SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
--------------
SCHEDULE 13D
Under the Securities Exchange Act of 1934 (Amendment No. 4)*
General Instrument Corporation (formerly NextLevel Systems, Inc.)
- -------------------------------------------------------------------------------
(Name of Issuer)
Common Stock, par value $0.01 per share
- -------------------------------------------------------------------------------
(Title of Class of Securities)
370120107
----------------------------------------------
(CUSIP Number)
Fried, Frank, Harris, Shriver & Jacobson Forstmann Little & Co. Subordinated
One New York Plaza Debt and Equity Management Buyout
New York, NY 10004 Partnership-IV
Attn: Aviva Diamant, Esq. Instrument Partners
(212) 859-8000 c/o Forstmann Little & Co.
767 Fifth Avenue
New York, NY 10153
Attn: Steven B. Klinsky
(212) 355-5656
- -------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized to Receive
Notices and Communications)
April 5, 1999
---------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on
Schedule 13G to report the acquisition that is the subject of
this Schedule 13D, and is filing this schedule because of Rule
13d-1(e), 13d-1(f) or 13d-1(g), check the following box [ ].
Note: Schedules filed in paper format shall include a
signed original and five copies of the schedule, including
all exhibits. See Rule 13d-7(b) for other parties to whom
copies are to be sent.
(Continued on following pages)
- --------------
*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).
<PAGE>
SCHEDULE 13D
CUSIP No. 370120107 Page 2 of 8 Pages
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY)
FORSTMANN LITTLE & CO. SUBORDINATED DEBT AND EQUITY MANAGEMENT BUYOUT
PARTNERSHIP-IV
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [X]
3 SEC USE ONLY
4 SOURCE OF FUNDS*
00
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
NEW YORK
NUMBER OF 7 SOLE VOTING POWER
SHARES 1,001,092
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY EACH 0
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON WITH 1,001,092
10 SHARED DISPOSITIVE POWER
0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,001,092
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) [ ]
EXCLUDES CERTAIN SHARES*
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.58%
14 TYPE OF REPORTING PERSON*
PN
*SEE INSTRUCTIONS BEFORE FILLING OUT!
SCHEDULE 13D
CUSIP No. 370120107 Page 3 of 8 Pages
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY)
INSTRUMENT PARTNERS
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [X]
3 SEC USE ONLY
4 SOURCE OF FUNDS*
00
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
NEW YORK
NUMBER OF 7 SOLE VOTING POWER
SHARES 1,137,573
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY EACH 0
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON WITH 1,137,573
10 SHARED DISPOSITIVE POWER
0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,137,573
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) [ ]
EXCLUDES CERTAIN SHARES*
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
.66%
14 TYPE OF REPORTING PERSON*
PN
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
This Amendment No. 4 amends and supplements the Statement on Schedule
13D (the "Schedule 13D") relating to the common stock, par value $.01 per
share (the "Common Stock"), of General Instrument Corporation, a Delaware
corporation (the "Company"), previously filed by Instrument Partners, a New
York limited partnership, and Forstmann Little & Co. Subordinated Debt and
Equity Management Buyout Partnership-IV ("MBO-IV"; together with Instrument
Partners, the "Partnerships"), a New York limited partnership. Capitalized
terms used and not defined in this Amendment have the meanings set forth in
the Schedule 13D.
Except as specifically provided herein, this Amendment does not modify
any of the information previously reported on the Schedule 13D.
ITEM 4. Purpose of the Transaction
--------------------------
Item 4 is hereby amended and supplemented as follows:
On April 5, 1999, Instrument Partners and MBO-IV sold 2,819,111
shares and 2,480,889 shares, respectively, of Common Stock to the Company
at a purchase price of $28.00 per share (the "Company Sales"). The
agreement pursuant to which such sales took place (the "Company Agreement")
is filed as Exhibit 4 to this Schedule 13D and incorporated herein by
reference.
On April 5, 1999, Instrument Partners and MBO-IV sold 5,319,078
shares and 4,680,922 shares, respectively, of Common Stock to Liberty Media
Corporation, a Delaware corporation ("Liberty Media"), at a purchase price
of $28.00 per share (the "Liberty Sales"). The agreement pursuant to which
such sales took place (the "Liberty Agreement") is filed as Exhibit 5 to
this Schedule 13D and incorporated herein by reference.
On April 5, 1999, Instrument Partners and MBO-IV sold 2,271,246
shares and 1,998,754 shares, respectively, of Common Stock to Goldman,
Sachs & Co. ("Goldman Sachs"), at a purchase price of $28.25 per share, in
transactions pursuant to Rule 144 under the Securities Act of 1933 (the
"Goldman Sachs Sales").
Effective April 5, 1999, Theodore J. Forstmann, a general partner
of the general partner of each of the Partnerships, resigned from the Board
of Directors of the Company.
On April 5, 1999, the Partnerships delivered a letter to the
Company requesting the Company to apply to the Securities and Exchange
Commission for withdrawal of the Registration Statement filed on August 26,
1998. Subject to compliance with the Liberty Media Agreement (see item 6
below), the Partnerships plan to dispose of the remainder of their holdings
of Common Stock through open market transactions, block trades, privately
negotiated transactions, or otherwise.
ITEM 5. Interest in Securities of the Issuer
------------------------------------
Item 5 is hereby amended and supplemented as follows:
(i) Instrument Partners:
(a) Amount Beneficially Owned:
Instrument Partners owns 1,137,573 shares of Common Stock,
representing approximately .66% of the Common Stock as of April 5, 1999.
(b) Number of shares as to which such person has:
(i) sole power to vote or to direct the vote -- 1,137,573.
(ii) shared power to vote or to direct the vote - none.
(iii) sole power to dispose or to direct the disposition of
-- 1,137,573.
(iv) shared power to dispose or to direct the disposition of
- none.
(ii) MBO-IV:
(a) Amount Beneficially Owned:
MBO-IV owns 1,001,092 shares of Common Stock, representing
approximately .58% of the Common Stock as of April 5, 1999.
As a result of the merger of FLC Partnership, L.P. with and into
FLC XXIX Partnership, L.P., a New York limited partnership ("FLC XXIX"),
FLC XXIX is the general partner of MBO-IV and, accordingly, may be deemed
to share beneficial ownership of the shares of Common Stock owned by
MBO-IV, but specifically disclaims any such beneficial ownership pursuant
to Rule 13d-4. Theodore J. Forstmann, Nicholas C. Forstmann, Steven B.
Klinsky, Winston W. Hutchins, Sandra J. Horbach, Thomas H. Lister, and
Tywana LLC, a North Carolina limited liability company, are the general
partners of FLC XXIX. Pursuant to the FLC XXIX Partnership Agreement,
however, Ms. Horbach, Mr. Lister and Tywana LLC have no economic, voting,
dispositive or other beneficial ownership of any shares of Common Stock of
the Company owned by MBO-IV. Each of Messrs. Theodore J. Forstmann,
Nicholas C. Forstmann, Steven B. Klinsky and Winston W. Hutchins may be
deemed to share beneficial ownership of the shares of Common Stock owned by
MBO-IV, but specifically disclaim any such beneficial ownership pursuant to
Rule 13d-4.
(b) Number of shares as to which such person has:
(i) sole power to vote or to direct the vote -- 1,001,092.
(ii) shared power to vote or to direct the vote - none.
(iii) sole power to dispose or to direct the disposition of
-- 1,001,092.
(iv) shared power to dispose or to direct the disposition of
- none.
(iii) In the past sixty days, the Partnerships sold a total of
19,570,000 shares in the following transactions:
Reporting Person Date Number of Shares Price per Share
---------------- ---- ---------------- ---------------
Instrument Partners 4/5/99 2,819,111 $28.00(1)
MBO-IV 4/5/99 2,480,889 $28.00(1)
Instrument Partners 4/5/99 5,319,078 $28.00(2)
MBO-IV 4/5/99 4,680,922 $28.00(2)
Instrument Partners 4/5/99 2,271,246 $28.25(3)
MBO-IV 4/5/99 1,998,754 $28.25(3)
(1) Pursuant to the Company Agreement.
(2) Pursuant to the Liberty Agreement.
(3) Sold to Goldman Sachs pursuant to Rule 144 under the Securities
Act.
(iv) On April 5, 1999, each of Investment Partners and MBO-IV ceased
to be the beneficial owner of more than five percent to the shares of
Common Stock of the Company.
ITEM 6. Contracts, Arrangements, Understandings or Relationships With
Respect to Securities of the Issuer.
-------------------------------------------------------------
Item 6 is hereby amended and supplemented as follows:
Pursuant to the Company Agreement, the Partnerships executed and
delivered to the Company irrevocable proxies to vote at the Company's
1999 annual meeting of stockholders 9.57 million of the shares of
Common Stock held by the Partnerships on March 31, 1999, the record
date for such annual meeting.
Pursuant to the Liberty Agreement, (A) the Partnerships executed
and delivered irrevocable proxies granting Liberty Media the right to
vote the 10 million shares of Common Stock purchased by it from the
Partnerships at the Company's 1999 annual meeting of stockholders, (B)
the Partnerships assigned to Liberty Media certain of their rights and
obligations under the Registration Rights Agreement, dated as of April
6, 1992, among MBO-IV, Instrument Partners, General Instrument
Corporation, a Delaware corporation (the former parent of the
Company), and GI Corporation, a Delaware corporation, and the Letter
Agreement, dated July 25, 1997, between the Company, MBO-IV and
Instrument Partners, (C) the Partnerships agreed that until July 5,
1999, the Partnerships would not sell any shares of Company Common
Stock except for the Company Sales, the Liberty Sales and the Goldman
Sachs Sales (collectively, the "Sales") and except for Block Sale
Transactions (as defined below), and (D) Liberty Media waived its
right of first refusal with respect to (i) each of the Sales, (ii)
Block Sale Transactions taking place prior to July 5, 1999, and (iii)
sales in broker transactions or to a market maker taking place on or
after July 5, 1999 at a price per share of at least $28.00. In
addition, Liberty Media modified its right of first refusal with
respect to sales by the Partnerships in the open market at prices of
less than $28.00 per share. A Block Sale Transaction is defined in the
Liberty Agreement as any sale by the Partnerships of not less than
200,000 shares of Common Stock in one transaction or a series of
transactions taking place on a single trading day (a) pursuant to a
sell order placed with a single brokerage firm, (b) to a single
market-maker, or (c) to any institutional investor, in each case, at a
price per share of not less than $28.00.
Any descriptions of contracts, arrangements, understandings or
relationships with respect to securities of the Company contained
herein are not intended to be complete, and are qualified in their
entirety by the complete text of the agreement. The Company Agreement
and the Liberty Agreement are filed as Exhibits 4 and 5 hereto,
respectively, and are incorporated herein by reference.
ITEM 7. Material to be Filed as Exhibits.
--------------------------------
Item 7 is hereby amended and supplemented as follows:
4. Agreement, dated as of April 2, 1999, among
MBO-IV, Instrument Partners and the Company.
5. Agreement, dated as of April 2, 1999, among
MBO-IV, Instrument Partners and Liberty Media.
<PAGE>
SIGNATURE
---------
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this statement is
true, complete and correct.
Dated: April 5, 1999 INSTRUMENT PARTNERS
By: FLC XXII Partnership,
its general partner
By: /s/ Steven B. Klinsky
---------------------
Steven B. Klinsky,
a general partner
FORTSMANN LITTLE & CO. SUBORDINATED DEBT AND
EQUITY MANAGEMENT BUYOUT PARTNERSHIP-IV
By: FLC XXIX Partnership, L.P.,
its general partner
By: /s/ Steven B. Klinsky
----------------------
Steven B. Klinsky,
a general partner
Exhibit 4
STOCK DISPOSITION AGREEMENT
Stock Disposition Agreement, dated as of April 2, 1999 (this
"Agreement"), among General Instrument Corporation, a Delaware corporation
(the "Company"), Instrument Partners, a New York limited partnership
("Instrument Partners"), and Forstmann Little & Co. Subordinated Debt and
Equity Management Buyout Partnership-IV, a New York limited partnership
("MBO-IV"; and together with Instrument Partners, the "Selling
Stockholders").
WHEREAS, Instrument Partners is the owner of 11,547,008 shares of the
Company's common stock, par value $.01 per share (the "Common Stock"), and
MBO-IV is the owner of 10,161,657 shares of Common Stock; and
WHEREAS, the Company desires to purchase from Instrument Partners, and
Instrument Partners desires to sell to the Company, 2,819,111 of its shares
of Common Stock; and the Company desires to purchase from MBO-IV, and
MBO-IV desires to sell to the Company, 2,480,889 of its shares of Common
Stock (such Instrument Partners and MBO-IV shares of Common Stock, the
"Shares"); and
WHEREAS, contemporaneously with the execution and delivery of this
Agreement, the Selling Stockholders are entering into an agreement (the
"Other Agreement") to sell 10 million of their other shares of Common Stock
to Liberty Media Corporation, a Delaware corporation ("Liberty Media").
NOW, THEREFORE, in consideration of the mutual covenants and
undertakings contained herein, and on the terms and subject to the
conditions set forth herein, the parties hereto, each representing to the
others that its execution, delivery and performance of this Agreement has
been fully and duly authorized, agree as follows:
SECTION 1 - DEFINITIONS
-----------------------
1.1 SPECIFIC DEFINITIOS. As used in this Agreement, the following
terms shall have the meanings set forth below:
"Business Day" - any day other than a Saturday, a Sunday or a day
on which banks in New York City are authorized or obligated by law or
executive order to close.
"Closing" - the closing of the purchase and sale of the Shares.
"Closing Date" - the date on which the Closing occurs.
"Governmental Entity" - any federal, state or local judicial,
legislative, executive or regulatory authority.
Other terms are defined elsewhere in this Agreement and, unless otherwise
indicated, shall have such meanings throughout this Agreement.
SECTION 2 - PURCHASE AND SALE
-----------------------------
2.1 PURCHASE AND SALE OF SHARES. On the terms and subject to the
conditions, and in reliance on the representations and warranties, set
forth herein, at the Closing the Selling Stockholders shall sell and
transfer to the Company, and the Company shall purchase from the Selling
Stockholders, the Selling Stockholders' Shares (2,819,111 Shares in the
case of Instrument Partners, and 2,480,889 Shares in the case of MBO-IV),
at a cash purchase price equal to $28.00 per Share (the "Purchase Price").
The aggregate Purchase Price is $148,400,000.
2.2 CLOSING; DELIVERY AND PAYMENT.
(a) The Closing shall take place at the offices of Fried, Frank,
Harris, Shriver & Jacobson, One New York Plaza, New York, New York, or at
such other place as the Selling Stockholders and the Company shall agree,
at 9:00 a.m. (eastern standard time) on April 5, 1999 (provided that the
conditions set forth in Sections 4.1(c), 4.1(d)(i), 4.2(c) and 4.2(e)(i)
hereof shall have been satisfied) or as soon thereafter as practicable
after such conditions have been satisfied.
(b) On the Closing Date, each of the Selling Stockholders shall
deliver to the Company such instruments of transfer, in form and substance
reasonably satisfactory to the Company, as shall be sufficient to transfer
its Shares to the Company, and in exchange therefor (and upon receipt of
confirmation from the Company's transfer agent of its receipt of the
instruments of transfer to be delivered to it) the Company shall pay to
each of the Selling Stockholders the aggregate Purchase Price for the
Shares sold by such Selling Stockholders in immediately available funds to
the accounts designated by such Selling Stockholders.
SECTION 3 - REPRESENTATIONS AND WARRANTIES
------------------------------------------
3.1 BY THE PARTIES. Instrument Partners and MBO-IV each represents and
warrants to the Company, and the Company represents and warrants to
Instrument Partners and MBO-IV, as follows:
(a) It has all necessary authority for the execution, delivery
and performance of this Agreement by it; it has duly executed and delivered
this Agreement; and this Agreement is a valid and legally binding
agreement, enforceable against it in accordance with its terms, assuming
the due execution and delivery by the other parties; and
(b) The performance of this Agreement by it will not violate or
conflict with any law, regulation, order or agreement, or, to the extent
applicable, such party's charter or organic documents, and such party is
not required to obtain any governmental approvals or third party consents
to enter into and perform its obligations pursuant to this Agreement. Such
execution and performance does not and will not constitute a default under
any agreement or obligation binding on it or result in the forfeiture or
loss of any rights or assets by it except as specifically provided for in
this Agreement.
3.2 BY THE SELLING STOCKHOLDERS. Each of the Selling Stockholders
represents and warrants to the Company that (a) it is the owner of
11,547,008 shares of Common Stock (in the case of Instrument Partners) and
10,161,657 shares of Common Stock (in the case of MBO-IV), (b) the Shares
to be sold hereunder by it are owned, and will at the Closing be conveyed
to the Company, by such Selling Stockholder free and clear of any liens,
charges or encumbrances and (c) upon delivery of its Shares, and payment
therefor pursuant hereto, good and valid title to its Shares will pass to
the Company (assuming that the Company is without notice of any adverse
claim, as defined in the Uniform Commercial Code as adopted in the State of
New York (the "Code") and is otherwise a bona fide purchaser for the
purposes of the Code).
3.3 NO OTHER WARRANTIES. Except as expressly set forth in this
Agreement, no party is relying on any express or implied representations or
warranties relating to any party or to the consummation of the transactions
contemplated hereby. Except as and to the extent expressly set forth in
this Agreement, each party hereto hereby disclaims all liability and
responsibility for any statement or information made or communicated
(orally or in writing) to any other party hereto or any affiliate,
representative or agent thereof (including without limitation any opinion,
information or advice by any officer, director, consultant, affiliate,
representative or agent of the disclaiming party).
SECTION 4 - CONDITIONS TO THE PARTIES' OBLIGATIONS TO CLOSE
-----------------------------------------------------------
4.1 CONDITIONS TO THE OBLIGATIONS OF INSTRUMENT PARTNERS AND MBO-IV TO
CLOSE. The obligations of Instrument Partners and MBO-IV to consummate the
transactions contemplated by this Agreement are subject to the satisfaction
(or waiver) of the following conditions:
(a) No Injunctions. There shall not be in effect any statute,
regulation, order, decree or judgment of any Governmental Entity that makes
illegal or enjoins or prevents in any material respect the consummation of
the transactions contemplated by this Agreement.
(b) Representations. All representations made by the Company in
Article III hereof shall be true and correct in all material respects at
and as of the Closing Date.
(c) Liberty Media Right of First Refusal. Liberty Media (as
assignee of TCI Ventures Group, LLC), shall have waived in writing its
rights of first refusal, with respect to the transactions contemplated by
this Agreement, under the letter agreement, dated August 1, 1998 (the
"Letter Agreement"), among TCI Ventures Group, LLC, Instrument Partners,
MBO-IV, the Company and the other party thereto, and the Selling
Stockholders shall have received a copy of such written waiver.
(d) Other Agreement. (i) All conditions to the consummation of
the transactions contemplated by the Other Agreement shall have been
satisfied or waived and the parties thereto shall be fully prepared to
consummate the transactions contemplated thereby; and (ii) the transactions
contemplated by the Other Agreement shall have been consummated
contemporaneously with the consummation of the transactions contemplated by
this Agreement.
4.2 CONDITIONS TO THE OBLIGATIONS OF THE COMPANY TO CLOSE. The
obligations of the Company to consummate the transactions contemplated by
this Agreement are subject to the satisfaction (or waiver) of the following
conditions:
(a) No Injunctions. There shall not be in effect any statute,
regulation, order, decree or judgment of any Governmental Entity that makes
illegal or enjoins or prevents in any material respect the consummation of
the transactions contemplated by this Agreement.
(b) Representations. All representations made by Instrument
Partners and MBO-IV in Article III hereof shall be true and correct in all
material respects at and as of the Closing Date.
(c) Liberty Media Right of First Refusal. Liberty Media (as
assignee of TCI Ventures Group, LLC), shall have waived in writing its
rights of first refusal, with respect to the transactions contemplated by
this Agreement, under the Letter Agreement, and the Company shall have
received a copy of such written waiver.
(d) Fairness Opinion. The opinion previously delivered to the
board of directors of the Company by Merrill Lynch & Co., that the Purchase
Price is fair to the Company from a financial point of view, shall not have
been withdrawn or adversely modified.
(e) Other Agreement. (i) All conditions to the consummation of
the transactions contemplated by the Other Agreement shall have been
satisfied or waived and the parties thereto shall be fully prepared to
consummate the transactions contemplated thereby; and (ii) the transactions
contemplated by the Other Agreement shall have been consummated
contemporaneously with the consummation of the transactions contemplated by
this Agreement.
(f) Rule 144 Sale. Instrument Partners or MBO-IV shall have
entered into an arrangement with Goldman Sachs & Co. to sell at least 4
million of their shares of Common Stock (other than the Shares and the
shares subject to the Other Agreement) under Rule 144 of the Securities Act
of 1933, as amended, and the Company shall have received evidence of such
arrangement reasonably satisfactory to it.
(g) Forstmann Resignation. Theodore J. Forstmann shall have
resigned his position as a Director of the Company.
(h) Proxy. Instrument Partners and MBO-IV shall have executed and
delivered to the Company an irrevocable proxy (in the form of Exhibit A
hereto) to vote 9.57 million of the shares of Common Stock held by them on
March 31, 1999, the record date for the Company's 1999 annual meeting of
stockholders, at such annual meeting .
SECTION 5 - TERMINATION
-----------------------
5.1 TERMINATION. This Agreement may be terminated at any time prior to
the Closing:
(a) by written agreement of the Selling Stockholders and the
Company;
(b) either by the Selling Stockholders or by the Company, by
written notice of such termination to the other, if the Closing shall not
have been consummated on or prior to 2:00 p.m. eastern standard time (in
the case of a termination by the Selling Stockholders), or on or prior to
5:00 p.m. eastern standard time (in the case of a termination by the
Company), on April 5, 1999;
(c) either by the Selling Stockholders or by the Company if any
court of competent jurisdiction or other competent Governmental Entity
shall have by statute, rule, regulation, order, decree or injunction or
other action permanently restrained, enjoined or otherwise prohibited any
of the transactions contemplated by this Agreement.
SECTION 6 - MISCELLANEOUS
-------------------------
6.1 NOTICES. All notices or other communications hereunder shall be
deemed to have been duly given and made if in writing and if served by
personal delivery upon the party for whom it is intended, if delivered
registered or certified mail, return receipt requested, or by a national
courier service, if sent by facsimile transmission, provided that the
facsimile transmission is promptly confirmed by telephone confirmation
thereof, or on the third day after posting in the United States postage
prepaid if sent by registered or certified mail, return receipt requested,
to the person at the address set forth below, or such other address as may
be designated in writing hereafter, in the same manner, by such person:
To the Company:
General Instrument Corporation
101 Tournament Drive
Horsham, Pennsylvania 19044
Attention: Robert A. Scott, Esq.
Senior Vice President, General Counsel and Secretary
Tel: (215) 323-1000
Fax: (215) 323-1293
To Instrument Partners or MBO-IV:
c/o Forstmann Little & Co.
767 Fifth Avenue
New York, New York 10153
Attention: Winston W. Hutchins
Tel: (212) 355-5656
Fax: (212) 759-9059
6.2 AMENDMENT; WAIVER. Any provision of this Agreement may be amended
or waived if, and only if, such amendment or waiver is in writing and
signed, in the case of any amendment, by the parties hereto, or in the case
of a waiver, by the party against whom the waiver is to be effective. No
failure or delay by any party in exercising any right, power or privilege
hereunder shall operate as a waiver thereof nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies
herein provided shall be cumulative and, except as otherwise provided
herein, shall not be exclusive of any rights or remedies provided by law.
6.3 ASSIGNMENT. No party to this Agreement may assign any of its
rights or obligations under this Agreement without the consent of the other
parties hereto.
6.4 ENTIRE AGREEMENT. This Agreement (which includes the Exhibit
hereto) contains the entire agreement among the parties hereto with respect
to the subject matter hereof and supersedes all prior agreements and
understandings, oral or written, between or among them with respect to such
matters, and any written agreement of the parties that expressly provides
that it is not superseded by this Agreement.
6.5 PARTIES IN INTEREST. This Agreement shall inure to the benefit of
and be binding upon the parties hereto and their respective successors and
permitted assigns. Nothing in this Agreement, express or implied, is
intended to confer upon any person other than the parties hereto, and their
successors or permitted assigns, any rights or remedies under or by reason
of this Agreement.
6.6 GOVERNING LAW: SUBMISSION TO JURISDICTION; SELECTION OF FORUM.
THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK. Each
party hereto agrees that it shall bring any action or proceeding in respect
of any claim arising out of or related to this Agreement or the
transactions contained in or contemplated by this Agreement, whether in
tort or contract or at law or in equity, exclusively in the United States
District Court for the Southern District of New York or the Supreme Court
of the state of New York for the County of New York, and solely in
connection with claims arising under this Agreement or the transactions
contained in or contemplated by this Agreement (i) irrevocably submits to
the exclusive jurisdiction of such courts, (ii) waives any objection that
such courts are an inconvenient forum or do not have jurisdiction over any
party hereto and (iii) agrees that service of process upon such party in
any such action or proceeding shall be effective if notice is given in
accordance with Section 6.1 of this Agreement.
6.7 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, and all of which
shall constitute one and the same Agreement.
6.8 FURTHER ASSURANCES. Each party hereto shall (at its expense) take
such actions and execute and deliver such other documents, certifications
and further assurances as the other parties hereto may reasonably request
in order to carry out the purposes of this Agreement.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first written above.
GENERAL INSTRUMENT CORPORATION
By:/s/ Robert A. Scott
------------------------------------
Name: Robert A. Scott
Title: Senior Vice President,
General Counsel & Secretary
INSTRUMENT PARTNERS
By: FLC XXII Partnership, general partner
By:/s/ Steven B. Klinsky
--------------------------------
Name: Steven B. Klinsky
Title: General Partner
FORSTMANN LITTLE & CO. SUBORDINATED
DEBT AND EQUITY MANAGEMENT BUYOUT
PARTNERSHIP-IV
By: FLC XXIX Partnership, L.P., general partner
By:/s/ Steven B. Klinsky
--------------------------------
Name: Steven B. Klinsky
Title: General Partner
<PAGE>
Exhibit A
IRREVOCABLE PROXY
FOR THE
1999 ANNUAL MEETING OF STOCKHOLDERS
OF GENERAL INSTRUMENT CORPORATION
-----------------------------------
April __, 1999
The undersigned hereby irrevocably appoint Geoffrey S. Roman and
Richard C. Smith and each or either of them their attorneys and agents,
with full power of substitution, to vote as Proxy for the undersigned as
herein stated at the 1999 Annual Meeting of Stockholders of General
Instrument Corporation (the "Company"), and at any adjournments thereof,
according to the number of votes the undersigned would be entitled to vote
with respect to 9.57 million of their shares of common stock of the Company
(comprised of 5,090,357 of Instrument Partners' shares, and 4,479,643 of
Forstmann Little & Co. Subordinated Debt and Equity Management Buyout
Partnership-IV's shares) if personally present on the matters set forth
below and in accordance with their discretion on any other matters that may
properly come before the meeting or any adjournments thereof.
FOR election as Class II directors of the nominees recommended by the
Board of Directors of the Company.
FOR any proposal to approve the Company's 1999 Long-Term Incentive
Plan.
FOR ratification of the appointment by the Board of Directors of the
Company of Deloitte & Touche LLP as independent auditor for the
Company for the 1999 fiscal year.
This proxy is coupled with an interest and is irrevocable.
FORSTMANN LITTLE & CO. SUBORDINATED DEBT
INSTRUMENT PARTNERS AND EQUITY MANAGEMENT BUYOUT PARTNERSHIP-IV
By: FLC XXII Partnership, By: FLC XXIX Partnership, L.P.,
general partner general partner
By: By:
------------------------- -----------------------------
Name: Name:
Title: General Partner Title: General Partner
Exhibit 5
STOCK PURCHASE AGREEMENT
------------------------
STOCK PURCHASE AGREEMENT, dated as of April 2, 1999, among
Forstmann Little & Co. Subordinated Debt and Equity Management Buyout
Partnership-IV, a New York limited partnership ("MBO-IV"), Instrument
Partners, a New York limited partnership ("IP" and collectively with
MBO-IV, "FLC"), and Liberty Media Corporation, a Delaware corporation
("Liberty").
RECITALS
WHEREAS, MBO-IV is the owner of 10,161,657 shares of the common
stock, par value $0.01 per share (the "Company Common Stock"), of General
Instrument Corporation, a Delaware corporation (the "Company"), and IP is
the owner of 11,547,008 shares of Company Common Stock;
WHEREAS, MBO-IV and IP desire to sell, and Liberty desires to
purchase, an aggregate of ten million (10,000,000) shares of Company Common
Stock (comprised of 5,319,078 shares from IP and 4,680,922 shares from
MBO-IV) at a price per share of $28.00, all subject to the terms and
conditions set forth herein; and
WHEREAS, contemporaneously with the execution and delivery of
this Agreement, MBO-IV and IP are entering into an agreement with the
Company (the "Company Purchase Agreement") to sell to the Company an
aggregate of five million three hundred thousand (5,300,000) shares of
Company Common Stock.
AGREEMENT
NOW, THEREFORE, for and in consideration of the mutual promises
set forth herein, and upon the terms and subject to the conditions hereof,
the parties hereto, intending to be legally bound, agree as follows:
1. PURCHASE AND SALE
(a) Purchase Price, Payment.
(i) Subject to the terms and conditions contained herein, FLC
hereby agrees to sell, transfer and assign to Liberty and Liberty hereby
agrees to purchase, acquire and accept from FLC, ten million (10,000,000)
shares of Company Common Stock (the "Purchased Shares"). The aggregate
purchase price for the Purchased Shares will be $280,000,000 (the "Purchase
Price"). The number of Purchased Shares shall be appropriately adjusted to
reflect the effects of any stock split, reverse split, stock dividend or
other reclassification or reorganization affecting the capital stock of the
Company, the record date for which occurs on or after the date hereof and
prior to the Closing (as defined below).
(ii) The closing of the purchase and sale of the Purchased Shares
(the "Closing") shall be held at the offices of Fried, Frank, Harris
Shriver & Jacobson, One New York Plaza, New York, New York, or at such
other place as FLC and Liberty may mutually agree, at 9:00 a.m. (New York
City time), on April 5, 1999 or as soon thereafter as practicable after all
conditions to Closing have been satisfied or waived. (The date on which the
Closing occurs is referred to as the "Closing Date".)
(iii) On the Closing Date, each of MBO-IV and IP shall deliver to
Liberty such instruments of transfer, in form and substance reasonably
satisfactory to Liberty, as shall be sufficient to transfer the Purchased
Shares to Liberty, and in exchange therefor (and upon receipt of
confirmation from the Transfer Agent (as defined below) of its receipt of
the instruments of transfer to be delivered to it) Liberty shall pay to
MBO-IV and IP by wire transfer of immediately available funds to the
respective accounts previously designated by MBO-IV and IP the aggregate
Purchase Price.
(b) Representations of FLC. Each of MBO-IV and IP represents and
warrants to Liberty that:
(i) It is a duly organized limited partnership, validly existing
and in good standing under the laws of the State of New York.
(ii) It has all necessary power and authority to execute and
deliver this Agreement, to perform its obligations hereunder, and to
consummate the transactions contemplated hereby; the execution and delivery
of this Agreement by it and the consummation by it of the transactions
contemplated hereby have been duly and validly authorized by all necessary
partnership action, and no other proceedings on its part are necessary to
authorize the execution and delivery of this Agreement by it or to
consummate the transactions contemplated hereby.
(iii) It is the owner of 10,161,657 shares of Company Common
Stock (in the case of MBO-IV) and 11,547,008 shares of Company Common Stock
(in the case of IP).
(iv) Except for Liberty's rights under the Letter Agreement (as
defined below), MBO-IV and IP own the Purchased Shares free and clear of
all security interests, claims, liens and encumbrances of any nature,
including, but not limited to, any rights of third parties in or to the
Purchased Shares.
(v) This Agreement has been duly and validly executed and
delivered by it and, assuming the due execution and delivery hereof by
Liberty, this Agreement is its valid and binding obligation, enforceable
against it in accordance with its terms, except as such enforceability may
be limited by bankruptcy, insolvency, reorganization, moratorium and other
similar laws affecting the rights of creditors generally and by general
principles of equity.
(vi) Immediately after the sale, transfer and assignment thereof
at the Closing, Liberty will have good title to the Purchased Shares free
and clear of all security interests, claims, liens and encumbrances of any
nature (other than any arising pursuant to this Agreement or under state or
federal securities laws or created by Liberty).
(vii) Each of the Registration Rights Agreement, dated as of
April 6, 1992, among MBO-IV, IP, General Instrument Corporation, a Delaware
corporation (the former parent company of the Company), and GI Corporation,
a Delaware corporation, and the letter agreement dated July 25, 1997
between the Company, MBO-IV and IP (the "Registration Rights Agreement"),
has been duly executed and delivered by MBO-IV and IP, and is a valid and
binding obligation of each such party, enforceable against it in accordance
with its terms, except as such enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium and other similar laws affecting the
rights of creditors generally and by general principles of equity.
(viii) The assignment by MBO-IV and IP of certain of their
rights, benefits and obligations under the Registration Rights Agreement
pursuant to Section 2 hereof will vest in Liberty such rights, benefits and
obligations under the Registration Rights Agreement as are specified
herein.
(ix) Other than pursuant to this Agreement, the Letter Agreement,
the Company Purchase Agreement and the Rule 144 Sale Arrangements (as
defined below), (A) it has no legal obligation, absolute or contingent to
sell shares of Company Common Stock to any person, and (B) no third party
holds any option, warrant or other right to acquire shares of Company
Common Stock from it.
(x) There is no action, suit, investigation or proceeding,
governmental or otherwise, pending or, to the best of its knowledge
threatened, against it specifically relating to the transactions
contemplated by this Agreement, nor is there any basis therefor known to
it.
(xi) Assuming that the Purchased Shares are sold to Liberty in a
transaction exempt from registration under the Securities Act of 1933, as
amended (the "Securities Act"), and from qualification or registration
under applicable state securities laws, (i) no consent, approval or
authorization of, nor any registration, qualification or filing with, any
governmental agency or authority or any other person is required on its
part in order for it to execute and deliver this Agreement and to
consummate the transactions contemplated hereby and (ii) the execution and
delivery of this Agreement by it and the consummation of the transactions
contemplated hereby will not conflict with or result in a material breach
or violation of, or accelerate the maturity or the date upon which
performance must be commenced or completed under, any material agreement to
which it is a party.
(xii)It (A) has duly executed and delivered the Company Purchase
Agreement pursuant to which the Company has agreed, on the terms and
subject to the conditions therein, to purchase five million three hundred
thousand (5,300,000) shares of Company Common Stock from FLC at a purchase
price of $28.00 per share; and (B) has delivered a true and correct copy of
such agreement to Liberty.
(c) Representations of Liberty. Liberty represents and warrants to
each of MBO-IV and IP that:
(i) Liberty is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware.
(ii) Liberty has all necessary corporate power and authority to
execute and deliver this Agreement, to perform its obligations hereunder
and to consummate the transactions contemplated hereby; and the execution
and delivery of this Agreement by Liberty, and the consummation by Liberty
of the transactions contemplated hereby, have been duly and validly
authorized by all necessary corporate action on the part of Liberty, and no
other corporate proceedings on the party of Liberty are necessary to
authorize this Agreement or to consummate the transactions contemplated
hereby.
(iii) This Agreement has been duly and validly executed and
delivered by Liberty, and, assuming the due execution and delivery thereof
by each of MBO-IV and IP, is a valid and binding obligation of Liberty
enforceable against Liberty in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium and other similar laws affecting the rights of creditors
generally and by general principles of equity.
(iv) There is no action, suit, investigation or proceeding,
governmental or otherwise, pending or, to the best of Liberty's knowledge
threatened, against Liberty specifically relating to the transactions
contemplated by this Agreement, nor is there any basis therefor known to
Liberty.
(v) Assuming that the Purchased Shares are acquired by Liberty in
a transaction exempt from registration under the Securities Act and from
qualification or registration under applicable state securities laws, (A)
no consent, approval or authorization of, nor any registration,
qualification or filing with, any governmental agency or authority or any
other person is required on the part of Liberty in order for Liberty to
execute and deliver this Agreement and for Liberty to purchase the
Purchased Shares at the Closing; and (B) the execution and delivery of this
Agreement by Liberty and the purchase by it of the Purchased Shares at the
Closing will not conflict with or result in a material breach or violation
of, or accelerate the maturity or the date upon which performance must be
commenced or completed under, any material agreement to which Liberty is a
party.
(vi) Except as expressly set forth in this Agreement, Liberty is
not relying on any representations or warranties (whether written or oral)
of FLC. Liberty has consulted with its own advisors to the extent it deemed
necessary and has made its own investment decision based on its own
judgment and upon any advice from any such advisors.
(d) Investment Representations of Liberty. Liberty represents and
warrants to each of MBO-IV and IP that:
(i) Liberty understands that the Purchased Shares it is acquiring
pursuant to this Agreement are being offered and sold pursuant to an
exemption from registration and qualification based in part upon the
representations of Liberty contained herein and that any subsequent
transfer or assignment of the Purchased Shares must be made pursuant to a
transaction which is exempt from registration under the Securities Act or
pursuant to an effective registration statement. Liberty is an
institutional accredited investor within the meaning of Section (a)(1),
(2), (3), (7) or (8) of Rule 501 of the Securities Act.
(ii) Liberty has such knowledge and experience in financial and
business matters that it is capable of evaluating the merits and risks of
the investment contemplated by this Agreement; Liberty is able to bear the
economic risk of its investment in the Company.
(iii) Liberty is acquiring the Purchased Shares solely for its
own account for investment and not with a view toward resale, transfer, or
distribution thereof, nor with any present intention of distributing the
Purchased Shares. No other person has any right with respect to or interest
in the Purchased Shares to be acquired by Liberty, nor has Liberty agreed
to give any person any such interest or right in the future.
2. ASSIGNMENT
Pursuant to and in accordance with the terms and conditions of the
Registration Rights Agreement, and effective upon the consummation of the
transactions contemplated hereby, (a) each of MBO-IV and IP hereby assigns
to Liberty its rights, benefits and obligations with respect to the
Purchased Shares under the Registration Rights Agreement, and (b) Liberty
hereby (i) accepts and assumes such rights, benefits and obligations, and
(ii) agrees to be bound by the terms of the Registration Rights Agreement;
provided, however, that notwithstanding the foregoing, the parties
acknowledge and agree that (x) upon the withdrawal of the registration
statement dated August 26, 1998, FLC shall be entitled to utilize one of
the registrations to which Liberty is entitled pursuant to Section 2.1 of
the Registration Rights Agreement until such time as all Registrable
Securities (as defined in the Registration Rights Agreement) owned by FLC
have been sold and (y) so long as it continues to own Registrable
Securities, FLC shall continue to be entitled to exercise its incidental
registration rights pursuant to Section 2.2 of the Registration Rights
Agreement.
3. DELIVERIES OF FLC AT CLOSING
At the Closing, FLC will deliver to Liberty: (i) a letter to
ChaseMellon Shareholder Services, L.L.C., as transfer agent for the Company
Common Stock (the "Transfer Agent"), instructing the Transfer Agent to
transfer (by book entry transfer) the Purchased Shares to an account
designated by Liberty with the Transfer Agent; and (ii) an irrevocable
proxy (in the form of Exhibits A-1 and A-2 hereto, as applicable) executed
by each of MBO-IV and IP, as the record owner of the Purchased Shares,
granting to Liberty the right to vote all of the Purchased Shares at the
Company's 1999 annual meeting of stockholders (the record date for which
was March 31, 1999).
4. DELIVERIES OF LIBERTY AT CLOSING
At the Closing, Liberty will deliver to FLC the Purchase Price by wire
transfer of immediately available funds to the respective accounts
previously designated by FLC.
5. CONDITIONS TO CLOSING
(a) Conditions Precedent to the Obligations of FLC and Liberty. The
obligations of each of MBO-IV and IP, on the one hand, and Liberty, on the
other, to consummate the transactions contemplated by this Agreement are
subject to the satisfaction at or prior to the Closing Date of each of the
following conditions:
(i) Absence of Injunctions. No permanent or preliminary
injunction or restraining order or other order by any court or other
governmental entity of competent jurisdiction or other legal restraint or
prohibition preventing consummation of the transactions contemplated hereby
as provided herein shall be in effect.
(ii) No Proceedings or Adverse Enactments. There shall not have
been any action taken, or any statute, rule, regulation, order, judgment or
decree enacted, promulgated, entered, issued or enforced by any foreign or
United States federal, state or local governmental entity, and there shall
be no action, suit or proceeding pending or threatened which (i) makes the
transactions contemplated by this Agreement illegal or imposes, or is
reasonably likely to result in the imposition of, material damages or
penalties in connection therewith, or (ii) would, as of or after the
Closing, impose material limitations on the ability of Liberty effectively
to exercise full rights of ownership of the Purchased Shares (including the
right to vote the Purchased Shares on all matters properly presented to the
stockholders of the Company).
(iii) Company Purchase Agreement. (a) All conditions to the
consummation of the transactions contemplated by the Company Purchase
Agreement shall have been satisfied or waived and the parties thereto shall
be fully prepared to consummate the transactions contemplated thereby; and
(b) the transactions contemplated by the Company Purchase Agreement are in
the process of being consummated contemporaneously with the consummation of
the transactions contemplated by this Agreement.
(iv) Rule 144 Sale. MBO-IV and IP shall have entered into an
arrangement (the "Rule 144 Sale Arrangements") with Goldman Sachs & Co. to
sell an aggregate of at least 4,000,000 shares of Company Common Stock
(other than the Purchased Shares and the shares of Company Common Stock
subject to the Company Purchase Agreement) under Rule 144 of the Securities
Act, and Liberty shall have received evidence of such arrangement
reasonably satisfactory to it.
(b) Conditions Precedent to the Obligations of Liberty. The obligation
of Liberty 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 in whole or
in part by Liberty, to the extent permitted by applicable law:
(i) Accuracy of Representations and Warranties. All
representations and warranties of MBO-IV and IP contained in this Agreement
shall, if specifically qualified by materiality, be true and correct and,
if not so qualified, be true and correct in all material respects in each
case as of the date of this Agreement and 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 expressly permitted or contemplated by this
Agreement.
(ii) Performance of Agreements. Each of MBO-IV and IP shall have
performed in all material respects all obligations and agreements, and
complied in all material respects with all covenants and conditions,
contained in this Agreement to be performed or complied with by it prior to
or on the Closing Date.
(iii) No Material Adverse Change. Since the date hereof nothing
shall have occurred which, individually or in the aggregate, has had or, in
the reasonable judgment of Liberty, is reasonably likely to have, a
material adverse effect on the Company and its subsidiaries or their
businesses, taken as a whole.
(iv) Officer's Certificates. Liberty shall have received a
certificate, dated the Closing Date, signed by a general partner of each of
MBO-IV and IP (x) as to the satisfaction of the conditions set forth in
clauses (i) and (ii) of this Section 5(b) and clause (iii) of Section 5(a),
and (y) attaching thereto a true and correct copy of the Registration
Rights Agreement.
(v) Company Deliveries. Liberty shall have received (A) a
certificate from an executive officer of the Company, dated the Closing
Date as to the matters referred to in subsection (b)(iii) of this Section
5, and (B) a letter of the Company, dated the Closing Date and signed by an
executive officer of the Company, acknowledging, among other things, the
assignment of rights to Liberty under the Registration Rights Agreement
(such letter to be in form and substance reasonably acceptable to Liberty).
(vi) Withdrawal of Registration Statement. FLC shall have
delivered a letter to the Company requesting the Company to apply to the
Securities and Exchange Commission for withdrawal of the Registration
Statement filed on August 26, 1998.
(vii) Other Deliveries. All other documents and instruments
required under this Agreement (including those required pursuant to Section
3) to have been delivered by each of MBO-IV and IP to Liberty at or prior
to the Closing or as Liberty shall have reasonably requested shall have
been delivered by each of MBO-IV and IP.
(c) Conditions Precedent to the Obligations of FLC. The obligation of
FLC 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 in whole or in
part by FLC, to the extent permitted by applicable law:
(i) Accuracy of Representations and Warranties. All
representations and warranties of Liberty contained in this Agreement
shall, if specifically qualified by materiality, be true and correct and,
if not so qualified, be true and correct in all material respects in each
case as of the date of this Agreement and 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 expressly permitted or contemplated by this
Agreement.
(ii) Performance of Agreements. Liberty shall have performed in
all material respects all obligations and agreements, and complied in all
material respects with all covenants and conditions, contained in this
Agreement to be performed or complied with by them prior to or on the
Closing Date.
(iii) Officer's Certificates. FLC shall have received a
certificate of Liberty dated the Closing Date, signed by an executive
officer of Liberty, as to the satisfaction of the conditions set forth in
clauses (i) and (ii) above.
(iv) Other Deliveries. All other documents and instruments
required under this Agreement (including those required pursuant to Section
4) to have been delivered by Liberty to FLC at or prior to the Closing, or
as FLC shall have reasonably requested shall have been delivered by
Liberty.
6. TERMINATION
(a) Termination. This Agreement may be terminated and the transactions
contemplated hereby may be abandoned at any time prior to the Closing, (i)
by mutual written consent of Liberty and each of MBO-IV and IP; or (ii) by
either Liberty or FLC: (A) if the Closing shall not have occurred on or
before 2:00 p.m. New York City time (in the case of a termination by FLC)
or 5:00 p.m. New York City time (in the case of a termination by Liberty)
on April 5, 1999, provided that the right to terminate this Agreement
pursuant to this clause (ii)(A) shall not be available to any party whose
failure to perform any of its obligations under this Agreement required to
be performed by it at or prior to the Closing has resulted in the failure
of the Closing to occur before such date, (B) if there has been a material
breach by the other party of any of its representations, warranties,
covenants or agreements contained in this Agreement and such breach shall
not have been cured within five business days after written notice thereof
shall have been received by the party alleged to be in breach or (C) if any
court of competent jurisdiction or other competent governmental entity
shall have issued an order, decree or ruling or taken any other action
permanently restraining, enjoining or otherwise prohibiting any of the
transactions contemplated by this Agreement and such order, decree, ruling
or other action shall have become final and nonappealable.
(b) Effect of Termination. In the event of any termination of this
Agreement by Liberty or FLC pursuant to Section 6(a) hereof, this Agreement
forthwith shall become void, and there shall be no liability or obligation
on the part of any party hereto, except that nothing herein will relieve a
party from liability for any breach of this Agreement occurring prior to
such termination.
7. COVENANTS
(a) Reasonable Efforts. Upon the terms and subject to the conditions
hereof, each of the parties hereto agrees to use its commercially
reasonable 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 the
transactions contemplated hereby.
(b) Covenant of FLC. During the period from the date hereof to and
including the 90th day following the Closing (the "Lock-Up Period"),
neither MBO-IV nor IP will, without the prior written consent of Liberty,
directly or indirectly, (i) offer, pledge, sell, contract to sell, sell any
option or contract to purchase, purchase any option or contract to sell,
grant any option, right or warrant for the sale of, or otherwise dispose of
or transfer any shares of Company Common Stock, or any securities
convertible into or exchangeable or exercisable for Company Common Stock,
or (ii) enter into any swap or any other agreement or any transaction that
transfers, in whole or in part, directly or indirectly, the economic
consequence of ownership of the Company Common Stock, whether any such swap
or transaction is to be settled by delivery of Company Common Stock or
other securities, in cash or otherwise; provided, however, that the
provisions of this Section 7(b) shall not be applicable to the sale of
shares of Company Common Stock pursuant to and in accordance with (A) the
Company Purchase Agreement, (B) the Rule 144 Sale Arrangements and (C) a
Block Sale Transaction (as defined below). "Block Sale Transaction" shall
mean a sale of not less than 200,000 shares of Company Common Stock in one
transaction or a series of transactions taking place on a single trading
day (i) pursuant to a sell order placed with a single brokerage firm, (ii)
to a single market-maker or (iii) to an institutional investor, in any case
at a price per share (before selling expenses) of not less than $28.
8. RIGHT OF FIRST REFUSAL
(a) Liberty, as assignee of TCI Ventures Group, LLC ("Ventures
Group"), hereby waives its right of first refusal under that certain letter
agreement, dated August 1, 1998 (the "Letter Agreement"), among MBO-IV, IP,
Ventures Group and the other parties thereto, with respect to the sale of
shares of Company Common Stock pursuant to and in accordance with (i) the
Company Purchase Agreement, (ii) the Rule 144 Sale Arrangements, (iii) any
Block Sale Transaction taking place prior to the conclusion of the Lock-Up
Period and (iv) any Market Sale (as defined below) consummated after the
Lock-Up Period at a price per share (before selling expenses) of $28.00 or
more.
(b) Each of MBO-IV and IP hereby acknowledges and agrees that, except
as provided in subsection 8(a) above, Liberty's right of first refusal
under the Letter Agreement shall continue in effect with respect to all
shares of Company Common Stock owned by MBO-IV or IP following the Closing
in accordance with the terms thereof (including Section 3 thereof);
provided, however, that the parties agree that with respect to any open
market sale of Company Common Stock proposed to be made by FLC after the
Closing at a price per share (before selling expenses) of less than $28.00,
the right of first refusal pursuant to the Letter Agreement (if applicable)
shall be effected as follows:
(x) Each of MBO-IV and IP shall notify Liberty of its intention
to sell in a broker transaction on the New York Stock Exchange or to a
market-maker (a "Market Sale"); such notice (a "Sale Notice") shall
specify the number of shares of Company Common Stock proposed to be
sold and shall specify the price at which MBO-IV or IP is willing to
sell; such Sale Notice shall be in writing and shall be delivered to
Liberty via telecopier and shall constitute an offer by FLC to sell
the number of shares specified therein at the price specified therein;
(y) If Liberty delivers written notice (by telecopier) to MBO-IV
or IP (as applicable) within 24 hours of its receipt of the Sale
Notice accepting the offer set forth in the Sale Notice, Liberty shall
be obligated to thereafter purchase the shares of Company Common Stock
specified in the Sale Notice at the price specified therein, all in
accordance with the terms and procedures set forth in the Letter
Agreement, except that the closing thereunder shall take place on a
mutually agreed date not later than the sixth business day following
Liberty's receipt of the Sale Notice; and
(z) If Liberty does not deliver such notice within the time
specified, MBO-IV and IP shall be permitted to sell up to the
aggregate number of shares specified in the Sale Notice in open market
transactions at a price per share of Company Common Stock not less
than that specified in the Sale Notice during the period ending at the
close of business on the fifth trading day following the date of
delivery of the Sale Notice.
9. MISCELLANEOUS
(a) Further Assurances. From and after the Closing Date, each of
MBO-IV, IP and Liberty shall, at any time and from time to time, make,
execute and deliver, or cause to be made, executed and delivered, such
instruments, agreements, consents and assurances and take or cause to be
taken all such actions as may reasonably be requested by the other party
hereto to effect the purposes and intent of this Agreement.
(b) Expenses. Except as otherwise provided herein, all costs and
expenses, including, without limitation, fees and disbursements of counsel,
financial advisors and accountants, incurred in connection with this
Agreement and the transactions contemplated hereby shall be paid by the
party incurring such costs and expenses, whether or not the Closing shall
occur.
(c) Notices. All notices, requests, demands, waivers and other
communications required or permitted to be given under this Agreement shall
be in writing and shall be deemed to have been duly given on (i) the day on
which delivered personally or by telecopy (with prompt confirmation by
mail) during a business day to the appropriate location listed as the
address below, (ii) three business days after the posting thereof by United
States registered or certified first class mail, return receipt requested,
with postage and fees prepaid or (iii) one business day after deposit
thereof for overnight delivery. Such notices, requests, demands, waivers or
other communications shall be addressed as follows:
(i) if to either MBO-IV or IP to:
c/o Forstmann Little & Co.
767 Fifth Avenue
New York, New York 10153
Attention: Winston W. Hutchins
Telecopy No.: (212) 759-9059
with a copy to:
<PAGE>
Fried, Frank, Harris, Shriver & Jacobson
One New York Plaza
New York, New York 10005
Attn: Aviva Diamant, Esq.
Telecopy No.: (212) 859-4000
(ii) if to Liberty to:
Liberty Media Corporation
8101 East Prentice Avenue
Englewood, Colorado 80111
Attn: Charles Y. Tanabe, Esq.
Telecopy No.: (303) 721-5443
with a copy to:
Baker & Botts, L.L.P.
599 Lexington Avenue
New York, New York 10022
Attn: Frederick H. McGrath, Esq.
Telecopy No.: (212) 705-5125
or to such other person or address as any party shall specify by notice in
writing to the other party.
(d) Entire Agreement. This Agreement (including the documents referred
to herein) constitutes the entire agreement between the parties and
supersedes all prior agreements and understandings, oral and written,
between the parties with respect to the subject matter hereof.
(e) Amendment. This Agreement may not be amended except by an
instrument in writing signed on behalf of each of the parties.
(f) Governing Law. This Agreement shall be construed in accordance
with and governed by the laws of the State of New York, without regard to
conflicts of laws.
(g) Assignment. No party hereto (or any permitted assignee of such
party's rights or obligations hereunder) may assign its right or delegate
its obligations hereunder without the prior written consent of the other
party hereto, except as otherwise permitted by and in accordance with the
terms hereof and except that Liberty may assign its rights hereunder to an
entity which is a wholly owned subsidiary of Liberty as of the Closing so
long as the representations and warranties made by Liberty herein are
equally true as to such subsidiary. Nothing in this Agreement, expressed or
implied, is intended to confer on any person other than the parties or
their respective successors and assigns, any rights, remedies, obligations
or liabilities under or by reason of this Agreement.
(h) Certain Definitions. As used in this Agreement, the term "person"
shall mean and include any individual, partnership, joint venture,
corporation, trust, unincorporated organization or association or any other
entity or association of any kind and any authority, federal, state, local
or foreign government, any political subdivision of any thereof and any
court, panel, judge, board, bureau, commission, agency or other entity or
body exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to any government.
(i) Counterparts. This Agreement may be executed in several
counterparts and as so executed shall constitute one agreement binding on
the parties hereto.
(j) Severability. In the event that any part or parts of this
Agreement shall be held to be unenforceable to its or their full extent,
then it is the intention of the parties hereto that such part or parts
shall be enforced to the full extent permitted under the laws, and in any
event, that all other parts of this Agreement shall remain valid and fully
enforceable as if the unenforceable part or parts had never been a part
hereof.
<PAGE>
IN WITNESS WHEREOF, each of the parties hereto has executed this
Agreement as of the date first written above.
FORSTMANN LITTLE & CO. SUBORDINATED
DEBT AND EQUITY MANAGEMENT BUYOUT
PARTNERSHIP-IV
By: FLC XXIX Partnership, L.P.,
General Partner
By:/s/ Steven B. Klinsky
-----------------------------
Name: Steven B. Klinsky
Title: General Partner
INSTRUMENTS PARTNERS
By: FLC XXII Partnership, General
Partner
By:/s/ Steven B. Klinsky
-----------------------------
Name: Steven B. Klinsky
Title: General Partner
LIBERTY MEDIA CORPORATION
By:/s/ Robert R. Bennett
-----------------------------------
Name: Robert R. Bennett
Title: President
