SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
March 1, 1999
TV GUIDE, INC.
(formerly United Video Satellite Group, Inc.)
(Exact Name of Registrant as Specified in Charter)
Delaware 0-22662 73-129412
(State or Other (Commission (IRS Employer
Jurisdiction of File Number) Identification No.)
Incorporation)
7140 South Lewis Avenue, Tulsa, Oklahoma 74136-5422
(Address of Principal Executive Office) (Zip code)
(918) 488-4000
(Registrant's telephone number, including area code)
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ITEMS 1 and 2. CHANGE IN CONTROL; ACQUISITION OF ASSETS
On March 1, 1999, TV Guide, Inc. (formerly United Video Satellite Group, Inc.),
a Delaware corporation (the "Company"), completed the following transactions:
(1) the Company acquired from TVG Holdings, Inc. ("News Holdings"), a
subsidiary of The News Corporation Limited ("News Corp."), for $800 million
in cash, 22,503,412 shares of Class A Common Stock and 37,496,588 shares of
Class B Common Stock, two corporations that publish TV Guide magazine and
other printed television program listings guides and operate, through the
Internet, an entertainment service now known as TV Guide Online (the "TV
Guide Acquisition");
(2) the Company acquired from Liberty Media Corporation ("Liberty"), for
12,750,000 shares of Class B Common Stock, three corporations which own
approximately 40% of Superstar/Netlink Group LLC and the Netlink Wholesale
Division, which includes a business that provides satellite-transmitted
programming services known as the "Denver 6" and a separate business that
sells programming packages to satellite master antenna television systems
(the "Netlink Acquisition");
(3) the Company changed its name to TV Guide, Inc.; and
(4) the Company sold to TVG Holdings, Inc. 6,534,108 shares of Class A
Common Stock for approximately $129.0 million in cash, which was paid by
offset against the cash portion of the consideration in the TV Guide
Acquisition.
The source of funds for the cash portion of the purchase price was a private
placement of $400.0 million of 8 1/8% Senior Subordinated Notes due 2009, bank
credit facilities consisting of a $300 million six-year revolving credit
facility and a $300 million 364-day revolving credit/five-year term loan
facility, of which approximately $185.3 million was drawn down at closing of the
acquisitions, and existing cash of the Company. The bank lending group initially
consisted of 22 banks.
Liberty is an indirect subsidiary of Tele-Communications, Inc. ("TCI"). Liberty,
directly and through its subsidiary, TCI UVSG, Inc. ("TCI Holdings"), and News
Corp., through News Holdings, each indirectly own shares representing
approximately 44% of the Company's Common Stock and approximately 49% of the
voting power of the Company's Common Stock.
At closing of the transactions, the Company's bylaws were amended to fix the
number of the Company's directors at ten, to provide for an Office of the
Chairman and to provide that approval of any action by the Board of Directors
(the "Board") will require the affirmative vote of at least seven of the ten
directors, except for the removal of any officer of the Company, which will
require approval of six of the ten directors.
Leo J. Hindery resigned from the Board on March 8, 1999. Lawrence Flinn, Jr.,
Larry E. Romrell and J. David Wargo have resigned effective ten days after an
information statement pursuant to Section 14(f) of the Securities Exchange Act
of 1934 is mailed to the Company's stockholders.
Pursuant to a Stockholders Agreement, TCI, Liberty, TCI Holdings, News Corp. and
News Holdings have agreed that they will vote their shares of Common Stock for
the election of four directors designated by TCI Holdings and four directors
designated by News Holdings. Two independent directors within the meaning of the
Nasdaq Stock Market Rules will be appointed by those eight directors.
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The four directors designated by News Holdings are Anthea Disney, who currently
serves as Chairman and CEO of News America Publishing Group, a division of News
Corp., Joachim Kiener, who currently serves as President and Chief Operating
Officer of News America Publishing Group, Chase Carey, an Executive Director and
Co-Chief Operating Officer of News Corp., and Peter Chernin, an Executive
Director, President and Co-Chief Operating Officer of News Corp.
The four directors designated by TCI Holdings are Robert R. Bennett, Peter C.
Boylan III and Gary S. Howard, each of whom is currently a director, and Charles
Y. Tanabe, who currently serves as Senior Vice President and General Counsel of
Liberty.
The new directors (Ms. Disney and Messrs. Kiener, Carey, Chernin and Tanabe)
will take office without stockholder action when the resignations of Messrs.
Flinn, Romrell and Wargo will become effective.
Pursuant to the Stockholders Agreement entered into at the closing of the TV
Guide Acquisition (which is filed as an exhibit hereto and which is described in
more detail below), a stockholder or group of related stockholders will be
entitled to designate one director for each 12.5% of the outstanding shares of
Class B Common Stock owned by such party, and the other stockholder or group of
related stockholders will vote or cause to be voted all shares of Common Stock
owned by such party for the election of such designees(s) as director. Based on
current stock ownership, each of News Holdings and TCI Holdings would be
entitled to designate four directors pursuant to the Stockholders Agreement.
Additionally, the Company has formed an "Office of the Chairman" that, effective
on the appointment of Ms. Disney and Mr. Kiener to the Board, will consist of
Ms. Disney, and Mr. Kiener and Peter C. Boylan III, who will both report to Ms.
Disney. The Office will be responsible for overseeing the three primary business
units of the company: TV Guide Magazine Group, TV Guide Entertainment Group, and
the United Video Group.
Ms. Disney has been appointed to the position of Chairman and CEO of the
Company. Mr. Kiener has been named President of the Company and Chairman and CEO
of TV Guide Magazine Group. Mr. Boylan has been named Executive Vice President
of the Company and Chairman and CEO of TV Guide Entertainment Group and United
Video Group.
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Stockholders Agreement. TCI, Liberty, TCI Holdings, News Corp., News Holdings
and the Company have entered into a Stockholders Agreement which provides, among
other things, that for so long as a stockholder or group of related stockholders
is entitled to designate at least one director to the Company's Board, the other
stockholder or group of related stockholders shall be subject to certain
restrictions on its ability to sell any of its shares of Common Stock to an
unaffiliated third party or to convert any of its shares of Class B Common Stock
to shares of Class A Common Stock unless it first offers such Common Stock for
sale to the non-transferring party. If the non-transferring party elects not to
purchase such Common Stock, the transferring party will convert any Class B
Common Stock to be sold into Class A Common Stock prior to such sale unless such
Class B Common Stock is to be sold to a third party that has offered to purchase
at least 12.5% of the aggregate number of shares of Class B Common Stock
outstanding. Pursuant to the Stockholders Agreement, so long as there continues
to be at least two stockholders or groups of related stockholders that each own
in the aggregate 30% or more of the outstanding Class B Common Stock, such
stockholders or the members of each such stockholder group will vote their
shares of Common Stock on all matters submitted to a vote of the Company's
stockholders only as shall be mutually agreed upon by such stockholders or
stockholder groups and, if they are unable to agree on how to vote with respect
to any such proposal, they will each be obligated to vote against such proposal.
Under the Stockholders Agreement, a stockholder or group of related stockholders
is entitled to designate one director for each 12.5% of the outstanding shares
of Class B Common Stock owned by such party (rounded to the nearest 12.5%, with
more than 6.25% being rounded up, and 6.25% or less being rounded down), and the
other stockholder or group of related stockholders will vote or cause to be
voted all shares of Common Stock owned by such party for the election of such
designee(s) as director. In addition, the Stockholders Agreement provides for
certain registration rights with respect to the resale of the Class A Common
Stock owned by stockholders that are parties to the Stockholders Agreement.
Pursuant to the Stockholders Agreement, the Parent (as defined in such
Agreement) of each stockholder or group of related stockholders that is entitled
to designate at least one director to the Company's Board pursuant to the
Stockholders Agreement agrees with and for the benefit of the Parent of each
other stockholder or group of related stockholders that is so entitled to
designate at least one director to the Company's Board that, for so long as
there are at least two such stockholders or stockholder groups, the Company
will, subject to certain limited exceptions, be the exclusive vehicle through
which such Parent, directly or indirectly through its controlled affiliates,
conducts program guide businesses (print, electronic or otherwise) worldwide.
Currently, TCI and News Corp. are each Parents within the meaning of the
Stockholders Agreement.
Parent Agreement. News Corp., TCI and the Company are also parties to a letter
agreement (the "Parent Agreement") pursuant to which, among other things, the
parties agreed to negotiate
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in good faith to enter into, or cause their affiliates to enter into, the
following agreements: (a) affiliation agreements between the Company and News
Corp. (or a controlled affiliate of News Corp.) with respect to the TV Guide
Channel and TV Guide Interactive; (b) affiliation agreements between the Company
and TCI (or a controlled affiliate of TCI) with respect to the TV Guide Channel
and TV Guide Interactive; and (c) carriage/marketing agreements for "TV Guide"
branded monthly and/or weekly cable and DTH guide magazines. In the case of the
carriage/marketing agreement between the Company and TCI, such agreement would
include, among other terms and conditions as the parties may mutually agree
upon, TCI's or its affiliate's agreement to convert TVSM monthly magazines for
cable systems controlled by TCI to weekly magazines, and as consideration
therefor, the agreement of a subsidiary of News Corp. to pay TCI or its designee
an aggregate sum of $10 million upon such conversion being effected.
Continuing Services. Following the closing of the TV Guide Acquisition, for so
long as News Corp. beneficially owns in the aggregate at least 12.5% of the
Class B Common Stock of the Company, News Corp. will continue to make available
to the businesses acquired in the TV Guide Acquisition, at the Company's request
from time to time, services (including bulk paper procurement and the benefits
of certain agreements (to the extent permitted thereunder)) consistent with past
practice, but in any event on terms no less favorable to the Company than "most
favored nation" terms, unless the Company shall otherwise agree, provided that
the right to use services that require the involvement of executives of News
Corp. will be subject to agreement upon allocation of costs (including services
of senior management). News Corp. and the Company have agreed to negotiate to
enter into a definitive services agreement containing the foregoing terms and
such other terms and conditions as may be customary or appropriate under the
circumstances.
Programming and Affiliation Agreements. In connection with the Netlink
Acquisition, one of the companies acquired from Liberty entered into programming
and affiliation agreements with Satellite Services, Inc., a subsidiary of TCI
("SSI"), providing, among other things, for SSI to continue providing
programming for the Company's SMATV business to the extent permitted by SSI's
agreements with suppliers of programming services and pursuant to which SSI may
redistribute the Denver 6 service within the service area of certain of TCI's
cable systems. Pursuant to the Parent Agreement, as described above, News Corp.,
TCI and the Company have agreed to negotiate in good faith to enter into, or
cause their affiliates to enter into, certain affiliation agreements and
carriage/marketing agreements. In connection with the closing of the TV Guide
Acquisition, SSI and the Company entered into an affiliation agreement for the
cable systems of certain of TCI's controlled affiliates to carry TV Guide
Interactive.
TCI and its consolidated affiliates purchased system integration services and
video program promotion and guide services from the Company totaling $516,000
and $9.1 million, respectively, during 1998. The Company purchased $43.7 million
of programming and production services from TCI and its consolidated affiliates
during 1998.
Trademark License Agreements. Pursuant to the Parent Agreement described above,
News Corp. agreed to cause the termination of certain licenses granting it and
its affiliates the right to use the TV Guide brand or associated trademarks. It
is contemplated that the Company may license to News Corp., TCI or their
respective affiliates, on terms to be agreed upon, the right to use the TV Guide
brand and associated trademarks in connection with the Company's products or
services or other arrangements for the benefit of the Company's products or
services.
Purchase of Intellectual Property. At the closing of the TV Guide Acquisition,
TCI sold to the Company all of TCI's right, title and interest in and to any
intellectual property of or arising out of the joint venture formerly known as
TV Guide On Screen for $3,500,000.
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Advertising Revenues. For the fiscal year ended June 30, 1998, the
businesses acquired in the TV Guide Acquisition earned approximately 13.2% of
their advertising revenues from News Corp. affiliates.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
a. Financial Statements of Businesses Acquired. Incorporated by reference
from the Company's Current Report on Form 8-K filed February 24, 1999.
b. Pro Forma Financial Information. Incorporated by reference from the
Company's Current Report on Form 8-K filed February 24, 1999.
c. Exhibits
2.1 Share Exchange Agreement among the Company, TVG Holdings, Inc. and News
America Incorporated, dated as of June 10, 1998. Incorporated by reference
from Appendix I to the Company's definitive proxy statement for its special
meeting of stockholders held February 19, 1999.
2.2 Amended and Restated Stock Purchase Agreement between the Company and
Liberty Media Corporation. Incorporated by reference from Appendix II to
the Company's definitive proxy statement for its special meeting of
stockholders held February 19, 1999.
10.1 Letter Agreement effective as of June 10, 1998 among The News Corporation
Limited, Tele-Communications Inc. and the Company.
10.2 Stockholders Agreement dated March 1, 1999 between The News Corporation
Limited and Tele-Communications Inc.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
TV Guide, Inc.
DATE: March 16, 1999 By: /s/ Peter C. Boylan III
------------------------------
Peter C. Boylan III
Executive Vice President;
Chairman and Chief Executive Officer -
TV Guide Entertainment Group and United
Video Group
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EXHIBIT 10.1
The News Corporation Limited
1211 Avenue of the Americas
New York, New York 10036
Effective as of June 10, 1998
Tele-Communications, Inc.
5619 DTC Parkway
Englewood, Colorado 80111
United Video Satellite Group, Inc.
7140 S. Lewis Avenue
Tulsa, Oklahoma 74136-5422
Gentlemen:
Reference is made to the Share Exchange Agreement, effective as of
June 10, 1998, being entered into simultaneously herewith (the "Agreement")
among News America Incorporated ("NAI"), TVG Holdings, Inc. ("Holdings"), and
United Video Satellite Group, Inc. ("UVSG"). Unless otherwise defined herein,
the terms used herein shall have the meanings ascribed to them in the Agreement.
This agreement (which is referred to in the Agreement as the "Parent Agreement")
confirms the understanding of Tele-Communications, Inc. ("TCI"), The News
Corporation Limited ("News Corp.") and UVSG with respect to the following
matters:
1. Stockholders Meeting. At the Stockholders Meeting (or at any other meeting
to be held for the purpose of approving the Transaction), TCI shall vote
or cause to be voted all shares of UVSG Common Stock owned by it or its
subsidiaries (or, if action is taken by written consent, duly consent in
writing by executing a written consent) in favor of the issuance of the
UVSG Consideration Shares in connection with the Transaction and in favor
of any other matters required to effect the transactions contemplated by
the Agreement.
2. Proxy Statement. To the extent information regarding News Corp., on the
one hand, or TCI, on the other hand, is required for the preparation of
the Proxy Statement, News Corp. and TCI, respectively, shall promptly
supply such information to UVSG upon request.
3. Investments. Until the Closing (when the Stockholders Agreement will
become effective) or the earlier termination of the Agreement, UVSG (in
the case of TCI) and the NAI Contributed Entities (in the case of News
Corp.) will be the exclusive vehicles through which each of TCI and News
Corp., directly or indirectly through its subsidiaries or Controlled
Affiliates, conduct program guide businesses (print, electronic or
otherwise), whether within or outside the United States, other than the
NDS Business. The provision of program guides to customers of the
multichannel video programming delivery ("MVPD")
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systems of TCI, News Corp, or a subsidiary or Controlled Affiliate of TCI
or News Corp. shall not be deemed to be the conduct of a program guide
business by TCI or News Corp. or any of their respective subsidiaries or
Controlled Affiliates in violation of its covenant made in the preceding
sentence regardless of the source of such program guide, but shall be
subject to any contrary provision of any affiliation or carriage agreement
between TCI or News Corp. or their applicable subsidiary or Controlled
Affiliate, on the one hand, and UVSG or any of its subsidiaries, on the
other hand. Except (a) as contemplated by Schedule 1 or Schedule 2 of the
Agreement, (b) for additional investments by UVSG in the existing
businesses of entities currently controlled by UVSG, and by NAI in the NAI
Contributed Entities, and (c) for the NDS Business, neither TCI nor News
Corp. shall, directly or indirectly through their subsidiaries or
Controlled Affiliates, invest in or acquire any guide business prior to
the Closing or the earlier termination of the Agreement. The parties
hereto acknowledge that as of the effective date hereof, British Sky
Broadcasting Group, Plc ("BSkyB") is not a Controlled Affiliate of News
Corp. News Corp. agrees, however, that until the Closing (when the
Stockholders Agreement becomes effective) or the earlier termination of
this Agreement and, if the Stockholders Agreement is entered into,
thereafter for so long as News Corp., directly or through one or more
Controlled Affiliates, is entitled to designate thereunder at least one
director of UVSG, News Corp. will vote or cause to be voted all shares of
stock of BSkyB owned by it directly or through one or more of its
subsidiaries against any transactions that would result in BSkyB
conducting any guide business (print, electronic or otherwise), whether
within or outside the United States (other than the provision of guides to
customers of its MVPD systems), to the extent that any such matters are
submitted to a vote of stockholders of BSkyB.
4. Acquisition Proposals. Except pursuant to the Agreement, News Corp. will
not, and will cause its Affiliates not to, directly or indirectly through
any officer, director, employee, representative, agent, financial advisor
or otherwise, negotiate to sell, sell, or solicit or entertain proposals
or offers from any Person relating to the acquisition of, any of the NAI
Contributed Entities or any equity interest therein or any of their
respective assets or businesses (other than immaterial assets in the
ordinary course of business), whether by merger, purchase, tender offer or
otherwise.
5. Consents and Approvals. TCI and News Corp. shall, and each shall cause its
Controlled Affiliates to, use all reasonable efforts to obtain all
consents, approvals and waivers, give all notices, make all filings and
otherwise to satisfy all conditions required to be obtained, given, made or
satisfied by it in order to close the Transaction; provided, however, that
a party shall not be obligated to take any action pursuant to the foregoing
if the taking of such action is reasonably likely to be materially
burdensome to such party and its subsidiaries taken as a whole or to impact
in a materially adverse manner the economic or business benefit of the
transactions contemplated by the Agreement and the other Transaction
Documents.
6. Tax Treatment. Unless UVSG and Liberty in their discretion have abandoned
the Netlink Transaction, and subject to the proviso clauses of Section
3(a) of the Agreement, each of News Corp. and TCI agrees that (except as
otherwise required by law) (i) it shall use all reasonable efforts to
cause the Transaction and the Netlink Transaction to constitute a tax-free
exchange under Section 351 of the Code and to cause all transfers and
exchanges
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pursuant to such transactions to occur on the same date, (ii) it will not
take any action, and will not permit any of its subsidiaries or Controlled
Affiliates to take any action, that such party knows would cause the
Transaction or the Netlink Transaction not to qualify as a tax-free
exchange pursuant to Section 351 of the Code, and (iii) it will report the
Transaction (or cause it to be reported) on all U.S. tax returns and other
U.S. tax filings as a tax-free exchange under Section 351 of the Code.
7. Continuing Services. Following the Closing and for so long as News Corp.
and its Affiliates beneficially own in the aggregate at least 12.5% of the
Class B Common Stock of UVSG, News Corp. shall, and shall cause its
Controlled Affiliates to, continue to make available to the NAI Contributed
Entities and their respective businesses, at UVSG's request from time to
time, services, including, without limitation, those listed on Schedule 4
to the Agreement but subject to the last paragraph thereof, consistent with
past practice unless USVG shall otherwise agree, and in any event on terms
no less favorable to UVSG than "most favored nation" terms unless UVSG
shall otherwise agree; provided that UVSG's right to use services of NAI,
Holdings and their respective Affiliates (other than bulk paper
procurement) that require the involvement of executives of News Corp. will
be subject to agreement upon an appropriate payment structure based upon
allocation of costs (including services of senior management); provided,
further, that it is understood that certain of such services (as indicated
on Schedule 4) are performed by unaffiliated third parties, and that
neither News Corp. nor any Affiliate of News Corp. shall have any
obligations to perform or supervise the performance of the services to be
performed by an unaffiliated third party but shall at UVSG's request and
expense be obligated to take reasonable actions to enforce its rights
against such third parties in order to ensure such performance; provided,
further, that when News Corp. and its Controlled Affiliates are no longer
making available any such service to News Corp. or any of its Affiliates,
News Corp. or its applicable Controlled Affiliate, as the case may be,
shall not be obligated to continue to make available such service to the
NAI Contributed Entities. As soon as practicable after the effective date
hereof, UVSG's and News Corp.'s respective legal counsel will prepare and
negotiate a definitive agreement with respect to the provision of such
services, containing the foregoing terms and such other terms and
conditions as may be customary or appropriate under the circumstances (the
"Definitive Services Agreement"). Although the parties intend to diligently
negotiate and enter into a Definitive Services Agreement, they acknowledge
and agree that this Section 7 is a binding agreement among them, subject to
the terms and conditions hereof.
8. TV Guide Trademark Licenses. On the Closing Date or as soon thereafter as
may be practicable, News Corp. shall cause all license agreements granting
it or its Controlled Affiliates the right to use the "TV Guide" trade name
or trademark (other than those agreements set forth in Items 2, 3, 7, 8 and
12 of Schedule 5.19 of the NAI Disclosure Schedule) to be terminated
without liability to UVSG or its Controlled Affiliates. The use of the "TV
Guide" marks pursuant to Items 2, 3, 7 and 8 of Schedule 5.19 of the NAI
Disclosure Schedule shall be on arm's length terms to be negotiated by News
Corp. and UVSG.
9. Stock Equalization. TCI and News Corp. each hereby agrees for the benefit
of the other that if (i) UVSG and Liberty, in their discretion, abandon
the Netlink Transaction, (ii) the
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transaction described in paragraph A7 of Schedule 2 of the Agreement has
not been consummated prior to the Closing and is thereafter abandoned, or
(iii) as a result of any other circumstances (other than sales of shares
permitted by the Stockholders Agreement), the aggregate number of shares
of Class A Common Stock owned by such party and its subsidiaries is less
than the aggregate number of shares of Class A Common Stock owned by the
other party and its subsidiaries as of the later of (x) the 90th day
following the Closing, and (y) if as of such 90th day the transaction
described in paragraph A7 of Schedule 2 is pending but not yet
consummated, the date such transaction is consummated or earlier
abandoned, then such party shall acquire (directly or through one or more
subsidiaries), either through open market purchases, or, at its option,
directly from UVSG (at the price set forth below), a number of additional
shares of Class A Common Stock (the "Equalization Shares") such that,
after giving effect to such purchase, the aggregate number of shares of
Class A Common Stock owned by such party and its subsidiaries is equal to
the aggregate number of shares of Class A Common Stock owned by the other
party and its subsidiaries (or any remaining difference in their
respective holdings of Class A Common Stock is attributable solely to
sales of shares by such party or its subsidiaries permitted by the
Stockholders Agreement or purchases of shares by the other party or its
subsidiaries). In the event that TCI or News Corp., as the case may be,
chooses to purchase (or cause a subsidiary to purchase) any of the
Equalization Shares directly from UVSG, UVSG hereby agrees to issue and
sell the Equalization Shares (or requested number thereof) to News Corp.
or TCI (or their respective applicable subsidiaries), as the case may be,
at a price equal to (i) $40 per share (subject to adjustment as provided
below) in the case of shares sold prior to the 90th day following the
Closing, and (ii) the current market price per share (based on the average
of the closing prices of the Class A Common Stock on the ten consecutive
trading days ending on the trading date immediately prior to the date of
the issuance and sale of the Equalization Shares) (subject to adjustment
as provided below) in the case of shares sold on or after the 90th day
following the Closing. The consummation of any issuance and sale of
Equalization Shares by UVSG required pursuant hereto shall occur on the
third Nasdaq Stock Market trading day following the date UVSG receives
written notice from TCI or News Corp. (or their respective applicable
subsidiaries), as the case may be, requesting such issuance. The price per
share payable to UVSG for the Equalization Shares to be purchased shall be
appropriately adjusted in the event of any stock dividend or stock
distribution, subdivision, combination or reclassification affecting the
Class A Common Stock occurring (or the "ex" date for which occurs in
accordance with Nasdaq Stock Market rules) (i) in the case of the $40 per
share price, at any time after the effective date hereof, and (ii) in the
case of the price based on the market price, at any time during the period
that the market price is being calculated or thereafter prior to
consummation of such issuance and sale.
10. Ancillary Agreements. The parties will negotiate in good faith to enter
into, and if agreement upon mutually satisfactory terms is reached will
(or, as the case may be, will cause their respective appropriate
Controlled Affiliates, and will use their reasonable efforts to cause each
other appropriate entity in which they have a significant but
non-controlling equity interest, to), subject to existing commitments,
enter into the following agreements; provided that, except for the Prevue
Interactive affiliation agreement referred to in paragraph (b) below, the
entering into of such agreements shall not be a condition to the Closing:
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a. Affiliation Agreements between UVSG and News Corp. (or a
Controlled Affiliate) with respect to the Prevue Channel and Prevue Interactive;
b. Affiliation Agreements between UVSG (or a subsidiary or
subsidiaries of UVSG) and TCI (or a Controlled Affiliate) with respect to the
Prevue Channel and Prevue Interactive;
c. Carriage/Marketing Agreements for "TV Guide" branded monthly
and/or weekly cable and DTH guide magazines; and
d. Agreement by UVSG to convert its existing Prevue Channel,
Prevue Online and Prevue Interactive products to the "TV Guide" brand as
mutually agreed upon; provided, however, that Prevue International will only use
the TV Guide brand where appropriate.
In the case of TCI, the Carriage/Marketing Agreement referred to above will (x)
include TCI's or the applicable Controlled Affiliate's agreement to convert TVSM
monthly magazines for cable systems controlled by TCI to weekly magazines, (y)
as consideration therefor, include NAI's agreement to pay TCI or its designee an
aggregate sum of $10 million upon such conversion being effected, and (iii)
contain such other terms and conditions as the parties may mutually agree upon.
11. Confidentiality. Each of the parties hereto agrees that it shall,
and shall use its diligent efforts to cause its officers, employees and
authorized representatives to, (i) hold in strict confidence all data and
information obtained by it pursuant to this Parent Agreement or the Agreement or
in connection herewith or therewith from any other party hereto or such other
party's Affiliates or authorized representatives (unless such information is or
otherwise becomes (through no breach of this covenant) public or readily
ascertainable from public or published information) and (ii) use all such data
and information solely for the purpose of consummating the transactions
contemplated hereby and by the Agreement and, except as required by applicable
law or legal process, shall not, and shall use its diligent efforts to ensure
that such officers, employees and authorized representatives do not, disclose
such information to others without the prior written consent of the disclosing
party. In the event the Agreement is terminated, each of TCI and UVSG, on the
one hand, and News Corp., on the other, agrees to (i) return or destroy
promptly, as and if so requested by the other party, each and every document
furnished to it by the other party or any associate or affiliate of such other
party, in connection with the transactions contemplated hereby and any copies
thereof which may have been made and to cause its representatives and any
representatives of others to whom such documents were furnished promptly to
return or destroy, as applicable, such documents and any copies thereof any of
them may have made, other than documents that are publicly available, and (ii)
refrain, and to use its diligent efforts to cause its officers, employees and
representatives to refrain, from using any of the data or information obtained
by it as referred to in the preceding sentence for any purpose.
12. Representations and Warranties.
Each of TCI and News Corp. hereby represents and warrants to the
other as follows:
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(i) Such party is a corporation duly organized, validly existing
and in good standing under the laws of the jurisdiction of its incorporation or
organization and is duly qualified or licensed and in good standing to do
business in each of the jurisdictions where the conduct of its business or the
ownership, leasing or operation of its properties requires such qualification or
licensing, except where the failure to be so duly qualified or licensed and in
good standing, individually or in the aggregate, would not have a material
adverse effect on the ability of such party to perform its obligations
hereunder.
(ii) Such party has all requisite corporate power, authority and
legal capacity to execute and deliver this Parent Agreement and each other
agreement, document, instrument or certificate contemplated by this Parent
Agreement or to be executed by such party in connection with the consummation of
the Transaction (together with this Parent Agreement, the "Parent Transaction
Documents"), and to consummate the transactions contemplated hereby and thereby
and to perform its obligations hereunder and thereunder. All corporate action
necessary to authorize the execution and delivery by such party of this Parent
Agreement and the other Parent Transaction Documents, the consummation of the
transactions contemplated hereby and thereby and the performance by it of its
obligations hereunder and thereunder has been duly taken. This Parent Agreement
has been, and each of the other Parent Transaction Documents will be at or prior
to the Closing, duly and validly executed and delivered by such party. This
Parent Agreement constitutes, and each of the Parent Transaction Documents when
so executed and delivered will constitute, legal, valid and (assuming the due
authorization, execution and delivery by the other parties hereto and thereto)
binding obligations of such party, enforceable against it in accordance with
their respective terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting creditors' rights and
remedies generally, and subject, as to enforceability, to general principles of
equity (regardless of whether enforcement is sought in a proceeding at law or in
equity).
(iii) The execution and delivery of this Parent Agreement and
the other Parent Transaction Documents by such party do not, and the performance
by such party of its obligations hereunder and thereunder will not, (i) violate
or conflict with any provision of the charter, by-laws or other organizational
documents of such party or any amendments thereto or restatements thereof, (ii)
violate any of the terms, conditions or provisions of any law, rule or
regulation applicable to such party , or any order, writ, injunction, judgment
or decree of any court, governmental authority, or regulatory agency to which
such party is subject or by which any of it or its assets are bound, or (iii)
result in a violation or breach of, or constitute (with or without due notice or
lapse of time or both) a default (or give rise to any right of termination,
cancellation or acceleration) under, any of the terms, conditions or provisions
of any note, bond, indenture, debenture, security agreement, trust agreement,
lien, mortgage, lease, agreement, license, franchise, permit, guaranty, joint
venture agreement, or other agreement, instrument or obligation, oral or
written, to which such party is a party (whether as an original party or as an
assignee or successor) or by which such party or any of its properties is bound,
except for such breaches or defaults as are not reasonably likely to have a
material adverse effect on the ability of such party to perform its obligations
hereunder or thereunder.
6
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13. Survival; Indemnification.
(a) The representations and warranties contained in Section 12 of
this Parent Agreement shall survive the execution and delivery hereof and the
Closing under the Agreement, and shall thereafter terminate and expire on the
second anniversary of the Closing Date. Any of such representations or
warranties which is the subject of a claim or dispute asserted in writing prior
to the expiration of such two year period shall survive with respect to such
claim or dispute until the final resolution thereof. The covenants and
agreements contained in this Parent Agreement shall survive the Closing without
limitation (except pursuant to their terms).
(b) Each of TCI and News Corp. hereby agrees to indemnify and hold
the other and the directors, officers, employees, Affiliates, agents, successors
and assigns of the other harmless from and against any and all losses,
liabilities, damages, deficiencies, and obligations resulting from, based upon,
arising out of or otherwise in respect of, and all claims, actions, suits,
proceedings, demands, judgments, assessments, fines, interest, penalties, costs
and expenses (including settlement costs and reasonable legal, accounting,
experts and other fees, costs and expenses) incident or relating to or resulting
from any nonperformance or breach of any covenant or agreement of such party
contained in this Parent Agreement or any Parent Transaction Document.
14. Termination. In the event of any termination of the Agreement, this
Parent Agreement shall forthwith become wholly void and of no further force and
effect and there shall be no liability on the part of TCI or News Corp. by
reason of this Parent Agreement except as set forth in Section 11
(Confidentiality), Section 15 (Expenses) and Section 21 (Publicity) of this
Parent Agreement, which Sections shall survive the termination of this Parent
Agreement, and (ii) nothing herein shall relieve any party hereto from liability
for any breach by it of any of its representations, warranties, covenants or
agreements made in this Parent Agreement.
15. Expenses. Each party hereto shall pay its own expenses (including fees
and expenses of legal counsel, investment bankers, brokers or other
representatives or consultants) incurred in connection with this Parent
Agreement and the transactions contemplated hereby (whether or not consummated).
16. Governing Law. This Parent Agreement shall be governed by the laws of
the State of New York applied to contracts made and wholly performed in such
State, without regard to principles governing conflicts of law. Any action to
enforce any provision of this Parent Agreement against TCI or News Corp. may be
brought only in a court of the State of New York or in the United States
District Court for the Southern District of New York. Each of TCI and News Corp.
agrees to submit to the personal jurisdiction of such courts and to accept
service of process at its address for notices pursuant to this Parent Agreement
in any such action or proceeding brought in any such court and hereby waives any
claim that such action or proceeding brought in any such court has been brought
in an inconvenient forum.
17. Headings. The section headings of this Parent Agreement are for
reference purposes only and are to be given no effect in the construction or
interpretation of this Parent Agreement.
18. Notices. All notices and other communications hereunder shall be in
writing and shall be delivered personally, telecopied (if receipt of which is
confirmed by the person to whom sent), sent by nationally recognized overnight
delivery service or mailed by registered or certified mail
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(if return receipt is requested) to News Corp. or TCI, as applicable, at the
following addresses (or to such other person or address for a party as shall be
specified by such party by like notice) (notice shall be deemed given upon
receipt, if delivered personally, by overnight delivery service or by telecopy,
or on the third business day following mailing, if mailed, except that notice of
a change of address shall not be deemed given until actually received):
(a) If to TCI, to:
Tele-Communications, Inc.
5619 DTC Parkway
Englewood, Colorado 80111
Attention: General Counsel
Telephone (303) 267-4800
Telecopier (303) 488-3245
with a copy to:
TCI UVSG, Inc.
5619 DTC Parkway
Englewood, Colorado 80111
Attention: President
Telephone (303) 267-5360
Telecopier (303) 488-3268
Baker & Botts, L.L.P.
599 Lexington Avenue
New York, New York 10022
Attention: Elizabeth Markowski
Telephone: (212) 705-5000
Telecopier: (212) 705-5125
(b) If to News Corp., to:
The News Corporation Limited
1211 Avenue of the Americas
New York, New York 10036
Attention: Arthur M. Siskind
Senior Executive Vice President
and Group General Counsel
Telephone: (212) 852-7007
Telecopier: (212) 768-2029
with a copy to:
Squadron, Ellenoff, Plesent & Sheinfeld, LLP
551 Fifth Avenue
New York, New York 10176
Attention: Jeffrey W. Rubin
Telephone: (212) 476-8224
Telecopier: (212) 697-6686
Notices to UVSG shall be given as provided in the Agreement.
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19. Separability. If at any time any of the covenants or the
provisions contained herein shall be deemed invalid or unenforceable by the laws
of the jurisdiction wherein it is to be enforced, such covenants or provision
shall be considered divisible as to such portion and such covenants or
provisions shall become and be immediately amended and reformed to include only
such covenants or provisions as are enforceable by the court or other body
having jurisdiction of this Parent Agreement; and the parties agree that such
covenants or provisions, as so amended and reformed, shall be valid and binding
as though the invalid or unenforceable portion had not been included herein.
20. Amendment; Waiver. No provision of this Parent Agreement may be
amended or modified except by an instrument or instruments in writing signed by
the parties hereto. Any party may waive compliance by another with any of the
provisions of this Parent Agreement. No waiver of any provision hereof shall be
construed as a waiver of any other provision. Any waiver must be in writing.
21. Publicity. Except as required by law or regulation or the
requirements of the NASD or the New York Stock Exchange, no public disclosure or
publicity concerning the subject matter hereof will be made without the approval
of each of the parties hereto.
22. No Benefit to Others. The representations, warranties, covenants
and agreements contained in this Parent Agreement are for the sole benefit of
the parties hereto, their respective Affiliates, and the respective successors
and assigns of the parties hereto and their respective Affiliates, and they
shall not be construed as conferring and are not intended to confer any rights
on any other Persons.
23. Entire Agreement. This Parent Agreement, the Agreement, and that
certain letter agreement between TCI and News Corp. being entered into together
herewith, effective as of June 10, 1998, relating to "TVGOS Intellectual
Property," contain, and are intended as, a complete statement of all of the
terms of the arrangements between the parties with respect to the matters
provided for, and supersede any previous agreements and understandings between
the parties with respect to those matters, including, without limitation, the
Letter Agreement.
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If the foregoing accurately reflects our agreement, please sign the
enclosed duplicate of this agreement in the space provided below and return the
same to the undersigned.
Very truly yours,
THE NEWS CORPORATION LIMITED
By: /s/ Arthur Siskind
Name: Arthur Siskind
Title: Director
Accepted and Agreed:
TELE-COMMUNICATIONS, INC.
By: /s/ Stephen M. Brett
Name: Stephen M. Brett
Title: Executive Vice President,
Secretary and General Counsel
UNITED VIDEO SATELLITE GROUP, INC.
By: /s/ Gary S. Howard
Name: Gary S. Howard
Title: Chairman and CEO
10
<PAGE>
EXHIBIT 10.2
STOCKHOLDERS' AGREEMENT
among
TVG Holdings, Inc.
The News Corporation Limited
TCI UVSG, Inc.
Liberty Media Corporation
Tele-Communications, Inc.
United Video Satellite Group, Inc.
<PAGE>
TABLE OF CONTENTS
Page
SECTION 1 DEFINITIONS; CERTAIN GENERAL MATTERS.......................1
1.1 Certain Defined Terms......................................1
---------------------
1.2 Voting; Written Consent....................................8
-----------------------
SECTION 2 BOARD OF DIRECTORS.........................................8
2.1 Composition................................................8
-----------
2.2 Removal....................................................8
-------
2.3 Vacancies..................................................9
---------
2.4 Board of Directors Vote....................................9
-----------------------
2.5 Conflicting Charter or Bylaw Provisions...................10
---------------------------------------
2.6 Conflicts of Interest.....................................10
---------------------
SECTION 3 NON-COMPETE...............................................10
SECTION 4 TRANSFERS AND CONVERSIONS.................................11
4.1 Transfer Restrictions Generally...........................11
-------------------------------
4.2 Transfers to Affiliates...................................11
-----------------------
4.3 Right of First Offer......................................12
--------------------
4.4 Right of First Refusal....................................14
----------------------
4.5 Terms and Conditions of Sales Pursuant to ................21
Sections 4.3 and 4.4
--------------------------------------------------------
4.6 Transferee Stockholders...................................23
-----------------------
4.7 Qualifying Transfer.......................................23
-------------------
4.8 Tag-Along Right...........................................24
---------------
SECTION 5 STOCKHOLDER VOTE .........................................25
SECTION 6 LEGEND....................................................25
SECTION 7 REGISTRATION..............................................26
7.1 Demand Registrations......................................26
--------------------
(a) Requests for Registration........................26
-------------------------
(b) Number of Demand Registrations...................27
------------------------------
(c) Restrictions on Registrations....................27
-----------------------------
(d) Underwriting.....................................27
------------
(e) Shelf Registration...............................28
------------------
(f) Allocation Among Eligible Holders................28
---------------------------------
(g) Inclusion of Shares by the Corporation...........29
--------------------------------------
7.2 Lockup Agreements.........................................29
-----------------
7.3 Registration Procedures...................................29
-----------------------
7.4 Expenses..................................................31
--------
7.5 Obligations of Requesting Holders Participating in ......31
Demand Registration
----------------------------------------------------
7.6 Indemnification and Contribution..........................32
--------------------------------
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SECTION 8 MISCELLANEOUS.............................................34
8.1 Waivers...................................................34
-------
8.2 Specific Performance......................................34
--------------------
8.3 Remedies Cumulative.......................................34
-------------------
8.4 Attorneys' Fees...........................................35
---------------
8.5 Execution.................................................35
---------
8.6 Notices...................................................35
-------
8.7 Severability..............................................37
------------
8.8 Entire Agreement..........................................37
----------------
8.9 Binding Effect............................................38
--------------
8.10 Governing Law.............................................38
-------------
8.11 Interpretation............................................38
--------------
8.12 Parties...................................................38
-------
ii
<PAGE>
STOCKHOLDERS' AGREEMENT
THIS STOCKHOLDERS' AGREEMENT, dated as of March 1, 1999, is by and
among TVG Holdings, Inc., a Delaware corporation ("News Holdings"), The News
Corporation Limited, a South Australia, Australia corporation ("News Corp."),
TCI UVSG, Inc., a Delaware corporation ("TCI Holdings"), Liberty Media
Corporation, a Delaware corporation, Tele-Communications, Inc., a Delaware
corporation ("TCI"), and United Video Satellite Group, Inc., a Delaware
corporation (the "Corporation"). News Holdings and TCI Holdings are sometimes
collectively referred to herein as the "Initial Stockholders," and each as an
"Initial Stockholder."
RECITALS
A. The Initial Stockholders, in the aggregate, own a majority of the
issued and outstanding shares of Class A Common Stock, par value $.01 per share,
of the Corporation ("Class A Common Stock"), and all of the issued and
outstanding shares of Class B Common Stock, par value $.01 per share, of the
Corporation ("Class B Common Stock" and, together with the Class A Common Stock,
the "Common Stock").
B. The Stockholders desire to express their agreement regarding, among
other matters, their voting and transfer of their shares of Common Stock, upon
the terms and conditions hereinafter provided.
Therefore, in consideration of their mutual promises contained herein,
and intending to be legally bound, the parties agree as follows:
SECTION 1 DEFINITIONS; CERTAIN GENERAL MATTERS
1.1 Certain Defined Terms. As used in this Agreement,
the following terms shall have the meanings set forth below.
Affiliate: with respect to any Person, any other Person that directly
or indirectly through one or more intermediaries Controls,
is Controlled by, or is under common Control with, such
Person. For purposes of this Agreement, neither the
Corporation nor any Person Controlled by the Corporation
shall be deemed to be an Affiliate of any Stockholder or
Participant.
Affiliated Group: with respect to any Person, the Parent of such Person and
each Subsidiary of such Parent (including such Person).
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Agreement: this Stockholders' Agreement, as amended from time to time
in accordance with its terms.
AT&T Merger: the acquisition of TCI by AT&T Corp. by merger.
AT&T Tracking
Stock: a class or series of common stock of AT&T Corp. that
following the AT&T Merger is intended to track the
performance of a group of assets of AT&T that include its
indirect interest in the Corporation.
Board: the Board of Directors of the Corporation.
Business Day: any day other than a Saturday, Sunday or a day on which
banking institutions in Denver, Colorado, New York, New York
or Tulsa, Oklahoma are required or authorized to be closed.
Closing Price: of a share of Common Stock on any Trading Day, (i) the last
reported sale price, regular way, for a share of Class A
Common Stock on such Trading Day as reported on the
principal national securities exchange on which the Class A
Common Stock is listed or admitted for trading or (ii) if
the Class A Common Stock is not listed or admitted for
trading on any national securities exchange, the last
reported sale price, regular way, for a share of Class A
Common Stock on such Trading Day as reported on The Nasdaq
Stock Market, or (iii) if the Class A Common Stock is not
listed or admitted to trading on any national securities
exchange or The Nasdaq Stock Market, the average of the
highest bid and lowest asked prices for a share of Class A
Common Stock on such Trading Day in the domestic
over-the-counter market as reported by the National
Quotation Bureau Incorporated, or any similar successor
organization.
Commission: the Securities and Exchange Commission (and any successor to
the functions of such agency).
Control: the ability to direct or cause the direction (whether
through the ownership of voting securities, by contract or
otherwise) of the management and policies of a Person or to
control (whether affirmatively or negatively and whether
through the ownership of voting securities, by contract or
otherwise) the decision of such Person to engage in the
particular conduct at issue.
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Controlled
Affiliate: with respect to any Person, any other Person that the first
Person directly or indirectly through one or more
intermediaries Controls. For purposes of this Agreement,
neither the Corporation nor any Person Controlled by the
Corporation shall be deemed to be a Controlled Affiliate of
any Stockholder or Participant.
Eligible
Stockholder: as of any relevant date, a Stockholder that then is (or is a
member of a Stockholder Group that then is) entitled to
designate at least one director, but excluding, for purposes
of Section 4, the First Offer Stockholder or First Refusal
Stockholder, as applicable, and the members of their
respective Stockholder Groups.
Governmental
Approval: any consent, approval or authorization of, notice to
declaration of, or filing with, any Governmental Authority,
including expiration or early termination of all applicable
waiting periods under the HSR Act.
Governmental
Authority: means any court, administrative agency or commission or
other governmental agency or instrumentality, domestic or
foreign, or any arbitrator, of competent jurisdiction.
HSR Act: The Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended, and the rules and regulations promulgated
thereunder.
Independent
Director: a director who is unaffiliated with the Corporation or any
Participant and is an "independent director" within the
meaning of the Nasdaq National Market eligibility standards
set forth in Marketplace Rule 4460(c) of the National
Association of Securities Dealers Manual, as amended, or any
successor rule thereto, or any similar rule of any
securities exchange which in the future may become the
principal market for the Class A Common Stock of the
Corporation.
Indirect Transfer: a Transfer of common stock or other equity interests of a
Stockholder or of a Person of which such Stockholder is a
direct or indirect Subsidiary to any
3
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Person after giving effect to which the Person that was such
Stockholder's Parent prior to such Transfer is no longer its
Parent; provided, however, that none of the following shall
be deemed an Indirect Transfer provided that the new Parent
(if any) of the affected Stockholder becomes a party to this
Agreement as a Participant: (i) a Transfer in which the
holders of voting securities of the Person that was such
Stockholder's Parent prior to such Transfer beneficially own
voting securities representing fifty percent (50%) or more
of the voting power of the Person that is such Stockholder's
Parent immediately after such Transfer, (ii) in the case of
TCI Holdings or any other Subsidiary of Liberty that is a
Stockholder, any of the following that occurs after the AT&T
Merger, (x) a Transfer in which Liberty ceases to be a
Subsidiary of TCI but remains a Subsidiary of AT&T, (y) a
Transfer that is made pursuant to the Liberty Contribution
or (z) a Transfer in which the holders of AT&T Tracking
Stock prior to such Transfer beneficially own voting
securities representing fifty percent (50%) or more of the
voting power of the Person that is such Stockholder's Parent
immediately after such Transfer, or (iii) a Transfer in
connection with the sale or other disposition (including by
way of merger, consolidation or share exchange) of all or
substantially all of the assets of the Parent of such
Stockholder.
Liberty: prior to the Liberty Contribution, if any, Liberty Media
Corporation, a Delaware corporation, and after the Liberty
Contribution, if any, Liberty Media Group LLC, a Delaware
limited liability company, and in each case any successor
(by merger, consolidation, Transfer or otherwise) to all or
substantially all of Liberty's business and assets.
Liberty
Contribution: the contribution of the assets of Liberty Media Corporation
to Liberty Media Group LLC pursuant to that certain
Contribution Agreement to be entered into by Liberty Media
Corporation, Liberty Media Group LLC, Liberty Management LLC
and AT&T in connection with the AT&T Merger.
Lien: means, with respect to any asset, (i) any mortgage, deed of
trust, lien, pledge, charge, security interest,
4
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easement, covenant, right-of-way, restriction, equity or
encumbrance of any nature whatsoever in or on such asset,
(ii) the interest of a vendor or a lessor under any
conditional sale agreement, capital lease or title retention
agreement relating to such asset and (iii) in the case of
securities, any purchase option, call or similar right of a
third party with respect to such securities or any
limitation on the voting rights of such securities.
Market Transaction: a Transfer of shares of Class A Common Stock in
a public offering pursuant to a registration statement, or
in a transaction with a broker, specialist or market maker,
at a price based on the trading prices of the Class A Common
Stock payable in cash.
Minimum Number: as of any relevant date, 12.5% of the number of shares of
Class B Common Stock outstanding on such date.
NDS Business: the provision by News Digital Systems plc and its
subsidiaries of technology relating to electronic program
guides solely in conjunction with the development and sale
of encryption and conditional access services for television
and data broadcasting.
Parent: with respect to any Person as of any relevant date, such
Person if it is its own ultimate parent entity (within the
meaning of the HSR Act) or if it has no ultimate parent
entity that is a corporation, limited liability company or
partnership; otherwise "Parent" means such ultimate
corporate, limited liability company or partnership parent
entity; provided, however, that (i) for so long as News
Holdings or any other Subsidiary of News Corp. that is a
Stockholder is a Subsidiary of News Corp., News Corp. shall
be deemed the Parent of such Stockholder notwithstanding any
change in the stock ownership of News Corp., (ii) for so
long as TCI Holdings or any other Subsidiary of TCI or
Liberty that is a Stockholder is a Subsidiary of TCI, TCI
shall be deemed the Parent of such Stockholder
notwithstanding any change in the stock ownership of TCI,
(iii) following the AT&T Merger, if, at any time that TCI
Holdings or any other Subsidiary of Liberty is a
Stockholder, Liberty ceases to be a Subsidiary of TCI but
continues to be a Subsidiary of AT&T,
5
<PAGE>
Liberty shall be deemed the Parent of TCI Holdings or such
other Subsidiary of Liberty that is a Stockholder, provided
that, in such case, TCI shall continue to be deemed a
Participant for purposes of Section 3 for so long as Liberty
and TCI are Subsidiaries of AT&T and Liberty is or is deemed
to be the Parent of a Stockholder, and (iv) following the
Liberty Contribution, Liberty shall be deemed the Parent of
TCI Holdings and any other Subsidiary of Liberty that is a
Stockholder, provided that, in such case, TCI shall continue
to be deemed a Participant for purposes of Section 3 for so
long as all of the following conditions are met: (x) TCI is
a Subsidiary of AT&T, (y) a Subsidiary of AT&T is a member
of Liberty and (z) a Subsidiary of Liberty is a Stockholder.
Parent Agreement: that certain Parent Agreement, dated as of June 10, 1998,
among the Corporation, TCI and News Corp.
Participants: with respect to any Stockholder (or Stockholder Group), the
Parent of such Stockholder (or the members of such
Stockholder Group) or such Stockholder if it is its own
Parent. A Participant shall be deemed to be "related" or
"relating" to a Stockholder (or Stockholder Group) if it is
a Parent of such Stockholder (or the members of such
Stockholder Group).
Person: any individual, corporation, partnership, limited liability
company, joint venture, business association or other
entity.
Private Approval: means any consent, approval or authorization of, notice to,
declaration of or filing with, any Person other than a
Governmental Authority.
Securities Act: the Securities Act of 1933, as amended, and the rules and
regulations of the Commission promulgated thereunder.
Significant
Interest: as to any Transfer of Class B Common Stock by any
Stockholder Group in any single transaction or series of
related transactions, a number of shares of Class B Common
Stock that represents more than 50% of the number of such
shares held by such Stockholder
6
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Group immediately prior to such Transfer (or the first
Transfer of such series).
Stockholder: each Initial Stockholder for so long as it owns shares of
Class B Common Stock and any Person that hereafter becomes a
party to this Agreement pursuant to Section 4.6, for so long
as it owns shares of Class B Common Stock.
Stockholder Group: (i) any Stockholder none of the other members of the
Affiliated Group of which is a Stockholder and (ii) any
group of two or more Stockholders that are members of the
same Affiliated Group.
Subsidiary: of any Person (the "first Person") means any other Person a
majority of the voting power of the outstanding voting
interests of which are owned by the first Person and/or one
or more Subsidiaries of the first Person; provided, however,
that (i) for purposes of Section 3 hereof, a Person shall
not be deemed to be a Subsidiary of a Participant unless the
Participant Controls such Person, and (ii) in each case,
such other Person shall be deemed to be a Subsidiary of the
first Person only for so long as such ownership and, if
applicable, Control exists.
Trading Day: a day on which the principal national securities exchange on
which the Class A Common Stock is listed or admitted to
trading, or The Nasdaq Stock Market if the Class A Common
Stock is not listed or admitted to trading on any national
securities exchange, as applicable, is open for the
transaction of business (unless such trading shall have been
suspended for the entire day) or, if the Class A Common
Stock is not listed or admitted to trading on any national
securities exchange or The Nasdaq Stock Market, any Business
Day.
Transfer: to sell, exchange, assign or transfer.
1.2 Voting; Written Consent.
(a) Any agreement by the Stockholders herein to vote their shares of Common
Stock in a certain manner shall be deemed, in each instance, to include an
agreement by each Stockholder to take all actions within its control necessary
to call, or cause the Corporation and
7
<PAGE>
the appropriate officers and directors of the Corporation to call, as promptly
as practicable, a special or annual meeting of stockholders or to act by written
consent.
(b) When any action is required to be taken by a Stockholder pursuant to
this Agreement, such Stockholder shall take all steps within its control
necessary to implement such action, including executing or causing to be
executed, as promptly as practicable, a consent in writing in lieu of an annual
or special meeting of stockholders pursuant to Section 228 of the Delaware
General Corporation Law or any successor statute thereto ("DGCL") to effect such
stockholder action.
SECTION 2 BOARD OF DIRECTORS
2.1 Composition. At the time of the execution of this
Agreement, the Board consists of 10 persons, four of whom have been designated
on the date hereof by News Holdings and four of whom have been designated by TCI
Holdings. The remaining two directors, each of whom qualifies as an Independent
Director, were appointed to the Board by the eight directors so designated by
the Initial Stockholders. After the date hereof, unless otherwise agreed by all
Eligible Stockholders, the Board shall continue to consist of ten persons and
each Stockholder Group shall be entitled to designate one individual to serve as
a director for each 12.5% of the outstanding shares of Class B Common Stock
owned in the aggregate by the members of such Stockholder Group (rounded to the
nearest 12.5%, with more than 6.25% being rounded up and 6.25% or less being
rounded down, subject to Sections 4.7 and 4.8). The Board shall designate all
other directors (at least two of whom shall qualify as Independent Directors).
The Stockholder Groups shall make their designations of individuals to serve as
directors prior to each annual meeting of the stockholders of the Corporation in
a manner that is consistent with the Corporation's Certificate of Incorporation
and Bylaws, and any applicable rules and regulations of the Commission and the
principal stock exchange or association on which the Common Stock is listed.
Each Stockholder shall vote all shares of Common Stock owned by it for the
election to the Board of the Persons designated to be directors in accordance
with this Agreement. Any period during which a Stockholder Group is entitled to
designate at least one director pursuant to this Agreement shall be referred to
herein as such Stockholder Group's "Director Eligibility Period."
2.2 Removal. Each Stockholder shall vote all shares of Common
Stock owned by it for the removal from the Board (with or without cause) of any
director who was designated by a Stockholder Group as contemplated by the first
sentence of Section 2.1 or pursuant to this Agreement, if the Stockholder Group
that so designated such director (i) requests such removal by notice to the
other Stockholders or (ii) unless such Stockholder Group has theretofore
complied with the following sentence, ceases to hold a number of shares of Class
B Common Stock that entitles such Stockholder Group to designate the number of
directors previously designated by such Stockholder Group (except that upon any
such reduction in its ownership of shares of Class B Common Stock, such
Stockholder Group shall be entitled to identify a number of directors who shall
not be removed pursuant to this clause (ii) equal to the number of directors
that such Stockholder Group is then entitled to designate pursuant to Section
2.1). A Stockholder Group that ceases to hold a number of shares of Class B
Common Stock that entitles such Stockholder Group to designate the number of
directors previously designated by such Stockholder Group shall cause the
resignation of a number of the directors designated by such Stockholder Group
such that the remaining number
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of designees of such Stockholder Group serving on the Board is equal to the
number of directors that such Stockholder Group is entitled to designate
pursuant to Section 2.1. No director shall be removed from the Board prior to
the expiration of his or her term except for cause or pursuant to this Section
2.2.
2.3 Vacancies. If, as a result of death, disability,
retirement, resignation, removal (with or without cause) or otherwise there
shall exist or occur any vacancy on the Board:
(a) the Stockholder Group entitled to designate (pursuant to Section 2.1,
4.7 or 4.8) the director whose death, disability, retirement, resignation or
removal resulted in such vacancy (other than a Stockholder Group that was
required to cause such resignation) may designate another individual to fill
such vacancy and to serve as a director of the Corporation;
(b) in the case of an Independent Director, the remaining directors serving
on the Board shall designate another individual who if elected would qualify as
an Independent Director to fill such vacancy and to serve as a director of the
Corporation; and
(c) in all other cases, the Stockholder Group that, subject to Section 4.7,
is then entitled to designate a greater number of directors under Section 2.1
than the number of directors currently serving on the Board who were designated
by such Stockholder Group may designate another individual to fill such vacancy
and to serve as a director of the Corporation (or if more than one Stockholder
Group is then entitled to designate a greater number of directors, then each
such Stockholder Group may make such designation according to the number of
additional directors that each such Stockholder Group is so entitled to
designate).
Each Stockholder shall vote its respective shares of Common
Stock in favor of the individual designated in accordance with the preceding
sentence to fill such vacancy.
2.4 Board of Directors Vote.
(a) Unless otherwise agreed by the Eligible Stockholders, any action taken
by the Board shall require the affirmative vote of at least seven of the ten
members of the Board; provided, however, that the removal of the Chief Executive
Officer, the President or any Executive Vice President of the Corporation shall
require the affirmative vote of at least six of the ten members of the Board.
(b) Pursuant to the Bylaws of the Corporation, the Board shall create an
Executive Committee comprised of four of the directors designated by the
Stockholders pursuant to this Agreement. Two directors designated by each of the
Initial Stockholders shall be the initial members of the Executive Committee.
Thereafter the composition of the Executive Committee will be such that
directors designated by a Stockholder Group pursuant to this Agreement will
represent as nearly as may be practicable the same percentage of the four
members of the Executive Committee as they do of the members of the Board
designated by the Eligible Stockholders pursuant to this Agreement. The
Executive Committee shall have such duties and powers (without further action of
the Board) as shall be delegated to such committee from time to time by the
unanimous vote of the
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entire Board; provided, however, that such Executive Committee shall have the
authority to act only by the unanimous vote of the four members of such
committee.
2.5 Conflicting Charter or Bylaw Provisions. Each Stockholder
shall vote its shares of Common Stock, and shall take all other necessary
actions within its control necessary, to ensure that the Corporation's
Certificate of Incorporation and Bylaws, as each may be amended from time to
time, facilitate and do not at any time conflict with the provisions of this
Agreement.
2.6 Conflicts of Interest. TCI Holdings agrees that it shall
cause the directors designated by it to abstain from any decision by the Board
to cause the Corporation to take or refrain from taking any action to enforce
its rights under the Amended and Restated Stock Purchase Agreement between the
Corporation and Liberty, effective as of May 18, 1998. News Holdings agrees that
it shall cause the directors designated by it to abstain from any decision by
the Board to cause the Corporation to take or refrain from taking any action to
enforce its rights under the Share Exchange Agreement among News America
Incorporated, News Holdings and the Corporation, effective as of June 10, 1998.
SECTION 3 NON-COMPETE
Each Participant hereby covenants and agrees with and for the
sole benefit of each other Participant and its related Stockholder Group that
the Corporation will be the exclusive vehicle through which such Participant,
directly or indirectly through its Subsidiaries or Controlled Affiliates,
conducts program guide businesses (print, electronic or otherwise), whether
within or outside the United States, other than the NDS Business; provided,
however, that the provisions of this sentence shall apply only during the
Director Eligibility Period of the Stockholder Group that is related to such
Participant and only for so long as at least two Participants continue to be
obligated by the covenant made in this sentence. The provision of program guides
to customers of the multichannel video programming delivery ("MVPD") systems of
a Participant or a Subsidiary or Controlled Affiliate of a Participant shall not
be deemed to be the conduct of a program guide business by such Participant or
any of its Subsidiaries or Controlled Affiliates in violation of its covenant
made in this Section 3 regardless of the source of such program guide, but shall
be subject to any contrary provision of any affiliation or carriage agreement
between such Participant, Subsidiary or Controlled Affiliate, on the one hand,
and the Corporation or any of its Subsidiaries, on the other hand. The parties
hereto acknowledge that as of June 10, 1998, the effective date of the Share
Exchange Agreement among News America Incorporated, News Holdings and the
Corporation and of the related Parent Agreement among TCI, News Corp. and the
Corporation, British Sky Broadcasting Group Plc ("BSkyB") was not a Controlled
Affiliate of News Corp. News Corp. agrees, however, that for so long as it is
bound by this Section 3, it will vote or cause to be voted all shares of stock
of BSkyB owned by it directly or through one or more of its subsidiaries against
any transactions that would result in BSkyB conducting any guide business
(print, electronic or otherwise), whether within or outside the United States
(other than the provision of guides to customers of its MVPD systems), to the
extent that any such matters are submitted to a vote of stockholders of BSkyB.
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SECTION 4 TRANSFERS AND CONVERSIONS
4.1 Transfer Restrictions Generally.
(a) During a Stockholder Group's Director Eligibility Period, without the
prior written consent of such Stockholder Group, no Stockholder and no holder of
Class A Common Stock that is a party to this Agreement may Transfer all or any
of its shares of Common Stock, and no Indirect Transfer may occur with respect
to such Stockholder or holder (each a "Restricted Holder"), in each case except
in compliance with Section 4.2, 4.3, 4.4 or 4.8 of this Agreement, and only if
the requirements of Section 4.6, if applicable, have also been satisfied. Any
Transfer of shares of Common Stock that is subject to the preceding sentence
shall, unless made in compliance with the preceding sentence, be null and void,
and of no effect. During a Stockholder Group's Director Eligibility Period,
without the prior written consent of such Stockholder Group, no other
Stockholder may convert any shares of Class B Common Stock into shares of Class
A Common Stock except in compliance with Section 4.3 or 4.4, as applicable, of
this Agreement.
(b) Except as expressly permitted by this Agreement, each Stockholder
shall, from and after the date hereof, (i) be the record and beneficial owner of
such shares of Common Stock indicated in the Corporation's records as being
owned by such Stockholder and (ii) have sole voting power with respect to such
Stockholder's shares of Common Stock and will not grant any proxy with respect
to such shares, enter into any voting trust or other voting agreement or
arrangement with respect to such shares or grant any other rights to vote such
shares; provided, however, that the foregoing shall not be construed to limit
the ability of a Stockholder to enter into agreements with respect to the voting
of its shares of Common Stock pending a sale of such stock permitted by Section
4.4 or 4.8 or to enter into agreements not inconsistent with this Agreement that
restrict such Stockholder's ability to transfer shares of Common Stock.
(c) The Corporation agrees not to record any Transfer or conversion of the
Common Stock by any Restricted Holder in the stock transfer books of the
Corporation unless the Transfer or conversion complies with all provisions of
this Agreement.
4.2 Transfers to Affiliates. Any Restricted Holder may
Transfer all or any of the shares of Common Stock owned by it to another member
of the Affiliated Group of which such Restricted Holder is a member, provided
that, in each case, the transferee assumes, jointly and severally with the
transferor if less than all of such shares are transferred, the obligations of
the transferor under this Agreement and becomes a party to this Agreement in
accordance with Section 4.6.
4.3 Right of First Offer.
(a) If a Restricted Holder (the "First Offer Stockholder") desires to
Transfer all or any portion of the shares of Class A Common Stock owned by it or
issuable upon conversion of shares of Class B Common Stock owned by it in a
Market Transaction, the First Offer Stockholder shall first submit a written
offer (the "Market Offer") to sell the shares so proposed to be sold (the
"Market Shares") to each other stockholder that is an Eligible Stockholder (the
"Market Rightsholders") at a price per share (the "Market Price") payable in
cash equal to the average of the
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Closing Prices per share of the Class A Common Stock for the five consecutive
Trading Days ending on the Trading Day immediately preceding the date of the
Market Offer (except as otherwise provided in Section 4.5(a)(iii)), and
otherwise on the terms and conditions contained in this Agreement. The Market
Offer shall set forth the aggregate number of Market Shares proposed to be sold
and the number of such shares that would be issued upon conversion of shares of
Class B Common Stock owned by the First Offer Stockholder (such shares of Class
B Common Stock being the "Conversion Shares"), whether such Market Transaction
will be effected through a broker, specialist or market maker or in a registered
public offering and the Market Price. If the Market Transaction is to be
effected in a registered public offering, any other Restricted Holder that
intends to exercise its right under Section 7.1(a) to include any of its shares
of Class A Common Stock in such registered public offering shall submit a Market
Offer with respect to such shares to each Eligible Stockholder within three
Business Days of its receipt of the first Market Offer. A Restricted Holder
referred to in the immediately preceding sentence shall not be entitled to
exercise the rights of a Market Rightsholder with respect to such first Market
Offer.
(i) If a Market Rightsholder desires to accept all or any portion of the
Market Offer, such Market Rightsholder (a "Market Electing Holder") shall notify
the First Offer Stockholder in writing of its intention to acquire Market Offer
Shares and the number of such shares it desires to acquire and deliver a copy of
such notice to each other Market Rightsholder, such notice to be given (x) in
the case of a proposed Market Transaction to be effected through a broker,
specialist or market maker, within three Business Days of receipt of such Market
Offer and (y) in the case of a proposed registered public offering of Market
Shares, within five Business Days of receipt of the Market Offer.
(ii) If the Market Electing Holders have elected to acquire, in the
aggregate, either (x) all of the Market Shares or (y) a number of Market Shares
that is equal to or greater than the number of Conversion Shares but less than
the number of Market Shares, then the Market Electing Holders shall have the
right to acquire, in the case of clause (x), all but not less than all of the
Market Shares or, in the case of clause (y), all but not less than all of the
Conversion Shares (such shares that the Market Electing Holders have the right
to acquire, the "Allocable Market Shares"), allocated among them as follows (or
in such other manner as the Market Electing Holders may agree):
(A) the Allocable Market Shares shall be allocated among the Market
Electing Holders pro rata (based on the number of shares of Class B Common Stock
owned by each of them) until all of the Conversion Shares and then, if
applicable, any remaining Allocable Market Shares have been allocated or any
Market Electing Holder has been allocated the number of Conversion Shares or the
number of Market Shares, as the case may be, that it desires to acquire, as
specified in its notice to the First Offer Stockholder;
(B) if all Allocable Market Shares are not allocated pursuant to paragraph
(A) or any prior application of this paragraph (B), any Allocable Market Shares
that were not so allocated shall be allocated (with Conversion Shares being
allocated first) among the Market Electing Holders (other than any Market
Electing Holder that has been allocated the number of Conversion
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Shares and, if applicable, other Market Shares that it desires to acquire, as
specified in its notice to the First Offer Stockholder) pro rata (based on the
number of shares of Class B Common Stock owned by each of them); and
(C) if all Allocable Market Shares are not allocated pursuant to paragraph
(A) and any prior application of paragraph (B), then any Allocable Market Shares
that were not so allocated shall be allocated by continuing to apply paragraph
(B) as required (with the Conversion Shares being allocated before any balance
of the Allocable Market Shares).
(b) (i) If the Market Offer is not accepted in full as provided in Section
4.3(a), the First Offer Stockholder shall have the right to sell the Market
Shares, other than any Allocable Market Shares, beginning on the day following
the last day to accept the Market Offer and (ii) if the purchase of the
Allocable Market Shares is not consummated within the period set forth in
Section 4.5(a) for any reason other than a breach by the First Offer Stockholder
of any of its covenants, representations or warranties that are a condition to
consummation of such purchase, the First Offer Stockholder shall have the right
to sell the Allocable Market Shares beginning on the day following the last day
of the period set forth in Section 4.5(a)(iii) (the applicable of the dates
determined in accordance with clauses (i) and (ii) of this sentence being the
"Free-to-Market Date"), in each case in a Market Transaction and after
conversion of any Conversion Shares into Class A Common Stock. Any Transfer
permitted by the preceding sentence shall be completed by (i) if the Market
Transaction was to be effected through a broker, specialist or market maker, the
fifth Trading Day after the Free-to-Market Date or (ii) if the Market Shares
were to be sold in a registered public offering, the later of (x) the fifth
Trading Day following the Free-to-Market Date or (y) the tenth Trading Day
following the applicable of (A) the date on which the registration statement
filed by the Corporation with respect to such shares becomes effective or (B)
the date on which such registration statement is withdrawn, provided, in the
case of this clause (y), that either (1) prior to or within five Trading Days
after the Free-to-Market Date, the First Offer Stockholder delivers a Demand
Notice pursuant to Section 7.1(a) with respect to the registration of the Market
Shares or Allocable Market Shares, as the case may be (after conversion of any
Conversion Shares) or (2) if another stockholder gives a Demand Notice within
such five Trading Day period, then the First Offer Stockholder timely submits a
written request in response to the corresponding Corporation Notice pursuant to
Section 7.1(a) with respect to the registration of the Market Shares or
Allocable Market Shares, as the case may be (after conversion of any Conversion
Shares). If the First Offer Stockholder has not completed the Transfer of shares
of Class A Common Stock permitted by this Section 4.3(b) during the applicable
period referred to above, the procedures set forth in this Section 4.3 shall be
repeated with respect to the Transfer of the balance of such shares.
4.4 Right of First Refusal.
(a) If a stockholder that is a party to this Agreement (the "First Refusal
Stockholder") or its Parent shall receive at any time a bona fide offer in
writing, which the First Refusal Stockholder or its Parent proposes to accept (a
"Bona Fide Offer"), from a Person that is not a member of the Affiliated Group
that includes such First Refusal Stockholder (the "Proposed Transferee"), to
acquire all or any portion of the shares of Common Stock owned by the First
Refusal Stockholder (the "First Refusal Shares"), other than in a Market
Transaction, or to effect an Indirect
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Transfer (in which case the "First Refusal Shares" shall be all the shares of
Common Stock owned by the First Refusal Stockholder), the First Refusal
Stockholder shall deliver to each other stockholder that is an Eligible
Stockholder (the "First Refusal Rightsholders") a notice containing a copy of
the Bona Fide Offer, the identity of the Proposed Transferee and its Parent and
an offer to sell the First Refusal Shares to the First Refusal Rightsholders (a
"First Refusal Offer") on the following terms and otherwise on the terms and
conditions contained in this Agreement: (i) if the Bona Fide Offer contemplates
a purchase of the First Refusal Shares by the Proposed Transferee for
consideration consisting solely of cash, then the First Refusal Stockholder's
offer shall be to sell the First Refusal Shares for cash in an amount equal to
the purchase price specified in, and otherwise on the terms and conditions
contained in, the Bona Fide Offer, and (ii) if the Bona Fide Offer contemplates
an acquisition of the First Refusal Shares by the Proposed Transferee for
consideration any portion of which is not cash or if the Bona Fide Offer
contemplates an Indirect Transfer, then (except as otherwise provided in Section
4.4(e)) the First Refusal Stockholder's offer shall be to sell the First Refusal
Shares for cash in an amount equal to (x) the amount of any cash consideration
plus the fair market value of the noncash consideration or (y) the fair market
value of the First Refusal Shares, as applicable (in each case as determined
pursuant to Section 4.4(c)) and otherwise on the terms and conditions contained
in the Bona Fide Offer. The First Refusal Offer shall specify the price at which
the First Refusal Shares are offered, as provided in the preceding sentence. The
First Refusal Rightsholders shall enter into an appropriate confidentiality
agreement reasonably requested by the First Refusal Stockholder with respect to
the Bona Fide Offer.
(i) If a First Refusal Rightsholder desires to accept all or any portion of
the First Refusal Offer, such First Refusal Rightsholder (a "First Refusal
Electing Holder") shall, within five Business Days of receipt of such First
Refusal Offer, notify the First Refusal Stockholder in writing of its intention
to acquire First Refusal Shares and the number of such shares it desires to
acquire, and deliver a copy of such notice to each other First Refusal
Rightsholder.
(ii) If the First Refusal Electing Holders have elected to acquire, in the
aggregate, all of the First Refusal Shares, then the First Refusal Electing
Holders shall have the right to acquire all the First Refusal Shares, allocated
among them as follows (or in such manner as the First Refusal Electing Holders
may agree), with any shares of Class B Common Stock included in the First
Refusal Shares being allocated first:
(A) the First Refusal Shares shall be allocated among the First Refusal
Electing Holders pro rata (based on the number of shares of Class B Common Stock
owned by each of them) until all of the First Refusal Shares have been allocated
or any First Refusal Electing Holder has been allocated the number of First
Refusal Shares that it desires to acquire, as specified in its notice to the
First Refusal Stockholder, as it may have been amended pursuant to clause (iii);
(B) if all First Refusal Shares are not allocated pursuant to paragraph (A)
or any prior application of this paragraph (B), any First Refusal Shares that
were not allocated pursuant to paragraph (A) or any prior application of this
paragraph (B) shall be allocated among the First Refusal Electing Holders (other
than any First Refusal Electing Holder that has been allocated the number of
First Refusal
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Shares that it desires to acquire, as specified in its notice to the First
Refusal Stockholder, as it may have been amended pursuant to clause (iii)) pro
rata (based on the number of shares of Class B Common Stock owned by each of
them); and
(C) if all First Refusal Shares are not allocated pursuant to paragraph (A)
and any prior application of paragraph (B), any First Refusal Shares that were
not allocated pursuant to paragraph (A) and any prior application of paragraph
(B) shall be allocated by continuing to apply paragraph (B) as required.
(iii) If the First Refusal Electing Holders have elected to acquire, in the
aggregate, less than all of the First Refusal Shares, then the First Refusal
Stockholder shall so notify the First Refusal Electing Holders and:
(A) each First Refusal Electing Holder shall have the right, by written
notice given to the First Refusal Stockholder (with a copy of such notice to
each other First Refusal Electing Holder) within two Business Days after its
receipt of the notice from the First Refusal Stockholder pursuant to this clause
(iii) to amend its notice to increase the number of First Refusal Shares that it
elects to purchase;
(B) if, after giving effect to any amendment to any First Refusal Electing
Holder's notice pursuant to this clause (iii), the First Refusal Electing
Holders have elected to acquire, in the aggregate, all of the First Refusal
Shares, then the First Refusal Electing Holders shall have the right to acquire
all the First Refusal Shares, allocated among them in accordance with clause
(ii); and
(C) if, after giving effect to all amendments to the First Refusal Electing
Holders' notices pursuant to this clause (iii), the First Refusal Electing
Holders have elected to acquire, in the aggregate, less than all of the First
Refusal Shares, then the First Refusal Stockholder's offer of the First Refusal
Shares shall be deemed rejected as of the last day for a First Refusal Electing
Holder to amend its notice pursuant to this clause (iii).
(b) If (i) the First Refusal Offer is rejected or deemed rejected as
provided in Section 4.4(a), or (ii) the purchase of the First Refusal Shares is
not consummated within the period set forth in Section 4.5(a) for any reason
other than a breach by the First Refusal Stockholder of any of its covenants,
representations or warranties that are a condition to consummation of such
purchase, then the First Refusal Stockholder shall have the right, beginning on
the applicable of (x) the day following the date that the First Refusal Offer is
rejected or deemed rejected or (y) the day following the last day of the period
set forth in Section 4.5(a)(iii) (the applicable of such dates being the
"Free-to-Sell Date"), to enter into a binding agreement to sell all of the First
Refusal Shares to, or to effect the Indirect Transfer with, the Proposed
Transferee, as contemplated by the Bona Fide Offer and on terms and conditions
no less favorable in the aggregate to the First Refusal Stockholder (and, in the
case of an Indirect Transfer, its Parent) than those set forth in the Bona Fide
Offer, and to sell all of the First Refusal Shares to, or to effect the Indirect
Transfer with, the Proposed Transferee, as applicable, pursuant to such
agreement. Any Transfer or Indirect Transfer of First Refusal Shares permitted
by the preceding sentence shall be consummated within ninety days after
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the Free-to Sell Date or such longer period as may have been specified in the
Bona Fide Offer (subject to extension for a maximum of ninety additional days to
the extent required to obtain all required Governmental and Private Approvals).
The First Refusal Stockholder shall, as promptly as practicable and prior to the
closing of such Transfer or Indirect Transfer, provide to the First Refusal
Rightsholders a copy of the binding agreement for such transaction so as to
permit the First Refusal Rightsholders to confirm for themselves that the terms
and conditions of such sale or Indirect Transfer are not less favorable in the
aggregate to the First Refusal Stockholder (and, in the case of an Indirect
Transfer, its Parent) than those set forth in the Bona Fide Offer. If the
Transfer or Indirect Transfer, as applicable, of the First Refusal Shares
permitted by this Section 4.4(b) has not been consummated during the applicable
period referred to above, the procedure set forth in this Section 4.4 shall be
repeated with respect to any subsequent proposed Transfer or Indirect Transfer
of Common Stock by the First Refusal Stockholder.
(c) Before delivering a First Refusal Offer pursuant to Section 4.4(a) in
response to a Bona Fide Offer that contemplates (i) a sale of the First Refusal
Shares in conjunction with other assets, (ii) an acquisition of the First
Refusal Shares by the Proposed Transferee for consideration any portion of which
is not cash or (iii) an Indirect Transfer, the First Refusal Stockholder and the
Eligible Stockholders shall cause (A) if the Bona Fide Offer contemplates a sale
of the First Refusal Shares in conjunction with other assets, the total
consideration specified in the Bona Fide Offer to be allocated between the First
Refusal Shares and such other assets, (B) if the Bona Fide Offer contemplates an
acquisition of the First Refusal Shares by the Proposed Transferee for
consideration any portion of which is not cash or if the Bona Fide Offer
contemplates an Indirect Transfer, the fair market value of the noncash
consideration or of the First Refusal Shares, as applicable, to be determined,
in each case pursuant to this Section 4.4(c):
(i) The First Refusal Stockholder shall deliver to each Eligible
Stockholder a notice stating that the First Refusal Stockholder intends to
deliver a First Refusal Offer to which this Section 4.4 applies and identifying
an appraiser (the "First Appraiser") who has been retained by the First Refusal
Stockholder to allocate the total consideration specified in the Bona Fide Offer
or to conduct an appraisal of the noncash consideration or of the First Refusal
Shares, as applicable, pursuant to this Section 4.4(c). Within ten Business Days
after its receipt of the First Refusal Stockholder's notice pursuant to the
preceding sentence, the Eligible Stockholder that, together with the other
members of its Affiliated Group, owns the greatest number of shares of Class B
Common Stock, shall send a notice to the First Refusal Stockholder and the other
Eligible Stockholders identifying a second appraiser (the "Second Appraiser")
who shall be retained by the First Refusal Stockholder to make such allocation
or conduct such appraisal, as applicable, pursuant to this Section 4.4(c);
provided that if such Eligible Stockholder fails to so designate the Second
Appraiser, then the First Appraiser shall make such allocation or conduct such
appraisal on its own.
(ii) The First Appraiser and the Second Appraiser shall submit their
independent determinations of the amount of consideration allocable to the First
Refusal Shares or the fair market value of the noncash consideration or of the
First Refusal Shares, as applicable, within thirty days after the date on which
the Second Appraiser is retained. If the respective determinations of the First
Appraiser and the Second Appraiser vary by less
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than ten percent of the higher determination, the amount of consideration
allocable to the First Refusal Shares or the fair market value of the noncash
consideration or of the First Refusal Shares, as applicable, for purposes of
Section 4.4(a), shall be the average of the two determinations.
(iii) If the respective determinations of the First Appraiser and the
Second Appraiser vary by ten percent or more of the higher determination, the
two appraisers shall promptly designate a third appraiser (the "Third
Appraiser"), who shall be retained by the First Refusal Stockholder to make an
allocation or conduct an appraisal pursuant to this Section 4.4(c). The First
Appraiser and the Second Appraiser shall be instructed not to, and no party to
this Agreement or any member of its Affiliated Group shall, provide any
information to the Third Appraiser as to the determinations of the First
Appraiser and the Second Appraiser or otherwise influence the Third Appraiser's
determination in any way. The Third Appraiser shall submit its determination of
the amount of consideration allocable to the First Refusal Shares or the fair
market value of the noncash consideration or of the First Refusal Shares, as
applicable, within thirty days after the date on which the Third Appraiser is
retained. If a Third Appraiser is retained, the amount of consideration
allocable to the First Refusal Shares or the fair market value of the noncash
consideration or of the First Refusal Shares, as applicable, for purposes of
Section 4.4 shall equal the average of the two closest of the three
determinations, except that, if the difference between the highest and middle
determinations is no more than 105% and no less than 95% of the difference
between the middle and lowest determinations, then the amount of consideration
allocable to the First Refusal Shares or the fair market value of the noncash
consideration or of the First Refusal Shares, as applicable, for purposes of
Section 4.4(a) shall equal the middle determination.
(iv) Any appraiser retained pursuant to this Section 4.4(c) shall be
nationally recognized as being qualified and experienced in the appraisal of
assets comparable to the First Refusal Shares and, if applicable, any other
assets proposed to be sold pursuant to the Bona Fide Offer and shall not be an
Affiliate of any party to this Agreement. All fees and expenses of any appraiser
retained pursuant to this Section 4.4(c) shall be paid by the First Refusal
Stockholder, provided that if the First Refusal Offer is accepted in full, the
First Refusal Electing Holders (pro rata based on the number of First Refusal
Shares each is acquiring) shall, at the closing of the purchase of the First
Refusal Shares by the First Refusal Electing Holders, pay an additional amount
to the First Refusal Stockholder equal in the aggregate to one-half the fees and
expenses of such appraisers.
(v) In determining the fair market value of the noncash consideration or of
the First Refusal Shares, if applicable, each appraiser retained pursuant to
this Section 4.4(c) shall:
(A) assume that the fair market value of the applicable asset is the price
at which the asset would change hands between a willing buyer and a willing
seller, neither being under any compulsion to buy or sell and each having
reasonable knowledge of all relevant facts;
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(B) assume that the applicable asset would be sold for cash; and
(C) use valuation techniques then prevailing in the relevant industry.
(d) If the First Refusal Shares do not include at least the Minimum Number
of shares of Class B Common Stock, or if the Proposed Transferee refuses to
become a party to this Agreement as required by this Section 4.4(d), then prior
to transferring the First Refusal Shares to, or effecting the Indirect Transfer
with, as applicable, a Person that is not an Eligible Stockholder, the First
Refusal Stockholder shall convert all shares of Class B Common Stock included in
the First Refusal Shares to Class A Common Stock. The conversion of shares of
Class B Common Stock to Class A Common Stock pursuant to the foregoing sentence
shall not be subject to the provisions of Section 4.1. If the First Refusal
Shares include at least the Minimum Number of shares of Class B Common Stock,
then the First Refusal Stockholder shall have the right to Transfer such shares
of Class B Common Stock to a Proposed Transferee that is not an Eligible
Stockholder or permit the Indirect Transfer, as applicable, without converting
such shares to Class A Common Stock so long as (i) in the case of a Transfer of
the First Refusal Shares, the Proposed Transferee assumes the obligations of the
First Refusal Stockholder under this Agreement with respect to such shares and
becomes a party to this Agreement in accordance with Section 4.6, and (ii) in
the case of an Indirect Transfer, the Proposed Transferee, upon taking control
of the First Refusal Stockholder, causes the First Refusal Stockholder to
confirm in writing in accordance with Section 4.6 the continuing validity and
effectiveness of its obligations under this Agreement, and (iii) in each case,
the Parent of such Stockholder becomes a party to this Agreement as a
Participant. If the Proposed Transferee receives only shares of Class A Common
Stock, then neither it nor its Parent shall be required to become a party to
this Agreement. In the case of an Indirect Transfer after giving effect to which
the First Refusal Stockholder owns only shares of Class A Common Stock, the
First Refusal Stockholder may elect to continue to be a party to this Agreement
for so long as it owns shares of Class A Common Stock, but shall not be
obligated to, by delivering to the Corporation and the Stockholders written
confirmation thereof in accordance with Section 4.6, in which event such
stockholder shall continue to be subject to the restrictions of this Section 4
and Section 6 and entitled to the benefits of Section 7 in accordance with the
terms of such Sections.
(e) Notwithstanding anything to the contrary in Section 4.4(a), if the Bona
Fide Offer contemplates a transaction that is tax free to the First Refusal
Stockholder or its Parent, as applicable, in whole or to the extent of noncash
consideration received in such transaction, then the First Refusal Stockholder
may require as a condition of its First Refusal Offer that, subject to the
conditions described below, the First Refusal Electing Holder offer it the
option of either Transferring the First Refusal Shares for cash in a taxable
transaction as contemplated by Section 4.4(a) (an "All Cash Transaction") or
effecting a Tax Free Alternative as provided in this Section 4.4(e).
(i) A "Tax Free Alternative" for this purpose means a transaction (x) in
which all or a portion of the consideration to be received by the First Refusal
Stockholder or its Parent, as applicable, is noncash, (y) that is tax free to
the recipient in whole or to the extent of the noncash consideration received
and, in any event, will not result in any tax liability or loss of tax benefits
to the First Refusal Stockholder or its Parent, as
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applicable, that is more than a de minimis amount greater than that which would
be incurred or lost in the transaction contemplated by the Bona Fide Offer and
(z) in which the noncash consideration is Publicly Traded Stock (as defined in
clause (v) below), the value of which, when added to the amount of any cash
consideration to be paid in the transaction, is at least equal to the amount of
cash that would have been paid for the First Refusal Shares in the All Cash
Transaction. A transaction in which the First Refusal Electing Holder or its
Parent would be required to acquire any assets or assume any liabilities that it
would not have been required to acquire or assume in the All Cash Transaction
shall not constitute a Tax Free Alternative, except that a transaction in which
the First Refusal Electing Holder, its Parent or another member of its
Affiliated Group would acquire the First Refusal Stockholder (or another member
of its Affiliated Group through which its Parent owns its interest in such First
Refusal Stockholder) (the "Acquired Stockholder") may constitute a Tax Free
Alternative notwithstanding the foregoing if the Acquired Stockholder has no
material assets or liabilities other than its interest in the First Refusal
Shares and its obligations under or pursuant to this Agreement and the stock of
the Acquired Stockholder is not subject to any Liens other than pursuant to this
Agreement.
(ii) A First Refusal Stockholder that desires to exercise its right to
require the option for a Tax Free Alternative shall, in its First Refusal Offer,
propose a structure (the "Proposed Structure") for the transaction that it
reasonably believes satisfies the requirements of a Tax Free Alternative as
specified in clause (i) above and is otherwise consistent with the requirements
of this Section 4.4 and Section 4.5.
(iii) In its response to the First Refusal Offer, a First Refusal Electing
Holder shall either offer the First Refusal Stockholder the option of engaging
in the transaction described in the First Refusal Offer in lieu of cash, or the
option of engaging in an alternative transaction proposed by the First Refusal
Electing Holder in lieu of cash, which transaction meets the requirements
specified above for a Tax Free Alternative (as evidenced in the case of clause
(y) of the definition of Tax Free Alternative, by an opinion of counsel for the
First Refusal Electing Holder addressed to and reasonably acceptable to the
First Refusal Stockholder) and is otherwise consistent with the requirements of
this Section 4.4 and Section 4.5 (an "Alternative Structure").
(iv) Within five Business Days of receipt by the First Refusal Stockholder
of notice from a First Refusal Electing Holder of its acceptance of the First
Refusal Offer, the First Refusal Stockholder shall notify the First Refusal
Electing Holder of whether it desires an All Cash Transaction or the Tax Free
Alternative. If the First Refusal Stockholder elects a Tax Free Alternative, the
Transfer or Indirect Transfer of the First Refusal Shares shall be effected in
accordance with the Proposed Structure; provided, however, that if an
Alternative Structure was proposed which does not result in the creation of
restrictions or limitations applicable to the First Refusal Stockholder or its
Parent, as applicable, which are, in the good faith, reasonable judgment of the
First Refusal Stockholder, more onerous to it than those which would result in
the Proposed Structure, then the transaction will be consummated in accordance
with the Alternative Structure.
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(v) The requirement to offer the First Refusal Stockholder a Tax Free
Alternative shall not apply (x) if there is more than one First Refusal Electing
Holder, unless all such First Refusal Electing Holders are members of the same
Affiliated Group, or (y) if none of the First Refusal Electing Holder, its
Parent, and the Subsidiaries through which such Parent owns such First Refusal
Electing Holder have any outstanding class or series of capital stock that is
Publicly Traded Stock. "Publicly Traded Stock", for purposes of this Section
4.4(e) means capital stock of an issuer, or depositary receipts (such as ADRs)
evidencing an interest in capital stock of an issuer, that is publicly traded on
a national securities exchange or national securities association (domestic or
foreign) that has at least the same general degree of liquidity as (A) if the
First Refusal Stockholder or its Parent, as applicable, would have received
publicly traded equity securities in the transaction contemplated by the Bona
Fide Offer, such securities or (B) if the Bona Fide Offer did not contemplate
the receipt of publicly traded equity securities, the Class A Common Stock (in
each case, determined by reference to the ability of the First Refusal
Stockholder or its Parent to dispose of such securities, including the trading
volume of such securities and the percentage ownership by the First Refusal
Stockholder or its Parent of the issuer of such securities). If a Tax Free
Alternative is effected, the First Refusal Electing Holder shall (or shall cause
the issuer of such Publicly Traded Stock to) provide the First Refusal
Stockholder or its Parent, as applicable, with registration rights related to
such Publicly Traded Stock equivalent to those provided with respect to the
Class A Common Stock pursuant to this Agreement. The value of any Publicly
Traded Stock for purposes of clause (z) of the definition of Tax Free
Alternative shall equal on a per share (or per ADR) basis the average of (1) the
average for the five consecutive Trading Days ending on the Trading Day
immediately preceding the closing of the transaction in accordance with Section
4.5 of, and (2) the average for the five consecutive Trading Days ending on the
Trading Day immediately preceding the date of the First Refusal Offer of, the
last reported sale prices for a share of Publicly Traded Stock (or ADR) on each
such Trading Day (or if no such sale is reported for any Trading Day, the
average of the highest bid and lowest asked prices for a share (or ADR) on such
Trading Day) on the principal national securities exchange or national
securities association on which the Publicly Traded Stock is listed or admitted
for trading.
4.5 Terms and Conditions of Sales Pursuant to Sections 4.3 and 4.4.
--------------------------------------------------------------
(a) Any purchase and sale of Common Stock to another Stockholder pursuant
to Section 4.3 or 4.4 shall be subject to the following terms and conditions (in
addition to, in the case of a purchase and sale pursuant to Section 4.4, the
terms and conditions of the Bona Fide Offer):
(i) The First Offer Stockholder and First Refusal Stockholder (each, a
"Transferring Stockholder") shall represent and warrant that the Market Electing
Holders or First Refusal Electing Holders (each, a "Purchasing Stockholder"), as
the case may be, will receive good and valid title to the Allocable Market
Shares or First Refusal Shares, as applicable (each, the "Offered Shares"), free
and clear of all Liens, of any nature whatsoever except for Governmental and
Private Approvals required for Transfers of shares of Common Stock generally and
except in the case of First Refusal Shares for any Liens that the Bona Fide
Offer contemplated that the First Refusal Shares would be acquired subject to.
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(ii) The closing of the purchase and sale shall be subject to the
satisfaction of the following conditions:
(A) all applicable waiting periods under the HSR Act shall have expired or
been terminated;
(B) all Governmental and Private Approvals expressly required with respect
to the transactions to be consummated at such closing shall have been obtained,
to the extent the failure to obtain such approvals would prevent the
Transferring Stockholder from performing any of its material obligations under
the transaction documents or would result in any material adverse change in, or
material adverse effect on, the Corporation;
(C) there shall be no preliminary or permanent injunction or other order by
any court of competent jurisdiction restricting, preventing or prohibiting the
consummation of the transactions to be consummated at such closing; and
(D) the representation and warranty of the Transferring Stockholder
contemplated by clause (i) of this sentence shall be true and correct at the
closing of such sale with the same force and effect as if then made.
(iii) Unless otherwise agreed by the applicable parties, the closing of any
direct or indirect purchase and sale of Common Stock pursuant to Section 4.3 or
4.4 shall take place at the principal executive offices of the Company at 10:00
a.m. local time on a Business Day selected by the Stockholders that will be
purchasers at such closing, provided that such closing shall occur as promptly
as practicable, and in any event (x) in the case of a Market Offer with respect
to a proposed Market Transaction to be effected through a broker, specialist or
market maker, within two Business Days after the last day to accept such Offer
(subject to extension as provided in the following sentence), (y) in the case of
a First Refusal Offer with respect to a Bona Fide Offer that specifies a period
of time within which closing of the transaction contemplated by such Bona Fide
Offer shall occur, within such specified period following the acceptance in full
of such Offer (provided that if notification under the HSR Act would be required
and the period specified in such Bona Fide Offer is shorter than the period
determined in accordance with clause (z) below, then clause (z) shall apply to
such Offer in lieu of this clause (y)) and (z) in the case of any other Offer,
within twenty Business Days after acceptance in full of such Offer, subject in
the case of this clause (z) to extension for a maximum of ninety additional days
to the extent required to obtain all required Governmental Approvals.
Notwithstanding the foregoing, in the case of a Market Offer with respect to a
proposed Market Transaction to be effected through a broker, specialist or
market maker, if any of the Market Shares are to be issued upon conversion of
Conversion Shares and the acquisition of such Conversion Shares by the
Purchasing Stockholder would require notification under the HSR Act, then the
date by which the closing of such purchase shall occur shall be subject to
extension for up to a maximum of ninety additional days to the extent required
to satisfy the closing condition set forth in Section 4.5(a)(ii)(A); provided,
however, that in the event of any such extension, the purchase price per share
payable by the
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Purchasing Stockholder shall be equal to the average of the Closing Prices per
share of the Class A Common Stock for the five consecutive Trading Days ending
on the Trading Day immediately preceding the closing date; provided, further,
however, that if the purchase price determined in accordance with the preceding
proviso clause is less than the Market Price contemplated by the Market Offer,
then the Transferring Stockholder shall have the right to withdraw its offer and
terminate the sale of the Offered Shares unless the Purchasing Stockholder
agrees to pay the higher Market Price per share.
(iv) Unless otherwise agreed by the applicable parties or provided in
Section 4.4(e), the purchase price shall be payable by wire transfer of same day
funds or by certified or cashier's check, as specified by the Transferring
Stockholder. Except as otherwise provided in Section 4.4(e), the Transferring
Stockholder shall deliver to each Purchasing Stockholder a certificate or
certificates evidencing the Offered Shares being purchased by it, duly endorsed
for transfer to such Purchasing Stockholder against payment of such purchase
price. The Purchasing Stockholders shall be severally, but not jointly,
responsible and liable for the purchase of their respective portions of the
Offered Shares; provided, however, that the Transferring Stockholder shall not
be obligated to consummate the sale of any Offered Shares unless the sale of all
Offered Shares is then being consummated.
(b) In furtherance of the rights set forth in Sections 4.3 and 4.4, the
Corporation and each other Eligible Stockholder agrees that, on reasonable
notice following the delivery of an Offer, at reasonable times and without
interfering with the business or operations of the Corporation, it will use
commercially reasonable efforts to assist the Transferring Stockholder and its
Parent and, if the Transfer or Indirect Transfer is to or with another
Stockholder, the Purchasing Stockholder and its Parent, if applicable, in
obtaining all necessary Governmental and Private Approvals to any Transfer or
Indirect Transfer of the Offered Shares, including making qualified personnel
available for attending hearings and meetings respecting any consents, approvals
and authorizations required for such Transfer and, at the request of the
Transferring Stockholder, making all filings with, and giving all notices to,
third parties and Governmental Authorities that may be necessary or reasonably
required to be made or given by the Corporation or such Stockholders in order to
effect the contemplated Transfers. The Transferring Stockholder shall reimburse
the Corporation and such other Eligible Stockholders for any out-of-pocket
expenses incurred by them in connection with the foregoing actions; provided,
however, that in the case of a Transfer to a Purchasing Stockholder pursuant to
a Market Offer, such Purchasing Stockholder shall be responsible for such
reimbursement and, in the case of a Transfer to a Purchasing Stockholder
pursuant to a First Refusal Offer, unless the Bona Fide Offer provides
otherwise, the Transferring Stockholder and the Purchasing Stockholder shall
each be responsible for one-half such expenses. Subject to the other provisions
of this Section 4, no Stockholder shall take any action to delay, impair or
impede the receipt of any required consents, approvals or authorizations.
"Commercially reasonable efforts" as used in this Section 4 shall not require
any party to undertake extraordinary or unreasonable measures to obtain any
consents, approvals or other authorizations, including requiring such party to
make any material expenditures (other than normal filing fees or the like) or to
accept any material changes in the terms of the contract, license or other
instrument for which a consent, approval or authorization is sought.
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4.6 Transferee Stockholders. Any transferee of a Transferring
Stockholder required to become a party to this Agreement pursuant to Section 4.2
or 4.4(d) shall execute and deliver to the Corporation (which shall promptly
send notice thereof to the stockholders that are parties to this Agreement) an
agreement substantially in the form of Exhibit A to be bound as a party to this
Agreement. No further action by the Corporation, such transferee or the parties
hereto shall be required for such person to become a party to this Agreement.
Following any Indirect Transfer permitted by this Agreement, the stockholder
with respect to which such Indirect Transfer has occurred shall confirm to the
Corporation and the Stockholders in writing the continuing validity and
effectiveness of its obligations under this Agreement if required by Section
4.4(d) or if such stockholder has elected to continue to be so bound as
permitted by such Section.
4.7 Qualifying Transfer. In the event that pursuant to a
Transfer of Class B Common Stock made in accordance with the provisions of this
Agreement (a "Qualifying Transfer") any transferee that was not a Stockholder or
member of a Stockholder Group immediately prior to such Transfer acquires 12.5%
or more of the outstanding shares of Class B Common Stock (a "Director Eligible
Transferee"), such Director Eligible Transferee shall be entitled, upon the
consummation of the acquisition of such shares of Class B Common Stock, to
designate one representative as a director on the Board for each 12.5% of the
outstanding shares of Class B Common Stock acquired by such Director Eligible
Transferee pursuant to such Qualifying Transfer (with more than 6.25% rounded up
to the nearest 12.5% if (but only if) the resulting number of directors that the
Director Eligible Transferee would be entitled to designate does not exceed the
number of directors that the Transferring Stockholder's Stockholder Group is
required to cause to resign in accordance with Section 2.2). In the event that
pursuant to a Qualifying Transfer, a Stockholder Group acquires a sufficient
number of additional shares of Class B Common Stock that after giving effect to
such acquisition such Stockholder Group would be entitled pursuant to Section
2.1 (before giving effect to the reference therein to this Section 4.7) to
designate a greater number of directors than the number of directors currently
serving on the Board that were designated by such Stockholder Group (such
Stockholder Group's "Current Designees"), then upon the consummation of the
acquisition of such shares of Class B Common Stock, such Stockholder Group shall
be entitled to designate such number of additional Persons (each an "Additional
Director") to serve as directors that when added to its Current Designees will
equal one director for each 12.5% of the outstanding shares of Class B Common
Stock owned by such Stockholder Group, with more than 6.25% being rounded up and
6.25% or less being rounded down, except that no such rounding up shall occur if
the resulting number of Additional Directors that such Stockholder Group would
be entitled to designate would exceed the number of directors that the
Transferring Stockholder's Stockholder Group is required to cause to resign in
accordance with Section 2.2.
4.8 Tag-Along Right.
(a) If a First Refusal Stockholder proposes to Transfer to a Proposed
Transferee, in any one transaction or series of related transactions, First
Refusal Shares that include a Significant Interest, then the First Refusal
Stockholder shall make provision whereby each First Refusal Rightsholder that
elects to participate in such sale as provided below (each Rightsholder making
such election, a "Participating Stockholder") will have the right, if the First
Refusal Offer is rejected or deemed rejected as provided in Section 4.4(a) and
the sale by the First Refusal Stockholder to the Proposed Transferee is to
occur, to sell to the Proposed Transferee, as a condition
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to such sale, at the same price per share and on the same terms and conditions
provided for in the Bona Fide Offer for such sale by the First Refusal
Stockholder, up to the number of shares of Class B Common Stock that is equal to
the product of (i) the number of shares of Class B Common Stock subject to the
Bona Fide Offer, multiplied by (ii) a fraction, the numerator of which is the
total number of shares of Class B Common Stock owned by such Participating
Stockholder at the time of the Bona Fide Offer, and the denominator of which is
the sum of the total number of shares of Class B Common Stock owned by all
Participating Stockholders and the First Refusal Stockholder at the time of the
Bona Fide Offer. If any First Refusal Rightsholder wishes to exercise its right
pursuant to the preceding sentence, it shall deliver to the First Refusal
Stockholder a written election to exercise such right, which election shall
state the number of shares of Class B Common Stock such First Refusal
Rightsholder desires to sell and shall be delivered to the First Refusal
Stockholder within five Business Days of such First Refusal Rightsholder's
receipt of the First Refusal Offer. The Participating Stockholders may
participate in the sale of Common Stock to the Proposed Transferee pursuant to
this Section 4.8 without first complying with Section 4.4. The number of shares
of Class B Common Stock that the First Refusal Stockholder may sell to the
Proposed Transferee shall be reduced by the number of shares being sold by the
Participating Stockholders pursuant to this Section 4.8(a).
(b) If any First Refusal Rightsholder exercises its rights pursuant to
Section 4.8(a) in connection with a Qualifying Transfer, the Director Eligible
Transferee in such Qualifying Transfer shall be entitled to designate the same
number of directors that it would have been entitled to designate had it
purchased the shares of Class B Common Stock solely from the Transferring
Stockholder and, if the aggregate number of directors the Transferring
Stockholder and the Participating Stockholders are required to cause to resign
pursuant to Section 2.2 hereof is less than such number, then the Transferring
Stockholder or a Participating Stockholder (determined as provided below) shall
be required to cause an additional designee to resign in order to permit the
Director Eligible Transferee to designate the number of directors which it is
entitled to designate as a result of such Qualifying Transfer. If the number of
directors that the Transferring Stockholder or a Participating Stockholder would
be entitled to designate following the Qualifying Transfer includes a director
as a result of rounding up to the nearest 12.5% in accordance with Section 2.1
(without regard to the reference therein to this Section 4.8) (a "Rounding
Stockholder"), then the Rounding Stockholder whose percentage of the Class B
Common Stock after giving effect to the Qualifying Transfer when divided by 12.5
yields a number that includes a decimal that is closer to .5 than any other
Rounding Stockholder's percentage of the Class B Common Stock shall be the
Stockholder required to cause an additional designee to resign in accordance
with the preceding sentence. If more than one Rounding Stockholder would be
required to cause an additional designee to resign in accordance with the
preceding sentence and one of such Rounding Stockholders is the Transferring
Stockholder, then the Transferring Stockholder shall be the Stockholder required
to cause an additional designee to resign in accordance with this Section
4.8(b).
SECTION 5 STOCKHOLDER VOTE
Except as otherwise specifically provided herein, for so long
as there continues to be at least two Stockholder Groups the members of each of
which own in the aggregate thirty percent or more of the outstanding Class B
Common Stock (each such Stockholder Group, a "Shared Control Group"), the
members of each such Shared Control Group shall vote the shares of Common Stock
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owned by them with respect to any proposal submitted to a vote of stockholders
of the Corporation only as shall be mutually agreed upon by such members and the
members of each other Shared Control Group. In the absence of any such mutual
agreement, the members of each Shared Control Group shall vote their shares of
Common Stock against such proposal. The provisions of this Section 5 shall
terminate at such time as there first is either no Stockholder Group the members
of which own in the aggregate at least thirty percent of the outstanding Class B
Common Stock or only one such Stockholder Group.
SECTION 6 LEGEND
Each certificate evidencing any of the shares of Common Stock
owned by a stockholder that is a party to this Agreement shall bear a legend
substantially as follows:
"The shares represented by this certificate are
subject to restrictions on transfer and may not be
sold, exchanged, assigned, transferred or otherwise
disposed of except in accordance with and subject to
all the terms and conditions of a certain
Stockholders' Agreement, dated as of _______, 1999, a
copy of which the Corporation will furnish to the
holder of this certificate upon request and without
charge."
Upon surrender to the Corporation of certificates evidencing
shares of Class A Common Stock transferred in compliance with this Agreement,
other than to a stockholder who is a party to this Agreement, the Corporation
shall reissue such certificates to the owner thereof without such legend. In the
event of an Indirect Transfer effected in compliance with this Agreement after
giving effect to which the affected stockholder and the members of its
Affiliated Group own only shares of Class A Common Stock and have not elected to
continue to be bound by this Agreement as contemplated by Section 4.4(d), then
upon surrender to the Corporation of the certificates evidencing such shares of
Class A Common Stock, the Corporation shall reissue such certificates to the
affected stockholder without such legend. Upon termination of this Agreement and
surrender to the Corporation of certificates evidencing shares of Class A Common
Stock or Class B Common Stock, the Corporation shall reissue such certificates
to the owner thereof without such legend.
SECTION 7 REGISTRATION
7.1 Demand Registrations.
(a) Requests for Registration. At any time after the date which is six
months after the date of this Agreement, any stockholder of the Corporation
which is a party to this Agreement may request that the Corporation effect the
registration under the Securities Act for sale in the manner specified in such
request of all or part of its shares of Class A Common Stock (including shares
of Class A Common Stock issuable upon conversion of shares of Class B Common
Stock), provided that such stockholder has given a Market Offer with respect to
such shares pursuant to Section 4.3. Such request shall be made by furnishing
written notice thereof (a "Demand Notice") to the Corporation setting forth the
number of shares of Class A Common Stock requested to be registered and such
stockholder's preferred method of distribution. Within ten days after receipt of
any Demand Notice, the Corporation shall give written notice of such Demand
Notice to all other
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stockholders who are parties to this Agreement. Following receipt of notice from
the Corporation of a Demand Notice (the "Corporation Notice"), each such other
stockholder may give the Corporation a written request to include any or all of
such stockholder's Class A Common Stock (including shares of Class A Common
Stock issuable upon conversion of shares of Class B Common Stock) in the
registration described in the Corporation Notice, provided that such written
request is given within ten days after the date on which the Corporation Notice
is given (with such request stating (i) the number of shares of Class A Common
Stock to be so included, (ii) such other stockholder's preferred method of
distribution of such shares and (iii) any other information that the Corporation
Notice reasonably requests be included in such notice from such stockholder),
and provided, further, that such stockholder has given a Market Offer with
respect to such shares pursuant to Section 4.3. All registrations requested
pursuant to this Section 7.1 are referred to herein as "Demand Registrations"
and all stockholders requesting registration of their shares pursuant to this
Section 7.1(a) are referred to herein as "Requesting Holders". The Corporation
shall not be required to effect a Demand Registration unless the aggregate
number of shares of Class A Common Stock demanded to be so registered and as to
which the Market Offer has not been accepted in accordance with Section 4.3(a)
is at least one percent of the number of shares of Class A Common Stock then
outstanding (the "Minimum Condition"). If the Minimum Condition is met, then,
subject to Sections 7.1(b), 7.1(c) and 7.1(f) below, the Corporation shall, as
soon as practicable following the last day that notice of acceptance of the
applicable Market Offer may be given in accordance with Section 4.3(a)(i), file
with the Commission and use all commercially reasonable efforts to cause to
become effective as promptly as practicable, a registration statement on a form
applicable to the sale of securities to the general public which shall cover the
shares of Class A Common Stock requested to be registered pursuant to such
Demand Notices. The Corporation shall not be required to effect any Demand
Registration for a stockholder after such time as such stockholder and the other
members of its Affiliated Group are able to sell all shares of Class A Common
Stock (including shares of Class A Common Stock issuable upon conversion of
shares of Class B Common Stock) owned by them without restriction (including any
volume limitation) under the Securities Act.
(b) Number of Demand Registrations. Once a Demand Registration has been
effected, the Corporation shall not be obligated to register Class A Common
Stock pursuant to another Demand Registration prior to the expiration of twelve
months from the date on which the previous Demand Registration was declared
effective; provided, however, that a registration will not count as a Demand
Registration unless it has become effective, and such effectiveness has been
maintained under the Securities Act (and not subject to any stop order,
injunction or other order or requirement of the Commission or other Governmental
Authority for any reason) for the period specified in Section 7.3(a). Each
Requesting Holder may, before any registration statement becomes effective,
withdraw its shares of Class A Common Stock from inclusion therein if the terms
of the proposed distribution are not satisfactory to such Requesting Holder. If
after giving effect to such withdrawal or withdrawals of shares from a Demand
Registration the Minimum Condition would no longer be satisfied, then such
registration statement shall be withdrawn. A registration that is withdrawn
prior to effectiveness at the request of the Requesting Holders that demanded
such Demand Registration will not count as a Demand Registration.
(c) Restrictions on Registrations. The Corporation may postpone for up to
90 days after its receipt of a Demand Notice the filing of a registration
statement for a Demand Registration if the Corporation reasonably believes that
such Demand Registration would have a
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material adverse effect on any proposal or plan by the Corporation or any of its
Subsidiaries to engage in any financing, acquisition of assets (other than in
the ordinary course of business) or any merger, consolidation, tender offer or
other significant transaction and notifies the Requesting Holders in writing of
such postponement; provided that the Corporation shall have the right to so
postpone such filing or effectiveness only one time during any period of twelve
consecutive months.
(d) Underwriting.
(i) Subject to Section 7.1(e), the distribution of the Class A Common Stock
covered by the Demand Registration shall be effected by means of a firm
commitment underwriting, and the right of any Requesting Holder to registration
pursuant to this Section 7 shall be conditioned upon such Requesting Holder's
participation in such underwriting and the inclusion of such Requesting Holder's
Class A Common Stock in the underwriting (unless otherwise mutually agreed by a
majority in interest of the other Requesting Holders) to the extent provided
herein. The Corporation (together with all Requesting Holders proposing to
distribute their Class A Common Stock through such underwriting) shall enter
into an underwriting agreement in customary form with a managing underwriter of
nationally recognized standing selected for such underwriting by the Corporation
with the approval of the Requesting Holder that has included the largest number
of shares in the Demand Registration, such approval not to be withheld
unreasonably. No Requesting Holder may participate in any Demand Registration
unless such Requesting Holder (A) agrees to sell its Class A Common Stock on the
basis provided in such underwriting agreement and (B) completes and executes all
questionnaires, powers of attorney, indemnities and other documents required
under the terms of such underwriting agreement.
(ii) Notwithstanding any other provision of this Section 7, if the managing
underwriter advises the Corporation and the Requesting Holders in writing that
marketing factors require a limitation of the number of shares to be
underwritten, then the managing underwriter may exclude shares requested to be
included in such Demand Registration. The number of shares of Class A Common
Stock that may be included in the Demand Registration and underwriting shall be
allocated among the Requesting Holders in accordance with the provisions of
Section 7.1(f). No Class A Common Stock excluded from the underwriting by reason
of the managing underwriter's marketing limitation shall be included in such
Demand Registration.
(iii) If any Requesting Holder participating in a Demand Registration
disapproves of the terms of the underwriting, such person may elect to withdraw
therefrom by written notice to the Corporation, the managing underwriter and the
other Requesting Holders. If by such withdrawal a greater number of shares of
Class A Common Stock held by other Requesting Holders may be included in such
Demand Registration (up to the maximum of any limitation imposed by the managing
underwriter), then the Corporation shall offer to all Requesting Holders
participating in the Demand Registration the right to include additional shares
of Class A Common Stock, which additional shares shall be allocated among the
Eligible Holders who have requested registration in accordance with the
provisions of Section 7.1(f).
(e) Shelf Registration. If at the time of a Demand Notice, the Corporation
is eligible to file a registration statement on Form S-3 (or any equivalent
successor form), then Requesting Holders who hold at least 51% of the shares of
Class A Common Stock which are to be
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included in a Demand Registration may request that the Demand Registration be
effected pursuant to a shelf registration under Rule 415 of the Securities Act
(or successor rule or regulation); provided, however, that (i) if the
Corporation shall reasonably determine, after consultation with an independent
investment banking firm of nationally recognized standing, that such method of
distribution would adversely affect the public market for the Class A Common
Stock, then the Corporation shall not be obligated to effect the Demand
Registration pursuant to such method of distribution, (ii) during the term of
any such shelf registration, the Corporation may require from time to time that
the Requesting Holders refrain from selling pursuant to such registration
statement under the circumstances, in the manner and for the time period
described in Section 7.1(c), and (iii) the Corporation shall not be required to
keep such shelf registration statement effective for a period greater than
twelve months.
(f) Allocation Among Eligible Holders. If the managing underwriter imposes
a limit on the number of shares of Class A Common Stock to be included in the
Demand Registration, then each Requesting Holder shall have the right to include
in such Demand Registration up to its pro rata share (based on the ratio that
the number of shares of Class A Common Stock proposed to be sold by it bears to
the total number of shares of Class A Common Stock proposed to be sold by all
Requesting Holders) of the maximum number of shares permitted by the managing
underwriter to be included in the Demand Registration (the "Maximum Amount").
(g) Inclusion of Shares by the Corporation. If the managing underwriter has
not limited the number of shares of Class A Common Stock to be underwritten or
if the number of shares which the Requesting Holders have requested to be
registered is less than the Maximum Amount, then the Corporation may include
securities for its own account or for the account of others in such Demand
Registration if the managing underwriter so agrees and if the number of shares
of Class A Common Stock held by Requesting Holders which would otherwise have
been included in such Demand Registration and underwriting will not thereby be
limited. The inclusion of such shares shall be on the same terms as the
registration of shares held by the Requesting Holders. In the event that the
managing underwriter excludes some of the securities to be registered, the
securities to be sold for the account of the Corporation and any other holders
shall be excluded in their entirety prior to the exclusion of any shares of
Class A Common Stock of the Requesting Holders.
7.2 Lockup Agreements. Each Requesting Holder agrees not to
effect any public sale or other distribution of Class A Common Stock during the
seven days prior to the effective date of any Demand Registration or during the
180-day period (or such shorter period as the managing underwriter may require)
beginning on such effective date (except in either case as part of such Demand
Registration), unless the managing underwriter otherwise agrees. The Corporation
agrees not to effect any public sale or other distribution of Class A Common
Stock during the seven days prior to the effective date of any Demand
Registration or during the 180-day period (or such shorter period as the
managing underwriter may require) beginning on such effective date (except in
either case as part of such Demand Registration or pursuant to registrations on
Form S-8 or any successor form), unless the managing underwriter otherwise
agrees; provided, however, that such restriction shall not extend to the
issuance or distribution of shares of Class A Common Stock upon conversion of
convertible securities. Each Requesting Holder understands that stop transfer
instructions may be given to the Corporation's transfer agent to prevent
transfers restricted by this Section 7.2 during the applicable period of such
restriction.
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7.3 Registration Procedures. Whenever the Corporation is
obligated by the provisions of this Agreement to effect a registration of any
shares of Class A Common Stock under the Securities Act, the Corporation shall
use commercially reasonable efforts to effect such registration so as to permit
the sale of the shares of Class A Common Stock covered thereby in accordance
with the intended method of disposition thereof, and pursuant thereto the
Corporation will as expeditiously as possible:
(a) prepare and file with the Commission a registration statement with
respect to such shares and use all commercially reasonable efforts to cause such
registration statement to become and remain effective for such period as may be
reasonably necessary to effect the sale of such securities, not to exceed ninety
days (or, in the case of a shelf registration pursuant to Section 7.1(e), twelve
months);
(b) prepare and file with the Commission such amendments and supplements to
such registration statement and the prospectus used in connection therewith as
may be necessary to keep such registration statement effective until the sooner
to occur of the sale of all such shares or the ninetieth day following the
effective date of such registration statement (or, in the case of a shelf
registration pursuant to Section 7.1(e), the day twelve months following the
effective date) and comply with the provisions of the Securities Act with
respect to the disposition of all securities covered by such registration
statement during such period in accordance with the intended methods of
disposition by the sellers thereof set forth in such registration statement;
(c) furnish to each Requesting Holder participating in such Demand
Registration and the underwriters such number of copies of such registration
statement (with exhibits), each amendment and supplement thereto, the prospectus
included in such registration statement (including each preliminary prospectus)
and each supplement thereto and such other documents as such seller or
underwriters may reasonably request in order to facilitate the sale of the
shares being sold;
(d) use all reasonable efforts to register or qualify the shares being sold
under such other securities or blue sky laws of such jurisdictions in the United
States as any seller reasonably requests, to the extent such registration or
qualification may be required by applicable law, and do any and all other acts
and things which may be reasonably necessary or advisable to enable such seller
to consummate the disposition in such jurisdictions of the shares owned by such
seller; provided, however, that the Corporation will not be required to (i)
qualify generally to do business in any jurisdiction where it would not
otherwise be required to qualify but for this subparagraph, (ii) conform its
capitalization or the composition of its assets to the securities or blue sky
laws of such jurisdictions, (iii) consent to general service of process in any
such jurisdiction, (iv) take any action that would subject it to service of
process in suits other than those arising out of the offer and sale of the
shares registered by the Demand Registration, or (v) to subject itself to
taxation in any jurisdiction where it has not theretofore done so;
(e) cause all such shares to be listed or authorized for quotation on each
securities exchange or automated quotation system on which similar securities
issued by the Corporation are then listed or quoted;
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(f) notify each seller of such shares promptly after it shall receive
notice thereof, of the time when such registration statement (or any
post-effective amendment thereto) has become effective and, when the filing of a
post-effective amendment to such registration statement or a supplement to any
prospectus forming part of such registration statement is required, when the
same is filed;
(g) notify each seller of such shares of any request by the Commission for
the amending or supplementing of such registration statement or prospectus or
for additional information;
(h) prepare and file with the Commission, promptly upon the request of any
seller of such shares, any amendments or supplements to such registration
statement or prospectus which, in the opinion of counsel selected by the holders
of a majority of the shares being registered, is required under the Securities
Act in connection with the distribution of shares by such seller;
(i) notify each seller of shares when the Corporation becomes aware of the
happening of any event as a result of which the prospectus (as then in effect)
contains any untrue statement of a material fact or omits to state a material
fact necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading, and prepare and promptly file with
the Commission each amendment or supplement to such registration statement or
prospectus as may be necessary to correct any statements or omissions if, at the
time when a prospectus relating to such securities is required to be delivered
under the Securities Act, any event shall have occurred as the result of which
any such registration statement or prospectus as then in effect would include an
untrue statement of a material fact or omit to state any material fact necessary
to make the statements therein, in the light of the circumstances in which they
were made, not misleading;
(j) advise each seller of such shares, promptly after it shall receive
notice or obtain knowledge thereof, of the issuance of any stop order by the
Commission suspending the effectiveness of such registration statement or the
initiation or threatening of any proceeding for such purpose and promptly use
commercially reasonable efforts to prevent the issuance of any stop order or to
obtain its withdrawal if such stop order should be issued; and
(k) if applicable, make available to the seller of such shares a
consolidated earnings statement (which need not be audited) satisfying the
provisions of Section 11(a) of the Securities Act beginning within six months
after the effective date of each registration statement, which statements shall
cover the 12-month period described in such Section 11(a), provided, however,
that the Corporation shall be deemed to have complied with this clause (k) if it
has complied with Rule 158 promulgated under the Securities Act.
7.4 Expenses. Each Requesting Holder that participates in a
Demand Registration (including a Demand Registration that is withdrawn prior to
becoming effective) shall pay all underwriting discounts and commissions and any
transfer taxes attributable to the sale of such Requesting Holder's shares, the
fees and expenses of counsel for such Requesting Holder, and any other
out-of-pocket expenses of such Requesting Holder incurred in connection with its
participation in such Demand Registration. The Corporation shall pay all
expenses connected with the registration
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or qualification of such shares for sale, including the registration fee,
listing fees, the fees of its counsel and accountants and any printing costs. To
the extent that the Corporation has included shares in a Demand Registration
pursuant to Section 7.1(g), the Corporation shall pay all underwriting discounts
and commissions and any transfer taxes attributable to the sale of such shares
so included by the Corporation.
7.5 Obligations of Requesting Holders Participating in Demand
Registration. Each Requesting Holder agrees to furnish to the Corporation such
written information concerning such Requesting Holder as may reasonably be
requested by the Corporation which is necessary in connection with any Demand
Registration, and each Requesting Holder agrees to otherwise cooperate with the
Corporation in connection with any Demand Registration. Each Requesting Holder
participating in a Demand Registration agrees to comply with all applicable laws
relating to the offer and sale of the Class A Common Stock, including, to the
extent applicable, Regulation M under the Securities Exchange Act of 1934, as
amended.
7.6 Indemnification and Contribution.
(a) In the event that the Corporation effects a registration of any shares
owned by a Requesting Holder, such Requesting Holder shall indemnify and hold
the Corporation, and each of its directors and officers and each person, if any,
who controls the Corporation within the meaning of the federal securities laws
(the "Corporation Indemnified Parties") harmless against all losses, liabilities
and expenses of any nature whatsoever which the Corporation Indemnified Parties
may incur as a result of or arising out of or based upon any untrue statement or
alleged untrue statement of a material fact contained in the registration
statement filed by the Corporation, including any prospectus contained in such
registration statement, and any amendment or supplement thereto (including
post-effective amendments) or as a result of or arising out of or based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading, which
untrue statement or omission or alleged untrue statement or omission was made in
such registration statement, including any prospectus contained in such
registration statement, and any amendment or supplement thereto (including
post-effective amendments) in reliance upon and in conformity with information
furnished in writing by or on behalf of such Requesting Holder for inclusion
therein; provided, however, that such Requesting Holder shall not be liable to
the extent that the losses, liabilities or expenses arise out of or are based
upon (i) the use by the Corporation or another Requesting Holder that is not a
member of its Affiliated Group of any prospectus after such time as the
obligation of the Corporation to keep the same effective and current has expired
or (ii) the use by the Corporation or another Requesting Holder that is not a
member of its Affiliated Group of any prospectus after such time as such
Requesting Holder has advised the Corporation that the filing of a
post-effective amendment or supplement thereto is required with respect to any
information contained in such prospectus concerning such Requesting Holder,
except such prospectus as so amended or supplemented.
(b) In the event that the Corporation effects a registration of any shares
owned by a Requesting Holder, the Corporation shall indemnify and hold such
Requesting Holder, and each of its directors and officers and each person, if
any, who controls the Requesting Holder within the meaning of the federal
securities laws (the "Stockholder Indemnified Parties") harmless
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against all losses, liabilities and expenses of any nature whatsoever which such
Stockholder Indemnified Parties may incur as a result of or arising out of or
based upon any untrue statement or alleged untrue statement of a material fact
contained in the registration statement filed by the Corporation, including any
prospectus contained in such registration statement, and any amendment or
supplement thereto (including post-effective amendments) or as a result of or
arising out of or based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, provided, however, that the Corporation will not be liable
in any such case to the extent that the losses, liabilities or expenses arise
out of or are based upon (i) any untrue statement or omission or alleged untrue
statement or omission made in such registration statement, including any
prospectus contained in such registration statement, and any amendment or
supplement thereto (including post-effective amendments) in reliance upon and in
conformity with information furnished in writing by or on behalf of such
Requesting Holder to the Corporation for inclusion therein, (ii) the use by such
Requesting Holder of any prospectus after such time as the obligation of the
Corporation to keep the same effective and current has expired, or (iii) the use
by such Requesting Holder of any prospectus after such time as the Corporation
has advised the Requesting Holder that the filing of a post-effective amendment
or supplement thereto is required, except such prospectus as so amended or
supplemented.
(c) With respect to the indemnities provided above in this Section 7.6, an
indemnified party shall, with respect to any claim made against such indemnified
party, notify the indemnifying party in writing of the nature of the claim as
soon as practicable but not more than ten days after the indemnified party shall
have received notice of the assertion thereof before any court or governmental
authority. The failure by an indemnified party to give notice as provided in the
foregoing sentence shall not relieve the indemnifying party of its obligations
under this section except to the extent that the indemnifying party is damaged
solely as a result of the failure to give notice. Upon receipt of notice by an
indemnifying party from an indemnified party of the assertion of any such claim,
the indemnifying party shall employ counsel reasonably acceptable to the
indemnified party and shall assume the defense of such claim. The indemnified
party shall have the right to employ separate counsel and to participate in (but
not control) any such action, but the fees and expenses of such counsel shall be
the expense of such indemnified party unless (i) the employment of counsel by
such indemnified party has been authorized by the indemnifying party, (ii) the
indemnified party shall have been advised by its counsel in writing that there
is a conflict of interest between the indemnifying party and the indemnified
party in the conduct of the defense of such action (in which case the
indemnifying party shall not have the right to direct the defense of such action
on behalf of the indemnified party) or (iii) the indemnifying party shall not in
fact have employed counsel to assume the defense of such action, in each of
which cases the fees and expenses of such counsel shall be at the expense of the
indemnifying party. The indemnifying party shall not, in connection with any one
action or proceeding or separate but substantially similar or related actions or
proceedings in the same jurisdiction arising out of the same general allegations
or circumstances, be liable for the reasonable fees and expenses of more than
one separate firm of attorneys (together with appropriate local counsel) at any
time for such indemnified party or parties and controlling persons thereof,
which firm shall be designated by the indemnified party that had the largest
number of shares included in the applicable registration statement. An
indemnifying party shall not be liable for any settlement of an action effected
without its written consent (which consent shall not be unreasonably withheld).
No indemnifying party will consent to entry of any judgment or enter into any
settlement which does not
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include as an unconditional term thereof the giving by the claimant or plaintiff
to such indemnified party of a release from all liability in respect of such
action.
(d) If the indemnification provided for in this Section 7.6 is unavailable
to an indemnified party other than by reason of such indemnified party's failure
to comply with the first sentence of paragraph (c) of this Section 7.6, then
each applicable indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such indemnified party
as a result of such losses, claims, damages or liabilities in such proportion as
is appropriate to reflect the relative fault of the Requesting Holder(s) on the
one hand and of the Corporation on the other in connection with the statements
or omissions which resulted in such losses, claims, damages or liabilities, as
well as any other relevant equitable considerations. The relative fault of the
Requesting Holder(s) on the one hand and of the Corporation on the other shall
be determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Requesting Holder(s) or
by the Corporation and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The amount paid or payable by a party as a result of the losses, claims, damages
and liabilities referred to above shall be deemed to include, subject to the
limitations set forth in Section 7.6(c), any legal or other fees or expenses
reasonably incurred by such party in connection with investigating or defending
any action or claim.
(e) Each of the Requesting Holders and the Corporation agrees that it would
not be just and equitable if contribution pursuant to Section 7.6(d) were
determined by pro rata allocation or any other method of allocation which does
not take account of the equitable considerations referred to in Section 7.6(d).
Notwithstanding the provisions of this Section 7.6, each Requesting Holder shall
not be required to contribute any amount in excess of the amount by which the
total price at which the shares were offered to the public exceeds the amount of
any damages which such Requesting Holder has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation.
SECTION 8 MISCELLANEOUS
8.1 Waivers. No course of dealing will be deemed to amend or
discharge any provision of this Agreement. No delay in the exercise of any right
will operate as a waiver of such right. No single or partial exercise of any
right will preclude its further exercise. A waiver of any right on any one
occasion will not be construed as a bar to, or waiver of, any such right on any
other occasion.
8.2 Specific Performance. In the event of a breach or a
threatened breach by any party to this Agreement of its obligations under this
Agreement, any party injured or to be injured by such breach, in addition to
being entitled to exercise all rights granted by law, including, without
limitation, recovery of damages, will be entitled to specific performance of its
rights under this Agreement. The parties agree that the provisions of this
Agreement shall be specifically enforceable, it being agreed by the parties that
(i) any remedy at law, including monetary damages, for breach of
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<PAGE>
any such provision will be inadequate compensation for any loss, and (ii) any
defense in any action for specific performance that a remedy at law would be
adequate is waived.
8.3 Remedies Cumulative. The rights and remedies set forth in
this Agreement are cumulative, and are not intended to be exclusive of any right
or remedy provided in this Agreement, by law, in equity or otherwise. Except as
provided in this Agreement, all legal remedies (such as monetary damages) as
well as all equitable remedies (such as specific performance) will be available
for any breach or threatened breach of any provision of this Agreement.
8.4 Attorneys' Fees. If any stockholder that is a party to
this Agreement or the Corporation retains counsel for the purpose of enforcing
or preventing the breach or any threatened breach of any provision of this
Agreement or for any other remedy relating to it, then the prevailing party will
be entitled to be reimbursed by the non-prevailing party for all costs and
expenses reasonably so incurred (including reasonable attorneys' fees, costs of
bonds and fees and expenses for expert witnesses).
8.5 Execution. This Agreement may be signed in counterparts or
with detachable signature pages. Each counterpart will be considered an original
instrument, but all of them in the aggregate will constitute one agreement.
8.6 Notices. All notices and other communications hereunder
shall be in writing and shall be delivered personally, telecopied (if receipt of
which is confirmed by the person to whom sent), sent by a nationally recognized
overnight delivery service or mailed by registered or certified mail (if return
receipt is requested) to the parties at the following addresses (or at such
other address for a party as shall be specified by like notice) (notice shall be
deemed given upon receipt, if delivered personally, by overnight delivery
service or by telecopy, or on the third business day following mailing, if
mailed):
(a) If to UVSG, to it at:
7140 S. Lewis Avenue
Tulsa, Oklahoma 74136-5422
Attention: President
(with a copy similarly addressed to the Legal
Department)
Telephone: (918) 488-4993
Telecopier: (918) 488-4928
with copies to:
Baker & Botts, L.L.P.
599 Lexington Avenue
New York, New York 10022
Attention: Elizabeth M. Markowski
Telephone: (212) 705-5000
Telecopier: (212) 705-5125
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(b) If to TCI, to it at:
5619 DTC Parkway
Englewood, Colorado 80111
Attention: General Counsel
Telephone: (303) 267-4800
Telecopier: (303) 488-3245
with a copy to:
TCI UVSG, Inc.
5619 DTC Parkway
Englewood, Colorado 80111
Attention: President
Telephone: (303) 267-5360
Telecopier: (303) 488-3268
- and -
Baker & Botts, L.L.P.
599 Lexington Avenue
New York, New York 10022
Attention: Elizabeth M. Markowski
Telephone: (212) 705-5000
Telecopier: (212) 705-5125
(c) If to TCI Holdings, to it at:
5619 DTC Parkway
Englewood, Colorado 80111
Attention: President
Telephone: (303) 267-5360
Telecopier: (303) 488-3268
with a copy to:
Baker & Botts, L.L.P.
599 Lexington Avenue
New York, New York 10022
Attention: Elizabeth M. Markowski
Telephone: (212) 705-5000
Telecopier: (212) 705-5125
(d) If to Liberty, to it at:
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8101 East Prentice, #500
Englewood, Colorado 80111
Attention: General Counsel
Telephone: (303) 721-5440
Telecopier: (303) 721-5443
with a copy to:
Baker & Botts, L.L.P.
599 Lexington Avenue
New York, New York 10022
Attention: Elizabeth M. Markowski
Telephone: (212) 705-5000
Telecopier: (212) 705-5125
(e) If to News Corp. or News Holdings, to it at:
c/o News America Incorporated
1211 Avenue of the Americas
New York, New York 10036
Attention: Arthur M. Siskind
Senior Executive Vice President
and Group General Counsel
Telephone: (212) 852-7007
Telecopier: (212) 768-2029
with a copy to:
Squadron, Ellenoff, Plesent & Sheinfeld, LLP
551 Fifth Avenue
New York, New York 10176
Attention: Jeffrey W. Rubin
Telephone: (212) 476-8224
Telecopier: (212) 697-6686
8.7 Severability. Wherever possible each provision of this
Agreement will be interpreted in such manner as to be effective and valid under
applicable law. However, if for any reason any one or more of the provisions of
this Agreement are held to be invalid, illegal or unenforceable in any respect,
such action will not affect any other provision of this Agreement. In such
event, this Agreement will be construed as if such invalid, illegal or
unenforceable provision had never been contained in it.
8.8 Entire Agreement. This Agreement and the Parent Agreement
contain the entire agreement and understanding of the stockholders that are
parties to this Agreement and the Corporation concerning its subject matter.
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8.9 Binding Effect. This Agreement is binding upon, and inures
to the benefit of, the Participants, the stockholders that are parties to this
Agreement, their permitted transferees and the Corporation.
8.10 Governing Law. This Agreement shall be governed by the
laws of the State of New York applied to contracts made and wholly performed in
such State, without regard to principles governing conflicts of law. Any action
to enforce any provision of this Agreement may be brought only in a court in the
State of New York or in the United States District Court for the Southern
District of New York. Each party agrees to submit to the general jurisdiction of
such courts and to accept service of process at its address for notices pursuant
to this Agreement in any such action or proceeding brought in any such court and
hereby waives any claim that such action or proceeding brought in any such court
has been brought in an inconvenient forum.
8.11 Interpretation. As used herein, except as the context may
otherwise require, "include," "includes" and "including" are deemed to be
followed by "without limitation" whether or not they are in fact followed by
such words or words of like import; "hereof," "herein," "hereunder" and
comparable terms refer to the entirety hereof and not to any particular article,
section or other subdivision hereof or attachment hereto; references to any
gender include the other; the singular includes the plural and vice versa;
references to any agreement or other document or to any statute or regulation
are to such agreement, document, statute or regulation as amended and
supplemented from time to time (and, in the case of a statute or regulation, to
any successor provisions); and references to "Article," "Section" or another
subdivision or to "Exhibit" are to an article, section or subdivision of, or to
an Exhibit to, this Agreement. Any reference in this Agreement to a "day" or
number of "days" (without the explicit qualification of "Business") shall be
interpreted as a reference to a calendar day or number of calendar days. If any
action or notice is to be taken or given on or by a particular calendar day, and
such calendar day is not a Business Day, then such action or notice shall be
deferred until, or may be taken or given on, the next Business Day.
8.12 Parties. A stockholder who ceased to be a Stockholder
upon the Transfer or conversion of its Class B Common Stock shall continue to be
a party to this Agreement for purposes of Sections 4, 6 and 7 so long as it owns
shares of Class A Common Stock, except (i) as otherwise provided in the last
sentence of Section 4.4(d) and (ii) that if such stockholder and the members of
its Affiliated Group own only shares of Class A Common Stock, then such
stockholder may elect to cease to be a party to this Agreement by giving written
notice to such effect to the Corporation and each Stockholder, which notice
shall state that such stockholder and the members of its Affiliated Group
thereby irrevocably waive any and all rights under Section 7 (other than Section
7.6).
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first above written.
TVG HOLDINGS, INC.
By: /s/ Lawrence A. Jacobs
Name: Lawrence A. Jacobs
Title: Senior Vice President
TCI UVSG, INC.
By: /s/ Stephen M. Brett
Name: Stephen M. Brett
Title: Vice President
TELE-COMMUNICATIONS, INC.
By: /s/ Stephen M. Brett
Name: Stephen M. Brett
Title: Executive Vice President,
Secretary and General Counsel
LIBERTY MEDIA CORPORATION
By: /s/ Stephen M. Brett
Name: Stephen M. Brett
Title: Vice President
THE NEWS CORPORATION LIMITED
By: /s/ Arthur M. Siskind
Name: Arthur M. Siskind
Title: Director
UNITED VIDEO SATELLITE GROUP, INC.
By: /s/ Peter C. Boylan III
Name: Peter C. Boylan III
Title: President and Chief
Operating Officer
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