EXHIBIT 2.2
ASSET ACQUISITION AGREEMENT
AGREEMENT dated as of June 11, 1997 (this "Agreement"), by and among The
News Corporation Limited, a South Australia corporation ("News"), MCI
Telecommunications Corporation, a Delaware corporation ("MCI"), American Sky
Broadcasting LLC, a Delaware limited liability company and wholly-owned,
indirect subsidiary of News ("ASkyB" and, with News and MCI, collectively, the
"Transferors"), and PRIMESTAR Partners L.P., a Delaware limited partnership
("Primestar"), and, for purposes of Section 5, Section 8.4 and Section 8.12
only, each of the general partners and limited partners of Primestar.
W I T N E S S E T H :
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WHEREAS, the Transferors own certain assets relating to the direct
broadcast satellite business (the "DBS Assets"); and
WHEREAS, heretofore ASkyB decided to abandon its plan to individually
conduct a U.S. Satellite Business and desires to dispose of certain of its DBS
Assets; and
WHEREAS, the partners of Primestar are currently contemplating a
transaction (the "Roll-up") whereby they, along with certain affiliated
entities, will contribute certain assets to a new company ("Newco"), which will
be a publicly traded company following the Roll-up, in exchange for common stock
of Newco, and Primestar and/or its assets will become wholly-owned by Newco all
as more fully set forth in the letter dated as of June 11, 1997, including the
Summary of Business Terms and other exhibits attached thereto (the "Roll-up
MOU"), a copy of which, as executed, is attached hereto as Exhibit I; and
WHEREAS, Newco desires to acquire such DBS Assets; and
WHEREAS, the partners of Primestar intend for the Roll-up to qualify as a
tax-free exchange pursuant to Section 351 of the Internal Revenue Code of 1986,
as amended (the "Code"); and
WHEREAS, upon the terms and conditions set forth herein, the Transferors
desire to transfer the DBS Assets, subject to certain liabilities related
thereto (the "Asset Transfer"), to Newco or, if the Roll-up has not been
consummated within 270 days of the date hereof, to Primestar, and Newco or
Primestar, as the case may be, desires to take ownership of the Transferred
Assets (as hereinafter defined); and
WHEREAS, Primestar and the Transferors intend for the Asset Transfer to
qualify as a tax-free exchange pursuant to Section 351 of the Code (or with
respect to the transfer of the DBS Assets if the DBS Assets are transferred to
Primestar, as a tax-free exchange pursuant to Section 721 of the Code);
NOW, THEREFORE, in consideration of the respective promises, covenants and
agreements contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto do
hereby agree as follows:
1. Definitions.
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1.1 "Acceptable Alternative Arrangement" means any arrangement
satisfactory to Newco and its counsel and to the Transferors and their
respective counsel to ensure Newco's continuous, irrevocable (subject to renewal
by the FCC) and exclusive right to
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use and, subject to Regulatory Provisions, to direct the use of the capacity of
the 110 Slot (including, without limitation, all rights with respect to any
successor satellites), at no further cost to Newco, in excess of the costs that
Newco would have incurred if Newco held the authorizations for the 110 Slot
directly, to the same effect as if Newco were the FCC licensee of (or owner of
the FCC licensee of) the 110 Slot.
1.2 "Adjusted Primestar Valuation" shall have the meaning set forth
in Section 3.3 hereof.
1.3 "Affiliate" shall mean any person or entity controlling,
controlled by, or under common control with, an entity. "Control" of any entity
shall mean the possession, direct or indirect, of the power to direct or cause
the direction of the management and policies of a person, whether through the
ownership of voting securities, by contract, or otherwise.
1.4 "ASkyB Valuation" means the amount equal to (a) the aggregate
amount expended by News, MCI and ASkyB under and in connection with the
Contracts up to and including the business day immediately preceding the earlier
of the Closing Date and September 30, 1997, plus (b) the costs incurred in
connection with the 110 Slot, which costs include $682.5 million, which was the
price paid for the rights to the 110 Slot at an auction conducted by the FCC
(the "Auction Price"), plus (c) interest, at the rate of six percent (6%) per
annum, on the amounts set forth in (a) and (b) from the respective payment dates
of such amounts up to and including the business day immediately preceding the
earlier of the Closing Date and September 30, 1997; provided, however, that (i)
in no event shall the amount set forth in (a) with respect to any Contract
exceed the sum of the aggregate amounts designated on Schedule A, with regard to
such Contract, as "Paid to Date" and "Remaining Commitment,"
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minus any remaining obligation of the Transferors (or Newco, following the
Closing) under such Contract as of the business day immediately preceding the
earlier of the Closing Date and September 30, 1997, and (ii) in no event shall
the costs set forth in (b) above exceed $683.6 million.
1.5 "Assumed Liabilities" shall have the meaning set forth in Section
2.4 hereof.
1.6 "Basis" means any past or present fact, situation, circumstance,
status, condition, activity, practice, plan, occurrence, event, incident,
action, failure to act, or transaction that forms or could reasonably form the
basis for any specified consequence.
1.7 "Certificate of Designation" shall have the meaning set forth in
Section 3.1 hereof.
1.8 "Claims Notice" shall have the meaning set forth in Section 10.5
hereof.
1.9 "Closing" shall have the meaning set forth in Section 4.1 hereof.
1.10 "Closing Date" shall have the meaning set forth in Section 4.1
hereof.
1.11 "Code" means the Internal Revenue Code of 1986, as amended, and
the rules and regulations promulgated thereunder.
1.12 "Communications Act" means the Communications Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
1.13 "Consideration Shares" shall have the meaning set forth in
Section 3.1 hereof.
1.14 "Contracts" shall have the meaning set forth in Section 2.1
hereof.
1.15 "Conversion Price" shall have the meaning set forth in Section
3.2 hereof.
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1.16 "Conversion Shares" shall have the meaning set forth in Section
3.1 hereof.
1.17 "Convertible Note" shall have the meaning set forth in Section
3.1 hereof.
1.18 "DBS" shall have the meaning set forth in Section 2.2 hereof.
1.19 "Dispositions" has the meaning set forth in Section 8.5 hereof.
1.20 "ECC Indemnification Agreement" shall have the meaning set forth
in Section 10.1 hereof.
1.21 "Employee Benefit Plan" means any (a) Employee Pension Benefit
Plan, including, without limitation, qualified and non-qualified plans and
defined benefit and defined contribution plans; (b) Employee Welfare Benefit
Plan; and (c) material fringe benefit plan or program.
1.22 "Employee Pension Benefit Plan" has the meaning set forth in
ERISA (Section) 3(2).
1.23 "Employee Welfare Benefit Plan" has the meaning set forth in
ERISA (Section) 3(1).
1.24 "Environmental Laws" means all federal, state and local laws,
statutes, ordinances, rules and regulations, now or hereafter in effect, and in
each case as amended or supplemented from time to time, relating to the
regulation and protection of human health, safety, the environment and natural
resources (including, without limitation, ambient air, surface water,
groundwater, wetlands, land surface or subsurface strata, wildlife, aquatic
species and vegetation), including, without limitation, the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as amended
(U.S.C. (Section) 9601 et seq.) ("CERCLA"); the
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Hazardous Material Transportation Act, as amended (49 U.S.C. (Section) 180 et
seq.); the Federal Insecticide, Fungicide, and Rodenticide Act, as amended (7
U.S.C. (S) 136 et seq.); the Resource Conservation and Recovery Act, as amended
(42 U.S.C. (Section) 6901 et seq.) ("RCRA"); the Toxic Substance Control Act, as
amended (42 U.S.C. (Section) 7401 et seq.); the Clean Air Act, as amended (42
U.S.C. (Section) 740 et seq.); the Federal Water Pollution Control Act, as
amended (33 U.S.C. (Section) 1251 et seq.); the Occupational Safety and Health
Act, as amended (29 U.S.C. (Section) 651 et seq.); and the Safe Drinking Water
Act, as amended (42 U.S.C. (Section) 300f et seq.), and similar state and local
laws, rules and regulations.
1.25 "ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
1.26 "FCC" means the Federal Communications Commission.
1.27 "FCC Approval" shall mean an order adopted by the full FCC and
which has not been reversed, reconsidered, stayed, enjoined, set aside, annulled
or suspended, and the thirty (30) day period for any such action on the FCC's
own motion has expired.
1.28 "Fiduciary" has the meaning set forth in ERISA (Section) 3(21).
1.29 "Financial Statements" shall have the meaning set forth in
Section 6.9 hereof.
1.30 "GAAP" means United States generally accepted accounting
principles as in effect from time to time.
1.31 "Xxxx-Xxxxx-Xxxxxx Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended, and the rules and regulations promulgated
thereunder.
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1.32 "Indemnified Party" shall have the meaning set forth in Section
10.5 hereof.
1.33 "Indemnitor" shall have the meaning set forth in Section 10.5
hereof.
1.34 "Intellectual Property" means all (a) patents, patent
applications, patent disclosures, and improvements thereto, (b) trademarks,
service marks, trade dress, logos, trade names, and corporate names and
registrations and applications for registration thereof, (c) copyrights and
registrations and applications for registration thereof, (d) mask works and
registrations and applications for registration thereof, (e) computer software,
data, and documentation, (f) trade secrets and confidential business information
(including ideas, formulas, compositions, inventions (whether patentable or
unpatentable and whether or not reduced to practice), know-how, manufacturing
and production processes and techniques, research and development information,
drawings, specifications, designs, plans, proposals, technical data,
copyrightable works, financial, marketing, and business data, pricing and cost
information, business and marketing plans, and customer and supplier lists and
information), (g) other proprietary rights, and (h) copies and tangible
embodiments thereof (in whatever form or medium).
1.35 "Knowledge" means actual knowledge after reasonable inquiry and
investigation.
1.36 "Liability" means any liability or obligation of any nature
(whether known or unknown, whether absolute or contingent, whether disputed or
undisputed, whether liquidated or unliquidated, and whether due or to become
due), including any liability for Taxes.
1.37 "Losses" shall have the meaning set forth in Section 10.1
hereof.
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1.38 "MCI FCC Licenses" shall have the meaning set forth in Section
2.2 hereof.
1.39 "Newco Common Stock" means the Series A Common Stock of Newco as
more fully described in the Roll-up MOU.
1.40 "Newco Indemnified Parties" shall have the meaning set forth in
Section 10.1 hereof.
1.41 "Newco Preferred Stock" shall have the meaning set forth in
Section 3.1 hereof.
1.42 "110 Slot" shall have the meaning set forth in Section 2.2
hereof.
1.43 "119 Capacity" shall have the meaning set forth in Section 8.5
hereof.
1.44 "Per Share Price" shall have the meaning set forth in Section
3.2 hereof.
1.45 "Person" means a human being or a corporation, partnership,
limited liability company, trust, unincorporated organization, association or
other entity.
1.46 "Primestar DBS Service" means any U.S. Satellite Business
operated by Primestar and its Affiliates or (following the Roll-up) Newco and
its Affiliates.
1.47 "Primestar Disclosure Schedule" shall have the meaning set forth
in Section 6.1 hereof.
1.48 "Primestar FCC Licenses" shall have the meaning set forth in
Section 6.18 hereof.
1.49 "Primestar Material Adverse Effect" means a material adverse
effect on the business, assets, operations, prospects (as such exist for
Primestar as of the date hereof without giving effect to the Roll-up) or
condition (financial or otherwise) of Primestar.
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1.50 "Primestar Plans" shall have the meaning set forth in Section
6.15 hereof.
1.51 "Primestar Subscriber," as of any date, means a subscriber to
the Primestar DBS Service as of such date who (except as otherwise provided in
the first sentence of Section 3.3) (a) is no more than 60 days past due in
payment (measured from the date the relevant xxxx is issued), (b) has received
and paid for in full the Primestar DBS Service for at least one month following
the later of the date of activation and the conclusion of one or two promotional
"free" months, if any, and (c) became a subscriber as a result of ordinary
marketing practices in the normal course of business. Any subscriber who meets
the requirements of (b) and (c) but is more than 60 days but less than 91 days
past due in payment (measured from the date the relevant xxxx is issued) shall
be deemed one-half of a Primestar Subscriber for the purpose of calculating the
Primestar Valuation.
1.52 "Primestar Valuation" means the amount equal to (x) the product
of the aggregate number of Primestar Subscribers as of the Closing Date, not to
exceed 1,950,000, multiplied by $1,500, minus (y) indebtedness of Newco for
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borrowed money at the Closing Date (including any such indebtedness incurred in
connection with the Roll-up, but excluding (i) any indebtedness incurred to
finance the construction and/or launch of any satellite or the lease of any
satellite capacity (including indebtedness in respect of letters of credit
relating to any such construction, launch or lease, capitalized interest and any
refinancing of any such indebtedness), (ii) any indebtedness under, or any
indebtedness incurred to finance any obligation of Newco under, any Contract and
(iii) an amount equal to the product of the aggregate number of Primestar
Subscribers as of the Closing Date in excess of 1,950,000 multiplied by actual
direct costs incurred in connection with the acquisition of each such subscriber
in excess of 1,950,000,
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which shall include materials, labor and acquisition marketing costs but shall
not include overhead, national advertising and incremental programming fees),
plus (z) to the extent not greater than (y) above, cash and cash equivalents of
Newco on hand at the Closing Date.
1.53 "Recent Primestar Subscribers" shall have the meaning set forth
in Section 3.3 hereof.
1.54 "Regulatory Provisions" shall have the meaning set forth in
Section 6.18 hereof.
1.55 "Retained Liabilities" shall have the meaning set forth in
Section 2.4 hereof.
1.56 "Rights" shall have the meaning set forth in Section 3.2 hereof.
1.57 "Roll-up" shall have the meaning set forth in the preamble
hereto.
1.58 "Roll-up MOU" shall have the meaning set forth in the preamble
hereto.
1.59 "Securities Act" means the Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder.
1.60 "Securities Exchange Act" means the Securities Exchange Act of
1934, as amended, and the rules and regulations promulgated thereunder.
1.61 "Security Interest" means any mortgage, pledge, security
interest, encumbrance, charge, or other lien, other than (a) liens arising under
worker's compensation, unemployment insurance, social security, retirement, and
similar legislation, (b) liens on goods in transit incurred pursuant to
documentary letters of credit, and (c) other liens arising in the ordinary
course of business and not incurred in connection with the borrowing of money,
the extension of credit or default or potential default of money owed.
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1.62 "Substitute Consideration" shall have the meaning set forth in
Section 5 hereof.
1.63 "Tax" means any federal, state, local, or foreign income, gross
receipts, license, payroll, employment, excise, severance, stamp, occupation,
premium, windfall profits, environmental (including taxes under Code (Section)
59A), customs duties, capital stock, franchise, profits, withholding, social
security (or similar), unemployment, disability, real property, personal
property, sales, use, transfer, registration, value added, alternative or add-on
minimum, estimated, or other tax of any kind whatsoever, however denominated,
including any interest, penalty, or addition thereto, whether disputed or not.
1.64 "Tax Return" means any return, declaration, report, claim for
refund, or information return or statement relating to any Tax, including any
schedule or attachment thereto, and including any amendment thereof.
1.65 "Total Consideration" shall have the meaning set forth in
Section 3.1 hereof.
1.66 "Transferor Indemnified Parties" shall have the meaning set
forth in Section 10.3 hereof.
1.67 "Transferred Asset Material Adverse Effect" shall have the
meaning set forth in Section 7.6 hereof.
1.68 "Transferred Assets" shall have the meaning set forth in Section
2.3 hereof.
1.69 "U.S. Satellite Business" means any business activity that
principally uses communications satellites to provide direct-to-home (including
hotels, motels, bars, restaurants,
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multiple dwelling units and other similar uses) video and associated audio
programming services using FSS, BSS and/or higher frequencies directly to the
antennas or other reception equipment of customers or subscribers of such
business activity in the United States, or to multiple dwelling units comprising
such customers or subscribers, or that markets, distributes, sells, services
and/or supports any such service.
2. Transfer of Assets and Assumption of Liabilities. Upon the terms and
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subject to the conditions set forth in this Agreement, at the Closing of the
transactions contemplated hereby:
2.1 Transfer of Contracts. ASkyB, and each of News and MCI, on its
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own behalf and on ASkyB's behalf, shall transfer and assign to Newco all of its
rights, title and interests in and to the contracts, commitments, agreements,
arrangements, leases, licenses, purchase orders, memoranda of understanding and
obligations set forth on Schedule A, attached hereto (collectively, the
"Contracts"), including, without limitation, all of News', MCI's and ASkyB's
rights to work in process under such Contracts and any tangible and intangible
deliverables thereunder; provided, however, that, with respect to the Contracts
set forth on Schedule A and marked with an asterisk, to the extent any Affiliate
of a Transferor is listed for any Contract under the heading "Name of Other
Party" (or a similar heading), Newco is acquiring only the rights of such
Transferor thereunder and the rights of the party listed under the heading "Name
of Other Party" with respect to such Contract shall not be transferred to Newco
hereunder.
2.2 Transfer of DBS Authorizations. Subject to Section 8.2 hereof,
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on its own behalf and on ASkyB's behalf, MCI shall transfer and assign to Newco
all of MCI's rights, title
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and interests in, to and under all licenses, permits and other authorizations
granted to MCI by the FCC with respect to U.S. Satellite Business (the "MCI FCC
Licenses"), including, without limitation, the authorization to construct,
launch and operate satellites in the Direct Broadcast Satellite Service ("DBS")
at 110 (Degrees) West Longitude providing 28 transponder channels of service
(the "110 Slot") together with all other rights of MCI and its Affiliates with
respect thereto.
2.3 Transfer of Intellectual Property. To the extent that the
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Contracts, the MCI FCC Licenses or the 110 Slot subsume any Intellectual
Property rights, such rights shall be conveyed, transferred and assigned to
Newco by each Transferor holding any such rights, on its own behalf and on
behalf of ASkyB (the Contracts, the MCI FCC Licenses, the 110 Slot and such
Intellectual Property rights are collectively referred to as the "Transferred
Assets").
2.4 Assumption of Liabilities. In addition to the consideration set
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forth in Section 3 hereof, in consideration for the transfer of the Transferred
Assets contemplated hereby, at the Closing, Newco shall assume the respective
obligations of the Transferors under the Contracts in accordance with their
terms to the extent that the Transferors are not in default under such
obligations at the Closing Date (and would not be in default on the Closing,
assuming the giving of any applicable notices and the lapse of any applicable
waiting periods under such Contracts); provided, however, that to the extent any
Affiliate of a Transferor is listed for any Contract under the heading "Name of
Other Party" (or a similar heading), Newco is assuming only the obligations of
such Transferor thereunder, and the obligations of the party listed under the
heading "Name of Other Party" with respect to such Contract shall not be assumed
by Newco hereunder (the "Assumed Liabilities"). Any Liabilities relating to (i)
the Transferred Assets or the operations of ASkyB or any other Transferor prior
to the Closing other than the Assumed
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Liabilities or (ii) Taxes in respect of the sale of the Transferred Assets
hereunder, except as provided in Section 8.7 hereof, shall be retained by ASkyB,
News or MCI, as the case may be (the "Retained Liabilities").
3. Consideration.
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3.1 Aggregate Consideration. In addition to assumption of the
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Assumed Liabilities, as consideration for the transfer and assignment of the
Transferred Assets, Newco shall pay to ASkyB, for its benefit and the benefit of
each of the other Transferors, as their respective interests shall appear, by
delivery of a combination of Newco Preferred Stock and, at Newco's option, cash
and/or a Convertible Note as set forth below, an amount equal to the ASkyB
Valuation (the "Total Consideration"). Such payment shall be made as follows:
At the Closing, Newco shall issue to ASkyB that number of shares (the
"Consideration Shares") of Convertible Preferred Stock, par value $.01 per
share, of Newco (the "Newco Preferred Stock") which, upon conversion, will give
ASkyB no more than 20% of the issued and outstanding capital stock of Newco,
immediately after giving effect to such conversion if converted on the Closing
Date; provided, that in no event shall the aggregate stated liquidation value of
the Consideration Shares exceed the Total Consideration; and provided, further,
that, if ASkyB is permitted to receive a larger proportion of the Total
Consideration in shares of Newco Preferred Stock (without delaying the receipt
of any FCC Approval required hereunder), Newco shall have the option of
delivering such larger number of shares as part of the Consideration Shares.
The number of shares of Newco Common Stock issuable upon conversion (the
"Conversion Shares") of the Consideration Shares shall be determined in
accordance with Section 3.2 hereof. If the aggregate stated liquidation value
of the Consideration Shares is less than the Total
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Consideration, the remainder of the Total Consideration in excess of the
aggregate stated liquidation value of the Consideration Shares (the "Payment
Balance") shall be paid, at Newco's option, by the payment to ASkyB, at the
Closing, by wire transfer of immediately available funds, of cash or the
issuance of a subordinated convertible note (the "Convertible Note") to ASkyB,
containing the terms set forth in Exhibit II, having an original principal
amount equal to the Payment Balance, or by a combination of the payment of cash
and the issuance of a Convertible Note. The relative powers, preferences and
rights, and qualifications, limitations and restrictions of the Newco Preferred
Stock shall be set forth on a Certificate of Designation (the "Certificate of
Designation"), which shall be substantially in the form attached hereto as
Exhibit III. In addition, if the Closing has not occurred by September 30,
1997, at the Closing, Newco shall reimburse ASkyB in cash for (a) any amounts
expended by News, MCI and ASkyB under and in connection with the Contracts
between September 30, 1997 and the Closing Date, subject to the limitation set
forth in the proviso to the "ASkyB Valuation" definition set forth in Section
1.4 hereof (which for this purpose shall be construed as if all references to
the earlier of September 30, 1997 and the Closing Date referred instead to the
Closing Date), plus (b) interest, at the rate of six percent (6%) per annum, on
the amount set forth in (a) from the respective dates such amounts were expended
by the applicable Transferor to the business day immediately preceding the
Closing Date. ASkyB shall accept MCI's proportionate share of the Consideration
Shares and the Total Consideration on MCI's behalf, as its agent.
3.2 Calculation of Number of Conversion Shares. At the Closing Date,
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the aggregate number of Conversion Shares issuable upon the conversion of the
Consideration Shares and the Convertible Notes, without giving effect to any
adjustment provisions in the
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Certificate of Designation or Convertible Note but giving effect to the Roll-up
on a pro forma basis, shall be determined by dividing (a) the ASkyB Valuation
minus the portion of the Total Consideration paid in cash, if any, by (b) the
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Conversion Price (as defined below). For purposes of this section, "Conversion
Price" shall equal 120% of the Per Share Price (as defined below); and "Per
Share Price" shall equal the quotient of (x) the Primestar Valuation plus all
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proceeds payable to Newco upon the exercise, conversion or exchange of
outstanding Rights, divided by (y) the number of shares of Series A, Series B
and Series C common stock of Newco issuable upon consummation of the Roll-up,
determined without giving effect to the Conversion Shares issuable upon
conversion of the Consideration Shares and Convertible Note, plus the number of
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shares of Series A, Series B and Series C common stock of Newco issuable upon
exercise of all outstanding options, warrants and other rights to acquire such
common stock, and upon the conversion or exchange of all outstanding securities
convertible into or exchangeable for such common stock, in each case to the
extent then exercisable and "in-the-money" (collectively, "Rights"). The
Certificate of Designation and the Convertible Note shall each contain
appropriate provisions regarding the conversion rate per share of Newco
Preferred Stock and for the conversion price under the Convertible Note, as the
case may be.
3.3 Post-Closing Adjustment. At the Closing, the Primestar Valuation
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used to determine the number of Consideration Shares issuable to ASkyB shall be
based on all Primestar Subscribers at the Closing Date, including, without
limitation, those Primestar Subscribers who become subscribers 90 days or less
prior to the Closing Date, or, in the case of those subscribers receiving one
(or two) initial "free" month(s) for promotional purposes, 120 days or less (or
150 Days or less, as applicable) prior to the Closing Date (such subscribers
being referred to herein as
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the "Recent Primestar Subscribers"); provided that, for Recent Primestar
Subscribers, the requirements of clauses (a), (b) and (c) of the definition of
Primestar Subscriber shall not be taken into account. On the 151st day
following the Closing Date, the number of Primestar Subscribers as of the
Closing Date shall be adjusted to take into account which Recent Primestar
Subscribers shall be given full credit, one-half credit or no credit (based on
the definition of Primestar Subscriber, including clauses (a), (b) and (c), and
based on whether or not, and when, the Recent Primestar Subscribers have made
payment for their subscriptions, and the Primestar Valuation shall be recomputed
accordingly (the "Adjusted Primestar Valuation")), in accordance with Section
1.52 above. Following such recomputation, to the extent that the Adjusted
Primestar Valuation is less than the original Primestar Valuation then, on such
151st day following the Closing Date, the conversion price on the Newco
Preferred Stock, and the conversion price under the Convertible Notes (if any)
shall be appropriately adjusted, so that (i) the aggregate number of Conversion
Shares issuable under the Newco Preferred Stock and the Convertible Notes is
equal to the number required pursuant to Section 3.2, determined using the
Adjusted Primestar Valuation for the Primestar Valuation, and (ii) the aggregate
number of Conversion Shares issuable under the Newco Preferred Stock does not
exceed 20% of the issued and outstanding capital stock of Newco.
4. Closing.
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4.1 General. Upon the terms and conditions set forth herein, the
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closing of the transactions contemplated hereby (the "Closing") shall take place
at the offices of Squadron, Ellenoff, Plesent & Xxxxxxxxx, LLP, 000 Xxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, at 10:00 a.m. local time on the day (the
"Closing Date") which is the later of (a) the closing of the
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Roll-up or (b) five days following the date on which the conditions set forth in
Sections 9.1 and 9.2 hereof have been satisfied or waived, or on such other date
and/or at such other place as Primestar and the Transferors mutually determine,
subject to ASkyB's rights set forth in Section 5 hereof.
4.2 Delivery of Shares. At the Closing, Newco shall deliver to ASkyB
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duly executed and authenticated stock certificates representing the
Consideration Shares. The certificates representing the Consideration Shares
and the Convertible Notes shall bear the following legend:
THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR
ANY STATE OR OTHER SECURITIES LAWS. NEITHER THIS SECURITY NOR
ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED
OF IN THE ABSENCE OF REGISTRATION UNDER THE SECURITIES ACT OR
UNLESS THE TRANSACTION IS EXEMPT FROM OR NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.
5. Consummation of Roll-up. Subject to the provisions of Section 8.12
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and the third sentence of Section 8.6, Primestar and each general and limited
partner of Primestar, severally and not jointly, hereby undertakes to use its
commercially reasonable efforts to cause the Roll-up to be consummated as soon
as reasonably practicable, including the undertaking, severally and not jointly,
to use its commercially reasonable efforts to cause the conditions to such
consummation contained in the Roll-up MOU to be satisfied. In the event that
(a) the closing of
18
the Roll-up has not occurred within 270 days following the date hereof and (b)
the conditions set forth in Sections 9.1 and 9.2 have otherwise been satisfied,
the Transferors shall have the right to cause the Transferred Assets to be
transferred to Primestar and the transactions otherwise contemplated hereby to
close. In such event, the Transferors and Primestar shall mutually agree to
substitute consideration (the "Substitute Consideration") for the Newco
Preferred Stock and the Convertible Note which shall, in the aggregate, give the
Transferors the same market value they would have received had the Transferred
Assets been transferred to Newco, and which Substitute Consideration shall
contain appropriate terms and conditions for adjustment or further substitution
in the event that a roll-up or similar restructuring subsequently occurs and all
references to "Newco" herein shall be deemed to be references to "Primestar"
unless the context shall otherwise require. If Primestar is the transferee of
the Transferred Assets, it shall receive the benefits of and shall be
responsible for all obligations of Newco as set forth herein.
6. Representations and Warranties of Primestar. The representations and
-------------------------------------------
warranties made in this Section 6 are only made by Primestar. To the extent
references are made to general or limited partners of Primestar in this Section
6, Primestar is the sole party making such representations.
6.1 Representations and Warranties True, Correct and Complete.
---------------------------------------------------------
Primestar represents and warrants to each of News, MCI and ASkyB that the
statements contained in this Section 6 are true, correct and complete as of the
date of this Agreement, except as disclosed in a document referring specifically
to the representations and warranties in this Section 6 which has been delivered
by Primestar to each of News, MCI and ASkyB on or prior to the date hereof (the
"Primestar Disclosure Schedule"). Nothing in the Primestar Disclosure Schedule
shall be
19
deemed adequate to disclose an exception to a representation or warranty made
herein unless the Primestar Disclosure Schedule identifies the exception with
reasonable particularity and describes the relevant facts in reasonable detail.
Without limiting the generality of the foregoing, the mere listing (or inclusion
of a copy) of a document or other item in one section as an exception to a
representation or warranty shall not be deemed adequate to disclose an exception
to a representation or warranty made in another section unless so specifically
stated in such second section. The Primestar Disclosure Schedule will be
arranged in paragraphs corresponding to the lettered and numbered paragraphs
contained in this Section.
6.2 Organization of Primestar. Primestar is a limited partnership
-------------------------
duly formed, validly existing, and in good standing under the laws of the State
of Delaware.
6.3 Power and Authority of Primestar. Primestar has all requisite
--------------------------------
partnership power and authority and all governmental licenses, authorizations,
consents and approvals required to conduct its business as currently conducted
and to own, lease and operate its properties in all material respects as now
conducted, and to execute and deliver this Agreement, including any additional
documents contemplated by this Agreement, and to perform its obligations
hereunder.
6.4 Organizational Documents. Primestar has delivered to the
------------------------
Transferors true and complete copies of its certificate of limited partnership
and its partnership agreement as currently in effect.
6.5 Partnership Authorization. The execution, delivery and
-------------------------
performance by each of Primestar, the general partners and limited partners of
Primestar of this Agreement and the consummation by Primestar of the
transactions contemplated hereby have been duly
20
authorized by all necessary partnership action of each of Primestar, and, to the
extent they are parties hereto, the general partners and limited partners of
Primestar. This Agreement, including any additional documents contemplated by
this Agreement to be executed by Primestar, constitutes (or when executed, will
constitute) the valid and legally binding obligation of each of Primestar, the
general partners and limited partners of Primestar, enforceable against each of
Primestar, the general partners and limited partners of Primestar in accordance
with each such document's respective terms and conditions, except to the extent
that such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization or other laws affecting the enforcement of creditors' rights
generally or by general equitable principles.
6.6 Governmental Authorization. The execution, delivery and
--------------------------
performance by each of Primestar, the general partners and limited partners of
Primestar of this Agreement and the consummation by each of Primestar, the
general partners and limited partners of Primestar of the transactions
contemplated hereby do not require any consent, approval, authorization or
permit of, or filing with or notification to any governmental or regulatory
authority, except for (a) compliance with any applicable requirements of the
Xxxx-Xxxxx-Xxxxxx Act , (b) approval by the FCC of the transactions contemplated
hereby, (c) compliance with the Primestar Consent Decree, which compliance is
described in Section 6.6 of the Primestar Disclosure Schedule, and (d) where
failure to obtain such consents, approvals, authorizations and permits, or to
make such filings or notifications, would not prevent or delay in any material
respect the consummation of the transactions contemplated hereby or otherwise
prevent Primestar from performing its obligations under this Agreement in all
material respects, and would not, individually or in the aggregate, have a
Primestar Material Adverse Effect.
21
6.7 Noncontravention. Except as set forth in Section 6.7 of the
----------------
Primestar Disclosure Schedule, the execution, delivery and performance of this
Agreement by Primestar and the general partners and limited partners of
Primestar do not, and the consummation by Primestar of the transactions
contemplated hereby will not, (a) contravene or conflict with the certificate of
limited partnership or the partnership agreement or other organizational
documents of Primestar and the general partners and limited partners of
Primestar; (b) assuming compliance with the matters referred to in Section 6.6
above, contravene, conflict with or constitute a violation of any provision of
any statute, regulation, rule, judgment, order, decree, stipulation, injunction,
charge, or other restriction of any government, governmental agency, or court
binding upon or applicable to Primestar and the general partners and limited
partners of Primestar, or any of their properties or assets, which
contravention, conflict or violation could reasonably be expected to have a
Primestar Material Adverse Effect; or (c) conflict with, result in a breach of,
constitute a default under, result in the acceleration of, create in any party
the right to accelerate, terminate, modify, or cancel, require any notice or
give rise to a loss of any benefit under, any contract, lease, sublease,
license, sublicense, franchise, permit, indenture, agreement or mortgage for
borrowed money, instrument of indebtedness, or Security Interest to which
Primestar and the general partners and limited partners of Primestar is a party
or by which it is bound or to which any of its assets is subject or result in
the creation or imposition of any Security Interests on any assets of Primestar,
which contravention, violation, conflict, breach, default, acceleration,
termination, modification, cancellation, or loss of benefit would have a
Primestar Material Adverse Effect.
22
6.8 Capitalization of Newco. Set forth on Exhibit A to the Roll-up
-----------------------
MOU is the methodology by which the equity capitalization of Newco will be
determined for purposes of the Roll-up.
6.9 Financial Statements. The financial statements included in
--------------------
Section 6.9 of the Primestar Disclosure Schedule (collectively, the "Financial
Statements") constitute: (a) audited financial statements of Primestar for the
fiscal years ended December 31, 1994, December 31, 1995, and December 31, 1996,
and (b) the unaudited financial statements of Primestar for the quarter ended
March 31, 1997. The Financial Statements and all other financial statements
prepared by Primestar after the date of this Agreement but prior to the Closing
Date have been, and will be, prepared in accordance with GAAP applied on a
consistent basis throughout the periods covered thereby, and will fairly
present, in all material respects, the consolidated financial position and
results of operations of Primestar at the dates thereof and for the periods then
ended; provided, however, that the interim Financial Statements are subject to
normal year-end adjustments (which Primestar believes will not be material) and
that the interim Financial Statements in general may lack all or a portion of
the necessary footnotes and other presentation items. Since January 1, 1994,
there has been no change in Primestar's accounting policies, except as described
in the notes to the Financial Statements.
6.10 Absence of Certain Changes. Since March 31, 1997 Primestar has
--------------------------
conducted its business only in the ordinary course of business consistent with
applicable past practice and there has not been any event, occurrence or
development of a state of circumstances or facts which has had or reasonably
could be expected to have a Primestar Material Adverse Effect.
23
6.11 Undisclosed Liabilities. Except as set forth in Section 6.11 of
-----------------------
the Primestar Disclosure Schedule, Primestar has no Liability except for (a)
Liabilities set forth in the Financial Statements for the year ended December
31, 1996 or not required by GAAP to be set forth thereon, and (b) Liabilities
which have arisen after December 31, 1996 in the ordinary course of business
(none of which relates to any breach of contract, breach of warranty, tort,
infringement or violation of law, or arose out of any charge, complaint, action,
suit, proceeding, hearing, investigation, claim or demand, that individually or
in the aggregate have had or could reasonably be expected to have a Primestar
Material Adverse Effect).
6.12 Tax Matters.
-----------
(a) Primestar has timely filed all material Tax Returns
required to be filed by it with the appropriate tax authorities, including,
without limitation, all federal, foreign, state and local Tax Returns for all
years and periods (and portions thereof) for which any such Tax Returns were due
(taking into account any extensions). All such Tax Returns were correct and
complete in all material respects. All Taxes owed by Primestar shown to be due
on any Tax Return have been paid and discharged. There are no Security Interests
on any of the assets of Primestar that arose in connection with any failure (or
alleged failure) to pay any Tax when due.
(b) Primestar has withheld and paid all Taxes required to have
been withheld and paid in connection with amounts paid or owing to any employee,
creditor, independent contractor or other third party and complied in all
material respects with all information reporting and backup withholding
requirements.
(c) Primestar is not a party to any tax allocation or tax
sharing agreement.
24
(d) The unpaid Taxes of Primestar (i) do not exceed the reserve
for Tax Liability (rather than any reserve for deferred Taxes established to
reflect timing differences between book and Tax income) contained in the
Financial Statements for the fiscal year ended December 31, 1996 (other than the
notes thereto) and (ii) do not exceed that reserve as adjusted for the passage
of time through the Closing Date in accordance with the past custom and practice
of Primestar in filing its Tax Returns.
6.13 Intellectual Property. Primestar owns or has the right to use
---------------------
pursuant to license, sublicense, agreement, or permission all Intellectual
Property currently used in connection with, or otherwise necessary for, the
operation of the businesses of Primestar as presently conducted and as presently
proposed to be conducted by Newco, except where the failure to so own or to have
the right to use would not have a Primestar Material Adverse Effect. Except as
set forth in Section 6.13 of the Primestar Disclosure Schedule, to the Knowledge
of Primestar, Primestar has not infringed upon or misappropriated any
Intellectual Property rights of third parties, and neither Primestar nor its
general partner or partners has received any written charge, complaint, claim,
or notice alleging any such infringement or misappropriation which remains
unresolved. To the Knowledge of Primestar no third party has infringed upon or
misappropriated any Intellectual Property rights of Primestar.
6.14 Primestar Contracts. Section 6.14 of the Primestar Disclosure
-------------------
Schedule lists the following contracts, agreements and other written
arrangements to which Primestar is a party (unless the disclosure of the
existence of such contract, agreement or written arrangement is prohibited by
the terms thereof without prior consent) (collectively, the "Primestar
Contracts"):
(a) any written agreement between Primestar and any of its
Affiliates;
25
(b) any written agreement under which the consequences of a
default or termination are reasonably likely to have a Primestar Material
Adverse Effect; and
(c) any other written agreement (or group of related written
arrangements) currently in effect or under which Primestar is currently
obligated and involving more than $5,000,000 or not entered into in the ordinary
course of business.
Primestar has made available to the Transferors a correct and complete
copy (or a fair summary on an aggregate basis) of each Primestar Contract. With
respect to each Primestar Contract: (i) the agreement is a legal, valid,
binding, enforceable, obligation of Primestar, and, to Primestar's Knowledge,
the other parties thereto, and in full force and effect subject to (a)
bankruptcy, insolvency, reorganization, fraudulent conveyance or transfer,
moratorium or similar laws affecting creditors' rights generally, and (b)
general principles of equity (regardless of whether such enforceability is
considered in a proceeding at law or in equity); (ii) the agreement will
continue to be legal, valid, binding and enforceable and in full force and
effect on substantially identical terms following the Closing subject to (a)
bankruptcy, insolvency, reorganization, fraudulent conveyance or transfer,
moratorium or similar laws affecting creditors' rights generally, (b) general
principles of equity (regardless of whether such enforceability is considered in
a proceeding at law or in equity) and (c) any termination provisions relating to
such Primestar Contract other than termination provisions triggered by the
consummation of the transactions contemplated hereby; (iii) Primestar is not
and, to the Knowledge of Primestar, no other party is, in breach or default, and
no event has occurred which with notice or lapse of time would constitute a
breach or default or permit termination, modification or acceleration under, the
agreement, and which could reasonably be expected to result in a Primestar
Material Adverse
26
Effect; and (iv) Primestar has not received any currently effective notice in
writing to the effect that any party has canceled, terminated or repudiated any
provision of the agreement. Primestar has no Knowledge that the validity of any
Primestar Contract is being contested by any third person.
6.15 Litigation. To the Knowledge of Primestar, Section 6.15 of the
----------
Primestar Disclosure Schedule sets forth each instance in which Primestar is the
subject of an investigation of any federal, state, local, or foreign
jurisdiction or any agency thereof. None of the investigations set forth in
Section 6.15 of the Primestar Disclosure Schedule could reasonably be expected
to result in a Primestar Material Adverse Effect. Except as set forth in Section
6.15 of the Primestar Disclosure Schedule, there are no claims, legal actions,
counterclaims, suits, arbitrations or other legal, administrative or tax
proceedings, nor any order, decree or judgment, in progress or pending, or, to
the Knowledge of Primestar, threatened against Primestar or the business or
operations of Primestar, which seek to enjoin or prohibit any action taken or to
be taken by Primestar or as contemplated to be taken by Newco pursuant to or in
connection with this Agreement or which would be reasonably expected to have a
Primestar Material Adverse Effect. Except as set forth in Section 6.15 of the
Primestar Disclosure Schedule, Primestar is not subject to any judgment, writ,
order, injunction, award or decree by any court, arbitrator or governmental
authority, including any administrative agency.
6.16 Employee Benefits. All Employee Benefit Plans that Primestar
-----------------
maintains or to which it contributes for the benefit of any current or former
employee of Primestar ("Primestar Plans") comply in form and operation in all
material respects with the applicable requirements of ERISA and the Code and
neither Primestar nor the Primestar Plans are liable for
27
any material penalties or excise taxes with respect to such plans. The market
value of assets under each Primestar Plan which is an Employee Pension Plan
equals or exceeds the present value of liabilities thereunder (determined on a
plan termination basis). To the Knowledge of Primestar, no Fiduciary has any
Liability for breach of a fiduciary duty or for any act or any failure to act or
comply in connection with the administration or investment of the assets of any
Primestar Plan. No charge, complaint, action, suit, proceeding, hearing, and,
to the Knowledge of Primestar, no investigation, claim, or demand with respect
to the administration or the investment of the assets of any Primestar Plan
(other than routine claims for benefits) is pending.
6.17 Legal Compliance. Except as set forth in Section 6.17 of the
----------------
Primestar Disclosure Schedule, Primestar has complied in all material respects
with all laws (including, without limitation, Environmental Laws) , including
any rules and regulations thereunder, of federal, state, local and foreign
governments (and all agencies thereof) except for failures which could not,
individually or in the aggregate, have a Primestar Material Adverse Effect or a
material adverse effect on the consummation of the transactions contemplated by
this Agreement, and no charge, complaint, action, suit, proceeding, hearing,
investigation, claim, demand, or notice has been filed or commenced against
Primestar alleging any failure to comply with any such law or regulation, which
could reasonably be expected to result in a Primestar Material Adverse Effect.
6.18 FCC Matters
-----------
(a) Section 6.18 of the Primestar Disclosure Schedule sets
forth (i) a listing and brief description of all authorizations (including,
without limitation, each permit, license, and special temporary authority
("STA")) from the FCC granted to or held by Primestar
28
and the authorization from the FCC held by third parties covering the satellites
and the programming uplink earth station facilities used or currently planned to
be used by Primestar in connection with the U.S. Satellite Business operated by
Primestar (the "Primestar FCC Licenses"), including the principal terms and
conditions thereof and the expiration date and the deadline for any required
application or other request for renewal or extension thereof; (ii) a
description of all applications and petitions filed by or on behalf of Primestar
with the FCC or the International Telecommunications Union ("ITU") since January
1, 1993, and of the current status thereof; (iii) a description of any failure
by the FCC to renew any material permit or license granted to or held by
Primestar or used in connection with the U.S. Satellite Business operated by
Primestar; (iv) all material correspondence to Primestar from the FCC pertaining
to the access by Primestar to C-, Ka- or Ku-band satellite capacity or
facilities currently used or intended to be used in the operation of Primestar's
business, whether or not such capacity or facilities are used pursuant to any
permit, license or other authorization issued by the FCC; and (v) all satellite-
related proceedings before the FCC (other than those affecting the DBS industry
generally) in which Primestar is or has been a party since January 1, 1993. The
Primestar FCC Licenses constitute the material licenses, permits and
authorizations from the FCC that are required to be held by Primestar or any of
its general or limited partners or others for the business and operations of
Primestar as currently conducted. The rights under such Primestar FCC Licenses
currently held or enjoyed by Primestar shall be made available to Newco in
connection with the U.S. Satellite Business to be conducted by Newco following
the Roll-up, subject to obtaining Regulatory Approvals and Primestar's
obligation to complete the Dispositions. The Primestar FCC Licenses are in full
force and effect through the dates set forth in Section 6.18 of the
29
Primestar Disclosure Schedule and are unimpaired by any materially adverse
condition. Except as set forth in Section 6.18 of the Primestar Disclosure
Schedule, no application, action or proceeding is pending for the renewal or
modification of any of the Primestar FCC Licenses, and no application,
complaint, action or proceeding is pending or, to the Knowledge of Primestar,
threatened, that may result in the revocation, modification, non-renewal or
suspension of any of the Primestar FCC Licenses or the imposition of any
administrative or judicial sanction with respect to Primestar. Primestar has no
Knowledge of any failure (whether or not known by or disclosed to the FCC or any
other Person or entity) by Primestar or any of its general or limited partners
to comply in all material respects with all applicable requirements of the
Communications Act, and the published policies, rules, and regulations of the
FCC (collectively, the "Regulatory Provisions") applicable to the U.S. Satellite
Business of Primestar, and with the terms and conditions of all applicable
Primestar FCC Licenses, including, but not limited to, any due diligence
obligations or reporting requirements associated with any Primestar FCC License.
(b) Except as set forth in Section 6.18(b) of the Primestar
Disclosure Schedule, each satellite currently used or currently planned to be
used by Primestar has been fully tested and determined to operate within all
design specifications, and at all times since such launch has operated, and is
operating, within such specifications and, except as set forth in Section
6.18(b) of the Primestar Disclosure Schedule, Primestar has not experienced any
material operating problems with such satellite which have had, or could have, a
material adverse effect on the service or life of such satellite. Except as set
forth in Section 6.18(b) of the Primestar Disclosure Schedule, each satellite
used by Primestar is operating in conformance with all applicable ITU Radio
Regulations (including but not limited to Appendices 30 and 30A thereof)
30
or, if not operating in conformance with such regulations, Primestar or the
satellite licensee has taken or is in the process of taking all steps necessary
to request modification of appropriate ITU regulations to conform to satellite
operations, which steps are described in Section 6.18(b) of the Primestar
Disclosure Schedule. To the extent modifications to ITU rules and regulations
have been requested by or on behalf of Primestar, Primestar has no Knowledge
that any such request is not likely to be granted in its current form.
(c) Section 6.18 of the Primestar Disclosure Schedule sets forth a
listing of all insurance policies in force associated with any satellite, earth
station, microwave or other ancillary facility related to a Primestar FCC
License. Each such insurance policy is in full force and effect, and the rights
of the parties thereunder will not be affected in any material respect by the
transactions contemplated by this Agreement.
(d) Section 6.18 of the Primestar Disclosure Schedule sets forth a
description of all non-FCC applications filed by Primestar with the United
States government since January 1, 1993, relating to applications for technical
data exchange licenses and satellite export licenses, and of the current status
thereof. Primestar has no Knowledge that any such application is not likely to
be granted in its current form. Primestar possesses adequate authorizations,
which are in full force and effect, issued by other appropriate governmental
agencies or bodies necessary for Primestar to possess in order to conduct the
U.S. Satellite Business now operated by it.
(e) Except as set forth on Section 6.18 of the Primestar Disclosure
Schedule, no consent, approval, authorization, order or waiver of, or filing
with, the FCC is required under the Regulatory Provisions to be obtained or made
by Primestar in connection with
31
the transactions contemplated by this Agreement, except such as may already have
been obtained and made under the Regulatory Provisions and, except with respect
to the transfer of the 110 Slot and the MCI FCC Licenses (as defined below).
Except as set forth on Section 6.18 of the Primestar Disclosure Schedule, the
consummation of the transactions contemplated by this Agreement and the
agreements referred to herein in accordance with the provisions hereof and
thereof do not and will not result in (i) the termination or revocation of any
Primestar FCC License; (ii) any other material impairment of the rights of the
holder of any Primestar FCC License; or (iii) the violation of any of the
Regulatory Provisions.
6.19 Brokers' Fees. Primestar has no Liability or obligation to pay
-------------
any fees or commissions to any broker, finder or agent with respect to the
transactions contemplated by this Agreement, other than Xxxxxx Xxxxxxx & Co.
Incorporated.
6.20 Disclosure. The representations and warranties contained in
----------
this Section 6 do not contain any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements and
information contained in this Section 6, in light of the circumstances in which
made, not misleading.
7. Representations and Warranties of News, MCI and ASkyB. Each of News
-----------------------------------------------------
and ASkyB, jointly and severally (with respect to representations and warranties
relating to News and ASkyB), and MCI, severally and not jointly (with respect to
representations and warranties relating to MCI), represents as follows:
7.1 Representations and Warranties True, Correct and Complete. Each
---------------------------------------------------------
of News, MCI and ASkyB represents and warrants to Primestar that the statements
contained in this Section 7 are true, correct and complete as of the date of
this Agreement, except as disclosed in a
32
document referring specifically to the representations and warranties in this
Section 7 which has been delivered by ASkyB to Primestar on or prior to the date
hereof (the "ASkyB Disclosure Schedule"). Nothing in the ASkyB Disclosure
Schedule shall be deemed adequate to disclose an exception to a representation
or warranty made herein unless the ASkyB Disclosure Schedule identifies the
exception with reasonable particularity and describes the relevant facts in
reasonable detail. Without limiting the generality of the foregoing, the mere
listing (or inclusion of a copy) of a document or other item in one section as
an exception to a representation or warranty shall not be deemed to disclose an
exception to a representation or warranty made in another section unless so
specifically stated in such second section. The ASkyB Disclosure Schedule will
be arranged in paragraphs corresponding to the lettered and numbered paragraphs
contained in this Section.
7.2 Organization of News, MCI and ASkyB. News is a corporation duly
-----------------------------------
organized under the laws of the State of South Australia, Australia. MCI is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware. ASkyB is a limited liability company duly organized,
validly existing and in good standing under the laws of the State of Delaware.
7.3 Power and Authority of News, MCI and ASkyB. Each of the
------------------------------------------
Transferors has all requisite power and authority (including all requisite
corporate power and authority) and all governmental licenses, authorizations,
consents and approvals required to conduct its business as currently conducted,
to own, lease and operate its properties as now conducted, and to execute and
deliver this Agreement, including any additional documents contemplated by this
Agreement, and to perform its obligations hereunder.
33
7.4 Organizational Documents. ASkyB has delivered to Primestar true
------------------------
and complete copies of the certificate of incorporation and bylaws, or
equivalent organizational documents, of ASkyB as currently in effect. ASkyB is
not in violation of any provision of its certificate of incorporation, by-laws
or equivalent organizational documents.
7.5 Corporate Authorization. The execution, delivery and performance
-----------------------
by each of News, MCI and ASkyB of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by all necessary
action of each of News, MCI and ASkyB. This Agreement, including any additional
documents contemplated by this Agreement, constitutes (or, when executed, will
constitute) the valid and legally binding obligation of each of News, MCI and
ASkyB, enforceable against each of News, MCI and ASkyB in accordance with each
document's respective terms and conditions, except to the extent that such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization or other laws affecting the enforcement of creditors' rights
generally or by general equitable principles.
7.6 Governmental Authorization. The execution, delivery and
--------------------------
performance by each of News, MCI and ASkyB of this Agreement and the
consummation of the transactions contemplated hereby do not require any consent,
approval, authorization or permit of, or filing with or notification to any
governmental or regulatory authority, except for (a) compliance with any
applicable requirements of the Xxxx-Xxxxx-Xxxxxx Act, (b) approval by the FCC of
the transactions contemplated hereby and (c) where failure to obtain such
consents, approvals, authorizations and permits, or to make such filings or
notifications, would not prevent or delay in any material respect the
consummation of the transactions contemplated hereby or otherwise
34
prevent News, MCI or ASkyB from performing their respective obligations under
this Agreement in all material respects, and would not, individually or in the
aggregate, have a material adverse effect on the use by or benefit to Newco of
any of the Transferred Assets (a "Transferred Asset Material Adverse Effect").
7.7 Noncontravention. The execution, delivery and performance of
----------------
this Agreement by the Transferors do not, and the consummation of the
transactions contemplated hereby will not, (a) contravene or conflict with the
certificate of incorporation, by-laws or other organizational or charter
documents of News, MCI or ASkyB, (b) assuming compliance with the matters
referred to in Section 7.6 above, contravene, conflict with or constitute a
violation of any provision of any statute, regulation, rule, judgment, order,
decree, stipulation, injunction, charge, or other restriction of any government,
governmental agency, or court binding upon or applicable to News, MCI or ASkyB,
or any of their respective properties or assets; or (c) subject to receipt of
the consents set forth on Section 7.7 of the ASkyB Disclosure Schedule, conflict
with, result in a breach of, constitute a default under, result in the
acceleration of, create in any party the right to accelerate, terminate, modify,
or cancel, require any notice or give rise to a loss of any benefit under, any
of the Transferred Assets or any contract, lease, sublease, license, sublicense,
franchise, permit, indenture, agreement or mortgage for borrowed money,
instrument of indebtedness, Security Interest or other arrangement to which
News, MCI or ASkyB is a party or by which any of them is bound or to which any
of their respective assets is subject or result in the creation or imposition of
any Security Interest on any assets of News, MCI or ASkyB (including any of the
Transferred Assets).
35
7.8 Contracts. ASkyB has delivered to Primestar correct and complete
---------
copies of each of the Contracts. The amounts designated on Schedule A as "Paid
to Date" are the amounts expended under the Contracts up to April 30, 1997 (and
such amounts have been paid by the Transferors), respectively, and the amounts
designated in Schedule A as "Remaining Commitments" are the remaining
commitments under the Contracts, respectively, on a cumulative basis from April
30, 1997, through the Closing Date, and, on the Closing Date, the remaining
commitments under each Contract shall not exceed the remainder of (a) the amount
shown on Schedule A as the Remaining Commitment with respect to such Contract,
minus (b) the aggregate amount expended in respect of such Contract on a
cumulative basis from April 30, 1997 through the Closing Date. The aggregate
amount to be expended in respect of all of the Contracts as a whole between
September 30, 1997 and the Closing Date shall not exceed the aggregate amount
indicated on Section 7.8-A of the ASkyB Disclosure Schedule as the scheduled
amounts remaining to be paid under such Contracts for such period based upon the
assumptions set forth therein. Each of News, MCI and ASkyB has complied with
and performed in all material respects all of its obligations required to be
performed under each of the Contracts to which it is a party. Except as set
forth in Section 7.8 of the ASkyB Disclosure Schedule, each Contract is in full
force and effect and constitutes the legal, valid, binding and enforceable
obligation of the applicable Transferor, and, to such Transferor's Knowledge,
each of the other parties thereto, enforceable against such parties in
accordance with the terms thereof and, subject to receipt of the consents set
forth in Section 7.7 of the ASkyB Disclosure Schedule, will be enforceable by
Newco after the Closing, subject to (x) bankruptcy, insolvency, reorganization,
fraudulent conveyance or transfer, moratorium or similar laws affecting
creditors' rights
36
generally, and (y) general principles of equity (regardless of whether such
enforceability is considered in a proceeding at law or in equity). Subject to
receipt of the consents set forth in Section 7.7 of the ASkyB Disclosure
Schedule, the execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby have not resulted and will not result in a
breach or default under, or permit any party to modify any obligation under, or
cause or permit any termination, cancellation or loss of benefits under, any of
the Contracts. None of News, MCI or ASkyB is in breach or default in any
material respect under any Contract to which it is a party and no event has
occurred which, with or without the giving of notice, lapse of time or both,
would constitute a breach or default under any Contract in any material respect
or permit termination, modification or acceleration under any Contract. None of
News, MCI or ASkyB has received written notice canceling, terminating or
repudiating or exercising any option under any of the Contracts to which it is a
party and none of News, MCI or ASkyB has any Knowledge that any party has failed
to comply with or perform all of its obligations required to be performed under
any of the Contracts or that an event has occurred which, with or without the
giving of notice, lapse of time or both, would constitute a breach or default by
such party thereunder. None of News, MCI or ASkyB has any Knowledge that the
validity of any of the Contracts to which it is a party is being contested by a
third party.
7.9 Intellectual Property. Each of News, MCI and ASkyB owns or has
---------------------
the right to use pursuant to license, sublicense, agreement, or permission all
Intellectual Property currently used in connection with the operation of the
Transferred Assets, as currently proposed to be operated by Newco following the
Closing, all of which is identified in Section 7.9 of the ASkyB Disclosure
Schedule and included in the Transferred Assets.
37
7.10 Litigation. To the Knowledge of News, MCI and ASkyB, Section
----------
7.10 of the ASkyB Disclosure Schedule sets forth each instance in which any of
News, MCI or ASkyB is the subject of an investigation of any federal, state,
local or foreign jurisdiction or any agency thereof, which could reasonably be
expected to affect the Transferred Assets. None of the investigations set forth
in Section 7.10 of the ASkyB Disclosure Schedule could reasonably be expected to
have a Transferred Asset Material Adverse Effect. Except as set forth in
Section 7.10 of the ASkyB Disclosure Schedule, there are no claims, legal
actions, counterclaims, suits, arbitration or other legal, administrative or tax
proceedings, nor any order, decree or judgment, in progress or pending, or to
the Knowledge of any of News, MCI or ASkyB, threatened, against any of News, MCI
or ASkyB, the Transferred Assets or the business or operations of ASkyB, which
seeks to enjoin or prohibit any action taken or to be taken by News, MCI or
ASkyB pursuant to or in connection with this Agreement or which could be
reasonably expected to have a Transferred Asset Material Adverse Effect. Except
as set forth in Section 7.10 of the ASkyB Disclosure Schedule, none of News, MCI
or ASkyB or any of the Transferred Assets is subject to any judgment, writ,
order, injunction, award or decree by any court, arbitrator or governmental
authority, including any administrative agency.
7.11 Legal Compliance. Each of News, MCI and ASkyB has complied in
----------------
all material respects, and the Transferred Assets, including the operations
thereof, are in compliance in all material respects with all laws (including,
without limitation, Environmental Laws), including any rules and regulations
thereunder, of federal, state, local and foreign governments (and all agencies
thereof) except for failures which could not, individually or in the aggregate,
with or without notice or lapse of time, have a Transferred Asset Material
Adverse Effect or a
38
material adverse effect on the consummation of the transactions contemplated by
this Agreement, and no charge, complaint, action, suit, proceeding, hearing,
investigation, claim, demand, or notice has been filed or commenced against any
of News, MCI or ASkyB alleging any failure to comply with any such law or
regulation.
7.12 FCC Matters. MCI hereby represents and warrants that:
-----------
(a) MCI has delivered to Primestar true and complete copies of
all of the MCI FCC Licenses. The MCI FCC Licenses are in full force and effect
and are unimpaired by any materially adverse condition. To MCI's Knowledge, no
Transferor other than MCI holds any FCC Licenses with respect to the U.S.
Satellite Business contemplated to be operated by MCI, News and ASkyB. MCI has
delivered to Primestar true and complete copies of all material correspondence
from the FCC or the Executive Branch of the federal government to MCI relating
to the MCI FCC Licenses, received by MCI subsequent to the auction of the 110
Slot. Except as set forth in Section 7.12(a) of the ASkyB Disclosure Schedule,
no application, action or proceeding is pending for the renewal or modification
of any of such MCI FCC Licenses, and no application, complaint, action or
proceeding is pending or, to the Knowledge of MCI, threatened, that may result
in the revocation, modification, non-renewal or suspension of any of such
licenses or the imposition of any administrative or judicial sanction with
respect to MCI. MCI has no Knowledge of any failure of MCI to comply (whether or
not known by or disclosed to the FCC or any other Person or entity) in all
material respects with all applicable Regulatory Provisions, and with the terms
and conditions of all applicable MCI FCC Licenses, including but not limited to,
any due diligence obligations or reporting requirements associated with any MCI
39
FCC License. Neither ASkyB nor News holds any FCC License in connection with
the U.S. Satellite Business.
(b) Section 7.12(b) of the ASkyB Disclosure Schedule sets forth
a listing of all insurance policies in force associated with any satellite or
other facility related to the U.S. Satellite Business contemplated to be
operated by News, MCI and ASkyB. Each such insurance policy is in full force and
effect, and the rights of the parties thereunder will not be affected in any
material respect by the transactions contemplated by this Agreement.
(c) MCI has delivered to Primestar true and complete copies of
all non-FCC applications filed by MCI with the United States government since
January 1, 1993 relating to the U.S. Satellite Business, including, without
limitation, all applications for technical data exchange licenses and satellite
export licenses, and of the current status thereof. Neither MCI nor any of its
directors or officers has any Knowledge that any such application is not likely
to be granted in its current form.
(d) Except as contemplated by Section 8.2 hereof, no consent,
approval, authorization, order or waiver of, or filing with, the FCC is required
under the Regulatory Provisions to be obtained or made by MCI in connection with
the transactions contemplated by this Agreement, except such as may already have
been obtained and made under the Regulatory Provisions. The consummation of the
transactions contemplated by this Agreement and by the agreements referred to
herein in accordance with the provisions hereof and thereof do not and will not
result in (i) the termination or revocation of any FCC authorization currently
held by MCI for use in connection with the U.S. Satellite Business; (ii) any
other
40
material impairment of the rights of the holder of any such authorization; or
(iii) the violation of any of the Regulatory Provisions.
(e) MCI has made aggregate payments to the United States in the
amount of $682,500,000 with respect to the 110 Slot, which is the entire auction
price payable to the United States or any department or instrumentality thereof
with respect to the 110 Slot.
7.13 Transferred Assets. No Person other than the Transferors and
------------------
their respective Affiliates has any right, title or interest in, or with respect
to, the 110 Slot and the rights being transferred by MCI hereunder with regard
to the 110 Slot constitute all of the rights, including contractual rights, held
by the Transferors and their respective Affiliates with regard to the 110 Slot.
Any rights of News or ASkyB or any of their Affiliates relating to the 110 Slot
are either included in the Transferred Assets or will be terminated prior to the
Closing. The Contracts include all of the contracts, agreements,
understandings, rights and arrangements of any of the Transferors with respect
to the satellites referred to in the Contract described in part A.1. of Schedule
A (i.e., the Loral Satellites).
7.14 Brokers' Fees. None of News, MCI or ASkyB has any Liability or
-------------
obligation to pay any fees or commissions to any broker, finder or agent with
respect to the transactions contemplated by this Agreement.
7.15 Disclosure. The representations and warranties contained in
----------
this Section 7 do not contain any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements and
information contained in this Section 7, in light of the circumstances in which
made, not misleading.
41
8. Further Agreements of the Parties.
---------------------------------
8.1 Bundling. Newco and MCI hereby agree that, following the
--------
Closing, MCI shall have the non-exclusive right to bundle the Primestar DBS
Service with MCI's telephony service offerings, on mutually agreeable terms.
8.2 Assignment of 110 Slot. Upon execution of this Agreement, MCI
----------------------
and Primestar shall expeditiously seek FCC Approval of the assignment of the 110
Slot to Newco or its designee. Each of the Transferors, Primestar and Newco
shall take all steps necessary, including the implementation of an Acceptable
Alternative Arrangement, to obtain such FCC Approval; provided, however, that
nothing contained in this Agreement shall create any obligation on the part of
Newco or Primestar to accept (as a condition to receipt of such FCC Approval or
otherwise): (i) any restriction on the right of Newco or Primestar to operate
the 110 Slot, including, without limitation, the right to use all 28 transponder
frequencies authorized thereunder to provide high-powered DBS services, other
than any such restrictions generally imposed on operators of high-powered DBS
services by applicable Regulatory Provisions and restrictions of the types
generally and customarily imposed by the FCC on operators of high-powered DBS
services and such other restrictions which, individually or in the aggregate,
are not material; (ii) any change in the management or ownership (other than by
the Transferors) of Newco or Primestar, or in any voting or other rights of, or
arrangements among, its equity holders from that set forth in the Roll-up MOU,
other than such changes which, individually or in the aggregate, do not
materially affect the management or ownership rights of any equity holder or
partner of Newco or Primestar or any Affiliate thereof (other than the
Transferors); or (iii) a requirement that Newco or Primestar dispose of the
medium-powered DBS business
42
currently operated by Primestar or any restriction on the right of Newco or
Primestar to operate the medium-powered DBS business currently operated by
Primestar, other than such restrictions generally imposed on operators of
medium-powered DBS services by applicable Regulatory Provisions and restrictions
of the types generally and customarily imposed by the FCC on operators of
medium-powered DBS services and such other restrictions which, individually or
in the aggregate, are not material. Anything contained herein to the contrary
notwithstanding, to the maximum extent allowable under the Communications Act
and Regulatory Provisions, even if the parties implement an Acceptable
Alternative Arrangement in lieu of transferring the 110 Slot to Newco or its
designee, Newco shall have the continuing right and option, exercisable in its
sole discretion and at no further cost to Newco, to require the Transferors to
immediately assign (or cause the owner thereof to assign) the 110 Slot to Newco
or any designee of Newco, upon receipt of FCC Approval with respect to such
assignment, in which case the Acceptable Alternative Arrangement shall be
canceled concurrently with the effectiveness of such assignment.
8.3 Non-Competition. For the period beginning on the Closing Date
---------------
and ending on the tenth anniversary of the Closing Date, none of News, ASkyB or
any of their respective Affiliates shall (i) engage directly or indirectly in
any U.S. Satellite Business, (ii) directly and actively participate or assist in
the conduct of any U.S. Satellite Business by any other Person or group of
Persons (other than Newco) by means of any management, advisory, operating or
similar agreement or arrangement or joint venture, or (iii) have any direct, or,
through an Affiliate, any indirect ownership interest or other investment in any
Person or group of Persons (other than Newco) engaged in any U.S. Satellite
Business, as a securityholder,
43
partner, joint venturer or otherwise; provided, however, that the foregoing
shall not prohibit News or ASkyB or their respective Affiliates from (x)
acquiring or holding for investment purposes less than 5% of any class or series
of equity or debt securities of any entity, which class or series is registered
under Section 12 of the Securities Exchange Act and listed for trading on the
New York Stock Exchange, the American Stock Exchange or The Nasdaq Stock Market,
even if such entity is engaged in the U.S. Satellite Business, (y) owning a non-
Controlling interest in ECC for a period of five years following the Closing
Date, or (z) engaging in a U.S. Satellite Business which is directed to a non-
English speaking audience and containing programming, 90% of which is conducted
90% of the time via a language other than English; and provided, further, that
the foregoing shall in no way restrict (xx) News or any of its Affiliates from
providing programming of any kind to any U.S. Satellite Business or (yy) the
operations of the business of News Digital Systems plc and its subsidiaries as
conducted on the date hereof.
News hereby represents and warrants that the business of News Digital
Systems plc and its subsidiaries as conducted on the date hereof is as follows:
News Digital Systems plc ("News Digital Systems"), together with its three
principal operating subsidiaries, NDS Limited ("NDS Ltd"), News Datacom Limited
("News Datacom") and DigiMedia Vision Limited ("DMV" and, together with News
Digital Systems, NDS Ltd and News Datacom, the "News Digital Systems Group")
provides end-to-end digital broadcasting system design and integration services,
conditional access systems, digital compression systems and subscription
management systems. Each of NDS Ltd, News Datacom and DMV has operating control
over specific product lines and service activities. NDS Ltd provides systems
integration and support services for broadcasters. News Datacom designs,
manufactures and supports analog and digital
44
conditional access systems and encryption technologies for use primarily in pay
television services which use "smart cards" as the replaceable security device
(a smart card is a plastic card carrying an embedded computer chip that
implements the secure management and delivery of decryption keys necessary to
descramble pay television channels and thereby enable and disable viewing
according to whether the subscriber is authorized to receive a particular
service). DMV designs, manufactures and supports digital video compression,
transmission and receiving products for broadcasters which engage in digital
distribution and transmission of video, audio and data services via cable,
satellite and terrestrial means.
Each of News and ASkyB acknowledges that a breach of the provisions of
this Section 8.3 would cause irreparable harm to Newco and that money damages
would not provide an adequate remedy to Newco. Each of News and ASkyB agrees
that Newco shall have the right to have the provisions of this Section 8.3
specifically enforced in a court of competent jurisdiction. Each of News and
ASkyB acknowledges and agrees that the provisions of this Section 8.3 are
reasonable and valid in geographical and temporal scope and in all other
respects. It is the intention of the parties that if any of the restrictions
contained herein are held to cover a geographic area or to be for a length of
time which is not permitted by applicable law, such provision shall not be
construed to be null and void, but rather shall be interpreted or reformed to
provide for the maximum enforceable geographic area or time period (not greater
than those set forth herein) as shall be enforceable under such applicable law,
and the remainder of the provisions hereof shall not thereby be affected and
shall be given full force and effect.
8.4 110 Slot Litigation. Each of Primestar and its general and
-------------------
limited partners and Newco agrees to discontinue, and, in the case of Newco, to
cause its shareholders, to
45
discontinue, with prejudice, as of the Closing Date, any actions brought by any
of them, to the extent that any such action directly relates to the 110 Slot.
In connection with the application to the FCC to transfer of the 110 Slot,
Primestar will advise the FCC in writing that the concerns raised in its
application for review and petition to deny would be rendered moot by the FCC's
approval of the assignment of the license for the 110 Slot to Primestar.
8.5 Conduct of Business. During the period between the execution
-------------------
hereof and the Closing Date, except to the extent necessary to effect the Roll-
up, or any other transaction contemplated hereby: (a) Primestar shall conduct
its business in a regular manner and use commercially reasonable efforts, in the
ordinary course of business, (i) to preserve its business and the goodwill and
business of the customers, advertisers, suppliers and others having business
relations with Primestar, (ii) to keep available the services and goodwill of
its present employees, and (iii) to perform and observe all the terms, covenants
and conditions required to be performed and observed by it under its contracts
in each case except to the extent that a failure to do so would not result in a
Primestar Material Adverse Effect; provided, however, that Primestar shall cause
the disposition of all rights of Primestar and any of its general or limited
partners under the FCC authorizations issued to Tempo Satellite, Inc. with
respect to 11 DBS transponder channels at the 119 (Degrees) West Longitude
orbital slot (the "Tempo FCC License"), including the rights of Primestar to use
the capacity thereof (the "119 Capacity"); (b) each of the Transferors shall
conduct its business with respect to the Transferred Assets in a regular manner
and use commercially reasonable efforts, in the ordinary course of business, (i)
to preserve the goodwill of its suppliers and others having business relations
with such Transferor with respect to any Transferred Assets, and (ii) to perform
and observe all the terms, covenants and conditions
46
required to be performed and observed by it under its Contracts and all FCC and
other governmental permits, licenses and authorizations with respect to the
Transferred Assets, in each case except to the extent that a failure to do so
would not result in a Transferred Asset Material Adverse Effect; and (c)
Primestar shall cause the disposition (the "Dispositions") of all rights of
Primestar and any of its general or limited partners under the FCC
authorizations issued to Tempo Satellite, Inc. with respect to 11 DBS
transponder channels at the 119 (Degrees) West Longitude orbital slot (the
"Tempo FCC License"), including the rights of Primestar to use the capacity
thereof (the "119 Capacity") on or prior to the date which is 18 months
following the Closing Date or such earlier date on or after the Closing Date as
is required by the FCC. As soon as practicable following the date of this
Agreement, the parties shall endeavor to determine whether and when the
Dispositions shall be required as a condition to obtaining any Regulatory
Approval. In the event that any Regulatory Approval is conditioned upon the
consummation of the Dispositions concurrently with the assignment of the MCI FCC
Licenses hereunder, then Primestar will use commercially reasonable efforts to
ensure that the Dispositions shall occur not later than four months after the
date on which the conditions set forth in Section 9.1 are satisfied (it being
agreed that if consummation of the Dispositions is the only condition precedent
to satisfaction of Section 9.1(f), then Section 9.1(f) will be deemed to have
been satisfied for purposes of determining such date). Notwithstanding any other
provision of this Agreement (including Sections 8.2 and 8.6), so long as
Primestar complies with its obligation to consummate the Dispositions as set
forth above, the manner in which Primestar effects such Dispositions, including
the terms of any such transfer and the identity of any transferee shall be
determined in the sole discretion of Primestar. If it comes to ASkyB's attention
that any events
47
or circumstances regarding the Transferred Assets require the taking of any
action to preserve the value and utility of the Transferred Assets, ASkyB will
(i) promptly notify Primestar of such events or circumstances and of any
potential responses to such events and circumstances of which ASkyB is aware and
(ii) take such actions as shall be mutually agreed by Primestar and ASkyB as
being reasonably required to preserve such value and utility; provided, that if
Primestar and ASkyB shall not so agree but Primestar shall nonetheless request
that ASkyB take a specified action in respect of the foregoing, then, subject to
applicable requirements of law, ASkyB shall take such action, all at the sole
risk and expense of Primestar (but without limitation or qualification of any
representations and warranties of the Transferors herein, except that if the
taking of an action pursuant to the foregoing proviso would violate a
representation or warranty herein, such violation shall be deemed waived).
8.6 Consents; Xxxx-Xxxxx-Xxxxxx. Each of News, MCI, ASkyB and
---------------------------
Primestar shall use its respective commercially reasonable efforts to obtain at
the earliest practicable date the respective consents set forth in Section 6.14
of the Primestar Disclosure Schedule and Section 7.7 of the ASkyB Disclosure
Schedule, and each of News, MCI, ASkyB and Primestar, with the cooperation of
one another, shall use commercially reasonable efforts to obtain all approvals
from regulatory authorities (collectively, "Regulatory Approvals"), including,
without limitation, the FCC, the Department of Justice ("DOJ") and the Federal
Trade Commission (the "FTC"), necessary to consummate the transactions
contemplated hereby. In the event that all or any of the Regulatory Approvals
are not received, each of News, MCI, ASkyB and Primestar shall cooperate in good
faith and take all commercially reasonable steps to restructure the transactions
contemplated hereby in such a way so that Regulatory Approvals are received;
48
provided, that the economic costs and risks of any such restructuring shall be
borne 100% by the Transferors. Nothing contained in this Agreement shall create
any obligation on the part of Newco or Primestar to accept (as a condition to
receipt of Regulatory Approvals or otherwise): (i) any restriction on the right
of Newco or Primestar to operate the 110 Slot, including, without limitation,
the right to use all 28 transponder frequencies authorized thereunder to provide
high-powered DBS services, other than any such restrictions generally imposed on
operators of high-powered DBS services by applicable Regulatory Provisions and
restrictions of the types generally and customarily imposed by the FCC on
operators of high-powered DBS services and such other restrictions which,
individually or in the aggregate, are not material; (ii) any change in the
management or ownership (other than by the Transferors) of Newco or Primestar,
or in any voting or other rights of, or arrangements among, its equity holders
from that set forth in the Roll-up MOU, other than such changes which,
individually or in the aggregate, do not materially affect the management or
ownership rights of any equity holder or partner of Newco or Primestar or any
Affiliate thereof (other than the Transferors); or (iii) a requirement that
Newco or Primestar dispose of the medium-powered DBS business currently operated
by Primestar or any restriction on the right of Newco or Primestar to operate
the medium-powered DBS business currently operated by Primestar, other than such
restrictions generally imposed on operators of medium-powered DBS services by
applicable Regulatory Provisions and restrictions of the types generally and
customarily imposed by the FCC on operators of medium-powered DBS services and
such other restrictions which, individually or in the aggregate, are not
material. Notwithstanding the foregoing, this Agreement shall not constitute an
agreement by the Transferors to assign any Contract if the assignment or
attempted assignment thereof would
49
constitute a breach or default thereof or would in any way adversely affect the
rights of the Transferors thereunder or the rights of Newco to enjoy the
benefits thereof, unless and until such consent is obtained. If any such
consent shall not have been obtained by the Closing Date, the Transferors shall
cooperate with Newco in any reasonable arrangement designed to provide Newco
with the benefits under such Contract to the same extent as if Newco were the
contracting party. Newco shall assume the burdens of any such Contract to the
extent that any such benefits thereunder are so provided to Newco.
8.7 Transfer Taxes. Any sales or other transfer taxes resulting from
--------------
the transfer of the Transferred Assets shall be borne equally by ASkyB, on the
one hand, and Newco, on the other hand.
8.8 Assumption Agreement. Upon the formation of Newco, Primestar
--------------------
will cause Newco to enter into an assumption agreement among the parties hereto
and Newco (the "Newco Assumption Agreement") whereby Newco shall assume the
rights and obligations of Primestar under this Agreement. Primestar shall cause
the execution of such assumption agreement concurrently with the consummation of
the Roll-up. Such assumption agreement shall contain representations and
warranties of Newco substantially similar to the representations and warranties
made by Primestar in Section 6 hereof, including, without limitation,
representations with regard to capitalization (which shall be consistent with
the capitalization of Newco and Primestar as contemplated upon consummation of
the Roll-up as set forth in the Roll-up MOU), financial statements and
liabilities.
8.9 Further Assurances. Each of News, MCI, ASkyB and Primestar shall
------------------
cooperate and use commercially reasonable efforts to cause all conditions to the
Closing
50
hereunder to be satisfied as promptly as practicable. From and after the
Closing, the Transferors, on the one hand, and Newco, on the other hand, agree
to execute and deliver such further documents and instruments and to do such
other acts and things as Newco or the Transferors, as the case may be, may
reasonably request in order to effectuate the transactions contemplated by this
Agreement. In the event any such party shall be involved in litigation,
threatened litigation or government inquiries with respect to a matter involving
any of the Transferors, or Newco or their respective shareholders or members,
relating to the transactions contemplated by this Agreement, the other such
parties shall also make available to such first party, at reasonable times and
subject to the reasonable requirements of its or his own business, such
information relevant to such matters as is in its or his possession; provided
such first party shall reimburse the providing party for its or his reasonable
costs for employee time incurred in connection therewith if more than one
business day is required; and provided, further, that such information is not
privileged or otherwise legally protected from disclosure.
8.10 Access to Records and Properties. From the date of this
--------------------------------
Agreement through the Closing, each of the Transferors, on the one hand, and
Primestar, on the other hand, shall afford to the other party and its
representatives free and full access at all reasonable times to the properties,
personnel, books and records of such first party (such access not to
unreasonably interfere with the business of such party) in order that the other
party may have full opportunity to make such investigations as it may reasonably
desire to make of all matters relating to the transactions contemplated
hereunder. Notwithstanding the foregoing, Primestar shall not be obligated to
disclose any information that is competitively or strategically sensitive, and
if Primestar shall determine to withhold any information on such grounds, a
reasonable summary
51
of the portions thereof that are not competitively or strategically sensitive
shall be provided to the party requesting such information pursuant to this
Section 8.10. Any information provided pursuant to this Section 8.10 shall be
kept confidential by the Transferors and Primestar, as applicable, and shall not
be revealed to any person or entity other than the respective officers,
directors, employees, agents and representatives of such parties (it being
agreed that the Transferors on the one hand, and Primestar on the other hand,
shall be liable for any breach of this Section 8.10 by any of their respective
officers, directors, employees, agents and representatives), except to the
extent such information (i) is or becomes generally available to the public
(other than as a result of a breach of this Section 8.10 by the recipient of
such information) or (ii) is required to be disclosed under any applicable law
or under subpoena or other legal process. No such investigation shall diminish
in any respect any of the representations or warranties of the parties
hereunder.
8.11 Contribution of 110 Slot License. At the Closing, but prior to
--------------------------------
the issuance of Newco Preferred Stock to ASkyB hereunder, Newco shall transfer
its rights to all licenses relating to the 110 Slot to a subsidiary of Newco
upon obtaining FCC Approval for such transfer.
8.12 Cooperation of Parties. Each general and limited partner of
----------------------
Primestar, severally and not jointly, hereby agrees to cooperate with Primestar
and Newco in connection with Primestar's efforts to make filings and obtain
consents pursuant to this Agreement. Notwithstanding anything to the contrary
contained in this Agreement, no general or limited partner of Primestar shall be
obligated to agree to any restriction, limitation, condition or other obligation
or requirement relating to the business or assets of such partner or any
Affiliate of such partner (other than the business or assets of Primestar, to
the extent expressly provided for
52
herein), or relating to the ownership or management of such partner or Affiliate
or the rights of any equity holders of such partner or Affiliate or any
arrangement between them, nor shall any Regulatory Approval hereunder be
conditioned upon any such agreement.
8.13 MCI Licenses. MCI shall take all actions necessary to keep the
------------
MCI FCC Licenses in full force and effect until the Closing Date.
8.14 Carriage Agreement. During the period from the date hereof
------------------
until the Closing Date, Primestar and News shall negotiate in good faith to
endeavor to reach agreement on terms of a carriage agreement between Newco and
FX Networks, LLC, Fox News Network, LLC, Fox Sports Direct, LLC and the Family
Channel, a division of International Family Entertainment, Inc. relating to
carriage of such networks on the Primestar DBS Service, which agreement shall
include the terms set forth in the term sheet attached as Exhibit IV hereto.
9. Conditions to Closing.
---------------------
9.1 Conditions Precedent to Obligations of Newco. The obligations of
--------------------------------------------
Newco to consummate the transactions contemplated hereby are subject to the
fulfillment, prior to or at the Closing, of each of the following conditions
(any or all of which may be waived by Newco):
(a) all representations and warranties of the Transferors made
herein shall, in each case, if specifically qualified by materiality, be true
and correct and, if not so qualified, be true and correct in all material
respects, in each case, at and as of the date of this Agreement and on the
Closing Date, with the same effect as though those representations and
warranties had been made at and as of the Closing Date;
53
(b) the Transferors shall not have breached or failed to perform
any material obligations and covenants required by this Agreement to be
performed or complied with by any such party prior to or at the Closing;
(c) Newco shall have been furnished with a certificate from each
Transferor, dated the Closing Date and in form and substance reasonably
satisfactory to Newco, executed by an executive officer of each Transferor,
certifying to the fulfillment of the conditions specified in Sections 9.1(a) and
9.1(b) hereof;
(d) there shall be no statute, law, judgment, decree, injunction,
rule or order of any federal, state, local or foreign government, governmental
authority, governmental department, commission, administrative or regulatory
agency, instrumentality, court or arbitrator ("Governmental Entities")
outstanding that prohibits, restricts or delays consummation of the transactions
contemplated by this Agreement and there shall not be pending any suit, action
or proceeding by any Governmental Entity in which the relief sought would (i)
have any such effect or (ii) have any of the effects described in the third
sentence of Section 8.6.
(e) all authorizations, consents, orders or approvals of, or
declarations or filings with, or expiration of waiting periods imposed by, any
court, administrative agency or commission or other governmental authority or
instrumentality, whether domestic or foreign, necessary for the consummation of
the transactions contemplated hereby shall have been filed, occurred or been
obtained;
(f) either (i) FCC Approval with respect to the grant of the
license for the 110 Slot to MCI and assignment of such license to Newco or its
designee shall have been obtained or (ii) an Acceptable Alternative Arrangement
shall have been implemented;
54
(g) the Transferors shall have obtained all necessary third party
consents for the assignment of the Contracts or, in the absence of any required
consent, Newco shall have been provided with the benefits of each such Contract
to the same extent as if Newco were the contracting party;
(h) Newco shall have received a copy of resolutions adopted by
the Board of Directors of each Transferor authorizing the execution, delivery
and performance of this Agreement by each such Transferor, and a certificate of
the Secretary or an Assistant Secretary of each Transferor, dated the Closing
Date, stating that such resolutions were duly adopted and are in full force and
effect, without amendment or modification, at such date and setting forth the
incumbency of each person executing this Agreement or any other document
delivered pursuant to this Agreement on behalf of each Transferor;
(i) Newco shall have received from counsel to ASkyB and News and
counsel to MCI opinions (including of FCC counsel), dated the Closing Date, in
form and substance reasonably satisfactory to Newco;
(j) each Transferor shall have executed and delivered to Newco an
Assignment of Contracts in form and substance reasonably satisfactory to Newco;
and
(k) subject to Section 5 hereof, all conditions with regard to
the consummation of the Roll-up shall have been satisfied or waived by the
beneficiary of such conditions.
9.2 Conditions Precedent to Obligations of Transferors. The
--------------------------------------------------
obligations of the Transferors to consummate the transactions contemplated by
this Agreement are subject to the
55
fulfillment, prior to or at the Closing, of each of the following conditions
(any or all of which may be waived by the Transferors):
(a) all representations and warranties of Primestar to the
Transferors and all representations and warranties of Newco contained in the
Newco Assumption Agreement shall, in each case, if specifically qualified by
materiality, be true and correct and, if not so qualified, be true and correct
in all material respects, in each case, at and as of the date of this Agreement
and on the Closing Date with the same effect as though those representations and
warranties had been made at and as of the Closing Date;
(b) none of Primestar, its general or limited partners or Newco
shall have breached or failed to perform any material obligations or covenants
required by this Agreement to be performed or complied with by such party, prior
to or at the Closing;
(c) the Transferors shall have been furnished with certificates,
dated the Closing Date and in form and substance reasonably satisfactory to the
Transferors, executed by a duly authorized officer or representative of
Primestar or an executive officer of Newco, certifying to the fulfillment of the
conditions specified in Sections 9.2(a) and 9.2(b) hereof;
(d) there shall be no statute, law, judgment, decree,
injunction, rule or order of any Governmental Entity which prohibits, restricts
or delays consummation of the transactions contemplated by this Agreement;
(e) all authorizations, consents, orders or approvals of, or
declarations or filings with, or expiration or waiting periods imposed by, any
court, administrative agency or commission or other governmental authority or
instrumentality, whether domestic or foreign,
56
necessary for the consummation of the transactions contemplated hereby shall
have been filed, occurred or been obtained;
(f) the Transferors shall have received a copy of resolutions
adopted by (i) the Partners Committee of Primestar authorizing the execution,
delivery and performance of this Agreement and the Newco Assumption Agreement by
Primestar, and (ii) the Board of Directors of Newco authorizing the execution,
delivery and performance of the Newco Assumption Agreement by Newco, and
certificates of the Secretary or an Assistant Secretary of each of Primestar and
Newco, and dated the Closing Date, stating that such resolutions were duly
adopted and are in full force and effect at such date, and setting forth the
incumbency of each person executing this Agreement and the Newco Assumption
Agreement, or any other documents delivered pursuant to this Agreement on behalf
of Primestar or Newco, as the case may be;
(g) the Newco Assumption Agreement shall have been executed and
delivered to the Transferors;
(h) the Transferors shall have received from counsel to
Primestar and Newco opinions, dated the Closing Date, in form reasonably
satisfactory to the Transferors;
(i) Newco shall have entered into a Registration Rights
Agreement with ASkyB, on the terms set forth in Exhibit V;
(j) Newco shall have executed and delivered to the Transferors
an instrument whereby it assumes the Assumed Liabilities in form and substance
reasonably acceptable to the Transferors; and
57
(k) subject to Section 5 hereof, all conditions with regard to
the consummation of the Roll-up shall have been satisfied or waived.
10. Indemnification.
---------------
10.1 Indemnification by News, ASkyB and MCI. News and ASkyB, jointly
--------------------------------------
and severally, and MCI, severally and not jointly, shall indemnify Newco,
Primestar and their respective partners, shareholders, officers, directors,
employees, agents and affiliates (the "Newco Indemnified Parties") and hold each
of them harmless at all times from and after the Closing Date against and in
respect of any and all judgments, costs, damages, losses, liabilities, taxes and
deficiencies and penalties and interest thereon, including reasonable attorneys'
fees (collectively, "Losses") incurred by the Newco Indemnified Parties as a
result of (a) any breach of a representation, warranty, covenant or agreement of
the Transferors made hereunder and (b) the Retained Liabilities; provided, that
"Losses" shall not include any amounts which are indemnifiable under the
Indemnification Agreement dated the date of this Agreement between News and the
entities defined herein as the Primestar Parties (the "ECC Indemnification
Agreement").
10.2 Indemnification by Primestar and Newco. Newco (or, if the Roll-
--------------------------------------
up is not consummated, but Primestar acquires the Transferred Assets in
accordance with Section 5 hereof, Primestar) shall indemnify News, MCI and ASkyB
and their respective shareholders, officers, directors, employees, agents and
affiliates (the "Transferor Indemnified Parties") and hold each of them harmless
at all times from and after the Closing Date against and in respect of any
Losses incurred by the Transferor Indemnified Parties as a result of (a) any
breach of a
58
representation, warranty, covenant or agreement of Primestar or Newco made
hereunder, or (b) nonfulfillment by Newco of its obligations with respect to the
Assumed Liabilities.
10.3 Survival Periods. All representations and warranties of the
----------------
parties contained in this Agreement shall survive for a period of one year
following the Closing Date.
10.4 Notice to the Indemnitor. Promptly after the occurrence of any
------------------------
event which may give rise to a claim for indemnification under this Section 10,
the party entitled to indemnification (the "Indemnified Party") shall notify the
indemnifying party (the "Indemnitor") in writing of such claim (the "Claims
Notice"). The Claims Notice shall describe the asserted liability in reasonable
detail, and shall indicate the amount (estimated, if necessary and to the extent
feasible) of the Loss that has been or may be suffered by the Indemnified Party.
Failure by the Indemnified Party to give a Claims Notice to the Indemnitor in
accordance with the provisions of this Section 10.4 shall not relieve the
Indemnitor of its obligations hereunder except to the extent that the Indemnitor
has been actually prejudiced by such failure.
10.5 Rights of Parties to Settle or Defend. The Indemnitor may elect
-------------------------------------
to compromise or defend, at its own expense, by its own counsel and to the
extent an election with respect to such compromise or defense is available to
the Indemnified Party, any asserted liability. If the Indemnitor elects to
compromise or defend such asserted liability, it shall within 30 calendar days
(or sooner, if the nature of the asserted liability so requires) notify the
Indemnified Party of its intent to do so, and the Indemnified Party shall
cooperate, at the expense of the Indemnitor, in the compromise of, or defense
against, such asserted liability. If the Indemnitor elects to defend any claim,
the Indemnified Party shall make available to the Indemnitor any books, records
or other documents within its control that are necessary or
59
appropriate for such defense. If the Indemnitor elects not to compromise or
defend the asserted liability, fails to notify the Indemnified Party of its
election as herein provided or contests its obligation to indemnify under this
Agreement (or if counsel to the Indemnified Party advises such party that there
may be a potential conflict of interest between the Indemnitor and the
Indemnified Party, or between the Indemnified Party and any other indemnified
party, or that different or additional defenses from those available to the
Indemnified Party may be available to any other indemnified party), the
Indemnified Party may pay, compromise or defend (at the expense of the
Indemnitor) such asserted liability as the Indemnified Party considers
appropriate. The parties agree to cooperate fully with one another in the
defense, settlement or compromise of any asserted liability. Notwithstanding
the foregoing, neither the Indemnitor nor the Indemnified Party may settle or
compromise any claim over the objection of the other; provided that consent to
settlement or compromise shall not be unreasonably withheld. In any event, the
Indemnified Party and the Indemnitor may participate, at their own expense, in
the defense of such asserted liability.
10.6 Exclusive Remedies. The parties hereto acknowledge that the
------------------
indemnity rights set forth in Article 10 and in the ECC Indemnification
Agreement are intended to be their exclusive monetary remedies in connection
with this Agreement and the transactions contemplated hereby; provided that
nothing in this Section 10.6 shall limit in any way the availability of specific
performance, injunctive relief or other equitable remedies to which a party may
otherwise be entitled.
60
10.7 Limitations. Any indemnity amounts payable by an Indemnitor
-----------
hereunder shall be net of any tax benefit received by the Indemnified Party as a
result of the claim or event giving rise to indemnification.
11. Termination.
-----------
11.1 Termination. This Agreement may be terminated at any time prior
-----------
to the Closing Date:
(a) by mutual written consent of the parties hereto; or
(b) by either Primestar (prior to consummation of the Roll-up)
or Newco (after consummation of the Roll-up) on the one hand or the Transferors
on the other hand: (i) if any judgment, decree, injunction, rule or order of any
court, governmental department, commission, agency, instrumentality or
arbitrator which prohibits or materially restricts consummation of the
transactions contemplated by this Agreement shall have been issued and shall
have become final and nonappealable; or (ii) if the waiting period under the
Xxxx-Xxxxx-Xxxxxx Act shall not have expired or been terminated on or before
June 30, 1998; or
(c) by either Primestar (prior to consummation of the Roll-up)
or Newco (after consummation of the Roll-up), at any time after June 30, 1998,
if any of the conditions set forth in Section 9.1 shall have become incapable of
fulfillment, and shall not have been waived by Primestar or Newco, as
applicable; or
(d) by the Transferors, at any time after June 30, 1998, if any
of the conditions set forth in Section 9.2 shall have become incapable of
fulfillment, and shall not have been waived by the Transferors;
61
provided, however, that the party seeking termination pursuant to clause (b),
(c) or (d) is not in breach in any material respect of any of its
representations, warranties, covenants or agreements contained in this
Agreement.
11.2 Effect of Termination. If this Agreement is terminated as
---------------------
provided in Section 11.1, this Agreement shall become null and void and of no
further force and effect, except for the provisions of the third sentence of
Section 8.10, this Section 11 and Section 12, which shall survive such
termination.
12. Miscellaneous.
-------------
12.1 Entire Agreement. This Agreement (together with the Schedules
----------------
and Exhibits hereto), the ECC Indemnification Agreement and any other document
delivered concurrently herewith contain, and are intended as, a complete
statement of all of the terms of the arrangements between the parties with
respect to the matters provided for, and supersede any previous agreements and
understandings between the parties with respect to those matters.
12.2 Governing Law. This Agreement shall be governed by, and
-------------
construed and enforced in accordance with the laws of the State of New York,
without regard to its principles of conflicts of law.
12.3 Headings. The section headings of this Agreement are for
--------
reference purposes only and are to be given no effect in the construction or
interpretation of this Agreement.
12.4 Notices. All notices and other communications under this
-------
Agreement shall be in writing and shall be deemed given when delivered
personally, mailed by registered mail, return receipt requested, sent by
recognized overnight delivery service or, to the extent
62
receipt is confirmed, by telecopy, telefax, or other electronic transmission
service to the parties at the following addresses (or to such other address as a
party may have specified by notice given to the other party pursuant to this
provision):
If to News or ASkyB, to:
American Sky Broadcasting, LLC and
The News Corporation Limited
c/o News America Publishing Incorporated
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxx
Senior Executive Vice President and
Group General Counsel of
The News Corporation Limited
with a copy to:
Squadron, Ellenoff, Plesent & Xxxxxxxxx, LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxxxxx, Esq.
If to MCI, to:
MCI Telecommunications Corporation
0000 Xxxxxxxxxxxx Xxxxxx, XX
Xxxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Maine
Executive Vice President and
Chief Financial Officer
If to Primestar, to:
PRIMESTAR Partners, L.P.
Xxxx Xxxxx Xxxx
Xxxxx 000
Xxxx Xxxxxx, XX 00000
Attention: General Counsel
63
12.5 Separability. If at any time any of the covenants or the
------------
provisions contained herein shall be deemed invalid or unenforceable by the laws
of the jurisdiction wherein it is to be enforced, by reason of being vague or
unreasonable as to duration, geographic scope, scope of activities restricted or
for any other reason, such covenants or provisions shall be considered divisible
as to such portion and such covenants or provisions shall become and be
immediately amended and reformed to include only such covenants or provisions as
are enforceable by the court or other body having jurisdiction of this
Agreement; and the parties agree that such covenants or provisions, as so
amended and reformed, shall be valid and binding as though the invalid or
unenforceable portion had not been included herein.
12.6 Amendment; Waiver. No provision of this Agreement may be
-----------------
amended or modified except by an instrument or instruments in writing signed by
the parties hereto. Any party may waive compliance by another with any of the
provisions of this Agreement. No waiver of any provision hereof shall be
construed as a waiver of any other provision. Any waiver must be in writing.
12.7 Assignment and Binding Effect. Except as provided in Section
-----------------------------
8.8, none of the parties hereto may assign any of its or his rights or delegate
any of its or his duties under this Agreement without the prior written consent
of the others. All of the terms and provisions of this Agreement shall be
binding on, and shall inure to the benefit of, the respective successors and
permitted assigns of the parties.
12.8 No Benefit to Others. Except as otherwise expressly set forth
--------------------
in Section 10 hereof, the representations, warranties, covenants and agreements
contained in this Agreement are for the sole benefit of the parties hereto and
their respective successors and assigns and they
64
shall not be construed as conferring and are not intended to confer any rights
on any other persons.
12.9 Counterparts. This Agreement may be executed in two or more
------------
counterparts, each of which shall be deemed an original, and each party thereto
may become a party hereto by executing a counterpart hereof. This Agreement and
any counterpart so executed shall be deemed to be one and the same instrument.
12.10 Consent to Jurisdiction and Service of Process. Subject to
-----------------------------------------------
the provisions of the ECC Indemnification Agreement, all judicial proceedings
arising out of or relating to this Agreement may be brought in any state or
federal court of competent jurisdiction in the State of New York and by
execution and delivery of this Agreement, the parties hereto accept the
nonexclusive jurisdiction of the aforesaid courts and waive any defense of forum
non conveniens, and irrevocably agree to be bound by any judgement rendered
thereby in connection with this Agreement. The Transferors designate and
appoint Xxxxxx X. Xxxxxxx, Esq. and such other persons as hereafter may be
selected by them and notified to Primestar irrevocably agreeing in writing to so
serve, as their respective agent to receive on their behalf service of all
process in any such proceedings in any such court, such service being hereby
acknowledged by the parties to be effective and binding service in every
respect. A copy of any such process so served shall be mailed to the
appropriate party by registered mail to the address indicated in Section 12.4
hereof, except that unless otherwise provided by applicable law, any failure to
mail such copy shall not affect the validity of service of process. If any
agent appointed refuses to accept service, the parties hereby agree that service
by mail shall constitute sufficient notice. Nothing herein shall effect the
right to serve process in any other manner permitted by law.
65
IN WITNESS WHEREOF, the undersigned have executed this Asset Acquisition
Agreement as of the date first above written.
THE NEWS CORPORATION LIMITED
By: /s/ Xxxxxx X. Xxxxxxx
------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Director
AMERICAN SKY BROADCASTING, LLC
By: /s/ Xxxxxxxx X. Xxxxxx
------------------------------
Name: Xxxxxxxx X. Xxxxxx
Title:
MCI TELECOMMUNICATIONS
CORPORATION
By: /s/ Xxxxxxx X. Maine
------------------------------
Name: Xxxxxxx X. Maine
Title: Executive Vice President and Chief
Financial Officer
PRIMESTAR PARTNERS, LP
By: /s/ Xxxxx X. Xxxx,
------------------------------
its general partner
By:
------------------------------
Name:
Title:
For purposes of Section 5, Section 8.4
and Section 8.12:
TW PROGRAMMING CO.
By: /s/ Xxxxxx X'Xxxxx
------------------------------
Name: Xxxxxx X'Xxxxx
Title: President
COMCAST DBS, INC.
By: /s/ Xxxxxx X. Xxxxxxx
------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Vice Chairman
TCI SE PARTNER 1, INC.
By: /s/ Xxxx X. Xxxxxx
------------------------------
Name: Xxxx X. Xxxxxx
Title: President and Chief Executive
Officer
TCI SE PARTNER 2, INC.
By: /s/ Xxxx X. Xxxxxx
------------------------------
Name: Xxxx X. Xxxxxx
Title: President and Chief Executive
Officer
COX SATELLITE, INC.
By: /s/ Xxxx X. Xxxxx
------------------------------
Name: Xxxx X. Xxxxx
Title: Vice President
CONTINENTAL SATELLITE COMPANY, INC.
By: /s/ Xxxx Xxxxxx
------------------------------
Name: Xxxx Xxxxxx
Title: Executive Vice President, Finance
and Strategy
For purposes of Section 5, Section 8.4
and Section 8.12:
NEW VISION SATELLITE, BY ADVANCE
COMMUNICATION CORP., A GENERAL PARTNER
By: /s/ Xxxxxx Xxxxx
------------------------------
Name: Xxxxxx Xxxxx
Title: President
G.E. AMERICOM SERVICES, INC.
By: /s/ Xxxx Xxxxxxxx
------------------------------
Name: Xxxx Xxxxxxxx
Title: Chairman and Chief Executive
Officer
OMITTED SCHEDULES OR ATTACHMENTS
The following schedules or similar attachments to this exhibit have been omitted
pursuant to Item 601(b)(2) of Regulation S-K of the Securities and Exchange
Commission ("Commission"). The Registrant agrees to furnish supplementally a
copy of any such schedule or attachment to the Commission upon request.
Exhibits
--------
Exhibit I: Binding Memorandum of Understanding (Roll-Up), filed as
Exhibit 2.1 to the Registrant's Current Report on Form 8-K
filed July 1, 1997)
Exhibit II: Convertible Note Term Sheet
Exhibit III: Certificate of Designation
Exhibit IV: Carriage Agreement Term Sheet
Exhibit V: Registration Rights Agreement Term Sheet
Schedules
---------
Primestar Disclosure Schedule: Exceptions to representations and
warranties of Primestar
ASkyB Disclosure Schedule: Exceptions to representations and warranties
of ASkyB
