As filed with the Securities and Exchange Commission on November 4, 2016

Registration No. 333-210377

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 


 

POST-EFFECTIVE AMENDMENT NO. 1

 

TO

 

FORM S-1

 

ON

 

FORM S-4

 

REGISTRATION STATEMENT

UNDER THE SECURITIES ACT OF 1933

 


 

LIBERTY EXPEDIA HOLDINGS, INC.

(Exact name of Registrant as specified in its charter)

 

Delaware

 

6719

 

81-1838757

(State or other jurisdiction
of incorporation or organization)

 

(Primary Standard Industrial
Classification code number)

 

(I.R.S. Employer
Identification No.)

 

12300 Liberty Boulevard, Englewood, Colorado 80112, (720) 875-5800

(Address, including zip code, and telephone number, including area code, of Registrant’s

principal executive offices)

 

Richard N. Baer

Liberty Expedia Holdings, Inc.

12300 Liberty Boulevard
Englewood, Colorado 80112
(720) 875-5800

(Name, address, including zip code, and telephone number,
including area code, of agent for service)

Copy to:
Renee L. Wilm

Baker Botts L.L.P.

30 Rockefeller Plaza

New York, New York 10112

(212) 408-2500

 

Approximate date of commencement of proposed sale to the public:  As soon as practicable after all conditions to the transaction registered hereby have been satisfied or waived, as applicable.

 

If the securities being registered on this form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box:  o

 

If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  o

 

If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier registration statement for the same offering.  x

 

Registration Number: 333-210377

 

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer o

Accelerated filer o

Non-accelerated filer x

Smaller reporting company o

(Do not check if a smaller reporting company)

 

 

 



 

EXPLANATORY NOTE

 

This Post-Effective Amendment No. 1 to Form S-1 on Form S-4 amends the Registration Statement on Form S-4 of Liberty Expedia Holdings, Inc. (the “Registrant”) (Registration No. 333-210377), as amended prior to the date hereto (the “Registration Statement”), which was declared effective by the Securities and Exchange Commission on September 30, 2016.

 

At 5:00 p.m. New York City time, today, Liberty Interactive Corporation (“Liberty Interactive”), the current parent company of the Registrant, will effect a redemption (the “Redemption”) pursuant to which (i) 0.4 of each outstanding share of Liberty Interactive’s Series A Liberty Ventures common stock will be redeemed for 0.4 of a share of the Registrant’s Series A common stock and (ii) 0.4 of each outstanding share of Liberty Interactive’s Series B Liberty Ventures common stock will be redeemed for 0.4 of a share of the Registrant’s Series B common stock. Cash will be paid in lieu of any fractional shares of Liberty Ventures common stock and the Registrant’s common stock. Immediately following the Redemption, the Registrant will be separated from Liberty Interactive and become a separate publicly traded company.

 

This Post-Effective Amendment No. 1 is being filed for the purposes of (i) replacing Exhibit 2.1: Form of Reorganization Agreement by and between Liberty Interactive and the Registrant, previously filed with the Registration Statement, with a final, executed version of Exhibit 2.1, (ii) replacing Exhibit 8.1: Form of Opinion of Skadden, Arps, Slate, Meagher & Flom LLP regarding certain tax matters, previously filed with the Registration Statement, with a final, executed version of Exhibit 8.1 and (iii) filing a new Exhibit 99.3: Form of Letter of Transmittal for holders of Liberty Interactive’s Liberty Ventures common stock. The Registration Statement is hereby amended, as appropriate, to reflect the replacement or filing, as applicable, of such exhibits.

 

Item 21.   Exhibits And Financial Statement Schedules.

 

(a) Exhibits. The following is a complete list of Exhibits filed as part of this registration statement.

 

Exhibit No.

 

Document

 

 

 

2.1

 

Reorganization Agreement, dated as of October 26, 2016, by and between Liberty Interactive Corporation and the Registrant.

 

 

 

3.1

 

Form of Restated Certificate of Incorporation of the Registrant to be in effect at the time of the Split-Off.**

 

 

 

3.2

 

Form of Bylaws of the Registrant to be in effect at the time of the Split-Off.**

 

 

 

4.1

 

Specimen Certificate for shares of Series A Common Stock, par value $0.01 per share, of the Registrant.**

 

 

 

4.2

 

Specimen Certificate for shares of Series B Common Stock, par value $0.01 per share, of the Registrant.**

 

 

 

5.1

 

Opinion of Baker Botts L.L.P. as to the legality of the securities being registered.**

 

 

 

8.1

 

Opinion of Skadden, Arps, Slate, Meagher & Flom LLP regarding certain tax matters.

 

 

 

10.1

 

Form of Liberty Expedia Holdings, Inc. 2016 Omnibus Incentive Plan.**

 

 

 

10.2

 

Form of Liberty Expedia Holdings, Inc. Transitional Stock Adjustment Plan.**

 

 

 

10.3

 

Form of Tax Sharing Agreement by and between the Registrant and Liberty Interactive Corporation.**

 

 

 

10.4

 

Form of Services Agreement by and between the Registrant and Liberty Media Corporation.**

 

 

 

10.5

 

Form of Facilities Agreement by and among the Registrant, Liberty Media Corporation and Liberty Property Holdings, Inc.**

 

 

 

10.6

 

Form of Indemnification Agreement by and between the Registrant and its executive officers/directors.**

 

II- 1



 

Exhibit No.

 

Document

 

 

 

10.7

 

Amended and Restated Governance Agreement among Expedia, Inc., Liberty Interactive Corporation and Barry Diller, dated as of December 20, 2011, (incorporated by reference to Exhibit 10.1 to Expedia, Inc.’s Current Report on Form 8-K (File No. 000-51447), filed with the Securities and Exchange Commission (the SEC) on December 27, 2011).

 

 

 

10.8

 

Form of Assignment and Assumption of Governance Agreement, by and among Liberty Expedia Holdings, Inc., Liberty Interactive Corporation, Barry Driller and Expedia, Inc.**

 

 

 

10.9

 

Forms of Aircraft Time Sharing Agreements.**

 

 

 

10.10

 

Amended and Restated Stockholders Agreement between Liberty Interactive Corporation and Barry Diller, dated as of December 20, 2011 (incorporated by reference to Exhibit 10.11 to Expedia Inc.’s Annual Report on Form 10-K (File No. 000-51447), filed with the SEC on February 9, 2012).

 

 

 

10.11

 

Form of Assignment and Assumption of Stockholders Agreement, by and among Liberty Expedia Holdings, Inc., Liberty Interactive Corporation and Barry Diller.**

 

 

 

10.12

 

Form of Amendment No. 1 to Stockholders Agreement, by and between Liberty Expedia Holdings, Inc. and Barry Diller.**

 

 

 

10.13

 

Amended and Restated Transaction Agreement, dated as of September 22, 2016, by and among Liberty Interactive Corporation, Liberty Expedia Holdings, Inc., Barry Diller, John C. Malone and Leslie Malone.**

 

 

 

10.14

 

Form of Proxy and Voting Agreement, by and among Barry Diller, John C. Malone and Leslie Malone.**

 

 

 

10.15

 

Form of Assignment Agreement, by and between Barry Diller and Liberty Expedia Holdings, Inc.**

 

 

 

21.1

 

List of Subsidiaries.**

 

 

 

23.1

 

Consent of KPMG LLP.**

 

 

 

23.2

 

Consent of Ernst & Young LLP.**

 

 

 

23.3

 

Consent of Baker Botts L.L.P. (included in Exhibit 5.1).**

 

 

 

23.4

 

Consent of Skadden, Arps, Slate, Meagher & Flom LLP (included in Exhibit 8.1).

 

 

 

24.1

 

Power of Attorney**

 

 

 

99.1

 

Executive and Director Compensation, extracted from the annual reports on Form 10-K/A for the year ended December 31, 2016 of each of Liberty Media Corporation and Liberty Interactive Corporation, filed on April 29, 2016.**

 

 

 

99.2

 

Form of Proxy Card**

 

 

 

99.3

 

Form of Letter of Transmittal for holders of Liberty Ventures common stock.

 


**           Previously filed.

 

(b) Financial Statement Schedules.   Schedules not listed above have been omitted because the information set forth therein is not material, not applicable or is included in the financial statements or notes of the proxy statement/prospectus which forms a part of this registration statement.

 

II- 2


 


 

SIGNATURES

 

Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Englewood, state of Colorado, on this 4th day of November, 2016.

 

 

 

LIBERTY EXPEDIA HOLDINGS, INC.

 

 

 

 

 

 

 

By:

/s/ Richard N. Baer

 

Name:

Richard N. Baer

 

Title:

Chief Legal Officer

 

 

Pursuant to the requirements of the Securities Act of 1933, as amended, this registration statement has been signed by the following persons in the capacities and on the dates indicated:

 

Name

 

Title

 

Date

 

 

 

 

 

*

 

President and Chief Executive Officer

 

 

Christopher W. Shean

 

(Principal Executive Officer)

 

 

 

 

 

 

 

*

 

Chief Financial Officer (Principal

 

 

Wade Haufschild

 

Financial and Principal Accounting Officer)

 

 

 

 

 

 

 

/s/ Richard N. Baer

 

Director

 

 

Richard N. Baer

 

 

 

November 4, 2016

 

 

*By:

/s/ Richard N. Baer

 

 

 

November 4, 2016

 

Richard N. Baer
Attorney-in-Fact

 

 

 

 

 


 


 

EXHIBIT INDEX

 

Exhibit No.

 

Document

 

 

 

2.1

 

Reorganization Agreement, dated as of October 26, 2016, by and between Liberty Interactive Corporation and the Registrant.

 

 

 

3.1

 

Form of Restated Certificate of Incorporation of the Registrant to be in effect at the time of the Split-Off.**

 

 

 

3.2

 

Form of Bylaws of the Registrant to be in effect at the time of the Split-Off.**

 

 

 

4.1

 

Specimen Certificate for shares of Series A Common Stock, par value $0.01 per share, of the Registrant.**

 

 

 

4.2

 

Specimen Certificate for shares of Series B Common Stock, par value $0.01 per share, of the Registrant.**

 

 

 

5.1

 

Opinion of Baker Botts L.L.P. as to the legality of the securities being registered.**

 

 

 

8.1

 

Opinion of Skadden, Arps, Slate, Meagher & Flom LLP regarding certain tax matters.

 

 

 

10.1

 

Form of Liberty Expedia Holdings, Inc. 2016 Omnibus Incentive Plan.**

 

 

 

10.2

 

Form of Liberty Expedia Holdings, Inc. Transitional Stock Adjustment Plan.**

 

 

 

10.3

 

Form of Tax Sharing Agreement by and between the Registrant and Liberty Interactive Corporation.**

 

 

 

10.4

 

Form of Services Agreement by and between the Registrant and Liberty Media Corporation.**

 

 

 

10.5

 

Form of Facilities Agreement by and among the Registrant, Liberty Media Corporation and Liberty Property Holdings, Inc.**

 

 

 

10.6

 

Form of Indemnification Agreement by and between the Registrant and its executive officers/directors.**

 

 

 

10.7

 

Amended and Restated Governance Agreement among Expedia, Inc., Liberty Interactive Corporation and Barry Diller, dated as of December 20, 2011, (incorporated by reference to Exhibit 10.1 to Expedia, Inc.’s Current Report on Form 8-K (File No. 000-51447), filed with the Securities and Exchange Commission (the SEC) on December 27, 2011).

 

 

 

10.8

 

Form of Assignment and Assumption of Governance Agreement, by and among Liberty Expedia Holdings, Inc., Liberty Interactive Corporation, Barry Driller and Expedia, Inc.**

 

 

 

10.9

 

Forms of Aircraft Time Sharing Agreements.**

 

 

 

10.10

 

Amended and Restated Stockholders Agreement between Liberty Interactive Corporation and Barry Diller, dated as of December 20, 2011 (incorporated by reference to Exhibit 10.11 to Expedia Inc.’s Annual Report on Form 10-K (File No. 000-51447), filed with the SEC on February 9, 2012).

 

 

 

10.11

 

Form of Assignment and Assumption of Stockholders Agreement, by and among Liberty Expedia Holdings, Inc., Liberty Interactive Corporation and Barry Diller.**

 

 

 

10.12

 

Form of Amendment No. 1 to Stockholders Agreement, by and between Liberty Expedia Holdings, Inc. and Barry Diller.**

 

 

 

10.13

 

Amended and Restated Transaction Agreement, dated as of September 22, 2016, by and among Liberty Interactive Corporation, Liberty Expedia Holdings, Inc., Barry Diller, John C. Malone and Leslie Malone.**

 

 

 

10.14

 

Form of Proxy and Voting Agreement, by and among Barry Diller, John C. Malone and Leslie Malone.**

 



 

Exhibit No.

 

Document

 

 

 

10.15

 

Form of Assignment Agreement, by and between Barry Diller and Liberty Expedia Holdings, Inc.**

 

 

 

21.1

 

List of Subsidiaries.**

 

 

 

23.1

 

Consent of KPMG LLP.**

 

 

 

23.2

 

Consent of Ernst & Young LLP.**

 

 

 

23.3

 

Consent of Baker Botts L.L.P. (included in Exhibit 5.1).**

 

 

 

23.4

 

Consent of Skadden, Arps, Slate, Meagher & Flom LLP (included in Exhibit 8.1).

 

 

 

24.1

 

Power of Attorney**

 

 

 

99.1

 

Executive and Director Compensation, extracted from the annual reports on Form 10-K/A for the year ended December 31, 2016 of each of Liberty Media Corporation and Liberty Interactive Corporation, filed on April 29, 2016.**

 

 

 

99.2

 

Form of Proxy Card**

 

 

 

99.3

 

Form of Letter of Transmittal for holders of Liberty Ventures common stock.

 


**           Previously filed.

 


Exhibit 2.1

 

REORGANIZATION AGREEMENT

 

 

between

 

 

LIBERTY INTERACTIVE CORPORATION

 

 

and

 

 

LIBERTY EXPEDIA HOLDINGS, INC.

 

 

Dated as of October 26, 2016

 



 

TABLE OF CONTENTS

 

 

 

Page

 

 

ARTICLE I REORGANIZATION AND DISTRIBUTION

2

1.1

Restructuring

2

1.2

Transfer of Splitco Assets and Splitco Businesses; Assumption of Splitco Liabilities

2

1.3

Third Party Consents and Government Approvals

3

1.4

Further Actions

3

1.5

Reorganization and Redemption Documents

3

1.6

Qualification as Reorganization

3

 

 

 

ARTICLE II REDEMPTION

4

2.1

The Redemption

4

2.2

Conditions to the Redemption

5

2.3

Treatment of Outstanding Equity Awards

6

 

 

 

ARTICLE III REPRESENTATIONS AND WARRANTIES

8

3.1

Representations and Warranties of the Parties

8

3.2

No Approvals or Notices Required; No Conflict with Instruments

8

3.3

No Other Reliance

8

 

 

 

ARTICLE IV COVENANTS

9

4.1

Cross-Indemnities

9

4.2

Financing

12

4.3

Further Assurances

13

4.4

Specific Performance

13

4.5

Access to Information

13

4.6

Confidentiality

14

4.7

Notices Regarding Transferred Assets

14

4.8

Treatment Of Payments

15

 

 

 

ARTICLE V CLOSING

15

5.1

Closing

15

5.2

Conditions to Closing

15

5.3

Deliveries at Closing

15

 

 

 

ARTICLE VI TERMINATION

17

6.1

Termination

17

6.2

Effect of Termination

17

 

 

 

ARTICLE VII MISCELLANEOUS

17

7.1

Definitions

17

7.2

No Third-Party Rights

23

7.3

Notices

23

7.4

Entire Agreement

23

7.5

Binding Effect; Assignment

24

 

i



 

7.6

Governing Law; Jurisdiction

24

7.7

Waiver of Jury Trial

24

7.8

Severability

25

7.9

Amendments; Waivers

25

7.10

No Strict Construction; Interpretation

25

7.11

Conflicts with Tax Sharing Agreement

26

7.12

Counterparts

26

 

EXHIBIT A-1 and A-2 — Forms of Aircraft Time Sharing Agreements

EXHIBIT B — Form of Facilities Sharing Agreement

EXHIBIT C — Form of Services Agreement

EXHIBIT D — Form of Splitco Charter

EXHIBIT E — Form of Tax Sharing Agreement

 

SCHEDULE 1.1 — Restructuring Plan

 

ii



 

REORGANIZATION AGREEMENT

 

This REORGANIZATION AGREEMENT (together with all Schedules and Exhibits hereto, this “ Agreement ”), dated as of October 26, 2016, is entered into by and between LIBERTY INTERACTIVE CORPORATION , a Delaware corporation (“ LIC ”), and LIBERTY EXPEDIA HOLDINGS, INC ., a Delaware corporation (“ Splitco ”).  Certain capitalized terms used herein have the meanings ascribed thereto in Section 7.1.

 

RECITALS:

 

WHEREAS , Splitco is and prior to the Redemption (as defined below) will be a wholly owned Subsidiary of LIC;

 

WHEREAS , the LIC Board has determined that it is appropriate and in the best interests of LIC and its stockholders to reorganize its assets and liabilities by means of the Split-Off (as defined below) of Splitco, the assets and liabilities of which would consist of LIC’s 15.8% ownership interest and 52.4% voting interest in Expedia, Inc., a Delaware corporation (“ Expedia ”), all of LIC’s rights, benefits and obligations under the Stockholders Agreement and the Governance Agreement (each as defined below), LIC’s wholly owned subsidiary Bodybuilding.com, LLC, as well as anticipated corporate level cash and cash equivalents of $50 million, and $350 million in indebtedness at the Effective Time (as defined below);

 

WHEREAS , LIC and Splitco have heretofore entered into (i) the Amended and Restated Transaction Agreement, dated as of September 22, 2016 (the “ Transaction Agreement ”), among LIC, Splitco, Barry Diller (“ Diller ”), and John Malone (“ Malone ”) and Leslie Malone (“ Leslie Malone ” and together with Malone, the “ Malone Group ”) and (ii) the Amended and Restated Reimbursement Agreement, dated as of September 22, 2016 (the “ Reimbursement Agreement ”), among LIC, Splitco and Expedia, in each case as amended to the date hereof;

 

WHEREAS , pursuant to the Transaction Agreement the applicable parties thereto have agreed to enter into certain transactions contemplated by this Agreement, including the Restructuring (as defined below) and the redemption (the “ Redemption ”) of 40% of LIC’s Series A Liberty Ventures common stock, par value $0.01 per share (“ LVNTA ”), and Series B Liberty Ventures common stock, par value $0.01 per share (“ LVNTB ” and together with LVNTA, the “ Liberty Ventures Common Stock ”), for stock of Splitco, a wholly owned subsidiary of LIC immediately prior to the effectiveness of the Redemption, subject to the conditions described herein;

 

WHEREAS, the transactions contemplated by this Agreement, including the Restructuring and the Redemption, have been approved by the LIC Board and, to the extent applicable, the Splitco Board, and are motivated in whole or substantial part by certain substantial corporate business purposes of LIC and Splitco;

 

WHEREAS , the transactions contemplated by this Agreement, including the Contribution and the Redemption (together, the “ Split-Off ”) are intended to qualify under, among other provisions, Sections 355 and 368 of the Internal Revenue Code of 1986, as amended (the “ Code ”),

 

1



 

and are expected to accomplish certain corporate business purposes of LIC and Splitco (which corporate business purposes are substantially unrelated to U.S. federal tax matters);

 

WHEREAS , this Agreement constitutes a “plan of reorganization” within the meaning of Section 368 of the Code and the Treasury Regulations promulgated thereunder; and

 

WHEREAS , the parties wish to set forth in this Agreement the terms on which, and the conditions subject to which, they intend to implement the measures referred to above and elsewhere herein.

 

NOW, THEREFORE , in consideration of the foregoing and the mutual representations, warranties, covenants and agreements contained herein, the parties to this Agreement hereby agree as follows:

 

ARTICLE I
REORGANIZATION AND DISTRIBUTION

 

1.1                                Restructuring .

 

(a)                                  The parties have taken or will take, and have caused or will cause their respective Subsidiaries to take, all actions that are necessary or appropriate to implement and accomplish the transactions contemplated by each of the steps set forth in the Restructuring Plan (collectively, the “ Restructuring ”); provided, that all of such steps (other than Step 16 in the Restructuring Plan) shall be completed by no later than the Effective Time.

 

(b)                                  The Contribution and the Redemption are intended to be part of the same plan of reorganization, even though there may be delays between the completion of certain of the transactions.

 

1.2                                Transfer of Splitco Assets and Splitco Businesses; Assumption of Splitco Liabilities .

 

On the terms and subject to the conditions of this Agreement, and in furtherance of the Restructuring and the Split-Off:

 

(a)                                  LIC, by no later than immediately before the Effective Time, shall cause all of its (or its Subsidiaries’) rights, title and interest in and to all of the Splitco Assets and Splitco Businesses to be contributed, assigned, transferred, conveyed and delivered, directly or indirectly, to Splitco, and Splitco agrees to accept or cause to be accepted all such rights, title and interest in and to all the Splitco Assets and Splitco Businesses.  All Splitco Assets are being transferred on an “as is, where is” basis, without any warranty whatsoever on the part of LIC.

 

(b)                                  LIC, by no later than immediately before the Effective Time, shall cause all of the Splitco Liabilities to be assigned, directly or indirectly, to or to be incurred by, Splitco or its Subsidiaries, and Splitco agrees to accept, assume, perform, discharge and fulfill all of the Splitco Liabilities in accordance with their respective terms.

 

2



 

(c)                                   Upon completion of the transactions contemplated by Sections 1.2(a) and (b) above: (i) Splitco will own, directly or indirectly, the Splitco Businesses and the Splitco Assets and be subject to the Splitco Liabilities; and (ii) LIC will continue to own, directly or indirectly, the LIC Retained Businesses and the LIC Retained Assets and continue to be subject to the LIC Retained Liabilities.

 

(d)                                  In connection with the Split-Off, prior to the Effective Time, the applicable parties will execute and deliver the agreements and instruments specified in the Transaction Agreement with the effect that:

 

(i)                                      LIC’s rights, benefits and obligations under the Shareholders Agreement will be assigned to and assumed by Splitco;

 

(ii)                                   LIC’s rights, benefits and obligations under the Governance Agreement will be assigned to and assumed by Splitco;

 

(iii)                                Diller will assign the proxy granted to him by LIC in the Shareholder Agreement to Splitco, effective immediately following the Effective Time, on the terms provided in the Diller Assignment; and

 

(iv)                               the Malone Group will grant a proxy to Diller to vote their shares of Splitco Common Stock, effective immediately following the Effective Time, subject to the terms and conditions set forth in the Malone Proxy.

 

1.3                                Third Party Consents and Government Approvals .  To the extent that either the Redemption or any step in the Restructuring Plan requires a consent of any third party or a Governmental Authorization, the parties will use commercially reasonable efforts to obtain each such consent and Governmental Authorization at or prior to the time such consent or Governmental Authorization is required in order to lawfully effect the Redemption and each step in the Restructuring Plan.

 

1.4                                Further Actions .  From and after the Redemption Date, upon the reasonable request of a party hereto, each other party hereto will promptly take, or cause its wholly owned Subsidiaries to promptly take and will use reasonable best efforts to cause its non-wholly owned subsidiaries to take, all commercially reasonable actions necessary or appropriate to fully accomplish the Restructuring and the Redemption and to give effect to the transactions provided for in this Agreement, including each step in the Restructuring Plan, in accordance with the purposes hereof.

 

1.5                                Reorganization and Redemption Documents .  All documents and instruments used to effect the Restructuring and the Redemption and otherwise to comply with this Agreement shall be in form satisfactory to LIC, Splitco and any additional signatories thereto, as applicable.

 

1.6                                Qualification as Reorganization .  For U.S. federal income tax purposes, (1) each step of the Restructuring is generally intended to be undertaken in a manner so that no gain or loss is recognized (and no income is taken into account) by LIC, Splitco or their respective Subsidiaries, and (2) the Contribution and the Redemption are intended to qualify as a tax-free reorganization under Sections 368(a)(1)(D) and 355 of the Code.

 

3



 

ARTICLE II
REDEMPTION

 

2.1                                The Redemption .

 

(a)                                  The LIC Board will have the authority (i) to (x) effect the Redemption, subject to the conditions set forth in Section 2.2, or (y) terminate the Redemption at any time prior to the Effective Time, (ii) to establish or change the record date for the meeting of stockholders (the “ Stockholder Meeting ”) at which the holders of record of Liberty Ventures Common Stock will be asked to vote on the Redemption in accordance with Section A.2.(f)(i) of the LIC Charter, (iii) to establish or change the date of the Stockholder Meeting, (iv) to establish or change the date (the “ Redemption Date ”) and time (the “ Effective Time ”) at which the Redemption will be effective, and (v) prior to the Effective Time to establish or change the procedures for effecting the Redemption, subject to, in all cases, any applicable provisions of the DGCL and the LIC Charter;

 

(b)                                  On the Redemption Date, subject to the satisfaction or waiver, as applicable, of the conditions to the Redemption set forth in Section 2.2, LIC will redeem (i) 0.4 of each outstanding share of LVNTA for 0.4 of a share of Splitco’s Series A common stock, par value $0.01 per share (“ Splitco Series A Common Stock ”), with 0.6 of each share of LVNTA remaining outstanding, and (ii) 0.4 of each outstanding share of LVNTB for 0.4 of a share of Splitco’s Series B  common stock, par value $0.01 per share (“ Splitco Series B Common Stock ” and together with the Splitco  Series A Stock, the “ Splitco Common Stock ”), with 0.6 of each share of LVNTB remaining outstanding.  In connection with the Restructuring, Splitco will issue to LIC the applicable series and number of shares of Splitco Common Stock necessary to effect the Redemption on the Redemption Date;

 

(c)                                   No fractional shares of Liberty Ventures Common Stock will be retained by holders of Liberty Ventures Common Stock and no fractional share of Splitco Common Stock will be distributed, in each case, in connection with the Redemption.  If any holder of Liberty Ventures Common Stock otherwise would be entitled to retain a fractional share of Liberty Ventures Common Stock or receive a fractional share of Splitco Common Stock in the Redemption, such holder will instead receive cash in an amount based on the aggregation and sale of all fractional shares by the Redemption Agent at prevailing market prices on behalf of such holders (after taking into account applicable procedures of The Depository Trust Company). Any amounts payable in lieu of fractional shares pursuant to this Section 2.1(c) will be payable from the proceeds of the aggregation and sale of fractional shares by the Redemption Agent as soon as practicable after the Split-Off is completed;

 

(d)                                  LIC will provide notice of the Effective Time and Redemption Date to holders of Liberty Ventures Common Stock in  accordance with the requirements of Section A.2.(f)(iv) of the LIC Charter;

 

(e)                                   LIC will take all such action as may be necessary or appropriate under state and foreign securities and “blue sky” laws to permit the Redemption to be effected in compliance, in all material respects, with such laws;

 

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(f)                                    Promptly following the Effective Time, LIC will cause the Redemption Agent (i) to exchange the applicable series and number of shares of Liberty Ventures Common Stock  held in book-entry form as of the Effective Time for the applicable series and number of shares of Splitco Common Stock, and (ii) to mail to the holders of record of certificated shares of Liberty Ventures Common Stock as of the Redemption  Date a letter of transmittal (which will specify that delivery will be effected, and risk of loss and title to the redeemed shares of Liberty Ventures Common Stock will pass, only upon proper delivery of the certificates representing such shares to the Redemption Agent) with instructions for use in effecting the surrender of the redeemed shares of Liberty Ventures Common Stock;

 

(g)                                   Shares of Splitco Common Stock that are exchanged in the Redemption for shares of Liberty Ventures Common Stock will be deemed to have been transferred as of the Effective Time; provided , that until the surrender of any certificate representing redeemed shares of Liberty Ventures Common Stock for shares of Splitco Common Stock, Splitco may withhold and accumulate any dividends or distributions which become payable with respect to such shares of Splitco Common Stock pending the surrender of such certificate.

 

2.2                                Conditions to the Redemption .  The obligation of LIC to effect the Redemption is subject to the following conditions:

 

(a)                                  a proposal to approve the Redemption shall have been approved by a majority of the aggregate voting  power of the shares of Liberty Ventures Common Stock  that are present, in person or by proxy, and entitled to vote at the Stockholder Meeting or any adjournment or postponement thereof, voting together as a single class;

 

(b)                                  LIC shall have received the opinion of Skadden, Arps, Slate, Meagher & Flom LLP, in form and substance reasonably acceptable to LIC, providing to the effect that the Split-Off will qualify as a tax-free transaction under Section 355, Section 368(a)(1)(D) and related provisions of the Code, and that, for U.S. federal income tax purposes, (i) no gain or loss will be recognized by LIC upon the distribution of shares of Splitco Common Stock in the Split-Off, and (ii) no gain or loss will be recognized by, and no amount will be included in the income of, holders of Liberty Ventures Common Stock upon the receipt of shares of Splitco Common Stock in the Split-Off (except with respect to the receipt of cash in lieu of fractional shares);

 

(c)                                   (i) the Registration Statement on Form S-4 (the “ Registration Statement ”) of Splitco relating  to the distribution of shares of Splitco Common Stock in the Redemption shall be effective under the Securities Act and (ii) the registration of the Splitco Common Stock under Section 12(b) of the Exchange Act shall be effective;

 

(d)                                  the execution of the Proxy Arrangements in accordance with the Transaction Agreement;

 

(e)                                   the Splitco Common Stock shall have been approved for listing on The NASDAQ Stock Market;

 

(f)                                    Splitco and one or more of its Subsidiaries shall have entered into the Margin Loan Agreement, secured by certain of the Expedia Securities, in an aggregate principal amount of $400 million; and

 

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(g)                                   any other regulatory or contractual approvals that a committee of the Board determines to obtain shall have been so obtained and be in full force and effect.

 

The foregoing conditions are for the sole benefit of LIC and shall not in any way limit LIC’s right to amend, modify or terminate this Agreement in accordance with Section 6.1.  Any of the foregoing conditions set forth in Section (f) and (g) may be waived by the LIC Board and any determination made by the LIC Board prior to the Redemption concerning the satisfaction or waiver of any condition set forth in this Section 2.2 shall be final and conclusive.

 

2.3                                Treatment of Outstanding Equity Awards .

 

(a)                                  Certain current and former employees, non-employee directors and consultants of LIC, the Qualifying Subsidiaries and their respective Subsidiaries have been granted options, restricted stock units and restricted shares in respect of LIC Common Stock pursuant to various stock incentive plans of LIC administered by the LIC Board (collectively, “ Awards ”).  LIC and Splitco shall use commercially reasonable efforts to take all actions necessary or appropriate so that Awards that are outstanding immediately prior to the Effective Time are adjusted as set forth in this Section 2.3.

 

(b)                                  Options .   As of the Effective Time, and as determined by the LIC Board pursuant to its authority granted under the applicable stock incentive plan of LIC, each holder of a Liberty Ventures Option (whether unvested, partially vested or fully vested) (each such Liberty Ventures Option, an “ Outstanding Liberty Ventures Option ”) will receive (i) an option to purchase shares of the corresponding series of Splitco Common Stock (a “ Splitco Option ”) and (ii) an adjustment to the exercise price of and the number of shares subject to the Outstanding Liberty Ventures Option (as so adjusted, an “ Adjusted Liberty Ventures Option ”) such that the pre-Split-Off intrinsic value of the Outstanding Liberty Ventures Option is allocated between the Splitco Option and the Adjusted Liberty Ventures Option.

 

Except as described herein, all other terms of the Splitco Options and the Adjusted Liberty Ventures Options (including the vesting terms thereof) will, in all material respects, be the same as those of the corresponding Outstanding Liberty Ventures Options; provided , that the terms and conditions of exercise of the Splitco Options shall in any event be determined in a manner consistent with Section 409A of the Code.

 

(c)                                   Restricted Stock Awards .  Shares of Liberty Ventures Common Stock that are subject to a restricted stock award granted under a stock incentive plan of LIC (“ Liberty Ventures Restricted Stock Awards ”) will participate in the Redemption in the same manner as other outstanding shares of Liberty Ventures Common Stock.  Except as described herein, shares of Splitco Common Stock received by such holders of Liberty Ventures Restricted Stock Awards (“ Splitco Restricted Stock Awards ”) will otherwise be subject, in all material respects, to the same terms and conditions (including the vesting terms thereof) as those applicable to such shares of Liberty Ventures Restricted Stock Awards immediately prior to the Effective Time.

 

(d)                                  Restricted Stock Units .  As of the Effective Time, and as determined by the LIC Board pursuant to its authority granted under the applicable stock incentive plan of LIC, each holder of a restricted stock unit with respect to shares of Liberty Ventures Common Stock (an

 

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Outstanding Liberty Ventures Restricted Stock Unit Award ”) will receive in the Redemption (a) an award of restricted stock units with respect to the corresponding series of Splitco Common Stock (a “ Splitco Restricted Stock Unit ”) and (ii) an adjustment to the number of Outstanding Liberty Ventures Restricted Stock Unit Awards held by such holder (as so adjusted, an “ Adjusted Liberty Ventures Restricted Stock Unit Award ”) such that the pre-Split-Off intrinsic value of the Outstanding Liberty Ventures Restricted Stock Unit Award is allocated between the Splitco Restricted Stock Unit and the Adjusted Liberty Ventures Restricted Stock Unit Award. Except as described herein, Splitco Restricted Stock Units and Adjusted Liberty Ventures Restricted Stock Unit Awards will otherwise be subject, in all material respects, to the same terms and conditions (including the vesting terms thereof) as those applicable to Outstanding Liberty Ventures Restricted Stock Unit Awards immediately prior to the Effective Time.

 

(e)                                   From and after the Effective Time, Splitco Options, Splitco Restricted Stock Awards and Splitco Restricted Stock Units, regardless of by whom held, shall be settled by Splitco pursuant to the terms of the Splitco Transitional Plan.  The obligation to deliver (i) shares of Splitco Common Stock upon the exercise of Splitco Options or (ii) shares of Splitco Common Stock upon vesting of Splitco Restricted Stock Awards or Splitco Restricted Stock Units shall be the sole obligation of Splitco, and LIC shall have no Liability in respect thereof.

 

(f)                                    It is intended that the Splitco Transitional Plan be considered, as to any Splitco Option, Splitco Restricted Stock Award or Splitco Restricted Stock Unit that is issued as part of the adjustment provisions of this Section 2.3, to be a successor plan to the stock incentive plan of LIC pursuant to which the corresponding Liberty Ventures Option, Liberty Ventures Restricted Stock Award or Liberty Ventures Restricted Stock Unit Award was issued, and Splitco shall be deemed to have assumed the obligations under the applicable stock incentive plans of LIC to make the adjustments to the Awards set forth in this Section 2.3.

 

(g)                                   With respect to Awards adjusted and any equity awards issued as a result of such adjustments (collectively, “ Post Split Awards ”), in each case, pursuant to this Section 2.3, service after the Effective Time as an employee or non-employee director of, or consultant to, LIC, Splitco, any Qualifying Subsidiary or any of their respective Subsidiaries shall be treated as service to LIC and Splitco and their respective Subsidiaries for all purposes under such Post Split Awards following the Effective Time.

 

(h)                                  Neither the Effective Time nor any other transaction contemplated by the Restructuring Plan or this Agreement shall be considered a termination of employment for any employee of LIC, Splitco or any of their respective Subsidiaries for purposes of any Post Split Award.

 

(i)                                      Splitco agrees that, on and after the Effective Date, it shall use its reasonable efforts to cause to be effective under the Securities Act, on a continuous basis, a registration statement on Form S-8 with respect to shares of Splitco Common Stock issuable upon exercise of Splitco Options or settlement of Splitco SARs.

 

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ARTICLE III
REPRESENTATIONS AND WARRANTIES

 

3.1                                Representations and Warranties of the Parties .  Each party hereto represents and warrants to the other as follows:

 

(a)                                  Organization and Qualification .  Such party is a corporation duly organized, validly existing and in good standing under the laws of the state of Delaware, has all requisite corporate power and authority to own, use, lease or operate its properties and assets, and to conduct the business heretofore conducted by it, and is duly qualified to do business and is in good standing in each jurisdiction in which the properties owned, used, leased or operated by it or the nature of the business conducted by it requires such qualification, except in such jurisdictions where the failure to be so qualified and in good standing would not have a material adverse effect on its business, financial condition or results of operations or its ability to perform its obligations under this Agreement.

 

(b)                                  Authorization and Validity of Agreement .  Such party has all requisite power and authority to execute, deliver and perform its obligations under this Agreement, the agreements and instruments to which it is to be a party required to effect the Restructuring (the “ Restructuring Agreements ”) and the agreements to be delivered by it at the Closing pursuant to Section 5.3(a)(i) through (iv) inclusive or Section 5.3(b)(i) through (iv) inclusive, as the case may be (the “ Other Agreements ”).  The execution, delivery and performance by such party of this Agreement, the Restructuring Agreements and the Other Agreements and the consummation by it of the transactions contemplated hereby and thereby have been duly and validly authorized by the board of directors, managing members or analogous governing body of such party and, to the extent required by law, its stockholders or members, and no other corporate or other action on its part is necessary to authorize the execution and delivery by such party of this Agreement, the Restructuring Agreements and the Other Agreements, the performance by it of its obligations hereunder and thereunder and the consummation by it of the transactions contemplated hereby and thereby. This Agreement has been, and each of the Restructuring Agreements and each of the Other Agreements, when executed and delivered, will be, duly executed and delivered by such party and each is, or will be, a valid and binding obligation of such party, enforceable in accordance with its terms.

 

3.2                                No Approvals or Notices Required; No Conflict with Instruments .  The execution, delivery and performance by such party of this Agreement, the Restructuring Agreements and the Other Agreements, and the consummation of the transactions contemplated hereby and thereby, do not and will not conflict with or result in a breach or violation of any of the terms or provisions of, constitute a default under, or result in the creation of any lien, charge or encumbrance upon any of its assets pursuant to the terms of, the charter or bylaws (or similar formation or governance instruments) of such party, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which it is a party or by which it or any of its assets are bound, or any law, rule, regulation, or Order of any court or governmental authority having jurisdiction over it or its properties.

 

3.3                                No Other Reliance .  In determining to enter into this Agreement, the Restructuring Agreements and the Other Agreements, and to consummate the transactions contemplated hereby

 

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and thereby, such party has not relied on any representation, warranty, promise or agreement other than those expressly contained herein or therein, and no other representation, warranty, promise or agreement has been made or will be implied.  Except as otherwise expressly set forth herein or in the Restructuring Agreements or the Other Agreements, all Splitco Assets and Splitco Businesses are being transferred on an “as is, where is” basis, at the risk of the transferee, without any warranty whatsoever on the part of the transferor and from and after the Effective Time.

 

ARTICLE IV
COVENANTS

 

4.1                                Cross-Indemnities .

 

(a)                                  Splitco hereby covenants and agrees, on the terms and subject to the limitations set forth in this Article IV, from and after the Closing, to indemnify and hold harmless LIC, its Subsidiaries and their respective current and former directors, officers and employees, and each of the heirs, executors, trustees, administrators, successors and assigns of any of the foregoing (the “ LIC Indemnified Parties ”) from and against any Losses incurred by the LIC Indemnified Parties (in their capacities as such) to the extent arising out of or resulting from any of the following:

 

(i)                                      the conduct of the Splitco Businesses (whether before or after the Closing);

 

(ii)                                   the Splitco Assets;

 

(iii)                                the Splitco Liabilities (whether incurred before or after the Closing);

 

(iv)                               any breach of, or failure to perform or comply with, any covenant, undertaking or obligation of Splitco or any of its Subsidiaries under this Agreement, any Restructuring Agreement or any Other Agreement; or

 

(v)                                  any of the Proxy Arrangements.

 

(b)                                  LIC hereby covenants and agrees, on the terms and subject to the limitations set forth in this Article IV, from and after the Closing, to indemnify and hold harmless Splitco, its wholly-owned Subsidiaries and their respective current and former directors, officers and employees, and each of the heirs, executors, trustees, administrators, successors and assigns of any of the foregoing (the “ Splitco Indemnified Parties ”) from and against any Losses incurred by the Splitco Indemnified Parties (in their capacities as such) to the extent arising out of or resulting from:

 

(i)                                      the conduct of the LIC Retained Businesses (whether before or after the Closing);

 

(ii)                                   the LIC Retained Assets;

 

(iii)                                the LIC Retained Liabilities (whether incurred before or after the Closing); or

 

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(iv)                               any breach of, or failure to perform or comply with, any covenant, undertaking or obligation of LIC or any of its Subsidiaries (other than the Splitco Entities) under this Agreement, any Restructuring Agreement or any Other Agreement.

 

(c)                                   The indemnification provisions set forth in Sections 4.1(a) and (b) shall not apply to: (i) any Losses incurred by any Splitco Entity pursuant to any contractual obligation (other than this Agreement, the Restructuring Agreements, the Other Agreements, the Transaction Agreement, the Transaction Instruments (as defined in the Transaction Agreement) or the Reimbursement Agreement) existing on or after the Closing Date between (x) LIC or any of its Subsidiaries or Affiliates, on the one hand, and (y) Splitco or any of its Subsidiaries or Affiliates, on the other hand; and (ii) any Losses incurred by any LIC Entity pursuant to any contractual obligation (other than this Agreement, the Restructuring Agreements, the Other Agreements, the Transaction Agreement, the Transaction Instruments or the Reimbursement Agreement) existing on or after the Closing Date between (x) LIC or any of its Subsidiaries or Affiliates, on the one hand, and (y) Splitco or any of its Subsidiaries or Affiliates, on the other hand.

 

(d)                                  (i)                                      In connection with any indemnification provided for in this Section 4.1, the party seeking indemnification (the “ Indemnitee ”) will give the party from which indemnification is sought (the “ Indemnitor ”) prompt notice whenever it comes to the attention of the Indemnitee that the Indemnitee has suffered or incurred, or may suffer or incur, any Losses for which it is entitled to indemnification under this Section 4.1, and, if and when known, the facts constituting the basis for such claim and the projected amount of such Losses (which shall not be conclusive as to the amount of such Losses), in each case in reasonable detail. Without limiting the generality of the foregoing, in the case of any Action commenced by a third party for which indemnification is being sought (a “ Third-Party Claim ”), such notice will be given no later than ten Business Days following receipt by the Indemnitee of written notice of such Third-Party Claim.  Failure by any Indemnitee to so notify the Indemnitor will not affect the rights of such Indemnitee hereunder except to the extent that such failure has a material prejudicial effect on the defenses or other rights available to the Indemnitor with respect to such Third-Party Claim.  The Indemnitee will deliver to the Indemnitor as promptly as practicable, and in any event within five Business Days after Indemnitee’s receipt, copies of all notices, court papers and other documents received by the Indemnitee relating to any Third-Party Claim.

 

(ii)                                   After receipt of a notice pursuant to Section 4.1(d)(i) with respect to any Third-Party Claim, the Indemnitor will be entitled, if it so elects, to take control of the defense and investigation with respect to such Third-Party Claim and to employ and engage attorneys reasonably satisfactory to the Indemnitee to handle and defend such claim, at the Indemnitor’s cost, risk and expense, upon written notice to the Indemnitee of such election, which notice acknowledges the Indemnitor’s obligation to provide indemnification under this Agreement with respect to any Losses arising out of or relating to such Third-Party Claim. The Indemnitor will not settle any Third-Party Claim that is the subject of indemnification without the written consent of the Indemnitee, which consent will not be unreasonably withheld, conditioned or delayed; provided, however , that, after reasonable notice, the Indemnitor may settle a claim without the Indemnitee’s consent if such settlement (A) makes no admission or acknowledgment of Liability or culpability with respect to the Indemnitee, (B) includes a complete release of the Indemnitee and (C) does not seek any relief against the Indemnitee other than the payment of money damages to be borne by the Indemnitor. The Indemnitee will cooperate in all reasonable respects with the

 

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Indemnitor and its attorneys in the investigation, trial and defense of any lawsuit or action with respect to such claim and any appeal arising therefrom (including the filing in the Indemnitee’s name of appropriate cross-claims and counterclaims).  The Indemnitee may, at its own cost, participate in any investigation, trial and defense of any Third-Party Claim controlled by the Indemnitor and any appeal arising therefrom, including participating in the process with respect to the potential settlement or compromise thereof.  If the Indemnitee has been advised by its counsel that there may be one or more legal defenses available to the Indemnitee that conflict with those available to, or that are not available to, the Indemnitor (“ Separate Legal Defenses ”), or that there may be actual or potential differing or conflicting interests between the Indemnitor and the Indemnitee in the conduct of the defense of such Third-Party Claim, the Indemnitee will have the right, at the expense of the Indemnitor, to engage separate counsel reasonably acceptable to the Indemnitor to handle and defend such Third-Party Claim, provided , that, if such Third-Party Claim can be reasonably separated between those portion(s) for which Separate Legal Defenses are available (“ Separable Claims ”) and those for which no Separate Legal Defenses are available, the Indemnitee will instead have the right, at the expense of the Indemnitor, to engage separate counsel reasonably acceptable to the Indemnitor to handle and defend the Separable Claims, and the Indemnitor will not have the right to control the defense or investigation of such Separable Claims (and, in which case, the Indemnitor will have the right to control the defense or investigation of the remaining portion(s) of such Third-Party Claim).

 

(iii)                                If, after receipt of a notice pursuant to Section 4.1(d)(i) with respect to any Third-Party Claim as to which indemnification is available hereunder, the Indemnitor does not undertake to defend the Indemnitee against such Third-Party Claim, whether by not giving the Indemnitee timely notice of its election to so defend or otherwise, the Indemnitee may, but will have no obligation to, assume its own defense, at the expense of the Indemnitor (including attorneys’ fees and costs), it being understood that the Indemnitee’s right to indemnification for such Third-Party Claim shall not be adversely affected by its assuming the defense of such Third-Party Claim.  The Indemnitor will be bound by the result obtained with respect thereto by the Indemnitee; provided , that the Indemnitee may not settle any lawsuit or action with respect to which the Indemnitee is entitled to indemnification hereunder without the consent of the Indemnitor, which consent will not be unreasonably withheld, conditioned or delayed; provided further , that such consent shall not be required if (i) the Indemnitor had the right under this Section 4.1 to undertake control of the defense of such Third-Party Claim and, after notice, failed to do so within thirty days of receipt of such notice (or such lesser period as may be required by court proceedings in the event of a litigated matter), or (ii) (x) the Indemnitor does not have the right to control the defense of the entirety of such Third-Party Claim pursuant to Section 4.1(d)(ii) or (y) the Indemnitor does not have the right to control the defense of any Separable Claim pursuant to Section 4.1(d)(ii) (in which case such settlement may only apply to such Separable Claims), the Indemnitee provides reasonable notice to Indemnitor of the settlement, and such settlement (A) makes no admission or acknowledgment of Liability or culpability with respect to the Indemnitor, (B) does not seek any relief against the Indemnitor and (C) does not seek any relief against the Indemnitee for which the Indemnitor is responsible other than the payment of money damages.

 

(e)                                   In no event will the Indemnitor be liable to any Indemnitee for any special, consequential, indirect, collateral, incidental or punitive damages, however caused and on any theory of liability arising in any way out of this Agreement, whether or not such Indemnitor was advised of the possibility of any such damages;  provided , that the foregoing limitations shall not

 

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limit a party’s indemnification obligations for any Losses incurred by an Indemnitee as a result of the assertion of a Third-Party Claim.

 

(f)                                    The Indemnitor and the Indemnitee shall use commercially reasonable efforts to avoid production of confidential information, and to cause all communications among employees, counsel and others representing any party with respect to a Third-Party Claim to be made so as to preserve any applicable attorney-client or work-product privilege.

 

(g)                                   The Indemnitor shall pay all amounts payable pursuant to this Section 4.1 by wire transfer of immediately available funds, promptly following receipt from an Indemnitee of a bill, together with all accompanying reasonably detailed backup documentation, for any Losses that are the subject of indemnification hereunder, unless the Indemnitor in good faith disputes the amount of such Losses or whether such Losses are covered by the Indemnitor’s indemnification obligation in which event the Indemnitor shall promptly so notify the Indemnitee. In any event, the Indemnitor shall pay to the Indemnitee, by wire transfer of immediately available funds, the amount of any Losses for which it is liable hereunder no later than three (3) days following any final determination of the amount of such Losses and the Indemnitor’s liability therefor. A “final determination” shall exist when (a) the parties to the dispute have reached an agreement in writing or (b) a court of competent jurisdiction shall have entered a final and non-appealable order or judgment.

 

(h)                                  If the indemnification provided for in this Section 4.1 shall, for any reason, be unavailable or insufficient to hold harmless an Indemnitee in respect of any Losses for which it is entitled to indemnification hereunder, then the Indemnitor shall contribute to the amount paid or payable by such Indemnitee as a result of such Losses, in such proportion as shall be appropriate to reflect the relative benefits received by and the relative fault of the Indemnitor on the one hand and the Indemnitee on the other hand with respect to the matter giving rise to such Losses.

 

(i)                                      The remedies provided in this Section 4.1 shall be cumulative and shall not preclude assertion by any Indemnitee of any other rights or the seeking of any and all other remedies against an Indemnitor, subject to Section 4.1(e).

 

(j)                                     The rights and obligations of the LIC Indemnified Parties and the Splitco Indemnified Parties under this Section 4.1 shall survive the Split-Off.

 

(k)                                  For the avoidance of doubt, the provisions of this Section 4.1 are not intended to, and shall not, apply to any Loss, claim or Liability to which the provisions of the Tax Sharing Agreement are applicable.

 

(l)                                      To the fullest extent permitted by applicable law, the Indemnitor will indemnify the Indemnitee against any and all reasonable fees, costs and expenses (including attorneys’ fees), incurred in connection with the enforcement of his, her or its rights under this Section 4.1.

 

4.2                                Financing .  Prior to the Closing, Splitco and one or more of its Subsidiaries shall enter into a margin loan agreement (the “ Margin Loan Agreement ”) with certain lenders pursuant to which Splitco and one or more of its Subsidiaries will borrow up to an aggregate principal amount of $400 million, secured by certain of the Expedia Securities and guaranteed by Splitco (the “ Margin Loan ”).

 

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4.3                                Further Assurances .  At any time before or after the Closing, each party hereto covenants and agrees to make, execute, acknowledge and deliver such instruments, agreements, consents, assurances and other documents, and to take all such other commercially reasonable actions, as any other party may reasonably request and as may reasonably be required in order to carry out the purposes and intent of this Agreement and to implement the terms hereof.

 

4.4                                Specific Performance .  Each party hereby acknowledges that the benefits to the other party of the performance by such party of its obligations under this Agreement are unique and that the other party is willing to enter into this Agreement only in reliance that such party will perform such obligations, and agrees that monetary damages may not afford an adequate remedy for any failure by such party to perform any of such obligations. Accordingly, each party hereby agrees that the other party will have the right to enforce the specific performance of such party’s obligations hereunder and irrevocably waives any requirement for the securing or posting of any bond or other undertaking in connection with the obtaining by the other party of any injunctive or other equitable relief to enforce their rights hereunder.

 

4.5                                Access to Information .

 

(a)                                  Each party will provide to the other party, at any time before or after the Redemption Date, upon written request and promptly after the request therefor (subject in all cases, to any bona fide concerns of attorney-client or work-product privilege that any party may reasonably have and any restrictions contained in any agreements or contracts to which any party or its Subsidiaries is a party (it being understood that each of LIC and Splitco will use its reasonable best efforts to provide any such information in a manner that does not result in a violation of a privilege)), any information in its possession or under its control that the requesting party reasonably needs (i) to comply with reporting, filing or other requirements imposed on the requesting party by a foreign or U.S. federal, state or local judicial, regulatory or administrative authority having jurisdiction over the requesting party, (ii) to enable the requesting party to institute or defend against any action, suit or proceeding in any foreign or U.S. federal, state or local court or (iii) to enable the requesting party to implement the transactions contemplated hereby, including but not limited to performing its obligations under this Agreement, the Restructuring Agreements and the Other Agreements.

 

(b)                                  Any information belonging to a party that is provided to another party pursuant to Section 4.5(a) will remain the property of the providing party.  The parties agree to cooperate in good faith to take all reasonable efforts to maintain any legal privilege that may attach to any information delivered pursuant to this Section 4.5 or which otherwise comes into the receiving party’s possession and control pursuant to this Agreement.  Nothing contained in this Agreement will be construed as granting or conferring license or other rights in any such information.

 

(c)                                   The party requesting any information under this Section 4.5 will reimburse the providing party for the reasonable out of pocket costs, if any, of creating, gathering and copying such information, to the extent that such costs are incurred for the benefit of the requesting party. No party will have any Liability to any other party if any information exchanged or provided pursuant to this Agreement that is an estimate or forecast, or is based on an estimate or forecast, is found to be inaccurate, absent willful misconduct or fraud by the party providing such information.

 

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(d)                                  For the avoidance of doubt, the provisions of this Section 4.5 are not intended to, and shall not, apply to any information relating to matters governed by the Tax Sharing Agreement, which shall be subject to the provisions thereof in lieu of this Section 4.5.

 

4.6                                Confidentiality .  Each party will keep confidential for five years following the Closing Date (or for three years following disclosure to such party, whichever is longer), and will use reasonable efforts to cause its officers, directors, members, employees, controlled Affiliates and agents to keep confidential during such period, all Proprietary Information of the other party, in each case to the extent permitted by applicable law.

 

(a)                                  Proprietary Information ” means any proprietary ideas, plans and information, including information of a technological or business nature, of a party (in this context, the “ Disclosing Party ”) (including all trade secrets, intellectual property, data, summaries, reports or mailing lists, in whatever form or medium whatsoever, including oral communications, and however produced or reproduced), that is marked proprietary or confidential, or that bears a marking of like import, or that the Disclosing Party states is to be considered proprietary or confidential, or that a reasonable and prudent person would consider proprietary or confidential under the circumstances of its disclosure. Without limiting the foregoing, all information of the types referred to in the immediately preceding sentence to the extent used by Splitco or the Splitco Businesses or which constitute Splitco Assets on or prior to the Closing Date will constitute Proprietary Information of Splitco for purposes of this Section 4.6.

 

(b)                                  Anything contained herein to the contrary notwithstanding, information of a Disclosing Party will not constitute Proprietary Information (and the other party (in this context, the “ Receiving Party ”) will have no obligation of confidentiality with respect thereto), to the extent such information: (i) is in the public domain other than as a result of disclosure made in breach of this Agreement or breach of any other agreement relating to confidentiality between the Disclosing Party and the Receiving Party; (ii) was lawfully acquired by the Disclosing Party from a third party not bound by a confidentiality obligation; (iii) is approved for release by prior written authorization of the Disclosing Party, or (iv) is disclosed in order to comply with a judicial order issued by a court of competent jurisdiction, or to comply with the laws or regulations of any governmental authority having jurisdiction over the Receiving Party, in which event the Receiving Party will give prior written notice to the Disclosing Party of such disclosure as soon as or to the extent practicable and will cooperate with the Disclosing Party in using reasonable efforts to disclose the least amount of such information required and to obtain an appropriate protective order or equivalent, and provided that the information will continue to be Proprietary Information to the extent it is covered by a protective order or equivalent or is not so disclosed.

 

4.7                                Notices Regarding Transferred Assets .  Any transferor of an Asset or Liability in the Restructuring that receives a notice or other communication from any third party, or that otherwise becomes aware of any fact or circumstance, after the Restructuring, relating to such Asset or Liability, will use commercially reasonable efforts to promptly forward the notice or other communication to the transferee thereof or give notice to such transferee of such fact or circumstance of which it has become aware. The parties will cause their respective Subsidiaries to comply with this Section 4.7.

 

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4.8                                Treatment Of Payments .  The parties agree to treat all payments made pursuant to this Agreement in accordance with Section 4.4 of the Tax Sharing Agreement and to increase or reduce any amount paid hereunder if such payment would have been required to be increased or reduced under such section if it were a payment made pursuant to the Tax Sharing Agreement.

 

ARTICLE V
CLOSING

 

5.1                                Closing .  Unless this Agreement is terminated and the transactions contemplated by this Agreement abandoned pursuant to the provisions of Article VI, and subject to the satisfaction or waiver of all conditions set forth in each of Sections 2.2 and 5.2, the closing of the Redemption (the “ Closing ”) will take place at the offices of LIC, at 12300 Liberty Boulevard, Englewood, Colorado, at a mutually acceptable time and date to be determined by LIC (the “ Closing Date ”).

 

5.2                                Conditions to Closing .

 

(a)                                  The obligations of the parties to complete the transactions provided for herein are conditioned upon the satisfaction or, if applicable, waiver of the conditions set forth in Section 2.2.

 

(b)                                  The performance by each party of its obligations hereunder is further conditioned upon:

 

(i)                                      the performance in all material respects by the other party of its covenants and agreements contained herein to the extent such are required to be performed at or prior to the Closing;

 

(ii)                                   the representations and warranties of the other party being true and complete in all material respects as of the Closing Date with the same force and effect as if made at and as of the Closing Date; and

 

(iii)                                the Transaction Agreement remaining in full force and effect.

 

5.3                                Deliveries at Closing .

 

(a)                                  LIC .  At the Closing, LIC will deliver or cause to be delivered to Splitco:

 

(i)                                      the Tax Sharing Agreement duly executed by an authorized officer of LIC;

 

(ii)                                   the Services Agreement duly executed by an authorized officer of LMC;

 

(iii)                                the Facilities Sharing Agreement duly executed by an authorized officer of Liberty Property Holdings, Inc. and an authorized officer of LMC;

 

(iv)                               each Aircraft Time Sharing Agreement duly executed by an officer of LMC or one or more of its Subsidiaries, as applicable;

 

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(v)                                  the Governance Agreement Assignment, substantially in the form of Exhibit E to the Transaction Agreement, duly executed by an authorized officer of LIC;

 

(vi)                               the Stockholders Agreement Assignment, substantially in the form of Exhibit F to the Transaction Agreement, duly executed by an authorized officer of LIC;

 

(vii)                            a secretary’s certificate certifying that the LIC Board has authorized the execution, delivery and performance by LIC of this Agreement, the Restructuring Agreements and the Other Agreements, which authorization will be in full force and effect at and as of the Closing; and

 

(viii)                         such other documents and instruments as Splitco may reasonably request.

 

(b)                                  Splitco .  At the Closing, Splitco will deliver or cause to be delivered to LIC:

 

(i)                                      the Tax Sharing Agreement duly executed by an authorized officer of Splitco;

 

(ii)                                   the Services Agreement duly executed by an authorized officer of Splitco;

 

(iii)                                the Facilities Sharing Agreement duly executed by an authorized officer of Splitco;

 

(iv)                               each Aircraft Time Sharing Agreement duly executed by an authorized officer of Splitco;

 

(v)                                  the Margin Loan Agreement duly executed by Splitco, a newly-formed, wholly-owned special purpose subsidiary of Splitco and the financial counterparties thereto;

 

(vi)                               the amended and restated certificate of incorporation of Splitco, substantially in the form attached as Exhibit A to the Transaction Agreement, duly executed by an authorized officer of Splitco;

 

(vii)                            the amended and restated bylaws of Splitco, substantially in the form attached as Exhibit B to the Transaction Agreement, duly adopted by Splitco;

 

(viii)                         the Diller Assignment, substantially in the form of Exhibit C to the Transaction Agreement, duly executed by an authorized officer of Splitco;

 

(ix)                               the Governance Agreement Assignment, substantially in the form of Exhibit E to the Transaction Agreement, duly executed by an authorized officer of Splitco;

 

(x)                                  the Stockholders Agreement Assignment, substantially in the form of Exhibit F to the Transaction Agreement, duly executed by an authorized officer of Splitco;

 

(xi)                               the Stockholders Agreement Amendment, substantially in the form of Exhibit G to the Transaction Agreement, duly executed by an authorized officer of Splitco;

 

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(xii)                            a secretary’s certificate certifying that the Splitco Board has authorized the execution, delivery and performance by Splitco of this Agreement, the Restructuring Agreements and the Other Agreements, which authorizations will be in full force and effect at and as of the Closing; and

 

(xiii)                         such other documents and instruments as LIC may reasonably request.

 

ARTICLE VI
TERMINATION

 

6.1                                Termination .  This Agreement may be terminated and the transactions contemplated hereby may be amended, modified, supplemented or abandoned at any time prior to the Effective Time by and in the sole and absolute discretion of LIC without the approval of Splitco. For the avoidance of doubt, from and after the Effective Time, this Agreement may not be terminated (or any provision hereof modified, amended or waived) without the written agreement of all the parties.

 

6.2                                Effect of Termination .  In the event of any termination of this Agreement in accordance with Section 6.1, this Agreement will immediately become void and the parties will have no Liability whatsoever to each other with respect to the transactions contemplated hereby.

 

ARTICLE VII
MISCELLANEOUS

 

7.1                                Definitions .

 

(a)                                  For purposes of this Agreement, the following terms have the corresponding meanings:

 

Action ” means any demand, action, claim, suit, countersuit, litigation, arbitration, prosecution, proceeding (including any civil, criminal, administrative, investigative or appellate proceeding), hearing, inquiry, audit, examination or investigation whether or not commenced, brought, conducted or heard by or before, or otherwise involving, any court, grand jury or other governmental authority or any arbitrator or arbitration panel.

 

Affiliates ” means with respect to any Person, any other Person that directly or indirectly, through one or more intermediaries, Controls, is Controlled by, or is under common Control with, such first Person; provided , that, for any purpose hereunder, in each case both before and after the Effective Time, none of the Persons listed in clauses (i)—(ix) shall be deemed to be Affiliates of any Person listed in any other such clause: (i) LIC taken together with its Subsidiaries and any of their respective Investees, (ii) Splitco taken together with its Subsidiaries and any of their respective Investees, (iii) LMC taken together with its Subsidiaries and any of their respective Investees, (iv) TripCo taken together with its Subsidiaries and any of their respective Investees, (v) Starz taken together with its Subsidiaries and any of their respective Investees, (vi) Broadband taken together with its Subsidiaries and any of their respective Investees, (vii) Discovery Communications Inc. taken together with its Subsidiaries and any of their respective Investees, (viii) CommerceHub, Inc. taken together with its Subsidiaries and any of their respective

 

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Investees and (ix) Liberty Global plc taken together with its Subsidiaries and any of their respective Investees.

 

Aircraft Time Sharing Agreement ” means the Aircraft Time Sharing Agreements to be entered into between LMC and Splitco, one for each of the two aircraft owned by LMC, substantially in the form attached hereto as Exhibit A-1 and the Aircraft Time Sharing Agreement to be entered into among Subsidiaries of LMC and Splitco for the NetJets aircraft in which such Subsidiaries of LMC have ownership or management rights, as applicable, substantially in the form attached hereto as Exhibit A-2 .

 

Assets ” means assets, properties, interests and rights (including goodwill), wherever located, whether real, personal or mixed, tangible or intangible, movable or immovable, in each case whether or not required by GAAP to be reflected in financial statements or disclosed in the notes thereto.

 

Broadband ” means Liberty Broadband Corporation.

 

Business Day ” means any day that is not a Saturday, a Sunday or other day on which banks are required or authorized by law to be closed in the City of New York.

 

Contribution ” has the meaning given to such term in the Restructuring Plan.

 

Control ” means, with respect to any Person, the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through ownership of securities or partnership, membership, limited liability company, or other ownership interests, by contract or otherwise. The terms “ Controlling ” and “ Controlled ” have meanings correlative to the foregoing.

 

DGCL ” means the Delaware General Corporation Law.

 

Diller Assignment ” means the Assignment Agreement, substantially in the form of Exhibit C to the Transaction Agreement between Diller and Splitco.

 

Expedia Securities ” means all of the shares of common stock, par value $0.0001 per share, and Class B common stock, par value $0.0001 per share, in each case, of Expedia, owned by LIC immediately prior to the Effective Time of the Split-Off.

 

Facilities Sharing Agreement ” means the Facilities Sharing Agreement to be entered into between Liberty Property Holdings, Inc., LMC and Splitco, substantially in the form attached hereto as Exhibit B.

 

GAAP ” means generally accepted accounting principles as in effect from time to time in the United States, consistently applied.

 

Governance Agreement ” means the Amended and Restated Governance Agreement, dated as of December 20, 2011, among Expedia, LIC and Barry Diller, as amended.

 

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Governmental Authorization ” means any authorization, approval, consent, license, certificate or permit  issued, granted, or otherwise made available under the authority of any court, governmental or regulatory authority, agency, stock exchange, commission or body.

 

Investee ” of any Person means any Person in which such first Person owns or controls an equity or voting interest.

 

Liabilities ” means any and all debts, liabilities, commitments and obligations, whether or not fixed, contingent or absolute, matured or unmatured, direct or indirect, liquidated or unliquidated, accrued or unaccrued, known or unknown, and whether or not required by GAAP to be reflected in financial statements or disclosed in the notes thereto (other than taxes).

 

LIC Board ” means the Board of Directors of LIC or a duly authorized committee thereof.

 

LIC Charter ” means the Restated Certificate of Incorporation of LIC, as in effect immediately prior to the Redemption Date.

 

LIC Common Stock ” means QVCA, QVCB, LVNTA and LVNTB.

 

LIC Entity ” or  “ LIC Entities ” means and includes each of LIC and its Subsidiaries (other than the Splitco Entities), after giving effect to the Restructuring.

 

LIC Retained Assets ” means all Assets which are held at the Effective Time by LIC and its Subsidiaries.

 

LIC Retained Businesses ” means all businesses which are held at the Effective Time by LIC and its Subsidiaries.

 

LIC Retained Liabilities ” means all Liabilities of LIC and its Subsidiaries at the Effective Time.

 

Liberty Ventures Option ” means an option to purchase shares of Liberty Ventures Common Stock pursuant to a stock incentive plan of LIC.

 

LMC ” means Liberty Media Corporation.

 

Losses ” means any and all damages, losses, deficiencies, Liabilities, penalties, judgments, settlements, claims, payments, fines, interest, costs and expenses (including the fees and expenses of any and all actions and demands, assessments, judgments, settlements and compromises relating thereto and the costs and expenses of attorneys’, accountants’, consultants’ and other professionals’ fees and expenses incurred in the investigation or defense thereof or in asserting, preserving or enforcing an Indemnitee’s rights hereunder), whether in connection with a Third-Party Claim or otherwise.

 

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Malone Proxy ” means the irrevocable proxy, substantially in the form of Exhibit D to the Transaction Agreement among Diller and the Malone Group.

 

Order ” means any order, injunction, judgment, decree or ruling of any court, governmental or regulatory authority, agency, commission or body.

 

Person ” means any individual, corporation, company, partnership, trust, incorporated or unincorporated association, joint venture or other entity of any kind.

 

Proxy Arrangements ” means the Transaction Agreement and the agreements and arrangements contemplated thereby, including the Reimbursement Agreement.

 

Qualifying Subsidiary ” means a former direct or indirect Subsidiary of LIC, any successor of any such former Subsidiary, and the parent company (directly or indirectly) of any such former Subsidiary or successor, including Splitco, LMC, TripCo, Broadband, Ascent Capital Group, Inc., Discovery Communications, Inc., Liberty Global, Inc., CommerceHub, Inc. and Starz.

 

QVCA ” means LIC’s Series A QVC Group common stock, par value $0.01 per share.

 

QVCB ” means LIC’s Series B QVC Group common stock, par value $0.01 per share.

 

Redemption Agent ” means Computershare Trust Company, N.A., 250 Royall Street, Canton, MA 02121.

 

Restructuring Plan ” means the Restructuring Plan attached hereto as Schedule 1.1.

 

Securities Act ” means the Securities Act of 1933, as amended, together with all rules and regulations promulgated thereunder.

 

Services Agreement ” means the Services Agreement to be entered into between LMC and Splitco, substantially in the form attached hereto as Exhibit C .

 

Stockholders Agreement ” means the Amended and Restated Stockholders Agreement, dated as of December 20, 2011, by and between LIC and Barry Diller, as amended.

 

Splitco Assets ” means Bodybuilding.com, LLC and the Expedia Securities and all Assets related thereto.

 

Splitco Board ” means the Board of Directors of Splitco or a duly authorized committee thereof.

 

Splitco Businesses ” means Splitco’s wholly owned Subsidiary Bodybuilding.com, LLC.

 

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Splitco Charter ” means the Restated Certificate of Incorporation of Splitco to be filed with the Delaware Secretary of State immediately prior to the Effective Time, substantially in the form attached hereto as Exhibit D.

 

Splitco Entity ” or “ Splitco Entities ” means and includes each of Splitco and its Subsidiaries, after giving effect to the Restructuring.

 

Splitco Liabilities ” means all Liabilities of LIC and its Subsidiaries relating to Bodybuilding.com, LLC and to the Expedia Securities.

 

Splitco Transitional Plan ” means the Liberty Expedia Holdings, Inc. Transitional Stock Adjustment Plan.

 

Subsidiary ” when used with respect to any Person, means (i)(A) a corporation a majority in voting power of whose share capital or capital stock with voting power, under ordinary circumstances, to elect directors is at the time, directly or indirectly, owned by such Person, by one or more Subsidiaries of such Person, or by such Person and one or more Subsidiaries of such Person, whether or not such power is subject to a voting agreement or similar encumbrance, (B) a partnership or limited liability company in which such Person or a Subsidiary of such Person is, at the date of determination, (1) in the case of a partnership, a general partner of such partnership with the power affirmatively to direct the policies and management of such partnership or (2) in the case of a limited liability company, the managing member or, in the absence of a managing member, a member with the power affirmatively to direct the policies and management of such limited liability company, or (C) any other Person (other than a corporation) in which such Person, one or more Subsidiaries of such Person or such Person and one or more Subsidiaries of such Person, directly or indirectly, at the date of determination thereof, has or have (1) the power to elect or direct the election of a majority of the members of the governing body of such Person, whether or not such power is subject to a voting agreement or similar encumbrance, or (2) in the absence of such a governing body, at least a majority ownership interest or (ii) any other Person of which an aggregate of 50% or more of the equity interests are, at the time, directly or indirectly, owned by such Person and/or one or more Subsidiaries of such Person.  For purposes of this Agreement, both prior to and after the Effective Time, none of Splitco and its Subsidiaries shall be deemed to be Subsidiaries of LIC or any of its Subsidiaries.

 

Tax Sharing Agreement ” means the Tax Sharing Agreement to be entered into between LIC and Splitco, substantially in the form attached hereto as Exhibit E .

 

Treasury Regulations ” means the Treasury regulations promulgated under the Code.

 

TripCo ” means Liberty TripAdvisor Holdings, Inc.

 

(b)           As used herein, the following terms will have the meanings set forth in the applicable section of this Agreement set forth below:

 

Adjusted Liberty Ventures Option

 

Section 2.3(b)

 

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Adjusted Liberty Ventures Restricted Stock Unit Award

 

Section 2.3(d)

Agreement

 

Preamble

Awards

 

Section 2.3(a)

Closing

 

Section 5.1

Closing Date

 

Section 5.1

Code

 

Recitals

Diller

 

Recitals

Disclosing Party

 

Section 4.6(a)

Effective Time

 

Section 2.1(a)

Expedia

 

Recitals

Indemnitee

 

Section 4.1(d)(i)

Indemnitor

 

Section 4.1(d)(i)

Leslie Malone

 

Recitals

Liberty Ventures Common Stock

 

Recitals

Liberty Ventures Restricted Stock Awards

 

Section 2.3(c)

LIC

 

Preamble

LIC Indemnified Parties

 

Section 4.1(a)

LVNTA

 

Recitals

LVNTB

 

Recitals

Malone

 

Recitals

Malone Group

 

Recitals

Margin Loan Agreement

 

Section 4.2

Margin Loan

 

Section 4.2

Other Agreements

 

Section 3.1(b)

Outstanding Liberty Ventures Option

 

Section 2.3(b)

Outstanding Liberty Ventures Restricted Stock Unit Award

 

Section 2.3(d)

Post Split Awards

 

Section 2.3(g)

Proprietary Information

 

Section 4.6(a)

Receiving Party

 

Section 4.6(b)

Redemption

 

Recitals

Redemption Date

 

Section 2.1(a)

Registration Statement

 

Section 2.2(c)

Reimbursement Agreement

 

Recitals

Restructuring

 

Section 1.1(a)

Restructuring Agreements

 

Section 3.1(b)

Separable Claims

 

Section 4.1(d)(ii)

Separate Legal Defenses

 

Section 4.1(d)(ii)

Split-Off

 

Recitals

Splitco

 

Preamble

Splitco Option

 

Section 2.3(b)

Splitco Common Stock

 

Section 2.1(b)

Splitco Indemnified Parties

 

Section 4.1(b)

Splitco Restricted Stock Awards

 

Section 2.3(c)

Splitco Restricted Stock Unit

 

Section 2.3(d)

 

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Splitco Series A Common Stock

 

Section 2.1(b)

Splitco Series B Common Stock

 

Section 2.1(b)

Stockholder Meeting

 

Section 2.1(a)

Third-Party Claim

 

Section 4.1(d)(i)

Transaction Agreement

 

Recitals

 

7.2          No Third-Party Rights .  Except for the indemnification rights of the LIC Indemnified Parties and the Splitco Indemnified Parties pursuant to Section 4.1, nothing expressed or referred to in this Agreement is intended or will be construed to give any Person other than the parties hereto and their respective successors and assigns any legal or equitable right, remedy or claim under or with respect to this Agreement, or any provision hereof, it being the intention of the parties hereto that this Agreement and all of its provisions and conditions are for the sole and exclusive benefit of the parties to this Agreement and their respective successors and assigns.

 

7.3          Notices .  All notices and other communications hereunder shall be in writing and shall be delivered in person, by facsimile (with confirming copy sent by one of the other delivery methods specified herein), by overnight courier or sent by certified, registered or express air mail, postage prepaid, and shall be deemed given when so delivered in person, or when so received by facsimile or courier, or, if mailed, three (3) calendar days after the date of mailing, as follows:

 

if to any LIC Entity :

Liberty Interactive Corporation

 

12300 Liberty Boulevard

 

Englewood, Colorado 80112

 

Facsimile (720) 875-5401

 

Attention: General Counsel

 

 

if to any Splitco Entity :

Liberty Expedia Holdings, Inc.

 

12300 Liberty Boulevard

 

Englewood, Colorado 80112

 

Facsimile (720) 875-5401

 

Attention: General Counsel

 

or to such other address as the party to whom notice is given may have previously furnished to the other party in writing in the manner set forth above.

 

7.4          Entire Agreement .  This Agreement (including the Exhibits and Schedules attached hereto) together with the Restructuring Agreements and the Other Agreements (including the Tax Sharing Agreement) embodies the entire understanding among the parties relating to the subject matter hereof and thereof and supersedes and terminates any prior agreements and understandings among the parties with respect to such subject matter, and no party to this Agreement shall have any right, responsibility or Liability under any such prior agreement or understanding.  Any and all prior correspondence, conversations and memoranda are merged herein and shall be without effect hereon.  No promises, covenants or representations of any kind, other than those expressly stated herein, have been made to induce either party to enter into this Agreement.

 

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7.5          Binding Effect; Assignment .  This Agreement and all of the provisions hereof shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns. Except with respect to a merger of a party, neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned by any party hereto without the prior written consent of the other parties; provided , however , that LIC and Splitco may assign their respective rights, interests, duties, liabilities and obligations under this Agreement to any of their respective wholly-owned Subsidiaries, but such assignment shall not relieve LIC or Splitco, as the assignor, of its obligations hereunder.

 

7.6          Governing Law; Jurisdiction .  This Agreement and the legal relations among the parties hereto will be governed in all respects, including validity, interpretation and effect, by the laws of the State of Delaware applicable to contracts made and performed wholly therein, without giving effect to any choice or conflict of laws provisions or rules that would cause the application of the laws of any other jurisdiction. Each of the parties hereto irrevocably agrees that any legal action or proceeding with respect to this Agreement, and the rights and obligations arising hereunder, or for recognition and enforcement of any judgment in respect of this Agreement, and the rights and obligations arising hereunder brought by the other party hereto or its successors or assigns, shall be brought and determined exclusively in the Delaware Court of Chancery and any state appellate court therefrom within the State of Delaware (or, if the Delaware Court of Chancery declines to accept jurisdiction over a particular matter, any state or federal court within the State of Delaware).  Each of the parties hereto hereby irrevocably submits with regard to any such action or proceeding for itself and in respect of its property, generally and unconditionally, to the personal jurisdiction of the aforesaid courts and agrees that it will not bring any action relating to this Agreement or the transactions contemplated hereby in any court other than the aforesaid courts.  Each of the parties hereto hereby irrevocably waives, and agrees not to assert as a defense, counterclaim or otherwise, in any action or proceeding with respect to this Agreement (a) any claim that it is not personally subject to the jurisdiction of the above named courts for any reason other than the failure to serve in accordance with Section 7.3 and this Section 7.6, (b) any claim that it or its property is exempt or immune from jurisdiction of any such court or from any legal process commenced in such courts (whether through service of notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment or otherwise) and (c) to the fullest extent permitted by applicable law, any claim that (i) the suit, action or proceeding in such court is brought in an inconvenient forum, (ii) the venue of such suit, action or proceeding is improper or (iii) this Agreement or the subject matter hereof may not be enforced in or by such courts.  Process in any such suit, action or proceeding may be served on any party anywhere in the world, whether within or without the jurisdiction of any such court.  Without limiting the foregoing, each party agrees that service of process on such party as provided in Section 7.3 shall be deemed effective service of process on such party.

 

7.7          Waiver of Jury Trial .  EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND, THEREFORE, EACH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT TO ANY ACTION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH OR RELATING TO THIS AGREEMENT.  EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (A) NO

 

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REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF SUCH ACTION, SEEK TO ENFORCE THE FOREGOING WAIVER, (B) EACH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (C) EACH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (D) EACH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 7.7.

 

7.8          Severability .  Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof. Any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.  Upon a determination that any provision of this Agreement is prohibited or unenforceable in any jurisdiction, the parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner in order that the provisions contemplated hereby are consummated as originally contemplated to the fullest extent possible.

 

7.9          Amendments; Waivers .  Any provision of this Agreement may be amended or waived if, but only if, such amendment or waiver is in writing and is signed, in the case of an amendment, by each party to this Agreement, or in the case of a waiver, by the party against whom the waiver is to be effective.  No failure or delay by any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege.  Except as otherwise provided herein, the rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by applicable law.  Any consent provided under this Agreement must be in writing, signed by the party against whom enforcement of such consent is sought.

 

7.10        No Strict Construction; Interpretation .

 

(a)           LIC and Splitco each acknowledge that this Agreement has been prepared jointly by the parties hereto and shall not be strictly construed against any party hereto.

 

(b)           When a reference is made in this Agreement to an Article, Section, Exhibit or Schedule, such reference shall be to an Article of, a Section of, or an Exhibit or Schedule to, this Agreement unless otherwise indicated.  The table of contents and headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.  Whenever the words “include”, “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation.”  The words “hereof”, “herein” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement.  All terms defined in this Agreement shall have the defined meanings when used in any certificate or other document made or delivered pursuant hereto unless otherwise defined therein.  The definitions contained in this Agreement are applicable to the singular as well as the plural forms of

 

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such terms and to the masculine as well as to the feminine and neuter genders of such term.  Any agreement, instrument or statute defined or referred to herein or in any agreement or instrument that is referred to herein means such agreement, instrument or statute as from time to time amended, modified or supplemented, including (in the case of agreements or instruments) by waiver or consent and (in the case of statutes) by succession of comparable successor statutes and references to all attachments thereto and instruments incorporated therein.  References to a Person are also to its permitted successors and assigns and references to a party means a party to this Agreement.

 

7.11        Conflicts with Tax Sharing Agreement .  In the event of a conflict between this Agreement and the Tax Sharing Agreement, the provisions of the Tax Sharing Agreement shall prevail.

 

7.12        Counterparts .  This Agreement may be executed in two or more identical counterparts, each of which shall be deemed to be an original, and all of which together shall constitute one and the same agreement. The Agreement may be delivered by facsimile transmission of a signed copy thereof.

 

26



 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written.

 

 

 

LIBERTY INTERACTIVE CORPORATION

 

 

 

 

 

 

 

 

By:

/s/ Pamela L. Coe

 

 

 

Name: Pamela L. Coe

 

 

 

Title: Senior Vice President and Secretary

 

 

 

 

 

 

 

 

LIBERTY EXPEDIA HOLDINGS, INC.

 

 

 

 

 

 

 

 

By:

/s/ Craig Troyer

 

 

 

Name: Craig Troyer

 

 

 

Title: Vice President and Assistant Secretary

 

[SIGNATURE PAGE TO REORGANIZATION AGREEMENT]

 



 

List of Omitted Exhibits and Schedules

 

The following exhibits and schedule to the Reorganization Agreement, dated as of October 26, 2016, by and between Liberty Interactive Corporation and Liberty Expedia Holdings, Inc. have not been provided herein:

 

Exhibit A-1 — Form of Aircraft Time Sharing Agreement (LMC Owned Aircraft) (See Exhibit 10.9 to Amendment No. 4 to Liberty Expedia Holdings, Inc.’s Registration Statement on Form S-1 on Form S-4 (the “S-4”))

 

Exhibit A-2 — Form of Aircraft Time Sharing Agreement (NetJets Aircraft) (See Exhibit 10.9 to the Form S-4)

 

Exhibit B — Form of Facilities Sharing Agreement (See Exhibit 10.5 to the S-4)

 

Exhibit C — Form of Services Agreement (See Exhibit 10.4 to the S-4)

 

Exhibit D — Form of Splitco Charter (See Exhibit 3.1 to the S-4)

 

Exhibit E — Form of Tax Sharing Agreement (See Exhibit 10.3 to the S-4)

 

Schedule 1.1 — Restructuring Plan

 

The undersigned registrant hereby undertakes to furnish supplementally a copy of any omitted exhibit or schedule to the Securities and Exchange Commission upon request.

 


Exhibit 8.1

 

SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP

 

FOUR TIMES SQUARE


 

NEW YORK 10036-6522

TEL: (212) 735-3000

FAX: (212) 735-2000

www.skadden.com

 

 

 

 

 

 

November 4, 2016

FIRM/AFFILIATE OFFICES


 

BOSTON

CHICAGO

HOUSTON

LOS ANGELES

PALO ALTO

WASHINGTON, D.C.

WILMINGTON


 

BEIJING

BRUSSELS

FRANKFURT

HONG KONG

LONDON

MOSCOW

MUNICH

PARIS

SÃO PAULO

SEOUL

SHANGHAI

SINGAPORE

SYDNEY

TOKYO

TORONTO

 

Liberty Interactive Corporation

12300 Liberty Boulevard

Englewood, Colorado 80112

 

Ladies and Gentlemen:

 

We have acted as special tax counsel to you, Liberty Interactive Corporation (“ Liberty ”), in connection with specified aspects of (i) the internal restructuring of certain assets owned by Liberty and its subsidiaries (the “ Contributed Assets ”), (ii) the contribution of the Contributed Assets by Liberty to Liberty Expedia Holdings, Inc. (“ SplitCo ”), a newly formed subsidiary of Liberty (the “ Contribution ”), (iii) the recapitalization of SplitCo’s outstanding stock into Series A common stock and Series B common stock (collectively, “ SplitCo Common Stock ”), and (iv) the distribution by Liberty of all of the outstanding shares of SplitCo Common Stock to holders of Liberty’s Liberty Ventures common stock (“ Liberty Ventures Common Stock ”) in exchange for a pro rata portion of such stock (the “ Split-off ”).  You have requested our opinion regarding certain U.S. federal income tax consequences of the Contribution and the Split-off (the “ Opinion ”).(1)

 

In rendering this Opinion, we have examined originals or copies, certified or otherwise identified to our satisfaction, of (i) the letter furnished to Liberty by its financial advisor with respect to the Split-off, dated as of November 1, 2016; (ii) the registration statement on Form S-1 filed by SplitCo with the Securities and Exchange Commission (the “ SEC ”) on March 24, 2016, together with the exhibits attached thereto, and Amendment No. 1 to Form S-1 on Form S-4 filed by

 


(1)               All “section” references in this Opinion are to the Internal Revenue Code of 1986, as amended (the “ Code ”), or to the Treasury Department regulations promulgated thereunder (the “ Treasury Regulations ”).

 



 

SplitCo with the SEC on June 10, 2016, together with the exhibits attached thereto, as further amended through the date hereof (collectively, the “ Registration Statement ”); (iii) the definitive proxy statement on Schedule 14A filed by Liberty with the SEC on June 10, 2016, together with the exhibits attached thereto, as amended through the date hereof (together with the Registration Statement, the “ Split-off SEC Filings ”); (iv) all other submissions to the SEC related to the Split-off SEC Filings; (v) the agreements listed on Schedule A attached hereto (collectively, the “ Agreements ”); (vi) the officer’s certificate furnished to us by Liberty, dated as of the date hereof, together with the exhibits attached thereto (the “ Liberty Officer’s Certificate ”); (vii) the officer’s certificate furnished to us by SplitCo, dated as of the date hereof, together with the exhibits attached thereto (the “ SplitCo Officer’s Certificate ,” and together with the Liberty Officer’s Certificate, the “ Officer’s Certificates ”); (viii) the representation letter furnished to us by Mr. John C. Malone, dated as of the date hereof (the “ Malone Representation Letter ”); and (ix) such other documents as we have considered necessary or appropriate as a basis for this Opinion.  In our examination, we have assumed the genuineness of all signatures, the legal capacity of all natural persons, the authenticity of all documents submitted to us as originals, the conformity to originals of all documents submitted to us as certified, photostatic, electronic, or facsimile copies, and the authenticity of the originals of such documents.

 

As to certain facts material to this Opinion, we have relied upon the statements and representations set forth in the Officer’s Certificates and the Malone Representation Letter.  We have assumed that such statements and representations are true, correct, and complete as of the date hereof and will continue to be true, correct, and complete without regard to any qualification as to knowledge, belief, or otherwise.  We have also assumed that the Contribution, the Split-off, and the other transactions contemplated by the Agreements will be consummated in accordance with their terms and in the manner described in the Split-off SEC Filings and the Agreements, and that none of the material terms or conditions contained therein will be waived or modified in any respect.  This Opinion is expressly conditioned upon, among other things, the initial and continuing accuracy of the facts, information, covenants, representations, and warranties set forth in the documents referred to above, including those contained in the Officer’s Certificates and the Malone Representation Letter.  Any change or inaccuracy in or to such facts, information, covenants, representations, or warranties (including on account of events occurring after the consummation of the Split-off) could affect one or more of the conclusions stated herein.

 

This Opinion is based on the Code, the Treasury Regulations, judicial decisions, published rulings and procedures of the Internal Revenue Service, and

 

2



 

such other authorities as we have considered relevant, all as in effect on the date hereof.  It should be noted that the authorities upon which this Opinion is based are subject to change at any time, possibly with retroactive effect.  Any change in such authorities could affect one or more of the conclusions expressed herein.  Moreover, there can be no assurance that this Opinion will be accepted by the Service or, if challenged, by a court.

 

Based upon and subject to the foregoing, it is our opinion that, under current U.S. federal income tax law:

 

1.                                       The Contribution, followed by the Split-off, will qualify as a reorganization under section 368(a)(1)(D).  Liberty and SplitCo will each be a “party to the reorganization” within the meaning of section 368(b).

 

2.                                       Liberty will not recognize any gain or loss on the Contribution.  Sections 361(a) and (b)(1)(A) and 357(a).

 

3.                                       SplitCo will not recognize any gain or loss on the Contribution.  Section 1032(a).

 

4.                                       SplitCo’s basis in each asset received from Liberty in the Contribution will be equal to Liberty’s basis in such asset immediately before the Contribution.  Section 362(b).

 

5.                                       SplitCo’s holding period in each asset received from Liberty in the Contribution will include Liberty’s holding period in such asset.  Section 1223(2).

 

6.                                       Liberty will not recognize any gain or loss on the Split-off.  Section 361(c).

 

7.                                       Except with respect to cash received in lieu of fractional shares of SplitCo Common Stock or Liberty Ventures Common Stock, holders of Liberty Ventures Common Stock will not recognize any gain or loss, and will not otherwise be required to include any amount in income, upon the exchange of Liberty Ventures Common Stock for SplitCo Common Stock in the Split-off.  Section 355(a)(1).

 

8.                                       The aggregate basis of the SplitCo Common Stock received by each holder of Liberty Ventures Common Stock in the Split-off will be the same as the shareholder’s aggregate basis in the Liberty Ventures

 

3



 

Common Stock surrendered in exchange for such SplitCo Common Stock.  Section 358(a)(1).

 

9.                                       The holding period of the SplitCo Common Stock received by each holder of Liberty Ventures Common Stock in the Split-off will include the holding period of the Liberty Ventures Common Stock surrendered in exchange for such SplitCo Common Stock, provided that the shareholder holds such Liberty Ventures Common Stock as a capital asset on the date of the Split-off.  Section 1223(1).

 

*                                                                                                                                          *                                                                                                                                          *

 

4



 

Except as set forth above, we express no opinion or other views regarding the tax consequences of the Contribution, the Split-off, or any related transactions.  This Opinion relates solely to certain U.S. federal income tax consequences of the Contribution and the Split-off, and no opinion is expressed as to the tax consequences of the Contribution and the Split-off under any state, local, or foreign tax laws or under any federal tax laws other than those pertaining to income taxation.  This Opinion is expressed as of the date hereof, and we are under no obligation to supplement or revise this Opinion to reflect any legal developments or factual matters or changes arising after the date hereof.

 

We are furnishing this Opinion to you solely in connection with the Contribution, the Split-off, and the Registration Statement.  We hereby consent to the use of our name under the caption “U.S. Federal Income Tax Consequences of the Split-off” in the Registration Statement and to the filing of this Opinion as an exhibit to the Registration Statement.  In giving this consent, we do not admit that we come within the category of persons whose consent is required under section 7 of the Securities Act of 1933, as amended, or the rules and regulations of the SEC thereunder.

 

 

 

Very truly yours,

 

 

 

/s/ Skadden, Arps, Slate, Meagher & Flom LLP

 

5



 

Schedule A

 

1.                                       Reorganization Agreement, dated as of October 26, 2016, by and between Liberty Interactive Corporation and Liberty Expedia Holdings, Inc.

 

2.                                       Tax Sharing Agreement, dated as of November 4, 2016, by and between Liberty Interactive Corporation and Liberty Expedia Holdings, Inc.

 

3.                                       Services Agreement, dated as of November 4, 2016, by and between Liberty Media Corporation and Liberty Expedia Holdings, Inc.

 

4.                                       Facilities Sharing Agreement, dated as of November 4, 2016, by and among Liberty Expedia Holdings, Inc., Liberty Media Corporation, and Liberty Property Holdings, Inc.

 

5.                                       Aircraft Time Sharing Agreement, dated as of November 4, 2016, by and between Liberty Media Corporation and Liberty Expedia Holdings, Inc.

 

6.                                       Aircraft Time Sharing Agreement, dated as of November 4, 2016, by and between Liberty Media Corporation and Liberty Expedia Holdings, Inc.

 

7.                                       Aircraft Time Sharing Agreement, dated as of November 4, 2016, by and among Liberty Citation, Inc., Liberty Denver Arena, LLC, and Liberty Expedia Holdings, Inc.

 

8.                                       Amended and Restated Transaction Agreement, dated as of September 22, 2016, by and among Liberty Interactive Corporation, Liberty Expedia Holdings, Inc., Barry Diller, John C. Malone, and Leslie Malone, and the schedules and exhibits attached thereto.

 

9.                                       Amended and Restated Reimbursement Agreement, dated as of September 22, 2016, by and among Liberty Interactive Corporation, Liberty Expedia Holdings, Inc., and Expedia, Inc., and the exhibits attached thereto.

 

10.                                Amended and Restated Governance Agreement, dated as of December 20, 2011, by and among Expedia, Inc., Liberty Interactive Corporation, and Barry Diller.

 

1



 

11.                                Amended and Restated Stockholders Agreement, dated as of December 20, 2011, by and between Liberty Interactive Corporation and Barry Diller.

 

2


Exhibit 99.3

NNNNNNNNNNNN . + Computershare Trust Company, N.A. 250 Royall Street Canton Massachusetts 02021 NNNNNN Within USA, US territories & Canada 800 546 5141 Outside USA, US territories & Canada 781 575 2765 www.computershare.com MR A SAMPLE DESIGNATION (IF ANY) ADD 1 ADD 2 ADD 3 ADD 4 ADD 5 ADD 6 CN12N345N678N90 NJ NT Tax ID certification on file: <Certified Y/N> 12345678901234 TOTAL SHARES YOUR ACTION IS REQUIRED - PLEASE FOLLOW THESE INSTRUCTIONS Our records indicate you currently hold Liberty Interactive Corporation (“LIC”) Liberty Ventures common stock certificates that have not been partially converted to Liberty Expedia Holdings, Inc. (“LEH”) common stock as a result of the redemption of a portion of shares of Liberty Ventures common stock for shares of LEH common stock and the subsequent split-off of LEH from LIC, which was effective at 5:00 p.m., New York City time, on November 4, 2016. In order to receive your LEH common stock, cash-in-lieu of fractional shares and any future dividend or distributions the LEH Board of Directors may declare, you MUST return these certificates. Please note: If you also hold shares of Liberty Ventures common stock in uncertificated form, you will receive a statement of your uncertificated LEH shares and your unredeemed shares of Liberty Ventures common stock, which are uncertificated following the split-off, in a separate mailing. To receive the new LEH shares for your certificated shares, please follow the instructions below. Lost Certificates: If you cannot locate some or all of your certificates, read and complete the Lost Securities Affidavit on the back of this form and also mark the boxes below with an X corresponding for the certificate numbers you cannot locate. Step 1. Your Liberty Ventures common stock certificates: Locate and return the original certificate(s) listed below. LostCertificate Numbers Shares Lost Certificate Numbers Shares XXXX12345678 XXXX12345678 XXXX12345678 XXXX12345678 XXXX12345678 12345678901234 12345678901234 12345678901234 12345678901234 12345678901234 XXXX12345678 XXXX12345678 XXXX12345678 XXXX12345678 XXXX12345678 12345678901234 12345678901234 12345678901234 12345678901234 12345678901234 You hold more than 10 certificates, not all certificates can be listed on this form. Other Certificate Total 12345678901234 Total Certificated Shares 12345678901234 Shares Held in Book Entry by Us 12345678901234 Total Shares 12345678901234 Step 2. Signatures: Sign and date this form. The names of the registered holders are listed in the Name and Address at the top of this form. All registered holders MUST sign exactly as your name(s) appears above. Signature of Owner Signature of Co-Owner (if more than one registered holder listed) Date (mm/dd/yyyy) + 1 2 3 4 5 6 7 8 9 0 1 2 02GPMB E X O T F C O Y C C L S NNNNNNNNN Exchange Form - ACTION REQUIRED - The listed original certificates below MUST be returned with this Exchange Form

 


. Additional Instructions for Completing the Exchange Form and Surrendering Certificates Delivery of Certificates: Your old Liberty Ventures common stock certificate(s) and this Exchange Form must be sent or delivered to Computershare. The method of delivery of certificates to be surrendered to Computershare at one of the addresses set forth on the bottom of this page is at the option and risk of the surrendering stockholder. Delivery will be deemed effective only when received by Computershare. For your convenience, a return envelope is enclosed. Authorization and Registration: The signature(s) on the reverse side represents that you have full authority to surrender these certificate(s) for exchange and warrants that the shares represented by these certificates are free and clear of liens, restrictions, adverse claims and encumbrances. Special Transfer Instructions: If your check should be issued to a person(s) other than the registered owner(s), a transfer of ownership form must be completed. You may obtain transfer of ownership requirements and instructions from the internet at www.computershare.com or by calling Computershare at the number listed below. Tax Forms and Backup Withholding: If your taxpayer identification number (“TIN”) is not certified in our records, we have enclosed a Form W-9. If the payee is a “U.S. person” (as defined in the instructions to Form W-9), follow the instructions on the enclosed Form W-9 for completing and signing the form. If the payee is a not a U.S. person and the form W-8BEN applies to your situation, follow the instructions on the enclosed Form W-8BEN for completing and signing such form. If a different form applies to your situation within the IRS suite of W-8 forms, refer to the IRS website for instructions on completing and signing such applicable form. Failure to provide a properly completed and signed Form W-9, Form W-8BEN or other applicable form to Computershare may subject the payee to backup withholding on any reportable payment under U.S. federal tax law. LOST CERTIFICATE BOND -------------------X -------------------Per share = --------------------------(MINIMUM $20.00) + $80.00 processing fee = --------------------------Amount Enclose all original certificates in the envelope provided and send with completed form to Computershare. By Mail: Computershare Corporate Actions P.O. Box 43014 Providence, RI 02940-3014 By Overnight Delivery: Computershare Corporate Actions 250 Royall Street Canton, MA 02021 For Assistance Please Call: Within USA, US territories & Canada: 1-800-546-5141 Outside USA, US territories & Canada: 1-781-575-2765 Lost Securities Affidavit IF YOU CANNOT LOCATE SOME OR ALL OF YOUR CERTIFICATE(S), PLEASE COMPLETE THE BELOW AFFIDAVIT SAFECO INSURANCE COMPANY OF AMERICA LOST SECURITIES AFFIDAVIT FOR ACCOUNTS WITH LESS THAN $250,000.00 IN MARKET VALUE By checking the lost certificates box and signing the bottom of this form, I (we) certify that (a) I (we) am (are) the lawful owner(s) (“Owner”) of the shares described on the front of this form; (b) I (we) reside at the address set forth on the front of this form; (c) I (we) am (are) entitled to possession of the lost certificate(s) (the “Lost Securities”); (d) the Lost Securities have been lost, mislaid, stolen or destroyed and cannot now be produced; (e) the Lost Securities WERE NOT ENDORSED and neither the Lost Securities nor the Owner(s)’ rights therein have, in whole or in part, been cashed, negotiated, sold, transferred, hypothecated, pledged, disposed of, and to my (our) knowledge, no claim of right, like or interest, adverse to the Owner, in or to the Lost Securities, has been made or advanced by any person; (f) I (we) have made or caused to be made a diligent search for the Lost Securities and have been unable to find or recover the Lost Securities; (g) I (we) make this Affidavit of Lost Securities For Computershare Accounts for the purpose of inducing the issuance of new or replacement Securities (“Replacement Securities”) (in book-entry form, unless unavailable through the issuer) in lieu of the said Lost Securities, or the distribution to the Owner(s) of proceeds (including liquidation) thereof; and (h) I (we) agree that this Lost Securities Affidavit for Computershare Accounts may be delivered to and made part of the Safeco Insurance Company of America Bond No. 5926165. The Owner(s) hereby agree(s) in consideration of (1) the issuance of such replacement Securities in lieu of the Lost Securities, or of the distribution to the Owner of the proceeds there from, and (2) the assumption by Safeco Insurance Company of America of liability therefore under its Bond, the OWNER, his/her/its heirs, successors and assigns agree to indemnify, protect and save harmless Safeco Insurance Company of America, Computershare Inc., Computershare Trust Company, N.A. and the issuer, jointly and severally, and their respective agents, representatives, successors, and assigns, from and against all losses, cost and damages (court costs and attorneys fees) to which they may be subject or liable arising out of or relating to the Lost Securities, the issuance of Replacement Securities, the Owner’s requested action herein (or any other action arising out of or relating to the Replacement of Lost Securities), or Safeco Insurance Company of America’s assumption of liability under its bond described above. STEP 1. CALCULATE LOST CERTIFICATE BOND PREMIUM - FEE MUST BE ENCLOSED [TBD] PREMIUM CALCULATION: Shares Lost Bond premium Total Premium Due Total Check Multiply the number of shares lost by the Safeco Insurance Company of America Bond premium noted above to calculate the premium you owe. If you have Lost Securities representing [TBD] or fewer shares, there is a minimum premium of $20.00. There is also a processing fee of $80.00. PLEASE MAKE YOUR CHECK PAYABLE TO “COMPUTERSHARE” FOR THE BOND PREMIUM AND PROCESSING FEE AND ENCLOSE WITH THIS AFFIDAVIT. If your request is approved, Computershare will forward the Bond premium to Safeco Insurance Company of America. We cannot complete your exchange without a Surety Bond. NOTE: This premium is calculated based upon each lost share, not per each lost certificate. STEP 2. SIGNATURES OF OWNERS - all registered owners MUST sign below exactly as the name(s) appear on the front of this form If your lost certificate(s) is (are) part of an estate or trust, or are valued at more than $250,000, please contact Computershare for additional instructions. ANY PERSON WHO, KNOWINGLY AND WITH INTENT TO DEFRAUD ANY INSURANCE COMPANY OR OTHER PERSON, FILES A STATEMENT OF CLAIM CONTAINING ANY MATERIALLY FALSE INFORMATION OR CONCEALS FOR THE PURPOSE OF MISLEADING, INFORMATION CONCERNING ANY FACT MATERIAL THERETO, COMMITS A FRAUDULENT INSURANCE ACT, WHICH IS A CRIME. Signature of owner Signature of Co-Owner, if any STEP 3. NOTARIZATION You must have your signature(s) notarized if you have lost more than [TBD] shares. State of County of Notary Signature Printed Name of Notary Sworn to and subscribed to me this (date) (month/day/year) My commission Expires (date) (month/day/year) (Notary Seal)