EXHIBIT 99.1
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement") is dated as of October
4, 1999 by and among Gemstar International Group Limited, a British Virgin
Islands corporation ("Parent"), G Acquisition Subsidiary Corp., a Delaware
corporation and a direct wholly owned subsidiary of Parent ("Sub"), and TV
Guide, Inc., a Delaware corporation (the "Company").
BACKGROUND
A. The respective Boards of Directors of Parent, Sub and the Company have
approved the merger of Sub with and into the Company (the "Merger"), upon the
terms and subject to the conditions set forth in this Agreement and in
accordance with the General Corporation Law of the State of Delaware (the
"DGCL"), whereby each issued and outstanding share of the Company's Class A
common stock, $0.01 par value per share (the "Company Class A Common Stock")
and each issued and outstanding share of the Company's Class B common stock,
$0.01 par value (the "Company Class B Common Stock", and together with the
Company Class A Common Stock, the "Company Common Stock"), other than shares to
be cancelled in accordance with Section 2.1(b), will be converted into the
right to receive a certain number of ordinary shares, $0.01 par value per
share, of Parent ("Parent Common Stock", which term shall also include any
rights attached to such Parent Common Stock to purchase Parent's Series A
Junior Participating Preferred Shares), such number to be determined as
provided herein.
B. Pursuant to, and in accordance with, Regulation 127 of Parent's Amended
and Restated Articles of Association, as amended ("Parent's Articles"), Section
88 of the International Business Companies Act, 1984 (Cap. 291) of the British
Virgin Islands (the "IBCA"), and Section 388 of the DGCL, the Board of
Directors of Parent has approved the continuation and domestication of Parent
as a corporation organized and incorporated pursuant to the laws of the State
of Delaware, such domestication to be effective prior to the Effective Time (as
defined below) of the Merger, at which time Parent shall cease to be a
corporation organized and incorporated under the laws of the British Virgin
Islands, shall continue as a corporation organized and incorporated under the
laws of the State of Delaware with the Certificate of Incorporation in the form
attached hereto as Exhibit 1.7(a) and the Bylaws in the form attached hereto as
Exhibit 1.7(b) serving as the certificate of incorporation and bylaws of Parent
until amended in accordance with the terms thereof and the laws of the State of
Delaware (the "Domestication").
C. The Merger requires the approval of the holders of a majority of the
combined voting power of the outstanding shares of the Company Common Stock
voting together as a single class (the "Company Stockholder Approval").
D. The rules of the Nasdaq National Market require that the stockholders of
Parent ("Parent Stockholders") approve the issuance of the Parent Common Stock
pursuant to this Agreement by the affirmative vote of the holders of a majority
of the shares of Parent Common Stock voted at a meeting of Parent Stockholders
in person or by proxy and Parent will seek to obtain such approval of the
Parent Stockholders of the Domestication as is required by applicable law
(collectively, the "Parent Stockholder Approvals" and together with the Company
Stockholder Approval, the "Stockholder Approvals").
E. Parent, Sub and the Company desire to make certain representations,
warranties, covenants and agreements in connection with the Merger and also to
prescribe various conditions to the Merger.
F. For federal income tax purposes, it is intended that the Merger will
qualify as a reorganization within the meaning of Section 368(a) of the
Internal Revenue Code of 1986, as amended (the "Code").
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G. Concurrently with the execution of this Agreement and as an inducement to
Parent to enter into this Agreement, each of Liberty Media Corporation
("Liberty") and The News Corporation Limited ("News Corp."), each an indirect
stockholder of the Company (the "Company Significant Stockholders"), has
entered into an agreement with Parent (the "Company Voting Agreements"), in the
applicable form attached hereto as Exhibits A-1 through A-2, pursuant to which
the Company Significant Stockholders have, among other things, agreed (i) to
vote their shares of the Company Common Stock in favor of the Merger, and (ii)
to take certain other actions as provided therein.
H. Concurrently with the execution of this Agreement and as an inducement to
the Company to enter into this Agreement, each of Xxxxx X. Xxxx, Xxxxx Ma
Xxxxx, Dynamic Core Holdings Limited and THOMSON multimedia, S.A., each a
stockholder of Parent (the "Parent Significant Stockholders"), has entered into
an agreement with the Company (the "Parent Voting Agreements"), in the
applicable form attached hereto as Exhibits B-1 through B-4, pursuant to which
each Parent Significant Stockholder has, among other things, agreed (i) to vote
their respective shares of Parent Common Stock in favor of the issuance of the
Parent Common Stock and the Domestication pursuant to this Agreement, and (ii)
to take certain other actions as provided therein.
I. Concurrently with the execution of this Agreement and as an inducement to
Parent to enter into this Agreement, the Company and Parent have entered into a
Company Option Agreement (the "Company Option Agreement") pursuant to which the
Company shall grant to Parent an option to purchase shares of Company Common
Stock as set forth in the Company Option Agreement.
J. Concurrently with the execution of this Agreement and as an inducement to
the Company to enter into this Agreement, the Company and Parent have entered
into a Parent Option Agreement (the "Parent Option Agreement") pursuant to
which Parent shall grant to the Company an option to purchase shares of Parent
Common Stock as set forth in the Parent Option Agreement.
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AGREEMENT
In consideration of the representations, warranties, covenants and
agreements contained in this Agreement, the parties agree as follows:
ARTICLE I
The Merger
Section 1.1 The Domestication of Parent. Upon the terms and subject to the
conditions set forth in this Agreement and in accordance with Regulation 127 of
Parent's Articles, Section 88 of the IBCA and Section 388 of the DGCL, prior to
the Effective Time of the Merger, Parent shall effect the Domestication.
Following the Domestication, Parent shall cease to be a corporation organized
pursuant to the laws of the British Virgin Islands.
Section 1.2 The Merger. Upon the terms and subject to the conditions set
forth in this Agreement and in accordance with the DGCL, Sub shall be merged
with and into the Company at the Effective Time (as defined in Section 1.4).
Following the Merger, the separate corporate existence of Sub shall cease and
the Company shall continue as the surviving corporation (the "Surviving
Corporation") and shall succeed to and assume all the rights and obligations of
the Company and of Sub in accordance with the DGCL.
Section 1.3 Closing. Unless this Agreement shall have been terminated
pursuant to Section 7.1, the closing of the Merger will take place at 10:00
a.m. on a date to be specified by the parties, which shall be no later than the
second business day after satisfaction or waiver of the conditions set forth in
Article VI (the "Closing Date"), at the offices of O'Melveny & Xxxxx LLP, 000
Xxxxxxx Xxxxxx Xxxxx, 00xx Xxxxx, Xxxxxxx Xxxxx, Xxxxxxxxxx, unless another
time, date or place is agreed to in writing by the parties hereto.
Section 1.4 Effective Time. Subject to the provisions of this Agreement, as
soon as practicable on the Closing Date, the parties hereto shall cause the
Merger to be consummated by filing a Certificate of Merger substantially in the
form of Exhibit 1.4 (the "Certificate of Merger") with the Secretary of State
of the State of Delaware, executed in accordance with the relevant provisions
of the DGCL (the date and time of such filing, or such later date and time as
may be specified in the Certificate of Merger by mutual agreement of Parent,
Sub and the Company, being the "Effective Time").
Section 1.5 Effects of the Merger. At the Effective Time, the effect of the
Merger shall be as provided in the applicable provisions of the DGCL. Without
limiting the generality of the foregoing, and subject thereto, at the Effective
Time all the property, rights, privileges, powers and franchises of the Company
and Sub shall vest in the Surviving Corporation, and all debts, liabilities and
duties of the Company and Sub shall become the debts, liabilities and duties of
the Surviving Corporation.
Section 1.6 Certificate of Incorporation and Bylaws of Surviving
Corporation. The Certificate of Incorporation of the Sub in effect at the
Effective Time shall be the Certificate of Incorporation of the Surviving
Corporation until duly amended in accordance with the terms thereof and the
DGCL; provided, however, that at the Effective Time the Certificate of
Incorporation of the Surviving Corporation shall be amended so that the name of
the Surviving Corporation shall be "TVG, Inc." or such other name as the
parties hereto may agree. The Bylaws of Sub in effect at the Effective Time
shall be the Bylaws of the Surviving Corporation until duly amended in
accordance with the terms thereof and the DGCL.
Section 1.7 Certificate of Incorporation and Bylaws of Parent. Following
the Domestication and at the Effective Time, the Certificate of Incorporation in
the form attached hereto as Exhibit 1.7(a) shall be the Certificate of
Incorporation of Parent and shall remain in effect until duly amended in
accordance with the terms thereof and the laws of the State of Delaware.
Following the Domestication and at the Effective Time, the Bylaws in the form
attached hereto as Exhibit 1.7(b) shall be the Bylaws of Parent (the "Bylaws of
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Parent") and shall remain in effect until duly amended in accordance with the
terms thereof and the laws of the State of Delaware.
Section 1.8 Directors. At the Effective Time, the directors of the Company
immediately prior to the Effective Time shall be deemed to have resigned at
such time and the persons whose names are set forth on Exhibit 1.8 shall be the
directors of the Surviving Corporation, until the earlier of their resignation
or removal or until their respective successors are duly elected and qualified.
Section 1.9 Officers. At the Effective Time, the officers of the Company
immediately prior to the Effective Time shall continue to serve as the officers
of the Surviving Corporation until the earlier of their resignation or removal
or until their respective successors are duly elected and qualified.
Section 1.10 Additional Actions. If, at any time after the Effective Time,
the Surviving Corporation shall consider or be advised that any deeds, bills of
sale, assignments, assurances or any other actions or things are necessary or
desirable to vest, perfect or confirm of record or otherwise in the Surviving
Corporation its right, title or interest in, to or under any of the rights,
properties or assets of Sub or the Company or otherwise to carry out this
Agreement, the officers and directors of the Surviving Corporation shall be
authorized, so long as such action is not in conflict with this Agreement, to
execute and deliver, in the name and on behalf of Sub or the Company, all such
deeds, bills of sale, assignments and assurances and to take and do, in the
name and on behalf Sub or the Company, all such other actions and things as may
be necessary or desirable to vest, perfect or confirm any and all right, title
and interest in, to and under such rights, properties or assets in the
Surviving Corporation or otherwise to carry out this Agreement.
ARTICLE II
Effect of the Merger on the Capital Stock of the Constituent Corporations;
Exchange of Certificates
Section 2.1 Effect on Capital Stock. At the Effective Time, by virtue of the
Merger and without any action on the part of Parent, Sub, the Company, or the
holders of any shares of the Company Common Stock or any shares of capital
stock of Sub:
(a) Capital Stock of Sub. Each share of the capital stock of Sub issued
and outstanding immediately prior to the Effective Time shall be converted
into and exchanged for one validly issued, fully paid and nonassessable share
of common stock of the Surviving Corporation.
(b) Cancellation of Treasury Stock and Parent Owned Stock. Each share of
the Company Common Stock that is owned by the Company and each share of the
Company Common Stock that is owned by Parent or Sub immediately prior to
the Effective Time shall automatically be cancelled and retired without any
conversion thereof and no consideration shall be delivered with respect
thereto.
(c) Conversion of Company Common Stock. Each share of Company Common
Stock issued and outstanding as of the Effective Time, other than shares to
be cancelled in accordance with Section 2.1(b), shall be converted, subject
to Section 2.1(e) and 2.2(e), into .6573 shares (the "Exchange Ratio") of
Parent Common Stock (including all rights attached thereto). As of the
Effective Time, all such shares of the Company Common Stock shall no longer
be outstanding and shall automatically be cancelled and retired and shall
cease to exist, and the holders of certificates or instruments previously
evidencing such shares of the Company Common Stock outstanding immediately
prior to the Effective Time shall cease to have any rights with respect
thereto except as otherwise provided herein or by law. Each certificate
previously representing the Company Common Stock shall thereafter represent
the right to receive a certificate representing the shares of Parent Common
Stock into which the Company Common Stock was converted in the Merger. Such
certificates previously representing shares of the Company Common Stock
shall be exchanged for certificates representing whole shares of Parent
Common Stock issued in
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consideration therefor upon the surrender of such certificates in
accordance with the provisions of Section 2.2, without interest. No
fractional shares of Parent Common Stock shall be issued, and, in lieu
thereof, a cash payment shall be made pursuant to Section 2.2(e).
(d) Stock Options. At the Effective Time, all options to purchase the
Company Common Stock (each, a "Company Stock Option") then outstanding
under the TV Guide, Inc. Stock Option Plan for Non-Employee Directors and
the TV Guide, Inc. Equity Incentive Plan (collectively, the "Company Stock
Option Plans") shall be assumed by Parent in accordance with Section 5.4
hereof.
(e) Adjustment to Exchange Ratio. If between the date of this Agreement
and the Effective Time, the outstanding shares of Parent Common Stock or
the Company Common Stock shall have been changed into a different number of
shares or a different class by reason of any reclassification,
recapitalization, split-up, stock dividend, stock combination, exchange of
shares, readjustment or otherwise, then the Exchange Ratio shall be
correspondingly adjusted. Nothing in this Section 2.1(e) shall be construed
to relieve the parties from their respective obligations under Section 4.1
below.
Section 2.2 Exchange of Certificates.
(a) Exchange Agent. Parent shall deposit, or shall cause to be deposited,
with American Stock Transfer and Trust Company, as exchange agent for Parent
Common Stock (the "Exchange Agent") as of the Effective Time (or otherwise when
requested by the Exchange Agent from time to time in order to effect any
exchange pursuant to this Section 2.2), for the benefit of the holders of
shares of the Company Common Stock for exchange in accordance with this Article
II through the Exchange Agent, certificates representing the shares of Parent
Common Stock issuable pursuant to Section 2.1 in exchange for outstanding
shares of the Company Common Stock (such certificates representing shares of
Parent Common Stock together with any dividends or distributions with respect
thereto, being collectively referred to as the "Exchange Fund"), and cash in an
amount sufficient for payment in lieu of fractional shares pursuant to Section
2.2 (e). The Exchange Agent shall, pursuant to irrevocable instructions,
deliver the Parent Common Stock contemplated to be issued pursuant to Section
2.1 out of the Exchange Fund. Except as contemplated by Section 2.2(e), the
Exchange Fund shall not be used for any other purpose.
(b) Exchange Procedure. As soon as reasonably practicable after the
Effective Time, Parent shall instruct the Exchange Agent to mail to each holder
of a certificate or certificates which immediately prior to the Effective Time
represented outstanding shares of the Company Common Stock (for convenience of
reference, the certificates of the Company Common Stock are referred to as the
"Certificates"), (i) a letter of transmittal (which shall be in customary form
and shall specify that delivery shall be effected, and risk of loss and title
to the Certificates shall pass, only upon proper delivery of the Certificates
to the Exchange Agent) and (ii) instructions for use in effecting the surrender
of the Certificates in exchange for certificates representing shares of Parent
Common Stock. Upon surrender of a Certificate for cancellation to the Exchange
Agent, together with such letter of transmittal, duly executed, and such other
documents as may reasonably be required by the Exchange Agent, and the holder
of such Certificate shall be entitled to receive in exchange therefor a
certificate evidencing that number of whole shares of Parent Common Stock which
such holder has the right to receive in respect of the shares of the Company
Common Stock formerly evidenced by such Certificate (after taking into account
the provisions of this Agreement and all shares of the Company Common Stock
then held of record by such holder), cash in lieu of fractional shares of
Parent Common Stock to which such holder is entitled pursuant to Section 2.2(e)
and any dividends or other distributions to which such holder is entitled
pursuant to Section 2.2(c), and the Certificate so surrendered shall forthwith
be cancelled. In the event of a transfer of ownership of the Company Common
Stock which is not registered in the transfer records of the Company, a
certificate representing the proper number of shares of Parent Common Stock may
be issued to a person other than the person in whose name the Certificate so
surrendered is registered, if such Certificate, accompanied by all documents
required to evidence and effect such transfer, shall be properly endorsed with
signature guarantee or otherwise be in proper form for transfer and the person
requesting such payment shall pay any transfer or other taxes required by
reason of the issuance of shares of Parent Common Stock to a person other than
the registered holder of such Certificate or establish to the satisfaction of
Parent that such tax has been paid or is
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not applicable. Until surrendered as contemplated by this Section 2.2, each
Certificate shall be deemed at any time after the Effective Time to represent
only the right to receive upon such surrender the certificate evidencing whole
shares of Parent Common Stock, cash in lieu of any fractional shares of Parent
Common Stock to which such holder is entitled pursuant to Section 2.2(e) and
any dividends or other distributions to which such holder is entitled pursuant
to Section 2.2(c). No interest will be paid or will accrue on any cash payable
pursuant to Section 2.2(c) or 2.2(e).
(c) Distributions with Respect to Unexchanged Shares. No dividends or other
distributions declared or made on or after the Effective Time with respect to
Parent Common Stock with a record date on or after the Effective Time shall be
paid to the holder of any unsurrendered Certificate with respect to the shares
of Parent Common Stock represented thereby, and no cash payment in lieu of
fractional shares shall be paid to any such holder pursuant to Section 2.2(e),
in each case until the surrender of such Certificate in accordance with this
Article II. Subject to the effect of applicable escheat laws, following
surrender of such Certificate, there shall be paid to the holder of the
certificate representing whole shares of Parent Common Stock issued in exchange
therefor, without interest, (i) at the time of such surrender, the amount of
any such cash payable in lieu of a fractional share of Parent Common Stock to
which such holder is entitled pursuant to Section 2.2(e) and the amount of
dividends or other distributions with a record date on or after the Effective
Time theretofore paid with respect to such whole shares of Parent Common Stock,
and (ii) at the appropriate payment date, the amount of dividends or other
distributions with a record date on or after the Effective Time but prior to
such surrender and with a payment date subsequent to such surrender payable
with respect to such whole shares of Parent Common Stock.
(d) No Further Ownership Rights in the Company Common Stock. All shares of
Parent Common Stock issued upon the surrender for exchange of Certificates in
accordance with the terms of this Article II (including any cash paid pursuant
to Section 2.2(c) or 2.2(e)) shall be deemed to have been issued (and paid) in
full satisfaction of all rights pertaining to the shares of the Company Common
Stock theretofore represented by such Certificates, subject, however, to the
Surviving Corporation's obligation to pay any dividends or make any other
distributions with a record date prior to the Effective Time which may have
been declared or made by the Company on such shares of the Company Common Stock
in accordance with the terms of this Agreement or prior to the date of this
Agreement and which remain unpaid at the Effective Time and have not been paid
prior to surrender. At the Effective Time, the stock transfer books of the
Company shall be closed, and there shall be no further registrations of
transfers of shares of the Company Common Stock, or transfer or exercise of the
Company Stock Options thereafter on the records of the Company. If, after the
Effective Time, Certificates are presented to the Surviving Corporation, Parent
or the Exchange Agent for any reason, they shall be cancelled and exchanged as
provided in this Article II.
(e) No Fractional Shares.
(i) No Certificates or scrip representing fractional shares of Parent
Common Stock shall be issued upon the surrender for exchange of Certificates,
and such fractional share interests will not entitle the owner thereof to
vote or to any rights of a stockholder of Parent.
(ii) Each holder of a Certificate issued and outstanding at the
Effective Time who would otherwise be entitled to receive a fractional
share of Parent Common Stock upon surrender of such Certificate for
exchange pursuant to this Article II (after taking into account all shares
of Company Common Stock then held by such holder) shall receive, in lieu
thereof, cash in an amount equal to the value of such fractional share,
which shall be equal to the fraction of a share of Parent Common Stock that
would otherwise be issued multiplied by the average closing price for a
share of Parent Common Stock on the Nasdaq National Market (as reported in
The Wall Street Journal) during the 20 consecutive trading days ending on
the third trading day prior to the Effective Time.
(iii) As soon as practicable after the determination of the amount of
cash, if any, to be paid to holders of Certificates with respect to any
fractional share interests, the Exchange Agent shall promptly pay such
amounts to such holders of Certificates subject to and in accordance with
the terms of Section 2.2(c).
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(f) Termination of Exchange Fund. Any portion of the Exchange Fund that
remains undistributed to the holders of Certificates for twelve months after
the Effective Time shall be delivered to Parent, upon demand, and any holders
of Certificates who have not theretofore complied with this Article II shall
thereafter look as a general creditor only to Parent for payment of the shares
of Parent Common Stock, any cash in lieu of fractional shares of Parent Common
Stock and any dividends or distributions with respect to Parent Common Stock to
which they are entitled.
(g) No Liability. None of Parent, Sub, the Company or the Exchange Agent
shall be liable to any holder of shares of the Company Common Stock, or Stock
Options for any shares of Parent Common Stock (or dividends or distributions
with respect thereto) or cash from the Exchange Fund delivered to a public
official pursuant to any applicable abandoned property, escheat or similar law.
(h) Investment of Exchange Fund. The Exchange Agent shall invest any cash
included in the Exchange Fund, as directed by Parent, on a daily basis. Any
interest and other income resulting from such investments shall be paid to
Parent.
(i) Lost, Stolen or Destroyed Certificates. In the event any Certificates
shall have been lost, stolen or destroyed, the Exchange Agent shall issue in
exchange for such lost, stolen or destroyed Certificates, upon the making of an
affidavit of that fact by the holder thereof, such shares of Parent Common
Stock, cash in lieu of fractional shares of Parent Common Stock to which such
holder is entitled pursuant to Section 2.2(e) and any dividends or other
distributions to which such holder is entitled pursuant to Section 2.2(c).
ARTICLE III
Representations and Warranties
Section 3.1 Representations and Warranties of the Company. Notwithstanding
anything herein to the contrary, no representation is or shall be considered to
have been made with respect to any litigation, claims or disputes between the
Company and Parent or their respective subsidiaries, the merits of any such
claim or merits of defenses related thereto, based on the intellectual property
of the Company or Parent or their respective subsidiaries. Except as included
in, or filed in connection with, the Company SEC Documents (as defined in
Section 3.1(e)) which are Publicly Available ("Publicly Available" means
documents filed with the SEC that are publicly available on or before August
31, 1999, which shall be deemed to include exhibits to documents filed with the
SEC for which confidential treatment has been sought) or on the disclosure
schedule delivered by the Company to Parent prior to the execution of this
Agreement (the "Company Disclosure Schedule"), the Company represents and
warrants to Parent and Sub as follows:
(a) Organization, Standing and Corporate Power. The Company and each of
its subsidiaries is a corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction in which it is organized
and has the requisite corporate power and authority to carry on its
business as now being conducted. The Company and each of its subsidiaries
is duly qualified or licensed to do business and is in good standing in
each jurisdiction in which the nature of its business or the ownership or
leasing of its properties makes such qualification or licensing necessary,
other than in such jurisdictions where the failure to be so qualified or
licensed (individually or in the aggregate) would not have a "material
adverse effect" (as defined in Section 8.3(d)) on the Company.
(b) Subsidiaries. The Company Disclosure Schedule lists each subsidiary
of the Company and its jurisdiction of incorporation or organization. All
the outstanding shares of capital stock of each such subsidiary that is a
corporation have been validly issued and are fully paid and nonassessable.
The shares of capital stock, membership interests and partnership
interests, as applicable, of each such subsidiary that is owned by the
Company, by another subsidiary of the Company or by the Company and another
such subsidiary, are owned free and clear of all liens. Except for (i) the
capital stock of its subsidiaries that are corporations, and (ii) except
for the membership interests or partnership interests of its subsidiaries
that are
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limited liability companies or partnerships, and (iii) except for
investments in marketable securities, the Company does not own, directly or
indirectly, any capital stock or other ownership interest in any
corporation, partnership, joint venture or other entity.
(c) Capital Structure. The authorized capital stock of the Company
consists of 650,000,000 shares of the Company Class A Common Stock,
300,000,000 shares of the Company Class B Common Stock, and 2,000,000
shares of the Company's Preferred Stock, $0.01 par value. At the close of
business on September 30, 1999, (i) 77,126,612 shares of the Company Class
A Common Stock were issued and outstanding and 74,993,176 shares of the
Company Class B Common Stock were issued and outstanding, (ii) no shares of
the Company Common Stock were held by the Company in its treasury, (iii)
4,253,584 shares of the Company Common Stock were reserved for issuance
upon exercise of the outstanding Company Stock Options, and (iv) 1,861,894
shares of the Company Common Stock were reserved for issuance upon exercise
of Company Stock Options available for grant under the Company Stock Option
Plans. As of September 30, 1999, there are no shares of the Company's
Preferred Stock issued or outstanding. Except as set forth above, at the
close of business on September 30, 1999, no shares of capital stock or
other voting securities of the Company were issued, reserved for issuance
or outstanding. All options to purchase shares of Company Common Stock were
granted under the Company Stock Option Plans. There are no outstanding
stock appreciation rights of the Company and no outstanding limited stock
appreciation rights or other rights to redeem for cash options or warrants
of the Company. All outstanding shares of capital stock of the Company are,
and all shares which may be issued upon the exercise of Company Stock
Options will be, when issued, duly authorized, validly issued, fully paid
and nonassessable and not subject to preemptive rights. There are no bonds,
debentures, notes or other indebtedness of the Company having the right to
vote (or convertible into, or exchangeable for, securities having the right
to vote) on any matters on which stockholders of the Company may vote.
Except as set forth above and except for the Company Option Agreement, as
of the date of this Agreement, there are no outstanding securities,
options, warrants, calls, rights, commitments, agreements, arrangements or
undertakings of any kind to which the Company or any of its subsidiaries is
a party or by which any of them is bound obligating the Company or any of
its subsidiaries to issue, deliver or sell, or cause to be issued,
delivered or sold, additional shares of capital stock or other voting
securities of the Company or of any of its subsidiaries or obligating the
Company or any of its subsidiaries to issue, grant, extend or enter into
any such security, option, warrant, call, right, commitment, agreement,
arrangement or undertaking. There are no outstanding contractual
obligations of the Company or any of its subsidiaries to repurchase, redeem
or otherwise acquire any shares of capital stock (or options to acquire any
such shares) of the Company or any of its subsidiaries. Except for revenue
sharing arrangements in license agreements entered into in the ordinary
course of business, there are no agreements, arrangements or commitments of
any character (contingent or otherwise) pursuant to which any person is or
may be entitled to receive any payment based on the revenues, earnings or
financial performance of the Company or any of its subsidiaries or assets
or calculated in accordance therewith (other than ordinary course payments
or commissions to sales representatives of the Company based upon revenues
generated by them without augmentation as a result of the transactions
contemplated hereby) or to cause the Company or any of its subsidiaries to
file a registration statement under the Securities Act of 1933, as amended
(the "Securities Act"), or which otherwise relate to the registration of
any securities of the Company. Neither the Company nor any of its
subsidiaries owns of record or beneficially any shares of Parent Common
Stock.
(d) Authority; Noncontravention. The Company has the requisite corporate
power and authority to enter into this Agreement and the Company Ancillary
Agreements (as defined in Section 8.3(c) hereof) and, subject to the
Company Stockholder Approval, to consummate the transactions contemplated
by this Agreement and the Company Ancillary Agreements. The execution and
delivery of this Agreement and the Company Ancillary Agreements by the
Company and the consummation by the Company of the transactions
contemplated by this Agreement and the Company Ancillary Agreements have
been duly authorized by all necessary corporate action on the part of the
Company, subject to the Company Stockholder Approval of this Agreement.
This Agreement and the Company Ancillary Agreements have been duly executed
and delivered by the Company and constitute a valid and binding obligation
of the
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Company, enforceable against the Company in accordance with its terms,
subject to (i) bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting or relating to creditors rights generally and (ii)
the availability of injunctive relief and other equitable remedies. The
execution and delivery of this Agreement and the Company Ancillary
Agreements do not, and the consummation of the transactions contemplated by
this Agreement and the Company Ancillary Agreements and compliance with the
provisions of this Agreement and the Company Ancillary Agreements will not,
conflict with, or result in any violation of or default (with or without
notice or lapse of time, or both) under, or give rise to a right of
termination, cancellation or acceleration of any obligation or loss of a
material benefit under, or result in the creation of any lien upon any of
the properties or assets of the Company or any of its subsidiaries under,
(i) the certificate of incorporation or bylaws of the Company or the
comparable charter or organizational documents of any of its subsidiaries,
(ii) the Exclusive Affiliation Agreement between TV Guide Interactive, Inc.
and Satellite Services, Inc., dated Xxxxx 0, 0000, (xxx) subject to the
governmental filings and other matters referred to in the following
sentence, any loan or credit agreement, note, bond, mortgage, indenture,
lease or other agreement, instrument, permit, concession, franchise or
license applicable to the Company or any of its subsidiaries or their
respective properties or assets or (iv) subject to the governmental filings
and other matters referred to in the following sentence, any judgment,
order, decree, statute, law, ordinance, rule or regulation applicable to
the Company or any of its subsidiaries or their respective properties or
assets, other than, in the case of clauses (iii) or (iv), any such
conflicts, violations, defaults, rights or liens that individually or in
the aggregate would not (x) have a material adverse effect on the Company,
(y) impair in any material respect the ability of the Company to perform
its obligations under this Agreement and the Company Ancillary Agreements
or (z) prevent or materially delay the consummation of any of the
transactions contemplated by this Agreement and the Company Ancillary
Agreements. No consent, approval, order or authorization of, or
registration, declaration or filing with, any federal, state or local
government or any court, administrative or regulatory agency or commission
or other governmental authority or agency, domestic or foreign (a
"Governmental Entity"), is required by the Company or any of its
subsidiaries in connection with the execution and delivery of this
Agreement and the Company Ancillary Agreements by the Company or the
consummation by the Company of the transactions contemplated by this
Agreement and the Company Ancillary Agreements, except for (i) the filing
with the Federal Trade Commission and the Antitrust Division of the
Department of Justice (the "Specified Agencies") of a premerger
notification and report form by the Company under the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 0000 (xxx "XXX Xxx"), (xx) the filing with
the Securities and Exchange Commission (the "SEC") of (x) the Proxy
Statement (as defined in Section 5.1) and (y) such reports under Sections
13(a), 13(d) and 16(a) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), as may be required in connection with this Agreement
and the Company Ancillary Agreements and the transactions contemplated by
this Agreement and the Company Ancillary Agreements, (iii) the filing of
the Certificate of Merger with the Delaware Secretary of State and
appropriate documents with the relevant authorities of other states in
which the Company is qualified to do business, (iv) any filings with the
Federal Communications Commission (the "FCC") or any filings with the
United States Committee of Foreign Investments pursuant to the Exxon-Xxxxxx
Amendment to the Defense Protection Act of 1988 ("Exxon-Xxxxxx"), and (v)
such other consents, approvals, orders, authorizations, registrations,
declarations and filings, including under (x) the laws of any foreign
country in which the Company or any of its subsidiaries conducts any
business or owns any property or assets or (y) the "takeover" or "blue sky"
laws of various states, the failure of which to be obtained or made would
not, individually or in the aggregate, have a material adverse effect on
the Company or prevent or materially delay the consummation of any of the
transactions contemplated by this Agreement and the Company Ancillary
Agreements.
(e) SEC Documents; Financial Statements. The Company has filed with the
SEC all required reports and forms and other documents (the "Company SEC
Documents"). As of their respective dates, except as subsequently amended
in a Publicly Available Company SEC Document, the Company SEC Documents
complied in all material respects with the requirements of the Securities
Act or the Exchange Act, as the case may be, and the rules and regulations
of the SEC promulgated thereunder applicable to
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such Company SEC Documents and, to Company's knowledge, none of the Company
SEC Documents contained any untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under
which they were made, not misleading. The financial statements of the
Company included in the Company SEC Documents comply as to form in all
material respects with applicable accounting requirements and the published
rules and regulations of the SEC with respect thereto, have been prepared
in accordance with United States generally accepted accounting principles
("GAAP") (except, in the case of unaudited statements, as permitted by Form
10-Q of the SEC) applied on a consistent basis during the periods involved
(except as may be indicated in the notes thereto) and fairly present the
consolidated financial position of the Company and its consolidated
subsidiaries as of the dates thereof and the consolidated results of their
operations and cash flows for the periods then ended (subject, in the case
of unaudited statements, to normal year-end audit adjustments). Except for
liabilities and obligations incurred in the ordinary course of business
consistent with past practice since the date of the most recent
consolidated balance sheet included in the Publicly Available Company SEC
Documents, neither the Company nor any of its subsidiaries has any
liabilities or obligations of any nature (whether accrued, absolute,
contingent or otherwise) required by GAAP to be recognized or disclosed on
a consolidated balance sheet of the Company and its consolidated
subsidiaries or in the notes thereto which are, individually or in the
aggregate, material to the business, results of operations or financial
condition of the Company and its consolidated subsidiaries taken as a
whole.
(f) Contracts. The Company has no executory agreement, contract,
arrangement or other obligation (i) with an affiliate (including with any
officer or director) of the Company (whether such executory agreement,
contract, arrangement or other obligation is oral or written) which would
be required by Rule 601 of SEC Regulation S-K to be filed as an exhibit to
an Annual Report on Form 10-K, or (ii) to sell, dispose or acquire a
"Significant Subsidiary," as such term is defined in Rule 1-02 of SEC
Regulation S-X.
(g) Absence of Certain Changes or Events. (a) Since June 30, 1998, there
has not been any change, event or circumstance which, when taken
individually or together with all other changes, events or circumstances,
has had or would have a material adverse effect on the Company, and (b)
from December 31, 1998 to the date of this Agreement, (i) each of the
Company and its subsidiaries has conducted its businesses in the ordinary
course and in a manner consistent with past practice and (ii) there has not
been (A) any change by the Company or any of its subsidiaries in its
accounting policies, practices and procedures having an overall material
adverse effect on its assets, liabilities or earnings, except as required
by GAAP, (B) any declaration, setting aside or payment of any dividend or
distribution in respect of any capital stock of the Company or any of its
subsidiaries (other than cash dividends payable by any wholly owned
subsidiary to another subsidiary or the Company), or (C) any increase in
the compensation payable or to become payable to any corporate officer or
heads of divisions of the Company or any of its subsidiaries whose annual
base compensation exceeds $500,000, except in the ordinary course of
business consistent with past practice or as required by employment
agreements in effect as of the date hereof.
(h) Litigation. There is no suit, action, investigation, audit or
proceeding pending or, to the knowledge of the Company, threatened against
the Company or any of its subsidiaries that, individually or in the
aggregate, could reasonably be expected to (i) have a material adverse
effect on the Company, (ii) impair in any material respect the ability of
the Company to perform its obligations under this Agreement or (iii)
prevent the consummation of any of the transactions contemplated by this
Agreement, nor is there any judgment, decree, injunction, rule or order of
any Governmental Entity or arbitrator outstanding against the Company or
any of its subsidiaries having, or which is reasonably likely to have, any
effect referred to in the foregoing clauses (i), (ii) or (iii).
(i) Absence of Changes in Benefit Plans. Except (i) as would not have,
in the aggregate, a material adverse effect on the Company, or (ii) as
required by applicable law, since March 1, 1999, no collective bargaining
agreement or any bonus, pension, profit sharing, deferred compensation,
incentive compensation, stock ownership, stock purchase, stock option,
phantom stock, retirement, vacation,
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severance, disability, death benefit, hospitalization, medical or other plan,
arrangement or understanding (collectively, "Benefit Plans") has been adopted
or amended by the Company or its subsidiaries which provides benefits to any
current or former employee, officer or director of the Company or any of its
subsidiaries. There exist no employment, consulting, severance, termination
or indemnification agreements, arrangements or understandings between the
Company or any of its subsidiaries and any current or former officer or
director of the Company or any of its subsidiaries as to which unsatisfied or
potential obligations of the Company exist which individually are greater
than $500,000 per year. Except as would not have, in the aggregate, a
material adverse effect on the Company and except as contemplated by this
Agreement, since March 1, 1999, neither the Company nor any of its
subsidiaries has taken any action to accelerate any rights or benefits under
any collective bargaining, bonus, profit sharing, thrift, compensation, stock
option, restricted stock, pension, retirement, deferred compensation,
employment, termination, severance or other plan, agreement, trust, fund,
policy or arrangement for the benefit of any director or officer or for the
benefit of employees generally.
(j) ERISA Compliance.
(i) The Company has made, or shall if requested make, available to
Parent true, complete and correct copies of all "employee pension benefit
plans" (as defined in Section 3(2) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA")) (sometimes referred to herein
as "Pension Plans"), "employee welfare benefit plans" (as defined in
Section 3(1) of ERISA) and all other Benefit Plans currently maintained,
or contributed to, or required to be maintained or contributed to, by the
Company or any other person or entity that, together with the Company, is
treated as a single employer under Section 414(b), (c), (m) or (o) of the
Code (each a "Company Commonly Controlled Entity"), including all
employment, termination, severance or other contracts for the benefit of
any current or former employees, officers or directors of the Company or
any of its subsidiaries as to which unsatisfied or potential obligations
of the Company which individually are greater than $500,000 per year
exist. The Company has made, or shall if requested make, available to
Parent true, complete and correct copies of (v) the most recent annual
report on Form 5500 filed with the Internal Revenue Service with respect
to each of its Benefit Plans (if any such report was required), (w) the
most recently prepared actuarial report for each such Benefit Plan (if any
such report was required), (x) the most recent summary plan description
for each such Benefit Plan for which such summary plan description is
required under ERISA, (y) the most recently received Internal Revenue
Service determination letter for each such Benefit Plan that is intended
to be qualified under Section 401(a) of the Code and (z) each trust
agreement and group annuity contract relating to any such Benefit Plan.
(ii) Except as would not have, in the aggregate, a material adverse
effect on the Company, each of the Company's and its subsidiaries' Benefit
Plans has been administered in accordance with its terms. Except as would
not have, in the aggregate, a material adverse effect on the Company, the
Company, each of its subsidiaries and all such Benefit Plans are in
compliance with applicable provisions of ERISA and the Code.
(iii) All of the Company's and its subsidiaries' Pension Plans
intended to be qualified under Section 401(a) of the Code have been the
subject of determination letters from the Internal Revenue Service to the
effect that such Pension Plans are qualified and exempt from federal
income taxes under Section 401(a) and 501(a), respectively, of the Code
and, to the knowledge of the Company, no such determination letter has
been revoked nor has revocation of such determination letter been
threatened, nor has any such Pension Plan been amended since the date of
its most recent determination letter or application therefor in any
respect that could reasonably be expected to adversely affect its
qualification or materially increase its costs.
(iv) No Pension Plan that the Company or any of its subsidiaries
maintains is subject to Title IV of ERISA.
(v) To the knowledge of the Company, none of the Company, any of its
subsidiaries, any officer of the Company or any of its subsidiaries or any
of the Company's or its subsidiaries' Benefit Plans
A-11
which are subject to ERISA, including, without limitation, its Pension
Plans, any trusts created thereunder or any trustee or administrator
thereof, has engaged in a non-exempt "prohibited transaction" (as such
term is defined in Section 406 of ERISA or Section 4975 of the Code) or
any other breach of fiduciary responsibility that could reasonably be
expected to subject the Company, or any of its subsidiaries or any officer
of the Company or any of its subsidiaries, to tax or penalty under ERISA,
the Code or other applicable law that, except as would not have, in the
aggregate, a material adverse effect on the Company, has not been
corrected. Neither any of such Benefit Plans nor any of such trusts has
been terminated, nor has there been any "reportable event" (as that term
is defined in Section 4043 of ERISA) with respect thereto, during the last
five years.
(vi) Without regard to Company Stock Options, the consummation of
the transactions contemplated by this Agreement will not result in an
increase in the amount of compensation or benefits or accelerate the
vesting or timing of payment of any benefits payable to or in respect of
any employee or former employee of the Company or any subsidiary of the
Company or the beneficiary or dependent of any such employee or former
employee.
(vii) With respect to any of the Company's or any of its
subsidiaries' Benefit Plans that is an employee welfare benefit plan, (x)
no such Benefit Plan is funded through a "welfare benefit fund," as such
term is defined in Section 419(e) of the Code, (y) each such Benefit Plan
that is a "group health plan," as such term is defined in Section
5000(b)(1) of the Code, complies in all material respects with the
applicable requirements of Section 4980B(f) of the Code and (z) each such
Benefit Plan (including any such Benefit Plan covering retirees or other
former employees) may be amended or terminated without a material adverse
effect on the Company.
(viii) Except as would not have, in the aggregate, a material
adverse effect on the Company, no Company Commonly Controlled Entity has
incurred any material liability to a Pension Plan of the Company or any of
its subsidiaries (other than for contributions not yet due).
(k) Taxes.
(i) To the Company's knowledge and except as would not have, in the
aggregate, a material adverse effect on the Company, (A) each of the
Company and its subsidiaries has timely filed all federal, state, local
and foreign tax returns and reports required to be filed by it through the
date hereof and shall timely file all such returns and reports required to
be filed on or before the Effective Time; (B) all such returns and reports
are and will be true, complete and correct in all material respects; (C)
the Company and each of its subsidiaries has paid and discharged (or the
Company has paid and discharged on such subsidiary's behalf) all taxes due
from them, other than such taxes as are being or will be contested in good
faith by appropriate proceedings and are, in the judgment of the
management of the Company, adequately reserved for on the most recent
financial statements contained in the Publicly Available Company SEC
Documents filed prior to the date of this Agreement; (D) the most recent
financial statements contained in the Company SEC Documents filed prior to
the date of this Agreement properly reflect in accordance with GAAP all
taxes payable by the Company and its subsidiaries for all taxable periods
and portions thereof through the date of such financial statements.
(ii) No claim or deficiency for any taxes has been proposed,
threatened, asserted or assessed by the Internal Revenue Service (the
"IRS") or any other taxing authority or agency against the Company, or any
of its subsidiaries which, if resolved against the Company or any of its
subsidiaries, would, individually or in the aggregate, have a material
adverse effect upon the Company. Neither the Company nor any of its
subsidiaries has waived any statute of limitations in respect of any taxes
or agreed to any extension of time with respect to a tax assessment or
deficiency.
(iii) Neither the Company nor any of its subsidiaries has taken or
agreed to take any action or has any knowledge of any fact or circumstance
that is reasonably likely to prevent the Merger from qualifying as a
reorganization within the meaning of Section 368(a) of the Code.
A-12
(iv) Neither the Company nor any of its subsidiaries has filed a
consent under Code Section 341(f) concerning collapsible corporations.
Neither the Company nor any of its subsidiaries has been a United States
real property holding corporation within the meaning of Code Section
897(c)(2). Each of the Company and its subsidiaries has disclosed on its
federal income tax returns all positions taken therein that could give
rise to a substantial understatement of federal income tax within the
meaning of Code Section 6662. Neither the Company nor any of its
subsidiaries is a party to any tax allocation or tax sharing agreement.
Neither the Company nor any of its subsidiaries has any liability for the
taxes of any person (other than any of the Company and its subsidiaries)
under Treasury Regulation Section 1.1502 -6 (or any similar provision of
state, local, or foreign law), as a transferee or successor, by contract,
or otherwise.
(v) As used in this Agreement, "taxes" shall include all federal,
state, local and foreign income, property, sales, excise and other taxes,
of any nature whatsoever (whether payable directly or by withholding),
together with any interest and penalties, additions to tax or additional
amounts imposed with respect thereto. Notwithstanding the definition of
"subsidiary" set forth in Section 8.3(g) of this Agreement, for the
purposes of this Section 3.1(k), references to the Company and each of its
subsidiaries shall include former subsidiaries of the Company for the
periods during which any such corporations were included in the
consolidated federal income tax return of the Company.
(l) Compliance with Applicable Laws.
(i) Each of the Company and its subsidiaries has in effect all
federal, state, local and foreign governmental approvals, authorizations,
certificates, filings, franchises, licenses, notices, permits and rights
("Permits") necessary for it to own, lease or operate its properties and
assets and to carry on its business as now conducted, and there has
occurred no default under any such Permit, except for the lack of Permits
and for defaults under Permits which lack or default individually or in
the aggregate would not have a material adverse effect on the Company. To
the knowledge of the Company, no Governmental Entity is considering
limiting, suspending or revoking any of the Company's or its subsidiaries'
Permits. The Company and its subsidiaries are in compliance with (and have
not violated) all applicable statutes, laws, ordinances, rules, orders and
regulations (including, without limitation, those relating to safety,
hiring, promotion or pay of employees) of any Governmental Entity, except
for noncompliance which individually or in the aggregate would not have a
material adverse effect on the Company.
(ii) To the knowledge of the Company, the Company and each of its
subsidiaries is, and has been, and each of the Company's former
subsidiaries, while subsidiaries of the Company, was, in compliance in all
material respects with all applicable Environmental Laws, except for
noncompliance which individually or in the aggregate would not have a
material adverse effect on the Company. The term "Environmental Laws"
means any federal, state, local or foreign statute, code, ordinance, rule,
regulation, policy, guideline, permit, consent, approval, license,
judgment, order, writ, decree, injunction or other authorization,
including the requirement to register underground storage tanks, relating
to: (A) emissions, discharges, releases or threatened releases of
Hazardous Material (as defined below) into the environment, including,
without limitation, into ambient air, soil, sediments, land surface or
subsurface, buildings or facilities, surface water, groundwater, publicly
owned treatment works, septic systems or land; or (B) the generation,
treatment, storage, disposal, use, handling, manufacturing, transportation
or shipment of Hazardous Material.
(iii) During the period of ownership or operation by the Company and
its subsidiaries of any of their respective current or previously owned or
leased properties, there have been no releases of Hazardous Material in,
on, under or affecting such properties or, to the knowledge of the
Company, any surrounding site, except in each case for those which
individually or in the aggregate are not reasonably likely to have a
material adverse effect on the Company. Prior to the period of ownership
or operation by the Company and its subsidiaries of any of their
respective current or previously owned or leased properties, to the
knowledge of the Company, no Hazardous Material was generated,
A-13
treated, stored, disposed of, used, handled or manufactured at, or
transported, shipped or disposed of from, such current or previously owned
or leased properties, and there were no releases of Hazardous Material in,
on, under or affecting any such property or any surrounding site, except
in each case for those which individually or in the aggregate are not
reasonably likely to have a material adverse effect on the Company. The
term "Hazardous Material" means (A) hazardous materials, contaminants,
constituents, medical wastes, hazardous or infectious wastes and hazardous
substances as those terms are defined in the following statutes and their
implementing regulations: the Hazardous Materials Transportation Act, 49
U.S.C. (S) 1801 et seq., the Resource Conservation and Recovery Act, 42
U.S.C. (S) 6901 et seq., the Comprehensive Environmental Response,
Compensation and Liability Act, as amended by the Superfund Amendments and
Reauthorization Act, 42 U.S.C. (S) 9601 et seq., the Clean Water Act, 33
U.S.C. (S) 1251 et seq. and the Clean Air Act, 42 U.S.C. (S) 7401 et seq.,
(B) petroleum, including crude oil and any fractions thereof, (C) natural
gas, synthetic gas and any mixtures thereof, (D) asbestos and/or asbestos-
containing material and (E) polychlorinated biphenyls ("PCBs") or
materials or fluids containing PCBs in excess of 50 ppm.
(m) Brokers. Except for Xxxxxxx Xxxxx & Co., Inc., the fees and expenses
of which will be paid by the Company, no broker, investment banker, financial
advisor or other person is entitled to any broker's, finder's, financial
advisor's or other similar fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by
or on behalf of the Company.
(n) Opinion of Financial Advisor. The Company has received the opinion
of Xxxxxxx Xxxxx & Co., Inc., dated the date of this Agreement, to the effect
that, as of such date, the Exchange Ratio is fair to the Company's
stockholders, other than Liberty, News Corp., Parent and their respective
affiliates, from a financial point of view, and a signed copy of such opinion
has been delivered to Parent.
(o) Voting Requirements. The Company Stockholder Approval is the only
vote of the holders of any class or series of the Company's securities
necessary to approve this Agreement and the transactions contemplated by this
Agreement.
(p) Noncompetition. The Company and its subsidiaries are not subject to
any restriction of competition with respect to their respective businesses.
(q) Intellectual Property. Except as would not have, in the aggregate, a
material adverse effect on the Company, the Company and each of its
subsidiaries owns or possesses adequate and enforceable licenses or other
rights to use all patents, trade secrets, trade names, trademarks, inventions
and processes used in and material to the business of the Company or such
subsidiary as currently conducted, and such licenses and rights will not be
affected by the consummation of the Merger. Neither the Company nor any of
its subsidiaries has received any written notice or charge of patent,
trademark or copyright infringement which asserts the rights of others with
respect to such licenses and rights which is reasonably likely to have a
material adverse effect on the Company. Except as would not have, in the
aggregate, a material adverse effect on the Company, the Company owns or
rightfully possesses (i) the source code, recorded on computer magnetic media
and in written form, for its information systems programs, including both the
information systems programs themselves and the product related
infrastructure (the "Company Software"), and (ii) all commentary,
explanations, specifications, documentation, proprietary information, test
programs and program specifications, compiler and assembler descriptions of
proprietary or third party system utilities, and descriptions of
system/program generation and programs not owned by the Company but required
for use or support, relating to the Company Software that are reasonably
necessary for the Surviving Corporation to maintain and enhance the Company
Software, and to provide a commercially standard level of service and support
to users of the Company Software without the aid of any other party and
without use of any other material.
(r) Year 2000 Compliance.
(i) The Company does not believe that the cost of required
modifications to its Company Systems to make the Company Year 2000
Compliant will have a material adverse effect on the Company.
A-14
(ii) For purposes of this Section 3.1(r), (i) "Company Systems"
shall mean all computer, hardware, software, systems, and equipment
(including embedded microcontrollers in non-computer equipment) embedded
within the current products of the Company and its subsidiaries, and/or
material to or necessary for the Company and its subsidiaries to carry on
their respective businesses as currently conducted; and (ii) "Company Year
2000 Compliant" means that Company Systems will (A) manage, accept,
process, store and output data involving dates reasonably expected to be
encountered in the foreseeable future and (B) accurately process date data
from, into and between the 20th and 21st centuries and each date during
the years 1999 and 2000.
(s) Stockholders' Agreement. News Corp. and Liberty have entered into
the Stockholders' Agreement (the "Stockholders' Agreement") with Parent and
Xxxxx X. Xxxx attached hereto as Exhibit 3.1(s), which agreement shall become
binding and enforceable effective only upon the Effective Time.
Section 3.2 Representations and Warranties of Parent and Sub.
Notwithstanding anything herein to the contrary, no representation is or shall
be considered to have been made with respect to any litigation claims or
disputes between the Company and Parent or their respective subsidiaries, the
merits of any such claim or merits of defenses related thereto, based on the
intellectual property of the Company or Parent or their respective subsidiaries.
Except as included in, or filed in connection with, the Parent SEC Documents (as
defined in Section 3.2(e)) or reports, forms and other documents filed with the
SEC by StarSight Telecast, Inc., in each case, which are Publicly Available or
on the disclosure schedule delivered by Parent to the Company prior to the
execution of this Agreement (the "Parent Disclosure Schedule"), Parent and Sub
represent and warrant to the Company as follows:
(a) Organization, Standing and Corporate Power. Parent and each of its
subsidiaries is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction in which it is incorporated and
has the requisite corporate power and authority to carry on its business as
now being conducted. Parent and each of its subsidiaries is duly qualified or
licensed to do business and is in good standing in each jurisdiction in which
the nature of its business or the ownership or leasing of its properties
makes such qualification or licensing necessary, other than in such
jurisdictions where the failure to be so qualified or licensed (individually
or in the aggregate) would not have a material adverse effect on Parent.
(b) Subsidiaries. The Parent Disclosure Schedule lists each subsidiary
of the Parent and its jurisdiction of incorporation or organization. All the
outstanding shares of capital stock, membership interests and partnership
interests, as applicable, of each such subsidiary that is a corporation have
been validly issued and are fully paid and nonassessable. The shares of
capital stock of each such subsidiary that is owned by the Parent, by another
subsidiary of the Parent or by the Parent and another such subsidiary, are
owned free and clear of all liens. Except for (i) the capital stock of its
subsidiaries that are corporations, and (ii) except for the membership
interests or partnership interests of its subsidiaries that are limited
liability companies or partnerships, and (iii) except for investments in
marketable securities, Parent does not own, directly or indirectly, any
capital stock or other ownership interest in any corporation, partnership,
joint venture or other entity.
(c) Capital Structure. The authorized capital stock of Parent consists
of 500,000,000 shares of Parent Common Stock, par value $.01 per share, and
50,000,000 preference shares, par value $.01 per share ("Parent Preference
Shares") of which 10,000,000 shares have been designated Series A Junior
Participating Preference Shares. At the close of business on September 30,
1999, (i) 100,354,000 shares of Parent Common Stock and no shares of Parent
Preference Shares were issued and outstanding, (ii) 1,395,000 shares of
Parent Common Stock were held by Parent in its treasury, (iii) 25,372,000
shares of Parent Common Stock were reserved for issuance upon exercise of
outstanding employee stock options ("Parent Stock Options") to purchase
shares of Parent Common Stock under the Parent Stock Incentive Plan (as
defined below), and (iv) 7,695,000 shares of the Parent Common Stock were
reserved for issuance upon exercise of Parent Stock Options available for
grant under the Parent Stock Incentive Plan. Except as set forth above, at
the close of business on September 30, 1999, no shares of capital stock or
other voting
A-15
securities of the Parent were issued, reserved for issuance or outstanding.
All options to purchase shares of Parent Common Stock were granted under the
Gemstar International Group Limited 1994 Stock Incentive Plan (the "Parent
Stock Incentive Plan"). There are no outstanding stock appreciation rights of
Parent and no outstanding limited stock appreciation rights or other rights
to redeem for cash options or warrants of Parent. All outstanding shares of
capital stock of Parent are, and all shares which may be issued upon the
exercise of stock options will be, and all shares which may be issued
pursuant to this Agreement will be, when issued, duly authorized, validly
issued, fully paid and nonassessable and not subject to preemptive rights.
There are no bonds, debentures, notes or other indebtedness of Parent having
the right to vote (or convertible into, or exchangeable for, securities
having the right to vote) on any matters on which stockholders of Parent may
vote. Except as set forth above and except for the Parent Option Agreement,
as of the date of this Agreement, there are no outstanding securities,
options, warrants, calls, rights, commitments, agreements, arrangements or
undertakings of any kind to which Parent or any of its subsidiaries is a
party or by which any of them is bound obligating Parent or any of its
subsidiaries to issue, deliver or sell, or cause to be issued, delivered or
sold, additional shares of capital stock or other voting securities of Parent
or of any of its subsidiaries or obligating Parent or any of its subsidiaries
to issue, grant, extend or enter into any such security, option, warrant,
call, right, commitment, agreement, arrangement or undertaking. There are no
outstanding contractual obligations of Parent or any of its subsidiaries to
repurchase, redeem or otherwise acquire any shares of capital stock (or
options to acquire any such shares) of Parent or any of its subsidiaries.
Except for revenue arrangements in license agreements entered into in the
ordinary course of business, there are no agreements, arrangements or
commitments of any character (contingent or otherwise) pursuant to which any
person is or may be entitled to receive any payment based on the revenues,
earnings or financial performance of Parent or any of its subsidiaries or
assets or calculated in accordance therewith (other than ordinary course
payments or commissions to sales representatives of Parent based upon
revenues generated by them without augmentation as a result of the
transactions contemplated hereby) or to cause Parent or any of its
subsidiaries to file a registration statement under the Securities Act, or
which otherwise relate to the registration of any securities of Parent. As of
the date of this Agreement, the authorized capital stock of Sub consists of
1,000 shares of common stock, par value $.01 per share, of which 100 shares
have been validly issued, are fully paid and nonassessable and are owned by
Parent free and clear of any liens. Neither Parent nor any of its
subsidiaries owns of record or beneficially any shares of Company Common
Stock.
(d) Authority; Noncontravention. Parent and Sub have the requisite
corporate power and authority to enter into this Agreement and the Parent
Ancillary Agreements (as defined in Section 8.3(e)) and, subject to the
Parent Stockholder Approvals, to consummate the transactions contemplated by
this Agreement and the Parent Ancillary Agreements, including to effect the
Domestication. The execution and delivery of this Agreement and the Parent
Ancillary Agreements and the consummation of the transactions contemplated by
this Agreement and the Parent Ancillary Agreements, including effecting the
Domestication, have been duly authorized by all necessary corporate action on
the part of Parent and Sub, subject to the Parent Stockholder Approvals. This
Agreement and the Parent Ancillary Agreements have been duly executed and
delivered by Parent and Sub and constitute a valid and binding obligation of
each such party, enforceable against each such party in accordance with its
terms, subject to (i) bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting or relating to creditors rights generally and
(ii) the availability of injunctive relief and other equitable remedies. The
execution and delivery of this Agreement and the Parent Ancillary Agreements
does not, and the consummation of the transactions contemplated by this
Agreement and the Parent Ancillary Agreements and compliance with the
provisions of this Agreement and the Parent Ancillary Agreements will not,
conflict with, or result in any violation of, or default (with or without
notice or lapse of time, or both) under, or give rise to a right of
termination, cancellation or acceleration of any obligation or loss of a
material benefit under, or result in the creation of any lien upon any of the
properties or assets of Parent or any of its subsidiaries under, (i) Parent's
amended and restated memorandum of association or articles of association or
Sub's articles of incorporation or by-laws or the comparable charter or
organizational documents of any other subsidiary of
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Parent, (ii) the grant of rights to Parent or its applicable subsidiary of
the Xxxxxx '713 and Xxxxxx '578 Patents, (iii) subject to the governmental
filings and other matters referred to in the following sentence, any loan or
credit agreement, note, bond, mortgage, indenture, lease or other agreement,
instrument, permit, concession, franchise or license applicable to Parent or
any of its subsidiaries or their respective properties or assets or (iv)
subject to the governmental filings and other matters referred to in the
following sentence, any judgment, order, decree, statute, law, ordinance,
rule or regulation applicable to Parent or any of its subsidiaries or their
respective properties or assets, other than, in the case of clauses (iii) or
(iv), any such conflicts violations, defaults, rights or liens that
individually or in the aggregate would not (x) have a material adverse effect
on Parent, (y) impair in any material respect the ability of Parent and Sub
to perform their respective obligations under this Agreement and the Parent
Ancillary Agreements or (z) prevent or materially delay the consummation of
any of the transactions contemplated by this Agreement and the Parent
Ancillary Agreements. No consent, approval, order or authorization of, or
registration, declaration or filing with any Governmental Entity is required
by Parent or any of its subsidiaries in connection with the execution and
delivery of this Agreement and the Parent Ancillary Agreements or the
consummation by Parent or Sub, as the case may be, of any of the transactions
contemplated by this Agreement and the Parent Ancillary Agreements, except
for (i) the filing with the Specified Agencies of a premerger notification
and report form under the HSR Act, (ii) the filing with the SEC of (x) the
Form S-4 (as defined in Section 5.1 hereof) and (y) such reports under
Sections 13(a), 13(d) and 16(a) of the Exchange Act as may be required in
connection with this Agreement and the Parent Ancillary Agreements and the
transactions contemplated by this Agreement and the Parent Ancillary
Agreements, (iii) the filing of the Certificate of Merger with the Delaware
Secretary of State and appropriate documents with the relevant authorities of
other states in which the Company is qualified to do business, (iv) the
filing of the Certificate of Domestication and Certificate of Incorporation
of Parent with the Delaware Secretary of State, (v) filings required under
the laws of the British Virgin Islands in connection with the Domestication,
(vi) any required filings with the FCC or the United States Committee of
Foreign Investments pursuant to Exxon-Xxxxxx, and (vii) such other consents,
approvals, orders, authorizations, registrations, declarations and filings,
including under (x) the laws of any foreign country in which the Company or
any of its subsidiaries conducts any business or owns any property or assets
or (y) the "takeover" or "blue sky" laws of various states, the failure of
which to be obtained or made would not, individually or in the aggregate,
have a material adverse effect on Parent or prevent or materially delay the
consummation of any of the transactions contemplated by this Agreement and
the Parent Ancillary Agreements.
(e) SEC Documents; Financial Statements. Parent has filed with the SEC
all required reports and forms and other documents (the "Parent SEC
Documents"). As of their respective dates, except as subsequently amended in
a Publicly Available Parent SEC Document, the Parent SEC Documents complied
in all material respects with the requirements of the Securities Act or the
Exchange Act, as the case may be, and the rules and regulations of the SEC
promulgated thereunder applicable to such Parent SEC Documents, and, to
Parent's knowledge, none of the Parent SEC Documents contained any untrue
statement of a material fact or omitted to state a material fact required to
be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading. The
financial statements of Parent included in the Parent SEC Documents comply as
to form in all material respects with applicable accounting requirements and
the published rules and regulations of the SEC with respect thereto, have
been prepared in accordance with GAAP (except, in the case of unaudited
statements, as permitted by Form 6-K and Form 10-Q of the SEC) applied on a
consistent basis during the periods involved (except as may be indicated in
the notes thereto) and fairly present the consolidated financial position of
Parent and its consolidated subsidiaries as of the dates thereof and the
consolidated results of their operations and cash flows for the periods then
ended (subject, in the case of unaudited statements, to normal year-end
adjustments). Except for liabilities and obligations incurred in the ordinary
course of business consistent with past practice since the date of the most
recent consolidated balance sheet included in the Publicly Available Parent
SEC Documents, neither Parent nor any of its subsidiaries has any material
liabilities or obligations of any nature (whether accrued, absolute,
contingent
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or otherwise) required by GAAP to be recognized or disclosed on a
consolidated balance sheet of Parent and its consolidated subsidiaries or in
the notes thereto which are, individually or in the aggregate, material to
the business, results of operations or financial condition of the Parent and
its consolidated subsidiaries taken as a whole.
(f) Contracts. Parent has no executory agreement, contract, arrangement
or other obligation (i) with an affiliate (including with any officer or
director) of Parent (whether such executory agreement, contract, arrangement
or other obligation is oral or written) which would be required by Rule 601
of SEC Regulation S-K to be filed as an exhibit to an Annual Report on Form
10-K, or (ii) to sell, dispose or acquire a "Significant Subsidiary," as such
term is defined in Rule 1-02 of SEC Regulation S-X.
(g) Absence of Certain Changes or Events. (a) Since June 30, 1998, there
has not been any change, event or circumstance which, when taken individually
or together with all other changes, events or circumstances, has had or would
have a material adverse effect on Parent or Sub, and (b) from June 30, 1998
to the date of this Agreement, (i) each of the Parent and its subsidiaries
has conducted its businesses in the ordinary course and in a manner
consistent with past practice and (ii) there has not been (A) any change by
Parent or any of its subsidiaries in its accounting policies, practices and
procedures having an overall material adverse effect on its assets,
liabilities or earnings, except as required by GAAP, (B) any declaration,
setting aside or payment of any dividend or distribution in respect of any
capital stock of Parent or any of its subsidiaries (other than cash dividends
payable by any wholly owned subsidiary to another subsidiary or Parent), or
(C) any increase in the compensation payable or to become payable to any
corporate officer or heads of divisions of Parent or any of its subsidiaries
whose annual base compensation exceeds $500,000, except in the ordinary
course of business consistent with past practice or as required by employment
agreements in effect as of the date hereof.
(h) Litigation. There is no suit, action, investigation, audit or
proceeding pending, or to the knowledge of Parent, threatened against Parent
or any of its subsidiaries that, individually or in the aggregate, could
reasonably be expected to (i) have a material adverse effect on Parent, (ii)
impair in any material respect the ability of Parent to perform its
obligations under this Agreement or (iii) prevent the consummation of any of
the transactions contemplated by this Agreement, nor is there any judgment,
decree, injunction, rule or order of any Governmental Entity or arbitrator
outstanding against Parent or any of its subsidiaries having, or which is
reasonably likely to have any effect referred to in the foregoing clauses
(i), (ii) or (iii).
(i) Absence of Changes in Benefit Plans. Except (i) as would not have,
in the aggregate, a material adverse effect on Parent or any of its
subsidiaries, or (ii) as required by applicable law, since March 1, 1999, no
collective bargaining agreement or any Benefit Plans has been adopted or
amended by the Parent or its subsidiaries which provides benefits to any
current or former employee, officer or director of Parent or any of its
subsidiaries. There exist no employment, consulting, severance, termination
or indemnification agreements, arrangements or understandings between Parent
or any of its subsidiaries and any current or former officer or director of
Parent or any of its subsidiaries as to which unsatisfied or potential
obligations of Parent exist which individually are greater than $500,000 per
year. Except as would not have, in the aggregate, a material adverse effect
on Parent or any of its subsidiaries and except as contemplated by this
Agreement, since March 1, 1999, neither Parent nor any of its subsidiaries
has taken any action to accelerate any rights or benefits under any
collective bargaining, bonus, profit sharing, thrift, compensation, stock
option, restricted stock, pension, retirement, deferred compensation,
employment, termination, severance or other plan, agreement, trust, fund,
policy or arrangement for the benefit of any director or officer or for the
benefit of employees generally.
(j) ERISA Compliance.
(i) Parent has made, or shall if requested make, available to the
Company true, complete and correct copies of all "employment pension
benefit plans" (as defined in Section 3(2) of ERISA, "employee welfare
benefit plans" (as defined in Section 3(1) of ERISA) and all other Benefit
Plans currently maintained, or contributed to, or required to be
maintained or contributed to, by Parent or
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any other person or entity that, together with Parent, is treated as a
single employer under Section 414(b), (c), (m), or (o) of the Code (each a
"Parent Commonly Controlled Entity"), including all employment,
termination, severance or other contracts for the benefit of any current
or former employees, officers or directors of Parent or any of its
subsidiaries as to which unsatisfied or potential obligations of Parent
which individually are greater than $500,000 per year exist. Parent has
made, or shall if requested make, available to the Company true, complete
and correct copies of (v) the most recent annual report on Form 5500 filed
with the Internal Revenue Service with respect to each of its Benefit
Plans (if any such report was required), (w) the most recently prepared
actuarial report for each such Benefit Plan (if any such report was
required), (x) the most recent summary plan description for each such
Benefit Plan for which such summary plan description is required under
ERISA, (y) the most recently received Internal Revenue Service
determination letter for each such Benefit Plan that is intended to be
qualified under Section 401(a) of the Code and (z) each trust agreement
and group annuity contract relating to any such Benefit Plan.
(ii) Except as would not have, in the aggregate, a material adverse
effect on Parent, each of Parent's and its subsidiaries' Benefit Plans has
been administered in accordance with its terms. Except as would not have,
in the aggregate, a material adverse effect on Parent or any of its
subsidiaries, Parent, each of its subsidiaries and all such Benefit Plans
are in compliance with applicable provisions of ERISA and the Code.
(iii) All of Parent's and its subsidiaries' Pension Plans intended
to be qualified under Section 401(a) of the Code have been the subject of
determination letters from the Internal Revenue Service to the effect that
such Pension Plans are qualified and exempt from federal income taxes
under Section 401(a) and 501(a), respectively, of the Code and, to the
knowledge of Parent and Sub, no such determination letter has been revoked
nor has revocation of such determination letter been threatened, nor has
any such Pension Plan been amended since the date of its most recent
determination letter or application therefor in any respect that could
reasonably be expected to adversely affect its qualification or materially
increase its costs.
(iv) No Pension Plan that Parent or any of its subsidiaries
maintains is subject to Title IV of ERISA.
(v) To the knowledge of Parent, none of Parent, any of its
subsidiaries, any officer of Parent or any of its subsidiaries or any of
Parent's or its subsidiaries' Benefit Plans which are subject to ERISA,
including, without limitation, its Pension Plans, any trusts created
thereunder or any trustee or administrator thereof, has engaged in a non-
exempt "prohibited transaction" (as such term is defined in Section 406 of
ERISA or Section 4975 of the Code) or any other breach of fiduciary
responsibility that could reasonably be expected to subject Parent, or any
of its subsidiaries or any officer of Parent or any of its subsidiaries,
to tax or penalty under ERISA, the Code or other applicable law that,
except as would not have, in the aggregate, a material adverse effect on
Parent or any of its subsidiaries, has not been corrected. Neither any of
such Benefit Plans nor any of such trusts has been terminated, nor has
there been any "reportable event" (as that term is defined in Section 4043
of ERISA) with respect thereto, during the last five years.
(vi) The consummation of the transactions contemplated by this
Agreement will not result in an increase in the amount of compensation or
benefits or accelerate the vesting or timing of payment of any benefits
payable to or in respect of any employee or former employee of Parent or
any subsidiary of Parent or the beneficiary or dependent of any such
employee or former employee.
(vii) With respect to any of Parent's or any of its subsidiaries'
Benefit Plans that is an employee welfare benefit plan, (x) no such
Benefit Plan is funded through a "welfare benefit fund," as such term is
defined in Section 419(e) of the Code, (y) each such Benefit Plan that is
a "group health plan," as such term is defined in Section 5000(b)(1) of
the Code, complies in all material respects with the applicable
requirements of Section 4980B(f) of the Code and (z) each such Benefit
Plan (including any such Benefit Plan covering retirees or other former
employees) may be amended or terminated without a material adverse effect
on Parent.
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(viii) Except as would not have, in the aggregate, a material
adverse effect on Parent or any of its subsidiaries, no Parent Commonly
Controlled Entity has incurred any material liability to a Pension Plan of
Parent or any of its subsidiaries (other than for contributions not yet
due).
(k) Taxes.
(i) To Parent's knowledge and except as would not have, in the
aggregate, a material adverse effect on Parent or any of its subsidiaries,
(A) each of Parent and its subsidiaries has timely filed all federal,
state, local and foreign tax returns and reports required to be filed by
it through the date hereof and shall timely file all such returns and
reports required to be filed on or before the Effective Time; (B) all such
returns and reports are and will be true, complete and correct in all
material respects; (C) Parent and each of its subsidiaries has paid and
discharged (or Parent has paid and discharged on such subsidiary's behalf)
all taxes due from them, other than such taxes as are being or will be
contested in good faith by appropriate proceedings and are, in the
judgment of the management of Parent, adequately reserved for on the most
recent financial statements contained in the Publicly Available Parent SEC
Documents filed prior to the date of this Agreement; (D) the most recent
financial statements contained in the Parent SEC Documents filed prior to
the date of this Agreement reflect an adequate reserve in accordance with
GAAP for all taxes payable by Parent and its subsidiaries for all taxable
periods and portions thereof through the date of such financial
statements.
(ii) No claim or deficiency for any taxes has been proposed,
threatened, asserted or assessed by the IRS or any other taxing authority
or agency against Parent or any of its subsidiaries which, if resolved
against Parent or any of its subsidiaries, would, individually or in the
aggregate, have a material adverse effect on Parent. Except in connection
with the tax audit disclosed in Publicly Available Parent SEC Documents
filed prior to the date of this Agreement, neither the Parent nor any of
its subsidiaries has waived any statute of limitations in respect of any
taxes or agreed to any extension of time with respect to a tax assessment
or deficiency.
(iii) Neither Parent nor any of its subsidiaries has taken or agreed
to take any action or has any knowledge of any fact or circumstance that
is reasonably likely to prevent the Merger from qualifying as a
reorganization within the meaning of Section 368(a) of the Code.
(iv) Neither Parent nor any of its subsidiaries has filed a consent
under Code Section 341(f) concerning collapsible corporations. Neither
Parent nor any of its subsidiaries has been a United States real property
holding corporation within the meaning of Code Section 897(c)(2). Each of
Parent and its subsidiaries has disclosed on its federal income tax
returns all positions taken therein that could give rise to a substantial
understatement of federal income tax within the meaning of Code Section
6662. Neither Parent nor any of its subsidiaries is a party to any tax
allocation or tax sharing agreement. Neither Parent nor any of its
subsidiaries has any liability for the taxes of any person (other than any
of Parent and its subsidiaries) under Treasury Regulation Section 1.1502-6
(or any similar provision of state, local, or foreign law), as a
transferee or successor, by contract, or otherwise.
(l) Compliance with Applicable Laws.
(i) Each of Parent and its subsidiaries has in effect all Permits
necessary for it to own, lease or operate its properties and assets and to
carry on its business as now conducted, and there has occurred no default
under any such Permit, except for the lack of Permits and for defaults
under Permits which lack or default individually or in the aggregate would
not have a material adverse effect on Parent. To the knowledge of Parent,
no Governmental Entity is considering limiting, suspending or revoking any
of the Parent's or its subsidiaries' Permits. Parent and its subsidiaries
are in compliance with (and have not violated) all applicable statutes,
laws, ordinances, rules, orders and regulations (including, without
limitation, those relating to safety, hiring, promotion or pay of
employees) of any Governmental Entity, except for noncompliance which
individually or in the aggregate would not have a material adverse effect
on Parent.
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(ii) To the knowledge of Parent, Parent and each of its subsidiaries
is, and has been, and each of Parent's former subsidiaries, while
subsidiaries of Parent, was, in compliance in all material respects with
all applicable Environmental Laws, except for noncompliance which
individually or in the aggregate would not have a material adverse effect
on Parent.
(iii) During the period of ownership or operation by Parent and its
subsidiaries of any of their respective current or previously owned or
leased properties, there have been no releases of Hazardous Material in,
on, under or affecting such properties or, to the knowledge of Parent, any
surrounding site, except in each case for those which individually or in
the aggregate are not reasonably likely to have a material adverse effect
on Parent. Prior to the period of ownership or operation by Parent and its
subsidiaries of any of their respective current or previously owned or
leased properties, to the knowledge of Parent, no Hazardous Material was
generated, treated, stored, disposed of, used, handled or manufactured at,
or transported, shipped or disposed of from, such current or previously
owned or leased properties, and there were no releases of Hazardous
Material in, on, under or affecting any such property or any surrounding
site, except in each case for those which individually or in the aggregate
are not reasonably likely to have a material adverse effect on Parent.
(m) Brokers. Except for Lazard Freres & Co. LLC, the fees and expenses
of which will be paid by Parent, no broker, investment banker, financial
advisor or other person is entitled to any broker's, finder's, financial
advisor's or other similar fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by
or on behalf of Parent or Sub.
(n) Opinion of Financial Advisor. Parent has received the opinion of
Lazard Freres & Co. LLC, dated the date of this Agreement, to the effect
that, as of such date, the Exchange Ratio is fair to Parent from a financial
point of view, and a signed copy of such opinion has been delivered to the
Company.
(o) Voting Requirements. The Parent Stockholder Approvals are the only
votes of the holders of any class or series of Parent's securities necessary
to approve this Agreement and the transactions contemplated by this
Agreement.
(p) Noncompetition. Parent and its subsidiaries are not subject to any
restriction of competition with respect to their respective businesses.
(q) Intellectual Property. Except as would not have, in the aggregate, a
material adverse effect on Parent, Parent and each of its subsidiaries owns
or possesses adequate and enforceable licenses or other rights to use all
patents, trade secrets, trade names, trademarks, inventions and processes
used in and material to the business of Parent or such subsidiary as
currently conducted, and such licenses and rights will not be affected by the
consummation of the Merger. Neither Parent nor any of its subsidiaries has
received any written notice or charge of patent, trademark or copyright
infringement which asserts the rights of others with respect to such licenses
and rights which is reasonably likely to have a material adverse effect on
the Parent. Except as would not have, in the aggregate, a material adverse
effect on Parent, Parent owns or rightfully possesses (i) the source code,
recorded on computer magnetic media and in written form, for its information
systems programs, including both the information systems programs themselves
and the product related infrastructure (the "Parent Software") and (ii) all
commentary, explanations, specifications, documentation, proprietary
information, test programs and program specifications, compiler and assembler
descriptions of proprietary or third party system utilities, and descriptions
of system/program generation and programs not owned by Parent but required
for use or support, relating to the Parent Software that are reasonably
necessary for the Parent to maintain and enhance the Parent Software, and to
provide a commercially standard level of service and support to users of the
Parent Software without the aid of any other party and without use of any
other material.
(r) Year 2000 Compliance.
(i) Parent does not believe that the cost of required modifications
to its Parent Systems to make the Parent Year 2000 Compliant will have a
material adverse effect on the Parent.
A-21
(ii) For purposes of this Section 3.2(r), (i) "Parent Systems" shall
mean all computer, hardware, software, systems, and equipment (including
embedded microcontrollers in non-computer equipment) embedded within the
current products of Parent and its subsidiaries, and/or material to or
necessary for Parent and its subsidiaries to carry on their respective
businesses as currently conducted; and (ii) "Parent Year 2000 Compliant"
means that Parent Systems will (A) manage, accept, process, store and
output data involving dates reasonably expected to be encountered in the
foreseeable future and (B) accurately process date data from, into and
between the 20th and 21st centuries and each date during the years 1999
and 2000.
(s) Interim Operations of Sub.
(i) Sub was formed solely for the purpose of engaging in the
transactions contemplated hereby, has engaged in no other business
activities and has conducted its operations only as contemplated hereby.
(ii) As of the date hereof and the Effective Time, except for
obligations or liabilities incurred in connection with its incorporation
or organization and the transactions contemplated by this Agreement, Sub
has not and will not have incurred, directly or indirectly, through any
subsidiary, any obligations or liabilities or engaged in any business
activities of any type or kind whatsoever or entered into any agreements
or arrangements with any person.
(t) Stockholders' Agreement. Parent and Xxxxx X. Xxxx have entered into
the Stockholders' Agreement attached hereto as Exhibit 3.1(s), which
agreement shall become binding and effective only upon the Effective Time.
(u) Xxxx Amendment. Xxxxx X. Xxxx, Parent and Gemstar Development
Corporation ("GDC") have entered into the amendment (the "Xxxx Amendment")
attached hereto as Exhibit 3.2(u) to the Employment Agreement, dated January
7, 1998, by and among Xxxxx X. Xxxx, Parent and GDC (the "Xxxx Employment
Agreement"), which amendment shall become effective only upon the Effective
Time.
ARTICLE IV
Covenants Relating to Conduct of Business
Section 4.1 Conduct of Business.
(a) Conduct of Business by the Company. During the period from the date of
this Agreement and continuing until the earlier of the termination of this
Agreement pursuant to its terms or the Effective Time, the Company shall, and
shall cause its subsidiaries to, use all reasonable efforts to preserve intact
their current business organizations, keep available the services of their
current officers and employees and preserve their relationships with customers,
suppliers and others having business dealings with them. Between the date of
this Agreement and the Effective Time or until the earlier termination of this
Agreement pursuant to its terms, except (1) as contemplated by this Agreement,
(2) as set forth in Section 4.1(a) of the Company Disclosure Schedule, or (3)
with the prior written consent of Parent (which consent shall not be
unreasonably withheld or delayed), the Company shall not, and shall not permit
any of its subsidiaries to:
(i) (A) declare, set aside or pay (whether in cash, stock, property or
otherwise) any dividends on, or make any other distributions in respect of,
any of its capital stock, other than dividends and distributions by any
direct or indirect wholly owned subsidiary of the Company to its parent, (B)
split, combine or reclassify any of its capital stock or issue or authorize
the issuance of any other securities in respect of, in lieu of or in
substitution for shares of its capital stock or (C) purchase, redeem or
otherwise acquire any shares of capital stock of the Company or any of its
subsidiaries or any other securities thereof or any rights, warrants or
options to acquire any such shares or other securities, provided, however,
that with respect to clause (C) only, the Company may take such actions in an
aggregate amount not to exceed $50
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million in addition to any such actions taken as required by the proviso in
Section 4.1(a)(ii)(E) to offset issuances of capital stock in an acquisition
permitted under Section 4.1(a)(iv) or as may be necessary to satisfy the
condition set forth in Section 6.2(d);
(ii) (x) issue, deliver, sell, award, pledge, dispose of or otherwise
encumber or authorize or propose the issuance, delivery, grant, sale, award,
pledge or other encumbrance (including limitations in voting rights) or
authorization of, any shares of its capital stock, any voting securities or
any securities convertible into, or any rights, warrants or options to
acquire, any such shares, voting securities or convertible securities, (y)
amend or otherwise modify the terms of any such rights, warrants or options
(except as expressly contemplated by this Agreement) or (z) accelerate the
vesting of any of the Company Stock Options except for Company Stock Options
granted on or before January 1, 1999 in each case other than (A) the issuance
of the Company Common Stock upon the exercise of Company Stock Options
outstanding under the Company Stock Option Plans on the date of this
Agreement in accordance with their present terms or in accordance with the
present terms of any employment agreements existing on the date of this
Agreement, (B) the grant of stock options to employees and directors to
purchase up to 1,771,376 shares of Company Common Stock pursuant to the
Company Stock Option Plans as in effect on the date of this Agreement (as the
same may be amended to increase the number of shares of Company Common Stock
which may be the subject of awards thereunder), and the issuance of Company
Common Stock upon the exercise thereof, (C) the grant of stock options to
employees to purchase up to 50,000 shares of Company Common Stock pursuant to
the TV Guide, Inc. Equity Incentive Plan as in effect on the date of this
Agreement (as the same may be amended to increase the number of shares of
Company Common Stock which may be the subject of awards thereunder);
provided, however, that no single employee may be granted options to purchase
more than 10,000 shares of Company Common Stock pursuant to this clause (C),
(D) the grant of stock options (with the prior consent of Parent, which
consent shall not be unreasonably withheld) to new employees of the Company
hired after the date hereof to purchase up to 200,000 shares of Company
Common Stock pursuant to the TV Guide, Inc. Equity Incentive Plan as in
effect on the date of this Agreement (as the same may be amended to increase
the number of shares of Company Common Stock which may be the subject of
awards thereunder), and (E) the issuance of Company Common Stock in
connection with a transaction not prohibited by Section 4.1(a)(iv); provided,
however, that stock issuances in connection with a transaction permitted
under Section 4.1(a)(iv) hereof may not exceed the number of shares of
Company Common Stock purchased by the Company after the date hereof;
(iii) amend its certificate of incorporation, bylaws or other
comparable charter or organizational documents;
(iv) acquire or agree to acquire (for cash or shares of stock or
otherwise) by merging or consolidating with, or by purchasing a substantial
portion of the assets of, or by any other manner, any business or any
corporation, partnership, joint venture, association or other business
organization or division thereof; provided, however, that the Company and its
subsidiaries may enter into such transactions (in addition to those listed on
Schedule 4.1(a)), other than with an affiliate, if the purchase price and
required capital contributions therefor (whether consisting of cash or
Company Common Stock or a combination of both) do not exceed, in the
aggregate, $200 million (the "Company Acquisition Basket"), and if such
transactions would not be reasonably likely to prevent or materially delay
the consummation of the Merger;
(v) mortgage or otherwise encumber or subject to any lien (a non-
exclusive license shall not be considered a mortgage, encumbrance or lien),
or sell, lease, exchange or otherwise dispose of any of, its properties or
assets, except for sales of its properties or assets in the ordinary course
of business consistent with past practice or other sales that, exclusive of
the transactions listed on Schedule 4.1(a) of the Company Disclosure
Schedule, do not exceed in the aggregate, $50 million;
(vi) dispose of, pledge or encumber any of the Company's or its
subsidiaries' intellectual property, except through non-exclusive license
agreements;
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(vii) except in the ordinary course of business, (A) increase the rate
or terms of compensation payable or to become payable generally to any of the
Company's or any of its subsidiaries' directors, executive officers, or
employees other than usual and customary salary increases to non-management
employees, (B) pay or agree to pay any pension, retirement allowance or other
employee benefit not provided for by any existing Pension Plan, Benefit Plan
or employment agreement described in the Publicly Available Company SEC
Documents, (C) commit itself to any additional pension, profit sharing,
bonus, incentive, deferred compensation, stock purchase, stock option, stock
appreciation right, group insurance, severance pay, continuation pay,
termination pay, retirement or other employee benefit plan, agreement or
arrangement, or increase the rate or terms of any employee plan or benefit
arrangement, (D) enter into any employment agreement with or for the benefit
of any person or (E) increase the rate of compensation under or otherwise
change the terms of or renew any existing employment agreement; provided,
however, that nothing in this clause (vii) shall (x) preclude payments under
the terms of the existing incentive compensation plans of the Company in
accordance with past practice or (y) preclude the Company from extending the
term of any employment agreement of any senior officer (other than Xxxxx
Xxxxxx and Xxx Xxxxxx) for up to two years or (z) preclude the Company from
adjusting the base compensation with respect to any senior officer (other
than Xxxxx Xxxxxx and Xxx Xxxxxx) by not more than 15%;
(viii) change its fiscal year;
(ix) (A) incur any indebtedness for borrowed money or guarantee any such
indebtedness of another person, issue or sell any debt securities or warrants
or other rights to acquire any debt securities of the Company or any of its
subsidiaries, guarantee any debt securities of another person, enter into any
"keep well" or other agreement to maintain any financial statement condition
of another person or enter into any arrangement having the economic effect of
any of the foregoing, except for (x) indebtedness incurred to effect a
transaction disclosed on Schedule 4.1(a) of the Company Disclosure Schedule,
(y) indebtedness incurred or assumed in connection with one or more
acquisition transactions permitted under Section 4.1(a)(iv), provided that
indebtedness assumed in connection with any such transaction (as opposed to
indebtedness incurred to effect any such transaction which will be counted
solely against the limitations of Section 4.1(a)(iv)) shall not exceed the
amount that would otherwise be permitted to be incurred pursuant to clause
(z) below plus any remaining balance in the Company Acquisition Basket, and
(z) indebtedness which when added to existing indebtedness of the Company and
its subsidiaries (other than indebtedness incurred pursuant to clause (x) and
indebtedness incurred or assumed pursuant to clause (y) to the extent that
such indebtedness reduces the available amount in the Company Acquisition
Basket) does not exceed in the aggregate $650 million, or (B) other than in
the ordinary course of business consistent with past practice and within the
limits specified in Section 4.1(a)(iv) or as set forth on Schedule 4.1(a),
make any loans, advances or capital contributions to, or investments in, any
other person, other than to the Company or any direct or indirect wholly
owned subsidiary of the Company;
(x) make or agree to make any new capital expenditures (exclusive of
expenditures set forth on Schedule 4.1(a)) for tangible physical assets which
in the aggregate exceed $50 million;
(xi) purchase or acquire, or permit or cause any of its subsidiaries to
purchase or acquire, beneficial or record ownership of any shares of Parent
Common Stock;
(xii) except in the ordinary course of business consistent with past
practice, modify, amend, renew, fail to renew or terminate any material
contract or agreement to which the Company or any subsidiary is a party or
waive, release or assign any material rights or claims; or
(xiii) authorize any of, or commit or agree to take any of, the
foregoing actions.
(b) Conduct of Business by Parent. During the period from the date of this
Agreement and continuing until the earlier of the termination of this Agreement
pursuant to its terms or the Effective Time, Parent shall, and shall cause its
subsidiaries to, use all reasonable efforts to preserve intact their current
business organizations, keep available the services of their current officers
and employees and preserve their relationships with customers, suppliers and
others having business dealings with them. Between the date of this
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Agreement and the Effective Time or until the earlier termination of this
Agreement pursuant to its terms, except (1) as contemplated by this Agreement,
(2) as set forth in Section 4.1(b) of the Parent Disclosure Schedule, or (3)
with the prior written consent of the Company, Parent shall not, and shall not
permit any of its subsidiaries to:
(i) (A) declare, set aside or pay (whether in cash, stock, property or
otherwise) any dividends on, or make any other distributions in respect of,
any of its capital stock, other than dividends and distributions by any
direct or indirect wholly owned subsidiary of Parent to its parent, (B)
split, combine or reclassify any of its capital stock or issue or authorize
the issuance of any other securities in respect of, in lieu of or in
substitution for shares of its capital stock or (C) purchase, redeem or
otherwise acquire any shares of capital stock of Parent or any of its
subsidiaries or any other securities thereof or any rights, warrants or
options to acquire any such shares or other securities; provided, however,
that with respect to clause (C) only, Parent may take such actions in an
aggregate amount not to exceed $50 million in addition to any such actions
taken as required by the proviso in Section 4.1(b)(ii)(C) to offset issuances
of capital stock in an acquisition permitted under Section 4.1(b)(iv);
(ii) (x) issue, deliver, sell, award, pledge, dispose of or otherwise
encumber or authorize or propose the issuance, delivery, grant, sale, award,
pledge or other encumbrance (including limitations in voting rights) or
authorization of, any shares of its capital stock, any voting securities or
any securities convertible into, or any rights, warrants or options to
acquire, any such shares, voting securities or convertible securities, (y)
amend or otherwise modify the terms of any such rights, warrants or options
(except as expressly contemplated by this Agreement) or (z) accelerate the
vesting of any of the stock options in each case other than (A) the issuance
of Parent Common Stock upon the exercise of stock options outstanding under
the Parent Stock Incentive Plan on the date of this Agreement in accordance
with their present terms or in accordance with the present terms of any
employment agreements existing on the date of this Agreement, (B) the grant
of stock options to employees and directors to purchase up to 1,000,000
shares of Parent Common Stock (at an exercise price equal to the fair market
value of the Parent Common Stock on the date of grant) pursuant to the Parent
Stock Incentive Plan as in effect on the date of this Agreement (as the same
may be amended to increase the number of shares of Parent Common Stock which
may be the subject of awards thereunder), and the issuance of Parent Common
Stock upon the exercise thereof, and (C) the issuance of Parent Common Stock
in connection with a transaction not prohibited by Section 4.1(b)(iv);
provided, however, that stock issuances in connection with a transaction
permitted under Section 4.1(b)(iv) hereof may not exceed the number of shares
of Parent Common Stock purchased by the Parent after the date hereof;
(iii) amend its Amended and Restated Articles of Association or Amended
and Restated Memorandum of Association, other than as contemplated by the
Domestication;
(iv) acquire or agree to acquire (for cash or shares of stock or
otherwise) by merging or consolidating with, or by purchasing a substantial
portion of the assets of, or by any other manner, any business or any
corporation, partnership, joint venture, association or other business
organization or division thereof; provided, however, that the Parent and its
subsidiaries may enter into such transactions (in addition to those listed on
Schedule 4.1(b)), other than with an affiliate, if the purchase price and
required capital contributions therefore (whether consisting of cash or
Parent Common Stock or a combination of both) do not exceed, in the
aggregate, $200 million (the "Parent Acquisition Basket"), and if such
transactions would not be reasonably likely to prevent or materially delay
the consummation of the Merger;
(v) mortgage or otherwise encumber or subject to any lien (a non-
exclusive license shall not be considered a mortgage, encumbrance or lien),
or sell, lease, exchange or otherwise dispose of any of, its properties or
assets, except for sales of its properties or assets in the ordinary course
of business consistent with past practice or other sales that, exclusive of
the transactions listed on Schedule 4.1(b) of the Parent Disclosure Schedule,
do not exceed, in the aggregate $50 million;
(vi) dispose of, pledge or encumber any of Parent's or its
subsidiaries' intellectual property, except through non-exclusive license
agreements;
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(vii) change its fiscal year;
(viii) (A) incur any indebtedness for borrowed money or guarantee any
such indebtedness of another person, issue or sell any debt securities or
warrants or other rights to acquire any debt securities of Parent or any of
its subsidiaries, guarantee any debt securities of another person, enter into
any "keep well" or other agreement to maintain any financial statement
condition of another person or enter into any arrangement having the economic
effect of any of the foregoing, except for (x) indebtedness incurred to
effect a transaction disclosed on Schedule 4.1(b) of the Parent Disclosure
Schedule, (y) indebtedness incurred or assumed in connection with one or more
acquisition transactions permitted under Section 4.1(b)(iv), provided that
indebtedness assumed in connection with any such transaction (as opposed to
indebtedness incurred to effect any such transaction which will be counted
solely against the limitations of Section 4.1(b)(iv)) shall not exceed the
amount that would otherwise be permitted to be incurred pursuant to clause
(z) below plus any remaining balance in the Parent Acquisition Basket, and
(z) indebtedness which when added to existing indebtedness of Parent and its
subsidiaries (other than indebtedness incurred pursuant to clause (x) and
indebtedness incurred or assumed pursuant to clause (y) to the extent that
such indebtedness reduces the available amount in the Parent Acquisition
Basket) does not exceed in the aggregate $50 million, or (B) other than in
the ordinary course of business consistent with past practice and within the
limits specified in Section 4.1(b)(iv), make any loans, advances or capital
contributions to, or investments in, any other person, other than to Parent
or any direct or indirect wholly owned subsidiary of Parent;
(ix) purchase or acquire, or permit or cause any of its subsidiaries to
purchase or acquire, beneficial or record ownership of any shares of Company
Common Stock;
(x) make or agree to make any new capital expenditures (exclusive of
expenditures set forth on Schedule 4.1(b)) for tangible physical assets which
in the aggregate exceed $50 million;
(xi) except in the ordinary course of business consistent with past
practice, modify, amend, renew, fail to renew or terminate any material
contract or agreement to which the Parent or any subsidiary is a party or
waive, release or assign any material rights or claims; or
(xii) authorize any of, or commit or agree to take any of, the
foregoing actions.
Section 4.2 No Inconsistent Company Activities.
(a) From and after the date of this Agreement until the earlier of the
Effective Time or the termination of this Agreement in accordance with its
terms, the Company agrees that it shall not, nor shall it permit any of its
subsidiaries to, nor shall it authorize or permit any officer, director or
employee of, or any investment banker, attorney or other advisor,
representative or agent of, the Company or any of its subsidiaries to, directly
or indirectly, solicit or initiate, or knowingly encourage the submission of,
any Company Takeover Proposal (as defined below), or participate in any
discussions or negotiations regarding, or furnish to any person any information
with respect to, or take any other action to facilitate any inquiries or the
making of any proposal that constitutes, or may reasonably be expected to lead
to, any Company Takeover Proposal or amend or grant any waiver or release of
any standstill agreement. For purposes of this Agreement, "Company Takeover
Proposal" means any proposal (whether or not in writing and whether or not
delivered to the Company's stockholders generally) regarding (i) a merger,
consolidation, purchase of assets (other than purchases of assets or inventory
in the ordinary course of business), tender offer, share exchange or other
business combination or similar transaction involving the Company or any of its
subsidiaries, (ii) any proposal or offer to acquire in any manner, directly or
indirectly, any equity interest in or any voting securities of the Company or
any of its subsidiaries which constitutes 10% or more of the total of such
equity interests or voting securities, or a substantial portion of the assets
of the Company or any of its subsidiaries, (iii) the acquisition by any person
of beneficial ownership or a right to acquire beneficial ownership of, or the
formation of any "group" (as defined under Section 13(d) of the Exchange Act
and the rules and regulations thereunder) which beneficially owns, or has the
right to acquire beneficial ownership of 10% or more of the then outstanding
shares of capital stock of the Company or (iv) any public announcement of a
proposal, plan or intention to do any of the foregoing or
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any agreement to engage in any of the foregoing. Neither the Company nor any of
its subsidiaries shall, directly or indirectly, release any third party from
any confidentiality agreement relating to any transaction of the nature
referred to in the definition of Company Takeover Proposal, as if the
references to 10% therein referred to 1%. Nothing contained herein shall
prohibit the Board of Directors of the Company from complying with Rule 14e-2
and Rule 14d-9 under the Exchange Act with respect to a Company Takeover
Proposal by means of a tender offer.
(b) The Company shall promptly advise Parent orally and in writing of any
request for information or of any Company Takeover Proposal, or any inquiry
with respect to or which could lead to any Company Takeover Proposal, the
material terms and conditions of such request, Company Takeover Proposal or
inquiry, and the identity of the person making any such Company Takeover
Proposal or inquiry. The Company shall keep Parent informed of the status and
details of any such request, Company Takeover Proposal or inquiry.
(c) The Company shall not provide any non-public information to a third
party unless the Company provides such non-public information pursuant to a
non-disclosure agreement with terms regarding the protection of confidential
information at least as restrictive as such terms in the Confidentiality
Agreements (as defined in Section 5.2 hereof) previously entered into between
Parent and the Company. The Company shall be entitled to provide copies of this
Section 4.2 to third parties who, on an unsolicited basis after the date of
this Agreement, contact the Company regarding a Company Takeover Proposal,
provided that Parent shall concurrently be notified of such contact and
delivery of such copy.
(d) The Company shall immediately cease and cause to be terminated any
existing discussions or negotiations with any parties (other than Parent and
Sub) conducted prior to the date of this Agreement with respect to any of the
foregoing.
Section 4.3 No Inconsistent Parent Activities.
(a) In light of the consideration given by the Board of Directors of Parent
prior to the execution of this Agreement to, among other things, the
transactions contemplated hereby, the strategic benefits associated with the
Merger and the settlement of pending litigation between the parties hereto that
will result from the Merger, and in light of Parent's representations contained
in Section 3.2(n), from and after the date of this Agreement until the earlier
of the Effective Time or the termination of this Agreement in accordance with
its terms, Parent agrees that it shall not, nor shall it permit any of its
subsidiaries to, nor shall it authorize or permit any officer, director or
employee of, or any investment banker, attorney or other advisor,
representative or agent of, Parent or any of its subsidiaries to, directly or
indirectly, solicit or initiate, or knowingly encourage the submission of, any
Parent Takeover Proposal (as defined below), or participate in any discussions
or negotiations regarding, or furnish to any person any information with
respect to, or take any other action to facilitate any inquiries or the making
of, any proposal that constitutes, or may reasonably be expected to lead to,
any Parent Takeover Proposal, or amend or grant any waiver or release of any
standstill agreement or approve any termination or amendment of the Parent
Rights Agreement (as defined below) or redemption of rights thereunder (other
than as contemplated by Section 5.10 hereof). For purposes of this Agreement,
"Parent Takeover Proposal" means any proposal (whether or not in writing and
whether or not delivered to Parent's stockholders generally) regarding (i) a
merger, consolidation, purchase of assets (other than purchases of assets or
inventory in the ordinary course of business), tender offer, share exchange or
other business combination or similar transaction involving Parent or any of
its subsidiaries, (ii) the acquisition in any manner, directly or indirectly,
of any equity interest in or any voting securities of Parent or any of its
subsidiaries which constitutes 10% or more of the total of such equity
interests or voting securities, or a substantial portion of the assets of
Parent or any of its subsidiaries, (iii) the acquisition by any person of
beneficial ownership or a right to acquire beneficial ownership of, or the
formation of any "group" (as defined under Section 13(d) of the Exchange Act
and the rules and regulations thereunder) which beneficially owns, or has the
right to acquire beneficial ownership of, 10% or more of the then outstanding
shares of capital stock of Parent, or (iv) any public announcement of a
proposal, plan or intention to do any of the foregoing or any agreement to
engage in any of the foregoing. Neither Parent nor any of its subsidiaries
shall, directly or indirectly, release any third party from any
A-27
confidentiality agreement relating to any transactions of the nature referred
to in the definition of Parent Takeover Proposal, as if the reference to 10%
therein referred to 1%. Nothing contained in this Agreement shall prevent the
Board of Directors of Parent from complying with Rule 14e-2 and Rule 14d-9
under the Exchange Act with respect to a Parent Takeover Proposal; provided,
however, that the Board of Directors of Parent will not recommend a Parent
Takeover Proposal unless it determines by a majority vote in its good faith
judgment (on the basis of the written advice of Parent's outside legal counsel)
that it must recommend a Parent Superior Proposal (as defined below) to comply
with its fiduciary duties under applicable law.
(b) The restrictions set forth in Section 4.3(a) shall not prevent the Board
of Directors of Parent (or any officer, director or employee of, or any
investment banker, attorney or other advisor, representative or agent, of
Parent) in the exercise of and as required by its fiduciary duties as
determined by the Board of Directors of Parent in good faith (after
consultation with and not inconsistent with the advice of Parent's outside
legal counsel) from engaging in discussions or negotiations with (but not
directly or indirectly soliciting or initiating such discussions or
negotiations or directly or indirectly encouraging inquiries or the making of
any Parent Takeover Proposal), and furnishing information concerning Parent and
its business, properties and assets to, a third party who makes a written,
unsolicited, bona fide Parent Takeover Proposal (except that for purposes of
this Section 4.3(b), to constitute a Parent Takeover Proposal such proposal,
(x) if relating to the acquisition in any manner of any equity interest in or
any voting securities of Parent or any of its subsidiaries, must contemplate
the acquisition of 50% or more, rather than 10% or more, of the total of such
equity interests or voting securities and (y) if relating to the acquisition by
any person in any manner of beneficial ownership or a right to acquire
beneficial ownership of, or the formation of any "group" (as defined under
Section 13(d) of the Exchange Act and the rules and regulations thereunder)
which beneficially owns, or has the right to acquire beneficial ownership of,
outstanding shares of capital stock of Parent, must contemplate the acquisition
of 50% or more, rather than 10% or more, of the then outstanding shares of
capital stock of Parent) that, after taking into consideration the strategic
benefits to Parent of the Merger and the termination of the Subject Litigation
(as defined below) that will result from the Merger, (A) is financially
superior to the Merger, as determined in good faith by Parent's Board of
Directors after consultation with, and the receipt of an opinion from, Parent's
financial advisors, which shall be of national reputation and (B) will
constitute a transaction for which financing, to the extent required, is then
committed or which, in the good faith judgment of the Board of Directors of
Parent, is reasonably capable of being obtained (any such Parent Takeover
Proposal satisfying both clauses (A) and (B) above is herein referred to as a
"Parent Superior Proposal"); provided that in advance of the taking of any such
actions by Parent the Company shall have been notified in writing of such
Parent Superior Proposal and given a copy of such Parent Superior Proposal.
(c) Parent shall provide the Company (for at least five business days
following the receipt of such notice) an opportunity to amend this Agreement to
provide for terms and conditions no less favorable than the Parent Superior
Proposal in which event Parent shall cause its respective financial and legal
advisors to negotiate in good faith with the Company to make such adjustments
to the terms and conditions of this Agreement as would enable Parent to proceed
with the transactions contemplated hereby. The provisions of this paragraph
shall apply to successive Parent Superior Proposals (provided that each such
Parent Superior Proposal shall meet the then applicable requirements thereof,
based upon the terms of this Agreement in effect on the date hereof or as such
terms shall be modified, amended or superseded).
(d) Parent shall promptly advise the Company orally and in writing of any
request for information or of any Parent Takeover Proposal, or any inquiry with
respect to or which could lead to any Parent Takeover Proposal, the material
terms and conditions of such request, Parent Takeover Proposal or inquiry, and
the identity of the person making any such Parent Takeover Proposal or inquiry.
Parent shall keep the Company informed of the status and details of any such
request, Parent Takeover Proposal or inquiry.
(e) Notwithstanding Section 4.3(b), Parent shall not provide any non-public
information to a third party unless Parent provides such non-public information
pursuant to a non-disclosure agreement with terms regarding the protection of
confidential information at least as restrictive as such terms in the
Confidentiality
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Agreements (as defined in Section 5.2 hereof) previously entered into between
Parent and the Company. Parent shall be entitled to provide copies of this
Section 4.3 to third parties who, on an unsolicited basis after the date of
this Agreement, contact Parent regarding a Parent Takeover Proposal, provided
that the Company shall concurrently be notified of such contact and delivery
of such copy.
(f) Parent shall immediately cease and cause to be terminated any existing
discussion or negotiations with any parties (other than the Company) conducted
prior to the date of this Agreement with respect to any of the foregoing and
will exercise its rights under any confidentiality agreements with any such
parties to require the return of confidential information provided by Parent
or its representatives to any such parties.
ARTICLE V
Additional Agreements
Section 5.1 Preparation of Form S-4 and the Proxy Statement; Other Filings;
Stockholders' Meetings.
(a) As promptly as reasonably practicable after the execution of this
Agreement, (i) the Company and Parent shall prepare and file with the SEC a
preliminary joint proxy statement in form and substance satisfactory to each
of the Company and Parent, relating to the meeting of the Company's
stockholders to be held to obtain the Company Stockholder Approval and the
meeting of the Parent's Stockholders to obtain the Parent Stockholder
Approvals (together with any amendments thereof or supplements thereto, the
"Proxy Statement") and (ii) Parent shall prepare and file with the SEC a
registration statement on Form S-4 (together with all amendments thereto, the
"Form S-4") in which the Proxy Statement shall be included as a prospectus, in
connection with the registration under the Securities Act of shares of Parent
Common Stock in connection with the transactions and matters contemplated
hereby. As promptly as reasonably practicable after the date of this
Agreement, Parent and the Company shall prepare and file any other filings
required under the Exchange Act, the Securities Act or any other Federal or
Blue Sky Laws relating to the Merger and the transactions contemplated by this
Agreement (the "Other Filings"). Each of Parent and the Company will notify
the other promptly of the receipt of any comments from the SEC or its staff
and of any request by the SEC or its staff or any other government officials
for amendments or supplements to the Form S-4, the Proxy Statement or any
Other Filing or for additional information and will supply the other with
copies of all correspondence between such company or any of its
representatives, on the one hand, and the SEC, or its staff or any other
government officials, on the other hand, with respect to the Form S-4, the
Proxy Statement, the Merger or any Other Filing. The Proxy Statement, the Form
S-4 and the Other Filings shall comply in all material respects with all
applicable requirements of law. Each of Parent and the Company shall use all
reasonable efforts to cause the Form S-4 to become effective as promptly as
reasonably practicable, and shall take all or any action required under any
applicable federal or state securities laws in connection with the issuance of
shares of Parent Common Stock pursuant to the Merger. The Company authorizes
Parent to utilize in the Form S-4 and in all such state filed materials, the
information concerning the Company and its subsidiaries provided to Parent in
connection with, or contained in, the Proxy Statement. Parent promptly will
advise the Company when the Form S-4 has become effective and of any
supplements or amendments thereto, and the Company shall not distribute any
written material that would constitute, as advised by counsel to the Company,
a "prospectus" relating to the Merger or the Parent Common Stock within the
meaning of the Securities Act or any applicable state securities law without
the prior written consent of Parent. As promptly as reasonably practicable
after the Form S-4 shall have become effective, each of the Company and Parent
shall mail the Proxy Statement to its respective stockholders.
(b) Parent agrees promptly to advise the Company if at any time prior to
the meeting of the Parent's Stockholders or the meeting of the Company's
stockholders any information provided by it in the Proxy Statement is or
becomes incorrect or incomplete in any material respect and to provide the
Company with the information needed to correct such inaccuracy or omission.
Parent will furnish the Company with such supplemental information as may be
necessary in order to cause the Proxy Statement, insofar as it relates to
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Parent and its subsidiaries, to comply with applicable law after the mailing
thereof to the Parent's Stockholders or the Company's stockholders.
(c) Each of Parent and the Company agrees that none of the information
supplied or to be supplied by it specifically for inclusion or incorporation by
reference in (i) the Form S-4 shall, at the time the Form S-4 is filed with the
SEC, at any time it is amended or supplemented or at the time it becomes
effective under the Securities Act, contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they are made, not misleading or (ii) the Proxy Statement shall, at the
date it is first mailed to the Company's stockholders or the Parent's
stockholders or at the time of the Company Stockholders' Meeting (as defined
below) or the Parent Stockholders' Meeting (as defined below), contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they are made, not misleading.
(d) The Company agrees promptly to advise Parent if at any time prior to the
meeting of the Parent's Stockholders or the meeting of the Company's
stockholders any information provided by it in the Proxy Statement is or
becomes incorrect or incomplete in any material respect and to provide Parent
with the information needed to correct such inaccuracy or omission. The Company
will furnish Parent with such supplemental information as may be necessary in
order to cause the Proxy Statement, insofar as it relates to the Company and
its subsidiaries, to comply with applicable law after the mailing thereof to
the Parent's Stockholders or the Company's stockholders.
(e) As soon as reasonably practicable following the date of this Agreement,
the Company shall call and hold a meeting of its stockholders (the "Company
Stockholders' Meeting") and the Parent shall call and hold a meeting of
Parent's Stockholders (the "Parent Stockholders' Meeting"). The purpose of such
meetings shall be to obtain the Company Stockholder Approval and the Parent
Stockholder Approvals, respectively. Each of the Company and Parent shall
coordinate and cooperate with respect to the timing of the Company
Stockholders' Meeting and Parent Stockholders' Meeting and shall use reasonable
efforts to hold such meetings on the same day. Each of the Company and Parent
shall use its best efforts to solicit from its stockholders proxies, and shall
take all other action necessary or advisable to secure the vote or consent of
stockholders required by applicable law or otherwise to obtain the Company
Stockholder Approval and the Parent Stockholder Approvals, respectively, and
through its respective Board of Directors, shall recommend to its respective
stockholders the obtaining of the Company Stockholder Approval and the Parent
Stockholder Approvals, respectively; provided, however, that the recommendation
of the Board of Directors of Parent may not be included or may be withdrawn or
modified if previously included if but only if a Parent Superior Proposal has
been made and Parent is in compliance with the provisions of Section 4.3(b) and
Section 4.3(c). Unless this Agreement is previously terminated in accordance
with Article 7, Parent shall submit the issuance of Parent Common Stock
pursuant to the terms of this Agreement and the Domestication to a vote of its
stockholders at the Parent Stockholders' Meeting even if the Board of Directors
of Parent determines at any time after the date hereof that the Merger is no
longer advisable and withdraws its recommendation that Parent Stockholders
approve such transaction.
Section 5.2 Access to Information; Confidentiality. The Company shall, and
shall cause each of its respective subsidiaries to, afford to Parent, and to the
officers, employees, accountants, counsel, financial advisors and other
representatives of Parent, reasonable access during normal business hours during
the period prior to the Effective Time to all their respective properties,
books, contracts, commitments, personnel and records and, during such period,
the Company shall, and shall cause each of its respective subsidiaries to,
furnish promptly to Parent, (a) a copy of each report, schedule, registration
statement and other document filed by it during such period pursuant to the
requirements of federal or state securities laws and (b) all other information
concerning its business, properties and personnel as Parent may reasonably
request. Parent will hold, and will cause its respective officers, employees,
accountants, counsel, financial advisers and other representatives and
affiliates to hold, any confidential information confidential in accordance with
the Confidentiality Agreements between Parent and the Company (the
"Confidentiality Agreements").
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Section 5.3 Appropriate Action; Consents; Filings.
(a) Without limiting the obligations of the parties in Section 5.3(b), each
of the parties hereto shall (i) make promptly its respective filings, and
thereafter make any other required submissions under the HSR Act with respect to
the transactions contemplated herein and (ii) make promptly all filings with or
applications to the FCC with respect to the transactions contemplated herein.
The parties hereto will use their respective best efforts, and will take all
actions necessary, to consummate and make effective the transactions
contemplated herein and to cause the conditions to the Merger set forth in
Article VI to be satisfied, (including using best efforts, and taking all
actions necessary, to obtain all licenses, permits, consents, approvals,
authorizations, waivers, qualifications and orders of Governmental Entities as
are necessary for the consummation of the transactions contemplated herein), and
will do so in a manner designed to obtain such regulatory clearances and the
satisfaction of such conditions as expeditiously as possible.
(b) The Company and Parent each agree to take promptly any and all steps
necessary to avoid or eliminate each and every impediment and obtain all
consents or waivers under any antitrust, competition, communications or
broadcast law that may be asserted by any U.S. federal, state and local and non-
United States antitrust or competition authority, or by the FCC or similar
authority, so as to enable the parties to close the transactions contemplated by
this Agreement as expeditiously as possible, including committing to or
effecting, by consent decree, hold separate orders, trust, or otherwise, the
sale or disposition of such of its assets or businesses as are required to be
divested in order to obtain the consent of the FCC to or avoid the entry of, or
to effect the dissolution of, any decree, order, judgment, injunction, temporary
restraining order or other order in any suit or proceeding, that would otherwise
have the effect of preventing or materially delaying the consummation of the
Merger and the other transactions contemplated by this Agreement; provided,
however, that neither the Company, Parent nor any of their respective
subsidiaries shall be required to divest assets on which their respective
electronic program guide businesses are dependent if such divestiture would have
a material adverse effect on their electronic program guide business or take any
other action that materially and adversely impacts their respective abilities to
participate in the electronic program guide business. In addition, each of the
Company and Parent agree to take promptly any and all steps necessary to obtain
any consent or to vacate or lift any order, writ, judgment, injunction, decree,
stipulation, determination or award entered by or with any Governmental Entity
(each, an "Order") relating to antitrust or communications matters that would
have the effect of making any of the transactions contemplated by this Agreement
illegal or otherwise prohibiting or materially delaying their consummation.
Notwithstanding the above, Parent and the Company shall not be obligated to take
any action pursuant to the foregoing if the board of directors of each of Parent
and the Company determine that the taking of such action is reasonably likely to
have a material adverse effect on the economic or business benefits of the
transactions contemplated by this Agreement.
(c) Each of the Company and Parent shall give (or shall cause its respective
subsidiaries to give) any notices to third parties, and the Company and Parent
shall use, and cause each of its subsidiaries to use, its reasonable best
efforts to obtain any third party consents, necessary, proper or advisable to
consummate the Merger. Each of the parties hereto will furnish to the other such
necessary information and reasonable assistance as the other may request in
connection with the preparation of any required governmental filings or
submissions and will cooperate in responding to any inquiry from a Governmental
Entity, including immediately informing the other party of such inquiry,
consulting in advance before making any presentations or submissions to a
Governmental Entity, and supplying each other with copies of all material
correspondence, filings or communications between either party and any
Governmental Entity with respect to this Agreement.
Section 5.4 Stock Options.
(a) At the Effective Time, each outstanding Company Stock Option, whether
vested or unvested, shall be assumed by Parent. Accordingly, each Company Stock
Option shall be deemed to constitute an option to acquire, on substantially the
same terms and conditions as were applicable under such Company Stock Option,
the number, rounded down to the nearest whole integer, of full shares of Parent
Common Stock the holder of
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such Company Stock Option would have been entitled to receive pursuant to the
Merger had such holder exercised such Company Stock Option in full, including
as to unvested shares, immediately prior to the Effective Time, at a price per
share equal to (y) the exercise price per share for the shares of Company
Common Stock otherwise purchasable pursuant to such Company Stock Option
divided by (z) the Exchange Ratio, with such exercise price per share rounded
up to the nearest whole cent (except that all vesting periods with respect to
Company Stock Options granted prior to January 1, 1999 and 200,000 Company
Stock Options granted to each of Xxxxx Xxxxxx and Xxx Xxxxxx on or after
January 1, 1999 shall accelerate and such Company Stock Options will remain
exercisable for the balance of their term).
(b) As soon as practicable after the Effective Time, Parent shall deliver to
each holder of a Company Stock Option a document evidencing the foregoing
assumption of such Company Stock Option by Parent.
(c) As soon as practicable after the Effective Time, Parent shall file a
registration statement on Form S-8 (or any successor form), or another
appropriate form with respect to the shares of Parent Common Stock subject to
such Company Stock Options. With respect to those individuals who subsequent to
the Merger will be subject to the reporting requirements under Section 16(a) of
the Exchange Act, where applicable, Parent shall administer the Company Stock
Option Plans assumed pursuant to this Section 5.4 in a manner that complies
with Rule 16b-3 promulgated by the SEC under the Exchange Act.
(d) Parent will grant options for up to 300,000 shares of Parent Common
Stock following the Effective Time to certain senior officers (other than Xxxxx
Xxxxxx and Xxx Xxxxxx) who were senior officers of the Company with an exercise
price equal to the then current market price of shares of Parent Common Stock
in accordance with the recommendations of the Company's current directors
provided to the Parent Compensation Committee; provided, however, that without
the approval of the Parent Compensation Committee, (i) no single officer may be
granted options to purchase more than 30,000 shares of Parent Common Stock, and
(ii) officers employed by the following divisions of the Company may not be
granted options for more than 75,000 shares of Parent Common Stock in the
aggregate for each such division: TV Guide Magazine, Super Star and UVTV.
(e) Parent and the Company hereby agree to provide the other with the
following promptly upon the written request of such other party, but in no
event more frequently than once a month: (i) the number of shares of Parent
Common Stock or Company Common Stock, as the case may be, repurchased after
September 30, 1999 and prior to the Closing in accordance with the proviso in
Section 4.1(a)(ii)(E) or the proviso in Section 4.1(b)(ii)(C), as the case may
be, and (ii) the number of shares of Parent Common Stock or Company Common
Stock, as the case may be, issued after September 30, 1999 and prior to the
Closing.
Section 5.5 Conveyance Taxes. Parent and the Company shall cooperate in the
preparation, execution and filing of all returns, questionnaires, applications
or other documents regarding any real property transfer or gains, sales, use,
transfer, value added, stock transfer and stamp taxes, any transfer, recording,
registration and other fees, and any similar taxes which become payable in
connection with the transactions contemplated hereby that are required or
permitted to be filed on or before the Effective Time. All of such taxes and
expenses shall be borne equally by Parent and the Company.
Section 5.6 Indemnification and Insurance.
(a) The certificate of incorporation and the bylaws of the Surviving
Corporation shall contain the provisions with respect to indemnification and
exculpation from liability substantially identical to those set forth in the
Company's certificate of incorporation and bylaws on the date of this
Agreement, which provisions shall not be amended, repealed or otherwise
modified for a period of six years from the Effective Time in any manner that
would adversely affect the rights thereunder of individuals who on or prior to
the Effective Time were directors, officers, employees or agents of the Company
unless such modification is required by law.
(b) If Parent, the Surviving Corporation or any of their successors or
assigns (i) consolidates with or merges into any other person and shall not be
the continuing or surviving corporation or entity of such
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consolidation or merger or (ii) transfers all or substantially all of its
properties and assets to any person, then and in each such case, proper
provisions shall be made so that the successors and assigns of Parent or the
Surviving Corporation, as the case may be, shall assume the obligations set
forth in this Section 5.6.
Section 5.7 Fees and Expenses. Except as provided in Section 7.5, whether
or not the Merger is consummated, all costs and expenses incurred in connection
with this Agreement and the transactions contemplated hereby shall be paid by
the party incurring such expenses, except that those expenses, other than
attorneys' and accountants' fees and expenses, incurred in connection with
printing the Proxy Statement and Form S-4, as well as the filing fee relating to
the Proxy Statement and Form S-4 paid to the SEC, will be shared equally by
Parent and the Company. Parent and the Company shall share equally the fees
incurred in connection with the filing of the premerger notification and report
form pursuant to the HSR Act.
Section 5.8 Public Announcements. Parent and Sub, on the one hand, and the
Company, on the other hand, will consult with each other before issuing, and
provide each other the opportunity to review and comment upon, any press release
or other public statements with respect to the transactions contemplated by this
Agreement, including the Merger, and shall not issue any such press release or
make any such public statement prior to such consultation, except as may be
required by applicable law, court process or by obligations pursuant to any
listing agreement with any national securities exchange or association.
Section 5.9 Takeover Statutes. If any "takeover" statute shall become
applicable to the transactions contemplated hereby, each of the Company, the
members of the Board of Directors of the Company, Parent and the Board of
Directors of Parent, subject to fiduciary duties, shall grant such approvals and
take such actions as are necessary such that the transactions contemplated
hereby may be consummated as promptly as practicable on the terms contemplated
hereby and otherwise act to eliminate or minimize the effects of such takeover
statute on the transactions contemplated hereby.
Section 5.10 Rights Agreement. The Board of Directors of Parent has taken
all action necessary to render the Rights Agreement, dated July 10, 1998, by and
between Parent and American Stock Transfer & Trust Company (the "Parent Rights
Agreement") inapplicable to the Merger and the other transactions contemplated
by this Agreement. Prior to the Effective Time, Parent shall either (i) amend
the Parent Rights Agreement in the form attached hereto as Exhibit 5.10, or (ii)
adopt a new shareholders' rights agreement identical to the Parent Rights
Agreement, except as amended to reflect the fact that Parent is then a Delaware
corporation and to reflect the amendments reflected in the form attached hereto
as Exhibit 5.10, in each case immediately prior to the Effective Time. Such
amendment or new shareholders' rights agreement is referred to herein as the
"Parent Rights Agreement Amendment."
Section 5.11 Nasdaq National Marketing Listing. Parent shall use its best
efforts to cause the shares of Parent Common Stock issuable to the stockholders
of the Company in the Merger, and those required to be reserved for issuance in
connection with the Merger, to be listed for trading on the Nasdaq National
Market.
Section 5.12 Board of Directors of Parent. The Board of Directors of Parent
will take all actions necessary to cause the Board of Directors of Parent,
immediately after the Effective Time, to consist of twelve persons, six of whom
shall be designated by Parent (one of whom shall be Xxxxx X. Xxxx and two of
whom shall be Independent Directors (as that term is defined in the Bylaws of
Parent)), and six of whom shall be designated by the Board of Directors of the
Company prior to the Effective Time (one of whom shall be Xxxxx Xxxxxx, one of
whom shall be Xxx Xxxxxx, and two of whom shall be Independent Directors (as
that term is defined in the Bylaws of Parent)). If, prior to the Effective Time,
any of Parent or the Company designees shall decline or be unable to serve as a
director, Parent (if such person was designated by Parent) or the Company (if
such person was designated by the Company) shall designate another person to
serve in such person's stead.
Section 5.13 Committees of the Board of Directors of Parent. The Board of
Directors of Parent will take all actions necessary to cause the following
committees of the Board of Directors of Parent to be formed, immediately after
the Effective Time:
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(a) An executive committee comprised of four directors consisting of the
Chairman and Chief Executive Officer of Parent, the Chief Financial Officer
of Parent, one director designated by Liberty, and one director designated by
News Corp.
(b) A compensation committee comprised of five members of the Board of
Directors of Parent which will consist of two Independent Directors (as that
term is defined in the Bylaws of Parent) designated by Parent, one
Independent Director (as that term is defined in the Bylaws of Parent)
designated by Liberty, one Independent Director (as that term is defined in
the Bylaws of Parent) designated by News Corp. and the Chairman and Chief
Executive Officer of Parent.
(c) A special committee consisting of three members of the Board of
Directors of Parent which will be established and will be empowered to
determine issues related to Parent's relationship with and among service
providers. The members of the special committee will consist of the Chairman
and Chief Executive Officer of Parent, a director designated by Liberty and a
director designated by News Corp.
(d) An audit committee comprised of the Chief Financial Officer of
Parent, one Independent Director (as that term is defined in the Bylaws of
Parent) designated by Parent and two Independent Directors (as that term is
defined in the Bylaws of Parent) one of whom shall be designated by Liberty
and one of whom shall be designated by News Corp.
Section 5.14 Tax Matters.
(a) This Agreement is intended to constitute a "reorganization" within
the meaning of Section 368(a) of the Code.
(b) If required by the SEC, the Company shall cause its counsel, Xxxxx &
Xxxxx, L.L.P., to deliver an opinion to the Company, dated the date of the
Proxy Statement, to the effect that the Merger will qualify for federal
income tax purposes as a "reorganization" within the meaning of Section
368(a) of the Code. In connection with obtaining such opinions, the Company
and Parent shall provide to such counsel customary representation letters
upon which counsel may rely in rendering such opinion. The opinion shall, if
requested, be filed with the SEC as part of the Proxy Statement.
(c) If required by the SEC, Parent shall cause its counsel, O'Melveny &
Xxxxx, LLP, to deliver an opinion to Parent, dated the date of the Proxy
Statement, to the effect that the Merger will qualify for federal income tax
purposes as a "reorganization" within the meaning of Section 368(a) of the
Code. In connection with obtaining such opinions, Parent and the Company
shall provide to such counsel customary representation letters upon which
counsel may rely in rendering such opinion. The opinion shall, if requested,
be filed with the SEC as part of the Proxy Statement.
(d) Between the date of this Agreement and the Effective Time, neither
Parent nor Company nor their affiliates shall directly or indirectly take any
action that could prevent the Merger from qualifying as a reorganization
under Section 368(a) of the Code or that could prevent each of them from
providing representations required from them in connection with obtaining the
opinions specified in Sections 5.14(b) and (c) hereof.
(e) Neither Parent nor Company shall (without the consent of the other)
take any action, except as specifically contemplated by this Agreement, that
could adversely affect the intended tax treatment of the transactions
contemplated hereby.
Section 5.15 Domestication; Certificates and Other Deliveries.
(a) On or prior to the Closing Date, the Company shall have delivered, or
caused to be delivered, to Parent (i) a certificate of good standing from the
Secretary of State of Delaware and of comparable authority in other
jurisdictions in which the Company and its subsidiaries are incorporated or
qualified to do business stating that each is a validly existing corporation in
good standing; (ii) duly adopted resolutions of the Board of Directors and
stockholders of the Company approving the execution, delivery and performance
of this
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Agreement and the Company Ancillary Agreements and the instruments contemplated
hereby, certified by the Secretary of the Company, and (iii) a true and complete
copy of the certificate of incorporation or comparable governing instruments, as
amended, of the Company and its subsidiaries certified by the Secretary of State
of the state of incorporation or comparable authority in other jurisdictions,
and a true and complete copy of the bylaws or comparable governing instruments,
as amended, of the Company and its subsidiaries certified by the Secretary of
the Company and its subsidiaries, as applicable.
(b) On or prior to the Closing Date, Parent shall have effected the
Domestication and delivered to the Company (i) a good standing certificate from
the Secretary of State of Delaware stating that Parent is a validly existing
corporation together with a certificate of good standing from the Secretary of
State of Delaware stating that Sub is a validly existing corporation in good
standing; (ii) duly adopted resolutions of the Board of Directors of each of
Parent and Sub approving the execution, delivery and performance of this
Agreement and the Parent Ancillary Agreements and the instruments contemplated
hereby, and of the stockholders of Parent approving the issuance of the Parent
Common Stock pursuant to the Merger, each certified by the Secretary or the
Assistant Secretary of the Company; (iii) a true, complete and certified copy of
the Certificate of Incorporation of Parent, which shall be in the form attached
to this Agreement and a true, complete and certified copy of the Certificate of
Incorporation of Sub; and (iv) a true and complete copy of Parent's Bylaws which
shall be in the form attached to this Agreement and a true and complete copy of
the Bylaws, as amended, of Sub, each certified by the Secretary or Assistant
Secretary of Parent and Sub, as applicable.
Section 5.16 Pending Litigation. Each of the parties covenants and agrees
that all activity (except as contemplated by this Section 5.16) with respect to
the pending litigation between and among the parties and their respective
affiliates (the "Subject Litigation") shall cease until the earlier of (i) the
termination of this Agreement pursuant to Section 7.1 hereof, and (ii) the
Effective Time. Each of the parties hereto agrees to take promptly any and all
action required and to file appropriate documents with each court (the "Relevant
Courts") in which the Subject Litigation is pending to inform the court of this
Section 5.16 and to request the stay of the Subject Litigation. Upon any
termination of this Agreement pursuant to Section 7.1, unless the IPG License
Agreement is effective, the stay implemented in connection with the Subject
Litigation pursuant to this Section 5.16 shall be deemed automatically lifted
and each of the parties hereto agrees to take promptly any and all actions
required and to file appropriate documents with the Relevant Courts to lift the
stay. The parties shall immediately and expeditiously as possible, following the
execution of this Agreement, take all necessary steps to execute and file with
the Relevant Courts the documents contemplated by this Section 5.16.
Section 5.17 IPG License Agreement. In the event this Agreement is
terminated pursuant to Section 7.1(b), (d), (e) or (g), the IPG License
Agreement (the "IPG License Agreement") entered into on the date hereof by
Parent and the Company in the form attached hereto as Exhibit 5.17, shall become
effective as of the date on which this Agreement is so terminated if the Company
so elects by giving notice to Parent within 30 days thereafter.
Section 5.18 Rule 16b-3. Prior to the Effective Time, Parent and the
Company shall take all steps reasonably necessary to cause the transactions
contemplated hereby and any other dispositions of equity securities of the
Company (including derivative securities) or acquisition of Parent and the
Company equity securities (including derivative securities) in connection with
this Agreement and the Option Agreement by each person who (a) is a director or
officer of Parent or the Company or (b) at the Effective Time, will become a
director or officer of Parent, to be exempted under Rule 16b-3 promulgated under
the Exchange Act.
Section 5.19 Multichannel Video Programming. Following the date hereof, the
Company shall enter into good faith negotiations with each multichannel video
programming delivery ("MVPD") system in which News Corp. or its affiliates has
an interest (each a "News MVPD") for the purpose of licensing the Company's IPG
technology on commercial terms and conditions and News Corp. shall cause each
such News MVPD to enter into good faith negotiations with the Company for the
purpose of licensing the Company's IPG technology on commercial terms and
conditions.
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ARTICLE VI
Conditions Precedent
Section 6.1 Conditions to Each Party's Obligations to Effect the Merger.
The respective obligation of each party to effect the Merger is subject to the
satisfaction or waiver on or prior to the Closing Date of the following
conditions:
(a) Stockholder Approvals. The Stockholder Approvals shall have been
obtained;
(b) Nasdaq National Market Listing. The shares of Parent Common Stock
issuable to the Company's stockholders pursuant to this Agreement shall have
been approved for inclusion on the Nasdaq National Market, subject to
official notice of issuance;
(c) No Injunctions or Restraints. No temporary restraining order,
preliminary or permanent injunction or other order issued by any court of
competent jurisdiction or other legal restraint or prohibition preventing the
consummation of the Merger substantially on the terms contemplated hereby
shall be in effect;
(d) Form S-4. The Form S-4 shall have been declared effective by the SEC
under the Securities Act. No stop order suspending the effectiveness of the
Form S-4 shall have been issued by the SEC, and no proceedings for that
purpose shall have been initiated or, to the knowledge of Parent or the
Company, threatened by the SEC; and
(e) HSR Act. The applicable waiting period (and any extension thereof)
under the HSR Act shall have expired or been terminated.
Section 6.2 Additional Conditions to Obligations of Parent and Sub. The
obligations of Parent and Sub to effect the Merger are also subject to the
following conditions, unless waived in writing by Parent:
(a) Representations and Warranties. Each of the representations and
warranties of the Company contained in this Agreement shall be true and
correct as of the date hereof, except, in all such cases, where the failure
to be so true and correct would not have a material adverse effect on the
Company;
(b) Agreements and Covenants. The Company shall not have willfully and
materially breached (i) any of the covenants specified in Section 4.1(a)(i)
through (xiii), inclusive, or Sections 5.5 or 5.8, except, in all such cases,
where the failure to have so performed or complied would not have a material
adverse effect on the Company or (ii) any covenant in Section 4.2 or Article
V (other than Sections 5.5 and 5.8) required by this Agreement to be
performed or complied with by it on or prior to the Closing Date.
(c) Company Ancillary Documents. The Company Ancillary Agreements shall
be valid, binding and enforceable pursuant to the terms thereof and hereof
against the Company and its applicable subsidiaries, Liberty and News Corp.,
as the case may be; and
(d) Share Ownership. The holders of Parent's outstanding Parent Common
Stock immediately prior to the Closing shall own in the aggregate more than
50% of Parent's outstanding Parent Common Stock immediately following the
Closing, provided that for purposes of such calculation, (i) Parent must use
the number of issued and outstanding shares of Parent Common Stock on
September 30, 1999 specified in Section 3.2(c) of this Agreement plus any
shares of Parent Common Stock issued after September 30, 1999 and prior to
the Closing, (ii) any shares of Parent Common Stock purchased by Parent or
any person controlled by Parent after September 30, 1999 (other than shares
of Parent Common Stock repurchased in accordance with the proviso in Section
4.1(b)(ii)(C)) shall be deemed to be outstanding immediately following the
Closing, and (iii) any shares of Parent Common Stock repurchased after
September 30, 1999 in accordance with the proviso in Section 4.1(b)(ii)(C)
shall be deemed to be outstanding until the tenth business day following the
receipt by the Company of written notice from Parent containing the date of
any such repurchase and the number of shares of Parent Common Stock so
repurchased.
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Section 6.3 Additional Conditions to Obligations of the Company. The
obligations of the Company to effect the Merger are also subject to the
following conditions, unless waived in writing by the Company:
(a) Representations and Warranties. Each of the representations and
warranties of Parent and Sub contained in this Agreement shall be true and
correct as of the date hereof, except, in all such cases, where the failure
to be so true and correct would not have a material adverse effect on Parent
and its subsidiaries taken as a whole;
(b) Agreements and Covenants. Each of Sub and Parent shall not have
willfully and materially breached (i) any of the covenants specified in
Section 4.1(b)(i) through (xii), inclusive, or Sections 5.5 and 5.8, except,
in all such cases, where the failure to have so performed or complied would
not have a material adverse effect on Parent and its subsidiaries taken as a
whole or (ii) any covenant in Section 4.3 or Article V (other than Sections
5.5 and 5.8) required by this Agreement to be performed or complied with by
it on or prior to the Closing Date; and
(c) Parent Ancillary Agreements. The Parent Ancillary Agreements shall
be valid, binding and enforceable pursuant to the terms thereof and hereof
against Parent, its applicable subsidiaries and Xxxxx X. Xxxx, as the case
may be; provided, however, that if Xxxxx X. Xxxx dies prior to the Effective
Time, it shall not be a condition to the Company's obligations to effect the
Merger that the Xxxx Amendment and the Stockholders' Agreement be binding and
enforceable upon Xxxxx X. Xxxx, as long as the Stockholders' Agreement
continues to be binding and enforceable upon Parent and its applicable
subsidiaries. The Xxxx Employment Agreement as amended by the Xxxx Amendment
shall not have been amended, modified or supplemented in any manner.
ARTICLE VII
Termination, Amendment and Waiver
Section 7.1 Termination. This Agreement may be terminated at any time prior
to the Effective Time, whether before or after approval by the stockholders of
the Company or of Parent:
(a) by mutual written consent of Parent and the Company, if the Board of
Directors of each so determines by the affirmative vote of a majority of the
members of its entire Board of Directors; or
(b) by either Parent or the Company, if the Merger shall not have
occurred by March 31, 2000, provided that if as of such date the waiting
period (or any extension thereof) under the HSR Act has not expired or been
terminated, or an action has been instituted by the Department of Justice or
Federal Trade Commission challenging or seeking to enjoin the consummation of
the Merger and remains unresolved, then such date shall be extended to
September 30, 2000 (whichever date is operative being the "Reference Date"),
and provided further that the right to terminate this Agreement under this
Section 7.1(b) shall not be available to any party whose action or failure to
act has been the cause of or resulted in the failure of the Merger to occur
on or before the Reference Date and such action or failure to act constitutes
a breach of this Agreement; or
(c) by Parent (provided that Parent is not then in material breach of any
representation, warranty, covenant or other agreement contained herein such
that such breach would have a material adverse effect on Parent or the
Company), but only if the conditions set forth in Section 6.2(a), Section
6.2(b), Section 6.2(c) or Section 6.2(d), as the case may be, would be
incapable of being satisfied by the Reference Date; or
(d) by the Company (provided that the Company is not then in material
breach of any representation, warranty, covenant or other agreement contained
herein such that such breach would have a material adverse effect on the
Company or Parent), but only if the conditions set forth in Section 6.3(a) or
Section 6.3(b) or Section 6.3(c), as the case may be, would be incapable of
being satisfied by the Reference Date, including, without limitation, as a
result of the recommendation of the Merger of the Board of Directors of
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Parent having been withdrawn or modified prior to the termination of this
Agreement other than as permitted by Section 5.1(a); or
(e) by either Parent or the Company if any Governmental Entity shall have
issued an order, decree or ruling or taken any other action, in any case
having the effect of permanently enjoining, restraining or otherwise
prohibiting the consummation of the Merger and such order, decree or ruling
or other action shall have become final and nonappealable; or
(f) by either Parent or the Company if any approval of the stockholders
of the Company required for the consummation of the Merger shall not have
been obtained by reason of the failure to obtain the required vote at a duly
held meeting of the Company's stockholders or at any adjournment or
postponement thereof, provided that the right to terminate this Agreement
under this Section 7.1(f) shall not be available to the Company where the
failure to obtain stockholder approval of the Company's stockholders shall
have been caused by the action or failure to act of the Company in breach of
this Agreement; or
(g) by either Parent or the Company if any approval of the Parent's
Stockholders required for the consummation of the Merger and the
Domestication shall not have been obtained by reason of the failure to obtain
the required vote at a duly held meeting of Parent's Stockholders or at any
adjournment or postponement thereof, provided that the right to terminate
this Agreement under this Section 7.1(g) shall not be available to Parent
where the failure to obtain the approval of the Parent's Stockholders shall
have been caused by the action or failure to act of Parent in breach of this
Agreement.
Section 7.2 Effect of Termination. In the event of termination of this
Agreement by either the Company or Parent as provided in Section 7.1, this
Agreement shall forthwith become void and have no effect, without any liability
or obligation on the part of Parent, Sub or the Company or their respective
officers or directors, except (i) as set forth in Section 5.7, Section 5.17,
this Section 7.2, Section 7.5 and Article VIII (General Provisions), each of
which shall survive the termination of this Agreement, and (ii) nothing herein
shall relieve any party from liability for any willful and material breach of
this Agreement. No termination of this Agreement shall affect the obligations of
the parties contained in the Confidentiality Agreements, all of which
obligations shall survive termination of this Agreement in accordance with their
terms.
Section 7.3 Amendment. This Agreement may be amended prior to the Effective
Time by the parties at any time before or after approval hereof by the
stockholders of the Company and Parent; provided, however, that after such
stockholder approval there shall not be made any amendment that by law requires
further approval by the stockholders of the Company or Parent without the
further approval of such stockholders. This Agreement may not be amended except
by an instrument in writing signed on behalf of each of the parties.
Section 7.4 Extension; Waiver. At any time prior to the Effective Time, the
parties may (a) extend the time for the performance of any of the obligations or
other acts of the other parties, (b) waive any inaccuracies in the
representations and warranties contained in this Agreement or in any document
delivered pursuant to this Agreement or (c) subject to the proviso of Section
7.3, waive compliance with any of the agreements or conditions contained in this
Agreement. Any agreement on the part of a party to any such extension or waiver
shall be valid only if set forth in an instrument in writing, signed on behalf
of such party. The failure of any party to this Agreement to assert any of its
rights under this Agreement or otherwise shall not constitute a waiver of those
rights.
Section 7.5 Termination Fee; Liquidated Damages.
(a) Upon any termination of this Agreement by Parent pursuant to Section
7.1(c) or by Parent or the Company pursuant to Section 7.1(f) hereof, the
Company shall immediately pay to Parent $409 million (the "Company Termination
Fee") by wire transfer of immediately available funds to an account designated
by Parent.
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(b) Upon any termination of this Agreement by the Company or Parent pursuant
to Section 7.1(g) hereof, Parent shall pay to the Company $205 million (the
"Parent Termination Fee") by wire transfer of immediately available funds to an
account designated by the Company; provided, however, that an additional amount
shall be paid as liquidated damages, under the following circumstances: (i) if
prior to the meeting of Parent's Stockholders there shall have been a Parent
Takeover Proposal (except that for purposes of this Section 7.5(b)(i), to
constitute a Parent Takeover Proposal such proposal, (x) if relating to the
acquisition in any manner of any equity interest in or any voting securities of
Parent or any of its subsidiaries, must contemplate the acquisition of 35% or
more, rather than 10% or more, of the total of such equity interests or voting
securities and (y) if relating to the acquisition by any person in any manner of
beneficial ownership or a right to acquire beneficial ownership of, or the
formation of any "group" (as defined under Section 13(d) of the Exchange Act and
the rules and regulations thereunder) which beneficially owns, or has the right
to acquire beneficial ownership of, outstanding shares of capital stock of
Parent, must contemplate the acquisition of 35% or more, rather than 10% or
more, of the then outstanding shares of capital stock of Parent) or the
recommendation of the Merger of the Board of Directors of Parent shall have been
withdrawn or modified prior to the time of such termination or the meeting of
Parent's Stockholders, Parent shall pay to the Company upon such termination by
wire transfer of immediately available funds an additional fee of $204 million;
and (ii) if at any time within 12 months following such termination of this
Agreement (whether or not a Parent Takeover Proposal (as defined in Section
4.3(a)) was made prior to such termination), Parent enters into a definitive
agreement for or consummates a transaction that if proposed prior to termination
would have constituted a Parent Takeover Proposal (as defined in Section 4.3(a))
then Parent shall concurrently with such signing or closing pay the Company by
wire transfer of immediately available funds, an additional $204 million but
without in any case duplication of any payment made under clause (i). Upon any
termination of this Agreement by the Company pursuant to Section 7.1(d) hereof,
Parent shall immediately pay to the Company $409 million (the "Alternative
Parent Termination Fee") by wire transfer of immediately available funds to an
account designated by the Company.
(c) Payment of the fees described in Sections 7.5(a) and (b) above
constitute liquidated damages and shall be in lieu of all other damages incurred
in the event of breach of this Agreement.
Section 7.6 Procedure for Termination, Amendment, Extension or Waiver. A
termination of this Agreement pursuant to Section 7.1, an amendment of this
Agreement pursuant to Section 7.3 or an extension or waiver pursuant to Section
7.4 shall, in order to be effective, require in the case of Parent, Sub or the
Company, action by its Board of Directors, acting by the affirmative vote of a
majority of the members of the entire Board of Directors.
ARTICLE VIII
General Provisions
Section 8.1 Nonsurvival of Representations, Warranties and Agreements. None
of the representations, warranties and agreements in this Agreement or in any
instrument delivered pursuant to this Agreement shall survive the Effective
Time, except that any covenant or agreement of the parties which by its terms
contemplates performance after the Effective Time of the Merger shall survive
the Merger.
Section 8.2 Notices. All notices, requests, claims, demands and other
communications under this Agreement shall be in writing and shall be deemed
given if delivered personally, telecopied, or sent by overnight courier
(providing proof of delivery) to the parties at the following addresses (or at
such other address for a party as shall be specified by like notice):
(a) if to Parent or Sub, to
Gemstar International Group Limited
000 Xxxxx Xxx Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Chief Executive Officer
A-39
with a copy to:
O'Melveny & Xxxxx LLP
Suite 1700
000 Xxxxxxx Xxxxxx Xxxxx
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxxxxx, Esq.
J. Xxx Xxxxxx, Esq.
(b) if to the Company, to
TV Guide, Inc.
0000 X. Xxxxx Xxxxxx
Xxxxx, Xxxxxxxx 00000-0000
Facsimile: (000) 000-0000
Attention: General Counsel
with a copy to:
Xxxxx & Xxxxx, L.L.P.
000 Xxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxxxxx Xxxxxxxxx, Esq.
Section 8.3 Definitions. For purposes of this Agreement:
(a) an "affiliate" of any person means another person that, directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with, such first person;
(b) "Average Market Capitalization" means one-half of the sum of the Market
Capitalization of the applicable corporation on the first day of the relevant
period and on the last day of the relevant period. "Market Capitalization" means
the product of the number of shares of the applicable corporation's common stock
outstanding on the relevant date multiplied by the average closing market price
of the Corporation's common stock for the 20 consecutive trading days
immediately preceding such date.
(c) "Company Ancillary Agreements" means the Stockholders' Agreement, the
Company Option Agreement and the IPG License Agreement;
(d) "material adverse change" or "material adverse effect" means, when used
in connection with the Company, the Surviving Corporation or Parent, any change,
event or effect that is materially adverse to the business, assets, financial
condition or results of operations of such party and its subsidiaries taken as a
whole, except to the extent that such change, event, or effect is attributable
to or results from (i) general change in the industries in which the Company,
the Surviving Corporation or Parent operate, (ii) changes in general economic
conditions or securities markets in general, or (iii) the effect of the public
announcement or pendency of the transactions contemplated hereby;
(e) "Parent Ancillary Agreements" means the Parent Option Agreement, the IPG
License Agreement, the Stockholders' Agreement, the Xxxx Amendment and the
Parent Rights Agreement Amendment;
(f) "person" means an individual, corporation, partnership, joint venture,
association, trust, unincorporated organization or other entity; and
(g) a "subsidiary" of any person means another person, an amount of the
voting securities, other voting ownership or voting partnership interests of
which is sufficient to elect at least a majority of its directors or other
governing body (or, if there are no such voting interests, more than 50% of the
equity interest of which) is owned directly or indirectly by such first person.
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Section 8.4 Interpretation. When a reference is made in this Agreement to a
Section, Exhibit or Schedule, such reference shall be to a Section of, or an
Exhibit or Schedule to, this Agreement unless otherwise indicated. The table of
contents and headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement. Whenever the words "include," "includes" and "including" are used in
this Agreement, they shall be deemed to be followed by the words "without
limitation."
Section 8.5 Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other parties whether by mail, overnight
courier, personal delivery or facsimile, it being understood that all parties
need not sign the same counterpart.
Section 8.6 Entire Agreement; No Third-Party Beneficiaries. This Agreement,
(and the other exhibits hereto), the Confidentiality Agreement and the other
documents referenced herein constitute the entire agreement, and supersede all
prior agreements and understandings, both written and oral, among the parties
with respect to the subject matter of this Agreement and except for the
provisions of Article II and Sections 5.4 and 5.6, are not intended to confer
upon any person other than the parties hereto any rights or remedies hereunder.
Section 8.7 Governing Law. This Agreement shall be governed by, and
construed in accordance with the internal laws of the State of Delaware without
regard to conflicts of laws, except for such provisions where the laws of the
British Virgin Islands is mandatorily applicable, which provisions shall be
governed by and construed in accordance with the laws of the British Virgin
Islands.
Section 8.8 Assignment. Neither this Agreement nor any of the rights,
interests or obligations under this Agreement shall be assigned, in whole or in
part, by operation of law or otherwise by any of the parties without the prior
written consent of the other parties. Subject to the preceding sentence, this
Agreement will be binding upon, inure to the benefit of, and be enforceable by,
the parties and their respective successors and assigns.
Section 8.9 Enforcement. The parties agree that irreparable damage would
occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached. It
is accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement in any court of the United States
located in the State of Delaware or in Delaware State court, this being in
addition to any other remedy to which they are entitled at law or in equity. In
addition, each of the parties hereto (a) consents to submit itself to the
personal jurisdiction of any federal court located in the State of Delaware or
any Delaware State court in the event any dispute arises out of this Agreement
or any of the transactions contemplated by this Agreement, (b) agrees that
process may be served upon it in any manner authorized by the laws of the State
of Delaware, (c) agrees that it will not attempt to deny or defeat such personal
jurisdiction by motion or other request for leave from any such court and (d)
agrees that it will not bring any action relating to this Agreement in any court
other than a federal or State court sitting in the State of Delaware.
Section 8.10 Severability. It is the desire and intent of the parties that
the provisions of this Agreement be enforced to the fullest extent permissible
under the law and public policies applied in each jurisdiction in which
enforcement is sought. Accordingly, in the event that any provision of this
Agreement would be held in any such jurisdiction to be invalid, prohibited or
unenforceable for any reason, such provisions, as to such jurisdictions, shall
be ineffective, without invalidating the remaining provisions of this Agreement
or affecting the validity or enforceability of such provision in any other
jurisdiction. Notwithstanding the foregoing, if such provision could be more
narrowly drawn so as not to be invalid, prohibited or unenforceable in such
jurisdiction, it shall, as to such jurisdiction, be so narrowly drawn, without
invalidating the remaining provisions of this Agreement or affecting the
validity or enforceability of such provision in any other jurisdiction.
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IN WITNESS WHEREOF, Parent, Sub and the Company have caused this Agreement
to be signed by their respective officers thereunto duly authorized, all as of
the date first written above.
Attest: "Parent"
Gemstar International Group Limited,
a British Virgin Islands corporation
By: /s/ Xxxxxxx X. Xxxxxxxxxx By: /s/ Xxxxx Xxxx
_________________________________ _________________________________
Name: Xxxxxxx X. Xxxxxxxxxx Name: Xxxxx Xxxx
Title: Secretary Title: Chief Executive Officer
Attest: "SUB"
G Acquisition Subsidiary Corp., a
Delaware corporation
By: /s/ Xxxxxxx X. Xxxxxxxxxx By: /s/ Xxxxx Xxxx
_________________________________ _________________________________
Name: Xxxxxxx X. Xxxxxxxxxx Name: Xxxxx Xxxx
Title: Assistant Secretary Title: Chief Executive Officer
Attest: "Company"
TV Guide, Inc., a Delaware corporation
By: /s/ Xxxxx X. Xxxxx By: /s/ Xxxxx X. Xxxxxx III
_________________________________ _________________________________
Name: Xxxxx X. Xxxxx Name: Xxxxx X. Xxxxxx III
Title: Senior Vice President and Title: President
Chief Financial Officer
A-42
EXHIBIT 1.4
CERTIFICATE OF MERGER
---------------------
CERTIFICATE OF MERGER
OF
TV GUIDE, INC.
WITH AND INTO
G ACQUISITION SUBSIDIARY CORP.
Pursuant to Section 251 of the
Delaware General Corporation Law
--------------------------------
The undersigned corporation organized and existing under and by virtue of
the General Corporation Law of the State of Delaware,
DOES HEREBY CERTIFY:
FIRST: That the name and state of incorporation of each of the
constituent corporations to the merger are as follows:
Name State of Incorporation
---- ----------------------
TV Guide, Inc. ("TV Guide") Delaware
G Acquisition Subsidiary Corp. (the Delaware
"Company")
SECOND: That an Agreement and Plan of Merger, dated as of October 4, 1999,
among Gemstar International Group Limited, a British Virgin Islands corporation,
G Acquisition Subsidiary Corp., a Delaware corporation and a subsidiary of
Gemstar, and TV Guide, Inc., a Delaware corporation (the "Merger Agreement"),
has been approved, adopted, certified, executed and acknowledged by each of the
Company and TV Guide in accordance with the requirements of Section 251 of the
General Corporation Law of the State of Delaware.
THIRD: That the name of the surviving corporation of the merger is TVG,
Inc.
FOURTH: That the certificate of incorporation of the Company, attached
hereto as Exhibit A, shall be the certificate of incorporation of the surviving
---------
corporation.
FIFTH: That the executed Merger Agreement is on file at the principal
place of business of the surviving corporation. The address of the principal
place of business of the surviving corporation is 0000 X. Xxxxx Xxxxxx, Xxxxx,
Xxxxxxxx 00000.
SIXTH: That a copy of the Merger Agreement will be furnished by the
surviving corporation, on request and without cost, to any stockholder of the
Company or Gemstar.
IN WITNESS WHEREOF, the Company has caused this certificate to be signed by
Xxxxx X. Xxxx, the President and Chief Executive Officer of the Company, this
___ day of _______________, _____.
G ACQUISITION SUBSIDIARY CORP.
By: ___________________________________
Name: Xxxxx X. Xxxx
Title: President and Chief Executive
Officer
