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SC 13D/A
LIBERTY BROADBAND CORP filed this Form SC 13D/A on 05/26/2016
Entire Document
 

 

Preemptive Rights

 

If Charter proposes to issue any equity securities of Charter in a capital raising transaction, each of Liberty and A/N (for so long as such person’s equity interest is equal to or greater than 10%), will have the right to purchase, in whole or in part, a number of such securities necessary to maintain its ownership of Charter after giving effect to the issuance, for cash.  Additionally, subject to certain exceptions, until the fifth anniversary of the Bright House Closing, if Charter proposes to issue any equity securities of Charter (other than in a capital raising transaction) and so long as Liberty has a 17.01% equity interest in Charter, Liberty will have preemptive rights to purchase that number of new securities equal to the lesser of (x) the number of securities necessary to maintain its equity ownership of Charter after giving effect to the issuance and (y) the number of new securities that after giving effect to the issuance, will result in Liberty having an equity interest in Charter of 25.01%, in each case, for cash.  Subject to Liberty’s exercise of its preemptive rights in respect of such issuance, A/N will also have certain preemptive rights in the case of new issuances (other than in a capital raising transaction), provided that it holds 10% or more of the Charter equity.

 

Termination

 

The Stockholders Agreement will terminate upon certain events including, but not limited to, (i) with respect to (x) Liberty or A/N, upon a material breach by Charter (determined as set forth in the Stockholders Agreement), and (y) with respect to Charter (determined as set forth in the Stockholders Agreement), upon a material breach by Liberty or A/N, in each case subject to certain cure rights, and (ii) as to A/N or Liberty, at such time as its equity ownership is 5% or less.  Upon a Liberty Change of Control (as defined in the Stockholders Agreement), Liberty’s rights and obligations under the Stockholders Agreement would cease to apply other than its obligations under Liberty’s voting and share ownership caps, standstill obligations and transfer restrictions.

 

The foregoing summary of the Stockholders Agreement, as amended by the Side Letter, is qualified by reference to the full text of each such document, which documents are incorporated herein by reference and included as exhibits to this Statement.

 

Proxy and Right of First Refusal Agreement with A/N

 

At the Bright House Closing, the Reporting Person, A/N, and for limited purposes, Legacy Charter and Charter, entered into the A/N Proxy/ROFR Agreement, as amended by the Side Letter.

 

Proxy

 

A/N granted Liberty a 5-year irrevocable proxy (the “Proxy”) from the date of the Bright House Closing to vote that number of Proxy Shares that will result in Liberty having voting power in Charter equal to 25.01% of the outstanding voting power of Charter, provided, that the voting power of the Proxy Shares will be capped at 7.0% of the outstanding voting power of Charter.  If the number of shares of Common Stock and Class B Common Stock which represent voting power equal to 25.01% of the outstanding voting power of Charter is not a whole number of shares, the number of shares of Common Stock and Class B Common Stock necessary to achieve 25.01% will be rounded up to the nearest whole number.

 

The A/N Proxy/ROFR Agreement provides that Liberty may not vote the Proxy Shares on certain reserved matters including, among other things, change of control transactions of Charter, bankruptcy events of Charter or Charter Holdco, an authorization of any new class of securities of Charter or Charter Holdco, approvals of any non-ordinary course matters relating to A/N and changes to the terms of the Class B Common Stock.

 

The Proxy will terminate in the event that Liberty transfers shares of Charter other than in connection with certain permitted transfers.

 

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