SEPARATION AGREEMENT
EXHIBIT 10.1
EXECUTION
COPY
This
SEPARATION AGREEMENT (this "Agreement"), dated as of February 26, 2008,
is hereby entered into between The DIRECTV Group, Inc., a Delaware corporation
("DIRECTV" or "the Company"), and News Corporation, a Delaware
corporation ("News").
WHEREAS,
News has entered into a Share Exchange Agreement with Liberty Media Corporation
("Liberty"), dated as of December 22, 2006 ("Exchange Agreement"),
pursuant to which Liberty has agreed, among other things, to acquire indirectly
all of the shares of common stock, par value $.01 per share, of DIRECTV owned
indirectly by News, together with all equity interests of News in each RSN
Subsidiary and the Cash Amount, in exchange for shares of capital stock of
News
beneficially owned by Liberty;
WHEREAS,
for purposes of this Agreement, capitalized terms not otherwise defined herein
shall have the meanings given such terms in the Exchange Agreement;
WHEREAS,
DIRECTV has been requested or required to take certain actions in connection
with the Transactions, including making various filings and cooperating with
various Governmental Authorities; and, in accordance with Section 10.2 of the
Exchange Agreement, News has agreed to pay, or reimburse DIRECTV for, certain
fees, costs and expenses incurred by DIRECTV in connection with such
actions;
WHEREAS,
unanticipated objections have been asserted with respect to the Transactions
under certain Antitrust Laws or Communications Regulations and the parties
have
been advised that the FCC Consent will include, as a condition, that certain
actions will be taken within one year from the effective date of the FCC
Consent, with respect to the direct-to-home satellite operations of a Subsidiary
of DIRECTV in Puerto Rico, or with respect to the cable operations in Puerto
Rico of a Subsidiary of Liberty Global, Inc. ("LGI"), a former Subsidiary
of Liberty, or with respect to the ownership of either of the foregoing (the
"FCC Puerto Rico Condition");
WHEREAS,
neither News nor Liberty may be able to satisfy the FCC Puerto Rico Condition
in
accordance with its terms, and DIRECTV has been requested by News and Liberty
to
commit or agree to satisfy such FCC Puerto Rico Condition within the time period
specified in such FCC Puerto Rico Condition (the "DIRECTV Undertakings")
in accordance with the Undertakings Agreement (as defined below), in order
to
enable News and Liberty to consummate the Transactions;
WHEREAS,
the Board of Directors of DIRECTV (the "Board") has established a special
committee of the Board comprised solely of independent directors (the
"Special Committee") to consider any actions to be taken by DIRECTV in
connection with the Transactions;
WHEREAS,
the Special Committee has determined that DIRECTV would be willing to authorize
the DIRECTV Undertakings in consideration of the arrangements and agreements
provided for herein, and in consideration of the arrangements and agreements
concurrently negotiated with Liberty, as set forth in the Undertaking Agreement
dated as of the date hereof between DIRECTV, News and Liberty (the
"Undertakings Agreement") attached as Annex 1-A, in light of the pending
separation of News and the Company upon the consummation of the Transactions;
and
WHEREAS,
News has determined that, in consideration of the Company's willingness to
provide the DIRECTV Undertakings and in light of the pending separation of
News
and the Company upon the consummation of the Transactions, it is appropriate
for
News and the Company to agree upon the arrangements and agreements addressed
herein.
NOW,
THEREFORE, in consideration of the foregoing and the covenants and agreements
herein contained, and for other good and valuable consideration, the receipt
and
sufficiency of which are hereby acknowledged, each of the parties hereby agrees
as follows:
1. Expense
Reimbursement.
1.1 Regardless
of whether the Transactions are consummated, News hereby agrees that it shall
reimburse DIRECTV (i) for certain fees, costs and expenses incurred by DIRECTV
in accordance with Section 10.2 of the Exchange Agreement (including without
limitation Liberty’s due diligence review of DIRECTV and DIRECTV’s subsidiaries
or DIRECTV’s actions taken in anticipation of the consummation of the
Transactions, including without limitation the reasonable fees and expenses
of
the outside advisers, accountants and legal counsel of DIRECTV and of the
Special Committee and any filing fees paid by DIRECTV to any Governmental
Authority and other reasonable and reasonably documented out-of-pocket fees,
costs and expenses paid or incurred by DIRECTV or its Affiliates (which term,
for purposes of this Agreement, shall exclude LMC or any Affiliate of LMC)
in
connection with the review of the Transactions by any Governmental Entity)
and
(ii) for reasonable and reasonably documented out-of-pocket fees, costs and
expenses incurred by DIRECTV in connection with the negotiation of this
Agreement, the Undertakings Agreement or any ancillary documents related to
entering into those agreements.
1.2 News
shall provide DIRECTV with at least three (3) Business Days’ prior written
notice of the anticipated Closing Date. No later than two (2)
Business Day prior to the anticipated Closing Date, DIRECTV shall, in good
faith, prepare and deliver to News a certificate (the "Closing Fee
Certificate"), signed by an officer of DIRECTV setting forth a list of the
fees,
costs and expenses incurred by and billed to DIRECTV prior to such date to
be
reimbursed by News in accordance with this Section 1, together with reasonable
supporting documentation. In the event that News objects to the
amounts set forth on the Closing Fee Certificate, DIRECTV, News and their
respective representatives shall promptly resolve such objection prior to the
Closing in a mutually agreeable manner. Immediately prior to the
consummation of the Exchange, News shall pay, in full satisfaction of its
obligations under this Section 1 to reimburse fees, costs and expenses incurred
by and billed to DIRECTV prior to the date of the Closing Fee Certificate,
by
wire transfer of immediately available funds, the amount set forth on the
Closing Fee Certificate (as adjusted prior to Closing by mutual agreement of
DIRECTV and News, if applicable) to an account designated by DIRECTV to News
no
later than two (2) Business Days prior to the anticipated Closing
Date. Notwithstanding the foregoing, in the event that the Exchange
Agreement shall have been terminated in accordance with its terms, upon such
termination this Section 1.2 shall be of no further force and effect and Section
1.3 shall govern the obligations of News to make the payments provided for
in
Section 1.1.
1.3 In
the
event that the Exchange Agreement shall have been terminated in accordance
with
its terms, News shall promptly notify DIRECTV of such
termination. Promptly following receipt of such notice, DIRECTV
will in good faith, prepare and deliver to News a certificate (the
“Termination Event Fee Certificate”), signed by an officer of DIRECTV setting
forth a list of the fees, costs and expenses incurred by DIRECTV through the
date of such Termination Event Fee Certificate to be reimbursed by News in
accordance with this Section 1, together with reasonable supporting
documentation. In the event that News objects to the amounts set
forth on the Termination Event Fee Certificate, DIRECTV, News and their
respective representatives shall promptly resolve such objection in a mutually
agreeable manner. Within two (2) Business Days following receipt of
the Termination Event Fee Certificate, or, if News shall object to the amounts
set forth on the Termination Event Fee Certificate, resolution of News’
objection, News shall pay, in full satisfaction of its obligations under this
Section 1 to reimburse fees, costs and expenses incurred by DIRECTV through
the
date of the Termination Event Fee Certificate, by wire transfer of immediately
available funds, the amount set forth on the Termination Event Fee Certificate
(as adjusted by mutual agreement of DIRECTV and News, if applicable) to an
account designated by DIRECTV to News in the Termination Event Fee
Certificate.
1.4 Following
Closing, DIRECTV shall, in good faith, from time to time, prepare and deliver
to
News certificates (each, a "Post-Closing Fee Certificate"), signed by an officer
of DIRECTV setting forth a list of the fees, costs and expenses incurred by
DIRECTV prior to the Closing but not previously included in the submission
of
the Closing Fee Certificate to be reimbursed by News in accordance with this
Section 1, together with reasonable supporting documentation. In the
event that News objects to the amounts set forth on the Post-Closing Fee
Certificate, DIRECTV, News and their respective representatives shall promptly
resolve such objection in a mutually agreeable manner. Within two (2)
Business Days following receipt of the applicable Post-Closing Fee Certificate,
or, if News shall object to the amounts set forth on the Post-Closing Fee
Certificate, resolution of News’ objection, News shall pay, in full satisfaction
of its obligations under this Section 1 to reimburse fees, costs and expenses
incurred by DIRECTV prior to Closing but not previously included in the
submission of the Closing Fee Certificate, by wire transfer of immediately
available funds, the amount set forth on such Post-Closing Fee Certificate
(as
adjusted by mutual agreement of DIRECTV and News, if applicable) to an account
designated by DIRECTV to News in such Post-Closing Fee
Certificate. Notwithstanding the foregoing, in the event that the
Exchange Agreement shall have been terminated in accordance with its terms,
upon
such termination this Section 1.4 shall be of no further force and
effect.
2. Actions
at Closing.
2.1 Immediately
prior to the consummation of the Exchange, News and DIRECTV shall enter into
the
agreements, and take the actions, provided for in Exhibit 1.
2.2 Immediately
prior to the consummation of the Exchange, (a) News shall
contribute to Splitco, in addition to any amounts to be contributed under
the Exchange Agreement, the sum of $67,500,000 by wire transfer of
immediately available funds and (b) Splitco shall contribute to DIRECTV the
sum
of $160 million (the “Capital Contribution”) by wire transfer of
immediately available funds.
2.3 The
payment made under Section 2.2 shall, for all Tax purposes, except as required
by Law, be treated by the parties hereto and their Affiliates as occurring
immediately prior to the Exchange and be characterized as (a) a contribution
of
capital by News to Splitco for payments made pursuant to 2.2(a) in the amount
of
$67,500,000 and (b) a contribution of capital by Splitco to DIRECTV in the
amount of $160 million for payment made pursuant to Section 2.2(b).
3. Assignment;
Third Party Beneficiaries. Any assignment of this Agreement by a
party without the prior written consent of the other party hereto shall be
void. This Agreement is for the benefit of the parties hereto and
their respective successors and assigns, and no other Person shall have any
rights under or be deemed a third party beneficiary of this
Agreement.
4. Severability. If
any term, provision, covenant or restriction contained in this Agreement is
held
by a court of competent jurisdiction or other authority to be invalid, void
or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions contained in this Agreement shall remain in full force and effect
and shall in no way be affected, impaired or invalidated so long as the economic
or legal substance of the transactions and agreements contemplated hereby is
not
affected in any manner materially adverse to any party. Upon such
determination, 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 transactions and agreements
contemplated hereby be consummated as originally contemplated to the fullest
extent possible.
5. Entire
Agreement; Amendments; Waiver. This Agreement (including the
Exhibits and Annexes hereto) contains the entire agreement between News and
DIRECTV concerning the terms of this Agreement. No modification or
amendment of this Agreement or waiver of the terms and conditions hereof shall
be binding upon News or DIRECTV unless approved in writing by each of News
and
DIRECTV. No failure or delay by a 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 right, power or privilege
hereunder.
6. Counterparts. This
Agreement may be executed via electronic signature and in separate counterparts,
each of which shall be deemed to constitute an original which is part of the
same document.
7. Remedies. It
is understood and agreed that monetary damages would not be a sufficient remedy
for any breach of this Agreement by either of the parties or their respective
representatives and that each party shall be entitled to equitable relief,
including an injunction and specific performance, as a remedy for such
breach. Without prejudice to the rights and remedies otherwise
available to a party, including monetary damages, each party agrees that the
parties shall be entitled to equitable relief by way of injunction or otherwise
if a party or any of its representatives breaches or threatens to breach any
of
the provisions of this Agreement. Neither rescission, set-off nor
reformation of this Agreement shall be available as a remedy to any of the
parties hereto.
8. Governing
Law. This Agreement shall be governed by, and construed in
accordance with, the internal Laws of the State of Delaware, without reference
to the choice of law principles thereof.
9. Jurisdiction. The
parties hereby irrevocably and unconditionally consent to submit to the
exclusive jurisdiction of the Delaware Chancery Courts, or, if the Delaware
Chancery Courts do not have subject matter jurisdiction, of the state courts
of
the State of Delaware located in Wilmington, Delaware, or of the United States
of America located in any district within such state, with respect to any Action
arising out of or relating to this Agreement and the transactions contemplated
hereby, and further agree that service of any process, summons, notice or
document by U.S. registered mail to the respective addresses set forth in
Section 11 of this Agreement shall be effective service of process for any
Action brought against the parties in any such court. The parties
hereby irrevocably and unconditionally waive any objection to the laying of
venue of any Action arising out of this Agreement or the transactions
contemplated hereby in the courts referenced in the preceding sentence, and
hereby further irrevocably and unconditionally waive and agree not to plead
or
claim in any such court that any such action, suit or proceeding brought in
any
such court has been brought in an inconvenient forum.
10. Waiver
of Jury Trial. EACH OF THE PARTIES HERETO IRREVOCABLY AND
UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,
ANY
AND ALL RIGHTS TO TRIAL BY JURY IN CONNECTION WITH ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE MATTERS CONTEMPLATED
HEREBY.
11. Notices. All
notices or other communications required or permitted hereunder shall be in
writing and shall be delivered personally, 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 personally, or when so received
by
facsimile or courier, or, if mailed, three calendar days after the date of
mailing, as follows:
|
If
to News:
|
News
Corporation
0000
Xxxxxx xx xxx Xxxxxxxx
Xxx
Xxxx, XX 00000
Facsimile: (000)
000-0000
Attention: General
Counsel
|
|
with
a copy to:
|
Skadden,
Arps, Slate, Xxxxxxx & Xxxx LLP
Xxxx
Xxxxx Xxxxxx
Xxx
Xxxx, XX 00000
Facsimile: (000)
000-0000
Attention: Xxx
X. Xxxxx
Xxxxxx
X. Xxxxx
|
|
If
to DIRECTV:
|
The
DIRECTV Group, Inc.
0000
Xxxx Xxxxxxxx Xxxxxxx
Xx
Xxxxxxx, XX 00000
Facsimile: (000)
000-0000
Attention: General
Counsel
|
|
with
a copy to:
|
Simpson,
Thacher & Xxxxxxxx LLP
000
Xxxxxxxxx Xxxxxx
Xxx
Xxxx, XX 00000-0000
Facsimile: (000)
000-0000
Attention: Xxxxxxx
Xxxxxxx
Xxxxxxx
Xxxx Xxxxx
|
or
to
such other address and with such other copies as any party hereto shall notify
the other parties hereto (as provided above) from time to time.
IN
WITNESS WHEREOF, each of the undersigned has duly executed this Agreement as
of
the date first written above.
THE
DIRECTV GROUP, INC.
By: /s/
XXXXX X. XXXXXX
Name: Xxxxx
X. Xxxxxx
Title: Executive
Vice President and General Counsel
NEWS
CORPORATION
By: /s/
XXXXXXXX XXXXXX
Name: Xxxxxxxx
Xxxxxx
Title: Senior
Executive Vice President and General Counsel
