Letter Agreement - WebMD Corp. and The News Corp. Ltd.
[Letterhead of WebMD Corporation]
December 29, 2000
The News Corporation Limited
c/o News America Incorporated
1211 Avenue of the Americas
New York, New York 10036
Attention: David DeVoe, Senior Executive Vice President
Dear Mr. DeVoe:
The purpose of this letter is to evidence the agreement by and among
WebMD Corporation, a Delaware corporation ("WEBMD") formerly known as
Healtheon/WebMD Corporation, Healtheon/WebMD Cable Corporation, a Delaware
corporation ("WEBMD CABLE") and wholly owned subsidiary of WebMD,
Healtheon/WebMD Internet Corporation, a Delaware corporation ("WEBMD INTERNET")
and wholly owned subsidiary of WebMD, HW International Holdings, Inc., a
Delaware corporation and wholly owned subsidiary of WebMD ("INTERNATIONAL
HOLDINGS" and, collectively with WebMD, WebMD Cable and WebMD Internet, the
"WEBMD ENTITIES") and The News Corporation Limited, a South Australia, Australia
corporation ("NEWS CORP"), Fox Entertainment Group, Inc., a Delaware corporation
("FOX") which is controlled through certain intermediaries by News Corp, Fox
Broadcasting Company, a Delaware corporation ("FBC") and a subsidiary of Fox,
Eastrise Profits Limited, an international business company incorporated under
the laws of the British Virgin Islands ("EASTRISE") which is controlled through
certain intermediaries by News Corp, News America Incorporated, a Delaware
corporation ("NEWS AMERICA") which is controlled through certain intermediaries
by News Corp, AHN/FIT Cable LLC, a Delaware limited liability company ("AHN/FIT
CABLE") which is owned through certain intermediaries by Fox, AHN/FIT Internet
LLC, a Delaware limited liability company which is owned through certain
intermediaries by Fox ("AHN/FIT Internet"), and IJV Holdings Inc., a Delaware
corporation and wholly owned subsidiary of Fox ("IJV HOLDINGS," and,
collectively with News Corp, Fox, FBC, Eastrise, News America, AHN/FIT Cable and
AHN/FIT Internet, the "NEWS CORP ENTITIES"), concerning the modification or
termination of various agreements and arrangements concerning the strategic
alliance between WebMD and News Corp.
BACKGROUND
A. As of December 6, 1999, WebMD, News Corp and Fox entered into the
Master Strategic Alliance Agreement (the "MASTER STRATEGIC ALLIANCE Agreement")
pursuant to which they agreed to enter into certain strategic alliances and
deliver certain documents;
B. As of January 26, 2000 and as contemplated by the Master Strategic
Alliance Agreement, WebMD, WebMD Cable, WebMD Internet, Fox, FBC, Eastrise,
AHN/FIT Cable and AHN/FIT Internet entered into the Purchase Agreement (the
"PURCHASE AGREEMENT") pursuant to which Fox purchased from WebMD 2,000,000
shares of common stock, par value $0.0001 per share (the "COMMON STOCK"), of
WebMD and 155,951 shares of Series A Preferred Stock, par value $0.0001 per
share (the "PREFERRED STOCK"), of WebMD for an aggregate consideration
consisting of (i) $100 million, (ii) the transfer by AHN/FIT Cable to WebMD
Cable of a 50% interest in The Health Network LLC, a Delaware limited liability
company ("HEALTH NETWORK"), (iii) the transfer by AHN/FIT Internet to WebMD
Internet of a 50% interest in The H/W Health & Fitness LLC, a Delaware limited
liability company ("HEALTH & FITNESS"), (iv) $400 million of branding services
across the various media owned by News Corp and its affiliates throughout the
world pursuant to the Media Services Agreement (as defined below), and (v)
<PAGE> 3
content to be provided by News Corp pursuant to the News Corp Content License
Agreement (as defined below);
C. As contemplated by the Purchase Agreement and at the direction of
Fox, WebMD issued 2,000,000 shares of Common Stock to News America, and an
aggregate of 155,951 shares of Preferred Stock which are currently held by the
following News Corp Entities: 50,433 shares of Preferred Stock are held by News
America, 67,244 shares of Preferred Stock are held by FBC, 36,743 shares of
Preferred Stock are held by AHN/FIT Cable and 1,531 shares of Preferred Stock
are held by AHN/FIT Internet;
D. As contemplated by the Purchase Agreement, WebMD, Eastrise, AHN/FIT
Cable, AHN/FIT Internet, News America and FBC entered into the Registration
Rights Agreement dated as of January 26, 2000 (the "REGISTRATION RIGHTS
AGREEMENT");
E. As contemplated by the Purchase Agreement, WebMD Cable and AHN/FIT
Cable entered into the Amended and Restated Operating Agreement of Health
Network dated as of January 26, 2000, as amended (as amended, the "HEALTH
NETWORK OPERATING AGREEMENT");
F. As contemplated by the Purchase Agreement, WebMD Internet and
AHN/FIT Internet entered into the Amended and Restated Operating Agreement of
Health & Fitness dated as of January 26, 2000 (the "HEALTH & FITNESS OPERATING
AGREEMENT");
G. As contemplated by the Master Strategic Alliance Agreement,
International Holdings and IJV Holdings entered into the Operating Agreement of
WebMD International LLC, a Delaware LLC ("INTERNATIONAL") dated as of January
26, 2000 (the "INTERNATIONAL OPERATING AGREEMENT");
H. Following the execution of the Health Network Operating Agreement,
Health Network and WebMD entered into the Trademark License Agreement dated as
of January 26, 2000 (the "WEBMD/HEALTH NETWORK TRADEMARK LICENSE AGREEMENT") and
the Content License Agreement dated as of January 26, 2000 (the "WEBMD/HEALTH
NETWORK CONTENT LICENSE AGREEMENT");
I. Following the execution of the International Operating Agreement,
International and News America entered into the Management Services Agreement
dated as of January 26, 2000 (the "INTERNATIONAL MANAGEMENT SERVICES AGREEMENT")
and International and Eastrise entered into the WebMD International Media
Services Agreement dated as of January 26, 2000 (the "INTERNATIONAL MEDIA
SERVICES AGREEMENT");
J. Following the execution of the Health Network Operating Agreement
and the International Operating Agreement, Health Network and International
entered into the Trademark License Agreement dated as of January 26, 2000 (the
"INTERNATIONAL/HEALTH NETWORK TRADEMARK LICENSE AGREEMENT") and the Content
License Agreement dated as of January 26, 2000 (the "INTERNATIONAL/HEALTH
NETWORK CONTENT LICENSE AGREEMENT");
K. Following the execution of the Health & Fitness Operating Agreement
and the International Operating Agreement, Health & Fitness and International
entered into the Trademark License Agreement dated as of January 26, 2000 (the
"INTERNATIONAL/HEALTH & FITNESS TRADEMARK LICENSE AGREEMENT") and the Content
License Agreement dated as of January 26, 2000 (the "INTERNATIONAL/HEALTH &
FITNESS CONTENT LICENSE AGREEMENT");
L. As contemplated by the Purchase Agreement, WebMD, Eastrise and Fox
entered into the Healtheon/WebMD Media Services Agreement dated as of January
26, 2000 (the "DOMESTIC MEDIA SERVICES AGREEMENT"); and
-2-
<PAGE> 4
M. As contemplated by the Purchase Agreement, WebMD, Fox and News Corp
entered into the Content License Agreement dated as of January 26, 2000 pursuant
to which Fox licensed Fox content to WebMD (the "FOX CONTENT LICENSE AGREEMENT")
and WebMD and News Corp entered into the Content License Agreement dated as of
January 26, 2000 pursuant to which WebMD licensed WebMD content to various News
Corp Entities (the "WEBMD CONTENT LICENSE Agreement").
The WebMD Entities and the News Corp Entities desire to modify or
terminate the agreements to which they are party as specified below:
AGREEMENTS REGARDING HEALTH NETWORK
1.1. ASSIGNMENT OF MEMBER INTEREST IN HEALTH NETWORK. Subject to
the terms and conditions of this Letter Agreement, WebMD Cable hereby agrees to
assign at the Closing (defined below) its entire interest in Health Network (the
"WEBMD CABLE INTEREST") free and clear of all liens, claims and encumbrances to
AHN/FIT Cable or another entity identified by News Corp which entity, if it is
not AHN/FIT Cable, shall be added as a party to this Letter Agreement (the
"AHN/FIT HEALTH NETWORK ENTITY"), pursuant to an assignment agreement in a form
reasonably satisfactory to the parties hereto (the "CABLE INTEREST ASSIGNMENT
AGREEMENT"). Effective upon the Closing, the Put and Call (as such terms are
defined in the Health Network Operating Agreement) shall be terminated. Through
the date of the Closing, WebMD Cable shall be allocated losses of Health Network
equal to the aggregate amount of its funding to Health Network; all other
profits, losses and items thereof of Health Network shall be allocated to the
AHN/FIT Cable.
1.2. TERMINATION OF CERTAIN AGREEMENTS. The parties to this Letter
Agreement include all of the parties to each of the WebMD/Health Network
Trademark License Agreement, the WebMD/Health Network Content License Agreement,
the International/Health Network Trademark License Agreement and the
International/Health Network Content License Agreement (collectively, the
"TERMINATED HEALTH NETWORK AGREEMENTS"). Upon the Closing, each of the
Terminated Health Network Agreements shall be, without the need for any further
action on the part of any party, terminated and shall be of no further force and
effect.
1.3. RELEASE BY NEWS CORP ENTITIES. Effective upon the Closing,
each of the News Corp Entities shall fully release each of the WebMD Entities
and each of their respective directors, officers, agents, employees,
stockholders, attorneys, legal representatives, subsidiaries, successors,
assigns and other affiliates (the "WEBMD RELEASED PARTIES") from any and all
obligations arising out of the ownership or operations of the business of Health
Network, including, but not limited to, any obligations under the Health Network
Operating Agreement (including obligations to make capital contributions to
Health Network) and obligations under the Terminated Health Network Agreements;
provided, however, that nothing contained in this Section 1.3 shall limit any
rights the parties may have with respect to a breach of any representation,
warranty or covenant as set forth in this Letter Agreement.
1.4. INDEMNIFICATION BY NEWS CORP ENTITIES. Each of the News Corp
Entities agrees effective as of the Closing jointly and severally to indemnify
each of the WebMD Released Parties from any and all claims, losses, liabilities,
or damages arising out of the ownership and operations of the business of Health
Network other than those arising out of the gross negligence or willful
misconduct of any WebMD Released Party; provided, however, that nothing
contained in this Section 1.4 shall limit any rights the parties may have with
respect to a breach of any representation, warranty or covenant as set forth in
this Letter Agreement.
-3-
<PAGE> 5
1.5. REPRESENTATION AND WARRANTY OF WEBMD. WebMD hereby represents
and warrants that, from January 26, 2000 until the date hereof, the WebMD
Entities have operated Health Network in the ordinary course of business in
accordance with past practices.
AGREEMENTS REGARDING INTERNATIONAL
2.1. ASSIGNMENT OF MEMBER INTEREST IN INTERNATIONAL. Subject to the
terms and conditions of this Letter Agreement, IJV Holdings hereby agrees to
assign at the Closing (defined below) its entire interest in International (the
"NEWS CORP INTERNATIONAL INTEREST") free and clear of all liens, claims and
encumbrances to an entity identified by WebMD which entity, if it is not a WebMD
Entity, shall be added as a party to this Agreement (the "WEBMD INTERNATIONAL
ENTITY"), pursuant to an assignment agreement in a form reasonably acceptable to
the parties (the "INTERNATIONAL INTEREST ASSIGNMENT AGREEMENT"). Effective upon
the Closing, the Put (as such term is defined in the International Operating
Agreement) shall be terminated. Through the date of the Closing, IJV Holdings
shall be allocated losses of International equal to the aggregate amount of its
funding to International; all other profits, losses and items thereof of
International shall be allocated to International Holdings.
2.2. TERMINATION OF CERTAIN AGREEMENTS. The parties to this Letter
Agreement include all of the parties to each of the International Management
Services Agreement and the International Media Services Agreement (collectively,
the "TERMINATED INTERNATIONAL AGREEMENTS"). Upon the Closing, each of the
Terminated International Agreements shall be, without the need for any further
action on the part of any party, terminated and shall be of no further force and
effect.
2.3. RETURN OF REMAINING FUNDS. The parties acknowledge that prior
to the date hereof IJV Holdings contributed $3 million to the capital of
International. To extent that such capital has not been expended prior to the
close of business on the date hereof, the remaining amount shall be returned to
IJV Holdings in cash at the Closing.
2.4. RELEASE BY WEBMD ENTITIES. Effective upon the Closing each of
the WebMD Entities shall fully release each of the News Corp Entities and each
of their respective directors, officers, agents, employees, stockholders,
attorneys, legal representatives, subsidiaries, successors, assigns and other
affiliates (the "NEWS CORP RELEASED PARTIES") from any and all obligations
arising out of the ownership and operations of the business of International,
including, but not limited to, any obligation under the International Operating
Agreement (including any obligation to make capital contributions to
International) and obligations under the Terminated International Agreements.
2.5. INDEMNIFICATION BY WEBMD ENTITIES. Each of the WebMD Entities
agrees effective as of the Closing to jointly and severally indemnify each of
the News Corp Released Parties from any and all claims, losses, liabilities, or
damages arising out of the ownership and operations of the business of
International other than those arising out of the gross negligence or willful
misconduct of any News Corp Released Party.
AGREEMENTS REGARDING DOMESTIC MEDIA SERVICES
3.1. AGREEMENTS REGARDING THE MEDIA SERVICES AGREEMENT. The parties
to this Agreement include all of the parties to the Domestic Media Services
Agreement. At the Closing, the Domestic Media Services Agreement shall be,
without the need for any further action on the part of any party, amended as set
forth in Exhibit 3.1 of this Letter Agreement. Except as contemplated by this
Section 3.1, the terms and conditions of the Media Services Agreement shall
remain in full force and effect.
-4-
<PAGE> 6
AGREEMENTS REGARDING HEALTH & FITNESS
4.1. ASSIGNMENT OF MEMBER INTEREST IN HEALTH & FITNESS. Subject to
the terms and conditions of this Agreement, WebMD Internet hereby agrees to
assign at the Closing its entire interest in Health & Fitness (the "WEBMD
INTERNET INTEREST") free and clear of all liens, claims and encumbrances to
AHN/FIT Internet or another entity identified by News Corp which entity, if it
is not AHN/FIT Cable, shall be added as a party to this Letter Agreement (the
"AHN/FIT HEALTH & FITNESS ENTITY"), pursuant to an assignment agreement in a
form reasonably acceptable to the parties (the "INTERNET INTEREST ASSIGNMENT
AGREEMENT"). Effective upon the Closing, the Put and Call (as such terms are
defined in the Health & Fitness Operating Agreement) shall be terminated.
Through the date of the Closing, WebMD Internet shall be allocated losses of
Health & Fitness equal to the aggregate amount of its funding to Health &
Fitness; all other profits, losses and items thereof of Health & Fitness shall
be allocated to the AHN/FIT Internet.
4.2. TERMINATION OF CERTAIN AGREEMENTS. The parties to this Letter
Agreement include all of the parties to each of the International/Health &
Fitness Trademark License Agreement and the International/Health & Fitness
Content License Agreement (collectively, the "TERMINATED HEALTH & FITNESS
AGREEMENTS"). Upon the Closing, each of the Terminated Health & Fitness
Agreements shall be, without the need for any further action on the part of any
party, terminated and shall be of no further force and effect.
4.3. RELEASE BY NEWS CORP ENTITIES. Each of the News Corp Entities
does hereby fully release each of the WebMD Released Parties from any and all
obligations arising from the ownership and operation of the business of Health &
Fitness, including, but not limited to any obligations under the Terminated
Health & Fitness Agreements.
4.4. INDEMNIFICATION BY NEWS CORP ENTITIES. Each of the News Corp
Entities agrees effective as of the Closing to jointly and severally indemnify
each of the WebMD Released Parties from any and all claims, losses, liabilities,
or damages arising out of the ownership and operations of the business of Health
& Fitness other than those arising out of the gross negligence or willful
misconduct of any WebMD Released Party.
CERTAIN AGREEMENTS REGARDING MASTER STRATEGIC ALLIANCE AGREEMENT,
PURCHASE AGREEMENT AND CONTENT LICENSES
5.1. TERMINATION OF MASTER STRATEGIC ALLIANCE AGREEMENT, THE
PURCHASE AGREEMENT AND FOX CONTENT LICENSE; CONTINUATION OF WEBMD CONTENT
License. The parties to this Agreement include all of the parties to each of the
Master Strategic Alliance Agreement, the Purchase Agreement, the Fox Content
License Agreement and the WebMD Content License Agreement. At the Closing the
Master Strategic Alliance Agreement, the Purchase Agreement and the Fox Content
License Agreement shall be, without the need for any further action on the part
of any party, terminated and shall be of no further force and effect and no
party to it shall have any further rights or obligations with respect thereto or
be required from and after the termination thereof pursuant to this Section 5.1
to take, or refrain from taking, any action whatsoever pursuant to the Master
Strategic Alliance Agreement, the Purchase Agreement or the Fox Content License
Agreement. It is acknowledged that the WebMD Content License Agreement shall
remain in full force and effect.
5.2. REPRESENTATIONS AND WARRANTIES OF WEBMD AS TO COMMON STOCK.
WebMD hereby represents and warrants that the 2,000,000 shares of Common Stock
delivered to News America pursuant to the Purchase Agreement have been duly
authorized, validly issued, fully paid and non-assessable.
-5-
<PAGE> 7
AGREEMENTS REGARDING THE PREFERRED STOCK
6.1. TRANSFER OF PREFERRED STOCK TO WEBMD. The parties to this
Letter Agreement include all of the holders of Preferred Stock (the "PREFERRED
STOCKHOLDERS"). Subject to the terms and conditions of this Letter Agreement,
and in consideration of the terms and provisions hereof, each of the Preferred
Stockholders shall transfer to WebMD all of the shares of Preferred Stock held
of record by it free and clear of all liens, claims and encumbrances pursuant to
an assignment in a form reasonably satisfactory to the parties (the "PREFERRED
STOCK ASSIGNMENT AGREEMENT" and, collectively with the Cable Interest Assignment
Agreement, the International Interest Assignment Agreement and the Internet
Interest Assignment Agreement, the "TRANSFER AGREEMENTS").
CERTAIN COVENANTS
7.1 HART-SCOTT-RODINO. The WebMD Entities and the News Corp
Entities shall file as soon as practicable after the date of this Letter
Agreement notifications under the Hart-Scott-Rodino Antitrust Improvements Act
of 1976 (the "HSR ACT") and shall respond as promptly as practicable to all
inquiries or requests received from the Federal Trade Commission or the
Antitrust Division of the Department of Justice for additional information or
documentation and shall respond as promptly as practicable to all inquiries and
requests received from any State Attorney General or other Governmental Entity
in connection with antitrust matters. The parties shall cooperate with each
other in connection with the making of all such filings or responses, including
providing copies of all such documents to the other party and its advisors prior
to filing or responding. The parties further agree that the filing fees with
respect to any filing made under the HSR Act shall be shared equally by the
parties.
7.2 WARRANT. In consideration of the agreement by New Corp
Entities to the provisions of this Letter Agreement, at the Closing WebMD shall
issue to such News Corp Entities as News Corp shall designate a warrant to
purchase 3,000,000 shares of Common Stock of WebMD for an exercise price payable
in cash of $15 per share, which warrant shall be exercisable at any time and
from time to time during a term of 6 years from the date of Closing (the
"WARRANT"). The shares underlying the Warrant shall be "Registrable Securities"
for purposes of the Registration Rights Agreement. The Warrant shall be in
substantially the form attached hereto as Exhibit 7.2.
7.3. RELEASES.
7.3.1. RELEASE BY WEBMD ENTITIES. Each of the WebMD Entities
shall, effective as of the Closing, fully release each of the News Corp Released
Parties from any and all claims, demands, rights, actions or causes of action,
liabilities, damages, losses, obligations, judgments, suits, matters and issues
of any kind or nature whatsoever, whether known or unknown, contingent or
absolute, suspected or unsuspected, disclosed or undisclosed, hidden or
concealed, matured or unmatured, that they may have (including, but not limited
to, any claims arising under federal or state law relating to alleged fraud,
breach of any duty, negligence, violations of the federal securities laws or
otherwise), whether individual, class, derivative, representative, legal,
equitable or any other type or in any other capacity against the News Corp
Released Parties which have arisen or could have arisen, out of, or relate in
any manner to the Master Strategic Alliance Agreement, the Purchase Agreement,
the Health Network Operating Agreement, the Health & Fitness Operating
Agreement, the International Operating Agreement, the Fox Content License
Agreement, the Terminated Health Network Agreements, the Terminated
International Agreements and the Terminated Health & Fitness Agreements
(collectively, the "TERMINATED AGREEMENTS"), including, without limitation, any
allegations, facts, events, transactions, acts, occurrences, statements,
representations, misrepresentations, omissions or any other matter, thing or
cause whatsoever, or any series thereof, embraced, involved, set forth or
otherwise related, directly or indirectly, to any of the Terminated Agreements;
provided, however, that nothing contained in this Section 7.3.1 shall limit
-6-
<PAGE> 8
any rights the parties may have with respect to a breach of any representation,
warranty or covenant as set forth in this Letter Agreement.
7.3.2. RELEASE BY NEWS CORP ENTITIES. Each of the News Corp
Entities shall, effective as of the Closing, fully release each of the WebMD
Released Parties from any and all claims, demands, rights, actions or causes of
action, liabilities, damages, losses, obligations, judgments, suits, matters and
issues of any kind or nature whatsoever, whether known or unknown, contingent or
absolute, suspected or unsuspected, disclosed or undisclosed, hidden or
concealed, matured or unmatured, that they may have (including, but not limited
to, any claims arising under federal or state law relating to alleged fraud,
breach of any duty, negligence, violations of the federal securities laws or
otherwise), whether individual, class, derivative, representative, legal,
equitable or any other type or in any other capacity against the WebMD Released
Parties which have arisen or could have arisen, out of, or relate in any manner
to the Terminated Agreements, including, without limitation, any allegations,
facts, events, transactions, acts, occurrences, statements, representations,
misrepresentations, omissions or any other matter, thing or cause whatsoever, or
any series thereof, embraced, involved, set forth or otherwise related, directly
or indirectly, to any of the Terminated Agreements; provided, however, that
nothing contained in this Section 7.3.2 shall limit any rights the parties may
have with respect to a breach of any representation, warranty or covenant as set
forth in this Letter Agreement.
7.4 OTHER DEFINITIVE AGREEMENTS. The parties agree to use their
good faith best efforts to enter into one or more other definitive agreements
that may amend, supplement or replace this agreement, which agreements may
provide for, among other things, transition of the businesses of Health Network
and International (including the preparation of tax returns for such entities)
and the tax treatment of the transactions contemplated by this Letter Agreement.
The parties agree to use commercially reasonable efforts to structure the
definitive agreements in a mutually advantageous way, from a tax and financial
reporting perspective. The parties acknowledge that this Letter Agreement
contains all of the material terms of their agreement and shall be enforceable
in accordance with its terms notwithstanding any failure to agree on further
definitive agreements.
7.5 OPERATIONS PENDING CLOSING. The parties agree that they shall
continue to operate Health Network and International in the ordinary course of
business pending the Closing, provided, however, no party shall have any further
obligation to make capital contributions to those entities. Pending the Closing,
(i) the capital requirements of Health Network shall be met by one or more of
the News Corp Entities, by making unsecured loans, bearing interest at 8% per
annum, to Health Network, and (ii) the capital requirements of International
shall be met by one or more of the WebMD Entities, by making unsecured loans,
bearing interest at 8% per annum, to International.
7.6 FURTHER ACTIONS BY WEBMD ENTITIES. Each WebMD Entity agrees to
take any further action reasonably requested by News Corp to facilitate the
consummation of the transactions contemplated by this Agreement. Each of WebMD
Entities shall use its commercial best efforts to obtain promptly all necessary
waivers, consents and approvals from any governmental authority or any other
person for any exercise by it or by News Corp of their respective rights under
this Agreement and to take such other actions as may reasonably be requested by
News Corp to effect the purposes of this Agreement. The period of time provided
for any closing of the transactions contemplated by this Agreement may, at the
option of News Corp, be extended as necessary in order to obtain any such
waivers, consents and approvals. Without limiting the generality of the
foregoing, to the extent that the WebMD Entities or any of their affiliates has
heretofore acquired any assets (including domain names, URLs and registered
trademarks) formerly held by the predecessors of Health Network and Health &
Fitness, then such WebMD Entity shall, or shall cause its affiliate, to assign
such acquired assets to Health Network.
-7-
<PAGE> 9
7.7 FURTHER ACTIONS BY NEWS CORP ENTITIES. Each News Corp Entity
agrees to take any further action reasonably requested by WebMD to facilitate
the consummation of the transactions contemplated by this Agreement. Each of
News Corp Entities shall use its commercial best efforts to obtain promptly all
necessary waivers, consents and approvals from any governmental authority or any
other person for any exercise by it or by WebMD of their respective rights under
this Agreement and to take such other actions as may reasonably be requested by
WebMD to effect the purposes of this Agreement, including, without limitation,
the termination of International's relationship with Alliance Atlantis. The
period of time provided for any closing of the transactions contemplated by this
Agreement may, at the option of WebMD, be extended as necessary in order to
obtain any such waivers, consents and approvals.
7.8 CONTINUATION OF THE REGISTRATION RIGHTS AGREEMENT. The parties
acknowledge and agree that the Registration Rights Agreement, as modified
hereby, shall remain in full force and effect.
MISCELLANEOUS
8.1 CLOSING. The closing shall be held on the third business day
following receipt of the required approvals under the HSR Act at 10:00 AM
eastern time at the offices of Alston & Bird LLP, 90 Park Avenue, New York, New
York (the "CLOSING").
8.2 GOVERNING LAW. This Letter Agreement shall be governed by and
construed under the laws of the State of Delaware, without regard to its
principles of conflicts of laws.
8.3 ASSIGNMENT. This Letter Agreement may not be assigned by any
party hereto.
8.4 ENTIRE AGREEMENT; AMENDMENT. This Letter Agreement constitutes
the full and entire understanding and agreement among the parties hereto with
regard to the subjects hereof. Neither this Agreement nor any term hereof may
be amended, waived, discharged or terminated except by a written instrument
signed by the parties thereto.
8.5 NOTICES. All notices and other communications required or
permitted hereunder shall be given in writing and shall be deemed effectively
given upon personal delivery or three (3) business days following deposit with
the United States Postal Service, by certified mail, return receipt requested,
postage prepaid, or otherwise delivered by hand or by messenger, as follows:
If to any WebMD Entity: WebMD Corporation
400 The Lenox Building
3399 Peachtree Road
Atlanta, Georgia 30326
Attention: General Counsel
With a copy to: Alston & Bird LLP
1211 East Morehead Street
P.O. Drawer 34009
Charlotte, NC 28234-4009
Attention: H. Bryan Ives III, Esq.
-8-
<PAGE> 10
If to any News Corp Entity: The News Corporation Limited
c/o News America Incorporated
1211 Avenue of the Americas
new York, New York 10036
Facsimile (212) 768-2029
Attention: Arthur M. Siskind, Esq.
With a copy to: Squadron, Ellenoff, Plesent &
Sheinfield, LLP
551 Fifth Avenue
New York, New York 10176
Facsimile (212) 697-6686
Attention: Ira Sheinfeld, Esq.
or at such other address as any party shall have furnished to the other parties
in writing.
8.6 AGENT'S FEES. Each party (i) represents and warrants that it
has retained no finder or broker in connection with the transactions
contemplated by this Agreement, and (ii) hereby agrees to indemnify and to hold
the other party harmless of and from any liability for commissions or
compensation in the nature of an agent's, finder's or broker's fee to any broker
or other person or firm (and the cost and expenses of defending against such
liability or asserted liability) for which said party is responsible.
8.7 EXPENSES. Each party shall bear its own expenses and legal
fees (and expenses and disbursements of its legal counsel) incurred on its
behalf with respect to this Agreement and the transactions contemplated hereby.
8.8 CONSTRUCTION OF CERTAIN TERMS. The titles of the articles,
sections, and subsections of this Agreement are for convenience of reference
only and are not to be considered in construing this Agreement.
8.9 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
8.10 ENFORCEMENT.
8.10.1. REMEDIES AT LAW OR IN EQUITY. If any WebMD Entity or
any News Corp Entity shall default in any of its obligations under this
Agreement, News Corp or WebMD, respectively, may proceed to protect and enforce
its rights by suit in equity or action at law, whether for the specific
performance of any term contained in this Agreement, injunction against the
breach of any such term or in furtherance of the exercise of any power granted
in this Agreement, or to enforce any other legal or equitable right of such
party or to take any one of more of such actions.
8.10.2. REMEDIES CUMULATIVE; WAIVER. No remedy referred to
herein is intended to be exclusive, but each shall be cumulative and in addition
to any other remedy referred to above or otherwise available to a party at law
or in equity. No express or implied waiver by any party of any default shall be
a waiver of any future or subsequent default. The failure or delay of any party
in exercising any rights granted it hereunder shall not constitute a waiver of
any such right and any single or partial exercise of any particular right by
such party shall not exhaust the same or constitute a waiver of any other right
provided herein.
-9-
<PAGE> 11
8.11 PRESS RELEASES. WebMD and News Corp shall consult with each
other as to the form and substance of any press release or other public
disclosure related to this Letter Agreement or any transaction contemplated
hereby. No WebMD Entity or News Corp Entity shall issue any press release or
make any other public disclosure without the prior approval of News Corp (in the
case of a WebMD Entity) or WebMD (in the case of a News Corp Entity), which
approval shall not be unreasonably withheld or delayed; provided, however, that
nothing in this Section 8.11 shall be deemed to prohibit any WebMD Entity or
News Corp Entity from making any disclosure which its counsel deems necessary or
advisable in order to satisfy disclosure obligations imposed upon such entity by
any law, ordinance, regulation, reporting or licensing requirement, rule, or
statute applicable to such entity.
8.12 SEVERABILITY. In the event any one or more of the provisions
contained in this Agreement should be held invalid, illegal or unenforceable in
any respect, the validity, legality and enforceability of the remaining
provisions contained herein shall not in any way be affected or impaired
thereby. The parties shall endeavor in good faith negotiations to replace the
invalid, illegal or unenforceable provisions with valid provisions the economic
effect of which comes as close as possible to that of the invalid, illegal or
unenforceable provisions.
****************************
-10-
<PAGE> 12
If the foregoing accurately represents our agreement, please execute
below.
Sincerely yours,
WEBMD CORPORATION, for itself and the other WebMD
Entities
By: /s/ K. Robert Draughon
--------------------------------------------------
Name: K. Robert Draughon
Title: Executive Vice President, Business Development
AGREED:
THE NEWS CORPORATION LIMITED, for itself and the other News Corp Entities
By: /s/ John P. Nallen
-------------------------------
Title: Senior Vice President, Finance
Name: John P. Nallen
Date: 12/29/00
-------------------------------
-11-
<PAGE> 13
EXHIBIT 3.1
The Domestic Media Services Agreement shall be amended at the Closing
as follows:
1. For the purposes of the amendment to the Domestic Media
Services Agreement, the "Effective Period" shall commence on January 1, 2001 and
expire on August 31, 2010;
2. Section 2.1 shall be amended as follows:
(a) The first sentence shall be amended by deleting the
number "$240 million" and by substituting "$190 million" in lieu thereof;
(b) Schedule 1 to Section 2.1 shall be amended by
deleting it in its entirety and replacing it with the new Schedule 1 attached
hereto;
(c) The following shall be added at the end of Section
2.1: "Anything herein to the contrary notwithstanding: (a) to the extent that
the Company does not utilize the dollar amount of Advertising Services to be
provided to the Company during any television broadcast season as set forth on
Schedule 1 (as amended), the Company shall have the right to carry over, and the
News Parties and their Controlled Affiliates shall be obligated to provide, an
aggregate amount of up to 25% of such Advertising Services to be provided to and
in the next broadcast season, provided that such carryover right shall be
limited to the next broadcast season only (in other words, the carry over shall
not continue to accumulate beyond the next broadcast season), and provided,
further that there shall be no carryover past the end of the term, August 31,
2010; (b) the News Parties acknowledge that the Company intends to use the
Advertising Services to co-promote its products and services along with the
products and services of the Company's client base, and the Advertising Services
may be used for such co-promotion in a manner which features the products and
services of the Company's client base so long as the advertisements are designed
in a manner that also promotes the Company's products and services and
identifies the Company."
3. Section 3.1 shall be amended as follows: (a) by deleting the
number "$160 million" and by substituting the number "$15 million" in lieu
thereof; (b) by deleting the last sentence of Section 3.1 and by deleting
Schedule 3; (c) by inserting the following sentences at the end of Section 3.1:
"The Promotional Services shall be provided to the Company during the period
from January 1, 2001 through August 31, 2004 with the amount of such services to
be provided during each television broadcast season to be determined by the
Company (which shall have no obligation to spread its request for such services
over such period).
4. The first sentence of Section 3.5 shall be deleted with the
following substituted in lieu thereof: "The News Parties agree that they will
provide at least the Inherent Market Value of Promotional Services to the
Company set forth in Section 3.1 at the times and in the amounts reasonably
requested by the Company hereunder."
5. All references to Schedule 4 shall be amended to be references
to Schedule 3.
6. Section 9.11 shall be deleted in its entirety.