Exhibit 10.37


 


STANDSTILL AGREEMENT


 


This AGREEMENT (this “Agreement”) is made and entered into as of
November 19, 2009, by and among DIRECTV, a Delaware corporation (the “Company”),
on the one hand, and each of John C. Malone (“JCM”), Leslie Malone (“LM”),
The Tracy L. Neal Trust A (the “Tracy Trust”) and The Evan D. Malone
Trust A (such trust, collectively with JCM, LM and the Tracy Trust, the “Malones”
and each individually, a “Malone”), on the other hand.


 


RECITALS


 


WHEREAS, on May 4, 2009, the DIRECTV Group, Inc. (“DIRECTV”)
and Liberty Media Corporation (“Liberty Media”), announced that they,
together with certain affiliated entities, had entered into an Agreement and
Plan of Merger, dated as of May 3, 2009, as amended (the “Merger
Agreement”), to combine, subject to the terms and conditions thereof,
DIRECTV with Liberty Entertainment, Inc. (“LEI”), a wholly owned
subsidiary of Liberty Media, to form the Company;


 


WHEREAS, in connection with the transactions contemplated by the Merger
Agreement each of the Malones will, among other things, receive shares of
Holdings Class A Common Stock (as defined in the Merger Agreement);


 


WHEREAS, between May 12, 2009 and May 19, 2009, four proposed
shareholder class actions (the “Delaware Actions”) were filed in the Court
of Chancery in the State of Delaware (the “Court”) against DIRECTV,
Liberty Media, LEI and certain present and former members of the board of
directors of DIRECTV (collectively, the “Defendants”), alleging that the
Defendants breached their fiduciary duties, or aided and abetted the breach of
fiduciary duties owed by other Defendants, to DIRECTV and its unaffiliated
shareholders, in connection with the negotiation and execution of the Merger
Agreement;


 

















 


WHEREAS, on May 22, 2009, the Court consolidated the Delaware
Actions under the caption In re The DIRECTV Group
Inc., Shareholder Litig., Consolid. C.A. No. 4581-VCP
(the “Action”);


 


WHEREAS, the parties to the Action, by their respective counsel, have
entered into a certain Stipulation and Agreement of Compromise, Settlement and
Release (the “Stipulation”), dated October 16, 2009, a copy of
which is attached hereto as Exhibit A; and


 


WHEREAS, in connection with the settlement of the Action pursuant to
the Stipulation, the parties hereto have agreed that at the time of the closing
of the transactions contemplated by the Merger Agreement the Company and the
Malones will enter into this Agreement which restricts the Malones from making
certain purchases or other acquisitions of additional shares of Holdings Class A
Common Stock.


 


AGREEMENTS


 


In consideration of the foregoing and the mutual agreements and
covenants set forth herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties, intending
to be legally bound, hereby agree as follows:


 


1.   Definitions.  For purposes of this
Agreement, capitalized terms used and not defined herein will have the
respective meanings ascribed to them in the Merger Agreement. Terms defined in
the singular shall have the same meanings when used in the plural and vice
versa.


 


2.   Standstill.


 


(a)           Each Malone agrees,
severally for himself, herself or itself and not jointly with any other Malone,
that during the period commencing from and after the Merger Effective


 


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Time
and ending on the termination of this Agreement pursuant to Section 4, he,
she or it will not purchase or otherwise acquire any shares of Holdings Class A
Common Stock other than a purchase or other acquisition that is a Permitted
Acquisition. For the purposes of this Agreement, each of the following
acquisitions of shares of Holdings Class A Common Stock by a Malone will
be deemed a “Permitted Acquisition”:


 


(i)           any acquisition of shares of
Holdings Class A Common Stock from the Company pursuant to the Merger
Agreement;


 


(ii)          any acquisition of shares of
Holdings Class A Common Stock from another Malone;


 


(iii)         any acquisition of shares of
Holdings Class A Common Stock pursuant to the grant, exercise or vesting
of any equity incentive awards;


 


(iv)        any acquisition of shares of
Holdings Class A Common Stock as a result of any stock dividend, stock
split or other distribution so long as such dividend or distribution is made on
a pro rata basis to all holders of Holdings Common Stock;


 


(v)         any acquisition of shares of
Holdings Class A Common Stock pursuant to the exercise of any rights,
warrants or other securities issued or distributed to all holders of Holdings
Common Stock on a pro rata basis;


 


(vi)        any acquisition of shares of
Holdings Class A Common Stock received in exchange for shares of Holdings Class B
Common Stock so long as the aggregate voting power of the Malones,
collectively, does not increase as a result of such exchange;


 


(vii)       any acquisition of shares of
Holdings Class A Common Stock upon the redemption of shares of Holdings Class B
Common Stock following the death 


 


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of JCM in accordance with the provisions of the certificate of incorporation
of the Company, as amended in accordance with Section 1.5(c) of the
Merger Agreement; and


 


(viii)      commencing on the first
anniversary of the Split-Off Effective Time, any acquisition of shares of
Holdings Class A Common Stock (in open market transactions or otherwise)
in an amount not to exceed a number of shares equal to 1.0% of the number of
shares of Holdings Common Stock outstanding (on a fully diluted basis)
immediately following the Merger Effective Time (with such number of shares to
be subject to adjustment to reflect the effects of stock splits, reverse
splits, stock dividends and similar events occurring after the Merger Effective
Time); provided, that the Malones will not acquire more than 50% of the
number of shares permitted to be acquired pursuant to this clause (viii) prior
to the second anniversary of the Split-Off Effective Time; and provided,
further, that shares acquired by any Malone pursuant to clauses (i) through
(vii) above will not be counted against acquisitions permitted pursuant to
this clause (viii).


 


3.             Representations
and Warranties.  The Company, on
the one hand, and each of the Malones, severally and not jointly, on the other
hand, hereby represents and warrants to the other as follows:


 


(a)           Such party has the legal right
and all requisite power and authority to make and enter into this Agreement and
to perform his, her or its obligations hereunder and comply with the provisions
hereof. If such party is other than a natural person, the execution, delivery
and performance of this Agreement by such party has been duly authorized by all
necessary corporate, trust or other action on its part. This Agreement has been
duly executed and delivered by such party and constitutes the valid and binding
obligation of such party enforceable


 


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against
him, her or it in accordance with its terms except as enforcement may be
limited by bankruptcy, insolvency, moratorium or other similar laws affecting
the rights of creditors generally and except that the availability of equitable
remedies, including specific performance, is subject to the discretion of the
court before which any proceeding therefor may be brought;


 


(b)           The execution, delivery and
performance of this Agreement by such party, and the compliance by such party
with the provisions hereof, do not and will not (with or without notice or
lapse of time, or both) conflict with, or result in any violation of, or
default under, or give rise to any right of termination, cancellation or acceleration
of any obligation or to loss of a material benefit under, any loan or credit
agreement, note, bond, mortgage, indenture, lease or other agreement,
instrument, permit, concession, franchise, license, judgment, order, decree,
statute, law, ordinance, rule or regulation applicable to such party or
any of his, her or its properties or assets, other than any such conflicts,
violations, defaults, or other effects which, individually or in the aggregate,
do not and will not prevent, restrict or impede such party’s performance of
his, her or its obligations under and compliance with the provisions of this
Agreement. If such party is other than a natural person, the execution,
delivery and performance of and compliance with this Agreement by it does not and
will not contravene its certificate of incorporation, by-laws, trust agreement
or other organizational document currently in effect or, in the case of the
Company, those contemplated by the Merger Agreement to be in effect after the
Closing; and


 


(c)           No consent, approval, order
or authorization of, or registration, declaration or filing with, any
governmental or regulatory authority or any other person is required by such
party in connection with the execution, delivery or performance of this
Agreement by such party, other than as may be required under applicable Federal
and state securities laws.


 


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4.             Termination.


 


(a)           This Agreement will continue
in full force and effect until the earliest to occur of (i) such time as
the Malones in the aggregate do not own shares of Holdings Class B Common
Stock entitling them to vote at least 10% of the combined voting power of the
Holdings Class A Common Stock and the Holdings Class B Common Stock; (ii) 5 p.m.
Eastern Time on the Business Day immediately preceding the third anniversary of
the Mergers; (iii) the death of JCM and (iv) June 30, 2010 in
the event the Effective Date (as such term is defined in the Stipulation) has
not occurred prior to such date.


 


(b)           Upon the termination or
expiration of this Agreement as provided herein, all of the covenants and
agreements set forth in this Agreement applicable to any party shall terminate
and be of no further force and effect.


 


5.             Miscellaneous.


 


(a)           Remedies.  The parties agree that
irreparable damage would occur 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 an injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions of this Agreement.


 


(b)           Expenses.  Except as otherwise expressly provided in
this Agreement, all costs and expenses incurred in connection with the
transactions contemplated by this Agreement shall be paid by the party
incurring such costs and expenses.


 


(c)           Governing Law.  This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware.


 


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(d)           Jurisdiction.          All actions and proceedings arising
out of or relating to this Agreement shall be heard and determined in the Court
of Chancery of the State of Delaware, or, if the Court of Chancery lacks
subject matter jurisdiction, in any federal court sitting in the State of
Delaware, and the parties hereto hereby irrevocably submit to the exclusive
jurisdiction of such courts (and, in the case of appeals, appropriate appellate
courts therefrom) in any such action or proceeding and irrevocably waive the
defense of an inconvenient forum to the maintenance of any such action or
proceeding. The consents to jurisdiction set forth in this paragraph shall not
constitute general consents to service of process in the State of Delaware and
shall have no effect for any purpose except as provided in this paragraph and
shall not be deemed to confer rights on any Person other than the parties
hereto. The parties hereto agree that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by applicable Law. EACH OF
THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHTS TO TRIAL BY
JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT.


 


(e)           Assignment; Successors.   Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned or delegated in whole or
in part, by operation of Law, or otherwise, by any of the parties without the
prior written consent of the other parties. Subject to the preceding sentence,
this Agreement shall inure to the benefit of, and be enforceable by, a
successor to the Company only in the event that (i) such successor entity
results from a merger involving the Company, (ii) the stockholders of the
Company immediately prior to any such merger are the sole stockholders of such
successor immediately after such merger, and (iii) the rights, privileges
and preferences of the respective classes of common stock


 


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received by holders of
Holdings Class A Common Stock and Holdings Class B Common Stock in
such merger are, in all material respects, the same as the rights, privileges
and preferences of the Holdings Class A Common Stock and Holdings Class B
Common Stock, respectively, held by such persons immediately prior to such
merger.


 


(f)            Descriptive Headings.         Headings of Sections and subsections of
this Agreement are for convenience of the parties only, and shall be given no
substantive or interpretive effect whatsoever.


 


(g)           Entire Agreement; No Third-Party
Beneficiaries.           This
Agreement constitutes the entire agreement among the parties, and supersedes
all other prior agreements and understandings, both written and oral, among the
parties, or any of them, with respect to the subject matter hereof and thereof;
provided, that nothing herein will be deemed to affect the validity of
or the obligations of the parties under the Voting and Right of First Refusal
Agreement, dated as of May 3, 2009, as amended, by and among LEI, DIRECTV,
the Company and each of the Malones. Nothing in this Agreement shall be
construed as giving any person, other than the parties hereto and as provided
in Section 5(e) any right, remedy or claim under or in respect of
this Agreement or any provision hereof.


 


(h)           Notices. All notices, requests and other communications
to any party hereunder shall be in writing and shall be deemed given if
delivered personally, facsimiled (which is confirmed) or sent by overnight
courier (providing proof of delivery) to the parties at the following
addresses:


 


If
to any Malone, to:


 


John
C. Malone or Leslie A. Malone

c/o Liberty Media Corporation

12300 Liberty Boulevard

Englewood, CO 80112

Facsimile: (720) 875-5401


 


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


 


Baker
Botts L.L.P.


30
Rockefeller Plaza


New
York, NY 10112


Attention:
Frederick H. McGrath


Facsimile:
(212) 259-2530


 


If
to the Company to:


 


The
DIRECTV Group, Inc.


2230
East Imperial Highway


El
Segundo, CA 90245


Attention:
Larry D. Hunter


General
Counsel


Facsimile:
(310) 964-0838


 


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


 


Weil,
Gotshal & Manges LLP


767
Fifth Avenue


New
York, NY 10153


Attention:
Frederick S. Green


Michael
E. Lubowitz


Facsimile:
(212) 310-8007


 


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


 


Simpson
Thacher & Bartlett LLP


425
Lexington Avenue


New
York, NY 10017


Attention:
Richard I. Beattie


Marni
J. Lerner


Kathryn
King Sudol


Facsimile:
(212) 455-2502


 


or such other address or
facsimile number as such party may hereafter specify by like notice to the
other parties hereto. All such notices, requests and other communications shall
be deemed received on the date of receipt by the recipient thereof if received
prior to 5 p.m. in the place of receipt and such day is a business day in
the place of receipt. Otherwise, any such notice, request or communication
shall be deemed not to have been received until the next succeeding business
day in the place of receipt.


 


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(i)            Amendments and Waivers.  The
provisions of this Agreement, including the provisions of this sentence, may
not be amended or modified, unless (i) approved in writing by (A) each
of the Malones and (B) the Company, and (ii) approved by either (A) the
board of directors of the Company (including the unanimous approval of the
Qualifying Directors (as such term is defined in the by-laws of the Company
attached as Exhibit A-2 to the Merger Agreement)) or (B) the holders
of a majority of the outstanding shares of the Holdings Class A Common
Stock (other than any such shares held by the Malones).


 


(j)            No Implied Waivers.  No
action taken pursuant to this Agreement, including any investigation by or on behalf
of any party, shall be deemed to constitute a waiver by the party taking such
action of compliance with any representations, warranties, covenants or
agreements contained herein or made pursuant hereto. The waiver by any party
hereto of a breach of any provision of this Agreement shall not operate or be
construed as a waiver of any preceding or succeeding breach and no failure by
any party to exercise any right or privilege hereunder shall be deemed a waiver
of such party’s rights or privileges hereunder or shall be deemed a waiver of
such party’s rights to exercise the same at any subsequent time or times
hereunder.


 


(k)           Interpretation.  When
a reference is made in this Agreement to a Section, Exhibit or Schedule,
such reference shall be to a Section of, or an Exhibit or 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 used in this Agreement, they shall be deemed to be followed
by the words “without limitation”. The words


 


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“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 this Agreement.


 


(l)            Counterparts. This Agreement
may be executed in counterparts (each of which shall be deemed to be an
original but all of which taken together shall constitute 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.


 


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IN WITNESS WHEREOF, the
parties hereto have executed this Agreement as of the date first set forth
above.


 


	
   

  	
  DIRECTV

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Larry D. Hunter

  
	
   

  	
   

  	
  Name: Larry D. Hunter

  
	
   

  	
   

  	
  Title: Executive Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  JOHN C. MALONE, individually

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  LESLIE MALONE, individually

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  TRACY L. NEAL TRUST A

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  EVAN D. MALONE TRUST A

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 

















 


IN WITNESS WHEREOF, the parties hereto have executed this Agreement as  of
the date first set forth above.


 


	
   

  	
  DIRECTV

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ John C. Malone

  
	
   

  	
   

  	
  JOHN C. MALONE, individually

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ Leslie Malone

  
	
   

  	
   

  	
  LESLIE MALONE, individually

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  TRACY L. NEAL TRUST A

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David Thomas III

  
	
   

  	
   

  	
  Name: David Thomas III

  
	
   

  	
   

  	
  Title: Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  EVAN D. MALONE TRUST A

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David Thomas III

  
	
   

  	
   

  	
  Name: David Thomas III

  
	
   

  	
   

  	
  Title: Trustee