<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Schedule 13D
Under the Securities Exchange Act of 1934
(Amendment No. 2)*
INTERNATIONAL FAMILY ENTERTAINMENT, INC.
------------------------------------------
(Name of Issuer)
Class B Common Stock, $.01 par value
-------------------------------------
(Title of Class of Securities)
45950M106
-----------------
(CUSIP Number)
Stephen M. Brett, Esq., Executive Vice President and
General Counsel,
Tele-Communications, Inc.
Terrace Tower II, 5619 DTC Parkway, Englewood, CO 80111, (303-267-5500)
-----------------------------------------------------------------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
JUNE 11, 1997
---------------
(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 which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b) (3) or (4), check the following box: [ ].
NOTE: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are to
be sent.
*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
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).
Exhibit Index is on Page 13
<PAGE> 2
<TABLE>
<S> <C>
- ---------------------------------------------------------------------------------------------------------------
(1) Names of Reporting Persons S.S. or I.R.S. Identification Nos. of Above Persons
TELE-COMMUNICATIONS, INC.
- ---------------------------------------------------------------------------------------------------------------
(2) Check the Appropriate Box if a Member of a Group
(a) [ ]
(b) [ ]
- ---------------------------------------------------------------------------------------------------------------
(3) SEC Use Only
- ---------------------------------------------------------------------------------------------------------------
(4) Source of Funds
AF,OO
- ---------------------------------------------------------------------------------------------------------------
(5) Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e)
[ ]
- ---------------------------------------------------------------------------------------------------------------
(6) Citizenship or Place of Organization
Delaware
- ---------------------------------------------------------------------------------------------------------------
Number of (7) Sole Voting Power 9,676,232 Shares of Class B Stock*
Shares Bene-
ficially -------------------------------------------------------------------------------------
Owned by (8) Shared Voting Power 0 Shares
Each Report-
-------------------------------------------------------------------------------------
(9) Sole Dispositive Power 9,676,232 Shares of Class B Stock*
ing Person -------------------------------------------------------------------------------------
With (10) Shared Dispositive Power 0 Shares
- ---------------------------------------------------------------------------------------------------------------
(11) Aggregate Amount Beneficially Owned by Each Reporting Person
9,676,232 Shares of Class B Stock*
- ---------------------------------------------------------------------------------------------------------------
(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares [ ]
- ---------------------------------------------------------------------------------------------------------------
(13) Percent of Class Represented by Amount in Row (11)
22.8%
- ---------------------------------------------------------------------------------------------------------------
(14) Type of Reporting Person
HC, CO
</TABLE>
__________________________________
* Includes 7,088,732 shares of Class B Stock TCI would acquire upon
conversion of 7,088,732 shares of Class C Common Stock and 2,587,500 shares of
Class B Common Stock TCI would acquire upon conversion of $23,000,000 principal
amount of 6% Convertible Secured Notes due 2004.
2
<PAGE> 3
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
(Amendment No. 2)
Statement of
TELE-COMMUNICATIONS, INC.
Pursuant to Section 13(d) of the
Securities Exchange Act of 1934
in respect of
INTERNATIONAL FAMILY ENTERTAINMENT, INC.
(Commission File No. 1-11121)
ITEM 1. Security and Issuer
Tele-Communications, Inc., a Delaware corporation ("TCI"),
hereby amends and supplements its Statement on Schedule 13D (the "Statement")
with respect to the Class B Common Stock, $.01 par value (the "Class B Stock"),
of International Family Entertainment, Inc., a Delaware corporation ("IFE").
TCI is the beneficial owner of certain IFE securities convertible into shares
of Class B Stock and has entered into an agreement to exchange such IFE
securities for a newly issued class of preferred stock of Fox Kids Worldwide,
Inc., a Delaware corporation ("Fox Kids"). (See Items 3, 4 and 7). In
addition, pursuant to Rule 13d-2(c) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), this Amendment No. 2 also restates the Statement
and the previously filed amendment to the Statement.
The principal executive offices of IFE are located at 2877
Guardian Lane, Virginia Beach, Virginia 23452. Unless otherwise indicated,
capitalized terms used but not defined herein shall have the meanings assigned
to such terms in the Statement.
Holders of Class B Stock are entitled to one vote per share on
all matters submitted to a vote of stockholders, and holders of the Class A
Common Stock of IFE, $.01 par value (the "Class A Stock") are entitled to ten
votes per share on all matters submitted to a vote of stockholders. Both
classes vote together as a single class on all matters, except that (i) so long
as the outstanding Class A Stock has more than 40% of the total outstanding
voting power of the common stock of IFE, the holders of Class A Stock, voting
separately as a class, are entitled to elect a majority of the IFE's directors
(currently three of five directors), with the remainder of the directors being
elected by the holders of the Class B Stock, voting separately as a class, and
(ii) the approval of a majority of each of the Class A Stock and the Class B
Stock is required for certain extraordinary corporate actions.
ITEM 2. Identity and Background
This Amendment No. 2 is being filed by TCI, whose principal
business address is 5619 DTC Parkway, Englewood, Colorado 80111.
TCI, through its subsidiaries and affiliates, is principally
engaged in the construction, acquisition, ownership, and operation of cable
television systems and the provision of satellite-delivered video
entertainment, information and home shopping programming services to various
video distribution media, principally cable television systems. TCI also has
investments in cable and telecommunications
3
<PAGE> 4
operations and television programming in certain international markets as well
as investments in companies and joint ventures involved in developing and
providing programming for new television and telecommunications technologies.
TCI is a Delaware corporation and was incorporated in 1994. TCI
Communications, Inc. ("TCIC"), a majority owned subsidiary of TCI, and its
predecessors have been engaged in the cable television business since the early
1950's. Prior to August 1994, TCI was named TCI/Liberty Holding Company and
TCIC was named Tele-Communications, Inc.
Schedule 1 attached to this Amendment No. 2 to the Statement
contains the following information concerning each director, executive officer
or controlling person of TCI: (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 and replaces the
Schedule previously filed with the Statement.
To the knowledge of TCI, each of the persons named on Schedule
1 (the "Schedule 1 Persons") is a United States citizen. During the last five
years, neither TCI nor any of the Schedule 1 Persons (to the knowledge of TCI)
has been convicted in a criminal proceeding (excluding traffic violations or
similar misdemeanors). During the last five years, neither TCI nor any of the
Schedule 1 Persons (to the knowledge of TCI) 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.
August 1994 Business Combination
On August 4, 1994, at Special Meetings of Stockholders of TCIC
and Liberty Media Corporation ("LMC"), there was approved and adopted an
Agreement and Plan of Merger, dated as of January 27, 1994, as amended, which
provided for, among other things, the business combination of TCIC and LMC
resulting in the companies becoming wholly owned subsidiaries of TCI (the
"Business Combination"). The Business Combination became effective on August
4, 1994, upon certain filings with state authorities. Upon the effectiveness
of the Business Combination, TCI became the beneficial owner of all the Class B
Stock owned by LMC.
The foregoing summary of the Business Combination is qualified
in its entirety by reference to the complete terms, provisions and conditions
thereof set forth in the Proxy Statement of LMC and TCIC and the Prospectus of
TCI filed on June 23, 1994 (the "Proxy Statement/Prospectus") by such parties
as part of a Registration Statement on Form S-4 (No. 33-54263). The
Registration Statement and Proxy Statement/Prospectus are incorporated herein
by reference and were so filed herewith as Exhibit A in the original Statement.
ITEM 3. Source and Amount of Funds or Other Consideration
TCI currently beneficially owns, indirectly through a
subsidiary, a total of 9,676,232 shares of Class B Stock. Such beneficial
ownership is comprised of (a) 7,088,732 shares of Class B Stock issuable upon
conversion of 7,088,732 shares of IFE non-voting Class C Common Stock, $.01 par
value (the "Class C Stock"); and (b) 2,587,500 shares of Class B Stock issuable
upon conversion of $23,000,000 aggregate principal amount of IFE's 6%
Convertible Secured Notes due 2004 (the "Notes"). TCI acquired the Class C
Stock and the Notes as a result of previously reported transactions. The
information set forth below describes the previously reported transactions and
states the source and amount of the consideration used in the transactions. As
described in Items 4 and 6 below, TCI is filing this Amendment No. 2 to the
Statement because it has entered into a Contribution and Exchange Agreement,
dated as of June 11, 1997 (the "Agreement"), through its subsidiary Liberty
Media Corporation, a Delaware corporation ("LMC"), and
4
<PAGE> 5
Liberty IFE, Inc., a Colorado corporation and a wholly owned subsidiary of LMC
("LIFE"), with Fox Kids. Under and subject to the terms of the Agreement, TCI
will exchange its beneficial ownership of the Class C Stock and the Notes for
shares of Fox Kids Series A Preferred Stock, with an initial liquidation
preference of $345,000,000 (the "Preferred Stock"). TCI did not pay any new
consideration in connection with the Agreement.
Acquisition Pursuant to the Business Combination
In connection with the Business Combination described in Item
2 above, TCI acquired beneficial ownership of 7,040,986 shares of the Class B
Stock. The consideration for the acquisition of such Class B Stock was the
consideration given in the Business Combination which is described in the Proxy
Statement/Prospectus under the heading "THE MERGER AGREEMENT--Consideration to
be Received in the Mergers".
December 1995 Stock Exchange
Effective December 15, 1995, as part of a plan of
reorganization adopted by IFE, LIFE exchanged 220,000 shares of 10% Convertible
Cumulative Preferred Stock of IFE, $.001 par value, and all accrued dividends
thereon accruing or becoming payable after January 1, 1995, for 4,000,000
shares of Class B Stock. Immediately following such exchange, LIFE exchanged
5,670,986 shares of IFE Class B Stock (including said 4,000,000 shares) for
5,670,986 shares of Class C Stock. TCI did not pay any new consideration in
connection with these exchanges. In connection with the reorganization, the
shareholders of IFE, including LIFE, entered into an Amended and Restated
Shareholder Agreement dated as of September 1, 1995 (the "Shareholder
Agreement"). See Items 4 and 6 below.
December 1995 Stock Split
IFE effected a 5 for 4 stock split for stockholders of record
on December 15, 1995. Each stockholder of Common Stock received a 25% stock
dividend. The terms of the Class C Stock provide for an adjustment in the
number of shares of Class B Stock underlying the Class C Stock in the case of a
stock dividend. Accordingly, the Class C Stock beneficially owned by TCI
became convertible into a total of 7,088,732 shares of Class B Stock. Also,
the terms of the Notes provide for an adjustment in the number of shares of
Class C Stock underlying the Notes in the case of a stock dividend.
Accordingly, the Notes beneficially owned by TCI became convertible into a
total of 2,587,500 shares of Class B Stock.
ITEM 4. Purpose of Transaction
Pursuant to the Agreement, TCI (through LMC and LIFE) has
agreed to contribute all its beneficial ownership interest in the Class C Stock
and the Notes, which will result in the transfer of the Class B Stock
underlying such securities, to Fox Kids in exchange for the Preferred Stock
(the "Exchange"). Consummation of the Exchange is subject to various terms and
conditions as set forth in the Agreement, including the expiration or
termination of the applicable waiting period under the Hart-Scott-Rodino
Anti-trust Improvement Act.
The Agreement was entered into concurrently with, among other things,
the execution by Fox Kids of (i) a stock purchase agreement with the holders of
the Class A Stock, and (ii) a merger agreement with IFE. In connection with
those transactions, TCI, through LIFE, executed a waiver (the "Waiver") of its
rights under the Shareholder Agreement. Pursuant to the Waiver, LIFE waives
various rights under the Shareholder Agreement, including the right of first
refusal with respect to Fox Kids' purchase of the Class A Stock from the
holders thereof. The Waiver is contingent upon the Exchange being consummated
before the Class A Stock is purchased by Fox Kids under the related stock
purchase agreement. The Waiver will also be effective, and LIFE has waived its
first refusal rights, with respect to the acquisition of the Class A
5
<PAGE> 6
Stock by Fox Kids by means of the merger contemplated by said merger agreement
between Fox Kids and IFE.
Upon the closing of the Exchange, TCI will no longer have a beneficial
interest in any securities of IFE. The description of TCI's agreement to
contribute its beneficial ownership in the Class C Stock and the Notes, which
will result in the transfer of the Class B Stock underlying such securities, in
exchange for the Preferred Stock of Fox Kids, and the related Waiver is
qualified in its entirety by reference to (a) the text of the Agreement
attached hereto as Exhibit 7(H), and (b) the text of the Waiver attached hereto
as Exhibit 7(I), each of which are incorporated herein by this reference.
Except as otherwise described herein, neither TCI nor, to the
best of its knowledge, any of its executive officers, directors or controlling
persons, have any present plans or proposals which relate to or would result
in: (i) any acquisition by any person of additional securities of IFE, or any
disposition of securities of IFE; (ii) any extraordinary corporate transaction,
such as a merger, reorganization or liquidation, involving IFE or any of its
subsidiaries; (iii) any sale or transfer of a material amount of assets of IFE
or any of its subsidiaries; (iv) any change in the present board of directors
or management of IFE, including any plans or proposals to change the number or
term of directors or to fill any existing vacancies on the board; (v) any
material change in the present capitalization or dividend policy of IFE; (vi)
any other material change in IFE's business or corporate structure; (vii) any
changes in IFE's charter, by-laws, or other instruments corresponding thereto
or other actions which may impede the acquisition of control of IFE by any
person; (viii) any delisting from a national securities exchange or any loss of
authorization for quotation in an inter-dealer quotation system of a registered
national securities association of a class of securities of IFE; (ix) any
termination of registration pursuant to section 12(g)(4) of the Exchange Act of
a class of equity securities of IFE; or (x) any action similar to any of those
enumerated above.
TCI reserves the right, depending on other relevant factors,
to acquire additional shares of the Class B Stock of IFE in open market or
privately negotiated transactions, or to change its intention with respect to
any or all of the matters referred to in this Item.
ITEM 5. Interest in Securities of the Issuer
(a) TCI presently beneficially owns 9,676,232 shares of
the Class B Stock. Of the 9,676,232 shares beneficially owned, 7,088,732
shares may be acquired upon the conversion of the Class C Stock and 2,587,500
shares may be acquired upon the conversion of the Notes. The 9,676,232 shares
of Class B Stock, beneficially owned by TCI, represent 22.8% of the 42,458,677
shares of IFE Class B Stock assumed to be outstanding if TCI converted its
Class C Stock and the Notes. Such share amount is based on 32,782,445 shares
of Class B Stock outstanding as of March 1, 1997, as reported by IFE in its
Annual Report on Form 10-K for the period ended December 31, 1996. To the
knowledge of TCI, none of the Schedule 1 Persons has any interest in any
securities of IFE.
(b) TCI has the sole power to vote, or to direct the
voting of, the shares of the Class B Stock that TCI beneficially owns, and,
subject to the Agreements to dispose of, or to direct the disposition of, the
shares of Class B Stock that TCI beneficially owns.
(c) Except for the Exchange contemplated by the
Agreement, neither TCI nor, to the knowledge of TCI, any of the persons
described on Schedule 1, has executed transactions in the Class B Stock of IFE
during the past sixty (60) days.
(d) There is no 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 Class B Stock beneficially owned by TCI.
(e) Not applicable.
6
<PAGE> 7
ITEM 6. Contracts, Arrangements, Understandings or Relationships with
Respect to Securities of the Issuer
The Amended and Restated Shareholder Agreement, dated as of
September 1, 1995, by and among M.G. Robertson, Timothy B. Robertson, the
Robertson Charitable Remainder Unitrust, The Christian Broadcasting Network,
Inc., LIFE and IFE, grants LIFE certain rights of first refusal, a put option,
and incidental and demand registration rights. The description of these rights
and other obligations of the Shareholder Agreement is more fully set forth in
the Shareholder Agreement attached to this Amendment No. 2 as Exhibit 7(J) and
incorporated herein by this reference.
Pursuant to the terms of the Agreement, TCI has agreed,
subject to the terms and conditions of the Agreement, to contribute all of its
beneficial ownership in the Class C Stock and the Notes, which will result in
the transfer of its beneficial ownership in the Class B Stock underlying such
securities, to Fox Kids in exchange for the Preferred Stock. In connection
with this Agreement, TCI, through LIFE, has agreed to waive all its rights and
obligations under the Shareholder Agreement. See Item 4 above.
Except as described above and in Items 3, 4 and 7, hereof,
there are presently no contracts, arrangements, understandings or relationships
among TCI and other persons with respect to the Class B Stock of IFE.
ITEM 7. Material to be Filed as Exhibits
(A) Registration Statement on Form S-4, filed by
TCI/Liberty Holding Company on June 23, 1994, and thereafter amended and
ordered effective June 23, 1994, under Commission File No. 33-54263, which is
hereby incorporated by this reference. (Previously submitted with Original
Statement filed on August 4, 1994, via incorporation by reference.)
(B) Press Release dated August 4, 1994. (Previously
submitted with Original Statement filed on August 4, 1994.)
(C) Amended and Restated Shareholders Agreement dated
April 27, 1992. (Previously submitted with Original Statement filed on August
4, 1994, via incorporation by reference.)
(D) Restated Shareholder Agreement dated November 9,
1993. (Previously submitted with Original Statement filed on. August 4, 1994,
via incorporation by reference)
(E) Liberty Agreement dated November 9, 1993.
(Previously submitted with Original Statement filed on August 4, 1994, via
incorporation by reference.)
(F) Exchange Agreement dated as of December 1, 1995,
among IFE, Liberty Programming Corporation (an affiliate of TCI) and Liberty
IFE, Inc. (an indirect subsidiary of TCI). (Previously submitted with
Amendment No. 1 to Original Statement filed on December 15, 1995.)
(G) Press Release dated December 15, 1995. (Previously
submitted with Amendment No. 1 to Original Statement filed on December 15,
1995.)
(H) Contribution and Exchange Agreement dated as June 11,
1997, by and among LMC, LIFE and Fox Kids
7
<PAGE> 8
(I) Waiver dated as of June 11, 1997, by LIFE and The
Christian Broadcasting Network, Inc.
(J) Amended and Restated Shareholder Agreement, dated as
of September 1, 1995, by and among M.G. Robertson, Timothy B. Robertson, the
Robertson Charitable Remainder Unitrust, The Christian Broadcasting Network,
Inc., LIFE and IFE
8
<PAGE> 9
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.
June 19, 1997 TELE-COMMUNICATIONS, INC.
/s/ Stephen M. Brett
------------------------------
Stephen M. Brett
Executive Vice President and
General Counsel
9
<PAGE> 10
SCHEDULE 1
Directors, Executive Officers and Controlling Persons
of
Tele-Communications, Inc. ("TCI")
<TABLE>
<CAPTION>
DIRECTORS
Principal Occupation & Principal Business or Organization in Which
Name Business Address such Employment Is Conducted
- ---- ---------------------- -------------------------------------------
<S> <C> <C>
Tony Lee Coelho Director of TCI; Chairman of the Board & Chief Cable television & telecommunications
Executive Officer of ETC w/tci, Inc.; Chairman & & programming services
Chief Executive Officer of Coelho Associates,
LLC
1325 Avenue of the Americas, 26th Floor
New York, New York 10019
Donne F. Fisher Consultant & Director of TCI Cable television & telecommunications
5619 DTC Parkway & programming services
Englewood, CO 80111
John W. Gallivan Director of TCI; Chairman of the Board Newspaper publishing
of Kearns-Tribune Corporation
400 Tribune Building
Salt Lake City, UT 84111
Paul A. Gould Director of TCI, Managing Director of Investment banking services
Allen & Company Incorporated
711 5th Avenue
New York, New York 10022
Leo J. Hindery Director, President and Chief Operating Cable television & telecommunications
Officer of TCI & programming services
5619 DTC Parkway
Englewood, CO 80111
Jerome H. Kern Director of TCI; Business Consultant; Special Business Consulting; Law
Counsel to Baker & Botts, L.L.P.
5619 DTC Parkway
Englewood, CO 80111
Kim Magness Director of TCI; Manages various personal Management of personal investments
investments;
4000 E. Belleview
Englewood, CO 80111
John C. Malone Chairman of the Board, Chief Executive Officer & Cable television & telecommunications
Director of TCI & programming services
5619 DTC Parkway
Englewood, CO 80111
</TABLE>
10
<PAGE> 11
<TABLE>
<CAPTION>
Principal Occupation & Principal Business or Organization in
Name Business Address Which such Employment Is Conducted
- ---- ---------------------- -------------------------------------
<S> <C> <C>
Robert A. Naify Director of TCI; President & Chief Executive Motion Picture Industry
Officer of
Todd-AO Corporation;
172 Golden Gate Avenue
San Francisco, CA 94102
J.C. Sparkman Director of TCI Cable television & telecommunications
5619 DTC Parkway & programming services
Englewood, CO 80111
EXECUTIVE OFFICERS
Gary K. Bracken Senior Vice President & Controller Cable television & telecommunications
of TCI Communications, Inc. & programming services
5619 DTC Parkway
Englewood, CO 80111
Stephen M. Brett Executive Vice President, Secretary Cable television & telecommunications
& General Counsel of TCI & programming services
5619 DTC Parkway Englewood, CO 80111
Brendan R. Clouston Executive Vice President of TCI Cable television & telecommunications
5619 DTC Parkway & programming services
Englewood, CO 80111
Marvin Jones Director, Executive Vice President & Chief Cable television & telecommunications
Operating Officer of TCI Communications, Inc. & programming services
5619 DTC Parkway
Englewood, CO 80111
Larry E. Romrell Executive Vice President of TCI Cable television & telecommunications
5619 DTC Parkway & programming services
Englewood, CO 80111
Bernard W. Schotters, II Senior Vice President - Finance & Treasurer of Cable television & telecommunications II
TCI Communications, Inc. & programming services
5619 DTC Parkway
Englewood, CO 80111
Robert N. Thomson Senior Vice President - Government Affairs of Cable television & telecommunications
TCI Communications, Inc. & programming services
5619 DTC Parkway
Englewood, CO 80111
</TABLE>
11
<PAGE> 12
<TABLE>
<CAPTION>
Principal Occupation & Principal Business or Organization in
Name Business Address Which such Employment Is Conducted
- ---- ---------------------- -------------------------------------
<S> <C> <C>
Fred A. Vierra Executive Vice President of TCI Cable television & telecommunications
5619 DTC Parkway & programming services
Englewood, CO 80111
</TABLE>
12
<PAGE> 13
EXHIBIT INDEX
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------
EXHIBIT
NUMBER EXHIBIT PAGE
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
7(A) Registration Statement on Form S-4, filed by TCI/Liberty Holding Company on Previously
June 23, 1994, and thereafter amended and ordered effective June 23, 1994, filed
under Commission File No. 33-54263, which is hereby incorporated by this
reference. (Previously submitted with Original Statement filed on August 11, 1994,
via incorporation by reference.)
7(B) Press Release dated August 4, 1994. (Previously submitted with Original Previously
Statement filed on August 4, 1994.) filed
7(C) Amended and Restated Shareholders Agreement dated April 27, 1992. (Previously Previously
submitted with Original Statement filed on August 4, 1994, via incorporation by filed
reference.)
7(D) Restated Shareholder Agreement dated November 9, 1993. (Previously submitted Previously
with Original Statement filed on August 4, 1994, via incorporation by filed
reference)
7(E) Liberty Agreement dated November 9, 1993. (Previously submitted with Original Previously
Statement filed on August 4, 1994, via incorporation by reference.) filed
7(F) Exchange Agreement dated as of December 1, 1995, among IFE, liberty Programming Previously
Corporation (an affiliate of TCI) and Liberty IFE, Inc. (an indirect subsidiary filed
of TCI). (Previously submitted with Amendment No. 1 to Original Statement filed
on December 15, 1995.)
7(G) Press Release dated December 15, 1995. (Previously submitted with Amendment No. Previously
1 to Original Statement filed on December 15, 1995.) filed
7(H) Contribution and Exchange Agreement dated as June 11, 1997, by and among LMC, 15
LIFE and Fox Kids
7(I) Waiver dated as of June 11, 1997, by LIFE and The Christian Broadcasting 45
Network, Inc.
7(J) Amended and Restated Shareholder Agreement, dated as of September 1, 1995, by 49
and among M.G. Robertson, Timothy B. Robertson, the Robertson
Charitable Remainder Unitrust, The Christian Broadcasting
Network, Inc., LIFE and IFE
</TABLE>
13
<PAGE> 1
EXHIBIT 7(H)
CONTRIBUTION AND EXCHANGE AGREEMENT
By and Among
LIBERTY MEDIA CORPORATION,
LIBERTY IFE, INC.
and
FOX KIDS WORLDWIDE, INC.
June 11, 1997
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
1. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. The Contribution. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.1 The Contribution. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.2 Exchange of Stock Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.3 Filing of Charter Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3. Closing Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
4. Representations and Warranties of Liberty and LIFE . . . . . . . . . . . . . . . . . . . . . . . . 7
4.1 Organization and Standing; Articles and By-Laws . . . . . . . . . . . . . . . . . . . . . 7
4.2 Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
4.3 No Conflicts; Required Filings and Consents . . . . . . . . . . . . . . . . . . . . . . . 7
4.4 Litigation; Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
4.5 Title to the IFE Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
4.6 Title to the IFE Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
4.7 No Other Agreements Relating to IFE Securities . . . . . . . . . . . . . . . . . . . . . . 9
4.8 Investment Intent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4.9 No Brokers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4.10 Full Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
5. Representations and Warranties of Fox Kids . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
5.1 Organization and Standing; Articles and By-Laws . . . . . . . . . . . . . . . . . . . . . 9
5.2 Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
5.3 No Conflicts; Required Filings and Consents . . . . . . . . . . . . . . . . . . . . . . . 10
5.4 Capital Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
5.5 The Fox Kids and NPAL Preferred Stocks . . . . . . . . . . . . . . . . . . . . . . . . . . 11
5.6 Compliance with Applicable Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
5.7 Newly Formed Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
5.8 NPAL Financial Statements; Primary US Holding Company . . . . . . . . . . . . . . . . . . 12
5.9 TNCL SEC Filings; TNCL Financial Statements . . . . . . . . . . . . . . . . . . . . . . . 13
5.10 Investment Intent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
5.11 No Brokers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
5.12 Full Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
</TABLE>
(i)
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
6. Pre-Closing Covenants of Fox Kids, LIFE and Liberty . . . . . . . . . . . . . . . . . . . . . . . 14
6.1 Filings and other Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
6.2 Public Announcements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
6.3 Substitution of Consideration in Certain Circumstances . . . . . . . . . . . . . . . . . . 14
6.4 Notification of Certain Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
6.5 H-S-R Filings; Best Efforts to Close. . . . . . . . . . . . . . . . . . . . . . . . . . . 16
7. Conditions to Each Party's Obligation to Effect the Contribution . . . . . . . . . . . . . . . . . 16
7.1 No Stop Order . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
7.2 Consummation of Share Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
7.3 H-S-R Act. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
8. Additional Conditions to Obligations of Fox Kids . . . . . . . . . . . . . . . . . . . . . . . . . 17
8.1 Accuracy of Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . 17
8.2 Performance of Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
8.3 Officer's Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
8.4 Opinion of Counsel for Liberty and LIFE . . . . . . . . . . . . . . . . . . . . . . . . . 18
8.5 Amended Affiliation Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
8.6 IFE Shareholders Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
9. Additional Conditions to the Obligations of Liberty and LIFE . . . . . . . . . . . . . . . . . . . 18
9.1 Accuracy of Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . 18
9.3 Officer's Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
9.4 Tax Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
9.5 Funding Agreement and Exchange Agreement. . . . . . . . . . . . . . . . . . . . . . . . . 19
9.6 Assets of NPAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
9.7 Opinion of Counsel for Fox Kids . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
9.8 Registration Rights Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
10. Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
10.1 Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
10.2 Effect of Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
11. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
11.1 Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
11.2 Certain Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
11.3 Indemnification by Liberty and LIFE . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
</TABLE>
(ii)
<PAGE> 4
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
11.4 Indemnification by Fox Kids . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
11.5 Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
12. Miscellaneous Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
12.1 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
12.2 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
12.3 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
12.4 No Adverse Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
12.5 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
12.6 Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
12.7 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
12.8 Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
12.9 Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
12.10 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
EXHIBITS AND SCHEDULES
Exhibit A Share Exchange Agreement
Exhibit B Amended Affiliation Agreement
Exhibit C Exchange Agreement
Exhibit D Funding Agreement
Exhibit E NPAL Certificate of Amendment
Exhibit F Fox Kids Certificate of Designations
Exhibit G Press Release
Exhibit H Opinion by Counsel for Liberty and LIFE
Exhibit I Opinion by Counsel for Fox Kids
Exhibit J Certificates regarding Tax Matters
Schedule 5.8 NPAL Subsidiaries
Schedule 9.8 Terms of Registration Rights Agreement
</TABLE>
(iii)
<PAGE> 5
CONTRIBUTION AND EXCHANGE AGREEMENT
Contribution and Exchange Agreement (this "Agreement"), dated as of
June 11, 1997, by and among Liberty Media Corporation, a Delaware corporation
("Liberty"), Liberty IFE, Inc., a Colorado corporation and a wholly owned
subsidiary of Liberty ("LIFE"), and Fox Kids Worldwide, Inc., a Delaware
corporation ("Fox Kids").
RECITALS
A. LIFE owns of record 7,088,732 shares of Class C non-voting
Common Stock, par value $.01 per share (the "IFE Stock"), of International
Family Entertainment, Inc., a Delaware corporation ("IFE"), and 6% Convertible
Secured Notes due 2004 of IFE in the principal amount of $23,000,000 which, as
of the date hereof, are convertible into 2,587,500 shares of IFE Stock (the
"IFE Notes" and, together with the IFE Stock, the "IFE Securities").
B. LIFE wishes to contribute the IFE Securities to Fox Kids in
exchange for the Consideration (as hereinafter defined) (collectively, the
"Contribution").
C. The Contribution is to be made concurrently with the exchange
of shares of capital stock (the "Share Exchange") contemplated by that certain
Agreement, dated as of the date hereof, among Fox Kids, Saban Entertainment,
Inc., Fox Broadcasting Company, Fox Broadcasting Sub, Inc., Allen & Company
Incorporated, Haim Saban and the other entities parties thereto, a copy of
which is attached to this Agreement as Exhibit A (the "Share Exchange
Agreement").
D. The Contribution and the Share Exchange are intended to
qualify as a tax-free exchange pursuant to Section 351 of the Internal Revenue
Code of 1986, as amended (the "Code"), except to the extent that the Exchange
Right (as hereinafter defined) constitutes taxable "boot" under the Code.
AGREEMENT
In consideration of the premises and of the mutual representations,
warranties, covenants and agreements contained herein, and in order to set
forth the terms and conditions of the Contribution, the parties to this
Agreement hereby agree as follows:
1. Definitions: As used in this Agreement, terms defined in the
preamble and recitals shall have the respective meanings specified therein and
the terms set forth below shall have the meanings indicated:
"Affiliate" means, when used with reference to a specified
Person, any Person that
1
<PAGE> 6
directly or indirectly through one or more intermediaries controls or is
controlled by, or is under common control with, such specified Person. For the
purposes of this definition, control (including the terms controlled by and
under common control with), as used with respect to any Person, shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise. For purposes of this
Agreement, (i) neither IFE nor any of its Subsidiaries shall be deemed an
Affiliate of Liberty, LIFE, Fox Kids or any of their respective Affiliates and
(ii) each of NPAL and Saban Entertainment, Inc., a Delaware corporation, and
their respective Affiliates shall be deemed an Affiliate of Fox Kids.
"Amended Affiliation Agreement" means that certain affiliation
agreement between Satellite Services, Inc. and IFE in the form of Exhibit B
hereto.
"Closing" has the meaning set forth in Section 3.
"Closing Date" has the meaning set forth in Section 3.
"Consideration Adjustment Period" means the period commencing
immediately following the Closing and ending on the date the transactions
contemplated by the Merger Agreement are consummated; provided, however, that
if the Merger Agreement is terminated, the "Consideration Adjustment Period"
shall mean the last to occur of (i) such termination, (ii) November 30, 1997
and (iii) the consummation or termination of the sale of the IFE Class A Stock
pursuant to the Robertsons Class A Purchase Agreement.
"$" means the United States dollar.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Exchange Agreement" means that certain Exchange Agreement,
dated as of the Closing Date, among Liberty, LIFE and NPAL, in the form of
Exhibit C hereto.
"Exchange Right" means the exchange right granted to Liberty
and LIFE under the Exchange Agreement.
"Fox Kids Certificate of Designations" has the meaning set
forth in Section 2.3.
"Fox Kids Disclosure Letter" has the meaning set forth in
Section 5.
"Fox Kids Preferred Stock" means the Series A Preferred Stock,
par value $.001 per share, of Fox Kids.
"Fully Diluted Share Number" means the sum of (i) the number
of shares of IFE Stock owned by LIFE plus (ii) the number of shares of IFE
Stock into which the IFE Notes
2
<PAGE> 7
owned by LIFE are convertible, in each case as of the Closing Date.
"Funding Agreement" means that certain Funding Agreement,
dated as of the date hereof, among Fox Kids, NPAL and TNCL, in the form of
Exhibit D hereto.
"Governmental Authority" has the meaning set forth in Section
4.3.
"Highest Per Share Amount" means the highest amount paid, or
agreed to be paid, by Fox Kids, or any Affiliate of Fox Kids, for a share of
capital stock of IFE (including without limitation for any shares of any class
of common stock of IFE) (i) from M.G. "Pat" Robertson, the Robertson Charitable
Remainder Unitrust, the Gordon P. Robertson Irrevocable Trust, the Elizabeth F.
Robinson Irrevocable Trust, the Ann R. Lablanc Irrevocable Trust, Lisa N.
Robertson, Timothy B. Robertson (individually and as custodian to and for each
of Abigail H. Robertson, Laura N. Robertson, Elizabeth C. Robertson, Willis H.
Robertson and Caroline S. Robertson), the Timothy and Lisa Robertson Children's
Trust, the Timothy B. Robertson Charitable Trust, any other charitable,
revocable or irrevocable trust created by or for the benefit of the Robertsons,
their children or their respective heirs, The Christian Broadcasting Network,
Inc. or Regent University (and, in each case, from any of their respective
Affiliates), (ii) pursuant to a tender offer made to the public shareholders of
IFE, (iii) pursuant to a merger, binding share exchange or similar agreement
involving IFE (including without limitation the Merger Agreement) (other than
an amount paid in respect of a share of capital stock of IFE to any IFE
stockholder pursuant to Section 262 of the Delaware General Corporation Law),
(iv) in any transaction involving any holder or "group" (within the meaning of
Rule 13d-5(b)(1) under the Exchange Act) that owns, or has the right to dispose
of, or to direct the disposition of, 2 2 % or more of the outstanding shares
of any class of common stock of IFE or (v) in any transaction, or series of
related or unrelated transactions (excluding for purposes of this clause (v)
any transaction referred to in clauses (i) through (iii) above), involving, in
the aggregate (between January 1, 1997 and the end of the Consideration
Adjustment Period), 5% or more of the outstanding shares of any class of
common stock of IFE, in each case appropriately adjusted to take into account
any stock dividend, subdivision, split, or combination involving the capital
stock of IFE during any relevant period.
"IFE Class A Stock" means the Class A Voting Common Stock, par
value $.01 per share, of IFE.
"IFE Class B Stock" means the Class B Common Stock, par value
$.01 per share, of IFE.
"IFE Shareholders Agreement" means that certain Amended and
Restated Shareholder Agreement, dated as of September 1, 1995, by and among
M.G. "Pat" Robertson, Timothy B. Robertson, the Robertson Charitable Remainder
Unitrust, the Timothy and Lisa Robertson Children's Trust, the Christian
Broadcasting Network, LIFE and IFE.
"Lien" means any mortgage, pledge, lien, security interest or
other encumbrance.
3
<PAGE> 8
"Material NPAL Subsidiary" means each direct or indirect
Subsidiary of NPAL that constitutes a "Significant Subsidiary" of NPAL within
the meaning of Rule 1-02 of Regulation S-X of the SEC.
"Material TNCL Subsidiary" means each direct or indirect
Subsidiary of TNCL that constitutes a "Significant Subsidiary" of TNCL within
the meaning of Rule 1-02 of Regulation S-X of the SEC.
"Merger Agreement" means that certain Agreement and Plan of
Merger, dated as of the date hereof, among Fox Kids, Fox Kids Merger
Corporation and IFE, as the same may be amended, supplemented or otherwise
modified; provided, however, that if the Merger Agreement is terminated and the
Purchaser or any of its Affiliates subsequently enters into, prior to the end
of the Consideration Adjustment Period, another merger agreement, binding share
agreement, asset purchase agreement or other agreement with IFE that requires
the approval of shareholders of IFE in order to consummate the transactions
contemplated thereby, then the term "Merger Agreement" shall be deemed to
refer to such agreement, as the same may be amended, supplemented or otherwise
modified.
"NPAL" means News Publishing Australia Limited, a Delaware
corporation.
"NPAL Certificate of Amendment" means the Certificate of
Amendment to the Certificate of Incorporation of NPAL that creates the NPAL
Preferred Stock, in the form of Exhibit E hereto.
"NPAL Financial Statements" means the unaudited consolidated
balance sheets of NPAL as of June 30, 1996 and December 31, 1996, and the
related unaudited operating statement and profit and loss for the six-month
period ended December 31, 1996 and the one-year period ended June 30, 1996
(without footnotes).
"NPAL Preferred Stock" means the Preferred Stock, par value
$.001 per share, of NPAL.
"Outside Date" means July 30, 1997; provided, however, that if
a request for additional information is made of Fox Kids (or any of its
Affiliates) in connection with the filings to be made under the H-S-R Act
contemplated by Section 6.5(a) hereof, then "Outside Date" shall mean the
earlier of (i) November 30, 1997 and (ii) the later of (x) July 30, 1997 and
(y) the second business day after receipt by Fox Kids (or the Affiliate of Fox
Kids that makes the filings) of clearance or authorization to effect the
transactions referred to in the first sentence of Section 6.5(a).
"Person" means any individual, corporation, general or limited
partnership, limited liability company, trust, joint venture, association or
unincorporated entity of any kind.
4
<PAGE> 9
"Restriction" means, when used with respect to any specified
security, any shareholders or other trust agreement, option, warrant, escrow,
proxy, buy-sell agreement, power of attorney or other contract, agreement or
arrangement which (i) grants to any Person the right to purchase or otherwise
acquire, or obligates any Person to sell or otherwise dispose of, such
specified security or any interest therein, or (ii) restricts the transfer of,
or the exercise of any rights or the enjoyment of any benefits arising by
reason of, the ownership of such specified security.
"Robertsons Class A Purchase Agreement" means that certain
Stock Purchase Agreement, dated as of the date hereof, by and among Fox Kids,
M.G. "Pat" Robertson, the Robertson Charitable Remainder Unitrust, the Gordon
P. Robertson Irrevocable Trust, the Elizabeth F. Robinson Irrevocable Trust,
the Ann R. Lablanc Irrevocable Trust, Lisa N. Robertson, Timothy B. Robertson
(individually and as custodian to and for each of Abigail H. Robertson, Laura
N. Robertson, Elizabeth C. Robertson, Willis H. Robertson and Caroline S.
Robertson), the Timothy and Lisa Robertson Children's Trust and the Timothy B.
Robertson Charitable Trust.
"SEC" means the United States Securities and Exchange
Commission.
"Subsidiary" of a specified Person means (i) any corporation
of which equity securities possessing a majority of the ordinary voting power
in electing the board of directors are, at the time as of which such
determination is being made, owned or controlled by such specified Person
either directly or indirectly through or in combination with one or more
Subsidiaries of such specified Person, or (ii) any Person (other than a
corporation) in which such specified Person either directly or indirectly
through or in combination with one or more Subsidiaries, at the time as of
which such determination is being made, (x) is a general partner or (y) owns or
controls more than a 50% ownership interest and has the right to elect a
majority of the members of the governing authority of such Specified Person.
"Substitute Security" has the meaning set forth in Section
6.3(a).
"TCI" means Tele-Communications, Inc., a Delaware corporation.
"TNCL" means The News Corporation Limited, a corporation
organized and existing under the laws of South Australia, Australia.
2. The Contribution.
2.1 The Contribution. (a) At the Closing, and subject to
the terms and conditions hereinafter set forth, LIFE shall contribute the IFE
Securities to Fox Kids in exchange for shares of Fox Kids Preferred Stock (or,
if applicable, the Substitute Security) with an aggregate initial liquidation
preference (the "Initial Liquidation Preference") equal to the greater
5
<PAGE> 10
of (i) $345 million or (ii) the sum of (x) $6.33 million plus (y) the amount
determined by multiplying (x) the Highest Per Share Amount paid during the
period commencing on January 1, 1997 and ending at the time of the Closing by
(y) the Fully Diluted Share Number (the "Consideration"). The Consideration
shall be adjusted in accordance with the provisions of subsection (b) below.
It is the intention of the parties that the Consideration equal the amount
(rounded to the nearest thousand to avoid the issuance of fractional shares)
derived by multiplying the Highest Per Share Amount (which as of the date of
this Agreement is understood by Liberty and LIFE to be $35) by the Fully
Diluted Share Number, and then adding thereto $6.33 million, which represents
(A) $3.5 million of interest income forfeited by LIFE as a result of its
contribution of the IFE Notes to Fox Kids as provided herein and (B) $2.83
million to partially compensate Liberty and LIFE for the fact that the
Exchange Right constitutes "boot" for Federal income taxes purposes.
(b) If (i) during the Consideration Adjustment Period a
Highest Per Share Amount is paid (a "Post-Closing Highest Per Share Amount")
which is greater than the Highest Per Share Amount paid prior to or at the time
of the Closing, and (ii) the Initial Liquidation Preference would have been
higher had such Post-Closing Highest Per Share Amount been paid immediately
prior to the Closing, then LIFE (or its nominee) shall receive, within 5
business days of such Post-Closing Highest Per Share Amount having been paid,
additional shares of Fox Kids Preferred Stock (rounded up to the nearest whole
number) with an aggregate initial liquidation preference equal to the
difference between (x) the aggregate Initial Liquidation Preference that the
Fox Kids Preferred Stock would have had if the Post- Closing Highest Per Share
Amount had been paid immediately prior to the Closing and (y) the aggregate
Initial Liquidation Preference of the Fox Kids Preferred Stock received by
LIFE (or its nominee) at the Closing. This Section 2.1(b) shall apply with
respect to each Post-Closing Highest Per Share Amount paid subsequent to the
time of the Closing; provided, however, that if any adjustment is made pursuant
to this Section 2.1(b), then any subsequent calculation pursuant to this
subsection (b) due to a higher Post-Closing Highest Per Share Amount being paid
shall be based on the aggregate Initial Liquidation Preference of all shares of
Fox Kids Preferred Stock received by LIFE (or its nominee) under this Section
2.1 and the aggregate Initial Liquidation Preference for the Fox Kids Preferred
Stock that LIFE would have received had such higher Post-Closing Highest Per
Share Amount been paid immediately prior to the Closing.
2.2 Exchange of Stock Certificates. At the Closing, Fox
Kids shall deliver, or cause to be delivered, to LIFE, against delivery to Fox
Kids of the IFE Notes and the certificate or certificates evidencing the IFE
Stock (together with duly executed stock powers in blank and with all requisite
stock and bond transfer tax stamps duly affixed thereto), a certificate,
registered in the name of LIFE or its nominee, representing the shares of Fox
Kids Preferred Stock to which LIFE is entitled pursuant to Section 2.1 hereof.
2.3 Filing of Charter Amendments. The Fox Kids Preferred
Stock delivered to LIFE or its nominee at the Closing shall have the
preferences and relative participating, optional and other special rights,
qualifications, limitations and restrictions set forth in the form
6
<PAGE> 11
of Certificate of Designations attached hereto as Exhibit F (the "Fox Kids
Certificate of Designations"). Fox Kids shall cause the Fox Kids Certificate of
Designations and the NPAL Certificate of Amendment to be filed with the
Delaware Secretary of State prior to or at the time of the Closing.
3. Closing Date. The closing of the Contribution (the "Closing")
shall (unless the parties hereto agree otherwise) take place at the offices of
Baker & Botts, L.L.P., 599 Lexington Avenue, New York, New York, at 11:00 a.m.,
local time, on the day on which the last of the conditions set forth in
Sections 7, 8 and 9 hereof is fulfilled or waived (subject to applicable law)
(the "Closing Date"). The parties covenant and agree, subject to Section
6.3(b), that they will in any event effect the Closing on the second business
day after the satisfaction of the condition set forth in Section 7.3 hereof, if
the other conditions to the obligations of the parties under Sections 7, 8 and
9 hereof are capable of being satisfied at that time.
4. Representations and Warranties of Liberty and LIFE. Liberty
and LIFE, jointly and severally, represent and warrant to Fox Kids as follows:
4.1 Organization and Standing; Articles and By-Laws.
Each of Liberty and LIFE is a corporation duly organized, validly existing and
in good standing under the laws of the state of its incorporation. LIFE has
all requisite power and authority and all necessary governmental approvals,
permits and other authorizations necessary to own the IFE Securities (which
constitute its only assets, other than cash paid from time to time on the IFE
Securities) and to carry on its business in the manner and in the locations it
is now being conducted.
4.2 Authorization. Each of Liberty and LIFE has the
requisite corporate power and authority to enter into and carry out the terms
and conditions of this Agreement. The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby have been duly
authorized by the Board of Directors of Liberty and LIFE. Liberty, in its
capacity as the sole stockholder of LIFE, has approved this Agreement, and no
other corporate action on the part of Liberty or LIFE is necessary to authorize
the execution, delivery or performance by either Liberty or LIFE of this
Agreement. This Agreement has been duly executed and delivered by Liberty and
LIFE and constitutes the valid and binding obligation of each of Liberty and
LIFE, enforceable against Liberty and LIFE in accordance with its terms.
4.3 No Conflicts; Required Filings and Consents. The
execution and delivery of this Agreement by each of Liberty and LIFE do not,
and the performance of this Agreement by each of Liberty and LIFE will not, (i)
conflict with or violate the certificate or articles of incorporation or bylaws
of Liberty or LIFE, (ii) conflict with or violate any law, rule, regulation,
order, judgment or decree applicable to either Liberty or LIFE or by which any
property or asset of either is bound or affected, or (iii) result in any breach
of or constitute a default (or an event which with notice or lapse of time or
both would become a default) under, result in the loss of a material benefit
under, or give to others any right of termination, amendment, acceleration,
increased payments or cancellation of, or result in the creation of a lien
7
<PAGE> 12
or other encumbrance on the IFE Securities pursuant to, any note, bond,
mortgage, indenture, contract, agreement, lease, license, permit, franchise or
other instrument to which Liberty, LIFE or any other Subsidiary of Liberty is a
party. The execution and delivery of this Agreement by each of Liberty and
LIFE do not, and the performance of this Agreement by each of Liberty and LIFE
will not, require any consent, approval, authorization or permit of, or filing
with or notification to, any governmental or regulatory authority, domestic or
foreign (each, a "Governmental Authority"), except for such filings as may be
required under Section 13(d) of the Exchange Act.
4.4 Litigation; Compliance with Laws. There are no
actions, suits or proceedings of any nature pending, or, to the knowledge of
Liberty or LIFE, threatened, against Liberty or LIFE arising out of (i) LIFE's
ownership of the IFE Securities or (ii), as of the date hereof, this Agreement,
or any action taken or to be taken by Liberty or LIFE in connection with this
Agreement. Neither Liberty nor LIFE is subject to any order, judgment, ruling,
or decree of any competent authority relating to Liberty or LIFE's ownership of
the IFE Securities. Neither Liberty nor LIFE has received notice of any
violation of any applicable statute, regulation, code, ordinance, rule, order,
judgment, decree or requirement relating to LIFE's ownership of the IFE
Securities and, to Liberty's and LIFE's knowledge, no such violation exists.
Each of Liberty and LIFE is in compliance with all applicable laws, rules and
regulations relating to LIFE's ownership of the IFE Securities.
4.5 Title to the IFE Notes. LIFE owns good and valid
title to the IFE Notes, free and clear of any Lien or Restriction. At the
Closing, subject to the terms and conditions of this Agreement, Fox Kids will
acquire good and valid title to the IFE Notes, free and clear of any Liens or
Restrictions other than those (i) arising under the Securities Act of 1933, as
amended (the "Securities Act") and "blue sky" laws of applicable jurisdictions
or (ii) created by or with the consent of Fox Kids or any of its Affiliates. As
of the date hereof, the IFE Notes are convertible into an aggregate of
2,587,500 shares of IFE Stock which, if issued on the date hereof upon
conversion of the IFE Notes, would be convertible into shares of IFE Class B
Stock on a one-for-one basis. Neither Liberty nor LIFE has entered into any
agreements, understandings or undertakings (other than this Agreement) with
respect to the IFE Notes under which Liberty or LIFE is or may become
obligated, directly or indirectly, to transfer, dispose of, convert or assign
the IFE Notes, or which would result in a Lien or Restriction upon the IFE
Notes. The IFE Notes are the only debt securities of IFE legally or
beneficially owned by Liberty.
4.6 Title to the IFE Stock. LIFE has good and valid
title to the 7,088,732 shares of IFE Stock owned by it on the date hereof, free
and clear of any Lien or Restriction. At the Closing, subject to the terms and
conditions of this Agreement, Fox Kids will acquire good and valid title to the
shares of IFE Stock owned by LIFE, free and clear of all Liens or Restrictions
other than those (i) arising under the Securities Act and "blue sky" laws of
applicable jurisdictions or (ii) created by or with the consent of Fox Kids or
any of its Affiliates. As of the date hereof, the shares of IFE Stock owned by
LIFE are convertible into shares of IFE Class B Stock on a one-for-one basis.
Neither Liberty nor LIFE has entered into any agreements,
8
<PAGE> 13
understandings or undertakings (other than this Agreement) with respect to the
IFE Stock owned by LIFE under which Liberty or LIFE is or may become obligated,
directly or indirectly, to transfer, dispose of, convert or assign such IFE
Stock, or which would result in a Lien or Restriction upon such IFE Stock. The
IFE Stock owned of record by LIFE are the only equity securities of IFE legally
or beneficially owned by Liberty.
4.7 No Other Agreements Relating to IFE Securities.
There are (i) no options, warrants, calls, subscriptions, convertible
securities or other rights (including preemptive rights), agreements or
commitments of any character (other than this Agreement) obligating Liberty or
LIFE now or at any time in the future to sell, transfer or otherwise dispose of
any of the IFE Securities and (ii) there are no voting trusts, proxies or other
agreements to which Liberty or LIFE is a party with respect to the IFE
Securities other than this Agreement, the IFE Shareholders Agreement and the
purchase agreements pursuant to which LIFE acquired the IFE Stock and the IFE
Notes from IFE.
4.8 Investment Intent. The shares of Fox Kids
Preferred Stock to be acquired by LIFE pursuant to this Agreement are being
acquired by LIFE for its own account for investment and with no present
intention of distributing or reselling such shares or any part thereof in any
transaction which would constitute a "distribution" within the meaning of the
Securities Act. Liberty and LIFE understand and acknowledge that the offer and
sale of the Fox Kids Preferred Stock have not been, and as of the Closing will
not have been, registered under the Securities Act or any state securities
laws.
4.9 No Brokers. No broker or finder is entitled to any
brokerage, finder's or other fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of Liberty or LIFE.
4.10 Full Disclosure. No statement herein or in the
Exchange Agreement or in any certificate delivered pursuant to the requirements
of this Agreement by or on behalf of Liberty or LIFE contains or will contain
any untrue statement of a material fact concerning Liberty or LIFE or omits or
will omit to state a material fact concerning Liberty or LIFE necessary in
order to make the statements made herein or therein, in light of the
circumstances under which they were made, not misleading.
5. Representations and Warranties of Fox Kids. Except as set
forth in the disclosure letter delivered at or prior to the execution of this
Agreement by Fox Kids, which refers to the relevant Sections of this Agreement
(the "Fox Kids Disclosure Letter"), Fox Kids represents and warrants to Liberty
and LIFE as follows:
5.1 Organization and Standing; Articles and By-Laws.
Each of Fox Kids, NPAL, each Material NPAL Subsidiary, TNCL and each Material
TNCL Subsidiary is a corporation, partnership or other legal entity duly
organized, validly existing and, if applicable, in good standing under the laws
of the jurisdiction of its incorporation or organization. Fox Kids,
9
<PAGE> 14
NPAL and each Material NPAL Subsidiary is qualified, licensed or domesticated
as a foreign corporation, partnership or other legal entity and is in good
standing in all jurisdictions where the character of its properties owned or
held under lease or the nature of its activities make such qualification
necessary, except where the failure to be so qualified, licensed or
domesticated would not have a material adverse effect on the business, assets,
results of operations or financial position of (i), in the case of Fox Kids, of
Fox Kids, and (ii) in the case of NPAL, NPAL and its Subsidiaries taken as a
whole. Each of Fox Kids, NPAL, each Material NPAL Subsidiary, TNCL and each
Material TNCL Subsidiary has all requisite power and authority and all
necessary governmental approvals, permits and other authorizations necessary to
own, lease and operate its properties and assets and to carry on its business
in the manner and in the locations it is now being conducted, except where the
failure to have such power, authority and governmental approvals, permits and
authorizations would not have a material adverse effect on the business,
assets, results of operations or financial position (x), in the case of Fox
Kids, of Fox Kids, (y), in the case of NPAL and any Material NPAL Subsidiary,
of NPAL and its Subsidiaries taken as a whole, and (z), in the case of TNCL and
any Material TNCL Subsidiary, of TNCL and its Subsidiaries taken as a whole.
True and correct copies of the Certificate of Incorporation and Bylaws of each
of Fox Kids and NPAL, as amended to the date hereof, have been delivered to
Liberty.
5.2 Authorization. Fox Kids has the requisite corporate
power and authority to enter into and carry out the terms and conditions of
this Agreement. Each of Fox Kids, NPAL and TNCL has the requisite corporate
power and authority to enter into and carry out the terms and conditions of the
Funding Agreement. NPAL has the requisite corporate power and authority to
enter into and carry out the terms of the Exchange Agreement. The execution and
delivery of this Agreement and the Funding Agreement and the consummation of
the transactions contemplated hereby and thereby have been duly authorized by
the Board of Directors of Fox Kids and by any required shareholder or other
action required under the charter documents of, or any shareholder agreement
relating to, Fox Kids. All necessary corporate action on the part of each of
NPAL and TNCL to authorize and approve the due execution, delivery and
performance of the Funding Agreement by NPAL and TNCL, respectively, has been
taken. All necessary corporate action on the part of NPAL to authorize and
approve the due execution, delivery and performance of the Exchange Agreement
by NPAL has been taken. This Agreement has been duly executed and delivered by
Fox Kids and constitutes its valid and binding obligation, enforceable against
it in accordance with its terms. Upon the execution and delivery of the
Funding Agreement by Fox Kids, NPAL and TNCL at the Closing, the Funding
Agreement will constitute the legal, valid and binding obligation of each of
Fox Kids, NPAL and TNCL, enforceable against each in accordance with its terms,
and will not be void or voidable by TNCL under Australian law. Upon the
execution and delivery of the Exchange Agreement by NPAL at the Closing, the
Exchange Agreement will constitute the legal, valid and binding obligation of
NPAL, enforceable against NPAL in accordance with its terms.
5.3 No Conflicts; Required Filings and Consents. The
execution and delivery of this Agreement by Fox Kids does not, and the
performance of this Agreement by Fox
10
<PAGE> 15
Kids, the execution, delivery and performance of the Funding Agreement by each
of Fox Kids, NPAL and TNCL, and the execution, delivery and performance of the
Exchange Agreement by NPAL will not, (i) conflict with or violate the
certificate of incorporation, by-laws or other organizational documents of, or,
to the knowledge of Fox Kids, any shareholder agreement relating to, Fox Kids,
NPAL or TNCL, (ii) conflict with or violate any law, rule, regulation, order,
judgment or decree applicable to any of Fox Kids, NPAL, any Material NPAL
Subsidiary, TNCL or any Material TNCL Subsidiary or by which any property or
asset of any thereof is bound or affected, or (iii) result in any breach of or
constitute a default (or an event which with notice or lapse of time or both
would become a default) under, result in the loss of a material benefit under,
or give to others any right of termination, amendment, acceleration, increased
payments or cancellation of, or result in the creation of a lien or other
encumbrance on any material property or asset of Fox Kids, NPAL, any Material
NPAL Subsidiary, TNCL or any Material TNCL Subsidiary pursuant to, any note,
bond, mortgage, indenture, contract, agreement, lease, license, permit,
franchise or other instrument to which Fox Kids, NPAL, any Material NPAL
Subsidiary, TNCL or any Material TNCL Subsidiary is a party, except, in the
cases of clauses (ii) and (iii), for any such conflicts, violations, breaches,
defaults or other occurrences which would not prevent or delay the consummation
of the transactions contemplated by this Agreement or otherwise prevent (x) Fox
Kids from timely performing its obligations under this Agreement or, following
the Closing, exercising its rights, or timely performing its obligations, under
the terms of the Fox Kids Preferred Stock, (y), following the Closing, any of
Fox Kids, NPAL or TNCL from exercising its rights, or timely performing its
respective obligations, under the terms of the Funding Agreement or (z),
following the Closing, NPAL from timely performing its obligations under the
terms of the Exchange Agreement. The execution and delivery of this Agreement
by Fox Kids does not, and the performance of this Agreement by Fox Kids, the
execution, delivery and performance of the Funding Agreement by each of Fox
Kids, NPAL and TNCL, and the execution, delivery and performance of the
Exchange Agreement by NPAL will not, require any consent, approval,
authorization or permit of, or filing with or notification to, any Governmental
Authority, except for (i) the filing of the Fox Kids Certificate of
Designations and the NPAL Certificate of Amendment with the Delaware Secretary
of State prior to or at the time of the Closing and (ii) such filings as may be
required under Section 13(d) of the Exchange Act. All required filings under
the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the
"H-S-R Act") have been made, and the waiting period thereunder has expired or
terminated, with respect to the transactions contemplated by the Share Exchange
Agreement.
5.4 Capital Stock. As of the date hereof, the
authorized capital stock of Fox Kids consists of 10,000,000 shares of Class A
Common Stock, par value $.001 per share, 10,000,000 shares of Class B Common
Stock, par value $.001 per share, and 20,000,000 shares of "blank check"
preferred stock, par value $.001 per share. Immediately prior to the Closing,
there will be a number of shares of Fox Kids Preferred Stock duly authorized as
shall be sufficient for Fox Kids to deliver to LIFE (or its nominee) at the
Closing the number of validly issued, fully paid and nonassessable shares of
Fox Kids Preferred Stock to which LIFE is entitled pursuant to Section 2.1
hereof. As of the Closing Date, no shares of capital stock of Fox Kids
11
<PAGE> 16
will rank senior to the Fox Kids Preferred Stock as to dividend rights, rights
of redemption, or rights on any liquidation, dissolution or winding up of Fox
Kids. All of the shares of capital stock of Fox Kids to be issued pursuant to
the terms of the Share Exchange Agreement will be, upon such issuance in
accordance with the terms of the Share Exchange Agreement, duly authorized,
validly issued, fully paid and nonassessable.
5.5 The Fox Kids and NPAL Preferred Stocks. The
resolution set forth in the Fox Kids Certificate of Designations has been
approved by the Board of Directors of Fox Kids and, upon the filing of the Fox
Kids Certificate of Designations with the Delaware Secretary of State, the Fox
Kids Preferred Stock will have all of the preferences and relative
participating, optional and other special rights, qualifications, limitations
and restrictions set forth in the Fox Kids Certificate of Designations. The
shares of Fox Kids Preferred Stock to be received by LIFE or its nominee at the
Closing will be, upon such receipt at the Closing in accordance with the terms
and conditions of this Agreement, duly authorized, validly issued, fully paid
and non-assessable and LIFE or such nominee will have all of the rights of a
registered holder thereof under Delaware law. LIFE or such nominee will
receive good and valid title to the Fox Kids Preferred Stock at the Closing,
free and clear of all Liens and Restrictions other than those (i) arising under
the Securities Act and "blue sky" laws of applicable jurisdictions or (ii)
created by or with the consent of LIFE, Liberty or any of their respective
Affiliates. Liberty will not be liable for any stamp duty or other issuance or
transfer taxes or duties in connection with the issuance and delivery of the
Fox Kids Preferred Stock at the Closing. The NPAL Certificate of Amendment has
been approved by the Board of Directors and the stockholders of NPAL and, upon
the filing of the NPAL Certificate of Amendment with the Delaware Secretary of
State, the NPAL Preferred Stock will have all of the preferences and relative
participating, optional and other special rights, qualifications, limitations
and restrictions set forth in the NPAL Certificate of Amendment. The shares of
NPAL Preferred Stock that may be received by a holder of shares of Fox Kids
Preferred Stock upon the valid exercise of the Exchange Right included in the
Exchange Agreement will be, upon surrender of the certificates representing
such shares of Fox Kids Preferred Stock to NPAL or its agent, duly authorized,
validly issued, fully paid and non-assessable. No authorization, approval or
consent of any Australian Governmental Authority is currently required in order
for (i) Fox Kids to declare or pay dividends on or to redeem the Fox Kids
Preferred Stock, (ii) NPAL to perform its obligations under the Exchange
Agreement, (iii) NPAL to declare or pay dividends on or to redeem the shares of
NPAL Preferred Stock exchanged for shares of Fox Kids Preferred Stock, or (iv)
Fox Kids, NPAL or TNCL to exercise or perform their respective rights or
obligations under the Funding Agreement.
5.6 Compliance with Applicable Laws. Each of Fox Kids,
NPAL, each Material NPAL Subsidiary, TNCL and each Material TNCL Subsidiary is
in compliance with all applicable laws, ordinances, regulations, decrees and
orders of any Governmental Authority, the breach or violation of which,
individually or in the aggregate, could reasonably be expected to have a
material adverse effect on the business, assets, results of operations or
financial condition (i), in the case of Fox Kids, of Fox Kids and its
Subsidiaries taken as a whole, (ii), in the case of NPAL and any Material NPAL
Subsidiary, of NPAL and its Subsidiaries taken as a whole, and
12
<PAGE> 17
(iii), in the case of TNCL and any Material TNCL Subsidiary, of TNCL and its
Subsidiaries taken as a whole.
5.7 Newly Formed Corporation. Fox Kids is a recently
organized corporation and, as of the date hereof, has engaged in no operating
activities. As of the date hereof, Fox Kids has no material assets or
liabilities (other than agreements relating to its acquisition of securities of
IFE).
5.8 NPAL Financial Statements; Primary US Holding
Company. (a) The NPAL Financial Statements delivered to Liberty prior to the
date hereof were prepared in accordance with Australian generally accepted
accounting principles (except that there are no footnotes) applied on a
consistent basis throughout the periods indicated and fairly present the
consolidated financial position and results of operations of NPAL and its
consolidated subsidiaries as at the respective dates thereof and for the
respective periods indicated therein. Since December 31, 1996, there has been
no change in any of the significant accounting (including tax accounting)
policies, practices or procedures of NPAL. Since December 31, 1996, there has
not been any material adverse change in the financial condition, results of
operations or businesses of NPAL and its Subsidiaries taken as a whole.
(b) NPAL is the primary United States holding company for
TNCL and owns not less than 75 % (in value) of the total assets of TNCL and its
Subsidiaries located in the United States. NPAL owns, directly or indirectly,
not less than 75% (in value and voting power) of the equity securities of the
Subsidiaries listed on Schedule 5.8 hereto, except to the extent otherwise
specified in such schedule.
5.9 TNCL SEC Filings; TNCL Financial Statements. (a) TNCL
has filed all forms, reports and documents required to be filed by it with the
SEC since December 31, 1995, and has heretofore made available to Liberty, in
the form filed with the SEC (excluding any exhibits thereto), its Annual Report
on Form 20-F for the fiscal year ended December 31, 1996 (the "TNCL Annual
Report"). The TNCL Annual Report, and any other forms, reports and other
documents filed by TNCL with the SEC since December 31, 1995, (x) were or will
be prepared in accordance with the requirements of the Securities Act, and the
Exchange Act, and the rules and regulations thereunder and (y) did not at the
time they were filed, or will not at the time they are filed, contain any
untrue statements of a material fact or omit to state a material fact required
to be stated therein or necessary in order to make the statements made therein,
in the light of the circumstances under which they were made, not misleading.
(b) The consolidated financial statements (including the
notes thereto) contained in the TNCL Annual Report were prepared in accordance
with Australian generally accepted accounting principles applied on a
consistent basis throughout the periods indicated (except as may be indicated
in the notes thereto) and fairly present the consolidated financial position,
results of operations and cash flows of TNCL and its consolidated subsidiaries
as at the respective dates thereof and for the respective periods indicated
therein, and such financial
13
<PAGE> 18
statements and the reconciliations to U.S. generally accepted accounting
principles comply as to form in all material respects with applicable
accounting requirements and the rules and regulations of the SEC. Since
December 31, 1996, there has been no change in any of the significant
accounting (including tax accounting) policies, practices or procedures of
TNCL. Since December 31, 1996, there has not been any material adverse change
in the financial condition, results of operations or businesses of TNCL and its
Subsidiaries taken as a whole.
5.10 Investment Intent. The IFE Securities, and any
shares of IFE common stock acquired upon exercise of the conversion privileges
set forth in such securities, are and will be acquired by Fox Kids for its own
account for investment and with no present intention of distributing or
reselling such shares or any part thereof in any transaction which would
constitute a "distribution" within the meaning of the Securities Act. Fox Kids
understands and acknowledges that the offer and sale of the IFE Securities have
not been, and as of the Closing will not have been, registered under the
Securities Act or any state securities laws.
5.11 No Brokers. No broker or finder is entitled to any
brokerage, finder's or other fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of Fox Kids.
5.12 Full Disclosure. No statement herein or in the Fox
Kids Disclosure Letter, the Funding Agreement or the Exchange Agreement or in
any certificate delivered pursuant to the requirements of this Agreement by or
on behalf of Fox Kids, NPAL or TNCL contains or will contain any untrue
statement of a material fact concerning Fox Kids, NPAL or TNCL or omits or will
omit to state a material fact necessary in order to make the statements made
herein or therein concerning Fox Kids, NPAL or TNCL, in light of the
circumstances under which they were made, not misleading.
6. Pre-Closing Covenants of Fox Kids, LIFE and Liberty. During
the period commencing on the date hereof and ending at the time of the Closing:
6.1 Filings and other Actions. (a) Upon the terms and
subject to the conditions of this Agreement, each of the parties hereto agrees
to use its reasonable commercial efforts to take, or cause to be taken, all
appropriate action, and to do, or cause to be done, all things necessary,
proper or advisable under applicable laws and regulations or otherwise to
consummate and make effective the transactions contemplated by this Agreement.
(b) Each party shall use its commercially reasonable
efforts not to take any action, or enter into any transaction, which would
cause any of its representations or warranties contained in this Agreement to
be untrue or result in a breach of any covenant or agreement made by such party
in this Agreement.
6.2 Public Announcements. Liberty and Fox Kids shall
consult with each other before issuing any press release or otherwise making
any public statements with respect to
14
<PAGE> 19
this Agreement or any transaction contemplated hereby and shall not, and shall
not permit any Affiliate to, issue any such press release or make any such
public statement without the prior consent of the other party, which consent
shall not be unreasonably withheld; provided, however, that a party may,
without the prior consent of the other party, issue such press release or make
such public statement as may be required by law or any listing agreement or
arrangement to which TNCL or TCI is a party with a national securities exchange
or The Nasdaq Stock Market if it has used all reasonable efforts to consult
with the other party and to obtain such party's consent but has been unable to
obtain such consent in a timely manner. The parties hereto have agreed to the
issuance on the date hereof of the press release attached hereto as Exhibit G.
6.3 Substitution of Consideration in Certain
Circumstances. (a) If Liberty determines, on the advice of counsel, that the
condition to its obligation to consummate the transactions contemplated by this
Agreement set forth in Section 9.4(b) will not be satisfied, then the parties
shall negotiate in good faith the terms of a substitute security (the
"Substitute Security") for the Fox Kids Preferred Stock to be received by LIFE
pursuant to the Contribution. The Substitute Security shall (i) have terms that
are mutually acceptable to Fox Kids and Liberty, (ii) at the election of
Liberty, be exchangeable for a "mirror" security of NPAL or another Affiliate
of Fox Kids acceptable to Liberty, (iii) have an economic value to Liberty not
less, in any material respect, than, and an economic cost to Fox Kids (and, in
the case of an NPAL "mirror" security, an economic cost to NPAL) not greater,
in any material respect, than, the value and cost, respectively, of the Fox
Kids Preferred Stock (and the NPAL Preferred Stock), (iv) not, in the sole
judgment of Liberty based upon advice of counsel, upon receipt by Liberty
result in recognition by Liberty of taxable income or gain for United States or
Australian federal income tax purposes (except to the extent any exchange right
may constitute "boot"), and (v) not result in the recognition by Fox Kids or
NPAL, as the case may be, of taxable income or gain for United States or
Australian federal income tax purposes to a greater extent than that which
would be recognizable by Fox Kids or NPAL if the transactions contemplated by
this Agreement and the Exchange Agreement (including the issuance of the NPAL
Preferred Stock in exchange for shares of Fox Kids Preferred Stock) were
consummated on the date hereof. Any Substitute Security shall have voting
rights, or no voting rights, as may be determined by Fox Kids in its sole
discretion.
(b) If the terms of the Substitute Security require that
filings be made under the H-S-R Act, each of Fox Kids, Liberty and LIFE shall,
or shall cause its appropriate Affiliate(s) to, file an appropriate
notification and report form under the H-S-R Act within 5 business days of the
date the terms of the Substitute Security are determined. Each party shall
cause, or shall cause such appropriate Affiliate(s) to, supply promptly any
additional information and documentary material that may be requested pursuant
to the H-S-R Act. If filings are made under the H-S- R Act pursuant hereto,
then (i) the obligations of each of Liberty and LIFE, on the one hand, and Fox
Kids, on the other hand, to consummate the transactions contemplated by this
Agreement (in addition to the conditions set forth in Sections 7, 8 and 9
hereof) shall be subject to the expiration (or earlier termination) of the
waiting period under the H-S-R Act, and (ii) the Outside Date shall be
extended, if necessary, to the earlier of (x) the second business day after
15
<PAGE> 20
the expiration (or earlier termination) of such waiting period and (y)
November 30, 1997.
6.4 Notification of Certain Matters. Each of Liberty and
LIFE, on the one hand, and Fox Kids, on the other hand, shall give prompt
notice in writing to the other of: (i) any information that indicates that any
of its representations or warranties contained herein was not true and correct
as of the date hereof or will not be true and correct, in any material respect,
as of the Closing Date, (ii) the occurrence of any event which will result, or
has a reasonable prospect of resulting, in the failure to satisfy a condition
specified in Section 7, 8 or 9 hereof, or (iii) any notice of, or other
communication relating to, any claim, litigation, proceeding or investigation
that questions the validity or enforceability of this Agreement or any of the
transactions contemplated hereby.
6.5 H-S-R Filings; Best Efforts to Close. (a) As
promptly as practicable after the execution of this Agreement, but in any event
within 5 business days, Fox Kids shall, or shall cause its appropriate
Affiliate(s) to, file an appropriate notification and report form under the
H-S-R Act with respect to (i) the conversion of the IFE Stock and the IFE Notes
into voting securities of IFE, (ii) the acquisition of voting securities of IFE
under the Robertsons Class A Purchase Agreement and from The Christian
Broadcasting Network, Inc. and Regent University and (iii) the merger
contemplated by the Merger Agreement; provided, however, that such
five-business day period shall be extended to the extent necessary for Fox Kids
to obtain from IFE all information reasonably necessary to complete such
notification and report form that is not in the public domain or available from
IFE's periodic reports filed under the Exchange Act. Fox Kids shall, or shall
cause such Affiliate(s) to, request early termination of the waiting period
under the H-S-R Act. Fox Kids shall, or shall cause such Affiliate(s) to,
supply promptly any additional information and documentary material that may be
requested of it pursuant to the H-S-R Act and use, or cause such Affiliate(s)
to use, its commercially reasonable efforts to obtain clearance or
authorization under the H-S-R Act to consummate the transactions described in
the immediately preceding sentence as promptly as practicable. Fox Kids shall
not, and shall not permit any Affiliate to, take any action that will have the
effect of delaying, impairing or impeding the receipt of early termination or
such clearance or authorization under the H-S-R Act. Fox Kids shall use its
commercially reasonable efforts to cause IFE, as soon as reasonably
practicable, (i) to provide Fox Kids, or its appropriate Affiliate(s), with
such information as may be reasonably necessary for Fox Kids, or such
Affiliate(s), to complete and submit its notification and report form under the
H-S-R Act, (ii) to file its own (or its appropriate Affiliate(s) notification
and report form under the H-S-R Act in connection with the transactions
referred to in the first sentence of this Section 6.5(a) and (iii) to supply
promptly any additional information and documentary material that may be
requested of it (or such Affiliate) pursuant to the H-S-R Act.
(b) Fox Kids covenants and agrees with Liberty and LIFE to
use its best efforts to effect the Contribution prior to the consummation of
the merger contemplated by the Merger Agreement. Fox Kids acknowledges and
agrees that a failure to effect the Contribution prior to such merger would
result in Liberty and LIFE suffering significant damages, and agrees to
indemnify and hold harmless Liberty and LIFE from and against any and all
monetary damages
16
<PAGE> 21
suffered by either of them arising out of the failure of the Contribution to
be effected prior to such merger. Such monetary value shall be deemed to equal
the difference between the amount received by LIFE in the merger and the value
of the Consideration (assuming for this purpose no change in applicable tax
laws or regulations from those in effect on the date of this Agreement).
Notwithstanding the foregoing, Fox Kids shall not be liable to Liberty or LIFE
pursuant to this Section 6.5(b) if the failure of the Contribution to be
effected prior to such merger is due to a material breach by Liberty or LIFE of
any of its covenants, agreements, representations or warranties set forth in
this Agreement.
7. Conditions to Each Party's Obligation to Effect the
Contribution. The respective obligations of each party to effect the
Contribution and the other transactions contemplated by this Agreement shall be
subject to the fulfillment at or prior to the Closing of the following
conditions, any or all of which may be waived, in whole or in part, to the
extent permitted by applicable law:
7.1 No Stop Order. There shall be no effective
injunction, writ or preliminary restraining order or any order of any nature
issued by any court of competent jurisdiction or by any Governmental Authority
directing that the transactions provided for herein, or any of them, not be
consummated as herein provided; provided, however, that the parties shall use
their reasonable commercial efforts to prevent the entry of, or, if entered, to
cause to be vacated or lifted as promptly as practicable, any such injunction
or other order.
7.2 Consummation of Share Exchange. All of the conditions
precedent to the consummation of the transactions contemplated by the Share
Exchange Agreement shall have been satisfied or, to the extent permitted by
applicable law, waived by the parties thereto, and the Share Exchange shall be
consummated and become effective concurrently with the consummation and
effectiveness of the Contribution.
7.3 H-S-R Act. The waiting period applicable to the
filings made under the H-S-R Act pursuant to Section 6.5(a) hereof shall have
expired or been terminated.
7.4 No Adverse Enactments. There shall not have been any
statute, rule, regulation or order promulgated, enacted or issued or deemed
applicable to the Contribution by any Governmental Authority or court of
competent jurisdiction which would make the consummation of the Contribution
illegal.
8. Additional Conditions to Obligations of Fox Kids. The
obligation of Fox Kids 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, any or all of which may be waived by Fox
Kids, in whole or in part, to the extent permitted by applicable law:
8.1 Accuracy of Representations and Warranties. All
representations and warranties of Liberty and LIFE contained herein shall be
true and correct in all material respects
17
<PAGE> 22
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.
8.2 Performance of Agreements. Each of Liberty and LIFE
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
at the Closing Date.
8.3 Officer's Certificates. Fox Kids shall have received
certificates of Liberty and LIFE, signed by officers of Liberty and LIFE,
respectively, evidencing compliance with the conditions set forth in Sections
8.1 and 8.2 above.
8.4 Opinion of Counsel for Liberty and LIFE. Fox Kids
shall have received from counsel to Liberty and LIFE an opinion, dated the
Closing Date, to the effect set forth on Exhibit H hereto. In rendering their
opinions such counsel may rely as to factual matters upon certificates or other
documents furnished by officers and directors of Liberty and LIFE and by
government officials, and upon such other documents and data as such counsel
deem appropriate as a basis for their opinions. Such counsel may specify the
jurisdiction or jurisdictions in which they are admitted to practice, that they
are not admitted to practice in any other jurisdiction or experts in the law of
any other jurisdiction and that, to the extent their opinions concern the laws
of any other jurisdiction or pertain to matters beyond the scope of such
counsel's engagement, such counsel may rely upon the opinion of counsel
admitted to practice in such other jurisdiction. Any opinion relied upon by
such counsel shall be delivered together with the opinion of such counsel,
which shall state that such counsel believes that their reliance thereon is
justified.
8.5 Amended Affiliation Agreement. The Amended
Affiliation Agreement, in the form of Exhibit B hereto, shall have been duly
executed and delivered.
8.6 IFE Shareholders Agreement. The IFE Shareholders
Agreement shall have been terminated or LIFE shall have irrevocably waived all
of its rights and obligations thereunder such that LIFE has no further rights
or obligations under the IFE Shareholders Agreement.
9. Additional Conditions to the Obligations of Liberty and LIFE.
The obligation of each of Liberty and LIFE 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, any or all of which
may be waived by Liberty and LIFE, in whole or in part, to the extent permitted
by applicable law:
9.1 Accuracy of Representations and Warranties. All
representations and warranties of Fox Kids contained herein shall be true and
correct in all material respects 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.
18
<PAGE> 23
9.2 Performance of Agreements. Fox Kids 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 at the Closing
Date.
9.3 Officer's Certificate. Liberty and LIFE shall have
received a certificate of Fox Kids, signed by officers of Fox Kids, evidencing
compliance with the conditions set forth in Sections 9.1 and 9.2 above.
9.4 Tax Matters. (a) Liberty and LIFE shall have received
duly executed copies of the certificates attached hereto as Exhibit J.
(b) Liberty shall have received from Baker & Botts,
L.L.P. an opinion of counsel to the effect that since June 11, 1997, there has
been no amendment to, change (including any announced prospective change) in,
or effective date set for any proposed amendment or change in, the laws (or any
regulations thereunder) of the United States or Australia or any political
subdivision or taxing authority of either thereof or therein, or any amendment
to, change in, or effective date set for any proposed amendment or change in,
an interpretation or application of such laws or regulations by any legislative
body, court, governmental agency or regulatory authority, which would result in
Liberty recognizing taxable income or gain for United States or Australian
federal income tax purposes by virtue of the Contribution or the consummation
of any of the transactions contemplated by this Agreement (except to the extent
the Exchange Right constitutes "boot" for federal income tax purposes).
9.5 Funding Agreement and Exchange Agreement. The
Funding Agreement, in the form attached hereto as Exhibit D, shall have been
duly executed and delivered by Fox Kids, NPAL and TNCL and the Exchange
Agreement, in the form attached hereto as Exhibit C, shall have been duly
executed and delivered by NPAL.
9.6 Assets of NPAL. Liberty shall have received evidence
reasonably satisfactory to it that NPAL owns, as of the Closing Date, directly
or indirectly through one or more Subsidiaries of NPAL, not less than 75% (in
value) of the assets of TNCL and its Subsidiaries located in the United States.
9.7 Opinion of Counsel for Fox Kids. Liberty and LIFE
shall have received an opinion of counsel to Fox Kids, dated the Closing Date,
substantially to the effect set forth on Exhibit I. In rendering their opinions
such counsel may rely as to factual matters upon certificates or other
documents furnished by officers and directors of Fox Kids and by government
officials, and upon such other documents and data as such counsel deem
appropriate as a basis for their opinions. Such counsel may specify the
jurisdiction or jurisdictions in which they are admitted to practice, that they
are not admitted to practice in any other jurisdiction or experts in the law of
any other jurisdiction and that, to the extent their opinions concern the laws
of any other
19
<PAGE> 24
jurisdiction or pertain to matters beyond the scope of such counsel's
engagement, such counsel may rely upon the opinion of counsel admitted to
practice in such other jurisdiction. Any opinion relied upon by such counsel
shall be delivered together with the opinion of such counsel, which shall state
that such counsel believes that their reliance thereon is justified.
9.8 Registration Rights Agreement. Liberty and LIFE
shall have entered into a registration rights agreement with Fox Kids having
the terms set forth on Schedule 9.8 hereto.
10. Termination.
10.1 Termination. This Agreement may be terminated and the
transactions contemplated hereby may be abandoned at any time:
10.1.1 by the mutual written consent of Liberty and
Fox Kids;
10.1.2 by Fox Kids if there has been a breach of any
covenant or agreement on the part of Liberty or LIFE set forth in this
Agreement, or if any representation or warranty of Liberty or LIFE shall have
become untrue in any material respect, in either case such that such breach or
untruth is incapable of being cured by the Outside Date; provided, however,
that Fox Kids shall not have the right to terminate this Agreement pursuant to
this Section 10.1.2 if Fox Kids, at such time, is in material breach of any of
its covenants, agreements, representations or warranties set forth in this
Agreement;
10.1.3 by Liberty if there has been a breach of any
covenant or agreement on the part of Fox Kids set forth in this Agreement, or
if any representation or warranty of Fox Kids shall have become untrue in any
material respect, in either case such that such breach or untruth is incapable
of being cured by the Outside Date; provided, however, that Liberty shall not
have the right to terminate this Agreement pursuant to this Section 10.1.3 if
Liberty or LIFE, at such time, is in material breach of any of its covenants,
agreements, representations or warranties set forth in this Agreement;
10.1.4 by either Fox Kids or Liberty if the
Contribution shall not have been consummated on or before the Outside Date,
unless the absence of such consummation shall be due to the failure of the
party seeking termination to perform each of its obligations under this
Agreement required to be performed by it at or prior to the Closing Date; or
10.1.5 by either Fox Kids or Liberty if a court of
competent jurisdiction or a Governmental Authority shall have issued a
non-appealable final order, decree or ruling or taken any other action, in each
case having the effect of permanently restraining, enjoining or otherwise
prohibiting the Contribution or any of the other transactions contemplated
hereby.
10.2 Effect of Termination. If this Agreement is
terminated pursuant to
20
<PAGE> 25
Section 10.1, this Agreement shall become void and of no effect with no
liability on the part of any party hereto, or any of their respective officers
or directors, to the others and all rights and obligations of each party hereby
shall cease, except that (a) the agreements contained in Section 6.5(b), this
Section 10.2 and in Sections 11.2 and 12.6 shall survive the termination hereof
and (b) 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. If this Agreement is terminated, Fox Kids covenants
and agrees to cause the Robertsons Class A Purchase Agreement to be terminated,
unless (i) such termination is the result of a court of competent jurisdiction
or a Governmental Authority having issued a non-appealable final order, decree
or ruling or taken any other action, in each case having the effect of
permanently restraining, enjoining or otherwise prohibiting the Contribution or
(ii) such termination was due to a material breach by Liberty or LIFE of any
of its covenants, agreements, representations or warranties set forth in this
Agreement.
11. Indemnification.
11.1 Survival. All representations and warranties and
covenants and agreements contained herein shall survive until the first
anniversary of the date of this Agreement; provided, however, that such
limitation shall not apply to (i) the representations set forth in Sections
4.5, 4.6 and 5.5 and (ii) the covenants and agreements set forth in Section
2.1, in this Section 11 and in Sections 12.2, 12.6 and 12.7, each of which
shall survive without limitation.
11.2 Certain Actions. Fox Kids agrees to indemnify and
hold harmless each Liberty Party (as defined below) from and against any and
all losses, claims, damages, liabilities, judgments, costs, disbursements and
expenses of any kind or nature (including reasonable fees and disbursements of
counsel) arising out of any suit, action or proceeding instituted by any Person
not a party to this Agreement that in any manner results from, arises out of,
is based upon or is related or attributable to any action taken by TNCL, NPAL,
Fox Kids or any of their respective Affiliates (each, a "News Corp Party") with
respect to any transaction or proposed transaction involving any News Corp
Party, on the one hand, and any of M.G. "Pat" Robertson, the Robertson
Charitable Remainder Unitrust, the Gordon P. Robertson Irrevocable Trust, the
Elizabeth F. Robertson Irrevocable Trust, the Ann R. Lablanc Irrevocable Trust,
Lisa N. Robertson, Timothy B. Robertson (individually and as custodian to and
for each of Abigail H. Robertson, Laura N. Robertson, Elizabeth C. Robertson,
Willis H. Robertson and Caroline S. Robertson), the Timothy and Lisa Robertson
Children's Trust, the Timothy B. Robertson Charitable Trust, any other
charitable, revocable or irrevocable trust created by or for the benefit of the
Robertsons, their children or their respective heirs, The Christian
Broadcasting Network, Inc. or Regent University, on the other hand. All fees,
costs and expenses of a Liberty Party which are reimbursable pursuant to this
Section 11.2 shall be reimbursed as they are incurred. Fox Kids shall not be
liable for any settlement of any suit, action or proceeding effected without
its written consent, but if settled with its written consent, or if there be a
final judgment for the plaintiff in any such suit, action or proceeding, Fox
Kids shall indemnify and hold harmless each Liberty Party from and against any
damage, loss or liability by reason of such settlement or
21
<PAGE> 26
judgment. As used in this Section 11.2, the term "Liberty Party" means (i)
LIFE, Liberty and TCI, (ii) the respective directors, officers, employees and
agents of the Persons specified in clause (i) of this sentence, and (iii) the
respective successors, assigns, executors, heirs and legal representatives of
the foregoing.
11.3 Indemnification by Liberty and LIFE. Subject to the
other terms and conditions of this Agreement, Liberty and LIFE shall, jointly
and severally, indemnify Fox Kids against and hold Fox Kids harmless from all
demands, claims, losses, costs, fines, liabilities, damages (excluding
consequential damages) and expenses, including reasonable fees and expenses
incurred in the investigation and defense of claims and actions (collectively,
"Losses"), arising out of the breach of any representation, warranty, covenant
or agreement of Liberty or LIFE contained herein.
11.4 Indemnification by Fox Kids. Subject to the other
terms and conditions of this Agreement, Fox Kids shall indemnify each of
Liberty and LIFE against and hold each of Liberty and LIFE harmless from all
Losses arising out of (i) the breach of any representation, warranty, covenant
or agreement of Fox Kids contained herein or (ii) the invalidity or
unenforceability, or alleged invalidity or unenforceability, of any provision
of the Fox Kids Certificate of Designations, the NPAL Certificate of Amendment,
the Exchange Agreement or the Funding Agreement.
11.5 Claims. If any claim or assertion of liability is
made or asserted against a party entitled to be indemnified pursuant to Section
11.3 or 11.4 (an "Indemnified Party") by any Person who is not a party to this
Agreement, the Indemnified Party shall give to the other party (an
"Indemnifying Party") prompt written notice of such claim or assertion, or of
any event or proceeding by or in respect of a third party of which it has
knowledge, concerning any liability or damage as to which it may request
indemnification hereunder. The failure by an Indemnified Party to give notice
as provided in this Section 11.5 shall not relieve the Indemnifying Party of
its obligations under this Section 11.5 except to the extent that the failure
results in a failure of actual notice to the Indemnifying Party and the
Indemnifying Party is damaged solely as a result of the failure to give notice.
The Indemnifying Party shall have the right to direct, through counsel chosen
by the Indemnifying Party and reasonably satisfactory to the Indemnified Party,
the defense or settlement of any such claim or proceeding at its own expense.
If the Indemnifying Party elects to assume the defense of any such claim or
proceeding, the Indemnified Party may participate in such defense, but in such
case the expenses of the Indemnified Party shall be paid by the Indemnified
Party; provided, however, that if the Indemnified Party asserts that there
exists a conflict of interest that would make it inappropriate for the same
counsel to represent the Indemnifying Party and the Indemnified Party and the
counsel for the Indemnifying Party concurs with such assertion, then the
Indemnifying Party shall reimburse the Indemnified Party for the reasonable
fees and expenses of separate counsel, to the extent such fees and expenses are
incurred solely in connection with the matters with respect to which the
counsel for the Indemnifying Party agrees there is a conflict of interest. The
Indemnified Party shall provide the Indemnifying Party with access to its
records and personnel relating to any such claim, assertion,
22
<PAGE> 27
event or proceeding during normal business hours and shall otherwise cooperate
with the Indemnifying Party in the defense or settlement thereof, and the
Indemnifying Party shall reimburse the Indemnified Party for all its reasonable
out-of-pocket expenses in connection therewith, as such expenses are incurred.
If the Indemnifying Party elects to direct the defense of any such claim or
proceeding, the Indemnified Party shall not pay, or permit to be paid, any part
of any claim or demand arising from such asserted liability, unless the
Indemnifying Party, subject to the penultimate sentence of this Section 11.5,
withdraws from the defense of such asserted liability, or unless a final
judgment from which no appeal may be taken by or on behalf of the Indemnifying
Party is entered against the Indemnified Party for such liability. If the
Indemnifying Party fails to defend, or if, after commencing or undertaking any
such defense, the Indemnifying Party fails to prosecute or withdraws from such
defense, the Indemnified Party shall have the right to undertake the defense or
settlement thereof, at the Indemnifying Party's expense. If the Indemnified
Party assumes the defense of any such claim or proceeding pursuant to this
Section 11.5 and proposes to settle such claim or proceeding prior to a final
judgment thereon or to forego appeal with respect thereto, then the Indemnified
Party shall give the Indemnifying Party prompt written notice thereof and the
Indemnifying Party shall have the right to participate in the settlement or
assume or reassume the defense of such claim or proceeding. The Indemnifying
Party shall not settle any claim or assertion unless the Indemnified Party
consents in writing to such settlement, which consent shall not be unreasonably
withheld.
12. Miscellaneous Provisions.
12.1 Notices. All notices or other communications
hereunder shall be in writing and shall be deemed to have been duly given or
made if (i) delivered in person, on the date actually delivered, (ii) by United
States mail, certified or registered, with return receipt requested, on the
date which is two business days after the date of mailing, or (iii) if sent by
telex or facsimile transmission, with a copy mailed on the same day in the
manner provided in (ii) above, on the date transmitted provided receipt is
confirmed by telephone:
If to Fox Kids:
c/o News America Publishing Incorporated
1211 Avenue of the Americas
New York, New York 10036
Attention: Arthur M. Siskind, Esq.
Telecopy No.: 212-768-2027
With copies to:
Squadron, Ellenoff, Plesent & Sheinfeld, LLP
551 Fifth Avenue
New York, New York 10176
Attention: Joel I. Papernik, Esq.
23
<PAGE> 28
Telecopy No.: 212-697-6686
Saban Entertainment
10960 Wilshire Boulevard
Los Angeles, California 90024
Attention: Haim Saban/Mel Woods
Telecopy No.: 310-235-5108
Troop Meisinger Steuben & Pasich, LLP
10940 Wilshire Boulevard
Los Angeles, California 90024
Attention: Dick Troop, Esq.
Telecopy No.: 310-443-8503
If to Liberty or LIFE:
Liberty Media Corporation
8101 East Prentice Avenue
Englewood, Colorado 80111
Attention: President
Telecopy No.: 303-721-5415
With a copy to:
Baker & Botts, L.L.P.
599 Lexington Avenue
New York, New York 10022
Attention: Robert W. Murray Jr., Esq.
Telecopy No.: 212-705-5125
or at such other address as may have been furnished by a party in writing to
the other parties.
12.2 Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of law
or public policy, all other terms and provisions of this Agreement shall
nonetheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party. Upon any such determination that a term or
other provision is invalid, illegal or incapable of being enforced, the parties
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible to the fullest extent
permitted by applicable law in an acceptable manner to the end that the
transactions contemplated hereby are fulfilled to the extent possible.
24
<PAGE> 29
12.3 Governing Law. This Agreement shall be governed by,
and construed in accordance with, the laws of the State of New York, regardless
of the laws that might otherwise govern under applicable principles of
conflicts of law.
12.4 No Adverse Construction. The rule that a contract is
to be construed against the party drafting the contract is hereby waived, and
shall have no applicability in construing this Agreement or any provision
hereof.
12.5 Counterparts. This Agreement may be executed in one
or more counterparts, each of which shall be deemed an original but all of
which together shall constitute one and the same instrument.
12.6 Fees and Expenses. All costs and expenses, including
without limitation fees and disbursements of counsel, incurred by the parties
hereto shall be borne solely and entirely by the party which has incurred such
costs and expenses; provided, however, that if pursuant to Section 6.3 the
terms of a Substitute Security are negotiated, and such terms require that
filings be made under the H-S-R Act, then Fox Kids shall pay all filing fees
required to be paid under the H-S-R Act in connection with such filings.
12.7 Successors and Assigns. This Agreement shall inure to
the benefit of and be binding upon the parties hereto and their respective
successors and assigns, but neither this Agreement nor any of the rights,
interests or other obligations hereunder shall be assigned by any of the
parties hereto without the prior written consent of the other parties.
12.8 Amendment. This Agreement may be amended by the
parties hereto at any time prior to the Closing. This Agreement may be not be
amended except by an instrument in writing signed by each of the parties
hereto.
12.9 Waiver. Any party hereto may (i) extend the time
for the performance of any of the obligations or other acts of the other
parties hereto, (ii) waive any inaccuracies in the representations and
warranties of the other parties contained herein or in any document delivered
pursuant hereto, and (iii) waive compliance by the other parties with any of
the agreements or conditions contained herein; provided, however, that neither
Liberty nor LIFE may waive the condition to their respective obligations to
effect the Contribution set forth in Section 9.4. Any such extension or
waiver shall be valid only if set forth in an instrument in writing signed by
the party or parties to be bound thereby.
12.10 Entire Agreement. This Agreement (including the
Exhibits and Schedules attached hereto, the Fox Kids Disclosure Letter and
other documents referred to herein and which form a part hereof) constitutes
the entire agreement among the parties hereto and supersedes all prior
agreements and understandings, oral and written, among the parties with respect
to the subject matter hereof.
25
<PAGE> 30
The parties hereto have executed and delivered this Agreement
as of the date first above written.
LIBERTY MEDIA CORPORATION
By:
-----------------------------
Name:
Title:
LIBERTY IFE, INC.
By:
-----------------------------
Name:
Title:
FOX KIDS WORLDWIDE, INC.
By:
-----------------------------
Name:
Title:
26
<PAGE> 1
EXHIBIT 7(I)
WAIVER
WAIVER, dated as of June 11, 1997 (this "Waiver"), by each of LIBERTY
IFE, INC., a Colorado corporation ("LIFE"), and THE CHRISTIAN BROADCASTING
NETWORK, INC., a Virginia corporation ("CBN"), to the Amended and Restated
Shareholder Agreement, dated as of September 1, 1995 (as the same may be
amended, supplemented or otherwise modified, the "Shareholder Agreement"),
among M.G. "Pat" Robertson ("Pat Robertson") and Timothy B. Robertson ("Tim
Robertson"), residents of Virginia, the Robertson Charitable Remainder Unitrust
(the "Charitable Trust"), the Timothy and Lisa Robertson Children's Trust (the
"TR Family Trust") (Tim Robertson, the Charitable Trust and the TR Family
Trust, collectively, the "Class A Stockholders"), CBN, LIFE and International
Family Entertainment, Inc., a Delaware corporation (the "Company").
W I T N E S S E T H
WHEREAS, concurrently herewith, Fox Kids Worldwide, Inc., a Delaware
corporation (the "Purchaser"), the Class A Stockholders and certain related
parties have entered into a Stock Purchase Agreement, dated as of the date
hereof (as the same may be amended, supplemented or otherwise modified, the
"Stock Purchase Agreement"), which provides, inter alia, for the purchase of
shares of Class A Common Stock, par value $0.01 per share, of the Company (the
"Class A Stock") by the Purchaser from the Class A Stockholders (the "Class A
Stock Sale);
WHEREAS, concurrently herewith, the Purchaser, Liberty Media
Corporation, a Delaware corporation, and LIFE, which holds shares of Non Voting
Class C Stock ("Class C Stock"), par value $0.01 per share, of the Company and
6% Convertible Secured Notes due 2004 (the "Notes") of the Company, have
entered into a Contribution and Exchange Agreement, dated as of the date hereof
(as the same may be amended, supplemented or otherwise modified, the
"Contribution Agreement"), which provides, inter alia, for a contribution and
exchange (the "Contribution and Exchange") in which LIFE is to contribute its
shares of Class C Stock and its $23 million principal amount of the Notes to
the Purchaser in exchange for shares of a newly issued class of preferred stock
of the Purchaser.
WHEREAS, concurrently herewith, the Purchaser and CBN have entered
into a Stock Purchase Agreement, dated as of the date hereof (as the same may
be amended, supplemented or otherwise modified, the "CBN Stock Purchase
Agreement"), which provides, inter alia, for the purchase of shares of Class B
Common Stock, par value $0.01 per share (the "CBN Stock"), of the Company by
the Purchaser from CBN (the "CBN Stock Sale").
WHEREAS, concurrently herewith, Pat Robertson, the Class A
Stockholders, and CBN, inter alia, have given written consents (the "Consents")
approving and adopting the Merger Agreement, dated as of the date hereof (as
the same may be amended, supplemented or otherwise modified, the "Merger
Agreement"), among the Purchaser, Fox Kids Merger Corporation, a Delaware
company ("FKW Sub"), and the Company providing for the merger (the "Merger") of
FKW Sub into the Company, which shall be the surviving corporation.
<PAGE> 2
WHEREAS, in connection with the transactions contemplated by the Class
A Stock Purchase Agreement, the Class A Stockholders and the Purchaser have
requested, and have made it a condition to the execution of the Stock Purchase
Agreement, the Contribution Agreement and the CBN Stock Purchase Agreement,
that LIFE and CBN agree to waive certain provisions of the Shareholder
Agreement, and LIFE and CBN are agreeable to such request upon the terms and
subject to the conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and mutual agreements
contained herein, and for other valuable consideration the receipt of which is
hereby acknowledged, each of LIFE and CBN hereby agrees as follows:
1. Definitions. All terms defined in the Shareholder Agreement
shall have such defined meanings when used herein unless otherwise defined
herein.
2. Waiver. (a) Effective immediately upon the execution of this
Waiver, each of LIFE and CBN hereby waives any and all rights it may have under
the Shareholder Agreement with respect to the negotiation and execution of the
Stock Purchase Agreement and the Merger Agreement, any discussions relating
thereto or to the transactions contemplated thereby, the giving of the Consents
and any actions taken in furtherance of any thereof (excluding the actual
consummation of the Class A Stock Sale or any other sale of Class A Stock by
the Class A Stockholders to the Purchaser or any of its affiliates), including
without limitation any claim that such actions may have constituted an "offer"
within the meaning of Section 1 of the Shareholder Agreement, any right to
notice of the Stock Purchase Agreement or the Class A Stock Sale, any right of
First Refusal with respect to the Stock Purchase Agreement or the Class A Stock
Sale and any right to sell Covered Securities to the Purchaser on the same
terms and price as that specified in the Stock Purchase Agreement; provided,
however, that the waiver in this Section 2(a) shall not be effective as to LIFE
or CBN, as the case may be, if the Purchaser or any of its Affiliates acquires
any Class A Stock from any of the Class A Stockholders, or if any of the Class
A Stockholders convert any of their Class A Stock into Class B Stock, prior to
the Purchaser's acquisition (including if by consummation of the Merger) of any
of the Class C Stock or the Notes, in the case of LIFE, or of any of the CBN
Stock, in the case of CBN. For the purposes of this Waiver, Affiliates of the
Purchaser shall be deemed to include, without limitation, each of Saban
Entertainment, Inc., News Publishing Australia Limited and The News Corporation
Limited, and each of their Affiliates.
(b) Notwithstanding and in addition to the provisions set forth in
Section 2(a) above, effective concurrently with, but not prior to, acquisition
(including if by consummation of the Merger) by the Purchaser of any of the
Class C Stock or the Notes from LIFE, LIFE hereby waives any and all rights it
may have under the Shareholder Agreement, including without limitation the
rights specified in the first sentence of Section 2(a) with respect to the
circumstances described therein as well as with respect to the actual
acquisition (and consequent conversion into Class B Stock) of the Class A Stock
(including if the acquisition and conversion of the Class A Stock is
consummated simultaneously with the acquisition of any of the Class C Stock of
the Notes).
<PAGE> 3
(c) Notwithstanding and in addition to the provisions set forth in
Section 2(a) above, effective concurrently with, but not prior to, acquisition
(including if by consummation of the Merger) by the Purchaser of any of the CBN
Stock, CBN hereby waives any and all rights it may have under the Shareholder
Agreement, including without limitation the rights specified in the first
sentence of Section 2(a) with respect to the circumstances described therein as
well as with respect to the actual acquisition (and consequent conversion into
Class B Stock) of the Class A Stock (including if the acquisition and
conversion of the Class A Stock is consummated simultaneously with the
acquisition of any of the CBN Stock).
(d) If both the Stock Purchase Agreement and the Merger Agreement
shall be terminated, the provisions of Sections 2(b) and 2(c) above shall
thereupon terminate and be of no effect, unless in either case the waiver set
forth therein has already become effective.
3. Limited Waiver. Except as expressly waived herein, the
Shareholder Agreement shall continue to be, and shall remain, in full force and
effect. Except as expressly set forth herein, this Waiver shall not be deemed
to be a waiver of, or consent to, or a modification or amendment of, any term
or condition of the Shareholder Agreement or to prejudice any right or rights
which LIFE or CBN may now have or may have in the future under or in connection
with the Shareholder Agreement or any of the instruments or agreements referred
to there, including with respect to any "offer," or proposed conversion, in
respect of Class A Stock other than pursuant to the actions specifically
described in Section 2(a) hereof.
4. Third Party Beneficiaries. This Waiver is given in favor of,
is intended to benefit and shall be enforceable by (i) the Class A
Stockholders, (ii) the Purchaser and its Affiliates, (iii) the Company, (iv)
the other parties to the Shareholder Agreement and (iv) all of such persons'
successors and assigns.
5. Counterparts. This Waiver may be executed in one or more
counterparts, each of which shall be an original but all of which shall
constitute one and the same document.
IN WITNESS WHEREOF, each of the undersigned has caused this Waiver to be
executed and delivered by its duly authorized officer as of the date first
above written.
LIBERTY IFE, INC.
By: /s/ David Koff
----------------------------------
Title:
THE CHRISTIAN BROADCASTING
NETWORK, INC.
By: /s/ J. Arbach
----------------------------------
Title: Vice President
<PAGE> 4
Acknowledged and Accepted as of
the date first above written:
M.G. "PAT" ROBERTSON
THE ROBERTSON CHARITABLE REMAINDER UNITRUST
By: /s/ M.G. "Pat" Robertson
-------------------------------------------
Title: M.G. "Pat" Robertson, individually and as trustee
TIMOTHY B. ROBERTSON
THE TIMOTHY AND LISA ROBERTSON CHILDREN'S TRUST
By: /s/ Timothy B. Robertson
-------------------------------------------
Title: Timothy B. Robertson, individually and as trustee
INTERNATIONAL FAMILY ENTERTAINMENT, INC.
By: /s/ M.G. Robertson
-------------------------------------------
Title: Chairman of the Board
FOX KIDS WORLDWIDE, INC.
By: /s/ M. Woods
-------------------------------------------
Title: President
<PAGE> 1
EXHIBIT 7(J)
AMENDED AND RESTATED
SHAREHOLDER AGREEMENT
THIS AMENDED AND RESTATED SHAREHOLDER AGREEMENT, dated as of
September 1, 1995, by and among M.G. ROBERTSON and TIMOTHY B. ROBERTSON,
residents of Virginia (hereinafter collectively referred to as the
"Management"), M.G. Robertson, as trustee of the ROBERTSON CHARITABLE
REMAINDER UNITRUST (the "Charitable Trust"), THE CHRISTIAN BROADCASTING
NETWORK, INC., a Virginia corporation (hereinafter referred to as "CBN"),
LIBERTY IFE, INC. ("Liberty IFE"), a Colorado corporation and a successor in
interest to LIBERTY PROGRAMMING CORPORATION ("Liberty"), a Wyoming corporation
and INTERNATIONAL FAMILY ENTERTAINMENT, INC., a Delaware corporation
(hereinafter referred to as the "Corporation"), amends and restates in its
entirety the Subscription and Shareholder Agreement, dated as of December 11,
1989, as amended through November 9, 1993 (the "Original Agreement"), by and
among Management, CBN, TCI Development Corporation, a Colorado corporation
("TCID"), Tele-Communications, Inc., a Delaware corporation, and the
Corporation. Certain capitalized terms used herein are defined in Section 10
hereof.
WHEREAS, Liberty IFE, a direct wholly owned subsidiary of
Liberty Media Corporation, a Delaware corporation is the holder of $23,000,000
in principal amount of 6% Convertible Secured Notes due 2004 of the Corporation
(the "Notes"), which are currently convertible into 2,070,000 shares of Class B
Stock of the Corporation; and
WHEREAS, the Corporation and Liberty IFE have agreed to amend
and restate that certain Convertible Note Agreement dated as of January 5,
1990, by and between the Corporation and the Christian Broadcasting Network,
Inc. (whose rights and obligations under such agreement have been assigned
through a series of assignments to Liberty IFE), as amended to the date hereof
(the "Convertible Note Agreement") relating to the Notes such that the Notes
will be convertible into 2,070,000 shares of the Corporation's non-voting Class
C Stock upon consummation of the transactions contemplated by that certain
Exchange Agreement (the "Exchange Agreement") between the Corporation, Liberty
and Liberty IFE of even date herewith; and
WHEREAS, Liberty IFE is the holder of 220,000 shares (the
"Liberty IFE Preferred Shares") of Preferred Stock, which are currently
convertible into 3,300,000 shares of Class B Stock; and
WHEREAS, pursuant to the Exchange Agreement, Liberty IFE has
agreed to exchange all of the Liberty IFE Preferred Shares pursuant to an
exchange with Liberty IFE (the "Preferred
<PAGE> 2
Exchange"), pursuant to which all of the Liberty IFE Preferred Shares will be
exchanged for an aggregate of 4,000,000 shares (the "Exchange Shares") of the
Class B Stock, which 4,000,000 shares shall represent full payment both for all
of the Liberty Preferred Shares and any dividends thereon accruing or becoming
payable after January 1, 1995; and
WHEREAS, Liberty IFE has agreed to exchange all of the Liberty
IFE Preferred Shares in the Preferred Exchange; and
WHEREAS, Liberty IFE is the holder of 1,670,986 shares (the
"Liberty IFE Shares") of Class B Stock; and
WHEREAS, subsequent to the Preferred Exchange, Liberty IFE
will be the holder of 5,670,986 shares of Class B Common Stock: and
WHEREAS, pursuant to the Exchange Agreement, the Corporation
has agreed to offer to reacquire all of the Liberty IFE Shares and the Exchange
Shares pursuant to an exchange with Liberty IFE (the "Common Exchange"),
pursuant to which each Liberty IFE Share will and each Exchange Share will be
exchanged for one (1) share of Class C Stock; and
WHEREAS, Liberty IFE has agreed to exchange all of the Liberty
IFE Shares and the Exchange Shares in the Common Exchange; and
WHEREAS, IFE proposed to its stockholders and its stockholders
approved at the 1995 annual meeting of IFE stockholders amendments to certain
provisions of the IFE Amended and Restated Certificate of Incorporation
("Certificate of Incorporation") which were necessary for the consummation of
the Common Exchange; and
WHEREAS, in connection with the execution of the Exchange
Agreement the parties hereto have agreed to amend and restate in its entirety
the Original Agreement to provide certain registration rights to Liberty IFE
pursuant to Section 4 hereof; and
WHEREAS, it is the intent of the parties hereto that this
Amended and Restated Shareholder Agreement amend and restate in its entirety
the Original Agreement and that, from and after the date hereof, the Original
Agreement shall be of no force and effect except to evidence the terms and
conditions under which the parties hereto heretofore incurred obligations and
liabilities to each other.
NOW, THEREFORE, in consideration of the mutual covenants,
undertakings, agreements, representations and warranties hereinafter contained,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged by the parties, it is hereby agreed as follows:
2
<PAGE> 3
1. Right of First Refusal; Go Along Rights. Until
January 5, 2010, Liberty IFE shall have the right to acquire (x) any shares of
Class A Stock offered for sale or transfer by any holder of Class A Stock on
the same terms and price as those shares have been offered to any bona fide
prospective purchaser, but in no event for a price greater than the Fair Value
of such Class A Stock and (y) any shares of Class A Stock proposed to be
converted by any holder of Class A Stock for cash in an amount equal to the
Fair Value of such Class A Stock. Notwithstanding anything to the contrary
contained herein, the right of first refusal provided by the preceding sentence
(the "First Refusal") shall not apply to Permitted Transfers or to the
transfers described in paragraph (g) hereof. The First Refusal shall be subject
to the following terms:
(a) Notice. The party desiring to sell or
convert any shares of Class A Stock (the "Selling Party"), in the case of a
proposed sale, shall give Liberty IFE and CBN written notice of the offer for
sale including the number of shares to be sold, the offering price and payment
terms and representing and warranting that, to the best of such party's
knowledge, the offering price and other terms of the offer have not been
established for the purpose of circumventing the First Refusal, that the
offering price reflects the price the offeror would be willing to offer in an
isolated transaction consisting solely of the purchase of the shares of Class A
Stock offered to be purchased absent any other related or contemporaneous
transaction between the offeror and the offeree and otherwise is bona fide and
in good faith, and enclosing a copy of the offer or, in the case of a proposed
conversion, shall give Liberty IFE and CBN written notice thereof, including
the number of shares to be converted and the Fair Value of such shares.
(b) Exercise. In order to be effective, the
First Refusal must be exercised against all shares of Class A Stock being
offered for sale or proposed to be converted; the failure of Liberty IFE to
exercise the First Refusal against all such shares being offered for sale or
proposed to be converted shall constitute a waiver of the First Refusal as to
that specific sale. Liberty IFE shall have thirty (30) days from receipt of the
written notice provided for in Section 1(a) to notify the Selling Party whether
it will exercise the First Refusal.
(c) Consummation After Exercise. Should the
First Refusal be exercised, Liberty IFE shall consummate said purchase within
sixty (60) days thereafter, subject to an automatic extension of such
consummation for up to one hundred twenty (120) days as necessary to obtain any
required governmental approvals.
(d) Rights Not Exercised; Conditions on Sale. If
the First Refusal has not been exercised in a timely manner as to all of the
shares of Class A Stock offered for sale hereunder or proposed to be converted,
or if Liberty IFE is unable to consummate its purchase of such shares after
timely exercise of its First Refusal due to an inability to obtain any required
governmental approvals within the period required by Section 1(c) above, the
3
<PAGE> 4
Selling Party shall have sixty (60) days thereafter in which to consummate the
sale of such shares to the same Person on the same terms, or to convert such
shares into Class B Stock, as specified in its notice to Liberty IFE; provided,
however, that it shall be a condition upon the right of the Selling Party to so
sell its shares of Class A Stock, or to sell the Class B Stock into which such
Class A Stock has been converted, to cause the purchaser of such shares to also
purchase the Covered Securities held by either CBN or Liberty IFE (on the same
terms and at the same price as specified in the Selling Party's initial notice
to Liberty IFE), if either CBN or Liberty IFE shall have given notice, no later
than five (5) days after the expiration of all applicable periods referred to
in Section 1(b) or Section 1(c), as the case may be, of its desire to require
such sale and purchase of its Covered Securities. The highest price per share
which is offered for the shares of Class A Stock or Class B Stock, as the case
may be, subject to the First Refusal shall be the purchase price for any Common
Stock tendered by Liberty IFE or CBN, without regard to any distinctions in
class, and Notes shall be treated as if converted, and a price computed based
on the aggregate number of shares of Class B or Class C Stock into which such
Notes could be converted. Where no specific price per share is readily
determinable, an appraisal of the Fair Market Value of the Corporation shall be
determined as of the date of the notice by the Selling Party provided for
herein pursuant to the procedure set forth in Section 2(b) hereof, and the
price per share shall be determined by dividing such Fair Market Value so
determined by the number of issued and outstanding shares of Common Stock of
the Corporation on a fully diluted basis (as determined in accordance with
generally accepted accounting principles). Should the Selling Party fail to
consummate the contemplated sale or conversion within the said sixty (60) day
period on exactly the same terms and to the same bona fide purchaser as stated
in the notice provided for herein, then no sale of shares of Class A Stock
shall thereafter be effectuated without the Selling Party re-offering the same,
pursuant to the terms of this Section 1.
(e) Continuing Nature of Right. The failure of
Liberty IFE to exercise the First Refusal to purchase shares of Class A Stock
offered by any holder of Class A Stock shall not affect the First Refusal as to
any other shares of Class A Stock (held by such holder or any other Person)
subsequently offered for sale or proposed to be converted.
(f) Transfer to New Shareholders. Upon the sale
and transfer of any Covered Securities either to a Permitted Transferee, a
party hereto, or a bona fide purchaser under this Section 1, the certificates
representing such Covered Securities shall be returned to the Corporation and
replacement securities issued to the purchaser or transferee only after the
Corporation has received satisfactory evidence that said purchaser or
transferee has executed and delivered to each party to this Agreement an
agreement in writing that such purchaser or transferee shall receive and hold
such Covered Securities subject to all the
4
<PAGE> 5
terms, conditions, burdens, and benefits of this Agreement as if such purchaser
or transferee were initially a party hereto, and subject to the same
restrictions on transfer as was the transferor of such Covered Securities.
(g) Exception to Right of First Refusal.
Notwithstanding anything to the contrary Contained in this Section 1,
Management or the Charitable Trust or any Permitted Transferee of Management or
the Charitable Trust may collectively convert up to an aggregate of 1,075,000
shares of Class A Stock to Class B Stock (as such number of shares may be
adjusted to reflect any subdivision of outstanding shares of Class A Stock by
reclassification, stock split, stock dividend or otherwise or any combination
of outstanding shares of Class A Stock by reverse stock split, reclassification
or otherwise after the date hereof), and freely dispose of such Class B Stock
to any Person, in each case free of the provisions of this Agreement, including
but not limited to the provisions of this Section 1.
(h) Certain Transfers to Charitable
organizations; Go Along Rights. In the event any holder of Class A Stock
desires to make a Permitted Transfer of any shares of Class A Stock to a
Charitable Organization, and the Class B Stock is not publicly traded at that
time, Liberty IFE shall have the right to require such holder of Class A Stock
to cause the Charitable Organization purchasing such Class A Stock to also
purchase the Covered Securities held by Liberty IFE on the terms and conditions
set forth in Section l(d) hereof.
2. Put Option.
(a) Liberty IFE Put. Upon the occurrence of both
of the events described in clauses (x) and (y) of this Section 2 (a) prior to
January 5, 2010: (x) the death of both M.G. Robertson and Timothy B. Robertson
or, alternatively, the disassociation of both of them from the management and
governance of both CBN and the Corporation and (y) the holding of Voting Power
over at least a majority of the outstanding shares of Class A Stock on the date
of determination by either CBN or the heirs of Timothy B. Robertson (the
"Heirs"), then Liberty IFE may, at its option, require, subject to clause (vi)
below, the purchase of all of the Covered Securities held by it on June 30,
1995 (including any Class B Stock or Class C Stock into which any of such
Covered Securities may be converted, and any securities that may hereafter be
issued with respect to such Covered Securities) by CBN or the Heirs, as the
case may be, at the Fair Market value of such Covered Securities on the
following terms (the "Put Option"):
(i) CBN or the Heirs, as the case may
be, shall give Liberty IFE written notice of Liberty IFE's right to exercise
the Put Option (the "Put Option Notice") promptly after the occurrence of both
of the events described in clauses (x) and (y) of Section 2(a) above. Within
six (6) months after the receipt of such notice, Liberty IFE may notify both
CBN and the Heirs in
5
<PAGE> 6
writing of its intent to exercise the Put Option (the "Put Exercise Notice").
In the event Liberty IFE does not so notify both CBN and the Heirs, such Put
option shall be deemed to have been waived by Liberty IFE.
(ii) The Covered Securities subject to
the Put Option shall be purchased by whomever of CBN or the Heirs (the "Put
Party") possesses Voting Power over a majority of the outstanding shares of
Class A Stock on the date of the Put Option Notice.
(iii) Within 30 days after its receipt of
the Put Exercise Notice, the Put Party, at its option, may notify Liberty IFE
in writing of the Put Party's intention to seek a bona fide purchaser for (x)
all of the outstanding capital stock of the Corporation or (y) all or
substantially all of the assets and business of the Corporation. In such event,
the purchase of the Covered Securities subject to the Put Option shall be
delayed for a period of 180 days from the date of the Put Exercise Notice
pending the sale of the Corporation's capital stock or assets. Any such sale
shall be for an amount in cash which results in Liberty IFE receiving an amount
equal to not less than 95% of the Fair Market Value, as of the date of the Put
Exercise Notice, of the Covered Securities subject to the Put Option. If a
sale as aforesaid is not consummated within the foregoing 180-day period, the
Put Party shall purchase the Covered Securities subject to the Put Option
within 30 days after the expiration of such period for an amount equal to the
Fair Market Value of such Covered Securities. Liberty IFE will cooperate with
the Put Party in its efforts to sell the Corporation's capital stock or assets
and will use reasonable commercial efforts to consummate any such sale.
(iv) Promptly after receipt by the Put
Party of the Put Exercise Notice, an appraisal shall be conducted pursuant to
the provisions of Section 2(b) hereof to determine the Fair Market Value as of
the date of the Put Exercise Notice of the Covered Securities subject to the
Put Option. The Corporation shall afford each appraiser and its
representatives, upon reasonable notice, full access to the officers and
employees and the books, records and properties of the Corporation and its
subsidiaries.
(v) Subject to Section 2(a)(iii) above,
within sixty (60) days after receipt of said appraisal, the Put Party shall
tender to Liberty IFE payment equal to the Fair Market Value of the Covered
Securities subject to the Put Option and Liberty IFE shall tender such
securities to the Put Party, subject to an automatic extension of such
consummation for up to one hundred sixty (160) days as necessary to obtain any
required governmental approvals.
(vi) In lieu of immediate cash payment,
the Put Party may, at its or their option, issue notes, due in five years, with
annual interest payments at the prime rate of Crestar Bank, Richmond, Virginia,
or the successor thereto, as consideration for
6
<PAGE> 7
the purchase of Liberty IFE's securities. Payment to Liberty IFE under such
notes shall be secured by a perfected first security interest in the securities
being conveyed by Liberty IFE, and the Put Party shall execute and deliver to
Liberty IFE such documents as may be reasonably necessary to perfect said
security interest. Said first security interest shall be promptly released by
Liberty IFE upon its receipt of payment in full of said notes.
(b) Appraisal. Any appraisal required under this
Section 2 or under Section 1(d) to determine Fair Market Value shall be
governed by the following procedure:
(i) At the time Liberty IFE gives the
Put Exercise Notice, or at the time CBN or Liberty IFE, as the case may be,
gives its notice pursuant to Section 11(d), it shall specify the name of a
Qualified Independent Appraiser to participate in the determination of the Fair
Market Value of the securities to be appraised.
(ii) The Put Party, or the Selling Party
in the case of an appraisal required under Section i(d), shall have ten (10)
days to specify the name of a second Qualified Independent Appraiser to
participate in the determination of the Fair Market Value of said securities.
(iii) The two appraisers shall have thirty
(30) days to complete independent appraisals of the Fair Market Value of said
securities, and they shall each submit a written report of their valuation, and
the basis therefor, to Liberty IFE and the Put Party, in the case of an
appraisal required under this Section 2, or to CBN or Liberty IFE, as the case
may be, and to the Selling Party, in the case of an appraisal required under
Section 1(d). "Fair Market Value" means, with respect to the Corporation, the
fair market value of the Corporation as of the appraisal date on a going
concern basis (as a sale of stock), taking into account such considerations
(including but not limited to tax considerations which are specific to a sale
of stock) as would customarily affect the price at which a willing seller would
sell and a willing buyer would buy a comparable business as a going concern in
an arm's length transaction. In determining the Fair Market Value of a share of
Common Stock and of a Convertible Security that is convertible into shares of
Common Stock, such Convertible Security shall be deemed converted into such
shares, and the Fair Market value per share of Common Stock shall equal the
quotient of (x) the Fair Market Value of the Corporation as of the appraisal
date, divided by (y) the total number of shares of Common Stock outstanding (or
deemed outstanding upon the conversion of Convertible Securities) as of such
appraisal date, plus the number of shares of Common Stock issuable upon
exercise of outstanding warrants, rights and options to purchase or acquire
Common Stock to the extent any such exercise would result in a profit to the
holder of the related warrant, right or option given the Fair Market Value per
share so determined. In no event, however, shall the Fair Market Value of any
Note be less than the unpaid principal plus
7
<PAGE> 8
accrued and unpaid interest thereon and in no event shall the fair market value
of any Preferred Stock be less than the liquidation preference plus accrued and
unpaid dividends in each case as of the date of purchase.
(iv) If the lesser of the two valuations
fixed by the two appraisers is ninety percent (90%) or more of the higher of
the two valuations, then the Fair Market value shall conclusively be the
average of the two appraisals (determined by adding the appraisals and dividing
by the number two (2)).
(v) If the lesser of the two valuations
fixed by the two appraisers is less than ninety percent (90%) of the higher of
the two valuations, then the two appraisers shall jointly choose a third
Qualified Independent Appraiser, who shall have an additional fifteen (15) days
to complete a third written appraisal of the Fair Market Value of the relevant
securities. The Fair Market Value fixed by the third appraiser will be
compared with the previous two appraisals, and the Fair Market Value shall
conclusively be the average of the two appraisals nearest in dollar amount
(determined by adding the two appraisals and dividing by the number two (2)).
(vi) Each party shall pay the fees and
expenses of the appraiser it has chosen, and, if a third appraiser is chosen,
the cost of the third appraisal shall be paid equally by both parties, except
that if the appraisal is required pursuant to Section 1(d), the Selling Party
shall pay the fees and expenses of all appraisers chosen.
(c) Warranties of Title. As a condition to the
exercise of the Put Option, Liberty IFE shall furnish to the purchaser of its
securities of the Corporation pursuant thereto full warranties of title.
(d) Regulatory Approval. It shall be a condition
to the closing of the purchase of the securities subject to the Put Option that
all governmental approvals required to be obtained by applicable law with
respect to such purchase shall have been obtained, to the extent the failure to
obtain such approvals (x) would prevent Liberty IFE or the Put Party from
selling or purchasing, respectively, such securities or (y) would have a
material adverse effect on the business, results of operations or financial
condition of the Corporation. All parties hereto mutually covenant, one to the
other, that they will use their best efforts (without unreasonable cost or
action) to obtain such regulatory and governmental approvals, provided,
however, that the failure to obtain such approvals shall not be a breach or
default of any party's obligations hereunder.
3. Incidental Registration Rights.
(a) If, at any time or from time to time, the
Board of Directors of the Corporation shall authorize the registration (a
8
<PAGE> 9
"Registration") under the Act of any Common or Preferred Stock or Notes (or
any other securities issued with respect thereto), in each case other than with
respect to the initial public offering of Class B Stock on Form S-1,
registration number 33-45967 (the "Initial Public Offering"), in the case of
each such filing (hereinafter, as amended and supplemented, referred to as a
"Registration Statement"), the Corporation shall notify Liberty IFE and CBN
(each a "Designated Holder"), so long as such party then holds Covered
Securities, at the address of such Designated Holder as shown on the
Corporation's records, of such proposed filing. At the request of any
Designated Holder in writing made not more than fifteen (15) days after the
date of the mailing of such notification, the Corporation shall include in such
Registration Statement, subject to Section 3(b), such number of such
Designated Holder's Included Securities as such Designated Holder shall specify
in such request. As used herein, the term "Included Securities" means Common
Stock, Preferred Stock or Notes (or any other securities issued with respect
thereto) of the Corporation proposed to be included in such Registration
Statement by the Corporation or any other Person.
(b) If the managing underwriter or underwriters,
if any, advise a Designated Holder making a request under Section 3(a) in
writing that in its or their opinion or, in the case of a Registration not
being underwritten, the Corporation shall reasonably determine (and notify such
Designated Holder of such determination) after consultation with an investment
banker of nationally recognized standing that the number or kind of securities
proposed to be sold in such Registration will adversely affect the success of
such offering, the Corporation will include in such Registration the Included
Securities which, in the opinion of such underwriter or underwriters, or the
Corporation, as the case may be, may be sold as follows: (i) first, the
Included Securities the Corporation proposes to sell or to register for the
benefit of the Company, (ii) second, the Included Securities requested to be
included in such Registration by CBN; (iii) third, the Included Securities
requested to be included in such Registration by Liberty IFE, and (iv) fourth,
the Included Securities held by any Persons ("Other Investors") other than the
Designated Holders requested to be included in such Registration. To the extent
that the number of Included Securities to be included in the Registration
pursuant to any of clause (ii), (iii) or (iv) above exceeds the number which
the Corporation has been advised or has determined can be sold, the number of
Included Securities which may be included in such Registration shall be further
allocated pro rata among CBN, Liberty IFE and the Other Investors, as the case
may be, based on the number of Included Securities that each such participant
shall have requested to be included therein. Notwithstanding the foregoing, if
as a result of the above provisions of this Section 3(b) such Registration
Statement includes fewer than all of the Included Securities which Liberty IFE
or CBN requested to be included therein, the balance of such securities
nonetheless shall be included therein if Liberty IFE or CBN, as the case may
be, agrees to postpone the sale of such
9
<PAGE> 10
balance until after the expiration of a sixty (60) day period beginning on the
effective date of such Registration Statement or until such earlier time as all
other securities included in such Registration Statement have been disposed of
pursuant thereto, in which event the period during which the Registration
Statement is required to be kept effective pursuant to Section 3(c) shall be
extended for a period extending beyond one (1) year from the initial effective
date thereof.
(c) With respect to any Registration, the
Corporation will as expeditiously as practicable:
(i) prepare and file with the Securities
and Exchange Commission a Registration Statement and use its reasonable efforts
to cause such Registration Statement to become effective;
(ii) prepare and file with the Securities
and Exchange Commission such amendments and post-effective amendments to the
Registration Statement as may be necessary to keep the Registration Statement
effective for as long as reasonably required to permit the distribution of the
securities covered thereby, in accordance with the plan(s) of distribution
described therein; cause the prospectus to be supplemented by any required
prospectus supplement, and as so supplemented to be filed pursuant to Rule 424
under the Act; and comply with the provisions of the Act applicable to it with
respect to the disposition of all securities covered by such Registration
Statement during the applicable period in accordance with the intended methods
of disposition by the sellers thereof set forth in such Registration Statement
or in the prospectus, as supplemented;
(iii) furnish to any person holding
securities included in such Registration Statement and the underwriter or
underwriters, if any, without charge, at least one signed copy of the
Registration Statement and any post-effective amendment thereto, upon request,
as soon as such documents become available to the Corporation, and such number
of conformed copies thereof and such number of copies of the prospectus
(including each preliminary prospectus) and any amendments or supplements
thereto, and any documents incorporated by reference therein, as such person or
underwriter may reasonably request in order to facilitate the disposition of
the securities being sold by such person;
(iv) notify each person holding
securities included in such Registration Statement, at any time when a
prospectus relating thereto is required to be delivered under the Act, of the
happening of any event as a result of which the prospectus included in such
Registration Statement contains any untrue statement of a material fact or
omits to state a material fact necessary to make the statements therein (in the
case of the prospectus or any preliminary prospectus, in light of the
circumstances under which they were made) not misleading, and the Corporation
will, as promptly as practicable thereafter, prepare and file with the
Securities and Exchange Commission and furnish a
10
<PAGE> 11
supplement or amendment to such prospectus so that, as thereafter delivered to
the purchasers of such securities, such prospectus will not contain any 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, in light of the
circumstances under which they were made, not misleading;
(v) enter into customary agreements
(including an underwriting agreement in customary form in the case of an
underwritten offering), make such representation and warranties to the sellers
and underwriter as in form and substance and scope are customarily made by
issuers to underwriters in underwritten offerings and take such other actions
as the holders of a majority of the securities or the managing underwriter or
agent, if any, reasonably require in order to expedite or facilitate the
disposition of such securities;
(vi) use its reasonable efforts to obtain
a "cold comfort" letter from the Corporation's independent public accountants
in customary form and covering such matters of the type customarily covered by
"cold comfort" letters as the holders of a majority of the securities being
sold or the managing underwriter reasonably request;
(vii) use its reasonable efforts to obtain
an opinion or opinions from counsel for the Corporation in customary form and
reasonably satisfactory to such holders, underwriters or agents and their
counsel;
(viii) make generally available to its
security holders earnings statements, which need not be audited, satisfying the
provisions of Section 11 (a) of the Act no later than ninety (90) days after
the end of the 12-month period beginning with the first month of the
Corporation's first fiscal quarter commencing after the effective date of the
Registration Statement, which earnings statements shall cover said 12-month
period; and
(ix) on or prior to the date on which the
Registration Statement is declared effective, use its reasonable efforts to
register or qualify, and cooperate with the persons holding securities included
in such Registration Statement, the managing underwriter or underwriters or
agent, if any, and their counsel, the securities covered by the Registration
Statement for offer and sale under the securities or blue sky laws of each
state and other jurisdiction of the United States as any such person or
underwriter reasonably requests in writing, use its reasonable efforts to keep
each registration or qualification effective, including through new filings, or
amendments or renewals, during the period such Registration Statement is
required to be kept effective and do any and all other acts or things
reasonably necessary or advisable to enable the disposition in all such
jurisdictions of the securities covered by the applicable Registration
Statement provided that the Corporation will not be required to qualify
generally to do business in any jurisdiction
11
<PAGE> 12
where it is not then so qualified or to take any action which would subject it
to general service of process in and such jurisdiction.
(d) The Designated Holders and the Corporation
agree not to effect (except pursuant to such Registration Statement) any public
sale or distribution of Included securities, including a sale pursuant to Rule
144 (or any similar provision then in force) under the Act, during the ten (10)
business days prior to the date of anticipated filing of a Registration
Statement, and during the ninety (90) day period beginning on the effective
date of such Registration Statement (or such earlier time prior to the
expiration of such period which is 30 days after the date all the Included
Securities included in such Registration Statement have been disposed of
pursuant thereto, subject to any lock-up agreement between any Designated
Holder and the underwriters of such offering).
(e) It shall be a condition precedent to the
Corporation's obligation to register any Designated Holder's Included
Securities pursuant to the provisions hereof that such Designated Holder shall
provide promptly to the Corporation such information as the Corporation may
reasonably request at any time and from time to time upon reasonable prior
notice to enable the Corporation to comply with any applicable law or
regulation or to facilitate the preparation of the Registration Statement.
(f) The Corporation shall pay all of the expenses
of each Registration, except that each Designated Holder shall pay all fees and
expenses of such Designated Holder's counsel and the underwriting discounts and
fees and transfer taxes applicable to the securities of such Designated Holder
included in such Registration.
(g) The Corporation shall indemnify and hold
harmless each Designated Holder who has securities included in a Registration
Statement, and any underwriter (as defined in the Act) of such Designated
Holder's securities, and each person, if any, who controls such Designated
Holder or such underwriter within the meaning of the Act (but only if such
Designated Holder or such underwriter agrees to indemnify the persons mentioned
in Section 3(h) in the manner set forth in Section 3(h)) from and against,
and will reimburse such Designated Holder and each such underwriter and
controlling person with respect to, any and all claims, losses, damages,
liabilities, costs and expenses, insofar as such claims, losses, damages,
liabilities, costs and expenses are caused by any untrue statement or alleged
untrue statement of any material fact contained in such Registration Statement,
any prospectus contained therein or any amendment or supplement thereto, or
arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading; provided, however, that the Corporation
shall not be liable in any such case to the extent that any such claim, loss,
damage, liability, cost, or expense arises out of or is based upon any untrue
statement or alleged untrue
12
<PAGE> 13
statement or omission or alleged omission so made in conformity with
information furnished by such Designated Holder, such underwriter, or such
controlling person in writing specifically for inclusion therein.
(h) In the event that any Designated Holder'
securities are included in a Registration Statement, such Designated Holder
shall indemnify and hold harmless the Corporation, each of its directors, each
of its officers who have signed such Registration Statement, and each person,
if any, who controls the Corporation within the meaning of the Act from and
against, and will reimburse the Corporation and each such director, officer and
controlling person with respect to, any and all claims, losses, damages,
liabilities, costs, and expenses to which the Corporation or any such director,
officer, or controlling person may become subject under the Act or otherwise,
insofar as such claim, losses, damages, liabilities, costs, or expenses are
caused by any untrue statement or alleged untrue statement of any material fact
contained in any Registration Statement, any prospectus contained therein, or
any amendment or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading in
each case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was so made in
conformity with written information furnished by such Designated Holder for
inclusion therein.
(i) Promptly after receipt by an indemnified
party, pursuant to the provisions of Section 3(f) or 3(g) hereof, of notice of
the commencement of any action, such indemnified party shall, if a claim
thereof is to be made against the indemnifying party pursuant to the provisions
of said Sections 3(f) or 3(g), notify the indemnifying party of the
commencement thereof, but the omission so to notify the indemnifying party will
not relieve it from any liability which it may have to any indemnifying party
otherwise than hereunder. In case such action is brought against any
indemnified party, and it notifies the indemnifying party of the commencement
thereof, the indemnifying party shall have the right to participate in, and to
the extent that it may wish, jointly with any other indemnifying party
similarly notified, to assume the defense thereof, at the sole expense of the
indemnifying party, with counsel reasonably satisfactory to such indemnified
party, and after notice of its election so to assume the defense thereof, the
indemnifying party shall not be liable to such indemnified party, pursuant to
the provisions of said Sections 3 (f) or 3 (g), for any legal or other expense
subsequently incurred by such indemnified party in connection with the defense
thereof, other than reasonable costs of investigation.
(j) If for any reason the indemnification
provided for in Section 3 (f) or 3 (g) is unavailable to an indemnified party,
then the indemnifying party shall contribute to the amount paid or payable by
the indemnified party as a result of such loss, claim,
13
<PAGE> 14
damage, or liability in such proportion as is appropriate to reflect not only
the relative benefits received by the indemnified party and the indemnifying
party, but also the relative fault of the indemnified party and the
indemnifying party, as well as any other relevant equitable considerations,
provided that no Designated Holder shall be required to contribute an amount
greater than the difference between the net proceeds received by such
Designated Holder with respect to the sale of any Included Securities of such
Designated Holder and all amounts already contributed by such Designated Holder
with respect to such claims. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of fraudulent
misrepresentation.
(k) No Designated Holder may participate in any
underwritten registration hereunder unless such Designated Holder (a) agrees to
sell its securities included therein on the basis provided in any underwriting
arrangements approved by the persons or entities entitled to approve such
arrangements and (b) accurately completes and executes all questionnaires,
powers of attorney, underwriting agreements and other documents customarily
required under the terms of such underwriting arrangements.
4. Demand Registration Rights.
(a) At any time and after the date hereof, each
of Liberty IFE and CBN (each an "Initiating Holder"), so long as such
Initiating Holder continues to hold at least 300,000 shares of Class B Stock
(including Class B Stock issuable upon conversion of Convertible Securities)
(as such number of shares may be adjusted to reflect any subdivision of
outstanding shares of Class B Stock by reclassification, stock split, stock
dividend or otherwise or any combination of outstanding shares of Class B Stock
by reverse stock split, reclassification or otherwise) may make a written
request to the Corporation (specifying that it is being made pursuant to this
Section 4) that the Corporation file a registration statement under the Act (or
a similar document pursuant to any other statute then in effect corresponding
to the Act) covering the registration of all or any portion of the Covered
Securities held by such Initiating Holder. In such event, the Corporation
shall use its best efforts to cause to be registered under the Act all Covered
Securities that the Initiating Holder has requested be registered.
(b) If the Initiating Holder intends to
distribute the Covered Securities included in its request by means of an
underwritten offering, it shall so advise the Corporation as a part of its
request pursuant to Section 4(a) above. In such event, the Initiating Holder
and the Corporation shall enter into an underwriting agreement in customary
form with the underwriter or underwriters thereof. Such underwriter or
underwriters shall be selected by the Initiating Holder and shall be approved
by the Corporation, which approval shall not be unreasonably withheld.
14
<PAGE> 15
(c) Notwithstanding any provision of this
Agreement to the contrary, the Corporation shall not be required to effect a
registration pursuant to this Section 4 during the ten (10) business days prior
to the date of anticipated filing of a registration statement by the
Corporation, and during the ninety (90) day period beginning on the effective
date of such registration statement (or such earlier time prior to the
expiration of such period which is 30 days after the date all the securities
included in such registration statement have been disposed of pursuant thereto,
subject to any lock-up agreement between the Initiating Holder and the
underwriters of any such offering) pertaining to a public offering of
securities for the account of the Corporation; provided, however, that the
Corporation may refuse to register shares of Covered Securities of an
Initiating Holder pursuant to this Section 4(c) no more than once in any
12-month period.
(d) As of the date of this Agreement, the
Corporation shall be obligated to effect only five (5) registrations for
Liberty IFE and four (4) registrations for CBN pursuant to this Section 4 and
shall not be required to effect more than one (1) such registration for each of
Liberty IFE and CBN in any 12 month period; the Corporation shall pay all of
the expenses of each such registration, except that the Initiating Holder shall
pay all fees and expenses of such Initiating Holder's counsel and the
underwriting discounts and fees and transfer taxes applicable to the securities
of the Initiating Holder included in such registration; provided, however, that
the Corporation shall have no obligation to pay any such costs or expenses, and
the Initiating Holder shall pay all such costs and expenses incurred by the
Corporation and such Initiating Holder as a result of the Initiating Holder's
request pursuant to this Section 4, in the event the Initiating Holder
determines not to go forward with any such registration for a reason other than
the inability of the underwriters, if any, to market the Covered Securities of
the Initiating Holder included in such registration after a good faith attempt
to do so, and no other securities are sold by the Corporation or any other
holder of securities of the Corporation pursuant to such registration. A
registration shall not be deemed a demand registration pursuant to this Section
4 unless the registration statement filed with respect thereto includes at
least 80% of the Covered Securities requested to be included therein by the
Initiating Holder and such registration statement is declared effective under
the Act.
(e) The rights and obligations of the Designated
Holders and the Corporation set forth in paragraphs (c), (e), (g), (h), (i),
(j) and (k) of Section 3 shall be applicable to the Initiating Holder and the
Corporation, respectively, in connection with demand registrations made
pursuant to this Section 4.
5. Initial Public offering. [Deleted]
15
<PAGE> 16
6. Covenants of the Corporation. From and after the date hereof,
the Corporation covenants and agrees that it will comply with the following
provisions:
(a) Additional Issuances of Class A Stock. The
Corporation agrees that it will issue no additional Class A Stock, except
through a stock dividend or stock split in which the Class B Stock (and Class C
Stock, if any) is equally dividended or split.
(b) Rights in Future offering. The Corporation agrees
that if hereafter the Corporation at any time or from time to time proposes to
issue (an "Issuance") any Class B Stock, Class C Stock or Preferred Stock or
any Rights to acquire Class B Stock, Class C Stock or Preferred Stock or any
other capital stock or Rights to acquire any other capital stock of the
Corporation, Management, the Charitable Trust, Liberty IFE and CBN shall be
offered the opportunity to acquire from the Corporation, on the same terms as
such securities would be offered to others (provided, that if such terms
include any non-cash consideration the person exercising its Preemptive Right
(as defined below) may substitute cash of equivalent value in an amount
determined in good faith by the Board of Directors of the Corporation and;
provided further, that in the case of an Issuance made pursuant to a public
offering,the price at which the securities may be purchased pursuant to a
Preemptive Right will be equal to the price to the public of the securities
being offered in such public offering), a number of shares of the class and
series to be offered in such Issuance to be determined as follows (as to each
party, all "Preemptive Right"): (i) in the case of an Issuance of shares of
Preferred Stock or Rights to acquire Preferred Stock, Liberty IFE shall be
offered the exclusive right to acquire all or any part of such shares or
Rights, provided that if Liberty IFE fails to exercise this Preemptive Right
with respect to any particular Issuance, such Preemptive Right shall lapse with
regard to that Issuance only and (ii) in the case of an Issuance of shares, or
Rights to acquire shares, of any other capital stock ranking senior to or on a
parity with the Preferred Stock as to dividends, rights on liquidation or
redemption, or in the case of an Issuance of shares or Rights to acquire
shares, of Class B Stock, Class C Stock or any other capital stock of the
Corporation, except capital stock and Rights referred to in clause (i) of this
sentence, Management, the Charitable Trust, Liberty IFE and CBN shall each be
offered the right to acquire up to such number of such shares or Rights as will
result in their each owning of record the same percentage (rounded to the
nearest whole share) of such class of capital stock or of such Rights after the
Issuance (and the exercise of this Preemptive Right by each of such parties) as
they each owned of record of the Class B Stock prior to the Issuance
(calculated in each case on a fully diluted basis, both before and after the
Issuance). The Corporation shall give prompt notice (the "Corporation Notice")
of a proposed Issuance subject to the terms of this Section 6 (b), and the
number of shares or Rights proposed to be issued in such Issuance, to
Management, the Charitable Trust, Liberty IFE and CBN; provided that in the
case of an Issuance of Preferred Stock or
16
<PAGE> 17
Rights to acquire Preferred Stock pursuant to clause (i) of this paragraph, the
Corporation shall be required to give notice of such Issuance only to Liberty
IFE. Such Corporation Notice shall be given by facsimile transmission or by
overnight courier guaranteeing next day delivery. Following receipt of a
Corporation Notice, this Preemptive Right may be exercised, based upon the
number of shares or Rights proposed to be issued in such Issuance, by
Management, the Charitable Trust, Liberty IFE or CBN giving written notice (the
"First Purchase Notice") to the Corporation, which notice must be received by
the Corporation on or before the tenth (10th) Business Day after delivery of
the Corporation Notice (the "Election Date"), such party or parties shall be
deemed to have waived its Preemptive Right with regard to that Issuance (each
party electing to exercise its Preemptive Right, an "Electing Party" and,
collectively, the "Electing Parties"). If the Corporation receives a First
Purchase Notice from any of the parties hereto, then, the Corporation shall, on
or before the third (3rd) Business Day after the Election Date, provide written
notice (the "Second Corporation Notice"), by facsimile transmission or
overnight courier guaranteeing next day delivery, to each Electing Party as to
the number of shares or Rights each Electing Party is entitled to purchase,
based upon the number of shares or Rights proposed to be issued in such
Issuance and the maximum number of shares or Rights issuable to the Electing
Parties in the aggregate pursuant to their exercise of their Preemptive Rights.
On or before the fifth (5th) business Day after the delivery of the Second
Corporation Notice to each Electing party (the "Exercise Date"), each Electing
Party shall notify the Corporation in writing (the "Second Purchase Notice") of
the number of shares or Rights such Electing Party will purchase, which notice
will be binding as to the number of shares specified therein and subject only
to the closing of such Issuance; provided that if the Corporation has not
received a Second Purchase Notice from an Electing Party on or before the
Exercise Date, such party or parties shall be deemed to have waived its
Preemptive Right with regard to any such shares or Rights. The Corporation
shall promptly notify the Electing Party of the time, date and place of closing
of the Issuance (the "Closing Notice"), which shall be determined by the
Corporation in its sole discretion. Failure to make timely payment for such
shares or Rights subject to a Preemptive Right in accordance with the terms of
the Closing Notice shall be deemed a waiver of the Preemptive Right with regard
to that Issuance.
Notwithstanding the foregoing, the Preemptive Rights shall not
apply (i) to any issuance of Class B or Class C Stock (or securities
convertible into or exchangeable for, or options to purchase, Class B or Class
C Stock) to employees or directors of the Corporation or any subsidiary,
pursuant to any plan, arrangement or program in which the Corporation
participates, whether now existing or hereafter created and as may be amended
from time to time, including, without limitation, the Corporation's Stock
Incentive Plan, Senior Stock Incentive Plan or (ii) to any issuance, pro rata
to all holders of Class B or Class C Stock or Preferred Stock, of Class B or
Class C Stock or Preferred Stock (or
17
<PAGE> 18
securities convertible into or exchangeable for, or options to purchase, Class
B or Class C Stock or Preferred Stock) as a dividend on, subdivision of, or
other distribution in respect of, the Class B or Class C Stock or Preferred
Stock.
(c) Status of Dividends on Preferred Stock. The
Corporation covenants and agrees for the benefit of Liberty IFE that, for all
tax, financial and regulatory purposes, to the extent permitted by law and the
Corporation's independent auditors, the Corporation will treat the Preferred
Stock as equity capital and the dividends paid thereon as dividends on equity
capital. In addition, so long as no cost would be incurred by the Corporation
as a result, the Corporation shall cooperate with and support Liberty IFE or a
Permitted Transferee of Liberty IFE of Preferred Stock, in any litigation,
appeal or other proceeding challenging or contesting any ruling, technical
advice, finding or determination of the Internal Revenue Service that dividends
paid on such Preferred Stock out of the Corporation's current or accumulated
earnings and profits are not eligible for the dividends received deduction
provided by Section 243 of the Internal Revenue Code of 1986, as amended, or
any successor provision.
(d) Programming Theme Changes. So long as Liberty IFE or
CBN or any Affiliate of Liberty IFE or CBN holds at least 300,000 shares of
Class B Stock or Class C Stock (including Class B Stock or Class C Stock
issuable upon conversion of Convertible Securities) (as such number of shares
may be adjusted to reflect any subdivision of outstanding shares of Class B
Stock or Class C Stock by reclassification, stock split, stock dividend or
otherwise or any combination of outstanding shares of Class B Stock or Class C
Stock by reverse stock split, reclassification or otherwise after the date
hereof) the Corporation shall not, without the consent of Liberty IFE and/or
CBN, as the case may be, which consent shall not be unreasonably withheld,
directly or indirectly, make any significant change in the theme of the
Programming for The Family Channel, the basic cable television network owned
and operated by the Corporation.
(e) Affiliate Transactions. Any transaction between the
Corporation and any Affiliate of the Corporation shall be (i) on terms no less
favorable to the Corporation than would be available in a similar transaction
concluded on an arms' length basis with an independent third party and (ii)
approved by the Audit Committee of the Corporation. No Material Transaction
shall be consummated unless the material terms of such transaction have been
approved in advance by Liberty IFE and CBN. No such approval shall be withheld
unreasonably. In the event the Corporation intends to enter into any Material
Transaction, it shall give written notice of said intent to Liberty IFE and CBN
(which notice shall contain the material terms of such transaction), and
Liberty IFE and CBN shall have five (5) days in which to consent or object to
such transaction. If Liberty IFE or CBN neither consents nor objects within
such period, consent shall be conclusively presumed. The special consent rights
granted under this Section 6(e) shall
18
<PAGE> 19
lapse as to CBN or as to Liberty IFE when that party ceases to hold at least
five percent (5%) of the Common Stock (including Common Stock issuable upon
conversion of Convertible Securities); such special consent rights may not be
transferred or assigned except pursuant to a Permitted Transfer.
(f) Redemption of Class A Stock. So long as Liberty IFE
owns at least five percent (5%) of the Common Stock (including Common Stock
issuable upon conversion of Convertible Securities) the Corporation will not
redeem, purchase or otherwise acquire, directly or indirectly, any shares of
Class A Stock without the consent of Liberty IFE; provided, however, that the
foregoing shall not be deemed to restrict transfers of Class A Stock to
Permitted Transferees.
(g) Automatic Conversion of Class A Stock. Until the
earlier of (i) such time as Liberty IFE ceases to own at least five percent
(5%) of the Common Stock (including Common Stock issuable upon conversion of
Convertible Securities) and (ii) January 5, 2010, each holder of Class A Stock
agrees that in the event any of such holder's Class A Stock is transferred to a
Person other than a Permitted Transferee, such Class A Stock shall be
automatically converted into Class B Stock.
7. Assignment. No party hereto may assign or transfer his or its
rights, benefits, duties, burdens, or obligations under this Agreement other
than to a Permitted Transferee; provided, however, the rights, benefits,
obligations, duties and burdens under this Agreement may be transferred to any
partnership, joint venture, corporation or other entity into which any party
may merge with which it may be consolidated or to any corporation, partnership,
joint venture or other entity which shall succeed to all or substantially all
of its assets and business or to any wholly owned subsidiary of any such
corporation, partnership, joint venture or other entity, provided always that
such transferee agrees in writing to accept, assume and be bound by all of the
provisions of this Agreement to the same extent as its transferor, and, further
provided, that such transfer shall be without effect on or diminish the duties
and obligations of such transferor hereunder, which duties and obligations
shall remain primary to such transferor notwithstanding such transfer, and that
the performance of such transferee hereunder shall be unconditionally
guaranteed by such transferor in all respects at all times thereafter.
8. Termination of Rights of Liberty IFE. Notwithstanding any
other provision set forth herein, none of the rights of Liberty IFE are
assignable (except in connection with a Permitted Transfer), and shall
terminate in the event a controlling interest in Liberty IFE (or any Person
that controls Liberty IFE within the meaning of the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended) is transferred, or Liberty IFE
is dissolved, liquidated, or the subject of a petition in bankruptcy not
dismissed within thirty (30) days of filing, or Liberty IFE
19
<PAGE> 20
merges or otherwise loses its corporate identity, unless in any such case the
successor to Liberty IFE is a Permitted Transferee (in which case all
references in this Section shall refer to the Permitted Transferee).
9. Separability of Provisions. If any provision of this Agreement
or the application of such provision to any person or circumstance is held
invalid, the remainder of this Agreement and the application of such provision
to persons or circumstances other than those as to which it is held invalid
shall not be affected thereby.
10. Definitions. As used in this Agreement, and unless the context
requires a different meaning, the following terms have the meanings indicated
and include the plural as well as the singular:
(a) Act. The Securities Act of 1933, as amended.
(b) Affiliate. With respect to any Person, any other
Person that, directly or indirectly, controls, is controlled by or is under
common control with, such Person. For the purposes of this definition,
"control" (including the terms "controlled by" and "under common control
with"), as used with respect to any Person, shall mean the possession, directly
or indirectly, of the power to direct or cause the direction of the management
and policies of such Person, whether through the ownership of voting
securities, by contract or otherwise. The parties hereto shall be deemed to be
an Affiliate of the Corporation so long as any of them hold Covered Securities
representing ten percent (10%) or more of the Fully Diluted Voting Power of the
Corporation. M. G. Robertson, Timothy B. Robertson and any director of the
Corporation shall be deemed to be an Affiliate of the Corporation.
(c) Agreement. This Amended and Restated Shareholders
Agreement, as the same may be amended, supplemented or modified in accordance
with the terms hereof.
(d) Business Day. Each Monday, Tuesday, Wednesday,
Thursday and Friday which is not a day on which banking institutions in the
City of New York, New York are authorized or obligated by law to close.
(e) CBN. As defined in the preamble to this Agreement.
(f) Charitable Organization. A Person to which
contributions are deductible for federal income, estate and gift tax purposes.
(g) Charitable Trust. As defined in the preamble to this
Agreement.
20
<PAGE> 21
(h) Class A Stock. The Class A Voting Common Stock, par
value $.01 per share, of the Corporation.
(i) Class B Stock. The Class B Voting Common Stock, par
value $.01 per share, of the Corporation.
(j) Class C Stock. The Class C Non-voting Common Stock,
par value $.01 per share, of the Corporation.
(k) Common Stock. The Class A Stock, the Class B Stock,
the Class C Stock or all of the Class A Stock, Class B Stock and Class C Stock,
as the context requires.
(l) Compensation. Cash salaries, bonuses and deferred
compensation, compensation paid or distributed pursuant to plans, stock
options, restricted stock, phantom stock, stock appreciation rights, warrants,
performance units, performance shares and other items of compensation that are
reportable in a proxy statement for an annual meeting of stockholders
(disregarding any minimum reportable dollar amounts) pursuant to Item 402 of
Regulation S-K promulgated by the Securities and Exchange Commission.
Notwithstanding the foregoing, Compensation does not include any amounts paid
or distributed under health, hospitalization, group life, medical reimbursement
and other plans that do not discriminate in favor of officers or directors of
the Corporation and are available generally to full-time salaried employees of
the Corporation, in each case within the meaning of the Employee Retirement
Income Security Act of 1974, as amended. Stock options granted under the
Corporation's Stock Incentive Plan or Senior Stock Incentive Plan will not be
deemed part of Compensation if granted with an exercise price equal to the fair
market value of a share of Class B Stock on the date of grant.
(m) Corporation. As defined in the preamble to this
Agreement.
(n) Convertible Securities. The Preferred Stock, the
Notes and any other Covered Securities which are or become convertible into
capital stock of the Corporation.
(o) Covered Securities. Any (x)(i) Note, (ii) share of
Preferred Stock, (iii) share of Class C Stock, (iv) share of Class B Stock or
(v) share of Class A Stock, in each case held by Liberty IFE, CBN or any other
party to this Agreement on the date hereof, (y) any Class B Stock issued upon
conversion of any of the securities described in clauses (x)(i), (ii), (iii)
and (v) above and (z) securities issued with respect to any securities referred
to in either of clauses (x) or (y) above by way of a stock dividend or stock
split or exchange in connection with a combination of shares, recapitalization,
merger, adjustment or compromise of debt, consolidation or other reorganization
or otherwise, including, without limitation, the shares of Common Stock to be
issued to Liberty IFE pursuant to the Exchange Agreement.
21
<PAGE> 22
(p) Designated Holder. As defined in Section 3 (a)
(q) Fair Market Value. As defined in Section 2 (b)
(r) Fair Value. With respect to a share of Class A Stock,
(i) if no class of Common Stock is publicly traded, the Fair Market Value of
such share as determined pursuant to Section 2(b) hereof, (ii) if the Class B
Stock is traded in the over-the-counter market (or, if the Class B Stock is not
so traded, any other class of Common Stock so traded) and not in the NASDAQ
National Market System or on any national securities exchange, the average of
the daily mean of the closing bid and asked prices of a share of such class of
Common Stock on the 30 consecutive trading days immediately preceding the date
in question, as reported by NASDAQ or an equivalent generally accepted
reporting service, or (iii) if the Class B Stock is traded in the NASDAQ
National Market System or on a national securities exchange (or if the Class B
Stock is not so traded, any other class of Common Stock so traded), the average
for the 30 consecutive trading days immediately preceding the date in question
of the daily per share closing prices of such class of Common Stock in the
NASDAQ National Market System or on the principal stock exchange on which such
class of Common Stock is listed, as the case may be. The closing price referred
to in clause (iii) above shall be the last reported sales price or, in case no
such reported sale takes place on such day, the average of the reported closing
bid and asked prices, in either case in the NASDAQ National Market System or on
the national securities exchange on which the class of Common Stock in question
is then listed. If the Class B Stock does not publicly trade but two or more
other classes of Common Stock publicly trade, Fair Value shall be determined by
reference to the class of publicly traded common Stock that results in the
highest Fair Value per share of Class A Stock.
(s) First Refusal. As defined in Section i(a).
(t) Fully Diluted Voting Power. With respect to any
Covered Securities at any time, the aggregate number of votes such Covered
Securities would be entitled to cast (on any matter not requiring a class vote)
at a meeting of stockholders of the issuer held at that time, assuming that all
Rights and all convertible securities which are Covered Securities had been
exercised and converted immediately before the record date for such meeting.
(u) Heirs. As defined in Section 2(a).
(v) Included Securities. As defined in Section 3(a).
(w) Initial Public offering. As defined in Section 3(a).
(x) Initiating Holder. As defined in Section 4(a).
22
<PAGE> 23
(y) International Family Entertainment, Inc. As defined
in the preamble to this Agreement.
(z) Liberty IFE. As defined in the preamble to this
Agreement.
(aa) Management. As defined in the preamble to this
Agreement.
(ab) Material Transaction. With respect to noncompensation
transactions, any transaction or related series of transactions between the
Corporation and an Affiliate of the Corporation involving consideration in
excess of $500,000 in the aggregate; provided, however, that such $500,000
threshold shall be adjusted semi-annually to reflect the percentage
relationship the Consumer Price Index for All Urban Consumers published by the
Bureau of Labor Statistics of the United States Department of Labor as of the
date of adjustment bears to such index for April 1992. With respect to
Compensation, amounts paid or distributed to, or deferred on behalf of, an
Affiliate of the Corporation by the Corporation that, in the aggregate, exceed
by 15% or more the Compensation received by such Affiliate from the Corporation
during the prior fiscal year. Notwithstanding the foregoing, neither Liberty
IFE nor CBN shall have the right to approve or disapprove Compensation to the
extent it involves amounts paid, distributed or deferred pursuant to the
non-discretionary (e.g., formula-based) terms of any plan or contract in effect
on the date of this Agreement (including any extension or renewal thereof that
does not materially change the terms of such plan or contract and which is
approved by the Audit Committee of the Corporation) or which previously has
been approved by Liberty IFE and CBN, and any such amounts shall not be
included in the calculation of Compensation pursuant to the previous sentence;
provided, that Compensation of an Affiliate that so exceeds by 15% or more the
prior fiscal year's Compensation of such Affiliate shall be deemed, for
purposes of the approval rights of Liberty IFE and CBN in the next succeeding
fiscal year, to equal 115% of such prior fiscal year's Compensation.
(ac) Notes. The 6% Convertible Secured Notes due 2004 of
the Corporation.
(ad) Permitted Transfer. With respect to any Person who
holds Class A Stock, a sale, transfer, or bequest of Class A Stock for a
purchase price (if any) not in excess of Fair Value to (i) such Person's
spouse; (ii) a lineal descendant of a great-grandparent of such Person; (iii)
the trustee of a trust in whole or in part for the benefit of such Person, any
other Persons who hold Class A Stock or any of the Persons described in clauses
(i) and (ii) above; (iv) a Charitable Organization; or (v) Liberty IFE or any
Affiliate of Liberty IFE. In the case of an estate of a deceased holder of
Class A Stock or an estate of a bankrupt or insolvent holder of Class A Stock,
a Permitted Transfer shall include a sale, transfer or bequest of Class A Stock
for a purchase
23
<PAGE> 24
price (if any) not in excess of Fair value to any Person determined to be a
Permitted Transferee of such holder of Class A Stock pursuant to the preceding
sentence. In the case of a trust or Charitable Organization that received Class
A Stock either prior to the date hereof or in a Permitted Transfer by a Person
pursuant to the first sentence of this paragraph, a Permitted Transfer shall
include a sale, transfer or bequest by such trust or Charitable organization of
Class A Stock for a purchase price (if any) not in excess of Fair Value to such
Person or any Permitted Transferee of such Person pursuant to the first
sentence of this paragraph. A Permitted Transfer by any Person shall also
include a sale, transfer, bequest or other disposition of Covered Securities
for a purchase price (if any) not in excess of Fair Value to (i) any
corporation or entity which shall be a direct or indirect wholly-owned
subsidiary or parent of such Person (or, in the case of CBN, Regent University)
or (ii) any corporation or entity (such corporation or entity known as "New
Entity") into which such Person shall be merged or consolidated or which shall
succeed to all or substantially all of the business and assets of such Person
provided that, upon and subsequent to such merger, consolidation, or
succession, at least fifty-one percent (51%) of the voting power in the New
Entity is held by persons or entities holding at least fifty-one percent (51%)
of the voting power in such Person on the date of this Agreement.
(ae) Permitted Transferee. The transferee of Covered
Securities pursuant to a Permitted Transfer.
(af) Person. An individual or a corporation, partnership,
trust, incorporated or unincorporated association, joint venture, joint stock
company, government (or an agency or political subdivision thereof) or other
entity of any kind.
(ag) Preemptive Rights. As defined in Section 6(b).
(ah) Preferred Stock. The 10% Convertible Cumulative
Preferred Stock, par value $.001 per share, of the Corporation.
(ai) Programming. The television programming currently
distributed by The Family Channel, which consists of wholesome, family oriented
television programming, including religious, inspirational, current affairs or
entertainment programs.
(aj) Put Exercise Notice. As defined in Section 2(a).
(ak) Put Option. As defined in Section 2(a).
(al) Put Option Notice. As defined in Section 2 (a).
(am) Put Party. As defined in Section 2(a).
24
<PAGE> 25
(an) Qualified Appraiser. A nationally recognized
investment banking firm or other firm or person experienced in appraising firms
similar in size and field of business to the Corporation.
(ao) Qualified Independent Appraiser. A Qualified
Appraiser that is not an employee of, an Affiliate of, or otherwise affiliated
with, any party hereto.
(ap) Registration Statement. As defined in Section 3(a).
(aq) Rights. Any outstanding subscriptions, options,
warrants, rights, convertible securities or other agreements or commitments of
any character obligating the Corporation to issue any securities.
(ar) Selling Party. As defined in Section 1(a).
(as) Senior Stock Incentive Plan. The Corporation's Senior
Executive Stock Incentive Plan originally providing for the issuance to the
Chairman of the Corporation's Board of Directors, M.G. Robertson, and the
Corporation's Chief Executive Officer and President, Timothy B. Robertson of up
to 2,700,000 shares of Class B Stock (which number gives effect to the 3 for 1
stock split declared by the Board of Directors of the Corporation on March 3,
1992) minus the aggregate number of shares awarded under the Stock Incentive
Plan, as the same may be amended from time to time.
(at) Stock Incentive Plan. The Corporation's Stock
Incentive Plan originally providing for the issuance to employees of the
Corporation of up to 2,700,000 shares of Class B Stock (which number gives
effect to the 3 for 1 stock split declared by the Board of Directors of the
Corporation on March 3, 1992) minus the aggregate number of shares awarded
under the Senior Stock Incentive Plan.
(au) TCID. As defined in the preamble to this Agreement.
(av) Voting Power. With respect to any security, the power
to vote, or to direct the voting of, such security. A Person shall be deemed to
possess Voting Power over a security if such Person, through any arrangement,
may immediately and without cost acquire, at such Person's discretion, the
power to vote, or to direct the voting of, such security.
11. Notices. Any notices and other communications hereunder shall
be in writing and shall be deemed to have been made when delivered, or mailed
first class postage prepaid; provided, however, that notice of proposed
Affiliate transactions pursuant to Section 6(d) shall be deemed to have been
made when delivered only.
25
<PAGE> 26
If to M.G. Robertson, to:
M.G. Robertson
2877 Guardian Lane
P.O. Box 2050
Virginia Beach, Virginia 23450-2050
If to Timothy B. Robertson, to:
Timothy B. Robertson
2877 Guardian Lane
P.O. Box 2050
Virginia Beach, Virginia 23450-2050
If to the Charitable Trust, to:
M.G. Robertson, Trustee
Robertson Charitable Remainder Unitrust
2877 Guardian Lane
P.O. Box 2050
Virginia Beach, Virginia 23450-2050
If to CBN, to:
The Christian Broadcasting Network, Inc.
Attention: Michael D. Little, President
CBN Center
1000 Centerville Turnpike
Virginia Beach, Virginia 23463
With a copy to:
Joel R. Kaswell, Esq.
Fisher, Wayland, Cooper and Leader
1255 23rd Street, N.W.
Suite 800
Washington, D.C. 20037
If to Liberty IFE, to:
Liberty IFE, Inc.
Attention: Robert R. Bennett
8101 East Prentice Avenue
Englewood, Colorado 80111
With a copy similarly addressed to the President
26
<PAGE> 27
If to the Corporation, to:
International Family Entertainment, Inc.
Attention: Timothy B. Robertson
President & Chief Executive Officer
2877 Guardian Lane
P.O. Box 2050
Virginia Beach, Virginia 23450-2050
With a copy to:
Louis A. Isakoff, Esq.
International Family Entertainment, Inc.
2877 Guardian Lane
P.O. Box 2050
Virginia Beach, Virginia 23450-2050
and to:
Kirk A. Davenport, Esq.
Latham & Watkins
885 Third Avenue
Suite 1000
New York, New York 10022-4802
or at such other address as any addressee may request in writing by notice to
all other addresses.
12. Entire Agreement. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective heirs,
personal representatives, permitted assigns and successors subject, however, to
the provisions of Sections 6 and 7 hereof, restricting assignment. This
Agreement constitutes the entire understanding between the parties and
supersedes all preexisting oral, letter or other agreements, and any amendment
hereof must be in writing executed by all parties hereto. This Agreement shall
become effective at the time (but not before) the registration statement
relating to the Initial Public offering is declared effective by the Securities
and Exchange Commission under the Act. This Agreement, upon its effectiveness,
supersedes the Original Agreement in its entirety.
13. Headings. The headings in this Agreement are inserted for
convenience only and shall not constitute a part hereof.
14. Counterparts. This Agreement may be signed in any number of
counterparts with the same effect as if the signatures of each such counterpart
were upon the same instrument.
15. Governing Law. This Agreement shall be construed in accordance
with and be governed by the laws of the Commonwealth of Virginia. Venue and
jurisdiction on any lawsuit under this Agreement shall be held solely in the
Commonwealth of Virginia.
27
<PAGE> 28
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
/s/ M.G. ROBERTSON
---------------------------------
M.G. ROBERTSON
/s/ TIMOTHY B. ROBERTSON
---------------------------------
TIMOTHY B. ROBERTSON
ROBERTSON CHARITABLE REMINDER
UNITRUST
By: /s/ M.G. ROBERTSON
---------------------------------
M.G. Robertson, Trustee
THE CHRISTIAN BROADCASTING
NETWORK, INC.
By: /s/ MICHAEL D. LITTLE
---------------------------------
Michael D. Little, President
LIBERTY IFE, INC.
By: /s/ ROBERT R. BENNETT
---------------------------------
Robert R. Bennett, Senior
Vice President, Treasurer
and Secretary
INTERNATIONAL FAMILY
ENTERTAINMENT, INC.
By: /s/ LOUIS A. ISAKOFF
---------------------------------
Louis A. Isakoff,
Senior Vice-President, General
Counsel and Secretary
28
