EXHIBIT 10.1
CONFORMED COPY
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AMENDED AND RESTATED
AGREEMENT AND PLAN OF RESTRUCTURING AND MERGER
AMONG
UNITEDGLOBALCOM, INC.,
NEW UNITEDGLOBALCOM, INC.,
UNITED/NEW UNITED MERGER SUB, INC.,
LIBERTY MEDIA CORPORATION,
LIBERTY MEDIA INTERNATIONAL, INC.,
LIBERTY GLOBAL, INC.
AND
EACH PERSON INDICATED AS A "FOUNDER"
ON THE SIGNATURE PAGES HERETO
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DATED AS OF DECEMBER 31, 2001
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TABLE OF CONTENTS
ARTICLE I DEFINITIONS.........................................................................................2
1.1 Definitions........................................................................................2
1.2 Additional Terms..................................................................................10
ARTICLE II CONTRIBUTIONS, REORGANIZATION AND RELATED TRANSACTIONS.............................................13
2.1 Pre-Closing Restructuring Transactions............................................................13
2.2 Contributions and Restructuring...................................................................14
2.3 Repayment of Indebtedness.........................................................................17
2.4 Certain Adjustments...............................................................................19
2.5 United/New United Merger..........................................................................19
ARTICLE III [RESERVED].........................................................................................22
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF LIBERTY MEDIA, LIBERTY GLOBAL AND LMI............................22
4.1 Organization, Good Standing and Authority.........................................................22
4.2 Power; Authorization and Validity; Consents; No Conflicts.........................................22
4.3 Brokers' and Finders' Fees........................................................................23
4.4 Legal Proceedings.................................................................................23
4.5 Ownership of United Class B Stock.................................................................23
4.6 [Reserved.].......................................................................................24
4.7 Belmarken Notes...................................................................................24
4.8 [Reserved.].......................................................................................24
4.9 Investment Intent.................................................................................24
4.10 Registration Statement; Proxy Statement...........................................................24
4.11 Liberty UPC Bonds.................................................................................24
ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE FOUNDERS.....................................................24
5.1 Organization, Good Standing and Authority.........................................................25
5.2 Power; Authorization and Validity; Consents; No Conflicts.........................................25
5.3 Founder Newcos....................................................................................26
5.4 Brokers' and Finders' Fees........................................................................27
5.5 Information.......................................................................................27
5.6 Legal Proceedings.................................................................................27
5.7 Ownership of United Class B Stock and New United Class B Stock....................................27
5.8 Investment Intent.................................................................................27
5.9 Registration Statement; Proxy Statement...........................................................27
ARTICLE VI REPRESENTATIONS AND WARRANTIES OF UNITED AND NEW UNITED............................................27
6.1 Representations and Warranties of United..........................................................28
6.2 Representations and Warranties of New United......................................................43
ARTICLE VII CERTAIN COVENANTS OF THE PARTIES...................................................................50
7.1 Conduct of Business in Ordinary Course Pending Closing............................................50
7.2 Stockholders Meeting..............................................................................55
7.3 Proxy Statement; Registration Statement; Other Commission Filings.................................55
7.4 No Solicitation; Acquisition Proposals............................................................56
7.5 Consents and Approvals............................................................................57
7.6 Tax-Free Exchange.................................................................................58
7.7 Stockholders Agreement............................................................................59
7.8 Voting Agreement..................................................................................59
7.9 United/Liberty Agreement..........................................................................59
7.9A New United Covenant Agreement.....................................................................59
7.9B No Waiver Agreement...............................................................................59
7.10 Standstill Agreement..............................................................................59
7.11 Registration Rights Agreement.....................................................................59
7.12 Exchange Agreement................................................................................59
7.13 Listing Application...............................................................................60
7.14 Investigation; Confidentiality....................................................................60
7.15 [Reserved.].......................................................................................61
7.16 [Reserved.].......................................................................................61
7.17 [Reserved.].......................................................................................61
7.18 [Reserved.].......................................................................................61
7.19 [Reserved.].......................................................................................61
7.20 UPC Bonds.........................................................................................61
7.21 Senior Secured Notes..............................................................................61
7.22 Fairness Opinions.................................................................................62
7.23 Interim Stockholder Arrangements..................................................................62
ARTICLE VIII CONDITIONS PRECEDENT TO THE OBLIGATIONS OF EACH PARTY TO CLOSE....................................63
8.1 United Stockholder Approval.......................................................................63
8.2 HSR Act...........................................................................................63
8.3 Consents and Approvals............................................................................63
8.4 Absence of Injunctions............................................................................63
8.5 Fairness Opinions.................................................................................64
8.6 Transaction Documents.............................................................................64
ARTICLE IX CONDITIONS PRECEDENT TO THE OBLIGATIONS OF NEW UNITED TO CLOSE.....................................64
9.1 Representations and Warranties True as of the Closing Date........................................64
9.2 Compliance with this Agreement....................................................................64
9.3 Certificates......................................................................................64
9.4 Opinion of Counsel to the Liberty Parties.........................................................65
ARTICLE X CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE PARTIES TO THE UNITED/NEW UNITED MERGER.............65
10.1 United's Obligation...............................................................................65
10.2 New United's Obligation...........................................................................65
ARTICLE XI CONDITIONS PRECEDENT TO THE OBLIGATION OF THE LIBERTY PARTIES TO CLOSE.............................66
11.1 Representations and Warranties True as of the Closing Date........................................66
11.2 Compliance with this Agreement....................................................................66
11.3 Certificates......................................................................................66
11.4 Opinion of Counsel to United......................................................................67
11.5 [Reserved.].......................................................................................67
11.6 Tax Opinion.......................................................................................67
11.7 [Reserved.].......................................................................................67
11.8 [Reserved.].......................................................................................67
11.9 Indenture.........................................................................................67
11.10 Fee Letter........................................................................................67
11.11 [Reserved.].......................................................................................67
11.12 [Reserved.].......................................................................................67
11.13 [Reserved.].......................................................................................68
ARTICLE XII CONDITIONS PRECEDENT TO THE OBLIGATION OF THE FOUNDERS TO CLOSE....................................68
12.1 Representations and Warranties True as of the Closing Date........................................68
12.2 Compliance with this Agreement....................................................................68
12.3 Certificates......................................................................................68
12.4 [Reserved.].......................................................................................68
12.5 Tax Opinion.......................................................................................69
ARTICLE XIII TAX MATTERS.......................................................................................69
13.1 [Reserved.].......................................................................................69
13.2 [Reserved.].......................................................................................69
13.3 [Reserved.].......................................................................................69
13.4 Transfer Taxes....................................................................................69
13.5 [Reserved.].......................................................................................69
13.6 [Reserved.].......................................................................................69
13.7 [Reserved.].......................................................................................69
13.8 [Reserved.].......................................................................................69
13.9 Restructuring Transaction Indemnity...............................................................69
13.10 Treatment of Indemnity Payments...................................................................70
13.11 Survival..........................................................................................70
ARTICLE XIV CLOSING; CLOSING DATE..............................................................................70
14.1 Closing...........................................................................................70
14.2 Closing Deliveries................................................................................70
ARTICLE XV SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS; INDEMNIFICATION.............................74
15.1 Survival of Representations, Warranties and Covenants.............................................74
15.2 Indemnification by Liberty Party..................................................................74
15.3 Indemnification by Founders.......................................................................75
15.4 Indemnification by New United and United..........................................................75
15.5 Defense of Action.................................................................................76
15.6 Limitations on Indemnification for Breach of Representations and Warranties.......................77
15.7 Insurance Proceeds................................................................................78
15.8 Exclusive Monetary Remedy; No Consequential Damages...............................................78
ARTICLE XVI TERMINATION OF AGREEMENT...........................................................................78
16.1 Termination.......................................................................................78
16.2 Limitation of Liabilities in the Event of Termination.............................................79
16.3 Stockholder Arrangements..........................................................................79
ARTICLE XVII MISCELLANEOUS.....................................................................................80
17.1 Expenses..........................................................................................80
17.2 Entire Agreement; Release.........................................................................80
17.3 Governing Law; Waiver of Jury Trial, Etc..........................................................81
17.4 Headings..........................................................................................81
17.5 Notices...........................................................................................81
17.6 Separability......................................................................................83
17.7 Amendment; Waiver.................................................................................83
17.8 Publicity.........................................................................................83
17.9 Assignment and Binding Effect.....................................................................83
17.10 No Benefit to Others..............................................................................83
17.11 Counterparts......................................................................................83
17.12 Interpretation....................................................................................83
17.13 Rules of Construction.............................................................................84
AMENDED AND RESTATED
AGREEMENT AND PLAN OF RESTRUCTURING AND MERGER
This AMENDED AND RESTATED
AGREEMENT AND PLAN OF RESTRUCTURING
AND MERGER (this "AGREEMENT") is entered into as of December 31, 2001 (the
"AMENDMENT DATE") among UnitedGlobalCom, Inc., a
Delaware corporation
("UNITED"), New UnitedGlobalCom, Inc., a
Delaware corporation ("NEW UNITED"),
United/New United Merger Sub, Inc., a
Delaware corporation and a wholly owned
subsidiary of New United ("UNITED/NEW UNITED MERGER SUB"), Liberty Media
Corporation, a
Delaware corporation ("LIBERTY MEDIA"), Liberty Media
International, Inc., a
Delaware corporation ("LMI"), Liberty Global, Inc., a
Delaware corporation ("LIBERTY GLOBAL") and each Person indicated as a "Founder"
on the signature pages hereto (each such Person, a "FOUNDER"). Capitalized terms
used and not otherwise defined in this Agreement have the respective meanings
ascribed thereto in Section 1.1.
W I T N E S S E T H :
WHEREAS, United, Liberty Media and LMI have entered into an
Agreement and Plan of Restructuring and Merger, dated as of December 3, 2001
(the "ORIGINAL AGREEMENT"), setting forth the terms and conditions upon which,
among other things, the following transactions will occur as part of the same
plan of restructuring: (a) Liberty Media will contribute or cause to be
contributed to New United all of the shares of Class B Common Stock, par value
US $0.01 per share, of United ("UNITED CLASS B STOCK") owned by Liberty Media
and its wholly owned Subsidiaries and some of the shares of Class A Common
Stock, par value US $0.01 per share, of United ("UNITED CLASS A STOCK and,
together with the United Class B Stock, "UNITED COMMON STOCK") owned by Liberty
Media and its wholly owned Subsidiaries in exchange for an equal number of
shares of Class C Common Stock, par value US $0.01 per share, of New United
("NEW UNITED CLASS C STOCK"), (b) the Founders will contribute all of the shares
of United Class B Stock owned by them to their respective Founder Newco (as
defined herein) and cause each Founder Newco to merge into New United in
exchange for a number of shares of Class B Common Stock, par value US $0.01 per
share, of New United ("NEW UNITED CLASS B STOCK") equal to the number of shares
of United's common stock then owned by such Founder Newco, (c) United/New United
Merger Sub will merge with and into United, with United being the surviving
entity in such merger and the outstanding stock of United being converted into
stock of New United or stock of the surviving entity in such merger or
cancelled, as more fully described herein, and (d) Liberty Media will contribute
or cause to be contributed certain assets and liabilities of its subsidiary,
Liberty-Belmarken, Inc., a
Delaware corporation ("LIBERTY SUB"), all of the
Liberty UPC Bonds (as defined herein) and cash to New United in exchange for
shares of New United Class C Stock; and
WHEREAS, the parties have decided to amend and restate the
Original Agreement in its entirety in order to (a) provide that the holders of
all of the issued and outstanding shares of United Preferred Stock will receive
merger consideration consisting of shares of New United Class A Stock, (b) amend
the Liberty UPC Bond Cost as of November 30,
2001 as set forth on SCHEDULE 1.1 attached to this Agreement, and (c) make
certain other amendments to the Agreement, as more fully set forth herein; and
WHEREAS, concurrent with the execution and delivery of the
Original Agreement, the Senior Notes Agreements were entered into and, in
accordance therewith, (a) Liberty acquired from United 11,976,048 shares of
United Class A Stock for US $20,000,000 in cash (the "NOTE SHARES") and an
additional 14,970 shares of United Class A Stock for US $25,000 in cash, (b)
United acquired all of the Senior Notes in exchange for US $20,000,000 in
cash, (c) United paid an aggregate of US $241,309,065.79 (the "MAKE WHOLE
PAYMENT") to the holders of the Senior Notes (collectively, the "MAKE WHOLE
BANKERS") in satisfaction in full of its obligations under the Fee Letter,
and (d) to facilitate the foregoing, Liberty and Liberty Argentina, Inc., a
Delaware corporation and a wholly owned Subsidiary of Liberty ("LIBERTY
ARGENTINA"), paid a total of US $241,309,065.79 to UIPI and United as
prepayment in full of the indebtedness evidenced by the $200,000,000 Note and
as a partial prepayment of the indebtedness evidenced by the $310,000,000
Notes;
NOW, THEREFORE, in consideration of the mutual promises,
covenants and agreements set forth herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto do hereby agree as follows:
ARTICLE I
DEFINITIONS
1.1 DEFINITIONS. For purposes of this Agreement, the following terms
shall have the following meanings:
"$200,000,000 NOTE" means the promissory note, dated
December 8, 2000, in the principal amount of US $200 million payable by
Liberty Media to United, which promissory note was canceled and returned to
Liberty Media upon the prepayment on the Original Agreement Date of the
indebtedness evidenced thereby.
"$310,000,000 NOTES" means the promissory note, dated
December 27, 2000, in the original principal amount of US $42,405,760 (US
$22,411,979.02 of which principal amount, together with all accrued and
unpaid interest on the entire principal amount of such promissory note
through December 2, 2001, was paid by Liberty Argentina on December 3, 2001)
payable by Liberty Argentina to United, which promissory note is now held by
UIPI, the promissory note, dated February 5, 2001, in the principal amount of
US $33,827,447 payable by Liberty Argentina to United, which promissory note
is now held by UIPI, and the promissory note, dated April 30, 2001, in the
principal amount of US $233,766,793 payable by Liberty Argentina to UIPI.
"ADJUSTMENT" means the deemed increase in a Tax, determined
using the assumptions set forth in the next sentence, resulting from an
adjustment made with respect to any amount reflected or required to be
reflected on any Tax Return relating to such Tax. For purposes of determining
such deemed increase in Tax, the following assumptions will be used: (a) in
the case of any Income Tax, the highest marginal Tax rate or, in the case of
any other Tax,
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the highest applicable Tax rate, in each case in effect with respect to that
Tax for the Taxable period or any portion of the Taxable period to which the
adjustment relates; and (b) such determination shall be made without regard
to whether any actual increase in such Tax will in fact be realized with
respect to the Tax Return to which such adjustment relates (as a result, for
example, of losses, credits or other offsets against Tax).
"AFFILIATE" of a Person shall mean any Person that
directly, or indirectly through one or more intermediaries, Controls, is
Controlled by, or is under common Control with, the Person in question.
Notwithstanding anything in the foregoing to the contrary, under no
circumstances will New United, United or any of their respective Subsidiaries
be considered an Affiliate of Liberty or LMI.
"AFTER-TAX BASIS" shall mean an amount that, after
subtraction of the aggregate additional Taxes incurred or to be incurred by
the party receiving the indemnification payment, is equal to the amount of
the correlative Adjustment. For purposes of determining such additional Taxes
incurred or to be incurred, the following assumptions will be used: (a) in
the case of any Income Tax, the highest marginal Tax rate or, in the case of
any other Tax, the highest applicable Tax rate, in each case in effect with
respect to that Tax for the Taxable period or any portion of the Taxable
period to which the indemnification payment relates; and (b) such
determination shall be made without regard to whether any actual additional
Taxes will in fact be realized with respect to the Tax Return to which such
payment relates (as a result, for example, of losses, credits or other
offsets against Tax).
"AUGUST 1999 AGREEMENT" means the letter agreement, dated
August 30, 1999, among UPC, United and Liberty Media, including the exhibits
thereto.
"AVAILABLE NEW UNITED COMMISSION FILINGS" means the
Registration Statement.
"AVERAGE MARKET PRICE" means, with respect to any publicly
traded security as of any relevant date of determination, the average of the
Closing Prices per share or other unit of such security for the period of ten
Trading Days ending on and including the third Trading Day prior to such
relevant date of determination.
"BELMARKEN LOAN AGREEMENTS" means, collectively, the Loan
Agreement, dated as of May 25, 2001, among Belmarken Holding B.V., UPC, UPC
Internet Holding B.V. and Liberty Sub, and all agreements, including pledge
and security agreements, entered into or to be entered into in connection
therewith.
"BELMARKEN NOTES" means the 6% Guaranteed Discount Notes
due 2007 issued pursuant to the Belmarken Loan Agreements.
"BUSINESS DAY" means any day other than Saturday, Sunday
and a day on which banks are required or permitted to close in Denver,
Colorado or New York, New York.
"CLOSING DATE" means the date on which the Closing occurs.
"CLOSING PRICE" of a share or other unit of any security on
any Trading Day is (i) the last reported sale price for a share or other unit
of such security on such Trading Day as
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reported on the principal United States or foreign securities exchange on
which such security is listed or admitted for trading or (ii) if such
security is not listed or admitted for trading on any such securities
exchange, the last reported sale price for a share or other unit of such
security on such Trading Day as reported on The Nasdaq Stock Market or (iii)
if such security is not listed or admitted to trading on any United States or
foreign securities exchange or The Nasdaq Stock Market, the average of the
highest bid and lowest asked prices for a share or other unit of such
security on such Trading Day in the over-the-counter market as reported by
The National Quotation Bureau Incorporated, or any similar organization.
"CODE" means the Internal Revenue Code of 1986.
"COMMISSION" means the United States Securities and Exchange
Commission.
"CONTROL" shall mean the ability to direct or cause the
direction (whether through the ownership of voting securities, by contract or
otherwise) of the management and policies of a Person or to control (whether
affirmatively or negatively and whether through the ownership of voting
securities, by contract or otherwise) the decision of such Person to engage in
the particular conduct at issue.
A "CONTROLLED AFFILIATE" of a Person means any other Person
that the first Person directly, or indirectly through one or more
intermediaries, Controls.
"CONTROLLING PRINCIPALS" means Founders who are "Principals,"
as that term is defined in the Indenture and who hold a majority of the
aggregate voting power of all shares of United Common Stock and any other
securities issued by United that are entitled to vote generally for the election
of directors held by the Principals.
"DECEMBER 7 LETTER AGREEMENT" means the Letter Agreement,
dated as of December 7, 2000, between United and Liberty Media (including the
summary of terms attached thereto).
"DOJ" means the United States Department of Justice.
"ENVIRONMENTAL AND HEALTH LAWS" means any U.S. federal, state
or local law, statute, rule or regulation or domestic common law relating to the
environment or occupational health and safety, including any statute, regulation
or order pertaining to (i) treatment, storage, disposal, generation and
transportation of pollutants, contaminants, chemicals, industrial, toxic or
hazardous substances, oil or petroleum products or solid or hazardous waste
(collectively, "HAZARDOUS SUBSTANCES"); (ii) air, water and noise pollution;
(iii) groundwater and surface water contamination; (iv) the release into the
environment of Hazardous Substances, including without limitation emissions,
discharges, injections, spills, escapes or dumping of pollutants, contaminants
or chemicals; (v) the protection of wild life, marine sanctuaries and wetlands,
including without limitation all endangered and threatened species; (vi) storage
tanks, vessels and containers containing Hazardous Substances; (vii) underground
storage tanks, abandoned, disposed or discarded barrels and other closed
receptacles containing Hazardous Substances; (viii) health and safety of
employees; and (ix) manufacture, processing, use, distribution, treatment,
storage, disposal, transportation or handling of Hazardous Substances. As used
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herein, the terms "release" and "environment" have the meanings set forth in
the Comprehensive Environmental Response, Compensation, and Liability Act of
1980.
"EXCHANGE ACT" means the Securities Exchange Act of 1934.
"FEE LETTER" means the Fee Letter, dated April 29, 1999, among
United, UIH Funding Corp., ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, Inc., TD Securities (USA),
Inc., Chase Securities, Inc. and ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities
Corporation, as amended on May 13, 1999 and May 23, 2001.
"FILING" means any registration, declaration, application or
filing.
"FOUNDERS AGREEMENTS" means each of (a) the Founders Agreement
to be entered into prior to the Closing among certain Founders relating to
United, in the form attached to Section 5.1 of the Founders Disclosure Schedule,
and (b) the Founders Agreement to be entered into prior to the Closing among the
Founders relating to New United, in the form attached to Section 5.1 of the
Founders Disclosure Schedule.
"FOUNDERS DISCLOSURE SCHEDULE" means the disclosure schedule
delivered with the Original Agreement by the Founders.
"FTC" means the United States Federal Trade Commission.
"GAAP" means generally accepted U.S. accounting principles as
in effect as of the relevant time.
"GOVERNMENTAL AUTHORITY" means any U.S. federal, state or
local or any foreign court, governmental department, commission, authority,
board, bureau, agency or other instrumentality.
"HIGH VOTE SECURITIES" means United Class B Stock, United
Equity Securities that are convertible into or exercisable or exchangeable for
shares of United Class B Stock (contingently or otherwise) or that have a
greater vote per share (on an as-converted basis or otherwise) than the United
Class A Stock (whether generally, in the election of directors or generally
other than in the election of directors), or any Rights to acquire any of the
foregoing.
"HSR ACT" means the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements
Act of 1976, and the rules and regulations promulgated thereunder.
"INCOME TAX" means any federal, state, local or foreign income
tax, including any interest, penalty, or addition thereto.
"INDENTURE" means the Indenture, dated as of February 5, 1998,
between United and Firstar Bank, N.A. (f/k/a Firstar Bank of Minnesota, N.A.).
"INTELLECTUAL PROPERTY" means, collectively, patents,
trademarks, trade names, service marks, copyrights, applications for any of the
foregoing and trade secrets.
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"JUDGMENT" means any order, writ, injunction, award, judgment,
ruling or decree of any Governmental Authority.
"LAW" means any U.S. federal, state or local or any foreign
statute, code, ordinance, decree, rule, regulation or general principle of
common or civil law or equity.
"LEGAL PROCEEDINGS" means, collectively, any private or
governmental actions, suits, complaints, arbitrations, legal or administrative
proceedings or investigations.
"LETTER AGREEMENT" means the Amended and Restated Agreement,
dated as of May 25, 2001, among United, Liberty Media and LMI.
"LIBERTY" means Liberty Media and any successor (by merger,
consolidation, transfer of assets or otherwise) to all, or substantially all, of
Liberty Media's assets.
"LIBERTY 2009 NOTES" means the notes of Liberty Media that may
be issued by Liberty Media to UIPI pursuant to Section 2.3.
"LIBERTY DISCLOSURE SCHEDULE" means the disclosure schedule
delivered with the Original Agreement by Liberty Media.
"LIBERTY PARTIES" means Liberty, LMI and Liberty Global,
individually and collectively.
"LIBERTY UPC BOND COST" means the sum of the amounts paid by
Liberty and its Affiliates to acquire the Liberty UPC Bonds (including any
amounts paid in connection with the acquisition of the Liberty UPC Bonds,
including dealer-manager fees, depositary fees, information agent fees and other
investment banking fees and expenses related to such acquisition and legal fees
and expenses), plus interest on each such amount from and including the date
such amount was paid by Liberty or the applicable Affiliate of Liberty to and
including the Closing Date at the rate of 8% per annum, compounded quarterly,
less the amount of any interest payments actually received by Liberty and its
Affiliates with respect to any period prior to the Closing with respect to the
Liberty UPC Bonds. SCHEDULE 1.1 sets forth the Liberty UPC Bond Cost as of
November 30, 2001.
"LIBERTY UPC BONDS" means all of the senior notes and senior
discount notes issued by UPC and held by Liberty and its Controlled Affiliates
as of the Original Agreement Date, as set forth on SCHEDULE 1.1.
"LICENSES" means any licenses, franchises, authorizations,
permits, certificates, variances, exemptions, concessions, consents, leases,
rights of way, easements, instruments, orders and approvals, domestic or
foreign, of any Governmental Authority.
"LIEN" shall mean any mortgage, pledge, lien, encumbrance,
charge, or security interest, but excluding any of the foregoing created or
imposed by or pursuant to the August 1999 Agreement, this Agreement or the other
Transaction Documents.
"NASD" shall mean the National Association of Securities
Dealers, Inc.
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"NOTES TENDER LETTER AGREEMENT" means the Letter Agreement,
dated December 21, 2001, among United, New United, Liberty and IDT Venture
Capital Corporation, a
Delaware corporation.
"ORIGINAL AGREEMENT DATE" means December 3, 2001.
"PARTNER'S PURCHASE RIGHT" means any right of first offer,
right of first refusal, right of last refusal, buy-sell, put-call, purchase
or exchange option or similar right in favor of a third party (a) granted
under an agreement that was in effect on June 25, 2000 and that was in effect
on the Original Agreement Date or (b) referred to in this Agreement
(including a Schedule hereto) or a disclosure schedule delivered pursuant to
the Original Agreement.
"PERMITTED ENCUMBRANCES", with respect to any Person, means
the following Liens: (i) Liens for Taxes, assessments or other governmental
charges or levies not at the time delinquent or thereafter payable without
penalty or being contested in good faith by appropriate proceedings and for
which adequate reserves shall have been set aside on the books of the
applicable Person in accordance with GAAP; (ii) Liens of carriers,
warehousemen, mechanics, materialmen and landlords incurred in the ordinary
course of business for sums not overdue or being contested in good faith by
appropriate proceedings and for which adequate reserves in accordance with
GAAP shall have been set aside on the books of the applicable Person; (iii)
Liens incurred in the ordinary course of business in connection with
workmen's compensation, unemployment insurance or other forms of governmental
insurance or benefits, or to secure performance of tenders, statutory
obligations, leases and contracts (other than for borrowed money) entered
into in the ordinary course of business or to secure obligations on surety or
appeal bonds; (iv) purchase money security interests or Liens on property
acquired or held by the applicable Person in the ordinary course of business
to secure the purchase price of such property or to secure indebtedness
incurred solely for the purpose of financing the acquisition of such
property; and (v) easements, restrictions and other minor defects of title
that are not, in the aggregate, material or which do not, individually or in
the aggregate, materially and adversely affect the value of the property
affected thereby.
"PERSON" means any individual, corporation, limited
liability company, partnership, joint venture, Governmental Authority,
business association or other entity.
"PRIORITY TELECOM" means Priority Telecom N.V., a private
company incorporated with limited liability under the laws of The Netherlands.
"PRIORITY TELECOM SHAREHOLDERS AGREEMENT" means the
Shareholders Agreement executed by UPC and Priority Telecom on August 11,
2000 and by each shareholder of Priority Telecom thereafter as received, as
amended or modified thereafter and any other agreement or arrangement among
the shareholders of Priority Telecom with respect to the subject matter
thereof.
"RESTRICTIONS" means with respect to any capital stock,
partnership interest, membership interest in a limited liability company or
other equity interest or security, any voting or other trust or agreement,
option, warrant, preemptive right, right of first offer, right of first
refusal, escrow arrangement, proxy, buy-sell agreement, power of attorney or
other Contract (but
7
excluding the August 1999 Agreement, the Belmarken Loan Agreements, this
Agreement and the other Transaction Documents), any Law, License or Judgment
that, conditionally or unconditionally, (a) grants to any Person the right to
purchase or otherwise acquire, or obligates any Person to sell or otherwise
dispose of or issue, or otherwise results or, whether upon the occurrence of
any event or with notice or lapse of time or both or otherwise, may result in
any Person acquiring, (i) any of such capital stock or other equity interest
or security; (ii) any of the proceeds of, or any distributions paid or that
are or may become payable with respect to, any of such capital stock or other
equity interest or security; or (iii) any interest in such capital stock or
other equity interest or security or any such proceeds or distributions; (b)
restricts or, whether upon the occurrence of any event or with notice or
lapse of time or both or otherwise, is reasonably likely to restrict the
transfer or voting of, or the exercise of any rights or the enjoyment of any
benefits arising by reason of ownership of, any such capital stock or other
equity interest or security or any such proceeds or distributions; or (c)
creates or, whether upon the occurrence of any event or with notice or lapse
of time or both or otherwise, is reasonably likely to create a Lien or
purported Lien affecting such capital stock or other equity interest or
security, proceeds or distributions.
"RIGHTS" means securities of United (which may include
United Equity Securities) that (contingently or otherwise) are exercisable,
convertible or exchangeable for or into United Equity Securities (with or
without consideration) or that carry any right to subscribe for or acquire
United Equity Securities or securities exercisable, convertible or
exchangeable for or into United Equity Securities.
"SECURITIES ACT" means the Securities Act of 1933.
"SENIOR NOTES" means the debt securities issued pursuant to
the Indenture, dated as of April 29, 1999, between United and Firstar Bank,
N.A.
"SENIOR SECURED NOTES" means the debt securities issued
pursuant to the Indenture.
"SUBSIDIARY" means, with respect to any Person (a) a
corporation a majority in voting power of whose capital stock with voting
power, under ordinary circumstances, to elect directors is at the time,
directly or indirectly, owned by such Person, by a Subsidiary of such Person,
or by such Person and one or more Subsidiaries of such Person, without regard
to whether the voting of such stock is subject to a voting agreement or
similar Restriction, (b) a partnership or limited liability company in which
such Person or a Subsidiary of such Person is, at the date of determination,
(i) in the case of a partnership, a general partner of such partnership with
the power affirmatively to direct the policies and management of such
partnership or (ii) in the case of a limited liability company, the managing
member or, in the absence of a managing member, a member with the power
affirmatively to direct the policies and management of such limited liability
company, or (c) any other Person (other than a corporation) in which such
Person, a Subsidiary of such Person or such Person and one or more
Subsidiaries of such Person, directly or indirectly, at the date of
determination thereof, has (i) the power to elect or direct the election of a
majority of the members of the governing body of such Person (whether or not
such power is subject to a voting agreement or similar Restriction) or (ii)
in the absence of such a governing body, at least a majority ownership
interest. When used with respect to any Liberty
8
Party, the term "Subsidiary" shall not in any event include New United or any
of its Subsidiaries. For purposes of this definition, shares of capital stock
of United Austar, Inc. owned by United A/P will not be deemed to be directly
or indirectly owned by United or any of its Subsidiaries if, at the time such
determination is to be made, United A/P is not a Subsidiary of United.
"TAX" shall mean any income, corporation, gross receipts,
profits, gains, capital stock, capital duty, franchise, business, license,
payroll, withholding, social security, unemployment, disability, property,
wealth, welfare, stamp, environmental, transfer, excise, occupation, sales,
use, value added, alternative minimum, estimated or other similar tax
(including any fee, assessment or other charge in the nature of any tax)
imposed by any governmental authority (whether national, federal, state,
local, municipal, foreign or otherwise) or political subdivision thereof, and
any interest, penalties, additions to tax or additional amounts in respect of
the foregoing.
"TAX RETURNS" shall mean all reports, declarations of
estimated tax, information statements and returns relating to, or required to
be filed in connection with, any Taxes, including information returns or
reports with respect to backup withholding and other payments to third
parties.
"TRADING DAY", with respect to any security, means a day on
which the principal United States or foreign securities exchange on which
such security is listed or admitted to trading, or The Nasdaq Stock Market if
such security is not listed or admitted to trading on any such securities
exchange, as applicable, is open for the transaction of business (unless such
trading shall have been suspended for the entire day) or, if the applicable
security is not listed or admitted to trading on any United States or foreign
securities exchange or The Nasdaq Stock Market, any Business Day.
"TRANSACTION DOCUMENTS" means this Agreement, the
Stockholders Agreement, the Standstill Agreement, the Registration Rights
Agreement, the Liberty 2009 Notes Registration Rights Agreement (if such
agreement is entered into as contemplated by Section 2.3), the Founder Newco
Merger Agreements, the United/New United Merger Agreement, the Voting
Agreement, the No Waiver Agreement, the New United Covenant Agreement, the
Founders Agreements, the Exchange Agreement, the United/Liberty Agreement,
the New United Charter, the New United By-laws, the Surviving Entity Charter,
the Surviving Entity By-laws, the Subscription Agreements, all documents,
instruments and agreements executed in connection with the satisfaction of
the Fee Letter Condition (including the Senior Notes Agreements) and any and
all other documents, instruments and agreements to be executed and delivered
in connection with the transactions contemplated hereby (including in
connection with the satisfaction of each party's conditions hereunder) or
thereby.
"UIPI" means United International Properties, Inc., a
Colorado corporation and wholly owned Subsidiary of United.
"UNITED DISCLOSURE SCHEDULE" means the disclosure schedule
delivered with the Original Agreement by United.
9
"UNITED EQUITY SECURITIES" means the United Common Stock
and any other voting securities issued by United, other than shares of United
Preferred Stock with customary limited voting rights.
"UNITED PUBLIC COMPANY" means any entity that (a) has
equity securities issued by it publicly traded on any internationally
recognized United States or foreign securities exchange, and (b) is a
Subsidiary of United.
"UPC" means United Pan-Europe Communications, N.V., a
company organized under the laws of The Netherlands and a Subsidiary of
United.
1.2 ADDITIONAL TERMS. As used in this Agreement, the following
terms shall have the meanings set forth in the referenced sections of this
Agreement:
Term Section
---- -------
Acceptance Notice 2.3(b)
Action 15.5(a)
Additional Liberty Shares 2.2(d)
Agreement Preamble
Amendment Date Preamble
Basket Amount 15.6
Basket Exceptions 15.6
Belmarken Notes Value 2.2(d)
Cash Contribution 2.2(d)
Claims 15.2
Class B Options 6.1(b)
Closing 14.1
Contracts 6.1(c)(ii)
Contributing Party 2.2(f)
DGCL 2.5(a)
Effective Time 2.5(b)
Equity Affiliate 6.1(f)(i)
Exchange Agreement 7.12
Exchange Ratio 2.5(b)
Exchange Ratio Fairness Opinion 7.22
Existing Liberty Notes 2.3
Existing New United Common Stock 6.2(b)
Fee Letter Condition 11.10
Founder Preamble
Founder Consideration Shares 2.2(b)
Founder Indemnified Parties 15.3
Founder Material Adverse Effect 5.1
Founder Newco Merger 2.2(b)
Founder Newco Merger Agreement 2.2(b)
Founder Newco 2.1(a)
Founder Shares 2.1(a)
10
Indemnified Party 15.5(a)
Indemnifying Party 15.5(a)
Indenture Fairness Opinion 7.22
Injunction 7.5(a)
Letter Agreement Recitals
Liberty 2009 Notes Registration
Rights Agreement 2.3
Liberty Argentina Recitals
Liberty Consideration Shares 2.2(a)
Liberty Contribution Shares 2.2(d)
Liberty Contribution Value 2.2(d)
Liberty Global Preamble
Liberty Global Consideration Shares 2.2(a)
Liberty Global Shares 2.2(a)
Liberty Guaranty 2.3
Liberty Material Adverse Effect 4.1
Liberty Media Preamble
Liberty Media Indemnified Parties 15.2
Liberty Notice 2.3(b)
Liberty Sub Recitals
LMI Preamble
Losses 15.2
Make Whole Bankers Recitals
Make Whole Payment Recitals
Material Adverse Change 17.12
Material Adverse Effect 17.12
Material United Subsidiaries 6.1(j)
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 6.1(q)
New United Preamble
New United By-laws 2.1(b)
New United Charter 2.1(b)
New United Class A Stock 2.5(b)
New United Class B Stock Recitals
New United Class C Stock Recitals
New United Commission Filing 6.2(g)(i)
New United Covenant Agreement 7.9A
New United Indemnified Parties 15.4
New United Material Adverse Effect 6.2(a)
New United Preferred Stock 6.2(b)(i)
Note Repayment Amount 2.3
Note Shares Recitals
No Waiver Agreement 2.2(e)
Notes Holder 2.3(b)
Offered Notes 2.3(b)
Offer Notice 2.3(b)
Original Fairness Opinions 6.1(q)
11
Proxy Statement 7.3(a)
Purchased Notes 2.3(b)
Refinanced Indebtedness 7.1(b)
Refinancing Indebtedness 7.1(b)
Registration Rights Agreement 7.11
Registration Statement 7.3(a)
Required Founder Consents 5.2
Required Liberty Consents 4.2
Required United Consents 6.1(c)(ii)
Restructuring Proceeds 2.2(d)
Restructuring Transaction 13.9
▇▇▇▇▇▇▇▇▇ 2.1(b)
Senior Notes Agreements 11.10
September 18 Letter Agreement 17.2
Series E Certificate of Designation 6.1(b)
Series E Holder 7.12
Standstill Agreement 7.10
Stockholders Agreement 7.7
Stock Purchase Fairness Opinion 6.1(q)
Subscription Agreement 2.1(c)
Surviving Entity 2.5(a)
Surviving Entity By-laws 2.5(e)
Surviving Entity Charter 2.5(e)
Surviving Entity Class A Stock 2.5(b)
Surviving Entity Class B Stock 2.5(d)
Surviving Entity Class C Stock 2.5(d)
Total Liberty Shares 2.2(d)
Transfer Date 2.3(b)
United Preamble
United 2001 Commission Filings 6.1(g)(i)
United A/P 6.1(f)
United Class A Stock Recitals
United Class B Stock Recitals
United Commission Filings 6.1(g)(i)
United Common Stock Recitals
United Form 10-K 6.1(g)(i)
United Indemnified Parties 15.4
United Investment 6.1(f)(i)
United Investment Agreements 6.1(f)(i)
United June 10-Q 6.1(g)(i)
United/Liberty Agreement 7.9
United Material Adverse Effect 6.1(a)
United/New United Merger 2.5(a)
United/New United Merger Agreement 2.5(a)
United/New United Merger Sub Preamble
United/New United Merger Sub By-laws 6.2(a)
12
United/New United Merger Sub Charter 6.2(a)
United/New United Merger Sub
Class B Stock 2.5(d)
United/New United Merger Sub
Class C Stock 2.5(d)
United Preferred Stock 6.1(b)
United Series B Preferred Stock 6.1(b)
United Series C Preferred Stock 6.1(b)
United Series D Preferred Stock 6.1(b)
United Series E Preferred Stock 6.1(b)
United Stockholders Meeting 7.2
United Stock Option Plans 6.1(b)
UPC Form 10-K 6.1(g)(i)
UPC June 10-Q 6.1(g)(i)
Voting Agreement 7.8
ARTICLE II
CONTRIBUTIONS, REORGANIZATION AND RELATED TRANSACTIONS
2.1 PRE-CLOSING RESTRUCTURING TRANSACTIONS. Prior to and as a
condition precedent of the Closing, the parties shall effect or cause to be
effected the following transactions:
(a) Each of the Founders will contribute, convey, transfer,
assign and deliver, free and clear of all Liens and Restrictions, except as
set forth in Section 5.7 of the Founders Disclosure Schedule, all and not
less than all of the shares of United Class B Stock held by such Founder as
indicated next to such Founder's name on SCHEDULE 2.1(a) (collectively, the
"FOUNDER SHARES"), in each case together with the right to receive all unpaid
dividends and distributions declared or otherwise payable with respect to
such Founder Shares and associated stock purchase rights, if any, to
newly-formed single-member limited liability companies organized under the
laws of the State of
Delaware (each a "FOUNDER NEWCO"). At all times from the
organization of each Founder Newco until the Closing (i) no Person other than
the Founder contributing shares of United Class B Stock to such Founder Newco
shall own any equity interest whatsoever in such Founder Newco, (ii) the
limited liability company membership interests in such Founder Newco shall be
owned by the applicable Founder free and clear of any Liens and Restrictions,
and such Founder Newco shall have no assets, other than Founder Shares and
shares of United Class A Stock issued to such Founder Newco upon conversion
of Founder Shares pursuant to the following sentence, and no liabilities or
obligations, known or unknown, whether absolute, accrued, fixed, contingent
or otherwise, other than its obligations under the applicable Founder Newco
Merger Agreement. Each Founder will cause its applicable Founder Newco to
convert an adequate number of the Founder Shares held by it into an equal
number of shares of United Class A Stock in order to ensure that, after
giving effect to the Founder Newco Mergers and the contribution contemplated
by Section 2.2(a), New United will not own 50% or more of the voting power of
United prior to the consummation of the United/New United Merger.
13
(b) ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ("▇▇▇▇▇▇▇▇▇"), as the sole
stockholder of New United, will cause the Certificate of Incorporation ("NEW
UNITED CHARTER") and By-laws ("NEW UNITED BY-LAWS") of New United to be
restated as set forth in EXHIBITS 2.1(b)-1 and 2.1(b)-2, respectively.
(c) Immediately prior to the Closing, one or more
Controlling Principals will purchase from United an aggregate of 1,500 shares
of United Series E Preferred Stock for the purchase price set forth in, and
otherwise pursuant to the terms of, one or more Subscription Agreements
between each such Controlling Principal and United, in the form attached
hereto as EXHIBIT 2.1(c) (each a "SUBSCRIPTION AGREEMENT").
2.2 CONTRIBUTIONS AND RESTRUCTURING. At the Closing, upon the terms
and subject to the conditions set forth in this Agreement and in the order
set forth below (and otherwise substantially concurrently):
(a) (i) ▇▇▇▇▇▇▇▇▇ will contribute, convey, transfer, assign
and deliver to New United, free and clear of all Liens and Restrictions, one
share of United Class A Stock, together with the right to receive all unpaid
dividends and distributions declared or otherwise payable with respect to
such share of United Class A Stock and associated stock purchase rights, if
any, as a contribution to the capital of New United, and New United shall
accept such share of United Class A Stock as a contribution to its capital
and ▇▇▇▇▇▇▇▇▇ shall not receive any other consideration in exchange for such
contribution, (ii) Liberty Global will contribute, convey, transfer, assign
and deliver, or cause to be contributed, conveyed, transferred, assigned and
delivered, to New United, free and clear of all Liens and Restrictions, all,
but not less than all, of the shares of United Class B Stock held by Liberty
Global as indicated next to Liberty Global's name on SCHEDULE 2.2 hereto (the
"LIBERTY GLOBAL SHARES"), together with the right to receive all unpaid
dividends and distributions declared or otherwise payable with respect to
such Liberty Global Shares and associated stock purchase rights, if any, and
New United shall accept all, but not less than all, the Liberty Global Shares
and issue and deliver to Liberty Global, or to the applicable Contributing
Party or Contributing Parties, in exchange therefor a number of shares of New
United Class C Stock equal to the number of Liberty Global Shares so
contributed (the "LIBERTY GLOBAL CONSIDERATION SHARES"), (iii) Liberty will
contribute, convey, transfer, assign and deliver, or cause to be contributed,
conveyed, transferred, assigned and delivered, to New United, free and clear
of all Liens and Restrictions, all, but not less than all, of the Note
Shares, together with the right to receive all unpaid dividends and
distributions declared or otherwise payable with respect to such Note Shares
and associated stock purchase rights, if any, and New United shall accept
all, but not less than all, the Note Shares and issue and deliver to Liberty,
or to the applicable Contributing Party or Contributing Parties, in exchange
therefor a number of shares of New United Class C Stock equal to the number
of Note Shares so contributed (the "LIBERTY CONSIDERATION SHARES") and (iv)
New United will convert the Liberty Global Shares into an equal number of
shares of United Class A Stock. Immediately prior to the contributions
described in clauses (ii) and (iii) of the previous sentence, there shall be
no outstanding shares of capital stock or other securities or ownership
interests of New United other than one share of New United Class A Stock
held, beneficially and of record, by ▇▇▇▇▇▇▇▇▇.
(b) The Founders and New United will cause each of the
Founder Newcos to merge with and into New United (each, a "FOUNDER NEWCO
MERGER") with the limited liability company membership interests of each
Founder Newco being converted into an aggregate
14
number of shares of New United Class B Stock equal to the number of shares of
United Common Stock held by such Founder Newco at the time of such mergers
(the "FOUNDER CONSIDERATION SHARES"). Each of these mergers will be
consummated pursuant to an Agreement and Plan of Merger substantially in the
form attached hereto as EXHIBIT 2.2(b) (each, a "FOUNDER NEWCO MERGER
AGREEMENT"). Prior to or simultaneous with the Founder Newco Mergers, any
Liens and Restrictions on shares of United Common Stock held by each Founder
Newco, including as set forth in Section 5.7 of the Founder Disclosure
Schedule, shall be fully and unconditionally released (without any liability
whatsoever to New United or any of its Subsidiaries or Affiliates) in
accordance with instruments and documents that are reasonably satisfactory to
New United and the Liberty Parties and, from and after the Founder Newco
Mergers, such shares of United Common Stock shall be free and clear of any
Liens or Restrictions whatsoever. New United will be the surviving entity in
each of the Founder Newco Mergers.
(c) United, New United and United/New United Merger Sub
shall effect the United/New United Merger, as described in Section 2.5 below.
(d) Liberty Media will contribute, convey, transfer, assign
and deliver, or cause to be contributed, conveyed, transferred, assigned and
delivered, to New United, free and clear of all Liens and Restrictions:
(i) all of the Belmarken Notes (or any proceeds
thereof) and all of Liberty Sub's rights and
obligations under the Belmarken Loan
Agreements; and
(ii) an amount of cash equal to US $200,000,000
(the "CASH CONTRIBUTION"); and
(iii) all of the Liberty UPC Bonds or, in the
event of any refinancing or restructuring
of, or similar transaction with respect to,
any of UPC's indebtedness, the proceeds, if
any, received in exchange for any of the
Liberty UPC Bonds in such transaction (the
"RESTRUCTURING PROCEEDS");
and New United shall issue and deliver to Liberty Media or the applicable
Contributing Party or Contributing Parties at the Closing, the following
shares of New United Class C Stock (the "LIBERTY CONTRIBUTION SHARES"):
(1) in exchange for, and in consideration of,
the contribution of the Belmarken Notes (or
any proceeds thereof) and the assignment of
Liberty Sub's rights and obligations under
the Belmarken Loan Agreements to New United
pursuant to Section 2.2(d)(i), a number of
shares of New United Class C Stock equal to
the quotient of (A) US $856,800,000, PLUS
interest accrued on such amount from and
including May 29, 2001 to and including the
Closing Date at the rate of 6% per annum,
compounded quarterly, calculated in the same
manner as provided in the Belmarken Loan
Agreements for
15
the accretion of interest on the Belmarken
Notes (irrespective of whether any Belmarken
Notes are outstanding), (the "BELMARKEN
NOTES VALUE") DIVIDED BY (B) US $16.18; and
(2) in exchange for, and in consideration of,
the Cash Contribution, a number of shares of
New United Class C Stock equal to the
quotient of (A) the amount of the Cash
Contribution DIVIDED BY (B) US $16.18; and
(3) in exchange for, and in consideration of,
the Liberty UPC Bonds and/or Restructuring
Proceeds contributed to New United pursuant
to Section 2.2(d)(iii), a number of shares
of New United Class C Stock equal to the
quotient of (A) the Liberty UPC Bond Cost
DIVIDED BY (B) US $1.53;
provided that (A) if the quotient obtained by dividing the sum of the
Belmarken Notes Value PLUS the amount of the Cash Contribution PLUS the
Liberty UPC Bond Cost PLUS US $20,000,000 (such sum, the "LIBERTY
CONTRIBUTION VALUE"), by the sum of the total number of Liberty Contribution
Shares determined in accordance with clauses (1), (2) and (3) above PLUS
11,976,048 (such sum, the "TOTAL LIBERTY SHARES"), is greater than US $5.00,
New United shall issue and deliver to Liberty at the Closing a sufficient
number of additional shares of New United Class C Stock (the "ADDITIONAL
LIBERTY SHARES") so that the quotient obtained by dividing the Liberty
Contribution Value BY the sum of the Total Liberty Shares PLUS the Additional
Liberty Shares is equal to US $5.00 and (B) if the quotient obtained by
dividing the Liberty Contribution Value BY the Total Liberty Shares is less
than US $5.00, the number of Liberty Contribution Shares issued and delivered
by New United to Liberty pursuant to this Section 2.2(d) shall be reduced by
a number of shares of New United Class C Stock so that the quotient obtained
by dividing the Liberty Contribution Value BY the number of Liberty
Contribution Shares issued and delivered to Liberty by New United is equal to
US $5.00. For purposes of each provision of this Agreement other than this
Section 2.2(d) any Additional Liberty Shares issued and delivered pursuant to
this Section 2.2(d) shall be deemed to be Liberty Contribution Shares.
(e) Liberty Media, LMI and New United will enter into an
agreement pursuant to which New United will acknowledge that Liberty, LMI and
their respective Affiliates are intended beneficiaries of the covenants and
agreements set forth in Sections 7.11 and 11.15 of the Loan Agreement, dated
as of May 25, 2001, among Belmarken Holding B.V., UPC, UPC Internet Holding
B.V. and Liberty Sub, and New United will agree that it will not amend,
modify or waive in any respect or terminate any of such covenants or
agreements without the prior written consent of Liberty and LMI (the "NO
WAIVER AGREEMENT").
(f) If Liberty or Liberty Global causes any Person to make
all or part of the contributions described in clauses (a) or (d) above, each
such Person shall become a party to this Agreement and the applicable
Transaction Documents (each such Person, a "CONTRIBUTING PARTY").
16
2.3 REPAYMENT OF INDEBTEDNESS.
(a) Except as contemplated by the Notes Tender Letter
Agreement, at the Closing, immediately following the consummation of the
transactions set forth in Section 2.2, or such later date as may be acceptable
to United, Liberty shall repay, or cause to be repaid, in full the unpaid
balance of the principal amount of the $310,000,000 Notes together with all
accrued and unpaid interest thereon (the "NOTE REPAYMENT AMOUNT") to UIPI either
by the delivery of cash or, as described below, Liberty 2009 Notes, or such
other form of consideration as may be acceptable to United. Upon receipt of the
Note Repayment Amount or, if earlier, upon the assumption by New United of the
obligations represented by the $310,000,000 Notes, United shall irrevocably
release, and shall cause each of its Controlled Affiliates that is a beneficiary
of Liberty Media's guaranty of the repayment of the indebtedness evidenced by
the $310,000,000 Notes (the "LIBERTY GUARANTY") to irrevocably release, Liberty
from all of its obligations under the Liberty Guaranty. Notwithstanding anything
contained in the December 7 Letter Agreement, the $310,000,000 Notes or the
Liberty Guaranty and except as contemplated by the Notes Tender Letter
Agreement, (i) the balance of the indebtedness evidenced by the $310,000,000
Notes shall not be due and payable until the Closing Date or such later date as
may be acceptable to United or as contemplated by the Notes Tender Letter
Agreement; provided, however, that if this Agreement is terminated without the
occurrence of the Closing, then, except as contemplated by the Notes Tender
Letter Agreement, the balance of such indebtedness will be due and payable in
cash on the date of termination of this Agreement or such later date as may be
acceptable to United, (ii) prior to the Closing, Liberty Argentina may assign
the $310,000,000 Notes, in whole or in part, to Liberty and (iii) Liberty may
repay, or cause to be repaid, the balance of the indebtedness evidenced by the
$310,000,000 Notes, in whole or in part, by the delivery of Liberty 2009 Notes,
or such other form of consideration as may be acceptable to United or as
contemplated by the Notes Tender Letter Agreement, to UIPI at the Closing or
such later date as may be acceptable to United or as contemplated by the Notes
Tender Letter Agreement. If Liberty repays, or causes to be repaid, any or all
of the balance of the indebtedness evidenced by the $310,000,000 Notes by the
delivery of Liberty 2009 Notes, (A) such Liberty 2009 Notes shall (1) except as
set forth herein, be substantially identical to Liberty's Senior Notes, due
2009, that were originally issued on July 7, 1999 (the "EXISTING LIBERTY
NOTES"), (2) not, when delivered to UIPI, be registered pursuant to the
Securities Act, (3) be issued with an aggregate principal amount equal to the
portion of the Note Repayment Amount that is being repaid by delivery of such
Liberty 2009 Notes, and (4) bear interest on the principal amount thereof at a
rate per annum equal to the market yield on the Existing Liberty Notes as of the
date such Liberty 2009 Notes are delivered to UIPI (determined in the manner set
forth on SCHEDULE 2.3), and (B) Liberty, United and UIPI shall, in connection
with any such delivery of Liberty 2009 Notes, enter into a registration rights
agreement with respect to the Liberty 2009 Notes in the form attached hereto as
EXHIBIT 2.3 (the "LIBERTY 2009 NOTES REGISTRATION RIGHTS AGREEMENT").
(b) (i) United shall not and shall cause each of its
Subsidiaries at any time holding Liberty 2009 Notes not to, transfer any
Liberty 2009 Notes to any Person other than a Person that is a wholly owned
Subsidiary of United without first complying with the provisions of this
Section 2.3(b). If United or a United Subsidiary holding any Liberty 2009 Notes
(the "NOTES HOLDER") desires to transfer any Liberty 2009 Notes to a Person
that is not a wholly owned Subsidiary of United, such Notes Holder shall first
deliver written notice to Liberty by telecopy (a "LIBERTY NOTICE") on the fifth
Business Day prior to the date on which the Notes
17
Holder intends to transfer such Liberty 2009 Notes (the "TRANSFER DATE"),
setting forth the number of Liberty 2009 Notes such Notes Holder intends to
transfer on the Transfer Date (expressed as an aggregate principal amount) and
setting forth a time on the Transfer Date at which the Notes Holder will
deliver the Offer Notice telephonically as described in the following sentence,
which time shall be after 7:00 a.m. and prior to 8:00 a.m. (in each case,
Denver, Colorado time). On the Transfer Date, at the time set forth in the
Liberty Notice, the Notes Holder shall telephonically offer (the "OFFER
NOTICE") to sell Liberty a number of Liberty 2009 Notes (expressed as an
aggregate principal amount) equal to the number of Liberty 2009 Notes set forth
in the Liberty Notice (the "OFFERED NOTES"), free and clear of all Liens and
Restrictions, for cash in an amount per Liberty 2009 Note specified by the
Notes Holder (expressed as a percentage of the principal amount of each Liberty
2009 Note so offered).
(ii) If Liberty desires to purchase all, but not less
than all, of the Offered Notes, Liberty may accept such Offer Notice by
notifying the Notes Holder telephonically at the telephone number specified in
the Offer Notice at or prior to 10:00 a.m. (Denver, Colorado time) on the
Transfer Date of its intention to purchase the Offered Notes (the "PURCHASED
NOTES") for a cash purchase price per Purchased Note as set forth in the Offer
Notice (the "ACCEPTANCE NOTICE"). The telephonic delivery of a timely
Acceptance Notice shall constitute a binding obligation of Liberty and the
Notes Holder. Liberty and the Notes Holder shall, on the Transfer Date and
promptly following the telephonic delivery of an Acceptance Notice, execute and
deliver a customary agreement for the purchase and sale of the Purchased Notes,
which agreement shall contain representations and warranties on the part of the
Notes Holder that the Purchased Notes are, and will be at the closing of the
sale of the Purchased Notes to Liberty, owned by such Notes Holder,
beneficially and of record, and are not, and at the time of such closing will
not be, subject to any Liens or Restrictions whatsoever. The sale of the
Purchased Notes to Liberty shall be consummated on the third Business Day
following the Transfer Date.
(iii) If Liberty does not telephonically deliver an
Acceptance Notice to the Notes Holder agreeing to purchase all of the Offered
Notes, the Notes Holder may, on the Transfer Date, sell all, but not less than
all, the Offered Notes for a cash purchase price per Offered Note that is no
less than the purchase price per Offered Note set forth in the Offer Notice to
a bona fide third party. Any sale of Offered Notes pursuant to the previous
sentence shall be consummated no later than the third Business Day following
the Transfer Date. If the Notes Holder does not sell the Offered Notes on the
Transfer Date or does not consummate the sale thereof on or before the third
Business Day following the Transfer Date, the Offered Notes may not be
transferred without again complying with the procedures set forth in this
Section 2.3(b).
18
2.4 CERTAIN ADJUSTMENTS. If at any time after the Original Agreement
Date United or New United effects any stock dividend, stock split, reverse
stock split, recapitalization or reclassification affecting the shares of its
common stock or preferred stock of any class or series, or otherwise effects
any transaction that changes such shares into any other securities (including
securities of another entity) or effects any other dividend or distribution
(other than a normal cash dividend payable out of current or retained earnings)
on such shares, then the exchange ratios (including the number and kind of
shares) set forth in this Agreement for any transaction not consummated prior
to such event will, as appropriate, be adjusted to reflect such event.
2.5 UNITED/NEW UNITED MERGER.
(a) Simultaneously with the execution and delivery of this
Agreement, United, New United and United/New United Merger Sub have entered
into an Amended and Restated Agreement and Plan of Merger, dated the Amendment
Date, a copy of which is attached hereto as EXHIBIT 2.5(a) (the "UNITED/NEW
UNITED MERGER AGREEMENT"). As described in Section 2.2, subject to and upon the
terms and conditions of the United/New United Merger Agreement, at the Closing,
United/New United Merger Sub shall, and New United and United shall cause
United/New United Merger Sub to, merge with and into United in accordance with
the provisions of the Delaware General Corporation Law (the "DGCL") (the
"UNITED/NEW UNITED MERGER"), the separate corporate existence of United/New
United Merger Sub shall cease and United shall continue as the surviving entity
in the United/New United Merger (the "SURVIVING ENTITY").
(b) By virtue of the United/New United Merger, at the
Effective Time:
(i) all of the shares of United Series E
Preferred Stock outstanding immediately
prior to the effective time of the
United/New United Merger (the "EFFECTIVE
TIME") shall be converted into and represent
the right to receive, and shall be
exchangeable for, an aggregate of 1,500
shares of the Class A Common Stock, par
value US $0.01 per share, of the Surviving
Entity ("SURVIVING ENTITY CLASS A STOCK");
(ii) each share of United Class A Stock
outstanding immediately prior to the
Effective Time shall be converted into and
represent the right to receive, and shall be
exchangeable for, one share (the "EXCHANGE
RATIO") of the Class A Common Stock, par
value US $0.01 per share, of New United
("NEW UNITED CLASS A STOCK") and each share
of United Class B Stock outstanding
immediately prior to the Effective Time
shall be converted into and represent the
right to receive and be exchangeable for,
one share of New United Class A Stock;
(iii) each share of United Series B Preferred
Stock outstanding immediately prior to the
Effective Time shall be converted into and
represent the right to receive, and shall be
exchangeable for, a number of shares of New
United Class A Stock equal to the
19
number of shares of United Class A Stock
that the holder of such share of United
Series B Preferred Stock would have received
in respect of such share if such holder had
converted such share into shares of United
Class A Stock immediately prior to the
United/New United Merger;
(iv) each share of United Series C Preferred
Stock outstanding immediately prior to the
Effective Time shall be converted into and
represent the right to receive, and shall be
exchangeable for, a number of shares of New
United Class A Stock equal to the number of
shares of United Class A Stock that the
holder of such share of United Series C
Preferred Stock would have received in
respect of such share if such holder had
converted such share into shares of United
Class A Stock immediately prior to the
United/New United Merger and assuming for
such purpose that United had elected to pay
any accumulated and unpaid dividends thereon
by the issuance of shares of United Class A
Stock as contemplated by the Certificate of
Designation for the United Series C
Preferred Stock;
(v) each share of United Series D Preferred
Stock outstanding immediately prior to the
Effective Time shall be converted into and
represent the right to receive, and shall be
exchangeable for, a number of shares of New
United Class A Stock equal to the number of
shares of United Class A Stock that the
holder of such share of United Series D
Preferred Stock would have received in
respect of such share if such holder had
converted such share into shares of United
Class A Stock immediately prior to the
United/New United Merger and assuming for
such purpose that United had elected to pay
any accumulated and unpaid dividends thereon
by the issuance of shares of United Class A
Stock as contemplated by the Certificate of
Designation for the United Series D
Preferred Stock;
PROVIDED, HOWEVER, that each share of United Class A Stock, United Class B
Stock, United Series B Preferred Stock, United Series C Preferred Stock and
United Series D Preferred Stock that immediately prior to the Effective Time is
held by New United or that is held by United in treasury shall be canceled and
retired without payment of any consideration therefor and without any conversion
thereof into New United Class A Stock. The rights, privileges, powers and
preferences of the New United Class A Stock, New United Class B Stock and New
United Class C Stock will be as provided in the New United Charter and New
United By-laws which shall continue in effect following the United/New United
Merger; PROVIDED THAT, effective immediately upon the Effective Time, the New
United Charter shall be amended to change the name of New United to
"UnitedGlobalCom, Inc."
(c) At the Effective Time, all outstanding options to purchase
shares of United Class A Stock or United Class B Stock (which options to
purchase shares of United Class B
20
Stock shall consist solely of Class B Options) under a United Stock Option Plan
or any other contract, all of which are listed in Section 2.5(c) of the United
Disclosure Schedule, shall remain outstanding, be assumed by New United and
thereafter be exercisable, at the same per share exercise price and pursuant to
the same terms and conditions, including vesting conditions, for a number of
shares of New United Class A Stock or New United Class B Stock, as applicable,
equal to the number of shares of United Class A Stock or United Class B Stock
for which such option was exercisable immediately prior to the Effective Time.
(d) At the Effective Time, all of the shares of United/New
United Merger Sub's Class B Common Stock, par value US $0.01 per share
("UNITED/NEW UNITED MERGER SUB CLASS B STOCK"), and Class C Common Stock, par
value US $0.01 per share ("UNITED/NEW UNITED MERGER SUB CLASS C STOCK"),
outstanding immediately prior to the Effective Time and held by New United shall
be converted into and represent the right to receive, and shall be exchangeable
for, respectively, an aggregate of 1,500 shares of the Class B Common Stock, par
value US $0.01 per share, of the Surviving Entity ("SURVIVING ENTITY CLASS B
STOCK") and 300,000 shares of the Class C Common Stock, par value US $0.01 per
share, of the Surviving Entity ("SURVIVING ENTITY CLASS C STOCK").
(e) As of and following the Effective Time, the Certificate
of Incorporation and By-laws of the Surviving Entity shall be as set forth on
EXHIBITS 2.5(e)-1 and 2.5(e)-2, respectively (respectively, the "SURVIVING
ENTITY CHARTER" and the "SURVIVING ENTITY BY-LAWS"). The rights, privileges,
powers and preferences of the Surviving Entity Class A Stock, Surviving Entity
Class B Stock and Surviving Entity Class C Stock shall, from and after the
Effective Time, be as provided in the Surviving Entity Charter and the
Surviving Entity Bylaws.
(f) The terms of the foregoing exchanges (including the
exchange rates) shall, as appropriate, be subject to adjustment as set forth in
Section 2.4 for events occurring after the Original Agreement Date and prior to
the Effective Time.
(g) As of and following the Effective Time, until their
successors are duly elected or appointed in accordance with the New United
Charter, the New United By-laws and the Voting Agreement, the directors,
executive officers and certain other officers of New United will be as set forth
on SCHEDULE 2.5(g).
(h) No fractional shares of New United Class A Stock shall be
issued in the United/New United Merger. In lieu of any fractional shares, each
holder of shares of United Preferred Stock who would otherwise have been
entitled to a fraction of a share of New United Class A Stock as a result of the
United/New United Merger will be paid by New United an amount in cash (without
interest) as described in the United/New United Merger Agreement.
21
ARTICLE III
[RESERVED]
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF
LIBERTY MEDIA, LIBERTY GLOBAL AND LMI
Each of the Liberty Parties, severally and not jointly, as to
itself and the assets, if any, being transferred by such Liberty Party pursuant
hereto only, represents and warrants to the other parties hereto, as follows,
with all such representations and warranties that speak in the present tense or
refer to "the date hereof" or similar terms being deemed to be made as of the
Original Agreement Date:
4.1 ORGANIZATION, GOOD STANDING AND AUTHORITY. Such Liberty Party (i)
is a corporation duly incorporated, validly existing and in good standing under
the laws of the jurisdiction of its incorporation, (ii) has all requisite
corporate power and authority to own, lease and operate its properties and to
carry on its business as now being conducted and (iii) is duly qualified or
licensed and in good standing to do business in each jurisdiction in which the
property owned, leased or operated by it or the nature of the business
conducted by it makes such qualification necessary, except where the failure to
be so qualified or licensed and in good standing has not had and is not
reasonably likely to have (1) a Material Adverse Effect on the assets being
transferred by the Liberty Parties pursuant hereto, taken as a whole, or (2) a
material adverse effect on the ability of the Liberty Parties to perform their
respective obligations under, and to consummate the transactions contemplated
by, this Agreement and the other Transaction Documents (each of clauses (1) and
(2) above, a "LIBERTY MATERIAL ADVERSE EFFECT").
4.2 POWER; AUTHORIZATION AND VALIDITY; CONSENTS; NO CONFLICTS. Such
Liberty Party has all requisite corporate power and authority to enter into and
perform its obligations under this Agreement and each Transaction Document to
be executed and delivered by it pursuant to this Agreement. The execution and
delivery by such Liberty Party of and, subject to the satisfaction of the
conditions set forth in this Agreement, the performance by it of its
obligations under, this Agreement and each Transaction Document to which it is
or will be a party have been duly authorized by all requisite corporate action
of such Liberty Party. This Agreement has been, and each of the other
Transaction Documents to be executed and delivered by such Liberty Party will
be at or prior to the Closing, duly executed and delivered by such Liberty
Party, and assuming the due execution and delivery by each other party hereto
and thereto (other than another Liberty Party), this Agreement constitutes, and
when executed and delivered by such Liberty Party pursuant to this Agreement,
each Transaction Document to which such Liberty Party is a party will
constitute, the legal, valid and binding obligation of such Liberty Party
enforceable in accordance with its terms, except as such enforceability may be
affected by applicable bankruptcy, reorganization, insolvency, moratorium or
similar laws affecting creditors' rights generally or by general equitable
principles. Except for the requirements under the HSR Act and except for any
required notices, Filings, consents, approvals or waivers set forth on Section
4.2 of the Liberty Disclosure Schedule and except for the required filing with
and clearance from the Mexican Competition Commission (the "REQUIRED LIBERTY
CONSENTS"), no consent, approval or
22
waiver of, notice to, or Filing with, any other Person is required, on behalf
of such Liberty Party in connection with the execution, delivery or
performance by such Liberty Party of this Agreement or by such Liberty Party
of any of the other Transaction Documents to which it is a party, or the
consummation of the transactions contemplated hereby and thereby, the failure
of which to be obtained, given or made, individually or in the aggregate,
would have a Liberty Material Adverse Effect. Except as set forth on Section
4.2 of the Liberty Disclosure Schedule, the execution and delivery by such
Liberty Party of this Agreement and the other Transaction Documents to which
they or any of them are parties do not, and the performance by such Liberty
Party, of their respective obligations under this Agreement and the other
Transaction Documents to which they or any of them are parties will not, (i)
violate or conflict with any provision of the certificate of incorporation or
bylaws of such Liberty Party, (ii) assuming that the Required Liberty
Consents of Governmental Authorities are obtained, violate any of the terms,
conditions or provisions of any Law, License or Judgment to which such
Liberty Party is subject or by which any of the foregoing or their respective
assets are bound, except that no representation is made with respect to any
foreign Law of any jurisdiction in which Liberty does not, directly or
through a Subsidiary, own assets or engage in business, or (iii) assuming
that the Required Liberty Consents are given, made and obtained, result in a
violation or breach of, or (with or without the giving of notice or lapse of
time or both) constitute a default (or give rise to any right of termination,
cancellation, acceleration, repurchase, prepayment or repayment or to
increased payments) under or give rise to or accelerate any material
obligation (including any obligation to, or to offer to, repurchase, prepay,
repay or make increased payments) or result in the loss or modification of
any material benefit under, or result in a Lien or Restriction on any of the
assets of such Liberty Party being contributed pursuant to this Agreement
pursuant to any Contract to which such Liberty Party is a party or by which
such Liberty Party or any of its assets is bound, except in the case of any
Law (other than Delaware law), License or Judgment referred to in clause (ii)
and any Contract referred to in clause (iii), as would not, individually or
in the aggregate, have a Liberty Material Adverse Effect.
4.3 BROKERS' AND FINDERS' FEES. There is no broker, finder, investment
banker or similar intermediary which has been retained by, or is authorized to
act on behalf of, any Liberty Party or any of its Subsidiaries or any of their
respective officers or directors who will be entitled to any fee or commission
in connection with this Agreement or upon consummation of the transactions
contemplated hereby.
4.4 LEGAL PROCEEDINGS. There is no Judgment outstanding, or any Legal
Proceeding by or before any Governmental Authority or any arbitrator pending
or, to such Liberty Party's knowledge, threatened in writing, against such
Liberty Party that, individually or in the aggregate, could reasonably be
expected to have a Liberty Material Adverse Effect. Section 4.4 of the Liberty
Disclosure Schedule identifies certain Legal Proceedings pending or threatened
against the Liberty Parties and/or their respective Subsidiaries.
4.5 OWNERSHIP OF UNITED CLASS B STOCK. Liberty Global is the record and
beneficial owner of 9,859,336 shares of United Class B Stock, free and clear of
all Liens and Restrictions, except as set forth in Section 4.5 of the Liberty
Disclosure Schedule or as may be or have been created by this Agreement or the
other Transaction Documents or by United or any of its Affiliates and except for
restrictions on transfer under federal or state securities laws.
23
4.6 [Reserved.]
4.7 BELMARKEN NOTES. Liberty Media, through its ownership of Liberty
Sub, owns the Belmarken Notes or the proceeds of any payments thereunder and
its rights under the Belmarken Loan Agreements, free and clear of all Liens and
Restrictions, other than as may have been created by the Belmarken Loan
Agreements, this Agreement or the other Transaction Documents, or by United or
any of its Controlled Affiliates, except as may arise out of or in connection
with, or result from, a Restructuring Transaction and except for restrictions
on transfer under federal or state securities laws or applicable local laws.
4.8 [Reserved.]
4.9 INVESTMENT INTENT. Such Liberty Party is acquiring shares of New
United Class C Stock pursuant to this Agreement for investment purposes only and
acknowledges that such shares may not be sold without registration under the
Securities Act and applicable state securities laws, unless an exemption
therefrom is available.
4.10 REGISTRATION STATEMENT; PROXY STATEMENT. The information supplied
by such Liberty Party in writing expressly for the purpose of inclusion in the
Registration Statement and the Proxy Statement shall not at the time the
Registration Statement is declared effective by the Commission, on the date the
Proxy Statement is first mailed to the stockholders of United, at the time of
the United Stockholders Meeting or on the Closing Date contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading.
4.11 LIBERTY UPC BONDS. Liberty Media or one or more of its Affiliates
is the record and beneficial owner of the Liberty UPC Bonds, free and clear of
all Liens and Restrictions, other than as may have been created by this
Agreement or the other Transaction Documents or by United or any of its
Controlled Affiliates, except as may arise out of or in connection with, or
result from, a Restructuring Transaction and except for restrictions on
transfer under federal or state securities laws or applicable local laws.
SCHEDULE 1.1 contains a correct and complete description of the number and type
of Liberty UPC Bonds held by Liberty Media and its Controlled Affiliates as of
the date hereof and, as of November 30, 2001, the Liberty UPC Bond Cost.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
OF THE FOUNDERS
Each Founder, severally and not jointly, represents and
warrants to the Liberty Parties as follows, with all such representations and
warranties that speak in the present tense or refer to "the date hereof" or
similar terms being deemed to be made as of the Original Agreement Date:
24
5.1 ORGANIZATION, GOOD STANDING AND AUTHORITY. If such Founder is not
a natural person, such Founder is (i) duly organized, validly existing and in
good standing under the laws of the jurisdiction of its organization, (ii) has
all requisite power and authority to own, lease and operate its properties and
to carry on its business as now being conducted and (iii) is duly qualified or
licensed and in good standing to do business in each jurisdiction in which the
property owned, leased or operated by it or the nature of the business
conducted by it makes such qualification necessary, except in each case where
the failure to be in good standing, to have such power and authority or to be
so qualified or licensed and in good standing has not had and is not reasonably
likely to have (1) a Material Adverse Effect on the applicable Founder Newco or
(2) a material adverse effect on the ability of such Founder or Founder Newco
to perform his or its respective obligations under, and to consummate the
transactions contemplated by, this Agreement and the other Transaction
Documents (each of clauses (1) and (2) above, a "FOUNDER MATERIAL ADVERSE
EFFECT"). To the knowledge of such Founder there are no voting trusts, proxies
or other agreements or understandings with respect to the voting of the capital
stock or ownership interests of United, other than the agreements listed in
Section 5.1 of the Founder Disclosure Schedule, true and complete copies of
which have been provided to the Liberty Parties.
5.2 POWER; AUTHORIZATION AND VALIDITY; CONSENTS; NO CONFLICTS. Such
Founder, in the case of a natural person, has all requisite legal capacity and,
in the case of a Founder that is not a natural person, has all requisite power
and authority, in each case to enter into and perform his or its obligations
under this Agreement and each Transaction Document to be executed and delivered
by him or it pursuant to this Agreement. The execution and delivery by such
Founder of, and, subject to the satisfaction of the conditions set forth in this
Agreement, the performance of his or its obligations under, this Agreement and
each Transaction Document to which he or it is or will be a party have been duly
authorized by all requisite action of such Founder. This Agreement has been duly
executed and delivered by such Founder and, assuming the due execution and
delivery by each Liberty Party, as applicable, this Agreement constitutes, and
when executed and delivered by such Founder pursuant to this Agreement, each
Transaction Document to which such Founder is a party will constitute, the
legal, valid and binding obligation of such Founder, enforceable in accordance
with its terms, except as such enforceability may be affected by applicable
bankruptcy, reorganization, insolvency, moratorium or similar laws affecting
creditors' rights generally or by general equitable principles. Except for the
filing of the certificate of formation for the applicable Founder Newco, and any
required notices, Filings, consents, approvals or waivers set forth on Section
5.2 of the Founder Disclosure Schedule (the "REQUIRED FOUNDER CONSENTS"), no
consent, approval or waiver of, notice to, or Filing with, any other Person is
required, on behalf of such Founder or the applicable Founder Newco in
connection with the execution, delivery or performance by such Founder of this
Agreement or any of the other Transaction Documents to which such Founder is a
party, or the consummation of the transactions contemplated hereby and thereby,
the failure of which to be obtained, given or made, individually or in the
aggregate, would have a Founder Material Adverse Effect or United Material
Adverse Effect. Except as set forth on Section 5.2 of the Founder Disclosure
Schedule, the execution and delivery by such Founder and the applicable Founder
Newco, as applicable, of this Agreement and the other Transaction Documents to
which such Founder or Founder Newco is a party do not, and the performance by
such Founder or Founder Newco of his or its obligations under this Agreement and
the other Transaction Documents to which such Founder or Founder Newco is a
party will not, (i) in the case of each
25
Founder Newco and in the case of a Founder that is not a natural person,
violate such Founder Newco's or Founder's certificate or articles of
incorporation or formation, bylaws, trust agreement, operating agreement,
limited liability company agreement or other equivalent organizational
document, (ii) violate any of the terms, conditions or provisions of any Law,
License or Judgment to which such Founder or Founder Newco is subject or by
which such Founder or Founder Newco or his or its assets are bound, except that
no representation is made with respect to any foreign Law of any jurisdiction
in which United does not, directly or through a Subsidiary, own assets or
engage in business, or (iii) assuming that the Required Founder Consents are
given, made and obtained, result in a violation or breach of, or (with or
without the giving of notice or lapse of time or both) constitute a default (or
give rise to any right of termination, cancellation or acceleration) under, or
result in a Lien on any of the assets of such Founder or Founder Newco pursuant
to any Contract to which such Founder or Founder Newco is a party or by which
such Founder or Founder Newco or any of his or its assets is bound, except in
the case of any Law (other than Delaware law), License or Judgment referred to
in clause (ii) and any Contract referred to in clause (iii), as would not have
a Founder Material Adverse Effect or United Material Adverse Effect.
5.3 FOUNDER NEWCOS. On the Closing Date, the Founder Newco to be
formed by such Founder pursuant to Section 2.1(a) will (a) be a limited
liability company, duly organized, validly existing and in good standing under
the laws of the State of Delaware, (b) have all requisite power and authority
to own its properties and conduct its business, (c) be the record and
beneficial owner of a number of shares of United Common Stock equal to the
number of Founder Shares set forth next to such Founder's name on SCHEDULE
2.1(a) (such shares consisting of shares of United Class B Stock and shares of
United Class A Stock issued upon conversion of shares of United Class B Stock
pursuant to the last sentence of Section 2.1(a)) (together with all dividends
and distributions paid with respect to the Founder Shares after the date hereof
and the right to receive all unpaid dividends and distributions declared or
otherwise payable with respect to such shares of United Common Stock, and
associated stock purchase rights, if any), free and clear of all Liens and
Restrictions except as set forth on Section 5.7 of the Founder Disclosure
Schedule (each of which Liens and Restrictions shall be fully and
unconditionally released prior to or simultaneous with the Founder Newco
Mergers, as set forth in Section 2.2(b)) or as may be or have been created by
this Agreement or the other Transaction Documents or by New United, United or
any of their respective Controlled Affiliates, (d) have all requisite power and
authority to execute and deliver and perform its obligations under the
applicable Founder Newco Merger Agreement and to consummate the transactions
contemplated thereby and (e) will have duly executed and delivered the
applicable Founder Newco Merger Agreement. At all times from the formation of
the Founder Newco to be formed by such Founder pursuant to Section 2.1(a) until
the Closing, (x) no Person other than such Founder shall own any equity
interest whatsoever in such Founder Newco, (y) such Founder shall own all the
limited liability company membership interests in such Founder Newco free and
clear of any Liens and Restrictions, except as may be or have been created by
this Agreement and except for its obligations under the applicable Founder
Newco Merger Agreement, and (z) such Founder Newco shall have no assets other
than the shares of United Class A Stock and United Class B Stock, dividends and
distributions paid or made with respect to the Founder Shares after the date
hereof, rights to receive all unpaid dividends or distributions declared or
otherwise payable with respect to such shares of United Common Stock, and
associated rights referred to in clause (c) of the previous sentence, and no
26
liabilities or obligations, known or unknown, whether absolute, accrued, fixed,
contingent or otherwise, except for its obligations under the applicable
Founder Newco Merger Agreement.
5.4 BROKERS' AND FINDERS' FEES. There is no broker, finder, investment
banker or similar intermediary that has been retained by, or is authorized to
act on behalf of, any Founder or any officer, director or trustee thereof who
will be entitled to any fee or commission in connection with this Agreement or
upon consummation of the transactions contemplated hereby.
5.5 INFORMATION. Such Founder has been given full access to and ample
opportunity to review such financial and other information concerning the
transactions contemplated by this Agreement as he or it has deemed necessary to
make an informed investment decision and acknowledges that each other party has
afforded it the opportunity to make inquiries and obtain information from the
other parties hereto and their respective representatives and advisors.
5.6 LEGAL PROCEEDINGS. There is no Judgment outstanding, or any Legal
Proceeding by or before any Governmental Authority or any arbitrator pending,
or to such Founder's knowledge, threatened in writing, against such Founder or
the applicable Founder Newco that, individually or in the aggregate, could
reasonably be expected to have a Founder Material Adverse Effect or a United
Material Adverse Effect.
5.7 OWNERSHIP OF UNITED CLASS B STOCK AND NEW UNITED CLASS B STOCK.
Such Founder is the record and beneficial owner of the number of shares of
United Class B Stock set forth next to such Founder's name on SCHEDULE 2.1(a),
and after giving effect to the transactions contemplated hereby will be the
record and beneficial owner of the equivalent number of shares of New United
Class B Stock, in each case free and clear of all Liens and Restrictions,
except as set forth in Section 5.7 of the Founder Disclosure Schedule or as may
be or have been created by this Agreement or the other Transaction Documents or
by United or any of its Controlled Affiliates and except for restrictions on
transfer under federal or state securities laws.
5.8 INVESTMENT INTENT. Such Founder is acquiring shares of New United
Class B Stock pursuant to this Agreement for investment purposes only and
acknowledges that such shares may not be sold without registration under the
Securities Act and applicable state securities laws, unless an exemption
therefrom is available.
5.9 REGISTRATION STATEMENT; PROXY STATEMENT. The information supplied
by such Founder in writing expressly for the purpose of inclusion in the
Registration Statement and the Proxy Statement shall not at the time the
Registration Statement is declared effective by the Commission, on the date the
Proxy Statement is first mailed to the stockholders of United, at the time of
the United Stockholders Meeting or on the Closing Date contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
OF UNITED AND NEW UNITED
27
6.1 REPRESENTATIONS AND WARRANTIES OF UNITED. United hereby
represents and warrants to the Liberty Parties and New United as follows,
with all such representations and warranties that speak in the present tense
or refer to "the date hereof" or similar terms being deemed to be made as of
the Original Agreement Date:
(a) ORGANIZATION, GOOD STANDING AND AUTHORITY. United (i) is a
corporation duly incorporated, validly existing and in good standing under the
laws of the State of Delaware, (ii) has all requisite corporate power and
authority to own, lease and operate its properties and carry on its business as
now being conducted, and (iii) is duly qualified or licensed and in good
standing to do business in each jurisdiction in which the property owned, leased
or operated by it or the nature of the business conducted by it makes such
qualification necessary, except where the failure to be so duly qualified or
licensed and in good standing, individually or in the aggregate, would not have
(1) a Material Adverse Effect on United and its Subsidiaries, taken as a whole
(or, after giving effect to the United/New United Merger, the Surviving Entity
and its Subsidiaries, taken as a whole), or (2) a material adverse effect on the
ability of United or New United to perform its obligations under, and consummate
the transactions contemplated by, this Agreement and the other Transaction
Documents (each of clauses (1) and (2) above, a "UNITED MATERIAL ADVERSE
EFFECT"). True and complete copies of the certificate of incorporation and
bylaws of United, each as amended to date, have been filed with the Commission
as exhibits to the United Commission Filings. United is not in violation of any
of the provisions of its certificate of incorporation, bylaws or other
equivalent organizational document.
(b) CAPITALIZATION AND OWNERSHIP.
(i) As of the date hereof, the total authorized
shares of capital stock of United consists
solely of 210,000,000 shares of United Class
A Stock, 30,000,000 shares of United Class B
Stock and 3,000,000 shares of Preferred
Stock, par value US $0.01 per share (the
"UNITED PREFERRED STOCK") (of which 139,031
shares have been designated as Convertible
Preferred Stock, Series B (the "UNITED
SERIES B PREFERRED STOCK"), 425,000 shares
have been designated as 7% Series C Senior
Cumulative Convertible Preferred Stock (the
"UNITED SERIES C PREFERRED STOCK") and
287,500 shares have been designated as 7%
Series D Senior Cumulative Convertible
Preferred Stock (the "UNITED SERIES D
PREFERRED STOCK")). The Board of Directors
of United has duly authorized the creation
of a new series of United Preferred Stock,
consisting of 1,500 authorized shares of
United Preferred Stock designated the Series
E Preferred Stock ("UNITED SERIES E
PREFERRED STOCK"). A true and complete copy
of the Certificate of Designation to
establish the United Series E Preferred
Stock is attached hereto as Exhibit 6.1(b)
(the "SERIES E CERTIFICATE OF DESIGNATION").
As of August 31, 2001, 86,030,256 shares of
United Class A Stock (including 5,569,240
shares of United Class A Stock held by UPC,
but not including 35,708 shares of United
Class A Stock held by United as treasury
shares), 19,027,134 shares of United Class B
Stock, 113,983 shares of United Series B
Preferred Stock, 425,000 shares
28
of United Series C Preferred Stock and
287,500 shares of United Series D
Preferred Stock were issued and
outstanding. All of the outstanding
shares of United Class A Stock, United
Class B Stock and United Preferred Stock
are duly authorized, validly issued,
fully paid and nonassessable and are free
and clear of any Lien or Restriction,
except for Liens and Restrictions created
by the holders thereof and restrictions
on transfer arising under federal or
state securities laws. No shares of
United Series E Preferred Stock will be
issued except pursuant to the
Subscription Agreements as required by
Section 2.1(c). Each share of United
Series E Preferred Stock, when issued in
accordance with the Subscription
Agreements, will be duly authorized,
validly issued, fully paid and
nonassessable and will be free and clear
of any Lien or Restriction, except
pursuant to this Agreement and the other
Transaction Documents and except for
restrictions on transfer arising under
federal or state securities laws. There
are no other outstanding shares of
capital stock or other securities or
ownership interests of United other than
shares of United Class A Stock issued
after August 31, 2001 (i) upon conversion
of shares of Class B Stock or United
Preferred Stock outstanding at August 31,
2001, (ii) paid as dividends on shares of
United Series C Preferred Stock or United
Series D Preferred Stock in accordance
with their terms or (iii) upon the
exercise of options outstanding on such
date as described in the immediately
following sentence that were issued under
United's Stock Option Plans for
Non-Employee Directors and United's 1993
Stock Option Plan (collectively, the
"UNITED STOCK OPTION PLANS," which term
in the case of the 1993 Stock Option Plan
will include the proposed amendment to
such plan in the form set forth in
Paragraph A. of Section 6.1(b) of the
United Disclosure Schedule if adopted by
the stockholders of United at the United
Stockholders Meeting; provided, however,
that notwithstanding anything to the
contrary in Paragraph A. of Section
6.1(b) of the United Disclosure Schedule,
the parties agree that the proposed
amendment to the 1993 Stock Option Plan
shall provide for an increase in the
number of shares of United Common Stock
reserved for issuance under such plan to
39,200,000 shares (no more than 3,000,000
shares of which shall be United Class B
Stock) and an increase in the maximum
number of shares of United Common Stock
subject to options that may be granted to
any one participant under that plan in a
single calendar year to 5,000,000 shares;
and which term in the case of the Stock
Option Plans for Non-Employee Directors,
will include a proposed amendment to
United's 1998 Stock Option Plan for
Non-Employee Directors to provide for an
increase in the number of shares of
United Class A Stock reserved for
issuance under such plan to 3,000,000
shares if adopted by the stockholders of
United at the
29
United Stockholders Meeting) and options
issued after such date under such United
Stock Option Plans in compliance with
Section 7.1(h) of this Agreement. As of
August 31, 2001, United had reserved (i)
5,496,651 shares of United Class A Stock
for issuance upon exercise of outstanding
options issued pursuant to the United
Stock Option Plans and (ii) 1,377,886
shares of United Class A Stock for
issuance upon exercise of stock options
that as of such date remained available
for grant under the United Stock Option
Plans. Other than the options outstanding
at August 31, 2001 described above or
permitted to be granted thereafter as
provided in Section 7.1(h) or as
described in Paragraph C. of Section
6.1(b) of the United Disclosure Schedule
or shares of United Class B Stock and
United Preferred Stock outstanding at
August 31, 2001 that may be converted
into shares of United Class A Stock,
there are no outstanding subscriptions,
options, warrants, puts, calls, trusts
(voting or otherwise), rights,
exchangeable or convertible securities or
other commitments or agreements of any
nature relating to the capital stock or
other securities or ownership interests
of United (including any phantom shares,
phantom equity interests or stock or
equity appreciation rights) or obligating
United, at any time or upon the happening
of any event, to issue, transfer,
deliver, sell, repurchase, redeem or
otherwise acquire, or cause to be issued,
transferred, delivered, sold,
repurchased, redeemed or otherwise
acquired, any of its capital stock or any
phantom shares, phantom equity interests
or stock or equity appreciation rights,
or other ownership interests of United or
obligating United to grant, extend or
enter into any such subscription, option,
warrant, put, call, trust, right,
exchangeable or convertible security,
commitment or agreement. Without limiting
the generality of the foregoing (x) since
June 25, 2000 United has not issued,
granted or sold, or agreed to issue,
grant or sell, any shares of United Class
B Stock, any other High Vote Securities
or any Rights to acquire any of the
foregoing and (y) from the date of this
Agreement until the Closing Date or the
earlier termination of this Agreement,
United shall not issue, grant or sell, or
agree to issue, grant or sell, any shares
of United Class B Stock, any other High
Vote Securities or any Rights to acquire
any of the foregoing, other than the
Class B Options, as defined in Paragraph
B.2. of Section 6.1(b) of the United
Disclosure Schedule (the "CLASS B
OPTIONS"), which Class B Options shall,
if granted, have been granted in
accordance with Section 7.1(h). Except
for the agreements listed in Section 5.1
of the Founder Disclosure Schedule, to
the knowledge of United, there are no
voting trusts, proxies or other
agreements or understandings with respect
to the voting of the capital stock or
ownership interests of United.
30
(ii) The total authorized shares of capital stock
of the Surviving Entity from and after the
Closing will consist solely of 1,500 shares
of Surviving Entity Class A Stock, 1,500
shares of Surviving Entity Class B Stock,
301,500 shares of Surviving Entity Class C
Stock, 139,031 shares of Convertible
Preferred Stock, Series B, par value $0.01
per share, 425,000 shares of 7% Series C
Senior Cumulative Convertible Preferred
Stock, par value $0.01 per share, and
287,500 shares of 7% Series D Senior
Cumulative Convertible Preferred Stock, par
value $0.01 per share. As of immediately
following the Closing, there will be no
issued and outstanding shares of capital
stock or other securities or ownership
interests of the Surviving Entity other than
1,500 shares of Surviving Entity Class A
Stock, 1,500 shares of Surviving Entity
Class B Stock and 300,000 shares of
Surviving Entity Class C Stock. Pursuant to
the terms of the Surviving Entity Charter,
the Surviving Entity may only issue shares
of the Surviving Entity's preferred stock of
any series if the Board of Directors of New
United first approves such issuance by the
vote specified in the New United Charter.
The shares of Surviving Entity Class A
Stock, Surviving Entity Class B Stock and
Surviving Entity Class C Stock to be issued
pursuant to this Agreement and the other
Transaction Documents have been duly
authorized, and, when issued, will be
validly issued, fully paid, nonassessable,
free of preemptive rights and free of Liens
and Restrictions, other than Liens or
Restrictions created by the holder thereof
and restrictions on transfer under federal
and state securities laws. To the knowledge
of United, there are no voting trusts,
proxies or other agreements or
understandings with respect to the voting of
the capital stock or ownership interests of
the Surviving Entity (other than this
Agreement and the other Transaction
Documents). As of the Closing Date there
will be no outstanding subscriptions,
options, warrants, puts, calls, trusts
(voting or otherwise), rights, exchangeable
or convertible securities or other
commitments or agreements (other than this
Agreement and the other Transaction
Documents) of any nature relating to the
capital stock or other securities or
ownership interests of the Surviving Entity
(including any phantom shares, phantom
equity interests or stock or equity
appreciation rights) or obligating the
Surviving Entity, at any time or upon the
happening of any event, to issue, transfer,
deliver, sell, repurchase, redeem or
otherwise acquire, or cause to be issued,
transferred, delivered, sold, repurchased,
redeemed or otherwise acquired, any of its
capital stock or any phantom shares, phantom
equity interests or stock or equity
appreciation rights, or other ownership
interests of the Surviving Entity or
obligating the Surviving Entity to grant,
extend or enter into any such subscription,
option, warrant, put,
31
call, trust, right, exchangeable or
convertible security, commitment or
agreement.
(c) POWER; AUTHORIZATION AND VALIDITY; CONSENTS; NO CONFLICTS.
(i) United and its applicable Subsidiaries each
has all requisite power and authority to
execute and deliver and perform its
obligations under this Agreement and each
other Transaction Document to be executed
and delivered by it pursuant to this
Agreement, and to consummate the
transactions contemplated hereby and
thereby. The execution and delivery by
United or the applicable Subsidiary thereof
of this Agreement and the other Transaction
Documents to which it is or will be a party
and, subject to the satisfaction of the
conditions set forth in this Agreement, the
consummation of the transactions
contemplated hereby and thereby and the
performance by it of its obligations
hereunder and thereunder have been duly
authorized by (x) the unanimous vote of the
Board of Directors of United (excluding
directors designated by Liberty Media), (y)
the unanimous vote of the members of the
Board of Directors of United who are not
Founders, Permitted Transferees of a
Founder, officers or directors or designees
of Liberty Media or officers or directors of
United, voting separately, and (z) except
for the approval of the stockholders of
United, all other requisite corporate
action. This Agreement has been, and each of
the other Transaction Documents to be
executed and delivered by United and each
applicable Subsidiary thereof will be at or
prior to the Closing, duly and validly
executed and delivered by United or the
applicable Subsidiary, as the case may be.
Assuming the due execution and delivery by
each Liberty Party, as applicable, this
Agreement constitutes, and each of the other
Transaction Documents when executed and
delivered by United or the applicable
Subsidiary thereof will constitute, the
legal, valid and binding obligation of
United or the applicable Subsidiary thereof,
as the case may be, enforceable in
accordance with its terms, except as such
enforceability may be affected by applicable
bankruptcy, reorganization, insolvency,
moratorium or similar laws affecting
creditors' rights generally or by general
equitable principles.
(ii) Except for the requirements under the HSR
Act, the filing of the Certificate of Merger
in connection with the United/New United
Merger and any required notices, Filings,
consents, approvals or waivers set forth in
Paragraph A. of Section 6.1(c)(ii) of the
United Disclosure Schedule that, as
indicated on such Section of the United
Disclosure Schedule as "Required United
Consents," have not been obtained or made as
of the date hereof (the "REQUIRED UNITED
CONSENTS"), no consent, approval or waiver
of, notice to, or
32
Filing with, any other Person is required
on behalf of United or any of its
Subsidiaries in connection with the
execution, delivery or performance by
United of this Agreement or by United or
its applicable Subsidiaries, as the case
may be, of any of the other Transaction
Documents to which it is or will be a
party, or the consummation of the
transactions contemplated hereby or
thereby (including the United/New United
Merger), the failure of which to be
obtained, given or made, individually or
in the aggregate, would have a United
Material Adverse Effect or a New United
Material Adverse Effect. The execution
and delivery of this Agreement and the
other Transaction Documents by United and
its applicable Subsidiaries do not, and
the performance by United and its
applicable Subsidiaries of their
respective obligations hereunder and
thereunder will not, (x) assuming the
approval of United's stockholders
described in Section 7.2 is obtained,
violate or conflict with any provision of
the certificate of incorporation, bylaws,
operating agreement or other
organizational or governing documents of
United or any of its Subsidiaries, (y)
assuming that the Required United
Consents of Governmental Authorities are
obtained, except as described in footnote
1 to Section 6.1(c)(ii) of the United
Disclosure Schedule, violate any of the
terms, conditions or provisions of any
Law, License or Judgment to which United
or any of its Subsidiaries is subject or
by which any of the foregoing or any of
their respective assets are bound, except
that no representation is made with
respect to any foreign Law of any
jurisdiction in which United does not,
directly or through a Subsidiary, own
assets or engage in business, or (z)
assuming that the Required United
Consents are given, made and obtained,
result in a violation or breach of, or
(with or without the giving of notice or
lapse of time or both) constitute a
default (or give rise to any right of
termination, cancellation, amendment,
acceleration, repurchase, prepayment or
repayment or to increased payments)
under, or give rise to or accelerate any
material obligation (including any
obligation to, or to offer to,
repurchase, prepay, repay or make
increased payments) or result in the loss
or modification of any material benefit
under, or result in a Lien or Restriction
on any of the assets of United or any of
its Subsidiaries pursuant to, any note,
bond, indenture, debenture, security
agreement, trust agreement, lien,
mortgage, lease, agreement, contract,
license, franchise, permit, guaranty,
joint venture agreement, or other
agreement, instrument, understanding,
commitment or obligation, oral or written
(collectively "CONTRACTS"), to which
United or any of its Subsidiaries is a
party or by which United or any of its
Subsidiaries or any of their respective
assets is bound, except in the case of
any Law (other than Delaware law),
License or Judgment referred to in clause
(y)
33
and any Contract (other than, for
purposes of Article XV only, any Contract
evidencing or securing any outstanding
indebtedness of United or any of its
Subsidiaries or pursuant to which any
such outstanding indebtedness was
incurred) referred to in clause (z), as
would not, individually or in the
aggregate, have a United Material Adverse
Effect or a New United Material Adverse
Effect.
(d) BROKERS' AND FINDERS' FEES. Except for the amounts
disclosed in Section 6.1(d) of the United Disclosure Schedule for which United
will have sole responsibility and liability, there is no broker, finder,
investment banker or similar intermediary that has been retained by, or is
authorized to act on behalf of, United or any of its Subsidiaries or any of
their respective officers or directors who will be entitled to any fee or
commission in connection with this Agreement or upon consummation of the
transactions contemplated hereby.
(e) LEGAL PROCEEDINGS. There is no Judgment outstanding or any
Legal Proceeding by or before any Governmental Authority or any arbitrator
pending or, to United's knowledge, threatened in writing against United or any
of its Subsidiaries that, individually or in the aggregate, could reasonably be
expected to have a United Material Adverse Effect. Section 6.1(e) of the United
Disclosure Schedule identifies certain Legal Proceedings pending or threatened
against United and/or its Subsidiaries. United has provided to Liberty Media
true and complete copies of any notices or correspondence received by United or
any of its subsidiaries or by United A/P or any of its subsidiaries from any
Person since June 25, 2000 relating to any default, acceleration or breach of,
or potential default, acceleration or breach of, or dispute regarding, any
material Contract evidencing or securing any outstanding indebtedness of United
or any of its subsidiaries or United A/P or any of its subsidiaries or pursuant
to which any such outstanding indebtedness was incurred.
(f) SUBSIDIARIES AND AFFILIATES; ASSETS.
(i) Section 6.1(f)(i) of the United Disclosure
Schedule (x) lists each direct and indirect
Subsidiary of United and each Person in
which United directly or indirectly through
a Subsidiary owns an investment accounted
for by the equity method (an "EQUITY
AFFILIATE"), (y) except as set forth in the
final sentence of the preambulatory language
to Section 6.1(f)(i) of the United
Disclosure Schedule, describes the number
and kind of equity interests or securities,
including interests or securities
convertible into or exchangeable or
exercisable for any equity interest or
security, in each Subsidiary and Equity
Affiliate owned directly or indirectly by
United (each a "UNITED INVESTMENT") and (z)
lists all material agreements to which
United or any of its Subsidiaries are
parties evidencing such equity interests or
securities, pursuant to which such interests
or securities are held, evidencing
Restrictions (including Partner's Purchase
Rights) affecting such interests or
securities or entered into in connection
with the acquisition of such interests or
securities (unless all liabilities,
obligations and commitments thereunder have
been performed in full and there are
34
no remaining liabilities, obligations or
commitments (actual, contingent or
otherwise) thereunder) (the "UNITED
INVESTMENT AGREEMENTS"). True and complete
copies of the United Investment Agreements
have been provided to Liberty Media. With
respect to each United Investment Agreement
that is not in English, United has provided
to Liberty Media a true and complete summary
of the material terms and conditions of such
United Investment Agreement insofar as such
terms and conditions relate to any
representation, warranty or covenant made by
United in this Agreement that is qualified
by reference to the United Disclosure
Schedule or to the United Investment
Agreements, and the Liberty Parties may rely
on each such summary as the complete
articulation of the terms of the applicable
United Investment Agreement as such terms
relate to any representation, warranty or
covenant made by United in this Agreement
(notwithstanding any language to the
contrary contained in any such summary).
United or the applicable Subsidiary thereof
has good and valid title to the United
Investments, free and clear of all material
Liens and Restrictions, other than as set
forth in Section 6.1(f)(i) of the United
Disclosure Schedule or as may have been
created by this Agreement and except for
restrictions on transfer under federal or
state securities laws or applicable local
laws. Assuming the due execution and
delivery by each of the other parties
thereto, the United Investment Agreements
constitute legal, valid and binding
obligations of United or the applicable
Subsidiary that is a party to such United
Investment Agreement. Except as set forth in
Section 6.1(f)(i) of the United Disclosure
Schedule, there is no Legal Proceeding
pending, or to the best of United's
knowledge, threatened in writing, against
United or any of its Subsidiaries
specifically relating to any of such United
Investments or United Investment Agreements.
(ii) Each of United's Subsidiaries and Equity
Affiliates (x) is duly organized, validly
existing and in good standing under the laws
of the jurisdiction of its organization, (y)
has all requisite power and authority to
own, lease and operate its properties and to
carry on its business as it is now being
conducted and (z) is duly qualified to do
business and is in good standing in each
jurisdiction in which the properties owned,
leased or operated by it, or the nature of
its activities make such qualification
necessary, except in each case when the
failure to be in good standing, to have such
power and authority or to be so duly
qualified or licensed and in good standing,
individually or in the aggregate, would not
have a United Material Adverse Effect.
(iii) Except as set forth in Section 6.1(f)(iii)
of the United Disclosure Schedule, the
assets owned or leased by United and its
Subsidiaries
35
are suitable and adequate for the conduct
of their respective businesses and United
or the applicable Subsidiary has good and
valid title to or valid leasehold or
other contractual interests in all such
assets that are material to its business,
taken as a whole, free and clear of all
Liens other than Permitted Encumbrances
and Liens the existence of which does not
have and is not reasonably expected to
have a United Material Adverse Effect.
(iv) None of United or any of its Subsidiaries
has guaranteed any of the liabilities of
United Australia/Pacific, Inc. ("UNITED
A/P") or any of its subsidiaries, except as
provided in SCHEDULE 6.1(f)(iv). A default
under or acceleration of any of the
liabilities of United A/P or any of its
subsidiaries, or a bankruptcy or similar
event involving United A/P or any of its
subsidiaries, would not (with or without the
giving of notice or lapse of time or both)
result in the acceleration of, or give rise
to the right to accelerate, any of the debt
of United or any of its Subsidiaries.
(g) COMMISSION FILINGS; FINANCIAL STATEMENTS.
(i) United has heretofore made available to
Liberty Media the following, in the form
filed with the Commission (in each case
together with all exhibits and schedules
filed therewith and amendments thereto filed
prior to the date of this Agreement) (the
"UNITED COMMISSION FILINGS"): (A) United's
Annual Reports on Form 10-K for the fiscal
years ended February 29, 1996, February 28,
1997, and the transition report for the ten
months ended December 31, 1998, as amended
by Form 10-K/A, and the Annual Reports on
Form 10-K for the fiscal years ended
December 31, 1999 and 2000 (the last such
report being the "UNITED FORM 10-K"), (B)
United's Quarterly Reports on Form 10-Q for
the fiscal quarters ended June 30, 2001 (the
"UNITED JUNE 10-Q") and September 30, 2001,
(C) UPC's Annual Reports on Form 10-K for
the fiscal years ended December 31, 1998,
1999 and 2000 (the last such report being
the "UPC FORM 10-K"), (D) UPC's Quarterly
Reports on Form 10-Q for the fiscal quarters
ended June 30, 2001 (the "UPC JUNE 10-Q")
and September 30, 2001, (E) all definitive
proxy and information statements relating to
meetings of United's and UPC's stockholders
since January 1, 1997 to the date of this
Agreement, and (F) all other reports,
registration statements, forms and other
documents filed by United and its
Subsidiaries with the Commission since
January 1, 1997 to the date of this
Agreement (all such documents referred to in
this clause (F) filed in 2001 and publicly
available on or prior to April 2, 2001 (each
in the form publicly available on April 2,
2001), together with the United Form 10-K
and the UPC Form 10-K (each in the form
publicly available on April 2, 2001), and
the United June 10-Q and the UPC June 10-
36
Q (each in the form publicly available on
August 14, 2001), the "UNITED 2001
COMMISSION FILINGS"). The filings made
available pursuant to the preceding sentence
constitute all of the reports, registration
statements, proxy or information statements,
documents and forms (other than preliminary
material) that United and its Subsidiaries
have been required to file with the
Commission since January 1, 1997. All such
filings and all reports, registration
statements, proxy or information statements
and other documents filed by United and its
Subsidiaries with the Commission on or after
the date hereof but prior to the Closing
Date (x) complied, or will comply, in all
material respects with the Securities Act or
the Exchange Act, as the case may be, and
the rules and regulations under each such
Act, and (y) did not at the time they were
filed, and will not at the time they are
filed, with the Commission contain any
untrue statement of a material fact or omit
to state a material fact required to be
stated therein or necessary in order to make
the statements made therein, in the light of
the circumstances in which they were made,
not misleading.
(ii) Except as disclosed in Section 6.1(g) of the
United Disclosure Schedule, each of the
consolidated financial statements (including
the notes thereto) contained in the United
Commission Filings and each other report,
registration statement, form and other
document filed by United and its
Subsidiaries with the Commission from and
after the date hereof was or will be
prepared in accordance with GAAP
consistently applied (except as may be
indicated in the notes thereto) and
Regulation S-X under the Exchange Act and
fairly presents or will fairly present the
consolidated financial position, results of
operations and cash flows of the registrant
and its consolidated subsidiaries as of the
respective dates thereof and for the
respective periods indicated therein subject
in the case of unaudited interim financial
statements to normal recurring year-end
adjustments.
(iii) Except (i) for liabilities and obligations
imposed under or pursuant to this Agreement,
the other Transaction Documents or the
United Investment Agreements or (ii) as
reflected in the United 2001 Commission
Filings or in Section 6.1(g) of the United
Disclosure Schedule, neither United nor any
of its Subsidiaries has any liability,
obligation or commitment of any kind or
nature, whether due or to become due,
whether absolute, accrued, fixed or
contingent or otherwise, that in any case or
in the aggregate is or may be material to
the business, assets, results of operations
or financial condition of United and its
Subsidiaries taken as a whole, except
liabilities and obligations that arose since
June 30, 2001 in the ordinary course of
business or that arise from changes in
general business or economic conditions or
from events affecting
37
the industries in which United and its
Subsidiaries operate generally (none of
which has resulted or is reasonably
likely to result in a United Material
Adverse Effect or a New United Material
Adverse Effect).
(h) ABSENCE OF CERTAIN DEVELOPMENTS. Since June 30, 2001,
other than as otherwise permitted, contemplated or required by this Agreement or
the other Transaction Documents, (x) the business of United and each of its
Subsidiaries has been operated only in the ordinary course, (y) to United's
knowledge, except to the extent disclosed in Section 6.1(h) of the United
Disclosure Schedule, no event has occurred and no condition exists that,
individually or together with other events and conditions, has had or, insofar
as United can reasonably foresee, is reasonably likely to have, a United
Material Adverse Effect or a New United Material Adverse Effect, and (z) there
has been no material change in the accounting methods, practices or policies of
United or any of its Subsidiaries except as required by changes in GAAP.
(i) LEGAL COMPLIANCE. Except as set forth in the United 2001
Commission Filings or in Section 6.1(i) of the United Disclosure Schedule,
United and its Subsidiaries (x) are in compliance with, and have conducted their
respective businesses so as to comply with, the terms of their respective
Licenses and all applicable Laws, and (y) have all Licenses that are required to
operate their respective businesses, except in such cases where the failure to
so comply or to have such Licenses, either individually or in the aggregate, has
not had and is not reasonably expected to have a United Material Adverse Effect
or a New United Material Adverse Effect. Without limiting the generality of the
foregoing, the operations of the businesses, assets and facilities of United
and, to United's knowledge, its Subsidiaries are in compliance with all
applicable Environmental and Health Laws, if any, except where the failure to
comply has not had and is not reasonably expected to have a United Material
Adverse Effect or a New United Material Adverse Effect.
(j) TAXES. Except as otherwise set forth in Section 6.1(j) of
the United Disclosure Schedule:
(i) Each of United and each of United's
Subsidiaries identified in Paragraph A. of
Section 6.1(j) of the United Disclosure
Schedule (the "MATERIAL UNITED
SUBSIDIARIES") has timely filed all material
Tax Returns that it was required to file.
All such Tax Returns are true and complete
in all material respects. All material Taxes
owed by United and the Material United
Subsidiaries (whether or not shown on any
Tax Return) have been timely paid. There are
no Liens for material Taxes (other than for
current Taxes not yet due and payable or for
items being contested in good faith and for
which there are adequate reserves in
accordance with GAAP on the books of the
applicable entity) on any of the assets of
United or the Material United Subsidiaries.
(ii) Each of United and each of the Material
United Subsidiaries has withheld and paid
all material Taxes required to have been
38
withheld and paid in connection with amounts
paid or owing to any employee, independent
contractor or other third party.
(iii) No material deficiencies for any Taxes have
been proposed, asserted or assessed against
United or any of the Material United
Subsidiaries that are not adequately
reserved for in accordance with GAAP in all
cases applied on a consistent basis. No Tax
Returns of United or any of the Material
United Subsidiaries are currently the
subject of an audit.
(iv) None of United or the Material United
Subsidiaries has any current non-contingent
liability for the Taxes of any Person (other
than United and its Subsidiaries) under
Treasury Regulations Section 1.1502-6 (or
any similar provision of state, local, or
foreign law), as a transferee or successor,
by Contract, or otherwise.
(v) If the income of United or any of the
Material United Subsidiaries was required
under federal, state, local, or foreign tax
rules, to be included on a consolidated,
unitary, combined or other such Tax Return
filed by a Person other than any of United
or the Material United Subsidiaries, each
such group has filed all material Tax
Returns that it was required to file with
respect to United or any of the Material
United Subsidiaries for each period during
which United or any of the Material United
Subsidiaries was a member of such group. All
such material Tax Returns were correct and
complete in all material respects insofar as
they relate to United and the Material
United Subsidiaries. All material Taxes owed
by such group with respect to United and the
Material United Subsidiaries (whether or not
shown on a Tax Return) have been paid for
each taxable period during which United or
any of the Material United Subsidiaries was
a member of its respective group.
(vi) The normal period within which to examine
and/or assess Taxes on the income of United
or any of the Material United Subsidiaries
has not been extended with respect to any
such Person by waiver of, or agreement to
extend, the applicable statute of
limitations or otherwise.
(vii) Neither United nor any of the Material
United Subsidiaries has filed a consent
under Section 341(f) of the Code.
(viii) Neither United nor any of the Material
United Subsidiaries has made any payments,
nor are any of them obligated to make any
payments, and none of them is a party to any
agreement that under certain circumstances
could obligate it to make any payments as a
result of the transactions contemplated by
this Agreement or the other Transaction
Documents or otherwise to any employee,
39
member, officer or director of, or any
independent contractor or other person who
performs personal services for, any of
United or any of the Material United
Subsidiaries who is a "disqualified
individual" (as such term is defined in
proposed Treasury Regulation section
1.280G-1) under any employment, severance or
termination agreement, other compensation
arrangement or employee benefit plan
currently in effect which would be
characterized as an "excess parachute
payment" (as such term is defined in Section
280G(b)(1) of the Code).
(ix) United has not taken any action and has no
present plan or intention to take any action
that would cause the transactions
contemplated hereby or by the other
Transaction Documents not to qualify as a
tax-free transaction pursuant to Section 351
of the Code.
(x) Neither United nor any of the Material
United Subsidiaries is a party to any tax
sharing or allocation agreement with any
other Person.
(xi) Other than the Material United Subsidiaries,
none of United's subsidiaries would,
individually or all such subsidiaries
considered in the aggregate, constitute a
"significant subsidiary" of United as such
term is defined in Section 1-02(w) of
Regulation S-X promulgated under the
Exchange Act; PROVIDED THAT, for such
purposes the term "5 percent" shall be
substituted in each instance in which the
term "10 percent" appears in Section 1-02(w)
of Regulation S-X.
(k) CONTRACTS AND COMMITMENTS. Except for Contracts entered
into after June 30, 2001 that are disclosed in Section 6.1(k) of the United
Disclosure Schedule, all Contracts to which United or any of its Subsidiaries is
a party or by which any of them or their respective businesses or assets are
bound that are to be performed in whole or in part after the date hereof and
that are required to be filed with the Commission as "material contracts"
pursuant to Item 601 of Regulation S-K have been filed with the United 2001
Commission Filings. Except as disclosed in Section 6.1(k) of the United
Disclosure Schedule, there is no material Contract or Judgment binding upon
United or any of its Subsidiaries (i) that has had or could reasonably be
expected to have the effect of prohibiting or materially impairing any current
business practice of, or the conduct of business as currently conducted by,
United or its Subsidiaries or limiting the right of United or any of its
Subsidiaries to compete in any line of business, (ii) that purports to or would
bind New United or any of its Subsidiaries or any of the Liberty Parties or any
of their respective Affiliates after giving effect to the transactions
contemplated hereby or (iii) in respect of which, whether before or after giving
effect to the transactions contemplated hereby or by the other Transaction
Documents, any act or omission of any of the Liberty Parties or any of their
respective Affiliates would result in a violation or breach thereof, or
constitute (with or without the giving of notice or lapse of time or both), or
permit any Person to declare, a default or event of default thereunder, or give
rise to any right of termination, cancellation, amendment,
40
acceleration, repurchase, prepayment or repayment or to increased payments
thereunder, or give rise to or accelerate any obligation (including, without
limitation, any obligation to, or to offer to, repurchase, prepay, repay or
make increased payments) or result in the loss or modification of any rights
or benefits thereunder, or result in any Lien or Restriction on any of the
assets of, or otherwise have any material adverse effect on, United or any of
its Affiliates. True and complete copies of all Contracts listed in the
United Commission Filings or in Section 6.1(k) of the United Disclosure
Schedule have been provided to Liberty Media. Each of United and its
Subsidiaries has fulfilled in all material respects, or taken all actions
necessary to enable it to fulfill in all material respects when due, its
obligations under each of such Contracts to which it is a party, and none of
United or any or its Subsidiaries is in breach or violation of, or in default
(with or without the giving of notice or lapse of time or both) under any of
such Contracts, which breach, violation or default individually or in the
aggregate would reasonably be expected to have a United Material Adverse
Effect or a New United Material Adverse Effect.
(l) INTANGIBLE PROPERTY. Except as set forth in the United
2001 Commission Filings or Section 6.1(l) of the United Disclosure Schedule, one
or more of United and its Subsidiaries owns, or is licensed or otherwise
possesses legally enforceable rights to use, all Intellectual Property that is
used in the business of United and its Subsidiaries as currently conducted,
except to the extent that the failure to have such rights has not had and is not
reasonably likely to have a United Material Adverse Effect. Except as set forth
in the United 2001 Commission Filings or Section 6.1(l) of the United Disclosure
Schedule and except, in the case of clauses (iii) and (iv), to the extent that
any of the following has not had and is not reasonably likely to have a United
Material Adverse Effect, (i) neither United nor any of its Subsidiaries has
received notice of any claim of infringement of the rights of others with
respect to any patents, trademarks, service marks, trade names, copyrights or
other Intellectual Property used or owned by United or any of its Subsidiaries,
(ii) neither United nor any of its Subsidiaries has any knowledge that United or
any of its Subsidiaries is infringing upon or otherwise violating, or has
infringed upon or otherwise violated, the rights of any third party with respect
to any patent, trademark, trade name, service ▇▇▇▇, copyright or other
Intellectual Property, (iii) no current or former employee of United or any of
its Subsidiaries is or was a party to any confidentiality agreement and/or
agreement not to compete that restricts or forbids such employee's performance
of any activity that such employee was hired to perform, and (iv) none of United
or any of its Subsidiaries is currently using or has in the past used without
appropriate authorization, any confidential information or trade secrets of any
third party. Since January 1, 1997, neither United nor any of its Subsidiaries
has received any notice alleging such conduct.
(m) INTERESTED PARTY TRANSACTIONS. Except to the extent
reflected in the United 2001 Commission Filings, Section 6.1(m) of the United
Disclosure Schedule lists all transactions between United or any of its
Subsidiaries, on the one hand, and any director, executive officer (or immediate
family member of such director or executive officer) or stockholder of United or
(other than United) any of its Subsidiaries, on the other hand, in which the
amount involved exceeds US $60,000 that is required to be disclosed pursuant to
Item 404 of Regulation S-K under the Exchange Act, other than transactions
required or permitted by this Agreement or the other Transaction Documents and
transactions otherwise disclosed in the United Disclosure Schedule or pursuant
to Contracts so disclosed.
41
(n) MINUTE BOOKS. United has made available to Liberty Media
copies of the minute books of United and each of its wholly owned Subsidiaries.
Such minute books contain summaries of all meetings of directors and
shareholders or actions by written consent since the time of the applicable
Person's incorporation or organization, and such summaries are true and complete
in all material respects and reflect all transactions referred to in such
minutes accurately in all material respects.
(o) DGCL SECTION 203 AND SIMILAR LAWS. Prior to the execution
hereof, the respective Boards of Directors of United and each of its
Subsidiaries approved each of the transactions contemplated by this Agreement
and the other Transaction Documents to the extent necessary to render
inapplicable thereto the limitations on business combinations contained in
Section 203 of the Delaware General Corporation Law and any similar provision of
any other Law.
(p) COMPANY ACTION. The Board of Directors of United (at a
meeting duly called and held) has by (i) the unanimous vote of the Board of
Directors of United (excluding directors designated by Liberty Media) and (ii)
the unanimous vote of the members of the Board of Directors of United who are
not Founders, Permitted Transferees of a Founder, officers or directors or
designees of Liberty Media or officers or directors of United, voting
separately: (A) determined and declared that this Agreement, the other
Transaction Documents (including the United/New United Merger Agreement) and the
transactions contemplated hereby and thereby (including the United/New United
Merger) are advisable and in the best interests of United and its stockholders,
(B) directed that such transactions (including the United/New United Merger) be
submitted for consideration by United's stockholders at a special meeting of
stockholders, and (C) adopted resolutions approving this Agreement and the other
Transaction Documents and recommending approval and adoption hereof and thereof
and of such transactions by United's stockholders.
(q) FAIRNESS OPINIONS. Prior to the Amendment Date, the Board
of Directors of United has received the written opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co.
Incorporated ("▇▇▇▇▇▇ ▇▇▇▇▇▇▇"), satisfactory in form, scope and substance to
United, as required pursuant to Section 4.11 of the Indenture with respect to
the transactions contemplated by the Stock Purchase Agreements, dated as of the
Original Agreement Date, between Liberty UCOMA LLC, a Delaware limited liability
company, and United (the "STOCK PURCHASE FAIRNESS OPINION"). Prior to the
Amendment Date, United has provided Liberty Media with a true and complete copy
of the Stock Purchase Fairness Opinion, and Liberty Media hereby acknowledges
receipt thereof.
(r) VOTE REQUIRED. The only vote of stockholders of United
required under the DGCL, NASD requirements and the certificate of incorporation
and bylaws of United in order to approve the transactions contemplated by this
Agreement and the other Transaction Documents is the affirmative vote in favor
of the United/New United Merger and the other transactions contemplated by this
Agreement and the other Transaction Documents of a majority of the total number
of votes entitled to be cast by the holders of the issued and outstanding shares
of United Class A Stock and United Class B Stock voting as a single class, and
no other vote or approval of or other action by the holders of any capital stock
of United is required for such approval or for the consummation of any of the
transactions contemplated hereby or by the other Transaction Documents.
42
(s) NO INVESTMENT COMPANY. United is not an "investment
company" subject to the registration requirements of, or regulation as an
investment company under, the Investment Company Act of 1940.
(t) REGISTRATION STATEMENT; PROXY STATEMENT. The Registration
Statement and the Proxy Statement, except for any information supplied by any
Liberty Party in writing expressly for purpose of inclusion therein, shall not
at the time the Registration Statement is declared effective by the Commission,
on the date the Proxy Statement is first mailed to the stockholders of United,
at the time of the United Stockholders Meeting or on the Closing Date contain
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
(u) [Reserved.]
(v) PRIORITY TELECOM. Neither United nor any of its
Subsidiaries (including UPC and its Subsidiaries) has taken, or permitted to be
taken, any action to satisfy a Stock Purchase Option (as defined in the Priority
Telecom Shareholders Agreement) through the issuance or delivery of securities
of United or UPC.
6.2 REPRESENTATIONS AND WARRANTIES OF NEW UNITED. Assuming the
accuracy of the representations and warranties of the Liberty Parties and the
Founders contained in this Agreement and except as disclosed in the Liberty
Disclosure Schedule, New United hereby represents and warrants to the Liberty
Parties and the Founders as follows, with all such representations and
warranties that speak in the present tense or refer to "the date hereof" or
similar terms being deemed to be made as of the Original Agreement Date:
(a) ORGANIZATION, GOOD STANDING AND AUTHORITY. Each of New
United and its Subsidiaries (i) is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization, (ii) has all
requisite power and authority to own, lease and operate its properties and carry
on its business as now being conducted, and (iii) is duly qualified or licensed
and in good standing to do business in each jurisdiction in which the property
owned, leased or operated by it or the nature of the business conducted by it
makes such qualification necessary, except where the failure to be so duly
qualified or licensed and in good standing, individually or in the aggregate,
would not have (1) a Material Adverse Effect on New United and its Subsidiaries,
taken as a whole, or (2) a material adverse effect on the ability of New United
to perform its obligations under, and consummate the transactions contemplated
by, this Agreement and the other Transaction Documents (each of clauses (1) and
(2) above, a "NEW UNITED MATERIAL ADVERSE EFFECT"). True and complete copies of
the New United Charter (in the form in which it will be restated pursuant to
Section 2.1(b)), the New United By-laws (in the form in which they will be
restated pursuant to Section 2.1(b)), and United/New United Merger Sub's
Certificate of Incorporation (the "UNITED/NEW UNITED MERGER SUB CHARTER") and
By-laws (the "UNITED/NEW UNITED MERGER SUB BY-LAWS") are attached hereto as
Exhibits 2.1(b)-1, 2.1(b)-2, 6.2(a)-1 and 6.2(a)-2, respectively. New United has
heretofore provided Liberty with true and complete copies of the Certificate of
Incorporation and By-laws of New United as in effect on the date hereof. Neither
New United nor United/New United Merger Sub is in violation of any of the
provisions of its Certificate of Incorporation or By-laws.
43
(b) CAPITAL STOCK.
(i) The total authorized shares of capital stock
of New United consists solely of one share
of Common Stock, par value US $0.01 per
share ("EXISTING NEW UNITED COMMON STOCK").
As of the date hereof there are no issued or
outstanding shares of Existing New United
Common Stock other than one share of
Existing New United Common Stock held,
beneficially and of record, by ▇▇▇▇▇▇▇▇▇. As
of the date hereof there are no outstanding
subscriptions, options, warrants, puts,
calls, trusts (voting or otherwise), rights,
exchangeable or convertible securities or
other commitments or agreements of any
nature (other than this Agreement and the
other Transaction Documents) relating to the
capital stock or other securities or
ownership interests of New United (including
any phantom shares, phantom equity interests
or stock or equity interests or stock or
equity appreciation rights) or obligating
New United at any time or upon the happening
of any event, to issue, transfer, deliver,
sell, repurchase, redeem or otherwise
acquire, or cause to be issued, transferred,
delivered, sold, repurchased, redeemed or
otherwise acquired, any of its capital stock
or any phantom shares, phantom equity
interests or stock or equity appreciation
rights, or other ownership interests of New
United or obligating New United to grant,
extend or enter into any such subscription,
option, warrant, put, call, trust, right,
exchangeable or convertible security,
commitment or agreement. As of immediately
prior to the Closing, the total authorized
shares of capital stock of New United will
consist solely of 1,000,000,000 shares of
New United Class A Stock, 1,000,000,000
shares of New United Class B Stock,
400,000,000 shares of New United Class C
Stock and 10,000,000 shares of Preferred
Stock, par value US $0.01 per share (the
"NEW UNITED PREFERRED STOCK"). No series of
New United Preferred Stock will have been
designated as of immediately prior to the
Closing. As of immediately prior to the
Closing there will be no issued or
outstanding shares of capital stock or other
securities or ownership interests of New
United other than one share of New United
Class A Stock held, beneficially and of
record, by ▇▇▇▇▇▇▇▇▇. As of immediately
prior to the Closing there will be no
outstanding subscriptions, options,
warrants, puts, calls, trusts (voting or
otherwise), rights, exchangeable or
convertible securities or other commitments
or agreements of any nature (other than this
Agreement and the other Transaction
Documents) relating to the capital stock or
other securities or ownership interests of
New United (including any phantom shares,
phantom equity interests or stock or equity
appreciation rights) or obligating New
United, at any time or upon the happening of
any event, to issue, transfer, deliver,
sell, repurchase, redeem or otherwise
acquire, or cause to be issued,
44
transferred, delivered, sold,
repurchased, redeemed or otherwise
acquired, any of its capital stock or
any phantom shares, phantom equity
interests or stock or equity
appreciation rights, or other ownership
interests of New United or obligating
New United to grant, extend or enter
into any such subscription, option,
warrant, put, call, trust, right,
exchangeable or convertible security,
commitment or agreement. As of
immediately prior to the Closing, the
shares of New United Class A Stock, New
United Class B Stock and New United
Class C Stock to be issued pursuant to
this Agreement and the other Transaction
Documents will have been duly
authorized, and, when issued, will be
validly issued, fully paid,
nonassessable, free of preemptive rights
and free of Liens and Restrictions,
other than Liens or Restrictions created
by the holder thereof and restrictions
on transfer under federal and state
securities laws. To the knowledge of New
United, except as set forth in Section
5.1 of the Founders Disclosure Schedule
there are no voting trusts, proxies or
other agreements or understandings with
respect to the voting of the capital
stock or ownership interests of New
United (other than this Agreement and
the other Transaction Documents).
(ii) The total authorized shares of capital stock
of United/New United Merger Sub consists
solely of 15 shares of Class A Common Stock,
par value US $0.01 per share, 15 shares of
United/New United Merger Sub Class B Stock
and 3,000 shares of United/New United Merger
Sub Class C Stock. As of the date hereof
there are, and as of immediately prior to
the Closing there will be, no issued or
outstanding shares of capital stock or other
securities or ownership interests of
United/New United Merger Sub other than 15
shares of United/New United Merger Sub Class
B Stock and 3,000 shares of United/New
United Merger Sub Class C Stock all of which
is held by New United. As of the date hereof
there are, and as of the Closing Date there
will be, no outstanding subscriptions,
options, warrants, puts, calls, trusts
(voting or otherwise), rights, exchangeable
or convertible securities or other
commitments or agreements (other than this
Agreement and the other Transaction
Documents) of any nature relating to the
capital stock or other securities or
ownership interests of United/New United
Merger Sub (including any phantom shares,
phantom equity interests or stock or equity
appreciation rights) or obligating
United/New
45
United Merger Sub, at any time or
upon the happening of any event, to issue,
transfer, deliver, sell, repurchase, redeem
or otherwise acquire, or cause to be issued,
transferred, delivered, sold, repurchased,
redeemed or otherwise acquired, any of its
capital stock or any phantom shares, phantom
equity interests or stock or equity
appreciation rights, or other ownership
interests of United/New United Merger Sub or
obligating United/New United Merger Sub to
grant, extend or enter into any such
subscription, option, warrant, put, call,
trust, right, exchangeable or convertible
security, commitment or agreement. The
outstanding shares of United/New United
Merger Sub Class B Stock and United/New
United Merger Sub Class C Stock are duly
authorized, validly issued, fully paid,
nonassessable, free of preemptive rights and
free of Liens and Restrictions, other than
as may have been created by this Agreement
or the other Transaction Documents and
except for restrictions on transfer under
federal or state securities laws.
(c) POWER; AUTHORIZATION AND VALIDITY; CONSENTS; NO CONFLICTS.
(i) Each of New United and United/New United
Merger Sub has all requisite power and
authority to execute and deliver and perform
its obligations under this Agreement and
each other Transaction Document to be
executed and delivered by it pursuant to
this Agreement, and to consummate the
transactions contemplated hereby and
thereby. The execution and delivery by such
party of this Agreement and the other
Transaction Documents to which it is or will
be a party, and, subject to the satisfaction
of the conditions set forth in this
Agreement, the consummation of the
transactions contemplated hereby and thereby
(including the United/New United Merger) and
the performance by it of its obligations
hereunder and thereunder have been duly
authorized by the respective Boards of
Directors of each of New United and
United/New United Merger Sub and by all
other requisite corporate action on the part
of such parties. This Agreement has been,
and each of the other Transaction Documents
to be executed and delivered by New United
or United/New United Merger Sub will be at
or prior to the Closing, duly and validly
executed and delivered by such party.
Assuming the due execution and delivery by
the other parties hereto or thereto, this
Agreement constitutes, and each of the other
Transaction Documents when executed and
delivered by the applicable of New United or
United/New United Merger Sub will
constitute, the legal, valid and binding
obligation of such party, enforceable in
accordance with its terms, except as such
enforceability may be affected by applicable
bankruptcy, reorganization, insolvency,
moratorium or similar laws affecting
creditors' rights generally or by general
equitable principles.
(ii) Except for the requirements under the HSR
Act, the filing of the Certificate of Merger
in connection with the United/New United
Merger, the filing of the certificates or
articles of merger, as applicable, in
connection with the Founder Newco Mergers,
and the Required United Consents, no
consent, approval or waiver of, notice to,
or Filing with, any other Person is required
on behalf of
46
New United or any of its Subsidiaries in
connection with the execution, delivery
or performance by New United or
United/New United Merger Sub of this
Agreement or any of the other
Transaction Documents to which any of
them is or will be a party, or the
consummation of the transactions
contemplated hereby or thereby
(including the United/New United Merger
and the Founder Newco Mergers), the
failure of which to be obtained, given
or made, individually or in the
aggregate, would have a New United
Material Adverse Effect. The execution
and delivery of this Agreement and the
other Transaction Documents by New
United and United/New United Merger Sub
do not, and the performance by them of
their respective obligations hereunder
and thereunder will not, (x) violate or
conflict with any provision of the
certificate of incorporation, bylaws,
operating agreement or other
organizational or governing documents of
New United or any of its Subsidiaries,
(y) assuming that the Required United
Consents of Governmental Authorities are
obtained, violate any of the terms,
conditions or provisions of any Law,
License or Judgment to which New United
or any of its Subsidiaries is subject or
by which any of the foregoing or any of
their respective assets are bound,
except that no representation is made
with respect to any foreign Law of any
jurisdiction in which neither New United
nor United, directly or through a
Subsidiary, owns assets or engages in
business, or (z) result in a violation
or breach of, or (with or without the
giving of notice or lapse of time or
both) constitute a default (or give rise
to any right of termination,
cancellation, amendment, acceleration,
repurchase, prepayment or repayment or
to increased payments) under or give
rise to or accelerate any material
obligation (including any obligation to,
or to offer to, repurchase, prepay,
repay or make increased payments) or
result in the loss or modification of
any material benefit under, or result in
a Lien or Restriction on any of the
assets of New United or any of its
Subsidiaries pursuant to, any Contract
to which New United or any of its
Subsidiaries is a party or by which New
United or any of its Subsidiaries or any
of their respective assets is bound,
except, in the case of any Law (other
than Delaware law), License or Judgment
referred to in clause (y), as would not
have a New United Material Adverse
Effect.
(d) BROKERS' AND FINDERS' FEES. There is no broker, finder,
investment banker or similar intermediary that has been retained by, or is
authorized to act on behalf of, New United or any of its Subsidiaries or any of
their respective officers or directors who will be entitled to any fee or
commission in connection with this Agreement or upon consummation of the
transactions contemplated hereby.
(e) LEGAL PROCEEDINGS. There is no Judgment outstanding or any
Legal Proceeding by or before any Governmental Authority or any arbitrator
pending or, to New
47
United's knowledge, threatened in writing, against New United or any of its
Subsidiaries that, individually or in the aggregate, could reasonably be
expected to have a New United Material Adverse Effect.
(f) ASSETS. The assets owned or leased by New United and its
Subsidiaries are suitable and adequate for the conduct of their respective
businesses and New United or the applicable Subsidiary has good and valid title
to or valid leasehold or other contractual interests in all such assets that are
material to its business, taken as a whole, free and clear of all Liens and
Restrictions other than Permitted Encumbrances and Liens the existence of which
does not have and is not reasonably expected to have a New United Material
Adverse Effect. As of the date hereof and as of immediately prior to the
Closing, New United and United/New United Merger Sub have no material assets
other than their rights under this Agreement and the other Transaction Documents
and other than, in the case of New United, the stock of United/New United Merger
Sub, and have not conducted or engaged in any business other than executing,
delivering and performing their respective obligations under this Agreement and
the other Transaction Documents.
(g) COMMISSION FILINGS; FINANCIAL STATEMENTS; LIABILITIES.
(i) All reports, registration statements, proxy
or information statements and other
documents filed by New United and its
Subsidiaries with the Commission after the
date hereof (each a "NEW UNITED COMMISSION
FILING") (x) will comply with the Securities
Act or the Exchange Act, as the case may be,
and the rules and regulations under each
such Act, and (y) will not at the time they
are filed with the Commission contain any
untrue statement of a material fact or omit
to state a material fact required to be
stated therein or necessary in order to make
the statements made therein, in the light of
the circumstances in which they were made,
not misleading.
(ii) Each of the consolidated financial
statements (including the notes thereto)
contained in the New United Commission
Filings will be prepared in accordance with
GAAP consistently applied (except as may be
indicated in the notes thereto) and
Regulation S-X under the Exchange Act and
fairly present the consolidated financial
position, results of operations and cash
flows of the registrant and its consolidated
subsidiaries as at the respective dates
thereof and for the respective periods
indicated therein, subject in the case of
unaudited interim financial statements to
normal recurring year-end adjustments.
(iii) As of the date hereof and as of immediately
prior to the Closing, except for their
respective obligations expressly provided
for in (A) this Agreement and the other
Transaction Documents to which they are
party, and (B) the agreements described on
SCHEDULE 6.2(g)(iii), New United and
United/New United Merger Sub have
48
no, and following the United/New United
Merger, New United and its Subsidiaries
will have no, liability, commitment or
obligation of any kind or nature, whether
due or to become due, whether absolute,
accrued, fixed or contingent or otherwise.
As of immediately following the Closing,
New United and its Subsidiaries will have
no liability, commitment or obligation of
any kind or nature, whether due or to become
due, whether absolute, accrued, fixed or
contingent or otherwise, other than (i) in
the case of Subsidiaries of New United,
liabilities, commitments and obligations of
Liberty Sub, which liabilities, commitments
and obligations were in existence
immediately prior to the Closing and (ii)
liabilities, obligations and commitments of
New United expressly provided for in this
Agreement and the other Transaction
Documents to which it is a party.
(h) ABSENCE OF CERTAIN DEVELOPMENTS. Since the date of the
most recent balance sheet included in the Available New United Commission
Filings, other than as otherwise permitted, contemplated or required by this
Agreement or the other Transaction Documents, (i) the business of New United and
each of its Subsidiaries has been operated only in the ordinary course, (ii) no
event has occurred and no condition exists that, individually or together with
other events and conditions, has had or, insofar as New United can reasonably
foresee, is reasonably likely to have, a New United Material Adverse Effect, and
(iii) there has been no change in the accounting methods, practices or policies
of New United or any of its Subsidiaries.
(i) LEGAL COMPLIANCE. New United and its Subsidiaries (x) are
in compliance with, and have conducted their respective businesses so as to
comply with, the terms of their respective Licenses and all applicable Laws, and
(y) have all Licenses that are required to operate their respective businesses,
except in such cases where the failure to so comply or to have such Licenses,
either individually or in the aggregate, has not had and is not reasonably
expected to have a New United Material Adverse Effect. Without limiting the
generality of the foregoing, the operations of the businesses, assets and
facilities of New United and its Subsidiaries are in compliance with all
applicable Environmental and Health Laws, if any, except where the failure to
comply has not had and is not reasonably expected to have a New United Material
Adverse Effect.
(j) CONTRACTS; NO BREACH. Each of New United and its
Subsidiaries has fulfilled in all material respects, or taken all actions
necessary to enable it to fulfill in all material respects when due, its
obligations under each Contract to which it is a party or by which it or any of
its assets are bound and none of New United or any of its Subsidiaries is in
breach or violation of, or in default (with or without the giving of notice or
lapse of time or both) under, and no circumstance or condition exists that could
give rise to, or permit any other Person to, declare a default under, any of the
Contracts to which it is a party or by which it or its assets are bound, which
breach, violation or default individually or in the aggregate would reasonably
be expected to have a New United Material Adverse Effect.
(k) SECTION 203 AND SIMILAR LAWS. Pursuant to the New United
Charter and the certificate of incorporation of United/New United Merger Sub,
neither Section 203 of the
49
Delaware General Corporation Law nor any similar provision of any other Law
is applicable to business combinations involving New United or any of its
Subsidiaries.
(l) NO INVESTMENT COMPANY. New United is not, and immediately
following the consummation of the transactions contemplated hereby and by the
other Transaction Documents New United shall not be, an "investment company"
subject to the registration requirements of, or regulation as an investment
company under, the Investment Company Act of 1940.
(m) REGISTRATION STATEMENT; PROXY STATEMENT. The Registration
Statement and the Proxy Statement, except for any information supplied by any
Liberty Party in writing expressly for purpose of inclusion therein, shall not
at the time the Registration Statement is declared effective by the Commission,
on the date the Proxy Statement is first mailed to the stockholders of United,
at the time of the United Stockholders Meeting or on the Closing Date contain
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
ARTICLE VII
CERTAIN COVENANTS OF THE PARTIES
7.1 CONDUCT OF BUSINESS IN ORDINARY COURSE PENDING CLOSING. From the
Original Agreement Date until the Closing or earlier termination of this
Agreement:
(a) Except (1) for taking such actions or engaging in such
transactions as may be required or permitted by this Agreement, (2) as otherwise
disclosed herein, and (3) with the prior written consent of United (which
consent shall not be unreasonably withheld, except in the case of any action
described in clause (i) below (with respect to which United may choose to grant
or withhold its consent in its sole discretion)), Liberty shall: (i) not take or
omit to take any action that would or could reasonably be expected to result in
the failure of the conditions precedent set forth in this Agreement to the
parties' obligations to consummate the transactions contemplated hereby and by
the other Transaction Documents to be satisfied; and (ii) not knowingly take any
other action that would cause any of the representations and warranties of the
Liberty Parties set forth in this Agreement to be untrue in any material respect
if then made. Liberty Media shall promptly after obtaining knowledge thereof
notify United of the occurrence of any event that has had or is reasonably
likely to have a Liberty Material Adverse Effect.
(b) Except (1) for taking such actions or engaging in such
transactions as may be required or permitted by this Agreement, (2) as described
in Section 7.1(b) of the United Disclosure Schedule or as contemplated by
Section 7.1(f) of this Agreement, and (3) with the prior written consent of
Liberty (which consent shall not be unreasonably withheld, except for any of the
following matters (with respect to which Liberty may choose to grant or withhold
its consent in its sole discretion): (A) any action by or involving New United
or any of its Subsidiaries and (B) any action described in clause (v), (ix), (x)
or (xiii) below), United shall, and shall use all commercially reasonable
efforts to cause those of its Subsidiaries that are Controlled Affiliates to,
and New United shall, and shall cause its Subsidiaries to: (i) carry on their
respective businesses in the ordinary course consistent with past practice, (ii)
except, in the
50
case of United and its Controlled Affiliates, pursuant to Partner's Purchase
Rights and except, in the case of United and its Controlled Affiliates, for
transfers among Controlled Affiliates of United or in the ordinary course of
business consistent with past practice, not sell, lease, transfer or dispose
of (including by way of dividend or distribution), or create any Lien (other
than, in the case of United and its Controlled Affiliates, (A) the creation
of any Lien on the assets of Subsidiaries of United if United or any wholly
owned Subsidiary of United is the sole beneficiary of such Lien, (B) the
creation of Permitted Encumbrances, (C) the imposition of a Lien on any asset
acquired after the Original Agreement Date by United or any of its
Subsidiaries, but only to the extent that the imposition of such Lien on such
asset is required by the terms of any Contract evidencing secured
indebtedness of United or its Subsidiaries and disclosed in the United 2001
Commission Filings, as such terms were disclosed in the United 2001
Commission Filings and (D) in the case of any United Public Company and its
Subsidiaries, Liens permitted by clause (xi)(A)(5) below) on, any of their
assets of substantial value, either individually or in the aggregate; (iii)
notify Liberty promptly of any inquiry or proposal concerning any sale,
lease, transfer or other disposition referred to in clause (ii) above; (iv)
not amend or modify in any material respect any material United Investment
Agreement (except for amendments or modifications disclosed in Section
6.1(f)(i) of the United Disclosure Schedule) or, except in the ordinary
course of business consistent with past practice, if any, any other material
Contract; (v) not (A) amend, modify or waive any provision of the United/New
United Merger Agreement, (B) amend or modify United's certificate of
incorporation or bylaws (except (1) pursuant to the United/New United Merger
as contemplated by the United/New United Merger Agreement and (2) for the
filing of the Series E Certificate of Designation in the form attached hereto
as EXHIBIT 6.1(b)), (C) amend or modify the New United Charter or New United
By-laws, (D) amend or modify the United/New United Merger Sub Charter or the
United/New United Merger Sub By-laws, (E) amend, modify or waive any
provision of any Subscription Agreement (and United shall not issue, or agree
to issue, any shares of United Series E Preferred Stock other than pursuant
to the Subscription Agreements as required by Section 2.1(c) of this
Agreement), any Founder Newco Merger Agreement or any other Transaction
Document, or (F) authorize or approve any of the foregoing; (vi) except in
the case of United and its Controlled Affiliates, for acquisitions in
existing or related lines of business of the Person making such acquisition
and for transactions permitted by clause (ii) above, not acquire by merging
or consolidating with, or by purchasing a substantial portion of the assets
of, or by any other manner, any business or any corporation, partnership,
limited liability company, association or other business organization or
division thereof; (vii) except, (A) in the case of United, for the
declaration, setting aside or payment of regular dividends as provided by the
terms of the United Preferred Stock outstanding on the Original Agreement
Date and, (B) in the case of a Subsidiary of United, for the declaration,
setting aside or payment of dividends to United or a wholly owned Subsidiary
thereof or pro rata to the stockholders of the Subsidiary declaring, setting
aside or paying such dividend or distribution, not declare, set aside or pay
any dividend or other distribution, not effect or authorize any
recapitalization or similar transaction and not directly or indirectly
redeem, retire, purchase or otherwise acquire any of its capital stock or
other equity securities or options, warrants or rights to acquire any of its
capital stock or other equity securities; (viii) not effect or authorize any
stock split (other than stock splits by wholly owned Subsidiaries of United
or by wholly owned Subsidiaries of UPC), reverse split (other than reverse
splits by wholly owned Subsidiaries of United or by UPC or Priority Telecom,
but in the case of UPC or Priority Telecom only to the extent necessary for
the equity securities of either
51
such Person to remain listed for trading on The NASDAQ National Market or the
Amsterdam Stock Exchange, and only to the extent such reverse split by UPC or
Priority Telecom may be and is effected in compliance with any requirements
of applicable Law and any applicable Contracts evidencing or securing any
outstanding indebtedness or pursuant to which any such outstanding
indebtedness was incurred), stock dividend or combination involving any of
its capital stock or other equity securities (except for such transactions
among United and its wholly owned Subsidiaries and among UPC and its wholly
owned Subsidiaries) or issue or sell or agree to issue or sell any of its
capital stock or other equity securities or issue, sell, grant or agree to
issue, sell or grant any options, warrants or rights to acquire any of its
capital stock or other equity securities (except for such transactions among
United and its wholly owned Subsidiaries and among UPC and its wholly owned
Subsidiaries), or any phantom shares, phantom equity interests or stock or
equity appreciation rights, that would cause (A) any of United's
representations in Section 6.1(b) to be untrue in any material respect if
then made, (B) any of United's representations in Section 6.1(f)(i) to be
untrue in any material respect if then made, except in each case in this
clause (B) for (1) such issuances or sales by immaterial Subsidiaries and (2)
such issuances or sales that will not result in any material dilution of
United's direct or indirect interest in such Subsidiary or any loss of
material rights or any imposition of material penalties relating to such
interest or (C) any of New United's representations in Section 6.2(b) to be
untrue in any respect if then made; (ix) not engage in any material
transaction with any Founder or any family member or Affiliate of a Founder,
any director or officer of United or any of its Subsidiaries, or any family
member or Affiliate of such director or officer, or any other Affiliate of
United, but excluding employee matters in the ordinary course of business and
not in violation of any other covenant made in this Agreement and the other
Transaction Documents (for purposes of this clause (ix) only, an "Affiliate"
of a Founder or of a director or officer of United or of United shall not
include United, New United or any of their respective Controlled Affiliates);
(x) (A) in the case of United and its Controlled Affiliates, not engage in
any material transaction with New United or any of its Controlled Affiliates
and (B) in the case of New United and its Controlled Affiliates, not engage
in any material transaction with United or any of its Controlled Affiliates,
(xi) (A) in the case of United and its Subsidiaries that are Controlled
Affiliates, not incur any indebtedness for borrowed money (including any
Refinancing Indebtedness that does not satisfy the proviso set forth in
clause (5) below) if the principal amount or accreted value of such
indebtedness, taken together with the aggregate principal amount or accreted
value of all other indebtedness incurred after the Original Agreement Date by
United or any of its Subsidiaries that are Controlled Affiliates, exceeds US
$50,000,000 other than (1) drawings under existing fixed or revolving credit
facilities, (2) the accretion of indebtedness under bonds, notes and other
instruments outstanding on the Original Agreement Date, (3) net obligations
under interest rate or currency swap arrangements, (4) intercompany
indebtedness to United or between United's Subsidiaries and (5) in the case
of a United Public Company and its Subsidiaries, indebtedness ("REFINANCING
INDEBTEDNESS") incurred to refinance outstanding indebtedness ("REFINANCED
INDEBTEDNESS") (provided that (a) the Refinancing Indebtedness has an average
life and final maturity no shorter than the average life and final maturity
of the applicable Refinanced Indebtedness, (b) the principal amount or
accreted value of the Refinancing Indebtedness is no greater than the
principal amount, plus accrued interest, or accreted value of the applicable
Refinanced Indebtedness, (c) the Refinancing Indebtedness is incurred by the
same Person that is the obligor of the applicable Refinanced Indebtedness and
is not guaranteed by any Person other than the guarantor, if any, of the
Refinanced Indebtedness
52
and (d) the repayment of the Refinancing Indebtedness is not secured by Liens
on any assets other than assets securing the repayment of the applicable
Refinanced Indebtedness) and (B) in the case of New United and its
Subsidiaries, not incur any liability, obligation or commitment of any kind
or nature, whether due or to become due, whether absolute, accrued, fixed or
contingent or otherwise; (xii) not take any action that would violate,
conflict with or constitute a breach of Section 3(b) of the Stockholders
Agreement, Section 2(a) of the New United Covenant Agreement or Sections 2(a)
or (b) of the United/Liberty Agreement, in each case to the same extent as
though the applicable agreement had been executed and delivered by the
parties thereto on the Original Agreement Date; (xiii) not take or omit to
take any action that would or could reasonably be expected to result in the
failure of the conditions precedent set forth in this Agreement and the other
Transaction Documents to the parties' obligations to consummate the
transactions contemplated hereby and by the other Transaction Documents to be
satisfied; and (xiv) not knowingly take any other action that would result in
the representations and warranties of United or New United set forth in this
Agreement to be untrue in any material respect if then made. Nothing
contained in the foregoing shall preclude United or any of its Subsidiaries
or Controlled Affiliates from disposing of immaterial (both individually and
in the aggregate) assets in the ordinary course of business consistent with
past practice. Notwithstanding anything in the foregoing to the contrary,
nothing contained in this Section 7.1(b) shall be deemed to (1) restrict
United, UPC, United A/P, UPC Polska, Inc. or Poland Communications, Inc. or
any of their respective "Subsidiaries" and "Restricted Affiliates" (as such
terms are defined in the indentures to which these Persons are party) from
taking any action if and to the extent that such a restriction would violate
the indentures binding on such Persons or (2) restrict UPC or any of its
Subsidiaries from taking any action if and to the extent that such a
restriction would violate the Belmarken Loan Agreements or UPC's Senior
Secured Credit Facility dated as of October 26, 2000. United shall promptly
after obtaining knowledge thereof notify Liberty of the occurrence of any
event that individually or together with any other event has had or is
reasonably likely to have a United Material Adverse Effect or New United
Material Adverse Effect.
(c) Except as expressly contemplated by Section 2.1(a) hereof
and except with the prior written consent of each of United and the Liberty
Parties, no Founder or Founder Newco shall sell, transfer or otherwise dispose
of or create any Lien or Restriction on any limited liability company membership
interest in any Founder Newco or any of the shares of United Class B Stock or,
in the case of a Founder Newco, United Class A Stock owned by it or any interest
therein, or take or omit to take any action that would or could reasonably be
expected to result in the failure of the conditions precedent set forth in this
Agreement to the parties' obligations to consummate the transactions
contemplated hereby and by the other Transaction Documents to be satisfied. Each
Founder shall promptly after obtaining knowledge thereof notify each of United
and the Liberty Parties of the occurrence of any event that has had or is
reasonably likely to have a Founder Material Adverse Effect with respect to such
Founder.
(d) Each party hereto shall promptly give written notice to
the others upon becoming aware of the occurrence or, to its knowledge, impending
or threatened occurrence, of any event that is reasonably likely to cause or
constitute a breach of any of its representations, warranties or covenants
hereunder as if its representations or warranties were then being made.
(e) United shall not, and shall not permit any of its
Subsidiaries to, take any action to satisfy a UPC Stock Purchase Option (as
defined in the Priority Telecom Shareholders
53
Agreement) through the issuance or delivery of securities of United or any of
its Subsidiaries (including UPC but excluding Priority Telecom) without the
prior written consent of Liberty.
(f) United shall take or cause to be taken such action as may
be necessary to ensure that any default under or acceleration of any of the
liabilities of United A/P or any of its Subsidiaries, or a bankruptcy or similar
event involving United A/P or any of its Subsidiaries, at any time (whether
before or at any time after the Closing) would not (with or without the giving
of notice or lapse of time or both) result in the acceleration of, or give rise
to the right to accelerate, any of the indebtedness of United or any of its
Subsidiaries. Without limiting the generality of the foregoing, the parties
acknowledge that the covenant set forth in this Section 7.1(f) shall not be
satisfied if any Contract (including any Contract evidencing or relating to
indebtedness) to which United A/P or any of its Subsidiaries is or becomes a
party or pursuant to which any of their respective assets are or become bound
restricts in any manner the actions of, or imposes any obligation, liability or
commitment on, New United or any of its Subsidiaries or United or any of its
Subsidiaries except, in the case of United and its Subsidiaries, as disclosed on
SCHEDULE 7.1(f). For purposes of this Section 7.1(f), the Subsidiaries of United
A/P shall include Austar United Communications Limited and its Subsidiaries.
(g) United shall take or cause to be taken such action as may
be necessary to exempt the Liberty Parties and their respective Affiliates from
the effect of any Contract among only United and one or more of its Controlled
Affiliates or among only Controlled Affiliates of United (i) that purports to or
would bind any of the Liberty Parties or any of their respective Affiliates
after giving effect to the transactions contemplated hereby or (ii) in respect
of which, whether before or after giving effect to the transactions contemplated
hereby, any act or omission of any of the Liberty Parties or any of their
respective Affiliates would result in a violation or breach thereof, or
constitute (with or without due notice or lapse of time or both), or permit any
Person to declare, a default or event of default thereunder, or give rise to any
right of termination, cancellation, amendment, acceleration, repurchase,
prepayment or repayment or to increased payments thereunder, or give rise to or
accelerate any obligation (including, without limitation, any obligation to, or
to offer to, repurchase, prepay, repay or make increased payments) or result in
the loss or modification of any rights or benefits thereunder, or result in any
Lien or Restriction on any of the assets of, or otherwise have any adverse
effect on, United or any of its Affiliates.
(h) Options to purchase not more than 17,500,000 shares of
United Common Stock ((1) which number (A) includes, and is not in addition to,
the options granted subject to stockholder approval as described in paragraph
B.1. of Section 6.1(b) of the United Disclosure Schedule, except to the extent
any such options are cancelled, and the Class B Options described in paragraph
B.2. of Section 6.1(b) of the United Disclosure Schedule and (B) shall be
reduced by the number of shares of United Class A Stock underlying any options
granted after August 31, 2001 to the Amendment Date, all of which options United
represents and warrants comply with the provisions of this Section 7.1(h)
(including with respect to the exercise prices thereof) and (2) which, except
for any Class B Options described in paragraph B.2. of Section 6.1(b) of the
United Disclosure Schedule, may only be options to purchase shares of United
Class A Stock) (and no stock appreciation rights, restricted stock awards or any
other grants under United's 1993 Stock Option Plan or otherwise other than such
options to purchase shares of Common Stock) may be granted, provided that any
such option shall have a per share exercise
54
price equal to or greater than either (x) the per share average of the
Closing Prices for New United Class A Stock for the 30 consecutive Trading
Days beginning on and including the first Trading Day following the Closing
Date or (y) US $5.00 per share (unless a higher price is required pursuant to
the terms of the relevant United Stock Option Plan). Any such option shall
specify (which specification shall not be subject to change for any reason
whatsoever), at the time of the grant thereof, whether the exercise price
thereof shall be as set forth in clause (x) or (y) of the previous sentence.
(i) United shall promptly provide and shall use commercially
reasonable efforts to cause United A/P to promptly provide, Liberty with true
and complete copies of any notices or correspondence received by United or any
of its subsidiaries or by United A/P or any of its subsidiaries relating to any
default, acceleration or breach of, or potential default, acceleration or breach
of, or dispute regarding, any material Contract evidencing or securing any
outstanding indebtedness of United or any of its subsidiaries or United A/P or
any of its subsidiaries or pursuant to which any such outstanding indebtedness
was incurred.
7.2 STOCKHOLDERS MEETING. United shall call a meeting of its
stockholders (the "UNITED STOCKHOLDERS MEETING") to be held as promptly as
practicable for the purpose of considering and voting upon the United/New
United Merger and each other matter required to be approved by such
stockholders in connection with the transactions contemplated hereby or by
the other Transaction Documents, and shall submit the same to its
stockholders for their approval. United will, through its Board of Directors,
recommend to its stockholders the approval of the United/New United Merger
and each such other matter and United will use its best commercially
reasonable efforts to solicit proxies in favor of the United/New United
Merger and each such other matter and otherwise to secure the required vote
of its stockholders. Each of the Founders and Liberty Global will vote all
shares of United's capital stock owned by them for the approval of the
United/New United Merger and each such other matter. Liberty Global will not
transfer record or beneficial ownership of any United Class B Stock prior to
the Closing except to a Controlled Affiliate of Liberty and unless the
transferee, simultaneous with such transfer, executes a counterpart to this
Agreement and thereupon becomes bound hereby to the same extent as Liberty
Global (including the obligation, subject to the satisfaction or waiver of
the terms and conditions of this Agreement, to take any actions that Liberty
Global is required to take at the Closing). No amendment to or modification
or waiver of any of the provisions of any of the Transaction Documents shall
be authorized, recommended or approved without the prior written consent of
the Liberty Parties.
7.3 PROXY STATEMENT; REGISTRATION STATEMENT; OTHER COMMISSION FILINGS.
(a) As soon as reasonably practicable after the execution
of this Agreement, New United shall file with the Commission an amended
registration statement on Form S-4 (the "REGISTRATION STATEMENT"), containing
a form of prospectus that includes the definitive proxy statement for the
United Stockholders Meeting (together with any amendments thereof or
supplements thereto, the "PROXY STATEMENT"), registering under the Securities
Act the shares of New United Class A Stock issuable pursuant to the
United/New United Merger and the shares of New United Class A Stock issuable
upon conversion of shares of New United Class B Stock and New United Class C
Stock issuable in connection with the transactions contemplated by this
Agreement and the other Transaction Documents (including upon conversion of
shares of New
55
United Class B Stock issuable upon conversion of shares of New United Class C
Stock). The Registration Statement shall be in form and substance reasonably
satisfactory to the parties and shall include a reasonable description of the
Senior Notes Agreements and the actions taken in order to satisfy the Fee
Letter Condition. United and New United shall respond promptly to any
comments of the Commission and shall use all commercially reasonable efforts
to cause the Proxy Statement to be cleared by the Commission and the
Registration Statement to be declared effective as promptly as practicable
after such filing. Following the effectiveness of the Registration Statement,
United shall promptly mail the definitive Proxy Statement to its
stockholders. Each of United and New United will notify the Liberty Parties
promptly of the receipt of any comments from the Commission or its staff or
any other government officials and of any request by the Commission or its
staff or such other government officials for amendments or supplements to the
Registration Statement, the Proxy Statement or any filing incorporated
therein or for additional information, and will supply the Liberty Parties
with copies of all correspondence between it and any of its representatives,
on the one hand, and the Commission or its staff or any other government
officials on the other hand, with respect to the Registration Statement, the
Proxy Statement, the transactions contemplated by this Agreement and the
other Transaction Documents or any filing with the Commission relating
thereto. Whenever any party hereto becomes aware of any event that is
required to be set forth in an amendment or supplement to the Proxy
Statement, the Registration Statement or any other filing with the Commission
in connection with this Agreement, the other Transaction Documents or the
transactions contemplated hereby or thereby, such party shall promptly inform
the other parties of such occurrence. United and New United shall promptly
prepare and file with the Commission any such amendment or supplement and,
following clearance thereof, if applicable, mail such amendment or supplement
to United's stockholders. United and New United shall cause the Proxy
Statement, the Registration Statement and all other of their respective
filings with the Commission with respect to this Agreement, the other
Transaction Documents or the transactions contemplated hereby or thereby to
comply in all material respects with the applicable provisions of the
Securities Act and the Exchange Act. To the extent information regarding any
Liberty Party or any of their respective Subsidiaries is required for the
preparation of the Proxy Statement or Registration Statement, the Liberty
Parties shall promptly provide such information to United and New United upon
request.
(b) Until consummation of the transactions contemplated by
this Agreement and the other Transaction Documents or earlier termination of
this Agreement, United and New United, as applicable, shall each timely file all
reports, registration statements, proxy or information statements and other
documents required to be filed by it with the Commission after the Original
Agreement Date, each of which filings shall comply with all applicable
requirements of the Securities Act and the Exchange Act and the rules and
regulations of the Commission under each such Act. United and New United shall
each promptly provide Liberty Media and its counsel with copies of all filings
with the Commission made by such party after the Original Agreement Date and
prior to the consummation of the transactions contemplated by this Agreement and
the other Transaction Documents or earlier termination of this Agreement.
7.4 NO SOLICITATION; ACQUISITION PROPOSALS.
(a) [Reserved.]
56
(b) Prior to consummation of the transactions contemplated
by this Agreement and the other Transaction Documents or earlier termination
of this Agreement, United and the Founders will not, and United will use its
commercially reasonable efforts to cause each of its Subsidiaries not to,
directly or indirectly, through any officer, director, employee,
representative, agent, or financial advisor, solicit, initiate or encourage
inquiries or submission of proposals or offers from any Person relating to
any sale of all or any substantial portion of the assets of or any equity
interest in United, New United or any of their respective Subsidiaries or any
business combination with United, New United or any of their respective
Subsidiaries whether by merger, purchase of assets, tender offer or otherwise
or participate in any negotiation regarding, or furnish to any other Person
any information with respect to, or otherwise cooperate in any way with, or
assist in, facilitate or encourage, any effort or attempt by any other Person
to do or seek to do any of the foregoing, in each case except as permitted by
or disclosed pursuant to this Agreement (including Section 7.1(b) of the
United Disclosure Schedule) or with the prior written consent of the Liberty
Parties (which consent, in the case of any United Public Company, shall not
be unreasonably withheld). Each Founder will vote all shares of voting stock
in United beneficially owned by it, and United will vote or cause to be voted
all shares of its Subsidiaries beneficially owned by it, against any
transaction of the nature described above that is presented to it. Each
Founder and United or New United, as applicable, will notify the Liberty
Parties immediately if any inquiries or proposals are received by, any
information is requested from, or any negotiations or discussions are sought
to be initiated or continued with any Founder, United or New United, as
applicable, or any of their respective Subsidiaries, in each case in
connection with any of the foregoing. Each of the Founders and United shall
use its best efforts to cause all confidential materials previously furnished
by it or on its behalf to any third parties in connection with any of the
foregoing to be promptly returned to it and shall cease, or cause United and
its Subsidiaries to cease, any negotiations conducted in connection therewith.
7.5 CONSENTS AND APPROVALS.
(a) Subject to the terms and conditions of this Agreement
and applicable law, each of the parties hereto shall use its commercially
reasonable efforts to take, or cause to be taken, all actions and to do, or
cause to be done, all things reasonably necessary, proper or advisable to
consummate and make effective the transactions contemplated by this Agreement
and the other Transaction Documents as soon as reasonably practicable,
including such actions or things as any other party hereto may reasonably
request in order to cause any of the conditions to such party's obligation to
consummate such transactions specified in this Agreement to be fully
satisfied. Without limiting the generality of the foregoing, each of the
parties hereto shall (and each shall cause its directors, officers and
Subsidiaries, and use its reasonable efforts to cause its Affiliates,
employees, agents, attorneys, accountants and representatives, to) consult
and fully cooperate with and provide reasonable assistance to each other in
(i) the preparation and filing with the Commission of the Registration
Statement, the Proxy Statement and any necessary amendments or supplements to
any of the foregoing; (ii) seeking to have such Proxy Statement cleared by
the Commission and such Registration Statement declared effective by the
Commission, in each case as soon as reasonably practicable after filing
thereof; (iii) taking such actions as may reasonably be required under
applicable state securities or blue sky laws in connection with the
transactions contemplated by this Agreement and the other Transaction
Documents; (iv) using its best commercially reasonable efforts to obtain all
required consents, approvals, waivers, licenses, permits, authorizations,
registrations, qualifications, or other
57
permissions or actions by, and to give all required notices to and to make
all required Filings with and applications and submissions to, any
Governmental Authority or other Person, in each case required in order to
cause any of the conditions to each other party's obligation to consummate
such transactions to be fully satisfied; (v) filing all pre-merger
notification and report forms required under the HSR Act and responding to
any requests for additional information made by any Governmental Authority
pursuant to the HSR Act and cooperating with each other party in complying
with the requirements of the HSR Act; (vi) using commercially reasonable
efforts to cause the lifting of any permanent or preliminary injunction or
restraining order or other similar order issued or entered by any court or
other Governmental Authority (an "INJUNCTION") preventing the consummation of
the transactions contemplated hereby or by the other Transaction Documents;
(vii) providing all such information about such party, its Subsidiaries and
its officers, directors, partners and Affiliates, and making all applications
and filings, as may be necessary or reasonably requested in connection with
any of the foregoing; (viii) using commercially reasonable efforts to obtain
the tax opinions referred to in Sections 10.1(b), 11.6 and 12.5; and (ix) in
general, using commercially reasonable efforts to consummate and make
effective the transactions contemplated hereby. Notwithstanding the
foregoing, in making any such Filing and in order to obtain any consent,
approval, waiver, license, permit, authorization, registration,
qualification, or other permission or action or the lifting of any Injunction
referred to in the preceding sentence, (A) the parties and their respective
Affiliates shall not be required to (i) pay any consideration, except filing
fees; (ii) surrender, modify or amend in any respect any License or Contract
(including this Agreement), (iii) hold separately (in trust or otherwise),
divest itself of, or otherwise rearrange the composition of, any of its
assets, (iv) agree to any limitations on any such Person's freedom of action
with respect to future acquisitions of assets or with respect to any existing
or future business or activities or on the enjoyment of the full rights of
ownership, possession and use of any asset now owned or hereafter acquired by
any such Person, or (v) agree to any of the foregoing or any other conditions
or requirements of any Governmental Authority or other Person, in each case
to the extent that doing so would be adverse or burdensome to such Person in
any material respect. Prior to making any application to or filing with any
Governmental Authority or other Person in connection with this Agreement,
each party shall provide the other parties with drafts thereof and afford the
other parties a reasonable opportunity to comment on such drafts.
(b) The parties will cooperate with and assist one another
in any challenge by any party of the applicability to the transactions
contemplated hereby (or by the other Transaction Documents) of any state
takeover law (or similar Laws of any other jurisdiction) and, if any
additional steps are necessary, will take all reasonable steps to exempt the
transactions contemplated hereby or by the other Transaction Documents from
any applicable state takeover law or similar Law of any other jurisdiction.
(c) Without limiting the generality of Section 7.5(a),
United and New United shall cooperate with Liberty and its Affiliates to, at
any time before or after the Closing, at Liberty or LMI's request, obtain the
approvals described in footnote 1 to Section 6.1(c)(ii) of the United
Disclosure Schedule.
7.6 TAX-FREE EXCHANGE. Each of the parties (a) shall use all
reasonable efforts to cause each of the transactions contemplated by Sections
2.2 and 2.5 of this Agreement to qualify as a tax-free exchange under Section
351 of the Code, (b) will cooperate with the other parties to
58
modify the structure of such transactions if and to the extent necessary for
each of such transactions to constitute a tax-free exchange or a tax-free
reorganization, (c) will not take any action, and will not permit any of its
Controlled Affiliates to take any action, that would cause any of the
transactions contemplated by Sections 2.2 and 2.5 of this Agreement not to
qualify as a tax-free exchange under Section 351 of the Code, and (d) will
cooperate with the accounting or law firms that are to render the opinions
referred to in Sections 10.1(b), 11.6 and 12.5 by providing appropriate
certifications as to factual matters. Following the Closing, each party will
report (or cause to be reported) each of the transactions contemplated by
Sections 2.2 and 2.5 of this Agreement as a tax-free exchange under Section
351 of the Code on all tax returns and other tax filings. Further, from and
after the Closing the parties will continue to take such actions as may be
necessary to preserve the tax-free nature of each of the transactions
contemplated by Sections 2.2 and 2.5 of this Agreement and will not take any
action or permit any of its Controlled Affiliates to take any action that
would have the effect of disqualifying any of the transactions contemplated
by Sections 2.2 and 2.5 of this Agreement as a tax-free exchange under
Section 351.
7.7 STOCKHOLDERS AGREEMENT. At the Closing, New United, each
Founder, Liberty and Liberty Global shall execute and deliver a Stockholders
Agreement substantially in the form attached hereto as EXHIBIT 7.7 (the
"STOCKHOLDERS AGREEMENT").
7.8 VOTING AGREEMENT. At the Closing, New United and each Founder
shall execute and deliver a Voting Agreement substantially in the form
attached hereto as EXHIBIT 7.8 (the "VOTING AGREEMENT").
7.9 UNITED/LIBERTY AGREEMENT. At the Closing, United, Liberty and
Liberty Global shall execute and deliver an agreement substantially in the
form attached hereto as EXHIBIT 7.9 (the "UNITED/LIBERTY AGREEMENT").
7.9A NEW UNITED COVENANT AGREEMENT. At the Closing, New United,
Liberty and Liberty Global will execute and deliver the Agreement Regarding
Additional Covenants substantially in the form attached hereto as EXHIBIT
7.9A (the "NEW UNITED COVENANT AGREEMENT").
7.9B NO WAIVER AGREEMENT. At the Closing, New United, Liberty and
LMI will execute and deliver the No Waiver Agreement.
7.10 STANDSTILL AGREEMENT. At the Closing, New United, Liberty and
Liberty Global shall execute and deliver a Standstill Agreement substantially
in the form attached hereto as EXHIBIT 7.10 (the "STANDSTILL AGREEMENT").
7.11 REGISTRATION RIGHTS AGREEMENT. At the Closing, New United,
Liberty and Liberty Global shall execute and deliver a registration rights
agreement substantially in the form attached hereto as EXHIBIT 7.11 (the
"REGISTRATION RIGHTS AGREEMENT"). At the Closing, New United and the Founders
will execute and deliver a registration rights agreement with identical
terms, except that the Founders will be entitled to only two demand
registration rights.
7.12 EXCHANGE AGREEMENT. At the Closing, United and each Founder
that is a Controlling Principal and that purchased shares of United Series E
Preferred Stock as
59
contemplated by Section 2.1(c) (any such Person, a "SERIES E HOLDER") shall
execute and deliver an Exchange Agreement substantially in the form attached
hereto as EXHIBIT 7.12(a) (the "EXCHANGE AGREEMENT").
7.13 LISTING APPLICATION. New United shall apply to list for trading
on the National Market tier of The Nasdaq Stock Market the shares of New
United Class A Stock issuable in the United/New United Merger and upon
conversion of the shares of New United Class B Stock and New United Class C
Stock issuable in connection with the transactions contemplated by this
Agreement and the other Transaction Documents (including upon conversion of
shares of New United Class B Stock issuable upon conversion of shares of New
United Class C Stock), and will use all commercially reasonable efforts to
cause such listing to be effective as of the Closing.
7.14 INVESTIGATION; CONFIDENTIALITY.
(a) From the Original Agreement Date until the Closing or
earlier termination of this Agreement, upon reasonable notice and subject to
the waiver of confidentiality obligations to third parties, each party hereto
will, and will cause its Controlled Affiliates to, (i) permit the other
parties hereto and their respective financial advisors and accounting and
legal representatives to conduct an investigation and evaluation of (x) in
the case of United, Liberty Sub and its business, and (y) in the case of the
Liberty Parties, United, New United and their respective Subsidiaries and
their respective businesses, (ii) provide such assistance as is reasonably
requested and (iii) give access at reasonable times to the properties, books,
Contracts, commitments, records and other information of, related to or
concerning the businesses, assets, operations and personnel of such Persons.
Such access and any information obtained by a party in connection with such
investigation shall not affect or in any way limit the effectiveness of any
representation, warranty, covenant or agreement made by any other party
pursuant to this Agreement or any of the other Transaction Documents.
(b) Each of United and New United agrees that pending
consummation in full of the transactions contemplated by this Agreement and
the other Transaction Documents, it and its Controlled Affiliates shall, and
shall use commercially reasonable efforts to cause their respective
directors, officers, employees and authorized representatives to, (i) hold in
strict confidence all data and information obtained by any of them pursuant
hereto or in connection herewith or in connection with the matters
contemplated by the Letter Agreement from the Liberty Parties, any of their
respective Affiliates or their respective authorized representatives (unless
such information is or otherwise becomes (through no breach of this covenant)
public or readily ascertainable from public or published information) and
(ii) use all such data and information solely for the purpose of consummating
the transactions contemplated hereby and, except as required by applicable
Law or legal process or by the rules, regulations or policies of The New York
Stock Exchange, The Nasdaq Stock Market, the Stock Market of Euronext
Amsterdam or the Australian Stock Exchange shall not, and shall use its
diligent efforts to ensure that such directors, officers, employees and
authorized representatives do not, disclose such information to others
without the prior written consent of Liberty.
(c) Each Liberty Party agrees that pending consummation in
full of the transactions contemplated by this Agreement and the other
Transaction Documents and at all times thereafter, it and its Controlled
Affiliates shall, and shall use commercially reasonable
60
efforts to cause their respective directors, officers, employees and
authorized representatives to, (i) hold in strict confidence all data and
information obtained by any of them pursuant hereto or in connection herewith
from United, any of its Affiliates or its authorized representatives (unless
such information is or otherwise becomes (through no breach of this covenant)
public or readily ascertainable from public or published information) and
(ii) use all such data and information solely for the purpose of consummating
the transactions contemplated hereby and, except as required by applicable
law or legal process or by the rules of The New York Stock Exchange or The
Nasdaq Stock Market, shall not, and shall use its diligent efforts to ensure
that such directors, officers, employees and authorized representatives do
not, disclose such information to others without the prior written consent of
United.
(d) If this Agreement is terminated, each of the Liberty
Parties, on the one hand, and United and New United, on the other, agree to
(i) return or destroy promptly, as and if so requested by the other parties,
each and every document furnished to it by the other parties or any Affiliate
of such other parties, in connection with the transactions contemplated
hereby or by the other Transaction Documents and any copies thereof that may
have been made and to cause its representatives and any representatives of
others to whom such documents were furnished promptly to return or destroy,
as applicable, such documents and any copies thereof any of them may have
made, other than documents that are publicly available, and (ii) refrain, and
to use diligent efforts to cause its directors, officers, employees and
representatives to refrain, from using any of the data or information
referred to in subsection (b) or (c), as the case may be, for any purpose.
7.15 [Reserved.]
7.16 [Reserved.]
7.17 [Reserved.]
7.18 [Reserved.]
7.19 [Reserved.]
7.20 UPC BONDS. Except with the prior written consent of United
(prior to Closing) or New United (after the Closing) (which shall not, either
in the case of United or New United, be unreasonably withheld), from the
Original Agreement Date until the earlier of the termination of this
Agreement and the first anniversary of the Closing, Liberty will not, and
will use commercially reasonable efforts to cause each of its Controlled
Affiliates not to, directly or indirectly purchase or offer or agree to
purchase any additional debt securities issued by UPC and outstanding as of
the Original Agreement Date. Except with the prior written consent of Liberty
(which shall not be unreasonably withheld) from the Original Agreement Date
until the earlier of the termination of this Agreement and the first
anniversary of the Closing, each of United and New United will not, and will
use commercially reasonable efforts to cause each of its Controlled
Affiliates not to, directly or indirectly purchase or offer or agree to
purchase any debt securities issued by UPC and outstanding on the Original
Agreement Date.
7.21 SENIOR SECURED NOTES. Except with the prior written consent of
Liberty (which shall not be unreasonably withheld) and except, in the case of
United, as expressly required by
61
the Indenture, from the Original Agreement Date until the earlier of the
termination of this Agreement and the first anniversary of the Closing, each
of United and New United will not, and will use commercially reasonable
efforts to cause each of its Controlled Affiliates not to, directly or
indirectly purchase or offer or agree to purchase any of the Senior Secured
Notes. Except as contemplated by the Notes Tender Letter Agreement or with
the prior written consent of United (prior to the Closing) or New United
(after the Closing) (which shall not, either in the case of United or New
United, be unreasonably withheld), from the Original Agreement Date until the
earlier of the termination of this Agreement and the first anniversary of the
Closing, Liberty will not, and will use commercially reasonable efforts to
cause each of its Controlled Affiliates not to, directly or indirectly
purchase or offer or agree to purchase any of the Senior Secured Notes.
7.22 FAIRNESS OPINIONS. United shall (a) use commercially reasonable
efforts to promptly obtain the written opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ satisfactory
in form, scope and substance to United to the effect that as of the date
thereof the Exchange Ratio pursuant to this Agreement is fair, from a
financial point of view, to the holders of United Class A Stock (other than
Liberty, New United, the Founders and their respective Affiliates) (the
"EXCHANGE RATIO FAIRNESS OPINION"), (b) use commercially reasonable efforts
to promptly obtain the written opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ satisfactory in
form, scope and substance to United, as required pursuant to Section 4.11 of
the Indenture with respect to the transactions contemplated hereby and by the
other Transaction Documents (the "INDENTURE FAIRNESS OPINION" and, together
with the Stock Purchase Fairness Opinion and the Exchange Ratio Fairness
Opinion, the "FAIRNESS OPINIONS"), (c) take such other actions as are
required to comply with Section 4.11 of the Indenture, (d) provide Liberty
with true and complete copies of the Exchange Ratio Fairness Opinion and the
Indenture Fairness Opinion promptly following its receipt thereof, and (e)
include an executed copy of the Exchange Ratio Fairness Opinion in the Proxy
Statement and the Registration Statement.
7.23 INTERIM STOCKHOLDER ARRANGEMENTS. From the Original Agreement
Date until the Closing or the earlier termination of this Agreement, United,
Liberty and the Founders shall comply with the terms of the Stockholders
Agreement and the Standstill Agreement, in each case in the forms attached as
exhibits hereto and, solely for purposes of this covenant, as if (a) all
references to "United" therein were references to United, (b) all references
to "United Class C Stock" therein were references to United Class B Stock,
(c) the "Maximum Percentage" were limited to the percentage determined in
accordance with clause (a) of the definition thereof in the Standstill
Agreement; PROVIDED THAT, (i) in clause (a)(i) of such definition, the phrase
"immediately after the closing of each of the transactions contemplated by
the Merger Agreement" shall be deemed to be replaced with the phrase
"immediately after the execution and delivery of the Merger Agreement
(including the purchase of the Note Shares (as defined in the Merger
Agreement) and the other shares of United Class A Stock purchased from United
on December 3, 2001 as contemplated by the third recital of the Merger
Agreement)" and (ii) in clause (a)(iii) of such definition, the phrase "25
million shares of Common Stock" shall be deemed to be replaced with the
phrase " 20 million shares of Common Stock," and the proviso clause at the
end thereof shall be deemed deleted, and (d) the Note Shares and any shares
of United Class A Stock acquired by Liberty and its Controlled Affiliates in
reliance on clause (a)(iii) of the definition of "Maximum Percentage" were
not exchangeable into shares of United Class B Stock pursuant to Section
10(a) of the Stockholders Agreement. Further, until the Closing or the
earlier termination of this Agreement, the Liberty Parties will be entitled
to vote in
62
their sole discretion with respect to any action or transaction that would
have required the approval of the Class C Directors or the Liberty Directors
if taken by New United or that would be inconsistent with the provisions of
this Agreement.
ARTICLE VIII
CONDITIONS PRECEDENT TO THE
OBLIGATIONS OF EACH PARTY TO CLOSE
The respective obligations of each party to consummate the
transactions contemplated by this Agreement and the other Transaction
Documents are subject to the satisfaction or the waiver by it of each of the
following conditions on or prior to the Closing Date:
8.1 UNITED STOCKHOLDER APPROVAL. The stockholders of United shall
have approved the United/New United Merger and each other matter submitted to
the vote of such stockholders pursuant to Section 7.2 by the requisite vote.
8.2 HSR ACT. All applicable waiting periods under the HSR Act shall
have expired or been terminated, without any litigation having arisen
therefrom that remains outstanding or other action having been taken by the
DOJ or the FTC that remains unresolved.
8.3 CONSENTS AND APPROVALS.
(a) The parties hereto shall have obtained all consents,
approvals and waivers of, given all notices to, and made all Filings with (i)
each Governmental Authority identified on the Liberty Disclosure Schedule or
the United Disclosure Schedule or otherwise required in connection with the
consummation of the transactions contemplated hereby and by the other
Transaction Documents, the failure of which to be obtained, given or made
would reasonably be expected to have a Liberty Material Adverse Effect, a
Material Adverse Effect on Liberty, a United Material Adverse Effect or a New
United Material Adverse Effect, and (ii) the European Union, and all such
consents, approvals, waivers, notices and Filings referred to in clauses (i)
and (ii) shall be in full force and effect.
(b) The parties hereto shall have obtained all consents,
approvals and waivers of, and given all notices to, each Person other than a
Governmental Authority identified on the Liberty Disclosure Schedule, the
United Disclosure Schedule as "Required United Consents," the Founders
Disclosure Schedule or otherwise required in connection with the consummation
of the transactions contemplated hereby and by the other Transaction
Documents and all such consents, approvals, waivers and notices shall be in
full force and effect, in each case other than those that if not obtained, in
force or effect, made or given (as the case may be) would not, either
individually or in the aggregate, have a Liberty Material Adverse Effect, a
United Material Adverse Effect, a New United Material Adverse Effect or a
Founder Material Adverse Effect.
8.4 ABSENCE OF INJUNCTIONS. No permanent, preliminary or temporary
injunction, restraining order or similar order issued or entered by any court
or other Governmental Authority of competent jurisdiction, or other legal
restraint or prohibition, preventing consummation of the
63
transactions contemplated hereby or by the other Transaction Documents as
provided herein and therein shall be in effect.
8.5 FAIRNESS OPINIONS. United shall have obtained the Exchange Ratio
Fairness Opinion and the Indenture Fairness Opinion and none of the Fairness
Opinions shall have been withdrawn.
8.6 TRANSACTION DOCUMENTS. Each of the Transaction Documents shall
have been executed and delivered, where applicable, effective as of the
Closing, by the parties thereto.
ARTICLE IX
CONDITIONS PRECEDENT TO THE
OBLIGATIONS OF NEW UNITED TO CLOSE
The obligation of New United to consummate the transactions
contemplated by this Agreement and the other Transaction Documents is subject to
the fulfillment on or prior to the Closing Date, of the following conditions,
any one or more of which may be waived by New United, provided that such waiver
as it relates to conditions to be satisfied by the Liberty Parties and Liberty
Sub shall have been consented to by United and such waiver as it relates to
conditions to be satisfied by the Founders or Founder Newcos shall have been
consented to by United and Liberty:
9.1 REPRESENTATIONS AND WARRANTIES TRUE AS OF THE CLOSING DATE.
(a) The representations and warranties of the Liberty Parties
set forth in Sections 4.1, 4.2, 4.5, 4.7, 4.10 and 4.11 shall be true in all
material respects on and as of the Closing Date with the same force and effect
as though made on and as of the Closing Date, except for changes permitted or
contemplated by this Agreement.
(b) The representations and warranties of each Founder set
forth in Sections 5.1, 5.2, 5.3, 5.7 and 5.9 shall be true in all material
respects on and as of the Closing Date with the same force and effect as though
made on and as of the Closing Date, except for changes permitted or contemplated
by this Agreement.
9.2 COMPLIANCE WITH THIS AGREEMENT. The Liberty Parties, each
Founder and each Founder Newco shall have performed and complied in all
material respects with all agreements and covenants contained in this
Agreement and the other Transaction Documents that are required to be
performed or complied with by them on or prior to the Closing Date.
9.3 CERTIFICATES. Each Liberty Party, each Founder and each Founder
Newco shall have delivered to New United a certificate, dated the Closing
Date and signed by such party, in the case of each party that is a natural
person, or by an appropriate and duly authorized officer or representative of
such party, in the case of each party that is not a natural person,
certifying that the conditions specified in Sections 9.1 and 9.2 have been
fulfilled.
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9.4 OPINION OF COUNSEL TO THE LIBERTY PARTIES. New United shall have
received the opinion of one or more counsel to the Liberty Parties and an
opinion of one or more counsel to the Founders and each Founder Newco, each
dated the Closing Date, in the form set forth on Exhibit 9.4 hereto.
ARTICLE X
CONDITIONS PRECEDENT TO THE
OBLIGATIONS OF THE PARTIES TO THE UNITED/NEW UNITED MERGER
10.1 UNITED'S OBLIGATION. The obligation of United to consummate the
United/New United Merger is subject to the fulfillment on or prior to the
Closing Date of the following conditions, any one or more of which may be
waived by United:
(a) [Reserved.]
(b) United shall have received the opinion of ▇▇▇▇▇▇▇▇ LLP,
dated the Closing Date, to the effect that, for United States federal income tax
purposes, (i) the formation and merger of each Founder Newco with and into New
United, and the merger of United/New United Merger Sub with and into United
should be disregarded, and the acquisitions contemplated by this Agreement,
including the direct or indirect contribution of assets by Liberty and Liberty
Global to New United, when viewed as a collective whole, will be treated as a
transfer by the various parties hereto of property to New United pursuant to
Section 351 of the Code, and (ii) no gain or loss will be recognized by the
stockholders of United upon the receipt of stock in New United upon the merger
of the Founder Newcos with and into New United or upon the United/New United
Merger. In rendering such opinion, ▇▇▇▇▇▇▇▇ LLP may require and rely upon (and
may incorporate by reference) representations and covenants made in certificates
provided by the parties hereto and upon such other documents and data as
▇▇▇▇▇▇▇▇ LLP deems appropriate as a basis for such opinion.
10.2 NEW UNITED'S OBLIGATION. The obligations of New United and
United/New United Merger Sub to consummate the United/New United Merger are
subject to the fulfillment on or prior to the Closing Date of the following
further conditions, any one or more of which may be waived by New United for
itself and on behalf of United/New United Merger Sub, provided that in the
case of clause (d) below such waiver has been consented to by Liberty:
(a) [Reserved.]
(b) [Reserved.]
(c) [Reserved.]
(d) OPINION OF COUNSEL TO UNITED. New United and United/New
United Merger Sub shall have received the opinion of Holme ▇▇▇▇▇▇▇ & ▇▇▇▇
LLP, counsel to United, dated the Closing Date, in the form set forth on
EXHIBIT 11.4(b) hereto.
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(e) OTHER TRANSACTIONS. The transactions to be consummated
prior to the United/New United Merger as set forth in Sections 2.1, 2.2(a)
and 2.2(b) shall have been consummated in accordance with this Agreement.
ARTICLE XI
CONDITIONS PRECEDENT TO THE OBLIGATION OF
THE LIBERTY PARTIES TO CLOSE
The obligations of the Liberty Parties to consummate the
transactions contemplated by this Agreement and the other Transaction Documents
are subject to the fulfillment on or prior to the Closing Date, of the following
conditions, any one or more of which may be waived by the Liberty Parties:
11.1 REPRESENTATIONS AND WARRANTIES TRUE AS OF THE CLOSING DATE.
(a) The representations and warranties of United set forth in
Sections 6.1(a), 6.1(c), 6.1(f)(iv), 6.1(o), 6.1(p) and 6.1(t) shall be true in
all material respects on and as of the Closing Date with the same force and
effect as though made on and as of the Closing Date, except for changes
permitted or contemplated by this Agreement.
(b) The representations and warranties of New United set forth
in Sections 6.2(a), 6.2(b)(i), 6.2(c), 6.2(k) and 6.2(m) shall be true in all
material respects on and as of the Closing Date with the same force and effect
as though made on and as of the Closing Date, except for changes permitted or
contemplated by this Agreement.
(c) The representations and warranties of each Founder set
forth in Sections 5.1, 5.2, 5.3, 5.7 and 5.9 of this Agreement shall be true in
all material respects on and as of the Closing Date with the same force and
effect as though made on and as of the Closing Date, except for changes
permitted or contemplated by this Agreement.
11.2 COMPLIANCE WITH THIS AGREEMENT.
(a) Except as set forth in (b) and (c) below, United, New
United, each Founder and each Founder Newco shall have performed and complied
in all material respects with all material agreements and material covenants
contained in this Agreement and the other Transaction Documents that are
required to be performed or complied with by them on or prior to the Closing
Date.
(b) United shall have performed and complied in all
respects with the agreements and covenants contained in Sections 7.1(b)(v)
and 7.1(f).
(c) New United shall have performed and complied in all
respects with the agreements and covenants contained in Sections 7.1(b)(v),
7.1(b)(xi)(B) and 7.1(b)(xii).
11.3 CERTIFICATES. Each of United, New United, each Founder and each
Founder Newco shall have delivered to the Liberty Parties a certificate,
dated the Closing Date and signed
66
by such party, in the case of each party that is a natural person, or by an
appropriate and duly authorized officer or representative of such party, in
the case of each party that is not a natural person, certifying that the
conditions specified in Sections 11.1, 11.2, 11.9 and 11.10 have been
fulfilled (insofar as each such Section relates to such Person).
11.4 OPINION OF COUNSEL TO UNITED. The Liberty Parties shall have
received the following opinions, each dated the Closing Date: (a) the opinion
of ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇▇, in the form set forth on EXHIBIT 11.4(a)
hereto, (b) the opinion of Holme ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, in the form set forth on
EXHIBIT 11.4(b) hereto, (c) the opinion of Holme ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, in the
form set forth on EXHIBIT 11.4(c) hereto and (d) the opinion of Holme ▇▇▇▇▇▇▇
& ▇▇▇▇ LLP, in the form set forth in EXHIBIT 11.4(d) hereto.
11.5 [Reserved.]
11.6 TAX OPINION. Liberty shall have received the opinion of ▇▇▇▇▇
▇▇▇▇▇ L.L.P., dated the Closing Date, to the effect that, for United States
federal income tax purposes, the transfers to New United in exchange for
stock of New United that are contemplated by this Agreement to be consummated
on the Closing Date, including the direct or indirect contribution of assets
by Liberty and Liberty Global to New United, when viewed as a collective
whole, will be treated as transfers of property to New United pursuant to
Section 351 of the Code. In rendering such opinion, ▇▇▇▇▇ ▇▇▇▇▇ L.L.P. may
require and rely upon (and may incorporate by reference) representations and
covenants made in certificates provided by the parties hereto and upon such
other documents and data as such counsel deems appropriate as a basis for
such opinions.
11.7 [Reserved.]
11.8 [Reserved.]
11.9 INDENTURE. No "Event of Default" within the meaning of Sections
6.1(a), 6.1(b), 6.1(e), 6.1(g) or 6.1(h) of the Indenture shall have occurred
and, in the case of any such "Event of Default" within the meaning of
Sections 6.1(a), 6.1(b) or 6.1(e) of the Indenture, be continuing and no
"Acceleration Notice" shall have been properly given (and not rescinded)
pursuant to Section 6.2 of the Indenture.
11.10 FEE LETTER. All liabilities, obligations and commitments of
any kind or nature, whether due or to become due, whether absolute, accrued,
fixed or contingent or otherwise of New United under the Fee Letter shall
have been terminated by the execution, delivery and performance of the
instruments attached as SCHEDULE 11.10 (the "SENIOR NOTES AGREEMENTS") and no
action taken in connection with such termination of New United's liabilities,
obligations and commitments, contingent or otherwise, shall have resulted in
or given rise to any material obligations or resulted in the loss or
modification of any material benefit of, or resulted in a Lien or Restriction
on, any of the assets of New United or any of its Subsidiaries (the "FEE
LETTER CONDITION").
11.11 [Reserved.]
11.12 [Reserved.]
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11.13 [Reserved.]
ARTICLE XII
CONDITIONS PRECEDENT TO THE OBLIGATION OF
THE FOUNDERS TO CLOSE
The obligation of each of the Founders to consummate the
transactions contemplated by this Agreement and the other Transaction
Documents is subject to the fulfillment on or prior to the Closing Date of
the following conditions, any one or more of which may be waived by such
Founder:
12.1 REPRESENTATIONS AND WARRANTIES TRUE AS OF THE CLOSING DATE.
The representations and warranties of the Liberty Parties set forth in
Sections 4.1, 4.2, 4.5, 4.7, 4.10 and 4.11 of this Agreement shall be true in
all material respects on and as of the Closing Date with the same force and
effect as though made on and as of the Closing Date, except for changes
permitted or contemplated by this Agreement.
12.2 COMPLIANCE WITH THIS AGREEMENT. The Liberty Parties shall
have performed and complied in all material respects with all agreements and
covenants contained in this Agreement and the other Transaction Documents
that are required to be performed or complied with by them on or prior to the
Closing Date.
12.3 CERTIFICATES. Each Liberty Party shall have delivered to
Founders a certificate, dated the Closing Date and signed by an appropriate
and duly authorized officer or representative of such Liberty Party,
certifying that the conditions specified in Sections 12.1 and 12.2 have been
fulfilled.
12.4 [Reserved.]
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12.5 TAX OPINION. The Founders shall have received the opinion of
▇▇▇▇▇▇▇▇ LLP, dated the Closing Date, to the effect that, for United States
federal income tax purposes, (i) the formation and merger of each Founder
Newco with and into New United, and the merger of United/New United Merger
Sub with and into United should be disregarded, and the acquisitions
contemplated by this Agreement, including the direct or indirect contribution
of assets by Liberty and Liberty Global to New United, when viewed as a
collective whole, will be treated as a transfer by the various parties hereto
of property to New United pursuant to Section 351 of the Code, and (ii) no
gain or loss will be recognized by the stockholders of United upon the
receipt of stock in New United upon the merger of the Founder Newcos with and
into New United or the merger of United/New United Merger Sub with and into
United. In rendering such opinion, ▇▇▇▇▇▇▇▇ LLP may require and rely upon
(and may incorporate by reference) representations and covenants made in
certificates provided by the parties hereto and upon such other documents and
data as ▇▇▇▇▇▇▇▇ LLP deems appropriate as a basis for such opinions.
ARTICLE XIII
TAX MATTERS
13.1 [Reserved.]
13.2 [Reserved.]
13.3 [Reserved.]
13.4 TRANSFER TAXES. All sales, use, transfer, stamp, value added,
duty, excise, stock transfer, real property transfer, real property
recording, real property gains and other similar taxes and fees arising out
of or in connection with the transactions contemplated by this Agreement and
the other Transaction Documents shall be paid by New United.
13.5 [Reserved.]
13.6 [Reserved.]
13.7 [Reserved.]
13.8 [Reserved.]
13.9 RESTRUCTURING TRANSACTION INDEMNITY. If on or before the
Closing Date, UPC or Belmarken Holding B.V. refinances, restructures,
reorganizes, or engages in any similar transaction (a "RESTRUCTURING
TRANSACTION") with respect to or affecting any of the Liberty UPC Bonds or
the Belmarken Notes, and such Restructuring Transaction causes Liberty or any
of its Affiliates, successors or assigns to recognize income or gain or
otherwise incur any Tax, then New United shall indemnify and hold harmless
Liberty and its Affiliates, successors and assigns, on an After-Tax Basis,
from and against the amount of any Adjustments that arise from such
Restructuring Transaction. New United shall pay such amounts within ten
calendar days after the later of (1) the filing of any Tax Return which
includes such income or gain recognized, or which is otherwise filed with
respect to any Tax incurred, by Liberty, or any of its Affiliates,
69
successors or assigns in connection with such Restructuring Transaction, and
(2) the date New United receives notice from Liberty demanding payment of
such indemnity, and to the extent not paid within such ten-day period, the
amount due shall thereafter include interest thereon at a rate per annum
equal to the prime rate as publicly announced from time to time by The Bank
of New York, adjusted as and when changes to such rate shall occur,
compounded semi-annually. New United shall pay such indemnification amount,
at its election, either (a) in cash or (b) in shares of New United Class C
Stock equal to the quotient of (x) the amount of such indemnification
payment, divided by (y) US $5.00 (subject to adjustment in the same manner as
set forth in Section 2.4).
13.10 TREATMENT OF INDEMNITY PAYMENTS. To the extent permitted by
law, the parties agree to treat indemnity payments under this Article XIII as
adjustments to the consideration paid for the assets being contributed by
Liberty and Liberty Global pursuant to this Agreement.
13.11 SURVIVAL. The covenants and agreements set forth in this
Article XIII and in Section 7.6 shall survive until the expiration of the
statutes of limitations applicable to liability to the relevant taxing
authority for payment of the Tax.
ARTICLE XIV
CLOSING; CLOSING DATE
14.1 CLOSING. Subject to the terms and conditions of this
Agreement, the closing of the transactions contemplated by Sections 2.2, 2.3
and 2.5 (the "CLOSING") shall take place at the executive offices of Liberty
in Englewood, Colorado, or at such other place as the parties may agree,
beginning at 10:00 a.m., local time, on a Business Day selected by the
parties that is on or prior to the fifth Business Day following the day on
which the last of the conditions to the Closing set forth in Articles VIII,
IX, X, XI and XII is satisfied or waived, or on such later date as may be
agreed to by the parties.
14.2 CLOSING DELIVERIES. At the Closing:
(a) each Founder shall deliver or cause to be delivered:
(i) to New United, such documents or instruments
as may be necessary or that New United may
reasonably request in order to effect the
merger of each of the Founder Newcos into
New United, in accordance with the Founder
Newco Merger Agreements and this Agreement,
including (if applicable) (A) delivery of
certificates representing all of the issued
and outstanding limited liability company
membership interests of the applicable
Founder Newco for cancellation against
delivery of the applicable Founder
Consideration Shares and (B) evidence of the
full and unconditional release of any Liens
and Restrictions on the shares of United
Common Stock held by each of the Founder
Newcos, as set forth in Section 2.2(b);
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(ii) to Liberty, Liberty Global, New United and
each other Founder, duly executed
counterparts of the Stockholders Agreement;
(iii) to New United and each other Founder, duly
executed counterparts of the Voting
Agreement; and
(iv) if such Founder is a Series E Holder, (A) to
United, the stock certificate or stock
certificates representing all shares of
United Series E Preferred Stock held by such
Series E Holder for cancellation against
delivery of the appropriate number of shares
of Surviving Entity Class A Stock, as
contemplated by the United/New United Merger
Agreement, and (B) to New United and each
other Series E Holder, duly executed
counterparts of the Exchange Agreement.
(b) Liberty Global shall deliver or cause to be delivered:
(i) to New United, the stock certificate or
stock certificates representing the Liberty
Global Shares, all duly endorsed in blank or
with separate notarized stock powers
attached thereto duly executed in blank and
otherwise in proper form for transfer with
all necessary documentary or transfer tax
stamps affixed;
(ii) to New United, Liberty and each Founder,
duly executed counterparts of the
Stockholders Agreement;
(iii) to New United and Liberty, duly executed
counterparts of the Standstill Agreement and
the Registration Rights Agreement; and
(iv) to New United and Liberty, duly executed
counterparts of the New United Covenant
Agreement.
(c) ▇▇▇▇▇▇▇▇▇ shall deliver to New United a stock certificate
representing one share of United Class A Stock, duly endorsed in blank or with a
separate notarized stock power attached thereto duly executed in blank and
otherwise in proper form for transfer with all necessary documents or transfer
tax stamps affixed.
(d) Liberty shall deliver or cause to be delivered:
(i) to New United, (A) the Belmarken Notes or
the proceeds thereof, in each case in proper
form for transfer, (B) appropriate
instruments, duly executed by Liberty Sub,
assigning all of Liberty Sub's rights and
obligations under the Belmarken Loan
Agreements, (C) payment of the Cash
Contribution, (D) the Note Shares and (E)
the Liberty UPC Bonds and/or the
Restructuring Proceeds, in each case in
proper form for transfer;
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(ii) to New United and LMI, duly executed
counterparts of the No Waiver Agreement;
(iii) [Reserved.]
(iv) to New United, Liberty Global and each
Founder, duly executed counterparts of the
Stockholders' Agreement;
(v) to New United and Liberty Global, duly
executed counterparts of the Standstill
Agreement and the Registration Rights
Agreement;
(vi) to United and Liberty Global, duly executed
counterparts of the United/Liberty
Agreement;
(vii) to Liberty Global and New United, duly
executed counterparts of the New United
Covenant Agreement; and
(viii) if the Note Repayment Amount or any portion
thereof is being paid at the Closing, to
UIPI, (A) payment of the Note Repayment
Amount or portion thereof by delivery of
cash, Liberty 2009 Notes or a combination
thereof, or such other form of consideration
provided for in the Notes Tender Letter
Agreement or as may be acceptable to United,
as provided in Section 2.3 and (B) if
applicable, a duly executed counterpart of
the Liberty 2009 Notes Registration Rights
Agreement.
(e) New United shall deliver or cause to be delivered:
(i) to Liberty Global or the appropriate
Contributing Party or Contributing Parties,
newly issued stock certificates representing
the Liberty Global Consideration Shares;
(ii) to each Founder, newly issued stock
certificates representing the Founder
Consideration Shares to be issued to such
Founder pursuant to Section 2.2(b),
registered in the name of such Founder;
(iii) to Liberty or the appropriate Contributing
Party or Contributing Parties, newly issued
stock certificates representing the Liberty
Consideration Shares and the Liberty
Contribution Shares;
(iv) to Liberty, appropriate instruments, duly
executed by New United, assuming all of
Liberty Sub's obligations under the
Belmarken Loan Agreements;
(v) to Liberty and LMI, duly executed
counterparts of the No Waiver Agreement;
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(vi) to Liberty Global, Liberty and each Founder,
duly executed counterparts of the
Stockholders Agreement;
(vii) to each Founder, duly executed counterparts
of the Voting Agreement;
(viii) to Liberty Global and Liberty, duly executed
counterparts of the Standstill Agreement and
the Registration Rights Agreement;
(ix) to United, duly executed counterparts of the
Certificate of Merger;
(x) to each Series E Holder, duly executed
counterparts of the Exchange Agreement; and
(xi) to Liberty and Liberty Global, duly executed
counterparts of the New United Covenant
Agreement.
(f) United shall deliver or cause to be delivered:
(i) to New United, duly executed counterparts of
the Certificate of Merger;
(ii) if, at the Closing, the Note Repayment
Amount or any portion thereof is being paid
or the $310,000,000 Notes or any portion
thereof are being assumed by New United, to
Liberty, (A) if applicable, the $310,000,000
Notes for cancellation against payment of
the Note Repayment Amount as provided in
Section 2.3, (B) if applicable, a
counterpart of the Liberty 2009 Notes
Registration Rights Agreement, duly executed
by UIPI and United and (C) an appropriate
instrument, duly executed by United and by
each of its Controlled Affiliates that is a
beneficiary of the Liberty Guaranty,
irrevocably releasing Liberty from all of
its obligations under the Liberty Guaranty;
and
(iii) to Liberty and Liberty Global, duly executed
counterparts of the United/Liberty
Agreement; and
(iv) to each Series E Holder, newly issued stock
certificates representing the shares of
Surviving Entity Class A Stock to be issued
to such Series E Holder, as contemplated by
the United/New United Merger Agreement,
registered in the name of such Series E
Holder.
(g) LMI shall deliver or cause to be delivered to New United
and Liberty, duly executed counterparts of the No Waiver Agreement.
(h) Each of the parties shall also deliver or cause to be
delivered the certificates, opinions and other documents required by Articles
VIII, IX, X, XI and XII.
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(i) All shares of New United Class C Stock required to be
delivered to a Liberty Party shall be represented by newly issued stock
certificates registered in the name of the applicable Liberty Party or, at its
direction, an Affiliate thereof. All payments of cash to be made to a party or
an Affiliate thereof shall be made by wire transfer of immediately available
funds to an account or accounts at a domestic bank identified by the applicable
party by written notice to the party making or causing to be made such payment
at least three Business Days prior to the applicable Closing.
ARTICLE XV
SURVIVAL OF REPRESENTATIONS, WARRANTIES
AND COVENANTS; INDEMNIFICATION
15.1 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS. All
representations and warranties contained in this Agreement shall survive the
execution and delivery hereof and the Closing hereunder, and, except as
otherwise specifically provided in this Agreement, shall thereafter terminate
and expire on the first anniversary of the Closing Date; provided, however,
that the representations and warranties set forth in Sections 4.2 (fourth and
fifth sentences only), 4.3, 4.4, 4.5, 4.7, 4.11, 5.3(c), 5.4, 5.7,
6.1(c)(ii), 6.1(d), 6.1(e), 6.1(f)(i) (second, third and fourth sentences
only), 6.1(f)(iv), 6.1(g)(iii), 6.1(j), 6.1(k) (last sentence only), 6.1(o),
6.2(b)(i) (eighth sentence only), 6.2(c)(ii), 6.2(d), 6.2(e), 6.2(g)(iii),
6.2.(j), and 6.2(k) shall survive until the expiration of the applicable
statute of limitations. The covenants and agreements made by each party in
this Agreement and the other Transaction Documents will survive the Closing
without limitation (except pursuant to their terms). Any representation,
warranty or covenant that is the subject of a claim or dispute asserted in
writing prior to the expiration of the applicable of the above-stated periods
shall survive with respect to such claim or dispute until the final
resolution thereof.
15.2 INDEMNIFICATION BY LIBERTY PARTY. Subject to written notice
of such claim for indemnification being given to the applicable Liberty Party
within the appropriate survival period referred to in Section 15.1, such
Liberty Party, severally and not jointly, hereby agrees to indemnify and hold
New United and its directors, officers, employees, Affiliates, agents,
successors and assigns (collectively, the "LIBERTY MEDIA INDEMNIFIED
PARTIES") harmless from and against any and all losses, liabilities, damages,
deficiencies, and obligations ("LOSSES") resulting from, based upon, arising
out of or otherwise in respect of, and all claims, actions, suits,
proceedings, demands, judgments, assessments, fines, interest, penalties,
costs and expenses (including amounts reasonably paid in settlement and
reasonable legal, accounting, experts and other fees, costs and expenses)
("CLAIMS") incident or relating to or resulting from, (a) any inaccuracy in
or any breach of any representation or warranty of such Liberty Party
contained in this Agreement or in any certificate delivered by or on behalf
of such Liberty Party pursuant to this Agreement, (b) any nonperformance or
breach of any covenant or agreement of such Liberty Party contained in this
Agreement or (c) any Claim brought by a third party against a Liberty Media
Indemnified Party in respect of any untrue statement of a material fact in
the Proxy Statement or Registration Statement, or omission to state any
material fact required to be stated therein, or necessary in order to make
the statements therein, in light of the circumstances under which they were
made, not misleading to the extent that such untrue statement or omission was
74
based upon information provided by or on behalf of such Liberty Party in
writing expressly for purposes of inclusion in the Proxy Statement or
Registration Statement.
15.3 INDEMNIFICATION BY FOUNDERS. Subject to written notice of
such claim for indemnification being given to the applicable Founder within
the appropriate survival period referred to in Section 15.1, such Founder,
severally and not jointly, hereby agrees to indemnify and hold New United and
its directors, officers, employees, Affiliates, agents, successors and
assigns (collectively, the "FOUNDER INDEMNIFIED PARTIES") harmless from and
against any and all Losses resulting from, based upon, arising out of or
otherwise in respect of, and all Claims incident or relating to or resulting
from (a) any inaccuracy in or any breach of any representation or warranty of
such Founder contained in this Agreement or in any certificate delivered by
or on behalf of such Founder or its Founder Newco pursuant to this Agreement
or the applicable Founder Newco Merger Agreement, (b) any nonperformance or
breach of any covenant or agreement of such Founder contained in this
Agreement, and (c) any Claim brought by a third party against a Founder
Indemnified Party in respect of any untrue statement of a material fact in
the Proxy Statement or Registration Statement, or omission to state any
material fact required to be stated therein, or necessary in order to make
the statements therein, in light of the circumstances under which they were
made, not misleading to the extent that such untrue statement or omission was
based upon information provided by or on behalf of such Founder in writing
expressly for purposes of inclusion in the Proxy Statement or Registration
Statement.
15.4 INDEMNIFICATION BY NEW UNITED AND UNITED. Subject to written
notice of such claim for indemnification being given to New United within the
appropriate survival period referred to in Section 15.1, New United hereby
agrees to indemnify and hold each Liberty Party and their respective
directors, officers, employees, Affiliates, agents, successors and assigns
(collectively, the "NEW UNITED INDEMNIFIED PARTIES") harmless from and
against any and all Losses resulting from, based upon, arising out of or
otherwise in respect of, and all Claims incident or relating to or resulting
from (a) any inaccuracy in or any breach of any representation or warranty of
United or New United contained in this Agreement or in any certificate
delivered by or on behalf of United or New United pursuant to this Agreement,
(b) any nonperformance or breach of any covenant or agreement of United or
New United contained in this Agreement or any other Transaction Document, (c)
any Claim brought by a third party against a New United Indemnified Party in
respect of any untrue statement of a material fact in the Proxy Statement or
Registration Statement, or omission to state any material fact required to be
stated therein, or necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading, except
to the extent that such untrue statement or omission was based upon
information provided by or on behalf of a Liberty Party in writing expressly
for purposes of inclusion in the Proxy Statement or Registration Statement,
and (d) all obligations and liabilities of whatever kind and nature, primary
or secondary, direct or indirect, absolute or contingent, known or unknown,
whether arising before, on or after the Closing Date arising out of or
relating to the Belmarken Loan Agreements or any Restructuring Transaction,
other than to the extent such obligation or liability arises out of a breach
of a representation, warranty, covenant or agreement of the Liberty Parties
contained in this Agreement. Subject to written notice of such claim for
indemnification being given to United within the appropriate survival period
referred to in Section 15.1, United hereby agrees to indemnify and hold New
United and its directors, officers, employees, Controlled Affiliates, agents,
successors and assigns (collectively, the "UNITED INDEMNIFIED PARTIES")
harmless from and against any and all Losses
75
resulting from, based upon, arising out of or otherwise in respect of, and
all Claims incident or relating to or resulting from (a) any inaccuracy in or
any breach of any representation or warranty of United contained in this
Agreement or in any certificate delivered by or on behalf of United pursuant
to this Agreement, (b) any nonperformance or breach of any covenant or
agreement of United contained in this Agreement or any other Transaction
Document and (c) any Claim brought by a third party against a United
Indemnified Party in respect of any untrue statement of a material fact in
the Proxy Statement or Registration Statement, or omission to state any
material fact required to be stated therein, or necessary in order to make
the statements therein, in light of the circumstances under which they were
made, not misleading, except to the extent that such untrue statement or
omission was based upon information provided by or on behalf of a Liberty
Party in writing expressly for purposes of inclusion in the Proxy Statement
or Registration Statement.
15.5 DEFENSE OF ACTION.
(a) Any Person seeking indemnification under Section 15.2,
15.3 or 15.4 (the "INDEMNIFIED PARTY") with respect to any third party claim,
investigation, action, suit or proceeding (collectively, an "ACTION") shall
promptly give notice of such Action to the party from which such indemnification
is sought (the "INDEMNIFYING PARTY"). The Indemnified Party's failure to so
notify the Indemnifying Party of any Action shall not release the Indemnifying
Party, in whole or in part, from its obligations to indemnify under this
Article, except to the extent that the Indemnified Party's failure to so notify
actually prejudices the Indemnifying Party's ability to defend against such
Action. The Indemnified Party shall be entitled, at the sole expense and
liability of the Indemnifying Party, to exercise full control of the defense,
compromise or settlement of any such Action unless the Indemnifying Party,
within a reasonable time after the giving of such notice by the Indemnified
Party, shall (i) deliver a written confirmation to such Indemnified Party that
the indemnification provisions of Section 15.2, 15.3 or 15.4 (as the case may
be) are applicable to such Action and that, subject to the remaining provisions
of this Article XV, the Indemnifying Party will indemnify such Indemnified Party
in respect of such Action pursuant to the terms of Section 15.2, 15.3 or 15.4
(as the case may be), (ii) notify such Indemnified Party in writing of the
Indemnifying Party's intention to assume the defense thereof, and (iii) retain
legal counsel reasonably satisfactory to such Indemnified Party to conduct the
defense of such Action.
(b) The Indemnified Party and the Indemnifying Party shall
cooperate with the party assuming the defense, compromise or settlement of any
such Action in accordance herewith in any manner that such party reasonably may
request. If the Indemnifying Party so assumes the defense of any such Action,
the Indemnified Party shall have the right to employ separate counsel and to
participate in (but not control) the defense, compromise, or settlement thereof,
but the fees and expenses of such counsel shall be the expense of such
Indemnified Party unless (i) the Indemnifying Party has specifically agreed to
pay such fees and expenses, (ii) any relief other than the payment of money
damages is sought against the Indemnified Party or (iii) the Indemnified Party
shall have been advised by its counsel that there may be one or more legal
defenses available to it that are different from or additional to those
available to the Indemnifying Party or that there may be a conflict of interest
between the Indemnifying Party and the Indemnified Party in the conduct of the
defense of such Action (in either of which cases the Indemnifying Party shall
not have the right to direct the defense, compromise or settlement of
76
such Action on behalf of the Indemnified Party), and in any such case the
reasonable fees and expenses of such separate counsel shall be borne by the
Indemnifying Party, it being understood and agreed, however, that the
Indemnifying Party shall not be liable for the fees and expenses of more than
one separate firm of attorneys at any time for the Indemnified Party together
with its Affiliates, unless there shall be a conflict of interest between the
Indemnified Party and an Affiliate thereof, in which case the Indemnifying
Party shall not be liable for the fees and expenses of more than an aggregate
of two separate firms of attorneys at any time for the Indemnified Party and
its Affiliates. No Indemnified Party shall settle or compromise or consent to
entry of any judgment with respect to any such Action for which it is
entitled to indemnification hereunder without the prior written consent of
the Indemnifying Party, unless the Indemnifying Party shall have failed,
after reasonable notice thereof, to undertake control of such Action in the
manner provided above in this Section 15.5. The Indemnifying Party shall not,
without the written consent of the Indemnified Party, settle or compromise or
consent to entry of any judgment with respect to any such Action (x) in which
any relief other than the payment of money damages is or may be sought
against any Indemnified Party, or (y) that does not include as an
unconditional term thereof the giving by the claimant, party conducting such
investigation, plaintiff or petitioner to such Indemnified Party of a release
from all liability with respect to such Action.
(c) If the indemnification provisions contained in this
Article XV and the indemnification provisions contained in Article XIII are both
applicable with respect to any particular matter, then the indemnification
provisions contained in Article XIII shall be controlling and shall apply for
all purposes as to such matter.
15.6 LIMITATIONS ON INDEMNIFICATION FOR BREACH OF REPRESENTATIONS
AND WARRANTIES. No indemnification by a Liberty Party or New United under
Section 15.2 or 15.4 hereof in respect of an inaccuracy in or breach of any
representation or warranty in this Agreement or in any certificate delivered
pursuant hereto (other than, in each case, the Basket Exceptions, as defined
below), shall be due and payable (a) in respect of any individual claim
unless such claim equals or exceeds US $1,000,000, and (b) unless the
aggregate amount of such claims equal to or in excess of US $1,000,000
exceeds US $150,000,000 (the "BASKET AMOUNT"), whereupon the applicable
Liberty Party or New United, as the case may be, shall be obligated to pay
only the excess of the aggregate amount of such claims for indemnification
over the Basket Amount. The indemnification obligations under Sections 15.2
and 15.4 in respect of an inaccuracy in or breach of any of the following
representations or warranties (collectively, the "BASKET EXCEPTIONS") will
not be subject to the limitations of the preceding sentence: the
representations and warranties in Sections 4.3, 6.1(d) and 6.2(d) ("Brokers'
and Finders' Fees"); the representations and warranties in Sections 4.5
("Ownership of United Class B Stock"); the representations and warranties in
Sections 4.2 (fifth sentence only and only as such sentence relates to (1)
the certificates or articles of incorporation and bylaws of the Liberty
Parties and (2) Delaware Law), 6.1(c)(ii) (second sentence only and only as
such sentence relates to (1) the certificate of incorporation and bylaws of
United, (2) Delaware law and (3) any Contract evidencing or securing any
outstanding indebtedness of United or any of its Subsidiaries or pursuant to
which any such outstanding indebtedness was incurred) and 6.2(c)(ii) ("Consents
and No Conflicts"); the representations and warranties in Sections 4.4,
6.1(e) and 6.2(e) ("Legal Proceedings"); the representations and warranties
in Sections 6.1(k) ("Contracts and Commitments") (last sentence only) and
6.2(j) ("Contracts; No Breach"); the representations and warranties in
Section 6.1(f)(iv) ("United
77
A/P"); the representations and warranties in Sections 6.1(o) and 6.2(k)
("Section 203 and Similar Laws"); the representations and warranties in the
eighth sentence of Section 6.2(b)(i), that the shares of New United stock to
be issued pursuant to this Agreement and the other Transaction Documents have
been duly authorized and when issued will be validly issued, fully paid,
nonassessable and free of preemptive rights and Liens and Restrictions; the
representations and warranties in Section 6.1(j)(ix) ("Taxes"); the
representations and warranties in Section 4.7 ("Belmarken Notes"); the
representations and warranties in Section 4.11 ("Liberty UPC Bonds"); and the
representations and warranties in Sections 6.2(g)(iii) with respect to the
absence of New United liabilities. In the event of any inaccuracy in or any
breach of any representation or warranty in this Agreement or in any
certificate delivered pursuant hereto, if such representation or warranty
contains a materiality qualifier (including without limitation a reference to
a Material Adverse Effect, a Material Adverse Change, a Liberty Material
Adverse Effect, a New United Material Adverse Effect or a United Material
Adverse Effect) then such materiality qualifier shall be considered for
purposes of determining whether there has been any inaccuracy or breach
subject to indemnification under this Article XV, but such materiality
qualifier shall not be considered for purposes of determining whether any
claim pursuant to this Article XV equals or exceeds the monetary thresholds
set forth in clauses (a) and (b) above.
15.7 INSURANCE PROCEEDS. The amount that any party may be required
to pay to another party pursuant to this Article XV shall be reduced
(retroactively, if necessary) by any insurance proceeds or refunds actually
recovered by or on behalf of the applicable Indemnified Party in reduction of
the related Losses and Claims. If an Indemnified Party shall have received
the payment required by this Article XV from the Indemnifying Party in
respect of Losses and Claims and shall subsequently receive insurance
proceeds in respect of such Losses and Claims, then the Indemnified Party
shall promptly repay to the Indemnifying Party a sum equal to the amount of
such insurance proceeds or refunds actually received, net of costs and
expenses, but not exceeding the amount paid by the Indemnifying Party in
respect of such Losses and Claims.
15.8 EXCLUSIVE MONETARY REMEDY; NO CONSEQUENTIAL DAMAGES. The
parties hereto hereby acknowledge and agree that their sole and exclusive
remedy for monetary damages with respect to any and all claims relating to
the subject matter of this Agreement (except damages resulting from the
commission of fraud with respect to the subject matter of this Agreement)
shall be pursuant to the indemnification provisions set forth in Articles
XIII and XV; provided, however, that nothing in this Section 15.8 shall limit
in any way the availability of specific performance, injunctive relief or
other equitable remedies to which a party may otherwise be entitled. In no
event shall any party hereto be liable to another party hereto for such other
party's lost profits, lost revenues or other indirect or consequential
damages.
ARTICLE XVI
TERMINATION OF AGREEMENT
16.1 TERMINATION. This Agreement may be terminated and the
transactions contemplated hereby and by the other Transaction Documents
abandoned at any time prior to the Closing (i) by the mutual written consent
of United and Liberty, (ii) by Liberty if United shall not have obtained the
Exchange Ratio Fairness Opinion and the Indenture Fairness Opinion on or
before January 15, 2002, or (iii) by either United or Liberty by giving
written notice of
78
termination to the other if the Closing shall not have occurred on or before
February 28, 2002; provided, however, that (A) if the United Stockholders
Meeting has not been held on or before February 28, 2002, but (1) the United
Stockholders Meeting is scheduled to occur on or before March 29, 2002 and
(2) the Proxy Statement was mailed to United's Stockholders on or before
February 14, 2002, then such date shall be extended to ▇▇▇▇▇ ▇▇, ▇▇▇▇, (▇) if
the Closing has not occurred solely because a "Default" or "Event of Default"
within the meaning of the Indenture shall have occurred and be continuing
(other than any "Event of Default" within the meaning of Sections 6.1(a),
6.1(b), 6.1(e), 6.1(g) or 6.1(h) of the Indenture) and, as a result of the
continuance of such "Default" or "Event of Default," the condition to closing
set forth in Section 11.1 (insofar as it relates to Section 6.1(c)(ii)(z))
shall not have been satisfied, such "Default" or "Event of Default" is of a
type that is amenable to cure without violation of the terms of this
Agreement and United is, and has been since becoming aware of such "Default"
or "Event of Default," vigorously pursuing the cure of such "Default" or
"Event of Default," such date shall be extended once to the earliest of (1)
April 13, 2002 and (2) 14 days from the date that, but for the occurrence or
continuance of such "Default" or "Event of Default," all of the conditions to
Closing (except for the delivery of consideration, instruments, certificates
and opinions to be delivered at the Closing) were or could have been
satisfied, and (C) if the Closing shall not have occurred on or before
February 28, 2002 solely because an "Acceleration Notice" has been given (and
not rescinded) pursuant to Section 6.2 of the Indenture, and as a result the
condition to Closing set forth in Section 11.9 has not been satisfied, but
United is vigorously contesting such Acceleration Notice in an appropriate
legal forum in good faith, then such date shall be extended to the earliest
of (1) April 29, 2002, (2) such date that United is no longer vigorously
contesting such Acceleration Notice in an appropriate legal forum in good
faith and (3) such date that such Acceleration Notice is rescinded; provided
further, however, that the right to terminate this Agreement under clause
(iii) shall not be available to United, on the one hand, or Liberty, on the
other hand, if the failure of the Closing to occur prior to such date was a
result of, in the case of United, any breach by United or any of its
Affiliates or, in the case of Liberty, any breach by any Liberty Party or any
of its Affiliates, of any of the representations, warranties, covenants or
agreements of such Person contained herein or in the other Transaction
Documents.
16.2 LIMITATION OF LIABILITIES IN THE EVENT OF TERMINATION. In the
event of any termination of this Agreement pursuant to Section 16.1, this
Agreement shall forthwith become wholly void and of no further force and
effect and there shall be no liability on the part of any of the parties
hereto or their respective Affiliates, officers or directors by reason hereof
except (i) that the provisions of Sections 2.3(a)(i) (proviso only), 7.14(b),
7.14(c), 7.14(d), this Section 16.2, Section 16.3 and Article XVII shall
survive the termination of this Agreement, and (ii) nothing herein shall
relieve any party hereto from liability for any breach by it or any of its
Affiliates of any of its or their representations, warranties, covenants or
agreements made herein or in the other Transaction Documents.
16.3 STOCKHOLDER ARRANGEMENTS. In the event of any termination of
this Agreement pursuant to Section 16.1, Liberty, United and the Founders
will in good faith negotiate agreements providing for stockholder and
standstill obligations and containing terms substantially similar to those
provided for in the forms of Stockholders Agreement and Standstill Agreement
included as exhibits to this Agreement, PROVIDED THAT (a) the "Maximum
Percentage" or similar provision in such agreements shall be computed in a
manner consistent with the methodology set forth in Section 7.23(c) hereof,
(b) the Note Shares and any shares of United
79
Class A Stock acquired by Liberty and its Controlled Affiliates in reliance
on clause (a)(iii) of the definition of "Maximum Percentage" shall not,
pursuant to such agreements, be exchangeable into shares of United Class B
Stock as provided in Section 10(a) of the Stockholders Agreement.
ARTICLE XVII
MISCELLANEOUS
17.1 EXPENSES. Except as set forth specifically herein, each party
hereto shall pay its own expenses (including fees and expenses of legal
counsel, investment bankers, brokers or other representatives or consultants)
in connection with the transactions contemplated hereby (whether or not such
transactions are consummated). United shall pay, or cause to be paid, (a) all
filing fees in connection with any filings under the HSR Act required to be
made by ▇▇▇▇▇▇▇▇▇ or by Liberty Media or any of its subsidiaries and (b) all
filing fees and other costs and expenses of any kind whatsoever (including
fees and expenses of counsel) in connection with obtaining or making any
consents, approvals or waivers of, notices to or filings with any third
parties or Governmental Authorities that are required to be obtained or made
as a result of the Closing occurring on any date after November 30, 2001. In
the event of any proceeding to enforce this Agreement, the prevailing party
shall be entitled to receive from the losing party all reasonable costs and
expenses, including the reasonable fees of attorneys, accountants and other
experts, incurred by the prevailing party in investigating and prosecuting
(or defending) such action at trial or upon any appeal.
17.2 ENTIRE AGREEMENT; RELEASE. This Agreement (together with the
Schedules and Exhibits annexed hereto) and the other Transaction Documents
contain, and are intended as, a complete statement of all of the terms of the
agreements among the parties and their respective Affiliates with respect to
the matters provided for herein and therein, and, whether or not the Closing
occurs, supersede and discharge any previous agreements and understandings
between the parties with respect to those matters, including the Original
Agreement (except for the Disclosure Schedules provided pursuant thereto),
the Letter Agreement and the August 1999 Agreement; provided, however, that
(1) the Founders' Agreement, dated as of September 30, 1999, among certain of
the Founders shall survive the execution of the Original Agreement and the
execution of this Agreement in accordance with its terms with respect to the
Founders that are party thereto, (2) the Notes Tender Letter Agreement shall
survive the execution hereof in accordance with its terms, and (3) the letter
agreement, dated September 18, 2000, between United and Liberty Media (the
"SEPTEMBER 18 LETTER AGREEMENT") shall survive the execution hereof in
accordance with its terms, except that (i) references therein to the "June
2000 Agreement" shall be deemed to refer to the Letter Agreement and the
reference in the third paragraph thereof to the "Sum of the Parts" method set
forth in paragraph 5 of Exhibit A to the "June 2000 Agreement" shall instead
be deemed to refer to the Sum-of-the-Parts method described in paragraph 5 of
the Letter Agreement, and (ii) the September 18 Letter Agreement shall
terminate immediately upon the occurrence of the Closing. Each of United, on
the one hand, and Liberty and LMI, on the other hand, furthermore, hereby
releases and forever discharges each other party and their respective
Affiliates of and from any and all claims, causes of action and liabilities
of any kind whatsoever, now existing or hereafter arising, whether known or
unknown, that arise out of or in any way relate to the Letter Agreement, its
inducement, its
80
negotiation, the negotiation of definitive documents to consummate the
transactions contemplated by it or its alleged non-performance, including,
without limitation, claims for fraud, misrepresentation, non-disclosure,
promissory estoppel, equitable estoppel, breach of express contract, breach
of implied contract or breach of the covenant of good faith and fair dealing.
17.3 GOVERNING LAW; WAIVER OF JURY TRIAL, ETC. This Agreement shall
be governed by and construed in accordance with the laws of the State of
Colorado applied to contracts made and wholly performed in such State,
without regard to principles governing conflicts of law, except to the extent
that the United/New United Merger and the Founder Newco Mergers are
necessarily governed by the laws of the State of Delaware. Each of the
parties (a) will submit itself to the non-exclusive jurisdiction of any
federal court located in the State of Colorado or any Colorado state court
having subject matter jurisdiction in the event any dispute arises out of
this Agreement, (b) agrees that venue will be proper as to any proceeding
brought in any such court with respect to such a dispute, (c) will not
attempt to deny or defeat such personal jurisdiction or venue by motion or
other request for leave from any such court and (d) WAIVES ANY RIGHT TO A
TRIAL BY JURY in any proceeding brought with respect to this Agreement or the
transactions contemplated hereby.
17.4 HEADINGS. The table of contents and article and section
headings of this Agreement are for reference purposes only and are to be
given no effect in the construction or interpretation of this Agreement.
17.5 NOTICES. All notices and other communications hereunder shall
be in writing and shall be delivered personally, telecopied (if receipt of
which is confirmed by the person to whom sent), sent by nationally recognized
overnight delivery service or mailed by registered or certified mail (if
return receipt is requested) to the parties at the following addresses (or to
such other Person or address for a party as shall be specified by such party
by like notice) (notice shall be deemed given upon receipt, if delivered
personally, by overnight delivery service or by telecopy, or on the third
Business Day following mailing, if mailed, except that notice of a change of
address shall not be deemed given until actually received):
(a) If to any Liberty Party, to it at:
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
81
with copies to:
▇▇▇▇▇ ▇▇▇▇▇ L.L.P.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
and
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇. ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
(b) If to the Founders, to:
▇▇▇▇ ▇▇▇▇▇▇▇▇▇
c/o UnitedGlobalCom, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, #▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
(c) If to any of United, New United or United/New United
Merger Sub, to such party at:
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, #▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Holme ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: W. ▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
82
17.6 SEPARABILITY. If at any time any of the covenants or
provisions contained herein shall be deemed invalid or unenforceable by the
laws of the jurisdiction wherein it is to be enforced, such covenants or
provisions shall be considered divisible as to such portion and such
covenants or provisions shall become and be immediately amended and reformed
to include only such covenants or provisions as are enforceable by the court
or other body having jurisdiction of this Agreement; and the parties agree
that such covenants or provisions, as so amended and reformed, shall be valid
and binding as though the invalid or unenforceable portion had not been
included herein.
17.7 AMENDMENT; WAIVER. No provision of this Agreement may be
amended or modified except by an instrument or instruments in writing signed
by the parties hereto. Any party may waive compliance by another with any of
the provisions of this Agreement. No waiver of any provision hereof shall be
construed as a waiver of any other provision. Any waiver must be in writing.
17.8 PUBLICITY. Except as required by law or regulation or the
requirements of The Nasdaq Stock Market or The New York Stock Exchange, no
public disclosure or publicity concerning the subject matter hereof or the
transactions contemplated hereby or by the other Transaction Documents will
be made without the prior approval of Liberty and United.
17.9 ASSIGNMENT AND BINDING EFFECT. Except as contemplated by
Sections 2.2(f) and 7.2, none of the parties hereto may assign any of its
rights or delegate any of its duties under this Agreement without the prior
written consent of (i) United or, following the United/New United Merger, New
United, in the case of any Liberty Party, and (ii) Liberty, in the case of
any Founder, United or New United. All of the terms and provisions of this
Agreement shall be binding on, and shall inure to the benefit of, the
respective successors and permitted assigns of the parties.
17.10 NO BENEFIT TO OTHERS. The representations, warranties,
covenants and agreements contained in this Agreement are for the sole benefit
of the parties hereto, their respective Affiliates, and the respective
successors and assigns of the parties hereto and their respective Affiliates,
and they shall not be construed as conferring and are not intended to confer
any rights on any other Persons.
17.11 COUNTERPARTS. This Agreement may be executed by the parties
hereto in separate counterparts, each of which when so executed and delivered
shall be an original, but all such counterparts shall together constitute one
and the same instrument.
17.12 INTERPRETATION. As used herein, except as otherwise indicated
herein or as the context may otherwise require, the words "include,"
"includes" and "including" are deemed to be followed by "without limitation"
whether or not they are in fact followed by such words or words of like
import; the words "hereof," "herein," "hereunder" and comparable terms refer
to the entirety of this Agreement, including the Exhibits, Disclosure
Schedules and other Schedules hereto, and not to any particular article,
section or other subdivision hereof or Exhibit, Disclosure Schedule or
Schedule hereto; the phrase "made available" means that the information
referred to has been made available if requested by the party hereto to whom
such information is to be made available; any pronoun shall include the
corresponding masculine, feminine and neuter forms;
83
the singular includes the plural and vice versa; references to any agreement
or other document are to such agreement or document as amended and
supplemented from time to time; references to any statute or regulation are
to it as amended and supplemented from time to time, and to any corresponding
provisions of successor statutes or regulations; references to "Article,"
"Section" or another subdivision or to an "Exhibit" or "Schedule" are to an
article, section or subdivision hereof or an "Exhibit" or " Schedule" hereto;
all references to a "Disclosure Schedule" shall be deemed to refer to the
relevant Disclosure Schedule provided pursuant to the Original Agreement; and
all references to "the date hereof," "the date of this Agreement" or similar
terms (but excluding (1) such references as otherwise described in Articles
IV, V and VI, and (2) references to the date of execution hereof) refer to
the date first above written, notwithstanding that the parties may have
executed this Agreement on a later date. In this Agreement, except as
otherwise specifically provided, any reference to any event, change,
condition or effect being "material" with respect to any Person or group of
Persons means any material event, change, condition or effect related to the
condition (financial or otherwise), properties, assets (including intangible
assets), liabilities, business, operations, results of operations or
prospects of such Person or group of Persons. In this Agreement, any
reference to a "Material Adverse Change" or "Material Adverse Effect" with
respect to any Person or group of Persons means any event, change or effect
that is materially adverse to the condition (financial or otherwise),
properties, assets, liabilities, business, operations, results of operations
or prospects of such Person and its Subsidiaries, taken as a whole, except to
the extent that such change, event or effect is attributable to or results
from (i) changes affecting the securities or capital markets or economic
conditions generally in the country or countries in which such Person or
group of Persons conduct their businesses, (ii) changes affecting the
industries in which such Person or group of Persons operate generally (as
opposed to changes affecting any such Person or group of Persons specifically
or predominantly), (iii) the effect of the public announcement of this
Agreement or the pendency of the transactions contemplated hereby and by the
other Transaction Documents, or (iv) changes in GAAP. In this Agreement, any
reference to a party's "knowledge" means such party's actual knowledge after
due inquiry of officers, directors and other key employees of such party
reasonably believed to have knowledge of such matters. Any reference herein
to a "day" or number of "days" (without the explicit qualification of
"Business") shall be deemed to refer to a calendar day or number of calendar
days. If any action or notice is to be taken or given on or by a particular
calendar day, and such calendar day is not a Business Day, then such action
or notice may be taken or given on the next succeeding Business Day.
17.13 RULES OF CONSTRUCTION. The parties hereto agree that they
have been represented by counsel during the negotiation, preparation and
execution of this Agreement and, therefore, waive the application of any law,
regulation, holding or rule of construction providing that ambiguities in an
agreement or other document will be construed against the party drafting such
agreement or document.
84
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first written above.
UNITEDGLOBALCOM, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
President
NEW UNITEDGLOBALCOM, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
President
UNITED/NEW UNITED MERGER SUB, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
President
LIBERTY MEDIA CORPORATION
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-----------------------------------
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Senior Vice President
LIBERTY MEDIA INTERNATIONAL, INC.
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-----------------------------------
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Senior Vice President
LIBERTY GLOBAL, INC.
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-----------------------------------
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Senior Vice President
FOUNDERS:
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-------------------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇▇ HOLDINGS, CO.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
----------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
General Partner
THE ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ FAMILY TRUST
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
----------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Trustee
By ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Attorney-in-Fact
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
----------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Trustee
By ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Attorney-in-Fact
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
----------------------------------------
W. ▇▇▇▇ ▇▇▇▇▇▇, Trustee
By ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Attorney-in-Fact
THE MLS FAMILY PARTNERSHIP LLLP
By: THE ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ TRUST
General Partner
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
----------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Trustee
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
----------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Trustee
By ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Attorney-in-Fact
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-------------------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ LIMITED PARTNERSHIP
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ TRUST
General Partner
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Trustee
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ REVOCABLE TRUST
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Trustee
By ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Attorney-in-Fact
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
BY ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ATTORNEY-IN-FACT
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------------------------
▇▇▇ ▇▇▇▇▇▇▇▇
BY ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ATTORNEY-IN-FACT
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
BY ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ATTORNEY-IN-FACT
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------------------------
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
BY ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ATTORNEY-IN-FACT
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ COMPANY
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
General Partner
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ COMPANY
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇., Trustee
By ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Attorney-in-Fact
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ LIVING TRUST
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Trustee
By ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Attorney-in-Fact
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ LIVING TRUST
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Trustee
By ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Attorney-in-Fact
THE FRIES FAMILY PARTNERSHIP LLLP
By: THE ▇▇▇▇▇ ▇. ▇▇▇▇▇ TRUST
General Partner
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇., Trustee
By ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Attorney-in-Fact
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
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Schedules, Exhibits and Legal Opinions Omitted