EXHIBIT 7(a)
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
TCID-SVHH, INC.
AND
SHHH ACQUISITION CORP.
AND
TCI DEVELOPMENT CORPORATION
AND
ADELPHIA COMMUNICATIONS CORPORATION
AUGUST 31, 1998
TABLE OF CONTENTS
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Page
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1. NAME OF SURVIVING CORPORATION, CERTIFICATE OF INCORPORATION, BYLAWS..................... 2
1.1 Name of Surviving Corporation.......................................................... 2
1.2 Certificate of Incorporation........................................................... 2
1.3 Bylaws; Directors and Officers......................................................... 2
1.4 Filing of Certificate of Merger; Effective Date; Effective Time........................ 2
1.5 Effects of Merger...................................................................... 2
1.6 Tax-Free Reorganization................................................................ 2
2. STATUS AND CONVERSION OF SECURITIES..................................................... 3
2.1 Company Capital Stock.................................................................. 3
2.2 Merger Subsidiary Common Stock......................................................... 3
3. CLOSING................................................................................. 4
3.1 Closing; Date and Location............................................................. 4
3.2 Actions to Be Taken at the Closing..................................................... 4
3.3 Closing of Company's Transfer Books.................................................... 5
4. REPRESENTATIONS AND WARRANTIES OF COMPANY............................................... 5
4.1 Corporate Standing..................................................................... 5
4.2 Authorization.......................................................................... 5
4.3 Title to Assets........................................................................ 6
4.4 Agreements with Employees.............................................................. 6
4.5 Litigation or Judgments................................................................ 6
4.6 Tax Returns and Payments............................................................... 7
4.7 No Liabilities......................................................................... 7
4.8 Compliance with Laws................................................................... 7
4.9 Right of First Refusal................................................................. 7
4.10 HSR Act Filing........................................................................ 8
4.11 No Dissenting Shareholder............................................................. 8
4.12 Company Formation..................................................................... 8
5. REPRESENTATIONS, WARRANTIES AND COVENANTS OF SHAREHOLDER................................ 8
5.1 Status, Power and Authority............................................................ 8
5.2 Authorization of Agreement............................................................. 8
5.3 Litigation............................................................................. 9
5.4 Company Shares......................................................................... 9
5.5 Capitalization of the Company.......................................................... 9
5.6 Shareholder Representations............................................................ 10
5.7 Net Worth.............................................................................. 12
5.8 Consummation of Agreement.............................................................. 12
6. REPRESENTATIONS, WARRANTIES AND COVENANTS OF MERGER SUBSIDIARY AND PARENT............... 13
6.1 Status, Power and Authority............................................................ 13
6.2 Authorization of Agreement............................................................. 13
6.3 Litigation............................................................................. 14
6.4 HSR Act Filing......................................................................... 14
6.5 No Dissenting Shareholder.............................................................. 14
6.6 Consummation of Agreement.............................................................. 14
7. REPRESENTATIONS, WARRANTIES AND COVENANTS OF PARENT..................................... 14
7.1 Status, Power and Authority............................................................ 14
7.2 Authorization of Agreement............................................................. 15
7.3 Litigation............................................................................. 15
7.4 Parent's Financial Statements and Condition; Capitalization; Material Adverse Change... 15
7.5 Ownership of Merger Subsidiary Shares.................................................. 16
7.6 Parent Common Stock.................................................................... 16
7.7 Permits and Licenses................................................................... 16
7.8 Tax Returns and Payments............................................................... 17
7.9 Disclosure............................................................................. 17
7.10 Consummation of Agreement............................................................. 17
8. COVENANTS PENDING THE CLOSING........................................................... 17
8.1 Maintenance of Business................................................................ 17
8.2 Access for Investigation............................................................... 18
8.3 Notice................................................................................. 18
9. CONDITIONS TO CLOSING - MERGER SUBSIDIARY AND PARENT.................................... 19
9.1 Conditions to Obligations of Merger Subsidiary and Parent.............................. 19
10. CONDITIONS TO CLOSING - COMPANY AND SHAREHOLDER........................................ 20
10.1 Conditions to Obligations of Company and Shareholder.................................. 20
11. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION............................ 21
11.1 Survival of Representations and Warranties............................................ 21
11.2 Indemnification....................................................................... 22
11.3 Indemnification with Respect to Third-Party Claims.................................... 22
12. TERMINATION............................................................................ 26
12.1 Termination by Mutual Agreement....................................................... 26
12.2 Merger Subsidiary's or Parent's Default............................................... 26
12.3 Company's or Shareholder's Default.................................................... 26
12.4 Termination by Company or Merger Subsidiary........................................... 26
13. NOTICE................................................................................. 27
14. BROKERAGE COMMISSION................................................................... 28
15. LAWS GOVERNING......................................................................... 28
16. OTHER COVENANTS........................................................................ 29
16.1 Tax Returns........................................................................... 29
16.2 Tax Free Reorganization............................................................... 30
16.3 Indemnification of Executives......................................................... 30
17. MISCELLANEOUS.......................................................................... 31
17.1 Counterparts; Telecopy................................................................ 31
17.2 Assignment............................................................................ 31
17.3 Entire Agreement...................................................................... 31
17.4 Interpretation........................................................................ 31
17.5 Expenses.............................................................................. 32
17.6 Confidentiality....................................................................... 32
17.7 Public Announcements.................................................................. 32
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17.8 Waivers............................................................................... 33
17.9 Partial Invalidity.................................................................... 33
17.10 Incorporation by Reference........................................................... 33
17.11 No Presumption Against the Draftsman................................................. 33
17.12 Further Assurances................................................................... 33
17.13 Amendment............................................................................ 34
17.14 WAIVER OF JURY TRIAL................................................................. 34
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AGREEMENT AND PLAN OF MERGER
----------------------------
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement") is dated August 31,
1998, by and among TCID-SVHH, INC., a Delaware corporation (the "Company"), and
SHHH ACQUISITION CORP., a Delaware corporation (the "Merger Subsidiary") (the
Company and the Merger Subsidiary being hereinafter sometimes called the
"Constituent Corporations"), and TCI DEVELOPMENT CORPORATION, a Colorado
corporation (the "Shareholder"), and ADELPHIA COMMUNICATIONS CORPORATION, a
Delaware corporation (the "Parent"). Each of Shareholder and Parent is joining
as a third party to undertake certain obligations and is not a Constituent
Corporation.
RECITALS:
1. Company owns the Class A Limited Partner interest in Syracuse Hilton
Head Holdings, L.P. (the "Partnership Interest"), a Delaware limited partnership
existing and operating under the Amended and Restated Syracuse Hilton Head
Holdings, L.P. Limited Partnership Agreement dated as of December 31, 1991, as
amended (the "Partnership Agreement");
2. Shareholder owns all of the issued and outstanding shares of capital
stock (the "Company Shares") of Company;
3. Parent, Merger Subsidiary and Shareholder desire that the Merger
Subsidiary be merged with and into Company under and pursuant to the Delaware
General Corporation Law (the "DGCL") into a single corporation (the "Merger")
existing under the laws of the State of Delaware, and Company shall be the
surviving corporation in the Merger (Company in its capacity as such surviving
corporation being sometimes referred to herein as the "Surviving Corporation");
4. The Merger is permitted pursuant to the DGCL; and
5. For federal income tax purposes, it is intended that the Merger shall
qualify as a reorganization within the meaning of Section 368(a) of the Internal
Revenue Code of 1986, as amended (the "Code").
NOW, THEREFORE, in consideration of the premises and the mutual agreements,
provisions and covenants herein contained and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the
parties hereto, intending to be legally bound, hereby agree that the Merger
Subsidiary shall be merged with and into Company in accordance with the DGCL,
Company shall be the Surviving Corporation, and the parties hereto adopt and
agree to the following agreements, terms and conditions relating to the Merger
and the mode of carrying the same into effect.
1. NAME OF SURVIVING CORPORATION, CERTIFICATE OF INCORPORATION, BYLAWS.
-------------------------------------------------------------------
1.1 NAME OF SURVIVING CORPORATION.
-----------------------------
The name of the Surviving Corporation from and after the Effective
Time shall be SHHH Acquisition Corp.
1.2 CERTIFICATE OF INCORPORATION.
----------------------------
The Certificate of Incorporation of the Merger Subsidiary as in effect
on the date hereof shall from and after the Effective Time (as
hereinafter defined) be and continue to be the Certificate of
Incorporation of the Surviving Corporation until changed or amended as
provided by law.
1.3 BYLAWS; DIRECTORS AND OFFICERS.
------------------------------
The Bylaws of the Merger Subsidiary as in effect immediately prior to
the Effective Time shall from and after the Effective Time be and
continue to be the Bylaws of the Surviving Corporation until amended
as provided therein. The directors and officers of the Merger
Subsidiary immediately prior to the Effective Time shall, from and
after the Effective Time, be the directors and officers, respectively,
of the Surviving Corporation until their successors shall have been
duly elected or appointed and qualified or until their earlier death,
resignation or removal in accordance with the Surviving Corporation's
Certificate of Incorporation and Bylaws.
1.4 FILING OF CERTIFICATE OF MERGER; EFFECTIVE DATE; EFFECTIVE TIME.
---------------------------------------------------------------
Simultaneously with the Closing, an appropriate Certificate of Merger
shall be filed with the Secretary of State of Delaware. The Merger
shall become effective immediately upon such filing with the Secretary
of State of the State of Delaware, which time is herein referred to as
the "Effective Time" and which date is herein referred to as the
"Effective Date."
1.5 EFFECTS OF MERGER.
-----------------
The Merger shall have the effects set forth in Section 259 of the
DGCL.
1.6 TAX-FREE REORGANIZATION.
-----------------------
The Merger is intended to be a reorganization within the meaning of
Section 368(a) of the Code, and this Agreement is intended to be a
"plan of reorganization" within the meaning of the regulations
promulgated under Section 368 of the Code.
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2. STATUS AND CONVERSION OF SECURITIES.
-----------------------------------
The manner and basis of converting the shares of the capital stock of the
Constituent Corporations in the Merger and the nature and amount of
securities of the Parent which the Shareholder is to receive in exchange
for such shares in the Merger are as follows:
2.1 COMPANY CAPITAL STOCK.
---------------------
(a) At the Effective Time, the Company Shares shall, by virtue of the
Merger and without any action on the part of the Parent, the
Merger Subsidiary, the Company, the Surviving Corporation or the
Shareholder, automatically be canceled and be converted into
2,250,000 shares of Class A common stock, par value $.01 per
share, of the Parent (the "Parent Common Stock").
(b) In the event of any reclassification, stock split, stock
dividend, or other subdivision or combination, with respect to
the Parent Common Stock, any change or conversion of Parent
Common Stock into other securities of the Parent or any other
dividend or distribution with respect to the Parent Common Stock
prior to the Effective Time, appropriate and proportionate
adjustments, if any, shall be made to the number of shares of
Parent Common Stock to be received by Shareholder.
(c) If at any time after the Effective Time the Surviving Corporation
shall consider or be advised that any deeds, bills of sale,
assignments or assurances or any other acts or things are
necessary, desirable or proper (a) to vest, perfect or confirm,
of record or otherwise, in the Surviving Corporation its right,
title or interest in, to or under any of the rights, privileges,
powers, franchises, properties or assets of either of the
Constituent Corporations, or (b) otherwise to carry out the
purposes of this Agreement, the Surviving Corporation and its
proper officers and directors or their designees shall be
authorized to execute and deliver, in the name and on behalf of
either of the Constituent Corporations, all such deeds, bills of
sale, assignments and assurances and to do, in the name and on
behalf of either Constituent Corporation, all such other acts and
things as may be necessary, desirable or proper to vest, perfect
or confirm the Surviving Corporation's right, title or interest
in, to or under any of the rights, privileges, powers,
franchises, properties or assets of such Constituent Corporation
and otherwise to carry out the purposes of this Agreement.
2.2 MERGER SUBSIDIARY COMMON STOCK.
------------------------------
Each share of common stock, par value $.01 per share, of the Merger
Subsidiary (the "Subsidiary Common Stock") outstanding immediately
prior to the Effective Time shall, by virtue of the Merger and without
any action on the part of the
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holder thereof, be converted into and be one share of the Common Stock
of the Surviving Corporation.
3. CLOSING.
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3.1 CLOSING; DATE AND LOCATION.
--------------------------
The consummation of the transactions contemplated hereby including the
Merger shall constitute the "Closing." Unless otherwise mutually
agreed to by the parties, the Closing shall take place at 10:00 a.m.,
local time, at the offices of Xxxxxxxx Xxxxxxxxx Professional
Corporation, One Oxford Centre, 000 Xxxxx Xxxxxx, 00xx Xxxxx,
Xxxxxxxxxx, Xxxxxxxxxxxx 00000. The parties agree to close the
transactions contemplated by this Agreement within five (5) days after
all of the conditions to Closing have been satisfied or waived,
whichever shall later occur, which specified date and time shall
constitute the "Closing Date." The Closing will be deemed to have
taken place at the Effective Time.
3.2 ACTIONS TO BE TAKEN AT THE CLOSING.
----------------------------------
At the Closing, the parties will take the following actions and
deliver the following documents:
(a) Company and Merger Subsidiary will cause the certificate of
merger to be filed in accordance with Section 1.4 above and will
take any and all other lawful actions and do any and all other
lawful things necessary to effect the Merger and to enable the
Merger to become effective.
(b) Company will deliver to Merger Subsidiary (1) a certified copy of
its certificate of incorporation dated within a recent date of
the Closing Date and (2) a certificate dated within a recent date
of the Closing Date issued by the State of Delaware as to the
good standing of Company in such state; and Merger Subsidiary
will deliver to Shareholder (1) certified copies of its corporate
charter dated within a recent date of the Closing Date and (2) a
certificate dated within a recent date of the Closing Date issued
by the State of Delaware as to the good standing of Merger
Subsidiary in such state.
(c) Parent will deliver the Parent Common Stock required to be
delivered under Section 2.1 to Shareholder, free and clear of any
liens, claims or encumbrances, and Parent will execute and
deliver to Shareholder a registration rights agreement in the
form of Exhibit 3.2(c) to this Agreement (the "Registration
--------------
Rights Agreement").
(d) Shareholder, Company, Parent and Merger Subsidiary will execute
and deliver such other documents and certificates as are required
(1) by the
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terms of this Agreement and/or (2) as may be reasonably requested
by the other party.
3.3 CLOSING OF COMPANY'S TRANSFER BOOKS.
-----------------------------------
At the Effective Time, Shareholder will cease to have any rights as a
shareholder of Company, except for the right to surrender the Company
Share certificates in exchange for the Parent Common Stock pursuant to
Section 2.1 above. Upon completion of the actions described in
Section 2.1 above, the stock transfer books of Company will be closed
and no transfer of Company Shares will thereafter be made, and the
certificates representing the Company Shares held by Shareholder
immediately prior to the Effective Time will be cancelled.
4. REPRESENTATIONS AND WARRANTIES OF COMPANY.
-----------------------------------------
Company (solely with respect to the period prior to Closing) and
Shareholder, jointly and severally, represent and warrant to the Parent and
Merger Subsidiary as of the date of this Agreement and as of the Closing
Date, as follows:
4.1 CORPORATE STANDING.
------------------
Shareholder is the sole shareholder of Company, which is a corporation
duly organized, validly existing and in good standing under the laws
of the State of Delaware. Company has all of the requisite corporate
power and authority to own its assets, to execute and deliver this
Agreement and the documents contemplated hereby, and to perform and
comply with the terms, covenants and conditions to be performed and
complied with by Company hereunder and thereunder.
4.2 AUTHORIZATION.
-------------
(a) All necessary and proper corporate action has been taken to
authorize and approve this Agreement and the Company Transaction
Documents (as defined in Section 4.2(b) below), the consummation
of the transactions contemplated hereby and thereby and the
performance by Company of all the terms and conditions hereof and
thereof on its part to be performed. The execution and delivery
of this Agreement and of the Company Transaction Documents by
Company, the consummation of the transactions contemplated hereby
and thereby and fulfillment of and compliance with the terms and
provisions hereof and thereof do not and will not: (i) violate
any provision of any judicial or administrative order, award,
judgment or decree applicable to Company; (ii) conflict with or
violate any of the provisions of the charter documents of
Company; (iii) conflict with, result in a breach of or constitute
a default under any agreement or instrument to which Company is a
party or by which
5
Company or any of its assets is bound; or (iv) require the
consent or approval of any Person or entity except under the HSR
Act.
(b) This Agreement has been, and each and every other agreement,
instrument, certificate or other document to which Company is a
party that is to be executed, delivered and performed by Company
pursuant hereto, (collectively, "Company Transaction Documents"),
when executed and delivered by Company, will have been, duly
authorized, executed and delivered by Company and constitutes,
or, when executed and delivered by Company will constitute,
legal, valid and binding obligations of Company, enforceable
against it in accordance with their terms, except as such
enforceability may be limited by bankruptcy, insolvency or other
similar laws affecting the rights of creditors generally and by
general principles of equity.
4.3 TITLE TO ASSETS.
---------------
Company has not owned and does not own any assets and properties,
tangible or intangible, other than the Partnership Interest and the
cash used by Company to purchase the Partnership Interest and rights
and obligations under a tax-sharing agreement with an affiliate that
will be terminated as to Company prior to the Effective Time.
Company has no interest in Syracuse Hilton Head Holdings, L.P. (the
"Partnership") except for the Partnership Interest. The Company has
good and valid title to the Partnership Interest, free and clear of
all security interests, liens, claims, pledges, options, rights of
first refusal, agreements, limitations on voting rights, charges and
other encumbrances of any nature whatsoever (collectively, "Liens")
-----
except as set forth in the Partnership Agreement or imposed by
operation of law. Company is not aware of any breach by it of any
provision of the Partnership Agreement.
4.4 AGREEMENTS WITH EMPLOYEES.
-------------------------
Company is not a party to any employment agreement and has no
employees.
4.5 LITIGATION OR JUDGMENTS.
-----------------------
There is no litigation, at law or in equity, or any proceedings before
any commission, agency or other governmental authority, pending or, to
the best of Company's knowledge, after due inquiry, threatened against
Company, and, to the best of Company's knowledge, after due inquiry,
no facts or circumstances exist which could reasonably be expected to
give rise to any such litigation or proceedings.
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4.6 TAX RETURNS AND PAYMENTS.
------------------------
Company has timely and properly filed or caused to be filed all tax
returns which it is or has been required to file on or prior to the
date hereof by any jurisdiction to which it is or has been subject,
all such tax returns being true, correct and complete. All income,
unemployment, social security, franchise, property and other taxes
levied, assessed or imposed upon Company by the United States, or any
state, or governmental sub-division of either, to the extent due and
payable, have been timely and properly paid to date, and no liability
exists for deficiencies. Except as set forth on Schedule 4.6 attached
------------
hereto, as of the date hereof there are no tax audits pending nor any
outstanding agreements or waivers extending the statutory period of
limitations applicable to any federal, state or local income tax
return of Company for any period. No tax deficiencies have been
determined, nor proposed tax assessments charged, against Company (nor
is there any reasonable basis therefor). Company has made or caused
to be made all withholdings of taxes required to be made, and such
withholdings have either been paid to the appropriate governmental
agency or set aside in appropriate accounts for such purpose. Company
has otherwise satisfied all applicable laws and agreements with
respect to the filing of tax returns and the payment of taxes. Except
for obligations under any tax-sharing agreement that will cease to
apply to Company at the Effective Time and as to which Company will
have no obligations after the Effective Time, Company is not a party
to, is not bound by, and does not have any obligation under any tax
sharing, tax indemnity, or similar agreement.
4.7 NO LIABILITIES.
--------------
Except for those relating to the Partnership Interest under the
Partnership Agreement, at the Effective Time Company will not have any
liability of any kind (contingent or otherwise) and to Company's best
knowledge there is no basis for the assertion of any claim or
liability against Company.
4.8 COMPLIANCE WITH LAWS.
--------------------
Company is in compliance with all applicable foreign, federal, state
and local laws, rules, regulations, orders, writs, injunctions,
ordinances or decrees of any governing authority, federal, state or
local court, or of any municipal or governmental department,
commission, board, bureau, agency or municipality having jurisdiction
over it.
4.9 RIGHT OF FIRST REFUSAL.
----------------------
No person or entity has any option, warrant or right of first refusal
to purchase either the Partnership Interest or the Company Shares
except as provided in the Partnership Agreement.
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4.10 HSR ACT FILING.
--------------
Company shall cooperate reasonably with Merger Subsidiary and, to the
extent required, shall file or cause to be filed with the Federal
Trade Commission ("FTC") and the Department of Justice ("DOJ") a
notification and report on behalf of Company, completed in accordance
with applicable law and regulations, with respect to the transactions
contemplated hereby, pursuant to the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended (the "HSR Act"), and the rules
promulgated thereunder.
4.11 NO DISSENTING SHAREHOLDER.
-------------------------
Shareholder is the sole shareholder of Company and, as such,
Shareholder has consented to the Merger. Therefore, there are no
dissenting shareholders entitled to appraisal as provided under the
DGCL.
4.12 COMPANY FORMATION.
-----------------
Since its incorporation the only business activity of Company has been
the ownership of the Partnership Interest.
5. REPRESENTATIONS, WARRANTIES AND COVENANTS OF SHAREHOLDER.
--------------------------------------------------------
Shareholder represents and warrants to the Parent and Merger Subsidiary as
of the date of this Agreement and as of the Closing Date, as follows:
5.1 STATUS, POWER AND AUTHORITY.
---------------------------
Shareholder is a corporation duly organized, validly existing and in
good standing under the laws of its jurisdiction of incorporation and
has the corporate power and authority to own the Company Shares and to
execute and deliver this Agreement and to perform and comply with the
terms, covenants and conditions to be performed and complied with by
Shareholder hereunder and thereunder.
5.2 AUTHORIZATION OF AGREEMENT.
--------------------------
(a) Shareholder has taken all necessary and proper corporate action
to authorize and approve this Agreement, the consummation of the
transactions contemplated hereby and the performance by
Shareholder of all of the terms and conditions hereof on the part
of Shareholder to be performed. The execution and delivery by
Shareholder of this Agreement and each and every other agreement,
instrument, certificate or document to which Shareholder is a
party that is to be executed, delivered and
8
performed by Shareholder pursuant thereto (collectively,
"Shareholder Transaction Documents"), and the consummation of the
transactions contemplated hereby and thereby, do not and will
not: (i) violate any provisions of any judicial or administrative
order, award, judgment or decree applicable to Shareholder, (ii)
conflict with any of the provisions of the charter documents of
Shareholder, (iii) conflict with, result in a breach of or
constitute a default under any material agreement or instrument
to which Shareholder is a party or by which it is bound, or (iv)
require the consent or approval of any person or entity except
under the HSR Act.
(b) This Agreement and the Shareholder Transaction Documents, when
executed and delivered by Shareholder, will have been duly
authorized, executed and delivered by Shareholder, and this
Agreement constitutes, and the Shareholder Transaction Documents,
when executed and delivered by Shareholder, will constitute,
legal, valid and binding obligations of Shareholder, enforceable
against Shareholder in accordance with their respective terms,
except as such enforceability may be limited by bankruptcy,
insolvency or other laws affecting the rights of creditors
generally and by general principles of equity.
5.3 LITIGATION.
----------
There is no litigation, at law or in equity, or any proceedings before
any commission or other governmental authority, pending or, to the
knowledge of Shareholder, after due inquiry, threatened against
Shareholder which could reasonably be expected to impair the ability
of Shareholder to consummate the transactions contemplated by this
Agreement.
5.4 COMPANY SHARES.
--------------
The Shareholder owns and holds, beneficially and of record, the entire
right, title and interest in and to all of the issued and outstanding
Company Shares, free and clear of any claim, suit, proceeding, call,
commitment, voting trust, proxy, restriction, limitation, security
interest, pledge or lien or encumbrance of any kind or nature
whatsoever except any liens imposed by operation of law, and has full
power and authority to transfer and dispose of the same hereunder.
5.5 CAPITALIZATION OF THE COMPANY.
-----------------------------
The authorized capitalization of Company is 10,000 shares of common
stock, par value $1.00 per share. Shareholder owns all of the issued
and outstanding shares of common stock of Company. Shareholder is the
sole shareholder of Company. There are no options, warrants or other
agreements to acquire any securities of Company. The Company Shares
are not subject to any preemptive right or other claim.
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5.6 SHAREHOLDER REPRESENTATIONS.
---------------------------
The Shareholder hereby represents and warrants to, and agrees with,
the Parent as follows:
(a) The Shareholder has been furnished with, and has carefully read,
the information regarding the Parent previously provided,
including the Parent's Annual Report on Form 10-K for the fiscal
year ended March 31, 1998 (the "10-K"), Parent's Quarterly Report
on Form 10-Q for the quarterly period ended June 30, 1998 (the
"June 10-Q") and the Registration Rights Agreement. Shareholder
is familiar with and understands the terms of the Merger. With
respect to tax and other economic considerations involved in this
investment, the Shareholder is not relying on the Parent (or any
agent or representative of the Parent). The Shareholder has
carefully considered and has, to the extent the Shareholder
believes such discussion necessary, discussed with the
Shareholder's professional legal, tax, accounting and financial
advisors the suitability of an investment in the Parent Common
Stock for the Shareholder 's particular tax and financial
situation and has determined that the Parent Common Stock is a
suitable investment for the Shareholder.
(b) The Shareholder acknowledges that all documents, records and
books pertaining to this investment which the Shareholder has
reasonably requested have been made available for inspection by
the Shareholder and its adviser(s).
(c) The Shareholder and its adviser(s) have had a reasonable
opportunity to ask questions of and receive answers from a person
or persons acting on behalf of the Parent concerning the issuance
of Parent Common Stock in the Merger and all such questions have
been answered to their full satisfaction.
(d) The Shareholder is not subscribing for Parent Common Stock as a
result of, or subsequent to, any advertisement, article, notice
or other communication published in any newspaper, magazine or
similar medium or broadcast over television or radio or presented
at any seminar or meeting.
(e) The Shareholder, by reason of its business or financial
experience or the business or financial experience of its
advisers, can be reasonably assumed to have the capacity to
protect its interests in connection with the investment in the
Parent Common Stock.
(f) The Shareholder is able to bear the substantial economic risks of
an investment in the Parent Common Stock for an indefinite period
of time,
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has no need for liquidity in such investment (except as permitted
herein) and, at the present time, could afford a complete loss of
such investment.
(g) The Shareholder has such knowledge and experience in financial,
tax and business matters so as to enable it to utilize the
information made available in connection with the issuance of
Parent Common Stock in the Merger to evaluate the merits and
risks of an investment in the Parent Common Stock and to make an
informed investment decision with respect thereto.
(h) The Shareholder acknowledges that the issuance of the Parent
Common Stock by the Parent to the Shareholder has not been
registered under the Securities Act or any state securities law.
Except for transfers of the Parent Common Stock permitted
pursuant to the Registration Rights Agreement: (i) the
Shareholder will not sell or otherwise transfer the Parent Common
Stock without registration under the Securities Act of 1933, as
amended (the "Securities Act"), or applicable state securities
laws or an exemption therefrom; (ii) the Shareholder represents
that the undersigned is acquiring the Parent Common Stock for the
Shareholder's own account, for investment and not with a view to
resale or distribution except in compliance with the Securities
Act; and (iii) the Shareholder has not offered or sold any
portion of the Parent Common Stock being acquired nor does the
Shareholder have any present intention of dividing such Parent
Common Stock with others or of selling, distributing or otherwise
disposing of any portion of such Parent Common Stock either
currently or after the passage of a fixed or determinable period
of time or upon the occurrence or nonoccurrence of any
predetermined event or circumstance. Except as provided in the
Registration Rights Agreement, the Parent has no obligation to
register the Parent Common Stock subscribed for hereunder.
(i) The Shareholder recognizes that investment in the Parent Common
Stock involves substantial risks, including loss of the entire
amount of such investment.
(j) The Shareholder acknowledges that each certificate representing
the Parent Common Stock shall be stamped or otherwise imprinted
with legends substantially in the following form:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
FEDERAL OR STATE SECURITIES LAWS AND MAY NOT BE OFFERED FOR SALE, SOLD
OR OTHERWISE TRANSFERRED OR ASSIGNED FOR VALUE, DIRECTLY OR
INDIRECTLY, NOR MAY THE SECURITIES BE TRANSFERRED ON THE BOOKS OF THE
PARENT, WITHOUT REGISTRATION OF SUCH SECURITIES UNDER ALL APPLICABLE
FEDERAL OR STATE
11
SECURITIES LAWS OR COMPLIANCE WITH AN APPLICABLE EXEMPTION THEREFROM,
SUCH COMPLIANCE, AT THE OPTION OF THE PARENT, TO BE EVIDENCED BY AN
OPINION OF COUNSEL, IN FORM ACCEPTABLE TO THE CORPORATION, THAT NO
VIOLATION OF SUCH REGISTRATION PROVISIONS WOULD RESULT FROM ANY
PROPOSED TRANSFER OR ASSIGNMENT.
and
THE SECURITIES REPRESENTED HEREBY ARE SUBJECT TO CERTAIN RESTRICTIONS
ON TRANSFER AS SET FORTH IN A REGISTRATION RIGHTS AGREEMENT, A COPY OF
WHICH MAY BE OBTAINED FROM THE PARENT.
(k) The Shareholder is qualified as an accredited investor within the
meaning of Rule 501(a) of Regulation D promulgated under the
Securities Act ("Regulation D").
(l) The Shareholder understands, acknowledges and agrees with the
Parent that no federal or state agency has made any finding or
determination as to the fairness of the terms of this offering of
Parent Common Stock for investment nor any recommendation or
endorsement of the Parent Common Stock, and that the issuance of
the Parent Common Stock in the Merger is intended to be exempt
from registration under the Securities Act by virtue of Section
4(2) of the Securities Act and the provisions of Regulation D
thereunder, which exemptions are in part dependent upon the
truth, completeness and accuracy of the statements made by the
Shareholder herein.
5.7 NET WORTH.
---------
Shareholder has, and Shareholder or its successor in interest shall
maintain, a sufficient net worth from the date hereof through the Closing Date
and for a period of four years after the Closing Date to satisfy Shareholder's
obligations hereunder.
5.8 CONSUMMATION OF AGREEMENT.
-------------------------
Shareholder shall perform and fulfill all obligations and conditions
on its part to be performed and fulfilled under this Agreement, to the
end that the transactions contemplated by this Agreement shall be
fully carried out.
12
6. REPRESENTATIONS, WARRANTIES AND COVENANTS OF MERGER SUBSIDIARY AND PARENT.
-------------------------------------------------------------------------
Merger Subsidiary and Parent, jointly and severally, represent and warrant
to Company and Shareholder as of the date of this Agreement and as of the
Closing Date, as follows:
6.1 STATUS, POWER AND AUTHORITY.
---------------------------
Merger Subsidiary is a corporation duly organized, validly existing
and in good standing under the laws of its jurisdiction of
incorporation and has the corporate power and authority to own and
lease its properties and to conduct its business as currently
conducted and to execute and deliver this Agreement and to perform and
comply with the terms, covenants and conditions to be performed and
complied with by Merger Subsidiary hereunder and thereunder. Parent
owns all of the issued and outstanding capital stock of Merger
Subsidiary.
6.2 AUTHORIZATION OF AGREEMENT.
--------------------------
(a) All necessary and proper corporate action has been taken to
authorize and approve this Agreement and the Merger Subsidiary
Transaction Documents (as defined in Section 6.2(a) below), the
consummation of the transactions contemplated hereby and thereby
and the performance by Merger Subsidiary of all of the terms and
conditions hereof and thereof on the part of Merger Subsidiary to
be performed. The execution and delivery by Merger Subsidiary of
this Agreement and each and every other agreement, instrument,
certificate or document to which Merger Subsidiary is a party
that is to be executed, delivered and performed by Merger
Subsidiary pursuant thereto (collectively, "Merger Subsidiary
Transaction Documents"), and the consummation of the transactions
contemplated hereby and thereby, do not and will not: (i) violate
any provisions of any judicial or administrative order, award,
judgment or decree applicable to Merger Subsidiary, (ii) conflict
with any of the provisions of the charter documents of Merger
Subsidiary, (iii) conflict with, result in a breach of or
constitute a default under any material agreement or instrument
to which Merger Subsidiary is a party or by which it is bound, or
(iv) require the consent or approval of any person or entity
except under the HSR Act.
(b) This Agreement has been, and the Merger Subsidiary Transaction
Documents, when executed and delivered by Merger Subsidiary, will
have been, duly authorized, executed and delivered by Merger
Subsidiary, and this Agreement constitutes, and the Merger
Subsidiary Transaction Documents, when executed and delivered by
Merger Subsidiary, will constitute, legal, valid and binding
obligations of Merger Subsidiary, enforceable against Merger
Subsidiary in accordance with their respective terms.
13
6.3 LITIGATION.
----------
There is no litigation, at law or in equity, or any proceedings before
any commission, agency or other governmental authority, pending or, to
the best of Merger Subsidiary's knowledge, after due inquiry,
threatened against Merger Subsidiary, and, to the best of Merger
Subsidiary's knowledge, after due inquiry, no facts or circumstances
exist which could reasonably be expected to give rise to any such
litigation or proceedings.
6.4 HSR ACT FILING.
--------------
Merger Subsidiary shall, to the extent required, file or cause to be
filed with the FTC and the DOJ a notification and report form on
behalf of Merger Subsidiary, completed in accordance with applicable
law and regulations, with respect to the transactions contemplated
hereby, pursuant to the HSR Act and the rules promulgated thereunder.
6.5 NO DISSENTING SHAREHOLDER.
--------------------------
Parent is the sole shareholder of Merger Subsidiary and, as such,
Parent has consented to the Merger. Therefore, there are no
dissenting shareholders entitled to appraisal as provided under the
DGCL.
6.6 CONSUMMATION OF AGREEMENT.
-------------------------
Merger Subsidiary shall perform and fulfill all obligations and
conditions on its part to be performed and fulfilled under this
Agreement, to the end that the transactions contemplated by this
Agreement shall be fully carried out.
7. REPRESENTATIONS, WARRANTIES AND COVENANTS OF PARENT
---------------------------------------------------
Parent represents and warrants to Company and Shareholder as of the date of
this Agreement and as of the Closing Date, as follows:
7.1 STATUS, POWER AND AUTHORITY.
---------------------------
Parent is a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation and has
the corporate power and authority to own and lease its properties and
to conduct its business as currently conducted and to execute and
deliver this Agreement and to perform and comply with the terms,
covenants and conditions to be performed and complied with by Parent
hereunder and thereunder. No approval of Parent's stockholders is
required for the Merger or the other transactions contemplated by this
Agreement.
14
7.2 AUTHORIZATION OF AGREEMENT.
--------------------------
(a) Parent has taken all necessary and proper corporate action to
authorize and approve this Agreement, the consummation of the
transactions contemplated hereby and the performance by Parent of
all of the terms and conditions hereof on the part of Parent to
be performed. The execution and delivery by Parent of this
Agreement and each and every other agreement, instrument,
certificate or document to which Parent is a party that is to be
executed, delivered and performed by Parent pursuant thereto
(collectively, "Parent Transaction Documents"), and the
consummation of the transactions contemplated hereby and thereby,
do not and will not: (i) violate any provisions of any judicial
or administrative order, award, judgment or decree applicable to
Parent, (ii) conflict with any of the provisions of the charter
documents of Parent, (iii) conflict with, result in a breach of
or constitute a default under any material agreement or
instrument to which Parent is a party or by which it is bound, or
(iv) require the consent or approval of any person or entity
except under the HSR Act.
(b) This Agreement and the Parent Transaction Documents, when
executed and delivered by Parent, will have been duly authorized,
executed and delivered by Parent, and this Agreement constitutes,
and the Parent Transaction Documents, when executed and delivered
by Parent, will constitute, legal, valid and binding obligations
of Parent, enforceable against Parent in accordance with their
respective terms.
7.3 LITIGATION.
----------
There is no litigation, at law or in equity, or any proceedings before
any commission or other governmental authority, pending or, to the
knowledge of Parent, after due inquiry, threatened against Parent
which could reasonably be expected to impair the ability of Parent to
consummate the transactions contemplated by this Agreement.
7.4 PARENT'S FINANCIAL STATEMENTS AND CONDITION; CAPITALIZATION; MATERIAL
---------------------------------------------------------------------
ADVERSE CHANGE.
--------------
(a) Parent's financial statements contained in its 10-K and its June
10-Q present fairly the consolidated financial position of Parent
and its subsidiaries as of March 31, 1998 and June 30, 1998,
respectively, and the consolidated results of their operations
for the periods then ended, in conformity with GAAP. The
financial statements of Parent contained in the filings made by
it with the SEC comply in all material respects with applicable
accounting requirements and with published rules and regulations
of the SEC with respect thereto.
15
(b) Parent's capitalization (including for this purpose, all
outstanding options, warrants and other rights to acquire capital
stock or other securities of Parent) as set forth on the June 30,
1998 balance sheet contained in the June 10-Q was accurate as of
June 30, 1998. The Parent Common Stock is not subject to any
preemptive right, claim or other interest of any person or
entity.
(c) Except as set forth in any public document filed by Parent with
the Securities and Exchange Commission, there has not been, since
March 31, 1998, any material adverse change in the financial
condition, prospects, assets, liabilities, business or results of
operations of Parent; or any damage, destruction or loss which
could materially and adversely affect the financial condition,
results of operations or future prospects of Parent; or, as of
the date of this Agreement, any entry into or commitment to a
transaction material to Parent's business.
(d) Parent has timely filed all required forms, reports and documents
with the SEC.
7.5 OWNERSHIP OF MERGER SUBSIDIARY SHARES.
-------------------------------------
Parent owns and holds, beneficially and of record, the entire right,
title and interest in and to all of the issued and outstanding capital
stock of Merger Subsidiary, free and clear of any claim, suit,
proceeding, call, commitment, voting trust, proxy, restriction,
limitation, security interest, pledge or lien or encumbrance of any
kind or nature whatsoever, and has full power and authority to
transfer and dispose of the same hereunder. There are no options,
warrants, rights, claims or agreements that would permit any person or
entity to acquire any of the capital stock of or other interest in
Merger Subsidiary.
7.6 PARENT COMMON STOCK.
--------------------
The shares of Parent Common Stock to be issued to Shareholder pursuant
to this Agreement will be, when they are issued, duly authorized,
validly issued, fully paid and nonassessable, and free and clear of
any encumbrance, claim or preemptive right.
7.7 PERMITS AND LICENSES.
--------------------
Parent holds all permits, licenses, approvals and franchises required
for the operation of its business as currently conducted. Parent and
its affiliates are in material compliance with the terms thereof and
have not received any threat or notice of revocation, termination or
cancellation of any of such permits, licenses, approvals or
franchises.
16
7.8 TAX RETURNS AND PAYMENTS.
-------------------------
Parent has timely and properly filed or caused to be filed all tax
returns which it is or has been required to file on or prior to the
date hereof by any jurisdiction to which it is or has been subject,
all such tax returns being true, correct and complete. All income,
unemployment, social security, franchise, property and other taxes
levied, assessed or imposed upon Parent by the United States, or any
state, or governmental subdivision of either, to the extent due and
payable, have been timely and properly paid to date, and no liability
exists for deficiencies. As of the date hereof, there are no tax
audits pending nor any outstanding agreements or waivers extending the
statutory period of limitations applicable to any federal, state or
local income tax return of Parent for any period. No tax deficiencies
have been determined, nor proposed tax assessments charged, against
Parent (nor is there any reasonable basis therefor). Parent has made
or caused to be made all withholdings of taxes required to be made,
and such withholdings have either been paid to the appropriate
governmental agency or set aside in appropriate accounts for such
purpose. Parent has otherwise satisfied all applicable laws and
agreements with respect to the filing of tax returns and the payment
of taxes.
7.9 DISCLOSURE.
----------
No statement made in the 10-K or the June 10-Q or any public document
filed by Parent with the Securities and Exchange Commission since the
10-K, nor any statement, representation or warranty made by Parent in
this Agreement or the Parent Transaction Documents (including
schedules and exhibits), contains any untrue statement of any material
fact or omits a material fact necessary to make the statements
contained in this Agreement or such 10-K or such June 10-Q or any
public document filed by Parent with the Securities and Exchange
Commission since the 10-K or Parent Transaction Documents, in light of
the circumstances in which they were made, not misleading.
7.10 CONSUMMATION OF AGREEMENT.
-------------------------
Parent shall perform and fulfill all obligations and conditions on its
part to be performed and fulfilled under this Agreement, to the end
that the transactions contemplated by this Agreement shall be fully
carried out.
8. COVENANTS PENDING THE CLOSING
-----------------------------
8.1 MAINTENANCE OF BUSINESS.
-----------------------
Company agrees that prior to the Effective Date:
(a) Subject to the terms and conditions herein provided, Company
shall use commercially reasonable efforts to take, or cause to be
taken, such action,
17
and to do, or cause to be done, such things as are necessary,
proper or advisable to consummate and make effective as promptly
as practicable the Merger and the transactions contemplated by
this Agreement.
(b) Except as contemplated by this Agreement, Company shall continue
to hold the Partnership Interest and shall not acquire any other
assets or properties or incur, assume or become liable for any
debts or obligations.
(c) Between the date hereof and the Effective Time, Company shall
not, (i) make any changes in its authorized capital stock; (ii)
authorize or issue any securities convertible into, or
exchangeable with, the capital stock of Company; (iii) issue any
stock options, warrants or other rights calling for the issue,
transfer, sale or delivery of its capital stock or other
securities; (iv) declare or pay any stock dividend or effect any
recapitalization, split-up, combination, exchange of shares or
other reclassification in respect of its outstanding shares of
capital stock; (v) issue, transfer, sell or deliver any shares of
its capital stock; (vi) purchase, redeem or otherwise acquire any
outstanding shares of its capital stock or any other securities
of Company or any rights, warrants or options to acquire any such
shares or securities; or (vii) declare, pay or set apart for
payment any dividends on, or make any other actual, constructive
or deemed distributions in respect of its capital stock or
otherwise make any payments to its stockholders in their capacity
as such.
(d) Company shall continue to file when due all federal, state,
local, foreign and other tax returns, reports and declarations
required to be filed, and shall pay or make full and adequate
provision for the payment of all taxes and governmental charges
due or payable.
8.2 ACCESS FOR INVESTIGATION.
------------------------
Company shall afford Merger Subsidiary and its representatives access
during normal business hours to the properties and books and records
of Company in order that Merger Subsidiary shall have full opportunity
to investigate the business affairs of Company.
8.3 NOTICE.
------
(a) Promptly upon any party becoming aware of the occurrence of, or
the impending or threatened occurrence of, any event prior to the
Effective Time which would cause any of its representations or
warranties contained herein, or in any Schedule or Exhibit, to be
inaccurate, that party shall give detailed written notice thereof
to the other parties and, if it would constitute a breach of this
Agreement, shall use its best efforts to prevent or promptly
remedy the same.
18
(b) Each party shall refrain from knowingly taking, and shall use
commercially reasonable efforts to refrain from knowingly
suffering or permitting, any action which would render untrue any
of its representations or warranties contained herein.
9. CONDITIONS TO CLOSING - MERGER SUBSIDIARY AND PARENT.
----------------------------------------------------
9.1 CONDITIONS TO OBLIGATIONS OF MERGER SUBSIDIARY AND PARENT.
---------------------------------------------------------
The obligations of Merger Subsidiary and Parent to consummate the
transactions contemplated hereby at Closing shall be subject to the
satisfaction of the following conditions precedent, except to the
extent waived by Merger Subsidiary and Parent in writing:
(a) All of the representations and warranties of Company and
Shareholder contained in this Agreement shall be true and correct
in all material respects at and as of the Closing Date as though
such representations and warranties were made at and as of such
time; Company and Shareholder shall have performed and be in
compliance in all material respects with all of the covenants,
agreements, terms and provisions set forth herein on its part to
be observed or performed, and no event which would constitute a
breach of the terms of this Agreement on the part of Company or
Shareholder shall have occurred and be continuing at the Closing
Date.
(b) There shall not have occurred any material adverse change in the
financial condition, prospects, results of operations, assets,
liabilities or business of Company or the Partnership Interest
since the date of this Agreement, other than changes in the
ordinary course of business or affecting the cable television
industry in general.
(c) An executive officer of each of Company and Shareholder shall
have executed and delivered to Merger Subsidiary and Parent on
the Closing Date a Certificate, dated that date, in form and
substance reasonably satisfactory to Merger Subsidiary and Parent
to the effect that the conditions set forth in each of the
provisions of Section 9.1(a) and (b) of this Agreement have been
satisfied in full.
(d) Company and Shareholder shall have delivered to Merger Subsidiary
and Parent complete and correct copies of the corporate
resolutions authorizing the execution, delivery and performance
of this Agreement, the Company Transaction Documents, the
Shareholder Transaction Documents and the Merger and the
transactions contemplated hereby, certified to be valid and
effective.
19
(e) All documents and other items required to be delivered hereunder
to Merger Subsidiary and Parent at or prior to Closing shall have
been delivered or shall be tendered at the Closing.
(f) On the Closing Date, no suit or action or other proceeding shall
be pending or threatened before any court or other governmental
agency against any of the parties hereto in which the
consummation of the transactions contemplated by this Agreement
are sought to be enjoined.
(g) All notification and report forms required to be filed on behalf
of the parties to this Agreement with the FTC and the DOJ under
the HSR Act and rules shall have been filed, and the waiting
period required to expire under the HSR Act and rules, including
any extension thereof, shall have expired or early termination of
the waiting period shall have been granted.
(h) All consents and approvals of governmental and regulatory
authorities and other persons and entities required to be
obtained with respect to the Merger and the other transactions
contemplated by this Agreement shall have been obtained.
10. CONDITIONS TO CLOSING - COMPANY AND SHAREHOLDER.
-----------------------------------------------
10.1 CONDITIONS TO OBLIGATIONS OF COMPANY AND SHAREHOLDER.
----------------------------------------------------
The obligations of Company and Shareholder to consummate the
transactions contemplated hereby at Closing shall be subject to the
satisfaction of the following conditions precedent, except to the
extent waived by Company and Shareholder in writing:
(a) All of the representations and warranties of Merger Subsidiary
and Parent contained in this Agreement shall be true and correct
in all material respects at and as of the Closing Date as though
such representations and warranties were made at and as of such
time, and Merger Subsidiary and Parent shall have performed and
be in compliance in all material respects with all of the
covenants, agreements, terms and provisions set forth herein on
its part to be observed and performed, and no event which would
constitute a breach of the terms of this Agreement on the part of
Merger Subsidiary or Parent shall have occurred and be continuing
at the Closing Date.
(b) There shall not have occurred any material adverse change in the
financial condition, prospects, results of operations, assets,
liabilities or business of Parent since the date of this
Agreement, other than changes in the ordinary course of business
or affecting the cable television industry in general.
20
(c) An executive officer of Merger Subsidiary and Parent shall have
executed and delivered to Company and Shareholder on the Closing
Date a Certificate, dated that date, in form and substance
reasonably satisfactory to Company and Shareholder to the effect
that the conditions set forth in each of the provisions of Section
10.1(a) and (b) of this Agreement have been satisfied in full.
(d) Merger Subsidiary and Parent shall have delivered to Company and
Shareholder complete and correct copies of the corporate
resolutions of Merger Subsidiary and Parent authorizing the
execution, delivery and performance of this Agreement, the Merger
Subsidiary Transaction Documents, the Parent Transaction
Documents, the Merger and the transactions contemplated hereby,
certified to be valid and effective.
(e) On the Closing Date, no suit or action or other proceeding shall
be pending or threatened before any court or other governmental
agency against any of the parties hereto in which the consummation
of the transactions contemplated by this Agreement are sought to
be enjoined.
(f) All notification and report forms required to be filed on behalf
of the parties to this Agreement with the FTC and the DOJ under
the HSR Act and rules thereunder shall have been filed, and the
waiting period required to expire under the HSR Act and rules
thereunder, including any extension thereof, shall have expired or
early termination of the waiting period shall have been granted.
(g) All documents and other items required to be delivered hereunder
to Company and Shareholder at or prior to Closing shall have been
delivered or shall be tendered at the Closing.
(h) All consents and approvals of governmental and regulatory
authorities and other persons and entities required to be obtained
with respect to the Merger and the other transactions contemplated
by this Agreement shall have been obtained.
11. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION.
-----------------------------------------------------------
11.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
------------------------------------------
All representations, warranties, covenants, stipulations,
certifications, indemnities and agreements contained herein or in any
document delivered pursuant hereto shall survive the consummation of
the transactions provided for in this Agreement; provided that the
representations and warranties contained in this Agreement shall
expire and be extinguished three years after the Closing Date,
21
except for representations and warranties relating to (i) title and
ownership, which shall survive forever, and (ii) tax matters, which
shall survive until the expiration of the statute of limitations with
respect to liabilities related thereto, and Shareholder's and Merger
Subsidiary's and Parent's rights to make claims based thereon shall
likewise expire and be extinguished on such dates, except that any
claim made by any of them prior to such dates in accordance with this
Agreement shall survive such expiration. Notwithstanding the
foregoing, the representations and warranties made by Merger
Subsidiary and Parent contained in this Agreement shall expire and be
extinguished on the date on which Shareholder shall have disposed of
all of the Parent Common Stock which it receives in connection with
the Merger, and Shareholder's rights to make claims based thereon
shall likewise expire and be extinguished on such date, except that
any claim made by Shareholder prior to such date in accordance with
this Agreement shall survive such expiration.
11.2 INDEMNIFICATION.
---------------
(a) Shareholder shall defend, indemnify and hold Merger Subsidiary and
Parent harmless from and against any and all claims, liabilities,
damages, losses, deficiencies and expenses (including reasonable
attorneys' fees and expenses and costs of suit, including, but not
limited to, travel expenses and discovery costs for such matters
as transcripts, photocopying, subpoenas and telecopies)
(individually, a "Loss" and collectively, "Losses") arising out of
any and all inaccurate representations and warranties, and out of
any and all breaches of covenants, agreements and certifications,
made by or on behalf of Company and Shareholder in this Agreement
or in any document delivered hereunder and any and all liabilities
of Company (except those imposed pursuant to the Partnership
Agreement) that are not disclosed to Merger Subsidiary in this
Agreement.
(b) Parent shall defend, indemnify and hold Shareholder harmless from
and against any and all Losses arising out of (i) any and all
inaccurate representations and warranties, and out of any and all
breaches of covenants, warranties, stipulations, agreements and
certifications made by or on behalf of Merger Subsidiary or Parent
in this Agreement or in any document delivered by Merger
Subsidiary or Parent hereunder; and (ii) all debts, liabilities or
claims arising out of the business activities of Company
subsequent to the Effective Time.
11.3 INDEMNIFICATION WITH RESPECT TO THIRD-PARTY CLAIMS.
--------------------------------------------------
(a) As used herein, a "Third-Party Claim" means a Loss or potential
Loss for which indemnification is claimed by Merger Subsidiary or
Parent or Shareholder (the "Indemnitee") under the provisions of
this Article 11 and which is consequent to a claim against the
Indemnitee by a person,
22
corporation, association, partnership or other entity, or an
individual, or a government, any political subdivision thereof or
a governmental agency by commencement against the Indemnitee of a
legal action or proceeding or receipt by the Indemnitee of an
assertion of a claim for which indemnification is provided
pursuant to this Article 11 by Merger Subsidiary and Parent or
Shareholder, as the case may be (the "Indemnitor").
(b) The Indemnitee will give notice of a Third-Party Claim to the
Indemnitor, stating the nature thereof and enclosing copies of any
complaint, summons, written assertion of such Third-Party Claim or
similar document. No claim for indemnification on account of a
Third-Party Claim shall be made and no indemnification therefor
shall be available under this Article 11 until the Indemnitee
shall have given initial written notice of its claim to the
Indemnitor.
(c) Except as hereinafter provided (including, but not limited to,
Section 11.3(d)(ii) hereof), the Indemnitor shall engage counsel
to defend a Third-Party Claim, and shall provide notice to the
Indemnitee not later than 15 business days following delivery by
the Indemnitee to the Indemnitor of a notice of a Third-Party
Claim, such notice to include an acknowledgment by the Indemnitor
that it will be liable in full to the Indemnitee for any Losses in
connection with such Third-Party Claim. The Indemnitee will fully
cooperate with such counsel. The Indemnitor will cause such
counsel to consult with the Indemnitee as appropriate as to the
defense of such claim, and the Indemnitee may, at its own expense,
participate in such defense, assistance or enforcement, but except
as provided in (d) the Indemnitor shall control such defense,
assistance or enforcement. The Indemnitor will cause such counsel
engaged by the Indemnitor to keep the Indemnitee informed at all
times of the status of such defense, assistance or enforcement.
(d) (i) Notwithstanding the provisions of Section 11.3(c), the
Indemnitee shall have the right to engage counsel and to
control the defense of a Third-Party Claim if the Indemnitor
shall not have notified the Indemnitee of its appointment of
counsel and control of the defense of a Third-Party Claim
pursuant to Section 11.3(c) within the time period therein
provided.
(ii) Notwithstanding the engagement of counsel by the Indemnitor,
the Indemnitee shall have the right, at its own expense, to
engage counsel to participate jointly with the Indemnitor in,
and to control jointly with the Indemnitor, the defense of a
Third-Party Claim if (x) the Third-Party Claim involves
remedies other than monetary damages and such remedies, in
the Indemnitee's reasonable
23
judgment, could have an ongoing effect on the conduct of
the Indemnitee's business, or (y) the Third-Party Claim
relates to acts, omissions, conditions, events or other
matters occurring after the Closing Date as well as to
acts, omissions, conditions, events or other matters
occurring prior to the Closing Date.
(iii) If the Indemnitee chooses to exercise its right to appoint
counsel under this Section 11.3(d), the Indemnitee shall
deliver notice thereof to the Indemnitor setting forth in
reasonable detail why it believes that it has such right
and the name of the counsel it proposes to employ. The
Indemnitee may deliver such notice at any time that the
conditions to the exercise of such right appear to be
fulfilled, it being recognized that in the course of
litigation, the scope of litigation and the amount at stake
may change. The Indemnitee shall thereupon have the right
to appoint such counsel.
(iv) The reasonable fees and expenses of counsel and any
accountants, experts or consultants engaged by the
Indemnitee in accordance with the provisions of Section
11.3(d)(i) in connection with defending a Third-Party Claim
shall be paid by the Indemnitor in accordance with the
provisions of this Article 11. If the Indemnitee's
employment of counsel is for a Third-Party Claim of the
type described in subdivision (ii)(y) of this Section
11.3(d), then subject to the provisions of Section 11.3(e),
the amount of fees and expenses so payable by the
Indemnitor shall be that fraction of the aggregate of such
fees and expenses, the numerator of which is the portion of
the amount of any judgment on, or settlement of, such Third
Party Claim for which the Indemnitee is indemnified
pursuant to this Article 11 and the denominator of which is
the total amount of such judgment or settlement, but
provided further, if such defense of a Third-Party Claim is
----------------
successful (in the sense that as a consequence thereof,
there is no Loss (other than such fees and expenses) for
which the Indemnitee is indemnified pursuant to this
Article 11), the Indemnitee and the Indemnitor will attempt
in good faith to reach an agreement on the amount of such
fees and expenses so payable by the Indemnitor.
(e) (i) The Indemnitor may, without the Indemnitee's consent,
settle any Third-Party Claim solely involving monetary
damages only if the amount of such settlement is to be paid
entirely by the Indemnitor pursuant to this Article 11.
(ii) The Indemnitor will not enter into a settlement of a Third-
Party Claim which involves a non-monetary remedy against
the Indemnitee or which will not be paid entirely by the
Indemnitor
24
pursuant to this Article 11 without the written consent of
the Indemnitee (which consent shall not be unreasonably
withheld, delayed or conditioned).
(iii) The Indemnitee will not enter into a settlement of a Third-
Party Claim without the written consent of the Indemnitor,
which consent shall not be unreasonably withheld, under the
circumstances described in subdivision (i) of Section
11.3(d), if the Indemnitor has accepted all or any portion
of the liability for such Third-Party Claim. Otherwise, the
Indemnitee shall be free to compromise, defend and settle
Third-Party Claims without prejudice to any of its rights
hereunder or under applicable law.
(iv) As to any Third-Party Claim of the type described in
subsection (ii)(y) of Section 11.3(d), the Indemnitee and
the Indemnitor shall consult as to any proposed settlement.
If the Indemnitee notifies the Indemnitor that it wishes to
accept a proposed settlement and the Indemnitor is
unwilling to do so, if the amount for which the Third-Party
Claim is ultimately resolved is greater than the amount for
which the Indemnitee could have settled such claim, then
(x) the Indemnitee shall be liable only for the amount, if
any, which it would have paid had the Third-Party Claim
been settled as proposed by the Indemnitee, and (y) all
reasonable attorneys' fees and expenses and costs of suit
incurred by the Indemnitee subsequent to the time of the
proposed settlement shall be paid or reimbursed by the
Indemnitor.
(v) In determining whether to accept or reject any settlement
proposal, each party shall act in good faith.
(f) Notwithstanding the foregoing, in the event of any settlement of,
or final judgment with respect to, a Third-Party Claim which
relates to acts, omissions, conditions, events or other matters
occurring both before and after the Closing Date, the Indemnitee
and the Indemnitor shall negotiate in good faith as to the
portion of such Third-Party Claim as to which such
indemnification is payable.
(g) The Indemnitee and the Indemnitor shall cooperate with one
another in good faith in connection with the defense, compromise
or settlement of any claim or action. Without limiting the
generality of the foregoing, each party participating in the
defense or settlement of any matter shall take steps reasonably
designed to ensure that the other party and its counsel are
informed at all times of the status of such matter. Neither party
shall dispose of, compromise or settle any claim or action in a
manner that is not reasonable under the circumstances and in good
faith. The Indemnitor
25
and Indemnitee shall enter into such confidentiality and other
non-disclosure agreements as the Indemnitee or Indemnitor, as the
case may be, shall reasonably request in order to protect trade
secrets and other confidential or proprietary information of the
Indemnitee or Indemnitor, as the case may be.
12. TERMINATION.
-----------
12.1 TERMINATION BY MUTUAL AGREEMENT.
-------------------------------
This Agreement may be terminated prior to Closing (i) by mutual
agreement of Company and Shareholder, on the one hand and Merger
Subsidiary and Parent, on the other hand or (ii) under Section 12.4
hereof. In such event, this Agreement shall terminate and neither
Company and Shareholder, on the one hand nor Merger Subsidiary and
Parent, on the other hand shall have any further obligation or
liability to the other hereunder, except that Sections 14, 17.5, 17.6
and 17.7 of the Agreement shall survive and continue in full force and
effect notwithstanding such termination.
12.2 MERGER SUBSIDIARY'S OR PARENT'S DEFAULT.
---------------------------------------
In the event that the transactions contemplated by this Agreement are
not consummated on the Closing Date (if and as extended) due to Merger
Subsidiary's or Parent's failure or refusal to close, and all of the
conditions specified in Section 9 shall have been satisfied, Company
and Shareholder shall be entitled to pursue any and all of its
equitable and legal causes of action against Merger Subsidiary or
Parent, including an action for specific performance.
12.3 COMPANY'S OR SHAREHOLDER'S DEFAULT.
----------------------------------
In the event that the transactions contemplated by this Agreement are
not consummated on the Closing Date (if and as extended) due to
Company's or Shareholder's failure or refusal to close, and all of the
conditions specified in Section 10 shall have been satisfied, Merger
Subsidiary and Parent shall be entitled to pursue any and all of its
equitable and legal causes of action against Company or Shareholder,
including an action for specific performance.
12.4 TERMINATION BY COMPANY OR MERGER SUBSIDIARY.
-------------------------------------------
This Agreement may be terminated by Company or Merger Subsidiary at
any time after December 31, 1998 (the "Termination Date") in the event
that any condition set forth in Sections 9 or 10 hereof has not been
satisfied or tendered by the party owing performance or waived by the
party for whose benefit the condition is intended, and upon such
termination, neither Company and Shareholder, on the one hand, nor
Merger Subsidiary and Parent, on the other
26
hand, shall have any further obligation or liability to the other
hereunder, except that Sections 14, 17.5, 17.6 and 17.7 of this
Agreement shall survive and continue in full force and effect
notwithstanding such termination.
13. NOTICE.
------
All notices and other communications hereunder shall be in writing and
delivered by one of the following methods of delivery: (i) personally,
(ii) by registered or certified mail, return receipt requested, postage
prepaid, (iii) by overnight courier, or (iv) by legible, confirmed
facsimile transmission, in all cases addressed as follows:
To Parent or Merger Subsidiary:
Adelphia Communications Corporation
Main at Xxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
Attn: Xxxxx X. Xxxx
Telecopy: (000) 000-0000
With a copy to:
Xxxxxxxx Ingersoll Professional Corporation
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxxx, XX 00000
Attn: Xxxxx X. Xxxxxx
Telecopy: (000) 000-0000
and
Adelphia Communications Corporation
Main at Xxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
Attn: Xxxxx Xxxxxx
Telecopy: (000) 000-0000
27
To Company or Shareholder:
TCI Development Corporation
Terrace Tower Two
0000 XXX Xxxxxxx
Xxxxxxxxx, XX 00000
Attn: Xxxxxxx Xxxxxxxxxx
Telecopy: (000) 000-0000
With a copy to:
Xxxxxxx & Xxxxxx L.L.C.
000 Xxxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, XX 00000
Attn: Xxxxx Xxxxxx
Telecopy: (000) 000-0000
or to such address as such party may indicate by a notice delivered to the
other parties hereto. Notice shall be deemed received the same day (when
delivered personally), five (5) days after mailing (when sent by registered
or certified mail) or the next business day (when sent by facsimile
transmission or when delivered by overnight courier). Any party to this
Agreement may change its address to which all communications and notices
may be sent hereunder by addressing notices of such change in the manner
provided.
14. BROKERAGE COMMISSION.
--------------------
Each party represents and warrants that all negotiations relative to this
Agreement and the transactions contemplated hereby have been carried on by
each without intervention of any person other than legal counsel. Company
and Shareholder, on one hand, and Merger Subsidiary and Parent, on the
other, each indemnifies the other and shall hold it harmless against and in
respect of any claim against the other for brokerage or other commissions
relative to this Agreement and the transactions contemplated hereby.
15. LAWS GOVERNING.
--------------
The construction, interpretation and enforcement of this Agreement and the
rights of the parties hereunder shall be governed by the laws of the State
of Delaware without regard to any jurisdiction's conflicts of law
provisions.
28
16. OTHER COVENANTS.
---------------
16.1 TAX RETURNS.
-----------
(a) Shareholder will be responsible for the preparation and filing of
all tax returns of Company for all periods ending on or before the
Closing Date. The federal income, deductions and credits with
respect to Company on such returns will be computed consistent
with past practices, principles and methods. Prior to filing any
such return for a taxable period ending on or before the Closing
Date, Shareholder will submit such returns (if the return is a
separate return of Company or if such return is a consolidated
return, information regarding the reporting of income, deductions
and credits with respect to Company shall be provided to
Shareholder rather than the consolidated return) to Merger
Subsidiary for its review, provided that Merger Subsidiary's
approval of such returns or information will not be required.
(b) Surviving Corporation will prepare or cause to be prepared and
file or cause to be filed any tax returns of Company for tax
periods which begin before the Closing Date and end after the
Closing Date. Prior to filing any such return, Surviving
Corporation shall submit such return to Shareholder for its
review, provided that Shareholder's approval of such return will
not be required. Shareholder will pay to Surviving Corporation
within fifteen days after the date on which taxes are paid (e.g.
the original due date of the return) with respect to such periods
an amount equal to the portion of such taxes which relate to the
portion of such taxable period ending on the Effective Time based
on the closing of the books of Company at the Effective Time.
(c) If any dispute arises regarding the amount of taxes payable by
Shareholder, the parties shall engage Price Waterhouse Coopers
(the "Independent Accountant") to resolve the dispute and shall
direct the Independent Accountant in the terms of the engagement
that the dispute is required to be resolved within thirty (30)
days after such engagement. The Independent Accountant's
determination shall be final and binding on the parties. All fees
and costs of the Independent Accountant shall be borne pro rata by
Shareholder and Surviving Corporation in proportion to the
difference between the Independent Accountant's determination of
the correct amount of taxes payable by Shareholder and each of
Surviving Corporation's and Shareholder's determination of such
amount. Pending the Independent Accountant's resolution of any
dispute submitted to it pursuant to this Section 16.1(c),
Shareholder shall pay to Surviving Corporation the amount of taxes
that Shareholder believes it is required to pay. Shareholder shall
pay to Surviving Corporation any additional taxes determined by
the Independent Accountant to be payable by it within 30
29
days after the Independent Accountant delivers to Shareholder and
Surviving Corporation a written report detailing its determination
and the basis therefor. The tax returns filed by Surviving
Corporation prior to the Independent Accountant's resolution of
the dispute shall be amended by the Surviving Corporation as
necessary to reflect the Independent Accountant's determination.
(d) Shareholder, Parent and Surviving Corporation shall cooperate
fully, to the extent reasonably requested by the other party, in
connection with the filing of tax returns pursuant to this Section
and any audit, litigation or proceeding with respect thereto.
16.2 TAX FREE REORGANIZATION.
-----------------------
Merger Subsidiary, Parent, Company and Shareholder intend that the
transactions contemplated by this Agreement constitute a tax-free
reorganization within the meaning of Section 368(a) of the Code and
will file all tax returns in a manner consistent therewith. Neither
Parent nor Merger Subsidiary shall take or cause to be taken any
action that would disqualify the Merger as a "reorganization" within
the meaning of Section 368(a) of the Code.
16.3 INDEMNIFICATION OF EXECUTIVES.
-----------------------------
(a) To the maximum extent permitted by the DGCL, Parent will cause the
Surviving Corporation to indemnify, defend and hold harmless each
person who, at any time prior to the Effective Time, is an officer
or director of Company (each, an "Executive") against all losses,
expenses, damages, liabilities, costs, judgments and amounts paid
in settlement of any claim, action, suit, proceeding or
investigation based in whole or in part on such person's service
as such and to advance amounts needed to cover the expenses
incurred by any Executive in connection therewith in advance of
final disposition upon the receipt of a written undertaking by the
Executive to repay the amounts so advanced if it is ultimately
determined that the Executive is not entitled to such
indemnification under the DGCL. Without limiting the foregoing, in
any case in which approval of or a determination by the Surviving
Corporation is required to effect any indemnification, (i) the
Executive will conclusively be deemed to have met the applicable
standards for indemnification in connection with the transactions
contemplated by this Agreement and (ii) Parent will cause the
Surviving Corporation, at the election of the Executive, to direct
that the determination of any such approval will be made by
independent counsel selected by the Executive and reasonably
acceptable to Parent.
(b) If the Surviving Corporation or any of its successors or assigns
merges, consolidates or otherwise combines with any other entity
and is not the continuing or surviving entity, or the Surviving
Corporation transfers all
30
or substantially all of its assets to any person or entity, it
will make proper provision so that such successor assumes the
obligations set forth in this Section 16.3.
17. MISCELLANEOUS.
-------------
17.1 COUNTERPARTS; TELECOPY.
----------------------
This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original, but all of which when taken
together shall constitute one and the same instrument. Delivery of
executed signature pages hereof by facsimile transmission shall
constitute effective and binding execution and delivery hereof.
17.2 ASSIGNMENT.
----------
This Agreement may not be assigned by any party hereto without the
prior written consent of the other parties; provided, however, that
Merger Subsidiary may assign this Agreement to another wholly owned
subsidiary of Parent if such assignment would not result in a breach
of this Agreement, without the prior written consent of the other
parties.
17.3 ENTIRE AGREEMENT.
----------------
This Agreement is an integrated document, contains the entire
agreement between the parties, and wholly cancels, terminates and
supersedes any and all previous and/or contemporaneous oral
agreements, negotiations, commitments and writings between the parties
hereto with respect to such subject matter. No change, modification,
termination, notice of termination, discharge or abandonment of this
Agreement or any of the provisions hereof, nor any representation,
promise or condition relating to this Agreement, shall be binding upon
the parties hereto unless made in writing and signed by the parties
hereto, except that termination or notices of termination which may be
effected pursuant to the terms of this Agreement by either party to
the Agreement shall be binding if made in writing and signed by the
applicable party.
17.4 INTERPRETATION.
--------------
Article titles and headings to Sections herein are inserted for
convenience of reference only and are not intended to be a part of or
to affect the meaning or interpretation of any of the provisions of
this Agreement. All references to Sections, subsections, Schedules or
Exhibits contained in this Agreement are references to the Sections
and subsections of this Agreement and the Schedules or Exhibits
described on the list immediately following the signature page hereto
and attached hereto. All references to the word "including" shall
have the meaning
31
represented by the phrase "including without limitation." As used
herein, the phrase "after due inquiry" is limited to inquiry within
the organization of the particular party, as the case may be.
17.5 EXPENSES.
--------
Except as otherwise expressly provided herein, each party will pay all
costs and expenses, including any and all legal and accounting fees,
of its performance and compliance with all agreements and conditions
contained herein on its part to be performed or complied with. Any
HSR Act filing fee will be shared equally by Company and Merger
Subsidiary.
17.6 CONFIDENTIALITY.
---------------
Any and all information obtained by Merger Subsidiary or Parent from
Company in connection with the transactions contemplated by this
Agreement which is confidential in nature (collectively, the
"Evaluation Material") shall be kept strictly confidential by Merger
Subsidiary and Parent prior to the Closing Date; provided, however,
that any Evaluation Material may be disclosed to agents, employees,
officers, directors, investors, advisors and other representatives of
Merger Subsidiary who need to know such Evaluation Material (it being
agreed that such representatives shall be informed by Merger
Subsidiary of the confidential nature of such Evaluation Material and
shall be directed to deal with such Evaluation Material
confidentially) and, further, may be disclosed to the extent required
by law, including applicable securities laws, or by written or oral
question or request for information or documents in legal proceedings,
interrogatories, subpoenas, civil investigative demands or similar
processes. For purposes of this Agreement, the term "Evaluation
Material" does not include information which (i) becomes generally
available to the public other than as a result of disclosure by Merger
Subsidiary or Parent or any Merger Subsidiary or Parent representative
in violation of the terms hereof, (ii) was available on a non-
confidential basis prior to disclosure to Merger Subsidiary or Parent
by Company or any of their directors or any of its directors,
officers, employees, agents or representatives, or (iii) becomes
available to Merger Subsidiary or Parent on a nonconfidential basis
from a source which is not bound by a confidentiality agreement with
Company.
17.7 PUBLIC ANNOUNCEMENTS.
--------------------
Neither Merger Subsidiary or Parent, on the one hand, nor Company or
Shareholder, on the other hand, shall, without the approval of the
other party (which may not be unreasonably withheld), make any press
release or other public announcement concerning the transactions
contemplated by this Agreement, except as and to the extent that such
party shall be so obligated by law (including any legal obligation
imposed on Parent in connection with its status as a publicly-held
corporation), in which case the other party shall be advised and the
parties
32
shall use their reasonable efforts to cause a mutually agreeable
release or announcement to be issued.
17.8 WAIVERS.
-------
Any term or provision of this Agreement may be waived, or the time
for its performance may be extended, by the party or parties entitled
to the benefit thereof, but any such waiver must be in writing. The
failure of any party hereto to enforce at any time any provision of
this Agreement shall not be construed to be a waiver of such
provision, nor in any way to affect the validity of this Agreement or
any part hereof or the right of any party thereafter to enforce each
and every such provision. No waiver of any breach of this Agreement
shall be held to constitute a waiver of any other or subsequent
breach.
17.9 PARTIAL INVALIDITY.
------------------
Wherever possible, each provision hereof shall be interpreted in such
a manner as to be effective and valid under applicable law, but in
case any one or more of the provisions contained herein shall, for
any reason, be held to be invalid, illegal or unenforceable in any
respect, such invalidity, illegality or unenforceability shall not
affect any other provisions of this Agreement, and this Agreement
shall be construed as if such invalid, illegal or unenforceable
provisions had never been contained herein, unless the deletion of
such provision or provisions would result in such a material change
as to cause the completion of the transactions contemplated hereby to
be unreasonable.
17.10 INCORPORATION BY REFERENCE.
--------------------------
Any and all Schedules, Exhibits, Recitals, statements, reports,
certificates or other documents or instruments referred to herein or
attached hereto are incorporated herein by reference thereto as
though fully set forth at the point referred to in this Agreement.
17.11 NO PRESUMPTION AGAINST THE DRAFTSMAN.
------------------------------------
Each party having been represented in the negotiation of this
Agreement, and having had ample opportunity to review the language
hereof, there shall be no presumption against any party on the ground
that such party was responsible for preparing this Agreement or any
part thereof.
17.12 FURTHER ASSURANCES.
------------------
Each party will execute such documents and take such further actions
after the Effective Time as may be reasonably necessary or reasonably
requested by another party to carry out the provisions of this
Agreement and evidence the Merger and the issuance of the Parent
Common Stock.
33
17.13 AMENDMENT.
---------
This Agreement may be amended by the parties with the approval of
their respective boards of directors at any time before or after
approval of this Agreement, if required, by the shareholders of the
parties and prior to the Effective Time, but after such approval no
amendment will be made that is adverse to such shareholders or
otherwise materially adversely affects the rights of such
shareholders without their further approval.
17.14 WAIVER OF JURY TRIAL.
--------------------
EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY THAT MAY
ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND
SOPHISTICATED ISSUES THAT WOULD BE DIFFICULT FOR A LAYPERSON TO
RESOLVE, AND THEREFORE IRREVOCABLY WAIVES ANY RIGHT SUCH PARTY MAY
HAVE TO A TRIAL BY JURY IN ANY LITIGATION ARISING OUT OF OR RELATING
TO THIS AGREEMENT OR THE MERGER. EACH PARTY MAKES THIS WAIVER
VOLUNTARILY AND HAS CONSIDERED ITS IMPLICATIONS WITH THE ADVICE OF
LEGAL COUNSEL. THE WAIVER OF THE RIGHT TO JURY TRIAL BY THE OTHER
PARTIES IS A MATERIAL CONSIDERATION FOR SUCH PARTY IN ENTERING INTO
THIS AGREEMENT.
34
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized corporate officers on the day and year first
above written.
ADELPHIA COMMUNICATIONS CORPORATION
By: /s/ Xxxxxxx X. Xxxxx
------------------------------
Name: Xxxxxxx X. Xxxxx
--------------------------
Title: Executive Vice President
-------------------------
SHHH ACQUISITION CORPORATION
By: /s/ Xxxxxxx X. Xxxxx
------------------------------
Name: Xxxxxxx X. Xxxxx
--------------------------
Title: Executive Vice President
-------------------------
TCID-SVHH, INC.
By: /s/ Xxxxxxx Xxxxxxxxxx
------------------------------
Name: Xxxxxxx Xxxxxxxxxx
---------------------------
Title:__________________________
TCI DEVELOPMENT CORPORATION
By: /s/ Xxxxxxx Xxxxxxxxxx
------------------------------
Name: Xxxxxxx Xxxxxxxxxx
---------------------------
Title:__________________________
35
EXHIBIT 3.2(C)
ADELPHIA COMMUNICATIONS CORPORATION
REGISTRATION RIGHTS AGREEMENT
THIS AGREEMENT, made as of the ______________ day of ___________________,
1998, by and among TCI DEVELOPMENT CORPORATION, a Colorado corporation ("TCI"),
and ADELPHIA COMMUNICATIONS CORPORATION, a Delaware corporation (the "Company").
WHEREAS, TCI has acquired a number of shares of the Class A Common Stock of
the Company, par value $.01 (the "Common Stock") pursuant to that certain
Agreement and Plan of Merger by and among TCID-SVHH, Inc., SHHH Acquisition
Corp., TCI and the Company, dated August 31, 1998 (the "Merger Agreement"); and
WHEREAS, TCI and the Company have reached the agreements set forth herein
and desire to provide that the Registrable Securities (as defined herein) shall
be held by TCI subject to the rights described herein.
NOW, therefore, in consideration of the mutual promises and covenants
contained herein and intending to be legally bound hereby, the parties hereto
agree as follows:
1. Definitions. For purposes of this Agreement:
-----------
(a) The term "Act" means the Securities Act of 1933, as amended, or
any other statute in effect from time to time corresponding to such act.
(b) The term "Commission" means the Securities and Exchange
Commission, or any successor agency thereto.
(c) The terms "register," "registered," and "registration" refer to a
registration effected by preparing and filing a registration statement in
compliance with the Act and the declaration or ordering of effectiveness of such
registration statement.
(d) The term "Registrable Securities" means (i) the shares of Common
Stock issued to TCI pursuant to the Merger Agreement and held by the Holders (as
herein defined) and (ii) any securities of the Company issued as a dividend or
other distribution with respect to, or in exchange for or in replacement of,
such Common Stock. Registrable Securities, if transferred pursuant to an
exemption from registration under the Act, will no longer be Registrable
Securities except to the extent they shall be held by a Holder.
(e) The term "Holder" or "Holders" means (i) TCI and (ii) any other
person or entity holding Registrable Securities to whom these registration
rights have been transferred in accordance with Section 9 of this Agreement.
2. Request for Registration.
---------------------------
(a) If, at any time after the first anniversary of the date of this
Agreement, the Company shall receive a written request (specifying that it is
being made pursuant to this Section 2) from the Holders that the Company file a
registration statement or similar document under the Act covering Registrable
Securities held by such Holders (a "Registration Statement"), then the Company
shall promptly use its best efforts to file a Registration Statement and to
effect such registration of all Registrable Securities that Holders have
requested be so registered to be registered under the Act. The Company shall be
obligated to effect only two registrations pursuant to this Agreement, and shall
not be obligated to effect a registration to the extent that the Holders may
sell all their Registrable Securities without being subject to a holding period
or volume limitations and without such Holders being required to deliver a
prospectus in connection therewith under the Act.
(b) Notwithstanding the foregoing, in the event that prior to the
first anniversary of the date hereof TCI is required to dispose of Registrable
Securities in order to decrease the ownership interests attributed to TCI and
its affiliates so that TCI and its affiliates would not be deemed to have an
"attributable interest" in the Company under the horizontal attribution rules of
the Federal Communications Commission, TCI may request the Company to file a
Registration Statement prior to the first anniversary of the date of this
Agreement without such registration counting towards the two demand
registrations permitted pursuant to Section 2(a) above, and the Company shall
promptly use its best efforts to do so and to effect the registration of such
Registrable Securities under the Act; provided, however, that to the extent any
such request pursuant to this Section 2(b) is delivered to the Company within 45
days prior to the first anniversary of this Agreement, such request shall be
deemed to count as one of the two demand registrations granted pursuant to
Section 2(a).
(c) The Company shall cause Registration Statements filed in
connection with a demand under Sections 2(a) or (b) to be effective continuously
for one hundred twenty (120) days from the date of initial effectiveness of the
Registration Statement (provided that such period shall be extended by the
length of time during which TCI is blocked from selling the Registrable
Securities pursuant to Sections 2(d) and 8 of this Agreement), or until the
earliest date upon which all Registrable Securities held by Holders either (i)
have been sold by them or (ii) may be sold by them without being subject to a
holding period or volume limitations and without such Holders being required to
deliver a prospectus in connection therewith under the Act.
(d) Notwithstanding the foregoing, the Company may request the
Holders not to (and upon such request the Holders hereby agree not to) make any
sales pursuant to an effective Registration Statement for up to two periods of
thirty (30) days, as the Company shall specify, provided that the Company shall
furnish to each such Holder a certificate signed by the President, the Chief
Executive Officer or a Vice President of the Company stating that, in the good
faith judgment of the Company, such registration and offering would materially
interfere
-2-
with or otherwise materially adversely affect any financing, acquisition,
corporate reorganization or other material transaction or development involving
the Company or any of its affiliates or require the Company to disclose matters
that otherwise would not be required to be disclosed at such time.
3. Obligations of the Company. Whenever required under Section 2 to use
--------------------------
its best efforts to effect the registration of any Registrable Securities, the
Company shall, as promptly as practicable:
(a) Prepare and file with the Commission a Registration Statement with
respect to such Registrable Securities and use its best efforts to cause such
registration statement to become and remain effective for the applicable periods
stated under Section 2. In connection therewith, the Company shall notify
Holders of the happening of any event during the period a Registration Statement
is effective which makes any statement made in such Registration Statement or
the related prospectus untrue in any material respect or which requires the
making of any changes in such Registration Statement or prospectus so that, as
of such date, the statements therein are not misleading and do not omit to state
a material fact required to be stated therein or necessary to make the
statements therein not misleading (which advice shall be accompanied by an
instruction to suspend the use of the prospectus until the requisite changes
have been made) and consistent with the Company's past practices, prepare a
supplement or post-effective amendment to a Registration Statement or the
related prospectus or any document incorporated therein by reference or file any
other required document so that, as thereafter delivered to the purchasers of
the Registrable Securities, such prospectus will not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading;
(b) Prepare and file with the Commission such amendments and
supplements to such Registration Statement and the prospectus used in connection
with such Registration Statement as may be necessary to keep the prospectus
current and comply with the provisions of the Act with respect to the
disposition of all securities covered by such registration statement;
(c) Notify the Holders, (i) when the Registration Statement becomes
effective, (ii) when the filing of a post-effective amendment to the
Registration Statement or supplement to the prospectus is required, when the
same is filed and, in the case of a post-effective amendment, when the same
becomes effective, (iii) of any request by the Commission for any amendment of
or supplement to the Registration Statement or any prospectus relating thereto
or for additional information, and (iv) of the entry of any stop order
suspending the effectiveness of the Registration Statement or of the initiation
of any proceedings for that purpose;
(d) Furnish to the Holders and deliver as directed by them a conformed
copy of the Registration Statement as declared effective by the Commission and
of each post-effective amendment thereto, such numbers of copies of a
prospectus, including a preliminary prospectus or supplement, in conformity with
the requirements of the Act, and such other documents as they
-3-
may reasonably request in order to facilitate the disposition of Registrable
Securities owned by them;
(e) Register and qualify the securities covered by the Registration
Statement under such other securities or Blue Sky laws of such jurisdictions as
shall be reasonably requested by the Holders, provided that the Company shall
not be required in connection therewith or as a condition thereto to qualify to
do business or to file a general consent to service of process in any such
states or jurisdictions; and
(f) Cause such Registrable Securities covered by the Registration
Statement to be listed on the principal exchange or exchanges or qualified for
trading on the principal over-the-counter market on which the Registrable
Securities are then listed or traded upon the sale of such Registrable
Securities pursuant to the Registration Statement.
4. Furnish Information. It shall be a condition precedent to the
-------------------
obligations of the Company to take any action pursuant to this Agreement that
the Holders shall furnish to the Company such information regarding them, the
Registrable Securities held by them, and the intended method of disposition of
such securities as the Company shall reasonably request and as shall be required
in connection with the action to be taken by the Company. In addition, the
Holders agree to promptly provide the Company written notice of sales of
Registrable Securities (including share amounts) upon request by the Company in
writing.
5. Expenses of Registration. All expenses incurred in connection with a
------------------------
Registration Statement pursuant to Section 2 (excluding underwriters' discounts
and commissions), including without limitation all registration and
qualification fees, printers' and accounting fees, fees and disbursements of
counsel for the Company, but not including fees and disbursements of counsel,
consultants or other advisors for the selling Holders, shall be borne by the
Company.
6. Indemnification and Contribution. In the event any Registrable
--------------------------------
Securities are included in a registration statement under this Agreement:
(a) To the extent not prohibited by law the Company will indemnify and
hold harmless each Holder requesting or joining in a registration, any
underwriter (as defined in the Act) for it, and each person or entity, if any,
who controls such Holder or underwriter within the meaning of the Act or the
Securities Exchange Act of 1934 (the "1934 Act") against any losses, claims,
damages or liabilities, joint or several, to which they may become subject under
the Act, the 1934 Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based on any
untrue or alleged untrue statement of any material fact contained in such
Registration Statement, including any preliminary prospectus or final
prospectus, or any amendments or supplements thereto, or arise out of or are
based upon the omission or alleged omission to state therein a material fact
required to be stated therein, or necessary to make the statements therein not
misleading or arise out of any violation by the Company of any rule or
regulation promulgated under the Act or the 1934 Act applicable to the Company
and relating to action or inaction required of the Company in connection with
any such registration; and will reimburse each such Holder, such underwriter, or
such controlling person for any legal or other expenses reasonably incurred by
them in connection with investigating or
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defending any such loss, claim, damage, liability or action; provided, however,
that the indemnity agreement contained in this Section 7(a) shall not apply to
amounts paid in settlement of any such loss, claim, damage, liability or action
to the extent that it arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in connection with
such Registration Statement, preliminary prospectus, final prospectus, or
amendments or supplements thereto, in reliance upon and in conformity with
written information furnished expressly for use in connection with such
registration by any such Holder, underwriter or controlling person.
(b) To the extent not prohibited by law, each Holder requesting or
joining in a registration will severally and not jointly indemnify and hold
harmless the Company, each of its directors, each of its officers who have
signed the Registration Statement, and each person, if any, who controls the
Company (within the meaning of the Act or the 0000 Xxx) against any losses,
claims, damages or liabilities, joint or several, to which the Company or any
such director, officer, controlling person, agent or underwriter may become
subject, under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereto) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
such Registration Statement, including any preliminary prospectus or final
prospectus, or any amendments or supplements thereto, or arise out of or are
based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, in each case to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission was made
in such registration statement, preliminary or final prospectus, or amendments
or supplements thereto, in reliance upon and in conformity with written
information furnished by such Holder expressly for use in connection with such
registration; and each such Holder will reimburse any legal or other expenses
reasonably incurred by the Company or any such director, officer, controlling
person, agent or underwriter in connection with investigating or defending any
such loss, claim, damage, liability or action; provided, however, that the
indemnity agreement contained in this Section 7(b) shall not apply to amounts
paid in settlement of any such loss, claim, damage, liability or action if such
settlement is affected without the consent of such Holder (which consent shall
not be unreasonably withheld).
(c) Promptly after receipt by an indemnified party under this Section
of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against any indemnifying party under this
Section, notify the indemnifying party in writing of the commencement thereof
and (unless the interest of the indemnifying party conflicts with that of the
indemnified party) the indemnifying party shall have the right to participate at
its own expense in, and, to the extent the indemnifying party so desires,
jointly with any other indemnifying party similarly noticed, to assume the
defense thereof with counsel mutually satisfactory to the parties. The omission
so to notify the indemnifying party as provided herein will not relieve the
indemnifying party of any liability that he may have to any indemnified party
under this Section, except to the extent such failure to notify an indemnifying
party actually prejudices his ability to defend such action.
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(d) In order to provide for just and equitable contribution to joint
liability under the Act in any case in which either (i) any party entitled to
indemnification under this Agreement makes a claim for indemnification pursuant
to this Section 7 but it is judicially determined (by the entry of a final
judgment or decree by a court of competent jurisdiction and the expiration of
time to appeal or the denial of the last right of appeal) that such
indemnification cannot be enforced in such case notwithstanding the fact that
this Section 7 provides for indemnification in such case, or (ii) contribution
under the Act may be required on the part of any party in circumstances for
which indemnification is provided under this Section 7; then, and in each such
case, the indemnifying party, in lieu of indemnifying such indemnified party
hereunder, shall contribute to the amount paid or payable by such indemnified
party as a result of such loss, liability, claim, damage, or expense in such
proportion as is appropriate to reflect the relative fault of the indemnifying
party on the one hand and the indemnified party on the other in connection with
statements or omissions that resulted in such loss, liability, claim, damage or
expense as well as any other relevant equitable considerations. The relative
fault of the indemnifying party and of the indemnified party shall be determined
by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied (or omitted to be supplied) by the
indemnifying party or the indemnified party and the parties' relative intent,
knowledge, access to information, and opportunity to correct or prevent such
statement or omission; provided, however, that, in any such case, (A) no such
Holder will be required to contribute any amount in excess of the net proceeds
of all such Registrable Securities sold by it pursuant to such registration
statement; and (B) no person or entity guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) will be entitled to
contribution from any person or entity who was not guilty of such fraudulent
misrepresentation.
7. Reports Under Securities Exchange Act of 1934. The Company agrees to
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use its best efforts to make and keep public information available, as those
terms are understood and defined in Rule 144, at all times from the date on
which sales may first be made by the Holders under Rule 144 so long as the
Holders shall hold Registrable Securities.
8. Lockup Agreement. In consideration for the Company agreeing to its
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obligations under this Agreement, in the event that each of the directors and
executive officers of the Company, Xxxx X. Xxxxx and the members of the
immediate family of Xxxx X. Xxxxx execute an agreement not to sell, make any
short sale of, loan, grant any option for the purchase of or otherwise dispose
of any Common Stock of the Company of which they are the beneficial owners
(other than (a) those included in the registration and (b) sale transactions not
involving a public offering, provided that the transferee of such person as a
condition thereto and in connection therewith, agrees to be bound by such
restriction), without the prior written consent of the Company or such
underwriters, as the case may be, for such period of time not to exceed 120 days
from the effective date of such registration as the Company or the underwriters
may specify, each Holder shall agree in connection with any registration of the
Company's securities for sale by the Company to the general public, upon the
request of the Company or the underwriters managing any underwritten offering of
the Company's securities, on the same terms not to sell, make any short sale of,
loan, grant any option for the purchase of, or otherwise dispose of any
Registrable Securities (other than (a) those included in the registration and
(b) sale
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transactions not involving a public offering, provided that the transferee of
such Holder as a condition thereto and in connection therewith, agrees to be
bound by and joins into this Section 8), without the prior written consent of
the Company or such underwriters, as the case may be, for such period of time
not to exceed 120 days from the effective date of such registration as the
Company or the underwriters may specify; provided, however, that such
restrictions on sales by Holders shall not apply if a request for registration
has been made by Holders prior to the receipt of a notice from the Company or
its underwriters under this Section 8. During any period that sales of
Registrable Securities by the Holder are restricted under this Section, at the
Holder's request, the Company will give written notice to the Holder as soon as
the restrictions on sale terminate. The Company hereby agrees to give Holder
among other things written notice of the filing of a registration statement for
a proposed underwritten offering to which the restrictions in this Section 8
could apply if so requested.
9. Transfer of Registration Rights. The registration rights of the
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Holders under Section 2 may be not transferred except to a wholly-owned
subsidiary of Tele-Communications, Inc. ("TCI Parent") or any successor to TCI
Parent by merger, consolidation or otherwise, provided that any such transferee
agrees in writing to be bound by the terms of and joins in this Agreement as a
Holder in all respects hereunder. The Company shall be given written notice by
the Holder at the time of such transfer stating the name and address of the
transferee and identifying the securities with respect to which the rights under
this Agreement are being assigned. This Agreement shall inure to the benefit of
and be binding on the successors and assigns of the Company, and of the Holders
hereto which successors and assigns are permitted to become Holders under this
Section 9.
10. No Piggyback Registrations. The Company hereby covenants and agrees
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with TCI that it will not permit any holder or prospective holder of its
securities to register such securities on any Registration Statement filed
pursuant to this Agreement.
11. Entire Agreement. This Agreement and the documents referred to herein
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constitute the entire agreement among the parties with respect to the subject
matter hereof and supersedes all prior agreements and negotiations relating
thereto.
12. Governing Law. This Agreement, together with the rights and
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obligations of the parties hereunder shall be governed by and construed and
enforced in accordance with the laws of the State of Delaware without regard to
any jurisdiction's conflicts of laws provisions.
13. Counterparts. This Agreement may be executed in two or more
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counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
14. Titles and Subtitles. The titles and subtitles used in this Agreement
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are for convenience only and are not to be considered in construing or
interpreting this Agreement.
15. Notices. Any notice, request or other communication required or
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permitted under this Agreement shall be given in writing and shall be deemed to
be effectively given upon
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(i) personal delivery, (ii) delivery by U.S. Express Mail or other overnight
courier service which provides evidence of delivery, (iii) facsimile
transmission confirmed through an electronic confirmation report received at the
sending machine, or (iv) the expiration of three (3) days following deposit with
the United States Postal Service, by registered or certified mail, postage
prepaid, addressed, in each case, as follows:
If to the Company:
Adelphia Communications Corporation
Attn: Xxxxxxx X. Xxxxx
Main at Xxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to:
Xxxxx Xxxxxx, Esq.
Adelphia Communications Corporation
Main at Xxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
and an additional copy to:
Xxxxxxxx Xxxxxxxxx Professional Corporation
One Oxford Centre
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Attn: Xxxxx X. Xxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to TCI:
TCI Development Corporation
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Terrace Tower Two
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0000 XXX Xxxxxxx
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Xxxxxxxxx, XX 00000
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Attn: Xxxxxxx Xxxxxxxxxx
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Telecopy: (000) 000-0000
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With a copy to:
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Xxxxxxx & Xxxxxx L.L.C.
-----------------------
000 Xxxxxxxxxxx Xxxxxx, Xxxxx 0000
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Xxxxxx, XX 00000
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Attn: Xxxxx Xxxxxx
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Telecopy: (000) 000-0000
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or at such other address as any party may designate by ten (10) days advance
written notice to the other party in accordance with the provisions of this
Paragraph.
16. Amendments. This Agreement may not be amended without the written
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consent of the Company and the Holders of at least a majority in interest of the
then outstanding Registrable Securities held by all Holders.
[remainder of page intentionally left blank]
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IN WITNESS WHEREOF, the undersigned have caused this Agreement to be
executed by a duly authorized representative as of the day first above written.
COMPANY:
ADELPHIA COMMUNICATIONS CORPORATION
By: /s/ Xxxxxxx X. Xxxxx
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Name: Xxxxxxx X. Xxxxx
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Title: Executive Vice President
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TCI:
TCI DEVELOPMENT CORPORATION
By: /s/ Xxxxxxx Xxxxxxxxxx
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Name: Xxxxxxx Xxxxxxxxxx
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Title:__________________________
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SCHEDULE 4.6
1. Federal income tax audits for the years 1987 through and including 1995 are
pending.
2. Company has waived the statute of limitations as to federal income tax
returns for the years 1987 through and including 1994.
