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EXHIBIT 4.4
[FORM OF SHAREHOLDERS AGREEMENT]
DATED _________________ 2000
(1) SUMITOMO CORPORATION
(2) LIBERTY MEDIA CORPORATION
(3) LIBERTY JUPITER, INC.
(4) LIBERTY JAPAN, INC.
(5) MICROSOFT CORPORATION
(6) MICROSOFT HOLDINGS V, INC.
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SHAREHOLDERS AGREEMENT
relating to
Jupiter Telecommunications Co., Ltd.
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LATHAM & WATKINS
99 Bishopsgate
11th Floor
London EC2M 3XF
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TABLE OF CONTENTS
1. DEFINITIONS...................................................... 1
2. [INTENTIONALLY LEFT BLANK]....................................... 5
3. THE BOARD, AUDITORS AND MANAGEMENT............................... 5
4. AGREEMENT TO PERFORM............................................. 7
5. TRANSFER OF SHARES............................................... 7
6. NEW SHARES....................................................... 11
7. REGISTRATION RIGHTS.............................................. 11
8. TERMINATION...................................................... 12
9. REPRESENTATIONS AND WARRANTIES................................... 12
10. NO ASSIGNMENT.................................................... 12
11. WAIVERS, REMEDIES CUMULATIVE, AMENDMENTS, ETC.................... 12
12. INVALIDITY....................................................... 12
13. COSTS............................................................ 13
14. NOTICES.......................................................... 13
15. ENGLISH LANGUAGE................................................. 14
16. GOVERNING LAW.................................................... 14
17. DISPUTES......................................................... 14
18. ENTIRE AGREEMENT................................................. 15
19. NO PARTNERSHIP/AGENCY............................................ 15
20. EXECUTION........................................................ 15
21. GUARANTEE........................................................ 15
22. NO THIRD PARTY BENEFICIARIES..................................... 16
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THIS AGREEMENT is made on the ____ day of _________ 2000
BETWEEN:
(1) SUMITOMO CORPORATION, a company incorporated in Japan whose principal
place of business is at 1-2-2 Hitotsubashi, Chiyoda-ku, Tokyo 100-8601,
Japan ("SC"); and
(2) LIBERTY MEDIA CORPORATION, a company incorporated in the State of
Delaware, United States of America, whose principal place of business
in at 9197 South Peoria Street, Englewood ("LMC") for the purposes of
giving the guarantee set forth in Clause 21.1; and
(3) LIBERTY JUPITER, INC., a company incorporated in the State of Delaware,
United States of America, whose principal place of business is at 9197
South Peoria Street, Englewood, Colorado 80112 ("LJ"); and
(4) LIBERTY JAPAN, INC., a company incorporated in the State of Delaware,
United States of America, whose principal place of business is at 9197
South Peoria Street, Englewood, Colorado 80112 ("LIBERTY JAPAN"); and
(5) MICROSOFT CORPORATION, a company incorporated in the State of
Washington whose principal place of business is at One Microsoft Way,
Redmond, Washington 98052-6399 ("MICROSOFT") for the purposes of giving
the guarantee set forth in Clause 21.2; and
(6) MICROSOFT HOLDINGS V, INC., a company incorporated in the State of
Nevada whose principal place of business is at One Microsoft Way,
Redmond, Washington 98052-6399 ("MS HOLDINGS").
WHEREAS:
(A) SC, Liberty Japan, LJ and MS Holdings propose that this Agreement will
record the basis of their relationship as shareholders in the Company
with effect from the consummation of the IPO;
(B) LMC has agreed to enter into this Agreement to guarantee the
obligations of Liberty Japan and LJ (as a primary obligor and not as a
surety only) under this Agreement;
(C) Microsoft has agreed to enter into this Agreement to guarantee the
obligations of MS Holdings (as a primary obligor and not as surety
only) under this Agreement.
NOW IT IS HEREBY AGREED as follows:
1. DEFINITIONS
1.1 In this Agreement and in the recitals hereto the following words and
expressions shall save as otherwise specifically provided have the
following meanings:
"APPLICABLE LAW": with respect to a Party or the Company, any domestic
or foreign, federal, state or local statute, law, ordinance, rule,
administrative interpretation, regulation, order, writ, injunction,
directive, judgement, decree or other requirement of any Governmental
Authority applicable to such Party or the Company or their respective
properties, business or assets;
the "ARTICLES": the articles of incorporation of the Company as in
effect from time to time;
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"ASSOCIATE": in relation to any person, another company, corporation,
partnership, joint venture, firm and/or any other person (other than a
director or officer of such person) in which the Parent of such person
directly or indirectly (i) owns Equity Securities of such other person
entitling it to cast fifty percent (50%) or more of the total votes
entitled to be cast generally for the election of directors (or persons
of a similar position) of such person by all the holders of such Equity
Securities or (ii) otherwise has the power to control or direct the
management of such person through a management agreement or other
contractual arrangement that grants management and operational control
irrespective of voting power or equity ownership; [provided that,
notwithstanding the foregoing, UnitedGlobalCom, Inc. shall be deemed an
Associate of LMC and Liberty Media for the purposes of Clause 5 so long
as LMC, directly or indirectly, holds the right to appoint at least one
third of the directors to the board of UnitedGlobalCom, Inc.]
the "BOARD": the board of Directors of the Company from time to time;
"BUSINESS PLAN": the business plan of the Company approved by the
Board;
"COMBINED PERCENTAGE ENTITLEMENT": when used in relation to any
Shareholder, means the combined Percentage Entitlements of such
Shareholder and its Associates; provided, however, that if any Person
is an Associate of any two or more Parents, then its Percentage
Entitlement shall be divided pro rata among such Parents and their
Associates for this purpose;
the "COMPANY": Jupiter Telecommunications Co., Ltd., a company
incorporated in Japan, whose principal place of business is at
Higashi-Ikebukuro Building, 4-41-24, Higashi Ikebukuro, Toshima-ku,
Tokyo 170-0013;
"DEED OF ADHERENCE": the deed substantially in the form of the draft
set out in Schedule 1;
"DIRECTORS": the directors (full time and part time) for the time being
of the Company;
"ENCUMBRANCE": any mortgage, charge, pledge, option, attachment,
restriction, assignment, security interest, title retention,
preferential right, equity or trust arrangement, lien right of set-off,
hypothecation, encumbrance or any security interest whatsoever
howsoever created or arising, including any analogous security interest
under local law;
"EQUITY SECURITIES": in relation to any person, any shares of, or other
equity interests in, such person that entitle the holder thereof to
vote generally for the election of directors (or persons of a similar
position) of such person;
"FOREIGN SHAREHOLDER": Liberty Media, MS Holdings and any other
non-Japanese Shareholder from time to time;
"FUKU-SHACHO": the Japanese title for the executive vice-president from
time to time of the Company;
"GOVERNMENTAL AUTHORITY": any foreign, domestic, federal, territorial,
state or local governmental authority, quasi-governmental authority,
court, government or self-regulatory organisation, commission,
tribunal, organisation or any regulatory, administrative or other
agency, or any political or other subdivision, department or branch of
any of the foregoing;
"IN WRITING" or "WRITTEN": includes any communication made by letter or
facsimile;
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"IPO": the consummation of the first public offering of the Company's
Equity Securities representing ten percent (10%) or more of the
outstanding Equity Securities of the Company after such offering and
the listing of such Equity Securities on a recognised securities
exchange;
"JOMU-TORISHIMARIYAKU": the Japanese title for an executive managing
director from time to time of the Company;
the "KAICHO/SAIKO-KEIEI-SEKININSHA": the Japanese title for the
chairman from time to time of the Company with the title of the
"Saiko-Keiei-Sekininsha";
"LIBERTY MEDIA": collectively, Liberty Japan and LJ, who shall be
considered as one Original Shareholder for the purposes of this
Agreement;
"MARKET SALE" means each of (a) a sale in accordance with Rule 144 of
the US Securities Act of 1933 [resulting in shares being widely
distributed], (b) a registered sale in accordance with the Registration
Rights Agreement, or (c) an offering on the Tokyo Stock Exchange
resulting in Shares being widely distributed;
"MARKET VALUE": as defined in Clause 5.4.11
"NOTICE DATE": as defined in Clause 5.4.6;
"ORIGINAL SHAREHOLDER": for as long as it holds Securities, each of SC,
Liberty Media and MS Holdings or any other Shareholder who executes a
Deed of Adherence;
"PARENT": with respect to (i) SC, SC or its successor, (ii) MS
Holdings, Microsoft or its successor, (iii) Liberty Media, LMC or its
successor (iv) or in the case of any other Original Shareholder, the
person in which no other person directly or indirectly (a) owns Equity
Securities of such person entitling it to cast fifty percent (50%) or
more of the total votes entitled to be case generally for the election
of directors (or persons of a similar position) of such person by all
the holders of such Equity Securities or (b) otherwise has the power to
control or direct the management of such person through a management
agreement or other contractual arrangement that grants management and
operational control irrespective of voting power or equity ownership;
"PARTY" or "PARTIES": the party or parties to this Agreement (including
any person who executes a Deed of Adherence);
"PERCENTAGE ENTITLEMENT" in relation to any Shareholder, the percentage
(rounded to two decimal places) equal to (i) the total number of votes
that such Shareholder is entitled to cast generally in the election of
directors of the Company in respect of Securities owned by such
Shareholder, divided by (ii) the total number of votes that all
Shareholders are entitled to cast generally in the election of
directors, multiplied by (iii) one hundred (100);
"PERSON": any individual, firm, company, partnership, joint venture,
limited liability company or other incorporated or unincorporated
entity;
"POTENTIAL PURCHASER": as defined in Clause 5.4.1;
"PRESCRIBED PRICE": in relation to a voluntary Transfer of Shares in
respect of which a Transfer Notice shall have been served pursuant to
Clause 5.4.1, the price per Share of the Sale Shares offered by the
Vendor;
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"RELATIVE PERCENTAGE ENTITLEMENT": when used with respect to any
Original Shareholder in relation to any other Shareholders, shall mean
(i) the Percentage Entitlement of such Original Shareholder, divided by
the sum of the Percentage Entitlements of such Original Shareholder and
such other Shareholders multiplied by, (ii) 100;
"REPRESENTATIVE DIRECTOR(S)": the Representative Director(s) of the
Company being the Kaicho/Saiko-Keiei-Sekininsha, Shacho and/or such
other director(s) appointed by the Board;
the "SAIKO-KEIEI-SEKININSHA": the Japanese title for the chief
executive officer from time to time of the Company;
the "SAIKO-ZAIMU-TANTO-YAKUIN": the Japanese title for the chief
financial officer from time to time of the Company;
"SALE AGREEMENT": the signed written agreement pursuant to which a
transferee agrees to purchase Shares from a Vendor;
"SALE SHARES": the Shares to be sold by a Vendor on the Sale Terms
pursuant to Clause 5.4, including any Unpurchased Sale Shares;
"SALE TERMS": as defined in Clause 5.4.1;
"SECURITIES": Equity Securities of the Company;
"SHACHO": the Japanese title for the president from time to time of the
Company;
"SHAREHOLDER": a person holding Securities from time to time;
"SHAREHOLDER PURCHASER": an Original Shareholder who gives notice under
Clause 5.4.2(a);
"SHARES": shares of the common stock of the Company;
"TRANSFER": any sale, assignment, transfer or grant of lease of any
legal or beneficial ownership or of any economic rights;
"TRANSFEREE": the intended transferee of a transferor pursuant to
Clause 5.4;
"TRANSFEROR": an Original Shareholder that proposes to Transfer all of
its Shares pursuant to Clause 5.4;
"TRANSFER NOTICE": as defined in Clause 5.4.1;
"UNPURCHASED SALE SHARES": as defined in Clause 5.4.3;
"VENDOR": an Original Shareholder who wishes to Transfer for cash all
of its Shares, pursuant to Clause 5.4;
"YEN" and "(Y)": the lawful currency of Japan.
1.2 References in this Agreement to Clauses, Sub-Clauses, paragraphs and
Schedules are references to those contained in this Agreement.
1.3 References to any Clause in this Agreement include references to its
Sub-Clauses.
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1.4 The Schedule and Annex to this Agreement are an integral part of this
Agreement and references to this Agreement include references to such
Schedule and Annex.
1.5 Clause headings are for ease of reference only and shall not be taken
into account in construing this Agreement.
2. [INTENTIONALLY LEFT BLANK]
3. THE BOARD, AUDITORS AND MANAGEMENT
3.1 Subject to Clause 3.10, the Original Shareholders agree and undertake
that they shall procure (to the extent that the same is within their
respective powers and voting rights as Shareholders) that the Board
shall comprise up to fourteen (14) Directors with SC having the sole
right to nominate three (3) non-executive Directors, Liberty Media
having the sole right to nominate three (3) non-executive Directors and
MS Holdings having the sole right to nominate two (2) non-executive
Directors.
3.2 The Original Shareholders agree and undertake that they shall procure
(to the extent that the same is within their respective powers and
voting rights as Shareholders) that each Original Shareholder will, for
so long as it has the right to nominate a Director, have the right to
nominate one member of any committee set up by the Board, including
committees relating to technology.
3.3 In addition, if necessary, the Original Shareholders agree and
undertake that they shall procure (to the extent that the same is
within their respective powers and voting rights as Shareholders) that
each Original Shareholder shall have the right, subject to compliance
with the Articles, to remove any Director appointed to the Board as a
result of its nomination rights described in Clause 3.1.
3.4 Unless required by any Applicable Law or regulation, any Director
nominated by a Foreign Shareholder need not be a Japanese national or
resident in Japan.
3.5 The nomination rights described in Clause 3.1 and the removal rights
described in Clause 3.3 shall be exercisable at a duly held meeting of
Shareholders or by written notice signed by the nominating Original
Shareholder (accompanied by a letter of resignation from the relevant
Director in the case of a removal) and each of the Original
Shareholders agrees to vote in favour of resolutions appointing or, if
necessary removing Directors nominated so that such persons may be
properly appointed or removed in accordance with the foregoing.
3.6 The Original Shareholders agree and undertake that they shall procure
(to the extent that the same is within their respective powers and
voting rights as Shareholders) that, unless otherwise prohibited by
Applicable Law, the Board (and any committee thereof) shall act by
majority vote of those Directors who are in attendance in person or by
video conference. No Director shall have a second or casting vote. The
Original Shareholders agree and undertake that they shall procure (to
the extent that the same is within their respective powers and voting
rights as Shareholders) that the transaction of the business of any
committee of the Board shall be permitted only if (i) the Directors
nominated by any Original Shareholder do not constitute a majority of
the Directors in attendance and (ii) at least one (1) Director
nominated by each of SC, Liberty Media and MS Holdings is in attendance
but only for as long as that particular Original Shareholder has the
right to appoint a Director. The Original Shareholders agree to vote in
favour of a resolution amending the Articles to provide that if the
appropriate number of Directors necessary for the transaction of
business by the Board or any committee thereof is not satisfied on a
first call of a meeting as prescribed in
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Clause 3.8(b), the meeting shall be reconvened on the day being ten
(10) business days thereafter (which may be shortened by the written
consent of all Directors on the Board or such committee). In the event
that, on a second call of such meeting, the appropriate number of
Directors necessary for the transaction of business is not satisfied,
the meeting shall be reconvened on the date being five (5) business
days thereafter (which may be shortened by the written consent of all
Directors on the Board or such committee). The Original Shareholders
shall procure that notice of any such reconvened meeting be given to
all Directors not in attendance at the prior inquorate meeting.
3.7 The roles of the Kaicho/Saiko-Keiei-Sekininsha and the Shacho shall be
determined by the Board.
3.8 Save as otherwise provided in this Agreement, the Original Shareholders
agree and undertake that they shall procure that the Company (so far as
it is legally able) shall and the Original Shareholders shall exercise
their respective powers and rights in relation to the Company so as to
ensure that the Company shall:
(a) convene and hold a formal meeting of the Board at least once
in every period of three (3) months and the dates for the
Board meetings for each following calendar year shall where
possible be agreed by the Board at the last Board meeting in
each preceding calendar year and notified to all Directors;
(b) procure that not less than fourteen (14) days prior written
notice of any meeting of the Board shall be given to the
Directors, that every such notice shall be accompanied by a
written agenda (in Japanese and English) specifying the
business of such meeting (provided, however, that such
fourteen (14) day period may be shortened with the consents of
all Directors);
(c) be permitted to convene meetings of the Board by video
conference; and
(d) provide each Director with a management report and quarterly
financial report (in Japanese and English) each financial
quarter;
3.9 Meetings of the Board and any material committee thereof will be
conducted in the English language. The Original Shareholders agree to
procure that minutes of each meeting be prepared in both Japanese and
English by the Company which shall distribute them to the Directors.
3.10 The entitlement of each of SC, Liberty Media and MS Holdings to
nominate and maintain a certain number of Directors will vary according
to its Combined Percentage Entitlement. A Combined Percentage
Entitlement in the Company greater than twenty-five (25) percent will
entitle that Original Shareholder to nominate three (3) Directors. An
Combined Percentage Entitlement in the Company greater than ten (10)
percent but not more than twenty-five (25) percent will entitle that
Original Shareholder to nominate two (2) Directors. A Combined
Percentage Entitlement in the Company of greater or equal to five (5)
percent but not more than ten (10) percent will entitle that Original
Shareholder to one (1) Director. A Combined Percentage Entitlement in
the Company of less than five (5) percent shall not entitle that
Original Shareholder to nominate a Director. If an Original Shareholder
loses its right to maintain one or more Directors under Clause 3.10
then currently serving on the Board, such Original Shareholder shall be
required to procure the resignation of a Director from the Board and,
such Original Shareholder shall procure that, in his or her
resignation, each such Director shall deliver to the Company a letter
acknowledging that he or she has no claim outstanding for fees or
compensation for wrongful dismissal or unfair dismissal or
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entitlement to any payment for redundancy or in respect of any other
moneys or benefits due to him or her from the Company arising out of
such resignation other than those arising or accrued prior to the
effective date or such resignation.
4. AGREEMENT TO PERFORM
Each Original Shareholder agrees at all times to exercise its
respective powers and votes as a shareholder of the Company to cause
the election or removal of the Directors nominated by the Parties as
provided herein and to ensure that (to the extent that the same is
within such powers and voting rights) the Company takes all necessary
or desirable actions to implement the arrangements envisaged by this
Agreement.
5. TRANSFER OF SHARES
5.1 The Original Shareholders agree and undertake that they shall procure
that a Transfer of Shares may only be made or registered in accordance
with this Agreement.
5.2 Nothing in this Agreement shall prevent an Original Shareholder from
Transferring at any time all or part of its Shares to an Associate of
such Original Shareholder. However, it shall be a precondition to any
such transfer that:
5.2.1 Each of the other Original Shareholders is given written notice of the
Transfer to the Associate ten (10) business days prior to such
Transfer; and
5.2.1 the proposed transferee shall execute a Deed of Adherence in accordance
with Clause 5.4.14; and
5.2.2 the transferring Original Shareholder (and Microsoft, in the case of MS
Holdings, and LMC, in the case of Liberty Media, as guarantors) remains
bound to this Agreement; and
5.2.3 the transferee does not cease to be an Associate.
5.3 Nothing in this Agreement shall prevent an Original Shareholder from
Transferring all or part, of their Shares provided that they comply
with Clause 5.4 below.
5.4 The following Clause 5.4 applies to Transfers of Shares other than
pursuant to Clause 5.2:
5.4.1 If any Original Shareholder proposes to Transfer all or part of its
Shares (such Original Shareholder being a "VENDOR") (other than
pursuant to Clause 5.2) (a) in a Market Sale; or (b) any other sale to
a third party it shall give notice in writing to the other Original
Shareholders of such intent (a "TRANSFER NOTICE") offering the Sale
Shares for sale to the other Original Shareholders (the "POTENTIAL
PURCHASERS") at the Prescribed Price in cash (such Prescribed Price in
the event of a Market Sale being the Market Value of the Sale Shares at
the latest date on which a Potential Purchaser gives notice under
Clause 5.4.2(a) or the last date the Vendor receives notice from a
Shareholder Purchaser under Clause 5.4.3) and stating all other
material terms and conditions of the proposed sale (collectively with
the Prescribed Price, the "SALE TERMS").
5.4.2 The Transfer Notice shall require each Potential Purchaser to state in
writing to the Vendor (with a copy to each of the other Potential
Purchasers) within [thirty (30)] business days after the date on which
it receives the Transfer Notice:
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(a) that it is willing to purchase its Relative Percentage
Entitlement in relation to the other Potential Purchasers of
the Sale Shares on the Sale Terms; or
(b) that it consents to the sale of the Sale Shares on the Sale
Terms (or at a price and on other terms and conditions at
least as favourable in all material respects to the Vendor as
the Sale Terms, taken as a whole and as provided in Clause
5.4.9).
In the event that no notice is received by the Vendor from a Potential
Purchaser within the said period of [thirty (30)] business days then
the Potential Purchaser shall be deemed to have served a notice
pursuant to Clause 5.4.2(b) at the end of such [thirty (30)] business
day period.
5.4.3 If one or more (but less than all) of the Potential Purchasers gives
notice (or is deemed to have given notice) under Clause 5.4.2(b) above,
the Vendor, within five (5) business days of receipt of the last of
such notices, shall offer the Sale Shares that the Potential
Purchaser(s) could have purchased by giving notice under Clause
5.4.2(a) (the "UNPURCHASED SALE SHARES") to the Potential Purchasers
who gave notice under Clause 5.4.2(a) (each, a "SHAREHOLDER PURCHASER")
who shall each respond in writing within ten (10) business days after
the date on which it receives such notice stating the number of
Unpurchased Sale Shares, if any, that it is willing to purchase on the
Sale Terms.
5.4.4 In the event that no notice is received from a Shareholder Purchaser
within the said period of ten (10) business days after the date on
which it receives notice under Clause 5.4.3 then such Shareholder
Purchaser shall be deemed to have declined the offer to purchase
Unpurchased Sale Shares.
5.4.5 The Vendor shall, by notice within five (5) business days after receipt
of the last notice from a Shareholder Purchaser pursuant to Clause
5.4.3, allocate the Unpurchased Sale Shares in the following manner:
(a) if the amount of Unpurchased Sale Shares applied for is equal
to the total amount of Unpurchased Sale Shares, the Vendor
shall allocate to the Shareholder Purchasers the Unpurchased
Sale Shares in the amounts they have specified on the Sale
Terms; or
(b) if the amount of Unpurchased Sale Shares applied for is more
than the total amount of Unpurchased Sale Shares, each
Shareholder Purchaser shall be entitled to purchase on the
Sale Terms its Relative Percentage Entitlement in relation to
the other Shareholder Purchasers or such lesser amount for
which it may have applied, save that where such lesser amount
is applied for by a Shareholder Purchaser, the balance of such
Shareholder Purchaser's Relative Percentage Entitlement shall
automatically be allocated to each other Shareholder Purchaser
pro rata in accordance with its Relative Percentage
Entitlement or in such lesser amount as is necessary to equal
the amount specified by it until all the Unpurchased Sale
Shares are taken up; or
(c) if the amount of Unpurchased Sale Shares applied for is less
than the total amount of Unpurchased Sale Shares, the Vendor
shall, within five (5) business days after the end of the ten
(10) business day period referred to in Clause 5.4.4, notify
in writing each Shareholder Purchaser of the amount of the
shortfall and shall offer to them, for a final time, the
shortfall of the Unpurchased Sale Shares to be allocated with
the other Unpurchased Sale Shares in accordance with Clause
5.4.5(a) or (b) as the case may be (such offer to be accepted
by written notice to the Company within five (5)
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business days after the date on which they received
notification of the shortfall), failing which the Vendor shall
be entitled to Transfer all of the Sale Shares pursuant to
Clause 5.4.8.
5.4.6 Within the later of (i) twenty (20) business days after the latest date
on which a Potential Purchaser gives notice under Clause 5.4.2(a) or,
if Clause 5.4.3 applies, the last date on which a Shareholder Purchaser
receives notice of the allocation of Unpurchased Sale Shares to it (the
"NOTICE DATE") or (ii) five (5) business days after receiving all
necessary regulatory clearances (if any), each Shareholder Purchaser
shall complete the purchase from the Vendor of the Sale Shares so
allocated to them on the Sale Terms. Notwithstanding anything to the
contrary set forth herein, with respect to an offer made on the terms
of a Market Sale pursuant to Clause 5.4.1, the Vendor shall be entitled
at any time up to one (1) business day after the latest date on which
notice from a Potential Purchaser under Clause 5.4.2(a) is received by
the Vendor or the last date the Vendor receives notice from a
Shareholder Purchaser under Clause 5.4.3 to withdraw its offer to
Transfer the Sale Shares. On receipt of the purchase money, the Vendor
shall be bound to transfer the allocated Sale Shares on the Sale Terms.
The Shareholder Purchasers and the Vendor shall provide all information
and take all steps necessary to make all necessary regulatory filings
within twenty (20) business days after the Notice Date and shall use
their commercially reasonable efforts to obtain all necessary
regulatory clearances. If a Transfer to a Shareholder Purchaser
pursuant to this Clause 5.4 would trigger a requirement on the
Shareholder Purchaser to make a bid for Shares of other Shareholders,
the Vendor will co-operate within commercially reasonable limits with
such Shareholder Purchaser to allow such Shareholder Purchaser to
structure the transfer of the Sale Shares in a manner that would avoid
triggering such requirement, subject to the terms of this Agreement. No
Shareholder Purchaser shall acquire Sale Shares if such Transfer would
result in any other Original Shareholder being required to make an
offer for Equity Securities of other Shareholders.
5.4.7 [Nothing in this Agreement shall prevent an Original Shareholder from
appointing a nominee, reasonably acceptable to the other Original
Shareholders to acquire the Sale Shares and any Unpurchased Sale. Such
Shares shall remain subject to the limitations on Transfer set out in
this Clause 5.]
5.4.8 In the event that (i) the Potential Purchasers do not elect to
purchase, in the aggregate, one hundred percent (100%) of the Sale
Shares or (ii) the Shareholder Purchasers do not complete the purchase
of one hundred percent (100%) of the Sale Shares (other than as the
result of a breach by the Vendor) on or before thirty (30) business
days after the Notice Date (provided that this date may be extended for
up to one hundred and eighty (180) days in the event that any required
governmental clearances have not been obtained, or applicable waiting
periods have not expired or terminated, provided that applications have
been filed on or before the date specified in Clause 5.4.7, the Vendor
shall be at liberty to sell the Sale Shares at any time within:
(a) (i) ninety (90) days in the event of a Transfer or group of
Transfers under Rule 144 of the US Securities Act of 1933 as
amended or any successor made thereof, or (ii) two hundred and
seventy (270) days in the event of a Transfer pursuant to a
registered offering under the Registration Rights Agreement,
or (iii) thirty (30) days in the event of an offering on the
Tokyo Stock Exchange, or
(b) one hundred and eighty (180) days in the event of any other
sale to a third party other than a Market Sale after the
expiry of:
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(x) the period specified in Clause 5.4.2 if no Original
Shareholder gives notice under Clause 5.4.2(a); or
(y) the period specified in Clause 5.4.5(c); or
(z) the period described in Clause 5.4.8(ii) above,
as the case may be.
5.4.9 A sale by the Vendor of the Sale Shares pursuant to Clause 5.4.8, shall
be:
(a) in the event of a sale to a third party other than a Market
Sale at a price and on other terms and conditions at least as
favourable to the Vendor as the Sale Terms, taken as a whole,
in all material respects; or
(b) in the event of a Market Sale on whatever price and terms as
are determined under the Market Sale.
5.4.10 The consideration to be received for the sale of Sale Shares to a third
party may be for consideration other than cash provided that:
(a) it gives written notice to the other Original Shareholders
stating the intended Market Value of the consideration to be
paid, the nature of the consideration and the date of the
agreement with respect to the Transfer of the Sale Shares; and
(b) the Market Value of the consideration (as of the date that the
agreement with respect to the Sale Shares was entered into) is
equal to or greater than the Prescribed Price (taking into
account the tax treatment of the non-cash consideration as
against cash). If the sale to the third party is in a tax-free
transaction, the Vendor may request that the savings to the
Vendor with respect to state, federal and foreign income or
similar taxes be taken into account in determining the Market
Value of the consideration to the extent that such savings are
reasonably demonstrated to the Potential Purchasers.
5.4.11 For the purposes of this Agreement, "MARKET VALUE" shall mean (i) in
the case of securities of a class or series which is traded on an
established market, the average of the closing sales price per share
for the period of ten trading days ending on the trading day that is
two trading days prior to the date of determination, as reported by the
principal securities exchange or comparable organisation on which such
class or series of stock is traded and (ii) in the case of other types
of consideration, by agreement of the Parties, or if they cannot agree
within ten (10) business days after the date on which they receive
written notice under Clause 5.4.10(a), by an investment banking firm of
international repute reasonably acceptable to the Parties or, if no
such investment banking firm can be engaged within fifteen (15)
business days after the date on which they receive written notice under
Clause 5.4.10(a), in accordance with Clause 5.4.12.
5.4.12 If the Parties are unable to engage an investment banking firm that is
reasonably acceptable to the Parties within fifteen (15) business days
after the date on which they receive written notice under Clause
5.4.10(a), the Market Value shall be ascertained by the following
means:
(a) The Vendor shall nominate an investment bank within the next
five (5) business day period;
(b) The other Original Shareholders shall nominate another
investment bank within such five (5) business day period; and
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(c) The two nominated banks shall then together nominate an
investment bank (the "APPRAISING BANK") to determine the
market value of the non-cash consideration.
5.4.13 Any transaction whereby an Original Shareholder (or any of its parent
companies) ceases to be an Associate of its respective Parent, shall
constitute an "INDIRECT TRANSFER" and shall be deemed a Transfer of
Shares for the purposes of this Clause 5.
5.4.14 If an Original Shareholder (the "TRANSFEROR") proposes, subject to the
restrictions set out in this Agreement, to Transfer all or part of its
Shares to any person (the "TRANSFEREE") and on completion of such
Transfer, the transferee will have a Combined Percentage Entitlement
equal to fifteen percent (15%) or more, then it shall be a condition
precedent to the effectiveness of such Transfer that the transferee,
and, if required by any of the other Original Shareholders who
reasonably consider it necessary, the transferee's ultimate parent as
guarantor of the transferee's obligations thereunder, shall execute a
deed of adherence in the form set out in Schedule 1.
5.5 All Shares Transferred pursuant to Clause 5.4 shall be transferred by
the beneficial owner and free from all Encumbrances (except as may
exist solely by virtue of this Agreement) together with all rights,
benefits and advantages attached thereto as at the date of the Transfer
of the Shares or deemed Transfer Notice except the right to any
dividend the record date of which is prior to the date of the relevant
Transfer of the Shares.
5.6 If, immediately upon completion of the Transfer of any Shares by any
Vendor pursuant to the provisions of Clause 5.4 the Vendor shall have
lost its entitlement to appoint one or more Directors as provided in
Clause 3.10, the Vendor shall procure the resignation of the
appropriate number of Directors appointed to the Board by the Vendor
pursuant to Clause 3.10 without any claim for damages or compensation
for loss of office of any kind whatsoever.
6. NEW SHARES
6.1 Each of the Original Shareholders agrees and undertakes that it will
only subscribe for new issuances of Securities (including, for the
purposes of this Clause 6, any other securities convertible
exchangeable or exercisable into Securities) if each of the other
Original Shareholders is offered its Relative Percentage Entitlement of
such Securities on the same terms.
6.2 The covenant of each Original Shareholder set out in Clause 6.1 shall
not apply to any issuances by the Company as consideration for the
acquisition by the Company or any of its subsidiaries of, or merger of
the Company or any of its subsidiaries with, another business or
entity.
7. REGISTRATION RIGHTS
Concurrently with the execution and delivery of this Agreement, the
Parties and the Company are executing and delivering the registration
rights agreement set out in Exhibit A to this Agreement (the
"REGISTRATION RIGHTS AGREEMENT").
8. TERMINATION
8.1 This Agreement shall continue in full force and effect from the date of
this Agreement until the date upon which the Original Shareholders
cease to have a collective Combined Percentage Entitlement of at least
one third, whereupon this Agreement (with the exception
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of Clauses 8, 10, 11, 13, 14, 15, 16, 17, 18, 19, 20 and 22) shall
automatically terminate with none of the Original Shareholders having a
claim against the others save for any breach by an Original Shareholder
prior to the date of termination.
9. REPRESENTATIONS AND WARRANTIES
9.1 Each of the Parties hereto represents and warrants to each other that,
as at the date hereof:
(a) it is a company duly incorporated and validly existing in all
respects under the laws of the jurisdiction of its
incorporation with full power and authority to own its assets
and to carry on its business as it is now being conducted and
no action has been taken or threatened (whether by it or, to
its knowledge, any third party) for or with a view to its or
their liquidation, receivership or analogous process;
(b) no litigation or administrative or arbitration proceeding
before or of any court, judicial, administrative or
Governmental Authority, arbitrator(s) or other body is taking
place, pending or threatened against any of its or their
respective assets which would be reasonably likely to have a
material adverse effect on its and its Associates business,
assets, condition or operations taken as a whole, or would be
reasonably likely to adversely affect its ability duly and
punctually to perform and observe all its obligations
hereunder.
10. NO ASSIGNMENT
No Party may assign its rights or obligations under this Agreement.
11. WAIVERS, REMEDIES CUMULATIVE, AMENDMENTS, ETC.
11.1 No failure or delay by any of the Parties hereto in exercising any
right, power or privilege under this Agreement shall operate as a
waiver thereof nor shall any single or partial exercise by any of the
Parties hereto of any right, power or privilege preclude any further
exercise thereof or the exercise of any other right, power or
privilege.
11.2 The rights and remedies herein provided are cumulative and not
exclusive of any rights and remedies provided by law.
11.3 No provision of this Agreement may be amended, modified, waived,
discharged or terminated, otherwise than by the express written
agreement of the Parties nor may any breach of any provision of this
Agreement be waived or discharged except with the express written
consent of the Parties not in breach.
12. INVALIDITY
Should any provision of this Agreement be or become ineffective for
reasons beyond the control of the Parties, the Parties shall use
reasonable efforts to agree upon a new provision which shall as nearly
as possible have the same commercial effect as the ineffective
provision.
13. COSTS
Each of the Parties hereto shall pay its own costs, charges and
expenses connected with the preparation and implementation of this
Agreement and the transactions contemplated by it.
14. NOTICES
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Any notice or other communication given or made under this Agreement
shall be in writing in English and, without prejudice to the validity
of any other method of service, may be delivered via facsimile or
personally or by courier or by prepaid recorded delivery letter,
addressed as follows:
(a) If to SC:
Sumitomo Corporation
1-2-2 Hitotsubashi
Chiyoda-ku, Tokyo 100-8601
Japan
Attention: Tsuguhito Aoki,
General Manager,
CATV & Satellite Business Dept.
Fax: +81 3 3217 7049
with a copy to:
Attention: Naoki Saito,
Deputy General Manager,
Legal Dept.
Fax: +81 3 3217 5277
(b) If to LMC, LJ or Liberty Japan:
Liberty Media International, Inc.
9197 South Peoria Street,
Englewood, Colorado 80112
USA
Attention: Chief Financial Officer
Fax: +1 720 875 4983
with copies to:
Attention: Elisa Erickson
Fax: +1 720 875 5858
and
Latham & Watkins,
99 Bishopsgate,
11th Floor
London EC2M 3XF
United Kingdom
Attention: David Miles
Fax: +44 20 7374 4460
(c) If to Microsoft or MS Holdings:
Microsoft Corporation
One Microsoft Way
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Redmond, Washington 98052-6399
USA
Attention: Chief Financial Officer
Fax: +1 (425) 936 2625
with a copy to:
Sullivan & Cromwell
125 Broad Street
New York, New York 10004
Attention: Duncan C. McCurrach
Fax: +1 212 558 3588
or to such other address as the relevant addressee may hereafter by
notice hereunder substitute.
14.2 Any such notice or other communication shall be deemed to have been
duly served, given or made (i) in the case of posting, five (5)
business days after the envelope containing such notice was posted; or
(ii) in the case of delivery by courier, by written confirmation; or
(iii) in the case of facsimile, by receipt of transmission
confirmation.
15. ENGLISH LANGUAGE
Where this or any other English language agreement between the Parties
or referred to herein is translated into Japanese for the convenience
of the parties or some of them, the English language version
hereof/thereof shall for all purposes be deemed to be the definitive
and binding version thereof. Conversely where the Articles are
translated into English for such convenience, the Japanese language
version shall for all purposes be deemed to be the definitive and
binding version thereof.
16. GOVERNING LAW
This Agreement shall be governed by and construed in accordance with
the laws of Japan.
17. DISPUTES
17.1 In the event of a disagreement among the Parties, including a
disagreement regarding this Agreement, or any breach thereof, the
Parties engaged in such disagreement shall use their commercially
reasonable efforts to resolve such disagreement amicably and where
applicable the Party in breach shall promptly take all reasonable steps
to remedy such breach. If, at the end of thirty (30) days from
notification to the other Parties of such disagreement or breach, no
resolution has been reached the most senior executive officer (jomu) of
each Party involved in the disagreement or alleging or contesting the
breach will meet to resolve the matter. If they, too, are unable to
reach a mutually agreeable resolution within thirty (30) days of the
matter being referred to them any Party involved may elect that the
matter will be arbitrated in accordance with Clause 17.2.
17.2 Any and all disputes with respect to which such authorised persons
failed to reach a mutually agreeable resolution shall be finally and
exclusively settled by arbitration conducted in London under UNCITRAL
Arbitration Rules by three (3) arbitrators in the English language
provided that nothing under this Clause 17.2 shall prevent a Party from
seeking injunctive relief. The award shall be final and binding upon
the Parties.
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18. ENTIRE AGREEMENT
This Agreement and the Registration Rights Agreement replace, supersede
and cancel as of the date of the IPO all other previous and
contemporaneous arrangements, understandings, representations or
agreements (including the two existing shareholders agreement entered
into between the Original Shareholders, each dated 31 August, 2000)
between the Original Shareholders either oral or written with respect
to the subject matter of this Agreement and the Registration Rights
Agreement and expresses and constitutes the entire agreement between
the Original Shareholders (as a whole) with reference to the terms and
conditions of the constitution and operation of the management of the
business and affairs of the Company.
19. NO PARTNERSHIP/AGENCY
Nothing herein contained shall be construed or deemed to constitute a
partnership or joint venture between the Parties and no Original
Shareholder shall hold itself out as the agent of the other.
20. EXECUTION
This Agreement may be executed in counterparts (which may be exchanged
by facsimile transmissions) each of which shall be an original and
which together shall constitute one (1) document. Without prejudice to
the foregoing, if this Agreement shall initially be exchanged by
facsimile transmission as aforesaid the Original Shareholders shall as
soon as reasonably possible thereafter arrange for the signature and
exchange of original signed copies of this Agreement.
21. GUARANTEE
21.1 LMC agrees that it will guarantee to the Original Shareholders (as a
primary obligor and not as a surety only) the performance by Liberty
Japan and LJ of all of their respective obligations from time to time
in force under the terms of this Agreement for so long as either
Liberty Japan or LJ or their Associates holds Equity Securities of the
Company.
21.2 Microsoft agrees that it will guarantee to the Original Shareholders
(as a primary obligor and not as a surety only) the performance by MS
Holdings of all of its obligations from time to time in force under the
terms of this Agreement for so long as MS Holdings or its Associates
holds Equity Securities of the Company.
22. NO THIRD PARTY BENEFICIARIES
Nothing in this Agreement shall be deemed to make the Company, any
Shareholder or other person who is not a Party hereto, a third party
beneficiary under this Agreement.
IN WITNESS WHEREOF each of the undersigned has caused this Agreement to be
signed by its duly authorised officers as of the date first above written.
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SCHEDULE I
DEED OF ADHERENCE
THIS DEED OF ADHERENCE is made the day of 200[ ]
BETWEEN:
(1) SUMITOMO CORPORATION, a company incorporated in Japan whose principal
place of business is at 1-2-2 Hitotsubashi, Chiyoda-ku, Tokyo 100-8601,
Japan ("SC"); and
(2) LIBERTY MEDIA CORPORATION, a company incorporated in the State of
Delaware, United States of America, whose principal place of business
in at 9197 South Peoria Street, Englewood, Colorado 80112 ("LMC"); and
(3) LIBERTY JUPITER, INC., a company incorporated in the State of Delaware,
United States of America, whose principal place of business is at 9197
South Peoria Street, Englewood, Colorado 80112 ("LJ"); and
(4) LIBERTY JAPAN, INC., a company incorporated in the State of Delaware,
United States of America, whose principal place of business is at 9197
South Peoria Street, Englewood, Colorado 80112] ("LIBERTY JAPAN"); and
(5) MICROSOFT CORPORATION, a company incorporated in the State of
Washington whose principal place of business is at One Microsoft Way,
Redmond, Washington 98052-6399 ("MICROSOFT"); and
(6) MICROSOFT HOLDINGS V, INC., a company incorporated in the State of
Nevada whose principal place of business is at One Microsoft Way,
Redmond, Washington 98052-6399 ("MS HOLDINGS").
(7) [NEW SHAREHOLDER] (the "PROPOSED TRANSFEREE").
(8) [GUARANTOR OF NEW SHAREHOLDER]
WHEREAS:
On [ ] day of [ ] 2001 the Original Shareholders entered into a Shareholders
Agreement (the "SHAREHOLDERS AGREEMENT") to which a pro forma version of this
Deed forms Schedule 1.
The Proposed Transferee wishes to have [Transferred/issued to him/her/it] [ ]
[ordinary] shares (the "SHARES") in the issued capital of the Company [from ]
and in accordance with the Shareholders Agreement has agreed to enter into this
Deed.
NOW THIS DEED WITNESSES as follows:
Interpretation
In this Deed, except as the context may otherwise require, all words and
expressions defined in the Shareholders Agreement shall have the same meanings
when used herein.
Covenants
The Proposed Transferee hereby covenants with the Original Shareholders.
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()to adhere to and be bound by all the duties, burdens and obligations of terms
imposed pursuant to the provisions of the Shareholders Agreement and all
documents expressed in writing to be supplemental or ancillary thereto as if the
Proposed Transferee had been an original party to the Shareholders Agreement;
and
[()[FOR ASSOCIATES ONLY] that if at any time it ceases to be an Associate of the
Original Shareholder [or of LMC] [or of Microsoft] from which it is to receive
the Shares, it shall immediately Transfer the Shares back to the Original
Shareholder from which it received them.]
() The Proposed Transferee hereto represents and warrants to each of the parties
to the Shareholders Agreement that, as at the date hereof:
() it is a company duly organised and validly existing in all respects
under the laws of the jurisdiction of its organisation with full power
and authority to own its assets and to carry on its business as it is
now being conducted and no action has been taken or threatened (whether
by it or, to its knowledge, any third party) for or with a view to its
or their liquidation, receivership or analogous process;
() no litigation or administrative or arbitration proceeding before or
of any court, judicial, administrative or governmental authority,
arbitrator(s) or other body is taking place, pending or threatened
against or against any of its or their respective assets which would be
reasonably likely to have a material adverse effect on its and its
Associates business, assets, condition or operations taken as a whole,
or would be reasonably likely to adversely affect its ability duly and
punctually to perform and observe all its obligations hereunder;
Enforceability
Each Original Shareholder shall be entitled to enforce the Shareholders
Agreement against the Proposed Transferee and the Proposed Transferee shall be
entitled to all rights and benefits of an Original Shareholder under the
Shareholders Agreement in each case as if the Proposed Transferee had been a
party to the Shareholders Agreement.
Governing Law
This Deed of Adherence shall be governed by and construed in all respects in
accordance with the laws of Japan.
IN WITNESS WHEREOF this Deed of Adherence has been executed as a deed on the
date first above written.
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SUMITOMO CORPORATION
By:
Its:
LIBERTY MEDIA CORPORATION
By:
Its:
LIBERTY JUPITER, INC.
By:
Its:
LIBERTY JAPAN, INC.
By:
Its:
MICROSOFT CORPORATION
By:
Its:
MICROSOFT HOLDINGS V, INC.
By:
Its:
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