EXHIBIT 2.2
APPENDIX A
EXECUTION COPY
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
ADELPHIA COMMUNICATIONS CORPORATION
ADELPHIA ACQUISITION SUBSIDIARY, INC.
AND
CENTURY COMMUNICATIONS CORP.
----------------------------
DATED AS OF MARCH 5, 1999
----------------------------
AS AMENDED BY THE
FIRST AMENDMENT TO THE
AGREEMENT AND PLAN OF MERGER
----------------------------
DATED AS OF JULY 12, 1999
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AND
AS AMENDED BY THE
SECOND AMENDMENT TO THE
AGREEMENT AND PLAN OF MERGER
----------------------------
DATED AS OF JULY 29, 1999
----------------------------
TABLE OF CONTENTS
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ARTICLE I
THE MERGER............................................................ 4
Section 1.01 The Merger.............................................. 4
Section 1.02 Conversion of Shares.................................... 5
Section 1.03 Merger Consideration.................................... 5
Section 1.04 Cash and Stock Elections; Proration..................... 6
Section 1.05 Letter of Transmittal................................... 9
Section 1.06 Deposit of Merger Consideration......................... 9
Section 1.07 Surrender and Payment................................... 9
Section 1.08 Adjustments............................................. 10
Section 1.09 Fractional Shares....................................... 10
Section 1.10 Withholding of Tax...................................... 10
Section 1.11 Lost Certificates....................................... 10
Section 1.12 Stock Transfer Books.................................... 10
Section 1.13 Shareholder Approval.................................... 10
Section 1.14 Stock Options and Restricted Stock...................... 11
ARTICLE II
THE SURVIVING CORPORATION............................................. 11
Section 2.01 Certificate of Incorporation............................ 11
Section 2.02 Bylaws.................................................. 11
Section 2.03 Directors............................................... 11
Section 2.04 Officers................................................ 11
Section 2.05 Name.................................................... 12
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY......................... 12
Section 3.01 Corporate Existence and Power........................... 12
Section 3.02 Corporate Authorization................................. 12
Section 3.03 Governmental Authorization.............................. 12
Section 3.04 Non-contravention....................................... 13
Section 3.05 Capitalization.......................................... 13
Section 3.06 Significant Subsidiaries................................ 14
Section 3.07 SEC Filings............................................. 14
Section 3.08 Financial Statements.................................... 14
Section 3.09 Disclosure Documents.................................... 14
Section 3.10 Absence of Certain Changes or Events.................... 15
Section 3.11 Litigation.............................................. 15
Section 3.12 Taxes................................................... 15
Section 3.13 Employee Benefit Plans.................................. 15
Section 3.14 Brokers................................................. 17
Section 3.15 Compliance with Applicable Laws......................... 17
Section 3.16 Environmental Matters................................... 17
Section 3.17 Opinion of Financial Advisor............................ 17
Section 3.18 No Other Representations................................ 17
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB........... 17
Section 4.01 Corporate Existence and Power........................ 17
Section 4.02 Corporate Authorization.............................. 18
Section 4.03 Governmental Authorization........................... 18
Section 4.04 Non-contravention.................................... 18
Section 4.05 Capitalization....................................... 19
Section 4.06 Significant Subsidiaries............................. 19
Section 4.07 SEC Filings.......................................... 20
Section 4.08 Financial Statements................................. 20
Section 4.09 Disclosure Documents................................. 20
Section 4.10 Absence of Certain Changes or Events................. 21
Section 4.11 Litigation........................................... 21
Section 4.12 Brokers.............................................. 21
Section 4.13 Compliance with Applicable Laws...................... 21
Section 4.14 Interested Shareholder............................... 21
Section 4.15 Ownership of Merger Sub; No Prior Activities......... 21
Section 4.16 Opinion of Financial Advisor......................... 21
Section 4.17 No Other Representations............................. 21
ARTICLE V
COVENANTS OF THE COMPANY........................................... 22
Section 5.01 Conduct of the Company............................... 22
Section 5.02 Other Transactions................................... 23
Section 5.03 Affiliates........................................... 24
ARTICLE VI
COVENANTS OF PARENT, MERGER SUB AND THE SURVIVING CORPORATION...... 24
Section 6.01 Indemnification; Directors' and Officers' Insurance.. 24
Section 6.02 Employee Benefit Arrangements........................ 25
Section 6.03 Listing, Registration................................ 25
Section 6.04 Conduct of Parent.................................... 25
Section 6.05 Obligations of Merger Sub............................ 25
ARTICLE VII
COVENANTS OF PARENT, MERGER SUB AND THE COMPANY.................... 25
Section 7.01 Reasonable Best Efforts.............................. 25
Section 7.02 Registration Statement............................... 25
Section 7.03 Company Shareholder Meeting.......................... 26
Section 7.04 Consents............................................. 26
Section 7.05 Public Announcements................................. 26
Section 7.06 Notification of Certain Matters...................... 26
Section 7.07 Antitrust Matters.................................... 27
Section 7.08 Access to Information................................ 27
Section 7.09 Tax-free Reorganization.............................. 27
Section 7.10 Dissenting Shareholders.............................. 27
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Section 7.11 Registration Rights....................................... 28
Section 7.12 Board of Directors........................................ 28
Section 7.13 Citizens Joint Venture.................................... 28
ARTICLE VIII
CONDITIONS TO THE MERGER................................................ 29
Section 8.01 Conditions to the Obligations of Each Party............... 29
Section 8.02 Conditions Precedent to the Obligations of Merger Sub..... 29
Section 8.03 Conditions Precedent to the Obligations of the Company.... 30
ARTICLE IX
TERMINATION............................................................. 30
Section 9.01 Termination............................................... 30
Section 9.02 Effect of Termination..................................... 31
Section 9.03 Fees and Expenses......................................... 31
ARTICLE X
MISCELLANEOUS........................................................... 31
Section 10.01 Notices................................................... 31
Section 10.02 Survival of Representations, Warranties and Agreements.... 32
Section 10.03 Amendment................................................. 32
Section 10.04 Extension; Waiver......................................... 32
Section 10.05 Successors and Assigns.................................... 32
Section 10.06 Governing Law............................................. 32
Section 10.07 Jurisdiction.............................................. 32
Section 10.08 Counterparts; Effectiveness............................... 33
Section 10.09 Entire Agreement; No Third-party Beneficiaries............ 33
Section 10.10 Headings.................................................. 33
Section 10.11 Severability.............................................. 33
Section 10.12 Definitions............................................... 33
Exhibit A: Class B Voting Agreement
Exhibit B: Rigas Class B Voting Agreement
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement") is dated as of March
5, 1999 and as amended on July 12, 1999 and July 29, 1999 among Adelphia
Communications Corporation, a Delaware corporation ("Parent"), Adelphia
Acquisition Subsidiary, Inc., a Delaware corporation and a direct, wholly-owned
subsidiary of Parent ("Merger Sub") and Century Communications Corp., a New
Jersey corporation (the "Company").
RECITALS
A. The respective Boards of Directors of Parent, Merger Sub and the Company
have approved, and deem it advisable and in the best interests of their
respective shareholders to consummate, the acquisition of the Company by Parent
on the terms and conditions set forth herein.
B. The parties intend that the acquisition contemplated by this Agreement
constitute a "reorganization" within the meaning of Section 368(a) of the Code
(as defined in Section 10.12(a)).
C. As an inducement to Parent to enter into this Agreement and to incur the
obligations set forth herein, all of the holders of Class B Company Common Stock
(as defined in Section 1.02(a)) (the "Class B Shareholders"), concurrently with
the execution and delivery of this Agreement, are entering into a Voting
Agreement with Parent in the form of Exhibit A (the "Class B Voting Agreement")
pursuant to which the Class B Shareholders have agreed to vote the shares of the
Class B Company Common Stock (as defined in Section 1.02(a)) owned by them in
favor of this Agreement and the Merger.
D. As an inducement to the Company to enter into this Agreement and to
incur the obligations set forth herein, certain shareholders of Parent (the
"Parent Shareholders"), concurrently with the execution and delivery of this
Agreement, are entering into a Voting Agreement with the Company in the form of
Exhibit B (the "Rigas Class B Voting Agreement") pursuant to which the Parent
Shareholders have agreed to vote the shares of Parent Common Stock (as defined
in Section 1.03(a)) owned by them in favor of this Agreement and the Merger.
In consideration of the premises and the respective representations,
warranties, covenants, and agreements set forth herein, the parties agree as
follows.
ARTICLE I
THE MERGER
Section 1.01 The Merger.
(a) At the Effective Time (as defined in Section 1.01(c)), the Company
shall be merged (the "Merger") with and into Merger Sub in accordance with the
New Jersey Business Corporation Act (the "NJBCA") and the General Corporation
Law of the State of Delaware, whereupon the separate existence of the Company
will cease, and Merger Sub shall be the surviving corporation (the "Surviving
Corporation").
(b) The closing of the Merger (the "Closing") will take place at 10:00 a.m.
(New York City time) on a date to be specified by the parties (the "Closing
Date"), which shall be no later than the second Business Day after satisfaction
of the conditions set forth in Article VIII, at the offices of Xxxxxx, Xxxx &
Xxxxxxxx LLP, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, unless the parties
agree in writing to another time, date or place.
(c) Upon the Closing, the Company and Merger Sub will file a certificate of
merger with the Secretaries of State of the States of New Jersey and Delaware
and make all other filings or recordings required by New Jersey
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and Delaware law in connection with the Merger. The Merger will become effective
at such time as the certificates of merger are filed with the Secretaries of
State of the States of New Jersey and Delaware or at such later time as is
specified in the certificates of merger (the "Effective Time").
(d) From and after the Effective Time, the Surviving Corporation will
possess all the rights, powers, privileges and franchises and be subject to all
of the obligations, liabilities, restrictions and disabilities of the Company
and Merger Sub, all as provided under the Delaware General Corporation Law.
Section 1.02 Conversion of Shares. At the Effective Time:
(a)(i) Subject to the limitations set forth in Section 1.02(a)(iii),
each share of Class A capital stock of the Company, par value $0.01 per
share (the "Class A Company Common Stock"), issued and outstanding
immediately prior to the Effective Time (x) will be converted into the
right to receive the Century Class A Per Share Stock Amount (as defined in
Section 1.03) or (y) at the election of the holder thereof, which election
will be available on a share-by-share basis as provided in Section 1.04,
will be converted into the right to receive the Century Class A Per Share
Cash Amount (as defined in Section 1.03).
(ii) Subject to the limitations set forth in Section 1.02(a)(iii),
each share of Class B capital stock of the Company, par value $0.01 per
share (the "Class B Company Common Stock" and together with the Class A
Company Common Stock, the ("Company Common Stock"), issued and outstanding
immediately prior to the Effective Time (x) will be converted into the
right to receive the Century Class B Per Share Stock Amount (as defined in
Section 1.03) or (y) at the election of the holder thereof, which election
will be available on a share-by-share basis as provided in Section 1.04,
will be converted into the right to receive the Century Class B Per Share
Cash Amount (as defined in Section 1.03).
(iii) Notwithstanding any provision contained herein to the contrary
(including the Cash Elections and the Stock Elections), at the Effective
Time (excluding shares held by Dissenting Shareholders), (w) not more than
twenty and 76/100 percent (20.76%) of the shares of Class A Company Common
Stock outstanding immediately prior to the Effective Time (excluding shares
held by Dissenting Shareholders) will be converted into the right to
receive the Century Class A Per Share Cash Amount, (x) not more than
seventy-nine and 24/100 percent (79.24%) shares of Class A Company Common
Stock outstanding immediately prior to the Effective Time (excluding shares
held by Dissenting Shareholders) will be converted into the right to
receive the Century Class A Per Share Stock Amount, (y) not more than
twenty-four and 54/100 percent (24.54%) shares of Class B Company Common
Stock outstanding immediately prior to the Effective Time (excluding shares
held by Dissenting Shareholders) will be converted into the right to
receive the Century Class B Per Share Cash Amount and (z) not more than
seventy-five and 46/100 percent (75.46%) shares of Class B Company Common
Stock outstanding immediately prior to the Effective Time (excluding shares
held by Dissenting Shareholders) will be converted into the right to
receive the Century Class B Per Share Stock Amount.
(b) Each share of Company Common Stock held by the Company as treasury
stock or owned by Parent or any of the Parent Subsidiaries immediately prior to
the Effective Time will be canceled, and no payment will be made with respect
thereto.
(c) Each issued and outstanding share of capital stock of Merger Sub will
remain outstanding and will be unchanged as a result of the Merger.
Section 1.03 Merger Consideration. Subject to Section 1.04(f) hereof, the
term "Merger Consideration" means: (a) for each share of Class A Company Common
Stock with respect to which an election to receive shares of the Class A Common
Stock, par value $.01 per share, of the Parent ("Parent Common Stock") has been
made or deemed made pursuant to Section 1.04 and not revoked (the "Class A Stock
Election"), the right to receive 0.77269147 shares of Parent Common Stock (the
"Century Class A Per Share Stock Amount"), (b) for each share of Class A Company
Common Stock with respect to which an
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election to receive cash has been made pursuant to Section 1.04 and not revoked
(the "Class A Cash Election"), the right to receive $44.14 in cash (the "Century
Class A Per Share Cash Amount"), (c) for each share of Class B Company Common
Stock with respect to which an election to receive shares of Parent Common Stock
has been made or deemed made pursuant to Section 1.04 and not revoked (the
"Class B Stock Election" and together with the Class A Stock Election, the
"Stock Election"), the right to receive 0.84271335 shares of Parent Common Stock
(the "Century Class B Per Share Stock Amount", and (d) for each share of Class
B Company Common Stock with respect to which an election to receive cash has
been made pursuant to Section 1.04 and not revoked (the "Class B Cash Election"
and together with the Class A Cash Election the "Cash Election"), the right to
receive $48.14 in cash (the "Century Class B Per Share Cash Amount").
Section 1.04 Cash and Stock Elections; Proration.
(a) Each Person who, at the Effective Time, is a record holder of Company
Common Stock (other than Dissenting Shareholders and holders of shares to be
canceled as set forth in Section 1.02(b)) will have the right to submit an
Election Form (as defined in Section 1.04(b)) specifying the number of shares of
Company Common Stock that such Person desires to have converted into the right
to receive, subject to Section 1.04(f) hereof, (i) the Century Class A Per Share
Stock Amount pursuant to a Class A Stock Election, (ii) the Century Class A Per
Share Cash Amount pursuant to a Class A Cash Election, (iii) the Century Class B
Per Share Stock Amount pursuant to a Class B Stock Election or (iv) the Century
Class B Per Share Cash Amount pursuant to a Class B Cash Election.
(b) The Parent will prepare a form of election, which form will be subject
to the reasonable approval of the Company (the "Election Form"), to be mailed by
the Company with the Proxy Statement/Prospectus (as defined in Section 7.03(b))
to the record holders of Company Common Stock as of the record date for the
Company Shareholder Meeting (as defined in Section 7.03(a)). The Company will
use its reasonable best efforts to make the Election Form available to all
persons who become record holders of Company Common Stock during the period
between such record date and the Election Deadline (as defined in Section
1.04(c)) and to all holders of outstanding Options (as defined in Section
1.14(a)).
(c) Any Cash Election will have been validly made only if the Exchange
Agent (as defined in Section 1.05) shall have received, by 5:00 p.m. (New York
City time) on the Business Day immediately preceding the Closing Date (the
"Election Deadline"), an Election Form properly completed and executed by such
holder accompanied by the certificates for the shares of Company Common Stock to
which such Election Form relates, or by an appropriate guarantee of delivery of
such certificates from a member of any registered national securities exchange
or of the National Association of Securities Dealers, Inc. or a commercial bank
or trust company in the United States as set forth in such Election Form.
Holders of outstanding Options that become exercisable and vested at the
Effective Time may deliver an Election Form to the Exchange Agent relating to
shares of Class A Company Common Stock issuable upon exercise of such Options up
to 5:00 p.m. (New York City time) on the Closing Date. Holders of record of
shares of Company Common Stock who hold such shares as nominees, trustees or in
other representative capacities may submit multiple Election Forms, provided
that such holder certifies that each such Election Form covers all the shares of
Company Common Stock held by each such holder for a particular beneficial owner.
(d) Any holder of Company Common Stock may revoke such holder's election by
written notice to the Exchange Agent received by the close of business on the
day prior to the Election Deadline. All Election Forms automatically will be
revoked if the Exchange Agent is notified in writing by Parent and the Company
that this Agreement has been terminated. The determination of the Exchange Agent
will be binding as to whether or not (i) Election Forms have been properly
completed, signed and submitted or revoked and (ii) immaterial defects in an
Election Form should be disregarded. The Exchange Agent will be under no
obligation to notify any person of any defect in an Election Form submitted to
the Exchange Agent.
(e) As of the Election Deadline, to the extent that a holder of Company
Common Stock (i) shall not have submitted to the Exchange Agent an effective,
properly completed Election Form with respect to all or certain
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of the shares held by such holder (including shares held by Dissenting
Shareholders as of the Election Deadline as to which appraisal rights are
subsequently withdrawn, not perfected or forfeited) or (ii) shall have properly
revoked and not properly submitted to the Exchange Agent a subsequent Election
Form with respect to all or certain of the shares, such holder will be deemed to
have made the Class A Stock Election or Class B Stock Election, as applicable,
with respect to such shares.
(f)(i) If the aggregate number of shares of Class A Company Common Stock
with respect to which Class A Cash Elections have been made exceeds the
aggregate number of shares of Class A Company Common Stock which, pursuant to
Section 1.02(a)(iii) hereof, may be converted into the right to receive cash in
the Merger, then,
(A) each share of Class A Company Common Stock with respect to which a
Class A Stock Election shall have been made shall be converted into the
right to receive the Century Class A Per Share Stock Amount; and
(B) each share of Class A Company Common Stock with respect to which a
Class A Cash Election shall have been made shall be converted into the
right to receive:
(1) the amount in cash, without interest, equal to the product of
(x) the Century Class A Per Share Cash Amount and (y) a fraction (the
"Class A Cash Fraction"), the numerator of which shall be the
aggregate number of shares of Class A Company Common Stock which,
pursuant to Section 1.02(a)(iii) hereof, may be converted into the
right to receive cash in the Merger, and the denominator of which
shall be the aggregate number of shares of Class A Company Common
Stock with respect to which Class A Cash Elections shall have been
made, and
(2) the number of shares of Parent Common Stock equal to the
product of (x) the Century Class A Per Share Stock Amount and (y) a
fraction equal to one minus the Class A Cash Fraction.
(ii) If the aggregate number of shares of Class A Company Common Stock with
respect to which Class A Stock Elections have been made exceeds the aggregate
number of shares of Class A Company Common Stock which, pursuant to Section
1.02(a)(iii) hereof, may be converted into the right to receive Parent Common
Stock in the Merger, then,
(A) each share of Class A Company Common Stock with respect to which a
Class A Cash Election shall have been made shall be converted into the
right to receive the Century Class A Per Share Cash Amount; and
(B) each share of Class A Company Common Stock with respect to which a
Class A Stock Election shall have been made shall be converted into the
right to receive:
(1) the number of shares of Parent Common Stock equal to the
product of (x) the Century Class A Per Share Stock Amount and (y) a
fraction (the "Class A Stock Fraction"), the numerator of which shall
be the aggregate number of shares of Class A Company Common Stock
which, pursuant to Section 1.02(a)(iii) hereof, may be converted into
the right to receive Parent Common Stock in the Merger, and the
denominator of which shall be the aggregate number of shares of Class
A Company Common Stock with respect to which Class A Stock Elections
shall have been made, and
(2) the amount in cash, without interest, equal to the product of
(x) the Century Class A Per Share Cash Amount and (y) a fraction equal
to one minus the Class A Stock Fraction.
(iii) If the aggregate number of shares of Class A Company Common Stock
with respect to which Class A Cash Elections have been made equals the aggregate
number of shares of Class A Company Common Stock which, pursuant to Section
1.02(a)(iii) hereof, may be converted into the right to receive cash and Parent
Common Stock in the Merger, then,
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(A) each share of Class A Company Common Stock with respect to which a
Class A Stock Election shall have been made shall be converted into the
right to receive the Century Class A Per Share Stock Amount; and
(B) each share of Class A Company Common Stock with respect to which a
Class A Cash Election shall have been made shall be converted into the
right to receive the Century Class A Per Share Cash Amount.
(iv) If the aggregate number of shares of Class B Company Common Stock with
respect to which Class B Cash Elections have been made exceeds the aggregate
number of shares of Class B Company Common Stock which, pursuant to Section
1.02(a)(iii) hereof, may be converted into the right to receive cash in the
Merger, then,
(A) each share of Class B Company Common Stock with respect to which a
Class B Stock Election shall have been made shall be converted into the
right to receive the Century Class B Per Share Stock Amount; and
(B) each share of Class B Company Common Stock with respect to which a
Class B Cash Election shall have been made shall be converted into the
right to receive:
(1) the amount in cash, without interest, equal to the product of
(x) the Century Class B Per Share Cash Amount and (y) a fraction (the
"Class B Cash Fraction"), the numerator of which shall be the
aggregate number of shares of Class B Company Common Stock which,
pursuant to Section 1.02(a)(iii) hereof, may be converted into the
right to receive cash in the Merger, and the denominator of which
shall be the aggregate number of shares of Class B Company Common
Stock with respect to which Class B Cash Elections shall have been
made, and
(2) the number of shares of Parent Common Stock equal to the
product of (x) the Century Class B Per Share Stock Amount and (y) a
fraction equal to one minus the Class B Cash Fraction.
(v) If the aggregate number of shares of Class B Company Common Stock with
respect to which Class B Stock Elections have been made exceeds the aggregate
number of shares of Class B Company Common Stock which, pursuant to Section
1.02(a)(iii) hereof, may be converted into the right to receive Parent Common
Stock in the Merger, then,
(A) each share of Class B Company Common Stock with respect to which a
Class B Cash Election shall have been made shall be converted into the
right to receive the Century Class B Per Share Cash Amount; and
(B) each share of Class B Company Common Stock with respect to which a
Class B Stock Election shall have been made shall be converted into the
right to receive:
(1) the number of shares of Parent Common Stock equal to the
product of (x) the Century Class B Per Share Stock Amount and (y) a
fraction (the "Class B Stock Fraction"), the numerator of which shall
be the aggregate number of shares of Class B Company Common Stock
which, pursuant to Section 1.02(a)(iii) hereof, may be converted into
the right to receive Parent Common Stock in the Merger, and the
denominator of which shall be the aggregate number of shares of Class
B Company Common Stock with respect to which Class B Stock Elections
shall have been made, and
(2) the amount in cash, without interest, equal to the product of
(x) the Century Class B Per Share Cash Amount and (y) a fraction equal
to one minus the Class B Stock Fraction.
(vi) If the aggregate number of shares of Class B Company Common Stock with
respect to which Class B Cash Elections have been made equals the aggregate
number of shares of Class B Company Common Stock which, pursuant to Section
1.02(a)(iii) hereof, may be converted into the right to receive cash and Parent
Common Stock in the Merger, then,
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(A) each share of Class B Company Common Stock with respect to which a
Class B Stock Election shall have been made shall be converted into the
right to receive the Century Class B Per Share Stock Amount; and
(B) each share of Class B Company Common Stock with respect to which a
Class B Cash Election shall have been made shall be converted into the
right to receive the Century Class B Per Share Cash Amount.
Section 1.05 Letter of Transmittal. On or prior to the Effective Time,
Parent will authorize one or more commercial banks or trust companies acceptable
to the Company, organized under the laws of the United States or any state
thereof, to act as Exchange Agent hereunder (the "Exchange Agent"). Promptly
after the Effective Time, Parent will cause the Exchange Agent to mail to each
record holder of Company Common Stock at the Effective Time (i) a letter of
transmittal (the "Letter of Transmittal") that will specify that delivery will
be effected, and risk of loss and title to the certificates formerly
representing the Company Common Stock will pass, upon delivery of such
certificates to the Exchange Agent and will be in such form and have such other
provisions, including appropriate provisions with respect to back-up
withholding, as Parent reasonably may specify and (ii) instructions for use in
effecting the surrender of the certificates formerly representing shares of
Company Common Stock in exchange for the Merger Consideration.
Section 1.06 Deposit of Merger Consideration. On or prior to the Effective
Time, Parent will deposit with the Exchange Agent, for the benefit of the former
holders of Company Common Stock, cash and certificates sufficient to pay the
Merger Consideration for all the shares of Company Common Stock. The shares of
Parent Common Stock into which shares of Company Common Stock will be converted
pursuant to the Merger will be deemed to have been issued at the Effective Time
for purposes of entitlement to dividends declared, if any, after the Effective
Time.
Section 1.07 Surrender and Payment.
(a) Upon surrender for cancellation to the Exchange Agent of a certificate
formerly representing shares of Company Common Stock, together with the Letter
of Transmittal, duly executed and completed in accordance with the instructions
thereto, the holder thereof will be entitled to receive (i) a certified or bank
cashier's check in the amount equal to the aggregate amount of Merger
Consideration that takes the form of cash which such holder has the right to
receive pursuant to the provisions of this Article I (including any dividends or
distributions related thereto which such former holder of Company Common Stock
is entitled to receive pursuant to the provisions of Section 1.07(c) and any
cash in lieu of fractional shares of Parent Common Stock pursuant to Section
1.09) and/or (ii) certificates representing the aggregate number of shares of
Parent Common Stock with respect to the Merger Consideration that takes the form
of Parent Company Stock which such holder has the right to receive pursuant to
the provisions of this Article I, less the amount of any required withholding
taxes, if any, in accordance with Section 1.10. After the Effective Time and
until so surrendered, each certificate representing shares of Company Common
Stock will represent for all purposes only the right to receive the Merger
Consideration.
(b) If the Merger Consideration (or any portion thereof) is to be delivered
to a Person other than the Person in whose name the surrendered certificate or
certificates are registered, it will be a condition of such delivery that the
surrendered certificate or certificates shall be properly endorsed or otherwise
be in proper form for transfer and that the Person requesting such payment shall
pay any transfer or other Taxes required by reason of the delivery of the Merger
Consideration to a Person other than the registered holder of the surrendered
certificate or certificates or such Person shall establish to the satisfaction
of the Exchange Agent that any such Tax has been paid or is not applicable.
(c) No dividends or other distributions declared or made with respect to
Parent Common Stock on or after the Effective Time will be paid to the holder of
any certificate that theretofore evidenced shares of Company Common Stock until
such certificate is surrendered as provided in this Section 1.07. Upon such
surrender,
9
Parent will be pay to the holder of the certificates evidencing
shares of Parent Common Stock issued in exchange therefor, without interest, the
amount of dividends or other distributions with a record date after the
Effective Time payable with respect to shares of Parent Common Stock.
(d) Any portion of the Merger Consideration made available to the Exchange
Agent pursuant to Section 1.06 that remains unclaimed by holders of shares of
Company Common Stock two years after the Effective Time will be returned to
Parent upon demand. Any such holder who has not exchanged shares of Company
Common Stock for the Merger Consideration in accordance with this Article I
prior to that time thereafter will look only to Parent for payment of the Merger
Consideration in respect of such shares of Company Common Stock.
Section 1.08 Adjustments. If at any time during the period between the date
of this Agreement and the Effective Time, any change in the outstanding shares
of capital stock of Parent occurs, including by means of any reclassification,
recapitalization, stock split or combination, exchange or readjustment of
shares, or any stock dividend thereon with a record date during such period, the
Merger Consideration will be adjusted appropriately.
Section 1.09 Fractional Shares. No fractional shares of Parent Common Stock
will be issued in the Merger. All fractional shares of Parent Common Stock that
a holder of shares of Company Common Stock otherwise would be entitled to
receive as a result of the Merger will be aggregated. If a fractional share
results from such aggregation, in lieu thereof such holder will be entitled to
receive from Parent, promptly after the Effective Time, an amount in cash
determined by multiplying the closing price of a share of Parent Common Stock on
the Nasdaq National Market on the trading day immediately preceding the
Effective Time by the fraction of a share of Parent Common Stock to which such
holder would otherwise have been entitled.
Section 1.10 Withholding of Tax. Parent or the Exchange Agent will be
entitled to deduct and withhold from the consideration otherwise payable
pursuant to this Agreement to any former holder of Company Common Stock such
amounts as Parent or the Exchange Agent are required to deduct and withhold with
respect to the making of such payment under the Code, or any provision of state,
local or foreign Tax law. To the extent that amounts are so withheld by Parent
or the Exchange Agent, such withheld amounts will be treated for all purposes of
this Agreement as having been paid to the former holder of Company Common Stock
in respect of whom such deduction and withholding was made by Parent.
Section 1.11 Lost Certificates. If any certificate evidencing Company
Common Stock has been lost, stolen or destroyed, upon the making of an affidavit
of that fact by the Person claiming such certificate to be lost, stolen or
destroyed and, if reasonably required by Parent, the posting by such Person of a
bond in such reasonable amount as Parent may direct as indemnity against claims
that may be made against it with respect to such certificate, the Exchange Agent
will issue in exchange for such lost, stolen or destroyed certificate the Merger
Consideration to which such Person may be entitled pursuant to this Article I
and cash and any dividends or other distributions to which such Person may be
entitled pursuant to Section 1.06(a).
Section 1.12 Stock Transfer Books. At the Effective Time, the stock
transfer books of the Company will be closed and there will be no further
registration of transfers of shares of Company Common Stock on the records of
the Company. Certificates formerly representing shares of Company Common Stock
that are presented to the Surviving Corporation after the Effective Time will be
canceled and exchanged for certificates representing shares of Parent Common
Stock.
Section 1.13 Shareholder Approval. This Agreement will be submitted for
adoption and approval to the holders of shares of Class A Company Common Stock
and the holders of shares of Class B Company Common Stock at the Company
Shareholder Meeting (as defined in Section 7.03) in accordance with the
provisions of this Agreement. The affirmative vote of a majority of the votes
cast by the holders of shares entitled to vote thereon of Class A Company Common
Stock and Class B Company Common Stock (voting as separate classes) is required
to approve this Agreement. No other approval of the Company's shareholders is
required in order to consummate the Merger.
10
Section 1.14 Stock Options and Restricted Stock. As of the Effective Time:
(a) Each outstanding option (an "Option") to purchase shares of Class A
Company Common Stock granted under the Company's 1985 Stock Option Plan, the
1993 Non-Employee Directors' Stock Option Plan and the 1994 Stock Option Plan,
or any similar plan or arrangement (collectively, the "Option Plans"), whether
or not then exercisable or vested, will become fully exercisable and vested. Any
restricted shares of Class A Company Common Stock issued pursuant to the 1992
Management Equity Incentive Plan will become fully vested and will cease to be
restricted.
(b) Each outstanding Option, at the election of each holder of such Option,
which election will be available on an option-by-option basis, either:
(i) will be exercised, effective as of the Effective Time, and each
share of Class A Company Common Stock issuable with respect thereto will be
converted into the right to receive, at the election of each holder,
subject to Section 1.04(f), either (x) the Century Class A Per Share Cash
Amount or (y) the Century Class A Per Share Stock Amount, as provided in
Sections 1.02 and 1.03; or
(ii) will be assumed by Parent and converted into an option to
purchase, on the same terms and conditions as were applicable under the
Option Plans (except as provided herein), shares of Parent Common Stock
with the exercise price, the number of shares purchasable pursuant to such
Option and the terms and conditions of exercise of such Option to be
determined according to Section 424 of the Code, as more fully described in
a notice accompanying the Proxy Statement/Prospectus.
(c) Parent will take all corporate action necessary to reserve for issuance
a sufficient number of shares of Parent Common Stock for delivery upon exercise
of Options assumed by it in accordance with this Section 1.14. Promptly after
the Effective Time, Parent will file with the SEC a registration statement on
Form S-3 or S-8, as appropriate, covering the shares of Parent Common Stock
subject to such Options and will use its commercially reasonable efforts to
cause such registration statement to remain effective for so long as such
Options remain outstanding.
ARTICLE II
THE SURVIVING CORPORATION
Section 2.01 Certificate of Incorporation. The certificate of incorporation
of Merger Sub in effect at the Effective Time will be the certificate of
incorporation of the Surviving Corporation until amended in accordance with
applicable law.
Section 2.02 Bylaws. Subject to the provisions of Section 6.01, the by-laws
of Merger Sub in effect at the Effective Time will be the by-laws of the
Surviving Corporation until amended in accordance with applicable law.
Section 2.03 Directors. From and after the Effective Time, until successors
are duly elected or appointed and qualified in accordance with applicable law,
the directors of Merger Sub at the Effective Time will be the directors of the
Surviving Corporation.
Section 2.04 Officers. From and after the Effective Time, until successors
are duly elected or appointed and qualified in accordance with applicable law,
the officers of Merger Sub at the Effective Time will be the officers of the
Surviving Corporation.
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Section 2.05 Name. The name of the Surviving Corporation at the Effective
time will be Arahova Communications, Inc.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Parent that, except for inaccuracies
in the representations and warranties resulting from compliance by the Company
with any of its obligations under this Agreement or actions taken by the Company
in accordance with this Agreement and except as disclosed in the Company
Disclosure Schedule:
Section 3.01 Corporate Existence and Power. The Company is a corporation
duly incorporated, validly existing and in good standing under the laws of the
State of New Jersey and has all corporate power required to carry on its
business as now conducted. The Company is duly qualified to do business as a
foreign corporation and is in good standing in each jurisdiction where the
character of the property owned or leased by it or the nature of its activities
makes such qualification necessary, except for those jurisdictions where the
failure to be so qualified or be in good standing would not have a Material
Adverse Effect. The Company has delivered to Parent copies of the Company's
certificate of incorporation and by-laws as currently in effect.
Section 3.02 Corporate Authorization. The execution, delivery and
performance by the Company of this Agreement and the consummation by the Company
of the transactions contemplated hereby are within the Company's corporate
powers and, except for the approval and adoption by the Company's shareholders
of this Agreement and the Merger, have been duly authorized by all necessary
corporate action on the part of the Company. This Agreement has been duly and
validly executed and delivered by the Company and, assuming the due and valid
authorization, execution and delivery of this Agreement by Parent and Merger Sub
and receipt of all required approvals by the Company's shareholders in
connection with the consummation of the Merger, constitutes a valid and binding
agreement of the Company, enforceable in accordance with its terms except as may
be limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent
transfer and other similar laws affecting creditors' rights generally and by
equitable principles of general applicability. The Board of Directors of the
Company (the "Company Board") has approved the Merger, this Agreement, the Class
B Voting Agreement and the transactions contemplated hereby and thereby and such
approval, assuming the accuracy of the representation in Section 4.14, is
sufficient to render the provisions of Article 14A:10A of the NJBCA inapplicable
to the Merger, this Agreement, the Class B Voting Agreement and the transactions
contemplated hereby and thereby. No other corporate proceedings on the part of
the Company are necessary to authorize or approve this Agreement or to
consummate the transactions contemplated hereby (other than the approval and
adoption of the Merger and this Agreement by the shareholders of the Company to
the extent required by the Company's certificate of incorporation and by
applicable law).
Section 3.03 Governmental Authorization. The execution, delivery and
performance by the Company of this Agreement and the consummation by the Company
of the Merger and the other transactions contemplated hereby require no consent,
waiver, approval, authorization or permit by or from, or action by or in respect
of, or filing with, any Governmental Entity, other than: (i) the filing of
certificates of merger as contemplated by Section 1.01(c); (ii) compliance with
any applicable requirements of state takeover laws; (iii) compliance with the
applicable requirements of the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976 as amended and the rules and regulations thereunder (the "HSR Act"); (iv)
compliance with any applicable requirements of the Securities Act of 1933, as
amended (together with the rules and regulations promulgated thereunder, the
"Securities Act") and the Securities Exchange Act of 1934, as amended (together
with the rules and regulations promulgated thereunder, the "Exchange Act"); (v)
compliance with any applicable requirements of the Communications Act of 1934,
as amended (together with the rules, regulations and published decisions of the
FCC (as defined below), the "Communications Act"); (vi) filings under state
securities or "blue-sky" laws; (vii) notice to, or consents, approvals or
waivers from, the relevant Franchising
12
Authorities or other third parties in connection with a change of control
of the holder of the Franchises of the Company and the Company Subsidiaries and
of the Federal Communications Commission (the "FCC") in connection with a change
of control or a transfer of assets of the holder of the FCC licenses of the
Company and the Company Subsidiaries; and (viii) such consents, waivers,
approvals, authorizations, permits, filings or actions that, if not taken, made
or obtained, would not in the aggregate have a Material Adverse Effect.
Section 3.04 Non-contravention. Assuming compliance with the matters
referred to in Section 3.03, the execution, delivery and performance by the
Company of this Agreement and the consummation by the Company of the
transactions contemplated hereby do not and will not: (i) assuming receipt of
the approval of shareholders of the Company referred to in Section 3.02,
contravene or conflict with the certificate of incorporation or by-laws of the
Company; (ii) contravene or conflict with or constitute a violation of any
provision of any law, regulation, judgment, injunction, order or decree binding
upon or applicable to the Company or any Company Subsidiary that would be a
significant subsidiary within the meaning of Regulation S-X under the Exchange
Act (a "Significant Subsidiary of the Company"); (iii) result in a breach or
violation of or constitute a default (or an event that with the giving of notice
or the lapse of time or both would constitute a default) under or give rise to a
right of termination, amendment, cancellation or acceleration of any right or
obligation of the Company or any Significant Subsidiary of the Company or to a
loss of any material benefit to which the Company or any Significant Subsidiary
of the Company is entitled or require any consent, approval or authorization
under any provision of any material agreement, contract or other instrument
binding upon the Company or any Significant Subsidiary of the Company or any of
their respective assets (including any material license, franchise, permit or
other similar authorization held by the Company or any Significant Subsidiary of
the Company); or (iv) result in the creation or imposition of any Lien on any
material asset of the Company or any Significant Subsidiary of the Company,
except for such contraventions, conflicts or violations referred to in clause
(ii) and breaches, violations, defaults, rights of termination, amendment,
cancellation or acceleration, losses, Liens or other occurrences referred to in
clauses (iii) and (iv) (each, a "Violation") that in the aggregate would not
have a Material Adverse Effect. Upon consummation of the Company's joint venture
agreement with TCI Communications, Inc., the Company will amend the Company
Disclosure Schedule with respect to this Section 3.04 to give effect to such
transaction.
Section 3.05 Capitalization.
(a) As of February 11, 1999, the authorized capital stock of the Company
consisted of the following: (i) 400,000,000 shares of Class A Company Common
Stock, of which 32,879,755 were issued and outstanding; (ii) 300,000,000 shares
of Class B Company Common Stock, of which 42,322,059 were issued and
outstanding; and (iii) 100,000,000 shares of preferred stock, of which no shares
were issued and outstanding.
(b) As of February 11, 1999, there were outstanding Options to purchase an
aggregate of 2,666,049 shares of Class A Company Common Stock (of which Options
to purchase an aggregate of 1,784,659 shares of Class A Company Common Stock
were exercisable).
(c) All outstanding shares of capital stock of the Company have been duly
authorized and validly issued and are fully paid and nonassessable. Except as
set forth in this Section 3.05 and except for changes since February 11, 1999
resulting from the exercise of Options outstanding on such date, there are
outstanding (i) no shares of capital stock or other voting securities of the
Company, (ii) no securities of the Company convertible into or exchangeable for
shares of capital stock or voting securities of the Company (other than the
shares of Class B Company Common Stock, which are convertible into shares of
Class A Company Common Stock) and (iii) no options or other rights to acquire
from the Company, and no obligation of the Company to issue, any capital stock,
voting securities or securities convertible into or exchangeable for capital
stock or voting securities of the Company (other than the shares of Class B
Company Common Stock, which are convertible into shares of Class A Company
Common Stock). The securities described in Section 3.05(a) and Section 3.05(b)
are referred to collectively as the "Company Securities"). Except pursuant to
the terms of the Company Securities, there are no outstanding obligations of the
Company or any Company Subsidiary to repurchase, redeem or otherwise acquire any
Company Securities.
13
(d) Except with respect to the interests in the Persons listed in the
Company Disclosure Schedule, there are no outstanding contractual obligations of
the Company or any Company Subsidiary to provide funds to, or make any
investment (in the form of a loan, capital contribution or otherwise) in, any
other Person other than to wholly-owned Company Subsidiaries or in the ordinary
course of business consistent with past practice.
Section 3.06 Significant Subsidiaries.
(a) Each Significant Subsidiary of the Company is a corporation or other
legal entity duly organized, validly existing and (if applicable) in good
standing under the laws of its jurisdiction of organization, has all corporate,
partnership or similar powers required to carry on its business as now conducted
and is duly qualified to do business as a foreign corporation or other legal
entity and (if applicable) is in good standing in each jurisdiction where the
character of the property owned or leased by it or the nature of its activities
makes such qualification necessary, except where the failure to be duly
organized, validly existing and in good standing or to have such powers would
not have a Material Adverse Effect. All Significant Subsidiaries of the Company
and their respective jurisdictions of organization are identified in the Company
Disclosure Schedule.
(b) All of the outstanding shares of capital stock of, or other ownership
interests in, each Significant Subsidiary of the Company, are owned by the
Company, directly or indirectly, free and clear of any Lien and free of any
other limitation or restriction (including any restriction on the right to vote,
sell or otherwise dispose of such capital stock or other ownership interests).
There are no outstanding (i) securities of the Company or any Significant
Subsidiary of the Company convertible into or exchangeable for shares of capital
stock or other voting securities or ownership interests in any Significant
Subsidiary of the Company or (ii) options or other rights to acquire from the
Company or any Significant Subsidiary of the Company, and no other obligation of
the Company or any Significant Subsidiary of the Company to issue, any capital
stock, voting securities or other ownership interests in, or any securities
convertible into or exchangeable for any capital stock, voting securities or
ownership interests in, any Significant Subsidiary of the Company. The
securities described in clauses (i) and (ii) above are referred to collectively
as the "Company Subsidiary Securities". There are no outstanding obligations of
the Company or any Significant Subsidiary of the Company to repurchase, redeem
or otherwise acquire any outstanding Company Subsidiary Securities or pay any
dividend or make any other distribution in respect thereof to a Person other
than the Company or a wholly-owned Significant Subsidiary of the Company.
Section 3.07 SEC Filings. The Company has filed with the SEC all forms,
reports, definitive proxy statements, schedules and registration statements
required to be filed with the SEC since May 31, 1998 (the "Company SEC
Reports"). No Company Subsidiary is required to file any report, form or
document with the SEC pursuant to the Exchange Act or the Securities Act. As of
their respective filing dates, no Company SEC Report contained any untrue
statement of a material fact or omitted to state any material fact required to
be stated therein or necessary to make the statements made therein, in the light
of the circumstances under which they were made, not misleading. The Company SEC
Reports when filed complied in all material respects with applicable
requirements of the Securities Act and the Exchange Act.
Section 3.08 Financial Statements. The audited consolidated financial
statements and unaudited consolidated interim financial statements of the
Company included in the Company SEC Reports fairly present, in conformity with
GAAP applied on a consistent basis (except as may be indicated in the notes
thereto or in the case of unaudited interim financial statements as permitted by
Form 10-Q of the SEC), the consolidated financial position of the Company and
its consolidated Subsidiaries as of the dates thereof and its consolidated
statements of operations, shareholders' equity and cash flows for the periods
then ended (subject to normal year-end adjustments in the case of any unaudited
interim financial statements).
Section 3.09 Disclosure Documents.
(a) The Proxy Statement/Prospectus and any amendment or supplement thereto,
when filed, will comply as to form in all material respects with the applicable
requirements of the Securities Act and the Exchange Act. At
14
the time the Proxy Statement/Prospectus or any amendment or supplement thereto
is first mailed to shareholders of the Company and at the time such shareholders
vote on the approval and adoption of this Agreement, the Proxy
Statement/Prospectus, as supplemented or amended, if applicable, will not
contain any untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements contained therein, in the light
of the circumstances under which they were made, not misleading. The
representations and warranties in this Section 3.09(a) do not apply to
statements in or omissions from the Proxy Statement/Prospectus or any amendment
or supplement thereto based upon information furnished to the Company by Parent
for use therein.
(b) None of the information furnished to Parent for use in (or
incorporation by reference in) the Registration Statement (as defined in Section
4.09) or any amendment or supplement thereto will contain, at the time the
Registration Statement or any amendment or supplement thereto becomes effective,
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements
contained therein, in light of the circumstances under which they were made, not
misleading.
Section 3.10 Absence of Certain Changes or Events. Since May 31, 1998,
except (x) as contemplated by this Agreement or disclosed in the Company SEC
Reports and (y) for any change resulting from the transactions contemplated by
this Agreement or general economic, financial, competitive or market conditions
or conditions or circumstances generally affecting the cable television or
communications industries, there has not been: (i) any change in the business,
operations or financial condition of the Company or any of the Company
Subsidiaries that has had or would reasonably be expected to have, individually
or in the aggregate, a Material Adverse Effect; (ii) any declaration, setting
aside or payment of any dividend or other distribution with respect to any
shares of capital stock of the Company, or any repurchase, redemption or other
acquisition by the Company or any of the Company Subsidiaries of any outstanding
shares of capital stock or other securities of, or other ownership interests in,
the Company or any of the Company Subsidiaries; (iii) any incurrence, assumption
or guarantee by the Company or any of the Company Subsidiaries of any material
indebtedness for borrowed money other than in the ordinary course and in amounts
and on terms consistent with past practices; or (iv) as of the date hereof, any
damage, destruction or other casualty loss (whether or not covered by insurance)
affecting the business or assets of the Company or any of the Company
Subsidiaries that has had or would reasonably be expected to have, individually
or in the aggregate, a Material Adverse Effect.
Section 3.11 Litigation. Except as set forth in the Company SEC Reports
filed prior to the date hereof, there is, as of the date hereof, no action, suit
or proceeding pending, or to the knowledge of the Company threatened, against
the Company or any Company Subsidiary before any court, arbitrator or other
Governmental Entity that would reasonably be expected to have, individually or
in the aggregate, a Material Adverse Effect.
Section 3.12 Taxes. Except to the extent that failure to do so would not
have a Material Adverse Effect, each of the Company and its Significant
Subsidiaries has filed all Tax returns and reports required to be filed by it
and has paid, or established adequate reserves for, all Taxes required to be
paid by it. No deficiencies for any Taxes have been proposed, asserted or
assessed against the Company that would have a Material Adverse Effect. No
requests for waivers of the time to assess any such Taxes are pending, other
than waivers relating to property taxes and sales and use taxes.
Section 3.13 Employee Benefit Plans.
(a) The Company Disclosure Schedule identifies each material employment,
severance or similar contract or arrangement or any plan, policy, fund, program
or contract or arrangement providing for compensation, bonus, profit-sharing,
stock option or other stock-related rights or other forms of incentive or
deferred compensation, vacation benefits, insurance coverage (including any
self-insured arrangements), health or medical benefits, disability benefits,
workers' compensation, supplemental unemployment benefits, severance benefits
and post-employment or retirement benefits (including compensation, pension,
health, medical or life
15
insurance or other benefits) that (i) is entered into, maintained, administered
or contributed to, as the case may be, by the Company or any Company Subsidiary
and (ii) covers any employee or former employee of any Company or Company
Subsidiary employed in the United States or Puerto Rico (each, an "Employee
Plan").
(b) The Company has furnished or made available to Parent copies of the
Employee Plans (and, if applicable, related trust agreements) and all amendments
thereto and written interpretations thereof together with the most recent annual
report (Form 5500 including, if applicable, Schedule B thereto) and the most
recent actuarial valuation report prepared in connection with any Employee Plan.
There is no material accumulated funding deficiency, termination or partial
termination, or requirement to provide security with respect to any Employee
Plan. The fair market value of the assets of each material Employee Plan would
exceed the value of all liabilities and the obligations of such Employee Plan if
such plan were to terminate on the Closing Date. The transaction contemplated by
this Agreement will not result in any material liability under ERISA to the
Company or any of the Company's Subsidiaries or Parent, or any of their
respective ERISA Affiliates.
(c) Each Employee Plan that is intended to be qualified under Section
401(a) of the Code has been determined by the Internal Revenue Service to be
qualified under Section 401(a) of the Code and each trust related thereto has
been determined to be exempt from tax pursuant to Section 501(a) of the Code.
The Company is not aware of any event that has occurred since the date of such
determinations that would adversely affect such qualification or tax exempt
status. The Company has provided Parent with the most recent determination
letter of the Internal Revenue Service relating to each such Employee Plan. Each
Employee Plan has been maintained in compliance in all material respects with
its terms and with the requirements prescribed by any and all applicable
statutes, orders, rules and regulations, including the Employee Retirement
Income Security Act of 1974, as amended ("ERISA") and the Code.
(d) No Employee Plan is a Multiemployer plan as defined in Section 3(37) of
ERISA or is a plan subject to Title IV of ERISA. Neither the Company nor any
Company Subsidiary or any of their ERISA Affiliates (or any former ERISA
Affiliate with respect to the period in which such entity was an ERISA
Affiliate) has ever maintained, adopted or established, contributed or been
required to contribute to, or otherwise participated or been required to
participate in, any such plan.
(e) Neither the Company nor any Company Subsidiary has any current or
projected material liability in respect of post-employment or post-retirement
health or medical or life insurance benefits for retired, former or current
employees of the Company, except as required to avoid excise tax under Section
4980B of the Code.
(f) There has been no amendment to, written interpretation of or
announcement by the Company, any Company Subsidiary or their respective
Affiliates relating to, or change in employee participation or coverage under,
any Employee Plan that would increase materially the expense of maintaining such
Employee Plan above the level of the expense incurred in respect thereof for the
most recent fiscal year ended prior to the date hereof, other than ordinary
course of business increases related to health, life and disability insurance
plans.
(g) Other than as disclosed in the Company SEC Reports, no employee or
former employee of the Company or any Company Subsidiary will become entitled to
any bonus, retirement, severance, job security or similar benefit or an
enhancement of such benefit (including acceleration of vesting or exercise of an
incentive award) under any Employee Plan as a result of the transactions
contemplated hereby.
(h) Other than routine claims for benefits and liability for premiums due
to the Pension Benefit Guaranty Corporation, neither the Company nor any Company
Subsidiary or ERISA Affiliate (or any former ERISA Affiliate with respect to the
period in which such entity was an ERISA Affiliate) has incurred any material
liability with respect to any Employee Plan that is currently due and owing and
has not yet been satisfied, including under ERISA, the Code or other applicable
law. No event has occurred and, to the knowledge of the Company, there exists no
condition or set of circumstances (other than the accrual of benefits under the
normal terms of the Employee Plans), that could result in the imposition of any
material liability on the Company or any Company Subsidiary or ERISA Affiliate
(or any former ERISA Affiliate with respect to the period in
16
which such entity was an ERISA Affiliate) with respect to any Employee Plan,
including under ERISA, the Code or other applicable law with respect to any
Employee Plan.
Section 3.14 Brokers. Except for the engagement of Xxxxxxxxx, Xxxxxx &
Xxxxxxxx Securities Corporation, none of the Company or any of the Company
Subsidiaries, or any of their respective officers, directors or employees, has
employed any investment banker, broker, finder or other intermediary or incurred
any liability for any brokerage fees, commissions or finder's fees in connection
with the transactions contemplated by this Agreement.
Section 3.15 Compliance with Applicable Laws. The Company and the Company
Subsidiaries are in substantial compliance with all laws, regulations and orders
of any Governmental Entity applicable to them, except where the failure to
comply would not have a Material Adverse Effect. The Company and each Company
Subsidiary are in material compliance with, and have obtained, all licenses,
permits, franchises or other governmental authorizations necessary to the
ownership of its properties or to the conduct of its business, except where the
failure to obtain such licenses, permits, franchises or other governmental
authorizations would not have a Material Adverse Effect.
Section 3.16 Environmental Matters. Except as would not have a Material
Adverse Effect: (i) to the Company's knowledge, no real property currently or
formerly owned or operated by the Company or any current Company Subsidiary is
contaminated with any Hazardous Substances to an extent or in a manner or
condition now requiring remediation under any Environmental Law; (ii) no
judicial or administrative proceeding is pending or, to the knowledge of the
Company, threatened relating to liability for any off-site disposal or
contamination; and (iii) the Company and the Company Subsidiaries have not
received in writing any claims or notices alleging liability under any
Environmental Law. To the Company's knowledge, neither the Company nor any
Company Subsidiary is in violation of any applicable Environmental Law and no
condition or event has occurred with respect to the Company or any Company
Subsidiary that would constitute a violation of such Environmental Law,
excluding in any event such violations, conditions and events that would not
have a Material Adverse Effect.
Section 3.17 Opinion of Financial Advisor. The Company has received the
written opinion of Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation to the
effect that the Merger Consideration is fair from a financial point of view to
the shareholders of the Company (other than shareholders who are Affiliates of
the Company).
Section 3.18 No Other Representations. Except as specifically set forth in
this Article III, the Company has not made, and Parent and Merger Sub have not
relied upon, any representations or warranties, whether express or implied.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF
PARENT AND MERGER SUB
Parent and Merger Sub represent and warrant to the Company that, except for
inaccuracies in the representations and warranties resulting from compliance by
Parent and Merger Sub with any of their obligations under this Agreement or
actions taken by Parent or Merger Sub in accordance with this Agreement and
except as disclosed in the Parent Disclosure Schedule:
Section 4.01 Corporate Existence and Power.
(a) Parent is a corporation duly incorporated, validly existing and in good
standing under the laws of the State of Delaware and has all corporate power
required to carry on its business as now conducted. Parent is duly qualified to
do business as a foreign corporation and is in good standing in each
jurisdiction where the
17
character of the property owned or leased by it or the nature of its activities
makes such qualification necessary, except for those jurisdictions where the
failure to be so qualified or be in good standing would not have a Material
Adverse Effect. Parent has delivered to the Company copies of Parent's
certificate of incorporation and by-laws as currently in effect.
(b) Merger Sub is a corporation duly incorporated, validly existing and in
good standing under the laws of the State of Delaware and has all corporate
power required to carry on its business as now conducted. Merger Sub is duly
qualified to do business as a foreign corporation and is in good standing in
each jurisdiction where the character of the property owned or leased by it or
the nature of its activities makes such qualification necessary, except for
those jurisdictions where the failure to be so qualified or be in good standing
would not have a Material Adverse Effect. Merger Sub has delivered to the
Company copies of Merger Sub's certificate of incorporation and by-laws as
currently in effect.
Section 4.02 Corporate Authorization. The execution, delivery and
performance by each of Parent and Merger Sub of this Agreement and the
consummation by Parent and Merger Sub of the transactions contemplated hereby
are within the corporate powers of each of Parent and Merger Sub and have been
duly authorized by all necessary corporate action on the part of Parent and
Merger Sub. This Agreement has been duly and validly executed and delivered by
each of Parent and Merger Sub and, assuming the due and valid authorization,
execution and delivery of this Agreement by the Company, constitutes a valid and
binding agreement of each of Parent and Merger Sub, enforceable in accordance
with its terms except as may be limited by bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer and other similar laws affecting
creditors' rights generally and by equitable principles of general
applicability. The Board of Directors of each of Parent and Merger Sub, and
Parent as the sole shareholder of Merger Sub, have approved the Merger, this
Agreement and the transactions contemplated hereby. No other corporate
proceedings or shareholder approvals on the part of Parent or Merger Sub are
necessary to authorize or approve this Agreement or to consummate the
transactions contemplated hereby (other than approval of the shareholders of
Parent).
Section 4.03 Governmental Authorization. The execution, delivery and
performance by each of Parent and Merger Sub of this Agreement and the
consummation by each of Parent and Merger Sub of the Merger and the other
transactions contemplated hereby require no consent, waiver, approval,
authorization or permit by or from, or action by or in respect of, or filing
with, any Governmental Entity, other than: (i) the filing of certificates of
merger as contemplated by Section 1.01(a); (ii) compliance with any applicable
requirements of state takeover laws; (iii) compliance with the applicable
requirements of the HSR Act; (iv) compliance with any applicable requirements of
the Securities Act and the Exchange Act; (v) compliance with any applicable
requirements of the Communications Act; (vi) filings under state securities or
"blue-sky" laws; (vii) notice to, or consents, approvals or waivers from, the
relevant Franchising Authorities or other third parties in connection with a
change of control of the holder of the Franchises of the Company and the Company
Subsidiaries and the FCC in connection with a change of control or a transfer of
assets of the holder of the FCC licenses of the Company and the Company
Subsidiaries, and (viii) such consents, waivers, approvals, authorizations,
permits, filings or actions that, if not taken, made or obtained, would not in
the aggregate have a Material Adverse Effect.
Section 4.04 Non-contravention. Assuming compliance with the matters
referred to in Section 4.03, the execution, delivery and performance by each of
Parent and Merger Sub of this Agreement and the consummation by each of Parent
and Merger Sub of the transactions contemplated hereby do not and will not: (i)
assuming receipt of the approval of the shareholders of the Parent referred to
in Section 4.02, contravene or conflict with the certificate of incorporation or
by-laws of each of Parent and Merger Sub; (ii) contravene or conflict with or
constitute a violation of any provision of any law, regulation, judgment,
injunction, order or decree binding upon or applicable to Parent, Merger Sub or
any Subsidiary of Parent that would be a significant subsidiary within the
meaning of Regulation S-X under the Exchange Act (a "Significant Subsidiary of
Parent"); (iii) assuming receipt of the approval of the shareholders of the
Parent referred to in Section 4.02, result in a breach or violation of or
constitute a default (or an event that with the giving of notice or the lapse
18
of time or both would constitute a default) under or give rise to a right of
termination, amendment, cancellation or acceleration of any right or obligation
of Parent, Merger Sub or any Significant Subsidiary of Parent or to a loss of
any material benefit to which Parent, Merger Sub or any Significant Subsidiary
of Parent is entitled or require any consent, approval or authorization under
any provision of any material agreement, contract or other instrument binding
upon Parent, Merger Sub or any Significant Subsidiary of Parent or any of their
respective assets (including any material license, franchise, permit or other
similar authorization held by Parent, Merger Sub or any Significant Subsidiary
of Parent); or (iv) result in the creation or imposition of any Lien on any
material asset of Parent, Merger Sub or any Significant Subsidiary of Parent,
except for such Violations that in the aggregate would not have a Material
Adverse Effect.
Section 4.05 Capitalization.
(a) As of February 28, 1999, the authorized capital stock of Parent
consisted of the following: (i) 200,000,000 shares of Class A Common Stock, par
value $.01 per share, of which 42,328,343 were issued and outstanding; (ii)
25,000,000 shares of Class B Common Stock par value $.01 per share, of which
10,834,476 were issued and outstanding; and (iii) 5,000,000 shares of preferred
stock, of which 1,500,000 shares (issued as 13% Redeemable Exchangeable
Preferred Stock) and 80,000 shares (issued as 8 1/8% Series C Convertible
Preferred Stock convertible into 9,433,962 shares of the Parent's Class A Common
Stock) were issued and outstanding.
(b) As of February 28, 1999, there were no outstanding options to purchase
Parent Common Stock.
(c) All outstanding shares of capital stock of Parent have been duly
authorized and validly issued and are fully paid and nonassessable. Except as
set forth in this Section 4.05, as of February 28, 1999, there are outstanding
(i) no shares of capital stock or other voting securities of Parent, (ii) no
securities of Parent convertible into or exchangeable for shares of capital
stock or voting securities of Parent and (iii) no options or other rights to
acquire from Parent, and no obligation of Parent to issue, any capital stock,
voting securities or securities convertible into or exchangeable for capital
stock or voting securities of Parent. The securities described in clauses (a)
and (b) of this Section 4.05 and the securities referred to in the Parent SEC
Reports are referred to collectively as the "Parent Securities". Except pursuant
to the terms of the Parent Securities, there are no outstanding obligations of
Parent or any Parent Subsidiary to repurchase, redeem or otherwise acquire any
Parent Securities.
(d) As of March 5, 1998, except as disclosed in the Parent SEC Reports and
except with respect to the interests in the Persons listed in the Parent
Disclosure Schedule, there are no outstanding contractual obligations of Parent
or any Parent Subsidiary to provide funds to, or make any investment (in the
form of a loan, capital contribution or otherwise) in, any other Person other
than to wholly-owned Parent Subsidiaries or in the ordinary course of business
consistent with past practice.
Section 4.06 Significant Subsidiaries.
(a) Each Significant Subsidiary of Parent is a corporation or other legal
entity duly organized, validly existing and (if applicable) in good standing
under the laws of its jurisdiction of organization, has all corporate,
partnership or similar powers required to carry on its business as now conducted
and is duly qualified to do business as a foreign corporation or other legal
entity and (if applicable) is in good standing in each jurisdiction where the
character of the property owned or leased by it or the nature of its activities
makes such qualification necessary, except where the failure to be duly
organized, validly existing and in good standing or to have such powers would
not have a Material Adverse Effect. As of March 5, 1999, all Significant
Subsidiaries of Parent and their respective jurisdictions of organization are
identified in the Parent Disclosure Schedule.
(b) Except as disclosed in the Parent SEC Reports, all of the outstanding
shares of capital stock of, or other ownership interests in, each Significant
Subsidiary of Parent, are owned by Parent, directly or indirectly, free and
clear of any Lien and free of any other limitation or restriction (including any
restriction on the right
19
to vote, sell or otherwise dispose of such capital stock or other ownership
interests). Except as disclosed in the Parent SEC Reports, there are no
outstanding (i) securities of Parent or any Significant Subsidiary of Parent
convertible into or exchangeable for shares of capital stock or other voting
securities or ownership interests in any Significant Subsidiary of Parent or
(ii) options or other rights to acquire from Parent or any Significant
Subsidiary of Parent, and no other obligation of Parent or any Significant
Subsidiary of Parent to issue, any capital stock, voting securities or other
ownership interests in, or any securities convertible into or exchangeable for
any capital stock, voting securities or ownership interests in, any Significant
Subsidiary of Parent. The securities described in clauses (i) and (ii) above are
referred to collectively as the "Parent Subsidiary Securities"). Except as
disclosed in the Parent SEC Reports, there are no outstanding obligations of
Parent or any Significant Subsidiary of Parent to repurchase, redeem or
otherwise acquire any outstanding Parent Subsidiary Securities or pay any
dividend or make any other distribution in respect thereof to a Person other
than Parent or a wholly-owned Significant Subsidiary of Parent.
Section 4.07 SEC Filings. Parent and Hyperion Telecommunications, Inc. each
have filed with the SEC all forms, reports, definitive proxy statements,
schedules and registration statements required to be filed with the SEC since
March 31, 1998 (collectively, the "Parent SEC Reports"). Except for Hyperion
Telecommunications, Inc., as of March 5, 1999, no Parent Subsidiary is required
to file any report, form or document with the SEC pursuant to the Exchange Act
or the Securities Act. As of their respective filing dates, no Parent SEC Report
contained any untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary to make the statements
made therein, in the light of the circumstances under which they were made, not
misleading. The Parent SEC Reports when filed complied in all material respects
with applicable requirements of the Securities Act and the Exchange Act.
Section 4.08 Financial Statements.
The audited consolidated financial statements and unaudited consolidated
interim financial statements of Parent included in the Parent SEC Reports fairly
present, in conformity with GAAP applied on a consistent basis (except as may be
indicated in the notes thereto or in the case of unaudited interim financial
statements as permitted by Form 10-Q of the SEC), the consolidated financial
position of Parent and its consolidated Subsidiaries as of the dates thereof and
its consolidated statements of operations, shareholders' equity and cash flows
for the periods then ended (subject to normal year-end adjustments in the case
of any unaudited interim financial statements).
Section 4.09 Disclosure Documents.
(a) The registration statement on Form S-4 of Parent to be filed with the
SEC in connection with the Merger (the "Registration Statement") and any
amendment or supplement thereto, when filed, will comply as to form in all
material respects with the applicable requirements of the Securities Act. At the
time the Registration Statement is declared effective by the SEC, the
Registration Statement will not contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary to
make the statements contained therein not misleading. At the time the Proxy
Statement/Prospectus included in the Registration Statement and forming a part
thereof or any amendment or supplement thereto is first mailed to shareholders
of the Company and at the time such shareholders vote on the approval and
adoption of this Agreement, the Proxy Statement/Prospectus, as supplemented or
amended, if applicable, will not contain any untrue statement of a material fact
or omit to state any material fact necessary in order to make the statements
contained therein, in the light of the circumstances under which they were made,
not misleading. The representations and warranties in this Section 4.09(a) do
not apply to statements in or omissions from the Registration Statement or the
Proxy Statement/Prospectus or any amendment or supplement thereto based upon
information furnished to Parent by the Company for use therein.
(b) None of the information furnished to the Company for use in (or
incorporation by reference in) the Proxy Statement/Prospectus or any amendment
or supplement thereto will contain, at the time the Proxy Statement/Prospectus
included in the Registration Statement and forming a part thereof or any
amendment or
20
supplement thereto is first mailed to shareholders of the Company and at the
time such shareholders vote on the approval and adoption of this Agreement, any
untrue statement of a material fact or omit to state any material fact necessary
in order to make the statements contained therein, in the light of the
circumstances under which they were made, not misleading.
Section 4.10 Absence of Certain Changes or Events. Since the date of the
most recent audited financial statements included in the Parent SEC Reports,
except (x) as contemplated by this Agreement or disclosed in the Parent SEC
Reports and (y) for any change resulting from the transactions contemplated by
this Agreement or general economic, financial, competitive or market conditions
or conditions or circumstances generally affecting the cable television or
communications industries, there has not been: (i) any change in the business,
operations or financial condition of Parent or any of the Parent Subsidiaries
that has had or would reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect; (ii) any incurrence, assumption or
guarantee by Parent or any of the Parent Subsidiaries of any material
indebtedness for borrowed money other than in the ordinary course and in amounts
and on terms consistent with past practices; or (iii) as of the date hereof, any
damage, destruction or other casualty loss (whether or not covered by insurance)
affecting the business or assets of Parent or any of the Parent Subsidiaries
that has had or would reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect.
Section 4.11 Litigation. Except as set forth in the Parent SEC Reports
filed prior to the date hereof, there is, as of the date hereof, no action, suit
or proceeding pending, or to the knowledge of Parent threatened, against Parent
or any Parent Subsidiary before any court, arbitrator or other Governmental
Entity that would reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect.
Section 4.12 Brokers. None of Parent, Merger Sub or any Parent Subsidiary,
or any of their respective officers, directors or employees, has employed any
investment banker, broker, finder or other intermediary or incurred any
liability for any brokerage fees, commissions or finder's fees in connection
with the transactions contemplated by this Agreement for or with respect to
which the Company or any Company Subsidiary is or might be liable prior to the
Effective Time, except that Parent has retained Xxxxxxx & Associates, as its
financial advisor.
Section 4.13 Compliance with Applicable Laws. Parent and the Parent
Subsidiaries are in substantial compliance with all laws, regulations and orders
of any Governmental Entity applicable to them, except where the failure to
comply would not have a Material Adverse Effect. Parent and each Parent
Subsidiary have obtained all licenses, permits, franchises or other governmental
authorizations necessary to the ownership of its properties or to the conduct of
its business, except where the failure to obtain such licenses, permits,
franchises or other governmental authorizations would not have a Material
Adverse Effect.
Section 4.14 Interested Shareholder. As of the date of this Agreement, none
of Parent, Merger Sub or any of their Affiliates is an "Interested
Shareholders" as such term is defined in Section 14A:10A-3 of the NJBCA.
Section 4.15 Ownership of Merger Sub; No Prior Activities. Merger Sub was
formed by Parent solely for the purposes of engaging in the transactions
contemplated hereby and has not engaged in any other activities. As of the date
hereof and the Effective Time, all of the capital stock of Merger Sub is and
will be owned directly by Parent.
Section 4.16 Opinion of Financial Advisor. Parent has received the written
opinion of Xxxxxxx & Associates to the effect that the Merger Consideration is
fair from a financial point of view to the shareholders of Parent.
Section 4.17 No Other Representations. Except as specifically set forth in
this Article IV, Parent has not made, and the Company has not relied upon, any
representations or warranties, whether express or implied.
21
ARTICLE V
COVENANTS OF THE COMPANY
Section 5.01 Conduct of the Company. From the date hereof until the
Effective Time, the Company will not, and will cause the Company Subsidiaries
not to, take or agree to take any action that would (i) interfere with the
consummation of the transactions contemplated hereby or make such consummation
more difficult or materially delay the consummation of such transactions, (ii)
make any representation or warranty of the Company contained in this Agreement
untrue or incorrect as of the date when made or as of the Closing Date or (iii)
result in any of the conditions to Closing in Article VIII not being satisfied.
Except as contemplated by this Agreement or with the prior written consent of
Parent (which consent will not be unreasonably withheld or delayed), the Company
and the Company Subsidiaries will conduct their business in the ordinary course
consistent with past practice and will use reasonable efforts to preserve intact
their business organizations and relationships with third parties and to keep
available the services of their officers and employees. From the date hereof
until the Effective Time, the Company will not, and will not permit any of the
Company Subsidiaries to, do any of the following:
(a) adopt any amendment to its certificate of incorporation or by-laws;
(b) except for issuances of Company Subsidiary Securities to the Company or
a wholly-owned Company Subsidiary, issue, reissue or sell, or authorize the
issuance, reissuance or sale of (i) additional shares of capital stock of any
class, or securities convertible into capital stock of any class, or any rights,
warrants or options to acquire any convertible securities or capital stock,
other than (1) pursuant to the exercise of Options outstanding on the date
hereof or (2) upon the conversion of Class B Company Common Stock outstanding on
the date hereof or (ii) any other securities in respect of, in lieu of or in
substitution for, Company Common Stock outstanding on the date hereof;
(c) declare, set aside or pay any dividend or any other actual,
constructive or deemed distribution (whether in cash, securities or property or
any combination thereof) in respect of any class or series of its capital stock
or otherwise make any payments to shareholders of the Company in their capacity
as such other than between the Company and any wholly-owned Company Subsidiary;
(d) split, combine, subdivide, reclassify or redeem, purchase or otherwise
acquire, or propose to redeem or purchase or otherwise acquire, any shares of
its capital stock, or any of its other securities;
(e) (i) increase the compensation or fringe benefits payable or to become
payable to directors, officers or employees except for (w) cash bonuses to
non-employee directors in an aggregate amount not to exceed $250,000, (x)
increases in salary, wages and benefits of officers or employees of the Company
or the Company Subsidiaries in the ordinary course consistent with past
practice, (y) increases in salary, wages and benefits granted to officers and
employees of the Company or the Company Subsidiaries in conjunction with new
hires, promotions or other changes in job status, which increases are in the
ordinary course consistent with past practice or (z) increases in salary, wages
and benefits to employees of the Company or the Company Subsidiaries pursuant to
collective bargaining agreements entered into in the ordinary course of
business; (ii) pay any benefit not required by any existing plan or arrangement
(including the granting of stock options, stock appreciation rights, shares of
restricted stock or performance units), other than (x) the payment of cash
bonuses in timing and amount consistent with past practice and cash bonuses in
lieu of stock option grants and equity incentive awards in timing and amount
consistent with past practice, (y) the payment to five key executive officers of
the Company of amounts designed to reimburse them for the incremental income
taxes payable (as a result of the inability of any such officer to obtain
capital gain treatment) with respect to the conversion into the right to receive
the Merger Consideration of restricted shares issued under the 1992 Management
Equity Incentive Plan and shares of Class A Company Common Stock issued upon
exercise of Options pursuant to Section 1.14(a) and (z) the payment of
approximately $14,000,000 to a "rabbi trust" to be established for the exclusive
purpose of making premium payments when due on the "split-dollar" life insurance
policies on the
22
lives of Xxxxxxx and Xxxxxx Xxx; (iii) grant any severance or termination pay to
(except pursuant to existing agreements, plans or policies), or enter into any
employment or severance agreement with, any director, officer or other employee
of the Company or any of the Company Subsidiaries; or (iv) establish, adopt,
enter into or amend any collective bargaining, bonus, profit sharing, thrift,
compensation, stock option, restricted stock, pension, retirement, savings,
welfare, deferred compensation, employment, termination, severance or other
employee benefit plan, agreement, trust, fund, policy or arrangement for the
benefit or welfare of any director, officer or current or former employee (an
"Employee Benefit Arrangement"), except in each case to the extent required by
applicable law or regulation and except as currently is being negotiated with
the Communications Workers of America local in Los Angeles, California;
(f) acquire, sell, lease, transfer, swap or dispose of any assets (other
than in the ordinary course of business consistent with past practice) or
securities or other interests which are material to the Company and its
Subsidiaries, taken as a whole, or enter into any commitment to do any of the
foregoing or enter into any material commitment or transaction outside the
ordinary course of business other than transactions between any wholly-owned
Company Subsidiary and the Company or another wholly-owned Company Subsidiary
other than the sale, effective as of the Effective Time, of the shares of
capital stock of Citizens Utilities Company owned by the Company to Xxxxxxx Xxx
or his designees at a price equal to the fair market value (based on the closing
price of such stock on the date hereof) of such shares as of the date hereof as
determined by the Company Board;
(g) (i) incur, assume or prepay any long-term debt or incur or assume any
short-term debt, except that the Company and the Company Subsidiaries may incur,
assume or prepay debt in the ordinary course of business in the ordinary course
consistent with past practice or under existing lines of credit; (ii) assume,
guarantee, endorse or otherwise become liable or responsible (whether directly,
contingently or otherwise) for the obligations of any other Person or Persons
that individually or in the aggregate are material; or (iii) make any loans,
advances or capital contributions to, or investments in, any other Person or
Persons that individually or in the aggregate are material except for loans,
advances, capital contributions or investments between any wholly-owned
Subsidiary of the Company and the Company or another wholly-owned Subsidiary of
the Company, except in each case as may be necessary or desirable in connection
with the financing of Century-TCI California, L.P.; or
(h) agree to take any of the foregoing actions.
Section 5.02 Other Transactions.
(a) From the date hereof until the termination of this Agreement, the
Company will not, and will not authorize or permit any of its Subsidiaries or
any of its or the Company Subsidiaries' directors, officers, employees, agents
or representatives, directly or indirectly, solicit, to initiate or knowingly
encourage any inquiries or the making of any proposal with respect to any
Acquisition Transaction or to provide information to or negotiate, explore or
otherwise engage in discussions with any Person (other than Parent, Merger Sub
or any of their directors, officers, employees, agents and representatives) with
respect to any Acquisition Transaction or to enter into any agreement,
arrangement or understanding requiring it to abandon, terminate or fail to
consummate the Merger. As of the date of this Agreement, the Company has
discontinued, and has caused the Company Subsidiaries and its and their
respective directors, officers, employees, agents and representatives to
discontinue, discussions or negotiations with all Persons or groups with whom
discussions or negotiations previously have been held concerning any proposal
with respect to an Acquisition Transaction. The Company promptly will notify
Parent if any proposal or offer is received by, or any information is requested
from, or any discussions or negotiations are sought to be initiated or continued
with, the Company in respect of an Acquisition Transaction.
(b) The Company Board will not (i) withdraw or modify, or propose to
withdraw or modify, in a manner adverse to Parent, the approval or
recommendation of the Company Board of this Agreement and the Merger or (ii)
approve or recommend, or propose to approve or recommend, any Acquisition
Transaction other than the
23
Merger. Nothing contained in this Section 5.02(b), however, will prohibit the
Company Board from complying with Rule 14d-9 and Rule 14e-2 promulgated under
the Exchange Act with respect to any proposal relating to an Acquisition
Transaction.
(c) "Acquisition Transaction" means any merger, consolidation or other
business combination, tender or exchange offer, recapitalization transaction or
other similar transaction involving the Company or any Significant Subsidiary of
the Company, acquisition of all or any material portion of the assets or capital
stock of the Company or the acquisition of all or substantially all of the
assets or capital stock of any Significant Subsidiary of the Company.
"Acquisition Transaction" does not include the sale of shares of capital stock
of Citizens Utilities Company.
Section 5.03. Affiliates. The Company, prior to the Effective Time, will
deliver to Parent a letter identifying all known persons who are, at the time of
the Company Shareholder Meeting, in the Company's reasonable judgment,
"affiliates" of the Company under Rule 145 of the Securities Act. The Company
will furnish such information and documents as Parent reasonably may request for
the purpose of reviewing such list. The Company will use its reasonable best
efforts to obtain a written agreement in customary form from each person who may
be so deemed as soon as practicable and, in any event, prior to the Effective
Time.
ARTICLE VI
COVENANTS OF PARENT, MERGER SUB AND THE SURVIVING CORPORATION
Section 6.01 Indemnification; Directors' and Officers' Insurance.
(a) Parent and Merger Sub agree that all rights to indemnification existing
in favor of each Person (the "Indemnified Parties") who is at the Effective Time
or prior thereto has been an employee, agent, director or officer of the Company
and the Company Subsidiaries as provided in their respective charters, by-laws
or resolutions identified in the Company Disclosure Schedule, in an agreement
between an Indemnified Party and the Company or any of the Company Subsidiaries
(which agreement is identified in the Company Disclosure Schedule) will survive
the Merger and will continue in full force and effect for a period of not less
than six years from the Effective Time. In the event any claim is asserted or
made within such six-year period, all rights to indemnification in respect of
any such claim will continue until final disposition thereof.
(b) Parent and the Surviving Corporation jointly and severally agree to
indemnify all Indemnified Parties to the fullest extent permitted by applicable
law with respect to all acts and omissions arising out of such individuals'
services as officers, directors, employees or agents of the Company or any
Company Subsidiary or as trustees or fiduciaries of any plan for the benefit of
employees, or otherwise on behalf of, the Company or any Company Subsidiary,
occurring at or prior to the Effective Time, including the transactions
contemplated by this Agreement. In the event any Indemnified Party is or becomes
involved in any capacity in any action, proceeding or investigation in
connection with any matter occurring at or prior to the Effective Time, Parent
will pay as incurred such Indemnified Party's legal and other expenses
(including the cost of any investigation and preparation) incurred in connection
therewith. Parent will pay all expenses, including attorneys' fees, that may be
incurred by any Indemnified Party in enforcing the indemnity and other
obligations provided for in this Section 6.01.
(c) Parent and the Surviving Corporation will cause to be maintained in
effect for not less than six years from the Effective Time directors' and
officers' liability insurance covering the directors and officers of the Company
similar in scope and coverage to the directors' and officers' liability
insurance maintained by Parent for its directors and officers.
(d) The provisions of this Section 6.01 are intended to be for the benefit
of, and shall be enforceable by, each Indemnified Party, his or her heirs and
his or her personal representatives and shall be binding on all successors and
assigns of Parent and the Surviving Corporation.
24
Section 6.02 Employee Benefit Arrangements.
(a) From and after the Effective Time, Parent will, and will cause the
Surviving Corporation to, honor in accordance with their respective terms all
Employee Benefit Arrangements to which the Company or any of the Company
Subsidiaries is a party.
(b) Parent agrees that, for a period of not less than one year after the
Effective Time, it shall, or shall cause the Surviving Corporation to, provide
Employee Benefit Arrangements for the benefit of the employees and former
employees of the Company and its Subsidiaries, that in the aggregate are not
materially less favorable than the Employee Benefit Arrangements in effect
immediately prior to the Effective Time that are applicable to such employees or
former employees, provided, however, that Parent, at its sole option, may
provide Employee Benefit Arrangements to the employees and former employees of
the Company and the Company Subsidiaries which, in the aggregate, are no less
favorable than those applicable to similarly situated employees of Parent.
Parent will take all actions required so that each employee of the Company or
any Company Subsidiary as of the Effective Time will receive credit for
eligibility and vesting purposes for his or her service with the Company or any
Company Subsidiary prior to the Effective Time under any Employee Benefit
Arrangements established, maintained, continued or made available by Parent in
which any such employee is eligible to participate.
(c) Nothing in this Section 6.02 shall be construed to limit the ability of
Parent to terminate the employment of any employee or to review Employee Benefit
Arrangements from time to time and make such changes as it deems appropriate,
subject to the terms of such Employee Benefit Arrangements.
Section 6.03 Listing; Registration. Prior to the Effective Time, Parent
will use its best efforts to cause the Parent Common Stock to be issued in the
Merger to be approved for listing on the Nasdaq National Market, subject only to
notice of official issuance.
Section 6.04 Conduct of Parent. From the date hereof until the Effective
Time, Parent will not, and will cause the Parent Subsidiaries not to, take or
agree to take any action that would (i) interfere with the consummation of the
transactions contemplated hereby or make such consummation more difficult or
materially delay the consummation of such transactions, (ii) make any
representation or warranty of Parent or Merger Sub contained in this Agreement
untrue or incorrect as of the date when made or as of the Closing Date or (iii)
result in any of the conditions to Closing in Article VIII not being satisfied.
Section 6.05. Obligations of Merger Sub. Parent will take all action
necessary to cause Merger Sub to perform its obligations under this Agreement
and to consummate the Merger on the terms and conditions set forth in this
Agreement.
ARTICLE VII
COVENANTS OF PARENT, MERGER SUB AND THE COMPANY
Section 7.01 Reasonable Best Efforts. Subject to the terms and conditions
herein provided, each of the parties will use its reasonable best efforts to
take, or cause to be taken, all action, and to do, or cause to be done and to
assist and cooperate with the other parties in doing, as promptly as
practicable, all things necessary, appropriate or advisable under applicable
laws and regulations or otherwise to ensure that the conditions set forth in
Article VIII are satisfied and to consummate and make effective the transactions
contemplated by this Agreement. If at any time after the Effective Time any
further action is reasonably necessary or desirable to carry out the purposes of
this Agreement, including the execution of additional instruments, the proper
officers and directors of each party will take all such action.
Section 7.02. Registration Statement. Parent promptly will prepare and file
the Registration Statement with the SEC under the Securities Act, and will use
its reasonable best efforts to cause the Registration
25
Statement to be declared effective by the SEC as promptly as practicable. Parent
promptly will take any action required to be taken under foreign or state
securities or Blue Sky laws in connection with the issuance of Parent Common
Stock in connection with the Merger.
Section 7.03 Company Shareholder Meeting.
(a) Promptly upon the request of Parent but in no event prior to the date
the Registration Statement is declared effective, the Company will take all
action necessary in accordance with the NJBCA and its certificate of
incorporation and by-laws to call, give notice of and hold a meeting (the
"Company Shareholder Meeting") of its shareholders to consider and vote upon the
approval and adoption of this Agreement and the Merger and for such other
purposes as may be necessary or desirable.
(b) Promptly after the date hereof, Parent and the Company will prepare a
proxy statement pertaining to the Merger to be distributed to the holders of the
Company Common Stock, which will constitute the prospectus included in the
Registration Statement (the "Proxy Statement/Prospectus"). The Company Board
will recommend that the shareholders of the Company vote to approve the Merger
and adopt this Agreement and approve any other matters to be submitted to
shareholders in connection therewith, and the Company will include such
recommendation in the Proxy Statement/Prospectus.
(c) Parent and the Company promptly will notify each other of the receipt
of comments from the SEC and of any request by the SEC for amendments or
supplements to the Registration Statement or the Proxy Statement/Prospectus or
for additional information, and promptly will supply each other with copies of
all correspondence between the parties and the SEC with respect thereto. If, at
any time prior to the Company Shareholder Meeting, any event should occur
relating to or affecting the Company, Parent or Merger Sub, or to their
respective Subsidiaries, officers or directors, which event should be described
in an amendment or supplement to the Registration Statement or the Proxy
Statement/Prospectus, the parties promptly will inform each other and cooperate
in preparing, filing and having declared effective or clearing with the SEC and,
if required by applicable state securities laws, distributing to the Company's
shareholders such amendment or supplement.
Section 7.04 Consents. Each of the parties will use its reasonable best
efforts to obtain as promptly as practicable all consents (including from any
Franchising Authority and in connection with the change in control of the holder
of the Franchises of the Company and the Company Subsidiaries), waivers,
approvals, authorizations or permits of any Governmental Entity or any other
Person required in connection with, and waivers of any Violations that may be
caused by, the consummation of the transactions contemplated by this Agreement.
Section 7.05 Public Announcements. Neither Parent nor the Company will
issue any press release or make any other public announcement concerning this
Agreement, the Merger or the transactions contemplated hereby without the prior
consent of the other, except that either party may make such public disclosure
that it believes in good faith to be required by law (in which event such party
will notify the other party prior to making such disclosure).
Section 7.06 Notification of Certain Matters. Parent and the Company
promptly will notify the other of: (i) the occurrence or non-occurrence of any
fact or event that would be reasonably likely to cause any (x) representation or
warranty contained in this Agreement to be untrue or inaccurate in any material
respect at any time from the date hereof to the Effective Time or (y) material
covenant, condition or agreement contained in this Agreement not to be complied
with or satisfied in all material respects; and (ii) any failure of the Company,
Parent or Merger Sub to comply with or satisfy in any material respect any
covenant, condition or agreement contained in this Agreement.
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Section 7.07 Antitrust Matters.
(a) Parent and the Company promptly will complete all documents required to
be filed with the Federal Trade Commission and the Department of Justice in
order to comply with the HSR Act and, together with the Persons who are required
to join in such filings, will file the same with the appropriate Governmental
Entities. Parent and the Company promptly will furnish all materials thereafter
required by any of the Governmental Entities having jurisdiction over such
filings and will take all reasonable actions and file and use all reasonable
efforts to have declared effective or approved all documents and notifications
with any such Governmental Entities, as may be required under the HSR Act for
the consummation of the Merger.
(b) Parent will use its best efforts to resolve such objections, if any, as
may be asserted with respect to the transactions contemplated by this Agreement
under any antitrust, competition or trade regulatory laws, rules or regulations
of any domestic or foreign Governmental Entity ("Antitrust Laws"). If any suit
is threatened or instituted challenging the Merger as violating any Antitrust
Law, Parent will take such action (including opposing by all appropriate legal
means any claim raised in any such suit and, if necessary, agreeing to hold
separate or to divest any of the businesses, product lines or assets of Parent
or any of its Affiliates controlled by it or of any of its Subsidiaries or
Affiliates) as may be required (i) by the applicable Governmental Entity in
order to resolve such objections as such Governmental Entity may have to such
transactions under such Antitrust Law or (ii) by any domestic or foreign court
or similar tribunal, in any suit brought by a private party or governmental
authority challenging the Merger as violating any Antitrust Law, in order to
avoid the entry of, or to effect the dissolution of, any injunction, temporary
restraining order or other order that has the effect of preventing the
consummation of the Merger. The entry by a court, in any suit brought by a
private party or Governmental Entity challenging the Merger as violating any
Antitrust Law, of an order or decree permitting the Merger but requiring that
any of the businesses or assets of Parent or any Parent Subsidiary or Affiliates
be divested or held separate by Parent, or that would otherwise limit Parent's
freedom of action with respect to, or its ability to retain, the Company and the
Company Subsidiaries or any portion thereof or any of Parent's or its
Subsidiaries' or Affiliates' other assets or businesses, will not be deemed a
failure to satisfy the conditions specified in Section 8.01(d).
(c) Each party promptly will inform the other of any material communication
from the Federal Trade Commission, the Department of Justice, the FCC or any
other domestic or foreign Governmental Entity regarding any of the transactions
contemplated by this Agreement. If any party or any Affiliate thereof receives a
request for additional information or documentary material from any such
government or authority with respect to the transactions contemplated by this
Agreement, such party will endeavor in good faith to make, as soon as reasonably
practicable and after consultation with the other party, an appropriate response
to such request. Parent promptly will advise the Company in respect of any
understandings, undertakings or agreements which Parent proposes to make or
enter into with the Federal Trade Commission, the Department of Justice, the FCC
or any other domestic or foreign Governmental Entity in connection with the
transactions contemplated by this Agreement.
Section 7.08 Access to Information. From the date hereof until the
Effective Time, Parent and the Company will, and will cause each of their
Subsidiaries to: (i) give the other party and its counsel, financial advisors,
auditors and other authorized representatives reasonable access during normal
business hours to the offices, properties, books and records of such party and
its Subsidiaries as the other party reasonably may request, and furnish the
other party with such financial and operating data and other information as the
other party reasonably may request; and (ii) instruct such parties' employees,
counsel and financial advisors to cooperate with the other party in their
investigation of the business of such party and its Subsidiaries.
Section 7.09 Tax-free Reorganization. Prior to the Effective Time, each
party will use its best efforts to cause the Merger to qualify as a
reorganization within the meaning of Section 368 of the Code, and will not take
any action reasonably likely to cause the Merger not to qualify as such a
reorganization.
Section 7.10 Dissenting Shareholders. Notwithstanding anything in this
Agreement to the contrary, but only to the extent required by the NJBCA, shares
of the Company Common Stock that are issued and
27
outstanding immediately prior to the Effective Time and are held by holders of
shares of Company Common Stock who comply with all the provisions of the NJBCA
concerning the right of holders of shares of Company Common Stock to dissent
from the Merger and require appraisal of their shares ("Dissenting
Shareholders") shall not be converted into the right to receive the Merger
Consideration but shall become the right to receive such consideration as may be
determined to be due such Dissenting Shareholder pursuant to the laws of the
State of New Jersey; provided, however, that (i) if any Dissenting Shareholder
shall subsequently withdraw his or her demand for appraisal or fail to establish
or perfect or otherwise lose his or her appraisal rights as provided by
applicable law, then such Dissenting Shareholder or Shareholders, as the case
may be, shall forfeit the right to appraisal of such shares of Company Common
Stock and such shares of Company Common Stock shall thereupon be deemed to have
been converted into the right to receive, as of the Effective Time, (x) with
respect to each share of Class A Company Common Stock held by Dissenting
Shareholders, $9.16426528 in cash and 0.61222732 shares of Parent Common Stock,
without interest, and (y) with respect to each share of Class B Company Common
Stock held by Dissenting Shareholders, $11.81417001 in cash and 0.63595483
shares of Parent Common Stock, without interest (it being understood that
nothing herein shall be interpreted to give the Class B Shareholders the right
to become Dissenting Shareholders without violating the Class B Voting
Agreement). The Company shall give Parent (A) prompt notice of any written
demands for appraisal of shares of Company Common Stock, withdrawals of demands
for appraisal and any other related instruments received by the Company, and (B)
the opportunity to direct all negotiations and proceedings with respect to any
such demands for appraisal. The Company will not, except with the prior written
consent of Parent, voluntarily make any payment with respect to any demands for
appraisal or settle, offer or otherwise negotiate to settle any demand.
Section 7.11 Registration Rights. From and after the Effective Time, Parent
agrees to grant the Class B Shareholders and their permitted assignees and
transferees registration rights pursuant to a Registration Rights Agreement to
be entered into promptly after the date hereof. Parent agrees that the
registration rights shall include two demand registration rights and unlimited
piggy-back rights subject to any existing registration rights agreements of
Parent at the expense of Parent with standard indemnification provisions. In
addition, the Registration Rights Agreement will provide for the Class B
Shareholders to be entitled to proportionate tag-along rights upon any sale or
other transfer for value of shares of Parent Common Stock by members of the
Rigas family.
Section 7.12 Board of Directors. Parent agrees that from and after the
Effective Time, for so long as the Class B Shareholders and the Century
Permitted Assignees and Transferees (as defined below) own at least 10% of the
outstanding Common Stock of Parent (the "10% Requirement"), the Class B
Shareholders and the Century Permitted Assignees and Transferees shall be
entitled to nominate up to three members of Parent's board of directors (the
"Century Designees"). In the event any Century Designee ceases to serve as a
Director of Parent, whether as a result of his resignation, removal or
otherwise, his or her successor shall be named by the Century Designee who at
such time holds the most shares of Parent Common Stock, subject to approval by
the Parent, which approval will not be unreasonably withheld or delayed, to
serve until the next annual meeting of shareholders of Parent. Prior to the
Effective Time, Parent agrees to take all such action as is necessary so that
from and after the Effective Time, so long as the 10% Requirement is satisfied,
the Parent Board of Directors shall include Xxxxxxx Xxx, Xxxxx Xxxxxxxxx and
Xxxxxxx Xxxxxxxxx or such other persons designated by Xxxxxxx Xxx which are
reasonably acceptable to Parent. "Century Permitted Assignees and Transferees"
shall mean a person or entity (i) to whom Parent Common Stock has been
transferred from a Class B Shareholder or another Century Permitted Assignee and
Transferee and (ii) who or which is an affiliate, immediate family member or
descendant, in each case of Xxxxxxx Xxx, or a trust created for the benefit of
Xxxxxxx Xxx or an affiliate, immediate family member or descendant, in each case
of Xxxxxxx Xxx.
Section 7.13 Citizens Joint Venture. At the Effective Time, Parent will
purchase from Citizens Cable Company or its Affiliates the 50% interest owned by
Citizens Cable Company in Citizens-Century Cable Television Venture for a
purchase price to be mutually agreed upon by Parent, the Company and Citizens
Cable Company.
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ARTICLE VIII
CONDITIONS TO THE MERGER
Section 8.01 Conditions to the Obligations of Each Party. The respective
obligations of the parties to consummate the Merger are subject to the
satisfaction, at or prior to the Effective Time, of each of the following
conditions:
(a) The shareholders of the Company shall have approved and adopted this
Agreement and the Merger pursuant to the requirements of the Company's
certificate of incorporation and by-laws and the NJBCA.
(b) The waiting period (and any extension thereof) applicable to the Merger
under the HSR Act shall have expired or been terminated.
(c) The Registration Statement shall have been declared effective in
accordance with the provisions of the Securities Act and no stop order with
respect thereto shall be in effect at the Effective Time.
(d) The consummation of the Merger shall not be restrained, enjoined or
prohibited by any order, judgment, decree, injunction or ruling of a court of
competent jurisdiction or any Governmental Entity entered after the parties have
used their reasonable best efforts to prevent such entry. There shall not have
been any statute, rule or regulation enacted, promulgated or deemed applicable
to the Merger by any Governmental Entity that prevents the consummation of the
Merger.
Section 8.02 Conditions Precedent to the Obligations of Parent and Merger
Sub. The obligations of Parent and Merger Sub to consummate the Merger are
subject to the satisfaction, at or prior to the Effective Time, of each of the
following further conditions:
(a) Each of the representations and warranties of the Company contained in
this Agreement shall have been true and correct in all respects when made and on
and as of the Closing Date as if made on and as of such date. Parent shall have
received a certificate to such effect of an executive officer of the Company.
(b) The Company shall have performed and complied in all material respects
with all agreements and covenants required to be performed and complied with by
it under this Agreement on or prior to the Closing Date. Parent shall have
received a certificate to such effect of an executive officer of the Company.
(c) All consents, waivers, approvals and authorizations required to be
obtained from any Governmental Authority prior to the consummation of the
transactions contemplated hereby shall have been obtained, except where the
failure to obtain any such consent, waiver, approval or authorization would not
have a Material Adverse Effect. For purposes of this Section 8.02(c), the
failure to obtain required consents, waivers, approvals or authorizations from
Franchising Authorities will not be deemed to cause a Material Adverse Effect
unless the Franchises (excluding Franchises covering the City of Fairfield,
California, Sonoma City, California and City of Rohnert Park, California) with
respect to which such consents, waivers, approvals or authorizations are not
obtained prior to the date referred to in Section 9.01(d) cover more than 50% of
the subscribers of the Company and the Company Subsidiaries, taken as a whole
(excluding Franchises covering the City of Fairfield, California, Sonoma City,
California and City of Rohnert Park, California).
(d) Parent shall have received an opinion of Xxxxxxxx Ingersoll
Professional Corporation, dated the Effective Time, to the effect that (i) the
Merger should be treated for federal income tax purposes as a reorganization
within the meaning of Section 368(a) of the Code and (ii) each of Parent, Merger
Sub and the Company should be a party to the reorganization within the meaning
of Section 368(b) of the Code. In rendering such opinion, Xxxxxxxx Xxxxxxxxx
Professional Corporation may receive and rely upon representations contained in
certificates of Parent and Merger Sub, the Company and others, in each case in
form and substance reasonably acceptable to Xxxxxxxx Ingersoll Professional
Corporation.
29
Section 8.03 Conditions Precedent to the Obligations of the Company. The
obligation of the Company to consummate the Merger is subject to the
satisfaction, at or prior to the Effective Time, of each of the following
further conditions:
(a) Each of the representations and warranties of Parent and Merger Sub
contained in this Agreement shall have been true and correct in all respects
when made and on and as of the Closing Date as if made on and as of such date.
The Company shall have received a certificate to such effect of an executive
officer of Parent.
(b) Each of Parent and Merger Sub shall have performed and complied in all
material respects with all agreements and covenants required to be performed and
complied with by it under this Agreement on or prior to the Closing Date. The
Company shall have received a certificate to such effect of an executive officer
of Parent.
(c) The shares of Parent Common Stock to be issued pursuant to the Merger
shall have been approved for listing on the Nasdaq National Market, subject only
to official notice of issuance.
(d) The Company shall have received an opinion of Xxxxxx, Xxxx & Xxxxxxxx
LLP, dated the Effective Time, to the effect that (i) the Merger should be
treated for federal income tax purposes as a reorganization within the meaning
of Section 368(a) of the Code and (ii) each of Parent, Merger Sub and the
Company should be a party to the reorganization within the meaning of Section
368(b) of the Code. In rendering such opinion, Xxxxxx, Xxxx & Xxxxxxxx LLP may
receive and rely upon representations contained in certificates of Parent and
Merger Sub, the Company and others, in each case in form and substance
reasonably acceptable to Xxxxxx, Xxxx & Xxxxxxxx LLP.
ARTICLE IX
TERMINATION
Section 9.01 Termination. This Agreement may be terminated and the Merger
may be abandoned at any time prior to the Effective Time, notwithstanding
approval thereof by the shareholders of the Company:
(a) by mutual written agreement of the Company and Parent;
(b) by either the Company or Parent, if the Merger has not been
consummated by June 5, 2000; provided that the right to terminate this
Agreement pursuant to this Section 9.01(b) will not be available to any
party whose breach of any provision of this Agreement results in the
failure of the Merger to be consummated by such time;
(c) by either the Company or Parent, if there shall be any law or
regulation that makes consummation of the Merger illegal or otherwise
prohibited or if any judgment, injunction, order or decree enjoining the
parties from consummating the Merger is entered and such judgment,
injunction, order or decree shall become final and nonappealable;
(d) by Parent, upon a breach of any representation, warranty, covenant
or agreement of the Company, or if any representation or warranty of the
Company shall become untrue, in either case such that the conditions set
forth in Section 8.02 would be incapable of being satisfied by June 5,
2000; and
(e) by the Company, upon a breach of any representation, warranty,
covenant or agreement of Parent or Merger Sub, or if any representation or
warranty of Parent or Merger Sub shall become untrue, in either case such
that the conditions set forth in Section 8.03 would be incapable of being
satisfied by June 5, 2000.
The party desiring to terminate this Agreement pursuant to this Section
9.01 (other than pursuant to Section 9.01(a)) shall give notice of such
termination to the other party.
30
Section 9.02 Effect of Termination. If this Agreement is terminated
pursuant to Section 9.01, this Agreement will become void and of no effect with
no liability on the part of any party hereto or its respective directors,
officers or shareholders, except that the agreements contained in Section 9.03
will survive the termination hereof. Nothing herein shall relieve any party from
liability for any breach of this Agreement.
Section 9.03 Fees and Expenses. Whether or not the Merger is consummated,
all costs and expenses incurred in connection with the Merger, this Agreement
and the transactions contemplated by this Agreement will be paid by the party
incurring such expenses. Notwithstanding anything in this Agreement to the
contrary, in the event that this Agreement is terminated for any reason other
than pursuant to Section 9.01 (a) or (e), then, (i) the Company shall reimburse
Parent, within five (5) business days after such termination, for Parent's
actual costs and expenses in connection with this Agreement and the transactions
contemplated thereby, in an amount not to exceed $10,000,000 and (ii) if (y) the
Company enters into an agreement or (z) there is consummated an Acquisition
Transaction with a third party, in each case within twenty-four (24) months
after the date of such termination, the Company shall pay to Parent, within five
(5) business days after such agreement is entered into or transaction is
consummated, the amount of one hundred million dollars ($100,000,000) as
compensation for the role that Parent played in creating the opportunity for
such Acquisition Transaction by entering into this Agreement. The rights of
Parent and the payments to which Parent is entitled under this Section 9.03 are
not exclusive, and are in addition to any other rights or remedies that Parent
may have at law or in equity.
ARTICLE X
MISCELLANEOUS
Section 10.01 Notices. All notices, requests and other communications to
any party hereunder shall be in writing and shall be deemed to have been duly
given when delivered in person, by overnight courier or by facsimile to the
respective parties as follows:
If to Parent or Merger Sub, to:
Adelphia Communications Corporation
Main at Xxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
Attention: Xxxxxxx X. Xxxxx, Executive Vice President
with a copy to:
Xxxxxxxx Ingersoll Professional Corporation
Xxx Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxxx, XX 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
Attention: Xxxxx X. Xxxxxx
If to the Company, to:
Century Communications Corp.
00 Xxxxxx Xxxxxx
Xxx Xxxxxx, XX 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
Attention: Office of the President
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with a copy to:
Xxxxxx, Xxxx & Xxxxxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxxxx
or such other address or facsimile number as such party may specify for the
purpose by written notice to the other parties hereto. Each such notice, request
or other communication will be effective: (i) if delivered in person, when such
delivery is made at the address specified in this Section 10.01; (ii) if
delivered by overnight courier, the next business day after such delivery is
sent to the address specified in this Section 10.01; or (iii) if delivered by
facsimile, when such facsimile is transmitted to the facsimile number specified
in this Section 10.01 and the appropriate confirmation is received.
Section 10.02 Survival of Representations, Warranties and Agreements. The
representations and warranties and agreements contained herein and in any
certificate or other writing delivered pursuant hereto will not survive beyond
the Effective Time. This Section 10.02 will not limit any covenant or agreement
of the parties which by its terms contemplates performance after the Effective
Time.
Section 10.03 Amendment. This Agreement may be amended by the Company and
Parent at any time before or after any approval of this Agreement by the
shareholders of the Company. After any such approval, no amendment may be made
that decreases the Merger Consideration or that adversely affects the rights of
the Company's shareholders hereunder without the approval of such shareholders.
This Agreement may not be amended except by an instrument in writing signed on
behalf of all the parties.
Section 10.04 Extension; Waiver. At any time prior to the Effective Time,
the parties may: (i) extend the time for the performance of any of the
obligations or other acts of any other party; (ii) waive any inaccuracies in the
representations and warranties contained herein by any other party or in any
document, certificate or writing delivered pursuant hereto by any other party;
or (iii) waive compliance with any of the agreements of any other party or with
any conditions to its own obligations. Any agreement on the part of any party to
any such extension or waiver will be valid only if set forth in an instrument in
writing signed on behalf of such party.
Section 10.05 Successors and Assigns. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns. No party may assign, delegate or
otherwise transfer any of its rights or obligations under this Agreement without
the prior written consent of the other parties.
Section 10.06 Governing Law. This Agreement will be construed in accordance
with and governed by the law of the State of Delaware applicable to agreements
entered into and to be performed wholly within such State.
Section 10.07 Jurisdiction. Each of the parties: (i) consents to submit
itself to the personal jurisdiction of any federal court located in the State of
Delaware or any Delaware state court in the event any dispute arises out of this
Agreement or the Merger; (ii) agrees that it will not attempt to deny or defeat
such personal jurisdiction by motion or other request for leave from any such
court; and (iii) agrees that it will not bring any action relating to this
Agreement or the Merger in any court other than a federal or state court sitting
in the State of Delaware.
32
Section 10.08 Counterparts; Effectiveness. This Agreement may be signed in
any number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
This Agreement will become effective when each party shall have received
counterparts hereof signed by all of the other parties.
Section 10.09 Entire Agreement; No Third-party Beneficiaries. This
Agreement and the other agreements referred to herein or executed
contemporaneously herewith constitute the entire agreement, and supersede all
prior agreements and understandings, both written and oral, between the parties
with respect to the subject matter of this Agreement. No representation,
inducement, promise, understanding, condition or warranty not set forth herein
has been made or relied upon by any party. This Agreement, other than as
provided in Sections 6.01 and 6.02, is not intended to confer upon any Person
other than the parties any rights or remedies.
Section 10.10 Headings. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
Section 10.11 Severability. In the event that any one or more of the
provisions contained in this Agreement shall be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision of this Agreement.
Section 10.12 Definitions.
(a) When used in this Agreement, the following terms have the following
meanings:
"Affiliate" as applied to any Person, means any other Person directly or
indirectly controlling, controlled by, or under common control with, that
Person.
"Business Day" means any day other than a Saturday, Sunday or any other day
on which banks in the State of New York are authorized or obligated to be
closed.
"Code" means the Internal Revenue Code of 1986, as amended.
"Company Disclosure Schedule" means the Disclosure Schedules attached
hereto provided by the Company.
"Company Subsidiary" means any Subsidiary of the Company.
"Environmental Law" means any applicable federal, state or local law,
regulation, order, decree or judicial opinion or other agency requirement having
the force and effect of law and relating to noise, odor, Hazardous Substances or
the protection of public health or safety or any other environmental matter.
"ERISA Affiliate" means a trade or business affiliated within the meaning
of Sections 414(b), (c) or (m) of the Code.
"Exchange Agent" means a bank or trust company organized under the laws of
the United States or any state thereof with capital, surplus and undivided
profits of at least $500,000,000.
"Franchise" means a franchise within the meaning of Section 602(9) of the
Cable Communications Policy Act of 1984 (47 U.S.C. Section 522(9).
"Franchising Authority" has the meaning such term is given by Section
602(10) of the Cable Communications Policy Act of 1984 (47 U.S.C. Section
522(10).
"Hazardous Substance" means any toxic or hazardous substance that is
regulated by or under authority of any Environmental Law.
33
"GAAP" means generally accepted accounting principles in effect in the
United States of America as of the date of the applicable determination.
"Governmental Entity" means any government or subdivision thereof, or any
administrative, governmental or regulatory authority, agency, commission,
tribunal or body, domestic, foreign or supranational.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset.
"Material Adverse Effect", except as otherwise provided in Section 8.02(c),
means (i) with respect to the Company, a material adverse effect on the
business, assets, operations or financial condition of the Company and its
Subsidiaries, taken as a whole, other than any such effect arising out of or
resulting from the transactions contemplated by this Agreement or general
economic, financial, competitive or market conditions or from changes in or
affecting the cable television or communications industries generally or (ii)
with respect to Parent or Merger Sub, a material adverse effect on the business,
assets, operations or financial condition of Parent, Merger Sub and their
Subsidiaries, taken as a whole, other than any such effect arising out of or
resulting from the transactions contemplated by this Agreement or general
economic, financial, competitive or market conditions or from changes in or
affecting the cable television or communications industries generally.
"Parent Common Stock" means the Class A common stock, par value $.01 per
share, of Parent.
"Parent Disclosure Schedule" means the Disclosure Schedules attached hereto
provided by Parent
"Parent Subsidiary" means any Subsidiary of Parent.
"Person" means an individual, a corporation, a limited liability company, a
partnership, an association, a trust or any other entity or organization,
including a government or political subdivision or any agency or instrumentality
thereof.
"SEC" means the Securities and Exchange Commission.
"Subsidiary" of any Person means any other Person of which securities or
other ownership interests having ordinary voting power to elect a majority of
the board of directors or other Persons performing similar functions are
directly or indirectly owned or controlled by such Person.
"Tax" and "Taxes" means all federal, state, local, foreign or other taxing
authority net income, franchise, sales, use, ad valorem, property, payroll,
withholding, excise, severance, transfer, employment, alternative or add-on
minimum, stamp, occupation, premium, environmental or windfall profits taxes,
and other taxes, charges, fees, levies, imposts, customs, duties, licenses or
other assessments, together with any interest and any penalties, additions to
tax or additional amounts imposed by any taxing authority.
(b) Each of the following additional terms is defined in the Section
identified below:
Acquisition Transaction 5.02(c), 20
Agreement Preamble, 4
Antitrust Laws 7.07(b), 23
Class A Merger Consideration 1.03(a), 5
Class B Merger Consideration 1.03(b), 5
Class B Voting Agreement Recitals, 4
Class A Company Common Stock 1.02(a), 5
Class B Company Common Stock 1.02(a), 5
Class B Shareholders Recitals, 4
Closing 1.01(b), 4
Closing Date 1.01(b), 4
34
Communications Act 3.03, 9
Company Preamble, 4
Company Board 3.02, 8
Company Common Stock 1.02(a), 5
Company SEC Reports 3.07, 11
Company Securities 3.05(c), 10
Company Shareholder Meeting 7.03(a), 22
Company Subsidiary Securities 3.06(b), 10
Effective Time 1.01(c), 4
Employee Benefit Arrangement 5.01(e), 19
Employee Plan 3.13(a), 12
ERISA 3.13(c), 13
Exchange Act 3.03, 9
Exchange Agent 1.05, 5
FCC 3.03, 9
HSR Act 3.03, 9
Indemnified Parties 6.01(a), 21
Interested Shareholder 4.14, 18
Letter of Transmittal 1.05, 5
Merger 1.01(a), 4
Merger Consideration 1.03(b), 5
Merger Sub Preamble, 4
NJBCA 1.01(a), 4
Option 1.14(a), 8
Option Plans 1.14(a), 8
Parent Preamble, 4
Parent Common Stock 1.03(a), 5
Parent SEC Reports 4.07, 16
Parent Securities 4.05(c), 15
Parent Shareholders Recitals, 4
Parent Subsidiary Securities 4.06(b), 16
Proxy Statement/Prospectus 7.03(b), 22
Registration Statement 4.09(a), 17
Rigas Class B Voting Agreement Recitals, 4
Securities Act 3.03, 9
Significant Subsidiary of Parent 4.04, 15
Significant Subsidiary of the Company 3.04, 9
Surviving Corporation 1.01(a), 4
Violation 3.04, 9
35
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
duly executed by its respective authorized officer as of the day and year first
above written.
ADELPHIA COMMUNICATIONS CORPORATION
By: /s/ XXXXXXX X. XXXXX
-------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Executive Vice President
ADELPHIA ACQUISITION SUBSIDIARY, INC.
By: /s/ XXXXXXX X. XXXXX
-------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Executive Vice President
CENTURY COMMUNICATIONS CORP.
By: /s/ XXXXX XXXXXXXXX
-------------------------------------
Name: Xxxxx Xxxxxxxxx
Title: Chief Financial Officer
36