Document:

Exhibit 4.1

 

 

FIRST SUPPLEMENTAL INDENTURE

 

Dated as of August 20, 2008

 

among

 

HSN, INC.

 

The Guarantors Party Hereto

 

and

 

THE BANK OF NEW YORK MELLON,

 

as Trustee

 

 

 

THIS SUPPLEMENTAL INDENTURE (this “Supplemental
Indenture”), entered into as of August 20, 2008, among HSN, INC., a Delaware corporation (the “Issuer”), the guarantors party hereto (the “Guarantors”), and THE BANK
OF NEW YORK MELLON, as trustee (the “Trustee”).

 

RECITALS

 

WHEREAS, the Issuer and the Trustee entered into the Indenture, dated
as of July 28, 2008 (the “Indenture”),
relating to the Issuer’s 11.25% Senior Notes due 2016 (the “Notes”); and

 

WHEREAS, the Notes were issued as part of financing relating to the pro
rata distribution of 100% of the capital stock of the Issuer to the stockholders
of IAC/InterActive Corp, a Delaware corporation; and

 

WHEREAS, each of the Guarantors became a Domestic Restricted Subsidiary
of the Issuer as a result of the Spin-Off, and Sections 4.13 and 9.01 of the
Indenture requires each of the Guarantors to execute and deliver to the Trustee
this Supplemental Indenture pursuant to which each of the Guarantors shall
unconditionally guarantee all of the Issuer’s obligations under the Notes and
the Indenture on the terms set forth in the Indenture; and

 

WHEREAS, the Guarantors and the Issuer have requested that the Trustee
executed and deliver this Supplemental Indenture; and

 

WHEREAS, all things necessary have been done to make this Supplemental
Indenture, when executed and delivered by the Guarantors and the Issuer, the
legal, valid and binding agreement of the Guarantors and the Issuer, in
accordance with its terms.

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained and intending to be legally bound, the parties to this
Supplemental Indenture hereby agree as follows:

 

Section 1.  Capitalized
teams used herein and not otherwise defined herein are used as defined in the
Indenture.

 

Section 2.  The Guarantors,
by their execution of this Supplemental Indenture, each agree to be a Guarantor
under the Indenture and to be bound by the terms of the Indenture applicable to
Guarantors, including, but not limited to, Article 10 thereof.

 

Section 3.  This
Supplemental Indenture shall be governed by and construed in accordance with
the laws of the State of New York.

 

Section 4.  This
Supplemental Indenture may be signed in various counterparts which together
will constitute one and the same instrument.

 

1

 

Section 5.  This Supplemental
Indenture is an amendment supplemental to the Indenture and the Indenture and
this Supplemental Indenture will henceforth be read together.

 

Section 6.  The recitals
contained herein are made by the Issuer and the Guarantors and not by the Trustee,
and the Trustee assumes no responsibility for the correctness thereof.  The Trustee makes no representation as to the
validity or sufficiency of this Supplemental Indenture. All rights,
protections, privileges, indemnities and benefits granted or afforded to the
Trustee under the Indenture shall be deemed incorporated herein by this
reference  and shall be deemed applicable
to all actions taken, suffered or omitted by the Trustee under this
Supplemental Indenture.

 

2

 

IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed as of the date first above written.

 

	
   

  	
  HSN, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Authorized Signature

  
	
   

  	
  Name: Authorized Signature

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  AST LLC, as Guarantor

  
	
   

  	
  AST SUB, INC., as Guarantor

  
	
   

  	
  HOME SHOPPING NETWORK EN

  
	
   

  	
  ESPANOL, L.L.C., as Guarantor

  
	
   

  	
  HSN DIRECT LLC, as Guarantor

  
	
   

  	
  HSN FULFILLMENT LLC, as Guarantor

  
	
   

  	
  HSN IMPROVEMENTS, LLC, as Guarantor

  
	
   

  	
  HSN INTERACTIVE LLC, as Guarantor

  
	
   

  	
  HSN REALTY LLC, as Guarantor

  
	
   

  	
  HSNAUTOMATIC LLC, as Guarantor

  
	
   

  	
  INGENIOUS DESIGNS LLC, as Guarantor

  
	
   

  	
  SHORT SHOPPING LLC, as Guarantor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James P. Warner

  
	
   

  	
   

  	
  Name:  James P. Warner

  
	
   

  	
   

  	
  Title:    Secretary

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  H.O.T. NETWORKS HOLDINGS

  
	
   

  	
  (DELAWARE) LLC, as Guarantor

  
	
   

  	
  HSN CATALOG SERVICES, INC., as  Guarantor 

  
	
   

  	
  HSN OF NEVADA LLC, as Guarantor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James P. Warner

  
	
   

  	
   

  	
  Name:  James P. Warner

  
	
   

  	
   

  	
  Title:    Vice President & Secretary

  
				

 

 

SIGNATURE PAGE TO HSN, INC.
FIRST SUPPLEMENTAL INDENTURE

 

 

	
   

  	
  EXCEPTION MANAGEMENT SERVICES,

  
	
   

  	
  LP, as Guarantor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By: HSN General Partner LLC, its general partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ James P. Warner

  
	
   

  	
   

  	
   

  	
  Name:  James P. Warner

  
	
   

  	
   

  	
   

  	
  Title:    Executive Vice President, General

  
	
   

  	
   

  	
   

  	
              
  Counsel & Secretary

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  HSN LP, as Guarantor

  
	
   

  	
   

  
	
   

  	
   

  	
  By: HSN General Partner LLC, its general partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James P. Warner

  
	
   

  	
   

  	
  Name:  James P. Warner

  
	
   

  	
   

  	
  Title:    Executive Vice President, General

  
	
   

  	
   

  	
               Counsel & Secretary

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  HOME SHOPPING NETWORK EN

  
	
   

  	
  ESPANOL, L.P., as Guarantor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  By: Home Shopping Network En Espanol LLC, its general partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ James P. Warner

  
	
   

  	
   

  	
   

  	
  Name:  James P. Warner

  
	
   

  	
   

  	
   

  	
  Title:    Secretary

  
						

 

 

SIGNATURE PAGE TO HSN, INC.
FIRST SUPPLEMENTAL INDENTURE

 

 

	
   

  	
  BALLARD DESIGNS, INC., as Guarantor

  
	
   

  	
  CINMAR, INC., as Guarantor

  
	
   

  	
  CINMAR, L.P., as Guarantor

  
	
   

  	
  CORNERSTONE BRANDS, INC., as Guarantor

  
	
   

  	
  CORNERSTONE CONSOLIDATED 

  
	
   

  	
  SERVICES GROUP, INC., as Guarantor

  
	
   

  	
  GARNET HILL, INC., as Guarantor

  
	
   

  	
  SHOPBLINDS.COM, INC., as Guarantor

  
	
   

  	
  SMITH & NOBLE, LLC, as Guarantor

  
	
   

  	
  THE CORNERSTONE HOLDINGS GROUP, INC., as  Guarantor   

  
	
   

  	
  THE TERRITORY AHEAD, INC., as  Guarantor 

  
	
   

  	
  TRAVELSMITH OUTFITTERS, INC., as  Guarantor 

  
	
   

  	
  UNITED INDEPENDENT, INC., as Guarantor

  
	
   

  	
  THE CORNERSTONE BRANDS GROUP,  INC., as Guarantor 

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Matthew D. Soyster

  
	
   

  	
   

  	
  Name:  Matthew D. Soyster

  
	
   

  	
   

  	
  Title:    Vice President, General Counsel &

  
	
   

  	
   

  	
              
  Assistant Secretary

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  CORNERSTONE REAL ESTATE COMPANY 

  
	
   

  	
  I, LLC, as Guarantor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Matthew D. Soyster

  
	
   

  	
   

  	
  Name:  Matthew D. Soyster

  
	
   

  	
   

  	
  Title:    Vice President, General Counsel &

  
	
   

  	
   

  	
              
  Secretary

  

 

 

SIGNATURE PAGE TO HSN, INC.
FIRST SUPPLEMENTAL INDENTURE

 

 

	
   

  	
  THE BANK OF NEW YORK MELLON,

  
	
   

  	
  as Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Authorized Signature

  
	
   

  	
  Name:

  	
  Authorized Signature

  
	
   

  	
  Title:

  	
   

  
					

 

 

SIGNATURE PAGE TO HSN, INC.
FIRST SUPPLEMENTAL INDENTUREExhibit 10.5

 

REGISTRATION RIGHTS AGREEMENT (HSN)

 

REGISTRATION RIGHTS
AGREEMENT (this “Agreement”), dated as of August 20,
2008, is entered into by and among LIBERTY MEDIA CORPORATION, a Delaware
corporation (“Liberty”), the
LIBERTY PARTIES (as defined below) and HSN, INC., a Delaware corporation (the “Issuer”).

 

RECITALS:

 

WHEREAS, Liberty, IAC
(as defined below) and the other parties named therein have entered into the
Settlement Agreement (as defined below), pursuant to which, among other things,
IAC  has agreed to cause the Issuer to
enter into this Agreement in connection with the Single-Tier Spinoff (as
defined in the Settlement Agreement) of the Issuer; and

 

WHEREAS, IAC,  Liberty USA Holdings, LLC, a Delaware limited
liability company, and Liberty have entered into that certain Affiliate and
Assignment Agreement, dated as of August 20, 2008, pursuant to which
Liberty Sub assumed all of the rights, benefits, liabilities and obligations of
each Liberty Party (as defined in the Settlement Agreement) signatory to the
Spinco Agreement under the Settlement Agreement other than Liberty.

 

NOW, THEREFORE in
consideration of the mutual promises and covenants set forth herein, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:

 

ARTICLE
I

 

DEFINITIONS

 

Section 1.01.  Certain Defined Terms.  As used in the Agreement, the
following terms shall have the meanings set
forth below:

 

“1933 Act”
means the Securities Act of 1933, as amended, or any similar successor federal
statute and the rules and regulations promulgated thereunder, as the same
shall be in effect from time to time.

 

“1934 Act” means
the Securities Exchange Act of 1934, as amended, or any similar successor
federal statute and the rules and regulations promulgated thereunder, as
the same shall be in effect from time to time.

 

“Affiliate”
means, with respect to any Person, any other Person directly or indirectly
controlling, controlled by or under common control with such first Person.  For purposes of this definition, the term
“control” (including its correlative meanings, the terms “controlling”,
“controlled by” and “under common control with”), as used with respect to any
Person, shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of such Person,
whether through the ownership of voting securities, by 

 

 

contract or otherwise.  For
purposes of this definition, (i) natural persons shall not be deemed to be
Affiliates of each other, (ii) none of IAC, Barry Diller or any of their
respective Affiliates shall be deemed to be an Affiliate of Liberty, any
Liberty Party or any of their respective Affiliates and (iii) none of the
Spincos shall be deemed to be an Affiliate of Liberty, any Liberty Party or any
of their respective Affiliates.

 

“ASRS” means an
“automatic shelf registration statement” as defined in Rule 405
promulgated under the 1933 Act.

 

“ASRS Eligible”
means the Issuer meets or is deemed to meet the eligibility requirements to
file an ASRS as set forth in General Instruction I.D. to Form S-3.

 

“beneficially own”
has the meaning set forth in Rule 13d-3 under the 1934 Act, as such Rule is
in effect on the date hereof.

 

“Blackout Notice”
has the meaning set forth in Section 2.05(a).

 

“Blackout Period”
has the meaning set forth in Section 2.05(a).

 

“Board of Directors”
means the Board of Directors of the Issuer or an authorized committee thereof.

 

“Business Day”
means any day other than a Saturday, a Sunday or a day on which banks in New
York City are authorized or obligated by law or executive order to close.

 

“Common Stock”
means Common Stock, par value $.01 per shares, of the Issuer.

 

“Consolidated Action”
means the actions consolidated under the caption IN RE IAC/INTERACTIVECORP.,
C.A. No. 3468-VCL, in the Court of Chancery, New Castle County, State of
Delaware.

 

“Demand Registration
Statement” has the meaning set forth in Section 2.01.

 

“Demand Request”
has the meaning set forth in Section 2.01.

 

“Disadvantageous Condition”
has the meaning set forth in Section 2.05(a).

 

“Effective Time”
has the meaning set forth in Section 2.01.

 

“Effectiveness End Date”
has the meaning set forth in Section 2.01.

 

“Effectiveness Period”
has the meaning set forth in Section 2.01.

 

“Free Writing Prospectus”
means each “free writing prospectus” within the meaning of Rule 405
promulgated under the 1933 Act.

 

“Hedging Counterparty”
means a broker-dealer registered under Section 15(b) of the 1934 Act
or an Affiliate thereof or any other financial institution that routinely
engages in Hedging Transactions in the
ordinary course of its business.

 

2

 

“Hedging Transaction”
means any transaction involving a security linked to the Registrable Shares or
any security that would be deemed to be a “derivative security” (as defined in Rule 16a-1(c) under
the 1934 Act) with respect to the Registrable Shares or any transaction (even
if not a security) which would (were it a security) be considered such a
derivative security, or which transfers some or all of the economic risk of
ownership of the Registrable Shares, including any forward contract, equity
swap, put or call, put or call equivalent position, collar, non-recourse loan,
sale of exchangeable security or similar transaction.  For the avoidance of doubt, the following
transactions shall be deemed to be Hedging Transactions:

 

(a)      transactions by a Holder in which a Hedging Counterparty
engages in short sales of Common Stock pursuant to a prospectus and may use
Registrable Shares to close out its short position;

 

(b)      transactions pursuant to which a Holder sells short Common
Stock pursuant to a prospectus and delivers Registrable Shares to close out its
short position;

 

(c)      transactions by a Holder in which the Holder delivers, in a
transaction exempt from registration under the 1933 Act, Registrable Shares to
a Hedging Counterparty who may then publicly resell or otherwise transfer such
Registrable Shares pursuant to a prospectus or an exemption from registration
under the 1933 Act; and

 

(d)      a loan or pledge of Registrable Shares to a Hedging
Counterparty who may then become a Permitted Transferee and sell the loaned
shares or, in an event of default in the case of a pledge, then sell the
pledged shares, in each case, in a public transaction pursuant to a prospectus.

 

“Holder” means
Liberty, each of the Liberty Parties and each Permitted Transferee, for so long
as such Person beneficially owns Registrable Shares.

 

“IAC” means
IAC/InterActiveCorp, a Delaware corporation.

 

“Indemnified Party”
has the meaning set forth in Section 4.03.

 

“Indemnifying Party”
has the meaning set forth in Section 4.03.

 

“Inspectors” has
the meaning set forth in Section 3.01(j).

 

“Lead Holder”
means, until such time as the Liberty Parties effect a Permitted Restricted
Transfer, Liberty, and, thereafter, shall mean the Restricted Transferee in
such Permitted Restricted Transfer.

 

“Liability” has
the meaning set forth in Section 4.01.

 

“Liberty Parties”
means Liberty USA Holdings, LLC, a Delaware limited liability company (and any
successor or assign or acquirer of a Liberty Party (whether by merger,
consolidation, sale of assets or otherwise) provided that
such Liberty Party shall have caused such successor, assign or acquirer to
enter into an agreement, in writing in form and substance 

 

3

 

reasonably satisfactory to the Issuer, to be bound by the terms and
provisions of this Agreement as a condition of any such transaction.

 

“Litigation” has
the meaning set forth in Section 6.12.

 

“Lock-up Agreements”
has the meaning set forth in Article IV.

 

“Market Value”
of a share of Common Stock on any Trading Day means the last reported sale
price, regular way, of a share of such stock on such Trading Day or, in case
there is no last reported sale price on such Trading Day, the average of the
reported closing bid and asked prices regular way of a share of such stock on
such Trading Day, in either case on the principal stock exchange on which
shares of such stock are traded.  The
Market Value of a share of Common Stock on any day which is not a Trading Day
shall be deemed to be the Market Value of a share of Common Stock on the
immediately preceding Trading Day.

 

“Maximum Number of Shares”
means, with respect to any underwritten offering, the maximum number of shares
of Common Stock (including Registrable Shares) that the co-managing
underwriters advise the Issuer can be included in such offering without having
an adverse effect on such offering, including the price at which the shares can
be sold.

 

“Offering Confidential Information” has the meaning set forth in
Section 2.10(e)(i).

 

“Original Amount”
means the number of shares of Common Stock constituting Registrable Shares on
the date hereof (as such number shall be appropriately adjusted to give effect
to any of the events described in Section 6.01).

 

“Other Shares”
means shares of Common Stock, other than Spinoff Shares, acquired by the
Liberty Parties consistent with the Spinco Agreement, including such shares as
may be transferred to a Holder which transfer is, at the time of such transfer,
permitted by the Spinco Agreement.

 

“Other Shareholders” means holders of Common
Stock that have obtained registration rights from the Issuer (other than the
Holders).

 

“Permitted Restricted
Transfer” has the meaning given such term in the Spinco Agreement.

 

“Permitted Transferee” has the meaning set forth in
Section 2.09.

 

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

 

“Piggyback Notice” has the meaning set forth in Section 2.10.

 

“Piggyback Registration” has the meaning set forth in Section 2.10.

 

4

 

“prospectus”
means the prospectus related to any Registration Statement (including a
prospectus that discloses information previously omitted from a prospectus
filed as part of an effective Registration Statement in reliance on Rule 415),
as amended or supplemented by any amendment (including post-effective
amendments), pricing term sheet, Free Writing Prospectus or prospectus
supplement, and all documents and materials incorporated by reference in such
prospectus.

 

“Records” has
the meaning set forth in Section 3.01(j).

 

“Registrable Shares”
means, at any time, the Spinoff Shares and the Other Shares that are
beneficially owned by any of the Holders; provided
that any particular shares will cease to be Registrable Shares: (i) if and
when such shares shall have been disposed of pursuant to an effective
Registration Statement; (ii) if and when such shares shall have been sold
pursuant to Rule 144 under the 1933 Act; (iii) if and when such
shares shall have been otherwise transferred and new certificates for them not
bearing a legend or instructions restricting further transfer shall have been
delivered; and (iv) if and when such shares shall have ceased to be
outstanding (for the avoidance of doubt, any shares held in the treasury of the
Issuer or by a subsidiary of the Issuer shall not be considered
outstanding).  Spinoff Shares and Other
Shares which are Registrable Shares shall also cease to be Registrable Shares
if and when such shares may be disposed of by the holder thereof without
volume, holding period or manner of sale restrictions.

 

“Registration Expenses”
means the following expenses incurred in connection with any registration of
Registrable Shares or, in the case of a Hedging Counterparty, if applicable,
other shares of Common Stock, pursuant to this Agreement: (i) the fees,
disbursements and expenses of the Issuer’s counsel and accountants; (ii) all
filing fees in connection with the filing of any Registration Statement, any
prospectus, any other offering documents and any amendments and supplements
thereto; (iii) all expenses in connection with the qualification of the
Registrable Shares or other shares of Common Stock to be disposed of for
offering and sale or distribution under state securities laws (other than those
contemplated in clause (C) to the proviso below); (iv) the filing
fees incident to securing any required review by the Financial Industry
Regulatory Authority of the terms of the sale or distribution of the
Registrable Shares or other shares of Common Stock to be disposed of; (v) all
security engraving and security printing expenses; and (vi) all expenses
in connection with the listing of the Registrable Shares on the principal stock
exchange on which other shares of Common Stock are listed; provided, however,
that the term “Registration Expenses” shall not include (A) the fees,
disbursements and expenses of Special Counsel or any other counsel for the
Holders; (B) all expenses incurred in connection with the printing,
mailing and delivering of copies of any Registration Statement, any prospectus,
any other offering documents and any amendments and supplements thereto to any
underwriters and dealers; (C) the cost of preparing, printing or producing
any agreements among underwriters, underwriting agreements, and blue sky or
legal investment memoranda, any selling agreements and any other similar
documents in connection with the offering, sale, distribution or delivery of
the Registrable Shares or other shares of Common Stock to be disposed of,
including any fees of counsel for any underwriters in connection with the
qualification of the Registrable Shares or other shares of Common Stock to be
disposed of for offering and sale or distribution under state securities laws; (D) any
broker’s commissions or underwriter’s discount, fee or commission relating to
the sale of Registrable Shares or other shares of Common Stock and any other
fees 

 

5

 

and disbursements of underwriters; and (E) costs and expenses of
the Issuer relating to analyst or investor presentations.

 

“Registration Statement”
means a Demand Registration Statement or a Section 2.10 Registration
Statement, as the context requires.

 

“Restricted Transferee”
has the meaning given such term in the Spinco Agreement.

 

“Rule 144”
means Rule 144 as promulgated by the SEC under the 1933 Act, as such Rule may
be amended from time to time, or any similar successor rule promulgated by
the SEC.

 

“Rule 405”
means Rule 405 as promulgated by the SEC under the 1933 Act, as such Rule may
be amended from time to time, or any similar successor rule promulgated by
the SEC

 

“Rule 415”
means Rule 415 as promulgated by the SEC under the 1933 Act, as such Rule may
be amended from time to time, or any similar successor rule promulgated by
the SEC.

 

“S-3 Eligible”
means the Issuer meets or is deemed to meet the eligibility requirements to
file on Form S-3 as set forth in General Instruction I.A. to Form S-3.

 

“SEC” means the
Securities and Exchange Commission.

 

“Section 2.10
Registration Statement” has the meaning set forth in Section 2.10.

 

“Settlement Agreement”
means the Agreement, dated as of May 13, 2008, among Liberty, the Liberty
Parties and IAC entered into in connection with the settlement of the
Consolidated Action.

 

“Special Counsel”
means Baker Botts LLP, or such other law firm of national reputation as may be
selected by the Lead Holder (or any other Holder who (together with its
Affiliates), at the time of such selection, beneficially owns the highest
percentage of the  Registrable Shares)
and notified in writing to the Issuer.

 

“Spinco Agreement”
means the Settlement Agreement, as assumed by and assigned to the Issuer
pursuant to Section 9(b) thereof.

 

“Spinoff Shares”
means the shares of Common Stock issued to the Liberty Parties as a result of
the Single-Tier Spinoff (as defined in the Spinco Agreement) of the Issuer,
including such shares as may be transferred to a Holder which transfer is, at
the time of such transfer, permitted by the Spinco Agreement.

 

“Total Registrable Amount”
means the Original Amount on the date hereof plus the number of Other Shares
acquired after the date hereof, in each case appropriately adjusted, but only
with respect to the number of Registrable Shares on the date of such event, to
give effect to any of the events described in Section 6.01.

 

“Trading Day”
means a day on which shares of the Common Stock are traded on the principal
United States securities exchange on which such shares are listed.

 

6

 

ARTICLE
II

 

REGISTRATION
RIGHTS

 

Section 2.01.  Registration
Upon Demand.  At any time after the
date hereof and for so long as there are any Registrable Shares, upon the
written request of the Lead Holder acting on behalf of Holders holding an
amount of Registrable Shares equal to at least ten percent (10%) of the
Original Amount (a “Demand Request”), the Issuer shall prepare
a registration statement (a “Demand Registration Statement”) on (i) if the Issuer
is then S-3 Eligible, a Form S-3 or (ii) if the Issuer is not then
S-3 Eligible, any other appropriate form under the 1933 Act, for the type of
offering contemplated by the Demand Request (which may include an offering to
be made on a delayed or continuous basis under Rule 415); provided, that the aggregate offering price applicable to any Demand Registration
Statement so requested to be filed shall not be less than $75 million
(determined by multiplying the number of Registrable Shares to be included in
such Demand Registration Statement by the Market Value on the day on which such
Demand Request is received by the Issuer). 
The Demand Request shall specify, for each Holder, the number of
Registrable Shares to be included in such Demand Registration Statement for
such Holder’s account.  If the Issuer is
ASRS Eligible at the time any Demand Request is received for a shelf
registration statement, the Issuer shall use commercially reasonable efforts to
cause the Demand Registration Statement to be an ASRS.  Subject to Section 2.05, the Issuer
shall use its commercially reasonable efforts to cause the Demand Registration
Statement (i) to be filed with the SEC as promptly as reasonably
practicable following the receipt of the Demand Request, (ii) to become
effective as promptly as reasonably practicable after filing, and (iii) to
remain continuously effective during the time period (the “Effectiveness Period”) commencing on the date such Demand Registration Statement is
declared effective (the “Effective Time”) and ending on
(A) the date that there are no longer any Registrable Shares covered by
such Demand Registration Statement or (B) if earlier, the 30th day (90th
day if the Demand Registration Statement is on Form S-3) after the Demand
Registration Statement is initially declared effective (the ending date
specified in this clause (iii), the “Effectiveness
End Date”).  No more than three
(3) Demand Requests may be made.  In
no event shall the Issuer be required to include a Holder’s Registrable Shares
in a Demand Registration Statement if such Holder included in any
Section 2.10 Registration Statement declared effective within the 60
calendar days preceding the Demand Request relating to such Demand Registration
Statement all of the Registrable Shares such Holder sought to be included in
such Section 2.10 Registration Statement, and such 2.10 Registration
Statement remained effective until at least the Effectiveness End Date thereof
(or is then still effective) (substituting for this purpose only the term “2.10
Registration Statement” for “Demand Registration Statement” in the definition
of Effectiveness End Date).

 

Section 2.02.  Revocation
of Demand Request.  Any Demand
Request may be revoked by notice from the Lead Holder to the Issuer prior to
the effective date of the corresponding Demand Registration Statement; provided, that such revoked Demand Request shall count as one of the three
Demand Requests referred to in the last sentence of Section 2.01 unless
the Issuer as promptly as reasonably practicable is reimbursed for all
out-of-pocket expenses (including fees of outside counsel and accountants and
other Registration Expenses) incurred by the Issuer relating to the
registration requested pursuant to such revoked Demand Request.  A Demand Request may not be made for a
minimum of 90 calendar days after the revocation of an earlier Demand Request.

 

7

 

Section 2.03.  Selection
of Underwriters and Underwriter’s Counsel. 
The Holders may effect one or more underwritten public offerings with
respect to the Registrable Shares included in a Demand Registration Statement; provided, that no underwritten public offering shall be effected in which the
gross proceeds to the selling Holders are not expected to exceed $75
million.  The Holder(s) effecting
any such public offering, acting through the Lead Holder, and the Issuer shall
mutually select the managing underwriter or co-managing underwriters for such
public offering.  The Issuer shall be
entitled to designate counsel for such underwriter or underwriters, provided that such designated underwriters’ counsel shall be a firm of national
reputation representing underwriters in capital markets transactions.

 

Section 2.04.  Registration
In Connection With Hedging Transactions.

 

(a)      The Issuer acknowledges that from time to time a Holder may
seek to enter into one or more Hedging Transactions with a Hedging
Counterparty.  The Issuer agrees that, in
connection with any proposed Hedging Transaction then permitted by the Spinco
Agreement, if, in the reasonable judgment of counsel to such Holder (after good
faith consultation with counsel to the Issuer), it is necessary or desirable to
register under the 1933 Act sales or transfers (whether short or long and
whether by the Holder or by the Hedging Counterparty) of Registrable Shares or
(by the Hedging Counterparty) other shares of Common Stock in connection
therewith, then a Registration Statement covering Registrable Shares or such
other shares of Common Stock may be used in a manner otherwise in accordance
with the terms and conditions of this Agreement to register such such sales or
transfers under the 1933 Act. 
Notwithstanding anything in this Agreement to the contrary, the Issuer
shall not be required to register, and shall not be required to pay
Registration Expenses in connection with the registration of, an aggregate
number of sales or transfers of Registrable Shares or other shares of Common
Stock in excess of the Total Registrable Amount, it being understood that a
sale or transfer of a Registrable Share or other share of Common Stock shall be
considered to have been registered for purposes of this Section 2.04 and
Section 6.15 when (1) a Registration Statement covering such
Registrable Share or other share of Common Stock shall have been declared
effective or, following a request pursuant to Section 2.04(b), an
effective shelf Registration Statement is available to cover the sale or
transfer of the Registrable Share or other share of Common Stock requested to
be covered and (2) in the case of a Demand Registration Statement, such
Demand Registration Statement shall have remained effective until (A) such
sale or transfer of such Registrable Share or other Share of Common Stock shall
have occurred or (B) if earlier, the Effectiveness End Date thereof.

 

(b)      If, in the circumstances contemplated by Section 2.04(a),
a Holder seeks to register sales or transfers of Registrable Shares (or the
sale or transfer by a Hedging Counterparty of other shares of Common Stock) in
connection with a Hedging Transaction at a time when a shelf Registration
Statement covering Registrable Shares is effective, upon receipt of written
notice thereof from the Lead Holder, the Issuer shall use commercially
reasonable efforts to take such actions as may reasonably be required to permit
such sales or transfers in connection with such Hedging Transaction to be
covered by such effective Registration Statement in a manner otherwise in
accordance with the terms and conditions of this Agreement, which may include,
among other things, the filing of a prospectus supplement or post-effective
amendment including a description of such Hedging Transaction, the name of the
Hedging Counterparty, identification of the Hedging Counterparty or its
Affiliates as 

 

8

 

underwriters or potential underwriters, if
applicable, and any change to the plan of distribution contained in the
prospectus; provided that, in the case of a shelf Demand Registration
Statement, in no event shall the foregoing require the Issuer to extend the
Effectiveness Period of the Registration Statement beyond the Effectiveness End
Date.

 

(c)      Any information regarding a Hedging Transaction included in a
Registration Statement pursuant to this Section 2.04 shall be deemed to be
information provided by the Holder selling or tranferring Registrable Shares or
shares of Common Stock pursuant to such Registration Statement for purposes of
Article V of this Agreement.

 

(d)      If, with respect to a Hedging Transaction in connection with
which a registration is contemplated by Section 2.04(a), a Hedging
Counterparty or any Affiliate thereof is (or may be considered) an underwriter
or selling securityholder, then, as a condition to including in any
Registration Statement any sales or transfers of Registrable Shares or other
shares of Common Stock by such Hedging Counterparty in connection with such
Hedging Transaction, it and the Issuer shall be required to enter into an
agreement with the other (x) providing for indemnification rights
substantially similar to those provided under Article V and (y) pursuant
to which such Hedging Counterparty and/or Affiliate thereof, to the extent
registering shares of Common Stock that are not Registrable Shares, agrees to
be bound by the obligations applicable to a Holder hereunder as if such other
shares were Registrable Shares .

 

Section 2.05.  Blackout
Periods.

 

(a)      With respect to any Registration Statement, or amendment or
supplement thereto, whether filed or to be filed pursuant to this Agreement, if
the General Counsel of the Issuer shall determine, in his or her good faith
judgment, that to maintain the effectiveness of such Registration Statement or
file an amendment or supplement thereto (or, if no Registration Statement has
yet been filed, to file such a Registration Statement) would (i) require
the public disclosure of material non-public information concerning any
transaction or negotiations involving the Issuer or any of its consolidated
subsidiaries that would materially interfere with such transaction or
negotiations, (ii) require the public disclosure of material non-public
information concerning the Issuer at a time when its directors and executive
officers are restricted from trading in the Issuer’s securities  or
(iii) otherwise materially interfere with financing plans, acquisition
activities or business activities of the Issuer (a “Disadvantageous Condition”), the Issuer may, for the shortest period reasonably practicable (a “Blackout Period”), and in any event for not more than 60 consecutive days, notify the
Lead Holder and the other Holders whose sales of Registrable Securities are
covered (or to be covered) by such Registration Statement (a “Blackout Notice”) that such Registration Statement is unavailable for use (or will not
be filed as requested).  Upon the receipt
of any such Blackout Notice, the Holders shall forthwith discontinue use of the
prospectus contained in any effective Registration Statement; provided, that, if at the time of receipt of such Blackout
Notice any Holder shall have sold its Registrable Shares (or have signed a firm
commitment underwriting agreement with respect to the purchase of such shares)
and the Disadvantageous Condition is not of a nature that would require a
post-effective amendment to the Registration Statement, then the Issuer shall
use its commercially reasonable efforts to take such action as to eliminate any
restriction imposed by federal securities laws on the timely delivery of such
shares.  When any Disadvantageous
Condition as to which a Blackout Notice has been previously delivered 

 

9

 

shall cease to exist, the Issuer shall as promptly
as reasonably practicable notify the Lead Holder and such other Holders and
take such actions in respect of such Registration Statement as are otherwise
required by this Agreement.  If a
Blackout Period occurs during the Effectiveness Period of any Demand
Registration Statement, the Effectiveness End Date in respect of such
Registration Statement shall be extended for a number of days equal to the
total number of days during which the distribution of Registrable Shares
included in such Registration Statement was suspended under this
Section 2.05(a).  The Issuer shall
not impose, in any 360 calender day period, Blackout Periods lasting, in the
aggregate, in excess of 120 calendar days.

 

(b)      If the Issuer declares a Blackout Period with respect to a
Demand Registration Statement that has not yet been declared effective,
(i) the Lead Holder may by notice to the Issuer withdraw the related
Demand Request without such Demand Request counting against the three Demand
Requests permitted to be made under Section 2.01 and (ii) neither the
Lead Holder nor any other Holder will be responsible for the Issuer’s related
Registration Expenses.

 

Section 2.06.  SEC Orders
Suspending Effectiveness.  The Issuer
shall notify the Lead Holder and all other Holders that have Registrable Shares
included in a Registration Statement of any stop order threatened or issued by
the SEC (to the extent known to the Issuer) with respect to such Registration
Statement and, as to threatened orders, shall use commercially reasonable
efforts to prevent the entry of such stop order.  If the effectiveness of a Registration
Statement is suspended by a stop order issued by the SEC at any time during the
Effectiveness Period, the Issuer shall use commercially reasonable efforts to
obtain the prompt withdrawal of such order and to amend the Registration
Statement in a manner reasonably expected by the Issuer to obtain the
withdrawal of such order.

 

Section 2.07.  Plan of
Distribution.  The “plan of
distribution” section of each prospectus included in a Demand Registration
Statement with respect to an offering to be made on a delayed or continuous
basis under Rule 415 shall be substantially in the form of Annex A
hereto or in a form otherwise appropriate, subject to the comments of the SEC
and the inclusion of such other information as is required by applicable SEC
regulations or to conform with applicable SEC practice.  Each Holder agrees to dispose of its
Registrable Shares under a Registration Statement in accordance with the “plan
of distribution” section of the prospectus.

 

Section 2.08.  Expenses.  Subject to Section 2.02, the Issuer
shall pay all Registration Expenses, and each Holder shall (i) pay all
other expenses incurred by it and (ii) reimburse the Issuer for any other
out-of-pocket expenses reasonably incurred by the Issuer, in each case in
connection with any registration of its Registrable Shares pursuant to this
Agreement.

 

Section 2.09.  Transfer of Registration Rights.  Each Holder shall have the right to transfer,
by written agreement, any or all of its rights granted under this Agreement to
any direct or indirect transferee of such Holder’s Registrable Shares (each
Person to whom rights to register shares shall have been so transferred
hereunder a “Permitted Transferee”); provided, (i) such transferee is
Liberty, a Liberty Party, or an Affiliate of Liberty or a Liberty Party, or (ii) such
transferee is an “accredited investor” as such term is defined in Rule 501
of Regulation D promulgated under the 1933 Act, and in either such case (x) such
transferee agrees, in writing in form and substance reasonably satisfactory to
the Issuer, to be bound by the terms and provisions

 

10

of this Agreement (it being specifically
understood that any sale of Registrable Shares by a Permitted Transferee shall
be in accordance with the “plan of distribution” section of the applicable
prospectus); and (y) such transfer of Registrable Shares shall be effected
in accordance with applicable securities laws, the Spinco Agreement (if the
transferring Holder is a party thereto or has agreed to be bound thereby) and
any other agreements between the Issuer and such Holder.  Following any transfer or assignment made
pursuant to this Section 2.09 in connection with the transfer by a Holder
of a portion of its Registrable Shares, such Holder shall retain all rights
under this Agreement with respect to the remaining portion of its Registrable
Shares.  Notwithstanding the foregoing,
unless Liberty and the Liberty Parties shall have effected a Permitted
Restricted Transfer to a Restricted Transferee (in which case the Restricted
Transferee shall be substituted for Liberty in all respects hereunder as the
Lead Holder), the Issuer shall have no obligation to deliver any notices under
this Agreement to or otherwise interact with any Holder other than the Lead
Holder for any purpose under this Agreement (other than in accordance with
Sections 2.05(a), 2.06, 2.10(e)(ii), 3.01(f), 3.01(h), 3.02(d), 6.01, 6.02 and
6.13 and Article V hereof.)

 

Section 2.10.  Incidental Registration.

 

(a)      If the Issuer at any time
proposes to register the offer and sale of shares of Common Stock under the
1933 Act (other than on Form S-8 or Form S-4 or a registration
statement on Form S-1 or Form S-3 covering solely an employee benefit
or dividend reinvestment plan) (any such registration statement covering sales
or transfers of Registrable Shares, a “Section 2.10
Registration Statement”) for its own account or for the account of
any Other Shareholders, in a manner which would permit registration of
Registrable Shares for sale to the public under the 1933 Act (a “Piggyback Registration”), the Issuer will as promptly as
reasonably practicable give written notice (a “Piggyback
Notice”) to the Lead Holder (which shall give notice to all other
Holders) of its intention to do so, but in any event at least 10 Business Days
prior to the anticipated filing date of the Section 2.10 Registration
Statement.  The Piggyback Notice shall
offer all Holders the opportunity to include in such Section 2.10
Registration Statement such number of Registrable Shares as each Holder may
request, acting through the Lead Holder, subject to Section 2.10(d); provided, however, that any Holder who has included
Registrable Shares on a Demand Registration Statement that was declared
effective within the 60 calendar days immediately preceding the receipt of such
Piggyback Notice shall not be permitted to request the inclusion of any
Registrable Shares in such Section 2.10 Registration Statement.  Subject to the proviso to the immediately
preceding sentence and to Section 2.10(d), the Issuer will use its
commercially reasonable efforts to include in the Section 2.10 Registration
Statement the number of Registrable Shares of each Holder sought to be included
therein and so specified in a written notice delivered to the Issuer by the
Lead Holder on behalf of such Holder within 5 Business Days after such Lead
Holder’s receipt of the related Piggyback Notice.  A Holder, acting through the Lead Holder,
may, at least two Business Days prior to the effective date of a Section 2.10
Registration Statement, withdraw any Registrable Shares that it had sought to
have included therein, whereupon such Holder shall as promptly as reasonably
practicable pay to the Issuer all Registration Expenses incurred by the Issuer
in connection with the registration of such withdrawn Registrable Shares under
the 1933 Act or the 1934 Act and the inclusion of such shares in the Section 2.10
Registration Statement.

 

11

(b)      If a Piggyback
Registration involves an underwritten offering, then all Holders whose
Registrable Shares are included in the Section 2.10 Registration Statement
must sell such shares in such underwitten offering and agree to the same terms
and conditions as those agreed to by the Issuer or, if the Section 2.10
Registration Statement is for the benefit of Other Shareholders, such Other
Shareholders.

 

(c)      In connection with any
Piggyback Registration, each Holder shall notify the Issuer in writing 24 hours
prior to effecting any transaction in reliance on any Section 2.10
Registration Statement, or amendment or supplement thereto, whether filed or to
be filed pursuant to this Agreement.  In
the case of a transaction by a Hedging Counterparty covered by such Section 2.10
Registration Statement, such notice may specify a period of time, not to exceed
five Business Days, during which such sales or transfers may be effected.  If (and only if) the Issuer does not give
such Holder or Hedging Counterparty a Blackout Notice within 24 hours of the
Issuer’s receipt of such Holder’s notice, such Holder or Hedging Counterparty
may engage in the transaction referenced in the notice in accordance with the
terms of this Agreement.

 

(d)      The Issuer may elect, in
its sole discretion, to terminate a Section 2.10 Registration Statement at
any time prior to the effective date thereof. 
Upon giving written notice of such election to the Lead Holder, the
Issuer shall be relieved of its obligation to register any Registrable Shares
(or, in the case of a Hedging Counterparty, if applicable, other shares of
Common Stock) in connection with such registration (without prejudice, however,
to the rights of Holders under Section 2.01 hereof).

 

(e)      If a Piggyback
Registration involves an underwritten offering and the co-managing underwriters
advise the Issuer (and, if applicable, the Other Shareholders) that the number
of shares of Common Stock requested to be included in the Piggyback
Registration exceeds the Maximum Number of Shares, the following rules shall
apply:

 

(i)            If
the Section 2.10 Registration Statement was originated by the Issuer for a
primary offering, then there will be included in such Registration Statement: (i) first,
all of the shares of Common Stock that the Issuer proposes to sell for its own
account; and (ii) second, to the extent that the number of shares of
Common Stock included by the Issuer for its own account is less than the
Maximum Number of Shares, the shares of Common Stock proposed to be included by
the Other Shareholders and the Registrable Shares (or, in the case of
a Hedging Counterparty, if applicable,
other shares of Common Stock) proposed to be included by Holders (or Hedging
Counterparties ), allocated pro rata among
such Persons on the basis of the number of shares each such Person has
requested to be included in such Registration Statement (up to the Maxium
Number of Shares).

 

(ii)           If
the Section 2.10 Registration Statement was originated by Other
Shareholders for a secondary offering, then there will be included in such
Registration Statement: (i) first, all of the shares of Common Stock that
such Other Shareholders propose to sell for their own account; and (ii) second,
to the extent that the number of shares of Common Stock included by the Other
Shareholders is less than the Maximum Number of Shares, the Registrable Shares
(or, in the case of a Hedging Counterparty, if 

 

 

12

 

applicable, other shares of Common
Stock) proposed to be included by Holders (or Hedging Counterparties),
allocated pro rata among such Holders on the basis
of the number of shares that each such Person has requested to be included in
such Registration Statement (up to the Maxium Number of Shares).

 

(f)            (i)  The following shall be
deemed to be “Offering Confidential Information”
in respect of a Piggyback Registration: (x) the Issuer’s plan to file the
relevant Registration Statement and engage in the offering so registered, (y) any
information regarding the offering being registered (including, without
limitation, the potential timing, price, number of shares, underwriters or
other counterparties, selling stockholders or plan of distribution) and (z) any
other information (including information contained in draft supplements or
amendments to offering materials) provided to the Lead Holder or the Holders
(or Hedging Counterparties) by the Issuer (or by third parties) in connection
with the Piggyback Registration. 
Offering Confidential Information shall not include information that (1) was
or becomes generally available to the public (including as a result of the
filing of the relevant Registration Statement) other than as a result of a
disclosure by any Holder (or Hedging Counterparty), (2) was or becomes
available to any Holder (or Hedging Counterparty) from a source not bound by
any confidentiality agreement with the Issuer or (3) was otherwise in such
Holder’s (or Hedging Counterparty’s) possession prior to it being furnished to
such Holder (or Hedging Counterparty) by the Lead Holder or by the Issuer or on
the Issuer’s behalf.

 

(ii) 
After a Holder has been notified of its opportunity to include Registrable
Shares in a Piggyback Registration, such Holder (or Hedging Counterparty) shall
treat the Offering Confidential Information as confidential information and
shall not use the Offering Confidential Information for any purpose other than
to evaluate whether to include its Registrable Shares (or other shares of
Common Stock) in such Piggyback Registration and agrees not to disclose the
Offering Confidential Information to any Person other than such of its agents,
employees, advisors and counsel as have a need to know such Offering Confidential
Information and to cause such agents, employees, advisors and counsel to comply
with the requirements of this Section 2.10(e), provided,
that such Holder (or Hedging Counterparty) may disclose Offering Confidential
Information if such disclosure is required by legal process, but such Holder
(or Hedging Counterparty) shall cooperate with the Issuer to limit the extent
of such disclosure through protective order or otherwise, and to seek
confidential treatment of the Offering Confidential Information.

 

ARTICLE III

 

REGISTRATION PROCEDURES

 

Section 3.01.  Registration Procedures.  In connection with any registration of
Registrable Shares contemplated by this Agreement:

 

 

13

 

(a)      The Issuer shall, at least
three Business Days prior to the initial filing of the Registration Statement
with the SEC, furnish to Special Counsel a copy of such Registration Statement
as proposed to be filed (including documents to be incorporated by reference
therein, to the extent not then available via the SEC’s EDGAR system, but only
to the extent they expressly relate to any offering to be effected thereunder),
which will be subject to the reasonable review and comments of Special Counsel
during such three-Business-Day period, and the Issuer will not file the
Registration Statement (or any such documents incorporated by reference)
containing any statements with respect to any Holder or the plan of
distribution to which Special Counsel shall reasonably object in writing.  After the filing of the Registration
Statement, the Issuer will as promptly as reasonably practicable notify Special
Counsel of: (i) if the SEC has determined to not review the Registration
Statement, the effectiveness thereof; (ii) if the Registration Statement
is an ASRS, the filing thereof; or (iii) if the SEC has determined to
review the Registration Statement, such determination.  If a Registration Statement is subject to
review by the SEC: (A) the Issuer will as promptly as reasonably
practicable provide the Special Counsel with a copy of each comment letter
issued in respect of such Registration Statement and a copy of the Issuer’s
draft responses thereto (it being understood that preliminary drafts shall not
be required to be provided); (B) the Issuer shall further provide Special
Counsel with a copy of any proposed amendment to be filed with the SEC no less
than three Business Days prior to the Issuer’s proposed filing date, and each
such amendment will be subject to the reasonable review and comments of Special
Counsel during such three-Business-Day period; (C) the Issuer will not
file any such amendment containing any statements with respect to any Holder or
the plan of distribution to which Special Counsel shall reasonably object in
writing; and (D) once the Registration Statement is cleared from review,
the Issuer will as promptly as reasonably practicable inform Special Counsel of
the effectiveness thereof.

 

(b)      After the initial
Effective Time of a Registration Statement, the Issuer shall, at least two
Business Days prior to the filing of a post-effective amendment to the
Registration Statement or a prospectus (including a prospectus supplement, a
Free Writing Prospectus and any documents to be incorporated by reference in
the prospectus but only to the extent they expressly relate to an offering or a
Hedging Transaction under the Registration Statement), furnish a copy of such
proposed filing to Special Counsel (who will furnish such copy to any Hedging
Counterparty (if such filing relates to a Hedging Transaction) and any
underwriter (if such filing relates to an underwritten offering)), which will
be subject to the reasonable review and comments of Special Counsel during such
two-Business-Day period, and the Issuer will not file any such post-effective
amendment or prospectus that contains any statements with respect to any
Holder, Hedging Counterparty or underwriter or the plan of distribution to
which Special Counsel (on behalf of any Holder, any such Hedging Counterparty
or any underwriter) shall reasonably object in writing.

 

(c)      The Issuer shall as
promptly as reasonably practicable furnish to Special Counsel copies of any and
all transmittal letters and other correspondence with the SEC and all
correspondence (including comment letters, such as those contemplated by Section 3.01(a))
from the SEC to the Issuer relating to the Registration Statement or any
prospectus or any amendment or supplement thereto.

 

 

14

(d)      After a Registration
Statement is declared effective, and in connection with any underwritten
offering or Hedging Transaction under the Registration Statement, the Issuer
will furnish to the Lead Holder (for distribution to the Holders whose
Registrable Shares are included in such Registration Statement and to any
Hedging Counterparties and underwriters) such number of copies of the
Registration Statement, each amendment and supplement thereto (in each case
including all exhibits thereto but excluding documents (x) incorporated by
reference therein other than those that expressly relate to the offering,
Hedging Transaction or underwritten offering or (y) that are available via
the SEC’s EDGAR system), the prospectus included in such Registration Statement
(including any prospectus supplements) and such other documents as any such
Holders, Hedging Counterparties or underwriters may reasonably request through
the Lead Holder in order to facilitate the disposition of the Registrable
Shares included in the Registration Statement.

 

(e)      The Issuer will use
commercially reasonable efforts (i) to register or qualify the Registrable
Shares under such other securities or blue sky laws of such jurisdictions in
the United States (in the event an exemption is not available) as any Holder of
Registrable Shares covered by a Registration Statement, acting through the Lead
Holder, reasonably (in the light of such Holder’s intended plan of
distribution) requests and (ii) to cause such Registrable Shares to be
registered with or approved by such other governmental agencies or authorities
as may be necessary by virtue of the business and operations of the Issuer and
do any and all other acts and things that may be reasonably necessary or
advisable to enable such Holder to consummate the disposition in such jurisdictions
of the Registrable Shares owned by such Holder; provided
that the Issuer will not be required to (w) qualify generally to do
business in any jurisdiction where it would not otherwise be required to
qualify but for this paragraph (f), (x) conform its capitalization or the
composition of its assets at the time to the securities or blue sky laws of any
such jurisdiction, (y) subject itself to taxation in any such jurisdiction
or (z) consent to general service of process in any such jurisdiction.

 

(f)       The Issuer will as
promptly as reasonably practicable notify the Lead Holder and each other Holder
of Registrable Shares covered by the Registration Statement, at any time when a
prospectus relating thereto is required to be delivered (or deemed delivered)
under the 1933 Act, of the occurrence of an event of which the Issuer has
knowledge requiring the preparation of a supplement or amendment to such
prospectus so that, as thereafter delivered (or deemed delivered) to the
purchasers of such Registrable Shares, such prospectus will not contain an
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein, in light of
the circumstances under which they are made, not misleading, and, subject to Section 2.05,
the Issuer will as promptly as reasonably practicable prepare and furnish to
the Lead Holder a supplement to or an amendment of such prospectus so that, as
thereafter delivered (or deemed delivered) to the purchasers of such Registrable
Shares, such prospectus will not contain any untrue statement of material fact
or omit to state a material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances in which they
were made, not misleading.

 

(g)      The Issuer will use
commercially reasonable efforts to enter into reasonable and customary
agreements (including an underwriting, registration or similar agreement in
reasonable and customary form for the Issuer containing customary indemnification
and 

 

15

contribution
provisions) and use commercially reasonable efforts to take such other actions
as are reasonably required or requested by a Holder, underwriter or Hedging
Counterparty, acting through the Lead Holder, in order to expedite or
facilitate the disposition of any Registrable Shares in a manner permitted by
this Agreement and the Spinco Agreement; provided, that (i) any
legal opinion that the Issuer is required to use commercially reasonable
efforts to obtain pursuant to the foregoing may be rendered by the Issuer’s
General Counsel (or another appropriate in-house lawyer), unless the Person to
whom such opinion is to be delivered will not accept a “10b-5-opinion” from
such counsel, in which case the Issuer shall use commercially reasonable
efforts to obtain such legal opinion from the Issuer’s outside counsel; and (ii) in
no event shall the Issuer be required to obtain more than two comfort letters
from the Issuer’s public accountants in connection with any Registration
Statement.

 

(h)      Upon execution of a
customary confidentiality agreement, the Issuer will make available for
inspection by any Holder of Registrable Shares covered by a Registration
Statement, any Hedging Counterparty in connection with any Hedging Transaction,
any underwriter participating in an underwritten offering pursuant to the
Registration Statement, Special Counsel, and any attorney, accountant or other
professional retained by any such Holder, Hedging Counterparty or underwriter
(collectively, the “Inspectors”),
all financial and other records, pertinent corporate documents and properties
of the Issuer (collectively, the “Records”) and
cause the Issuer’s and its significant subsidiaries’ officers, directors and employees
to, and shall use commercially reasonable efforts to cause the Issuer’s
independent accountants to, as promptly as reasonably practicable, supply all
information reasonably requested by any Inspector in connection with such
Registration Statement, Hedging Transaction or underwritten offering, in each
case, to the extent reasonably necessary to establish the applicable Person’s
due diligence defense under U.S. securities laws; provided
that in no event shall the Issuer be required to make available to the Holders
any information which the Board of Directors in its good faith judgment
believes is competitively sensitive or otherwise is confidential.  The Inspectors shall coordinate with one
another so that the inspection permitted hereunder will not unnecessarily
interfere with the Issuer’s conduct of business.  In any event, Records which the Issuer
determines, in good faith, to be confidential and which it notifies or
otherwise identifies in writing to the Inspectors are confidential shall not be
disclosed by the Inspectors unless (and only to the extent that) (i) the
disclosure of such Records is necessary to permit a Holder to enforce its
rights under this Agreement or (ii) the release of such Records is ordered
pursuant to a subpoena or other order from a court of competent
jurisdiction.  Each Holder agrees that
information obtained by it as a result of such inspections shall be deemed
confidential and shall not be used by it as the basis for any market transactions
in the securities of the Issuer or its Affiliates unless and until such is made
generally available to the public by the Issuer or such Affiliate or for any
reason not related to the registration of Registrable Securities.  Each Holder further agrees that it will, upon
learning that disclosure of such Records is sought in a court of competent
jurisdiction, cause the Lead Holder to give notice to the Issuer and allow the
Issuer, at its expense, to undertake appropriate action to prevent disclosure
of the Records deemed confidential.

 

(i)       The Issuer will
otherwise use commercially reasonable efforts (i) to comply with all
applicable rules and regulations of the SEC to the extent necessary to
permit it to lawfully fulfill its obligations under this Agreement, and (ii) to
make available to its security holders, as promptly as reasonably practicable,
an earnings statement covering a period of 12 months, 

 

 

16

beginning
upon the first disposition of Registrable Shares pursuant to a Registration
Statement, which earnings statement shall satisfy the provisions of Section 11(a) of
the 1933 Act.

 

(j)       The Issuer will use its
commercially reasonable efforts to cause all Registrable Shares to be listed on
each securities exchange on which the Common Stock is listed.

 

(k)      The Issuer will prepare
and file with the SEC, as promptly as reasonably practicable upon the request
of any Holder, acting through the Lead Holder, any amendments or supplements to
a Registration Statement or prospectus which, in the reasonable opinion of
Special Counsel, is required under the 1933 Act in connection with the
distribution of the Registrable Shares contemplated by the Registration
Statement or prospectus.

 

(l)       The Issuer will use
commercially reasonable efforts to timely file the reports and materials
required to be filed by it under the 1933 Act and the 1934 Act to enable the
Holders to sell Registrable Shares without registration under the 1933 Act
within the limitation of the exemption provided by Rule 144.   As promptly as reasonably practicable
following its receipt of the request of the Lead Holder (acting on behalf of a
Holder), the Issuer will deliver to the Lead Holder (which shall deliver to
such Holder) a written statement as to whether it has complied with such requirements,
and shall use commercially reasonable efforts to provide such assurances as any
broker or dealer facilitating a sale of Registrable Shares under Rule 144
may reasonably request.

 

(m)     The Issuer shall
reasonably cooperate with each Holder, acting through the Lead Holder, in the
disposition (provided such disposition is permitted by the Spinco Agreement) of
such Holder’s Registrable Shares in accordance with the terms of this
Agreement.  Such cooperation shall
include the endorsement and transfer of any certificates representing
Registrable Shares (or a book-entry transfer to similar effect) transferred in
accordance with this Agreement.

 

Section 3.02.  Holder Responsibilities.

 

(a)      The Issuer may require
each Holder of Registrable Shares included in a Registration Statement and each
Hedging Counterparty in respect of a Hedging Transaction as promptly as
reasonably practicable to furnish in writing to the Issuer, through the Lead
Holder, such information regarding such Holder, the Hedging Counterparty or the
distribution of the Registrable Shares as the Issuer may from time to time
reasonably request and such other information as may be legally required in
connection with such registration.  If a
Holder or Hedging Counterparty fails to provide the requested information after
being given 15 Business Days’ written notice of such request and the requested
information is required by applicable law to be included in the Registration
Statement, the Issuer shall be entitled to refuse to include for registration such
Holder’s Registrable Shares or other shares of Common Stock in connection with
such Hedging Counterparty’s Hedging Transaction, as the case may be.

 

(b)      In connection with any
disposition of Registrable Shares pursuant to a Registration Statement, each
Holder agrees that it will not use any Free Writing Prospectus 

 

 

17

without
the prior consent of the Issuer, which consent will not be unreasonably
withheld or delayed.

 

(c)      Each Holder agrees that,
upon receipt of any written notice from the Lead Holder or the Issuer of the
happening of any event of the kind described in Section 3.01(f), such
Holder will forthwith discontinue the disposition of such Holder’s Registrable
Shares pursuant to the Registration Statement until such Holder’s receipt of
the copies of the supplemented or amended prospectus contemplated by Section 3.01(f).  If the Issuer shall give such notice with
regards to any Demand Registration Statement, the Effectiveness End Date in
respect of such Registration Statement shall be extended by the number of days
during the period from and including the date such notice was given by the
Issuer to the date when the Issuer shall have made available to the Lead Holder
a prospectus or prospectus supplement that conforms with the requirements of Section 3.01(f).

 

(d)      Each Holder will as
promptly as reasonably practicable notify the Issuer and the Lead Holder, at
any time when a prospectus relating thereto is required to be delivered (or
deemed delivered) under the 1933 Act, of the occurrence of an event, of which
such Holder has knowledge, relating to such Holder or its disposition of
Registrable Shares thereunder requiring the preparation of a supplement or
amendment to such prospectus so that, as thereafter delivered (or deemed
delivered) to the purchasers of such Registrable Shares, such prospectus will
not contain an untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they are made, not
misleading.

 

ARTICLE IV

 

LOCK-UP AGREEMENTS

 

If requested by the managing underwriters in
connection with an underwritten offering of Registrable Shares under a
Registration Statement, each of the Holders and the Issuer shall execute and
deliver agreements (“Lock-up Agreements”)
containing customary restrictions on their ability to sell, offer to sell, or
otherwise dispose of any shares of Common Stock or any securities convertible
into or exercisable for such stock (or enter into any hedging or similar
transaction with an economic effect similar to any of the foregoing); provided that such restrictions shall be the same for all
such Persons and shall not have a duration in excess of the shortest period
required by the managing underwriters and in any event not more than 180 days
after the completion of such offering. 
Any Lock-up Agreements executed by the Holders shall contain provisions
naming the Issuer as an intended third-party beneficiary thereof and requiring
the prior written consent of the Issuer for any amendments thereto or waivers
thereof.  Any Lock-up Agreements executed
by the Issuer shall contain provisions naming the Holders as intended
third-party beneficiary thereof and requiring the prior written consent of the
Holders for any amendments thereto or waivers thereof.

 

 

18

 

ARTICLE V

 

INDEMNIFICATION

 

Section 5.01.  Indemnification By the Issuer.  The Issuer agrees to indemnify and hold
harmless to the fullest extent permitted by law each Holder whose Registrable
Shares are covered by the Registration Statement, its officers, directors and
each Person, if any, who controls such Holder within the meaning of Section 15
of the 1933 Act or Section 20 of the 1934 Act, from and against any and
all losses, claims, damages, liabilities, and expenses, or any action or
proceeding in respect thereof (each, a “Liability” and
collectively, “Liabilities”) (including
reimbursement of such Holder for any legal or any other expenses reasonably
incurred by it in investigating or defending such Liabilities) arising out of
or based upon any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement or any prospectus relating to such
Registrable Shares (or in any amendment or supplement thereto), or arising out
of or based upon any omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, except insofar as such Liabilities arise out of or are based
upon any such untrue statement or omission or alleged untrue statement or
omission based upon information furnished in writing to the Issuer by such
Holder or on such Holder’s behalf, in either such case expressly for use
therein; provided, that with
respect to any untrue statement or omission or alleged untrue statement or
omission made in any prospectus, the indemnity agreement contained in this
paragraph shall not apply to the extent that any such Liability results from (a) the
fact that a current copy of the prospectus was not sent or given to the Person
asserting any such Liability at or prior to the written confirmation of the
sale of the Registrable Shares concerned to such Person if it is determined
that the Issuer has provided such prospectus and it was the responsibility of
such Holder or its agents to provide such Person with a current copy of the
prospectus and such current copy of the prospectus would have cured the defect
giving rise to such Liability, (b) the use of any prospectus by or on
behalf of any Holder after the Issuer has notified such Person (i) that
such prospectus contains an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, (ii) that a stop order has been issued by the SEC
with respect to the Registration Statement or (iii) that a Disadvantageous
Condition exists or (c) the use of any prospectus by or on behalf of any
Holder with respect to any Registrable Shares after such time as the Issuer’s
obligation to keep the Registration Statement effective in respect of such
Registrable Shares has expired.

 

Section 5.02.  Indemnification By Holders of Registrable
Shares. Each Holder whose
Registrable Shares are included in the Registration Statement agrees, severally
and not jointly, to indemnify and hold harmless to the fullest extent permitted
by law (including reimbursement of the Issuer for any legal or any other
expenses reasonably incurred by it in investigating or defending such
Liabilities) the Issuer, its officers, directors, agents, and each Person, if
any, who controls the Issuer within the meaning of either Section 15 of
the 1933 Act or Section 20 of the 1934 Act, to the same extent as the
foregoing indemnity from the Issuer to such Holder in Section 5.01, but
only (i) to the extent such Liabilities arise out of or are based upon
information furnished in writing by such Holder or on such Holder’s behalf, in
either case expressly for use in the Registration Statement, prospectus or in
any amendment or supplement thereto relating to such Holder’s Registrable
Shares or (ii) to the extent that any Liability described in this Section

 

 

19

5.02 results from (a) the fact that a
current copy of the prospectus was not sent or given to the Person asserting
any such Liability at or prior to the written confirmation of the sale of the
Registrable Shares concerned to such Person if it is determined that it was the
responsibility of such Holder or its agent to provide such Person with a
current copy of the prospectus and such current copy of the prospectus would
have cured the defect giving rise to such loss, claim, damage, liability or
expense, (b) the use of any prospectus by or on behalf of any Holder after
the Issuer has notified such Person (x) that such prospectus contains an
untrue statement of a material fact or omits to state a material fact required
to be stated therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading, (y) that
the SEC has issued a stop order with respect to the Registration Statement or (z) that
a Disadvantageous Condition exists or (c) the use of any prospectus by or
on behalf of any Holder after such time as the obligation of the Issuer to keep
the related Registration Statement in respect of such Holder’s Registrable
Shares effective has expired.

 

Section 5.03. 
Conduct Of Indemnification Proceeding.  After receipt by
any Person (an “Indemnified Party”) of any notice
of the commencement of any action, suit, proceeding or investigation or threat
thereof in respect of which indemnity may be sought pursuant to Section 5.01
or 5.02, such Indemnified Party shall as promptly as reasonably practicable
notify the Person against whom such indemnity may be sought (the “Indemnifying Party”) in writing.  Following notice of commencement of any such
action given to the Indemnifying Party as above provided, the Indemnifying
Party shall be entitled to participate in and, to the extent it may wish,
jointly with any other Indemnifying Party similarly notified, to assume the
defense of such action at its own expense, with counsel reasonably satisfactory
to such Indemnified Party.  In any such
proceeding so assumed by the Indemnifying Party, any Indemnified Party shall
have the right to retain its own counsel, but the fees and expenses of such
counsel shall be at the expense of such Indemnified Party unless (i) the
Indemnifying Party and the Indemnified Party shall have mutually agreed to the
retention of such counsel or (ii) representation of both parties by the
same counsel would be inappropriate due to actual or potential differing or
conflicting interests between them.  It
is understood that the Indemnifying Party, in connection with any proceeding or
related proceedings in the same jurisdiction, shall be liable only for the
reasonable fees and expenses of one firm of attorneys (in addition to any
necessary local counsel) at any time for all such Indemnified Parties, and that
all such fees and expenses shall be reimbursed as they are incurred upon
submission of reasonably itemized invoices that comply with the Issuer’s
standard billing policies for outside counsel. 
In the case of any such separate firm for Holders who are entitled to
indemnity pursuant to Section 5.01, such firm shall be designated in
writing by the Indemnified Party who had the largest number of Registrable
Shares included in the Registration Statement at issue.  The Indemnifying Party shall not be liable
for any settlement of any proceeding effected without its written consent,
which consent shall not be unreasonably withheld, but if settled with such
consent, or if there be a final judgment for the plaintiff, the Indemnifying
Party shall indemnify and hold harmless such Indemnified Parties from and
against any loss or liability (to the extent stated above) by reason of such
settlement or judgment.  No Indemnifying
Party shall, without the prior written consent of the Indemnified Party, effect
any settlement of any pending or threatened proceeding in respect of which any
Indemnified Party is or could have been a party and indemnity could have been
sought hereunder by such Indemnified Party, unless such settlement includes an
unconditional release of such Indemnified Party from all liability arising out
of such proceeding.

 

 

 

20

 

Section 5.04.  Contribution.

 

(a)      If the indemnification
provided for hereunder shall for any reason be held by a court of competent
jurisdiction to be unavailable to an Indemnified Party in respect of any
Liability referred to herein, then each such Indemnifying Party, in lieu of
indemnifying such Indemnified Party, shall contribute to the amount paid or
payable by such Indemnified Party as a result of such Liabilities between the
Issuer on the one hand and each Holder whose Registrable Shares are covered by
the Registration Statement in issue on the other, in such proportion as is
appropriate to reflect the relative fault of the Issuer and of each such Holder
in connection with any untrue statement of a material fact contained in the
Registration Statement, any prospectus or any amendment or supplement thereto
or caused by any omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading,
which resulted in such Liabilities, as well as any other relevant equitable
considerations.  The relative fault of
the Issuer on the one hand and of each such Holder on the other shall be
determined by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by such party, and the parties’
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.

 

(b)      The Issuer and the
Holders (including each Permitted Transferee) agree that it would not be just
and equitable if contribution pursuant to this Section 5.04 were
determined by pro rata allocation or by any
other method of allocation which does not take account of the equitable
considerations referred to in the immediately preceding paragraph.  The amount paid or payable by an Indemnified
Party as a result of the Liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such Indemnified
Party in connection with investigating or defending any such action or
claim.  Notwithstanding the provisions of
this Article V, no Holder shall be required to contribute any amount in
excess of the amount by which the total price at which the Registrable Shares
sold by it under the Registration Statement exceeds the amount of any damages
that such Holder has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission.  No Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 1934
Act) shall be entitled to contribution from any Person who was not guilty of
such fraudulent misrepresentation.

 

ARTICLE VI

MISCELLANEOUS PROVISIONS

 

Section 6.01.  Recapitalization, Exchanges, etc.  The provisions of this Agreement shall apply
to the full extent set forth herein with respect to any and all securities into
which any of the Registrable Shares are converted, exchanged or substituted in
any recapitalization or other capital reorganization involving the Issuer and
any and all securities of the Issuer or any successor or assign or acquirer of
the Issuer (whether by merger, consolidation, sale of assets or otherwise)
which may be issued in respect of, in conversion of, in exchange for or in
substitution of, such Registrable Shares and shall be appropriately adjusted
for any dividends of Common 

 

 

21

Stock in respect of the Common Stock, stock
splits, reverse splits, combinations, recapitalizations and the like occurring
after the date hereof.  The Issuer shall
cause any successor or assign or acquiror (whether by merger, consolidation,
sale of assets or otherwise) to enter into a new registration rights agreement
with the Holders on terms no less favorable to such parties than the terms
provided under this Agreement as a condition of any such transaction.

 

Section 6.02.  Notices.  All notices, requests, claims and demands and
other communications hereunder shall be in writing and shall be deemed duly
delivered and received (i) three Business Days after the same are sent by
certified or registered mail, postage prepaid, return receipt requested, (ii) when
delivered by hand or transmitted by telecopy (answer back received), if
received prior to 5 p.m. on a Business Day, otherwise on the next Business
Day or (iii) one Business Day after the same are sent by a reliable
overnight courier service, with acknowledgment of receipt requested, in each
case to the intended recipient as set forth below:

 

If to Liberty or any Liberty Party, to:

 

Liberty
Media Corporation

12300
Liberty Boulevard

Englewood,
Colorado 80112

Attention:
General Counsel

Fax:
(720) 875-5382

 

with a copy to:

 

Baker
Botts L.L.P.

30
Rockefeller Plaza

New
York, New York  10112

Attention:  Frederick H. McGrath

Fax:
(212) 259-2530

 

If to the Issuer, to:

 

HSN, Inc.

1 HSN Drive

St. Petersburg, Florida 33729

Attention: General Counsel

Fax:  (727) 872-6866

 

Any
party to this Agreement may give any notice or other communication hereunder
using any other means (including personal delivery, messenger service, telecopy
or ordinary mail), but no such notice or other communication shall be deemed to
have been duly given unless and until it actually is received by the office of
the party for whom it is intended during business hours on a Business Day in
the place of receipt.  Any party to this
Agreement may change the address to which notices and other communications
hereunder are to be delivered by giving the other parties to this Agreement
notice in the manner herein set forth. 
Each Person (other than Liberty or a Liberty Party) upon becoming a
Holder hereunder shall concurrently provide notice to the other parties hereto
of such Holder’s address.  The Issuer
shall have no obligation to deliver any 

 

22

 

notices
under this Agreement to or otherwise interact with any purported Holder that
has not provided notice to the Issuer pursuant to the preceding sentence, and
no such Person shall have any rights under this Agreement unless and until such
Person delivers such notice.

 

Section 6.03.  Entire Agreement; No Inconsistent
Agreements.

 

(a)      This Agreement, together
with the Spinco Agreement, constitutes the entire agreement among the parties
hereto and supersedes any prior understandings, agreements or representations
by or among the parties hereto, or any of them, written or oral, with respect
to the subject matter hereof.

 

(b)      The Issuer shall not
hereafter enter into or amend any agreement with respect to its securities that
is inconsistent with the rights granted to the Holders of Registrable Shares in
this Agreement or otherwise conflicts with the provisions hereof in a manner
adverse to the Holders.

 

(c)      Prior to the date hereof
and except for any agreement to which Liberty is a party, the Issuer has not
granted any “piggyback” or other registration rights to any Person that would
entitle any Person (other than the Holders) to participate in any registration
contemplated by this Agreement.

 

(d)      The Issuer will not grant
any “piggyback” or other registration rights to any Person that would entitle
that Person (other than the Holders) to participate in any Demand Registration
Statement except on terms that are no less favorable to the Holders than those
applicable to Other Shareholders as set forth in Section 2.10(e)(ii).

 

Section 6.04.  Further Assurances.  Each of the parties shall execute such
documents and perform such further acts as may be reasonably required or
desirable to carry out or perform the provisions of this Agreement.

 

Section 6.05.  No Third-Party Beneficiaries.  Except as provided in Sections 2.09, 5.01,
and 5.02, this Agreement is not intended, and shall not be deemed, to confer
any rights or remedies upon any Person other than the parties hereto and their
respective successors and permitted assigns or to otherwise create any
third-party beneficiary hereto.

 

Section 6.06.  Assignment.  This Agreement shall be binding upon, shall
inure to the benefit of, and shall be enforceable by the parties hereto and
their respective successors and permitted assigns and, with respect to each
Holder, any Permitted Transferee.  No
assignment (other than in accordance with Section 6.01) or transfer shall
be effective hereunder unless and until the purported transferee executes and
delivers an agreement, in form and substance reasonably acceptable to the
parties, agreeing to be bound by the terms hereof.  Notwithstanding anything to the contrary in
this Agreement, other than an assignment contemplated by Section 6.01, the
Issuer may not assign its obligations hereunder.

 

Section 6.07.  Amendments and Waivers.  Except as otherwise provided herein, the
provisions of this Agreement may not be amended, modified or supplemented, and
waivers or consents to departures from the provisions hereof may not be given,
unless, following the approval of a majority of the Qualified Directors (as
defined in the Spinco Agreement) of the

 

 

23

Issuer, consented to in writing by the Issuer
and Holders of at least 50% of the Registrable Shares held by all Holders of
Registrable Shares as of such date.

 

Section 6.08.  Nominees for Beneficial Owners.  If any Registrable Shares are held by a
nominee for the beneficial owner thereof, the beneficial owner thereof may, at
its election in writing delivered to the Issuer through the Lead Holder, be
treated as the Holder of such Registrable Shares for purposes of any request,
consent, waiver or other action by any Holder or Holders of Registrable Shares
pursuant to this Agreement or any determination of any number or percentage of
Registrable Shares held by any Holder or Holders of Registrable Shares contemplated
by this Agreement.  If the beneficial
owner of any Registrable Shares makes the election provided in this Section 6.08,
the Issuer may require assurances reasonably satisfactory to it of such owner’s
beneficial ownership of such Registrable Shares.

 

Section 6.09.  Severability.  Any term or provision of this Agreement that
is invalid or unenforceable in any situation in any jurisdiction shall not
affect the validity or enforceability of the remaining terms and provisions
hereof or the validity of the offending term or provision in any other
situation or in any other jurisdiction. 
If the final judgment of a court of competent jurisdiction declares that
any term or provision hereof is invalid or unenforceable, the parties hereto
agree that the court making such determination shall have the power to limit
the term or provision, to delete specific words or phrases, or to replace any
invalid or unenforceable term or provision with a term or provisions that is
valid and enforceable and that comes closest to expressing the intention of the
invalid or unenforceable term or provision, and this Agreement shall be
enforceable as so modified.  In the event
such court does not exercise the power granted to it in the prior sentence, the
parties hereto agree to replace such invalid or unenforceable term or provision
with a valid and enforceable term or provision that shall achieve, to the
extent possible, the economic, business and other purposes of such invalid or
unenforceable term.

 

Section 6.10.  Counterparts and Signature.  This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which
together shall be considered one and the same agreement and shall become
effective when counterparts have been signed by each of the parties hereto and
delivered to the other parties, it being understood that all parties need not
sign the same counterpart.  This
Agreement may be executed and delivered by facsimile transmission.

 

Section 6.11.  Interpretation.  When reference is made in this Agreement to a
Section, such reference shall be to a Section of this Agreement, unless
otherwise indicated.  The headings
contained in this Agreement are for convenience of reference only and shall not
affect in any way the meaning or interpretation of this Agreement.  The language used in this Agreement shall be
deemed to be the language chosen by the parties hereto to express their mutual
intent, and no rule of strict construction shall be applied against any
party.  Whenever the context may require,
any pronouns used in this Agreement shall include the corresponding masculine,
feminine or neuter forms, and the singular form of nouns and pronouns shall
include the plural, and vice versa.  Any
reference to any federal, state, local or foreign statute or law shall be
deemed also to refer to all rules and regulations promulgated thereunder,
unless the context requires otherwise. 
Whenever the words “include”, “includes” or “including” are used in this
Agreement, they shall be deemed to be followed by the words “without
limitation.”

 

 

24

Section 6.12.  Governing Law; Consent To Jurisdiction.  This Agreement shall be construed in
accordance with and governed by the internal laws of the State of Delaware,
without giving effect to the principles of conflicts of laws.  Each of the parties hereto hereby irrevocably
and unconditionally consents to submit to the exclusive jurisdiction of the
courts of the State of Delaware, for any action, proceeding or investigation in
any court or before any governmental authority (“Litigation”)
arising out of or relating to this Agreement and the transactions contemplated
hereby and further agrees that service of any process, summons, notice or
document by U.S. mail to its respective address set forth in this Agreement
shall be effective service of process for any Litigation brought against it in
any such court.  Each of the parties
hereto hereby irrevocably and unconditionally waives any objection to the
laying of venue of any Litigation arising out of this Agreement or the
transactions contemplated hereby in the courts of the State of Delaware, and
hereby further irrevocably and unconditionally waives and agrees not to plead
or claim in any such court that any such Litigation brought in any such court
has been brought in an inconvenient forum. 
Each of the parties irrevocably and unconditionally waives, to the
fullest extent permitted by applicable law, any and all rights to trial by jury
in connection with any Litigation arising out of or relating to this Agreement
or the transactions contemplated hereby.

 

Section 6.13.  Remedies; Limitation on Liability.  (a)  Except as otherwise provided
herein, any and all remedies herein expressly conferred upon a party shall be
deemed cumulative with and not exclusive of any other remedy conferred hereby,
or by law or equity upon such party, and the exercise by a party of any one
remedy shall not preclude the exercise of any other remedy.  The parties hereto 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, this being in addition to any other remedy to which the
parties are entitled at law or in equity.

 

(b) 
In no event shall the Issuer have any liability to any Holder or other Person
under this Agreement for any act or failure to act by the Lead Holder in
accordance with the terms hereof, each of which Holder agrees that its sole
remedy, whether at equity or in law, in any such case shall be against the Lead
Holder, and further agrees not to bring any action against the Issuer or any of
Affiliates in connection with any such act or failure to act by the Lead
Holder.  Except in respect of the Issuer’s
indemnification obligations under Article V of this Agreement, each Holder
(other than the Lead Holder) hereby assigns to the Lead Holder such Holder’s
right under this Agreement to bring any action or to pursue any remedy against
the Issuer or any of its Affiliates for any breach or violation, or any alleged
or threatened breach or violation, by the Issuer of its obligations under this
Agreement, and each such Holder (other than the Lead Holder) hereby agrees not
to directly bring any such action or to pursue any such remedy against the
Issuer or any of its Affiliates therefor. 
The Issuer agrees not to challenge the standing of the Lead Holder to
bring any such claim or cause of action or pursue any remedy in the name of the
Lead Holder on behalf of a Holder.  Any
Holder and the Lead Holder may execute such instruments, including an
assignment of any claims, as may be necessary to permit the Leader Holder to
validly pursue any action or remedy on behalf of a Holder pursuant to this Section 6.13
and to preserve any injured Holder’s right to receive any recovery obtained by
the Lead Holder on behalf of such Holder.

 

 

25

 

Section 6.14.  Confidentiality.  Each Holder agrees not to (and to cause any
Hedging Counterparty to a Hedging Transaction with such Holder not to) disclose
without the prior written consent of the Issuer any information (i) regarding
the Issuer’s exercise of any of its rights under Section 2.05 or Section 3.01(f) or
(ii) obtained pursuant to this Agreement which the Issuer identifies to be
proprietary to the Issuer or otherwise confidential. Notwithstanding the foregoing,
each Holder or Hedging Counterparty may disclose such information to such of
its agents, employees, advisors and counsel as have a need to know such
information provided that such Holder shall cause such agents, employees,
advisors and counsel to comply with the requirements of this Section 6.14,
provided, that such Holder or Hedging
Counterparty may disclose such information if (and only to the extent that) (A) such
disclosure is necessary to permit a Holder to enforce its rights under this
Agreement or (B) such disclosure is required by legal process, but such
Holder or Hedging Counterparty shall cooperate with the Issuer to limit the
extent of such disclosure through protective order or otherwise, and to seek
confidential treatment of such information. Each Holder further acknowledges,
understands and agrees (and shall cause any such Hedging Counterparty to agree)
that any confidential information will not be utilized in connection with
purchases and/or sales of the Issuer’s securities except in compliance with
applicable state and federal antifraud statutes.

 

Section 6.15. 
Termination.  This
Agreement (other than Article V and Article VI) shall terminate and
be of no further force and effect at the first such time as there are no
Registrable Shares or, if earlier, at such time as the Issuer has registered
pursuant to this Agreement an aggregate number of sales or transfers of
Registrable Shares or other shares of Common Stock equal to the Total
Registrable Amount (it being specified, for the avoidance of doubt, that a sale
or transfer of a Registrable Share or other share of Common Stock shall be
considered to have been registered for purposes of this Section 6.15 in
the circumstances specified in the last sentence of Section 2.04(a)); provided, that any such termination
shall not relieve any party of any liability for any breach of this Agreement
prior to such termination.

 

 

26

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

 

	
  Liberty Media Corporation,
  

  	
   

  	
  HSN,
  INC., a Delaware corporation

  
	
  a Delaware corporation

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ Craig Troyer

  	
   

  	
  /s/ Joanne Hawkins

  
	
  Name: 

  	
  Craig Troyer

  	
   

  	
  Name:

  	
  Joanne Hawkins

  
	
  Title:

  	
  Vice President

  	
   

  	
  Title:

  	
  Vice President and
  Assistant Secretary

  

 

 

	
  Liberty USA Holdings, LLC

  	
   

  	
   

  	
   

  
	
  a Delaware limited
  liability company

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By: Liberty Programming
  Company LLC, its

  sole member and manager

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By: LMC Capital LLC, its
  sole member and manager

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  /s/ Craig Troyer

  	
   

  	
   

  	
   

  
	
  Name:

  	
  Craig Troyer

  	
   

  	
   

  	
   

  
	
  Title:

  	
  Vice President

  	
   

  	
   

  	
   

  

 

 

[Signature Page to HSN
Registration Rights Agreement (Liberty)]

 

 

 

ANNEX A

 

PLAN
OF DISTRIBUTION

 

Each of the selling stockholders, including
certain transferees who may later hold its interest in the shares covered by
this prospectus and who are otherwise entitled to resell the shares using this
prospectus, may sell the shares covered by this prospectus from time to time in
any legal manner selected by the selling stockholder, including directly to
purchasers or through underwriters, broker-dealers or agents, who may receive
compensation in the form of discounts, concessions or commissions from the
selling stockholder or the purchasers. 
These discounts, concessions or commissions as to any particular
underwriter, broker-dealer or agent may be in excess of those customary in the
types of transactions involved.  The
selling stockholders will act independently of us in making decisions with
respect to the timing, manner and size of each sale of the shares covered by
this prospectus.

 

Each selling stockholder has advised us that
its shares may be sold in one or more transactions at fixed prices, at
prevailing market prices at the time of sale, at prices related to the
prevailing market prices, at varying prices determined at the time of sale
and/or at negotiated prices. These sales may be effected in one or more
transactions, including:

 

·                  on the New York Stock Exchange or the Nasdaq
Stock Market;

 

·                  in the over-the-counter market;

 

·                  in transactions otherwise than on the New
York Stock Exchange or the Nasdaq Stock Market or in the over-the-counter
market; or

 

·                  any combination of the foregoing.

 

In addition, the selling stockholders may
also enter into hedging and/or monetization transactions. For example, a
selling stockholder may:

 

·                  enter into transactions with a broker-dealer
or affiliate of a broker-dealer or other third party in connection with which
that other party will become a selling stockholder and engage in short sales of
shares under this prospectus, in which case the other party may use shares
received from the selling stockholder to close out any short positions;

 

·                  itself sell short the shares under this
prospectus and use the securities held by it to close out any  short position;

 

·                  enter into options, forwards or other
transactions that require the selling stockholder to deliver, in a transaction
exempt from registration under the Securities Act, the securities to a
broker-dealer or an affiliate of a broker-dealer or other third party who may
then become a selling stockholder and publicly resell or otherwise transfer the
securities under this prospectus; or

 

·                  loan or pledge the securities to a
broker-dealer or affiliate of a broker-dealer or other third party who may
then  become a selling stockholder and
sell the loaned securities 

 

 

A-1

 

or,
in an event of default in the case of a pledge, become a selling stockholder
and sell the pledged securities, under this prospectus.

 

Each selling stockholder has advised us that
it has not entered into any agreements, arrangements or understandings with any
underwriter, broker-dealer or agent regarding the sale of its shares. However,
we are required, under a registration rights agreement relating to the shares
being sold under this prospectus, to enter into customary underwriting and
other agreements in connection with the distribution of the securities under
this prospectus.  The specific terms of
any such underwriting or other agreement will be disclosed in a supplement to
this prospectus filed with the SEC under Rule 424(b) under the
Securities Act, or, if appropriate, a post-effective amendment to the
registration statement of which this prospectus forms a part.  Each selling stockholder may sell any or all
of the shares offered by it pursuant to this prospectus.  In addition, there can be no assurance that
any selling stockholder will not transfer, devise or gift its shares by other
means not described in this prospectus.

 

There can be no assurance that a selling
stockholder will sell any or all of its shares pursuant to this prospectus. In
addition, any shares covered by this prospectus that qualify for sale pursuant
to Rule 144 of the Securities Act may be sold under Rule 144 rather
than pursuant to this prospectus.

 

The aggregate proceeds to a selling
stockholder from the sale of the shares offered by it will be the purchase
price of the shares less discounts and commissions, if any. If the shares are
sold through underwriters or broker-dealers, the selling stockholder will be
responsible for underwriting discounts and commissions and/or agent’s
commissions. We will not receive any of the proceeds from the sale of the
shares covered by this prospectus.

 

In order to comply with the securities laws
of some states, if applicable, the shares may be sold in these jurisdictions
only through registered or licensed brokers or dealers. In addition, in some
states the shares may not be sold unless they have been registered or qualified
for sale or an exemption from registration or qualification requirements is
available and is complied with.

 

Any underwriters, broker-dealers or agents
that participate in the sale of the securities may be deemed to be “underwriters”
within the meaning of Section 2(11) of the Securities Act.  As a result, any profits on the sale of the
shares by the selling stockholder and any discounts, commissions or concessions
received by any such broker-dealers or agents may be deemed to be underwriting
discounts and commissions under the Securities Act.

 

To the extent required, the shares to be
sold, the names of the selling stockholders, the respective purchase prices and
public offering prices, the names of any agent, dealer or underwriter, and any
applicable commissions or discounts with respect to a particular offer will be
set forth in an accompanying prospectus supplement or, if appropriate, a
post-effective amendment to the registration statement of which this prospectus
is a part.

 

We have agreed to indemnify each selling
stockholder and its directors, officers and controlling Persons against certain
liabilities, including specified liabilities under the Securities Act, or to
contribute with respect to payments which the selling stockholder may be
required to make in respect of such liabilities. The selling stockholder has
agreed to indemnify us for 

 

 

A-2

 

liabilities arising under
the Securities Act with respect to written information furnished to us by it or
to contribute with respect to payments in connection with such liabilities.

 

We have agreed to pay certain costs, fees and
expenses incident to our registration of the resale of the selling stockholder’s
shares, excluding legal fees of the selling stockholders, commissions, fees and
discounts of underwriters, brokers, dealers and agents and certain other
expenses.

 

Under our registration rights agreement with
the selling stockholders, we will use our commercially reasonable efforts to
keep the registration statement of which this prospectus is a part continuously
effective, subject to customary suspension periods, until the earlier of (i) the
30th day (or, if such registration statement is on Form S-3, the 90th day)
after such registration statement is initially declared effective, and (ii) the
date that there are no longer any securities covered by such registration
statement.

 

Our
obligation to keep the registration statement to which this prospectus relates
effective is subject to specified, permitted exceptions. In these cases, we may
suspend offers and sales of the shares pursuant to the registration statement
to which this prospectus relates.

 

 

A-3

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