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|LIBERTY BROADBAND CORP filed this Form SC 13D/A on 06/01/2015|
from the liability provisions of Section 16(b) of the Securities Exchange Act of 1934, as amended (the Exchange Act), pursuant to Rule 16b-3 promulgated thereunder, or any similar rule or regulation hereafter adopted by the SEC having substantially the same effect as such rule.
The Exchange is conditioned upon each condition to the transactions contemplated by the Mergers Agreement having been satisfied, waived (subject to the Contribution Covenants) or capable of being satisfied concurrently with the completion of the TWC Transactions. The Charter Contribution Agreement will terminate automatically upon the termination of the Mergers Agreement in accordance with its terms. The Charter Contribution Agreement is terminable by the Reporting Person and LIC, on the one hand, and New Charter and Merger Sub 1, on the other hand, upon a material breach of any representation or warranty or material failure to perform any covenant or agreement on the part of the other set forth in the Charter Contribution Agreement.
Proxy and Right of First Refusal Agreement
In connection with the TWC Transactions, the Reporting Person and LIC entered into the LIC Proxy Agreement, pursuant to which, in connection with the closing of the transactions contemplated by the Mergers Agreement, LIC will grant Liberty an irrevocable proxy to vote all New Charter Shares owned beneficially or of record by LIC following such closing (such shares, the LIC Proxy Shares). The LIC Proxy Agreement provides that the Reporting Person may not vote the LIC Proxy Shares on certain reserved matters including, among other things, change of control transactions of New Charter, bankruptcy events of New Charter, and an authorization of any new class of securities of New Charter. The LIC Proxy Agreement will terminate on the first to occur of (i) the fifth anniversary of the Closing Date, (ii) the occurrence of a 40 Act Event (as defined in the LIC Proxy Agreement), (iii) upon a material breach by Liberty of any of its agreements contained in the LIC Proxy Agreement (subject to certain cure rights), (iv) a Liberty Change of Control (as defined in the Second Amended and Restated Stockholders Agreement), and (v) the mutual agreement of Liberty and LIC.
So long as the LIC Proxy Agreement is in effect, if LIC proposes to transfer any LIC Proxy Shares, Liberty will have a right of first refusal (LIC ROFR) to purchase all or a portion of any such securities LIC proposes to transfer. The purchase price per share for any securities sold to the Liberty pursuant to the LIC ROFR will be the volume-weighted average price of New Charter Shares for the two trading day period before the notice of a proposed sale by LIC, payable in cash. Certain transfers are permitted to affiliates of LIC, subject to the transferee entity entering into an agreement assuming the transferors obligations under the LIC Proxy Agreement, including a transfer to a LIC Qualified Distribution Transferee in a LIC Distribution Transaction (each as defined in the LIC Proxy Agreement).
The LIC ROFR does not apply to transfers (i) by LIC in connection with a change of control of New Charter or (ii) to any holder of a convertible or exchangeable instrument issued by LIC. Liberty may not exercise the LIC ROFR to the extent the shares purchased would result in its ownership of securities exceeding the voting or equity limits set forth in the Second Amended and Restated Stockholders Agreement.
The foregoing summaries of each of the Charter Investment Agreement, TWC Voting Agreement, Charter Contribution Agreement and the LIC Proxy Agreement are each qualified by reference to the full text of each such document, which documents are incorporated herein by reference and attached as exhibits to this Statement.
Background Information in Connection with the Bright House Transactions
In connection with the proposed Bright House Transactions, on May 23, 2015, the Reporting Person entered into the Second Amended and Restated Stockholders Agreement with Charter, New Charter and A/N. The existing Stockholders Agreement with Charter, as first amended on September 29, 2014 (as described in the Schedule 13D) and as further amended by the Charter Investment Agreement (the Existing Stockholders Agreement), will remain in effect until the earlier to occur of (i) the Bright House Closing and (ii) the closing of the TWC Transactions. In addition, certain provisions of the Second Amended and Restated Stockholders Agreement became effective upon execution thereof. Upon the earlier to occur of (i) the Bright House Closing and (ii) the closing of the TWC Transactions, the Second Amended and Restated Stockholders Agreement will replace the Existing Stockholders Agreement in all respects, except that the Second Amended and Restated Stockholders Agreement will terminate in accordance with its terms if the Bright House Closing does not occur (in which case the Existing Stockholders Agreement shall be reinstated).