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AMENDMENT NO. 1, DATED JULY 19, 2000,
BETWEEN LIBERTY MEDIA CORPORATION ("LIBERTY") AND
LIBERTY LIVEWIRE CORPORATION ("LIVEWIRE"),
FORMERLY KNOWN AS THE XXXX-XX CORPORATION ("XXXX")
TO THE CONTRIBUTION AGREEMENT DATED AS OF FEBRUARY
11, 2000 (THE "ORIGINAL AGREEMENT"), BETWEEN
LIBERTY AND XXXX.
Recitals
A. The Original Agreement was presented to and approved by the stockholders of
Xxxx at the special meeting of stockholders held on June 9, 2000.
B. As so approved, the Original Agreement contemplated that Liberty would: (i)
acquire controlling interests in both Xxxx and SEG; (ii) contribute to SEG
its controlling interest in Xxxx (the "Old Xxxx Contribution"), in exchange
for additional shares of voting stock of SEG; and (iii) cause SEG to
contribute to Xxxx 100% of the assets of SEG (the "Old SEG Contribution"),
in exchange for additional shares of voting stock of Xxxx and the
assumption by Xxxx of all liabilities of SEG.
C. Liberty and Livewire each believe that it is in the best interests of
Liberty and Livewire, and their respective stockholders, to modify and
amend the Original Agreement as provided herein.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, and intending to be bound hereby, the parties to
this Amendment, intending to be bound, HEREBY AGREE AS FOLLOWS:
ARTICLE I. Certain Definitions. As used herein, the following terms
have the corresponding meanings:
1.1 "AcquisitionSub" means [SEG Acquisition Sub, LLC], a [Colorado]
limited liability company of which Liberty is the sole member.
1.2 "Livewire Class B Common Stock" means the Class B Common Stock, par
value $.01 per share, of Livewire.
1.3 "New SEG Consideration" means 8,181,818 shares of Livewire Class B
Common Stock.
1.4 "Prior Agreement" means the Agreement and Plan of Merger dated as
of December 30, 1999, by and among Liberty, AT&T Corp., C-Group Merger
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Corp., SounDelux Entertainment Group, Inc., a California corporation, SEG and
the stockholders of SounDelux Entertainment Group, Inc. named therein.
1.5 "SEG" means SounDelux Entertainment Group of Delaware, Inc., a
Delaware corporation, in its own capacity and as successor-in-interest to
SounDelux Entertainment Group, Inc., a California corporation.
1.6 "SEG Acquired Businesses" means each of the following businesses
currently operated by SEG and certain of its subsidiaries, as provided in the
SEG Asset Purchase Agreement:
- Post Production Business Unit: Soundelux Hollywood, Modern
Music, Signet Soundelux Studios, Vine Street Studios;
- Content Business Unit: Hollywood Edge, Microphones, Soundelux
Audio Publishing, Cyberbuzz, and xxxxxxxxxxx.xxx; and
- Showorks Production West non-LBE sound editing business.
1.7 "SEG Asset Purchase" means the acquisition by the Acquisition Sub
of all assets of SEG and certain of its subsidiaries used in or held for use in
the SEG Acquired Businesses, other than cash and certain other excluded assets,
in accordance with the SEG Asset Purchase Agreement.
1.8 "SEG Asset Purchase Agreement" means the Asset Purchase Agreement
dated as of July [19], 2000, by and among Livewire, Acquisition Sub, SEG, each
of the subsidiaries of SEG named as "Sellers" therein and each of the
stockholders of SEG named as "Selling Stockholders" therein.
1.9 "SEG Assumed Liabilities" means "Assumed Liabilities" as such term
is defined the SEG Asset Purchase Agreement. For the avoidance of doubt, SEG
Assumed Liabilities includes (i) certain working capital liabilities on the
closing date of the SEG Asset Purchase (which liabilities will be taken into
account in calculating the net working capital of the SEG Acquired Businesses
for purposes of the closing adjustment payable to Livewire pursuant to Section
2.2(b) of the SEG Asset Purchase Agreement), (ii) all obligations accruing and
relating to periods after the closing date of the SEG Asset Purchase under
transferable licenses and assumed contracts, and (iii) subject to certain
provisions of the SEG Asset Purchase Agreement, certain accrued severance
obligations relating to employees of the SEG Acquired Businesses.
ARTICLE II. SEG Contribution.
2.1 Contribution. Subject to and as soon as practicable following the
consummation of the SEG Asset Purchase, Liberty shall contribute to Xxxx (the
"SEG Contribution") 100% of the outstanding ownership interests of the
Acquisition Sub, in exchange for (i) the New SEG Consideration and (ii) the
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assumption by Livewire pursuant to the SEG Asset Purchase Agreement of the SEG
Assumed Liabilities.
2.2 Consideration. The New SEG Consideration will be payable by
Livewire to Liberty in full at the closing of the SEG Contribution.
2.3 Closing Adjustment. If any post closing purchase price adjustment
is payable by SEG and the other sellers pursuant to the SEG Asset Purchase
Agreement, such adjustment shall be paid directly to Livewire in accordance with
Section 2.2(b) of the SEG Asset Purchase Agreement. Neither Liberty nor Livewire
shall be entitled to any other purchase price adjustment pursuant to the SEG
Asset Purchase Agreement or this Amendment.
2.4 Options. For the avoidance of doubt, Livewire shall not assume or
otherwise be responsible for any stock options granted by SEG prior to the SEG
Asset Purchase.
2.5 Acquisition Sub. At the closing of the SEG Contribution, the
Acquisition Sub will not have any assets or liabilities whatsoever, other than
the assets of the SEG Acquired Businesses acquired in the SEG Asset Purchase and
the SEG Assumed Liabilities.
2.6 SEG Asset Purchase Agreement. Attached hereto is a true, correct
and complete copy of the SEG Asset Purchase Agreement, as executed, with all
exhibits. Each party will promptly notify the other of any amendment or
modification to the SEG Asset Purchase Agreement and will not consent to any
such amendment or modification adverse to Liberty, Livewire or the Acquisition
Sub without the prior written consent of the other party, which consent shall
not unreasonably be withheld or delayed.
ARTICLE III. Amendment to Original Agreement.
This Amendment supersedes and amends the Original Agreement.
Notwithstanding anything to the contrary, the provisions of the Original
Agreement providing for the Old Xxxx Contribution and the Old SEG Contribution
are hereby terminated and made void. Except as otherwise expressly provided for
herein, the Original Agreement shall remain in full force and effect as
executed. For the avoidance of doubt, the parties acknowledge that the 4MC
Contribution provided for in the Original Agreement was consummated on or about
June 9, 2000, in accordance with the terms thereof.
ARTICLE IV. Representations, Warranties and Covenants.
4.1. Representations, Warranties and Covenants of Liberty. Liberty
hereby represents, warrants and covenants to Livewire as follows:
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(a) Between the closing of the SEG Asset Purchase and the
consummation of the SEG Contribution, Liberty shall not cause or permit the
Acquisition Sub to pay or declare any dividend or distribution on its equity
interests, or otherwise to do anything that if done by SEG prior to the closing
of the SEG Asset Purchase Agreement would have constituted or resulted a
material breach of any material representation or warranty of SEG therein,
without in any such case the prior written consent of Livewire, which consent
shall not unreasonably be withheld or delayed.
(b) This Amendment No. 1 and the Original Agreement as amended
hereby (collectively, this "Agreement") has been duly executed and delivered by
Liberty. Liberty has all requisite corporate power and authority to enter into
this Agreement and Liberty has all requisite corporate power and authority to
perform its obligations hereunder and to consummate the transactions
contemplated hereby. The execution and delivery by Liberty of this Agreement and
the performance by Liberty of its obligations hereunder have been duly and
validly authorized by all necessary corporate action on its part. This Agreement
is a legal, valid and binding obligation of Liberty, enforceable in accordance
with its terms.
4.2. Representations, Warranties and Covenants of Livewire. Livewire
hereby represents, warrants and covenants to Liberty as follows:
(a) This Agreement has been duly executed and delivered by
Livewire. Livewire has all requisite corporate power and authority to enter into
this Agreement and all requisite corporate power and authority to perform its
obligations hereunder and to consummate the transactions contemplated hereby.
The execution and delivery by Livewire of this Agreement and the performance by
Livewire of its obligations hereunder have been duly and validly authorized by
all necessary corporate action on its part. This Agreement is a legal, valid and
binding obligation of Livewire, enforceable in accordance with its terms. The
shares of Livewire Class B Common Stock to be issued to Liberty pursuant to this
Agreement, when issued in accordance with this agreement, will be duly
authorized, validly issued, fully paid and non-assessable and no stockholder or
other security holder of Livewire will have any preemptive right of subscription
or purchase in respect thereof.
4.3. Further Assurances. If at, or at any time after, the closing of
the SEG Contribution, either party considers or is advised that any deeds, bills
of sale, assignments, assurances or any other actions or things are necessary or
desirable to vest, perfect or confirm of record or otherwise in Livewire the
right, title and interest of Livewire in, to and under any of the rights,
properties, or assets of the SEG Acquired Businesses, or otherwise to carry out
the intent and purposes of this Agreement, then, at the request of either party,
each party shall execute and deliver (or cause to be executed and delivered),
all such deeds, bills of sale, assignments and assurances and shall take and do
all such other actions and things as either party may determine to be necessary
or desirable to vest,
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perfect or confirm any and all right, title and interest in, to and under such
rights, properties or assets of the SEG Acquired Businesses or otherwise to
carry out the intent and purposes of this Agreement.
ARTICLE V. Conditions.
The respective obligations hereunder of Liberty and Livewire to
consummate the SEG Contribution are subject to the satisfaction of each of the
following conditions:
5.1. Absence of Injunctions and Proceedings. No permanent or
preliminary injunction or restraining order or other order by any court or other
governmental entity of competent jurisdiction or other legal restraint or
prohibition shall be in effect, (i) preventing consummation of any of the
transactions contemplated hereby as provided herein, or permitting such
consummation only subject to any condition or restriction that has had or could
have a material adverse effect on the business, operations, results of
operations, financial condition, or prospects of Liberty, Livewire or any direct
or indirect subsidiary of either of them or of any other affiliate of Liberty,
(ii) requiring the divestiture, as a result of any of the transactions
contemplated hereby, of any substantial portion of the business or assets of
Liberty or Livewire or of any direct or indirect subsidiary of either of them or
of any other affiliate of Liberty, (iii) imposing material limitations on the
ability of Liberty (directly or, in the case of indirectly owned securities,
indirectly) effectively to exercise full rights of ownership of shares of
capital stock or other ownership interests of Livewire or any other direct or
indirect subsidiary of Liberty (including the right to vote such shares or other
ownership interests on all matters properly presented to the shareholders or
other equity holders of such entity) or making the holding by Liberty (or a
direct or indirect subsidiary of Liberty) of any such shares or other ownership
interests illegal or subject to any materially burdensome requirement or
condition, or (iv) requiring Liberty, Livewire or any direct or indirect
subsidiary of either of them or any other affiliate of Liberty to cease or
refrain from engaging in any line of business, as a result of this Agreement or
any transaction contemplated hereby.
5.2. No Adverse Enactments. No statute, rule, regulation, law, order,
judgment or decree enacted, promulgated, entered, issued, enforced or deemed
applicable by any foreign or U.S. federal, state or local court or other
governmental authority of competent jurisdiction shall be in effect that (i)
makes this Agreement, the SEG Contribution or any other transaction contemplated
hereby illegal or imposes or is reasonably likely to impose material damages or
penalties in connection therewith or otherwise prohibits or unreasonably delays
any such transaction, (ii) requires or is reasonably likely to require, as a
result of the consummation of the SEG Contribution or any other transaction
contemplated hereby, the divestiture of or any restrictions or conditions on the
conduct of any substantial portion of the business or assets of Liberty Livewire
or any direct or indirect subsidiary of either of them or of any other affiliate
of
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Liberty, (iii) imposes or is reasonably likely to result in imposition of
material limitations on the ability of Liberty (directly or, in the case of
indirectly owned securities, indirectly) effectively to exercise full rights of
ownership of shares of capital stock or other ownership interests of Livewire or
any other direct or indirect subsidiary of Liberty (including the right to vote
such shares or other ownership interests on all matters properly presented to
the shareholders or other equity holders of such entities), or makes the holding
by Liberty (or a direct or indirect subsidiary of Liberty) of any such shares or
other ownership interests illegal or subject to any materially burdensome
requirement or condition, or (iv) requires or is reasonably likely to require
Liberty, Livewire or any direct or indirect subsidiary of either of them or any
other affiliate of Liberty to cease or refrain from engaging in any material
business, as a result of this Agreement or the consummation of any transaction
contemplated hereby.
5.3. Tax Matters. There shall not have been any change in law or
regulation, and no new decision, regulation or interpretation published by the
Internal Revenue Service or any other governmental authority of competent
jurisdiction after the date of this Agreement, that could reasonably be
anticipated to make the SEG Contribution taxable to Liberty or Livewire (or any
member of a consolidated group of which Liberty or Livewire is a member) for
U.S. federal income tax purposes.
ARTICLE VI. Miscellaneous.
6.1. Notices. All notices, requests, demands, waivers and other
communications required or permitted to be given under this Agreement 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
telegram or confirmed telex or telecopier, as follows:
(a) If to Liberty:
Liberty Media Corporation
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attention: General Counsel
Facsimile: (000) 000-0000
(b) If to Livewire:
[ADDRESS TO BE SUPPLIED]
or to such other person or address as any party shall specify by notice in
writing to the other party. All such notices, requests, demands, waivers and
communications shall be deemed to have been received on the date of delivery
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or on the third business day after the mailing thereof, except that any notice
of a change of address shall be effective only upon actual receipt thereof.
6.2. Entire Agreement. This Amendment No. 1 amends the Original
Agreement with respect to the SEG Contribution and, together with the Original
Agreement as so amended constitutes the entire agreement between the parties
with respect to the subject matter hereof, superseding all prior agreements and
understandings, oral and written, between the parties with respect to such
subject matter.
6.3. Assignment; Binding Effect; Benefit. Neither this Agreement nor
any of the rights, benefits or obligations hereunder may be assigned by any
party (whether by operation of law or otherwise) without the prior written
consent of the other party. Subject to the immediately preceding sentence, this
Agreement will be binding upon, inure to the benefit of and be enforceable by
the parties and their respective successors and assigns. Nothing in this
Agreement, expressed or implied, is intended to confer on any person other than
the parties and their respective successors and assigns, any rights, remedies,
obligations or liabilities under or by reason of this Agreement.
6.4. Headings. The table of contents and headings contained in this
Agreement are for reference purposes only and shall not affect the meaning or
interpretation of this Agreement.
6.5. Counterparts. This Agreement may be executed in counterparts, and
on separate counterparts, each of which shall be deemed an original and all of
which together shall constitute one and the same agreement.
6.6. Applicable Law. This Agreement and the legal relations between the
parties hereunder shall be governed by and construed in accordance with the laws
of the State of Delaware applicable to contracts made and to be performed wholly
therein.
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
LIBERTY LIVEWIRE CORPORATION
By: ______________________
Name:
Title:
LIBERTY MEDIA CORPORATION
By: /s/ Xxxxxxx X. Xxxxxx
Name: Xxxxxxx X. Xxxxxx
Title: Senior Vice President,
General Counsel and
Assistant Secretary
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