EXHIBIT D TO THE
SECOND AMENDED AND RESTATED
LMC AGREEMENT
SSSI Agreement
This SSSI Agreement (the "Agreement") is
dated as of _________, 1996, and is entered
into between TW Inc. (which will be renamed
Time Warner Inc.), a Delaware corporation
("Holdco"), Liberty Media Corporation, a
Delaware corporation ("LMC"), and Southern
Satellite Systems, Inc., a Georgia corporation
("SpinCo"), and, with respect to Section 11(d),
Section 11(f) and Section 11(g) only, Satellite
Services, Inc., a Delaware corporation
("Satellite"). For purposes of this Agreement,
LMC, SpinCo and, with respect to the above
referenced Sections, Satellite, on the one hand
are, collectively, a "Party" and Holdco on the
other hand, individually, is a "Party".
References to "Parties" is a collective
reference to LMC, SpinCo and with respect to
the above referenced Sections, Satellite, on
the one hand, and Holdco, on the other.
WHEREAS Holdco, LMC and certain subsidiaries of LMC
have entered into a Second Amended and Restated LMC Agreement
dated as of September 22, 1995 (the "LMC Agreement"), which
contemplates the Parties entering into this Agreement;
WHEREAS Holdco desires to acquire (a) from SpinCo
the Contract Option (as defined in Section 2) and (b) from LMC
and its Affiliates (as defined in Section 24) the
non-competition agreement contemplated in Section 11(b)(ix);
WHEREAS Tele-Communications, Inc., a Delaware
corporation ("TCI"), is required pursuant to the FTC Consent
Decree (including the FTC Agreement in Principle) (each, as
defined in Section 24) to seek from the Internal Revenue
Service the Letter Ruling (as defined in Section 24) with
respect to the Spin-off (as defined in Section 24) of 100% of
the shares of SpinCo;
WHEREAS as of the date hereof LMC directly owns all
the outstanding common stock, par value $1.00 per share (the
"Shares"), of SpinCo, which is engaged primarily in the
Business;
WHEREAS, in connection with the Spin-off, LMC shall
contribute all the capital stock of TCI Turner Preferred,
Inc., a Colorado corporation ("TCITP"), to SpinCo, so that, as
of immediately prior to the effectiveness of the Spin-off,
TCITP will be a wholly owned subsidiary of SpinCo;
WHEREAS immediately prior to the Spin-off, TCITP
will own, directly or indirectly, all voting securities of
Holdco then owned beneficially or of record by LMC or any of
its Controlled Affiliates (as defined in the LMC Agreement)
and, if LMC is then a Controlled Affiliate of TCI, all voting
securities of Holdco then owned beneficially or of record by
TCI or any of its Controlled Affiliates, other than the
Excluded Shares (as defined in the LMC Agreement);
WHEREAS this Agreement is being executed on the date
of the closing of Holdco's acquisition of Turner Broadcasting
System, Inc., but the Contract Option provided for in Section
2 will not be granted until the Grant Date (as defined in
Section 2); and
WHEREAS capitalized terms used but not defined in
any of the other Sections of this Agreement are defined in
Section 24.
NOW, THEREFORE, it is agreed as follows:
1. Execution Date. (a) Holdco shall deliver to LMC
(or its designee pursuant to Section 15) and SpinCo upon the
execution of this Agreement (the "Execution Date"):
(i) An opinion of counsel to Holdco (which counsel
may be an employee of Holdco), reasonably acceptable to
LMC and SpinCo, addressed to LMC and SpinCo and dated the
Execution Date, to the effect that:
(A) Holdco is a corporation duly organized,
validly existing and in good standing under the
laws of its jurisdiction of incorporation and in
good standing to do business as a foreign
corporation in each jurisdiction in which the
conduct or nature of its business or the ownership,
leasing or holding of its properties makes such
qualification necessary, except such jurisdictions
where the failure to be so qualified or in good
standing, individually or in the
aggregate, would not have a Material Adverse
Effect. Holdco has all requisite corporate power
and authority to execute and deliver this
Agreement, the Distribution Contract and the
Registration Rights Agreement (as defined in the
LMC Agreement) (collectively, the "Relevant
Agreements"), to perform its obligations thereunder
and to consummate the transactions contemplated
hereby and thereby.
(B) The execution and delivery by Holdco of the
Relevant Agreements, the performance by Holdco of
its obligations thereunder and the consummation by
Holdco of the transactions contemplated thereby
have been duly and validly authorized by all
necessary corporate action on the part of Holdco.
Each of the Relevant Agreements has been duly
executed and delivered by a duly authorized officer
of Holdco and constitutes the legal, valid and
binding obligation of Holdco enforceable against
Holdco in accordance with its terms (subject to all
applicable bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar
laws affecting creditors' rights generally and
subject, as to enforceability, to general
principles of equity, and except that the
indemnification obligations set forth in Section 8
of the Registration Rights Agreement may be subject
to considerations of public policy).
(C) The execution, delivery and performance by
Holdco of the Relevant Agreements do not conflict
with or result in a violation of the General
Corporation Law of the State of Delaware, or the
certificate of incorporation or by-laws of Holdco.
(ii) The duly executed Registration Rights
Agreement.
(b) On the Execution Date, Holdco shall execute and
deliver to SpinCo, and SpinCo shall execute and deliver to
Holdco, the Distribution Contract (the "Distribution
Contract") in substantially the form of Exhibit 1 hereto. The
Distribution Contract shall not become effective until the
Contract Option provided for in Section 2 is exercised and
closed.
2. Contract Option; Non-Competition Agreement. (a)
Subject to and on the terms and conditions set forth in this
Agreement (including Section 15(b)), SpinCo hereby agrees to
grant to Holdco on the Grant Date the right and option (the
"Contract Option"), which may be exercised at any time during
the Exercise Period (as defined in Section 2(d)), to cause the
effectiveness of the Distribution Contract. The "Grant Date"
shall be five business days after the earliest of (i) receipt
of the Letter Ruling, (ii) the date on which TCI shall have
been advised by the Internal Revenue Service, or TCI shall
have notified Holdco in writing that it has determined, that
it will not obtain the Letter Ruling and (iii) May 31, 1997,
subject however, in the case of clauses (ii) and (iii) to the
provisions of Section 15(b).
(b) On the Grant Date, Holdco shall deliver:
(i) to SpinCo, in respect of the Contract Option,
4,166,667 fully paid and nonassessable shares of Series
LMCN-V Common Stock of Holdco, having the terms set forth
on Exhibit A to the LMC Agreement ("LMCN-V Common
Stock");
(ii) to LMC (or its designee pursuant to Section
15), in respect of LMC's noncompetition agreement with
respect to itself and its Affiliates set forth in Section
11(b)(ix), (A) 833,333 fully paid and nonassessable
shares of the LMCN-V Common Stock, and (B) $66,666,700
payable, at Holdco's option, in cash or fully paid and
nonassessable shares of LMCN-V Common Stock (if the
$66,666,700 is paid in LMCN-V Common Stock, the number of
shares to be delivered in respect of such amount shall be
equal to the quotient obtained by dividing (x)
$66,666,700 by (y) the product of the Formula Number (as
defined in the terms of the LMCN-V Common Stock) and the
Current Market Price of the common stock, par value $0.01
per share, of Holdco (the "Holdco Common Stock") on the
Grant Date); and
(iii) to LMC and SpinCo an opinion of counsel to
Holdco (which counsel may be an employee of Holdco),
reasonably acceptable to LMC and SpinCo, addressed to LMC
and SpinCo to the effect that the shares of LMCN-V Common
Stock delivered by Holdco to LMC and SpinCo on such date
have been duly
authorized and are validly issued, fully paid,
nonassessable and are not subject to any preemptive
rights.
(c) Notwithstanding any other provision of this
Agreement, the obligation of Holdco to deliver the
consideration provided for in this Section 2 on the Grant Date
is absolute, and not subject to any right of setoff or
counterclaim that Holdco may have or claim, and no
consideration paid or delivered in respect of the Contract
Option pursuant to this Section 2 shall be refunded or
refundable, nor may any claim be made for the return thereof,
in whole or in part, unless Holdco proves in a court of law
that LMC and SpinCo did not at the Execution Date have all
requisite corporate power to execute, deliver and perform its
obligations, as applicable, under this Agreement and the
Distribution Contract and such lack of power has not been
cured.
(d) Holdco may exercise the Contract Option at any
time during the period (the "Exercise Period") commencing on
and including the Grant Date and ending on and including the
Termination Date (as defined in Section 10(a)), by giving
written notice of exercise (the "Exercise Notice") to SpinCo
pursuant to Section 16.
(e) If the Contract Option is exercised, the
consideration therefor shall be the amounts payable pursuant
to Section 2 of the Distribution Contract.
(f) Each Party agrees to be bound by and act in
accordance with the payment allocation set forth in Section
2(b) in the preparation and filing of all tax returns and in
any proceeding before any tax authority. In the event that
such payment allocation is disputed by a taxing authority, the
Party receiving notice of the dispute shall promptly notify
the other Party hereto of such dispute and keep such other
Party informed with respect to all matters concerning such
dispute.
3. Closing. The closing (the "Closing") of the
exercise of the Contract Option shall occur as soon as
practicable after such exercise, but in no event more than
five business days following the satisfaction or waiver (to
the extent waived by the Party entitled to do so) of the
conditions to the Closing described in Sections 5, 6, 7, 8 and
9 (such date for the Closing being referred to as the
"Closing Date"). On the Closing Date, the Distribution
Contract shall become effective.
4. Representations and Warranties as of Execution
Date.
(a) Each of LMC and SpinCo represents and warrants
to Holdco, and Holdco represents to LMC and SpinCo, as of the
Execution Date that:
(i) Such party has all requisite corporate power to
execute, deliver and perform its obligations under each
of the Relevant Agreements to which it is a party and
such execution, delivery and performance have been duly
authorized by all corporate action on its part required
to be taken.
(ii) Each of the Relevant Agreements to which it is
a party is such party's legal, valid and binding
obligation, enforceable in accordance with its terms,
except as may be affected by bankruptcy, insolvency or
similar laws affecting the rights of creditors generally
and by equitable principles of general applicability.
(iii) Neither the execution and delivery by such
party of any of the Relevant Agreements to which it is a
party, nor the performance of its obligations thereunder:
(A) will violate or conflict with, or constitute a breach
or default under, (1) the certificate of incorporation or
by-laws of such Party, (2) any law, statute, regulation,
rule, order or other enactment of any Governmental Entity
(as defined in Section 24) applicable to such party, or
(3) any agreement or instrument to which such party is a
party or by which it is bound or affected, except for any
violations, conflicts, breaches or defaults as would not,
individually or in the aggregate, have a material adverse
effect on the legality, validity, binding effect or
enforceability of any of the Relevant Agreements or on
the material rights or ability of the other Party to
realize the material benefits intended to be created by
the Relevant Agreements, and except for any violations,
conflicts, breaches or defaults as may be the result of
actions taken by Holdco subsequent to effective date of
the Distribution Contract, or (B) result in the creation
or imposition of any lien or other encumbrance on any of
its assets, except for
liens or encumbrances as would not, individually or in
the aggregate, have a material adverse effect on the
legality, validity, binding effect or enforceability of
any of the Relevant Agreements or on the material rights
or ability of the other party to realize the material
benefits intended to be created hereby and thereby. No
authorization, consent, approval or other action by, and
no notice to or filing with, any Governmental Entity or
other third party is required to be obtained or made in
connection with, as applicable, such party's execution,
delivery and performance of the Relevant Agreements to
which it is a party, except any thereof the failure of
which to be obtained, given or made would not,
individually or in the aggregate, have a material adverse
effect on the legality, validity, binding effect or
enforceability of any of the Relevant Agreements or on
the material rights or ability of the other Party to
realize the material benefits intended to be created
hereby and thereby.
(b) LMC and SpinCo represent and warrant to Holdco
as of the Execution Date that:
(i) Consolidated Return. As of the Execution Date,
(A) each of LMC and SpinCo (and, if LMC shall have
designated another person to receive the Section 2
payment pursuant to Section 15, such designated person)
is a member of the same group of corporations filing a
consolidated return for federal income tax purposes as
the Liberty Subsidiaries (the "LMC affiliated group") and
(B) except in connection with the Spin-off, none of LMC,
TCITP, SpinCo or their respective affiliates (other than
the holders of the Excluded Shares, as such term is
defined in the LMC Agreement) has any current plan or
intention (1) to transfer any Holdco equity securities
held directly or indirectly by it immediately following
the Execution Date (or to be acquired by it pursuant to
this Agreement) (any such holder or acquirer, a "Holder")
to any person that is not a member of the LMC affiliated
group or (2) to cause any Holder to cease to be a member
of the LMC affiliated group.
(ii) Investment Intent. The shares of LMCN-V Common
Stock to be acquired by each of LMC and SpinCo pursuant
to Section 2 will be acquired for its own account, for
investment and not with a view to the distribution or
resale thereof other than as
contemplated in connection with the Spin-off or as
contemplated by the Registration Rights Agreement (and
except that LMC currently intends to transfer the shares
of LMCN-V Common Stock that it so acquires to TCITP or a
wholly-owned subsidiary of TCITP). Each of LMC and SpinCo
understands that such shares have not been registered
under the Securities Act of 1933, as amended (the
"Securities Act"), or any state securities or blue sky
laws, by reason of their issuance in a transaction exempt
from the registration requirements thereunder and may not
be resold unless the subsequent disposition thereof is
registered thereunder or is exempt from registration
thereunder.
(c) Holdco represents and warrants to LMC and SpinCo
as of the Execution Date that:
(i) The shares of LMCN-V Common Stock to be
delivered as payment for the Contract Option and the
non-competition agreement in Section 11(b)(ix) will as of
their date of issuance be duly authorized and validly
issued, fully paid, nonassessable and free of preemptive
rights.
(ii) Neither the execution and delivery by Holdco of
this Agreement, the Distribution Contract and the
Registration Rights Agreement nor the performance of its
obligations hereunder and thereunder will result in the
creation or imposition of any lien or other encumbrance
on the shares of LMCN-V Common Stock to delivered as
payment for the Contract Option and the non-competition
agreement in Section 11(b)(ix).
(d) In addition to the representations and
warranties of Holdco set forth in Section 4(c), the following
representations and warranties of Time Warner Inc., a Delaware
corporation ("Old TW"), are hereby incorporated by reference,
with the same effect as if made in this Agreement by Holdco to
LMC and SpinCo on and as of the Execution Date:
(i) the representations and warranties of Old TW
contained in Section 3.02(a) of the Amended and Restated
Agreement and Plan of Merger, dated as of September 22,
1995, as amended as of August , 1996 (the "Merger
Agreement"), among Old TW, Holdco, Time Warner
Acquisition Corp., TW Acquisition Corp. and
Turner Broadcasting System, Inc., under the heading
entitled "Organization, Standing and Corporate Power";
(ii) the representations and warranties of Old TW
contained in Section 3.02(c) of the Merger Agreement
under the heading entitled "Capital Structure";
(iii) the representations and warranties of Old TW
contained in Section 3.02(e) of the Merger Agreement
under the heading entitled "SEC Documents; Undisclosed
Liabilities";
(iv) the representations and warranties of Old TW
contained in Section 3.02(g) of the Merger Agreement
under the heading entitled "Absence of Certain Changes or
Events";
(v) the representations and warranties of Old TW
contained in Section 3.02(h) of the Merger Agreement
under the heading entitled "Litigation";
(vi) the representations and warranties of Old TW
contained in Section 3.02(j) of the Merger Agreement
under the heading entitled "Brokers"; and
(vii) the representations and warranties of Old TW
contained in Section 3.02(k) of the Merger Agreement
under the heading entitled "Taxes".
5. Representations and Warranties of Both Parties as
of the Closing Date. If the Contract Option is exercised, it
shall be a condition to the Closing (for the benefit of
SpinCo) that, on and as of the Closing Date, each of the
following representations and warranties, if qualified by
materiality, shall be true and complete, or, if not so
qualified, shall be true and complete in all material
respects, with respect to Holdco, and it shall be a condition
to the Closing (for the benefit of Holdco) that, on and as of
the Closing Date, each of the following representations and
warranties, if qualified by materiality, shall be true and
complete, or, if not so qualified, shall be true and complete
in all material respects, with respect to LMC and SpinCo:
(a) Such party is a corporation duly organized,
validly existing and in good standing under the laws of its
state of incorporation and is duly qualified and in good
standing to do business as a foreign corporation in each
jurisdiction in which the conduct or nature of its business or
the ownership, leasing or holding of its properties makes such
qualification necessary, except such jurisdictions where the
failure to be so qualified or in good standing, individually
or in the aggregate, would not have a Material Adverse Effect.
(b) Such party has all requisite corporate power to
execute, deliver and perform its obligations under each of the
Relevant Agreements to which it is a party, and such
execution, delivery and performance have been duly authorized
by all corporate action on its part required to be taken.
(c) Each of the Relevant Agreements to which it is a
party is such party's legal, valid and binding obligation,
enforceable in accordance with its terms, except as may be
affected by bankruptcy, insolvency or similar laws affecting
the rights of creditors generally and by equitable principles
of general applicability.
(d) Neither the execution and delivery by such party
of each of the Relevant Agreements to which it is a party nor,
except as set forth below the applicable party's name on
Schedule 5(d) hereto, the performance of its obligations
thereunder: (i) will violate or conflict with, or constitute a
breach or default under, (A) the certificate of incorporation
or by-laws of such party, (B) any law, statute, regulation,
rule, order or other enactment of any Governmental Entity
applicable to such party, or (C) any agreement or instrument
to which such party is a party or by which it is bound or
affected, except for any violations, conflicts, breaches or
defaults as would not, individually or in the aggregate, have
a material adverse effect on the legality, validity, binding
effect or enforceability of any of the Relevant Agreements or
on the material rights or ability of the other Party to
realize the material benefits intended to be created by the
Relevant Agreements or (ii) result in the creation or
imposition of any lien or other encumbrance on any of its
assets, except for liens or encumbrances as would not,
individually or in the aggregate, have a material adverse
effect on the legality, validity, binding effect or
enforceability of the Relevant Agreements or on the material
rights or ability of the other Party to realize the material
benefits intended to be created hereby and thereby. No
authorization, consent, approval or other action by, and no
notice to or filing with, any Governmental Entity or other
third party is required to be obtained or
made in connection with, as applicable, such party's
execution, delivery and any of the Relevant Agreements to
which it is a party, except as set forth below the applicable
party's name on Schedule 5(d) hereto, performance of each of
the Relevant Agreements to which it is a party, or on the
material rights or ability of the other Party to realize the
material benefits intended to be created hereby and thereby.
Without limiting the rights or obligations of either
Party under any provision of this Agreement: (1) if the
Contract Option is exercised, each Party shall promptly notify
the other Party of any information that should be set forth
below such Party's name on Schedule 5(c); (2) upon receipt of
any such notice, Schedule 5(c) shall automatically be amended
to incorporate such information under the name of such Party;
and (3) it shall be a condition to the obligations of each
Party to be performed hereunder on the Closing Date that such
Party shall be reasonably satisfied with the contents of
Schedule 5(c) (as so amended) set forth under the name of the
other Party, to the extent such matters are materially
different from the matters set forth under the name of such
other Party on Schedule 4(a)(iii).
6. (a) Representations and Warranties of SpinCo as
of the Closing Date. If the Contract Option is exercised, it
shall be a condition to Closing (for the benefit of Holdco)
that, on and as of the Closing Date, each of the following
representations and warranties of SpinCo, if qualified by
materiality, shall be true and complete or, if not so
qualified, shall be true and complete in all material
respects, except in each case as shall be set forth in a
letter (the "Disclosure Letter") from SpinCo to Holdco dated
as of a date after the exercise of the Contract Option and not
later than the date 10 days prior to the Closing Date:
(i) Consents. Except as set forth in Schedule
6(a)(i) to the Disclosure Letter, no consent, approval,
license, permit, order or authorization of, or
registration, declaration or filing with, any
governmental entity is required to be obtained or made by
or with respect to SpinCo in connection with (A) the
execution, delivery and performance of this Agreement or
the Distribution Contract by SpinCo or performance by
SpinCo of its obligations hereunder or thereunder or (B)
the conduct of the business of SpinCo following the
Closing hereof, other than (1) compliance with and
filings under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended ("HSR Act"), if
applicable, (2) those that may be required solely by
reason of Holdco's (as opposed to any other third
party's) participation in the transactions contemplated
hereby, (3) those that will be obtained by the Closing
and (4) those the failure of which to be obtained or made
by the Closing would not, individually or in the
aggregate, have a Material Adverse Effect.
(ii) Financial Statements. (A) Attached to the
Disclosure Letter as Schedule 6(a)(ii) are (1) the
unaudited consolidated balance sheet of the Business (or,
if prior to the Spin-off, of SpinCo) as of the end of the
most recent fiscal period or calendar month prior to the
date of the Disclosure Letter (the "Balance Sheet"), and
(2) the unaudited consolidated statements of operating
results and cash flows of the Business (or, if prior to
the Spin-off, of SpinCo) for the period ended as of the
end of the most recent fiscal period or calendar month
prior to the date of the Disclosure Letter (the financial
statements described above, the "Financial Statements").
(B) The Financial Statements have been prepared in
accordance with generally accepted accounting principles
consistently applied and on that basis fairly present (subject
to normal, recurring year-end adjustments) the consolidated
financial condition and results of operations of the Business
(or of SpinCo) as of the date thereof and for the periods
indicated.
(C) To the knowledge of SpinCo and, if prior to the
Spin-off, LMC, as of the Closing Date, the Business (or, if
prior to the Spin-off, SpinCo) does not have any material
liabilities or obligations of any nature (whether accrued,
absolute, contingent, unasserted or otherwise), that are
required by generally accepted accounting principles to be
reflected on a consolidated balance sheet, except (1) as
disclosed, reflected or reserved against in the Balance Sheet,
(2) for liabilities and obligations incurred in the ordinary
course of business consistent with past practice since the
date of the Balance Sheet and not in violation of this
Agreement and (3) for Taxes.
(iii) Assets. Except as set forth in Schedule
6(a)(iii) to the Disclosure Letter, SpinCo owns or has
sufficient rights to use under existing leases and
license agreements all material properties, rights and
assets reasonably necessary for the conduct of the
Business as then conducted.
(iv) Contracts. Except as set forth in Schedule
6(a)(iv) to the Disclosure Letter:
(A) all material agreements, contracts, leases,
licenses, commitments or instruments of SpinCo, as
of the Closing Date that are reasonably necessary
for the conduct of the Business as then conducted
(collectively, the "Contracts"), are valid, binding
and in full force and effect and, as of the Closing
Date, are enforceable by SpinCo in accordance with
their terms, except as may be affected by
bankruptcy, insolvency or similar laws affecting
the rights of creditors generally and by equitable
principles of general applicability; and
(B) SpinCo has, as of the Closing Date,
performed in all material respects all material
obligations required to be performed by it under
the Contracts and, as of the Closing Date, is not
(with or without the lapse of time or the giving of
notice, or both) in breach or default in any
material respect thereunder and no other party to
any of the Contracts is to the knowledge of SpinCo,
as of the Closing Date (with or without the lapse
of time or the giving of notice, or both), in
breach or default in any material respect
thereunder, except in either such case for any such
breach or default resulting from any action or
omission by Holdco, Turner Broadcasting System,
Inc. ("TBS") or any of their respective Affiliates,
including without limitation any change in the
programming service known as WTBS on the date of
execution of this Agreement.
(v) Litigation. Except as set forth in Schedule
6(a)(v) to the Disclosure Letter:
(A) there are not, as of the Closing Date, any
pending lawsuits or claims with respect to the
Business to which SpinCo or, if prior to the
Spin-off, LMC has been contacted in writing by
counsel
for the plaintiff or claimant, against or affecting
SpinCo or any of its properties, assets, operations
or businesses as to which there is at least a
reasonable possibility of adverse determination,
that would have, if so determined, individually or
in the aggregate, a Material Adverse Effect;
(B) to the knowledge of SpinCo and, if prior to
the Spin-off, LMC, as of the Closing Date, SpinCo
is not a party or subject to or in default under
any material judgment, order, injunction or decree
of any Governmental Entity applicable to it or any
of its material properties or assets, which relates
to the Business or could result in a Material
Adverse Effect;
(C) there is not pending against any other
person, as of the Closing Date, any material
lawsuit or claim by SpinCo, which relates to the
Business or which, if adversely determined, could
result in a Material Adverse Effect; and
(D) as of the Closing Date, to the knowledge of
SpinCo and, if prior to the Spin-off, LMC, there is
not any pending investigation of or proceeding by
any Governmental Entity which relates to the
Business and which if determined adversely could
result in a Material Adverse Effect with respect to
the Business or SpinCo.
(vi) Insurance. SpinCo, through one or more
Affiliates, maintains or has the benefit (through TCI,
LMC or otherwise) of policies of fire and casualty,
liability and other forms of insurance (including
self-insurance) in such amounts, with such deductibles
and against such risks and losses as are, in its
judgment, reasonable for the Business under the
circumstances in which it is being conducted. Except as
set forth in Schedule 6(a)(vi) to the Disclosure Letter:
(A) all such policies are in full force and
effect, all premiums due and payable thereon as of
the Closing Date have been paid (other than
retroactive or retrospective premium adjustments
that may be required to be paid with respect to any
period ending prior to the Closing Date under
comprehensive general liability and workmen's
compensation insurance policies), and no notice of
cancelation or termination as of the Closing Date
has been received with respect to any such policy
which has not been replaced prior to the date of
such cancelation; and
(B) to the knowledge of SpinCo and, if prior to
the Spin-off, LMC, its activities and operations
with respect to the Business, as of the Closing
Date, have been conducted in a manner so as to
conform in all material respects to all applicable
provisions of such insurance policies, except for
any failures so to conform that could not,
individually or in the aggregate, have a Material
Adverse Effect.
(vii) Compliance with Applicable Laws. Except as set
forth in Schedule 6(a)(vii), as of the Closing Date,
SpinCo has not received any written communication during
the past two years from a Governmental Entity that
alleges that it or the Business is not in compliance in
any material respect with any applicable statutes, laws,
ordinances, rules, orders and regulations of any
Government Entity, other than any such communications,
alleging any failures to be in compliance that, if true,
would not, individually or in the aggregate, have a
Material Adverse Effect.
(viii) Licenses; Permits. Except as set forth in
Schedule 6(a)(viii) to the Disclosure Letter, SpinCo
possesses all governmental franchises, licenses, permits,
authorizations and approvals necessary to enable it to
own, lease or otherwise hold its properties and assets
with respect to the Business and to carry on the Business
as presently conducted, other than such franchises,
licenses, permits, authorizations and approvals the lack
of which, individually or in the aggregate, would not
have a Material Adverse Effect.
(ix) Absence of Changes or Events. Except as set
forth in Schedule 6(a)(ix) to the Disclosure Letter:
(A) since the date of the Balance Sheet, there
has not been any material adverse change in the
business, assets, condition (financial or
otherwise) or results of operations of the Business
(or, if prior to the Spin-off, SpinCo); and
(B) since the date of the Balance Sheet, the
Business has been conducted in the ordinary course
(in accordance with the Ordinary Course Guidelines)
and in substantially the same manner as previously
conducted except for such changes (in accordance
with the Ordinary Course Guidelines) in the
day-to-day operations of the Business as the
management of SpinCo (or, if prior to the Spin-off,
LMC and SpinCo), in the good faith exercise of
their business judgment, shall from time to time
determine to be in the best interests of the
Business) and has made commercially reasonable
efforts consistent with past practices to preserve
the Business' relationships with customers,
suppliers and others with whom SpinCo deals in
connection with the Business.
(b) Certain Representations and Warranties of Holdco
as of Closing Date. If the Contract Option is exercised, it
shall be a condition to the Closing (for the benefit of
SpinCo) that, on and as of the Closing Date, each of the
following representations and warranties of Holdco, if
qualified by materiality, shall be true and complete, or, if
not so qualified, shall be true and complete in all material
respects:
(i) Neither the execution and delivery by Holdco of
this Agreement, the Distribution Contract and the
Registration Rights Agreement nor the performance of its
obligations hereunder and thereunder resulted in the
creation or imposition of any lien or other encumbrance
on the shares of LMCN-V Common Stock delivered by Holdco
pursuant to Section 2 as payment for the Contract Option
and the non-competition agreement in Section 11(b)(ix).
(ii) Old TW and Holdco have, collectively, filed all
required reports, schedules, forms, statements and other
documents with the Securities and Exchange Commission
("SEC") since December 31, 1993 (as such documents have
been amended prior to the Closing Date, the "TW SEC
Documents"). As of their respective dates, the TW SEC
Documents complied in all material respects with the
requirements of the Securities Act or the Securities
Exchange Act of 1934, as amended, as the case may be, and
the rules and regulations of the SEC promulgated
thereunder applicable to such TW SEC
Documents, and none of the TW SEC Documents contained any
untrue statement of a material fact or omitted to state a
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 such statements have been modified
or superseded by a later TW SEC Document. Except to the
extent that information contained in any TW SEC Document
has been revised or superseded by a later TW SEC
Document, neither Old TW's Annual Report on Form 10-K for
the year ended December 31, 1995, nor any TW SEC Document
filed after December 31, 1995, contains any untrue
statement of a material fact or omits 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.
The consolidated financial statements of Old TW and
Holdco included in TW SEC Documents comply as to form in
all material respects with applicable accounting
requirements and the published rules and regulations of
the SEC with respect thereto, have been prepared in
accordance with generally accepted accounting principles
(except, in the case of unaudited statements, as
permitted by Form 10-Q of the SEC) applied on a
consistent basis during the periods involved (except as
may be indicated in the notes thereto) and fairly present
the consolidated financial position of Old TW or Holdco,
as applicable, and its consolidated subsidiaries as of
the dates thereof and the consolidated results of their
operations and cash flows for the periods then ended
(subject, in the case of unaudited statements, to normal
year-end audit adjustments). Except as set forth in the
TW SEC Documents, neither Holdco nor any subsidiary of
Holdco has any liabilities or obligations of any nature
(whether accrued, absolute, contingent or otherwise)
required by generally accepted accounting principles to
be set forth on a consolidated balance sheet of Holdco
and its consolidated subsidiaries or in the notes thereto
and which, individually or in the aggregate, could
reasonably be expected to have a Parent Material Adverse
Effect (as defined in the Merger Agreement).
(iii) Except as disclosed in any TW SEC Document,
since the date of the most recent audited financial
statements included in TW SEC Documents, Holdco has (or,
if Holdco shall have not yet filed audited financial
statements as part of the TW SEC Documents, each of Old
TW and Holdco has) conducted its business only in the
ordinary course, and there has not been:
(A) any change or effect (or any development
that, insofar as can reasonably be foreseen, is
likely to result in a change or effect) which,
individually or in the aggregate, has had or is
likely to have, a Parent Material Adverse Effect;
(B) except for regular quarterly dividends not
in excess of $0.09 per share of Holdco Common Stock
and the stated or required amount of dividends on
any series of Parent Preferred Stock (as defined in
the Merger Agreement), in each case with customary
record and payment dates, any declaration, setting
aside or payment of any dividend or other
distribution (whether in cash, stock or property)
with respect to Holdco Common Stock or any series
of Parent Preferred Stock;
(C) any split, combination or reclassification
of Holdco Common Stock or any issuance or the
authorization of any issuance of any other
securities in exchange or in substitution for
shares of Holdco Common Stock;
(D) any damage, destruction or loss, whether or
not covered by insurance that has had or is likely
to have a Parent Material Adverse Effect; or
(E) any change in accounting methods,
principles or practices by Holdco or any Material
Parent Subsidiary (as defined in the Merger
Agreement) materially affecting its assets,
liabilities or business, except insofar as may have
been required by a change in generally accepted
accounting principles.
(c) Representations and Warranties of Holdco
Incorporated by Reference as of the Closing Date. In addition
to the representations and warranties of Holdco set forth in
Section 6(b), the following representations and warranties of
Old TW are hereby incorporated by reference,
with the same effect as if made in this Agreement by Holdco to
SpinCo on and as of the Closing Date:
(i) the representations and warranties of Old TW
contained in Section 3.02(a) of the Merger Agreement
under the heading entitled "Organization, Standing and
Corporate Power"; and
(ii) the representations and warranties of Old TW
contained in Section 3.02(j) of the Merger Agreement
under the heading entitled "Brokers".
and it shall be a condition to the Closing (for the benefit of
SpinCo) that each of the representations and warranties so
incorporated by reference, if qualified by materiality, shall
be true and complete, or if not so qualified, shall be true
and complete in all material respects, on and as of the
Closing Date.
7. Conditions to the Obligations of Each Party. The
obligations of SpinCo and Holdco to consummate the Closing are
conditioned upon the satisfaction, prior to or on the Closing
Date, of the following conditions:
(a) on the Closing Date, no action, proceeding or
investigation commenced or brought by any U.S. Federal
Government Entity shall be pending, the purpose of which is to
set aside or modify in any material respect the authorizations
of any of the transactions provided for in this Agreement and
the Distribution Contract or to enjoin or prevent consummation
of any of such transactions, nor shall any restraining order
or preliminary or permanent injunction or other order issued
by any court of competent jurisdiction or any other legal
restraint or prohibition preventing the consummation of the
transactions contemplated hereby be in effect; and
(b) the receipt of any required regulatory approvals
and authorizations and the making of all filings and the
termination of all waiting periods required in connection with
the Closing, with the understanding that, if the Contract
Option is exercised, SpinCo will use its (or, if prior to the
Spin-off, LMC and SpinCo will use their) commercially
reasonable efforts to secure any required regulatory approvals
and authorizations prior to the Closing; provided, however,
that nothing in this Agreement shall require, Holdco or SpinCo
(or any of their respective Affiliates) (i) to agree to,
approve or otherwise be bound
by or satisfy any condition of any kind referred to in the
second or third sentences of Section 2.1(d) of the LMC
Agreement or (ii) to agree to or enter into or be bound by any
settlement or judgment.
8. Conditions to Obligation of Holdco. The
obligation of Holdco to consummate the Closing is also subject
to the satisfaction, prior to or on the Closing Date, of each
of the following additional conditions (unless waived by
Holdco):
(a) Each of the Parties (other than Holdco) shall
have performed in all material respects all its obligations
hereunder which are required to be performed prior to the
Closing Date.
(b) If prior to the Spin-off, Holdco shall have
received a certificate from an officer of LMC (i) to the
effect that LMC has complied, in all material respects, with
all its obligations under this Agreement to be performed on or
before the Closing Date, (ii) as to the incumbency of certain
officers of LMC, (iii) as to the satisfaction of the
conditions to Closing set forth in Section 5 (with respect to
the representations and warranties of LMC contained therein)
and Section 6(a) and (iv) attaching certified copies of
SpinCo's certificate of incorporation and by-laws, as amended
through and in effect on the Closing Date, together with all
resolutions of LMC's board authorizing the transactions
contemplated by this Agreement and the Distribution Contract.
(c) If prior to the Spin-off, Holdco shall have
received an opinion of counsel to LMC (which counsel may be an
employee of LMC and which counsel may be counsel to SpinCo),
reasonably acceptable to Holdco, addressed to Holdco and dated
the Closing Date, to the effect that:
(i) LMC is a corporation duly organized, validly
existing and in good standing under the laws of its
jurisdiction of incorporation. LMC has all requisite
corporate power and authority to execute and deliver the
Agreement, to perform its obligations thereunder and to
consummate the transactions contemplated thereby.
(ii) The execution and delivery by LMC of the
Agreement, the performance by LMC of its obligations
thereunder and the consummation by LMC of the
transactions contemplated thereby have been duly and
validly authorized by all necessary corporate action on
the part of LMC. The Agreement has been duly executed and
delivered by a duly authorized officer of LMC and
constitutes the legal, valid and binding obligation of
LMC enforceable against LMC in accordance with its terms
(subject to all applicable bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and
similar laws affecting creditors' rights generally and
subject, as to enforceability, to general principles of
equity).
(iii) The execution, delivery and performance of the
Agreement by LMC in accordance therewith does not
conflict with or result in a violation of the Delaware
Corporation Law or the Certificate of Incorporation or
By-laws of LMC.
(d) Holdco shall have received a certificate from an
officer of SpinCo (i) to the effect that SpinCo has complied,
in all material respects, with all its obligations under this
Agreement to be performed on or before the Closing Date, (ii)
as to the incumbency of certain officers of SpinCo, (iii) as
to the satisfaction of the conditions to Closing set forth in
Section 5 (with respect to the representations and warranties
of SpinCo contained therein) and Section 6(a), and (iv)
attaching certified copies of SpinCo's certificate of
incorporation and by-laws as amended through and in effect on
the Closing Date, together with all resolutions of SpinCo's
board of directors authorizing the transactions contemplated
by this Agreement and the Distribution Contract.
(e) Holdco shall have received an opinion of counsel
to SpinCo (which counsel may be an employee of SpinCo and may
also be counsel to LMC and/or an employee of LMC), reasonably
acceptable to Holdco, addressed to Holdco and dated the
Closing Date, to the effect that:
(i) SpinCo is a corporation duly organized, validly
existing and in good standing under the laws of its
jurisdiction of incorporation. SpinCo has all requisite
corporate power and authority to execute and deliver this
Agreement and the Distribution Contract and to perform
its obligations hereunder and thereunder.
(ii) The execution and delivery by SpinCo of this
Agreement and the Distribution Contract and the
performance by SpinCo of its obligations hereunder and
thereunder have been duly and validly authorized by all
necessary corporate action on the part of SpinCo. Each of
this Agreement and the Distribution Contract has been
duly executed and delivered by a duly authorized officer
of SpinCo and constitutes the legal, valid and binding
obligation of SpinCo enforceable against SpinCo in
accordance with its terms (subject to all applicable
bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws affecting
creditors' rights generally and subject, as to
enforceability, to general principles of equity).
(iii) The execution and delivery of this Agreement
and the Distribution Contract by SpinCo, and the
performance by SpinCo of its obligations hereunder and
thereunder, does not conflict with or result in a
violation of the corporate laws of the State of Georgia,
or the Certificate of Incorporation or by-laws of SpinCo.
(f) The Program and Digitization Agreement (as
defined in the LMC Agreement) shall be in full force and
effect, subject to satisfaction of the conditions set forth
therein.
(g) SpinCo shall have received any material third
party consents, approvals and authorizations necessary to
cause the effectiveness of the Distribution Contract.
(h) Subject to Section 15(b), if an Exercise Notice
shall have been delivered on or prior to June 1, 1997, Holdco
shall have received the Disclosure Letter from SpinCo at least
10 days prior to the scheduled Closing Date and shall be
reasonably satisfied with the contents thereof and of all
attachments thereto.
If an Exercise Notice shall have been delivered by
Holdco after June 1, 1997, (i) Holdco shall have received, as
contemplated by Section 11(b)(vii), the revised Disclosure
Letter from SpinCo at least 10 days prior to the scheduled
Closing Date and (ii) Holdco shall be reasonably satisfied
with the contents of the revised Disclosure Letter and of all
attachments thereto, to the extent (and only to the extent)
that such contents and attachments differ in any material
respect from the initial Disclosure Letter
delivered to Holdco pursuant to Section 11(b)(vii), and
provided that the incurrence by SpinCo, TCITP and/or any of
their respective subsidiaries of indebtedness for borrowed
money, whether or not secured (unless secured in contravention
of Section 11(b)(vi)(C)), shall not be a reasonable basis for
Holdco's dissatisfaction under this Section 8(h).
(i) Subject to Section 15(b), if an Exercise Notice
shall have been delivered on or prior to June 1, 1997, Holdco
shall be reasonably satisfied with the results of its due
diligence investigation provided for in Section 11(b)(ii).
9. Conditions to Obligation of SpinCo. The
obligation of SpinCo to consummate the Closing is also subject
to the satisfaction, prior to or on the Closing Date, of each
of the following conditions (unless waived by SpinCo):
(a) Holdco shall have performed in all material
respects all its obligations hereunder which are required to
be performed prior to the Closing Date.
(b) No petition or similar document shall have been
filed by or with respect to Holdco under any bankruptcy,
insolvency or similar law.
(c) SpinCo shall have received an opinion of counsel
to Holdco (which counsel may be an employee of Holdco),
reasonably acceptable to SpinCo, addressed to SpinCo and dated
the Closing Date, to the effect that:
(i) Holdco is a corporation duly organized, validly
existing and in good standing under the laws of its
jurisdiction of incorporation. Holdco has all requisite
corporate power and authority to perform its obligations
under this Agreement, the Distribution Contract and the
Registration Rights Agreement and to consummate the
transactions contemplated hereby and thereby.
(ii) The performance by Holdco of its obligations
under this Agreement, the Distribution Contract and the
Registration Rights Agreement, and the consummation by
Holdco of the transactions contemplated hereby and
thereby have been duly and validly authorized by all
necessary corporate action on the part of Holdco. Each
of this Agreement, the Distribution Contract and the
Registration Rights Agreement constitutes the legal,
valid and binding obligation of Holdco enforceable
against Holdco in accordance with its terms (subject to
all applicable bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws
affecting creditors' rights generally and subject, as to
enforceability, to general principles of equity, and
except that the indemnification obligations set forth in
Section 8 of the Registration Rights Agreement may be
subject to considerations of public policy).
(iii) The performance by Holdco of this Agreement,
the Distribution Contract and the Registration Rights
Agreement does not conflict with or result in a violation
of the General Corporation Law of the State of Delaware,
or the certificate of incorporation or by-laws of Holdco.
(d) SpinCo shall have received a certificate from an
officer of Holdco (i) to the effect that Holdco has complied,
in all material respects, with all its obligations under this
Agreement, the Distribution Contract and the Registration
Rights Agreement, (ii) as to the incumbency of certain
officers of Holdco, (iii) as to the satisfaction of the
conditions to Closing set forth in Section 5 (with respect to
the representations and warranties of Holdco contained
therein), Section 6(b) and Section 6(c), (iv) attaching all
resolutions of Holdco's board of directors authorizing the
transactions contemplated by this Agreement, and (v) any other
customary matters as may be reasonably requested by SpinCo.
10. Termination. (a) Subject to the last two
sentences of Section 14 with respect to the survival of
certain provisions, each of LMC's, SpinCo's and Holdco's
rights and obligations under this Agreement (including with
respect to the option granted hereunder, whether or not
exercised) will terminate on the earliest to occur of the
following:
(i) if Holdco shall deliver an Exercise Notice on or
before June 1, 1997 (subject to extension as provided in
Section 15(b)), the earlier of (A) the sixth anniversary
of the Execution Date and (B) the conversion of WTBS to a
copyright-paid programming service;
(ii) if Holdco shall deliver an Exercise Notice
after June 1, 1997 (subject to extension as provided in
Section 15(b)), but before the sixth anniversary of the
Execution Date, 60 days after the date of such Exercise
Notice; and
(iii) if Holdco shall not theretofore have delivered
an Exercise Notice, the earlier of (A) the sixth
anniversary of the Execution Date and (B) the conversion
of WTBS to a copyright-paid programming service;
provided in each case that the Closing has not occurred on or
prior to such earliest date (the "Termination Date").
Notwithstanding the foregoing, if (following the delivery of a
timely Exercise Notice) as a result of any action or failure
to act by any unrelated third party, including any
Governmental Entity, the conditions to the Closing have not
been satisfied in full on or prior to the Termination Date,
the "Termination Date" shall be extended to the earlier of (i)
five business days after the date as of which all such
conditions have been satisfied in full and (y) the first
anniversary of the date of such Exercise Notice.
(b) The termination of this Agreement will in no way
limit any obligation or liability of any Party based on or
arising from a breach or default by such Party prior to such
termination with respect to any of its representations,
warranties or agreements contained in this Agreement, the
Distribution Contract or the Registration Rights Agreement.
11. Covenants. (a) Covenants of Each Party. If the
Contract Option is exercised each of SpinCo (or, if prior to
the Spin-off, LMC and SpinCo) and Holdco agree to use its
commercially reasonable efforts to cause the conditions to the
Closing described in Sections 7, 8 and 9 to be satisfied as
promptly as practicable following such exercise.
(b) Covenants of LMC and SpinCo.
(i) Disposition of Shares. During the period from
the Execution Date through the earlier to occur of the
Grant Date or the Termination Date, LMC shall not
transfer or otherwise dispose of any of the Shares (other
than a transfer of all, but not less than all, the Shares
to any member of the affiliated group (within the meaning
of Section 1504(a) of the Code) of
which LMC is (at the time of such transfer or
disposition) a member; provided that (A) such transferee
is, at the time of such transfer or disposition, a
Liberty Party (as defined in the LMC Agreement) and (B)
the transferee agrees to be bound by this Agreement and
the provisions of the Distribution Contract to the same
effect as LMC); provided further that LMC shall be
entitled to pledge or otherwise hypothecate the Shares in
connection with the incurrence of bona fide indebtedness
to the extent that the applicable pledgee of the Shares
agrees to be bound by the terms of this Agreement.
(ii) Access. Subject to Section 15(b), (A) during
the period from the Execution Date until and including
June 1, 1997, and (B) during the sixty-day period
following the delivery of any Exercise Notice (including
an Exercise Notice delivered on or prior to June 1,
1997), LMC and SpinCo shall give Holdco and its
representatives, employees, counsel and accountants
reasonable access, during normal business hours and upon
reasonable notice, and subject to, as applicable, LMC's
and SpinCo's obligations under any then existing
confidentiality or non-disclosure agreements, to the
personnel, properties, books and records of the Business
to the extent in their possession or control, so that
Holdco may confirm the satisfaction of all conditions
precedent to its obligations to be performed hereunder on
the Closing Date; provided, however, that such access
does not unreasonably disrupt the normal operations of
LMC or SpinCo. As against Holdco and its representatives,
employees, counsel and accountants, each of LMC and
SpinCo hereby waives any confidentiality or
non-disclosure covenants contained for its benefit in any
agreement concerning the Business (including any WTBS
service agreements or arrangements) and it agrees to
execute any acknowledgements with respect to such waiver
as Holdco may reasonably request. Each of LMC and SpinCo
agree to use commercially reasonable efforts in good
faith to obtain all waivers and consents necessary under
any existing confidentiality or non-disclosure agreement
to afford full access to Holdco with respect to the
Business; provided, however, that nothing in this
Agreement shall require LMC or SpinCo (or any of their
respective Affiliates) (x) to agree to any material
modification or amendment to any agreement between any of
them or any such Affiliate and any third party, or
any other onerous or burdensome condition or requirement
or (y) to make any payment of money or deliver any other
consideration to any third party, as a condition to the
receipt of any waiver or consent hereunder. On the
Execution Date and upon Holdco's delivery of the Exercise
Notice, SpinCo shall also give Holdco a list of the WTBS
Distributors (as defined in Section 24). During the
period from the Execution Date through the earlier to
occur of the Closing Date or the Termination Date, if
SpinCo proposes to enter into any agreement with a WTBS
Distributor or other third party, which agreement will
contain a confidentiality or non-disclosure covenant
relating to the existence, terms and/or conditions of any
material agreement to which it is or will be a party, or
any other material matter relating to the Business,
SpinCo shall use commercially reasonable efforts in good
faith to negotiate a provision in such agreement or
covenant to permit it to disclose the matters subject to
such confidentiality or non-disclosure agreement to
Holdco and its representatives, employees, counsel and
accountants; provided, however, that nothing in this
Agreement shall require LMC or SpinCo (or any of their
respective Affiliates) (x) to agree to any material
concession, condition or other provision in any agreement
that, in their good faith business judgment, is in any
respect materially less favorable to it or the Business
than the comparable provision that could have been
negotiated by it if this sentence did not apply or (y) to
make any payment of money or deliver any other
consideration to any third party, as a condition to
receipt of any provision permitting any disclosure to
Holdco or any such other person.
(iii) Ordinary Conduct. During the period from the
Execution Date through the earlier to occur of the
Closing Date or the Termination Date, SpinCo shall
operate the Business in the ordinary course in
substantially the same manner as currently conducted
except for such changes in the day-to-day operations of
the Business as the management of SpinCo (or, if prior to
the Spin-off, the management of LMC and SpinCo), in the
good faith exercise of their business judgment, shall
from time to time determine to be in the best interests
of the Business. In that connection, SpinCo shall use its
commercially reasonable efforts to preserve the Business'
relationships with customers, suppliers and others with
whom SpinCo deals with
respect to the Business. In addition, SpinCo shall not
take any action that could reasonably be expected to
materially impair the business, assets and financial
condition of the Business at the time of the
effectiveness of the Distribution Contract (provided that
SpinCo shall be permitted to discontinue the operations
of the Business if because of an act of God, significant
change in law or other occurrence, it would not be
commercially reasonable to continue such operations). In
connection, with its obligation to operate in the
ordinary course, SpinCo shall not cease to be a private
carrier with respect to the Business, as conducted
domestically in the U.S., without the prior written
consent of Holdco, which shall not unreasonably be
withheld or delayed; provided, however, that such consent
may be withheld by Holdco in its sole discretion if it
determines that such action impairs the availability of
the exception under 17 U.S.C. ss.111(a)(3). Holdco agrees
that it and its Affiliates will not assist any third
party in competing against SpinCo in uplinking the WTBS
broadcast signal.
(iv) [Reserved.]
(v) Insurance. At all times during the period from
the Execution Date through the earlier of the Closing
Date and the Termination Date, SpinCo shall maintain in
full force and effect (through one or more Affiliates or
otherwise), insurance policies meeting the requirements
of Section 6(a)(vi).
(vi) Mergers; Business Transfer; Security
Arrangements. (A) SpinCo shall not merge with another
corporation or other entity unless SpinCo is the
surviving entity in such merger or the surviving entity
delivers to Holdco prior to such merger an agreement (in
form and substance reasonably satisfactory to Holdco and
its counsel) pursuant to which it agrees to be bound by
the terms of this Agreement and the Distribution
Contract.
(B) SpinCo shall not sell, transfer or
otherwise dispose of the Business (other than any
security interest granted in connection with a
SpinCo financing covered by clause (C) below)
unless (1) Spinco sells, transfers or otherwise
disposes of the Business in its entirety and (2)
the entity or person so acquiring the Business
prior to such acquisition delivers to Holdco an
agreement (in form and substance reasonably
satisfactory to Holdco and its counsel) pursuant to
which it agrees to be bound by the terms of this
Agreement and the Distribution Contract.
(C) SpinCo shall not grant or permit to exist
any lien or other security interest on the assets
of the Business (including the Distribution
Contract and its WTBS service agreements) in
connection with any SpinCo financing unless the
secured party or parties prior to any such grant
agree in writing, for the benefit of Holdco, that
(1) any foreclosure or sale of the Business shall
involve the foreclosure or sale of the Business in
its entirety and (2) as a condition to such
foreclosure or sale, the entity or person so
acquiring the Business shall be required to deliver
to Holdco, prior to such acquisition, an agreement
(in form and substance reasonably satisfactory to
Holdco and its counsel) pursuant to which it agrees
to be bound by the terms of this Agreement and the
Distribution Contract.
(D) In the event that SpinCo or, prior to the
Spin-off, LMC receives any proposal with respect
to, or determines to enter into any transaction
involving, any of the events described in this
paragraph (vi), SpinCo and LMC shall promptly
notify Holdco thereof.
(vii) Disclosure Letter and Closing Schedules. If,
subject to Section 15(b), Holdco delivers an Exercise
Notice on or prior to June 1, 1997, SpinCo shall as soon
as practicable after such delivery (and in any event not
later than 10 days prior to the Closing Date) prepare and
deliver to Holdco the Disclosure Letter and all required
schedules to this Agreement that have not previously been
delivered. If Holdco shall have not delivered an Exercise
Notice on or prior to June 1, 1997, SpinCo shall as soon
as practicable after such date (but in any event not
later than June 16, 1997) deliver to Holdco the
Disclosure Letter and all required schedules to this
Agreement as of such date. If thereafter Holdco delivers
an Exercise Notice, Spinco shall as soon as practicable
after such delivery (and in any event not later than ten
days prior to the Closing Date) prepare and deliver to
Holdco a revised
Disclosure Letter and all required schedules to this
Agreement that have not previously been delivered.
(viii) Supplemental Disclosure. SpinCo shall
promptly notify Holdco of, and furnish Holdco any
information it may reasonably request with respect to,
the occurrence to its knowledge of any event or condition
or the existence to its knowledge of any fact that causes
any of the conditions to Holdco's obligation to cause the
effectiveness of the Distribution Contract not to occur;
provided, however, that no such notification shall be
required with respect to any representation or warranty
of LMC or SpinCo hereunder prior to delivery of the
Disclosure Letter.
(ix) Restricted Activities; SpinCo Obligations. Each
of LMC and SpinCo covenants and agrees with Holdco as
follows:
(A) During the period from the Execution Date
through the earlier of the Closing Date and the
Termination Date, each of LMC and SpinCo shall not
(and each shall cause its Affiliates not to) engage
in the Business, other than through SpinCo.
(B) If the Closing Date occurs, during the
period from the Closing Date through the fifth
anniversary of the termination of the last service
agreement between SpinCo and any MVPD (as defined
in Section 24), LMC shall not, and shall cause its
Affiliates not to, engage in the Business (other
than through SpinCo). If the Closing Date occurs,
during the period from the Closing Date through the
Termination Date (as defined in the Distribution
Contract) LMC shall not, directly or indirectly
(including through any Affiliate), solicit any MVPD
to terminate carriage of the WTBS programming
service (including the programming of the broadcast
television SuperStation known on the Execution Date
as WTBS and any cable programming network
established as the successor thereto) or, except as
contemplated by the Distribution Contract, to
terminate any service agreement with SpinCo with
respect to such programming service; provided,
however, that the provisions of this sentence shall
not apply with respect to any MVPD that enters into
a WTBS programming agreement with Holdco. By way of
example, and without limiting the generality of the
foregoing,
it is understood that the offering of WTBS as a
distant broadcast signal (other than through
SpinCo) violates the restrictions of this
subparagraph (B).
Anything contained herein to the contrary
notwithstanding, Holdco acknowledges (I) that LMC
and its Affiliates represent numerous programming
services that are marketed, distributed and sold to
MVPDs on a continuous basis, in competition with
WTBS and other programming services, (II) that due
to limited channel capacity, an MVPD must often
terminate an existing programming service carried
by such MVPD in order to carry a new programming
service, and (III) that activities conducted by LMC
and its Affiliates in connection with the marketing
of programming services that compete with WTBS
shall not be construed to violate LMC's covenant in
this Section, even if an MVPD terminates carriage
of WTBS to carry a programming service marketed by
LMC or any of its Affiliates, unless LMC or such
Affiliate shall have urged or induced such MVPD to
drop WTBS.
(C) If the Closing Date occurs prior to the
consummation of the Spin-off, then, so long as
SpinCo is LMC's Controlled Affiliate (as defined in
the LMC Agreement), LMC shall cause SpinCo to
comply with its obligations under this Agreement
and the Distribution Contract, including the
provisions of Section 3 thereof.
(D) If the Closing Date occurs, then prior to
and after consummation of the Spin-off, LMC shall
provide Holdco and its representatives reasonable
access, on a basis comparable to the access
provided by SpinCo pursuant to Section 2(d) of the
Distribution Contract, to any records of LMC
relating to the Business prior to the Spin-off to
confirm amounts payable to SpinCo after the Closing
Date pursuant to the Distribution Contract.
(c) Confidentiality. Until the Closing Date (or if
the Closing does not occur, until the second anniversary of
the Termination Date) Holdco agrees to use the same efforts
that it uses with respect to its own confidential and
proprietary information to retain in strict confidence all
proprietary and confidential information concerning the
Business or SpinCo which is conveyed to it by LMC, SpinCo or
any of their Affiliates, or any representative of LMC, SpinCo
or any of their Affiliates ("Confidential
Information"). Notwithstanding the foregoing, the term
"Confidential Information" does not include: (i) information
which is, at the time of its disclosure to Holdco or any
Affiliate of Holdco or their respective representatives,
already in Holdco's, its Affiliates' or their representatives'
possession (without violation, to Holdco's knowledge, of any
legally enforceable confidentiality agreement with LMC, SpinCo
or any of their Affiliates relating to such information), (ii)
information which is or becomes available to the public other
than as a result of a disclosure by Holdco or any Affiliate of
Holdco or their respective representatives, (iii) information
which was or becomes available to Holdco or any Affiliate of
Holdco or their respective representatives on a
non-confidential basis from a source other than LMC, SpinCo,
any of their Affiliates or their respective representatives
(provided that information contained in any agreement with
respect to the Business obtained solely as a result of the
confidentiality waiver in Section 11(b)(ii) shall not be
considered to be obtained on a non-confidential basis);
provided that such source was not known by Holdco to be bound
by the terms of a legally enforceable confidentiality
agreement with LMC, SpinCo or any of their Affiliates relating
to such information, (iv) information which is information
that is independently developed by Holdco or its Affiliates or
their respective representatives or (v) any oral information,
unless such information is stated to be proprietary and
confidential at the time of disclosure and such statement and
information is summarized in writing within 30 days after such
disclosure. In the event that Holdco, any of its Affiliates or
any of their respective representatives is requested or
required (by oral questions, interrogatories, requests for
information or documents, subpoena, civil investigative demand
or other process) to disclose any Confidential Information, it
is agreed that Holdco will provide SpinCo and, prior to the
Spin-off, LMC with prompt notice of any such request or
requirement (written if practical) so that LMC and/or SpinCo
may seek at its own expense an appropriate protective order or
waive Holdco's compliance with the provisions of this Section
11(c). If, failing the entry of a protective order or the
receipt of a waiver hereunder, Holdco, any of its Affiliates
or any of their respective representatives is, in the opinion
of its counsel, compelled to disclose any Confidential
Information, Holdco or such Affiliate or representative may
disclose that portion of any Confidential Information which
its counsel advises that it is compelled to disclose and will
upon written request and at the expense
of LMC and/or SpinCo use reasonable efforts to cooperate in
LMC's and/or SpinCo's efforts to obtain a protective order or
other reasonable assurance that confidential treatment will be
accorded to that portion of such Confidential Information
which is being disclosed. Holdco will use the Confidential
Information only in connection with its due diligence review
of the Business and SpinCo, as contemplated by this Agreement
and will not otherwise use it in its business or disclose it
to others, except to its employees, representatives and
Affiliates (and their employees and representatives) who
require such Confidential Information to perform their duties
in connection with, or exercise Holdco's rights under, this
Agreement and agree not to disclose or use such Confidential
Information except as provided herein. Holdco agrees that it
shall be responsible for any breach of this Section 11(c) by
such persons. In the event that the Closing does not occur
under this Agreement, Holdco shall, at its option, either (i)
return all Confidential Information provided or made available
to it hereunder relating to the Business and SpinCo, whether
in written, computer-readable or other form, together with all
copies thereof in the possession of Holdco or (ii) destroy all
such Confidential Information and certify such destruction to
LMC and SpinCo; provided, however, that Holdco's sole
obligation with respect to the disposition of any internal
notes, memoranda or other materials prepared by it that
incorporate any Confidential Information shall be to redact or
otherwise expunge all such Confidential Information from such
materials.
(d) Covenant by Satellite Relating to Carriage of
WTBS. During the period from the Execution Date through the
earlier of the Closing Date and the Termination Date, provided
that Holdco or any Managed Subsidiary of Holdco then owns the
programming service currently known as "WTBS" (as it may be
renamed in the future) ("WTBS"), Satellite shall cause each of
its affiliates (as such term is defined in Section 1(a) of
Satellite's existing affiliation agreement, dated as of July
15, 1992, with The Cartoon Network, Inc., a copy of the
pertinent provisions of which was attached to a letter dated
as of October 2, 1995, from Baker & Botts, L.L.P., counsel to
LMC, to Peter R. Haje, the general counsel of Holdco) (and
each affiliate of any other intermediary (as contemplated by
the second sentence of the definition of "Business" in Section
24(b))) that carries WTBS, and each other entity to which
Satellite (or such other intermediary) provides (or arranges
for the provision of) the WTBS signal, to carry the WTBS
signal transmitted by
SpinCo (provided that SpinCo is able to transmit such signal),
it being understood that nothing in this Agreement shall
prohibit any such affiliate or other person or entity from
deleting carriage of the WTBS signal transmitted by SpinCo,
provided that upon such deletion such affiliate or other
person or entity does not carry the WTBS signal from any other
source (it being understood that nothing in this Section 11(d)
shall limit the effects of the "HITS" provisions of the
Program and Digitization Agreement with respect to the
carriage of the WTBS signal, or the rights and obligations of
the parties thereunder, when those provisions become effective
in accordance with their terms).
(e) Acknowledgement by SpinCo and LMC. Each of
SpinCo and LMC acknowledges and agrees for itself and each of
its Affiliates that, from and after the closing of the Mergers
(as defined in the LMC Agreement), (i) Holdco intends to (and
may) communicate directly with MVPDs (including MVPDs that are
WTBS Distributors) regarding the transformation of WTBS into a
copyright-paid, satellite delivered, twenty-four-hour-per-day
cable television programming service and (ii) Holdco intends
to (and may) communicate with WTBS Distributors about (x) the
terms of a new WTBS distribution contract or arrangement
directly with Holdco or any of its Managed Subsidiaries
(conditioned on transformation of WTBS to such a
copyright-paid service) and (y) the possible termination of
their existing contracts or arrangements with SpinCo (upon
transformation of WTBS to a copyright-paid service), and
Holdco intends to (and may) enter into agreements with WTBS
Distributors with respect to the foregoing (conditioned upon
the transformation of WTBS to a copyright-paid service), all
without creating any liability to SpinCo, LMC or any of their
respective Affiliates. Neither Spinco, LMC nor any of their
respective Affiliates will discourage any MVPD from engaging
in any such conversations or negotiations with Holdco or its
Affiliates with respect to the converted WTBS program service
or discourage any MVPD from entering into any such contracts
or arrangements with respect to the converted WTBS program
service.
(f) Holdco's Right to Assign Program and
Digitization Agreement to Managed Subsidiaries. LMC, SpinCo
and Satellite hereby acknowledge and agree that, from and
after the closing of the Mergers (as defined in the LMC
Agreement), the rights (but not the obligations) of TBS under
the Program and Digitization Agreement attached hereto as
Exhibit 2 (the "Program and Digitization Agreement"),
between TBS and Satellite with respect to the carriage of the
copyright-paid WTBS service may be assigned to any Managed
Subsidiary, provided that any such assignment shall terminate
if the assignee ceases to be a Managed Subsidiary. This
Section 11(f) shall survive the exercise of the Contract
Option and any termination of this Agreement.
(g) Non-Exclusive Right to Digitize, Compress and
Reuplink. Reference is made to the "HITS" provisions of the
Program and Digitization Agreement. The Parties hereby consent
to any action taken by Satellite during the term of this
Agreement that would be permitted by such provisions of the
Program and Digitization Agreement, as if such agreement were
then in effect with respect to WTBS prior to its conversion to
a copyright-paid service and (i) all references therein to
"TBS" referred to SpinCo, (ii) all references therein to "TBS
services" referred to WTBS, and (iii) the reference in the
third line to "licensed by TBS" meant "authorized by SpinCo
pursuant to contractual relationships". In that connection,
and on the same basis, Satellite shall comply with the
obligations required to be performed by Satellite in such
"HITS" provisions.
12. [Reserved.]
13. [Reserved.]
14. Survival. The representations, warranties and
agreements of the Parties in this Agreement and in the other
documents and instruments to be delivered by any Party
pursuant to this Agreement will continue in full force and
effect from the time made or deemed to have been made until
the Closing, whereupon such representations, warranties and
agreements shall terminate. Notwithstanding any other
provision of this Agreement, the tax representations and
warranties in Section 4(b)(i), and the representations and
warranties of Holdco contained in Sections 4(c)(i) and (ii)
and Sections 6(b)(i) and (ii) shall survive the Execution
Date, the Closing and the termination of this Agreement
pursuant to Section 10 and shall continue in full force and
effect indefinitely. In addition, the provisions of Section
2(f) and Section 11(b)(ix) shall survive the Execution Date,
the Closing and the termination of this Agreement pursuant to
Section 10 and shall survive in accordance with their terms.
15. Parties Obligated and Benefited; LMC's Right to
Designate Recipient; Other Transaction. (a) Subject to
the limitations set forth below, this Agreement will be
binding upon the Parties and their respective assigns and
successors in interest and will inure solely to the benefit of
the Parties and their respective assigns and successors in
interest, and no other person will be entitled to any of the
benefits conferred by this Agreement. Without the prior
written consent of the other Party, no Party will assign any
of its rights or delegate any of its duties under this
Agreement or the Distribution Contract, except: (i) LMC may
assign (without the consent of Holdco) any of its rights
(including, without limitation, the right to receive the
Section 2 payment for the non-competition agreement in Section
11(b)(ix) to any person that, at the time of such assignment
(and, in the case of any such person designated to receive
such payment, at the payment date), is (A) a Liberty Party (as
defined in the LMC Agreement) and (B) a member of the
affiliated group (within the meaning of Section 1504(a) of the
Code) of which LMC is (at such time) a member; (ii) by
operation of law; and (iii) with respect to any merger of
SpinCo or sale or disposition of the Business, in each case,
permitted under Section 11(b)(vi).
(b) If, as contemplated by Section 2, the Letter
Ruling shall have not been obtained by May 31, 1997 or TCI
shall have been advised or have determined that it will not
obtain the Letter Ruling (or, that it will not obtain the
Letter Ruling unless TCI and the other parties thereto agree
to changes in the transactions contemplated by the LMC
Agreement and the Additional Agreements (as defined in the LMC
Agreement) or any other conditions imposed as a prerequisite
by the Internal Revenue Service), the Parties agree that (i)
notwithstanding the provisions of Section 2, the Grant Date
shall be postponed for 30 days during which period the Parties
shall mutually endeavor in good faith to negotiate the
consummation of a transaction that is more tax efficient to
both Parties and (ii) the references to June 1, 1997, in this
Agreement (including as they relate to the definition of the
Termination Date, Holdco's delivery of an Exercise Notice,
Holdco's conditions to Closing, Holdco's access to the
Business and SpinCo's delivery of the Disclosure Letter and
related schedules) shall be automatically extended to the
date, if later than June 1, 1997, that is five days after the
termination of the discussions contemplated by this Section
15(b).
16. Notices. Any notice, request, demand, waiver or
other communication required or permitted to be given under
this Agreement will be in writing and will be deemed
to have been duly given only if delivered in person or by
first class, postage prepaid, registered or certified mail, or
sent by courier or, if receipt is confirmed, by telecopier:
If to Holdco:
Time Warner Inc.
75 Rockefeller Plaza
New York, New York 10019
Attention: President
with a copy similarly addressed to the attention
of General Counsel
with a copy (which shall not constitute notice)
to:
Cravath, Swaine & Moore
Worldwide Plaza
825 Eighth Avenue
New York, New York 10019
Attention: William P. Rogers, Jr., Esq.
If to LMC:
Liberty Media Corporation
8101 East Prentice Avenue
Suite 500
Englewood, Colorado 80111
Attention: President
with copies (which shall not constitute notice)
to:
Stephen M. Brett, Esq.
General Counsel
Tele-Communications, Inc.
Terrace Towers II
5619 DTC Parkway
Englewood, Colorado 80111-3000
and
Baker & Botts, L.L.P.
599 Lexington Avenue
Suite 2800
New York, New York 10022
Attention: Elizabeth Markowski, Esq.
If to SpinCo:
Southern Satellite Systems, Inc.
8101 East Prentice Avenue
Suite 500
Englewood, Colorado 80111
Attention: President
with copies (which shall not constitute notice)
to:
Stephen M. Brett, Esq.
General Counsel
Tele-Communications, Inc.
Terrace Towers II
5619 DTC Parkway
Englewood, Colorado 80111-3000
(but only prior to the Spin-off)
and
Baker & Botts, L.L.P.
599 Lexington Avenue
Suite 2800
New York, New York 10022
Attention: Elizabeth Markowski, Esq.
Any party may change the address to which notices are required
to be sent by giving notice of such change in the manner
provided in this Section 16. All notices will be deemed to
have been received on the date of delivery or on the fifth
business day after mailing in accordance with this Section,
except that any notice of a change of address will be
effective only upon actual receipt.
17. Waiver. This Agreement or any of its provisions
may not be waived except in writing. The failure of any Party
to enforce any right arising under this Agreement on one or
more occasions will not operate as a
waiver of that or any other right on that or any other
occasion.
18. Interpretation. The section captions of this
Agreement are for convenience only and do not constitute a
part of this Agreement. When a reference is made in this
Agreement to a Section or Exhibit such reference shall be to a
Section of, or an Exhibit to, this Agreement, unless otherwise
indicated. Whenever the words "include", "includes" or
"including" are used in this Agreement, they shall be deemed
to be followed by the words "without limitation".
19. Choice of Law. This Agreement and the rights of
the Parties under it will be governed by and construed in all
respects in accordance with the laws of the State of New York
applicable to contracts made and performed wholly therein.
20. Time. If the last day permitted for the timing
of any notice or the performance of any act required or
permitted under this Agreement falls on a day which is not a
business day, the time for the giving of such notice or the
performance of such act will be extended to the next
succeeding business day.
21. Counterparts. This Agreement may be executed in
one or more counterparts, each of which will be deemed an
original but all of which together shall constitute a single
instrument.
22. Entire Agreement. This Agreement (including all
Exhibits and Schedules attached to this Agreement, the
Distribution Contract, the Registration Rights Agreement, the
LMC Agreement and the agreements referenced herein and
therein, each of which shall be deemed to constitute a part of
this Agreement) contains the entire agreement of the Parties,
and supersedes all prior oral or written agreements and
understandings with respect to the subject matter hereof. This
Agreement may not be amended or modified except by a writing
signed by the Parties.
23. Severability. Any term or provision of this
Agreement which is held to be invalid or unenforceable in any
jurisdiction, as to such jurisdiction, will be ineffective
only to the extent of such invalidity or unenforceability
without rendering invalid or unenforceable the remaining terms
and provisions of this Agreement or
affecting the validity or enforceability of any of the terms
or provisions of the Agreement in any other jurisdiction, and
in the event any provision of this Agreement is held to be
invalid or unenforceable in any jurisdiction, such provision
will be reformed with respect to, and enforced as fully as
possible in, such jurisdiction, consistent (to the extent
possible) with the purposes and intents of the parties
expressed herein.
24. Certain Definitions. As used in this Agreement,
the following terms have the corresponding meanings:
(a) An "Affiliate" of a person means another person
that directly or indirectly, through one or more
intermediaries, controls, is controlled by, or is under common
control with, such first person;
(b) "Business" means the business of uplinking and
distributing to MVPDs the signal of the television station
broadcasting on the date hereof in Atlanta, Georgia under the
call letters WTBS, and any successor over-the-air television
station in Atlanta, Georgia that broadcasts substantially
similar programming as WTBS following its conversion to a
copyright-paid programming service (as such converted service
may be renamed); provided that the Business shall refer to the
business of uplinking and distributing only one such broadcast
television station at any one time. Anything contained herein
to the contrary notwithstanding, neither (i) the existence of
an agreement between SpinCo or any unrelated third party and
any intermediary (such as Satellite and/or Netlink USA)
pursuant to which such intermediary arranges for the WTBS
signal transmitted by SpinCo or such unrelated third party to
be received by an "affiliate" of such intermediary as defined
in Section 11(d) of this Agreement (or an analogous
definition, if the intermediary is not Satellite), and any
other person to whom such intermediary is authorized to
arrange for the transmission of such signal, as contemplated
by Section 11(d), nor (ii) any activities by any intermediary
of the type contemplated by Section 11(g) hereof, shall in
itself (A) cause such an intermediary to be construed as
engaging in the "Business" as defined herein or (B) cause such
an intermediary to be in violation of the restrictions of
Section 4 pursuant to the last sentence of the first paragraph
thereof;
(c) "Current Market Price", as of any date, means
the average of the daily closing prices for the shares of the
Holdco Common Stock for the 20 trading day period ending on
the full trading day immediately prior to the date in
question, appropriately adjusted to take into account any
stock dividends, splits, reverse splits, combinations and the
like, the ex-dividend date or effective date for which occurs
during (but after the first day of) such 20 trading day
period. The closing price for each trading day shall be the
last reported sale price on such day (or if no such reported
sale takes place on such day, the average of the reported
closing bid and asked prices) of the Holdco Common Stock
(regular way) as shown on the Composite Tape of the New York
Stock Exchange;
(d) "FTC Agreement in Principle" means the Agreement
in Principle with FTC Staff re: Consent Order dated July 16,
1996, entered into by the Federal Trade Commission, Holdco and
TCI;
(e) "FTC Consent Decree" means the Agreement
Containing Consent Order (including the FTC Agreement in
Principle, the "ACCO") dated as of August , 1996, with the
Federal Trade Commission, together with the Order issued in
connection with the ACCO;
(f) "Governmental Entity" means a court,
administrative agency or commission or other governmental
authority or instrumentality;
(g) "Holdco Common Stock" means the Common Stock,
$.01 par value, of Holdco;
(h) "Letter Ruling" means a letter ruling from the
Internal Revenue Service (i) to the effect that, at the time
thereof, the Spin-off shall constitute a tax free distribution
under Section 355 of the Internal Revenue Code of 1986, as
amended, and (ii) that is otherwise acceptable to Holdco and
TCI;
(i) "Liberty Subsidiaries" means TCI Turner
Preferred, Inc., Liberty Broadcasting, Inc., United Cable
Turner Investment, Inc. and Communication Capital Corp.;
(j) "Managed Subsidiary" means, as to Holdco, an
Affiliate of Holdco (i) in which Holdco has, directly or
indirectly, a majority ownership interest and (ii) as to which
Holdco has day-to-day management control, specifically
including, without limitation, as of the date hereof, Time
Warner Entertainment Company L.P. and Time Warner
Entertainment Advance Newhouse Partnership;
(k) "Material Adverse Effect" means, as to any
person, a material adverse effect on the business, assets,
financial condition or results of operations of such person
and its consolidated subsidiaries, taken as a whole, or on the
ability of such person to perform its obligations under any of
the Relevant Agreements to which it is a party;
(l) "MVPDs" means all cable, MMDS, LMDS, TVRO, DBS,
video dial tone and/or other distributors of multichannel
video programming by any means;
(m) "Ordinary Course Guidelines" means the general
guidelines with respect to the operation of the Business of
SpinCo as set forth on Exhibit 3 hereto;
(n) "Spin-off" means the distribution by TCI of 100%
of the capital stock of SpinCo to holders of record of TCI's
Tele-Communications, Inc. Series A Liberty Media Group Common
Stock and Tele-Communications, Inc. Series B Liberty Media
Group Common Stock;
(o) "Taxing Authority" shall mean any Federal,
state, local or foreign court or governmental agency,
authority, instrumentality or regulatory body.
(p) "Tax" shall mean any Federal, state, local and
foreign taxes and assessments, including all interest
penalties and additions imposed with respect to such amounts;
and
(q) "WTBS Distributors" means those persons and
entities with whom SpinCo has an affiliate agreement or other
arrangement or agreement for the distribution of WTBS.
25. Enforcement. The Parties agree that irreparable
damage would occur in the event that any of the provisions of
this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly
agreed that the Parties shall be entitled to seek an
injunction or injunctions to prevent breaches of this
Agreement, and to enforce specifically the terms and
provisions of this Agreement in any court of the United States
located in the States of Colorado, Delaware or New York, or in
Delaware or Colorado state court (in
addition to any other remedy to which they are entitled at law
or in equity). In addition, each of the Parties hereto (a)
hereby consents and submits itself to the non-exclusive
personal jurisdiction of any Federal court located in the
States of Colorado, Delaware and New York or any Delaware or
Colorado state court in the event any dispute arises out of
this Agreement or any of the transactions contemplated by this
Agreement, and (b) agrees that it will not attempt to deny or
defeat such personal jurisdiction by motion or other request
for leave from any such court.
26. No Unauthorized Transfer of Control. Nothing in
this Agreement or the Distribution Contract shall, nor shall
be construed to, constitute a transfer of control of the
licenses held by SpinCo and its subsidiaries without prior
approval by the Federal Communications Commission ("FCC") of
the transfer of all such licenses issued by the FCC to SpinCo
and its subsidiaries. SpinCo shall at all times retain full,
exclusive and absolute control of the licensed facilities as
well as ultimate responsibility for the operation of the FCC
licensed facilities pursuant to all applicable rules and
policies of the FCC and the Communications Act of 1934, as the
foregoing may be superseded or amended.
27. Continuation as Passive Carrier. SpinCo is and
will continue to be a passive carrier, and nothing in this
Agreement or the Distribution Contract shall, nor shall be
construed to, require SpinCo to operate with respect to
carriage of the WTBS signal other than as a passive carrier
pursuant to 17 U.S.C. ss. 111(a)(3) and as a satellite carrier
pursuant to 17 U.S.C. ss. 119(a), prior to the Converted WTBS,
as defined in Section 18 of the Distribution Contract.
IN WITNESS WHEREOF, the Parties have caused this
Agreement to be duly executed and delivered as of the date
first written above.
TW INC.,
By
--------------------------
Name:
Title:
LIBERTY MEDIA CORPORATION,
By
--------------------------
Name:
Title:
SOUTHERN SATELLITE SYSTEMS,
INC.
By
--------------------------
Name:
Title:
With respect to Section 11(d),
Section 11(f) and
Section 11(g) only:
SATELLITE SERVICES, INC.,
By
--------------------------
Name:
Title: