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EXHIBIT 10.1
EXCHANGE AGREEMENT
THIS EXCHANGE AGREEMENT (the "Agreement") dated as of September 27, 2000 is
by and between LIBERTY MEDIA CORPORATION, a Delaware corporation ("Liberty"),
and LIBERTY DIGITAL, INC., a Delaware corporation ("LDIG").
WHEREAS, Liberty owns 150,000 shares (the "Liberty Shares") of LDIG's
Convertible Preferred Stock, Series B, par value $.01 per share (the "LDIG
Series B");
WHEREAS, the Liberty Shares constitute all of the issued and outstanding
shares of the LDIG Series B; and
WHEREAS, Liberty and LDIG desire to effect an exchange of the Liberty
Shares for new shares of LDIG preferred stock, subject to the terms and
conditions of this Agreement.
NOW THEREFORE, in consideration of the foregoing and of the mutual
conditions and obligations set forth herein, the parties agree as follows:
1. Series C Preferred Stock. LDIG will cause to be filed in accordance
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with its Restated Certificate of Incorporation as in effect as of the date
hereof (the "LDIG Certificate") and the Delaware General Corporation Law (the
"DGCL") a Certificate of Designations in the form of Exhibit A hereto for a new
series of LDIG's Series Preferred Stock (as defined in the LDIG Certificate)
designated "Convertible Preferred Stock, Series C," par value $.01 per share
(the "Series C Preferred Stock") with the Office of the Secretary of State of
the State of Delaware on or before September 29, 2000.
2. Series D Preferred Stock. LDIG will cause to be filed in accordance
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with the LDIG Certificate and the DGCL a Certificate of Designations in the form
of Exhibit B hereto for a new series of LDIG's Series Preferred Stock designated
"Preferred Stock, Series D," par value $.01 per share (the "Series D Preferred
Stock") with the Office of the Secretary of State of the State of Delaware on or
before September 29, 2000.
3. Exchange. On September 30, 2000, LDIG and Liberty will exchange the
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Liberty Shares for shares of Series C Preferred Stock and Series D Preferred
Stock as follows:
(a) LDIG shall deliver to Liberty a certificate evidencing the
issuance of 150,000 shares of Series C Preferred Stock and a certificate
evidencing the issuance of 8,105.688 shares of Series D Preferred Stock,
each such certificate to be registered in the name of Liberty DMX, Inc.
(b) Liberty shall deliver to LDIG the Liberty Shares, such transfer to
be effected by the delivery of one or more certificates evidencing the
Liberty Shares, duly endorsed for transfer to LDIG or accompanied by duly
executed stock assignments.
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(c) The foregoing issuance and transfer shall be effected
simultaneously and be conditioned upon each other.
4. Dividends on Liberty Shares. All accrued and unpaid dividends on the
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Liberty Shares for the period beginning on September 9, 1999 and ending on
September 30, 2000 shall be paid by the delivery of the Series D Preferred
Stock.
5. LDIG Representations. To induce Liberty to enter into this
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Agreement and to effect the plan of reorganization and all related transactions
contemplated hereby, LDIG hereby represents and warrants as follows, all of
which representations and warranties shall survive the execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby:
(a) LDIG (i) is a duly organized and validly existing corporation, in
good standing under the laws of Delaware; (ii) has the corporate power and
authority to execute, deliver and perform the terms and provisions of this
Agreement and to consummate the transactions contemplated hereby; (iii) has
taken all necessary corporate action to authorize the execution, delivery
and performance by it of this Agreement, the Certificates of Designations
for the Series C Preferred Stock and Series D Preferred Stock and the
issuance to Liberty of shares of Series C Preferred Stock and Series D
Preferred Stock; and (iv) has duly executed and delivered this Agreement;
(b) This Agreement constitutes the legal, valid and binding
obligation of LDIG enforceable against LDIG in accordance with its terms,
except to the extent that the enforceability hereof may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar
laws generally affecting creditors' rights and by equitable principles
(regardless of whether enforcement is sought in equity or at law);
(c) Neither the execution, delivery or performance by LDIG of this
Agreement and the Certificates of Designations, nor compliance by LDIG with
the terms and provisions hereof and thereof, nor the consummation of the
transactions contemplated hereby (i) will violate any provision of LDIG's
certificate of incorporation or bylaws; (ii) will require any consent or
approval of any person; (iii) will contravene any provision of any laws
applicable to LDIG; or (iv) will conflict with or result in any breach of
or constitute a tortious interference with any of the terms, covenants,
conditions or provisions of, or constitute a default under, or result in
the creation or imposition of (or the obligation to create or impose) any
lien upon any of the property or assets of LDIG pursuant to the terms of
any contractual obligation to which LDIG is a party or by which it or any
of its property or assets is bound or to which it may be subject, except in
the case of clauses (ii), (iii) and (iv) above for any consent or approval
the failure to obtain which would not, and any such contravention, conflict
or result as would not, have a material adverse effect on LDIG and its
consolidated subsidiaries taken as a whole or on the ability of LDIG to
perform its obligations hereunder or under the Series C Preferred Stock and
Series D Preferred Stock to be issued pursuant hereto; and
(d) When issued in accordance with this Agreement, all shares of
Series C Preferred Stock and Series D Preferred Stock issued to Liberty
will be duly authorized,
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validly issued, fully paid and non-assessable and will be owned by Liberty
free and clear of any liens, security interests or other encumbrances
except any thereof as may be granted or incurred by Liberty.
6. Liberty Representations. In order to induce LDIG to enter into this
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Agreement and to effect the plan of reorganization and all related transactions
contemplated hereby, Liberty hereby represents and warrants as follows, all of
which representations and warranties shall survive the execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby:
(a) Liberty (i) is a duly organized and validly existing corporation
in good standing under the laws of Delaware; (ii) has the corporate power
and authority to execute, deliver and perform the terms and provisions of
this Agreement and to consummate the transactions contemplated hereby;
(iii) has taken all necessary corporate action to authorize the execution,
delivery and performance by it of this Agreement; and (iv) has duly
executed and delivered this Agreement;
(b) This Agreement constitutes the legal, valid and binding
obligation of Liberty enforceable against Liberty in accordance with its
terms, except to the extent that the enforceability hereof may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium or similar
laws generally affecting creditors' rights and by equitable principles
(regardless of whether enforcement is sought in equity or at law);
(c) Neither the execution, delivery or performance by Liberty of this
Agreement, nor compliance by Liberty with the terms and provisions hereof,
nor the consummation of the transactions contemplated hereby (i) will
violate any provision of Liberty's certificate of incorporation or bylaws;
(ii) will require any consent or approval of any person; (iii) will
contravene any provision of any laws applicable to Liberty; or (iv) will
conflict with or result in any breach of or constitute a tortious
interference with any of the terms, covenants, conditions or provisions of,
or constitute a default under, or result in the creation or imposition of
(or the obligation to create or impose) any lien upon any of the property
or assets of Liberty pursuant to the terms of any contractual obligation to
which Liberty is a party or by which Liberty or any of its property or
assets is bound or to which it may be subject, except in the case of
clauses (ii), (iii) and (iv) above for any such consent or approval the
failure to obtain which would not, and any such contravention, conflict or
result as would not, have a material adverse effect on the ability of
Liberty to perform its obligations hereunder; and
(d) When transferred to LDIG in accordance with this Agreement, all
Liberty Shares will be owned by LDIG free and clear of any liens, security
interests or other encumbrances except any thereof as may be granted or
incurred by LDIG.
7. Miscellaneous.
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(a) Waiver. The failure of either party in any one or more instances
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to insist upon strict performance of any of the terms and provisions of
this Agreement, or to exercise any option herein conferred shall not be
construed as a waiver or relinquishment,
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to any extent, of the right to assert or rely upon any such terms,
provisions or options on any future occasion.
(b) Notices. Any notice given under this Agreement shall be sent to
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the parties as follows:
If to Liberty:
Liberty Media Corporation
9197 South Peoria Street
Englewood, CO 80112
Attention: President
(with a copy similarly addressed to the General Counsel)
Facsimile: 720-875-5382
If to LDIG:
Liberty Digital, Inc.
1100 Glendon Avenue, Suite 2000
Los Angeles, California 90024
Attention: President
(with a copy similarly addressed to the Chief Financial Officer)
Facsimile: 310-209-3606
Such notice shall either be personally delivered, or sent via facsimile or
certified mail. Notice shall be deemed given when personally delivered or sent
by facsimile with receipt acknowledged, or five days after it is deposited in
the U.S. mail system, if sent certified mail, postage prepaid, return receipt
requested. Either party may change its address for notice purposes hereunder by
giving written notice thereof to the other party in the manner specified herein;
provided, however, that such notice shall not be deemed given until actually
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received.
(c) No Assignment. This Agreement may not be assigned by either party
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without the prior written consent of the other.
(d) Governing Law. This Agreement shall be governed by the laws of
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the State of Delaware without reference to conflict of laws principles
thereof.
(e) Construction. The parties acknowledge and agree that they have
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negotiated this Agreement by and between them and that each has had an
adequate opportunity to review the terms hereof and that they have mutually
agreed upon the language and contents of this Agreement. It is further
agreed that this Agreement shall not be construed against either party by
reason of the fact that such party prepared the written form of this
Agreement.
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(f) Attorneys' Fees. Each party shall bear all of its own costs and
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expenses in connection with this Agreement, provided, however, that in the
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event of any dispute hereunder, the prevailing party shall be entitled to
an award of its attorneys' fees and costs relating thereto.
(g) Severability. If any of the provisions of this Agreement shall be
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invalid or unenforceable, such invalidity or unenforceability shall not
invalidate or render unenforceable the entire Agreement, but rather the
entire Agreement shall be construed as if not containing the particular
invalid or unenforceable provision or provisions, and the rights and
obligations of the parties shall be construed and enforced accordingly, to
effectuate the essential intent and purposes of this Agreement.
(h) Survival. Provisions of this Agreement, that by their sense and
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context are intended to survive performance by either or both parties
(including, without limitation, paragraph 7(f)) shall survive the
completion, expiration, termination, or cancellation of this Agreement.
(i) Entirety. Except as otherwise provided for herein, this Agreement
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constitutes the entire agreement between the parties hereto with reference
to the subject matter hereof, and supersedes any prior agreement, oral or
written, with respect thereto.
(j) Counterparts. This Agreement may be executed in multiple
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counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same Agreement.
(k) Headings. The headings contained in this Agreement are inserted
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solely for purposes of reference and convenience and shall not affect the
meaning or constructi on hereof.
IN WITNESS WHEREOF, the parties have set their hands as of the date first
written above.
LIBERTY DIGITAL, INC. LIBERTY MEDIA CORPORATION
/s/ Mark D. Rozells /s/ Charles Y. Tanabe
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By: Mark D. Rozells By: Charles Y. Tanabe
Its: EVP & Chief Financial Officer Its: Sr. Vice President
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