EXHIBIT 10.1
The News Corporation Limited
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Effective as of June 10, 1998
Tele-Communications, Inc.
0000 XXX Xxxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
United Video Satellite Group, Inc.
0000 X. Xxxxx Xxxxxx
Xxxxx, Xxxxxxxx 00000-0000
Gentlemen:
Reference is made to the Share Exchange Agreement, effective as of
June 10, 1998, being entered into simultaneously herewith (the "Agreement")
among News America Incorporated ("NAI"), TVG Holdings, Inc. ("Holdings"), and
United Video Satellite Group, Inc. ("UVSG"). Unless otherwise defined herein,
the terms used herein shall have the meanings ascribed to them in the Agreement.
This agreement (which is referred to in the Agreement as the "Parent Agreement")
confirms the understanding of Tele-Communications, Inc. ("TCI"), The News
Corporation Limited ("News Corp.") and UVSG with respect to the following
matters:
1. Stockholders Meeting. At the Stockholders Meeting (or at any other meeting
to be held for the purpose of approving the Transaction), TCI shall vote
or cause to be voted all shares of UVSG Common Stock owned by it or its
subsidiaries (or, if action is taken by written consent, duly consent in
writing by executing a written consent) in favor of the issuance of the
UVSG Consideration Shares in connection with the Transaction and in favor
of any other matters required to effect the transactions contemplated by
the Agreement.
2. Proxy Statement. To the extent information regarding News Corp., on the
one hand, or TCI, on the other hand, is required for the preparation of
the Proxy Statement, News Corp. and TCI, respectively, shall promptly
supply such information to UVSG upon request.
3. Investments. Until the Closing (when the Stockholders Agreement will
become effective) or the earlier termination of the Agreement, UVSG (in
the case of TCI) and the NAI Contributed Entities (in the case of News
Corp.) will be the exclusive vehicles through which each of TCI and News
Corp., directly or indirectly through its subsidiaries or Controlled
Affiliates, conduct program guide businesses (print, electronic or
otherwise), whether within or outside the United States, other than the
NDS Business. The provision of program guides to customers of the
multichannel video programming delivery ("MVPD")
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systems of TCI, News Corp, or a subsidiary or Controlled Affiliate of TCI
or News Corp. shall not be deemed to be the conduct of a program guide
business by TCI or News Corp. or any of their respective subsidiaries or
Controlled Affiliates in violation of its covenant made in the preceding
sentence regardless of the source of such program guide, but shall be
subject to any contrary provision of any affiliation or carriage agreement
between TCI or News Corp. or their applicable subsidiary or Controlled
Affiliate, on the one hand, and UVSG or any of its subsidiaries, on the
other hand. Except (a) as contemplated by Schedule 1 or Schedule 2 of the
Agreement, (b) for additional investments by UVSG in the existing
businesses of entities currently controlled by UVSG, and by NAI in the NAI
Contributed Entities, and (c) for the NDS Business, neither TCI nor News
Corp. shall, directly or indirectly through their subsidiaries or
Controlled Affiliates, invest in or acquire any guide business prior to
the Closing or the earlier termination of the Agreement. The parties
hereto acknowledge that as of the effective date hereof, British Sky
Broadcasting Group, Plc ("BSkyB") is not a Controlled Affiliate of News
Corp. News Corp. agrees, however, that until the Closing (when the
Stockholders Agreement becomes effective) or the earlier termination of
this Agreement and, if the Stockholders Agreement is entered into,
thereafter for so long as News Corp., directly or through one or more
Controlled Affiliates, is entitled to designate thereunder at least one
director of UVSG, News Corp. will vote or cause to be voted all shares of
stock of BSkyB owned by it directly or through one or more of its
subsidiaries against any transactions that would result in BSkyB
conducting any guide business (print, electronic or otherwise), whether
within or outside the United States (other than the provision of guides to
customers of its MVPD systems), to the extent that any such matters are
submitted to a vote of stockholders of BSkyB.
4. Acquisition Proposals. Except pursuant to the Agreement, News Corp. will
not, and will cause its Affiliates not to, directly or indirectly through
any officer, director, employee, representative, agent, financial advisor
or otherwise, negotiate to sell, sell, or solicit or entertain proposals
or offers from any Person relating to the acquisition of, any of the NAI
Contributed Entities or any equity interest therein or any of their
respective assets or businesses (other than immaterial assets in the
ordinary course of business), whether by merger, purchase, tender offer or
otherwise.
5. Consents and Approvals. TCI and News Corp. shall, and each shall cause its
Controlled Affiliates to, use all reasonable efforts to obtain all
consents, approvals and waivers, give all notices, make all filings and
otherwise to satisfy all conditions required to be obtained, given, made or
satisfied by it in order to close the Transaction; provided, however, that
a party shall not be obligated to take any action pursuant to the foregoing
if the taking of such action is reasonably likely to be materially
burdensome to such party and its subsidiaries taken as a whole or to impact
in a materially adverse manner the economic or business benefit of the
transactions contemplated by the Agreement and the other Transaction
Documents.
6. Tax Treatment. Unless UVSG and Liberty in their discretion have abandoned
the Netlink Transaction, and subject to the proviso clauses of Section
3(a) of the Agreement, each of News Corp. and TCI agrees that (except as
otherwise required by law) (i) it shall use all reasonable efforts to
cause the Transaction and the Netlink Transaction to constitute a tax-free
exchange under Section 351 of the Code and to cause all transfers and
exchanges
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pursuant to such transactions to occur on the same date, (ii) it will not
take any action, and will not permit any of its subsidiaries or Controlled
Affiliates to take any action, that such party knows would cause the
Transaction or the Netlink Transaction not to qualify as a tax-free
exchange pursuant to Section 351 of the Code, and (iii) it will report the
Transaction (or cause it to be reported) on all U.S. tax returns and other
U.S. tax filings as a tax-free exchange under Section 351 of the Code.
7. Continuing Services. Following the Closing and for so long as News Corp.
and its Affiliates beneficially own in the aggregate at least 12.5% of the
Class B Common Stock of UVSG, News Corp. shall, and shall cause its
Controlled Affiliates to, continue to make available to the NAI Contributed
Entities and their respective businesses, at UVSG's request from time to
time, services, including, without limitation, those listed on Schedule 4
to the Agreement but subject to the last paragraph thereof, consistent with
past practice unless USVG shall otherwise agree, and in any event on terms
no less favorable to UVSG than "most favored nation" terms unless UVSG
shall otherwise agree; provided that UVSG's right to use services of NAI,
Holdings and their respective Affiliates (other than bulk paper
procurement) that require the involvement of executives of News Corp. will
be subject to agreement upon an appropriate payment structure based upon
allocation of costs (including services of senior management); provided,
further, that it is understood that certain of such services (as indicated
on Schedule 4) are performed by unaffiliated third parties, and that
neither News Corp. nor any Affiliate of News Corp. shall have any
obligations to perform or supervise the performance of the services to be
performed by an unaffiliated third party but shall at UVSG's request and
expense be obligated to take reasonable actions to enforce its rights
against such third parties in order to ensure such performance; provided,
further, that when News Corp. and its Controlled Affiliates are no longer
making available any such service to News Corp. or any of its Affiliates,
News Corp. or its applicable Controlled Affiliate, as the case may be,
shall not be obligated to continue to make available such service to the
NAI Contributed Entities. As soon as practicable after the effective date
hereof, UVSG's and News Corp.'s respective legal counsel will prepare and
negotiate a definitive agreement with respect to the provision of such
services, containing the foregoing terms and such other terms and
conditions as may be customary or appropriate under the circumstances (the
"Definitive Services Agreement"). Although the parties intend to diligently
negotiate and enter into a Definitive Services Agreement, they acknowledge
and agree that this Section 7 is a binding agreement among them, subject to
the terms and conditions hereof.
8. TV Guide Trademark Licenses. On the Closing Date or as soon thereafter as
may be practicable, News Corp. shall cause all license agreements granting
it or its Controlled Affiliates the right to use the "TV Guide" trade name
or trademark (other than those agreements set forth in Items 2, 3, 7, 8 and
12 of Schedule 5.19 of the NAI Disclosure Schedule) to be terminated
without liability to UVSG or its Controlled Affiliates. The use of the "TV
Guide" marks pursuant to Items 2, 3, 7 and 8 of Schedule 5.19 of the NAI
Disclosure Schedule shall be on arm's length terms to be negotiated by News
Corp. and UVSG.
9. Stock Equalization. TCI and News Corp. each hereby agrees for the benefit
of the other that if (i) UVSG and Liberty, in their discretion, abandon
the Netlink Transaction, (ii) the
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transaction described in paragraph A7 of Schedule 2 of the Agreement has
not been consummated prior to the Closing and is thereafter abandoned, or
(iii) as a result of any other circumstances (other than sales of shares
permitted by the Stockholders Agreement), the aggregate number of shares
of Class A Common Stock owned by such party and its subsidiaries is less
than the aggregate number of shares of Class A Common Stock owned by the
other party and its subsidiaries as of the later of (x) the 90th day
following the Closing, and (y) if as of such 90th day the transaction
described in paragraph A7 of Schedule 2 is pending but not yet
consummated, the date such transaction is consummated or earlier
abandoned, then such party shall acquire (directly or through one or more
subsidiaries), either through open market purchases, or, at its option,
directly from UVSG (at the price set forth below), a number of additional
shares of Class A Common Stock (the "Equalization Shares") such that,
after giving effect to such purchase, the aggregate number of shares of
Class A Common Stock owned by such party and its subsidiaries is equal to
the aggregate number of shares of Class A Common Stock owned by the other
party and its subsidiaries (or any remaining difference in their
respective holdings of Class A Common Stock is attributable solely to
sales of shares by such party or its subsidiaries permitted by the
Stockholders Agreement or purchases of shares by the other party or its
subsidiaries). In the event that TCI or News Corp., as the case may be,
chooses to purchase (or cause a subsidiary to purchase) any of the
Equalization Shares directly from UVSG, UVSG hereby agrees to issue and
sell the Equalization Shares (or requested number thereof) to News Corp.
or TCI (or their respective applicable subsidiaries), as the case may be,
at a price equal to (i) $40 per share (subject to adjustment as provided
below) in the case of shares sold prior to the 90th day following the
Closing, and (ii) the current market price per share (based on the average
of the closing prices of the Class A Common Stock on the ten consecutive
trading days ending on the trading date immediately prior to the date of
the issuance and sale of the Equalization Shares) (subject to adjustment
as provided below) in the case of shares sold on or after the 90th day
following the Closing. The consummation of any issuance and sale of
Equalization Shares by UVSG required pursuant hereto shall occur on the
third Nasdaq Stock Market trading day following the date UVSG receives
written notice from TCI or News Corp. (or their respective applicable
subsidiaries), as the case may be, requesting such issuance. The price per
share payable to UVSG for the Equalization Shares to be purchased shall be
appropriately adjusted in the event of any stock dividend or stock
distribution, subdivision, combination or reclassification affecting the
Class A Common Stock occurring (or the "ex" date for which occurs in
accordance with Nasdaq Stock Market rules) (i) in the case of the $40 per
share price, at any time after the effective date hereof, and (ii) in the
case of the price based on the market price, at any time during the period
that the market price is being calculated or thereafter prior to
consummation of such issuance and sale.
10. Ancillary Agreements. The parties will negotiate in good faith to enter
into, and if agreement upon mutually satisfactory terms is reached will
(or, as the case may be, will cause their respective appropriate
Controlled Affiliates, and will use their reasonable efforts to cause each
other appropriate entity in which they have a significant but
non-controlling equity interest, to), subject to existing commitments,
enter into the following agreements; provided that, except for the Prevue
Interactive affiliation agreement referred to in paragraph (b) below, the
entering into of such agreements shall not be a condition to the Closing:
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a. Affiliation Agreements between UVSG and News Corp. (or a
Controlled Affiliate) with respect to the Prevue Channel and Prevue Interactive;
b. Affiliation Agreements between UVSG (or a subsidiary or
subsidiaries of UVSG) and TCI (or a Controlled Affiliate) with respect to the
Prevue Channel and Prevue Interactive;
c. Carriage/Marketing Agreements for "TV Guide" branded monthly
and/or weekly cable and DTH guide magazines; and
d. Agreement by UVSG to convert its existing Prevue Channel,
Prevue Online and Prevue Interactive products to the "TV Guide" brand as
mutually agreed upon; provided, however, that Prevue International will only use
the TV Guide brand where appropriate.
In the case of TCI, the Carriage/Marketing Agreement referred to above will (x)
include TCI's or the applicable Controlled Affiliate's agreement to convert TVSM
monthly magazines for cable systems controlled by TCI to weekly magazines, (y)
as consideration therefor, include NAI's agreement to pay TCI or its designee an
aggregate sum of $10 million upon such conversion being effected, and (iii)
contain such other terms and conditions as the parties may mutually agree upon.
11. Confidentiality. Each of the parties hereto agrees that it shall,
and shall use its diligent efforts to cause its officers, employees and
authorized representatives to, (i) hold in strict confidence all data and
information obtained by it pursuant to this Parent Agreement or the Agreement or
in connection herewith or therewith from any other party hereto or such other
party's Affiliates or authorized representatives (unless such information is or
otherwise becomes (through no breach of this covenant) public or readily
ascertainable from public or published information) and (ii) use all such data
and information solely for the purpose of consummating the transactions
contemplated hereby and by the Agreement and, except as required by applicable
law or legal process, shall not, and shall use its diligent efforts to ensure
that such officers, employees and authorized representatives do not, disclose
such information to others without the prior written consent of the disclosing
party. In the event the Agreement is terminated, each of TCI and UVSG, on the
one hand, and News Corp., on the other, agrees to (i) return or destroy
promptly, as and if so requested by the other party, each and every document
furnished to it by the other party or any associate or affiliate of such other
party, in connection with the transactions contemplated hereby and any copies
thereof which may have been made and to cause its representatives and any
representatives of others to whom such documents were furnished promptly to
return or destroy, as applicable, such documents and any copies thereof any of
them may have made, other than documents that are publicly available, and (ii)
refrain, and to use its diligent efforts to cause its officers, employees and
representatives to refrain, from using any of the data or information obtained
by it as referred to in the preceding sentence for any purpose.
12. Representations and Warranties.
Each of TCI and News Corp. hereby represents and warrants to the
other as follows:
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(i) Such party is a corporation duly organized, validly existing
and in good standing under the laws of the jurisdiction of its incorporation or
organization and is duly qualified or licensed and in good standing to do
business in each of the jurisdictions where the conduct of its business or the
ownership, leasing or operation of its properties requires such qualification or
licensing, except where the failure to be so duly qualified or licensed and in
good standing, individually or in the aggregate, would not have a material
adverse effect on the ability of such party to perform its obligations
hereunder.
(ii) Such party has all requisite corporate power, authority and
legal capacity to execute and deliver this Parent Agreement and each other
agreement, document, instrument or certificate contemplated by this Parent
Agreement or to be executed by such party in connection with the consummation of
the Transaction (together with this Parent Agreement, the "Parent Transaction
Documents"), and to consummate the transactions contemplated hereby and thereby
and to perform its obligations hereunder and thereunder. All corporate action
necessary to authorize the execution and delivery by such party of this Parent
Agreement and the other Parent Transaction Documents, the consummation of the
transactions contemplated hereby and thereby and the performance by it of its
obligations hereunder and thereunder has been duly taken. This Parent Agreement
has been, and each of the other Parent Transaction Documents will be at or prior
to the Closing, duly and validly executed and delivered by such party. This
Parent Agreement constitutes, and each of the Parent Transaction Documents when
so executed and delivered will constitute, legal, valid and (assuming the due
authorization, execution and delivery by the other parties hereto and thereto)
binding obligations of such party, enforceable against it in accordance with
their respective terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting creditors' rights and
remedies generally, and subject, as to enforceability, to general principles of
equity (regardless of whether enforcement is sought in a proceeding at law or in
equity).
(iii) The execution and delivery of this Parent Agreement and
the other Parent Transaction Documents by such party do not, and the performance
by such party of its obligations hereunder and thereunder will not, (i) violate
or conflict with any provision of the charter, by-laws or other organizational
documents of such party or any amendments thereto or restatements thereof, (ii)
violate any of the terms, conditions or provisions of any law, rule or
regulation applicable to such party , or any order, writ, injunction, judgment
or decree of any court, governmental authority, or regulatory agency to which
such party is subject or by which any of it or its assets are bound, or (iii)
result in a violation or breach of, or constitute (with or without due notice or
lapse of time or both) a default (or give rise to any right of termination,
cancellation or acceleration) under, any of the terms, conditions or provisions
of any note, bond, indenture, debenture, security agreement, trust agreement,
lien, mortgage, lease, agreement, license, franchise, permit, guaranty, joint
venture agreement, or other agreement, instrument or obligation, oral or
written, to which such party is a party (whether as an original party or as an
assignee or successor) or by which such party or any of its properties is bound,
except for such breaches or defaults as are not reasonably likely to have a
material adverse effect on the ability of such party to perform its obligations
hereunder or thereunder.
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13. Survival; Indemnification.
(a) The representations and warranties contained in Section 12 of
this Parent Agreement shall survive the execution and delivery hereof and the
Closing under the Agreement, and shall thereafter terminate and expire on the
second anniversary of the Closing Date. Any of such representations or
warranties which is the subject of a claim or dispute asserted in writing prior
to the expiration of such two year period shall survive with respect to such
claim or dispute until the final resolution thereof. The covenants and
agreements contained in this Parent Agreement shall survive the Closing without
limitation (except pursuant to their terms).
(b) Each of TCI and News Corp. hereby agrees to indemnify and hold
the other and the directors, officers, employees, Affiliates, agents, successors
and assigns of the other harmless from and against any and all losses,
liabilities, damages, deficiencies, and obligations resulting from, based upon,
arising out of or otherwise in respect of, and all claims, actions, suits,
proceedings, demands, judgments, assessments, fines, interest, penalties, costs
and expenses (including settlement costs and reasonable legal, accounting,
experts and other fees, costs and expenses) incident or relating to or resulting
from any nonperformance or breach of any covenant or agreement of such party
contained in this Parent Agreement or any Parent Transaction Document.
14. Termination. In the event of any termination of the Agreement, this
Parent Agreement shall forthwith become wholly void and of no further force and
effect and there shall be no liability on the part of TCI or News Corp. by
reason of this Parent Agreement except as set forth in Section 11
(Confidentiality), Section 15 (Expenses) and Section 21 (Publicity) of this
Parent Agreement, which Sections shall survive the termination of this Parent
Agreement, and (ii) nothing herein shall relieve any party hereto from liability
for any breach by it of any of its representations, warranties, covenants or
agreements made in this Parent Agreement.
15. Expenses. Each party hereto shall pay its own expenses (including fees
and expenses of legal counsel, investment bankers, brokers or other
representatives or consultants) incurred in connection with this Parent
Agreement and the transactions contemplated hereby (whether or not consummated).
16. Governing Law. This Parent Agreement shall be governed by the laws of
the State of New York applied to contracts made and wholly performed in such
State, without regard to principles governing conflicts of law. Any action to
enforce any provision of this Parent Agreement against TCI or News Corp. may be
brought only in a court of the State of New York or in the United States
District Court for the Southern District of New York. Each of TCI and News Corp.
agrees to submit to the personal jurisdiction of such courts and to accept
service of process at its address for notices pursuant to this Parent Agreement
in any such action or proceeding brought in any such court and hereby waives any
claim that such action or proceeding brought in any such court has been brought
in an inconvenient forum.
17. Headings. The section headings of this Parent Agreement are for
reference purposes only and are to be given no effect in the construction or
interpretation of this Parent Agreement.
18. Notices. All notices and other communications hereunder shall be in
writing and shall be delivered personally, telecopied (if receipt of which is
confirmed by the person to whom sent), sent by nationally recognized overnight
delivery service or mailed by registered or certified mail
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(if return receipt is requested) to News Corp. or TCI, as applicable, at the
following addresses (or to such other person or address for a party as shall be
specified by such party by like notice) (notice shall be deemed given upon
receipt, if delivered personally, by overnight delivery service or by telecopy,
or on the third business day following mailing, if mailed, except that notice of
a change of address shall not be deemed given until actually received):
(a) If to TCI, to:
Tele-Communications, Inc.
0000 XXX Xxxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: General Counsel
Telephone (000) 000-0000
Telecopier (000) 000-0000
with a copy to:
TCI UVSG, Inc.
0000 XXX Xxxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: President
Telephone (000) 000-0000
Telecopier (000) 000-0000
Xxxxx & Xxxxx, L.L.P.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxxx Xxxxxxxxx
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
(b) If to News Corp., to:
The News Corporation Limited
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxx
Senior Executive Vice President
and Group General Counsel
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
with a copy to:
Squadron, Ellenoff, Plesent & Xxxxxxxxx, LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxx
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
Notices to UVSG shall be given as provided in the Agreement.
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19. 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, such covenants or provision
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 Parent 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.
20. Amendment; Waiver. No provision of this Parent 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 Parent Agreement. No waiver of any provision hereof shall be
construed as a waiver of any other provision. Any waiver must be in writing.
21. Publicity. Except as required by law or regulation or the
requirements of the NASD or the New York Stock Exchange, no public disclosure or
publicity concerning the subject matter hereof will be made without the approval
of each of the parties hereto.
22. No Benefit to Others. The representations, warranties, covenants
and agreements contained in this Parent Agreement are for the sole benefit of
the parties hereto, their respective Affiliates, and the respective successors
and assigns of the parties hereto and their respective Affiliates, and they
shall not be construed as conferring and are not intended to confer any rights
on any other Persons.
23. Entire Agreement. This Parent Agreement, the Agreement, and that
certain letter agreement between TCI and News Corp. being entered into together
herewith, effective as of June 10, 1998, relating to "TVGOS Intellectual
Property," 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, including, without limitation, the
Letter Agreement.
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If the foregoing accurately reflects our agreement, please sign the
enclosed duplicate of this agreement in the space provided below and return the
same to the undersigned.
Very truly yours,
THE NEWS CORPORATION LIMITED
By: /s/ Xxxxxx Xxxxxxx
Name: Xxxxxx Xxxxxxx
Title: Director
Accepted and Agreed:
TELE-COMMUNICATIONS, INC.
By: /s/ Xxxxxxx X. Xxxxx
Name: Xxxxxxx X. Xxxxx
Title: Executive Vice President,
Secretary and General Counsel
UNITED VIDEO SATELLITE GROUP, INC.
By: /s/ Xxxx X. Xxxxxx
Name: Xxxx X. Xxxxxx
Title: Chairman and CEO
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