\n THE MERGER…………………………………………………………………………………….4<\/p>\n Section 1.01 The Merger………………………………………………………………………..4
\n Section 1.02 Conversion of Shares……………………………………………………………….5
\n Section 1.03 Merger Consideration……………………………………………………………….5
\n Section 1.04 Letter of Transmittal………………………………………………………………6
\n Section 1.05 Deposit of Merger Consideration……………………………………………………..6
\n Section 1.06 Surrender and Payment………………………………………………………………6
\n Section 1.07 Adjustments……………………………………………………………………….7
\n Section 1.08 Fractional Shares………………………………………………………………….7
\n Section 1.09 Withholding of Tax…………………………………………………………………7
\n Section 1.10 Lost Certificates………………………………………………………………….8
\n Section 1.11 Stock Transfer Books……………………………………………………………….8
\n Section 1.12 Shareholder Approval……………………………………………………………….8
\n Section 1.13 Stock Options and Restricted Stock…………………………………………………..8<\/p>\n
ARTICLE II
\n THE SURVIVING CORPORATION……………………………………………………………………….9<\/p>\n
Section 2.01 Certificate of Incorporation………………………………………………………..9
\n Section 2.02 Bylaws 9…………………………………………………………………………9
\n Section 2.03 Directors…………………………………………………………………………9
\n Section 2.04 Officers…………………………………………………………………………10
\n Section 2.05 Name…………………………………………………………………………….10<\/p>\n
ARTICLE III
\n REPRESENTATIONS AND WARRANTIES OF THE COMPANY……………………………………………………10<\/p>\n
Section 3.01 Corporate Existence and Power………………………………………………………10
\n Section 3.02 Corporate Authorization……………………………………………………………10
\n Section 3.03 Governmental Authorization…………………………………………………………11
\n Section 3.04 Non-contravention…………………………………………………………………11
\n Section 3.05 Capitalization……………………………………………………………………12
\n Section 3.06 Significant Subsidiaries…………………………………………………………..13
\n Section 3.07 SEC Filings………………………………………………………………………13
\n Section 3.08 Financial Statements………………………………………………………………13
\n Section 3.09 Disclosure Documents………………………………………………………………14
\n Section 3.10 Absence of Certain Changes or Events………………………………………………..14
\n Section 3.11 Litigation……………………………………………………………………….15
\n Section 3.12 Taxes 15
\n Section 3.13 Employee Benefit Plans…………………………………………………………….15<\/p>\n
Section 3.14 Brokers 17
\n Section 3.15 Compliance with Applicable Laws…………………………………………………….17
\n Section 3.16 Environmental Matters……………………………………………………………..17
\n Section 3.17 Opinion of Financial Advisor……………………………………………………….17
\n Section 3.18 No Other Representations…………………………………………………………..17<\/p>\n
ARTICLE IV
\n REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB……………………………………………17
\n Section 4.01 Corporate Existence and Power………………………………………………………18
\n Section 4.02 Corporate Authorization……………………………………………………………18
\n Section 4.03 Governmental Authorization…………………………………………………………18
\n Section 4.04 Non-contravention…………………………………………………………………19
\n Section 4.05 Capitalization……………………………………………………………………19
\n Section 4.06 Significant Subsidiaries…………………………………………………………..20
\n Section 4.07 SEC Filings………………………………………………………………………21
\n Section 4.08 Financial Statements………………………………………………………………21
\n Section 4.09 Disclosure Documents………………………………………………………………21
\n Section 4.10 Absence of Certain Changes or Events………………………………………………..22
\n Section 4.11 Litigation……………………………………………………………………….22
\n Section 4.12 Brokers 22
\n Section 4.13 Compliance with Applicable Laws…………………………………………………….22
\n Section 4.14 Interested Shareholder…………………………………………………………….23
\n Section 4.15 Ownership of Merger Sub; No Prior Activities…………………………………………23
\n Section 4.16 Opinion of Financial Advisor……………………………………………………….23
\n Section 4.17 No Other Representations…………………………………………………………..23<\/p>\n
ARTICLE V
\n COVENANTS OF THE COMPANY……………………………………………………………………….23<\/p>\n
Section 5.01 Conduct of the Company…………………………………………………………….23
\n Section 5.02 Other Transactions………………………………………………………………..25
\n Section 5.03. Affiliates………………………………………………………………………26<\/p>\n
ARTICLE VI
\n COVENANTS OF PARENT, MERGER SUB AND THE SURVIVING CORPORATION………………………………………24
\n Section 6.01 Indemnification; Directors’ and Officers’ Insurance…………………………………..26
\n Section 6.02 Employee Benefit Arrangements………………………………………………………27
\n Section 6.03 Listing, Registration……………………………………………………………..28<\/p>\n
Section 6.04 Conduct of Parent…………………………………………………………………28
\n Section 6.05. Obligations of Merger Sub…………………………………………………………28<\/p>\n
ARTICLE VII
\n COVENANTS OF PARENT, MERGER SUB AND THE COMPANY…………………………………………………..26
\n Section 7.01 Reasonable Best Efforts……………………………………………………………28
\n Section 7.02. Registration Statement……………………………………………………………28
\n Section 7.03 Company Shareholder Meeting………………………………………………………..29
\n Section 7.04 Consents…………………………………………………………………………29
\n Section 7.05 Public Announcements………………………………………………………………29
\n Section 7.06 Notification of Certain Matters…………………………………………………….29
\n Section 7.07 Antitrust Matters…………………………………………………………………30
\n Section 7.08 Access to Information……………………………………………………………..31
\n Section 7.09. Tax-free Reorganization…………………………………………………………..31
\n Section 7.10 Dissenting Shareholders…………………………………………………………….31
\n Section 7.11 Registration Rights………………………………………………………………..31
\n Section 7.12 Board of Directors…………………………………………………………………32
\n Section 7.13 Citizens Joint Venture……………………………………………………………..32<\/p>\n
ARTICLE VIII
\n CONDITIONS TO THE MERGER……………………………………………………………………….32<\/p>\n
Section 8.01 Conditions to the Obligations of Each Party………………………………………….32
\n Section 8.02 Conditions Precedent to the Obligations of Merger Sub…………………………………33
\n Section 8.03 Conditions Precedent to the Obligations of the Company………………………………..33<\/p>\n
ARTICLE IX
\n TERMINATION 34<\/p>\n
Section 9.01 Termination………………………………………………………………………34
\n Section 9.02 Effect of Termination……………………………………………………………..35
\n Section 9.03 Fees and Expenses…………………………………………………………………35<\/p>\n
ARTICLE X
\n MISCELLANEOUS 35<\/p>\n
Section 10.01 Notices…………………………………………………………………………35
\n Section 10.02 Survival of Representations, Warranties and Agreements……………………………….37
\n Section 10.03 Amendment……………………………………………………………………….37
\n Section 10.04 Extension; Waiver………………………………………………………………..37
\n Section 10.05 Successors and Assigns……………………………………………………………37
\n Section 10.06 Governing Law……………………………………………………………………37
\n Section 10.07 Jurisdiction…………………………………………………………………….37
\n Section 10.08 Counterparts; Effectiveness……………………………………………………….37
\n Section 10.09 Entire Agreement; No Third-party Beneficiaries………………………………………37
\n Section 10.10 Headings………………………………………………………………………..38
\n Section 10.11 Severability…………………………………………………………………….38
\n Section 10.12 Definitions……………………………………………………………………..38<\/p>\n
Exhibit A: Class B Voting Agreement
\nExhibit B: Rigas Class B Voting Agreement<\/p>\n
<\/c><\/s><\/caption>\n<\/table>\n
AGREEMENT AND PLAN OF MERGER<\/p>\n
THIS AGREEMENT AND PLAN OF MERGER (this “Agreement”) is dated
\nas of March 5, 1999 among Adelphia Communications Corporation, a Delaware
\ncorporation (“Parent”), Adelphia Acquisition Subsidiary, Inc., a Delaware
\ncorporation and a direct, wholly-owned subsidiary of Parent (“Merger Sub”) and
\nCentury Communications Corp., a New Jersey corporation (the “Company”).<\/p>\n
RECITALS<\/p>\n
A……..The respective Boards of Directors of Parent, Merger
\nSub and the Company have approved, and deem it advisable and in the best
\ninterests of their respective shareholders to consummate, the acquisition of the
\nCompany by Parent on the terms and conditions set forth herein.<\/p>\n
B……..The parties intend that the acquisition contemplated
\nby this Agreement constitute a “reorganization” within the meaning of Section
\n368(a) of the Code (as defined in Section 10.12(a)).<\/p>\n
C……..As an inducement to Parent to enter into this
\nAgreement and to incur the obligations set forth herein, all of the holders of
\nClass B Company Common Stock (as defined in Section 1.02(a)) (the “Class B
\nShareholders”), concurrently with the execution and delivery of this Agreement,
\nare entering into a Voting Agreement with Parent in the form of Exhibit A (the
\n“Class B Voting Agreement”) pursuant to which the Class B Shareholders have
\nagreed to vote the shares of the Class B Company Common Stock (as defined in
\nSection 1.02(a)) owned by them in favor of this Agreement and the Merger.<\/p>\n
D……..As an inducement to the Company to enter into this
\nAgreement and to incur the obligations set forth herein, certain shareholders of
\nParent (the “Parent Shareholders”), concurrently with the execution and delivery
\nof this Agreement, are entering into a Voting Agreement with the Company in the
\nform of Exhibit B (the “Rigas Class B Voting Agreement”) pursuant to which the
\nParent Shareholders have agreed to vote the shares of Parent Common Stock (as
\ndefined in Section 1.03(a)) owned by them in favor of this Agreement and the
\nMerger.<\/p>\n
In consideration of the premises and the respective
\nrepresentations, warranties, covenants, and agreements set forth herein, the
\nparties agree as follows.<\/p>\n
ARTICLE I<\/p>\n
THE MERGER<\/p>\n
Section 1.01 The Merger.<\/p>\n
(a)……At the Effective Time (as defined in Section
\n1.01(c)), the Company shall be merged (the “Merger”) with and into Merger Sub in<\/p>\n
accordance with the New Jersey Business Corporation Act (the “NJBCA”) and the
\nGeneral Corporation Law of the State of Delaware, whereupon the separate
\nexistence of the Company will cease, and Merger Sub shall be the surviving
\ncorporation (the “Surviving Corporation”).<\/p>\n
(b)……The closing of the Merger (the “Closing”) will take
\nplace at 10:00 a.m. (New York City time) on a date to be specified by the
\nparties (the “Closing Date”), which shall be no later than the second Business
\nDay after satisfaction of the conditions set forth in Article VIII, at the
\noffices of Gibson, Dunn & Crutcher LLP, 200 Park Avenue, New York, New York
\n10166, unless the parties agree in writing to another time, date or place.<\/p>\n
(c)……Upon the Closing, the Company and Merger Sub will
\nfile a certificate of merger with the Secretaries of State of the States of New
\nJersey and Delaware and make all other filings or recordings required by New
\nJersey and Delaware law in connection with the Merger. The Merger will become
\neffective at such time as the certificates of merger are filed with the
\nSecretaries of State of the States of New Jersey and Delaware or at such later
\ntime as is specified in the certificates of merger (the “Effective Time”).<\/p>\n
(d)……From and after the Effective Time, the Surviving
\nCorporation will possess all the rights, powers, privileges and franchises and
\nbe subject to all of the obligations, liabilities, restrictions and disabilities
\nof the Company and Merger Sub, all as provided under the Delaware General
\nCorporation Law.<\/p>\n
Section 1.02 Conversion of Shares. At the Effective Time:<\/p>\n
(a)……Each share of (i) Class A capital stock of the
\nCompany, par value $0.01 per share (the “Class A Company Common Stock”) issued
\nand outstanding immediately prior to the Effective Time will be converted into
\nthe right to receive the Class A Merger Consideration (as defined in Section
\n1.03(a)) and (ii) Class B capital stock of the Company, par value $0.01 per
\nshare (the “Class B Company Common Stock” and together with the Class A Company
\nCommon Stock, the “Company Common Stock”), issued and outstanding immediately
\nprior to the Effective Time will be converted into the right to receive the
\nClass B Merger Consideration (as defined in Section 1.03(b)).<\/p>\n
(b)……Each share of Company Common Stock held by the
\nCompany as treasury stock or owned by Parent or any of the Parent Subsidiaries
\nimmediately prior to the Effective Time will be canceled, and no payment will be
\nmade with respect thereto.<\/p>\n
(c)……Each issued and outstanding share of capital stock of
\nMerger Sub will remain outstanding and will be unchanged as a result of the
\nMerger.<\/p>\n
Section 1.03 Merger Consideration.<\/p>\n
(a)……The term “Class A Merger Consideration” means the
\nright to receive, for each share of Class A Company Common Stock, $9.16426528 in
\ncash and 0.61222732 shares of Parent Class A Common Stock, par value $.01 per
\nshare (“Parent Common Stock”).<\/p>\n
(b)……The term “Class B Merger Consideration” means the
\nright to receive, for each share of Class B Company Common Stock, $11.81417001
\nin cash and 0.63595483 shares of Parent Common Stock. The Class B Merger
\nConsideration and the Class A Merger Consideration are referred to herein as the
\n“Merger Consideration.”<\/p>\n
Section 1.04 Letter of Transmittal. On or prior to the
\nEffective Time, Parent will authorize one or more commercial banks acceptable to
\nthe Company, organized under the laws of the United States or any state thereof,
\nto act as Exchange Agent hereunder (the “Exchange Agent”). Promptly after the
\nEffective Time, Parent will cause the Exchange Agent to mail to each record
\nholder of Company Common Stock at the Effective Time (i) a letter of transmittal
\n(the “Letter of Transmittal”) that will specify that delivery will be effected,
\nand risk of loss and title to the certificates formerly representing the Company
\nCommon Stock will pass, upon delivery of such certificates to the Exchange Agent
\nand will be in such form and have such other provisions, including appropriate
\nprovisions with respect to back-up withholding, as Parent reasonably may specify
\nand (ii) instructions for use in effecting the surrender of the certificates
\nformerly representing shares of Company Common Stock in exchange for the Merger
\nConsideration.<\/p>\n
Section 1.05 Deposit of Merger Consideration. On or prior to
\nthe Effective Time, Parent will deposit with the Exchange Agent, for the benefit
\nof the former holders of Company Common Stock, cash and certificates sufficient
\nto pay the Merger Consideration for all the shares of Company Common Stock. The
\nshares of Parent Common Stock into which shares of Company Common Stock will be
\nconverted pursuant to the Merger will be deemed to have been issued at the
\nEffective Time for purposes of entitlement to dividends declared, if any, after
\nthe Effective Time.<\/p>\n
Section 1.06 Surrender and Payment.<\/p>\n
(a)……Upon surrender for cancellation to the Exchange Agent
\nof a certificate formerly representing shares of Company Common Stock, together
\nwith the Letter of Transmittal, duly executed and completed in accordance with
\nthe instructions thereto, the holder thereof will be entitled to receive (i) a
\ncertified or bank cashier’s check in the amount equal to the aggregate amount of
\nMerger Consideration that takes the form of cash which such holder has the right
\nto receive pursuant to the provisions of this Article I (including any dividends
\nor distributions related thereto which such former holder of Company Common
\nStock is entitled to receive pursuant to the provisions of Section 1.06(c) and
\nany cash in lieu of fractional shares of Parent Common Stock pursuant to Section
\n1.08) and (ii) certificates representing the aggregate number of shares of
\nParent Common Stock with respect to the Merger Consideration that takes the form
\nof Parent Company Stock which such holder has the right to receive pursuant to
\nthe provisions of this Article I, less the amount of any required withholding
\ntaxes, if any, in accordance with Section 1.09. After the Effective Time and
\nuntil so surrendered, each certificate representing shares of Company Common
\nStock will represent for all purposes only the right to receive the Merger
\nConsideration.<\/p>\n
(b)……If the Merger Consideration (or any portion thereof)
\nis to be delivered to a Person other than the Person in whose name the
\nsurrendered certificate or certificates are registered, it will be a condition<\/p>\n
of such delivery that the surrendered certificate or certificates shall be
\nproperly endorsed or otherwise be in proper form for transfer and that the
\nPerson requesting such payment shall pay any transfer or other Taxes required by
\nreason of the delivery of the Merger Consideration to a Person other than the
\nregistered holder of the surrendered certificate or certificates or such Person
\nshall establish to the satisfaction of the Exchange Agent that any such Tax has
\nbeen paid or is not applicable.<\/p>\n
(c)……No dividends or other distributions declared or made
\nwith respect to Parent Common Stock on or after the Effective Time will be paid
\nto the holder of any certificate that theretofore evidenced shares of Company
\nCommon Stock until such certificate is surrendered as provided in this Section
\n1.06. Upon such surrender, Parent will be pay to the holder of the certificates
\nevidencing shares of Parent Common Stock issued in exchange therefor, without
\ninterest, the amount of dividends or other distributions with a record date
\nafter the Effective Time payable with respect to shares of Parent Common Stock.<\/p>\n
(d)……Any portion of the Merger Consideration made
\navailable to the Exchange Agent pursuant to Section 1.05 that remains unclaimed
\nby holders of shares of Company Common Stock two years after the Effective Time
\nwill be returned to Parent upon demand. Any such holder who has not exchanged
\nshares of Company Common Stock for the Merger Consideration in accordance with
\nthis Article I prior to that time thereafter will look only to Parent for
\npayment of the Merger Consideration in respect of such shares of Company Common
\nStock.<\/p>\n
Section 1.07 Adjustments. If at any time during the period
\nbetween the date of this Agreement and the Effective Time, any change in the
\noutstanding shares of capital stock of Parent occurs, including by means of any
\nreclassification, recapitalization, stock split or combination, exchange or
\nreadjustment of shares, or any stock dividend thereon with a record date during
\nsuch period, the Merger Consideration will be adjusted appropriately.<\/p>\n
Section 1.08 Fractional Shares. No fractional shares of Parent
\nCommon Stock will be issued in the Merger. All fractional shares of Parent
\nCommon Stock that a holder of shares of Company Common Stock otherwise would be
\nentitled to receive as a result of the Merger will be aggregated. If a
\nfractional share results from such aggregation, in lieu thereof such holder will
\nbe entitled to receive from Parent, promptly after the Effective Time, an amount
\nin cash determined by multiplying the closing price of a share of Parent Common
\nStock on the Nasdaq National Market on the trading day immediately preceding the
\nEffective Time by the fraction of a share of Parent Common Stock to which such
\nholder would otherwise have been entitled.<\/p>\n
Section 1.09 Withholding of Tax. Parent or the Exchange Agent
\nwill be entitled to deduct and withhold from the consideration otherwise payable
\npursuant to this Agreement to any former holder of Company Common Stock such
\namounts as Parent or the Exchange Agent are required to deduct and withhold with<\/p>\n
respect to the making of such payment under the Code, or any provision of state,
\nlocal or foreign Tax law. To the extent that amounts are so withheld by Parent
\nor the Exchange Agent, such withheld amounts will be treated for all purposes of
\nthis Agreement as having been paid to the former holder of Company Common Stock
\nin respect of whom such deduction and withholding was made by Parent.<\/p>\n
Section 1.10 Lost Certificates. If any certificate evidencing
\nCompany Common Stock has been lost, stolen or destroyed, upon the making of an
\naffidavit of that fact by the Person claiming such certificate to be lost,
\nstolen or destroyed and, if reasonably required by Parent, the posting by such
\nPerson of a bond in such reasonable amount as Parent may direct as indemnity
\nagainst claims that may be made against it with respect to such certificate, the
\nExchange Agent will issue in exchange for such lost, stolen or destroyed
\ncertificate the Merger Consideration to which such Person may be entitled
\npursuant to this Article I and cash and any dividends or other distributions to
\nwhich such Person may be entitled pursuant to Section 1.06(a).<\/p>\n
Section 1.11 Stock Transfer Books. At the Effective Time, the
\nstock transfer books of the Company will be closed and there will be no further
\nregistration of transfers of shares of Company Common Stock on the records of
\nthe Company. Certificates formerly representing shares of Company Common Stock
\nthat are presented to the Surviving Corporation after the Effective Time will be
\ncanceled and exchanged for certificates representing shares of Parent Common
\nStock.<\/p>\n
Section 1.12 Shareholder Approval. This Agreement will be
\nsubmitted for adoption and approval to the holders of shares of Class A Company
\nCommon Stock and the holders of shares of Class B Company Common Stock at the
\nCompany Shareholder Meeting (as defined in Section 7.03) in accordance with the
\nprovisions of this Agreement. The affirmative vote of a majority of the votes
\ncast by the holders of shares entitled to vote thereon of Class A Company Common
\nStock and Class B Company Common Stock (voting as separate classes) is required
\nto approve this Agreement. No other approval of the Company’s shareholders is
\nrequired in order to consummate the Merger.<\/p>\n
Section 1.13 Stock Options and Restricted Stock. As of
\nthe Effective Time:<\/p>\n
(a)……Each outstanding option (an “Option”) to purchase
\nshares of Class A Company Common Stock granted under the Company’s 1985 Stock
\nOption Plan, the 1993 Non-Employee Directors’ Stock Option Plan and the 1994
\nStock Option Plan, or any similar plan or arrangement (collectively, the “Option
\nPlans”), whether or not then exercisable or vested, will become fully
\nexercisable and vested. Any restricted shares of Class A Company Common Stock
\nissued pursuant to the 1992 Management Equity Incentive Plan will become fully
\nvested and will cease to be restricted.<\/p>\n
(b)……Each outstanding Option, at the election of each
\nholder of such Option, which election will be available on an option-by-option
\nbasis, either:<\/p>\n
(i) will be exercised, effective as of the Effective
\n Time, and each share of Class A Company Common Stock issuable with
\n respect thereto will be converted into the right to receive the Merger
\n Consideration as provided in Section 1.03; or<\/p>\n
(ii) will be assumed by Parent and will become an
\n option to acquire, on the same terms and conditions as were applicable
\n under the Option Plans (except as provided in Section 1.13(a)), the
\n number of shares of Parent Common Stock as the holder of such Option
\n would have been entitled to receive pursuant to the Merger had such
\n holder exercised such Option in full immediately prior to the Effective
\n Time and received the Merger Consideration, at a price per share equal
\n to (x) the aggregate exercise price for the shares of Class A Company
\n Common Stock otherwise issuable pursuant to such Option divided by (y)
\n the number of full shares of Parent Common Stock deemed purchasable
\n under such Option. In the case of any Option to which Section 421 of
\n the Code applies by reason of its qualification under Section 422 of
\n the Code, the option price, the number of shares purchasable pursuant
\n to such Option and the terms and conditions of exercise of such option
\n will be determined in order to comply with Section 424 of the Code.<\/p>\n
(c)……Parent will take all corporate action necessary to
\nreserve for issuance a sufficient number of shares of Parent Common Stock for
\ndelivery upon exercise of Options assumed by it in accordance with this Section
\n1.14. Promptly after the Effective Time, Parent will file with the SEC a
\nregistration statement on Form S-3 or S-8, as appropriate, covering the shares
\nof Parent Common Stock subject to such Options and will use its commercially
\nreasonable efforts to cause such registration statement to remain effective for
\nso long as such Options remain outstanding.<\/p>\n
ARTICLE II<\/p>\n
THE SURVIVING CORPORATION<\/p>\n
Section 2.01 Certificate of Incorporation. The certificate of
\nincorporation of Merger Sub in effect at the Effective Time will be the
\ncertificate of incorporation of the Surviving Corporation until amended in
\naccordance with applicable law.<\/p>\n
Section 2.02 Bylaws. Subject to the provisions of Section
\n6.01, the by-laws of Merger Sub in effect at the Effective Time will be the
\nby-laws of the Surviving Corporation until amended in accordance with applicable
\nlaw.<\/p>\n
Section 2.03 Directors. From and after the Effective Time,
\nuntil successors are duly elected or appointed and qualified in accordance with
\napplicable law, the directors of Merger Sub at the Effective Time will be the
\ndirectors of the Surviving Corporation.<\/p>\n
Section 2.04 Officers. From and after the Effective Time,
\nuntil successors are duly elected or appointed and qualified in accordance with
\napplicable law, the officers of Merger Sub at the Effective Time will be the
\nofficers of the Surviving Corporation.<\/p>\n
Section 2.05 Name. The name of the Surviving Corporation at
\nthe Effective time will be Arahova Communications, Inc.<\/p>\n
ARTICLE III<\/p>\n
REPRESENTATIONS AND WARRANTIES OF THE COMPANY<\/p>\n
The Company represents and warrants to Parent that, except for
\ninaccuracies in the representations and warranties resulting from compliance by
\nthe Company with any of its obligations under this Agreement or actions taken by
\nthe Company in accordance with this Agreement and except as disclosed in the
\nCompany Disclosure Schedule:<\/p>\n
Section 3.01 Corporate Existence and Power. The Company is a
\ncorporation duly incorporated, validly existing and in good standing under the
\nlaws of the State of New Jersey and has all corporate power required to carry on
\nits business as now conducted. The Company is duly qualified to do business as a
\nforeign corporation and is in good standing in each jurisdiction where the
\ncharacter of the property owned or leased by it or the nature of its activities
\nmakes such qualification necessary, except for those jurisdictions where the
\nfailure to be so qualified or be in good standing would not have a Material
\nAdverse Effect. The Company has delivered to Parent copies of the Company’s
\ncertificate of incorporation and by-laws as currently in effect.<\/p>\n
Section 3.02 Corporate Authorization. The execution, delivery
\nand performance by the Company of this Agreement and the consummation by the
\nCompany of the transactions contemplated hereby are within the Company’s
\ncorporate powers and, except for the approval and adoption by the Company’s
\nshareholders of this Agreement and the Merger, have been duly authorized by all
\nnecessary corporate action on the part of the Company. This Agreement has been
\nduly and validly executed and delivered by the Company and, assuming the due and
\nvalid authorization, execution and delivery of this Agreement by Parent and
\nMerger Sub and receipt of all required approvals by the Company’s shareholders
\nin connection with the consummation of the Merger, constitutes a valid and
\nbinding agreement of the Company, enforceable in accordance with its terms
\nexcept as may be limited by bankruptcy, insolvency, reorganization, moratorium,
\nfraudulent transfer and other similar laws affecting creditors’ rights generally
\nand by equitable principles of general applicability. The Board of Directors of
\nthe Company (the “Company Board”) has approved the Merger, this Agreement, the
\nClass B Voting Agreement and the transactions contemplated hereby and thereby
\nand such approval, assuming the accuracy of the representation in Section 4.14,
\nis sufficient to render the provisions of Article 14A:10A of the NJBCA
\ninapplicable to the Merger, this Agreement, the Class B Voting Agreement and the
\ntransactions contemplated hereby and thereby. No other corporate proceedings on
\nthe part of the Company are necessary to authorize or approve this Agreement or
\nto consummate the transactions contemplated hereby (other than the approval and
\nadoption of the Merger and this Agreement by the shareholders of the Company to
\nthe extent required by the Company’s certificate of incorporation and by
\napplicable law).<\/p>\n
Section 3.03 Governmental Authorization. The execution,
\ndelivery and performance by the Company of this Agreement and the consummation
\nby the Company of the Merger and the other transactions contemplated hereby
\nrequire no consent, waiver, approval, authorization or permit by or from, or
\naction by or in respect of, or filing with, any Governmental Entity, other than:<\/p>\n
(i) the filing of certificates of merger as contemplated by Section 1.01(c);
\n(ii) compliance with any applicable requirements of state takeover laws; (iii)
\ncompliance with the applicable requirements of the Hart-Scott-Rodino Antitrust
\nImprovements Act of 1976 as amended and the rules and regulations thereunder
\n(the “HSR Act”); (iv) compliance with any applicable requirements of the
\nSecurities Act of 1933, as amended (together with the rules and regulations
\npromulgated thereunder, the “Securities Act”) and the Securities Exchange Act of
\n1934, as amended (together with the rules and regulations promulgated
\nthereunder, the “Exchange Act”); (v) compliance with any applicable requirements
\nof the Communications Act of 1934, as amended (together with the rules,
\nregulations and published decisions of the FCC (as defined below), the
\n“Communications Act”); (vi) filings under state securities or “blue-sky” laws;
\n(vii) notice to, or consents, approvals or waivers from, the relevant
\nFranchising Authorities or other third parties in connection with a change of
\ncontrol of the holder of the Franchises of the Company and the Company
\nSubsidiaries and of the Federal Communications Commission (the “FCC”) in
\nconnection with a change of control or a transfer of assets of the holder of the
\nFCC licenses of the Company and the Company Subsidiaries; and (viii) such
\nconsents, waivers, approvals, authorizations, permits, filings or actions that,
\nif not taken, made or obtained, would not in the aggregate have a Material
\nAdverse Effect.<\/p>\n
Section 3.04 Non-contravention. Assuming compliance with the
\nmatters referred to in Section 3.03, the execution, delivery and performance by
\nthe Company of this Agreement and the consummation by the Company of the
\ntransactions contemplated hereby do not and will not: (i) assuming receipt of
\nthe approval of shareholders of the Company referred to in Section 3.02,
\ncontravene or conflict with the certificate of incorporation or by-laws of the
\nCompany; (ii) contravene or conflict with or constitute a violation of any
\nprovision of any law, regulation, judgment, injunction, order or decree binding
\nupon or applicable to the Company or any Company Subsidiary that would be a
\nsignificant subsidiary within the meaning of Regulation S-X under the Exchange
\nAct (a “Significant Subsidiary of the Company”); (iii) result in a breach or
\nviolation of or constitute a default (or an event that with the giving of notice
\nor the lapse of time or both would constitute a default) under or give rise to a
\nright of termination, amendment, cancellation or acceleration of any right or
\nobligation of the Company or any Significant Subsidiary of the Company or to a
\nloss of any material benefit to which the Company or any Significant Subsidiary
\nof the Company is entitled or require any consent, approval or authorization
\nunder any provision of any material agreement, contract or other instrument
\nbinding upon the Company or any Significant Subsidiary of the Company or any of
\ntheir respective assets (including any material license, franchise, permit or
\nother similar authorization held by the Company or any Significant Subsidiary of
\nthe Company); or (iv) result in the creation or imposition of any Lien on any
\nmaterial asset of the Company or any Significant Subsidiary of the Company,
\nexcept for such contraventions, conflicts or violations referred to in clause
\n(ii) and breaches, violations, defaults, rights of termination, amendment,
\ncancellation or acceleration, losses, Liens or other occurrences referred to in
\nclauses (iii) and (iv) (each, a “Violation”) that in the aggregate would not
\nhave a Material Adverse Effect. Upon consummation of the Company’s joint venture
\nagreement with TCI Communications, Inc., the Company will amend the Company
\nDisclosure Schedule with respect to this Section 3.04 to give effect to such
\ntransaction.<\/p>\n
Section 3.05 Capitalization.<\/p>\n
(a)……As of February 11, 1999, the authorized capital stock
\nof the Company consisted of the following: (i) 400,000,000 shares of Class A
\nCompany Common Stock, of which 32,879,755 were issued and outstanding; (ii)
\n300,000,000 shares of Class B Company Common Stock, of which 42,322,059 were
\nissued and outstanding; and (iii) 100,000,000 shares of preferred stock, of
\nwhich no shares were issued and outstanding.<\/p>\n
(b)……As of February 11, 1999, there were outstanding
\nOptions to purchase an aggregate of 2,666,049 shares of Class A Company Common
\nStock (of which Options to purchase an aggregate of 1,784,659 shares of Class A
\nCompany Common Stock were exercisable).<\/p>\n
(c)……All outstanding shares of capital stock of the
\nCompany have been duly authorized and validly issued and are fully paid and
\nnonassessable. Except as set forth in this Section 3.05 and except for changes
\nsince February 11, 1999 resulting from the exercise of Options outstanding on
\nsuch date, there are outstanding (i) no shares of capital stock or other voting
\nsecurities of the Company, (ii) no securities of the Company convertible into or
\nexchangeable for shares of capital stock or voting securities of the Company
\n(other than the shares of Class B Company Common Stock, which are convertible
\ninto shares of Class A Company Common Stock) and (iii) no options or other
\nrights to acquire from the Company, and no obligation of the Company to issue,
\nany capital stock, voting securities or securities convertible into or
\nexchangeable for capital stock or voting securities of the Company (other than
\nthe shares of Class B Company Common Stock, which are convertible into shares of
\nClass A Company Common Stock). The securities described in Section 3.05(a) and
\nSection 3.05(b) are referred to collectively as the “Company Securities”).
\nExcept pursuant to the terms of the Company Securities, there are no outstanding
\nobligations of the Company or any Company Subsidiary to repurchase, redeem or
\notherwise acquire any Company Securities.<\/p>\n
(d)……Except with respect to the interests in the Persons
\nlisted in the Company Disclosure Schedule, there are no outstanding contractual
\nobligations of the Company or any Company Subsidiary to provide funds to, or
\nmake any investment (in the form of a loan, capital contribution or otherwise)
\nin, any other Person other than to wholly-owned Company Subsidiaries or in the
\nordinary course of business consistent with past practice.<\/p>\n
Section 3.06 Significant Subsidiaries.<\/p>\n
(a)……Each Significant Subsidiary of the Company is a
\ncorporation or other legal entity duly organized, validly existing and (if
\napplicable) in good standing under the laws of its jurisdiction of organization,
\nhas all corporate, partnership or similar powers required to carry on its
\nbusiness as now conducted and is duly qualified to do business as a foreign
\ncorporation or other legal entity and (if applicable) is in good standing in
\neach jurisdiction where the character of the property owned or leased by it or
\nthe nature of its activities makes such qualification necessary, except where
\nthe failure to be duly organized, validly existing and in good standing or to
\nhave such powers would not have a Material Adverse Effect. All Significant
\nSubsidiaries of the Company and their respective jurisdictions of organization
\nare identified in the Company Disclosure Schedule.<\/p>\n
(b)……All of the outstanding shares of capital stock of, or
\nother ownership interests in, each Significant Subsidiary of the Company, are
\nowned by the Company, directly or indirectly, free and clear of any Lien and
\nfree of any other limitation or restriction (including any restriction on the
\nright to vote, sell or otherwise dispose of such capital stock or other
\nownership interests). There are no outstanding (i) securities of the Company or
\nany Significant Subsidiary of the Company convertible into or exchangeable for
\nshares of capital stock or other voting securities or ownership interests in any
\nSignificant Subsidiary of the Company or (ii) options or other rights to acquire
\nfrom the Company or any Significant Subsidiary of the Company, and no other
\nobligation of the Company or any Significant Subsidiary of the Company to issue,
\nany capital stock, voting securities or other ownership interests in, or any
\nsecurities convertible into or exchangeable for any capital stock, voting
\nsecurities or ownership interests in, any Significant Subsidiary of the Company.
\nThe securities described in clauses (i) and (ii) above are referred to
\ncollectively as the “Company Subsidiary Securities”. There are no outstanding
\nobligations of the Company or any Significant Subsidiary of the Company to
\nrepurchase, redeem or otherwise acquire any outstanding Company Subsidiary
\nSecurities or pay any dividend or make any other distribution in respect thereof
\nto a Person other than the Company or a wholly-owned Significant Subsidiary of
\nthe Company.<\/p>\n
Section 3.07 SEC Filings. The Company has filed with the SEC
\nall forms, reports, definitive proxy statements, schedules and registration
\nstatements required to be filed with the SEC since May 31, 1998 (the “Company
\nSEC Reports”). No Company Subsidiary is required to file any report, form or
\ndocument with the SEC pursuant to the Exchange Act or the Securities Act. As of
\ntheir respective filing dates, no Company SEC Report contained any untrue
\nstatement of a material fact or omitted to state any material fact required to
\nbe stated therein or necessary to make the statements made therein, in the light
\nof the circumstances under which they were made, not misleading. The Company SEC
\nReports when filed complied in all material respects with applicable
\nrequirements of the Securities Act and the Exchange Act.<\/p>\n
Section 3.08 Financial Statements . The audited consolidated
\nfinancial statements and unaudited consolidated interim financial statements of
\nthe Company included in the Company SEC Reports fairly present, in conformity
\nwith GAAP applied on a consistent basis (except as may be indicated in the notes
\nthereto or in the case of unaudited interim financial statements as permitted by
\nForm 10-Q of the SEC), the consolidated financial position of the Company and
\nits consolidated Subsidiaries as of the dates thereof and its consolidated
\nstatements of operations, shareholders’ equity and cash flows for the periods
\nthen ended (subject to normal year-end adjustments in the case of any unaudited
\ninterim financial statements).<\/p>\n
Section 3.09 Disclosure Documents.<\/p>\n
(a)……The Proxy Statement\/Prospectus and any amendment or
\nsupplement thereto, when filed, will comply as to form in all material respects
\nwith the applicable requirements of the Securities Act and the Exchange Act. At
\nthe time the Proxy Statement\/Prospectus or any amendment or supplement thereto
\nis first mailed to shareholders of the Company and at the time such shareholders<\/p>\n
vote on the approval and adoption of this Agreement, the Proxy
\nStatement\/Prospectus, as supplemented or amended, if applicable, will not
\ncontain any untrue statement of a material fact or omit to state any material
\nfact necessary in order to make the statements contained therein, in the light
\nof the circumstances under which they were made, not misleading. The
\nrepresentations and warranties in this Section 3.09(a) do not apply to
\nstatements in or omissions from the Proxy Statement\/Prospectus or any amendment
\nor supplement thereto based upon information furnished to the Company by Parent
\nfor use therein.<\/p>\n
(b)……None of the information furnished to Parent for use
\nin (or incorporation by reference in) the Registration Statement (as defined in
\nSection 4.09) or any amendment or supplement thereto will contain, at the time
\nthe Registration Statement or any amendment or supplement thereto becomes
\neffective, any untrue statement of a material fact or omit to state any material
\nfact required to be stated therein or necessary in order to make the statements
\ncontained therein, in light of the circumstances under which they were made, not
\nmisleading.<\/p>\n
Section 3.10 Absence of Certain Changes or Events. Since May
\n31, 1998, except (x) as contemplated by this Agreement or disclosed in the
\nCompany SEC Reports and (y) for any change resulting from the transactions
\ncontemplated by this Agreement or general economic, financial, competitive or
\nmarket conditions or conditions or circumstances generally affecting the cable
\ntelevision or communications industries, there has not been: (i) any change in
\nthe business, operations or financial condition of the Company or any of the
\nCompany Subsidiaries that has had or would reasonably be expected to have,
\nindividually or in the aggregate, a Material Adverse Effect; (ii) any
\ndeclaration, setting aside or payment of any dividend or other distribution with
\nrespect to any shares of capital stock of the Company, or any repurchase,
\nredemption or other acquisition by the Company or any of the Company
\nSubsidiaries of any outstanding shares of capital stock or other securities of,
\nor other ownership interests in, the Company or any of the Company Subsidiaries;
\n(iii) any incurrence, assumption or guarantee by the Company or any of the
\nCompany Subsidiaries of any material indebtedness for borrowed money other than
\nin the ordinary course and in amounts and on terms consistent with past
\npractices; or (iv) as of the date hereof, any damage, destruction or other
\ncasualty loss (whether or not covered by insurance) affecting the business or
\nassets of the Company or any of the Company Subsidiaries that has had or would
\nreasonably be expected to have, individually or in the aggregate, a Material
\nAdverse Effect.<\/p>\n
Section 3.11 Litigation. Except as set forth in the Company
\nSEC Reports filed prior to the date hereof, there is, as of the date hereof, no
\naction, suit or proceeding pending, or to the knowledge of the Company
\nthreatened, against the Company or any Company Subsidiary before any court,
\narbitrator or other Governmental Entity that would reasonably be expected to
\nhave, individually or in the aggregate, a Material Adverse Effect.<\/p>\n
Section 3.12 Taxes. Except to the extent that failure to do so
\nwould not have a Material Adverse Effect, each of the Company and its
\nSignificant Subsidiaries has filed all Tax returns and reports required to be
\nfiled by it and has paid, or established adequate reserves for, all Taxes
\nrequired to be paid by it. No deficiencies for any Taxes have been proposed,
\nasserted or assessed against the Company that would have a Material Adverse
\nEffect. No requests for waivers of the time to assess any such Taxes are<\/p>\n
pending, other than waivers relating to property taxes and sales and use taxes.<\/p>\n
Section 3.13 Employee Benefit Plans.<\/p>\n
(a)……The Company Disclosure Schedule identifies each
\nmaterial employment, severance or similar contract or arrangement or any plan,
\npolicy, fund, program or contract or arrangement providing for compensation,
\nbonus, profit-sharing, stock option or other stock-related rights or other forms
\nof incentive or deferred compensation, vacation benefits, insurance coverage
\n(including any self-insured arrangements), health or medical benefits,
\ndisability benefits, workers’ compensation, supplemental unemployment benefits,
\nseverance benefits and post-employment or retirement benefits (including
\ncompensation, pension, health, medical or life insurance or other benefits) that
\n(i) is entered into, maintained, administered or contributed to, as the case may
\nbe, by the Company or any Company Subsidiary and (ii) covers any employee or
\nformer employee of any Company or Company Subsidiary employed in the United
\nStates or Puerto Rico (each, an “Employee Plan”).<\/p>\n
(b)……The Company has furnished or made available to Parent
\ncopies of the Employee Plans (and, if applicable, related trust agreements) and
\nall amendments thereto and written interpretations thereof together with the
\nmost recent annual report (Form 5500 including, if applicable, Schedule B
\nthereto) and the most recent actuarial valuation report prepared in connection
\nwith any Employee Plan. There is no material accumulated funding deficiency,
\ntermination or partial termination, or requirement to provide security with
\nrespect to any Employee Plan. The fair market value of the assets of each
\nmaterial Employee Plan would exceed the value of all liabilities and the
\nobligations of such Employee Plan if such plan were to terminate on the Closing
\nDate. The transaction contemplated by this Agreement will not result in any
\nmaterial liability under ERISA to the Company or any of the Company’s
\nSubsidiaries or Parent, or any of their respective ERISA Affiliates.<\/p>\n
(c)……Each Employee Plan that is intended to be qualified
\nunder Section 401(a) of the Code has been determined by the Internal Revenue
\nService to be qualified under Section 401(a) of the Code and each trust related
\nthereto has been determined to be exempt from tax pursuant to Section 501(a) of
\nthe Code. The Company is not aware of any event that has occurred since the date
\nof such determinations that would adversely affect such qualification or tax
\nexempt status. The Company has provided Parent with the most recent
\ndetermination letter of the Internal Revenue Service relating to each such
\nEmployee Plan. Each Employee Plan has been maintained in compliance in all
\nmaterial respects with its terms and with the requirements prescribed by any and
\nall applicable statutes, orders, rules and regulations, including the Employee
\nRetirement Income Security Act of 1974, as amended (“ERISA”) and the Code.<\/p>\n
(d)……No Employee Plan is a Multiemployer plan as defined
\nin Section 3(37) of ERISA or is a plan subject to Title IV of ERISA. Neither the
\nCompany nor any Company Subsidiary or any of their ERISA Affiliates (or any
\nformer ERISA Affiliate with respect to the period in which such entity was an
\nERISA Affiliate) has ever maintained, adopted or established, contributed or
\nbeen required to contribute to, or otherwise participated or been required to
\nparticipate in, any such plan.<\/p>\n
(e)……Neither the Company nor any Company Subsidiary has
\nany current or projected material liability in respect of post-employment or
\npost-retirement health or medical or life insurance benefits for retired, former
\nor current employees of the Company, except as required to avoid excise tax
\nunder Section 4980B of the Code.<\/p>\n
(f)……There has been no amendment to, written
\ninterpretation of or announcement by the Company, any Company Subsidiary or
\ntheir respective Affiliates relating to, or change in employee participation or
\ncoverage under, any Employee Plan that would increase materially the expense of
\nmaintaining such Employee Plan above the level of the expense incurred in
\nrespect thereof for the most recent fiscal year ended prior to the date hereof,
\nother than ordinary course of business increases related to health, life and
\ndisability insurance plans.<\/p>\n
(g)……Other than as disclosed in the Company SEC Reports,
\nno employee or former employee of the Company or any Company Subsidiary will
\nbecome entitled to any bonus, retirement, severance, job security or similar
\nbenefit or an enhancement of such benefit (including acceleration of vesting or
\nexercise of an incentive award) under any Employee Plan as a result of the
\ntransactions contemplated hereby.<\/p>\n
(h)……Other than routine claims for benefits and liability
\nfor premiums due to the Pension Benefit Guaranty Corporation, neither the
\nCompany nor any Company Subsidiary or ERISA Affiliate (or any former ERISA
\nAffiliate with respect to the period in which such entity was an ERISA
\nAffiliate) has incurred any material liability with respect to any Employee Plan
\nthat is currently due and owing and has not yet been satisfied, including under
\nERISA, the Code or other applicable law. No event has occurred and, to the
\nknowledge of the Company, there exists no condition or set of circumstances
\n(other than the accrual of benefits under the normal terms of the Employee
\nPlans), that could result in the imposition of any material liability on the
\nCompany or any Company Subsidiary or ERISA Affiliate (or any former ERISA
\nAffiliate with respect to the period in which such entity was an ERISA
\nAffiliate) with respect to any Employee Plan, including under ERISA, the Code or
\nother applicable law with respect to any Employee Plan.<\/p>\n
Section 3.14 Brokers. Except for the engagement of Donaldson,
\nLufkin & Jenrette Securities Corporation, none of the Company or any of the
\nCompany Subsidiaries, or any of their respective officers, directors or
\nemployees, has employed any investment banker, broker, finder or other
\nintermediary or incurred any liability for any brokerage fees, commissions or
\nfinder’s fees in connection with the transactions contemplated by this
\nAgreement.<\/p>\n
Section 3.15 Compliance with Applicable Laws. The Company and
\nthe Company Subsidiaries are in substantial compliance with all laws,
\nregulations and orders of any Governmental Entity applicable to them, except
\nwhere the failure to comply would not have a Material Adverse Effect. The
\nCompany and each Company Subsidiary are in material compliance with, and have
\nobtained, all licenses, permits, franchises or other governmental authorizations
\nnecessary to the ownership of its properties or to the conduct of its business,
\nexcept where the failure to obtain such licenses, permits, franchises or other
\ngovernmental authorizations would not have a Material Adverse Effect.<\/p>\n
Section 3.16 Environmental Matters. Except as would not have a
\nMaterial Adverse Effect: (i) to the Company’s knowledge, no real property
\ncurrently or formerly owned or operated by the Company or any current Company
\nSubsidiary is contaminated with any Hazardous Substances to an extent or in a
\nmanner or condition now requiring remediation under any Environmental Law; (ii)
\nno judicial or administrative proceeding is pending or, to the knowledge of the
\nCompany, threatened relating to liability for any off-site disposal or
\ncontamination; and (iii) the Company and the Company Subsidiaries have not
\nreceived in writing any claims or notices alleging liability under any
\nEnvironmental Law. To the Company’s knowledge, neither the Company nor any
\nCompany Subsidiary is in violation of any applicable Environmental Law and no
\ncondition or event has occurred with respect to the Company or any Company
\nSubsidiary that would constitute a violation of such Environmental Law,
\nexcluding in any event such violations, conditions and events that would not
\nhave a Material Adverse Effect.<\/p>\n
Section 3.17 Opinion of Financial Advisor. The Company has
\nreceived the written opinion of Donaldson, Lufkin & Jenrette Securities
\nCorporation to the effect that the Merger Consideration is fair from a financial
\npoint of view to the shareholders of the Company (other than shareholders who
\nare Affiliates of the Company).<\/p>\n
Section 3.18 No Other Representations. Except as specifically
\nset forth in this Article III, the Company has not made, and Parent and Merger
\nSub have not relied upon, any representations or warranties, whether express or
\nimplied.<\/p>\n
ARTICLE IV<\/p>\n
REPRESENTATIONS AND WARRANTIES OF
\n PARENT AND MERGER SUB<\/p>\n
Parent and Merger Sub represent and warrant to the Company
\nthat, except for inaccuracies in the representations and warranties resulting
\nfrom compliance by Parent and Merger Sub with any of their obligations under
\nthis Agreement or actions taken by Parent or Merger Sub in accordance with this
\nAgreement and except as disclosed in the Parent Disclosure Schedule:<\/p>\n
Section 4.01 Corporate Existence and Power.<\/p>\n
(a)……Parent is a corporation duly incorporated, validly
\nexisting and in good standing under the laws of the State of Delaware and has
\nall corporate power required to carry on its business as now conducted. Parent
\nis duly qualified to do business as a foreign corporation and is in good
\nstanding in each jurisdiction where the character of the property owned or
\nleased by it or the nature of its activities makes such qualification necessary,
\nexcept for those jurisdictions where the failure to be so qualified or be in
\ngood standing would not have a Material Adverse Effect. Parent has delivered to
\nthe Company copies of Parent’s certificate of incorporation and by-laws as
\ncurrently in effect.<\/p>\n
(b)……Merger Sub is a corporation duly incorporated,
\nvalidly existing and in good standing under the laws of the State of Delaware
\nand has all corporate power required to carry on its business as now conducted.
\nMerger Sub is duly qualified to do business as a foreign corporation and is in
\ngood standing in each jurisdiction where the character of the property owned or
\nleased by it or the nature of its activities makes such qualification necessary,
\nexcept for those jurisdictions where the failure to be so qualified or be in
\ngood standing would not have a Material Adverse Effect. Merger Sub has delivered
\nto the Company copies of Merger Sub’s certificate of incorporation and by-laws
\nas currently in effect.<\/p>\n
Section 4.02 Corporate Authorization. The execution, delivery
\nand performance by each of Parent and Merger Sub of this Agreement and the
\nconsummation by Parent and Merger Sub of the transactions contemplated hereby
\nare within the corporate powers of each of Parent and Merger Sub and have been
\nduly authorized by all necessary corporate action on the part of Parent and
\nMerger Sub. This Agreement has been duly and validly executed and delivered by
\neach of Parent and Merger Sub and, assuming the due and valid authorization,
\nexecution and delivery of this Agreement by the Company, constitutes a valid and
\nbinding agreement of each of Parent and Merger Sub, enforceable in accordance
\nwith its terms except as may be limited by bankruptcy, insolvency,
\nreorganization, moratorium, fraudulent transfer and other similar laws affecting
\ncreditors’ rights generally and by equitable principles of general
\napplicability. The Board of Directors of each of Parent and Merger Sub, and
\nParent as the sole shareholder of Merger Sub, have approved the Merger, this
\nAgreement and the transactions contemplated hereby. No other corporate
\nproceedings or shareholder approvals on the part of Parent or Merger Sub are
\nnecessary to authorize or approve this Agreement or to consummate the
\ntransactions contemplated hereby (other than approval of the shareholders of
\nParent.)<\/p>\n
Section 4.03 Governmental Authorization. The execution,
\ndelivery and performance by each of Parent and Merger Sub of this Agreement and
\nthe consummation by each of Parent and Merger Sub of the Merger and the other
\ntransactions contemplated hereby require no consent, waiver, approval,
\nauthorization or permit by or from, or action by or in respect of, or filing
\nwith, any Governmental Entity, other than: (i) the filing of certificates of
\nmerger as contemplated by Section 1.01(a); (ii) compliance with any applicable
\nrequirements of state takeover laws; (iii) compliance with the applicable
\nrequirements of the HSR Act; (iv) compliance with any applicable requirements of
\nthe Securities Act and the Exchange Act; (v) compliance with any applicable
\nrequirements of the Communications Act; (vi) filings under state securities or
\n“blue-sky” laws; (vii) notice to, or consents, approvals or waivers from, the
\nrelevant Franchising Authorities or other third parties in connection with a
\nchange of control of the holder of the Franchises of the Company and the Company
\nSubsidiaries and the FCC in connection with a change of control or a transfer of
\nassets of the holder of the FCC licenses of the Company and the Company
\nSubsidiaries, and (viii) such consents, waivers, approvals, authorizations,
\npermits, filings or actions that, if not taken, made or obtained, would not in
\nthe aggregate have a Material Adverse Effect.<\/p>\n
Section 4.04 Non-contravention. Assuming compliance with the
\nmatters referred to in Section 4.03, the execution, delivery and performance by
\neach of Parent and Merger Sub of this Agreement and the consummation by each of
\nParent and Merger Sub of the transactions contemplated hereby do not and will
\nnot: (i) assuming receipt of the approval of the shareholders of the Parent
\nreferred to in Section 4.02, contravene or conflict with the certificate of<\/p>\n
incorporation or by-laws of each of Parent and Merger Sub; (ii) contravene or
\nconflict with or constitute a violation of any provision of any law, regulation,
\njudgment, injunction, order or decree binding upon or applicable to Parent,
\nMerger Sub or any Subsidiary of Parent that would be a significant subsidiary
\nwithin the meaning of Regulation S-X under the Exchange Act (a “Significant
\nSubsidiary of Parent”); (iii) assuming receipt of the approval of the
\nshareholders of the Parent referred to in Section 4.02, result in a breach or
\nviolation of or constitute a default (or an event that with the giving of notice
\nor the lapse of time or both would constitute a default) under or give rise to a
\nright of termination, amendment, cancellation or acceleration of any right or
\nobligation of Parent, Merger Sub or any Significant Subsidiary of Parent or to a
\nloss of any material benefit to which Parent, Merger Sub or any Significant
\nSubsidiary of Parent is entitled or require any consent, approval or
\nauthorization under any provision of any material agreement, contract or other
\ninstrument binding upon Parent, Merger Sub or any Significant Subsidiary of
\nParent or any of their respective assets (including any material license,
\nfranchise, permit or other similar authorization held by Parent, Merger Sub or
\nany Significant Subsidiary of Parent); or (iv) result in the creation or
\nimposition of any Lien on any material asset of Parent, Merger Sub or any
\nSignificant Subsidiary of Parent, except for such Violations that in the
\naggregate would not have a Material Adverse Effect.<\/p>\n
Section 4.05 Capitalization.<\/p>\n
(a)……As of February 28, 1999, the authorized capital stock
\nof Parent consisted of the following: (i) 200,000,000 shares of Class A Common
\nStock, par value $.01 per share, of which 42,328,343 were issued and
\noutstanding; (ii) 25,000,000 shares of Class B Common Stock par value $.01 per
\nshare, of which 10,834,476 were issued and outstanding; and (iii) 5,000,000
\nshares of preferred stock, of which 1,500,000 shares (issued as 13% Redeemable
\nExchangeable Preferred Stock) and 80,000 shares (issued as 8 1\/8% Series C
\nConvertible Preferred Stock convertible into 9,433,962 shares of the Parent’s
\nClass A Common Stock) were issued and outstanding.<\/p>\n
(b)……As of February 28, 1999, there were no outstanding
\noptions to purchase Parent Common Stock.<\/p>\n
(c)……All outstanding shares of capital stock of Parent
\nhave been duly authorized and validly issued and are fully paid and
\nnonassessable. Except as set forth in this Section 4.05, as of February 28,
\n1999, there are outstanding (i) no shares of capital stock or other voting
\nsecurities of Parent, (ii) no securities of Parent convertible into or
\nexchangeable for shares of capital stock or voting securities of Parent and
\n(iii) no options or other rights to acquire from Parent, and no obligation of
\nParent to issue, any capital stock, voting securities or securities convertible
\ninto or exchangeable for capital stock or voting securities of Parent. The
\nsecurities described in clauses (a) and (b) of this Section 4.05 and the
\nsecurities referred to in the Parent SEC Reports are referred to collectively as
\nthe “Parent Securities”. Except pursuant to the terms of the Parent Securities,
\nthere are no outstanding obligations of Parent or any Parent Subsidiary to
\nrepurchase, redeem or otherwise acquire any Parent Securities.<\/p>\n
(d)……As of March 5, 1998, except as disclosed in the
\nParent SEC Reports and except with respect to the interests in the Persons
\nlisted in the Parent Disclosure Schedule, there are no outstanding contractual
\nobligations of Parent or any Parent Subsidiary to provide funds to, or make any
\ninvestment (in the form of a loan, capital contribution or otherwise) in, any
\nother Person other than to wholly-owned Parent Subsidiaries or in the ordinary
\ncourse of business consistent with past practice.<\/p>\n
Section 4.06 Significant Subsidiaries.<\/p>\n
(a)……Each Significant Subsidiary of Parent is a
\ncorporation or other legal entity duly organized, validly existing and (if
\napplicable) in good standing under the laws of its jurisdiction of organization,
\nhas all corporate, partnership or similar powers required to carry on its
\nbusiness as now conducted and is duly qualified to do business as a foreign
\ncorporation or other legal entity and (if applicable) is in good standing in
\neach jurisdiction where the character of the property owned or leased by it or
\nthe nature of its activities makes such qualification necessary, except where
\nthe failure to be duly organized, validly existing and in good standing or to
\nhave such powers would not have a Material Adverse Effect. As of March 5, 1999,
\nall Significant Subsidiaries of Parent and their respective jurisdictions of
\norganization are identified in the Parent Disclosure Schedule.<\/p>\n
(b)……Except as disclosed in the Parent SEC Reports, all of
\nthe outstanding shares of capital stock of, or other ownership interests in,
\neach Significant Subsidiary of Parent, are owned by Parent, directly or
\nindirectly, free and clear of any Lien and free of any other limitation or
\nrestriction (including any restriction on the right to vote, sell or otherwise
\ndispose of such capital stock or other ownership interests). Except as disclosed
\nin the Parent SEC Reports, there are no outstanding (i) securities of Parent or
\nany Significant Subsidiary of Parent convertible into or exchangeable for shares
\nof capital stock or other voting securities or ownership interests in any
\nSignificant Subsidiary of Parent or (ii) options or other rights to acquire from
\nParent or any Significant Subsidiary of Parent, and no other obligation of
\nParent or any Significant Subsidiary of Parent to issue, any capital stock,
\nvoting securities or other ownership interests in, or any securities convertible
\ninto or exchangeable for any capital stock, voting securities or ownership
\ninterests in, any Significant Subsidiary of Parent. The securities described in
\nclauses (i) and (ii) above are referred to collectively as the “Parent
\nSubsidiary Securities”). Except as disclosed in the Parent SEC Reports, there
\nare no outstanding obligations of Parent or any Significant Subsidiary of Parent
\nto repurchase, redeem or otherwise acquire any outstanding Parent Subsidiary
\nSecurities or pay any dividend or make any other distribution in respect thereof
\nto a Person other than Parent or a wholly-owned Significant Subsidiary of
\nParent.<\/p>\n
Section 4.07 SEC Filings. Parent and Hyperion
\nTelecommunications, Inc. each have filed with the SEC all forms, reports,
\ndefinitive proxy statements, schedules and registration statements required to
\nbe filed with the SEC since March 31, 1998 (collectively, the “Parent SEC
\nReports”). Except for Hyperion Telecommunications, Inc., as of March 5, 1999, no
\nParent Subsidiary is required to file any report, form or document with the SEC
\npursuant to the Exchange Act or the Securities Act. As of their respective
\nfiling dates, no Parent SEC Report contained any untrue statement of a material
\nfact or omitted to state any material fact required to be stated therein or<\/p>\n
necessary to make the statements made therein, in the light of the circumstances
\nunder which they were made, not misleading. The Parent SEC Reports when filed
\ncomplied in all material respects with applicable requirements of the Securities
\nAct and the Exchange Act.<\/p>\n
Section 4.08 Financial Statements . The audited consolidated
\nfinancial statements and unaudited consolidated interim financial statements of
\nParent included in the Parent SEC Reports fairly present, in conformity with
\nGAAP applied on a consistent basis (except as may be indicated in the notes
\nthereto or in the case of unaudited interim financial statements as permitted by
\nForm 10-Q of the SEC), the consolidated financial position of Parent and its
\nconsolidated Subsidiaries as of the dates thereof and its consolidated
\nstatements of operations, shareholders’ equity and cash flows for the periods
\nthen ended (subject to normal year-end adjustments in the case of any unaudited
\ninterim financial statements).<\/p>\n
Section 4.09 Disclosure Documents.<\/p>\n
(a)……The registration statement on Form S-4 of Parent to
\nbe filed with the SEC in connection with the Merger (the “Registration
\nStatement”) and any amendment or supplement thereto, when filed, will comply as
\nto form in all material respects with the applicable requirements of the
\nSecurities Act. At the time the Registration Statement is declared effective by
\nthe SEC, the Registration Statement will not contain an untrue statement of a
\nmaterial fact or omit to state a material fact required to be stated therein or
\nnecessary to make the statements contained therein not misleading. At the time
\nthe Proxy Statement\/Prospectus included in the Registration Statement and
\nforming a part thereof or any amendment or supplement thereto is first mailed to
\nshareholders of the Company and at the time such shareholders vote on the
\napproval and adoption of this Agreement, the Proxy Statement\/Prospectus, as
\nsupplemented or amended, if applicable, will not contain any untrue statement of
\na material fact or omit to state any material fact necessary in order to make
\nthe statements contained therein, in the light of the circumstances under which
\nthey were made, not misleading. The representations and warranties in this
\nSection 4.09(a) do not apply to statements in or omissions from the Registration
\nStatement or the Proxy Statement\/Prospectus or any amendment or supplement
\nthereto based upon information furnished to Parent by the Company for use
\ntherein.<\/p>\n
(b)……None of the information furnished to the Company for
\nuse in (or incorporation by reference in) the Proxy Statement\/Prospectus or any
\namendment or supplement thereto will contain, at the time the Proxy
\nStatement\/Prospectus included in the Registration Statement and forming a part
\nthereof or any amendment or supplement thereto is first mailed to shareholders
\nof the Company and at the time such shareholders vote on the approval and
\nadoption of this Agreement, any untrue statement of a material fact or omit to
\nstate any material fact necessary in order to make the statements contained
\ntherein, in the light of the circumstances under which they were made, not
\nmisleading.<\/p>\n
Section 4.10 Absence of Certain Changes or Events. Since the
\ndate of the most recent audited financial statements included in the Parent SEC
\nReports, except (x) as contemplated by this Agreement or disclosed in the Parent
\nSEC Reports and (y) for any change resulting from the transactions contemplated
\nby this Agreement or general economic, financial, competitive or market<\/p>\n
conditions or conditions or circumstances generally affecting the cable
\ntelevision or communications industries, there has not been: (i) any change in
\nthe business, operations or financial condition of Parent or any of the Parent
\nSubsidiaries that has had or would reasonably be expected to have, individually
\nor in the aggregate, a Material Adverse Effect; (ii) any incurrence, assumption
\nor guarantee by Parent or any of the Parent Subsidiaries of any material
\nindebtedness for borrowed money other than in the ordinary course and in amounts
\nand on terms consistent with past practices; or (iii) as of the date hereof, any
\ndamage, destruction or other casualty loss (whether or not covered by insurance)
\naffecting the business or assets of Parent or any of the Parent Subsidiaries
\nthat has had or would reasonably be expected to have, individually or in the
\naggregate, a Material Adverse Effect.<\/p>\n
Section 4.11 Litigation. Except as set forth in the Parent SEC
\nReports filed prior to the date hereof, there is, as of the date hereof, no
\naction, suit or proceeding pending, or to the knowledge of Parent threatened,
\nagainst Parent or any Parent Subsidiary before any court, arbitrator or other
\nGovernmental Entity that would reasonably be expected to have, individually or
\nin the aggregate, a Material Adverse Effect.<\/p>\n
Section 4.12 Brokers. None of Parent, Merger Sub or any Parent
\nSubsidiary, or any of their respective officers, directors or employees, has
\nemployed any investment banker, broker, finder or other intermediary or incurred
\nany liability for any brokerage fees, commissions or finder’s fees in connection
\nwith the transactions contemplated by this Agreement for or with respect to
\nwhich the Company or any Company Subsidiary is or might be liable prior to the
\nEffective Time, except that Parent has retained Daniels & Associates, as its
\nfinancial advisor.<\/p>\n
Section 4.13 Compliance with Applicable Laws. Parent and the
\nParent Subsidiaries are in substantial compliance with all laws, regulations and
\norders of any Governmental Entity applicable to them, except where the failure
\nto comply would not have a Material Adverse Effect. Parent and each Parent
\nSubsidiary have obtained all licenses, permits, franchises or other governmental
\nauthorizations necessary to the ownership of its properties or to the conduct of
\nits business, except where the failure to obtain such licenses, permits,
\nfranchises or other governmental authorizations would not have a Material
\nAdverse Effect.<\/p>\n
Section 4.14 Interested Shareholder. As of the date of this
\nAgreement, none of Parent, Merger Sub or any of their Affiliates is an
\n“Interested Shareholder” as such term is defined in Section 14A:10A-3 of the
\nNJBCA.<\/p>\n
Section 4.15 Ownership of Merger Sub; No Prior Activities.
\nMerger Sub was formed by Parent solely for the purposes of engaging in the
\ntransactions contemplated hereby and has not engaged in any other activities. As
\nof the date hereof and the Effective Time, all of the capital stock of Merger
\nSub is and will be owned directly by Parent.<\/p>\n
Section 4.16 Opinion of Financial Advisor. Parent has received
\nthe written opinion of Daniels & Associates to the effect that the Merger
\nConsideration is fair from a financial point of view to the shareholders of
\nParent.<\/p>\n
Section 4.17 No Other Representations. Except as specifically
\nset forth in this Article IV, Parent has not made, and the Company has not
\nrelied upon, any representations or warranties, whether express or implied.<\/p>\n
ARTICLE V<\/p>\n
COVENANTS OF THE COMPANY<\/p>\n
Section 5.01 Conduct of the Company. From the date hereof
\nuntil the Effective Time, the Company will not, and will cause the Company
\nSubsidiaries not to, take or agree to take any action that would (i) interfere
\nwith the consummation of the transactions contemplated hereby or make such
\nconsummation more difficult or materially delay the consummation of such
\ntransactions, (ii) make any representation or warranty of the Company contained
\nin this Agreement untrue or incorrect as of the date when made or as of the
\nClosing Date or (iii) result in any of the conditions to Closing in Article VIII
\nnot being satisfied. Except as contemplated by this Agreement or with the prior
\nwritten consent of Parent (which consent will not be unreasonably withheld or
\ndelayed), the Company and the Company Subsidiaries will conduct their business
\nin the ordinary course consistent with past practice and will use reasonable
\nefforts to preserve intact their business organizations and relationships with
\nthird parties and to keep available the services of their officers and
\nemployees. From the date hereof until the Effective Time, the Company will not,
\nand will not permit any of the Company Subsidiaries to, do any of the following:<\/p>\n
(a) adopt any amendment to its certificate of incorporation or
\n by-laws;<\/p>\n
(b) except for issuances of Company Subsidiary Securities to
\n the Company or a wholly-owned Company Subsidiary, issue, reissue or
\n sell, or authorize the issuance, reissuance or sale of (i) additional
\n shares of capital stock of any class, or securities convertible into
\n capital stock of any class, or any rights, warrants or options to
\n acquire any convertible securities or capital stock, other than (1)
\n pursuant to the exercise of Options outstanding on the date hereof or
\n (2) upon the conversion of Class B Company Common Stock outstanding on
\n the date hereof or (ii) any other securities in respect of, in lieu of
\n or in substitution for, Company Common Stock outstanding on the date
\n hereof;<\/p>\n
(c) declare, set aside or pay any dividend or any other
\n actual, constructive or deemed distribution (whether in cash,
\n securities or property or any combination thereof) in respect of any
\n class or series of its capital stock or otherwise make any payments to
\n shareholders of the Company in their capacity as such other than
\n between the Company and any wholly-owned Company Subsidiary;<\/p>\n
(d) split, combine, subdivide, reclassify or redeem, purchase
\n or otherwise acquire, or propose to redeem or purchase or otherwise
\n acquire, any shares of its capital stock, or any of its other
\n securities;<\/p>\n
(e) (i) increase the compensation or fringe benefits payable
\n or to become payable to directors, officers or employees except for (w)
\n cash bonuses to non-employee directors in an aggregate amount not to
\n exceed $250,000, (x) increases in salary, wages and benefits of
\n officers or employees of the Company or the Company Subsidiaries in the
\n ordinary course consistent with past practice, (y) increases in salary,
\n wages and benefits granted to officers and employees of the Company or
\n the Company Subsidiaries in conjunction with new hires, promotions or
\n other changes in job status , which increases are in the ordinary
\n course consistent with past practice or (z) increases in salary, wages
\n and benefits to employees of the Company or the Company Subsidiaries
\n pursuant to collective bargaining agreements entered into in the
\n ordinary course of business; (ii) pay any benefit not required by any
\n existing plan or arrangement (including the granting of stock options,
\n stock appreciation rights, shares of restricted stock or performance
\n units), other than (x) the payment of cash bonuses in timing and amount
\n consistent with past practice and cash bonuses in lieu of stock option
\n grants and equity incentive awards in timing and amount consistent with
\n past practice, (y) the payment to five key executive officers of the
\n Company of amounts designed to reimburse them for the incremental
\n income taxes payable (as a result of the inability of any such officer
\n to obtain capital gain treatment) with respect to the conversion into
\n the right to receive the Merger Consideration of restricted shares
\n issued under the 1992 Management Equity Incentive Plan and shares of
\n Class A Company Common Stock issued upon exercise of Options pursuant
\n to Section 1.14(a) and (z) the payment of approximately $14,000,000 to
\n a “rabbi trust” to be established for the exclusive purpose of making
\n premium payments when due on the “split-dollar” life insurance policies
\n on the lives of Leonard and Claire Tow; (iii) grant any severance or
\n termination pay to (except pursuant to existing agreements, plans or
\n policies), or enter into any employment or severance agreement with,
\n any director, officer or other employee of the Company or any of the
\n Company Subsidiaries; or (iv) establish, adopt, enter into or amend any
\n collective bargaining, bonus, profit sharing, thrift, compensation,
\n stock option, restricted stock, pension, retirement, savings, welfare,
\n deferred compensation, employment, termination, severance or other
\n employee benefit plan, agreement, trust, fund, policy or arrangement
\n for the benefit or welfare of any director, officer or current or
\n former employee (an “Employee Benefit Arrangement”), except in each
\n case to the extent required by applicable law or regulation and except
\n as currently is being negotiated with the Communications Workers of
\n America local in Los Angeles, California;<\/p>\n
(f) acquire, sell, lease, transfer, swap or dispose of any
\n assets (other than in the ordinary course of business consistent with
\n past practice) or securities or other interests which are material to
\n the Company and its Subsidiaries, taken as a whole, or enter into any
\n commitment to do any of the foregoing or enter into any material
\n commitment or transaction outside the ordinary course of business other
\n than transactions between any wholly-owned Company Subsidiary and the
\n Company or another wholly-owned Company Subsidiary other than the sale,
\n effective as of the Effective Time, of the shares of capital stock of
\n Citizens Utilities Company owned by the Company to Leonard Tow or his
\n designees at a price equal to the fair market value (based on the
\n closing price of such stock on the date hereof) of such shares as of<\/p>\n
the date hereof as determined by the Company Board;<\/p>\n
(g) (i) incur, assume or prepay any long-term debt or incur or
\n assume any short-term debt, except that the Company and the Company
\n Subsidiaries may incur, assume or prepay debt in the ordinary course of
\n business in the ordinary course consistent with past practice or under
\n existing lines of credit; (ii) assume, guarantee, endorse or otherwise
\n become liable or responsible (whether directly, contingently or
\n otherwise) for the obligations of any other Person or Persons that
\n individually or in the aggregate are material; or (iii) make any loans,
\n advances or capital contributions to, or investments in, any other
\n Person or Persons that individually or in the aggregate are material
\n except for loans, advances, capital contributions or investments
\n between any wholly-owned Subsidiary of the Company and the Company or
\n another wholly-owned Subsidiary of the Company, except in each case as
\n may be necessary or desirable in connection with the financing of
\n Century-TCI California, L.P.; or<\/p>\n
(h) agree to take any of the foregoing actions.<\/p>\n
Section 5.02 Other Transactions.<\/p>\n
(a)……From the date hereof until the termination of this
\nAgreement, the Company will not, and will not authorize or permit any of its
\nSubsidiaries or any of its or the Company Subsidiaries’ directors, officers,
\nemployees, agents or representatives, directly or indirectly, solicit, to
\ninitiate or knowingly encourage any inquiries or the making of any proposal with
\nrespect to any Acquisition Transaction or to provide information to or
\nnegotiate, explore or otherwise engage in discussions with any Person (other
\nthan Parent, Merger Sub or any of their directors, officers, employees, agents
\nand representatives) with respect to any Acquisition Transaction or to enter
\ninto any agreement, arrangement or understanding requiring it to abandon,
\nterminate or fail to consummate the Merger. As of the date of this Agreement,
\nthe Company has discontinued, and has caused the Company Subsidiaries and its
\nand their respective directors, officers, employees, agents and representatives
\nto discontinue, discussions or negotiations with all Persons or groups with whom
\ndiscussions or negotiations previously have been held concerning any proposal
\nwith respect to an Acquisition Transaction. The Company promptly will notify
\nParent if any proposal or offer is received by, or any information is requested
\nfrom, or any discussions or negotiations are sought to be initiated or continued
\nwith, the Company in respect of an Acquisition Transaction.<\/p>\n
(b)……The Company Board will not (i) withdraw or modify, or
\npropose to withdraw or modify, in a manner adverse to Parent, the approval or
\nrecommendation of the Company Board of this Agreement and the Merger or (ii)
\napprove or recommend, or propose to approve or recommend, any Acquisition
\nTransaction other than the Merger. Nothing contained in this Section 5.02(b),
\nhowever, will prohibit the Company Board from complying with Rule 14d-9 and Rule
\n14e-2 promulgated under the Exchange Act with respect to any proposal relating
\nto an Acquisition Transaction.<\/p>\n
(c)……”Acquisition Transaction” means any merger,
\nconsolidation or other business combination, tender or exchange offer,
\nrecapitalization transaction or other similar transaction involving the Company
\nor any Significant Subsidiary of the Company, acquisition of all or any material
\nportion of the assets or capital stock of the Company or the acquisition of all
\nor substantially all of the assets or capital stock of any Significant
\nSubsidiary of the Company. “Acquisition Transaction” does not include the sale
\nof shares of capital stock of Citizens Utilities Company.<\/p>\n
Section 5.03. Affiliates. The Company, prior to the Effective
\nTime, will deliver to Parent a letter identifying all known persons who are, at
\nthe time of the Company Shareholder Meeting, in the Company’s reasonable
\njudgment, “affiliates” of the Company under Rule 145 of the Securities Act. The
\nCompany will furnish such information and documents as Parent reasonably may
\nrequest for the purpose of reviewing such list. The Company will use its
\nreasonable best efforts to obtain a written agreement in customary form from
\neach person who may be so deemed as soon as practicable and, in any event, prior
\nto the Effective Time.<\/p>\n
ARTICLE VI<\/p>\n
COVENANTS OF PARENT, MERGER SUB AND THE SURVIVING CORPORATION<\/p>\n
Section 6.01 Indemnification; Directors’ and Officers’
\nInsurance.<\/p>\n
(a)……Parent and Merger Sub agree that all rights to
\nindemnification existing in favor of each Person (the “Indemnified Parties”) who
\nis at the Effective Time or prior thereto has been an employee, agent, director
\nor officer of the Company and the Company Subsidiaries as provided in their
\nrespective charters, by-laws or resolutions identified in the Company Disclosure
\nSchedule, in an agreement between an Indemnified Party and the Company or any of
\nthe Company Subsidiaries (which agreement is identified in the Company
\nDisclosure Schedule) will survive the Merger and will continue in full force and
\neffect for a period of not less than six years from the Effective Time. In the
\nevent any claim is asserted or made within such six-year period, all rights to
\nindemnification in respect of any such claim will continue until final
\ndisposition thereof.<\/p>\n
(b)……Parent and the Surviving Corporation jointly and
\nseverally agree to indemnify all Indemnified Parties to the fullest extent
\npermitted by applicable law with respect to all acts and omissions arising out
\nof such individuals’ services as officers, directors, employees or agents of the
\nCompany or any Company Subsidiary or as trustees or fiduciaries of any plan for
\nthe benefit of employees, or otherwise on behalf of, the Company or any Company
\nSubsidiary, occurring at or prior to the Effective Time, including the
\ntransactions contemplated by this Agreement. In the event any Indemnified Party
\nis or becomes involved in any capacity in any action, proceeding or
\ninvestigation in connection with any matter occurring at or prior to the
\nEffective Time, Parent will pay as incurred such Indemnified Party’s legal and
\nother expenses (including the cost of any investigation and preparation)<\/p>\n
incurred in connection therewith. Parent will pay all expenses, including
\nattorneys’ fees, that may be incurred by any Indemnified Party in enforcing the
\nindemnity and other obligations provided for in this Section 6.01.<\/p>\n
(c)……Parent and the Surviving Corporation will cause to be
\nmaintained in effect for not less than six years from the Effective Time
\ndirectors’ and officers’ liability insurance covering the directors and officers
\nof the Company similar in scope and coverage to the directors’ and officers’
\nliability insurance maintained by Parent for its directors and officers.<\/p>\n
(d)……The provisions of this Section 6.01 are intended to
\nbe for the benefit of, and shall be enforceable by, each Indemnified Party, his
\nor her heirs and his or her personal representatives and shall be binding on all
\nsuccessors and assigns of Parent and the Surviving Corporation.<\/p>\n
Section 6.02 Employee Benefit Arrangements.<\/p>\n
(a)……From and after the Effective Time, Parent will, and
\nwill cause the Surviving Corporation to, honor in accordance with their
\nrespective terms all Employee Benefit Arrangements to which the Company or any
\nof the Company Subsidiaries is a party.<\/p>\n
(b)……Parent agrees that, for a period of not less than one
\nyear after the Effective Time, it shall, or shall cause the Surviving
\nCorporation to, provide Employee Benefit Arrangements for the benefit of the
\nemployees and former employees of the Company and its Subsidiaries, that in the
\naggregate are not materially less favorable than the Employee Benefit
\nArrangements in effect immediately prior to the Effective Time that are
\napplicable to such employees or former employees, provided, however, that
\nParent, at its sole option, may provide Employee Benefit Arrangements to the
\nemployees and former employees of the Company and the Company Subsidiaries
\nwhich, in the aggregate, are no less favorable than those applicable to
\nsimilarly situated employees of Parent. Parent will take all actions required so
\nthat each employee of the Company or any Company Subsidiary as of the Effective
\nTime will receive credit for eligibility and vesting purposes for his or her
\nservice with the Company or any Company Subsidiary prior to the Effective Time
\nunder any Employee Benefit Arrangements established, maintained, continued or
\nmade available by Parent in which any such employee is eligible to participate.<\/p>\n
(c)……Nothing in this Section 6.02 shall be construed to
\nlimit the ability of Parent to terminate the employment of any employee or to
\nreview Employee Benefit Arrangements from time to time and make such changes as
\nit deems appropriate, subject to the terms of such Employee Benefit
\nArrangements.<\/p>\n
Section 6.03 Listing; Registration. Prior to the Effective
\nTime, Parent will use its best efforts to cause the Parent Common Stock to be
\nissued in the Merger to be approved for listing on the Nasdaq National Market,
\nsubject only to notice of official issuance.<\/p>\n
Section 6.04 Conduct of Parent. From the date hereof until the
\nEffective Time, Parent will not, and will cause the Parent Subsidiaries not to,<\/p>\n
take or agree to take any action that would (i) interfere with the consummation
\nof the transactions contemplated hereby or make such consummation more difficult
\nor materially delay the consummation of such transactions, (ii) make any
\nrepresentation or warranty of Parent or Merger Sub contained in this Agreement
\nuntrue or incorrect as of the date when made or as of the Closing Date or (iii)
\nresult in any of the conditions to Closing in Article VIII not being satisfied.<\/p>\n
Section 6.05. Obligations of Merger Sub. Parent will take all
\naction necessary to cause Merger Sub to perform its obligations under this
\nAgreement and to consummate the Merger on the terms and conditions set forth in
\nthis Agreement.<\/p>\n
ARTICLE VII<\/p>\n
COVENANTS OF Parent, MERGER SUB AND THE COMPANY<\/p>\n
Section 7.01 Reasonable Best Efforts. Subject to the terms and
\nconditions herein provided, each of the parties will use its reasonable best
\nefforts to take, or cause to be taken, all action, and to do, or cause to be
\ndone and to assist and cooperate with the other parties in doing, as promptly as
\npracticable, all things necessary, appropriate or advisable under applicable
\nlaws and regulations or otherwise to ensure that the conditions set forth in
\nArticle VIII are satisfied and to consummate and make effective the transactions
\ncontemplated by this Agreement. If at any time after the Effective Time any
\nfurther action is reasonably necessary or desirable to carry out the purposes of
\nthis Agreement, including the execution of additional instruments, the proper
\nofficers and directors of each party will take all such action.<\/p>\n
Section 7.02. Registration Statement. Parent promptly will
\nprepare and file the Registration Statement with the SEC under the Securities
\nAct, and will use its reasonable best efforts to cause the Registration
\nStatement to be declared effective by the SEC as promptly as practicable. Parent
\npromptly will take any action required to be taken under foreign or state
\nsecurities or Blue Sky laws in connection with the issuance of Parent Common
\nStock in connection with the Merger.<\/p>\n
Section 7.03 Company Shareholder Meeting.<\/p>\n
(a)……Promptly upon the request of Parent but in no event
\nprior to the date the Registration Statement is declared effective, the Company
\nwill take all action necessary in accordance with the NJBCA and its certificate
\nof incorporation and by-laws to call, give notice of and hold a meeting (the<\/p>\n
“Company Shareholder Meeting”) of its shareholders to consider and vote upon the
\napproval and adoption of this Agreement and the Merger and for such other
\npurposes as may be necessary or desirable.<\/p>\n
(b)……Promptly after the date hereof, Parent and the
\nCompany will prepare a proxy statement pertaining to the Merger to be
\ndistributed to the holders of the Company Common Stock, which will constitute
\nthe prospectus included in the Registration Statement (the “Proxy
\nStatement\/Prospectus”). The Company Board will recommend that the shareholders
\nof the Company vote to approve the Merger and adopt this Agreement and approve
\nany other matters to be submitted to shareholders in connection therewith, and
\nthe Company will include such recommendation in the Proxy Statement\/Prospectus.<\/p>\n
(c)……Parent and the Company promptly will notify each
\nother of the receipt of comments from the SEC and of any request by the SEC for
\namendments or supplements to the Registration Statement or the Proxy
\nStatement\/Prospectus or for additional information, and promptly will supply
\neach other with copies of all correspondence between the parties and the SEC
\nwith respect thereto. If, at any time prior to the Company Shareholder Meeting,
\nany event should occur relating to or affecting the Company, Parent or Merger
\nSub, or to their respective Subsidiaries, officers or directors, which event
\nshould be described in an amendment or supplement to the Registration Statement
\nor the Proxy Statement\/Prospectus, the parties promptly will inform each other
\nand cooperate in preparing, filing and having declared effective or clearing
\nwith the SEC and, if required by applicable state securities laws, distributing
\nto the Company’s shareholders such amendment or supplement.<\/p>\n
Section 7.04 Consents. Each of the parties will use its
\nreasonable best efforts to obtain as promptly as practicable all consents
\n(including from any Franchising Authority and in connection with the change in
\ncontrol of the holder of the Franchises of the Company and the Company
\nSubsidiaries), waivers, approvals, authorizations or permits of any Governmental
\nEntity or any other Person required in connection with, and waivers of any
\nViolations that may be caused by, the consummation of the transactions
\ncontemplated by this Agreement.<\/p>\n
Section 7.05 Public Announcements. Neither Parent nor the
\nCompany will issue any press release or make any other public announcement
\nconcerning this Agreement, the Merger or the transactions contemplated hereby
\nwithout the prior consent of the other, except that either party may make such
\npublic disclosure that it believes in good faith to be required by law (in which
\nevent such party will notify the other party prior to making such disclosure).<\/p>\n
Section 7.06 Notification of Certain Matters. Parent and the
\nCompany promptly will notify the other of: (i) the occurrence or non-occurrence
\nof any fact or event that would be reasonably likely to cause any (x)
\nrepresentation or warranty contained in this Agreement to be untrue or
\ninaccurate in any material respect at any time from the date hereof to the
\nEffective Time or (y) material covenant, condition or agreement contained in
\nthis Agreement not to be complied with or satisfied in all material respects;
\nand (ii) any failure of the Company, Parent or Merger Sub to comply with or
\nsatisfy in any material respect any covenant, condition or agreement contained
\nin this Agreement.<\/p>\n
Section 7.07 Antitrust Matters.<\/p>\n
(a)……Parent and the Company promptly will complete all
\ndocuments required to be filed with the Federal Trade Commission and the
\nDepartment of Justice in order to comply with the HSR Act and, together with the
\nPersons who are required to join in such filings, will file the same with the
\nappropriate Governmental Entities. Parent and the Company promptly will furnish
\nall materials thereafter required by any of the Governmental Entities having
\njurisdiction over such filings and will take all reasonable actions and file and
\nuse all reasonable efforts to have declared effective or approved all documents<\/p>\n
and notifications with any such Governmental Entities, as may be required under
\nthe HSR Act for the consummation of the Merger.<\/p>\n
(b)……Parent will use its best efforts to resolve such
\nobjections, if any, as may be asserted with respect to the transactions
\ncontemplated by this Agreement under any antitrust, competition or trade
\nregulatory laws, rules or regulations of any domestic or foreign Governmental
\nEntity (“Antitrust Laws”). If any suit is threatened or instituted challenging
\nthe Merger as violating any Antitrust Law, Parent will take such action
\n(including opposing by all appropriate legal means any claim raised in any such
\nsuit and, if necessary, agreeing to hold separate or to divest any of the
\nbusinesses, product lines or assets of Parent or any of its Affiliates
\ncontrolled by it or of any of its Subsidiaries or Affiliates) as may be required
\n(i) by the applicable Governmental Entity in order to resolve such objections as
\nsuch Governmental Entity may have to such transactions under such Antitrust Law
\nor (ii) by any domestic or foreign court or similar tribunal, in any suit
\nbrought by a private party or governmental authority challenging the Merger as
\nviolating any Antitrust Law, in order to avoid the entry of, or to effect the
\ndissolution of, any injunction, temporary restraining order or other order that
\nhas the effect of preventing the consummation of the Merger. The entry by a
\ncourt, in any suit brought by a private party or Governmental Entity challenging
\nthe Merger as violating any Antitrust Law, of an order or decree permitting the
\nMerger but requiring that any of the businesses or assets of Parent or any
\nParent Subsidiary or Affiliates be divested or held separate by Parent, or that
\nwould otherwise limit Parent’s freedom of action with respect to, or its ability
\nto retain, the Company and the Company Subsidiaries or any portion thereof or
\nany of Parent’s or its Subsidiaries’ or Affiliates’ other assets or businesses,
\nwill not be deemed a failure to satisfy the conditions specified in Section
\n8.01(d).<\/p>\n
(c)……Each party promptly will inform the other of any
\nmaterial communication from the Federal Trade Commission, the Department of
\nJustice, the FCC or any other domestic or foreign Governmental Entity regarding
\nany of the transactions contemplated by this Agreement. If any party or any
\nAffiliate thereof receives a request for additional information or documentary
\nmaterial from any such government or authority with respect to the transactions
\ncontemplated by this Agreement, such party will endeavor in good faith to make,
\nas soon as reasonably practicable and after consultation with the other party,
\nan appropriate response to such request. Parent promptly will advise the Company
\nin respect of any understandings, undertakings or agreements which Parent
\nproposes to make or enter into with the Federal Trade Commission, the Department
\nof Justice, the FCC or any other domestic or foreign Governmental Entity in
\nconnection with the transactions contemplated by this Agreement.<\/p>\n
Section 7.08 Access to Information. From the date hereof until
\nthe Effective Time, Parent and the Company will, and will cause each of their
\nSubsidiaries to: (i) give the other party and its counsel, financial advisors,
\nauditors and other authorized representatives reasonable access during normal
\nbusiness hours to the offices, properties, books and records of such party and
\nits Subsidiaries as the other party reasonably may request, and furnish the
\nother party with such financial and operating data and other information as the
\nother party reasonably may request; and (ii) instruct such parties’ employees,
\ncounsel and financial advisors to cooperate with the other party in their
\ninvestigation of the business of such party and its Subsidiaries.<\/p>\n
Section 7.09 Tax-free Reorganization. Prior to the Effective
\nTime, each party will use its best efforts to cause the Merger to qualify as a
\nreorganization within the meaning of Section 368 of the Code, and will not take
\nany action reasonably likely to cause the Merger not to qualify as such a
\nreorganization.<\/p>\n
Section 7.10 Dissenting Shareholders. Notwithstanding anything
\nin this Agreement to the contrary, but only to the extent required by the NJBCA,
\nshares of the Company Common Stock that are issued and outstanding immediately
\nprior to the Effective Time and are held by holders of shares of Company Common
\nStock who comply with all the provisions of the NJBCA concerning the right of
\nholders of shares of Company Common Stock to dissent from the Merger and require
\nappraisal of their shares (“Dissenting Shareholders”) shall not be converted
\ninto the right to receive the Merger Consideration but shall become the right to
\nreceive such consideration as may be determined to be due such Dissenting
\nShareholder pursuant to the laws of the State of New Jersey; provided, however,
\nthat (i) if any Dissenting Shareholder shall subsequently withdraw his or her
\ndemand for appraisal or fail to establish or perfect or otherwise lose his or
\nher appraisal rights as provided by applicable law, then such Dissenting
\nShareholder or Shareholders, as the case may be, shall forfeit the right to
\nappraisal of such shares of Company Common Stock and such shares of Company
\nCommon Stock shall thereupon be deemed to have been converted into the right to
\nreceive, as of the Effective Time, the Merger Consideration, without interest.
\nThe Company shall give Parent (A) prompt notice of any written demands for
\nappraisal of shares of Company Common Stock, withdrawals of demands for
\nappraisal and any other related instruments received by the Company, and (B) the
\nopportunity to direct all negotiations and proceedings with respect to any such
\ndemands for appraisal. The Company will not, except with the prior written
\nconsent of Parent, voluntarily make any payment with respect to any demands for
\nappraisal or settle, offer or otherwise negotiate to settle any demand.<\/p>\n
Section 7.11 Registration Rights. From and after the Effective
\nTime, Parent agrees to grant the Class B Shareholders and their permitted
\nassignees and transferees registration rights pursuant to a Registration Rights
\nAgreement to be entered into promptly after the date hereof. Parent agrees that
\nthe registration rights shall include two demand registration rights and
\nunlimited piggy-back rights subject to any existing registration rights
\nagreements of Parent at the expense of Parent with standard indemnification
\nprovisions. In addition, the Registration Rights Agreement will provide for the
\nClass B Shareholders to be entitled to proportionate tag-along rights upon any
\nsale or other transfer for value of shares of Parent Common Stock by members of
\nthe Rigas family.<\/p>\n
Section 7.12 Board of Directors. Parent agrees that from and
\nafter the Effective Time, for so long as the Class B Shareholders and their
\npermitted assignees and transferees own at least 10% of the outstanding Common
\nStock of Parent, the Class B Shareholders and their permitted assignees and
\ntransferees shall be entitled to nominate up to three members of Parent’s board
\nof directors.<\/p>\n
Section 7.13 Citizens Joint Venture. At the Effective Time,
\nParent will purchase from Citizens Cable Company or its Affiliates the 50%
\ninterest owned by Citizens Cable Company in Citizens-Century Cable Television
\nVenture for a purchase price to be mutually agreed upon by Parent, the Company
\nand Citizens Cable Company.<\/p>\n
ARTICLE VIII<\/p>\n
CONDITIONS TO THE MERGER<\/p>\n
Section 8.01 Conditions to the Obligations of Each Party. The
\nrespective obligations of the parties to consummate the Merger are subject to
\nthe satisfaction, at or prior to the Effective Time, of each of the following
\nconditions:<\/p>\n
(a)……The shareholders of the Company shall have approved
\nand adopted this Agreement and the Merger pursuant to the requirements of the
\nCompany’s certificate of incorporation and by-laws and the NJBCA.<\/p>\n
(b)……The waiting period (and any extension thereof)
\napplicable to the Merger under the HSR Act shall have expired or been
\nterminated.<\/p>\n
(c)……The Registration Statement shall have been declared
\neffective in accordance with the provisions of the Securities Act and no stop
\norder with respect thereto shall be in effect at the Effective Time.<\/p>\n
(d)……The consummation of the Merger shall not be
\nrestrained, enjoined or prohibited by any order, judgment, decree, injunction or
\nruling of a court of competent jurisdiction or any Governmental Entity entered
\nafter the parties have used their reasonable best efforts to prevent such entry.
\nThere shall not have been any statute, rule or regulation enacted, promulgated
\nor deemed applicable to the Merger by any Governmental Entity that prevents the
\nconsummation of the Merger.<\/p>\n
Section 8.02 Conditions Precedent to the Obligations of Parent
\nand Merger Sub. The obligations of Parent and Merger Sub to consummate the
\nMerger are subject to the satisfaction, at or prior to the Effective Time, of
\neach of the following further conditions:<\/p>\n
(a)……Each of the representations and warranties of the
\nCompany contained in this Agreement shall have been true and correct in all
\nrespects when made and on and as of the Closing Date as if made on and as of
\nsuch date. Parent shall have received a certificate to such effect of an
\nexecutive officer of the Company.<\/p>\n
(b)……The Company shall have performed and complied in all
\nmaterial respects with all agreements and covenants required to be performed and
\ncomplied with by it under this Agreement on or prior to the Closing Date. Parent
\nshall have received a certificate to such effect of an executive officer of the
\nCompany.<\/p>\n
(c)……All consents, waivers, approvals and authorizations
\nrequired to be obtained from any Governmental Authority prior to the
\nconsummation of the transactions contemplated hereby shall have been obtained,
\nexcept where the failure to obtain any such consent, waiver, approval or
\nauthorization would not have a Material Adverse Effect. For purposes of this<\/p>\n
Section 8.02(c), the failure to obtain required consents, waivers, approvals or
\nauthorizations from Franchising Authorities will not be deemed to cause a
\nMaterial Adverse Effect unless the Franchises (excluding Franchises covering the
\nCity of Fairfield, California, Sonoma City, California and City of Rohnert Park,
\nCalifornia) with respect to which such consents, waivers, approvals or
\nauthorizations are not obtained prior to the date referred to in Section 9.01(d)
\ncover more than 50% of the subscribers of the Company and the Company
\nSubsidiaries, taken as a whole (excluding Franchises covering the City of
\nFairfield, California, Sonoma City, California and City of Rohnert Park,
\nCalifornia).<\/p>\n
(d)……Parent shall have received an opinion of Buchanan
\nIngersoll Professional Corporation, dated the Effective Time, to the effect that
\n(i) the Merger should be treated for federal income tax purposes as a
\nreorganization within the meaning of Section 368(a) of the Code and (ii) each of
\nParent, Merger Sub and the Company should be a party to the reorganization
\nwithin the meaning of Section 368(b) of the Code. In rendering such opinion,
\nBuchanan Ingersoll Professional Corporation may receive and rely upon
\nrepresentations contained in certificates of Parent and Merger Sub, the Company
\nand others, in each case in form and substance reasonably acceptable to Buchanan
\nIngersoll Professional Corporation.<\/p>\n
Section 8.03 Conditions Precedent to the Obligations of the
\nCompany. The obligation of the Company to consummate the Merger is subject to
\nthe satisfaction, at or prior to the Effective Time, of each of the following
\nfurther conditions:<\/p>\n
(a)……Each of the representations and warranties of Parent
\nand Merger Sub contained in this Agreement shall have been true and correct in
\nall respects when made and on and as of the Closing Date as if made on and as of
\nsuch date. The Company shall have received a certificate to such effect of an
\nexecutive officer of Parent.<\/p>\n
(b)……Each of Parent and Merger Sub shall have performed
\nand complied in all material respects with all agreements and covenants required
\nto be performed and complied with by it under this Agreement on or prior to the
\nClosing Date. The Company shall have received a certificate to such effect of an
\nexecutive officer of Parent.<\/p>\n
(c)……The shares of Parent Common Stock to be issued
\npursuant to the Merger shall have been approved for listing on the Nasdaq
\nNational Market, subject only to official notice of issuance.<\/p>\n
(d)……The Company shall have received an opinion of Gibson,
\nDunn & Crutcher LLP, dated the Effective Time, to the effect that (i) the Merger
\nshould be treated for federal income tax purposes as a reorganization within the
\nmeaning of Section 368(a) of the Code and (ii) each of Parent, Merger Sub and
\nthe Company should be a party to the reorganization within the meaning of
\nSection 368(b) of the Code. In rendering such opinion, Gibson, Dunn & Crutcher
\nLLP may receive and rely upon representations contained in certificates of
\nParent and Merger Sub, the Company and others, in each case in form and
\nsubstance reasonably acceptable to Gibson, Dunn & Crutcher LLP.<\/p>\n
ARTICLE IX<\/p>\n
TERMINATION<\/p>\n
Section 9.01 Termination. This Agreement may be terminated and
\nthe Merger may be abandoned at any time prior to the Effective Time,
\nnotwithstanding approval thereof by the shareholders of the Company:<\/p>\n
(a) by mutual written agreement of the Company and
\n Parent;<\/p>\n
(b) by either the Company or Parent, if the Merger has not
\n been consummated by June 5, 2000; provided that the right to terminate
\n this Agreement pursuant to this Section 9.01(b) will not be available
\n to any party whose breach of any provision of this Agreement results in
\n the failure of the Merger to be consummated by such time;<\/p>\n
(c) by either the Company or Parent, if there shall be any law
\n or regulation that makes consummation of the Merger illegal or
\n otherwise prohibited or if any judgment, injunction, order or decree
\n enjoining the parties from consummating the Merger is entered and such
\n judgment, injunction, order or decree shall become final and
\n nonappealable;<\/p>\n
(d) by Parent, upon a breach of any representation, warranty,
\n covenant or agreement of the Company, or if any representation or
\n warranty of the Company shall become untrue, in either case such that
\n the conditions set forth in Section 8.02 would be incapable of being
\n satisfied by June 5, 2000; and<\/p>\n
(e) by the Company, upon a breach of any representation,
\n warranty, covenant or agreement of Parent or Merger Sub, or if any
\n representation or warranty of Parent or Merger Sub shall become untrue,
\n in either case such that the conditions set forth in Section 8.03 would
\n be incapable of being satisfied by June 5, 2000.<\/p>\n
The party desiring to terminate this Agreement pursuant to
\nthis Section 9.01 (other than pursuant to Section 9.01(a)) shall give notice of
\nsuch termination to the other party.<\/p>\n
Section 9.02 Effect of Termination. If this Agreement is
\nterminated pursuant to Section 9.01, this Agreement will become void and of no
\neffect with no liability on the part of any party hereto or its respective
\ndirectors, officers or shareholders, except that the agreements contained in
\nSection 9.03 will survive the termination hereof. Nothing herein shall relieve
\nany party from liability for any breach of this Agreement.<\/p>\n
Section 9.03 Fees and Expenses. Whether or not the Merger is
\nconsummated, all costs and expenses incurred in connection with the Merger, this
\nAgreement and the transactions contemplated by this Agreement will be paid by
\nthe party incurring such expenses. Notwithstanding anything in this Agreement to
\nthe contrary, in the event that this Agreement is terminated for any reason
\nother than pursuant to Section 9.01 (a) or (e), then, (i) the Company shall<\/p>\n
reimburse Parent, within five (5) business days after such termination, for
\nParent’s actual costs and expenses in connection with this Agreement and the
\ntransactions contemplated thereby, in an amount not to exceed $10,000,000 and
\n(ii) if (y) the Company enters into an agreement or (z) there is consummated an
\nAcquisition Transaction with a third party, in each case within twenty-four (24)
\nmonths after the date of such termination, the Company shall pay to Parent,
\nwithin five (5) business days after such agreement is entered into or
\ntransaction is consummated, the amount of one hundred million dollars
\n($100,000,000) as compensation for the role that Parent played in creating the
\nopportunity for such Acquisition Transaction by entering into this Agreement.
\nThe rights of Parent and the payments to which Parent is entitled under this
\nSection 9.03 are not exclusive, and are in addition to any other rights or
\nremedies that Parent may have at law or in equity.<\/p>\n
ARTICLE X<\/p>\n
MISCELLANEOUS<\/p>\n
Section 10.01 Notices. All notices, requests and other
\ncommunications to any party hereunder shall be in writing and shall be deemed to
\nhave been duly given when delivered in person, by overnight courier or by
\nfacsimile to the respective parties as follows:<\/p>\n
If to Parent or Merger Sub, to:<\/p>\n
Adelphia Communications Corporation
\n Main at Water Street
\n Coudersport, PA 16915
\n Telephone: 814-274-9830
\n Facsimile: 814-274-6586
\n Attention: Timothy J. Rigas, Executive Vice President<\/p>\n
with a copy to:<\/p>\n
Buchanan Ingersoll Professional Corporation
\n One Oxford Centre, 21st Floor
\n Pittsburgh, PA 15219
\n Telephone: 412-562-8839
\n Facsimile: 412-562-1041
\n Attention: Bruce I. Booken<\/p>\n
If to the Company, to:<\/p>\n
Century Communications Corp.
\n 50 Locust Avenue
\n New Canaan, CT 06840
\n Telephone: 203-972-2000
\n Facsimile: 203-972-2013
\n Attention: Office of the President<\/p>\n
with a copy to:<\/p>\n
Gibson, Dunn & Crutcher LLP
\n 200 Park Avenue
\n New York, NY 10166
\n Telephone: (212) 351-4000
\n Facsimile: (212) 351-4035
\n Attention: Steven R. Finley<\/p>\n
or such other address or facsimile number as such party may specify for the
\npurpose by written notice to the other parties hereto. Each such notice, request
\nor other communication will be effective: (i) if delivered in person, when such
\ndelivery is made at the address specified in this Section 10.01; (ii) if
\ndelivered by overnight courier, the next business day after such delivery is
\nsent to the address specified in this Section 10.01; or (iii) if delivered by
\nfacsimile, when such facsimile is transmitted to the facsimile number specified
\nin this Section 10.01 and the appropriate confirmation is received.<\/p>\n
Section 10.02 Survival of Representations, Warranties and
\nAgreements. The representations and warranties and agreements contained herein
\nand in any certificate or other writing delivered pursuant hereto will not
\nsurvive beyond the Effective Time. This Section 10.02 will not limit any
\ncovenant or agreement of the parties which by its terms contemplates performance
\nafter the Effective Time.<\/p>\n
Section 10.03 Amendment. This Agreement may be amended by the
\nCompany and Parent at any time before or after any approval of this Agreement by
\nthe shareholders of the Company. After any such approval, no amendment may be
\nmade that decreases the Merger Consideration or that adversely affects the
\nrights of the Company’s shareholders hereunder without the approval of such
\nshareholders. This Agreement may not be amended except by an instrument in
\nwriting signed on behalf of all the parties.<\/p>\n
Section 10.04 Extension; Waiver. At any time prior to the
\nEffective Time, the parties may: (i) extend the time for the performance of any
\nof the obligations or other acts of any other party; (ii) waive any inaccuracies
\nin the representations and warranties contained herein by any other party or in
\nany document, certificate or writing delivered pursuant hereto by any other
\nparty; or (iii) waive compliance with any of the agreements of any other party
\nor with any conditions to its own obligations. Any agreement on the part of any
\nparty to any such extension or waiver will be valid only if set forth in an
\ninstrument in writing signed on behalf of such party.<\/p>\n
Section 10.05 Successors and Assigns. The provisions of this
\nAgreement shall be binding upon and inure to the benefit of the parties hereto
\nand their respective successors and permitted assigns. No party may assign,
\ndelegate or otherwise transfer any of its rights or obligations under this
\nAgreement without the prior written consent of the other parties.<\/p>\n
Section 10.06 Governing Law. This Agreement will be construed
\nin accordance with and governed by the law of the State of Delaware applicable
\nto agreements entered into and to be performed wholly within such State.<\/p>\n
Section 10.07 Jurisdiction. Each of the parties: (i) consents
\nto submit itself to the personal jurisdiction of any federal court located in
\nthe State of Delaware or any Delaware state court in the event any dispute
\narises out of this Agreement or the Merger; (ii) agrees that it will not attempt
\nto deny or defeat such personal jurisdiction by motion or other request for
\nleave from any such court; and (iii) agrees that it will not bring any action
\nrelating to this Agreement or the Merger in any court other than a federal or
\nstate court sitting in the State of Delaware.<\/p>\n
Section 10.08 Counterparts; Effectiveness. This Agreement may
\nbe signed in any number of counterparts, each of which shall be an original,
\nwith the same effect as if the signatures thereto and hereto were upon the same
\ninstrument. This Agreement will become effective when each party shall have
\nreceived counterparts hereof signed by all of the other parties.<\/p>\n
Section 10.09 Entire Agreement; No Third-party Beneficiaries.
\nThis Agreement and the other agreements referred to herein or executed
\ncontemporaneously herewith constitute the entire agreement, and supersede all
\nprior agreements and understandings, both written and oral, between the parties
\nwith respect to the subject matter of this Agreement. No representation,
\ninducement, promise, understanding, condition or warranty not set forth herein
\nhas been made or relied upon by any party. This Agreement, other than as
\nprovided in Sections 6.01 and 6.02, is not intended to confer upon any Person
\nother than the parties any rights or remedies.<\/p>\n
Section 10.10 Headings. The headings contained in this
\nAgreement are for reference purposes only and shall not affect in any way the
\nmeaning or interpretation of this Agreement.<\/p>\n
Section 10.11 Severability. In the event that any one or more
\nof the provisions contained in this Agreement shall be held to be invalid,
\nillegal or unenforceable in any respect, such invalidity, illegality or
\nunenforceability shall not affect any other provision of this Agreement.<\/p>\n
Section 10.12 Definitions.<\/p>\n
(a)……When used in this Agreement, the following terms have
\nthe following meanings:<\/p>\n
“Affiliate” as applied to any Person, means any other Person
\ndirectly or indirectly controlling, controlled by, or under common control with,
\nthat Person.<\/p>\n
“Business Day” means any day other than a Saturday, Sunday or
\nany other day on which banks in the State of New York are authorized or
\nobligated to be closed.<\/p>\n
“Code” means the Internal Revenue Code of 1986, as amended.<\/p>\n
“Company Disclosure Schedule” means the Disclosure Schedules
\nattached hereto provided by the Company.<\/p>\n
“Company Subsidiary” means any Subsidiary of the Company.<\/p>\n
“Environmental Law” means any applicable federal, state or
\nlocal law, regulation, order, decree or judicial opinion or other agency
\nrequirement having the force and effect of law and relating to noise, odor,
\nHazardous Substances or the protection of public health or safety or any other
\nenvironmental matter.<\/p>\n
“ERISA Affiliate” means a trade or business affiliated within
\nthe meaning of Sections 414(b), (c) or (m) of the Code.<\/p>\n
“Exchange Agent” means a bank or trust company organized under
\nthe laws of the United States or any state thereof with capital, surplus and
\nundivided profits of at least $500,000,000.<\/p>\n
“Franchise” means a franchise within the meaning of Section
\n602(9) of the Cable Communications Policy Act of 1984 (47 U.S.C. Section 522(9).<\/p>\n
“Franchising Authority” has the meaning such term is given by
\nSection 602(10) of the Cable Communications Policy Act of 1984 (47 U.S.C.
\nSection 522(10).<\/p>\n
“Hazardous Substance” means any toxic or hazardous substance
\nthat is regulated by or under authority of any Environmental Law.<\/p>\n
“GAAP” means generally accepted accounting principles in
\neffect in the United States of America as of the date of the applicable
\ndetermination.<\/p>\n
“Governmental Entity” means any government or subdivision
\nthereof, or any administrative, governmental or regulatory authority, agency,
\ncommission, tribunal or body, domestic, foreign or supranational.<\/p>\n
“Lien” means, with respect to any asset, any mortgage, lien,
\npledge, charge, security interest or encumbrance of any kind in respect of such
\nasset.<\/p>\n
“Material Adverse Effect”, except as otherwise provided in
\nSection 8.02(c), means (i) with respect to the Company, a material adverse
\neffect on the business, assets, operations or financial condition of the Company
\nand its Subsidiaries, taken as a whole, other than any such effect arising out
\nof or resulting from the transactions contemplated by this Agreement or general
\neconomic, financial, competitive or market conditions or from changes in or
\naffecting the cable television or communications industries generally or (ii)
\nwith respect to Parent or Merger Sub, a material adverse effect on the business,
\nassets, operations or financial condition of Parent, Merger Sub and their
\nSubsidiaries, taken as a whole, other than any such effect arising out of or
\nresulting from the transactions contemplated by this Agreement or general
\neconomic, financial, competitive or market conditions or from changes in or
\naffecting the cable television or communications industries generally.<\/p>\n
“Parent Common Stock” means the Class A common stock, par
\nvalue $.01 per share, of Parent.<\/p>\n
“Parent Disclosure Schedule” means the Disclosure Schedules
\nattached hereto provided by Parent<\/p>\n
“Parent Subsidiary” means any Subsidiary of Parent.<\/p>\n
“Person” means an individual, a corporation, a limited
\nliability company, a partnership, an association, a trust or any other entity or
\norganization, including a government or political subdivision or any agency or
\ninstrumentality thereof.<\/p>\n
“SEC” means the Securities and Exchange Commission.<\/p>\n
“Subsidiary” of any Person means any other Person of which
\nsecurities or other ownership interests having ordinary voting power to elect a
\nmajority of the board of directors or other Persons performing similar functions
\nare directly or indirectly owned or controlled by such Person.<\/p>\n
“Tax” and “Taxes” means all federal, state, local, foreign or
\nother taxing authority net income, franchise, sales, use, ad valorem, property,
\npayroll, withholding, excise, severance, transfer, employment, alternative or
\nadd-on minimum, stamp, occupation, premium, environmental or windfall profits
\ntaxes, and other taxes, charges, fees, levies, imposts, customs, duties,
\nlicenses or other assessments, together with any interest and any penalties,
\nadditions to tax or additional amounts imposed by any taxing authority.<\/p>\n
(b) Each of the following additional terms is defined in the
\nSection identified below:<\/p>\n
Acquisition Transaction 5.02(c), 26
\n Agreement Preamble, 4
\n Antitrust Laws 7.07(b), 30
\n Class A Merger Consideration 1.03, 5, 6
\n Class B Voting Agreement Recitals, 4
\n Class A Company Common Stock 1.02(a), 5
\n Class B Company Common Stock 1.02(a), 5
\n Class B Shareholders Recitals, 4
\n Closing 1.01(b), 5 Closing Date 1.01(b), 5
\n Communications Act 3.03, 11
\n Company Preamble, 4
\n Company Board 3.02, 10
\n Company Common Stock 1.02(a), 5
\n Company SEC Reports 3.07, 13
\n Company Securities 3.05(c), 12
\n Company Shareholder Meeting 7.03(a), 29
\n Company Subsidiary Securities 3.06(b), 13
\n Effective Time 1.01(c), 5
\n Employee Benefit Arrangement 5.01(e), 25
\n Employee Plan 3.13(a), 15
\n ERISA 3.13(c), 16
\n Exchange Act 3.03, 11
\n Exchange Agent 1.05, 6
\n FCC 3.03, 11
\n HSR Act 3.03, 11
\n Indemnified Parties 6.01(a), 26
\n Interested Shareholder 4.14, 23
\n Letter of Transmittal 1.05, 6
\n Merger 1.01(a), 4
\n Merger Sub Preamble, 4
\n NJBCA 1.01(a), 5
\n Option 1.14(a), 8
\n Option Plans 1.14(a), 8
\n Parent Preamble, 4
\n Parent SEC Reports 4.07, 21
\n Parent Securities 4.05(c), 20
\n Parent Shareholders Recitals, 4
\n Parent Subsidiary Securities 4.06(b), 21
\n Proxy Statement\/Prospectus 7.03(b), 29
\n Registration Statement 4.09(a), 21
\n Rigas Class B Voting Agreement Recitals, 4
\n Securities Act 3.03, 11
\n Significant Subsidiary of Parent 4.04, 19
\n Significant Subsidiary of the Company 3.04, 11
\n Surviving Corporation 1.01(a), 5
\n Violation 3.04, 12<\/p>\n
IN WITNESS WHEREOF, each of the parties has caused this
\nAgreement to be duly executed by its respective authorized officer as of the day
\nand year first above written.<\/p>\n
ADELPHIA COMMUNICATIONS CORPORATION<\/p>\n
By: \/s\/ Timothy J. Rigas
\n Name: Timothy J. Rigas
\n Title: Executive Vice President<\/p>\n
ADELPHIA ACQUISITION SUBSIDIARY, INC.<\/p>\n
By: \/s\/ Michael J. Rigas
\n Name: Michael J. Rigas
\n Title: Vice President<\/p>\n
CENTURY COMMUNICATIONS CORP.<\/p>\n
By: \/s\/ Scott Schneider
\n Name: Scott Schneider
\n Title: Chief Financial Officer<\/p>\n
{The Registrant agrees to furnish supplementally to the Commission upon request
\na copy of the schedules to this agreement. The schedules contain customary
\ninformation for schedules to agreements of this type.}<\/p>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[6568],"corporate_contracts_industries":[9465],"corporate_contracts_types":[9622,9626],"class_list":["post-42999","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-adelphia-communications-corp","corporate_contracts_industries-media__broadcasting","corporate_contracts_types-planning","corporate_contracts_types-planning__merger"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/42999","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=42999"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=42999"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=42999"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=42999"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}