EXECUTION COPY
AGREEMENT AND PLAN OF MERGER
AMONG
XXXXXX X. XXXXXXX,
LIBERTY MEDIA CORPORATION,
BTV ACQUISITION CORPORATION
AND
BET HOLDINGS, INC.
TABLE OF CONTENTS
Page
ARTICLE I
THE MERGER
SECTION 1.01. The Merger . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.02. Effective Time . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.03. Closing . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.04. Effects of the Merger . . . . . . . . . . . . . . . . . . 2
SECTION 1.05. Certificate of Incorporation . . . . . . . . . . . . . . . 2
SECTION 1.06. Bylaws . . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 1.07. Directors and Officers . . . . . . . . . . . . . . . . . . 2
ARTICLE II
CONVERSION OF SECURITIES; EXCHANGE OF CERTIFICATES
SECTION 2.01. Conversion of Securities . . . . . . . . . . . . . . . . . 2
SECTION 2.02. Exchange of Certificates and Cash . . . . . . . . . . . . 3
SECTION 2.03. Stock Transfer Books . . . . . . . . . . . . . . . . . . . 5
SECTION 2.04. Stock Options; Payment Rights . . . . . . . . . . . . . . 5
SECTION 2.05. Dissenting Shares . . . . . . . . . . . . . . . . . . . . 6
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
SECTION 3.01. Organization and Qualifications; Subsidiaries . . . . . . 6
SECTION 3.02. Certificate of Incorporation and Bylaws . . . . . . . . . 7
SECTION 3.03. Capitalization . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 3.04. Authority Relative to This Agreement . . . . . . . . . . . 8
SECTION 3.05. No Conflict; Required Filings and Consents . . . . . . . . 8
SECTION 3.06. Compliance; Permits . . . . . . . . . . . . . . . . . . . 9
SECTION 3.07. SEC Filings; Financial Statements . . . . . . . . . . . 10
SECTION 3.08. Absence of Certain Changes and Events . . . . . . . . . 11
SECTION 3.09. Employee Benefit Plans . . . . . . . . . . . . . . . . . 11
SECTION 3.10. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 3.11. Absence of Litigation . . . . . . . . . . . . . . . . . 12
SECTION 3.12. Franchises, Intellectual Property, Etc. . . . . . . . . 12
SECTION 3.13. FCC and Copyright Matters. . . . . . . . . . . . . . . . 12
SECTION 3.14. Opinion of Financial Advisor . . . . . . . . . . . . . . 13
SECTION 3.15. Board Approval . . . . . . . . . . . . . . . . . . . . . 13
SECTION 3.16. Brokers . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 3.17. No Actual Knowledge . . . . . . . . . . . . . . . . . . 13
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF XXXXXXX, LIBERTY AND BUYER
SECTION 4.01. Authority Relative to This Agreement . . . . . . . . . . 14
SECTION 4.02. No Conflict; Required Filings and Consents . . . . . . . 14
SECTION 4.03. Organization and Qualification . . . . . . . . . . . . . 15
SECTION 4.04. Certificate of Incorporation and Bylaws . . . . . . . . 15
SECTION 4.05. Authority Relative to This Agreement . . . . . . . . . . 15
SECTION 4.06. No Conflict; Required Filings and Consents . . . . . . . 15
SECTION 4.07. Organization and Qualification. . . . . . . . . . . . . 16
SECTION 4.08. Certificate of Incorporation and Bylaws . . . . . . . . 16
SECTION 4.09. Authority Relative to This Agreement . . . . . . . . . . 17
SECTION 4.10. No Conflict; Required Filings and Consents . . . . . . . 17
SECTION 4.11. Brokers . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 4.12. Financing . . . . . . . . . . . . . . . . . . . . . . . 18
ARTICLE V
CONDUCT OF BUSINESS PENDING THE MERGER
SECTION 5.01. Conduct of Business by the Company Pending the Merger . 18
ARTICLE VI
ADDITIONAL COVENANTS
SECTION 6.01. Access to Information; Confidentiality . . . . . . . . . 20
SECTION 6.02. Proxy Statement; Schedule 13E-3 . . . . . . . . . . . . 21
SECTION 6.03. Action by Stockholders . . . . . . . . . . . . . . . . . 21
SECTION 6.04. No Solicitation . . . . . . . . . . . . . . . . . . . . 22
SECTION 6.05. Directors' and Officers' Indemnification . . . . . . . . 23
SECTION 6.06. Notification of Certain Matters . . . . . . . . . . . . 24
SECTION 6.07. Further Action; Best Efforts . . . . . . . . . . . . . . 24
SECTION 6.08. Public Announcements. . . . . . . . . . . . . . . . . . 25
SECTION 6.09. Conveyance Taxes . . . . . . . . . . . . . . . . . . . . 25
ARTICLE VII
CLOSING CONDITIONS
SECTION 7.01. Conditions to Obligations of Each Party to
Effect the Merger. . . . . . . . . . . . . . . . . . . . 25
SECTION 7.02. Additional Conditions to Obligations of Buyer . . . . . 26
SECTION 7.03. Additional Conditions to Obligations of the Company . . 27
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
SECTION 8.01. Termination . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 8.02. Effect of Termination . . . . . . . . . . . . . . . . . 29
SECTION 8.03. Amendment . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 8.04. Waiver . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 8.05. Fees, Expenses and Other Payments . . . . . . . . . . . 29
ARTICLE IX
GENERAL PROVISIONS
SECTION 9.01. Effectiveness of Representations, Warranties
and Agreement. . . . . . . . . . . . . . . . . . . . . . 30
SECTION 9.02. Notices . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 9.03. Certain Definitions . . . . . . . . . . . . . . . . . . 32
SECTION 9.04. Headings . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 9.05. Severability . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 9.06. Entire Agreement . . . . . . . . . . . . . . . . . . . . 32
SECTION 9.07. Assignment . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 9.08. Parties in Interest . . . . . . . . . . . . . . . . . . 33
SECTION 9.09. Governing Law . . . . . . . . . . . . . . . . . . . . . 33
SECTION 9.11. Enforcement of this Agreement . . . . . . . . . . . . . 33
SECTION 9.12. Counterparts . . . . . . . . . . . . . . . . . . . . . . 33
EXHIBIT A Certificate of Incorporation of BTV Acquisition Corporation
EXHIBIT B Bylaws of BTV Acquisition Corporation
INDEX OF DEFINED TERMS
Defined Term Page
Agreement 1
Alternative Transaction 22
Benefit Plans 11
Buyer 1
Buyer Material Adverse Effect 16
Buyer Representatives 20
Certificates 3
Class A Stock 2
Class B Stock 3
Class C Stock 3
Closing 2
Closing Date 2
Code 4
Common Stock 5
Communications Act 13
Company 1
Company Charter 8
Company Disclosure Schedule 7
Company Material Adverse Effect 6
Company Option Plan 7
Company Permits 10
Company SEC Reports 10
Company Stockholder Approval 8
Company Stockholders' Meeting 22
Company Subsidiary 6
Confidentiality Agreement 21
Copyright Act 13
DGCL 1
Dissenting Shares 6
Effective Time 1
ERISA 11
ESPP 7
Exchange Act 9
Exchange Agent 3
Exchange Agent Agreement 3
Exchange Fund 3
Expenses 29
Fair Market Value 23
FCC 9
Financing 26
Governmental Entity 9
HSR Act 9
Indemnified Parties 23
IRS 11
Xxxxxxx 1
Liberty 1
Liberty Group 24
Liberty Material Adverse Effect 15
Merger 1
Merger Consideration 2
Options 7
Preferred Stock 7
Premium Amount 23
Proxy Statement 21
Rights 7
Schedule 13E-3 21
Section 203 8
Securities Act 10
Special Committee 13
Surviving Certificate 2
Surviving Corporation 1
taxes 12
TCI 24
Transmittal Documents 3
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of March 15, 1998 (the
"Agreement"), among XXXXXX X. XXXXXXX ("Xxxxxxx"), LIBERTY MEDIA
CORPORATION, a Delaware corporation ("Liberty"), BTV ACQUISITION
CORPORATION., a Delaware corporation ("Buyer"), and BET HOLDINGS, INC., a
Delaware corporation (the "Company").
W I T N E S S E T H:
WHEREAS, upon the terms and subject to the conditions of this
Agreement and in accordance with the General Corporation Law of the State
of Delaware (the "DGCL"), Buyer will merge with and into the Company (the
"Merger");
WHEREAS, the Board of Directors of the Company, based on the
recommendation of the Special Committee (as defined below), has determined
that the Merger is fair to, and in the best interests of, the Company and
its stockholders (other than Xxxxxxx, Liberty and their respective
affiliates) and has approved this Agreement and has approved the Merger and
the other transactions contemplated hereby and has recommended adoption of
this Agreement by the stockholders of the Company.
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth in this
Agreement, the parties hereto agree as follows:
ARTICLE I
THE MERGER
SECTION 1.01. The Merger. Upon the terms and subject to the
conditions set forth in this Agreement, and in accordance with the DGCL, at
the Effective Time (as defined below), Buyer shall be merged with and into
the Company. Following the Merger, the separate existence of Buyer shall
cease and the Company shall continue as the surviving corporation of the
Merger (the "Surviving Corporation").
SECTION 1.02. Effective Time. At the Closing, the parties hereto
shall cause the Merger to be consummated by filing a certificate of merger
with the Secretary of State of the State of Delaware and by making any
related filings required under the DGCL in connection with the Merger. The
Merger shall become effective at such time as the certificate of merger is
duly filed with the Secretary of State of the State of Delaware or at such
later time as is agreed to by the parties hereto and as is specified in the
certificate of merger (the "Effective Time").
SECTION 1.03. Closing. Unless this Agreement shall have been
terminated pursuant to Section 8.01 and subject to the satisfaction or, if
permissible, waiver of the conditions set forth in Article VII, the closing
of the Merger (the "Closing") will take place as promptly as practicable
(and in any event, within ten business days) after satisfaction or waiver
of the conditions set forth in Article VII, at the offices of the Company,
unless another date, time or place is agreed to in writing by the parties
hereto (such date, the "Closing Date").
SECTION 1.04. Effects of the Merger. From and after the Effective
Time, the Merger shall have the effects set forth in the DGCL (including,
without limitation, Sections 259, 260 and 261 thereof). Without limiting
the generality of the foregoing, and subject thereto, at the Effective
Time, all the properties, rights, privileges, powers and franchises of the
Company and Buyer shall vest in the Surviving Corporation, and all debts,
liabilities and duties of the Company and Buyer shall become the debts,
liabilities and duties of the Surviving Corporation.
SECTION 1.05. Certificate of Incorporation. The certificate of
incorporation of the Company shall be amended in the Merger to read in its
entirety as set forth in Exhibit A hereto, and as so amended shall be the
certificate of incorporation of the Surviving Corporation (the "Surviving
Certificate") until thereafter amended in accordance with the DGCL.
SECTION 1.06. Bylaws. The bylaws of the Company shall be amended in
the Merger to read in its entirety as set forth in Exhibit B hereto, and as
so amended shall be the bylaws of the Surviving Corporation until
thereafter amended in accordance with the Surviving Certificate and the
DGCL.
SECTION 1.07. Directors and Officers. From and after the Effective
Time, (a) until their respective successors are duly elected or appointed
and qualified in accordance with applicable law, the directors of Buyer at
the Effective Time shall be the directors of the Surviving Corporation and
(b) the officers of the Company at the Effective Time shall be the officers
of the Surviving Corporation.
ARTICLE II
CONVERSION OF SECURITIES; EXCHANGE OF CERTIFICATES
SECTION 2.01. Conversion of Securities. At the Effective Time, by
virtue of the Merger and without any action on the part of Buyer, the
Company or the holders of any of the following securities:
(a) Each share of the Class A Common Stock, par value $.02 per share
(the "Class A Stock") issued and outstanding immediately prior to the
Effective Time (other than any shares of Class A Stock to be canceled
pursuant to Section 2.01(b) and any Dissenting Shares (as defined below))
shall be converted into the right to receive $63.00 in cash, without
interest (the "Merger Consideration"). At the Effective Time, each share
of Class A Stock shall no longer be outstanding and shall automatically be
canceled and retired and shall cease to exist, and each certificate
previously evidencing any such share (other than shares to be canceled
pursuant to Section 2.01(b) and any Dissenting Shares) shall thereafter
represent only the right to receive, upon the surrender of such certificate
in accordance with the provisions of Section 2.02, an amount in cash per
share equal to the Merger Consideration. The holders of such certificates
previously evidencing such shares of Class A Stock outstanding immediately
prior to the Effective Time shall cease to have any rights with respect to
such shares of Class A Stock except as otherwise provided herein or by law.
(b) Each share of capital stock of the Company (i) held in the
treasury of the Company or by any wholly owned subsidiary of the Company or
(ii) owned by Buyer, Xxxxxxx, Liberty or any of their respective
subsidiaries (including any shares of Class A Stock, Class B Common Stock,
par value $.02 per share (the "Class B Stock"), or Class C Common Stock,
par value $.02 per share (the "Class C Stock"), owned by any such persons)
shall automatically be canceled, retired and cease to exist without any
conversion thereof and no payment shall be made with respect thereto.
(c) Each share of common stock of Buyer outstanding immediately prior
to the Effective Time shall be converted into and become one share of
common stock of the Surviving Corporation and shall constitute the only
outstanding shares of capital stock of the Surviving Corporation.
SECTION 2.02. Exchange of Certificates and Cash. (a) Exchange
Agent. On or before the Closing Date, Buyer shall enter into an agreement
(the "Exchange Agent Agreement") with a bank or trust company selected by
Buyer and reasonably acceptable to the Company (the "Exchange Agent"),
authorizing such Exchange Agent to act as Exchange Agent in connection with
the Merger. Prior to the Effective Time, Buyer shall deposit or shall
cause to be deposited with or for the account of the Exchange Agent, for
the benefit of the holders of shares of Class A Stock (other than
Dissenting Shares and shares to be canceled pursuant to Section 2.01(b)),
an amount in cash equal to the Merger Consideration payable pursuant to
Section 2.01(a) (such cash funds are hereafter referred to as the "Exchange
Fund").
(b) Exchange Procedures. As soon as reasonably practicable after the
Effective Time, Buyer will instruct the Exchange Agent to mail to each
holder of record of a certificate or certificates which immediately prior
to the Effective Time evidenced outstanding shares of Class A Stock (other
than Dissenting Shares and shares to be canceled pursuant to Section
2.01(b)) (the "Certificates"), (i) 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 shall be in such form and have such
other provisions as Buyer may reasonably specify) and (ii) instructions for
use in effecting the surrender of the Certificates in exchange for the
Merger Consideration. Upon surrender of a Certificate for cancellation to
the Exchange Agent or to such other agent or agents as may be appointed by
Buyer, together with a letter of transmittal, duly executed, and such other
customary documents as may be required pursuant to such instructions
(collectively, the "Transmittal Documents"), the holder of such Certificate
shall be entitled to receive in exchange therefor the Merger Consideration
for each share of Class A Stock formerly represented by such Certificate,
without any interest thereon, less any required withholding of taxes, and
the Certificate so surrendered shall thereupon be canceled. In the event
of a transfer of ownership of shares of Class A Stock which is not
registered in the transfer records of the Company, the Merger Consideration
may be issued and paid in accordance with this Article II to the transferee
of such shares if the Certificate evidencing such shares of Class A Stock
is presented to the Exchange Agent, accompanied by all documents required
to evidence and effect such transfer, evidence that any applicable stock
transfer taxes have been paid and the related Transmittal Documents. The
Merger Consideration will be delivered by the Exchange Agent as promptly as
practicable following surrender of a Certificate and the related
Transmittal Documents. Cash payments may be made by check unless otherwise
required by a depositary institution in connection with the book-entry
delivery of securities. No interest will be payable on such Merger
Consideration regardless of any delay in making payments. Until
surrendered in accordance with this Section 2.02, each Certificate shall be
deemed at any time after the Effective Time to evidence only the right to
receive, upon such surrender, the Merger Consideration for each share of
Class A Stock formerly represented by such Certificate. The Exchange Fund
shall not be used for any purpose other than as set forth in this Article
II. Any interest, dividends or other income earned on the investment of
cash held in the Exchange Fund shall be for the account of the Surviving
Corporation.
(c) Termination of Exchange Fund. Any portion of the Exchange Fund
(including the proceeds of any investments thereof) which remains
undistributed to the holders of Class A Stock for six months after the
Efective Time shall be delivered to the Surviving Corporation, upon
demand. Any holders of Class A Stock who have not theretofore complied
with this Article II shall thereafter look only to the Surviving
Corporation for payment of the Merger Consideration.
(d) No Liability. None of Buyer, Xxxxxxx, Liberty, the Surviving
Corporation or the Company shall be liable to any holder of shares of Class
A Stock for any cash delivered to a public official pursuant to any
applicable abandoned property, escheat or similar law. If Certificates are
not surrendered prior to the date that is two years after the Effective
Time, unclaimed funds payable with respect to such Certificates shall, to
the extent permitted by applicable law, become the property of the
Surviving Corporation, free and clear of all claims or interest of any
person previously entitled thereto.
(e) Withholding Rights. Buyer and the Exchange Agent shall be
entitled to deduct and withhold from the consideration otherwise payable
pursuant to this Agreement to any holder of shares of Class A Stock such
amounts as Buyer or the Exchange Agent is required to deduct and withhold
with respect to the making of such payment under the United States Internal
Revenue Code of 1986, as amended (the "Code"), or any provision of state,
local or foreign tax law. To the extent that amounts are so withheld by
Buyer or the Exchange Agent, such withheld amounts shall be treated for all
purposes of this Agreement as having been paid to the holder of the shares
of Class A Stock in respect of which such deduction and withholding was
made by Buyer or the Exchange Agent.
(f) Lost, Stolen or Destroyed Certificates. In the event any
Certificates evidencing shares of Class A Stock shall have been lost,
stolen or destroyed, the holder of such lost, stolen or destroyed
Certificate(s) shall execute an affidavit of that fact upon request. The
holder of any such lost, stolen or destroyed Certificate(s) shall also
deliver a reasonable indemnity against any claim that may be made against
Buyer or the Exchange Agent with respect to the Certificate(s) alleged to
have been lost, stolen or destroyed. The affidavit and any indemnity which
may be required hereunder shall be delivered to the Exchange Agent, who
shall be responsible for making payment for such lost, stolen or destroyed
Certificates(s) pursuant to the terms hereof.
SECTION 2.03. Stock Transfer Books. At the Effective Time, the stock
transfer books of the Company shall be closed, and there shall be no
further registration of transfers of shares of Class A Stock, Class B Stock
or Class C Stock (collectively, the "Common Stock") thereafter on the
records of the Company. Any Certificates presented to the Exchange Agent
or the Surviving Corporation for any reason at or after the Effective Time
shall be exchanged for the Merger Consideration pursuant to the terms
hereof.
SECTION 2.04. Stock Options; Payment Rights. (a) Each Option (as
defined below) (other than any Options held by Xxxxxxx or by Liberty or any
of its subsidiaries) which is outstanding immediately prior to the
Effective Time, whether or not then exercisable, shall be canceled and the
Company Option Plan (as defined below) shall be assumed by the Surviving
Corporation, in each case at and as of the Effective Time, and each holder
of such canceled Options shall be paid by the Surviving Corporation as soon
as practicable, but in any event within five days after the Effective Time,
for each such Option, an amount determined by multiplying (i) the excess,
if any, of the Merger Consideration over the applicable exercise price per
share of such Option by (ii) the number of shares issuable upon exercise of
such Option, subject to any required withholding of taxes.
(b) At the Effective Time, all Options held by Xxxxxxx shall
automatically become options to acquire an equal number of shares of
common stock of the Surviving Corporation at an aggregate exercise price
equal to the aggregate exercise price of the Options, and no payment shall
be made at the Effective Time with respect thereto.
(c) Prior to the Effective Time, the Company shall use its best
efforts to (i) obtain any consents from holders of the Options and (ii)
make any amendments to the terms of the Company Option Plan and any Options
granted thereunder that, in the case of either (i) or (ii) are necessary or
appropriate to give effect to the transactions contemplated by this Section
2.04. Notwithstanding any other provisions of this Section 2.04, payment
in respect of any Options may be withheld until all necessary consents are
obtained.
(d) In lieu of the cancellation of Options referred to in Section
2.04(a) hereof, prior to the Effective Time the Buyer may enter into
mutually acceptable arrangements with any holder of Options providing that
such holder's Options will be treated in a manner other than as provided in
Section 2.04(a); provided, however, that in no event will such holder be
paid at the Effective Time an amount in cash in excess of the amount such
holder would have received had such holder's Options been cancelled in
accordance with Section 2.04(a).
SECTION 2.05. Dissenting Shares. (a) Notwithstanding any other
provision of this Agreement to the contrary, shares of Class A Stock that
are outstanding immediately prior to the Effective Time and which are held
by stockholders (i) who shall not have voted in favor of adoption of this
Agreement or consented thereto in writing and (ii) who shall be entitled to
and shall have demanded properly in writing appraisal for such shares in
accordance with Section 262 of the DGCL ("Dissenting Shares"), shall not be
converted into or represent the right to receive the Merger Consideration
unless such stockholders fail to perfect, withdraw or otherwise lose their
right to appraisal. Such stockholders shall be entitled to receive payment
of the appraised value of such Dissenting Shares in accordance with the
provisions of the DGCL. If, after the Effective Time, any such stockholder
fails to perfect, withdraws or loses its right to appraisal, such shares of
Class A Stock shall be treated as if they had been converted as of the
Effective Time into a right to receive the Merger Consideration, without
interest thereon, upon surrender of the Certificate or Certificates that
formerly evidenced such shares of Class A Stock in the manner set forth in
Section 2.02.
(b) The Company shall give Buyer prompt notice of any demands for
appraisal received by it, withdrawals of such demands, and any other
instruments served pursuant to the DGCL and received by the Company and
relating thereto. Buyer shall direct all negotiations and proceedings with
respect to demands for appraisal under the DGCL. The Company shall not,
except with the prior written consent of Buyer, make any payment with
respect to any demands for appraisal, or offer to settle, or settle, any
such demands.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to Buyer, Xxxxxxx and
Liberty, subject to Section 3.17, that:
SECTION 3.01. Organization and Qualifications; Subsidiaries. The
Company and each subsidiary of the Company (a "Company Subsidiary") is a
corporation, partnership or other legal entity duly incorporated or
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation or organization and has the requisite
power and authority and all necessary governmental approvals, to own, lease
and operate its properties and to carry on its business as it is now being
conducted. The Company and each Company Subsidiary is duly qualified or
licensed and in good standing to do business 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 business, results of operations or financial condition of the
Company and the Company Subsidiaries, taken as a whole (a "Company Material
Adverse Effect").
SECTION 3.02. Certificate of Incorporation and Bylaws. The Company
has heretofore furnished or made available to Buyer a complete and correct
copy of the certificate of incorporation and the bylaws or equivalent
organizational documents, each as amended to the date hereof, of the
Company and each Company Subsidiary. Such certificates of incorporation,
bylaws and equivalent organizational documents are in full force and
effect. Neither the Company nor any Company Subsidiary is in violation of
any provision of its certificate of incorporation, bylaws or equivalent
organizational documents.
SECTION 3.03. Capitalization. The authorized capital stock of the
Company consists of 50,000,000 shares of Class A Stock, 15,000,000 shares
of Class B Stock, 15,000,000 shares of Class C Stock, and 15,000,000 shares
of preferred stock, par value of $.01 per share ("Preferred Stock"). As of
February 28, 1998, (a) 10,066,720 shares of Class A Stock, 1,831,600 shares
of Class B Stock and 4,820,000 shares of Class C Stock were outstanding,
all of which were validly issued, fully paid and nonassessable; (b) no
shares of Preferred Stock were issued and outstanding and no action had
been taken by the Board of Directors of the Company with respect to the
designation of the rights and preferences of any series of Preferred Stock;
(c) 2,781,595 shares of Class A Stock were reserved for issuance upon the
exercise of outstanding stock options (the "Options") granted pursuant to
the Company's 1991 Executive Stock Option Plan, as amended and restated as
of August 1, 1994 and further amended as of December 1, 1995 (the "Company
Option Plan"); (d) 2,839,600 shares of Class A Stock, 1,518,300 shares of
Class B Stock, no shares of Class C Stock and no shares of Preferred Stock
were held in the treasury of the Company; (e) no Company Subsidiary owns
any shares of the Company's capital stock; (f) there are no securities of
any Company Subsidiary outstanding which are convertible into or
exercisable or exchangeable for capital stock of the Company; (g) 6,651,600
shares of Class A Stock were reserved for future issuance upon conversion
of shares of Class B Stock and Class C Stock; and (h) 144,485 shares of
Class A Stock have been reserved for issuance under the Company's 1997
Employee Stock Purchase Plan (the "ESPP"). Except as set forth above, no
shares of capital stock or other voting securities of the Company have been
issued, are reserved for issuance or are outstanding. Except as set forth
in this Section 3.03 or in Section 3.03 of the Company's Disclosure
Schedule dated as of the date hereof and attached hereto and incorporated
hereby by reference (the "Company Disclosure Schedule"), there are no
options, stock appreciation rights, warrants or other rights, agreements,
arrangements, understandings or commitments of any character (collectively,
"Rights") relating to the issued or unissued capital stock of the Company
or any Company Subsidiary, or obligating the Company or any Company
Subsidiary to issue, grant or sell any shares of capital stock or other
equity interests in (or securities which are convertible into or
exercisable or exchangeable for any such shares or equity interests in) the
Company or any Company Subsidiary. Since February 28, 1998, the Company
has not issued any shares of its capital stock or Rights in respect
thereof, other than the issuance of shares of Class A Stock upon the
exercise of the Options referred to above or in satisfaction of the
Company's obligations under the ESPP. All shares of Class A Stock 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. Except as
set forth in Section 3.03 of Company Disclosure Schedule, there are no
outstanding contractual obligations of the Company or any Company
Subsidiary to repurchase, redeem or otherwise acquire any shares of Class A
Stock or any capital stock of any Company Subsidiary, or make any material
investment (in the form of a loan, capital contribution or otherwise) in,
any Company Subsidiary or any other person. No stock appreciation rights
have been issued or granted under the Company Option Plan. Each
outstanding share of capital stock of each Company Subsidiary has been duly
authorized and validly issued, and is fully paid and nonassessable and is
owned by the Company or another Company Subsidiary, free and clear of all
security interests, liens, claims, pledges, options, rights of first
refusal, agreements, limitations on the Company's or such other Company
Subsidiary's voting rights, charges and other encumbrances of any nature
whatsoever.
SECTION 3.04. Authority Relative to This Agreement. The Company has
all necessary corporate power and authority to execute and deliver this
Agreement, to perform its obligations hereunder and to consummate the
transactions contemplated hereby. The execution and delivery of this
Agreement by the Company and the consummation by the Company of the
transactions contemplated hereby have been duly and validly authorized by
all necessary corporate action and no other corporate proceedings on the
part of the Company are necessary to authorize this Agreement or to
consummate the transactions contemplated hereby (other than, with respect
to the Merger, the adoption of this Agreement by the holders of a majority
of the aggregate voting power of the issued and outstanding shares of the
Class A Stock, the Class B Stock and the Class C Stock, voting together as
a single class (the "Company Stockholder Approval"), and the filing and
recordation of appropriate merger documents as required by, and in
accordance with, the DGCL). This Agreement has been duly and validly
executed and delivered by the Company and, assuming the due authorization,
execution and delivery by the other parties hereto, constitutes the legal,
valid and binding obligation of the Company, enforceable against the
Company in accordance with its terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium
and other similar laws affecting the rights of creditors generally and by
general principles of equity. The Company represents and warrants that the
limitations upon business combinations set forth in Section 203 of the DGCL
("Section 203") are not applicable to this Agreement, the Merger and the
transactions contemplated by this Agreement.
SECTION 3.05. No Conflict; Required Filings and Consents. (a) The
execution and delivery of this Agreement by the Company do not, and the
performance of this Agreement and the consummation of the transactions
contemplated hereby by the Company will not, (i) conflict with or violate
the Company's Restated Certificate of Incorporation (the "Company Charter")
or its by-laws, or the certificate of incorporation, by-laws or other
equivalent organizational documents of any Company Subsidiary or (ii)
except as set forth in Section 3.05 of Company Disclosure Schedule,
(x) conflict with or violate any law, rule, regulation, order, judgment or
decree applicable to the Company or any Company Subsidiary or by which any
property or asset of the Company or any Company Subsidiary is bound or
affected or (y) result in any breach of or constitute a default (or an
event which, with notice, lapse of time or both, would become a default)
under, result in the loss of a material benefit under, or give to others
any right of termination, amendment, acceleration, increased payments or
cancellation of, or result in the creation of a lien or other encumbrance
on any property or asset of the Company or any Company Subsidiary pursuant
to, any note, bond, mortgage, indenture, contract, agreement, lease,
license, permit, franchise or other instrument or obligation to which the
Company or any Company Subsidiary is a party or by which the Company or any
Company Subsidiary or any property or asset of the Company or any Company
Subsidiary is bound or affected, except, in the case of clause (ii), for
any such conflicts, violations, breaches, defaults or other occurrences
which (A) would not prevent or delay consummation of the Merger in any
material respect or otherwise prevent the Company from performing its
obligations under this Agreement in any material respect, and (B) would
not, individually or in the aggregate, have a Company Material Adverse
Effect.
(b) The execution and delivery of this Agreement by the Company do
not, and the performance of this Agreement and the consummation of the
Merger and the other transactions contemplated hereby by the Company will
not, require any consent, approval, authorization or permit of, or filing
with or notification to, any governmental or regulatory authority, domestic
or foreign (each a "Governmental Entity"), except (i) for (A) any
applicable requirements of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), (B) the pre-merger notification requirements of the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended, and the
rules and regulations thereunder (the "HSR Act"), (C) the filing and
recordation of appropriate merger and similar documents as required by the
DGCL, and (D) filings under the rules and regulations of the New York Stock
Exchange, Inc. and (ii) where the failure to obtain such consents,
approvals, authorizations or permits, or to make such filings or
notifications, (x) would not prevent or delay consummation of the Merger in
any material respect or otherwise prevent the Company from performing its
obligations under this Agreement in any material respect, and (y) would
not, individually or in the aggregate, have a Company Material Adverse
Effect.
(c) The representation in this Section 3.05 is being made, with
respect to any consents, approvals, authorizations or permits of, or
filings or notifications to, the Federal Communications Commission (the
"FCC"), based upon the assumption that Xxxxxxx will, at the Effective Time,
own in excess of 50% of the outstanding capital stock of the Buyer.
SECTION 3.06. Compliance; Permits. (a) Except as set forth in
Section 3.06 of the Company Disclosure Schedule, neither the Company nor
any Company Subsidiary is in conflict with, or in default or violation of
(with or without notice, lapse of time or both) (i) any law, rule,
regulation, order, judgment or decree applicable to the Company or any
Company Subsidiary or by which any of their respective properties or assets
are 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 Company Subsidiary is a party or
by which the Company or any Company Subsidiary or any of their respective
properties or assets is bound or affected, except for any such conflicts,
defaults or violations that would not, individually or in the aggregate,
have a Company Material Adverse Effect.
(b) The Company and the Company Subsidiaries hold all permits,
licenses, variances, exemptions, orders and approvals from Governmental
Entities which are material to operation of the business of the Company and
the Company Subsidiaries taken as a whole (collectively, the "Company
Permits"). The Company and the Company Subsidiaries are in compliance, and
will be in compliance on the Closing Date, with the terms of the Company
Permits, except where the failure to so comply would not, individually or
in the aggregate, have a Company Material Adverse Effect.
SECTION 3.07. SEC Filings; Financial Statements. (a) The Company
has filed all forms, reports and documents required to be filed by it with
the SEC since July 31, 1995, and has heretofore made available to Buyer, in
the form filed with the SEC (excluding any exhibits thereto), (i) its
Annual Reports on Form 10-K, for the fiscal years ended July 31, 1995, 1996
and 1997, (ii) its Quarterly Report on Form 10-Q for the quarter ended
January 31, 1998, (iii) all proxy statements relating to the Company's
meetings of stockholders (whether annual or special) held on or after July
31, 1995, and (iv) all other forms, reports and other registration
statements (other than Quarterly Reports on Form 10-Q not referred to in
clause (ii) above and preliminary materials), including any and all
amendments or supplements to any of the items referred to herein, filed by
the Company with the SEC since July 31, 1995 (the forms, reports and other
documents referred to in clauses (i), (ii), (iii) and (iv) above being
referred to herein, collectively, as the "Company SEC Reports"). The
Company SEC Reports and any forms, reports and other documents filed by the
Company with the SEC after the date of this Agreement (x) were or will be
prepared in accordance with the requirements of the Securities Act of 1933,
as amended (the "Securities Act"), and the Exchange Act, as the case may
be, and the rules and regulations thereunder, and (y) did not at the time
they were filed, or will not at the time they are 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. No Company Subsidiary is required to file any form, report or
other document with the SEC.
(b) Each of the consolidated financial statements (including, in each
case, any notes thereto) contained in the Company SEC Reports was prepared
in accordance with United States generally accepted accounting principles
applied on a consistent basis throughout the periods indicated (except as
may be indicated in the notes thereto), 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 (subject, in the
case of unaudited statements, to normal and recurring year-end adjustments
which were not and are not expected, individually or in the aggregate, to
be material in amount). Since July 31, 1997, there has been no change in
any of the significant accounting (including tax accounting) policies,
practices or procedures of the Company or any Company Subsidiary.
(c) Except (i) as set forth in Section 3.07 of the Company Disclosure
Schedule, (ii) as and to the extent set forth in the Company SEC Reports
filed with the SEC prior to the date of this Agreement, or (iii) since July
31, 1997, as incurred in the ordinary course of business and not in
violation of this Agreement (assuming this Agreement was in effect as of
July 31, 1997), the Company and the Company Subsidiaries do not have any
liabilities or obligations of any nature (whether accrued, absolute,
contingent or otherwise), other than liabilities and obligations which
would not, individually or in the aggregate, have a Company Material
Adverse Effect.
SECTION 3.08. Absence of Certain Changes and Events. Except as set
forth in Section 3.08 of the Company Disclosure Schedule or disclosed in
any Company SEC Report filed since October 31, 1997 and prior to the date
of this Agreement, since October 31, 1997, (a) the Company and the Company
Subsidiaries have conducted their respective businesses only in the
ordinary course and have not taken any of the actions set forth in
paragraphs (a) through (n) of Section 5.01 and (b) there has not been any
material adverse change in the business, financial condition or results of
operations of the Company and the Company Subsidiaries, taken as a whole.
SECTION 3.09. Employee Benefit Plans. With respect to all the
employee benefit plans, programs and arrangements maintained for the
benefit of any current or former employee, officer or director of the
Company or any Company Subsidiary (the "Benefit Plans"), except as set
forth in Section 3.09 of the Company Disclosure Schedule or in the Company
SEC Reports filed prior to the date of this Agreement: (a) none of the
Benefit Plans is a multi-employer plan within the meaning of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"); (b) none of
the Benefit Plans promises or provides retiree medical or life insurance
benefits to any person; (c) each Benefit Plan intended to be qualified
under Section 401(a) of the Code has received a favorable determination
letter from the Internal Revenue Service (the "IRS") that it is so
qualified and nothing has occurred since the date of such letter that could
reasonably be expected to affect the qualified status of such Benefit Plan
other than occurrences that would not, individually or in the aggregate,
have a Company Material Adverse Effect; (d) each Benefit Plan has been
operated in all material respects in accordance with its terms and the
requirements of applicable law; (v) neither the Company nor any Company
Subsidiary has incurred any direct or indirect liability under, arising out
of or by operation of Title IV of ERISA in connection with the termination
of, or withdrawal from, any Benefit Plan or other retirement plan or
arrangement, and no fact or event exists that could reasonably be expected
to give rise to any such liability, other than any liability that would
not, individually or in the aggregate, have a Company Material Adverse
Effect; and (e) the Company and the Company Subsidiaries have not incurred
any liability under, and have complied in all material respects with, the
Worker Adjustment Retraining Notification Act, and no fact or event exists
that could give rise to liability under such act, other than any liability
that would not, individually or in the aggregate, have a Company Material
Adverse Effect. Except as set forth in Section 3.09 of the Company
Disclosure Schedule or the Company SEC Reports, the aggregate accumulated
benefit obligations of each Benefit Plan subject to Title IV of ERISA (as
of the date of the most recent actuarial valuation prepared for such
Benefit Plan) do not exceed the fair market value of the assets of such
Benefit Plan (as of the date of such valuation). Other than as
specifically provided in Section 5.01(f), the execution and delivery of
this Agreement and the consummation of the Merger will not (i) result in an
acceleration of any participant's rights under the ESPP, (ii) entitle any
participant to purchase a number of shares which exceeds the number of
shares he would otherwise be entitled to purchase if this Agreement had not
been entered into or the Merger were not to be consummated, (iii) result in
additional persons becoming entitled to elect to become participants in the
ESPP, or (iv) entitle any participant to increase the amount of his
periodic payroll deduction amounts paid to the ESPP.
SECTION 3.10. Taxes. (a) Except as set forth in Section 3.10 of the
Company Disclosure Schedule, each of the Company and the Company
Subsidiaries has filed all tax returns and reports required to be filed by
it or requests for extensions to file such returns or reports have been
timely filed, granted and have not expired, except to the extent that such
failures to file or to have extensions granted, individually or in the
aggregate, would not have a Company Material Adverse Effect. All returns
filed by the Company and each of the Company Subsidiaries are complete and
accurate in all material respects. The Company and each of the Company
Subsidiaries have timely paid (or the Company has paid on its behalf) all
taxes shown as due on such returns, and the most recent financial
statements contained in the Company SEC Reports reflect an adequate reserve
for all taxes payable by the Company and the Company Subsidiaries for all
taxable periods and portions thereof accrued through the date of such
financial statements. Except as set forth in the Company Disclosure
Schedule, no deficiencies for any taxes have been proposed, asserted or
assessed against the Company or any Company Subsidiary that are not
adequately reserved for, except for deficiencies that individually or in
the aggregate would not have a Company Material Adverse Effect, and no
requests for waivers of the time to assess any such taxes have been granted
or are pending.
(b) As used in this Section 3.10, the term "taxes" shall include all
Federal, state, local and foreign income, franchise, alternative or add-on
minimum tax, gross receipts, transfer, withholding on amounts paid to or by
the Company or any Company Subsidiary, payroll, employment, license,
property, sales, use, excise and other taxes, tariffs or governmental
charges of any nature whatsoever, together with any interest, penalty or
addition to tax attributable to such taxes.
SECTION 3.11. Absence of Litigation. Except as set forth in Section
3.11 of the Company Disclosure Schedule or disclosed by the Company in the
Company SEC Reports, as of the date of this Agreement there are no claims,
actions, suits, investigations or proceedings pending or, to the best
knowledge of the Company, threatened against the Company or any Company
Subsidiary, before any court, arbitrator or administrative, governmental or
regulatory authority or body, domestic or foreign, (x) that, individually
or in the aggregate, would, or reasonably could be expected to, have a
Company Material Adverse Effect, or (y) which seek to restrain, enjoin or
delay consummation of the Merger or any of the other transactions
contemplated hereby.
SECTION 3.12. Franchises, Intellectual Property, Etc. The Company
and the Company Subsidiaries collectively possess or have the right to use
all franchises, intellectual property rights, licenses and other rights as
are material and necessary for the conduct of the Company's business, with
no known conflict with the valid rights of others which could reasonably be
expected to have a Company Material Adverse Effect. No event has occurred
which permits or, to the best knowledge of the Company, could reasonably be
expected to permit, the revocation or termination of any such franchise,
intellectual property right, license or other right, which revocation or
termination could reasonably be expected to have a Company Material Adverse
Effect.
SECTION 3.13. FCC and Copyright Matters. The Company and each of the
Company Subsidiaries (a) have duly and timely filed all filings which are
required to be filed by it under the Communications Act of 1934, as amended
(the "Communications Act"), and (b) are in all material respects in
compliance with the Communications Act, including, without limitation, the
rules and regulations of the FCC. The Company and each of the Company
Subsidiaries has recorded or deposited with and paid to the United States
Copyright Office, the Register of Copyrights and the Copyright Royalty
Tribunal all notices, statements of account, royalty fees and other
documents and instruments required under Title 17 of the United States
Code, as amended (the "Copyright Act"), other than where the failure to
have done any of the foregoing would not, individually or in the aggregate,
result in a Company Material Adverse Effect, and, to the best knowledge of
the Company, neither the Company nor any of the Company Subsidiaries is
liable to any person for copyright infringement under the Copyright Act as
a result of its business operations.
SECTION 3.14. Opinion of Financial Advisor. Xxxxxxx, Xxxxx & Co. has
delivered its opinion to the effect that, as of the date hereof, the
consideration to be received by the stockholders of the Company (other than
Xxxxxxx, Liberty and their respective affiliates) pursuant to the Merger is
fair to such stockholders from a financial point of view.
SECTION 3.15. Board Approval. The Board of Directors of the Company,
based on the recommendation of the Special Independent Committee of the
Board of Directors of the Company (the "Special Committee"), at a meeting
duly called and held, unanimously (a) determined that this Agreement and
the Merger are fair to and in the best interests of the Company's
stockholders (other than Xxxxxxx, Liberty and their respective affiliates),
(b) approved this Agreement, the Merger and the other transactions
contemplated hereby, and (c) resolved to recommend adoption of this
Agreement by the Company's stockholders.
SECTION 3.16. Brokers. No broker, finder or investment banker (other
than Xxxxxxx, Sachs & Co.) is entitled to any brokerage, finder's or other
fee or commission in connection with this Agreement, the Merger and the
other transactions contemplated hereby based upon arrangements made by or
on behalf of the Company. The Company has heretofore furnished to Buyer a
complete and correct copy of all agreements between the Company and
Xxxxxxx, Xxxxx & Co. as of the date hereof pursuant to which such firm
would be entitled to any payment relating to the Merger and the other
transactions contemplated hereby.
SECTION 3.17. No Actual Knowledge. The representations and
warranties in this Article III are subject to the following: As of the
date of execution of this Agreement, based upon his actual knowledge as an
officer of the Company, Xxxxxxx is not aware (a) of any representation or
warranty of the Company set forth in this Article III which is not true and
correct or (b) of any facts or circumstances which could reasonably be
expected to result in any such representation or warranty being untrue or
incorrect, in each case, where such failure of any representations or
warranties to be true and correct, individually or in the aggregate, would
reasonably be expected to result in a Company Material Adverse Effect.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF XXXXXXX, LIBERTY AND BUYER
Xxxxxxx hereby makes to the Company the representations and warranties
set forth below in Sections 4.01 through 4.02.
SECTION 4.01. Authority Relative to This Agreement. Xxxxxxx has all
necessary power and authority to execute and deliver this Agreement, to
perform his obligations hereunder and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement by
Xxxxxxx and the consummation by Xxxxxxx of the transactions contemplated
hereby have been duly and validly authorized by all necessary action and no
other proceedings on the part of Xxxxxxx are necessary to authorize this
Agreement or to consummate such transactions (other than the filing and
recordation of appropriate merger documents as required by the DGCL). This
Agreement has been duly and validly executed and delivered by Xxxxxxx and,
assuming the due authorization, execution and delivery by the other parties
hereto, constitutes the legal, valid and binding obligation of Xxxxxxx,
enforceable against him in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium and other similar laws affecting the rights of
creditors generally and by general principles of equity.
SECTION 4.02. No Conflict; Required Filings and Consents. (a) The
execution and delivery of this Agreement by Xxxxxxx do not, and the
performance of the transactions contemplated hereby by Xxxxxxx will not,
(i) conflict with or violate any law, rule, regulation, order, judgment or
decree applicable to Xxxxxxx or by which any property or asset of Xxxxxxx
is bound or affected, or (ii) assuming the release or waiver of certain
security interests and other restrictions encumbering certain shares of
Common Stock beneficially owned by Xxxxxxx to be obtained in connection
with the receipt of the financing for the Merger, result in any breach of
or constitute a default (or an event which, with notice, lapse of time or
both, would become a default) under, result in the loss of a material
benefit under or give to others any right of termination, amendment,
acceleration, increased payments or cancellation of, or result in the
creation of a lien or other encumbrance on any property or asset of Xxxxxxx
pursuant to, any note, bond, mortgage, indenture, contract, agreement,
lease, license, permit, franchise or any other instrument or obligation to
which Xxxxxxx is a party or by which his property or assets are bound or
affected, except in the case of clauses (i) and (ii), for any such
conflicts, violations, breaches, defaults or other occurrences which would
not prevent or delay consummation of the Merger in any material respect or
otherwise prevent Xxxxxxx from performing his obligations under this
Agreement in any material respect.
(b) The execution and delivery of this Agreement by Xxxxxxx do not,
and the performance of this Agreement and the consummation of the Merger
and the other transactions contemplated hereby by Xxxxxxx will not, require
any consent, approval, authorization or permit of, or filing with or
notification to, any Governmental Entity, except (i) for (A) any applicable
requirements of the Exchange Act, (B) the pre-merger notification
requirements of the HSR Act and (C) the filing and recordation of
appropriate merger and similar documents as required by the DGCL and (ii)
where the failure to obtain such consents, approvals, authorizations or
permits, or to make such filings or notifications, would not prevent or
delay consummation of the Merger in any material respect or otherwise
prevent Xxxxxxx from performing his obligations under this Agreement in any
material respect.
Liberty hereby makes to the Company the representations and warranties
set forth below in Sections 4.03 through 4.06:
SECTION 4.03. Organization and Qualification. Liberty is a
corporation duly incorporated, validly existing and in good standing under
the laws of the State of Delaware and has the requisite power and authority
and all necessary governmental approvals to own, lease and operate its
properties and to carry on its business as it is now being conducted.
Liberty is duly qualified or licensed and in good standing to do business
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 business, results of
operations or financial condition of Liberty and its subsidiaries, taken as
a whole (a "Liberty Material Adverse Effect").
SECTION 4.04. Certificate of Incorporation and Bylaws. Liberty has
heretofore made available to the Company a complete and correct copy of its
certificate of incorporation and bylaws, each as amended to the date
hereof. Such certificate of incorporation and bylaws are in full force and
effect.
SECTION 4.05. Authority Relative to This Agreement. Liberty has all
necessary corporate power and authority to execute and deliver this
Agreement, to perform its obligations hereunder and to consummate the
transactions contemplated hereby. The execution and delivery of this
Agreement by Liberty and the consummation by Liberty of the transactions
contemplated hereby have been duly and validly authorized by all necessary
corporate action and no other corporate proceedings on the part of Liberty
are necessary to authorize this Agreement or to consummate such
transactions (other than the filing and recordation of appropriate merger
documents as required by the DGCL). This Agreement has been duly and
validly executed and delivered by Liberty and, assuming the due
authorization, execution and delivery by the other parties hereto,
constitutes the legal, valid and binding obligation of Liberty, enforceable
against Liberty in accordance with its terms, except as such enforceability
may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium and other similar laws affecting the rights of creditors
generally and by general principles of equity.
SECTION 4.06. No Conflict; Required Filings and Consents. (a) The
execution and delivery of this Agreement by Liberty do not, and the
performance of the transactions contemplated hereby by Liberty will not,
(i) conflict with or violate the certificate of incorporation or by-laws of
Liberty, (ii) conflict with or violate any law, rule, regulation, order,
judgment or decree applicable to Liberty or by which any property or asset
of Liberty is bound or affected, or (iii) result in any breach of or
constitute a default (or an event which, with notice, lapse of time or
both, would become a default) under, result in the loss of a material
benefit under or give to others any right of termination, amendment,
acceleration, increased payments or cancellation of, or result in the
creation of a lien or other encumbrance on any property or asset of Liberty
pursuant to, any note, bond, mortgage, indenture, contract, agreement,
lease, license, permit, franchise or any other instrument or obligation to
which Liberty is a party or by which Liberty or any property or asset of
Liberty is bound or affected, except in the case of clauses (ii) and (iii),
for any such conflicts, violations, breaches, defaults or other occurrences
which (x) would not prevent or delay consummation of the Merger in any
material respect or otherwise prevent Liberty from performing its
obligations under this Agreement in any material respect, and (y) would
not, individually or in the aggregate, have a Liberty Material Adverse
Effect.
(b) The execution and delivery of this Agreement by Liberty do not,
and the performance of this Agreement and the consummation of the Merger
and the other transactions contemplated hereby by Liberty will not, require
any consent, approval, authorization or permit of, or filing with or
notification to, any Governmental Entity, except (i) for (A) any applicable
requirements, if any, of the Exchange Act and state takeover laws, (B) the
pre-merger notification requirements of the HSR Act and (C) filing and
recordation of appropriate merger and similar documents as required by the
DGCL and (ii) where the failure to obtain such consents, approvals,
authorizations or permits, or to make such filings or notifications, would
not (x) prevent or delay consummation of the Merger in any material respect
or otherwise prevent Liberty from performing its obligations under this
Agreement in any material respect, and (y) would not, individually or in
the aggregate, have a Liberty Material Adverse Effect.
Buyer, Xxxxxxx and Liberty hereby make to the Company the
representations and warranties set forth below in Sections 4.07 through
4.12:
SECTION 4.07. Organization and Qualification. Buyer is a corporation
duly incorporated, validly existing and in good standing under the laws of
the State of Delaware and has the requisite power and authority and all
necessary governmental approvals to own, lease and operate its properties
and to carry on its business as it is now being conducted. Buyer is duly
qualified or licensed and in good standing to do business in each
jurisdiction where the character of the properties owned, leased or operate
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 business, results of operations or financial
condition of Buyer and its subsidiaries, taken as a whole (a "Buyer
Material Adverse Effect"). Since the date of its incorporation, Buyer has
not engaged in any activities other than in connection with or as
contemplated by this Agreement or in connection with arranging any
financing required to consummate Transactions. Buyer does not have any
operating subsidiaries.
SECTION 4.08. Certificate of Incorporation and Bylaws. Buyer has
heretofore made available to the Company a complete and correct copy of its
certificate of incorporation and bylaws, each as amended to the date
hereof. Such certificate of incorporation and bylaws are in full force and
effect.
SECTION 4.09. Authority Relative to This Agreement. Buyer has all
necessary corporate power and authority to execute and deliver this
Agreement, to perform its obligations hereunder and to consummate the
transactions contemplated hereby. The execution and delivery of this
Agreement by Buyer and the consummation by Buyer of the transactions
contemplated hereby have been duly and validly authorized by all necessary
corporate action and no other corporate proceedings on the part of Buyer
are necessary to authorize this Agreement or to consummate such
transactions (other than the filing and recordation of appropriate merger
documents as required by the DGCL). This Agreement has been duly and
validly executed and delivered by Buyer and, assuming the due
authorization, execution and delivery by the Company, constitutes the
legal, valid and binding obligation of Buyer, enforceable against Buyer in
accordance with its terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium and other
similar laws affecting the rights of creditors generally and by general
principles of equity.
SECTION 4.10. No Conflict; Required Filings and Consents. (a) The
execution and delivery of this Agreement by Buyer do not, and the
performance of the transactions contemplated hereby by Buyer will not, (i)
conflict with or violate the certificate of incorporation or by-laws of
Buyer, (ii) conflict with or violate any law, rule, regulation, order,
judgment or decree applicable to Buyer or by which any property or asset of
Buyer is bound or affected, or (iii) result in any breach of or constitute
a default (or an event which, with notice, lapse of time or both, would
become a default) under, result in the loss of a material benefit under or
give to others any right of termination, amendment, acceleration, increased
payments or cancellation of, or result in the creation of a lien or other
encumbrance on any property or asset of Buyer pursuant to, any note, bond,
mortgage, indenture, contract, agreement, lease, license, permit, franchise
or any other instrument or obligation to which Buyer is a party or by which
Buyer or any property or asset of Buyer is bound or affected, except in the
case of clauses (ii) and (iii), for any such conflicts, violations,
breaches, defaults or other occurrences which (x) would not prevent or
delay consummation of the Merger in any material respect or otherwise
prevent Buyer from performing its obligations under this Agreement in any
material respect, and (y) would not, individually or in the aggregate, have
a Buyer Material Adverse Effect.
(b) The execution and delivery of this Agreement by Buyer do not, and
the performance of this Agreement and the consummation of the Merger and
the other transactions contemplated hereby by Buyer will not, require any
consent, approval, authorization or permit of, or filing with or
notification to, any Governmental Entity, except (i) for (A) any applicable
requirements, if any, of the Exchange Act, (B) the pre-merger notification
requirements of the HSR Act, (C) filing and recordation of appropriate
merger and similar documents as required by the DGCL, and (D) any
applicable approvals of the FCC, and (ii) where the failure to obtain such
consents, approvals, authorizations or permits, or to make such filings or
notifications, (x) would not prevent or delay consummation of the Merger in
any material respect or otherwise prevent Buyer from performing its
obligations under this Agreement in any material respect, and (y) would
not, individually or in the aggregate, have a Buyer Material Adverse
Effect.
SECTION 4.11. Brokers. No broker, finder or investment banker (other
than Salomon Brothers Inc) is entitled to any brokerage, finder's or other
fee or commission in connection with the Merger and the other transactions
contemplated hereby based upon arrangements made by or on behalf of Buyer,
Xxxxxxx or Liberty.
SECTION 4.12. Financing. (a) Buyer has delivered to the Company a
true and complete copy of a letter from The Bank of New York Company, Inc.
and BNY Capital Markets, Inc. to the effect that, based upon their review
of certain information provided by the Company, and subject to the
qualifications and conditions set forth therein, The Bank of New York
Company, Inc. and BNY Capital Markets, Inc. are highly confident, as of the
date of such letter, that they, directly or through any of their
affiliates, could successfully arrange and fully syndicate a secured credit
facility which would provide the Buyer at the Effective Time with the
Financing (as defined below).
(b) In addition, Buyer shall use its reasonable efforts to obtain by
May 15, 1998 (subject to reasonable extension, consent to which will not be
unreasonably withheld) a firm commitment by an appropriate financial source
to provide the Financing, subject only to customary conditions in
transactions of this type. If any portion of the Financing represented by
such commitment thereafter becomes unavailable, Buyer will promptly notify
the Company and will also use its reasonable efforts to obtain the
Financing from another source or sources, on and subject to the same terms
and conditions as the portion of the Financing that has become unavailable,
in order to consummate the transactions contemplated hereby. If Buyer is
unable to obtain a financing commitment by the date specified herein (as
such date may be extended), the Company may, at its option, terminate this
Agreement, and neither Buyer nor the Company shall have any further
obligations hereunder.
ARTICLE V
CONDUCT OF BUSINESS PENDING THE MERGER
SECTION 5.01. Conduct of Business by the Company Pending the Merger.
The Company covenants and agrees that, between the date of this Agreement
and the Effective Time, unless Buyer, Xxxxxxx or Liberty shall have
consented, neither the Company nor any Company Subsidiary shall, except as
set forth in Section 5.01 of the Company Disclosure Schedule:
(a) conduct its business in any manner other than in the ordinary
course of business consistent with past practice;
(b) amend or propose to amend its certificate of incorporation or by-
laws;
(c) (i) authorize for issuance, issue, grant, sell, pledge, redeem
or acquire for value any of its or their securities, including
options, warrants, commitments, stock appreciation rights,
subscriptions, rights to purchase or otherwise (other than the
issuance of equity securities upon the conversion of outstanding
convertible securities or in connection with any dividend
reinvestment plan or any Benefit Plan with an employee stock fund
or employee stock ownership plan feature, consistent with
applicable securities laws, or the exercise of options or
warrants outstanding as of the date of this Agreement and in
accordance with the terms of such options or warrants in effect
on the date of this Agreement) or (ii) sell, pledge or otherwise
dispose of any material assets, except for sales of assets in the
ordinary course of business;
(d) declare, set aside, make or pay any dividend or other
distribution, payable in cash, stock, property, or otherwise,
with respect to any of its capital stock, except dividends
declared and paid by a wholly-owned Company Subsidiary only to
the Company, or subdivide, reclassify, recapitalize, split,
combine or exchange any of its shares of capital stock;
(e) incur, assume or become obligated with respect to any material
amount of indebtedness for borrowed money or make any loans or
advances, except borrowings under existing bank lines of credit
in the ordinary course of business;
(f) increase the compensation payable or to become payable to its
executive officers or employees, except for increases in the
ordinary course of business in accordance with past practices, or
grant any severance or termination pay to or enter into any
employment or severance agreement with any of its director or
executive officer, or establish, adopt, enter into or amend in
any material respect or take action to accelerate any rights or
benefits under any collective bargaining agreement or any
employee benefit plan, agreement or policy; provided, however,
that the Company shall be permitted to (i) amend the ESPP to
provide that the first Investment Date (as defined in the ESPP)
scheduled to occur following the Effective Time will be
accelerated so that such Investment Date will occur immediately
prior to the Effective Time, (ii) terminate the ESPP immediately
following such Investment Date and simultaneous with the
Effective Time and refund any unused payroll deductions then held
by the ESPP to the appropriate ESPP participants, and (iii) amend
or modify the Company's incentive plans set forth in Section
5.01(f) of the Company Disclosure Schedule in such manner as is
reasonably necessary to preserve the rights of the participants
in such plans, including, without limitation, amending such
incentive plans to provide for any pay-out of awards under such
plans prior to the Effective Time; provided, that Buyer shall
have consented in writing to any such amendment or modification
referred to in clauses (i), (ii) to (iii) above, such consent not
to be unreasonably withheld.
(g) take any action, other than reasonable and usual actions in the
ordinary course of business and consistent with past practice,
with respect to accounting policies or procedures (including tax
accounting policies and procedures);
(h) acquire by merger or consolidation, or by purchase of assets, or
by any other manner, any material business;
(i) mortgage or otherwise encumber or subject to any lien any of its
properties or assets, except for liens in connection with
indebtedness incurred as permitted by clause (e) above;
(j) take any action that would, or could reasonably be expected to
result in, any of its representations and warranties set forth in
this Agreement being untrue or in any of the conditions to the
Merger set forth in Article VII not being satisfied;
(k) make any tax election or settle or compromise any income tax
liability material to the Company and the Company Subsidiaries,
taken as a whole;
(l) pay, discharge or satisfy any claims, liabilities or obligations
(absolute, accrued, asserted or unasserted, contingent or
otherwise), other than the payment, discharge or satisfaction in
the ordinary course of business of liabilities reflected or
reserved against in, or contemplated by, the consolidated
financial statements (or the notes thereto) of the Company
included in the Company SEC Reports, or incurred in the ordinary
course of business consistent with past practice;
(m) settle or compromise any pending or threatened suit, action or
claim relating to the transactions contemplated hereby; or
(n) authorize any of, or commit or agree to take any of, the
foregoing actions.
ARTICLE VI
ADDITIONAL COVENANTS
SECTION 6.01. Access to Information; Confidentiality. (a) From the
date hereof to the Effective Time, the Company shall (and shall cause the
Company Subsidiaries and the officers, directors, employees, auditors and
agents of the Company and each of the Company Subsidiaries to) afford the
officers, employees and agents of Buyer (the "Buyer Representatives")
reasonable access at all reasonable times to its officers, employees,
agents, properties, offices, plants and other facilities, books and
records, and shall furnish such Buyer Representatives with all financial,
operating and other data and information as may from time to time be
reasonably requested. All information obtained will be subject to the
Confidentiality Agreement, dated as of October 2, 1997, between the
Company, Xxxxxxx and Liberty (the "Confidentiality Agreement").
(b) No investigation pursuant to this Section 6.01 shall affect any
representation or warranty in this Agreement of any party hereto or any
condition to the obligations of the parties hereto.
SECTION 6.02. Proxy Statement; Schedule 13E-3. (a) As soon as
practicable after the date of this Agreement, the Company shall prepare and
file with the SEC a proxy statement, in form and substance reasonably
satisfactory to the Buyer, relating to the meeting of the Company's
stockholders to be held in connection with the Merger (together with any
amendments thereof or supplements thereto, the "Proxy Statement"). Each of
Xxxxxxx, Liberty and Buyer shall furnish to the Company such information
concerning himself or itself as the Company may reasonably request in
connection with the preparation of the Proxy Statement. The Proxy
Statement will comply in all material respects with applicable federal
securities laws, except that no representation is made by the Company with
respect to information supplied by Xxxxxxx, Liberty or Buyer for inclusion
in the Proxy Statement. As promptly as practicable after the Proxy
Statement has been cleared by the SEC, the Company shall mail the Proxy
Statement to its stockholders. The Proxy Statement shall include the
opinion of Xxxxxxx Sachs referred to in Section 3.14 hereof.
(b) The information provided by each of the Company, Buyer, Liberty
and Xxxxxxx for use in the Proxy Statement shall not, at (i) the time the
Proxy Statement (or any amendment thereof or supplement thereto) is first
mailed to the stockholders of the Company or (ii) the time of the Company
stockholders' meeting contemplated by such Proxy Statement, 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 not misleading. If at any time prior to the Effective Time any
event or circumstance relating to any party hereto, or their respective
officers or directors, should be discovered by such party which should be
set forth in an amendment or a supplement to the Proxy Statement, such
party shall promptly inform the Company and Buyer thereof and take
appropriate action in respect thereof.
(c) As soon as practicable after the date of this Agreement, Xxxxxxx,
Liberty, Buyer and the Company shall file with the SEC a Rule 13E-3
Transaction Statement on Schedule 13E-3 ("Schedule 13E-3"), with respect to
the Merger. Each of the parties hereto agrees to use its reasonable best
efforts to cooperate and to provide each other with such information as any
of such parties may reasonably request in connection with the preparation
of the Schedule 13E-3. Each party hereto agrees promptly to supplement,
update and correct any information provided by it for use in the Schedule
13E-3 if and to the extent that it is or shall have become incomplete,
false or misleading.
SECTION 6.03. Action by Stockholders. Except as otherwise required
by the fiduciary duties of the Board of Directors of the Company (as
determined in good faith by the Board following the receipt of written
advice of the Company's outside legal counsel to such effect), (a) the
Company, acting through its Board of Directors, shall, in accordance with
applicable law, the Company Charter and the Company's bylaws, duly call,
give notice of, convene and hold a special meeting of stockholders (the
"Company Stockholders' Meeting") as soon as practicable after the date of
this Agreement for the purpose of adopting this Agreement and (b) the
Company will, through the Board of Directors based on the recommendation of
the Special Committee, (i) recommend to its stockholders the adoption of
this Agreement, and (ii) use its best efforts to obtain the Company
Stockholder Approval. Xxxxxxx, Liberty and Buyer shall vote all shares of
Class A Stock, Class B Stock and Class C Stock owned by them in favor of
the adoption of this Agreement.
SECTION 6.04. No Solicitation. (a) The Company shall immediately
cease any existing discussions or negotiations with any parties conducted
heretofore with respect to any acquisition of all or any material portion
of the assets of, or any equity interest in, the Company or any of the
Company Subsidiaries, or any business combination with the Company or any
of the Company Subsidiaries. The Company shall not, nor shall it permit
any of the Company Subsidiaries, or its or their respective officers,
directors, employees, agents or representatives (including, without
limitation, any investment banking firm, attorney or accountant retained by
it) to, initiate, solicit or encourage, directly or indirectly, any
inquiries or the making of any proposal with respect to an Alternative
Transaction (as defined below), engage in any discussions or negotiations
concerning, or provide to any other person any information or data relating
to the Company or any of the Company Subsidiaries for the purposes of, or
otherwise cooperate in any way with or assist or participate in, facilitate
or encourage, any inquiries or the making of any proposal or offer
(including, without limitation, any proposal or offer to the stockholders
of the Company) which constitutes, or could reasonably be expected to lead
to, a proposal or offer to seek or effect an Alternative Transaction, or
agree to or endorse any Alternative Transaction; provided, however, that,
at any time prior to obtaining the Company Stockholder Approval, the
Company may (subject to compliance with the penultimate sentence of this
Section 6.04(a)), in response to a bona fide unsolicited written inquiry,
proposal or offer with respect to an Alternative Transaction (x) furnish
information with respect to the Company and the Company Subsidiaries to the
person making such inquiry, proposal or offer subject to a confidentiality
agreement having terms no less favorable to the Company than those
contained in the Confidentiality Agreement, and (y) participate in
negotiations concerning such Alternative Transaction, if, before furnishing
such information or engaging in such negotiations, the Board of Directors
of the Company determines in good faith (i) following the receipt of
written advice of its financial advisor, that the inquiry, proposal or
offer is reasonably likely to result in a proposal for an Alternative
Transaction which is (A) more favorable to the Company's stockholders than
the transaction contemplated hereby and (B) capable of consummation, or
(ii) following the receipt of written advice of outside legal counsel, that
it is required to do so in order to comply with its fiduciary duties.
"Alternative Transaction" means a transaction or series of related
transactions (other than the transactions contemplated by this Agreement)
resulting in (i) any change of control of the Company, (ii) any merger or
consolidation of the Company in which another person acquires beneficial
ownership of 25% or more of the aggregate voting power of all voting
securities of it or the surviving corporation, as the case may be, (iii)
any tender offer or exchange offer for, or any acquisitions of, any
securities of the Company which, if consummated, would result in another
person beneficially owning 25% or more of the aggregate voting power of all
voting securities of it, or (iv) any sale or other disposition of assets of
the Company or any of the Company Subsidiaries if the Fair Market Value (as
defined below) of such assets exceeds 25% of the aggregate Fair Market
Value of the assets of the Company and the Company Subsidiaries, taken as a
whole before giving effect to such sale or other disposition. The "Fair
Market Value" of any assets or securities shall mean the fair market value
of such assets or securities as determined by the Board of Directors of the
Company in good faith. Prior to furnishing any information or
participating in any negotiations with regard to an Alternative
Transaction, the Company shall notify Buyer immediately of such inquiry,
proposal or offer received by, any such information requested from, or any
such discussions or negotiations sought to be initiated or continued with,
the Company, any of its subsidiaries or any of the Company's or any
subsidiary's directors, officers, employees, agents or representatives
indicating, in connection with such notice, the name of such person and the
material terms and conditions of any such inquiry, proposal or offer. The
Company agrees that it will keep Buyer informed, on a current basis, of the
status and terms of any such inquiries, proposals or offers.
(b) Nothing in this Section 6.04 shall (i) permit the Company to
enter into any agreement with respect to an Alternative Transaction during
the term of this Agreement (it being agreed that during the term of this
Agreement the Company shall not enter into any agreement with any person
that provides for, or in any way facilitates, an Alternative Transaction,
other than a confidentiality agreement in customary form upon terms and
conditions no more favorable to such third party than the terms and
conditions contained in the Confidentiality Agreement), or (ii) affect any
other obligation of the Company under this Agreement.
SECTION 6.05. Directors' and Officers' Indemnification. (a) From
and after the Effective Time, the Surviving Corporation shall indemnify,
defend and hold harmless, to the same extent and upon the terms and
conditions provided in the Company Charter or the Company's Bylaws, each as
in effect on the date hereof, and in each case to the full extent permitted
under the DGCL, the present and former officers and directors of the
Company (collectively, the "Indemnified Parties") against all losses,
expenses, claims, damages, liabilities or amounts paid in settlement with
the approval of the Surviving Corporation (which approval shall not
unreasonably be withheld) in connection with any claim, action, suit,
proceeding or investigation based in whole or in part on the fact that such
person is or was a director or officer of the Company and arising out of
actions or omissions occurring in connection with the transactions
contemplated by this Agreement.
(b) The Surviving Corporation shall maintain in effect for not less
than six (6) years from the Effective Time the policies of the directors'
and officers' liability insurance most recently maintained by the Company
(provided that the Surviving Corporation may substitute therefor policies
of at least the same coverage containing terms and conditions which are no
less advantageous for so long as such substitution does not result in gaps
or lapses in coverage) with respect to matters occurring prior to the
Effective Time to the extent available; provided, however, that (i) in no
event shall the Surviving Corporation be required to expend more than an
amount per year equal to 150% of current annual premiums paid by the
Company (the "Premium Amount") to maintain or procure insurance coverage
pursuant hereto and (ii) in the event the Surviving Corporation is unable
to obtain the insurance called for by this Section 6.05(b), the Surviving
Corporation will obtain as much comparable insurance as is available for
the Premium Amount per year.
(c) This Section 6.05 is intended to be for the benefit of, and shall
be enforceable by, the Indemnified Parties, their heirs and personal
representatives, and shall be binding on the Surviving Corporation and its
respective successors and assigns.
SECTION 6.06. Notification of Certain Matters. The Company shall
give prompt notice to Buyer, and Buyer shall give prompt notice to the
Company, of (a) the occurrence or non-occurrence of any event the
occurrence or non-occurrence of which would be likely to cause (i) any
representation or warranty contained in this Agreement to be untrue or
inaccurate or (ii) any covenant, condition or agreement contained in this
Agreement not to be complied with or satisfied and (b) any failure of the
Company or Buyer (or Xxxxxxx or Liberty), as the case may be, 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 6.06 shall not limit or otherwise affect
the remedies available hereunder to the party receiving such notice.
SECTION 6.07. Further Action; Best Efforts.
(a) Upon the terms and subject to the conditions hereof, each of the
parties hereto shall (i) make promptly its respective filings and
thereafter make any other required submissions under the HSR Act with
respect to the Merger and the other transactions contemplated hereby, and
(ii) use its reasonable best 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 or otherwise to
consummate and make effective the Merger and the other transactions
contemplated hereby, including, without limitation, using its reasonable
best efforts to obtain (x) the Financing and (y) all licenses, permits,
waivers, orders, consents, approvals, authorizations, qualifications and
orders of Governmental Entities and parties to contracts with the Company
and the Company Subsidiaries as are necessary for the consummation of the
Merger and the other transactions contemplated hereby.
(b) Notwithstanding the provisions of Section 6.07(a), nothing
contained in this Agreement shall obligate Tele-Communications, Inc.
("TCI"), Liberty or any of their subsidiaries (collectively, the "Liberty
Group") to take any action to consummate the Merger and the other
transactions contemplated hereby, the consummation of which is dependent or
conditioned on the receipt of any governmental or regulatory approval or
consent, in the event that the approval or consent so received specifically
includes conditions or restrictions in addition to those imposed by laws
and regulations of general applicability as in effect from time to time
(including conditions in addition to those imposed by existing laws and
regulations which require the prior approval of any governmental or
regulatory agency to the taking of any action or the consummation of any
transaction), the direct or indirect effect of which is or would be, to
restrict, limit or otherwise subject to penalty the members of the Liberty
Group in the ownership of their respective assets or the conduct of their
respective businesses. For purposes of the foregoing, a condition,
restriction or limitation arising out of any such approval or consent shall
be deemed to be a restriction or limitation on the members of the Liberty
Group (regardless of whether such member is a party to or otherwise legally
obligated by such consent or approval) to the extent that the taking of an
action or the consummation of a transaction by such member of the Liberty
Group would result in any member of the Liberty Group, the Company or any
Company Subsidiary being in breach or violation of such consent or approval
or otherwise causing such consent or approval to terminate or expire.
(c) 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 and directors of each party to this Agreement shall use
their reasonable best efforts to take all such action.
SECTION 6.08. Public Announcements. Buyer 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
transactions contemplated hereby and shall not issue any such press release
or make any such public statement without the prior consent of the other
party, which consent shall not be unreasonably withheld; provided, however,
that a party may, without the prior consent of the other party, issue such
press release or make such public statement as may be required by law,
regulation or any listing agreement or arrangement to which the Company,
Buyer or a member of the Liberty Group is a party with a national
securities exchange or the Nasdaq Stock Market if it has used all
reasonable efforts to consult with the other party and to obtain such
party's consent but has been unable to do so in a timely manner.
SECTION 6.09. Conveyance Taxes. Buyer and the Company shall
cooperate in the preparation, execution and filing of all returns,
questionnaires, applications, or other documents regarding any real
property transfer or gains, sales, use, transfer, value added, stock
transfer and stamp taxes, any transfer, recording, registration and other
fees, and any similar taxes which become payable in connection with the
transactions contemplated by this Agreement that are required or permitted
to be filed on or before the Effective Time.
ARTICLE VII
CLOSING CONDITIONS
SECTION 7.01. Conditions to Obligations of Each Party to Effect the
Merger. The respective obligations of each party to effect the Merger and
the other transactions contemplated hereby shall be subject to the
satisfaction at or prior to the Effective Time of the following conditions,
any or all of which may be waived, in whole or in part, to the extent
permitted by applicable law:
(a) Stockholder Approval. In addition to the obtaining of the
Company Stockholder Approval, this Agreement shall have been approved and
adopted by the affirmative vote of a majority of the voting power of the
shares owned by stockholders of the Company other than Xxxxxxx, Liberty or
any of their respective controlled affiliates.
(b) No Order. No Governmental Entity or federal or state court of
competent jurisdiction shall have enacted, issued, promulgated, enforced or
entered any statute, rule, regulation, executive order, decree, injunction
or other order (whether temporary, preliminary or permanent) which is in
effect and which materially restricts, prevents or prohibits consummation
of the Merger or the other transactions contemplated by this Agreement;
provided, however, that the parties shall use their reasonable best efforts
(subject to Section 6.07) to cause any such decree, judgment, injunction or
other order to be vacated or lifted.
(c) HSR Act. Any waiting period applicable to the consummation of
the Transactions under the HSR Act shall have expired or been terminated,
and no action shall have been instituted by the Department of Justice or
the Federal Trade Commission challenging or seeking to enjoin the
consummation of the Merger, which action shall not have been withdrawn or
terminated.
SECTION 7.02. Additional Conditions to Obligations of Buyer. The
obligation of Buyer to effect the Merger is are also subject to
satisfaction or waiver of the following conditions:
(a) Representations and Warranties. Each of the representations and
warranties of the Company contained in this Agreement, without giving
effect to any notification to Buyer delivered pursuant to Section 6.06,
shall, if qualified by materiality, be true and correct, and if not so
qualified, be true and correct in all material respects, in each case as of
the Effective Time as though made on and as of the Effective Time, except
(i) for changes specifically permitted by this Agreement and (ii) that
those representations and warranties which address matters only as of a
particular date shall remain true and correct as of such date.
(b) Agreement and Covenants. The Company shall have performed or
complied in all material respects with all agreements and covenants
required by this Agreement to be performed or complied with by it at or
prior to the Effective Time.
(c) Consents Under Agreements. The Company shall have obtained the
consent or approval of each person whose consent or approval shall be
required in connection with the Merger under all loan or credit agreements,
notes, mortgages, indentures, leases or other agreements or instruments to
which it or any of the Company Subsidiaries is a party or is otherwise
bound or obligated, except those for which failure to obtain such consents
and approvals would not have or give rise to a Company Material Adverse
Effect.
(d) Financing. Buyer shall have obtained sufficient funds (i) to pay
the Merger Consideration, refinance or finance certain indebtedness of the
Company, Black Entertainment Television, Inc., a wholly owned subsidiary of
the Company, Buyer, and certain principals of Buyer, and pay all expenses
in connection with the transactions contemplated hereby, and (ii) for
general corporate purposes (the "Financing"), on terms reasonably
satisfactory to Buyer, and the proceeds of such Financing shall have been
received by or made immediately available to Buyer at or immediately prior
to the Closing.
(e) No Litigation. There shall not be (x) pending or threatened any
suit, action or proceeding by any Governmental Entity or (y) pending any
suit, action or proceeding by any other person, in any case, before any
court or governmental authority, agency or tribunal, domestic or foreign
(i) seeking to restrain or prohibit the consummation of the Merger or any
of the other transactions contemplated by this Agreement or seeking to
obtain from the Company, Buyer, Xxxxxxx or Liberty any damages, (ii)
seeking to prohibit or limit the ownership or operation by Buyer, Xxxxxxx
or Liberty of any material portion of the business or assets of the Company
or any of the Company Subsidiaries, or to compel the Company or any the
Company Subsidiaries to dispose of or hold separate any material portion of
its business or assets as a result of the Merger or any of the other
transactions contemplated by this Agreement, (iii) seeking to impose
limitations on the ability of Xxxxxxx or Liberty to acquire or hold, or
exercise full rights of ownership of, any shares of Common Stock,
including, without limitation, the right to vote the Common Stock owned by
him or it on all matters properly presented to the stockholders of the
Company, (iv) seeking material damages, (v) seeking to prohibit Xxxxxxx or
Liberty from effectively controlling in any material respect the business
or operations of the Company or the Company Subsidiaries, or (vi) which
otherwise is reasonably likely to have a Company Material Adverse Effect.
(f) Dissenting Shares. On the Closing Date, Dissenting Shares shall
aggregate no more than 10% of the then outstanding shares of Class A Stock
not owned by Xxxxxxx, Liberty or their respective controlled affiliates.
(g) Officer's Certificate. Buyer shall have received a certificate
of an appropriate officer of the Company to the effect that the conditions
set forth in Section 7.02(a), (b), (c), (e) and (f) have been satisfied at
the Effective Time.
SECTION 7.03. Additional Conditions to Obligations of the Company.
The obligation of the Company to effect the Merger is also subject to the
satisfaction or waiver of the following conditions:
(a) Representations and Warranties. Each of the representations and
warranties of the Buyer, Xxxxxxx and Liberty contained in this Agreement,
without giving effect to any notification to the Company delivered pursuant
to Section 6.06, shall, if qualified by materiality, be true and correct,
and if not so qualified, be true and correct in all material respects, in
each case as of the Effective Time as though made on and as of the
Effective Time, except (i) for changes specifically permitted by this
Agreement and (ii) that those representations and warranties which address
matters only as of a particular date shall remain true and correct as of
such date.
(b) Agreement and Covenants. Buyer, Xxxxxxx and Liberty shall have
performed or complied in all material respects with all agreements and
covenants required by this Agreement to be performed or complied with by it
or him at or prior to the Effective Time.
(c) Officer's Certificate. The Company shall have received a
certificate of an appropriate officer of Buyer to the effect that the
conditions set forth in Section 7.03(a) and (b) have been satisfied at the
Effective Time.
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
SECTION 8.01. Termination. This Agreement may be terminated at any
time prior to the Effective Time, whether before or after adoption of this
Agreement by the stockholders of the Company:
(a) by mutual consent of the Company and Buyer;
(b) by Buyer upon a material breach of any covenant or agreement on
the part of the Company set forth in this Agreement which has not been
cured, or if any representation or warranty of the Company shall have
become untrue in any material respect, in either case such that such breach
or untruth is incapable of being cured by September 30, 1998;
(c) by the Company (i) upon a material breach of any covenant or
agreement on the part of Buyer, Xxxxxxx or Liberty set forth in this
Agreement which has not been cured, or if any representation or warranty of
the Company, Xxxxxxx or Liberty shall have become untrue in any material
respect, in either case such that such breach or untruth is incapable of
being cured by September 30, 1998 or (ii) as provided in Section 4.12(b);
(d) by either Buyer or the Company, if any permanent injunction,
order, decree, ruling or other action by any Governmental Entity preventing
the consummation of the Merger shall have become final and nonappealable;
(e) by either Buyer or the Company, if the Merger shall not have been
consummated before September 30, 1998 (provided that the right to
terminate this Agreement under this Section 8.01(e) shall not be available
to any party whose failure to fulfill any obligation under this Agreement
has been the cause of or resulted in the failure of the Effective Time to
occur on or before such date);
(f) by Buyer if: (i) the Board of Directors of the Company (or any
committee thereof) shall withdraw, modify or change its recommendation so
that it is not in favor of this Agreement or the Merger or shall have
resolved to do any of the foregoing; (ii) the Board of Directors of the
Company shall have recommended or resolved to recommend to its stockholders
an Alternative Transaction; or (iii) the stockholder approval required
pursuant to Section 7.01(a) shall not have been obtained by September 15,
1998.
The right of any party hereto to terminate this Agreement pursuant to
this Section 8.01 shall remain operative and in full force and effect
regardless of any investigation made by or on behalf of any party hereto,
any person controlling any such party or any of their respective officers
or directors, whether prior to or after the execution of this Agreement.
SECTION 8.02. Effect of Termination. Except as provided in Section
8.05 or Section 9.01(b), in the event of the termination of this Agreement
pursuant to Section 8.01, this Agreement shall forthwith become void, there
shall be no liability on the part of any party hereto, or any of their
respective officers or directors, to the other and all rights and
obligations of any party hereto shall cease; provided, however, that
nothing herein shall relieve any party from liability for the wilful breach
of any of its representations, warranties, covenants or agreements set
forth in this Agreement.
SECTION 8.03. Amendment. Before or after adoption of this Agreement
by the stockholders of the Company, this Agreement may be amended by the
parties hereto at any time prior to the Effective Time; provided, however,
that (a) any such amendment shall have been approved by the Special
Committee and (b) after adoption of this Agreement by the stockholders of
the Company, no amendment which under applicable law may not be made
without the approval of the stockholders of the Company may be made without
such approval. This Agreement may not be amended except by an instrument
in writing signed by the parties hereto.
SECTION 8.04. Waiver. At any time prior to the Effective Time,
either the Company, on the one hand, or Buyer, on the other, may (a) extend
the time for the performance of any of the obligations or other acts of the
other party hereto, (b) waive any inaccuracies in the representations and
warranties of the other party contained herein or in any document delivered
pursuant hereto and (c) waive compliance by the other party with any of
the agreements or conditions contained herein. Any such extension or
waiver shall be valid only if set forth in an instrument in writing signed
by the party or parties to be bound thereby and, with respect to extensions
or waivers granted by the Company, if the Special Committee shall have
approved such waiver or extension.
SECTION 8.05. Fees, Expenses and Other Payments. (a) Subject to
paragraph (b) of this Section 8.05, all costs and expenses (including any
expenses related to any claims or litigation in connection with the
transactions contemplated by this Agreement, or any settlement thereof),
including, without limitation, fees and disbursements of counsel, financial
advisors and accountants and other out-of-pocket expenses, incurred or to
be incurred by the parties hereto in connection with the transactions
contemplated hereby (with respect to such party, its "Expenses"), shall be
borne solely and entirely by the party which has incurred such costs and
expenses; provided, however, that all costs and expenses related to
printing and mailing the Proxy Statement shall be borne by the Company.
(b) The Company agrees that if this Agreement shall be terminated by
Buyer pursuant to Section 8.01(b) or (f), then the Company will, subject to
its receipt of reasonable supporting documentation, pay to Buyer, Xxxxxxx
and Liberty their reasonable Expenses incurred or to be incurred in
connection with the transactions contemplated by this Agreement. Any
payment required to be made pursuant to this paragraph (b) shall be made as
promptly as practicable but not later than two business days after
termination of this Agreement and, in any such case, shall be made by wire
transfer of immediately available funds to an account designated by Buyer.
ARTICLE IX
GENERAL PROVISIONS
SECTION 9.01. Effectiveness of Representations, Warranties and
Agreements. (a) Except as set forth in Section 9.01(b), the
representations, warranties and agreements of each party hereto shall
remain operative and in full force and effect, regardless of any
investigation made by or on behalf of any other party hereto, any person
controlling any such party or any of their respective officers or
directors, whether prior to or after the execution of this Agreement.
(b) The representations, warranties and agreements in this Agreement
shall terminate at the Effective Time or upon the termination of this
Agreement pursuant to Article VIII, except that the agreements set forth in
Articles I, II and IX and Section 6.05 shall survive the Effective Time and
those set forth in the last sentence of Section 6.01(a) and Sections 8.02
and 8.05 and Article IX shall survive termination.
SECTION 9.02. Notices. All notices and other communications given or
made pursuant hereto shall be in writing and shall be deemed to have been
duly given or made as of the date delivered or transmitted, and shall be
effective upon receipt, if delivered personally, mailed by registered or
certified mail (postage prepaid, return receipt requested) to the parties
at the following addresses (or at such other address for a party as shall
be specified by like changes of address) or sent by electronic transmission
to the telecopier number specified below:
(a) If to Buyer or Xxxxxxx:
Xxxxxx X. Xxxxxxx
0000 Xxxxxxx Xxxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
with a copy to:
Arent Fox Xxxxxxx Xxxxxxx & Xxxx
0000 Xxxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000-0000
Attention: X. Xxx Xxxxxxxx
Telecopier No.: (000) 000-0000
(b) If to Buyer or Liberty:
Liberty Media Corporation
0000 Xxxx Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx
Telecopier No.: (000) 000-0000
with a copy to:
Xxxxx & Xxxxx, L.L.P.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxxx X. XxXxxxx
Telecopier No.: (000) 000-0000
(c) If to the Company:
BET Holdings, Inc.
Xxx XXX Xxxxx
0000 X Xxxxx X.X.
Xxxxxxxxxx, X.X. 00000-0000
Attention: President
Telecopier No.: (000) 000-0000
with separate copies to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
0000 Xxx Xxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Attention: Xxxxxxx X. Xxxxx
Xxxxxxx X. Xxxxxxxx
Telecopier No.: (000) 000-0000
and
Freedman, Levy, Xxxxx & Xxxxxxx
0000 Xxxxxxxxxxx Xxxxxx, X.X.
Xxxxx 000
Xxxxxxxxxx, X.X. 00000
Attention: Xxxxxx X. Xxxx
Telecopier No.: (000) 000-0000
SECTION 9.03. Certain Definitions. For purposes of this Agreement,
the term:
(a) "affiliate" means a person that, directly or indirectly, through
one or more intermediaries, controls, is controlled by, or is under common
control with, the first mentioned person;
(b) "business day" means any day other than a day on which (i) banks
in the State of New York are authorized or obligated to be closed or (ii)
the SEC or The New York Stock Exchange, Inc. is closed;
(c) "control" (including the terms "controlled," "controlled by" and
"under common control with") means the possession, directly or indirectly
or as trustee or executor, of the power to direct or cause the direction of
the management or polices of a person or entity, whether through the
ownership of stock or as trustee or executor, by contract or credit
arrangement or otherwise; and
(d) "person" means any person or any corporation, partnership,
limited liability company or other legal entity.
(e) "subsidiary" or "subsidiaries" of any person means any
corporation, partnership, joint venture or other legal entity of which such
person (either alone or through or together with any other subsidiary)
owns, directly or indirectly, at least a majority of the securities or
other interests having by their terms ordinary voting power to elect a
majority of the Board of Directors or others performing similar functions
with respect to such corporation or other organization.
SECTION 9.04. Headings. The headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
SECTION 9.05. Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of
law or public policy, all other conditions and provisions of this Agreement
shall nevertheless remain in full force and effect so long as the economic
or legal substance of the transactions contemplated hereby is not affected
in any manner materially adverse to any party. Upon such determination
that any term or other provision is invalid, illegal or incapable of being
enforced, the parties hereto shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely as
possible to the fullest extent permitted by applicable law in an acceptable
manner to the end that the transactions contemplated hereby are fulfilled
to the extent possible.
SECTION 9.06. Entire Agreement. This Agreement (together with the
Exhibits, the Disclosure Schedules, the Confidentiality Agreement and the
other documents delivered in connection herewith), constitutes the entire
agreement of the parties and supersedes all prior agreements and
undertakings, both written and oral, between the parties, or any of them,
with respect to the subject matter hereof.
SECTION 9.07. Assignment. This Agreement shall not be assigned by
operation of law or otherwise and any purported assignment shall be null
and void, provided that any of Xxxxxxx, Liberty or Buyer may assign his or
its rights, but not his or its obligations, under this Agreement to any
subsidiary of such person.
SECTION 9.08. Parties in Interest. This Agreement shall be binding
upon and inure solely to the benefit of each party hereto, and nothing in
this Agreement, express or implied (other than the provisions of Section
6.05, which provisions are intended to benefit and may be enforced by the
beneficiaries thereof), is intended to or shall confer upon any person any
right, benefit or remedy of any nature whatsoever under or by reason of
this Agreement.
SECTION 9.09. Governing Law. This Agreement shall be governed by,
and construed in accordance with, the laws of the State of Delaware,
without regard to the conflict of laws rules thereof.
SECTION 9.10. Submission to Jurisdiction; Waivers. Each party hereto
irrevocably agrees that any legal action or proceeding with respect to this
Agreement or for recognition and enforcement of any judgment in respect
hereof brought by the other party hereto or its successors or assigns may
be brought and determined in the Court of Chancery, or other courts, of the
State of Delaware, and each party hereto hereby irrevocably submits with
regard to any such action or proceeding for itself and in respect to his or
its property, generally and unconditionally, to the nonexclusive
jurisdiction of the aforesaid courts. Each party hereto hereby irrevocably
waives, and agrees not to assert, by way of motion, as a defense,
counterclaim or otherwise, in any action or proceeding with respect to this
Agreement, (a) the defense of sovereign immunity, (b) any claim that he or
it is not personally subject to the jurisdiction of the courts for any
reason other than the failure to serve process in accordance with this
Section 9.10, (c) that he or it, or its property, is exempt or immune from
jurisdiction of any such court or from any legal process commenced in such
courts (whether through service of notice, attachment prior to judgment,
attachment in aid of execution of judgment, execution of judgment or
otherwise), and (d) to the fullest extent permitted by applicable law, that
(i) the suit, action or proceeding in any such court is brought in an
inconvenient forum, (ii) the venue of such suit, action or proceeding is
improper and (iii) this Agreement, or the subject matter hereof, may not be
enforced in or by such courts.
SECTION 9.11. Enforcement of this Agreement. The parties hereto
agree that irreparable damage would occur in the event that any of the
provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed that
the parties shall be entitled to an injunction or injunctions to prevent
breaches of this Agreement and to enforce specifically the terms and
provisions hereof, this being in addition to any other remedy to which they
are entitled at law or in equity.
SECTION 9.12. Counterparts. This Agreement may be executed in one or
more counterparts, and by the different parties hereto in separate
counterparts, each of which when executed shall be deemed to be an original
but all of which taken together shall constitute one and the same
agreement.
IN WITNESS WHEREOF, Xxxxxxx, Liberty, Buyer, and the Company have
caused this Agreement to be executed as of the date first written above by
their respective officers thereunto duly authorized.
BET HOLDINGS, INC.
By: /s/ Xxxxx Xxx
------------------------------------
Name: Xxxxx Xxx
Title: President and Chief Operating Officer
/s/ Xxxxxx X. Xxxxxxx
-----------------------------------------
Xxxxxx X. Xxxxxxx
LIBERTY MEDIA CORPORATION
By: /s/ Xxxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: President
BTV ACQUISITION CORPORATION
By: /s/ Xxxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: President
