-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, We0Ui64GpUSg+TOfBUgRrV4q/g11uYGvU2OERXQO2pq2jPkI/ufxNOPTz+7ON/9d aSl6M7JUIKQ8cBlNoP90HQ== 0000950134-96-002703.txt : 19960607 0000950134-96-002703.hdr.sgml : 19960607 ACCESSION NUMBER: 0000950134-96-002703 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 19960606 SROS: NASD SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: DMX INC CENTRAL INDEX KEY: 0000865745 STANDARD INDUSTRIAL CLASSIFICATION: COMMUNICATION SERVICES, NEC [4899] IRS NUMBER: 954275106 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-41188 FILM NUMBER: 96577624 BUSINESS ADDRESS: STREET 1: 11400 W OLYMPIC BLVD STE 1100 CITY: LOS ANGELES STATE: CA ZIP: 90064-1507 BUSINESS PHONE: 3104441744 MAIL ADDRESS: STREET 1: 11400 W OLYMPIC BLVD STREET 2: STE 1100 CITY: LOS ANGELES STATE: CA ZIP: 90064-1507 FORMER COMPANY: FORMER CONFORMED NAME: INTERNATIONAL CABLECASTING TECHNOLOGIES INC DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: ICT US INC DATE OF NAME CHANGE: 19901018 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: TELE COMMUNICATIONS INC /CO/ CENTRAL INDEX KEY: 0000925692 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 841260157 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 5619 DTC PARKWAY CITY: ENGLEWOOD STATE: CO ZIP: 80111 BUSINESS PHONE: 3032675500 MAIL ADDRESS: STREET 1: 5619 DTC PARKWAY CITY: ENGLEWOOD STATE: CO ZIP: 90111 FORMER COMPANY: FORMER CONFORMED NAME: TCI LIBERTY HOLDING CO DATE OF NAME CHANGE: 19940620 SC 13D/A 1 SCHEDULE 13D AMENDMENT NO. 3 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 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. 3 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 3 4 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 4 5 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 5 6 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. 6 7 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. 7 8 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. 8 9 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 9 10 Cusip No. 23323Q104 SCHEDULE 1 ---------- Directors, Executive Officers and Controlling Persons of Tele-Communications, Inc. ("TCI") [name changed from TCI/Liberty Holding Company]
Principal Business or Organization in Principal Occupation and Which Such Employment Name Business Address Is Conducted - ---- ------------------------ --------------------- 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
10 11 Cusip No. 23323Q104 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
11 12 Cusip No. 23323Q104 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
12 13 Cusip No. 23323Q104 EXHIBIT INDEX -------------
- -------------------------------------------------------------------------------- EXHIBIT EXHIBIT PAGE NUMBER - -------------------------------------------------------------------------------- 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.
13 EX-7.B 2 STOCK PURCHASE AGREEMENT 5/13/96 1 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. -1- 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. -2- 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 -3- 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. -4- 5 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 - 5 - EX-7.C 3 STOCK PURCHASE AGREEMENT 5/14/96 1 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. 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") -2- 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; -3- 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. -4- 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 -5- 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 -6- 7 "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. -7- 8 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. -8- 9 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 -9- 10 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; -10- 11 (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- 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- 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. -13- 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 -14- 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. -15- 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. -16- 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. -17- 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 -18- 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 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 =========
------------ * Options shown are as claimed by former employee; grant of options has not been authorized by DMX's Options Committee. A-1 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 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 EX-7.D 4 PLAN OF MERGER 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. 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 ------------- 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
-i- 3 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
-ii- 4 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
-iii- 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 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. -2- 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:
Term Section - ---- ------- 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)
-3- 8
Term Section - ---- ------- TCI-E Common Stock Value 3.2(b) TCI-E Taxes 6.8(a) Termination Date 8.1 (c) UAPI Preamble
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. -4- 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. -5- 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- 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- 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- 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 -9- 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 -10- 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 -11- 16 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. -12- 17 (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; -13- 18 (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. -14- 19 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 -15- 20 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. -16- 21 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. -17- 22 (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. -18- 23 (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; -19- 24 (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; -20- 25 (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 -21- 26 (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. -22- 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 -23- 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. -24- 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 -25- 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. -26- 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 ---------------------------------- -27- 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." 1 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 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 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 -----END PRIVACY-ENHANCED MESSAGE-----