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EXECUTION COPY
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AGREEMENT AND PLAN OF MERGER
AMONG
AT&T CORP.,
E-GROUP MERGER CORP.,
LIBERTY MEDIA CORPORATION
AND
VIDEO SERVICES CORPORATION
DATED AS OF JULY 25, 2000
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TABLE OF CONTENTS
Page
ARTICLE I. DEFINITIONS AND CONSTRUCTION...........................................................................1
1.1 Certain Definitions..................................................................................1
1.2 Additional Definitions...............................................................................6
1.3 Terms Generally......................................................................................9
ARTICLE II. THE MERGER AND RELATED MATTERS........................................................................9
2.1 The Merger...........................................................................................9
2.2 Closing.............................................................................................10
2.3 Conversion of Securities............................................................................11
2.4 Exchange of Certificates............................................................................13
2.5 Changes in Class A Liberty Media Group Stock........................................................16
2.6 Capital Contribution to Liberty Media...............................................................16
ARTICLE III. CERTAIN ACTIONS.....................................................................................17
3.1 Stockholder Meeting.................................................................................17
3.2 Registration Statement and Other Commission Filings.................................................17
3.3 Identification of Rule 145 Affiliates...............................................................18
3.4 Reasonable Efforts..................................................................................18
3.5 Company Stock Option and Other Plans................................................................21
3.6 Expenses............................................................................................21
ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF THE COMPANY........................................................22
4.1 Corporate Organization..............................................................................22
4.2 Subsidiaries........................................................................................22
4.3 Capitalization......................................................................................23
4.4 Corporate Proceedings, etc..........................................................................24
4.5 Consents and Approvals..............................................................................25
4.6 Absence of Defaults, Conflicts, etc.................................................................25
4.7 Reports.............................................................................................26
4.8 Absence of Certain Developments.....................................................................27
4.9 Compliance with Law.................................................................................27
4.10 Litigation..........................................................................................29
4.11 Material Contracts..................................................................................29
4.12 Absence of Undisclosed Liabilities..................................................................30
4.13 Labor Relations and Employment......................................................................30
4.14 Employee Benefit Plans..............................................................................31
4.15 FCC Matters.........................................................................................33
4.16 Real Property.......................................................................................34
4.17 Condition of Properties.............................................................................35
4.18 Environmental Matters...............................................................................35
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4.19 Intellectual Property...............................................................................37
4.20 Tax Matters.........................................................................................38
4.21 Insurance...........................................................................................39
4.22 Transactions with Related Parties...................................................................39
4.23 Interest in Competitors.............................................................................40
4.24 Brokerage...........................................................................................40
4.25 Disclosure..........................................................................................40
4.26 DGCL Section 203....................................................................................41
4.27 Company Action......................................................................................41
4.28 Fairness Opinion....................................................................................41
4.29 FIRPTA..............................................................................................41
4.30 No Investment Company...............................................................................42
4.31 Employment Agreements...............................................................................42
4.32 Negative Assurances.................................................................................42
4.33 Vote Required.......................................................................................42
4.34 No Excise Tax Obligations...........................................................................42
4.35 British Telecommunications..........................................................................42
ARTICLE V. REPRESENTATIONS AND WARRANTIES OF PARENT..............................................................43
5.1 Organization and Qualification......................................................................43
5.2 Authorization and Validity of Agreement.............................................................43
5.3 Capitalization of Parent............................................................................43
5.4 Ownership of Merger Sub; No Prior Activities; Assets of Merger Sub..................................44
5.5 Information Supplied................................................................................44
ARTICLE VI. REPRESENTATIONS AND WARRANTIES OF LIBERTY MEDIA......................................................45
6.1 Organization and Qualification......................................................................45
6.2 Authorization and Validity of Agreement.............................................................45
6.3 Ownership of Company Common Stock...................................................................45
6.4 Information Supplied................................................................................46
6.5 Liberty Media Group Information.....................................................................46
6.6 No Approvals or Notices Required; No Conflict with Instruments......................................47
6.7 Absence of Certain Changes or Events................................................................48
6.8 Brokers or Finders..................................................................................48
ARTICLE VII. ADDITIONAL COVENANTS AND AGREEMENTS.................................................................48
7.1 Access to Information Concerning Properties and Records.............................................48
7.2 Confidentiality.....................................................................................48
7.3 Public Announcements................................................................................50
7.4 Conduct of the Company's Business Pending the Effective Time........................................50
7.5 No Solicitation.....................................................................................53
7.6 Actions by Merger Sub...............................................................................55
7.7 Listing.............................................................................................55
7.8 Convertible Securities..............................................................................56
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7.9 Voting Agreement....................................................................................56
7.10 Indemnification of Directors and Officers; Insurance................................................56
7.11 Certificates as to Indebtedness.....................................................................58
7.12 Notification of Certain Matters.....................................................................58
7.13 Defense of Litigation...............................................................................58
7.14 Additional Financial Statements.....................................................................59
ARTICLE VIII. CONDITIONS PRECEDENT...............................................................................59
8.1 Conditions Precedent to the Obligations of Parent, Liberty Media, Merger Sub and the Company........59
8.2 Conditions Precedent to the Obligations of Parent and Merger Sub for the Benefit of Liberty Media...60
8.3 Conditions Precedent to the Obligations of Parent and Merger Sub for the Benefit of Parent..........62
8.4 Conditions Precedent to the Obligations of the Company..............................................65
ARTICLE IX. TERMINATION..........................................................................................66
9.1 Termination and Abandonment.........................................................................66
9.2 Termination Fee; Effects of Termination.............................................................67
ARTICLE X. MISCELLANEOUS.........................................................................................68
10.1 No Waiver or Survival of Representations and Warranties.............................................68
10.2 Notices.............................................................................................68
10.3 Entire Agreement....................................................................................69
10.4 Assignment; Binding Effect; Benefit.................................................................69
10.5 Amendment...........................................................................................70
10.6 Extension; Waiver...................................................................................70
10.7 Parent Transactions.................................................................................71
10.8 Headings............................................................................................71
10.9 Counterparts........................................................................................71
10.10 Applicable Law......................................................................................71
10.11 Enforcement.........................................................................................71
10.12 Company Disclosure Schedule.........................................................................71
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement") is made
as of this 25th day of July, 2000, by and among AT&T Corp., a New York
corporation ("Parent"), E-Group Merger Corp., a Delaware corporation ("Merger
Sub"), Liberty Media Corporation, a Delaware corporation ("Liberty Media"), and
Video Services Corporation, a Delaware corporation (the "Company").
WHEREAS, the parties are entering into this Agreement to
provide for the terms and conditions upon which the Company will be acquired by
Parent by means of a merger of Merger Sub, a direct wholly owned Subsidiary of
Parent, with and into the Company (the "Merger").
NOW, THEREFORE, in consideration of the premises and of the
mutual covenants, representations, warranties and agreements contained herein,
the parties hereby agree as follows:
ARTICLE I
DEFINITIONS AND CONSTRUCTION
1.1 Certain Definitions. As used in this Agreement, the following terms shall
have the following meanings unless the context otherwise requires:
An "Affiliate" of any Person shall mean any other Person
which, directly or indirectly, controls or is controlled by or is under common
control with such Person. A Person shall be deemed to "control," be "controlled
by" or be "under common control with" any other Person if such other Person
possesses, directly or indirectly, power to direct or cause the direction of the
management or policies of such Person whether through the ownership of voting
securities or partnership interests, by contract or otherwise. Notwithstanding
the foregoing, for purposes of this Agreement, neither Parent nor any of its
Affiliates shall be deemed to be an Affiliate of Liberty Media or any of its
Affiliates, and neither Liberty Media nor any entity that is a member of the
Liberty Media Group nor any of the Affiliates of any of the foregoing shall be
deemed to be an Affiliate of Parent or any of its Affiliates.
"Agreement" shall mean this Agreement and Plan of Merger,
including all Exhibits and Schedules hereto.
"Class A Liberty Media Group Stock" shall mean the Class A
Liberty Media Group Common Stock, par value $1.00 per share, of Parent.
"Class B Liberty Media Group Stock" shall mean the Class B
Liberty Media Group Common Stock, par value $1.00 per share, of Parent.
"Closing" shall mean the consummation of the transactions
contemplated by this Agreement.
"Closing Date" shall mean the date on which the Closing occurs
pursuant to Section 2.2.
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"Commission" shall mean the Securities and Exchange
Commission.
"Company Common Stock" shall mean the common stock, par value
$.01 per share, of the Company.
"Company Disclosure Schedule" shall mean the disclosure
schedule, dated as of the date of this Agreement, delivered by the Company to
each of Parent and Liberty Media on or prior to the date hereof.
"Company Stock Plans" shall mean (i) the Company's 1997 Long
Term Incentive Plan and (ii) the Company's 1999 Non-Employee Director Stock
Plan, as listed in Section 4.3(a) of the Company Disclosure Schedule.
"Company Transaction Documents" shall mean this Agreement and
all other agreements and instruments contemplated by this Agreement to which the
Company is a party or otherwise is a signatory.
"Contribution Agreement" shall mean the Amended and Restated
Contribution Agreement, dated January 14, 2000, by and among Liberty Media,
Liberty Media Management LLC, Liberty Media Group LLC, Liberty Ventures Group
LLC, AGI LLC (formerly The Associated Group, Inc.) and Liberty AGI, Inc.
"Covered Entity" shall have the meaning ascribed thereto in
the Parent Charter.
"DGCL" shall mean the General Corporation Law of the State of
Delaware.
"Effective Time" shall mean the time when the Merger of Merger
Sub with and into the Company becomes effective under the DGCL as provided in
Section 2.1(a).
"Eighth Tax Sharing Amendment" shall mean the Eighth Amendment
to Tax Sharing Agreement, by and among Parent, Liberty Media, for itself and
each member of the Liberty Media Group, Tele-Communications, Inc., Liberty
Ventures Group LLC, Liberty Media Group LLC, TCI Starz, Inc., TCI CT Holdings,
Inc. and each Covered Entity (as defined therein), dated as of the date hereof.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended, and the rules and regulations promulgated thereunder.
"GAAP" shall mean generally accepted accounting principles in
the United States as in effect from time to time.
"GECC Facility" means the Credit Agreement, dated as of June
30, 2000, among the Company and its Subsidiaries, and General Electric Capital
Corporation, Key Bank National Association and the other lenders thereunder.
"Governmental Consent" shall mean any consent, approval, order
or authorization of or other action by any Governmental Entity.
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"Governmental Entity" shall mean and include any court,
arbitrator, administrative or other governmental department, agency, commission,
authority or instrumentality, domestic or foreign.
"Governmental Filing" shall mean any registration,
qualification, declaration or filing with or any notice to any Governmental
Entity.
"Xxxx-Xxxxx Act" shall mean the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, and the rules and regulations thereunder.
"Indebtedness" shall mean, with respect to any Person, without
duplication (whether or not the recourse of the lender is to the whole of the
assets of such Person or only to a portion thereof), (i) every liability of such
Person (excluding intercompany accounts between the Company and any wholly owned
Subsidiary of the Company or between wholly owned Subsidiaries of the Company)
(A) for borrowed money, (B) evidenced by notes, bonds, debentures or other
similar instruments (whether or not negotiable), (C) for reimbursement of
amounts drawn under letters of credit, bankers' acceptances or similar
facilities issued for the account of such Person, (D) issued or assumed as the
deferred purchase price of property or services (excluding contingent payment
obligations and accounts payable) or (E) relating to a capitalized lease
obligation and all debt attributable to sale/leaseback transactions of such
Person; (ii) every liability of others of the kind described in the preceding
clause (i) which such Person has guaranteed or which is otherwise its legal
liability, in either case to the extent required pursuant to GAAP to be set
forth as a liability on a balance sheet of such Person.
"Inter-Group Agreement" shall mean the Inter-Group Agreement,
dated as of March 9, 1999, as amended and supplemented, among Parent, on the one
hand, and Liberty Media, Liberty Media Group LLC and each Covered Entity (as
defined therein), on the other hand.
"Inter-Group Supplement" shall mean the Seventh Supplement to
the Inter-Group Agreement between and among Parent, on the one hand, and Liberty
Media, Liberty Media Group LLC and each Covered Entity (as defined therein), on
the other hand, dated as of the date hereof.
"Law" shall mean any foreign or domestic law, statute, code,
ordinance, rule, regulation promulgated, or order, judgment, writ, stipulation,
award, injunction or decree promulgated or entered by a Governmental Entity.
"Liberty Media Affiliate," "Affiliate of Liberty Media" and
similar phrases shall mean Liberty Media, each member of the Liberty Media
Group, each Covered Entity and each Subsidiary of Liberty Media, any member of
the Liberty Media Group or a Covered Entity and, from and after the Effective
Time, the Surviving Entity.
"Liberty Media Group" shall mean the Liberty Media Group, as
defined in the Parent Charter and shall include Ranger Acquisition Corp.,
A-Group Merger Corp., B-Group Merger Corp., C-Group Merger Corp., D-Group Merger
Corp., Merger Sub and each of their respective Subsidiaries and successors.
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"Liberty Media Group Information" means the information
regarding the Liberty Media Group described in Section 6.5.
"Liberty Media Material Adverse Effect" shall mean (i) a
material adverse effect on the transactions contemplated hereby (including a
material adverse effect on the ability of Liberty Media to perform its
obligations hereunder) or (ii) a material adverse effect on the business, assets
or financial condition of Liberty Media and its Subsidiaries, taken as a whole.
"Lien" shall mean any security interest, mortgage, pledge,
hypothecation, charge, claim, option, right to acquire, adverse interest,
assignment, deposit arrangement, encumbrance, restriction, lien (statutory or
other), or preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever (including any conditional sale or
other title retention agreement, any financing lease involving substantially the
same economic effect as any of the foregoing, and the filing of any financing
statement under the Uniform Commercial Code or comparable law of any
jurisdiction).
"Material Adverse Effect" shall mean (i) a material adverse
effect on the transactions contemplated hereby (including a material adverse
effect on the ability of any party hereto to consummate such transactions or
perform its material obligations hereunder) or (ii) a material adverse effect on
the business, assets or financial condition of the Company and its Subsidiaries,
taken as a whole.
"Merger" shall have the meaning specified in the preamble
hereto.
"Merger Consideration" shall mean the Stock Consideration and
the Cash Consideration to which holders of shares of Company Common Stock are
entitled pursuant to Section 2.3(a)(i).
"NYSE" shall mean The New York Stock Exchange.
"Parent Adverse Effect" shall mean any of (i) an effect which
is adverse to, or burdensome on the business, assets, liabilities, condition
(financial or otherwise), results of operations, operations or prospects of any
business of Parent or its Subsidiaries being conducted on the date hereof (other
than, in each case, any such effect which is insignificant in nature or
consequence) or (ii) an adverse effect on the relationship between Parent or any
of its Subsidiaries and any federal or state Governmental Entity having
jurisdiction over any business of Parent or its Subsidiaries or the operations
or assets thereof (other than such an effect which is insignificant in nature or
consequence).
"Parent Charter" shall mean the Amended Certificate of
Incorporation of Parent.
"Parent Common Stock" shall mean the common stock, par value
$1.00 per share, of Parent.
"Parent/Liberty Media Commission Filings" means and includes
all reports, registration statements, definitive proxy statements and other
documents (in each case together with all amendments thereto) filed or to be
filed by Parent or Liberty Media with the Commission during the period from the
effectiveness of the acquisition by Parent of Tele-
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Communications, Inc., on March 9, 1999, through the Closing Date, to the extent
(and only to the extent) that such documents include any financial statements
of, or narrative description (including management's discussion and analysis)
specifically regarding, the Liberty Media Group.
"Parent Material Adverse Effect" shall mean (i) a material
adverse effect on the transactions contemplated hereby (including a material
adverse effect on the ability of Parent and Merger Sub to perform their
respective obligations hereunder) or (ii) an adverse effect on the business,
assets, liabilities, operations, results of operations, or financial condition
of Parent or any of its Subsidiaries that is material to the Parent and all of
its Subsidiaries taken as a whole.
"Parent Transaction" shall mean any merger, acquisition,
business combination, stock repurchase, stock issuance or other transaction or
business opportunity, even if such Parent Transaction would materially interfere
with the transactions contemplated by this Agreement.
"Permitted Encumbrances" shall mean the following Liens with
respect to the properties and assets of the Company: (a) Liens for taxes,
assessments or other governmental charges or levies not at the time delinquent
or thereafter payable without penalty or being contested in good faith by
appropriate proceedings and for which adequate reserves in accordance with GAAP
shall have been set aside on the Company's books (to the extent required
thereby); (b) Liens of carriers, warehousemen, mechanics, materialmen and
landlords incurred in the ordinary course of business for sums not overdue or
being contested in good faith by appropriate proceedings and for which adequate
reserves in accordance with GAAP shall have been set aside on the Company's
books (to the extent required thereby); (c) Liens incurred in the ordinary
course of business in connection with workmen's compensation, unemployment
insurance or other forms of governmental insurance or benefits, or to secure
performance of tenders, statutory obligations, leases and contracts (other than
for borrowed money) entered into in the ordinary course of business or to secure
obligations on surety or appeal bonds; (d) purchase money security interests or
Liens on property acquired or held by the Company in the ordinary course of
business to secure the purchase price of such property or to secure Indebtedness
incurred solely for the purpose of financing the acquisition of such property,
and (e) easements, restrictions and other defects of title which are not, in the
aggregate, material and which do not, individually or in the aggregate,
materially and adversely affect the Company's use or occupancy of the property
affected thereby.
"Person" shall mean an individual, partnership, corporation,
limited liability company, trust, unincorporated organization, association, or
joint venture or a government, agency, political subdivision, or instrumentality
thereof.
"Post-Merger Restructuring Transactions" shall mean each of
the transactions described in Exhibit 2.6 hereto.
"Restriction", with respect to any capital stock or other
security, shall mean any voting or other trust or agreement, option, warrant,
escrow arrangement, proxy, buy-sell agreement, power of attorney or other
Contract, any Law, rule, regulation, order, judgment or decree which,
conditionally or unconditionally, (i) grants to any Person the right to purchase
or otherwise acquire, or obligates any Person to purchase or sell or otherwise
acquire, dispose of or
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issue, or otherwise results or, whether upon the occurrence of any event or with
notice or lapse of time or both or otherwise, may result in any person
acquiring, (A) any of such capital stock or other security; (B) any of the
proceeds of, or any distributions paid or which are or may become payable with
respect to, any of such capital stock or other security; or (C) any interest in
such capital stock or other security or any such proceeds or distributions; (ii)
restricts or, whether upon the occurrence of any event or with notice or lapse
of time or both or otherwise, may restrict the transfer or voting of, or the
exercise of any rights or the enjoyment of any benefits arising by reason of
ownership of, any such capital stock or other security or any such proceeds or
distributions; or (iii) creates or, whether upon the occurrence of any event or
with notice or lapse of time or both or otherwise, may create a Lien or
purported Lien affecting such capital stock or other security, proceeds or
distributions.
"Securities Act" shall mean the Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder.
"Subsidiary" when used with respect to any Person, means any
corporation or other organization, whether incorporated or unincorporated, of
which such Person or any other Subsidiary of such Person is a general partner or
at least 50% of the securities or other interests having by their terms ordinary
voting power to elect at least 50% of the Board of Directors or others
performing similar functions with respect to such corporation or other
organization is directly or indirectly owned or controlled by such Person, by
any one or more of its Subsidiaries, or by such Person and one or more of its
Subsidiaries. Notwithstanding the foregoing, for purposes of this Agreement,
Parent's Subsidiaries shall be deemed not to include Liberty Media, any Liberty
Media Affiliate or any entity that is a member of the Liberty Media Group or any
of the Affiliates of any of the foregoing, whether or not they otherwise would
be Subsidiaries of Parent under the foregoing definition. Notwithstanding the
foregoing, for purposes of this Agreement, the Company's Subsidiaries shall
include all entities listed in Section 4.2 of the Company Disclosure Schedule.
"Surviving Entity" shall mean the Company as the surviving
entity in the Merger as provided in Section 2.1(a).
"Voting Agreement" shall mean the Agreement, dated as of the
date hereof, among Liberty Media and certain stockholders of the Company,
substantially in the form of Exhibit 7.9 attached hereto.
1.2 Additional Definitions. The following additional terms have the meaning
ascribed thereto in the Section indicated below next to such term:
Defined Term Section
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1993 Plan 2.3(b)(i)
1997 Plan 2.3(b)(i)
Alternative Consideration 3.4(c)
Alternative Merger 3.4(c)
breaching party 3.6
BT 4.35
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Carryover Option 2.3(b)
Cash Consideration 2.3(a)(i)
Cash Election 3.4(d)
Cash Merger 3.4(d)
Certificates 2.4(b)
Certificate of Merger 2.1(a)
Claim 7.1(a)
Code 4.14(a)
Company Preamble
Company Board 3.1
Company Bylaws 3.1
Company Charter 3.1
Company Plans 4.14(a)
Company Preferred Stock 4.3(a)
Company SEC Reports 4.7(a)
Company Stock Option 2.3(b)
Computer Software 4.20
Confidential Information 7.2
Consolidated Returns 4.20(a)
Contract Consent 4.6(a)
Contract Notice 4.6(a)
Contract 4.6(a)(1)
Convertible Securities 4.3(c)
disclosing party 7.2
Employment Agreements 4.31
Environmental and Health Laws 4.18
Environmental Permits 4.18
Equivalency Opinion 3.4(d)
ERISA 4.14(a)
ERISA Affiliate 4.14(a)
Excess Shares 2.4(f)
Exchange Agent 2.4(a)
Exchange Agent Agreement 2.4(a)
Exchange Pool 2.4(a)
Extraordinary Transaction 7.5(a)
Extraordinary Transaction Interest 7.5(a)
Fairness Opinion 4.28
FCC 4.5
FCC Licenses 4.15
Fractional Fund 2.4(f)
Hazardous Material 4.18
Indemnified Liabilities 7.10(a)
Indemnified Party 7.10(a)
Injunction 3.4(a)
Intellectual Property 4.19
Interim SEC Reports 4.7(a)
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IRS 4.20(a)
Xxxxxx Agreement 2.3(b)(i)
Lazard Freres 4.24
Leased Real Property 4.16(b)
Liberty Event 3.4(c)
Liberty Interest 3.4(c)
Liberty Media Preamble
Liberty Media Disclosure Schedule Article VI
Licenses 4.9(c)
Local Approvals 4.5(iii)
Material Contracts 4.11
Merger Preamble
Merger Proposal 3.1
Merger Sub Preamble
Multiemployer Plan 4.14(b)
New Parent 3.4(c)
non-breaching party 3.6
Organizational Documents 4.1(a)
Owned Real Property 4.16(a)
Parent Preamble
Parent Preferred Stock 5.3
PCB 4.18(a)(iv)
Proxy Statement 3.2(a)
receiving party 7.2
Registration Statement 3.2(a)
Remedial Action 4.18
Representatives 7.2
Rule 145 Agreement 3.3
Special Meeting 3.1
Stock Consideration 2.3(a)(i)
Stock Exchange Ratio 2.3(a)(i)
Subsequent Determination 7.5(c)
Superior Proposal 7.5(c)
tax 4.20(a)
tax return 4.20(a)
Termination Fee 9.2
Violation 4.6(a)
Voting Debt 4.3(a)
1.3 Terms Generally. The definitions in Sections 1.1 and 1.2 shall apply equally
to both the singular and plural forms of the terms defined. Whenever the context
may require, any pronoun shall include the corresponding masculine, feminine and
neuter forms. The words "include", "includes" and "including" shall be deemed to
be followed by the phrase "without limitation." The words "herein," "hereof" and
"hereunder" and words of similar import refer to this Agreement (including the
Exhibits and Schedules) in its entirety and not to any part hereof unless the
context shall otherwise require. As used herein, the term "to the Company's
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knowledge" or any similar term relating to the knowledge of the Company means
the actual knowledge of any of the following officers and employees of the
Company: Xxxxx X. Xxxxxxxxxx, Xxxxxxx X. Xxxxxxxxxx and Xxxxxx X. Xxxxxxxx, in
each case without investigation or inquiry by such officers and employees (other
than any such investigation or inquiry in the ordinary course of their duties to
the Company), unless the context otherwise requires. All references herein to
Articles, Sections, Exhibits and Schedules shall be deemed references to
Articles and Sections of, and Exhibits and Schedules to, this Agreement unless
the context shall otherwise require. Unless the context shall otherwise require,
any references to any agreement or other instrument or statute or regulation are
to it as amended and supplemented from time to time (and, in the case of a
statute or regulation, to any successor provisions). Any reference in this
Agreement to a "day" or number of "days" (without the explicit qualification of
"business") shall be interpreted as a reference to a calendar day or number of
calendar days. If any action or notice is to be taken or given on or by a
particular calendar day, and such calendar day is not a business day, then such
action or notice shall be deferred until, or may be taken or given on, the next
business day. As applied to Parent and its Subsidiaries, the phrases "as soon as
reasonably practicable," "as promptly as practicable" and similar phrases shall
mean "reasonably promptly under the circumstances, in light of the other burdens
on the time and attention of the directors, officers, employees and agents of
Parent and the relative benefits to Parent of this Agreement and such other
burdens."
ARTICLE II
THE MERGER AND RELATED MATTERS
2.1 The Merger.
(a) Merger; Effective Time. At the Effective Time and subject to and
upon the terms and conditions of this Agreement, Merger Sub shall, and Parent
shall cause Merger Sub to, merge with and into the Company in accordance with
the provisions of the DGCL, the separate corporate existence of Merger Sub shall
cease and the Company shall continue as the Surviving Entity. The Effective Time
shall occur upon the filing with the Secretary of State of the State of Delaware
of a Certificate of Merger (the "Certificate of Merger") substantially in the
form of Exhibit 2.1(a) and executed in accordance with the applicable provisions
of the DGCL, or at such later time as may be agreed to by Parent, Liberty Media
and the Company and specified in the Certificate of Merger. Provided that this
Agreement has not been terminated pursuant to Article IX, the parties will cause
the Certificate of Merger to be filed concurrently with or immediately following
the Closing.
(b) Effects of the Merger. The Merger shall have the effect set forth
in Section 259 of the DGCL. Without limiting the generality of the foregoing,
and subject thereto, at the Effective Time, all the properties, rights,
privileges, powers and franchises of the Company, and Merger Sub shall vest in
the Surviving Entity, and all debts, liabilities and duties of the Company and
Merger Sub shall become the debts, liabilities and duties of the Surviving
Entity. If, at any time after the Effective Time, the Surviving Entity considers
or is advised that any deeds, bills of sale, assignments, assurances or any
other actions or things are necessary or desirable to vest, perfect or confirm
of record or otherwise in the Surviving Entity its right, title or interest in,
to or under any of the rights, properties, or assets of either the Company or
Merger Sub, or otherwise to carry out the intent and purposes of this Agreement,
the officers and directors of the Surviving
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Entity will be authorized to execute and deliver, in the name and on behalf of
each of the Company and Merger Sub, all such deeds, bills of sale, assignments
and assurances and to take and do, in the name and on behalf of each of the
Company and Merger Sub, all such other actions and things as the Board of
Directors of the Surviving Entity may determine to be necessary or desirable to
vest, perfect or confirm any and all right, title and interest in, to and under
such rights, properties or assets in the Surviving Entity or otherwise to carry
out the intent and purposes of this Agreement.
(c) Certificate of Incorporation and Bylaws of Surviving Entity. At the
Effective Time, the certificate of incorporation of the Company, as in effect
immediately prior to the Effective Time, shall be the certificate of
incorporation of the Surviving Entity until thereafter amended as provided by
law. At the Effective Time, the bylaws of Merger Sub, shall be the bylaws of the
Surviving Entity until thereafter amended as provided by law.
(d) Directors and Officers of Surviving Entity. At the Effective Time,
the directors of Merger Sub immediately prior to the Effective Time shall be the
directors of the Surviving Entity and all such directors will hold office from
the Effective Time until their respective successors are duly elected or
appointed and qualify in the manner provided in the Certificate of Incorporation
and Bylaws of the Surviving Entity, or as otherwise provided by applicable law.
At the Effective Time, the officers of the Company immediately prior to the
Effective Time shall be the officers of the Surviving Entity and all such
officers will hold office until their respective successors are duly appointed
and qualify in the manner provided in the Bylaws of the Surviving Entity, or as
otherwise provided by applicable law.
2.2 Closing.
(a) Closing. The Closing shall take place (i) at 10:00 a.m. (New York
time) at the offices of Xxxxx Xxxxx L.L.P., 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, on the first business day following the date on which the last of
the conditions set forth in Article VIII (other than the filing of the
Certificate of Merger and other than any such conditions which by their terms
are not capable of being satisfied until the Closing Date) is satisfied or, to
the extent permissible, waived, or (ii) on such other date and at such other
time or place as is mutually agreed by the parties hereto.
(b) Obligations of the Company. In addition to the documents required
by Article VIII, the Company shall deliver the following documents at the
Closing:
(i) a long form certificate of good standing from the State of
Delaware dated as of a date not more than two business days prior to the Closing
Date and certifying that the Company is duly qualified and in good standing as
of the date of such certificate;
(ii) resolutions duly adopted by the Company Board prior to
the effectiveness of the resignations described in (iii) below and continuing in
effect at the Closing (as certified by the Secretary of the Company) nominating
those individuals serving as the directors of Merger Sub on the Closing Date to
serve on the Company Board;
(iii) written resignations from each of the directors of the
Company, effective immediately prior to the Effective Time; and
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(iv) the executed Certificate of Merger substantially in the
form of Exhibit 2.1(a).
2.3 Conversion of Securities.
(a) Conversion of Company Securities. At the Effective Time, by virtue
of the Merger and without any action on the part of Parent, Merger Sub, Liberty
Media, the Company or the holders of any of their securities:
(i) Each share of Company Common Stock outstanding immediately
prior to the Effective Time (other than such shares to be canceled in accordance
with Section 2.3(a)(iii) and subject to Sections 2.4(f) and 2.4(j)) shall be
converted into and represent the right to receive, and shall be exchangeable for
(i) 0.104 of a share (the "Stock Exchange Ratio") of Class A Liberty Media Group
Stock (the "Stock Consideration") and (ii) $2.75 in cash (the "Cash
Consideration").
(ii) All shares of Class A Liberty Media Group Stock issued
pursuant to this Section 2.3(a) will be validly issued, fully paid and
non-assessable. All shares of Company Common Stock outstanding immediately prior
to the Effective Time shall no longer be outstanding and shall automatically be
canceled and retired, and, subject to Section 2.4(j), each holder of a
certificate representing any such shares shall cease to have any rights with
respect thereto, except the right to receive the Merger Consideration pursuant
to this Section 2.3(a), including any cash in lieu of a fractional share payable
pursuant to Section 2.4(f) (and any dividends or other distributions payable
pursuant to Section 2.4(g)), with respect thereto upon the surrender of such
certificate in accordance with Section 2.4, without interest.
(iii) Each share of Company Common Stock that immediately
prior to the Effective Time is held by the Company as a treasury share shall be
canceled and retired without payment of any consideration therefor and without
any conversion thereof into the Merger Consideration.
(b) Treatment of Company Stock Options.
The Company shall take all actions necessary (including those
actions contemplated by Section 3.5 hereof) under the Company Stock Plans and
all agreements pursuant to which Company Stock Options were issued to effect the
transactions contemplated by this Section 2.3(b), to provide that such Company
Stock Options may be exercised pursuant to a "cashless" option exercise
procedure mutually acceptable to the Company and Liberty Media and to comply
with the covenant set forth in Section 7.4(j). At the Effective Time, all
outstanding options to purchase shares of Company Common Stock under a Company
Stock Plan or any other contract, all of which are listed in Section 2.3(b)of
the Company Disclosure Schedule ("Company Stock Options"), whether or not then
immediately exercisable or "in the money," shall, without any further action on
the part of any holder thereof, be accelerated and become exercisable
immediately prior to the Effective Time. At the Effective Time, each Company
Stock Option which remains unexercised (a "Carryover Option") shall be treated
as follows:
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(i) Each Carryover Option granted pursuant to the
International Post Limited 1993 Long Term Incentive Plan (the "1993 Plan"), the
Video Services Corporation 1997 Long Term Incentive Plan (the "1997 Plan") and
the Stock Option Agreement, dated as of February 15, 1994, between International
Post Limited (formerly International Post Group, Inc.), a Delaware corporation,
and Xxxxxxx X. Xxxxxx (the "Xxxxxx Agreement") shall be deemed, following the
Effective Time, to constitute an option to acquire that number of shares of
Class A Liberty Media Group Stock equal to (x) the number of shares of Company
Common Stock for which such Carryover Option was exercisable immediately prior
to the Effective Time multiplied by (y) 0.208. The per share exercise price of
each such Carryover Option shall be equal to the quotient obtained by dividing
(A) the product of (1) the per share exercise price of such Carryover Option
immediately prior to the Effective Time multiplied by (2) the number of shares
of Company Common Stock subject to such Carryover Option by (B) the number of
shares of Class A Liberty Media Group Stock subject to such Carryover Option
immediately following the Effective Time.
(ii) All Carryover Options, except for Carryover Options
granted pursuant to the 1993 Plan or the Xxxxxx Agreement, shall terminate
immediately following the Effective Time with no consideration being paid
therefor, and shall thereafter no longer be exercisable for securities or other
assets or properties of the Company, the Surviving Entity Parent, Liberty Media
or any other Person.
All other terms and conditions of the Carryover Options shall
remain in effect, except as otherwise expressly provided herein. Promptly
following the execution of this Agreement, Liberty Media and the Company shall
agree upon the terms of a notice to be delivered to each holder of Company Stock
Options describing the treatment of Carryover Options as set forth above and
soliciting their consent to such treatment. The Company will use its reasonable
best efforts to obtain the consent of each holder of Company Stock Options to
such treatment prior to the Closing. Liberty Media represents and warrants that
all shares of Class A Liberty Media Group Stock issued upon the exercise of any
Carryover Option will be validly issued, fully paid and non-assessable. Parent
and Liberty Media shall use commercially reasonable efforts to cause the
issuance of shares of Class A Liberty Media Group Stock issuable upon exercise
of any Carryover Options granted pursuant to the 1993 Plan to have been
registered, at or as promptly as reasonably practicable following the Effective
Time, pursuant to an effective registration statement on Form S-8 (or other
comparable form) under the Securities Act, and Parent and Liberty Media shall
use commercially reasonable efforts to maintain the effectiveness of such
registration statement thereafter for so long as any Carryover Options remain
exercisable.
(c) Conversion of Merger Sub Stock. At the Effective Time, by virtue of
the Merger and without any action on the part of Parent, Merger Sub, Liberty
Media, the Company or the holders of any of their securities, each share of
capital stock of Merger Sub outstanding immediately prior to the Effective Time
shall be converted into one share of the common stock, par value $.01 per share,
of the Surviving Entity.
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2.4 Exchange of Certificates.
(a) Appointment of Exchange Agent; Exchange Pool. On or before the
Closing Date, Parent and the Company shall enter into an agreement (the
"Exchange Agent Agreement") with Boston Equiserve Trust Company, N.A. or, at
Parent's option, another exchange agent selected by Parent and reasonably
acceptable to the Company (the "Exchange Agent"), authorizing such Person to act
as exchange agent hereunder. At the Effective Time, Liberty Media shall deposit
with the Exchange Agent, for the benefit of those Persons who immediately prior
to the Effective Time were the holders of Company Common Stock, cash in an
amount necessary to pay the Cash Consideration pursuant to Section 2.3(a).
Promptly following the Effective Time, Parent shall make available to the
Exchange Agent, for the benefit of those Persons who immediately prior to the
Effective Time were the holders of Company Common Stock, certificates
representing a sufficient number of shares of Class A Liberty Media Group Common
Stock required to effect the delivery of the Stock Consideration pursuant to
Section 2.3(a) (the cash and the certificates representing Class A Liberty Media
Group Common Stock delivered to the Exchange Agent pursuant to this Section
2.4(a) and comprising the Merger Consideration being hereinafter referred to as
the "Exchange Pool"). The Exchange Agent shall invest any cash included in the
Exchange Pool in one or more bank accounts or in high-quality, short-term
investments, as directed by Liberty Media, on a daily basis. Any interest and
other income resulting from such investments will be paid to Liberty Media. The
Exchange Pool shall not be used for any purpose except as provided in this
Agreement.
(b) Letter of Transmittal. As soon as reasonably practicable after the
Effective Time, the Exchange Agent shall mail to each holder of record of a
certificate or certificates which immediately prior to the Effective Time
represented issued and outstanding shares of Company Common Stock (the
"Certificates") whose shares were converted into the right to receive the Merger
Consideration: (i) a notice of the effectiveness of the Merger and (ii) a letter
of transmittal (which shall state that delivery shall be effected, and risk of
loss and title to the Certificates shall pass, only upon delivery of the
Certificates to the Exchange Agent) with instructions for use in effecting the
surrender and exchange of the Certificates. Such notice, letter of transmittal
and instructions shall contain such provisions and be in such form as Parent,
Liberty Media and the Company reasonably specify.
(c) Exchange Procedure. Promptly following the surrender, in accordance
with such instructions, of a Certificate to the Exchange Agent (or such other
agent or agents as may be appointed by the Exchange Agent or Parent pursuant to
the Exchange Agent Agreement), together with such letter of transmittal (duly
executed) and any other documents required by such instructions or letter of
transmittal, the Exchange Agent shall, subject to Section 2.4(d), cause to be
distributed to the Person in whose name such Certificate shall have been issued
(i) a certificate registered in the name of such Person representing the number
of whole shares of Class A Liberty Media Group Stock constituting the Stock
Consideration issuable with respect to the shares of Company Common Stock
previously represented by the surrendered Certificate, (ii) payment by check of
the Cash Consideration payable with respect to the shares of Company Common
Stock previously represented by the surrendered Certificate, and (iii) and
payment made by check of any cash payable in lieu of fractional shares of Class
A Liberty Media Group Stock pursuant to Section 2.4(f). Each Certificate so
surrendered shall be canceled. No interest
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will be paid to holders of Certificates with respect to any cash payable to such
holders pursuant to the provisions of this Article II.
(d) Unregistered Transfers of Company Common Stock. In the event of a
transfer of ownership of Company Common Stock which is not registered in the
transfer records of the Company, certificates representing the Stock
Consideration may be issued to, and the Cash Consideration and any cash in lieu
of fractional shares of Class A Liberty Media Group Stock may be delivered to,
the transferee if the Certificate representing such Company Common Stock
surrendered to the Exchange Agent in accordance with Section 2.4(c) is properly
endorsed for transfer or is accompanied by appropriate and properly endorsed
stock powers and is otherwise in proper form to effect such transfer, if the
Person requesting such transfer pays to the Exchange Agent any transfer or other
taxes payable by reason of such transfer or establishes to the satisfaction of
the Exchange Agent that such taxes have been paid or are not required to be paid
and if such Person establishes to the satisfaction of Parent that such transfer
would not violate applicable Federal or state securities laws.
(e) Lost, Stolen or Destroyed Certificates. Subject to the DGCL, if any
Certificate shall have 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 satisfactory to Parent and complying with any other
reasonable requirements imposed by Parent, the Exchange Agent will cause to be
delivered to such Person in respect of such lost, stolen or destroyed
Certificate the Merger Consideration (including any cash in lieu of fractional
shares of Class A Liberty Media Group Common Stock to which such Person is
entitled pursuant to Section 2.4(f)) in respect thereof as determined in
accordance with this Article II. Parent may, in its discretion, require the
owner of such lost, stolen or destroyed Certificate to give Parent a bond in
such reasonable sum as it may direct as indemnity against any claim that may be
made against Parent or the Surviving Entity with respect to the Certificate
alleged to have been lost, stolen or destroyed.
(f) No Fractional Shares. No fractional shares of Class A Liberty Media
Group Stock shall be issued in the Merger. In lieu of any such fractional
shares, each holder of shares of Company Common Stock who would otherwise have
been entitled to a fraction of a share of Class A Liberty Media Group Stock upon
surrender of Certificates for exchange pursuant to this Section 2.4 will be paid
an amount in cash (without interest) equal to such holder's proportionate
interest in the proceeds from the sale or sales in the open market by the
Exchange Agent, on behalf of all such holders, of the aggregate fractional
shares of Class A Liberty Media Group Stock which, but for this Section 2.4(f),
would be issuable in the Merger. As soon as practicable following the Effective
Time, the Exchange Agent shall determine the excess of (i) the number of full
shares of Class A Liberty Media Group Stock delivered to the Exchange Agent by
Parent over (ii) the aggregate number of full shares of Class A Liberty Media
Group Stock to be distributed to former holders of Company Common Stock (such
excess being herein called the "Excess Shares"). The Exchange Agent, as agent
for the former holders of Company Common Stock, shall sell the Excess Shares at
the prevailing prices on the NYSE as soon as practicable after the Closing. The
sales of the Excess Shares by the Exchange Agent shall be executed on the NYSE
through one or more member firms of the NYSE and shall be executed in round lots
to the extent practicable. All commissions, transfer taxes and other
out-of-pocket transaction costs, if any, including the expenses and
compensation, if any, of the Exchange Agent, incurred in connection with such
sale of Excess Shares, shall be deducted from the proceeds otherwise
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distributable to the holders of Company Common Stock. Until the proceeds of such
sale have been distributed to the former holders of Company Common Stock, the
Exchange Agent will hold such proceeds in trust for such former holders (the
"Fractional Fund"). As soon as practicable after the determination of the amount
of cash to be paid to former holders of Company Common Stock in lieu of any
fractional interests, the Exchange Agent shall make available in accordance with
this Agreement such amounts to such former holders.
(g) No Dividends Before Surrender of Certificates. No dividends or
other distributions declared or made after the Effective Time with respect to
Class A Liberty Media Group Stock with a record date after the Effective Time
shall be paid to the holder of any unsurrendered Certificate with respect to the
shares of Class A Liberty Media Group Stock represented thereby, until the
holder of record of such Certificate shall surrender such Certificate as
provided herein. Following surrender of any such Certificate, there shall be
paid to the record holder of the certificates representing whole shares of Class
A Liberty Media Group Stock issued in exchange therefor, without interest, (i)
at the time of such surrender, the amount of dividends or other distributions,
if any, with a record date after the Effective Time and payable with respect to
such whole shares of Class A Liberty Media Group Stock between the Effective
Time and the time of such surrender, and (ii) at the appropriate payment date,
the amount of dividends or other distributions, if any, with a record date after
the Effective Time but prior to surrender and with a payment date subsequent to
surrender payable with respect to such whole shares of Class A Liberty Media
Group Stock.
(h) No Further Ownership Rights in Company Common Stock. The Merger
Consideration (together with cash paid in lieu of fractional shares) delivered
upon the surrender for exchange of shares of Company Common Stock in accordance
with the terms hereof shall be deemed to have been issued and paid in full
satisfaction of all rights pertaining to such shares of Company Common Stock,
and there shall be no further registration of transfers on the stock transfer
books of the Surviving Entity of the shares of Company Common Stock which were
outstanding immediately prior to the Effective Time. Subject to Section 2.4(i),
if, after the Effective Time, Certificates are presented to the Surviving Entity
for any reason, they shall be canceled and exchanged as provided in this Article
II.
(i) Termination of Exchange Pool and Fractional Fund; Abandoned
Property Laws. Any portion of the Exchange Pool and the Fractional Fund (and any
dividends or other distributions with respect to such portion of the Exchange
Pool) which remains unclaimed by the former stockholders of the Company for one
year after the Effective Time shall be delivered to Parent, upon demand of
Parent, and any former stockholders of the Company shall, after such delivery,
look only to Parent for payment of their claim for the applicable Merger
Consideration including any cash in lieu of fractional shares of Class A Liberty
Media Group Stock (and any such dividends or other distributions). Neither
Parent, Liberty Media nor the Surviving Entity shall be liable to any holder of
shares of Company Common Stock or Class A Liberty Media Group Stock for any
Merger Consideration, for any dividends or distributions with respect thereto or
for any cash in lieu of fractional shares, which may be delivered to any public
official pursuant to any abandoned property, escheat or similar law.
(j) Appraisal Shares. Notwithstanding Sections 2.3(a)(i) and 2.4(f),
each share of Company Common Stock held of record immediately prior to the
Effective Time by a
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stockholder of the Company that has not failed to perfect and has not
effectively withdrawn, surrendered, or lost appraisal rights under Section 262
of the DGCL as to such share (to the extent, if any, that such appraisal rights
are available under Section 262 of the DGCL) shall not be converted into and
represent the right to receive and shall not be exchangeable for the Merger
Consideration (including any payments of cash in lieu of fractional shares) as
provided in this Article II, and such stockholder shall not be entitled to
receive the Merger Consideration as provided in this Article II (including any
payment of cash in lieu of fractional shares), and such stockholder shall be
entitled only to such appraisal rights as to such share, provided, however, that
if and when any such stockholder shall have failed to perfect such appraisal
rights or shall have effectively withdrawn, surrendered, or lost such appraisal
rights as to such share in accordance with the DGCL, then such share of Company
Common Stock shall be converted into and represent the right to receive and
shall be exchangeable for (to the fullest extent permitted under the DGCL, as of
the Effective Time) the Merger Consideration as provided in this Article II
(including any payment of cash in lieu of fractional shares), and such
stockholder shall be entitled to receive the Merger Consideration as provided in
this Article II (including any payment of cash in lieu of fractional shares and
any dividends or other distributions pursuant to Section 2.4(g)) in exchange for
and upon the surrender of the Certificate evidencing such share in accordance
with this Agreement.
2.5 Changes in Class A Liberty Media Group Stock. If, prior to the Effective
Time, the Class A Liberty Media Group Stock shall be recapitalized, redeemed or
reclassified or Parent shall effect any stock dividend, stock split, or reverse
stock split of Class A Liberty Media Group Stock or shall otherwise effect any
transaction that changes the shares of Class A Liberty Media Group Stock into
any other securities (including securities of another corporation), or shall
make any other dividend or distribution on the shares of Class A Liberty Media
Group Stock (other than normal quarterly cash dividends as the same may be
adjusted from time to time), then the Stock Exchange Ratio, the terms of the
foregoing exchanges and the terms of the conversion of any Carryover Options as
provided in Section 2.3(b) will, as appropriate, be adjusted to reflect such
split, combination, transaction, dividend or other distribution or change.
2.6 Capital Contribution to Liberty Media. As soon as practicable following the
Effective Time, to the extent permitted by applicable law, Parent and Liberty
Media shall cause the Post-Merger Restructuring Transactions described in
Exhibit 2.6, as the same may be modified or amended by mutual agreement of the
parties, to be consummated.
ARTICLE III
CERTAIN ACTIONS
3.1 Stockholder Meeting. The Company and its Board of Directors (the "Company
Board") shall take all action necessary in accordance with applicable law, the
requirements of the American Stock Exchange and the Company's Restated
Certificate of Incorporation (the "Company Charter") and Bylaws (the "Company
Bylaws") to duly call and hold, as soon as reasonably practicable after the date
hereof, a meeting of the Company's stockholders (the "Special Meeting") for the
purpose of considering and voting upon the approval and adoption of this
Agreement and the Merger contemplated hereby (the "Merger Proposal"). The only
matters the Company shall propose to be acted on by the Company's stockholders
at the Special Meeting shall be the Merger Proposal and related matters
incidental to the consummation of the Merger
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and, if so determined by the Company and with the consent of Liberty Media
(which shall not be unreasonably withheld or delayed), such other matters as are
customarily presented to stockholders at an annual meeting. Subject to Section
7.5(c), the Company Board will recommend that the Company's stockholders vote in
favor of approval of the Merger Proposal and include such recommendation in the
Proxy Statement, and the Company will use its commercially reasonable efforts to
solicit from its stockholders proxies in favor of such approval and to secure
the vote of stockholders of the Company required by the DGCL, the Company
Charter and the Company Bylaws to effect the Merger. The Company shall not
require any vote greater than a majority of the votes entitled to be cast by the
holders of the issued and outstanding shares of Company Common Stock for
approval of the Merger Proposal.
3.2 Registration Statement and Other Commission Filings. As soon as reasonably
practicable after the execution of this Agreement, Parent, Liberty Media and the
Company shall cooperate in the preparation of, and the Company shall file
confidentially with the Commission, a preliminary proxy statement in form and
substance reasonably satisfactory to each of Parent, Liberty Media and the
Company, and, following resolution of comments, if any, of the Commission on the
preliminary proxy statement, Liberty Media and Parent shall prepare and Parent
shall file with the Commission a registration statement on Form S-4 (the
"Registration Statement"), containing a form of prospectus that includes such
proxy statement (as amended or supplemented, if applicable) registering under
the Securities Act the issuance of the shares of Class A Liberty Media Group
Stock issuable upon conversion of Company Common Stock pursuant to the Merger.
Each of Parent, Liberty Media and the Company shall use its commercially
reasonable efforts to respond to any comments of the Commission and to have the
Registration Statement declared effective as promptly as practicable after such
filing and the Company shall use its commercially reasonable efforts to cause
the proxy statement as filed with the Commission and as thereafter amended or
supplemented to be cleared by the Commission and mailed to the Company's
stockholders as promptly as practicable after the Registration Statement becomes
effective (such proxy statement in the definitive form mailed to the Company's
stockholders, as thereafter amended or supplemented, being referred to as the
"Proxy Statement"). The Company, Liberty Media and Parent will notify each other
party promptly of the receipt of any comments from the Commission or its staff
or any other government officials and of any request by the Commission or its
staff for amendments or supplements to the Registration Statement, the Proxy
Statement or any other filing or for additional information, and will supply the
other parties with copies of all correspondence between it and any of its
representatives, on the one hand, and the Commission or its staff or any other
government officials on the other hand, with respect to the Registration
Statement, the Proxy Statement, the Merger or any filing with the Commission
relating thereto. Whenever any party hereto becomes aware of any event that is
required to be set forth in an amendment or supplement to the Proxy Statement,
the Registration Statement or any other filing with the Commission in connection
with this Agreement or the transactions contemplated hereby, such party shall
promptly inform the other parties of such occurrence and cooperate in the prompt
filing with the Commission or its staff or any other governmental officials,
and/or mailing to stockholders of the Company, of such amendment or supplement,
which shall comply in all material respects with the provisions of the
Securities Act and the Exchange Act. The Company, Parent and Liberty Media shall
each promptly provide the others (or their respective counsel) copies of all
filings made by such party with any Governmental Entity in connection with this
Agreement or the transactions contemplated hereby.
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3.3 Identification of Rule 145 Affiliates. Within 30 days after the execution of
this Agreement, the Company shall deliver to Parent and Liberty Media a letter
identifying all Persons who the Company knows are or who the Company has reason
to believe may be, as of the date of the Special Meeting, "affiliates" of the
Company for purposes of Rule 145 under the Securities Act. The Company will
supplement such letter, if applicable, with the name and address of any other
Person subsequently identified by either Parent or the Company, as the case may
be, as a Person who may be deemed to be such an affiliate; provided, however,
that no such Person identified by the Company shall remain on such list of
affiliates if the Company shall receive from Parent, on or before the date of
the Special Meeting, an opinion of outside counsel reasonably satisfactory to
the Company to the effect that such Person is not such an affiliate. The Company
shall use its reasonable best efforts to cause each Person who is identified as
an "affiliate" in the letter referred to above (as so supplemented) to deliver
to Parent, on or prior to the Closing Date, a written agreement, in
substantially the form annexed hereto as Exhibit 3.3 (each a "Rule 145
Agreement"). Parent shall not be required to maintain the effectiveness of the
Registration Statement or any other registration statement under the Securities
Act for the purposes of resale of Class A Liberty Media Group Stock received by
such "affiliates" in the Merger.
3.4 Reasonable Efforts.
(a) Subject to the terms and conditions of this Agreement (including
Section 7.4 hereof) and applicable law, and (with respect to Parent) subject to
the last proviso of the following sentence, each of the parties hereto shall use
its commercially reasonable efforts to take, or cause to be taken, all actions
and to do, or cause to be done, all things reasonably necessary, proper or
advisable to consummate and make effective the transactions contemplated by this
Agreement as soon as reasonably practicable (or, with respect to ministerial
actions required of Parent or its directors, officers, employees or agents,
promptly), including such actions or things as any other party hereto may
reasonably request in order to cause any of the conditions to such party's
obligation to consummate such transactions specified in Article VIII to be fully
satisfied. Without limiting the generality of the foregoing, each of the parties
hereto shall (and each shall cause its directors, officers and Subsidiaries, and
use its reasonable efforts to cause its Affiliates, employees, agents,
attorneys, accountants and representatives, to) consult and fully cooperate with
and provide reasonable assistance to each other in (A) the preparation and
filing with the Commission of the Registration Statement, the preliminary proxy
statement referred to in Section 3.2, the Proxy Statement and any necessary
amendments or supplements to any of the foregoing; (B) seeking to have such
Registration Statement declared effective by the Commission as soon as
reasonably practicable after filing; (C) taking such actions as may reasonably
be required under applicable state securities or blue sky laws in connection
with the issuance of the Stock Consideration; (D) using commercially reasonable
efforts to obtain all required consents, approvals, waivers, licenses, permits,
authorizations, registrations, qualifications, or other permission or action by,
and to give all required notices to and to make all required filings with and
applications and submissions to, any Governmental Entity or other Person, in
each case required in order to cause any of the conditions to each other party's
obligation to consummate the Merger and the transactions contemplated hereby to
be fully satisfied; (E) filing all pre-merger notification and report forms
required under the Xxxx-Xxxxx Act and responding to any requests for additional
information made by any Governmental Entity pursuant to the Xxxx-Xxxxx Act; (F)
using commercially reasonable efforts (which in the case of
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Parent do not require the commencement of litigation) to cause the lifting of
any permanent or preliminary injunction or restraining order or other similar
order issued or entered by any court or other Governmental Entity (an
"Injunction") of any type referred to in Section 8.2(d), 8.3(d) or 8.4(d); (G)
providing all such information about such party, its Subsidiaries and its
officers, directors, partners and Affiliates, and making all applications and
filings, as may be necessary or reasonably requested in connection with any of
the foregoing; and (H) in general, using commercially reasonable efforts to
consummate and make effective the transactions contemplated hereby; provided,
however, that in making any such filing and in order to obtain any consent,
approval, waiver, license, permit, authorization, registration, qualification,
or other permission or action or the lifting of any Injunction referred to in
this sentence, (x) the Company, Liberty Media, Parent and their respective
Affiliates shall not be required to (and without the prior written consent of
Liberty Media and Parent, the Company and its Affiliates shall not): (i) pay any
consideration; (ii) surrender, modify or amend in any substantive respect any
License or Contract (including this Agreement), (iii) hold separately (in trust
or otherwise), divest itself of, or otherwise rearrange the composition of, any
of its assets, (iv) agree to any limitations on any such Person's freedom of
action with respect to future acquisitions of assets or with respect to any
existing or future business or activities or on the enjoyment of the full rights
of ownership, possession and use of any asset now owned or hereafter acquired by
any such Person, or (v) agree to any of the foregoing or any other conditions or
requirements of any Governmental Entity or other Person that are materially
adverse or burdensome; (y) Parent shall not be required to take any action
pursuant to the foregoing if the taking of such action is reasonably likely to
result in the imposition of a condition or restriction of the type referred to
in Section 8.3(e); and (z) Liberty Media and the Company recognize that Parent
may allocate resources in whatever manner it reasonably deems appropriate; and
provided, further, that Parent and its Subsidiaries shall not be required to
take any such action, or any other action pursuant to this Section 3.4, except
to the extent that such action is required by statute, rule or regulation to be
taken by or in the name of Parent or such Subsidiary (as opposed to by or in the
name of Liberty Media or the Company or a Subsidiary thereof) in connection with
the transactions contemplated by this Agreement and, in such event, Parent (or
such Subsidiary of Parent) shall be required only to make filings and statements
of fact and shall not under any circumstances be required to commit or be
committed to take or refrain from taking any action or be subject to any
restriction that relates to any business, asset, liability, operation or
employee of Parent or any of its Subsidiaries. Prior to making any application
to or filing with any Governmental Entity or other Person in connection with
this Agreement, each party shall provide the other party with drafts thereof and
afford the other party a reasonable opportunity to comment on such drafts.
(b) The Company will take all reasonable steps to (i) exempt the Merger
from the requirements of any applicable state takeover law and (ii) assist in
any challenge by Parent or Liberty Media to the validity or applicability to the
Merger of any state takeover law.
(c) Nothing in this Agreement shall be deemed to affect the ability of
Parent at any time to effect the distribution, if any, to holders of Class A
Liberty Media Group Stock and Class B Liberty Media Group Stock of all or any
portion of, or any interest in, the assets comprising the Liberty Media Group,
the redemption, if any, of all or any portion of the Class A Liberty Media Group
Stock and Class B Liberty Media Group Stock or any similar transaction. If at
any time prior to the consummation of the Merger, Parent has effected a
distribution to holders of Class A Liberty Media Group Stock and Class B Liberty
Media Group Stock of all of its interest
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in the assets comprising the Liberty Media Group at such time (the "Liberty
Interest"), a redemption of all of the Class A Liberty Media Group Stock and
Class B Liberty Media Group Stock in exchange for the Liberty Interest (any such
action, a "Liberty Event") or a similar transaction, the parties agree that
Parent shall automatically be fully released and discharged from all of its
obligations hereunder and the Company and Liberty Media will amend this
Agreement as appropriate to provide that (i) the Company will be acquired by
Liberty Media or such other publicly-traded corporation that at such time holds,
directly or indirectly, the Liberty Interest (the "New Parent") by means of the
merger of a direct wholly-owned subsidiary of New Parent into the Company, with
the Company as the surviving entity in such merger (an "Alternative Merger"),
(ii) in lieu of the Stock Consideration issuable pursuant to this Agreement in
the Merger, the stockholders of the Company will be entitled to receive, per
share of Company Common Stock cancelled in the Alternative Merger, that number
of shares or fraction of a share (subject to Section 2.4(f)) of the class and
series of common stock of New Parent received by holders of shares of Class A
Liberty Media Group Stock in the Liberty Event equal to (x) 0.104 (subject to
the adjustments set forth in Section 2.5) multiplied by (y) the number of
shares, or fraction of a share, of such class or series of common stock of New
Parent distributed in respect of, or delivered in redemption of (as applicable),
one share of Class A Liberty Media Group Stock in connection with the Liberty
Event (the "Alternative Consideration"), and (iii) each Carryover Option will
become exercisable for that number of shares or fraction of a share of the class
and series of common stock of New Parent received by holders of shares of Class
A Liberty Media Group Stock in the Liberty Event equal to (x) the number of
shares of Company Common Stock for which such Carryover Option was exercisable
immediately prior to the Effective Time multiplied by (y) the product of (A)
0.208 (subject to the adjustments set forth in Section 2.5) multiplied by (B)
the number of shares, or fraction of a share, of such class or series of common
stock of New Parent distributed in respect of, or delivered in redemption of (as
applicable), one share of Class A Liberty Media Group Stock in connection with
the Liberty Event (and (1) the per share exercise price of each such Carryover
Option will likewise be appropriately adjusted and (2) each Carryover Option,
other than Carryover Options granted pursuant to the 1993 Plan or the Xxxxxx
Agreement, will terminate immediately following the effective time of the
Alternative Merger). Liberty Media and the Company will negotiate in good faith
such other revisions to the terms and conditions of this Agreement as are
appropriate to provide for the Alternative Merger as set forth in the preceding
sentence.
(d) Promptly following the occurrence of a Liberty Event, the Company
shall use its commercially reasonable efforts to obtain the opinion of an
investment bank of nationally recognized standing to the effect that the
Alternative Consideration to be received by the stockholders of the Company in
the Alternative Merger is equivalent in value to the Stock Consideration that
would have been received by the stockholders of the Company in the Merger had
such Liberty Event not occurred (an "Equivalency Opinion"). Receipt of an
Equivalency Opinion will be a condition to the Company's obligation to
consummate the Alternative Merger, subject to the remaining provisions of this
Section 3.4(d). At any time on or after the tenth day following the satisfaction
or waiver of all conditions to the closing of the Alternative Merger except for
the receipt of an Equivalency Opinion and except for conditions to be satisfied
on the Closing Date, New Parent may, but shall not be required to, elect to
acquire the Company for cash (a "Cash Election"). If New Parent makes a Cash
Election (i) the Company will be acquired by New Parent by means of the merger
of a direct wholly-owned subsidiary of New Parent into the Company, with the
Company as the surviving entity in such merger (a "Cash
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Merger"), (ii) receipt of an Equivalency Opinion will not be a condition to the
Company's obligation to consummate a Cash Merger, (iii) in lieu of the Stock
Consideration issuable pursuant to this Agreement in the Merger or the
Alternative Consideration, the stockholders of the Company will be entitled to
receive, per share of Company Common Stock cancelled in the Cash Merger, $2.75
in cash as additional Cash Consideration, and (iv) each Carryover Option will
become exercisable for an amount of cash equal to (x) the number of shares of
Company Common Stock for which such Carryover Option was exercisable immediately
prior to the Effective Time multiplied by (y) $5.50 (and (1) the per share
exercise price of each such Carryover Option will likewise be appropriately
adjusted and (2) each Carryover Option, other than Carryover Options granted
pursuant to the 1993 Plan or the Xxxxxx Agreement, will terminate immediately
following the effective time of the Cash Merger). New Parent and the Company
will negotiate in good faith such other revisions to the terms and conditions of
this Agreement as are appropriate to provide for a Cash Merger as set forth in
the preceding sentence.
3.5 Company Stock Option and Other Plans. Promptly following the mailing of the
Proxy Statement, the Company shall cause a notice (which shall include, without
limitation, the information contained in Section 2.3(b) hereof) to be sent to
each holder of Company Stock Options, whether vested or unvested, in such form
as is reasonably agreed upon by the Company, Parent and Liberty Media.
3.6 Expenses. Except as otherwise may be provided in this Agreement, whether or
not the Merger is consummated, as between the Company, on one hand, and Liberty
Media, on the other hand, all costs and expenses incurred in connection with
this Agreement and the transactions contemplated hereby shall be paid by the
party incurring such cost or expense, except that the costs and expenses
incurred in connection with printing and mailing the Proxy Statement, the
Registration Statement (and any amendment or supplement thereto) and any
prospectus included in the Registration Statement (and any amendment or
supplement thereto) and the costs of filing under the Xxxx-Xxxxx Act shall be
borne one-half by Liberty Media and one-half by the Company. The filing fee
payable to the Commission in connection with the filing of the Registration
Statement shall be paid by Liberty Media. Notwithstanding the foregoing, if this
Agreement is terminated by a party (the "non-breaching party") as a result of a
material willful breach by the other party (the "breaching party") of its
covenants or agreements contained herein or the representations and warranties
made by it herein, in addition to all other rights and remedies that may be
available to the non-breaching party, the breaching party shall reimburse the
non-breaching party for all reasonably documented out-of-pocket costs and
expenses incurred in connection with the transactions contemplated by this
Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby makes the following representations and
warranties to Parent and Liberty Media, in each case except as otherwise set
forth in the appropriate section of the Company Disclosure Schedule dated as of
the date of this Agreement and delivered to each of Parent and Liberty Media:
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4.1 Corporate Organization.
(a) The Company is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware. Attached hereto as
Exhibit 4.1(a)(i) and Exhibit 4.1(a)(ii), respectively, are true and complete
copies of the Company Charter and the Company Bylaws, as amended through the
date hereof (together, the "Organizational Documents").
(b) The Company has all requisite power and authority and has all
necessary approvals, licenses, permits and authorization to own, operate or
lease its properties and to carry on its business as now conducted. The Company
has all requisite power and authority to execute and deliver the Company
Transaction Documents and to perform its obligations thereunder.
(c) The Company has filed all necessary documents to qualify to do
business as a foreign corporation in, and the Company is in good standing under
the laws of, each jurisdiction in which the conduct of the Company's business or
the nature of the properties owned or leased by the Company requires such
qualification, except where the failure to so qualify or be in good standing
would not reasonably be expected to have a Material Adverse Effect.
4.2 Subsidiaries.
(a) Section 4.2 of the Company Disclosure Schedule sets forth (i) the
name of each Subsidiary of the Company; (ii) the name of each corporation,
partnership, joint venture or other entity (other than such Subsidiaries) in
which the Company or any of its Subsidiaries has, or pursuant to any agreement
has the right or obligation to acquire at any time by any means, directly or
indirectly, an equity interest or investment; (iii) in the case of each of such
corporations described in clauses (i) and (ii) above, (A) the jurisdiction of
incorporation, (B) the percentage of each class of voting capital stock owned by
the Company or any of its Subsidiaries, (C) a description of any contractual
limitations on the holder's ability to vote or alienate such securities, (D) a
description of any outstanding options or other rights to acquire securities of
such corporation, and (E) a description of any other contractual charge or
impediment which would limit or impair the Company's or any of its Subsidiaries'
ownership of such entity or interest or its ability effectively to exercise the
full rights of ownership of such entity or interest; and (iv) in the case of
each of such unincorporated entities, information substantially equivalent to
that provided pursuant to clause (iii) above with regard to corporate entities.
(b) Each Subsidiary of the Company has been duly organized, is validly
existing and in good standing under the laws of the jurisdiction of its
organization, has the corporate power and authority to own and lease its
properties and to conduct its business and is duly registered, qualified and
authorized to transact business and is in good standing in each jurisdiction in
which the conduct of its business or the nature of its properties requires such
registration, qualification or authorization, except where the failure to be so
registered, qualified, authorized or in good standing would not reasonably be
expected to have a Material Adverse Effect. All of the issued and outstanding
equity or other participating interests of each Subsidiary have been duly
authorized and validly issued, are fully paid and non-assessable, and, to the
extent owned by the Company as indicated on Section 4.2 of the Company
Disclosure Schedule, are owned free and
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clear of any Lien, Restriction or equity, except as set forth in Section 4.2 of
the Company Disclosure Schedule. Except as set forth on Section 4.2 of the
Company Disclosure Schedule, there are no outstanding options, warrants,
agreements, conversion rights, preemptive rights or other rights to subscribe
for, purchase or otherwise acquire any issued or unissued shares of capital
stock of any Subsidiary.
4.3 Capitalization.
(a) The authorized capital stock of the Company consists of 25,000,000
shares of Company Common Stock and 3,000,000 shares of preferred stock, par
value $.01 per share ("Company Preferred Stock"). As of the close of business on
the date one business day prior to the date hereof, (i) 13,311,307 shares of
Company Common Stock were issued and outstanding, (ii) no shares of Company
Common Stock were held in the treasury of the Company, (iii) no shares of
Company Preferred Stock were issued or outstanding, (iv) 1,125,000 shares of
Company Common Stock were reserved for issuance under the Company's employee
stock option plans and the option agreements listed in Section 4.3(a) of the
Company Disclosure Schedule in the amounts stated in such section and (v) there
were no bonds, debentures, notes or other evidences of indebtedness issued or
outstanding having the right to vote on any matters on which the Company's
stockholders may vote ("Voting Debt").
(b) All the outstanding shares of capital stock of the Company have
been duly authorized and validly issued and are fully paid and non-assessable
free of all preemptive or similar rights and were issued in accordance with the
registration or qualification requirements of the Securities Act and any
relevant state securities laws or pursuant to valid exemptions therefrom.
(c) Except for the Company Stock Options, which are listed on Section
2.3(b) of the Company Disclosure Schedule, and except as set forth in Section
4.3 of the Company Disclosure Schedule, there are no warrants, options,
subscriptions, calls, rights, commitments, convertible securities or any other
agreements of any character to or by which the Company or any of its
Subsidiaries is a party or is bound which, directly or indirectly, obligate the
Company or any of its Subsidiaries to issue, deliver or sell or cause to be
issued, delivered or sold any additional shares of Company Common Stock, Company
Preferred Stock or any other capital stock, equity interest or Voting Debt of
the Company or any Subsidiary of the Company, any securities convertible into,
or exercisable or exchangeable for, or evidencing the right to subscribe for any
such shares, interests or Voting Debt, or any phantom shares, phantom equity
interests or stock or equity appreciation rights, or obligating the Company or
any of its Subsidiaries to grant, extend or enter into any such subscription,
option, warrant, call or right (collectively, "Convertible Securities"). Neither
the Company nor any Subsidiary thereof is subject to any obligation (contingent
or otherwise) to repurchase or otherwise acquire or retire any shares of its
capital stock.
(d) Except as disclosed in Section 4.3(d) of the Company Disclosure
Schedule, there are not, and immediately after the Effective Time, there will
not be, any outstanding or authorized subscriptions, options, warrants, calls,
rights, commitments or other agreements of any character to or by which the
Company or any of its Subsidiaries is a party or is bound that, directly or
indirectly, (i) call for or relate to the sale, pledge, transfer or other
disposition by the
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Company or any Subsidiary of the Company of any shares of capital stock, any
partnership or other equity interests or any Voting Debt of the Company or any
Subsidiary of the Company, or (ii) relate to the voting or control of such
capital stock, partnership or other equity interests or Voting Debt.
(e) (i) no stockholder of the Company is entitled to any preemptive or
similar rights to subscribe for shares of capital stock of the Company, (ii) the
Company has not agreed to register any of its securities under the Securities
Act (other than pursuant to the registration rights agreement listed in Section
4.3(e) of the Company Disclosure Schedule) and (iii) there are no existing
voting trusts or similar agreements to which the Company or any of its
Subsidiaries is a party with respect to the voting of the capital stock of the
Company or any of its Subsidiaries.
(f) No party (except the Company) to the registration rights agreements
listed in Section 4.3(e) of the Company Disclosure Schedule (excluding those
registration rights agreements that are mentioned in Section 8.2(g) hereof) is
an "affiliate" of the Company for purposes of Rule 145 under the Securities Act.
4.4 Corporate Proceedings, etc. The Company has full corporate power to execute
and deliver the Company Transaction Documents (including this Agreement), to
perform its obligations thereunder and, subject to obtaining the approval of its
stockholders specified in Section 3.1, to consummate the transactions
contemplated thereby. The execution, delivery and performance by the Company of
this Agreement and the consummation by the Company of the transactions
contemplated hereby (including, without limitation, the Merger) have been duly
and validly authorized by all necessary corporate action on the part of the
Company, subject, in the case of the consummation by it of the Merger, to the
approval of the Company's stockholders specified in the previous sentence. This
Agreement has been duly executed and delivered by the Company and is a legal,
valid and binding obligation of the Company enforceable in accordance with its
terms (except that insofar as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting creditors' rights generally, or by principles governing the
availability of equitable remedies).
4.5 Consents and Approvals. The execution and delivery by the Company of this
Agreement do not, and the performance by the Company of its obligations
hereunder and the consummation by the Company of the Merger and the transactions
contemplated hereby will not, require any Governmental Consent or any
Governmental Filing, in each case on the part of or with respect to the Company
or any Subsidiary of the Company, except for (i) the approval of the Company's
stockholders specified in Section 3.1, (ii) the filing of the Certificate of
Merger with the Delaware Secretary of State and appropriate documents with the
relevant authorities of other jurisdictions in which the Company is qualified to
do business, (iii) the Governmental Consents and Governmental Filings with
foreign, state and local governmental authorities set forth in Section 4.5 of
the Company Disclosure Schedule (the "Local Approvals"), (iv) such Governmental
Consents and Governmental Filings as may be required in connection with the
issuance of the Merger Consideration as contemplated hereby pursuant to state
securities and blue sky laws, (v) the Governmental Filings required to be made
pursuant to the pre-merger notification requirements of the Xxxx-Xxxxx Act, (vi)
the filing with the Commission of (A) the preliminary proxy statement and the
definitive Proxy Statement as contemplated by Section 3.2(a) and (B) such
reports under Section 13(a), 13(d), 15(d) or 1(a) of the Exchange Act as may
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be required in connection with this Agreement, the Voting Agreements or the
transactions contemplated hereby or thereby, (vii) the Governmental Consent of
the Federal Communications Commission (the "FCC"), with respect to the FCC
Licenses described in Section 4.15 and (viii) such other Governmental Consents
and Governmental Filings the absence or omission of which will not, either
individually or in the aggregate, have a Material Adverse Effect.
4.6 Absence of Defaults, Conflicts, etc.
(a) Except as set forth in Section 4.6 of the Company Disclosure
Schedule, and assuming the consents, approvals and filings referred to in
Section 4.5 above and Section 4.5 of the Company Disclosure Schedule are
obtained or made, the execution and delivery by the Company of this Agreement do
not, and the consummation of the Merger and the fulfillment of the terms hereof
will not, (i) result in a breach of any of the terms, conditions or provisions
of, or constitute a default under, or permit the acceleration of rights under or
termination, cancellation, suspension or modification of or result in any
increase in any payment required by, or cause the impairment, loss or forfeiture
of any material benefit, right or privilege under, or create a Lien or other
encumbrance on any assets pursuant to (any such conflict, violation, breach,
default, right of termination, cancellation or acceleration, loss or creation, a
"Violation") or (ii) require the Company or any Subsidiary of the Company to
obtain any consent by or approval or authorization of (a "Contract Consent") or
notice to (a "Contract Notice") any other Person (other than a Governmental
Entity), under:
(1) any indenture, mortgage, deed of trust, credit agreement,
note, bond or other evidence of indebtedness, lease, franchise, permit,
authorization, license, contract, instrument, employee benefit plan or
practice, or other agreement, obligation, commitment or concession of
any nature to which the Company or any Subsidiary of the Company is a
party, by which the Company, any Subsidiary of the Company or any of
their respective assets or properties is bound or affected or pursuant
to which the Company or any Subsidiary of the Company is entitled to
any rights or benefits (including the Licenses) (collectively,
"Contracts");
(2) assuming the approval of the Merger Proposal by the
Company's stockholders as contemplated by Section 3.1, the
Organizational Documents; or
(3) any order, judgment, law, rule or regulation of any
Governmental Entity having jurisdiction over the Company or any of its
Subsidiaries or over their respective properties or businesses;
other than, in the case of clause (1) above, any such violations or failures to
obtain any Contract Consents or to make any Contract Notices that would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
(b) No event has occurred and no condition exists that, upon notice or
the passage of time (or both), would constitute a Violation under any of the
items listed in clauses (1), (2) or (3)
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of Section 4.6(a) above, other than any such Violations that would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
4.7 Reports.
(a) The Company has made available to Parent and Liberty Media true and
complete copies (including all amendments thereto) of its (i) Annual Reports on
Form 10-K for all fiscal years since January 1, 1996, as filed with the
Commission, (ii) Quarterly Reports on Form 10-Q for all quarters since January
1, 1996, as filed with the Commission, (iii) proxy statements related to all
meetings of its stockholders (whether annual or special) held since January 1,
1996 and (iv) all other reports filed with, or registration statements declared
effective by, the Commission since January 1, 1996, which are all the documents
(other than preliminary material) that the Company filed or was required to file
with the Commission from that date through the date hereof (clauses (i) through
(iv) being referred to herein collectively as the "Company SEC Reports").
From the date hereof through the Closing Date, the Company
will furnish to Parent and Liberty Media copies of any reports and registration
statements to be filed with the Commission (the "Interim SEC Reports") within a
reasonable amount of time prior to the filing thereof. As of their respective
dates, the Company SEC Reports (or the Interim SEC Reports, as the case may be)
complied or will comply, as the case may be, in all material respects with the
requirements of the Securities Act or the Exchange Act, as the case may be,
applicable to such reports and registration statements. As of their respective
dates, the Company SEC Reports (or the Interim SEC Reports, as the case may be)
did not and will not, as the case may be, contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were, or will be, made, not misleading.
(b) The audited consolidated financial statements and unaudited interim
financial statements of the Company included in the Company SEC Reports (or to
be included in the Interim SEC Reports, as the case may be) comply as to form in
all material respects with applicable accounting requirements of the Securities
Act or the Exchange Act, as applicable, and with the published rules and
regulations of the Commission with respect thereto. The financial statements and
the condensed financial statements, as applicable, included in the Company SEC
Reports (or to be included in the Interim SEC Reports, as the case may be) (i)
have been prepared in accordance with GAAP applied on a consistent basis (except
as may be indicated therein or in the notes thereto), (ii) present fairly, in
all material respects, the financial position of the Company and its
Subsidiaries as of the dates thereof and the results of their operations and
cash flows for the periods then ended subject, in the case of the unaudited
interim financial statements, to normal year-end audit adjustments and any other
adjustments described therein and the fact that certain information and notes
have been condensed or omitted in accordance with the Exchange Act, and (iii)
are in all material respects in agreement with the books and records of the
Company and its Subsidiaries.
(c) The Company and its Subsidiaries keep proper accounting records in
which all material assets and liabilities, and all material transactions, of the
Company and its Subsidiaries are recorded in conformity with applicable
accounting principles. No part of the Company's or
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any of its Subsidiaries' accounting system or records, or access thereto, is
under the control of a Person who is not an employee of the Company or such
Subsidiary (other than the Company's independent auditors and outside legal
counsel).
4.8 Absence of Certain Developments. Except as disclosed in the Company SEC
Reports filed with the Commission prior to the date hereof or in Section 4.8 of
the Company Disclosure Schedule, and except for the transactions contemplated by
this Agreement, since June 30, 1999 the Company and its Subsidiaries have
conducted their business only in the ordinary and usual course in accordance
with past practice, and:
(a) there have not occurred any events, changes or conditions
(including the incurrence of any liabilities of any nature, whether or not
accrued, contingent or otherwise) that have had, or are reasonably likely in the
future to have, individually or in the aggregate, a Material Adverse Effect; and
(b) neither the Company nor any Subsidiary of the Company has taken any
action that would have been prohibited under Section 7.4 hereof had the
prohibitions imposed by such section been in effect at such time.
4.9 Compliance with Law.
(a) Except as set forth in Section 4.9 of the Company Disclosure
Schedule, neither the Company nor any of its Subsidiaries is in violation of any
laws, ordinances, governmental rules or regulations to which it is subject,
including, without limitation, laws or regulations relating to the environment
or to occupational health and safety. No expenditures material to the Company
and its Subsidiaries taken as a whole are or will be required in order to cause
the current operations or properties of such entities to comply with any such
laws, ordinances, governmental rules or regulations and except as set forth in
Section 4.9 of the Company Disclosure Schedule, neither the Company nor any of
its Subsidiaries has received notice of violation of any law, ordinance,
governmental rule or regulation and except as set forth in Section 4.9 of the
Company Disclosure Schedule, no investigation or review by any Governmental
Entity with respect to the Company or any of its Subsidiaries is pending or, to
the best of the Company's knowledge, threatened, nor has any Governmental Entity
indicated an intention to conduct any such investigation or review.
(b) Neither the Company or any of its Subsidiaries nor, to the
Company's knowledge, any of the officers, directors, employees, agents or other
representatives of the Company or any of its Subsidiaries or any other business
entity or enterprise with which the Company or any Subsidiary is or has been
affiliated or associated, has, directly or indirectly, made or authorized any
payment, contribution or gift of money, property, or services, whether or not in
contravention of applicable law, (i) as a kickback or bribe to any Person or
(ii) to any political organization, or the holder of or any aspirant to any
elective or appointive public office except for personal political contributions
not involving the direct or indirect use of funds of the Company or any of its
Subsidiaries.
(c) The Company and its Subsidiaries hold, and Section 4.9 of the
Company Disclosure Schedule lists, all licenses, permits, rights of way,
easements, franchises, ordinances,
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certificates, variances, exemptions, concessions, leases, instruments, orders
and approvals, governmental authorizations, domestic or foreign, necessary to
the ownership of their property or to the conduct of their respective
businesses, which if violated or not obtained might have a Material Adverse
Effect (collectively, the "Licenses"). Neither the Company nor any Subsidiary
has finally been denied any application for any such Licenses. Without limiting
the generality of the foregoing, the Company and its Subsidiaries, (i) have all
Licenses from Governmental Entities required for the operation of the facilities
being operated on the date hereof by the Company or any of its Subsidiaries,
(ii) have duly and currently filed all reports and other information required to
be filed by any other Governmental Entity in connection with such Licenses and
(iii) are not in violation of any of such Licenses, other than the lack of
Licenses, delays in filing reports or possible violations that, individually or
in the aggregate, have not had and, insofar as can reasonably be foreseen by the
Company, in the future are not reasonably likely to have, a Material Adverse
Effect.
(d) The Company and its Subsidiaries have not made any misstatements of
fact, or omitted to disclose any fact, to any Governmental Entity, or taken or
failed to take any action, which misstatements or omissions, actions or failures
to act, individually or in the aggregate, subject or would subject any Licenses
held by the Company to revocation or failure to renew, except where such
revocation or failure to renew, individually or in the aggregate, does not and
would not be reasonably likely to have a Material Adverse Effect.
4.10 Litigation. Except as disclosed in the Company SEC Reports or in Section
4.10 of the Company Disclosure Schedule, there is no legal action, suit,
arbitration or other legal, administrative or other governmental investigation,
inquiry or proceeding (whether federal, state, local or foreign) pending or, to
the best of the Company's knowledge, threatened against or affecting the Company
or any Subsidiary of the Company or any of their respective properties, assets
or businesses which, either individually or in the aggregate, would reasonably
be expected to have a Material Adverse Effect or prevent or materially delay the
consummation of the transactions contemplated by this Agreement. To the best of
the Company's knowledge, there are no facts which might result in or form the
basis for any such action, suit, arbitration, investigation, inquiry or other
proceeding. Except as set forth on Section 4.10 of the Company Disclosure
Schedule, neither the Company nor any Subsidiary of the Company is subject to
any order, writ, judgment, Injunction, decree, determination or award of any
Governmental Entity.
4.11 Material Contracts. Neither the Company nor any of its Subsidiaries is in
default (or would be in default with notice or lapse of time, or both) under, is
in violation (or would be in violation with notice or lapse of time, or both)
of, or has otherwise breached, any Contract including, without limitation, any
Material Contract (as defined below), whether or not such default has been
waived, which default, alone or in the aggregate with all other such defaults,
would reasonably be expected to have a Material Adverse Effect. Section 4.11 of
the Company Disclosure Schedule contains a complete and correct list as of the
date hereof of each Contract of the following types, written or oral, to which
the Company or any of its Subsidiaries is a party or by which they or any of
their assets are bound: (a) mortgages, indentures, security agreements,
guarantees, pledges and other agreements and instruments relating to the
borrowing of money or extension of credit, including the maximum amount of
Indebtedness available to the Company and its Subsidiaries thereunder and, in
each case, the amount of outstanding Indebtedness thereunder on the date of this
Agreement; (b) employment, severance and consulting agreements
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(other than any such agreements that are terminable without liability or penalty
on 30 days' or less notice); (c) licenses of patent, trademark and other rights
relating to any Intellectual Property (other than standard licenses relating to
commercially available software) and any other licenses, permits and
authorizations relating to the businesses of the Company and its Subsidiaries
(whether as licensor or licensee) that involve by their terms a per annum
payment in excess of $150,000 or resulted in a payment obligation in excess of
$150,000 in the fiscal year ended June 30, 1999; and (d) joint venture or
partnership contracts or agreements ((a) through (d) collectively, "Material
Contracts"). Prior to the date hereof, the Company has delivered to Parent and
Liberty Media or their representatives complete and correct copies of all
written Material Contracts together will all amendments thereto, and accurate
descriptions of all non-written Material Contracts. Each Material Contract is in
full force and effect and is binding upon the Company or one or more of its
Subsidiaries, as the case may be, and, to the best of the Company's knowledge,
is binding upon such other parties, in each case in accordance with its terms.
Except as disclosed in Section 4.11 of the Company Disclosure Schedule, there
are no material unresolved disputes involving the Company or any of its
Subsidiaries under any Material Contract.
4.12 Absence of Undisclosed Liabilities.
(a) Except as disclosed in Section 4.12 of the Company Disclosure
Schedule and except for Indebtedness, obligations or liabilities that are
reflected or reserved against as set forth in the Company SEC Reports (including
the notes to the financial statements included therein), neither the Company nor
any of its Subsidiaries has any debt, obligation or liability (whether accrued,
absolute, contingent, liquidated or otherwise, whether due or to become due and
whether or not known to the Company) arising out of any transaction entered into
at or prior to the Effective Time, or any act or omission at or prior to the
Effective Time, or any state of facts existing at or prior to the Effective
Time, except (a) for debts, obligations or liabilities incurred in the ordinary
course of business since June 30, 1999, none of which (individually or in the
aggregate) would reasonably be expected to have a Material Adverse Effect and
(b) for liabilities and obligations arising under this Agreement.
(b) Except as disclosed in Section 4.12 of the Company Disclosure
Schedule and except for liabilities that are reflected or reserved against in
the most recent financial statements included in the Company SEC Reports,
neither the Company nor any of its Subsidiaries has any tax liability with
respect to or based upon any transactions or events occurring at or prior to the
Effective Time, including, without limitation, unfunded past service liabilities
under any pension, profit sharing or similar plan.
4.13 Labor Relations and Employment.
(a) Except as set forth in Section 4.13(a) of the Company Disclosure
Schedule, (i) there is no labor strike, dispute, slowdown, stoppage or lockout
actually pending, or, to the best of the Company's knowledge, threatened against
the Company or any of its Subsidiaries, and during the past three years there
has not been any such action; (ii) to the best of the Company's knowledge, there
are no union claims to represent the employees of the Company or any of its
Subsidiaries; (iii) neither the Company nor any of its Subsidiaries is a party
to or bound by any collective bargaining or similar agreement with any labor
organization, or work rules or practices
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agreed to with any labor organization or employee association applicable to
employees of the Company or any of its Subsidiaries; (iv) none of the employees
of the Company or any of its Subsidiaries is represented by any labor
organization and the Company does not have any knowledge of any current union
organizing activities among the employees of the Company or any of its
Subsidiaries, nor does any question concerning representation exist concerning
such employees; (v) the Company and its Subsidiaries are, and have at all times
been, in compliance with all applicable laws respecting employment and
employment practices, terms and conditions of employment, wages, hours of work,
occupational safety and health, equal opportunity, collective bargaining and
payment of social security and other taxes, and are not engaged in any
discriminatory employment practices or unfair labor practices as defined in the
National Labor Relations Act or other applicable law, ordinance or regulation;
(vi) there is no unfair labor practice charge or complaint against the Company
or any of its Subsidiaries pending or, to the best of the Company's knowledge,
threatened before the National Labor Relations Board or any similar Governmental
Entity; (vii) no grievance has been filed, or to the best of the Company's
knowledge, threatened to be filed, against the Company or any of its
Subsidiaries arising out of any collective bargaining agreement or employment
agreement or other grievance procedure; (viii) no charges with respect to or
relating to the Company or any of its Subsidiaries are pending before the Equal
Employment Opportunity Commission or any other Governmental Entity responsible
for the prevention of unlawful employment practices; (ix) neither the Company
nor any of its Subsidiaries has received notice of the intent of any
Governmental Entity responsible for the enforcement of labor or employment laws
to conduct an investigation with respect to or relating to the Company or any of
its Subsidiaries and no such investigation is in progress; (x) there are no
complaints, lawsuits or other proceedings pending or, to the best of the
Company's knowledge, threatened in any forum by or on behalf of any present or
former employee of the Company or any of its Subsidiaries alleging breach of any
express or implied contract of employment, any law or regulation governing
employment or the termination thereof or other discriminatory, wrongful or
tortious conduct in connection with the employment relationship; and (xi) there
has been no "mass layoff" or "plant closing," each as defined by the Worker
Adjustment and Retraining Notification Act or any similar state or local "plant
closing" law, with respect to the current or former employees of the Company and
its Subsidiaries.
(b) The Company is not aware that any officer or key employee, or that
any group of key employees, intends to terminate their employment with the
Company or any of its Subsidiaries, nor does the Company have a present
intention to terminate the employment of any of the foregoing.
4.14 Employee Benefit Plans.
(a) Section 4.14(a) of the Company Disclosure Schedule sets forth: (i)
all "employee benefit plans", as defined in Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), and all other
material employee benefit arrangements (including any trusts maintained for such
arrangements), including, without limitation, any such arrangements providing
severance pay, sick leave, vacation pay, salary continuation for disability,
retirement benefits, deferred compensation, bonus pay, incentive pay, stock
options, hospitalization insurance, medical insurance, life insurance,
scholarships or tuition reimbursements, maintained by the Company or any of its
Subsidiaries or to which the Company or any of its Subsidiaries is obligated to
contribute thereunder for current or former employees of
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the Company and its Subsidiaries (the "Company Plans"). Neither the Company nor
any trade or business (whether or not incorporated) which is or has ever been
under control or treated as a single employer ("ERISA Affiliate") with the
Company under Section 414(b) or (c), of the Internal Revenue Code of 1986, as
amended (the "Code") maintains, or has contributed or been obligated to
contribute, during the last six years to "employee pension benefit plans," as
defined in Section 3(2) of ERISA which is subject to Title IV of ERISA or
Section 412 of the Code.
(b) Except as set forth in Section 4.14(a) of the Company Disclosure
Schedule, none of the Company Plans or Pension Plans is a multiemployer plan, as
defined in Section 3(37) of ERISA ("Multiemployer Plan"), and neither the
Company nor any ERISA Affiliate has completely or partially withdrawn from any
Multiemployer Plan with respect to which the Company or any ERISA Affiliate has
any unsatisfied withdrawal liability, nor has any of them incurred any
unsatisfied liability due to the termination or reorganization of a
Multiemployer Plan; and with respect to each Pension Plan that is a
Multiemployer Plan: (i) none of the Company, any of its Subsidiaries nor any
ERISA Affiliate would be subject to any withdrawal liability under Part I of
Subtitle E of Title IV of ERISA if, as of the close of the most recent fiscal
year of any such plan, the Company or any of its subsidiaries or any of their
respective ERISA Affiliates were to experience a complete withdrawal from such
plan; (ii) to the Company's knowledge, none of the Company, any of its
Subsidiaries, nor any of their respective ERISA Affiliates has received any
notification, nor has any reason to believe, that such Multiemployer Plan is in
reorganization, has been terminated, is insolvent, or may reasonably be expected
to be in reorganization, to be insolvent, or to be terminated; and (iii) the
Company and its ERISA Affiliates have made all contributions to such
Multiemployer Plan that they are required to make under the terms of such plan
or under any applicable law or contract, except in the case of clauses (i), (ii)
and (iii), which would not reasonably be expected to have a Material Adverse
Effect.
(c) Each Company Plan that is intended to qualify under Section 401 of
the Code is the subject of a favorable determination letter from the Internal
Revenue Service to the effect that such Company Plan is qualified and exempt
from Federal income taxes under Sections 401(a) and 501(a) of the Code, and
nothing has occurred with respect to the operation of any such Company Plan that
could cause the loss of such qualification or exemption or the imposition of any
liability, penalty or tax under ERISA or the Code.
(d) All contributions (including all employer contributions and
employee salary reduction contributions) required to have been made under any of
the Company Plans or by law to any funds or trusts established thereunder or in
connection therewith have been made by the due date thereof (including any valid
extension), and all contributions for any period ending on or before the
Effective Time which are not yet due will have been paid or accrued on or prior
to the Effective Time.
(e) There has been no violation of ERISA or the Code with respect to
the filing of applicable reports, documents and notices regarding the Company
Plans with the Secretary of Labor or the Secretary of the Treasury or the
furnishing of required reports, documents or notices to the participants or
beneficiaries of such Company Plans which could result in a material liability
to the Company.
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(f) True, correct and complete copies of the following documents, with
respect to each of the Company Plans, have been delivered to Parent and Liberty
Media by the Company or are publicly available: (i) all plans and related trust
documents, and amendments thereto; (ii) the most recent Forms 5500; (iii) the
last IRS determination letter; (iv) summary plan descriptions; (v) the most
recent actuarial report relating to such Company Plans; and (vi) written
descriptions of all non-written agreements relating to such Company Plans.
(g) There are no pending actions, claims or lawsuits which have been
asserted or instituted against the Company Plans, the assets of any of the
trusts under such plans or the plan sponsor or the plan administrator, or
against any fiduciary of such Company Plans with respect to the operation of
such plans (other than routine benefit claims), nor does the Company have
knowledge of facts which could form the basis for any such claim or lawsuit.
(h) All amendments and actions required to bring the Company Plans into
conformity in all material respects with all of the applicable provisions of
ERISA, the Code and other applicable laws have been made or taken except to the
extent that such amendments or actions are not required by law to be made or
taken until a date after the Effective Time.
(i) The Company Plans have been maintained, in all material respects,
in accordance with their terms and with all provisions of ERISA and the Code
(including rules and regulations thereunder) and other applicable federal and
state laws and regulations, and neither the Company, any of its Subsidiaries,
nor, to the best of the Company's knowledge, any "party in interest" or
"disqualified person" with respect to such Company Plans has engaged in a
"prohibited transaction" within the meaning of Section 406 of ERISA or 4975 of
the Code. No fiduciary has any liability for breach of fiduciary duty or any
other failure to act or comply in connection with the administration or
investment of the assets of any such Company Plan.
(j) None of the Company Plans provides retiree life or retiree health
benefits except as may be required under Section 4980B of the Code or Section
601 of ERISA or applicable state law and at the expense of the participant or
the participant's beneficiary. The Company and the ERISA Affiliates have at all
times complied with the notice and health care continuation requirements of
Section 4980B of the Code and Sections 601 through 608 of ERISA.
(k) Except as set forth in Section 4.14(k) of the Company Disclosure
Schedule or as expressly provided under the terms of this Agreement, none of the
execution and delivery of this Agreement, the consummation of the transactions
contemplated hereby or any other transactions involving the Company, Parent,
Merger Sub, Liberty Media and/or any of the Company's stockholders will (i)
result in any payment becoming due to any employee (current, former or retired)
of the Company or any of its Subsidiaries, (ii) increase any benefits otherwise
payable under any Company Plan, (iii) result in the acceleration of the time of
payment or vesting of any benefits under any such Company Plan, (iv) qualify as
a "change of control" or similar event under any such Company Plan or (v) result
in any payment becoming due to any employee that may be nondeductible under
Section 162(m) or Section 280G of the Code.
(l) Except as set forth in Section 4.14(l) of the Company Disclosure
Schedule, no stock or other security issued by the Company or any Affiliate
forms or has formed a material part of the assets of any Company Plan.
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4.15 FCC Matters.
(a) A complete and accurate list of the licenses and authorizations
issued by the FCC and held by the Company or any Subsidiary of the Company (the
"FCC Licenses") is set forth in Section 4.15 of the Company Disclosure Schedule.
The FCC Licenses are in full force and effect and unimpaired by any condition
that could have a Material Adverse Effect. No application, complaint, action or
proceeding is pending or, to the best of the Company's knowledge, threatened,
that may result in the revocation, modification, non-renewal or suspension of
any FCC License or the imposition of any administrative or judicial sanction
with respect to any FCC License. Neither the Company nor any other Subsidiary of
the Company has knowledge of any failure by the Company or any of its
Subsidiaries to comply in all material respects with the terms and conditions of
the FCC Licenses, and all applicable rules, regulations and policies of the FCC
and requirements of the Communications Act of 1934, as amended.
(b) The equipment which is operated pursuant to the FCC Licenses is
operated in all material respects in compliance with the rules, regulations and
policies of the FCC and requirements of the Communications Act of 1934, as
amended.
(c) Neither the Company nor any Subsidiary of the Company is aware of
any facts or circumstances that are likely to prevent or delay prompt approval
by the FCC of the transactions contemplated by this Agreement.
4.16 Real Property.
(a) Section 4.16(a) of the Company Disclosure Schedule contains a
complete and accurate list of all real property owned in whole or in part,
directly or indirectly, by the Company or its Subsidiaries (the "Owned Real
Property"). The Company has good and marketable title in fee simple to all of
the Owned Real Property, free and clear of all liens, encumbrances, charges,
mortgages, judgments and hypothecations, whether recorded or unrecorded. None of
the Owned Real Property is subject to any right or option of any other Person to
purchase or lease or otherwise obtain title to or an interest in such real
property. No Person other than the Company or any of its Subsidiaries has any
right to use, occupy or lease any of the Owned Real Property or Leased Real
Property (as defined in subsection (b) of this Section 4.16). Section 4.16(a) of
the Company Disclosure Schedule contains an accurate and complete list of all
Owned Real Property leased in whole or in part by the Company as landlord. True
and complete copies of all leases, including all modifications, and amendments
thereto, listed in Section 4.16(a) of the Company Disclosure Schedule have been
delivered to Parent and Liberty Media. All of the buildings, improvements,
structures and appurtenances situated on the Owned Real Property are owned by
the Company or one if its Subsidiaries and are in all material respects in good
operating condition, normal wear and tear excepted. Except as set forth in
Section 4.16(a) of the Company Disclosure Schedule, no condemnation or similar
proceeding is pending or, to the best of the Company's knowledge, threatened
that would preclude or impair the use of any such property or any improvement
thereon by the Company or any of its Subsidiaries for the purpose for which it
is currently used. There is no material latent or patent structural, mechanical
or other significant defect, soil condition or deficiency in any of the
improvements located on any of the Owned Real Property or, to the best of the
Company's knowledge, the Leased Real Property.
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(b) Section 4.16(b) of the Company Disclosure Schedule lists all real
property leased by the Company or its Subsidiaries as well as the commencement
and expiration dates of all leases relating thereto (the "Leased Real
Property"). True and complete copies of all leases, including all modifications
and amendments thereto, listed in Section 4.16(b) of the Company Disclosure
Schedule have been delivered to Parent and Liberty Media. The Company or one of
its Subsidiaries has a valid and existing lease or sublease for each property
subsumed within the Leased Real Property. All leases covering any of the Leased
Real Property are valid and enforceable by the Company or one of its
Subsidiaries, as the case may be, in accordance with their respective terms, are
in full force and effect, and have not been modified, supplemented or terminated
except as set forth in Section 4.16(b) of the Company Disclosure Schedule, and
there is not under any such lease any default by the Company or any of its
Subsidiaries or, to the best of the Company's knowledge, by any landlord or
lessor under any such lease. All third party consents required in respect of the
Owned Real Property or Leased Real Property in order to consummate the
transactions contemplated by this Agreement, each of which consents are
described in Section 4.16(b) of the Company Disclosure Schedule, have been or
will be obtained by the Closing Date. The facilities and real properties covered
by the Leased Real Property and included in the Owned Real Property constitute
all of the facilities and real properties presently used by the Company or its
Subsidiaries.
(c) Except as set forth in Section 4.16(c) of the Company Disclosure
Schedule, any increase in real property taxes due to the acquisition of Owned
Real Property by the Company is reflected in the most recent financial
statements included in the Company SEC Reports. Section 4.16(c) of the Company
Disclosure Schedule accurately states the assessed values for purposes of
property taxes of the Owned Real Property.
4.17 Condition of Properties. Except as would not reasonably be
expected to have a Material Adverse Effect, all facilities, machinery,
equipment, fixtures, vehicles and other properties owned, leased or used by the
Company and its Subsidiaries are in good operating condition and repair, are
reasonably fit and usable for the purposes for which they are being used, are
adequate and sufficient for the Company's or such Subsidiary's business and
conform in all material respects with all applicable ordinances, regulations and
laws.
4.18 Environmental Matters.
(a) Except as set forth in Section 4.18 of the Company Disclosure
Schedule and except as would not reasonably be expected to have a Material
Adverse Effect:
(i) The Company and its Subsidiaries (i) are in substantial
compliance with all Environmental and Health Laws; (ii) have obtained all
necessary Environmental Permits, all of which are in full force and effect; and
(iii) are in substantial compliance with all terms and conditions of such
Environmental Permits.
(ii) Neither the Company nor any of its Subsidiaries has
violated or done any act which could give rise to liability under, or have
otherwise failed to act in a manner which would expose any of them to liability
under, any Environmental and Health Law.
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(iii) No Hazardous Material has been released, spilled, discharged,
dumped, disposed of, or otherwise come to be located in, at, beneath or near any
of the Owned Real Property or Leased Real Property including properties formerly
owned, operated or otherwise controlled by the Company or any of its
Subsidiaries (during the period of the Company's or such Subsidiaries'
ownership, operation or control thereof) in such manner as would reasonably be
expected to result in environmental liability to the Company or any of its
Subsidiaries.
(iv) There have been and are no: (i) aboveground or underground storage
tanks; (ii) surface impoundments for Hazardous Materials; or (iii) friable
asbestos or asbestos-containing materials or polychlorinated biphenyl ("PCB") or
PCB-containing equipment, located within any portion of the Owned Real Property
or Leased Real Property.
(v) No Liens have been placed upon any Owned Real Property or Leased
Real Property in connection with any actual or alleged liability under any
Environmental and Health Law.
(vi) Neither the Company nor any of its Subsidiaries has received any
written notice, claim, demand, suit or request for information from any
Governmental Entity or private entity with respect to any liability or alleged
liability under any Environmental Law, nor has any entity previously owned,
operated, or otherwise controlled by the Company or its Subsidiaries whose
liability, in whole or in part, may be attributed to the Company or any of its
Subsidiaries, received any such notice, claim, demand, suit or request for
information; neither the Company nor any of its Subsidiaries has ongoing
negotiations with or agreements with any Governmental Entity or other Person or
entity relating to any Remedial Action or other claim arising under or related
to any Environmental and Health Law.
(vii) Neither the Company nor any of its Subsidiaries has disposed, or
arranged for the disposal, of any Hazardous Materials at any facility that is or
has ever been the subject of investigation or response action under the
Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C.
(S) 9601 et seq., Resource Conservation and Recovery Act, 42 U.S.C. (S) 6901 et
seq., or any state law of similar effect.
(viii) The Company has provided to Parent and Liberty Media all
environmental studies and reports pertaining to the Owned Real Property or
Leased Real Property including properties formerly owned, operated or otherwise
controlled by the Company or any of its Subsidiaries and the improvements
thereon which studies and reports they are aware of, have commissioned or have
in their possession. To the best of the Company's knowledge, such studies and
reports do not contain any inaccuracies resulting from, in whole or in part, any
material misrepresentation of the Company.
For purposes of this Agreement, the following terms shall have
the following meanings:
"Environmental and Health Laws" shall mean all applicable
federal, state and local environmental, health and safety laws, statutes,
ordinances, rules and regulations of any governmental or other regulatory
authority of the United States relating to (i) discharges to surface water or
ground water, (ii) solid or liquid waste disposal, (iii) the use, storage,
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generation, handling, transport, discharge, release or disposal of Hazardous
Materials, (iv) the emission of non-ionizing electromagnetic radiation or (v)
the protection of health, safety or the environment, including without
limitation, all matters set forth in the Comprehensive Environmental Response
Compensation and Liability Act of 1980 as amended by the Superfund Amendments
and Authorization Act of 1986; the Occupational Safety and Health Act; the
Resource Conservation Recovery Act of 1976; the Federal Water Pollution Control
Act of 1970; the Safe Drinking Water Act of 1974; the Toxic Substances Control
Act of 1976; the Emergency Planning Community Right to Know Act of 1986, as
amended; and the Clean Air Act, as amended.
"Environmental Permits" shall mean all permits, licenses,
approvals, authorizations, consents or registrations required under any
applicable Environmental and Health Law.
"Hazardous Materials" shall mean any chemicals, pollutants,
contaminants, wastes, toxic substances, hazardous substances, hazardous
materials, hazardous wastes, radioactive materials, petroleum or petroleum
products, and other materials regulated as hazardous materials under applicable
laws.
"Remedial Action" shall mean any action required to: (i) clean
up, remove or treat Hazardous Materials; (ii) prevent a release or threat of
release of any Hazardous Material; (iii) perform pre-remedial studies,
investigations or post-remedial monitoring and care; or (iv) cure a violation of
Environmental and Health Law.
4.19 Intellectual Property.
(a) Section 4.19(a) of the Company Disclosure Schedule sets forth a
complete list of registrations/patents or applications therefor pertaining to
the Intellectual Property, the dates of application/issuance and the relevant
jurisdictions. Except as described on Sections 4.19(a), (b) or (c) of the
Company Disclosure Schedule, the Company or one of its Subsidiaries owns or, to
the best of the Company's knowledge, has the valid right to use, free and clear
of all liens and other encumbrances or claims of any nature, all of the
Intellectual Property necessary for the conduct of the business of the Company
or any of its Subsidiaries. Except as described on Schedule 4.19(a), (b) or (c),
all Intellectual Property listed on Section 4.19(a) of the Company Disclosure
Schedule is valid, subsisting, unexpired, and enforceable and all renewal fees
and other maintenance fees that have fallen due on or prior to the effective
date of this Agreement have been paid.
(b) Except as set forth in Section 4.19(b) of the Company Disclosure
Schedule, there is no claim, suit, action or proceeding pending or, to the best
of the Company's knowledge, threatened against the Company or one of its
Subsidiaries (and, to the best of the Company's knowledge, no grounds therefor):
(i) alleging that the Company's or any of the Company's Subsidiaries' respective
business or operations, as currently conducted, including, without limitation,
the marketing, sale and provision by the Company or any of its Subsidiaries of
all products and services marketed, sold or made conflict or infringe with any
third party's proprietary rights; or (ii) challenging the Company or one of its
Subsidiaries' ownership or use, or the validity or enforceability of any
Intellectual Property that is necessary for the conduct of
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the business of the Company or any of its Subsidiaries. Except as set forth in
Schedule 4.19(b) of the Company Disclosure Schedule there is no claim, suit,
action or proceeding pending or, to best of the Company's knowledge, threatened
by the Company or one of its Subsidiaries, alleging any third party's
intellectual property rights conflict or infringe the Intellectual Property of
the Company or one of its Subsidiaries.
(c) Section 4.19(c) of the Company Disclosure Schedule sets forth a
complete and accurate list of all:
(i) licenses, sublicenses and other agreements in which the Company
or one of its Subsidiaries grants rights to any Person to use the Intellectual
Property; and (ii) consents, indemnifications, forbearances to xxx, settlement
agreements or cross-licensing arrangements relating to the Intellectual Property
or the intellectual property of any third party to which the Company or one of
its Subsidiaries is a party. Except as set forth in Section 4.19(c) of the
Company Disclosure Schedule, neither the Company nor any of its Subsidiaries is
under any obligation to pay royalties or similar payments in connection with any
license, nor will the Company or any of its Subsidiaries be, as a result of the
execution and delivery of this Agreement or the performance of its obligations
hereunder in breach of any license, sublicense or other agreement relating to
the Intellectual Property.
(d) Except as set forth in Section 4.19(d) of the Company
Disclosure Schedule, no former or present employee, officer or director of the
Company or any of its Subsidiaries holds any right or title, directly or
indirectly, in whole or in part, in or to any Intellectual Property.
(e) The Company or one of its Subsidiaries owns or has the right to
use all computer software, software systems and databases and all other
information systems currently used in the business of the Company or any of its
Subsidiaries and necessary for the conduct of the business of the Company or any
of its Subsidiaries, including, without limitation, all such computer software
used in the business of the Company on personal computers by employees of the
Company or any of its Subsidiaries.
For purposes of this Agreement, "Intellectual Property" shall
mean all of the following, owned or used in the business of the Company or any
of its Subsidiaries: (i) trademarks and service marks (registered or
unregistered), trade dress, trade names and other names and slogans embodying
business or product goodwill or indications of origin, all applications or
registrations in any jurisdiction pertaining to the foregoing and all goodwill
associated therewith; (ii) patents, patentable inventions, discoveries,
improvements, ideas, know-how, formula methodology, processes, technology and
computer programs, software and databases (including source code, object code,
development documentation, programming tools, drawings, specifications and data)
and all applications or registrations in any jurisdiction pertaining to the
foregoing, including all reissues, continuations, divisions, continuations-in-
part, renewals or extensions thereof; (iii) trade secrets, including
confidential and other non-public information, and the right in any jurisdiction
to limit the use or disclosure thereof; (iv) copyrights in writings, designs,
mask works or other works, and applications or registrations in any jurisdiction
for the foregoing; (v) database rights; (vi) Internet Web sites, domain names
and registrations or applications for registration thereof; (vii) licenses,
immunities, covenants not to xxx and the like relating to any of the foregoing;
(viii) books and records described or used in
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connection with any of the foregoing; and (ix) claims or causes of action
arising out of or related to infringement or misappropriation of any of the
foregoing.
4.20 Tax Matters.
(a) (i) There has been duly filed by or on behalf of the Company and
each of its Subsidiaries (and each of their respective predecessors, if any), or
filing extensions from the appropriate federal, state, foreign and local
Governmental Entities have been obtained with respect to, all federal, state,
foreign and local tax returns and reports required to be filed on or prior to
the date hereof; (ii) payment in full or adequate provision for the payment of
all taxes required to be paid in respect of the periods covered by such tax
returns and reports has been made, except where the failure to so pay or make
such adequate provision has not had, and would not be reasonably likely to have,
a Material Adverse Effect; (iii) a reserve which the Company reasonably believes
to be adequate has been set up for the payment of all such taxes anticipated to
be payable in respect of periods through the most recent fiscal quarter end,
except where the failure to establish adequate reserves has not had and would
not be reasonably likely to have a Material Adverse Effect; (iv) except as
described in Section 4.20(a)(iv) of the Company Disclosure Schedule, none of the
income tax returns required to be filed by or on behalf of the Company and each
of its Subsidiaries consolidated in such returns (and their respective
predecessors, if any) (the "Consolidated Returns") have been examined by or
settled with the Internal Revenue Service ("IRS") or other Governmental Entity;
(v) except as described on Section 4.20(a)(v) of the Company Disclosure
Schedule, there are no material "deferred intercompany transactions" or
"intercompany transactions," the gain or loss in which has not yet been taken
into account under the Consolidated Returns; (vi) except as describe on Section
4.20(a)(vi) of the Company Disclosure Schedule, there are no liens for taxes on
the assets of the Company and each of its Subsidiaries, except for statutory
liens for current taxes not yet due and payable (and except for liens which do
not and would not, individually or in the aggregate, have a material adverse
effect on the Company); and (vii) except as described in Section 4.20(a)(vii) of
the Company Disclosure Schedule, there have been no claims or assessments
against the Company or any of its Subsidiaries asserted in writing by any
Governmental Entity with respect to any alleged deficiency in any tax. For the
purpose of this Agreement, the term "tax" (including, with correlative meaning,
the terms "taxes" and "taxable") shall include all federal, state, local and
foreign income, profits, franchise, gross receipts, payroll, sales, employment,
use, property, withholding, excise and other taxes, duties or assessments of any
nature whatsoever, together with all interest, penalties and additions imposed
with respect to such amounts. The term "tax return" means a report, return or
other information required to be supplied to or filed with a Governmental Entity
with respect to any tax including an information return, claim for refund,
amended tax return or declaration of estimated tax.
(b) Except as described on Section 4.20(b) of the Company Disclosure
Schedule, neither the Company nor any of its Subsidiaries (i) is a party to any
tax allocation or tax sharing agreement, (ii) has been a member of an affiliated
group filing a consolidated federal income tax return other than a group the
common parent of which was the Company, or (iii) has any liability for taxes of
any Person (other than the Company and its Subsidiaries) under Reg.
Section 1.1502-6 (or any similar provision of state, local or foreign law), as
transferee or successor, by contract or otherwise.
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4.21 Insurance. The Company and its Subsidiaries and their respective properties
are insured in such amounts, against such losses and with such insurers as are
prudent when considered in light of the nature of the properties and businesses
of the Company and its Subsidiaries. Section 4.21 of the Company Disclosure
Schedule sets forth a complete and accurate list of the insurance policies of
the Company and its Subsidiaries as in effect on the date hereof, including in
each case the applicable coverage limits, deductibles and the policy expiration
dates. No notice of any termination or threatened termination of any of such
policies has been received by the Company or any of its Subsidiaries and such
policies are in full force and effect.
4.22 Transactions with Related Parties. Except as set forth in Section 4.22 of
the Company Disclosure Schedule or in the Company SEC Reports, neither the
Company nor any Subsidiary of the Company is a party to any agreement with any
of the Company's directors, officers or, to the best of the Company's knowledge,
shareholders or, to the best of the Company's knowledge, any Affiliate or family
member of any of the foregoing under which it: (i) leases any real or personal
property (either to or from such Person), (ii) licenses real or personal
property or Intellectual Property (either to or from such Person), (iii) is
obligated to purchase any tangible or intangible asset from or sell such asset
to such Person, (iv) purchases products or services from such Person, (v) has
borrowed money from or loaned money to such Person or (vi) permits such Person
to use any personal property of the Company or any of its Subsidiaries for
personal purposes. Except as set forth in Section 4.22 of the Company Disclosure
Schedule or in the Company SEC Reports, neither the Company nor any Subsidiary
employs as an employee or engages as a consultant any family member of any of
the Company's directors, officers or, to the best of the Company's knowledge,
shareholders. To the best of the Company's knowledge and except as set forth in
Section 4.22 of the Company Disclosure Schedule, there exist no agreements among
shareholders of the Company, except as contemplated by the Voting Agreements, to
act in concert with respect to their voting or holding of Company securities.
4.23 Interest in Competitors. Neither the Company, nor any or its Subsidiaries,
nor, to the best of the Company's knowledge, any of their respective officers or
directors, has any interest, either by way of contract or by way of investment
(other than as holder of not more than 2% of the outstanding capital stock of a
publicly traded Person) or otherwise, directly or indirectly, in any Person
other than the Company and its Subsidiaries that (i) provides any services or
designs, produces or sells any product or product lines or engages in any
activity similar to or competitive with any activity currently proposed to be
conducted by the Company or any of its Subsidiaries or (ii) has any direct or
indirect interest in any asset or property, real or personal, tangible or
intangible, of the Company.
4.24 Brokerage. Other than with respect to fees payable to Lazard Freres & Co.,
LLC ("Lazard Freres"), there are no claims for brokerage commissions or finder's
fees or similar compensation in connection with the transactions contemplated by
this Agreement based on any arrangement made by or on behalf of the Company or
any of its Subsidiaries and the Company agrees to indemnify and hold Parent,
Liberty Media, Merger Sub and their respective Affiliates harmless from and
against any and all claims, liabilities or obligations with respect to any other
such fees, commissions, expenses or claims for indemnification or contribution
asserted by any Person on the basis of any act or statement made or alleged to
have been made by the Company or any of its Subsidiaries, directors, officers,
employees or Affiliates in connection with this Agreement or any transaction
provided for or described herein.
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4.25 Disclosure. None of the information with respect to the Company or its
Subsidiaries to be included or incorporated by reference in the Proxy Statement
or the Registration Statement will, at the time of the mailing of the Proxy
Statement, and at the time of the Special Meeting, contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in light of the
circumstances under which they are made, not misleading; provided, that the
foregoing representation shall not be applicable with respect to untrue
statements or omissions based solely upon information furnished to the Company
by Parent, Liberty Media or Merger Sub for use therein. The Proxy Statement will
comply as to form in all material respects with the provisions of the Exchange
Act and the rules and regulations thereunder. Prior to the date hereof, the
Company has provided or made available to Parent and Liberty Media or their
respective representatives complete and accurate copies of (i) all unredacted
minutes of meetings and written consents of the Company Board and committees
thereof for the period from January 1, 1997 through the date of this Agreement
and (ii) all documents and agreements, including any amendments, renewals or
modifications thereof, referenced in the schedules to this Agreement.
4.26 DGCL Section 203. As of the date hereof and at all times on or prior to the
Effective Time, the Company Board shall have approved the Merger, this
Agreement, the Voting Agreement and the transactions contemplated by this
Agreement, so as to render inapplicable hereto and thereto the limitations on
business combinations contained in Section 203 of the DGCL.
4.27 Company Action. The Company Board (at a meeting duly called and held) has
by unanimous vote of the directors (i) determined and declared that this
Agreement and the transactions that are the subject of this Agreement are
advisable and in the best interests of the Company and its stockholders, (ii)
recommended the approval of the transactions that are the subject of this
Agreement (including, without limitation, the Merger and the Voting Agreements)
and directed that the transactions that are the subject of this Agreement be
submitted for consideration by the Company's stockholders at the Special Meeting
(subject to its right to withdraw, modify or amend such recommendation and
direction solely as provided in Section 7.5 of this Agreement), and (iii)
adopted resolutions approving this Agreement and recommending approval and
adoption of this Agreement and the Merger by the stockholders of the Company.
4.28 Fairness Opinion. The Company Board has received the written opinion of
Lazard Freres to the effect that, as of the date hereof, the Merger
Consideration is fair, from a financial point of view, to the holders of the
Company Common Stock (the "Fairness Opinion"). The Company has provided, or
prior to the filing of the preliminary proxy statement will provide, Liberty
Media and Parent with a true and complete copy of the Fairness Opinion and will
include an executed copy of the Fairness Opinion in the Proxy Statement, and
will provide to Liberty and Parent prior to the mailing of the Proxy Statement a
letter from Lazard Freres, dated as of a recent date, reaffirming the Fairness
Opinion.
4.29 FIRPTA. The Company is not, and has not been at any time during the five
year period ending on the date of this Agreement, a United States real property
holding corporation within the meaning of Section 897(c)(2) of the Code.
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4.30 No Investment Company. The Company is not an "investment company" subject
to the registration requirements of, or regulation as an investment company
under, the Investment Company Act of 1940, as amended.
4.31 Employment Agreements. Section 4.31 of the Company Disclosure Schedule
contains a list of each of the executives that have employment agreements with
the Company (collectively, the "Employment Agreements"). Each of the Employment
Agreements is in full force and effect and none of the parties thereto are in
breach thereof.
4.32 Negative Assurances. To the Company's knowledge, the representations and
warranties of each signatory to the Voting Agreement, are, in each such case,
true and correct in all material respects.
4.33 Vote Required. The only vote of stockholders (or holders of Voting Debt) of
the Company required under the DGCL, American Stock Exchange requirements and
the Organization Documents in order to approve and adopt the Merger Proposal is
the affirmative vote of a majority of the total number of votes entitled to be
cast by the holders of the issued and outstanding shares of Company Common Stock
voting as a single class, and no other vote or approval of or other action by
the holders of any capital stock (or Voting Debt, options, warrants or other
securities) of the Company is required for such approval and adoption, or for
the consummation of any of the transactions contemplated hereby.
4.34 No Excise Tax Obligations. The Company does not have, and following the
consummation of the Merger the Surviving Entity will not have, any obligation to
make payments to any past or present employees of the Company or its
Subsidiaries or Affiliates as a result of the imposition of any excise taxes
pursuant to Section 4999 of the Code or the imposition of any excise or similar
taxes pursuant to any similar provision of state or local law.
4.35 British Telecommunications. As of the date hereof, the Company and its
Subsidiaries do not, directly or indirectly, beneficially own (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) any shares of any
class of capital stock of British Telecommunications plc, a company organized
under the laws of England and Wales ("BT"), or any of its Subsidiaries, or any
direct or indirect rights or options to acquire (through purchase, exchange,
conversion or otherwise) any shares of any class of capital stock of BT or any
of its Subsidiaries.
ARTICLE V.
REPRESENTATIONS AND WARRANTIES OF PARENT
Parent hereby makes the following representations and
warranties to the Company and, solely with respect to Sections 5.1 and 5.2, to
Liberty Media:
5.1 Organization and Qualification. Each of Parent and Merger Sub (i) is a
corporation duly incorporated, validly existing and in good standing under the
laws of the jurisdiction of its incorporation, (ii) has all requisite corporate
power and authority to own, lease and operate its properties and to carry on its
business as now being conducted and (iii) is duly qualified or licensed and is
in good standing to do business in each jurisdiction in which the properties
owned, leased or operated by it or the nature of its activities makes such
qualification necessary, except where the failure to be so duly qualified or
licensed and in good standing has not had and
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is not reasonably likely to have, individually or in the aggregate, a Parent
Material Adverse Effect.
5.2 Authorization and Validity of Agreement. This Agreement has been duly
executed and delivered by Parent and Merger Sub. Each of Parent and Merger Sub
has all requisite corporate power and authority to enter into this Agreement and
each of Parent and Merger Sub has all requisite corporate power and authority to
perform its obligations hereunder and to consummate the transactions
contemplated hereby. The execution, delivery and performance by Parent and
Merger Sub of this Agreement and the consummation by each of Parent and Merger
Sub of the transactions contemplated hereby have been duly and validly
authorized by all necessary corporate action on the part of Parent and Merger
Sub (including in the case of Merger Sub, approval and adoption of this
Agreement and the Merger by Parent, as the sole stockholder of Merger Sub). This
Agreement is a legal, valid and binding obligation of Parent and Merger Sub,
enforceable in accordance with its terms (except insofar as enforceability may
be limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting creditors' rights generally, or by principles governing
the availability of equitable remedies). The shares of Class A Liberty Media
Group Stock to be issued and delivered by Parent pursuant to Sections 2.3 and
2.4 will be, when the Merger has become effective and such shares are issued and
delivered as provided in Sections 2.3 and 2.4 duly authorized, validly issued,
fully paid and non-assessable and no stockholder of Parent will have any
preemptive right of subscription or purchase in respect thereof.
5.3 Capitalization of Parent. As of the date hereof, Parent's authorized capital
stock consists of 16,500,000,000 shares, consisting of (a) 100,000,000 preferred
shares, par value $1.00 per share ("Parent Preferred Stock"), and (b)
16,400,000,000 common shares, par value $1.00 per share, of which (i)
6,000,000,000 shares are Parent Common Stock, (ii) 4,000,000,000 shares are
Class A Liberty Media Group Stock, (iii) 400,000,000 shares are Class B Liberty
Media Group Stock and (iv) 6,000,000,000 shares are AT&T Wireless Group common
stock.
5.4 Ownership of Merger Sub; No Prior Activities; Assets of Merger Sub.
(a) Merger Sub was formed by Parent solely for the purpose of engaging
in the transactions contemplated hereby.
(b) As of the date hereof and the Effective Time, the capital stock of
Merger Sub is and will be owned 100% by Parent directly. Further, except as
contemplated by this Agreement and the Inter-Group Supplement, the Post-Merger
Restructuring Transactions and the Contribution Agreement, there are not as of
the date hereof, and there will not be at the Effective Time, any outstanding or
authorized options, warrants, calls, rights, commitments or any other agreements
of any character to or by which Merger Sub is a party or may be bound requiring
it to issue, transfer, sell, purchase, redeem or acquire any shares of capital
stock or any securities or rights convertible into, exchangeable for, or
evidencing the right to subscribe for or acquire, any shares of capital stock of
Merger Sub.
(c) As of the date hereof and immediately prior to the Effective Time,
except for agreements, obligations or liabilities entered into or incurred in
connection with its incorporation or organization and the transactions
contemplated hereby and by the Inter-Group Supplement,
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the Eighth Tax Sharing Amendment or any other documents referred to herein or
executed in connection herewith to which any of the Company or its Subsidiaries
or Affiliates is a party, Merger Sub has not and will not have incurred, any
obligations or liabilities or engaged in any business or activities of any type
or kind whatsoever or entered into any agreements or arrangements with any
Person.
(d) Parent will take all commercially reasonable actions necessary to
ensure that Merger Sub at no time prior to the Effective Time owns any material
assets other than an amount of cash necessary to incorporate Merger Sub and to
pay the expenses of the Merger attributable to Merger Sub if the Merger is
consummated. If, notwithstanding the foregoing sentence, any assets are
contributed to Merger Sub, Parent will take all commercially reasonable actions
necessary to ensure that no assets will be withdrawn from Merger Sub at any time
prior to the Effective Time.
(e) Attached hereto as Exhibit 5.4(e) is a copy of the bylaws of Merger
Sub as in effect on the Effective Date.
5.5 Information Supplied. None of the information concerning Parent or any of
its Subsidiaries supplied or to be supplied by Parent or Merger Sub for
inclusion or incorporation by reference in, and which is included or
incorporated by reference in, (i) the Registration Statement or any amendment or
supplement thereto filed or to be filed by Parent with the Commission under the
Securities Act in connection with the issuance of the Merger Consideration, or
(ii) any documents filed or to be filed with the Commission or any other
Governmental Entity in connection with the transactions contemplated hereby
(including, without limitation, the Proxy Statement) will, at the respective
times such documents are filed, and, in the case of the Registration Statement
or any amendment or supplement thereto, when the same becomes effective and at
the Effective Time, be false or misleading with respect to any material fact, or
omit to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading or necessary to correct any false or misleading
statement in any earlier communication.
ARTICLE VI.
REPRESENTATIONS AND WARRANTIES OF LIBERTY MEDIA
Liberty Media hereby makes the following representations and
warranties to Parent and the Company, in each case except as otherwise set forth
in the appropriate section of the disclosure schedule (the "Liberty Media
Disclosure Schedule"), dated as of the date of this Agreement and delivered by
Liberty Media to each of Parent and the Company:
6.1 Organization and Qualification. Liberty Media (i) is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation, (ii) has all requisite corporate power and
authority to own, lease and operate its properties and to carry on its business
as now being conducted and (iii) is duly qualified or licensed and in good
standing to do business in each jurisdiction in which the properties owned,
leased or operated by it or the nature of its activities makes such
qualification necessary, except in such jurisdictions where the failure to be so
duly qualified or licensed and in good standing has not had and is not
reasonably likely to have, individually or in the aggregate, a Liberty Media
Material Adverse
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Effect. As of June 30, 2000, (a) 2,374,272,992 shares of Class A Liberty Media
Group Stock were issued and outstanding, (b) 94,811,634 shares of Class A
Liberty Media Group Stock were reserved for issuance upon exercise of
outstanding options to purchase shares of Class A Liberty Media Group Stock, (c)
709,676 shares of Class A Liberty Media Group Stock were reserved for issuance
upon exercise of certain warrants to purchaser shares of Class A Liberty Media
Group Stock, (d) 212,058,452 shares of Class A Liberty Media Group Stock were
reserved for issuance upon the conversion of shares of Class B Liberty Media
Group Stock, (e) 206,234,452 shares of Class B Liberty Media Group Stock were
issued and outstanding and (f) 5,824,000 shares of Class B Liberty Media Group
Stock were reserved for issuance upon exercise of outstanding options to
purchase shares of Class B Liberty Media Group Stock.
6.2 Authorization and Validity of Agreement. This Agreement has been duly
executed and delivered by Liberty Media. Liberty Media has all requisite
corporate power and authority to enter into this Agreement and Liberty Media has
all requisite corporate power and authority to perform its obligations hereunder
and to consummate the transactions contemplated hereby. The execution, delivery
and performance by Liberty Media of this Agreement and the consummation by
Liberty Media of the transactions contemplated hereby have been duly and validly
authorized by all necessary corporate action on its part. This Agreement is a
legal, valid and binding obligation of Liberty Media, enforceable in accordance
with its terms (except insofar as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors' rights generally, or by principles governing the availability of
equitable remedies).
6.3 Ownership of Company Common Stock. As of the date hereof, neither Liberty
Media nor any Subsidiary or Affiliate of Liberty Media "owns", and has not since
such date "owned" (as such terms are defined in Section 203 of the DGCL), any
shares of Company Common Stock; provided that the foregoing representation is to
the best knowledge of Liberty Media with respect to shares of Company Common
Stock so "owned" by Liberty Media by virtue of the ownership of shares of
Company Common Stock by Liberty Media's "affiliates" or "associates" (as such
terms are defined in the DGCL).
6.4 Information Supplied. None of the information supplied or to be supplied by
Liberty Media relating to Liberty Media or any of its Subsidiaries or the
Liberty Media Group for inclusion or incorporation by reference in, and which is
included or incorporated by reference in, (i) the Registration Statement, or any
amendment or supplement thereto, filed or to be filed by Parent with the
Commission under the Securities Act in connection with the issuance of the
Merger Consideration (ii) any documents filed or to be filed with the Commission
or any other Governmental Entity in connection with the transactions
contemplated hereby (including, without limitation, the Proxy Statement) will,
at the respective times such documents are filed, and, in the case of the
Registration Statement or any amendment or supplement thereto, when the same
becomes effective and at the Effective Time, be false or misleading with respect
to any material fact, or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading or necessary to correct
any false or misleading statement in any earlier communication. The Registration
Statement, including any amendments or supplements thereto, will comply as to
form in all material respects with the provisions of the Securities Act.
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6.5 Liberty Media Group Information.
(a) The narrative information contained in the proxy statement of
Tele-Communications, Inc., dated January 8, 1999, with respect to the Liberty
Media Group (referred to in such proxy statement as the "New Liberty Media
Group"), giving effect to the transactions described in such proxy statement,
did not as of such date contain any untrue statement of a material fact, or omit
to state a material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading. The items of selected pro forma financial information with
respect to such "New Liberty Media Group" in such proxy statement, giving effect
to the transactions described in such proxy statement and on the basis described
therein, were accurate in all material respects as of the dates and for the
periods for which such information is presented.
(b) The narrative information contained in Parent's Annual Report on
Form 10-K for the fiscal year ended December 31, 1998 with respect to the
Liberty Media Group (referred to therein as the "Liberty/Ventures Group"),
giving effect to the acquisition of Tele-Communications, Inc. by Parent
described therein, the combination of the TCI Ventures Group referred to therein
with the predecessor of the Liberty Media Group, and the related transfers of
assets by the TCI Ventures Group in exchange for approximately $5.5 billion in
cash, did not as of the date such report was filed with the Commission contain
an untrue statement of a material fact, or omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
(c) Liberty Media has made available to the Company true and complete
copies of all Parent/Liberty Media Commission Filings filed prior to the date
hereof and agrees to provide the Company, upon request, with true and complete
copies of all Parent/Liberty Media Commission Filings filed after the date
hereof. As of their respective dates, each of the Parent/Liberty Media
Commission Filings complied and, in the case of filings after the date hereof,
will comply in all material respects with the applicable requirements of the
Securities Act, the Exchange Act and the rules and regulations under each such
Act, and none of the Parent/Liberty Media Commission Filings contained as of
such date any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading. When
filed with the Commission, the financial statements included in the
Parent/Liberty Media Commission Filings complied as to form in all material
respects with the applicable rules and regulations of the Commission and were
prepared in accordance with GAAP applied on a consistent basis (except as may be
indicated therein or in the notes or schedules thereto), and such financial
statements fairly present the consolidated financial position of the Liberty
Media Group as at the dates thereof and the consolidated results of their
operations and their consolidated cash flows for the periods then ended,
subject, in the case of the unaudited interim financial statements, to normal,
recurring year-end audit adjustments.
6.6 No Approvals or Notices Required; No Conflict with Instruments. Except as
set forth in Section 6.6 of the Liberty Media Disclosure Schedule, and assuming
in each case the accuracy, at all relevant times, of each of the representations
and warranties of the Company contained herein, the execution and delivery by
Liberty Media of this Agreement do not, and the performance by Liberty Media of
its obligations hereunder will not:
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(i) conflict with or violate the charter or bylaws, as currently in
effect, of Liberty Media or of any material corporate Subsidiary of Liberty
Media or the partnership agreement or other governing instrument of any material
Subsidiary of Liberty Media that is not a corporation;
(ii) require any Governmental Consent or any Governmental Filing by or
on behalf of Liberty Media or any Subsidiary of Liberty Media prior to the
Effective Time, except for (A) any such Governmental Consents and Governmental
Filings that have been or at or prior to the Effective Time shall be obtained or
made and (B) such other Governmental Consents and Government Filings the absence
or omission of which would not reasonably be expected, either individually or in
the aggregate, to have a Liberty Media Material Adverse Effect;
(iii) conflict with or result in any Violation of any material Contract
to which Liberty Media or any Subsidiary of Liberty Media is a party, or by
which the Liberty Media, any Subsidiary of Liberty Media or any of their
respective material assets or properties is bound or affected, except for any
such Violations as would not reasonably expected, either individually or in the
aggregate, to have a Liberty Media Material Adverse Effect; or
(iv) assuming that all Governmental Consents and Governmental Filings
contemplated by Section 6.6(ii) are obtained or made, conflict with or result in
a Violation of, under or pursuant to any law, rule, regulation, order, judgment
or decree applicable to Liberty Media or any Subsidiary of Liberty Media or by
which any of their respective material properties or assets are bound, except
for any such Violations as would not reasonably be expected, either individually
or in the aggregate, to have a Liberty Media Material Adverse Effect.
6.7 Absence of Certain Changes or Events. Except as set forth in Section 6.7 of
the Liberty Media Disclosure Schedule or otherwise disclosed in the Liberty
Media Group Information, since December 31, 1999, there has not been any adverse
change in, and no event has occurred and no condition exists, that, individually
or together with all such changes, events and conditions has had or, insofar as
Liberty Media can reasonably foresee, is reasonably likely to have a Liberty
Media Material Adverse Effect.
6.8 Brokers or Finders. Except as set forth in Section 6.8 of the Liberty Media
Disclosure Schedule, no agent, broker, investment banker, financial advisor or
other Person is or will be entitled, by reason of any agreement, act or
statement by Liberty Media or any of its Subsidiaries, directors, officers,
employees or Affiliates, to any financial advisory, broker's, finder's or
similar fee or commission, to reimbursement of expenses or to indemnification or
contribution in connection with any of the transactions contemplated by this
Agreement, and, if this Agreement is terminated prior to the Effective Time,
Liberty Media agrees to indemnify and hold the Company and its Affiliates
harmless from and against any and all claims, liabilities or obligations with
respect to any fees, commissions, expenses or claims for indemnification or
contribution asserted by any Person on the basis of any act or statement made or
alleged to have been made by Liberty Media or any of its Subsidiaries,
directors, officers, employees or Affiliates in connection with this Agreement
or any transaction provided for or described herein.
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ARTICLE VII.
ADDITIONAL COVENANTS AND AGREEMENTS
7.1 Access to Information Concerning Properties and Records. Upon reasonable
notice, the Company shall (and shall cause each of its Subsidiaries to) afford
to the officers, employees, counsel, accountants and other authorized
representatives of Parent and Liberty Media reasonable access during normal
business hours to all its properties, personnel, books and records and furnish
promptly to such Persons such financial and operating data and other information
concerning its business, properties, personnel and affairs as such Persons shall
from time to time reasonably request and instruct the officers, directors,
employees, counsel and financial advisors of the Company to discuss the business
operations, affairs and assets of the Company and otherwise fully cooperate with
the other party in its investigation of the business of the Company. Parent and
Liberty Media agree that they will not, and will cause their respective
officers, employees, counsel, accountants and other authorized representatives
not to, use any information obtained pursuant to this Section 7.1 for any
purpose unrelated to the transactions contemplated by this Agreement. No
investigation pursuant to this Section 7.1 will affect any representation or
warranty given by the Company to Parent or Liberty Media hereunder.
7.2 Confidentiality. Unless otherwise agreed to in writing by the party
disclosing (or whose Representatives disclosed) the same (a "disclosing party"),
each party (a "receiving party") shall, and shall cause its Affiliates,
directors, officers, employees, agents, counsel, financial advisors and
controlling Persons (such Affiliates and other Persons with respect to any party
being collectively referred to as such party's "Representatives") to, (i) keep
all Confidential Information of the disclosing party confidential and not
disclose or reveal any such Confidential Information to any Person other than
those Representatives of the receiving party who are participating in effecting
the transactions contemplated hereby or who otherwise need to know such
Confidential Information, (ii) use such Confidential Information only in
connection with consummating the transactions contemplated hereby and enforcing
the receiving party's rights hereunder, and (iii) not use Confidential
Information in any manner detrimental to the disclosing party. In the event that
a receiving party is requested pursuant to, or required by, applicable law or
regulation or by legal process to disclose any Confidential Information of the
disclosing party, the receiving party shall provide the disclosing party with
prompt notice of such request(s) to enable the disclosing party to seek an
appropriate protective order. A party's obligations hereunder with respect to
Confidential Information that (i) is disclosed to a third party with the
disclosing party's written approval, (ii) is required to be produced under order
of a court of competent jurisdiction or other similar requirements of a
governmental agency, or (iii) is required to be disclosed by applicable law or
regulation, will, subject in the case of clauses (ii) and (iii) above to the
receiving party's compliance with the preceding sentence, cease to the extent of
the disclosure so consented to or required, except to the extent otherwise
provided by the terms of such consent or covered by a protective order. If a
receiving party uses a degree of care to prevent disclosure of the Confidential
Information that is at least as great as the care it normally takes to preserve
its own information of a similar nature, it shall not be liable for any
disclosure that occurs despite the exercise of that degree of care, and in no
event shall a receiving party be liable for any indirect, punitive, special or
consequential damages unless such disclosure resulted from its willful
misconduct or gross negligence in which event it shall be liable in damages for
the disclosing party's lost profits resulting directly and solely from such
disclosure;
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provided, however, that notwithstanding the foregoing, Parent will not be liable
under any circumstances for damages other than direct damages (and not lost
profits or indirect, special, punitive or consequential damages) resulting
directly and solely from such wrongful disclosure by Parent. In the event this
Agreement is terminated, each party shall, if so requested by any other party,
promptly return or destroy all of the Confidential Information of such other
party, including all copies, reproductions, summaries, analyses or extracts
thereof or based thereon in the possession of the receiving party or its
Representatives; provided, however, that the receiving party shall not be
required to return or cause to be returned summaries, analyses or extracts
prepared by it or its Representatives, but shall destroy (or cause to be
destroyed) the same upon request of the disclosing party.
For purposes of this Section 7.2, "Confidential Information"
of a party means all confidential or proprietary information about such party
that is furnished by it or its Representatives to the other party or the other
party's Representatives, regardless of the manner in which it is furnished.
"Confidential Information" does not include, however, information which (a) has
been or in the future is published or is now or in the future is otherwise in
the public domain through no fault of the receiving party or its
Representatives, (b) was available to the receiving party or its Representatives
on a non-confidential basis prior to its disclosure by the disclosing party, (c)
becomes available to the receiving party or its Representatives on a
non-confidential basis from a Person other than the disclosing party or its
Representatives who is not otherwise bound by a confidentiality agreement with
the disclosing party or its Representatives, or is not otherwise prohibited from
transmitting the information to the receiving party or its Representatives, or
(d) is independently developed by the receiving party or its Representatives
through Persons who have not had, either directly or indirectly, access to or
knowledge of such information.
7.3 Public Announcements. The Company, Liberty Media and Parent shall use
commercially reasonable efforts to develop a joint communications plan and each
party hereto shall use reasonable efforts to ensure that all press releases and
other public statements with respect to the transactions contemplated hereby
shall be consistent with such joint communications plan. Unless otherwise
required by applicable law or by obligations pursuant to any listing agreement
with or rules of any securities exchange or the National Association of
Securities Dealers, Inc., each party shall use commercially reasonable efforts
to consult with, and use commercially reasonable efforts to accommodate the
comments of the other parties before issuing any press release or otherwise
making any public statement with respect to this Agreement or the transactions
contemplated hereby.
7.4 Conduct of the Company's Business Pending the Effective Time. Except as
contemplated by the Company Transaction Documents (copies of which have been
provided to Parent prior to the date hereof), from the date hereof through the
Effective Time, unless Parent and Liberty Media shall otherwise agree in writing
or, in the case of Section 7.4(c)(i), telephonically, followed by an agreement
in writing:
(a) the Company shall and shall cause its Subsidiaries to carry on
their respective businesses in the usual, regular and ordinary course in
substantially the same manner as heretofore conducted, and shall, and shall
cause its Subsidiaries to, use their reasonable best efforts to preserve intact
their present business organizations, preserve their respective Licenses,
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keep available the services of their present officers and employees and preserve
their relationships with customers, suppliers and others having business
dealings with them to the end that their goodwill and on-going businesses shall
be unimpaired at the Effective Time. Without limiting the generality of the
foregoing, the Company shall, and shall cause its Subsidiaries to, (i) maintain
insurance coverages and its books and records in a manner consistent with prior
practices, (ii) comply with all laws, ordinances and regulations of Governmental
Entities applicable to the Company and its Subsidiaries, (iii) maintain and keep
its properties and equipment in good repair, working order and condition,
ordinary wear and tear excepted, and (iv) perform its obligations under all
contracts and commitments to which it is a party or by which it is bound, except
in each case where the failure to so maintain, comply or perform, either
individually or in the aggregate, would not reasonably be expected to result in
a Material Adverse Effect;
(b) the Company shall not, nor shall it propose to, (i) sell, grant,
pledge or transfer or agree to sell, grant, pledge or transfer any of its or its
Subsidiaries' capital stock or other equity interests, (ii) amend any of its
Organizational Documents, (iii) split, combine or reclassify its outstanding
capital stock or issue or authorize or propose the issuance of any other
securities in respect of, in lieu of or in substitution for shares of the
capital stock, or declare, set aside or pay any dividend or other distribution
payable in cash, stock or property, or (iv) directly or indirectly redeem,
purchase or otherwise acquire or agree to redeem, purchase or otherwise acquire
any shares of its capital stock or that of its Subsidiaries;
(c) the Company shall not, nor shall it permit any of its Subsidiaries
to, (i) issue, deliver, sell or encumber or agree to issue, deliver, sell or
encumber any additional shares of, or stock or appreciation rights or rights of
any kind to acquire any shares of, its capital stock of any class, or any
options, rights or warrants to acquire shares of capital stock, or Convertible
Securities or any phantom shares or phantom equity interests other than
issuances of Company Common Stock pursuant to the exercise of warrants or stock
options outstanding on the date hereof and disclosed in Section 2.3(b) of the
Company Disclosure Schedule, (ii) amend or modify any outstanding options,
warrants, or rights to acquire, or Convertible Securities, or any phantom
shares, phantom equity interests or stock or equity appreciation rights, or
adopt or authorize any other stock or equity appreciation rights, restricted
stock or equity, stock or equity purchase, stock or equity bonus or similar
plan, arrangement or agreement; (iii) make any changes in its equity capital
structure, (iv) acquire, lease or agree to acquire or lease any capital assets
or any other assets except capital assets or other assets the value of which, in
the aggregate, does not exceed the total capital budget set forth in Section
7.4(c)(iv) of the Company Disclosure Schedule (without regard to the budgeted
sub-categories within the capital budget), (v) dispose or agree to dispose of
any capital assets or other assets except in the ordinary course of business
consistent with past practices, (vi) incur additional indebtedness for borrowed
money or guarantee any such indebtedness or issue or sell any debt securities or
warrants or rights to acquire any debt securities of the Company or any of its
Subsidiaries or guarantee any debt security of any other Person, other than in
the ordinary course of business consistent with past practice, (vii) secure any
of its outstanding unsecured Indebtedness, provide additional security for any
of its outstanding secured Indebtedness or grant, create or suffer to exist any
Lien on or with respect to any property, assets or rights of the Company or any
Subsidiary of the Company, except in any such case for Permitted Encumbrances,
(viii) sell, lease, encumber, grant a security interest in, or otherwise dispose
of any assets which are material, individually or in the
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aggregate, to the Company and its Subsidiaries, as a whole, other than in the
ordinary course of business, (ix) incur any liability or obligation, or
contribute any asset, to a Subsidiary of the Company that is material to the
Company and its Subsidiaries other than in the ordinary course of business, (x)
acquire or agree to acquire by merging or consolidating with, or by purchasing a
substantial equity interest in, or by any other manner, any business or any
corporation, partnership, association or other business organization or division
thereof, in each case in this clause (x) which are material, individually or in
the aggregate, to the Company and its Subsidiaries taken as a whole, except as
set forth in Section 7.4(c)(x) of the Company Disclosure Schedule, or (xi)
adopt, enter into, amend or terminate any Contract, commitment or arrangement
with respect to any of the foregoing that is not otherwise permitted by the
exceptions applicable to the foregoing;
(d) the Company shall not, nor shall it permit any of its Subsidiaries
to, other than to comply with applicable law, (i) adopt, enter into, terminate
or amend any bonus, profit sharing, compensation, severance, termination, stock
option, pension, retirement, deferred compensation, employment or other Company
Plan agreement, trust, fund or other arrangement for the benefit or welfare of
any director, officer or current or former employee, except with respect to the
agreements described in Section 7.4(d) of the Company Disclosure Schedule, (ii)
increase in any manner the compensation or fringe benefits of any director,
officer or employee (except for normal increases in the ordinary course of
business that are consistent with past practice and that, in the aggregate, do
not result in a material increase in benefits or compensation expense to the
Company and its Subsidiaries relative to the level in effect prior to such
increase), (iii) pay any benefit not provided under any existing plan or
arrangement, (iv) except for benefits that have already been earned or vested
without acceleration, grant any awards or make any payments under any bonus,
incentive, performance or other compensation plan or arrangement or Company Plan
(including, without limitation, the grant of stock options, stock or equity
appreciation rights, stock-based or stock-related awards, performance units or
restricted stock, or the removal of existing restrictions in any benefit plans
or agreements or awards made thereunder), except for (A) making of matching and
contributions to 401(k) plans and (B) the grant of employee stock options and
the issuance of Company Common Stock upon exercise thereof pursuant to
subsection (c) of this Section 7.4, (v) take any action to fund or in any other
way secure the payment of compensation or benefits under any employee plan,
agreement, contract or arrangement or Company Plan, other than in the ordinary
course of business consistent with past practice, or (vi) adopt, enter into,
amend or terminate any contract, agreement, commitment or arrangement to do any
of the foregoing that is not otherwise permitted by the exceptions applicable to
the foregoing;
(e) the Company shall not, nor shall it permit any of its Subsidiaries
to, make any investments in non-investment grade securities;
(f) the Company shall not, nor shall it permit its Subsidiaries to, (i)
make any change in its accounting policies or procedures except as required by
GAAP or (ii) make any material tax election, change any material tax election
already made, adopt any material tax accounting method, change any material tax
accounting method unless required by GAAP, enter into any closing agreement,
settle any tax claim or assessment or consent to any tax claim or assessment or
any waiver of the statute of limitations for any such claim or assessment,
without in any such
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case the prior written consent of Parent and Liberty, which consent shall not
unreasonably be withheld or delayed;
(g) (i) the Company shall not pay, discharge or satisfy claims,
liabilities or obligations (absolute, accrued, contingent or otherwise), other
than the payment, discharge or satisfaction in the ordinary course of business
consistent with past practice; (ii) cancel any Indebtedness or waive any claims
or rights, except in the ordinary course of business and consistent with past
practice or as described in Section 7.4(g)(ii) of the Company Disclosure
Schedule; (iii) accelerate the payment of, or otherwise prepay, any existing
outstanding Indebtedness except in the ordinary course of business consistent
with past practice; (iv) other than as contemplated or otherwise permitted by
this Agreement and other than the normal cash management practices of the
Company and its Subsidiaries conducted in the ordinary and usual course of their
business and consistent with past practice, make any advance or loan to or
engage in any material transaction with any director, officer, partner or
Affiliate not required by the terms of an existing Contract described in Section
4.22 of the Company Disclosure Schedule; (v) guarantee or otherwise become
responsible for any Indebtedness of any other Person; or (vi) enter into or
assume any Contract, obligation, commitment or arrangement with respect to any
of the foregoing;
(h) the Company shall not take any action that would or is reasonably
likely to result in (i) any of the representations or warranties made in Article
IV hereof being untrue on and as of the Closing Date as though made on and as of
the Closing Date (except for any changes expressly permitted or contemplated by
this Agreement) or (ii) any of the conditions set forth in Section 8.1, 8.2 or
8.3 not being satisfied;
(i) between the date of this Agreement and the Effective Time, neither
the Company nor its Subsidiaries will voluntarily acquire or agree to acquire
(through purchase, exchange, conversion or otherwise) beneficial ownership of
any shares of any class of capital stock of BT or its Subsidiaries or any direct
or indirect rights or options to so acquire any shares of any class of capital
stock of BT or any of its Subsidiaries;
(j) the Company will use its reasonable best efforts to persuade each
Person holding Company Stock Options issued pursuant to the 1993 Plan to
exercise such Company Stock Options prior to the Effective Time;
(k) the Company shall not enter into any Contract, commitment or
arrangement to perform any of the actions prohibited under this Section 7.4 and
not otherwise permitted by the exceptions contained therein.
Notwithstanding the foregoing, but subject to the provisions
of Section 7.5 (to the extent applicable), the foregoing provisions of this
Section 7.4 shall not prohibit or restrict in any way the Company from
soliciting or taking other actions to pursue, or entering an agreement with
respect to, an Extraordinary Transaction.
7.5 No Solicitation.
(a) The Company will notify Parent and Liberty Media immediately, but
in any event within 24 hours, if any proposals, inquiries or expressions of
interest are received by, any
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information is requested from, or any negotiations or discussions are sought to
be initiated or continued with the Company or its representatives, in each case
in connection with any Extraordinary Transaction (as defined below) or the
possibility or consideration by a third party of making a Extraordinary
Transaction ("Extraordinary Transaction Interest") indicating, in connection
with such notice, the name of the Person indicating such Extraordinary
Transaction Interest, the terms and conditions of any proposals or offers and
the nature of any inquiries or expressions of interest. The Company agrees that
it will immediately cease and cause to be terminated any existing activities,
discussions or negotiations with any Persons conducted heretofore with respect
to any Extraordinary Transaction Interest. The Company agrees that it will take
the necessary steps promptly to inform the Persons referred to in the first
sentence hereof of the obligations undertaken in this Section 7.5. The Company
agrees that it shall keep Parent and Liberty Media informed, on a current basis,
of the status and terms of any Extraordinary Transaction Interest. As used in
this Agreement, "Extraordinary Transaction" shall mean any tender or exchange
offer involving the Company, any proposal for a merger, consolidation or other
business combination involving the Company, any proposal or offer to acquire in
any manner a greater than 15% equity interest in, or a significant portion of
the business or assets of, the Company (other than immaterial or insubstantial
assets or inventory in the ordinary course of business or assets held for sale),
any proposal or offer with respect to any recapitalization or restructuring with
respect to the Company or any proposal or offer with respect to any other
transaction similar to any of the foregoing with respect to the Company other
than pursuant to the transactions to be effected pursuant to this Agreement.
(b) The Company will not, and will use its best efforts to ensure that
its officers, directors, employees, investment bankers, attorneys, accountants
and other agents do not, directly or indirectly: (i) initiate, solicit or
encourage, or take any action to facilitate (including by the furnishing of
information) the making of, any offer or proposal which constitutes or is
reasonably likely to lead to any Extraordinary Transaction, (ii) enter into any
agreement with respect to any Extraordinary Transaction, or (iii) in the event
of an unsolicited Extraordinary Transaction for the Company, engage in
negotiations or discussions with, or provide any information or data to, any
Person (other than Parent, Liberty Media, Merger Sub, any of their Affiliates or
Representatives and except for information which has been previously publicly
disseminated by the Company) relating to any Extraordinary Transaction.
(c) Notwithstanding the foregoing, prior to the Effective Time, the
Company may furnish information concerning its business, properties or assets to
any Person pursuant to appropriate confidentiality agreements, and may negotiate
and participate in discussions and negotiations with such Person concerning a
Extraordinary Transaction (provided that the Company shall not agree to any
exclusive right to negotiate with the Company) if (x) such entity or group has,
without the Company or any of its officers, directors, employees, investment
bankers, attorneys, accountants or other agents having taken any action
prohibited by Section 7.5(b) of this Agreement following the date of this
Agreement, submitted a bona fide written proposal to the Company relating to any
such transaction that the Company Board determines, in good faith, after
receiving written advice from a financial advisor of nationally recognized
reputation is more favorable to the Company and its stockholders than the
transactions contemplated hereby (taking into account all relevant factors), and
for which financing, to the extent required, is then committed or which, in the
good faith judgment of the Company Board, is reasonably capable of being
obtained by such entity or group and (y) in the good faith opinion
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of the Company Board, the failure to provide such information or access or to
engage in such discussions or negotiations would cause the Company Board to
breach its fiduciary duties to the Company's stockholders under applicable law
(an Extraordinary Transaction which satisfies clauses (x) and (y) being referred
to herein as a "Superior Proposal"). The Company shall within one business day
following a determination that such Extraordinary Transaction is a Superior
Proposal notify Parent and Liberty Media of the receipt of the same. The Company
shall promptly provide to Parent and Liberty Media any nonpublic information
regarding the Company provided to any other party which was not previously
provided to Parent and Liberty Media. If the Company Board determines in good
faith that the fiduciary duties of the Company Board so require, the Company
Board may (subject to this and the following sentences) inform the Company's
stockholders that it no longer believes that the transactions contemplated
hereby are advisable, and that it no longer recommends approval of the Merger (a
"Subsequent Determination"), but only at a time that is after the fifth business
day following Parent's and Liberty Media's receipt of written notice advising
Parent and Liberty Media that the Company Board has received a Superior Proposal
specifying the material terms and conditions of such Superior Proposal (and
including a copy thereof with all accompanying documentation), identifying the
Person making such Superior Proposal and stating that it intends to make a
Subsequent Determination. If such five-day notice overlaps with the scheduled
Special Meeting, the Company shall adjourn the Special Meeting so as to permit
compliance with such five-day notice period. After providing such notice, the
Company shall provide a reasonable opportunity to Parent and Liberty Media to
make such adjustments in the terms and conditions of this Agreement and/or any
of the Company Transaction Documents as would enable the Company Board to
proceed with its recommendation to its stockholders without a Subsequent
Determination. At any time after five business days following notification to
Parent and Liberty Media of the Company's intent to do so and if the Company has
otherwise complied with the terms of this Section 7.5(c), the Company Board may
terminate this Agreement pursuant to clause (iv) of Section 9.1 and enter into
an agreement with respect to a Superior Proposal, provided that the Company
shall, concurrently with terminating this Agreement pursuant to such clause, pay
or cause to be paid to Liberty Media the Termination Fee (as defined in Section
9.2 hereof). Notwithstanding any other provision of this Agreement, so long as
this Agreement has not previously been terminated in accordance with its terms,
the Company shall submit the Merger Proposal to its stockholders pursuant to
Section 3.1 hereof, whether or not the Company Board makes a Subsequent
Determination; provided that, if the Company Board has made a Subsequent
Determination, it may withdraw its recommendation to stockholders that they vote
in favor of the Merger Proposal.
(d) Except as set forth in Section 7.5(c), neither the Company Board
nor any committee thereof shall (i) withdraw or modify, or propose to withdraw
or modify, in a manner adverse to Parent and Liberty Media, the approval or
recommendation by the Company Board or any such committee of this Agreement, the
other Company Transaction Documents, and the transactions contemplated hereby
and (ii) approve or recommend, or propose to approve or recommend, any
Extraordinary Transaction or (iii) enter into any agreement with respect to any
Extraordinary Transaction.
(e) Nothing contained in this Agreement shall prohibit the Company or
the Company Board from (i) taking, and disclosing to the Company's stockholders,
a position with respect to a Extraordinary Transaction pursuant to Rules 14d-9
and 14e-2 under the Exchange Act or (ii)
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making any disclosure to the Company's stockholders that the Company Board
determines, in good faith and upon exercise of its reasonable judgment after
consultation with its financial advisors and outside legal counsel, that the
failure to so disclose would be reasonably likely to result in a breach of the
fiduciary duties of the Company Board under applicable law.
7.6 Actions by Merger Sub. In its capacity as the sole stockholder of Merger Sub
and subject to the terms and conditions of this Agreement, Parent shall cause
Merger Sub to approve and adopt the Merger Proposal and to take all corporate
action necessary on its part to consummate the Merger and the transactions
contemplated hereby.
7.7 Listing. Each party hereto agrees to use its reasonable efforts to cause the
shares of Class A Liberty Media Group Stock to be issued in the Merger to be
authorized for listing on the NYSE, subject to official notice of issuance, and
to cause the shares of Class A Liberty Media Group Stock issuable upon the
exercise of Carryover Options to be listed on the NYSE.
7.8 Convertible Securities. The Company agrees to take such actions as are
necessary to ensure that, immediately prior to the Effective Time, all rights to
exercise, convert or exchange any Convertible Securities, whether or not issued
under any stock option or similar plans of the Company or any Subsidiary, will
have been exercised by the applicable holders of such Convertible Securities or
the rights of the applicable holders thereof to so exercise, convert or exchange
such Convertible Securities following the Effective Time shall have been
canceled, terminated or otherwise rendered null, void and of no further effect,
except in any such case as otherwise provided for herein with respect to any
Carryover Options. Nothing in this Section 7.8 shall be deemed to affect any of
the obligations of the Company pursuant to Section 7.4 including, without
limitation, clause (g) thereof.
7.9 Voting Agreement. Concurrently with the execution and delivery of this
Agreement, the Voting Agreement, a copy of the form of which is attached hereto
as Exhibit 7.9, is being executed by the parties identified on the signature
page thereto.
7.10 Indemnification of Directors and Officers; Insurance.
(a) From and after the Effective Time, the Surviving Entity shall
indemnify, defend and hold harmless the present and former officers and
directors of the Company and any individual who is or was serving at the request
of the Company as an officer or director of another entity that is subject to
the registration obligations of Section 12(g) of the Exchange Act (each, an
"Indemnified Party" and together, the "Indemnified Parties") (and shall also,
subject to Section 7.10(b), advance expenses as incurred to the fullest extent
permitted under the DGCL, provided that the individual to whom expenses are
advanced provides an undertaking to repay such advances if it is ultimately
determined that such individual is not entitled to indemnification), against (i)
all losses, costs, expenses, claims, damages, judgments or liabilities arising
out of, or in connection with, any claim, action, suit, proceeding or
investigation based in whole or in part on the fact that the Indemnified Party
is or was an officer or director of the Company, or is or was serving at the
request of the Company as an officer or director of another entity that is
subject to the registration obligations of Section 12(g) of the Exchange Act,
pertaining to any matter existing or occurring before or at the Effective Time
and whether asserted or claimed before, at or after, the Effective Time (the
"Indemnified Liabilities") and (ii)
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all Indemnified Liabilities based in whole or in part on, or arising in whole or
in part out of, or pertaining to this Agreement, the Merger or any other
transactions contemplated hereby or thereby, in each case to the fullest extent
permitted under the DGCL (notwithstanding the Charter, Bylaws or similar
organizational documents of the Company, the Surviving Entity, Parent or Liberty
Media); provided, however, that such indemnification shall be provided only to
the extent any directors' and officers' liability insurance policy of the
Company or its Subsidiaries does not provide coverage and actual payment
thereunder with respect to the matters that would otherwise be subject to
indemnification hereunder (it being understood that the Surviving Entity shall,
subject to Section 7.10(b), advance expenses on a current basis as provided in
this paragraph (a) notwithstanding such insurance coverage to the extent that
payments thereunder have not yet been made, in which case the Surviving Entity
shall be entitled to repayment of such advances from the proceeds of such
insurance coverage). All rights to indemnification, including provisions
relating to advances of expenses incurred in defense of any action, suit or
proceeding, whether civil, criminal, administrative or investigative (each, a
"Claim"), existing in favor of the Indemnified Parties as provided in the
Company's Charter or Bylaws or pursuant to other agreements, or certificates of
incorporation or bylaws or similar documents of any of the Company's
Subsidiaries, as in effect as of the date hereof, with respect to matters
occurring through the Effective Time, shall survive the Merger and shall
continue in full force and effect for a period of not less than three years from
the Effective Time; provided, however, that all rights to indemnification in
respect of any Claim asserted, made or commenced within such period shall
continue until the final disposition of such Claim. The Surviving Entity shall
maintain in effect for not less than three years after the Effective Time the
current policies of directors' and officers' liability insurance maintained by
the Company and the Company's Subsidiaries with respect to matters occurring
prior to or at the Effective Time; provided, however, that (i) the Surviving
Entity may substitute therefor policies of at least the same coverage containing
terms and conditions which are no less advantageous to the Indemnified Parties
with an insurance company or companies, the claims paying ability of which is
substantially equivalent to the claims paying ability of the insurance company
or companies providing currently such insurance coverage for directors and
officers of the Company, and (ii) the Surviving Entity shall not be required to
pay an annual premium for such insurance in excess of one and one-half times the
last annual premium paid prior to the date hereof, but in such case shall
purchase as much coverage as possible for such amount.
(b) If any Claim relating hereto or to the transactions contemplated by
this Agreement is commenced before the Effective Time, the Company, Liberty
Media and the Surviving Entity hereto agree to cooperate and use their
respective reasonable efforts to vigorously defend against and respond thereto.
Any Indemnified Party wishing to claim indemnification under paragraph (a) of
this Section 7.10, upon learning of any such claim, action, suit, proceeding or
investigation (whether arising before, at or after the Effective Time), shall
promptly notify Liberty Media and the Company or the Surviving Entity thereof
(but the failure so to notify shall not relieve the Company, Liberty Media or
the Surviving Entity from any liability which it may have under this Section
7.10 except to the extent such failure materially prejudices such party),
whereupon Liberty Media or the Surviving Entity shall have the right, from and
after the Effective Time, to assume from such Indemnified Party and control the
defense thereof on behalf of such Indemnified Party, and upon such assumption,
the Surviving Entity shall not be liable to such Indemnified Parties for any
legal expenses of other counsel or any other expenses subsequently incurred by
such Indemnified Parties in connection with the defense thereof..Notwithstanding
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the foregoing, if counsel for the Indemnified Parties advises that there are
issues which raise conflicts of interest between Liberty Media or the Surviving
Entity and the Indemnified Parties, the Indemnified Parties may retain separate
counsel and the Company or the Surviving Entity shall pay or cause to be paid
all reasonable fees and expenses of such counsel; provided that neither Liberty
Media nor the Surviving Entity shall be obligated pursuant to this Section
7.10(b) to pay or cause to be paid for more than one firm or counsel to
represent all Indemnified Parties in any jurisdiction unless there is, under
applicable standards of professional conduct, a conflict on any significant
issue between the positions of any two or more Indemnified Parties. Neither
Liberty Media nor the Surviving Entity shall be liable for any settlement
effected without its prior written consent, which consent, however, shall not be
unreasonably withheld, provided that neither Liberty Media nor the Surviving
Entity shall be obliged in any event to consent to any settlement or proposed
settlement which would impose any obligation upon Parent, Liberty Media, the
Surviving Entity or any of their respective Affiliates other than an obligation
on the part of Liberty Media or the Surviving Entity to pay money.
(c) This Section 7.10 is intended to benefit the Indemnified Parties
and shall be enforceable by each Indemnified Party, his or her heirs and
representatives and shall be binding on all successors and assigns of the
Surviving Entity.
7.11 Certificates as to Indebtedness. The Company shall cause each of the
lenders who hold the three largest individual amounts of the outstanding
Indebtedness of the Company as of the Effective Time to deliver a certificate to
Parent and Liberty Media at the Closing certifying the amount of outstanding
Indebtedness of the Company to such lender as of such time.
7.12 Notification of Certain Matters. Between the date hereof and the Effective
Time, each of Liberty and the Company will give prompt notice in writing to the
other of: (i) any information that indicates that any of its representations or
warranties contained herein was not true and correct as of the date hereof or
will not be true and correct at and as of the Effective Time with the same force
and effect as if made at and as of the Effective Time (except for changes
permitted or contemplated by this Agreement), (ii) the occurrence of any event
that will result, or has a reasonable prospect of resulting, in the failure of
any condition specified in Article VIII hereof to be satisfied, (iii) any notice
or other communication from any third party alleging that the consent of such
third party is or may be required in connection with the transactions
contemplated by this Agreement or that such transactions otherwise may violate
the rights of or confer remedies upon such third party and (iv) any notice of,
or other communication relating to, any litigation referred to in Section 7.13
or any order or judgment entered or rendered therein.
7.13 Defense of Litigation. Each of Liberty and the Company agrees to vigorously
defend against any and all actions, suits or proceedings in which such party is
named as a defendant that seek to enjoin, restrain or prohibit the transactions
contemplated hereby or seek damages with respect to such transactions. The
Company shall not settle any such action, suit or proceeding or fail to perfect
on a timely basis any right to appeal any judgment rendered or order entered
against the Company therein without the consent of Parent and Liberty Media
(which consent shall not unreasonably be withheld or delayed). Liberty Media and
Merger Sub shall not settle any such action, suit or proceeding, if such
settlement would have, or could reasonably be expected to have, a Material
Adverse Effect, without the consent of the Company (which consent shall not
unreasonably be withheld or delayed). Each of Liberty and the Company further
agrees
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to use its reasonable efforts to cause each of its Affiliates, directors and
officers to vigorously defend any action, suit or proceeding in which such
Affiliate, director or officer is named as a defendant and which seeks any such
relief to comply with this Section to the same extent as if such person were a
party hereto.
7.14 Additional Financial Statements. Promptly after the same become available,
the Company shall furnish to Parent and Liberty Media such additional financial
data concerning the Company and its Subsidiaries as Parent or Liberty Media may
reasonably request, including any audited consolidated financial statements of
the furnishing party for any year ending on or after the date hereof, prepared
in conformity with the requirements of the Commission applicable to annual
financial statements to be included in Form 10-K under the Exchange Act, and all
interim quarterly consolidated financial statements of the furnishing party
prepared on or after the date of this Agreement, accompanied by a statement of
the principal financial officer of the Company that, in the opinion of such
officer, such quarterly financial statements were prepared in conformity with
the requirements of the Commission applicable to financial statements to be
included in Form 10-Q under the Exchange Act, applied (in each such case) on a
consistent basis (except as otherwise stated in the quarterly financial
statements) and present fairly the consolidated financial position, results of
operations and cash flows of the Company and its consolidated Subsidiaries as of
the date and for the period indicated (subject in the case of quarterly
financial statements to normal, recurring year-end audit adjustments).
ARTICLE VIII.
CONDITIONS PRECEDENT
8.1 Conditions Precedent to the Obligations of Parent, Liberty Media, Merger Sub
and the Company. The respective obligations of Parent, Liberty Media, Merger Sub
and the Company to consummate the Merger are subject to the satisfaction at or
prior to the Closing Date of each of the following conditions, any of which, to
the extent permitted by applicable law, may be waived by Parent (only with the
concurrence of Liberty Media), for itself and Merger Sub (but not, in either
case, for the Company), or by the Company for itself (but not for Parent, Merger
Sub or Liberty Media):
(a) Approval of Stockholders. This Agreement and the Merger Proposal
shall have been approved and adopted by such vote of the stockholders of the
Company as set forth in Sections 3.1 and 4.33.
(b) Registration. The Registration Statement (as amended or
supplemented) shall have become effective under the Securities Act and shall not
be subject to any stop order, and no action, suit, proceeding or investigation
by the Commission seeking a stop order or to suspend the effectiveness of the
Registration Statement shall have been initiated and be continuing. Parent shall
have received all state securities law or blue sky permits and authorizations
necessary to issue the Merger Consideration as contemplated hereby and such
permits and authorizations shall be in full force and effect.
(c) Xxxx-Xxxxx Act. Any applicable waiting period (and any extension
thereof) under the Xxxx-Xxxxx Act shall have expired or been terminated.
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(d) NYSE Listing. The shares of Class A Liberty Media Group Stock to be
issued in the Merger shall have been authorized for listing on the NYSE, subject
only to official notice of issuance.
8.2 Conditions Precedent to the Obligations of Parent and Merger Sub for the
Benefit of Liberty Media. The obligations of Parent and Merger Sub to consummate
the Merger are also subject to the satisfaction at or prior to the Closing Date
of each of the following conditions, which conditions are solely for the benefit
of Liberty Media, and any or all of which may be asserted or waived solely by
Liberty Media acting alone:
(a) Accuracy of Representations and Warranties. All representations and
warranties of the Company contained in this Agreement shall, if specifically
qualified by materiality, be true and correct and, if not so qualified, be true
and correct in all material respects, in each case as of the date of this
Agreement and, except to the extent such representations and warranties speak as
of a specified earlier date, on and as of the Closing Date as though made on and
as of the Closing Date, except for any changes permitted or contemplated by this
Agreement. If (i) Liberty Livewire, Inc., a Delaware corporation ("Liberty
Livewire"), has failed to execute and deliver the guaranty contemplated by the
letter agreement, dated June 30, 2000, among the Company and the other parties
to the GECC Facility and (ii) but for Liberty Livewire's failure to execute such
guaranty, the condition set forth in the previous sentence would be satisfied,
Parent and Merger Sub may not assert that the condition set forth in the
previous sentence has not been satisfied. In the event of any changes to the
amounts of Indebtedness or the identity of any creditors named in Section 4.12
of the Company Disclosure Schedules, a cumulative listing of any such changes
shall be attached to the certificates contemplated by Sections 8.2(c) and
8.3(c).
(b) Performance of Agreements. The Company shall have performed in all
material respects all obligations and agreements, and complied in all material
respects with all covenants and conditions, contained in this Agreement to be
performed or complied with by it prior to or on the Closing Date.
(c) Compliance Certificate. The Company shall have delivered to Parent
and Liberty Media a certificate, dated the Closing Date, signed by the President
or any Vice President of the Company (but without personal liability thereto),
certifying as to the fulfillment of the conditions specified in Sections 8.1(a),
8.2(a), 8.2(b) and 8.2(f) (to the extent such Local Approvals or Governmental
Consents must be obtained by the Company).
(d) Absence of Injunctions and Proceedings. No permanent or preliminary
Injunction or restraining order or other order by any court or other
Governmental Entity of competent jurisdiction or other legal restraint or
prohibition shall be in effect, (i) preventing consummation of the transactions
contemplated hereby as provided herein, or permitting such consummation only
subject to any condition or restriction that has had or would have a Liberty
Media Material Adverse Effect, (ii) requiring the divestiture, as a result of
consummation of the Merger, of a material portion of the business or assets of
Liberty Media and its Subsidiaries and Affiliates taken as a whole, (iii)
imposing material limitations on the ability of Liberty Media effectively to
exercise full rights of ownership of shares of capital stock or other ownership
interests of the Surviving Entity (including the right to vote such shares or
other ownership interests on all matters properly presented to the stockholders
or other equity holders of the Surviving Entity) or
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making the holding by Liberty Media of any such shares or other ownership
interests illegal or subject to any materially burdensome requirement or
condition, or (iv) requiring Liberty Media, its Subsidiaries or the Company or
any of its Subsidiaries to cease or refrain from engaging in any line of
business, including any line of business conducted by the Company or any of its
Subsidiaries, as a result of the consummation of the Merger.
(e) No Adverse Enactments. No statute, rule, regulation, law, order,
judgment or decree enacted, promulgated, entered, issued, enforced or deemed
applicable by any foreign or United States federal, state or local Governmental
Entity of competent jurisdiction shall be in effect which (i) makes this
Agreement, the Merger or any other transaction contemplated hereby illegal or
imposes or is reasonably likely to impose material damages or penalties in
connection therewith, (ii) requires or is reasonably likely to require, as a
result of the consummation of the Merger, the divestiture of or any restrictions
or conditions on the conduct of (A) a portion of the business or assets of the
Company and its Subsidiaries, taken as a whole, which would have a Material
Adverse Effect, or (B) a material portion of the business or assets of Liberty
Media and its Subsidiaries and Affiliates taken as a whole, (iii) imposes or is
reasonably likely to result in imposition of material limitations on the ability
of Liberty Media effectively to exercise full rights of ownership of shares of
capital stock or other ownership interests of the Surviving Entity (including
the right to vote such shares or other ownership interests on all matters
properly presented to the stockholders or other equity holders of the Surviving
Entity) or makes the holding by Liberty Media of any such shares or other
ownership interests illegal or subject to any materially burdensome requirement
or condition, or (iv) requires or is reasonably likely to require Liberty Media
or its Subsidiaries or Affiliates or the Company or any of its material
Subsidiaries to cease or refrain from engaging in any material business,
including in the case of Liberty Media any material business conducted by the
Company or any of its Subsidiaries prior to the Merger, as a result of the
consummation of the Merger.
(f) Governmental Consents, Etc. Other than the filing of the
Certificate of Merger with the Delaware Secretary of State and filings due after
the Effective Time, all Local Approvals, and all other Governmental Consents
(other than those specified in Section 8.1(c)) as are required in connection
with the consummation of the Merger shall have been obtained and shall be in
full force and effect without any condition, limitation or restriction, all
Governmental Filings as are required in connection with the consummation of the
Merger shall have been made, and all waiting periods, if any, applicable to the
consummation of the Merger imposed by any Governmental Entity (other than those
specified in Section 8.1(c)) shall have expired, other than any of the foregoing
which, if not so obtained, in force or effect, made or expired (as the case may
be) would not, either individually or in the aggregate, have a Material Adverse
Effect (or an effect on Liberty Media and its Subsidiaries and Affiliates that,
were the Company and its Subsidiaries subjected to the same (or a materially
similar) effect, would constitute a Material Adverse Effect); provided, however,
that any Governmental Consent by the FCC relating to the Company's FCC Licenses
described in Section 4.15 of the Company Disclosure Schedule shall not be deemed
ineffective for purposes of this subsection 8.2(f) solely because such
Governmental Consent is subject to appeal (provided that no notice of appeal
shall have been filed) or to reconsideration by the FCC on its own motion.
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(g) Opinion of Company Counsel. Liberty Media shall have received the
opinion of Piper, Marbury, Xxxxxxx & Xxxxx LLP dated as of the Closing Date, in
form and substance reasonably acceptable to Liberty Media, covering the matters
set forth on Exhibit 8.2(g) hereto.
(h) No Registration Rights. No Person shall have any contractual or
other registration rights with respect to any of the shares of Class A Liberty
Media Group Stock to be issued in the Merger.
8.3 Conditions Precedent to the Obligations of Parent and Merger Sub for the
Benefit of Parent. The obligations of Parent and Merger Sub to consummate the
Merger are also subject to the satisfaction at or prior to the Closing Date of
each of the following conditions, which conditions are solely for the benefit of
Parent, and any or all of which may be waived solely by Parent acting alone:
(a) Accuracy of Representations and Warranties. All representations and
warranties of the Company contained in this Agreement shall, if specifically
qualified by materiality, be true and correct and, if not so qualified, be true
and correct in all material respects in each case as of the date of this
Agreement and (except to the extent such representations and warranties speak as
of a specified earlier date) on and as of the Closing Date as though made on and
as of the Closing Date, except for changes permitted or contemplated by this
Agreement.
(b) Performance of Agreements. The Company shall have performed in all
material respects all obligations and agreements, and complied in all material
respects with all covenants and conditions, contained in this Agreement to be
performed or complied with by it prior to or on the Closing Date.
(c) Compliance Certificate. The Company shall have delivered to Parent
a certificate, dated the Closing Date, signed by the President or any Vice
President of the Company (but without personal liability thereto), certifying as
to the fulfillment of the conditions specified in Sections 8.1(a), 8.3(a),
8.3(b) and 8.3(f) (to the extent such Local Approvals or Governmental Consents
must be obtained by the Company), and identifying the following:
(i) any pending action or preceding by any Governmental Entity
seeking a permanent or preliminary Injunction or restraining order or other
order by any court or other Governmental Entity of competent jurisdiction or
other legal restraint or prohibition which, if determined in a manner adverse to
the Company, Liberty Media or Parent, could have the effect of, and any such
Injunction or other order, restraint or prohibition in an action or proceeding
(whether by a Governmental Entity or otherwise) that is in effect, preventing
consummation of the transactions contemplated hereby as provided herein or
permitting such consummation subject to any condition or restriction;
(ii) any contract, agreement or understanding to which the Company
or any of its Subsidiaries is a party that would, at the Effective Time, be
legally enforceable against Parent or any of its Subsidiaries (other than
Liberty Media, the Liberty Media Affiliates, the Company, and their respective
Subsidiaries); and
(iii) any License that is required for the ownership and operation
of the assets and facilities of the respective businesses of Company and its
Subsidiaries which, as of the
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Closing Date, the Company and its Subsidiaries no longer hold, or are not in
compliance with the terms of, or have not duly and currently filed all reports
and other information required to be filed by them in connection therewith.
(d) Absence of Injunctions and Proceedings. No action or proceeding by
any Governmental Entity seeking a permanent or preliminary Injunction or
restraining order or other order by any court or other Governmental Entity of
competent jurisdiction or other legal restraint or prohibition shall be pending
which, if determined in a manner adverse to the Company, Liberty Media or
Parent, could have the effect of, and no such Injunction or other order,
restraint or prohibition in an action or proceeding (whether by a Governmental
Entity or otherwise) shall be in effect, preventing consummation of the
transactions contemplated hereby as provided herein, or permitting such
consummation only subject to any condition or restriction that (x) has had or
would have a Parent Material Adverse Effect or a Material Adverse Effect or (y)
would require Parent or any of its Subsidiaries to take or refrain from, or
would prohibit Parent or any of its Subsidiaries from taking or refraining from,
any action (other than actions required to be taken by Parent or its
Subsidiaries pursuant to the final proviso of the penultimate sentence of
Section 3.4 hereof, or otherwise specifically agreed to by Parent or one of its
Subsidiaries in this Agreement).
(e) No Adverse Enactments. No statute, rule, regulation, law, order,
judgment or decree enacted, promulgated, entered, issued, enforced or deemed
applicable by any foreign or United States federal, state or local Governmental
Entity of competent jurisdiction shall be in effect which (i) makes this
Agreement, the Merger, the Post-Merger Restructuring Transactions or any other
transaction contemplated hereby illegal or imposes material damages or penalties
in connection therewith or otherwise prohibits or unreasonably delays any of
such transactions, (ii) requires the divestiture or holding separate of any
portion of the business or any assets of Parent or any of its Subsidiaries (or
any reorganization or restructuring thereof) in any such case as a result of the
consummation of the Merger, or would require Parent or any of its Subsidiaries
to take or refrain from, or would prohibit Parent or any of its Subsidiaries
from taking or refraining from, any action (other than actions required to be
taken or refrained from (or prohibited to be taken or refrained from, as the
case may be) by Parent or any of its Subsidiaries pursuant to the final proviso
of the penultimate sentence of Section 3.4 hereof, or otherwise specifically
agreed to by Parent or one of its Subsidiaries in this Agreement), (iii) imposes
any material limitations on the ability of Parent or Liberty Media effectively
to exercise full rights of ownership of shares of capital stock or other
ownership interests of the Surviving Entity (including the right to vote such
shares or other ownership interests on all matters properly presented to the
stockholders or other equity holders of the Surviving Entity), or makes the
holding by Parent or Liberty Media of any such shares or other ownership
interests illegal or subject to any materially burdensome requirement or
condition, (iv) requires Parent or any of its Subsidiaries to cease or refrain
from engaging in any material business, whether or not such business is
conducted by the Company or any of its Subsidiaries, as a result of the
consummation of the Merger, or (v) increases in any material respect the
liabilities or obligations of Parent arising out of this Agreement or, in
Parent's reasonable judgment, otherwise would have a Parent Adverse Effect, as a
result of the consummation of the Merger.
(f) Governmental Consents, Etc. Other than the filing of the
Certificate of Merger with the Delaware Secretary of State and filings due after
the Effective Time, all Local
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Approvals, and all other Governmental Consents as are required in connection
with the consummation of the transactions contemplated hereby shall have been
obtained and shall be in full force and effect without any condition, limitation
or restriction, all Governmental Filings as are required in connection with the
consummation of the transactions contemplated hereby shall have been made, and
all waiting periods, if any, applicable to the consummation of such transactions
imposed by any Governmental Entity shall have expired, other than the foregoing
which, if not so obtained, in force or effect, made or expired (as the case may
be) would not, in Parent's reasonable judgement, either individually or in the
aggregate, have a Parent Adverse Effect; provided, however, that any
Governmental Consent by the FCC relating to the Company's FCC Licenses described
in Section 4.15 of the Company Disclosure Schedule shall not be deemed
ineffective for purposes of this subsection 8.3(f) solely because such
Governmental Consent is subject to appeal (provided that no notice of appeal
shall have been filed) or to reconsideration by the FCC on its own motion.
(g) Certain Agreements. Neither the Company nor any of its Subsidiaries
shall be a party to any Contract or understanding that would at the Effective
Time be legally enforceable against Parent or any of its Subsidiaries (other
than Liberty Media, the Liberty Media Affiliates, the Company, and their
respective Subsidiaries), except as would not have a Parent Adverse Effect.
(h) Certain Licenses. The Company and its Subsidiaries shall hold, and
be in compliance with the terms of, and shall have duly and currently filed all
reports and other information required to be filed by them in connection with,
all licenses, permits, rights of way, easements, franchises, ordinances,
certificates, variances, exemptions, concessions, leases, instruments, orders
and approvals, governmental authorizations, domestic and foreign, necessary to
the ownership of the Company's and its Subsidiaries' property or to the conduct
of their respective businesses, including without limitation, all FCC Licenses
required for the ownership and operation of the assets and facilities of their
respective businesses, except for any failure to so hold, be in compliance with
the terms of, or have duly and currently filed, that in the reasonable judgment
of Parent would not have a Parent Adverse Effect.
(i) No Liberty Media Notice. Parent shall not have been notified by
Liberty Media that any of the Conditions set forth in this Article VIII (other
than Section 8.4) shall remain unsatisfied.
(j) Performance of Agreements. Liberty Media shall have performed in
all material respects all obligations and agreements, and complied in all
material respects with all covenants and conditions, to be performed or complied
with by it hereunder, prior to or on the Closing Date and Liberty Media shall
have delivered to Parent a certificate dated as of the Closing Date, signed by
the President or any Vice President of Liberty Media (but without personal
liability thereto) certifying as to the matters described in this Section
8.3(j).
(k) Xxxx-Xxxxx. Any applicable waiting period under the Xxxx-Xxxxx Act
shall have expired or been terminated without receipt of any objections or
commencement of litigation or threat thereof by the appropriate Governmental
Entity to restrain the transactions contemplated hereby.
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(l) No Registration Rights. No Person shall have any contractual or
other registration rights with respect to any of the shares of Class A Liberty
Media Group Stock to be issued in the Merger.
8.4 Conditions Precedent to the Obligations of the Company. The obligation of
the Company to consummate the Merger is also subject to the satisfaction at or
prior to the Closing Date of each of the following conditions, unless waived by
the Company:
(a) Accuracy of Representations and Warranties. All representations and
warranties of Parent and Liberty Media contained in this Agreement shall, if
specifically qualified by materiality, be true and correct and, if not so
qualified, be true and correct in all material respects in each case as of the
date of this Agreement and (except to the extent such representations and
warranties speak as of a specified earlier date) on and as of the Closing Date
as though made on and as of the Closing Date, except for changes permitted or
contemplated by this Agreement.
(b) Performance of Agreements. Each of Merger Sub, Liberty Media and
Parent shall have performed in all material respects all obligations and
agreements, and complied in all material respects with all covenants and
conditions, contained in this Agreement to be performed or complied with by it
prior to or on the Closing Date.
(c) Officers' Certificates. (i) Liberty Media shall have delivered to
the Company a certificate dated the Closing Date, signed by the President or any
Vice President of Liberty Media (but without personal liability thereto)
certifying as to the fulfillment of the conditions specified in Sections 8.4(a)
and 8.4(b) (insofar as each relates to Liberty Media) and (ii) Parent shall have
delivered to the Company a certificate, dated the Closing Date, signed by the
President or any Vice President of Parent (but without personal liability
thereto), certifying as to the fulfillment of the conditions specified in
Section 8.4(a) and 8.4(b) (insofar as each relates to Parent and Merger Sub).
(d) Absence of Injunctions. No permanent or preliminary Injunction or
restraining order or other order by any court or other Government Entity of
competent jurisdiction, or other legal restraint or prohibition, shall be in
effect preventing consummation of the transactions contemplated hereby as
provided herein, or permitting such consummation only subject to any condition
or restriction that has had or would have a Liberty Media Material Adverse
Effect.
(e) No Adverse Enactments. No statute, rule or regulation enacted,
promulgated, entered, issued, enforced or deemed applicable by any foreign or
United States federal, state or local Governmental Entity of competent
jurisdiction shall be in effect, and there shall be no action, suit or
proceeding brought by any such Governmental Entity and pending which (i) makes
this Agreement or the Merger illegal or (ii) has or is reasonably likely to have
a Liberty Media Material Adverse Effect.
(f) Governmental Consents, Etc. Other than the filing of the
Certificate of Merger with the Delaware Secretary of State and filings due after
the Effective Time, all Local Approvals, and all other Governmental Consents
(other than those specified in Section 8.1(c)) as are required in connection
with the consummation of the Merger shall have been obtained and shall be in
full force and effect, and all waiting periods, if any, applicable to the
consummation
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of the Merger imposed by any Governmental Entity shall have expired, other than
any of the foregoing which, if not obtained, in force or effect, made or expired
(as the case may be), would not, either individually or in the aggregate, be
reasonably likely to have a Liberty Media Material Adverse Effect; provided,
however, that any Governmental Consent by the FCC relating to the Company's FCC
Licenses described in Section 4.15 of the Company Disclosure Schedule shall not
be deemed ineffective for purposes of this subsection 8.4(f) solely because such
Governmental Consent is subject to appeal (provided that no notice of appeal
shall have been filed) or to reconsideration by the FCC on its own motion.
ARTICLE IX.
TERMINATION
9.1 Termination and Abandonment. This Agreement may be terminated and
the transactions contemplated hereby may be abandoned at any time prior to the
Effective Time, whether before or after approval and adoption of this Agreement
by the stockholders of the Company:
(i) by mutual consent of Parent, Liberty Media and the Company;
(ii) by any of the Company, Parent or Liberty Media: (A) if the
Merger shall not have been consummated on or before December 31, 2000, provided
that the right to terminate this Agreement pursuant to this clause (ii)(A) shall
not be available to any party whose failure to perform any of its obligations
under this Agreement has been the cause of or resulted in the failure of the
Merger to be consummated on or before such date, and provided further that if
the Merger has not been consummated on or before December 31, 2000 solely as a
result of the failure of the conditions set forth in Sections 8.1(b) (if the
failure to satisfy such condition is the result of any material acquisition or
other transaction, or agreement with respect thereto, engaged in, or entered
into, by Parent or Liberty Media or any of their respective Affiliates whether
prior to or after the date hereof), 8.1(c), 8.2(d), 8.2(f), 8.3(d), 8.3(f),
8.4(d), or 8.4(f) to be satisfied or waived, any party, by written notice to the
other parties, may extend such date up to February 28, 2001, (B) if there has
been a material breach of any representation, warranty, covenant or agreement on
the part of any other party contained in this Agreement, in each case that is
not curable, such that the conditions set forth in Sections 8.2(a) or (b) or
Sections 8.3(a) or (b), in the case of such a breach by the Company, or Sections
8.4(a) or (b), in the case of such a breach by Parent, Merger Sub or Liberty
Media, cannot be satisfied, (C) if any court of competent jurisdiction or other
competent Governmental Entity shall have issued an order, decree or ruling or
taken any other action permanently restraining, enjoining or otherwise
prohibiting the Merger and such order, decree, ruling or other action shall have
become final and nonappealable, or (D) the stockholders of the Company fail to
approve and adopt the Merger Proposal by the requisite vote (I) at the Special
Meeting, or (II) by the date one day prior to the applicable date referred to in
(A) above, provided the Registration Statement became effective (unless the
failure of the Registration Statement to become effective is the result of the
Company's material breach of Section 3.2(a)) and remained effective such that
the Proxy Statement could be mailed to the Company stockholders and the Special
Meeting held prior to such applicable date (provided that Parent shall not
terminate this Agreement pursuant to this clause (D) without the concurrence of
Liberty Media); or
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(iii) by Liberty Media if (x) the Company Board withdraws or
modifies, in a manner adverse to Parent or Liberty Media, its approval or
recommendation of the Merger or (y) the Company Board approves or recommends, or
authorizes the Company to enter into an agreement with respect to, an
Extraordinary Transaction.
(iv) by the Company, pursuant to Section 7.5(c).
9.2 Termination Fee; Effects of Termination.
(a) If (i) during the term of this Agreement, the Company Board
withdraws or modifies, in a manner adverse to Parent or Liberty Media, its
approval or recommendation of the Merger, or the Company Board approves, or
recommends, or authorizes the Company to enter into an agreement with respect
to, an Extraordinary Transaction, and (ii) this Agreement is thereafter
terminated pursuant to Section 9.1(ii), Section 9.1(iii) or Section 9.1(iv), and
(iii) in the case of any termination pursuant to Section 9.1(ii) only, the
Company thereafter enters into any definitive agreement with respect to or
consummates an Extraordinary Transaction with any Person other than Liberty
Media, Parent or an Affiliate of either of them, within six months after the
date of such termination, then, in any such case, the Company shall immediately
pay Liberty Media a fee of $3.5 million (the "Termination Fee"), payable by wire
transfer of same day funds.
(b) If this Agreement is terminated by the Company, Parent or Liberty
Media pursuant to Section 9.1, this Agreement forthwith shall become void and
there shall be no liability or obligation on the part of Parent, Liberty Media,
Merger Sub, the Company or any of their respective Affiliates, stockholders,
directors, officers, agents employees or Representatives except (i) as provided
in Sections 4.24, 6.8, 7.2 and 7.5, which shall survive such termination and
(ii) subject to Section 10.10, to the extent such termination results from the
willful breach by Parent, Liberty Media, Merger Sub or the Company of any of its
representations, warranties, covenants or agreements contained in this
Agreement.
(c) Notwithstanding anything to the contrary contained herein, any
election by the Company to pay, or by Liberty Media or Parent to receive, the
Termination Fee pursuant to Section 9.2(a) shall constitute full settlement of
any and all liabilities of the Company for damages under this Agreement in
respect of a termination of this Agreement pursuant to Sections 9.1(i), 9.1(ii)
and 9.1(iii) and shall be the sole measure of damages with respect to such
termination.
(d) In the event of any termination of this Agreement pursuant to
Section 9.1, Parent shall have no further obligation or liability hereunder,
except for its confidentiality obligations pursuant to Section 7.2.
ARTICLE X.
MISCELLANEOUS
10.1 No Waiver or Survival of Representations and Warranties. The respective
representations and warranties of Parent, Merger Sub, Liberty Media and the
Company contained herein or in any certificate or other instrument delivered
pursuant hereto prior to or at the Closing shall not be deemed waived or
otherwise affected by any investigation made by any party hereto.
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All representations and warranties made by each of the parties herein shall
expire at the Effective Time and shall thereafter be of no further force or
effect.
10.2 Notices. All notices, requests, demands, waivers and other communications
required or permitted to be given under this Agreement shall be in writing and
shall be deemed to have been duly given if delivered personally or mailed,
certified or registered mail with postage prepaid, or sent by telegram or
confirmed telex or telecopier, as follows:
(a) If to Parent or Merger Sub:
AT&T Corp.
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxx Xxxxx, XX 00000
Attention: Vice President-Law and Corporate Secretary
Facsimile: (000) 000-0000
with a copy to:
Wachtell, Lipton, Xxxxx & Xxxx
00 X. 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx X. Silk, Esq.
Facsimile: (000) 000-0000
(b) If to Liberty Media:
Liberty Media Corporation
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx, Esq.
Facsimile: (000) 000-0000
with copies to:
Xxxxx Xxxxx L.L.P.
000 Xxxxxxxxx Xxx.
Xxx Xxxx, XX 00000
Attention: Xxxx X. Leaf, Esq./Xxxxx Xxxxxx, Esq.
Facsimile: (000) 000-0000
and
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Liberty Media Corporation
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxx
Facsimile: (000) 000-0000
(c) If to the Company:
Video Services Corporation
000 Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
Attention: Xxxxx X. Xxxxxxxxxx
Facsimile: (000) 000-0000
with a copy to:
Xxxxx Xxxxxxx Xxxxxxx & Xxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxx, Esq./Xxxxx X. Xxxxx, Esq.
Facsimile: (000) 000-0000
or to such other Person or address as any party shall specify by notice in
writing to the other party. All such notices, requests, demands, waivers and
communications shall be deemed to have been received on the date of delivery or
on the third business day after the mailing thereof, except that any notice of a
change of address shall be effective only upon actual receipt thereof.
10.3 Entire Agreement. This Agreement (including the Schedules, Exhibits and
other documents referred to herein), together with (in the case of the Company
and Liberty Media) the Mutual Nondisclosure Agreement, dated as of March 20,
2000, between the Company and Liberty Media, constitutes the entire agreement
between the parties and supersedes all prior agreements and understandings, oral
and written, between the parties with respect to the subject matter hereof.
10.4 Assignment; Binding Effect; Benefit. Neither this Agreement nor any of the
rights, benefits or obligations hereunder may be assigned by any party (whether
by operation of law or otherwise) without the prior written consent of the other
party. Subject to the preceding sentence, this Agreement will be binding upon,
inure to the benefit of and be enforceable by, the parties and their respective
successors and permitted assigns. Except for Section 7.10, nothing in this
Agreement, expressed or implied, is intended to confer on any person other than
the parties or their respective successors and permitted assigns, any rights,
remedies, obligations or liabilities under or by reason of this Agreement.
10.5 Amendment. This Agreement may be amended by action of all the parties, by
action taken or authorized by their respective Boards of Directors, at any time
before or after approval and adoption of this Agreement and the Merger by the
stockholders of the Company, but, after any such approval by the stockholders of
the Company, no amendment shall be made which by
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law requires further approval by such stockholders of the Company without such
further approval. This Agreement may not be amended except by an instrument in
writing signed on behalf of each of the parties. Notwithstanding the foregoing,
(a) the provisions of Sections 7.4 (other than to the extent related to Sections
7.4(c)(i), and 7.4(i)) and 7.5 may be amended by an instrument signed in writing
by the Company and Liberty Media, without any action on the part of Parent or
Merger Sub and (b) following the Effective Time, this sentence of this Section
10.5 may only be amended by an instrument signed in writing by Parent, Liberty
Media and, on behalf of the Company, by at least one individual who was serving
on the board of directors of the Company immediately prior to the Effective
Time.
10.6 Extension; Waiver. At any time prior to the Effective Time, the parties, by
action taken or authorized by each such party's Board of Directors, may, to the
extent legally allowed, (i) extend the time specified herein for the performance
of any of the obligations of the other parties, (ii) waive any inaccuracies in
the representations and warranties of the other parties contained herein or in
any document delivered pursuant hereto, (iii) waive compliance by the other
parties with any of the agreements or covenants of such other parties contained
herein or (iv) waive any condition to such waiving party's obligation to
consummate the transactions contemplated hereby or to any of such waiving
party's other obligations hereunder. Any agreement on the part of a party hereto
to any such extension or waiver shall be valid only if set forth in a written
instrument signed on behalf of such party. Any such extension or waiver by any
party shall be binding on such party but not on any other party entitled to the
benefits of the provision of this Agreement affected unless such other party
also has agreed to such extension or waiver. No such waiver shall constitute a
waiver of, or estoppel with respect to, any subsequent or other breach or
failure to strictly comply with the provisions of this Agreement. The failure of
any party to insist on strict compliance with this Agreement or to assert any of
its rights or remedies hereunder or with respect hereto shall not constitute a
waiver of such rights or remedies. Whenever this Agreement requires or permits
consent or approval by any party, such consent or approval shall be effective if
given in writing in a manner consistent with the requirements for a waiver of
compliance as set forth in this Section 10.6. Any waiver by either Parent or
Liberty Media shall require the consent of both Parent and Liberty Media.
Notwithstanding the foregoing, the provisions of Sections 7.4 (other than to the
extent related to Sections 7.4(c)(i) and 7.4(h)) and 7.5 may be waived by an
instrument signed in writing by the Company and Liberty Media without any action
on the part of Parent or Merger Sub.
10.7 Parent Transactions. Notwithstanding anything to the contrary in this
Agreement, the pursuit and/or consummation by Parent or any of its Subsidiaries
or Affiliates of any Parent Transaction shall be deemed not to be a breach of
any provision of this Agreement.
10.8 Headings. The table of contents and headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. The phrase "made available" in this Agreement
shall mean that the information referred to has been made available if requested
by the party to whom such information is to be made available.
10.9 Counterparts. This Agreement may be executed in counterparts, each of which
shall be deemed to be an original, and all of which together shall be deemed to
be one and the same instrument.
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10.10 Applicable Law. This Agreement and the legal relations between the parties
hereunder shall be governed by and construed in accordance with the laws of the
State of Delaware, without regard to the conflict of laws thereof.
10.11 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 seek an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement in any court of the United States or
in Delaware state court, this being in addition to any other remedy to which
they are entitled at law or in equity. In addition, each of the parties hereto
(a) consents to submit itself to the non-exclusive jurisdiction of any Federal
court located in the State of Delaware or any Delaware state court in the event
any dispute arises out of this Agreement or any of the transactions contemplated
by this Agreement, and (b) agrees that it will not attempt to deny or defeat
such personal jurisdiction by motion or other request for leave from any such
court.
10.12 Company Disclosure Schedule. The parties acknowledge that the Company
Disclosure Schedule (i) relates to certain matters concerning the disclosures
required and transactions contemplated by this Agreement, (ii) is qualified in
its entirety by reference to specific provisions of this Agreement and (iii) is
not intended to constitute and shall not be construed as indicating that such
matter is required to be disclosed, nor shall such disclosure be construed as an
admission that such information is material with respect to the Company, or any
of its Subsidiaries or will have or is likely to have a Material Adverse Effect,
Liberty Media Material Adverse Effect, Parent Material Adverse Effect or Parent
Adverse Effect. Disclosure of the information contained in one section or part
of the Company Disclosure Schedule shall be deemed as proper disclosure for
other sections or parts of the Company Disclosure Schedule only if appropriately
cross-referenced or if the relevance thereof is reasonably apparent from the
context in which it appears and provided, further that information set forth in
the Company Disclosure Schedule shall be deemed to qualify the representations
in Section 4.1, 4.2 and 4.3 of this Agreement only if such information is set
forth in Section 4.1, 4.2 or 4.3, as applicable, of the Company Disclosure
Schedule.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement and
Plan of Merger as of the date first above written.
AT&T CORP.
By _____________________
Name:
Title:
VIDEO SERVICES CORPORATION
By: _____________________
Name:
Title:
LIBERTY MEDIA CORPORATION
By: ______________________
Name:
Title:
E-GROUP MERGER CORP.
By: ______________________
Name:
Title:
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