EXHIBIT 99.2
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AMENDED AND RESTATED
STOCKHOLDERS AGREEMENT
AMONG
UNIVERSAL STUDIOS, INC.,
LIBERTY MEDIA CORPORATION,
▇▇▇▇▇ ▇▇▇▇▇▇
AND
VIVENDI UNIVERSAL, S.A.
DATED AS OF DECEMBER 16, 2001
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TABLE OF CONTENTS
PAGE
ARTICLE I
DEFINITIONS
SECTION 1.1 Certain Defined Terms.........................................1
SECTION 1.2 Other Defined Terms...........................................7
SECTION 1.3 Other Definitional Provisions.................................8
ARTICLE II
STANDSTILL
SECTION 2.1 ▇▇▇▇▇▇ Standstill with Vivendi................................8
ARTICLE III
CORPORATE GOVERNANCE
SECTION 3.1 Voting on Certain Matters....................................10
SECTION 3.2 Restrictions on Other Agreements.............................11
SECTION 3.3 Irrevocable Proxy of Universal...............................12
SECTION 3.4 Irrevocable Proxy of Liberty.................................12
SECTION 3.5 Cooperation..................................................13
ARTICLE IV
TRANSFER OF COMMON SHARES
SECTION 4.1 Restrictions on Transfer by Liberty and ▇▇▇▇▇▇...............13
SECTION 4.2 Tag-Along for ▇▇▇▇▇▇ and Liberty for Transfers by the Other..14
SECTION 4.3 Right of First Refusal of ▇▇▇▇▇▇ on Transfers by Universal...16
SECTION 4.4 Right of First Refusal between Liberty and ▇▇▇▇▇▇............18
SECTION 4.5 Right of First Refusal of Liberty............................21
SECTION 4.6 Transfers of Class B Shares..................................21
SECTION 4.7 Transferees..................................................22
SECTION 4.8 Notice of Transfer...........................................23
SECTION 4.9 Compliance with Transfer Provisions..........................23
ARTICLE V
BDTV ENTITY ARRANGEMENTS
SECTION 5.1 Management...................................................24
SECTION 5.2 Treatment of Exchange Shares.................................23
SECTION 5.3 Changes to BDTV Structures...................................24
SECTION 5.4 Transfers of BDTV Interests..................................24
ARTICLE VI
MISCELLANEOUS
SECTION 6.1 Conflicting Agreements.......................................24
SECTION 6.2 Duration of Agreement........................................24
SECTION 6.3 Further Assurances...........................................25
SECTION 6.4 Amendment and Waiver.........................................25
SECTION 6.5 Severability.................................................25
SECTION 6.6 Effective Date...............................................26
SECTION 6.7 Entire Agreement.............................................26
SECTION 6.8 Successors and Assigns.......................................26
SECTION 6.9 Counterparts.................................................26
SECTION 6.10 Liabilities Under Federal Securities Laws....................26
SECTION 6.11 Remedies.....................................................26
SECTION 6.12 Notices......................................................27
SECTION 6.13 Adjustment of Share Numbers..................................28
SECTION 6.14 Governing Law; Consent to Jurisdiction.......................28
SECTION 6.15 Interpretation...............................................29
ii
AMENDED AND RESTATED STOCKHOLDERS AGREEMENT, dated as of December 16,
2001, among Universal Studios, Inc., a Delaware corporation ("UNIVERSAL"), for
itself and on behalf of the members of the Vivendi Stockholders Group, Liberty
Media Corporation, a Delaware corporation ("LIBERTY"), for itself and on behalf
of the members of the Liberty Stockholders Group, Mr. ▇▇▇▇▇ ▇▇▇▇▇▇ ("▇▇▇▇▇▇"),
for himself and on behalf of the members of the ▇▇▇▇▇▇ Stockholders Group, and
Vivendi Universal, S.A., a SOCIETE ANONYME organized under the laws of France
("VIVENDI").
WHEREAS, USA Networks, Inc., a Delaware corporation (the "COMPANY"),
Universal, Liberty, ▇▇▇▇▇▇, Vivendi and USANi LLC, a Delaware limited liability
company ("USANI"), have entered into a Transaction Agreement, dated as of
December 16, 2001 (the "TRANSACTION AGREEMENT"), pursuant to which, among other
things, (i) each of Universal and the Company will contribute certain businesses
to a limited liability limited partnership (the "PARTNERSHIP") in exchange for
interests in the Partnership, and (ii) each of Universal, Vivendi and ▇▇▇▇▇▇
shall enter into a limited liability limited partnership agreement (the
"PARTNERSHIP AGREEMENT") under which a wholly owned subsidiary of Universal will
be the general partner and each of the Company, USANi Sub LLC, a Delaware
limited liability company and a wholly owned subsidiary of USANi ("USANI SUB"),
and ▇▇▇▇▇▇ will be limited partners (collectively, the "TRANSACTIONS");
WHEREAS, the parties hereto have agreed that Universal, Liberty, ▇▇▇▇▇▇
and Vivendi shall enter into this Agreement in order to amend and restate in its
entirety the respective rights and obligations of the parties set forth in the
Stockholders Agreement, dated as of October 19, 1997 (the "1997 STOCKHOLDERS
AGREEMENT"); and
WHEREAS, the parties hereto desire to enter into the arrangements provided
for herein to be effective as of the Closing, except that the agreements in
Section 3.1(d) shall be effective as of the date hereof.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and obligations hereinafter set forth, the parties hereto hereby agree
as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. CERTAIN DEFINED TERMS. As used herein, the following terms
shall have the following meanings:
"AFFILIATE" means, 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 specified Person, for so
long as such Person remains so associated to the specified Person. For purposes
of this definition, natural persons shall not be deemed to be Affiliates of each
other, and none of Liberty, Universal, ▇▇▇▇▇▇ or the Company shall be deemed to
be Affiliates of any of the others. For purposes of this definition, Matshushita
Electric Industrial Co., Ltd. ("MEI") shall not be considered an Affiliate of
Universal or any Subsidiary of Universal so long as MEI
does not materially increase its influence over Universal or any such Subsidiary
following the date hereof.
"AGREEMENT" means this Amended and Restated Stockholders Agreement as it
may be amended, supplemented, restated or modified from time to time.
"BDTV I" means BDTV, Inc., a Delaware corporation.
"BDTV II" means BDTV II, Inc., a Delaware corporation.
"BDTV III" means BDTV III, Inc., a Delaware corporation.
"BDTV IV" means BDTV IV, Inc., a Delaware corporation.
"BDTV ENTITIES" means, collectively, the BDTV Limited Entities and the
BDTV Unrestricted Entities.
"BDTV LIMITED ENTITIES" means, collectively, BDTV I and BDTV II.
"BDTV UNRESTRICTED ENTITIES" means BDTV III, BDTV IV and each other BDTV
Entity that may be formed subsequent to the date hereof; PROVIDED that each of
Liberty and ▇▇▇▇▇▇ acknowledges and agrees that any corporation, partnership,
limited liability company or other business association hereafter formed by
▇▇▇▇▇▇ and Liberty to hold Common Shares will be a BDTV Unrestricted Entity and
will be a corporation, partnership, limited liability company or other business
association having a capital structure and governance rights substantially
similar to that of BDTV III.
"BENEFICIAL OWNER" or "BENEFICIALLY OWN" has the meaning given such term
in Rule 13d-3 under the Exchange Act and a Person's beneficial ownership of
Common Shares or Voting Securities shall be calculated in accordance with the
provisions of such Rule; PROVIDED, HOWEVER, that for purposes of determining
beneficial ownership, (i) a Person shall be deemed to be the beneficial owner of
any equity (including all Exchange Shares) which may be acquired by such Person
(disregarding any legal impediments to such beneficial ownership), whether
within 60 days or thereafter, upon the conversion, exchange or exercise of any
warrants, options (which options held by ▇▇▇▇▇▇ shall be deemed to be
exercisable), rights or other securities issued by the Company or any Subsidiary
thereof, (ii) no Person shall be deemed to beneficially own any equity solely as
a result of such Person's execution of this Agreement (including by virtue of
holding a proxy with respect to any shares or having a put obligation or call
right with respect to any shares) or any other Transaction Document, and (iii)
Liberty shall be deemed to be the beneficial owner of the proportionate number
of Common Shares represented by Liberty's equity interest in a BDTV Entity,
other than for purposes of Articles III and V of this Agreement; PROVIDED,
FURTHER, that for purposes of calculating beneficial ownership, the number of
outstanding Common Shares of the Company shall be deemed to include the number
of Common Shares that would be outstanding if all Exchange Shares were issued.
Notwithstanding the foregoing, for purposes of calculating the Minimum
Stockholder Amount, a person shall be deemed to be the beneficial owner only of
outstanding Common Shares.
"BOARD" means the Board of Directors of the Company.
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"BUSINESS DAY" shall mean any day that is not a Saturday, a Sunday or
other day on which banks are required or authorized by law to be closed in the
City of New York.
"CAPITAL STOCK" means, with respect to any Person at any time, any and all
shares, interests, participations or other equivalents (however designated,
whether voting or non-voting) of capital stock, partnership interests (whether
general or limited) or equivalent ownership interests in or issued by such
Person.
"CAUSE" means (i) the conviction of, or pleading guilty to, any felony, or
(ii) the willful, continued and complete failure to attend to managing the
business affairs of the Company, after written notice of such failure from the
Board and reasonable opportunity to cure.
"CEO" means the Chief Executive Officer of the Company.
"CEO TERMINATION DATE" means the later of (i) such time as ▇▇▇▇▇▇ no
longer serves as CEO and (ii) such time as ▇▇▇▇▇▇ no longer holds the Liberty
Proxy.
"CLASS B COMMON STOCK" means the Class B common stock, par value $.01 per
share, of the Company and any securities issued in respect thereof, or in
substitution therefor, in connection with any stock split, dividend or
combination, or any reclassification, recapitalization, merger, consolidation,
exchange or other similar reorganization (other than Common Stock).
"CLOSING" has the meaning ascribed to such term in the Transaction
Agreement.
"COMMISSION" means the Securities and Exchange Commission, and any
successor commission or agency having similar powers.
"COMMON SHARES" means, collectively, the Common Stock and the Class B
Common Stock.
"COMMON STOCK" means the common stock, par value $.01 per share, of the
Company and any securities issued in respect thereof, or in substitution
therefor, in connection with any stock split, dividend or combination, or any
reclassification, recapitalization, merger, consolidation, exchange or other
similar reorganization.
"CONTROL" (including the terms "CONTROLLED BY" and "UNDER COMMON CONTROL
WITH"), with respect to the relationship between or among two or more Persons,
means the possession, directly or indirectly, of the power to direct or cause
the direction of the affairs or management of a Person, whether through the
ownership of voting securities, as trustee or executor, by contract or
otherwise.
"CURRENT MARKET VALUE" means, with respect to any security, the average of
the daily closing prices on the Nasdaq National Market (or the principal
exchange or market on which such security may be listed or may trade) for such
security for the 20 consecutive trading days commencing on the 22nd trading day
prior to the date as of which the Current Market Value is being determined. The
closing price for each day shall be the closing price, if reported, or, if the
closing price is not reported, the average of the closing bid and asked prices
as reported by the
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Nasdaq National Market (or such principal exchange or market) or a similar
source selected from time to time by the Company for such purpose. In the event
such closing prices are unavailable, the Current Market Value shall be the Fair
Market Value of such security established by independent investment banking
firms in accordance with the procedures specified in Section 4.3(h). For
purposes of this Agreement, the Current Market Value of a share of Class B
Common Stock shall be equal to the Current Market Value of a share of Common
Stock.
"CONTINGENT MATTERS" shall have the meaning ascribed to such term in the
Governance Agreement.
"▇▇▇▇▇▇ INTEREST PURCHASE PRICE" means the cash amount (or cash value of
equity) invested by ▇▇▇▇▇▇ in a BDTV Entity plus interest, from the date of such
contribution to the date of purchase, on such amount at the rate of interest per
annum in effect from time to time and publicly announced by The Bank of New York
as its prime rate of interest, compounded annually. For purposes of BDTV I, BDTV
II, BDTV III and BDTV IV, the cash amount (or cash value of equity) initially
invested by ▇▇▇▇▇▇ is $100 in each such BDTV Entity.
"▇▇▇▇▇▇ STOCKHOLDER GROUP" means ▇▇▇▇▇▇ and ▇▇▇▇▇▇'▇ 90% owned and
controlled Affiliates.
"DIRECTOR" means any member of the Board.
"DISABLED" means the disability of ▇▇▇▇▇▇ after the expiration of more
than 180 consecutive days after its commencement which is determined to be total
and permanent by a physician selected by Liberty (or if the Liberty Termination
Date has occurred, Universal) and reasonably acceptable to ▇▇▇▇▇▇; PROVIDED that
▇▇▇▇▇▇ shall be deemed to be disabled only following the expiration of 90 days
following receipt of a written notice from the Company and such physician
specifying that a disability has occurred if within such 90-day period he fails
to return to managing the business affairs of the Company. A total disability
shall mean mental or physical incapacity that prevents ▇▇▇▇▇▇ from managing the
business affairs of the Company.
"ELIGIBLE STOCKHOLDER AMOUNT" means, in the case of ▇▇▇▇▇▇, the equivalent
of 4,400,000 Common Shares and, in the case of Liberty (including, in the case
of Liberty, the proportionate number of Common Shares represented by Liberty's
equity interest in any BDTV Entity and Common Shares issuable to Liberty or a
member of the Liberty Stockholder Group pursuant to the Holder Exchange
Agreement), 4,000,000 shares of Common Stock, in each case determined on a fully
diluted basis (taking into account, in the case of ▇▇▇▇▇▇, all unexercised
Options, whether or not then exercisable).
"EQUITY" means any and all shares of Capital Stock of the Company,
securities of the Company convertible into, or exchangeable for, such shares
(including, without limitation, the Exchange Shares), and options, warrants or
other rights to acquire such shares.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"EXCHANGE SHARES" means the Silver King Exchange Shares as defined in the
Holder Exchange Agreement.
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"FAIR MARKET VALUE" means, as to any securities or other property, the
cash price at which a willing seller would sell and a willing buyer would buy
such securities or property in an arm's-length negotiated transaction without
time constraints.
"FCC" means the Federal Communications Commission or its successor.
"FCC REGULATIONS" means, as of any date, all federal communications
statutes and all rules, regulations, orders, decrees and policies of the FCC as
then in effect, and any interpretations or waivers thereof or modifications
thereto.
"GOVERNANCE AGREEMENT" means the Amended and Restated Governance
Agreement, among the Company, ▇▇▇▇▇▇, Vivendi, Universal and Liberty, dated as
of even date herewith, as it may be amended, supplemented, restated or modified
from time to time.
"GROUP" shall have the meaning assigned to it in Section 13(d)(3) of the
Exchange Act.
"HOLDER EXCHANGE AGREEMENT" means the Exchange Agreement, dated as of
December 20, 1996, by and between the Company and Liberty HSN.
"HSR ACT" means the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976,
as amended.
"INDEPENDENT INVESTMENT BANKING FIRM" means an investment banking firm of
nationally recognized standing that is, in the reasonable judgment of the Person
engaging such firm, qualified to perform the task for which it has been engaged.
"LIBERTY HSN" means Liberty HSN, Inc., a Colorado corporation.
"LIBERTY STOCKHOLDER GROUP" means Liberty and those Subsidiaries of
Liberty that, from time to time, hold Equity subject to this Agreement.
"LIBERTY SURVIVING CLASS B STOCK" means the Surviving Class B Stock (as
defined in the Holder Exchange Agreement).
"MARKET SALE" means a "brokers' transaction" within the meaning of
Section 4(4) of the Securities Act.
"MINIMUM STOCKHOLDER AMOUNT" means Common Shares representing at least
50.1% of the outstanding voting power of the outstanding Common Shares.
"OPTIONS" means options to acquire capital stock of the Company granted by
the Company to ▇▇▇▇▇▇ and outstanding from time to time.
"PERMITTED DESIGNEE" means any Person designated by a Stockholder, who
shall be reasonably acceptable to the other Stockholders (other than Universal),
to exercise such Stockholder's rights pursuant to Section 4.3 or 4.4.
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"PERMITTED TRANSFEREE" means (i) with respect to Liberty, any of its
Subsidiaries, (ii) with respect to Universal, Vivendi Company and any Subsidiary
of Vivendi Company, and (iii) with respect to ▇▇▇▇▇▇, any of his 90% owned and
controlled Affiliates. In addition, each of Liberty, Universal and ▇▇▇▇▇▇ shall
each be a Permitted Transferee of its respective Permitted Transferees.
"PERSON" means any individual, corporation, limited liability company,
limited or general partnership, joint venture, association, joint-stock company,
trust, unincorporated organization, government or any agency or political
subdivisions thereof or any Group comprised of two or more of the foregoing.
"PUBLIC STOCKHOLDERS" means any stockholder of the Company that, together
with its Affiliates (a) has sole or shared voting power with respect to Voting
Securities representing no more than 10% of the voting power on the applicable
vote or (b) has sole or shared power to dispose of Equity representing no more
than 10% of the Equity to be tendered or exchanged in any applicable tender or
exchange offer, as the case may be.
"REFERENCE RATE" means, for any day, a fixed rate per annum equal to the
yield, expressed as a percentage per annum, obtained at the official auction of
90-day United States Treasury Bills most recently preceding the date thereof
plus 100 basis points.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"STOCKHOLDER" means each of Universal, Liberty and ▇▇▇▇▇▇.
"STOCKHOLDER GROUP" means one or more of the ▇▇▇▇▇▇ Stockholder Group, the
Liberty Stockholder Group and the Vivendi Stockholder Group. For purposes of
this Agreement, (i) prior to the time that Liberty acquires ▇▇▇▇▇▇'▇ interest in
a BDTV Entity, each BDTV Entity shall be deemed to be a member of the Liberty
Stockholder Group except as otherwise expressly set forth herein and (ii) a
Permitted Designee shall be deemed to be a member of a Stockholder's Stockholder
Group (other than for purposes of Section 4.1(a)(x)).
"SUBSIDIARY" means, with respect to any Person, any corporation or other
entity of which at least a majority of the voting power of the voting equity
securities or equity interest is owned, directly or indirectly, by such Person.
"THIRD PARTY TRANSFEREE" means any Person to whom a Stockholder (including
a Third Party Transferee subject to this Agreement pursuant to Sections 4.7(b)
and 4.7(c)) or a Permitted Transferee Transfers Common Shares, other than a
Permitted Transferee of such Stockholder or a member of another Stockholder
Group.
"TRANSACTION DOCUMENTS" means this Agreement, the Transaction Agreement,
the Partnership Agreement, the Governance Agreement and any other agreements
contemplated by any of the foregoing.
"TRANSFER" means, directly or indirectly, to sell, transfer, assign,
pledge, encumber, hypothecate or similarly dispose of, either voluntarily or
involuntarily, or to enter into any contract, option or other arrangement or
understanding with respect to the sale, transfer, assignment, pledge,
encumbrance, hypothecation or similar disposition of, any Common Shares
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beneficially owned by a Stockholder or any interest in any Common Shares
beneficially owned by a Stockholder, PROVIDED, HOWEVER, that a merger or
consolidation in which a Stockholder is a constituent corporation shall not be
deemed to be the Transfer of any Common Shares beneficially owned by such
Stockholder (PROVIDED, that a significant purpose of any such transaction is not
to avoid the provisions of this Agreement). For purposes of this Agreement, the
conversion of shares of Class B Common Stock into shares of Common Stock shall
not be deemed to be a Transfer.
"VIVENDI COMPANY" means Vivendi and any of its successors.
"VIVENDI STOCKHOLDER GROUP" means Universal, together with the Vivendi
Company and any Subsidiary of the Vivendi Company that, from time to time, hold
Equity subject to this Agreement.
"VOTING SECURITIES" means at any time shares of any class of capital stock
of the Company which are then entitled to vote generally in the election of
Directors.
SECTION 1.2. OTHER DEFINED TERMS. The following terms shall have the
meanings defined for such terms in the Sections set forth below:
TERM SECTION
---- -------
1997 Stockholders Agreement................... Recitals
Acceptance Notice............................. Section 4.3(d)
Appraisal..................................... Section 4.3(h)
Company....................................... Recitals
Covered Market Sale........................... Section 4.3(a)
▇▇▇▇▇▇........................................ Preamble
▇▇▇▇▇▇ Termination Date....................... Section 6.2(a)
Exchange Notice............................... Section 4.6(a)
L/D Offer Notice.............................. Section 4.4(b)
L/D Offer Price............................... Section 4.4(c)
L/D Other Party............................... Section 4.4(b)
L/D Transferring Party........................ Section 4.4(a)
Liberty....................................... Preamble
Liberty Proxy................................. Section 3.4(a)
Liberty Proxy Shares.......................... Section 3.4(a)
Liberty Termination Date...................... Section 6.2(b)
Litigation.................................... Section 6.11
Non-Transferring Stockholder.................. Section 4.6(a)
Offer Notice.................................. Section 4.3(b)
Offer Price................................... Section 4.3(c)
Other Stockholder............................. Section 4.3(b)
Partnership................................... Recitals
Partnership Agreement......................... Recitals
Regulation 14A................................ Section 2.1(a)
Restricted Period............................. Section 2.1(a)
Tag-Along Notice.............................. Section 4.2(a)
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TERM SECTION
---- -------
Tag-Along Sale................................ Section 4.2(a)
Tag-Along Shares.............................. Section 4.2(a)
Transaction Agreement......................... Recitals
Transactions.................................. Preamble
Transferring Party............................ Section 4.3(a)
Transferring Stockholders..................... Section 4.6(a)
Universal..................................... Preamble
Universal Proxy............................... Section 3.3(a)
Universal Proxy Shares........................ Section 3.3(a)
Universal Termination Date.................... Section 6.2(a)
USANi Sub..................................... Recitals
Vivendi....................................... Preamble
SECTION 1.3. OTHER DEFINITIONAL PROVISIONS. (a) The words "hereof",
"herein" and "hereunder" and words of similar import when used in this Agreement
shall refer to this Agreement as a whole and not to any particular provision of
this Agreement, and Article and Section references are to this Agreement unless
otherwise specified.
(b) The meanings given to terms defined herein shall be equally applicable
to both the singular and plural forms of such terms.
(c) For purposes of calculating the amount of outstanding Common Shares or
Equity as of any date and the number of Common Shares or Equity beneficially
owned by any Person as of any date, (i) any Common Shares held in the Company's
treasury or owned by any Subsidiaries of the Company shall be disregarded and
(ii) all Exchange Shares shall be assumed to have been converted into Common
Shares.
ARTICLE II
STANDSTILL
SECTION 2.1. ▇▇▇▇▇▇ STANDSTILL WITH VIVENDI. (a) ▇▇▇▇▇▇ agrees that, prior
to the earliest of (i) the fourth anniversary of the Closing Date, (ii) the sale
of all or substantially all of the assets of Vivendi and its Subsidiaries to
another Person other than a Subsidiary of Vivendi, or (iii) the effective time
of any merger or consolidation of Vivendi with or into any other Person, other
than a merger or consolidation in which a majority of the shares of the
surviving entity are held by the holders of Vivendi's voting securities
immediately prior to such effective time (the "RESTRICTED PERIOD"), he and his
Affiliates will not, in any manner, whether publicly or otherwise, directly or
indirectly, without the prior written consent of Vivendi, unless specifically
requested in writing by the CEO of Vivendi or by a resolution of a majority of
the board of directors of Vivendi:
(i) acquire, agree to acquire or make any proposal to acquire,
directly or indirectly, by purchase or otherwise, beneficial ownership of
(A) any voting securities if immediately after such acquisition, the voting
securities beneficially owned, in the aggregate, by ▇▇▇▇▇▇ and its
Affiliates would exceed five percent (5%) of the outstanding
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voting securities of Vivendi or (B) any significant assets of Vivendi, or
any of its Subsidiaries (other than assets acquired in the ordinary course
of business); PROVIDED, HOWEVER, that this clause shall not be deemed to be
violated by the indirect acquisition of voting securities of Vivendi as a
result of an acquisition by ▇▇▇▇▇▇ of another Person that holds such voting
securities so long as the voting securities of Vivendi held by such Person
do not exceed 1% of such Person's total assets;
(ii) propose to enter into, directly or indirectly, any merger, tender
offer or other business combination or similar transaction involving
Vivendi or any of its Subsidiaries (including a purchase of a material
portion of their assets);
(iii) make, or in any way participate in, directly or indirectly, any
"solicitation" of "proxies" (as such terms are defined in Regulation 14A
("REGULATION 14A") under the Exchange Act but without regard to the
exclusion set forth in clause (2)(iv) of the definition of "solicitation")
to vote, or seek to advise or influence any Person with respect to the
voting of, any securities of Vivendi or any of its Subsidiaries, or become
a "participant" in a "solicitation" (as such terms are defined in
Regulation 14A but without regard to the exclusion set forth in clause
(2)(iv) of the definition of "solicitation") whether or not such
solicitation is subject to regulation under Regulation 14A;
(iv) grant any proxy with respect to any voting securities of Vivendi
(other than to Vivendi, its Affiliates or the CEO of Vivendi);
(v) call, or seek to call, a meeting of Vivendi's shareholders or
initiate any shareholder proposal for action by shareholders of Vivendi;
(vi) bring any action or otherwise act to contest the validity of this
Article II or seek a release of the restrictions contained herein;
(vii) form, join or in any way participate in a "group" (within the
meaning of Section 13(d)(3) of the Exchange Act) with respect to any voting
securities of Vivendi or any of its Subsidiaries or deposit any voting
securities of Vivendi in a voting trust or subject any voting securities of
Vivendi to any arrangement or agreement with respect to the voting of such
voting securities or other agreement having similar effect;
(viii) otherwise act, alone or in concert with others, to seek to
affect or influence the control of the management or the board of directors
of Vivendi or the business, operations or policies of Vivendi;
(ix) enter into any discussions, negotiations, arrangements,
understandings or agreements (whether written or oral) with any other
Person (other than ▇▇▇▇▇▇'▇ financial advisors, agents, other advisors or
representatives) regarding a business combination involving Vivendi, any
other purchase of any voting securities involving Vivendi, or significant
assets of Vivendi;
(x) disclose any intention, plan or arrangement inconsistent with the
foregoing; or
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(xi) advise or assist any other Person in connection with any of the
foregoing.
▇▇▇▇▇▇ also agrees that, during the Restricted Period, neither he nor anyone
acting on his behalf will (x) request Vivendi or any of its directors, officers,
employees, agents, advisors or representatives, directly or indirectly, to amend
or waive any provision of this Article II (including this sentence) or (y) take
any action which might require Vivendi to make a public announcement regarding
the possibility of a business combination, merger or extraordinary transaction.
(b) Notwithstanding Section 2.1(a), ▇▇▇▇▇▇ or any of his Affiliates shall
be permitted during the Restricted Period to submit a proposal addressed to the
board of directors of Vivendi that proposes a merger or other business
combination involving Vivendi if (i) Vivendi shall have publicly announced that
it has entered into a definitive agreement providing for: (A) any acquisition
from Vivendi or from one or more stockholders thereof (by tender or exchange
offer or other public offer), or both, more than 50% of the outstanding voting
or equity securities of Vivendi, (B) any acquisition of all, or substantially
all, the assets of Vivendi and its Subsidiaries or (C) a merger, consolidation,
statutory share exchange or similar transaction between or involving Vivendi and
another Person (other than a merger or consolidation in which a majority of the
voting shares of the surviving entity are held by the holders of Vivendi's
voting securities immediately prior to such effective time); or (ii) any Person
shall have commenced a tender offer or exchange offer that is likely to result
in any Person or group beneficially owning 50% or more of the voting securities
of Vivendi; PROVIDED, that in the case of this clause (ii), the right to make a
proposal pursuant to this Section 2.1(b) shall cease upon the withdrawal or
termination of such unsolicited tender offer or exchange offer or proposal
unless ▇▇▇▇▇▇ or any of his Affiliates shall have submitted a proposal prior to
such withdrawal or termination.
ARTICLE III
CORPORATE GOVERNANCE
SECTION 3.1. VOTING ON CERTAIN MATTERS. (a) In the event that Section 2.03
of the Governance Agreement is applicable, in connection with any vote or action
by written consent of the stockholders of the Company relating to any matter
that constitutes a Contingent Matter, each Stockholder agrees (and agrees to
cause each member of its Stockholders Group, if applicable), with respect to any
Common Shares with respect to which it or he has the power to vote (whether by
proxy, the ownership of voting securities of a BDTV Entity or otherwise)
(including all shares held by any BDTV Entity), to vote against (and not act by
written consent to approve) such Contingent Matter (including not voting or not
executing a written consent with respect to the Common Shares beneficially owned
by a BDTV Entity) if Liberty and ▇▇▇▇▇▇ have not consented to such Contingent
Matter in accordance with the provisions of the Governance Agreement and to take
or cause to be taken all other reasonable actions required, to the extent
permitted by law, to prevent the taking of any action by the Company with
respect to a Contingent Matter without the consent of Liberty.
(b) Each Stockholder agrees to vote (and cause each member of its or his
Stockholder Group to vote, if applicable), or act by written consent with
respect to any Common Shares with respect to which it or he has the power to
vote (whether by proxy, the ownership of voting
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securities of a BDTV Entity or otherwise) (including all shares held by any BDTV
Entity) in favor of (i) each of the designees of Universal which Universal has a
right to designate pursuant to the Governance Agreement, and (ii) each of the
designees of Liberty which Liberty has a right to designate pursuant to the
Governance Agreement.
(c) Upon the written request of Universal or Liberty, each Stockholder, in
such Stockholder's capacity as a stockholder only, agrees to vote (and cause
each member of its Stockholders Group to vote, if applicable), or act by written
consent with respect to any Common Shares with respect to which it or he has the
power to vote (whether by proxy, the ownership of voting securities of a BDTV
Entity or otherwise) (including all shares held by any BDTV Entity) and
otherwise take or cause to be taken all actions necessary to remove any Director
designated by such requesting party and to elect any replacement Director
designated by such party as provided in the Governance Agreement. Unless all the
Stockholders otherwise agree, no Stockholder or any member of its Stockholders
Group shall take any action to cause the removal of any Director designated by
Universal or any Director designated by Liberty except (i) in the case of a
Director designated by Universal, upon the written request of Universal, and
(ii) in the case of a Director designated by Liberty, upon the written request
of Liberty.
(d) For purposes of Sections 3.1 and 3.4 and Article V of this Agreement as
well as the 1997 Stockholders Agreement, each of Liberty, Universal and ▇▇▇▇▇▇
hereby consents and agrees to the taking of any action by any of ▇▇▇▇▇▇, a BDTV
Entity, Universal or Liberty, which action is reasonably necessary or
appropriate to approve and consummate the transactions pursuant to the
Transaction Agreement and the Transaction Documents (and including ▇▇▇▇▇▇'▇
arrangements with the Partnership). Neither ▇▇▇▇▇▇ nor Liberty shall enter into,
or permit any material amendment to, or waiver or modification of material
rights or obligations under the Transaction Agreement or the Transaction
Documents (including by the Company) without the prior written consent of the
other Stockholder. The consent granted by the first sentence of this paragraph
is intended to be specifically limited by the foregoing sentence.
(e) Liberty will not be deemed to be in violation of paragraphs (a), (b) or
(c) of this Section 3.1 as a result of any action by ▇▇▇▇▇▇ (including by a BDTV
Entity as a result of an action by ▇▇▇▇▇▇) that is not within Liberty's control.
SECTION 3.2. RESTRICTIONS ON OTHER AGREEMENTS. No Stockholder or any of its
or his Permitted Transferees shall enter into or agree to be bound by any
stockholder agreements or arrangements of any kind with any Person with respect
to any Equity (including, without limitation, the deposit of any Common Shares
in a voting trust or forming, joining or in any way participating in or
assisting in the formation of a Group with respect to any Common Shares, other
than any such Group consisting exclusively of Liberty, Universal and ▇▇▇▇▇▇ and
any of their respective Affiliates, Permitted Designees and Permitted
Transferees) and no Stockholder (other than Universal or Liberty or any of their
respective Permitted Transferees) or any of its or his Permitted Transferees
shall enter into or agree to be bound by any agreements or arrangements of any
kind with any Person to incur indebtedness for purposes of purchasing Equity
(other than to exercise Options or to purchase Common Shares pursuant to Section
4.3 or 4.4 of this Agreement), except (i) for such agreements or arrangements as
are now in effect or as are contemplated by the Transaction Documents, (ii) in
connection with a proposed sale of
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BDTV Entity securities or Common Shares otherwise permitted hereunder or (iii)
for such agreements or arrangements with a Permitted Designee reasonably
acceptable to the other Stockholders and not inconsistent with or for the
purpose of evading the terms of this Agreement.
SECTION 3.3. IRREVOCABLE PROXY OF UNIVERSAL. (a) (i) Until the earlier of
the date that ▇▇▇▇▇▇ ceases to exercise rights under this Section 3.3 pursuant
to Section 6.2(c) or the Universal Termination Date, ▇▇▇▇▇▇ shall be entitled to
exercise voting authority and authority to act by written consent over all
shares of Common Stock beneficially owned by each member of the Vivendi
Stockholder Group, and (ii) until ▇▇▇▇▇▇ ceases to exercise rights under this
Section 3.3 pursuant to Section 6.2(c), ▇▇▇▇▇▇ shall be entitled to exercise
voting authority to act by written consent over all shares of Class B Common
Stock beneficially owned by each member of the Vivendi Stockholder Group (the
shares referred to in clauses (i) and (ii), collectively, the "UNIVERSAL PROXY
SHARES"), in each case, on all matters submitted to a vote of the Company's
stockholders or by which the Company's stockholders may act by written consent
pursuant to a conditional proxy (which proxy is irrevocable and coupled with an
interest for purposes of Section 212 of the Delaware General Corporation Law)
(the "UNIVERSAL PROXY"); PROVIDED, that in the event that ▇▇▇▇▇▇ is removed by
the Board as CEO for any reason other than Cause, ▇▇▇▇▇▇ shall be deemed to
continue to be CEO hereunder and shall be entitled to exercise the Universal
Proxy set forth herein until the earlier of (A) such time as he has abandoned
efforts to cause his reinstatement as CEO and (B) the next stockholders meeting
of the Company at which he had an adequate opportunity to nominate and elect his
slate of directors (unless at such stockholders meeting ▇▇▇▇▇▇'▇ slate of
directors is elected and ▇▇▇▇▇▇ is promptly thereafter reinstated as CEO).
(b) The Universal Proxy shall terminate as provided for in Section 3.3(a)
or, if earlier, (i) immediately upon a material breach by ▇▇▇▇▇▇ of Section
3.1(b)(i) or Section 3.1(c) (as applicable to Universal) or of Article II (which
breach is not cured promptly following receipt by ▇▇▇▇▇▇ of written notice of
such breach from Vivendi), (ii) at such time as ▇▇▇▇▇▇ has been convicted of, or
has pleaded guilty to, any felony involving moral turpitude or (iii) at such
time as ▇▇▇▇▇▇ ceases to beneficially own 20,000,000 Common Shares with respect
to which he has a pecuniary interest; PROVIDED, in the case of clauses (ii) and
(iii) above, that Universal sends notice of such termination to ▇▇▇▇▇▇ within 30
days after the event giving rise to such termination, in which case the
Universal Proxy shall terminate immediately upon the receipt of such notice.
(c) Notwithstanding anything to the contrary set forth in this Agreement,
the Universal Proxy is personal to ▇▇▇▇▇▇ and may not be assigned by ▇▇▇▇▇▇ by
operation of law or otherwise and shall not inure to ▇▇▇▇▇▇'▇ successors without
the prior written consent of Universal.
SECTION 3.4. IRREVOCABLE PROXY OF LIBERTY. (a) Subject to paragraphs (b)
and (c) below, until the earlier of the date that (x) ▇▇▇▇▇▇ is no longer CEO or
(y) ▇▇▇▇▇▇ is Disabled, ▇▇▇▇▇▇ shall be entitled to exercise voting authority
and authority to act by written consent over all Common Shares beneficially
owned by each member of the Liberty Stockholder Group (the "LIBERTY PROXY
SHARES"), on all matters submitted to a vote of the Company's stockholders or by
which the Company's stockholders may act by written consent pursuant to a
conditional proxy (which proxy is irrevocable and coupled with an interest for
purposes of Section 212 of the Delaware General Corporation Law) (the "LIBERTY
PROXY"); PROVIDED, that in the event that ▇▇▇▇▇▇
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is removed by the Board as CEO for any reason other than Cause, ▇▇▇▇▇▇ shall be
deemed to continue to be CEO hereunder and shall be entitled to the Liberty
Proxy set forth herein until the earlier of (A) such time as he has abandoned
efforts to cause his reinstatement as CEO and (B) the next stockholders meeting
of the Company at which he had an adequate opportunity to nominate and elect his
slate of directors (unless at such stockholders meeting ▇▇▇▇▇▇'▇ slate of
directors is elected and ▇▇▇▇▇▇ is promptly thereafter reinstated as CEO).
(d) Notwithstanding the foregoing, the Liberty Proxy shall not be valid
with respect to any of the Liberty Proxy Shares in connection with any vote for
(or consent to approve) any matter that is a Contingent Matter which Liberty has
the right to consent to pursuant to the terms of the Governance Agreement with
respect to which Liberty has not consented.
(e) The Liberty Proxy shall terminate as provided for in Section 3.4(a) or,
if earlier, (i) immediately upon a material breach by ▇▇▇▇▇▇ of the terms of
Section 3.1(a), Section 3.1(b)(ii), Section 3.1(c) (as applicable to Liberty) or
Section 3.4(b) of this Agreement, (ii) at such time as ▇▇▇▇▇▇ has been convicted
of, or has pleaded guilty to, any felony involving moral turpitude or (iii) at
such time as ▇▇▇▇▇▇ ceases to beneficially own 20,000,000 Common Shares with
respect to which he has a pecuniary interest; PROVIDED, in the case of clauses
(ii) and (iii) above, that Liberty sends notice of such termination to ▇▇▇▇▇▇
within 30 days after receiving notice of the event giving rise to such
termination, in which case the Liberty Proxy shall terminate immediately upon
the receipt of such notice.
(f) Notwithstanding anything to the contrary set forth herein, the Liberty
Proxy is personal to ▇▇▇▇▇▇ and may not be assigned by ▇▇▇▇▇▇ and shall not
inure to ▇▇▇▇▇▇'▇ successors without the prior written consent of Liberty.
SECTION 3.5. COOPERATION. Each Stockholder shall vote (or act or not act by
written consent with respect to) all of its Common Shares (and any Common Shares
with respect to which it has the power to vote (whether by proxy or otherwise)
and shall, as necessary or desirable, attend all meetings in person or by proxy
for purposes of obtaining a quorum, and execute all written consents in lieu of
meetings, as applicable, to effectuate the provisions of this Article III.
ARTICLE IV.
TRANSFER OF COMMON SHARES
SECTION 4.1. RESTRICTIONS ON TRANSFER BY LIBERTY AND ▇▇▇▇▇▇. (a) Until the
CEO Termination Date or such time as ▇▇▇▇▇▇ becomes Disabled, subject to the
other provisions of this Agreement, neither Liberty nor ▇▇▇▇▇▇ shall Transfer or
otherwise dispose of (including pledges), directly or indirectly, any Common
Shares beneficially owned by its Stockholder Group other than (w) Transfers of
Common Shares by ▇▇▇▇▇▇ in order to pay taxes arising from the granting, vesting
and/or exercise of the Options, (x) Transfers of Common Shares by Liberty to
members of the Liberty Stockholder Group or by ▇▇▇▇▇▇ to members of the ▇▇▇▇▇▇
Stockholder Group, (y) a pledge or grant of a security interest in vested Common
Shares (other than the pledge of certain Common Shares pursuant to prior
arrangements between ▇▇▇▇▇▇ and the Company) or pledges by a member of the
Liberty Stockholder Group of securities of a BDTV Entity that Liberty is
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entitled to Transfer under (b)(iii) below in connection with bona fide
indebtedness in which the pledgee of the applicable Common Shares (or securities
of such BDTV Entity) agrees that, upon any default or exercise of its rights
under such pledge or security arrangement, it will offer to sell the pledged
Common Shares (or securities of such BDTV Entity) to the non-pledging
Stockholder(s) (or its or his designee) for an amount equal to the lesser of the
applicable amount of such indebtedness and the fair market value of such pledged
Common Shares (or securities of such BDTV Entity), and (z) Transfers of Options
or Common Shares to the Company by ▇▇▇▇▇▇ or his Affiliates in connection with a
"cashless" exercise of the Options (including Options granted to ▇▇▇▇▇▇ on the
date hereof or in the future). The restrictions on Transfer by Liberty provided
in this Section 4.1 shall be for the sole benefit of ▇▇▇▇▇▇ and the restrictions
on Transfer by ▇▇▇▇▇▇ provided in this Section 4.1 shall be for the sole benefit
of Liberty.
(b) Notwithstanding the restrictions contained in subsection (a) above (and
in addition to the foregoing exceptions, but subject to the right of first
refusal described in Section 4.4 on behalf of ▇▇▇▇▇▇ (or his designee) with
respect to Transfers by members of the Liberty Stockholder Group and to a right
of first refusal on behalf of Liberty (or its designee) with respect to
Transfers by members of the ▇▇▇▇▇▇ Stockholder Group (which rights shall be
assignable)): (i) either Liberty or ▇▇▇▇▇▇ may Transfer all or any portion of
the Common Shares beneficially owned by its Stockholder Group (and, in the case
of Liberty only, its entire interest in the BDTV Entities) to an unaffiliated
third party or to Universal, PROVIDED, HOWEVER, that a Transfer by either
Liberty or ▇▇▇▇▇▇ to a third party or to Universal shall be subject to the
tag-along right pursuant to Section 4.2, and (ii) either Liberty or ▇▇▇▇▇▇ may
Transfer any portion of the Common Shares (including, in the case of Liberty,
all or a portion of a BDTV Entity interest) held by its Stockholder Group to an
unaffiliated third party; PROVIDED that, (a) following such Transfer such
Stockholder Group retains its Eligible Stockholder Amount of Common Shares and
(b) in the case of the Transfer of an interest in or Common Shares held by a
BDTV Limited Entity as of the date hereof, following such Transfer, Liberty,
▇▇▇▇▇▇ and Universal, to the extent Universal remains subject to this Agreement,
and each of their respective Stockholder Groups collectively beneficially own
the Minimum Stockholder Amount. Notwithstanding the previous sentence and the
restrictions contained in paragraph (a) above and subject to the requirement,
with respect to a Transfer by Liberty of an interest in or Common Shares held by
a BDTV Limited Entity as of the date hereof, that the Stockholders and their
respective Stockholder Groups collectively beneficially own the Minimum
Stockholder Amount, either Liberty or ▇▇▇▇▇▇ may transfer any of its Common
Shares in one or more transactions that comply with the requirements of Rule 144
or 145 (as applicable) under the Securities Act.
SECTION 4.2. TAG-ALONG FOR ▇▇▇▇▇▇ AND LIBERTY FOR TRANSFERS BY THE OTHER.
(a) If either ▇▇▇▇▇▇ or Liberty shall desire to Transfer to any third party,
including Universal and the members of its Stockholder Group, any of the Common
Shares beneficially owned by him or it or any member of his or its Stockholder
Group (other than as set forth in paragraph (e) below), in one transaction or a
series of related transactions (the "TAG-ALONG SALE"), ▇▇▇▇▇▇ or Liberty, as
applicable, shall give prior written notice to the other of such intended
Transfer. Such notice (the "TAG-ALONG NOTICE") shall set forth the terms and
conditions of such proposed Transfer, including the number of Common Shares
proposed to be Transferred (the "TAG-ALONG SHARES"), the purchase price per
Common Share proposed to be paid therefor and the payment terms and type of
Transfer to be effectuated.
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(b) Within 10 days after delivery of the Tag-Along Notice by ▇▇▇▇▇▇ or
Liberty to the other, as applicable, Liberty or ▇▇▇▇▇▇, respectively, shall, by
written notice to the other, have the opportunity and right to sell to such
third party in such proposed Transfer (upon the same terms and conditions as
▇▇▇▇▇▇ or Liberty, as applicable) up to that number of Common Shares
beneficially owned by Liberty or ▇▇▇▇▇▇ (including Liberty's pro rata portion of
any shares held by a BDTV Entity) as shall equal the product of (x) a fraction,
the numerator of which is the number of Tag-Along Shares and the denominator of
which is the aggregate number of Common Shares beneficially owned as of the date
of the Tag-Along Notice by ▇▇▇▇▇▇ and his Affiliates (excluding shares held by
any BDTV Entity that were not contributed by ▇▇▇▇▇▇) or Liberty and its
Affiliates (including Common Shares held by any BDTV Entity that were
contributed by Liberty), multiplied by (y) the number of Common Shares
beneficially owned by Liberty or ▇▇▇▇▇▇, as applicable (including Liberty's pro
rata portion of any shares held by a BDTV Entity) as of the date of the
Tag-Along Notice. The number of Common Shares that ▇▇▇▇▇▇ or Liberty may sell to
a third party pursuant to Section 4.2(a) shall be determined by multiplying the
maximum number of Tag-Along Shares that such third party is willing to purchase
on the terms set forth in the Tag-Along Notice by a fraction, the numerator of
which is the number of Common Shares that such Stockholder proposes to sell
hereunder (subject to the maximum amount for ▇▇▇▇▇▇ or Liberty, as applicable,
calculated pursuant to the preceding sentence) and the denominator of which is
the aggregate number of Common Shares that ▇▇▇▇▇▇ and Liberty propose to sell
hereunder.
(c) At the closing of any proposed Transfer in respect of which a Tag-Along
Notice has been delivered, Liberty or ▇▇▇▇▇▇, as applicable, shall deliver, free
and clear of all liens (other than liens caused by the other party), to such
third party certificates evidencing the Common Shares to be sold thereto duly
endorsed with Transfer powers and shall receive in exchange therefore the
consideration to be paid by such third party in respect of such Common Shares as
described in the Tag-Along Notice. No transferee shall be required to purchase
shares of a BDTV Entity in connection with the Tag-Along Sale and each of
Liberty and ▇▇▇▇▇▇ shall cooperate so that any transferee will be able to
purchase directly any Common Shares held by a BDTV Entity and not the shares of
any BDTV Entity.
(d) Neither ▇▇▇▇▇▇ and the members of his Stockholders Group, on the one
hand, nor Liberty and the members of its Stockholders Group, on the other hand,
shall effect any Transfer or Transfers constituting a Tag-Along Sale absent
compliance with this Section 4.2.
(e) This Section 4.2 shall not be applicable to the Transfer by ▇▇▇▇▇▇ or
any member of his Stockholder Group (i) of an aggregate of not more than
4,000,000 Common Shares within any rolling twelve-month period, (ii) pursuant to
Section 4.1(a)(w) or 4.1(a)(z), (iii) in a Market Sale or (iv) following such
time as ▇▇▇▇▇▇ is no longer CEO other than any Transfer made in connection with
▇▇▇▇▇▇ ceasing to be CEO.
SECTION 4.3. RIGHT OF FIRST REFUSAL OF ▇▇▇▇▇▇ ON TRANSFERS BY UNIVERSAL.
(a) Any Transfer of Common Shares by Universal or any member of its Stockholder
Group (the "TRANSFERRING PARTY") will be subject to the right of first refusal
provisions of this Section 4.3 other than a Transfer (i) between Universal and
any member of the Vivendi Stockholder Group or between members of the Vivendi
Stockholder Group, (ii) in connection with any Market Sale (other than any
Market Sale (a "COVERED MARKET SALE") involving the Transfer of 1,000,000 or
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more Common Shares in any rolling twelve month period), (iii) of an aggregate of
not more than 4,000,000 Common Shares within any rolling twelve-month period, or
(iv) contemplated by Section 8.07 of the Partnership Agreement.
(b) Prior to effecting any Transfer described in Section 4.3(a), the
Transferring Party shall deliver a written notice (the "OFFER NOTICE") to
▇▇▇▇▇▇, which Offer Notice shall specify (i) the Person to whom the Transferring
Party proposes to make such Transfer or the proposed manner of Transfer in the
case of a public offering or a Covered Market Sale, (ii) the number or amount
and description of the Common Shares to be Transferred, (iii) except in the case
of a public offering or a Covered Market Sale, the Offer Price (as defined
below), and (iv) all other material terms and conditions of the proposed
Transfer, including a description of any non-cash consideration sufficiently
detailed to permit valuation thereof, and which Offer Notice shall be
accompanied by any written offer from the prospective transferee to purchase
such Common Shares, if available and permitted pursuant to the terms thereof.
The Offer Notice shall constitute an irrevocable offer to ▇▇▇▇▇▇ or his
designee, for the period of time described below, to purchase all (but not less
than all) of such Common Shares upon the same terms specified in the Offer
Notice, subject to Section 4.3(g) and as otherwise set forth in this Section
4.3. ▇▇▇▇▇▇ may elect to purchase all (but not less than all) of the Common
Shares at the Offer Price (or, if the Offer Price includes property other than
cash, the equivalent in cash of such property as determined in accordance with
Section 4.3(g)) and upon the other terms and conditions specified in the Offer
Notice.
(c) For purposes of this Section 4.3, "OFFER PRICE" shall be defined to
mean on a per share or other amount of Common Shares basis (i) in the case of a
third party tender offer or exchange offer, the tender offer or exchange offer
price per Common Share taking into account any provisions thereof with respect
to proration and any proposed second step or "back-end" transaction, (ii) in the
case of a public offering or a Covered Market Sale, the Current Market Value per
Common Share as of the date the election notice of ▇▇▇▇▇▇ hereinafter described
is delivered and (iii) in the case of a privately-negotiated transaction, the
proposed sale price per Common Share.
(d) If ▇▇▇▇▇▇ elects to purchase the offered Common Shares, he shall give
notice (the "ACCEPTANCE NOTICE") to the Transferring Party within 10 Business
Days of his receipt of the Offer Notice of his election (or in the case of a
third party tender offer or exchange offer, not later than five Business Days
prior to the expiration date of such offer, PROVIDED that all conditions to such
offer (other than with respect to the number of Common Shares tendered) shall
have been satisfied or waived and the Offer Notice shall have been provided at
least ten Business Days prior to the expiration date of such offer), which shall
constitute a binding obligation, subject to standard terms and conditions for a
stock purchase contract between two significant stockholders of an issuer
(provided that the Transferring Party shall not be required to make any
representations or warranties regarding the business of the Company), to
purchase the offered Common Shares, which Acceptance Notice shall include the
date set for the closing of such purchase, which date shall be no later than 20
Business Days following the delivery of such Acceptance Notice, or, if later,
five Business Days after receipt of all required regulatory approvals; PROVIDED
that the closing shall only be delayed pending receipt of required regulatory
approvals if (i) ▇▇▇▇▇▇ is using reasonable efforts to obtain the required
regulatory approvals, (ii) there is a reasonable prospect of receiving such
regulatory approvals and (iii) if such closing is
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delayed more than 90 days after the date of the Acceptance Notice, then ▇▇▇▇▇▇
agrees to pay interest at the Reference Rate to the Transferring Party from such
date to the closing date. Notwithstanding the foregoing, such time periods shall
not be deemed to commence with respect to any purported notice that does not
comply in all material respects with the requirements of this Section 4.3(d).
▇▇▇▇▇▇ may assign its rights to purchase under this Section 4.3 to any Person
who is a Permitted Designee.
(e) Subject to Section 4.3(f) in the case of a Covered Market Sale, if
▇▇▇▇▇▇ does not respond to the Offer Notice within the required response time
period or elects not to purchase the offered Common Shares, the Transferring
Party shall be free to complete the proposed Transfer (to the same proposed
transferee, in the case of privately-negotiated transaction) on terms no less
favorable to the Transferring Party or its Affiliate, as the case may be, than
those set forth in the Offer Notice, PROVIDED that (x) such Transfer is closed
within (I) 90 days after the latest of (A) the expiration of the foregoing
required response time periods, or (B) the receipt by the Transferring Party of
the foregoing Acceptance Notice or, in the case of (A) or (B), if later, five
Business Days following receipt of all required regulatory approvals; PROVIDED
that the closing shall only be delayed pending receipt of required regulatory
approvals if (i) the Transferring Stockholder is using reasonable efforts to
obtain the required regulatory approvals and (ii) there is a reasonable prospect
of receiving such regulatory approvals or, (II) in the case of a public
offering, within 20 days of the declaration by the Commission of the
effectiveness of a registration statement filed with the Commission pursuant to
this Agreement, and (y) the price at which the Common Shares are transferred
must be equal to or higher than the Offer Price (except in the case of a public
offering, in which case the price at which the Common Shares are sold (before
deducting underwriting discounts and commissions) shall be equal to at least 90%
of the Offer Price).
(f) If ▇▇▇▇▇▇ does not respond to the Offer Notice with respect to a
Covered Market Sale within the required response time period or elects not to
purchase the offered Common Shares, the Transferring Party shall be free to
complete the proposed Covered Market Sale in one or more transactions during the
90-day period commencing on the latest of (i) the expiration of the required
response time period described in Section 4.3(d) or (ii) receipt by the
Transferring Party of the election notice described in Section 4.3(d), PROVIDED
that the price at which each Common Share is transferred (excluding brokerage
commissions) shall be at least equal to 90% of the Offer Price.
(g) If (i) the consideration specified in the Offer Notice consists of, or
includes, consideration other than cash or a publicly traded security for which
a closing market price is published for each Business Day, or (ii) any property
other than Common Shares is proposed to be transferred in connection with the
transaction to which the Offer Notice relates, then the price payable by ▇▇▇▇▇▇
under this Section 4.3 for the Common Shares being transferred shall be equal to
the Fair Market Value of such consideration which shall be determined in the
manner set forth in Section 4.3(h). Notwithstanding anything to the contrary
contained in this Section 4.3, the time periods applicable to an election by
▇▇▇▇▇▇ to purchase the offered securities set forth in Section 4.3(a) shall not
be deemed to commence until the Fair Market Value has been determined, PROVIDED
that, in the case of a third party tender offer or exchange offer, in no event
shall any such election be permitted later than five Business Days prior to the
latest time by which Common Shares shall be tendered in order to be accepted
pursuant to such offer or to
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qualify for any proration applicable to such offer if all conditions to such
offer (other than the number of shares tendered) have been satisfied or waived.
Each of ▇▇▇▇▇▇ and Universal agrees to use its best efforts to cause the Fair
Market Value to be determined as promptly as practicable but in no event later
than 10 Business Days after the receipt by ▇▇▇▇▇▇ of the Offer Notice.
(h) Promptly upon receipt by the Transferring Party of the Acceptance
Notice, each of Universal and ▇▇▇▇▇▇ shall select an Independent Investment
Banking Firm each of which shall promptly make a determination (each such
determination, an "APPRAISAL") of the Fair Market Value of the Transferring
Party's Equity. If the higher of such Appraisals is less than or equal to 110%
of the lower of such Appraisals, then the Fair Market Value shall be equal to
the average of such Appraisals. If the higher of such Appraisals is greater than
110% of the lower of such Appraisals, then a third Independent Investment
Banking Firm (which shall be an Independent Investment Banking Firm that shall
not have been engaged by the Company, Universal or ▇▇▇▇▇▇ for the three years
prior to the date of such selection) shall be selected by the first two
Independent Investment Banking Firms, which third Independent Investment Banking
Firm shall promptly make a determination of the Fair Market Value. The Fair
Market Value shall equal the average of the two of such three Appraisals closest
in value (or if there are no such two, then of all three Appraisals).
SECTION 4.4. RIGHT OF FIRST REFUSAL BETWEEN LIBERTY AND ▇▇▇▇▇▇. (a) Any
Transfer of Common Shares by a member of the Liberty Stockholder Group or a
member of the ▇▇▇▇▇▇ Stockholder Group (the "L/D TRANSFERRING PARTY") will be
subject to the right of first refusal provisions of this Section 4.4, other than
a Transfer by a member of the Liberty Stockholder Group or the ▇▇▇▇▇▇
Stockholder Group permitted by Section 4.1(a) hereof, a Transfer that is a sale
described in Section 4.2(e)(i) or a Market Sale that is not a Covered Market
Sale.
(b) Prior to effecting any Transfer referred to in Section 4.4(a), the L/D
Transferring Party shall deliver written notice (the "L/D OFFER NOTICE") to
▇▇▇▇▇▇, if the L/D Transferring Party is a member of the Liberty Stockholder
Group, or to Liberty, if the L/D Transferring Party is a member of the ▇▇▇▇▇▇
Stockholder Group (the recipient of such notice, the "L/D OTHER PARTY"), which
Offer Notice shall specify (i) the Person to whom the L/D Transferring Party
proposes to make such Transfer or the proposed manner of Transfer in the case of
a public offering or a Covered Market Sale, (ii) the number or amount and
description of the Common Shares to be Transferred, (iii) except in the case of
a public offering or a Covered Market Sale, the L/D Offer Price (as defined
below), and (iv) all other material terms and conditions of the proposed
Transfer, including a description of any non-cash consideration sufficiently
detailed to permit valuation thereof, and which Offer Notice shall be
accompanied by any written offer from the prospective transferee to purchase
such Common Shares, if available and permitted pursuant to the terms thereof.
The L/D Offer Notice shall constitute an irrevocable offer to the L/D Other
Party, for the period of time described below, to purchase all (but not less
than all) of such Common Shares.
(c) For purposes of this Section 4.4, "L/D OFFER PRICE" shall mean the
purchase price per Common Share to be paid to the L/D Transferring Party in the
proposed transaction (as it may be adjusted in order to determine the net
economic value thereof). In the event that the consideration payable to the L/D
Transferring Party in a proposed transaction consists of securities, the
purchase price per share shall equal the fair market value of such securities
divided
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by the number of Common Shares to be Transferred. Such fair market value
shall be the market price of any publicly traded security and, if such security
is not publicly traded, the fair market value shall be equal to the Fair Market
Value (calculated in accordance with the method described in Section 4.3(h)) of
such security.
(d) If the L/D Other Party elects to purchase the offered Common Shares, it
shall give notice to the L/D Transferring Party within ten Business Days after
receipt of the L/D Offer Notice of its election (or in the case of a third party
tender offer or exchange offer, not later than five Business Days prior to the
expiration date of such offer, PROVIDED that all conditions to such offer (other
than with respect to the number of Common Shares tendered) shall have been
satisfied or waived and the L/D Offer Notice shall have been provided at least
ten Business Days prior to the expiration date of such offer), which shall
constitute a binding obligation, subject to standard terms and conditions for a
stock purchase contract between two significant stockholders of an issuer
(provided that the L/D Transferring Party shall not be required to make any
representations or warranties regarding the business of the Company), to
purchase the offered Common Shares, which notice shall include the date set for
the closing of such purchase, which date shall be no later than 20 Business Days
following the delivery of such election notice, or, if later, five Business Days
after receipt of all required regulatory approvals; PROVIDED that the closing
shall only be delayed pending receipt of required regulatory approvals if (i)
the L/D Other Party is using reasonable efforts to obtain the required
regulatory approvals, (ii) there is a reasonable prospect of receiving such
regulatory approvals and (iii) if such closing is delayed more than 90 days
after the date of the L/D Other Party's notice of election to purchase, then the
L/D Other Party agrees to pay interest at the Reference Rate to the L/D
Transferring Party from such date to the closing date. Notwithstanding the
foregoing, such time periods shall not be deemed to commence with respect to any
purported notice that does not comply in all material respects with the
requirements of this Section 4.4(d). Liberty and ▇▇▇▇▇▇ may assign their
respective rights to purchase under this Section 4.4 to any Person who is a
Permitted Designee.
(e) Subject to Section 4.4(f) in the case of a Covered Market Sale, if the
L/D Other Stockholder does not respond to the L/D Offer Notice within the
required response time period or elects not to purchase the offered Common
Shares, the L/D Transferring Party shall be free to complete the proposed
Transfer (to the same proposed transferee, in the case of a privately-negotiated
transaction) on terms no less favorable to the L/D Transferring Party or its
Affiliate, as the case may be, than those set forth in the L/D Offer Notice,
provided that (x) such Transfer is closed within (I) 90 days after the latest of
(A) the expiration of the foregoing required response time periods, or (B) the
receipt by the L/D Transferring Party of the foregoing election notice or, in
the case of (A) or (B), if later, five Business Days following receipt of all
required regulatory approvals; PROVIDED that the closing shall only be delayed
pending receipt of required regulatory approvals if (i) the L/D Transferring
Stockholder is using reasonable efforts to obtain the required regulatory
approvals and (ii) there is a reasonable prospect of receiving such regulatory
approvals, or (II) in the case of a public offering, within 20 days of the
declaration by the Commission of the effectiveness of a registration statement
filed with the Commission pursuant to this Agreement, and (y) the price at which
the Common Shares are transferred must be equal to or higher than the L/D Offer
Price (except in the case of a public offering, in which case the price at which
the Common Shares are sold (before deducting underwriting discounts and
commissions) shall be equal to at least 90% of the L/D Offer Price).
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(f) If the L/D Other Stockholder does not respond to the L/D Offer Notice
with respect to a Covered Market Sale within the required response time period
or elects not to purchase the offered Common Shares, the L/D Transferring Party
shall be free to complete the proposed Covered Market Sale in one or more
transactions during the 90-day period commencing on the latest of (i) the
expiration of the required response time period described in Section 4.4(d) or
(ii) receipt by the L/D Transferring Party of the election notice described in
Section 4.4(d), PROVIDED that the price at which each Common Share is
transferred (excluding brokerage commissions) shall be at least equal to 90% of
the L/D Offer Price.
(g) If the L/D Other Party elects to exercise its right of first refusal
under this Section 4.4, the L/D Other Party shall pay the L/D Offer Price in
cash (by wire transfer of immediately available funds) or by the delivery of
marketable securities having an aggregate fair market value equal to the L/D
Offer Price, PROVIDED, that if the securities to be so delivered by the L/D
Other Party would not, in the L/D Transferring Party's possession, have at least
the same general degree of liquidity as the securities the L/D Transferring
Party was to receive in such proposed transaction (determined by reference to
the L/D Transferring Party's ability to dispose of such securities (including,
without limitation, the trading volume of such securities and the L/D Other
Party's percentage ownership of the issuer of such securities)), then the L/D
Other Party shall be required to deliver securities having an appraised value
(calculated in accordance with the method described in Section 4.3(h)) equal to
the L/D Offer Price. If the L/D Other Party delivers securities in payment of
the L/D Offer Price, it will cause the issuer of such securities to provide the
L/D Transferring Party with customary registration rights related thereto (if,
in the other transaction, the L/D Transferring Party would have received cash,
cash equivalents, registered securities or registration rights). Each of ▇▇▇▇▇▇
and Liberty agrees to use his or its commercially reasonable efforts (but not to
expend any money) to preserve for the other Stockholder, to the extent possible,
the tax benefits available to it in such proposed transaction, and to otherwise
seek to structure such transaction in the most tax efficient method available.
Notwithstanding the foregoing, if ▇▇▇▇▇▇ pays the L/D Offer Price in securities,
such securities must be securities that Liberty is permitted to own under
applicable FCC Regulations.
(h) Notwithstanding anything to the contrary contained in this Section 4.4,
the time periods applicable to an election by the L/D Other Party to purchase
the offered securities shall not be deemed to commence until the fair market
value has been determined, provided that, in the case of a third party tender
offer or exchange offer, in no event shall any such election be permitted later
than five Business Days prior to the latest time by which Common Shares shall be
tendered in such offer if all conditions to such offer (other than the number of
shares tendered) have been satisfied or waived. Each of ▇▇▇▇▇▇ and Liberty
agrees to use his and its best efforts to cause the fair market value to be
determined as promptly as practicable, but in no event later than ten Business
Days after the receipt by the L/D Other Stockholder of the L/D Offer Notice.
SECTION 4.5. (a) Subject to the right of first refusal of ▇▇▇▇▇▇ pursuant
to Section 4.3, any direct or indirect Transfer of Common Shares by a member of
the Vivendi Stockholder Group with respect to which ▇▇▇▇▇▇ would have a right of
first refusal pursuant to Section 4.3 will be subject to a right of first
refusal by Liberty on the same terms and conditions as are applicable to ▇▇▇▇▇▇
pursuant to Section 4.3, mutatis mutandis.
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(b) Liberty acknowledges and agrees that its right of first refusal
pursuant to this Section 4.5 is subject to the right of first refusal by ▇▇▇▇▇▇
pursuant to Section 4.3.
SECTION 4.6. TRANSFERS OF CLASS B SHARES. (a) Subject to the rights of
first refusal pursuant to Sections 4.3, 4.4 and 4.5 and subject to paragraph (c)
below, in the event that any Stockholder or any members of its Stockholders
Group (the "TRANSFERRING STOCKHOLDER") proposes to Transfer any shares of Class
B Common Stock, such Transferring Stockholder shall send a written notice (which
obligation may be satisfied by the delivery of the applicable Offer Notice) (the
"EXCHANGE NOTICE") to ▇▇▇▇▇▇, if the Transferring Stockholder is Liberty,
Universal or a member of their respective Stockholder Groups, or to Liberty, if
the Transferring Stockholder is ▇▇▇▇▇▇, Universal or a member of their
respective Stockholder Groups (the recipient of such notice, the
"NON-TRANSFERRING STOCKHOLDER"), that such Transferring Stockholder intends to
Transfer shares of Class B Common Stock, including the number of such shares
proposed to be Transferred. The Non-Transferring Stockholder(s) shall give
notice to the Transferring Stockholder within 20 days of its receipt of the
Exchange Notice of its or their desire to exchange some or all of such shares of
Class B Common Stock proposed to be Transferred for an equivalent number of
shares of Common Stock. If the Non-Transferring Stockholder(s) desire to
exchange some or all of such shares and to the extent that such shares are not
otherwise Transferred to any Stockholder (or its Permitted Designee) pursuant to
Section 4.3, 4.4 or 4.5, such shares of Class B Common Stock shall be exchanged;
PROVIDED that if the Transferring Stockholder is Universal or a member of its
Stockholder Group, first with ▇▇▇▇▇▇ (to the extent he elects to exchange) and,
second with Liberty (to the extent that Liberty elects to exchange). Except to
the extent necessary to avoid liability under Section 16(b) of the Exchange Act
and subject to applicable law, any such exchange shall be consummated
immediately prior to the consummation of any such Transfer.
(b) If any shares of Class B Common Stock proposed to be Transferred are
not exchanged pursuant to the provisions of paragraph (a) above, prior to any
such Transfer, the Transferring Stockholder shall convert, or cause to be
converted, such shares of Class B Common Stock into shares of Common Stock (or
such other securities of the Company into which such shares are then
convertible).
(c) The provisions of Section 4.6(a) and 4.6(b) shall not be applicable to
any Transfers (i) to a member of such Stockholder's Stockholder Group, (ii)
pursuant to a pledge or grant of a security interest in compliance with clause
(y) of Section 4.1(a), or (iii) from Liberty, ▇▇▇▇▇▇ or their respective
Stockholder Group to the other Stockholder or its or his Stockholder Group
subject to the terms of this Agreement.
SECTION 4.7. TRANSFEREES. (a) Any Permitted Transferee or Permitted
Designee of a Stockholder shall be subject to the terms and conditions of this
Agreement as if such Permitted Transferee or Permitted Designee were Universal
(if Universal or a Permitted Transferee of Universal is the transferor), Liberty
(if Liberty or a Permitted Transferee of Liberty is the transferor) or ▇▇▇▇▇▇
(if ▇▇▇▇▇▇ or a Permitted Transferee of ▇▇▇▇▇▇ is the transferor). Prior to the
initial acquisition of beneficial ownership of any Common Shares by any
Permitted Transferee (or a Permitted Designee), and as a condition thereto, each
Stockholder agrees (i) to cause its respective Permitted Transferees or
Permitted Designees to agree in writing with the other parties hereto to be
bound by the terms and conditions of this Agreement to the extent described
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in the preceding sentence and (ii) that such Stockholder shall remain directly
liable for the performance by its respective Permitted Transferees or Permitted
Designees of all obligations of such Permitted Transferees or Permitted
Designees under this Agreement. Except as otherwise contemplated by this
Agreement (i) each of Universal, ▇▇▇▇▇▇ and Liberty agrees not to cause or
permit any of its respective Permitted Transferees to cease to qualify as a
member of such Stockholder's Stockholders Group so long as such Permitted
Transferee beneficially owns any Common Shares, and if any such Permitted
Transferee shall cease to be so qualified, such Permitted Transferee shall
automatically upon the occurrence of such event cease to be a "Permitted
Transferee" for any purpose under this Agreement and (ii) each Stockholder
agrees not to Transfer any Common Shares to any Affiliate other than a Permitted
Transferee of such Stockholder.
(b) No Third Party Transferee shall have any rights or obligations under
this Agreement, except:
(i) in the case of a Third Party Transferee of Liberty (or any member
of the Liberty Stockholder Group) who acquires shares of Common Stock and
who (together with its Affiliates) would not be a Public Stockholder, such
Third Party Transferee shall be subject to the obligations of Liberty (but
subject to the other terms and conditions of this Agreement) pursuant to
Section 3.1(a) (but shall not have the right to consent to any Contingent
Matters), Section 3.1(b), Section 3.1(c), Section 3.2, Section 3.5, as
applicable, this Section 4.7 and Article VI; PROVIDED that such Third Party
Transferee shall only be subject to such obligations for so long as it
would not be a Public Stockholder;
(ii) in the case of a Third Party Transferee of Universal (or any
member of the Vivendi Stockholder Group) who (together with its Affiliates)
upon consummation of any Transfer would not be a Public Stockholder, such
Third Party Transferee shall be subject to the obligations of Universal
(but subject to the other terms and conditions of this Agreement) pursuant
to Section 3.1(a), Section 3.1(b)(ii), Section 3.1(c), Section 3.2, Section
3.5, as applicable, this Section 4.7 and Article VI; PROVIDED that such
Third Party Transferee shall only be subject to such obligations for so
long as it would not be a Public Stockholder; and
(iii) in the case of a Third Party Transferee of ▇▇▇▇▇▇ (or any member
of the ▇▇▇▇▇▇ Stockholder Group) who (together with its Affiliates) upon
consummation of any Transfer would not be a Public Stockholder, such Third
Party Transferee shall be subject to the obligations of ▇▇▇▇▇▇ (but subject
to the other terms and conditions of this Agreement) pursuant to Section
3.1(a) (but shall not have the right to consent to any Contingent Matters),
3.1(b), Section 3.1(c), Section 3.5, as applicable, this Section 4.7 and
Article VI; PROVIDED that such Third Party Transferee shall only be subject
to such obligations for so long as it would not be a Public Stockholder.
(c) Prior to the consummation of a Transfer described in Section 4.7(b) to
the extent rights and obligations are to be assigned, and as a condition
thereto, the applicable Third Party Transferee shall agree in writing with the
other parties hereto to be bound by the terms and conditions of this Agreement
to the extent described in Section 4.7(b). To the extent the Third
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Party Transferee is not an "ULTIMATE PARENT ENTITY" (as defined in the HSR Act),
the ultimate parent entity of such Third Party Transferee shall agree in writing
to be directly liable for the performance of the Third Party Transferee to the
same extent Universal or Liberty would be liable for their respective Permitted
Transferees.
SECTION 4.8. NOTICE OF TRANSFER. To the extent any Stockholder and its
Permitted Transferees shall Transfer any Common Shares, such Stockholder shall,
within three Business Days following consummation of such Transfer, deliver
notice thereof to the Company and the other Stockholders, PROVIDED, HOWEVER,
that no such notice shall be required to be delivered unless the aggregate
Common Shares transferred by such Stockholder and its Permitted Transferees
since the date of the last notice delivered by such Stockholder pursuant to this
Section 4.8 exceeds 1% of the outstanding Common Shares.
SECTION 4.9. COMPLIANCE WITH TRANSFER PROVISIONS. Any Transfer or attempted
Transfer of Common Shares in violation of any provision of this Agreement shall
be void.
ARTICLE V
BDTV ENTITY ARRANGEMENTS
SECTION 5.1. MANAGEMENT. The business and affairs of each BDTV Entity will
be managed by a Board of Directors elected by the holders of a majority of the
voting equity interests in such BDTV Entity. Notwithstanding the foregoing, the
taking of any action by a BDTV Entity with respect to (i) to the extent
permitted by applicable law, any matter that would have constituted a
Fundamental Change under the 1997 Stockholders Agreement (as applied to such
BDTV Entity, MUTATIS MUTANDIS) or (ii) any acquisition or disposition (including
pledges) of any Common Shares held by such BDTV Entity, in either case, will
require the unanimous approval of the holders of all voting and non-voting
equity interests in such BDTV Entity.
SECTION 5.2. TREATMENT OF EXCHANGE SHARES. In the event that a holder of
Exchange Shares would be entitled to hold directly shares of Class B Common
Stock issuable upon an exchange of shares of Liberty Surviving Class B Stock but
for the limitation imposed by the FCC Regulations relating to a person's
aggregate voting power in the Company, and if such person would, under the FCC
Regulations, be permitted to hold directly a number of shares of Common Stock
equal to the number of shares of Class B Common Stock so issuable, then in
connection with such exchange, such holder will be required to offer to exchange
such shares of Class B Common Stock so receivable by it for Common Stock owned
by the ▇▇▇▇▇▇ Stockholder Group and, if ▇▇▇▇▇▇ does not accept such offer to
exchange, or if such exchange with the ▇▇▇▇▇▇ Stockholder Group cannot be
accomplished on a tax-free basis (and the exchange of such Exchange Shares for
Common Shares would not otherwise be taxable), then such holder shall be
entitled to exchange such Exchange Shares for shares of Class B Common Stock and
thereafter convert such shares of Class B Common Stock into shares of Common
Stock.
Nothing in this Agreement shall obligate Liberty HSN to contribute any
Common Shares received pursuant to the Investment Agreement or the Holder
Exchange Agreement to a BDTV Entity.
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SECTION 5.3 CHANGES TO BDTV STRUCTURES. Liberty and ▇▇▇▇▇▇ agree, subject
to applicable law and FCC Regulations, to take such actions as may be reasonably
necessary, including but not limited to amending the certificate of
incorporation of the BDTV Entities, in order to provide Liberty with the ability
to transfer, directly or indirectly, such amounts of Common Shares Liberty is
permitted to sell hereunder.
SECTION 5.4 TRANSFERS OF BDTV INTERESTS. Except as otherwise specifically
provided in this Agreement (including Section 4.1(b)), no transfers or other
dispositions (including pledges), directly or indirectly, of any interest in (a)
any BDTV Limited Entity by Liberty or (b) any BDTV Entity by ▇▇▇▇▇▇ will be
permitted without the consent of the other; provided, PROVIDED (i) Liberty shall
be entitled to transfer all or part of its interest in a BDTV Entity to members
of the Liberty Stockholder Group, (ii) at such time Liberty becomes the owner of
any voting securities of any BDTV Limited Entity, such BDTV Limited Entity shall
be deemed to be a BDTV Unrestricted Entity, and (iii) in connection with any
sale by ▇▇▇▇▇▇ entitling Liberty to a right pursuant to Section 4.2, Liberty and
▇▇▇▇▇▇ shall take such reasonable action as may be required in order for such
interest in a BDTV Limited Entity to be sold in any such transaction. Without
the prior written consent of Liberty, ▇▇▇▇▇▇ shall not Transfer any interest in
a BDTV Entity (other than to Liberty or, subject to Liberty's reasonable
consent, a member of the ▇▇▇▇▇▇ Stockholder Group).
For purposes of determining whether Liberty is permitted to transfer the
Common Shares held by a BDTV Unrestricted Entity, (i) such BDTV Unrestricted
Entity shall be deemed to be a member of the Liberty Stockholder Group and the
restrictions on transfers of interests in BDTV Entities shall not apply to
Liberty (subject, however, to the other restrictions on transfer of Common
Shares set forth herein, including the Right of First Refusal) and (ii) in
connection with any proposed sale by Liberty HSN of the Common Shares held by a
BDTV Entity (or its equity interest in such BDTV Entity), Liberty shall be
entitled to purchase ▇▇▇▇▇▇'▇ entire interest in such BDTV Entity for an amount
in cash equal to the ▇▇▇▇▇▇ Interest Purchase Price or, at its election, require
▇▇▇▇▇▇ to sell his interest in such BDTV Entity to any such transferee for a pro
rata portion of the consideration to be paid by the applicable transferee in
such transaction.
At such time as (i) the CEO Termination Date has occurred or ▇▇▇▇▇▇
becomes Disabled or (ii) the ▇▇▇▇▇▇ Stockholder Group ceases to own its Eligible
Stockholder Amount of Common Shares, ▇▇▇▇▇▇ shall be required to sell his entire
interest in the BDTV Entities to Liberty (or Liberty's designee) at a price
equal to the ▇▇▇▇▇▇ Interest Purchase Price.
ARTICLE VI
MISCELLANEOUS
SECTION 6.1 CONFLICTING AGREEMENTS. Each of the Stockholders represents
and warrants that such party has not granted and is not a party to any proxy,
voting trust or other agreement that is inconsistent with or conflicts with any
provision of this Agreement.
SECTION 6.2 DURATION OF AGREEMENT. Except as otherwise provided in this
Agreement, the rights and obligations of a Stockholder under this Agreement
shall terminate as follows:
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(a) Universal shall cease to be entitled to exercise any rights and
shall cease to have any obligations under this Agreement as of the date
that it ceases to have the right under the Governance Agreement to
designate any directors to the Board (the "UNIVERSAL TERMINATION DATE").
(b) Each of Liberty and ▇▇▇▇▇▇ shall cease to be entitled to exercise
any rights and shall cease to have any obligations under this Agreement as
of the date that its Stockholder Group collectively ceases to own its
Eligible Stockholder Amount of Common Shares; PROVIDED that Liberty shall
cease to be entitled to exercise any rights and shall cease to have any
obligations under Section 4.2 at such time as the Liberty Stockholder Group
ceases to beneficially own at least 5% of the outstanding Common Shares
(the "LIBERTY TERMINATION DATE").
(c) ▇▇▇▇▇▇ and each member of his Stockholder Group shall cease to be
entitled to exercise any rights under this Agreement if the CEO Termination
Date has occurred or ▇▇▇▇▇▇ has become Disabled (the "▇▇▇▇▇▇ TERMINATION
DATE").
In addition, at such time as the CEO Termination Date has occurred or
▇▇▇▇▇▇ has become Disabled, neither the ▇▇▇▇▇▇ Stockholder Group nor the Liberty
Stockholder Group shall have any obligation under this Agreement with respect to
the matters covered under Sections 3.4, 4.1 and 4.4. The obligations under
Section 3.1(d) terminate upon termination of the Transaction Agreement.
SECTION 6.3 FURTHER ASSURANCES. At any time or from time to time after the
date hereof, the parties agree to cooperate with each other, and at the request
of any other party, to execute and deliver any further instruments or documents
and to take all such further action as the other party may reasonably request in
order to evidence or effectuate the consummation of the transactions
contemplated hereby and to otherwise carry out the intent of the parties
hereunder.
SECTION 6.4 AMENDMENT AND WAIVER. Except as otherwise provided herein, no
modification, amendment or waiver of any provision of this Agreement shall be
effective against any Stockholder unless such modification, amendment or waiver
is approved in writing by each Stockholder; provided that with respect to any
provision containing an agreement between only two Stockholders or pursuant to
which only two Stockholders have rights thereunder, such provision may be
modified or waived by approval in writing by such Stockholders, without the
consent of the third Stockholder unless such modification or waiver adversely
affects the rights of such third Stockholder as provided under this Agreement or
the Governance Agreement. The failure of any party to enforce any of the
provisions of this Agreement shall in no way be construed as a waiver of such
provisions and shall not affect the right of such party thereafter to enforce
each and every provision of this Agreement in accordance with its terms.
SECTION 6.5 SEVERABILITY. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability shall not affect
any other provision or any other jurisdiction, but this Agreement shall be
reformed,
-25-
construed and enforced in such jurisdiction as if such invalid, illegal or
unenforceable provision had never been contained herein.
SECTION 6.6 EFFECTIVE DATE. Other than with respect to Section 3.1(d) which
shall be effective as of the date hereof, this Agreement shall become effective
immediately upon the Closing.
SECTION 6.7 ENTIRE AGREEMENT. Except as otherwise expressly set forth
herein, this document and the Transaction Documents embody the complete
agreement and understanding among the parties hereto with respect to the subject
matter hereof and supersede and preempt any prior understandings, agreements or
representations by or among the parties, written or oral, that may have related
to the subject matter hereof in any way. Without limiting the generality of the
foregoing, to the extent that any of the terms hereof are inconsistent with the
rights or obligations of any Stockholder under any other agreement with any
other Stockholder, the terms of this Agreement shall govern. Upon the Closing,
the 1997 Stockholders Agreement shall terminate and shall be superseded by this
Agreement.
SECTION 6.8 SUCCESSORS AND ASSIGNS. Neither this Agreement nor any of the
rights or obligations under this Agreement shall be assigned, in whole or in
part (except by operation of law pursuant to a merger whose purpose is not to
avoid the provisions of this Agreement), by any party without the prior written
consent of the other parties hereto. Subject to the foregoing, this Agreement
shall bind and inure to the benefit of and be enforceable by the parties hereto
and their respective successors and assigns.
SECTION 6.9 COUNTERPARTS. This Agreement may be executed in separate
counterparts each of which shall be an original and all of which taken together
shall constitute one and the same agreement.
SECTION 6.10 LIABILITIES UNDER FEDERAL SECURITIES LAWS. The exercise by any
Stockholder (or its Affiliates or Stockholder Group, if applicable) (and
including, in the case of the Liberty Stockholder Group, its exercise of the
preemptive rights under Article III of the Governance Agreement or the rights
relating to the Holder Exchange Agreement) of any rights under this Agreement
shall be subject to such reasonable delay as may be required to prevent any
Stockholder or its respective Stockholder Group from incurring any liability
under the federal securities laws and the parties agree to cooperate in good
faith in respect thereof.
SECTION 6.11 REMEDIES. (a) Each party hereto acknowledges that money
damages would not be an adequate remedy in the event that any of the covenants
or agreements in this Agreement are not performed in accordance with its terms,
and it is therefore agreed that in addition to and without limiting any other
remedy or right it may have, the non-breaching party will have the right to an
injunction, temporary restraining order or other equitable relief in any court
of competent jurisdiction enjoining any such breach and enforcing specifically
the terms and provisions hereof.
(b) All rights, powers and remedies provided under this Agreement or
otherwise available in respect hereof at law or in equity shall be cumulative
and not alternative, and the
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exercise or beginning of the exercise of any thereof by any party shall not
preclude the simultaneous or later exercise of any other such right, power or
remedy by such party.
SECTION 6.12 NOTICES. Any notice, request, claim, demand or other
communication under this Agreement shall be in writing, shall be either
personally delivered, delivered by facsimile transmission, or sent by reputable
overnight courier service (charges prepaid) to the address for such Person set
forth below or such other address as the recipient party has specified by prior
written notice to the other parties hereto and shall be deemed to have been
given hereunder when receipt is acknowledged for personal delivery or facsimile
transmission or one day after deposit with a reputable overnight courier
service.
If to Vivendi and/or Universal:
Vivendi Universal, S.A.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇-▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ III
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
and
Universal Studios, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Cravath, Swaine & ▇▇▇▇▇
Worldwide Plaza
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to Liberty:
Liberty Media Corporation
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: General Counsel
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
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Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇ ▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to ▇▇▇▇▇▇:
c/o USA Networks, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: General Counsel
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Wachtell, Lipton, ▇▇▇▇▇ & ▇▇▇▇
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
SECTION 6.13 ADJUSTMENT OF SHARES NUMBERS. If, after the date of this
Agreement, there is a subdivision, split, stock dividend, combination,
reclassification or similar event with respect to any of the shares of capital
stock referred to in this Agreement, then, in any such event, the numbers and
types of shares of such capital stock referred to in this Agreement shall be
adjusted to the number and types of shares of such capital stock that a holder
of such number of shares of such capital stock would own or be entitled to
receive as a result of such event if such holder had held such number of shares
immediately prior to the record date for, or effectiveness of, such event.
SECTION 6.14 GOVERNING LAW; CONSENT TO JURISDICTION. This Agreement shall
be governed by and construed in accordance with the laws of the State of
Delaware without giving effect to the principles of conflicts of law. Each of
the parties hereto hereby irrevocably and unconditionally consents to submit to
the non-exclusive jurisdiction of the courts of the State of Delaware for any
action, proceeding or investigation in any court or before any governmental
authority ("LITIGATION") arising out of or relating to this Agreement and the
transactions contemplated hereby and further agrees that service of any process,
summons, notice or
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document by U.S. mail to its respective address set forth in this Agreement
shall be effective service of process for any Litigation brought against it in
any such court. Each of the parties hereto hereby irrevocably and
unconditionally waives any objection to the laying of venue of any Litigation
arising out of this Agreement or the transactions contemplated hereby in the
courts of the State of Delaware, and hereby further irrevocably and
unconditionally waives and agrees not to plead or claim in any such court that
any such Litigation brought in any such court has been brought in an
inconvenient forum. Each of the parties irrevocably and unconditionally waives,
to the fullest extent permitted by applicable law, any and all rights to trial
by jury in connection with any Litigation arising out of or relating to this
Agreement or the transactions contemplated hereby.
SECTION 6.15 INTERPRETATION. The table of contents and headings contained
in this Agreement are for convenience only and shall not affect in any way the
meaning or interpretation of this Agreement. Whenever the words "include",
"includes" or "including" are used in this Agreement, they shall be deemed to be
followed by the words "without limitation". Whenever it is necessary for
purposes of this Agreement to determine whether an exchange is tax-free or
taxable, such determination shall be made without regard to any interest imputed
pursuant to Section 483 of the Code.
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IN WITNESS WHEREOF, the parties hereto have executed this Stockholders
Agreement as of the date first written above.
UNIVERSAL STUDIOS, INC.,
By: /s/ Guillaume Hannezo
------------------------------
Name: Guillaume Hannezo
Title: Special Power of Attorney
LIBERTY MEDIA CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇
VIVENDI UNIVERSAL, S.A.
By: /s/ ▇▇▇▇-▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇-▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Chairman and Chief Executive
Officer
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