AMENDED and RESTATED
AGREEMENT AND PLAN OF RESTRUCTURING AND MERGER
among
UNITEDGLOBALCOM, INC.,
NEW UNITEDGLOBALCOM, INC.,
UNITED/NEW UNITED MERGER SUB, INC.,
LIBERTY MEDIA CORPORATION,
LIBERTY MEDIA INTERNATIONAL, INC.,
LIBERTY GLOBAL, INC.
and
EACH PERSON INDICATED AS A "FOUNDER"
ON THE SIGNATURE PAGES HERETO
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DATED AS OF DECEMBER 31, 2001
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TABLE OF CONTENTS
ARTICLE I DEFINITIONS.............................................................................................2
1.1 Definitions...........................................................................................2
1.2 Additional Terms.....................................................................................10
ARTICLE II CONTRIBUTIONS, REORGANIZATION AND RELATED TRANSACTIONS................................................13
2.1 Pre-Closing Restructuring Transactions...............................................................13
2.2 Contributions and Restructuring......................................................................14
2.3 Repayment of Indebtedness............................................................................17
2.4 Certain Adjustments..................................................................................19
2.5 United/New United Merger.............................................................................19
ARTICLE III [RESERVED]...........................................................................................22
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF LIBERTY MEDIA, LIBERTY GLOBAL AND LMI...............................22
4.1 Organization, Good Standing and Authority............................................................22
4.2 Power; Authorization and Validity; Consents; No Conflicts............................................22
4.3 Brokers' and Finders' Fees...........................................................................23
4.4 Legal Proceedings....................................................................................23
4.5 Ownership of United Class B Stock....................................................................23
4.6 [Reserved.]..........................................................................................24
4.7 Belmarken Notes......................................................................................24
4.8 [Reserved.]..........................................................................................24
4.9 Investment Intent....................................................................................24
4.10 Registration Statement; Proxy Statement..............................................................24
4.11 Liberty UPC Bonds....................................................................................24
ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE FOUNDERS.........................................................24
5.1 Organization, Good Standing and Authority............................................................25
5.2 Power; Authorization and Validity; Consents; No Conflicts............................................25
5.3 Founder Newcos.......................................................................................26
5.4 Brokers' and Finders' Fees...........................................................................27
5.5 Information..........................................................................................27
5.6 Legal Proceedings....................................................................................27
5.7 Ownership of United Class B Stock and New United Class B Stock.......................................27
5.8 Investment Intent....................................................................................27
5.9 Registration Statement; Proxy Statement..............................................................27
ARTICLE VI REPRESENTATIONS AND WARRANTIES OF UNITED AND NEW UNITED...............................................28
6.1 Representations and Warranties of United.............................................................28
6.2 Representations and Warranties of New United.........................................................43
ARTICLE VII CERTAIN COVENANTS OF THE PARTIES.....................................................................50
7.1 Conduct of Business in Ordinary Course Pending Closing...............................................50
7.2 Stockholders Meeting.................................................................................55
7.3 Proxy Statement; Registration Statement; Other Commission Filings....................................55
7.4 No Solicitation; Acquisition Proposals...............................................................56
7.5 Consents and Approvals...............................................................................57
7.6 Tax-Free Exchange....................................................................................58
7.7 Stockholders Agreement...............................................................................59
7.8 Voting Agreement.....................................................................................59
7.9 United/Liberty Agreement.............................................................................59
7.9A New United Covenant Agreement........................................................................59
7.9B No Waiver Agreement..................................................................................59
7.10 Standstill Agreement.................................................................................59
7.11 Registration Rights Agreement........................................................................59
7.12 Exchange Agreement...................................................................................59
7.13 Listing Application..................................................................................60
7.14 Investigation; Confidentiality.......................................................................60
7.15 [Reserved.]..........................................................................................61
7.16 [Reserved.]..........................................................................................61
7.17 [Reserved.]..........................................................................................61
7.18 [Reserved.]..........................................................................................61
7.19 [Reserved.]..........................................................................................61
7.20 UPC Bonds............................................................................................61
7.21 Senior Secured Notes.................................................................................61
7.22 Fairness Opinions....................................................................................62
7.23 Interim Stockholder Arrangements.....................................................................62
ARTICLE VIII CONDITIONS PRECEDENT TO THE OBLIGATIONS OF EACH PARTY TO CLOSE......................................63
8.1 United Stockholder Approval..........................................................................63
8.2 HSR Act..............................................................................................63
8.3 Consents and Approvals...............................................................................63
8.4 Absence of Injunctions...............................................................................63
8.5 Fairness Opinions....................................................................................64
8.6 Transaction Documents................................................................................64
ARTICLE IX CONDITIONS PRECEDENT TO THE OBLIGATIONS OF NEW UNITED TO CLOSE........................................64
9.1 Representations and Warranties True as of the Closing Date...........................................64
9.2 Compliance with this Agreement.......................................................................64
9.3 Certificates.........................................................................................64
9.4 Opinion of Counsel to the Liberty Parties............................................................65
ARTICLE X CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE PARTIES TO THE UNITED/NEW UNITED MERGER.................65
10.1 United's Obligation..................................................................................65
10.2 New United's Obligation..............................................................................65
ARTICLE XI CONDITIONS PRECEDENT TO THE OBLIGATION OF THE LIBERTY PARTIES TO CLOSE................................66
11.1 Representations and Warranties True as of the Closing Date...........................................66
11.2 Compliance with this Agreement.......................................................................66
11.3 Certificates.........................................................................................66
11.4 Opinion of Counsel to United.........................................................................67
11.5 [Reserved.]..........................................................................................67
11.6 Tax Opinion..........................................................................................67
11.7 [Reserved.]..........................................................................................67
11.8 [Reserved.]..........................................................................................67
11.9 Indenture............................................................................................67
11.10 Fee Letter...........................................................................................67
11.11 [Reserved.]..........................................................................................67
11.12 [Reserved.]..........................................................................................67
11.13 [Reserved.]..........................................................................................68
ARTICLE XII CONDITIONS PRECEDENT TO THE OBLIGATION OF THE FOUNDERS TO CLOSE......................................68
12.1 Representations and Warranties True as of the Closing Date...........................................68
12.2 Compliance with this Agreement.......................................................................68
12.3 Certificates.........................................................................................68
12.4 [Reserved.]..........................................................................................68
12.5 Tax Opinion..........................................................................................69
ARTICLE XIII TAX MATTERS.........................................................................................69
13.1 [Reserved.]..........................................................................................69
13.2 [Reserved.]..........................................................................................69
13.3 [Reserved.]..........................................................................................69
13.4 Transfer Taxes.......................................................................................69
13.5 [Reserved.]..........................................................................................69
13.6 [Reserved.]..........................................................................................69
13.7 [Reserved.]..........................................................................................69
13.8 [Reserved.]..........................................................................................69
13.9 Restructuring Transaction Indemnity..................................................................69
13.10 Treatment of Indemnity Payments......................................................................70
13.11 Survival.............................................................................................70
ARTICLE XIV CLOSING; CLOSING DATE................................................................................70
14.1 Closing..............................................................................................70
14.2 Closing Deliveries...................................................................................70
ARTICLE XV SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS; INDEMNIFICATION................................74
15.1 Survival of Representations, Warranties and Covenants................................................74
15.2 Indemnification by Liberty Party.....................................................................74
15.3 Indemnification by Founders..........................................................................75
15.4 Indemnification by New United and United.............................................................75
15.5 Defense of Action....................................................................................76
15.6 Limitations on Indemnification for Breach of Representations and Warranties..........................77
15.7 Insurance Proceeds...................................................................................78
15.8 Exclusive Monetary Remedy; No Consequential Damages..................................................78
ARTICLE XVI TERMINATION OF AGREEMENT.............................................................................78
16.1 Termination..........................................................................................78
16.2 Limitation of Liabilities in the Event of Termination................................................79
16.3 Stockholder Arrangements.............................................................................79
ARTICLE XVII MISCELLANEOUS.......................................................................................80
17.1 Expenses.............................................................................................80
17.2 Entire Agreement; Release............................................................................80
17.3 Governing Law; Waiver of Jury Trial, Etc.............................................................81
17.4 Headings.............................................................................................81
17.5 Notices..............................................................................................81
17.6 Separability.........................................................................................83
17.7 Amendment; Waiver....................................................................................83
17.8 Publicity............................................................................................83
17.9 Assignment and Binding Effect........................................................................83
17.10 No Benefit to Others.................................................................................83
17.11 Counterparts.........................................................................................83
17.12 Interpretation.......................................................................................83
17.13 Rules of Construction................................................................................84
AMENDED AND RESTATED
AGREEMENT AND PLAN OF RESTRUCTURING AND MERGER
This AMENDED AND RESTATED AGREEMENT AND PLAN OF RESTRUCTURING AND MERGER (this "Agreement") is entered into as of December 31, 2001 (the "Amendment Date") among UnitedGlobalCom, Inc., a Delaware corporation ("United"), New UnitedGlobalCom, Inc., a Delaware corporation ("New United"), United/New United Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary of New United ("United/New United Merger Sub"), Liberty Media Corporation, a Delaware corporation ("Liberty Media"), Liberty Media International, Inc., a Delaware corporation ("LMI"), Liberty Global, Inc., a Delaware corporation ("Liberty Global") and each Person indicated as a "Founder" on the signature pages hereto (each such Person, a "Founder"). Capitalized terms used and not otherwise defined in this Agreement have the respective meanings ascribed thereto in Section 1.1.
WITNESSETH:
WHEREAS, United, Liberty Media and LMI have entered into an Agreement and Plan of Restructuring and Merger, dated as of December 3, 2001 (the "Original Agreement"), setting forth the terms and conditions upon which, among other things, the following transactions will occur as part of the same plan of restructuring: (a) Liberty Media will contribute or cause to be contributed to New United all of the shares of Class B Common Stock, par value US $0.01 per share, of United ("United Class B Stock") owned by Liberty Media and its wholly owned Subsidiaries and some of the shares of Class A Common Stock, par value US $0.01 per share, of United ("United Class A Stock and, together with the United Class B Stock, "United Common Stock") owned by Liberty Media and its wholly owned Subsidiaries in exchange for an equal number of shares of Class C Common Stock, par value US $0.01 per share, of New United ("New United Class C Stock"), (b) the Founders will contribute all of the shares of United Class B Stock owned by them to their respective Founder Newco (as defined herein) and cause each Founder Newco to merge into New United in exchange for a number of shares of Class B Common Stock, par value US $0.01 per share, of New United ("New United Class B Stock") equal to the number of shares of United's common stock then owned by such Founder Newco, (c) United/New United Merger Sub will merge with and into United, with United being the surviving entity in such merger and the outstanding stock of United being converted into stock of New United or stock of the surviving entity in such merger or cancelled, as more fully described herein, and (d) Liberty Media will contribute or cause to be contributed certain assets and liabilities of its subsidiary, Liberty-Belmarken, Inc., a Delaware corporation ("Liberty Sub"), all of the Liberty UPC Bonds (as defined herein) and cash to New United in exchange for shares of New United Class C Stock; and
WHEREAS, the parties have decided to amend and restate the Original Agreement in its entirety in order to (a) provide that the holders of all of the issued and outstanding shares of United Preferred Stock will receive merger consideration consisting of shares of New United Class A Stock, (b) amend the Liberty UPC Bond Cost as of November 30,
2001 as set forth on Schedule 1.1 attached to this Agreement, and (c) make certain other amendments to the Agreement, as more fully set forth herein; and
WHEREAS, concurrent with the execution and delivery of the Original Agreement, the Senior Notes Agreements were entered into and, in accordance therewith, (a) Liberty acquired from United 11,976,048 shares of United Class A Stock for US $20,000,000 in cash (the "Note Shares") and an additional 14,970 shares of United Class A Stock for US $25,000 in cash, (b) United acquired all of the Senior Notes in exchange for US $20,000,000 in cash, (c) United paid an aggregate of US $241,309,065.79 (the "Make Whole Payment") to the holders of the Senior Notes (collectively, the "Make Whole Bankers") in satisfaction in full of its obligations under the Fee Letter, and (d) to facilitate the foregoing, Liberty and Liberty Argentina, Inc., a Delaware corporation and a wholly owned Subsidiary of Liberty ("Liberty Argentina"), paid a total of US $241,309,065.79 to UIPI and United as prepayment in full of the indebtedness evidenced by the $200,000,000 Note and as a partial prepayment of the indebtedness evidenced by the $310,000,000 Notes;
NOW, THEREFORE, in consideration of the mutual promises, covenants and agreements set forth herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto do hereby agree as follows:
ARTICLE I
DEFINITIONS
1.1 Definitions. For purposes of this Agreement, the following terms shall have the following meanings:
"$200,000,000 Note" means the promissory note, dated December 8, 2000, in the principal amount of US $200 million payable by Liberty Media to United, which promissory note was canceled and returned to Liberty Media upon the prepayment on the Original Agreement Date of the indebtedness evidenced thereby.
"$310,000,000 Notes" means the promissory note, dated December 27, 2000, in the original principal amount of US $42,405,760 (US $22,411,979.02 of which principal amount, together with all accrued and unpaid interest on the entire principal amount of such promissory note through December 2, 2001, was paid by Liberty Argentina on December 3, 2001) payable by Liberty Argentina to United, which promissory note is now held by UIPI, the promissory note, dated February 5, 2001, in the principal amount of US $33,827,447 payable by Liberty Argentina to United, which promissory note is now held by UIPI, and the promissory note, dated April 30, 2001, in the principal amount of US $233,766,793 payable by Liberty Argentina to UIPI.
"Adjustment" means the deemed increase in a Tax, determined using the assumptions set forth in the next sentence, resulting from an adjustment made with respect to any amount reflected or required to be reflected on any Tax Return relating to such Tax. For purposes of determining such deemed increase in Tax, the following assumptions will be used: (a) in the case of any Income Tax, the highest marginal Tax rate or, in the case of any other Tax,
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the highest applicable Tax rate, in each case in effect with respect to that Tax for the Taxable period or any portion of the Taxable period to which the adjustment relates; and (b) such determination shall be made without regard to whether any actual increase in such Tax will in fact be realized with respect to the Tax Return to which such adjustment relates (as a result, for example, of losses, credits or other offsets against Tax).
"Affiliate" of a Person shall mean any Person that directly, or indirectly through one or more intermediaries, Controls, is Controlled by, or is under common Control with, the Person in question. Notwithstanding anything in the foregoing to the contrary, under no circumstances will New United, United or any of their respective Subsidiaries be considered an Affiliate of Liberty or LMI.
"After-Tax Basis" shall mean an amount that, after subtraction of the aggregate additional Taxes incurred or to be incurred by the party receiving the indemnification payment, is equal to the amount of the correlative Adjustment. For purposes of determining such additional Taxes incurred or to be incurred, the following assumptions will be used: (a) in the case of any Income Tax, the highest marginal Tax rate or, in the case of any other Tax, the highest applicable Tax rate, in each case in effect with respect to that Tax for the Taxable period or any portion of the Taxable period to which the indemnification payment relates; and (b) such determination shall be made without regard to whether any actual additional Taxes will in fact be realized with respect to the Tax Return to which such payment relates (as a result, for example, of losses, credits or other offsets against Tax).
"August 1999 Agreement" means the letter agreement, dated August 30, 1999, among UPC, United and Liberty Media, including the exhibits thereto.
"Available New United Commission Filings" means the Registration Statement.
"Average Market Price" means, with respect to any publicly traded security as of any relevant date of determination, the average of the Closing Prices per share or other unit of such security for the period of ten Trading Days ending on and including the third Trading Day prior to such relevant date of determination.
"Belmarken Loan Agreements" means, collectively, the Loan Agreement, dated as of May 25, 2001, among Belmarken Holding B.V., UPC, UPC Internet Holding B.V. and Liberty Sub, and all agreements, including pledge and security agreements, entered into or to be entered into in connection therewith.
"Belmarken Notes" means the 6% Guaranteed Discount Notes due 2007 issued pursuant to the Belmarken Loan Agreements.
"Business Day" means any day other than Saturday, Sunday and a day on which banks are required or permitted to close in Denver, Colorado or New York, New York.
"Closing Date" means the date on which the Closing occurs.
"Closing Price" of a share or other unit of any security on any Trading Day is (i) the last reported sale price for a share or other unit of such security on such Trading Day as
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reported on the principal United States or foreign securities exchange on which such security is listed or admitted for trading or (ii) if such security is not listed or admitted for trading on any such securities exchange, the last reported sale price for a share or other unit of such security on such Trading Day as reported on The Nasdaq Stock Market or (iii) if such security is not listed or admitted to trading on any United States or foreign securities exchange or The Nasdaq Stock Market, the average of the highest bid and lowest asked prices for a share or other unit of such security on such Trading Day in the over-the-counter market as reported by The National Quotation Bureau Incorporated, or any similar organization.
"Code" means the Internal Revenue Code of 1986.
"Commission" means the United States Securities and Exchange Commission.
"Control" shall mean the ability to direct or cause the di ...
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