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EXHIBIT 2.1
MASTER STRATEGIC ALLIANCE AGREEMENT
This Master Strategic Alliance Agreement (this "AGREEMENT") is entered
into as of December 6, 1999, by and among Healtheon/WebMD Corporation, a
Delaware corporation ("HEALTHEON/WEBMD"), The News Corporation Limited, a South
Australia, Australia corporation ("NEWS CORP"), and Fox Entertainment Group,
Inc., a Delaware corporation ("FOX") which is controlled through certain
intermediaries by News Corp.
R E C I T A L S
A. Healtheon/WebMD is pioneering the use of the Internet to simplify
work flows, decrease costs and contribute to the quality of patient care
throughout the healthcare industry. Healtheon/WebMD has designed and developed
an Internet-based information and transaction platform that facilitates and
streamlines interactions among the myriad of participants in the healthcare
industry.
B. News Corp is a diversified international communications company
principally engaged in the production and distribution of motion pictures and
television programming; the publication of newspapers, magazines and books; the
production and distribution of promotional and advertising products and
services; the development of digital broadcasting; the development of
conditional access and subscriber management systems; the provision of computer
information services; and television, satellite and cable broadcasting.
X. Xxx is principally engaged in the development, production and
worldwide distribution of feature films and television programs, television
broadcasting and cable network programming.
X. Xxx Broadcasting Company, a Delaware corporation ("FBC") and a
subsidiary of Fox, operates a free-to-air broadcast television network in the
United States.
E. Satellite Television Asian Region Ltd., an international business
company incorporated under the laws of the British Virgin Islands ("STAR TV")
which is controlled through certain intermediaries by News Corp, operates STAR
TV network, which offers television services reaching viewers across Asia, India
and the Middle East.
X. XXX/FIT Cable, LLC, a Delaware limited liability company ("AHN/FIT
CABLE"), is 50% owned and managed through certain intermediaries by Fox and is
principally engaged in the development, production and distribution of The
Health Network cable TV channel.
X. XXX/FIT Internet, LLC, a Delaware limited liability company
("AHN/FIT INTERNET," and collectively with News Corp, Fox, FBC, Star TV and
AHN/FIT Cable, the "NEWS CORP PARTIES"), is 50% owned and managed through
certain intermediaries by Fox and has developed an Internet site devoted
exclusively to health and fitness programming.
H. Prior to the Closing (as defined herein), AHN/FIT Cable will form
The Health Network LLC, a Delaware limited liability company ("HNLLC"), by
filing a Certificate of Formation with the Secretary of State of Delaware and
will enter into a limited liability company agreement. HNLLC will be capitalized
pursuant to the terms and conditions of the limited liability company agreement
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by AHN/FIT Cable (the "ORIGINAL CABLE LLC AGREEMENT") with all of the assets
(other than cash) subject to all of the liabilities (other than loans from its
members) of AHN/FIT Cable in exchange for 100% of the member interests in HNLLC.
At the Closing, Healtheon/WebMD Cable Corporation, a Delaware corporation (the
"H/W CABLE SUB") and a wholly-owned subsidiary of Healtheon/WebMD, desires to
purchase and AHN/FIT Cable desires to sell a 50% member interest in HNLLC and to
amend and restate the Original Cable LLC Agreement to reflect the rights and
obligations of the new members of HNLLC (the "HNLLC INVESTMENT").
I. Prior to the Closing, AHN/FIT Internet will form H/W Health &
Fitness LLC, a Delaware limited liability company ("H&FLLC"), by filing a
Certificate of Formation with the Secretary of State of Delaware and will enter
into a limited liability company agreement. H&FLLC will be capitalized pursuant
to the terms and conditions of the limited liability company agreement of
AHN/FIT Internet (the "ORIGINAL INTERNET LLC AGREEMENT") with all of the assets
(other than cash and the Galaxy Asset, as defined in the Purchase Agreement)
subject to all of the liabilities (other than loans from its members) of AHN/FIT
Internet in exchange for 100% of the member interests in H&FLLC. At the Closing,
Healtheon/WebMD Internet Corporation, a Delaware corporation (the "H/W INTERNET
SUB") and a wholly-owned subsidiary of Healtheon/WebMD, desires to purchase and
AHN/FIT Internet desires to sell a 50% member interest in H&FLLC and to amend
and restate the Original Internet LLC Agreement to reflect the rights and
obligations of the new members of H&FLLC (the "INTERNET INVESTMENT").
J. In addition, Healtheon/WebMD and News Corp desire to form a joint
venture to provide all services necessary or appropriate to providing online
healthcare and medical information services and health and fitness programming
throughout the World (other than the United States and Japan). WebMD and News
Corp desire to form a Delaware limited liability company named "WebMD
International LLC" ("WEBMD INTERNATIONAL"). News Corp, through a wholly-owned
subsidiary, desires to capitalize WebMD International with $100 million in cash
in exchange for a 50% member interest in WebMD International and
Healtheon/WebMD, through a wholly-owned subsidiary, desires to capitalize WebMD
International with a royalty-free perpetual license to use its trademark rights
in exchange for a 50% member interest in WebMD International. In addition, Star
TV will provide to or procure for WebMD International $300 million of branding
services across the various media owned by News Corp and its affiliates
throughout the World (other than in the United States and Japan) (the
"INTERNATIONAL BRANDING RELATIONSHIP"), and Healtheon/WebMD will provide to
WebMD International a royalty-free perpetual license to use its content.
K. Healtheon/WebMD desires to purchase from FBC and Star TV $400
million of branding services across the various media owned by News Corp and its
affiliates throughout the world (the "BRANDING RELATIONSHIP").
X. Xxx also desires to purchase 2,000,000 shares of common stock (the
"COMMON STOCK"), par value $0.0001, of Healtheon/WebMD for $100 million.
M. Each of Healtheon/WebMD and News Corp also desires to a grant to the
other licenses to use their respective health-related content, including news
related information.
NOW, THEREFORE, it is agreed as follows:
1. THE HNLLC INVESTMENT. Immediately prior to the Closing, AHN/FIT
Cable agrees to capitalize HNLLC with all of the assets (other than cash)
subject to all of the liabilities (other than loans from its members) of AHN/FIT
Cable in exchange for 100% of the member interests in HNLLC. At the Closing, H/W
Cable Sub agrees to purchase and AHN/FIT Cable agrees to sell a 50% member
interest in HNLLC for the shares of Series A Preferred Stock (the "Series A
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Stock") par value $.0001 per share, of Healtheon/WebMD listed in Section 3 below
pursuant to the Purchase Agreement in the form attached hereto as EXHIBIT 1 (the
"PURCHASE AGREEMENT") and to enter into the Amended and Restated Limited
Liability Company Agreement of HNLLC in the form attached hereto as EXHIBIT 2
(the "AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT OF HNLLC"). The
Series A Stock shall have the powers, designations and other rights described on
EXHIBIT 3 attached hereto. Prior to the Closing Date, the Parties shall
negotiate in good faith the Certificate of Designations of the Series A Stock
which shall contain the terms set forth on EXHIBIT 3 attached hereto. On the
date hereof, News Corp shall deliver to Healtheon/WebMD the News Corp Schedules
(as defined in the Purchase Agreement) and Healtheon/WebMD shall deliver to the
News Corp Parties the Healtheon/WebMD Schedules (as defined in the Purchase
Agreement).
2. THE INTERNET INVESTMENT. Immediately prior to the Closing, AHN/FIT
Internet agrees to capitalize H&FLLC with all of the assets (other than cash and
the Galaxy Asset) subject to all of the liabilities (other than loans from its
members) of AHN/FIT Internet in exchange for 100% of the member interests in
H&FLLC. At the Closing, H/W Internet Sub agrees to purchase and AHN/FIT Internet
agrees to sell a 50% member interest in H&FLLC for the shares of Series A Stock
listed in Section 3 below pursuant to the Purchase Agreement and to enter into
the Amended and Restated Limited Liability Company Agreement of H&FLLC in the
form described on EXHIBIT 4 (the "AMENDED AND RESTATED LIMITED LIABILITY COMPANY
AGREEMENT OF H/W HEALTH & FITNESS LLC").
3. ISSUANCE AND DELIVERY OF STOCK. At the Closing, Healtheon/WebMD and
the News Corp Parties agree to enter into the Purchase Agreement pursuant to
which Healtheon/WebMD will issue (A) 155,951 shares of Series A Stock to certain
of the News Corp Parties in consideration for (i) the purchase of a 50% member
interest in HNLLC, (ii) the purchase of a 50% member interest in H&FLLC, (iii) a
Content License Agreement from News Corp to Healtheon/WebMD in the form
described on EXHIBIT 5 (the "NEWS CORP CONTENT LICENSE AGREEMENT"), and (iv) the
Branding Relationship and (B) 2,000,000 shares of Common Stock to Fox in
consideration of $100 million in cash. The issuance of shares of Series A Stock
and the Common Stock (collectively, the "STOCK") pursuant to the Transaction
Documents shall be exempt from registration under the Securities Act of 1933, as
amended, and under all applicable state securities statutes within the United
States. The shares of Stock to be issued pursuant to the Transaction Documents
shall have the registration rights set forth in the Registration Rights
Agreement in the form attached hereto as EXHIBIT 6 (the "REGISTRATION RIGHTS
AGREEMENT").
4. BRANDING RELATIONSHIP; H/W CONTENT LICENSE. At the Closing,
Healtheon/WebMD, FBC and Star TV agree to enter into the Media Services
Agreement substantially in the form attached hereto as EXHIBIT 7 (the "MEDIA
SERVICES AGREEMENT") which reflects the Branding Relationship. At the Closing,
Healtheon/WebMD Also agrees to enter into a Content License Agreement with News
Corp in the form described on EXHIBIT 8 (the "H/W CONTENT LICENSE Agreement").
5. JOINT VENTURE.
5.1 CREATION OF WEDMD INTERNATIONAL. At the Closing, Healtheon/WebMD,
through a wholly-owned subsidiary, and News Corp, through a wholly-owned
subsidiary, agree to enter into the Limited Liability Company Agreement of WebMD
International substantially in the form attached hereto as EXHIBIT 9 (the
"LIMITED LIABILITY COMPANY AGREEMENT OF WEBMD INTERNATIONAL"). News Corp,
through a wholly-owned subsidiary, agrees to capitalize WebMD International with
$100 million in cash in exchange for a 50% member interest in WebMD
International. Healtheon/WebMD, through a wholly-owned subsidiary, agrees to
capitalize WebMD International with the Trademark License Agreement
substantially in the form attached hereto as EXHIBIT 10 (the "INTERNATIONAL
TRADEMARK LICENSE AGREEMENT") providing for a license of its trademarks to WebMD
International in exchange for a 50% member interest in WebMD International.
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5.2 OTHER AGREEMENTS. At the Closing, Healtheon/WebMD agrees to execute
and deliver to WebMD International (i) the Content License Agreement
substantially in the form attached hereto as EXHIBIT 11 (the "INTERNATIONAL
CONTENT LICENSE AGREEMENT" and together with the International Trademark License
Agreement the "INTERNATIONAL LICENSE AGREEMENTS") providing for a license of its
content to WebMD International and (ii) the International Trademark License
Agreement. At the Closing, Star TV agrees to execute and deliver to WedMD
International the Media Services Agreement substantially in the form attached
hereto as EXHIBIT 12 (the "INTERNATIONAL MEDIA SERVICES AGREEMENT") which
reflects the International Branding Relationship.
This Agreement, the Amended and Restated Limited Liability Company Agreement of
HNLLC, the Amended and Restated Limited Liability Company Agreement of H/W
Health & Fitness LLC, the Purchase Agreement, the Media Services Agreement, the
International Media Services Agreement, the Limited Liability Company Agreement
of WebMD International, the International License Agreements, the News Corp
Content License Agreement, the H/W Content License Agreement and Registration
Rights Agreement are hereinafter collectively, the "TRANSACTION DOCUMENTS".
6. CLOSING. The closing of the transactions contemplated by the
Transaction Documents (the "CLOSING") will take place on the fifth (5th)
business day following the date on which the last of the conditions specified in
Sections 7 and 8 has been satisfied or waived (the "CLOSING DATE"). The place of
Closing shall be at the offices of Squadron, Ellenoff, Plesent & Xxxxxxxxx, LLP,
000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or such other place as may be
mutually agreed upon by the parties hereto.
7. CONDITIONS TO CLOSING OF THE NEWS CORP PARTIES.
The obligation of each of the News Corp Parties to consummate the
transactions contemplated by the Transaction Documents at the Closing is subject
to the fulfillment on or prior to the Closing Date of the conditions specified
below, unless waived by News Corp pursuant to Section 11.4 of this Agreement.
7.1 REPRESENTATIONS AND WARRANTIES CORRECT. Each of the representations
and warranties made by Healtheon/WebMD in each of the Transaction Documents
shall be true and correct in all material respects (except that those
representations and warranties which are qualified as to material, materiality,
material adverse effect or similar expressions, or are subject to the same or
similar type exceptions, shall be true and correct in all respects) on and as of
the date hereof and the Closing Date with the same effect as though all such
representations and warranties had been made on and as of the Closing Date
(provided that representations and warranties which are confined to a specified
date shall speak only as of such date). Healtheon/WebMD shall, from time to time
prior to the Closing Date, supplement the Healtheon/WebMD Schedules with
additional information that, if existing or known to it on the date of this
Agreement, would have been required to be disclosed in the Healtheon/WebMD
Schedules (the "HEALTHEON/WEBMD SCHEDULE SUPPLEMENT"). For purposes of
determining the satisfaction of the condition contained in this Section 7.1, the
Healtheon/WebMD Schedules shall be deemed to include only (a) information
contained therein on the date of this Agreement and (b) information added to the
Healtheon/WebMD Schedules by the Healtheon/WebMD Schedule Supplement that (i) is
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accepted in writing by News Corp or (ii) reflect actions taken or events
occurring after the date hereof and prior to the Closing Date that (A) would
not, individually or in the aggregate, reasonably be expected to have a material
adverse effect on the business, results of operations or financial condition of
Healtheon/WebMD and its consolidated subsidiaries, taken as a whole or (B) would
not, individually or in the aggregate, reasonably be expected to prevent
Healtheon/WebMD from performing its obligations under the Transaction Documents
in any material respect.
7.2 PERFORMANCE. All covenants, agreements and conditions contained in
each of the Transaction Documents to be performed or complied with by
Healtheon/WebMD on or prior to the Closing Date shall have been performed or
complied with in all respects.
7.3 TRANSACTION DOCUMENTS. Healtheon/WebMD shall have executed and
delivered the Transaction Documents.
7.4 CERTIFICATE OF DESIGNATION. Healtheon/WebMD shall have filed a
Certificate of Designation with the Delaware Secretary of State creating the
Series A Stock.
7.5 COMPLIANCE CERTIFICATE. The News Corp Parties shall have received a
certificate executed by the President or Chief Financial Officer of
Healtheon/WebMD, dated as of the Closing Date, certifying that the conditions
specified in Section 7 hereof have been fulfilled.
7.6 OPINION OF HEALTHEON/WEBMD'S COUNSEL. The News Corp Parties shall
have received from Xxxxxx Xxxxxxx Xxxxx & Scarborough, L.L.P., counsel to
Healtheon/WebMD, in form and substance reasonably satisfactory to the News Corp
Parties and their counsel, a favorable opinion addressed to the News Corp
Parties, dated as of the Closing Date.
7.7 EVIDENCE OF CONSENTS. Healtheon/WebMD shall have given the News
Corp Parties evidence satisfactory to them that Healtheon/WebMD has received all
necessary consents of third parties pursuant to the Transaction Documents, in
order to consummate the transactions contemplated by the Transaction Documents.
7.8 REGULATORY APPROVALS. All waiting periods, if any, under the HSR
Act relating to the transactions contemplated by the Transaction Documents will
have expired or terminated early.
7.9 INJUNCTIONS, ETC. No injunction or order of any governmental
authority shall be in effect as of the Closing, and no lawsuit, claim,
proceeding or investigation shall be pending before or threatened by any
governmental authority as of the Closing, which would restrain or prohibit the
transactions contemplated by the Transaction Documents.
8. CONDITIONS TO CLOSING OF HEALTHEON/WEBMD.
The obligation of Healtheon/WebMD to consummate the transactions
contemplated by the Transaction Documents at the Closing is subject to the
fulfillment on or prior to the Closing Date of the conditions specified below,
unless waived by the Healtheon/WebMD pursuant to Section 11.4 of this Agreement.
8.1 REPRESENTATIONS AND WARRANTIES CORRECT. Each of the representations
and warranties made by the News Corp Parties in each of the Transaction
Documents shall be true and correct in all material respects (except that those
representations and warranties which are qualified as to material, materiality,
material adverse effect or similar expressions, or are subject to the same or
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similar type exceptions, shall be true and correct in all respects) on and as of
the date hereof and the Closing Date with the same effect as though all such
representations and warranties had been made on and as of the Closing Date
(provided that representations and warranties which are confined to a specified
date shall speak only as of such date). News Corp shall, from time to time prior
to the Closing Date, supplement the News Corp Schedules with additional
information that, if existing or known to it on the date of this Agreement,
would have been required to be disclosed in the News Corp Schedules (the "NEWS
CORP SCHEDULE Supplement"). For purposes of determining the satisfaction of the
condition contained in this Section 8.1, the News Corp Schedules shall be deemed
to include only (a) information contained therein on the date of this Agreement
and (b) information added to the News Corp Schedules by the News Corp Schedule
Supplement that (i) is accepted in writing by Healtheon/WebMD or (ii) reflect
actions taken or events occurring after the date hereof and prior to the Closing
Date that (A) would not, individually or in the aggregate, reasonably be
expected to have a material adverse effect on the business, results of
operations or financial condition of AHN/FIT Cable, AHN/FIT Internet, H&FLLC and
HNLLC, taken as a whole, or (B) would not, individually or in the aggregate,
reasonably be expected to prevent the News Corp Parties, H&FLLC or HNLLC from
performing their respective obligations under the Transaction Documents in any
material respect.
8.2 PERFORMANCE. All covenants, agreements and conditions contained in
each of the Transaction Documents to be performed or complied with by each of
the News Corp Parties on or prior to the Closing Date shall have been performed
or complied with in all respects.
8.3 TRANSACTION DOCUMENTS. The News Corp Parties shall have executed
and delivered the Transaction Documents to which they are a party.
8.4 COMPLIANCE CERTIFICATE. Healtheon/WebMD shall have received a
certificate executed by an executive officer of News Corp, dated as of the
Closing Date, certifying that the conditions specified in Section 8 hereof have
been fulfilled.
8.5 EVIDENCE OF CONSENTS. The News Corp Parties shall have given
Healtheon/WebMD evidence satisfactory to Healtheon/WebMD that the News Corp
Parties have received all necessary consents of third parties pursuant to the
Transaction Documents, in order to consummate the transactions contemplated by
the Transaction Documents.
8.6 REGULATORY APPROVALS. All waiting periods, if any, under the HSR
Act relating to the transactions contemplated by the Transaction Documents will
have expired or terminated early.
8.7 INJUNCTIONS, ETC. No injunction or order of any governmental
authority shall be in effect as of the Closing, and no lawsuit, claim,
proceeding or investigation shall be pending before or threatened by any
governmental authority as of the Closing, which would restrain or prohibit the
transactions contemplated by the Transaction Documents.
9. TERMINATION. Notwithstanding any other provision of this Agreement,
this Agreement may be terminated and the transactions contemplated by the
Transaction Documents abandoned at any time prior to the Closing Date (i) by the
mutual consent of News Corp and Healtheon/WebMD, (ii) by News Corp (provided
that none of the News Corp Parties is then in material breach of any
representation, warranty, covenant, or other agreement contained in the
Transaction Documents) in the event of a breach by Healtheon/WebMD of any
representation, warranty, covenant, or other agreement contained in the
Transaction Documents such that the conditions in Section 7 with respect to
Healtheon/WebMD would not be satisfied as of the time of such breach, provided
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that if such breach is curable through the exercise of commercially reasonable
efforts by Healtheon/WebMD, then the terminating party or parties may not
terminate the Transaction Documents under this Section 9(ii) prior to the End
Date (hereinafter defined) provided Healtheon/WebMD continues to exercise
commercially reasonable efforts to cure such breach, (iii) by Healtheon/WebMD
(provided that Healtheon/WebMD is not then in material breach of any
representation, warranty, covenant, or other agreement contained in the
Transaction Documents) in the event of a breach by the News Corp Parties of any
representation, warranty, covenant or other agreement contained in the
Transaction Documents such that the conditions in Section 8 with respect to the
News Corp Parties would not be satisfied as of the time of such breach, provided
that if such breach is curable through the exercise of commercially reasonable
efforts by the News Corp Parties, then the terminating party may not terminate
Transaction Documents under this Section 9(iii) prior to the End Date provided
the News Corp Parties continue to exercise commercially reasonable efforts to
cure such breach or (iv) by (a) News Corp or (b) Healtheon/WebMD in the event
that the Closing shall not have been consummated by March 31, 2000 (the "END
DATE"), if the failure to consummate the transactions contemplated hereby on or
before such date is not caused by any breach of the Transaction Documents by the
party(ies) electing to terminate pursuant to this Section 9(iv). In the event of
the termination of this Agreement and the transactions contemplated by the
Transaction Documents pursuant to this Section 9, the Transaction Documents
shall become void and have no effect.
10. RESTRICTIVE COVENANTS. In consideration of the transactions
contemplated by the Transactional Documents and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, News
Corp and its Controlled Affiliates hereby agree as follows:
10.1 NEWS CORP RESTRICTED ACTIVITIES. Except as otherwise provided in
Section 10.4 below, during the Applicable Term, News Corp and its Controlled
Affiliates shall not:
(i) engage directly or indirectly in Covered Internet Services
or Covered TV Services (each a "COMPETING PROGRAM SERVICE"); or
(ii) directly or indirectly hold an interest in a Competing
Program Service.
10.2 NONSOLICITATION. Except as otherwise provided in Section 10.4
below, during the Applicable Term, News Corp and its Controlled Affiliates shall
not, directly or indirectly, solicit any Person who, at any time during the
Applicable Term, was employed or retained by HNLLC, WebMD International,
Healtheon/WebMD or any Related Company to terminate such Person's employment or
retention by HNLLC, WebMD International, Healtheon/WebMD or any Related Company
for the purpose of becoming employed or retained by News Corp, its Controlled
Affiliates or any other Person to perform the same or similar services related
to the activities that such Person performed for HNLLC, WebMD International,
Healtheon/WebMD or any Related Company or their respective successors or
assigns.
10.3 RIGHT OF FIRST OFFER. Prior to providing any material amount of
media services comparable to the Promotional Services (as defined in the Media
Services Agreement) to any Person principally engaged in providing Competing
Program Services other than to Healtheon/WebMD or any Related Company during the
term of the Media Services Agreement, News Corp shall and shall cause its
Controlled Affiliates (as defined in the Media Services Agreement) to offer to
Healtheon/WebMD (in the case of Promotional Services provided pursuant to the
Media Services Agreement) and WebMD International (in the case of Promotional
Services provided pursuant to the International Media Services Agreement) the
right to acquire such promotional services (and thus prevent their acquisition
by such Person) on terms no less favorable than those offered to such Person or
available under the Media Services Agreement or the International Media Services
Agreement.
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10.4 CERTAIN EXCEPTIONS. Section 10.1 above shall not prohibit News
Corp or its Controlled Affiliates from:
(i) Acquiring or holding for Investment Purposes only (A) equity
securities of any Person that has a class or series of equity securities that is
registered under Section 12 of the Securities Exchange Act of 1934, as amended,
and is traded on a national securities exchange or the NASDAQ Stock Market (a
"PUBLIC COMPANY") representing 10% or less of the total equity value or voting
power of such Public Company or (B) equity securities representing less than 25%
of both equity value and voting power of any Person that is not a Public Company
(except that News Corp or its Controlled Affiliates will not be deemed to have
exceeded the percentage thresholds contained in clauses (A) or (B) above to the
extent that is ownership of equity securities exceeds such thresholds solely as
a result of (x) the purchase or redemption by an issuer of its own securities or
(y) holding an interest in a Person that satisfies the requirements of (B) above
immediately prior to becoming a Public Company); PROVIDED, HOWEVER, that in any
such case, News Corp or its Controlled Affiliates do not have Control over any
such Public Company or non-Public Company. Equity securities shall be deemed
held for "INVESTMENT PURPOSES" only if the holder has no right to, and in fact
does not, participate in the business or financial affairs of the entity the
securities of which are held, whether through the board of directors, an
advisory committee or otherwise, other than the exercise of the rights attendant
to such securities as provided by the corporate, partnership or limited
liability company statutes governing such entity.
(ii) Maintaining for Investment Purposes only a non-Controlling
interest in a Person that only becomes "principally engaged in the business of
providing Competing Program Services" (as defined below) following the
acquisition by News Corp or its Controlled Affiliates after the date hereof of
an interest in such Person; PROVIDED, HOWEVER, that (a) at the time of such
acquisition such Person was not principally engaged in the business of providing
Competing Program Services, (b) at the time of such acquisition it was not
reasonably foreseeable that such Person would become principally engaged in the
business of providing Competing Program Services, (c) such Person became
principally engaged in providing Competing Program Services through no action by
News Corp or its Controlled Affiliates and (d) News Corp and its Controlled
Affiliates use their commercially reasonable efforts to cause such Person to
divest such Competing Program Services or operate them in a strategic alliance
with HNLLC or WebMD International, as applicable.
(iii) Acquiring after the date hereof a direct or indirect
interest (including a Controlling interest) in any Person which is not
"principally engaged in the business of providing Competing Program Services,"
whether directly or through one or more of its Affiliates and holding such
interest. For the purposes of this Section 10.4, a person will be deemed to be
"principally engaged in the business of providing Competing Program Services"
only if 20% or more of the operating revenues of such Person and its
consolidated subsidiaries for the most recent twelve (12) month period ended
before the date of determination were revenues derived from Competing Program
Services; provided, however, if the operating revenues of such Person for such
period exceed $100 million from Covered Internet Services or Covered TV
Services, then News Corp and its Controlled Affiliates shall use their
commercially reasonable efforts to cause such Person to divest such Competing
Program Services or operate them in a strategic alliance with HNLLC or WebMD
International, as applicable.
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(iv) Acting solely as the distributor of a Competing Program
Service through the ownership or operation of a distribution platform, including
without limitation through the ownership or operation of a cable system or a
satellite distribution system.
10.5 HEALTHEON/WEBMD RESTRICTED ACTIVITIES. Except as otherwise
provided in Section 10.7 below, during the H/W Applicable Term, Healtheon/WebMD
and its Controlled Affiliates shall not:
(i) engage directly or indirectly in Covered Internet Services
targeted to Persons anywhere in the world (other than the United States and
Japan) or Covered TV Services; or
(ii) directly or indirectly hold an interest in a Covered Internet
Services targeted to Persons anywhere the world (other than the United States
and Japan) or Covered TV Services.
10.6 NONSOLICITATION. Except as otherwise provided in Section 10.7
below, during the H/W Applicable Term, Healtheon/WebMD and its Controlled
Affiliates shall not, directly or indirectly, solicit any Person who, at any
time during the H/W Applicable Term, was employed or retained by WebMD
International, News Corp or its Controlled Affiliates to terminate such Person's
employment or retention by WebMD International, News Corp or its Controlled
Affiliates for the purpose of becoming employed or retained by Healtheon/WebMD
and its Controlled Affiliates or any other Person to perform the same or similar
services related to the activities that such Person performed for WebMD
International, News Corp, its Controlled Affiliates or their respective
successors or assigns.
10.7 CERTAIN EXCEPTIONS. Section 10.5 above shall not prohibit
Healtheon/WebMD or its Controlled Affiliates from:
(i) Acquiring or holding for Investment Purposes only (A) equity
securities of any Person that has a class or series of equity securities that is
registered under Section 12 of the Securities Exchange Act of 1934, as amended,
and is traded on a national securities exchange or the NASDAQ Stock Market (a
"PUBLIC COMPANY") representing 10% or less of the total equity value or voting
power of such Public Company or (B) equity securities representing less than 25%
of both equity value and voting power of any Person that is not a Public Company
(except that Healtheon/WebMD or its Controlled Affiliates will not be deemed to
have exceeded the percentage thresholds contained in clauses (A) or (B) above to
the extent that is ownership of equity securities exceeds such thresholds solely
as a result of (x) the purchase or redemption by an issuer of its own securities
or (y) holding an interest in a Person that satisfies the requirements of (B)
above immediately prior to becoming a Public Company); PROVIDED, HOWEVER, that
in any such case, Healtheon/WebMD or its Controlled Affiliates do not have
Control over any such Public Company or non-Public Company.
(ii) Maintaining for Investment Purposes only a non-Controlling
interest in a Person that only becomes "principally engaged in the business of
providing Competing Program Services" (as defined below) following the
acquisition by Healtheon/WebMD or its Controlled Affiliates after the date
hereof of an interest in such Person; PROVIDED, HOWEVER, that (a) at the time of
such acquisition such Person was not principally engaged in the business of
providing Competing Program Services, (b) at the time of such acquisition it was
not reasonably foreseeable that such Person would become principally engaged in
the business of providing Competing Program Services, (c) such Person became
principally engaged in providing Competing Program Services through no action by
Healtheon/WebMD or its Controlled Affiliates and (d) Healtheon/WebMD and its
Controlled Affiliates use their commercially reasonable efforts to cause such
Person to divest such Competing Program Services or operate them in a strategic
alliance with HNLLC or WebMD International, as applicable.
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(iii) Acquiring after the date hereof a direct or indirect
interest (including a Controlling interest) in any Person which is not
"principally engaged in the business of providing Competing Program Services,"
whether directly or through one or more of its Affiliates and holding such
interest. For the purposes of this Section 10.7, a person will be deemed to be
"principally engaged in the business of providing Competing Program Services"
only if 20% or more of the operating revenues of such Person and its
consolidated subsidiaries for the most recent twelve (12) month period ended
before the date of determination were revenues derived from Competing Program
Services; provided, however, if the operating revenues of such Person for such
period exceed $100 million from Covered Internet Services or Covered TV
Services, then Healtheon/WebMD and its Controlled Affiliates shall use their
commercially reasonable efforts to cause such Person to divest such Competing
Program Services or operate them in a strategic alliance with HNLLC or WebMD
International, as applicable.
(iv) Activities expressly permitted by Section 10.2 of the Limited
Liability Company Agreement of WebMD International.
(v) Acting solely as the distributor of a Competing Program
Service through the ownership or operation of a distribution platform, including
without limitation through the ownership or operation of a cable system or a
satellite distribution system.
10.8 REMEDIES. In the event of a breach or threatened breach of any of
the covenants contained in this Section 10, the non-breaching Party shall be
entitled to obtain a temporary restraining order, temporary or permanent
injunction or other equitable relief restraining the breach or threatened
breach, and the existence of any claim for damages or other remedy shall not be
a defense to any such equitable relief. The foregoing remedies are in addition
to other remedies that may be available.
10.9 SCOPE. If a court with proper jurisdiction in the matter shall
determine that any of the restrictions contained in this Section are too broad
in their scope of application, then the court shall reduce the scope of
application to the extent it determines appropriate and shall enforce the
restrictions as so modified.
10.10 CERTAIN DEFINITIONS. The following definitions shall apply for
purposes of this Section 10:
APPLICABLE TERM: means (i) in the case of Covered Internet Services
targeted to Persons anywhere in the world other than the United States, for so
long as News Corp or any Affiliate thereof holds an equity interest in WebMD
International, (ii) in the case of Covered Internet Services targeted to Persons
within the United States, until the tenth (10th) anniversary of the Closing,
(iii) in the case of Covered TV Services distributed anywhere in the world other
than the United States, for so long as News Corp or any Affiliate thereof holds
an equity interest in WebMD International and (iv) in the case of Covered TV
Services distributed within the United States, for so long as News Corp or any
Affiliate thereof holds an equity interest in HNLLC plus two (2) years.
CONTROL: means 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.
CONTROLLED AFFILIATES: means with respect to any Person, any Person
that directly or indirectly Controls, is Controlled by, or is under common
Control with such Person.
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COVERED INTERNET SERVICES: means the maintenance at any location or on
any medium of one or more accessible or addressable Internet sites (including
any web-portal or search engine) targeted toward healthcare industry
participants and consumers (including physicians, allied health professionals,
healthcare administrators, medical, nursing or rehabilitation facilities,
laboratories, medical equipment, supply and pharmaceutical vendors and
purchasers, and health insurance companies, health maintenance organizations and
other third party payors), patients and other Persons searching for or
transmitting data, text, images, software, audio files, video files, graphics or
other similar materials or products and services, predominately related to
health, wellness, disease, medicine (including holistic medicine and other
non-Western medicine), healthcare insurance eligibility, claims and
reimbursements, pharmaceuticals or natural health products.
COVERED TV SERVICES: means the distribution of audiovisual programming
by way of Non-Standard Television in the Territory which (a) is comprised of
more than twenty (20%) percent Health Programming or (b) regularly transmits
more than ninety (90) minutes of Health Programming during Prime Time.
HEALTH PROGRAMMING: means any audiovisual work, as defined in the
United States Copyright Act, that consists predominantly of coverage of topics
related to health, wellness, disease, medicine (including holistic medicine and
other non-Western medicine), healthcare insurance eligibility, claims and
reimbursements, pharmaceuticals or natural health products, including coverage
of related news, commentary and analysis or offering products and services for
purchase.
H/W APPLICABLE TERM: means (i) in the case of Covered Internet Services
targeted to Persons anywhere in the world other than the United States and
Japan, for so long as Healtheon/WebMD or any Affiliate thereof holds an equity
interest in WebMD International, (ii) in the case of Covered TV Services
distributed anywhere in the world other than the United States, for so long
Healtheon/WebMD or any Affiliate thereof holds an equity interest in WebMD
International and (iii) in the case of Covered TV Services distributed within
the United States, for so long as News Corp or any Affiliate thereof holds an
equity interest in HNLLC.
INTERNET: means a decentralized worldwide network of computer networks,
or any portion of such network.
NON-STANDARD TELEVISION: means audiovisual programming delivered by any
means of transmission, whether now existing or developed in the future
(including all forms of fixed-line or wireless, narrowband or broadband
transmission), other than (a) audiovisual programming which is made available to
viewers free-of-charge (E.G., free-to-air UHF or VHF television) even if
transmitted via cable or any other means of retransmission for which a
facilities fee is charged, and (b) home-video distribution.
PERSON: means an individual or a corporation, limited liability
company, joint venture, partnership, trust, unincorporated association,
governmental authority or other entity.
PRIME TIME: means between the hours of 6:00 p.m. and 12 midnight.
RELATED COMPANY: means a subsidiary of HNLLC, WebMD International or
Healtheon/WebMD.
TERRITORY: means the United States of America and any other nation in
which WebMD International is providing (or intends to provide as evidenced by
its business plans) Health Programming.
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11. MISCELLANEOUS.
11.1. GOVERNING LAW. This Agreement shall be governed by and construed
under the laws of the State of Delaware, without regard to its principles of
conflicts of laws.
11.2. SURVIVAL. The representations, warranties, covenants and
agreements made in the Transaction Documents herein shall survive any
investigation made by any party hereto and the Closing of the transactions
contemplated hereby.
11.3. ASSIGNMENT. The Transaction Documents may not be assigned by any
party hereto, except as otherwise expressly provided herein.
11.4. ENTIRE AGREEMENT; AMENDMENT; WAIVER. The Transaction Documents
and the other documents delivered pursuant thereto constitute the full and
entire understanding and agreement among the parties with regard to the subjects
hereof and thereof. Neither the Transaction Documents nor any term thereof may
be amended, waived, discharged or terminated except by a written instrument
signed by News Corp and Healtheon/WebMD.
11.5. NOTICES. All notices or other communications which are required
or permitted under the Transaction Documents shall be in writing and sufficient
if delivered by hand, by facsimile transmission, by registered or certified
mail, postage pre-paid, or by courier or overnight carrier, to the persons at
the addresses set forth below (or at such other address as may be provided
hereunder), and shall be deemed to have been delivered as of the date so
delivered:
If to Healtheon/WebMD: Healtheon/WebMD Corporation
400 The Lenox Building
0000 Xxxxxxxxx Xxxx
Xxxxxxx, Xxxxxxx 00000
Attention: W. Xxxxxxx Xxxxxx, Esq.
Healtheon/WebMD Corporation
0000 Xxxxxxx Xxxxx Xxxx
Xxxxx Xxxxx, Xxxxxxxxxx 00000
Attention: Xxxx Xxxxxxxx, Esq.
With a copy to: Xxxxxx Xxxxxxx Xxxxx & Scarborough, L.L.P.
Bank of America Corporate Center
Suite 2600
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: H. Xxxxx Xxxx III, Esq.
C. Xxxx Xxxxx, Esq.
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If to the News Corp Parties: The News Corporation Limited
c/o News America Incorporated
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile (000) 000-0000
Attention: Xxxxxx X. Xxxxxxx, Esq.
With a copy to: Squadron, Ellenoff, Plesent & Xxxxxxxxx, LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile (212) 697- 6686
Attention: Xxxx X. Xxxxxxxx, Esq.
or at such other address as any party shall have furnished to the other parties
in writing.
11.6. AGENT'S FEES. Each party (i) represents and warrants that it has
retained no finder or broker in connection with the transactions contemplated by
the Transaction Documents and (ii) hereby agrees to indemnify and to hold the
other party harmless of and from any liability for commissions or compensation
in the nature of an agent's, finder's or broker's fee to any broker or other
person or firm (and the cost and expenses of defending against such liability or
asserted liability) for which said party is responsible.
11.7. EXPENSES. Each of the parties shall bear its own expenses and
legal fees (and expenses and disbursements of its legal counsel) incurred on its
behalf with respect to the Transaction Documents.
11.8 CONSTRUCTION OF CERTAIN TERMS. The titles of the articles,
sections, and subsections of the Transaction Documents are for convenience of
reference only and are not to be considered in construing the Transaction
Documents.
11.9 COUNTERPARTS. The Transaction Documents may be executed in any
number of counterparts, each of which shall be an original, but all of which
together shall constitute one instrument.
11.10 FACSIMILE SIGNATURES. Facsimile signatures shall be considered
original signatures for purposes of execution and enforcement of the rights
delineated in the Transaction Documents.
11.11 ENFORCEMENT.
11.11.1. REMEDIES AT LAW OR IN EQUITY. If Healtheon/WebMD or
the News Corp Parties shall default in any of their respective obligations under
the Transaction Documents or if any representation or warranty made by or on
behalf of such party in the Transaction Documents or in any certificate, report
or other instrument delivered under or pursuant to any term hereof shall be
untrue or misleading in any material respect as of the Closing Date or as of the
date it was made, furnished or delivered, Healtheon/WebMD or the News Corp
Parties, respectively, may proceed to protect and enforce its rights by suit in
equity or action at law, whether for the specific performance of any term
contained in the Transaction Documents, injunction against the breach of any
such term or in furtherance of the exercise of any power granted in the
Transaction Documents, or to enforce any other legal or equitable right of such
party or to take any one of more of such actions.
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11.11.2. REMEDIES CUMULATIVE; WAIVER. No remedy referred to in
the Transaction Documents or in any exhibit thereto is intended to be exclusive,
but each shall be cumulative and in addition to any other remedy referred to
above or otherwise available to a party at law or in equity. No express or
implied waiver by any party of any default shall be a waiver of any future or
subsequent default. The failure or delay of any party in exercising any rights
granted it in the Transaction Documents shall not constitute a waiver of any
such right and any single or partial exercise of any particular right by such
party shall not exhaust the same or constitute a waiver of any other right
provided herein.
11.12 TIMELY PERFORMANCE. Time is of the essence as to the performance
of the obligations required of the respective parties under this Agreement and
the other Transaction Documents.
11.13 SEVERABILITY. In the event any one or more of the provisions
contained in this Agreement and the other Transaction Documents should be held
invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein or therein shall not
in any way be affected or impaired thereby. The parties shall endeavor in good
faith negotiations to replace the invalid, illegal or unenforceable provisions
with valid provisions the economic effect of which comes as close as possible to
that of the invalid, illegal or unenforceable provisions.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date and year first above written.
HEALTHEON/WEBMD CORPORATION
By: /s/ W. XXXXXXX XXXXXX
------------------------------------------
Its: EXECUTIVE VICE PRESIDENT
------------------------------------------
THE NEWS CORPORATION LIMITED
By: /s/ XXXXX XXXXX
------------------------------------------
Its: DIRECTOR
------------------------------------------
THE FOX ENTERTAINMENT GROUP, INC.
By: /s/ XXXXXXXX X. XXXXXX
------------------------------------------
Its: SENIOR VICE PRESIDENT
------------------------------------------
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