Exhibit 4
STOCK DISPOSITION AGREEMENT
Stock Disposition Agreement, dated as of April 2, 1999 (this
"Agreement"), among General Instrument Corporation, a Delaware corporation
(the "Company"), Instrument Partners, a New York limited partnership
("Instrument Partners"), and Forstmann Little & Co. Subordinated Debt and
Equity Management Buyout Partnership-IV, a New York limited partnership
("MBO-IV"; and together with Instrument Partners, the "Selling
Stockholders").
WHEREAS, Instrument Partners is the owner of 11,547,008 shares of the
Company's common stock, par value $.01 per share (the "Common Stock"), and
MBO-IV is the owner of 10,161,657 shares of Common Stock; and
WHEREAS, the Company desires to purchase from Instrument Partners, and
Instrument Partners desires to sell to the Company, 2,819,111 of its shares
of Common Stock; and the Company desires to purchase from MBO-IV, and
MBO-IV desires to sell to the Company, 2,480,889 of its shares of Common
Stock (such Instrument Partners and MBO-IV shares of Common Stock, the
"Shares"); and
WHEREAS, contemporaneously with the execution and delivery of this
Agreement, the Selling Stockholders are entering into an agreement (the
"Other Agreement") to sell 10 million of their other shares of Common Stock
to Liberty Media Corporation, a Delaware corporation ("Liberty Media").
NOW, THEREFORE, in consideration of the mutual covenants and
undertakings contained herein, and on the terms and subject to the
conditions set forth herein, the parties hereto, each representing to the
others that its execution, delivery and performance of this Agreement has
been fully and duly authorized, agree as follows:
SECTION 1 - DEFINITIONS
-----------------------
1.1 SPECIFIC DEFINITIOS. As used in this Agreement, the following
terms shall have the meanings set forth below:
"Business Day" - any day other than a Saturday, a Sunday or a day
on which banks in New York City are authorized or obligated by law or
executive order to close.
"Closing" - the closing of the purchase and sale of the Shares.
"Closing Date" - the date on which the Closing occurs.
"Governmental Entity" - any federal, state or local judicial,
legislative, executive or regulatory authority.
Other terms are defined elsewhere in this Agreement and, unless otherwise
indicated, shall have such meanings throughout this Agreement.
SECTION 2 - PURCHASE AND SALE
-----------------------------
2.1 PURCHASE AND SALE OF SHARES. On the terms and subject to the
conditions, and in reliance on the representations and warranties, set
forth herein, at the Closing the Selling Stockholders shall sell and
transfer to the Company, and the Company shall purchase from the Selling
Stockholders, the Selling Stockholders' Shares (2,819,111 Shares in the
case of Instrument Partners, and 2,480,889 Shares in the case of MBO-IV),
at a cash purchase price equal to $28.00 per Share (the "Purchase Price").
The aggregate Purchase Price is $148,400,000.
2.2 CLOSING; DELIVERY AND PAYMENT.
(a) The Closing shall take place at the offices of Fried, Frank,
Harris, Xxxxxxx & Xxxxxxxx, One New York Plaza, New York, New York, or at
such other place as the Selling Stockholders and the Company shall agree,
at 9:00 a.m. (eastern standard time) on April 5, 1999 (provided that the
conditions set forth in Sections 4.1(c), 4.1(d)(i), 4.2(c) and 4.2(e)(i)
hereof shall have been satisfied) or as soon thereafter as practicable
after such conditions have been satisfied.
(b) On the Closing Date, each of the Selling Stockholders shall
deliver to the Company such instruments of transfer, in form and substance
reasonably satisfactory to the Company, as shall be sufficient to transfer
its Shares to the Company, and in exchange therefor (and upon receipt of
confirmation from the Company's transfer agent of its receipt of the
instruments of transfer to be delivered to it) the Company shall pay to
each of the Selling Stockholders the aggregate Purchase Price for the
Shares sold by such Selling Stockholders in immediately available funds to
the accounts designated by such Selling Stockholders.
SECTION 3 - REPRESENTATIONS AND WARRANTIES
------------------------------------------
3.1 BY THE PARTIES. Instrument Partners and MBO-IV each represents and
warrants to the Company, and the Company represents and warrants to
Instrument Partners and MBO-IV, as follows:
(a) It has all necessary authority for the execution, delivery
and performance of this Agreement by it; it has duly executed and delivered
this Agreement; and this Agreement is a valid and legally binding
agreement, enforceable against it in accordance with its terms, assuming
the due execution and delivery by the other parties; and
(b) The performance of this Agreement by it will not violate or
conflict with any law, regulation, order or agreement, or, to the extent
applicable, such party's charter or organic documents, and such party is
not required to obtain any governmental approvals or third party consents
to enter into and perform its obligations pursuant to this Agreement. Such
execution and performance does not and will not constitute a default under
any agreement or obligation binding on it or result in the forfeiture or
loss of any rights or assets by it except as specifically provided for in
this Agreement.
3.2 BY THE SELLING STOCKHOLDERS. Each of the Selling Stockholders
represents and warrants to the Company that (a) it is the owner of
11,547,008 shares of Common Stock (in the case of Instrument Partners) and
10,161,657 shares of Common Stock (in the case of MBO-IV), (b) the Shares
to be sold hereunder by it are owned, and will at the Closing be conveyed
to the Company, by such Selling Stockholder free and clear of any liens,
charges or encumbrances and (c) upon delivery of its Shares, and payment
therefor pursuant hereto, good and valid title to its Shares will pass to
the Company (assuming that the Company is without notice of any adverse
claim, as defined in the Uniform Commercial Code as adopted in the State of
New York (the "Code") and is otherwise a bona fide purchaser for the
purposes of the Code).
3.3 NO OTHER WARRANTIES. Except as expressly set forth in this
Agreement, no party is relying on any express or implied representations or
warranties relating to any party or to the consummation of the transactions
contemplated hereby. Except as and to the extent expressly set forth in
this Agreement, each party hereto hereby disclaims all liability and
responsibility for any statement or information made or communicated
(orally or in writing) to any other party hereto or any affiliate,
representative or agent thereof (including without limitation any opinion,
information or advice by any officer, director, consultant, affiliate,
representative or agent of the disclaiming party).
SECTION 4 - CONDITIONS TO THE PARTIES' OBLIGATIONS TO CLOSE
-----------------------------------------------------------
4.1 CONDITIONS TO THE OBLIGATIONS OF INSTRUMENT PARTNERS AND MBO-IV TO
CLOSE. The obligations of Instrument Partners and MBO-IV to consummate the
transactions contemplated by this Agreement are subject to the satisfaction
(or waiver) of the following conditions:
(a) No Injunctions. There shall not be in effect any statute,
regulation, order, decree or judgment of any Governmental Entity that makes
illegal or enjoins or prevents in any material respect the consummation of
the transactions contemplated by this Agreement.
(b) Representations. All representations made by the Company in
Article III hereof shall be true and correct in all material respects at
and as of the Closing Date.
(c) Liberty Media Right of First Refusal. Liberty Media (as
assignee of TCI Ventures Group, LLC), shall have waived in writing its
rights of first refusal, with respect to the transactions contemplated by
this Agreement, under the letter agreement, dated August 1, 1998 (the
"Letter Agreement"), among TCI Ventures Group, LLC, Instrument Partners,
MBO-IV, the Company and the other party thereto, and the Selling
Stockholders shall have received a copy of such written waiver.
(d) Other Agreement. (i) All conditions to the consummation of
the transactions contemplated by the Other Agreement shall have been
satisfied or waived and the parties thereto shall be fully prepared to
consummate the transactions contemplated thereby; and (ii) the transactions
contemplated by the Other Agreement shall have been consummated
contemporaneously with the consummation of the transactions contemplated by
this Agreement.
4.2 CONDITIONS TO THE OBLIGATIONS OF THE COMPANY TO CLOSE. The
obligations of the Company to consummate the transactions contemplated by
this Agreement are subject to the satisfaction (or waiver) of the following
conditions:
(a) No Injunctions. There shall not be in effect any statute,
regulation, order, decree or judgment of any Governmental Entity that makes
illegal or enjoins or prevents in any material respect the consummation of
the transactions contemplated by this Agreement.
(b) Representations. All representations made by Instrument
Partners and MBO-IV in Article III hereof shall be true and correct in all
material respects at and as of the Closing Date.
(c) Liberty Media Right of First Refusal. Liberty Media (as
assignee of TCI Ventures Group, LLC), shall have waived in writing its
rights of first refusal, with respect to the transactions contemplated by
this Agreement, under the Letter Agreement, and the Company shall have
received a copy of such written waiver.
(d) Fairness Opinion. The opinion previously delivered to the
board of directors of the Company by Xxxxxxx Xxxxx & Co., that the Purchase
Price is fair to the Company from a financial point of view, shall not have
been withdrawn or adversely modified.
(e) Other Agreement. (i) All conditions to the consummation of
the transactions contemplated by the Other Agreement shall have been
satisfied or waived and the parties thereto shall be fully prepared to
consummate the transactions contemplated thereby; and (ii) the transactions
contemplated by the Other Agreement shall have been consummated
contemporaneously with the consummation of the transactions contemplated by
this Agreement.
(f) Rule 144 Sale. Instrument Partners or MBO-IV shall have
entered into an arrangement with Xxxxxxx Sachs & Co. to sell at least 4
million of their shares of Common Stock (other than the Shares and the
shares subject to the Other Agreement) under Rule 144 of the Securities Act
of 1933, as amended, and the Company shall have received evidence of such
arrangement reasonably satisfactory to it.
(g) Forstmann Resignation. Xxxxxxxx X. Xxxxxxxxx shall have
resigned his position as a Director of the Company.
(h) Proxy. Instrument Partners and MBO-IV shall have executed and
delivered to the Company an irrevocable proxy (in the form of Exhibit A
hereto) to vote 9.57 million of the shares of Common Stock held by them on
March 31, 1999, the record date for the Company's 1999 annual meeting of
stockholders, at such annual meeting .
SECTION 5 - TERMINATION
-----------------------
5.1 TERMINATION. This Agreement may be terminated at any time prior to
the Closing:
(a) by written agreement of the Selling Stockholders and the
Company;
(b) either by the Selling Stockholders or by the Company, by
written notice of such termination to the other, if the Closing shall not
have been consummated on or prior to 2:00 p.m. eastern standard time (in
the case of a termination by the Selling Stockholders), or on or prior to
5:00 p.m. eastern standard time (in the case of a termination by the
Company), on April 5, 1999;
(c) either by the Selling Stockholders or by the Company if any
court of competent jurisdiction or other competent Governmental Entity
shall have by statute, rule, regulation, order, decree or injunction or
other action permanently restrained, enjoined or otherwise prohibited any
of the transactions contemplated by this Agreement.
SECTION 6 - MISCELLANEOUS
-------------------------
6.1 NOTICES. All notices or other communications hereunder shall be
deemed to have been duly given and made if in writing and if served by
personal delivery upon the party for whom it is intended, if delivered
registered or certified mail, return receipt requested, or by a national
courier service, if sent by facsimile transmission, provided that the
facsimile transmission is promptly confirmed by telephone confirmation
thereof, or on the third day after posting in the United States postage
prepaid if sent by registered or certified mail, return receipt requested,
to the person at the address set forth below, or such other address as may
be designated in writing hereafter, in the same manner, by such person:
To the Company:
General Instrument Corporation
000 Xxxxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxx, Esq.
Senior Vice President, General Counsel and Secretary
Tel: (000) 000-0000
Fax: (000) 000-0000
To Instrument Partners or MBO-IV:
c/o Forstmann Little & Co.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
6.2 AMENDMENT; WAIVER. Any provision of this Agreement may be amended
or waived if, and only if, such amendment or waiver is in writing and
signed, in the case of any amendment, by the parties hereto, or in the case
of a waiver, by the party against whom the waiver is to be effective. No
failure or delay by any party in exercising any right, power or privilege
hereunder shall operate as a waiver thereof nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies
herein provided shall be cumulative and, except as otherwise provided
herein, shall not be exclusive of any rights or remedies provided by law.
6.3 ASSIGNMENT. No party to this Agreement may assign any of its
rights or obligations under this Agreement without the consent of the other
parties hereto.
6.4 ENTIRE AGREEMENT. This Agreement (which includes the Exhibit
hereto) contains the entire agreement among the parties hereto with respect
to the subject matter hereof and supersedes all prior agreements and
understandings, oral or written, between or among them with respect to such
matters, and any written agreement of the parties that expressly provides
that it is not superseded by this Agreement.
6.5 PARTIES IN INTEREST. This Agreement shall inure to the benefit of
and be binding upon the parties hereto and their respective successors and
permitted assigns. Nothing in this Agreement, express or implied, is
intended to confer upon any person other than the parties hereto, and their
successors or permitted assigns, any rights or remedies under or by reason
of this Agreement.
6.6 GOVERNING LAW: SUBMISSION TO JURISDICTION; SELECTION OF FORUM.
THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK. Each
party hereto agrees that it shall bring any action or proceeding in respect
of any claim arising out of or related to this Agreement or the
transactions contained in or contemplated by this Agreement, whether in
tort or contract or at law or in equity, exclusively in the United States
District Court for the Southern District of New York or the Supreme Court
of the state of New York for the County of New York, and solely in
connection with claims arising under this Agreement or the transactions
contained in or contemplated by this Agreement (i) irrevocably submits to
the exclusive jurisdiction of such courts, (ii) waives any objection that
such courts are an inconvenient forum or do not have jurisdiction over any
party hereto and (iii) agrees that service of process upon such party in
any such action or proceeding shall be effective if notice is given in
accordance with Section 6.1 of this Agreement.
6.7 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, and all of which
shall constitute one and the same Agreement.
6.8 FURTHER ASSURANCES. Each party hereto shall (at its expense) take
such actions and execute and deliver such other documents, certifications
and further assurances as the other parties hereto may reasonably request
in order to carry out the purposes of this Agreement.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first written above.
GENERAL INSTRUMENT CORPORATION
By:/s/ Xxxxxx X. Xxxxx
------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Senior Vice President,
General Counsel & Secretary
INSTRUMENT PARTNERS
By: FLC XXII Partnership, general partner
By:/s/ Xxxxxx X. Xxxxxxx
--------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: General Partner
FORSTMANN LITTLE & CO. SUBORDINATED
DEBT AND EQUITY MANAGEMENT BUYOUT
PARTNERSHIP-IV
By: FLC XXIX Partnership, L.P., general partner
By:/s/ Xxxxxx X. Xxxxxxx
--------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: General Partner
Exhibit A
IRREVOCABLE PROXY
FOR THE
1999 ANNUAL MEETING OF STOCKHOLDERS
OF GENERAL INSTRUMENT CORPORATION
-----------------------------------
April __, 1999
The undersigned hereby irrevocably appoint Xxxxxxxx X. Xxxxx and
Xxxxxxx X. Xxxxx and each or either of them their attorneys and agents,
with full power of substitution, to vote as Proxy for the undersigned as
herein stated at the 1999 Annual Meeting of Stockholders of General
Instrument Corporation (the "Company"), and at any adjournments thereof,
according to the number of votes the undersigned would be entitled to vote
with respect to 9.57 million of their shares of common stock of the Company
(comprised of 5,090,357 of Instrument Partners' shares, and 4,479,643 of
Forstmann Little & Co. Subordinated Debt and Equity Management Buyout
Partnership-IV's shares) if personally present on the matters set forth
below and in accordance with their discretion on any other matters that may
properly come before the meeting or any adjournments thereof.
FOR election as Class II directors of the nominees recommended by the
Board of Directors of the Company.
FOR any proposal to approve the Company's 1999 Long-Term Incentive
Plan.
FOR ratification of the appointment by the Board of Directors of the
Company of Deloitte & Touche LLP as independent auditor for the
Company for the 1999 fiscal year.
This proxy is coupled with an interest and is irrevocable.
FORSTMANN LITTLE & CO. SUBORDINATED DEBT
INSTRUMENT PARTNERS AND EQUITY MANAGEMENT BUYOUT PARTNERSHIP-IV
By: FLC XXII Partnership, By: FLC XXIX Partnership, L.P.,
general partner general partner
By: By:
------------------------- -----------------------------
Name: Name:
Title: General Partner Title: General Partner
