EXECUTION COPY
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
ADELPHIA COMMUNICATIONS CORPORATION
ADELPHIA ACQUISITION SUBSIDIARY, INC.
AND
CENTURY COMMUNICATIONS CORP.
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DATED AS OF MARCH 5, 1999
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TABLE OF CONTENTS
Page
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ARTICLE I
THE MERGER.................................................................. 5
Section 1.01 The Merger ................................................... 5
Section 1.02 Conversion of Shares ......................................... 5
Section 1.03 Merger Consideration ......................................... 6
Section 1.04 Letter of Transmittal. ....................................... 6
Section 1.05 Deposit of Merger Consideration. ............................. 6
Section 1.06 Surrender and Payment ........................................ 7
Section 1.07 Adjustments .................................................. 8
Section 1.08 Fractional Shares ............................................ 8
Section 1.09 Withholding of Tax ........................................... 8
Section 1.10 Lost Certificates ............................................ 8
Section 1.11 Stock Transfer Books. ........................................ 8
Section 1.12 Shareholder Approval ......................................... 9
Section 1.13 Stock Options and Restricted Stock ........................... 9
ARTICLE II
THE SURVIVING CORPORATION ..................................................10
Section 2.01 Certificate of Incorporation .................................10
Section 2.02 Bylaws .......................................................10
Section 2.03 Directors ....................................................10
Section 2.04 Officers .....................................................10
Section 2.05 Name .........................................................10
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY ..............................10
Section 3.01 Corporate Existence and Power ................................10
Section 3.02 Corporate Authorization ......................................11
Section 3.03 Governmental Authorization ...................................11
Section 3.04 Non-contravention ............................................12
Section 3.05 Capitalization ...............................................12
Section 3.06 Significant Subsidiaries .....................................13
Section 3.07 SEC Filings ..................................................14
Section 3.08 Financial Statements .........................................14
Section 3.09 Disclosure Documents .........................................14
Section 3.10 Absence of Certain Changes or Events .........................15
Section 3.11 Litigation ...................................................15
Section 3.12 Taxes ........................................................15
Section 3.13 Employee Benefit Plans .......................................16
Section 3.14 Brokers ......................................................17
Section 3.15 Compliance with Applicable Laws ..............................17
Section 3.16 Environmental Matters ........................................18
Section 3.17 Opinion of Financial Advisor .................................18
Section 3.18 No Other Representations .....................................18
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB.................... 18
Section 4.01 Corporate Existence and Power ................................19
Section 4.02 Corporate Authorization ......................................19
Section 4.03 Governmental Authorization ...................................19
Section 4.04 Non-contravention ............................................20
Section 4.05 Capitalization ...............................................20
Section 4.06 Significant Subsidiaries .....................................21
Section 4.07 SEC Filings ..................................................22
Section 4.08 Financial Statements .........................................22
Section 4.09 Disclosure Documents .........................................22
Section 4.10 Absence of Certain Changes or Events .........................23
Section 4.11 Litigation ...................................................23
Section 4.12 Brokers ......................................................23
Section 4.13 Compliance with Applicable Laws ..............................24
Section 4.14 Interested Shareholder .......................................24
Section 4.15 Ownership of Merger Sub; No Prior Activities..................24
Section 4.16 Opinion of Financial Advisor .................................24
Section 4.17 No Other Representations .....................................24
ARTICLE V
COVENANTS OF THE COMPANY................................................... 24
Section 5.01 Conduct of the Company .......................................24
Section 5.02 Other Transactions ...........................................27
Section 5.03 Affiliates ...................................................27
ARTICLE VI
COVENANTS OF PARENT, MERGER SUB AND THE SURVIVING CORPORATION.............. 24
Section 6.01 Indemnification; Directors' and Officers' Insurance...........28
Section 6.02 Employee Benefit Arrangements ................................29
Section 6.03 Listing, Registration ........................................29
Section 6.04 Conduct of Parent ............................................29
Section 6.05 Obligations of Merger Sub ....................................29
ARTICLE VII
COVENANTS OF PARENT, MERGER SUB AND THE COMPANY.............................26
Section 7.01 Reasonable Best Efforts ......................................30
Section 7.02 Registration Statement .......................................30
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Section 7.03 Company Shareholder Meeting ..................................30
Section 7.04 Consents .....................................................31
Section 7.05 Public Announcements .........................................31
Section 7.06 Notification of Certain Matters ..............................31
Section 7.07 Antitrust Matters ............................................31
Section 7.08 Access to Information ........................................32
Section 7.09 Tax-free Reorganization ......................................33
Section 7.10 Dissenting Shareholders ......................................33
Section 7.11 Registration Rights. .........................................33
Section 7.12 Board of Directors ...........................................33
Section 7.13 Citizens Joint Venture .......................................34
ARTICLE VIII
CONDITIONS TO THE MERGER....................................................34
Section 8.01 Conditions to the Obligations of Each Party...................34
Section 8.02 Conditions Precedent to the Obligations of Merger Sub.........34
Section 8.03 Conditions Precedent to the Obligations of the Company........35
ARTICLE IX
TERMINATION ............................................................... 36
Section 9.01 Termination ..................................................36
Section 9.02 Effect of Termination ........................................37
Section 9.03 Fees and Expenses ............................................37
ARTICLE X
MISCELLANEOUS ............................................................. 37
Section 10.01 Notices 37
Section 10.02 Survival of Representations, Warranties and Agreements........38
Section 10.03 Amendment ....................................................38
Section 10.04 Extension; Waiver ............................................39
Section 10.05 Successors and Assigns .......................................39
Section 10.06 Governing Law ................................................39
Section 10.07 Jurisdiction .................................................39
Section 10.08 Counterparts; Effectiveness ..................................39
Section 10.09 Entire Agreement; No Third-party Beneficiaries................39
Section 10.10 Headings .....................................................40
Section 10.11 Severability .................................................40
Section 10.12 Definitions. .................................................40
Exhibit A: Class B Voting Agreement
Exhibit B: Rigas Class B Voting Agreement
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement") is dated as of
March 5, 1999 among Adelphia Communications Corporation, a Delaware corporation
("Parent"), Adelphia Acquisition Subsidiary, Inc., a Delaware corporation and a
direct, wholly-owned subsidiary of Parent ("Merger Sub") and Century
Communications Corp., a New Jersey corporation (the "Company").
RECITALS
A. The respective Boards of Directors of Parent, Merger Sub and the
Company have approved, and deem it advisable and in the best interests of their
respective shareholders to consummate, the acquisition of the Company by Parent
on the terms and conditions set forth herein.
B. The parties intend that the acquisition contemplated by this
Agreement constitute a "reorganization" within the meaning of Section 368(a) of
the Code (as defined in Section 10.12(a)).
C. As an inducement to Parent to enter into this Agreement and to
incur the obligations set forth herein, all of the holders of Class B Company
Common Stock (as defined in Section 1.02(a)) (the "Class B Shareholders"),
concurrently with the execution and delivery of this Agreement, are entering
into a Voting Agreement with Parent in the form of Exhibit A (the "Class B
Voting Agreement") pursuant to which the Class B Shareholders have agreed to
vote the shares of the Class B Company Common Stock (as defined in Section
1.02(a)) owned by them in favor of this Agreement and the Merger.
D. As an inducement to the Company to enter into this Agreement and
to incur the obligations set forth herein, certain shareholders of Parent (the
"Parent Shareholders"), concurrently with the execution and delivery of this
Agreement, are entering into a Voting Agreement with the Company in the form of
Exhibit B (the "Rigas Class B Voting Agreement") pursuant to which the Parent
Shareholders have agreed to vote the shares of Parent Common Stock (as defined
in Section 1.03(a)) owned by them in favor of this Agreement and the Merger.
In consideration of the premises and the respective representations,
warranties, covenants, and agreements set forth herein, the parties agree as
follows.
ARTICLE I
THE MERGER
Section 1.01 The Merger.
(a) At the Effective Time (as defined in Section 1.01(c)), the
Company shall be merged (the "Merger") with and into Merger Sub in accordance
with the New Jersey Business
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Corporation Act (the "NJBCA") and the General Corporation Law of the State of
Delaware, whereupon the separate existence of the Company will cease, and Merger
Sub shall be the surviving corporation (the "Surviving Corporation").
(b) The closing of the Merger (the "Closing") will take place at
10:00 a.m. (New York City time) on a date to be specified by the parties (the
"Closing Date"), which shall be no later than the second Business Day after
satisfaction of the conditions set forth in Article VIII, at the offices of
Xxxxxx, Xxxx & Xxxxxxxx LLP, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, unless
the parties agree in writing to another time, date or place.
(c) Upon the Closing, the Company and Merger Sub will file a
certificate of merger with the Secretaries of State of the States of New Jersey
and Delaware and make all other filings or recordings required by New Jersey and
Delaware law in connection with the Merger. The Merger will become effective at
such time as the certificates of merger are filed with the Secretaries of State
of the States of New Jersey and Delaware or at such later time as is specified
in the certificates of merger (the "Effective Time").
(d) From and after the Effective Time, the Surviving Corporation will
possess all the rights, powers, privileges and franchises and be subject to all
of the obligations, liabilities, restrictions and disabilities of the Company
and Merger Sub, all as provided under the Delaware General Corporation Law.
Section 1.02 Conversion of Shares. At the Effective Time:
(a) Each share of (i) Class A capital stock of the Company, par value
$0.01 per share (the "Class A Company Common Stock") issued and outstanding
immediately prior to the Effective Time will be converted into the right to
receive the Class A Merger Consideration (as defined in Section 1.03(a)) and
(ii) Class B capital stock of the Company, par value $0.01 per share (the "Class
B Company Common Stock" and together with the Class A Company Common Stock, the
"Company Common Stock"), issued and outstanding immediately prior to the
Effective Time will be converted into the right to receive the Class B Merger
Consideration (as defined in Section 1.03(b)).
(b) Each share of Company Common Stock held by the Company as
treasury stock or owned by Parent or any of the Parent Subsidiaries immediately
prior to the Effective Time will be canceled, and no payment will be made with
respect thereto.
(c) Each issued and outstanding share of capital stock of Merger Sub
will remain outstanding and will be unchanged as a result of the Merger.
Section 1.03 Merger Consideration.
(a) The term "Class A Merger Consideration" means the right to
receive, for each share of Class A Company Common Stock, $9.16426528 in cash and
0.61222732 shares of Parent Class A Common Stock, par value $.01 per share
("Parent Common Stock").
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(b) The term "Class B Merger Consideration" means the right to
receive, for each share of Class B Company Common Stock, $11.81417001 in cash
and 0.63595483 shares of Parent Common Stock. The Class B Merger Consideration
and the Class A Merger Consideration are referred to herein as the "Merger
Consideration."
Section 1.04 Letter of Transmittal. On or prior to the Effective Time,
Parent will authorize one or more commercial banks acceptable to the Company,
organized under the laws of the United States or any state thereof, to act as
Exchange Agent hereunder (the "Exchange Agent"). Promptly after the Effective
Time, Parent will cause the Exchange Agent to mail to each record holder of
Company Common Stock at the Effective Time (i) a letter of transmittal (the
"Letter of Transmittal") that will specify that delivery will be effected, and
risk of loss and title to the certificates formerly representing the Company
Common Stock will pass, upon delivery of such certificates to the Exchange Agent
and will be in such form and have such other provisions, including appropriate
provisions with respect to back-up withholding, as Parent reasonably may specify
and (ii) instructions for use in effecting the surrender of the certificates
formerly representing shares of Company Common Stock in exchange for the Merger
Consideration.
Section 1.05 Deposit of Merger Consideration. On or prior to the
Effective Time, Parent will deposit with the Exchange Agent, for the benefit of
the former holders of Company Common Stock, cash and certificates sufficient to
pay the Merger Consideration for all the shares of Company Common Stock. The
shares of Parent Common Stock into which shares of Company Common Stock will be
converted pursuant to the Merger will be deemed to have been issued at the
Effective Time for purposes of entitlement to dividends declared, if any, after
the Effective Time.
Section 1.06 Surrender and Payment.
(a) Upon surrender for cancellation to the Exchange Agent of a
certificate formerly representing shares of Company Common Stock, together with
the Letter of Transmittal, duly executed and completed in accordance with the
instructions thereto, the holder thereof will be entitled to receive (i) a
certified or bank cashier's check in the amount equal to the aggregate amount of
Merger Consideration that takes the form of cash which such holder has the right
to receive pursuant to the provisions of this Article I (including any dividends
or distributions related thereto which such former holder of Company Common
Stock is entitled to receive pursuant to the provisions of Section 1.06(c) and
any cash in lieu of fractional shares of Parent Common Stock pursuant to Section
1.08) and (ii) certificates representing the aggregate number of shares of
Parent Common Stock with respect to the Merger Consideration that takes the form
of Parent Company Stock which such holder has the right to receive pursuant to
the provisions of this Article I, less the amount of any required withholding
taxes, if any, in accordance with Section 1.09. After the Effective Time and
until so surrendered, each certificate representing shares of Company Common
Stock will represent for all purposes only the right to receive the Merger
Consideration.
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(b) If the Merger Consideration (or any portion thereof) is to be
delivered to a Person other than the Person in whose name the surrendered
certificate or certificates are registered, it will be a condition of such
delivery that the surrendered certificate or certificates shall be properly
endorsed or otherwise be in proper form for transfer and that the Person
requesting such payment shall pay any transfer or other Taxes required by reason
of the delivery of the Merger Consideration to a Person other than the
registered holder of the surrendered certificate or certificates or such Person
shall establish to the satisfaction of the Exchange Agent that any such Tax has
been paid or is not applicable.
(c) No dividends or other distributions declared or made with respect
to Parent Common Stock on or after the Effective Time will be paid to the holder
of any certificate that theretofore evidenced shares of Company Common Stock
until such certificate is surrendered as provided in this Section 1.06. Upon
such surrender, Parent will be pay to the holder of the certificates evidencing
shares of Parent Common Stock issued in exchange therefor, without interest, the
amount of dividends or other distributions with a record date after the
Effective Time payable with respect to shares of Parent Common Stock.
(d) Any portion of the Merger Consideration made available to the
Exchange Agent pursuant to Section 1.05 that remains unclaimed by holders of
shares of Company Common Stock two years after the Effective Time will be
returned to Parent upon demand. Any such holder who has not exchanged shares of
Company Common Stock for the Merger Consideration in accordance with this
Article I prior to that time thereafter will look only to Parent for payment of
the Merger Consideration in respect of such shares of Company Common Stock.
Section 1.07 Adjustments. If at any time during the period between the
date of this Agreement and the Effective Time, any change in the outstanding
shares of capital stock of Parent occurs, including by means of any
reclassification, recapitalization, stock split or combination, exchange or
readjustment of shares, or any stock dividend thereon with a record date during
such period, the Merger Consideration will be adjusted appropriately.
Section 1.08 Fractional Shares. No fractional shares of Parent Common
Stock will be issued in the Merger. All fractional shares of Parent Common Stock
that a holder of shares of Company Common Stock otherwise would be entitled to
receive as a result of the Merger will be aggregated. If a fractional share
results from such aggregation, in lieu thereof such holder will be entitled to
receive from Parent, promptly after the Effective Time, an amount in cash
determined by multiplying the closing price of a share of Parent Common Stock on
the Nasdaq National Market on the trading day immediately preceding the
Effective Time by the fraction of a share of Parent Common Stock to which such
holder would otherwise have been entitled.
Section 1.09 Withholding of Tax. Parent or the Exchange Agent will be
entitled to deduct and withhold from the consideration otherwise payable
pursuant to this Agreement to any former holder of Company Common Stock such
amounts as Parent or the Exchange Agent are required to deduct and withhold with
respect to the making of such payment under the Code,
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or any provision of state, local or foreign Tax law. To the extent that amounts
are so withheld by Parent or the Exchange Agent, such withheld amounts will be
treated for all purposes of this Agreement as having been paid to the former
holder of Company Common Stock in respect of whom such deduction and withholding
was made by Parent.
Section 1.10 Lost Certificates. If any certificate evidencing Company
Common Stock has been lost, stolen or destroyed, upon the making of an affidavit
of that fact by the Person claiming such certificate to be lost, stolen or
destroyed and, if reasonably required by Parent, the posting by such Person of a
bond in such reasonable amount as Parent may direct as indemnity against claims
that may be made against it with respect to such certificate, the Exchange Agent
will issue in exchange for such lost, stolen or destroyed certificate the Merger
Consideration to which such Person may be entitled pursuant to this Article I
and cash and any dividends or other distributions to which such Person may be
entitled pursuant to Section 1.06(a).
Section 1.11 Stock Transfer Books. At the Effective Time, the stock
transfer books of the Company will be closed and there will be no further
registration of transfers of shares of Company Common Stock on the records of
the Company. Certificates formerly representing shares of Company Common Stock
that are presented to the Surviving Corporation after the Effective Time will be
canceled and exchanged for certificates representing shares of Parent Common
Stock.
Section 1.12 Shareholder Approval. This Agreement will be submitted
for adoption and approval to the holders of shares of Class A Company Common
Stock and the holders of shares of Class B Company Common Stock at the Company
Shareholder Meeting (as defined in Section 7.03) in accordance with the
provisions of this Agreement. The affirmative vote of a majority of the votes
cast by the holders of shares entitled to vote thereon of Class A Company Common
Stock and Class B Company Common Stock (voting as separate classes) is required
to approve this Agreement. No other approval of the Company's shareholders is
required in order to consummate the Merger.
Section 1.13 Stock Options and Restricted Stock. As of the Effective
Time:
(a) Each outstanding option (an "Option") to purchase shares of Class
A Company Common Stock granted under the Company's 1985 Stock Option Plan, the
1993 Non-Employee Directors' Stock Option Plan and the 1994 Stock Option Plan,
or any similar plan or arrangement (collectively, the "Option Plans"), whether
or not then exercisable or vested, will become fully exercisable and vested. Any
restricted shares of Class A Company Common Stock issued pursuant to the 1992
Management Equity Incentive Plan will become fully vested and will cease to be
restricted.
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(b) Each outstanding Option, at the election of each holder of such
Option, which election will be available on an option-by-option basis, either:
(i) will be exercised, effective as of the Effective Time, and
each share of Class A Company Common Stock issuable with respect thereto
will be converted into the right to receive the Merger Consideration as
provided in Section 1.03; or
(ii) will be assumed by Parent and will become an option to
acquire, on the same terms and conditions as were applicable under the
Option Plans (except as provided in Section 1.13(a)), the number of shares
of Parent Common Stock as the holder of such Option would have been
entitled to receive pursuant to the Merger had such holder exercised such
Option in full immediately prior to the Effective Time and received the
Merger Consideration, at a price per share equal to (x) the aggregate
exercise price for the shares of Class A Company Common Stock otherwise
issuable pursuant to such Option divided by (y) the number of full shares
of Parent Common Stock deemed purchasable under such Option. In the case of
any Option to which Section 421 of the Code applies by reason of its
qualification under Section 422 of the Code, the option price, the number
of shares purchasable pursuant to such Option and the terms and conditions
of exercise of such option will be determined in order to comply with
Section 424 of the Code.
(c) Parent will take all corporate action necessary to reserve for
issuance a sufficient number of shares of Parent Common Stock for delivery upon
exercise of Options assumed by it in accordance with this Section 1.14. Promptly
after the Effective Time, Parent will file with the SEC a registration statement
on Form S-3 or S-8, as appropriate, covering the shares of Parent Common Stock
subject to such Options and will use its commercially reasonable efforts to
cause such registration statement to remain effective for so long as such
Options remain outstanding.
ARTICLE II
THE SURVIVING CORPORATION
Section 2.01 Certificate of Incorporation. The certificate of
incorporation of Merger Sub in effect at the Effective Time will be the
certificate of incorporation of the Surviving Corporation until amended in
accordance with applicable law.
Section 2.02 Bylaws. Subject to the provisions of Section 6.01, the
by-laws of Merger Sub in effect at the Effective Time will be the by-laws of the
Surviving Corporation until amended in accordance with applicable law.
Section 2.03 Directors. From and after the Effective Time, until
successors are duly elected or appointed and qualified in accordance with
applicable law, the directors of Merger Sub at the Effective Time will be the
directors of the Surviving Corporation.
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Section 2.04 Officers. From and after the Effective Time, until
successors are duly elected or appointed and qualified in accordance with
applicable law, the officers of Merger Sub at the Effective Time will be the
officers of the Surviving Corporation.
Section 2.05 Name. The name of the Surviving Corporation at the
Effective time will be Arahova Communications, Inc.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Parent that, except for
inaccuracies in the representations and warranties resulting from compliance by
the Company with any of its obligations under this Agreement or actions taken by
the Company in accordance with this Agreement and except as disclosed in the
Company Disclosure Schedule:
Section 3.01 Corporate Existence and Power. The Company is a
corporation duly incorporated, validly existing and in good standing under the
laws of the State of New Jersey and has all corporate power required to carry on
its business as now conducted. The Company is duly qualified to do business as a
foreign corporation and is in good standing in each jurisdiction where the
character of the property owned or leased by it or the nature of its activities
makes such qualification necessary, except for those jurisdictions where the
failure to be so qualified or be in good standing would not have a Material
Adverse Effect. The Company has delivered to Parent copies of the Company's
certificate of incorporation and by-laws as currently in effect.
Section 3.02 Corporate Authorization. The execution, delivery and
performance by the Company of this Agreement and the consummation by the Company
of the transactions contemplated hereby are within the Company's corporate
powers and, except for the approval and adoption by the Company's shareholders
of this Agreement and the Merger, have been duly authorized by all necessary
corporate action on the part of the Company. This Agreement has been duly and
validly executed and delivered by the Company and, assuming the due and valid
authorization, execution and delivery of this Agreement by Parent and Merger Sub
and receipt of all required approvals by the Company's shareholders in
connection with the consummation of the Merger, constitutes a valid and binding
agreement of the Company, enforceable in accordance with its terms except as may
be limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent
transfer and other similar laws affecting creditors' rights generally and by
equitable principles of general applicability. The Board of Directors of the
Company (the "Company Board") has approved the Merger, this Agreement, the Class
B Voting Agreement and the transactions contemplated hereby and thereby and such
approval, assuming the accuracy of the representation in Section 4.14, is
sufficient to render the provisions of Article 14A:10A of the NJBCA inapplicable
to the Merger, this Agreement, the Class B Voting Agreement and the transactions
contemplated hereby and thereby. No other corporate proceedings on the part of
the Company are necessary to authorize or approve this Agreement or to
consummate the
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transactions contemplated hereby (other than the approval and adoption of the
Merger and this Agreement by the shareholders of the Company to the extent
required by the Company's certificate of incorporation and by applicable law).
Section 3.03 Governmental Authorization. The execution, delivery and
performance by the Company of this Agreement and the consummation by the Company
of the Merger and the other transactions contemplated hereby require no consent,
waiver, approval, authorization or permit by or from, or action by or in respect
of, or filing with, any Governmental Entity, other than: (i) the filing of
certificates of merger as contemplated by Section 1.01(c); (ii) compliance with
any applicable requirements of state takeover laws; (iii) compliance with the
applicable requirements of the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976 as amended and the rules and regulations thereunder (the "HSR Act"); (iv)
compliance with any applicable requirements of the Securities Act of 1933, as
amended (together with the rules and regulations promulgated thereunder, the
"Securities Act") and the Securities Exchange Act of 1934, as amended (together
with the rules and regulations promulgated thereunder, the "Exchange Act"); (v)
compliance with any applicable requirements of the Communications Act of 1934,
as amended (together with the rules, regulations and published decisions of the
FCC (as defined below), the "Communications Act"); (vi) filings under state
securities or "blue-sky" laws; (vii) notice to, or consents, approvals or
waivers from, the relevant Franchising Authorities or other third parties in
connection with a change of control of the holder of the Franchises of the
Company and the Company Subsidiaries and of the Federal Communications
Commission (the "FCC") in connection with a change of control or a transfer of
assets of the holder of the FCC licenses of the Company and the Company
Subsidiaries; and (viii) such consents, waivers, approvals, authorizations,
permits, filings or actions that, if not taken, made or obtained, would not in
the aggregate have a Material Adverse Effect.
Section 3.04 Non-contravention. Assuming compliance with the matters
referred to in Section 3.03, the execution, delivery and performance by the
Company of this Agreement and the consummation by the Company of the
transactions contemplated hereby do not and will not: (i) assuming receipt of
the approval of shareholders of the Company referred to in Section 3.02,
contravene or conflict with the certificate of incorporation or by-laws of the
Company; (ii) contravene or conflict with or constitute a violation of any
provision of any law, regulation, judgment, injunction, order or decree binding
upon or applicable to the Company or any Company Subsidiary that would be a
significant subsidiary within the meaning of Regulation S-X under the Exchange
Act (a "Significant Subsidiary of the Company"); (iii) result in a breach or
violation of or constitute a default (or an event that with the giving of notice
or the lapse of time or both would constitute a default) under or give rise to a
right of termination, amendment, cancellation or acceleration of any right or
obligation of the Company or any Significant Subsidiary of the Company or to a
loss of any material benefit to which the Company or any Significant Subsidiary
of the Company is entitled or require any consent, approval or authorization
under any provision of any material agreement, contract or other instrument
binding upon the Company or any Significant Subsidiary of the Company or any of
their respective assets (including any material license, franchise, permit or
other similar authorization held by the Company or any Significant Subsidiary of
the Company); or (iv) result in the creation or imposition of any Lien on any
material asset of the Company or any Significant
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Subsidiary of the Company, except for such contraventions, conflicts or
violations referred to in clause (ii) and breaches, violations, defaults, rights
of termination, amendment, cancellation or acceleration, losses, Liens or other
occurrences referred to in clauses (iii) and (iv) (each, a "Violation") that in
the aggregate would not have a Material Adverse Effect. Upon consummation of the
Company's joint venture agreement with TCI Communications, Inc., the Company
will amend the Company Disclosure Schedule with respect to this Section 3.04 to
give effect to such transaction.
Section 3.05 Capitalization.
(a) As of February 11, 1999, the authorized capital stock of the
Company consisted of the following: (i) 400,000,000 shares of Class A Company
Common Stock, of which 32,879,755 were issued and outstanding; (ii) 300,000,000
shares of Class B Company Common Stock, of which 42,322,059 were issued and
outstanding; and (iii) 100,000,000 shares of preferred stock, of which no shares
were issued and outstanding.
(b) As of February 11, 1999, there were outstanding Options to
purchase an aggregate of 2,666,049 shares of Class A Company Common Stock (of
which Options to purchase an aggregate of 1,784,659 shares of Class A Company
Common Stock were exercisable).
(c) All outstanding shares of capital stock of the Company have been
duly authorized and validly issued and are fully paid and nonassessable. Except
as set forth in this Section 3.05 and except for changes since February 11, 1999
resulting from the exercise of Options outstanding on such date, there are
outstanding (i) no shares of capital stock or other voting securities of the
Company, (ii) no securities of the Company convertible into or exchangeable for
shares of capital stock or voting securities of the Company (other than the
shares of Class B Company Common Stock, which are convertible into shares of
Class A Company Common Stock) and (iii) no options or other rights to acquire
from the Company, and no obligation of the Company to issue, any capital stock,
voting securities or securities convertible into or exchangeable for capital
stock or voting securities of the Company (other than the shares of Class B
Company Common Stock, which are convertible into shares of Class A Company
Common Stock). The securities described in Section 3.05(a) and Section 3.05(b)
are referred to collectively as the "Company Securities"). Except pursuant to
the terms of the Company Securities, there are no outstanding obligations of the
Company or any Company Subsidiary to repurchase, redeem or otherwise acquire any
Company Securities.
(d) Except with respect to the interests in the Persons listed in the
Company Disclosure Schedule, there are no outstanding contractual obligations of
the Company or any Company Subsidiary to provide funds to, or make any
investment (in the form of a loan, capital contribution or otherwise) in, any
other Person other than to wholly-owned Company Subsidiaries or in the ordinary
course of business consistent with past practice.
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Section 3.06 Significant Subsidiaries.
(a) Each Significant Subsidiary of the Company is a corporation or
other legal entity duly organized, validly existing and (if applicable) in good
standing under the laws of its jurisdiction of organization, has all corporate,
partnership or similar powers required to carry on its business as now conducted
and is duly qualified to do business as a foreign corporation or other legal
entity and (if applicable) is in good standing in each jurisdiction where the
character of the property owned or leased by it or the nature of its activities
makes such qualification necessary, except where the failure to be duly
organized, validly existing and in good standing or to have such powers would
not have a Material Adverse Effect. All Significant Subsidiaries of the Company
and their respective jurisdictions of organization are identified in the Company
Disclosure Schedule.
(b) All of the outstanding shares of capital stock of, or other
ownership interests in, each Significant Subsidiary of the Company, are owned by
the Company, directly or indirectly, free and clear of any Lien and free of any
other limitation or restriction (including any restriction on the right to vote,
sell or otherwise dispose of such capital stock or other ownership interests).
There are no outstanding (i) securities of the Company or any Significant
Subsidiary of the Company convertible into or exchangeable for shares of capital
stock or other voting securities or ownership interests in any Significant
Subsidiary of the Company or (ii) options or other rights to acquire from the
Company or any Significant Subsidiary of the Company, and no other obligation of
the Company or any Significant Subsidiary of the Company to issue, any capital
stock, voting securities or other ownership interests in, or any securities
convertible into or exchangeable for any capital stock, voting securities or
ownership interests in, any Significant Subsidiary of the Company. The
securities described in clauses (i) and (ii) above are referred to collectively
as the "Company Subsidiary Securities". There are no outstanding obligations of
the Company or any Significant Subsidiary of the Company to repurchase, redeem
or otherwise acquire any outstanding Company Subsidiary Securities or pay any
dividend or make any other distribution in respect thereof to a Person other
than the Company or a wholly-owned Significant Subsidiary of the Company.
Section 3.07 SEC Filings. The Company has filed with the SEC all
forms, reports, definitive proxy statements, schedules and registration
statements required to be filed with the SEC since May 31, 1998 (the "Company
SEC Reports"). No Company Subsidiary is required to file any report, form or
document with the SEC pursuant to the Exchange Act or the Securities Act. As of
their respective filing dates, no Company SEC Report contained any untrue
statement of a material fact or omitted to state any material fact required to
be stated therein or necessary to make the statements made therein, in the light
of the circumstances under which they were made, not misleading. The Company SEC
Reports when filed complied in all material respects with applicable
requirements of the Securities Act and the Exchange Act.
Section 3.08 Financial Statements . The audited consolidated financial
statements and unaudited consolidated interim financial statements of the
Company included in the Company SEC Reports fairly present, in conformity with
GAAP applied on a consistent basis (except as may be indicated in the notes
thereto or in the case of unaudited interim financial
13
statements as permitted by Form 10-Q of the SEC), the consolidated financial
position of the Company and its consolidated Subsidiaries as of the dates
thereof and its consolidated statements of operations, shareholders' equity and
cash flows for the periods then ended (subject to normal year-end adjustments in
the case of any unaudited interim financial statements).
Section 3.09 Disclosure Documents.
(a) The Proxy Statement/Prospectus and any amendment or supplement
thereto, when filed, will comply as to form in all material respects with the
applicable requirements of the Securities Act and the Exchange Act. At the time
the Proxy Statement/Prospectus or any amendment or supplement thereto is first
mailed to shareholders of the Company and at the time such shareholders vote on
the approval and adoption of this Agreement, the Proxy Statement/Prospectus, as
supplemented or amended, if applicable, will not contain any untrue statement of
a material fact or omit to state any material fact necessary in order to make
the statements contained therein, in the light of the circumstances under which
they were made, not misleading. The representations and warranties in this
Section 3.09(a) do not apply to statements in or omissions from the Proxy
Statement/Prospectus or any amendment or supplement thereto based upon
information furnished to the Company by Parent for use therein.
(b) None of the information furnished to Parent for use in (or
incorporation by reference in) the Registration Statement (as defined in Section
4.09) or any amendment or supplement thereto will contain, at the time the
Registration Statement or any amendment or supplement thereto becomes effective,
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
contained therein, in light of the circumstances under which they were made, not
misleading.
Section 3.10 Absence of Certain Changes or Events. Since May 31, 1998,
except (x) as contemplated by this Agreement or disclosed in the Company SEC
Reports and (y) for any change resulting from the transactions contemplated by
this Agreement or general economic, financial, competitive or market conditions
or conditions or circumstances generally affecting the cable television or
communications industries, there has not been: (i) any change in the business,
operations or financial condition of the Company or any of the Company
Subsidiaries that has had or would reasonably be expected to have, individually
or in the aggregate, a Material Adverse Effect; (ii) any declaration, setting
aside or payment of any dividend or other distribution with respect to any
shares of capital stock of the Company, or any repurchase, redemption or other
acquisition by the Company or any of the Company Subsidiaries of any outstanding
shares of capital stock or other securities of, or other ownership interests in,
the Company or any of the Company Subsidiaries; (iii) any incurrence, assumption
or guarantee by the Company or any of the Company Subsidiaries of any material
indebtedness for borrowed money other than in the ordinary course and in amounts
and on terms consistent with past practices; or (iv) as of the date hereof, any
damage, destruction or other casualty loss (whether or not covered by insurance)
affecting the business or assets of the Company or any of the Company
Subsidiaries that has had or would reasonably be expected to have, individually
or in the aggregate, a Material Adverse Effect.
14
Section 3.11 Litigation. Except as set forth in the Company SEC
Reports filed prior to the date hereof, there is, as of the date hereof, no
action, suit or proceeding pending, or to the knowledge of the Company
threatened, against the Company or any Company Subsidiary before any court,
arbitrator or other Governmental Entity that would reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect.
Section 3.12 Taxes. Except to the extent that failure to do so would
not have a Material Adverse Effect, each of the Company and its Significant
Subsidiaries has filed all Tax returns and reports required to be filed by it
and has paid, or established adequate reserves for, all Taxes required to be
paid by it. No deficiencies for any Taxes have been proposed, asserted or
assessed against the Company that would have a Material Adverse Effect. No
requests for waivers of the time to assess any such Taxes are pending, other
than waivers relating to property taxes and sales and use taxes.
Section 3.13 Employee Benefit Plans.
(a) The Company Disclosure Schedule identifies each material
employment, severance or similar contract or arrangement or any plan, policy,
fund, program or contract or arrangement providing for compensation, bonus,
profit-sharing, stock option or other stock-related rights or other forms of
incentive or deferred compensation, vacation benefits, insurance coverage
(including any self-insured arrangements), health or medical benefits,
disability benefits, workers' compensation, supplemental unemployment benefits,
severance benefits and post-employment or retirement benefits (including
compensation, pension, health, medical or life insurance or other benefits) that
(i) is entered into, maintained, administered or contributed to, as the case may
be, by the Company or any Company Subsidiary and (ii) covers any employee or
former employee of any Company or Company Subsidiary employed in the United
States or Puerto Rico (each, an "Employee Plan").
(b) The Company has furnished or made available to Parent copies of
the Employee Plans (and, if applicable, related trust agreements) and all
amendments thereto and written interpretations thereof together with the most
recent annual report (Form 5500 including, if applicable, Schedule B thereto)
and the most recent actuarial valuation report prepared in connection with any
Employee Plan. There is no material accumulated funding deficiency, termination
or partial termination, or requirement to provide security with respect to any
Employee Plan. The fair market value of the assets of each material Employee
Plan would exceed the value of all liabilities and the obligations of such
Employee Plan if such plan were to terminate on the Closing Date. The
transaction contemplated by this Agreement will not result in any material
liability under ERISA to the Company or any of the Company's Subsidiaries or
Parent, or any of their respective ERISA Affiliates.
(c) Each Employee Plan that is intended to be qualified under Section
401(a) of the Code has been determined by the Internal Revenue Service to be
qualified under Section 401(a) of the Code and each trust related thereto has
been determined to be exempt from tax pursuant to Section 501(a) of the Code.
The Company is not aware of any event that has occurred since the date of such
determinations that would adversely affect such qualification or
15
tax exempt status. The Company has provided Parent with the most recent
determination letter of the Internal Revenue Service relating to each such
Employee Plan. Each Employee Plan has been maintained in compliance in all
material respects with its terms and with the requirements prescribed by any and
all applicable statutes, orders, rules and regulations, including the Employee
Retirement Income Security Act of 1974, as amended ("ERISA") and the Code.
(d) No Employee Plan is a Multiemployer plan as defined in Section
3(37) of ERISA or is a plan subject to Title IV of ERISA. Neither the Company
nor any Company Subsidiary or any of their ERISA Affiliates (or any former ERISA
Affiliate with respect to the period in which such entity was an ERISA
Affiliate) has ever maintained, adopted or established, contributed or been
required to contribute to, or otherwise participated or been required to
participate in, any such plan.
(e) Neither the Company nor any Company Subsidiary has any current or
projected material liability in respect of post-employment or post-retirement
health or medical or life insurance benefits for retired, former or current
employees of the Company, except as required to avoid excise tax under Section
4980B of the Code.
(f) There has been no amendment to, written interpretation of or
announcement by the Company, any Company Subsidiary or their respective
Affiliates relating to, or change in employee participation or coverage under,
any Employee Plan that would increase materially the expense of maintaining such
Employee Plan above the level of the expense incurred in respect thereof for the
most recent fiscal year ended prior to the date hereof, other than ordinary
course of business increases related to health, life and disability insurance
plans.
(g) Other than as disclosed in the Company SEC Reports, no employee
or former employee of the Company or any Company Subsidiary will become entitled
to any bonus, retirement, severance, job security or similar benefit or an
enhancement of such benefit (including acceleration of vesting or exercise of an
incentive award) under any Employee Plan as a result of the transactions
contemplated hereby.
(h) Other than routine claims for benefits and liability for premiums
due to the Pension Benefit Guaranty Corporation, neither the Company nor any
Company Subsidiary or ERISA Affiliate (or any former ERISA Affiliate with
respect to the period in which such entity was an ERISA Affiliate) has incurred
any material liability with respect to any Employee Plan that is currently due
and owing and has not yet been satisfied, including under ERISA, the Code or
other applicable law. No event has occurred and, to the knowledge of the
Company, there exists no condition or set of circumstances (other than the
accrual of benefits under the normal terms of the Employee Plans), that could
result in the imposition of any material liability on the Company or any Company
Subsidiary or ERISA Affiliate (or any former ERISA Affiliate with respect to the
period in which such entity was an ERISA Affiliate) with respect to any Employee
Plan, including under ERISA, the Code or other applicable law with respect to
any Employee Plan.
16
Section 3.14 Brokers. Except for the engagement of Xxxxxxxxx, Xxxxxx &
Xxxxxxxx Securities Corporation, none of the Company or any of the Company
Subsidiaries, or any of their respective officers, directors or employees, has
employed any investment banker, broker, finder or other intermediary or incurred
any liability for any brokerage fees, commissions or finder's fees in connection
with the transactions contemplated by this Agreement.
Section 3.15 Compliance with Applicable Laws. The Company and the
Company Subsidiaries are in substantial compliance with all laws, regulations
and orders of any Governmental Entity applicable to them, except where the
failure to comply would not have a Material Adverse Effect. The Company and each
Company Subsidiary are in material compliance with, and have obtained, all
licenses, permits, franchises or other governmental authorizations necessary to
the ownership of its properties or to the conduct of its business, except where
the failure to obtain such licenses, permits, franchises or other governmental
authorizations would not have a Material Adverse Effect.
Section 3.16 Environmental Matters. Except as would not have a
Material Adverse Effect: (i) to the Company's knowledge, no real property
currently or formerly owned or operated by the Company or any current Company
Subsidiary is contaminated with any Hazardous Substances to an extent or in a
manner or condition now requiring remediation under any Environmental Law; (ii)
no judicial or administrative proceeding is pending or, to the knowledge of the
Company, threatened relating to liability for any off-site disposal or
contamination; and (iii) the Company and the Company Subsidiaries have not
received in writing any claims or notices alleging liability under any
Environmental Law. To the Company's knowledge, neither the Company nor any
Company Subsidiary is in violation of any applicable Environmental Law and no
condition or event has occurred with respect to the Company or any Company
Subsidiary that would constitute a violation of such Environmental Law,
excluding in any event such violations, conditions and events that would not
have a Material Adverse Effect.
Section 3.17 Opinion of Financial Advisor. The Company has received
the written opinion of Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation to
the effect that the Merger Consideration is fair from a financial point of view
to the shareholders of the Company (other than shareholders who are Affiliates
of the Company).
Section 3.18 No Other Representations. Except as specifically set
forth in this Article III, the Company has not made, and Parent and Merger Sub
have not relied upon, any representations or warranties, whether express or
implied.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF
PARENT AND MERGER SUB
Parent and Merger Sub represent and warrant to the Company that,
except for inaccuracies in the representations and warranties resulting from
compliance by Parent and
17
Merger Sub with any of their obligations under this Agreement or actions taken
by Parent or Merger Sub in accordance with this Agreement and except as
disclosed in the Parent Disclosure Schedule:
Section 4.01 Corporate Existence and Power.
(a) Parent is a corporation duly incorporated, validly existing and
in good standing under the laws of the State of Delaware and has all corporate
power required to carry on its business as now conducted. Parent is duly
qualified to do business as a foreign corporation and is in good standing in
each jurisdiction where the character of the property owned or leased by it or
the nature of its activities makes such qualification necessary, except for
those jurisdictions where the failure to be so qualified or be in good standing
would not have a Material Adverse Effect. Parent has delivered to the Company
copies of Parent's certificate of incorporation and by-laws as currently in
effect.
(b) Merger Sub is a corporation duly incorporated, validly existing
and in good standing under the laws of the State of Delaware and has all
corporate power required to carry on its business as now conducted. Merger Sub
is duly qualified to do business as a foreign corporation and is in good
standing in each jurisdiction where the character of the property owned or
leased by it or the nature of its activities makes such qualification necessary,
except for those jurisdictions where the failure to be so qualified or be in
good standing would not have a Material Adverse Effect. Merger Sub has delivered
to the Company copies of Merger Sub's certificate of incorporation and by-laws
as currently in effect.
Section 4.02 Corporate Authorization. The execution, delivery and
performance by each of Parent and Merger Sub of this Agreement and the
consummation by Parent and Merger Sub of the transactions contemplated hereby
are within the corporate powers of each of Parent and Merger Sub and have been
duly authorized by all necessary corporate action on the part of Parent and
Merger Sub. This Agreement has been duly and validly executed and delivered by
each of Parent and Merger Sub and, assuming the due and valid authorization,
execution and delivery of this Agreement by the Company, constitutes a valid and
binding agreement of each of Parent and Merger Sub, enforceable in accordance
with its terms except as may be limited by bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer and other similar laws affecting
creditors' rights generally and by equitable principles of general
applicability. The Board of Directors of each of Parent and Merger Sub, and
Parent as the sole shareholder of Merger Sub, have approved the Merger, this
Agreement and the transactions contemplated hereby. No other corporate
proceedings or shareholder approvals on the part of Parent or Merger Sub are
necessary to authorize or approve this Agreement or to consummate the
transactions contemplated hereby (other than approval of the shareholders of
Parent.)
Section 4.03 Governmental Authorization. The execution, delivery and
performance by each of Parent and Merger Sub of this Agreement and the
consummation by each of Parent and Merger Sub of the Merger and the other
transactions contemplated hereby require no consent, waiver, approval,
authorization or permit by or from, or action by or in respect of, or filing
with, any Governmental Entity, other than: (i) the filing of certificates of
merger as
18
contemplated by Section 1.01(a); (ii) compliance with any applicable
requirements of state takeover laws; (iii) compliance with the applicable
requirements of the HSR Act; (iv) compliance with any applicable requirements of
the Securities Act and the Exchange Act; (v) compliance with any applicable
requirements of the Communications Act; (vi) filings under state securities or
"blue-sky" laws; (vii) notice to, or consents, approvals or waivers from, the
relevant Franchising Authorities or other third parties in connection with a
change of control of the holder of the Franchises of the Company and the Company
Subsidiaries and the FCC in connection with a change of control or a transfer of
assets of the holder of the FCC licenses of the Company and the Company
Subsidiaries, and (viii) such consents, waivers, approvals, authorizations,
permits, filings or actions that, if not taken, made or obtained, would not in
the aggregate have a Material Adverse Effect.
Section 4.04 Non-contravention. Assuming compliance with the matters
referred to in Section 4.03, the execution, delivery and performance by each of
Parent and Merger Sub of this Agreement and the consummation by each of Parent
and Merger Sub of the transactions contemplated hereby do not and will not: (i)
assuming receipt of the approval of the shareholders of the Parent referred to
in Section 4.02, contravene or conflict with the certificate of incorporation or
by-laws of each of Parent and Merger Sub; (ii) contravene or conflict with or
constitute a violation of any provision of any law, regulation, judgment,
injunction, order or decree binding upon or applicable to Parent, Merger Sub or
any Subsidiary of Parent that would be a significant subsidiary within the
meaning of Regulation S-X under the Exchange Act (a "Significant Subsidiary of
Parent"); (iii) assuming receipt of the approval of the shareholders of the
Parent referred to in Section 4.02, result in a breach or violation of or
constitute a default (or an event that with the giving of notice or the lapse of
time or both would constitute a default) under or give rise to a right of
termination, amendment, cancellation or acceleration of any right or obligation
of Parent, Merger Sub or any Significant Subsidiary of Parent or to a loss of
any material benefit to which Parent, Merger Sub or any Significant Subsidiary
of Parent is entitled or require any consent, approval or authorization under
any provision of any material agreement, contract or other instrument binding
upon Parent, Merger Sub or any Significant Subsidiary of Parent or any of their
respective assets (including any material license, franchise, permit or other
similar authorization held by Parent, Merger Sub or any Significant Subsidiary
of Parent); or (iv) result in the creation or imposition of any Lien on any
material asset of Parent, Merger Sub or any Significant Subsidiary of Parent,
except for such Violations that in the aggregate would not have a Material
Adverse Effect.
Section 4.05 Capitalization.
(a) As of February 28, 1999, the authorized capital stock of Parent
consisted of the following: (i) 200,000,000 shares of Class A Common Stock, par
value $.01 per share, of which 42,328,343 were issued and outstanding; (ii)
25,000,000 shares of Class B Common Stock par value $.01 per share, of which
10,834,476 were issued and outstanding; and (iii) 5,000,000 shares of preferred
stock, of which 1,500,000 shares (issued as 13% Redeemable Exchangeable
Preferred Stock) and 80,000 shares (issued as 8 1/8% Series C Convertible
Preferred Stock convertible into 9,433,962 shares of the Parent's Class A Common
Stock) were issued and outstanding.
19
(b) As of February 28, 1999, there were no outstanding options to
purchase Parent Common Stock.
(c) All outstanding shares of capital stock of Parent have been duly
authorized and validly issued and are fully paid and nonassessable. Except as
set forth in this Section 4.05, as of February 28, 1999, there are outstanding
(i) no shares of capital stock or other voting securities of Parent, (ii) no
securities of Parent convertible into or exchangeable for shares of capital
stock or voting securities of Parent and (iii) no options or other rights to
acquire from Parent, and no obligation of Parent to issue, any capital stock,
voting securities or securities convertible into or exchangeable for capital
stock or voting securities of Parent. The securities described in clauses (a)
and (b) of this Section 4.05 and the securities referred to in the Parent SEC
Reports are referred to collectively as the "Parent Securities". Except pursuant
to the terms of the Parent Securities, there are no outstanding obligations of
Parent or any Parent Subsidiary to repurchase, redeem or otherwise acquire any
Parent Securities.
(d) As of March 5, 1998, except as disclosed in the Parent SEC
Reports and except with respect to the interests in the Persons listed in the
Parent Disclosure Schedule, there are no outstanding contractual obligations of
Parent or any Parent Subsidiary to provide funds to, or make any investment (in
the form of a loan, capital contribution or otherwise) in, any other Person
other than to wholly-owned Parent Subsidiaries or in the ordinary course of
business consistent with past practice.
Section 4.06 Significant Subsidiaries.
(a) Each Significant Subsidiary of Parent is a corporation or other
legal entity duly organized, validly existing and (if applicable) in good
standing under the laws of its jurisdiction of organization, has all corporate,
partnership or similar powers required to carry on its business as now conducted
and is duly qualified to do business as a foreign corporation or other legal
entity and (if applicable) is in good standing in each jurisdiction where the
character of the property owned or leased by it or the nature of its activities
makes such qualification necessary, except where the failure to be duly
organized, validly existing and in good standing or to have such powers would
not have a Material Adverse Effect. As of March 5, 1999, all Significant
Subsidiaries of Parent and their respective jurisdictions of organization are
identified in the Parent Disclosure Schedule.
(b) Except as disclosed in the Parent SEC Reports), all of the
outstanding shares of capital stock of, or other ownership interests in, each
Significant Subsidiary of Parent, are owned by Parent, directly or indirectly,
free and clear of any Lien and free of any other limitation or restriction
(including any restriction on the right to vote, sell or otherwise dispose of
such capital stock or other ownership interests). Except as disclosed in the
Parent SEC Reports, there are no outstanding (i) securities of Parent or any
Significant Subsidiary of Parent convertible into or exchangeable for shares of
capital stock or other voting securities or ownership interests in any
Significant Subsidiary of Parent or (ii) options or other rights to acquire from
Parent or any Significant Subsidiary of Parent, and no other obligation of
Parent or any Significant Subsidiary of Parent to issue, any capital stock,
voting securities or other
20
ownership interests in, or any securities convertible into or exchangeable for
any capital stock, voting securities or ownership interests in, any Significant
Subsidiary of Parent. The securities described in clauses (i) and (ii) above are
referred to collectively as the "Parent Subsidiary Securities"). Except as
disclosed in the Parent SEC Reports, there are no outstanding obligations of
Parent or any Significant Subsidiary of Parent to repurchase, redeem or
otherwise acquire any outstanding Parent Subsidiary Securities or pay any
dividend or make any other distribution in respect thereof to a Person other
than Parent or a wholly-owned Significant Subsidiary of Parent.
Section 4.07 SEC Filings. Parent and Hyperion Telecommunications, Inc.
each have filed with the SEC all forms, reports, definitive proxy statements,
schedules and registration statements required to be filed with the SEC since
March 31, 1998 (collectively, the "Parent SEC Reports"). Except for Hyperion
Telecommunications, Inc., as of March 5, 1999, no Parent Subsidiary is required
to file any report, form or document with the SEC pursuant to the Exchange Act
or the Securities Act. As of their respective filing dates, no Parent SEC Report
contained any untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary to make the statements
made therein, in the light of the circumstances under which they were made, not
misleading. The Parent SEC Reports when filed complied in all material respects
with applicable requirements of the Securities Act and the Exchange Act.
Section 4.08 Financial Statements. The audited consolidated financial
statements and unaudited consolidated interim financial statements of Parent
included in the Parent SEC Reports fairly present, in conformity with GAAP
applied on a consistent basis (except as may be indicated in the notes thereto
or in the case of unaudited interim financial statements as permitted by Form
10-Q of the SEC), the consolidated financial position of Parent and its
consolidated Subsidiaries as of the dates thereof and its consolidated
statements of operations, shareholders' equity and cash flows for the periods
then ended (subject to normal year-end adjustments in the case of any unaudited
interim financial statements).
Section 4.09 Disclosure Documents.
(a) The registration statement on Form S-4 of Parent to be filed with
the SEC in connection with the Merger (the "Registration Statement") and any
amendment or supplement thereto, when filed, will comply as to form in all
material respects with the applicable requirements of the Securities Act. At the
time the Registration Statement is declared effective by the SEC, the
Registration Statement will not contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary to
make the statements contained therein not misleading. At the time the Proxy
Statement/Prospectus included in the Registration Statement and forming a part
thereof or any amendment or supplement thereto is first mailed to shareholders
of the Company and at the time such shareholders vote on the approval and
adoption of this Agreement, the Proxy Statement/Prospectus, as supplemented or
amended, if applicable, will not contain any untrue statement of a material fact
or omit to state any material fact necessary in order to make the statements
contained therein, in the light of the circumstances under which they were made,
not misleading. The representations and warranties in this Section 4.09(a) do
not apply to statements in or omissions from the Registration Statement
21
or the Proxy Statement/Prospectus or any amendment or supplement thereto based
upon information furnished to Parent by the Company for use therein.
(b) None of the information furnished to the Company for use in (or
incorporation by reference in) the Proxy Statement/Prospectus or any amendment
or supplement thereto will contain, at the time the Proxy Statement/Prospectus
included in the Registration Statement and forming a part thereof or any
amendment or supplement thereto is first mailed to shareholders of the Company
and at the time such shareholders vote on the approval and adoption of this
Agreement, any untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements contained therein, in the light
of the circumstances under which they were made, not misleading.
Section 4.10 Absence of Certain Changes or Events. Since the date of
the most recent audited financial statements included in the Parent SEC Reports,
except (x) as contemplated by this Agreement or disclosed in the Parent SEC
Reports and (y) for any change resulting from the transactions contemplated by
this Agreement or general economic, financial, competitive or market conditions
or conditions or circumstances generally affecting the cable television or
communications industries, there has not been: (i) any change in the business,
operations or financial condition of Parent or any of the Parent Subsidiaries
that has had or would reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect; (ii) any incurrence, assumption or
guarantee by Parent or any of the Parent Subsidiaries of any material
indebtedness for borrowed money other than in the ordinary course and in amounts
and on terms consistent with past practices; or (iii) as of the date hereof, any
damage, destruction or other casualty loss (whether or not covered by insurance)
affecting the business or assets of Parent or any of the Parent Subsidiaries
that has had or would reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect.
Section 4.11 Litigation. Except as set forth in the Parent SEC Reports
filed prior to the date hereof, there is, as of the date hereof, no action, suit
or proceeding pending, or to the knowledge of Parent threatened, against Parent
or any Parent Subsidiary before any court, arbitrator or other Governmental
Entity that would reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect.
Section 4.12 Brokers. None of Parent, Merger Sub or any Parent
Subsidiary, or any of their respective officers, directors or employees, has
employed any investment banker, broker, finder or other intermediary or incurred
any liability for any brokerage fees, commissions or finder's fees in connection
with the transactions contemplated by this Agreement for or with respect to
which the Company or any Company Subsidiary is or might be liable prior to the
Effective Time, except that Parent has retained Xxxxxxx & Associates, as its
financial advisor.
Section 4.13 Compliance with Applicable Laws. Parent and the Parent
Subsidiaries are in substantial compliance with all laws, regulations and orders
of any Governmental Entity applicable to them, except where the failure to
comply would not have a Material Adverse Effect. Parent and each Parent
Subsidiary have obtained all licenses, permits, franchises or other governmental
authorizations necessary to the ownership of its properties or to
22
the conduct of its business, except where the failure to obtain such licenses,
permits, franchises or other governmental authorizations would not have a
Material Adverse Effect.
Section 4.14 Interested Shareholder. As of the date of this Agreement,
none of Parent, Merger Sub or any of their Affiliates is an "Interested
Shareholder" as such term is defined in Section 14A:10A-3 of the NJBCA.
Section 4.15 Ownership of Merger Sub; No Prior Activities. Merger Sub
was formed by Parent solely for the purposes of engaging in the transactions
contemplated hereby and has not engaged in any other activities. As of the date
hereof and the Effective Time, all of the capital stock of Merger Sub is and
will be owned directly by Parent.
Section 4.16 Opinion of Financial Advisor. Parent has received the
written opinion of Xxxxxxx & Associates to the effect that the Merger
Consideration is fair from a financial point of view to the shareholders of
Parent.
Section 4.17 No Other Representations. Except as specifically set
forth in this Article IV, Parent has not made, and the Company has not relied
upon, any representations or warranties, whether express or implied.
ARTICLE V
COVENANTS OF THE COMPANY
Section 5.01 Conduct of the Company. From the date hereof until the
Effective Time, the Company will not, and will cause the Company Subsidiaries
not to, take or agree to take any action that would (i) interfere with the
consummation of the transactions contemplated hereby or make such consummation
more difficult or materially delay the consummation of such transactions, (ii)
make any representation or warranty of the Company contained in this Agreement
untrue or incorrect as of the date when made or as of the Closing Date or (iii)
result in any of the conditions to Closing in Article VIII not being satisfied.
Except as contemplated by this Agreement or with the prior written consent of
Parent (which consent will not be unreasonably withheld or delayed), the Company
and the Company Subsidiaries will conduct their business in the ordinary course
consistent with past practice and will use reasonable efforts to preserve intact
their business organizations and relationships with third parties and to keep
available the services of their officers and employees. From the date hereof
until the Effective Time, the Company will not, and will not permit any of the
Company Subsidiaries to, do any of the following:
(a) adopt any amendment to its certificate of incorporation or
by-laws;
(b) except for issuances of Company Subsidiary Securities to the
Company or a wholly-owned Company Subsidiary, issue, reissue or sell, or
authorize the issuance, reissuance or sale of (i) additional shares of
capital stock of any class, or securities
23
convertible into capital stock of any class, or any rights, warrants or
options to acquire any convertible securities or capital stock, other than
(1) pursuant to the exercise of Options outstanding on the date hereof or
(2) upon the conversion of Class B Company Common Stock outstanding on the
date hereof or (ii) any other securities in respect of, in lieu of or in
substitution for, Company Common Stock outstanding on the date hereof;
(c) declare, set aside or pay any dividend or any other actual,
constructive or deemed distribution (whether in cash, securities or
property or any combination thereof) in respect of any class or series of
its capital stock or otherwise make any payments to shareholders of the
Company in their capacity as such other than between the Company and any
wholly-owned Company Subsidiary;
(d) split, combine, subdivide, reclassify or redeem, purchase or
otherwise acquire, or propose to redeem or purchase or otherwise acquire,
any shares of its capital stock, or any of its other securities;
(e) (i) increase the compensation or fringe benefits payable or to
become payable to directors, officers or employees except for (w) cash
bonuses to non-employee directors in an aggregate amount not to exceed
$250,000, (x) increases in salary, wages and benefits of officers or
employees of the Company or the Company Subsidiaries in the ordinary course
consistent with past practice, (y) increases in salary, wages and benefits
granted to officers and employees of the Company or the Company
Subsidiaries in conjunction with new hires, promotions or other changes in
job status , which increases are in the ordinary course consistent with
past practice or (z) increases in salary, wages and benefits to employees
of the Company or the Company Subsidiaries pursuant to collective
bargaining agreements entered into in the ordinary course of business; (ii)
pay any benefit not required by any existing plan or arrangement (including
the granting of stock options, stock appreciation rights, shares of
restricted stock or performance units), other than (x) the payment of cash
bonuses in timing and amount consistent with past practice and cash bonuses
in lieu of stock option grants and equity incentive awards in timing and
amount consistent with past practice, (y) the payment to five key executive
officers of the Company of amounts designed to reimburse them for the
incremental income taxes payable (as a result of the inability of any such
officer to obtain capital gain treatment) with respect to the conversion
into the right to receive the Merger Consideration of restricted shares
issued under the 1992 Management Equity Incentive Plan and shares of Class
A Company Common Stock issued upon exercise of Options pursuant to Section
1.14(a) and (z) the payment of approximately $14,000,000 to a "rabbi trust"
to be established for the exclusive purpose of making premium payments when
due on the "split-dollar" life insurance policies on the lives of Xxxxxxx
and Xxxxxx Xxx; (iii) grant any severance or termination pay to (except
pursuant to existing agreements, plans or policies), or enter into any
employment or severance agreement with, any director, officer or other
employee of the Company or any of the Company Subsidiaries; or (iv)
establish, adopt, enter into or amend any collective bargaining, bonus,
profit sharing, thrift, compensation, stock option, restricted stock,
pension, retirement, savings, welfare, deferred compensation, employment,
termination, severance or other employee
24
benefit plan, agreement, trust, fund, policy or arrangement for the benefit
or welfare of any director, officer or current or former employee (an
"Employee Benefit Arrangement"), except in each case to the extent required
by applicable law or regulation and except as currently is being negotiated
with the Communications Workers of America local in Los Angeles,
California;
(f) acquire, sell, lease, transfer, swap or dispose of any assets
(other than in the ordinary course of business consistent with past
practice) or securities or other interests which are material to the
Company and its Subsidiaries, taken as a whole, or enter into any
commitment to do any of the foregoing or enter into any material commitment
or transaction outside the ordinary course of business other than
transactions between any wholly-owned Company Subsidiary and the Company or
another wholly-owned Company Subsidiary other than the sale, effective as
of the Effective Time, of the shares of capital stock of Citizens Utilities
Company owned by the Company to Xxxxxxx Xxx or his designees at a price
equal to the fair market value (based on the closing price of such stock on
the date hereof) of such shares as of the date hereof as determined by the
Company Board;
(g) (i) incur, assume or prepay any long-term debt or incur or assume
any short-term debt, except that the Company and the Company Subsidiaries
may incur, assume or prepay debt in the ordinary course of business in the
ordinary course consistent with past practice or under existing lines of
credit; (ii) assume, guarantee, endorse or otherwise become liable or
responsible (whether directly, contingently or otherwise) for the
obligations of any other Person or Persons that individually or in the
aggregate are material; or (iii) make any loans, advances or capital
contributions to, or investments in, any other Person or Persons that
individually or in the aggregate are material except for loans, advances,
capital contributions or investments between any wholly-owned Subsidiary of
the Company and the Company or another wholly-owned Subsidiary of the
Company, except in each case as may be necessary or desirable in connection
with the financing of Century-TCI California, L.P.; or
(h) agree to take any of the foregoing actions.
Section 5.02 Other Transactions.
(a) From the date hereof until the termination of this Agreement, the
Company will not, and will not authorize or permit any of its Subsidiaries or
any of its or the Company Subsidiaries' directors, officers, employees, agents
or representatives, directly or indirectly, solicit, to initiate or knowingly
encourage any inquiries or the making of any proposal with respect to any
Acquisition Transaction or to provide information to or negotiate, explore or
otherwise engage in discussions with any Person (other than Parent, Merger Sub
or any of their directors, officers, employees, agents and representatives) with
respect to any Acquisition Transaction or to enter into any agreement,
arrangement or understanding requiring it to abandon, terminate or fail to
consummate the Merger. As of the date of this Agreement, the Company has
discontinued, and has caused the Company Subsidiaries and its and their
25
respective directors, officers, employees, agents and representatives to
discontinue, discussions or negotiations with all Persons or groups with whom
discussions or negotiations previously have been held concerning any proposal
with respect to an Acquisition Transaction. The Company promptly will notify
Parent if any proposal or offer is received by, or any information is requested
from, or any discussions or negotiations are sought to be initiated or continued
with, the Company in respect of an Acquisition Transaction.
(b) The Company Board will not (i) withdraw or modify, or propose to
withdraw or modify, in a manner adverse to Parent, the approval or
recommendation of the Company Board of this Agreement and the Merger or (ii)
approve or recommend, or propose to approve or recommend, any Acquisition
Transaction other than the Merger. Nothing contained in this Section 5.02(b),
however, will prohibit the Company Board from complying with Rule 14d-9 and Rule
14e-2 promulgated under the Exchange Act with respect to any proposal relating
to an Acquisition Transaction.
(c) "Acquisition Transaction" means any merger, consolidation or
other business combination, tender or exchange offer, recapitalization
transaction or other similar transaction involving the Company or any
Significant Subsidiary of the Company, acquisition of all or any material
portion of the assets or capital stock of the Company or the acquisition of all
or substantially all of the assets or capital stock of any Significant
Subsidiary of the Company. "Acquisition Transaction" does not include the sale
of shares of capital stock of Citizens Utilities Company.
Section 5.03 Affiliates. The Company, prior to the Effective Time,
will deliver to Parent a letter identifying all known persons who are, at the
time of the Company Shareholder Meeting, in the Company's reasonable judgment,
"affiliates" of the Company under Rule 145 of the Securities Act. The Company
will furnish such information and documents as Parent reasonably may request for
the purpose of reviewing such list. The Company will use its reasonable best
efforts to obtain a written agreement in customary form from each person who may
be so deemed as soon as practicable and, in any event, prior to the Effective
Time.
ARTICLE VI
COVENANTS OF PARENT, MERGER SUB AND THE SURVIVING
CORPORATION
Section 6.01 Indemnification; Directors' and Officers' Insurance.
(a) Parent and Merger Sub agree that all rights to indemnification
existing in favor of each Person (the "Indemnified Parties") who is at the
Effective Time or prior thereto has been an employee, agent, director or officer
of the Company and the Company Subsidiaries as provided in their respective
charters, by-laws or resolutions identified in the Company Disclosure Schedule,
in an agreement between an Indemnified Party and the Company or any of the
Company Subsidiaries (which agreement is identified in the Company Disclosure
Schedule) will
26
survive the Merger and will continue in full force and effect for a period of
not less than six years from the Effective Time. In the event any claim is
asserted or made within such six-year period, all rights to indemnification in
respect of any such claim will continue until final disposition thereof.
(b) Parent and the Surviving Corporation jointly and severally agree
to indemnify all Indemnified Parties to the fullest extent permitted by
applicable law with respect to all acts and omissions arising out of such
individuals' services as officers, directors, employees or agents of the Company
or any Company Subsidiary or as trustees or fiduciaries of any plan for the
benefit of employees, or otherwise on behalf of, the Company or any Company
Subsidiary, occurring at or prior to the Effective Time, including the
transactions contemplated by this Agreement. In the event any Indemnified Party
is or becomes involved in any capacity in any action, proceeding or
investigation in connection with any matter occurring at or prior to the
Effective Time, Parent will pay as incurred such Indemnified Party's legal and
other expenses (including the cost of any investigation and preparation)
incurred in connection therewith. Parent will pay all expenses, including
attorneys' fees, that may be incurred by any Indemnified Party in enforcing the
indemnity and other obligations provided for in this Section 6.01.
(c) Parent and the Surviving Corporation will cause to be maintained
in effect for not less than six years from the Effective Time directors' and
officers' liability insurance covering the directors and officers of the Company
similar in scope and coverage to the directors' and officers' liability
insurance maintained by Parent for its directors and officers.
(d) The provisions of this Section 6.01 are intended to be for the
benefit of, and shall be enforceable by, each Indemnified Party, his or her
heirs and his or her personal representatives and shall be binding on all
successors and assigns of Parent and the Surviving Corporation.
Section 6.02 Employee Benefit Arrangements.
(a) From and after the Effective Time, Parent will, and will cause
the Surviving Corporation to, honor in accordance with their respective terms
all Employee Benefit Arrangements to which the Company or any of the Company
Subsidiaries is a party.
(b) Parent agrees that, for a period of not less than one year after
the Effective Time, it shall, or shall cause the Surviving Corporation to,
provide Employee Benefit Arrangements for the benefit of the employees and
former employees of the Company and its Subsidiaries, that in the aggregate are
not materially less favorable than the Employee Benefit Arrangements in effect
immediately prior to the Effective Time that are applicable to such employees or
former employees, provided, however, that Parent, at its sole option, may
provide Employee Benefit Arrangements to the employees and former employees of
the Company and the Company Subsidiaries which, in the aggregate, are no less
favorable than those applicable to similarly situated employees of Parent.
Parent will take all actions required so that each employee of the Company or
any Company Subsidiary as of the Effective Time will receive credit for
eligibility and vesting purposes for his or her service with the Company or any
Company Subsidiary prior to the Effective Time under any Employee Benefit
Arrangements
27
established, maintained, continued or made available by Parent in which any such
employee is eligible to participate.
(c) Nothing in this Section 6.02 shall be construed to limit the
ability of Parent to terminate the employment of any employee or to review
Employee Benefit Arrangements from time to time and make such changes as it
deems appropriate, subject to the terms of such Employee Benefit Arrangements.
Section 6.03 Listing; Registration. Prior to the Effective Time,
Parent will use its best efforts to cause the Parent Common Stock to be issued
in the Merger to be approved for listing on the Nasdaq National Market, subject
only to notice of official issuance.
Section 6.04 Conduct of Parent. From the date hereof until the
Effective Time, Parent will not, and will cause the Parent Subsidiaries not to,
take or agree to take any action that would (i) interfere with the consummation
of the transactions contemplated hereby or make such consummation more difficult
or materially delay the consummation of such transactions, (ii) make any
representation or warranty of Parent or Merger Sub contained in this Agreement
untrue or incorrect as of the date when made or as of the Closing Date or (iii)
result in any of the conditions to Closing in Article VIII not being satisfied.
Section 6.05. Obligations of Merger Sub. Parent will take all action
necessary to cause Merger Sub to perform its obligations under this Agreement
and to consummate the Merger on the terms and conditions set forth in this
Agreement.
ARTICLE VII
COVENANTS OF PARENT, MERGER SUB AND THE COMPANY
Section 7.01 Reasonable Best Efforts. Subject to the terms and
conditions herein provided, each of the parties will use its reasonable best
efforts to take, or cause to be taken, all action, and to do, or cause to be
done and to assist and cooperate with the other parties in doing, as promptly as
practicable, all things necessary, appropriate or advisable under applicable
laws and regulations or otherwise to ensure that the conditions set forth in
Article VIII are satisfied and to consummate and make effective the transactions
contemplated by this Agreement. If at any time after the Effective Time any
further action is reasonably necessary or desirable to carry out the purposes of
this Agreement, including the execution of additional instruments, the proper
officers and directors of each party will take all such action.
Section 7.02 Registration Statement. Parent promptly will prepare and
file the Registration Statement with the SEC under the Securities Act, and will
use its reasonable best efforts to cause the Registration Statement to be
declared effective by the SEC as promptly as practicable. Parent promptly will
take any action required to be taken under foreign or state securities or Blue
Sky laws in connection with the issuance of Parent Common Stock in connection
with the Merger.
28
Section 7.03 Company Shareholder Meeting.
(a) Promptly upon the request of Parent but in no event prior to the
date the Registration Statement is declared effective, the Company will take all
action necessary in accordance with the NJBCA and its certificate of
incorporation and by-laws to call, give notice of and hold a meeting (the
"Company Shareholder Meeting") of its shareholders to consider and vote upon the
approval and adoption of this Agreement and the Merger and for such other
purposes as may be necessary or desirable.
(b) Promptly after the date hereof, Parent and the Company will
prepare a proxy statement pertaining to the Merger to be distributed to the
holders of the Company Common Stock, which will constitute the prospectus
included in the Registration Statement (the "Proxy Statement/Prospectus"). The
Company Board will recommend that the shareholders of the Company vote to
approve the Merger and adopt this Agreement and approve any other matters to be
submitted to shareholders in connection therewith, and the Company will include
such recommendation in the Proxy Statement/Prospectus.
(c) Parent and the Company promptly will notify each other of the
receipt of comments from the SEC and of any request by the SEC for amendments or
supplements to the Registration Statement or the Proxy Statement/Prospectus or
for additional information, and promptly will supply each other with copies of
all correspondence between the parties and the SEC with respect thereto. If, at
any time prior to the Company Shareholder Meeting, any event should occur
relating to or affecting the Company, Parent or Merger Sub, or to their
respective Subsidiaries, officers or directors, which event should be described
in an amendment or supplement to the Registration Statement or the Proxy
Statement/Prospectus, the parties promptly will inform each other and cooperate
in preparing, filing and having declared effective or clearing with the SEC and,
if required by applicable state securities laws, distributing to the Company's
shareholders such amendment or supplement.
Section 7.04 Consents. Each of the parties will use its reasonable
best efforts to obtain as promptly as practicable all consents (including from
any Franchising Authority and in connection with the change in control of the
holder of the Franchises of the Company and the Company Subsidiaries), waivers,
approvals, authorizations or permits of any Governmental Entity or any other
Person required in connection with, and waivers of any Violations that may be
caused by, the consummation of the transactions contemplated by this Agreement.
Section 7.05 Public Announcements. Neither Parent nor the Company will
issue any press release or make any other public announcement concerning this
Agreement, the Merger or the transactions contemplated hereby without the prior
consent of the other, except that either party may make such public disclosure
that it believes in good faith to be required by law (in which event such party
will notify the other party prior to making such disclosure).
Section 7.06 Notification of Certain Matters. Parent and the Company
promptly will notify the other of: (i) the occurrence or non-occurrence of any
fact or event that would be reasonably likely to cause any (x) representation or
warranty contained in this Agreement to be untrue or inaccurate in any material
respect at any time from the date hereof to the Effective
29
Time or (y) material covenant, condition or agreement contained in this
Agreement not to be complied with or satisfied in all material respects; and
(ii) any failure of the Company, Parent or Merger Sub to comply with or satisfy
in any material respect any covenant, condition or agreement contained in this
Agreement.
Section 7.07 Antitrust Matters.
(a) Parent and the Company promptly will complete all documents
required to be filed with the Federal Trade Commission and the Department of
Justice in order to comply with the HSR Act and, together with the Persons who
are required to join in such filings, will file the same with the appropriate
Governmental Entities. Parent and the Company promptly will furnish all
materials thereafter required by any of the Governmental Entities having
jurisdiction over such filings and will take all reasonable actions and file and
use all reasonable efforts to have declared effective or approved all documents
and notifications with any such Governmental Entities, as may be required under
the HSR Act for the consummation of the Merger.
(b) Parent will use its best efforts to resolve such objections, if
any, as may be asserted with respect to the transactions contemplated by this
Agreement under any antitrust, competition or trade regulatory laws, rules or
regulations of any domestic or foreign Governmental Entity ("Antitrust Laws").
If any suit is threatened or instituted challenging the Merger as violating any
Antitrust Law, Parent will take such action (including opposing by all
appropriate legal means any claim raised in any such suit and, if necessary,
agreeing to hold separate or to divest any of the businesses, product lines or
assets of Parent or any of its Affiliates controlled by it or of any of its
Subsidiaries or Affiliates) as may be required (i) by the applicable
Governmental Entity in order to resolve such objections as such Governmental
Entity may have to such transactions under such Antitrust Law or (ii) by any
domestic or foreign court or similar tribunal, in any suit brought by a private
party or governmental authority challenging the Merger as violating any
Antitrust Law, in order to avoid the entry of, or to effect the dissolution of,
any injunction, temporary restraining order or other order that has the effect
of preventing the consummation of the Merger. The entry by a court, in any suit
brought by a private party or Governmental Entity challenging the Merger as
violating any Antitrust Law, of an order or decree permitting the Merger but
requiring that any of the businesses or assets of Parent or any Parent
Subsidiary or Affiliates be divested or held separate by Parent, or that would
otherwise limit Parent's freedom of action with respect to, or its ability to
retain, the Company and the Company Subsidiaries or any portion thereof or any
of Parent's or its Subsidiaries' or Affiliates' other assets or businesses, will
not be deemed a failure to satisfy the conditions specified in Section 8.01(d).
(c) Each party promptly will inform the other of any material
communication from the Federal Trade Commission, the Department of Justice, the
FCC or any other domestic or foreign Governmental Entity regarding any of the
transactions contemplated by this Agreement. If any party or any Affiliate
thereof receives a request for additional information or documentary material
from any such government or authority with respect to the transactions
contemplated by this Agreement, such party will endeavor in good faith to make,
as soon as reasonably practicable and after consultation with the other party,
an appropriate response to
30
such request. Parent promptly will advise the Company in respect of any
understandings, undertakings or agreements which Parent proposes to make or
enter into with the Federal Trade Commission, the Department of Justice, the FCC
or any other domestic or foreign Governmental Entity in connection with the
transactions contemplated by this Agreement.
Section 7.08 Access to Information. From the date hereof until the
Effective Time, Parent and the Company will, and will cause each of their
Subsidiaries to: (i) give the other party and its counsel, financial advisors,
auditors and other authorized representatives reasonable access during normal
business hours to the offices, properties, books and records of such party and
its Subsidiaries as the other party reasonably may request, and furnish the
other party with such financial and operating data and other information as the
other party reasonably may request; and (ii) instruct such parties' employees,
counsel and financial advisors to cooperate with the other party in their
investigation of the business of such party and its Subsidiaries.
Section 7.09 Tax-free Reorganization. Prior to the Effective Time,
each party will use its best efforts to cause the Merger to qualify as a
reorganization within the meaning of Section 368 of the Code, and will not take
any action reasonably likely to cause the Merger not to qualify as such a
reorganization.
Section 7.10 Dissenting Shareholders. Notwithstanding anything in this
Agreement to the contrary, but only to the extent required by the NJBCA, shares
of the Company Common Stock that are issued and outstanding immediately prior to
the Effective Time and are held by holders of shares of Company Common Stock who
comply with all the provisions of the NJBCA concerning the right of holders of
shares of Company Common Stock to dissent from the Merger and require appraisal
of their shares ("Dissenting Shareholders") shall not be converted into the
right to receive the Merger Consideration but shall become the right to receive
such consideration as may be determined to be due such Dissenting Shareholder
pursuant to the laws of the State of New Jersey; provided, however, that (i) if
any Dissenting Shareholder shall subsequently withdraw his or her demand for
appraisal or fail to establish or perfect or otherwise lose his or her appraisal
rights as provided by applicable law, then such Dissenting Shareholder or
Shareholders, as the case may be, shall forfeit the right to appraisal of such
shares of Company Common Stock and such shares of Company Common Stock shall
thereupon be deemed to have been converted into the right to receive, as of the
Effective Time, the Merger Consideration, without interest. The Company shall
give Parent (A) prompt notice of any written demands for appraisal of shares of
Company Common Stock, withdrawals of demands for appraisal and any other related
instruments received by the Company, and (B) the opportunity to direct all
negotiations and proceedings with respect to any such demands for appraisal. The
Company will not, except with the prior written consent of Parent, voluntarily
make any payment with respect to any demands for appraisal or settle, offer or
otherwise negotiate to settle any demand.
Section 7.11 Registration Rights. From and after the Effective Time,
Parent agrees to grant the Class B Shareholders and their permitted assignees
and transferees registration rights pursuant to a Registration Rights Agreement
to be entered into promptly after the date hereof. Parent agrees that the
registration rights shall include two demand registration rights and unlimited
piggy-back rights subject to any existing registration rights agreements of
31
Parent at the expense of Parent with standard indemnification provisions. In
addition, the Registration Rights Agreement will provide for the Class B
Shareholders to be entitled to proportionate tag-along rights upon any sale or
other transfer for value of shares of Parent Common Stock by members of the
Rigas family.
Section 7.12 Board of Directors. Parent agrees that from and after the
Effective Time, for so long as the Class B Shareholders and their permitted
assignees and transferees own at least 10% of the outstanding Common Stock of
Parent, the Class B Shareholders and their permitted assignees and transferees
shall be entitled to nominate up to three members of Parent's board of
directors.
Section 7.13 Citizens Joint Venture. At the Effective Time, Parent
will purchase from Citizens Cable Company or its Affiliates the 50% interest
owned by Citizens Cable Company in Citizens-Century Cable Television Venture for
a purchase price to be mutually agreed upon by Parent, the Company and Citizens
Cable Company.
ARTICLE VIII
CONDITIONS TO THE MERGER
Section 8.01 Conditions to the Obligations of Each Party. The
respective obligations of the parties to consummate the Merger are subject to
the satisfaction, at or prior to the Effective Time, of each of the following
conditions:
(a) The shareholders of the Company shall have approved and adopted
this Agreement and the Merger pursuant to the requirements of the Company's
certificate of incorporation and by-laws and the NJBCA.
(b) The waiting period (and any extension thereof) applicable to the
Merger under the HSR Act shall have expired or been terminated.
(c) The Registration Statement shall have been declared effective in
accordance with the provisions of the Securities Act and no stop order with
respect thereto shall be in effect at the Effective Time.
(d) The consummation of the Merger shall not be restrained, enjoined
or prohibited by any order, judgment, decree, injunction or ruling of a court of
competent jurisdiction or any Governmental Entity entered after the parties have
used their reasonable best efforts to prevent such entry. There shall not have
been any statute, rule or regulation enacted, promulgated or deemed applicable
to the Merger by any Governmental Entity that prevents the consummation of the
Merger.
32
Section 8.02 Conditions Precedent to the Obligations of Parent and
Merger Sub. The obligations of Parent and Merger Sub to consummate the Merger
are subject to the satisfaction, at or prior to the Effective Time, of each of
the following further conditions:
(a) Each of the representations and warranties of the Company
contained in this Agreement shall have been true and correct in all respects
when made and on and as of the Closing Date as if made on and as of such date.
Parent shall have received a certificate to such effect of an executive officer
of the Company.
(b) The Company shall have performed and complied in all material
respects with all agreements and covenants required to be performed and complied
with by it under this Agreement on or prior to the Closing Date. Parent shall
have received a certificate to such effect of an executive officer of the
Company.
(c) All consents, waivers, approvals and authorizations required to
be obtained from any Governmental Authority prior to the consummation of the
transactions contemplated hereby shall have been obtained, except where the
failure to obtain any such consent, waiver, approval or authorization would not
have a Material Adverse Effect. For purposes of this Section 8.02(c), the
failure to obtain required consents, waivers, approvals or authorizations from
Franchising Authorities will not be deemed to cause a Material Adverse Effect
unless the Franchises (excluding Franchises covering the City of Fairfield,
California, Sonoma City, California and City of Rohnert Park, California) with
respect to which such consents, waivers, approvals or authorizations are not
obtained prior to the date referred to in Section 9.01(d) cover more than 50% of
the subscribers of the Company and the Company Subsidiaries, taken as a whole
(excluding Franchises covering the City of Fairfield, California, Sonoma City,
California and City of Rohnert Park, California).
(d) Parent shall have received an opinion of Xxxxxxxx Xxxxxxxxx
Professional Corporation, dated the Effective Time, to the effect that (i) the
Merger should be treated for federal income tax purposes as a reorganization
within the meaning of Section 368(a) of the Code and (ii) each of Parent, Merger
Sub and the Company should be a party to the reorganization within the meaning
of Section 368(b) of the Code. In rendering such opinion, Xxxxxxxx Ingersoll
Professional Corporation may receive and rely upon representations contained in
certificates of Parent and Merger Sub, the Company and others, in each case in
form and substance reasonably acceptable to Xxxxxxxx Xxxxxxxxx Professional
Corporation.
Section 8.03 Conditions Precedent to the Obligations of the Company.
The obligation of the Company to consummate the Merger is subject to the
satisfaction, at or prior to the Effective Time, of each of the following
further conditions:
(a) Each of the representations and warranties of Parent and Merger
Sub contained in this Agreement shall have been true and correct in all respects
when made and on and as of the Closing Date as if made on and as of such date.
The Company shall have received a certificate to such effect of an executive
officer of Parent.
33
(b) Each of Parent and Merger Sub shall have performed and complied
in all material respects with all agreements and covenants required to be
performed and complied with by it under this Agreement on or prior to the
Closing Date. The Company shall have received a certificate to such effect of an
executive officer of Parent.
(c) The shares of Parent Common Stock to be issued pursuant to the
Merger shall have been approved for listing on the Nasdaq National Market,
subject only to official notice of issuance.
(d) The Company shall have received an opinion of Xxxxxx, Xxxx &
Xxxxxxxx LLP, dated the Effective Time, to the effect that (i) the Merger should
be treated for federal income tax purposes as a reorganization within the
meaning of Section 368(a) of the Code and (ii) each of Parent, Merger Sub and
the Company should be a party to the reorganization within the meaning of
Section 368(b) of the Code. In rendering such opinion, Xxxxxx, Xxxx & Xxxxxxxx
LLP may receive and rely upon representations contained in certificates of
Parent and Merger Sub, the Company and others, in each case in form and
substance reasonably acceptable to Xxxxxx, Xxxx & Xxxxxxxx LLP.
ARTICLE IX
TERMINATION
Section 9.01 Termination. This Agreement may be terminated and the
Merger may be abandoned at any time prior to the Effective Time, notwithstanding
approval thereof by the shareholders of the Company:
(a) by mutual written agreement of the Company and Parent;
(b) by either the Company or Parent, if the Merger has not been
consummated by June 5, 2000; provided that the right to terminate this
Agreement pursuant to this Section 9.01(b) will not be available to any
party whose breach of any provision of this Agreement results in the
failure of the Merger to be consummated by such time;
(c) by either the Company or Parent, if there shall be any law or
regulation that makes consummation of the Merger illegal or otherwise
prohibited or if any judgment, injunction, order or decree enjoining the
parties from consummating the Merger is entered and such judgment,
injunction, order or decree shall become final and nonappealable;
(d) by Parent, upon a breach of any representation, warranty, covenant
or agreement of the Company, or if any representation or warranty of the
Company shall become untrue, in either case such that the conditions set
forth in Section 8.02 would be incapable of being satisfied by June 5,
2000; and
34
(e) by the Company, upon a breach of any representation, warranty,
covenant or agreement of Parent or Merger Sub, or if any representation or
warranty of Parent or Merger Sub shall become untrue, in either case such
that the conditions set forth in Section 8.03 would be incapable of being
satisfied by June 5, 2000.
The party desiring to terminate this Agreement pursuant to this
Section 9.01 (other than pursuant to Section 9.01(a)) shall give notice of such
termination to the other party.
Section 9.02 Effect of Termination. If this Agreement is terminated
pursuant to Section 9.01, this Agreement will become void and of no effect with
no liability on the part of any party hereto or its respective directors,
officers or shareholders, except that the agreements contained in Section 9.03
will survive the termination hereof. Nothing herein shall relieve any party from
liability for any breach of this Agreement.
Section 9.03 Fees and Expenses. Whether or not the Merger is
consummated, all costs and expenses incurred in connection with the Merger, this
Agreement and the transactions contemplated by this Agreement will be paid by
the party incurring such expenses. Notwithstanding anything in this Agreement to
the contrary, in the event that this Agreement is terminated for any reason
other than pursuant to Section 9.01 (a) or (e), then, (i) the Company shall
reimburse Parent, within five (5) business days after such termination, for
Parent's actual costs and expenses in connection with this Agreement and the
transactions contemplated thereby, in an amount not to exceed $10,000,000 and
(ii) if (y) the Company enters into an agreement or (z) there is consummated an
Acquisition Transaction with a third party, in each case within twenty-four (24)
months after the date of such termination, the Company shall pay to Parent,
within five (5) business days after such agreement is entered into or
transaction is consummated, the amount of one hundred million dollars
($100,000,000) as compensation for the role that Parent played in creating the
opportunity for such Acquisition Transaction by entering into this Agreement.
The rights of Parent and the payments to which Parent is entitled under this
Section 9.03 are not exclusive, and are in addition to any other rights or
remedies that Parent may have at law or in equity.
ARTICLE X
MISCELLANEOUS
Section 10.01 Notices. All notices, requests and other communications
to any party hereunder shall be in writing and shall be deemed to have been duly
given when delivered in person, by overnight courier or by facsimile to the
respective parties as follows:
35
If to Parent or Merger Sub, to:
Adelphia Communications Corporation
Main at Xxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
Attention: Xxxxxxx X. Xxxxx, Executive Vice President
with a copy to:
Xxxxxxxx Xxxxxxxxx Professional Corporation
Xxx Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxxx, XX 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
Attention: Xxxxx X. Xxxxxx
If to the Company, to:
Century Communications Corp.
00 Xxxxxx Xxxxxx
Xxx Xxxxxx, XX 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
Attention: Office of the President
with a copy to:
Xxxxxx, Xxxx & Xxxxxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxxxx
or such other address or facsimile number as such party may specify for the
purpose by written notice to the other parties hereto. Each such notice, request
or other communication will be effective: (i) if delivered in person, when such
delivery is made at the address specified in this Section 10.01; (ii) if
delivered by overnight courier, the next business day after such delivery is
sent to the address specified in this Section 10.01; or (iii) if delivered by
facsimile, when such facsimile is transmitted to the facsimile number specified
in this Section 10.01 and the appropriate confirmation is received.
36
Section 10.02 Survival of Representations, Warranties and Agreements.
The representations and warranties and agreements contained herein and in any
certificate or other writing delivered pursuant hereto will not survive beyond
the Effective Time. This Section 10.02 will not limit any covenant or agreement
of the parties which by its terms contemplates performance after the Effective
Time.
Section 10.03 Amendment. This Agreement may be amended by the Company
and Parent at any time before or after any approval of this Agreement by the
shareholders of the Company. After any such approval, no amendment may be made
that decreases the Merger Consideration or that adversely affects the rights of
the Company's shareholders hereunder without the approval of such shareholders.
This Agreement may not be amended except by an instrument in writing signed on
behalf of all the parties.
Section 10.04 Extension; Waiver. At any time prior to the Effective
Time, the parties may: (i) extend the time for the performance of any of the
obligations or other acts of any other party; (ii) waive any inaccuracies in the
representations and warranties contained herein by any other party or in any
document, certificate or writing delivered pursuant hereto by any other party;
or (iii) waive compliance with any of the agreements of any other party or with
any conditions to its own obligations. Any agreement on the part of any party to
any such extension or waiver will be valid only if set forth in an instrument in
writing signed on behalf of such party.
Section 10.05 Successors and Assigns. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns. No party may assign, delegate or
otherwise transfer any of its rights or obligations under this Agreement without
the prior written consent of the other parties.
Section 10.06 Governing Law. This Agreement will be construed in
accordance with and governed by the law of the State of Delaware applicable to
agreements entered into and to be performed wholly within such State.
Section 10.07 Jurisdiction. Each of the parties: (i) consents to
submit itself to the personal jurisdiction of any federal court located in the
State of Delaware or any Delaware state court in the event any dispute arises
out of this Agreement or the Merger; (ii) agrees that it will not attempt to
deny or defeat such personal jurisdiction by motion or other request for leave
from any such court; and (iii) agrees that it will not bring any action relating
to this Agreement or the Merger in any court other than a federal or state court
sitting in the State of Delaware.
Section 10.08 Counterparts; Effectiveness. This Agreement may be
signed in any number of counterparts, each of which shall be an original, with
the same effect as if the signatures thereto and hereto were upon the same
instrument. This Agreement will become effective when each party shall have
received counterparts hereof signed by all of the other parties.
Section 10.09 Entire Agreement; No Third-party Beneficiaries. This
Agreement and the other agreements referred to herein or executed
contemporaneously herewith constitute the entire agreement, and supersede all
prior agreements and understandings, both written and
37
oral, between the parties with respect to the subject matter of this Agreement.
No representation, inducement, promise, understanding, condition or warranty not
set forth herein has been made or relied upon by any party. This Agreement,
other than as provided in Sections 6.01 and 6.02, is not intended to confer upon
any Person other than the parties any rights or remedies.
Section 10.10 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 10.11 Severability. In the event that any one or more of the
provisions contained in this Agreement shall be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision of this Agreement.
Section 10.12 Definitions.
(a) When used in this Agreement, the following terms have the
following meanings:
"Affiliate" as applied to any Person, means any other Person directly
or indirectly controlling, controlled by, or under common control with, that
Person.
"Business Day" means any day other than a Saturday, Sunday or any
other day on which banks in the State of New York are authorized or obligated to
be closed.
"Code" means the Internal Revenue Code of 1986, as amended.
"Company Disclosure Schedule" means the Disclosure Schedules attached
hereto provided by the Company.
"Company Subsidiary" means any Subsidiary of the Company.
"Environmental Law" means any applicable federal, state or local law,
regulation, order, decree or judicial opinion or other agency requirement having
the force and effect of law and relating to noise, odor, Hazardous Substances or
the protection of public health or safety or any other environmental matter.
"ERISA Affiliate" means a trade or business affiliated within the
meaning of Sections 414(b), (c) or (m) of the Code.
"Exchange Agent" means a bank or trust company organized under the
laws of the United States or any state thereof with capital, surplus and
undivided profits of at least $500,000,000.
"Franchise" means a franchise within the meaning of
Section 602(9) of the Cable Communications Policy Act of 1984
(47 U.S.C. Section 522(9).
38
"Franchising Authority" has the meaning such term is given by
Section 602(10) of the Cable Communications Policy Act of 1984 (47 U.S.C.
Section 522(10).
"Hazardous Substance" means any toxic or hazardous substance that is
regulated by or under authority of any Environmental Law.
"GAAP" means generally accepted accounting principles in effect in the
United States of America as of the date of the applicable determination.
"Governmental Entity" means any government or subdivision thereof, or
any administrative, governmental or regulatory authority, agency, commission,
tribunal or body, domestic, foreign or supranational.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset.
"Material Adverse Effect", except as otherwise provided in Section
8.02(c), means (i) with respect to the Company, a material adverse effect on the
business, assets, operations or financial condition of the Company and its
Subsidiaries, taken as a whole, other than any such effect arising out of or
resulting from the transactions contemplated by this Agreement or general
economic, financial, competitive or market conditions or from changes in or
affecting the cable television or communications industries generally or (ii)
with respect to Parent or Merger Sub, a material adverse effect on the business,
assets, operations or financial condition of Parent, Merger Sub and their
Subsidiaries, taken as a whole, other than any such effect arising out of or
resulting from the transactions contemplated by this Agreement or general
economic, financial, competitive or market conditions or from changes in or
affecting the cable television or communications industries generally.
"Parent Common Stock" means the Class A common stock, par value $.01
per share, of Parent.
"Parent Disclosure Schedule" means the Disclosure Schedules attached
hereto provided by Parent
"Parent Subsidiary" means any Subsidiary of Parent.
"Person" means an individual, a corporation, a limited liability
company, a partnership, an association, a trust or any other entity or
organization, including a government or political subdivision or any agency or
instrumentality thereof.
"SEC" means the Securities and Exchange Commission.
"Subsidiary" of any Person means any other Person of which securities
or other ownership interests having ordinary voting power to elect a majority of
the board of directors or other Persons performing similar functions are
directly or indirectly owned or controlled by such Person.
39
"Tax" and "Taxes" means all federal, state, local, foreign or other
taxing authority net income, franchise, sales, use, ad valorem, property,
payroll, withholding, excise, severance, transfer, employment, alternative or
add-on minimum, stamp, occupation, premium, environmental or windfall profits
taxes, and other taxes, charges, fees, levies, imposts, customs, duties,
licenses or other assessments, together with any interest and any penalties,
additions to tax or additional amounts imposed by any taxing authority.
40
(b) Each of the following additional terms is defined in the Section
identified below:
41
Acquisition Transaction........................................................5.02(c)
Agreement.....................................................................Preamble
Antitrust Laws.................................................................7.07(b)
Class A Merger Consideration...................................................1.03(a)
Class B Merger Consideration...................................................1.03(b)
Class B Voting Agreement......................................................Recitals
Class A Company Common Stock...................................................1.02(a)
Class B Company Common Stock...................................................1.02(a)
Class B Shareholders..........................................................Recitals
Closing........................................................................1.01(b)
Closing Date...................................................................1.01(b)
Communications Act................................................................3.03
Company.......................................................................Preamble
Company Board.....................................................................3.02
Company Common Stock...........................................................1.02(a)
Company SEC Reports...............................................................3.07
Company Securities.............................................................3.05(c)
Company Shareholder Meeting....................................................7.03(a)
Company Subsidiary Securities..................................................3.06(b)
Effective Time.................................................................1.01(c)
Employee Benefit Arrangement...................................................5.01(e)
Employee Plan..................................................................3.13(a)
ERISA..........................................................................3.13(c)
Exchange Act......................................................................3.03
Exchange Agent....................................................................1.05
FCC ..............................................................................3.03
HSR Act...........................................................................3.03
Indemnified Parties............................................................6.01(a)
Interested Shareholder............................................................4.14
Letter of Transmittal.............................................................1.05
Merger.........................................................................1.01(a)
Merger Consideration...........................................................1.03(b)
Merger Sub....................................................................Preamble
NJBCA..........................................................................1.01(a)
Option.........................................................................1.14(a)
Option Plans...................................................................1.14(a)
Parent........................................................................Preamble
Parent Common Stock............................................................1.03(a)
Parent SEC Reports................................................................4.07
Parent Securities..............................................................4.05(c)
Parent Shareholders...........................................................Recitals
Parent Subsidiary Securities...................................................4.06(b)
Proxy Statement/Prospectus.....................................................7.03(b)
Registration Statement.........................................................4.09(a)
42
Rigas Class B Voting Agreement................................................Recitals
Securities Act....................................................................3.03
Significant Subsidiary of Parent..................................................4.04
Significant Subsidiary of the Company.............................................3.04
Surviving Corporation..........................................................1.01(a)
Violation.........................................................................3.04
43
IN WITNESS WHEREOF, each of the parties has caused this Agreement to
be duly executed by its respective authorized officer as of the day and year
first above written.
ADELPHIA COMMUNICATIONS
CORPORATION
By: /s/
-------------------------------------
Name:
Title:
ADELPHIA ACQUISITION SUBSIDIARY,
INC.
By: /s/
--------------------------------------
Name:
Title:
CENTURY COMMUNICATIONS CORP.
By: /s/
--------------------------------------
Name: Xxxxx Xxxxxxxxx
Title: Chief Financial Officer
44
EXHIBIT A
CLASS B VOTING AGREEMENT
THIS VOTING AGREEMENT (this "Voting Agreement") is dated as of March 5,
1999 among Adelphia Communications Corporation, a Delaware corporation
("Parent"), and the holders of Class B Common Stock of Century Communications
Corp., a New Jersey corporation (the "Company"), identified on Schedule 1 (the
"Class B Shareholders").
RECITALS
A. Parent, Adelphia Acquisition Subsidiary, Inc., a Delaware corporation
and a wholly-owned subsidiary of Parent ("Merger Sub"), and the Company have
entered into an Agreement and Plan of Merger, dated as of the date hereof (the
"Merger Agreement"), providing for the merger of Century with and into Merger
Sub, on the terms, and subject to the conditions, set forth therein.
B As an inducement to Parent to enter into the Merger Agreement and to
incur the obligations set forth therein, the Class B Shareholders have agreed to
enter into this Voting Agreement concurrently with the execution and delivery of
the Merger Agreement.
In consideration of the premises and the respective representations,
warranties, covenants, and agreements set forth herein, the Class B Shareholders
agree as follows.
Section 1. Definitions. Capitalized terms used but not defined herein will
have the meanings ascribed to them in the Merger Agreement.
Section 2. Representations and Warranties of the Class B Shareholders. Each
Class B Shareholder, severally and not jointly, represents and warrants to
Parent in respect to itself as follows:
(a) Authority. Such Class B Shareholder has all requisite power and
authority to enter into this Voting Agreement and to comply with its obligations
hereunder. This Voting Agreement has been duly executed and delivered by such
Class B Shareholder and constitutes the valid and binding obligation of such
Class B Shareholder, enforceable in accordance with its terms except as may be
limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent
transfer and other similar laws affecting creditors' rights generally and by
equitable principles of general applicability.
(b) Non-contravention. The execution and delivery of this Voting
Agreement do not, and compliance with such Class B Shareholder's obligations
hereunder will not, (i) contravene or conflict with or constitute a violation of
any provision of any law, regulation, judgment, injunction, order or decree
binding upon or applicable to such Class B Shareholder or the Certificate of
Incorporation or By-laws of the Company; (ii) result in a breach or violation of
or constitute a default (or an event that with the giving of notice or the lapse
of time or both
would constitute a default) under or require any consent, approval or
authorization under any provision of any agreement for borrowed money that is
secured by a Lien upon the Class B Company Common Stock owned by such Class B
Shareholder or any trust or similar agreement applicable to the Class B Company
Common Stock owned by such Class B Shareholder.
(c) Ownership. Such Class B Shareholder is the record and beneficial
owner of, and has valid title to, the shares of Class B Company Common Stock
(the "Class B Shares") and Options, if any, set forth opposite the name of such
Class B Shareholder on Schedule 1 free and clear of any Lien (other than any
Lien deemed to be created hereby and restrictions on transfer arising under
federal and state securities laws). Such Class B Shareholder has the sole right
to vote such Class B Shares and any shares of Class A Company Common Stock
issuable on exercise of such Options or on conversion of such Class B Shares.
(d) Merger Agreement. Each Class B Shareholder understands and
acknowledges that Parent and Merger Sub are entering into the Merger Agreement
in reliance upon the Class B Shareholder's execution and delivery of this
Agreement.
Section 3. Agreement to Vote. Until the earlier of (i) termination of the
Merger Agreement pursuant to Section 9.01 thereof or (ii) the Effective Time,
each Class B Shareholder, severally and not jointly, agrees that, at any meeting
of shareholders of the Company or at any adjournment thereof or in any other
circumstances upon which its vote, consent or approval (including written
consent) is sought, such Class B Shareholder will vote, or cause to be voted
(including by execution of a written consent), its Class B Shares: (i) in favor
of the Merger, the approval and adoption of the Merger Agreement and each of the
other transactions contemplated by the Merger Agreement and the calling of any
shareholder meeting to consider any of the foregoing; and (ii) against (A) any
other merger agreement or other merger, consolidation, combination, sale of
substantial assets (other than the shares of capital stock of Citizens Utilities
Company owned by the Company), reorganization, recapitalization, dissolution,
liquidation or winding up of or by the Company or any other Acquisition
Transaction or (B) any amendment to the Company's Certificate of Incorporation
or By-laws or other proposal, which amendment or proposal would impede,
frustrate, prevent or nullify the Merger or the Merger Agreement or any of the
transactions contemplated by the Merger Agreement or change the voting rights of
any class of capital stock of the Company.
Section 4. Covenants of the Class B Shareholders. Until the termination of
this Voting Agreement pursuant to Section 5, each Class B Shareholder, severally
and not jointly, agrees as follows:
(a) Except as provided in the immediately succeeding sentence or
pursuant to this Voting Agreement, such Class B Shareholder will not: (i) sell,
transfer, pledge, assign or otherwise encumber or dispose of (a "Transfer"), or
enter into any contract, option or other arrangement with respect to a Transfer
of, such Class B Shareholder's Class B Shares to any Person other than pursuant
to the Merger; (ii) convert such Class B Shares to Class A Common Stock; or
(iii) enter into any voting arrangement, whether by proxy, power of attorney,
voting agreement, voting trust or otherwise, with respect to the Class B Shares.
Each Class B
A-2
Shareholder, for estate planning or similar purposes, may, on notice to Parent,
Transfer Class B Shares to a transferee following the due execution and delivery
to Parent by such transferee of a counterpart to this Voting Agreement.
(b) Such Class B Shareholder will execute and deliver the written
agreement contemplated by Section 5.03 of the Merger Agreement.
(c) Such Class B Shareholder will not solicit, initiate or knowingly
encourage the submission to the Company of any proposal relating to an
Acquisition Transaction or participate in any negotiations regarding, or furnish
any information to any Person for the purposes of encouraging, a proposal
relating to an Acquisition Proposal in all cases other than the Merger.
(d) Such Class B Shareholder will not take any action that would in
any way restrict, limit or interfere with the performance of such Class B
Shareholder's obligations hereunder or the transactions contemplated hereby.
Section 5. Termination. This Agreement will terminate on the earlier of (i)
June 5, 2000, (ii) the Effective Time or (iii) termination of the Merger
Agreement pursuant to Section 9.01 thereof.
Section 6. Shareholder Capacity. No Class B Shareholder who is a director
or officer of the Company makes any agreement in this Voting Agreement in his or
her capacity as such director or officer. Each Class B Shareholder is entering
into this Voting Agreement solely in such Person's capacity as a shareholder of
the Company. The provisions of this Voting Agreement shall not apply to actions
taken or omitted to be taken by any such Person in his or her capacity as a
director or office of the Company.
Section 7. Enforcement. The parties agree that irreparable damage would
occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached. It
is accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement in a court of the United States. This
being in addition to any other remedy to which they are entitled at law or in
equity. In addition, each of the parties hereto waives any right to trial by
jury with respect to any claim or proceeding related to or arising out of this
Agreement or any of the transactions contemplated hereby.
EACH CLASS B SHAREHOLDER AGREES THAT, IN CONNECTION WITH ANY LEGAL SUIT OR
PROCEEDING ARISING WITH RESPECT TO THIS AGREEMENT, IT SHALL SUBMIT TO THE
JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE
AND AGREES TO VENUE IN SUCH COURTS. EACH CLASS B SHAREHOLDER HEREBY APPOINTS THE
SECRETARY OF THE COMPANY AS HIS OR HER AGENT FOR SERVICE OF PROCESS FOR PURPOSES
OF THE FOREGOING SENTENCE ONLY. EACH PARTY HERETO WAIVES ANY RIGHT TO JURY TRIAL
IN CONNECTION WITH ANY SUCH SUIT OR PROCEEDING.
A-3
Section 8. Miscellaneous.
(a) All notices, requests and other communications to any party
hereunder shall be in writing and shall be deemed to have been duly given when
delivered in person, by overnight courier or by facsimile to the respective
parties as follows:
If to Parent:
Adelphia Communications Corporation
Xxxx xx Xxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
Attention: Xxxxxxx X. Xxxxx, Executive Vice President
and
Xxxxx Xxxxxx, Esquire
with a copy to:
Xxxxxxxx Ingersoll Professional Corporation
Xxx Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxxx, XX 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
Attention: Xxxxx X. Xxxxxx
Xxxx X. Xxxxxxxxxxxx
If to any of the Class B Shareholders, to their respective addresses set
forth on Schedule A, with a copy to:
Xxxxxx, Xxxx & Xxxxxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxxxx
or such other address or facsimile number as such party may specify for the
purpose by written notice to the other parties. Each such notice, request or
other communication will be effective: (i) if delivered in person, when such
delivery is made at the address specified in this Section 8(a); (ii) if
delivered by reputable overnight courier, the next business day after such
notice, request or other communication is sent to the address specified in this
Section 8(a); or (iii) if delivered by facsimile, when such facsimile is
transmitted to the facsimile number specified in this Section 8(a) and the
appropriate confirmation is received.
A-4
(b) The representations and warranties and agreements contained herein and
in any certificate or other writing delivered pursuant hereto will not survive
beyond the termination of this Voting Agreement.
(c) This Agreement may not be amended except by an instrument in writing
signed on behalf of all the parties.
(d) This Agreement will be construed in accordance with and governed by the
law of the State of Delaware applicable to agreements entered into and to be
performed wholly within such State.
(e) This Agreement may be signed in any number of counterparts, each of
which shall be an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument. This Agreement will become effective
when each party shall have received counterparts hereof signed by all of the
other parties.
A-5
IN WITNESS WHEREOF, each of the parties has caused this Voting Agreement to
be duly executed as of the day and year first above written.
ADELPHIA COMMUNICATIONS
CORPORATION
By: /s/
---------------------------------
Name:
Title:
/s/
-------------------------------------
Xxxxxxx Xxx
THE XXXXXX XXX TRUST
By: /s/
---------------------------------
Xxxxxxx Xxx, Trustee
By: /s/
---------------------------------
Xxxxxx Xxx, Trustee
By: /s/
---------------------------------
Xxxxx X. Xxxxxxxxxx, Trustee
THE TRUST CREATED BY XXXXXX XXX
UNDER DATE OF DECEMBER 10, 1979
By: /s/
---------------------------------
Xxxxx X. Xxxxxxxxxx, Trustee
A-6
SCHEDULE 1
--------------------------------------------------------------------
CLASS B SHAREHOLDER CLASS B SHARES
--------------------------------------------------------------------
XXXXXXX XXX 18,971,095
--------------------------------------------------------------------
TRUST DATED DECEMBER 10, 1979 BY 2,813,365
XXXXXX XXX AS GRANTOR
--------------------------------------------------------------------
THE XXXXXX XXX TRUST, CREATED 20,537,599
UNDER DATE OF JULY 1973 BY
XXXXXXX XXX AS GRANTOR
--------------------------------------------------------------------
EXHIBIT B
RIGAS CLASS B VOTING AGREEMENT
THIS VOTING AGREEMENT (this "Voting Agreement") is dated as of March
5, 1999 among Century Communications Corp., a New Jersey corporation
("Century"), and certain of the holders of Class B Common Stock of Adelphia
Communications Corporation, a Delaware corporation (the "Company"), identified
on Schedule 1 (the "Class B Stockholders").
RECITALS
A. The Company, Adelphia Acquisition Subsidiary, Inc., a Delaware
corporation and a wholly-owned subsidiary of the Company ("Merger Sub"), and
Century have entered into an Agreement and Plan of Merger, dated as of the date
hereof (the "Merger Agreement"), providing for the merger of Century with and
into Merger Sub, on the terms, and subject to the conditions, set forth therein.
B As an inducement to Century to enter into the Merger Agreement and
to incur the obligations set forth therein, the Class B Stockholders have agreed
to enter into this Voting Agreement concurrently with the execution and delivery
of the Merger Agreement.
In consideration of the premises and the respective representations,
warranties, covenants, and agreements set forth herein, the Class B Stockholders
agree as follows.
Section 1. Definitions. Capitalized terms used but not defined herein
will have the meanings ascribed to them in the Merger Agreement.
Section 2. Representations and Warranties of the Class B Stockholders.
Each Class B Stockholder, severally and not jointly, represents and warrants to
Century in respect to himself as follows:
(a) Authority. Such Class B Stockholder has all requisite power and
authority to enter into this Voting Agreement and to comply with its obligations
hereunder. This Voting Agreement has been duly executed and delivered by such
Class B Stockholder and constitutes the valid and binding obligation of such
Class B Stockholder, enforceable in accordance with its terms except as may be
limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent
transfer and other similar laws affecting creditors' rights generally and by
equitable principles of general applicability.
(b) Non-contravention. The execution and delivery of this Voting
Agreement do not, and compliance with such Class B Stockholder's obligations
hereunder will not, (i) contravene or conflict with or constitute a violation of
any provision of any law, regulation, judgment, injunction, order or decree
binding upon or applicable to such Class B Stockholder or the Certificate of
Incorporation or By-laws of the Company; (ii) result in a breach or violation of
or constitute a default (or an event that with the giving of notice or the lapse
of time or both
would constitute a default) under or require any consent, approval or
authorization under any provision of any agreement for borrowed money that is
secured by a Lien upon the Class B Common Stock owned by such Class B
Stockholder or any trust or similar agreement applicable to the Class B Common
Stock owned by such Class B Stockholder.
(c) Ownership. Such Class B Stockholder is the record and beneficial
owner of, and has valid title to, the shares of Class B Common Stock (the "Class
B Shares") and Options, if any, set forth opposite the name of such Class B
Stockholder on Schedule 1 free and clear of any Lien (other than any Lien deemed
to be created hereby and restrictions arising under federal and state securities
laws and that certain Class B Stockholder Agreement, dated as of July 1, 1986,
by and among the Company, the Class B Stockholders and certain other holders of
the Class B Common Stock of the Company (the "Rigas Class B Stockholder
Agreement")). Except as set forth in the Rigas Class B Stockholder Agreement,
such Class B Stockholder has the sole right to vote such Class B Shares and any
shares of Class A Company Common Stock issuable on exercise of such Options or
on conversion of such Class B Shares. Nothing contained in the Rigas Class B
Stockholder Agreement will limit the ability of any Class B Stockholder from
complying with his obligations under this Agreement.
(d) Merger Agreement. Each Class B Stockholder understands and
acknowledges that Century is entering into the Merger Agreement in reliance upon
the Class B Stockholder's execution and delivery of this Agreement.
Section 3. Agreement to Vote. Until the earlier of (i) termination of
the Merger Agreement pursuant to Section 9.01 thereof or (ii) the Effective
Time, each Class B Stockholder, severally and not jointly, agrees that, at any
meeting of stockholders of the Company or at any adjournment thereof or in any
other circumstances upon which his vote, consent or approval (including written
consent) is sought, such Class B Stockholder will vote, or cause to be voted
(including by execution of a written consent), his Class B Shares: (i) in favor
of each item or proposal of the Company necessary to effect the Merger and each
of the other transactions contemplated by the Merger Agreement and the calling
of any stockholder meeting to consider any of the foregoing; and (ii) against
any amendment to the Company's Certificate of Incorporation or By-laws or other
proposal, which amendment or proposal would impede, frustrate, prevent or
nullify the Merger or the Merger Agreement or any of the transactions
contemplated by the Merger Agreement or change the voting rights of any class of
capital stock of the Company.
Section 4. Covenants of the Class B Stockholders. Until the
termination of this Voting Agreement pursuant to Section 5, each Class B
Stockholder, severally and not jointly, agrees as follows:
(a) Except as provided in the immediately succeeding sentence or
pursuant to this Voting Agreement, such Class B Stockholder will not: (i) sell,
transfer, pledge, assign or otherwise encumber or dispose of (a "Transfer"), or
enter into any contract, option or other arrangement with respect to a Transfer
of, such Class B Stockholder's Class B Shares to any Person; (ii) convert such
Class B Shares to Class A Common Stock; or (iii) enter into any voting
B-2
arrangement, whether by proxy, power of attorney, voting agreement, voting trust
or otherwise, with respect to the Class B Shares, other than any agreement that
amends or restates the Rigas Class B Stockholder Agreement and that is not
inconsistent with the obligations of such Class B Stockholder hereunder. Each
Class B Stockholder, for estate planning or similar purposes, may, on notice to
Century, Transfer Class B Shares to a transferee following the due execution and
delivery to Century by such transferee of a counterpart to this Voting
Agreement.
(b) Such Class B Stockholder will not take any action that would in
any way restrict, limit or interfere with the performance of such Class B
Stockholder's obligations hereunder or the transactions contemplated hereby.
Section 5. Termination. This Agreement will terminate on the earlier
of (i) June 5, 2000, (ii) the Effective Time or (iii) termination of the Merger
Agreement pursuant to Section 9.01 thereof.
Section 6. Stockholder Capacity. No Class B Stockholder who is a
director or officer of the Company makes any agreement in this Voting Agreement
in his capacity as such director or officer. Each Class B Stockholder is
entering into this Voting Agreement solely in such Person's capacity as a
stockholder of the Company. The provisions of this Voting Agreement shall not
apply to actions taken or omitted to be taken by any such Person in his capacity
as a director or office of the Company.
Section 7. Enforcement. The parties agree that irreparable damage
would occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached. It
is accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement in a court of the United States. This
being in addition to any other remedy to which they are entitled at law or in
equity. In addition, each of the parties hereto waives any right to trial by
jury with respect to any claim or proceeding related to or arising out of this
Agreement or any of the transactions contemplated hereby.
EACH CLASS B STOCKHOLDER AGREES THAT, IN CONNECTION WITH ANY LEGAL
SUIT OR PROCEEDING ARISING WITH RESPECT TO THIS AGREEMENT, IT SHALL SUBMIT TO
THE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF
DELAWARE AND AGREES TO VENUE IN SUCH COURTS. EACH CLASS B STOCKHOLDER HEREBY
APPOINTS THE SECRETARY OF THE COMPANY AS HIS OR HER AGENT FOR SERVICE OF PROCESS
FOR PURPOSES OF THE FOREGOING SENTENCE ONLY. EACH PARTY HERETO WAIVES ANY RIGHT
TO JURY TRIAL IN CONNECTION WITH ANY SUCH SUIT OR PROCEEDING.
B-3
Section 8. Miscellaneous.
(a) All notices, requests and other communications to any party
hereunder shall be in writing and shall be deemed to have been duly given when
delivered in person, by overnight courier or by facsimile to the respective
parties as follows:
If to Century:
Century Communications Corp.
00 Xxxxxx Xxxxxx
Xxx Xxxxxx, XX 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
Attention: Office of the President
with a copy to:
Xxxxxx, Xxxx & Xxxxxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxxxx
If to any of the Class B Stockholders, to their respective addresses
set forth on Schedule 1, with a copy to:
Xxxxxxxx Xxxxxxxxx Professional Corporation
Xxx Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxxx, XX 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
Attention: Xxxxx X. Xxxxxx
Xxxx X. Xxxxxxxxxxxx
or such other address or facsimile number as such party may specify for the
purpose by written notice to the other parties. Each such notice, request or
other communication will be effective: (i) if delivered in person, when such
delivery is made at the address specified in this Section 8(a); (ii) if
delivered by reputable overnight courier, the next business day after such
notice, request or other communication is sent to the address specified in this
Section 8(a); or (iii) if delivered by facsimile, when such facsimile is
transmitted to the facsimile number specified in this Section 8(a) and the
appropriate confirmation is received.
B-4
(b) The representations and warranties and agreements contained herein
and in any certificate or other writing delivered pursuant hereto will not
survive beyond the termination of this Voting Agreement.
(c) This Agreement may not be amended except by an instrument in
writing signed on behalf of Century and Class B Stockholders holding a majority
of the Class B Shares subject to this Agreement.
(d) This Agreement will be construed in accordance with and governed
by the law of the State of Delaware applicable to agreements entered into and to
be performed wholly within such State.
(e) This Agreement may be signed in any number of counterparts, each
of which shall be an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument. This Agreement will become effective
when each party shall have received counterparts hereof signed by all of the
other parties.
B-5
IN WITNESS WHEREOF, each of the parties has caused this Voting
Agreement to be duly executed as of the day and year first above written.
CENTURY COMMUNICATIONS CORP.
By: /s/
-----------------------------------
Name: Xxxxx Xxxxxxxxx
Title: Chief Financial Officer
/s/
-----------------------------------
Xxxx X. Xxxxx
/s/
-----------------------------------
Xxxxxxx X. Xxxxx
/s/
-----------------------------------
Xxxxxxx X. Xxxxx
/s/
-----------------------------------
Xxxxx X. Xxxxx
B-6
SCHEDULE 1
CLASS B STOCKHOLDER CLASS B SHARES OPTIONS
------------------- -------------- -------
XXXX X. XXXXX
Adelphia Communications Corporation 5,785,055 NONE.
Xxxx xx Xxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
----------------------------
----------------------------
XXXXXXX X. XXXXX
Adelphia Communications Corporation 1,818,021 NONE.
Xxxx xx Xxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
----------------------------
----------------------------
XXXXXXX X. XXXXX
Adelphia Communications Corporation 1,818,021 NONE.
Xxxx xx Xxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
----------------------------
----------------------------
XXXXX X. XXXXX
Adelphia Communications Corporation 1,053,685 NONE.
Xxxx xx Xxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
----------------------------
----------------------------
