<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Schedule 13D
Under the Securities Exchange Act of 1934
(Amendment No. 3)*
DMX INC.
(Name of Issuer)
Common Stock, $.01 par value
----------------------------
(Title of Class of Securities)
23323Q104
---------
(CUSIP Number)
Stephen M. Brett, Esq., Executive Vice President and General Counsel,
Tele-Communications, Inc.
Terrace Tower II, 5619 DTC Parkway, Englewood, CO 80111, (303-267-5500)
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
MAY 17, 1996
------------
(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
schedule because of Rule 13d-1(b) (3) or (4), check the following box: [ ].
Check the following box if a fee is being paid with this statement [ ]. (A
fee is not required only if the reporting person: (1) has a previous statement
on file reporting beneficial ownership of more than five percent of the class
of securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of less than five percent of such
class.) (See Rule 13d-7.)
NOTE: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are to
be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities,
and for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Exchange Act") or otherwise subject to the liabilities of that
section of the Act but shall be subject to all other provisions of the Act
(however, see the Notes).
Exhibit Index is on Page 13
<PAGE> 2
SCHEDULE 13D
CUSIP NO. 23323Q104
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
TELE-COMMUNICATIONS, INC.
84-1260157
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) / /
(b) / /
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
WC, AF, 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
NUMBER OF 27,100,687 Shares
SHARES -------------------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY
0 Shares
OWNED BY
------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 27,100,687 Shares
PERSON ------------------------------------------------
10 SHARED DISPOSITIVE POWER
WITH
0 Shares
- -------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
27,100,687 Shares
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
/ /
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
45.5%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
HC, CO
- --------------------------------------------------------------------------------
*SEE INSTRUCTION BEFORE FILLING OUT!
INCLUDED BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND SIGNATURE ATTESTATION.
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Cusip No. 23323Q104
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
(Amendment No. 3)
Statement of
TELE-COMMUNICATIONS, INC.
Pursuant to Section 13(d) of the
Securities Exchange Act of 1934
in respect of
DMX INC.
(Commission File No. 0-18806)
ITEM 1. Security and Issuer
Tele-Communications, Inc., a Delaware corporation ("TCI"), hereby
amends and supplements its Statement on Schedule 13D (the "Statement"), with
respect to the common stock, $.01 par value (the "Common Stock"), of DMX Inc.,
a Delaware corporation ("DMX"). DMX's principal executive offices are located
at 11400 W. Olympic Blvd., Suite 1100, Los Angeles, California 90064-1507.
Pursuant to Rule 13d-2(c) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), this Amendment No. 3 also restates the Statement and each
subsequent amendment.
ITEM 2. Identity and Background
This Amendment No. 3 is being filed by TCI whose principal business
address is 5619 DTC Parkway, Englewood, Colorado 80111.
TCI, through its subsidiaries and affiliates, is principally engaged in
the construction, acquisition, ownership, and operation of cable television
systems and the provision of satellite-delivered video entertainment,
information and home shopping programming services to various video
distribution media, principally cable television systems. TCI also has
investments in cable and telecommunications operations and television
programming in certain international markets as well as investments in
companies and joint ventures involved in developing and providing programming
for new television and telecommunications technologies. TCI is a Delaware
corporation and was incorporated in 1994. TCI Communications, Inc. ("TCIC"), a
majority owned subsidiary of TCI, and its predecessors have been engaged in the
cable television
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Cusip No. 23323Q104
business since the early 1950's. Prior to August 1994, TCI was named
TCI/Liberty Holding Company and TCIC was named Tele-Communications, Inc.
Schedule 1 attached to this Amendment No. 3 to the Statement contains
the following information concerning each director, executive officer or
controlling person of TCI: (i) name and residence or business address, (ii)
principal occupation or employment; and (iii) the name, principal business and
address of any corporation or other organization in which such employment is
conducted. Schedule 1 is incorporated herein by reference and replaces the
Schedule previously filed with the Statement.
To the knowledge of TCI, each of the persons named on Schedule 1 (the
"Schedule 1 Persons") is a United States citizen. During the last five years,
neither TCI nor any of the Schedule 1 Persons (to the knowledge of TCI) has
been convicted in a criminal proceeding (excluding traffic violations or
similar misdemeanors). During the last five years, neither TCI nor any of the
Schedule 1 Persons (to the knowledge of TCI) has been a party to a civil
proceeding of a judicial or administrative body of competent jurisdiction and,
as a result of such proceeding, is or was subject to a judgment, decree or
final order enjoining future violations of, or prohibiting or mandating
activities subject to, federal or state securities laws or finding any
violation with respect to such laws.
August 1994 Business Combination
On August 4, 1994, at Special Meetings of Stockholders of TCIC and
Liberty Media Corporation ("LMC"), there was approved and adopted an Agreement
and Plan of Merger, dated as of January 27, 1994, as amended, which provided
for, among other things, the business combination of TCIC and LMC resulting in
the companies becoming wholly owned subsidiaries of TCI (the "Business
Combination"). The Business Combination became effective on August 4, 1994
upon certain filings with state authorities. Upon the effectiveness of the
Business Combination, TCI became the indirect beneficial owner of all of the
Common Stock owned by TCIC.
The foregoing summary of the Business Combination is qualified in its
entirety by reference to the complete terms, provisions and conditions thereof
set forth in the Proxy Statement of LMC and TCIC and the Prospectus of TCI
filed on June 23, 1994 (the "Proxy Statement/Prospectus") by such parties as
part of Registration Statement on Form S-4 (No. 33-54263). The Registration
Statement and Proxy Statement/Prospectus were incorporated herein by reference
and were so filed herewith as Exhibit A in the original Statement.
ITEM 3. Source and Amount of Funds or Other Consideration
TCI currently beneficially owns, directly and through certain of its
subsidiaries, 27,100,687 shares of the Common Stock. The Common Stock was
acquired in several previously
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Cusip No. 23323Q104
reported transactions and in connection with three recent transactions. The
information set forth below describes the previously reported and recent
transactions and states the source and amount of the consideration used in the
transactions.
Acquisition Pursuant to the Business Combination
In connection with the Business Combination described in Item 2 above,
TCI acquired indirect beneficial ownership of 3,409,063 shares of the Common
Stock. The consideration for the acquisition of such Common Stock was the
consideration given in the Business Combination which is described in the Proxy
Statement/Prospectus under the heading "THE MERGER AGREEMENT -- Consideration
to be Received in the Mergers".
August 1995 Purchase of the Common Stock
TCI used its working capital as the source of the funds for the
acquisition of 2,000,000 shares of the Common Stock purchased by TCI Turner
Preferred, Inc. on August 29, 1995 (the "August 1995 Securities"). The August
1995 Securities were purchased for a total cash purchase price of $5,000,000.
January 1996 Purchase of the Common Stock
TCI used its working capital as the source of the funds for the
acquisition of 650,000 shares of the Common Stock purchased by TCI on January
2, 1996 and January 8, 1996 (the "January 1996 Securities"). The January 1996
Securities were purchased in three transactions for a total cash purchase price
of $1,520,918. On January 2, 1996, TCI purchased 340,000 shares of the Common
Stock for $2.31 per share for a total purchase price of $786,250. On January 8,
1996, TCI purchased 140,000 shares of the Common Stock for $2.4062 per share
for a total purchase price of $336,868. On January 8, 1996, TCI purchased
170,000 shares of the Common Stock for $2.34 per share for a total purchase
price of $397,800.
May 1996 Acquisitions of the Common Stock
TCI used its working capital as the source of the funds for the
acquisition on May 17, 1996 of 5,700,000 shares of the Common Stock from
Stephen A. Wynn. The acquisition was pursuant to a Stock Purchase Agreement,
dated as of May 13, 1996, between Mr. Wynn and TCI. A copy of the Stock
Purchase Agreement is attached hereto as Exhibit 7(B) and is hereby
incorporated by reference. Such shares were purchased for $2 per share for a
total cash purchase price of $11,400,000.
Additionally, TCI used its working capital as the source of the funds
for the acquisition on May 17, 1996 of 4,500,000 shares of the Common Stock
from DMX. The acquisition was pursuant to a Stock Purchase Agreement, dated as
of May 14, 1996, between DMX and TCI. A copy of the Stock Purchase Agreement
is attached hereto as Exhibit 7(C) and is hereby
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Cusip No. 23323Q104
incorporated by reference. Such shares were purchased for $2 per share for a
total cash purchase price of $9,000,000. The Common Stock acquired in these
two transactions shall be referred to herein as the "May 1996 Securities".
In addition, United Artists Programming International, Inc., an
indirect majority owned subsidiary of TCI ("UAPI"), acquired 10,841,624 shares
of the Common Stock from DMX in connection with a merger (the "Merger")
pursuant to the terms of an Agreement and Plan of Merger, dated as of August
28, 1995, as amended, among DMX, TCI-Euromusic, Inc. ("TCI-E"), and UAPI (the
"Merger Agreement"). The Merger Agreement is attached hereto as Exhibit 7(D)
and is hereby incorporated by reference.
In connection with the Merger, TCI-E was merged with and into DMX and
DMX was the surviving corporation in the Merger. The Merger was effective as
of May 17, 1996.
Prior to the Merger, UAPI owned all of the outstanding shares of common
stock of TCI-E. As consideration in the Merger for such ownership interest in
TCI-E, UAPI received 10,841,624 shares of the Common Stock in exchange for all
of the shares of TCI-E common stock. In addition, two promissory notes in the
aggregate principal amount of $24,637,091 owed by DMX-Europe N.V. ("DMX-E") to
TCI-E were canceled. Prior to the Merger, DMX owned 51% and TCI-E owned 49% of
the issued and outstanding shares of DMX-E.
ITEM 4. Purpose of Transaction
In connection with the Merger, Tele-Communications International, Inc.,
a majority owned subsidiary of TCI, received the right to appoint two directors
to the board of directors of DMX. Donne F. Fisher and Leo J. Hindery, Jr. were
appointed to the board of DMX to satisfy this requirement and to fill immediate
vacancies created by the resignations of Stephen A. Wynn and W. Thomas Oliver.
Donne Fisher currently serves as a director of TCI and serves as a consultant
to TCI. Mr. Fisher served as an officer of TCI until January 1996.
Additionally, Mr. Hindery serves as chief executive officer of InterMedia
Partners, a multi-system cable television operator. TCI has various
investments in InterMedia Partners and its related entities.
In addition, there is an informal, non-binding understanding between
TCI and a majority of the existing directors of DMX that TCI may recommend the
appointment of two additional candidates for election to the board of
directors of DMX. TCI plans to exercise its right to recommend the appointment
of such candidates in the near future.
Additionally, due to the current financial condition of DMX, management
of DMX and the board of directors of DMX are continually reviewing alternatives
and strategies for improving the financial performance of DMX. No assurance
can be given that the outcome of this review by DMX management will not require
a change in TCI's present investment in DMX or require an extraordinary
corporate transaction as described in the next paragraph.
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Cusip No. 23323Q104
Except as otherwise described herein, neither TCI nor, to the best of
its knowledge, any of its executive officers, directors or controlling persons,
have any present plans or proposals which relate to or would result in: (i)
any acquisition by any person of additional securities of DMX, or any
disposition of securities of DMX; (ii) any extraordinary corporate transaction,
such as a merger, reorganization or liquidation, involving DMX or any of its
subsidiaries; (iii) any sale or transfer of a material amount of assets of DMX
or any of its subsidiaries; (iv) any change in the present board of directors
or management of DMX, including any plans or proposals to change the number or
term of directors or to fill any existing vacancies on the board; (v) any
material change in the present capitalization or dividend policy of DMX; (vi)
any other material change in DMX's business or corporate structure; (vii) any
changes in DMX's charter, by-laws, or other instruments corresponding thereto
or other actions which may impede the acquisition of control of DMX by any
person; (viii) any delisting from a national securities exchange or any loss of
authorization for quotation in an inter-dealer quotation system of a registered
national securities association of a class of securities of DMX; (ix) any
termination of registration pursuant to section 12(g)(4) of the Exchange Act of
a class of equity securities of DMX; or (x) any action similar to any of those
enumerated above.
Notwithstanding the foregoing paragraph, TCI may determine to change
its investment intent with respect to DMX at any time in the future. In
reaching any conclusion as to its future course of action, TCI will take into
consideration various factors, such as DMX's business and prospects, other
developments concerning DMX, other business opportunities available to TCI,
developments with respect to the business of TCI, and general economic and
stock market conditions, including, but not limited to, the market price of the
Common Stock of DMX. TCI reserves the right, depending on other relevant
factors, to acquire additional shares of the Common Stock of DMX in open market
or privately negotiated transactions, to dispose of all or a portion of its
holdings of shares of the Common Stock of DMX or to change its intention with
respect to any or all of the matters referred to in this Item.
ITEM 5. Interest in Securities of the Issuer
(a) TCI presently beneficially owns 27,100,687 shares of the
Common Stock. The 27,100,687 shares of the Common Stock beneficially owned by
TCI represent 45.5% of the 59,586,594 shares of the Common Stock outstanding as
of May 17, 1996 as reported by an officer of DMX.
(b) TCI has the sole power to vote or to direct the voting of the
shares of the Common Stock that TCI beneficially owns. TCI has the sole power
to dispose of, or to direct the disposition of the shares of the Common Stock
that TCI beneficially owns.
(c) Except for the acquisition of the Common Stock described
herein, neither TCI nor, to the knowledge of TCI, any of the persons described
on Schedule 1, has executed transactions in the Common Stock of DMX during the
past sixty (60) days.
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Cusip No. 23323Q104
(d) There is no person that has the right to receive or the power
to direct the receipt of dividends from, or the proceeds from the sale of, the
Common Stock owned by TCI.
(e) Not applicable.
ITEM 6. Contracts, Arrangements, Understandings or Relationships With Respect
to Securities of the Issuer
There are presently no contracts, arrangements, understandings or
relationships among TCI and other persons with respect to the Common Stock of
DMX.
ITEM 7. Material to be Filed as Exhibits
A. Registration Statement on Form S-4, filed by TCI on June 23, 1994 and
thereafter amended and ordered effective June 23, 1994, under
Commission File No. 33-54263, which is hereby incorporated by this
reference. (Previously submitted with Original Statement filed on
August 11, 1994 via incorporation by reference)
B. Stock Purchase Agreement, dated as of May 13, 1996, by and between TCI
and Stephen A. Wynn.
C. Stock Purchase Agreement, dated as of May 14, 1996, by and between TCI
and DMX.
D. Agreement and Plan of Merger, dated as of August 28, 1995, by and
among UAPI, TCI-E, and DMX, as amended on November 1, 1995 and January
17, 1996.
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Cusip No. 23323Q104
SIGNATURE
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this Statement is true,
complete and correct.
[S] [C]
June 6, 1996 TELE-COMMUNICATIONS, INC.
/s/ STEPHEN M. BRETT
----------------------------------
Stephen M. Brett
Executive Vice President and
General Counsel
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Cusip No. 23323Q104
SCHEDULE 1
----------
Directors, Executive Officers and Controlling Persons
of
Tele-Communications, Inc. ("TCI")
[name changed from TCI/Liberty Holding Company]
<TABLE>
<CAPTION>
Principal Business
or Organization in
Principal Occupation and Which Such Employment
Name Business Address Is Conducted
- ---- ------------------------ ---------------------
<S> <C> <C>
Bob Magness Chairman of the Board and Acquisition, development
Director of TCI and operation of cable
5619 DTC Parkway television systems and cable
Englewood, CO 80111 television programming
John C. Malone President and Chief Executive Acquisition, development
Officer and Director of TCI and operation of cable
5619 DTC Parkway television systems and cable
Englewood, CO 80111 television programming
Donne F. Fisher Consultant and Acquisition, development
Director of TCI and operation of cable
5619 DTC Parkway television systems and cable
Englewood, CO 80111 television programming
John W. Gallivan Director of TCI; Newspaper publishing
Chairman of the Board
Kearns-Tribune Corporation
400 Tribune Building
Salt Lake City, UT 84111
Anthony L. Coelho Director of TCI; Chairman and CEO of ETC w/ TCI Investment Services
President and CEO of
Coelho Associates & LLP
1325 Avenue of the Americas, 26th Floor
New York, NY 10019
Kim Magness Director of TCI; Investment management
Manages various personal investments;
4000 E. Belleview
Englewood, CO 80111
</TABLE>
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Cusip No. 23323Q104
<TABLE>
<S> <C> <C>
Robert A. Naify Director of TCI; Motion Picture
President and C.E.O. of Industry
Todd-AO Corporation;
172 Golden Gate Avenue
San Francisco, CA 94102
Jerome H. Kern Director of TCI; Senior Law
Partner in Baker & Botts, L.L.P.,
599 Lexington Avenue
New York, NY 10022
Gary K. Bracken Senior Vice President & Acquisition, development
Controller of TCI Communications, Inc. and operation of cable
5619 DTC Parkway television systems and cable
Englewood, CO 80111 television programming
Stephen M. Brett Executive Vice President, Secretary Acquisition, development
and General Counsel of TCI and operation of cable
5619 DTC Parkway television systems and cable
Englewood, CO 80111 television programming
Brendan R. Clouston Executive Vice President of TCI Acquisition, development
5619 DTC Parkway and operation of cable
Englewood, CO 80111 television systems and cable
television programming
Barry Marshall Executive Vice President of Acquisition, development
TCI Communications, Inc. and operation of cable
5619 DTC Parkway television systems and cable
Englewood, CO 80111 television programming
Larry E. Romrell Executive Vice President of TCI Acquisition, development
5619 DTC Parkway and operation of cable
Englewood, CO 80111 television systems and cable
television programming
Bernard W. Senior Vice President & Treasurer Acquisition, development
Schotters, II of TCI Communications, Inc. and operation of cable
5619 DTC Parkway television systems and cable
Englewood, CO 80111 television programming
</TABLE>
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Cusip No. 23323Q104
<TABLE>
<S> <C> <C>
Robert N. Thomson Senior Vice President, Government Acquisition, development
Affairs, of TCI Communications, Inc. and operation of cable
5619 DTC Parkway television systems and cable
Englewood, CO 80111 television programming
Fred A. Vierra Executive Vice President of TCI Acquisition, development
5619 DTC Parkway and operation of cable
Englewood, CO 80111 television systems and cable
television programming
Peter R. Barton Executive Vice President of TCI Acquisition, development
5619 DTC Parkway and operation of cable
Englewood, CO 80111 television systems and cable
television programming
</TABLE>
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Cusip No. 23323Q104
EXHIBIT INDEX
-------------
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
EXHIBIT EXHIBIT PAGE
NUMBER
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<S> <C> <C>
7(A) Registration Statement on Form S-4, filed by TCI (Previously
on June 23, 1994 and thereafter amended and ordered filed)
effective June 23, 1994, under Commission File No.
33-54263, which is hereby incorporated by this
reference. (Previously submitted with Original
Statement filed on August 11, 1994 via
incorporation by reference)
7(B) Stock Purchase Agreement, dated as of May 13, 1996, by
and between TCI and Stephen A. Wynn.
7(C) Stock Purchase Agreement, dated as of May 14, 1996, by
and between TCI and DMX.
7(D) Agreement and Plan of Merger, dated as of August 28,
1995, by and among UAPI, TCI-E, and DMX, as amended on
November 1, 1995 and January 17, 1996.
</TABLE>
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EXHIBIT 7(B)
STOCK PURCHASE AGREEMENT
This STOCK PURCHASE AGREEMENT (the "Agreement") is entered into as of
the 13th day of May, 1996 by and between TELE-COMMUNICATIONS, INC., a Delaware
corporation (the "Purchaser") and STEPHEN A. WYNN (the "Seller").
RECITALS
WHEREAS, an affiliate of Purchaser and Seller are currently
shareholders of DMX Inc., a Delaware corporation (the "Company"); and
WHEREAS, on the terms and subject to the conditions contained herein,
Purchaser desires to purchase 5,700,000 shares of the Company's common stock
("the Shares") from the Seller; and
WHEREAS, the Seller desires to sell all, but not less than all, of the
Shares to Purchaser.
NOW, THEREFORE, in consideration of the above premises and of the
mutual covenants and agreements contained herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Purchaser and the Company do hereby agree as follows:
1. Purchase and Sale of the Shares. On the terms and subject to
the conditions contained herein, Purchaser shall purchase from Seller, and
Seller shall sell to the Purchaser, the Shares for the amount of $11,400,000
(the "Purchase Price").
2. Closing. The closing of the purchase and sale of the Shares
(the "Closing") shall be held at the offices of Irell & Manella, 1800 Avenue of
the Stars, Los Angeles, CA, or at such other location as is agreed by the
parties, as soon as practicable following the execution of this Agreement and
in all events, not later than the later of the satisfaction of the conditions
to the parties' obligations hereunder and the date on which the Company's
merger with TCI-Euromusic, Inc. is consummated. The purchase shall be completed
by (i) Seller's delivery of certificates evidencing the Shares together with
stock powers sufficient to cause the Shares to be transferred to the name of
Purchaser or its designee, and (ii) Purchaser's delivery to Seller by wire
transfer of the Purchase Price pursuant to the instructions previously
delivered to Purchaser. If the Closing has not occurred prior to June 1, 1996,
then either party may terminate this Agreement; provided, however, that no
party may so terminate this Agreement if that party is in default of its
obligations hereunder.
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<PAGE> 2
3. Representations, Warranties and Acknowledgements of
the Purchaser. Purchaser represents and warrants to Seller as follows:
(a) Purchaser has the power and authority to
execute, deliver and perform this Agreement and to consummate the
transactions contemplated herein. The execution, delivery and
performance of this Agreement by Purchaser has been duly authorized by
all necessary corporate action and do not require notice to, or the
consent or approval of, any governmental body or other regulatory
authority.
(b) No action taken by Purchaser with respect to
the transactions contemplated by this Agreement has given rise or will
give rise to payment of a finder's fee or brokerage commission.
4. Acknowledgements and Agreements of the Purchaser. Purchaser
acknowledges and agrees as follows:
(a) The Shares have not been qualified under the
California Corporate Securities Law of 1968, as amended, in reliance
upon the exemption provided by Section 25104(a) thereof, based upon,
among other things, the representations set forth herein.
(b) The Shares have not been registered (and
there is no obligation on the part of the Company to register the
Shares) under the Securities Act of 1933, as amended (the "Securities
Act"), in reliance upon exemptions contained in the Securities Act and
the Rules and Regulations promulgated by the Securities and Exchange
Commission under the Securities Act.
(c) The Shares are being acquired for investment
purposes and are to be held for the undersigned's own account and are
not being acquired with a view to any distribution thereof.
(d) The certificate(s) representing the Shares may
bear upon their face a legend in substantially the following form:
THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933 AND MAY NOT BE SOLD OR OTHERWISE TRANSFERRED
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER SAID ACT OR AN APPLICABLE EXEMPTION
FROM THE REGISTRATION REQUIREMENTS THEREOF.
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<PAGE> 3
(e) Purchaser is a shareholder of the Company.
Purchaser is an accredited investor within the meaning of the
Securities Act, and is able to bear the risk of the loss of its entire
investment. Purchaser (a) has the requisite knowledge and experience
to assess the relative merits and risks of a purchase of the Shares;
(b) has received and has carefully read and evaluated copies of all
documents relevant to the purchase and sale contemplated hereby,
including without limitation this Agreement; and (c) has had full
opportunity to ask questions and receive answers concerning the
transactions contemplated hereby and thereby, and concerning the
Company, its business and financial condition.
5. Representations and Warranties of Seller. Seller
represents and warrants to Purchaser as follows:
(a) Seller has the power and authority to
execute, deliver and perform this Agreement and to consummate the
transactions contemplated herein. The execution, delivery and
performance of this Agreement by Seller does not require notice to, or
the consent or approval of, any governmental body or other regulatory
authority.
(b) Seller is and at the time of the closing will
be the owner of the Shares and has good and marketable title to the
Shares free and clear of any and all claims, liens, charges,
restrictions, encumbrances, security interests or other rights of any
person.
(c) The Shares are all of the shares of the
Company owned by the Seller.
(d) No action taken by Seller with respect to the
transactions contemplated by this Agreement has given rise or will
give rise to payment of a finder's fee or brokerage commission.
6. Conditions to Obligations of the Parties. The
obligations of each party to consummate the transactions contemplated by this
Agreement will be subject to the satisfaction or waiver of the following
conditions:
(a) all of the other party's representations and
warranties shall have been true when made and shall be true as of the closing
date, and the other party shall have performed all of its obligations required
to be performed hereunder prior to the closing date;
(b) there shall not be an injunction issued by a
court of competent jurisdiction which bars the consummation of the transactions
contemplated by this Agreement. Should such an injunction be in effect each of
the parties shall use
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<PAGE> 4
its reasonable best efforts to cause it to be dissolved so that the sale may be
consummated.
7. Survival of Representations, Warranties and
Covenants. All representations, warranties and covenants contained herein shall
survive the execution of this Agreement and the consummation of the
transactions contemplated hereby.
8. Further Assurances. Subject to the terms and
conditions of this Agreement, each of the parties to this Agreement agrees to
take, or cause to be taken, all actions necessary, proper, or advisable under
applicable laws to consummate the transaction contemplated by this Agreement,
including but not limited to any further action that is necessary to vest
Purchaser with full title to the Shares.
9. Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of the parties hereto and their
respective heirs, representatives, successors and assigns, but shall not be
assignable by any party hereto without the prior written consent of the other
party hereto; provided, however, that Purchaser may assign its rights under
this Agreement to any subsidiary of Purchaser, but shall not thereby be
relieved of its obligations under this Agreement.
10. Payment of Expenses. Each of the parties hereto
hereby covenants and agrees to pay its respective costs and expenses incurred
in negotiating, closing and carrying out the transactions contemplated by this
Agreement.
11. Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of California,
regardless of the choice of laws provisions of California or any other
jurisdiction.
12. Waivers Strictly Construed. No waiver of compliance
with any of the terms and conditions of this Agreement shall be effective
unless expressly contained in a writing signed by the waiving party. No waiver
of compliance with any of the terms and conditions of this Agreement shall be
considered a waiver of any prior or succeeding breach of the terms and
conditions of this Agreement unless expressly so stated in such writing.
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13. Legal Fees. If any party institutes or defends a law
suit or other legal proceeding to enforce, or because of a breach of, the terms
and conditions of this Agreement, the prevailing party or parties shall be
reimbursed, upon demand, by the other party or parties, for the costs and
expenses, including without limitation reasonable attorneys' fees and costs, of
bringing or defending such law suit or other legal proceeding.
14. Complete Agreement. This Agreement constitutes the
parties' entire agreement with respect to the subject matter hereof and
supersedes all agreements, representations, warranties, statements, promises
and understandings, whether oral or written, with respect to the subject matter
hereof. None of the terms and conditions of this Agreement may be amended,
modified or supplemented, except by a writing specifying such amendment,
modification, or supplement signed by the parties to this Agreement.
15. Invalid Provisions. If any term, provision, covenant,
or condition of this Agreement, or the application thereof to any person or
circumstance, shall be held by a court of competent jurisdiction to be invalid,
unenforceable, or void, the remainder of this Agreement and such term,
provision, covenant, or condition as applied to other persons or circustances
shall remain in full force and effect.
16. Headings. The section headings in this Agreement are
inserted only an a matter of convenience, and in no way define, limit, extend
or interpret the scope of this Agreement or of any particular section.
17. Counterparts. This Agreement is being executed in two
or more counterparts, each of which shall be deemed an original but all of
which shall constitute but one instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above, written.
TELE-COMMUNICATIONS, INC.
By: /s/ STEPHEN M. BRETT
------------------------------
Stephen M. Brett
Executive Vice President
/s/ STEPHEN A. WYNN
----------------------------------
STEPHEN A.WYNN
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EXHIBIT 7(C)
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement dated as of May 14, 1996, is
made by and between DMX Inc., a Delaware corporation ("DMX"), and
Tele-Communications, Inc., a Delaware corporation (the "Investor").
WHEREAS, DMX desires to sell to the Investor and the Investor
desires to purchase from DMX 4,500,000 authorized but unissued shares of common
stock, $.01 par value, of DMX (the "Shares"), upon the terms and subject to
the conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the foregoing premises and
the representations, warranties and agreements herein, and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I
PURCHASE OF SHARES
1.1 Purchase. In reliance on the Investor's
representations and warranties set forth in Article III below, DMX hereby issues
and sells to the Investor, and the Investor hereby purchases from DMX, the
Shares for an aggregate purchase price of $9,000,000 ($2.00 per Share).
1.2 Closing. The closing of the transactions contemplated
hereby (the "Closing") shall take place at the offices of DMX, 11400 West
Olympic Boulevard, Suite 1100, Los Angeles, California 90064 on May 17, 1996,
or at such other place or on such other day as the parties may mutually agree.
At the Closing, the Investor shall deliver to DMX the amount of $9,000,000 in
immediately available federal funds by wire transfer, and DMX shall deliver to
the Investor a stock certificate representing the Shares to be purchased by the
Investor pursuant to Section 1.1 hereof, free of all claims, liens and
encumbrances whatsoever.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF DMX
DMX hereby represents and warrants to the Investor as follows:
2.1 Organization. DMX is a corporation duly organized,
validly existing and in good standing under the laws of Delaware and has the
requisite corporate power and authority to own, lease and operate its
properties and to carry on its business in the manner now being conducted and
is duly qualified or licensed to do business as a foreign corporation in good
standing in all the jurisdictions in which the ownership of its property or the
conduct of its business requires such qualification, except such jurisdictions
in which its failure to be so qualified or licensed will have no material
adverse effect on its financial condition, results of operations, liabilities,
assets or business.
<PAGE> 2
2.2 Corporate Power and Authority of DMX. DMX has the
full corporate power and authority to execute and deliver this Agreement and
to perform its obligations under this Agreement. The execution, delivery and
performance of this Agreement by DMX have been authorized by all necessary
corporate actions required by law, DMX's Certificate of Incorporation or its
Bylaws or otherwise required to be taken to authorize the execution, delivery
and performance of this Agreement and the consummation of the transactions
contemplated hereby. This Agreement is a valid and binding agreement of DMX,
enforceable in accordance with its terms, except that enforceability of Section
4.7 hereof may be subject to limitations of public policy under federal and
state securities laws.
2.3 No Breach. The execution and delivery of this
Agreement by DMX do not, and the performance by DMX of its obligations under,
and the consummation by DMX of the transactions contemplated by, this Agreement
will not, (a) violate or conflict with the Certificate of Incorporation or
Bylaws of DMX, (b) in any material respect, constitute a breach or default (or
an event that with notice or lapse of time or both would become a breach or
default) or give rise to any lien or any third-party right of termination,
cancellation, modification or acceleration under any instrument or agreement to
which DMX is a party or by which DMX or any of its assets is bound or (c)
in any material respect, constitute a violation of any statute, law, ordinance,
rule or regulation.
2.4 Governmental Consents and Approvals. Neither the
execution and delivery of this Agreement by DMX nor the consummation of the
transactions contemplated by this Agreement by DMX will require any consent,
approval, authorization or permit of, or filing with or notification to, any
Governmental Authority.
2.5 Capital Structure. At the date hereof, the authorized
capital stock of DMX consists of (i) 100,000,000 shares of common stock, $.01
par value (the "Common Stock"), of which 44,244,970 shares are issued and
outstanding. As is more fully described on Exhibit A hereto, as of the date of
this Agreement there are also outstanding options and rights to purchase
4,330,833 shares of Common Stock. All of the Shares to be issued pursuant to
this Agreement, when issued in accordance with the terms of the Agreement, will
be duly authorized, validly issued, fully paid and nonassessable. Except as set
forth in Exhibit A, there are no outstanding subscriptions, options, calls,
rights, warrants, convertible securities, unsatisfied preemptive rights or
other agreements or commitments of any character obligating DMX to issue (or
reserve for issuance) or to transfer or sell any shares of its capital stock of
any class.
2.6 SEC Filing. DMX has heretofore furnished the Investor
with a complete copy of DMX's Annual Report on Form 10-K for its fiscal year
ended September 30, 1995 (the "Annual Report"), a Quarterly Report on Form 10-Q
for the fiscal quarter ended December 31, 1995, a Quarterly Report on Form 10-Q
for the fiscal quarter ended March 31, 1996 (the "March 10-Q"), and a
definitive proxy statement (the "Proxy Statement") for DMX's Meeting of
Stockholders held on March 12, 1996 (collectively, the "SEC Filings"), which
have previously been filed with the Securities and Exchange Commission ("SEC").
The SEC Filings when filed with the SEC complied in all material respects with
the Securities Exchange Act of 1934, as amended (the "Exchange Act")
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<PAGE> 3
and the rules and regulations thereunder. The March 10-Q is the only regular or
periodic report required to be filed by DMX pursuant to Sections 13 and 14 of
the Exchange Act with the SEC since March 31, 1996. The Annual Report
describes, among other things, the business, operations and principal
properties of DMX in accordance with the requirements of the applicable report
form. As of the date of their filing, the SEC Filings did not contain any
untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein not misleading. Except as
disclosed in the SEC Filings, since March 31, 1996, there have been no material
changes in the business, results of operations, financial condition or
properties of DMX required to be reported to the SEC pursuant to the Exchange
Act as of the Closing.
2.7 Absence of Certain Changes. Since March 31, 1996, DMX has not:
(a) incurred, paid, discharged or satisfied any claims,
liabilities or obligations other than the incurrence, payment, discharge or
satisfaction of liabilities and obligations (i) reflected or reserved against
on the balance sheet as of March 31, 1996, contained in the March 10-Q or (ii)
incurred in the ordinary course of business and consistent with past practices
since March 31, 1996;
(b) permitted or allowed any of its property or assets
(real, personal or mixed, tangible or intangible) to be subjected to any
mortgage, pledge, lien, security interest, encumbrance, restriction or change
of any kind, except for liens incurred in the ordinary course of business or
for current taxes not yet due or that have been expressly disclosed to
Investor;
(c) canceled any material debts or waived any material
claims or rights;
(d) sold, transferred or otherwise disposed of a material
portion of any of its properties or assets (real, personal or mixed, tangible
or intangible), except in the ordinary course of business and consistent with
past practice;
(e) declared, paid or set aside for payment any dividend
or other distribution in respect to its capital stock or redeemed, purchased or
otherwise acquired, directly or indirectly, any shares of capital stock or
other securities of DMX;
(f) made any change in any method of accounting or
accounting practice;
(g) paid, loaned or advanced any amount to, or sold,
transferred or leased any properties or assets (real, personal or mixed,
tangible or intangible) to, or entered into any agreement or arrangement
with, any of its officers or directors or any Affiliate of any of its officers
or directors except for directors' fees, compensation to officers at rates not
exceeding the rates of compensation reflected in the SEC Filings and the grant
of options as disclosed in Exhibit A hereto;
(h) except for the merger between TCI-Euromusic, Inc. and
DMX, entered into any transaction not in the ordinary course of business;
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<PAGE> 4
(i) except with respect to DMX Europe N.V., made any
loans to, Guaranteed any obligations of, or made any equity
investments in any person, except for loans, guarantees, obligations
or equity investments in amounts which are not material or which were
made in the ordinary course of business; or
(j) agreed, whether in writing or otherwise, to take any
action described in this section.
2.8 Brokers. DMX has not entered into any agreement for the
payment of any broker's or finder's fee or commission in connection with the
purchase or sale of the Shares. DMX agrees to in indemnify and hold the Investor
and its officers, directors, employees and agents harmless against any such
commissions, fees or other compensation.
2.9 Use of Proceeds. The proceeds from the sale of the Shares
shall be applied substantially as set forth on Exhibit B hereto.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE INVESTOR
The Investor represents and warrants to DMX as follows:
3.1 Authorization. This Agreement has been duly authorized,
executed and delivered by the Investor and constitutes its valid and legally
binding obligation.
3.2 Investment Representation. The Investor is acquiring the
Shares as principal for its own account and not with a view to, or for sale in
connection with, any distribution thereof, nor with any present intention of
selling or otherwise disposing of same.
3.3 Receipt of Information. The Investor and its representatives
have reviewed this Agreement, and all Exhibits hereto, the SEC Filings and all
other documents and materials DMX has provided to it in connection with the
transactions contemplated by this Agreement. The Investor and its
representatives have had access to and an opportunity to review all documents
and other materials requested of DMX and have been given an opportunity to ask
such questions of DMX concerning the terms and conditions of the sale of the
Shares and the business, operations, financial condition, assets and liabilities
of DMX and other relevant matters as they have deemed necessary or desirable and
have been given all such information as they have requested, in order to
evaluate the merits and risks of the investment contemplated herein.
3.4 Brokers. The Investor has not entered into any agreement for
the payment of any broker's or finder's fee or commission in connection with the
purchase or sale of the Shares. The Investor agrees to indemnify and hold DMX
and its officers, directors, employees and agents harmless against any such
commissions, fees or other compensation.
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<PAGE> 5
3.5 Private Placement. The Investor understands that the Shares
have not been registered under the United States Securities Act of 1933 (the
"1933 Act") or registered or qualified under any state securities laws on the
grounds that such Shares are being issued in a transaction exempt from the
registration requirements of the 1933 Act and the registration or qualification
requirements of applicable state securities laws, and that the Shares must be
held indefinitely unless such Shares are subsequently registered under the 1933
Act and qualified or registered under applicable state securities laws or an
exemption from registration and qualification is available, and that, except as
otherwise provided in this Agreement, DMX is under no obligation to register or
qualify the Shares. DMX may require an opinion of the Investor's counsel prior
to authorizing the registration of any transfer of Shares in reliance on an
exemption from registration or qualification to the effect that the transfer is
exempt from such registration or qualification. The Investor shall hold harmless
DMX and its directors, officers, employees and agents against any loss or
liability from any disposition of Shares by it in violation of this Section 3.5.
3.6 Principal Office. The location of the Investor's principal
executive and business office is at the Investor's address set forth in Section
5.5 below.
3.7 Accredited Investor. The Investor is an accredited investor
within the meaning of Rule 501 of Regulation D promulgated under the 1933 Act
and has such knowledge and experience in financial and business matters that it
is capable of evaluating the merits and risks of the investment to be made
hereunder by it and it is able to bear the economic risk of its investment. The
Investor (i) has total assets in excess of $5,000,000, (ii) was not formed for
the purpose of investing in the Shares, and (iii) has business or investments
other than the investment in the Shares.
3.8 Preexisting Relationship. The Investor either (i) has a
preexisting personal or business relationship with DMX or any of its officers,
directors or controlling persons or an affiliate of DMX, or (ii) by reason of
its business or financial experience or the business or financial experience of
its professional advisor(s) who is (are) unaffiliated with and who is (are) not
compensated, directly or indirectly, by DMX, or any affiliate or selling agent
of DMX, the Investor can reasonably be assumed to have the capacity to protect
its own interests in connection with this transaction.
3.9 Legends. The Investor acknowledges that each certificate or
other document evidencing the Shares shall be endorsed with the legends set
forth below:
(a) "THE SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE UNITED STATES SECURITIES ACT OF 1933, AND
MAY NOT BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED OR
HYPOTHECATED ABSENT AN EFFECTIVE REGISTRATION THEREOF
UNDER SUCH ACT OR COMPLIANCE WITH AN AVAILABLE
EXEMPTION FROM REGISTRATION. THE COMPANY MAY REFUSE
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<PAGE> 6
TO AUTHORIZE ANY TRANSFER OF THE SHARES IN RELIANCE
ON AN EXEMPTION FROM REGISTRATION UNTIL IT HAS
RECEIVED AN OPINION OF COUNSEL, REASONABLY
SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT SUCH
REGISTRATION IS NOT REQUIRED."
(b) If required by the authorities of any state in
connection with the issuance or sale of the Shares,
the legend required by such state authority.
3.9 Confidentiality. The Investor shall keep confidential
and shall not use the Confidential Information provided to it by DMX or Its
agents in connection with the transactions contemplated hereby. As used herein,
the term "Confidential Information" shall mean any trade secrets or nonpublic
information of DMX which has been designated as such by DMX prior to its
disclosure to Investor. The foregoing notwithstanding, Confidential Information
will not be deemed to include (1) information in Investor's possession,
otherwise than as a result of Investor's confidential or fiduciary relationship
with DMX, prior to the disclosure thereof by DMX, (11) information which is in
the public domain through no act or omission of Investor, (iii) information
which is disclosed to Investor by a third party which did not acquire the
information under an obligation of confidentiality, or (iv) information which
Investor is required to disclose by law or order of a court or other
governmental authority.
ARTICLE IV
REGISTRATION RIGHTS
4.1 Pendent Registration Rights.
(a) If at any time during the period beginning on the
date of the Closing and ending on the third anniversary of the Closing, DMX
proposes to file, on its behalf and/or on behalf of any of its securities
holders, a new registration statement relating to the Common Stock of DMX under
the 1933 Act (a "Registration Statement") other than in connection with (i) a
dividend reinvestment, employee stock purchase, option or similar plan, (ii) a
merger, consolidation or reorganization or (iii) a rights offering to
stockholders, DMX shall give written notice to the Investor at least 30 days
before the filing with the SEC of such Registration Statement. Such notice
shall offer to include in such filing that number of Registrable Shares (as
defined herein) then held by the Investor as the Investor may request pursuant
to written notice to DMX within 20 days after the date of mailing of such
offer, stating, in such request the intended method of distribution of such
Registrable Shares. DMX shall thereupon include in such filing that amount of
the Investor's Registrable Shares so requested by the Investor and, subject to
its right to withdraw such filing, shall use its best efforts to effect
registration under the 1933 Act of such Registrable Shares. For purposes of
this Article IV, any rights in respect of the Registrable Shares granted to the
Investor shall also be available to any person controlled by, controlling, or
under common control with the Investor (an
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"Affiliate"). As used herein, "Registrable Shares" means the Shares and any
other shares of Common Stock held by the Investor or an Affiliate, and all
references in this Article IV to the Investor will be deemed to be applicable
to an Affiliate that holds Registrable Shares.
(b) The right of the Investor to have its Registrable
Shares included in any Registration Statement in accordance with the provisions
of this Section 4.1 shall be subject to the following conditions:
(i) the number of occasions on which registration may be
requested shall be unlimited.
(ii) Investor may not request the registration pursuant to
this Section 4.1 of less than an aggregate of 10,000 Registrable Shares
(subject to splits and combinations after the date hereof (unless the Investor
is requesting registration of all Registrable Shares then held by DMX and its
Affiliates) pursuant to any one Registration Statement; and
(iii) if such registration shall be in connection with an
underwritten public offering and if the managing underwriters shall advise DMX
in writing that in their good faith opinion the number of securities requested
to be included in such Registration Statement exceeds the number which can be
sold in an orderly manner in such offering, DMX shall include in such
registration, first, securities which DMX proposes to sell, if any, or if none
of the securities will be registered for sale by DMX, the securities requested
to be registered by the shareholder(s) initially requesting such registration,
second, securities which other shareholders of DMX with registration rights
granted prior to the date hereof which are superior to those of the Investor
propose to sell, and third, the Registrable Shares requested to be included in
such Registration Statement by the Investor and other shareholders with
registration rights not superior to the Investor, pro rata among the Investor
and such other shareholders (if all such Common Stock may not be sold) on the
basis of the number of shares of Common Stock owned by the Investor and such
other shareholders.
(c) Notwithstanding the foregoing, DMX in its sole
discretion may determine not to file the Registration Statement or to delay the
offering as to which the notice specified herein is given and, thereupon, shall
be relieved of its obligation to register or shall be permitted to delay
registering, as the case may be, any Registrable Shares requested to be
included therein without any liability to the Investor.
(d) Any request by the Investor to include Registrable
Shares in a Registration Statement shall express the Investor's present intent
to offer the Registrable Shares to be included in the Registration Statement
for distribution and contain an undertaking to provide all such information and
materials and to take all such actions as may be required in order to permit
DMX to comply with all applicable requirements of the SEC (including disclosure
in writing to DMX of the method or methods of distribution contemplated by the
Investor from time to time) and to obtain acceleration of the effective date of
the Registration Statement.
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4.2 Demand Registration Rights.
(a) If at any time during the period beginning on the
date of the Closing and ending on the third anniversary of the Closing, DMX
receives a written request therefor from the Investor, DMX shall prepare and
file a Registration Statement under the 1933 Act covering the Registrable
Shares which are the subject of such request and shall use its best efforts to
cause such Registration Statement to become effective, provided, however, that
DMX shall not be required to effect a registration under this Section 4.2
within six months of any prior registration in which Registrable Shares could
have been included under Section 4.1 hereof and in which all such Registrable
Shares requested for inclusion, if any, were included.
(b) DMX shall be obligated to prepare, file and cause to
become effective no more than three Registration Statements pursuant to this
Section 4.2. DMX shall not be required by this Section 4.2 to effect a
registration of Registrable Shares pursuant to any Registration Statement
unless 500,000 (or all, if less than 500,000) Registrable Shares then held by
the Investor are covered thereby.
(c) If a registration requested pursuant to this Section
4.2 is an underwritten registration in which the obligation of the underwriters
is to take all of the Registrable Shares to be sold if any are to be taken. DMX
and other security holders of DMX may include securities in such registration
without the consent of the Investor unless the managing underwriters of such
registration advise DMX in writing that in their opinion such inclusion would
adversely affect the successful marketing of the Registrable Shares to be
included in such registration.
(d) DMX shall be entitled to postpone for a reasonable
period of time (but not exceeding 90 days) (the "Postponement Period") the
filing of any Registration Statement otherwise required to be prepared and
filed by it pursuant to this Section 4.2 if DMX determines, in its reasonable
judgment, that such registration and offering would interfere with any
financing, acquisition, corporate reorganization or other material transaction
involving DMX or any of its affiliates or would require premature disclosure
thereof and promptly gives the Investor written notice of such determination,
which notice shall contain a general statement of the reasons for such
postponement and an approximation of the anticipated delay. If DMX shall so
postpone the filing of a Registration Statement, the Investor shall have the
right to withdraw the request for registration by giving written notice to DMX
within 30 days after receipt of the notice of postponement and, in the event of
such withdrawal, such request shall not be counted for purposes of the requests
for registration to which the Investor is entitled pursuant to this Section
4.2.
The Investor may, before such Registration Statement becomes
effective, withdraw its Registrable Shares from sale, provided that such
Registration Statement shall be counted for purposes of Section 4.2(b) hereof
unless the Investor agrees to pay the out-of-pocket expenses of DMX incurred in
respect of such registration.
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4.3 Additional Registration Procedures. If, at any time and
from time to time, DMX is required to effect the registration of
Registrable Shares for the Investor under the 1933 Act, then DMX shall:
(a) Before filing a Registration Statement or prospectus
or any amendments or supplements thereto, furnish to the Investor and its
counsel draft copies of all such documents proposed to be filed or used
(including, at the request of the Investor, all documents incorporated therein
by reference and all exhibits, including those incorporated by reference), a
reasonable amount of time prior to such proposed filing or use, which documents
will be subject to the reasonable review of the Investor, and DMX will
undertake to remove from the Registration Statement all Registrable Shares
included therein at the request of the Investor if the Investor shall
reasonably object to any such filing;
(b) Notify the Investor, promptly after it shall receive
notice thereof, of the time when such Registration Statement has become
effective with the SEC or an amendment to such Registration Statement or a
supplement to any prospectus forming a part of such Registration Statement has
been filed;
(c) Notify the Investor promptly of any request by the
SEC, or any other federal or state governmental authority, for the amending or
supplementing of such Registration Statement or prospectus or for additional
information;
(d) For a period of at least 90 days from the effective
date of the Registration Statement, prepare and file with the SEC such
amendments and supplements to such Registration Statement and prospectus used
in connection therewith as may be necessary to keep such Registration Statement
effective and to comply with the provisions of the 1933 Act with respect to the
offer of the Registrable Shares covered by such Registration Statement;
(e) Furnish to the Investor such number of copies of the
prospectus (including any preliminary prospectus or supplemental or amended
prospectus) as the Investor may reasonably request in order to facilitate the
sale and distribution of the Registrable Shares in accordance with the 1933 Act
and the intended methods of disposition set forth in such prospectus or
supplement;
(f) Notify the Investor in writing, in the event DMX
believes the last prospectus filed pursuant to Rule 424 under the 1933 Act in
connection with the Registration Statement may contain misleading statements or
material omissions, in which case the Investor agrees to cease utilizing such
prospectus for the sale of Registrable Shares and DMX agrees, as soon
thereafter as practicable, to prepare and file with the SEC such amendment or
supplement to such prospectus as may be necessary to meet the requirements of
the 1933 Act;
(g) Advise the Investor, promptly after it receives
notice or obtains knowledge thereof, of the issuance of any stop order by the
SEC suspending the effectiveness of such
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Registration Statement or of the issuance by any state securities commission or
other regulatory authority of any order suspending the qualification or
exemption from qualification of any of the Registrable Shares under state
securities or Blue Sky laws or the initiation or threatening of any proceeding
for that purpose and promptly use its best efforts to prevent the issuance of
any such order by the SEC or to obtain its withdrawal at the earliest possible
moment if such order should be issued;
(h) Make available for inspection by any underwriter in
any disposition pursuant to such Registration Statement, and any attorney,
accountant or other agent retained by any underwriter or the Investor, all
financial and other records reasonably necessary for such persons to
demonstrate that they have conducted a "reasonable investigation" of the
matters described in the Registration Statement, as that term is described in
Section 11 of the 1933 Act, and cause DMX's officers, directors, employees and
independent accountants to supply all information reasonably requested by the
Investor or any such underwriter, attorney, accountant or agent in connection
therewith;
(i) Use its best efforts to register or qualify the
Registrable Shares covered by each Registration Statement under such securities
or Blue Sky laws of such jurisdictions as the Investor and the managing
underwriters may reasonably request; provided that DMX shall not be required to
execute any general consent to service of process or to qualify as a foreign
corporation or as a dealer in securities in any jurisdiction where it is not so
qualified;
(j) If the offering is to be underwritten, enter into
such agreements (including an underwriting agreement in such form, scope and
substance as is customary in underwritten offerings, provided that the
indemnification provisions of any underwriting agreement shall be substantially
as set forth in Section 4.7 hereof) and take all such other actions in
connection therewith in order to expedite or facilitate the disposition of such
Registrable Shares and, in such connection: (i) make customary representations
and warranties to the Investor and the underwriters covering the matters
customarily covered in opinions in underwritten offerings; (ii) obtain opinions
of counsel to DMX and updates thereof (which counsel and opinions (in form,
scope and substance) shall be reasonably satisfactory to the underwriters and
the Investor and its counsel) addressed to the Investor and the underwriters
covering the matters customarily covered in opinions in underwritten offerings;
(iii) obtain customary "cold comfort" letters and updates thereof from the
independent certified public accountants addressed to the Investor and the
underwriters covering matters of the type customarily covered in "cold comfort"
letters in underwritten offerings; and (iv) deliver such other customary
documents and certificates as may be requested by the Investor or its counsel
and the underwriters;
(k) Comply with all applicable rules and regulations of
the SEC relating to the Registration Statement;
(l) Use its reasonable efforts to take all other steps
necessary to effect the registration of the Registrable Shares contemplated
hereby;
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(m) If any of the Registrable Shares are to be sold in an
underwritten public offering pursuant to this Agreement, DMX shall promptly
notify the Investor as to its selection of the managing underwriters for the
offering; and
(n) Cause such Registrable Shares to be listed on the
principal exchange or exchanges on which DMX's common stock is then listed or
to be included in NASDAQ if such common stock is then a NASDAQ security.
4.4 Reporting Requirements Under the Securities Exchange
Act of 1934. DMX shall timely file such information, documents, and reports as
the SEC may require or prescribe under either Section 13 or 15(d) (whichever is
applicable) of the Exchange Act. DMX shall, whenever requested by the Investor,
notify the Investor in writing whether DMX has, as of the date specified by the
Investor, complied with the Exchange Act reporting requirements to which it is
subject for a period prior to such date as shall be specified by the Investor.
DMX acknowledges and agrees that the purposes of the requirements contained in
this Section 4.4 are: (a) to enable the Investor to comply with the current
public information requirement contained in Paragraph (c) of Rule 144 under the
1933 Act should the Investor ever wish to dispose of any of the Shares acquired
by it without registration under the 1933 Act in reliance upon Rule 144 (or any
equivalent successor provision or similar rule hereafter adopted); and (b) to
qualify DMX for the use of registration statements on Form S-3, or its
equivalent successor form, in connection with secondary distributions of
securities of DMX. DMX shall use its best efforts to qualify for the use of Form
S-3, or its equivalent successor form, with respect to secondary distributions.
In addition, DMX shall take such other measures and file such other information,
documents, and reports as shall hereafter be required by the SEC as a condition
to the availability of Rule 144 under the 1933 Act (or any equivalent successor
provision or similar rule hereafter adopted), including, without limitation,
using its best efforts to assure that there shall be available at all times
adequate public information with respect to DMX and the Common Stock. The
obligation to make available adequate public information and otherwise take such
measures necessary to maintain the availability of Rule 144 shall continue in
the event that DMX shall cease to become subject to the filing requirements of
Section 13 or Section 15(d) of the Exchange Act.
4.5 Expenses. All expenses incident to DMX's performance
of or compliance with its undertaking in this Article IV, including, without
limitation, all registration and filing fees (other than registration and
filing fees in excess of $5,000 imposed by state securities or Blue Sky laws),
printing expenses, messenger and delivery expenses, and fees and disbursements
of counsel for DMX and all independent certified public accountants,
underwriters (excluding discounts and commissions and transfer taxes) and other
persons retained by DMX (all such expenses being herein called "Registration
Expenses"), will be borne by DMX, whether or not such Registration Statement
becomes effective. DMX will, in all events, pay its internal expenses
(including, without limitation, all salaries and expenses of its officers and
employees performing legal or accounting duties), the expense of any annual
audit and the expense of any liability insurance.
-11-
<PAGE> 12
4.6 Investor's Obligations.
(a) The Investor agrees upon the filing of a Registration
Statement covering the Registrable Shares, if requested by the managing
underwriters in an underwritten offering, not to effect any public sale or
distribution of securities of DMX of the same class as the securities included
in such Registration Statement, during the 10-day period prior to, and during
the five-day period beginning on, the closing date of each underwritten offering
made pursuant to such Registration Statement, to the extent timely notified in
writing by DMX or the managing underwriters.
(b) Whenever registration of any Registrable Shares is
being effected, DMX may require the Investor to furnish to DMX such information
regarding the distribution of such securities and such other information to be
included in such Registration Statement as DMX may from time to time reasonably
request in writing.
4.7 Indemnification, Contribution.
(a) In the event of any registration of any Registrable
Shares under the 1933 Act pursuant to this Agreement, DMX shall indemnify and
hold harmless, to the full extent permitted by law and without limitation as to
time, the Investor, each of its directors, officers, employees and agents and
each person, if any, who controls the Investor (within the meaning of the 1933
Act or the Exchange Act), and the respective directors, officers, employees and
agents of any such controlling person, any underwriter for the Investor and
each affiliate of the Investor or any such underwriter within the meaning of
the 1933 Act (collectively, the "Indemnified Persons"), against any losses,
claims, damages or liabilities, joint or several, to which any Indemnified
Person may become subject, under the 1933 Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of, or are based upon, any untrue statement or alleged untrue statement of any
material fact contained in or incorporated by reference into such Registration
Statement or preliminary prospectus (if used prior to the effective date of
such Registration Statement) or final or summary prospectus contained therein
(if used during the period DMX is required to keep the Registration Statement
effective), or any amendment or supplement thereto, or arise out of, or are
based upon, the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements made therein
(in the case of a prospectus or form of prospectus or supplement thereto, in
light of the circumstances under which they are made) not misleading, and will
reimburse each Indemnified Person for any legal or any other expenses
reasonably incurred by it in connection with investigating or defending any
such action or claim (excluding any amounts paid in settlement of any
litigation, commenced or threatened, if such settlement is effected without the
prior written consent of DMX, which consent shall not be unreasonably
withheld); provided, however, that DMX will not be liable to a particular
Indemnified Person in any such case (i) to the extent that any such loss,
claim, damage, liability or expense arises out of, or is based upon, an untrue
statement or omission or alleged untrue statement or alleged omission made in
said Registration Statement, said preliminary prospectus or said final or
summary prospectus or any amendment or supplement thereto, in reliance upon and
in conformity with written
-12-
<PAGE> 13
information furnished to DMX by that Indemnified Person or by the Investor
specifically for use in the preparation thereof, (ii) DMX has advised the
Investor of the occurrence of an event described in Section 4.3(f) and the
Investor has sold Registrable Shares notwithstanding such notice prior to
receipt of a supplement or amended prospectus or (iii) to the extent any such
loss, claim, damage, liability or expense are caused by the Investor's failure,
where required, to deliver a copy of the Registration Statement or prospectus;
and provided further that the indemnity agreement contained in this Section
4.7(a) with respect to any preliminary prospectus shall not inure to the
benefit of any Indemnified Person in respect of any loss, claim, damage,
liability or action asserted by someone who purchased Registrable Shares from
such person if (i) a copy of the final prospectus (as the same may be amended
or supplemented) in connection with such Registration Statement was not sent or
given to such person with or prior to written confirmation of the sale, (ii)
such final prospectus shall correct the untrue statement or alleged untrue
statement, or omission or alleged omission, which is the basis of such loss,
claim, liability or action, and (iii) there would have been no such liability
but for the failure to deliver such final prospectus by the Investor.
(b) In the event of any registration of Registrable
Shares under the 1933 Act pursuant to this Agreement, the Investor shall
indemnify and hold harmless, to the full extent permitted by law and without
limitation as to time, DMX, each of its directors, officers, employees and
agents and each person, if any, who controls DMX (within the meaning of the
1933 Act or the Exchange Act), and the respective directors, officers,
employees and agents of any such controlling person, any underwriter and each
affiliate of DMX or any such underwriter within the meaning of the 1933 Act
(collectively, the "Indemnified Persons"), against any losses, claims, damages
or liabilities, joint or several, to which DMX or any Indemnified Person may
become subject, under the 1933 Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of, or
are based upon, any untrue statement or alleged untrue statement of any
material fact contained in or incorporated by reference into such Registration
Statement or preliminary prospectus or final or summary prospectus contained
therein, or any amendment or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements made therein (in the
case of a prospectus or form of prospectus or supplement thereto, in light of
the circumstances under which they are made) not misleading, and will reimburse
such Indemnified Person for any legal or other expenses reasonably incurred by
it in connection with investigating or defending any such action or claim
(excluding any amounts paid in settlement of any litigation, commenced or
threatened, if such settlement is effected without the prior written consent of
the Investor, which consent shall not be unreasonably withheld); but in all
such cases only if, and to the extent that, any such loss, claim, damage,
liability or expense arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission therein made in
reliance upon and in conformity with written information furnished to DMX by
the Investor specifically for use in the preparation thereof. DMX shall be
entitled to receive indemnities from underwriters, selling brokers, dealer
managers and similar securities industry professionals participating in the
distribution, to the same extent as provided above with respect to information
so furnished in writing by such persons specifically for inclusion in any
prospectus or Registration Statement.
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<PAGE> 14
(c) Promptly after receipt by a party entitled to
indemnification under Section 4.7(a) or 4.7(b) hereof of notice of the
commencement of any action, such indemnified party will, if a claim in respect
thereof is to be made against the indemnifying party under either of such
Sections, notify the indemnifying party in writing of the commencement thereof.
In case any such action is brought against the indemnified party and it shall so
notify the indemnifying party of the commencement thereof, the indemnifying
party shall be entitled to participate in, and, to the extent that it so chooses
and acknowledges its obligation to indemnify the indemnified party for any loss,
claim, liability or expense suffered by the indemnified party, if any, in
connection with the action, to assume the defense thereof with counsel
reasonably satisfactory to such indemnified party and, after notice from the
indemnifing party that it so chooses to assume the defense of the action, such
indemnifying party shall not be liable for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof, unless the named parties to any such action, claim or proceeding
(including any impleaded parties) include both such indemnified party and the
indemnifying party, and such indemnified party shall have been advised by
counsel that there may be one or more legal defenses available to it which are
different from or additional to those available to the indemnifying party (in
which case, if such indemnified party notifies the indemnifying party in writing
that it elects to employ separate counsel at the expense of the indemnifying
party, the indemnifying party shall not have the right to assume the defense of
such action, claim or proceeding on behalf of such indemnified party, it being
understood, however, that the indemnifying party shall not, in connection with
any one such action, claim or proceeding or separate but substantially similar
or related actions, claims or proceedings in the same jurisdiction arising out
of the same general allegations or circumstances, be liable for the reasonable
fees and expenses of more than one separate firm of attorneys (together with
appropriate local counsel) at any time for all such indemnified parties, unless
in the reasonable judgment of such indemnified party a conflict of interest may
exist between such indemnified party and any other indemnified parties with
respect to such action, claim or proceeding, in which event the indemnifying
party shall be obligated to pay the fees and expenses of such additional counsel
or counsels); provided, however, that if the indemnifying party fails to take
reasonable steps necessary to diligently defend such claim within 20 days after
receiving notice from the indemnified party that the indemnified party believes
the indemnifying party has failed to take such steps, the indemnified party may
assume its own defense and the indemnifying party shall be liable for any
expenses therefor. The indemnity agreements in this Section 4.7 shall be in
addition to any liabilities which the indemnifying parties may have pursuant to
law.
(d) If the indemnification provided for in this Section
4.7 from the indemnifying party is unavailable to an indemnified party
hereunder in respect of any losses, claims, damages, liabilities or expenses
referred to herein, then the indemnifying party, in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages, liabilities or
expenses in such proportion as is appropriate to reflect the relative fault of
the indemnifying party and indemnified parties in connection with the actions
or inactions which resulted in such losses, claims, damages, liabilities or
expenses, as well as any other relevant equitable considerations. The relative
fault of such indemnifying party and indemnified parties shall be determined by
reference to, among other things, whether any action in question, including any
untrue or alleged untrue statement of a material fact, has been made by, or
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<PAGE> 15
related to information supplied by, such indemnifying party or indemnified
parties, and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such action. The amount paid or payable
by a party as a result of the losses, claims, damages, liabilities and expenses
referred to above shall be deemed to include, subject to the limitations set
forth in Section 4.7(c), any legal or other fees or expenses reasonably
incurred by such party in connection with any investigation or proceeding.
The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 4.7(d) were determined by
pro rata allocations or by any other method of allocation which does not take
account of the equitable considerations referred to in the immediately
preceding paragraph. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the 1933 Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
(e) The indemnification and contribution provided for in
this Section 4.7 shall remain in full force and effect regardless of any
investigation made by or on behalf of the indemnified party and will survive
the transfer of Registrable Shares. If indemnification is available under this
Section 4.7, the indemnifying parties shall indemnify each indemnified party to
the full extent provided in Sections 4.7(a) and (b) without regard to the
relative fault of said indemnifying party or indemnified party or any other
equitable consideration provided for in Section 4.7(d).
ARTICLE V
MISCELLANEOUS PROVISIONS
5.1 Waiver. This Agreement shall not be altered or
amended except by a written instrument executed by DMX and the Investor. Any
waiver of any term, covenant, agreement or condition contained in this
Agreement shall not be deemed a waiver of any other term, covenant, agreement
or condition, and any waiver of any default in such term, covenant, agreement or
condition shall not be deemed a waiver of any later default thereof or of any
default of any other term, covenant, agreement or condition.
5.2 Severability. In the event that any one or more of
the provisions of this Agreement shall be invalid, illegal or unenforceable,
all other provisions hereof shall be given effect separately therefrom and
shall not be affected thereby.
5.3 Expenses. Except as otherwise provided herein, the
parties hereto shall be responsible for their own fees and expenses incurred in
connection with this Agreement.
5.4 Press Releases. All press releases or other public
communications relating to this Agreement or the transactions contemplated
hereby will require the prior approval of the Investor and DMX, unless counsel
has advised either party that such release or other public communication must
immediately be issued and the issuing party has not been able, despite its good
faith efforts, to secure the prior approval of the other party.
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<PAGE> 16
5.5 Notices. All notices, requests, demands and other
communications which are required or may be given under this Agreement shall be
in writing and shall be delivered by personal delivery, by overnight courier or
by registered or certified mail, postage prepaid, to the parties as follows:
If to DMX.
DMX Inc.
11400 West Olympic Boulevard, Suite I 100
Los Angeles, California 90064-1507
Attention: Chief Executive Officer
With a copy to:
Irell & Manella, LLP
1800 Avenue of the Stars, Suite 900
Los Angeles, California 90067-4276
Attention: C. Kevin McGeehan, Esq.
If to Investor:
Tele-Communications, Inc.
5619 DTC Parkway
Englewood, Colorado 80111
Attention: Stephen M. Brett
or to such other address as any party shall have specified by notice in writing
to the others in accordance with the terms of this Section 5.5. All notices
shall be effective upon delivery. Rejection or other refusal to accept delivery
of notice or the inability to deliver because of change of address as to which
no notice was given hereunder shall be deemed to be receipt of the notice sent.
5.6 Entire Agreement. This Agreement and the Exhibits
hereto constitute the entire agreement among the parties hereto with respect
to the subject matter hereof.
5.7 Assignment. This Agreement and all of the provisions
hereof shall be binding and inure to the benefit of the parties hereto and their
respective successors and permitted assigns, but neither this Agreement nor any
of the rights, interests or obligations hereunder shall be assigned by either
party without the prior written consent of the other party.
5.8 Third Parties. Except as specifically set forth or
referred to herein, nothing herein expressed or implied is intended or shall be
construed to confer upon or give to any person other than the parties hereto
and their successors or assigns, any rights or remedies under or by reason of
this Agreement.
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<PAGE> 17
5.9 Section and Other Headings. The section and other
headings contained in this Agreement are for reference purposes only and shall
not affect the meaning or interpretation of this Agreement.
5.10 Counterparts. This Agreement may be executed in two
or more counterparts, each of which shall be deemed to be an original and all
of which together shall be deemed to be one and the same instrument.
5.11 Governing Law; Venue; Jurisdiction. This Agreement
shall be governed by, and construed in accordance with, the laws of the State
of California without regard to its conflicts of laws doctrines. In the event
of any litigation among the parties hereto, suit shall be brought in Los
Angeles County, California and the parties hereto hereby submit themselves to
the jurisdiction of the state and federal courts in Los Angeles County,
California.
5.12 Further Assurance. Each of the parties hereto agrees
that it will, whenever and as often as it shall be reasonably requested so to
do by another party hereto, execute, acknowledge and deliver, or cause to be
executed, acknowledged and delivered, any and all further instruments as may be
necessary or expedient in order to consummate the transactions provided for in
this Agreement, and do any and all further acts and things as may be necessary
or expedient in order to carry out the purpose and intent of this Agreement.
5.13 Survival of Representations and Warranties. Except as
otherwise specifically provided herein, the respective representations and
warranties of the parties hereto shall survive the Closing for a period
expiring on the first anniversary of the Closing, and shall thereafter
terminate and be of no further force or effect except as they relate to written
claims made by any such party to the others prior to such expiration.
5.14 Pronouns. All pronouns and any variations thereof
shall be deemed to refer to masculine, feminine, neuter, singular or plural,
except where the context of the Agreement clearly indicates otherwise.
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<PAGE> 18
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be duly executed as of the date first above written.
DMX INC. TELE-COMMUNICATIONS, INC.
By /s/ ROBERT M. MANNING By /s/ STEPHEN M. BRETT
---------------------------- ----------------------------
Name: Robert M. Manning Name: Stephen M. Brett
Title: Executive Vice President Title: Executive Vice President
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<PAGE> 19
EXHIBIT A
Shares Issued & Outstanding 44,244,970 (at May 14, 1996)
Common Stock, S.01 par value.
Shares Reserved Under Stock Option Plans
Total number of shares reserved is determined as 10% of the common stock
outstanding at any point in time plus 7,500,000 shares.
Stock Options outstanding at May 14, 1996
<TABLE>
<S> <C>
B. Menon 200,000
D. Talley 183,333
J. Demma 15,000
J. C. Sparkman 200,000
J. Rubinstein 2,370,000
J.R. Shaw 150,000
K. Burkhard 200,000
L. Troxel 150,000
M. Davis 5,000
O. Smith 100,000*
P. Dennis 131,250
R. Manning 256,250
S. Wynn 100,000
W. Kim 20,000
W. Tatum 25,000
W.T. Oliver 100,000
---------
4,205,833
Other Options Outstanding:
D. Foster 75,000
M. Kapp 50,000
Total Options Outstanding 4,330,833
=========
</TABLE>
------------
* Options shown are as claimed by former employee; grant of options has
not been authorized by DMX's Options Committee.
A-1
<PAGE> 20
EXHIBIT B
USE OF PROCEEDS
The proceeds of the issuance of shares will be used to pay the
obligations described on the attached schedule. Of the proceeds remaining after
payment of such obligations, approximately 75% (approximately $3,000,000) will
be used to provide working capital for DMX's European operations and
approximately 25% (approximately $1,000,000) will be used to provide working
capital for DMX's U.S. operations.
B-1
<PAGE> 21
SCHEDULE TO EXHIBIT B
AMOUNTS OWED TO TCI ENTITIES
AS OF 5/15/96
EUROPE(3)
- ---------
As of May 15, 1996
Subcarriers(1) 781,470
TDRSS 798,706
---------
Total due -- Europe 1,580,176
- --------------------------------------------------------------------------------
UNITED STATES
- -------------
Balance as of 5/15 (April/May Payments)
Equipment Lease 79,462
Transponders and Uplinking 750,435
---------
Total Amount Due -- US 829,897
- --------------------------------------------------------------------------------
AGGREGATE AMOUNT OWED -- COMBINED 2,410,073
- --------------------------------------------------------------------------------
TCI Loan Amount Outstanding(2) 2,574,126
- --------------------------------------------------------------------------------
AGGREGATE AMOUNT OWED -- INCLUDING
LOAN OUTSTANDING 4,984,199
- --------------------------------------------------------------------------------
NOTES
(1) Includes VAT.
(2) Includes accrued interest through 5/31/96
(3) Exchange Rate used = 1.534
- --------------------------------------------------------------------------------
B-2
<PAGE> 1
EXHIBIT 7(D)
AGREEMENT AND PLAN OF MERGER
DATED AS OF AUGUST 28,1995
BY AND AMONG
TCIEUROMUSIC, INC.,
UNITED ARTISTS PROGRAMMING INTERNATIONAL, INC.
AND
DMX INC.
<PAGE> 2
AGREEMENT AND PLAN OF MERGER
DATED AS OF AUGUST 28,1995
BY AND AMONG
TCI-EUROMUSIC, INC.,
UNITED ARTISTS PROGRAMMING INTERNATIONAL, INC.
AND
DMX INC.
TABLE OF CONTENTS
-------------
<TABLE>
<S> <C> <C>
ARTICLE I
DEFINITIONS
1.1 Terms Defined in this Section . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Terms Defined Elsewhere in this Agreement . . . . . . . . . . . . . . . . . 3
ARTICLE II
THE MERGER
2.1 Closing and Closing Date . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.2 The Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.3 Effective Time of the Merger . . . . . . . . . . . . . . . . . . . . . . . . 5
ARTICLE III
CONVERSION OF CAPITAL STOCK
3.1 Conversion of Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3.2 Conversion Number . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.3 Procedures for Determining TCIE Value . . . . . . . . . . . . . . . . . . . 7
3.4 Exchange of Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . 8
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF TCIE AND UAPI
4.1 Organization and Authority; Binding Effect . . . . . . . . . . . . . . . . . 9
4.2 No Breach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4.3 Governmental Consents and Approvals . . . . . . . . . . . . . . . . . . . . 9
4.4 Capitalization of TCIE . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
4.5 Assets and Liabilities of TCIE . . . . . . . . . . . . . . . . . . . . . . . 10
4.6 Investment Intent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
</TABLE>
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<TABLE>
<S> <C>
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF ACQUIROR
5.1 Organization and Authority; Binding Effect . . . . . . . . . . . . . . . . . 11
5.2 No Breach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
5.3 Governmental Consents and Approvals . . . . . . . . . . . . . . . . . . . . 12
5.4 Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
5.5 Recommendations of Acquiror's Board of Directors . . . . . . . . . . . . . . 13
5.6 Acquiror SEC Filings . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
5.7 Absence of Certain Changes . . . . . . . . . . . . . . . . . . . . . . . . . 13
5.8 Brokers and Finders . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
5.9 TaxFree Nature of Merger . . . . . . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE VI
OTHER AGREEMENTS
6.1 Access to Information . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
6.2 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
6.3 Reasonable Best Efforts . . . . . . . . . . . . . . . . . . . . . . . . . . 15
6.4 Notification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
6.5 Meeting of Stockholders of Acquiror . . . . . . . . . . . . . . . . . . . . 15
6.6 Regulatory and Other Authorizations . . . . . . . . . . . . . . . . . . . . 16
6.7 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
6.8 Tax Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
6.9 Board Representation . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE VII
CONDITIONS TO CLOSING
7.1 Conditions to the Obligations of TCIE, UAPI and Acquiror . . . . . . . . . . 19
ARTICLE VIII
TERMINATION
8.1 Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
8.2 Effect of Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
8.3 Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
ARTICLE IX
INDEMNIFICATION
9.1 Indemnification by UAPI . . . . . . . . . . . . . . . . . . . . . . . . . . 23
</TABLE>
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<PAGE> 4
<TABLE>
<S> <C> <C>
9.2 Indemnification by Acquiror . . . . . . . . . . . . . . . . . . . . . . . . 23
9.3 Third Party Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
ARTICLE X
MISCELLANEOUS
10.1 Survival of Representations and Warranties . . . . . . . . . . . . . . . . . 24
10.2 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
10.3 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
10.4 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
10.5 Rules of Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
10.6 Parties in Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
10.7 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
10.8 Payment of Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
10.9 No Personal Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
10.10 Binding Effect; Assignment . . . . . . . . . . . . . . . . . . . . . . . . . 26
10.11 Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
10.12 Extension; Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
10.13 Legal Fees; Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
10.14 Time . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
</TABLE>
-iii-
<PAGE> 5
AGREEMENT AND PLAN OF MERGER
This Agreement and Plan of Merger (this "Agreement"), dated as of
August 28, 1995, is made by and among United Artists Programming International,
Inc., a Delaware corporation ("UAPI"), TCI-Euromusic, Inc., a Colorado
corporation ("TCI-E"), and DMX Inc., a Delaware corporation ("Acquiror").
PRELIMINARY STATEMENTS
UAPI is the owner of all the issued and outstanding capital stock of
TCI-E. TCI-E is the holder of two promissory notes (individually a "Note" and
together the "Notes") dated May 19, 1993, one in the principal amount of
$24,436,000 payable by International Cablecasting Technologies Europe N.V.
d/b/a DMX Europe N.V. ("DMX-E"), and the other in the principal amount of
$564,000 payable by DMX. TCI-E also owns 19,216 shares of capital stock of
DMX-E (the "DMX-E Stock").
The Boards of Directors of TCI-E and Acquiror have each determined
that it is in the best interests of their respective corporations and
shareholders that TCI-E merge with and into Acquiror (the "Merger"), as a
result of which UAPI, as the sole shareholder of TCI-E immediately prior to the
Merger, would become a stockholder of Acquiror.
The parties intend that, for federal income tax purposes, the Merger
will qualify as a tax-free reorganization within the meaning of Section
368(a)(1)(A) of the Code, and this Agreement is adopted as a plan of
reorganization.
This Agreement constitutes a plan of merger with respect to the Merger
for purposes of Section 7-111-107 of the Colorado Corporation Law and an
agreement of merger with respect to the Merger for purposes of Section 252 of
the Delaware Corporation Law.
In consideration of the foregoing and the mutual agreements set forth
in this Agreement, the parties agree as follows:
ARTICLE I
DEFINITIONS
1.1 Terms Defined in this Section. The following terms, as used in
this Agreement, will have the meanings set forth in this Section:
"Acquiror Common Stock" means the common stock, $.01 par value per
share, of Acquiror, and any successor class or series of capital stock of
Acquiror, however designated.
"Affiliate" means, as to any Person, any other Person which, directly
or indirectly, controls, is under common control with, or is controlled by,
such Person. As used in this definition, "control" means possession, directly
or indirectly, of the power to direct or cause the direction of management
<PAGE> 6
or policies of a person (whether through the ownership of voting securities, by
contract, or otherwise), and the terms "controlling," "controlled by" and
"under common control with" have correlative meanings.
"Business Day" means any day other than a Saturday, Sunday or a day on
which banks in Denver, Colorado or Los Angeles, California are closed.
"Code" means the Internal Revenue Code of 1986, as amended.
"Colorado Corporation Law" means the Colorado Business Corporation
Act.
"Delaware Corporation Law" means the General Corporation Law of
Delaware.
"Exchange Act" means, collectively, the Securities Exchange Act of
1934, as amended, and, unless the context indicates otherwise, the rules and
regulations thereunder.
"Governmental Authority" means (i) the United States of America, (ii)
any state, commonwealth, territory or possession of the United States of
America and any political subdivision thereof (including counties,
municipalities and the like), (iii) any foreign (as to the United States of
America) sovereign entity and any political subdivision thereof or (iv) any
agency, authority or instrumentality of any of the foregoing, including any
court, tribunal, department, bureau, commission or board.
"HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended, and the rules and regulations thereunder.
"Person" means a human being or a corporation, association,
partnership, joint venture, trust, estate, limited liability company, limited
liability partnership or other entity or organization.
"Securities Act" means, collectively, the Securities Act of 1933, as
amended, and, unless the context indicates otherwise, the rules and regulations
thereunder.
"Tax" means any income, gross receipts, ad valorem, premium, excise,
value-added, sales, use, transfer, gains, franchise, license, severance, stamp,
occupation, service, lease, withholding, employment, payroll, premium,
property, or windfall profits tax, alternative or add-on-minimum tax, or other
tax, fee, or assessment, together with any interest and any penalty, addition
to tax or additional amount imposed by any Governmental Authority responsible
for the imposition of any such tax.
"Tax Return" means any return, report, statement, information
statement or similar document required to be filed with any Governmental
Authority with respect to Taxes.
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<PAGE> 7
1.2 Terms Defined Elsewhere in this Agreement. The following
terms, as used in this Agreement, have the meanings set forth in the sections
indicated below:
<TABLE>
<CAPTION>
Term Section
- ---- -------
<S> <C>
Acquiror Preamble
Acquiror Common Stock Value 3.2(c)
Acquiror SEC Filings 5.6
Agreement Preamble
Articles of Merger 2.3
Assumed Liabilities 9.1(a)
Average Trading Price 3.2(d)
Certificate of Merger 2.3
Closing 2.1
Closing Date 2.1
Conversion Number 3.2(a)
DMX-E Loan Agreement 4.5(a)
DMX-E Payable 3.2(e)
DMX-E Stock Preliminary Statements
Effective Time 2.3
Disputed TCI-E Value 3.3(c)
Merger Preliminary Statements
Nasdaq 3.2(d)
Notes Preliminary Statements
Note Rights 4.5(a)
SEC 5.6
Selection Date 6.9(b)
Surviving Corporation 2.2
TCI-E Preamble
TCI-E Common Stock 3.1(a)
</TABLE>
-3-
<PAGE> 8
<TABLE>
<CAPTION>
Term Section
- ---- -------
<S> <C>
TCI-E Common Stock Value 3.2(b)
TCI-E Taxes 6.8(a)
Termination Date 8.1 (c)
UAPI Preamble
</TABLE>
ARTICLE II
THE MERGER
2.1 Closing and Closing Date. As soon as practicable after the
satisfaction or, to the extent permitted by law, waiver of the conditions set
forth in Article VII, (but not later than three Business Days after the
satisfaction or waiver of the conditions set forth in Section 7.1 (other than
the condition in Section 7.1 (c)), Section 7.2(e) and Section 7.3(d)), and
immediately prior to the filing of the Articles of Merger and the Certificate
of Merger, a closing of the transactions contemplated by this Agreement (the
"Closing") will take place at the offices of Manatt, Phelps & Phillips, 11355
West Olympic Boulevard, Los Angeles, California or such other location as the
parties may agree. The date on which the Closing occurs is referred to in this
Agreement as the "Closing Date."
2.2 The Merger. Subject to the terms and conditions of this
Agreement, the Colorado Corporation Law and the Delaware Corporation Law, at
the Effective Time TCI-E will be merged with and into Acquiror, the separate
existence of TCI-E will cease and Acquiror will continue as the corporation
surviving the Merger (the "Surviving Corporation"). From and after the
Effective Time, and without any further action on the part of any Person, the
Merger will have all the effects provided by applicable law, including Section
7-111-106 of the Colorado Corporation Law and Section 259 of the Delaware
Corporation Law, the effects described in Section 3.1 with respect to the
capital stock of TCI-E and, subject to applicable law, the following additional
effects:
(a) Certificate of Incorporation. At the Effective Time,
the Certificate of Incorporation of Acquiror will continue to be the
Certificate of Incorporation of the Surviving Corporation, and such Certificate
of Incorporation may thereafter be amended as provided therein and by the
Delaware Corporation Law.
(b) Bylaws. At the Effective Time, the Bylaws of
Acquiror, as in effect immediately prior to the Effective Time, will continue
to be the Bylaws of the Surviving Corporation, and such Bylaws may thereafter
be amended or repealed in accordance with their terms and the Certificate of
Incorporation of the Surviving Corporation and as provided by the Delaware
Corporation Law.
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<PAGE> 9
(c) Directors. At the Effective Time, the directors of
Acquiror immediately prior to the Effective Time, together with the two
directors appointed pursuant to Section 6.9, will be the directors of the
Surviving Corporation, each to hold office in accordance with the Certificate
of Incorporation and Bylaws of the Surviving Corporation and the Delaware
Corporation Law and until the earlier of such director's resignation or removal
or until such director's successor is duly elected and qualified, as the case
may be.
(d) Officers. At the Effective Time, the officers of
Acquiror immediately prior to the Effective Time will continue as the officers
of the Surviving Corporation, each to hold office in accordance with the
Certificate of Incorporation and Bylaws of the Surviving Corporation and the
Delaware Corporation Law and until the earlier of such officer's resignation or
removal or until such officer's successor is duly appointed and qualified, as
the case may be.
2.3 Effective Time of the Merger. Subject to the terms and
conditions in this Agreement, the parties will (a) prepare, sign and
acknowledge, in accordance with the Colorado Corporation Law, articles of
merger (the "Articles of Merger") and deliver the Articles of Merger to the
Secretary of State of the State of Colorado for filing pursuant to the Colorado
Corporation Law on the Closing Date and (b) prepare, execute and acknowledge,
in accordance with the Delaware Corporation Law, a certificate of merger (the
"Certificate of Merger") and deliver the Certificate of Merger to the Secretary
of State of the State of Delaware for filing pursuant to the Delaware
Corporation Law on the Closing Date. The Merger will become effective upon the
later of the filing of the Articles of Merger with the Secretary of State of
the State of Colorado and the filing of the Certificate of Merger with the
Secretary of State of the State of Delaware. As used in this Agreement, the
"Effective Time" means the later of the time at which the Articles of Merger
are filed with the Secretary of State of the State of Colorado and the time at
which the Certificate of Merger is filed with the Secretary of State of the
State of Delaware.
ARTICLE III
CONVERSION OF CAPITAL STOCK
3.1 Conversion of Stock. At the Effective Time, by virtue of the
Merger and without any action on the part of the holder of any shares of
capital stock of any corporation:
(a) Each share of common stock, $1.00 par value per
share, of TCI-E ("TCI-E Common Stock") issued and outstanding immediately prior
to the Effective Time will be converted into and will thereafter evidence and
become that number of validly issued, fully paid and nonassessable shares of
Acquiror Common Stock equal to the Conversion Number. If any holder of TCI-E
Common Stock is entitled to receive a fraction of a share of Acquiror Common
Stock, the number of shares of Acquiror Common Stock issuable to such holder
will be rounded to the nearest whole number.
(b) Each share of the capital stock of Acquiror issued
and outstanding immediately prior to the Effective Time will remain issued and
outstanding.
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<PAGE> 10
3.2 Conversion Number. For purposes of this Agreement:
(a) The "Conversion Number" will be equal to the quotient
(rounded to the nearest one-thousandth) of the TCI-E Common Stock Value divided
by the Acquiror Common Stock Value (rounded to the nearest one-thousandth).
(b) The "TCI-E Common Stock Value" will equal the
quotient of the TCI-E Value divided by the number of shares of TCI-E Common
Stock issued and outstanding immediately prior to the Effective Time.
(c) The "Acquiror Common Stock Value" will be $2.50,
subject to adjustment as provided below:
(i) If before the Effective Time there occurs the
ex-dividend date or record date with respect to (A) a dividend or other
distribution on outstanding shares of any class of capital stock of Acquiror in
the form of shares of Acquiror Common Stock, (B) a subdivision of the then
outstanding shares of Acquiror Common Stock into a greater number of shares of
Acquiror Common Stock or (C) a combination of the then outstanding shares of
Acquiror Common Stock into a smaller number of shares of Acquiror Common Stock,
then the Acquiror Common Stock Value then in effect will be adjusted by
multiplying it by a fraction, the numerator of which is the number of shares of
Acquiror Common Stock outstanding immediately before the event giving rise to
such adjustment and the denominator of which is the number of shares of
Acquiror Common Stock outstanding immediately after such event.
(ii) If before the Effective Time there occurs the
ex-dividend date or record date with respect to a dividend or other
distribution on outstanding shares of Acquiror Common Stock in the form of
cash, securities or other assets (other than any cash dividend payable out of
earnings or any dividend or distribution in the form of Acquiror Common Stock),
then the Acquiror Common Stock Value then in effect will be adjusted by
multiplying it by a fraction, the numerator of which is the Average Trading
Price of Acquiror Common Stock on the record date (or if earlier, the
ex-dividend date) of such dividend or distribution less the amount of cash or
the fair market value on such date (as reasonably determined by Acquiror's
Board of Directors) of the portion of the securities or other assets so to be
distributed that is applicable to one share of Acquiror Common Stock, and the
denominator of which is the Average Trading Price of Acquiror Common Stock on
such date.
(iii) If any event involving dividends or
distributions with respect to, or any change in the number of, outstanding
shares of capital stock of Acquiror occurs as to which the other provisions of
this Section 3.2(c) are not strictly applicable but the failure to make an
adjustment in the Acquiror Common Stock Value would be inconsistent with the
general intent and principles reflected in such provisions, or if strictly
applicable would be inconsistent with the general intent and principles
reflected in such provisions, then Acquiror, by action of its Board of
Directors,
-6-
<PAGE> 11
will make an adjustment, on a basis that Acquiror's Board of Directors
determines reasonably and in good faith is consistent with such general intent
and principles. Acquiror will respond reasonably and in good faith to any
request by UAPI that Acquiror's Board of Directors make a determination
pursuant to this Section 3.2(c). Acquiror may, at its election, request that
UAPI approve such an adjustment, and if UAPI grants such approval, Acquiror
will be deemed to have acted reasonably and in good faith in making that
adjustment. The failure of Acquiror to request such approval or of UAPI to
approve such a request will not be construed as in any way affecting the rights
of any of the parties.
(d) "Average Trading Price" of Acquiror Common Stock will
equal, as of a particular date, the average of the reported closing market
prices of such stock for the 10 consecutive trading days ending on the day
prior to the date of determination. The closing market price for each day in
question will be the last sale price, regular way or, if no such sale takes'
place on such day, the average of the closing bid and asked prices, regular
way, in either case as reported in the principal consolidated transaction
reporting system of the principal national securities exchange on which such
stock is listed or admitted to trading or, if such stock is not listed or
admitted to trading on any national securities exchange, the last quoted sale
price or, if no such sale price is quoted, the average of the high bid and low
asked prices in the over-the-counter market, as reported by the Nasdaq National
Market System ("Nasdaq") or such other system then in use or, if on any such
trading day such capital stock is not quoted by any such organization, the
average of the closing bid and asked prices as furnished by the professional
market maker who has been most active in making a market in such capital stock
during the preceding 12 months. The Average Trading Price of such stock will be
appropriately adjusted to reflect the effects of any stock dividend, stock
split, reclassification, recapitalization or combination affecting such stock,
the record date or ex-dividend date of which occurs during the period in which
the Average Trading Price is to be determined.
(e) The "TCI-E Value" means the sum, calculated as of the
Effective Time. of (i) $120,100 plus (ii) the unpaid principal balance of the
Notes plus (iii) all accrued and unpaid interest on the Notes as of August 28,
1995, minus (iv) the amount, not to exceed $ 1,600,000, by which the aggregate
amount payable by DMX-E to Acquiror exceeds the aggregate amount payable by
Acquiror to DMX-E (the "DMX-E Payable"). The calculation of amounts payable by
DMX-E to Acquiror will be made in accordance with the Technology License and
Services Agreement dated May 19, 1993, between Acquiror and DMX-E.
3.3 Procedures for Determining TCI-E Value.
(a) At least five Business Days before the Closing Date,
(i) TCI-E will deliver to Acquiror a schedule setting forth the amount of each
item required to calculate the TCI-E Value as of the Closing Date pursuant to
Section 3.2(e) other than the DMX-E Payable and (ii) Acquiror will deliver to
TCI-E Acquiror's calculation of the DMX-E Payable as of the Closing Date. TCI-E
and Acquiror will make available to each other before the Closing all
information that the other reasonably requests in support of the calculations
provided pursuant to the preceding sentence.
-7-
<PAGE> 12
(b) If neither Acquiror nor TCI-E provides a written
notice of disagreement with the other's calculation at least two Business Days
before the Closing Date, the calculation of the TCIE Value and the Conversion
Number based on the amounts so provided will be final, conclusive and
nonappealable.
(c) If either Acquiror or TCI-E provides a written notice
of disagreement with the other's calculations within the period specified in
Section 3.3(b), the calculation of the TCI-E Value using the amounts provided
pursuant to Section 3.3(a) (the "Disputed TCI-E Value") will be used to
calculate the Conversion Number and the failure of the parties to agree on such
calculations will not be cause for postponement of the Closing. Acquiror and
UAPI will negotiate in good faith to resolve any such dispute for a period of
30 days after the Closing. At the end of such period, if the dispute has not
been resolved or the negotiation period has not been extended by agreement
between UAPI and Acquiror, the dispute will be referred to an independent
public accounting firm selected by agreement of UAPI and Acquiror (or, if UAPI
and Acquiror cannot agree to the selection of such a firm within five days
after the end of such 30-day period, an independent public accounting firm
selected by KPMG Peat Marwick), which firm will render its decision as to
whether Acquiror's position is correct, UAPI's position is correct or some
position between the two is correct (together with an explanation of the basis
therefor) to the parties to the dispute not later than 30 days following
submission of the dispute to it, which decision will be final, conclusive and
nonappealable. The fees and expenses of such accounting firm will be paid
one-half by Acquiror and one-half by UAPI.
(d) If the TCI-E Value as finally determined is less than
the Disputed TCI-E Value, UAPI will deliver to Acquiror for cancellation
certificates representing the shares of Acquiror Class B Common Stock in excess
of those required to be issued, together with all nontaxable distributions, if
any, made with respect to such shares after the date of their issuance. Any
cash dividends or other taxable distributions payable with respect to such
shares during the period of time that the shares were outstanding will be
retained by the holder of such shares notwithstanding the cancellation of such
shares. If the TCI-E Value as finally determined is greater than the Disputed
TCI-E Value, Acquiror will deliver to the Person entitled to such shares
certificates representing the appropriate number of shares of Acquiror Common
Stock, together with any dividends or distributions to which such Person would
have been entitled had such shares been issued at the Closing.
3.4 Exchange of Certificates. At the Closing, (a) UAPI will
deliver to Acquiror certificates representing all the issued and outstanding
shares of TCI-E Common Stock and Acquiror will deliver to UAPI (or such other
Person as UAPI may designate in writing) certificates representing the number
of shares of Acquiror Common Stock to be issued in the Merger pursuant to this
Agreement (subject, in case there is a Disputed TCI-E Value, to final
determination pursuant to Section 3.3), which shares of Acquiror Common Stock
will be deemed to be issued at the Effective Time and (b) UAPI will deliver or
cause to be delivered to Acquiror the Notes and certificates representing the
DMX-E Stock held by TCI-E.
-8-
<PAGE> 13
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF TCI-E AND UAPI
TCI-E and UAPI jointly and severally represent and warrant to Acquiror
as follows:
4.1 Organization and Authority; Binding Effect. Each of TCI-E and
UAPI is a corporation duly organized, validly existing and in good standing
under the laws of its state of incorporation and has all requisite corporate
power and authority to execute and deliver, to perform its obligations under,
and to consummate the transactions contemplated by, this Agreement. TCI-E has
all requisite corporate power and authority to own, lease and operate its
properties and to carry on its business as now being conducted and is duly
qualified to do business in each jurisdiction in which the properties owned,
leased or operated by it or the nature of the business conducted by it makes
such qualification necessary, except where the failure so to be qualified would
not have a material adverse effect on the financial condition, results of
operations, liabilities, assets or business of TCI-E. All necessary corporate
action required to be taken by or on behalf of TCI-E and UAPI by applicable
law, the Certificate or Articles of Incorporation and Bylaws of TCI-E and UAPI
or otherwise to authorize (a) the approval, execution and delivery on behalf of
TCI-E and UAPI of this Agreement and (b) the performance by each of TCI-E and
UAPI of its obligations under this Agreement and the consummation of the
transactions contemplated by this Agreement has been taken. Assuming that this
Agreement constitutes a valid, binding and enforceable agreement of Acquiror,
this Agreement constitutes a valid and binding agreement of each of TCI-E and
UAPI, enforceable against each of them in accordance with its terms, except (x)
as enforcement of this Agreement may be limited by applicable bankruptcy,
insolvency, moratorium, or similar laws of general application relating to or
affecting creditors' rights, including the effect of statutory or other laws
regarding fraudulent conveyances and preferential transfers and (y) for
limitations imposed by general principles of equity. TCI-E has delivered to
Acquiror true and complete copies of its Articles of Incorporation and Bylaws.
4.2 No Breach. The execution and delivery of this Agreement by
TCI-E and UAPI do not, and the consummation of the transactions contemplated by
this Agreement by TCI-E and UAPI will not, (a) violate or conflict with the
Articles or Certificate of Incorporation or Bylaws of TCI-E or UAPI or (b) in
any material respect, constitute a breach or default (or an event that with
notice or lapse of time or both would become a breach or default) or give rise
to any lien or any third-party right of termination, cancellation, modification
or acceleration under any instrument or agreement to which TCI-E or UAPI is a
party or by which either of them or assets of either of them is bound or (c)
subject to obtaining the approvals and making the filings described in Section
4.3, in any material respect, violate any statute, law, ordinance, rule or
regulation applicable to TCI-E, UAPI or assets of either of them.
4.3 Governmental Consents and Approvals. Neither the execution and
delivery of this Agreement by TCI-E and UAPI nor the consummation of the
transactions contemplated by this Agreement will require any consent, approval,
authorization or permit of, or any filing with or notification to, any
Governmental Authority, except for (a) filing of the Certificate of Merger, the
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<PAGE> 14
Articles of Merger and other documents necessary or appropriate to effect the
Merger and (b) notification pursuant to, and expiration or termination of the
waiting period under, the HSR Act.
4.4 Capitalization of TCI-E. The authorized capital stock of TCI-E
consists of 1,000 shares of TCI-E Common Stock. There are issued and
outstanding 1,000 shares of TCI-E Common Stock. All issued and outstanding
shares of TCI-E Common Stock were validly issued, are fully paid and
nonassessable and are owned beneficially and of record by UAPI. There are no
options, warrants, calls, subscriptions or other commitments obligating TCI-E
or UAPI to issue (or reserve for issue), transfer or sell any securities of
TCI-E. There is no voting trust or other agreement to which either TCI-E or
UAPI is a party with respect to the voting of capital stock of TCI-E.
4.5 Assets and Liabilities of TCI-E.
(a) Assets. TCI-E has no material assets other than (i)
its rights under this Agreement, (ii) the DMX-E Stock and (iii) its rights
(collectively, the "Note Rights") in, to and under (A) the Notes, (B) the
Agreement for Acquisition of Capital Stock and for the Governance of
International Cablecasting Technologies Europe N.V. dated as of May 19, 1993,
by and among DMX-E, Acquiror and TCI-E, as amended, (C) the Loan Agreement
dated as of May 19, 1993, between DMX-E and TCI-E (the "DMX-E Loan Agreement"),
(D) the Borrower Security Agreements (as defined in the DMX-E Loan Agreement),
(E) the Contribution Agreement dated as of May 19, 1993, between Acquiror and
TCI-E, (F) the Non-Competition Agreement dated as of May 19, 1993, between
Acquiror and TCI-E, (G) the Security Agreement dated as of May 19, 1993,
between Acquiror and TCI-E and (H) the Pledge Agreement and Deed of Pledge
dated as of May 19, 1993, among Acquiror, DMX-E and TCI-E.
(b) Liabilities. Except for (i) its obligations under the
instruments and agreements evidencing the Note Rights, (ii) its obligations
under this Agreement and (iii) its obligations for amounts payable to one or
more Affiliates of Tele-Communications, Inc. (which liabilities will be
terminated immediately prior to the Effective Time), TCI-E has no material
liability or obligation of any kind.
4.6 Investment Intent. UAPI is acquiring the Acquiror Common Stock
to be acquired by it in the Merger as principal for its own account and not
with a view to, or for sale in connection with, any distribution thereof. UAPI
is an accredited investor as defined in Rule 501 of Regulation D under the
Securities Act.
4.7 Receipt of Information. UAPI has received the Acquiror SEC
Filings and all other documents and materials Acquiror has provided to it in
connection with the transactions contemplated by this Agreement. UAPI has had
access to and an opportunity to review all documents and other materials
requested of DMX and has been given an opportunity to ask such questions of
Acquiror concerning the business, operations, financial condition assets and
liabilities of Acquiror and other relevant matters as UAPI has deemed necessary
or desirable, and has been
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<PAGE> 15
given all such information as UAPI has requested, to evaluate the merits and
risks of the investment in shares of Acquiror Common Stock issuable in the
Merger.
4.8 Legends. UAPI acknowledges that each certificate or other
document evidencing the shares of Acquiror Common Stock issuable in the Merger
will be endorsed with the legends set forth below:
(a) "THE SHARES REPRESENTED HEREBY HAVE NOT BEEN
REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF
1933, AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED,
PLEDGED OR HYPOTHECATED ABSENT AN EFFECTIVE
REGISTRATION THEREOF UNDER SUCH ACT OR COMPLIANCE
WITH AN AVAILABLE EXEMPTION FROM REGISTRATION. THE
COMPANY MAY REFUSE TO AUTHORIZE ANY TRANSFER OF THE
SHARES IN RELIANCE ON AN EXEMPTION FROM REGISTRATION
UNTIL IT HAS RECEIVED AN OPINION OF COUNSEL,
REASONABLY SATISFACTORY TO THE COMPANY AND ITS
COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED."
(b) If required by the authorities of any state in
connection with the issuance or sale of such shares,
the legend required by such state authority.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF ACQUIROR
Acquiror represents and warrants to TCI-E as follows:
5.1 Organization and Authority: Binding Effect. Acquiror is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware. Acquiror has all requisite corporate power and
authority to own, lease and operate its properties and to carry on its business
as now being conducted and is duly qualified to do business in each
jurisdiction in which the properties owned, leased or operated by it or the
nature of the business conducted by it makes such qualification necessary,
except where the failure so to be qualified would not have a material adverse
effect on the financial condition, results of operations, liabilities, assets
or business of Acquiror. Acquiror has all requisite corporate power and
authority to execute and deliver this Agreement and, subject to approval by
Acquiror's stockholders, to perform its obligations under, and to consummate
the transactions contemplated by, this Agreement. Subject to approval by
Acquiror's stockholders, all necessary corporate action required to have been
taken by or on behalf of Acquiror
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by applicable law, its Certificate of Incorporation and Bylaws or otherwise to
authorize (a) the approval, execution and delivery on behalf of Acquiror of
this Agreement and (b) the performance by Acquiror of its obligations under
this Agreement and the consummation of the transactions contemplated by this
Agreement has been taken. Assuming that this Agreement constitutes a valid,
binding and enforceable agreement of TCI-E and UAPI, this Agreement constitutes
a valid and binding agreement of Acquiror, enforceable against it in accordance
with its terms, except (x) as enforcement of this Agreement may be limited by
applicable bankruptcy, insolvency, moratorium, or similar laws of general
application relating to or affecting creditors' rights, including the effect of
statutory or other laws regarding fraudulent conveyances and preferential
transfers and (y) for limitations imposed by general principles of equity.
5.2 No Breach. The execution and delivery of this Agreement by
Acquiror do not, and, subject to approval by Acquiror's stockholders, the
performance by Acquiror of its obligations under, and the consummation by
Acquiror of the transactions contemplated by, this Agreement will not, (a)
violate or conflict with the Certificate of Incorporation or Bylaws of
Acquiror, (b) in any material respect, constitute a breach or default (or an
event that with notice or lapse of time or both would become a breach or
default) or give rise to any lien or any third-party right of termination,
cancellation, modification or acceleration under any instrument or agreement to
which Acquiror is a party or by which Acquiror or any of its assets is bound or
(c) subject to obtaining the approvals and making the filings described in
Section 5.3, in any material respect, constitute a violation of any statute,
law, ordinance, rule or regulation.
5.3 Governmental Consents and Approvals. Neither the execution and
delivery of this Agreement by Acquiror nor the consummation of the transactions
contemplated by this Agreement by Acquiror will require any consent, approval,
authorization or permit of, or filing with or notification to, any Governmental
Authority, except for (a) compliance with federal and state securities laws,
(b) the filing of the Certificate of Merger, the Articles of Merger and other
documents necessary or appropriate to effect the Merger and (c) notification
pursuant to, and expiration or termination of the waiting period under, the HSR
Act.
5.4 Capitalization.
(a) As of the date of this Agreement, the authorized
capital stock of Acquiror consists of 100,000,000 shares of Acquiror Common
Stock, of which 39,494,970 shares are issued and outstanding, without giving
effect to the sale of shares pursuant to the Stock Purchase Agreement dated as
of the date of this Agreement, between Acquiror and TCI Turner Preferred, Inc.
All issued and outstanding shares of capital stock of Acquiror were validly
issued and are fully paid and nonassessable. Except as provided in this
Agreement or as described in Schedule 5.4(a), there are no (and at no time
prior to the Effective Time will there be any) options, warrants, calls,
subscriptions or other commitments of any kind obligating Acquiror to issue (or
reserve for issued), transfer or sell any capital stock of Acquiror.
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(b) The shares of Acquiror Common Stock to be issued in
the Merger, when issued in accordance with the terms of this Agreement, will be
duly authorized, validly issued, fully paid and nonassessable. All such shares
of Acquiror Common Stock will be listed on such national securities exchange,
if any, as are other shares of the same class, or if shares of such class are
quoted on Nasdaq, will be eligible for quotation on Nasdaq.
5.5 Recommendations of Acquiror's Board of Directors. The Board of
Directors of Acquiror has, by resolution duly adopted at a meeting duly called
and held, adopted this Agreement as an agreement of merger under Section 252 of
the Delaware Corporation Law and approved the Merger and the other transactions
contemplated by this Agreement on the terms and conditions set forth herein and
will recommend this Agreement, the Merger and such transactions for approval by
Acquiror's stockholders.
5.6 Acquiror SEC Filings. Acquiror has furnished UAPI with a
complete copy of Acquiror's Annual Report on Form 10-K for its fiscal year
ended September 30, 1994 (the "Annual Report"), a Quarterly Report on Form
10-Q for the fiscal quarter ended December 31, 1994, a Quarterly Report on Form
10-Q for the fiscal quarter ended March 31, 1995, a Quarterly Report on Form
10-Q for the fiscal quarter ended June 30, 1995 (the "June 10-Q") and a
definitive proxy statement (the "Proxy Statement") for Acquiror's Annual
Meeting of Stockholders held on April 27, 1995 (collectively, the "Acquiror SEC
Filings"), which have previously been filed with the Securities and Exchange
Commission ("SEC"). The Acquiror SEC Filings when filed with the SEC complied
in all material respects with the Exchange Act. The June 10-Q and the Proxy
Statement are the only regular and periodic reports or proxy statements
required to be filed by Acquiror pursuant to Sections 13 and 14 of the Exchange
Act with the SEC since June 30, 1995. The Annual Report describes, among other
things, the business, operations and principal properties of Acquiror in
accordance with the requirements of the applicable report form. As of the date
of their filing, the Acquiror SEC Filings did not contain any untrue statement
of a material fact or omit to state any material fact necessary in order to
make the statements therein not misleading. Except as disclosed in the
Acquiror SEC Filings, since June 30, 1995, there have been no material changes
in the business, results of operations, financial condition or properties of
Acquiror required to be reported to the SEC pursuant to the Exchange Act.
5.7 Absence of Certain Changes. Since June 30, 1995, Acquiror has
not:
(a) suffered any adverse change in its working capital,
financial condition, assets, liabilities, reserves, business or operations
which is material to Acquiror,
(b) incurred, paid, discharged or satisfied any claims,
liabilities or obligations other than the incurrence, payment, discharge or
satisfaction of liabilities and obligations (i) reflected or reserved against
on the balance sheet dated as of June 30, 1995 contained in the June 10-Q or
(ii) incurred in the ordinary course of business and consistent with past
practices;
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(c) permitted or allowed any of its property or assets
(real, personal or mixed, tangible or intangible) to be subjected to any
material mortgage, pledge, lien, security interest, encumbrance, restriction or
change of any kind, except for (a) mechanic's, materialman's or similar liens
incurred in the ordinary course of business and (b) liens for current taxes not
yet due, none of which are material in amount;
(d) canceled any material debts or waived any material
claims or rights;
(e) sold, transferred or otherwise disposed of a material
portion of any of its properties or assets (real, personal or mixed, tangible
or intangible), except in the ordinary course of business and consistent with
past practice;
(f) declared, paid or set aside for payment any dividend
or other distribution in respect to its capital stock or redeemed, purchased or
otherwise acquired, directly or indirectly, any shares of capital stock or
other securities of Acquiror;
(g) made any change in any method of accounting or
accounting practice;
(h) paid, loaned or advanced any amount to, or sold,
transferred or leased any properties or assets (real, personal or mixed,
tangible or intangible) to, or entered into any agreement or arrangement with,
any of its officers or directors or any Affiliate of any of its officers or
directors except for directors' fees, compensation to officers at rates not
exceeding the rates of compensation reflected in the Acquiror SEC Filings and
the grant of options as disclosed in Schedule 5.4(a); or
(i) entered into any transaction not in the ordinary
course of business;
(j) except with respect to DMX-E, made any loans to,
guaranteed any obligations of, or made any equity investments in, any Person,
except for loans, guarantees, obligations or equity investments in amounts
which are not material; or
(k) agreed, whether in writing or otherwise, to take any
action described in this Section.
5.8 Brokers and Finders. Neither Acquiror nor any of its officers,
directors, employees, or Affiliates has employed any broker or finder or
incurred any liability for any brokerage fees, commissions, or finder's fees in
connection with the transactions contemplated by this Agreement.
5.9 Tax-Free Nature of Merger. Acquiror has no plan or intention
to take or omit to take any action that would adversely affect the
qualification of the Merger as a reorganization within the meaning of Section
368(a) of the Code.
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ARTICLE VI
OTHER AGREEMENTS
6.1 Access to Information. Between the date of this Agreement and
the Effective Time, TCI-E and Acquiror each will (a) give the other party and
its authorized representatives reasonable access, during regular business hours
upon reasonable notice, to all offices and other facilities of such party and
its subsidiaries and to all books and records of such party and its
subsidiaries, (b) permit the other party to make such reasonable inspections of
the offices, facilities, books, and records described in clause (a) as it may
require and (c) cause its officers and those of its subsidiaries to furnish the
other party with such financial and operating data and other information with
respect to the business and properties of TCI-E or Acquiror and its
subsidiaries, as the case may be, as the other party may from time to time
reasonably request. All such access and information obtained by either TCI-E or
Acquiror and their respective authorized representatives will be subject to
Section 6.2.
6.2 Confidentiality. No party will issue any press release or make
any other public announcement regarding this Agreement or the transactions
contemplated hereby without the consent of the other parties. Each party will
hold, and will cause its employees, consultants, advisors and agents to hold,
in confidence, the terms of this Agreement and any non-public information
concerning the other party obtained pursuant to this Agreement. Notwithstanding
the preceding, a party may disclose such information to the extent required by
law (including disclosure requirements under federal and state securities
laws), but the party proposing to disclose such information will first notify
and consult with the other party concerning the proposed disclosure, to the
extent reasonably feasible. Each party also may disclose such information to
employees, consultants, advisors, agents and actual or potential lenders or
equity investors whose knowledge is necessary to facilitate the consummation of
the transactions contemplated by this Agreement. Each party's obligation to
hold information in confidence will be satisfied if it exercises the same care
with respect to such information as it would exercise to preserve the
confidentiality of its own similar information.
6.3 Reasonable Best Efforts. Each of the parties to this Agreement
will use its reasonable best efforts to take, or cause to be taken, all
appropriate action, and to do, or cause to be done, all things necessary,
proper or advisable under applicable law to consummate and make effective the
transactions contemplated by this Agreement in the most expeditious manner
practicable, including the satisfaction of all conditions to the Merger.
6.4 Notification. Each party to this Agreement will, in the event
of, or promptly after obtaining knowledge of the occurrence or threatened
occurrence of, any fact or circumstance that would cause or constitute a breach
of any of its representations and warranties set forth herein, give notice
thereof to the other parties and will use its reasonable best efforts to
prevent or remedy such breach.
6.5 Meeting of Stockholders of Acquiror. Acquiror will take all
action necessary, in accordance with the Delaware Corporation Law and its
Certificate of Incorporation and Bylaws, to
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duly call, give notice of, convene and hold a meeting of its stockholders as
promptly as practicable, to consider and vote upon the adoption and approval of
this Agreement (as an agreement of merger under Section 252 of the Delaware
Corporation Law), the Merger and the other transactions contemplated by this
Agreement, to the extent such approval is required by the Delaware Corporation
Law, Acquiror's Certificate of Incorporation and Part III of Schedule D to the
By-Laws of the National Association of Securities Dealers, Inc. The stockholder
vote required for the adoption and approval of this Agreement, the Merger and
the other transactions contemplated by this Agreement will be the vote required
by the Delaware Corporation Law and Acquiror's Certificate of Incorporation.
Subject to the fiduciary duty of the Board of Directors of Acquiror under
applicable law, Acquiror will use its reasonable best efforts to secure the
vote of stockholders required by the Delaware Corporation Law and Acquiror's
Certificate of Incorporation to effect such transactions within 90 days after
the date of this Agreement.
6.6 Regulatory and Other Authorizations.
(a) Governmental Consents. TCI-E and Acquiror will use
their respective reasonable best efforts to obtain all authorizations,
consents, orders and approvals of federal, state, local and foreign regulatory
bodies and officials and non-governmental third parties that may be or become
necessary for its respective execution and delivery of, and the performance of
its respective obligations pursuant to, this Agreement, and will cooperate
fully with the other parties in promptly seeking to obtain all such
authorizations, consents, orders and approvals.
(b) HSR Act Filings. As soon as practicable after the
execution of this Agreement, but in any event no later than 15 days after such
execution, UAPI and Acquiror each will complete and file, or cause to be
completed and filed, any notification and report required to be filed under the
HSR Act. Each of the parties will take any additional action that may be
necessary, proper or advisable, will cooperate to prevent inconsistencies
between their respective filings and will furnish to each other such necessary
information and reasonable assistance as the other may reasonably request in
connection with its preparation of necessary filings or submissions under the
HSR Act. Notwithstanding anything to the contrary in this Agreement, if UAPI,
in its sole opinion, considers a request from a Governmental Authority for
additional data and information in connection with the HSR Act to be unduly
burdensome, UAPI and TCI-E may terminate this Agreement.
6.7 Further Assurances. Each of the parties to this Agreement will
execute such documents and other instruments and take such further actions as
may be reasonably required or desirable to carry out the provisions of this
Agreement and consummate the transactions contemplated by this Agreement or, at
and after the Closing Date, to evidence the consummation of the transactions
contemplated by this Agreement. Upon the terms and subject to the conditions of
this Agreement, each of the parties to this Agreement will take or cause to be
taken all actions and to do or cause to be done all other things necessary,
proper, or advisable to consummate and make effective as promptly as
practicable the transactions contemplated by this Agreement and to obtain in a
timely manner all necessary waivers, consents and approvals and to effect all
necessary registrations and filings.
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6.8 Tax Matters.
(a) UAPI Obligations.
(i) UAPI will be liable for, will pay, and will
indemnify and hold the Surviving Corporation harmless against, all Taxes
payable by TCI-E attributable to any taxable period ending at or before the
Effective Time ("TCI-E Taxes") and any liabilities, losses, damages, costs and
expenses (including court costs and reasonable professional fees incurred in
the investigation, defense or settlement of any claims covered by this
indemnity) attributable to any such TCI-E Taxes.
(ii) UAPI will be entitled to any credits or
refunds of TCI-E Taxes payable or allocable to TCI-E or its shareholders at any
time, and UAPI will indemnify and hold harmless the Surviving Corporation
against any subsequent disallowance of such credits or refunds.
(iii) UAPI will be responsible for the preparation
and filing of all Tax Returns relating to TCI-E Taxes for all taxable periods
that end at or before the Effective Time, including returns with respect to
such periods that are due after the Closing Date, and UAPI will be responsible
for the payment of all Taxes payable by TCI-E shown to be due thereon.
(iv) UAPI will be designated as the agent for
TCI-E with respect to TCI-E Taxes, and will have the sole authority to deal
with any matters relating to TCI-E Taxes, including the filing of amended
returns, except that such authority will not include a change of accounting
method or revocation of tax elections that reasonably could be expected to have
an adverse effect on the Surviving Corporation after the Effective Time.
(v) Acquiror will promptly inform UAPI whenever
any taxing authority asserts a claim, makes an assessment or otherwise disputes
the amount of any TCI-E Taxes. UAPI, at its cost and expense, will have the
right to control any resulting proceedings and to determine whether and when to
settle any such claim, assessment or dispute.
(b) Acquiror Obligations.
(i) Acquiror will be liable for, will pay, and
will indemnify and hold UAPI and its Affiliates harmless against, all Taxes (A)
payable by the Surviving Corporation attributable to any taxable period
beginning at or after the Effective Time or (B) resulting from the failure of
the Merger to qualify as a tax-free reorganization under Section 368(a) of the
Code to the extent such failure results from any action or omission by
Acquiror, and, in each case, any and all liabilities, losses, damages, costs
and expenses (including court costs and reasonable professional fees incurred
in the investigation, defense or settlement of any claims covered by this
indemnity) attributable to any such Taxes.
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(ii) Whenever any taxing authority asserts a claim
or makes an assessment for Taxes for which Acquiror is or may be liable under
Section 6.8(b)(i), UAPI will promptly inform Acquiror. Acquiror, at its cost
and expense, will have the night to control any resulting proceedings and to
determine whether and when to settle any such claim, assessment or dispute.
(c) Other Taxes. Except as otherwise provided in
Section 6.8(a) and Section 6.8(b), all Taxes will be the responsibility of the
taxpayer on which they are imposed, and any refunds and credits of Taxes will
be for the account of the taxpayer responsible for such Taxes.
(d) Cooperation. The parties will cooperate with each
other in a timely manner in the preparation and filing of any Tax Returns, the
payment of any Taxes in accordance with this Agreement, the conduct of any
audit or other proceeding and otherwise to effect the provisions of this
Agreement relating to Taxes. Each party will execute and deliver such powers of
attorney and make available such other documents as are necessary to carry out
the intent of this Section 6.8. Each party will notify the other party of any
audit adjustments that do not result in a tax liability to that party but can
reasonably be expected to affect Tax Returns of the other party.
(e) Retention of Records. Acquiror, TCI-E and UAPI will
(i) retain records, documents, accounting data and other information (including
computer data) necessary for the preparation and filing of all Tax Returns or
the audit of such returns and (ii) give to each other reasonable access to such
records, documents, accounting data and other information (including computer
data) to its personnel (and will insure their cooperation) and to its premises,
for the purpose of the review or audit of such Tax Returns to the extent
relevant to an obligation or liability of a party under this Agreement.
(f) Payments, Disputes. Except as otherwise provided in
this Section 6.8, any amounts owed by any party to any other party under this
Section 6.8 will be paid within 15 days after notice from the party entitled to
such payment. If any party entitled to indemnification under this Section 6.8
has not paid the amount for which such party is entitled to indemnification and
such amount is being contested before the appropriate Governmental Authority in
good faith, the indemnifying party will not be required to make payment to the
indemnified party until an appropriate Governmental Authority determines
finally that payment is due. If the parties cannot agree on any calculation of
any liabilities under this Section 6.8, such calculation (but not the
determination of whether any liability in fact exists) will be made by an
independent public accounting firm acceptable to the disputing parties. The
decision of such firm will be final and binding. The fees and expenses incurred
in connection with such calculation will be borne equally by the disputing
parties.
(g) Termination of Liabilities. Notwithstanding any other
provision in this Agreement, the liabilities of UAPI and Acquiror for any Taxes
under this Section 6.8 will apply only to Taxes properly assessed before the
expiration of the applicable statute of limitations for such Taxes.
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(h) Other Covenants. Neither Acquiror nor any of its
Affiliates will take any action or fail to take any action if such action taken
by Acquiror or any of its Affiliates or such failure to act by Acquiror or any
of its Affiliates would cause the Merger not to qualify as a reorganization
under Section 368(a) of the Code.
6.9 Board Representation.
(a) Initial Appointments. Acquiror will take such action
as may be required to cause one designee of UAPI and one designee of TCI Turner
Preferred, Inc. to be appointed to serve as directors of Acquiror, effective as
of the Effective Time, until their successors are duly elected and qualified.
(b) Subsequent Action. So long as UAPI or any one or more
of its Affiliates, in the aggregate, beneficially own (within the meaning of
Rule 13d-3 under the Exchange Act) at least 20% of the outstanding shares of
Acquiror Common Stock at the date on which the Board of Directors of Acquiror
selects its proposed nominee for election to the Board of Directors (the
"Selection Date"), Acquiror will use its reasonable best efforts, consistent
with the fiduciary duties of its Board of Directors and applicable law: (i) to
include in its proxy statement for each meeting of Acquiror's stockholders at
which directors are to be elected a recommendation by Acquiror's Board of
Directors that one person designated by UAPI and one person designated by TCI
Turner Preferred, Inc. be elected as directors; and (ii) to take such other
actions as may be necessary or appropriate to cause such persons to be elected
as directors of Acquiror. If UAPI or any one or more of its Affiliates, in the
aggregate, beneficially own less than 20% but at least 10% of the outstanding
shares of Acquiror Common Stock at the Selection Date Acquiror's obligations
under this subsection (b) will apply only to one person designated by TCI
Turner Preferred, Inc. If UAPI or any one or more of its Affiliates, in the
aggregate, beneficially own less than 10% of the outstanding shares of Acquiror
Common Stock at the Selection Date, Acquiror will have no obligations under
this subsection (b) even if such ownership increases above 10% in subsequent
years.
ARTICLE VII
CONDITIONS TO CLOSING
7.1 Conditions to the Obligations of TCI-E. UAPI and Acquiror. The
obligations of TCI-E, UAPI and Acquiror to consummate the transactions
contemplated by this Agreement are subject to the requirements that:
(a) This Agreement, the Merger and the other transactions
contemplated by this Agreement have been approved and adopted by the
stockholders of Acquiror as provided in Section 6.5;
(b) Any waiting period applicable to the consummation of
the transactions contemplated by this Agreement under the HSR Act has expired
or been terminated;
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(c) No Governmental Authority has enacted, issued,
promulgated, enforced or entered any statute or rule, regulation, injunction or
other order (whether temporary or preliminary or permanent) that remains in
effect and has the effect of making the transactions contemplated by this
Agreement illegal or otherwise prohibiting the transactions contemplated by
this Agreement, or that questions the validity or the legality of the
transactions contemplated by this Agreement and that reasonably could be
expected to materially and adversely affect UAPI, any of its Affiliates or the
Surviving Corporation or any of its Affiliates.
7.2 Conditions to the Obligations of TCI-E and UAPI. The
obligations of TCI-E and UAPI to effect the transactions contemplated by this
Agreement are subject to the satisfaction, on or prior to the Closing Date, of
the following conditions:
(a) The representations and warranties of Acquiror set
forth in this Agreement or in any other document delivered pursuant to this
Agreement are true in all material respects on and as of the Closing Date with
the same effect as if made on and as of the Closing Date, except for any change
required or contemplated by this Agreement, and Acquiror has delivered to TCI-E
and UAPI at the Closing a certificate to that effect executed on behalf of
Acquiror by an executive officer of Acquiror;
(b) Each of the covenants of Acquiror set forth in this
Agreement that is required to be performed on or before the Closing Date has
been duly performed in all material respects on or before the Closing Date and
Acquiror has delivered to TCI-E and UAPI at the Closing a certificate to that
effect executed on behalf of Acquiror by an executive officer f Acquiror;
(c) The Acquiror Common Stock has not been suspended from
trading on Nasdaq;
(d) TCI-E and UAPI have received an opinion of Manatt,
Phelps & Phillips, counsel for Acquiror, dated as of the Closing Date, in form
and substance reasonably satisfactory to TCI-E, UAPI and their counsel; and
(e) Those consents of third parties listed on Schedule
7.2(e) have been obtained.
7.3 Conditions to Obligations of Acquiror. The obligations of
Acquiror to effect the transactions contemplated by this Agreement are subject
to the satisfaction, on or prior to the Closing Date, of the following
conditions:
(a) The representations and warranties of TCI-E and UAPI
set forth in this Agreement or in any other document delivered pursuant to this
Agreement are true in all material respects on and as of the Closing Date with
the same effect as if made on and as of the Closing Date, except for any change
required or contemplated by this Agreement, and TCI-E and UAPI each has
delivered to Acquiror at the Closing a certificate to that effect executed on
behalf of TCI-E by one of its officers;
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(b) Each of the covenants of TCI-E and UAPI set forth in
this Agreement that is required to be performed on or before the Closing Date
has been duly performed in all material respects on or before the Closing Date
and TCI-E and UAPI each has delivered to Acquiror at the Closing a certificate
executed on its behalf by one of its officers;
(c) Acquiror has received an opinion of Stephen. M.
Brett, counsel for TCI-E and UAPI, dated as of the Closing Date, in form
and substance reasonably satisfactory to Acquiror and its counsel; and
(d) Those consents of third parties described on Schedule
7.3(d) have been obtained.
ARTICLE VIII
TERMINATION
8.1 Termination. This Agreement may be terminated and the
transactions contemplated by this Agreement may be abandoned at any time prior
to the Closing Date:
(a) by mutual written consent duly authorized by the
Boards of Directors of TCIE and Acquiror;
(b) by TCI-E, if the condition set forth in Section 7.1
(a) is not satisfied within 120 days after the date of this Agreement;
(c) by any party, so long as the terminating party is not
in default under this Agreement in any material respect, after December 31,
1995 (the "Termination Date"), if the Merger has not been consummated on or
before such date;
(d) by TCI-E and UAPI, if neither of them is in default
under this Agreement in any material respect, and either (i) Acquiror has
failed to perform in any material respect any covenant in this Agreement when
performance thereof was due and has not cured the failure within 20 Business
Days after TCI-E delivered written notice thereof to Acquiror, (ii) any
condition in Section 7.1 or Section 7.2 has not been satisfied in any material
respect and is not capable of being satisfied prior to the Termination Date or
(iii) Acquiror's Board of Directors has materially modified or withdrawn the
approval, determination or recommendation referred to in Section 5.5;
(e) by Acquiror, if it is not in default under this
Agreement in any material respect, and either (i) TCI-E or UAPI has failed to
perform in any material respect any covenant in this Agreement when performance
thereof was due and has not cured the failure within 20 Business Days after
Acquiror delivered written notice thereof to TCI-E, (ii) any condition in
Section 7.1 or Section 7.3 has not been satisfied and is not capable of being
satisfied prior to the Termination Date; or
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(f) by TCI-E and UAPI pursuant to Section 6.6(b).
8.2 Effect of Termination. In the event of the termination of this
Agreement pursuant to Section 8.1, this Agreement, except for the provisions of
Section 8.3, Section 10.8 (subject to Section 8.3) and Section 10.13, will
immediately become null and void and have no effect, without any liability on
the part of any party or its directors, officers or shareholders. Nothing in
this Section 8.2 will relieve any party to this Agreement of liability for
breach of this Agreement.
8.3 Fees and Expenses.
(a) If this Agreement is terminated by Acquiror (i)
pursuant to Section 8.1 (e), other than as a result of the failure of any
condition in Section 7.1 or of the conditions in Section 7.3(a) or Section
7.3(d) to be satisfied or to be capable of being satisfied prior to the
Termination Date, or (ii) pursuant to Section 8.1(e) as a result of the failure
of the condition in Section 7.3(a) to be satisfied or to be capable of being
satisfied prior to the Termination Date, unless such condition was not
satisfied and was not capable of being satisfied as a result of a change in
circumstances not within the control of TCI-E or UAPI after the date of this
Agreement, TCI-E and UAPI, jointly and severally, agree promptly to pay to
Acquiror an amount equal to the actual reasonable fees and expenses paid or
payable by or on behalf of Acquiror to its attorneys, accountants,
environmental consultants, management consultants and other consultants and
advisors in connection with the negotiation, execution, and delivery of this
Agreement and the transactions contemplated by this Agreement, provided that
such payment will in no event exceed $150,000. Such payment will be made in
same day funds no later than five Business Days after receipt by UAPI of
reasonably detailed written statements describing the fees and expenses.
(b) If this Agreement is terminated by TCI-E or UAPI (i)
pursuant to Section 8.1 (d), other than as a result of the failure of any
condition in Section 7.1 or of the conditions in Section 7.2(a) or Section
7.2(e) to be satisfied or to be capable of being satisfied prior to the
Termination Date, or (ii) pursuant to Section 8.l(d) as a result of the failure
of the condition in Section 7.2(a) to be satisfied or to be capable of being
satisfied prior to the Termination Date, unless such condition was not
satisfied and was not capable of being satisfied as a result of a change in
circumstances not within the control of Acquiror after the date of this
Agreement, Acquiror promptly will pay to UAPI an -amount equal to the actual
reasonable fees and expenses paid or payable by or on behalf of TCI-E and UAPI
to their attorneys, accountants, environmental consultants, management
consultants and -other consultants and advisors in connection with the
negotiation, execution, and delivery of this Agreement, provided that such
payment will in no event exceed $150,000. Such payment will be made in same day
funds no later than five Business Days after receipt by Acquiror of detailed
written statements describing the fees and expenses.
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<PAGE> 27
ARTICLE IX
INDEMNIFICATION
9.1 Indemnification by UAPI. UAPI will indemnify, defend and hold
harmless Acquiror and its Affiliates, and the shareholders, directors,
officers, employees, agents, successors and assigns of any of such Persons,
from and against:
(a) all losses, damages, liabilities, deficiencies or
obligations of or to Acquiror or any such other indemnified Person resulting
from or arising out of (i) any breach of any representation or warranty made by
TCI-E or UAPI in this Agreement, subject to Section 10.1, (ii) any breach of
any covenant, agreement or obligation of TCI-E or UAPI contained in this
Agreement or (iii) any act or omission of TCI-E or UAPI with respect to, or any
event or circumstance related to, the ownership or operation of the assets or
the conduct of the business of TCI-E, which act, omission, event or
circumstance occurred or existed prior to the Effective Time, other than any
liability or obligation of TCI-E under the instruments and agreements
evidencing the Note Rights (the "Assumed Liabilities"); and
(b) all claims, actions, suits, proceedings, demands,
judgments, assessments, fines, interest, penalties, costs and expenses
(including settlement costs and reasonable legal, accounting, experts' and
other fees, costs-and expenses) incident or relating to or resulting from any
of the foregoing.
9.2 Indemnification by Acquiror. Acquiror will indemnify, defend
and hold harmless UAPI and its Affiliates, and the shareholders, directors,
officers, employees, agents, successors and assigns of any of such Persons,
from and against:
(a) all losses, damages, liabilities, deficiencies or
obligations of or to TCI-E or UAPI or any such other indemnified Person
resulting from or arising out of (i) any breach of any representation or
warranty made by Acquiror in this Agreement, subject to Section 10.1, (ii) the
breach of any covenant, agreement or obligation of Acquiror contained in this
Agreement, (iii) the failure by Acquiror to perform or satisfy any of the
Assumed Liabilities or (iv) any act or omission of Acquiror with respect to, or
any event or circumstance related to, the ownership or operation of the assets
of TCI-E acquired by Acquiror in the Merger or the conduct of the business of
TCI-E by Acquiror after the Effective Time; and
(b) all claims, actions, suits, proceedings, demands,
judgments, assessments, fines, interest, penalties, costs and expenses
(including, without limitation, settlement costs and reasonable legal,
accounting, experts' and other fees, costs and expenses) incident or relating
to or resulting from any of the foregoing.
9.3 Third Party Claims. Promptly after the receipt by any party of
notice of any claim, action, suit or proceeding by any Person who is not a
party to this Agreement (collectively, an
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<PAGE> 28
"Action"), which Action is subject to indemnification under this Agreement,
such party (the "Indemnified Party") will give reasonable written notice to the
party from whom indemnification is claimed (the "Indemnifying Party"). The
Indemnified Party will be entitled, at the sole expense and liability of the
Indemnifying Party, to exercise full control of the defense, compromise or
settlement of any such Action unless the Indemnifying Party, within a
reasonable time after the giving of such notice by the Indemnified Party, (a)
admits in writing to the Indemnified Party the Indemnifying Party's liability
to the Indemnified Party for such Action under the terms of this Article IX,
(b) notifies the Indemnified Party in writing of the Indemnifying Party's
intention to assume such defense, (c) provides evidence reasonably satisfactory
to the Indemnified Party of the Indemnifying Party's ability to pay the amount,
if any, for which the Indemnified Party may be liable as a result of such
Action and (d) retains legal counsel reasonably satisfactory to the Indemnified
Party to conduct the defense of such Action. The other party will cooperate
with the party assuming the defense, compromise or settlement of any such
Action in accordance with this Agreement in any manner that such party
reasonably may request. If the Indemnifying Party so assumes the defense of any
such Action. the Indemnified Party will have the right to employ separate
counsel and to participate in (but not control) the defense, compromise or
settlement of the Action, but the fees and expenses of such counsel will be at
the expense of the Indemnified Party unless (i) the Indemnifying Party has
agreed to pay such fees and expenses, (ii) any relief other than the payment of
money damages is sought against the Indemnified Party or (iii) the Indemnified
Party is advised by its counsel that there may be one or more defenses
available to it which are different from or additional to those available to
the Indemnifying Party, and in any such case that portion of the fees and
expenses of such separate counsel that are reasonably related to matters
covered by the indemnity provided in this Article IX will be paid by the
Indemnifying Party. No Indemnified Party will settle or compromise any such
Action for which it is entitled to indemnification under this Agreement without
the prior written consent of the Indemnifying Party, unless the Indemnifying
Party has failed, after reasonable notice, to undertake control of such Action
in the manner provided in this Section 9.3. No Indemnifying Party will settle
or compromise any such Action (A) in which any relief other than the payment of
money damages is sought against any Indemnified Party or (B) in the case of any
Action relating to the Indemnified Party's liability for any Tax, if the effect
of such settlement would be an increase in the liability of the Indemnified
Party for the payment of any Tax for any period beginning after the Closing
Date, unless the Indemnified Party consents in writing to such compromise or
settlement.
ARTICLE X
MISCELLANEOUS
10.1 Survival of Representations and Warranties. The
representations of TCI-E in Section 4.4 and Section 4.5 and the representations
of Acquiror in Section 5.4, Section 5.6, Section 5.7 and Section 5.9 will
survive beyond the Closing Date. All other representations and warranties
contained in this Agreement will not survive beyond the Closing Date. This
Section 10.1 will not limit the enforceability of any covenant or agreement of
any of the parties to this Agreement that by its terms requires performance
after the Closing Date.
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<PAGE> 29
10.2 Entire Agreement. This Agreement, including the Exhibits and
Schedules to this Agreement, constitutes the entire agreement between the
parties with respect to the subject matter of this Agreement and supersede all
prior written and oral and all contemporaneous oral agreements and
understandings with respect to the subject matter of this Agreement.
10.3 Notices. All notices and other communications hereunder will
be in writing and will be deemed to have been duly given when delivered in
person, by telecopy or by registered or certified mail (postage prepaid, return
receipt-requested) to the respective parties as follows:
if to TCI-E or UAPI: c/o Tele-Communications, Inc.
Terrace Tower II
5619 DTC Parkway Englewood, Colorado 80111
Telecopy: (303) 488-3219
Attention: Stephen M. Brett
with copies to: Sherman & Howard L.L.C.
3000 First Interstate Tower North
633 Seventeenth Street
Denver, Colorado 80202
Telecopy: (303) 298-0940
Attention: Charles Y. Tanabe, Esq.
if to Acquiror: DMX Inc.
11400 W. Olympic Boulevard, Suite 1100
Los Angeles, California 90064-1507
Telecopy: (310) 444-1717
Attention: Robert Manning
with copies to: Manatt, Phelps & Phillips
11355 W. Olympic Blvd
Los Angeles, California 90064-1614
Telecopy: (310) 312-4224
Attention: Gordon M. Bava, Esq.
or to such other address as the party to whom notice is given may have
previously furnished to the others in writing in the manner set forth above.
Any notice or communication delivered in person will be deemed effective on
delivery. Any notice or communication sent by telecopy will be deemed effective
when confirmed. Any notice or communication sent by registered or certified
mail, return receipt requested, will be deemed effective when received, as
evidenced by the return receipt.
10.4 Governing Law. THIS AGREEMENT WILL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE
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<PAGE> 30
REGARDLESS OF THE LAWS THAT MIGHT OTHERWISE GOVERN UNDER PRINCIPLES OF
CONFLICTS OF LAWS APPLICABLE THERETO, EXCEPT THAT CERTAIN PROVISIONS OF THIS
AGREE RELATING TO THE MERGER WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE COLORADO CORPORATION LAW TO THE EXTENT PROVIDED IN THIS AGREEMENT.
10.5 Rules of Construction. The descriptive headings in this
Agreement are inserted for convenience of reference only and are not intended
to be part of or to affect the meaning or interpretation of this Agreement.
Words used in this Agreement, regardless of the gender and number specifically
used, will be deemed and construed to include any other gender, masculine,
feminine, or neuter, and any other number, singular or plural, as the context
requires. As used in this Agreement, the word "including" is not limiting, and
the word "or" is not exclusive.
10.6 Parties in Interest. This Agreement will be binding upon and
inure solely to the benefit of each party to this Agreement, and nothing in
this Agreement, express or implied, is intended to confer upon any other Person
any rights or remedies of any nature whatsoever under or by reason of this
Agreement, except as provided in Section 6.8, Article IX and Section 10.9,
which are intended to be for the benefit of the Persons provided for therein
and may be enforced by such Persons.
10.7 Counterparts. This Agreement may be executed in counterparts,
each of which will be deemed to be an original, but all of which will
constitute one and the same agreement.
10.8 Payment of Expenses. Except as otherwise expressly provided in
this Agreement, each of the parties to this Agreement will bear its own
expenses, including the fees of any attorneys and accountants engaged by such
party, in connection with this Agreement and the consummation of the
transactions contemplated herein. Any sales or other transfer taxes payable in
connection with the Merger will be paid by Acquiror. Each party will bear
one-half the amount of all fees payable by the parties in connection with
filing of a notification and report pursuant to the HSR Act.
10.9 No Personal Liability. This Agreement will not create or be
deemed to create or permit any personal liability or obligation on the part of
any direct or indirect shareholder of any party to this Agreement or any
officer, director, employee, agent, representative, or investor of any party to
this Agreement.
10.10 Binding Effect: Assignment. This Agreement will inure to the
benefit of and be binding upon the parties to this Agreement and their
respective legal representatives and successors. This Agreement may not be
assigned by any party to this Agreement.
10.11 Amendment. This Agreement may not be amended except by an
instrument in writing signed on behalf of all the parties. To the extent
permitted by applicable law, any amendment to this Agreement after the meeting
of the stockholders of Acquiror referred to in Section 6.6 may be made without
seeking the approval of such stockholders.
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<PAGE> 31
10.12 Extension: Waiver. Any party to this Agreement may (a) extend
the time for the performance of any of the obligations or other acts of the
other parties to this Agreement, (b) waive any inaccuracies in the
representations and warranties of any other party contained herein or in any
document, certificate, or writing delivered pursuant to this Agreement by any
other party or (c) waive compliance by any other party with any of the
agreements or conditions contained herein or any breach thereof. Any agreement
on the part of any party to any such extension or waiver will be valid only if
set forth in an instrument in writing signed on behalf of such party.
10.13 Legal Fees & Costs. If any party to this Agreement institutes
any action or proceeding, whether before a court or arbitrator, to enforce any
provision of this Agreement, the prevailing party therein will be entitled to
receive from the losing party reasonable attorneys' fees and costs incurred in
such action or proceeding, whether or not such action or proceeding is
prosecuted to judgment.
10.14 Time. Time is of the essence under this Agreement. If the last
day permitted for the giving of any notice or the performance of any act
required or permitted under this Agreement falls on a day which is not a
Business Day, the time for the giving of such notice or the performance of such
act will be extended to the next succeeding Business Day.
IN WITNESS WHEREOF, each of the parties has caused this
Agreement to be executed on its behalf by its officers thereunto duly
authorized on the day and year first above written.
TCI-EUROMUSIC, INC.
By: /s/ Stephen M. Brett
-------------------------------------
Name: Stephen M. Brett
-----------------------------------
Title: Executive Vice President
----------------------------------
UNITED ARTISTS PROGRAMMING INTERNATIONAL,
INC.
By: /s/ Stephen M. Brett
-------------------------------------
Name: Stephen M. Brett
-----------------------------------
Title: Executive Vice President
----------------------------------
DMX INC.
By: /s/ Robert M. Manning
-------------------------------------
Name: Robert M. Manning
-----------------------------------
Title: Executive Vice-President
----------------------------------
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<PAGE> 32
AMENDMENT NO.1 TO
AGREEMENT AND PLAN OF MERGER
By and Among
TCI EUROMUSIC, INC.,
UNITED ARTISTS PROGRAMMING INTERNATIONAL, INC.
And
DMX INC.
This Amendment No.1 (the "Amendment") to the Agreement and Plan of
Merger by and among TCI Euromusic, Inc. ("TCI-E"), United Artists Programming
International, Inc. ("UAPI") and DMX Inc. ("Acquiror") (collectively, the
"Parties"), dated as of August 28, 1995 (the "Agreement"), is entered into as
of November 1, 1995 by and among the parties hereto. Capitalized terms not
otherwise defined herein shall have the meaning ascribed to such terms in the
Agreement.
RECITALS
WHEREAS, the Parties executed the Agreement on August 28, 1995;
WHEREAS, pursuant to the terms of the Agreement, the Agreement shall
terminate in the event that (i) the Closing shall not have occurred by December
31, 1995, or (ii) the DMX stockholders shall not have approved the transactions
contemplated by the Agreement within 120 days of the date of the Agreement; and
WHEREAS, the Parties have decided to extend the Termination Date and
the time required to obtain stockholder approval;
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and other valuable
consideration the receipt and sufficiency of which is hereby acknowledged, the
Parties hereby agree as follows:
1. The last sentence in Section 6.5 shall be amended to read in
its entirety as follows:
"Subject to the fiduciary duty of the Board of Directors of
Acquiror under applicable law, Acquiror will use its reasonable
best efforts to secure the vote of stockholders required by the
Delaware Corporation Law and Acquiror's Certificate of
Incorporation to effect such transactions within 150 days after
the date of this Agreement."
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<PAGE> 33
2. Section 8.1(b) shall be amended to read in its entirety as
follows:
"(b) by TCI-E, if the condition set forth in Section 7.1(a)
is not satisfied within 180 days after the date of this
Agreement;"
3. Section 8.1(c) shall be amended to read in its entirety as
follows:
"(c) by any party, so long as the terminating party is not in
default under this Agreement in any material respect, after
February 29, 1995 (the 'Termination Date"), if the Merger has
not been consummated on or before such date;'
4. This Amendment may be executed in one or more counterparts,
all of which shall be considered one and the same agreement and shall become
effective when one or more counterparts have been signed by each party hereto
and delivered to each party hereto.
IN WITNESS WHEREOF, the parties to this Amendment have duly executed
this Amendment as of the day and year first above written.
TCI EUROMUSIC, INC.
/s/ Stephen M. Brett
-------------------------------
Name: Stephen M. Brett
Title: Executive Vice President
UNITED ARTISTS PROG
INTERNATIONAL, INC.
/s/ Stephen M. Brett
-------------------------------
Name: Stephen M. Brett
Title: Executive Vice President
DMX INC.
/s/ Robert M. Manning
--------------------------------
Name: Robert M. Manning
Title: Executive Vice President
2
<PAGE> 34
AMENDMENT NO. 2 TO
AGREEMENT AND PLAN OF MERGER
By and Among
TCI EUROMUSIC, INC.,
UNITED ARTISTS PROG INTERNATIONAL, INC.
And
DMX INC.
This Amendment No. 2 (the "Amendment") to the Agreement and Plan of
Merger by and among TCI Euromusic, Inc. ("TCI-E"), United Artists Programming
International, Inc. ("UAPI") and DMX Inc. ("Acquiror") (collectively, the
"Parties"), dated as of August 28, 1995, as amended as of November 1, 1995 (the
"Agreement"), is entered into as of January 17, 1996 by and among the parties
hereto. Capitalized terms not otherwise defined herein shall have the meaning
ascribed to such terms in the Agreement.
RECITALS
WHEREAS, pursuant to the terms of the Agreement, the Agreement shall
terminate in the event that (i) the Closing shall not have occurred by February
29, 1996, or (ii) the DMX stockholders shall not have approved the transactions
contemplated by the Agreement within 180 days of the date of the Agreement; and
WHEREAS, the Parties have decided to extend the Termination Date and
the time required to obtain stockholder approval;
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and other valuable
consideration the receipt and sufficiency of which is hereby acknowledged, the
Parties hereby agree as follows:
1. The last sentence in Section 6.5 shall be amended to read in
its entirety as follows:
"Subject to the fiduciary duty of the Board of Directors of
Acquiror under applicable law, Acquiror will use its reasonable
best efforts to secure the vote of stockholders required by the
Delaware Corporation Law and Acquiror's Certificate of
Incorporation to effect such transactions within 200 days after
the date of this Agreement."
2. Section 8.1(b) shall be amended to read in its entirety as
follows:
1
<PAGE> 35
" (b) by TCI-E, if the condition set forth in Section 7.1(a)
is not satisfied within 230 days after the date of this
Agreement;"
3. Section 8.1 (c) shall be amended to read in its entirety as
follows:
" (c) by any party, so long as the terminating party is not in
default under this Agreement in any material respect, after
April 15, 1996 (the "Termination Date"), if the Merger has not
been consummated on or before such date; "
4. This Amendment may be executed in one or more counterparts,
all of which shall be considered one and the same agreement and shall become
effective when one or more counterparts have been signed by each party hereto
and delivered to each party hereto.
IN WITNESS WHEREOF, the parties to this Amendment have duly executed
this Amendment as of the day and year first above written.
TCI EUROMUSIC, INC.
/s/ Stephen M. Brett
--------------------------------
Name: Stephen M. Brett
Title: Executive Vice President
UNITED ARTISTS PROGRAMMING
INTERNATIONAL, INC.
/s/ Stephen M. Brett
-------------------------------
Name: Stephen M. Brett
Title: Executive Vice President
DMX INC.
/s/ Robert M. Manning
--------------------------------
Name: Robert M. Manning
Title: Executive Vice President
2
