EXHIBIT 10.3
REGISTRATION RIGHTS AGREEMENT
-----------------------------
REGISTRATION RIGHTS AGREEMENT ("Agreement"), dated as of February 23,
---------
2001, by and among LIBERTY DIGITAL, INC., a Delaware corporation (the "Company")
-------
and SONY PICTURES CABLE VENTURES I INC. ("SPCV") and TGSC MANAGEMENT, INC.
----
("TGSC", and collectively with SPCV, "Stockholder").
------ -----------
WHEREAS, the Company and Stockholder are parties to a Membership
Interest Purchase Agreement dated as of the date hereof (the "Transaction
-----------
Agreement"), providing for the issuance of Series A Common Stock, par value
---------
$0.01 per share, of the Company (the "Series A Common Stock") to Stockholder;
---------------------
and
WHEREAS, in connection with the transactions contemplated by the
Transaction Agreement, Stockholder will receive shares of the Series A Common
Stock, which are "restricted securities" (as defined in Rule 144 under the
---------------------
Securities Act of 1933, as amended) and the Company has agreed to provide
Stockholder with the registration rights set forth herein.
NOW THEREFORE, in consideration of the premises and of the mutual
agreements and covenants hereinafter set forth, the parties hereto agree as
follows:
1. Certain Definitions.
-------------------
Additional Period: As defined in Section 3(c).
------------------
Affiliate: When used with respect to a specified Person, means any
----------
other Person that, directly or indirectly through one or more intermediaries,
Controls, is Controlled by or is under common Control with such first Person.
Business Day: Any day other than a Saturday, Sunday or holiday on
------------
which banking institutions in the City of New York are not required to be open.
Commission: The Securities and Exchange Commission, or any other
----------
Federal agency at the time administering the Securities Act or the Exchange Act.
Company Indemnified Parties: As defined in Section 6(b).
---------------------------
Control: As to any Person, means the possession, direct or indirect,
-------
of the affirmative power to direct or cause the direction of the management and
policies of such Person (whether through ownership of securities, partnership
interests or other ownership interests, by contract, by membership or
involvement in the board of directors, management committee or other management
structure of such Person, or otherwise).
Demand Notice: As defined in Section 2(b).
-------------
Demand Registration: As defined in Section 2(a).
-------------------
Document: As defined in Section 4(a)(i).
---------
Exchange Act: The Securities Exchange Act of 1934, as amended, or any
------------
successor Federal statute, and the rules and regulations of the Commission
promulgated thereunder, as they each may, from time to time, be in effect.
Filing Date: As defined in Section 4(a)(i).
-----------
Holder: Each of Stockholder and any Person to whom Stockholder (or
------
any assignee of Stockholder) has assigned its rights hereunder pursuant to
Section 13 hereof for so long as each holds of record any Registrable Shares,
and the term "Holders" means all or any combination of the foregoing.
-------
Holder Representative: Prior to the appointment of the Representative
---------------------
pursuant to Section 13, SPCV, and after the appointment of the Representative
pursuant to Section 13, the Representative.
Indemnified Party: As defined in Section 6(c).
-----------------
Indemnifying Party: As defined in Section 6(c).
------------------
Losses: As defined in Section 6(a).
------
Market Value: As to each Registrable Share at any date, the average
------------
of the daily closing prices for shares of the Series A Common Stock for the 20
consecutive trading days before the day in question. The closing price for such
shares for each day shall be the last reported sale price or, in case no such
reported sale takes place on such day, the average of the reported closing bid
and asked prices, in either case on the principal United States securities
exchange registered under the Exchange Act on which such shares are listed or
admitted to trading, or if they are not listed or admitted to trading on any
such exchange, the last reported sale price (or the average of the quoted
closing bid and asked prices if no sale is reported) as reported on the Nasdaq
Stock Market, or any comparable system, or if such shares are not quoted on the
Nasdaq Stock Market, or any comparable system, the average of the closing bid
and asked prices as furnished by any market maker in such shares who is a member
of the National Association of Securities Dealers, Inc.
Optional Registration Notice: As defined in Section 3(c).
----------------------------
Optional Registration: As defined in Section 3(c).
---------------------
Optional Shares: Shares of the Series A Common Stock acquired by
---------------
Stockholder pursuant to the Transaction Agreement and any other shares of
capital stock of the Company issued (or issuable upon the conversion or exercise
of any option, warrant, right or other security which is issued) in respect or
in replacement of such shares as a result of stock splits, stock dividends,
reclassifications, recapitalizations, mergers, consolidations or similar events
which in each case are no longer Registrables Shares solely as a result of the
Holder's ability to publicly resell such shares without registration under the
Securities Act (and without limitations as to volume or manner of sale, or
both).
2
Person: means an individual, partnership, corporation, limited
------
liability company, trust, unincorporated organization, association, or joint
venture or a government or any agency, political subdivision or instrumentality
thereof.
Postponement Extension Days: means the total number of days by which
---------------------------
the Company has postponed its obligations with respect to the filing of a
Registration Statement pursuant to Section 2(d).
Prospectus: The prospectus included in the Registration Statement as
----------
of the date it becomes effective under the Securities Act and, in the case of
references to the Prospectus as of a date subsequent to the effective date of
the Registration Statement, as amended or supplemented as of such date,
including all documents incorporated by reference therein, as amended, and each
prospectus supplement relating to the offering and sale of any of the
Registrable Shares.
Registrable Shares: Shares of the Series A Common Stock acquired by
------------------
Stockholder pursuant to the Transaction Agreement (which are not otherwise the
subject of an effective registration statement under the Securities Act) and any
other shares of capital stock of the Company issued (or issuable upon the
conversion or exercise of any option, warrant, right or other security which is
issued) in respect or in replacement of such shares as a result of stock splits,
stock dividends, reclassifications, recapitalizations, mergers, consolidations
or similar events. References in this Agreement to amounts or percentages of
Registrable Shares as of or on any particular date shall be deemed to refer to
amounts or percentages after giving effect to any applicable events contemplated
by the preceding sentence. Any Registrable Share will cease to be a Registrable
Share when (i) a registration statement covering such Registrable Share has been
declared effective by the Commission and such Registrable Share has been
disposed of pursuant to such effective registration statement, (ii) such
Registrable Share is no longer held by a Holder, (iii) the Rule 144 Sale Date
shall have occurred or (iv) such Registrable Share ceases to be outstanding;
provided, however, that notwithstanding the provisions of clause (iii) above,
-------- -------
(1) a share of Series A Common Stock shall not cease to be a Registrable Share
because the Rule 144 Sale Date shall have occurred if on the Rule 144 Sale Date
such share (x) was specified for inclusion in a Registration Statement pursuant
to a Demand Notice delivered to the Company prior to the sixtieth (60th) day
preceding the Rule 144 Sale Date or (y) is covered by a registration statement
which has been declared effective by the Commission prior to the Rule 144 Sale
Date; and (2) notwithstanding the provisions of clause (1) above, such share
shall cease to be a Registrable Share upon the earlier to occur of (A) the
disposition of such share and (B) the expiration of the Company's obligation (as
set forth in Sections 4(a)(iii) and 4(b) hereof) to maintain the effectiveness
of the Registration Statement covering such share.
Registration Statement: A registration statement of the Company on
----------------------
any form (to be selected by the Company) for which the Company then qualifies
and which permits the secondary resale thereunder of the number of Registrable
Shares required pursuant to this Agreement to be included therein. The term
"Registration Statement" shall also include all exhibits and financial
statements and schedules and documents incorporated by reference in such
Registration Statement when it becomes effective under the Securities Act, and
in the case of the
3
references to the Registration Statement as of a date subsequent to the
effective date, as amended or supplemented as of such date.
Representative: As defined in Section 13.
--------------
Reviewed Sections: As defined in Section 4(a)(i).
-----------------
Rule 144 Sale Date: means the date a Registrable Share may be
------------------
publicly resold without registration under the Securities Act and without regard
as to volume or manner of sale restrictions (the "Free Sale Date"); provided, in
-------------- --------
the event of (i) a postponement pursuant to Section 2(d) of the filing of a
Registration Statement, (ii) a suspension of the Company's obligations pursuant
to Section 4(b) after a Registration Statement has been filed or after it has
become effective or (iii) a suspension pursuant to Section 4(b) of distributors
by the Selling Stockholders under an effective Registration Statement, the Rule
144 Sale Date shall be extended beyond the Free Sale Date by a number of days
equal to the sum of the total number of Postponement Extension Days plus the
total number of Suspension Extension Days.
SPE: Sony Pictures Entertainment Inc., a Delaware corporation.
---
Securities Act: The Securities Act of 1933, as amended, or any
--------------
successor Federal statute, and the rules and regulations of the Commission
promulgated thereunder, as they each may, from time to time, be in effect.
Selling Stockholder: Any Holder whose Registrable Shares are included
-------------------
at the request of such Holder in any Registration Statement filed pursuant to
Section 2.
Stock Exchange: As defined in Section 4(a)(ix).
--------------
Stockholder Indemnified Parties: As defined in Section 6(a).
-------------------------------
Suspension Extension Days: means the total number of days by which
-------------------------
the Company has suspended its obligations with respect to a Registration
Statement or suspended sales by the Selling Stockholders under an effective
Registration Statement pursuant to Section 4(b).
Underwritten Offering: As defined in Section 2(c).
---------------------
All other capitalized terms used herein and not otherwise defined have
the meanings ascribed thereto in the Transaction Agreement.
2. Demand Registration.
-------------------
(a) At any time after the first anniversary of the Closing under the
Transaction Agreement, the Holders collectively shall have the right to
request registration (a "Demand Registration") under the Securities Act of
-------------------
such Holders' Registrable Shares upon the terms and subject to the terms,
conditions and limitations set forth herein.
4
(b) One or more Holders holding in the aggregate at least 50% of the
Registrable Shares then outstanding may elect to exercise the right to request a
Demand Registration pursuant to this Section 2 by furnishing the Company with
written notice thereof (a "Demand Notice") which sets forth (i) the identity of
-------------
each Holder joining in making such Demand Notice and the number of Registrable
Shares owned by such Holder, (ii) the number of Registrable Shares requested to
be registered and (iii) the proposed method of distribution of such Registrable
Shares. Subject in all cases to the terms of this Agreement, the Company shall
as soon as practicable, and in any event within either (x) in the case of an
offering which is not an Underwritten Offering, 45 days after the date on which
the Demand Notice is delivered to the Company or (y) in the case of an
Underwritten Offering (either as a result of the requested preference of the
initiating Holders or at the Company's election pursuant to Section 2(c)), 90
days after the date on which the Demand Notice is delivered to the Company, file
with the Commission and use its commercially reasonable efforts to cause to
become effective as promptly as practicable a Registration Statement which shall
cover the Registrable Shares specified in the Demand Notice.
(c) Notwithstanding the preference of the initiating Holders as to
the method of distribution of any Registrable Shares that may be set forth in a
Demand Notice, the Company, in its sole discretion, may determine that the sale
of Registrable Shares pursuant to any Demand Registration be pursuant to a firm
commitment underwriting (any such proposed manner of sale an "Underwritten
------------
Offering"), the managing underwriter of which shall be a nationally recognized
--------
investment banking firm selected by the Holder Representative and reasonably
acceptable to the Company. If the lead managing underwriter of any Underwritten
Offering determines in good faith that the aggregate number of Registrable
Shares to be offered exceeds the number of shares that could be sold without
having an adverse effect on such offering (including the price at which the
Registrable Shares may be sold), then, the number of Registrable Shares to be
offered for the accounts of the Selling Stockholders shall be reduced or limited
in proportion to the respective numbers of Registrable Shares requested to be
included by such Selling Stockholders to the extent necessary to reduce the
total number of shares to be included in such offering to the amount recommended
by such lead managing underwriter. Any shares of the Series A Common Stock
proposed to be offered for the account of the Company or securityholders other
than the Selling Stockholders shall first be reduced prior to any reduction of
Registrable Shares to be offered for the accounts of Selling Stockholders
pursuant to the preceding sentence. The Company shall enter into the same
underwriting agreement as shall the Selling Stockholders, containing
representations, warranties, indemnities, and agreements reasonably acceptable
to the Company and substantially similar to those customarily made by an issuer
in underwriting agreements with respect to secondary distributions.
(d) The Company shall be entitled to postpone, for a reasonable
period of time not in excess of 90 days the date by which it is required to file
such Registration Statement pursuant to Section 2(b), if (i) at any time prior
to the filing of such Registration Statement the Company determines, in its
reasonable business judgment, that such registration and offering is reasonably
likely to (A) materially interfere with or otherwise materially adversely affect
any financing, acquisition, material transaction relating to the capital stock
of the Company, or other material transaction or development involving the
Company or any of its Affiliates, (B) require the disclosure of any material
non-public information that the Company has a reasonable
5
business purpose for not disclosing at such time or (C) require the Company to
prepare and file with the Commission sooner than otherwise would be required pro
forma or other financial statements relating to any proposed transaction and
(ii) the Company gives the Holder Representative written notice of such
postponement. Any such notice need not specify the reasons for such postponement
if the Company determines, in its reasonable business judgment, that doing so
would materially interfere with or materially adversely affect such transaction
or development or would result in the disclosure of such material non-public
information. The Company shall not be entitled to postpone the filing of a
Registration Statement under this Section 2 for more than 90 days during any 12-
month period. In the event of such postponement, the Company shall file such
Registration Statement as soon as practicable after it shall determine, in its
reasonable business judgment, that such registration and offering will not
materially interfere with the financing, acquisition or other material
transaction described in clause (i) (A) of the first sentence of this Section
2(d) or require the Company to take any of the actions described in clauses
(i)(B) or (C) of the first sentence of this Section 2(d). If the Company shall
postpone the filing of any Registration Statement, Selling Stockholders holding
in the aggregate 50% or more of the Registrable Shares requested to be included
in such Registration Statement shall have the right to withdraw their request
for such registration by giving notice to the Company within 15 days of the
notice of postponement. Such withdrawal request shall be deemed to apply to all
Selling Stockholders who hold Registrable Shares that had been requested to be
included in such Registration Statement. In the event that the Selling
Stockholders withdraw their request in the foregoing manner, such request shall
not be counted for purposes of determining the number of registrations to which
Holders are entitled pursuant to Section 3(a)(i) or Section 3(a)(ii) hereof.
(e) Each Selling Stockholder may, before any underwriting agreement
relating to such Selling Stockholder's Registrable Shares is signed or before
any Registration Statement becomes effective, withdraw its Registrable Shares
from inclusion therein, should the terms of sale not be satisfactory to such
Selling Stockholder. If Selling Stockholders holding in the aggregate 50% or
more of the Registrable Shares requested to be included in such Registration
Statement so withdraw, however, such registration shall be deemed to have
occurred for the purposes of Section 3(a)(i) and Section 3(a)(ii) hereof, unless
the Selling Stockholders pay (pro rata, in proportion to the number of
Registrable Shares requested to be included or in such other proportions as they
may agree among themselves) within 20 days after any such withdrawal, all of the
out-of-pocket expenses of the Company payable to third parties incurred in
connection with such registration (including those specified in Section 5(a)
hereof); provided, however, that such registration shall not be deemed to have
-------- -------
occurred for the purposes of Section 3(a)(i) and 3(a)(ii) hereof, (and such
Selling Stockholders shall not be required to pay the expenses of the Company)
if (x)(1) at the time of such withdrawal, the Selling Stockholders have learned
of a material adverse change in the condition or business of the Company which
was not known to the Selling Stockholders at the time the Demand Notice was
delivered to the Company and (2) Selling Stockholders holding more than 50% of
the number of Registrable Shares for which registration was requested have
withdrawn their request for registration within 10 days after learning of such
material adverse change or (y) the underwriters limit the number of shares to be
included in an Underwritten Offering hereof so that less than 50% of the number
of Registrable Shares for which registration was requested by the Selling
Stockholders are included in such registration.
6
3. Limitations on Registration Rights
----------------------------------.
(a) Notwithstanding the provisions of Section 2 hereof, the Company
shall not be required to effect or maintain any registration if: (i) the Company
has (x) previously filed with the Commission two Registration Statements
pursuant to Section 2 of this Agreement which have become effective under the
Securities Act and (y) performed in all material respects its obligations under
Section 4(a)(iii) with respect to each such Registration Statement; (ii) the
Company has previously filed a Registration Statement under the Securities Act
pursuant to Section 2 within the six-month period preceding the receipt of a
Demand Notice; or (iii) either (x) the total number of Registrable Shares
requested to be registered on any Registration Statement shall be less than ten
percent (10%) of the Registrable Shares initially issued to Stockholder at the
Closing under the Transaction Agreement or (y) the aggregate Market Value of the
Registrable Shares requested to be registered is less than $7.5 million;
provided, however, that the provisions of this clause (iii) shall not be
-------- -------
applicable in the event (x) such Demand Registration is in respect of all
remaining Registrable Shares owned by the Holders, and (y) the Demand Notice
pursuant to which such Demand Registration is to be effected was delivered to
the Company prior to the sixtieth (60th) day preceding the Rule 144 Sale Date of
the date of this Agreement.
(b) Notwithstanding anything to the contrary contained herein, in the
event the Company is required to file a Registration Statement pursuant to a
Demand Notice, the Company shall have the option, in lieu of effecting any
registration hereunder, of purchasing or causing one or more of its designees to
purchase all of the Registrable Shares otherwise required to be included in such
Registration Statement, or in lieu of including any portion of such Registrable
Shares in a Registration Statement, of purchasing or causing the purchase of
such portion of Registrable Shares, in each case, at a price equal to the Market
Value thereof (reduced by an amount per share equal to the customary anticipated
underwriter or brokerage discounts and commissions (or other items constituting
compensation to the anticipated underwriter, agent or broker-dealer), if any,
upon such registered offering and any other out-of-pocket expenses that would be
payable by a Selling Stockholder to third parties pursuant to Section 5(b)) on
the day immediately preceding the date on which the Demand Notice has been given
to the Company. Notice of the Company's election to exercise its option
hereunder shall be furnished in writing by the Company to the Holder
Representative within ten Business Days after the receipt by the Company of the
Demand Notice. Payment for any Registrable Shares purchased by the Company
hereunder shall be made to each Selling Stockholder in next day funds on a
Business Day to be determined by the Company, which shall be within 20 days of
the date the Holder Representative receives notice from the Company of the
Company's decision to exercise the option provided for in this Section 3(b).
Upon any such sale, each Selling Stockholder shall be deemed to have made the
same representations and warranties concerning its title to and ownership of its
Registrable Shares that are being so purchased and such Selling Stockholder's
power and authority to effect such sale as would customarily be made by a
selling stockholder to an underwriter in an underwriting agreement with respect
to a secondary distribution.
(c) Provided that the Company shall not have theretofore satisfied
its obligations under Section 3(a)(i), during the period beginning on the second
anniversary of the Closing Date and ending the third anniversary of the Closing
Date (the "Additional Period"), the
-----------------
7
Holder Representative may request registration (an "Optional Registration")
---------------------
under the Securities Act of Optional Shares upon the terms and subject to the
terms, conditions and limitations set forth herein. The Holder Representative
shall request an Optional Registration by furnishing the Company with written
notice (the "Optional Registration Notice") thereof which sets forth (i) the
----------------------------
identity of each Holder joining in making such Demand Notice and the number of
Registrable Shares owned by such Holder, (ii) the number of Optional Shares
requested to be registered and (iii) the proposed method of distribution of such
Optional Shares. The Company may then, in its sole and absolute discretion,
either elect to register such Optional Shares in accordance with the terms of
this Agreement or decline to register such Optional Shares. The Company shall
notify the Holder Representative in writing within 15 days of its receipt of an
Optional Registration Notice as to whether the Company will proceed with such
registration or decline to register such Optional Shares. If the Company elects
to register such Optional Shares, then such Optional Shares shall be deemed to
be Registrable Shares for purposes of this Agreement. The Company shall not be
required to effect an Optional Registration more than once during the Additional
Period. The Holder Representative shall not deliver an Optional Registration
Notice during any period specified in Section 3(a)(ii) during which it would not
be entitled to deliver a Demand Notice. In the event the Company elects to
proceed with such registration, the Optional Registration and Optional
Registration Notice shall be deemed and treated for the purposes of this
Agreement as a Demand Registration and Demand Notice, respectively.
4. Obligations with Respect to Registration.
----------------------------------------
(a) If and whenever the Company is obligated by the provisions of
this Agreement to effect the registration of any Registrable Shares under the
Securities Act, the Company shall:
(i) prior to the filing of the Registration Statement or any
related Prospectus or any amendment or supplement thereto (other than any such
amendments or supplements that have been filed to correct any misstatements or
omissions in a previously filed Registration Statement or related Prospectus),
if reasonably practicable, furnish to the Holder Representative a draft copy of
the document to be filed (the "Document") and written notice setting forth the
--------
date (the "Filing Date") on which the Company proposes to file such Document
-----------
(which date shall not be less than four (4) Business Days after the date upon
which the Holder Representative is deemed pursuant to Section 8 hereof to have
received such Document (including as a Business Day the date of the Holder
Representative's deemed receipt of such Document)). If the Holder Representative
delivers written notice to the Company prior to the Filing Date setting forth
details concerning its reasonable objection to the portions of the Document
providing disclosure with respect to the Selling Stockholders or their
Affiliates, the Selling Stockholders' beneficial ownership of the securities of
the Company or the Selling Stockholders' intended method of disposition of
Registrable Shares (such sections, the "Reviewed Sections"), the Company shall
-----------------
not file such Document; following delivery of such written notice of objection
the Holder Representative and the Company will seek to reasonably agree upon
appropriate disclosure language given the requirements of the Securities Act,
and upon such agreement, the Company shall promptly file such revised Document.
In the event of such objection, the Company's obligations under this Agreement
with respect to the filing of the Registration Statement and its obligations
with respect to the declaration and maintenance of its
8
effectiveness will be suspended until the Company and the Holder Representative
have come to such an agreement;
(ii) respond as promptly as practicable to any comments received
from the Commission with respect to the Registration Statement or any amendment
thereto and as promptly as practicable provide the Holder Representative true
and complete copies of all correspondence from and to the Commission relating to
the Reviewed Sections of the Registration Statement;
(iii) subject to Section 4(b), use its diligent efforts to cause the
Registration Statement to remain effective, and promptly prepare and file with
the Commission any amendments, including post-effective amendments, and
supplements to the Registration Statement and to the Prospectus used in
connection therewith as may be necessary to keep the Prospectus current and in
compliance in all material respects with the provisions of the Securities Act,
until the sooner to occur of the sale of all of the Registrable Shares covered
by such Registration Statement or the 90th day following the effective date of
such Registration Statement; provided, however, that notwithstanding the
-------- -------
foregoing, except as provided in the proviso to the definition of Registrable
Shares, the Company shall not be required to keep any Registration Statement
effective, and no Selling Stockholder shall distribute any shares pursuant
thereto if, in the written opinion of counsel to the Company addressed to the
Selling Stockholders, the shares may be sold by the Selling Stockholders without
registration or restriction;
(iv) promptly notify the Holder Representative, (A) when a
Registration Statement becomes effective, (B) when the filing of a post-
effective amendment to a Registration Statement or supplement to the Prospectus
is required, when the same is filed, and in the case of a post-effective
amendment, when the same becomes effective, (C) of any request by the Commission
for any amendment of or supplement to a Registration Statement or any Prospectus
relating thereto or for additional information, (D) of the entry of any stop
order suspending the effectiveness of such Registration Statement or of the
initiation of any proceedings for that purpose and (E) of the receipt by the
Company of any notification with respect to the suspension of the qualification
or exemption from qualification of any of the Registrable Shares for sale in any
jurisdiction in which a Selling Stockholder has previously notified the Company
in writing that it has a good faith intent to sell Registrable Shares, or
written notice concerning or the initiation of any proceeding for such purpose;
(v) furnish, promptly after filing, to the Holder Representative a
conformed copy of the Registration Statement to the extent not previously
provided as declared effective by the Commission and of each post-effective
amendment thereto, and such number of copies of the final Prospectus and of each
supplement thereto as may reasonably be required to facilitate the distribution
of the Registrable Shares of the Selling Stockholders included in such
Registration Statement;
(vi) use its commercially reasonable efforts to register or qualify,
or to cooperate with the Selling Stockholders in connection with the
registration or qualification of, the Registrable Shares covered by a
Registration Statement under the securities or blue sky laws
9
of such jurisdictions in the United States as the Selling Stockholders shall
reasonably request, and do any and all other acts and things which may be
reasonably necessary and advisable to enable each Selling Stockholder whose
Registrable Shares are covered by such Registration Statement to consummate the
disposition in such jurisdictions of such Registrable Shares in accordance with
a method of distribution described in such Registration Statement; provided,
--------
however, that the Company shall in no event be required to qualify to do
-------
business as a foreign corporation or as a dealer in any jurisdiction where it is
not so qualified, to conform its capitalization or the composition of its assets
at the time to the securities or blue sky laws of such jurisdiction, to execute
or file any general consent to service of process under the laws of any
jurisdiction, to take any action that would subject it to service of process in
suits other than those arising out of the offer and sale of the Registrable
Shares covered by such Registration Statement, or to subject itself to taxation
in any jurisdiction where it has not theretofore done so;
(vii) use its commercially reasonable efforts to avoid the
issuance of, or, if issued, obtain the withdrawal of (A) any order suspending
the effectiveness of the Registration Statement or (B) any suspension of the
qualification (or exemption from qualification) of any Registrable Shares for
sale in any jurisdiction in which a Selling Stockholder has previously notified
the Company in writing it has a good faith intent to sell Registrable Shares;
provided, however, that the Company shall in no event be required to qualify to
-------- -------
do business as a foreign corporation or as a dealer in any jurisdiction where it
is not so qualified, to conform its capitalization or composition of its assets
at the time to the securities or blue sky laws of such jurisdiction, to execute
or file any general consent to service of process under the laws of any
jurisdiction, to take any action that would subject it to service of process in
suits other than those arising out of the offer and sale of the Registrable
Shares covered by such Registration Statement, or to subject itself to taxation
in any jurisdiction where it has not theretofore done so;
(viii) use its diligent efforts to obtain, from its independent
certified public accountants, a "cold comfort" letter in customary form and
covering such matters of the type customarily covered by cold comfort letters,
and use its reasonable best efforts to obtain from its counsel an opinion or
opinions in customary form; and
(ix) use its best efforts to cause such Registrable Shares
covered by a Registration Statement to be listed on the principal exchange or
exchanges or qualified for trading on the principal over-the-counter market on
which the Series A Common Stock is then listed or traded (the "Stock Exchange")
--------------
upon the sale of such Registrable Shares pursuant to such Registration
Statement.
(b) Notwithstanding anything to the contrary contained herein, if at
any time after the filing of a Registration Statement or after it is declared
effective by the Commission, the Company determines, in its reasonable business
judgment, that such registration and offering is reasonably likely to (i)
materially interfere with or otherwise materially adversely affect any
financing, acquisition, material transaction relating to the capital stock of
the Company, or other material transaction or development involving the Company
or any of its Affiliates, (ii) require the disclosure of any material non-public
information that the Company has a reasonable business purpose for not
disclosing or (iii) require the Company to prepare and file with the Commission
sooner than otherwise would be required pro forma or other financial statements
10
relating to any proposed transaction, then the Company may require the
suspension by each Selling Stockholder of the distribution of any of the
Registrable Shares by giving written notice to the Holder Representative. Any
such notice need not specify the reasons for such suspension if the Company
determines, in its reasonable business judgment, that doing so would interfere
with or adversely affect such transaction or development or would result in the
disclosure of such material non-public information. The Company shall not be
entitled to require Selling Stockholders to suspend the distribution of
Registrable Shares under this Section 4 for more than 120 days in any 12-month
period. In the event that such notice is given, then until the Company has
determined, in its reasonable business judgment, that such registration and
offering would no longer materially interfere with the matters described in
clause (i) of the first sentence of this Section 4(b) or require the Company to
take any actions described in clauses (ii) or (iii) of the first sentence of
this Section 4(b) and has given notice thereof to the Holder Representative, the
Company's obligations under Section 2(b), if the Registration Statement has not
become effective, or under Section 4(a)(iii), if the Registration Statement has
become effective, will be suspended. In the event of a suspension pursuant to
this Section 4(b) after a Registration Statement has been declared effective,
the 90-day period of effectiveness of such Registration Statement referred to in
Section 4(a)(iii) will be extended by a number of days equal to the total number
of days for which the distribution of Registrable Shares included in such
Registration Statement by the Selling Stockholder has been suspended under this
Section 4(b); provided, however, that, notwithstanding the foregoing, the
-------- -------
Company shall not be required to maintain the effectiveness of any registration
statement after the 60/th/ day following the Rule 144 Sale Date.
(c) The Company's obligations under this Agreement to a Selling
Stockholder shall be conditioned upon such Selling Stockholder's compliance with
the following:
(i) such Selling Stockholder shall cooperate with the Company
in connection with the preparation of the Registration Statement and the
Company's efforts to cause such Registration Statement to be declared effective
by the Commission as promptly as practicable, and for so long as the Company is
obligated to keep the Registration Statement effective, such Selling Stockholder
will promptly provide to the Company, in writing, for use in the Registration
Statement, all information regarding such Selling Stockholder and such other
information as is reasonably necessary to enable the Company to prepare the
Registration Statement and Prospectus covering the Registrable Shares
(including, without limitation, providing to the Company any such information as
may be necessary for the Company to respond to the comments of the Commission)
and to maintain the currency and effectiveness thereof;
(ii) such Selling Stockholder shall enter into such agreements
with the Company and any underwriter, broker-dealer or similar securities
industry professional, as applicable, containing representations, warranties,
indemnities and agreements as are in each case customarily entered into and made
by selling stockholders, and will use its reasonable best efforts to cause its
counsel to give any legal opinions customarily given, in secondary distributions
under similar circumstances;
(iii) during such time as such Selling Stockholder may be
engaged in a distribution of the Registrable Shares, such Selling Stockholder
will comply with all applicable
11
laws, including but not limited to Regulation M promulgated under the Exchange
Act and will, among other things: (A) not engage in any stabilization activity
in connection with the securities of the Company in contravention of such laws
or regulations; (B) distribute the Registrable Shares owned by such Selling
Stockholder solely in the manner described in the Registration Statement; (C)
not bid for or purchase any securities of the Company or attempt to induce any
person to purchase any securities of the Company other than as permitted under
the Exchange Act; and (D) cause to be furnished to each underwriter, agent or
broker-dealer to or through whom the Registrable Shares owned by such Selling
Stockholder may be offered, or to the offeree if an offer is made directly by
the Selling Stockholder, such copies of the Prospectus (as amended and
supplemented to such date) and documents incorporated by reference therein as
may be required by such underwriter, agent, broker-dealer or offeree;
(iv) on notice from the Company of the happening of any of the
events specified in clauses (B), (C), (D) or (E) of Section 4(a)(iv), or that,
as set forth in Section 4(b), it requires the suspension by such Selling
Stockholder of the distribution of any of the Registrable Shares, then such
Selling Stockholder shall cease offering or distributing the Registrable Shares
until such time as the Company notifies the Holder Representative in writing
that the offering and distribution of the Registrable Shares may recommence and,
if so requested by the Company, will deliver to the Company, at the expense of
the Company, all copies of the prospectus covering the Registrable Shares in its
possession at the time of its receipt of notice to suspend such distribution;
provided, in the event any Selling Stockholder is required to cease offering or
--------
distributing Registrable Shares pursuant to this Section 4(c)(iv), the 90-day
period of effectiveness of the Registration Statement referred to in Section
4(a)(iii) will be extended by a number of days equal to the total number of days
for which the distribution of Registrable Shares included in such Registration
Statement by such Selling Stockholder has been suspended under this Section
4(c)(iv); provided, however, that, notwithstanding the foregoing, the Company
-------- -------
shall not be required to maintain the effectiveness of any registration
statement after the 60/th/ day following the Rule 144 Sale Date; and
(v) such Selling Stockholder will provide such information and
take all such other actions as the Company shall reasonably request in order to
permit the Company to comply with all applicable requirements of law and to
effect the registration of the Registrable Shares.
5. Expenses of Registration.
------------------------
Subject to Section 2(e), all expenses in connection with any
Registration Statement, any qualification or compliance with federal or state
laws required in connection therewith, and the distribution of the Registrable
Shares shall, as between the Selling Stockholders and the Company, be borne as
follows:
(a) The Company shall pay and be responsible for the registration,
qualification and filing fee payable under the Securities Act, any fees payable
to the Stock Exchange, blue sky fees and expenses, if applicable (subject to the
limitations set forth in Section 4(a)(vi)), printing fees and all fees and
disbursements of the Company's counsel and accountants (including expenses
related to obtaining any required "cold comfort" letters) as well as the
12
reasonable fees and disbursements of one special counsel to the Selling
Stockholders (who shall be selected by the Holder Representative and reasonably
acceptable to the Company), reasonable messenger, telephone and delivery
expenses and the fees and expenses of all other persons retained by the Company.
In addition, the Company shall be responsible for all of its internal expenses
incurred in connection with the consummation of the transactions contemplated by
this Agreement (including, without limitation, all salaries and expenses of its
officers and employees performing legal or accounting duties), the expense of
any audit, and the fees and expenses incurred in connection with the listing of
the Registrable Shares on the Stock Exchange as required hereunder. Solely at
its discretion, the Company may, in lieu of engaging the services of a financial
printing company with respect to the Registration Statement or the Prospectus,
arrange for the photocopying thereof, in which event the Company will bear the
applicable photocopying costs.
(b) The Selling Stockholders shall pay all fees and disbursements of
their own advisers (other than the counsel to the Selling Stockholders provided
for in Section 5(a)), all stock transfer fees (including the cost of all
transfer tax stamps) or expenses, if any, and all other expenses (including
underwriting or brokerage discounts, commissions and fees) related to the
distribution of the Registrable Shares. In addition, the Selling Stockholders
shall be responsible for all of their internal expenses incurred in connection
with the consummation of the transactions contemplated by this Agreement
(including, without limitation, all salaries and expenses of its officers and
employees performing legal or accounting duties).
6. Indemnification.
---------------
(a) The Company agrees to indemnify and hold harmless, to the fullest
extent permitted by law, each Selling Stockholder, its officers, directors and
employees and each Person, if any, who controls such Selling Stockholder within
the meaning of either the Securities Act or the Exchange Act and the officers,
directors and employees of each such controlling person (collectively, the
"Stockholder Indemnified Parties") from and against any losses, claims, damages
-------------------------------
or liabilities (collectively "Losses"), joint or several, to which such
------
Stockholder Indemnified Parties may become subject, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement or the Prospectus, or any omission
or alleged omission to state therein 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, or any violation by
the Company of any federal or state securities laws, rules or regulations in
connection with the offering covered by the Registration Statement; and, subject
to Section 6(c), the Company will reimburse such Stockholder Indemnified Parties
for any legal or other expenses reasonably incurred by them in connection with
investigating or defending any such Losses; provided, however, that the Company
-------- -------
will not indemnify or hold harmless any Stockholder Indemnified Party from or
against any such Losses (i) that arise out of or are based upon any violation of
any federal or state securities laws, rules or regulations committed by such
Stockholder Indemnified Party (or any agent, broker-dealer or underwriter
engaged by such Stockholder Indemnified Party) or in the case of a non-
underwritten offering, any failure by such Selling Stockholder (or any such
agent, broker-dealer or underwriter) to give any purchaser of Registrable Shares
at or prior to the written confirmation of such sale, a copy of
13
the most recent Prospectus or (ii) if the untrue statement, omission or
allegation thereof upon which such Losses or expenses are based (x) was made in
reliance upon and in conformity with the written information provided by or on
behalf of such Stockholder Indemnified Party specifically for use or inclusion
in the Registration Statement or any Prospectus, or (y) was made in any
Prospectus used after such time as the Company advised such Selling Stockholder
that the filing of a post- effective amendment or supplement thereto was
required, except the Prospectus as so amended or supplemented, or (z) was made
in any Prospectus used after such time as the obligation of the Company
hereunder to keep the Registration Statement effective and current has expired
or been suspended.
(b) Each Selling Stockholder severally agrees to indemnify and hold
harmless, to the fullest extent permitted by law, the Company, its officers,
directors and employees and each Person, if any, who controls the Company within
the meaning of either the Securities Act or the Exchange Act and the officers,
directors and employees of each such controlling Person (the "Company
-------
Indemnified Parties"), from and against any Losses, joint or several, to which
-------------------
the Company Indemnified Parties may become subject, insofar as such Losses (or
actions in respect thereof) arise out of or are based upon (i) any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement or the Prospectus, or any omission or alleged omission to
state therein 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, if the statement or omission was made in reliance upon and
in conformity with the written information provided by or on behalf of such
Selling Stockholder or any Person who controls such Selling Stockholder within
the meaning of either the Securities Act or the Exchange Act specifically for
use or inclusion in the Registration Statement or any Prospectus; or (ii) the
use of any Prospectus after such time as the Company has advised such Selling
Stockholder in writing that the filing of a post-effective amendment or
supplement thereto is required, except the Prospectus as so amended or
supplemented, or (iii) the use of any Prospectus after such time as the
obligation of the Company hereunder to keep the Registration Statement effective
and current has expired or been suspended, or (iv) any violation by such Selling
Stockholder or any person who controls such Selling Stockholder within the
meaning of either the Securities Act or the Exchange Act of any federal or state
securities law or rule or regulation thereunder in connection with any offering
covered by a Registration Statement or in the case of a non-underwritten
offering, any failure by such Selling Stockholder to give any purchaser of
Registrable Shares at or prior to the written confirmation of such sale, a copy
of the most recent Prospectus; and, subject to Section 6(c), such Selling
Stockholder will reimburse such Company Indemnified Parties for any legal or
other expenses reasonably incurred by them in connection with investigating or
defending any such Losses. For purposes of clause (i) of the preceding sentence
and clause (ii) of the last sentence of Section 6(a), but without limiting the
generality thereof, any information concerning any Stockholder Indemnified Party
or included in any Reviewed Section in any Registration Statement or Prospectus
which is provided to the Holder Representative for its review pursuant to
Section 4(a)(i) and to which the Holder Representative has not, prior to the
Filing Date, provided written notice of objection to the Company with respect to
the information contained therein, shall be deemed to have been provided in
writing by such Selling Stockholder specifically for use in such Registration
Statement or Prospectus. Notwithstanding the foregoing, no Selling Stockholder
shall be liable under this Section 6(b)
14
for any amounts exceeding the net proceeds received by such Selling Stockholder
from the sale of such Selling Stockholder's Registrable Shares.
(c) Each party entitled to indemnification under this Section 6 (the
"Indemnified Party") shall give notice to the party required to provide
-----------------
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
------------------
has actual knowledge of any claim as to which indemnity may be sought, and the
Indemnifying Party shall assume the defense thereof, including the employment of
counsel and the payment of all fees and expenses. The failure of any Indemnified
Party to give notice as provided herein shall not relieve the Indemnifying Party
from its obligations to indemnify such Indemnified Party, except to the extent
the Indemnified Party's failure so to notify actually prejudices the
Indemnifying Party's ability to defend against such claim, action or proceeding.
The Indemnified Party shall have the right to employ separate counsel in any
such action or proceeding and to participate in the defense thereof, but the
fees and expenses of such separate counsel shall be such Indemnified Party's
expense unless (i) the Indemnifying Party has agreed to pay such fees and
expenses or (ii) the named parties to any such action or proceeding (including
any impleaded parties) include an Indemnified Party and the Indemnifying Party,
and such Indemnified Party shall have been advised in writing by counsel that
there may be a conflict of interest between such Indemnified Party and the
Indemnifying Party in the conduct of the defense of such action (in which case,
if such Indemnified Party notifies the Indemnifying Party in writing that it
elects to employ separate counsel at the expense of the Indemnifying Party, the
Indemnifying Party shall not assume the defense of such action or proceeding on
such Indemnified Party's behalf, it being understood, however, that the
Indemnifying Party shall not, in connection with any one such action or
proceeding or separate but substantially similar or related actions or
proceedings arising out of the same general allegations or circumstances, be
liable for the reasonable fees and expenses of more than one separate firm of
attorneys at any time for all Indemnified Parties, which firm shall be
designated in writing by the Holder Representative or the Company as the case
may be). No Indemnifying Party, in the defense of any such claim or litigation,
shall, except with the written consent of the Indemnified Party, consent to
entry of any judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party of a release from all liability in respect of such claim or
litigation. The Indemnifying Party shall not be liable for any settlement of any
such action or proceeding effected without its written consent, but if settled
with its written consent, or if there be a final judgment for the plaintiff in
any such action or proceeding, the Indemnifying Party shall indemnify and hold
harmless the Indemnified Party from and against any Loss by reason of such
settlement or judgment. Unless the Indemnifying Party is in good faith objecting
to the Indemnified Party's claim to its entitlement to indemnification
hereunder, the Indemnifying Party shall reimburse the Indemnified Party for all
fees and expenses actually paid by it and for which it is entitled to indemnity
hereunder (including reasonable fees and expenses to the extent incurred in good
faith in connection with investigating or preparing to defend such proceeding in
a manner not inconsistent with this Section 6(c)), as incurred, within ten (10)
Business Days of written notice thereof to the Indemnifying Party (which notice
shall provide documentation reasonably acceptable to the Indemnifying Party as
to such fees and expenses for which such Indemnified Party is entitled to
indemnification hereunder), which notice shall in good faith be delivered no
more frequently than on a monthly basis.
15
(d) If the indemnification provided for under this Section 6 is
unavailable to or insufficient to hold the Indemnified Party harmless under
subparagraphs (a) or (b) above in respect of any Losses referred to therein for
any reason other than as specified therein, then the Indemnifying Party shall
contribute to the amount paid or payable by such Indemnified Party as a result
of such Losses in such proportion as is appropriate to reflect the relative
fault of the Indemnifying Party on the one hand and such Indemnified Party on
the other in connection with the statements or omissions which resulted in such
Losses as well as any other relevant equitable considerations. The relative
fault shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by or on
behalf of (or omitted to be supplied by or on behalf of) the Company or the
Selling Stockholders, the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission and
any other equitable considerations appropriate under the circumstances. The
amount paid or payable by an Indemnified Party as a result of the Losses
referred to above in this subsection (d) shall be deemed to include any
reasonable legal or other expenses reasonably incurred by such Indemnified Party
in connection with investigating or defending any such action or claim. The
parties hereto agree that it would not be just and equitable if the
contributions pursuant to this Section 6(d) were determined by pro rata
allocation or any other method of allocation that does not take into account the
equitable considerations referred to herein. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. Notwithstanding the foregoing, no Selling
Stockholder will be required to contribute any amounts hereunder to the extent
such amount, when aggregated with all amounts such Selling Stockholder has paid
pursuant to Section 6(b), exceeds the aggregate net proceeds received by such
Selling Stockholder from the sale of such Selling Stockholder's Registrable
Shares. The indemnity and contribution agreements contained herein are in
addition to any other liabilities of the parties pursuant to the provisions of
this Agreement.
(e) Upon payment to it of all amounts to which it is entitled
pursuant to this Section 6, the Indemnified Party shall irrevocably assign to
the Indemnifying Party all rights (legal and equitable) it may have against any
other Person (including, in the case of a Selling Stockholder, against any other
Selling Stockholder) relating to the matters which were subject to the claim for
indemnification hereunder, together with such Indemnified Party's rights with
respect to any insurance or similar arrangements relating to the claim from
which such claim for indemnification arose.
(f) The amount of any Losses of an Indemnified Party hereunder shall
be reduced by the amount paid in respect of such claim pursuant to any insurance
policy or similar arrangement or pursuant to any indemnification agreement in
respect of any such claim provided by any other Person.
16
7. Rule 144. With a view to making available the benefits of certain
--------
rules and regulations of the Commission which may at any time permit the sale of
the Registrable Shares to the public without registration, the Company agrees to
use commercially reasonable efforts to:
(a) make and keep public information available, as such terms are
understood and defined in Rule 144 or any similar or analagous rule promulgated
under the Securities Act;
(b) file with the Commission in a timely manner all reports and other
documents required of the Company under the Securities Act and the Exchange Act;
and
(c) as long as a Holder owns any Registrable Shares, furnish to the
Holder forthwith upon a request by a Holder in connection with such Holder's
proposed sale of Registrable Shares pursuant to Rule 144 of the Securities Act a
written statement by the Company as to its compliance with the reporting
requirements of said Rule 144.
8. Notices. All notices, requests, demands, waivers and other
-------
communications hereunder shall be in writing and shall be deemed to have been
duly given if delivered personally or mailed, certified or registered mail with
postage prepaid, or sent by telex, telegram or telecopier, as follows:
(a) if to the Company:
Liberty Digital, Inc.
0000 Xxxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Chief Financial Officer
Facsimile: (000) 000-0000
with a copy to:
Xxxxx Xxxxx L.L.P.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxxxx X. XxXxxxx, Esq.
Facsimile: (000) 000-0000
(b) if to Stockholder or any Holder:
Sony Pictures Cable Ventures I Inc.
Xxxxxx Xxxxxxx, Xxxxxxxx X
Xxxxx 000
Xxxxxx Xxxx, XX 00000-0000
Attention: President
Facsimile: (000) 000-0000
17
with a copy to:
Sony Pictures Entertainment Inc.
00000 Xxxx Xxxxxxxxxx Xxxxxxxxx
Xxxxxx Xxxx, XX 00000
Attention: General Counsel
Facsimile: (000) 000-0000
or to such other person or address as any party shall specify by notice in
writing to the other party. All notices and other communications given to a
party in accordance with the provisions of this Agreement shall be deemed to
have been received (i) three Business Days after the same are sent by certified
or registered mail, postage prepaid, return receipt requested, (ii) when
delivered by hand or transmitted by telecopy (which is confirmed) or (iii) one
Business Day after the same are sent by a reliable overnight courier service,
with acknowledgment of receipt requested. Notwithstanding the preceding
sentence, notice of change of address shall be effective only upon actual
receipt thereof.
9. Amendment. Any provision of this Agreement may be amended or
---------
modified in whole or in part at any time by an agreement in writing among the
Company and the Holders who hold a majority of the Registrable Shares then
outstanding, executed in the same manner as this Agreement. No consent, waiver
or similar act shall be effective unless in writing.
10. Entire Agreement. This Agreement constitutes the entire agreement
----------------
among the parties hereto and supersedes all prior agreements and understandings,
oral and written, among the parties hereto with respect to the subject matter
hereof.
11. Counterparts. This Agreement may be executed in two or more
------------
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
12. Governing Law. This Agreement shall be governed by and interpreted in
-------------
accordance with the internal laws of the State of Delaware, without giving
effect to principles of conflicts of laws.
13. Assignment. Prior to the first anniversary of the execution of this
----------
Agreement, Stockholder may not assign its rights under this Agreement without
the prior written consent of the Company except to an Affiliate of SPE to which
Registrable Shares have been transferred pursuant to Section 10.11 of the
Transaction Agreement and who agrees in writing (such writing to be reasonably
acceptable to the Company) to become a party to this Agreement and agrees to be
bound by the terms and conditions of this Agreement. Following the first
anniversary of the execution of this Agreement, Stockholder may assign without
the prior written consent of the Company all or part of its rights under this
Agreement to any Person to whom Stockholder has sold, transferred or assigned
Registrable Shares; provided, that such Person agrees in writing (such writing
--------
to be reasonably acceptable to the Company) to become a party to this Agreement
and agrees to be bound by the terms and conditions of this Agreement.
Notwithstanding the foregoing, in the event of any assignment pursuant to this
Xxxxxxx 00, Xxxxxxxxxxx (xx, to the
18
extent written notice thereof is provided to the Company at such time, a single
designee of Stockholder, which Person is reasonably acceptable to the Company)
shall be appointed as representative (Stockholder or such designee of
Stockholder, the "Representative") of all Holders for the purpose of exercising
--------------
the registration rights provided herein and the Company shall not be required to
give any Person, other than the Representative, any notice pursuant to this
Agreement or be obliged to take any instruction from any Person other than the
Representative. Subject to the foregoing, this Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and assigns.
14. Stop Transfer; Legend. So long as applicable, a stop transfer order
---------------------
will be placed on the stock transfer books of the Company respecting the
certificates evidencing the Registrable Shares, and each certificate
representing any portion of the Registrable Shares shall contain, be stamped or
otherwise imprinted with a legend in the following form (in addition to any
legend required under applicable state securities laws):
THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "ACT"), OR UNDER ANY STATE
SECURITIES LAW, AND MAY NOT BE SOLD, TRANSFERRED,
ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE
DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE ACT AND PURSUANT
TO THE PROVISIONS OF ANY APPLICABLE STATE
SECURITIES LAWS COVERING SUCH SECURITIES OR UNLESS
THE CORPORATION RECEIVES AN OPINION OF COUNSEL FOR
THE HOLDER OF THESE SECURITIES, REASONABLY
SATISFACTORY TO THE CORPORATION, STATING THAT SUCH
SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION IS
EXEMPT FROM THE REGISTRATION AND PROSPECTUS
DELIVERY REQUIREMENTS OF THE ACT AND THE
PROVISIONS OF ANY APPLICABLE STATE SECURITIES
LAWS.
THE SALE, TRANSFER OR OTHER DISPOSITION OF THE
SECURITIES REPRESENTED BY THIS CERTIFICATE IS
SUBJECT TO THE TERMS AND CONDITIONS OF THE
MEMBERSHIP INTEREST PURCHASE AGREEMENT, DATED
FEBRUARY 23, 2001, COPIES OF SUCH AGREEMENT MAY BE
OBTAINED UPON WRITTEN REQUEST TO THE SECRETARY OF
THE CORPORATION.
15. Delays or Omissions. It is agreed that no delay or omission to exercise any
-------------------
right, power, or remedy accruing to any party, upon any breach, default or
noncompliance of the other party under this Agreement shall impair any such
right, power, or remedy, nor shall it be construed to be a waiver of any such
breach, default or noncompliance, or any acquiescence therein, or of any similar
breach, default or noncompliance thereafter occurring. It is further
19
agreed that any waiver, permit, consent, or approval of any kind or character on
any party's part of any breach, default or noncompliance by the other party
under this Agreement or any waiver on any party's part of any provisions or
conditions of this Agreement must be in writing and shall be effective only to
the extent specifically set forth in such writing. All remedies, either under
this Agreement, by law, or otherwise afforded to the parties, shall be
cumulative and not alternative. No failure or delay by a party in exercising any
right, power or privilege hereunder will operate as a waiver thereof, nor will
any single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege hereunder.
[Signatures on next page]
20
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
LIBERTY DIGITAL, INC.
By: /s/ Xxxxx Xxxxxxxxx
--------------------
Xxxxx Xxxxxxxxx
Senior Vice President
SONY PICTURES CABLE VENTURES I INC.
By: /s/ Xxxx Xxxx
--------------
Xxxx Xxxx
Senior Vice President and Assistant Secretary
TGSC MANAGEMENT, INC.
By: /s/ Xxxx Xxxx
------------------
Xxxx Xxxx
Senior Vice President and Assistant Secretary
21
