UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 6)
C-TEC Corporation
(Name of Issuer)
Common Stock Class B Common Stock
$1.00 Par Value $1.00 Par Value
(Title of Classes of Securities)
126504109 126504208
(CUSIP Numbers)
Matthew J. Johnson, Esq.
c/o Peter Kiewit Sons', Inc.
1000 Kiewit Plaza
Omaha, Nebraska 68131
Tel. No.: (402) 536-3613
(Name, Address and Telephone Number of
Person Authorized to Receive Notices
and Communications)
December 28, 1995
(Date of Event which Requires Filing of
this Statement)
If the filing person has previously filed a statement on
Schedule 13G to report the acquisition which
is the subject of this Schedule 13D, and is filing this statement because of
Rule 13d-1(b)(3) or (4), check the following: [ ].
Check the following box if a fee is being paid with this
statement: [ ].
Note: This document is being electronically filed with
the Commission, using the EDGAR system. See Rule 13d-1(a) for other parties
to whom copies are to be sent.
SCHEDULE 13D
______________________________ ________________________________
| | | |
|CUSIP Nos. 126504109 | | Page 2 |
| 126504208 | | |
___________________________________________________________________________
| 1 | NAME OF REPORTING PERSON: |
| | RCN Corporation |
| | S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON |
| | 47-0761384 |
|____|____________________________________________________________________|
| 2 | CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* |
| | _ |
| | (a) |_| |
| | _ |
| | (b) |X| |
| | |
|____|____________________________________________________________________|
| 3 | SEC USE ONLY |
| | |
|____|____________________________________________________________________|
| 4 | SOURCE OF FUNDS* |
| | OO |
|____|____________________________________________________________________|
| 5 | CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED _ |
| | PURSUANT TO ITEMS 2(d) or 2(E) |_| |
| | |
|____|____________________________________________________________________|
| 6 | CITIZENSHIP OR PLACE OF ORGANIZATION |
| | Delaware |
|____|____________________________________________________________________|
| | 7 | SOLE VOTING POWER |
| | | 8,226,262 Common Stock (see Item 5) |
| | | 5,094,223 Class B Common Stock (see Item 5) |
| NUMBER OF |____|_______________________________________________|
| SHARES | 8 | SHARED VOTING POWER |
| BENEFICIALLY | | -0- (see Item 5) |
| OWNED BY |____|_______________________________________________|
| EACH | 9 | SOLE DISPOSITIVE POWER |
| REPORTING | | 8,226,262 Common Stock (see Item 5) |
| PERSON | | 5,094,223 Class B Common Stock (see Item 5) |
| WITH |____|_______________________________________________|
| | 10 | SHARED DISPOSITIVE POWER |
| | | -0- (see Item 5) |
|____________________|____|_______________________________________________|
| 11 | AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON |
| | 8,226,262 Common Stock (see Item 5); |
| | 5,094,223 Class B Common Stock (see Item 5) |
| 12 | CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES _ |
| | CERTAIN SHARES* |_| |
|____|____________________________________________________________________|
| 13 | PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) |
| | 43.1% of Common Stock; 60.9% of Class B Common Stock (see Item 5) |
|____|____________________________________________________________________|
| 14 | TYPE OF REPORTING PERSON* |
| | CO |
*SEE INSTRUCTIONS BEFORE FILLING OUT!
SEC 1746 (9-88)
The following information amends the Schedule 13D dated June
28, 1993, as previously amended (as so amended, the "Schedule 13D").
Unless otherwise indicated, each capitalized term used but not
defined herein shall have the meaning assigned to such term in the Schedule
13D.
Item 3. Source and Amount of Funds or Other Consideration.
The response set forth in Item 3 of the Schedule 13D is hereby
amended and supplemented by the following:
"The consideration used in the acquisition of the Exchange
Shares (as defined in Item 4) by RCN was the Holdings Shares (as defined in
Item 4). The Exchange Shares were newly issued by the Company in connection
with the Exchange Agreement (as defined in Item 4)."
Item 4. Purpose of Transaction.
The response set forth in Item 4 of the Schedule 13D is hereby
amended and supplemented by the following information:
"On December 28, 1995, RCN, RCN Holdings, Inc. ("Holdings"),
the Company and, for certain purposes, KDG, entered into an Exchange Agreement
dated as of that date (the "Exchange Agreement"). The signing of the Exchange
Agreement and the closing of the transactions contemplated thereby took place
simultaneously. Pursuant to the Exchange Agreement, on December 28, 1995,
RCN, Holdings and the Company entered into an Agreement and Plan of
Reorganization dated as of that date (the "Holdings Plan of Reorganization").
Also on December 28, 1995, RCN, KDG, the Company and the Special Committee (as
defined below) entered into a separate letter agreement dated as of that date
(the "Side Letter"). Copies of the Exchange Agreement, the Holdings Plan of
Reorganization and the Side Letter are filed as Exhibits 3, 4 and 5 hereto,
respectively, and are incorporated herein by reference. The descriptions
herein of certain provisions of the Exchange Agreement, the Holdings Plan of
Reorganization and the Side Letter are qualified in their entirety by
reference thereto.
Prior to the closing of the transactions contemplated by the
Exchange Agreement, Holdings was a wholly owned subsidiary of RCN that owned
128,198 shares of Common Stock and 3,582,406 shares of Class B Stock.
Pursuant to the Exchange Agreement, and subject to the terms and conditions of
that agreement, the Company acquired from RCN all of the issued and
outstanding shares of common stock, par value $0.50 per share, of Holdings
(the "Holdings Shares") in exchange for newly issued shares of Common Stock
and Class B Stock (the "Exchange Shares") equal, respectively, to the number
of shares of Common Stock and Class B Stock held by Holdings. Because the
Exchange Shares equalled the number of shares of Common Stock and Class B
Stock, respectively, which RCN formerly held indirectly through Holdings, the
Exchange Agreement effected no increase or decrease in the beneficial
ownership, voting power or other rights of RCN as a shareholder in the
Company. The Exchange Agreement provides that, subject to the terms and
conditions set forth therein, KDG and RCN, jointly and severally, indemnify
C-TEC and any of its officers, directors, employees, stockholders, advisors,
representatives, agents and affiliates (including Holdings but excluding RCN
and KDG), against all liabilities of Holdings as of December 28, 1995, and
against certain other liabilities in connection with the transactions
contemplated by the Exchange Agreement. The Exchange Agreement was approved
by a special committee of the Board of Directors of the Company (the "Special
Committee"), which committee was composed of directors unaffiliated with RCN
and KDG.
Pursuant to the Holdings Plan of Reorganization, the Company
agreed to dissolve Holdings as soon as practicable but in no event later than
January 11, 1996. Upon such dissolution, the shares of Common Stock and Class
B Stock owned by Holdings will be distributed to the Company.
The Side Letter sets forth certain agreements of KDG and RCN in
connection with the evaluation by the board of directors of the Company of
certain strategic alternatives for its various business units. One of the
strategic alternatives under evaluation would involve the spin-off by the
Company of certain of its businesses to its shareholders and a merger of
certain of its remaining businesses with an undetermined third party
(collectively, or any similar transaction, being referred to as the "Possible
Transaction"). Pursuant to the Side Letter, RCN agreed, subject to the terms
and conditions set forth therein, to reduce its direct and indirect interest
in the Company so that neither KDG nor any of its affiliates will be treated
as holding a "50 percent or greater interest" in the Company within the
meaning of Section 355(d) of the Internal Revenue Code, through a method and
at a time reasonably selected by RCN, if the board of directors of the Company
approves a merger or similar agreement in connection with the Possible
Transaction, but only if such a reduction in RCN's percentage interest in the
Company is reasonably required by the Special Committee to accomplish a related
spin-off of certain of the Company's businesses on a tax-free basis to the
Company and its shareholders. If RCN so reduces its percentage interest in
C-TEC, KDG and RCN will maintain such reduced interest in the Company until the
Possible Transaction is consummated, is abandoned or is no longer capable of
consummation. KDG also agreed that, if the Possible Transaction does not
occur, KDG will reimburse the Company for the reasonable fees and expenses
incurred by the Company with respect to the Special Committee.
The purpose of RCN entering into the Exchange Agreement, the
Holdings Plan of Reorganization and the Side Letter was to achieve greater
flexibility if RCN should decide in the future to liquidate all or a portion
of its interest in the Company in a manner described earlier in this Item 4 or
otherwise."
Item 5. Interest in Securities of the Company.
The response set forth in Item 5 of the Schedule 13D is hereby
amended and restated in its entirety as follows:
"(a) and (b) RCN and, for purposes of Section 13(d) of the
Exchange Act, the Kiewit Companies, beneficially own, 8,226,262 shares of
Common Stock, representing 43.1% of the Common Stock outstanding on November
30, 1995, and 5,094,223 shares of Class B Stock, representing 60.9% of the
Class B Stock outstanding on November 30, 1995 (collectively, the "Company
Shares"). Because the Common Stock has one vote per share and the Class B
Stock has 15 votes per share, the Company Shares are entitled to cast
84,639,607 (59%) of the 144,482,409 total votes of all outstanding shares of
Common Stock and Class B Stock on November 30, 1995.
Each share of Class B Stock is convertible into one share of
Common Stock. If all 5,094,223 shares of Class B Stock owned by RCN (but no
other shares of Class B Stock) were converted into Common Stock, the Company
Shares would comprise 13,320,485 shares of Common Stock representing 55% of
the 24,179,587 shares of Common Stock then outstanding.
RCN owns, and has the sole power to vote or to direct the vote,
and to dispose or direct the disposition of, the Company Shares. Through
their direct and indirect ownership of RCN, KDG and PKS may, for purposes of
Rule 13d-3 under the Exchange Act, be deemed to beneficially own the C-TEC
Shares.
David McCourt is the beneficial owner of 6259.3498 shares of
Common Stock and 6,000 shares of Class B Stock representing less than .1% of
the 19,085,364 shares of Common Stock and 8,359,803 shares of Class B Stock,
respectively, outstanding. Mr. McCourt has the sole power to vote or to
direct the vote, and to dispose or direct the disposition of these shares.
Mr. McCourt disclaims beneficial ownership of 225 shares of Common Stock
beneficially owned by his wife.
Except as set forth in this Item 5(a) and (b), none of the
Kiewit Companies, nor, to the best of knowledge of the Kiewit Companies, any
persons names in Schedule A or B hereto owns beneficially any shares of Common
Stock or Class B Stock.
(c) Other than RCN's acquisition of the Exchange Shares (as
described in Item 4), no transactions in the Common Stock or the Class B Stock
have been effected during the past 60 days by the Kiewit Companies or, to the
best knowledge of the Kiewit Companies, by any of the persons named in
Schedule A or B hereto.(1)
(d) Inapplicable.
(e) Inapplicable."
Item 6. Contracts, Arrangements, Understandings or Relationships with
Respect to Securities of the Company.
The response set forth in Item 6 of the Schedule 13D is hereby
amended and restated in its entirety as follows:
"Except for the Stock Purchase Agreement, the Exchange
Agreement, the Holdings Plan of Reorganization and the Side Letter, to the
best knowledge of the Kiewit Companies, there are no contracts, arrangements,
(1) Excludes purchases of Common Stock by the Plan Administrator of the C-TEC
Employee Stock Purchase Place on behalf of David McCourt.
understandings or relationships (legal or otherwise) among the persons named
in Item 2 or between such persons and any other person, with respect to any
securities of the Company, including, but not limited to, transfer or voting
of any of the securities, finder's fees, joint ventures, loan or option
arrangements, puts or calls, guarantees of profits, division of profits or
loss, or the giving or withholding of proxies."
Item 7. Material to be Filed as Exhibits.
The response set forth in Item 7 of the Schedule 13D is hereby
amended and supplemented by the following:
"Exhibit 3: Exchange Agreement dated as of December 28, 1995
among RCN, RCN Holdings, Inc., the Company and, for certain purposes, KDG.
Exhibit 4: Agreement and Plan of Reorganization dated as of
December 28, 1995 among RCN, RCN Holdings, Inc. and the Company.
Exhibit 5: Side letter dated as of December 28, 1995 among
RCN, RCN Holdings, Inc., the Company and the Special Committee."
SIGNATURES
After reasonable inquiry and to the best knowledge and belief
of the undersigned, the undersigned certifies that the information set forth
in this statement is true, complete and correct.
Date: January 3, 1996
RCN CORPORATION
By: /s/ Matthew J. Johnson
_________________________
Name: Matthew J. Johnson
Title: Vice President
Schedule B is amended to read in its entirety as follows:
Schedule B
DIRECTORS AND EXECUTIVE OFFICERS OF PETER KIEWIT SONS', INC.
The name, business address, citizenship, title and present
principal occupation or employment of each of the directors and executive
officers of Peter Kiewit Sons', Inc. ("PKS") are set forth below.
Principal
Name and Business Occupation
Office Held Address Citizenship or Employment
- ------------------- ------------------- ----------- --------------
Walter Scott, Jr. 1000 Kiewit Plaza USA President, PKS
President, Director Omaha, NE 68131
William L. Grewcock 1000 Kiewit Plaza USA Vice Chairman,
Vice Chairman, Omaha, NE 68131 PKS
Director
Robert E. Julian 1000 Kiewit Plaza USA Executive Vice
Exec. Vice Pres., Omaha, NE 68131 President, PKS
Director
Kenneth E. Stinson 1000 Kiewit Plaza USA President,
Exec. Vice Pres., Omaha, NE 68131 Kiewit
Director Construction
Group Inc.
Richard R. Jaros 1000 Kiewit Plaza USA Executive Vice
Exec. Vice Pres., Omaha, NE 68131 President, PKS
Director
Richard Geary 215 V Street USA Executive Vice
Director Vancouver, WA 98661 President,
Kiewit
Construction
Group Inc.
Leonard W. Kearney 1000 Kiewit Plaza USA President,
Director Omaha, NE 68131 Kiewit
Construction
Co.
James Q. Crowe 3555 Farnam Street USA CEO, MFS
Director Omaha, NE 68131 Communications
Company, Inc.
George B. Toll, Jr. 10704 Shoemaker USA Executive Vice
Director Ave. President,
Santa Fe Springs, Kiewit
CA 90670 Construction
Group Inc.
Peter Kiewit, Jr. 2600 N. Central USA Attorney
Director Ave.
Phoenix, AZ 85004
Robert B. Daugherty Guarantee Center USA Chairman,
Director Suite 225 Valmont
Omaha, NE 68114 Industries
Inc.
Charles M. Harper 1 Central Park USA Chairman, RJR
Director Plaza Nabisco
Omaha, NE 68102 Holdings, Inc.
Richard W. Colf 215 V Street USA Senior Vice
Vancouver, WA 98661 President,
Kiewit Pacific
Co.
Bruce E. Grewcock 1000 Kiewit Plaza USA President,
Omaha, NE 68131 Kiewit Mining
Group Inc.
Tait P. Johnson 1000 Kiewit Plaza USA President,
Omaha, NE 68131 Gilbert
Southern Corp.
EXECUTION COPY
EXCHANGE AGREEMENT
AMONG
RCN CORPORATION,
RCN HOLDINGS, INC.
AND
C-TEC CORPORATION
DATED AS OF DECEMBER 28, 1995
==========================
TABLE OF CONTENTS
-----------------
Page
----
ARTICLE I. THE EXCHANGE
SECTION 1.1. Authorization..................................................1
SECTION 1.2. Agreement to Exchange..........................................1
SECTION 1.3. Closing........................................................2
ARTICLE II. REPRESENTATIONS AND WARRANTIES OF RCN AND HOLDINGS
SECTION 2.1. Corporate Organization.........................................2
SECTION 2.2. Capitalization; Title to the Shares............................2
SECTION 2.3. Subsidiaries and Equity Investments............................3
SECTION 2.4. Authorization; Validity of Agreement...........................3
SECTION 2.5. No Conflict or Violation.......................................3
SECTION 2.6. Consents and Approvals.........................................4
SECTION 2.7. Business of Holdings; Balance Sheet; Absence of Undisclosed
Liabilities....................................................4
SECTION 2.8. Investment Intent and Knowledge................................4
ARTICLE III. REPRESENTATIONS AND WARRANTIES OF C-TEC
SECTION 3.1. Corporate Organization.........................................5
SECTION 3.2. Capitalization.................................................5
SECTION 3.3. Authorization; Validity of Agreement...........................5
SECTION 3.4. No Conflict or Violation.......................................6
SECTION 3.5. Consents and Approvals.........................................6
ARTICLE IV. COVENANTS AND ADDITIONAL AGREEMENTS
SECTION 4.1. Further Assurances.............................................6
SECTION 4.2. Best Efforts...................................................6
SECTION 4.3. Notice of Breach...............................................6
ARTICLE V. CONDITIONS TO OBLIGATIONS OF RCN AND HOLDINGS
SECTION 5.1. Representations and Warranties of C-TEC........................7
SECTION 5.2. Performance of C-TEC's Obligations.............................7
SECTION 5.3. No Violation of Orders.........................................7
SECTION 5.4. Other Closing Documents........................................7
SECTION 5.5. Legal Matters..................................................7
SECTION 5.6. Agreement and Plan of Reorganization...........................8
ARTICLE VI. CONDITIONS TO OBLIGATIONS OF C-TEC
SECTION 6.1. Representations and Warranties of RCN and Holdings.............8
SECTION 6.2. Performance of RCN's and Holdings' Obligations.................8
SECTION 6.3. No Violation of Orders.........................................8
SECTION 6.4. Other Closing Documents........................................8
SECTION 6.5. Legal Matters..................................................9
SECTION 6.6. Resignation of Holdings' Officers and Directors................9
ARTICLE VII. TERMINATION
SECTION 7.1. Termination....................................................9
SECTION 7.2. Procedure; Effect of Termination...............................9
ARTICLE VIII. INDEMNIFICATION
SECTION 8.1. Coverage......................................................10
SECTION 8.2. Procedures....................................................11
SECTION 8.3. Gross-Up......................................................12
ARTICLE IX. MISCELLANEOUS PROVISIONS
SECTION 9.1. Survival of Provisions........................................12
SECTION 9.2. Successors and Assigns; No Third-Party Beneficiaries..........13
SECTION 9.3. Fees and Expenses.............................................13
SECTION 9.4. Notices.......................................................13
SECTION 9.5. Entire Agreement..............................................14
SECTION 9.6. Waivers and Amendments........................................14
SECTION 9.7. Severability..................................................15
SECTION 9.8. Titles and Headings...........................................15
SECTION 9.9. Counterparts..................................................15
SECTION 9.10. Enforcement of the Agreement..................................15
SECTION 9.11. Governing Law.................................................15
EXCHANGE AGREEMENT
THIS EXCHANGE AGREEMENT (the "Agreement"), dated as of December 28,
1995, by and among RCN Corporation, a Delaware corporation ("RCN"), RCN
Holdings, Inc., a Pennsylvania corporation ("Holdings"), C-TEC Corporation,
a Pennsylvania corporation ("C-TEC") and, for purposes of Sections 2.1,
2.4, 2.5, 2.6, 8.1 and 8.2 only, Kiewit Diversified Group Inc., a Delaware
corporation ("KDG").
W I T N E S S E T H:
WHEREAS, RCN owns all of the issued and outstanding shares of
common stock (the "Holdings Shares") of Holdings and Holdings owns shares of
the issued and outstanding shares of common stock, par value $1.00 per share,
of C-TEC ("C-TEC Common Shares") and shares of the issued and outstanding
shares of Class B common stock, par value $1.00 per share, of C-TEC ("C-TEC
Class B Shares" and together with C-TEC Common Shares, "C-TEC Shares"); and
WHEREAS, each of the parties desires that RCN transfer to C-TEC the Holdings
Shares in exchange for newly issued C-TEC Shares consisting of 128,198 C-TEC
Common Shares and 3,582,406 C-TEC Class B Shares (such C-TEC Common Shares and
C-TEC Class B Shares, the "Exchange Shares"), such that immediately after
giving effect to such exchange Holdings will be a wholly owned subsidiary of
C-TEC and RCN will own the Exchange Shares;
NOW, THEREFORE, in consideration of the mutual terms, conditions and other
agreements set forth herein, the parties hereto hereby agree as follows:
ARTICLE I.
THE EXCHANGE
SECTION 1.1. Authorization. C-TEC is authorized to issue (i) 128,198
C-TEC Common Shares and 3,582,406 C-TEC Class B Shares (such C-TEC Class B
Shares, the "Class B Exchange Shares") for the purpose of consummating the
transactions contemplated by this Agreement and (ii) upon conversion of the
Class B Exchange Shares in accordance with the Amended and Restated
Articles of Incorporation (the "Articles of Incorporation") of C-TEC,
3,582,406 C-TEC Common Shares (the "Class B Conversion Shares"). The
terms, limitations and relative rights and preferences of the C-TEC Common
Shares and the C-TEC Class B Shares are set forth in the Articles of
Incorporation of C-TEC.
SECTION 1.2. Agreement to Exchange. On the Closing Date (as defined below) and
upon the terms and subject to the conditions set forth in this Agreement, RCN
shall assign, transfer, convey and deliver the Holdings Shares to C-TEC, and
C-TEC shall accept the Holdings Shares, in exchange for the issuance by C-TEC
to RCN of the Exchange Shares (the "Exchange").
SECTION 1.3. Closing. The closing of the Exchange (the "Closing") shall take
place at 10:00 A.M., New York City time, on December 28, 1995, or at such
other time and date as the parties hereto shall agree in writing (the "Closing
Date"), at the offices of C-TEC, 105 Carnegie Center, Princeton, New Jersey,
or at such other place as the parties hereto shall agree in writing. At the
Closing, RCN shall deliver to C-TEC or its designees stock certificates
representing the Holdings Shares, duly endorsed in blank for transfer or
accompanied by appropriate stock powers duly executed in blank, and any other
documents that are necessary to transfer to C-TEC good title to the Holdings
Shares with all taxes, direct or indirect, attributable to the transfer of
such Holdings Shares paid or provided for. At the Closing, RCN shall cause
Holdings to deliver to C-TEC or its designees, on behalf of Holdings, stock
certificates representing the C-TEC Shares owned by Holdings. In exchange for
the Holdings Shares, C-TEC shall deliver to RCN, duly registered in its name,
duly executed stock certificates evidencing the Exchange Shares. RCN
acknowledges that the Exchange Shares and the Class B Conversion Shares will
be "restricted securities" within the meaning of Rule 144 under the Securities
Act of 1933, as amended, and that the certificates in respect of the Exchange
Shares and the Class B Conversion Shares will bear an appropriate legend.
ARTICLE II.
REPRESENTATIONS AND WARRANTIES OF RCN AND HOLDINGS
As of the date hereof and the Closing Date, RCN and Holdings, jointly and
severally, hereby represent, warrant and agree as follows, and KDG hereby
represents and warrants with respect to Sections 2.1, 2.4, 2.5 and 2.6 as
follows :
SECTION 2.1. Corporate Organization. RCN, Holdings and KDG are
corporations duly organized, validly existing and in good standing under
the laws of the State of Delaware and the Commonwealth of Pennsylvania, as
applicable, and have all requisite corporate power and authority to own
their properties and assets and to conduct their businesses as now
conducted. Copies of the certificate or articles of incorporation and by-
laws of RCN and Holdings, with all amendments thereto to the date hereof,
have been furnished to C-TEC or its representatives, and such copies are
accurate and complete as of the date hereof. Holdings has paid all
franchise taxes due to or assessable by the State of Delaware.
SECTION 2.2. Capitalization; Title to the Shares. The authorized capital
stock of Holdings consists of 3000 shares of common stock, par value $.50
per share, of which 1810.10 shares are issued and outstanding. The
Holdings Shares have been duly authorized and validly issued, and are fully
paid and nonassessable and no personal liability attaches to the ownership
thereof. The Holdings Shares represent all of the issued and outstanding
shares of capital stock of Holdings, and except as specifically provided in
this Agreement, there are no outstanding options, warrants, agreements,
conversion rights, preemptive rights or other rights to subscribe for,
purchase or otherwise acquire the Holdings Shares or any unissued or
treasury shares of capital stock of Holdings. RCN has valid and marketable
title to the 1810.10 Holdings Shares owned by it, free and clear of any
liens, claims, charges, security interests or other legal or equitable
encumbrances, limitations or restrictions. There are no outstanding
options, warrants, agreements, conversion rights, preemptive rights or
other rights to subscribe for, purchase or otherwise acquire the 128,198 C-
TEC Common Shares or the 3,582,406 C-TEC Class B Shares owned by Holdings.
Holdings has valid and marketable title to the C-TEC Shares owned by it,
free and clear of any liens, claims, charges, security interests or other
legal or equitable encumbrances, limitations or restrictions.
SECTION 2.3. Subsidiaries and Equity Investments. Except for the 128,198 C-TEC
Common Shares and the 3,582,406 C-TEC Class B Shares held by Holdings,
Holdings has no subsidiaries and no interests or investments in any
partnership, trust or other entity or organization.
SECTION 2.4. Authorization; Validity of Agreement. Each of RCN, Holdings
and KDG has the corporate power and authority to enter into this Agreement
and to carry out its obligations hereunder. The execution, delivery and
performance of this Agreement have been duly authorized and approved by all
necessary corporate action by the Board of Directors and stockholders of
each of RCN, Holdings and KDG, and no other corporate proceedings on the
part of any of RCN, Holdings or KDG are necessary to authorize and approve
such execution, delivery and performance. This Agreement has been duly
executed by each of RCN, Holdings and KDG and constitutes the valid and
binding obligation of each of RCN, Holdings and KDG, enforceable against
each in accordance with its terms, except that such enforcement may be
subject to bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect relating to creditors' rights and
general principles of equity.
SECTION 2.5. No Conflict or Violation. (a) The execution, delivery and
performance by Holdings of this Agreement does not and will not violate or
conflict with any provision of the charter documents or by-laws of Holdings
and does not and will not violate any provision of law, or any order, judgment
or decree of any court or other governmental or regulatory authority, nor
violate any contract, lease, loan agreement, mortgage, security agreement,
trust indenture or other agreement or instrument to which Holdings is a party
or by which Holdings is bound or to which its properties or assets is subject,
nor will result in the creation or imposition of any lien, charge or
encumbrance of any kind whatsoever upon any of the properties or assets of
Holdings.
(b) The execution, delivery and performance by RCN and KDG of this Agreement
does not and will not violate or conflict with any provision of the charter
documents or by-laws of RCN or KDG, and does not and will not violate any
provision of law, or any order, judgment or decree of any court or other
governmental or regulatory authority, nor violate any contract, lease, loan
agreement, mortgage, security agreement, trust indenture or other agreement or
instrument to which RCN or KDG is a party or by which any of them is bound or
to which any of their properties or assets is subject.
SECTION 2.6. Consents and Approvals. The execution and delivery by each
of RCN, Holdings and KDG of this Agreement, the performance of each of RCN,
Holdings and KDG of their respective obligations hereunder and the
consummation by each of RCN, Holdings and KDG of the transactions
contemplated hereby do not require any of RCN, Holdings and KDG to obtain
any consent, approval or action of, or make any filing with or give any
notice to, any corporation, person or firm or any public, governmental or
judicial authority, except for filings as may be required to comply with
the Securities Exchange Act of 1934, as amended (the "Exchange Act").
SECTION 2.7. Business of Holdings; Balance Sheet; Absence of Undisclosed
Liabilities. Since October 29, 1993, Holdings has not operated or conducted
any business. RCN has furnished to C-TEC the balance sheet of Holdings (the
"Holdings Balance Sheet") at September 30, 1995 and the balance sheet of KDG
at September 30, 1995 (the "KDG Balance Sheet"). The Holdings Balance Sheet
was prepared in accordance with generally accepted accounting principles
("GAAP") applied on a consistent basis and presents fairly the financial
condition of Holdings as of September 30, 1995 and the KDG Balance Sheet was
prepared in accordance with GAAP applied on a consistent basis and presents
fairly the financial condition of KDG as of September 30, 1995. Holdings has
no liabilities (absolute or contingent) other than liabilities which are
reflected or reserved against on the Holdings Balance Sheet or which are not
required to be reflected or reserved against on the Holdings Balance Sheet
in accordance with GAAP.
SECTION 2.8. Investment Intent and Knowledge. RCN is acquiring the Exchange
Shares for its own account for investment and not with a view towards the
distribution thereof, nor with any present intention of distributing the
Exchange Shares (or the Class B Conversion Shares). RCN has such knowledge
and experience in financial and business matters that it is capable of
evaluating the merits and risks of its investment in C-TEC as contemplated by
this Agreement, and is able to bear the economic risk of such investment for
an indefinite period of time. RCN acknowledges that it is an affiliate of
C-TEC and is fully familiar with the business, operations, financial condition
and prospects of C-TEC.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF C-TEC
As of the date hereof and the Closing Date, C-TEC hereby represents, warrants
and agrees as follows:
SECTION 3.1. Corporate Organization. C-TEC is a corporation duly organized,
validly existing and in good standing under the laws of the Commonwealth of
Pennsylvania and has all requisite corporate power and authority to own its
properties and assets and to conduct its business as now conducted. Copies of
the Articles of Incorporation and the by-laws of C-TEC, with all amendments
thereto to the date hereof, have been furnished to RCN or its representatives,
and such copies are accurate and complete as of the date hereof.
SECTION 3.2. Capitalization. The authorized capital stock of C-TEC
consists of 85,000,000 C-TEC Common Shares, 15,000,000 C-TEC Class B Shares
and 25,000,000 shares of preferred stock, no par value per share ("C-TEC
Preferred Shares"), of which 19,085,364 C-TEC Common Shares, 8,359,803
C-TEC Class B Shares and 5,200,000 C-TEC Preferred Shares are issued and
outstanding at November 30, 1995. All of the outstanding shares of capital
stock of C-TEC have been duly and validly issued and are fully paid and
non-assessable. Upon issuance, exchange and delivery as contemplated by
this Agreement, the Exchange Shares will be duly authorized, validly
issued, fully paid and non-assessable shares of C-TEC, free of all
preemptive or similar rights. Upon their issuance in accordance with the
terms of the C-TEC Class B Shares, the Class B Conversion Shares will be
duly authorized, validly issued, fully paid and non-assessable C-TEC Common
Shares, free of all preemptive or similar rights.
SECTION 3.3. Authorization; Validity of Agreement. C-TEC has the
corporate power and authority to enter into this Agreement and to carry out
its obligations hereunder. The execution, delivery and performance of this
Agreement and the issuance of the Exchange Shares (and the Class B
Conversion Shares) have been duly authorized and approved by all necessary
corporate action by the Board of Directors and stockholders of C-TEC, and
no other corporate proceedings on the part of C-TEC are necessary to
authorize such execution, delivery and performance. This Agreement has
been duly executed by C-TEC and constitutes the valid and binding
obligation of C-TEC enforceable against C-TEC in accordance with its terms,
except that such enforcement may be subject to bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to creditors' rights and general principles of equity.
SECTION 3.4. No Conflict or Violation. The execution, delivery and
performance by C-TEC of this Agreement and the issuance of the Exchange
Shares (and the Class B Conversion Shares) does not and will not violate or
conflict with any provision of its Articles of Incorporation or by-laws and
does not and will not violate any provision of law, or any order, judgment
or decree of any court or other governmental or regulatory authority, nor
violate any contract, lease, loan agreement, mortgage, security agreement,
trust indenture or other agreement or instrument to which C-TEC is a party
or by which it is bound or to which any of its properties or assets is
subject, where such violations, breaches or defaults in the aggregate would
have a material adverse effect on the transactions contemplated hereby.
SECTION 3.5. Consents and Approvals. The execution and delivery by C-TEC
of this Agreement, the performance of C-TEC of its obligations hereunder
and the consummation by C-TEC of the transactions contemplated hereby do
not require C-TEC to obtain any consent, approval or action of, or make any
filing with or give any notice to, any corporation, person or firm or any
public, governmental or judicial authority, except for filings as may be
required to comply with the Exchange Act and with The Nasdaq Stock Market,
Inc.
ARTICLE IV.
COVENANTS AND ADDITIONAL AGREEMENTS
SECTION 4.1. Further Assurances. Upon the request of either C-TEC or RCN
at any time after the Closing Date, RCN, Holdings or C-TEC, as applicable,
will forthwith execute and deliver such further instruments of assignment,
transfer, conveyance, endorsement, direction or authorization and other
documents as the requesting party or its counsel may reasonably request in
order to effectuate the purposes of this Agreement.
SECTION 4.2. Best Efforts. Upon the terms and subject to the conditions
of this Agreement, each of the parties hereto will use its best efforts to
take, or cause to be taken, all action, and to do, or cause to be done, all
things necessary, proper or advisable consistent with applicable law to
consummate and make effective in the most expeditious manner practicable
the transactions contemplated hereby.
SECTION 4.3. Notice of Breach. Through the Closing Date, each of the parties
hereto shall promptly give to the other parties written notice with
particularity upon having knowledge of any matter that may constitute a breach
of any representation, warranty, agreement or covenant contained in this
Agreement.
ARTICLE V.
CONDITIONS TO OBLIGATIONS OF RCN AND HOLDINGS
The obligations of RCN and Holdings to consummate the transactions
contemplated by this Agreement are subject to the fulfillment, at or before
the Closing Date, of the following conditions, any one or more of which may be
waived by RCN in its sole discretion:
SECTION 5.1. Representations and Warranties of C-TEC. All representations and
warranties made by C-TEC in this Agreement shall be true and correct in all
material respects on and as of the Closing Date as if again made by C-TEC on
and as of such date, and, if the Closing Date is other than the date hereof,
RCN shall have received a certificate dated the Closing Date and signed by
C-TEC to that effect.
SECTION 5.2. Performance of C-TEC's Obligations. C-TEC shall have
performed in all material respects all obligations required under this
Agreement to be performed by it on or before the Closing Date, and, if the
Closing Date is other than the date hereof, RCN shall have received a
certificate dated the Closing Date and signed by C-TEC to that effect.
SECTION 5.3. No Violation of Orders. No preliminary or permanent
injunction or other order issued by any court or governmental or regulatory
authority, domestic or foreign, nor any statute, rule, regulation, decree
or executive order promulgated or enacted by any government or governmental
or regulatory authority, which declares this Agreement invalid or
unenforceable in any respect or which prevents the consummation of the
transactions contemplated hereby, shall be in effect; and no action or
proceeding before any court or governmental or regulatory authority,
domestic or foreign, shall have been instituted or threatened by any
government or governmental or regulatory authority, domestic or foreign, or
by any other person or entity, which seeks to prevent or delay the
consummation of the transactions contemplated by this Agreement or which
challenges the validity or enforceability of this Agreement.
SECTION 5.4. Other Closing Documents. RCN shall have received such other duly
executed certificates, instruments and documents in confirmation of the
representations and warranties of C-TEC or in furtherance of the transactions
contemplated by this Agreement as RCN or its counsel may reasonably request.
SECTION 5.5. Legal Matters. All certificates, instruments and other documents
required to be executed or delivered by or on behalf of C-TEC under the
provisions of this Agreement, and all other actions and proceedings required
to be taken by or on behalf of C-TEC in furtherance of the transactions
contemplated hereby, shall be reasonably satisfactory in form and substance to
counsel for RCN.
SECTION 5.6. Agreement and Plan of Reorganization. C-TEC shall have
executed and delivered to RCN the Agreement and Plan of Reorganization,
substantially in the form of Exhibit A hereto.
ARTICLE VI.
CONDITIONS TO OBLIGATIONS OF C-TEC
The obligations of C-TEC to consummate the transactions contemplated by this
Agreement are subject to the fulfillment, at or before the Closing Date, of
the following conditions, any one or more of which may be waived by C-TEC in
its sole discretion:
SECTION 6.1. Representations and Warranties of RCN and Holdings. All
representations and warranties made by RCN and Holdings in this Agreement
shall be true and correct in all material respects on and as of the Closing
Date as if again made by RCN and Holdings on and as of such date, and, if the
Closing Date is other than the date hereof, C-TEC shall have received a
certificate dated the Closing Date and signed by the Chairman of the Board,
the President or any Vice President of RCN and Holdings to that effect.
SECTION 6.2. Performance of RCN's and Holdings' Obligations. Each of RCN and
Holdings shall have performed in all material respects all obligations
required under this Agreement to be performed by it on or before the Closing
Date, and, if the Closing Date is other than the date hereof, C-TEC shall have
received a certificate dated the Closing Date and signed by the Chairman of
the Board, the President or any Vice President of RCN and Holdings to that
effect.
SECTION 6.3. No Violation of Orders. No preliminary or permanent
injunction or other order issued by any court or governmental or regulatory
authority, domestic or foreign, nor any statute, rule, regulation, decree
or executive order promulgated or enacted by any government or governmental
or regulatory authority, domestic or foreign, that declares this Agreement
invalid or unenforceable in any respect or which prevents the consummation
of the transactions contemplated hereby shall be in effect; and no action
or proceeding before any court or governmental or regulatory authority,
domestic or foreign, shall have been instituted or threatened by any
government or governmental or regulatory authority, domestic or foreign, or
by any other person or entity, which seeks to prevent or delay the
consummation of the transactions contemplated by this Agreement or which
challenges the validity or enforceability of this Agreement.
SECTION 6.4. Other Closing Documents. C-TEC shall have received such
other duly executed certificates, instruments and documents in confirmation
of the representations and warranties of RCN and Holdings or in furtherance
of the transactions contemplated by this Agreement as C-TEC or its counsel
may reasonably request.
SECTION 6.5. Legal Matters. All certificates, instruments and other documents
required to be executed or delivered by or on behalf of RCN and Holdings under
the provisions of this Agreement, and all other actions and proceedings
required to be taken by or on behalf of RCN and Holdings in furtherance of the
transactions contemplated hereby, shall be reasonably satisfactory in form and
substance to counsel for C-TEC.
SECTION 6.6. Resignation of Holdings' Officers and Directors. All members
of the Board of Directors and all officers of Holdings shall have resigned
effective as of the Closing.
ARTICLE VII.
TERMINATION
SECTION 7.1. Termination . This Agreement may be terminated at any time
prior to Closing:
(a) By the mutual written consent of C-TEC and RCN;
(b) By RCN immediately upon written notice to C-TEC if the Closing has not
occurred on or prior to January 31, 1996;
(c) By C-TEC immediately upon written notice to RCN if the Closing has not
occurred on or prior to January 31, 1996;
(d) By RCN if any of the conditions specified in Article V hereof have not
been met or waived at such time as such condition is no longer capable of
satisfaction;
(e) By C-TEC if any of the conditions specified in Article VI hereof have not
been met or waived at such time as such condition is no longer capable of
satisfaction; or
(f) By C-TEC or RCN if a court of competent jurisdiction or governmental,
regulatory or administrative agency or commission shall have issued an order,
decree or ruling or taken any other action (which order, decree or ruling the
parties hereto shall use their best efforts to lift), which permanently
restrains, enjoins or otherwise prohibits the transactions contemplated by
this Agreement.
SECTION 7.2. Procedure; Effect of Termination. In the event of termination of
this Agreement pursuant to Section 7.1, written notice thereof shall forthwith
be given to the other parties and this Agreement shall terminate and the
transactions contemplated hereby shall be abandoned, without further action by
C-TEC, RCN or Holdings. If this Agreement is terminated as provided herein,
no party to this Agreement shall have any liability or further obligation to
any other party to this Agreement except as provided in Section 9.3 hereof;
provided, however, that no termination of this Agreement pursuant to this
Article VII shall relieve any party of liability for a breach of any provision
of this Agreement occurring before such termination.
ARTICLE VIII.
INDEMNIFICATION
SECTION 8.1. Coverage. (a) Notwithstanding the Closing or the delivery
of the Exchange Shares and the Holdings Shares and regardless of any
investigation at any time made by or on behalf of C-TEC or any of its
representatives or of any knowledge or information that C-TEC or any of its
representatives may have, RCN and KDG, jointly and severally, indemnify and
agree to fully defend, save and hold C-TEC and any of its officers,
directors, employees, stockholders, advisors, representatives, agents and
affiliates (including Holdings but excluding RCN and KDG) harmless if: (i)
any indemnified party shall at any time or from time to time suffer any
damage, liability (absolute or contingent, including liabilities for taxes
of any kind, and interest, fines and penalties thereon, whether direct or
indirect as a successor-in-interest, transferee or member of a
consolidated, combined or unitary group), obligation, loss, cost, expense
(including all reasonable attorneys' fees), claim or cause of action
(collectively "Losses") arising out of or resulting from, or shall pay or
become obligated to pay any sum in connection with, any and all Events of
Breach (as defined below) of either RCN or Holdings; or (ii) any
indemnified party shall be subject to (x) any Losses arising at any time
from or in connection with the acts or omissions of, or states of facts
relating to, Holdings and its employees and agents, which acts or omissions
occurred, or states of facts existed, on or before the Closing Date,
including, without limitation, any business activities, operations,
agreements or arrangements conducted or entered into by Holdings or to
which Holdings was a party or by which Holdings was bound on or before the
Closing Date (including liabilities set forth on the Holdings Balance
Sheet); (y) any Losses relating to taxes and arising out of or resulting
from the Exchange or the consummation of the transactions contemplated by
the Agreement and Plan of Reorganization; or (z) any Losses arising out of
or resulting from the Exchange or the consummation of the transactions
contemplated by the Agreement and the Plan of Reorganization, except to the
extent there is a final determination by a court of competent jurisdiction
that such Losses resulted from (A) a breach of this Agreement by C-TEC, (B)
the gross negligence, bad faith or wilful misconduct of an indemnified
party, (C) a breach of fiduciary duty of an indemnified party, or (D)
violations of any obligations under the Securities Act of 1933, as amended,
or the Exchange Act by C-TEC or an indemnified party.
(b) Notwithstanding the Closing or the delivery of the Exchange Shares and
the Holdings Shares and regardless of any investigation at any time made by or
on behalf of RCN or Holdings or any of their representatives or of any
knowledge or information that RCN, Holdings or any of their representatives
may have, C-TEC indemnifies and agrees to fully defend, save and hold RCN
and Holdings and any of their respective officers, directors, employees,
stockholders, advisors, representatives, agents and affiliates harmless if any
such party shall at any time or from time to time suffer any damage,
liability, loss, cost, expense (including all reasonable attorneys' fees),
claim or cause of action arising out of or resulting from, or shall pay or
become obligated to pay any sum in connection with, any and all Events of
Breach of C-TEC.
(c) As used herein, "Event of Breach" means any one or more of the following:
(i) any untruth or inaccuracy in any representation by the indemnitor or the
breach of any warranty by the indemnitor, including, without limitation, any
misrepresentation in, or omission from, any statement, certificate, schedule,
exhibit, annex or other document furnished pursuant to this Agreement or in
connection with the Closing;
(ii) any failure by the indemnitor duly to perform or observe any term,
provision, covenant, agreement or condition on the part of such indemnitor to
be performed or observed under this Agreement; and
(iii) any act performed, transaction entered into, or statement of facts
suffered to exist by any party hereto before the Closing Date and in
connection herewith or relating hereto, otherwise than in good faith and
pursuant to the exercise of reasonable care.
SECTION 8.2. Procedures. If the party or parties entitled to receive the
benefits of the indemnification provisions hereunder (the "Indemnified Party")
asserts that the party from whom indemnification has been sought (the
"Indemnifying Party") has become obligated to the Indemnified Party pursuant
to Section 8.1 hereof, or if any suit, action, investigation, claim or
proceeding is begun, made or instituted as a result of which the Indemnifying
Party may become obligated to the Indemnified Party hereunder, the Indemnified
Party shall give written notice to the Indemnifying Party, provided that any
failure to so notify shall not relieve the Indemnifying Party of its
indemnification obligations hereunder except to the extent that the omission
results in a failure of actual notice to the Indemnifying Party and to the
extent such Indemnifying Party is damaged as a result of such lack of notice.
The Indemnifying Party agrees to defend, contest or otherwise protect the
Indemnified Party against any such suit, action, investigation, claim or
proceeding by counsel of the Indemnifying Party's choice at its sole cost and
expense, provided that such counsel shall be reasonably satisfactory to the
Indemnified Party. The Indemnified Party shall have the right, but not the
obligation, to participate at its own expense in the defense thereof by
counsel of the Indemnified Party's choice and shall in any event cooperate
with and assist the Indemnifying Party to the extent reasonably possible. The
Indemnifying Party, in the defense of any such claim, shall not, except with
the consent of the Indemnified Party, consent to entry of any judgment or
enter into any settlement that does not include as an unconditional term
thereof the giving by the claimant to the Indemnified Party of a release from
all liability with respect to such claim. If the Indemnifying Party fails
timely to defend, contest or otherwise protect against such suit, action,
investigation, claim or proceeding, the Indemnified Party shall have the right
to do so, including, without limitation, the right to make any compromise or
settlement thereof, and the Indemnified Party shall be entitled to recover the
entire cost thereof from the Indemnifying Party, including, without
limitation, reasonable attorneys' fees, disbursements and amounts paid as the
result of such suit, action, investigation, claim or proceeding.
SECTION 8.3. Gross-Up. If any indemnification payment under Article VIII
(including, without limitation, this Section 8.3) is determined to be taxable
to the party receiving such payment by any taxing authority, the paying party
shall also indemnify the party receiving such payment for any taxes incurred
by reason of the receipt of such payment (taking into account any actual
reduction in tax liability to the receiving party) and any related costs
incurred by the party receiving such payment in connection with such taxes (or
any asserted deficiency, claim, demand, action, suit, proceeding, judgment or
assessment, including the defense or settlement thereof, relating to such
taxes).
ARTICLE IX.
MISCELLANEOUS PROVISIONS
SECTION 9.1. Survival of Provisions. The respective representations,
warranties, covenants and agreements of each of the parties to this
Agreement (except covenants and agreements which are expressly required to
be performed and are performed in full on or before the Closing Date) shall
survive the Closing Date and the consummation of the transactions
contemplated by this Agreement. In the event of a breach of any of such
representations, warranties or covenants, the party to whom such
representations, warranties or covenants have been made shall have all
rights and remedies for such breach available to it under the provisions of
this Agreement or otherwise, whether at law or in equity, regardless of any
disclosure to, or investigation made by or on behalf of, such party on or
before the Closing Date.
SECTION 9.2. Successors and Assigns; No Third-Party Beneficiaries. This
Agreement shall inure to the benefit of, and be binding upon, the parties
hereto and their respective successors and assigns; provided, however, that
neither party shall assign or delegate any of the obligations created under
this Agreement prior to the Closing without the prior written consent of the
other party, and no such assignment or delegation shall relieve the assignor
from liabilities hereunder. Nothing in this Agreement shall confer upon any
person or entity not a party to this Agreement, or the legal representatives
of such person or entity, any rights or remedies of any nature or kind
whatsoever under or by reason of this Agreement.
SECTION 9.3. Fees and Expenses. Except as otherwise expressly provided in
this Agreement, all legal, accounting and other fees, costs and expenses
incurred by RCN and Holdings in connection with this Agreement and the
transactions contemplated hereby shall be paid by RCN and all reasonable
legal, accounting and other fees, costs and expenses incurred by C-TEC
properly allocable to this Agreement and to the transactions contemplated
hereby (including those of the Special Committee of the Board of Directors
of C-TEC) shall be paid by RCN. Otherwise, any fees, costs and expenses
shall be paid by the party incurring such fees, costs and expenses.
SECTION 9.4. Notices. All notices and other communications given or made
pursuant hereto shall be in writing and shall be delivered personally or be
mailed by overnight courier or be sent by registered or certified mail
(postage prepaid, return receipt requested) to the parties at the following
addresses:
(a) If to RCN, to: RCN Corporation
c/o Peter Kiewit Sons', Inc.
1000 Kiewit Plaza
Omaha, Nebraska 68131
Attention: Matthew J. Johnson, Esq.
with a copy to: Willkie Farr & Gallagher
One Citicorp Center
153 East 53rd Street
New York, New York 10022-4669
Attention: John S. D'Alimonte, Esq.
(b) If to C-TEC, to: C-TEC Corporation
105 Carnegie Center
Princeton, New Jersey 08540
Attention: Bruce C. Godfrey and
Raymond B. Ostroski, Esq.
with a copy to: Davis Polk & Wardwell
450 Lexington Avenue
New York, New York 10017
Attention: William L. Taylor, Esq.
(c) If to the Special Committee
of C-TEC, to: Eugene Roth, Esq.
Rosenn, Jenkins & Greenwald
15 South Franklin Street
Wilkes-Barre, Pennsylvania 18711
with a copy to: Weil Gotshal & Manges
767 5th Avenue
New York, New York 10153
Attention: Gerald S. Backman, P.C.
and to C-TEC as set forth above,
or to such other persons or at such other addresses as shall be furnished by
either party by like notice to the other. Any notice so addressed shall be
deemed to be given: if delivered by hand, on the date of such delivery; if
sent by overnight delivery, on the first business day following the date of
such mailing; and if mailed by registered or certified mail, on the third
business day after the date of such mailing. No change in any of such
addresses shall be effective insofar as notices under this Section 9.4 are
concerned unless such changed address is located in the United States of
America and notice of such change shall have been given to such other party
hereto as provided in this Section 9.4.
SECTION 9.5. Entire Agreement. This Agreement, together with the exhibit
hereto, represents the entire agreement and understanding of the parties
with reference to the transactions set forth herein and no representations
or warranties have been made in connection with this Agreement other than
those expressly set forth herein or in the exhibit, certificates and other
documents delivered in accordance herewith. This Agreement supersedes all
prior negotiations, discussions, correspondence, communications,
understandings and agreements between the parties relating to the subject
matter of this Agreement and all prior drafts of this Agreement, all of
which are merged into this Agreement. No prior drafts of this Agreement
and no words or phrases from any such prior drafts shall be admissible into
evidence in any action or suit involving this Agreement.
SECTION 9.6. Waivers and Amendments. C-TEC or RCN may by written notice
to the other (a) extend the time for the performance of any of the
obligations or other actions of the other; (b) waive any inaccuracies in
the representations or warranties of the other contained in this Agreement;
(c) waive compliance with any of the covenants of the other contained in
this Agreement; (d) waive performance of any of the obligations of the
other created under this Agreement; or (e) waive fulfillment of any of the
conditions to its own obligations under this Agreement. The waiver by any
party hereto of a breach of any provision of this Agreement shall not
operate or be construed as a waiver of any subsequent breach, whether or
not similar, unless such waiver specifically states that it is to be
construed as a continuing waiver. This Agreement may be amended, modified
or supplemented only by a written instrument executed by the parties
hereto. Any such amendment or waiver shall require the consent of the
Special Committee of the Board of Directors of C-TEC if then existing.
SECTION 9.7. Severability. This Agreement shall be deemed severable, and the
invalidity or unenforceability of any term or provision hereof shall not
affect the validity or enforceability of this Agreement or of any other term
or provision hereof. Furthermore, in lieu of any such invalid or
unenforceable term or provision, the parties hereto intend that there shall be
added as a part of this Agreement a provision as similar in terms to such
invalid or unenforceable provision as may be possible and be valid and
enforceable.
SECTION 9.8. Titles and Headings. The Article and Section headings and
the Table of Contents contained in this Agreement are solely for
convenience of reference and shall not affect the meaning or interpretation
of this Agreement or of any term or provision hereof.
SECTION 9.9. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which
together shall be considered one and the same agreement.
SECTION 9.10. Enforcement of the Agreement. The parties hereto agree that
irreparable damage would occur if any of the provisions of this Agreement were
not performed in accordance with their specific terms or were otherwise
breached. It is accordingly agreed that the parties shall be entitled to an
injunction or injunctions to prevent breaches of this Agreement and to enforce
specifically the terms and provisions hereto, this being in addition to any
other remedy to which they are entitled at law or in equity.
SECTION 9.11. Governing Law. This Agreement shall be governed by and
interpreted and enforced in accordance with the laws of the State of New
York without giving effect to the choice-of-law provisions thereof.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first above written.
RCN CORPORATION
By:_________________________
Name:
Title:
C-TEC CORPORATION
By:_________________________
Name:
Title:
RCN HOLDINGS, INC.
By:_________________________
Name:
Title:
FOR PURPOSES OF SECTIONS 2.1, 2.4, 2.5, 2.6, 8.1 AND 8.2 ONLY
KIEWIT DIVERSIFIED GROUP INC.
By:__________________________
Name:
Title:
INDEX OF DEFINED TERMS
Page
----
Agreement....................................................................1
Closing......................................................................2
Closing Date.................................................................2
C-TEC........................................................................1
C-TEC Class B Shares.........................................................1
C-TEC Common Shares..........................................................1
C-TEC Preferred Shares.......................................................5
C-TEC Shares.................................................................1
Event of Breach.............................................................11
Exchange.....................................................................2
Exchange Act.................................................................4
Exchange Shares..............................................................1
Holdings.....................................................................1
Holdings Shares..............................................................1
Indemnified Party...........................................................11
Indemnifying Party..........................................................11
KDG..........................................................................1
Losses......................................................................10
RCN..........................................................................1
Agreement and Plan of Reorganization
This Agreement and Plan of Reorganization ("Plan") is made as of
December 28, 1995, by C-TEC Corporation, a Pennsylvania corporation (the
"Company"), RCN Corporation, a Delaware corporation ("RCN"), and RCN Holdings,
Inc., a Pennsylvania corporation ("Holdings").
WHEREAS, the Company, RCN, and Holdings have entered into an
Exchange Agreement dated as of the date first above written (the "Exchange
Agreement"), and
WHEREAS, the Company, RCN, and Holdings desire to establish a plan
for effecting the transaction described in the Exchange Agreement and for
eliminating Holdings after that transaction,
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. All capitalized terms not defined in this Plan shall have the
meanings contained in the Exchange Agreement.
2. On the Closing Date, the Company will exchange, for all the
Holdings Shares, the Exchange Shares, and RCN will exchange, for the Exchange
Shares, all the Holdings Shares, each as described in the Exchange Agreement.
3. As soon as practicable after the Closing Date but in no event
later than January 11, 1996, the Company will dissolve Holdings, pursuant to
applicable state law.
4. Each of the Company, RCN, and Holdings will file as part of
its tax return for its taxable year in which the dissolution of Holdings
occurs the statements required by section 1.368-3 of the Income Tax
Regulations.
5. Each of the Company and Holdings will file as part of its
tax return for its taxable year in which the dissolution of Holdings occurs
copies of this Plan and the Exchange Agreement.
6. Each of the Company, RCN, and Holdings will treat the exchange
of the Holdings Shares for the Exchange Shares and the subsequent dissolution
of Holdings as steps in a tax-free reorganization of Holdings within the
meaning of section 368(a)(1)(C) of the Internal Revenue Code of 1986, as
amended.
7. This Plan will become part of the official records of the
Company, RCN, and Holdings.
IN WITNESS WHEREOF, this Plan has been executed by duly
constituted and authorized officers of the Company, RCN, and Holdings,
pursuant to authority granted by the Boards of Directors of each corporation.
C-TEC CORPORATION
By:________________________
Name:
Title:
RCN CORPORATION
By:________________________
Name:
Title:
RCN HOLDINGS, INC.
By:________________________
Name:
Title:
Exhibit 99.5
December 28, 1995
Special Committee of the Board of Directors
C-TEC Corporation
c/o Eugene Roth, Chairman
Rosenn, Jenkins & Greenwald, L.L.P.
15 South Franklin Street
Wilkes-Barre, Pennsylvania 18711-0075
Re: C-TEC Corporation -- Strategic Alternatives
Special Committee of The Board of Directors of C-TEC
Corporation (the "Special Committee")
____________________________________________________
Dear Gene:
This letter sets forth certain agreements of Kiewit Diversified Group
Inc. ("Kiewit") and RCN Corporation ("RCN") in connection with the evaluation
by the board of directors of C-TEC Corporation ("C-TEC") of certain strategic
alternatives for its various business units. One of the strategic
alternatives under evaluation would involve the spin-off by C-TEC of certain
of its other businesses to its shareholders and a merger of its remaining
businesses with an undetermined third party (collectively, or any similar
transaction, being referred to as the "Possible Transaction").
Kiewit, RCN and C-TEC are today entering into an Exchange Agreement
relating to the exchange by RCN of all of the outstanding capital stock of RCN
Holdings, Inc. for newly-issued shares of C-TEC stock equal in number and
class to the shares of C-TEC stock held by RCN Holdings, Inc. Kiewit and RCN
also agree as follows:
(a) RCN (which will be deemed to include its affiliates) will reduce
its direct and indirect stock interest in C-TEC so that neither
Kiewit nor any of its affiliates will be treated as holding a "50
percent or greater interest" in C-TEC within the meaning of
Section 355(d) of the Internal Revenue Code (giving effect to the
applicable aggregation and attribution rules), through a method
and at a time reasonably selected by RCN, if the C-TEC board of
directors approves a merger or similar agreement in connection
with the Possible Transaction, but only if such a reduction in
RCN's percentage interest in C-TEC is reasonably required by the
Special committee to accomplish a related spin-off of certain of
C-TEC's businesses on a tax-free basis to C-TEC and its
shareholders. If RCN so reduces its percentage interest in C-TEC,
Kiewit and RCN will maintain such reduced interest in C-TEC stock
until the Possible Transaction is consummated, is abandoned or is
no longer capable of consummation. If the C-TEC board of
directors decides not to pursue the Possible Transaction or
abandons the pursuit of the Possible Transaction, or if the
Possible Transaction becomes incapable of consummation, RCN's
obligation pursuant to this paragraph (a) will terminate and be of
no further force or effect.
(b) If the C-TEC board decides not to pursue the Possible Transaction or
abandons the pursuit of the Possible Transaction or if the Possible
Transaction becomes incapable of consummation, Kiewit will reimburse
C-TEC for the reasonable fees and expenses incurred by C-TEC with
respect to the Special Committee, including the reasonable fees and
expenses of the financial advisor to the Special Committee,
Donaldson, Lufkin and Jenrette, the reasonable fees and expenses of
the special counsel to the Special Committee, Weil, Gotshal & Manges,
and the reasonable fees and expenses of the members of the Special
Committee.
This agreement may not be amended orally.
Sincerely,
/s/ Richard R. Jaros
_____________________________
Richard R. Jaros
Executive Vice President
Kiewit Diversified Group Inc.
/s/ Matthew J. Johnson
_____________________________
Matthew J. Johnson
Vice President
RCN Corporation
Accepted and Agreed to:
Special Committee of the Board of
Directors of C-TEC Corporation
By /s/ Eugene Roth
______________________
C-TEC
By /s/ Bruce C. Godfrey
______________________
Bruce Godfrey
39008 Executive Vice President and
Chief Financial Officer
