Exhibit
10.1
EXECUTION COPY
AGREEMENT AND PLAN OF
MERGER
Dated as of May 3, 2009
by and among
LIBERTY MEDIA
CORPORATION,
LIBERTY ENTERTAINMENT,
INC.,
THE DIRECTV GROUP, INC.
DIRECTV,
DTVG ONE, INC.,
and
DTVG TWO, INC.
AGREEMENT AND PLAN OF
MERGER
This AGREEMENT AND PLAN OF MERGER,
dated as of May 3, 2009 (this “ Agreement ”), is
by and among LIBERTY MEDIA CORPORATION, a Delaware corporation
(“ Liberty ”), LIBERTY ENTERTAINMENT, INC., a
Delaware corporation and an indirect, wholly-owned Subsidiary of
Liberty (“ Splitco ”), THE DIRECTV GROUP, INC.,
a Delaware corporation (“ DIRECTV ”), DIRECTV, a
Delaware corporation and a direct, wholly-owned Subsidiary of
DIRECTV (“ Holdings ”), DTVG ONE, INC., a
Delaware corporation and a direct, wholly-owned Subsidiary of
Holdings (“ Merger Sub One ”), and DTVG TWO,
INC., a Delaware corporation and a direct, wholly-owned Subsidiary
of Holdings (“ Merger Sub Two ”). Certain terms
used in this Agreement are used as defined in Section
10.10.
WHEREAS, Liberty, directly and
indirectly through its Subsidiaries, is engaged in the Splitco
Business, which is part of Liberty’s Entertainment tracking
stock group (“ Liberty Entertainment
”);
WHEREAS, subject to the receipt of
the Liberty Stockholder Approval, prior to the Split-Off Effective
Time, Liberty will (i) pursuant to the Reorganization Agreement, by
and between Splitco and Liberty, in the form set forth in
Exhibit B hereto (the
“ Reorganization Agreement ”), complete the
Restructuring and (ii) redeem, in accordance with the terms of the
Reorganization Agreement and on a pro rata basis, a portion of the
outstanding shares of its Liberty Entertainment Common Stock in
exchange for all of the outstanding capital stock of Splitco (the
“ Split-Off ”);
WHEREAS, Dr. John C. Malone (“
Dr. Malone ”) and certain related Persons named in the
Malone Agreement, after the consummation of the Split-Off but prior
to the Splitco Merger, will contribute, or cause to be contributed,
all shares of Series B Splitco Common Stock that are owned by them
(the “ Malone Splitco Shares ”) to Holdings in
exchange for shares of Holdings Class B Common Stock in accordance
with the terms and conditions of the Malone Agreement (the “
Malone Contribution ”);
WHEREAS, in accordance with the
terms and conditions hereof, following the consummation of the
Split-Off and the Malone Contribution, the parties intend to
effectuate the Splitco Merger and the DIRECTV Merger, resulting in
both Splitco and DIRECTV becoming wholly-owned Subsidiaries of
Holdings;
WHEREAS, the Board of Directors of
Liberty has approved, and deems it advisable and in the best
interests of Liberty and its stockholders (including the holders of
Liberty Entertainment Common Stock) to consummate the Restructuring
and the Split-Off;
WHEREAS, the Special Committee of
the Board of Directors of DIRECTV has approved, and deems it
advisable and in the best interests of DIRECTV and its stockholders
(other than Liberty, Splitco, Dr. Malone or any of their respective
Affiliates) to consummate, and has recommended that the Board of
Directors of DIRECTV approve, the DIRECTV Merger in which the
issued and outstanding shares of capital stock of DIRECTV (other
than the Liberty DIRECTV Shares and shares owned by DIRECTV) will
be converted into shares of Holdings Common Stock;
WHEREAS, the Board of Directors of
DIRECTV, following receipt of the recommendation of the Special
Committee, has approved, and deems it advisable and in the best
interests of DIRECTV and its stockholders (other than Liberty,
Splitco, Dr. Malone or any of their respective Affiliates) to
consummate, the DIRECTV Merger in which the issued and outstanding
shares of capital stock of DIRECTV (other than the Liberty DIRECTV
Shares and shares owned by DIRECTV) will be converted into shares
of Holdings Common Stock;
WHEREAS, the Board of Directors of
Splitco has approved, and deems it advisable and in the best
interests of Splitco and its sole stockholder to consummate, the
Splitco Merger in which the issued and outstanding shares of
capital stock of Splitco will be converted into the right to
receive shares of Holdings Common Stock;
WHEREAS, in connection herewith,
DIRECTV, Holdings, Splitco, Dr. Malone and the other Persons named
therein have entered into a Voting- and Right of First Refusal
Agreement dated as of the date hereof (the “ Malone
Agreement ”);
WHEREAS, in connection herewith,
Liberty, Greenlady, Greenlady II, LLC, Holdings and DIRECTV have
entered into a Voting, Standstill, Non-Competition and
Non-Solicitation Agreement dated as of the date hereof (the “
Liberty Agreement ”); and
WHEREAS, the Malone Contribution,
the Splitco Merger and the DIRECTV Merger are being undertaken
pursuant to a single, integrated plan and, for federal income tax
purposes, it is intended that (i) the exchange of Splitco Common
Stock and DIRECTV Common Stock for Holdings Common Stock pursuant
to the Mergers and the Malone Contribution, taken together, shall
qualify as exchanges described in Section 351 of the Internal
Revenue Code of 1986, as amended (the “ Code ”);
(ii) the Splitco Merger and the Malone Contribution, taken
together, shall qualify as a reorganization within the meaning of
Section 368(a) of the Code; and (iii) this Agreement shall
constitute a plan of reorganization within the meaning of Treasury
Regulations Section 1.368-2(g).
NOW, THEREFORE, in consideration of
the representations, warranties, covenants and agreements contained
in this Agreement, and intending to be legally bound hereby,
Liberty, Splitco, Holdings, Merger Sub One, Merger Sub Two and
DIRECTV hereby agree as follows:
ARTICLE I
The
Mergers
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SECTION 1.1
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The Mergers .
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(a) Upon
the terms and subject to the conditions set forth in this
Agreement, and in accordance with the General Corporation Law of
the State of Delaware (the “ DGCL ”), at the
DIRECTV Effective Time, Merger Sub One shall be merged with and
into DIRECTV (the “ DIRECTV Merger ”), and
following the DIRECTV Merger the separate corporate existence of
Merger Sub One shall thereupon cease, and DIRECTV shall be the
surviving corporation in the DIRECTV Merger (the “ DIRECTV
Surviving Corporation ”). As a result of the DIRECTV
Merger, DIRECTV shall become a wholly-owned Subsidiary of
Holdings.
(b) Upon
the terms and subject to the conditions set forth in this
Agreement, and in accordance with the DGCL, at the Merger Effective
Time, Merger Sub Two shall be merged with and into Splitco (the
“ Splitco Merger ” and together with the DIRECTV
Merger, the “ Mergers ”), and following the
Splitco Merger the separate corporate existence of Merger Sub Two
shall thereupon cease, and Splitco shall be the surviving
corporation in the Splitco Merger (the “ Splitco Surviving
Corporation ”). As a result of the Splitco Merger,
Splitco shall become a direct wholly-owned Subsidiary of
Holdings.
SECTION
1.2 Closing . The closing of the Mergers (the
“ Closing ”) shall take place at 10:00 a.m. (New
York City time) on a date to be specified by the parties (the
“ Closing Date ”), which date shall be no later
than the second Business Day after satisfaction or waiver of the
conditions set forth in Article VII (other than those conditions
that by their nature are to be satisfied at the Closing, but
subject to the satisfaction or waiver of those conditions at such
time), at the offices of Weil, Gotshal & Manges LLP, 767 Fifth
Avenue, New York, New York 10153, unless another time, date or
place is agreed to in writing by the parties hereto.
SECTION
1.3 Effective Time of the Mergers . Subject to
the provisions of this Agreement, as soon as practicable on the
Closing Date and immediately after the consummation of the Malone
Contribution, the parties shall (and shall cause their Subsidiaries
to) cause the following to occur:
(a) DIRECTV
shall file with the Secretary of State of the State of Delaware a
certificate of merger, in the form required by and executed in
accordance with the relevant provisions of the DGCL (the “
DIRECTV Certificate of Merger ”) and shall make all
other filings or recordings required under the DGCL in connection
with the DIRECTV Merger. The DIRECTV Merger shall become effective
upon the due filing of the DIRECTV Certificate of Merger or at such
later time as is agreed to by the parties hereto and specified in
the DIRECTV Certificate of Merger (the time at which the DIRECTV
Merger becomes effective is herein referred to as the “
DIRECTV Effective Time ”).
(b) Splitco
shall file with the Secretary of State of the State of Delaware a
certificate of merger, in the form required by and executed in
accordance with the relevant provisions of the DGCL (the “
Splitco Certificate of Merger ”) and shall make all
other filings or recordings required under the DGCL in connection
with the Splitco Merger. The parties shall cause the Splitco Merger
to become effective immediately after the DIRECTV Effective Time
(the time at which the Splitco Merger becomes effective is herein
referred to as the “ Merger Effective Time
”).
SECTION
1.4 Effects of the Mergers . The Mergers shall
have the effects set forth herein and in the DGCL. Without limiting
the generality of the foregoing, and subject thereto, (i) at the
DIRECTV Effective Time, all the properties, rights, privileges,
powers and franchises of DIRECTV and Merger Sub One shall vest in
the DIRECTV Surviving Corporation, and all debts, liabilities and
duties of DIRECTV and Merger Sub One shall become the debts,
liabilities and duties of the DIRECTV Surviving Corporation and
(ii) at the Merger Effective Time, all the properties, rights,
privileges, powers and franchises of Splitco and Merger Sub Two
shall vest in the Splitco Surviving Corporation, and all debts,
liabilities and duties of Splitco and
Merger Sub Two shall become the
debts, liabilities and duties of the Splitco Surviving
Corporation.
SECTION
1.5 Certificate
of Incorporation and Bylaws of the DIRECTV Surviving Corporation,
the Splitco Surviving Corporation and Holdings .
(a) At
the DIRECTV Effective Time, the certificate of incorporation of
DIRECTV (the “ DIRECTV Charter ”) and the bylaws
of DIRECTV (the “ DIRECTV Bylaws ”) in effect
immediately prior to the DIRECTV Effective Time shall be the
certificate of incorporation and bylaws of the DIRECTV Surviving
Corporation until thereafter amended as provided therein or by
applicable Law.
(b) At
the Merger Effective Time, the certificate of incorporation of
Splitco (the “ Splitco Charter ”) and the bylaws
of Splitco (the “ Splitco Bylaws ”) in effect
immediately prior to the Merger Effective Time shall be the
certificate of incorporation and bylaws of the Splitco Surviving
Corporation until thereafter amended as provided therein or by
applicable Law.
(c) DIRECTV
shall cause the certificate of incorporation and bylaws of Holdings
to be amended, immediately prior to the Malone Contribution, to
read in their entirety in the forms set forth in Exhibit
A-1 and Exhibit
A-2 hereto,
respectively, and such certificate of incorporation and bylaws
shall be the certificate of incorporation and bylaws of Holdings
until thereafter amended as provided therein or by applicable
Law.
SECTION
1.6 Directors
and Officers of the DIRECTV Surviving Corporation, the Splitco
Surviving Corporation and Holdings .
(a) The
directors of Merger Sub One immediately prior to the DIRECTV
Effective Time shall be, from and after the DIRECTV Effective Time,
the initial directors of the DIRECTV Surviving Corporation, each to
hold office in accordance with the certificate of incorporation and
bylaws of the DIRECTV Surviving Corporation until each such
director’s successor is duly elected and qualified, or until
their earlier death, resignation or removal. The directors of
Merger Sub Two immediately prior to the Merger Effective Time shall
be, from and after the Merger Effective Time, the initial directors
of the Splitco Surviving Corporation, each to hold office in
accordance with the certificate of incorporation and bylaws of the
Splitco Surviving Corporation until each such director’s
successor is duly elected and qualified, or until their earlier
death, resignation or removal.
(b) The
officers of Merger Sub One immediately prior to the DIRECTV
Effective Time shall be the initial officers of the DIRECTV
Surviving Corporation. The officers of Merger Sub Two immediately
prior to the Merger Effective Time shall be the initial officers of
the Splitco Surviving Corporation.
(c) The
directors of DIRECTV immediately prior to the Malone Contribution,
plus one additional independent director to be designated by the
Board of Directors of DIRECTV, shall be, from and after the time
immediately prior to the Malone Contribution, the directors of
Holdings, each to hold office in accordance with the certificate of
incorporation and bylaws of Holdings until each such
director’s successor is duly elected and qualified, or
until
their earlier death, resignation or
removal (the “ Current Board ”); provided
, that, to the extent all of such persons (excluding the one
additional independent director to be designated by the Board of
Directors of DIRECTV) are not the persons who comprise the entire
Board of Directors of DIRECTV as of the date hereof, then, from and
after the time immediately prior to the Malone Contribution, the
directors of Holdings instead shall be comprised of (i) three
individuals that serve on the Board of Directors of Splitco
immediately prior to the Malone Contribution as designated by the
Board of Directors of Splitco, (ii) seven individuals that serve on
the Board of Directors of DIRECTV immediately prior to the Malone
Contribution as designated by the Board of Directors of DIRECTV and
(iii) one additional independent director to be designated by the
Board of Directors of DIRECTV (the “ Alternative Board
”). If the Current Board serves as the Board of Directors of
Holdings from and after the time immediately prior to the Malone
Contribution, then, once classification of the Board of Directors
of Holdings is required pursuant to the certificate of
incorporation of Holdings, such directors shall each hold office in
the corresponding class of directors as such director held at
DIRECTV immediately prior to the Malone Contribution. If the
Alternative Board serves as the Board of Directors of Holdings from
and after the time immediately prior to the Malone Contribution,
then, once classification of the Board of Directors of Holdings is
required pursuant to the certificate of incorporation of Holdings,
such directors shall be apportioned among the classes of directors
in accordance with the certificate of incorporation of Holdings;
provided , that, the three directors designated by the Board
of Directors of Splitco shall be placed in separate classes. The
officers of DIRECTV immediately prior to the DIRECTV Effective Time
shall be, from and after the DIRECTV Effective Time, the officers
of Holdings.
(d) Liberty
and Splitco shall elect, and cause to be elected, the individuals
set forth in Section 1.6(d) of the DIRECTV Disclosure
Schedule to be the
directors of Greenlady, from and after the DIRECTV Effective Time,
each to hold office in accordance with the certificate of
incorporation and by-laws of Greenlady, until each such
director’s successor is duly elected and qualified, or until
their earlier death, resignation or removal. Liberty and Splitco
shall cause the nomination and election of the directors
contemplated in the immediately preceding sentence to be approved
by the directors of Greenlady, (subject to the fiduciary duties and
obligations of such directors) prior to the DIRECTV Effective
Time.
ARTICLE II
Effect of the Mergers
on the Capital Stock of the
Constituent Corporations;
Exchange of Certificates; Stock Options
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SECTION 2.1
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Effect on Capital Stock .
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(a) At
the DIRECTV Effective Time, by virtue of the DIRECTV Merger and
without any action on the part of the holder of any shares of
capital stock of any party:
(i)
Conversion of DIRECTV Common Stock . Subject to Sections
2.1(c) and 2.1(d), each share of common stock of DIRECTV, par value
$0.01 per share (the “ DIRECTV Common Stock ”),
issued and outstanding immediately prior to the DIRECTV Effective
Time, other than (A) any shares of DIRECTV Common Stock to be
canceled pursuant to Section 2.1(a)(ii) and (B) the Liberty DIRECTV
Shares, which shall remain issued and outstanding and are not
affected by the DIRECTV Merger, shall be
automatically converted into and
become the right to receive one (the “ DIRECTV Exchange
Ratio ”) validly issued, fully paid and nonassessable
share of Holdings Class A Common Stock (the “ DIRECTV
Merger Consideration ”). At the DIRECTV Effective Time,
except for the Liberty DIRECTV Shares and except as otherwise
provided herein, all shares of DIRECTV Common Stock outstanding
immediately prior to the DIRECTV Effective Time shall be canceled
upon their conversion and shall cease to exist and each holder of a
DIRECTV Certificate and each holder of uncertificated shares of
DIRECTV Common Stock (other than any holder of Liberty DIRECTV
Shares) shall cease to have any rights with respect thereto, except
that such DIRECTV Certificate or uncertificated share shall
represent only the right to receive (x) the DIRECTV Merger
Consideration deliverable in respect of the shares of DIRECTV
Common Stock represented by such DIRECTV Certificate or
uncertificated share immediately prior to the DIRECTV Effective
Time, (y) any cash in lieu of fractional shares payable pursuant to
Section 2.1(c) and (z) any dividends or other distributions payable
pursuant to Section 2.2(c), all to be issued or paid, without
interest, in consideration therefor upon the surrender of such
DIRECTV Certificate or uncertificated share in accordance with
Section 2.2(b) (or, in the case of a lost, stolen or destroyed
DIRECTV Certificate, Section 2.2(e)).
(ii)
Cancellation of Shares . Each issued share of DIRECTV Common
Stock that is owned by DIRECTV immediately prior to the DIRECTV
Effective Time shall automatically be canceled and shall cease to
exist, and no consideration shall be delivered in exchange
therefor.
(iii)
Conversion of Merger Sub One Common Stock . The shares of
common stock, par value $0.01 per share, of Merger Sub One (“
Merger Sub One Common Stock ”) issued and outstanding
immediately prior to the DIRECTV Effective Time shall be, in the
aggregate, automatically converted into that number of shares of
common stock of the DIRECTV Surviving Corporation equal to the
number of shares of DIRECTV Common Stock that are outstanding
immediately prior to the DIRECTV Effective Time, excluding the
Liberty DIRECTV Shares and shares of DIRECTV Common Stock canceled
pursuant to Section 2.1(a)(ii). Each share of Merger Sub One Common
Stock converted into shares of common stock of the DIRECTV
Surviving Corporation shall be duly authorized and validly issued,
fully paid and nonassessable.
(b) At
the Merger Effective Time, by virtue of the Splitco Merger and
without any action on the part of the holder of any shares of
capital stock of any party:
(i)
Conversion of Splitco Common Stock . Subject to Sections
2.1(c) and 2.1(d), each share, other than shares to be canceled
pursuant to Section 2.1(b)(ii), of Series A Splitco Common Stock
and Series B Splitco Common Stock issued and outstanding
immediately prior to the Merger Effective Time shall be
automatically converted into and become the right to receive a
number of shares of validly issued, fully paid and nonassessable
shares of Holdings Class A Common Stock equal to the Splitco
Exchange Ratio (the “ Splitco Merger Consideration
” and together with the DIRECTV Merger Consideration, the
“ Merger Consideration ”). At the Merger
Effective Time, except as otherwise provided herein, all shares of
Splitco Common Stock outstanding immediately prior to the Merger
Effective Time shall be canceled upon their conversion
and shall cease to exist and each
holder of a Splitco Certificate and each holder of uncertificated
shares of Splitco Common Stock shall cease to have any rights with
respect thereto, except that such Splitco Certificate or
uncertificated share shall represent only the right to receive (x)
the Splitco Merger Consideration deliverable in respect of the
shares of Splitco Common Stock represented by such Splitco
Certificate or uncertificated share immediately prior to the Merger
Effective Time, (y) any cash in lieu of fractional shares payable
pursuant to Section 2.1(c) and (z) any dividends or other
distributions payable pursuant to Section 2.2(c), all to be issued
or paid, without interest, in consideration therefor upon the
surrender of such Splitco Certificate or uncertificated share in
accordance with Section 2.2(b) (or, in the case of a lost, stolen
or destroyed Splitco Certificate, Section 2.2(e)).
(ii)
Cancellation of Shares . Each issued share of Splitco Common
Stock that is owned by Splitco or Holdings immediately prior to the
Merger Effective Time shall automatically be canceled and shall
cease to exist, and no consideration shall be delivered in exchange
therefor.
(iii)
Conversion of Merger Sub Two Common Stock . Each share of
common stock, par value $0.01 per share, of Merger Sub Two issued
and outstanding immediately prior to the Merger Effective Time
shall be automatically converted into one duly authorized and
validly issued, fully paid and nonassessable share of Series A
Common Stock of the Splitco Surviving Corporation.
(i) No
certificates, scrip or book-entry credit representing fractional
shares of Holdings Common Stock will be issued upon the conversion
of Splitco Common Stock or DIRECTV Common Stock pursuant to Section
2.1, and to the extent that any holder of Splitco Common Stock or
DIRECTV Common Stock would otherwise be entitled to receive a
fractional share of Holdings Common Stock, no such fractional
shares will be issued to such holder as a result of the Splitco
Merger or DIRECTV Merger and no such holder shall be entitled to
vote or to any rights of a holder of Holdings Common Stock with
respect to fractional shares such holder otherwise would be
entitled to receive. For purposes of this Section 2.1(c), all
fractional share interests to which each record holder would be
entitled will be aggregated and sold by the Exchange Agent pursuant
to Section 2.1(c)(ii).
(ii) Fractional
shares of Holdings Common Stock that would otherwise be allocable
to any former holders of Splitco Common Stock or DIRECTV Common
Stock in the Mergers will be aggregated, and the Exchange Agent
shall sell the aggregate shares in the public market. The Exchange
Agent will make available the net proceeds thereof, after deducting
any required withholding Taxes and brokerage charges, commissions
and transfer Taxes, on a pro rata basis, without interest, as soon
as practicable to the holders of Splitco Common Stock, DIRECTV
Common Stock or the Malone Splitco Shares, as applicable, entitled
to receive such cash. No interest shall accrue on any cash payable
pursuant to this Section 2.1(c). Payment for fractional shares of
Holdings Common Stock that would otherwise be allocable to any
former holders of
Splitco Common Stock receiving
shares of Holdings Common Stock in the Malone Contribution will be
determined in accordance with the terms and provisions of the
Malone Agreement.
(d)
Adjustments to Exchange Ratios . So as to maintain the
relative proportionate interests of the holders of the Splitco
Common Stock and the DIRECTV Common Stock in Holdings Common Stock
immediately following the Merger Effective Time intended by this
Agreement as of the date hereof, the Splitco Exchange Ratio, the
Splitco Merger Consideration, the DIRECTV Exchange Ratio and the
DIRECTV Merger Consideration shall be adjusted to reflect fully the
appropriate effect of any stock split, split-up, reverse stock
split, stock dividend (including any dividend or distribution of
securities convertible into, or exercisable or exchangeable for,
DIRECTV Common Stock, Liberty Entertainment Common Stock, Splitco
Common Stock or Holdings Common Stock or other securities),
reorganization, recapitalization, reclassification, combination or
exchange of shares, or other similar change with respect to (i)
DIRECTV Common Stock having a record date on or after the date
hereof and prior to the DIRECTV Effective Time, (ii) Splitco Common
Stock having a record date occurring after the Split-Off Effective
Time and prior to the Merger Effective Time and (iii) Liberty
Entertainment Common Stock having a record date occurring on or
after the date hereof and prior to the Split-Off Effective
Time.
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SECTION 2.2
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Exchange of Certificates and Book-Entry
Shares .
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(a)
Exchange Agent . At or prior to the DIRECTV Effective Time,
Holdings shall deposit, in trust for the benefit of the holders of
Splitco Common Stock and DIRECTV Common Stock, with the Exchange
Agent, pursuant to an agreement reasonably satisfactory to DIRECTV
and Liberty (the “ Exchange Agreement ”), for
exchange in accordance with this Article II and pursuant to the
Malone Contribution, through the Exchange Agent, certificates (or
evidence of shares in book-entry form) representing the shares of
Holdings Common Stock issuable pursuant to Section 2.1 in exchange
for outstanding shares of Splitco Common Stock and DIRECTV Common
Stock and pursuant to the Malone Contribution (such shares of
Holdings Common Stock, together with any dividends or other
distributions with respect thereto with a record date after the
Merger Effective Time and any cash payments in lieu of any
fractional shares of Holdings Common Stock received by the Exchange
Agent through sales contemplated by Section 2.1(c), being
hereinafter referred to as the “ Exchange Fund
”).
(b)
Exchange Procedures . Promptly after the Merger Effective
Time, and in any event no later than ten Business Days after the
Merger Effective Time, Holdings shall cause the Exchange Agent to
mail to each holder of record of a certificate (or evidence of
shares in book-entry form) which immediately prior to the DIRECTV
Effective Time or the Merger Effective Time, as applicable,
represented outstanding shares of DIRECTV Common Stock (other than
the Liberty DIRECTV Shares) (the “ DIRECTV
Certificates ”) or of Splitco Common Stock (other than
the Malone Splitco Shares) (the “ Splitco Certificates
” and together with the DIRECTV Certificates, the “
Certificates ”), which at the DIRECTV Effective Time
or the Merger Effective Time, as applicable, were converted into
the right to receive the DIRECTV Merger Consideration or the
Splitco Merger Consideration, as applicable, pursuant to Section
2.1, (i) a letter of transmittal (which shall specify that delivery
shall be effected, and risk of loss and title to the Certificates
shall pass, only upon proper delivery of the Certificates to the
Exchange
Agent, and which shall be in
customary form and shall have such other provisions (including
customary provisions with respect to delivery of an
“agent’s message” with respect to shares held in
book-entry form) as Holdings may reasonably specify) and (ii)
instructions for use in effecting the surrender of the Certificates
in exchange for certificates (or evidence of shares in book-entry
form) representing, as applicable, the DIRECTV Merger Consideration
or the Splitco Merger Consideration, any dividends or other
distributions to which holders of Certificates are entitled
pursuant to Section 2.2(c) and cash in lieu of any fractional
shares of Holdings Common Stock to which such holders are entitled
pursuant to Section 2.1(c). Upon surrender of a Certificate for
cancellation to the Exchange Agent, together with such letter of
transmittal, duly completed and validly executed in accordance with
the instructions (and such other customary documents as may
reasonably be required by the Exchange Agent), the holder of such
Certificate shall be entitled to receive in exchange therefor (A) a
certificate (or evidence of shares in book-entry form) representing
that number of whole shares of Holdings Common Stock that such
holder has the right to receive pursuant to the provisions of this
Article II after taking into account all the shares of Splitco
Common Stock or DIRECTV Common Stock then held by such holder under
all such Certificates so surrendered, (B) any dividends or other
distributions to which such holder is entitled pursuant to Section
2.2(c) and (C) cash in lieu of any fractional shares of Holdings
Common Stock to which such holder is entitled pursuant to Section
2.1(c), and the Certificate so surrendered shall forthwith be
canceled. In the event of a transfer of ownership of shares of
Splitco Common Stock or DIRECTV Common Stock that is not registered
in the transfer records of Splitco or DIRECTV, as applicable, a
certificate (or evidence of shares in book-entry form) representing
the proper number of shares of Holdings Common Stock may be issued
to a Person other than the Person in whose name the Certificate so
surrendered is registered, if, upon presentation to the Exchange
Agent, such Certificate shall be properly endorsed or shall
otherwise be in proper form for transfer and the Person requesting
such issuance shall have paid any transfer and other taxes required
by reason of the issuance of shares of Holdings Common Stock to a
Person other than the registered holder of such Certificate or
shall have established to the reasonable satisfaction of the
Splitco Surviving Corporation or DIRECTV Surviving Corporation, as
applicable, that such tax either has been paid or is not
applicable. Until surrendered as contemplated by this Section
2.2(b), each Certificate shall be deemed at any time after the
DIRECTV Effective Time or the Merger Effective Time, as applicable,
to represent only the right to receive as applicable, the DIRECTV
Merger Consideration or the Splitco Merger Consideration, any
dividends or other distributions to which the holder of such
Certificate is entitled pursuant to Section 2.2(c) and cash in lieu
of any fractional shares of Holdings Common Stock to which such
holder is entitled pursuant to Section 2.1(c), in each case,
without interest.
(c)
Distributions with Respect to Unexchanged Shares . No
dividends or other distributions with respect to Holdings Common
Stock with a record date after the Merger Effective Time shall be
paid to the holder of any unsurrendered Certificate with respect to
the shares of Holdings Common Stock that the holder thereof has the
right to receive upon the surrender thereof, and no cash payment in
lieu of any fractional shares of Holdings Common Stock shall be
paid to any such holder pursuant to Section 2.1(c), in each case
until the holder of such Certificate shall surrender such
Certificate in accordance with this Article II. Following surrender
of any Certificate in accordance with this Article II, there shall
be paid to the record holder thereof, without interest, (i)
promptly following the time of such surrender, the amount of cash
payable in lieu of any fractional shares of Holdings Common Stock
to which such holder is
entitled pursuant to Section 2.1(c)
and the amount of dividends or other distributions, payable with
respect to that number of whole shares of Holdings Common Stock
issuable in exchange for such Certificate pursuant to this Article
II, with a record date after the Merger Effective Time and paid
with respect to Holdings Common Stock prior to such surrender, and
(ii) at the appropriate payment date, the amount of dividends or
other distributions with a record date after the Merger Effective
Time but prior to such surrender and a payment date subsequent to
such surrender payable with respect to such whole shares of
Holdings Common Stock.
(d)
Transfer Books; No Further Ownership Rights . All shares of
Holdings Common Stock issued upon the surrender for exchange of
Certificates in accordance with the terms of this Article II
(including any dividends or other distributions paid pursuant to
Section 2.2(c) and cash paid in lieu of any fractional shares
pursuant to Section 2.1(c)) shall be deemed to have been issued
(and paid) in full satisfaction of all rights pertaining to the
shares of Splitco Common Stock or DIRECTV Common Stock previously
represented by such Certificates, and at the DIRECTV Effective Time
and the Merger Effective Time, as applicable, the stock transfer
books of DIRECTV and Splitco shall be closed and thereafter there
shall be no further registration of transfers on the stock transfer
books of (x) the DIRECTV Surviving Corporation of the shares of
DIRECTV Common Stock that were outstanding immediately prior to the
DIRECTV Effective Time (except for the Liberty DIRECTV Shares,
which are to remain issued and outstanding and are not affected by
the DIRECTV Merger) and (y) the Splitco Surviving Corporation of
the shares of Splitco Common Stock that were outstanding
immediately prior to the Merger Effective Time. Except as required
by applicable Law, from and after the DIRECTV Effective Time and
the Merger Effective Time, as applicable the holders of
Certificates that evidenced ownership of shares of Splitco Common
Stock or DIRECTV Common Stock outstanding immediately prior to the
DIRECTV Effective Time or the Merger Effective Time shall cease to
have any rights with respect to such shares. Subject to the last
sentence of Section 2.2(f), if, at any time after the DIRECTV
Effective Time or the Merger Effective Time, as applicable,
Certificates are presented to the Splitco Surviving Corporation,
the DIRECTV Surviving Corporation or the Exchange Agent for any
reason, they shall be canceled and exchanged as provided in this
Article II.
(e)
Lost, Stolen or Destroyed Certificates . If any Certificate
shall have been lost, stolen or destroyed, upon the making of an
affidavit of that fact by the Person claiming such Certificate to
be lost, stolen or destroyed and, if required by Holdings, the
posting by such Person of a bond, in such reasonable amount as
Holdings may direct, as indemnity against any claim that may be
made against it with respect to such Certificate, the Exchange
Agent will issue, in exchange for such lost, stolen or destroyed
Certificate, as applicable, the DIRECTV Merger Consideration or
Splitco Merger Consideration, any dividends or other distributions
to which the holder of such Certificate would be entitled pursuant
to Section 2.2(c) and cash in lieu of any fractional share
interests of Holdings Common Stock to which such holder would be
entitled pursuant to Section 2.1(c), in each case pursuant to this
Agreement.
(f)
Termination of Fund . Any portion of the Exchange Fund that
remains undistributed to the holders of the Certificates for sixty
(60) calendar days after the Merger Effective Time shall be
delivered to Holdings, upon demand by Holdings, and any holders of
Certificates who have not theretofore complied with this Article II
shall thereafter look only to Holdings for payment of their claim
for (i) the DIRECTV Merger Consideration or the Splitco
Merger Consideration, as applicable,
(ii) any dividends or other distributions with respect to shares of
Holdings Common Stock and (iii) cash in lieu of any fractional
share interests of Holdings Common Stock in accordance with this
Article II. If any Certificate shall not have been surrendered
immediately prior to such date on which any Merger Consideration
(and all dividends or other distributions payable pursuant to
Section 2.2(c) and all cash payable in lieu of fractional shares
pursuant to Section 2.1(c)) would otherwise escheat to or become
property of any Governmental Authority, any such Merger
Consideration (and all dividends or other distributions payable
pursuant to Section 2.2(c) and all cash payable in lieu of
fractional shares pursuant to Section 2.1(c)) shall become, to the
extent permitted by applicable Law, the property of Holdings, free
and clear of all claims or interest of any Person previously
entitled thereto.
(g)
No Liability . Notwithstanding any provision of this
Agreement to the contrary, none of the parties hereto, the Splitco
Surviving Corporation, the DIRECTV Surviving Corporation or the
Exchange Agent shall be liable to any Person in respect of any
shares of Holdings Common Stock (or dividends or other
distributions with respect thereto) or cash in lieu of any
fractional shares of Holdings Common Stock or cash from the
Exchange Fund, in each case delivered to a public official pursuant
to any applicable abandoned property, escheat or similar
Law.
(h)
Investment of Exchange Fund . The Exchange Agent shall
invest any cash included in the Exchange Fund received through the
public market aggregated sales of fractional share interests
effectuated in accordance with the Exchange Agreement as directed
by Holdings. Any interest and other income resulting from such
investments shall be the property of, and shall be paid to,
Holdings.
(i)
Withholding Taxes . Holdings and the Exchange Agent shall be
entitled to deduct and withhold from the consideration otherwise
payable to a holder of shares of Splitco Common Stock or DIRECTV
Common Stock pursuant to this Agreement such amounts as may be
required to be deducted and withheld with respect to the making of
such payment under the Code, or under any provision of state, local
or foreign Law. To the extent amounts are so withheld and paid over
to the appropriate Governmental Authority, Holdings and the
Exchange Agent shall be treated as though they withheld from the
type of consideration from which withholding is required, an
appropriate amount otherwise payable pursuant to this Agreement to
any holder of shares of Splitco Common Stock or DIRECTV Common
Stock in order to provide for such withholding obligation and such
withheld amounts shall be treated for the purposes of this
Agreement as having been paid to the former holder of the shares of
Splitco Common Stock or DIRECTV Common Stock.
SECTION
2.3 DIRECTV Stock Options and other Stock-Based
Awards . Prior to the DIRECTV Effective Time, DIRECTV or the
Board of Directors of DIRECTV (or the applicable committee
thereof), as applicable, shall adopt resolutions and take all other
actions necessary to effectuate the actions set forth in Section
2.3 of the DIRECTV Disclosure Schedule and to ensure that, notwithstanding anything to
the contrary, following the DIRECTV Effective Time, no Person shall
have any right to acquire any securities of DIRECTV or to receive
any payment, right or benefit with respect to any award previously
granted under any DIRECTV Stock Plan (whether hereunder, under any
DIRECTV Stock Plan or individual award agreement
or otherwise), except the right to
receive a payment, right or benefit with respect thereto as
provided in Section 2.3 of the DIRECTV Disclosure Schedule
.
|
SECTION 2.4
|
Splitco Stock Options and other Stock-Based
Awards .
|
(a) At
the Split-Off Effective Time, in accordance with the terms and
conditions of the Reorganization Agreement, Liberty and Splitco
shall adjust the terms of all outstanding options to acquire, stock
appreciation rights relating to and restricted shares relating to,
shares of Liberty Entertainment Common Stock to reflect the
consummation of the Split-Off.
(b) Prior
to the Merger Effective Time, each of Liberty and Splitco or the
Board of Directors of each of Liberty and Splitco (or any
applicable committee thereof), as applicable, shall adopt
resolutions and take all other actions necessary to effectuate the
actions set forth in Section 2.4 of the Liberty Disclosure
Schedule and to ensure
that, notwithstanding anything to the contrary, following the
Merger Effective Time, no Person shall have any right to acquire
any securities of Splitco or to receive any payment, right or
benefit with respect to any award previously granted under the
Splitco Stock Plans (whether hereunder, under any Splitco Stock
Plan or individual award agreement or otherwise), except the right
to receive a payment, right or benefit with respect thereto as
provided in Section 2.4 of the Liberty Disclosure Schedule
.
|
SECTION 2.5
|
Actions by Holdings .
|
(a) At
the DIRECTV Effective Time and the Merger Effective Time, as
applicable, by virtue of the Mergers and without the need of any
further corporate action by Holdings, Holdings shall assume the
DIRECTV Adjusted Options and DIRECTV Adjusted RSUs (collectively,
the “ DIRECTV Equity Awards ”) and the Splitco
Adjusted Options, Splitco Adjusted SARs, and the Splitco Adjusted
Restricted Shares (collectively, the “ Splitco Adjusted
Equity Awards ” and collectively with the DIRECTV Equity
Awards, the “ Holdings Equity Awards ”), with
the result that (i) at the DIRECTV Effective Time, Holdings shall
assume the DIRECTV Stock Plans, including all obligations with
respect to the DIRECTV Equity Awards outstanding at the DIRECTV
Effective Time (adjusted pursuant to Section 2.3) and (ii) at the
Merger Effective Time, Holdings shall assume the Splitco Stock
Plans, including all obligations of Splitco with respect to the
Splitco Adjusted Equity Awards outstanding at the Merger Effective
Time (adjusted pursuant to Section 2.4). In addition, at the Merger
Effective Time, Holdings shall adopt one or more incentive plans,
including an executive officer cash bonus plan (such plans,
together with the DIRECTV Stock Plans and the Splitco Stock Plans,
the “ Holdings Incentive Plans ”).
(b) As
soon as practicable after the Merger Effective Time, Holdings shall
prepare and file with the Securities and Exchange Commission (the
“ SEC ”) a registration statement on Form S-8
(or another appropriate form) registering a number of shares of
Holdings Common Stock at least equal to the number of shares
subject to the Holdings Equity Awards. Such registration statement
shall be kept effective (and the current status of the prospectus
or prospectuses required thereby shall be maintained) at least for
so long as such Holdings Equity Awards remain
outstanding.
(c) As
soon as practicable after the Merger Effective Time, Holdings shall
deliver to the holders of a Holdings Equity Award appropriate
notices setting forth such holders’ rights pursuant to the
Holdings Incentive Plans, and the agreements evidencing the grants
of such Holding Equity Awards after giving effect to the Mergers
and the adjustments required by Sections 2.3 and 2.4.
ARTICLE III
Representations and Warranties of Liberty and
Splitco Regarding Liberty
Subject to Section 6.24 and except
as set forth in the correspondingly identified subsection of the
disclosure schedule delivered by Liberty to DIRECTV simultaneously
with the execution of this Agreement (the “ Liberty
Disclosure Schedule ”), Liberty and Splitco represent and
warrant to DIRECTV:
|
SECTION 3.1
|
Organization, Standing and Corporate
Power .
|
(a) Liberty
is (a) a corporation duly organized, validly existing and duly
qualified or licensed and in good standing under the Laws of the
state or jurisdiction of its organization with full corporate power
and authority to own, lease, use and operate its properties and to
conduct its business as currently conducted, and (b) duly qualified
or licensed to do business and, to the extent applicable, in good
standing in any other jurisdiction in which the nature of the
business conducted by it or the property it owns, leases, uses or
operates requires it to be so qualified, licensed or in good
standing, except where the failures to be so qualified, licensed or
in good standing have not had a Material Adverse Effect on Splitco
(“ Splitco Material Adverse Effect
”).
(b) Liberty
has delivered to DIRECTV correct and complete copies of its
certificate of incorporation and bylaws (the “ Liberty
Charter Documents ”), in each case as amended to the date
of this Agreement. All such Liberty Charter Documents are in full
force and effect and Liberty is not in violation of any of their
respective provisions.
|
SECTION 3.2
|
Capitalization .
|
(a) The
authorized capital stock of Liberty consists of (i) 20,375,000,000
shares of common stock, par value $0.01 per share, of which
4,000,000,000 shares have been designated Series A Liberty
Entertainment Common Stock, 150,000,000 shares have been designated
Series B Liberty Entertainment Common Stock and 4,000,000,000
shares have been designated Series C Liberty Entertainment Common
Stock, and (ii) 50,000,000 shares of preferred stock, par value
$0.01 per share (“ Liberty Preferred Stock ”).
At the close of business on April 30, 2009, (i) 494,616,028 shares
of Series A Liberty Entertainment Common Stock were issued and
outstanding, (ii) 23,697,987 shares of Series B Liberty
Entertainment Common Stock were issued and outstanding, (iii) no
shares of Series C Liberty Entertainment Common Stock were issued
or outstanding, (iv) no shares of Liberty Entertainment Common
Stock were held by Liberty in its treasury, (v) 21,016,409 shares
of Series A Liberty Entertainment Common Stock were reserved for
issuance under the Liberty Stock Plans (of which 15,889,652 shares
of Series A Liberty Entertainment Common Stock were subject to
outstanding Liberty Entertainment Equity Awards granted under the
Liberty Stock Plans (which excludes 5,633,052
options to acquire Series B Liberty
Entertainment Common Stock that can be exercised for Series A
Liberty Entertainment Common Stock, on a one-for-one basis, at the
option of the holder)), (vi) 7,993,052 shares of Series B Liberty
Entertainment Common Stock were reserved for issuance under the
Liberty Stock Plans (of which 5,993,052 shares of Series B Liberty
Entertainment Common Stock were subject to outstanding Liberty
Entertainment Equity Awards granted under the Liberty Stock Plans
(which includes 5,633,052 options to acquire Series B Liberty
Enterainment Common Stock that can be exercised for Series A
Liberty Entertainment Common Stock, on a one-for-one basis, at the
option of the holder)), (vii) no shares of Series C Liberty
Entertainment Common Stock were reserved for issuance under the
Liberty Stock Plans and (viii) no shares of Liberty Preferred Stock
were issued or outstanding. All outstanding shares of Liberty
Entertainment Common Stock have been duly authorized and validly
issued and are fully paid, nonassessable and free of preemptive
rights. Included in Section 3.2(a) of the Liberty Disclosure
Schedule is (x) a
correct and complete list, as of April 30, 2009, of all outstanding
options, stock appreciation or other rights to purchase or receive
shares of Liberty Entertainment Common Stock granted under the
Liberty Stock Plans or otherwise by Liberty, and, for each such
option, stock appreciation or other right, (A) the number of shares
of Liberty Entertainment Common Stock subject thereto and the
exercise price thereof and (B) the terms of vesting, and the grant
and expiration dates thereof and the name of the holder thereof and
(y) the aggregate number of shares of Liberty Entertainment Common
Stock that are issuable pursuant to all outstanding options, stock
appreciation rights or other rights to purchase or receive shares
of Liberty Entertainment Common Stock. All Liberty Entertainment
Stock Options which vested after December 31, 2004, have an
exercise price equal to no less than the fair market value of the
underlying shares of Liberty Entertainment Common Stock on the date
of grant (as adjusted to reflect corporate transactions which have
occurred since the date of grant). Since April 30, 2009, Liberty
has not issued any shares of Liberty Entertainment Common Stock, or
any securities convertible into or exchangeable or exercisable for
any shares of Liberty Entertainment Common Stock, other than
pursuant to the exercise of outstanding options or stock
appreciation rights referred to above in this Section 3.2(a) or as
is contemplated by Section 6.2(a)(i)(A).
(b) Except
as expressly provided by any Transaction Agreement, there are no
outstanding obligations of Liberty or any of its Subsidiaries to
repurchase, redeem or otherwise acquire any shares of Liberty
Entertainment Common Stock (or any options, warrants or other
rights to acquire any shares of Liberty Entertainment Common Stock)
other than Liberty Entertainment Restricted Shares that may be
forfeited by their terms.
|
SECTION 3.3
|
Authority; Noncontravention; Voting
Requirements .
|
(a) Liberty
has all necessary corporate power and authority to execute and
deliver this Agreement and each other Transaction Agreement to
which it is a party, and, subject to obtaining the Liberty
Stockholder Approval, to perform its obligations hereunder and
thereunder, and to consummate the Transactions. The execution,
delivery and performance by Liberty of this Agreement and each
other Transaction Agreement to which it is a party, and the
consummation by it of the Transactions, have been duly authorized
and approved by Liberty’s Board of Directors, and except for
obtaining the Liberty Stockholder Approval, no other corporate
action on the part of Liberty is necessary to authorize the
execution, delivery and performance by Liberty of this Agreement
and each other Transaction Agreement to which it is a
party and the consummation by it of
the Transactions. This Agreement and each other Transaction
Agreement to which it is a party has been duly executed and
delivered by Liberty and, assuming due authorization, execution and
delivery hereof by the other parties hereto and thereto,
constitutes a legal, valid and binding obligation of Liberty,
enforceable against Liberty in accordance with each of their
respective terms, except that such enforceability (i) may be
limited by bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and other similar Laws of general
application affecting or relating to the enforcement of
creditors’ rights generally and (ii) is subject to general
principles of equity, whether considered in a proceeding at Law or
in equity (the “ Bankruptcy and Equity Exception
”).
(b) Except
as set forth in Section 3.3(b) of the Liberty Disclosure
Schedule , neither the execution and delivery of this Agreement
or any of the other Transaction Agreements to which it is a party
by Liberty nor the consummation by Liberty of the Transactions, nor
compliance by Liberty with any of the terms or provisions of this
Agreement or any of the other Transaction Agreements to which it is
a party, will:
(i) conflict
with or violate any provision of the Liberty Charter
Documents;
(ii) violate,
or conflict with, or result in a breach of any provision of, or
constitute a change of control or default (or an event that, with
the giving of notice, the passage of time or otherwise, would
constitute a default) under, or require any action, consent, waiver
or approval of any third party or entitle any Person (with the
giving of notice, the passage of time or otherwise) to terminate,
accelerate, modify or call a default under, or give rise to any
obligation to make a payment under, or to any increased, additional
or guaranteed rights of any Person under, or result in the creation
of any Lien upon any of the properties or assets of Liberty or any
of its Subsidiaries or under any of the terms, conditions or
provisions of any material Contract to which Liberty or any of its
Subsidiaries is a party or pursuant to which any of their
respective properties or assets are bound, except for any such
conflicts, violations, breaches, defaults or occurrences which
would not prevent or materially delay the performance of this
Agreement by Liberty;
(iii) assuming
the approvals required under Section 3.3(b)(iv) are obtained,
violate any order, writ, or injunction, or any decree, or any
material Law applicable to Liberty or any of its Subsidiaries, or
any of their respective properties or assets; or
(iv) require
any consent, approval, authorization or permit of, or filing with
or notification to, any Governmental Authority, except for (x) (A)
the filing with the SEC of any further amendments to its
preliminary proxy statement filed April 24, 2009 relating to the
Liberty Stockholders Meeting (as amended or supplemented from time
to time, the “ Liberty Proxy Statement ”), the
Splitco Form S-4 and other filings required under, and compliance
with other applicable requirements of, the Securities Exchange Act
of 1934, as amended, and the rules and regulations promulgated
thereunder (the “ Exchange Act ”), and the rules
of The NASDAQ Global Select Market (“ NASDAQ ”),
(B) filings required under, and compliance with other applicable
requirements of, the HSR Act and the rules and regulations
promulgated thereunder, and any similar Laws of
foreign jurisdictions, (C) approval
of the Transactions under the Communications Act (the “
Liberty FCC Approvals ”), and (D) the private letter
rulings to be obtained from the Internal Revenue Service (the
“ IRS ”), as contemplated by this Agreement and
any filings made with the IRS in connection therewith, and (y)
where the failure to obtain such consents, approvals,
authorizations or permits, or to make such filings or notifications
would not prevent or materially delay the performance of this
Agreement by Liberty.
(c) At
a meeting of the Board of Directors of Liberty duly called and
held, those directors of Liberty voting (and not abstaining) upon
the following matters and constituting a majority of the entire
Board of Directors of Liberty unanimously (i) approved and declared
advisable (A) the Split-Off and the transactions contemplated
thereby (including the transactions contemplated by the
Reorganization Agreement), (B) the Malone Agreement and the
transactions contemplated thereby (including the Malone
Contribution), and (C) this Agreement and the transactions
contemplated hereby (including the Splitco Merger), and (ii)
resolved to recommend that holders of Liberty Entertainment Common
Stock approve the Split-Off (subject to Section 6.4).
(d) The
affirmative vote (in person or by proxy) of the holders of record
of a majority of the aggregate voting power of the shares of
Liberty Entertainment Common Stock that are present (in person or
by proxy) and entitled to vote at the Liberty Stockholders Meeting
or any adjournment or postponement thereof, voting together as a
single class, in favor of the approval of the Split-Off (the
“ Class Approval ”) is the only vote or approval
of the holders of any class or series of capital stock of Liberty
that is legally required to approve the Transactions;
provided , however , that in addition to the
foregoing, Liberty shall require the affirmative vote (in person or
by proxy), at the Liberty Stockholders Meeting or any adjournment
or postponement thereof, of the holders of record, voting together
as a separate class, of a majority of the aggregate voting power of
the shares of Liberty Entertainment Common Stock outstanding on the
record date for the Liberty Stockholders Meeting, excluding any
Excluded Malone Shares and shares of Liberty Entertainment Common
Stock Beneficially Owned by any directors or officers of Liberty,
without duplication, to approve (i) the Split-Off and the
transactions contemplated thereby (including the transactions
contemplated by the Reorganization Agreement), (ii) the Malone
Agreement and the transactions contemplated thereby (including the
Malone Contribution), and (iii) this Agreement and the transactions
contemplated hereby (including the Splitco Merger) (the “
Minority Approval ”, and together with the Class
Approval, the “ Liberty Stockholder Approval
”).
SECTION
3.4 Liberty SEC Documents . As of their
respective dates, all reports, prospectuses, forms, schedules,
registration statements, proxy statements or information statements
required to be filed by Liberty under the Securities Act or under
the Exchange Act (the “ Liberty SEC Documents ”)
complied in all material respects with the applicable requirements
of the Securities Act or the Exchange Act, as the case may be, and
none of such Liberty SEC Documents when filed contained an untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made,
not misleading. Since January 1, 2008, Liberty has timely filed all
reports and other filings required to be filed with the SEC under
the rules and regulations of the SEC. The books and records of
Liberty and its Subsidiaries have been, and are being, maintained
in accordance with applicable legal and accounting
requirements. Each of the foregoing
representations in this Section 3.4 is made only with respect to
information relating to the Splitco Business and with
“materiality” being defined by reference to Splitco
(after giving effect to the Restructuring and the Split-Off) and
the Splitco Business.
SECTION
3.5 Information Supplied . None of the
information supplied (or to be supplied) in writing by or on behalf
of Liberty specifically for inclusion or incorporation by reference
in, and which is included or incorporated by reference in, (a) the
registration statement on Form S-4 to be filed with the SEC by
Splitco in connection with the issuance of shares of Splitco Common
Stock in the Split-Off (as amended or supplemented from time to
time, the “ Splitco Form S-4 ”) and the
registration statement on Form S-4 to be filed with the SEC by
Holdings in connection with the issuance of shares of Holdings
Common Stock in the Mergers and the Malone Contribution (as amended
or supplemented from time to time, the “ Holdings Form
S-4 ”) will, at the time (i) that each of the Splitco
Form S-4 and the Holdings Form S-4, or any amendments or
supplements thereto, are filed with the SEC, (ii) each of the
Splitco Form S-4 and the Holdings Form S-4 becomes effective under
the Securities Act, (iii) of the DIRECTV Stockholders Meeting, (iv)
of the Liberty Stockholders Meeting, (v) of the Split-Off, (vi) of
the DIRECTV Merger and (vii) of the Splitco Merger contain any
untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make
the statements made therein not misleading, and (b) the Liberty
Proxy Statement will, on the date it is first mailed to
stockholders of Liberty and at the time of the Liberty Stockholders
Meeting, be false or misleading with respect to any material fact,
or omit to state any material fact necessary in order to make the
statements therein, in light of the circumstances under which they
are made, not misleading or necessary to correct any statement in
any earlier communication. The Liberty Proxy Statement will comply
as to form in all material respects with the applicable
requirements of the Exchange Act. Notwithstanding the foregoing,
Liberty makes no representation or warranty with respect to
information regarding DIRECTV supplied by or on behalf of DIRECTV
for inclusion or incorporation by reference in any of the foregoing
documents.
SECTION
3.6 Brokers and Other Advisors . Except for
Goldman, Sachs & Co. and JPMorgan Chase & Co., the fees and
expenses of which will be paid by Liberty, no broker, investment
banker, financial advisor or other Person is entitled to any
broker’s, finder’s, financial advisor’s or other
similar fee or commission, or the reimbursement of expenses, in
connection with the Transactions based upon arrangements made by or
on behalf of Liberty or any of its Subsidiaries. Liberty has
heretofore delivered to DIRECTV a correct and complete copy of
Liberty’s engagement letter with each of Goldman, Sachs &
Co. and JPMorgan Chase & Co., which letter describes all fees
payable to Goldman, Sachs & Co. and JPMorgan Chase & Co.,
respectively, in connection with the Transactions, all agreements
under which any such fees or any expenses are payable and all
indemnification and other agreements related to the engagement of
Goldman, Sachs & Co. and JPMorgan Chase & Co., respectively
(as amended, the “ Liberty Engagement Letters
”).
|
SECTION 3.7
|
Liberty Owned DIRECTV Shares
.
|
(a) As
of the date hereof, all of the shares of DIRECTV capital stock
Beneficially Owned by Liberty are owned as follows: (i) 170,000,000
shares of DIRECTV Common Stock are owned directly by Greenlady II,
LLC (the “ Greenlady II DIRECTV Shares ”) and
(ii) 378,720,752 shares of DIRECTV Common Stock are owned directly
by Greenlady
(collectively, with the Greenlady II
DIRECTV Shares, the “ Liberty Owned DIRECTV Shares
”). All of the Liberty Owned DIRECTV Shares are owned free
and clear of any and all Liens, other than those Liens incurred in
connection with the Greenlady Debt and other than those Liens
incurred in connection with the DIRECTV Credit Facility. Except as
provided for in this Section 3.7, Liberty does not Beneficially Own
any other shares of DIRECTV capital stock or any options or other
rights to purchase or receive shares of DIRECTV capital stock.
Immediately following the Split-Off, Subsidiaries of Splitco will
have good and valid title to the Liberty Owned DIRECTV Shares, free
and clear of any and all Liens (other than Liens incurred in
connection with the Greenlady Debt, Liens incurred in connection
with the DIRECTV Credit Facility, transfer restrictions arising
under federal and state securities Laws and the restrictions set
forth in this Agreement), and Liberty will have no right, title or
interest in the Liberty Owned DIRECTV Shares.
(b) (i)
Except for the equity collars associated with the Greenlady Debt,
Liberty has not entered into or acquired any derivative contract
with respect to any shares of DIRECTV Common Stock and (ii) Liberty
has not entered into any other hedging or other similar transaction
that has the effect of providing Liberty with the economic
benefits, voting rights or risks of ownership of any shares of
DIRECTV Common Stock other than the Liberty Owned DIRECTV
Shares.
|
SECTION 3.8
|
Indemnification Claims .
|
(a) As
of the date of this Agreement, neither Liberty nor any of its
Subsidiaries has submitted, or threatened in writing to submit, a
claim for indemnification against News Corporation (“
News ”) in accordance with either (i) that certain
Share Exchange Agreement, dated as of December 22, 2006, by and
between News and Liberty (the “ Share Exchange
Agreement ”) or (ii) any of the Ancillary
Agreements.
(b) As
of the date of this Agreement, News has not submitted, and to the
Knowledge of Liberty, News has not threatened in writing to submit,
a claim for indemnification against Liberty in accordance with
either (i) the Share Exchange Agreement or (ii) any of the
Ancillary Agreements.
SECTION
3.9 Splitco Takeover Proposals . As of the date
of this Agreement, within the past two (2) years there have been no
Splitco Takeover Proposals, other than as set forth in Section
3.9 of the Liberty Disclosure Schedule .
SECTION
3.10
Sale of Assets . The Transactions do not constitute a sale,
assignment, transfer, lease, conveyance or other disposition of all
or substantially all of the assets and properties of Liberty and
its Subsidiaries (taken as a whole) under the terms of that certain
Indenture, dated as of July 7, 1999, by and between Liberty and The
Bank of New York, N.A., as trustee (as amended, modified or
supplemented).
SECTION
3.11
Solvency . Immediately prior to, and after, the Closing, (a)
the fair value of the assets of Liberty and each of its
Subsidiaries will exceed each of its respective Liabilities, (b)
each of Liberty and its Subsidiaries will be able to pay its
Liabilities, as such Liabilities become absolute and matured and
(c) neither Liberty nor any of its Subsidiaries
will have unreasonably small capital
with which to conduct the business in which it is engaged as such
business is now conducted and is proposed to be conducted following
the Closing Date.
SECTION
3.12
State Takeover Statutes . No “fair price,”
“moratorium,” “control share acquisition”
or other similar antitakeover statute or regulation enacted under
state or federal Laws in the United States (with the exception of
Section 203 of the DGCL) applicable to Liberty is applicable to the
Transactions. The action of the Board of Directors of Liberty in
approving this Agreement and the Transactions is sufficient to
render inapplicable to this Agreement and the Transactions the
restrictions on “business combinations” (as defined in
Section 203 of the DGCL) as set forth in Section 203 of the
DGCL.
SECTION
3.13
Opinion of Financial Advisor . Goldman, Sachs & Co. has
rendered its opinion to the Board of Directors of Liberty that, as
of May 3, 2009 and based upon and subject to the factors and
assumptions set forth in the written opinion (the “
Liberty Fairness Opinion ”), the Splitco Exchange
Ratio pursuant to this Agreement is fair from a financial point of
view to those holders (other than Dr. Malone, Mrs. Leslie Malone,
The Tracy L. Neal Trust A, The Evan D. Malone Trust A and their
respective Affiliates) of shares of Liberty Entertainment Common
Stock who receive shares of Splitco Common Stock as a result of the
Redemption (as defined in the Liberty Fairness Opinion), taken in
the aggregate.
SECTION
3.14
Investigation; Reliance . Liberty and Splitco hereby
acknowledge and agree that DIRECTV makes no representations or
warranties to Liberty or Splitco, express or implied, other than
those representations and warranties set forth in this Agreement
and the other Transaction Agreements. Liberty and Splitco hereby
expressly acknowledge and agree that, except in the case of fraud
or willful breach, neither DIRECTV nor any Person will have or be
subject to any liability to Liberty, Splitco or any other Person
resulting from any statements or communications by DIRECTV or any
of its Affiliates or Representatives with respect to any matter in
connection with its investigation or evaluation of the
Transactions, including any information, document or material made
available in any offering memorandum, in any “data
room,” in any management presentations or in any other form,
except for the representations and warranties expressly set forth
in this Agreement and the Transaction Agreements.
ARTICLE IV
Representations and Warranties of
Splitco
This Article IV shall be interpreted
as though the representations and warranties contained herein,
including those made as of the date hereof, are made as if the
consummation of the Restructuring and the Split-Off has already
occurred. Except as set forth in the correspondingly identified
subsection of the Liberty Disclosure Schedule, Splitco represents
and warrants to DIRECTV:
|
SECTION 4.1
|
Organization, Standing and Power
.
|
(a) Each
of Splitco and its Subsidiaries is (a) a corporation, limited
liability company or other legal entity duly organized, validly
existing and duly qualified or licensed and in good standing under
the Laws of the state or jurisdiction of its organization with full
corporate
or other power, as the case may be,
and authority to own, lease, use and operate its properties and to
conduct its business as currently conducted, and (b) duly qualified
or licensed to do business and, to the extent applicable, in good
standing in any other jurisdiction in which the nature of the
business conducted by it or the property it owns, leases, uses or
operates requires it to be so qualified, licensed or in good
standing, except where the failures to be so qualified, licensed or
in good standing have not had a Splitco Material Adverse
Effect.
(b)
Section 4.1(b) of the Liberty Disclosure Schedule
lists all Subsidiaries of Splitco
together with (i) the jurisdiction of organization of each such
Subsidiary and (ii) in the case of Subsidiaries that are not
wholly-owned by Splitco, the percentage owned by Splitco, or in the
case of an indirect Subsidiary, the percentage owned by a
Subsidiary of Splitco. Except as set forth in Section 4.1(b) of
the Liberty Disclosure Schedule , all the outstanding shares of
capital stock of, or other equity interests in, each Subsidiary of
Splitco have been duly authorized and validly issued and are fully
paid and nonassessable and are owned directly or indirectly by
Splitco free and clear of all Liens. Except as set forth in
Section 4.1(b) of the Liberty Disclosure Schedule , Splitco
does not own, directly or indirectly, any capital stock, voting
securities or equity interests in any Person.
(c) Splitco
has delivered to DIRECTV correct and complete copies of its
certificate of incorporation and bylaws (the “ Splitco
Charter Documents ”) and correct and complete copies of
the certificates of incorporation, bylaws and stockholders’
or governance agreements (or comparable organizational documents)
of each of its Subsidiaries (the “ Splitco Subsidiary
Documents ”), in each case as amended to the date of this
Agreement. All such Splitco Charter Documents and Splitco
Subsidiary Documents are in full force and effect and neither
Splitco nor any of its Subsidiaries is in violation of any of their
respective provisions. Splitco has made available to DIRECTV and
its Representatives correct and complete copies of the minutes (or,
in the case of minutes that have not yet been finalized, drafts
thereof) of all meetings of stockholders, the Board of Directors
(or comparable governing body) and each committee of the Board of
Directors (or comparable governing body) of (i) Splitco held since
January 6, 2009, (ii) each of GSN, FUN Technologies and their
respective Subsidiaries held since January 1, 2008, and (iii)
Liberty Sports Holdings, LLC and each of its Subsidiaries held
since February 27, 2008.
|
SECTION 4.2
|
Capitalization .
|
(a) Prior
to the consummation of the Restructuring and the Split-Off, the
authorized capital stock of Splitco consists of 10,000 shares of
common stock, par value $0.01 per share and all of the issued and
outstanding shares of which are held directly by Liberty Media LLC
prior to the Split-Off. Immediately following the consummation of
the Split-Off, (i) there will be outstanding a number of shares of
Series A Splitco Common Stock equal to 90% of the shares of Series
A Liberty Entertainment Common Stock outstanding as of the
Redemption Date (subject to any adjustments for fractional shares
in accordance with the terms of the Reorganization Agreement), (ii)
there will be outstanding a number of shares of Series B Splitco
Common Stock equal to 90% of the shares of Series B Liberty
Entertainment Common Stock outstanding as of the Redemption Date
(subject to any adjustments for fractional shares in accordance
with the terms of the Reorganization Agreement), (iii) no shares of
Series C Splitco Common Stock will be issued or outstanding, (iv)
no shares of Splitco Common Stock will be
held by Splitco in its treasury and
(v) no shares of preferred stock of Splitco will be issued or
outstanding. All outstanding shares of Splitco Common Stock are,
and all shares thereof which may be issued will be, when issued,
duly authorized, validly issued, fully paid, nonassessable and not
subject to preemptive rights. Prior to the consummation of the
Split-Off, except as set forth in this Section 4.2 and as expressly
provided by the Reorganization Agreement, there are no shares of
capital stock, voting securities or equity interests of Splitco
issued and outstanding or any subscriptions, options, warrants,
calls, convertible or exchangeable securities, rights, commitments
or agreements of any character providing for the issuance of any
shares of capital stock, voting securities or equity interests of
Splitco, including any representing the right to purchase or
otherwise receive any Splitco Common Stock. Included in Section
4.2(a) of the Liberty Disclosure Schedule is (x) a correct and complete list, as of April
30, 2009, of all outstanding options, stock appreciation or other
rights to purchase or receive shares of Splitco Common Stock
granted under the Splitco Stock Plans or otherwise by Splitco, and,
for each such option, stock appreciation or other right, (A) the
number of shares of Splitco Common Stock subject thereto and the
exercise price thereof and (B) the terms of vesting, and the grant
and expiration dates thereof and the name of the holder thereof,
that will be outstanding immediately following the Split-Off
Effective Time and (y) the aggregate number of shares of Splitco
Common Stock that are issuable pursuant to all outstanding options,
stock appreciation rights or other rights to purchase or receive
shares of Splitco Common Stock (in each case, based on the options,
stock appreciation and other rights with respect to Liberty
Entertainment Common Stock outstanding on such date (which are set
forth in Section 3.2(a) of the Liberty Disclosure Schedule
)). The exercise or base price of each award listed on Section
4.2(a) of the Liberty Disclosure Schedule will be determined by applying the formula set
forth in Section 3.3 of the Reorganization Agreement to the
exercise or base price of the corresponding award set forth in
Section 3.2(a) of the Liberty Disclosure Schedule . All
Splitco Stock Options were granted in accordance with the terms of
the Splitco Stock Plans. Except as expressly provided by any
Transaction Agreement or as set forth in Section 4.2(a) of the
Liberty Disclosure Schedule , there are no outstanding
obligations of Splitco or any of its Subsidiaries to repurchase,
redeem or otherwise acquire any shares of capital stock, voting
securities or equity interests (or any options, warrants or other
rights to acquire any shares of capital stock, voting securities or
equity interests) of Splitco or any of its Subsidiaries other than
Splitco Restricted Shares that may be forfeited by their
terms.
(b) There
are no issued or outstanding bonds, debentures, notes or other
indebtedness of Splitco or any of its Subsidiaries having the right
to vote (or convertible into, or exchangeable for, securities
having the right to vote), upon the happening of a certain event or
otherwise, on any matters on which the equity holders of Splitco or
any of its Subsidiaries may vote.
|
SECTION 4.3
|
Authority; Noncontravention; Voting
Requirements .
|
(a) Splitco
has all necessary corporate power and authority to execute and
deliver this Agreement and each of the other Transaction Agreements
to which it is a party and, subject to obtaining the Splitco
Stockholder Approval, to perform its obligations hereunder and
thereunder, and to consummate the Transactions. The execution,
delivery and performance by Splitco of this Agreement and each of
the other Transaction Agreements to which it is a party, and the
consummation by it of the Transactions, have been duly authorized
and approved by
Splitco’s Board of Directors,
and except for obtaining the Splitco Stockholder Approval for the
adoption of this Agreement, each of the other Transaction
Agreements to which it is a party and approval of the Transactions,
no other corporate action on the part of Splitco is necessary to
authorize the execution, delivery and performance by Splitco of
this Agreement, each of the other Transaction Agreements to which
it is a party and the consummation by it of the Transactions. This
Agreement and each of the other Transaction Agreements to which it
is a party have been duly executed and delivered by Splitco and,
assuming due authorization, execution and delivery hereof and
thereof by the other parties hereto and thereto, constitutes a
legal, valid and binding obligation of Splitco, enforceable against
Splitco in accordance with its and their terms, except that such
enforceability is subject to the Bankruptcy and Equity
Exception.
(b) Except
as set forth in Section 4.3(b) of the Liberty Disclosure
Schedule , neither the execution and delivery of this Agreement
or any of the other Transaction Agreements to which it is a party
by Splitco or any of its Subsidiaries nor the consummation by
Splitco or any of its Subsidiaries of the Transactions, nor
compliance by Splitco or any of its Subsidiaries with any of the
terms or provisions of this Agreement or any of the other
Transaction Agreements to which it is a party, will:
(i) conflict
with or violate any provision of the Splitco Charter Documents or
any provision of the Splitco Subsidiary Documents;
(ii) violate,
or conflict with, or result in a breach of any provision of, or
constitute a change of control or default (or an event that, with
the giving of notice, the passage of time or otherwise, would
constitute a default) under, or require any action, consent, waiver
or approval of any third party or entitle any Person (with the
giving of notice, the passage of time or otherwise) to terminate,
accelerate, modify or call a default under, or give rise to any
obligation to make a payment under, or to any increased, additional
or guaranteed rights of any Person under, or result in the creation
of any Lien upon any of the properties or assets of Splitco or any
of its Subsidiaries or under any of the terms, conditions or
provisions of any Splitco Material Contract to which Splitco or any
of its Subsidiaries is a party or pursuant to which any of their
respective properties or assets are bound, except for any such
conflicts, violations, breaches, defaults or occurrences which
would not have a significant adverse effect on the Splitco
Business;
(iii) assuming
the approvals required under Section 4.3(b)(iv) are obtained,
violate any order, writ, or injunction, or any decree, or any
material Law applicable to Splitco or any of its Subsidiaries, or
any of their respective properties or assets; or
(iv) require
any consent, approval, authorization or permit of, or filing with
or notification to, any Governmental Authority, except for (x) (A)
the filing with the SEC of each of the Splitco Form S-4, the
Holdings Form S-4 and the Liberty Proxy Statement, and other
filings required under, and compliance with other applicable
requirements of, the Exchange Act, and the rules of NASDAQ, (B) the
filing of each of the Splitco Certificate of Merger and the DIRECTV
Certificate of Merger with the Secretary of State of the State of
Delaware pursuant to the DGCL, (C) filings required
under, and compliance with other
applicable requirements of, the HSR Act and the rules and
regulations promulgated thereunder, and any similar Laws of foreign
jurisdictions, (D) approval of the Transactions under the
Communications Act (the “ Splitco FCC Approvals
”) and (E) the private letter rulings to be obtained from the
IRS as contemplated by this Agreement and any filings made with the
IRS in connection therewith, and (y) where the failure to obtain
such consents, approvals, authorizations or permits, or to make
such filings or notifications would not, individually or in the
aggregate, have a Splitco Material Adverse Effect.
(c) At
a meeting of the Board of Directors of Splitco duly called and
held, those directors of Splitco voting (and not abstaining) upon
the following matters and constituting a majority of the entire
Board of Directors of Splitco unanimously (i) approved and declared
advisable this Agreement (including the Splitco Merger), each of
the other Transaction Agreements to which it is a party and the
Transactions and (ii) resolved to recommend that the sole
stockholder of Splitco adopt this Agreement and approve the Splitco
Merger.
(d) The
affirmative vote of the sole stockholder of Splitco is the only
vote of the stockholders of Splitco necessary to adopt this
Agreement and approve the Transactions, including the Splitco
Merger (the “ Splitco Stockholder Approval
”).
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SECTION 4.4
|
Splitco Financial Statements;
Liabilities .
|
(a) True,
correct and complete copies of the audited combined balance sheet
of Splitco and its Subsidiaries as of December 31, 2008 (the
“ Splitco Balance Sheet Date ”), and the related
audited combined statements of income and cash flows of Splitco and
its Subsidiaries for the fiscal year ended December 31, 2008, and
the notes thereto, audited by KPMG LLP (collectively, the “
Audited Financial Statements ”) have been provided to
DIRECTV prior to the date hereof and were filed with the SEC as
part of Liberty’s Amendment No. 2 to its Preliminary Schedule
14A on April 24, 2009. Except as provided in Section 4.4 of the
Liberty Disclosure Schedule , the Audited Financial Statements
(i) present fairly in all material respects the financial position
of Splitco and its Subsidiaries as of the dates indicated and the
results of its operations and changes in cash flows for the
respective periods indicated, and (ii) were prepared in accordance
with GAAP, consistently applied.
(c) From
the Splitco Balance Sheet Date to the date hereof, except as set
forth in Section 4.4(c) of the Liberty Disclosure Schedule ,
(i) the business of Splitco and its Subsidiaries has been conducted
in the ordinary course of business consistent with past practices,
(ii) there has not been any event, circumstance, change or effect
that has had or could reasonably be expected to have, individually
or in the aggregate, a Splitco Material Adverse Effect, (iii) no
Subsidiary of Splitco has redeemed any ownership interests in any
Subsidiary of Splitco, (iv) neither Splitco nor a Subsidiary of
Splitco has waived, released, compromised or settled any right or
claim of substantial value to Splitco, a Splitco Subsidiary or any
other Person and (v) neither Splitco nor a Subsidiary of Splitco
has engaged in any transaction or taken any other action except in
the ordinary course of business consistent with past practices. No
RSN
Subsidiary has engaged in any
activity other than those reasonably related to the operation of a
Splitco RSN Network.
(d) There
are no Liabilities of Splitco and its Subsidiaries, and there is no
existing condition, situation or set of circumstances that could
reasonably be expected to result in such a Liability, other than:
(i) Liabilities disclosed or provided for in the Audited Financial
Statements or the Unaudited Financial Statements; (ii) the
Liabilities set forth in Section 4.4(d) of the Liberty
Disclosure Schedule ; and (iii) Liabilities incurred in the
ordinary course of business since the Splitco Balance Sheet Date
that have not had and could not reasonably be expected to have,
individually or in the aggregate, a Splitco Material Adverse
Effect.
|
SECTION 4.5
|
Legal Proceedings .
|
(a) Other
than Actions of the type contemplated by Section 4.5(b) and
judgments, decrees, written agreements, memoranda of understanding
or orders of Governmental Authorities of the type contemplated by
Section 4.5(c), (i) there are no Actions pending or, to the
Knowledge of Liberty, threatened against Liberty (with respect to
the Splitco Business only) or Splitco, or any of their
Subsidiaries, by or before any Governmental Authority, and (ii)
there is no judgment, decree, injunction, ruling or order of any
Governmental Authority outstanding against Liberty (with respect to
the Splitco Business only) or Splitco, or any of their
Subsidiaries, except, in each case, for any such Action, judgment,
decree, injunction, ruling or order that, individually or in the
aggregate, would not reasonably be expected to have a Splitco
Material Adverse Effect.
(b) As
of the date of this Agreement, there is no Action pending or, to
the Knowledge of Liberty, threatened against Liberty, Splitco or
any of their Subsidiaries that seeks, or would reasonably be
expected, to prohibit or restrain the ability of Liberty, Splitco
or any of their Subsidiaries to enter into this Agreement or any of
the Transaction Agreements to which it is a party or to timely
consummate the Transactions.
(c) As
of the date of this Agreement, there are no material judgments,
decrees, written agreements, memoranda of understanding or orders
of any Governmental Authority outstanding against Liberty, Splitco
or any of their Subsidiaries which would reasonably be expected to
prevent, prohibit, materially delay or enjoin the consummation of
the Transactions.
SECTION
4.6 Compliance With Laws . Except as set forth
in Section 4.6 of the Liberty Disclosure Schedule , Liberty,
Splitco and their respective Subsidiaries are (and since January 1,
2008 with respect to the Non-RSN Splitco Business and February 27,
2008 with respect to the RSN Splitco Business, have been) in
compliance in all material respects with all material Laws
applicable to the Non-RSN Splitco Business and the RSN Splitco
Business, as applicable. Since January 1, 2008 with respect to the
Non-RSN Splitco Business and since February 27, 2008 with respect
to the RSN Splitco Business, none of Liberty, Splitco or any of
their respective Subsidiaries has received any material notice from
any Governmental Authority that the Non-RSN Splitco Business and
RSN Splitco Business, as applicable, has been or is being conducted
in material violation of any applicable material Law or that an
investigation or inquiry into any noncompliance with any applicable
material Law is ongoing, pending or, to the Knowledge of Liberty,
threatened. This Section 4.6 does not relate to matters with
respect to
Taxes, which are the subject of
Section 4.8 or the Tax Sharing Agreement, as the case may be, to
Environmental Matters, which are the subject of Section 4.11, to
Employee Benefits Matters, which are the subject of Section 4.9 or
to Labor Matters, which are the subject of Section 4.10.
SECTION
4.7 Permits . Each of Splitco and its
Subsidiaries are in possession of, all franchises, grants,
authorizations, licenses, permits, easements, variances,
exemptions, consents, certificates, approvals and orders
(collectively, “ Permits ”) necessary to own,
lease and operate the Splitco Business as it is being operated as
of the date hereof, other than such Permits which the failure to
hold would not adversely affect the ability of Splitco and its
Subsidiaries to conduct the Splitco Business in all material
respects as it is currently conducted (collectively, the “
Splitco Permits ”). Except as set forth in Section
4.7 of the Liberty Disclosure Schedule , (a) there is no Action
pending, or, to the Knowledge of Liberty, threatened, regarding any
of the Splitco Permits and (b) each such Splitco Permit is in full
force and effect other than such Permits the failure of which to be
in full force and effect would not, adversely affect the ability of
Splitco and its Subsidiaries to conduct the Splitco Business in all
material respects as it is currently conducted or in the aggregate,
reasonably be expected to have a Splitco Material Adverse
Effect.
|
SECTION 4.8
|
Tax Matters .
|
Except as otherwise set forth in
Section 4.8 of the Liberty Disclosure Schedule :
(a) (i)
All material Tax Returns required to be filed with any Taxing
Authority by or on behalf of Splitco or any of its Subsidiaries or
otherwise with respect to the Splitco Business have been filed when
due (taking into account any extension of time within which to
file) in accordance with all applicable Laws; (ii) all such Tax
Returns are accurate and complete in all material respects and have
been prepared in substantial compliance with all applicable Laws;
(iii) all material Taxes due and payable by Splitco or any of its
Subsidiaries or with respect to the Splitco Business have been
timely paid, or withheld and remitted to the appropriate Taxing
Authority; (iv) no written claim has been made by any Taxing
Authority in a jurisdiction where Splitco or any of its
Subsidiaries does not file a Tax Return that Splitco or any of its
Subsidiaries is, or may be, subject to Tax by or required to file
or be included in a Tax Return in that jurisdiction; and (v) there
are no Liens on any of the assets of Splitco or any of its
Subsidiaries or the Splitco Business that arose in connection with
any failure (or alleged failure) to pay any Tax (except for Liens
that arise by operation of Law for Taxes not yet due and payable).
Except as would not reasonably be expected to have a Material
Adverse Effect on Liberty (after giving effect to the Split-Off),
(i) all material Tax Returns required to be filed with any Taxing
Authority by or on behalf of a Liberty Affiliated Group or a
Liberty Combined Group have been filed when due (taking into
account any extension of time within which to file) in accordance
with all applicable Laws; (ii) all such Tax Returns are accurate
and complete in all material respects and have been prepared in
substantial compliance with all applicable Laws; and (iii) all
material Taxes due and payable with by or with respect to a Tax
Return filed by a Liberty Affiliated Group or a Liberty Combined
Group have been timely paid, or withheld and remitted to the
appropriate Taxing Authority.
(b) Each
of Splitco and its Subsidiaries has complied with all applicable
Laws relating to the payment and withholding of any material amount
of Taxes and have, within the
time and the manner prescribed by
applicable Law, withheld from and paid over to the proper Taxing
Authorities all material amounts required to be so withheld and
paid over under all applicable Laws.
(c) (i)
No outstanding written claim has been received by, and no audit,
action, suit or proceeding is in progress, against or with respect
to Splitco or any of its Subsidiaries in respect of any material
Tax; and (ii) all material deficiencies, assessments or proposed
adjustments asserted against Splitco or any of its Subsidiaries by
any Taxing Authority have been paid or fully and finally settled.
Except as would not reasonably be expected to have a Material
Adverse Effect on Liberty (after giving effect to the Split-Off),
(i) no outstanding written claim has been received by, and no
audit, action, suit or proceeding is in progress, against or with
respect to Liberty or any of its Subsidiaries in respect of a Tax
Return filed by a Liberty Affiliated Group or a Liberty Combined
Group; and (ii) all material deficiencies, assessments or proposed
adjustments asserted against Liberty or any of its Subsidiaries by
any Taxing Authority in respect of such a Tax Return have been paid
or fully and finally settled.
(d) Prior
to the date hereof, Liberty has furnished or made available to
DIRECTV complete and accurate copies of all portions of United
States federal income Tax Returns and material state income or
franchise Tax Returns filed by (i) Liberty to the extent they
relate to Splitco, any of its Subsidiaries or the Splitco Business,
or (ii) Splitco or any of its Subsidiaries, and including, in each
case, any amendments thereto, for all taxable periods beginning
after December 31, 2004.
(e) None
of Splitco or any of its Subsidiaries (i) is or has been a member
of an affiliated group (within the meaning of Section 1504 of the
Code) filing a consolidated federal income Tax Return, other than a
Liberty Affiliated Group, (ii) is or has been a member of any
affiliated, combined, consolidated, unitary or similar group for
state, local or foreign Tax purposes other than a Liberty Combined
Group, (iii) is a party to any tax sharing, tax allocation or tax
indemnification agreement (other than the Tax Sharing Agreement) or
(iv) has any liability for the Taxes of any Person under Treasury
Regulations Section 1.1502-6 (or any similar provision of state,
local, or foreign Law) or as a transferee or successor, except for
such liability arising from membership in a Liberty Affiliated
Group or a Liberty Combined Group.
(f) None
of Splitco or any of its Subsidiaries (other than GSN or any of its
Subsidiaries) will be required to include any material item of
income in, or exclude any material item of deduction from, taxable
income for any taxable period (or portion thereof) ending after the
Closing Date as a result of any (i) change in method of accounting
for a taxable period (or portion thereof) ending on or prior to the
Closing Date, (ii) “closing agreement” as described in
Section 7121 of the Code (or any corresponding or similar provision
of state, local or foreign income Tax Law) executed prior to the
Closing, or (iii) installment sale or open transaction occurring
prior to the Closing.
(g) No
waiver or extension of any statute of limitations in respect of
material Taxes or any extension of time with respect to a material
Tax assessment or deficiency is in effect for Splitco or any of its
Subsidiaries.
(h) None
of Splitco or any of its Subsidiaries has participated in a
“listed transaction” within the meaning of Treasury
Regulations Section 1.6011-4(b)(2).
(i) Neither
Splitco nor any of its Subsidiaries is a party to or bound by any
advance pricing agreement, closing agreement or other agreement or
ruling relating to Taxes with any Taxing Authority that will remain
in effect with respect to Splitco or any of its Subsidiaries after
the Closing (other than any IRS Ruling or other rulings related to
the Transactions or the News Exchange).
|
SECTION 4.9
|
Employee Benefits .
|
(a)
Section 4.9(a) of the Liberty Disclosure Schedule
sets forth as of the date of this
Agreement, a list of all material “employee pension benefit
plans” (as defined in Section 3(2) of ERISA), “employee
welfare benefit plans” (as defined in Section 3(1) of ERISA),
and deferred compensation, bonus, retention bonus, incentive,
severance, stock bonus, stock option, restricted stock, stock
appreciation right, stock purchase, holiday pay, and vacation pay
plans, and any other employee benefit plan, program, policy or
arrangement covering employees of the Splitco Business as of the
date hereof, that are currently either maintained by or contributed
to by Liberty, Splitco or any of their respective Subsidiaries or
to which Liberty, Splitco or any of their respective Subsidiaries
is obligated to make payments or otherwise have any liability
(collectively, the “ Splitco Employee Benefit Plans
”), and each employment, severance, retention, individual
consulting or similar agreement covering service providers of the
Splitco Business currently in effect that has been entered into by
Liberty, Splitco or any of their respective Subsidiaries
(collectively, the “ Splitco Employment Agreements
”). Each Splitco Employee Benefit Plan sponsored, maintained
or contributed to solely by Splitco and its Subsidiaries (and not
Liberty) which provides benefits solely with respect to the
Transferred Employees, or to directors and consultants of Splitco
and its Subsidiaries, and no other active employees, consultants or
directors of Liberty or any of its Subsidiaries is separately
identified in Section 4.9(a) of the Liberty Disclosure
Schedule (collectively,
the “ Transferred Employee Benefit Plans ”).
Summaries of all Splitco Employee Benefit Plans (except for plans
contributed to pursuant to a Collective Bargaining Agreement set
forth in Section 4.9(a) of the Liberty Disclosure Schedule
), copies of all such written Splitco Employee Benefit Plans and
Splitco Employment Agreements and written summaries of all
unwritten Splitco Employee Benefit Plans have been made available
to DIRECTV.
(b) No
Controlled Group Liability has been incurred by Splitco or any
trade or business that together with Splitco would be deemed a
“single employer,” within the meaning of Section
4001(b) of ERISA (an “ ERISA Affiliate ”), no
condition exists that presents a material risk to Splitco or any of
its ERISA Affiliates of incurring any Controlled Group Liability,
and no Controlled Group Liability would reasonably be expected to
be incurred by Splitco or any of its ERISA Affiliates following the
Closing by reason of Splitco or the ERISA Affiliate having been an
ERISA Affiliate of Liberty (or of any other ERISA Affiliate of
Liberty) prior to the Closing. For purposes of this Agreement,
“ Controlled Group Liability ” means any and all
liabilities (i) under Title IV of ERISA, other than for payment of
premiums to the Pension Benefit Guaranty Corporation (which
premiums have been paid when due), (ii) under the minimum funding
requirements of ERISA and (iii) for violation of the continuation
coverage requirements of Section 601 et seq. of ERISA and Section
4980B of the Code or the group health requirements of
Sections 9801 et seq. of the Code
and Sections 701 et seq. of ERISA. The consummation of the
Transactions will not result in the occurrence of any reportable
event within the meaning of Section 4043(c) of ERISA with respect
to any pension plan maintained by Liberty or any ERISA Affiliate of
Splitco. Except as disclosed in Section 4.9(b)(i) of the Liberty
Disclosure Schedule , none of the Transferred Employee Benefit
Plans is subject to Title IV of ERISA or Section 412 or 430 of the
Code or is a Multiemployer Plan, and except as disclosed in
Section 4.9(b)(ii) of the Liberty Disclosure Schedule , none
of the other Splitco Employee Benefit Plans is subject to Title IV
of ERISA or Section 412 or 430 of the Code or is a Multiemployer
Plan
(c) Except
as set forth in Section 4.9(c) of the Liberty Disclosure
Schedule , neither Splitco nor any of its ERISA Affiliates has
any liability, fixed or contingent, with respect to a Multiemployer
Plan.
(d) Except
as would not have a Splitco Material Adverse Effect, each Splitco
Employee Benefit Plan has been operated and administered in
accordance with its terms and applicable Law, including ERISA and
the Code. There are no material actions, suits or claims pending
(other than routine claims for benefits) or, to the Knowledge of
Liberty, threatened against, or with respect to, any of the Splitco
Employee Benefit Plans or their assets. Except as would not have a
Splitco Material Adverse Effect, there have been no
“prohibited transactions” (as described in Section 406
of ERISA or Section 4975 of the Code) with respect to any of the
Splitco Employee Benefit Plans. Except as set forth in Section
4.9(d) of the Liberty Disclosure Schedule , other than routine
filings, there is no matter pending or audit in progress with
respect to any of the Splitco Employee Benefit Plans before or by
any Governmental Authority.
(e) Each
Splitco Employee Benefit Plan intended to be qualified, within the
meaning of Section 401(a) of the Code, has received a favorable
determination letter regarding the Employee Benefit Plan’s
qualification from the IRS with respect to all amendments required
by applicable Law or is a prototype or volume submitter plan
subject to a favorable opinion letter regarding the Employee
Benefit Plan’s qualification from the IRS (or such plan has
been submitted to the IRS for a determination as to its
qualification within the applicable remedial amendment
period).
(f) Except
as set forth in Section 4.9(f) of the Liberty Disclosure
Schedule , the execution and delivery of this Agreement and the
consummation of the Transactions will not (except as otherwise
provided in this Agreement) (A) require Splitco or any of its
Subsidiaries to make a larger contribution to, or pay greater
benefits or provide other rights under, any Splitco Employee
Benefit Plan, any Splitco Employment Agreement or any other
employee benefit plan or arrangement than it otherwise would,
whether or not some other subsequent action or event would be
required to cause such payment or provision to be triggered or (B)
create, give rise to or accelerate any additional benefits, vested
rights or service credits under any Splitco Employee Benefit Plan,
Splitco Employment Agreement or any other employee benefit plan or
arrangement. In connection with the consummation of the
Transactions, no payment of money or other property, acceleration
of benefits or provision of other rights has been made under this
Agreement, any Splitco Employee Benefit Plan or otherwise that
would be nondeductible for income Tax purposes by Splitco or any of
its Subsidiaries by virtue Section 280G of the Code.
(g) Except
as set forth in Section 4.9(g) of the Liberty Disclosure
Schedule , no Transferred Employee Benefit Plan provides post
retirement medical, disability, life insurance benefits or other
welfare benefits coverage, except as required by Section 4980B of
the Code or Part 6 of Title I of ERISA.
(h) Each
Splitco Employee Benefit Plan that is a nonqualified deferred
compensation plan subject to Section 409A of the Code has been
operated and administered in good faith compliance with Section
409A of the Code from the period beginning January 1, 2008 with
respect to the Non-RSN Splitco Business, and February 27, 2008 with
respect to the RSN Splitco Business, through the date
hereof.
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SECTION 4.10
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Labor Matters .
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(a) Except
as set forth in Section 4.10 of the Liberty Disclosure
Schedule , there are no collective bargaining agreements, union
contracts or similar agreements or arrangements in effect that
cover any employee of Splitco or any of its Subsidiaries (each, a
“ Splitco Collective Bargaining Agreement ”).
With respect to the Splitco Business, (a) there is no material
labor strike, dispute, slowdown, lockout or stoppage pending or, to
the Knowledge of Liberty, threatened, and neither Splitco nor any
of its Subsidiaries has experienced any labor strike, dispute,
slowdown, lockout or stoppage relating to the Splitco Business or
any employee of Splitco or any of its Subsidiaries since January 1,
2007 with respect to the Non-RSN Splitco Business and February 27,
2008 with respect to the RSN Splitco Business; (b) there is no
material unfair labor practice charge or complaint pending or, to
the Knowledge of Liberty, threatened before the National Labor
Relations Board or before any similar state or foreign agency; (c)
there is no material grievance or arbitration arising out of any
Splitco Collective Bargaining Agreement or other grievance
procedure; (d) no material charges are pending before the Equal
Employment Opportunity Commission or any other agency responsible
for the prevention of unlawful employment practices; and (e)
Liberty (with respect to the Splitco Business only), Splitco and
their Subsidiaries have complied in all material respects with all
Laws relating to the employment of labor, including provisions
thereof relating to wages, hours, equal opportunity, collective
bargaining, affirmative action, occupational safety and health,
immigration and the withholding and payment of social security and
other taxes, and no claim to the contrary has been made by any
employee or Governmental Authority.
(b) Since
January 1, 2007, neither Liberty, Splitco nor any of their
Subsidiaries or Affiliates has effected any of the following with
respect to an employee of Splitco or any of its Subsidiaries: (a) a
“plant closing” (as defined in the WARN Act) affecting
any site of employment or one or more facilities or operating units
within any site of employment or facility; or (b) a “mass
layoff” (as defined in the WARN Act) affecting any site of
employment or facility. None of the Transactions or any of the
actions taken by Liberty or its Affiliates prior to the Split-Off
Effective Time or Splitco and its Subsidiaries after the Split-Off
Effective Time in preparation for the Closing have or will result
in plant closing or mass layoff under the WARN Act.
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SECTION 4.11
|
Environmental Matters .
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(a) The
RSN Splitco Business is currently being conducted in compliance in
all material respects with, and, since February 27, 2008 has been
conducted in compliance in all material respects with, all
applicable Environmental Laws. The Non-RSN Splitco Business is
currently being conducted in compliance in all material respects
with, and, since January 1, 2007 has been conducted in compliance
in all material respects with, all applicable Environmental
Laws.
(b) Except
as would not reasonably be expected to form the basis of any
material Environmental Claim against the RSN Splitco Business,
since February 27, 2008, the RSN Splitco Business has not disposed
of, Released, transported, stored, or arranged for the disposal of
any Hazardous Materials to, at or upon: (i) any location other than
a site lawfully permitted to receive such Hazardous Materials; (ii)
any premises currently or formerly owned or leased by Splitco or
any of its Subsidiaries, except for the use of household cleaners
and office products in the ordinary course of business in
compliance with applicable Environmental Laws; or (iii) any site
which has been placed on the National Priorities List, CERCLIS or
their state equivalents. Except as would not reasonably be expected
to form the basis of any material Environmental Claim against the
Non-RSN Splitco Business, since January 1, 2007, the Non-RSN
Splitco Business has not disposed of, Released, transported,
stored, or arranged for the disposal of any Hazardous Materials to,
at or upon: (i) any location other than a site lawfully permitted
to receive such Hazardous Materials; (ii) any premises currently or
formerly owned or leased by Splitco or any of its Subsidiaries,
except for the use of household cleaners and office products in the
ordinary course of business in compliance with applicable
Environmental Laws; or (iii) any site which has been placed on the
National Priorities List, CERCLIS or their state
equivalents.
(c) Since
February 27, 2008, the operations of the RSN Splitco Business have
not resulted in any Release of Hazardous Materials at or from any
location currently owned or formerly owned or operated by Splitco
or any of its Subsidiaries that requires cleanup that has not been
completed to the satisfaction of the relevant Governmental
Authority or would reasonably be expected to form the basis of any
material Environmental Claim against the RSN Splitco Business.
Since January 1, 2007, the operations of the Non-RSN Splitco
Business have not resulted in any Release of Hazardous Materials at
or from any location currently owned or formerly owned or operated
by Splitco or any of its Subsidiaries that requires cleanup that
has not been completed to the satisfaction of the relevant
Governmental Authority or would reasonably be expected to form the
basis of any material Environmental Claim against the Non-RSN
Splitco Business.
(d) The
RSN Splitco Business is not subject to, and, since February 27,
2008, none of Splitco or its Subsidiaries has received written
notice of, any existing, pending, or, to the Knowledge of Liberty,
threatened material Action, by any Person under any Environmental
Laws or involving the presence, Release or threatened Release of
any Hazardous Material at any location currently or formerly owned
or operated as part of the RSN Splitco Business. The Non-RSN
Splitco Business is not subject to, and, since January 1, 2007,
none of Splitco or its Subsidiaries has received written notice of,
any existing, pending, or, to the Knowledge of Liberty, threatened
material Action, by any Person under any Environmental Laws or
involving the presence, Release or threatened Release of any
Hazardous Material at any location currently or formerly owned or
operated as part of the Non-RSN Splitco Business.
(a) Set
forth in Section 4.12(a) of the Liberty Disclosure
Schedule is a list of (x)
each Contract that would be required to be filed as an exhibit to
an Annual Report on Form 10-K under the Exchange Act with respect
to Splitco as the registrant or the Splitco Form S-4 if such
registration statement or report was filed by Splitco with the SEC
on the date hereof and after giving effect to the transactions
contemplated by the Reorganization Agreement, and (y) each of the
following to which Liberty (only as such Contracts or agreements
relate to the Splitco Business), Splitco or any of their respective
Subsidiaries is a party:
(i) each
advertising and sponsorship Contract pursuant to which payment of
more than $200,000 annually is required to be paid to Liberty,
Splitco or any of their Subsidiaries;
(ii) each
Contract entered into (A) since January 1, 2007 with respect
to a Non-RSN Splitco Business and (B) since February 27, 2008
with respect to the RSN Splitco Business, providing for the
acquisition, sale, lease or other disposition of a material portion
of the assets (by merger, purchase or sale of stock or assets or
otherwise) of Liberty, Splitco or any of their Subsidiaries other
than in the ordinary course of business;
(iii) each
material Contract relating to the production or licensing of any
programming for (A) any Splitco RSN Network (including each
material definitive rights agreement relating to the telecast of
professional, collegiate conference, university or high school
sports teams or any sports related tournaments or events on any
Splitco RSN Network) or (B) the GSN Network (including each
material license agreement relating to the telecast of game shows
or other programming content on the GSN Network);
(iv) each
affiliation, distribution, carriage or similar agreement between
Liberty, Splitco or any of their Subsidiaries (or under which
Liberty, Splitco or any of their Subsidiaries is bound or is liable
or pursuant to which Liberty, Splitco or any of their Subsidiaries
or any of their properties or assets is subject) and any of its
affiliates, distributors, carriers, over-the-air broadcast
operators and multichannel video programming distributors, in which
such affiliate, distributor, carrier or operator accounts for at
least (A) 100,000 subscribers to a Splitco RSN Network or (B) with
respect to the GSN Network, 250,000 subscribers;
(v) each
Contract pursuant to which Liberty, Splitco or any of their
Subsidiaries is obligated (or assuming performance of any Contract
in effect at the date hereof, would be obligated) to any Person for
payments in respect of capital expenditures in excess of
$500,000;
(vi) each
currently effective joint venture or partnership or similar
agreement and each Contract providing for the formation of a joint
venture, limited liability company, long-term alliance or
partnership with a third party (for purposes hereof, with respect
to Splitco and its Subsidiaries, a third party shall include
Liberty and
any of its Subsidiaries that are not
related to the Splitco Business) or involving an equity
investment;
(vii) each
currently effective Contract (including any employment agreements)
which (A) materially restricts the ability of Liberty, Splitco or
any of their Subsidiaries or any of their Affiliates or the Splitco
Business to engage in any business activity in any geographic area
or line of business following the Closing or (B) materially
restricts the ability of Liberty, Splitco or any of their
Subsidiaries or any of their Affiliates or the Splitco Business to
compete with any Person following the Closing;
(viii) each
Contract (or group of related Contracts) under which there has been
created, incurred, assumed, or guaranteed any indebtedness, or that
relates to the lending or advancing of amounts or investment in any
other Person, in each case, in excess of $200,000, or providing for
the creation of any Lien securing an obligation likely to exceed
$200,000 upon any asset of Liberty, Splitco or any of their
Subsidiaries;
(ix) each
lease, sublease or similar agreement relating to tangible personal
property used or held for use in the Splitco Business, for an
annual rent in excess of $200,000, or agreement regarding the
purchase of real property;
(x) any
currently effective Contract concerning the marketing or
distribution by third parties of any products or services of the
Splitco Business (including any Contract requiring the payment of
any sales or marketing or distribution commissions or granting to
any Person rights to market, distribute or sell such products or
services) involving sales of products of more than $200,000
annually;
(xi) any
other currently effective Contract which was entered into other
than in the ordinary course of business involving payments to or
from third parties in excess of $500,000 over the remaining term of
such Contract;
(xii) each
satellite and transponder agreement to which Liberty, Splitco or
any of their Subsidiaries is a party or pursuant to which Liberty,
Splitco or any of their Subsidiaries or under which Liberty,
Splitco or any of their Subsidiaries is bound or is liable or
pursuant to which Liberty, Splitco or any of their Subsidiaries or
any of its properties or assets is subject;
(xiii) each
Contract with (A) any Governmental Authority, (B) director or
officer of Liberty, Splitco or any of their respective Subsidiaries
or (C) Liberty or its Affiliates, on the one hand, and Splitco or
its Affiliates, on the other hand;
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(xiv)
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each voting agreement or registration rights
agreement; and
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(xv)
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each commitment or agreement to enter into any
of the foregoing.
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(b) Each
of the Contracts and other documents required to be listed in
Section 4.12(a) of the Liberty Disclosure Schedule ,
together with any and all other Contracts of such type entered into
in accordance with Section 6.2, is referred to herein as a “
Splitco Material Contract ”. Liberty has made
available to DIRECTV or its Representatives correct and
complete
copies of all such Splitco Material
Contracts with all amendments thereto. Each such Splitco Material
Contract is valid, binding and enforceable against Liberty, Splitco
or any of their respective Subsidiaries and the other parties
thereto in accordance with its terms and is in full force and
effect, subject to expiration in accordance with its terms. Except
as set forth in Section 4.12(b) of the Liberty Disclosure
Schedule , none of Liberty, Splitco or any of their respective
Subsidiaries is in material default under or in material breach of
any such Splitco Material Contract, and no event has occurred that,
with notice or lapse of time, or both, would constitute such a
material default. Except as set forth in Section 4.12(b) of the
Liberty Disclosure Schedule , each of the other parties to the
Splitco Material Contracts has performed in all material respects
all of the obligations required to be performed by it under, and is
not in material default under, any such Splitco Material Contract,
and to the Knowledge of Liberty, no event has occurred that, with
notice or lapse of time, or both, would constitute such a material
default.
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SECTION 4.13
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Real Estate .
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(a) None
of Splitco or any of its Subsidiaries owns or has owned any real
property.
(b) Each
of Splitco and its Subsidiaries has good and valid leasehold
interests in all real property leased or subleased by Splitco or
any of its Subsidiaries (the “ Splitco Leased Real
Property ”), except for any such Splitco Leased Real
Property which is no longer used or useful in the conduct of the
Splitco Business. Section 4.13(b) of the Liberty Disclosure
Schedule sets forth a
list of all Splitco Leased Real Property.
(c) Each
of Splitco and its Subsidiaries has complied in all material
respects with the terms of all lease or sublease agreements
pursuant to which a Splitco Leased Real Property is leased or
subleased (the “ Splitco Real Property Leases ”)
to which it is a party and under which it is in occupancy, and all
such Splitco Real Property Leases are in full force and effect.
Section 4.13(c) of the Liberty Disclosure Schedule
sets forth a complete list, as of
the date hereof, of all the Splitco Real Property Leases. Each of
Splitco or its Subsidiaries, as applicable, enjoy peaceful and
undisturbed possession under all of the Splitco Real Property
Leases and there are no existing material defaults beyond any
applicable grace periods under the Splitco Real Property
Leases.
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SECTION 4.14
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Intellectual Property .
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(a)
Section 4.14(a)(i) of the Liberty Disclosure Schedule
sets forth a list of all patents,
patent applications, registered trademarks, material unregistered
trademarks, registered copyrights and Internet domain name
registrations that are, as of the date of this Agreement, owned by
Splitco and its Subsidiaries (the “ Splitco Owned
Intellectual Property ”). Splitco and its Subsidiaries
own the Splitco Owned Intellectual Property, free and clear of all
Liens and have the exclusive right to use and sublicense, without
payment to any other Person, all of the Splitco Owned Intellectual
Property. As of the date hereof, no license relating to any of the
Splitco Owned Intellectual Property has been granted, except as
provided in Section 4.14(a)(ii) of the Liberty Disclosure
Schedule , and except for Customer Agreements entered into in
the ordinary course of business.
(b)
Section 4.14(b) of the Liberty Disclosure Schedule
sets forth a list that includes all
material Intellectual Property that is held for use under license
by Splitco and its Subsidiaries as of the date hereof, including
the right to use Intellectual Property related to FOX Sports Net in
connection with the operation of the RSN Splitco Business (the
“ Splitco Licensed Intellectual Property ”). As
of the date hereof, neither Liberty, Splitco nor any of their
respective Subsidiaries have given or received any notice of
material default or of any event which with the lapse of time would
constitute a material default under any material agreement relating
to the Splitco Licensed Intellectual Property; neither Liberty,
Splitco nor any of their respective Subsidiaries, nor, to the
Knowledge of Liberty, any other Person, currently is in material
default under any such agreement.
(c) To
the Knowledge of Liberty, as of the date hereof, no third party is
infringing in any material respect a proprietary right in any
Splitco Owned Intellectual Property. To the Knowledge of Liberty,
the use of any Splitco Owned Intellectual Property or Splitco
Licensed Intellectual Property in connection with the Splitco
Business as currently conducted does not materially infringe upon,
misappropriate, violate or conflict in any way with any material
Intellectual Property rights of any Person.
(d) Except
as set forth in Section 4.14(d) of the Liberty Disclosure
Schedule , there is no pending or, to the Knowledge of Liberty,
threatened material claim (i) challenging the validity or
enforceability of, or contesting Splitco’s or any of its
Subsidiaries’ right to make, sell, offer to sell, and/or use
any of the Splitco Owned Intellectual Property or Splitco Licensed
Intellectual Property; (ii) challenging the validity or
enforceability of any agreement relating to the Splitco Owned
Intellectual Property or Splitco Licensed Intellectual Property; or
(iii) asserting that the manufacture, sale, offer of sale, and/or
use of any Splitco Owned Intellectual Property or Splitco Licensed
Intellectual Property infringes upon, misappropriates, violates or
conflicts in any way with the Intellectual Property rights of any
Person.
(e) The
making, using, selling, offering to sell, or other implementation
of any apparatus, systems, processes, methods, or other
technologies (and/or combination thereof) used in or necessary for
operation and conducting of the Splitco Business as currently
conducted do not infringe upon, misappropriate, violate, or
conflict in any way with the material Intellectual Property rights
of any Person.
SECTION
4.15
Affiliate Transactions . Except for the Transaction
Agreements, Section 4.15 of the Liberty Disclosure
Schedule sets forth, as
of the date hereof, all material Contracts and all material
allocations, obligations, transactions or other arrangements (oral
or written) between Liberty or any of its Affiliates (other than
Splitco or any of its Subsidiaries), on the one hand, and Splitco
or any of its Subsidiaries, on the other hand, that, in each case,
shall be in effect following the Closing (other than any Contract,
allocation, obligation, transaction or arrangement to which DIRECTV
or any of its Subsidiaries is a party).
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SECTION 4.16
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Absence of Operations; Sufficiency of
Assets .
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(a) Prior
to the Split-Off Effective Time, Splitco has conducted no
activities other than in connection with the Transactions
(including the execution and delivery of this Agreement or the
Transaction Agreements to which it is or will be a
party).
(b) At
the Merger Effective Time, the assets of Splitco and its
Subsidiaries will be sufficient to permit Splitco and its
Subsidiaries to conduct immediately following the Merger Effective
Time the Splitco Business in all material respects in the manner as
the Splitco Business was being conducted as of the date
hereof.
SECTION
4.17
Operations of the Splitco Business . Except as set forth in
Section 4.17 of the Liberty Disclosure Schedule , (a) since
December 31, 2008 and through the date of this Agreement, the
Splitco Business has been conducted in the ordinary course of
business consistent with past practice and there has not been since
such date the occurrence of any fact, event or circumstance
described in Sections 6.2(a)(iii), (iv), (vi), (vii), (viii)(A) or
(E), (x), (xii), (xiv), (xv), (xvi), (xvii) or (xviii) and (b)
since December 31, 2008, there has not been the occurrence of any
fact, event or circumstance described in Sections 6.2(a)(i) or
(ii).
ARTICLE V
Representations and Warranties of
DIRECTV
Except as set forth in the
correspondingly identified subsection of the disclosure schedule
delivered by DIRECTV to Liberty and Splitco simultaneously with the
execution of this Agreement (the “ DIRECTV Disclosure
Schedule ”), DIRECTV represents and warrants to Liberty
and Splitco:
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SECTION 5.1
|
Organization, Standing and Corporate
Power .
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(a) Each
of DIRECTV, Holdings, Merger Sub One and Merger Sub Two is (a) a
corporation duly organized, validly existing and duly qualified or
licensed and in good standing under the Laws of the state or
jurisdiction of its organization with full corporate power and
authority to own, lease, use and operate its properties and to
conduct its business as currently conducted, and (b) duly qualified
or licensed to do business and, to the extent applicable, in good
standing in any other jurisdiction in which the nature of the
business conducted by it or the property it owns, leases, uses or
operates requires it to be so qualified, licensed or in good
standing, except where the failures to be so qualified, licensed or
in good standing have not had a Material Adverse Effect on DIRECTV
(“ DIRECTV Material Adverse Effect
”).
(b)
Section 5.1(b) of the DIRECTV Disclosure Schedule
lists all Subsidiaries of DIRECTV
together with (i) the jurisdiction of organization of each such
Subsidiary and (ii) in the case of Subsidiaries that are not
wholly-owned by DIRECTV, the percentage owned by DIRECTV, or in the
case of an indirect Subsidiary, the percentage owned by a
Subsidiary of DIRECTV. Except as set forth in Section 5.1(b) of
the DIRECTV Disclosure Schedule , all the outstanding shares of
capital stock of, or other equity interests in, each Subsidiary of
DIRECTV have been duly authorized and validly issued and are fully
paid and nonassessable and are owned directly or indirectly by
DIRECTV free and clear of all Liens. Except as set forth in
Section 5.1(b) of the DIRECTV Disclosure Schedule , DIRECTV
does not own, directly or indirectly, any capital stock, voting
securities or equity interests in any Person.
(c) DIRECTV
has delivered to Liberty correct and complete copies of its
certificate of incorporation and bylaws (the “ DIRECTV
Charter Documents ”) and correct and complete copies of
the certificates of incorporation, bylaws and stockholders’
or governance
agreements (or comparable
organizational documents) of each of its Subsidiaries (the “
DIRECTV Subsidiary Documents ”), in each case as
amended to the date of this Agreement. All such DIRECTV Charter
Documents and DIRECTV Subsidiary Documents are in full force and
effect and neither DIRECTV nor any of its Subsidiaries is in
violation of any of their respective provisions.
(d) DIRECTV
has caused Holdings to be organized under the Laws of the State of
Delaware and owns all of the capital stock of Holdings. The
authorized capital stock of Holdings consists of 1,000 shares of
common stock, par value $0.01 per share, of which one share has
been issued to DIRECTV, which share is validly issued, fully paid
and nonassessable, and is owned by DIRECTV free and clear of any
Liens. Except as set forth in this Section 5.1(d) and as
contemplated by this Agreement and the Transaction Agreements,
there are no shares of capital stock, voting securities or equity
interests of Holdings issued and outstanding or any subscriptions,
options, warrants, calls, convertible or exchangeable securities,
rights, commitments or agreements of any character providing for
the issuance of any shares of capital stock, voting securities or
equity interests of Holdings, including any representing the right
to purchase or otherwise receive any shares of common stock or
preferred stock of Holdings. There are no outstanding obligations
of Holdings to repurchase, redeem or otherwise acquire any shares
of capital stock, voting securities or equity interests (or any
options, warrants or other rights to acquire any shares of capital
stock, voting securities or equity interests) of
Holdings.
(e) DIRECTV
has caused Holdings to organize, and Holdings has organized, Merger
Sub One and Merger Sub Two under the Laws of the State of Delaware.
The authorized capital stock of Merger Sub One consists of 1,000
shares of common stock, par value $0.01 per share, all of which are
validly issued, fully paid and nonassessable, and are owned by
Holdings free and clear of any Liens. The authorized capital stock
of Merger Sub Two consists of 1,000 shares of common stock, par
value $0.01 per share, all of which are validly issued, fully paid
and nonassessable, and are owned by Holdings free and clear of any
Liens. Except as set forth in this Section 5.1(e), there are no
shares of capital stock, voting securities or equity interests of
Merger Sub One or Merger Sub Two issued and outstanding or any
subscriptions, options, warrants, calls, convertible or
exchangeable securities, rights, commitments or agreements of any
character providing for the issuance of any shares of capital
stock, voting securities or equity interests of Merger Sub One or
Merger Sub Two, including any representing the right to purchase or
otherwise receive any capital stock of Merger Sub One or Merger Sub
Two. There are no outstanding obligations of Merger Sub One or
Merger Sub Two to repurchase, redeem or otherwise acquire any
shares of its own capital stock, voting securities or equity
interests (or any options, warrants or other rights to acquire any
shares of capital stock, voting securities or equity
interests).
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SECTION 5.2
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Capitalization .
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(a) The
authorized capital stock of DIRECTV consists of 3,000,000,000
shares of DIRECTV Common Stock, 275,000,000 shares of Class B
common stock, par value $0.01 per share (the “ DIRECTV
Class B Common Stock ”), 800,000,000 shares of excess
stock, par value $0.01 per share (the “ DIRECTV Excess
Stock ”) and 9,000,000 shares of preferred stock, par
value $0.01 per share (the “ DIRECTV Preferred Stock
”). At the close of business on April 30, 2009, (i)
1,008,557,284 shares of DIRECTV Common Stock were issued
and
outstanding, (ii) 121,611 shares of
DIRECTV Common Stock were held by DIRECTV in its treasury, (iii)
74,769,205 shares of DIRECTV Common Stock were reserved for
issuance under the DIRECTV Stock Plans (of which 39,843,304 shares
of DIRECTV Common Stock were subject to either outstanding options
to purchase, or restricted stock units with respect to, shares of
DIRECTV Common Stock granted under the DIRECTV Stock Plan), (iv) no
shares of DIRECTV Preferred Stock were issued or outstanding, (v)
no shares of DIRECTV Class B Common Stock were issued or
outstanding, and (vi) no shares of DIRECTV Excess Stock were issued
or outstanding. All outstanding shares of DIRECTV Common Stock have
been duly authorized and validly issued and are fully paid,
nonassessable and free of preemptive rights. Included in Section
5.2(a) of the DIRECTV Disclosure Schedule is (x) a correct and complete list, as of April
30, 2009, of all outstanding options or other rights to purchase or
receive shares of DIRECTV Common Stock granted under the DIRECTV
Stock Plans or otherwise, and, for each such option or other right,
(A) the number of shares of DIRECTV Common Stock subject thereto
and the exercise price thereof, and (B) the grant date thereof and
(y) a correct and complete list of all outstanding options to
purchase shares of DIRECTV Common Stock granted under the DIRECTV
Stock Plans since January 1, 2008, including the number of shares
of DIRECTV Common Stock subject thereto, the exercise price
thereof, the terms of vesting, the grant and expiration dates
thereof and the name of the holder thereof. All DIRECTV Stock
Options have an exercise price equal to no less than the fair
market value of the underlying shares of DIRECTV Common Stock on
the date of grant. Since April 30, 2009, DIRECTV has not issued any
shares of DIRECTV capital stock, voting securities or equity
interests, or any securities convertible into or exchangeable or
exercisable for any shares of DIRECTV capital stock, voting
securities or equity interests, other than pursuant to the exercise
of outstanding options referred to above in this Section
5.2(a).
(b) There
are no outstanding obligations of DIRECTV or any of its
Subsidiaries to repurchase, redeem or otherwise acquire any shares
of capital stock, voting securities or equity interests (or any
options, warrants or other rights to acquire any shares of capital
stock, voting securities or equity interests) of
DIRECTV.
(c) There
are no issued or outstanding bonds, debentures, notes or other
indebtedness of DIRECTV or any of its Subsidiaries having the right
to vote (or convertible into, or exchangeable for, securities
having the right to vote), upon the happening of a certain event or
otherwise, on any matters on which the equity holders of DIRECTV or
any of its Subsidiaries may vote.
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SECTION 5.3
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Authority; Noncontravention; Voting
Requirements .
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(a) DIRECTV
has all necessary corporate power and authority to execute and
deliver this Agreement and each of the other Transaction Agreements
to which it is a party and, subject to obtaining the DIRECTV
Stockholder Approval, to perform its obligations hereunder and
thereunder, and to consummate the Transactions. The execution,
delivery and performance by DIRECTV of this Agreement and each of
the other Transaction Agreements to which it is a party, and the
consummation by it of the Transactions, have been duly authorized
and approved by DIRECTV’s Board of Directors and the Special
Committee of DIRECTV’s Board of Directors, and except for
obtaining the DIRECTV Stockholder Approval for the adoption of this
Agreement, including the DIRECTV Merger, no other corporate action
on the part of DIRECTV
is necessary to authorize the
execution, delivery and performance by DIRECTV of this Agreement,
each of the other Transaction Agreements to which it is a party and
the consummation by it of the Transactions. This Agreement and each
of the other Transaction Agreements to which it is a party have
been duly executed and delivered by DIRECTV and, assuming due
authorization, execution and delivery hereof and thereof by the
other parties hereto and thereto, constitutes a legal, valid and
binding obligation of DIRECTV, enforceable against DIRECTV in
accordance with its and their terms, except that such
enforceability is subject to the Bankruptcy and Equity
Exception.
(b) Except
as set forth in Section 5.3(b) of the DIRECTV Disclosure
Schedule , neither the execution and delivery of this Agreement
or any of the other Transaction Agreements to which it is a party
by DIRECTV nor the consummation by DIRECTV of the Transactions, nor
compliance by DIRECTV with any of the terms or provisions of this
Agreement or any of the other Transaction Agreements to which it is
a party, will:
(i) conflict
with or violate any provision of the DIRECTV Charter Documents or
any provision of the DIRECTV Subsidiary Documents;
(ii) violate,
or conflict with, or result in a breach of any provision of, or
constitute a change of control or default (or an event that, with
the giving of notice, the passage of time or otherwise, would
constitute a default) under, or require any action, consent, waiver
or approval of any third party or entitle any Person (with the
giving of notice, the passage of time or otherwise) to terminate,
accelerate, modify or call a default under, or give rise to any
obligation to make a payment under, or to any increased, additional
or guaranteed rights of any Person under, or result in the creation
of any Lien upon any of the properties or assets of DIRECTV or any
of its Subsidiaries or under any of the terms, conditions or
provisions of any material Contract to which DIRECTV or any of its
Subsidiaries is a party or pursuant to which any of their
respective properties or assets are bound, except for any such
conflicts, violations, breaches, defaults or occurrences which
would not, individually or in the aggregate, have a DIRECTV
Material Adverse Effect;
(iii) assuming
the approvals required under Section 5.3(b)(iv) are obtained,
violate any order, writ, or injunction, or any decree, or any
material Law applicable to DIRECTV or any of its Subsidiaries, or
any of their respective properties or assets; or
(iv) require
any consent, approval, authorization or permit of, or filing with
or notification to, any Governmental Authority, except for (x) (A)
the filing with the SEC of each of the Splitco Form S-4, the
Holdings Form S-4 and a proxy statement relating to the DIRECTV
Stockholders Meeting (as amended or supplemented from time to time,
the “ DIRECTV Proxy Statement ”), and other
filings required under, and compliance with other applicable
requirements of, the Exchange Act, and the rules of NASDAQ, (B) the
filing of the DIRECTV Certificate of Merger with the Secretary of
State of the State of Delaware pursuant to the DGCL, (C) filings
required under, and compliance with other applicable requirements
of, the HSR Act and the rules and regulations promulgated
thereunder, and any similar Laws of foreign jurisdictions
and
(D) approval of the Transactions
under the Communications Act (the “ DIRECTV FCC
Approvals ” and collectively with the Liberty FCC
Approvals and the Splitco FCC Approvals, the “ Requisite
FCC Approvals ”) and (y) where the failure to obtain such
consents, approvals, authorizations or permits, or to make such
filings or notifications would not, individually or in the
aggregate, have a DIRECTV Material Adverse Effect.
(c) At
a meeting of the Board of Directors of DIRECTV duly called and
held, those directors of DIRECTV voting upon the following matters
and constituting a majority of the entire Board of Directors of
DIRECTV unanimously (i) approved and declared advisable this
Agreement, including the DIRECTV Merger, each of the other
Transaction Agreements to which DIRECTV is a party and the
Transactions, and (ii) resolved to recommend that the stockholders
of DIRECTV adopt this Agreement (subject to Section
6.5).
(d) The
affirmative vote (in person or by proxy) of the holders of record
of a majority of the shares of DIRECTV Common Stock outstanding on
the record date for the DIRECTV Stockholders Meeting or any
adjournment or postponement thereof in favor of the adoption of
this Agreement is the only vote or approval of the holders of any
class or series of capital stock of DIRECTV which is legally
required to adopt this Agreement; provided,
however , that in addition to the foregoing, DIRECTV
shall require the affirmative vote (in person or by proxy), voting
together as a separate class at the DIRECTV Stockholders Meeting or
any adjournment or postponement thereof, of the holders of record
of a majority of the shares of DIRECTV Common Stock outstanding on
the record date for the DIRECTV Stockholders Meeting, excluding (i)
the holders of the Liberty DIRECTV Shares and (ii) any shares of
DIRECTV Common Stock that are Beneficially Owned by a director or
officer of Liberty, Dr. Malone or any Affiliate of Dr. Malone, to
adopt this Agreement (collectively, the “ DIRECTV
Stockholder Approva l”).
(e) Each
of Holdings, Merger Sub One and Merger Sub Two has all necessary
corporate power and authority to execute and deliver this Agreement
and each of the other Transaction Agreements to which it is a party
and, subject to obtaining the consent of their respective sole
stockholders, to perform its obligations hereunder and thereunder
and to consummate the Transactions. The execution, delivery and
performance by each of Holdings, Merger Sub One and Merger Sub Two
of this Agreement and each of the other Transaction Agreements to
which it is a party, and the consummation by each of Holdings,
Merger Sub One and Merger Sub Two of the Transactions, have been
duly authorized and approved by their respective Boards of
Directors, and except for obtaining the consent of their respective
sole stockholders for the adoption of this Agreement and each of
the other Transaction Agreements to which it is a party, no other
corporate action on the part of Holdings, Merger Sub One or Merger
Sub Two is necessary to authorize the execution, delivery and
performance by Holdings, Merger Sub One and Merger Sub Two of this
Agreement and each of the other Transaction Agreements to which it
is a party, and the consummation by each of Holdings, Merger Sub
One and Merger Sub Two of the Transactions. This Agreement and each
of the other Transaction Agreements to which it is a party has been
duly executed and delivered by each of Holdings, Merger Sub One and
Merger Sub Two and, assuming due authorization, execution and
delivery hereof and thereof by the other parties hereto and
thereto, constitutes a legal, valid and binding obligation of each
of Holdings, Merger Sub One and Merger Sub Two, enforceable against
each of Holdings, Merger
Sub One and Merger Sub Two in
accordance with their terms, except that such enforceability is
subject to the Bankruptcy and Equity Exception.
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SECTION 5.4
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DIRECTV SEC Documents; Liabilities
.
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(a) As
of their respective dates, all reports, prospectuses, forms,
schedules, registration statements, proxy statements or information
statements required to be filed by DIRECTV under the Securities Act
or under the Exchange Act (the “ DIRECTV SEC Documents
”) complied in all material respects with the applicable
requirements of the Securities Act or the Exchange Act, as the case
may be, and none of such DIRECTV SEC Documents when filed contained
an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which
they were made, not misleading. The audited consolidated financial
statements and unaudited consolidated interim financial statements
included in the DIRECTV SEC Documents (including any related notes
and schedules) fairly present in all material respects the
financial position of DIRECTV and its consolidated Subsidiaries as
of the dates thereof and the results of operations and changes in
financial position or other information included therein for the
periods or as of the dates then ended, subject, where appropriate,
to normal, recurring year-end adjustments in each case in
accordance with past practice and GAAP during the periods involved
(except as otherwise stated therein) (none of which are material,
individually or in the aggregate, to the Knowledge of DIRECTV).
Since January 1, 2008, DIRECTV has timely filed all reports and
other filings required to be filed with the SEC under the rules and
regulations of the SEC.
(b) Since
March 31, 2009, except as specifically disclosed in the DIRECTV SEC
Documents filed and publicly available prior to the date hereof,
(i) the business of DIRECTV and its Subsidiaries has been conducted
in the ordinary course of business consistent with past practices,
(ii) there has not been any event, circumstance, change or effect
that has had or could reasonably be expected to have, individually
or in the aggregate, a DIRECTV Material Adverse Effect, (iii) no
Subsidiary of DIRECTV has redeemed any ownership interests in any
Subsidiary of DIRECTV, (iv) neither DIRECTV nor a Subsidiary of
DIRECTV has waived, released, compromised or settled any right or
claim of substantial value to such Subsidiary or any other Person
and (v) neither DIRECTV nor a Subsidiary of DIRECTV has engaged in
any transaction or taken any other action except in the ordinary
course of business consistent with past practices.
(c) There
are no Liabilities of DIRECTV and its Subsidiaries, and there is no
existing condition, situation or set of circumstances that could
reasonably be expected to result in such a Liability, other than:
(i) Liabilities disclosed or provided for in the DIRECTV SEC
Documents; and (ii) Liabilities incurred in the ordinary course of
business consistent with past practice since December 31, 2008 that
have not had and could not reasonably be expected to have,
individually or in the aggregate, a DIRECTV Material Adverse
Effect.
SECTION
5.5 Information Supplied . None of the
information supplied (or to be supplied) in writing by or on behalf
of DIRECTV specifically for inclusion or incorporation by reference
in, and which is included or incorporated by reference in (a) the
Splitco Form S-4 and the Holdings Form S-4 will, at the time (i)
that each of the Splitco Form S-4 and the Holdings
Form S-4, or any amendments or
supplements thereto, are filed with the SEC, (ii) that each of the
Splitco Form S-4 and the Holdings Form S-4 becomes effective under
the Securities Act, (iii) of the DIRECTV Stockholders Meeting, (iv)
of the Liberty Stockholders Meeting, (v) of the DIRECTV Merger and
(v) of the Splitco Merger, contain any untrue statement of a
material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements made
therein not misleading, and (b) the DIRECTV Proxy Statement will,
on the date it is first mailed to DIRECTV stockholders and at the
time of the DIRECTV Stockholders Meeting, be false or misleading
with respect to any material fact, or omit to state any material
fact necessary in order to make the statements therein, in light of
the circumstances under which they are made, not misleading or
necessary to correct any statement in any earlier communication.
The DIRECTV Proxy Statement will comply as to form in all material
respects with the applicable requirements of the Exchange Act.
Notwithstanding the foregoing, DIRECTV makes no representation or
warranty with respect to information supplied by or on behalf of
Liberty or Splitco for inclusion or incorporation by reference in
any of the foregoing documents.
SECTION
5.6 Brokers and Other Advisors . Except for
Morgan Stanley & Co. Incorporated, the fees and expenses of
which will be paid by DIRECTV, no broker, investment banker,
financial advisor or other Person is entitled to any
broker’s, finder’s, financial advisor’s or other
similar fee or commission, or the reimbursement of expenses, in
connection with the Transactions based upon arrangements made by or
on behalf of DIRECTV or any of its Subsidiaries. DIRECTV has
heretofore delivered to Liberty a correct and complete copy of
DIRECTV’s engagement letter with Morgan Stanley & Co.
Incorporated, which letter describes all fees payable to Morgan
Stanley & Co. Incorporated in connection with the Transactions,
all agreements under which any such fees or any expenses are
payable and all indemnification and other agreements related to the
engagement of Morgan Stanley & Co. Incorporated (as amended,
the “ DIRECTV Engagement Letter ”).
SECTION
5.7 State Takeover Statutes . No “fair
price,” “moratorium,” “control share
acquisition” or other similar antitakeover statute or
regulation enacted under state or federal Laws in the United States
applicable to DIRECTV is applicable to the Transactions.
SECTION
5.8 DIRECTV Takeover Proposals . As of the date
of this Agreement, within the past two (2) years there have been no
DIRECTV Takeover Proposals.
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SECTION 5.9
|
Legal Proceedings .
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(a) Other
than Actions of the type contemplated by Section 5.9(b) and
judgments, decrees, written agreements, memoranda of understanding
or orders of Governmental Authorities of the type contemplated by
Section 5.9(c), except as specifically disclosed in the DIRECTV SEC
Documents filed and publicly available prior to the date hereof,
(i) there are no Actions pending or, to the Knowledge of DIRECTV,
threatened against DIRECTV, or any of its Subsidiaries, by or
before any Governmental Authority, and (ii) there is no judgment,
decree, injunction, ruling or order of any Governmental Authority
outstanding against DIRECTV or any of its Subsidiaries, except, in
each case, for any such Action, judgment, decree, injunction,
ruling or order that, individually or in the aggregate, would not
reasonably be expected to have a DIRECTV Material Adverse
Effect.
(b) As
of the date of this Agreement, there is no Action pending or, to
the Knowledge of DIRECTV, threatened against DIRECTV or any of its
Subsidiaries that seeks, or would reasonably be expected, to
prohibit or restrain the ability of DIRECTV to enter into this
Agreement or any of the Transaction Agreements to which it is a
party or to timely consummate the Transactions.
(c) As
of the date of this Agr
