Exhibit 10.5

 

EXECUTION VERSION

 

VOTING AGREEMENT

 

This VOTING AGREEMENT, dated as of June 30, 2016 (this “Agreement”), is made and
entered into by and among Starz, a Delaware corporation (the “Company”), Lions
Gate Entertainment Corp., a corporation organized and existing under the laws of
British Columbia (“Parent”), and the stockholders of Parent that are listed on
Schedule A hereto (each, an “MHR Stockholder” and, collectively, the “MHR
Stockholders”).

 

RECITALS

 

WHEREAS, concurrently with the execution and delivery of this Agreement, Parent,
the Company and Orion Arm Acquisition Inc., a Delaware corporation and a wholly
owned Subsidiary of Parent (“Merger Sub”), are entering into an Agreement and
Plan of Merger, dated as of the date hereof (the “Original Merger Agreement”
and, as the same may be amended or supplemented, the “Merger Agreement”;
capitalized terms used but not defined in this Agreement shall have the meanings
set forth in the Merger Agreement), that provides, among other things, for the
merger of Merger Sub with and into the Company (the “Merger”), upon the terms
and subject to the conditions set forth in the Merger Agreement, with the
Company continuing as the surviving corporation in the Merger as a wholly owned
subsidiary of Parent;

 

WHEREAS, the MHR Stockholders are the record or beneficial owners of, and,
subject to the Investor Rights Agreement (as defined below) and the Standstill
Agreement (as defined below), have either sole or shared voting power over, such
number of shares of Parent Common Stock set forth opposite each such MHR
Stockholder’s name on Schedule A (such shares of Parent Common Stock, the
“Original Shares”, and together with any New Shares (as defined below), the
“Subject Shares”);

 

WHEREAS, in connection with the Merger, Parent will hold the Parent
Stockholders’ Meeting to approve (i) the Parent Common Stock Reorganization,
(ii) the Parent Common Stock Exchange and (iii) the issuance of Parent Common
Stock to holders of shares of Company Common Stock as part of the Merger
Consideration (the “Merger Consideration Issuance”);

 

WHEREAS, concurrently with the execution and delivery of this Agreement, Parent
and Merger Sub are entering into a Stock Exchange Agreement, dated as of June
30, 2016, with the stockholders listed on Schedule 1 thereto (the “Original
Exchange Agreement” and, as the same may be amended or supplemented, the
“Exchange Agreement”), that provides, among other things, (i) for the transfer
of the Starz Exchange Shares (as defined therein) from such stockholders to
Parent in exchange for the Lionsgate Exchange Consideration (as defined therein)
and (ii) the issuance of the Lionsgate Exchange Shares as part of the Lionsgate
Exchange Consideration (the “Exchange Stock Issuance”), in each case subject to
the terms and conditions of the Exchange Agreement; and

 

WHEREAS, as a condition to its willingness to enter into the Merger Agreement,
the Company has requested that the MHR Stockholders enter into this Agreement.

 

 

 

 

NOW, THEREFORE, in consideration of the foregoing and the representations,
warranties, covenants and agreements set forth herein, each party hereto agrees
as follows:

 

SECTION 1.  Representations and Warranties of MHR Stockholder.  Each MHR
Stockholder hereby represents and warrants to the Company, severally and not
jointly and severally, solely with respect to itself, as follows:

 

(a)          Organization; Authority; Execution and Delivery;
Enforceability.  (i) Such MHR Stockholder is duly organized, validly existing
and in good standing under the laws of its jurisdiction of organization, if
applicable, and (ii) the execution and delivery of this Agreement by such MHR
Stockholder, and the performance by such MHR Stockholder of its obligations
under this Agreement, have been duly authorized by all necessary corporate or
similar action on the part of such MHR Stockholder.  Such MHR Stockholder has
all requisite corporate, company, partnership or other power and authority to
execute and deliver this Agreement (and each Person executing this Agreement on
behalf of such MHR Stockholder has full power, authority and capacity to execute
and deliver this Agreement on behalf of such MHR Stockholder and to thereby bind
such MHR Stockholder) and to perform its obligations hereunder.  This Agreement
has been duly executed and delivered by such MHR Stockholder and, assuming due
authorization, execution and delivery by the other parties hereto, constitutes a
valid and binding obligation of such MHR Stockholder, enforceable against such
MHR Stockholder in accordance with its terms, except as enforcement may be
limited by bankruptcy, insolvency, reorganization or similar Laws affecting
creditors’ rights generally and by general principles of equity.

 

(b)          Ownership. Such MHR Stockholder is the record or beneficial owner
of the number of Original Shares set forth opposite such MHR Stockholder’s name
on Schedule A, and such MHR Stockholder’s Original Shares constitute all of the
shares of Parent Common Stock owned by such MHR Stockholder.  Except (w) as set
forth in Sections 3 and 4 of this Agreement, (x) pursuant to the Investor Rights
Agreement dated as of November 10, 2015 among MHR Fund Management, LLC (“MHR”),
Liberty Global Incorporated Limited, Discovery Lightning Investments Ltd.,
Parent, Liberty Global plc, Discovery Communications, Inc.  and the other
parties thereto (the “Investor Rights Agreement”), (y) pursuant to the Voting
and Standstill Agreement, dated as of November 10, 2015, among Parent, the
Liberty Stockholder, Discovery Lightning Investments Ltd., John C.  Malone, MHR
Fund Management, LLC, Liberty Global Incorporated Limited, Discovery
Communications, Inc.  and the Mammoth Funds (as defined therein) (the
“Standstill Agreement”), and (z) in connection with any Hedging Transaction or
Financing Transaction (each as defined in the Investor Rights Agreement), such
MHR Stockholder (together with the other MHR Stockholders) has the power to
vote, or direct the voting of, all of the Original Shares, and none of such MHR
Stockholder’s Original Shares are subject to any voting trust or other
agreement, arrangement or restriction with respect to the voting of MHR
Stockholder’s Original Shares.  Such MHR Stockholder does not own (1) any shares
of capital stock of Parent other than the Original Shares or (2) any option,
warrant, call or other right to acquire or receive capital stock or other equity
or voting interests in Parent (other than preemptive rights under the Investor
Rights Agreement).

  

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SECTION 2.  Representations and Warranties of the Company and Parent.

 

(a)          The Company hereby represents and warrants to each MHR Stockholder
as follows: (i) the Company is duly organized, validly existing and in good
standing under the laws of its jurisdiction of organization, (ii) the Company
has all requisite power and authority to execute and deliver this Agreement (and
each Person executing this Agreement on behalf of the Company has full power,
authority and capacity to execute and deliver this Agreement on behalf of the
Company and to thereby bind the Company) and to perform its obligations
hereunder, (iii) the execution and delivery of this Agreement by the Company,
and the performance of the Company of its obligations hereunder, have been duly
authorized by all necessary corporate action on the part of the Company, and
(iv) this Agreement has been duly executed and delivered by the Company and,
assuming due authorization, execution and delivery by the other parties hereto,
constitutes a valid and binding obligation of the Company, enforceable against
the Company in accordance with its terms, except as enforcement may be limited
by bankruptcy, insolvency, reorganization or similar Laws affecting creditors’
rights generally and by general principles of equity.

 

(b)          Parent hereby represents and warrants to each MHR Stockholder as
follows: (i) Parent is duly organized, validly existing and in good standing
under the laws of its jurisdiction of organization, (ii) Parent has all
requisite power and authority to execute and deliver this Agreement (and each
Person executing this Agreement on behalf of Parent has full power, authority
and capacity to execute and deliver this Agreement on behalf of Parent and to
thereby bind Parent) and to perform its obligations hereunder, (iii) the
execution and delivery of this Agreement by Parent, and the performance of
Parent of its obligations hereunder, have been duly authorized by all necessary
corporate action on the part of Parent, (iv) this Agreement has been duly
executed and delivered by Parent and, assuming due authorization, execution and
delivery by the other parties hereto, constitutes a valid and binding obligation
of Parent, enforceable against Parent in accordance with its terms, except as
enforcement may be limited by bankruptcy, insolvency, reorganization or similar
Laws affecting creditors’ rights generally and by general principles of equity,
and (v) Parent has provided to the MHR Stockholders true and complete copies of
the Merger Agreement (including all exhibits and schedules thereto, including
the Company Disclosure Letter and the Parent Disclosure Letter), the Commitment
Letter (and other agreements and arrangements with respect to the Debt Financing
to which Parent, Merger Sub or one of their respective subsidiaries is a party)
and all other agreements or arrangements between Parent, on the one hand, and
the Company and/or any stockholders of Parent or the Company, on the other hand
(including the Exchange Agreement, the Principal Company Stockholders Voting
Agreement and the Principal Parent Stockholders Voting Agreements) in connection
with the Merger Agreement, this Agreement and the transactions contemplated
hereby and thereby.

 

SECTION 3.  Covenants of MHR Stockholder.  Each MHR Stockholder covenants and
agrees, severally and not jointly and severally, solely with respect to itself,
as follows:

 

(a)          Subject to the last sentence of this Section 3(a), at any meeting
of the stockholders of Parent called to vote upon the Parent Common Stock
Reorganization, the Parent Common Stock Exchange and the Merger Consideration
Issuance, or at any postponement or adjournment thereof permitted by the Merger
Agreement, such MHR Stockholder shall (i) appear at such meeting or otherwise
cause its Subject Shares to be counted as present thereat for

 

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purposes of calculating a quorum and (ii) vote (or cause to be voted) all of
such MHR Stockholder’s Subject Shares in favor of the Parent Common Stock
Reorganization, the Parent Common Stock Exchange and the Merger Consideration
Issuance; provided that, in each case, neither the Merger Agreement (including
all exhibits and schedules thereto, including the Company Disclosure Letter and
the Parent Disclosure Letter) nor the Starz Voting Agreement (as defined below)
shall have been amended, and no provision thereunder shall have been waived by
Parent, in any manner that (i) increases the amount of, or changes the form or
allocation of, the Merger Consideration (as defined in the Merger Agreement)
payable under the Merger Agreement, (ii) amends the conditions precedent set
forth in Article VI of the Merger Agreement, or adds new conditions or modifies
any existing conditions to the consummation of the Merger, the Parent Common
Stock Reorganization or the Parent Common Stock Exchange, (iii) amends Exhibits
A-1, A-2, A-3, A-4 or A-5 to the Merger Agreement, (iv) amends the definition of
“Company Material Adverse Effect” or “Parent Material Adverse Effect” set forth
in the Merger Agreement, (v) amends any provision of the Merger Agreement in any
other material manner, (vi) amends any provision of the Voting Agreement dated
as of June 30, 2016 by and among Parent, the Company and certain stockholders of
Parent, including John C.  Malone and his affiliates, in any material manner
(the “Starz Voting Agreement”), or (vii) in each case has the effect of any of
the foregoing (any such amendment or waiver described in clauses (i)-(vii), a
“Fundamental Merger Amendment”), in each case without the prior written consent
of MHR, and no Fundamental Exchange Amendment shall have occurred.  If necessary
in order to ensure that an MHR Stockholder can vote its Subject Shares in
accordance with this Agreement, such MHR Stockholder shall use its reasonable
efforts to (i) transfer its Subject Shares from a brokerage account to a
custodial account and/or (ii) convert its Subject Shares to certificated form as
promptly as reasonably practicable after the date of this Agreement; provided
that, because the Subject Shares are currently held in brokerage accounts, the
Company acknowledges and agrees that there cannot be absolute assurance that
every Subject Share will be voted as directed by the applicable MHR Stockholder
(including as a result of the proration practices of broker-dealers) and such
failure shall not constitute a breach hereunder.

 

(b)          Subject to the last sentence of Section 3(a), at any meeting of the
stockholders of Parent called to vote upon the Exchange Stock Issuance, or at
any postponement or adjournment thereof, as permitted by the Exchange Agreement,
such MHR Stockholder shall (i) appear at such meeting or otherwise cause its
Subject Shares to be counted as present thereat for purposes of calculating a
quorum and (ii) vote (or cause to be voted) all of such MHR Stockholder’s
Subject Shares in favor of the Exchange Stock Issuance, provided, that in each
case, the Exchange Agreement shall not have been amended, and no provision
thereunder shall have been waived by Parent, in any manner that (i) increases
the amount of, or changes the form or allocation of, the Lionsgate Exchange
Consideration or the Lionsgate Alternate Cash Consideration (as such terms are
defined in the Exchange Agreement) payable under the Exchange Agreement, (ii)
amends the conditions precedent set forth in Article V of the Exchange
Agreement, or adds new conditions or modifies any existing conditions to the
consummation of the Exchange, (iii) amends any provision of the Exchange
Agreement in any other material manner, (iv) amends any provision of the Starz
Voting Agreement in any material manner, or (v) in each case has the effect of
any of the foregoing (any such amendment or waiver described in clauses (i)-(v),
a “Fundamental Exchange Amendment”), in each case without the prior written
consent of MHR, and no Fundamental Merger Amendment shall have occurred.

 

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(c)          Subject to the last sentence of Section 3(a), at any meeting of the
stockholders of Parent or at any postponement or adjournment thereof or in any
other circumstances upon which a vote, adoption or other approval of Parent’s
stockholders is sought, such MHR Stockholder shall vote (or cause to be voted)
all of such MHR Stockholder’s Subject Shares against each of the following: (i)
any Alternative Parent Transaction Proposal or any agreement relating thereto
and (ii) any amendment of the Articles of Parent (other than pursuant the Merger
Agreement) or any other proposal, action, agreement or transaction, which, in
the case of this clause (ii), would reasonably be expected to (A) result in a
breach of any covenant, agreement, obligation, representation or warranty of
Parent contained in the Merger Agreement (provided that the Company has advised
the MHR Stockholders of such asserted breach in writing at least three Business
Days prior to the applicable vote) or of such MHR Stockholder contained in this
Agreement, (B) prevent, impede, interfere with, delay, discourage or adversely
affect the consummation of the transactions contemplated by the Merger
Agreement, or (C) change in any manner (other than as contemplated by the Parent
Common Stock Reorganization, the Parent Common Stock Exchange and the Merger
Consideration Issuance) the voting rights of the Parent Common Stock (the
matters described in clauses (i) and (ii), collectively, the “Vote-Down
Matters”).  For the avoidance of doubt, nothing in this Agreement shall be
deemed to prohibit any MHR Stockholder from voting any Subject Shares (x) in a
manner required by the Investor Rights Agreement or the Standstill Agreement or
(y) in favor of any vote, adoption or other approval permitting the MHR
Stockholders and/or their respective Affiliates to participate in any equity or
debt financing of Parent (including the exercise of their preemptive rights
under the Investor Rights Agreement).

 

(d)          Such MHR Stockholder shall not, nor shall it authorize or permit
any of its Affiliates (other than any portfolio company of any MHR Stockholder
or any fund or investment vehicle managed or advised by such MHR Stockholder or
any of its Affiliates) or its and their directors, officers or employees to, nor
shall it direct any portfolio company of any MHR Stockholder or any fund or
investment vehicle managed or advised by such MHR Stockholder or any of its
Affiliates to, directly or indirectly, (i) solicit, initiate or knowingly
facilitate (including by way of furnishing information), induce or knowingly
encourage any inquiries or the making of any proposal or offer (including any
proposal or offer to the Parent Stockholders) that constitutes or would
reasonably be expected to lead to an Alternative Parent Transaction Proposal, or
(ii) enter into, continue or otherwise participate in any discussions or
negotiations regarding, or furnish to any Person any information with respect
to, or cooperate in any way that would otherwise reasonably be expected to lead
to, any Alternative Parent Transaction Proposal.  Such MHR Stockholder shall,
and shall cause its Affiliates (other than any portfolio company of any MHR
Stockholder or any fund or investment vehicle managed or advised by such MHR
Stockholder or any of its Affiliates) and its and their directors, officers and
employees to, immediately cease and cause to be terminated any and all existing
activities, discussions or negotiations with any Person with respect to any
Alternative Parent Transaction Proposal.  Such MHR Stockholder shall use
commercially reasonable efforts to cause the financial advisors, legal counsel
and other representatives of such MHR Stockholder and its Affiliates (other than
any portfolio company of any MHR Stockholder or any fund or investment vehicle
managed or advised by such MHR Stockholder or any of its Affiliates) to comply
with this Section 3(d).

 

(e)          Such MHR Stockholder shall not, and shall not commit or agree to,
directly or indirectly, (i) sell, transfer, pledge, encumber, exchange, assign,
tender or otherwise

 

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dispose of (collectively, “Transfer”), or consent to or permit any Transfer of,
any Subject Shares (or any interest therein) or any rights to acquire any
securities or equity interests of Parent, or enter into any Contract, option,
call or other arrangement with respect to the Transfer (including any
profit-sharing or other derivative arrangement) of any Subject Shares (or any
interest therein) or any rights to acquire any securities or equity interests of
Parent, to any Person, unless in each case prior to any such Transfer (or
execution of any such Contract or other arrangement) the proposed transferee of
such MHR Stockholder’s Subject Shares or rights agrees in writing to be bound to
the transferring MHR Stockholder’s obligations hereunder with respect to the
applicable Subject Shares or rights, (ii) enter into any voting arrangement,
whether by proxy, voting agreement or otherwise, with respect to any Subject
Shares or rights to acquire any securities or equity interests of Parent, other
than this Agreement or (iii) take any other action that would reasonably be
expected to prevent or materially impair or delay the performance by such MHR
Stockholder of its obligations hereunder.  Nothing in this Agreement shall be
deemed to prohibit the Subject Shares from being subject to customary liens
resulting from the Subject Shares being held in brokerage or custodial
accounts.  Notwithstanding the foregoing, “Transfer” shall exclude, however,
with respect to any Subject Shares, the entry into or performance of any Hedging
Transaction or Financing Transaction in respect of such Subject Shares and any
payment or settlement thereunder (including, following the first anniversary of
November 10, 2015, physical settlement), the granting of any lien, pledge,
security interest, or other encumbrance in or on such Subject Shares to a
Hedging Counterparty or Financing Counterparty in connection with any Hedging
Transaction or Financing Transaction, the rehypothecation of any Subject Shares
by the Hedging Counterparty or Financing Counterparty in connection with a
Hedging Transaction or Financing Transaction, and any transfer to, by or at the
request of such Hedging Counterparty or Financing Counterparty in connection
with an exercise of remedies by the Hedging Counterparty or Financing
Counterparty under such Hedging Transaction or Financing Transaction (but, for
the avoidance of doubt, “Transfer” shall include any delivery of Subject Shares
in respect of the settlement, termination or cancellation of a Hedging
Transaction or Financing Transaction in respect of the settlement, termination
or cancellation of a Hedging Transaction or Financing Transaction occurring
prior to the first anniversary of November 10, 2015 other than in connection
with the exercise of remedies by a Hedging Counterparty or Financing
Counterparty).

 

(f)          Such MHR Stockholder hereby agrees that, in the event (i) of any
stock or extraordinary dividend or other distribution, stock split, reverse
stock split, recapitalization, reclassification, reorganization, combination or
other like change of or affecting the Subject Shares (including the Parent
Common Stock Reorganization and the Parent Common Stock Exchange) or (ii) that
such MHR Stockholder acquires the right to vote, or direct the voting of, any
shares of capital stock of Parent, in each case after the execution of this
Agreement (including by conversion, operation of Law or otherwise)
(collectively, the “New Shares”), such New Shares shall constitute Subject
Shares and be subject to the applicable terms of this Agreement, including all
covenants, agreements, obligations, representations and warranties set forth
herein.  This Agreement and the obligations hereunder shall be binding upon any
Person to which beneficial ownership of such MHR Stockholder’s Subject Shares
shall pass, whether by operation of Law or otherwise, including to the extent
applicable, such MHR Stockholder’s heirs, guardians, administrators or
successors.

 

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(g)          Notwithstanding anything to the contrary contained herein, each MHR
Stockholder is entering into this Agreement solely in its capacity as record or
beneficial owner of such MHR Stockholder’s Subject Shares, and nothing herein is
intended to or shall limit, affect or restrict any director or officer of Parent
(including any appointee or representative of any MHR Stockholder or any of its
Affiliates to the board of directors of Parent (including pursuant to the
Investor Rights Agreement)) in his or her capacity as a director or officer of
Parent or any of its Subsidiaries (including voting on matters put to such board
or any committee thereof, influencing officers, employees, agents, management or
the other directors of Parent or any of its Subsidiaries and taking any action
or making any statement at any meeting of such board or any committee thereof)
or in the exercise of his or her fiduciary duties as a director or officer of
Parent or any of its Subsidiaries.

 

(h)          For the avoidance of doubt, other than with respect to the Merger
Consideration Issuance or the Exchange Stock Issuance, nothing in this Agreement
shall be deemed to require the MHR Stockholders to vote in favor of, or to
prohibit the MHR Stockholders from taking any action that adversely effects, any
issuance of securities by Parent or any of its Subsidiaries (including any
equity financing in furtherance of the transactions contemplated by the Merger
Agreement), including in connection with any proposal combined with any proposal
to approve the Merger Consideration Issuance or the Exchange Stock Issuance.

 

SECTION 4.  Grant of Irrevocable Proxy; Appointment of Proxy and
Attorney-in-Fact.  (a)  Such MHR Stockholder hereby irrevocably grants to, and
appoints, the Company and any other officer of the Company designated in writing
by the Company, and each of them individually, such MHR Stockholder’s proxy and
attorney-in-fact (with full power of substitution and re-substitution and
coupled with an interest), for and in the name, place and stead of such MHR
Stockholder, to vote all of such MHR Stockholder’s Subject Shares at any meeting
of stockholders of Parent (including any Parent Stockholders Meeting) or any
adjournment or postponement thereof, (i) in favor of the Parent Common Stock
Reorganization, the Parent Common Stock Exchange and the Merger Consideration
Issuance in accordance with the terms of, but subject to the conditions,
provisos and other limitations of, Section 3(a) of this Agreement, (ii) in favor
of the Exchange Stock Issuance in accordance with the terms of Section 3(b) of,
but subject to the conditions, provisos and other limitations of, this Agreement
and (iii) against any Vote-Down Matter in accordance with the terms of, but
subject to the conditions, provisos and other limitations of, Section 3(c) of
this Agreement.  The proxy and attorney-in-fact granted in this Section 4 shall
expire and terminate upon the termination of this Agreement.

 

(b)          Such MHR Stockholder represents that any proxies heretofore given
in respect of such MHR Stockholder’s Subject Shares are not irrevocable, and
that all such proxies are hereby revoked.

 

(c)          Such MHR Stockholder hereby affirms that the irrevocable proxy and
attorney-in-fact set forth in this Section 4 is given in connection with the
Company entering into the Merger Agreement and being a third party beneficiary
to the Exchange Agreement and Parent entering into the Merger Agreement and the
Exchange Agreement, and that such irrevocable proxy and attorney-in-fact is
given to secure the performance of the duties of such

 

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MHR Stockholder under this Agreement.  Such MHR Stockholder hereby further
affirms that the irrevocable proxy and attorney-in-fact is coupled with an
interest and may under no circumstances be revoked.  Such MHR Stockholder hereby
ratifies and confirms all that such irrevocable proxy and attorney-in-fact may
lawfully do or cause to be done by virtue of the authority granted pursuant to
this Agreement (subject to the conditions, provisos and other limitations
contained herein).  Each such irrevocable proxy and attorney-in-fact is executed
and intended to be irrevocable with the same effect as under the provisions of
Section 212(e) of the DGCL.

 

SECTION 5.  Further Assurances. Such MHR Stockholder shall, from time to time,
execute and deliver, or cause to be executed and delivered, such additional or
further consents, documents and other instruments as the Company may reasonably
request for the purpose of effectuating the matters covered by this Agreement.

 

SECTION 6.  Assignment. Neither this Agreement nor any of the rights, interests
or obligations under this Agreement shall be assigned, in whole or in part, by
any of the parties hereto without the prior written consent of the other
parties.  Any assignment in violation of the preceding sentence shall be
void.  Subject to the preceding two sentences, this Agreement will be binding
upon, inure to the benefit of, and be enforceable by, the parties and their
respective successors and assigns.

 

SECTION 7.  Termination. This Agreement shall, (i) with respect to Section 3,
other than Sections 3(b), 3(e), 3(f), 3(g) and 3(h), terminate upon the earliest
of (a) immediately following the Parent Stockholders’ Meeting duly convened and
at which the Parent Stockholder Approvals have been voted on by the stockholders
of Parent (including, if adjourned in accordance with the Merger Agreement,
immediately following the final adjournment thereof), (b) immediately following
the meeting of the stockholders of Parent called to vote upon the Exchange Stock
Issuance and at which such matters have been voted on by the stockholders of
Parent (including, if adjourned, immediately following the final adjournment
thereof), (c) the termination of the Merger Agreement in accordance with its
terms (the “Merger Agreement Termination”), and (d) the entry into any
Fundamental Merger Amendment or Fundamental Exchange Amendment without the prior
written consent of MHR, (ii) as to Section 3(b), terminate upon the earlier of
(a) the termination of the Exchange Agreement in accordance with its terms, (b)
immediately following the consummation of the Merger, (c) immediately following
the meeting of the stockholders of Parent called to vote upon the Exchange Stock
Issuance and at which such matters have been voted on by the stockholders of
Parent (including, if adjourned, immediately following the final adjournment
thereof) and (d) the entry into any Fundamental Exchange Amendment or
Fundamental Merger Amendment without the prior written consent of MHR, and (iii)
terminate in full upon the later of the terminations described in clauses (i)
and (ii); provided that, in each case, Section 6 and Sections 7 through 9 shall
survive any such termination.  Notwithstanding the foregoing, the Company shall
cease to have any rights hereunder from and after the earlier of (x) the Merger
Agreement Termination, and (y) the completion of the events described in Section
7(i)(a) hereof.

 

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SECTION 8.  Parent Undertaking.

 

In consideration of the MHR Stockholders’ willingness to execute this Agreement,
Parent hereby agrees with each MHR Stockholder as follows:

 

(a)          neither Parent nor any of its Subsidiaries shall enter into any
Fundamental Merger Amendment or Fundamental Exchange Amendment without the prior
written consent of MHR; and

 

(b)          Parent agrees to take all such steps as may be necessary or
desirable (to the extent permitted under applicable Law) to exempt from Section
16(a) and Section 16(b) of the Exchange Act any acquisitions or dispositions of
Company Securities (as defined in the Investor Rights Agreement) or rights
related thereto by the MHR Stockholders and their Affiliates (as defined in the
Investor Rights Agreement) in connection with the Parent Common Stock
Reorganization, the Parent Common Stock Exchange, any issuance of Company
Securities contemplated by the Merger Agreement or the Exchange Agreement or any
issuance of New Issue Securities (as defined in the Investor Rights Agreement);
and

 

(c)          the amendment to the Investor Rights Agreement being entered into
concurrently herewith is a material inducement to each MHR Stockholder’s
willingness to execute, deliver and perform this Agreement.

 

SECTION 9.  General Provisions. (a)  Amendments.  This Agreement may not be
amended, modified or supplemented in any manner, whether by course of conduct or
otherwise, except by an instrument in writing specifically designated as an
amendment hereto, signed on behalf of each of the parties in interest at the
time of the amendment.

 

(b)          Notices. All notices, requests, claims, demands and other
communications under this Agreement shall be in writing and shall be deemed
given (a) on the date of delivery if delivered personally or sent via facsimile
(with confirmed transmission) prior to 5:00 p.m., local time, in the place of
receipt (and otherwise on the next Business Day) or (b) on the first Business
Day following the date of dispatch if sent by a nationally recognized overnight
courier (providing proof of delivery), in each case to the parties at the
following addresses (or at such other address for a party as shall be specified
by like notice); provided, that should any such delivery be made by facsimile,
the sender shall also send a copy of the information so delivered on or before
the next Business Day by a nationally recognized overnight courier:

 

if to the Company:

 

Starz

8900 Liberty Circle

Englewood, Colorado 80112

Attention: David Weil

 

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with a copy to (which shall not constitute notice):

 

Baker Botts L.L.P.

30 Rockefeller Plaza

New York, NY 10112

Facsimile: 212 408-2501 Attention: Renee L.  Wilm

 

if to Parent:

 

Lions Gate Entertainment Corp.

2700 Colorado Avenue

Santa Monica, CA 90404

Facsimile: 310-496-1359 Attention: Wayne Levin

 

with a copy to (which shall not constitute notice):

 

Wachtell, Lipton, Rosen & Katz

51 West 52nd Street

New York, NY 10019

Facsimile: 212 403-2000 Attention: David E.  Shapiro   Gordon S.  Moodie

 

if to any MHR Stockholder:

 

MHR Fund Management LLC

1345 Avenue of the Americas, Floor 42

New York, NY 10105

Attention: Janet Yeung

Facsimile: (212) 262-9356

 

with a copy to (which shall not constitute notice):

 

Davis Polk & Wardwell LLP

450 Lexington Avenue

New York, New York 10017

Attention: Phillip Mills   Brian Wolfe Facsimile: (212) 701-5800

 

(c)          Interpretation. When a reference is made in this Agreement to a
paragraph, a Section or a Schedule, such reference shall be to a paragraph of, a
Section of or a Schedule to this Agreement unless otherwise indicated.  The
headings contained in this Agreement are for reference purposes only and shall
not affect in any way the meaning or interpretation of this Agreement.  Whenever
the words “include”, “includes” or “including” are

 

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used in this Agreement, they shall be deemed to be followed by the words
“without limitation”.  The words “hereof”, “hereto”, “hereby”, “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 this
Agreement.  The term “or” is not exclusive.  The word “extent” in the phrase “to
the extent” shall mean the degree to which a subject or other thing extends, and
such phrase shall not mean simply “if”.  The definitions contained in this
Agreement are applicable to the singular as well as the plural forms of such
terms.  Any agreement, instrument or Law defined or referred to herein means
such agreement, instrument or Law as from time to time amended, modified or
supplemented, unless otherwise specifically indicated.  References to a Person
are also to its permitted successors and assigns.  Each of the parties hereto
has participated in the drafting and negotiation of this Agreement. If an
ambiguity or question of intent or interpretation arises, this Agreement must be
construed as if it is drafted by all the parties hereto, and no presumption or
burden of proof shall arise favoring or disfavoring any party hereto by virtue
of authorship of any of the provisions of this Agreement.

 

(d)          Counterparts. This Agreement may be executed in two or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other parties, it being understood that all
parties need not sign the same counterpart.  The exchange of copies of this
Agreement and of signature pages by facsimile or e-mail shall constitute
effective execution and delivery of this Agreement as to the parties and may be
used in lieu of the original Agreement for all purposes.  Signatures of the
parties transmitted by facsimile or e-mail shall be deemed to be their original
signatures for all purposes.

 

(e)          Entire Agreement; No Third-Party Beneficiaries.  This Agreement
(i) constitutes the entire agreement, and supersedes all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter hereof and no party is relying on any other oral or written
representation, agreement or understanding and no party makes any express or
implied representation or warranty in connection with the transactions
contemplated by this Agreement other than as set forth in this Agreement and
(ii) is not intended to confer upon any Person other than the parties any rights
or remedies; provided, however, that the Stockholders listed on Schedule 1 to
the Exchange Agreement shall have the right to enforce the obligations pursuant
to Section 3(b) of this Agreement.

 

(f)          Governing Law; Consent to Jurisdiction; Venue.

 

(i)          This Agreement and all disputes, claims or controversies arising
out of or relating to this Agreement, or the negotiation, validity or
performance of this Agreement or the transactions contemplated hereby, shall be
governed by and construed in accordance with the laws of the State of New York
without regard to its rules of conflict of laws.

 

(ii)         The parties hereto agree that any suit, action or proceeding
seeking to enforce any provision of, or based on any matter arising out of or in
connection with, this Agreement or the transactions contemplated hereby shall be
brought in the United States District Court for the Southern District of New
York or any New York State court sitting in New York City, so long as one of
such courts shall have subject matter jurisdiction

 

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over such suit, action or proceeding, and that any cause of action arising out
of this Agreement shall be deemed to have arisen from a transaction of business
in the State of New York, and each of the parties hereby irrevocably consents to
the jurisdiction of such courts (and of the appropriate appellate courts
therefrom) in any such suit, action or proceeding and irrevocably waives, to the
fullest extent permitted by law, any objection that it may now or hereafter have
to the laying of the venue of any such suit, action or proceeding in any such
court or that any such suit, action or proceeding brought in any such court has
been brought in an inconvenient forum.  Process in any such suit, action or
proceeding may be served on any party anywhere in the world, whether within or
without the jurisdiction of any such court.  Without limiting the foregoing,
each party agrees that service of process on such party as provided in Section
9(b) shall be deemed effective service of process on such party.

 

(g)          Severability. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule of Law or public
policy, all other conditions and provisions of this Agreement shall nevertheless
remain in full force and effect, insofar as the foregoing can be accomplished
without materially affecting the economic benefits anticipated by the parties to
this Agreement. Upon such determination that any term or other provision is
invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible to the fullest extent permitted by
applicable Law in an acceptable manner to the end that the transactions
contemplated hereby are fulfilled to the greatest extent possible.

 

(h)          Specific Performance.  The parties agree that irreparable damage
would occur and that the parties would not have any adequate remedy at Law in
the event that any of the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise breached.  It is
accordingly agreed that the parties shall be entitled to seek an injunction or
injunctions to prevent breaches of this Agreement and to seek to enforce
specifically the terms and provisions of this Agreement in the courts described
in Section 9(f)(ii), this being in addition to any other remedy to which they
are entitled at law or in equity.

 

(i)          Waiver of Jury Trial.  EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES
ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
(WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THE ACTIONS OF ANY
PARTY HERETO IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT OF
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

(j)          Hedging Transactions and Financing Transactions.

 

(i)          No provision of this Agreement shall be binding on any Person
solely because such Person is:

 

1.a Hedging Counterparty;

 

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2.a holder of Subject Shares as a result of the rehypothecation of Subject
Shares by a Hedging Counterparty or Financing Counterparty; or

 

3.a transferee of Subject Shares pursuant to settlement under, or pursuant to
default rights or the exercise of remedies by a Hedging Counterparty or
Financing Counterparty in connection with, any Hedging Transaction or Financing
Transaction.

  

(ii)         No provision of this Agreement shall prohibit any Person from
entering into, performing or settling Hedging Transactions or Financing
Transactions in relation to any Subject Shares, or granting liens and other
security interests in connection therewith, from exercising remedies thereunder,
or from permitting a Hedging Counterparty or a Financing Counterparty to
rehypothecate Subject Shares in connection with a Hedging Transaction or
Financing Transaction nor shall any of the foregoing described in this Section
9(j) be deemed, in and of itself, a violation of this Agreement.

 

(iii)        As used in this Agreement, the terms Hedging Transaction, Financing
Transaction, Hedging Counterparty and Financing Counterparty shall each have the
meaning assigned to such term in the Investor Rights Agreement.

 

(k)          Expenses. All fees and expenses incurred in connection with this
Agreement and the transactions contemplated hereby shall be paid by the party
incurring such fees and expenses, whether or not such transactions are
consummated; provided that Parent shall pay up to $1.6 million of reasonable
out-of-pocket fees, charges and disbursements of counsel for the MHR
Stockholders, in the aggregate, incurred in connection with this Agreement, the
Merger Agreement, the other agreements and documents related thereto and the
transactions contemplated hereby and thereby.

 

(l)          Indemnification.

 

(i)          Parent (the “Indemnifying Party”) covenants and agrees, on the
terms and subject to the limitations set forth in this Agreement, to indemnify
and hold harmless MHR, each MHR Stockholder and each of their respective
Affiliates (as defined in the Investor Rights Agreement) and the officers,
members, representatives and advisors of each of the foregoing (each, an
“Indemnified Party”), from and against any and all Losses incurred in connection
with, arising out of or resulting from any claims, demands, actions, proceedings
or investigations (collectively, “Actions”) relating to the transactions
contemplated by the Merger Agreement, this Agreement, or the Exchange Agreement
(including any Actions brought by any of the stockholders, directors, officers
or employees of any of Parent or the Company relating thereto).  For purposes of
this Section 9(l), “Losses” means any loss (including disgorgement of
consideration), liability, cost, damage or expense (including, without
duplication, reasonable fees and expenses of counsel, accountants, consultants
and other experts) related to an Action for which an Indemnified Party is
entitled to indemnification pursuant to this Agreement; provided, however, that
any diminution in value of the capital stock of Parent shall not constitute a
Loss.

 

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(ii)         Notwithstanding anything herein to the contrary, the Indemnifying
Party will not be obligated to provide indemnity hereunder to any Indemnified
Party with respect to any Losses which (x) result from such Indemnified Party’s
willful misconduct or gross negligence or (y) result primarily from any breach
of any representation and warranty of such Indemnified Party contained in this
Agreement or any breach of any covenant or agreement made or to be performed by
such Indemnified Party under this Agreement.

 

(iii)        The Indemnifying Party will indemnify the Indemnified Parties
pursuant to this Section 9(l) regardless of whether such Losses are incurred
prior to or after the Effective Time.  The indemnification provided pursuant to
this Section 9(l) is in addition to, and not in derogation of, any other rights
an Indemnified Party may have under applicable law, the certificate of
incorporation or bylaws of Parent, or pursuant to any contract, agreement or
arrangement; provided, however, that Losses will not be duplicated.

 

(iv)        Promptly after the receipt by any Indemnified Party of notice of any
Action that is or may be subject to indemnification hereunder (each, an
“Indemnifiable Claim”) (and in no event more than ten Business Days after the
Indemnified Party’s receipt of written notice of such Indemnifiable Claim), such
Indemnified Party shall give written notice thereof to the Indemnifying Party,
which notice will include, to the extent known, the basis for such Indemnifiable
Claim and copies of any pleadings or written demands relating to such
Indemnifiable Claim and, promptly following request therefor, shall provide any
additional information in respect thereof that the Indemnifying Party may
reasonably request; provided, however, that (x) any delay in giving or failure
to give such notice will not affect the obligations of the Indemnifying Party
hereunder except to the extent the Indemnifying Party is actually prejudiced as
a result of such delay in or failure to notify and (y) no such notice shall be
required to be given to the Indemnifying Party to the extent that the
Indemnifying Party or any of its respective Affiliates is a party to any such
Indemnifiable Claim.

 

(v)         Subject to Section 9(l)(vi) and Section 9(l)(vii), the Indemnifying
Party shall be entitled to exercise full control of the defense, compromise or
settlement of any Indemnifiable Claim in respect of an Action commenced or made
by a Person who is not a party to this Agreement or an Affiliate of a party to
this Agreement (a “Third Party Indemnifiable Claim”) so long as, within ten
calendar days after the receipt of notice of such Third Party Indemnifiable
Claim from the Indemnified Party (pursuant to Section 9(l)(iv)), the
Indemnifying Party: (x) delivers a written confirmation to such Indemnified
Party that the indemnification provisions of Section 9(l) are applicable,
subject only to the limitations set forth in this Agreement, to such Third Party
Indemnifiable Claim and that the Indemnifying Party will indemnify such
Indemnified Party in respect of such Third Party Indemnifiable Claim to the
extent required by this Section 9(l), and (y) notifies such Indemnified Party in
writing that the Indemnifying Party will assume the control of the defense
thereof.  Following notification to such Indemnified Party of the assumption of
the defense of such Third Party Indemnifiable Claim, the Indemnifying Party
shall retain legal counsel reasonably satisfactory to such Indemnified Party to
conduct the defense of such Third Party Indemnifiable Claim.  If the
Indemnifying Party so assumes the defense of any such Third Party Indemnifiable
Claim in accordance herewith, subject to the

 

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provisions of clauses (iv) through (vi) of this Section 9(l), (A) the
Indemnifying Party shall be entitled to exercise full control of the defense,
compromise or settlement of such Third Party Indemnifiable Claim and such
Indemnified Party shall cooperate (subject to the Indemnifying Party’s agreement
to reimburse such Indemnified Party for all reasonable out-of-pocket expenses
incurred by such Indemnified Party in connection with such cooperation) with the
Indemnifying Parties in any manner that the Indemnifying Party reasonably may
request in connection with the defense, compromise or settlement thereof
(subject to the last sentence of this Section 9(l)(v)), and (B) such Indemnified
Party shall have the right to employ separate counsel selected by such
Indemnified Party and to participate in (but not control) the defense,
compromise or settlement thereof and the Indemnifying Party shall pay the
reasonable fees and expenses of one such separate counsel, and, if reasonably
necessary, one local counsel.  No Indemnified Party shall settle or compromise
or consent to entry of any judgment with respect to any such Action for which it
is entitled to indemnification without the prior written consent of the
Indemnifying Party, unless the Indemnifying Party shall have failed to assume
the defense thereof as contemplated in this Section 9(l)(v), in which case such
Indemnified Party will be entitled to control the defense, compromise or
settlement thereof at the expense of the Indemnifying Party.  Without the prior
written consent of each of the Indemnified Parties who are named in the Action
subject to the Third Party Indemnifiable Claim (which consent shall not be
unreasonably withheld, delayed or conditioned), the Indemnifying Party will not
settle or compromise or consent to the entry of judgment with respect to any
Indemnifiable Claim (or part thereof) unless such settlement, compromise or
consent (x) includes an unconditional release of such Indemnified Parties, (y)
does not include any admission of wrongdoing on the part of such Indemnified
Parties and (z) does not enjoin or restrict in any way the future actions or
conduct of such Indemnified Parties. 

 

(vi)        Notwithstanding Section ‎9(l)(v), an Indemnified Party, at the
expense of the Indemnifying Party, (x) shall, subject to the last sentence of
this Section ‎9(l)(vi), be entitled to separately control the defense,
compromise or settlement of any Third Party Indemnifiable Claim as to such
Indemnified Party if, in the judgment of counsel to the Indemnified Party, there
exists any actual conflict of interest relating to the defense of such Action
between the Indemnified Party and one or more Indemnifying Party and (y) shall
be entitled to assume control of the defense, compromise and settlement of any
Third Party Indemnifiable Claim as to which the Indemnifying Party has
previously assumed control in the event the Indemnifying Party is not timely and
diligently pursuing such defense.  No Indemnified Party shall settle or
compromise or consent to entry of any judgment with respect to any Action with
respect to which it controls the defense thereof pursuant to this Section
‎9(l)(vi) and for which it is entitled to indemnification without the prior
written consent of the Indemnifying Party, which consent shall not be
unreasonably withheld, conditioned or delayed.

 

(vii)       In all instances under this Section 9(l) where the Indemnifying
Party has agreed to pay the fees, costs and expenses of the Indemnified Parties,
such fees, costs and expenses shall be reasonable.  The parties agree to
cooperate and coordinate in connection with the defense, compromise or
settlement of any Indemnifiable Claims.

 

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(viii)      In addition to (but without duplication of) the Indemnified Party’s
right to indemnification as set forth in this Section 9(l), if so requested by
an Indemnified Party, the Indemnifying Party shall also advance to such
Indemnified Party (within five Business Days of such request) any and all
reasonable fees, costs and expenses incurred by an Indemnified Party in
accordance with this Section 9(l) in connection with investigating, defending,
being a witness in or participating in (including any appeal), or preparing to
defend, be a witness in or participate in, any Indemnifiable Claim, including,
without duplication, reasonable fees and expenses of counsel, accountants,
consultants and other experts (an “Expense Advance”).

 

(ix)         Each MHR Stockholder agrees that it will repay Expense Advances
made to it (or paid on its behalf) by the Indemnifying Party pursuant to this
Section 9(l) if it is ultimately finally determined by a court of competent
jurisdiction that it is not entitled to be indemnified pursuant to this Section
9(l).

 

(m)          Stockholder Obligation Several and Not Joint.  The obligations of
each MHR Stockholder hereunder shall be several and not joint, and no MHR
Stockholder shall be liable for any breach of the terms of this Agreement by any
other MHR Stockholder.

 

[Remainder of page left intentionally blank]

 

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IN WITNESS WHEREOF, each party has caused this Agreement to be signed by its
representative thereunto duly authorized as of the date first written above.

 

  STARZ       By: /s/ Christopher P. Albrecht   Name: Christopher P. Albrecht  
Title: Chief Executive Officer

 

[Company Signature Page to Voting Agreement]

 

 

 

 

  LIONS GATE ENTERTAINMENT CORP.       By: /s/ Wayne Levin   Name: Wayne Levin  
Title: General Counsel and Chief Strategic Officer

 

[Parent Signature Page to Voting Agreement]

 

 

 

 

  MHR Capital Partners Master Account LP       By: MHR Advisors LLC, its general
partner         By: /s/ Janet Yeung           Name: Janet Yeung            
Title:

Authorized Signatory 

 

 

MHR Capital Partners (100) LP 

      By: MHR Advisors LLC, its general partner         By: /s/ Janet Yeung    
      Name: Janet Yeung             Title: Authorized Signatory

 

  MHR Institutional Partners II LP         By: MHR Institutional Advisors II
LLC,     its general partner         By: /s/ Janet Yeung           Name: Janet
Yeung             Title: Authorized Signatory

 

[MHR Stockholders Signature Page to Voting Agreement]

 

 

 

 

  MHR Institutional Partners IIA LP           By: MHR Institutional Advisors II
LLC,     its general partner         By: /s/ Janet Yeung           Name: Janet
Yeung             Title: Authorized Signatory

 

 

MHR Institutional Partners III LP

 

  By: MHR Institutional Advisors III LLC,     its general partner           By:
/s/ Janet Yeung           Name: Janet Yeung             Title: Authorized
Signatory

 

 

[MHR Stockholders Signature Page to Voting Agreement]

 

 

 

 

Schedule A

 

Name of MHR Stockholder  Number of Subject Shares        MHR Capital Partners
(100) LP   186,617         MHR Capital Partners Master Account LP   1,396,767 
       MHR Institutional Partners II LP   1,386,275         MHR Institutional
Partners IIA LP   3,492,443         MHR Institutional Partners III LP 
 23,748,947