Exhibit 10.1

 

EXECUTION COPY

 

SPINCO AGREEMENT

 

This Spinco Agreement (this “Agreement”), dated as of May 13, 2008, is by and
among IAC/InterActiveCorp, a Delaware corporation (“IAC”), Barry Diller (for
purposes of Section 4(c) only), Liberty Media Corporation, a Delaware
corporation (“Liberty”), and the other Liberty Parties (as herein defined).

 

WHEREAS, on November 5, 2007 IAC publicly announced the Proposed Spinoff
Transactions (as herein defined);

 

WHEREAS, the Board of Directors of IAC may determine to effect one or more of
the proposed Spinoffs in the form of a Single-Tier Spinoff (as such terms are
herein defined); and

 

WHEREAS, the parties desire to set forth certain understandings and agreements
in connection with the Proposed Spinoff Transactions.

 

NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, and intending to be legally bound, the parties
hereto agree as follows:

 

1.  Definitions

 

“Affiliate” shall have the meaning given such term in Rule 12b-2 under the
Exchange Act.  For purposes of this definition, (i) natural persons shall not be
deemed to be Affiliates of each other, (ii) none of IAC, Mr. Diller or any of
their respective Affiliates shall be deemed to be Affiliates of Liberty or its
Affiliates and (iii) none of the Spincos shall be deemed to be Affiliates of
Liberty or its Affiliates.

 

“Applicable Percentage” with respect to any Spinco means the sum of Liberty’s
Ownership Percentage with respect to such Spinco upon the consummation of the
Spinoff of such Spinco plus 5%, but in no event more than 35%; provided that
(i) if after the Spinoff Date with respect to any Spinco, Liberty Transfers
Beneficial Ownership of any Equity Securities of such Spinco to a third party
(other than in (1) a Transfer to an Affiliate of Liberty that agrees to be bound
hereby pursuant to Section 9(c) or (2) a Transfer pursuant to
Section 5(d)(i)(7)(i)), (x) if such Transfer is not a Permitted Restricted
Transfer or a Transfer under Section 5(d)(i)(7)(ii), the then-applicable
Applicable Percentage with respect to such Spinco shall be reduced by the
Ownership Percentage so Transferred and (y) in the case of a Permitted
Restricted Transfer or a Transfer under Section 5(d)(i)(7)(ii), (a) the
Applicable Percentage applicable to the Restricted Transferee or the Distributed
Company, as the case may be, shall be the Applicable Percentage with respect to
such Spinco applicable to Liberty or the transferring Restricted Transferee or
Distributed Company, as applicable, immediately prior to such Transfer and
(b) from and after such Permitted Restricted Transfer or a Transfer under
Section 5(d)(i)(7)(ii), the Applicable Percentage applicable to Liberty or the
transferring Restricted Transferee or Distributed Company, as applicable, shall
be 0%, and (ii) with respect to a Spinco the Spinoff of which shall be a
Sponsored Spinoff, “Applicable Percentage” means the greatest of (x) the sum of
Liberty’s

 

 

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Ownership Percentage with respect to such Spinco giving effect to the
consummation of the Sponsor’s initial investment pursuant to the applicable
Sponsorship Agreement plus 5%, but in no event greater than 35%, (y) the
Ownership Percentage of the applicable Sponsor with respect to such Spinco after
giving effect to the consummation of its initial investment pursuant to the
applicable Sponsorship Agreement or (z) in the event the applicable Sponsorship
Agreement permits or provides for (through the exercise of warrants or other
rights or conversion of securities) the Sponsor to have an Ownership Percentage
with respect to such Spinco in excess of that specified in clause (y), such
higher percentage so permitted or provided for (in the case of subclause
(i)(y) and this clause (ii), subject to reduction pursuant to subclause
(i)(x) in respect of a Transfer of Beneficial Ownership of Equity Securities by
Liberty, a Restricted Transferee or a Distributed Company, as applicable).

 

“Assignment and Assumption Agreement” means any of a New Holder Assignment and
Assumption Agreement, an Affiliate Assignment and Assumption Agreement or a
Spinco Assignment and Assumption Agreement.

 

“Beneficial Ownership” or “Beneficially Own” shall have the meaning given such
term in Rule 13d-3 under the Exchange Act and a Person’s Beneficial Ownership of
securities shall be calculated in accordance with the provisions of such Rule;
provided, however, that for purposes of determining any Person’s Beneficial
Ownership, such Person shall be deemed to be the Beneficial Owner of any Equity
Securities of a Spinco which may be acquired by such Person (disregarding any
legal impediments to such Beneficial Ownership), whether within 60 days or
thereafter, upon the conversion, exchange, redemption or exercise of any
warrants, options, rights or other securities issued by such Spinco or any
subsidiary thereof.  Notwithstanding anything to the contrary set forth herein,
(x) (i) prior to the delivery to any counterparty of Equity Securities in final
settlement of a Hedging Transaction and (ii) with respect to any Stock Lending
Transactions effected in accordance with this Agreement until such time as the
lending Liberty Party no longer has a right to the return of the securities lent
thereunder, Liberty will be deemed to Beneficially Own all Equity Securities
subject to such Hedging Transaction or Stock Lending Transaction and (y) prior
to the pledgee commencing action to foreclose upon any Equity Securities pledged
in accordance with Section 5(d)(v) of this Agreement, any such pledged Equity
Securities will be deemed Beneficially Owned by the pledging party.

 

“Business Day” means any day other than a Saturday, Sunday or a day on which the
banks in New York, New York are authorized or required by law to remain closed.

 

“Code” means the Internal Revenue Code of 1986, as amended.

 

“Covered Transaction” involving any Spinco shall mean (i) a tender or exchange
offer by a third party for shares of capital stock of such Spinco, resulting in
such third party (or any “group” of which such third party is a member (as such
term is used in Sections 13(d) and 14(d) of the Exchange Act)) becoming the
Beneficial Owner of securities representing greater than 35% of the outstanding
shares of Spinco Common Stock and other Equity Securities of such Spinco that
are, at the time of commencement of such offer, convertible into or exchangeable
for Spinco Common Stock (calculated on a Spinco Common Stock equivalent basis)
or Voting Securities of such Spinco representing greater than 35% of the voting
power of the outstanding Voting Securities of such Spinco, (ii) a merger,
consolidation, business combination or similar

 

 

 

 

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extraordinary transaction involving such Spinco and a third party upon which the
holders of the outstanding Spinco Common Stock and other Equity Securities of
such Spinco that are then convertible into or exchangeable for Spinco Common
Stock (calculated on a Spinco Common Stock equivalent basis) immediately prior
to such transaction would cease to own securities representing greater than a
majority of the outstanding shares of Spinco Common Stock and other Equity
Securities of such Spinco that are then convertible into or exchangeable for
Spinco Common Stock (calculated on a Spinco Common Stock equivalent basis) or
Voting Securities of such Spinco representing greater than a majority of the
voting power of the outstanding Voting Securities of such Spinco (or upon any
merger or consolidation in which such Spinco does not survive, the surviving or
successor entity) or (iii) the sale of assets of such Spinco that generated 30%
or more of the consolidated total revenues or EBITDA (determined in accordance
with GAAP) of such Spinco and its subsidiaries for the twelve months ending on
the last day of the last completed fiscal quarter of such Spinco (which, for the
avoidance of doubt, shall not include merger, consolidation, business
combination or similar transactions described in clause (ii) above), to any
third party.  For the avoidance of doubt, with respect to any Spinco the Spinoff
of which is a Sponsored Spinoff, the applicable Sponsor shall be considered a
third party for purposes of the foregoing definition and for all purposes of
Section 6 of this Agreement.

 

“Distribution Transaction” involving any Person which Beneficially Owns Equity
Securities means any transaction pursuant to which the equity interests of
(i) such Person or (ii) any Person that directly or indirectly owns a majority
of the equity interests of such Person are distributed (whether by redemption,
dividend, share distribution, merger or otherwise) to all the holders of one or
more classes or series of the common stock of Parent Company that are registered
under Section 12(b) or 12(g) of the Exchange Act (all the holders of one or more
such classes or series, “Parent Company Holders”), on a pro rata basis with
respect to each such class or series, or such equity interests of such Person
are available to be acquired by Parent Company Holders (including through any
rights offering, exchange offer, exercise of subscription rights or other offer
made available to Parent Company Holders), on a pro rata basis with respect to
each such class or series, whether voluntary or involuntary.

 

“End Date” means December 31, 2009.

 

                “Equity Securities” of any Spinco means the equity securities of
such Spinco, including shares of such Spinco’s Spinco Common Stock and shares of
Spinco Common Stock or other equity securities of such Spinco issuable upon
exercise, conversion, exchange or redemption of any warrants, options, rights or
other securities issued by such Spinco or any subsidiary thereof.

 

                “Equity Securities Basket” of a Spinco shall be a number equal
to one-third (1/3) of the aggregate number of shares of Spinco Common Stock or
other equity securities issued or distributed to the Liberty Parties in
connection with the Spinoff of such Spinco, as such number (and the number of
Equity Securities thereafter permitted to be acquired pursuant to
Section 5(a) or Transferred pursuant to Section 5(e) without exceeding the
Equity Securities Basket) may be appropriately adjusted to reflect the effects
of any subdivision, split, reverse split, stock dividend, combination,
reclassification or similar event occurring after the Spinoff Date of such
Spinco; provided, that, the Equity Securities Basket of TM PubCo shall be zero
for all purposes under this Agreement.

 

 

 

 

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 “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the
rules and regulations of the Securities Exchange Commission promulgated
thereunder (as in effect on the date of this Agreement).

 

“Fall-Away Date” with respect to any Spinco, means the first date on which
Liberty’s Ownership Percentage with respect to such Spinco first falls below
20%; provided, that:

 

                (i) the Fall-Away Date shall not be deemed to have occurred
prior to the second anniversary of the Spinoff Date if (x) Liberty’s Ownership
Percentage immediately after the Spinoff of such Spinco was less than 20% other
than as a result of any sale or transfer by Liberty or its Affiliates of IAC
securities prior to the applicable Spinoff Date or (y) Liberty’s Ownership
Percentage falls below 20% as the result of an issuance of Equity Securities of
such Spinco, except that, in the case of clause (x) or (y), the Fall-Away Date
will occur prior to such second anniversary immediately upon Liberty
Transferring Beneficial Ownership of any Equity Securities of such Spinco (other
than as permitted by clauses (3), (6) and (7) of Section 5(d)(i)) at a time that
its Ownership Percentage is, or after giving effect to such Transfer would be,
less than 20%;

 

                (ii) if Liberty’s Ownership Percentage at the second anniversary
of the Spinoff Date of such Spinco is less than 20%, and the Fall-Away Date has
not otherwise occurred, then the Fall-Away Date will be deemed to occur on the
earlier of (x) the thirty month anniversary of the Spinoff Date of such Spinco
and (y) the date of any Transfer by Liberty of Beneficial Ownership of Equity
Securities of such Spinco (other than as permitted by clauses (3), (6) and
(7) of Section 5(d)(i)); and

 

                (iii) if Liberty’s Ownership Percentage is 20% or more following
the second anniversary of the Spinoff Date of such Spinco, the Fall Away Date
will be deemed to occur on the first date thereafter on which Liberty’s
Ownership Percentage with respect to such Spinco falls below 20%.

 

“Governance Agreement” means that certain Amended and Restated Governance
Agreement, dated as of August 9, 2005, among IAC, Liberty and Barry Diller.

 

“Hedging Transaction” means any transaction involving a Liberty Party or
Affiliate thereof whereby the counterparty engages in a (i) short sale,
(ii) purchase, sale or grant of any right (including any put or call option), or
(iii) forward sale (whether for a fixed or variable number of shares or at a
fixed or variable price) of or with respect to, or any loan secured by, any
Spinco’s Spinco Common Stock or any security (other than a broad-based market
basket or index) that includes, relates to or derives any significant part of
its value from any Spinco’s Spinco Common Stock, and such term includes (a) the
pledge by any Liberty Party or Affiliate thereof of any Spinco’s Spinco Common
Stock in connection with any of the foregoing to secure the obligations of the
pledgor under a Hedging Transaction and (b) the pledge of a Hedging Transaction
itself to secure any extension of credit to a party based, in whole or part, on
the value thereof.

 

 “HSN PubCo” means a Delaware corporation, currently a direct or indirect wholly
owned subsidiary of IAC or to be formed in connection with the Proposed Spinoff
Transactions,

 

 

 

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which shall be the direct or indirect holder of 100% of the outstanding common
stock or other ownership interests of HSN Sub at the time of the Proposed
Spinoff Transaction, and the common stock of which is distributed (by means of
merger, dividend or otherwise) to the holders of IAC Common Stock in connection
therewith to effect the spinoff of IAC’s retailing business.

 

“HSN Sub” means HSN LP, a Delaware limited partnership.

 

“IAC Common Stock” means the Common Stock, par value $.001 per share, of IAC and
the Class B Common Stock, par value $.001 per share, of IAC.

 

“Independent Director” of a Spinco means a director that is, as to such Spinco,
“independent” within the meaning of the rules and regulations of NASDAQ, or, if
such Spinco’s Spinco Common Stock (or shares of capital stock of such Spinco
issued in substitution therefor in connection with any combination,
reclassification, recapitalization, merger, consolidation, exchange or other
similar reorganization) is not at the time of determination listed on NASDAQ,
the rules and regulations of such other national securities exchange on which
such securities are primarily traded.

 

“Interval PubCo” means a Delaware corporation, currently a direct or indirect
wholly owned subsidiary of IAC or to be formed in connection with the Proposed
Spinoff Transactions, which shall be the direct or indirect holder of 100% of
the outstanding common stock of Interval Sub at the time of the Proposed Spinoff
Transaction, and the common stock of which is distributed (by means of merger,
dividend or otherwise) to the holders of IAC Common Stock in connection
therewith to effect the spinoff of IAC’s vacations business.

 

“Interval Sub” means Interval Acquisition Corp., a Delaware corporation.

 

“Liberty Director” means, with respect to any Spinco, any person designated by
Liberty to serve on such Spinco’s Board of Directors who is reasonably
acceptable to the Board of Directors of IAC (in the case of persons designated
by Liberty to so serve at or prior to the time of the Spinoff of such Spinco) or
reasonably acceptable to a majority of those directors of such Spinco that are
not Liberty Directors of such Spinco (in all other cases).

 

“Liberty Parties” means (w) Liberty, (x) each of the parties whose names are set
forth on the signature pages hereto other than IAC and Barry Diller, (y) each
Affiliate of Liberty that acquires record ownership of any shares of IAC Common
Stock prior to the Spinoff Date of any Spinco (which Affiliate will agree, in a
writing substantially similar to an Affiliate Assignment and Assumption
Agreement (with appropriate modifications), to be bound by this Agreement as a
“Liberty Party” upon such Affiliate’s acquisition of such record ownership), and
(z) each Affiliate of Liberty that acquires record ownership of any Equity
Securities of a Spinco, in the case of a Person described in clause (x), (y) or
(z), until such time as such Person is not an Affiliate of Liberty or ceases to
have record ownership of any IAC Common Stock or Equity Securities of such
Spinco, as the case may be.

 

 “LT PubCo” means a Delaware corporation, currently a direct or indirect wholly
owned subsidiary of IAC or to be formed in connection with the Proposed Spinoff
Transactions, which shall be the direct or indirect holder of 100% of the
outstanding limited liability company interests in LT Sub at the time of the
Proposed Spinoff Transaction (other than such interests

 

 

 

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held by management of LT Sub or any sponsoring investor), and the common stock
of which is distributed (by means of merger, dividend or otherwise) to the
holders of IAC Common Stock in connection therewith to effect the spinoff of
IAC’s Lending Tree and real estate business.

 

“LT Sub” means Lending Tree LLC, a Delaware limited liability company.

 

                “OWNERSHIP PERCENTAGE” OF ANY PERSON, WITH RESPECT TO ANY SPINCO
MEANS, AT ANY TIME, THE RATIO, EXPRESSED AS A PERCENTAGE, OF (I) THE TOTAL
VOTING POWER OF THE EQUITY SECURITIES OF SUCH SPINCO BENEFICIALLY OWNED BY SUCH
PERSON AND ITS AFFILIATES TO (II) THE SUM OF (X) THE TOTAL VOTING POWER OF TOTAL
EQUITY SECURITIES OF SUCH SPINCO AND (Y) WITH RESPECT TO SUCH PERSON, THE TOTAL
VOTING POWER OF THE SHARES OF SPINCO COMMON STOCK INCLUDED IN CLAUSE (I) THAT
ARE ISSUABLE UPON CONVERSION, EXCHANGE, REDEMPTION OR EXERCISE OF EQUITY
SECURITIES OF SUCH SPINCO THAT ARE NOT INCLUDED IN CLAUSE (X).

 

                “Parent Company” means the publicly traded Person which
Beneficially Owns, through an unbroken chain of majority-owned subsidiaries, the
Person having record ownership of the Equity Securities of the applicable
Spinco.  For purposes of this definition, the term “publicly traded” means that
the Person in question (x) has a class or series of equity securities registered
under Section 12(b) or 12(g) of the Exchange Act or (y) is required to file
reports pursuant to Section 15(d) of the Exchange Act.

 

                “Permitted Restricted Transfer” has the meaning specified in
Section 5(d)(i) hereof.

 

                “Person” means any individual, partnership, joint venture,
corporation, limited liability company, trust, unincorporated organization,
government or department or agency of a government.

 

                “Prohibited Transferee” means, with respect to any Spinco, any
Person on the Prohibited Transferee List applicable to such Spinco (and any
Person bearing a relationship specified in Section 267(b) or 707(b)(1) of the
Code to such listed Person); provided, that none of Liberty, any Liberty Party
or any direct or indirect wholly owned subsidiary of Liberty shall be a
Prohibited Transferee.

 

“Prohibited Transferee Lists” has the meaning specified in Section 5(d).

 

“Proposed Spinoff Transactions” means the Spinoffs described in the fourth
paragraph of Item 1. (Business) of IAC’s Annual Report on Form 10-K for the Year
Ended December 31, 2007, filed on February 29, 2008 (or consummation of those
transactions as they may be altered or amended, or abandoned in whole or in
part, by resolution of the Board of Directors of IAC).

 

“Qualified Director” of any Spinco means any member of the Board of Directors of
such Spinco other than a director who (i) is a Liberty Director of such Spinco,
(ii) is an officer or employee of such Spinco or (iii) with respect to any
person becoming a director following the Spinoff Date, was not nominated by the
Nominating and/or Governance Committee of the Board of Directors of such Spinco
in his or her initial election to such Board of Directors and for whose election
any Liberty Party voted shares.  In the event that no person who would otherwise
be a Qualified Director of a Spinco is serving on the Board of Directors of such
Spinco (unless the

 

 

 

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failure to have a Qualified Director is a result of action taken by directors
who are not Qualified Directors), the Spinco’s Board of Directors shall appoint
a new director who qualifies as an Independent Director and such person shall be
considered a Qualified Director for all purposes under this Agreement.  For the
avoidance of doubt, wherever this Agreement requires the approval or consent of,
or other action by, a majority of the Qualified Directors of a Spinco with
respect to any matter, no such approval, consent or other action may be obtained
or taken at any such time as there are no Qualified Directors of such Spinco.

 

 “Qualified Stock Lending Transaction” means any Stock Lending Transaction that
meets the requirements of Section 1058(b) of the Code.

 

“Related Hedging Transactions” means a series of Hedging Transactions between
one or more of the Liberty Parties and their respective Affiliates, on the one
hand, and the same counterparty or its Affiliates, on the other hand, which
Hedging Transactions each have specified maturity or expiration dates occurring
within a period of ninety days.

 

“Related Stock Lending Transactions” means a series of Stock Lending
Transactions between one or more of the Liberty Parties and their respective
Affiliates, on the one hand, and the same counterparty or its Affiliates, on the
other hand, which Stock Lending Transactions each have specified maturity or
expiration dates occurring within a period of ninety days.

 

“Restricted Transferee” has the meaning specified in Section 5(d)(i) hereof.

 

“Rights Offering” means the issuance by a Spinco to existing holders of such
Spinco’s Spinco Common Stock of rights to buy, within a fixed time period, a
proportional number of newly issued shares of such Spinco Common Stock or other
Equity Securities.

 

“Single-Tier Spinoff” means a Spinoff of a Spinco which shall be effected by
means of a pro-rata distribution (whether by means of merger, dividend or
otherwise) of a single class or series of common stock of such Spinco to the
holders of IAC Common Stock such that, immediately following such Spinoff, the
Spinco Common Stock of such Spinco will be the only capital stock of such Spinco
that is outstanding, or that is issuable upon the conversion, exercise,
redemption or exchange of any outstanding securities of such Spinco or that is
subject to issue or sale by such Spinco pursuant to any agreement, arrangement
or understanding in effect at or prior to the applicable Spinoff Date, other
than any shares of preferred stock of such Spinco issued pursuant to the terms
of preferred stock of IAC outstanding on the date hereof.

 

 “Spinco Common Stock” means, with respect to any Spinco, the shares of common
stock of such Spinco authorized at the time of the Spinoff of such Spinco under
such Spinco’s certificate of incorporation.

 

“Spinco” means each of HSN PubCo, Interval PubCo, LT PubCo and TM PubCo.

 

“Spinoff” of any Spinco means the distribution by IAC, effected in a manner
intended to be tax-free generally to the stockholders of IAC for federal income
tax purposes, whether by merger, dividend or otherwise, of all of the
outstanding shares of common stock of such Spinco pursuant to the Proposed
Spinoff Transactions.

 

 

 

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“Spinoff Date” with respect to any Spinco means the date and time of
effectiveness of the Spinoff of such Spinco.

 

“Sponsored Spinoff Transaction” means a Spinoff in connection with which one or
more third party investors (collectively, the “Sponsor”) shall make an
investment, pursuant to an agreement entered into prior to the Spinoff Date of a
Spinco (a “Sponsorship Agreement”), with IAC or the applicable Spinco in the
shares of such Spinco; provided, that to the extent any Sponsor acquires shares
of preferred stock of any Spinco in connection with a Sponsored Spinoff
Transaction, such preferred stock will be convertible into Spinco Common Stock
and, prior to its conversion, will not be entitled to exercise voting power,
when voting with the Spinco Common Stock, which exceeds, on a per share basis,
the voting power attributable to a share of Spinco Common Stock.

 

“Stock Lending Transaction” shall mean a transaction whereby the Liberty Parties
and their Affiliates lend shares of Spinco Common Stock to a third party or
permit a third party to sell, pledge, rehypothecate, assign, invest, use,
commingle or otherwise dispose of, or otherwise use in its business, such shares
of Spinco Common Stock.

 

“Stockholders Agreement” means that certain Amended and Restated Stockholders
Agreement, dated as of August 9, 2005, between Liberty and Barry Diller with
respect to IAC.

 

“Tax-Free” means, with respect to any Spinoff, that it is intended that such
Spinoff (i) qualifies to IAC and the IAC stockholders for non-recognition of
income, gain and loss (except to the extent that cash is received in lieu of
fractional shares) under Sections 355 and/or 361 of the Code, and (ii) does not
result in recognition of income or gain to IAC or any IAC stockholders by reason
of Sections 355(d), (e), (f) or (g) of the Code; provided that, for purposes of
this Agreement, the Spinoff of LT PubCo shall not be treated as Tax-Free.

 

“TM PubCo” means a Delaware corporation, currently a direct or indirect wholly
owned subsidiary of IAC or to be formed in connection with the Proposed Spinoff
Transactions, and which, if TM PubCo is not TM Sub, shall be the direct or
indirect holder of 100% of the outstanding common stock of TM Sub at the time of
the Proposed Spinoff Transaction, and the common stock of which is distributed
(by means of merger, dividend or otherwise) to the holders of IAC Common Stock
to effect the spinoff of IAC’s ticketing business.

 

“TM Sub” means Ticketmaster, a Delaware corporation.

 

“Total Equity Securities” of a Spinco at any time shall mean, subject to the
next sentence, the total number of such Spinco’s outstanding equity securities. 
Any Equity Securities Beneficially Owned by a Person that are not outstanding
Voting Securities but that, upon exercise, conversion or exchange, would become
Voting Securities, shall be deemed to be outstanding for the purpose of
computing Total Equity Securities and the percentage of Equity Securities owned
by such Person but shall not be deemed to be outstanding for the purpose of
computing Total Equity Securities and the percentage of the Equity Securities
owned by any other Person.

 

“Total Voting Power” of any Equity Securities at any time shall mean, subject to
the next sentence, the aggregate number of votes entitled to be cast generally
in the election of directors

 

 

 

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by the holders of such securities.  Any Equity Securities Beneficially Owned by
a Person that are not outstanding Voting Securities but that, upon exercise,
conversion or exchange, would become Voting Securities, shall be deemed to be
outstanding and to have full voting power for the purpose of computing Total
Voting Power of the Equity Securities Beneficially Owned by such Person but
shall not be deemed to be outstanding or have such voting power for the purpose
of computing Total Voting Power of the Equity Securities Beneficially Owned by
any other Person or (except in calculating the Total Voting Power of a Person
who Beneficially Owns Voting Securities that are not outstanding) Total Voting
Power of the Total Equity Securities of a Spinco.

 

“Transfer” by any Person means directly or indirectly, to sell, transfer,
assign, pledge, encumber, hypothecate or similarly dispose of, either
voluntarily or involuntarily, or to enter into any contract, option or other
arrangement or understanding with respect to the sale, transfer, assignment,
pledge, encumbrance, hypothecation or similar disposition of, any Equity
Securities Beneficially Owned by such Person or of any interest (including any
voting interest) in any Equity Securities Beneficially Owned by such Person;
provided, however, that no Transfer of Equity Securities shall be deemed to have
occurred as a result of the entry into, modification of or existence of any
Hedging Transaction pursuant to which (and so long as) Spinco Common Stock
cannot be delivered upon settlement or termination of such Hedging Transaction.
For the avoidance of doubt, a transfer of control of the direct or indirect
Beneficial Owner of Equity Securities of a Spinco is a Transfer of such Equity
Securities for purposes of this Agreement.

 

“Voting Securities” of a Spinco shall mean at any particular time (i) the Spinco
Common Stock of such Spinco, (ii) shares of any other class of capital stock of
such Spinco or a subsidiary thereof then entitled to vote in the election of any
directors of such Spinco generally and (iii) any securities of such Spinco or
any subsidiary thereof then convertible or exchangeable into shares of any class
of capital stock of such Spinco then entitled to vote in the election of any
directors of such Spinco generally; provided, that with respect to clauses
(ii) and (iii), any securities which would become Voting Securities upon the
occurrence or non-occurrence of any event, receipt of any governmental approval
or passage of time will be deemed Voting Securities for purposes of this
Agreement as of the date of original issuance of such securities..

 

2.  Certain Disputed Matters

 

The parties desire to put to rest disputes concerning the validity and
compliance with contractual obligations and law of the Proposed Spinoff
Transactions.  The Liberty Parties have previously asserted claims against IAC
and other parties that the effectuation of spin-off transactions by IAC which
involved the issuance of a single class of shares in the spun-off companies
would be a breach of fiduciary duty by IAC’s directors (including Mr. Diller in
his capacity both as an IAC director and as holder of a proxy with respect to
the IAC shares owned by the Liberty Parties), a violation of IAC’s charter and a
breach of certain contractual obligations contained in the Governance Agreement
and the Stockholders Agreement.  The Liberty Parties now agree that such a
single-tier spin off transaction will not be challenged by them as in breach of
contract, charter or fiduciary duty, or otherwise, in so far as it is
effectuated consistently with this Agreement.  In order to resolve existing
claims and put to rest future disputes, the parties hereto agree as follows:

 

 

 

 

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(a)           The Liberty Parties agree to withdraw, promptly following the
execution of this Agreement, any appeal they have filed from the Order of the
Court entered April 7, 2008, by the Court of Chancery, New Castle County, State
of Delaware, in the actions consolidated under the caption IN RE
IAC/INTERACTIVECORP., C.A. No. 3486-VCL (the “Consolidated Action”).

 

(b)           The Liberty Parties agree, promptly following the execution of
this Agreement, to dismiss without prejudice all pending actions and claims they
have filed against IAC and Diller and members of the IAC Board of Directors in
the Court of Chancery, in and for New Castle County, State of Delaware, and
further agree, promptly following the execution of this Agreement, to take all
necessary steps to cause the Order to Maintain the Status Quo entered
February 14, 2008, by the Court in the Consolidated Action to be vacated.

 

(c)           IAC and Diller agree, promptly following execution of this
Agreement, to dismiss, without prejudice, all pending actions and claims they
have filed against any of the Liberty Parties in the Court of Chancery, in and
for New Castle County, State of Delaware.

 

(d)           From the date hereof, the Liberty Parties, and each of them,
hereby covenants and agrees not to bring suit, assert claims or otherwise
litigate against IAC, Diller or any of IAC’s directors or officers, with respect
to any Spinoff to be effected as part of the Proposed Spinoff Transactions based
upon (i) the development, structuring, negotiation and approval of such Spinoff,
(ii) the fiduciary duties of members of the IAC Board of Directors or officers
of IAC or (iii) the provisions of IAC’s charter and/or any contract to which
Liberty and IAC and/or Diller are parties, in each case as such matters relate
to a Single-Tier Spinoff of such Spinco which are effected on a basis consistent
with requirements specified in this Agreement (a “Qualified Spinoff”); provided,
however, that, (1) with respect to each Spinco, upon the earlier to occur of
(x) the date of any announcement of the terms of the Spinoff of such Spinco
(including any conditions to consummation of such Spinoff), or the date of the
announcement of any revision or change to previously announced terms, which, if
effected on such basis would cause such Spinoff to fail to be a Qualified
Spinoff, and (y) the close of business on the End Date with respect to the
Spinoff of any Spinco which has not been consummated by such time, then the
agreement not to sue as set forth in this paragraph (d) shall be null and void
with respect to such Spinco and to IAC, Diller and IAC’s directors and officers
on and after the date specified in clauses (x) and (y) above, as applicable, and
(2) with respect to any Spinco the Spinoff of which was a Qualified Spinoff,
then the covenant not to sue of the Liberty Parties contained in this paragraph
(d) shall be binding thereafter upon the Liberty Parties with respect to the
actions of IAC, its directors and officers related to such Spinoff occurring
prior to the Spinoff Date of such Spinco.  Nothing herein contained will affect
the Liberty Parties’ right to assert claims and to seek relief against IAC,
Diller and IAC’s directors and officers with respect to any Proposed Spinoff
Transaction which is not a Qualified Spinoff or with respect to any breach of
this Agreement by IAC.

 

3.  Spinco Boards and Other Governance Matters

 

With respect to each Spinco:

 

(A)  (I)  UNTIL THE FALL-AWAY DATE, LIBERTY SHALL HAVE THE RIGHT TO NOMINATE UP
TO SUCH NUMBER OF LIBERTY DIRECTORS AS IS EQUAL TO 20% OF THE TOTAL NUMBER OF
DIRECTORS SERVING

 

 

 

 

 

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ON THE BOARD OF DIRECTORS OF SUCH SPINCO (ROUNDED UP TO THE NEXT WHOLE NUMBER IF
THE TOTAL NUMBER OF DIRECTORS SERVING ON SUCH BOARD OF DIRECTORS IS NOT AN EVEN
MULTIPLE OF 5); PROVIDED THAT TO THE EXTENT LIBERTY IS ENTITLED TO NOMINATE MORE
THAN ONE LIBERTY DIRECTOR OF SUCH SPINCO, EACH ADDITIONAL LIBERTY DIRECTOR (IN
EXCESS OF SUCH FIRST LIBERTY DIRECTOR) MUST QUALIFY AS AN INDEPENDENT DIRECTOR
OF SUCH SPINCO;

 

(II)  PRIOR TO THE SPINOFF DATE OF SUCH SPINCO, IAC SHALL CAUSE EACH SUCH
LIBERTY DIRECTOR TO BE ELECTED TO THE APPLICABLE SPINCO BOARD OF DIRECTORS AND,
FOLLOWING SUCH SPINOFF DATE, SUCH SPINCO SHALL CAUSE EACH SUCH LIBERTY DIRECTOR
TO BE INCLUDED IN THE SLATE OF NOMINEES RECOMMENDED BY THE BOARD OF DIRECTORS OF
SUCH SPINCO TO SUCH SPINCO’S STOCKHOLDERS FOR ELECTION AS DIRECTORS AT EACH
ANNUAL MEETING OF THE STOCKHOLDERS OF SUCH SPINCO AND SHALL USE COMMERCIALLY
REASONABLE EFFORTS TO CAUSE THE ELECTION OF EACH SUCH LIBERTY DIRECTOR,
INCLUDING SOLICITING PROXIES IN FAVOR OF THE ELECTION OF SUCH PERSONS; AND

 

(III)  UNTIL THE FALL-AWAY DATE, IN THE EVENT THAT A VACANCY IS CREATED AT ANY
TIME BY THE DEATH, DISABILITY, RETIREMENT, RESIGNATION OR REMOVAL (WITH OR
WITHOUT CAUSE) OF ANY SUCH LIBERTY DIRECTOR, OR BY ANY INCREASE IN THE NUMBER OF
DIRECTORS CONSTITUTING THE ENTIRE BOARD (SUCH THAT LIBERTY IS ENTITLED TO
ADDITIONAL REPRESENTATION ON SUCH BOARD TO MAINTAIN ITS RIGHT TO HAVE LIBERTY
DIRECTORS CONSTITUTE 20% (ROUNDED UP) OF THE TOTAL NUMBER OF DIRECTORS ON SUCH
BOARD), LIBERTY SHALL, SUBJECT TO THE PROVISO TO CLAUSE (I) OF THIS
SECTION 3(A), HAVE THE RIGHT TO DESIGNATE A REPLACEMENT OR ADDITIONAL LIBERTY
DIRECTOR TO FILL SUCH VACANCY, AND SUCH SPINCO SHALL USE COMMERCIALLY REASONABLE
EFFORTS TO CAUSE SUCH VACANCY TO BE FILLED WITH THE REPLACEMENT OR ADDITIONAL
LIBERTY DIRECTOR SO DESIGNATED; AND

 

                (b)  following the Fall-Away Date with respect to such Spinco,
upon the written request of such Spinco, Liberty shall use its commercially
reasonable efforts to cause any Liberty Director then serving on the Board of
Directors of such Spinco to promptly resign from such Board of Directors;

 

                (c)  only Qualified Directors of a Spinco shall be eligible to
serve on the Nominating and/or Governance Committees of the Board of Directors
of such Spinco (or such other committee of the Board of Directors of such Spinco
as may be charged with recommending persons to serve on the Board of Directors);

 

(d)  until the second anniversary of the Spinoff Date of such Spinco, in
connection with any election of directors by the stockholders of such Spinco
each of the Liberty Parties shall vote, or cause to be voted, all of the Equity
Securities Beneficially Owned by it and which it is entitled to vote in favor of
the election of the full slate of director nominees recommended by the Board of
Directors to the stockholders of such Spinco provided that such slate shall
include the individual(s), if any, nominated pursuant to Section 3(a)(i);
provided, however, that such obligation shall not apply to any Equity Securities
that, at the time of any such stockholder vote, have been lent by a Liberty
Party pursuant to Stock Lending Transaction permitted under Section 5(d)(v) to
the extent the nature of such Stock Lending Transaction renders it commercially
unreasonable for such Liberty Party to obtain an agreement from the counterparty
to so vote the

 

 

 

 

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Equity Securities; 

 

(e)  IAC shall take all action necessary to ensure that, as of the applicable
Spinoff Date, (i) such Spinco shall not have adopted, approved or implemented,
or taken any action to adopt, approve or implement, any Shareholder Rights Plan
(as used herein, as such term is commonly understood in connection with
corporate transactions), (ii) neither the certificate of incorporation nor the
bylaws of such Spinco shall provide for the division of directors into classes
as permitted by Section 141(d) of the Delaware General Corporation Law and
(iii) the certificate of incorporation of such Spinco will provide that the
restrictions contained in Section 203 of the Delaware General Corporation Law
will not apply to such Spinco; and

 

(f)  in the event Liberty’s Ownership Percentage in respect of a Spinco exceeds
the Applicable Percentage in violation of this Agreement, in addition to any
other remedy at equity or law that may be available, no Equity Securities of
such Spinco Beneficially Owned by Liberty in excess of the Applicable Percentage
shall be voted on any matter submitted to stockholders of such Spinco, and such
Spinco shall not recognize any votes purported to be cast in respect of any such
Equity Securities.

 

4.  IAC Matters

 

(a)  Effective on the first date (the “Amendment Trigger Date”) as of which the
Spinoff Date in respect of two or more Single-Tier Spinoffs (the “Triggering
Spinoffs”) shall have occurred, the Governance Agreement shall automatically be
amended by deleting the second sentence of Section 2.02 thereof; provided, that,
in the event IAC shall effect a Spinoff following the Amendment Trigger Date and
prior to the End Date which Spinoff provides for the treatment of
compensation-related matters (including equity based compensation) on a basis
which is materially different than the treatment of such matters in the
Triggering Spinoffs, then so long as Liberty is entitled to nominate any
directors of IAC pursuant to Section 2.01(a) of the Governance Agreement, a
Liberty Director (within the meaning of the Governance Agreement) shall be
permitted to participate in meetings of the Compensation Committee of the Board
of Directors of IAC at which such compensation-related matters are considered as
though such Liberty Director were a member of such committee.

 

(b)  During the pendency of the Proposed Spinoff Transactions, the Liberty
Parties shall not, and shall use reasonable efforts to cause their respective
Affiliates, officers and directors not to, publicly disparage the Proposed
Spinoff Transactions.

 

(c)  Barry Diller hereby acknowledges and agrees to the provisions of Sections
2(c) and 2(d) of this Agreement.

 

5.  Certain Restrictions

 

With respect to each Spinco following the applicable Spinoff Date:

 

                (a)  notwithstanding any other provisions of this Agreement to
the contrary, no Liberty Party shall, and Liberty shall cause its Affiliates not
to, directly or indirectly, acquire (other than in an acquisition from such
Spinco made pursuant to a Rights Offering or an offer that was made generally
available to holders of Equity Securities of such Spinco as a result of their
ownership

 

 

 

 

 

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of Equity Securities of such Spinco) by means of a purchase, tender or exchange
offer, business combination or in any other manner, Beneficial Ownership of any
Equity Securities of such Spinco, including rights or options to acquire such
ownership, unless (i) after giving effect to such acquisition, Liberty’s
Ownership Percentage with respect to such Spinco would not exceed the Applicable
Percentage, provided that, if the Spinoff of such Spinco was a Tax-Free Spinoff,
(x) the number of all Equity Securities the Beneficial Ownership of which was
acquired during the 24 months following the Spinoff of such Spinco (other than
Equity Securities the Beneficial Ownership of which was acquired in an
acquisition from such Spinco during such 24-month period pursuant to a Rights
Offering or an offer that was made generally available to holders of Equity
Securities of such Spinco as a result of their ownership of Equity Securities of
such Spinco) shall not exceed the Equity Securities Basket for such Spinco, and
that no acquisition of Beneficial Ownership of Equity Securities of such Spinco
shall occur during such 24 months in the event any Liberty Party Transfers
Beneficial Ownership of any Equity Securities of such Spinco pursuant to
Section 5(e) prior to such acquisition, (ii) pursuant to a Qualified Acquisition
or (iii) permitted pursuant to Section 6 hereof.  Notwithstanding anything to
the contrary contained herein, no acquisition of Beneficial Ownership of Equity
Securities by Liberty which results solely from Liberty holding Equity
Securities at a time when Spinco effects any subdivision, split, reverse split,
stock dividend, combination, reclassification or similar event with respect to
such Spinco’s Spinco Common Stock shall be deemed to be an acquisition of
Beneficial Ownership of Equity Securities for purposes of this Section 5(a);
provided that such Equity Securities actually acquired shall be included in the
calculation of Liberty’s Ownership Percentage (after giving effect to the 
Equity Securities actually issued to all holders of Equity Securities of such
Spinco upon expiration of any exercise period, if applicable).  The term
“Qualified Acquisition” means the acquisition of Beneficial Ownership of Equity
Securities of such Spinco in a transaction that has been approved in advance by
a majority of the Qualified Directors of such Spinco; and

 

(b) until the second anniversary of the Spinoff Date of such Spinco, unless a
majority of the Qualified Directors of such Spinco shall otherwise specifically
request in writing in advance or to the extent permitted pursuant to Sections
5(a), 5(c) and 6, neither any Liberty Party nor any of their respective
officers, directors or employees shall, and Liberty shall cause its Affiliates
not to (and no Liberty Party nor any of its officers, directors or employees
shall, and Liberty shall cause its Affiliates not to, assist or form, join or in
any way participate in a group within the meaning of Section 13(d)(3) of the
Exchange Act, act in concert or participate with or encourage other persons to):

 

(i)  directly or indirectly, offer to acquire, seek, propose or agree to
acquire, by means of a purchase, tender or exchange offer, merger or other
business combination or in any other manner, Beneficial Ownership of any Equity
Securities of such Spinco, including rights or options to acquire such
ownership;

 

(ii)      directly or indirectly, initiate or propose any stockholder proposal
or seek or propose to influence, advise, change or control the management, Board
of Directors, governing instruments or policies or affairs of such Spinco,
including by means of a solicitation of proxies (as such terms are defined in
Rule 14a-1 of Regulation 14A promulgated pursuant to Section 14 of the Exchange
Act, disregarding clause (iv) of

 

 

 

 

 

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Rule 14a-1(l)(2) and including any otherwise exempt solicitation pursuant to
Rule 14a-2(b)), participating in any election contest, contacting any person
relating to any of the matters set forth in this Section 5(b) or seeking to
influence, advise or direct the vote of any holder of securities of such Spinco;
provided that this subsection shall not be deemed to restrict (x) the Liberty
Directors of any Spinco from participating as members of the Board of Directors
of such Spinco in their capacity as such or (y) any Liberty Party from opposing
publicly or privately, voting against and encouraging others to vote against any
proposal of a third party regarding a merger or other business combination, or
opposing publicly or privately any tender or exchange offer, regardless of
whether such proposal or offer is supported by the Board of Directors of such
Spinco;

 

(iii)     directly or indirectly, offer, seek or propose, collaborate on or
encourage any merger, consolidation, business combination, recapitalization,
restructuring or other extraordinary transaction with respect to such Spinco or
any Affiliate thereof or any of their respective businesses;

 

(iv)     directly or indirectly, deposit any Equity Securities of such Spinco in
a voting trust or subject any such Equity Securities to any proxy, arrangement
or agreement with respect to the voting of such securities or other agreement
having similar effect, other than, if such deposit of Equity Securities is
customary in the market for such transactions at such time, as reasonably
necessary to engage in any Hedging Transactions or any Stock Lending
Transactions permitted by this Agreement;

 

(v)      directly or indirectly, make a request to amend or waive Section 5(a),
this clause 5(b)(v) or any other provision of this Section 5(b) or Section 6;

 

(vi)     directly or indirectly, make any public disclosure, or take any action
which could reasonably be expected to require such Spinco to make any public
disclosure, with respect to any of the matters set forth in this Section 5(b);
or

 

(vii) directly or indirectly, enter into any discussions, negotiations,
arrangements or understandings with any third party with respect to any of the
foregoing.

 

(c)  Nothing in Section 5(a) (other than the proviso to clause (i) thereof, if
applicable) or 5(b) shall prohibit any Liberty Party or its Affiliates from
acquiring any securities of any Spinco if after giving effect to such
acquisition, Liberty’s Ownership Percentage with respect to such Spinco would
not exceed the Applicable Percentage.  In addition, prior to a Permitted
Restricted Transfer by the Liberty Parties or a Transfer pursuant to
Section 5(d)(i)(7)(ii), such Spinco will not adopt (i) a Shareholder Rights Plan
or (ii) any charter or bylaw provision, in the case of each of clause (i) and
clause (ii), that would materially adversely affect the Liberty Parties’ ability
in accordance with the terms hereof to acquire Equity Securities up to the
Applicable Percentage or which otherwise would impose material economic burdens
on the Liberty Parties’ ability to do so (an “Anti-Takeover Provision”).  To the
extent that any Spinco or a subsidiary thereof effects a Rights Offering or an
offer that was made generally available to holders of Equity Securities of such
Spinco as a result of their ownership of Equity Securities of such Spinco, the
Liberty Parties will be entitled to exercise in full all rights issued or
distributed to them or exchange in full;

 

 

 

 

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provided, that to the extent such exercise results in the Liberty Parties’
Beneficial Ownership of Equity Securities of such Spinco exceeding the
Applicable Percentage, it will not constitute a breach of this Agreement
provided that the Liberty Parties will not be entitled to vote any such Equity
Securities representing voting power in excess of the Applicable Percentage
until such time as the Liberty’s Ownership Percentage does not exceed the
Applicable Percentage.

 

(d)  (i)  With respect to each Spinco, from and following the Spinoff Date of
such Spinco, no Liberty Party shall, and each Liberty Party shall cause its
Affiliates not to, without the prior written consent of a majority of the
Qualified Directors of such Spinco, Transfer any Equity Securities of such
Spinco to any Person except for:

 

(1)  Transfers to such Spinco or a subsidiary of such Spinco or Transfers of any
rights received in a Rights Offering;

 

(2)  (i) at such times as Rule 144 under the Securities Act of 1933, as amended
(“Rule 144”), is applicable, Transfers pursuant to Rule 144 or, (ii) at such
times as Rule 144 is not applicable, Transfers pursuant to “brokers
transactions” within the meaning of Rule 144; provided, that if the Spinoff of
such Spinco was a Tax-Free Spinoff, no such Transfer may be made prior to the
second anniversary of the Spinoff Date of such Spinco;

 

(3)  Transfers (x) to Liberty, (y) between or among the Liberty Parties or
(z) to an Affiliate of Liberty that agrees in writing in accordance with
Section 9(c) hereof to be bound by the terms of this Agreement; provided, that,
if the Spinoff of such Spinco was a Tax-Free Spinoff, prior to the second
anniversary of the Spinoff Date of such Spinco, a Transfer to a Prohibited
Transferee will be prohibited unless each of IAC and such Spinco has consented
in writing to such Transfer, which consent will be delivered if each of IAC and
such Spinco, acting in good faith, determine that (A) any of the “Safe Harbors”
set forth in Treas. Reg. § 1.355-7(d) applies to such Transfer or (B) there was
no “agreement, understanding, arrangement or substantial negotiations” with such
Prohibited Transferee regarding the Transfer or any “similar acquisition” (as
such terms are defined in Treas. Reg. § 1.355-7(h)) during the two-year period
ending on the date of the Spinoff;

 

(4)  Transfers (i) pursuant to a third party tender or exchange offer for such
Equity Securities or (ii) in connection with any merger or other business
combination involving such Spinco and a third party, which merger or business
combination has been approved by such Spinco;

 

(5)  in a public offering in a manner designed to result in a wide distribution
(other than a Transfer described in subsection (d)(i)(7), which shall be
governed by the terms of such subsection (d)(i)(7) and not this subsection
(d)(i)(5)); provided, that no Transfer under this clause (5) is made, to the
knowledge of the Liberty Parties, to any Person whose Ownership Percentage in
respect of such Spinco, giving effect to such Transfer, would exceed 15%; and
provided, further

 

 

 

 

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that if the Spinoff of such Spinco was a Tax-Free Spinoff, no such Transfer may
be made prior to the second anniversary of the Spinoff Date of such Spinco;

 

(6)  a Transfer, in a single transaction (other than a Transfer described in
subsection (d)(i)(7), which shall be governed by the terms of such subsection
(d)(i)(7) and not this subsection (d)(i)(6)), of all the Equity Securities of
such Spinco Beneficially Owned at such time by the Liberty Parties and their
Affiliates (or by any Person who previously acquired Equity Securities from any
Liberty Party or any Affiliates thereof or another Restricted Transferee in a
Permitted Restricted Transfer) to a Person (a “Restricted Transferee”) (A) whose
Ownership Percentage with respect to such Spinco, after giving effect to such
Transfer, would not exceed the Applicable Percentage and (B) that, prior to such
Transfer, shall have (along with the applicable Transferring Persons) executed
and delivered to such Spinco an agreement (a “New Holder Assignment and
Assumption Agreement”) in the form of Exhibit 1 hereto (a “Permitted Restricted
Transfer”); provided, that, if the Spinoff of such Spinco was a Tax-Free
Spinoff, prior to the second anniversary of the Spinoff Date of such Spinco, a
Transfer to a Prohibited Transferee will be prohibited unless each of IAC and
such Spinco has consented in writing to such Transfer, which consent will be
delivered if each of IAC and such Spinco, acting in good faith, determine that
(A) any of the “Safe Harbors” set forth in Treas. Reg. § 1.355-7(d) applies to
such Transfer or (B) there was no “agreement, understanding, arrangement or
substantial negotiations” with such Prohibited Transferee regarding the Transfer
or any “similar acquisition” (as such terms are defined in Treas. Reg. §
1.355-7(h)) during the two-year period ending on the date of the Spinoff. The
Spinco and the applicable Transferring Persons shall (and with respect to any
otherwise Permitted Restricted Transfer prior to the second anniversary of the
applicable Spinoff Date IAC shall) also execute such New Holder Assignment and
Assumption Agreement; and

 

(7) a Transfer of the Equity Securities Beneficially Owned by Liberty or any
Liberty Party solely as a result of (i) a change in the Beneficial Ownership of
Liberty or, if Liberty is not a Parent Company or is not the Parent Company of
such Liberty Party, any Parent Company of Liberty or any Liberty Party, or
(ii) a Distribution Transaction involving such Person (the Person the equity
interests of which are being distributed in the Distribution Transaction is
referred to as the “Distributed Company”) in which all of the Equity Securities
of such Spinco Beneficially Owned by the Distributed Company or its Affiliates
are so Transferred; provided, however, that, in the case of clause (ii), such
Distributed Company shall (along with the applicable Transferring Persons)
execute and deliver to such Spinco a New Holder Assignment and Assumption
Agreement in the form of Exhibit 1.  The Spinco and the applicable Transferring
Persons shall (and with respect to any such Transfer prior to the second
anniversary of the applicable Spinoff Date IAC shall) also execute the New
Holder Assignment and Assumption Agreement delivered by the Distributed Company
under this subsection (d)(i)(7).  (It is acknowledged and agreed that nothing
contained elsewhere in this Section 5(d) shall restrict any Transfer permitted
by this clause (7));

 

 

 

 

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(ii)  at least one Business Day prior to any proposed Transfer or series of
related Transfers by any Liberty Party to any Person (other than to Liberty or
an Affiliate thereof that agrees in writing in accordance with
Section 9(c) hereof to be bound by the terms of this Agreement and other than
Transfers pursuant to clauses (1), (2), (4), (5) or (7) of
Section 5(d) (i) above) of Equity Securities of a Spinco representing a 10% or
greater Ownership Percentage with respect to such Spinco, Liberty shall, or
shall cause such Liberty Party to, provide written notice to such Spinco of the
proposed Transfer, including a general description of the proposed Transfer (but
which need not include the identity of the counterparty);

 

(iii) [Intentionally Omitted]

 

(iv)  the Board of Directors of the applicable Spinco shall, as promptly as
reasonably practical following receipt of a written request therefor from
Liberty, exempt (i) the Restricted Transferee in any Permitted Restricted
Transfer or (ii) the Distributed Company in any Transfer under
Section 5(d)(i)(7)(ii) from the operation of any Shareholder Rights Plan or
other Anti-Takeover Provision then in effect with respect to such Spinco, such
that an acquisition by it of Equity Securities up to its Applicable Percentage
would not materially adversely affect such Restricted Transferee or Distributed
Company, as the case may be, under the terms of any Shareholder Rights Plan or
other Anti-Takeover Provision then in effect or which otherwise would impose
material economic burdens on such Restricted Transferee’s or Distributed
Company’s ability to do so; and

 

(v)  notwithstanding anything to the contrary set forth in Section 5(b) or
Section 5(d) , Section 5(d) shall not prohibit any Transfer to the extent
relating to the entry into, maintenance of, performance of obligations under, or
early termination and unwinding of Hedging Transactions or Stock Lending
Transactions effected by the Liberty Parties or their Affiliates, including the
Transfer of Equity Securities in connection therewith through the delivery of
Equity Securities to a third party in connection with the settlement or
satisfaction of a Hedging Transaction or the foreclosure and sale by a secured
party of any Equity Securities pledged to secure the obligations of a party
under a Hedging Transaction or in respect of any extension of credit to a party
based, in whole or part, on the value of such Hedging Transaction; provided that
Liberty shall not, and shall cause its Affiliates not to, engage in any Stock
Lending Transaction, Hedging Transaction, or any pledge of Equity Securities not
otherwise within the definition of “Hedging Transaction” (v) unless the amount
of Equity Securities of a Spinco subject to a Hedging Transaction or Related
Hedging Transactions, any Stock Lending Transaction or Related Stock Lending
Transactions, or any other pledge transaction involving any Liberty Party or
Affiliate thereof, constitutes 10% or less of the Total Equity Securities of
such Spinco (determined as of the date of the Hedging Transaction, Stock Lending
Transaction or other pledge transaction or the date of the initial Hedging
Transaction or Stock Lending Transaction in any series of Related Hedging
Transactions or series of Related Stock Lending Transactions), (w) unless the
counterparty to such transaction is a financial institution in the business of
engaging in such transactions and Liberty does not know or have reason to know
that such counterparty is engaging in such transaction for the purpose of
acquiring Equity

 

 

 

 

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Securities or voting rights with respect thereto for its own account or with an
intent to transfer such securities or such rights to any particular Person or
group, (x) unless the total number of Equity Securities of such Spinco
underlying Hedging Transactions and Stock Lending Transactions, and other pledge
transactions involving any Liberty Party or an Affiliate thereof, entered into
during the prior 90 days, together with the Equity Securities underlying such
Hedging Transaction, Stock Lending Transaction or other pledge transaction, do
not exceed 10% of the Total Equity Securities of such Spinco, (y) unless it is
entered into at least 30 days following the Spinoff Date of the relevant
Spinoff, and (z) if the Spinoff of such Spinco was a Tax-Free Spinoff, prior to
the second anniversary of the Spinoff Date of such Spinco, unless (A) any such
Stock Lending Transaction is a Qualified Stock Lending Transaction, (B) none of
the direct counterparties, or to the knowledge of the Liberty Parties any
indirect counterparty, to such Hedging Transaction, Stock Lending Transaction or
other pledge transaction is a Prohibited Transferee or (C) if the direct
counterparty, or to the knowledge of any Liberty Party any indirect
counterparty, of such Hedging Transaction, Stock Lending Transaction or other
pledge transaction is a Prohibited Transferee, each of IAC and such Spinco shall
have consented in writing to such Hedging Transaction, Stock Lending Transaction
or other pledge transaction, which consent will be delivered if each of IAC and
such Spinco, acting in good faith, determine that (A) any of the “Safe Harbors”
set forth in Treas. Reg. § 1.355-7(d) applies to such Hedging Transaction, Stock
Lending Transaction or other pledge transaction or (B) there was no “agreement,
understanding, arrangement or substantial negotiations” with such Prohibited
Transferee regarding such Hedging Transaction, Stock Lending Transaction or
other pledge transaction or “similar acquisition” (as such terms are defined in
Treas. Reg. § 1.355-7(h)) during the two-year period ending on the date of the
Spinoff;

 

(vi)  Attached hereto as Exhibit 2, is an accurate and complete list with
respect to each Spinco (other than LT PubCo) of all Persons with whom IAC, such
Spinco, their Affiliates, or any of their respective officers, directors or
other authorized agents or representatives have entered into any “agreement,
understanding, or arrangement” or “discussions” (as such terms are defined in
Treas. Reg. § 1.355-7(h)) with respect to any acquisition of Equity Securities
(or substantial assets) of such Spinco or shares of IAC during the two-year
period ending on the date hereof (the “Initial IAC Lists”).  Attached hereto as
Exhibit 3, is an accurate and complete list with respect to each Spinco (other
than LT PubCo) of all Persons with whom Liberty, its Affiliates, or any of their
respective officers, directors or other authorized agents or representatives
have entered into any “agreement, understanding, or arrangement” or
“discussions” (as such terms are defined in Treas. Reg. § 1.355-7(h)) with
respect to any acquisition of Equity Securities (or substantial assets) of such
Spinco or shares of IAC during the two-year period ending on the date hereof
(the “Initial Liberty Lists”).  The Initial IAC List for any Spinco shall be
updated as of, but not following, the Spinoff Date of such Spinco to add any
additional Persons with whom IAC, such Spinco, their Affiliates, or any of their
respective officers, directors or other authorized agents or representatives
have entered into any “agreement, understanding, or arrangement” or
“discussions” (as such terms are defined in Treas. Reg. § 1.355-7(h)) with
respect to any acquisition of Equity Securities (or substantial assets) of such
Spinco or shares of IAC during the period beginning on the date hereof and
ending on the Spinoff Date for such Spinco, and to

 

 

 

 

18

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delete any Persons that are included on the Initial IAC List with respect to
whom any such “agreement, understanding, or arrangement” or “discussions” (as
such terms are defined in Treas. Reg. § 1.355-7(h)) did not occur during the
two-year period ending on the Spinoff Date.  The Initial Liberty List for any
Spinco shall be updated as of, but not following, the Spinoff Date of such
Spinco to add any additional Persons with whom Liberty, its Affiliates, or any
of their respective officers, directors or other authorized agents or
representatives have entered into any “agreement, understanding or arrangement”
or “discussions” (as such terms are defined in Treas. Reg. § 1.355-7(h)) with
respect to any acquisition of Equity Securities (or substantial assets) of such
Spinco or shares of IAC during the period beginning on the date hereof and
ending on the Spinoff Date for such Spinco, and to delete any Persons that are
included on the Initial Liberty List with respect to whom any such “agreement,
understanding, or arrangement” or “discussions” (as such terms are defined in
Treas. Reg. § 1.355-7(h)) did not occur during the two-year period ending on the
Spinoff Date.  The Initial IAC Lists and Initial Liberty Lists, as so amended,
shall be referred to as the “Prohibited Transferee Lists”).  The Initial IAC
Lists, Initial Liberty Lists and any amendments thereto will be prepared
reasonably and in good faith by each of IAC and Liberty, respectively, based
upon the provisions of Treas. Reg. §1.355-7(h).

 

 (e)  Notwithstanding anything to the contrary contained in Section 5(d)(i) or
5(d)(v), any Transfer of Equity Securities of a Spinco that would be permitted
following the 24-month anniversary of the Spinoff of such Spinco but not during
such 24-month period shall be permitted during such 24-month period so long as
(i) the number of all Equity Securities of such Spinco that are Transferred
pursuant to this Section 5(e) by all Liberty Parties or their Affiliates during
such 24-month period do not exceed the Equity Securities Basket for such Spinco,
and (ii) that no such Transfer shall occur following any acquisition of
Beneficial Ownership of Equity Securities of such Spinco under
Section 5(a) hereof by any Liberty Party or any Affiliate thereof during such
period; provided, however, that the acquisition of Beneficial Ownership of any
Equity Securities pursuant to a Rights Offering or an offer that was made
generally available to holders of Equity Securities of such Spinco as a result
of their ownership of Equity Securities of such Spinco shall not be deemed to be
an acquisition of Beneficial Ownership of any Equity Securities under
Section 5(a) for purposes of this Section 5(e).

 

(f)  With respect to each Spinco, any transaction involving Liberty or any of
its Affiliates that would be required by Item 7(b) of Schedule 14A under the
Exchange Act, insofar as Item 7(b) calls for information required by Section 404
of Regulation S-K under the Exchange Act, to be disclosed by such Spinco in a
proxy statement furnished to such Spinco’s stockholders in connection with a
meeting at which directors are to be elected, shall require the approval of a
majority of the Qualified Directors of such Spinco.

 

6.  Certain Offers

 

With respect to each Spinco, until the Fall-Away Date:

 

(a) (i) in the event the Board of Directors of a Spinco determines to pursue a
Covered Transaction with respect to such Spinco on a negotiated basis and in
connection therewith (x) conducts or publicly announces an intention to conduct
an “auction” or

 

 

 

 

19

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similar process with respect thereto, Liberty shall be invited to participate in
such process on a comparable basis with other potential bidders or (y) if no
such process shall be conducted, (A) promptly following the first date on which
a draft agreement that, upon execution, would bind (subject to conditions) the
Spinco to enter into a Covered Transaction is provided by or on behalf of such
Spinco to the counterparty or written comments on such counterparty’s draft
definitive transaction agreement are provided by or on behalf of such Spinco to
such counterparty (but in no event less than 5 Business Days prior to the Board
of Directors of a Spinco authorizing such Spinco to enter into an agreement
providing for a Taxable Covered Transaction or less than 72 hours prior to the
Board of Directors of a Spinco authorizing such Spinco to enter into an
agreement providing for a Covered Transaction that is not a Taxable Covered
Transaction), such Spinco shall give notice to Liberty of the possibility of the
pending Covered Transaction, which notice shall include a general description of
the Covered Transaction (but which need not include the identity of the
counterparty) and shall indicate whether the Spinco expects the Covered
Transaction will be a Taxable Covered Transaction (the “Tax Status”), and (B) so
long as the Spinco is pursuing such Covered Transaction, such Spinco shall
advise Liberty in the event it becomes substantially likely that such Covered
Transaction, if previously characterized as not being a Taxable Covered
Transaction, now will be a Taxable Covered Transaction, or upon a material
change in the nature of the Covered Transaction as described in the notice
previously provided;

 

(ii)  in the case of a potential Covered Transaction as to which clause
(a)(i) of this Section 6 applies, (x) Liberty shall, and Liberty shall cause its
Affiliates to, keep confidential the fact of its or their receipt of any
invitation to participate or other notice in respect of such potential Covered
Transaction and the contents of any such invitation or notice (subject to
customary exceptions, including disclosure to representatives who acknowledge
such confidentiality obligation) and (y) promptly following receipt of any such
invitation or notice, but in any event within five Business Days of such
receipt, Liberty shall inform the applicable Spinco whether Liberty intends to
in good faith participate in the auction or similar process (in the case of
subclause (a)(i)(x) of this Section 6) or in good faith pursue the Covered
Transaction (in the case of subclause (a)(i)(y) of this Section 6).  If Liberty
shall so inform the Spinco of its good faith intention to participate in the
process or to pursue the transaction, it shall actively so participate or
pursue, and shall promptly provide notice to the applicable Spinco in the event
its intention changes.  In the event Liberty provides notice to the Spinco that
it does not intend to participate in the process or pursue the Covered
Transaction (whether such notice is given initially or following a prior
indication of interest), or if Liberty ceases to actively so participate or
pursue, then such Spinco shall be relieved of any further obligation under this
Section 6(a) with respect to such Covered Transaction; provided, that if
thereafter the expected Tax Status of the Covered Transaction changes from not
being a Taxable Covered Transaction to being a Taxable Covered Transaction, or
upon a material change in the nature of the Covered Transaction as described in
the notice previously provided, the Spinco will promptly notify Liberty of such
changed status or nature and Liberty shall again be permitted to inform the
Spinco of its good faith intention to participate in the

 

 

 

 

 

20

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process or pursue the transaction, all in accordance with the provisions of this
Section 6; and

 

(iii)  in connection with any potential Covered Transaction as to which clause
(a)(i)(y) of this Section 6 applies, (x) if so requested by Liberty, the
applicable Spinco will furnish Liberty with information regarding such Spinco
reasonably comparable to the information provided to the prospective
counterparty to such Covered Transaction provided that Liberty shall have
executed and delivered to such Spinco a nondisclosure (or similar) agreement
substantially equivalent to any nondisclosure (or similar) agreement entered
into with such prospective counterparty (other than any “standstill” obligations
therein on the part of such prospective counterparty and provided that such
confidentiality agreement will contain customary exceptions to such obligations)
and (y) the Board of Directors of such Spinco shall consider any offer for a
Covered Transaction made in good faith by Liberty but shall have no obligation
hereunder to accept any such offer or to enter into negotiations with Liberty;

 

 (b)          in the event a third party shall commence (within the meaning of
Rule 14d-2 under the Exchange Act) an offer for a Covered Transaction described
in clause (i) of the definition thereof which offer is not made pursuant to an
agreement with such Spinco (the “Triggering Offer”), and within 10 Business Days
following the commencement of such Triggering Offer the Board of Directors of
such Spinco shall have failed to take action reasonably calculated to prevent
such third party from acquiring Beneficial Ownership of Equity Securities of
such Spinco to the extent such acquisition would result in such third party’s
Ownership Percentage with respect to such Spinco exceeding the Applicable
Percentage (whether through the adoption of a Shareholder Rights Plan, pursuit
of litigation or otherwise) (“Blocking Action”), the Liberty Parties shall be
relieved of their obligations (x) under Section 5(b) of this Agreement to the
extent reasonably necessary to permit Liberty to commence a Competing Offer and
(y) for so long as the third party has not withdrawn or abandoned its offer or
Liberty receives a notice from the Spinco pursuant to
Section 6(a)(i)(y) regarding a Covered Transaction with such third party, shall
be relieved of their obligations under Section 5(a) to the extent necessary to
permit Liberty to consummate such Competing Offer.  Notwithstanding the
foregoing, this paragraph (b) shall not relieve any Liberty Party of its
obligations in the event that a majority of the Qualified Directors of such
Spinco have supported the taking of Blocking Action and, notwithstanding such
support, the Spinco Board of Directors fails to take Blocking Action;

 

(c)  in the event Liberty shall consummate a Competing Offer for a Spinco in the
circumstances permitted by Section 6(b) and otherwise in compliance with the
terms of this Agreement, and as a result of which consummation Liberty’s
Ownership Percentage in respect of such Spinco shall exceed 50%, any consent or
approval requirements of the Qualified Directors set forth in this Agreement
will be deemed terminated and will cease to be of any further force and effect,
and, following the later of the second anniversary of the Spinoff Date of such
Spinco and the date Liberty’s Ownership Percentage exceeds 50%, the provisions
of Section 5(a) of this Agreement with respect to such Spinco will be deemed
terminated and will cease to be of any further force and effect; and

 

 

 

 

21

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(d)  in the event a third party shall publicly disclose that its Ownership
Percentage with respect to a Spinco exceeds 20% and within 10 Business Days
following such public announcement the Board of Directors of such Spinco shall
have failed to take Blocking Action, the Liberty Parties shall be relieved of
their obligations under Sections 5(a) and 5(b) of this Agreement to the extent
reasonably necessary to permit Liberty to commence and consummate an offer to
acquire all of the outstanding Equity Securities of such Spinco. 
Notwithstanding the foregoing, this paragraph (d) shall not relieve any Liberty
Party of its obligations in the event that a majority of the Qualified Directors
of such Spinco have supported the taking of Blocking Action and, notwithstanding
such support, the Spinco Board of Directors fails to take Blocking Action.

 

(e)  For purposes of this Section 6, the terms below shall have the following
meanings:

 

“Taxable Covered Transaction” means the acquisition of the Spinco by a third
party in a Covered Transaction that is generally taxable to the stockholders of
such Spinco for federal income tax purposes.

 

“Competing Offer” means a tender or exchange offer for any and all Equity
Securities of such Spinco or a merger proposal to acquire all of the outstanding
Equity Securities of such Spinco not owned by the Liberty Parties; provided,
that, if the Triggering Offer is for less than any and all such Equity
Securities, the Competing Offer may instead be for such Equity Securities of
such Spinco as would, upon consummation of the Competing Offer, result in
Liberty’s Ownership Percentage in respect of such Spinco equaling what the third
party offeror’s Ownership Percentage in respect of such Spinco would be upon
consummation of the Triggering Offer assuming all shares sought in the
Triggering Offer were tendered and accepted.

 

7.  Spinco Registration Rights

 

With respect to each Spinco the Spinoff of which is effected in the form of a
Single-Tier Spinoff on or prior to the End Date, IAC shall cause such Spinco to
execute and deliver to Liberty, and Liberty shall execute and deliver to such
Spinco, effective as of the Spinoff Date of such Spinco, a Registration Rights
Agreement in the form attached as Exhibit 4 hereto.

 

8.  Certain Efforts

 

                With respect to each of HSN PubCo, Interval PubCo and TM PubCo,
in the event the Spinoff of such Spinco is effected in the form of a Single-Tier
Spinoff on or prior to the End Date, IAC shall use commercially reasonable
efforts, subject in each case to the availability of debt financing on terms
reasonably satisfactory to IAC under then current market conditions, to cause
the respective debt levels of such Spincos immediately following the Spinoff to
be a minimum of $400 million, $280 million and $580 million.

 

9.  Third Party Beneficiaries; Standalone Agreements; Assignment

 

(a)  Nothing in this Agreement, whether express or implied, shall be construed
to give any Person, other than the parties hereto, any legal or equitable right,
remedy or claim under or in respect of this Agreement.

 

 

 

22

--------------------------------------------------------------------------------

 

 

(b)  In connection with each Spinoff which is effected in the form of a
Single-Tier Spinoff on or prior to the End Date, IAC and the Liberty Parties
shall, and IAC shall cause the applicable Spinco to, execute and deliver an
agreement (a “Spinco Assignment and Assumption Agreement”) in the form attached
as Exhibit 5 hereto.  No Spinco shall have any obligations or liabilities under
this Agreement or under the aforementioned agreements with respect to any other
Spinco.  Nothing in this Section 9(b) shall release IAC from liability for any
breach of this Agreement with respect to any Spinco occurring on or before the
Spinoff Date of such Spinco.  The Spinco Assignment and Assumption Agreement
shall set forth the address and facsimile for notices to such Spinco for
purposes of Section 10(a).

 

(c) If any Liberty Party shall transfer or otherwise dispose of any Equity
Securities of any Spinco to any Affiliate of such Liberty Party, such transferee
and the Transferring Liberty Party shall execute and deliver to such Spinco an
agreement (an “Affiliate Assignment and Assumption Agreement”) in the form of
Exhibit 6. The Spinco shall (and with respect to any such Transfer prior to the
second anniversary of the applicable Spinoff Date otherwise permitted by this
Agreement IAC shall) also execute such Affiliate Assignment and Assumption
Agreement.

 

(d) Except pursuant to any Assignment and Assumption Agreement, neither this
Agreement nor any rights or obligations under this Agreement shall be assigned,
in whole or in part, by any party without the prior written consent (i) of
Liberty, in the case of an assignment by IAC (or from and after each Spinoff,
the applicable Spinco) or (ii) of IAC (or from and after each Spinoff, the
applicable Spinco provided in such case such consent shall be approved by a
majority of the Qualified Directors of such Spinco) in the case of an assignment
by any Liberty Party of its rights and obligations in respect of IAC (or such
Spinco).  Subject to the foregoing, the provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns.

 

10.  General Provisions

 

(A)  NOTICES.  ALL NOTICES, REQUESTS AND OTHER COMMUNICATIONS TO ANY PARTY
HEREUNDER SHALL BE IN WRITING (INCLUDING TELECOPY) AND SHALL BE GIVEN, IF TO ANY
LIBERTY PARTY, TO:

 

Liberty Media Corporation
12300 Liberty Boulevard
Englewood, Colorado 80112
Attention:                 General Counsel
Facsimile:                    (720) 875-5382

 

 

 

23

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with a copy to:

 

Baker Botts L.L.P.
30 Rockefeller Plaza
44th Floor
New York, New York 10112
Attention:                 Frederick H. McGrath
Facsimile:                    (212) 408-2501

 

 

if to IAC, to:

 

IAC/InterActiveCorp
555 West 18th Street
New York, New York 10011
Attention:                 General Counsel
Facsimile:                    (212) 632-9642

 

with a copy to:

 

Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, New York 10019
Attention:                 Pamela S. Seymon
Facsimile:                    (212) 403-2000

 

if to a Spinco to such address or facsimile number as such Spinco shall provide
to Liberty in connection with assignment contemplated by Section 9(b) hereof,

 

or such address or facsimile number as such party may hereafter specify for the
purpose by notice to the other parties hereto.  Each such notice, request or
other communication shall be effective when delivered personally, telegraphed,
or telecopied, or, if mailed, five business days after the date of the mailing.

 

(B)  AMENDMENTS; NO WAIVERS.  ANY PROVISION OF THIS AGREEMENT MAY BE AMENDED OR
WAIVED IF, AND ONLY IF, SUCH AMENDMENT OR WAIVER IS IN WRITING AND SIGNED, IN
THE CASE OF AN AMENDMENT, BY THE PARTY WHOSE RIGHTS OR OBLIGATIONS HEREUNDER ARE
AFFECTED BY SUCH AMENDMENT, OR IN THE CASE OF A WAIVER, BY THE PARTY OR PARTIES
AGAINST WHOM THE WAIVER IS TO BE EFFECTIVE.  ANY AMENDMENT OR WAIVER (I) BY IAC
SHALL REQUIRE THE APPROVAL OF A MAJORITY OF THE BOARD OF DIRECTORS OF IAC
(EXCLUDING FOR THIS PURPOSE ANY LIBERTY DIRECTOR WITHIN THE MEANING OF THE
GOVERNANCE AGREEMENT) OR (II) BY A SPINCO SHALL REQUIRE THE APPROVAL OF A
MAJORITY OF THE QUALIFIED DIRECTORS OF SUCH SPINCO.

 

NO FAILURE OR DELAY BY ANY PARTY IN EXERCISING ANY RIGHT, POWER OR PRIVILEGE
HEREUNDER SHALL OPERATE AS A WAIVER THEREOF NOR SHALL ANY SINGLE OR PARTIAL
EXERCISE THEREOF PRECLUDE ANY OTHER OR FURTHER EXERCISE THEREOF OR THE EXERCISE
OF ANY OTHER RIGHT, POWER OR PRIVILEGE.  THE RIGHTS AND REMEDIES HEREIN PROVIDED
SHALL BE CUMULATIVE AND NOT EXCLUSIVE OF ANY RIGHTS OR REMEDIES PROVIDED BY LAW.

 

 

 

 

 

24

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(C)  EFFECTIVENESS OF CERTAIN PROVISIONS.  WITH RESPECT TO EACH SPINCO,
NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS AGREEMENT:

 

(i) the provisions of Sections 3, 5, 6 and 9(c) (the “Delayed Effectiveness
Provisions”), to the extent related to the parties’ rights and obligation in
respect of such Spinco, shall become effective only if the Spinoff of such
Spinco is effected in the form of a Single-Tier Spinoff, and in such case, shall
become effective upon the Spinoff Date of such Spinco; and

 

(ii) in the event, and upon the earliest to occur, of (x) the Spinoff of such
Spinco effected in a form other than a Single-Tier Spinoff, (y) the public
announcement by IAC of the abandonment of the Spinoff of such Spinco and (z) if
the Delayed Effectiveness Provisions have not previously become effective
pursuant to Section 10(c)(i), the End Date, the Delayed Effectiveness
Provisions, to the extent related to such Spinco, shall terminate and shall
thereafter not become effective.

 

(D)  GOVERNING LAW; CONSENT TO JURISDICTION.  THIS AGREEMENT SHALL BE CONSTRUED
IN ACCORDANCE WITH AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF DELAWARE,
WITHOUT GIVING EFFECT TO THE PRINCIPLES OF CONFLICTS OF LAWS.  EACH OF THE
PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY CONSENTS TO SUBMIT TO THE
EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF DELAWARE, FOR ANY ACTION,
PROCEEDING OR INVESTIGATION IN ANY COURT OR BEFORE ANY GOVERNMENTAL AUTHORITY
(“LITIGATION”) ARISING OUT OF OR RELATING TO THIS AGREEMENT AND THE TRANSACTIONS
CONTEMPLATED HEREBY AND FURTHER AGREES THAT SERVICE OF ANY PROCESS, SUMMONS,
NOTICE OR DOCUMENT BY U.S. MAIL TO ITS RESPECTIVE ADDRESS SET FORTH IN THIS
AGREEMENT SHALL BE EFFECTIVE SERVICE OF PROCESS FOR ANY LITIGATION BROUGHT
AGAINST IT IN ANY SUCH COURT.  EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES ANY OBJECTION TO THE LAYING OF VENUE OF ANY LITIGATION
ARISING OUT OF THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY IN THE
COURTS OF THE STATE OF DELAWARE, AND HEREBY FURTHER IRREVOCABLY AND
UNCONDITIONALLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT
ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM.  EACH OF THE PARTIES IRREVOCABLY AND UNCONDITIONALLY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHTS TO TRIAL
BY JURY IN CONNECTION WITH ANY LITIGATION ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

(E)  COUNTERPARTS.  THIS AGREEMENT MAY BE EXECUTED IN SEPARATE COUNTERPARTS,
EACH OF WHICH SHALL BE AN ORIGINAL AND ALL OF WHICH TAKEN TOGETHER SHALL
CONSTITUTE ONE AND THE SAME AGREEMENT.

 

(F)  SPECIFIC PERFORMANCE; OTHER LIMITATIONS.  IAC AND EACH LIBERTY PARTY EACH
ACKNOWLEDGE AND AGREE THAT THE PARTIES’ RESPECTIVE REMEDIES AT LAW FOR A BREACH
OR THREATENED BREACH OF ANY OF THE PROVISIONS OF THIS AGREEMENT WOULD BE
INADEQUATE AND, IN RECOGNITION OF THAT FACT, AGREES THAT, IN THE EVENT OF A
BREACH OR THREATENED BREACH BY IAC, OR FOLLOWING EACH SPINOFF DATE, THE
APPLICABLE SPINCO, OR A LIBERTY PARTY OF THE PROVISIONS OF THIS AGREEMENT, IN
ADDITION TO ANY REMEDIES AT LAW, THE LIBERTY PARTY, IAC OR SUCH SPINCO,
RESPECTIVELY, WITHOUT POSTING ANY BOND SHALL BE ENTITLED TO OBTAIN EQUITABLE
RELIEF IN THE FORM OF SPECIFIC PERFORMANCE, A TEMPORARY RESTRAINING ORDER, A
TEMPORARY OR PERMANENT INJUNCTION OR ANY OTHER EQUITABLE REMEDY

 

 

 

25

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WHICH MAY THEN BE AVAILABLE.  NO BREACH OR THREATENED BREACH ON THE PART OF ANY
PARTY HERETO SHALL RELIEVE ANY OTHER PARTY OF ANY OF ITS OBLIGATIONS UNDER THIS
AGREEMENT.

 

(G)  SEVERABILITY.  IF ANY TERM, PROVISION, COVENANT OR RESTRICTION OF THIS
AGREEMENT IS HELD BY A COURT OF COMPETENT JURISDICTION TO BE INVALID, VOID OR
UNENFORCEABLE, THE REMAINDER OF THE TERMS, PROVISIONS, COVENANTS AND
RESTRICTIONS OF THIS AGREEMENT SHALL REMAIN IN FULL FORCE AND EFFECT AND SHALL
IN NO WAY BE AFFECTED, IMPAIRED OR INVALIDATED, PROVIDED THAT THE PARTIES HERETO
SHALL NEGOTIATE IN GOOD FAITH TO ATTEMPT TO PLACE THE PARTIES IN THE SAME
POSITION AS THEY WOULD HAVE BEEN IN HAD SUCH PROVISION NOT BEEN HELD TO BE
INVALID, VOID OR UNENFORCEABLE.

 

(H)  ENTIRE AGREEMENT.  THIS AGREEMENT, TOGETHER WITH THE AGREEMENTS AND
INSTRUMENTS REFERENCED HEREIN, EMBODIES THE COMPLETE AGREEMENT AND UNDERSTANDING
AMONG THE PARTIES HERETO WITH RESPECT TO THE SUBJECT MATTER HEREOF AND
SUPERSEDES ANY PRIOR UNDERSTANDING OR AGREEMENTS BY OR AMONG THE PARTIES,
WRITTEN OR ORAL, WITH RESPECT TO THE SUBJECT MATTER HEREOF.

 

(I)  INTERPRETATION.  REFERENCES IN THIS AGREEMENT TO SECTIONS SHALL BE DEEMED
TO BE REFERENCES TO SECTIONS OF THIS AGREEMENT UNLESS THE CONTEXT SHALL
OTHERWISE REQUIRE.  THE WORDS “INCLUDE,” “INCLUDES” AND “INCLUDING” SHALL BE
DEEMED TO BE FOLLOWED BY THE PHRASE “WITHOUT LIMITATION.” THE WORDS “HEREOF,”
“HEREIN” AND “HEREUNDER” AND WORDS OF SIMILAR IMPORT WHEN USED IN THIS AGREEMENT
SHALL REFER TO THIS AGREEMENT AS A WHOLE AND NOT TO ANY PARTICULAR PROVISION OF
SUCH AGREEMENT OR INSTRUMENT.  THE WORD “KNOWLEDGE” WHEN USED IN THIS AGREEMENT
SHALL REFER TO THE ACTUAL KNOWLEDGE OF THE PERSON IN QUESTION WITHOUT SUCH
PERSON BEING UNDER ANY DUTY OR OBLIGATION TO MAKE ANY INQUIRIES.  EACH REFERENCE
TO A STATUTE, RULE OR REGULATION (INCLUDING ANY SECTION OF THE CODE AND ANY
TREASURY REGULATIONS) HEREIN SHALL BE DEEMED TO INCLUDE ANY SUCCESSOR STATUTE,
RULE OR REGULATION THERETO.

 

(J)  HEADINGS.  THE HEADINGS CONTAINED IN THIS AGREEMENT ARE FOR CONVENIENCE
ONLY AND SHALL NOT BE INTERPRETED TO LIMIT OR OTHERWISE AFFECT THE PROVISIONS OF
THIS AGREEMENT.

 

 

 

 

26

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IN WITNESS WHEREOF, the undersigned has executed this Agreement as of the date
first written above.

 

Liberty Media Corporation,

 

IAC/InterActiveCorp, a Delaware corporation

a Delaware corporation

 

 

 

 

 

 

 

 

/s/ John C. Malone

 

/s/ Greg Blatt

Name:

John C. Malone

 

Name:

Greg Blatt

Title:

Chairman

 

Title:

Executive Vice President

 

 

 

LMC Silver King, Inc.,

 

Acknowledged and Agreed for purposes of Section 4(c) only:

a Delaware corporation

 

 

 

 

 

 

 

 

/s/ Craig Troyer

 

 

Name:

Craig Troyer

 

/s/ Barry Diller

Title:

Vice President

 

Barry Diller

 

 

Liberty HSN II, Inc.,

a Delaware corporation

 

 

/s/ Craig Troyer

 

Name:

Craig Troyer

Title:

Vice President

 

 

 

LMC USA VIII, Inc.,

a Delaware corporation

 

 

/s/ Craig Troyer

 

Name:

Craig Troyer

Title:

Vice President

 

 

 

LMC USA IX, Inc.,

a Delaware corporation

 

 

/s/ Craig Troyer

 

Name:

Craig Troyer

Title:

Vice President

 

 

 

 

--------------------------------------------------------------------------------

 

 

 

LMC USA XI, Inc.,

a Delaware corporation

 

 

/s/ Craig Troyer

 

Name:

Craig Troyer

Title:

Vice President

 

 

 

LMC USA XII, Inc.,

a Delaware corporation

 

 

/s/ Craig Troyer

 

Name:

Craig Troyer

Title:

Vice President

 

 

 

LMC USA XIII, Inc.,

a Delaware corporation

 

 

/s/ Craig Troyer

 

Name:

Craig Troyer

Title:

Vice President

 

 

LMC USA XIV, Inc.,

a Delaware corporation

 

 

/s/ Craig Troyer

 

Name:

Craig Troyer

Title:

Vice President

 

 

 

LMC USA XV, Inc.,

a Delaware corporation

 

 

/s/ Craig Troyer

 

Name:

Craig Troyer

Title:

Vice President

 

 

 

Liberty Tweety, Inc.,

a Delaware corporation

 

 

/s/ Craig Troyer

 

Name:

Craig Troyer

Title:

Vice President

 

 

 

 

 

--------------------------------------------------------------------------------

 

 

BDTV Inc.,

a Delaware corporation

 

 

/s/ Craig Troyer

 

Name:

Craig Troyer

Title:

Vice President

 

 

 

BDTV II Inc.,

a Delaware corporation

 

 

/s/ Craig Troyer

 

Name:

Craig Troyer

Title:

Vice President

 

 

 

BDTV III Inc.,

a Delaware corporation

 

 

/s/ Craig Troyer

 

Name:

Craig Troyer

Title:

Vice President

 

 

 

BDTV IV Inc.,

a Delaware corporation

 

 

/s/ Craig Troyer

 

Name:

Craig Troyer

Title:

Vice President

 

 

 

 

 

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