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EXHIBIT 7(H)
CONTRIBUTION AND EXCHANGE AGREEMENT
By and Among
LIBERTY MEDIA CORPORATION,
LIBERTY IFE, INC.
and
FOX KIDS WORLDWIDE, INC.
June 11, 1997
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TABLE OF CONTENTS
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1. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. The Contribution. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.1 The Contribution. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.2 Exchange of Stock Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.3 Filing of Charter Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3. Closing Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
4. Representations and Warranties of Liberty and LIFE . . . . . . . . . . . . . . . . . . . . . . . . 7
4.1 Organization and Standing; Articles and By-Laws . . . . . . . . . . . . . . . . . . . . . 7
4.2 Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
4.3 No Conflicts; Required Filings and Consents . . . . . . . . . . . . . . . . . . . . . . . 7
4.4 Litigation; Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
4.5 Title to the IFE Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
4.6 Title to the IFE Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
4.7 No Other Agreements Relating to IFE Securities . . . . . . . . . . . . . . . . . . . . . . 9
4.8 Investment Intent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4.9 No Brokers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4.10 Full Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
5. Representations and Warranties of Fox Kids . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
5.1 Organization and Standing; Articles and By-Laws . . . . . . . . . . . . . . . . . . . . . 9
5.2 Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
5.3 No Conflicts; Required Filings and Consents . . . . . . . . . . . . . . . . . . . . . . . 10
5.4 Capital Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
5.5 The Fox Kids and NPAL Preferred Stocks . . . . . . . . . . . . . . . . . . . . . . . . . . 11
5.6 Compliance with Applicable Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
5.7 Newly Formed Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
5.8 NPAL Financial Statements; Primary US Holding Company . . . . . . . . . . . . . . . . . . 12
5.9 TNCL SEC Filings; TNCL Financial Statements . . . . . . . . . . . . . . . . . . . . . . . 13
5.10 Investment Intent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
5.11 No Brokers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
5.12 Full Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
(i)
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6. Pre-Closing Covenants of Fox Kids, LIFE and Liberty . . . . . . . . . . . . . . . . . . . . . . . 14
6.1 Filings and other Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
6.2 Public Announcements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
6.3 Substitution of Consideration in Certain Circumstances . . . . . . . . . . . . . . . . . . 14
6.4 Notification of Certain Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
6.5 H-S-R Filings; Best Efforts to Close. . . . . . . . . . . . . . . . . . . . . . . . . . . 16
7. Conditions to Each Party's Obligation to Effect the Contribution . . . . . . . . . . . . . . . . . 16
7.1 No Stop Order . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
7.2 Consummation of Share Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
7.3 H-S-R Act. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
8. Additional Conditions to Obligations of Fox Kids . . . . . . . . . . . . . . . . . . . . . . . . . 17
8.1 Accuracy of Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . 17
8.2 Performance of Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
8.3 Officer's Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
8.4 Opinion of Counsel for Liberty and LIFE . . . . . . . . . . . . . . . . . . . . . . . . . 18
8.5 Amended Affiliation Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
8.6 IFE Shareholders Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
9. Additional Conditions to the Obligations of Liberty and LIFE . . . . . . . . . . . . . . . . . . . 18
9.1 Accuracy of Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . 18
9.3 Officer's Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
9.4 Tax Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
9.5 Funding Agreement and Exchange Agreement. . . . . . . . . . . . . . . . . . . . . . . . . 19
9.6 Assets of NPAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
9.7 Opinion of Counsel for Fox Kids . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
9.8 Registration Rights Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
10. Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
10.1 Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
10.2 Effect of Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
11. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
11.1 Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
11.2 Certain Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
11.3 Indemnification by Liberty and LIFE . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
(ii)
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11.4 Indemnification by Fox Kids . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
11.5 Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
12. Miscellaneous Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
12.1 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
12.2 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
12.3 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
12.4 No Adverse Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
12.5 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
12.6 Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
12.7 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
12.8 Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
12.9 Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
12.10 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
EXHIBITS AND SCHEDULES
Exhibit A Share Exchange Agreement
Exhibit B Amended Affiliation Agreement
Exhibit C Exchange Agreement
Exhibit D Funding Agreement
Exhibit E NPAL Certificate of Amendment
Exhibit F Fox Kids Certificate of Designations
Exhibit G Press Release
Exhibit H Opinion by Counsel for Liberty and LIFE
Exhibit I Opinion by Counsel for Fox Kids
Exhibit J Certificates regarding Tax Matters
Schedule 5.8 NPAL Subsidiaries
Schedule 9.8 Terms of Registration Rights Agreement
(iii)
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CONTRIBUTION AND EXCHANGE AGREEMENT
Contribution and Exchange Agreement (this "Agreement"), dated as of
June 11, 1997, by and among Liberty Media Corporation, a Delaware corporation
("Liberty"), Liberty IFE, Inc., a Colorado corporation and a wholly owned
subsidiary of Liberty ("LIFE"), and Fox Kids Worldwide, Inc., a Delaware
corporation ("Fox Kids").
RECITALS
A. LIFE owns of record 7,088,732 shares of Class C non-voting
Common Stock, par value $.01 per share (the "IFE Stock"), of International
Family Entertainment, Inc., a Delaware corporation ("IFE"), and 6% Convertible
Secured Notes due 2004 of IFE in the principal amount of $23,000,000 which, as
of the date hereof, are convertible into 2,587,500 shares of IFE Stock (the
"IFE Notes" and, together with the IFE Stock, the "IFE Securities").
B. LIFE wishes to contribute the IFE Securities to Fox Kids in
exchange for the Consideration (as hereinafter defined) (collectively, the
"Contribution").
C. The Contribution is to be made concurrently with the exchange
of shares of capital stock (the "Share Exchange") contemplated by that certain
Agreement, dated as of the date hereof, among Fox Kids, Saban Entertainment,
Inc., Fox Broadcasting Company, Fox Broadcasting Sub, Inc., ▇▇▇▇▇ & Company
Incorporated, ▇▇▇▇ ▇▇▇▇▇ and the other entities parties thereto, a copy of
which is attached to this Agreement as Exhibit A (the "Share Exchange
Agreement").
D. The Contribution and the Share Exchange are intended to
qualify as a tax-free exchange pursuant to Section 351 of the Internal Revenue
Code of 1986, as amended (the "Code"), except to the extent that the Exchange
Right (as hereinafter defined) constitutes taxable "boot" under the Code.
AGREEMENT
In consideration of the premises and of the mutual representations,
warranties, covenants and agreements contained herein, and in order to set
forth the terms and conditions of the Contribution, the parties to this
Agreement hereby agree as follows:
1. Definitions: As used in this Agreement, terms defined in the
preamble and recitals shall have the respective meanings specified therein and
the terms set forth below shall have the meanings indicated:
"Affiliate" means, when used with reference to a specified
Person, any Person that
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directly or indirectly through one or more intermediaries controls or is
controlled by, or is under common control with, such specified Person. For the
purposes of this definition, control (including the terms controlled by and
under common control with), as used with respect to any Person, shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise. For purposes of this
Agreement, (i) neither IFE nor any of its Subsidiaries shall be deemed an
Affiliate of Liberty, LIFE, Fox Kids or any of their respective Affiliates and
(ii) each of NPAL and Saban Entertainment, Inc., a Delaware corporation, and
their respective Affiliates shall be deemed an Affiliate of Fox Kids.
"Amended Affiliation Agreement" means that certain affiliation
agreement between Satellite Services, Inc. and IFE in the form of Exhibit B
hereto.
"Closing" has the meaning set forth in Section 3.
"Closing Date" has the meaning set forth in Section 3.
"Consideration Adjustment Period" means the period commencing
immediately following the Closing and ending on the date the transactions
contemplated by the Merger Agreement are consummated; provided, however, that
if the Merger Agreement is terminated, the "Consideration Adjustment Period"
shall mean the last to occur of (i) such termination, (ii) November 30, 1997
and (iii) the consummation or termination of the sale of the IFE Class A Stock
pursuant to the Robertsons Class A Purchase Agreement.
"$" means the United States dollar.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Exchange Agreement" means that certain Exchange Agreement,
dated as of the Closing Date, among Liberty, LIFE and NPAL, in the form of
Exhibit C hereto.
"Exchange Right" means the exchange right granted to Liberty
and LIFE under the Exchange Agreement.
"Fox Kids Certificate of Designations" has the meaning set
forth in Section 2.3.
"Fox Kids Disclosure Letter" has the meaning set forth in
Section 5.
"Fox Kids Preferred Stock" means the Series A Preferred Stock,
par value $.001 per share, of Fox Kids.
"Fully Diluted Share Number" means the sum of (i) the number
of shares of IFE Stock owned by LIFE plus (ii) the number of shares of IFE
Stock into which the IFE Notes
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owned by LIFE are convertible, in each case as of the Closing Date.
"Funding Agreement" means that certain Funding Agreement,
dated as of the date hereof, among Fox Kids, NPAL and TNCL, in the form of
Exhibit D hereto.
"Governmental Authority" has the meaning set forth in Section
4.3.
"Highest Per Share Amount" means the highest amount paid, or
agreed to be paid, by Fox Kids, or any Affiliate of Fox Kids, for a share of
capital stock of IFE (including without limitation for any shares of any class
of common stock of IFE) (i) from M.G. "▇▇▇" ▇▇▇▇▇▇▇▇▇, the ▇▇▇▇▇▇▇▇▇ Charitable
Remainder Unitrust, the ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ Irrevocable Trust, the ▇▇▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇ Irrevocable Trust, the ▇▇▇ ▇. ▇▇▇▇▇▇▇ Irrevocable Trust, ▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ (individually and as custodian to and for each
of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇), the ▇▇▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Children's
Trust, the ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ Charitable Trust, any other charitable,
revocable or irrevocable trust created by or for the benefit of the Robertsons,
their children or their respective heirs, The Christian Broadcasting Network,
Inc. or Regent University (and, in each case, from any of their respective
Affiliates), (ii) pursuant to a tender offer made to the public shareholders of
IFE, (iii) pursuant to a merger, binding share exchange or similar agreement
involving IFE (including without limitation the Merger Agreement) (other than
an amount paid in respect of a share of capital stock of IFE to any IFE
stockholder pursuant to Section 262 of the Delaware General Corporation Law),
(iv) in any transaction involving any holder or "group" (within the meaning of
Rule 13d-5(b)(1) under the Exchange Act) that owns, or has the right to dispose
of, or to direct the disposition of, 2 2 % or more of the outstanding shares
of any class of common stock of IFE or (v) in any transaction, or series of
related or unrelated transactions (excluding for purposes of this clause (v)
any transaction referred to in clauses (i) through (iii) above), involving, in
the aggregate (between January 1, 1997 and the end of the Consideration
Adjustment Period), 5% or more of the outstanding shares of any class of
common stock of IFE, in each case appropriately adjusted to take into account
any stock dividend, subdivision, split, or combination involving the capital
stock of IFE during any relevant period.
"IFE Class A Stock" means the Class A Voting Common Stock, par
value $.01 per share, of IFE.
"IFE Class B Stock" means the Class B Common Stock, par value
$.01 per share, of IFE.
"IFE Shareholders Agreement" means that certain Amended and
Restated Shareholder Agreement, dated as of September 1, 1995, by and among
M.G. "▇▇▇" ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, the ▇▇▇▇▇▇▇▇▇ Charitable Remainder
Unitrust, the ▇▇▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Children's Trust, the Christian
Broadcasting Network, LIFE and IFE.
"Lien" means any mortgage, pledge, lien, security interest or
other encumbrance.
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"Material NPAL Subsidiary" means each direct or indirect
Subsidiary of NPAL that constitutes a "Significant Subsidiary" of NPAL within
the meaning of Rule 1-02 of Regulation S-X of the SEC.
"Material TNCL Subsidiary" means each direct or indirect
Subsidiary of TNCL that constitutes a "Significant Subsidiary" of TNCL within
the meaning of Rule 1-02 of Regulation S-X of the SEC.
"Merger Agreement" means that certain Agreement and Plan of
Merger, dated as of the date hereof, among Fox Kids, Fox Kids Merger
Corporation and IFE, as the same may be amended, supplemented or otherwise
modified; provided, however, that if the Merger Agreement is terminated and the
Purchaser or any of its Affiliates subsequently enters into, prior to the end
of the Consideration Adjustment Period, another merger agreement, binding share
agreement, asset purchase agreement or other agreement with IFE that requires
the approval of shareholders of IFE in order to consummate the transactions
contemplated thereby, then the term "Merger Agreement" shall be deemed to
refer to such agreement, as the same may be amended, supplemented or otherwise
modified.
"NPAL" means News Publishing Australia Limited, a Delaware
corporation.
"NPAL Certificate of Amendment" means the Certificate of
Amendment to the Certificate of Incorporation of NPAL that creates the NPAL
Preferred Stock, in the form of Exhibit E hereto.
"NPAL Financial Statements" means the unaudited consolidated
balance sheets of NPAL as of June 30, 1996 and December 31, 1996, and the
related unaudited operating statement and profit and loss for the six-month
period ended December 31, 1996 and the one-year period ended June 30, 1996
(without footnotes).
"NPAL Preferred Stock" means the Preferred Stock, par value
$.001 per share, of NPAL.
"Outside Date" means July 30, 1997; provided, however, that if
a request for additional information is made of Fox Kids (or any of its
Affiliates) in connection with the filings to be made under the H-S-R Act
contemplated by Section 6.5(a) hereof, then "Outside Date" shall mean the
earlier of (i) November 30, 1997 and (ii) the later of (x) July 30, 1997 and
(y) the second business day after receipt by Fox Kids (or the Affiliate of Fox
Kids that makes the filings) of clearance or authorization to effect the
transactions referred to in the first sentence of Section 6.5(a).
"Person" means any individual, corporation, general or limited
partnership, limited liability company, trust, joint venture, association or
unincorporated entity of any kind.
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"Restriction" means, when used with respect to any specified
security, any shareholders or other trust agreement, option, warrant, escrow,
proxy, buy-sell agreement, power of attorney or other contract, agreement or
arrangement which (i) grants to any Person the right to purchase or otherwise
acquire, or obligates any Person to sell or otherwise dispose of, such
specified security or any interest therein, or (ii) restricts the transfer of,
or the exercise of any rights or the enjoyment of any benefits arising by
reason of, the ownership of such specified security.
"Robertsons Class A Purchase Agreement" means that certain
Stock Purchase Agreement, dated as of the date hereof, by and among Fox Kids,
M.G. "▇▇▇" ▇▇▇▇▇▇▇▇▇, the ▇▇▇▇▇▇▇▇▇ Charitable Remainder Unitrust, the ▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇▇ Irrevocable Trust, the ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Irrevocable Trust,
the ▇▇▇ ▇. ▇▇▇▇▇▇▇ Irrevocable Trust, ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
(individually and as custodian to and for each of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇), the ▇▇▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Children's Trust and the ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇ Charitable Trust.
"SEC" means the United States Securities and Exchange
Commission.
"Subsidiary" of a specified Person means (i) any corporation
of which equity securities possessing a majority of the ordinary voting power
in electing the board of directors are, at the time as of which such
determination is being made, owned or controlled by such specified Person
either directly or indirectly through or in combination with one or more
Subsidiaries of such specified Person, or (ii) any Person (other than a
corporation) in which such specified Person either directly or indirectly
through or in combination with one or more Subsidiaries, at the time as of
which such determination is being made, (x) is a general partner or (y) owns or
controls more than a 50% ownership interest and has the right to elect a
majority of the members of the governing authority of such Specified Person.
"Substitute Security" has the meaning set forth in Section
6.3(a).
"TCI" means Tele-Communications, Inc., a Delaware corporation.
"TNCL" means The News Corporation Limited, a corporation
organized and existing under the laws of South Australia, Australia.
2. The Contribution.
2.1 The Contribution. (a) At the Closing, and subject to
the terms and conditions hereinafter set forth, LIFE shall contribute the IFE
Securities to Fox Kids in exchange for shares of Fox Kids Preferred Stock (or,
if applicable, the Substitute Security) with an aggregate initial liquidation
preference (the "Initial Liquidation Preference") equal to the greater
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of (i) $345 million or (ii) the sum of (x) $6.33 million plus (y) the amount
determined by multiplying (x) the Highest Per Share Amount paid during the
period commencing on January 1, 1997 and ending at the time of the Closing by
(y) the Fully Diluted Share Number (the "Consideration"). The Consideration
shall be adjusted in accordance with the provisions of subsection (b) below.
It is the intention of the parties that the Consideration equal the amount
(rounded to the nearest thousand to avoid the issuance of fractional shares)
derived by multiplying the Highest Per Share Amount (which as of the date of
this Agreement is understood by Liberty and LIFE to be $35) by the Fully
Diluted Share Number, and then adding thereto $6.33 million, which represents
(A) $3.5 million of interest income forfeited by LIFE as a result of its
contribution of the IFE Notes to Fox Kids as provided herein and (B) $2.83
million to partially compensate Liberty and LIFE for the fact that the
Exchange Right constitutes "boot" for Federal income taxes purposes.
(b) If (i) during the Consideration Adjustment Period a
Highest Per Share Amount is paid (a "Post-Closing Highest Per Share Amount")
which is greater than the Highest Per Share Amount paid prior to or at the time
of the Closing, and (ii) the Initial Liquidation Preference would have been
higher had such Post-Closing Highest Per Share Amount been paid immediately
prior to the Closing, then LIFE (or its nominee) shall receive, within 5
business days of such Post-Closing Highest Per Share Amount having been paid,
additional shares of Fox Kids Preferred Stock (rounded up to the nearest whole
number) with an aggregate initial liquidation preference equal to the
difference between (x) the aggregate Initial Liquidation Preference that the
Fox Kids Preferred Stock would have had if the Post- Closing Highest Per Share
Amount had been paid immediately prior to the Closing and (y) the aggregate
Initial Liquidation Preference of the Fox Kids Preferred Stock received by
LIFE (or its nominee) at the Closing. This Section 2.1(b) shall apply with
respect to each Post-Closing Highest Per Share Amount paid subsequent to the
time of the Closing; provided, however, that if any adjustment is made pursuant
to this Section 2.1(b), then any subsequent calculation pursuant to this
subsection (b) due to a higher Post-Closing Highest Per Share Amount being paid
shall be based on the aggregate Initial Liquidation Preference of all shares of
Fox Kids Preferred Stock received by LIFE (or its nominee) under this Section
2.1 and the aggregate Initial Liquidation Preference for the Fox Kids Preferred
Stock that LIFE would have received had such higher Post-Closing Highest Per
Share Amount been paid immediately prior to the Closing.
2.2 Exchange of Stock Certificates. At the Closing, Fox
Kids shall deliver, or cause to be delivered, to LIFE, against delivery to Fox
Kids of the IFE Notes and the certificate or certificates evidencing the IFE
Stock (together with duly executed stock powers in blank and with all requisite
stock and bond transfer tax stamps duly affixed thereto), a certificate,
registered in the name of LIFE or its nominee, representing the shares of Fox
Kids Preferred Stock to which LIFE is entitled pursuant to Section 2.1 hereof.
2.3 Filing of Charter Amendments. The Fox Kids Preferred
Stock delivered to LIFE or its nominee at the Closing shall have the
preferences and relative participating, optional and other special rights,
qualifications, limitations and restrictions set forth in the form
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of Certificate of Designations attached hereto as Exhibit F (the "Fox Kids
Certificate of Designations"). Fox Kids shall cause the Fox Kids Certificate of
Designations and the NPAL Certificate of Amendment to be filed with the
Delaware Secretary of State prior to or at the time of the Closing.
3. Closing Date. The closing of the Contribution (the "Closing")
shall (unless the parties hereto agree otherwise) take place at the offices of
▇▇▇▇▇ & ▇▇▇▇▇, L.L.P., ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, at 11:00 a.m.,
local time, on the day on which the last of the conditions set forth in
Sections 7, 8 and 9 hereof is fulfilled or waived (subject to applicable law)
(the "Closing Date"). The parties covenant and agree, subject to Section
6.3(b), that they will in any event effect the Closing on the second business
day after the satisfaction of the condition set forth in Section 7.3 hereof, if
the other conditions to the obligations of the parties under Sections 7, 8 and
9 hereof are capable of being satisfied at that time.
4. Representations and Warranties of Liberty and LIFE. Liberty
and LIFE, jointly and severally, represent and warrant to Fox Kids as follows:
4.1 Organization and Standing; Articles and By-Laws.
Each of Liberty and LIFE is a corporation duly organized, validly existing and
in good standing under the laws of the state of its incorporation. LIFE has
all requisite power and authority and all necessary governmental approvals,
permits and other authorizations necessary to own the IFE Securities (which
constitute its only assets, other than cash paid from time to time on the IFE
Securities) and to carry on its business in the manner and in the locations it
is now being conducted.
4.2 Authorization. Each of Liberty and LIFE has the
requisite corporate power and authority to enter into and carry out the terms
and conditions of this Agreement. The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby have been duly
authorized by the Board of Directors of Liberty and LIFE. Liberty, in its
capacity as the sole stockholder of LIFE, has approved this Agreement, and no
other corporate action on the part of Liberty or LIFE is necessary to authorize
the execution, delivery or performance by either Liberty or LIFE of this
Agreement. This Agreement has been duly executed and delivered by Liberty and
LIFE and constitutes the valid and binding obligation of each of Liberty and
LIFE, enforceable against Liberty and LIFE in accordance with its terms.
4.3 No Conflicts; Required Filings and Consents. The
execution and delivery of this Agreement by each of Liberty and LIFE do not,
and the performance of this Agreement by each of Liberty and LIFE will not, (i)
conflict with or violate the certificate or articles of incorporation or bylaws
of Liberty or LIFE, (ii) conflict with or violate any law, rule, regulation,
order, judgment or decree applicable to either Liberty or LIFE or by which any
property or asset of either is bound or affected, or (iii) result in any breach
of or constitute a default (or an event which with notice or lapse of time or
both would become a default) under, result in the loss of a material benefit
under, or give to others any right of termination, amendment, acceleration,
increased payments or cancellation of, or result in the creation of a lien
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or other encumbrance on the IFE Securities pursuant to, any note, bond,
mortgage, indenture, contract, agreement, lease, license, permit, franchise or
other instrument to which Liberty, LIFE or any other Subsidiary of Liberty is a
party. The execution and delivery of this Agreement by each of Liberty and
LIFE do not, and the performance of this Agreement by each of Liberty and LIFE
will not, require any consent, approval, authorization or permit of, or filing
with or notification to, any governmental or regulatory authority, domestic or
foreign (each, a "Governmental Authority"), except for such filings as may be
required under Section 13(d) of the Exchange Act.
4.4 Litigation; Compliance with Laws. There are no
actions, suits or proceedings of any nature pending, or, to the knowledge of
Liberty or LIFE, threatened, against Liberty or LIFE arising out of (i) LIFE's
ownership of the IFE Securities or (ii), as of the date hereof, this Agreement,
or any action taken or to be taken by Liberty or LIFE in connection with this
Agreement. Neither Liberty nor LIFE is subject to any order, judgment, ruling,
or decree of any competent authority relating to Liberty or LIFE's ownership of
the IFE Securities. Neither Liberty nor LIFE has received notice of any
violation of any applicable statute, regulation, code, ordinance, rule, order,
judgment, decree or requirement relating to LIFE's ownership of the IFE
Securities and, to Liberty's and LIFE's knowledge, no such violation exists.
Each of Liberty and LIFE is in compliance with all applicable laws, rules and
regulations relating to LIFE's ownership of the IFE Securities.
4.5 Title to the IFE Notes. LIFE owns good and valid
title to the IFE Notes, free and clear of any Lien or Restriction. At the
Closing, subject to the terms and conditions of this Agreement, Fox Kids will
acquire good and valid title to the IFE Notes, free and clear of any Liens or
Restrictions other than those (i) arising under the Securities Act of 1933, as
amended (the "Securities Act") and "blue sky" laws of applicable jurisdictions
or (ii) created by or with the consent of Fox Kids or any of its Affiliates. As
of the date hereof, the IFE Notes are convertible into an aggregate of
2,587,500 shares of IFE Stock which, if issued on the date hereof upon
conversion of the IFE Notes, would be convertible into shares of IFE Class B
Stock on a one-for-one basis. Neither Liberty nor LIFE has entered into any
agreements, understandings or undertakings (other than this Agreement) with
respect to the IFE Notes under which Liberty or LIFE is or may become
obligated, directly or indirectly, to transfer, dispose of, convert or assign
the IFE Notes, or which would result in a Lien or Restriction upon the IFE
Notes. The IFE Notes are the only debt securities of IFE legally or
beneficially owned by Liberty.
4.6 Title to the IFE Stock. LIFE has good and valid
title to the 7,088,732 shares of IFE Stock owned by it on the date hereof, free
and clear of any Lien or Restriction. At the Closing, subject to the terms and
conditions of this Agreement, Fox Kids will acquire good and valid title to the
shares of IFE Stock owned by LIFE, free and clear of all Liens or Restrictions
other than those (i) arising under the Securities Act and "blue sky" laws of
applicable jurisdictions or (ii) created by or with the consent of Fox Kids or
any of its Affiliates. As of the date hereof, the shares of IFE Stock owned by
LIFE are convertible into shares of IFE Class B Stock on a one-for-one basis.
Neither Liberty nor LIFE has entered into any agreements,
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understandings or undertakings (other than this Agreement) with respect to the
IFE Stock owned by LIFE under which Liberty or LIFE is or may become obligated,
directly or indirectly, to transfer, dispose of, convert or assign such IFE
Stock, or which would result in a Lien or Restriction upon such IFE Stock. The
IFE Stock owned of record by LIFE are the only equity securities of IFE legally
or beneficially owned by Liberty.
4.7 No Other Agreements Relating to IFE Securities.
There are (i) no options, warrants, calls, subscriptions, convertible
securities or other rights (including preemptive rights), agreements or
commitments of any character (other than this Agreement) obligating Liberty or
LIFE now or at any time in the future to sell, transfer or otherwise dispose of
any of the IFE Securities and (ii) there are no voting trusts, proxies or other
agreements to which Liberty or LIFE is a party with respect to the IFE
Securities other than this Agreement, the IFE Shareholders Agreement and the
purchase agreements pursuant to which LIFE acquired the IFE Stock and the IFE
Notes from IFE.
4.8 Investment Intent. The shares of Fox Kids
Preferred Stock to be acquired by LIFE pursuant to this Agreement are being
acquired by LIFE for its own account for investment and with no present
intention of distributing or reselling such shares or any part thereof in any
transaction which would constitute a "distribution" within the meaning of the
Securities Act. Liberty and LIFE understand and acknowledge that the offer and
sale of the Fox Kids Preferred Stock have not been, and as of the Closing will
not have been, registered under the Securities Act or any state securities
laws.
4.9 No Brokers. No broker or finder is entitled to any
brokerage, finder's or other fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of Liberty or LIFE.
4.10 Full Disclosure. No statement herein or in the
Exchange Agreement or in any certificate delivered pursuant to the requirements
of this Agreement by or on behalf of Liberty or LIFE contains or will contain
any untrue statement of a material fact concerning Liberty or LIFE or omits or
will omit to state a material fact concerning Liberty or LIFE necessary in
order to make the statements made herein or therein, in light of the
circumstances under which they were made, not misleading.
5. Representations and Warranties of Fox Kids. Except as set
forth in the disclosure letter delivered at or prior to the execution of this
Agreement by Fox Kids, which refers to the relevant Sections of this Agreement
(the "Fox Kids Disclosure Letter"), Fox Kids represents and warrants to Liberty
and LIFE as follows:
5.1 Organization and Standing; Articles and By-Laws.
Each of Fox Kids, NPAL, each Material NPAL Subsidiary, TNCL and each Material
TNCL Subsidiary is a corporation, partnership or other legal entity duly
organized, validly existing and, if applicable, in good standing under the laws
of the jurisdiction of its incorporation or organization. Fox Kids,
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NPAL and each Material NPAL Subsidiary is qualified, licensed or domesticated
as a foreign corporation, partnership or other legal entity and is in good
standing in all jurisdictions where the character of its properties owned or
held under lease or the nature of its activities make such qualification
necessary, except where the failure to be so qualified, licensed or
domesticated would not have a material adverse effect on the business, assets,
results of operations or financial position of (i), in the case of Fox Kids, of
Fox Kids, and (ii) in the case of NPAL, NPAL and its Subsidiaries taken as a
whole. Each of Fox Kids, NPAL, each Material NPAL Subsidiary, TNCL and each
Material TNCL Subsidiary has all requisite power and authority and all
necessary governmental approvals, permits and other authorizations necessary to
own, lease and operate its properties and assets and to carry on its business
in the manner and in the locations it is now being conducted, except where the
failure to have such power, authority and governmental approvals, permits and
authorizations would not have a material adverse effect on the business,
assets, results of operations or financial position (x), in the case of Fox
Kids, of Fox Kids, (y), in the case of NPAL and any Material NPAL Subsidiary,
of NPAL and its Subsidiaries taken as a whole, and (z), in the case of TNCL and
any Material TNCL Subsidiary, of TNCL and its Subsidiaries taken as a whole.
True and correct copies of the Certificate of Incorporation and Bylaws of each
of Fox Kids and NPAL, as amended to the date hereof, have been delivered to
Liberty.
5.2 Authorization. Fox Kids has the requisite corporate
power and authority to enter into and carry out the terms and conditions of
this Agreement. Each of Fox Kids, NPAL and TNCL has the requisite corporate
power and authority to enter into and carry out the terms and conditions of the
Funding Agreement. NPAL has the requisite corporate power and authority to
enter into and carry out the terms of the Exchange Agreement. The execution and
delivery of this Agreement and the Funding Agreement and the consummation of
the transactions contemplated hereby and thereby have been duly authorized by
the Board of Directors of Fox Kids and by any required shareholder or other
action required under the charter documents of, or any shareholder agreement
relating to, Fox Kids. All necessary corporate action on the part of each of
NPAL and TNCL to authorize and approve the due execution, delivery and
performance of the Funding Agreement by NPAL and TNCL, respectively, has been
taken. All necessary corporate action on the part of NPAL to authorize and
approve the due execution, delivery and performance of the Exchange Agreement
by NPAL has been taken. This Agreement has been duly executed and delivered by
Fox Kids and constitutes its valid and binding obligation, enforceable against
it in accordance with its terms. Upon the execution and delivery of the
Funding Agreement by Fox Kids, NPAL and TNCL at the Closing, the Funding
Agreement will constitute the legal, valid and binding obligation of each of
Fox Kids, NPAL and TNCL, enforceable against each in accordance with its terms,
and will not be void or voidable by TNCL under Australian law. Upon the
execution and delivery of the Exchange Agreement by NPAL at the Closing, the
Exchange Agreement will constitute the legal, valid and binding obligation of
NPAL, enforceable against NPAL in accordance with its terms.
5.3 No Conflicts; Required Filings and Consents. The
execution and delivery of this Agreement by Fox Kids does not, and the
performance of this Agreement by Fox
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Kids, the execution, delivery and performance of the Funding Agreement by each
of Fox Kids, NPAL and TNCL, and the execution, delivery and performance of the
Exchange Agreement by NPAL will not, (i) conflict with or violate the
certificate of incorporation, by-laws or other organizational documents of, or,
to the knowledge of Fox Kids, any shareholder agreement relating to, Fox Kids,
NPAL or TNCL, (ii) conflict with or violate any law, rule, regulation, order,
judgment or decree applicable to any of Fox Kids, NPAL, any Material NPAL
Subsidiary, TNCL or any Material TNCL Subsidiary or by which any property or
asset of any thereof is bound or affected, or (iii) result in any breach of or
constitute a default (or an event which with notice or lapse of time or both
would become a default) under, result in the loss of a material benefit under,
or give to others any right of termination, amendment, acceleration, increased
payments or cancellation of, or result in the creation of a lien or other
encumbrance on any material property or asset of Fox Kids, NPAL, any Material
NPAL Subsidiary, TNCL or any Material TNCL Subsidiary pursuant to, any note,
bond, mortgage, indenture, contract, agreement, lease, license, permit,
franchise or other instrument to which Fox Kids, NPAL, any Material NPAL
Subsidiary, TNCL or any Material TNCL Subsidiary is a party, except, in the
cases of clauses (ii) and (iii), for any such conflicts, violations, breaches,
defaults or other occurrences which would not prevent or delay the consummation
of the transactions contemplated by this Agreement or otherwise prevent (x) Fox
Kids from timely performing its obligations under this Agreement or, following
the Closing, exercising its rights, or timely performing its obligations, under
the terms of the Fox Kids Preferred Stock, (y), following the Closing, any of
Fox Kids, NPAL or TNCL from exercising its rights, or timely performing its
respective obligations, under the terms of the Funding Agreement or (z),
following the Closing, NPAL from timely performing its obligations under the
terms of the Exchange Agreement. The execution and delivery of this Agreement
by Fox Kids does not, and the performance of this Agreement by Fox Kids, the
execution, delivery and performance of the Funding Agreement by each of Fox
Kids, NPAL and TNCL, and the execution, delivery and performance of the
Exchange Agreement by NPAL will not, require any consent, approval,
authorization or permit of, or filing with or notification to, any Governmental
Authority, except for (i) the filing of the Fox Kids Certificate of
Designations and the NPAL Certificate of Amendment with the Delaware Secretary
of State prior to or at the time of the Closing and (ii) such filings as may be
required under Section 13(d) of the Exchange Act. All required filings under
the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as amended (the
"H-S-R Act") have been made, and the waiting period thereunder has expired or
terminated, with respect to the transactions contemplated by the Share Exchange
Agreement.
5.4 Capital Stock. As of the date hereof, the
authorized capital stock of Fox Kids consists of 10,000,000 shares of Class A
Common Stock, par value $.001 per share, 10,000,000 shares of Class B Common
Stock, par value $.001 per share, and 20,000,000 shares of "blank check"
preferred stock, par value $.001 per share. Immediately prior to the Closing,
there will be a number of shares of Fox Kids Preferred Stock duly authorized as
shall be sufficient for Fox Kids to deliver to LIFE (or its nominee) at the
Closing the number of validly issued, fully paid and nonassessable shares of
Fox Kids Preferred Stock to which LIFE is entitled pursuant to Section 2.1
hereof. As of the Closing Date, no shares of capital stock of Fox Kids
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will rank senior to the Fox Kids Preferred Stock as to dividend rights, rights
of redemption, or rights on any liquidation, dissolution or winding up of Fox
Kids. All of the shares of capital stock of Fox Kids to be issued pursuant to
the terms of the Share Exchange Agreement will be, upon such issuance in
accordance with the terms of the Share Exchange Agreement, duly authorized,
validly issued, fully paid and nonassessable.
5.5 The Fox Kids and NPAL Preferred Stocks. The
resolution set forth in the Fox Kids Certificate of Designations has been
approved by the Board of Directors of Fox Kids and, upon the filing of the Fox
Kids Certificate of Designations with the Delaware Secretary of State, the Fox
Kids Preferred Stock will have all of the preferences and relative
participating, optional and other special rights, qualifications, limitations
and restrictions set forth in the Fox Kids Certificate of Designations. The
shares of Fox Kids Preferred Stock to be received by LIFE or its nominee at the
Closing will be, upon such receipt at the Closing in accordance with the terms
and conditions of this Agreement, duly authorized, validly issued, fully paid
and non-assessable and LIFE or such nominee will have all of the rights of a
registered holder thereof under Delaware law. LIFE or such nominee will
receive good and valid title to the Fox Kids Preferred Stock at the Closing,
free and clear of all Liens and Restrictions other than those (i) arising under
the Securities Act and "blue sky" laws of applicable jurisdictions or (ii)
created by or with the consent of LIFE, Liberty or any of their respective
Affiliates. Liberty will not be liable for any stamp duty or other issuance or
transfer taxes or duties in connection with the issuance and delivery of the
Fox Kids Preferred Stock at the Closing. The NPAL Certificate of Amendment has
been approved by the Board of Directors and the stockholders of NPAL and, upon
the filing of the NPAL Certificate of Amendment with the Delaware Secretary of
State, the NPAL Preferred Stock will have all of the preferences and relative
participating, optional and other special rights, qualifications, limitations
and restrictions set forth in the NPAL Certificate of Amendment. The shares of
NPAL Preferred Stock that may be received by a holder of shares of Fox Kids
Preferred Stock upon the valid exercise of the Exchange Right included in the
Exchange Agreement will be, upon surrender of the certificates representing
such shares of Fox Kids Preferred Stock to NPAL or its agent, duly authorized,
validly issued, fully paid and non-assessable. No authorization, approval or
consent of any Australian Governmental Authority is currently required in order
for (i) Fox Kids to declare or pay dividends on or to redeem the Fox Kids
Preferred Stock, (ii) NPAL to perform its obligations under the Exchange
Agreement, (iii) NPAL to declare or pay dividends on or to redeem the shares of
NPAL Preferred Stock exchanged for shares of Fox Kids Preferred Stock, or (iv)
Fox Kids, NPAL or TNCL to exercise or perform their respective rights or
obligations under the Funding Agreement.
5.6 Compliance with Applicable Laws. Each of Fox Kids,
NPAL, each Material NPAL Subsidiary, TNCL and each Material TNCL Subsidiary is
in compliance with all applicable laws, ordinances, regulations, decrees and
orders of any Governmental Authority, the breach or violation of which,
individually or in the aggregate, could reasonably be expected to have a
material adverse effect on the business, assets, results of operations or
financial condition (i), in the case of Fox Kids, of Fox Kids and its
Subsidiaries taken as a whole, (ii), in the case of NPAL and any Material NPAL
Subsidiary, of NPAL and its Subsidiaries taken as a whole, and
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(iii), in the case of TNCL and any Material TNCL Subsidiary, of TNCL and its
Subsidiaries taken as a whole.
5.7 Newly Formed Corporation. Fox Kids is a recently
organized corporation and, as of the date hereof, has engaged in no operating
activities. As of the date hereof, Fox Kids has no material assets or
liabilities (other than agreements relating to its acquisition of securities of
IFE).
5.8 NPAL Financial Statements; Primary US Holding
Company. (a) The NPAL Financial Statements delivered to Liberty prior to the
date hereof were prepared in accordance with Australian generally accepted
accounting principles (except that there are no footnotes) applied on a
consistent basis throughout the periods indicated and fairly present the
consolidated financial position and results of operations of NPAL and its
consolidated subsidiaries as at the respective dates thereof and for the
respective periods indicated therein. Since December 31, 1996, there has been
no change in any of the significant accounting (including tax accounting)
policies, practices or procedures of NPAL. Since December 31, 1996, there has
not been any material adverse change in the financial condition, results of
operations or businesses of NPAL and its Subsidiaries taken as a whole.
(b) NPAL is the primary United States holding company for
TNCL and owns not less than 75 % (in value) of the total assets of TNCL and its
Subsidiaries located in the United States. NPAL owns, directly or indirectly,
not less than 75% (in value and voting power) of the equity securities of the
Subsidiaries listed on Schedule 5.8 hereto, except to the extent otherwise
specified in such schedule.
5.9 TNCL SEC Filings; TNCL Financial Statements. (a) TNCL
has filed all forms, reports and documents required to be filed by it with the
SEC since December 31, 1995, and has heretofore made available to Liberty, in
the form filed with the SEC (excluding any exhibits thereto), its Annual Report
on Form 20-F for the fiscal year ended December 31, 1996 (the "TNCL Annual
Report"). The TNCL Annual Report, and any other forms, reports and other
documents filed by TNCL with the SEC since December 31, 1995, (x) were or will
be prepared in accordance with the requirements of the Securities Act, and the
Exchange Act, and the rules and regulations thereunder and (y) did not at the
time they were filed, or will not at the time they are filed, contain any
untrue statements of a material fact or omit to state a material fact required
to be stated therein or necessary in order to make the statements made therein,
in the light of the circumstances under which they were made, not misleading.
(b) The consolidated financial statements (including the
notes thereto) contained in the TNCL Annual Report were prepared in accordance
with Australian generally accepted accounting principles applied on a
consistent basis throughout the periods indicated (except as may be indicated
in the notes thereto) and fairly present the consolidated financial position,
results of operations and cash flows of TNCL and its consolidated subsidiaries
as at the respective dates thereof and for the respective periods indicated
therein, and such financial
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statements and the reconciliations to U.S. generally accepted accounting
principles comply as to form in all material respects with applicable
accounting requirements and the rules and regulations of the SEC. Since
December 31, 1996, there has been no change in any of the significant
accounting (including tax accounting) policies, practices or procedures of
TNCL. Since December 31, 1996, there has not been any material adverse change
in the financial condition, results of operations or businesses of TNCL and its
Subsidiaries taken as a whole.
5.10 Investment Intent. The IFE Securities, and any
shares of IFE common stock acquired upon exercise of the conversion privileges
set forth in such securities, are and will be acquired by Fox Kids for its own
account for investment and with no present intention of distributing or
reselling such shares or any part thereof in any transaction which would
constitute a "distribution" within the meaning of the Securities Act. Fox Kids
understands and acknowledges that the offer and sale of the IFE Securities have
not been, and as of the Closing will not have been, registered under the
Securities Act or any state securities laws.
5.11 No Brokers. No broker or finder is entitled to any
brokerage, finder's or other fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of Fox Kids.
5.12 Full Disclosure. No statement herein or in the Fox
Kids Disclosure Letter, the Funding Agreement or the Exchange Agreement or in
any certificate delivered pursuant to the requirements of this Agreement by or
on behalf of Fox Kids, NPAL or TNCL contains or will contain any untrue
statement of a material fact concerning Fox Kids, NPAL or TNCL or omits or will
omit to state a material fact necessary in order to make the statements made
herein or therein concerning Fox Kids, NPAL or TNCL, in light of the
circumstances under which they were made, not misleading.
6. Pre-Closing Covenants of Fox Kids, LIFE and Liberty. During
the period commencing on the date hereof and ending at the time of the Closing:
6.1 Filings and other Actions. (a) Upon the terms and
subject to the conditions of this Agreement, each of the parties hereto agrees
to use its reasonable commercial efforts to take, or cause to be taken, all
appropriate action, and to do, or cause to be done, all things necessary,
proper or advisable under applicable laws and regulations or otherwise to
consummate and make effective the transactions contemplated by this Agreement.
(b) Each party shall use its commercially reasonable
efforts not to take any action, or enter into any transaction, which would
cause any of its representations or warranties contained in this Agreement to
be untrue or result in a breach of any covenant or agreement made by such party
in this Agreement.
6.2 Public Announcements. Liberty and Fox Kids shall
consult with each other before issuing any press release or otherwise making
any public statements with respect to
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this Agreement or any transaction contemplated hereby and shall not, and shall
not permit any Affiliate to, issue any such press release or make any such
public statement without the prior consent of the other party, which consent
shall not be unreasonably withheld; provided, however, that a party may,
without the prior consent of the other party, issue such press release or make
such public statement as may be required by law or any listing agreement or
arrangement to which TNCL or TCI is a party with a national securities exchange
or The Nasdaq Stock Market if it has used all reasonable efforts to consult
with the other party and to obtain such party's consent but has been unable to
obtain such consent in a timely manner. The parties hereto have agreed to the
issuance on the date hereof of the press release attached hereto as Exhibit G.
6.3 Substitution of Consideration in Certain
Circumstances. (a) If Liberty determines, on the advice of counsel, that the
condition to its obligation to consummate the transactions contemplated by this
Agreement set forth in Section 9.4(b) will not be satisfied, then the parties
shall negotiate in good faith the terms of a substitute security (the
"Substitute Security") for the Fox Kids Preferred Stock to be received by LIFE
pursuant to the Contribution. The Substitute Security shall (i) have terms that
are mutually acceptable to Fox Kids and Liberty, (ii) at the election of
Liberty, be exchangeable for a "mirror" security of NPAL or another Affiliate
of Fox Kids acceptable to Liberty, (iii) have an economic value to Liberty not
less, in any material respect, than, and an economic cost to Fox Kids (and, in
the case of an NPAL "mirror" security, an economic cost to NPAL) not greater,
in any material respect, than, the value and cost, respectively, of the Fox
Kids Preferred Stock (and the NPAL Preferred Stock), (iv) not, in the sole
judgment of Liberty based upon advice of counsel, upon receipt by Liberty
result in recognition by Liberty of taxable income or gain for United States or
Australian federal income tax purposes (except to the extent any exchange right
may constitute "boot"), and (v) not result in the recognition by Fox Kids or
NPAL, as the case may be, of taxable income or gain for United States or
Australian federal income tax purposes to a greater extent than that which
would be recognizable by Fox Kids or NPAL if the transactions contemplated by
this Agreement and the Exchange Agreement (including the issuance of the NPAL
Preferred Stock in exchange for shares of Fox Kids Preferred Stock) were
consummated on the date hereof. Any Substitute Security shall have voting
rights, or no voting rights, as may be determined by Fox Kids in its sole
discretion.
(b) If the terms of the Substitute Security require that
filings be made under the H-S-R Act, each of Fox Kids, Liberty and LIFE shall,
or shall cause its appropriate Affiliate(s) to, file an appropriate
notification and report form under the H-S-R Act within 5 business days of the
date the terms of the Substitute Security are determined. Each party shall
cause, or shall cause such appropriate Affiliate(s) to, supply promptly any
additional information and documentary material that may be requested pursuant
to the H-S-R Act. If filings are made under the H-S- R Act pursuant hereto,
then (i) the obligations of each of Liberty and LIFE, on the one hand, and Fox
Kids, on the other hand, to consummate the transactions contemplated by this
Agreement (in addition to the conditions set forth in Sections 7, 8 and 9
hereof) shall be subject to the expiration (or earlier termination) of the
waiting period under the H-S-R Act, and (ii) the Outside Date shall be
extended, if necessary, to the earlier of (x) the second business day after
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the expiration (or earlier termination) of such waiting period and (y)
November 30, 1997.
6.4 Notification of Certain Matters. Each of Liberty and
LIFE, on the one hand, and Fox Kids, on the other hand, shall give prompt
notice in writing to the other of: (i) any information that indicates that any
of its representations or warranties contained herein was not true and correct
as of the date hereof or will not be true and correct, in any material respect,
as of the Closing Date, (ii) the occurrence of any event which will result, or
has a reasonable prospect of resulting, in the failure to satisfy a condition
specified in Section 7, 8 or 9 hereof, or (iii) any notice of, or other
communication relating to, any claim, litigation, proceeding or investigation
that questions the validity or enforceability of this Agreement or any of the
transactions contemplated hereby.
6.5 H-S-R Filings; Best Efforts to Close. (a) As
promptly as practicable after the execution of this Agreement, but in any event
within 5 business days, Fox Kids shall, or shall cause its appropriate
Affiliate(s) to, file an appropriate notification and report form under the
H-S-R Act with respect to (i) the conversion of the IFE Stock and the IFE Notes
into voting securities of IFE, (ii) the acquisition of voting securities of IFE
under the Robertsons Class A Purchase Agreement and from The Christian
Broadcasting Network, Inc. and Regent University and (iii) the merger
contemplated by the Merger Agreement; provided, however, that such
five-business day period shall be extended to the extent necessary for Fox Kids
to obtain from IFE all information reasonably necessary to complete such
notification and report form that is not in the public domain or available from
IFE's periodic reports filed under the Exchange Act. Fox Kids shall, or shall
cause such Affiliate(s) to, request early termination of the waiting period
under the H-S-R Act. Fox Kids shall, or shall cause such Affiliate(s) to,
supply promptly any additional information and documentary material that may be
requested of it pursuant to the H-S-R Act and use, or cause such Affiliate(s)
to use, its commercially reasonable efforts to obtain clearance or
authorization under the H-S-R Act to consummate the transactions described in
the immediately preceding sentence as promptly as practicable. Fox Kids shall
not, and shall not permit any Affiliate to, take any action that will have the
effect of delaying, impairing or impeding the receipt of early termination or
such clearance or authorization under the H-S-R Act. Fox Kids shall use its
commercially reasonable efforts to cause IFE, as soon as reasonably
practicable, (i) to provide Fox Kids, or its appropriate Affiliate(s), with
such information as may be reasonably necessary for Fox Kids, or such
Affiliate(s), to complete and submit its notification and report form under the
H-S-R Act, (ii) to file its own (or its appropriate Affiliate(s) notification
and report form under the H-S-R Act in connection with the transactions
referred to in the first sentence of this Section 6.5(a) and (iii) to supply
promptly any additional information and documentary material that may be
requested of it (or such Affiliate) pursuant to the H-S-R Act.
(b) Fox Kids covenants and agrees with Liberty and LIFE to
use its best efforts to effect the Contribution prior to the consummation of
the merger contemplated by the Merger Agreement. Fox Kids acknowledges and
agrees that a failure to effect the Contribution prior to such merger would
result in Liberty and LIFE suffering significant damages, and agrees to
indemnify and hold harmless Liberty and LIFE from and against any and all
monetary damages
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suffered by either of them arising out of the failure of the Contribution to
be effected prior to such merger. Such monetary value shall be deemed to equal
the difference between the amount received by LIFE in the merger and the value
of the Consideration (assuming for this purpose no change in applicable tax
laws or regulations from those in effect on the date of this Agreement).
Notwithstanding the foregoing, Fox Kids shall not be liable to Liberty or LIFE
pursuant to this Section 6.5(b) if the failure of the Contribution to be
effected prior to such merger is due to a material breach by Liberty or LIFE of
any of its covenants, agreements, representations or warranties set forth in
this Agreement.
7. Conditions to Each Party's Obligation to Effect the
Contribution. The respective obligations of each party to effect the
Contribution and the other transactions contemplated by this Agreement shall be
subject to the fulfillment at or prior to the Closing of the following
conditions, any or all of which may be waived, in whole or in part, to the
extent permitted by applicable law:
7.1 No Stop Order. There shall be no effective
injunction, writ or preliminary restraining order or any order of any nature
issued by any court of competent jurisdiction or by any Governmental Authority
directing that the transactions provided for herein, or any of them, not be
consummated as herein provided; provided, however, that the parties shall use
their reasonable commercial efforts to prevent the entry of, or, if entered, to
cause to be vacated or lifted as promptly as practicable, any such injunction
or other order.
7.2 Consummation of Share Exchange. All of the conditions
precedent to the consummation of the transactions contemplated by the Share
Exchange Agreement shall have been satisfied or, to the extent permitted by
applicable law, waived by the parties thereto, and the Share Exchange shall be
consummated and become effective concurrently with the consummation and
effectiveness of the Contribution.
7.3 H-S-R Act. The waiting period applicable to the
filings made under the H-S-R Act pursuant to Section 6.5(a) hereof shall have
expired or been terminated.
7.4 No Adverse Enactments. There shall not have been any
statute, rule, regulation or order promulgated, enacted or issued or deemed
applicable to the Contribution by any Governmental Authority or court of
competent jurisdiction which would make the consummation of the Contribution
illegal.
8. Additional Conditions to Obligations of Fox Kids. The
obligation of Fox Kids to consummate the transactions contemplated by this
Agreement is also subject to the satisfaction, at or prior to the Closing Date,
of each of the following conditions, any or all of which may be waived by Fox
Kids, in whole or in part, to the extent permitted by applicable law:
8.1 Accuracy of Representations and Warranties. All
representations and warranties of Liberty and LIFE contained herein shall be
true and correct in all material respects
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on and as of the Closing Date, with the same force and effect as though made on
and as of the Closing Date, except for changes permitted or contemplated by
this Agreement.
8.2 Performance of Agreements. Each of Liberty and LIFE
shall have performed in all material respects all obligations and agreements,
and complied in all material respects with all covenants and conditions,
contained in this Agreement to be performed or complied with by it prior to or
at the Closing Date.
8.3 Officer's Certificates. Fox Kids shall have received
certificates of Liberty and LIFE, signed by officers of Liberty and LIFE,
respectively, evidencing compliance with the conditions set forth in Sections
8.1 and 8.2 above.
8.4 Opinion of Counsel for Liberty and LIFE. Fox Kids
shall have received from counsel to Liberty and LIFE an opinion, dated the
Closing Date, to the effect set forth on Exhibit H hereto. In rendering their
opinions such counsel may rely as to factual matters upon certificates or other
documents furnished by officers and directors of Liberty and LIFE and by
government officials, and upon such other documents and data as such counsel
deem appropriate as a basis for their opinions. Such counsel may specify the
jurisdiction or jurisdictions in which they are admitted to practice, that they
are not admitted to practice in any other jurisdiction or experts in the law of
any other jurisdiction and that, to the extent their opinions concern the laws
of any other jurisdiction or pertain to matters beyond the scope of such
counsel's engagement, such counsel may rely upon the opinion of counsel
admitted to practice in such other jurisdiction. Any opinion relied upon by
such counsel shall be delivered together with the opinion of such counsel,
which shall state that such counsel believes that their reliance thereon is
justified.
8.5 Amended Affiliation Agreement. The Amended
Affiliation Agreement, in the form of Exhibit B hereto, shall have been duly
executed and delivered.
8.6 IFE Shareholders Agreement. The IFE Shareholders
Agreement shall have been terminated or LIFE shall have irrevocably waived all
of its rights and obligations thereunder such that LIFE has no further rights
or obligations under the IFE Shareholders Agreement.
9. Additional Conditions to the Obligations of Liberty and LIFE.
The obligation of each of Liberty and LIFE to consummate the transactions
contemplated by this Agreement is also subject to the satisfaction, at or prior
to the Closing Date, of each of the following conditions, any or all of which
may be waived by Liberty and LIFE, in whole or in part, to the extent permitted
by applicable law:
9.1 Accuracy of Representations and Warranties. All
representations and warranties of Fox Kids contained herein shall be true and
correct in all material respects on and as of the Closing Date, with the same
force and effect as though made on and as of the Closing Date, except for
changes permitted or contemplated by this Agreement.
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9.2 Performance of Agreements. Fox Kids shall have
performed in all material respects all obligations and agreements, and complied
in all material respects with all covenants and conditions, contained in this
Agreement to be performed or complied with by it prior to or at the Closing
Date.
9.3 Officer's Certificate. Liberty and LIFE shall have
received a certificate of Fox Kids, signed by officers of Fox Kids, evidencing
compliance with the conditions set forth in Sections 9.1 and 9.2 above.
9.4 Tax Matters. (a) Liberty and LIFE shall have received
duly executed copies of the certificates attached hereto as Exhibit J.
(b) Liberty shall have received from ▇▇▇▇▇ & ▇▇▇▇▇,
L.L.P. an opinion of counsel to the effect that since June 11, 1997, there has
been no amendment to, change (including any announced prospective change) in,
or effective date set for any proposed amendment or change in, the laws (or any
regulations thereunder) of the United States or Australia or any political
subdivision or taxing authority of either thereof or therein, or any amendment
to, change in, or effective date set for any proposed amendment or change in,
an interpretation or application of such laws or regulations by any legislative
body, court, governmental agency or regulatory authority, which would result in
Liberty recognizing taxable income or gain for United States or Australian
federal income tax purposes by virtue of the Contribution or the consummation
of any of the transactions contemplated by this Agreement (except to the extent
the Exchange Right constitutes "boot" for federal income tax purposes).
9.5 Funding Agreement and Exchange Agreement. The
Funding Agreement, in the form attached hereto as Exhibit D, shall have been
duly executed and delivered by Fox Kids, NPAL and TNCL and the Exchange
Agreement, in the form attached hereto as Exhibit C, shall have been duly
executed and delivered by NPAL.
9.6 Assets of NPAL. Liberty shall have received evidence
reasonably satisfactory to it that NPAL owns, as of the Closing Date, directly
or indirectly through one or more Subsidiaries of NPAL, not less than 75% (in
value) of the assets of TNCL and its Subsidiaries located in the United States.
9.7 Opinion of Counsel for Fox Kids. Liberty and LIFE
shall have received an opinion of counsel to Fox Kids, dated the Closing Date,
substantially to the effect set forth on Exhibit I. In rendering their opinions
such counsel may rely as to factual matters upon certificates or other
documents furnished by officers and directors of Fox Kids and by government
officials, and upon such other documents and data as such counsel deem
appropriate as a basis for their opinions. Such counsel may specify the
jurisdiction or jurisdictions in which they are admitted to practice, that they
are not admitted to practice in any other jurisdiction or experts in the law of
any other jurisdiction and that, to the extent their opinions concern the laws
of any other
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jurisdiction or pertain to matters beyond the scope of such counsel's
engagement, such counsel may rely upon the opinion of counsel admitted to
practice in such other jurisdiction. Any opinion relied upon by such counsel
shall be delivered together with the opinion of such counsel, which shall state
that such counsel believes that their reliance thereon is justified.
9.8 Registration Rights Agreement. Liberty and LIFE
shall have entered into a registration rights agreement with Fox Kids having
the terms set forth on Schedule 9.8 hereto.
10. Termination.
10.1 Termination. This Agreement may be terminated and the
transactions contemplated hereby may be abandoned at any time:
10.1.1 by the mutual written consent of Liberty and
Fox Kids;
10.1.2 by Fox Kids if there has been a breach of any
covenant or agreement on the part of Liberty or LIFE set forth in this
Agreement, or if any representation or warranty of Liberty or LIFE shall have
become untrue in any material respect, in either case such that such breach or
untruth is incapable of being cured by the Outside Date; provided, however,
that Fox Kids shall not have the right to terminate this Agreement pursuant to
this Section 10.1.2 if Fox Kids, at such time, is in material breach of any of
its covenants, agreements, representations or warranties set forth in this
Agreement;
10.1.3 by Liberty if there has been a breach of any
covenant or agreement on the part of Fox Kids set forth in this Agreement, or
if any representation or warranty of Fox Kids shall have become untrue in any
material respect, in either case such that such breach or untruth is incapable
of being cured by the Outside Date; provided, however, that Liberty shall not
have the right to terminate this Agreement pursuant to this Section 10.1.3 if
Liberty or LIFE, at such time, is in material breach of any of its covenants,
agreements, representations or warranties set forth in this Agreement;
10.1.4 by either Fox Kids or Liberty if the
Contribution shall not have been consummated on or before the Outside Date,
unless the absence of such consummation shall be due to the failure of the
party seeking termination to perform each of its obligations under this
Agreement required to be performed by it at or prior to the Closing Date; or
10.1.5 by either Fox Kids or Liberty if a court of
competent jurisdiction or a Governmental Authority shall have issued a
non-appealable final order, decree or ruling or taken any other action, in each
case having the effect of permanently restraining, enjoining or otherwise
prohibiting the Contribution or any of the other transactions contemplated
hereby.
10.2 Effect of Termination. If this Agreement is
terminated pursuant to
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Section 10.1, this Agreement shall become void and of no effect with no
liability on the part of any party hereto, or any of their respective officers
or directors, to the others and all rights and obligations of each party hereby
shall cease, except that (a) the agreements contained in Section 6.5(b), this
Section 10.2 and in Sections 11.2 and 12.6 shall survive the termination hereof
and (b) nothing herein shall relieve any party from liability for the willful
breach of any of its representations, warranties, covenants or agreements set
forth in this Agreement. If this Agreement is terminated, Fox Kids covenants
and agrees to cause the Robertsons Class A Purchase Agreement to be terminated,
unless (i) such termination is the result of a court of competent jurisdiction
or a Governmental Authority having issued a non-appealable final order, decree
or ruling or taken any other action, in each case having the effect of
permanently restraining, enjoining or otherwise prohibiting the Contribution or
(ii) such termination was due to a material breach by Liberty or LIFE of any
of its covenants, agreements, representations or warranties set forth in this
Agreement.
11. Indemnification.
11.1 Survival. All representations and warranties and
covenants and agreements contained herein shall survive until the first
anniversary of the date of this Agreement; provided, however, that such
limitation shall not apply to (i) the representations set forth in Sections
4.5, 4.6 and 5.5 and (ii) the covenants and agreements set forth in Section
2.1, in this Section 11 and in Sections 12.2, 12.6 and 12.7, each of which
shall survive without limitation.
11.2 Certain Actions. Fox Kids agrees to indemnify and
hold harmless each Liberty Party (as defined below) from and against any and
all losses, claims, damages, liabilities, judgments, costs, disbursements and
expenses of any kind or nature (including reasonable fees and disbursements of
counsel) arising out of any suit, action or proceeding instituted by any Person
not a party to this Agreement that in any manner results from, arises out of,
is based upon or is related or attributable to any action taken by TNCL, NPAL,
Fox Kids or any of their respective Affiliates (each, a "News Corp Party") with
respect to any transaction or proposed transaction involving any News Corp
Party, on the one hand, and any of M.G. "▇▇▇" ▇▇▇▇▇▇▇▇▇, the ▇▇▇▇▇▇▇▇▇
Charitable Remainder Unitrust, the ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ Irrevocable Trust, the
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ Irrevocable Trust, the ▇▇▇ ▇. ▇▇▇▇▇▇▇ Irrevocable Trust,
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ (individually and as custodian to and
for each of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇), the ▇▇▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Children's Trust, the ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ Charitable Trust, any other
charitable, revocable or irrevocable trust created by or for the benefit of the
Robertsons, their children or their respective heirs, The Christian
Broadcasting Network, Inc. or Regent University, on the other hand. All fees,
costs and expenses of a Liberty Party which are reimbursable pursuant to this
Section 11.2 shall be reimbursed as they are incurred. Fox Kids shall not be
liable for any settlement of any suit, action or proceeding effected without
its written consent, but if settled with its written consent, or if there be a
final judgment for the plaintiff in any such suit, action or proceeding, Fox
Kids shall indemnify and hold harmless each Liberty Party from and against any
damage, loss or liability by reason of such settlement or
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judgment. As used in this Section 11.2, the term "Liberty Party" means (i)
LIFE, Liberty and TCI, (ii) the respective directors, officers, employees and
agents of the Persons specified in clause (i) of this sentence, and (iii) the
respective successors, assigns, executors, heirs and legal representatives of
the foregoing.
11.3 Indemnification by Liberty and LIFE. Subject to the
other terms and conditions of this Agreement, Liberty and LIFE shall, jointly
and severally, indemnify Fox Kids against and hold Fox Kids harmless from all
demands, claims, losses, costs, fines, liabilities, damages (excluding
consequential damages) and expenses, including reasonable fees and expenses
incurred in the investigation and defense of claims and actions (collectively,
"Losses"), arising out of the breach of any representation, warranty, covenant
or agreement of Liberty or LIFE contained herein.
11.4 Indemnification by Fox Kids. Subject to the other
terms and conditions of this Agreement, Fox Kids shall indemnify each of
Liberty and LIFE against and hold each of Liberty and LIFE harmless from all
Losses arising out of (i) the breach of any representation, warranty, covenant
or agreement of Fox Kids contained herein or (ii) the invalidity or
unenforceability, or alleged invalidity or unenforceability, of any provision
of the Fox Kids Certificate of Designations, the NPAL Certificate of Amendment,
the Exchange Agreement or the Funding Agreement.
11.5 Claims. If any claim or assertion of liability is
made or asserted against a party entitled to be indemnified pursuant to Section
11.3 or 11.4 (an "Indemnified Party") by any Person who is not a party to this
Agreement, the Indemnified Party shall give to the other party (an
"Indemnifying Party") prompt written notice of such claim or assertion, or of
any event or proceeding by or in respect of a third party of which it has
knowledge, concerning any liability or damage as to which it may request
indemnification hereunder. The failure by an Indemnified Party to give notice
as provided in this Section 11.5 shall not relieve the Indemnifying Party of
its obligations under this Section 11.5 except to the extent that the failure
results in a failure of actual notice to the Indemnifying Party and the
Indemnifying Party is damaged solely as a result of the failure to give notice.
The Indemnifying Party shall have the right to direct, through counsel chosen
by the Indemnifying Party and reasonably satisfactory to the Indemnified Party,
the defense or settlement of any such claim or proceeding at its own expense.
If the Indemnifying Party elects to assume the defense of any such claim or
proceeding, the Indemnified Party may participate in such defense, but in such
case the expenses of the Indemnified Party shall be paid by the Indemnified
Party; provided, however, that if the Indemnified Party asserts that there
exists a conflict of interest that would make it inappropriate for the same
counsel to represent the Indemnifying Party and the Indemnified Party and the
counsel for the Indemnifying Party concurs with such assertion, then the
Indemnifying Party shall reimburse the Indemnified Party for the reasonable
fees and expenses of separate counsel, to the extent such fees and expenses are
incurred solely in connection with the matters with respect to which the
counsel for the Indemnifying Party agrees there is a conflict of interest. The
Indemnified Party shall provide the Indemnifying Party with access to its
records and personnel relating to any such claim, assertion,
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event or proceeding during normal business hours and shall otherwise cooperate
with the Indemnifying Party in the defense or settlement thereof, and the
Indemnifying Party shall reimburse the Indemnified Party for all its reasonable
out-of-pocket expenses in connection therewith, as such expenses are incurred.
If the Indemnifying Party elects to direct the defense of any such claim or
proceeding, the Indemnified Party shall not pay, or permit to be paid, any part
of any claim or demand arising from such asserted liability, unless the
Indemnifying Party, subject to the penultimate sentence of this Section 11.5,
withdraws from the defense of such asserted liability, or unless a final
judgment from which no appeal may be taken by or on behalf of the Indemnifying
Party is entered against the Indemnified Party for such liability. If the
Indemnifying Party fails to defend, or if, after commencing or undertaking any
such defense, the Indemnifying Party fails to prosecute or withdraws from such
defense, the Indemnified Party shall have the right to undertake the defense or
settlement thereof, at the Indemnifying Party's expense. If the Indemnified
Party assumes the defense of any such claim or proceeding pursuant to this
Section 11.5 and proposes to settle such claim or proceeding prior to a final
judgment thereon or to forego appeal with respect thereto, then the Indemnified
Party shall give the Indemnifying Party prompt written notice thereof and the
Indemnifying Party shall have the right to participate in the settlement or
assume or reassume the defense of such claim or proceeding. The Indemnifying
Party shall not settle any claim or assertion unless the Indemnified Party
consents in writing to such settlement, which consent shall not be unreasonably
withheld.
12. Miscellaneous Provisions.
12.1 Notices. All notices or other communications
hereunder shall be in writing and shall be deemed to have been duly given or
made if (i) delivered in person, on the date actually delivered, (ii) by United
States mail, certified or registered, with return receipt requested, on the
date which is two business days after the date of mailing, or (iii) if sent by
telex or facsimile transmission, with a copy mailed on the same day in the
manner provided in (ii) above, on the date transmitted provided receipt is
confirmed by telephone:
If to Fox Kids:
c/o News America Publishing Incorporated
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Telecopy No.: 212-768-2027
With copies to:
Squadron, Ellenoff, Plesent & ▇▇▇▇▇▇▇▇▇, LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
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Telecopy No.: ▇▇▇-▇▇▇-▇▇▇▇
Saban Entertainment
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇/▇▇▇ ▇▇▇▇▇
Telecopy No.: ▇▇▇-▇▇▇-▇▇▇▇
Troop ▇▇▇▇▇▇▇▇▇ Steuben & Pasich, LLP
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇, Esq.
Telecopy No.: ▇▇▇-▇▇▇-▇▇▇▇
If to Liberty or LIFE:
Liberty Media Corporation
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: President
Telecopy No.: ▇▇▇-▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇▇ & ▇▇▇▇▇, L.L.P.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇., Esq.
Telecopy No.: ▇▇▇-▇▇▇-▇▇▇▇
or at such other address as may have been furnished by a party in writing to
the other parties.
12.2 Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of law
or public policy, all other terms and provisions of this Agreement shall
nonetheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party. Upon any such determination that a term or
other provision is invalid, illegal or incapable of being enforced, the parties
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible to the fullest extent
permitted by applicable law in an acceptable manner to the end that the
transactions contemplated hereby are fulfilled to the extent possible.
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12.3 Governing Law. This Agreement shall be governed by,
and construed in accordance with, the laws of the State of New York, regardless
of the laws that might otherwise govern under applicable principles of
conflicts of law.
12.4 No Adverse Construction. The rule that a contract is
to be construed against the party drafting the contract is hereby waived, and
shall have no applicability in construing this Agreement or any provision
hereof.
12.5 Counterparts. This Agreement may be executed in one
or more counterparts, each of which shall be deemed an original but all of
which together shall constitute one and the same instrument.
12.6 Fees and Expenses. All costs and expenses, including
without limitation fees and disbursements of counsel, incurred by the parties
hereto shall be borne solely and entirely by the party which has incurred such
costs and expenses; provided, however, that if pursuant to Section 6.3 the
terms of a Substitute Security are negotiated, and such terms require that
filings be made under the H-S-R Act, then Fox Kids shall pay all filing fees
required to be paid under the H-S-R Act in connection with such filings.
12.7 Successors and Assigns. This Agreement shall inure to
the benefit of and be binding upon the parties hereto and their respective
successors and assigns, but neither this Agreement nor any of the rights,
interests or other obligations hereunder shall be assigned by any of the
parties hereto without the prior written consent of the other parties.
12.8 Amendment. This Agreement may be amended by the
parties hereto at any time prior to the Closing. This Agreement may be not be
amended except by an instrument in writing signed by each of the parties
hereto.
12.9 Waiver. Any party hereto may (i) extend the time
for the performance of any of the obligations or other acts of the other
parties hereto, (ii) waive any inaccuracies in the representations and
warranties of the other parties contained herein or in any document delivered
pursuant hereto, and (iii) waive compliance by the other parties with any of
the agreements or conditions contained herein; provided, however, that neither
Liberty nor LIFE may waive the condition to their respective obligations to
effect the Contribution set forth in Section 9.4. Any such extension or
waiver shall be valid only if set forth in an instrument in writing signed by
the party or parties to be bound thereby.
12.10 Entire Agreement. This Agreement (including the
Exhibits and Schedules attached hereto, the Fox Kids Disclosure Letter and
other documents referred to herein and which form a part hereof) constitutes
the entire agreement among the parties hereto and supersedes all prior
agreements and understandings, oral and written, among the parties with respect
to the subject matter hereof.
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The parties hereto have executed and delivered this Agreement
as of the date first above written.
LIBERTY MEDIA CORPORATION
By:
-----------------------------
Name:
Title:
LIBERTY IFE, INC.
By:
-----------------------------
Name:
Title:
FOX KIDS WORLDWIDE, INC.
By:
-----------------------------
Name:
Title:
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