<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
(Rule 13d-1)
Under the Securities Exchange Act of 1934
Emmis Communications Corporation
________________________________________________________________________________
(Name of Issuer)
Class A Common Stock, par value $.01 per share
________________________________________________________________________________
(Title of Class of Securities)
29152510
______________________________
(CUSIP Number)
Charles Y. Tanabe, Esq.
Senior Vice President and General Counsel
Liberty Media Corporation
9197 South Peoria Street
Englewood, Colorado 80112
(720) 875-5400
________________________________________________________________________________
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
November 18, 1999
__________________________________________________________
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition that is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(e),13d-1(f) or 13d-1(g), check the following box
[_].
Note. Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See Rule 13d-7(b) for other
parties to whom copies are to be sent.
(Continued on following pages)
(Page 1 of 14 Pages)
- -----------------------
* The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter the
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
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===============================================================================
- -----------------------
CUSIP NO. 29152510
- -----------------------
- ------------------------------------------------------------------------------
NAME OF REPORTING PERSONS
1 I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY)
Liberty Media Corporation
84-1288730
- ------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
2 (a) [_]
(b) [X]
- ------------------------------------------------------------------------------
SEC USE ONLY
3
- ------------------------------------------------------------------------------
SOURCE OF FUNDS
4
00
- ------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [_]
5
- ------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
Delaware
- ------------------------------------------------------------------------------
SOLE VOTING POWER
NUMBER OF 7 2,700,000 shares
SHARES -----------------------------------------------------------
BENEFICIALLY 8
SHARED VOTING POWER
OWNED BY See Item 6.
-----------------------------------------------------------
EACH
9
REPORTING SOLE DISPOSITIVE POWER
2,700,000 shares
PERSON -----------------------------------------------------------
10 SHARED DISPOSITIVE POWER
See Item 6.
- ------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
2,700,000 shares
- ------------------------------------------------------------------------------
CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
12
[_]
- ------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
Approximately 13.2%. See Item 5.
- ------------------------------------------------------------------------------
TYPE OF REPORTING PERSON
14
CO
- ------------------------------------------------------------------------------
Page 2 of 14 Pages
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Statement of
LIBERTY MEDIA CORPORATION
Pursuant to Section 13(d) of the Securities Exchange Act of 1934
in respect of
Emmis Communications Corporation
Item 1. Security and Issuer.
Liberty Media Corporation, a Delaware corporation ("Liberty" or the
"Reporting Person"), is filing this Statement on Schedule 13D (this "Statement")
with respect to the Class A Common Stock, par value $.01 per share (the "Class A
Common Stock"), of Emmis Communications Corporation, an Indiana corporation (the
"Issuer"). The Issuer's principal executive offices are located at One Emmis
Plaza, 40 Monument Circle, Indianapolis, Indiana 46204.
The Issuer also has Class B Common Stock, par value $.01 per share (the
"Class B Stock" and together with the Class A Common Stock, the "Common Stock"),
issued and outstanding. The holders of Class A Common Stock and Class B Common
Stock vote together as a single class with respect to all matters voted on by
the stockholders of the Issuer, with certain exceptions. The holders of the
Class B Common Stock are entitled to ten votes per share and the holders of the
Class A Common Stock are entitled to one vote per share. With respect to the
election of directors, holders of Class A Common Stock voting as a separate
class are entitled to elect two directors, neither of whom may be an officer or
employee of the Issuer or may have a relationship which would interfere with the
exercise of such director's independent judgment.
Item 2. Identity and Background.
The reporting person is Liberty, whose principal business address is 9197
South Peoria Street, Englewood, Colorado 80112. Liberty EMMS, Inc., a Delaware
corporation and wholly owned subsidiary of Liberty ("Liberty EMMS"), is the
registered holder of the shares of Class A Common Stock beneficially owned by
Liberty (the "Shares").
Pages 3 of 14 Pages
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Prior to March 9, 1999, Liberty was controlled by Tele-Communications,
Inc., a Delaware corporation ("TCI"). TCI's principal business address is 9197
South Peoria Street, Englewood, Colorado 80112. TCI is principally engaged
through its subsidiaries and affiliates in the acquisition, development and
operation of cable television systems throughout the United States.
As a result of the consummation on March 9, 1999 of the merger (the "AT&T
Merger") of a wholly owned subsidiary of AT&T Corp., a New York corporation
("AT&T"), with and into TCI, (i) TCI became a wholly owned subsidiary of AT&T;
(ii) the businesses and assets of the Liberty Media Group and TCI Ventures Group
of TCI were combined; and (iii) the holders of TCI's Liberty Media Group common
stock and TCI Ventures Group common stock received in exchange for their shares
a new class of common stock of AT&T intended to reflect the results of AT&T's
"Liberty Media Group". Following the AT&T Merger, AT&T's "Liberty Media Group"
consists of the assets and businesses of TCI's Liberty Media Group and its TCI
Ventures Group prior to the AT&T Merger, except for certain assets which were
transferred to TCI's "TCI Group" in connection with the AT&T Merger, and the
"AT&T Common Stock Group" consists of all of the other assets and businesses of
AT&T. AT&T's principal business address is 32 Avenue of the Americas, New York,
New York 10013. AT&T is principally engaged in the business of providing voice,
data and video communications services to large and small businesses, consumers
and government entities in the United States and internationally.
The Board of Directors and management of the Reporting Person manage the
business and affairs of the Reporting Person, including, but not limited to,
making determinations regarding the disposition and voting of the Shares.
Although the Reporting Person is a wholly owned subsidiary of AT&T, a majority
of the Reporting Person's Board of Directors consists of individuals designated
by TCI prior to the AT&T Merger. If these individuals or their designated
successors cease to constitute a majority of the Reporting Person's Board of
Directors, the Reporting Person will transfer all of its assets and businesses
to a new entity. Although this new entity would be owned substantially by AT&T,
it would continue to be managed (including with respect to the voting and
disposition of the Shares) by management of the Reporting Person prior to such
transfer of assets.
As a result, the Reporting Person, acting through its Board of Directors
and management, will have the power to determine how the Shares will be voted
and, subject to the limitations of the Delaware General Corporation law, will
have the power to dispose of the Shares, and thus is considered the beneficial
owner of the Shares for purposes of Section 13(d) of the Exchange Act.
The Liberty Media Group, principally through the Reporting Person, is
engaged in (i) the production, acquisition and distribution through all
available formats and media of branded entertainment, educational and
informational programming and software, including multimedia products, (ii)
electronic retailing, direct marketing, advertising sales related to programming
services, infomercials and transaction processing, (iii) international cable
television distribution, telephony and programming, (iv) satellite
communications and (v) investments in wireless domestic telephony and other
technology ventures.
Page 4 of 14 Pages
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Schedule 1 attached to this Statement contains the following information
concerning each director, executive officer or controlling person of the
Reporting Person: (i) name and residence or business address, (ii) principal
occupation or employment; and (iii) the name, principal business and address of
any corporation or other organization in which such employment is conducted.
Schedule 1 is incorporated herein by reference.
To the knowledge of the Reporting Person, each of the persons named on
Schedule 1 (the "Schedule 1 Persons") is a United States citizen, except for
David J.A. Flowers, who is a Canadian citizen. During the last five years,
neither the Reporting Person nor any of the Schedule 1 Persons (to the knowledge
of the Reporting Person) has been convicted in a criminal proceeding (excluding
traffic violations or similar misdemeanors). During the last five years,
neither the Reporting Person nor any of the Schedule 1 Persons (to the knowledge
of the Reporting Person) has been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and, as a result of such
proceeding, is or was subject to a judgment, decree or final order enjoining
future violations of, or prohibiting or mandating activities subject to, federal
or state securities laws or finding any violation with respect to such laws.
Schedule 2 attached to this Statement contains the following information
which has been provided to the Reporting Person by AT&T concerning each
director, executive officer or controlling person of AT&T: (i) name and
residence or business address, (ii) principal occupation or employment; and
(iii) the name, principal business and address of any corporation or other
organization in which such employment is conducted. Schedule 2 is incorporated
herein by reference.
Based upon information provided to the Reporting Person by AT&T, (i) to the
knowledge of AT&T, each of the persons named on Schedule 2 (the "Schedule 2
Persons") is a United States citizen, (ii) during the last five years, neither
AT&T nor any of the Schedule 2 Persons (to the knowledge of AT&T) has been
convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors), and (iii) during the last five years, neither AT&T nor any of the
Schedule 2 Persons (to the knowledge of AT&T) has been a party to a civil
proceeding of a judicial or administrative body of competent jurisdiction and,
as a result of such proceeding, is or was subject to a judgment, decree or final
order enjoining future violations of, or prohibiting or mandating activities
subject to, federal or state securities laws or finding any violation with
respect to such laws.
The foregoing summary of the terms of the AT&T Merger is qualified in its
entirety by reference to the text of the Agreement and Plan of Restructuring and
Merger, dated as of June 23, 1998, among AT&T, Italy Merger Corp. and TCI, a
copy of which has been incorporated by reference as Exhibit 7(a), and to the
text of the AT&T/TCI Proxy Statement/Prospectus, a copy of which has been
incorporated by reference as Exhibit 7(b).
Page 5 of 14 Pages
<PAGE>
Item 3. Source and Amount of Funds or Other Consideration.
The Reporting Person entered into a Stock Purchase Agreement, dated as of
October 25, 1999, with the Issuer (the "Stock Purchase Agreement"), providing
for the acquisition of the Shares by the Reporting Person (the "Acquisition")
for a cash purchase price of $148,500,000. The Acquisition was consummated on
November 18, 1999, with funds from existing cash reserves.
Reference to the Stock Purchase Agreement set forth above in this Item 3 is
qualified in its entirety by reference to the copy of the Stock Purchase
Agreement, which is included as Exhibit 7(c) to this Statement and is
incorporated herein by reference.
Item 4. Purpose of Transaction.
The Reporting Person currently holds its interest in the Issuer for
investment purposes. The Reporting Person intends to continuously review its
investment in the Issuer, and may in the future determine to (i) acquire
additional securities of the Issuer, through open market purchases, private
agreements or otherwise, (ii) dispose of all or a portion of the securities of
the Issuer owned by it or (iii) take any other available course of action, which
could involve one or more of the types of transactions or have one or more of
the results described in the next paragraph of this Item 4. Notwithstanding
anything contained herein, the Reporting Person specifically reserves the right
to change its intention with respect to any or all of such matters. In reaching
any decision as to its course of action (as well as to the specific elements
thereof), the Reporting Person currently expects that it would take into
consideration a variety of factors, including, but not limited to, the Issuer's
business and prospects, other developments concerning the Issuer and the cable
television, radio, broadcast and entertainment programming industries generally,
other business opportunities available to the Reporting Person, other
developments with respect to the business of the Reporting Person, changes in
law and government regulations, general economic conditions and money and stock
market conditions, including the market price of the securities of the Issuer.
Other than as set forth in this Statement, the Reporting Person has no
present plans or proposals which relate to or would result in:
(a) The acquisition by any person of additional securities of the Issuer,
or the disposition of securities of the Issuer;
(b) An extraordinary corporate transaction such as a merger,
reorganization or liquidation, involving the Issuer or any of its
subsidiaries;
(c) A sale or transfer of a material amount of assets of the Issuer or of
any of its subsidiaries;
Page 6 of 14 Pages
<PAGE>
(d) Any change in the present board of directors or management of the
Issuer, including any plans or proposals to change the number or term
of directors or to fill any existing vacancies on the board;
(e) Any material change in the present capitalization or dividend policy of
the Issuer;
(f) Any other material change in the Issuer's business or corporate
structure;
(g) Changes in the Issuer's charter, bylaws or instruments corresponding
thereto or other actions which may impede the acquisition of control of
the Issuer by any person;
(h) A class of securities of the Issuer being delisted from a national
securities exchange or ceasing to be authorized to be quoted in an
inter-dealer quotation system of a registered national securities
association;
(i) A class of equity securities of the Issuer becoming eligible for
termination of registration pursuant to Section 12(g)(4) of the
Exchange Act; or
(j) Any action similar to any of those enumerated in this paragraph.
Item 5. Interest in Securities of the Issuer.
(a) Liberty presently beneficially owns through its subsidiary, Liberty
EMMS, 2,700,000 shares of Class A Common Stock. The 2,700,000 shares of Class A
Common Stock beneficially owned by Liberty represent 13.2% of the 20,434,391
shares of Class A Common Stock outstanding on November 22, 1999. With respect
to matters presented for a vote of the holders of Class A Common Stock and Class
B Common Stock (other than for the election of directors), Liberty beneficially
owns voting equity securities representing 11.8% of the voting power therefor
(based on 20,434,391 shares of Class A Common Stock and 2,374,291 shares of
Class B Common Stock outstanding on November 22, 1999). With respect to the
election of directors, the holders of Class A Common Stock voting as a separate
class are entitled to elect two directors, neither of whom may be an officer or
employee of the Issuer or may have a relationship which would interfere with the
exercise of such director's independent judgment.
(b) Except as described in Item 6 below, Liberty has the sole power to vote
or to direct the voting of the Shares and the sole power to dispose of, or to
direct the disposition of, the Shares.
(c) Not applicable.
(d) There is no other person that has the right to receive or the power to
direct the receipt of dividends from, or the proceeds from the sale of, the
Shares.
(e) Not applicable.
Page 7 of 14 Pages
<PAGE>
Item 6. Contracts, Arrangements, Understandings or Relationships With
Respect to Securities of the Issuer.
On October 25, 1999, Liberty and the Issuer entered into the Stock
Purchase Agreement, pursuant to which they consummated the Acquisition on
November 18, 1999 (the "Closing Date"). The Stock Purchase Agreement provides
for certain post-closing covenants applicable to Liberty and the Issuer. If
Liberty's ownership of the Shares causes a violation of any applicable multiple
ownership or cross-ownership rules of the Federal Communications Commission,
Liberty shall (i) deliver a proxy to a designee that entitles the designee to
exercise the voting power of the Shares for the election of directors; or (ii)
if the delivery of such proxy is insufficient to remove the violation, exchange
the Shares for shares of non-voting common stock of the Issuer; or (iii) if
neither the delivery of such proxy nor the exchange of such stock is sufficient
to remove the violation, take such other action as is reasonably necessary and
appropriate to remove the violation. Subject to certain exceptions, Liberty
shall not sell or otherwise transfer the Shares for a period of 12 months
commencing on the Closing Date. The Issuer has granted Liberty the right to
purchase a number of shares of any new issue of common stock (or rights to
acquire common stock) of the Issuer, at the lowest per share purchase price at
which such securities are being offered to the purchasers thereof, sufficient to
permit Liberty to maintain its percentage ownership interest in the Issuer,
provided that at such time Liberty owns at least 1,400,000 Shares, as adjusted
for any stock dividend, stock split or reverse stock split. The Issuer shall
not, without Liberty's prior written consent, acquire an interest in, invest in
or form any joint venture with any radio broadcast company that derives more
than 70% of its broadcast cash flow or 50% of its revenues from urban format
radio stations, provided that at such time Liberty owns at least 1,400,000
Shares, as adjusted for any stock dividend, stock split or reverse stock split.
Liberty and the Issuer have also agreed to certain arrangements with respect to
the possibility of a future joint venture in the radio broadcast business.
On October 24, 1999, Liberty and Jeffrey H. Smulyan, Chairman and Chief
Executive Officer of the Issuer, entered into a letter agreement (the "Letter
Agreement"), pursuant to which Mr. Smulyan agreed to provide Liberty with
certain tag-along rights. These rights become exercisable with respect to each
transfer of Common Stock by Mr. Smulyan or certain of his affiliates after such
time as Mr. Smulyan's interest (which for such purposes is deemed to include the
interest of certain of his affiliates) in the Issuer would be less than 33% of
such aggregate interest immediately following the Issuer's October 1999 public
offering of its Class A Common Stock. In such event, Liberty will have the
right to transfer a pro rata portion of its Shares in the same transaction in
which Mr. Smulyan or such affiliate transfers its interest. These tag-along
rights are assignable by Liberty under certain circumstances.
On November 18, 1999, Liberty and the Issuer entered into a registration
rights agreement (the "Registration Rights Agreement"), pursuant to which the
Issuer granted to Liberty, among other things, demand and "piggy-back"
registration rights with respect to the Shares.
The foregoing descriptions of the Stock Purchase Agreement, the
Registration Rights Agreement and the Letter Agreement are qualified in their
entirety by the terms of such documents, which
Page 8 of 14 Pages
<PAGE>
are included as Exhibits 7(c), 7(d) and 7(e), respectively, to this Statement
and are incorporated herein by reference.
Item 7. Materials to be Filed as Exhibits.
Item 7 of the Schedule 13D is hereby amended in its entirety to read as
follows:
Exhibit No. Exhibit
- ----------- -------
7(a) Agreement and Plan of Restructuring and Merger, dated as of June
23, 1998, among AT&T Corp., Italy Merger Corp. and Tele-
Communications, Inc. (incorporated by reference to Appendix A to
the AT&T/TCI Proxy Statement/Prospectus that forms a part of the
Registration Statement on Form S-4 of AT&T (File No. 333-70279)
filed on January 8, 1999 (the "AT&T Registration Statement")).
7(b) AT&T/TCI Proxy Statement/Prospectus (incorporated by reference to
the AT&T Registration Statement).
7(c) Stock Purchase Agreement, between Liberty and the Issuer, dated
as of October 25, 1999.
7(d) Registration Rights Agreement, between Liberty and the Issuer,
dated as of November 18, 1999.
7(e) Letter Agreement, between Liberty and Jeffrey H. Smulyan, dated
October 24, 1999.
Page 9 of 14 Pages
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: November 24, 1999.
LIBERTY MEDIA CORPORATION
By: /s/ Vivian J. Carr
---------------------------
Name: Vivian J. Carr
Title: Vice President
Page 10 of 14 Pages
<PAGE>
SCHEDULE 1
of the Schedule 13D
is amended in its entirety
to read as follows:
DIRECTORS AND EXECUTIVE OFFICERS
OF
LIBERTY MEDIA CORPORATION
The name and present principal occupation of each director and executive
officer of Liberty Media Corporation ("Liberty") are set forth below. The
business address for each person listed below is c/o Liberty Media Corporation,
9197 South Peoria Street, Englewood, Colorado 80112. All executive officers and
directors listed on this Schedule 1 are United States citizens, except for David
J.A. Flowers, who is a Canadian citizen.
Name Principal Occupation
- ---- --------------------
John C. Malone Chairman of the Board and Director of Liberty; Director
of AT&T Corp.
Robert R. Bennett President, Chief Executive Officer and Director of
Liberty
Gary S. Howard Executive Vice President, Chief Operating Officer of
Liberty
Daniel E. Somers Director of Liberty; Senior Executive Vice President and
Chief Financial Officer of AT&T Corp.
John C. Petrillo Director of Liberty; Executive Vice President, Corporate
Strategy and Business Development of AT&T Corp.
Larry E. Romrell Director of Liberty; Consultant to Tele-Communications,
Inc.
Jerome H. Kern Director of Liberty
Paul A. Gould Director of Liberty; Managing Director of Allen & Co.
John D. Zeglis Director of Liberty; Director and President of AT&T Corp.
David B. Koff Senior Vice President and Assistant Secretary of Liberty
Charles Y. Tanabe Senior Vice President, General Counsel and Assistant
Secretary of Liberty
Peter Zolintakis Senior Vice President of Liberty
Vivian J. Carr Vice President and Secretary of Liberty
Kathryn S. Douglass Vice President and Controller of Liberty
David J.A. Flowers Vice President and Treasurer of Liberty
Page 11 of 14 Pages
<PAGE>
SCHEDULE 2
of the Schedule 13D
is amended in its entirety
to read as follows:
DIRECTORS AND EXECUTIVE OFFICERS
OF
AT&T CORP.
The name and present principal occupation of each director and executive
officer of AT&T Corp. are set forth below. The business address for each person
listed below is c/o AT&T Corp., 295 North Maple Avenue, Basking Ridge, New
Jersey 07920. All executive officers and directors listed on this Schedule 2
are United States citizens.
Name Title
- ----- -----
C. Michael Armstrong Chairman of the Board, Chief Executive Officer and
Director
Kenneth T. Derr Director; Chairman and Chief Executive Officer of
Chevron Corporation
M. Kathryn Eickhoff Director; President of Eickhoff Economics Incorporated
Walter Y. Elisha Director; Retired Chairman and Chief Executive Officer
of Springs Industries, Inc.
George M. C. Fisher Director; Chairman and Chief Executive Officer of
Eastman Kodak Company
Donald V. Fites Director; Retired Chairman of Caterpillar, Inc.
Amos B. Hostetter, Jr. Director; Chairman of Pilot House Associates
Ralph S. Larsen Director; Chairman and Chief Executive Officer of
Johnson & Johnson
John C. Malone Director; Chairman of Liberty Media Corporation
Donald F. McHenry Director; President of The IRC Group LLC
Michael I. Sovern Director; President Emeritus and Chancellor Kent
Professor of Law at Columbia University
Sanford I. Weill Director; Chairman and Co-CEO of Citigroup Inc.
Thomas H. Wyman Director
John D. Zeglis President and Director
Harold W. Burlingame Executive Vice President, Merger & Joint Venture
Integration
Page 12 of 14 Pages
<PAGE>
Name Title
- ---- -----
James W. Cicconi Executive Vice President-Law & Government Affairs and
General Counsel
Mirian M. Graddick Executive Vice President, Human Resources
Daniel R. Hesse Executive Vice President and President & CEO, AT&T
Wireless Services, Inc.
Frank Ianna Executive Vice President and President, AT&T Network
Services
Michael G. Keith Executive Vice President and President, Business
Services
H. Eugene Lockhart Executive Vice President and President, AT&T Consumer
Services
Richard J. Martin Executive Vice President, Public Relations and
Employee Communication
David C. Nagel President, AT&T Labs & Chief Technology Officer
John C. Petrillo Executive Vice President, Corporate Strategy and
Business Development
Richard R. Roscitt Executive Vice President and President & CEO, AT&T
Solutions
Daniel E. Somers Senior Executive Vice President and Chief Financial
Officer
Page 13 of 14 Pages
<PAGE>
EXHIBIT INDEX
Exhibit No. Exhibit
- ----------- -------
7(a) Agreement and Plan of Restructuring and Merger, dated as of June
23, 1998, among AT&T Corp., Italy Merger Corp. and Tele-
Communications, Inc. (incorporated by reference to Appendix A to
the AT&T/TCI Proxy Statement/Prospectus that forms a part of the
Registration Statement on Form S-4 of AT&T (File No. 333-70279)
filed on January 8, 1999 (the "AT&T Registration Statement")).
7(b) AT&T/TCI Proxy Statement/Prospectus (incorporated by reference to
the AT&T Registration Statement).
7(c) Stock Purchase Agreement, between Liberty and the Issuer, dated
as of October 25, 1999.
7(d) Registration Rights Agreement, between Liberty and the Issuer,
dated as of November 18, 1999.
7(e) Letter Agreement, between Liberty and Jeffrey H. Smulyan, dated
October 24, 1999.
Page 14 of 14 Pages
<PAGE>
EXHIBIT 7(c)
STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT, dated as of October 25, 1999, by and between
LIBERTY MEDIA CORPORATION, a Delaware corporation ("Liberty") and EMMIS
COMMUNICATIONS CORPORATION, an Indiana corporation ("Emmis").
RECITALS
WHEREAS, Liberty desires to acquire, and Emmis desires to issue and sell to
Liberty, 2,700,000 shares (the "Purchased Shares") of Emmis' Class A Common
Stock, par value $.01 per share ("Class A Common Stock"), for the consideration
and upon the terms and conditions set forth in this Agreement;
WHEREAS, the parties hereto desire to enter into the other agreements and
arrangements described herein.
NOW, THEREFORE, in consideration of the premises and the respective
representations, warranties, covenants and agreements set forth herein, the
parties hereto agree as follows:
ARTICLE I
PURCHASE AND SALE OF SHARES
SECTION 1.01 Purchase and Sale. On the terms and subject to the
-----------------
conditions set forth in this Agreement, on the Closing Date (as defined in
Section 1.03) Emmis shall sell, issue and deliver to Liberty two million seven
hundred thousand (2,700,000) shares of Class A Common Stock for a total purchase
price of $148,500,000 (the "Purchase Price").
SECTION 1.02 Payment of Purchase Price. On the terms and subject to the
-------------------------
conditions set forth in this Agreement, on the Closing Date, in consideration
for the sale, issuance and delivery of the Purchased Shares, Liberty shall pay
the Purchase Price to Emmis by wire transfer of immediately available funds to
an account designated by Emmis in writing to Liberty at least two days prior to
the Closing Date.
SECTION 1.03 Closing. Subject to the provisions of Articles V and VI,
-------
the closing (the "Closing") of the transactions contemplated by this Agreement
shall take place (i) at the offices of Baker & Botts, L.L.P., 599 Lexington
Avenue, New York, NY 10022, as promptly as practicable following the date the
last of the conditions set forth in Article V is satisfied or, if permissible,
waived, or (ii) at such time, or at such other place or time as Liberty and
Emmis may mutually agree (the date and time of the Closing being herein referred
to as the "Closing Date").
<PAGE>
SECTION 1.04 Deliveries by Emmis. At the Closing, Emmis will deliver or
-------------------
cause to be delivered to Liberty the following:
(a) The opinions, certificates and other documents contemplated by
Section 5.02;
(b) A stock certificate representing the Purchased Shares, with all
necessary stock issuance or transfer stamps affixed thereto, duly completed
and registered in the name of Liberty, or its permitted assignee under
Section 9.05, on the stock transfer books of Emmis; and
(c) A duly executed registration rights agreement of Emmis, in
substantially the form set forth as Exhibit A hereto (the "Registration
Rights Agreement").
SECTION 1.05 Deliveries by Liberty. At the Closing, Liberty will deliver
---------------------
or cause to be delivered to Emmis the following:
(a) The Purchase Price, in accordance with Section 1.02; and
(b) A duly executed Registration Rights Agreement.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF EMMIS
Emmis hereby represents and warrants to Liberty as follows:
SECTION 2.01 Except for Donaldson, Lufkin & Jenrette whose fees shall
be paid entirely by Emmis, no agent, broker, investment banker, financial
advisor or other person or entity is or will be entitled, by reason of any
agreement, act or statement by Emmis or any of its Subsidiaries, directors,
officers, employees or affiliates, to any financial advisory, broker's, finder's
or similar fee or commission, to reimbursement of expenses or to indemnification
or contribution in connection with any of the transactions contemplated by this
Agreement, and Emmis agrees to indemnify and hold Liberty and each of its
Subsidiaries and affiliates harmless from and against any and all claims,
liabilities or obligations with respect to any such fees, commissions, expenses
or claims for indemnification or contribution asserted by any person on the
basis of any act or statement made by Emmis or any of its Subsidiaries,
directors, officers, employees or affiliates.
SECTION 2.02 All facts relating to the assets, business, operations,
financial condition and prospects (as such prospects relate to Emmis and its
Subsidiaries, not to business conditions in the radio or television broadcast
industries generally) of Emmis and its Subsidiaries necessary for a reasonably
prudent investor to make an investment decision with respect to the acquisition
of the Purchased Shares contemplated hereby have been disclosed to Liberty.
Neither this Agreement, nor
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any other agreement, document, certificate or other written instrument delivered
pursuant hereto, contains or will contain any untrue statement of a material
fact or omits or will omit to state a material fact necessary to make the
statements herein and therein, when taken together, not misleading.
SECTION 2.03 Each of Emmis and its Subsidiaries (as defined in Section
8.11) has been duly incorporated or organized, is validly existing as a
corporation, partnership or limited liability company in good standing under the
laws of its jurisdiction of incorporation or organization and has the corporate,
partnership or limited liability company power and authority to carry on its
business as described in the prospectus (the "Prospectus") contained in the
registration statement on Form S-3 (file no. 333-88219) filed by Emmis (the
"Registration Statement") and to own, lease and operate its properties, and each
is duly qualified and is in good standing as a foreign corporation, partnership
or limited liability company authorized to do business in each jurisdiction in
which the nature of its business or its ownership or leasing of property
requires such qualification, except where the failure to be so qualified would
not have a material adverse effect on the business, prospects, financial
condition or results of operations of Emmis and its Subsidiaries, taken as a
whole (a "Material Adverse Effect").
SECTION 2.04 The entities listed on Schedule I are the only Subsidiaries,
direct or indirect, of Emmis. All of the outstanding equity interests of each
of Emmis' Subsidiaries have been duly authorized and validly issued and are
fully paid and non-assessable and, except as set forth on Schedule I hereto, are
owned by Emmis, directly or indirectly through one or more Subsidiaries, free
and clear of any security interest, claim, lien, encumbrance, or adverse
interest of any nature (each, a "Lien").
SECTION 2.05 There are no outstanding subscriptions, rights, warrants,
options, calls, convertible securities, commitments of sale or liens granted or
issued by Emmis or any of its Subsidiaries relating to or entitling any person
to purchase or otherwise to acquire any shares of the capital stock of Emmis or
any of its Subsidiaries, except as otherwise disclosed in the Registration
Statement or pursuant to Emmis' employee benefit plans.
SECTION 2.06 All the outstanding shares of capital stock of Emmis have
been duly authorized and validly issued and are fully paid, non-assessable and
not subject to any preemptive or similar rights.
SECTION 2.07 All of the outstanding shares of capital stock or other
equity interests of each of Emmis' Subsidiaries have been duly authorized and
validly issued and are fully paid and non-assessable, and, except as set forth
on Schedule I hereto, are owned by Emmis, directly or indirectly through one or
more Subsidiaries, free and clear of any security interest, claim, lien,
encumbrance or adverse interest of any nature.
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SECTION 2.08 The authorized and outstanding capital stock of Emmis
conforms to the first paragraph under the caption "Description of Capital Stock"
in the Prospectus and as to legal matters to the description thereof contained
in the Prospectus.
SECTION 2.09 Neither Emmis nor any of its Subsidiaries is in violation of
its respective charter, by-laws or equivalent organizational document or in
default in the performance of any obligation, agreement, covenant or condition
contained in any indenture, loan agreement, mortgage, lease or other agreement
or instrument to which Emmis or any of its Subsidiaries is a party or by which
Emmis or any of its Subsidiaries or their respective property is bound, except
for defaults that are not material to Emmis and its Subsidiaries, taken as a
whole.
SECTION 2.10 The execution, delivery and performance of this Agreement by
Emmis, the compliance by Emmis with all the provisions hereof and the
consummation of the transactions contemplated hereby will not (i) require any
consent, approval, authorization or other order (a "Governmental Consent") of,
or qualification, registration or filing (a "Governmental Filing") with, any
court or governmental body or agency (except such as may be required under the
securities or Blue Sky laws of the various states), (ii) conflict with or
constitute a breach of any of the terms or provisions of, or a default under,
the charter or by-laws of Emmis or any of its Subsidiaries or any indenture,
loan agreement, mortgage, lease or other agreement or instrument that is
material to Emmis and its Subsidiaries, taken as a whole, to which Emmis or any
of its Subsidiaries is a party or by which Emmis or any of its Subsidiaries or
their respective property is bound, (iii) violate or conflict with any
applicable law or any rule, regulation, judgment, order or decree of any court
or any governmental body or agency having jurisdiction over Emmis, any of its
Subsidiaries or their respective property, (iv) result in the imposition or
creation of (or the obligation to create or impose) a Lien under, any agreement
or instrument to which Emmis or any of its Subsidiaries is a party or by which
Emmis or any of its Subsidiaries or their respective property is bound or (v)
result in the suspension, termination or revocation of any Authorization (as
defined below) of Emmis or any of its Subsidiaries or any other impairment of
the rights of the holder of any such Authorization.
SECTION 2.11 There are no legal or governmental proceedings pending or
threatened to which Emmis or any of its Subsidiaries is or could be a party or
to which any of their respective property is or could be subject that are
required to be described in the Registration Statement or the Prospectus and are
not so described; nor are there any statutes, regulations, contracts or other
documents that are required to be described in the Registration Statement or the
Prospectus or to be filed as exhibits to the Registration Statement that are not
so described or filed as required.
SECTION 2.12 Neither Emmis nor any of its Subsidiaries has violated any
foreign, federal, state or local law or regulation relating to the protection of
human health and safety, the environment or hazardous or toxic substances or
wastes, pollutants or contaminants ("Environmental Laws"), any provisions of the
Employee Retirement Income Security Act of 1974, as amended, or any provisions
of the Foreign Corrupt Practices Act or the rules and regulations promulgated
thereunder, except for such violations which, singly or in the aggregate, would
not have a Material Adverse Effect.
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SECTION 2.13 There are no costs or liabilities associated with
Environmental Laws (including, without limitation, any capital or operating
expenditures required for clean-up, closure of properties or compliance with
Environmental Laws or any Authorization, any related constraints on operating
activities and any potential liabilities to third parties) which would, singly
or in the aggregate, have a Material Adverse Effect.
SECTION 2.14 Each of Emmis and its Subsidiaries has such permits,
licenses, consents, exemptions, franchises, authorizations and other approvals
(each, an "Authorization") of, and has made all filings with and notices to, all
governmental or regulatory authorities and self-regulatory organizations and all
courts and other tribunals (each, a "Governmental Entity"), including, without
limitation, under any applicable Environmental Laws, as are necessary to own,
lease, license and operate its respective properties and to conduct its
business, except where the failure to have any such Authorization or to make any
such filing or notice would not, singly or in the aggregate, have a Material
Adverse Effect. Each such Authorization is valid and in full force and effect
and each of Emmis and its Subsidiaries is in compliance with all the terms and
conditions thereof and with the rules and regulations of the authorities and
governing bodies having jurisdiction with respect thereto; and no event has
occurred (including, without limitation, the receipt of any notice from any
authority or governing body) which allows or, after notice or lapse of time or
both, would allow, revocation, suspension or termination of any such
Authorization or results or, after notice or lapse of time or both, would result
in any other impairment of the rights of the holder of any such Authorization;
and such Authorizations contain no restrictions that are burdensome to Emmis or
any of its Subsidiaries; except where such failure to be valid and in full force
and effect or to be in compliance, the occurrence of any such event or the
presence of any such restriction would not, singly or in the aggregate, have a
Material Adverse Effect.
SECTION 2.15 This Agreement has been duly authorized, executed and
delivered by Emmis.
SECTION 2.16 Arthur Andersen LLP are independent public accountants with
respect to Emmis and its Subsidiaries as required by the Securities Act of 1933,
as amended (the "Act").
SECTION 2.17 The consolidated financial statements included or
incorporated by reference in the Registration Statement and the Prospectus (and
any amendment or supplement thereto), together with related schedules and notes,
present fairly in all material respects the consolidated financial position,
results of operations and changes in financial position of Emmis and its
Subsidiaries on the basis stated therein at the respective dates or for the
respective periods to which they apply; such statements and related schedules
and notes have been prepared in accordance with generally accepted accounting
principles consistently applied throughout the periods involved, except as
disclosed therein; the supporting schedules, if any, included in the
Registration Statement present fairly in all material respects in accordance
with generally accepted accounting principles the information required to be
stated therein; and the other financial and statistical information and data set
forth in the Registration Statement and the Prospectus (and any amendment or
supplement
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thereto) are, in all material respects, accurately presented and prepared on a
basis consistent with such financial statements and the books and records of
Emmis.
SECTION 2.18 Emmis is not and, after giving effect to the sale of the
Purchased Shares, will not be, an "investment company" as such term is defined
in the Investment Company Act of 1940, as amended.
SECTION 2.19 There are no contracts, agreements or understandings between
Emmis and any person granting such person the right to require Emmis to file a
registration statement under the Act with respect to any securities of Emmis.
SECTION 2.20 Since the respective dates as of which information is given
in the Prospectus other than as set forth in the Prospectus (exclusive of any
amendments or supplements thereto subsequent to the date of this Agreement), (i)
there has not occurred any material adverse change or any development involving
a prospective material adverse change in the condition, financial or otherwise,
or the earnings, business, management or operations of Emmis and its
Subsidiaries, taken as a whole, (ii) there has not been any material adverse
change or any development involving a prospective material adverse change in the
capital stock or in the long-term debt of Emmis or any of its Subsidiaries and
(iii) neither Emmis nor any of its Subsidiaries has incurred any material
liability or obligation, direct or contingent.
SECTION 2.21 No consent or approval of the Federal Communications
Commission (the "FCC") is required under the Communications Act of 1934, as
amended, and the regulations promulgated thereunder (the "Communications Laws")
for the issuance and sale of the Purchased Shares. The execution, delivery and
performance of this Agreement in accordance with the terms hereof does not
violate the Communications Laws.
SECTION 2.22 The Subsidiaries of Emmis identified on Schedule II hereto
(the "License Subsidiaries") hold all necessary authorizations, approvals,
consents, orders, licenses, certificates and permits issued by the FCC to own
and operate each of the respective radio or television broadcast stations (the
"Stations") as identified on Schedule II hereto (all such FCC authorizations,
approvals, consents, order, licenses, certificates and permits of the License
Subsidiaries collectively the "FCC Licenses").
SECTION 2.23 Emmis and its Subsidiaries have good and marketable title in
fee simple to all real property and good and marketable title to all personal
property owned by them which is material to the business of Emmis and its
Subsidiaries, taken as a whole, in each case free and clear of all liens,
encumbrances and defects except such as do not materially affect the value of
such property and do not interfere with the use made and proposed to be made of
such property by Emmis and its Subsidiaries; and any real property and buildings
held under lease by Emmis and its Subsidiaries are held by them under valid,
subsisting and enforceable leases with such exceptions as are not material and
do not interfere with the use made and proposed to be made of such property and
buildings by Emmis and its Subsidiaries.
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SECTION 2.24 Emmis and its Subsidiaries own or possess, or can acquire on
reasonable terms, all patents, patent rights, licenses, inventions, copyrights,
know-how (including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures), trademarks,
service marks and trade names ("intellectual property") currently employed by
them in connection with the businesses now operated by them except where the
failure to own or possess or otherwise acquire such intellectual property would
not, singly or in the aggregate, have a Material Adverse Effect; and neither
Emmis nor any of its Subsidiaries has received any notice of infringement of or
conflict with asserted rights of others with respect to any of such intellectual
property which, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would have a Material Adverse Effect.
SECTION 2.25 Emmis and each of its Subsidiaries are insured by insurers of
recognized financial responsibility against such losses and risks and in such
amounts as are prudent and customary in the businesses in which they are
engaged; and neither Emmis nor any of its Subsidiaries (i) has received notice
from any insurer or agent of such insurer that substantial capital improvements
or other material expenditures will have to be made in order to continue such
insurance or (ii) has any reason to believe that it will not be able to renew
its existing insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers at a cost that would not have a Material
Adverse Effect.
SECTION 2.26 Except as disclosed or incorporated by reference in the
Prospectus, no relationship, direct or indirect, exists between or among Emmis
or any of its Subsidiaries on the one hand, and the directors, officers,
shareholders, customers or suppliers of Emmis or any of its Subsidiaries on the
other hand, which is required by the Act to be described in the Registration
Statement or the Prospectus which is not so described.
SECTION 2.27 There is no (i) significant unfair labor practice complaint,
grievance or arbitration proceeding pending or threatened against Emmis or any
of its Subsidiaries before the National Labor Relations Board or any state or
local labor relations board, (ii) strike, labor dispute, slowdown or stoppage
pending or threatened against Emmis or any of its Subsidiaries or (iii) union
representation question existing with respect to the employees of Emmis and its
Subsidiaries, except for such actions specified in clause (i), (ii) or (iii)
above, which, singly or in the aggregate, would not have a Material Adverse
Effect. To the best of Emmis' knowledge, no collective bargaining organizing
activities are taking place with respect to Emmis or any of its Subsidiaries.
SECTION 2.28 Emmis and each of its Subsidiaries maintain a system of
internal accounting controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management's general or specific
authorizations; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain asset accountability; (iii) access to
assets is permitted only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
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SECTION 2.29 All material tax returns required to be filed by Emmis and
each of its Subsidiaries in any jurisdiction have been filed, other than those
filings being contested in good faith, and all material taxes, including
withholding taxes, penalties and interest, assessments, fees and other charges
due pursuant to such returns or pursuant to any assessment received by Emmis or
any of its Subsidiaries have been paid, other than those being contested in good
faith and for which adequate reserves have been provided.
SECTION 2.30 Emmis has reviewed its operations and the operations of its
Subsidiaries and any third parties with which Emmis or any of its Subsidiaries
has a material relationship to evaluate the extent to which the business or
operations of Emmis or any of its Subsidiaries will be affected by the Year 2000
Problem (as defined below). As a result of such review, Emmis has no reason to
believe, and does not believe, that the Year 2000 Problem will have a Material
Adverse Effect. The "Year 2000 Problem" as used herein means any risk that the
computer hardware or software used in the receipt, transmission, storage,
retrieval, retransmission or other utilization of data or in the operation of
mechanical or electrical systems of any kind will not, in the case of dates or
time periods occurring after December 31, 1999, function at least as effectively
as in the case of dates or time periods occurring prior to January 1, 2000.
SECTION 2.31 No "nationally recognized statistical rating organization" as
such term is defined for purposes of Rule 436(g)(2) under the Act has indicated
to Emmis that it is considering (i) the downgrading, suspension or withdrawal
of, or any review for a possible change that does not indicate the direction of
the possible change in, any rating assigned to Emmis or any securities of Emmis
or (ii) any change in the outlook for any rating of Emmis or any securities of
Emmis.
SECTION 2.32 Any documents which at the date hereof are incorporated by
reference in the Registration Statement, the Prospectus or any amendment or
supplement thereto, or any preliminary prospectus (the "Incorporated Documents")
were filed in a timely manner and, when they were filed (or, if any amendment
with respect to any such document was filed, when such amendment was filed),
conformed with the requirements of the Securities Exchange Act of 1934, as
amended (the "Exchange Act") and did not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading.
SECTION 2.33 The Class A Common Stock is registered pursuant to Section
12(g) of the Exchange Act and is listed on The Nasdaq National Market, and Emmis
has taken no action designed to, or likely to have the effect of, terminating
the registration of the Class A Common Stock under the Exchange Act or delisting
the Class A Common Stock from The Nasdaq National Market, nor has Emmis received
any notification that the Securities and Exchange Commission (the "Commission")
or the National Association of Securities Dealers, Inc. ("NASD") is
contemplating terminating such registration or listing. Upon issuance to
Liberty or its permitted assignee under Section 9.05, the Purchased Shares shall
be approved for listing on The Nasdaq National Market.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF LIBERTY
Liberty hereby represents and warrants to Emmis as follows:
SECTION 3.01 Authorization and Validity of Agreement. Liberty has all
----------------------------------------
requisite corporate power and authority to enter into this Agreement and to
perform its obligations hereunder and consummate the transactions contemplated
hereby. The execution, delivery and performance by Liberty of this Agreement
and the consummation of the transactions contemplated hereby have been duly
authorized by all necessary corporate action on the part of Liberty. This
Agreement has been duly executed and delivered by Liberty and is a valid and
binding obligation of Liberty, enforceable in accordance with its terms (except
insofar as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights
generally, or by principles governing the availability of equitable remedies).
SECTION 3.02 No Conflict with Instruments. Neither the execution or
-----------------------------
delivery of this Agreement by Liberty, nor the purchase by Liberty of the
Purchased Shares pursuant hereto, (i) violates, conflicts in any material
respect with, or results in a material breach of any provision of, or
constitutes a material default (or an event which, with notice or lapse of time
or both, would constitute a material default) under, any of the terms,
conditions or provisions of (x) its Certificate of Incorporation or By-Laws, or
(y) any material note, bond, mortgage, indenture, lease, agreement or other
instrument or obligation to which Liberty is a party or to which it or any of
its properties or assets may be subject, (ii) results in a material violation of
any material law applicable to Liberty or (iii) violates any material judgment
applicable to any of its properties or assets, except, in the case of each of
the clauses (i), (ii) and (iii) above, for such violations, conflicts, breaches
or defaults, which, individually or in the aggregate, would not have any
material adverse effect on the ability of Liberty to perform its obligations
hereunder.
SECTION 3.03 Brokers or Finders. No agent, broker, investment banker,
------------------
financial advisor or other person or entity is or will be entitled, by reason of
any agreement, act or statement by Liberty or any of its directors, officers or
employees, to any financial advisory, broker's, finder's or similar fee or
commission, to reimbursement of expenses or to indemnification or contribution
in connection with any of the transactions contemplated by this Agreement, and
Liberty agrees to indemnify and hold Emmis harmless from and against any and all
claims, liabilities or obligations with respect to any such fees, commissions,
expenses or claims for indemnification or contribution asserted by any person on
the basis of any act or statement made by Liberty or any of its directors,
officers or employees.
SECTION 3.04 Investment Purpose. Liberty is acquiring the Purchased
------------------
Shares solely for the purpose of investment and, except as provided in the
Registration Rights Agreement, not with a view to, or for offer or sale in
connection with, any distribution thereof in any transaction which would be in
violation of the securities laws of the United States of America or any state
thereof.
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Liberty understands that the certificate representing the Purchased Shares will
contain a legend stating in substance:
"The shares represented by this certificate have not been registered
under the Securities Act of 1933 and such shares may not be sold or
transferred unless such sale or transfer will be effected in
accordance with the registration requirements of the Securities Act of
1933, as at that time amended, or in accordance with any exemption
from the registration requirements of such Act, which may then be
available thereto."
RESTRICTIONS ON TRANSFER AND VOTING: The Amended and Restated
Articles of Incorporation of the Corporation provide that (i) the
Corporation shall not issue to or for the account of an Alien any
share of capital stock of the Corporation if such issuance would cause
the total capital stock of the Corporation held by or voted by Aliens
to exceed, in violation of the Communications Act of 1934, as amended
(the "Communications Act"), 25% of (A) the total capital stock of the
Corporation outstanding at any time or (B) the total voting power of
all shares of such capital stock outstanding and entitled to vote at
any time; and (ii) the Corporation shall not permit the transfer on
its books of any capital stock to any Alien that would result in the
total capital stock of the Corporation held or voted by Aliens to
exceed such 25% limits in violation of the Communications Act; and
(iii) no Alien or Aliens, individually or collectively, shall be
entitled to vote or direct or control the vote of more than 25% of (A)
the total capital stock of the Corporation outstanding at any time, or
(B) the total voting power of all shares of capital stock of the
Corporation outstanding and entitled to vote at any time, if to do so
would violate the Communications Act. The term "Alien" means (i) a
person who is a citizen of a country other than the United States;
(ii) an entity organized under the laws of a government other than the
government of the United States or any state, territory, or possession
of the United States; (iii) a government other than the government of
the United States or any state, territory, or possession of the United
States; or (iv) a representative of, or an individual or entity
controlled by, any of the foregoing. The Amended and Restated
Articles of Incorporation also provide that the Board of Directors of
the Corporation shall have all powers necessary to implement the
provisions of the Amended and Restated Articles of Incorporation
regarding Alien ownership and to insure compliance with the Alien
ownership restrictions of the Communications Act including, without
limitation, the power to prohibit the transfer of any shares of
capital stock of the Corporation to any Alien, the power to redeem
shares of capital stock of the Corporation determined by the Board of
Directors to be owned
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beneficially by an Alien or Aliens and the power to take or cause to
be taken such other action as it deems appropriate to implement such
restrictions.
ARTICLE IV
TRANSACTIONS PRIOR TO CLOSING
SECTION 4.01 Interim Conduct of Business. During the period commencing
---------------------------
on the date of this Agreement and ending on the Closing Date, except as
expressly contemplated by this Agreement or any Exhibit hereto or consented to
in writing by Liberty (which consent shall not be unreasonably withheld), Emmis
shall not (i) make any change in or amendments to its Certificate of
Incorporation (except the amendment to create the Series A Cumulative
Convertible Preferred Stock) or Bylaws, (ii) reclassify the outstanding shares
of its capital stock or make any other changes in its capital structure or (iii)
declare, set aside, pay or make any dividend or other distribution or payment
(whether in cash, property or securities) with respect to its capital stock or
other securities (other than a dividend or distribution consisting solely of
Class A Common Stock).
SECTION 4.02 Access to Information Concerning Properties and Records.
-------------------------------------------------------
From the date hereof until the Closing and subject to contractual and legal
restrictions applicable to Emmis (or its Subsidiaries), upon reasonable notice,
Emmis shall (and shall cause each of its Subsidiaries to) afford to the
officers, employees, counsel, accountants and other authorized representatives
of Liberty access during normal business hours to all its properties, personnel,
books and records and furnish promptly to such persons such information
concerning its business, properties, personnel and affairs as such persons shall
from time to time reasonably request in connection with or to facilitate the
consummation of the transactions contemplated hereby.
SECTION 4.03 Public Announcements. Neither Liberty nor Emmis shall, nor
--------------------
shall either Liberty or Emmis permit any of its Subsidiaries to (and each such
party shall use its reasonable efforts to cause its directors, officers,
employees and authorized representatives not to), issue any press release, make
any public announcement or furnish any written statement to its employees or
stockholders generally concerning the transactions contemplated by this
Agreement without the consent of the other party (which consent shall not be
unreasonably withheld), except to the extent required by applicable law or the
applicable requirements of the New York Stock Exchange or the National
Association of Securities Dealers, Inc. with respect to issuers whose securities
are quoted on the Nasdaq Stock Market (and in either such case such party shall,
to the extent consistent with timely compliance with such requirement, consult
with the other party prior to making the required release, announcement or
statement).
SECTION 4.04 Reasonable Efforts. Subject to the terms and conditions of
------------------
this Agreement and applicable law, each of the parties shall use its reasonable
efforts to take, or cause to be taken, all actions, and do, or cause to be done,
all things reasonably necessary, proper or advisable to consummate and make
effective the transactions contemplated by this Agreement as soon as
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reasonably practicable, including such actions or things as either party hereto
may reasonably request in order to cause any of the conditions to such other
party's obligation to consummate such transactions specified in Article V to be
fully satisfied. Without limiting the generality of the foregoing, the parties
shall (and shall cause their respective Subsidiaries, and use their reasonable
efforts to cause their respective directors, officers, employees, agents,
attorneys, accountants and representatives, to) consult and fully cooperate with
and provide reasonable assistance to each other in (i) obtaining all necessary
consents, approvals, waivers, licenses, permits, authorizations, registrations,
qualifications or other permission or action by, and giving all necessary
notices to and making all necessary filings with and applications and
submissions to, any Governmental Entity or other person or entity; (ii filing
all applicable Notification and Report Forms required under the Hart-Scott-
Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act") as a
result of the transactions contemplated by this Agreement and promptly complying
with any requests for additional information and documentary material that may
be requested pursuant to the HSR Act; (ii using commercially reasonable efforts
(which does not require the commencement of litigation) to lift any permanent or
preliminary injunction or restraining order or other similar order issued or
entered by any court or governmental entity (an "Injunction") of any type
referred to in Section 5.01(b); (iv providing all such information about such
party, its Subsidiaries and its officers, directors, partners and affiliates and
making all applications and filings as may be necessary or reasonably requested
in connection with any of the foregoing; and (v) in general, consummating and
making effective the transactions contemplated hereby; provided, however, that
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in order to obtain any consent, approval, waiver, license, permit,
authorization, registration, qualification or other permission or action or the
lifting of any injunction referred to in clause (i) or (iii) of this sentence,
no party nor any of their respective stockholders (including, in the case of
Liberty, AT&T Corp.), Subsidiaries or affiliates shall be required to (x) pay
any consideration, to divest itself of any of, or otherwise rearrange the
composition of, its assets or to agree to any conditions or requirements which
are materially adverse or burdensome(or, in the case of AT&T Corp., adverse or
burdensome in any respect) or (y) amend, or agree to amend, in any material
respect any contract. Prior to making any application to or filing with any
Governmental Entity or other person or entity in connection with this Agreement,
each of Liberty and Emmis shall provide the other party with drafts thereof and
afford the other party a reasonable opportunity to comment on such drafts.
ARTICLE V
CONDITIONS PRECEDENT
SECTION 5.01 Conditions Precedent to the Obligations of Liberty and
------------------------------------------------------
Emmis. The obligations of each of Liberty and Emmis to consummate the
- -----
transactions contemplated by this Agreement are subject to the satisfaction at
or prior to the Closing Date of each of the following conditions:
(a) HSR Act. All applicable waiting periods under the HSR Act shall have
-------
expired or been terminated without receipt of any objections or commencement of
litigation or threat thereof
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by the appropriate governmental enforcement agency to restrain the transactions
contemplated hereby.
(b) Absence of Injunctions. No permanent or preliminary injunction or
----------------------
restraining order or other order by any court or other Governmental Entity of
competent jurisdiction or other legal restraint or prohibition preventing
consummation of the transactions contemplated hereby as provided herein shall be
in effect.
(c) No Proceedings or Adverse Enactments. There shall not have been any
------------------------------------
action taken, or any statute, rule, regulation, order, judgment or decree
enacted, promulgated, entered, issued or enforced by any foreign or United
States federal, state or local Governmental Entity, and there shall be no
action, suit or proceeding pending which makes the transactions contemplated by
this Agreement illegal or imposes, or is reasonably likely to result in the
imposition of, material damages or penalties in connection therewith.
(d) Receipt of Governmental Approvals and Consents. All Government
----------------------------------------------
Consents as are required in connection with the consummation of the transactions
contemplated hereby shall have been obtained and shall be in full force and
effect, all Governmental Filings as are required in connection with the
consummation of such transactions shall have been made, and all waiting periods,
if any, applicable to the consummation of such transactions imposed by any
Governmental Entity shall have expired, other than those which, if not obtained,
in force or effect, made or expired (as the case may be) would not, either
individually or in the aggregate, have any adverse effect on AT&T Corp. or a
material adverse effect on (i) the transactions contemplated hereby or (ii) the
business, assets, results of operations, financial condition or prospects of
Liberty and its Subsidiaries, taken as a whole, or Emmis and its Subsidiaries,
taken as a whole.
SECTION 5.02 Conditions Precedent to the Obligations of Liberty . The
---------------------------------------------------
obligation of Liberty to consummate the transactions contemplated by this
Agreement are also subject to the satisfaction at or prior to the Closing Date
of each of the following conditions, unless waived by Liberty:
(a) Accuracy of Representations and Warranties. All representations and
------------------------------------------
warranties of Emmis contained in this Agreement shall, if specifically qualified
by materiality, be true and correct and, if not so qualified, be true and
correct in all material respects in each case as of the date of this Agreement
and (except to the extent such representations and warranties speak as of a
specified earlier date) on and as of the Closing Date, with the same force and
effect as though made on and as of the Closing Date, except for changes
permitted or contemplated by this Agreement.
(b) Performance of Agreements. Emmis shall have performed in all material
-------------------------
respects all obligations and agreements, and complied in all material respects
with all covenants and conditions, contained in this Agreement to be performed
or complied with by it prior to or on the Closing Date.
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(c) No Proceedings or Adverse Enactments. There shall not have been any
------------------------------------
action taken, or any statute, rule, regulation, order, judgment or decree
enacted, promulgated, entered, issued or enforced by any foreign or United
States federal, state or local Governmental Entity, and there shall be no
action, suit or proceeding pending which would, as of or after the Closing,
impose material limitations on the ability of Liberty effectively to exercise
full rights of ownership of the Purchased Shares (including the right to vote
such shares on all matters properly presented to the stockholders of Emmis).
(d) Officer's Certificates. Liberty shall have received certificates of
----------------------
Emmis, dated the Closing Date, signed by executive officers of Emmis to evidence
satisfaction of the conditions set forth in Sections 5.02 (a) and (b), which
certificates shall be given by such officers after due inquiry.
(e) Opinion of Counsel. Liberty shall have received the favorable opinion
------------------
from Emmis' counsel, Bose, McKinney & Evans, LLP, dated the Closing Date, in
form customary for transactions of the type contemplated by this Agreement.
(f) Other Deliveries. All other documents and instruments required under
-----------------
this Agreement to have been delivered by Emmis to Liberty at or prior to the
Closing (including those specified in Section 1.04) shall have been delivered.
SECTION 5.03 Conditions Precedent to the Obligations of Emmis. The
------------------------------------------------
obligation of Emmis to consummate the transactions contemplated by this
Agreement is also subject to the satisfaction at or prior to the Closing Date of
each of the following conditions, unless waived by Emmis:
(a) Accuracy of Representations and Warranties. All representations and
------------------------------------------
warranties of Liberty contained in this Agreement shall, if specifically
qualified by materiality, be true and correct and, if not so qualified, be true
and correct in all material respects in each case as of the date of this
Agreement and (except to the extent such representations and warranties speak as
of a specified earlier date) on and as of the Closing Date, with the same force
and effect as though made on and as of the Closing Date, except for changes
permitted or contemplated by this Agreement.
(b) Performance of Agreements. Liberty shall have performed in all
-------------------------
material respects all obligations and agreements, and complied in all material
respects with all covenants and conditions, contained in this Agreement to be
performed or complied with by them prior to or on the Closing Date.
(c) Officer's Certificates. Emmis shall have received a certificate of
----------------------
Liberty, dated the Closing Date, signed by executive officers of Liberty to
evidence satisfaction of the conditions set forth in Sections 5.03 (a) and (b),
which certificates shall be given by such officers after due inquiry.
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(d) Other Deliveries. All other documents and instruments required under
-----------------
this Agreement to have been delivered by Liberty to Emmis at or prior to the
Closing (including those specified in Section 1.05) shall have been delivered.
ARTICLE VI
TERMINATION
SECTION 6.01 Termination and Abandonment. This Agreement may be
---------------------------
terminated and the transactions contemplated hereby may be abandoned at any time
prior to the Closing: (i) by mutual written consent of Liberty and Emmis; or
(ii) by either Liberty or Emmis: (A) if the Closing shall not have occurred
before February 29, 2000, provided that the right to terminate this Agreement
pursuant to this clause (ii)(A) shall not be available to any party whose
failure to perform any of its obligations under this Agreement required to be
performed by it at or prior to the Closing has resulted in the failure of the
Closing to occur before such date, (B) if there has been a material breach by
the other party of any of its representations, warranties, covenants or
agreements contained in this Agreement and such breach shall not have been cured
within five business days after written notice thereof shall have been received
by the party alleged to be in breach, or (C) if any court of competent
jurisdiction or other competent Governmental Entity shall have issued an order,
decree or ruling or taken any other action permanently restraining, enjoining or
otherwise prohibiting any of the transactions contemplated by this Agreement and
such order, decree, ruling or other action shall have become final and
nonappealable.
SECTION 6.02 Effect of Termination. In the event of any termination of
---------------------
this Agreement by Liberty or Emmis pursuant to Section 6.01, this Agreement
forthwith shall become void, and there shall be no liability or obligation on
the part of any party hereto or any of their respective officers and directors,
except that (i) Section 9.02 and Article VII shall survive the termination of
this Agreement, (ii) nothing herein will relieve any party from liability for
any breach of any of its representatives, warranties, covenants or agreements
set forth in this Agreement occurring prior to such termination, and (iii)
nothing herein shall relieve any party from liability for the willful breach of
any of its representations, warranties, covenants or agreements set forth in
this Agreement.
ARTICLE VII
INDEMNIFICATION
SECTION 7.01 Survival. The representations and warranties of the parties
--------
contained in this Agreement shall survive the Closing for a period of two years.
The covenants and agreements of the parties contained in this Agreement that
contemplate actions to be taken (a) prior to the Closing shall not survive the
Closing and (b) after the Closing shall survive until such actions shall have
been taken or performed in accordance with the terms of the applicable covenant
or agreement.
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SECTION 7.02 Indemnification Relating to the Agreement. (a) Emmis shall
-----------------------------------------
indemnify Liberty and each director, officer, employee, agent, successor and
permitted assign of Liberty, from and against any and all losses, liabilities,
claims, damages, obligations, liens, assessments, judgments, awards, fines,
interest, penalties, costs and expenses (including reasonable attorneys' fees
and expenses) ("Losses") resulting or arising from:
(i) any breach by Emmis of any representation or warranty of Emmis
set forth in this Agreement or in any agreement, certificate or other
document executed by Emmis and delivered to Liberty pursuant to the
provisions of this Agreement; and
(ii) any failure of Emmis to comply with or non-fulfillment of any
covenant or agreement of Emmis set forth in this Agreement.
(b) Liberty shall indemnify Emmis, and each director, employee, agent,
officer, employee, agent, successor and assign of Emmis, from and against all
Losses resulting or arising from:
(i) any breach by Liberty of any representation or warranty of
Liberty set forth in this Agreement or in any agreement, certificate or
other document executed by Liberty and delivered to Emmis pursuant to the
provisions of this Agreement; and
(ii) any failure of Liberty to comply with or non-fulfillment of any
covenant or agreement of Liberty set forth in this Agreement.
SECTION 7.03 Indemnification Procedures.
--------------------------
(a) Procedures for Indemnification of Third Party Claims.
----------------------------------------------------
(i) If a party entitled to indemnification under Section 7.02 (an
"Indemnitee") shall receive notice or otherwise learn of the assertion by a
person, company or other entity (including, without limitation, any
Governmental Entity) (a "Person") who is not a party to this Agreement, of
any claim or of the commencement or threat by any such Person of any
action, suit, arbitration, inquiry, proceeding or investigation by or
before any court or other Governmental Agency (a "Third Party Claim") with
respect to which the other party may be obligated to provide
indemnification pursuant to Section 7.02 (an "Indemnifying Party"), such
Indemnitee shall give such Indemnifying Party written notice thereof
promptly after becoming aware of such Third Party Claim and in no event
later than the second anniversary of the Closing Date; provided that the
--------
failure of any Indemnitee to give notice or any delay in giving notice as
provided in this Section 7.03(a) shall not relieve the related Indemnifying
Party of its obligations under this Article VII, except to the extent that
such Indemnifying Party is prejudiced by such failure to give or delay in
giving notice. Such notice shall describe the Third Party Claim in
reasonable detail and, if ascertainable, shall indicate the
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amount (estimated if necessary) of the Loss that has been or may be
sustained by such Indemnitee.
(ii) An Indemnifying Party may elect to defend or to seek to settle
or compromise, at such Indemnifying Party's own expense and by such
Indemnifying Party's own counsel, any Third Party Claim. Within 30 days of
the receipt of notice from an Indemnitee in accordance with Section
7.03(a)(i) (or sooner, if the nature of such Third Party Claim so
requires), the Indemnifying Party shall notify the Indemnitee of its
election whether the Indemnifying Party will assume responsibility for
defending such Third Party Claim, which election shall specify any
reservations or exceptions. If the Indemnifying Party assumes the defense
of a Third Party Claim, the Indemnitee shall be kept reasonably informed
with respect to, and shall have the right to employ separate counsel and to
participate in (but not control) the defense, compromise or settlement
thereof, but the fees and expenses of such separate counsel shall be the
expense of such Indemnitee unless (x) the Indemnifying Party agrees in
advance to pay such fees and expenses or (y) the Indemnitee shall have been
advised by its counsel that there may be one or more legal defenses
available to it which are different from or additional to those available
to the Indemnifying Party, in which case the fees and expenses of such
separate counsel shall be borne by the Indemnifying Party. If an
Indemnifying Party elects not to assume responsibility for defending a
Third Party Claim, or fails to notify an Indemnitee of its election as
provided in this Section 7.03(a)(ii), such Indemnitee may defend or seek to
compromise or settle such Third Party Claim at the expense of the
Indemnifying Party. Neither an Indemnifying Party nor an Indemnitee shall
consent to entry of any judgment or enter into any settlement of any Third
Party Claim which does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such Indemnitee, in the case of a
consent or settlement by an Indemnifying Party, or the Indemnifying Party,
in the case of a consent or settlement by the Indemnitee, of a written
release from all liability in respect of such Third Party Claim.
(iii) If an Indemnifying Party chooses to defend or to seek to
compromise or settle any Third Party Claim, the related Indemnitee shall
make available to such Indemnifying Party (in a manner that will not
unreasonably interfere with the conduct of the Indemnitee's business) any
personnel or any books, records or other documents within its control or
which it otherwise has the ability to make available that are necessary or
appropriate for such defense, settlement or compromise, and shall otherwise
cooperate (in a manner that will not unreasonably interfere with the
conduct of the Indemnitee's business) in the defense, settlement or
compromise of such Third Party Claim.
(iv) Notwithstanding anything in this Section 7.03(a) to the
contrary, (A) neither an Indemnifying Party nor an Indemnitee shall,
without the written consent of the other party, settle or compromise or
consent to the entry of any judgment with respect to any Action or Third
Party Claim if the effect thereof is to admit any criminal liability by, or
to permit any injunctive relief or other order providing non-monetary
relief to be entered against, the other party and (B) neither an
Indemnifying Party nor an Indemnitee may settle
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or compromise any claim without the consent of the other (which consent
shall not be unreasonably withheld). Subject to clause (A) of this
paragraph (iv), if an Indemnifying Party notifies the related Indemnitee in
writing of such Indemnifying Party's desire to settle or compromise a Third
Party Claim on the basis set forth in such notice (provided that such
settlement or compromise includes as an unconditional term thereof the
giving by the claimant or plaintiff of a written release of the Indemnitee
from all liability in respect thereof) and the Indemnitee shall notify the
Indemnifying Party in writing that such Indemnitee declines to accept any
such settlement or compromise, such Indemnitee may continue to contest such
Third Party Claim, free of any participation by such Indemnifying Party, at
such Indemnitee's sole expense. In such event, the obligation of such
Indemnifying Party to such Indemnitee with respect to such Third Party
Claim shall be equal to (1) the costs and expenses of such Indemnitee prior
to the date such Indemnifying Party notifies such Indemnitee of the offer
to settle or compromise (to the extent such costs and expenses are
otherwise indemnifiable hereunder) plus (2) the lesser of (x) the amount of
any offer of settlement or compromise which such Indemnitee declined to
accept and (y) the actual out-of-pocket amount such Indemnitee is obligated
to pay subsequent to such date as a result of such Indemnitee's continuing
to contest such Third Party Claim.
(v) In the event of payment by an Indemnifying Party to any Indemnitee
in connection with any Third Party Claim, such Indemnifying Party shall be
subrogated to and shall stand in the place of such Indemnitee as to any
events or circumstances in respect of which such Indemnitee may have any
right or claim relating to such Third Party Claim against any claimant or
plaintiff asserting such Third Party Claim or against any other Person.
Such Indemnitee shall cooperate with such Indemnifying Party in a
reasonable manner, and at the cost and expense of such Indemnifying Party,
in prosecuting any subrogated right or claim.
(b) Other Procedures for Indemnification.
------------------------------------
(i) Any claim on account of a Loss which does not result from a
Third Party Claim shall be asserted by written notice given by the
Indemnitee to the related Indemnifying Party, in no event later than the
second anniversary of the Closing Date. Such Indemnifying Party shall have
a period of 30 days after the receipt of such notice within which to
respond thereto. If such Indemnifying Party does not respond within such 30
day period, such Indemnifying Party shall be deemed to have refused to
accept responsibility to make payment. If such Indemnifying Party does not
respond within such 30 day period or rejects such claim in whole or in
part, such Indemnitee shall be free to pursue such remedies as may be
available to such party under applicable law.
(ii) If the amount of any Liability shall, at any time subsequent to
the payment required by this Agreement, be reduced by recovery, settlement
or otherwise, the amount of such reduction, less any expenses incurred in
connection therewith, shall promptly be repaid by the Indemnitee to the
Indemnifying Party.
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SECTION 7.04 Remedies Cumulative. Subject to the limitations set forth
-------------------
in Section 7.04 hereof, the remedies provided in this Article VII shall be
cumulative, and the remedies provided in this Article VII shall not preclude
assertion by an Indemnitee of any other rights or the seeking of any and all
other remedies against any Indemnifying Party.
ARTICLE VIII
POST-CLOSING COVENANTS
SECTION 8.01 Ownership Attribution. Emmis and Liberty intend that the
---------------------
ownership of the Purchased Shares by Liberty or any FCC Affiliate (as defined
below) shall not cause (i) the direct or indirect ownership, now or in the
future, by Liberty or an FCC Affiliate of any broadcast station, newspaper,
cable television system or multipoint distribution system (each, a "Media
Property") to be attributed to Emmis under applicable rules (the "FCC
Attribution Rules") of the Federal Communications Commission (the "FCC"); or
(ii) the direct or indirect ownership, now or in the future, by Emmis or an FCC
Affiliate of any Media Property to be attributed to Liberty under the FCC
Attribution Rules, if in either case such attribution of ownership would result
in the violation of any applicable multiple ownership or cross-ownership rules
of the FCC (the "FCC Ownership Rules"). If at any time the ownership by Liberty
or an FCC Affiliate of Purchased Shares causes attribution to Emmis or to
Liberty as set forth in (i) or (ii), respectively ("Ownership Attribution"),
that would result in a violation of any applicable FCC Ownership Rule, then:
(a) Liberty shall, and shall cause each FCC Affiliate to, promptly execute
and deliver a proxy to a designee selected by Liberty entitling such designee to
exercise the voting power of the Purchased Shares for the election of directors
of Emmis. Each proxy shall pertain to such percentage of the Purchased Shares
and otherwise be in form and substance sufficient to eliminate such Ownership
Attribution to the extent a proxy is then acceptable to the FCC for such
purpose. Each such proxy granted by Liberty or an FCC Affiliate shall remain in
effect until (i) ownership of the Purchased Shares subject to the proxy is
transferred to a person or entity other than Liberty or an FCC Affiliate; or
(ii) such time as the grantor of the proxy may vote its Purchased Shares without
resulting in the violation of any FCC Ownership Rule.
(b) If the granting of a proxy as contemplated by foregoing Subsection (a)
is not then acceptable to the FCC as a means to eliminate such Ownership
Attribution, Liberty agrees, and shall cause each FCC Affiliate that holds any
Purchased Shares to agree, to exchange all or such portion of the Purchased
Shares as required by the FCC to eliminate such Ownership Attribution for an
equal number of duly authorized, validly issued, fully paid and non-assessable
shares of non-voting common stock of Emmis having the same rights and privileges
as the Purchased Shares other than the right to vote except as required by
applicable law. Liberty, at its option, may elect for any reason to exchange
all or any portion of the Purchased Shares for an equal number of duly
authorized, validly issued, fully paid and non-assessable shares of such non-
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voting common stock of Emmis at any time after Emmis' Articles of Incorporation
have been amended to create such non-voting common stock, which amendment Emmis
shall use its reasonable efforts to effect as soon as practicable. Each such
share of non-voting common stock shall be exchangeable into one share of Class A
Common Stock (i) upon the transfer of such share of non-voting common stock to a
person or entity other than Liberty or an FCC Affiliate; or (ii) at such time as
the holder of such share could vote its Purchased Shares without resulting in
the violation of any FCC Ownership Rule.
(c) In the event that the actions contemplated by foregoing Subsections (a)
and (b) are not acceptable to the FCC as a means to eliminate such Ownership
Attribution, Emmis and Liberty agree, and Liberty shall cause each of its FCC
Affiliates that own any of the Purchased Shares to agree, to promptly take such
other action as reasonably necessary and appropriate to eliminate such Ownership
Attribution in a manner acceptable to the FCC.
The term "FCC Affiliate" shall mean, when used with respect to Liberty or
Emmis, respectively, any person or entity whose ownership of any Media Property
would be attributable to Liberty or Emmis, respectively, under the FCC
Attribution Rules, or any person or entity that is an affiliate of Liberty or
Emmis, respectively.
Emmis and Liberty intend that, as between themselves, neither Emmis,
Liberty nor any of their respective FCC Affiliates shall be restricted or
prohibited from acquiring, owning or operating any Media Property in any market.
Emmis and Liberty, however, recognize that ownership by Emmis, Liberty or their
respective FCC Affiliates of Media Properties in the same market could result in
the violation of the FCC Ownership Rules by reason of Ownership Attribution.
Emmis and Liberty agree, as between themselves and on behalf of their respective
FCC Affiliates, that the sole action that any of them will be required to take
to avoid such a violation shall be compliance by Liberty and its FCC Affiliates
with the terms of this Section 8.01. Without limiting the generality of the
foregoing, in the event that Emmis in good faith gives written notice to Liberty
that Emmis intends to acquire a Media Property in a market which, by reason of
Ownership Attribution, would result in the violation of any FCC Ownership Rule,
Liberty shall, and shall cause each FCC Affiliate to, promptly take such action
as provided in foregoing subsections (a), (b) or (c) to prospectively prevent
such violation by eliminating such Ownership Attribution as soon as practicable
to permit Emmis to consummate the intended acquisition without unreasonable
delay by reason of such prospective violation.
SECTION 8.02 Lockup. Liberty covenants and agrees that Liberty shall not,
------
and shall cause each of its affiliates (including, but not limited to,
controlled Subsidiaries) not to, sell or otherwise transfer any of the Purchased
Shares for a period of twelve (12) months commencing on the Closing Date;
provided that (i) Liberty may transfer all or any portion of the Purchased
Shares to one or more controlled Subsidiaries of Liberty, (ii) Liberty may
transfer up to one-third of the Purchased Shares to one or more affiliates of
Liberty that are not controlled Subsidiaries, and (iii) Liberty, any controlled
Subsidiary and any affiliate of Liberty holding Purchased Shares may pledge any
Purchased Shares to secure bona fide indebtedness owed to an unrelated party or
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in support of hedging transactions, puts, calls, exchangeable securities,
collars and derivative transactions.
SECTION 8.03 Preemptive Rights. (a) If at any time that Liberty and its
-----------------
Affiliates own at least One Million Four Hundred Thousand (1,400,000) of the
Purchased Shares (as adjusted from time to time to account for any stock
dividend, stock split or reverse stock split) Emmis issues any New Securities
except as provided in Subsection (c) below, Liberty and any Permitted Assignee
shall each have the right, but not the obligation, to purchase such New
Securities up to an amount sufficient to permit it to maintain its percentage
common equity interest in Emmis (based on the Number of Common Shares
Outstanding existing immediately prior to the issuance of the New Securities).
The "Number of Common Shares Outstanding" as of any time means the sum of (i)
the number of shares of Emmis common stock which then are actually issued and
outstanding, plus (ii) the total number of additional shares of common stock
which would then be issued and outstanding if it were assumed that all
outstanding Qualifying Rights, if any, were then duly exercised in full (whether
or not then exercisable). If Emmis desires to issue New Securities, it will
first give written notice (an "Issuance Notice") thereof to Liberty and each
Permitted Assignee stating the number of New Securities proposed to be issued,
the total consideration to be received by Emmis upon sale of the New Securities
and any other material terms of the transaction. Within three (3) days after the
receipt of such notice, Liberty and each Permitted Assignee may exercise its
rights under this Section 8.03 by giving written notice to that effect to Emmis.
Failure to give such notice within that three (3) days period will constitute a
waiver of the rights granted by this Section 8.03 as to the particular issuance
of New Securities specified in the Issuance Notice.
(b) The per share purchase price to be paid upon exercise of the rights
granted under this Section 8.03 will be equal to the lowest per share
consideration at which the New Securities are offered or proposed to be offered
by Emmis to any purchasers of New Securities before any underwriter's discount.
The consideration for which New Securities are offered or proposed to be offered
will be determined as follows: (i) in case of the proposed issuance of New
Securities for cash, the consideration to be received by Emmis will be the
amount of cash for which the New Securities are proposed to be issued and (ii)
in case of the proposed issuance of New Securities in whole or in part for
consideration other than cash, the value of the consideration to be received by
Emmis other than cash will be the Fair Market Value of that consideration.
(c) The provisions of this Section 8.01 will not apply to shares of common
stock of Emmis, or rights to purchase shares of common stock of Emmis, issued
pursuant to any employee stock option, equity incentive, profit-sharing or other
employee benefit plan approved by the Board of Directors of Emmis.
(d) As used in this Section 8.03, the term
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(i) "New Securities" means any shares of common stock of Emmis or
any rights to subscribe for, purchase or otherwise acquire any share or shares
of common stock of Emmis;
(ii) "Qualifying Rights" means, as of any time, all outstanding
rights to subscribe for, purchase or otherwise acquire any share or shares of
common stock of Emmis which, by their terms, are exercisable for shares of
common stock of Emmis only upon payment, conversion, surrender, exchange or
delivery by the holder of additional consideration in cash or property in an
amount or having a Fair Market Value per share of common stock of Emmis which,
as of such time, is equal to or less than the Fair Market Value per share of the
common stock of Emmis as of such time;
(iii) "Fair Market Value" means, as to any securities or other assets
or property, the price at which a willing seller would sell and a willing buyer
would buy such securities, assets or property having full knowledge of the
facts, in an arm's-length transaction without time constraints, and without
being under any compulsion to buy or sell.
(iv) "Permitted Assignee" means (A) any controlled Subsidiary of
Liberty to which Liberty transfers Purchased Shares and (B) any affiliate of
Liberty to which Liberty transfers Purchased Shares except that in the case of
clause (B), the rights granted under this Section 8.01 shall not apply in
respect of any Purchased Shares held by any such affiliate which are in excess
of one-third of the total number of Purchased Shares issued under this Agreement
(as adjusted to take into account stock splits, stock dividends,
reclassifications and similar transactions).
SECTION 8.04 Urban Stations. So long as Liberty and its affiliates retain
--------------
in the aggregate ownership of at least One Million Four Hundred Thousand
(1,400,000) of the Purchased Shares (as adjusted from time to time to account
for any stock dividend, stock split or reverse stock split), Emmis shall not,
without Liberty's prior written consent, directly or indirectly acquire an
interest or invest in any joint venture, or form any joint venture, with any
radio broadcast company that derives more than seventy percent (70%) of its
broadcast cash flow or fifty percent (50%) of its revenues from urban format
radio stations. Emmis, however, shall in no manner be restricted from acquiring
any urban format radio station or from converting any radio station owned by
Emmis to an urban format.
SECTION 8.05 Strategic Alliance. Emmis and Liberty and will work together
------------------
in good faith to explore opportunities for a strategic alliance which would
benefit both Emmis or its Affiliates and Liberty or its Affiliates.
SECTION 8.06 Potential Future Venture.
------------------------
(a) In the event Liberty or any of its Affiliates determines to engage in
the radio broadcast business, Liberty or its affiliate may, but shall not be
obligated to, form a new entity
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("Radio Entity") for the purpose of acquiring radio broadcast properties with
urban formats in major United States markets. If requested by Liberty, Emmis
agrees to make equity ownership investments in the Radio Entity, provided that
(i) the Radio Entity shall not own or acquire any radio station in Los Angeles,
(ii) Emmis' aggregate investment in Radio Entity shall at no time exceed ten
percent (10%) of the total cash capital contributions by all owners of the Radio
Entity, (iii) the aggregate amount of all such investments by Emmis shall not
exceed Fifty Million Dollars ($50,000,000), (iv) the business of the Radio
Entity shall be limited to the acquisition, ownership and operation of radio
stations with urban formats in major United States markets, and Emmis shall not
be obligated to make a particular equity investment in the Radio Entity unless
such investment is solely used to fund, contemporaneously with such investment,
ten percent (10%) of the purchase price of one or more such radio stations
specified by Liberty in its investment request, and (v) Emmis shall not be
required to make any investment in the Radio Entity if the investment would
result in Emmis having an attributable ownership interest, within the meaning of
the FCC Attribution Rules, in any broadcast license held by the Radio Entity.
(b) No owner of an interest in Radio Entity shall receive any ownership
interest in Radio Entity in exchange for any services provided or to be provided
as a promoter or otherwise, and the economic rights and benefits of Emmis'
investment in Radio Entity shall be in proportion to the total cash investment
made by Emmis in Radio Entity compared to the total cash investments made by all
owners in Radio Entity. All transactions between Radio Entity, on the one hand,
and any of its owners or their respective Affiliates, on the other hand, shall
be on an arms-length basis, and Radio Entity shall be structured in a manner
that will provide each owner with reasonable liquidity opportunities. If Emmis
is an investor in the Radio Entity at the time that Radio Entity acquires any
radio station in the New York or Chicago market, Liberty shall request that
Emmis invest, and Emmis shall be entitled to invest, in Radio Entity in
connection with such acquisition in accordance with clauses (ii) through (v) of
foregoing Subsection (a).
(c) Except as contemplated by this Section, Emmis shall not be entitled
to participate or otherwise acquire any interest in Radio Entity. Regardless of
whether Emmis invests in Radio Entity, Emmis shall in no event be restricted in
any manner from owning, operating or acquiring any type of radio station in any
market, including, but not limited to, a radio station that competes with Radio
Entity in any market.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01 Further Assurances. From and after the Closing Date, each of
------------------
Liberty and Emmis shall, at any time and from time to time, make, execute and
deliver, or causes to be made, executed and delivered, such instruments,
agreements, consents and assurances and take or cause to be taken all such
actions as may reasonably be requested by the other party hereto for the
effectual consummation, confirmation and particularization of this Agreement and
the transactions contemplated hereby.
23
<PAGE>
SECTION 9.02 Expenses. Except as otherwise provided herein, all costs
--------
and expenses, including, without limitation, fees and disbursements of counsel,
financial advisors and accountants, incurred in connection with this Agreement
and the transactions contemplated hereby shall be paid by the party incurring
such costs and expenses, whether or not the Closing shall occur.
SECTION 9.03 Notices. All notices, requests, demands, waivers and other
-------
communications required or permitted to be given under this Agreement shall be
in writing and shall be deemed to have been duly given on (i) the day on which
delivered personally or by telecopy (with prompt confirmation by mail) during a
business day to the appropriate location listed as the address below, (ii) three
business days after the posting thereof by United States registered or certified
first class mail, return receipt requested, with postage and fees prepaid or
(iii) one business day after deposit thereof for overnight delivery. Such
notices, requests, demands, waivers or other communications shall be addressed
as follows:
(a) if to Liberty, to:
Liberty Media Corporation
9197 South Peoria Street
Englewood, Colorado 80112
Attention: Charles Y. Tanabe
Facsimile: (720) 875-5382
with a copy to:
Lee D. Charles, Esq.
Baker & Botts, L.L.P.
599 Lexington Avenue
New York, New York 10022
Telecopy No.: (212) 705-5125
24
<PAGE>
(a) if to Emmis, to:
Emmis Communications Corporation
One Emmis Plaza
40 Monument Circle
Indianapolis, Indiana 46204
Attention: J. Scott Enright
Telecopy No.: (317) 631-3750
with a copy to:
David L. Wills, Esq.
Bose McKinney & Evans LLP
135 North Pennsylvania Street
Suite 2700
Indianapolis, Indiana 46204
Telecopy No.: (317) 684-5173
or to such other person or address as any party shall specify by notice in
writing to the other party. All such notices, requests, demands, waivers and
communications shall be deemed to have been received on the date of delivery or
on the third business day after the mailing thereof, except that any notice of a
change of address shall be effective only upon actual receipt thereof.
SECTION 9.04 Entire Agreement. This Agreement (including the Exhibits
----------------
and other documents referred to herein) constitutes the entire agreement between
the parties and, except as expressly provided herein, supersedes all prior
agreements and understandings, oral and written, between the parties with
respect to the subject matter hereof.
SECTION 9.05 Assignment; Binding Effect; Benefit. Neither this
-----------------------------------
Agreement nor any of the rights, benefits or obligations hereunder may be
assigned by any party or Subsidiary or affiliate of any party without the prior
written consent of the other party; provided, however, that Liberty may, without
-------- -------
such consent, assign its rights under this Agreement to any controlled
Subsidiary or affiliate of Liberty in respect of any Purchased Shares that
Liberty is permitted under any other section of this Agreement to transfer to
such entity. Such assignment shall not relieve Liberty of its obligations
hereunder in the event such assignee fails to perform such obligations. Subject
to the preceding sentence, this Agreement will be binding upon, inure to the
benefit of and be enforceable by the parties and their respective successors and
assigns. Nothing in this Agreement, expressed or implied, is intended to confer
on any person other than the parties or their respective successors and assigns,
any rights, remedies, obligations or liabilities under or by reason of this
Agreement, other than rights conferred upon Indemnified Parties under Article
VII.
25
<PAGE>
SECTION 9.06 Amendment. This Agreement may not be amended except by an
---------
instrument in writing signed on behalf of each of the parties.
SECTION 9.07 Extension; Waiver. Liberty or Emmis may, to the extent
-----------------
legally allowed, (i) extend the time specified herein for the performance of any
of the obligations of the other party, (ii) waive any inaccuracies in the
representations and warranties of the other party contained herein or in any
document delivered pursuant hereto, (iii) waive compliance by the other party
with any of the agreements or covenants of such other party contained herein or
(iv) waive any condition to such waiving party's obligation to consummate the
transactions contemplated hereby or to any of such waiving party's other
obligations hereunder. Any agreement on the part of a party hereto to any such
extension or waiver shall be valid only if set forth in a written instrument
signed on behalf of such party. Any such extension or waiver by any party shall
be binding on such party but not on the other party entitled to the benefits of
the provision of this Agreement affected unless such other party also has agreed
to such extension or waiver. No such waiver shall constitute a waiver of, or
estoppel with respect to, any subsequent or other breach or failure to comply
strictly with the provisions of this Agreement. The failure of any party to
insist on strict compliance with this Agreement or to assert any of its rights
or remedies hereunder or with respect hereto shall not constitute a waiver of
such rights or remedies. Whenever this Agreement requires or permits consent or
approval by any party, such consent or approval shall be effective if given in
writing in a manner consistent with the requirements for a waiver of compliance
as set forth in this Section 8.07.
SECTION 9.08 Interpretation. When a reference is made in this Agreement
--------------
to Sections, Articles or Exhibits, such reference shall be to a Section, Article
or Exhibit (as the case may be) of this Agreement unless otherwise indicated.
When a reference is made in this Agreement to a "party" or "parties", such
reference shall be to a party or parties to this Agreement unless otherwise
indicated. 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". The use of any gender herein shall be deemed to
be or include the other genders and the use of the singular herein shall be
deemed to be or include the plural (and vice versa), wherever appropriate. The
use of the words "hereof", "herein", "hereunder" and words of similar import
shall refer to this entire Agreement, and not to any particular article,
section, subsection, clause, paragraph or other subdivision of this Agreement,
unless the context clearly indicates otherwise.
SECTION 9.09 Counterparts. This Agreement may be executed in
------------
counterparts, each of which shall be deemed to be an original, and all of which
together shall be deemed to be one and the same instrument.
SECTION 9.10 Applicable Law. This Agreement and the legal relations
--------------
between the parties shall be governed by and construed in accordance with the
laws of the State of New York, without regard to the conflict of laws rules
thereof.
26
<PAGE>
SECTION 9.11 Definition of "Subsidiary". As used in this Agreement, a
--------------------------
"Subsidiary" of any party means any corporation or other organization, whether
incorporated or unincorporated, of which (a), in the case of a corporation,
securities or other interests having by their terms ordinary voting power to
elect at least one-half of the board of directors or others performing similar
functions with respect to such corporation are directly or indirectly owned or
controlled by such party, by any one or more of its Subsidiaries, or by such
party and one or more of its Subsidiaries or (b) in the case of any organization
or entity other than a corporation, such party, one or more of its Subsidiaries,
or such party and one or more of its Subsidiaries (x) owns at least one-half of
the equity interests thereof or (y) has the power to elect or direct the
election of at least one-half of the members of the governing body thereof or
otherwise has "control" (within the meaning of Rule 12b-2 under the Securities
Exchange Act of 1934) over such organization or entity.
27
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
LIBERTY MEDIA CORPORATION
By: /s/ Robert R. Bennett
------------------------------
Name: Robert R. Bennett
Title: President
EMMIS COMMUNICATIONS CORPORATION
By: /s/ Jeffrey H. Smulyan
------------------------------
Name: Jeffrey H. Smulyan
Title: Chairman, President and
Chief Executive Officer
28
<PAGE>
EXHIBIT 7(d)
REGISTRATION RIGHTS AGREEMENT
-----------------------------
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made and entered into
as of November 18, 1999, by and between Emmis Communications Corporation, an
Indiana corporation (the "Company") and each of the Investors listed on Schedule
A attached hereto.
1. Certain Definitions. As used in this Agreement, the following terms
-------------------
shall have the following respective meanings:
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and
------------
Friday that is not a day on which banking institutions in The City of
New York or Indianapolis, Indiana are authorized or obligated by law
or executive order to close.
"Commission" means the Securities and Exchange Commission or any other
----------
federal agency at the time administering the Securities Act.
"Common Stock" means the Class A Common Stock of the Company, $.01 par
------------
value per share.
"Demand Registration" means a registration pursuant to Section 2
-------------------
hereof.
"Effectiveness Period" means the period commencing with the one year
--------------------
anniversary of the date hereof and ending on the date that all
Registrable Securities have ceased to be Registrable Securities.
"Initiating Investors" means holders of shares of Common Stock who
--------------------
make a request for registration pursuant to Section 2(a) hereof.
"Investor or Investors" means the Investors listed on Schedule A
---------------------
attached hereto and their permitted successors and assigns pursuant to
Section 9 hereof who hold Registrable Securities.
"Registrable Securities" shall mean (i) the shares of Common Stock of
----------------------
the Company issued to the Investors pursuant to the terms of the Stock
Purchase Agreement dated as of October __, 1999 by and between the
Investors and the Company, and (ii) any other shares of Common Stock
issued to the Investors with respect to such shares of Common Stock
upon any stock dividend, stock split, reclassification,
recapitalization, merger, consolidation or similar event (it being
understood that amounts or percentages of Registrable Securities as of
or on any particular date shall be deemed to refer to amounts or
percentages after giving effect to any such applicable events);
provided, however, that shares of Common Stock of the Company which
-------- -------
are Registrable Securities shall cease to be Registrable Securities
upon the earlier of (A) any sale or transfer in any manner to any
person or entity, including, but not limited to, sales pursuant to a
registration statement, Rule 144(k) sales or otherwise, but excluding
any sale or transfer in connection with which the rights of the
Investors hereunder are assignable pursuant to Section 9 or (B) such
shares are saleable by the holder thereof pursuant to Rule 144(k) (or
any successor provision) under the Securities Act, or (C) twelve (12)
months after the date of dissolution of the Investor listed on
Schedule A attached hereto who originally owned the Common Stock
(including Common Stock issued upon any stock dividend, stock split or
similar event), except in the case of this clause (C) for Registrable
Securities transferred to an Investor listed on Schedule A attached
hereto as a result of the dissolution of such an Investor, which shall
remain Registrable Securities notwithstanding such dissolution.
<PAGE>
The terms "register," "registered" and "registration" refer to a
-------- ---------- ------------
registration effected by preparing and filing a registration statement
in compliance with the Securities Act, and the declaration or ordering
of the effectiveness of such registration statement.
"Registration Expenses" means all expenses, other than Selling
---------------------
Expenses (as defined below), incurred by the Company in complying with
this Agreement, including, without limitation, all registration,
qualification and filing fees, printing expenses, escrow fees, fees
and disbursements of counsel for the Company, blue sky fees and
expenses if any, and the expense of any special audits incident to or
required by any such registration.
"Securities Act" means the Securities Act of 1933, as amended, or any
--------------
similar federal statute and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time.
"Selling Expenses" means all underwriting discounts, selling
----------------
commissions and stock transfer taxes applicable to the securities
registered by the Investors and all fees and disbursements of counsel
for the Investors.
2. Demand Registration.
-------------------
(a) Request for Registration. In case the Company shall receive during
------------------------
the Effectiveness Period a written request from the Initiating Investors that
the Company effect any registration, qualification or compliance with respect to
Registrable Securities under the Securities Act, the Company will, as soon as
practicable but in no event more than 30 days from receipt by the Company of
such written request, use its reasonable best efforts to effect such
registration, qualification or compliance (including, without limitation,
appropriate qualification under applicable (if any) blue sky or other state
securities laws and appropriate compliance with applicable regulations issued
under the Securities Act and any other governmental requirements or regulations)
as may be so requested and as would permit or facilitate the sale and
distribution of all or such portion of such Registrable Securities as are
specified in such request; provided, however, that the Company shall not be
obligated to effect any such registration, qualification or compliance pursuant
to this Section 2:
(A) In any particular jurisdiction in which the Company would be
required to execute a general consent to service of process in effecting such
registration, qualification or compliance unless the Company is already subject
to service in such jurisdiction and except as may be required by the Securities
Act, nor in any jurisdiction in which the Company would be required to subject
itself to taxation by such act;
(B) After the Company has already effected a total of two such
registrations under the Securities Act pursuant to Section 2(a), with it being
understood that such registrations have been declared or ordered effective;
(C) During the period starting with the date 10 days prior to the
Company's estimated date of filing of any registration statement or preliminary
or final prospectus supplement (other than a registration of securities in a
Rule 145 transaction or with respect to an employee benefit plan or with respect
to a dividend reinvestment or direct stock purchase plan (DRIP) or with respect
to which Section 3(a) applies), and continuing up to the earlier of (x) 90 days
immediately following the effective date of any such registration statement
pertaining to securities of the Company, (y) the date when the Common Stock is
trading at an average (for the trailing 20 trading days) of 110% of the offering
price for such registration statement, and (z) the expiration of any lock-up
periods to which the Company is subject in an underwritten offering, provided
that the Company is actively employing in good faith all reasonable efforts to
cause any such registration statement to become effective;
(D) If the Company shall furnish to the Initiating Investors a
certificate signed by the Chief Executive Officer of the Company stating that in
the good faith judgment of the Board of Directors the Company is in possession
of material non-public information (including, but not limited to, information
regarding a contemplated debt
-2-
<PAGE>
or equity financing), disclosure of which would cause a serious detrimental
effect to the Company or its shareholders if a registration statement were filed
in the near future, then the Company's obligation to use its reasonable best
efforts to register, qualify or comply under this Section 2(a) shall be deferred
for a period not to exceed 45 days; provided, however, that in no event may the
-------- -------
Company delay a registration pursuant to this Section 2(E) more than once in any
twelve (12) month period;
Subject to the foregoing clauses (A) through (D), the Company shall
give prompt written notice (the "Notice of Demand Request") of the Initiating
Investors' request to all Investors and, thereupon, the Company shall, as
expeditiously as possible, use its reasonable best efforts to effect the
registration under the Securities Act of (i) the Registrable Securities which
the Company has been so requested to register in the registration request, for
disposition in accordance with the intended method of disposition stated in the
registration statement and (ii) all other Registrable Securities the holders of
which shall have made a written request to the Company for registration thereof
within 30 days after the giving of the Notice of Demand Request, all to the
extent necessary to permit the sale or other disposition by the holders of the
securities to be registered. Whenever a requested registration is for a firmly
underwritten offering, if the managing underwriter for such offering determines
that the number of shares of Common Stock requested to be included that are to
be sold by Investors is limited due to market conditions, any shares of Common
Stock requested to be included by shareholders other than the Investors shall be
excluded and, if the number of shares of Common Stock must be further reduced,
the Investors proposing to sell their Registrable Securities in such
underwriting and registration shall share pro rata in the available portion of
the registration statement in question, such sharing to be based upon the number
of Registrable Securities then held by such Investors, respectively.
(b) Form of Registration. The Company shall be entitled to use a Form S-3
--------------------
or any similar short form registration statement for a Demand Registration if
the Company is eligible to use such a form. Notwithstanding anything to the
contrary herein, if at any time the Company is not eligible to use a Form S-3 or
any similar short form registration statement for any reason, any references in
this Agreement to registrations on Form S-3 or any similar short form
registration statement shall be deemed to be references to registrations on Form
S-1 or any similar long form registration statement which the Company is then
eligible to use.
3. Company Registration.
--------------------
(a) Notice of Registration. If at any time or from time to time the
----------------------
Company shall determine to register any of its Common Stock, either for its own
account or the account of a security holder or holders (including but not
limited to registration of the sale of Common Stock which will be automatically
converted from Class B Common Stock, $.01 par value per share, upon sale), other
than (A) a registration relating solely to employee benefit plans, (B) a
registration relating solely to a Commission Rule 145 transaction, (C) a
registration relating to a dividend reinvestment or direct stock purchase plan
or (D) a shelf registration of multiple classes of securities for sale on a
delayed basis pursuant to Rule 415 under the Securities Act, or any subsequent
sale therefrom, the Company will:
(i) promptly give to the Investors written notice thereof; and
(ii) include in such registration (and any related qualification under
blue sky laws or other compliance), and in any underwriting involved therein,
all the Registrable Securities specified in a written request or requests, made
within 14 days after receipt of such written notice from the Company, by the
Investors; provided, however, if any registration pursuant to this Section 3
involves an underwritten offering and the managing underwriter shall advise the
Company that, in its view, the number of securities requested to be included in
such registration exceeds the number that can be sold in an orderly manner in
such offering within a price range acceptable to the Company, the Company shall
include in such offering first, all the securities the Company proposes to
register for its own account, and second, the Registrable Securities and
securities to be sold for the account of other security holders, with each
Investor or other security holder proposing to sell Registrable Securities or
other securities participating in such registration on a pro rata basis, such
participation to be based upon the number of Registrable Securities or other
securities then held by such Investors or other security holders, respectively.
-3-
<PAGE>
(b) Right to Terminate Registration. The Company shall have the right to
-------------------------------
terminate or withdraw any registration initiated by it under this Section 3
prior to the effectiveness of such registration whether or not the Investors
have elected to include Registrable Securities in such registration. Each
Investor who holds Registrable Securities included in the registration agrees
that, upon receipt of notice from the Company that the Company has determined to
withdraw any registration statement pursuant to this subsection, such Investor
will discontinue its disposition of securities pursuant to such registration
statement and, if so directed by the Company, will deliver to the Company (at
the Company's expense) all copies, other than permanent file copies, then in
such Investor's possession of the prospectus covering securities which was in
effect at the time of such notice.
4. Limitations on Subsequent Registration Rights. From and after the
---------------------------------------------
date hereof, the Company shall not enter into any agreement granting any holder
or prospective holder of any securities of the Company registration rights with
respect to such securities that would allow such holder or prospective holder to
include such securities in any registration filed under Section 2 hereof, unless
under the terms of such agreement, such holder or prospective holder may include
such securities in any such registration only to the extent that the inclusion
of its securities will not reduce the amount of the Registrable Securities of
the Investors which is included.
5. Expenses of Registration. All Registration Expenses incurred in
------------------------
connection with all registrations shall be borne by the Company, except to the
extent that the Initiating Investors alone, but not the Company, initiate the
request that a Demand Registration be withdrawn prior to its effectiveness, and
if the Initiating Investors elect not to have such withdrawn registration
counted as a Demand Registration requested under Section 2 in which case all
Registration Expenses incurred in connection with that registration shall be
borne by the Initiating Investors on a pro rata basis. All Selling Expenses
relating to securities registered on behalf of the Investors shall be borne by
the Investors.
6. Registration Procedures. In the case of each registration,
-----------------------
qualification or compliance effected by the Company pursuant to a request under
Section 2(a) or 3(a) of this Agreement, the Company will keep the Investors
advised in writing as to the initiation of each registration, qualification and
compliance and as to the completion thereof. The Company will use its reasonable
best efforts to effect the registration and the sale of such Registrable
Securities in accordance with the intended method of disposition thereof and
pursuant thereto the Company will as expeditiously as possible:
(a) prepare and file with the Commission a registration statement with
respect to such Registrable Securities and use its reasonable best efforts to
cause such registration statement to become effective (provided that before
filing a Demand Registration statement or prospectus or any amendments or
supplements thereto, the Company will furnish to the counsel selected by the
Initiating Investors copies of all such documents proposed to be filed);
(b) in the case of a Demand Registration, prepare and file with the
Commission such amendments and post-effective amendments and supplements to such
registration statement and the prospectus used in connection therewith as may be
necessary to keep such registration statement effective for a period of not less
than 120 days, and comply with the provisions of the Securities Act with respect
to the disposition of all securities covered by such registration statement
during such period in accordance with the intended methods of disposition by the
sellers thereof set forth in such registration statement;
(c) during the period in which the Company is required under the provisions
hereof to keep a registration statement effective, furnish to the seller of
Registrable Securities such number of copies of such registration statement,
each amendment and supplement thereto, the prospectus included in such
registration statement (including each preliminary prospectus) and such other
documents as such seller may reasonably request in order to facilitate the
disposition of the Registrable Securities owned by such seller;
(d) subject to Section 2(a)(A) - (D) herein, use its reasonable best
efforts to register or qualify such Registrable Securities under any applicable
securities or blue sky laws of such jurisdictions as any seller reasonably
-4-
<PAGE>
requests and do any and all other acts and things which may be reasonably
necessary or advisable to enable such seller to consummate the disposition in
such jurisdictions of the Registrable Securities owned by such seller;
(e) notify the seller of such Registrable Securities, any time the Company
becomes aware a prospectus relating thereto is required to be delivered under
the Securities Act, of the happening of any event as a result of which the
prospectus included in such registration statement contains an untrue statement
of a material fact or omits any fact necessary to make the statements therein
not misleading, and, subject to the rights of the Company to suspend or delay
sales stated elsewhere in this Agreement, at the request of such seller, the
Company will prepare a supplement or amendment to such prospectus so that, as
thereafter delivered to the purchasers of such Registrable Securities, such
prospectus will not contain an untrue statement of a material fact or omit to
state any fact necessary to make the statements therein not misleading;
(f) use its reasonable best efforts to cause all such Registrable
Securities to be listed on each securities exchange on which similar securities
issued by the Company are then listed and, if not so listed, to be listed on the
NASD automated quotation system and, if listed on the NASD automated quotation
system, use its reasonable best efforts to secure designation of all such
Registrable Securities covered by such registration statement as a Nasdaq
National Market System Security within the meaning of Rule 11Aa2-1 of the
Commission or, failing that, use its best efforts to secure Nasdaq authorization
for such Registrable Securities;
(g) provide a transfer agent and registrar for all such Registrable
Securities not later than the effective date of such registration statement;
(h) enter into such customary agreements (including underwriting agreements
in customary form with underwriters selected, in the case of a registration
under Section 2, by the Initiating Investors subject to the Company's reasonable
approval, not to be unreasonably withheld) and take all such other actions as
the holders of a majority of the Registrable Securities being sold or the
underwriters, if any, reasonably request in order to expedite or facilitate the
disposition of such Registrable Securities (including, without limitation, (i)
not effecting any public sale or distribution of its equity securities, or any
securities convertible into or exchangeable or exercisable for such securities,
during a period customary for such agreements of no more than seven days prior
to and no more than 90 days following the effective date of any underwritten
registration (except as part of such underwritten registration or pursuant to
registrations on Form S-8 or any successor form or registrations involving
dividend reinvestment or direct share purchase plans), unless the underwriters
managing the registered public offering otherwise agree, and (ii) using its
reasonable efforts to cause each executive officer and director to agree not to
effect any public sale or distribution (excluding sales pursuant to Rule 144) of
any such securities during such period (except as part of such underwritten
registration, if otherwise permitted), unless the underwriters managing the
registered public offering otherwise agree);
(i) upon receipt and execution of such confidentiality agreements as the
Company may reasonably request from parties who are not otherwise subject to
confidentiality obligations because of the nature of their profession (e.g.,
underwriters, attorneys and accountants), make available for inspection by the
seller of Registrable Securities, any underwriter participating in any
disposition pursuant to such registration statement and any attorney, accountant
or other agent retained by any such seller or underwriter, all financial and
other records, pertinent corporate documents and properties of the Company, and
cause the Company's officers, directors, employees and independent accountants
to supply all information reasonably requested by any such seller, underwriter,
attorney, accountant or agent in connection with such registration statement
(including, without limitation, accountants' "cold comfort" letters and opinions
of counsel);
(j) otherwise use its reasonable best efforts to comply with all applicable
rules and regulations of the Commission, and make available to its security
holders, as soon as reasonably practicable, an earnings statement covering the
period of at least 12 months beginning with the first day of the Company's first
full calendar quarter after the effective date of the registration statement,
which earnings statement shall satisfy the provisions of Section 11(a) of the
Securities Act and Rule 158 thereunder;
-5-
<PAGE>
(k) in the event of the issuance of any stop order suspending the
effectiveness of a registration statement, or of any order suspending or
preventing the use of any related prospectus or suspending the qualification of
any common stock included in such registration statement for sale in any
jurisdiction, the Company will use its reasonable best efforts promptly to
obtain the withdrawal of such order;
(l) if the disposition of the Registrable Securities is pursuant to an
underwritten offering, cause the appropriate officers, underwriters and advisors
of the Company to meet with the investors whose Common Stock is registered for
resale thereunder.
7. Indemnification.
---------------
(a) The Company agrees to indemnify, to the extent permitted by law, each
holder of Registrable Securities, its officers and directors and each person who
controls such holder (within the meaning of the Securities Act) against all
losses, claims, damages, liabilities and expenses arising out of or based upon
any untrue or alleged untrue statement of material fact contained in any
registration statement, prospectus or preliminary prospectus or any amendment
thereof or supplement thereto or any omission or alleged omission of a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading, except
insofar as losses, claims, damages, liabilities or expenses are caused by
written information supplied by or on behalf of such holder specifically for use
in the preparation of such registration statement, prospectus or preliminary
prospectus relating to such holder's ownership of Registrable Securities or by
such holder's failure to deliver a copy of the registration statement or
prospectus or any amendments or supplements thereto after the Company has
furnished such holder with the number of copies of the same reasonably requested
by such holder.
(b) In connection with any registration statement in which a holder of
Registrable Securities is participating, each such holder will furnish to the
Company in writing such information and affidavits relating to such holder's
ownership of Registrable Securities or as otherwise required under the
Securities Act as the Company reasonably requests for use in connection with any
such registration statement or prospectus and, to the extent permitted by law,
will indemnify the Company, its directors and officers and each person who
controls the Company (within the meaning of the Securities Act) against any
losses, claims, damages, liabilities and expenses resulting from any untrue or
alleged untrue statement of material fact contained in the registration
statement, prospectus or preliminary prospectus or any amendment thereof or
supplement thereto or any omission or alleged omission of a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading, but only
to the extent that such untrue statement or omission is contained in any
information or affidavit so furnished in writing by such holder which was
expressly provided for use in such registration statement and was included in
such registration statement in reliance on and in conformity with such written
information or affidavit.
(c) Any person entitled to indemnification hereunder will (i) give prompt
written notice to the indemnifying party of any claim with respect to which it
seeks indemnification and (ii) unless in such indemnified party's reasonable
judgment a conflict of interest between such indemnified and indemnifying
parties may exist with respect to such claim, permit such indemnifying party to
assume the defense of such claim with counsel reasonably satisfactory to the
indemnified party. If such defense is assumed or not defended because of a
conflict of interest pursuant to clause (ii) of the preceding sentence, the
indemnifying party will not be subject to any liability for any settlement made
by the indemnified party without its consent (but such consent will not be
unreasonably withheld). An indemnifying party who is not entitled to, or elects
not to, assume the defense of a claim will not be obligated to pay the fees and
expenses of more than one counsel for all parties indemnified by such
indemnifying party with respect to such claim, unless (A) in the reasonable
judgment of any indemnified party a conflict of interest may exist between such
indemnified party and any other of such indemnified parties with respect to such
claim or (B) such counsel is not admitted to practice in a jurisdiction where an
action is pending, in which case the indemnified parties shall pay the fees and
expenses of one additional firm of attorneys to act as local counsel in such
jurisdiction.
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<PAGE>
(d) The indemnification provided for under this Agreement will remain in
full force and effect regardless of any investigation made by or on behalf of
the indemnified party or any officer, director or controlling person of such
indemnified party and will survive the transfer of securities. If recovery is
not available under the foregoing indemnification provisions, for any reason
other than as specified therein, the parties entitled to indemnification by the
terms thereof shall be entitled to contribution for any and all losses, claims,
damages or liabilities, joint or several, and expenses to which they may become
subject, in such proportion as is appropriate to reflect the relative fault of
the parties entitled to indemnification, on the one hand, and the indemnifying
parties, on the other, in connection with the matter out of which such losses,
claims, damages, liabilities or expenses arise or result from. In determining
the amount of contribution to which the respective parties are entitled, there
shall be considered the parties' relative knowledge and access to information
concerning the matter with respect to which the claim was asserted, the
opportunity to correct and prevent any statement or omission, and any other
equitable considerations appropriate under the circumstances.
8. Rule 144 Reporting. With a view to making available the benefits of
------------------
certain rules and regulations of the Commission which may at any time permit the
sale of the Restricted Securities to the public without registration, for so
long as any Investor owns Registrable Securities, the Company agrees to use its
reasonable best efforts to:
(a) Make and keep public information available, as those terms are
understood and defined in Rule 144 under the Securities Act, at all times
hereafter.
(b) File with the Commission in a timely manner all reports and other
documents required of the Company under the Securities Act and the Securities
Exchange Act of 1934, as amended.
(c) So long as any Investor owns any Registrable Securities, to furnish to
such Investor forthwith upon request a written statement by the Company as to
its compliance with the reporting requirements of Rule 144 and of the Securities
Act and the Securities Exchange Act of 1934, and a copy of the most recent
annual or quarterly report of the Company.
9. Transfer of Registration Rights. Subject to the termination
-------------------------------
provisions of Section 10 and the definition of "Registrable Securities," the
rights granted to the Investors hereunder may be assigned, in connection with
any transfer or assignment of Registrable Securities by an Investor, to any
affiliate of the assigning Investor.
10. Termination of Registration Rights. The Company's obligations
----------------------------------
pursuant to Sections 2, 3 and 4 shall expire when (i) all Registrable
Securities held by the Investors or any assignee have been sold or transferred
in any manner to any person or entity, including, but not limited to, sales
pursuant to a registration statement, Rule 144 sales or otherwise, but excluding
any sale or transfer in connection with which the rights of any Investor
hereunder are assigned pursuant to Section 9, or (ii) all Registrable Securities
have ceased to be Registrable Securities, whichever first occurs.
11. Confidentiality. Each Investor hereby agrees that it shall maintain
---------------
in confidence, and shall not use or disclose without the prior written consent
of the Company, any information identified as confidential that is furnished to
it by the Company in connection with this Agreement, including (without
limitation) all financial statements, budget and other information delivered or
provided to such Investor. This obligation of confidentiality shall not apply,
however, to any information (a) in the public domain through no unauthorized act
or failure to act by such Investor, (b) lawfully disclosed to such Investor by a
third party who possessed such information without any obligation of
confidentiality, or (c) known previously by such Investor or lawfully developed
by such Investor independent of any disclosure by the Company. Each Investor
further agrees that it shall return to the Company or destroy all tangible
materials containing such information upon request by the Company.
12. Miscellaneous.
-------------
-7-
<PAGE>
(a) Governing Law. This Agreement shall be governed in all respects by the
-------------
internal laws of the State of Indiana.
(b) Survival. The representations, warranties, covenants and agreements
--------
made herein shall survive any investigation made by the Investors and the
closing of the transactions contemplated hereby.
(c) Successors and Assigns. The provisions hereof shall inure to the
----------------------
benefit of, and be binding upon, the successors, permitted assigns, heirs,
executors and administrators of the parties hereto, including as specifically
provided by Section 10 hereof.
(d) Entire Agreement; Amendment. This Agreement and its attachments
---------------------------
constitute the full and entire understanding and agreement between the parties
with regard to the subject hereof. Except as expressly provided herein, neither
this Agreement nor any term hereof may be amended, waived, discharged or
terminated other than by a written instrument signed by the Company and
Investors holding at least 67% of the Registrable Securities.
(e) Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which shall be enforceable against the parties actually
executing such counterparts, and all of which together shall constitute one
instrument.
(f) Severability. In the event that any provision of this Agreement
------------
becomes or is declared by a court of competent jurisdiction to be illegal,
unenforceable or void, this Agreement shall continue in full force and effect
without said provision; provided that no such severability shall be effective if
it materially changes the economic benefit of this Agreement to any party.
(g) Titles and Subtitles. The titles and subtitles used in this Agreement
--------------------
are used for convenience only and are not considered in construing or
interpreting this Agreement.
-8-
<PAGE>
IN WITNESS WHEREOF, the parties below have executed this Agreement all as
of the date first written above.
EMMIS COMMUNICATIONS CORPORATION
By: /s/ Jeffrey H. Smulyan
-----------------------------------------------
Jeffrey H. Smulyan
Chairman, President and Chief Executive Officer
LIBERTY MEDIA CORPORATION
By: /s/ Vivian J. Carr
-----------------------------------------------
Vivian J. Carr
Vice President
-9-
<PAGE>
SCHEDULE A
SCHEDULE OF INVESTORS
Liberty Media Corporation or its assignee as permitted under Section 8.05 of the
Stock Purchase Agreement dated as of October 25, 1999 between Liberty Media
Corporation and Emmis Communications Corporation
-10-
<PAGE>
EXHIBIT 7(e)
EMMIS COMMUNICATIONS CORPORATION
One Emmis Plaza, 7/th/ Floor
40 Monument Circle
Indianapolis, Indiana 46204
October 24, 1999
Liberty Media Corporation
9197 South Peoria Street
Englewood, Colorado 80112
Gentlemen:
In connection with your purchase of shares of the Class A Common Stock (as such
amount may be adjusted for stock splits, share dividends, recapitalizations or
similar transactions, the "Purchased Shares") of Emmis Communications
Corporation ("Emmis") pursuant to a Stock Purchase Agreement dated as of October
25, 1999 (the "Purchase Agreement"), I agree to enter into a Shareholders'
Agreement with you providing you with Tag-Along Rights on generally the
following terms and conditions:
(1) Applicability. The Tag-Along Rights will become first exercisable by you
-------------
with respect to each transfer of Emmis common stock by me or my affiliates
after which my beneficial ownership of Emmis common stock (both Class A
Common Stock and Class B Common Stock), together with the beneficial
ownership of Emmis common stock by my affiliates (including for the purpose
of our agreement, but not limited to, Emmis common stock over which I
exercise voting control and with respect to which I bear the economic risk
of ownership) (in the aggregate, the "Smulyan Shares"), is less than 33% of
the amount of the Smulyan Shares immediately following the closing of the
pending public offering of Emmis Class A Common Stock (or, if such offering
does not occur, less than 33% of the amount of Smulyan Shares on the date
hereof), adjusted appropriately for any stock splits, share dividends or
recapitalizations.
(2) Tag-Along Rights. In any transaction with respect to which the Tag-Along
----------------
Rights are exercisable, I will give you the opportunity to participate in
the transfer in the following manner:
(A) I will give you written notice of the proposed transfer, specifying the
number or amount of shares to be transferred, the proposed price, the
identity of the proposed transferee or transferees and any other
material terms of the proposed transfer.
(B) Within 30 days after your receipt of my notice of proposed transfer, you
have the right, exercisable by written notice to me, to require me to
include in the proposed transfer a pro rata portion of your Purchased
Shares on the same terms contained in my notice to you of the proposed
transfer. The amount of Emmis common stock you are permitted to include
in the proposed transfer will be up to that fraction of the total
<PAGE>
Liberty Media Corporation
October 24,1999
Page 2
number of shares of Emmis common stock which the proposed transferee is
willing to purchase (including any shares to be transferred by you
pursuant to the Tag-Along Rights) which is equal to a fraction, the
numerator of which is the number of Purchased Shares owned by you
immediately prior to closing of the proposed transfer and the denominator
of which is the sum immediately prior to the closing of the proposed
transfer of the Smulyan Shares and the Purchased Shares still owned by
you.
(3) Exceptions. The Tag-Along Rights will not be exercisable by you in respect
----------
of (i) any transfer by me to an affiliate or a transfer by an affiliate to
me, or (ii) a bona fide pledge of Emmis common stock as security for
indebtedness owed to the pledgee (although a transfer of ownership of such
pledged Emmis common stock pursuant to enforcement of the pledge will be
subject to the Tag-Along Rights).
(4) Limited Assignment. You may not assign the Tag-Along Rights to any person
------------------
or entity other than your affiliate in connection with a transfer to such
affiliate of Purchased Shares. The Tag-Along Rights will not be enforceable
at any time by or on behalf of any person or entity that holds any of the
Purchased Shares other than you or a person or entity that at such time is
your affiliate.
(5) Termination. All Tag-Along Rights will terminate at such time as you and
-----------
your affiliates cease to own at least 1,400,000 Emmis common shares,
adjusted appropriately for any stock splits, share dividends or
recapitalizations.
(6) Assignment. The Tag-Along Rights provided herein may be assigned to (i)
----------
any controlled Subsidiary (as such term is defined in the Purchase
Agreement) of Liberty in respect of any Purchased Shares transferred by
Liberty to such controlled Subsidiary and (ii) any affiliate of Liberty in
respect of Purchased Shares transferred by Liberty to such affiliate,
provided, however, that in the case of clause (ii), such Tag-Along Rights
-------- -------
shall not apply to any Purchased Shares held by such affiliate which are in
excess of one-third of the aggregate Purchased Shares issued under the
Purchase Agreement (as such number may be appropriately adjusted to reflect
stock splits, stock dividends, reclassifications and similar transactions).
It is contemplated that the terms of the Tag-Along Rights will be contained in a
definitive Shareholders' Agreement to be negotiated and entered into by us.
Notwithstanding the foregoing, each of us expressly acknowledges that this
letter agreement will constitute a binding agreement between us, subject to the
terms and conditions set forth herein, until a definitive Shareholders'
Agreement is executed and delivered, and if such definitive Shareholders'
Agreement is not executed and delivered by December 15, 1999, then this letter
agreement shall constitute the entire agreement between us concerning the
subject matter contained herein. Once we have entered into the definitive
Shareholders' Agreement, it will supersede this letter agreement as to all
aspects of the Tag-Along Rights.
<PAGE>
Liberty Media Corporation
October 24,1999
Page 3
If you are in agreement with the terms set forth in this letter, please sign
this letter in the space below, at which time this letter will constitute a
binding agreement between us.
Very truly yours,
By: /s/ Jeffrey H. Smulyan
----------------------
Jeffrey H. Smulyan
ACCEPTED AND AGREED.
LIBERTY MEDIA CORPORATION
By: /s/ Robert R. Bennett
---------------------
Robert R. Bennett
Its: President
