Document:

Exhibit 10.11

 

AGREED FORM

 

ASSIGNMENT AND ASSUMPTION OF STOCKHOLDERS AGREEMENT

 

This Assignment and Assumption of Stockholders Agreement (this “Assignment”) is made as of [·] by and among Liberty Expedia Holdings, Inc., a Delaware corporation (“Spinco”), LEXE Marginco, LLC, a Delaware limited liability company and a wholly-owned subsidiary of Spinco (“Marginco”), [Liberty Sub, a Delaware [·] and a wholly-owned subsidiary of Spinco] (“[Sub]”, and together with Spinco and Marginco, the “Assignees”), Liberty Interactive Corporation, a Delaware corporation (“Liberty”), and Barry Diller, an individual (“Diller”).  Capitalized terms used and not otherwise defined herein have the meanings given such terms in the Stockholders Agreement (as defined below).

 

W I T N E S S E T H :

 

WHEREAS, Diller and Liberty are parties to that certain Amended and Restated Stockholders Agreement, dated as of December 20, 2011 (the “Stockholders Agreement”), and Diller, Liberty and Expedia, Inc., a Delaware corporation (“Expedia”), are parties to that certain Amended and Restated Governance Agreement, dated as of December 20, 2011 (the “Governance Agreement”);

 

WHEREAS, Liberty has determined to engage in the Spin-Off (as defined in the Transaction Agreement, dated as of March 24, 2016, by and among Liberty, Spinco, Diller, John C. Malone, an individual , and Leslie Malone, an individual (the “Transaction Agreement”)) which Liberty has represented will constitute a Distribution Transaction involving a Qualified Distribution Transferee (as such terms are defined in the Governance Agreement);

 

WHEREAS, the parties desire, in accordance with Section 5.1 of the Stockholders Agreement, to effect the assignment by Liberty and assumption by Spinco of Liberty’s rights, benefits and obligations under the Stockholders Agreement in connection with the Spin-Off and to provide for the other Assignees to become parties to the Stockholders Agreement as so assigned;

 

WHEREAS, on or prior to the date hereof, Liberty and Diller will execute a letter agreement in the form of Exhibit A to the Stockholders Agreement; and

 

WHEREAS, on or prior to the date hereof, pursuant to Section 5.01(b)(ii) of the Governance Agreement, the Executive Committee of the Board of Expedia has adopted the resolution set forth on Exhibit J to the Transaction Agreement.

 

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

 

1.                                      Representations and Warranties of Diller.  Diller represents and warrants to Liberty and Assignees that:

 

a.                                      he has the power and authority to enter into this Assignment and to carry out his obligations hereunder and under the Stockholders Agreement;

 

 

b.                                      the execution, delivery and performance of this Assignment by Diller has been duly authorized by all necessary action on the part of Diller and no other actions on the part of Diller are necessary to authorize this Assignment or the matters contemplated hereby or by the Stockholders Agreement;

 

c.                                       this Assignment has been duly executed and delivered by Diller and constitutes a valid and binding obligation of Diller, and, assuming this Assignment constitutes a valid and binding obligation of Liberty and Assignees, is enforceable against Diller in accordance with its terms; and

 

d.                                      the execution and delivery of this Assignment by Diller, and the performance of his obligations hereunder and under the Stockholders Agreement, do not constitute a breach or violation of, or conflict with, any material agreement to which Diller is a party.

 

2.                                      Representations and Warranties of Liberty.  Liberty represents and warrants to Diller that:

 

a.                                      Liberty is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and has the corporate power and authority to enter into this Assignment and to carry out its obligations hereunder and under the Stockholders Agreement;

 

b.                                      the execution, delivery and performance of this Assignment by Liberty has been duly authorized by all necessary corporate action on the part of Liberty and no other corporate proceedings on the part of Liberty are necessary to authorize this Assignment or the matters contemplated hereby or by the Stockholders Agreement;

 

c.                                       this Assignment has been duly executed and delivered by Liberty and constitutes a valid and binding obligation of Liberty, and, assuming this Assignment constitutes a valid and binding obligation of Diller, is enforceable against Liberty in accordance with its terms;

 

d.                                      the execution and delivery of the Assignment by Liberty and the performance of its obligations hereunder and under the Stockholders Agreement, do not constitute a breach or violation of, or conflict with, Liberty’s restated certificate of incorporation, as amended, or amended and restated bylaws;

 

e.                                       this Assignment is being entered into in connection with the Spin-Off, which constitutes a Distribution Transaction involving Spinco, the Liberty Spinco and Qualified Distribution Transferee, and its wholly-owned subsidiaries [Sub] and Marginco, pursuant to Section 5.01 of the Governance Agreement; and

 

f.                                        in connection with the Spin-Off, Liberty has contributed all Company Common Shares Beneficially Owned by it to Spinco, which has in turn contributed such shares to Marginco and [Sub].

 

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3.                                      Representations and Warranties of Assignees and Liberty.  Assignees and Liberty each represent and warrant to Diller that:

 

a.                                      each Assignee is duly organized, validly existing and in good standing under the laws of the State of Delaware and has the requisite corporate or other power and authority to enter into this Assignment and to carry out its obligations hereunder and, following the Spin-Off, under the Stockholders Agreement;

 

b.                                      the execution, delivery and performance of this Assignment by each Assignee has been duly authorized by all necessary corporate or other action on the part of each Assignee and no other corporate proceedings on the part of any Assignee are necessary to authorize this Assignment or the matters contemplated hereby or by the Stockholders Agreement;

 

c.                                       this Assignment has been duly executed and delivered by each Assignee and constitutes a valid and binding obligation of each Assignee, and, assuming this Assignment constitutes a valid and binding obligation of Diller, is enforceable against each Assignee in accordance with its terms; and

 

d.                                      the execution and delivery of this Assignment by Assignees, and, following the Spin-Off, the performance by the Assignees of their obligations hereunder and under the Stockholders Agreement, do not constitute a breach or violation of, or conflict with, any Assignee’s organizational documents.

 

4.                                      Assignment and Assumption, Certain Acknowledgements and Agreements.

 

a.                                      Effective immediately prior to the Spin-Off (but subject to the consummation of the Spin-Off):

 

i.    Liberty assigns all of its and the Liberty Stockholder Group’s rights and obligations under the Stockholders Agreement to Spinco;

 

ii.   Spinco accepts such assignment of rights hereunder and assumes and agrees to perform all liabilities and obligations of Liberty and the Liberty Stockholder Group under the Stockholders Agreement to be performed following the effective time of the Spin-Off, including the obligation to ensure the compliance of the Spinco Stockholder Group with all obligations of the Liberty Stockholder Group under the Stockholders Agreement;

 

iii.  Spinco is substituted for Liberty as “Spinco” (and the stockholder group of Spinco is substituted for the Liberty Stockholder Group) for all purposes under the Stockholders Agreement and upon the Spin-Off, all references in the Stockholders Agreement to “Liberty” will be deemed to refer to Spinco, and references to the “Liberty Stockholder Group” will be deemed to refer to the “Spinco Stockholder Group,” meaning the stockholder group

 

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composed of those Subsidiaries of Spinco, that, from time to time, hold Equity of Expedia; and

 

iv.  Marginco and [Sub] acknowledge and agree that they are members of the Spinco Stockholder Group at the effective time of the Spin-Off.

 

b.                                      Liberty acknowledges that it shall not be entitled to any benefits under the Stockholders Agreement following the Spin-Off.

 

c.                                       In connection with the Transfer of Common Shares to Marginco and [Sub] in connection with the Spin-Off, Liberty and Diller will execute a letter agreement in the form of Exhibit A to the Stockholders Agreement.

 

d.                                      The parties hereto agree that Section 4.1(a)(vi) of the Stockholders Agreement shall hereby be amended and restated in its entirety to read as follows:

 

“(vi) a pledge or grant of a security interest in Common Stock to secure bona fide indebtedness and any related Transfers of Common Stock including to a secured party at a foreclosure sale or similar liquidation sale or by deed, transfer, assignment or other conveyance in-lieu of foreclosure or otherwise in connection with the enforcement of any such lien on, pledge of or security interest in the Common Stock (any such event, a “Foreclosure Event”) and provided that the terms of such indebtedness and security interest shall permit the Spinco Stockholder Group to exercise voting rights and to take consensual action with respect to the Common Stock so securing such indebtedness prior to a Foreclosure Event, and”

 

e.                                       Pursuant to Section 6.12 of the Stockholders Agreement, effective upon the completion of the Spin-Off, the address for all notices, requests and other communications to Assignees pursuant to the Stockholders Agreement will be:

 

Liberty Expedia Holdings, Inc.

12300 Liberty Boulevard

Englewood, CO 80112

Attention: Richard N. Baer, Chief Legal Officer

Facsimile:

 

5.                                      Miscellaneous.

 

a.                                      From and after the execution and delivery of this Assignment, the Stockholders Agreement shall be deemed to be assigned and assumed as herein provided (it being understood that no assignment, assumption or substitution hereunder shall be effective until immediately prior to the Spin-Off (and subject to the consummation of the Spin-Off)), and the Stockholders Agreement shall continue in full force and effect and is hereby ratified and confirmed.

 

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b.                                      This Assignment may be amended, modified and supplemented, and any of the provisions contained herein may be waived, only by a written instrument signed by the parties hereto or their successors and permitted assigns; provided, however, that following the Spin-Off, Liberty’s execution of such amendment, modification or supplement will not be required for the effectiveness thereof, except to the extent such amendment, modification or supplement would have, or would reasonably be expected to have, an adverse effect upon Liberty.

 

c.                                       Neither this Assignment nor any of the rights, interests or obligations under this Assignment will be assigned, in whole or in part, by any party hereto without the prior written consent of the other parties hereto; provided, however, that following the Spin-Off, Liberty’s consent will not be required for such assignment, except to the extent such assignment would have, or would reasonably be expected to have, an adverse effect upon Liberty.  Any purported assignment without such prior written consent will be void.  Subject to the preceding sentences, this Assignment will be binding upon, inure to the benefit of, and be enforceable by, the parties and their respective successors and assigns.  This Assignment shall not confer any rights or remedies upon any Person other than the parties to this Assignment and their respective successors and permitted assigns.

 

d.                                      This Assignment sets forth the entire agreement and understanding between the parties as to the subject matter hereof and merges and supersedes all prior representations, agreements and understandings, written or oral, of any and every nature among them, other than as set forth in the Stockholders Agreement.

 

e.                                       This Assignment shall be governed by and construed in accordance with the Laws of the State of Delaware, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of Delaware or any other jurisdiction) that would cause the application of the Law of any jurisdiction other than the State of Delaware.

 

f.                                        The headings in this Assignment are for convenience of reference only and shall not constitute a part of this Assignment, nor shall they affect its meaning, construction or effect.

 

g.                                       This Assignment may be executed via facsimile or .pdf and in any number of counterparts, each of which shall be deemed to be an original instrument and all of which together shall constitute one and the same instrument.

 

[Signature Page Follows]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Assignment to be duly executed by their respective authorized officers and made effective as of the day and year first above written.

 

 

	
 
    	
LIBERTY EXPEDIA HOLDINGS, INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    
	
 
    	
LEXE MARGINCO, LLC
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    
	
 
    	
[SUB]
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    
	
 
    	
LIBERTY INTERACTIVE CORPORATION
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
BARRY DILLER
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    

 

[Signature Page to Assignment and Assumption of Stockholders Agreement]Exhibit 10.12

 

AGREED FORM

 

AMENDMENT NO. 1 TO STOCKHOLDERS AGREEMENT

 

This Amendment No. 1 to Stockholders Agreement, dated as of [  ], (this “Amendment”), is by and between Barry Diller (“Diller”), for himself and on behalf of the members of the Diller Stockholder Group, and Liberty Expedia Holdings, Inc., a Delaware corporation (“Spinco”), for itself and on behalf of the members of the Spinco Stockholder Group, and amends that certain Amended and Restated Stockholders Agreement, dated as of December 20, 2011 (the “Original Stockholders Agreement”), as amended by the Stockholders Agreement Assignment (as defined below) (the “Assigned Stockholders Agreement”).  Capitalized terms used but not defined herein have the meanings ascribed to such terms in the Assigned Stockholders Agreement.

 

WHEREAS, Liberty has determined to engage in the Spin-Off (as defined in the Transaction Agreement);

 

WHEREAS, in connection with the Spin-Off, Liberty, Spinco, Diller, and the Malone Group have previously entered into a transaction agreement (the “Transaction Agreement”), dated as of March 24, 2016, pursuant to which the parties thereto agreed to enter into or effect the Transaction Instruments in connection with the Spin-Off and the other matters contemplated by the Transaction Agreement.

 

WHEREAS, in connection with and subject to the completion of the Spin-Off, and in accordance with the terms of the Transaction Agreement, immediately prior to the execution of this Amendment, (i) Diller, Spinco and Liberty entered into an Assignment and Assumption of Governance Agreement with the Company (the “Governance Agreement Assignment”), pursuant to which, in accordance with Section 5.01 of the Governance Agreement, all rights and obligations of Liberty under the Governance Agreement, were assigned to Spinco and Spinco assumed such rights and obligations and (ii) Liberty, Diller and Spinco entered into an Assignment and Assumption of Stockholders Agreement (the “Stockholders Agreement Assignment”), pursuant to which, in accordance with Section 5.1 of the Stockholders Agreement, all rights and obligations of Liberty under the Stockholders Agreement were assigned to Spinco and Spinco assumed such rights and obligations.

 

WHEREAS, in connection with and subject to the completion of the Spin-Off, and in accordance with the terms of the Transaction Agreement, immediately prior to the execution of this Amendment, (i) Diller, John C. Malone (“Malone”) and Leslie Malone (“Mrs. Malone” and together with Malone, the “Malone Group”) will enter into a Proxy and Voting Agreement (the “Malone Proxy”), pursuant to which the Malone Group will grant an irrevocable proxy to Diller to vote, subject to certain limitations, all Covered Shares (as defined therein), and (ii) Diller and Spinco will enter into an Assignment Agreement (the “Diller Assignment”) pursuant to which Diller will until the Proxy Swap Termination Date irrevocably assign to Spinco the Liberty Proxy (as defined in the Original Stockholders Agreement) (as assigned to and assumed by Spinco pursuant to the Stockholders Agreement Assignment); and

 

WHEREAS, Spinco and Diller are entering into this Amendment to provide for certain waivers under the Stockholders Agreement and agreements relating to the voting of

 

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Common Shares beneficially owned by such parties or with respect to which they have the power to vote.

 

NOW, THEREFORE, in consideration of the foregoing and the covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:

 

1.                                      CERTAIN DEFINITIONS.

 

As used in this Amendment, the following terms have the respective meanings set forth below, and, to the extent any such term has not heretofore been defined in Section 1.1 of the Assigned Stockholders Agreement, then Section 1.1 of the Assigned Stockholders Agreement is deemed amended by adding such terms in their respective alphabetical order position, or, in the event any such term is already defined in Section 1.1 of the Assigned Stockholders Agreement, then the meaning of such term is amended and restated as follows, with such amendments and deemed amendments to be applicable only during the Assignment Period in accordance with Section 6 of this Agreement.

 

“Affiliate” means, with respect to any Person, any other Person that directly, or indirectly through one or more intermediaries controls is controlled by or is under common control with such specified Person, for so long as such Person remains so affiliated to the specified Person. For purposes of this definition, (i) natural persons shall not be deemed to be Affiliates of each other, (ii) no member of the Malone Group shall be deemed to be an Affiliate of Liberty, Spinco, the Company or Diller, (iii) none of Liberty, Spinco, the Company or Diller shall be deemed to be an Affiliate of any of such other persons, (iv) none of Liberty Media Corporation, Liberty Broadband Corporation, Liberty TripAdvisor Holdings, Inc., Discovery Communications Inc., Starz, CommerceHub, Inc. or Liberty Global plc and, following the Spin-Off, Liberty, shall be deemed to be an Affiliate of Spinco or any member of the Malone Group and (v) IAC/InterActiveCorp shall not be deemed to be an Affiliate of the Company or Diller.

 

“Amendment” has the meaning set forth in the Preamble.

 

“Assigned Stockholders Agreement” has the meaning set forth in the Preamble.

 

“Assignment Period” means the period from the Effective Time to the Proxy Swap Termination Date.

 

“Certificate” means the Amended and Restated Certificate of Incorporation of Spinco, as in effect at the Effective Time (as the same may be amended from time to time).

 

“Chairman Termination Date” means the later of (i) such time as Diller no longer serves as Chairman and (ii) such time as Diller no longer holds the Spinco Proxy (other than suspension of such proxy pursuant to Section 3.3(e) of the Assigned Stockholders Agreement or pursuant to the terms of the Diller Assignment).

 

“Diller” has the meaning set forth in the Preamble.

 

“Diller Assignment” has the meaning set forth in the Recitals.

 

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“Effective Time” means the time at which shares of Series A common stock and Series B common stock, in each case, of Spinco are distributed in the Spin-Off as a dividend to the holders of Liberty’s Series A Liberty Ventures common stock and Series B Liberty Ventures common stock.

 

“Expedia Reimbursement Agreement” means that certain reimbursement agreement among Liberty, Spinco and Expedia, dated as of March 24, 2016.

 

“Interim Amendments” means the amendments to the Assigned Stockholders Agreement set forth in Sections 1 and 2 of this Amendment.

 

“Governance Agreement Assignment” has the meaning set forth in the Recitals.

 

“Letter Agreement” means that certain letter agreement from Diller to Liberty, to be delivered in connection with the Spin-Off pursuant to the Stockholders Agreement.

 

“Malone” has the meaning set forth in the Recitals.

 

“Malone Group” has the meaning set forth in the Recitals.

 

“Malone Proxy” has the meaning set forth in the Recitals.

 

“Mrs. Malone” has the meaning set forth in the Recitals.

 

“NASDAQ” means The Nasdaq Global Select Market.

 

“Original Stockholders Agreement” has the meaning set forth in the Preamble.

 

“Proxy Swap Certificate and Bylaw Provisions” has the meaning assigned to it in the Transaction Agreement.

 

“Proxy Swap Termination Date” has the meaning assigned to it in the Transaction Agreement.

 

“Specified Corporate Action” means any of the following actions proposed for approval by the Company’s stockholders (whether by vote or written consent): (i) any recapitalization, reclassification or other change in the existing capital structure of the Company or the voluntary commencement of any liquidation, dissolution or winding up of the Company, (ii) any merger or other business combination involving the Company or its Subsidiaries (other than solely among Subsidiaries of the Company) or any sale of all or substantially all of the Company’s assets, (iii) the creation of any new class or series of the Company’s Capital Stock or the issuance (other than pursuant to options, warrants or other rights outstanding at the Effective Time) of Common Shares (including to the extent stockholder approval is required for NASDAQ purposes); (iv) any amendment to the Company’s certificate of incorporation or bylaws as then in effect; and (v) any removal of a Director from the Board (other than (x) the Spinco Directors elected pursuant to the Governance Agreement, as amended by the Governance Agreement Assignment, or (y) for Cause).

 

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“Spinco” has the meaning set forth in the Preamble.

 

“Spinco Board” means the board of directors of Spinco.

 

“Spinco Bylaws” means the amended and restated bylaws of Spinco as in effect at the Effective Time, as the same may be amended from time to time in compliance with the Certificate and such bylaws.

 

“Spinco Director” has the meaning set forth in the Governance Agreement, as amended by the Governance Agreement Assignment.

 

“Spin-Off” has the meaning set forth in the Recitals.

 

“Stockholders Agreement” means the Original Stockholders Agreement, as amended by the Stockholders Agreement Assignment and as further amended by this Amendment.

 

“Stockholders Agreement Assignment” has the meaning set forth in the Recitals.

 

“Subject Instruments” means the Diller Assignment, the Malone Proxy, the Transaction Agreement, this Amendment and the Proxy Swap Certificate and Bylaw Provisions.

 

“Subject Waivers” has the meaning set forth in Section 3(a).

 

“Transaction Agreement” has the meaning set forth in the Recitals.

 

“Transaction Instruments” means this Amendment, the Certificate, the Spinco Bylaws, the Malone Proxy, the Diller Assignment, the Stockholders Agreement, the Stockholders Agreement Assignment, the Governance Agreement, the Governance Agreement Assignment, the Letter Agreement, the Transaction Agreement and the other agreements contemplated by the matters contemplated hereby and thereby.

 

2.                                      ADDITIONAL AMENDMENTS.

 

(a)                                 Subject to Section 6 of this Agreement and paragraph (d) of this Section 2, Section 3.1(a) of the Assigned Stockholders Agreement is amended and restated in its entirety to read as follows:

 

“(a)                           In the event that Section 2.03 of the Governance Agreement is applicable, in connection with any vote or action by written consent of the stockholders of the Company relating to any matter that constitutes a Contingent Matter, Spinco and Diller agree (and each agrees to cause each member of its Stockholder Group, if applicable), with respect to any Common Shares with respect to which it or he has the power to vote (whether by proxy or otherwise), (x) to vote against (and not act by written consent to approve) such Contingent Matter unless Spinco and Diller (or, if the consent of one but not both Stockholders is required pursuant to the Governance Agreement, the Stockholder whose consent is then required) have consented to such Contingent Matter in

 

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accordance with the provisions of the Governance Agreement and, if applicable, this Agreement and (y) to take or cause to be taken all other reasonable actions required, to the extent permitted by law, to prevent the taking of any action by the Company with respect to a Contingent Matter without the consent of Spinco and/or Diller (as applicable).”

 

(b)                                 Subject to Section 6 of this Agreement and paragraph (d) of this Section 2, Section 3.1(b) of the Assigned Stockholders Agreement is amended and restated in its entirety to read as follows:

 

“(b)                           The Spinco Board will select those persons who are to serve as the Spinco Directors to stand for election to the Board pursuant to the Certificate.  Each Stockholder agrees to vote (and cause each member of its or his Stockholder Group to vote, if applicable), or act by written consent with respect to, any Common Shares with respect to which it or he has the power to vote (whether by proxy or otherwise) in favor of each of the nominees for a Spinco Director as selected by the Spinco Board pursuant this Section 3.1(b) and which Spinco has a right to designate pursuant to the Governance Agreement, subject, however, to the terms of the Transaction Agreement.  With respect to any election of Directors by action of the stockholders of the Company, Spinco will vote (or refrain from voting), or act (or not act) by written consent with respect to, any Common Shares as to which it has the power to vote (whether by proxy or otherwise) as directed by the Spinco Board pursuant to the Certificate and in accordance with the Transaction Agreement.  Subject to the election of Diller as a Director, Spinco will use its reasonable best efforts to cause Diller to be elected and continue to serve as Chairman.  For the avoidance of doubt, Diller will not be deemed to be a Spinco Director for purposes of the Governance Agreement.”

 

(c)                                  Subject to Section 6 of this Agreement and paragraph (d) of this Section 2, Section 3.1 of the Assigned Stockholders Agreement is amended by adding the following subsections (e), (f), and (g) at the end thereof:

 

“(e)                            Subject to Section 3.1(a), with respect to any matter to be presented for approval at any stockholders meeting of the Company, prior to any vote of the Company’s stockholders, Spinco and Diller (or their respective representatives) will meet and use their respective reasonable best efforts to agree on a common position for such matters to be presented for approval and, if they agree on such a common position, each Stockholder will vote all of its Common Shares (and any Common Shares with respect to which it has the power to vote (whether by proxy or otherwise)) as so agreed; provided, however, that notwithstanding the foregoing, with respect to any vote to elect Directors of the Company, Spinco will vote all Common Shares in accordance with Article V, Section C of the Certificate.  If Spinco and Diller are unable to agree on such a common position with respect to any matter other than a Specified Corporate Action, each may vote their respective Common Shares with respect to which it or he has the power to vote (whether by proxy or otherwise) as each may determine

 

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in its or his sole discretion, subject to Section 3.1(a) and any restrictions set forth in the Governance Agreement or this Agreement.”

 

“(f)                             Without Diller’s prior written consent, Spinco shall not execute any written consent in connection with any action proposed to be taken by written consent of the Company’s stockholders.”

 

“(g)                            In the event a Specified Corporate Action is to be presented for approval by the Company’s stockholders at any meeting of the Company’s stockholders or pursuant to a written consent of the Company’s stockholders, unless Spinco and Diller agree pursuant to Section 3.1(e) (each in its sole discretion) as to the manner in which their respective Common Shares (and any Common Shares with respect to which it or he has the power to vote (whether by proxy or otherwise)) will be voted on any such Specified Corporate Action, then Spinco and Diller will vote all of their respective Common Shares (and any Common Shares with respect to which it or he has the power to vote (whether by proxy or otherwise)) against the approval of such Specified Corporate Action.  Notwithstanding the foregoing, with respect to any proposal to be presented for approval by the Company’s stockholders at any meeting of the Company’s stockholders regarding a merger, share exchange, tender offer or other business combination in which a third party, other than Spinco, an Affiliate of Diller or any Person in which Diller has a direct or indirect financial interest (including, for this purpose, IAC), is proposing to acquire the Company, any of its Subsidiaries or all or substantially all of its or their assets, if (x) Spinco and Diller are unable to agree as to how their respective Common Shares are to be voted pursuant to Section 3.1(e), (y) Diller has expressed in writing his intention to vote in favor of such transaction and he commits in writing to vote in favor of such transaction and (z) such transaction has been recommended by the Board (or a committee thereof), then Spinco will vote all of its Common Shares (and any Common Shares with respect to which it has the power to vote (whether by proxy or otherwise)) in favor of such transaction (or transaction agreement, if applicable); provided, that if the Spinco Board determines, by the affirmative vote of 70% or more of the entire Board (as defined in the Certificate) that Spinco should vote all such Common Shares against such transaction (or transaction agreement), then Spinco will vote all of its Common Shares (and any Common Shares with respect to which it has the power to vote (whether by proxy or otherwise)) against such transaction.”

 

(d)                                 (i) The amended and restated provisions referred to in paragraphs (a) and (b) of this Section 2 will be effective only during the Assignment Period and, upon the Interim Amendments ceasing to be effective in accordance with Section 6 hereof, the text of such provisions will revert back to the provisions as set forth in the Assigned Stockholders Agreement, and (ii) the additional provisions added to Section 3.1 of the Assigned Stockholders Agreement pursuant to paragraph (c) of this Section 2 will be effective only during the Assignment Period and, upon the Interim Amendments ceasing to be effective in accordance with Section 6 hereof, such provisions will be deleted and cease to have any force or effect after such time except as provided in such Section 6; provided, that all such amended and restated

 

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provisions and additional provisions shall be suspended during any period of deemed suspension of the Diller Assignment and the Malone Proxy described in clause (iv) of  Section 15(b) of the Transaction Agreement.

 

3.                                      SUBJECT WAIVERS.

 

(a)                                 In order to permit the arrangements contemplated by the Subject Instruments, the parties to the Stockholders Agreement hereby waive the following requirements set forth in the Assigned Stockholders Agreement; provided, that, such waivers will be effective only with respect to actions taken or matters occurring during the Assignment Period (and upon the expiration of the Assignment Period, such waivers will cease to be of any force and effect with respect to actions taken or matters occurring after the Assignment Period):

 

(i)                                     the agreement to vote (and cause each member of its or his Stockholder Group to vote, if applicable), or act by written consent, pursuant to Section 3.1(b) of the Stockholders Agreement, but solely to comply with Section 3(d) of the Transaction Agreement and Article V, Section C of the Certificate;

 

(ii)                                  the requirements set forth in Section 3.2 of the Stockholders Agreement, prohibiting any stockholder agreements or arrangements of any kind with any Person with respect to any Equity, but solely with respect to any stockholder agreement or arrangement contemplated by the Subject Instruments;

 

(iii)                               the termination provision relating to the Spinco Proxy set forth in Section 3.3(a)(x) of the Stockholders Agreement (and the reference thereto in the lead-in to Section 3.3(c) of the Stockholders Agreement), other than if Diller ceases to be Chairman as a result of his death, Disability (but subject to the proviso to Section 3.3(a) of the Stockholders Agreement) or his volitional failure to stand for election;

 

(iv)                              the termination provisions relating to the Spinco Proxy set forth in Section 3.3(c)(i) of the Stockholders Agreement, (i)  to the extent any action taken (or failure to take action) by Diller pursuant to the Subject Instruments would constitute a material breach by Diller of Section 3.1(a), Section 3.1(b), Section 3.1(c) or Section 3.3(b) of the Stockholders Agreement and (ii) to the extent any action taken (or failure to take action) by Spinco, whether or not pursuant to the Subject Agreements, would constitute a material breach by Diller of Section 3.1(a), Section 3.1(b), Section 3.1(c) or Section 3.3(b) of the Stockholders Agreement;

 

(v)                                 the prohibition on assignment of the Spinco Proxy set forth in Section 3.3(d) of the Stockholders Agreement to the extent the Diller Assignment is or would constitute a prohibited assignment thereunder; and

 

(vi)                              the representations and warranties of each party set forth in Section 6.1 of the Stockholders Agreement, but solely to the extent contemplated by the Subject Instruments.

 

The waivers set forth in clauses (i), (ii), (iii), (iv), (v) and (vi) of this Section 3(a) are referred to as the “Subject Waivers.”

 

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(b)                                 For the avoidance of doubt, the foregoing Subject Waivers will not affect any other provision of the Stockholders Agreement, and such other provisions will continue in full force and effect, in accordance with their respective terms, including (i) the termination of the Spinco Proxy in accordance with its terms pursuant to the Stockholders Agreement (other than as expressly contemplated by the Subject Waivers), (ii) the continuation of the Spinco Proxy in accordance with Section 3.3(a) of the Stockholders Agreement in the event Diller is removed by the Board as Chairman other than for Cause, (iii) the suspension and reinstatement of the Spinco Proxy pursuant to Section 3.3(e) of the Stockholders Agreement and (iv) the restrictions on Transfers of shares of Class B Common Stock, the right of first refusal and the exchange right set forth in Article IV of the Stockholders Agreement.

 

(c)                                  The parties hereby acknowledge and agree that the Subject Waivers serve as valid waivers by the applicable parties with respect to the requirements expressly waived herein, and this Section 3 fully complies with the terms and conditions of the Stockholders Agreement with respect to the waiver of such requirements expressly waived herein, including Section 6.4 thereof.

 

4.                                      REPRESENTATIONS AND WARRANTIES OF SPINCO.  Spinco hereby represents and warrants to Diller that (a) it is a corporation duly organized, validly existing and in good standing under the laws of its jurisdiction of organization and it has the corporate power and authority to enter into this Amendment and to carry out its obligations hereunder, (b) the execution and delivery of this Amendment by Spinco have been duly authorized by all necessary action on the part of Spinco and no other proceedings on the part of Spinco are necessary to authorize this Amendment, (c) this Amendment has been duly executed and delivered by Spinco and constitutes a valid and binding obligation of Spinco, and, assuming this Amendment constitutes a valid and binding obligation of Diller, is enforceable against Spinco in accordance with its terms (subject to applicable bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and other laws affecting creditors’ rights generally and general principles of equity), (d) neither the execution, delivery or performance of this Amendment by Spinco constitutes a breach or violation of conflicts with its Certificate or by-laws (or similar governing documents) or any material agreement to which Spinco is a party and (e) none of such material agreements would impair in any material respect the ability of Spinco to perform its obligations hereunder.

 

5.                                      REPRESENTATIONS AND WARRANTIES OF DILLER. Diller hereby represents and warrants to Spinco that (a) Diller has the power and authority to enter into this Amendment and to carry out his obligations hereunder, (b) the execution and delivery of this Amendment by Diller have been duly authorized by all necessary action on the part of Diller and no other proceedings on the part of Diller are necessary to authorize this Amendment, (c) this Amendment has been duly executed and delivered by Diller and constitutes a valid and binding obligation of Diller, and, assuming this Amendment constitutes a valid and binding obligation of Spinco, is enforceable against Diller in accordance with its terms (subject to applicable bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and other laws affecting creditors’ rights generally and general principles of equity), (d) neither the execution, delivery or performance of this Amendment by Diller constitutes a breach or violation of or conflicts with any material agreement to which Diller is a party and (e) none of such material agreements would impair in any material respect the ability of Diller to perform his obligations hereunder.

 

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6.                                      EFFECTIVENESS OF AMENDMENTS.  The Interim Amendments will by their terms cease to be effective upon the Proxy Swap Termination Date and, thereafter, shall be of no further force and effect and their effectiveness shall be suspended during any period of deemed suspension of the Diller Assignment and/or the Malone Proxy described in clause (iv) of Section 15(b) of the Transaction Agreement.  No party hereto will be relieved from any liability for breach of an Interim Amendment occurring prior to the Proxy Swap Termination Date or prior to the end of any such period of suspension by reason of such provision ceasing to be effective at such time or having been suspended, as the case may be.  Following the Proxy Swap Termination Date, the Assigned Stockholders Agreement shall continue in full force and effect.

 

7.                                      MISCELLANEOUS.

 

(a)                                 Assigned Stockholders Agreement in Effect.  Other than as specified in this Amendment, the terms of the Assigned Stockholders Agreement are unmodified and remain in full force and effect and will continue to govern the relationship between Diller and Spinco as to the other matters contained therein.  This Amendment, together with the Assigned Stockholders Agreement, shall constitute one and the same agreement.

 

(b)                                 Remedies.  Each party hereto acknowledges that money damages would not be an adequate remedy in the event that any of the covenants or agreements in this Amendment are not performed in accordance with its terms, and it is therefore agreed that in addition to and without limiting any other remedy or right it may have, the non-breaching party will have the right to an injunction, temporary restraining order or other equitable relief in any court of competent jurisdiction enjoining any such breach and enforcing specifically the terms and provisions hereof.  All rights, powers and remedies provided under this Amendment or otherwise available in respect hereof at law or in equity shall be cumulative and not alternative, and the exercise or beginning of the exercise of any thereof by any party shall not preclude the simultaneous or later exercise of any other such right, power or remedy by such party.  In the event that a party institutes any suit or action under this Amendment, including for specific performance or injunctive relief pursuant to this Section 7, the prevailing party in such proceeding shall be entitled to receive the costs incurred thereby in conducting the suit or action, including reasonable fees and expenses of counsel, accountants, consultants and other experts.

 

(c)                                  Conflicts.  In the event of a conflict between the terms of this Amendment and the Assigned Stockholders Agreement, the provisions of this Amendment will control and the relevant provisions of the Assigned Stockholders Agreement will be deemed to be suspended, in each case until the Proxy Swap Termination Date.

 

(d)                                 Further Assurances.  At any time or from time to time after the date hereof, the parties agree to cooperate with each other, and at the request of any other party, to execute and deliver any further instruments or documents and to take all such further action as the other party may reasonably request in order to evidence or effectuate the consummation of the matters contemplated hereby and to otherwise carry out the intent of the parties hereunder.

 

(e)                                  Expenses.  Except as otherwise provided in any Transaction Instrument, all costs and expenses incurred in connection with the matters contemplated by this Amendment shall be paid by the party incurring such costs and expenses.

 

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(f)                                   Governing Law; Jurisdiction and Venue.  This Amendment shall be governed by and construed in accordance with the laws of the State of Delaware without giving effect to the principles of conflicts of law. The parties hereto hereby irrevocably submit to the jurisdiction of the Delaware Court of Chancery or, in the event (but only in the event) that such court does not have subject matter jurisdiction over such action or proceeding, in the United States District Court for the District of Delaware in respect of the interpretation and enforcement of the provisions of this Amendment and of the documents referred to in this Amendment, and in respect of the matters contemplated hereby, and hereby waive, and agree not to assert, as a defense in any action, suit or proceeding for the interpretation or enforcement hereof or of any such document, that it is not subject thereto or that such action, suit or proceeding may not be brought or is not maintainable in the Delaware Court of Chancery, or in the event (but only in the event) that such court does not have subject matter jurisdiction over such action or proceeding, in the United States District Court for the District of Delaware, or that this Amendment or any such document may not be enforced in or by such courts, and the parties hereto irrevocably agree that all claims with respect to such action or proceeding shall be heard and determined exclusively in the Delaware Court of Chancery, or in the event (but only in the event) that such court does not have subject matter jurisdiction over such action or proceeding, in the United States District Court for the District of Delaware. The parties hereto hereby consent to and grant the Delaware Court of Chancery, or in the event (but only in the event) that such court does not have subject matter jurisdiction over such action or proceeding, the United States District Court for the District of Delaware, jurisdiction over the person of such parties and, to the extent permitted by Law, over the subject matter of such dispute and agree that mailing of process or other papers in connection with any such action or proceeding in the manner provided herein or in such other manner as may be permitted by Law shall be valid and sufficient service thereof. 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 PROCEEDING ARISING OUT OF OR RELATING TO THIS AMENDMENT OR THE MATTERS CONTEMPLATED HEREBY.

 

(g)                                  Assignment; Successors.  Except as otherwise provided herein, neither this Amendment nor any of the rights or obligations under this Amendment shall be assigned, in whole or in part (except by operation of law pursuant to a merger that gives rise to a right of  Diller to terminate the Transaction Agreement pursuant to Section 15(b) thereof which right he fails to exercise pursuant to the terms of Section 15(b) thereof (or pursuant to a merger which would terminate the Transaction Agreement pursuant to Section 15(b) thereof which termination Diller has waived)), by any party without the prior written consent of the other party hereto. Subject to the foregoing, this Amendment shall bind and inure to the benefit of and be enforceable by the parties hereto and their respective successors and permitted assigns.

 

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

 

(j)                                    Entire Agreement; No Third-Party Beneficiaries.  Except as otherwise expressly set forth herein or therein, (i) this Amendment and (ii) the other Transaction Instruments and the Expedia Reimbursement Agreement, including any exhibits and schedules thereto, embody the complete agreement and understanding among the parties hereto with respect to the subject

 

10

 

matter hereof or thereof and supersede and preempt any prior understandings, agreements or representations by or among the parties, written or oral, that may have related to the subject matter hereof in any way.

 

(k)                                 Notices.  Any notices or other communications required or permitted under, or otherwise in connection with this Amendment, shall be in writing and shall be deemed to have been duly given (A) when delivered in person, (B) upon transmission by electronic mail or facsimile transmission as evidenced by confirmation of transmission to the sender (but only if followed by transmittal of a copy thereof by (x) national overnight courier or (y) hand delivery with receipt, in each case, for delivery by the second (2nd) Business Day following such electronic mail or facsimile transmission), (C) on receipt after dispatch by registered or certified mail, postage prepaid and addressed, or (D) on the next Business Day if transmitted by national overnight courier, in each case as set forth to the parties as set forth below:

 

If to Spinco, to:

 

	
Liberty Expedia Holdings, Inc.
    	
 
    	
 
    
	
12300 Liberty Boulevard
    	
 
    	
 
    
	
Englewood, CO 80112
    	
 
    	
 
    
	
Facsimile:
    	
 
    	
 
    
	
Attention:
    	
Richard N. Baer
    	
 
    	
 
    
	
E-Mail:
    	
 
    	
 
    
				

 

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

 

	
Baker Botts L.L.P.
    	
 
    	
 
    
	
30 Rockefeller Plaza
    	
 
    	
 
    
	
New York, New York 10112
    	
 
    	
 
    
	
Facsimile: (212) 259-2500
    	
 
    	
 
    
	
Attention:
    	
Frederick H. McGrath
    
	
 
    	
Renee L. Wilm
    
	
E-Mail:
    	
frederick.mcgrath@bakerbotts.com
    
	
 
    	
renee.wilm@bakerbotts.com
    
				

 

If to Diller, to:

 

	
c/o Arrow Investments, Inc.
    	
 
    	
 
    
	
555 West 18th Street
    	
 
    	
 
    
	
New York, NY 10011
    	
 
    	
 
    
	
Attention:
    	
Barry Diller
    	
 
    	
 
    
	
Facsimile:
    	
 
    	
 
    
	
E-mail:
    	
 
    	
 
    
				

 

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

 

Wachtell, Lipton, Rosen & Katz

51 West 52nd Street

 

11

 

	
New York, NY 10019
    	
 
    	
 
    
	
Attention:
    	
Andrew J. Nussbaum, Esq.
    
	
Facsimile:
    	
(212) 403-2000
    
	
E-mail:
    	
AJNussbaum@wlrk.com
    
				

 

or such other address, email address or facsimile number as such party may hereafter specify by like notice to the other parties hereto.

 

(l)                                     Severability.  Whenever possible, each provision (or portion thereof) of this Amendment shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision (or portion thereof) of this Amendment is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, then (subject to Section 6 hereof, insofar as a finding of invalidity or unenforceability of a Subject Instrument gives rise to the Proxy Swap Termination Date) such invalidity, illegality or unenforceability shall not affect any other provision or any other jurisdiction, but this Amendment shall be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision had never been contained herein.

 

(m)                             Amendments and Waivers.  This Amendment may not be amended, modified, or waived except in a written instrument executed by the parties. The failure of any party to enforce any of the provisions of this Amendment shall in no way be construed as a waiver of such provisions and shall not affect the right of such party thereafter to enforce each and every provision of this Amendment in accordance with its terms.

 

(n)                                 No Implied Waivers.  No action taken pursuant to this Amendment, 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 Amendment 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.

 

(o)                                 Interpretation.  When a reference is made in this Amendment to a Section, such reference shall be to a Section of this Amendment unless otherwise indicated.  The headings contained in this Amendment are for reference purposes only and shall not affect in any way the meaning or interpretation of this Amendment.  Whenever the words “include”, “includes” or “including” are used in this Amendment, they shall be deemed to be followed by the words “without limitation”.  The words “hereof”, “herein” and “hereunder” and words of similar import when used in this Amendment shall refer to this Amendment as a whole and not to any particular provision of this Amendment.  In the event of any ambiguity or claimed ambiguity in any provision of a Subject Instrument, such provision shall be construed in light of the purpose acknowledged and agreed by the parties that Diller’s rights and interests, including without limitation with respect to the control of the Company by virtue of the proxy granted to Diller pursuant to Section 3.3 of the Assigned Stockholders Agreement, shall not be affected or changed by any of the Subject Instruments, except to the extent clearly and unequivocally set forth therein.

 

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(p)                                 Counterparts.  This Amendment 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.

 

[Signature Page Follows]

 

13

 

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

 

	
 
    	
LIBERTY   EXPEDIA HOLDINGS, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Barry   Diller
    

 

[Signature Page to Amendment No. 1 to Stockholders Agreement]

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