
Date.
SECTION 4.12 Transferees. (a) Any Permitted Transferee or
Permitted Designee of a Stockholder shall be subject to the terms and conditions
of this Agreement as if such Permitted Transferee or Permitted Designee were
Universal (if Universal or a Permitted Transferee of Universal is the
transferor), Liberty (if Liberty or a Permitted Transferee of Liberty is the
transferor) or Xxxxxx (if Xxxxxx or a Permitted Transferee of Xxxxxx is the
transferor). Prior to the initial acquisition of beneficial ownership of any
Common Shares by any Permitted Transferee (or a Permitted Designee), and as a
condition thereto, each Stockholder agrees (i) to cause its respective Permitted
Transferees or Permitted Designees to agree in writing with the other parties
hereto to be bound by the terms and conditions of this Agreement to the extent
described in the preceding sentence and (ii) that such Stockholder shall remain
directly liable for the performance by its respective Permitted Transferees or
Permitted Designees of all obligations of such Permitted Transferees or
Permitted Designees under this Agreement. Except as otherwise contemplated by
this Agreement (i) each of
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Universal, Xxxxxx and Liberty agrees not to cause or permit any of its
respective Permitted Transferees to cease to qualify as a member of such
Stockholder's Stockholders Group so long as such Permitted Transferee
beneficially owns any Common Shares, and if any such Permitted Transferee shall
cease to be so qualified, such Permitted Transferee shall automatically upon the
occurrence of such event cease to be a "Permitted Transferee" for any purpose
under this Agreement and (ii) each Stockholder agrees not to Transfer any Common
Shares to any Affiliate other than a Permitted Transferee of such Stockholder.
(b) No Third Party Transferee shall have any rights or
obligations under this Agreement, except:
(i) in the case of a Third Party Transferee of
Liberty (or any member of the Liberty Stockholder Group) who
acquires shares of Common Stock and who (together with its
Affiliates) would not be a Public Stockholder if at such time
Universal proposed a Permitted Business Combination (provided
that for purposes of this clause, the percentage referred to
in the definition of Public Stockholder shall be 15% in lieu
of 10%), such Third Party Transferee shall be subject to the
obligations of Liberty (but subject to the other terms and
conditions of this Agreement) pursuant to Article II (but only
for 18 months following the acquisition of such shares),
Section 3.2 (but only for 18 months following the acquisition
of such shares), Section 3.3(a) (but shall not have the right
to consent to any Fundamental Changes), the first sentence of
Section 3.3(b), Section 3.3(c), Section 3.7, as applicable,
this Section 4.12 and Article VI; provided that
notwithstanding any time periods set forth above, such Third
Party Transferee shall only be subject to such obligations for
so long as it would not be a Public Stockholder determined in
the manner set forth above;
(ii) in the case of a Third Party Transferee of
Universal (or any member of the Universal Stockholder Group)
who (together with its Affiliates) upon consummation of any
Transfer would not be a Public Stockholder if at such time
Universal proposed a Permitted Business Combination (provided
that for purposes of this clause, the percentage referred to
in the definition of Public Stockholder shall be 15% in lieu
of 10%), such Third Party Transferee shall be subject to the
obligations of Universal (but subject to the other terms and
conditions of this Agreement) pursuant to Section 3.3(a) (but
shall not have the right to consent to any Fundamental
Changes), Section 3.3(c), Section 3.4 (but only for 18 months
following the acquisition of such shares), Section 3.7,
Section 4.4 (to the extent provided in Section 4.4(f), this
Section 4.12 and Article VI; provided that notwithstanding any
time periods set forth above, such Third Party Transferee
shall only be subject to such obligations for so long as it
would not be a Public Stockholder determined in the manner set
forth above; and
(iii) in the case of a Third Party Transferee of
Xxxxxx (or any member of the Xxxxxx Stockholder Group) who
(together with its Affiliates) upon consummation of any
Transfer would not be a Public Stockholder if at such
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time Universal proposed a Permitted Business Combination
(provided that for purposes of this clause, the percentage
referred to in the definition of Public Stockholder shall be
15% in lieu of 10%), such Third Party Transferee shall be
subject to the obligations of Xxxxxx (but subject to the other
terms and conditions of this Agreement) pursuant to Section
3.3(a) (but shall not have the right to consent to any
Fundamental Changes), the first sentence of Section 3.3(b),
Section 3.3(c), Section 3.7, this Section 4.12 and Article VI
and the obligations under Article II as if Xxxxxx had the
obligations of Liberty under such Article (but only for 18
months following the acquisition of such shares) and the
obligations under Section 3.2 as if Xxxxxx had the obligations
of Liberty under such Section (but only for 18 months
following the acquisition of such shares); provided that
notwithstanding any time periods set forth above, such Third
Party Transferee shall only be subject to such obligations for
so long as it would not be a Public Stockholder determined in
the manner set forth above.
(c) Prior to the consummation of a Transfer described in
Section 4.12(b) to the extent rights and obligations are to be assigned, and as
a condition thereto, the applicable Third Party Transferee shall agree in
writing with the other parties hereto to be bound by the terms and conditions of
this Agreement to the extent described in Section 4.12(b). To the extent the
Third Party Transferee is not an "ultimate parent entity" (as defined in the HSR
Act), the ultimate parent entity of such Third Party Transferee shall agree in
writing to be directly liable for the performance of the Third Party Transferee
to the same extent Universal or Liberty would be liable for their respective
Permitted Transferees.
SECTION 4.13 Notice of Transfer. To the extent any Stockholder
and its Permitted Transferees shall Transfer any Common Shares, such Stockholder
shall, within three Business Days following consummation of such Transfer,
deliver notice thereof to the Company and the other Stockholders, provided,
however, that no such notice shall be required to be delivered unless the
aggregate Common Shares transferred by such Stockholder and its Permitted
Transferees since the date of the last notice delivered by such Stockholder
pursuant to this Section 4.13 exceeds 1% of the outstanding Common Shares.
SECTION 4.14 Compliance with Transfer Provisions. Any Transfer
or attempted Transfer of Common Shares in violation of any provision of this
Agreement shall be void.
ARTICLE V
BDTV ENTITY ARRANGEMENTS
SECTION 5.1 Management. The business and affairs of each BDTV
Entity will be managed by a Board of Directors elected by the holders of a
majority of the voting equity interests in such BDTV Entity. Notwithstanding the
foregoing, the taking of any action by a BDTV Entity with respect to (i) to the
extent permitted by applicable law, any Fundamental Change (as applied to such
BDTV Entity, mutatis mutandis) or (ii) any acquisition or disposition (including
pledges) of any Common Shares held by such XXXX
00
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Entity, in either case, will require the unanimous approval of the holders of
all voting and non-voting equity interests in such BDTV Entity.
SECTION 5.2 Treatment of Contingent Shares and Exchange
Shares. If as a result of any issuance of shares of Class B Common Stock to
Liberty HSN pursuant to its Contingent Right, Liberty HSN would otherwise Own
(for purpose of the FCC Regulations) Common Shares (other than any such shares
held by a BDTV Limited Entity or, to the extent Liberty HSN is not deemed to
have an "attributable interest" therein, a BDTV Unrestricted Entity) which would
represent an "attributable interest" in the Company under applicable FCC
Regulations, (i) Liberty HSN will contribute to a newly-formed BDTV Unrestricted
Entity all such Contingent Shares in exchange for non-voting equity securities
of such BDTV Entity (in an amount based on the market price of the Common Stock
as of the date of such contribution) and (ii) Xxxxxx will contribute to such
BDTV Unrestricted Entity a number of whole shares of Common Stock equal to (A)
$100, divided by (B) the market price of the Common Stock as of the date of such
contribution, rounded up to the nearest whole number.
In the event that a holder of Exchange Securities would be
entitled to hold directly shares of Class B Common Stock issuable upon an
exchange of shares of Liberty Surviving Class B Stock but for the limitation
imposed by the FCC Regulations relating to a person's aggregate voting power in
the Company, and if such person would, under the FCC Regulations, be permitted
to hold directly a number of shares of Common Stock equal to the number of
shares of Class B Common Stock so issuable, then in connection with such
exchange, such holder will be required to offer to exchange such shares of Class
B Common Stock so receivable by it for Class B Common Stock owned by the Xxxxxx
Stockholder Group and, if Xxxxxx does not accept such offer to exchange, or if
such exchange with the Xxxxxx Stockholder Group cannot be accomplished on a
tax-free basis (and the exchange of such Exchange Securities for Common Shares
would not otherwise be taxable), then such holder shall be entitled to exchange
such Exchange Securities for shares of Class B Common Stock and thereafter
convert such shares of Class B Common Stock into shares of Common Stock.
Nothing in this Agreement shall obligate Liberty HSN to
contribute any Common Shares received pursuant to the Investment Agreement, the
Holder Exchange Agreement or upon exchange or other conversion of LLC Shares
pursuant to the Investment Agreement to a BDTV Entity.
SECTION 5.3 Changes to BDTV Structures. Liberty and Xxxxxx
agree, subject to applicable law and FCC Regulations, to take such actions as
may be reasonably necessary, including but not limited to amending the
certificate of incorporation of the BDTV Entities, in order to provide Liberty
with the ability to transfer, directly or indirectly, such amounts of Common
Shares Liberty is permitted to sell pursuant to Section 4.1(b)(iii).
SECTION 5.4 Transfers of BDTV Interests. Except as otherwise
specifically provided in this Agreement (including Section 4.1(b)), no transfers
or other dispositions (including pledges), directly or indirectly, of any
interest in (a) any BDTV Limited Entity by Liberty or (b) any BDTV Entity by
Xxxxxx will be permitted without the consent of the other; provided, that (i)
Liberty shall be entitled to transfer all or part of its interest in a XXXX
00
00
Entity to members of the Liberty Stockholder Group, (ii) at such time Liberty
becomes the owner of any voting securities of any BDTV Limited Entity, such BDTV
Limited Entity shall be deemed to be a BDTV Unrestricted Entity, and (iii) in
connection with any sale by Universal or Xxxxxx entitling Liberty to a right
pursuant to Section 4.5, 4.6 or 4.7, an exercise of the Liberty Put Right or the
Call Right by Universal, to the extent Liberty elects to exercise its right
pursuant to such Section or is otherwise selling Common Shares to Universal
pursuant to Section 4.2, Liberty and Xxxxxx shall take such reasonable action as
may be required in order for such interest in a BDTV Limited Entity to be sold
in any such transaction. Without the prior written consent of Liberty, Xxxxxx
shall not Transfer any interest in a BDTV Entity (other than to Liberty or,
subject to Liberty's reasonable consent, a member of the Xxxxxx Stockholder
Group).
For purposes of determining whether Liberty is permitted to
transfer the Common Shares held by a BDTV Unrestricted Entity, (i) such BDTV
Unrestricted Entity shall be deemed to be a member of the Liberty Stockholder
Group and the restrictions on transfers of interests in BDTV Entities shall not
apply to Liberty (subject, however, to the other restrictions on transfer of
Common Shares set forth herein, including the Right of First Refusal) and (ii)
in connection with any proposed sale by Liberty HSN of the Common Shares held by
a BDTV Entity (or its equity interest in such BDTV Entity), Liberty shall be
entitled to purchase Xxxxxx'x entire interest in such BDTV Entity for an amount
in cash equal to the Xxxxxx Interest Purchase Price (formerly the "Dodgers
Interest Purchase Price") or, at its election, require Xxxxxx to sell his
interest in such BDTV Entity to any such transferee for a pro rata portion of
the consideration to be paid by the applicable transferee in such transaction.
At such time as (i) the CEO Termination Date has occurred or
Xxxxxx becomes Disabled or (ii) the Xxxxxx Stockholder Group ceases to own its
Eligible Stockholder Amount of Common Shares, Xxxxxx shall be required to sell
his entire interest in the BDTV Entities to Liberty (or Liberty's designee) at a
price equal to the Xxxxxx Interest Purchase Price.
ARTICLE VI
MISCELLANEOUS
SECTION 6.1 Conflicting Agreements. Each of the Stockholders
and the Company represents and warrants that such party has not granted and is
not a party to any proxy, voting trust or other agreement that is inconsistent
with or conflicts with any provision of this Agreement.
SECTION 6.2 Duration of Agreement. Except as otherwise
provided in this Agreement, the rights and obligations of a Stockholder under
this Agreement shall terminate as follows:
(a) Universal shall cease to be entitled to exercise any
rights and shall cease to have any obligations under this Agreement as of the
date that it ceases to have the right under
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the Governance Agreement to designate any directors to the Board (the "Universal
Termination Date").
(b) Subject to Section 4.4 which shall survive until the
termination of the period for exercise (and, if exercised, until consummation)
of the Xxxxxx Put specified in Section 4.4, each of Liberty and Xxxxxx shall
cease to be entitled to exercise any rights and shall cease to have any
obligations under this Agreement as of the date that its Stockholder Group
collectively ceases to own its Eligible Stockholder Amount of Common Shares;
provided that Liberty shall cease to be entitled to exercise any rights and
shall cease to have any obligations under Sections 4.2, 4.3, 4.5, 4.6 and 4.7 at
such time as the Liberty Stockholder Group ceases to beneficially owns at least
5% of the outstanding Common Shares (the "Liberty Termination Date").
(c) Xxxxxx and each member of his Stockholder Group shall
cease to be entitled to exercise any rights (other than the Xxxxxx Put Right)
under this Agreement if the CEO Termination Date has occurred or Xxxxxx has
become Disabled (the "Xxxxxx Termination Date").
In addition, at such time as the CEO Termination Date has
occurred or Xxxxxx has become Disabled, neither the Xxxxxx Stockholder Group nor
the Liberty Stockholder Group shall have any obligation under this Agreement
with respect to the matters covered under Sections 3.6, 4.1 and 4.9.
SECTION 6.3 Further Assurances. At any time or from time to
time after the date hereof, the parties agree to cooperate with each other, and
at the request of any other party, to execute and deliver any further
instruments or documents and to take all such further action as the other party
may reasonably request in order to evidence or effectuate the consummation of
the transactions contemplated hereby and to otherwise carry out the intent of
the parties hereunder. Without limiting the generality of the foregoing, if, in
connection with the purchase of any Equity by Universal or Liberty pursuant to
Article IV, to the extent that Universal shall be restricted by FCC Regulations
from owning Common Shares, the Stockholders agree to cooperate, and cause the
Company to cooperate, and the Company agrees to cooperate in structuring the
purchase so that Universal shall acquire LLC Shares (in lieu of Common Shares)
in the transaction; provided that the transferee shall not be required to suffer
adverse tax consequences as a result of the foregoing.
SECTION 6.4 SCL Agreement to Cooperate. SCL agrees to
cooperate in good faith with Universal to satisfy Universal's obligation with
respect to providing Liquid Securities to Liberty pursuant to Sections 4.2 and
4.3 with SCL common stock, subject to (i) SCL continuing to beneficially own,
directly or indirectly, at least 80% of the Equity of Universal, (ii) existing
MEI arrangements, and (iii) fiduciary duties of SCL directors.
SECTION 6.5 Amendment and Waiver. Except as otherwise provided
herein, no modification, amendment or waiver of any provision of this Agreement
shall be effective against any Stockholder unless such modification, amendment
or waiver is approved in writing by each Stockholder; provided that with respect
to any provision containing an
48
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agreement between only two Stockholders, such provision may be modified or
waived by approval in writing by such Stockholders, without the consent of the
third Stockholder unless such modification or waiver adversely affects the
rights of such third Stockholder as provided under this Agreement or the
Governance Agreement; provided, further, each amendment, modification or waiver
of the provisions of Section 2.1 by Universal without the consent of the Company
shall be subject to the terms and conditions of the Governance Agreement. The
failure of any party to enforce any of the provisions of this Agreement shall in
no way be construed as a waiver of such provisions and shall not affect the
right of such party thereafter to enforce each and every provision of this
Agreement in accordance with its terms.
SECTION 6.6 Severability. Whenever possible, each provision of
this Agreement shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Agreement is held to be
invalid, illegal or unenforceable in any respect under any applicable law or
rule in any jurisdiction, such invalidity, illegality or unenforceability shall
not affect any other provision or any other jurisdiction, but this Agreement
shall be reformed, construed and enforced in such jurisdiction as if such
invalid, illegal or unenforceable provision had never been contained herein.
SECTION 6.7 Effective Date. Other than with respect to Section
3.3(e) which shall be effective as of the date hereof, this Agreement shall
become effective immediately upon the Closing.
SECTION 6.8 Entire Agreement. Except as otherwise expressly
set forth herein, this document and the Transaction Agreements embody the
complete agreement and understanding among the parties hereto with respect to
the subject matter hereof and supersede and preempt any prior understandings,
agreements or representations by or among the parties, written or oral, that may
have related to the subject matter hereof in any way. Without limiting the
generality of the foregoing, to the extent that any of the terms hereof are
inconsistent with the rights or obligations of any Stockholder under any other
agreement with any other Stockholder or the Company, the terms of this Agreement
shall govern. Upon the Closing, the stockholders agreements between Liberty and
Xxxxxx, dated as of August 24, 1995 and August 25, 1996 shall terminate and
shall be superseded by this Agreement.
SECTION 6.9 Successors and Assigns. Neither this Agreement nor
any of the rights or obligations under this Agreement shall be assigned, in
whole or in part (except by operation of law pursuant to a merger whose purpose
is not to avoid the provisions of this Agreement), by any party without the
prior written consent of the other parties hereto. Subject to the foregoing,
this Agreement shall bind and inure to the benefit of and be enforceable by the
parties hereto and their respective successors and assigns.
SECTION 6.10 Counterparts. This Agreement may be executed in
separate counterparts each of which shall be an original and all of which taken
together shall constitute one and the same agreement.
SECTION 6.11 Liabilities Under Federal Securities Laws. The
exercise by any Stockholder (or its Affiliates or Stockholder Group, if
applicable) (and including, in the case
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of the Liberty Stockholder Group, its exercise of the rights relating to the
Contingent Right or the Holder Exchange Agreement) of any rights under this
Agreement shall be subject to such reasonable delay as may be required to
prevent any Stockholder or its respective Stockholder Group from incurring any
liability under the federal securities laws and the parties agree to cooperate
in good faith in respect thereof.
SECTION 6.12 Remedies. (a) Each party hereto acknowledges that
money damages would not be an adequate remedy in the event that any of the
covenants or agreements in this Agreement are not performed in accordance with
its terms, and it is therefore agreed that in addition to and without limiting
any other remedy or right it may have, the non-breaching party will have the
right to an injunction, temporary restraining order or other equitable relief in
any court of competent jurisdiction enjoining any such breach and enforcing
specifically the terms and provisions hereof.
(b) All rights, powers and remedies provided under this
Agreement or otherwise available in respect hereof at law or in equity shall be
cumulative and not alternative, and the exercise or beginning of the exercise of
any thereof by any party shall not preclude the simultaneous or later exercise
of any other such right, power or remedy by such party.
SECTION 6.13 Notices. Any notice, request, claim, demand or
other communication under this Agreement shall be in writing, shall be either
personally delivered, delivered by facsimile transmission, or sent by reputable
overnight courier service (charges prepaid) to the address for such Person set
forth below or such other address as the recipient party has specified by prior
written notice to the other parties hereto and shall be deemed to have been
given hereunder when receipt is acknowledged for personal delivery or facsimile
transmission or one day after deposit with a reputable overnight courier
service.
If to Universal:
Universal Studios, Inc.
000 Xxxxxxxxx Xxxx Xxxxx
Xxxxxxxxx Xxxx, XX 00000
Attention: Xxxxx Xxxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to:
Xxxxxxx Xxxxxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Attention: Xxxx X. Xxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
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If to Liberty:
Liberty Media Corporation
0000 Xxxx Xxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000
Attention: President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to:
Xxxxx & Xxxxx LLP
000 Xxxxxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxxxxxx X. XxXxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to Xxxxxx:
c/o HSN, Inc.
0 XXX Xxxxx
Xx. Xxxxxxxxxx, Xxxxxxx 00000
Attention: General Counsel
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to:
Wachtell, Lipton, Xxxxx & Xxxx
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to SCL:
The Seagram Company Ltd.
0000 Xxxx Xxxxxx
Xxxxxxxx, Xxxxxx
X0X 0X0 Xxxxxx
Attention: Vice President, Legal and Environmental Affairs
Telephone: (000) 000-0000
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Facsimile: (000) 000-0000
with copies to:
Xxxxxx X. Xxxxxxx & Sons, Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Vice President--Legal Affairs, General Counsel
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Xxxxxxx Xxxxxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Attention: Xxxx X. Xxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
SECTION 6.14 Governing Law; Consent to Jurisdiction. This
Agreement shall be governed by and construed in accordance with the laws of the
State of Delaware without giving effect to the principles of conflicts of law.
Each of the parties hereto hereby irrevocably and unconditionally consents to
submit to the non-exclusive jurisdiction of the courts of the State of Delaware
for any action, proceeding or investigation in any court or before any
governmental authority ("Litigation") arising out of or relating to this
Agreement and the transactions contemplated hereby and further agrees that
service of any process, summons, notice or document by U.S. mail to its
respective address set forth in this Agreement shall be effective service of
process for any Litigation brought against it in any such court. Each of the
parties hereto hereby irrevocably and unconditionally waives any objection to
the laying of venue of any Litigation arising out of this Agreement or the
transactions contemplated hereby in the courts of the State of Delaware, and
hereby further irrevocably and unconditionally waives and agrees not to plead or
claim in any such court that any such Litigation brought in any such court has
been brought in an inconvenient forum. Each of the parties irrevocably and
unconditionally waives, to the fullest extent permitted by applicable law, any
and all rights to trial by jury in connection with any Litigation arising out of
or relating to this Agreement or the transactions contemplated hereby.
SECTION 6.15 Interpretation. The table of contents and
headings contained in this Agreement are for reference purposes only and shall
not affect in any way the meaning or interpretation of this Agreement. Whenever
the words "include", "includes" or "including" are used in this Agreement, they
shall be deemed to be followed by the words "without limitation". Whenever it is
necessary for purposes of this Agreement to determine whether an exchange is
tax-free or taxable, such determination shall be made without regard to any
interest imputed pursuant to Section 483 of the Code.
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IN WITNESS WHEREOF, the parties hereto have executed this
Stockholders Agreement as of the date first written above.
UNIVERSAL STUDIOS, INC.
By:/s/ Xxxxx X. Xxxxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Senior Vice President
LIBERTY MEDIA CORPORATION
By:/s/ Xxxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: President and CEO
XXXXX XXXXXX
/s/ Xxxxx Xxxxxx
---------------------------------------
HSN, INC. (with respect to Sections 4.4(g), 4.5(d)
and 6.3)
By:/s/ Xxxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Office of Chairman
THE SEAGRAM COMPANY LTD. (with respect to
Sections 4.2(f) and 6.4)
By:/s/ Xxxxxx X. Xxxxxxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxxxxxx
Title: Vice Chairman and Chief Financial Officer
