AGREEMENT AND PLAN OF MERGER
AMONG
XXXXX INTERCABLE, INC.,
COMCAST CORPORATION
AND
COMCAST JOIN HOLDINGS, INC.
Dated as of December 22, 1999
Table of Contents
Page
ARTICLE I THE MERGER......................................................................................2
Section 1.1. The Merger.............................................................................2
Section 1.2. Effective Time; Closing................................................................2
Section 1.3. Effect of the Merger...................................................................2
Section 1.4. Conversion of Shares...................................................................2
Section 1.5. Stock Options..........................................................................3
Section 1.6. Exchange of Shares; Stock Transfer Books...............................................3
Section 1.7. Fractional Shares......................................................................4
Section 1.8. Lost Certificates......................................................................5
Section 1.9. No Dissenters' Rights..................................................................5
ARTICLE II THE SURVIVING CORPORATION.......................................................................5
Section 2.1. Certificate of Incorporation...........................................................5
Section 2.2. Bylaws.................................................................................5
Section 2.3. Directors and Officers.................................................................5
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY...................................................5
Section 3.1. Organization and Standing..............................................................5
Section 3.2. Capitalization.........................................................................6
Section 3.3. Authority for Agreement................................................................6
Section 3.4. No Conflict............................................................................7
Section 3.5. Required Filings and Consents..........................................................7
Section 3.6. Compliance.............................................................................8
Section 3.7. Reports and Financial Statements.......................................................8
Section 3.8. Registration Statement.................................................................9
Section 3.9. Company Action.........................................................................9
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB.........................................9
Section 4.1. Organization and Standing..............................................................9
Section 4.2. Capitalization........................................................................10
Section 4.3. Authority for Agreement...............................................................10
Section 4.4. No Conflict...........................................................................10
Section 4.5. Required Filings and Consents.........................................................11
Section 4.6. Registration Statement................................................................11
Section 4.7. Reports and Financial Statements......................................................11
Section 4.8. Ownership of Merger Sub; No Prior Activities..........................................12
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ARTICLE V COVENANTS......................................................................................12
Section 5.1. Conduct of the Business Pending the Merger............................................12
Section 5.2. Registration Statement; Other Filings.................................................12
Section 5.3. Meeting of Company Shareholders.......................................................13
Section 5.4. Access to Information; Confidentiality................................................14
Section 5.5. Notification of Certain Matters.......................................................14
Section 5.6. Further Action; Commercially Reasonable Efforts.......................................14
Section 5.7. Shareholder Litigation................................................................14
Section 5.8. Indemnification.......................................................................15
Section 5.9. Public Announcements..................................................................16
Section 5.10. Affiliates............................................................................16
Section 5.11. Listing...............................................................................16
ARTICLE VI CONDITIONS.....................................................................................17
Section 6.1. Conditions to the Obligation of Each Party............................................17
Section 6.2. Conditions to Obligations of Parent and Merger Sub to Effect the
Merger................................................................................17
Section 6.3. Conditions to Obligations of the Company to Effect the Merger.........................19
ARTICLE VII TERMINATION, AMENDMENT AND WAIVER..............................................................19
Section 7.1. Termination...........................................................................19
Section 7.2. Effect of Termination.................................................................20
Section 7.3. Amendments............................................................................20
Section 7.4. Waiver................................................................................21
ARTICLE VIII GENERAL PROVISIONS.............................................................................21
Section 8.1. No Third Party Beneficiaries..........................................................21
Section 8.2. Entire Agreement......................................................................21
Section 8.3. Succession and Assignment.............................................................21
Section 8.4. Counterparts..........................................................................21
Section 8.5. Headings..............................................................................22
Section 8.6. Governing Law.........................................................................22
Section 8.7. Severability..........................................................................22
Section 8.8. Specific Performance..................................................................22
Section 8.9. Construction..........................................................................22
Section 8.10. Non-Survival of Representations and Warranties and Agreements.........................22
Section 8.11. Certain Definitions...................................................................22
Section 8.12. Fees and Expenses.....................................................................23
Section 8.13. Notices...............................................................................23
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (the "Agreement") dated as of
December 22, 1999, among Xxxxx Intercable, Inc., a Colorado corporation (the
"Company"), Comcast Corporation, a Pennsylvania corporation ("Parent"), and
Comcast JOIN Holdings, Inc., a Delaware corporation ("Merger Sub") and wholly
owned subsidiary of Parent.
W I T N E S S E T H:
WHEREAS, as of the date hereof, Parent and its subsidiaries
own 2,878,151 shares of the Company's Common Stock, par value $.01 per share
(the "Common Shares"), and 13,782,500 shares of the Company's Class A Common
Stock, par value $0.01 per share (the "Class A Shares")(the Common Shares and
Class A Shares are collectively referred to herein as the "Shares");
WHEREAS, Parent and the Company desire that the Company be
merged with and into Merger Sub, on the terms and conditions set forth herein;
WHEREAS, a special committee (the "Special Committee")
comprised of the independent directors of the Board of Directors of the Company
(the "Company Board") has unanimously determined that the Merger (as defined
herein) is fair to and in the best interests of the shareholders of the Company
other than Parent and its Affiliates (the "Public Shareholders") and has
unanimously approved and adopted this Agreement and the Merger and has
unanimously recommended that the Company Board and the shareholders of the
Company approve and adopt this Agreement and the Merger;
WHEREAS, the Company has received the written opinion of
Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation (the "Financial Advisor"),
the financial advisor to the Special Committee and the Company, that the
consideration to be received by the Public Shareholders for their Shares in the
Merger is fair to the Public Shareholders from a financial point of view;
WHEREAS, the Company Board has, by the unanimous action of the
directors present and voting, determined that the Merger is fair to and in the
best interests of the Public Shareholders and has resolved to approve and adopt
this Agreement and the Merger and to recommend the approval and adoption of this
Agreement and the Merger by the Company's shareholders;
WHEREAS, the respective Boards of Directors of Parent, and
Merger Sub have deemed it advisable and in the best interests of their
respective shareholders to consummate, and have approved, the merger of the
Company with and into Merger Sub (the "Merger"), upon the terms and subject to
the conditions set forth herein; and
Whereas, the Merger is intended to qualify for Federal income
tax purposes as a tax-free reorganization within the meaning of Section 368(a)
of the Internal Revenue Code of 1986, as amended (the "Code");
NOW, THEREFORE, in consideration of the foregoing and the
respective representations, warranties, covenants and agreements contained in
this Agreement and intending to be legally bound hereby, the parties hereto
agree as follows:
ARTICLE I
THE MERGER
Section 1.1. The Merger. Upon the terms and subject to the conditions set
forth in this Agreement, and in accordance with the applicable provisions of the
Colorado Business Corporation Act (the "CBCA") and the Delaware General
Corporation Law (the "DGCL"), at the Effective Time (as defined herein) the
Company shall be merged with and into Merger Sub. As a result of the Merger, the
separate corporate existence of the Company shall cease and Merger Sub shall
continue as the surviving corporation of the Merger. In its capacity as the
surviving corporation of the Merger, Merger Sub is sometimes referred to herein
as the "Surviving Corporation."
Section 1.2. Effective Time; Closing. As promptly as practicable after the
satisfaction or waiver of the conditions set forth in Article VI hereof or on
such later date as may be mutually agreed to by Parent and the Company, the
parties hereto shall cause the Merger to be consummated by filing articles of
merger (the "Articles of Merger") with the Secretary of State of the State of
Colorado, by filing a certificate of merger (the "Certificate of Merger") with
the Secretary of State of the State of Delaware, and making all other filings or
recordings required under the CBCA and the DGCL in connection with the Merger,
in such form as is required by, and executed in accordance with the relevant
provisions of, the CBCA and the DGCL. The Merger shall become effective at such
time as the Articles of Merger are duly filed with the Secretary of State of the
State of Colorado and the Certificate of Merger is duly filed with the Secretary
of State of the State of Delaware, or at such other time as the parties hereto
agree shall be specified in the Articles of Merger and the Certificate of Merger
(the date and time the Merger becomes effective, the "Effective Time"). On the
date of such filing, a closing shall be held at the offices of Dechert Price &
Xxxxxx, 4000 Xxxx Atlantic Tower, 0000 Xxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx
00000, or such other place as the parties shall agree.
Section 1.3. Effect of the Merger. At the Effective Time, the effect of the
Merger shall be as provided in the applicable provisions of the CBCA and 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 Merger Sub shall vest in the Surviving Corporation, and all
debts, liabilities, obligations, restrictions, disabilities and duties of the
Company and Merger Sub shall become the debts, liabilities, obligations,
restrictions, disabilities and duties of the Surviving Corporation.
Section 1.4. Conversion of Shares. At the Effective Time, by virtue of the
Merger and without any action on the part of Merger Sub, the Company or the
holders of any of the following securities:
(a) Each Share issued and outstanding immediately prior to the
Effective Time (other than Shares owned by Parent or Merger Sub and other than
Shares owned
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by the Company as treasury stock) shall be cancelled and shall be
converted automatically into the right to receive 1.4 shares of the Class A
Special Common Stock, par value $1.00 per share (the "Class A Special Common
Stock") of Parent. For purposes of this Agreement, the term "Merger
Consideration" means the shares of Class A Special Common Stock to be delivered
in exchange for the Shares pursuant to this Section 1.4(a) together with any
cash paid in lieu of fractional shares pursuant to Section 1.7, and the term
"Exchange Ratio" means the ratio of 1.4 shares of Class A Special Common Stock
to one Share. The Exchange Ratio shall be adjusted to reflect fully the effect
of any stock split, reverse stock split, stock dividend, recapitalization or
other like change without receipt of consideration with respect to either the
Shares or the Class A Special Common Stock occurring on or after the date hereof
and prior to the Effective Time.
(b) Each Share issued and outstanding immediately prior to the
Effective Time owned by Parent or Merger Sub, and each Share that is owned by
the Company as treasury stock shall be canceled and no payment or distribution
shall be made with respect thereto.
(c) Each share of Common Stock, par value $0.01 per share, of Merger
Sub issued and outstanding immediately prior to the Effective Time shall remain
outstanding and shall constitute one (1) validly issued, fully paid and
nonassessable share of Common Stock, par value $0.01 per share, of the Surviving
Corporation and shall constitute the only outstanding shares of capital stock of
the Surviving Corporation.
Section 1.5. Stock Options. As of the Effective Time, by virtue of the
Merger and without any action on the part of holders thereof, each option (a
"Company Option") which has been granted under the Company's 1992 Stock Option
Plan (the "Company Stock Option Plan") and is outstanding at the Effective Time,
whether or not then exercisable, shall be immediately exercisable in accordance
with Section 7.7. of the Company Stock Option Plan and, unless exercised, shall
expire in accordance with Article XII of the Company Stock Option Plan. At least
three days before the anticipated Effective Time, Parent shall deliver to each
holder of a Company Option an appropriate notice setting forth the holder's
rights with respect to such Company Options as described in the preceding
sentence and shall notify each holder that the Company Options may be exercised
conditioned upon the occurrence of the Effective Time and that any Company
Options not exercised at the Effective Time shall expire.
Section 1.6. Exchange of Shares; Stock Transfer Books.
(a) Parent shall designate a bank, trust company or transfer agent
reasonably satisfactory to the Company to act as the Exchange Agent (the
"Exchange Agent").
(b) As promptly as practicable, but in no event later than five
business days after the Effective Time, Parent shall cause the Exchange Agent to
mail to each record holder, as of the Effective Time, of an outstanding
certificate or certificates that immediately prior to the Effective Time
represented the Shares (collectively, the "Certificates") a form letter of
transmittal (which 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 instructions for use in effecting the
surrender of the Certificates for exchange and receiving the Merger
Consideration to which such holder shall be entitled under this Article I.
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(c) Upon surrender to the Exchange Agent of a Certificate, together
with such letter of transmittal duly executed, the holder of such Certificate
shall be entitled to receive in exchange therefor that number of shares of Class
A Special Common Stock that such holder has the right to receive under this
Article I, and such Certificate shall forthwith be cancelled. If any shares of
Class A Special Common Stock are to be issued to a person other than the person
in whose name the surrendered Certificate is registered, it shall be a condition
of exchange that such surrendered Certificate shall be properly endorsed or
otherwise in proper form for transfer and that the person requesting such
exchange shall pay any transfer or other taxes required by reason of the
exchange by a person other than the registered holder of the Certificate
surrendered or such person shall establish to the satisfaction of Parent that
such tax has been paid or is not applicable. Until surrendered in accordance
with the provisions of this Section 1.6, each Certificate shall represent, for
all purposes, the right to receive the Merger Consideration in respect of the
number of Shares evidenced by such Certificate. No dividends or other
distributions that are declared after the Effective Time on shares of Class A
Special Common Stock and payable to the holders of record thereof after the
Effective Time will be paid to holders of Certificates until such holders
surrender their Certificates. Upon such surrender, Parent shall deposit with the
Exchange Agent and shall cause the Exchange Agent to pay to the record holders
of the shares of Class A Special Common Stock representing Merger Consideration,
the dividends or other distributions, excluding interest, that became payable
after the Effective Time and were not paid because of the delay in surrendering
Certificates for exchange.
(d) From and after the Effective Time, there shall be no transfers on
the stock transfer books of the Company of the Shares that were outstanding
immediately prior to the Effective Time. If, after the Effective Time,
Certificates are presented to Parent or the Surviving Corporation, they shall be
cancelled and exchanged as provided in this Article I.
(e) None of Parent, the Company or the Surviving Corporation shall be
liable to any holder of Certificates with respect to any Merger Consideration
delivered to a public official pursuant to any applicable abandoned property,
escheat or similar law.
Section 1.7. Fractional Shares. Notwithstanding any other provision of this
Agreement, each holder of Shares who upon surrender of Certificates would be
entitled to receive fractional shares of Class A Special Common Stock shall not
be entitled to receive dividends on or vote such fractional shares of Class A
Special Common Stock and shall receive, in lieu of such fractional shares of
Class A Special Common Stock, cash or an amount equal to such fraction
multiplied by the Market Value. "Market Value" shall mean the closing price of
Class A Special Common Stock as reported on the Nasdaq National Market on the
trading day immediately preceding the date on which the Effective Time occurs.
All references in this Agreement to Class A Special Common Stock to be issued as
Merger Consideration shall be deemed to include any cash in lieu of fractional
shares of Class A Special Common Stock payable pursuant to this Section 1.7.
Section 1.8. Lost Certificates. If any Certificate shall have been lost,
stolen or destroyed, upon the making of an affidavit of the fact by the person
claiming such Certificate to be lost, stolen or destroyed and, if required by
the Exchange Agent, the posting by such person of a bond in such reasonable
amount as Parent may direct as indemnity against any claim that may be made
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against it with respect to such Certificate, Parent will issue in exchange for
such lost, stolen or destroyed Certificate, the shares of Class A Special Common
Stock and any cash in lieu of fractional shares, and any unpaid dividends and
distributions on shares of Class A Special Common Stock deliverable in respect
thereof pursuant to this Agreement.
Section 1.9. No Dissenters' Rights. In accordance with Section 0-000-000 of
the CBCA, holders of Shares shall not be entitled to dissenters' rights with
respect to the Merger.
ARTICLE II
THE SURVIVING CORPORATION
Section 2.1. Certificate of Incorporation. At the Effective Time and
subject to the terms of Section 5.8 hereof, the certificate of incorporation of
Merger Sub in effect at the Effective Time shall be the certificate of
incorporation of the Surviving Corporation until thereafter amended as provided
therein or by applicable law.
Section 2.2. Bylaws. Subject to the terms of Section 5.8 hereof, the bylaws
of Merger Sub in effect at the Effective Time shall be the bylaws of the
Surviving Corporation until thereafter amended as provided therein or by
applicable law.
Section 2.3. Directors and Officers. From and after the Effective Time,
until successors are duly elected or appointed and qualified in accordance with
applicable law, (i) the directors of Merger Sub at the Effective Time shall be
the directors of the Surviving Corporation, and (ii) the officers of Merger Sub
at the Effective Time shall continue as the officers of the Surviving
Corporation, in each case until their respective successors are duly elected or
appointed and qualified.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Parent and Merger Sub
as follows:
Section 3.1. Organization and Standing. The Company and each of its
subsidiaries is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization and has full
corporate power and authority and all necessary governmental approvals to own,
lease and operate its properties and to conduct its business as presently
conducted, except where the failure to be so organized, existing or in good
standing or to have such power, authority and governmental approvals would not,
individually or in the aggregate, have a Material Adverse Effect (as defined
herein) on the Company. The Company and each of its subsidiaries is duly
qualified or licensed to do business as a foreign corporation and is in good
standing in each jurisdiction where the character of the properties owned,
leased or operated by it or the nature of its business makes such qualification
or licensing necessary, except for such failures to be so qualified or licensed
and in good standing that would not, individually or in the aggregate, have a
Material Adverse Effect on the Company. The Company has furnished to Parent true
and complete copies of its articles of incorporation (the "Company Articles of
Incorporation") and bylaws (the "Company Bylaws"), each as amended to date,
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which documents are in full force and effect. Neither the Company nor any of its
subsidiaries is in violation of any provision of its articles of incorporation,
bylaws or equivalent organizational documents. "Material Adverse Effect" shall
mean, with respect to any party hereto, any change, event or effect that, when
taken together with all other adverse changes, events or effects, is or is
reasonably likely to be materially adverse to the business, operations,
prospects, properties, condition (financial or otherwise), assets, or
liabilities (including, without limitation, contingent liabilities) of such
party and its subsidiaries, taken as a whole.
Section 3.2. Capitalization. The authorized capital stock of the Company
consists of 5,550,000 Common Shares and 60,000,000 Class A Shares. As of
November 30, 1999, (i) 5,113,021 Common Shares and 36,937,420 Class A Shares are
issued and outstanding, all of which are validly issued, fully paid and
nonassessable, (ii) no Common Shares and no Class A Shares are held in the
treasury of the Company, and (iii) 21,225 Company Options were outstanding
pursuant the Company Stock Option Plan, each such option entitling the holder
thereof to purchase one Class A Share and 21,225 Class A Shares are authorized
and reserved for future issuance pursuant to the exercise of such Company
Options. The Company has previously furnished to Parent a detailed schedule of
outstanding Company Options including the exercise prices, vesting schedules and
existing provisions therefore. Except as set forth above, there are no options,
warrants, convertible securities, subscriptions, stock appreciation rights,
phantom stock plans or stock equivalents or other rights, agreements,
arrangements or commitments (contingent or otherwise) of any character issued or
authorized by the Company relating to the issued or unissued capital stock of
the Company or obligating the Company to issue or sell any shares of capital
stock of, or options, warrants, convertible securities, subscriptions or other
equity interests in, the Company. All Shares subject to issuance as aforesaid,
upon issuance on the terms and conditions specified in the instruments pursuant
to which they are issuable, will be duly authorized, validly issued, fully paid
and nonassessable.
Section 3.3. Authority for Agreement. The Company has all necessary power
and authority to execute and deliver this Agreement, to perform its obligations
hereunder and to consummate the Merger and the transactions contemplated by this
Agreement. The execution, delivery and performance by the Company of this
Agreement, and the consummation by the Company of the Merger and the
transactions contemplated by this Agreement, have been duly authorized by all
necessary corporate action (including without limitation the unanimous approval
of the members of the Special Committee) and no other corporate proceedings on
the part of the Company are necessary to authorize this Agreement or to
consummate the Merger or the transactions contemplated by this Agreement (other
than, with respect to the Merger, the approval and adoption of the Merger and
this Agreement by the affirmative vote of (i) the holders of two-thirds of the
outstanding Common Shares voting as a single class, (ii) the holders of
two-thirds of the outstanding Class A Shares voting as a single class and (iii)
the holders of a majority of the outstanding Shares that are not beneficially
owned by Parent or its Affiliates voting together as a single class with each
such Share being entitled to one vote for purposes of the approval set forth in
this clause (iii) (the approvals referred to in clauses (i), (ii) and (iii) are
sometimes referred to herein as the "Company Shareholder Approvals"), and the
filing and recordation of appropriate merger documents as required by the CBCA
and the DGCL). This Agreement has been duly executed and delivered by the
Company and, assuming the due authorization, execution and delivery by Parent
and Merger Sub, constitutes a legal, valid and binding obligation of the Company
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enforceable against the Company in accordance with its terms. The Company
Shareholder Approvals are the only votes of the Company's shareholders necessary
to approve this Agreement, the Merger and the transactions contemplated by this
Agreement.
Section 3.4. No Conflict. Except with respect to receipt of any applicable
Franchise Approvals and FCC Consents (each as defined herein), the execution and
delivery of this Agreement by the Company do not, and the performance of this
Agreement by the Company and the consummation of the Merger and the transactions
contemplated by this Agreement will not, (i) conflict with or violate the
Company Articles of Incorporation or Company Bylaws, (ii) conflict with or
violate any United States federal state or local or any foreign statute, law,
rule, regulation, ordinance, code, order, judgment, decree or any other
requirement or rule of law (a "Law") applicable to the Company or any of its
subsidiaries or by which any property or asset of the Company or any of its
subsidiaries is bound or affected, or (iii) result in any breach of or
constitute a default (or an event which with notice or lapse of time or both
would become a default) under, or give to others any right of termination,
amendment, acceleration or cancellation of, or result in the creation of a lien
or other encumbrance on any property or asset of the Company or any of its
subsidiaries pursuant to, any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other instrument or obligation
to which the Company or any of its subsidiaries is a party or by which the
Company or any of its subsidiaries or any property or asset of any of them is
bound or affected, except in the case of clauses (ii) and (iii) above for any
such conflicts, violations, breaches, defaults or other occurrences which would
not, individually or in the aggregate, have a Material Adverse Effect on the
Company, or prevent or materially delay the performance by the Company of any of
its obligations under this Agreement or the consummation of the Merger or the
transactions contemplated by this Agreement.
Section 3.5. Required Filings and Consents. The execution and delivery of
this Agreement by the Company do not, and the performance of this Agreement by
the Company will not, require any consent, approval, authorization or permit of,
or filing with or notification to, any United States federal, state or local or
any foreign government or any court, administrative or regulatory agency or
commission or other governmental authority or agency, domestic or foreign (a
"Governmental Entity"), except (i) for applicable requirements, if any, of state
securities or "blue sky" laws ("Blue Sky Laws") and filing and recordation of
appropriate merger documents as required by the CBCA and the DGCL, (ii) the
filing by Parent and the Company of the Transaction Disclosure Documents (as
defined herein) with the Securities and Exchange Commission (the "SEC") in
accordance with the Securities Act of 1933, as amended (the "Securities Act")
and the Securities Exchange Act of 1934, as amended (the "Exchange Act"), (iii)
for applicable actions, if any, by the Federal Communications Commission (the
"FCC") granting its consent to the transfer of ownership of all licenses,
permits, construction permits and other authorizations issued by the FCC in
connection with the business and operations of the Company and its subsidiaries,
in connection with the consummation of the Merger and the transactions
contemplated hereby (the "FCC Consents") and for consents or approvals of, or
notices to, such analogous state or local regulatory authorities with respect to
transfer of ownership, in connection with the Merger and the transactions
contemplated hereby, of any license, franchise (including without limitation any
written "Franchise" within the meaning of Section 602(8) of the Communications
Act), permit, construction permit or other authorization issued by such state or
local regulatory authorities and held by the Company or its subsidiaries
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(the "Franchise Approvals"), and (iv) where failure to obtain such consents,
approvals, authorizations or permits, or to make such filings or notifications,
would not, individually or in the aggregate, have a Material Adverse Effect on
the Company, or prevent or materially delay the performance by the Company of
any of its obligations under this Agreement or the consummation of the Merger or
the transactions contemplated by this Agreement.
Section 3.6. Compliance. Neither the Company nor any of its subsidiaries is
in conflict with, or in default or violation of, (i) any Law applicable to the
Company or any of its subsidiaries or by which any property or asset of the
Company or any of its subsidiaries is bound or affected, or (ii) any note, bond,
mortgage, indenture, contract, agreement, lease, license, permit, franchise or
other instrument or obligation to which the Company or any of its subsidiaries
is a party or by which the Company or any of its subsidiaries or any property or
asset of the Company or any of its subsidiaries is bound or affected, except in
the case of clauses (i) and (ii) above for any such conflicts, defaults or
violations that would not, individually or in the aggregate, have a Material
Adverse Effect on the Company, or prevent or materially delay the performance by
the Company of any of its obligations under this Agreement or the consummation
of the Merger or the transactions contemplated by this Agreement.
Section 3.7. Reports and Financial Statements.
(a) The Company has filed all forms, reports and documents required to
be filed by it with the SEC since December 31, 1998, and has heretofore made
available to Parent, in the form filed with the SEC, (i) its Annual Report on
Form 10-K for the fiscal year ended December 31, 1998, and (ii) its Quarterly
Reports on Form 10-Q for the periods ended March 31, June 30 and September 30,
1999 (the forms, reports and other documents referred to in clauses (i) and (ii)
above, together with any amendments or supplements thereto, being referred to
herein, collectively, as the "Company SEC Reports"). The Company SEC Reports (i)
were prepared in all material respects in accordance with the applicable
requirements of the Securities Act and the Exchange Act, as the case may be, and
the rules and regulations thereunder and (ii) did not at the time they were
filed contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to make the
statements made therein, in the light of the circumstances under which they were
made, not misleading.
(b) Each of the consolidated financial statements contained in the
Company SEC Reports complies as to form in all material respects with applicable
accounting requirements and the published rules and regulations of the SEC with
respect thereto and was prepared in accordance with United States generally
accepted accounting principles ("GAAP") applied on a consistent basis throughout
the periods indicated (except as may be indicated in the notes thereto or, in
the case of the unaudited interim financial statements, as permitted by Form
10-Q under the Exchange Act) and each fairly presented the consolidated
financial position, results of operations and cash flows of the Company and its
consolidated subsidiaries as at the respective dates thereof and for the
respective periods indicated therein.
Section 3.8. Registration Statement. None of the information to be supplied
by the Company for inclusion or incorporation by reference in the Registration
Statement will, at the time that the Registration Statement is declared
effective, contain any untrue statement of a material fact or omit to state any
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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. If at any time prior to the Effective Time any event with respect to
the Company should occur that is required to be described in an amendment of, or
a supplement to, the Registration Statement, such event shall be so described,
and such amendment or supplement shall be promptly filed with the SEC and, as
required by law, disseminated to the shareholders of the Company, and such
amendment or supplement shall comply in all material respects with all
provisions of the Securities Act. For purposes of this Section 3.8, any
statement which is made or incorporated by reference in the Registration
Statement shall be deemed modified or superseded to the extent any later filed
document incorporated by reference in the Registration Statement or any
statement included in the Registration Statement modifies or supersedes such
earlier statement.
Section 3.9. Company Action.
The Company represents that (i) at a meeting duly called and
held on December 21, 1999, the Special Committee has unanimously (A) determined
that this Agreement and the transactions contemplated hereby, including the
Merger, are fair to and in the best interests of the Public Shareholders, (B)
approved and authorized this Agreement, the Merger and the transactions
contemplated hereby, and (C) recommended that the shareholders of the Company
approve and adopt this Agreement and the Merger, (ii) at a meeting duly called
and held on December 21, 1999, the Company Board has by unanimous vote of all
directors present and voting and based in part upon the approval and
recommendation of the Special Committee set forth in the preceding clause (i)
(A) determined that this Agreement and the transactions contemplated hereby,
including the Merger, are fair to and in the best interests of the Public
Shareholders, (B) approved and authorized this Agreement, the Merger and the
transactions contemplated hereby, and (C) recommended that the shareholders of
the Company approve and adopt this Agreement and the Merger, and (iii) the
Financial Advisor has delivered to the Special Committee and to the Company
Board its written opinion dated December 21, 1999 (the "Fairness Opinion") that
the consideration to be received by the Public Shareholders in the Merger is
fair to such holders from a financial point of view. A copy of such opinion has
been provided to Parent.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
Parent and Merger Sub represent and warrant to the Company as
follows:
Section 4.1. Organization and Standing. Each of Parent and Merger Sub is a
corporation duly organized, validly existing and in good standing under the laws
of its jurisdiction of incorporation and has full corporate power and authority
to conduct its business as presently conducted and to enter into and perform
this Agreement and to consummate the Merger and the transactions contemplated by
this Agreement.
Section 4.2. Capitalization. The authorized capital stock of Parent
consists of 200,000,000 shares of Class A Common Stock, par value $1.00 per
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share ("Class A Common Stock"), 2,500,000,000 shares of Class A Special Common
Stock and 50,000,000 shares of Class B Common Stock, par value $1.00 per share
("Class B Common Stock"). As of November 30, 1999, 25,993,380 shares of Class A
Common Stock, 716,334,793 shares of Class A Special Common Stock and 9,444,375
shares of Class B Common Stock were issued and outstanding. All outstanding
shares of Parent's capital stock are, and the shares of Class A Special Common
Stock to be issued in accordance with this Agreement, when issued in accordance
with this Agreement, will be validly issued, fully paid and non-assessable.
Section 4.3. Authority for Agreement. Each of Parent and Merger Sub has all
necessary corporate power and authority to execute and deliver this Agreement,
to perform its obligations hereunder and to consummate the Merger and the
transactions contemplated by this Agreement. The execution, delivery and
performance by each of Parent and Merger Sub of this Agreement, and the
consummation by each of Parent and Merger Sub of the transactions contemplated
by this Agreement, has been duly authorized by all necessary corporate action
and no other corporate proceedings on the part of Parent or Merger Sub are
necessary to authorize this Agreement or to consummate the Merger or the
transactions contemplated by this Agreement (other than, with respect to the
Merger, the filing and recordation of appropriate merger documents as required
by the CBCA and the DGCL). This Agreement has been duly executed and delivered
by Parent and Merger Sub and, assuming the due authorization, execution and
delivery by the Company, constitutes a legal, valid and binding obligation of
each of Parent and Merger Sub enforceable against Parent and Merger Sub in
accordance with its terms.
Section 4.4. No Conflict. Except with respect to receipt of any applicable
Franchise Approvals and FCC Consents, the execution and delivery of this
Agreement by Parent and Merger Sub do not, and the performance of this Agreement
by Parent and Merger Sub and the consummation of the Merger and the transactions
contemplated by this Agreement will not, (i) conflict with or violate the
articles of incorporation or bylaws of Parent or Merger Sub, (ii) conflict with
or violate any Law applicable to Parent or Merger Sub or any of their respective
subsidiaries or by which any property or asset of Parent or Merger Sub or their
respective subsidiaries is bound or affected, or (iii) result in any breach of
or constitute a default (or an event which with notice or lapse of time or both
would become a default) under, or give to others any right of termination,
amendment, acceleration or cancellation of, or result in the creation of a lien
or other encumbrance on any property or asset of Parent or Merger Sub or their
respective subsidiaries pursuant to, any note, bond, mortgage, indenture,
contract, agreement, lease, license, permit, franchise or other instrument or
obligation to which Parent or Merger Sub or their respective subsidiaries is a
party or by which Parent or Merger Sub or their respective subsidiaries or any
property or asset of any of them is bound or affected, except in the case of
clauses (ii) and (iii) for any such conflicts, violations, breaches, defaults or
other occurrences which would not, individually or in the aggregate, prevent or
delay the performance by Parent or Merger Sub of their respective obligations
under this Agreement or the consummation of the Merger or the transactions
contemplated by this Agreement.
Section 4.5. Required Filings and Consents. The execution and delivery of
this Agreement by Parent and Merger Sub do not, and the performance of this
Agreement by Parent and Merger Sub will not, require any consent, approval,
authorization or permit of, or filing with or notification to, any Governmental
Entity, except (i) for applicable requirements, if any, of state securities or
Blue Sky Laws and filing and recordation
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of appropriate merger documents as required by the CBCA and the DGCL, (ii) the
filing by Parent and the Company of the Transaction Disclosure Documents with
the SEC in accordance with the Securities Act and the Exchange Act, (iii) for
applicable FCC Consents and Franchise Approvals, if any, and (iv) where failure
to obtain such consents, approvals, authorizations or permits, or to make such
filings or notifications, would not, individually or in the aggregate, prevent
or delay the performance by Parent or Merger Sub of any of their respective
obligations under this Agreement or the consummation of the Merger or the
transactions contemplated by this Agreement.
Section 4.6. Registration Statement. None of the information to be supplied
by Parent or Merger Sub for inclusion or incorporation by reference in the
Registration Statement (except for information about the Company furnished by
the Company to Parent) will, at the time the Registration Statement is declared
effective, 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. If at any time prior to the Effective Time any event with respect to
Parent, its officers and directors or any of its subsidiaries shall occur and is
required to be described in an amendment of, or a supplement to, the
Registration Statement, such event shall be so described, and such amendment or
supplement shall be promptly filed with the SEC and, as required by law,
disseminated to the shareholders of the Company. For purposes of this Section
4.6, any statement which is made or incorporated by reference in the
Registration Statement shall be deemed modified or superseded to the extent any
later filed document incorporated by reference in the Registration Statement or
any statement included in the Registration Statement modifies or supersedes such
earlier statement.
Section 4.7. Reports and Financial Statements.
(a) Parent has filed all forms, reports and documents required to be
filed by it with the SEC since December 31, 1998, and has made available to the
Company, in the form filed with the SEC, (i) its Annual Report on Form 10-K for
the fiscal year ended December 31, 1998, and (ii) its Quarterly Reports on Form
10-Q for the periods ended March 31, June 30 and September 30, 1999 (the forms,
reports and other documents referred to in clauses (i) and (ii) above, together
with any amendments or supplements thereto, being referred to herein,
collectively, as the "Parent SEC Reports"). The Parent SEC Reports (i) were
prepared in all material respects in accordance with the applicable requirements
of the Securities Act, and the Exchange Act, as the case may be, and the rules
and regulations thereunder and (ii) did not at the time they were filed contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements made
therein, in the light of the circumstances under which they were made, not
misleading.
(b) Each of the consolidated financial statements contained in the
Parent SEC Reports complies as to form in all material respects with applicable
accounting requirements and the published rules and regulations of the SEC with
respect thereto and was prepared in accordance with GAAP applied on a consistent
basis throughout the periods indicated (except as may be indicated in the notes
thereto or, in the case of the unaudited interim financial statements, as
permitted by Form 10-Q under the Exchange Act) and each fairly presented the
consolidated financial position, results of operations and cash flows of Parent
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and its consolidated subsidiaries as at the respective dates thereof and for the
respective periods indicated therein.
Section 4.8. Ownership of Merger Sub; No Prior Activities.
(a) Merger Sub was formed solely for the purpose of engaging in the
transactions contemplated by this Agreement.
(b) As of the date hereof through the Effective Time, all of the
outstanding capital stock of the Merger Sub will be owned directly by Parent.
(c) As of the date hereof and as of the Effective Time, except for
obligations or liabilities incurred in connection with its incorporation or
organization and the transactions contemplated by this Agreement, Merger Sub has
not and will not have incurred, directly or indirectly, through any subsidiary
or affiliate, 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.
ARTICLE V
COVENANTS
Section 5.1. Conduct of the Business Pending the Merger. The Company
covenants and agrees that between the date of this Agreement and the Effective
Time, unless Parent shall have otherwise consented to or approved such action,
(a) the businesses of the Company and its subsidiaries shall be conducted only
in, and the Company and its subsidiaries shall not take any action except in,
the ordinary course of business and in a manner consistent with prior practice,
(b) the Company and its subsidiaries shall use their commercially reasonable
best efforts to preserve substantially intact their business organizations, to
keep available the services of their current officers and employees and to
preserve the current relationships of the Company and its subsidiaries with
customers, suppliers and other persons with which the Company or its
subsidiaries has significant business relations, and (c) the Company and its
subsidiaries shall not take any action that would make the Company's
representations and warranties set forth herein untrue in any material respect.
Section 5.2. Registration Statement; Other Filings. (a) As promptly as
practicable after the execution of this Agreement, the Company and Parent will
jointly prepare and file with the SEC a preliminary proxy statement relating to
the Merger and this Agreement (such proxy statement, as amended or supplemented,
the "Proxy Statement"), and Parent will prepare and file with the SEC a
registration statement on Form S-4 (the "Registration Statement"), in which the
Proxy Statement shall be included as a prospectus. Parent will use reasonable
best efforts to cause the Registration Statement to be declared effective under
the Securities Act as soon as practicable after such filing, and will take all
actions required under applicable federal or state securities laws in connection
with the issuance of Parent's shares of Class A Special Common Stock in the
Merger. Each party will notify the other promptly upon the receipt of any
comments from the SEC or its staff and of any request by the SEC or its staff or
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any other government officials for amendments or supplements to the Proxy
Statement, the Registration Statement or any other filing or for additional
information and will supply the other party with copies of all correspondence
between such party 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 Registration Statement, the Proxy Statement or the Merger. Whenever any
event occurs that is required to be set forth in an amendment or supplement to
the Registration Statement or the Proxy Statement, the relevant party will
promptly inform the other party of such occurrence and cooperate in filing with
the SEC or its staff or any other government officials, and/or mailing to
shareholders of the Company, such amendment or supplement. The Proxy Statement
and Registration Statement, together with any supplements or amendments thereto,
and any other filings required to be made with the SEC regarding the Merger,
this Agreement and the transactions contemplated hereby, are sometimes referred
to herein as the "Transaction Disclosure Documents."
(b) The Transaction Disclosure Documents will include the
recommendation of the Special Committee in favor of approval of this Agreement
(except that the Special Committee may withdraw, modify or refrain from making
such recommendation to the extent that the Special Committee determines in good
faith after consultation with outside legal counsel that failure to withdraw,
modify or refrain from making such recommendation would constitute a breach of
the Special Committee's fiduciary duties under applicable law).
(c) The Transaction Disclosure Documents will include the
recommendation of the Board of Directors of the Company in favor of approval of
this Agreement (except that the Board of Directors of the Company may withdraw,
modify or refrain from making such recommendation to the extent that the Board
of Directors determines in good faith after consultation with outside legal
counsel that failure to withdraw, modify or refrain from making such
recommendation would constitute a breach of the Board's fiduciary duties under
applicable law).
(d) To the extent that the Special Committee or the Board withdraws,
modifies or refrains from making their respective recommendations pursuant to
Section 5.2(b) or (c) hereof, the Transaction Disclosure Documents will reflect
such action.
(e) The Company represents that the Financial Advisor has consented to
the inclusion of references to, and the text of, the Fairness Opinion in the
Transaction Disclosure Documents.
Section 5.3. Meeting of Company Shareholders. Promptly after the date
hereof, the Company will take all action necessary in accordance with the CBCA
and the Company Articles of Incorporation the Company Bylaws to convene a
meeting of its shareholders (the "Company Shareholders' Meeting") to be held as
promptly as practicable for the purpose of obtaining the Company Shareholder
Approvals. The Company will use its reasonable best efforts to solicit from its
shareholders proxies in favor of the approval of this Agreement and the Merger,
and will take all other action necessary or advisable to secure the vote or
consent of its shareholders required by the CBCA to obtain such approvals.
Parent shall vote, or cause to be voted, all of the Shares then owned by it and
any of its subsidiaries in favor of the approval of this Agreement and the
Merger.
Section 5.4. Access to Information; Confidentiality.
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(a) From the date hereof to the Effective Time, the Company and its
officers, directors, employees, auditors and agents shall not impede the access
of Parent and Merger Sub or their officers, directors, employees, auditors and
agents at all reasonable times to the officers, employees, agents, properties,
offices, plants and other facilities, books and records of the Company and its
subsidiaries, and shall furnish Parent and Merger Sub with financial, operating
and other data and information as Parent or Merger Sub, through its officers,
directors, employees, auditors or agents, may reasonably request.
(b) No investigation pursuant to this Section 5.4 shall affect any
representation or warranty in this Agreement of any party hereto or any
condition to the obligations of the parties hereto.
Section 5.5. Notification of Certain Matters. The Company shall give prompt
notice to Parent, and Parent shall give prompt notice to the Company, of (i) the
occurrence, or nonoccurrence, of any event which would be likely to cause any
representation or warranty contained in this Agreement to be untrue or
inaccurate and (ii) any failure by such party (or Merger Sub, in case of Parent)
to comply with or satisfy any covenant, condition or agreement to be complied
with or satisfied by it hereunder; provided, however, that the delivery of any
notice pursuant to this Section 5.5 shall not limit or otherwise affect the
remedies available hereunder to the party receiving such notice.
Section 5.6. Further Action; Commercially Reasonable Efforts. Upon the
terms and subject to the conditions hereof, each of the parties hereto shall use
commercially reasonable efforts to take, or cause to be taken, all appropriate
action, and to do, or cause to be done, all things necessary, proper or
advisable under applicable laws and regulations to consummate and make effective
the Merger and the other transactions contemplated by this Agreement, including,
without limitation, using commercially reasonable efforts to obtain all
licenses, permits, consents, approvals, authorizations, qualifications and
orders of each Governmental Entity and parties to contracts with the Company and
its subsidiaries as are necessary for the consummation of the Merger and the
other transactions contemplated by this Agreement and to fulfill the conditions
set forth in Article VI. In case at any time after the Effective Time any
further action is necessary or desirable to carry out the purposes of this
Agreement, the proper officers of each party to this Agreement and the Surviving
Corporation shall use commercially reasonable efforts to take all such action.
Notwithstanding the foregoing, Parent and Merger Sub shall not be required to
pay any consideration (other than customary filing fees and the like), divest or
otherwise rearrange the composition of any assets or agree to any conditions,
restrictions, requirements or other obligations which Parent determines to be
unreasonably adverse or burdensome to Parent or the Surviving Corporation or
which have any of the effects set forth in clauses (i) - (vi) of Section 6.2(a).
Section 5.7. Shareholder Litigation. The Company shall give Parent the
opportunity to participate in the defense or settlement of any shareholder
litigation against the Company and its directors relating to the transactions
contemplated by this Agreement including the cases styled Susser x. Xxxxx, et
al., Famet x. Xxxxx, et al., Harbor Finance Partners Ltd. x. Xxxxx, et al., and
Harbor Finance Partners Ltd. x. Xxxxxxx, et al., all pending in the Xxxxxxxx
Xxxxx, Xxxx xxx Xxxxxx xx Xxxxxx, Xxxxx of Colorado (Case Nos. 99CV5119,
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99CV5132, 99CV2568 and 99CV7150) ; provided, however, that no such settlement
shall be agreed to without Parent's consent.
Section 5.8. Indemnification.
(a) It is understood and agreed that all rights to indemnification by
the Company now-existing in favor of each present director and officer of the
Company as provided in the Company Articles of Incorporation or the Company
Bylaws, in each case as in effect on the date of this Agreement, or pursuant to
any other agreements in effect on the date hereof, shall survive the Merger and
shall continue in full force and effect for a period of at least six (6) years
from the Effective Time. Consistent with the foregoing, for a period of at least
six (6) years from the Effective Time, the Articles of Incorporation and Bylaws
of the Surviving Corporation shall contain provisions no less favorable with
respect to indemnification than are set forth, respectively, in the Company
Articles of Incorporation and Company Bylaws, which provisions shall not be
amended, repealed or otherwise modified during such six (6)-year period in any
manner that would adversely affect the rights thereunder of individuals who,
immediately prior to the Effective Time, were directors or officers of the
Company.
(b) The Company shall, to the fullest extent permitted under applicable
law and regardless of whether the Merger becomes effective, with respect to any
claim brought within the applicable statute of limitations relating thereto,
indemnify and hold harmless, and, after the Effective Time, the Surviving
Corporation shall, to the fullest extent permitted under applicable law,
indemnify and hold harmless, each present director and officer of the Company
and its subsidiaries (collectively, the "Indemnified Parties") against all costs
and expenses (including attorneys' fees), judgments, fines, losses, claims,
damages, liabilities and settlement amounts paid in connection with any claim,
action, suit, proceeding or investigation (whether arising before or after the
Effective Time), whether civil, criminal, administrative or investigative,
arising out of or pertaining to any action or omission in their capacity as an
officer or director, whether occurring before or after the Effective Time (and
shall pay any expenses in advance of the final disposition of such action or
proceeding to each Indemnified Party to the fullest extent permitted under the
CBCA and the DGCL, upon receipt from the Indemnified Party to whom expenses are
advanced of any undertaking to repay such advances required under the CBCA and
the DGCL). In the event of any such claim, action, suit, proceeding or
investigation, (i) the Company or the Surviving Corporation, as the case may be,
shall pay the reasonable fees and expenses of counsel selected by the
Indemnified Parties, which counsel shall be reasonably satisfactory to the
Company or the Surviving Corporation, promptly after statements therefor are
received and (ii) the Company and the Surviving Corporation shall cooperate in,
and may control, the defense of any such matter; provided further that if any
D&O Insurance (as defined herein) in effect at the time shall require the
insurance company to control such defense in order to obtain the full benefits
of such insurance and such provision is consistent with the provisions of the
Company's D&O Insurance existing as of the date of this Agreement, then the
provisions of such policy shall govern. Notwithstanding the foregoing, neither
the Company nor the Surviving Corporation shall be liable for any settlement
effected without its written consent (which consent shall not be unreasonably
withheld). In addition, neither the Company nor the Surviving Corporation shall
be obligated pursuant to this Section 5.8(b) to pay the fees and expenses of
more than one counsel (plus appropriate local counsel) for
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all Indemnified Parties in any single action. All rights under this Section
5.8(b) shall be deemed to be a contract between the Company and each of the
Indemnified Parties.
(c) The Surviving Corporation shall use its reasonable best efforts to
maintain in effect for six (6) years from the Effective Time, if available, the
current directors' and officers' liability insurance policies ("D&O Insurance")
maintained by the Company covering those persons who are currently covered by
such policies (provided that the Surviving Corporation may substitute therefor
policies of at least the same coverage containing terms and conditions which are
not materially less favorable) with respect to matters occurring prior to the
Effective Time; provided, however, that in no event shall the Surviving
Corporation be required to expend pursuant to this Section 5.8(c) more than an
amount per year equal to two hundred percent (200%) of current annual premiums
paid by the Company for such insurance. In the event that, but for the proviso
to the immediately preceding sentence, the Surviving Corporation would be
required to expend more than two hundred percent (200%) of current annual
premiums, the Surviving Corporation shall obtain the maximum amount of such
insurance, if any, obtainable by payment of annual premiums equal to two hundred
percent (200%) of current annual premiums.
(d) In the event the Surviving Corporation or any of its 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 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 provision shall be made so
that the successors and assigns of the Surviving Corporation shall assume the
obligations set forth in this Section 5.8.
Section 5.9. Public Announcements. Parent and the Company shall consult
with each other before issuing any press release or otherwise making any public
statements with respect to this Agreement or 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 law or any listing agreement with a national
securities exchange to which Parent or the Company is a party.
Section 5.10. Affiliates. At least 30 days prior to the Effective Time, the
Company and Parent shall agree as to persons (other than Parent and its
subsidiaries) who are, at the time the Merger is submitted for approval to the
shareholders of the Company, "affiliates" of the Company for purposes of Rule
145 under the Securities Act. The Company shall use its best efforts to cause
each such person to deliver to Parent on or prior to the Effective Time a letter
(an "Affiliate Letter") to the effect that such person will not offer to sell,
sell or otherwise dispose of any shares of Class A Special Common Stock issued
in the Merger, except pursuant to an effective registration statement, in
compliance with Rule 145, as amended from time to time, or in a transaction
which, in the opinion of legal counsel satisfactory to Parent, is exempt from
the registration requirements of the Securities Act. Parent shall not be
required to maintain the effectiveness of the Registration Statement for the
purpose of resale of the Class A Special Common Stock by such affiliates and the
certificates representing the Class A Special Common Stock received by such
affiliates in the Merger shall bear a customary legend regarding applicable
Securities Act restrictions and the provisions of this Section 5.10.
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Section 5.11. Listing. Parent shall use its best efforts to cause the
shares of Class A Special Common Stock to be issued to holders of Common Shares
and Class A Shares pursuant to this Agreement to be listed on the Nasdaq
National Market subject to official notice of issuance, prior to the Effective
Time.
ARTICLE VI
CONDITIONS
Section 6.1. Conditions to the Obligation of Each Party. The respective
obligations of Parent, Merger Sub and the Company to effect the Merger are
subject to the satisfaction of the following conditions, unless waived in
writing by all parties:
(a) Shareholder Approval. The Company Shareholder Approvals shall have
been obtained.
(b) No Injunctions. 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 shall be in effect.
(c) No Consents. All actions by or in respect of or filings with any
governmental body, agency, official or authority required to permit the
consummation of the Merger shall have been obtained or made.
(d) Registration. The Registration Statement (as amended or
supplemented) shall have become effective under the Securities Act and shall not
be subject to any stop order, and no action, suit, proceeding or investigation
by the Commission seeking a stop order or to suspend the effectiveness of the
Registration Statement shall have been initiated or threatened. Parent shall
have received all state securities law or blue sky permits and authorizations
necessary to issue the Merger Consideration as contemplated hereby and such
permits and authorizations shall be in full force and effect.
(e) Nasdaq Listing. The shares of Class A Special Common Stock to be
issued in the Merger shall have been authorized for listing on the Nasdaq
National Market subject only to official notice of issuance.
Section 6.2. Conditions to Obligations of Parent and Merger Sub to Effect
the Merger. The obligations of Parent and Merger Sub to effect the Merger are
further subject to satisfaction or waiver at or prior to the Effective Time of
the following conditions:
(a) there shall not have been threatened, instituted or be pending any
action, proceeding, application or counterclaim by any Governmental Entity or by
any other person before any court or governmental regulatory or administrative
agency, authority or tribunal (i) challenging or seeking to make illegal,
materially delay or otherwise directly or indirectly restrain, prohibit or
enjoin or make more costly the consummation of the Merger and the other
transactions contemplated by this Agreement, (ii) seeking to obtain any damages
from the Company, Parent, Merger Sub or any of their respective Affiliates which
directly or indirectly relate to the consummation of the Merger and the other
transactions contemplated by this Agreement, (iii) seeking to prohibit or limit
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the ownership or operation by the Company, Parent, Merger Sub or any of their
subsidiaries of all or any portion of their business or assets, or to compel the
Company, Parent, Merger Sub or any of their subsidiaries to dispose of or hold
separate all or any portion of their businesses or assets, as a result of the
Merger and the other transactions contemplated by this Agreement; (iv) seeking
to impose or confirm limitations on the ability of Parent or Merger Sub or any
of their Affiliates to exercise effectively full rights of ownership of any
Shares or any securities of the Surviving Corporation, including, without
limitation, the right to vote any Shares or any securities of the Surviving
Corporation on all matters properly presented to the Company's or the Surviving
Corporation's shareholders, including, without limitation, the approval and
adoption of the Agreement and the Merger by the Company's shareholders; (v)
seeking to require divestiture by Parent or Merger Sub or any of their
Affiliates or subsidiaries of any Shares or any securities of the Surviving
Corporation; or (vi) which if adversely determined would have a Material Adverse
Effect on the Company, Parent or the Surviving Corporation or inhibit the
ability of any party to this Agreement to perform its obligations hereunder;
(b) there shall not have been any order or injunction issued, or any
Law enacted, entered, enforced, promulgated, amended, issued or deemed
applicable to Parent, Merger Sub, the Company or any subsidiary or Affiliate of
Parent, Merger Sub or the Company which has resulted, or is reasonably likely to
result, directly or indirectly, in any of the consequences referred to in
clauses (i) through (vi) of paragraph (a) above;
(c) there shall not have occurred any change, condition, event or
development that has a Material Adverse Effect on the Company since the date
hereof;
(d) the Special Committee and the Board of Directors of the Company
each shall not have amended, withdrawn or modified in a manner adverse to Parent
or Merger Sub its adoption or recommendation of the Merger or this Agreement, or
resolved to do any of the foregoing, and the Fairness Opinion shall not have
been amended, withdrawn or modified in a manner adverse to Parent or Merger Sub;
(e) the representations and warranties of the Company in this Agreement
which are qualified as to materiality shall be true and correct and the
representations or warranties that are not so qualified shall be true and
correct in all material respects; provided that any breach of a representation
or warranty of the Company of which Parent had actual knowledge prior to the
date hereof or which breach occurred directly as a result of an action taken at
the direction of Parent shall be deemed to have been waived by Parent to the
extent Parent had actual knowledge prior to the date hereof of such breach or
such breach occurred directly as a result of such action taken at the direction
of Parent;
(f) the Company shall have performed in all material respects all
obligations required to be performed by it under this Agreement;
(g) all FCC Consents and Franchise Approvals shall have been obtained,
be in effect and be subject to no limitations, conditions, restrictions or
obligations, except for such consents the failure to obtain would not, and such
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limitations, conditions, restrictions or obligations as would not, individually
or in the aggregate, be reasonably expected to have a Material Adverse Effect on
the Surviving Corporation; and
(h) no court, arbitrator or Governmental Entity shall have issued any
order, and there shall not be any statute, rule or regulation restraining or
prohibiting the effective operation of the business of Parent and its
subsidiaries or the Company and its subsidiaries after the Effective Time that
would be reasonably expected to have a Material Adverse Effect on Parent or the
Surviving Corporation.
Section 6.3. Conditions to Obligations of the Company to Effect the Merger.
The obligations of the Company to effect the Merger are further subject to
satisfaction or waiver at or prior to the Effective Time of the following
conditions:
(a) the representations and warranties of Parent and Merger Sub which
are qualified as to materiality shall be true and correct and the
representations and warranties that are not so qualified shall be true and
correct in all material respects;
(b) Parent and Merger Sub shall have performed in all material respects
all obligations required to be performed by them under this Agreement; and
(c) (i) there shall not have been threatened, instituted or be pending
any action, proceeding, application or counterclaim by any Governmental Entity
or by any other person before any court or governmental regulatory or
administrative agency, authority or tribunal which would be reasonably expected
to have a Material Adverse Effect on Parent; (ii) there shall not have been any
order or injunction issued, or any law enacted, entered, enforced, promulgated,
amended, issued or deemed applicable to Parent, Merger Sub, the Company or any
subsidiary or Affiliate of Parent, Merger Sub or the Company which has resulted,
or is reasonably likely to result in a Material Adverse Effect on Parent; and
(iii) no court, arbitrator or Governmental Entity shall have issued any order,
and there shall not be any statute, rule or regulation restraining or
prohibiting the effective operation of the business of Parent and its
subsidiaries or the Company and its subsidiaries after the Effective Time that
would be reasonably expected to have a Material Adverse Effect on Parent.
ARTICLE VII
TERMINATION, AMENDMENT AND WAIVER
Section 7.1. Termination. This Agreement may be terminated and the Merger
may be abandoned at any time prior to the Effective Time, whether before or
after approval of matters presented in connection with the Merger by the
shareholders of the Company:
(a) By mutual written consent duly authorized by the Boards of
Directors of Parent and the Company, if such termination is also approved by the
Special Committee;
(b) By any of Parent, Merger Sub or the Company if any court of
competent jurisdiction or other Governmental Entity shall have issued an order,
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decree, ruling or taken any other action restraining, enjoining or otherwise
prohibiting the Merger and such order, decree, ruling or other action shall have
become final and nonappealable;
(c) By any of Parent, Merger Sub or the Company (at the direction of
the Special Committee) if the Effective Time shall not have occurred on or
before December 31, 2000; provided, however, that the right to terminate this
Agreement under this Section 7.1(c) shall not be available to any party whose
failure to fulfill any obligation under this Agreement has been the primary
cause of, or resulted in, the failure of the Effective Time to occur on or
before such date;
(d) By any of Parent, Merger Sub or the Company (at the direction of
the Special Committee) if this Agreement and the Merger shall fail to be
approved and adopted by the shareholders of the Company at the Company
Shareholders' Meeting called for such purpose;
(e) By Parent or Merger Sub if the Special Committee shall have
amended, withdrawn or modified in a manner adverse to Parent or Merger Sub its
approval or recommendation of the Merger or this Agreement or shall have
resolved to do any of the foregoing or if the Fairness Opinion shall have been
amended, withdrawn or modified in a manner adverse to Parent or Merger Sub;
(f) by Parent or Merger Sub, if (i) any of the conditions set forth in
Section 6.2 shall have become incapable of fulfillment and shall not have been
waived by Parent and Merger Sub, or (ii) if the Company shall breach in any
material respect any of its representations, warranties or obligations hereunder
and such breach shall not have been cured in all material respects or waived by
Parent or Merger Sub and the Company shall not have provided reasonable
assurance to Parent and Merger Sub that such breach will be cured in all
material respects on or before the Effective Time, but in the case of clause
(ii) Parent or Merger Sub may terminate this agreement only if such breach,
singly or together with all other such breaches, constitutes a failure of the
conditions contained in Section 6.2 as of the date of such termination; or
(g) by the Company, if (i) any of the conditions set forth in Section
6.3 shall have become incapable of fulfillment and shall not have been waived by
the Company, (ii) if Parent or Merger Sub shall breach in any material respect
any of their respective representations, warranties or obligations hereunder and
such breach shall not have been cured in all material respects or waived by the
Company and Parent or Merger Sub, as the case may be, shall not have provided
reasonable assurance to the Company that such breach will be cured in all
material respects on or before the Effective Time, but in the case of clause
(ii) the Company may terminate this agreement only if such breach, singly or
together with all other such breaches, constitutes a failure of the condition
contained in Section 6.3 as of the date of such termination;
provided, however that any party seeking termination pursuant to clause (f) or
(g) hereof shall not be in breach of any of its material representations,
warranties, covenants or agreements contained in this Agreement.
Section 7.2. Effect of Termination.
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(a) In the event of the termination of this Agreement pursuant to
Section 7.1 hereof, this Agreement shall forthwith become void, and except as
provided in this Section 7.2 and in Section 8.10, there shall be no liability on
the part of any party hereto, provided that nothing herein shall relieve any
party from liability for any willful breach hereof.
(b) In the event that this Agreement is terminated pursuant to Section
7.1(e) or pursuant to any other paragraph of Section 7.1 in circumstances where
Parent or Merger Sub had the right to terminate this Agreement pursuant to
Section 7.1(e), then upon such termination, the Company shall pay to Parent upon
demand an amount equal to $8,000,000 in cash by wire transfer of immediately
available funds. In the event the payment referred to in the preceding sentence
is not payable and this Agreement is terminated pursuant to Section 7.1(d) or
pursuant to any other paragraph of Section 7.1 in circumstances where Parent or
Merger Sub had the right to terminate this Agreement pursuant to Section 7.1(d),
then upon such termination, the Company shall pay to Parent upon demand an
amount equal to $2,000,000 in cash by wire transfer of immediately available
funds.
Section 7.3. Amendments. This Agreement may not be amended except by action
of the board of directors of each of the parties hereto (and, in the case of the
Company, with the approval of the Special Committee) set forth in an instrument
in writing signed on behalf of each of the parties hereto; provided, however,
that after approval of the Merger by the shareholders of the Company, no
amendment may be made without the further approval of the shareholders of the
Company if the effect of such amendment would be to (i) reduce the Merger
Consideration or change the form thereof or (ii) alter or change any of the
terms and conditions of this Agreement if any of such alterations or changes,
alone or in the aggregate, would be materially adverse to the shareholders of
the Company (other than Parent and its subsidiaries). This Agreement may not be
amended except by an instrument in writing signed by the parties hereto.
Section 7.4. Waiver. At any time prior to the Effective Time, whether
before or after any of the Company Shareholders' Meeting, any party hereto, by
action taken by its board of directors (and, in the case of the Company, with
the approval of the Special Committee), may (i) extend the time for the
performance of any of the covenants, obligations or other acts of any other
party hereto or (ii) waive any inaccuracy of any representations or warranties
or compliance with any of the agreements, covenants or conditions of any other
party or with any conditions to its own obligations. Any agreement on the part
of a party hereto to any such extension or waiver shall be valid only if set
forth in an instrument in writing signed on behalf of such party by its duly
authorized officer. 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
such rights. The waiver of any such right with respect to particular facts and
other circumstances shall not be deemed a waiver with respect to any other facts
and circumstances and each such right shall be deemed an ongoing right that may
be asserted at any time and from time to time.
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ARTICLE VIII
GENERAL PROVISIONS
Section 8.1. No Third Party Beneficiaries. Other than the provisions of
Section 5.8 hereof, nothing in this Agreement shall confer any rights or
remedies upon any person other than the parties hereto.
Section 8.2. Entire Agreement. This Agreement constitutes the entire
agreement among the parties with respect to the subject matter hereof and
supersedes any prior understandings, agreements, or representations by or among
the parties, written or oral, with respect to the subject matter hereof. In
consideration of the agreements and covenants of Parent and Merger Sub contained
herein and their willingness to enter into this Agreement, the parties hereby
acknowledge, confirm and agree that Parent and Merger Sub are not parties to the
Shareholders Agreement dated as of December 20, 1994 among Xxxxx X. Xxxxx, Xxxxx
International, Ltd., Xxxx Canada International Inc. and the Company, as amended,
and none of Parent, Merger Sub or any of their Affiliates (other than the
Company) shall be subject to, or bound by, the terms and conditions of such
agreement.
Section 8.3. Succession and Assignment. This Agreement shall be binding
upon and inure to the benefit of the parties named herein and their respective
successors. No party may assign either this Agreement or any of its rights,
interests, or obligations hereunder without the prior written approval of the
other parties, provided, however, that Merger Sub may freely assign its rights
to another wholly owned subsidiary of Parent without such prior written
approval.
Section 8.4. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
Section 8.5. Headings. The section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
Section 8.6. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Colorado, without regard
to principles of conflicts of law thereof.
Section 8.7. Severability. Any term or provision of this Agreement that is
invalid or unenforceable in any situation in any jurisdiction shall not affect
the validity or enforceability of the remaining terms and provisions hereof or
the validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction. If the final judgment of a court of
competent jurisdiction declares that any term or provision hereof is invalid or
unenforceable, the parties agree that the court making the determination of
invalidity or unenforceability shall have the power to reduce the scope,
duration, or area of the term or provision, to delete specific words or phrases,
or to replace any invalid or unenforceable term or provision with a term or
provision that is valid and enforceable and that comes closest to expressing the
intention of the invalid or unenforceable term or provision, and this Agreement
-22-
shall be enforceable as so modified after the expiration of the time within
which the judgment may be appealed.
Section 8.8. Specific Performance. The Company acknowledges and agrees that
Parent and Merger Sub would be damaged irreparably in the event any of the
provisions of this Agreement are not performed in accordance with their specific
terms or otherwise are breached. Accordingly, the Company agrees that Parent and
Merger Sub shall be entitled to an injunction or injunctions to prevent breaches
of the provisions of this Agreement and to enforce specifically this Agreement
and the terms and provisions hereof in any action instituted in any court of the
United States or any state thereof having jurisdiction over the parties and the
matter, in addition to any other remedy to which it may be entitled, at law or
in equity.
Section 8.9. Construction. The language used in this Agreement shall be
deemed to be the language chosen by the parties hereto to express their mutual
intent, and no rule of strict construction shall be applied against any party.
Whenever the words "include," "includes" or "including" are used in this
Agreement, they shall be deemed to be followed by the words "without
limitation."
Section 8.10. Non-Survival of Representations and Warranties and
Agreements. The representations, warranties and agreements in this Agreement
shall terminate at the Effective Time or upon the termination of this Agreement
pursuant to Section 7.1, as the case may be, except that (i) the agreements set
forth in Articles I and VIII and Sections 5.7, 5.8 and 5.9 shall survive the
Effective Time indefinitely and (ii) the agreements set forth in Section 7.2 and
Article VIII shall survive the termination of this Agreement indefinitely.
Section 8.11. Certain Definitions. For purposes of this Agreement, the term
"Affiliate" shall have the same meaning as set forth in Rule 12b-2 promulgated
under the Exchange Act, and the term "person" shall mean any individual,
corporation, partnership (general or limited), limited liability company,
limited liability partnership, trust, joint venture, joint-stock company,
syndicate, association, entity, unincorporated organization or government or any
political subdivision, agency or instrumentality thereof.
Section 8.12. Fees and Expenses. Subject to Section 7.2, 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.
Section 8.13. Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly given upon receipt) by delivery in person, by telecopy
or by registered or certified mail (postage prepaid, return receipt requested)
to the respective parties at the following addresses, or at such other address
for a party as shall be specified in a notice given in accordance with this
Section 8.13:
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If to Parent or Merger Sub:
Comcast Corporation
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attention: General Counsel
with copies to:
Dechert Price & Xxxxxx
4000 Xxxx Atlantic Tower
0000 Xxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000-0000
Attention: Xxxxxx X. Xxxxxxx, Esq.
Xxxxx X. Xxxxxx, Esq.
If to the Company:
Xxxxx Intercable, Inc.
c/o Comcast Corporation
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attention: General Counsel
with copies to:
Xxxxxx Xxxxxx & Xxxxxxxxx
0000 X Xxxxxx X.X.
Xxxxxxxxxx X.X. 00000-0000
Attention: Xxxxxxx X. Xxxxxxxx
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IN WITNESS WHEREOF, Parent, Merger Sub and the Company have
caused this Agreement to be executed as of the date first written above by their
respective officers thereunto duly authorized.
COMCAST CORPORATION
By: /s/ Xxxxxx X. Block
------------------------------------
Name: Xxxxxx X. Block
Title: Vice President
COMCAST JOIN HOLDINGS, INC.
By: /s/ Xxxxxx X. Block
------------------------------------
Name: Xxxxxx X. Block
Title: Vice President
XXXXX INTERCABLE, Inc.
By: /s/ Xxxxxx X. Block
------------------------------------
Name: Xxxxxx X. Block
Title: Vice President
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Defined Terms
Affiliate..............................................................23
Affiliate Letter.......................................................17
Agreement...............................................................1
Articles of Merger......................................................2
Blue Sky Laws...........................................................8
CBCA....................................................................2
Certificates............................................................4
Class A Common Stock...................................................10
Class A Shares..........................................................1
Class A Special Common Stock............................................3
Code....................................................................1
Common Shares...........................................................1
Company.................................................................1
Company Articles of Incorporation.......................................6
Company Board...........................................................1
Company Bylaws..........................................................6
Company Options.........................................................3
Company SEC Reports.....................................................9
Company Shareholder Approvals...........................................7
Company Shareholders'Meeting...........................................14
Company Stock Option Plan...............................................3
D&O Insurance..........................................................16
Effective Time..........................................................2
Exchange Act............................................................8
Exchange Agent..........................................................4
Exchange Ratio..........................................................3
FCC.....................................................................8
FCC Consents............................................................8
Financial Advisor.......................................................1
Franchise...............................................................8
Franchise Approvals.....................................................8
GAAP....................................................................9
Governmental Entity.....................................................8
Include................................................................23
Includes...............................................................23
Including..............................................................23
Indemnified Parties....................................................16
Law.....................................................................8
Market Value............................................................5
Material Adverse Effect.................................................6
Merger..................................................................1
Merger Consideration....................................................3
Merger Sub..............................................................1
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Parent..................................................................1
Parent SEC Reports.....................................................12
Person.................................................................23
Public Shareholders.....................................................1
SEC.....................................................................8
Shares..................................................................1
Special Committee.......................................................1
Surviving Corporation...................................................2
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