HomeMy WebLinkAbout960266 RESOLUTION
RE: GRANT CABLE TELEVISION FRANCHISE TO AND APPROVE FRANCHISE AGREEMENT
WITH SCRIPPS HOWARD CABLE COMPANY AND AUTHORIZE CHAIR TO SIGN
WHEREAS, the Board of County Commissioners of WeEd County, Colorado, pursuant to
Colorado statute and the Weld County Home Rule Charter, is vested with the authority of
administering the affairs of Weld County, Colorado, and
WHEREAS,the Board has been presented with a Franchise Agreement between the County
of Weld, State of Colorado, by and through the Board of County Commissioners of Weld County, and
Scripps Howard Cable Company, with terms and conditions being as stated in said agreement, and
WHEREAS, on February 26, 1996, a hearing was held before the Board of County
Commissioners to consider the cable television franchise agreement from Scripps Howard Cable
Company, and
WHEREAS, Dick Lyons, Attorney representing Scripps Howard Cable Company, was
present, and
WHEREAS,the Board of County Commissioners heard all of the testimony and statements
of those present, studied the application for a cable television franchise and all the evidence
presented in this matter and, having been fully informed, deems it advisable to grant said franchise
and approve said franchise agreement, a copy of which is attached hereto and incorporated herein
by reference.
NOW, THEREFORE, BE IT RESOLVED by the Board of County Commissioners of Weld
County, Colorado, that the cable television franchise be, and hereby is, granted to Scripps Howard
Cable Company.
BE IT FURTHER RESOLVED that the Franchise Agreement between the County of Weld,
State of Colorado, by and through the Board of County Commissioners of Weld County, and Scripps
Howard Cable Company be, and hereby is, approved.
BE IT FURTHER RESOLVED by the Board that the Chair be, and hereby is, authorized to
sign said agreement.
960e : 8Aj .2 ors 6
• /e*warec` 0RD94
ORD94
AGREEMENT- SCRIPPS HOWARD CABLE COMPANY FRANCHISE
PAGE 2
The above and foregoing Resolution was, on motion duly made and seconded, adopted by
the following vote on the 26th day of February, A.D., 1996.
BOARD OF COUNTY COMMISSIONERS
;r� .. � YN IIIC- % ,_, / ) ryi%- a�/ �
r . arbar J. Kirkmeyer, d it
�261 j!�-��'ds _ _ ; �ty Clerk to the Board �/
/� t „writ (/ . rge�. Baxter, P o- m
--i +*putt' Clerk tea he Board ( �:34 ��
�' Dale K. Hall
APP D AS TO FORM: /`� , iCf ,--k'91:
( onstance L. Harbert
W. Hctiy ster
960266
ORD94
FRANCHISE AGREEMENT
Tip FRANCHISE AGREEMENT is made and entered into as of this . /h day of
r 1996, by and between the COUNTY OF WELD, COLORADO (hereinafter
referred tar the "County") and SCRIPPS HOWARD CABLE COMPANY, a Colorado
corporation (hereinafter referred to as "SHCC") , with its principal place of
business at 534 Kimbark Street, Longmont, Colorado 80501.
WHEREAS, the County is authorized to grant one or more nonexclusive, revocable,
franchises to construct, reconstruct, operate, and maintain a cable communication
system within the County and
WHEREAS, SHCC is agreeable to providing such services to the County and has made
application to the County for a franchise; and
WHEREAS, the County has determined that the financial , legal , and technical
ability of SHCC is reasonably sufficient to provide services, facilities, and
equipment necessary to meet the future cable-related needs and interests of the
community; and
WHEREAS, the County, after public hearings and due evaluation, has determined
that it is in the best interest of the County and its residents to grant a
franchise to SHCC for the term herein provided.
NOW, THEREFORE, IN CONSIDERATION of the mutual promises and covenant contained
herein, the parties do mutually agree as follows:
1. DEFINITIONS. The following terms, phrases, words, and abbreviations shall
have the meanings ascribed to them below. When not inconsistent with the
context, words used in the present tense include the future tense, words in the
plural number include the singular number, and words in the singular number
include the plural number:
1.1 "Addressable" shall mean the ability of a cable communications system
to direct and receive communications only at reception points on the system
authorized to receive such communications.
1 .2 "Affiliate" means an entity which owns or controls, is owned or
controlled by, or is under common ownership with SHCC.
1.3 "Basic Service" means any service tier which includes the retransmis-
sion of local television broadcast signals or such other definition as may
be adopted by federal law.
1.4 "Cable Acts" mean the Cable Communications Policy Act of 1984, as
amended, and the Cable Television Consumer Protection and Competition Act
of 1992, and the Telecommunications Act of 1996 as it may be amended.
1.5 "Cable Service" means the one-way transmission to subscribers of video
programming or other programming service and subscriber interaction, if
2487625 B-1544 P-482 04/25/96 01:57P PG 1 OF 26 REC DOC
Weld County CO Clerk & Recorder 0.00
any, which is required for the selection of such video programming or other
programming service.
1.6 "Cable System" means a facility, consisting of a set of closed
transmission paths and associated signal generation, reception, and
control . equipment that is designed to provide cable service which
includes video programming and which is provided to multiple
subscribers within a community, but such term does not include:
a. A facility that serves only to retransmit the television signals
of one or more television broadcast stations; or,
b. A facility that serves only subscribers in one or more multiple
unit dwellings under common ownership, control , or management, unless
such facility or facilities uses any public right-of-way.
1.7 "Downstream" shall mean signals originating at the headend or hubs and
transmitted to subscribers.
1.8 "Earth station" shall mean equipment used to receive signals from or
transmit signals to a communications satellite.
1 .9 "FCC" shall mean the Federal Communications Commission or successor
governmental entity thereto.
1.10 "Franchise" shall mean the initial authorization, or renewal thereof,
issued by the Franchising Authority pursuant to Weld County Ordinance 94,
A and B Amendments, whether such authorization is designated as a
franchise, permit, license, resolution, contract, certificate, agreement,
or otherwise, which authorizes the construction or operation of the Cable
System.
1. 11 "Franchising Authority" means the COUNTY or the lawful successor,
transferee, or assignee thereof.
1.12 "Force majeure" shall mean any delays caused by reason of:
a. Civil commotion;
b. Riots;
c. Acts of God and nature, such as floods, earthquakes, unusual
accumulations of rain, ice, or snow, and tornadoes; and,
d. Any other circumstances reasonably beyond the control of SHCC.
1.13 "Gross receipts" shall mean all operating receipts derived from the
Cable System collected directly or indirectly by SHCC or any affiliate in
association with the provision of cable communication services or any other
services provided over the Cable System within the County, including, but
not limited to basic monthly service fees, premium service fees, installa-
tion and reconnection fees, local origination fees, leased channel fees,
additional outlet fees, advertising receipts, and converter rentals. Gross
receipts shall not include any taxes on services which are imposed directly
2487625 8-1544 P-482 04/25/96 01:57P PG 2 OF 26
or indirectly on any subscriber thereof by any governmental unit or agency
and which are collected by SHCC on behalf of such governmental unit or
agency.
1 .14 "Headend" shall mean the facility, including antennas and associated
electronics which receives, controls, and switches the electronic informa-
tion transmitted over the Cable System.
1.15 "Interconnect" shall mean the electronic connection of two or more
different Cable Systems for the purpose of exchanging, switching, or
retransmitting programming or other signals.
1.16 "Person" means an individual , partnership, association, joint stock
company, trust, corporation, governmental entity, or any other entity.
1.17 "School " shall mean any duly accredited nonprofit educational institu-
tion, including primary and secondary schools, colleges and universities,
both public and private, but excluding "home schools" and charter schools.
1.18 "Service Area" means the present boundaries of the County, and shall
include any additions thereto by annexation or other legal means.
1.19 "State-of-the-art" shall mean the condition of any Cable System,
components, or equipment accepted and used in the cable communications
industry throughout Colorado and its surrounding states which is of a high
technical quality, dependable, reliable, and economically feasible for
comparable county population.
1.20 "Street" means the surface of and the space above and below any public
street, road, highway, freeway, lane, path, alley, court, sidewalk, boule-
vard, parkway, drive, public way or place, or other easement now or here-
after held by the County.
1.21 "Subscriber" means a person or user of the Cable System who lawfully
receives Cable Services or other service therefrom with SHCC's express
permission.
1 .22 "Upstream" shall mean the transmission of signals through a Cable
System from subscribers to the headend.
1.23 "Video Programming" means programming provided by, or generally
considered comparable to programming provided by, a television broadcast
station.
2. GRANT OF FRANCHISE.
2.1 The County hereby grants to SHCC, subject to the terms and conditions
of this Franchise Agreement, a nonexclusive franchise which authorizes SHCC
to construct and operate a Cable System and offer cable service and other
services in, along, among, upon, across, above, over, under, or in any
manner connected with streets within the service area and for that purpose
to erect, install , construct, repair, replace, reconstruct, maintain, or
3
2487625 8-1544 P-482 04/25/96 01:57P PG 3 OF 26
retain in, on, over, under, upon, across, or along any street and all
extensions thereof and additions thereto, such earth stations, wires,
cables, conductors, ducts, conduits, vaults, manholes, pedestals,
amplifiers, appliances, attachments, and other related property or
equipment as may be necessary or appurtenant to the Cable System.
2.2 This franchise is subject to the county ordinances, statutes and
regulations now in effect or hereafter made effective to the extent that
SHCC's rights and obligations herein are not materially altered thereby.
Nothing in this Franchise Agreement shall be deemed to waive the require-
ments of the various codes and ordinances of the County including, but not
limited to, permits, fees to be paid, or manner of construction. On
regulatory matters, Federal and State laws will apply.
3. RIGHT OF COUNTY TO ISSUE FRANCHISE. SHCC acknowledges and accepts the legal
right of the County as such legal right exists on effective date here of to issue
this franchise on the date of grant thereof, and SHCC agrees that it shall not
now nor at any time hereafter challenge this lawful right of the County to issue
this franchise in any way, in any County, State, or Federal Court or governmental
agency.
4. EFFECTIVE DATE OF FRANCHISE. The effective date of the franchise shall be
, 1996.
5. TERM. The term of the franchise shall be for a period of 15 years from the
effective date, unless sooner terminated as provided in this franchise.
6. FRANCHISE NONEXCLUSIVE. This franchise shall not be construed as any limi-
tation upon the right of the County to grant to other persons rights, privileges,
or authorities similar to the rights, privileges, and authorities herein set
forth, in the same or other streets, alleys, or other public ways or public
places. The County specifically reserves the right to grant at any time during
the term of this Franchise Agreement or renewal thereof, if any, such additional
franchises for a Cable System as it deems appropriate upon such terms and condi-
tions as it deems appropriate. However, in the event the County enters into a
franchise, permit, license, authorization, or other agreement of any kind with
any other person or entity other than SHCC to enter into the County's streets for
the purpose of constructing or operating a Cable System or providing cable
service to any part of the service area, the material provisions thereof shall
be reasonably comparable to those contained herein, in order that one operator
not be granted an unfair competitive advantage over another, and to provide all
parties equal protection under the law.
7. INCORPORATION OF WELD COUNTY BY REFERENCE AND RESOLUTION OF CONFLICTS. All
terms, conditions, and provisions of Weld County shall be deemed to be embodied
in this Franchise Agreement. Any and all conflicts between this Franchise Agree-
ment and said Weld County shall be resolved using the provisions of this Fran-
chise Agreement to the extent that SHCC's rights and obligations herein are not
materially altered. On regulatory matters, Federal and State laws will apply.
8. DRAFTING OF FRANCHISE AGREEMENT. Both the County and SHCC hereby ack-
nowledge that they participated equally in the negotiation and drafting of this
4
2487625 8-1544 P-482 04/25/96 01:57P PG 4 OF 26
Franchise Agreement and that, accordingly, no court construing this Franchise
Agreement shall construe it more stringently against one party than against the
other.
9. SERVICE AREA AND LINE EXTENSIONS. SHCC shall offer nondiscriminatory cable
service to the County. It shall be the obligation of SHCC to furnish cable
service to those areas of the County in such areas where SHCC offers such service
and having a density of at least 25 homes or dwelling units per lineal cable mile
as measured from the existing terminus of the Cable System. Additionally, SHCC
shall extend its service to any person within the County who elects to subscribe
to the cable service if they are less than 125 feet from the trunk or
distribution cable. However, for unusual circumstances, such as the existence
of more than 125 feet of distance from distribution cable to connection of
service to subscribers, or a density of less than 25 homes or dwelling units per
5,280 cable-bearing strand feet of trunk or distribution cable, cable service or
other service may be made available on the basis of a capital contribution in aid
of construction, including cost of material , labor, and easements. For the
purpose of determining the amount of capital contribution in aid of construction
to be borne by SHCC and subscribers in the area in which cable service may be
expended, SHCC will contribute an amount equal to the construction and other
costs per mile, multiplied by a fraction whose numerator equals the actual number
of potential subscribers per 5,280 cable-bearing strand feet of its trunk or
distribution cable, and whose denominator equals 25. Other potential subscribers
will bear the remainder of the construction and related costs on a pro rata
basis. SHCC may require that the payment of the capital contribution in aid of
construction borne by such potential subscribers be paid in advance.
10. SYSTEM.
10.1 Present System. The parties understand and agree that the Cable
System in the County operated by SHCC at the time of this franchise grant
consists of a residential network with a capacity of 54 channels.
10.2 Neither SHCC nor the County shall be required to provide a studio for
public access purposes. However, SHCC will make its existing public access
studios and facilities available to Weld County subscribers.
11. TECHNICAL STANDARDS. The Cable System operated hereunder shall at all times
operate and be updated as needed so that, at a minimum, it is in conformance with
all federal , state and local technical specifications (as they may be amended)
including but not limited to technical specifications contained in FCC rules and
regulations (as they may be amended) , or any other applicable law which may
supersede such rules. Regardless of the technical standards that may be appli-
cable, SHCC shall use its good faith efforts to provide to subscribers video and
audio signals of consistently good quality.
12. SYSTEM DESIGN AND CAPACITY. The following requirements shall govern and be
applicable to the Cable System by SHCC:
12.1 System Configuration. The system shall be as described in Attachment
A.
5
2487625 8-1544 P-482 04/25/96 01:57P PG 5 OF 26
12.2 Addressability. The Cable System shall be addressable with capability
for users to acquire signal security for selected channels and subchannels
through techniques such as signal scrambling or encoding.
12.3 Capacity for Two-Way Residential Services. The Cable System shall
have the capability for two-way residential services.
12.4 Standby Power. SHCC shall provide standby power-generating capacity
at the headend of at least four hours. SHCC shall maintain strategically
located standby power system supplies throughout the Cable System, rated
for at least two hours duration.
12.5 Interconnections. Upon the request of the County, SHCC shall nego-
tiate in good faith to interconnect the Cable System with neighboring Cable
Systems.
13. CONSTRUCTION.
13.1 Right of Inspections. The County shall have the right to inspect all
construction and installation work performed subject to the provisions of
this franchise, and shall make such reasonable tests as it shall find nece-
ssary to ensure compliance with the terms of this Franchise Agreement and
other pertinent provisions of the law; provided, however, that the County
shall be permitted to charge SHCC its usual and customary fees of general
applicability for the inspection of construction in the streets; and pro-
vided, further, that such inspection and tests shall not interfere with the
operation of the Cable System and the provision of subscriber services.
13.2 Detailed Plan. Upon request, SHCC shall provide the County a detailed
construction plan indicating a schedule, area construction maps, test
plans, and projected dates for offering service. Upon request, SHCC shall
update this information on a monthly basis, by the tenth day of each subse-
quent month for the duration of the construction period, showing specifi-
cally whether schedules are being met and the reasons for any delay. SHCC
shall adhere to the construction schedule as submitted subject to force
majeure.
14. LEASED ACCESS CHANNELS. SHCC shall offer leased access channel capacity on
such terms and conditions and rates as may be negotiated with each lessee subject
to the requirements of the Cable Acts.
15. GENERAL PROVISIONS. The following provisions shall be applicable to the
Cable System upon the effective date of this Franchise Agreement and shall be
applicable throughout the life of the franchise.
15.1 Emergency Alert Capabilities. In the case of any emergency or
disaster, SHCC shall , upon request of the County, make available its
facilities and personnel to the County to provide emergency information and
instructions during the emergency or disaster period. SHCC shall also
provide the system with capability to transmit emergency alert signals
using an audio override provided that such equipment is available
technologically. The County shall hold SHCC, its agents, employees,
6
2487625 B-1544 P-482 04/25/96 01:57P PG 6 OF 26
officers, and assigns hereunder, harmless from any claims arising out of
the emergency use of SHCC's facilities by the County, including, but not
limited to, reasonable attorneys' fees and costs. SHCC shall also provide
emergency override capability to permit the County (as and if required by
the Americans with Disabilities Act) to cablecast a message on all channels
simultaneously in the event of disaster or public emergency.
15.2 Parental Control Devices. SHCC shall make available to subscribers
the ability to lock out such channels as they may desire. SHCC reserves
the right to charge for such services and equipment.
15.3 Service to Multiple Family Dwelling Units. SHCC shall offer the
individual units of a multiple family dwelling unit all services offered to
other dwelling units in the County; provided, however, that any such offer-
ing is conditioned upon the unit being passed by activated cable and SHCC
having legal access to said unit.
15.4 Minimum Interference. All transmission lines, equipment, and struc-
tures shall be installed, constructed, maintained and located so as to
cause minimum interference with the rights and reasonable convenience of
property owners and at all times be kept and maintained in a safe and
adequate condition, and in good order and repair. SHCC shall , at all
times, employ necessary and reasonable care and shall install and maintain
in use commonly accepted methods and devices for preventing failures and
accidents which are likely to cause damage, injury, or nuisances to the
public. Suitable barricades, flags, lights, flares, or other devices shall
be used at such times and places as are reasonably required for the safety
of all members of the public.
15.5 Test and Compliance Procedures.
a. SHCC, at its cost, shall perform all tests necessary to determine
compliance with the FCC prescribed technical standards.
1) Initial proof of performance test. Upon request, SHCC shall
provide to the County at SHCC's expense an initial proof of
performance test for each section of the Cable System, to confirm
the extent to which that section of the Cable System complies
with the applicable technical standards. Further, SHCC, at its
expense, shall provide the County within 30 days of completion of
the system, its written opinion that the system has been
completed.
2) Certifications and recertifications. SHCC shall , no less
often than as provided by law, perform at SHCC's expense, a proof
of performance test to verify that the system conforms to all
requirements specified in this Franchise Agreement and applicable
law. Upon request, copies of the results of such proof of
performance tests shall be provided to the County.
3) Signal leakage tests and reports. SHCC shall specifically
monitor the complete plant, downstream and upstream, on an on-
7
2487625 B-1544 P-482 04/25/96 01:57P PG 7 OF 26
going and regular basis for signal leakage and shall submit to
the County, on request, a written report detailing the section
tested, measurements recorded at specified locations, and correc-
tions made. Written records of test results shall be maintained
and shall be available for County inspection upon request.
4) The County may perform technical tests of the Cable System
during reasonable times and in a manner which does not unreason-
ably interfere with the normal business operations of SHCC or the
Cable System in order to determine whether or not SHCC is in
compliance with the terms hereof and applicable local , state and
federal laws. Except in emergency circumstances, such tests may
be undertaken only after giving SHCC reasonable notice thereof,
and providing a representative of SHCC an opportunity to be
present during such tests. In the event that such testing
demonstrates that SHCC has substantially failed to comply with a
material requirement hereof, the reasonable costs of such tests
shall be borne by SHCC. In the event that such testing demon-
strates that SHCC has substantially complied with such material
provisions hereof, the cost of such testing shall be borne by the
County. Except in emergency circumstances, the County agrees
that such testing shall be undertaken no more than two times a
year in the aggregate, and that the results thereof shall be made
available to SHCC upon SHCC's request.
b. Notice of shutdown. At least 12 hours before any planned shut-
down in excess of four hours, SHCC shall give notice to the County
when possible, of maintenance or major equipment changeouts which
require loss of service to 25 or more customers.
c. Employee identification. SHCC shall provide a standard identi-
fication document to all employees, including employees of contractors
and subcontractors, who will be in contact with the public. Such
documents shall include a telephone number that can be used to verify
identification.
15.6 Services for the Disabled. SHCC shall comply with all applicable
federal , state and local laws regarding services for the disabled.
15.7 Free Service. SHCC shall provide without charge one outlet of all of
its basic services and expanded basic services (or future equivalent
services) to the Franchising Authority's office building(s), each public
library, fire station(s) , police stations(s) , and private and public school
building(s) that are passed by its Cable System in the County. The outlets
of basic and expanded basic services shall not be used to distribute or
sell Cable Services in or throughout such buildings; nor shall such outlets
be located in common or public areas open to the public. Notwithstanding
anything to the contrary set forth herein, SHCC shall not be required to
provide an outlet to such buildings where the drop line from the feeder
cable to said buildings or premises exceeds 125 cable feet, unless it is
technically feasible and so long as it will not adversely affect the
operational , financial condition, or market development of the Cable System
8
2487625 B-1544 P-482 04/25/96 01:57P PG 8 OF 26
to do so, or unless the appropriate entity agrees to pay the incremental
cost of such drop line in excess of 125 cable feet. In the event that
additional outlets of basic and expanded basic services are provided to
such buildings, the building owner shall pay the usual installation fees
associated therewith, including, but not limited to, labor and materials at
actual cost. However, the basic and expanded basic services shall be
provided free of charge regardless of the number of outlets provided to
such buildings.
16. CUSTOMER SERVICE STANDARDS. SHCC shall fully comply with the Customer
Service Standards as set forth in Attachment B which are attached hereto and
incorporated herein by reference.
17. EQUAL EMPLOYMENT OPPORTUNITY. SHCC shall comply with all applicable equal
employment opportunity laws.
18. FRANCHISE RENEWAL. The County and SHCC agree that any proceedings under-
taken by the Franchising Authority that relate to the renewal of SHCC's franchise
shall be governed by and comply with the provisions of Section 626 of the Cable
Acts, unless the procedures and substantive protections set forth therein shall
be deemed to be preempted and superseded by the provisions of any subsequent
provision of federal or state law.
In addition to the procedures set forth in said Section 626(a), the County agrees
to notify SHCC of the completion of its assessments regarding the identification
of future cable-related community needs and interests, as well as, the past
performance of SHCC under the then current franchise term. Notwithstanding
anything to the contrary set forth herein, SHCC and the County agree that at any
time during the term of the then current franchise, while affording the public
adequate notice and opportunity for comment, the County and SHCC may agree to
undertake and finalize negotiations regarding renewal of the then current
franchise and the County may grant a renewal thereof. SHCC and the County
consider the terms set forth in this section to be consistent with the express
provisions of Section 626 of the Cable Acts.
19. POLICE POWERS. In accepting this franchise, SHCC acknowledges that its
rights hereunder are subject to the police powers of the County to adopt and
enforce general ordinances necessary to the safety and welfare of the public and
it agrees to comply with all applicable general laws and ordinances enacted by
the County pursuant to such power.
20. FRANCHISE FEES.
20.1 SHCC, in consideration of the privilege granted under this franchise
for the use of streets and public ways and the privilege to construct and
operate a Cable System, shall pay to the County 5% of SHCC's annual gross
receipts collected during the period of its operation under the franchise
in the County. The franchise fee payable by SHCC to the County on gross
revenues from any non-cable television related programming product or other
communications services such as interactive, data, telephone transmission
or other communication products or services, shall be subject to federal
law with the parties negotiating in good faith, but shall be at the same
9
2487625 B-1544 P-482 04/25/96 01:57P PG 9 OF 26
rate but no greater than the franchise fee payable to the County by all
other providers of the same product or service within the Service Area.
Each payment shall be accompanied by a brief report from a representative
of SHCC showing the basis for the computation.
20.2 SHCC shall file with the County, within 30 days after the last day of
each quarter, a revenue statement showing the gross revenues received by it
during the preceding quarter, together with the franchise fee for said
preceding quarter. SHCC shall also file, no later than 90 days after the
end of each of its fiscal years, SHCC's revenue statements for the
preceding year, certified as true and correct by a financial officer of
SHCC.
20.3 The County shall have the right to inspect such of SHCC's income
records, to audit any and all relevant records necessary to enforcement of
the franchise, and to recompute any amounts determined to be payable under
the franchise.
20.4 In the event that any franchise payment is not received by the County
on or before the applicable dates, interest shall be charged from such due
date at an annual interest rate of 18% plus a late charge of 5% will also
be due and owing.
20.5 In the event the franchise is revoked or otherwise terminated prior to
its expiration date, SHCC shall file with the County, within 90 days of the
date of revocation or termination, a certified revenue statement showing
the gross receipts received by it since the end of the previous year and
shall make adjustments at that time for the franchise fees due up to the
date of revocation or termination.
20.6 No acceptance of any payment by the County shall be construed as a
release or as an accord and satisfaction of any claim the County may have
for further or additional sums payable as a franchise fee or for the
performance of any other obligation of SHCC.
20.7 The parties acknowledge that the franchise fees payable by SHCC to the
County shall not exceed the amount set at any time by federal law.
20.8 The period of limitation for recovery of any franchise fees payable
hereunder shall be five years from the date on which payment by SHCC is
due. Unless within five years from and after said payment due date the
County initiates a lawsuit for recovery of such franchise fees in a court
of competent jurisdiction, such recovery shall be barred and the County
shall be estopped from asserting any claims whatsoever against SHCC
relating to any such alleged deficiencies.
20.9 The franchise fees shall not be considered in the nature of a tax, but
shall be in addition to any and all taxes which are now or hereafter
required to be paid by any law of the County, the State of Colorado, or the
United States.
10
2487625 B-1544 P-482 04/25/96 01:57P PG 10 OF 26
20.10 If the results of an audit by the County show a discrepancy of
more than 5% in the franchise fees that were to be paid to the County, SHCC
shall pay for the cost of such audit.
20.11 In the event that franchise fees are prohibited by any law or
regulation, SHCC shall negotiate in good faith with the County for an
equitable payment for use of the public rights-of-way. Such payments shall
be made on a monthly basis with the same procedure as specified in Section
20 herein.
21. REGULATION, RATES, AND CHARGES.
21.1 Regulatory Authority. The County may exercise appropriate regulatory
authority under the provisions of this Franchise Agreement and applicable
law. Regulation may be exercised through any duly designated County office
or duly established body appointed to advise or support the County in its
regulatory responsibilities.
21.2 The County and SHCC acknowledge that any future regulation of rates
and charges relating to the provision of Cable Services and equipment under
this Franchise Agreement shall be governed by applicable federal , state and
local laws and the rules and regulations of the FCC (as amended) . In addi-
tion, the County may from time to time elect not to regulate SHCC's rates
and charges, but any such election shall not waive the County's right to
regulate in the future. When the County does elect to regulate, it shall
first promulgate necessary rules and procedural standards that conform to
applicable laws and FCC requirements. Thereafter, the County and SHCC will
adhere to such procedures in evaluating and resolving any matters which
arise concerning rates and charges which are subject to rate regulation
under applicable laws and FCC rules and regulations.
21.3 SHCC shall not, as to rates, charges, services, service facilities,
rules, regulations or in any other respect, make or grant any undue pre-
ference or advantage to any person, or subject any person to any undue
prejudice or disadvantage. Nothing in this paragraph shall be construed as
a prohibition of providing free service or service at a reduced rate to
SHCC employees or to the resident managers of multi-family residential
units or similar situations.
22. CONSTRUCTION PROVISIONS.
22. 1 SHCC's Cable System constructed within the County shall meet or
exceed all technical standards of the FCC and other applicable federal ,
state and local laws as they now exist or may hereafter be amended.
22.2 SHCC shall not erect or authorize or permit others to erect any
poles within the streets of the County for operation of its Cable System.
22.3 Upon its receipt of reasonable advance notice, not to be less than
48 business hours, SHCC shall , at its own expense, protect, support,
temporarily disconnect, relocate in the streets or public way, or remove
from the streets or public way, any property of SHCC when lawfully required
11
2487625 B-1544 P-482 04/25/96 01:57P PG 11 OF 26
by the County by reason of traffic conditions, public safety, street
abandonment, freeway and street construction, change or establishment of
street grade, installation of sewers, drains, gas or water pipes, or any
other type of structures or improvements by the County. If public funds
are available to any company using such street, easement, or right of way
for the purpose of defraying the cost of any of the foregoing, such funds
shall also be made available to SHCC.
22.4 SHCC shall , on the request of any person holding a building moving
permit issued by the County, temporarily raise or lower its wires to permit
the moving of such building, provided:
a. The expense of such temporary raising or lowering of wires is
paid by said person, including, if required by SHCC, making such
payment in advance; and,
b. SHCC is given not less than five business days advance written
notice to arrange for such temporary wire changes.
22.5 SHCC shall have the authority to trim trees or other natural growth
overhanging any of its Cable System in the service area so as to prevent
branches from coming in contact with SHCC's wires, cables, or other equip-
ment. SHCC shall reasonably compensate the County or property owner for
any damages caused by such trimming, or shall , at its own cost and expense,
reasonably replace all trees or shrubs damaged as a result of any
construction, operation or maintenance of the Cable System.
22.6 Subject to any applicable local , state or federal regulations or
tariffs, the County shall have the right to make additional use, for any
public purpose, of any poles or conduits owned exclusively by or for SHCC
in any street or public way; provided that:
a. Such use by the County does not interfere with a current or
future use by SHCC;
b. The County holds SHCC harmless against and from all claims,
demands, costs, or liabilities of every kind and nature whatsoever
arising out of such use of said poles or conduits, including, but
not limited to, reasonable attorneys' fees and costs; and,
c. At SHCC's discretion, the County may be required either to pay
a reasonable rental fee or otherwise reasonably compensate SHCC for
the use of such poles, conduits, or equipment; provided, however,
that SHCC agrees that such compensation or charge shall not exceed
those paid by it to public utilities pursuant to the applicable pole
attachment agreement, or other authorization, relating to the
service area, and
d. The County does not utilize SHCC's facilities and
equipment for the provision of services which are
competitive to those services provided by SHCC.
12
2487625 B-1544 P-482 04/25/96 01:57P PG 12 OF 26
22.7 In those areas of the service area where all or any part of the
transmission or distribution facilities of the respective public utilities
providing telephone communications and electric services are underground,
SHCC likewise shall construct, operate, and maintain all of its transmis-
sion and distribution facilities underground. In those areas of the ser-
vice area where the transmission or distribution facilities of the respec-
tive public utilities providing electric services are underground, SHCC
shall place its facilities and equipment underground. Nothing contained in
this section shall require SHCC to construct, operate, and maintain
underground any ground-mounted appurtenances such as subscriber taps, line
extenders, system passive devices (splatters, directional couplers) , ampli-
fiers, power supplies, pedestals, or other related equipment. With regard
to new subdivisions within the service area after the effective date of
this franchise, if all or part of the transmission or distribution facili-
ties of the respective public utilities providing telephone communications
and electric services are placed underground, SHCC shall then construct,
operate, and maintain all of its transmission and distribution facilities
underground. All placement by SHCC of its property underground shall be at
the sole cost and expense of SHCC.
22.8 The County shall have the right to inspect all construction and
installation work performed by SHCC pursuant to this Franchise Agreement as
it shall find necessary to ensure compliance by SHCC.
22.9 All construction, installation, and maintenance of the Cable System
shall be performed in an orderly and workmanlike manner and must comply
with the National Electrical Safety Code, the National Electric Code, the
Bell System Manual of Construction Procedures, all federal , state and local
regulations, and generally accepted industry practices.
22.10 Worker facilities, conditions, and procedures shall comply with the
standards of the Occupational Safety and Health Administration.
22.11 SHCC at its own cost and expense and in the manner approved by the
County shall replace and restore all paving, sidewalks, driveways, or the
surface of any street or alley disturbed, in as good a condition as before
the work was commenced. Failure of SHCC to replace or restore such paving,
sidewalk, driveway, street surface, or alley within 48 hours after
notification by the County shall entitle the County to cause the proper
restoration to be made at SHCC's expense.
22.12 Whenever SHCC shall cause or any person acting on its behalf shall
cause any injury or damage to any private property by or because of the
installation, maintenance or operation of its cable communications facili-
ties, such injury or damage shall be remedied fully by SHCC at its expense.
22.13 No installation of any cable communications facility shall be
performed or conducted within any of the streets of the County unless plans
therefor shall have been first submitted to the director of public works of
the County and a construction permit issued therefor.
13
2487625 8-1544 P-482 04/25/96 01:57P PG 13 OF 26
22.14 Upon failure of SHCC to commence, pursue or complete any work
required of it by law or by the provisions of this franchise to be done in
any street, the County shall give written notice thereof to SHCC. If SHCC
has failed to remedy the situation within 30 days after receipt of such
notice, the County, at its option, may cause such work to be done and SHCC
shall pay to the County the cost thereof in the itemized amounts reported
by the County to SHCC, within 30 days after receipt of such itemized
report.
23. INSURANCE PROVISIONS.
23.1 Comprehensive Liability Insurance. SHCC shall at all times during
the existence of this franchise maintain in full force and effect at SHCC's
own cost and expense, a comprehensive liability insurance policy with a
company which is licensed to do business in the state, protecting, indem-
nifying and defending the County, Board of Commissioners and any officers,
boards, commissions, authorized agents and employees thereof from and
against any and all claims, demands, actions, suits and proceedings by
others, against all liabilities to others, including but not limited to any
liability for damages by reason of, or arising out of, any failure by SHCC
to secure consents from the owners, authorized distributors or licensees of
programs to be transmitted or distributed by SHCC, and against any loss,
cost, expense, and damages including reasonable attorneys' fees, arising
out of the exercise or enjoyment of the franchise. Further, the
comprehensive liability insurance policy shall protect, indemnify and
defend the County, Board of Commissioners, and any officers, boards, com-
missions, authorized agents and employees thereof, from and against all
claims by any person whatsoever for loss or damage for personal injury,
death or property damage occasioned by the operations of SHCC under SHCC's
franchise, or alleged to so have been caused or occurred, with minimum
liability limits of $1,000,000 for personal injury or death to any one
person in any one occurrence, and $2,000,000 for personal injury or death
to two or more persons in any one occurrence, and $2,000,000 for damage to
property resulting from any one occurrence. The County shall be named as
an additional insured and will be provided a certificate of insurance
evidencing the coverages required herein.
23.2 Other Insurance. SHCC shall also provide Workmen's Compensation
Insurance as required by Colorado law.
23.3 Changes in Insurance - Notice to County Required. All insurance
coverage shall provide for at least thirty days' prior written notice to
the County Clerk in the event of material alterations or cancellation of
any coverage afforded in the policies, before such alteration or
cancellation becomes effective.
23.4 Insurance - No Limitation of Liability. SHCC's maintenance of
insurance policies required by this franchise shall not be construed to
excuse unfaithful performance by SHCC or to limit the liability of SHCC to
the coverage provided in the insurance policies, or otherwise to limit the
County's recourse to any other remedy available at law or in equity.
14
2487625 B-1544 P-482 04/25/96 01:57P PG 14 OF 26
24. INDEMNIFICATION. To the extent allowed by law, SHCC shall , at its sole cost
and expense, indemnify and hold harmless the County, Board of Commissioners, and
any officers, boards, commissions, authorized agents and employees thereof, at
all times and shall pay all damages and penalties which the County may be legally
required to pay as a result of the construction, operation or maintenance of the
Cable System. Such damages and penalties shall include, without limitation,
damages arising out of copyright infringements, and the construction, erection,
operation, maintenance and repair of the Cable System, whether or not any act or
omission complained of is authorized, allowed or prohibited by this franchise.
If legal action is filed against the County, either independently or jointly with
SHCC to recover for any claim or damages, SHCC, upon notice to it by the County,
shall defend the County against the action. In the event of a final judgment
being obtained against the County, either independently or jointly with SHCC, for
which SHCC has indemnified the County, SHCC shall pay the judgment and all costs
and hold the County harmless therefrom. Nothing in this franchise shall be
interpreted to abridge or otherwise affect the County's right to intervene or
participate in any suit, action or proceeding at the County's expense involving
any provisions of this franchise. SHCC shall pay all expenses incurred by SHCC
and the County in defending with regard to all damages as set forth in this
section. These expenses shall include, without limitation, all out-of-pocket
expenses, attorneys' fees, witness and discovery costs and expenses.
Additionally, the reasonable value of any services rendered by the County
Attorney and its office, and any other agents and employees of the County shall
also be paid by SHCC if SHCC requests such services.
25. BOND OR OTHER SURETY. SHCC shall provide the County with either a $25,000
performance bond or deposit $25,000 into a locally maintained escrow account to
guarantee the due and punctual performance of any and all obligations of SHCC set
forth under this Franchise. The County shall approve the form and content of the
bond or the escrow agreement.
26. DAMAGES/TERMINATION.
26.1 Whenever the County finds that SHCC has allegedly violated one or
more terms, conditions or provisions of this Franchise Agreement, a written
notice shall be given to SHCC by the County. The written notice shall
describe in reasonable detail the alleged violation so as to afford SHCC an
opportunity to remedy the violation. SHCC shall have 30 days subsequent to
receipt of the notice in which to correct the violation before the County
may resort to the imposition of damages.
26.2 Neither the right to damages nor the payment of damages shall bar or
otherwise limit the right of the County in a proper case to:
a. Obtain judicial enforcement of SHCC's obligations by means of
specific performance, injunctive relief, mandate, or other remedies
at law or in equity; or,
b. Consider any substantial violation as grounds for forfeiture and
termination of the franchise.
26.3 Forfeiture and Termination.
15
2487625 B-1544 P-482 04/25/96 01:57P PG 15 OF 26
a. In addition to all other rights and powers retained by the
County under this franchise, the County reserves the right to termi-
nate the franchise and all rights and privileges of SHCC in the
event of a substantial breach of its terms and conditions. A sub-
stantial breach by SHCC shall include, but shall not be limited to,
the following:
1) An uncured violation of any material provision of this
franchise or any material rule, order, regulation, or
determination of the County made pursuant thereto;
2) An attempt to evade any material provision of the franchise
or practice any fraud or deceit upon the Cable System subscri-
bers or upon the County;
3) SHCC abandons the system or terminates the system's
operations;
4) SHCC fails to pay the franchise fees in accordance with this
franchise;
5) Failure to restore service after 96 hours of an outage or
interrupted service; except when approval of such outage or
interruption is obtained from the County;
6) Material misrepresentation of facts in the application, pro-
posal or during the negotiations relating to this franchise;
7) Failure to provide insurance and indemnity as required by
the franchise;
b. None of the foregoing shall constitute a major breach if a
violation occurs which is without fault of SHCC or occurs as a
result of circumstances beyond SHCC's control . SHCC shall not be
excused by mere economic hardship or by nonfeasance or malfeasance
of directors, officers, agents, or employees; provided, however,
that damage to equipment causing service interruptions shall be
deemed to be the result of circumstances beyond SHCC's control if it
is caused by sabotage or vandalism or malicious mischief. SHCC
shall bear the burden of proof in establishing the existence of such
conditions.
c. The County shall make a written demand that SHCC comply with any
such provision, rule, order, or determination under or pursuant to
the franchise. If the violation by SHCC continues for a period of
30 days following receipt of such written demand without written
proof that corrective action has been taken or is being actively and
expeditiously pursued, the County may consider terminating the fran-
chise; provided, however, a written notice thereof shall be given to
SHCC at least 15 days in advance of such termination and SHCC must
be given an opportunity to appear before the Board of Commissioners
to present its arguments.
16
2487625 8-1544 P-482 04/25/96 01:57P PG 16 OF 26
d. Should the County determine, following the public hearing, that
the violation by SHCC was the fault of SHCC and within SHCC's
control , the County may declare that the franchise be forfeited and
terminated; provided, however, the County may, in its discretion,
provide an opportunity for SHCC to remedy the violation and come
into compliance with the franchise so as to avoid termination. In
no event will an election be required to revoke a franchise.
26.4 Foreclosure. Upon the foreclosure or other judicial sale of all or
a substantial part of the Cable System, SHCC shall notify the County of
such fact and such notification or the occurrence of such event shall be
treated as a notification that a change in control of the franchise has
taken place and such change in control is subject to the consent of the
County.
26.5 Receivership or Bankruptcy. The County shall have the right to
cancel this franchise 120 days after the initiation of bankruptcy
proceedings by or against SHCC or the appointment of a receiver, or
trustee, to take over and conduct the business of SHCC, whether in
receivership, reorganization, bankruptcy, or other action or proceeding,
unless such bankruptcy, reorganization, receivership, trusteeship or other
action or proceeding shall have been vacated prior to the expiration of
said 120 days, or unless:
a. Within 120 days after the election or appointment, such receiver
or trustee shall have fully complied with all of the provisions of
the franchise and remedied any defaults thereunder; and
b. Within 120 days, such receiver or trustee shall have executed an
agreement duly approved by the court having jurisdiction whereby
such receiver or trustee assumes and agrees to be bound by each and
every provision of this franchise.
26.6 Removal of Cable System. At the expiration of the term for which
this franchise has been granted, or upon its termination or revocation as
provided herein, SHCC shall forthwith, upon notice by the County, remove at
SHCC's own expense all designated portions of the Cable System from all
streets and public ways within the County, and shall restore said streets
and public ways to their former condition; provided, however, SHCC shall
have the right to sell its physical plant to a subsequent franchisee,
subject to County approval in which case said plant need not be removed and
SHCC shall continue to operate the Cable System during such interim period
prior to the sale. If SHCC fails to remove or operate its facilities upon
request, the County may perform the work at SHCC's expense. Any property
of SHCC remaining in place 180 days after the expiration, termination or
revocation of this franchise shall be considered permanently abandoned and
may become the property of the County at its discretion.
27. TRANSFER OF OWNERSHIP OR CONTROL.
27.1 The Cable System and this franchise shall not be sold, assigned,
transferred, leased, or disposed of, either in whole or in part, either by
17
2487625 8-1544 P-482 04/25/96 01:57P PG 17 OF 26
involuntary sale or by voluntary sale, merger, consolidation, or mortgaged
in any manner, nor shall title thereto, either legal or equitable, or any
right, interest, or property therein pass to or vest in any person or
entity, without the prior consent of the County, which consent shall not be
unreasonably withheld.
27.2 The provisions of this section shall apply to the sale or transfer
of all or a majority of SHCC's assets, merger (including any parent and its
subsidiary corporation), consolidation, creation of a subsidiary
corporation or sale or transfer of stock in SHCC so as to create a new
controlling interest. The term "controlling interest" as used herein is
not limited to majority stock ownership, but includes actual working
control in whatever manner exercised.
a. The parties to the merger, sale or transfer shall make a written
request to the County for its approval of a merger, sale or transfer
and furnish all information related to the merger, sale or transfer
required by law and the County.
b. Upon receipt of all requested information, the County shall
render a final written decision on the request within 120 days of
the request. If the County fails to render a final decision on the
request within 120 days, such request shall be deemed granted unless
the requesting party and the County agree to an extension of time.
c. Within 30 days of any merger, transfer or sale, if approved or
deemed granted by the County, SHCC shall file with the County a copy
of a written instrument evidencing such merger, sale or transfer of
ownership or control , or lease, certified and sworn to as correct by
SHCC and the transferee shall file its sworn acceptance and
agreement to abide by each and every provision of this Franchise
Agreement.
27.3 In reviewing a request for merger, sale or transfer, the County may
inquire into the legal , technical and financial qualifications of the
prospective controlling party or transferee, and SHCC shall assist the
County in so inquiring. The County may condition its consent upon such
terms and conditions as it deems reasonably appropriate; provided, however,
the County shall not unreasonably withhold its approval ; and any such terms
and conditions so attached shall be related to the legal , technical , and
financial qualifications of the prospective controlling party or transferee
and to the resolution of outstanding and unresolved issues of noncompliance
with the terms and conditions of this franchise by SHCC.
27.4 Notwithstanding the provisions of this Section, the County
acknowledges that Comcast Corporation, Inc. , has met the criteria set
forth herein and that there are no additional conditions required by
the County for the proposed transfer. The proposed transfer of the
controlling interest of SHCC to Comcast Corporation, Inc. and its
subsidiaries and affiliates, as the controlling interest, is deemed
approved simultaneously with the approval of the granting of this
18
2487625 B-1544 P-482 04/25/96 01:57P PG 18 OF 26
franchise to SHCC. SHCC shall give written notice to County upon
completion of the transfer of control .
28. COOPERATION. The parties recognize that it is in their mutual best inte-
rests for the Cable System to be operated as efficiently as possible and for the
construction of the system to occur in accordance with the requirements and
schedule set forth in this franchise. To achieve this, the parties agree to
cooperate with each other in accordance with the terms and provisions of this
franchise.
29. WAIVER. The failure of the County at any time to require performance by
SHCC of any provision hereof shall in no way affect the right of the County
hereafter to enforce the same. Nor shall the waiver by the County of any breach
of any provision here of be taken or held to be a waiver of any succeeding breach
of such provision, or as a waiver of the provision itself.
30. BOOKS AND RECORDS. SHCC agrees that the County may review such of SHCC's
books and records, during normal business hours and on a nondisruptive basis, as
is reasonably necessary to monitor compliance with the terms hereof. Such
records shall include, but shall not be limited to, any public records required
to be kept by SHCC pursuant to the rules and regulations of the FCC.
Copies of all petitions, applications and communications sent to or exchanged
between SHCC and the FCC, Securities and Exchange Commission or any other federal
or state regulatory commission or agency having jurisdiction in respect to any
matter affecting Cable System operations, so far as the same pertains to any
aspect of the service or operations of SHCC in the County, shall also be
submitted to the County within 30 days upon request of the County.
31. CUMULATIVE PROVISION. The rights and remedies reserved to the County by
this franchise are cumulative and shall be in addition to and not in derogation
of any other rights or remedies which the County may have with respect to the
subject matter of this franchise, and a waiver thereof at any time shall have no
effect on the enforcement of such rights or remedies at a future time.
32. COMPLIANCE WITH FEDERAL, STATE, AND LOCAL LAWS. SHCC, its contractors,
employees, and agents, shall be familiar with all federal , state and local laws,
ordinances, rules and regulations which in any manner affect those engaged or
employed in the company, or the materials or equipment used in the company, or
in any way affect the company, and no plea of misunderstanding will be considered
upon account of the ignorance thereof. SHCC, its contractors, employees, and
agents shall comply with all applicable federal , state, and local laws, rules,
and regulations issued pursuant thereto. SHCC and the County have carefully
reviewed this franchise and believe that all provisions hereof are in full
compliance with all local, state, and federal laws and regulations in effect on
the date of execution, including the Cable Acts. SHCC and the County shall also
be entitled to all rights and be bound by all changes in local , state, and
federal law which occur subsequent to the effective date of this Franchise
Agreement. SHCC and the County acknowledge that their rights and obligations
under this Franchise Agreement are explicitly subject to all such changes.
19
2487625 B-1544 P-482 04/25/96 01:57P PG 19 OF 26
33. NOTICES. Unless expressly otherwise agreed between the parties, every
notice or response required by this Franchise to be served upon the Franchising
Authority or the Grantee shall be in writing, and shall be deemed to have been
duly given to the required party five business days after having been posted in
a properly sealed and correctly addressed envelope when hand delivered or sent
by certified or registered mail , postage prepaid.
The notices or responses to the County shall be addressed as follows:
Weld County
Board of County Commissioners
P.O. Box 758
Greeley, Colorado 80632
The notices or responses to SHCC shall be addressed as follows:
General Manager
Scripps Howard Cable Company
434 Kimbark Street
Longmont, Colorado 80501
The County and SHCC may designate such other address or addresses from time to
time by giving written notice to the other.
34. CAPTIONS. The captions to Sections contained herein are intended solely to
facilitate the reading thereof. Such captions shall not affect the meaning or
interpretation of the text herein.
35. FORCE MAJEURE. SHCC shall not be held in default with the provisions of the
franchise, nor suffer any enforcement or penalty relating thereto, where such
noncompliance or alleged defaults are caused by reasons of force majeure.
36. TIME IS OF THE ESSENCE. Whenever the franchise sets forth any time for any
act to be performed by either of the parties, such time shall be deemed to be of
the essence of this franchise.
37. CONSTRUCTION AGREEMENT. This franchise shall be governed, construed, and
enforced in accordance with the laws of the State of Colorado (as amended) , the
Cable Acts as amended, and any applicable rules, regulations, and orders of the
FCC and any other applicable local , state and federal laws, rules, regulations,
legislation, or orders (as such now exist, are later amended or subsequently
adopted) .
38. NO JOINT VENTURE. Nothing herein shall be deemed to create a joint venture
or principal-agent relationship between the parties, and neither party is
authorized to, nor shall either party act toward third persons or the public in
any manner which would indicate any such relationship with the other.
39. ENTIRE AGREEMENT. This Franchise Agreement and all attachments represent
the entire understanding and agreement between the parties hereto with respect
to the subject matter hereof and supersede all prior oral negotiations between
the parties. This Franchise Agreement can be amended, supplemented, modified,
20
2487625 8-1544 P-482 04/25/96 01:57P PG 20 OF 26
or changed only by an agreement in writing which makes specific reference to this
franchise or to the appropriate attachment and which is signed on behalf of both
parties.
40. ACTIONS OF COUNTY OR SHCC. In any action by the County or SHCC mandated or
permitted under the terms hereof, it shall act in a reasonable, expeditious, and
timely manner. Furthermore, in any instance where approval or consent is
required under the terms hereof, such approval or consent shall not be unreason-
ably withheld.
41. SEVERABILITY. If any section, sentence, paragraph, term, or provision
hereof is determined to be illegal , invalid, or unconstitutional , by any court
of competent jurisdiction or by any state or federal regulatory authority having
jurisdiction thereof, such determination shall have no effect on the validity of
any other section, sentence, paragraph, term, or provision hereof, all of which
will remain in full force and effect for the term of the franchise.
IN WITNESS WHEREOF, the parties hereto have caused this Franchise Agreement to
be above written.
COUNTY OF WELD, COLORADO
"e
C ,�, /Chairman of the Board of 04�
ae5z I��;tip {a�L-9 Maya? County Commissioners aaleko
v : , L L
-7 ty C erc t t e oar
APPR •
County Attorney to legal form
Accepted By:
SCRIP/PS ARD E COMPANY
By< w�
ATTEST:
C 6 7Y7 ,e�F.�„
Assittar(t secretary
21
2487625 B-1544 P-482 04/25/96 01:57P PG 21 OF 26
ATTACHMENT A
SYSTEM CONFIGURATION
The headend for the system which will serve Weld County residents from the
Longmont System will be located at 434 Kimbark Street in Longmont, Colorado. It
is a state of the art facility with modern satellite and broadcast receiving
equipment. It is the central hub for the fiber optic lasers and advertising
insertion equipment. It also houses the addressable controllers. Furthermore
it serves as the interface location for our telephone and billing systems. These
systems all operate in tandem utilizing an automated response system.
The distribution system will be a hybrid of fiber optic and coaxial cable. The
system will be constructed at 550 MHz, with addressability and two-way
capability. The system will provide for standby power in the field and at the
headend. The system will have the ability for local insertion of LO/PEG
programming, as well as character generated text, on both a live and taped delay
basis. The system will also have an emergency alert system and parental control
converters.
The system shall perform at all times within the FCC specifications and all
construction and installation practices will adhere to standard codes and
practices.
22
2487625 B-1544 P-482 04/25/96 01:57P PG 22 OF 26
ATTACHMENT B
CUSTOMER SERVICE STANDARDS
1. SHCC shall fully comply with the Customer Service Standards set forth
herein. Upon request SHCC shall report quarterly in a format reasonably
acceptable to the County, its performance against those standards.
2. In the event SHCC's performance in a quarter falls below a Standard, the
SHCC shall report, in writing, what steps are being taken to meet the Standard(s)
or why corrective action is not necessary. SHCC shall thereafter report on a
monthly basis its performance against any Standard which was not previously met
until the Standard is so met. Each monthly report shall state what corrective
steps are being taken.
3. In the event SHCC fails to meet any Standard for two consecutive monthly
reports, the County may, at its discretion, notify SHCC of the County's intention
to impose penalties if the next monthly report documents that SHCC has failed to
meet any such Standard. The penalties shall be retroactive to the date that SHCC
received notice from the County of its intention to impose penalties. Penalties
may continue to be assessed at the rate of $100.00 per day until a monthly report
documents that SHCC is in compliance with the Standards(s) .
4. The County may, at its discretion, retain an independent third party at
SHCC's expense to review and assess the quarterly reports by SHCC. SHCC shall
cooperate with the reasonable requests of the County during any such review.
The following standards are those minimum customer service standards to be met
by SHCC:
4.1 Cable System telephone availability.
a. SHCC will maintain a local , toll-free or collect call telephone
access line which will be available to its subscribers 24 hours a day,
seven days a week.
1) Trained company representatives will be available to respond
to customer telephone inquiries during normal business hours.
2) After normal business hours, the access line may be answered
by a service or an automated response system, including an
answering machine. Inquires received after normal business hours
must be responded to by a trained company representative on the
next business day.
b. Under normal operating conditions, telephone answer time by a
customer representative, including wait time, shall not exceed 30
seconds when the connection is made. If the call needs to be trans-
ferred, transfer time shall not exceed 30 seconds. These standards
shall be met no less than 90% of the time under normal operating
conditions, measured on a quarterly basis.
23
2487625 8-1544 P-482 04/25/96 01:57P PG 23 OF 26
c. SHCC will not be required to acquire equipment or perform surveys
to measure compliance with the telephone answering standards above
unless a historical record of complaints indicates a clear failure to
comply.
d. Under normal operating conditions, the customer will receive a
busy signal less than 3% of the time.
4.2 Installations, outages and service calls - Under normal operating
conditions, each of the following four standards will be met no less than
95% of the time measured on a quarterly basis:
a. Standard installations will be performed within seven business
days after an order has been placed. "Standard" installations are
those that are located up to 125 feet from the existing distribution
system.
b. Excluding conditions beyond the control of SHCC, SHCC will begin
working on "service interruptions" promptly and in no event later that
24 hours after the interruption becomes known. SHCC must begin
actions to correct other service problems the next business day after
notification of the service problem.
c. The "appointment window" alternatives for installations, service
calls, and other installation activities will be either a specific
time or, at maximum, a four-hour time block during normal business
hours. (SHCC may schedule service calls and other installation
activities outside of normal business hours for the express
convenience of the customer. )
d. SHCC may not cancel an appointment with a customer after the close
of business on the business day prior to the scheduled appointment.
e. If SHCC's representative is running late for an appointment with
a customer and will not be able to keep the appointment as scheduled,
the customer will be contacted. The appointment will be rescheduled,
as necessary, at a time which is convenient for the customer.
4.3 Communications between SHCC and cable subscribers:
a. Notification to Subscribers.
1) SHCC shall provide written information on each of the
following areas at the time of installation of service, at least
annually to all subscribers and the County, and at any time upon
request:
a) Products and services offered;
b) Prices and options for programming services and conditions
of subscriptions to programming and other services;
24
2487625 8-1544 P-482 04/25/96 01:57P PG 24 OF 26
c) Installation and service maintenance policies;
d) Instructions on how to use the cable service;
e) Channel positions of programming carried on the system;
and,
f) Billing and complaint procedures, including the address
and telephone number of the local franchising authority's
cable office.
2) Customers and the County will be notified of any changes in
rates, programming services or channel positions through announce-
ments on the Cable System and in writing. Notice must be given to
subscribers a minimum of 30 days in advance of such changes and to
the County a minimum of 60 days in advance of such changes if the
change is within the control of SHCC. In addition, SHCC shall
notify subscribers and the County 30 days in advance of any signi-
ficant changes in the other information required by the preceding
paragraph.
b. Billing.
1) Bills will be clear, concise and understandable. Bills must
by fully itemized, with itemizations including, but not limited
to, basic and premium service charges and equipment charges.
Bills will also clearly delineate all activity during the billing
period, including optional charges, rebates and credits.
2) In case of a billing dispute, SHCC must respond to a written
complaint from a subscriber within 30 days.
c. Refunds. Refund checks will be issued promptly, but no later than
either:
1) The customer's next billing cycle following resolution of the
request or 30 days, whichever is earlier, or,
2) The return of the equipment supplied by SHCC if service is
terminated.
d. Credits. Credits for service will be issued no later than that
customer's next billing cycle following the determination that a
credit is warranted.
4.4 Definitions.
a. Normal Operating Conditions. The term "normal operating condi-
tions" means those service conditions which are within the control of
SHCC including, but are not limited to, natural disasters, civil
disturbances, power outages, telephone network outages, and severe or
unusual weather conditions. Those conditions which are ordinarily
25
2487625 8-1544 P-482 04/25/96 01:57P PG 25 OF 26
within the control of SHCC include, but are not limited to, special
promotions, pay-per-view events, rate increases, regular, peak or
seasonal demand periods, and maintenance or upgrade of the Cable
System.
b. Service Interruption. The term "service interruption" means the
loss of picture or sound on one or more cable channels.
5. SHCC shall provide subscriber service on the following basis:
5. 1 SHCC shall not deny service, access, or otherwise discriminate against
any persons, including subscribers and users, on the basis of race, color,
religion, sex, disability, national origin, ancestry, or age. SHCC shall
comply at all times with all other applicable federal , state, and local
laws and regulations.
6. SHCC shall establish a maintenance service capable of promptly locating and
correcting system malfunctions. Service trucks shall be equipped for
communication with SHCC's dispatcher. In order to permit a rapid response to any
system-wide outage, SHCC shall have service trucks available for emergency duty
to repair system outages during non-business hours.
7. SHCC shall respond to and remedy customer complaints by the end of the next
working day or as agreed upon between SHCC and the subscriber. SHCC, whenever
reasonably practicable, shall make system repairs and testing, which would result
in any interruption of service to subscribers, at times which will least affect
typical subscriber television viewing habits. SHCC shall also keep a written
record of all complaints showing the date, subscriber's name and address, nature
of complaint, and corrective action taken by SHCC. Such records shall be made
available for inspection by the County on request.
8. In those cases where service is not restored within eight hours, SHCC shall
provide a credit to such subscriber upon request as hereinafter set forth for
such period and subsequent fractions thereof. The refund or credit shall be in
the amount of 1/30 the monthly charge for each tier of service and each premium
service which is unavailable to the subscriber per each calendar day or portion
thereof.
9. When similar complaints have been made by a number of subscribers, or where
other evidence exists which, in the judgement of the County, casts doubt on the
reliability or quality of the cable service, the County shall have the right and
authority to require that SHCC test, analyze and report on the performance of the
system. SHCC shall prepare a written report of the results, if requested, within
30 days after notice.
Nrmpm-n.mi
26
2487625 8-1544 P-482 04/25/96 01:57P PG 26 OF 26
•
ST. PAUL FIRE AND MARINE
INSURANCE COMPANY
Pnstsance Property&Lialahly St. Paul, Minnesota
A Capital Stock Company
BOND NO. 400JP8115
CABLE TELEVISION FRANCHISE BOND
KNOW ALL MEN BY THESE PRESENTS, that we, SCRIPPS HOWARD CABLE COMPANY, a Colorado
Corporation, (hereinafter called the "Principal), as Principal, and the ST. PAUL FIRE AND MARINE IN-
SURANCE COMPANY, a corporation organized under the laws of the State of Minnesota, with its Home Office
in the City of St. Paul, Minnesota(hereinafter called the "Surety"), as Surety, are held and firmly bound unto
THE COUNTY OF WELD, COLORADO, (hereinafter called the "Obligee), as Obligee, in the sum of
TWENTY FIVE THOUSAND AND 00/100 DOLLARS ($25,000.00), for the payment of which sum well and
truly to be made, we the said Principal and the said Surety, bind ourselves, our heirs, executors, administrators,
successors and assigns,jointly and severally, firmly by these presents.
WHEREAS, the Principal and the Obligee have entered into a written Agreement(hereinafter referred to as the
"Agreement"), dated . 1996, wherein the Obligee has granted a franchise to the Principal to use its
public streets and places to transmit and distribute electrical impulses through an open line-coaxial antenna system
located therein; and wherein the Principal has agreed to faithfully perform all of the obligations as detailed in the
Agreement, which is hereby referred to and made a part hereof as if fully set forth herein;
NOW, THEREFORE, the condition of this obligation is such that if the Principal shall well and truly keep all the
terms and conditions as outlined in said Agreement, then this obligation shall be null and void; otherwise to
remain in full force and effect.
PROVIDED, HOWEVER, this bond is executed by the Surety and accepted by the Obligee subject to the follow-
ing conditions:
1. No assignment of this bond shall be effective without the written consent of the Surety. ,
2. This obligation may be terminated by the Surety by Thirty (30)days advance written notice to the
Obligee, such notice may be sent by registered mail. Such termination shall not affect liability in-
curred under this obligation prior to the effective date of such termination.
3. PROVIDED, HOWEVER, it shall be a condition precedent to any right of recovery hereunder that,in
the event of any breach of the Agreement on the part of the Principal, a written statement of the
particular facts stating the nature of such breach shall be given as soon as reasonably possible by the
Obligee to the Surety and the Surety shall not be obligated to perform Principal's obligation until
thirty (30)days after Surety's receipt of such statement.
4. No action, suit or proceeding shall be had or maintained against the Surety on this bond unless the
same be brought or instituted within one year after the termination or release of this bond.
IN WITNESS WHEREOF, said Principal and said Surety have caused these presents to be executed and their
seals affixed this 27th day of March, 1996.
SCRIPPS HOWARD CABLE COMPANY
Principal
Bc__ //th7 ex(--
_
(Seal)
ST. PAUL FIRE AND MARINE INSURANCE COMPANY
By �i(�14/
Alma L. Luster, At -in-F ct
�V' L ST.PAUL FIRE AND MARINE INSURANCE COMPANY CERTIFICATE OF
111C 385 Washington Street,St.Paul,Minnesota 55102 AUTHORITY NO,
CERTIFIED For verification of the authenticity of this Power of Attorney,you may telephone toll free 1-800-421-3880 and ask for
COPY NO. the Power of Attorney Clerk.Please refer to the Certificate of Authority No.and the named individual(s).
GENERAL POWER OF ATTORNEY - CERTIFIED COPY 1715049
(Original on File at Home Office of Company. See Certification.)
KNOW ALL MEN BY THESE PRESENTS:That St.Paul Fire and Marine Insurance Company,a corporation organized and existing under the laws of the State
of Minnesota,having its principal office in the City of St.Paul,Minnesota,does hereby constitute and appoint:
Robert D. Lang, Mark T. Ruamler, Stephen F. Campbell, Alma L. Luster,
individually, Cincinnati, Ohio
its true and lawful attomey(s)-in-fact to execute, seal and deliver for and on its behalf as surety,any and all bonds and undertakings, recognizances,contracts of
indemnity and other writings obligatory in the nature thereof, which are or may be allowed, required or permitted by law, statute, rule, regulation, contract or
otherwise,
NOT TO EXCEED IN PENALTY THE SCSI OF TEN MILLION DOLLARS ($10,000,000) EACH
and the execution of all such instrument(s)in pursuance of these presents,shall be as binding upon said St.Paul Fire and Marine Insurance Company,as fully and
amply,to all intents and purposes,as if the same had been duly executed and acknowledged by its regularly elected officers at its principal office.
This Power of Attorney is executed,and may be certified to and may be revoked,pursuant to and by authority of Article V,-Section 6(C),of the By-Laws adopted by
the Shareholders of ST.PAUL FIRE AND MARINE INSURANCE COMPANY at meeting called and held on the 28th day of April, 1978,of which the following
is a true transcript of said Section 6(C):
"The President or any Vice President,Assistant Vice President,Secretary or Service Center General Manager shall have power and authority
(1) To appoint Attorneys-in-fact,and to authorize them to execute on behalf of the Company,and attach the Seal of the Company thereto,bonds and
undertakings,recognizances,contracts of indemnity and other writings obligatory in the nature thereof.and
(2) To appoint special Attorneys-in-fact,who are hereby authorized to certify to copies of any power-of-attorney issued in pursuance of this section
and/or any of the By-Laws of the Company,and
(3) To remove,at any time,any such Attorney-in-fact or Special Attorney-in-fact and revoke the authority given him."
Further,this Power of Attorney is signedand sealed by facsimile pursuant to resolution of the Board of Directors of said Company adopted at a meeting duly called and
held on the 5th day of May,1959,of which the following is a true excerpt:
"Now therefore the signatures of such officers and the seal of the Company may be affixed to any such power of attorney or any certificate relating thereto by
facsimile,and any such power of attorney or certificate hearing such facsimile signatures or facsimile seal shall be valid and binding upon the Company and
any such power so executed and certified by facsimile signatures and facsimile seal shall be valid and binding upon the Company in the future with respect to
any bond or undertaking to which it is attached"
�wuuanyq IN TESTIMONY WHEREOF,St.Paul Fire and Marine Insurance Company has caused this instrument to be signed and its corporate
mg
��0aE 4 seal to be affixed by its authorized officer,this 30th day of November,A.D. 1990.
N�v :%I ST.PAUL FIRE AND MARINE INSURANCE COMPANY
s2d's j�e o�crf' STATE OF NEW JERSEY ss
n�ntitimm, County of Sommerset MICHAEL B.KEEGAN,Secretary
1
On this 7th day of Nop.p-mhpy� . 19 9 before me came she individual who executed the preceding instrument, to me
m�
personally known,and,being by me duly swo saicTht at he/she is the therein r&scribed and authorized officer of St.Paul Fire and Marine Insurance Company;
that the seal affixed to said instrument is the Corporate Seal of said Company: that the said Corporate Seal and his/her signature were duly affixed by order of the
Board of Directors of said Company.
IN TESTIMONY WHEREOF,I have hereunto set my hand and affixed my Official Seal,at the township of Bedminster,New Jersey,the
Q�SUE, day and year first above written. i�� _
tow
£ ,J
s Mrc
e
°.NtM
LINDA SMEFHERS,Notary Public,Middlesex,NJ
My Commission Expires December l6, 1996
CERTIFICATION
I,the undersigned officer of St.Paul Fire and Marine Insurance Company,do hereby certify that I have compared the foregoing copy of the Power of Attorney and
affidavit,and the copy of the Section of the By-Laws of said Company as set forth in said Power of Attorney,with the ORIGINALS ON FILE IN THE HOME
OFFICE OF SAID COMPANY,and that the same are correct transcripts thereof,and of the whole of the said originals,and that the said Power of Attorney has not
been revoked and is now in full force and effect.
'y K Va4
Tr IN TESTIMONY WHEREOF,I have hereunto set my hand this ----Ks-
/si
5 r�r- MAR 2 y 1996
;.or`ANce day of , 19 ROY P.SEYMOUR,Asst.Secretary
ANcsi Only a certified copy of Power of Attorney bearing the Cenificate of Authority No.printed in red on the upper right corner is binding.Photocopies,carbon copies or
other reproductions of this document are invalid and not binding upon the Company.
ANY INSTRUMENT ISSUED IN EXCESS OF THE PENALTY AMOUNT STATED ABOVE IS TOTALLY VOID AND WITHOUT ANY VALIDITY.
29550 Rev,5-92 Printed in U.S.A.
rn1P1 Ni' INSIPvII PORTL,UPTON UOWSVIlIF
r IME'R COUNTY LOVEILAND
I. H InI aD , A_iTTE PAHACHOTF
i9rP. JYr,MONT SUPERIOR
SCRIPPS HOWARD
MS CABLE COMPANY
February 14, 1996
Ms. Cyndy Giauque
Assistant Weld County Attorney
County of Weld, Colorado
PO Box 758
Greeley, CO 80632
Dear Ms. Giauque,
Enclosed you will find our formal application to build and operate a cable
television system in Weld County, Colorado.
In assembling information for this application, we have been guided by your
Ordinance for a Cable Television Franchise. Should additional information
be required, we will be happy to furnish it immediately upon request.
Scripps Howard Cable Company is a wholly subsidiary of The E.W. Scripps
Company, which owns and operates cable television systems in 10 states with
over 800,000 subscribers. Quality, reliability, responsiveness and state of the
art technology are the key points in our proposal to serve Weld County -
quality in the materials we use to construct the system, and quality in the
construction practices that we require of our contractors. We control quality
and inspect all contractors work to insure that our standards and the standards
of the franchise agreement are met.
We also offer quality in the choice of programming and give subscribers the
opportunity to make choices that best suit their needs and lifestyles.
With this proposal for cable television service, we are offering Weld County
an unparalleled opportunity to provide members of its community with a
cable television system that offers a choice of excellent programming,
reliability in the technology to provide the service, and a company that is
responsible to its subscribers.
The company is prepared to meet with you and your staff to answer any
questions on any provision of our proposal. We look forward to serving
Weld County and its citizens.
Sincerely,
Greg Griffin
General Manager
WELD COUNTY, COLORADO
CABLE TELEVISION FRANCHISE APPLICATION
February 14, 1996
Scripps Howard Cable Company
Corporate Office
Scripps Howard
312 Walnut St. 28th Floor
PO Box 5380
Cincinnati, OH 45201
(800) 888-3000
Mr. F. Steven Crawford
Sr. Vice President / Cable
Regional Office
Scripps Howard Cable Company
434 Kimbark St.
Longmont, CO 80501
(303) 776-2108 x211
FAX (303) 678-5302
Mr. Greggory E. Griffin
General Manager
Respectfully Submitted for Your Consideration,
Greg Griffin, General Manager
GENERAL DESCRIPTION OF PROPOSED OPERATION
Scripps Howard Cable Company operates a regional office in downtown
Longmont, Colorado. This facility serves as the administrative headquarters,
regional headend, regional call/customer service center, and dispatch hub.
Normal business hours are from Monday through Friday - 8:00am to 6:00pm
and Saturday - 9:00am to 1:00pm. Scripps also has local offices open in
Loveland, Ft. Lupton, and Louisville.
Scripps employs approximately 70 people with a local management staff
consisting of a General Manager, Operations Manager, Controller, Marketing
Manager, Advertising & Production Manager and a Human Resources
Director. The General Manager reports directly to the Senior Vice President
/ Cable at the corporate office in Cincinnati, Ohio.
Scripps Howard Cable Company is committed to public access and locally
originated programming. This is exemplified by our local studios in
Longmont, Loveland and Louisville. Scripps also operates two mobile
production vehicles. We have a long history of local production and we
cablecast public meetings and community events on a regular basis in all of
the systems we serve. A copy of the rules of operation for public access are
attached for review. The system is designed at 550MHz and incorporates
fiber optic technology. The system is addressable and two-way capable. We
offer a broad mix of services including digital music services and pay per
view. A copy of the current programming lineup is enclosed.
PROPOSED RATES AND SERVICES
Please see the attached rate card titled "Longmont" for the proposed rates and
services within Weld County. These rates are scheduled to change slightly on
April 1, 1996 based on the annual adjustments allowed for under the FCC
guidelines imposed as part of the 1992 Cable Act.
Longmont Channel Lineup
2 KWGN
3 Local Access 29 AMC 4 KCNC 30
5 Preview Guide 31 A&E
6 KRMA 32 Lifetime
7 KMGH 33 Family
8 Sneak Prevue 34 Nickelodeon
9 KUSA 35 Discovery
10 KDVR 36 Nostalgia/Bravo
*11 Pay-Per-View *38 HBO 7 EY
KBDI
*13 Pay-Per-View .39 SHOWT/ME
15 Local Access *41 C/NEMAX MEU
16 Local Access *42 PLAYBOY
17 KCEC ENCORE
18 KUBD 44 Travel
19 C-SPAN I 45 MTV
20 KTVD 46 VH-1
21 WGN 47 TNN
22 TBS 48 CMTV
23 QVC 49 Weather
.� 24 El 50 Headline
25 PSN News
26 ESPN 51 CNBC
27 TNT 52 VISN/ACTS
28 CNN 53 TV FOOD-NET
54 ESPN 2
Addressable Converter Required
PUBLIC, EDUCATIONAL AND GOVERNMENT ACCESS
Scripps Howard is committed to providing production facilities, automated
cablecasting systems and personnel for taping and training. We have a large
LO/PEG studio facility at the St. Vrain Valley School District's Career
Development Center and we have just recently entered an agreement to locate
another studio at a City facility. We have been cablecasting (live and replays)
the Longmont City Council meetings on a regular basis for several years
utilizing an automated system. We also provide the manpower to tape the
local school board meetings. We have an on-going PEG training program
where we instruct citizens, city and school staff, and public officials on how
to use the production equipment and facilities. Scripps Howard also owns
two mobile production vehicles for off-premise production. Scripps currently
provides one LO/public access channel, one government access channel and
two educational access channels. All of the schools and most of the
municipal buildings have been wired for cable television service. These
services and resources will be made available to our subscribers in Weld
County.
Amended per minutes of February 10,1993
Amended per minutes of March 10,1993
Amended per minutes ofJanuary 12,1994
Amended per minutes ofJanuary 11,1995
Longmont Cable Trust
Public Access Policies & Procedures
January 11 , 1995
Longmont Cable Trust (LCT) has established a Public Access Program.
The goal for this program is to encourage and enable Access Members to
produce television programs that reflect their concerns, opinions and
experiences. A Public Access Coordinator (PAC) provides guidance to interested
citizens who wish to produce television programming to be cablecast on
Scripps Howard Cable Company's Channel 3. This handbook outlines policies
and procedures currently in effect for the program.
MEMBERSHIP Any person who resides within the boundaries of the St.
Vrain Valley School District may apply for membership.
To become a member, you must pay the application fee, complete an
LCT Membership Application and Agreement, and become familiar with these
policies and procedures. Only current members may submit programs for
cablecast. Membership may be revoked
--if a member frequently uses or has used LCT equipment or facilities
without producing completed programs,
--if a member uses or has used LCT equipment or facilities with the intent
of producing a program of a commercial nature (see "Commercial Distribution),
or
--if a member fails to follow policies and procedures to the detriment of
the Longmont Cable Trust.
MEMBERSHIP FEES Prospective members are invited to attend an
Orientation class without charge. After that class, a one-time $25 fee must be
paid to become a member of the Public Access Program. Four scholarships each
year are available for individuals who are unable to pay the fee. Scholarship
application is made to the General Manager with a letter explaining the
individual's circumstances.
Each year in January, members will be assessed a $10 yearly fee. This fee
will be waived if the member has participated in the production of any program
shown on Channel 3 during the preceding calendar year.
MEMBERSHIP DATA LCT staff may release members' names and phone
numbers for the purpose of organizing crews, planning programs or on
request.
SERVICE POLICY Portable cameras and recorders, editing suites and
studio equipment are available on a first-come, first-served, non-discriminatory
basis.
TRAINING To help members achieve their program goals, LCT staff
members offer a variety of classes in equipment operation at no charge. These
classes include basic orientation, field production, studio production, and
editing. Other classes may be offered at nominal cost. Contact the Public
Access Coordinator to register. Orientation is required of all members involved
in Access program production.
OWNERSHIP OF CONTENT Access Members produce their programs and
determine the content. Ownership of the program rests with the Member. Only
commercial distribution rights to the program are limited. In exchange for free
use of equipment and facilities, Access Members must sign a Program
Agreement, allowing LCT to cablecast the resulting program and to use
segments of programs for recruiting, public information and to develop or
promote the Public Access Program.
OWNERSHIP OF TAPE Longmont Cable Trust supplies videotape for
productions and thereby owns the videotape, cassette and all packaging.
Properly labeled "Master" tapes will not be erased or reused. Raw footage or
interim masters may be erased and reused 30 days after program is
completed. If no program is completed from raw tapes or interim masters
within 90 days of check-out, these tapes may be erased and reused. Access
Members may request exemption by stating their reasons in writing to the
Public Access Coordinator. Exemption will be based on an active plan to
complete the program. All tapes are stored at Longmont Cable Trust facilities
with the understanding that LCT assumes no liability for the recording.
RESPONSIBILITY Access Producers assume all responsibility for their
programs, regarding current local, state and federal laws restricting libel,
obscenity, copyright infringement, lottery information, invasion of privacy and
political advertisements. LCT will endeavor to make Access Members aware of
such laws, but assumes no responsibility for program content.
To assure that viewers will know who is responsible for an Access
program, LCT requires programs contain in their closing credits "Presented by"
or "Produced by" followed by the full name of the Access member who is
submitting the program for cablecast. The phrase "Produced through the Public
Access Facilities of the Longmont Cable Trust" shall also be included in the
credits. Both these phrases must be legible by the average viewer.
COMMERCIAL DISTRIBUTION Access Members may not use LCT Access
facilities and equipment to produce programs of a commercial nature.
"Commercial" refers to promoting or advertising products or business firms in
exchange for value of any kind, or shooting or editing footage or producing a
program for fees, goods or services. Access Members who wish to produce
3
commercial programs may work with the General Manager of Longmont Cable
Trust to contract for production services at standard published rates.
Occasionally, a program produced through LCT Access facilities may develop a
commercial value. In this case, the Access Member/Producer must report all
income derived from the production to the General Manager of Longmont
Cable Trust, in writing, within ten days of compensation. The Access
Member/Producer will be liable for current card rates for use of LCT equipment
used in the production.
DUPLICATION Access Members may duplicate for their own use any
completed program for which they are listed as Producer. LCT facilities may be
used for such duplication, though the Member supplies the tape and performs
the duplication.
EQUIPMENT RESERVATIONS To reserve equipment, editing suites
and/or studio facilities, Access Members must fill out and return an equipment
reservation form and submit it to the Public Access Coordinator. Reservations
are made for specific programs with Program Proposals on file.
EQUIPMENT LIABILITY The Equipment Reservation form requires the
signature of the Access Member who assumes liability for any claims, losses,
costs and expenses arising out of damages or injuries to persons or property
resulting from the use of the equipment. Additionally, the Access Member's
signature acknowledges his or her full responsibility for damage to or loss or
theft of equipment during the check-out period. Should damage, loss or theft
occur, the responsible Access Member must compensate LCT for repair or
replacement of the equipment. Membership privileges are suspended until
such repair or replacement occurs.
To reduce the risk of equipment damage, LCT prohibits food, drink and
smoking in studios, control rooms, edit suites or near field production
equipment. Additionally, St. Vrain School District rules prohibit food or drink
in hallways and prohibit smoking inside the Career Development Center
building.
TECHNICAL STANDARDS Programs should be submitted ready for
cablecasting. These tapes should meet the following minimum requirements.
--Tape format should be 3/4" U-matic videocassette (LCT will supply this
tape on request).
--Tape should contain at least 60 seconds of black prior to program start
and following program end.
--Tape cassette and cassette box must be labeled with the following
information:
a) Program title
b) Series title and program number in series if applicable
c) Program length
d) Producer's full name
e) Production date
f) The words "MASTER" or "DUB FROM MASTER"
f) Notation of adult subject matter if applicable
CABLECASTING Public Access cablecast time is available free of charge
to Access Members who have produced completed programs that meet all the
requirements of these policies and procedures.
GRANTS Longmont Cable Trust provides funds for productions of
Access Members. Grant applications and procedures are available on request.
5
Membership Application and Agreement
Day Evening
Name Phone Phone
Address City St Zip
Are you representing an organizaton? If so, please list the name and phone
number:
I have read the Longmont Cable Trust Policies and Procedures dated
January 11 , 1995. I understand the rules by which I may participate in
producing public access programs and remain a member in good standing.
I hereby agree to:
comply with these policies and procedures,
undertake equipment or production training,
accept the responsibility for any equipment I use, and
participate in the production of programs for cablecast by Longmont
Cable Trust.
Name
Signature Date
To complete your membership application process, please send this signed
Application and Agreement and a check for S25 to Longmont Cable Trust, Public
Access, 1200 South Sunset, Longmont, CO 80501.
ORGANIZATIONAL STRUCTURE
Scripps Howard Cable Company is a Colorado Corporation licensed to do
business in the state of Colorado.
Scripps Howard Cable Company is a wholly owned subsidiary of the E.W.
Scripps Company. The E.W. Scripps Company is a publicly held corporation
traded on the New York Stock Exchange (SSP). Scripps Howard is a
diversified media company with interests in publishing, broadcasting,
entertainment and cable television.
A copy of the most recent Annual Reports and Security and Exchange
Commission 10 - K and 10 - Q reports are also enclosed.
Corporate Officers
Mr. Lawrence A. Leser
Chairman of the Board and Chief Executive Officer
Scripps Howard
PO Box 5380
Cincinnati, OH 45201
Mr. William R. Burleigh
President and Chief Operating Officer
Scripps Howard
PO Box 5380
Cincinnati, OH 45201
AUDITED FINANCIAL STATEMENTS
Copies of the annual reports, 10-K's, and 10-Q's are provided for both The
E.W. Scripps Company and Comcast Corporation
SCRIPPS HOWARD / COMCAST MERGER
On October 29, 1995, Scripps Howard announced that it had entered into an
agreement to merge its cable holdings with Comcast Corporation.
At this time, it is expected that the transaction will occur in mid-to-late 1996.
The transaction will involve Scripps Howard, Inc. and The E.W. Scripps
Company, the corporate parents of Scripps Howard Cable Company. The
consummation of the merger will be subject to customary conditions to
closing and receipt of certain regulatory approvals. Once all conditions are
met and regulatory approvals have been secured, control of the cable
companies controlled by SHE and EWS will transfer to Comcast Corporation,
or an entity affiliated with or controlled by Comcast. This transaction will
not involve a change in the franchise grantee itself. Once completed, our
new relationship with Comcast will present many positive benefits for cable
customers in your area. Comcast is one of the largest cable operators in the
country and brings a wealth of knowledge, experience and resources.
Due to the timing of this merger, and our desire to provide timely service to
residents in Weld County, we are proposing that the franchise awarded to
Scripps Howard contain Weld County's consent to the merger with Comcast.
The terms of this arrangement are embodied within the caption "Transfer Of
Ownership" in the franchise document.
Information with respect to Comcast's financial, legal and technical
qualifications are enclosed within this application. A copy of the merger
document is also enclosed for your review.
10/29/95 17:ZZ:0Z PLEASE DELIVER T8:-> 1 303 678 5382 GREG GRIFFIN Page 881
To: Manually dialed From: 1A-29-95 7:17pm p. 1 of 7
PO.EOX5380 GOMORATECOMMUMCATIONB
CWCINNaLOWo45201
312 WALNUT NTRCET.25TN FLOOR
CWCW1NATI,OlUO453o2
523977.3826
re THE E.W. SCRIPPS NEWS RELEASE
LI COMPANY
For immediate release (NYSE:SSP)
Oct. 29, 1995
CINCINNATI, Ohio—The E.W. Scripps Company has reached a
definitive agreement that will result in its cable television systems being
owned by Comcast Corporation through a tax-free transaction valued at
$1.575 billion,or$19.68 per Scripps share.
The remaining Scripps businesses—the newspaper, broadcast television
and entertainment divisions—will be the new E.W. Scripps Company to
be traded under the same NYSE symbol, "SSP."
Following the transaction, all Scripps shareholders will receive one share
in the new Scripps company and shares in Comcast in exchange for each
share of Scripps owned prior to the transaction.The actual number of
Comcast shares received by Scripps shareholders will depend upon the
market price of Comcast shares.
The total value in Comcast stock that Scripps shareholders will receive Is
protected as long as Comcast shares trade within a range of$17.06 to
$23.09 per share during a specified period shortly before closing. If
Comcast shares trade below$17.06 during that period, Scripps has the
right to terminate the deal unless Comcast agrees to make up the
difference in value with additional shares.
"Our presence in the cable industry has been good for the company and
its shareholders. We've built a tremendous asset over the past 10 years,"
said Lawrence A. Leser, chairman and chief executive officer.
"The industry is changing, however, and consolidation continues at a
furious pace, which gives us this opportunity to maximize the value of our
systems and deliver that value directly to our shareholders," Leser said.
The transaction is conditioned upon, among other things, approval by
Comcast shareholders and the holders of Scripps' Common Voting Stock.
The Edward W. Scripps Trust, owner of 80 percent of those Scripps
shares, has agreed to vote in favor of the transaction. Comcast's
controlling shareholder also has agreed to vote in favor.
(Moro...)
00/30'd ZEBU BS:LT 6Z-OT'S66T O96T'6ZL'9TZ 01 21I/WN03 da1O3 H S: 40lad
18/29/95 17:22:38 PLEASE DELIVER TO:-> 1 383 678 5302 GREG GRIFFIN Page 08Z
To: Z1836021 5414 046 From: 10-29-95 7:18pm p. 2 of 7
(The E.W.Scripps Company,page 2 of 4)
ThsScrivps CableMlyisiorn
In 10 years, Scripps grew to be the nation's 16th largest cable system
operator.Through acquisition and internal growth, subscribers moved up
from 56,000 in 1985 to more than 792,500 at present.
The Company's single largest system, in Sacramento,was built from
scratch and completed in 1988.The system now serves 231,000
subscribers in the California capital.
In the first nine months of 1995,the Scripps cable division had revenue of
$207.9 million, up 10 percent year-over-year; operating cash flow
(operating income before depreciation and amortization) of$86.1 million,
up 20 percent; and operating income of$45.1 million, up 64 percent.
For the 12 months ended Sept. 30, 1995, the cable division had revenues
of$273.7 million, operating income of$57.5 million, and operating cash
flow of $111.6 million.
The Scripps cable division includes the following properties (figures
as of Sept. 30,1995):
System Basic
cluster subscribers
Sacramento 231,300
Chattanooga 111,900
Knoxville 106,400
Atlanta 74,100
West Virginia 55,000
Rome,Ga. 49,500
Lake Cty.,Ha. 49,300
Western Kentucky 43,000
Colorado 38,000
*Mid-Tennessee 34,000
Total 792,500
"On Oct.26,the Company signed an agreement to purchase,for$623 million,
the Mid-Tennessee CATV,L.P.systems,which are adjacent to the Company's
clusters in Knoxville and Chattanooga.The transaction is expected to dose by
year end 1995 and be included in the Comcast merger.
The New Scripps:
Newspaper,Broadcast Television,Entertainment
"This is just one step, albeit a significant one, in the ongoing development
of Scripps, which has been a leader in media innovation for nearly 120
years,"said Leser, Scripps chairman.
(More...)
80/£0'd Z£B# 00:8T 6Z-OT'S661 096T'6ZL'STZ 01 NI/WW00 dN00 H S: W01d
10/Z9/95 17:23:09 PLEASE DELIVER T0:-> 1 303 670 S3B2 GREG GRIFFIN Page 603
To: 21836021 5414 046 From: 10-29-95 7:19pm p. 3 of 7
(The E.W,Scripps Company,page 3 of 4)
"The new Scripps, with virtually no debt and strong cash flow, will focus on
the development and ownership of information and entertainment content.
Our newspaper, television and entertainment franchises will provide a
diverse revenue stream and an outstanding platform from which we can
bring new and valuable enterprises to the media marketplace,"Leser said.
The new company will operate through three divisions:
Newspapers: 16 geographically diverse local franchises with total
circulation of 1.3 million daily and 1.4 million on Sunday. Among the
largest Scripps papers are the Rocky Mountain News in Denver;The
Commercial Appeal in Memphis;The News-Sentinel in Knoxville;the
Ventura County Newspapers in Ventura, Calif., and The Daily News in
Naples, Ha.
Broadcast Television: Nine network affiliates among the 60 largest
markets, together reaching 10 percent of the total U.S. audience. The
Company owns the ABC affiliates in Detroit, Cleveland,Tampa, Phoenix
and Baltimore;the NBC affiliates in Kansas City,West Palm Beach and
Tulsa; and the CBS affiliate in Cincinnati, which will change its affiliation to
ABC in 1996.
Entertainment; An emerging division created in 1994 to focus on video
programming, licensing and syndication.The division includes:
• United Media, a worldwide syndicator and licensor of comic strips,
comic characters and prestigious brands. Its best-known properties
include the"Peanuts" and "Dilbert"comic strips.Through recent
agreements, United Media has become the worldwide licensing agent
for both National
United Media Websites among the 10ic and the Public Broadcasting Service
The0 most popular on
the Internet.
• Home & Garden Television, a 24-hour television network launched at
the end of 1994. HGTV's growing audience includes cable systems in
134 markets plus DIRECTVe nationwide. More than 200 national
advertisers support 54 programs, including an all-original primetime
lineup. HGTV also is expanding its marketing reach through a recently
established call center, a growing database, an advertiser-supported
monthly programming guide, a library of videocassettes for sale to
consumers, and a quarterly interactive"magazine" on CD-ROM with a
built-in Internet access feature.
(More...)
80/VO'd Z£8q 00:8T 6Z-01'S66T 096T'6ZL'STZ 01 aI/WW00 dd03 H S: I+ca.
10/Z9/95 17:Z3:5Z PLEASE DELIVER T0:-> 1 303 678 5302 GREG GRIFFIN Page 004
To: 21836021 5414 046 From: 10-29-95 7:19pm e. 4 of 7
(The E.W.Scripps Company,page 4 of 4)
• Cinetel Productions, a major producer of programming for cable.
Cinetel currently is producing seven series plus specials for six
networks (The Nashville Network, Arts & Entertainment, Learning
Channel, History Channel, Discovery Channel and HOW).
• Scripps Howard Productions, a creator of programming primarily for
the broadcast networks, which currently has more than 50 hours of
programming in various stages of development and production. Its first
project, "Tycoon," a primetime NBC News profile of Microsoft founder
Bill Gates, aired in May. Its second production, "Shadow of a Doubt," is
a two-hour NBC telefilm starring Brian Dennehy, scheduled to air
Dec. 3. Scripps Howard Productions is now filming its first ABC movie,
"Breach of Faith," starring Kate Jackson and Tracey Gold and is
readying an ABC primetime special, a CBS miniseries and a two-hour
NBC series pilot for anticipated production in the first quarter of 1996.
Pro forma operating results for the new Scripps, in the 12 months ended
Sept. 30, 1995,were as follows:
r si T,cleeision Entertainment "Consolldat"d
($in millions)
Revenues $629.3 $297.4 $86.1 $1,012.8
Operating cash flow $153.6 $114.7 $(11.6) $241.1
Operating income $117.5 $89.6 $(14.2) $176.5
("Consolidated operating cash flow and operating income are net of corporate expenses of
$15.6 million and$16.4 million,respectively.)
The new E.W. Scripps Company intends to maintain its current quarterly
dividend of 13 cents per share.
Merrill Lynch &Co. acted as financial advisor to The E.W. Scripps
Company in this transaction.
aaa
Contact Rich Boohne, The E.W.Scripps Company,5 13-9 77-38 2 6 le)or 606-781-4632(h)
8O/SO'd Z£8ri Z0:8T 60-0T'S66T 036T'6Z6'STZ 01 dI/WW00 d6O7 H S: WOLfd
THE E .W. SCRIPPS COMPANY / COMCAST CORPORATION MERGER
STEP 1 (Before Merger)
PUBLIC SHAREHOLDERS
I
THE E .W. SCRIPPS COMPANY
I
I
PUBLISHING BROADCASTING ENTERTAINMENT I CABLE I
I 1 I I I
SCRIPPS HOWARD CABLE COMPANY
I
I
I I I
1 - 1 1 1
SCRIPPS HOWARD CABLE I L-R CABLE I I EWS CABLE
COMPANY OF SACRAMENTO
I I I
II 1I
I SACRAMENTO CABLE I I TELESCRIPPS CABLE I
I TELEVISION I I COMPANY
I
THE E .W. SCRIPPS COMPANY / COMCAST CORPORATION MERGER
STEP 1 (MID-TENNESSEE SYSTEMS) (Before Merger)
PUBLIC SHAREHOLDERSI
I
THE E .W. SCRIPPS COMPANY I
I 1 l
r-- - 1 1 `�
IPUBLISHING I BROADCASTING IIENTERTAINMENT I I CABLE I
I 1 1
' SCRIPPS HOWARD CABLE COMPANY'
I
I to be assigned tol
'MID-TENNESSEE (CABLE FRANCHISES) J
II
ISCRIPPS HOWARD CABLE L R CABLE I EWS CABLLE1
COMPANY OF SACRAMENTO
I
I I I
I I
I
I SACRAMENTO CABLE I TELESCRIPPS CABLE
TELEVISION I I I COMPANY
STEP 2 (Spin off before Merger)
IPUBLIC SHAREHOLDERSI
THE E .W. SCRIPPS COMPANY
CABLE 1
1
PUBLIC SHAREHOLDERS* SCRIPPS HOWARD CABLE COMPANY'
1
1 I 1
I I I I I
I SCRIPPS HOWARD CABLE I I L-R CABLE I I EWS CABLE
ICOMPANY OF SACRAMENTO I I I I
I I I
1 1
I SACRAMENTO CABLE I I TELESCRIPPS CABLE I
I TELEVISION I COMPANY I
J
I
I I
I NEW SCRIPPS I
I
IPUBLISHINGI 'BROADCASTING' ENTERTAINMENT '
* Prior to the merger, The E.W. Scripps Company will spin off New
Scripps to The E .W. Scripps Company shareholders .
STEP 3 (Merger)
' PUBLIC SHAREHOLDERS
I � I
ICOMCAST CORPORATION'
i I
ISCRIPPS HOWARD CABLE COMPANY
II
(
I SCRIPPS HOWARD CABLE I L-R CABLE I I EWS CABLE
COMPANY OF SACRAMENTO I I I
I
I
SACRAMENTO CABLE TELESCRIPPS CABLE
TELEVISION COMPANY
EXHIBIT A-1
,`a
CONFORMED COPY
•
AGREEMENT AND PLAN OF MERGER
By and Among
THE E. W. SCRIPPS COMPANY,
SCRIPPS HOWARD, INC.,
and
COMCAST CORPORATION
October 28, 1995
TABLE OF CONTENTS
Page
ARTICLE I
THE MERGER
1.01 The Merger 1
1.02 Effect of the Merger on Capital Stock; Adjustments 2
1.03 Effective Time of the Merger 4
1.04 Exchange of Certificates 5
1.05 Distribution With Respect to Shares Represented by Unexchanged
Certificates 6
1.06 No Fractional Shares 6
1.07 No Liability 7
1.08 Lost Certificates 7
ARTICLE II
CERTAIN PRE-MERGER TRANSACTIONS
2.01 Internal Spinoffs; Amendments to Charters 7
2.02 Contribution of Assets to and Assumption of Liabilities by SHI 8
ARTICLE III
REPRESENTATIONS AND WARRANTIF-S REGARDING THE
COMPANY AND SHI
3.01 Organization and Authority 9
3.02 No Breach 10
3.03 Consents and Approvals 10
3.04 Approvals of the Boards; Fairness Opinion; Vote Required i 1
3.05 Capitalization 11
3.06 SEC Reports 12
3.07 Financial Statements 12
3.08 Absence of Certain Changes 12
3.09 Absence of Undisclosed Liabilities 13
3.10 Compliance With Law 13
3.11 Taxes 13
3.12 Litigation 14
3.13 Brokers and Finders 14
3.14 Employee Benefit Plan Matters 14
3.15 Company Contracts 14
-i-
Page
3.16 Environmental Matters 14
3.17 Full Disclosure - 15
ARTICLE IV .
REPRESENTATIONS AND WARRANTIES REGARDING CABLE
4.01 Organization and Authority 15
4.02 No Breach 15
4.03 Capitalization 16
4.04 Financial Statements 16
4.05 Absence of Certain Changes 16
4.06 Absence of Undisclosed Liabilities. 17
4.07 Compliance With Law 17
4.08 Franchises and Material Agreements 17
4.09 Title to Properties; Encumbrances 21
4.10 Litigation 21
4.11 Employee Benefit Plan Matters 21
4.12 Labor Matters 24
4.13 Mid-Tennessee Acquisition 25
4.14 Environmental Matters 25
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF ACQUIROR
5.01 Organization and Authority 25
5.02 No Breach 26
5.03 Consents and Approvals 26
5.04 Approval of the Board 27
5.05 Capitalization 27
5.06 SEC Reports 27
5.07 Financial Statements 28
5.08 Absence of Certain Changes 28
5.09 Brokers and Finders 28
5.10 Full Disclosure 28
5.11 Certain Tax Matters. 28
ARTICLE VI
OTHER AGREEMENTS
6.01 No Solicitation 29
6.02 Conduct of Business of the Company 30
6.03 Conduct of Business of Cable 31
Page
6.04 Conduct of Business of Acquiror 32
6.05 Access to Information 32
6.06 SEC Filings 33
6.07 Reasonable Best Efforts 36
6.08 Public Announcements 36
6.09 Board Recommendations 36
6.10 Tar Matters 37
6.11 Notification 43
6.12 Employee Benefits 43
6.13 Employee Stock Options 44
6.14 Meetings of Stockholders 45
6.15 Regulatory and Other Authorizations 45
6.16 Further Assurances 46
6.17 Internal Revenue Service Ruling 47
6.18 Records Retention 47
6.19 Stock Exchange Listing 47
6.20 Company Names 47
6.21 Other Agreements 48
6.22 Form 8-K; Provision of Financial Statements; Schedule of Contracts 48
6.23 Determination of Estimated Amounts 48
6.24 Capital Expenditures 49
6.25 Excess Cash 50
6.26 Acquisition of Mid-Tennessee Business; Reduction of Aggregate
Consideration; Indemnity 50
6.27 Indemnity Relating to Certain Litigation 50
6.28 River City Interest 51
6.29 Proposed Hyperion Joint Venture 51
6.30 Cancellation of Intercompany Arrangements. 51
ARTICLE VII
CLOSING AND CLOSING DATE; CONDITIONS TO CLOSING
7.01 Closing and Closing Date 52
7.02 Conditions to the Obligations of the Company, SHI and Acquiror 52
7.03 Conditions to the Obligations of the Company and SHI 53
7.04 Conditions to Obligations of Acquiror 54
7.05 Exception to Conditions to Obligations to the Company and SHI. 55
7.06 Exception to Conditions to Obligations of Acquirer 55
-iii-
• Page
'ARTICLE VIII
TERMINATION
8.01 Termination 55
8.02 Effect of Termination 56
8.03 Fees and Expenses 57
ARTICLE IX
MISCELLANEOUS
9.01 Survival of Representations and Warranties 57
9.02 Entire Agreement 58
' 9.03 Notices 58
9.04 Governing Law 59
9.05 Descriptive Headings 59
9.06 Parties in Interest 59
9.07 Counterparts 59
9.08 Expenses 59
9.09 Personal Liability 59
9.10 Binding Effect; Assignment 59
9.11 Amendment 60
9.12 Extension; Waiver 60
9.13 Legal Fees; Costs 60
ARTICLE X
DEFINITIONS
EXHIBITS AND SCHEDULES
Exhibit A Form of Amendment to Certificate of Incorporation of the Company
Exhibit B Form of Restated Articles of Incorporation of SHI
Exhibit C Form of Contribution and Assumption Agreement
Exhibit D Form of Noncompetition Agreement
Exhibit E Form of Voting Agreement
Exhibit F Form of Registration Rights Agreement
Exhibit G Form of Board Representation Agreement
Schedule 3.09 Liabilities of the Company
Schedule 3.11(b) Material Claims and Investigations for Taxes of Company
Schedule 3.15 Company Contracts
Schedule 4.07(a)(i) Material Licenses and Authorizations held by Cable
-iv-
Page
Schedule 4.08(a)(i) Material Franchises of Cable
Schedule 4.08(b) Rights of Others to Acquire Assets of Cable
Schedule 4.08(f) Signals Carried by Cable Without Retransmission
Consent Agreements
Schedule 4.08(g) FCC Rate Complaints and Letters of Inquiry
Schedule 4.11(a) Cable Employee Plans and Cable Benefit Arrangements
Schedule 4.11(d) Welfare Benefit Plans Covering Cable Retirees
Schedule 4.12(a) Labor or Collective Bargaining Agreements of Cable
Schedule 4.12(b) Employees of Cable Represented by Labor Organizations:
Representation or Certification Proceedings
Schedule 5.05(a) Existing Options, Warrants, Etc. of Acquiror
Schedule 6.04 Permitted Amendments
Schedule 6.22(c) Cable Contracts
Schedule 6.27 Certain Litigation of Cable
-v-
AGREEMENT AND PLAN OF MERGER
This Agreement and Plan of Merger (this "Agreement"), dated as of October 28, 1995.
is made by and among The E.W. Scripps Company, a Delaware corporation (the "Company"),
Scripps Howard, Inc., an Ohio corporation and wholly owned subsidiary of the Company
("SHI"), and Comcast Corporation, a Pennsylvania corporation ("Acquiror").
RECITALS
WHEREAS, the Boards of Directors of the Company, Sill and Acquiror each have
determined that it is in the best interests of their respective stockholders to enter into this
Agreement which, among other things, provides for (i) the Company to contribute to SHI
substantially all of the assets of the Company (other than those assets described in the
Contribution Agreement as being retained by the Company) and to distribute to its stockholders
the outstanding shares of capital stock of Sill so that the stockholders of the Company will
become the stockholders of SHI: and (ii) the Company (immediately following such contribution
and distribution) to merge with and into Acquiror, as a result of which the stockholders of the
Company immediately prior to such merger will become stockholders of Acquiror: and
WHEREAS, for federal income tax purposes, it is intended that such transactions will
qualify as a tax-free reorganization within the meaning of Sections 368(a)(1)(D), 355, and
368(a)(1)(A) of the Internal Revenue Code.
NOW, THEREFORE, in consideration of the foregoing and the representations.
warranties and agreements set forth below, the parties hereto agree as follows:
ARTICLE I
THE MERGER
1.01 The Merger. Subject to the terms and conditions hereof, at the Effective Time:
(i) the Company shall be merged with and into Acquiror (the "Merger") and the separate
existence of the Company shall cease and Acquiror shall continue as the surviving corporation
in the Merger (the "Surviving Corporation"); (ii) the Articles of Incorporation of Acquiror, as
in effect immediately prior to the Effective Time, shall continue as the Articles of Incorporation
of the Surviving Corporation; (iii) the Bylaws of Acquiror, as in effect immediately prior to the
Effective Time, shall continue as the Bylaws of the Surviving Corporation; (iv) the directors of
Acquiror shall be the directors of the Surviving Corporation; and (v) the officers of Acquiror
immediately prior to the Effective Time shall continue as the officers of the Surviving
Corporation. From and after the Effective Time, the Merger will have all the effects provided
by applicable law.
1.02 Effect of the Merger on Capital Stock; Adjustments. 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:
(a) Subject to Sections 1.02(b) and 1.02(e) hereof, each share of Company
Common Stock issued and outstanding immediately prior to the Merger shall be
convened into and shall become that number of fully paid and nonassessable shares of
Acquiror Common Stock equal to the Common Stock Conversion Number.
(b) Each share of Company Common Stock issued and outstanding
immediately prior to the Merger and owned directly or indirectly by the Company as
treasury stock, by SHI or by any of the Company's or SHI's respective Subsidiaries shall
be cancelled, and no consideration shall be delivered in exchange therefor.
(c) Each share of the capital stock of Acquiror issued and outstanding
immediately prior to the Merger shall remain outstanding.
(d) "Common Stock Conversion Number" shall mean the quotient obtained by
dividing (i) the aggregate number of shares of Acquiror Common Stock into which
Company Common Stock shall be converted (the "Aggregate Shares Delivered") by (ii)
the number of shares of Company Common Stock outstanding at the Closing Date (the
"Outstanding Company Common Stock").
For purposes hereof, the Aggregate Shares Delivered shall equal the sum of (i)
the Closing Price Share Number and (ii) the Top-up Share Number, if any. For
purposes hereof, the "Closing Price Share Number" shall equal the quotient obtained by
dividing the Aggregate Consideration by the Collar Price. The "Collar Price" shall be
whichever of the following applies:
(i) 115% of the Execution Price, if the Closing Price is greater than
115% of the Execution Price; or
(ii) the Closing Price, if the Closing Price is greater than or equal to
85% but less than or equal to 115% of the Execution Price; or
(iii) 85% of the Execution Price, if the Closing Price is less than 85%
of the Execution Price.
If the Closing Price is less than 85% of the Execution Price, the Company shall
have the right to give notice to Acquiror (the "Termination Intent Notice") that the
Company intends to terminate this Agreement. The Termination Intent Notice shall be
delivered to Acquiror in person at the location where the Closing is to take place no later
than 2:00 p.m. New York time on the business day prior to the Closing Date (the "Pre-
Closing Date"). If the Company delivers a Termination Intent Notice, Acquiror shall
have the right to give notice to the Company (the "Top-up Notice") that Acquiror elects
-2-
to increase the number of shares of Acquiror Common Stock to be delivered in the
Merger to that number of shares (the "Maximum Number") of Acquiror Common Stock
equal to the Aggregate Consideration divided by the Closing Price. The excess of the
Maximum Number over the number obtained by dividing the Aggregate Consideration
by the Collar Price is referred to herein as the "Collar Deficiency Number". The Top-up
Notice shall be delivered in person to the Company at the location where the Closing is
to take place no later than 8:00 p.m. New York time on the Pit-Closing Date. If
Acquiror has not delivered a Top-up Notice by the above deadline, and the Company and
Acquiror have not otherwise reached an agreement regarding the number of shares of
Acquiror Common Stock to be delivered by such deadline, this Agreement shall
terminate. If Acquiror does deliver a Top-up Notice, or if the Company and Acquiror
otherwise agree, the number of shares of Acquiror Common Stock to be delivered in the
Merger shall be increased by the Collar Deficiency Number or such other number as the
Company and Acquiror may agree. The Collar Deficiency Number or such other
number is hereinafter referred to as "Top-up Share Number".
For purposes hereof, the "Aggregate Consideration" shall be S1.575.000.000 (the
"Base Consideration");
(i) increased by the Estimated Capital Expenditure Amount(as defined
in Section 6.23);
(ii) reduced by the Estimated Cable Net Liabilities Amount (as defined
in Section 6.23);
(iii) increased by the River City Purchase Amount (as defined in
Section 6.28), if any; and
(iv) reduced by the Mid-Tennessee Amount (as defined in Section
6.26), if any.
For purposes hereof, (i) the "Execution Price" shall be $20.075; (ii) the average
closing price of Acquiror Common Stock on the NASDAQ National Market for the
Random Trading Days shall be the "Closing Price"; and (iii) the "Random Trading
Days" shall be the 15 trading days selected by lot from the 40 trading days ending on and
including the second trading day prior to the Closing Date. The Random Trading Days
shall be selected by lot by the Company and the Acquiror at 5:00 p.m. New York time
on the second trading day prior to the Closing Date.
If between the date hereof and the Effective Time the outstanding shares of
Acquiror Common Stock shall have been changed into a different number of shares or
a different class, by reason of any stock dividend, subdivision, reclassification,
recapitalization, split, combination or exchanges of shares, or if any extraordinary
dividend or distribution is made with respect to the Acquiror Common Stock, then the
Aggregate Shares delivered shall be correspondingly adjusted to reflect such stock
-3-
dividend, subdivision, reclassification, rcapitalization, split, combination or exchange
of shares or extraordinary dividend or distribution.
(e) The holder of any shares ("Dissenting Shares") of Company Common
Stock outstanding immediately prior to the Merger that has validly exercised such
holder's dissenters' rights. if any, under the Delaware General Corporation Law (the
"DGCL") shall not be entitled to receive, in respect of the shares of Company Common
Stock as to which such holder has validly exercised dissenters' rights, shares of Acquiror
Common Stock and shall not be entitled to receive shares of Sill Common Voting Shares
or SHE Class A Common Shares pursuant to the Distribution unless and until such holder
shall have failed to perfect, or shall have effectively withdrawn or lost, such holder's
right to payment for such holder's shares of Company Common Stock under the DGCL.
In such event, such holder shall be entitled to receive the Acquiror Common Stock, SKI
Common Voting Stock and SHI Class A Common Stock such holder would have been
entitled to receive had such holder not exercised dissenters' rights. The Company shall
give Acquiror prompt notice upon receipt by the Company (i) prior to or at the meeting
of stockholders at which the Merger and other transactions contemplated hereby are voted
upon, of any written objection to such transactions (any stockholder duly making such
objection being hereinafter called a "Dissenting Stockholder") and (ii) any other notices
or communications made after such time by a Dissenting Stockholder which pertains to
dissenters' rights. The Company agrees that, prior to the Effective Time, except with
the written consent of Acquiror, it will not voluntarily make any payment with respect
to, or settle or offer to settle, any such demand. Each Dissenting Stockholder who
becomes entitled under the DGCL to payment for such holder's shares of Company
Common Stock shall receive payment therefor after the Effective Time from the
Surviving Corporation, and SHI shall reimburse the Surviving Corporation for the
excess, if any, of (x) the amount paid to such Dissenting Stockholders by the Acquiror
over (y) the product of (a) the quotient of the Aggregate Consideration divided by the
Aggregate Shares Delivered times (b) the number of Dissenting Shares held by such
Dissenting Stockholders; provided that the amount paid to Dissenting Shareholders shall
have been agreed upon by the Surviving Corporation. Sill and the Dissenting
Stockholders or finally determined pursuant to the DGCL.
1.03 Effective Time of the Merger. Subject to the terms and conditions set forth in this
Agreement, a certificate of merger shall be duly prepared, executed and acknowledged by
Acquiror and the Company and thereafter delivered to the Secretary of State of Delaware and
articles or a certificate of merger shall be duly prepared, executed and acknowledged by
Acquiror and the Company and thereafter delivered to the Secretary of State of Pennsylvania
(together, the "Certificate of Merger") for filing pursuant to the Delaware General Corporation
Law and the Pennsylvania Business Corporations Law (the "PBCL"), respectively, on the
Closing Date. The Merger shall become effective upon the filing of the Certificate of Merger
with such Secretaries of State on the Closing Date (the "Effective Time").
-4-
1.04 Exchange of Certificates.
(a) Prior to the Closing Date, the Company shall retain a bank or trust
company reasonably acceptable to Acquiror to act as exchange agent (the "Exchange Agent")
in connection with the surrender of certificates evidencing shares of Company Common Stock
converted into shares of Acquiror Common Stock pursuant to the Merger. Prior to the Effective
Time. Acquiror shall deposit with the Exchange Agent the shares of Acquiror Common Stock
to be issued in the Merger, which shares (the "Merger Stock") shall be deemed to be issued at
the Effective Time. At and following the Effective Time, the Surviving Corporation shall
deliver to the Exchange Agent such cash as may be required from time to time to make payment
of cash in lieu of fractional shares in accordance with Section 1.06 hereof.
(b) As soon as practicable after the Effective Time, the Exchange Agent shall
mail to each person who was, at the Effective Time, a holder of record of a certificate or
certificates that immediately prior to the Effective Time evidenced Outstanding Company
Common Stock (the "Certificates"), other than the Company, SHI or any of their respective
Subsidiaries, (i) a letter of transmittal (which shall specify that delivery of the Certificates shall
be effective, and risk of loss and title to the Certificates shall pass, only upon delivery of the
Certificates to the Exchange Agent and which shall be in such form and shall have such other
provisions as Acquiror and SHI shall reasonably specify) and (ii) instructions for use in effecting
the surrender of the Certificates in exchange for certificates representing the Merger Stock.
Upon surrender of a Certificate for cancellation to the Exchange Agent, together with such letter
of transmittal duly executed and such other documents as may be required by the Exchange
Agent, the holder of such Certificate shall be entitled to receive in exchange therefor certificates
representing the shares of Merger Stock that such holder has the right to receive pursuant to the
terms hereof (together with any dividend or distribution with respect thereto made after the
Effective Time and any cash paid in lieu of fractional shams pursuant to Section 1.06), and the
Certificate so surrendered shall be canceled. In the event of a transfer of ownership of Company
Common Stock that is not registered in the stock transfer records of the Company, a certificate
representing the proper number of shares of Merger Stock may be issued to a transferee if the
Certificate representing such Company Common Stock is presented to the Exchange Agent,
accompanied by all documents required to evidence and effect such transfer and by evidence
reasonably satisfactory to Acquiror and SHI that any applicable stock transfer tax has been paid.
(c) After the Effective Time, each outstanding Certificate which theretofore
represented shares of Company Common Stock shall, until surrendered for exchange in
accordance with this Section 1.04, be deemed for all purposes to evidence the right to receive
the number of shares of Merger Stock into which the shares of Company Common Stock(which,
prior to the Effective Time, were represented thereby) shall have been so converted.
(d) Except as otherwise expressly provided herein, the Surviving Corporation
shall pay all charges and expenses, including those of the Exchange Agent, in connection with
the exchange of shares of Merger Stock for shares of Company Common Stock. Any Merger
Stock deposited with the Exchange Agent that remains unclaimed by the former stockholders of
the Company after six months following the Effective Time shall be delivered to the Surviving
Corporation, upon demand, and any former stockholders of the Company who have not then
-5-
complied with the instructions for exchanging their Certificates shall thereafter look only to the
Surviving Corporation for exchange of Certificates.
(e) Effective upon the Closing Date, the stock transfer books of the Company
shall be closed, and there shall be no further registration of transfers of shares of Company
Common Stock thereafter on the records of the Company.
(f) All Merger Stock issued upon conversion of shares of Company Common
Stock and all SHI Common Shares distributed pursuant to Article II hereof, each in accordance
with the terms hereof, shall be deemed to have been issued in full satisfaction of all rights
pertaining to such shares of Company Common Stock.
' 1.05 Distribution With Respect to Shares Represented by Unexchanged Certificates.
No dividend or other distribution declared or made after the Effective Time with respect to the
Merger Stock with a record date after the Effective Time shall be paid to the holder of any
unsurrendered Certificate with respect to the shares of Merger Stock issuable upon surrender of
a Certificate until the holder of such Certificate shall surrender such Certificate in accordance
with Section 1.04. Subject to the effect of applicable law, following surrender of any such
Certificate the Surviving Corporation shall pay, without interest. to the record holder of
certificates representing shares of Merger Stock issued in exchange therefor (i) at the time of
such surrender, the amount of dividends or other distributions with a record date after the
Effective Time theretofore paid with respect to such shares of Merger Stock, and (ii) at the
appropriate payment date, the amount of dividends or other distributions with a record date after
the Effective Time but prior to surrender of such Certificate and a payment date subsequent to
such surrender payable with respect to such shares of Merger Stock. No interest shall be paid
on any of the Merger Stock or any SIB Class A Common Shares or on SHE Common Voting
Shares distributed pursuant to Article II hereof
1.06 No Fractional Shares.
(a) No certificates or scrip representing fractional shares of Acquiror Common
Stock shall be issued upon the surrender of Certificates pursuant to Section 1.04. Such
fractional share interests shall not entitle the owner thereof to any rights as a security holder of
Acquiror. In lieu of any such fractional shares of Acquiror Common Stock, each holder of
Company Common Stock entitled to receive shares of Acquiror Common Stock in the Merger,
upon surrender of a Certificate for exchange pursuant to Section 1.04, shall be entitled to receive
an amount in cash (without interest), rounded to the nearest cent, determined by multiplying the
fractional interest in Acquiror Common Stock to which such holder would otherwise be entitled
(after taking into account all shares of Company Common Stock then held of record by such
holder) by the closing sale price of a share of Acquiror Common Stock as reported on the
NASDAQ National Market on the Closing Date.
(b) As soon as practicable after the determination of the amount of cash, if
any, to be paid to holders of Company Common Stock in lieu of any fractional share interests,
Acquiror shall promptly deposit with the Exchange Agent cash in the required amounts and the
Exchange Agent will mail such amounts without interest to such holders;provided, however, that
-6-
no such amount will be paid to any holder of Certificates which formerly represented Company
Common Stock prior to the surrender by such holder of the Certificates formerly representing
such holder's Company Common Stock. Any such amounts that remain unclaimed by the
former stockholders of the Company after six months following the Effective Time shall be
delivered to the Surviving Corporation by the Exchange Agent upon demand and any former
stockholders of the Company who have not then surrendered their Certificates shall thereafter
look only to the Surviving Corporation for payment in lieu of any fractional interests.
1.07 No Liability. Any amounts remaining unclaimed by holders of shares on the day
immediately prior to such time as such amounts would otherwise escheat to or become property
of any governmental entity shall, to the extent permitted by applicable law, become the property
of Acquiror free and clear of any claims or interest of any holder previously entitled thereto.
None of Acquiror. SHE, the Company or the Exchange Agent will be liable to any holder of
shares of Company Common Stock for any shares of Merger Stock or any SHI Common Shares.
dividends or distributions with respect thereto or cash payable in lieu of fractional shares
delivered to a state abandoned property administrator or other public official pursuant to any
applicable abandoned property, escheat or similar law.
1.08 Lost Certificates. If any Certificate shall have been lost, stolen or destroyed. upon
the making of an affidavit of that fact by the person claiming such Certificate to be lost, stolen
or destroyed, the Exchange Agent will issue in exchange for such lost, stolen or destroyed
Certificate the shares of Merger Stock (and any dividend or distribution with respect thereto
made after the Effective Time and prior to such issuance and any cash payable in lieu of
fractional shares pursuant to Section 1.06) deliverable in respect thereof as determined in
accordance with the terms hereof. When authorizing such payment in exchange for any lost.
stolen or destroyed Certificate, the person to whom the Merger Stock is to be issued, as a
condition precedent to the issuance thereof, shall give the Surviving Corporation a bond
satisfactory to the Surviving Corporation against any claim that may be made against the
Surviving Corporation with respect to the Certificate alleged to have been lost, stolen or
destroyed.
ARTICLE II
CERTAIN PRE-MERGER TRANSACTIONS
The following transactions shall occur prior to the Effective Time:
2.01 Internal Spinoffs; Amendments to Charters.
(a) Prior to the Contribution, the Distribution and the Effective Time, and in
transactions intended to qualify under Section 355 of the Internal Revenue Code as tax-
free spinoffs, Scripps Howard Broadcasting Company, an Ohio corporation and a wholly-
owned Subsidiary of SHI ("Broadcasting"), will distribute all of the outstanding capital
stock of Scripps Howard Cable Company of Sacramento, a Delaware corporation
("Sacramento Cable"), and Scripps Howard Cable Company, a Colorado corporation
-7-
("SH Cable"), each of which is a wholly-owned Subsidiary of Broadcasting, to SHI, and
SHI will then distribute to the Company all of the outstanding capital stock of
Sacramento Cable, SH Cable, L-R Cable, Inc., a Colorado corporation and wholly-
owned Subsidiary of SHI ("L-R Cable"), and EWS Cable. Inc.. a Colorado corporation
and wholly-owned Subsidiary of SHI ("EWS Cable"), whereupon Sacramento Cable. SH
Cable. L-R Cable. and EWS Cable (collectively, the "Cable Subsidiaries") will become
direct wholly-owned Subsidiaries of the Company.
(b) Prior to the Contribution, the Distribution and the Effective Time, the
Company shall amend its Certificate of Incorporation as set forth in Exhibit A hereto (the
"Charter Amendment") and Sill shall amend and restate its Articles of Incorporation as
set forth in Exhibit B hereto (the "Restated Articles").
2.02 Contribution of Assets to and Assumption of Liabilities by SHI.
(a) Prior to the Effective Time and pursuant to the terms of the Contribution
and Assumption Agreement to be entered into by the Company and SHI in the form
attached hereto as Exhibit C (the "Contribution Agreement"), the Company shall
contribute and transfer(together with the transactions described in Section 2.02(b) below.
the "Contribution") to SHI all of the Company's right, title and interest in and to any and
all assets of the Company, whether tangible or intangible and whether fixed, contingent
or otherwise; provided, however, that the Company shall not contribute to Sal (i) the
issued and outstanding capital stock of, and its right, title and interest in any advances
to, any Cable Subsidiary; (ii) the Company's rights created pursuant to this Agreement
and the Contribution Agreement; and (iii) cash sufficient to pay all expenses relating to
the transactions described in this Agreement that are the responsibility of the Company
hereunder including the fees and expenses of Merrill Lynch in connection with such
transactions.
(b) In consideration for the transactions described in Section 2.02(a) above,
concurrently therewith and pursuant to the Contribution Agreement, SHI shall (A)
assume any and all liabilities of the Company of every kind whatsoever, whether
absolute, known, unknown, fixed, contingent or otherwise; provided, however, that SHE
will not assume, and will have no liability with respect to, (i) any liabilities associated
with the cable television business operations of the Cable Subsidiaries or Cable
Partnerships except as otherwise provided herein, including Sections 1.02(e), 6.06(g),
6.10, 6.12, 6.13, 6.27, 7.06 and 9.01 and (ii) the Company's obligations created
pursuant to this Agreement and the Contribution Agreement and (B) issue and deliver to
the Company shares of common stock of SHI as set forth in the Contribution Agreement.
Concurrently with the transactions described in Section 2.02(a) above, SHE will cause the
Company and the Cable Subsidiaries to be released by all applicable third parties from
any liability of SHE or any of its Subsidiaries other than Cable or any liability assumed
by SHE pursuant to this Section 2.02(b) that is (A) debt for borrowed money and similar
monetary obligations evidenced by bonds, notes, debentures or other instruments, or (B)
guaranties, endorsements, and other contingent obligations, whether direct or indirect,
in respect of liabilities of others of any of the types described in clause (A). Each of the
-8-
Company Contracts, other than the SHI Note Indenture will be terminated, or the
Company will otherwise be released from all obligations thereunder, prior to the
Effective Time. Prior to the Effective Time, either SHI shall purchase and retire all of
its outstanding 7-3/8% Notes due December 15. 1998 (the "SHI Notes"), or, if and to
the extent the SHI Notes have not been repurchased at the Effective Time. SHE shall
defease the SET Notes in accordance with Section 401 of the SHE Note Indenture and
shall indemnify the Company in respect of any Loss it may suffer in respect thereof.
Prior to the Effective Time. SHE and the Company shall enter into the Non-Competition
Agreement as set forth in Exhibit D hereto. SHE acknowledges that the liabilities to be
assumed pursuant to the first sentence of this Section 2.02(b) include any and all
liabilities associated with any claim, action or proceeding brought by or on behalf of the
holders of Company Common Stock in connection with the transactions contemplated
hereby.
(c) Following the Contribution and prior to the Effective Time, the Company
shall distribute (the "Distribution") one fully paid and nonassessable SKI Class A
Common Share to the holder of each share of Company Class A Common Stock
outstanding immediately prior to the Distribution and one fully paid and nonassessable
SHI Common Voting Share to the holder of each share of Company Common Voting
Stock outstanding immediately prior to the Distribution. Each share of the capital stock
of SHI issued and outstanding immediately prior to the Distribution and owned directly
or indirectly by the Company or any of its Subsidiaries (other than those to be distributed
in accordance with the first sentence of this paragraph) shall be cancelled at the time of
the Distribution.
ARTICLE III
REPRESENTATIONS AND WARRANTIES REGARDING THE
COMPANY AND SHI
The Company and SHE jointly and severally represent and warrant to Acquiror as
follows:
3.01 Organization and Authority. Each of the Company and SHI is a corporation duly
organized, validly existing and in good standing under the laws of the state of its incorporation.
Each of the Company and SHI has all requisite corporate power and authority to execute and
deliver this Agreement and to consummate the transactions contemplated hereby. Subject to the
items referred to in Section 3.03, all necessary action, corporate or otherwise, required to have
been taken by or on behalf of the Company and SHI by applicable law, their respective charter
documents or otherwise to authorize (i) the approval, execution and delivery on behalf of the
Company and SHE of this Agreement and (ii) the performance by the Company and SHE of their
respective obligations under this Agreement and the consummation of the transactions
contemplated hereby has been taken, except that this Agreement, the Charter Amendment and
the transactions described in Section 6.13 must be approved by the stockholders of the Company.
This Agreement and each other agreement contemplated hereby (each a "Transaction
-9-
Agreement") to which the Company or SET is or will be a party constitutes or will constitute,
as the case may be, a valid and binding agreement of each of the Company and SHE, as the case
may be, enforceable against each of them in accordance with its terms, except (x) as the same
may be limited by applicable bankruptcy, insolvency, moratorium or similar laws of general
application relating to or affecting creditors' rights. including without limitation. the effect of
statutory or other laws regarding fraudulent conveyances and preferential transfers, and (y) for
the limitations imposed by general principles of equity. The foregoing exceptions are hereinafter
referred to as the "Enforceability Exceptions." The Company has heretofore delivered to
Acquiror true and complete copies of the Certificate or Articles of Incorporation and Bylaws or
Code of Regulations of the Company and SHI as in effect on the date hereof.
r3.02 No Breach. The execution and delivery of this Agreement by each of the
Company and SHI do not, and the consummation of the transactions contemplated hereby by
each of the Company and SHI will not, (i) violate or conflict with the Certificate or Articles of
Incorporation or Bylaws or Code of Regulations of the Company or SHI, or (ii) constitute a
breach or default (or an event that with notice or lapse of time or both would become a breach
or default) of, or give rise to any third-party right of termination, cancellation. modification or
acceleration under, or otherwise require notice or approval under, any agreement, understanding
or undertaking to which the Company or SHI or any of their respective Subsidiaries is a party
or by which any of them is bound, or give rise to any Lien on any of their properties, except
where such breach, default, Lien, third-party right, cancellation, modification or acceleration
would not have a Material Adverse Effect on the Company and its Subsidiaries taken as a whole
or materially interfere with or delay the transactions contemplated hereby, or (iii) subject to
obtaining the approvals and making the filings described in Section 3.03 hereof. constitute a
violation of any statute, law, ordinance, rule, regulation,judgment, decree, order or writ of any
judicial, arbitral, public, or governmental authority having jurisdiction over the Company or any
of its Subsidiaries or SHE or any of its Subsidiaries or any of their respective properties or assets
except as would not have a Material Adverse Effect on Cable or on the Company and its
Subsidiaries taken as a whole or materially interfere with or delay the transactions contemplated
hereby.
3.03 Consents and Approvals. Neither the execution and delivery of this Agreement
by the Company and SHI nor the consummation of the transactions contemplated hereby will
require any consent, approval, authorization or permit of, or filing with or notification to, any
governmental or regulatory authority, except (i) for filings required under the Securities Act of
1933, as amended, and the rules and regulations thereunder(the "Securities Act"), (ii) for filings
required under the Securities Exchange Act of 1934, as amended, and the rules and regulations
thereunder (the "Exchange Act"), (iii) for filings under state securities or "blue sky" laws, (iv)
for notification pursuant to, and expiration or termination of the waiting period under, the Hart-
Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations
thereunder (the "HSR Act"), (v) for the filing of the Certificate of Merger as set forth in Article
I hereof, (vi) for the filing of the Charter Amendment with the Secretary of State of Delaware,
the Restated Articles with the Secretary of State of Ohio, and appropriate documents with the
relevant authorities of other states in which the Company and its Subsidiaries are qualified to do
business, (vii) for consents or waivers from the relevant governmental entities necessary to
transfer ownership of Cable's franchise agreements and Federal Communications Commission
-10-
("FCC") licenses, and (viii) where the failure to obtain such consents. approvals, authorizations
or permits, or to make such filings or notifications, would not prevent the Company or SHI from
performing its respective obligations under this Agreement or the Contribution Agreement
without having a Material Adverse Effect on the Company or Cable or materially interfere with
or delay the transactions contemplated hereby.
3.04 Approvals of the Boards; Fairness Opinion; Vote Required. The Boards of
Directors of the Company and SHI have each, by resolutions duly adopted at meetings duly
called and held, unanimously approved and adopted this Agreement, the Merger, the
Contribution and the Distribution, and the other transactions contemplated hereby on the material
terms and conditions set forth herein. The Board of Directors of the Company has received the
opinion as of the date of this Agreement of Merrill Lynch & Co. ("Merrill Lynch"), as financial
advisor to the Company, that the consideration to be paid to the Company's stockholders in the
Merger is fair to such stockholders from a financial point of view. The affirmative votes or
actions by written consent of a majority of the votes that holders of the outstanding shares of
Company Common Voting Stock are entitled to cast are the only votes of the holders of any
class or series of the capital stock of the Company necessary to approve the Merger and the
Charter Amendment under applicable law and the Company's Certificate of Incorporation and
By-Laws.
3.05 Capitalization.
(a) The authorized capital stock of the Company consists of (i) 120 million
shares of Company Class A Common Stock, (ii) 30 million shares of Company Common Voting
Stock, and (iii) 25 million shares of serial preferred stock. par value $.O1 per share (the
"Company Preferred Stock"). As of September 30, 1995, there were issued and outstanding"
60,028,980 shares of Company Class A Common Stock and 19,990,833 shares of Company
Common Voting Stock. All such outstanding shares are duly authorized, validly issued and fully
paid and nonassessable. Since September 30, 1995 no shares of Company Common Stock have
been issued except upon exercise of options, restricted stock or other awards issued pursuant to
the Incentive Plan or the Directors Plan. There are no shares of Company Preferred Stock
issued and outstanding. There are no preemptive or other similar rights available to the existing
holders of the capital stock of the Company. Other than options, restricted stock, and other
awards outstanding or issuable pursuant to the Incentive Plan or the Directors Plan, and other
than in connection with the transactions contemplated by this Agreement, there are no
outstanding options, warrants, rights, puts, calls, commitments, or other contracts,
arrangements, or understandings issued by or binding upon the Company or any of its
Subsidiaries requiring or providing for, and there are no outstanding debt or equity securities
of the Company or its Subsidiaries which upon the conversion, exchange or exercise thereof
would require or provide for, the issuance, transfer or sale by the Company or any of its
Subsidiaries of any new or additional equity interests in the Company (or any other securities
of the Company which, with notice, lapse of time or payment of monies, are or would be
convertible into or exercisable or exchangeable for equity interests in the Company). Except
for the Scripps Family Agreement dated October 15, 1992 (the voting provisions of which
become effective only upon termination of The Edward W. Scripps Trust (the "Trust")), there
-11-
are no voting trusts or other agreements or underktandings to which the Company is a party with
respect to the voting of capital stock of the Company.
(b) As of the date hereof, the authorized capital stock of SHE consists of 750
Common Shares, without par value (the "SHI Common Shares"). Upon the filing of its
Amended and Restated Articles of Incorporation with the Secretary of State of the State of Ohio.
the authorized capital stock of Sill will consist of(i) 120 million SHI Class A Common Shares.
$.01 par value; (ii) 30 million SHI Common Voting Shares. $.01 par value; and (iii) 25 million
Sill Preferred Shares, $.01 par value. As of the date hereof, there are issued and outstanding
750 SHE Common Shares, all of which are owned by the Company, and no other shares of
capital stock of SHI.
3.06 SEC Reports. The Company has filed all required forms, reports and documents
with the Securities and Exchange Commission (the "SEC") since January I, 1993 (collectively,
the "Company's SEC Reports"). The Company's SEC Reports have complied in all material
respects with all applicable requirements of the Securities Act and the Exchange Act. As of
their respective dates, none of the Company's SEC Reports, including, without limitation, any
financial statements or schedules included or incorporated by reference therein, contained any
untrue statement of a material fact or omitted to state a material fact required to be stated or
incorporated by reference therein or necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading. The Company has heretofore
made available or delivered to Acquiror, in the form filed with the SEC, all of the Company's
SEC Reports.
3.07 Financial Statements. The (i) audited consolidated financial statements of the
Company contained in the Company's Annual Report on Form 10-K for the year ended
December 31, 1994, and (ii) unaudited condensed consolidated financial statements of the
Company contained in the Company's Quarterly Report on Form 10-Q for the six months ended
June 30, 1995 (the "Company 10-Q"), were prepared in accordance with generally accepted
accounting principles applied on a consistent basis ("GAAP") and present fairly in all material
respects the Company's consolidated financial position and the results of its consolidated
operations and its consolidated cash flows as of the relevant dates thereof and for the periods
covered thereby (subject to normal year-end adjustments in the case of the unaudited interim
financial statements).
3.08 Absence of Certain Changes. Except as otherwise disclosed in the Company
10-Q, since June 30, 1995, there has not been any (i) material adverse change in the financial
position, liabilities, assets or business of the Company and its Subsidiaries taken as a whole
except for material adverse changes due to general economic or industry-wide conditions, or (ii)
other events or conditions of any character that, individually or in the aggregate, have or would
reasonably be expected to have a Material Adverse Effect on the Company and its Subsidiaries
taken as a whole or on the ability of the Company and SHI to perform their respective material
obligations under this Agreement and the Transaction Agreements to which they are or will be
a party.
-12-
3.09 Absence of Undisclosed Liabilities.' There are no liabilities of the Company of any
kind whatsoever, whether accrued, contingent, absolute, determined, determinable or otherwise,
and there is no existing condition, situation or set of circumstances which could reasonably be
expected to result in such a liability, other than (i) liabilities provided for in the balance sheet
included in the Company 10-Q or disclosed in the notes thereto and (ii) other undisclosed
liabilities which, individually or in the aggregate. are not material to the Company and its
Subsidiaries taken as a whole.
The Company has served only as a holding company for its Subsidiaries and has
not engaged in any active business operation. The aggregate amount of liabilities of the
Company which SHI will assume pursuant to Section 2.02(b) would not reasonably be expected
to exceed $50,000,000.
3.10 Compliance With Law. The Company holds all licenses, franchises, certificates.
consents, permits, qualifications and authorizations from all governmental authorities necessary
for the lawful conduct of its business, except where the failure to hold any of the foregoing
would not have a Material Adverse Effect on the Company and its Subsidiaries taken as a whole.
To the Company's knowledge, the Company has not violated, and is not in violation of, any
such licenses, franchises, certificates, consents, permits, qualifications or authorizations or any
applicable statutes, laws, ordinances, rules and regulations (including, without limitation, any
of the foregoing related to occupational safety, storage, disposal, discharge into the environment
of hazardous wastes, environmental protection, conservation, unfair competition, labor practices
or corrupt practices) of any governmental authorities, except where such violations do not, and
in so far as reasonably can be foreseen will not, have a Material Adverse Effect on the Company
and its Subsidiaries taken as a whole, and the Company has not received any notice from a
governmental or regulatory authority within three years of the date hereof of any such violation.
3.11 Taxes.
(a) All Company Consolidated Income Tax Returns and Cable Tax Returns
(as defined in Section 6.10(h)), required to be filed on or before the date hereof have been filed
with the appropriate governmental agencies in all jurisdictions in which such Tax Returns are
required to be filed; all of the foregoing Tax Returns are true, correct and complete in all
material respects; and all Taxes required to have been paid in connection with such Tax Returns
have been paid. All material Taxes payable by or with respect to the Company and its
Subsidiaries but not reflected on any Tax Return required to be filed prior to the date of the most
recent balance sheet included in the Company 10-Q, have been fully paid or adequate provision
therefor has been made and reflected on such balance sheet.
(b) Except as set forth on Schedule 3.11(b) hereto, there is no claim or
investigation involving an amount greater than $250,000 pending or threatened against the
Company or Cable for past Taxes, and adequate provision for the claims or investigations set
forth on Schedule 3.11(b) has been made as reflected on the Company's financial statements.
(c) The Company is not, and on the Closing Date will not be, an investment
Company within the meaning of Section 368(a)(2)(F)(iii) and (iv) of the Internal Revenue Code.
-13-
(d) As of the Closing Date ?here will be no deferred intercompany gains
between the Company and the Cable Subsidiaries or between the Cable Subsidiaries themselves
in excess of S250,000 (in the aggregate).
3.12 Litigation. There is no suit, action, proceeding or investigation pending against
or, to the knowledge of the Company, threatened against or affecting the Company or any of
its Subsidiaries or any of their respective properties that, individually or in the aggregate, would
reasonably be expected to prevent, hinder, or materially delay the ability of the Company to
consummate the transactions contemplated by this Agreement or otherwise be material to the
Company and its Subsidiaries taken as a whole, nor is there any judgment. decree. inquiry, rule
or order outstanding against the Company or any of its Subsidiaries which, insofar as can
reasonably be foreseen, would prevent, hinder or materially delay such ability or otherwise be
material to the Company.
3.13 Brokers and Finders. Neither the Company, SHI nor any officer, director or
employee of the Company or SDI has employed any investment banker, broker or finder or
incurred any liability for any brokerage fees, commissions or finder's fees in connection with
the transactions contemplated herein. except that the Company has employed Merrill Lynch as
its financial advisor and for whose fees and expenses the Company is responsible.
3.14 Employee Benefit Plan Matters.
(a) Company Employee Plans and Company Benefit Arrangements. Acquiror
shall have no liability whatsoever under any Company Employee Plans or Company Benefit
Arrangements or under any laws applicable to any Company Employee Plans or Company
Benefit Arrangements.
(b) COBRA. The Company, SHI and their ERISA Affiliates have complied
in all material respects with the continuation coverage requirements of COBRA with respect to
any loss of coverage occurring through the date of this Agreement under a Group Health Plan
sponsored by the Company, SHI or any of their ERISA Affiliates.
3.15 Company Contracts. (a) Except as set forth on Schedule 3.15, the Company is
not a party to or bound by any contract, agreement or commitment. The contracts, agreements
and commitments to which the Company is a party or by which it is otherwise bound are
referred to herein as the "Company Contracts". The Company has heretofore delivered to
Acquiror all Company Contracts.
3.16 Environmental Matters. (a) Except as set forth in the Schedule 3.16, there are
no Environmental Liabilities of the Company and its Subsidiaries that have had or may
reasonably be expected to have a Material Adverse Effect on the Company and its Subsidiaries
taken as a whole.
(b) There has been no environmental assessment, investigation, study, audit,
test, review or other analysis conducted of which the Company has knowledge in relation to the
current or prior business of the Company or its Subsidiaries or any property or facility now or
-14-
•
previously owned or leased by the Company or its Subsidiaries which has not been delivered to
Acquiror prior to the date hereof.
3.17 Full Disclosure. All of the statements made by the Company and Sill in this
Agreement (including, without limitation, the representations and warranties made by the
Company and Sill herein and in the schedules and exhibits hereto which are incorporated by
reference herein and which constitute an integral part of this Agreement) do not (and on the
Closing Date will not) include or contain any untrue statement of a material fact, and do not (and
on the Closing Date will not) omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances under which they
were made, not misleading.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES REGARDING CABLE
The Company and SHI jointly and severally represent and warrant to Acquiror as
follows:
4.01 Organization and Authority. Each of the Cable Subsidiaries is a corporation duly
organized, validly existing and in good standing under the laws of its state of incorporation.
Each Cable Partnership is a partnership duly formed and validly existing under the laws of its
jurisdiction of formation. Each of the Cable Subsidiaries and the Cable Partnerships is qualified
to do business as a foreign corporation or partnership and is, where applicable, in good standing,
in each jurisdiction where such qualification is necessary except where the failure to so qualify
would not reasonably be expected to have a Material Adverse Effect on Cable. Each of the
Cable Subsidiaries and the Cable Partnerships has all requisite corporate or partnership, as
appropriate, power and authority to own, lease and operate its properties and to carry on its
business as now being conducted, except where the failure to have such power or authority
would not have a Material Adverse Effect on Cable. The Company has heretofore delivered to
Acquiror true and complete copies of the certificate of incorporation, bylaws and partnership
agreements of Cable as currently in effect.
4.02 No Breach. The execution and delivery of this Agreement by each of the
Company and Sill do not, and the consummation of the transactions contemplated hereby by
each of the Company and Sill will not 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 third-party right
of termination, cancellation, modification or acceleration under, or otherwise require notice or
approval under, any agreement, understanding or undertaking to which the Company or any of
the Cable Subsidiaries or Cable Partnerships is a party or by which any of them is bound, or
give rise to any Lien on any of their properties, except where such breach, default, Lien, third-
party right, cancellation, modification, or acceleration would not have a Material Adverse Effect
on Cable or materially interfere with or delay the transactions contemplated hereby. Neither the
Company nor any of the Cable Subsidiaries or Cable Partnerships is a party to or bound by any
agreement that restricts or purports to restrict the ability of any of them or any affiliate of any
-15-
of them to engage in any location in the business`of cable television, except for such restrictions
that would not have a Material Adverse Effect on Cable.
4.03 Capitalization. All of the issued and outstanding shares of capital stock of the
Cable Subsidiaries are owned by SHE or Broadcasting (as set forth below) and are duly
authorized, validly issued and fully paid and nonassessable. As of the date hereof, SH Cable
and Sacramento Cable are wholly-owned Subsidiaries of Broadcasting. As of the date hereof,
EWS Cable and L-R Cable are wholly owned Subsidiaries of SHI. Immediately prior to the
Effective Time, SH Cable. Sacramento Cable, EWS Cable and L-R Cable will be wholly-owned
subsidiaries of the Company. EWS Cable owns a 98% interest in, and L-R Cable owns a 2%
interest in. TeleScripps Cable Company, a Colorado partnership ("TCC"). Sacramento Cable
owns a 95% interest in Sacramento Cable Television, a California partnership ("SCT"). River
City Cablevision, Inc., a California corporation, owns a 5% interest in SCT (the "River City
Interest") and is not affiliated with the Company. TCC and SCT are collectively referred to
herein as the "Cable Partnerships." With respect to TCC's cable systems in the cities of
Chamblee and Doraville, Georgia. and in the County of Dekalb, Georgia, certain third parties
have certain contractual rights (and obligations) which in the case of each system are not
material in the aggregate to such system. Other than in connection with the transactions
contemplated by this Agreement, there are no outstanding options, warrants, rights. puts, calls.
commitments, or other contracts, arrangements, or understandings issued by or binding upon any
Cable Subsidiary or Cable Partnership requiring or providing for, and there are no outstanding
debt or equity securities of any Cable Subsidiary or Cable Partnership which upon the
conversion, exchange or exercise thereof would require or provide for, the issuance, transfer or
sale by any Cable Subsidiary or Cable Partnership of any new or additional equity interests in
the Cable Subsidiaries or the Cable Partnerships (or any other securities of any Cable Subsidiary
or Cable Partnership which, with notice, lapse of time or payment of monies, are or would be
convertible into or exercisable or exchangeable for equity interests in such Cable Subsidiary or
Cable Partnership). There are no voting trusts or other agreements or understandings to which
the Company or any of the Cable Subsidiaries or Cable Partnerships is a party with respect to
the voting of the capital stock of the Cable Subsidiaries or the partnership interests of the Cable
Partnerships. The Cable Subsidiaries and the Cable Partnerships have not engaged in any
businesses or other activities except for the ownership and operation of cable television systems
and other activities incidental thereto.
4.04 Financial Statements. The (i) unaudited combined balance sheets of Cable as of
December 31, 1994 and 1993 (the "Cable Balance Sheets"), and the related unaudited combined
statements of income and cash flows for Cable for the year ended December 31, 1993 and 1994,
and (ii) unaudited combined balance sheet of Cable as of September 30, 1995 and the related
unaudited combined statements of income and cash flows for Cable for the period ended
September 30, 1995, were prepared on a consistent basis and present fairly, in all material
respects, the combined financial position of Cable as of the dates thereof and their combined
results of operations and cash flows for the periods covered thereby (subject to normal year-end
adjustments in the case of the unaudited interim financial statements).
4.05 Absence of Certain Changes. Since December 31, 1994, Cable has conducted its
business in the ordinary course consistent with past practice and there has not been any (i)
-16-
material adverse change in the financial position. liabilities, assets or business of Cable except
for material adverse changes due to general economic or industry-wide conditions, (ii) other
events or conditions of any character that, individually or in the aggregate, have or would
reasonably be expected to have a Material Adverse Effect on Cable or (iii) change by Cable in
any method of accounting or accounting practice.
4.06 Absence of Undisclosed Liabilities. There are no liabilities of Cable of any kind
whatsoever, whether accrued, contingent. absolute, determined, determinable or otherwise. and
there is no existing condition, situation or set of circumstances which could reasonably be
expected to result in such a liability, other than: (i) liabilities provided for in the Cable Balance
Sheets or disclosed in the notes thereto and (ii) other liabilities which, individually or in the
aggregate. are not material to Cable.
4.07 Compliance With Law.
(a) The Cable Subsidiaries and Cable Partnerships hold all licenses, franchises.
certificates, consents, permits. qualifications and authorizations from all governmental authorities
necessary for the lawful conduct of Cable's business. except where the failure to hold any of the
foregoing would not have a Material Adverse Effect on Cable. To the Company's best
knowledge, none of the Cable Subsidiaries or Cable Partnerships has violated, or is in violation
of, any such licenses. franchises, certificates, consents, permits. qualifications or authorizations
or any applicable statutes, laws, ordinances, rules and regulations (including, without limitation,
any of the foregoing related to occupational safety, storage, disposal, discharge into the
environment of hazardous waste, environmental protection, conservation, unfair competition,
labor practices or corrupt practices) of any governmental authorities, except where such
violations do not, and in so far as reasonably can be foreseen will not, have a Material Adverse
Effect on Cable, and none of the Cable Subsidiaries or Cable Partnerships has received any
notice from a governmental or regulatory authority within three years of the date hereof of any
such violation.
(b) The Cable Subsidiaries and Cable Partnerships have made all submissions
(including, without limitation, registration statements) required under the Communications Act
of 1934, as amended, the Cable Communications Policy Act of 1984, as amended, and the Cable
Television Consumer Protection and Competition Act of 1992 (collectively, the
"Communications Act"), and the applicable rules and regulations thereunder (the "Rules and
Regulations"), and, to the Company's best knowledge, have obtained all necessary FCC and
FAA authorizations, licenses, registrations, permits and tower approvals. The Cable
Subsidiaries and Cable Partnerships have complied and are in compliance in all material respects
with the Communications Act and the Rules and Regulations.
4.08 Franchises and Material Agreements.
(a) As of June 30, 1995, the cable television systems owned by Cable (i) had
approximately 750,390 Basic Subscribers and 655,516 premium subscriptions, (ii) passed
approximately 1,181,767 residential dwelling units and (iii) included 4,313 underground plant
miles and 15,737 aerial plant miles. On average, for the three months ended September 30,
-17-
1995, the Average Revenue Per Basic Subscribes was $31.44 per month. Each cable system
owned by Cable operates pursuant to a Franchise except where the failure to have such a
franchise would not have a Material Adverse Effect on Cable. Each Franchise of Cable and
each Material Cable Agreement is the validly existing, legally enforceable obligation of each
Cable Subsidiary or Cable Partnership party thereto and, to the knowledge of the Company, of
the other parties thereto, subject to the Enforceability Exceptions. Each Cable Subsidiary and
Cable Partnership is validly and lawfully operating under its Franchises and the Material Cable
Agreements to which it is a party, and each Cable Subsidiary and Cable Partnership has duly
complied in all material respects with all of the terms and conditions of each of its Franchises
and each Material Cable Agreement to which it is a party. The Company is not aware of any
third party breach or default (or other act or omission that with notice, passage of time or both
would constitute a default) under any Material Cable Agreement. Schedule 4.08(a)(i) sets forth
a complete list of all material Franchises of Cable.
Except for contracts and agreements entered into in accordance with the terms of
this Agreement, and except for the Material Cable Agreements, no Cable Subsidiary or Cable
Partnership and none of their respective properties is a party to or bound by:
(i) any lease (whether of real or personal property) providing for annual rentals
of $250,000 or more, any lease with a term of more than 5 years or any lease relating
to headends or any intermediate transmission points;
(ii) any affiliation or retransmission Contract with a programming service or a
distributor thereof that is material to the relevant cable system;
(iii) any Contract providing for the purchase or sale by Cable of goods. services.
equipment or assets with an aggregate purchase price of $250,000 or more or with a
duration in excess of 5 years except any such Contract that may be terminated by Cable
within six months of the date of this Agreement without penalty (upon written request
by Aquiror (which notice must be given, if at all, within one month following the date
on which the Contract is delivered to Acquiror), Cable shall terminate any such Contract
effective as of the Closing);
(iv) any partnership, joint venture or other similar Contract or any guarantee of
the obligations of any Person except any such Contract or guarantee that could not
reasonably be expected to involve obligations exceeding $250,000 or otherwise he
material to Cable;
(v) any Contract relating to indebtedness for borrowed money or any installment
purchase agreement, conditional sale contract or other like financing arrangement, except
any such Contract or arrangement:
A. with an aggregate outstanding principal amount not exceeding
$150,000, and
-18-
B. which may be prepaid on not more than 30 days' notice without
the payment of any penalty;
(vi) any Contract with the Company or SHE or any of their respective
Subsidiaries other than another Cable Subsidiary or Cable Partnership:
(vii) any Contract which has or could reasonably be expected to have the effect
of prohibiting or restricting any business practice of. or the conduct of business by, any
Cable Subsidiary or Cable Partnership; or
(viii) any other Contract that is material to Cable.
The Contracts listed on Schedule 4.08(a)(ii) are referred to herein as the "Material Cable
Agreements". No payments were made by Cable in connection with the obtaining of any
retransmission agreement with a programming service or distributor thereof.
(b) Except as set forth on Schedule 4.08(b), no Person (including any
governmental authority) has any right to acquire any interest in any cable television system or
assets of Cable (including any right of first refusal or similar right) upon an assignment or
transfer of control of a Franchise, other than rights of condemnation or eminent domain afforded
by law and, to the knowledge of the Company, no other Person (i) has been granted or has
applied for the consent or approval of any governmental authority for the installation.
construction, development, ownership, or operation of a cable television system (as defined in
the Cable Communications Policy Act of 1984, as amended) within all or part of the geographic
area served by any cable television system of Cable or (ii) operates, or has commenced the
construction, installation or development of, any cable television system (as defined in the Cable
Communications Policy Act of 1984, as amended) within all or part of the geographic area
served by any cable television system of Cable, regardless of whether the consent or approval
of any governmental authority is required or has been obtained.
(c) Neither the Company nor any of the Cable Subsidiaries or Cable
Partnerships has made or is bound by any material commitments to any state, municipal, local
or other governmental commission, agency or body with respect to the operation and
construction of their respective systems which are not fully reflected in the Franchises or any
Material Cable Agreement. Neither the Company nor any of the Cable Subsidiaries or Cable
Partnerships has entered into or is bound by any agreements with community groups or similar
third parties restricting or limiting the types of programming that may be shown on such
systems.
(d) No Franchising Authority has advised the Company or any Cable
Subsidiary or Cable Partnership, or otherwise notified the Company or any Cable Subsidiary or
Cable Partnership in accordance with the terms of the applicable Franchise, of its intention to
deny renewal of an existing Franchise. The Company and the Cable Subsidiaries and Cable
Partnerships have timely filed notices of renewal in accordance with the Communications Act
with all Franchising Authorities with respect to each Franchise expiring within 36 months after
:he date of this Agreement. Such notices of renewal have been filed pursuant to the formal
-19-
renewal procedures established by Section 626(a)'of the Communications Act. As of the Closing
Date, (i) the Company will have maintained a controlling ownership in each system in its
entirety for at least 36 consecutive months following the initial construction or acquisition of
each such system by the Company or a Cable Subsidiary or Cable Partnership, or (ii) the
consummation of the transactions contemplated by this Agreement (including acquisition of the
assets related to the Mid-Tennessee Business as described in Section 4.13 hereof) will not violate
the three-year holding period requirement set forth in Section 617 of the Communications Act
and the FCC rules and regulations promulgated thereunder.
(e) The Company and the Cable Subsidiaries and Cable Partnerships are
operating the systems in compliance in all material respects with the provisions of the
Communications Act and the rules and regulations of the FCC relating to carriage of signals.
syndicated exclusivity, network non-duplication, and retransmission consent except where the
failure to comply, individually or in the aggregate, would not result in a Material Adverse Effect
on Cable. No notices or demands have been received from any television station or from any
other Person claiming to have a right, or objecting to or challenging the right of the systems.
to carry any signal or deliver the same. or challenging the channel position on which any
television station is carried.
(f) Schedule 4.08(f) indicates which television signals carried by the systems
are carried without retransmission consent agreements (other than stations which have elected
must-carry status). The Company has delivered to Acquiror full and complete copies of all
retransmission consent agreements. There are no obligations regarding unconstructed fiber
interconnect commitments. For each commercial television signal on each system that has
elected must-carry status, but that is not being carried because of signal quality problems or
potential copyright liability, Schedule 4.08(f) lists the signal and the reason for non-carriage.
(g) The Company has delivered to Acquiror true, correct, and complete
specimen copies of(i) all FCC Forms 393, 1200, 1205, 1210, 1215 and 1220s that have been
prepared with respect to the systems, (ii) all material correspondence with any governmental
body, subscriber, or other interested party relating to rate regulation generally or specific rates
charged to subscribers of the systems, including, without limitation, any complaints filed with
the FCC with respect to any rates charged to subscribers of the systems, and (iii) any
documentation supporting an exemption from the rate regulation provisions of the
Communications Act claimed by the Company or a Cable Subsidiary or Cable Partnership with
respect to the systems. Schedule 4.08(g) sets forth (i) a list of all rate complaints filed pursuant
to the Communications Act and received by the Company or any Cable Subsidiary or Cable
Partnership which have not been deemed invalid by the FCC, and further sets forth those
Franchises that have been certified or, to the Company's knowledge, filed for certification under
the Communications Act with respect to rate regulation and (ii) a list of all letters of inquiry
from the FCC received by the Company or any Cable Subsidiary or Cable Partnership since
September 1, 1993 with regard to rate restructuring.
(h) Beginning with the first accounting period of 1992, the Cable Subsidiaries
and Cable Partnerships have filed all material copyright notices and reports required to be filed
by Section 111 of the Copyright Act of 1976, as amended (the "Copyright Act"), and have paid
-20-
all material fees required to be paid pursuant to Section 111 of the Copyright Act and the rules
and regulations of the United States Copyright Office with respect to the operation of each cable
television system owned or operated by them. None of the Company, SHE, any Cable
Subsidiary or any Cable Partnership has received any written notice from the United States
Copyright Office, or any other Person, either challenging any copyright filing or payment made
by such party or alleging a failure by such party to make any copyright filing or payment, or
threatening to bring suit for copyright infringement.
4.09 Title to Properties; Encumbrances. The Cable Subsidiaries and the Cable
Partnerships are the exclusive holders of all rights in or to all real and personal. tangible and
intangible property and assets of the Company or its Subsidiaries (other than any such assets held
by the.Company or its Subsidiaries pursuant to leases or licenses with a Person other than the
Company or another of its Subsidiaries) used or useful in the ownership and operation of the
cable television systems owned or operated by Cable, and (b) each Cable Subsidiary or Cable
Partnership has good and valid title to its respective assets, free and clear of all defects and
Liens except: (i) materialmen's, mechanics', carriers'. workmen's, warehousemen's.
repairmen's, or other like Liens arising in the ordinary course of business, or deposits to obtain
the release of such Liens; (ii) Liens for current taxes not yet due and payable. and (iii) Liens
or minor imperfections of title that do not interfere with the use or detract from the value of
such property and taken in the aggregate do not have a Material Adverse Effect on Cable.
Except as would not result in any Material Adverse Effect on Cable, each Cable Subsidiary and
Cable Partnership owns or has the lawful right to use all assets, properties, operating rights,
easements, contracts, leases, and other instruments necessary to operate its business lawfully and
to maintain the same as presently conducted.
4.10 Litigation. There is no suit, action, proceeding or investigation pending against
or, to the knowledge of the Company, threatened against or affecting any Cable Subsidiary or
Cable Partnership (except for proceedings or investigations affecting the cable television industry
generally) that, individually or in the aggregate, would reasonably be expected to have a
Material Adverse Effect on Cable; nor is there any judgment, decree, inquiry, rule or order
outstanding against any Cable Subsidiary or Cable Partnership which, individually or in the
aggregate, have had any such effect or insofar as can reasonably be foreseen, would have any
such effect in the future.
4.11 Employee Benefit Plan Matters.
(a) Cable Employee Plans and Cable Benefit Arrangements. Schedule 4.11(a)
lists each Cable Employee Plan and Cable Benefit Arrangement. The Company has delivered
to Acquiror with respect to each Cable Employee Plan and Cable Benefit Arrangement sponsored
by the Company, SHE or any of their ERISA Affiliates true and complete copies of(i) all written
documents comprising such plans and arrangements (including amendments and individual, trust
or insurance agreements relating thereto); (ii) the most recent Federal Form 5500 series
(including all schedules thereto) filed with respect to each Cable Employee Plan; (iii) the most
recent financial statements and actuarial reports, if any, pertaining to each such plan or
arrangement; and (iv) the summary plan description currently in effect and all material
-21-
modifications thereto, if any, for each such Cable Employee Plan. No Cable Employee Plan
is a Multiemployer Plan.
(b) Multiemployer Plans.
(i) Neither the Company, SIB nor any of their ERISA Affiliates has
incurred any unsatisfied withdrawal liability, within the meaning of Section 4201 of
ERISA, with respect to any Multiemployer Plan to which the Company, SHI or any of
their ERISA Affiliates is required to make or accrue a contribution (or has within the six
year period preceding the Closing Date been required to make or accrue a contribution),
nor is the Company, SHE or any of their ERISA Affiliates reasonably expected to incur
any withdrawal liability with respect to any Multiemployer Plan.
(ii) Neither the Company, Sill nor any of their ERISA Affiliates has
been notified by the sponsor of any Multiemployer Plan to which the Company, SHE or
any of their ERISA Affiliates is required to make or accrue a contribution (or has within
the six year period preceding the Closing Date been required to make or accrue a
contribution) that such Multiemployer Plan is in reorganization or has been terminated,
within the meaning of Title IV of ERISA, and to the best knowledge of the Company and
SHI, no such Multiemployer Plan is reasonably expected to be in reorganization or to be
terminated, within the meaning of Tide IV of ERISA.
(iii) None of the Company, SKI or any ERISA Affiliate of any of them
has engaged in or is a successor or parent corporation to an entity that has engaged in
a transaction described in Section 4212(c) of ERISA. If a "complete withdrawal" by the
Company, SHI and all of their ERISA Affiliates were to occur as of the Effective Time
with respect to all of the Multiemployer Plans to which the Company, SHI or any of
their ERISA Affiliates is required to make or accrue a contribution, none of the
Company, SHE or any ERISA Affiliate of any of them would incur any material
withdrawal liability under Tide IV of ERISA.
(c) Union Welfare Funds. Neither the Company, SHE nor any of their ERISA
Affiliates has incurred any unsatisfied liability based on withdrawal from any union-sponsored
multiemployer welfare benefit fund maintained pursuant to any Welfare Plan to which the
Company, SHI or any of their ERISA Affiliates contributes pursuant to the terms of a collective
bargaining agreement.
(d) Retiree Welfare Benefits Plans. Except as set forth in Schedule 4.11(d)
and pursuant to the provisions of COBRA, neither the Company, SHE nor any of their ERISA
Affiliates maintains any Cable Employee Plan or Company Employee Plan that provides benefits
described in Section 3(1) of ERISA to any former employees or retirees of Cable. Any
disclosure in Schedule 4.11(d) shall indicate the present value of accumulated plan liabilities
calculated in a manner consistent with FAS 106 and actual annual expense for such benefits for
each of the last two years.
(e) Pension Plans. All Company Employee Plans that are Pension Plans
intended to be qualified under Section 401 of the Code are so qualified and have been so
qualified during the period since their adoption: each trust created under any such Plan is exempt
from tax under Section 501(a) of the Code and has been so exempt since its creation. A true
and correct copy of the most recent determination letter from the Internal Revenue Service (the
"IRS") regarding such qualified status for each such Plan has been, or within five days following
the date of this Agreement will be. delivered to Acquiror.
(1) Prohibited Transactions and Fiduciary Responsibility. Except with respect
to any Prohibited Transaction relating to any Multiemployer Plan where such Prohibited
Transaction has no relation to the Company, SHI or any of their Subsidiaries, none of the
Company Employee Plans has participated in, engaged in or been a party to any Prohibited
Transaction which could result in the imposition of a material liability upon the Company, SHI
or any of their Subsidiaries. To the knowledge of the Company and SHI, no officer, director
or employee of the Company, SHI or any of their Subsidiaries has committed a material breach
of any responsibility or obligation imposed upon fiduciaries by Title I of ERISA with respect
to any Company Employee Plan.
(g) Reporting and Disclosure. Except with respect to any violation relating
to any Multiemployer Plan where such violation has no relation to the Company, SHE or any of
their ERISA Affiliates, there are no material violations of any reporting or disclosure
requirements under ERISA with respect to 2.ry Company Employee Plan.
(h) Funding Obligations. No Company Employee Plan that is a Pension Plan
subject to Title IV of ERISA (other than any Multiemployer Plan) has (i) incurred an
Accumulated Funding Deficiency, whether or not waived, (ii) an accrued benefit obligation that
exceeds the assets of the plan by more than $50,000, determined as of the last applicable annual
valuation date, using the actuarial methods, factors and assumptions used for the most recent
actuarial report with respect to such plan, (iii) been a plan with respect to which a Reportable
Event has occurred other than a Reportable Event that would not have a Material Adverse
Effect, or (iv) been a plan with respect to which any termination liability to the PBGC has been
or is reasonably expected to be incurred or with respect to which there exist conditions or events
which have occurred presenting a significant risk of termination by the PBGC. Neither the
Company, SHE or any ERISA Affiliate of either of them has engaged in, or is a successor or
parent corporation to an entity that has engaged in a transaction described in Section 4069 of
ERISA.
(i) Liens and Penalties. Neither the Company, SHI nor any of their ERISA
Affiliates has any liability with respect to any Company Employee Plan (i) for the termination
of any Company Employee Plan that is a single employer plan under ERISA Section 4062 or
a multiple employer plan under ERISA Section 4063, (ii) for any lien imposed under Section
302(f) of ERISA or Section 412(n) of the Code, (iii) for any interest payments required under
Section 302(e) of ERISA or Section 412(m) of the Code, (iv) for any excise tax imposed by
Sections 4971, 4972, 4974, 4975, 4976, 4977, 4978, 4978B, 4979, 4979A, 4980 or 4980B of
the Code, or (v) for any failure to make any minimum funding contributions under Section 302
(c)(11) of ERISA or Section 412(c)(11) of the Code. None of the Company, SHE or any ERISA
-23-
Affiliate of either of them has incurred, or reasonably expects to incur prior to the Effective
Time any liability under Title IV of ERISA arising in connection with the termination of any
plan covered or previously covered by Title IV of ERISA.
(j) COBRA. The Company, SHE and their ERISA Affiliates have complied
in all material respects with the provisions of COBRA with respect to all Cable Employee Plans
that are Group Health Plans.
(k) Additional Benefits. No Cable Employee shall accrue or receive additional
benefits. service or accelerated rights to payments of benefits under any Company Plan,
including the right to receive any parachute payment, as defined in Section 280G of the Code,
or become entitled to severance, termination allowance or similar payments as a result of the
transactions contemplated by this Agreement. No Cable Employee is covered by any severance.
termination, allowance or similar plan or program (whether or not written).
(I) Claims. Other than claims for benefits in the ordinary course, there is no
claim pending, or to the knowledge of the Company or SHI threatened, involving any Company
Plan by any person against such plan or the Company, SHI or any of their Subsidiaries. There
is no pending, or to the knowledge of the Company or SHE threatened. proceeding involving any
Company Employee Plan before the iRS, the United States Department of Labor or any other
governmental authority.
(m) Compliance with Laws; Contributions. Each Company Plan and Company
Benefit Arrangement has at all times prior hereto been maintained in all material respects, by
its terms and in operation, in accordance with all applicable laws. The Company, SHI and their
ERISA Affiliates have made full and timely payment of all amounts required to be contributed
under the terms of each Company Plan and applicable law or required to be paid as expenses
under such Company Plan, and the Company, SHI and their ERISA Affiliates shall continue to
do so through the Closing, except as the Company, SHI and Acquiror may otherwise agree.
4.12 Labor Matters.
(a) Except as set forth on Schedule 4.12(a), no Cable Subsidiary or Cable
Partnership is party to any employment contract with any employee or any labor or collective
bargaining agreement and there are no labor or collective bargaining agreements which pertain
to employees of any Cable Subsidiary or Cable Partnership. All employees of Cable serve at
will.
(b) Except as set forth on Schedule 4.12(b), (i) no employees of any of the
Cable Subsidiaries or Cable Partnerships are represented by any labor organization and (ii) as
of the date hereof, no labor organization or group of employees of any of the Cable Subsidiaries
or Cable Partnerships has made a pending demand for recognition or certification, and there are
no representation or certification proceedings or petitions seeking a representation proceeding
presently pending or, to the knowledge of the Company, threatened to be brought or filed, with
the NLRB or any other labor relations tribunal or authority. To the knowledge of the Company,
-24-
there are no formal organizing activities involving a material number of employees of the Cable
Subsidiaries or Cable Partnerships pending with, or threatened by, any labor organization.
(c) Except as would not result in a Material Adverse Effect on Cable, (i) there
are no strikes, work stoppages, slowdowns. lockouts. material arbitrations or material grievances
or other material labor disputes pending or. to the knowledge of the Company, threatened
against or involving any of the Cable Subsidiaries or Cable Partnerships and (ii) there are no
unfair labor practice charges, grievances or complaints pending or, to the knowledge of the
Company, threatened by or on behalf of any employee or group of employees of any of the
Cable Subsidiaries or Cable Partnerships.
4.13 Mid-Tennessee Acquisition. Broadcasting has entered into the Mid-Tennessee
Agreement with Mid-Tennessee Cable Limited Partnership, a Tennessee limited partnership
("Mid-Tennessee"), pursuant to which Broadcasting has agreed, on the terms and subject to the
conditions set forth therein, to acquire the assets of Mid-Tennessee used in Mid-Tennessee's
Athens. Tennessee cable cluster, its Greenbrier. Tennessee cable cluster and its Harriman.
Tennessee cable cluster (collectively, the "Mid-Tennessee Business"). To the knowledge of the
Company and SHE based solely on information provided to the Company and SHI to date by
Mid-Tennessee, the Franchises comprising the Mid-Tennessee Business have an aggregate of
approximately 33,850 Basic Subscribers. The Company has delivered to Acquiror a draft of the
Mid-Tennessee Agreement which is not different than the Mid-Tennessee Agreement in any
material respect.
4.14 Environmental Matters. (a) There are no Environmental Liabilities of Cable that
have had or may reasonably be expected to have a Material Adverse Effect on Cable.
(b) There has been no environmental assessment investigation, study, audit, test,
review or other analysis conducted of which the Company has knowledge in relation to the
current or prior business of the Cable Subsidiaries or Cable Partnerships or any property or
facility now or previously owned or leased by the Cable Subsidiaries or Cable Partnerships
which has not been delivered to Acquiror prior to the date hereof.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF ACQUIROR
Acquiror represents and warrants to the Company and SHE as follows:
5.01 Organization and Authority. Acquiror is a corporation duly organized, validly
existing and in good standing under the laws of its state of incorporation. Acquiror has ail
requisite corporate power and authority to own, lease and operate its properties and to carry on
its business as now being conducted, except where the failure to have such power or authority
would not have a Material Adverse Effect on Acquiror and its Subsidiaries taken as a whole.
Acquiror has all requisite corporate power and authority to execute and deliver this Agreement
and to consummate the transactions contemplated hereby. Subject to the items referred to in
-25-
Section 5.03, all necessary action, corporate or otherwise. required to have been taken by or on
behalf of Acquiror by applicable law, its charter documents or otherwise to authorize (i) the
approval, execution and delivery on behalf of it of this Agreement and (ii) the performance by
it of its obligations under this Agreement and the consummation of the transactions contemplated
hereby has been taken, except that this Agreement must be approved by the stockholders of
Acquiror and the Board of Directors of Acquiror must increase the size of such Board and elect
the designee(s) of the Trust to fill the vacancy or vacancies so created. This Agreement and
each other Transaction Agreement to which Acquiror is or will be a party constitutes or will
constitute, as the case may be. a valid and binding agreement of Acquiror, enforceable against
it in accordance with its terms, subject to (i) the Enforceability Exceptions and (ii) in the case
of the Board Representation Agreement, to the Rules and Regulations regarding cross-ownership
of cable television systems and television stations, to the extent that such Rules and Regulations
may prohibit the Trust from designating a director or observer on the Comcast Board of
Directors. Acquiror has delivered to the Company true and complete copies of its Articles of
Incorporation and Bylaws as in effect on the date hereof.
5.02 No Breach. The execution and delivery of this Agreement by Acquiror do not
and the consummation of the transactions contemplated hereby by Acquiror will not (i) violate
or conflict with its Articles of Incorporation or Bylaws or (ii) constitute a breach or default (or
an event which with notice or lapse of time or both would become a breach or default) of, or
give rise to any third-party right of termination, cancellation, modification or acceleration under,
or otherwise require notice or approval under, any agreement, understanding or undertaking to
which Acquiror or any of its Subsidiaries is a party or by which any of them is bound, or give
rise to any Lien on any of their properties, except where such breach, default, Lien, third-party
right, cancellation, modification or acceleration would not have a Material Adverse Effect on
Acquiror and its Subsidiaries taken as a whole or materially interfere with or delay the
transactions contemplated hereby, or (iii) subject to obtaining the approvals and making the
filings described in Section 5.03 hereof, constitute a violation of any statute, law, ordinance,
rule, regulation, judgment, decree, order or writ of any judicial. arbitral, public, or
governmental authority having jurisdiction over Acquiror or any of its Subsidiaries or any of
their respective properties or assets, except as would not have a Material Adverse Effect on
Acquiror and its Subsidiaries taken as a whole. Neither Acquirer nor any of its Subsidiaries is
a party to or bound by any agreement that restricts or purports to restrict the ability of any of
them or any affiliate of them to engage in any location in the business of cable television, except
for such restrictions that would not have a Material Adverse Effect on Acquiror and its
Subsidiaries taken as a whole or materially interfere with or delay the transactions contemplated
hereby.
5.03 Consents and Approvals. Neither the execution and delivery of this Agreement
by Acquiror nor the consummation of the transactions contemplated hereby by Acquiror will
require any consent, approval, authorization or permit of, or filing with or notification to, any
governmental or regulatory authority, except (i) for filings required under the Securities Act, (ii)
for filings required under the Exchange Act, (iii) for filings required under state securities or
"blue sky" laws, (iv) for notification pursuant to the HSR Act and expiration or termination of
the waiting period thereunder, (v) for the filing of the Certificate of Merger as set forth in
Article I hereof, (vi) for any waiver, consent or declaratory ruling by the FCC with respect to
-26-
the Rules and Regulations regarding cross-ownership of cable television systems and television
stations, to the extent that such Rules and Regulations may prohibit (A) the Trust from
designating a director or observer on the Comcast Board of Directors or (B) Brian Roberts from
serving on the Board of Directors of Turner Broadcasting Company and (vii) where the failure
to obtain such consents, approvals, authorizations or permits. or to make such filings or
notifications, would not have a Material Adverse Effect on Acquiror and its Subsidiaries taken
as a whole or prevent Acquiror from performing its obligations under this Agreement without
having a Material Adverse Effect on Acquiror and its Subsidiaries taken as a whole or materially
interfere with or delay the transactions contemplated hereby.
5.04 Approval of the Board; Vote Required. The Board of Directors of Acquiror has,
by resolutions duly adopted at a meeting duly called and held, unanimously approved and
adopted this Agreement, the Merger and the other transactions contemplated hereby on the
material terms and conditions set forth herein. The affirmative vote or action by written consent
of a majority of the votes that holders of the outstanding shares of Acquiror A Stock, Acquiror
B Stock and Acquiror Common Stock are entitled to cast voting as a single class is the only vote
of the holders of any class or series of the capital stock of Acquiror necessary to approve this
Agreement and the Merger under applicable law and the Articles of Incorporation of Acquiror
or the By-Laws of Acquiror.
5.05 Capitalization.
(a) As of the date hereof, the authorized capital stock of Acquiror consists of:
200,000,000 shares of Class A Common Stock, par value $1.00 per share("Acquiror A Stock"),
500.000,000 Shares of Class A Special Common Stock, par value $1.00 per share ("Acquiror
Common Stock"), 50,000,000 Shares of Class B Common Stock, par value $1.00 per share
("Acquiror B Stock"), and 20,000,000 Shares of Preferred Stock ("Acquiror Preferred Stock").
As of September 30, 1995, there were issued and outstanding the following shares of such stock:
39,103,350 shares of Acquiror A Stock, 192,028,651 shams of Acquiror Common Stock and
8,786,250 shares of Acquiror B Stock. All such outstanding shares are duly authorized, validly
issued and fully paid and nonassessable. There are no preemptive or other similar rights
available to the existing holders of the capital stock of Acquiror. As of the date hereof, and
other than as set forth on Schedule 5.05(a) and in connection with the transactions contemplated
by this Agreement, there are no outstanding options, warrants, rights, puts, calls, commitments,
or other contracts, arrangements, or understandings issued by or binding upon Acquiror or any
of its Subsidiaries requiring, and there are no outstanding debt or equity securities of Acquiror
or any of its Subsidiaries which upon the conversion, exchange or exercise thereof would require
the issuance, sale or transfer by Acquiror of any new or additional equity interests in Acquiror
(or any other securities of Acquiror or any of its Subsidiaries which, with notice, lapse of time
or payment of monies, are or would be convertible into or exercisable or exchangeable for
equity interests in Acquiror). Except as described on Schedule 5.05(a), there are no voting
trusts or other agreements or understandings to which Acquiror or any of its Subsidiaries is a
party with respect to the voting of capital stock of Acquiror.
-27-
(b) The shares of Acquiror Common Stock to be issued in the Merger, upon
their issuance in accordance with the terms hereof, will be duly authorized, validly issued, fully
paid and nonassessable.
5.06 SEC Reports. Acquiror has filed all required forms, reports and documents with
the SEC since January 1, 1993 (collectively, "Acquiror's SEC Reports") and delivered or made
available to the Company copies thereof. Acquiror's SEC Reports have complied in all material
respects with all applicable requirements of the Securities Act and the Exchange Act. As of
their respective dates, none of the Acquiror's SEC Reports. including, without limitation, any
financial statements or schedules included or incorporated by reference therein, contained any
untrue statement of a material fact or omitted to state a material fact required to be stated or
incorporated by reference therein or necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading.
5.07 Financial Statements. The (i) audited consolidated financial statements of
Acquiror contained in Acquiror's Annual Report on Form 10-K for the year ended December
31, 1994, and (ii) unaudited condensed consolidated financial statements of Acquiror contained
in Acquiror's Quarterly Report on Form 10-Q for the six months ended June 30, 1995
("Acquiror's Form 10-Q"), were prepared in accordance with GAAP and present fairly in all
material respects Acquiror's consolidated financial position and the results of its consolidated
operations and its consolidated cash flows as of the relevant dates thereof and for the periods
covered thereby (subject to normal year-end adjustments in the case of the unaudited interim
financial statements).
5.08 Absence of Certain Changes. Since the date of the balance sheet of Acquiror
included in Acquiror's Form 10-Q, there has not been any (i) material adverse change in the
financial position, liabilities, assets or business of Acquiror and its Subsidiaries taken as a whole
except for material adverse changes due to general economic or industry-wide conditions, or (ii)
other events or conditions of any character that, individually or in the aggregate, have or would
reasonably be expected to have a Material Adverse Effect on the financial position, liabilities,
assets or business of Acquiror and its Subsidiaries taken as a whole or on the ability of Acquiror
to perform its material obligations under this Agreement and the Transaction Agreements to
which it is or will be a party.
5.09 Brokers and Finders. Neither Acquiror nor any of its officers, directors,
employees or affiliates has employed any investment banker, broker or fmder or incurred any
liability for any brokerage fees, commissions or finder's fees in connection with the transactions
contemplated herein, except that Acquiror has employed Lehman Brothers Inc. as its financial
advisor in connection with the transactions contemplated hereby and for whose fees and expenses
Acquiror is responsible.
5.10 Full Disclosure. All of the statements made by Acquiror in this Agreement
(including, without limitation, the representations and warranties made by Acquiror herein and
in the schedules and exhibits hereto which are incorporated by reference herein and which
constitute an integral part of this Agreement) do not (and on the Closing Date will not) include
or contain any untrue statement of a material fact, and do not (and on the Closing Date will not)
-23-
omit to state any material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made. not misleading.
5.11 Certain Tax Matters. Acquiror is not, and on the Closing Date will not be. an
investment company within the meaning of Section 368(a)(2)(F)(iii) and (iv) of the Internal
Revenue Code.
ARTICLE VI
OTHER AGREEMENTS
'6.01 No Solicitation.
(a) Neither the Company nor any of its Subsidiaries, nor any of its or their
officers, directors, representatives or agents shall, directly or indirectly, knowingly encourage.
solicit, initiate or, except as otherwise provided in this Section 6.01(a), participate in any way
in discussions or negotiations with or knowingly provide any confidential information to, any
corporation, partnership, person or other entity or group (other than Acquiror or any affiliate
or associate of Acquiror and their respective directors, officers, employees, representatives and
agents) concerning any merger of the Company or Cable, the sale of any substantial part of the
assets of Cable, the sale of shares of the capital stock of the Company, the capital stock of the
Cable Subsidiaries or the interests in the Cable Partnership or similar transactions involving
Cable; provided, however, that nothing contained in this Section 6.01(a) shall prohibit the Board
of Directors of the Company from (i) taking and disclosing to the Company's stockholders a
position with respect to a tender offer for Company Common Stock by a third party pursuant
to Rules 14d-9 and 14e-2 promulgated under the Exchange Act, (ii) making such disclosure to
the Company's stockholders as, in the judgment of the Board of Directors of the Company, with
the advice of outside counsel, may be required under applicable law, or (iii) responding to any
unsolicited proposal or inquiry by advising the person making such proposal or inquiry of the
terms of this Section 6.01(a). The Company will promptly communicate to Acquiror its receipt
of any proposal or inquiry in respect of any such transaction or its receipt of any request to
provide any such information or hold any such negotiations or discussions, and will furnish
Acquiror with a true and complete copy of any proposal that the Board of Directors of the
Company has determined is a Superior Proposal and will keep Acquiror informed on a timely
basis as to the status of and details regarding negotiations, and the Company's intentions, with
respect thereto. Notwithstanding anything to the contrary set forth herein, the Board of
Directors of the Company may respond to any Superior Proposal and may provide information
to, and negotiate with, any person. group or entity in connection therewith if the Board of
Directors of the Company determines, with the advice of outside counsel, that it may be required
to do so in the exercise of its fiduciary duties. For purposes hereof, "Superior Proposal" means
a bona fide, written, unsolicited proposal relating to a possible transaction described in this
Section 6.01(a) by any person other than Acquiror that, in the reasonable good faith judgment
of the Board of Directors of the Company, with the advice of outside financial advisers, is
reasonably likely to be consummated and is more favorable to the stockholders of the Company
than the terms of the transactions contemplated by this Agreement.
-29-
(b) Acquiror will promptly notify the Company and provide it with pertinent
information in the event that Acquiror or any of its Subsidiaries, or any of its or their officers,
directors. representatives or agents (i) solicits. initiates or participates in any way in discussions
or negotiations with, or provides any confidential information to, any corporation. partnership,
person or other entity or group (other than the Company or any affiliate or associate of the
Company and their respective directors, officers, employees, representatives and agents)
concerning any merger, sale of substantially all of the assets, or sale of shares of the capital
stock of Acquiror, or similar transaction involving Acquiror, or (ii) receives any proposal or
inquiry in respect of any such transaction or any request to provide any such information or hold
any such negotiations or discussions.
6.02 Conduct of Business of the Company. Except as contemplated by this Agreement,
during'the period from the date hereof to the Closing Date, the Company shall conduct its
operations in the ordinary course of business consistent with past practices and shall not without
the prior written consent of Acquiror:
(a) amend its Certificate of Incorporation or Bylaws;
(b) declare, set aside or pay any dividend or other distribution (whether
in cash, stock or property or any combination thereof) in respect of its capital
stock, except for dividends declared and paid consistent with the Company's past
practice (except that (i) any Subsidiary of the Company other than a Cable
Subsidiary or a Cable Partnership may declare and pay dividends that are payable
to the Company or to any other Subsidiary of the Company and (ii) any Cable
Subsidiary or Cable Partnership may declare and pay dividends in cash and cash
equivalents that are payable to the Company or to any other Subsidiary of the
Company), or redeem or otherwise acquire any of its securities;
(c) split, combine or reclassify any of its capital stock or issue or
authorize the issuance of any other securities in respect of, in lieu of or in
substitution of any shares of its capital stock;
(d) (i) create, incur or assume any indebtedness not currently
outstanding (including obligations in respect of capital leases), (ii) assume,
guarantee, endorse or otherwise become liable or responsible (whether directly,
contingently or otherwise) for the obligations of any other person except to the
extent the Company is released therefrom as described in Section 2.02 or (iii)
make any loans, advances or capital contributions to, or investments in, any
person other than a Subsidiary;
(e) except pursuant to the Incentive Plan and the Directors Plan, or
options or awards outstanding thereunder, issue, sell, deliver or agree or commit
to issue, sell or deliver (whether through the issuance or granting of options,
warrants, commitments, subscriptions, rights to purchase or otherwise) any stock
of any class or any other securities or amend any of the terms of any securities
outstanding on the date hereof; or
-30-
(t) terminate, amend, modify'or waive compliance with any of the
terms or conditions of the Contribution Agreement directly or indirectly
respecting the Retained Assets or the Retained Liabilities or affecting the rights
or obligations of the Company thereunder from and after the Effective Time.
(g) take, or agree in writing or otherwise to take, any of the foregoing
actions or any actions that would (i) subject to Section 7.06 hereof, make any
representation or warranty of the Company or SHE contained in this Agreement
materially untrue or incorrect as of the date when made or as of the Closing Date,
(ii) result in any of the conditions to Closing in Article VII of this Agreement not
being satisfied or (iii) subject to Section 7.06 hereof, be materially inconsistent
with the terms of this Agreement or the transactions contemplated hereby.
6.03 Conduct of Business of Cable. Except as contemplated by this Agreement. during
the period from the date hereof to the Closing Date, the Company shall cause the Cable
Subsidiaries and Cable Partnerships to conduct their operations according to the ordinary and
usual course of business consistent with past practices. Without limiting the generality of the
foregoing, except as otherwise contemplated by this Agreement, without the prior written
consent of Acquiror. the Company shall not permit any of the Cable Subsidiaries or Cable
Partnerships to:
(a) amend its charter or bylaws or partnership agreement;
(b) issue, sell, deliver or agree or commit to issue, sell or deliver
(whether through the issuance or granting of options, warrants, commitments.
subscriptions, rights to purchase or otherwise) any stock of any class or any other
securities or partnership interests or amend any of the terms of any securities
outstanding on the date hereof;
(c) acquire, sell, lease or dispose of any assets material to Cable, other
than (i) sales of inventory and equipment in the ordinary and usual course of
business consistent with past practice, (ii) the acquisition of assets related to the
Mid-Tennessee Business in accordance with Section 6.26, (iii) in connection with
the proposed joint venture with Hyperion Telecommunications of Tennessee, Inc.,
a Delaware corporation in accordance with Section 6.29 and (iv) the acquisition
of the River City Interest in accordance with Section 6.28;
(d) mortgage, pledge or subject to any lien, lease, security interest or
other charge or encumbrance, any of its properties or assets, tangible or
intangible, material to Cable;
(e) fail to make Ordinary Course Expenditures on property, plant and
equipment;
(f) without the consent of Acquiror, which shall not be withheld or
delayed unreasonably, (i) except as required by applicable law or as disclosed in
-31-
writing to Acquiror prior to the date hereof, implement any rate change, retiering
or repackaging of cable television programming offered by Cable, (ii) except as
disclosed in writing to Acquiror prior to the date hereof, make any cost-of-service
or hardship election under the Rules and Regulations adopted under the Cable
Television Consumer Protection and Competition Act of 1992, or(iii) amend any
Franchise or make or agree to make any payments or commitments. including
commitments to make future capital improvements or provide future services. in
connection with obtaining any authorization, consent, order or approval of any
governmental authority necessary for the transfer of control of any Franchise:
(g) increase the amount of any cash compensation payable to any
. employee if such increase would be inconsistent with past practices or would
cause the aggregate cash compensation payable to all employees on an annualized
basis to exceed by more than 5% percent the cash compensation payable by Cable
to all employees on an annualized basis as of June 30. 1995 (provided that this
Section 6.03(g) shall not apply with respect to stay bonuses paid to Cable
employees prior to Closing);
(h) declare, set aside or pay any dividend or other distribution (whether
in cash. stock or property or any combination thereof) in respect of its capital
stock, or redeem or otherwise acquire any of its securities, except as provided in
Section 6.25:
(i) fail to maintain inventory at customary levels; or
(j) take, or agree in writing or otherwise to take, any of the foregoing
actions or any actions that would (i) subject to Section 7.06 hereof, make any
representation or warranty of the Company or SHI contained in this Agreement
materially untrue or incorrect as of the date when made or as of the Closing Date.
(ii) result in any of the conditions to Closing in Article VIE of this Agreement not
being satisfied or (iii) subject to Section 7.06 hereof, be materially inconsistent
with the terms of this Agreement or the transactions contemplated hereby.
6.04 Conduct of Business of Acquiror. Except as contemplated by this Agreement.
during the period from the date hereof to the Closing Date, (a) Acquiror will not amend its
Articles of Incorporation in any manner that requires a class vote of the Acquiror Common
Stock except that Acquiror may amend its Articles of Incorporation as provided in Schedule 6.04
(the "Permitted Amendments") and (b) neither Acquiror nor any of its Subsidiaries will, without
the prior written consent of the Company, take, or agree in writing or otherwise to take. any
actions that would (i) subject to Section 7.05, make any representation or warranty of Acquiror
contained in this Agreement materially untrue or incorrect as of the date when made or as of the
Closing Date, (ii) result in any of the conditions to Closing in Article VIE of this Agreement not
being satisfied or (iii) subject to Section 7.05, be materially inconsistent with the terms of this
Agreement or the transactions contemplated hereby.
-32-
6.05 Access to Information. Between.the date of this Agreement and the Effective
Time. (a) the Company will (i) give Acquiror and its authorized representatives reasonable
access, during regular business hours upon reasonable notice, to all offices. warehouses and
other facilities of the Company and its Subsidiaries and to all books and records of the Company
and its Subsidiaries, (ii) permit Acquiror to make such reasonable inspections of the offices.
warehouses, facilities, books and records described in clause (i) as it may require. (iii) cause its
officers and those of its Subsidiaries to furnish Acquiror with such financial and operating data
and other information with respect to the business and properties of the Company and Cable as
Acquiror may from time to time reasonably request and (iv) permit Acquiror to conduct, at
Acquiror's expense environmental tests and assessments and (b) Acquiror will keep the Company
informed as to material developments affecting Acquiror and its Subsidiaries. All such access
and information obtained by Acquiror and its authorized representatives shall be subject to the
terms and conditions of the letter agreement between the Company and Acquiror dated July 19.
1995 (the "Confidentiality Agreement"). All such information obtained by the Company and
its authorized representatives, and, after the Closing, all other information regarding Cable
which Sill or any of its Subsidiaries possesses or has access to (including pursuant to Section
6.18), shall be treated in accordance with the terms of the Confidentiality Agreement as if such
agreement obligated such Persons to hold such information confidential on the same basis as set
forth therein mutatis mutandis and Acquiror were a beneficiary of such obligations.
6.06 SEC Filings.
(a) The Company, Sill and Acquiror shall prepare jointly and as soon as
practicable after the date of this Agreement file with the SEC a joint proxy statement/registration
statement (the "Preliminary Joint Proxy Statement/Prospectus") comprising preliminary proxy
materials of the Company and Acquiror under the Exchange Act with respect to the Merger and
Registration Statements on Form S-4 and preliminary prospectuses of Sill and Acquiror under
the Securities Act with respect to the Acquiror Common Stock to be issued in the Merger and
the Sill Common Voting Shares and the Sill Class A Common Shares to be issued in connection
with the Contribution and the Distribution, and will thereafter use their respective best efforts
to respond to any comments of the SEC with respect thereto and to cause a definitive joint proxy
statement/registration statement (including all supplements and amendments thereto, the "Joint
Proxy Statement/Prospectus") and proxy to be mailed to the Company's and Acquiror's
stockholders as promptly as practicable.
(b) As soon as practicable after the date hereof, the Company, Sill and
Acquiror shall prepare and file any other filings required to be filed by each under the Exchange
Act or any other federal or state laws relating to the Merger, the Contribution and the
Distribution, and the other transactions contemplated hereby (collectively "Other Filings"),
including, without limitation, in the case of SHI, a registration statement on Form 8-A under the
Exchange Act with respect to the SHI Common Shares, and will use their best efforts to respond
to any comments of the SEC or any other appropriate government official with respect thereto.
(c) The Company and Siff, on the one hand and Acquiror, on the other, shall
cooperate with each other and provide to each other all information necessary in order to prepare
the Preliminary Joint Proxy Statement/Prospectus, the Joint Proxy Statement/Prospectus and the
-33-
Other Filings (collectively "SEC Filings") and `shall provide promptly to the other party any
information that such party may obtain that could necessitate amending any such document.
(d) The Company and Acquiror will notify the other party promptly of the
receipt of any comments from the SEC or its staff or any other government official and of any
requests by the SEC or its staff or any other government official for amendments or supplements
to any of the SEC Filings or for additional information and will supply the other party with
copies of all correspondence between the Company or any of its representatives, Sill or any of
its representatives, or Acquiror and any of its representatives, as the case may be, on the one
hand, and the SEC or its staff or any other government official, on the other hand, with respect
thereto. If at any time prior to the Effective Time, any event shall occur that should be set forth
in an amendment of, or a supplement to, any of the SEC Filings, the Company, SHI and
Acquifor agree promptly to prepare and file such amendment or supplement and to distribute
such amendment or supplement as required by applicable law, including, in the case of an
amendment or supplement to the Joint Proxy Statement/Prospectus, mailing such supplement or
amendment to the Company's and Acquiror's stockholders.
(e) The information provided and to be provided by the Company, SHE and
Acquiror for use in SEC Filings shall at all times prior to the Effective Time be true and correct
in all material respects and shall not omit to state any material fact required to be stated therein
or necessary in order to make such information not false or misleading, and the Company, SHE
and Acquiror each agree to correct any such information provided by it for use in the SEC
Filings that shall have become false or misleading. Each SEC Filing, when filed with the SEC
or any government official, shall comply in all material respects with all applicable requirements
of law.
(f) Acquiror shall indemnify, defend and hold harmless the Company and SHE,
each of their officers and directors and each other person, if any, who controls any of the
foregoing within the meaning of the Exchange Act, against any losses, claims, damages or
liabilities, joint or several, to which any of the foregoing may become subject under the
Securities Act or the Exchange Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon (i) an untrue statement
or alleged untrue statement of a material fact contained in any SEC Filing or (ii) the omission
or alleged omission to state a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were made, not
misleading,provided that Acquiror was responsible for such misstatement or omission, and upon
request from time to time Acquiror shall reimburse the Company, SIR and each such officer,
director and controlling person for any legal or any other expenses reasonably incurred by any
of them in connection with investigating or defending any such loss, claim, damage. liability or
action or enforcing this indemnity.
(g) Sill (and, if this Agreement is terminated prior co the consummation of
the Merger, the Company, jointly and severally with SHE) shall indemnify, defend and hold
harmless Acquiror, each of its officers and directors and each other person, if any, who controls
any of the foregoing within the meaning of the Exchange Act, against any losses, claims,
damages or liabilities,joint or several, to which any of the foregoing may become subject under
-34-
the Securities Act or the Exchange Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon (i) an untrue statement
or alleged untrue statement of a material fact contained in any SEC Filing or (ii) the omission
or alleged omission to state a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were made, not
misleading, provided that the Company or SHI was responsible for such misstatement or
omission, and upon request from time to time SHI (and. if this Agreement is terminated prior
to the consummation of the Merger, the Company) shall reimburse Acquiror and each such
officer, director and controlling person for any legal or any other expenses reasonably incurred
by any of them in connection with investigating or defending any such loss, claim, damage.
liability or action or enforcing this indemnity.
(h) For the purpose of this Section 6.06, the term "Indemnifying Party" shall
mean the party having an obligation hereunder to indemnify the other party pursuant to this
Section 6.06. and the term "Indemnified Party" shall mean the party having the right to be
indemnified pursuant to this Section 6.06. Whenever any claim shall arise for indemnification
under this Section 6.06, the Indemnified Party shall promptly notify the Indemnifying Party in
writing of such claim and, when known, the facts constituting the basis for such claim (in
reasonable detail). Failure by the Indemnified Party to so notify the Indemnifying Party shall
not relieve the Indemnifying Party of any liability hereunder except to the extent that such failure
prejudices the Indemnifying Party.
(i) After such notice, if the Indemnifying Party undertakes to defend any such
claim, then the Indemnifying Party shall be entitled, if it so elects, to take control of the defense
and investigation with respect to such claim and to employ and engage attorneys of its own
choice and reasonably acceptable to the Indemnified Party to handle and defend the same, at the
Indemnifying Party's cost, risk and expense, upon written notice to the Indemnified Party of
such election, which notice acknowledges the Indemnifying Party's obligation to provide
indemnification hereunder. The Indemnifying Party shall not settle any third-party claim that
is the subject of indemnification without the written consent of the indemnified Party. which
consent shall not be unreasonably withheld; provided, however, that the Indemnifying Party may
settle a claim without the Indemnified Party's consent if such settlement (i) makes no admission
or acknowledgment of liability or culpability with respect to the Indemnified Party, (ii) includes
a complete release of the Indemnified Party and (iii) does not require the Indemnified Party to
make any payment or forego or take any action or otherwise materially adversely affect the
Indemnified Party. The Indemnified Party shall cooperate in all reasonable respects with the
Indemnifying Party and its attorneys in the investigation, trial and defense of any lawsuit or
action with respect to such claim and any appeal arising therefrom (including the filing in the
Indemnified Party's name of appropriate cross claims and counterclaims). The Indemnified
Party may, at its own cost, participate in any investigation, trial and defense of such lawsuit or
action controlled by the Indemnifying Party and any appeal arising therefrom. If, after receipt
of a notice of claim pursuant to Section 6.06(i), the Indemnifying Party does not undertake to
defend any such claim the Indemnified Party may, but shall have no obligation to, contest any
lawsuit or action with respect to such claim and the Indemnifying Party shall be bound by the
result obtained with respect thereto by the Indemnified Party (including, without limitation, the
settlement thereof without the consent of the Indemnifying Party). If there are one or more legal
-35-
defenses available to the Indemnified Party that conflict with those available to the Indemnifying
Party or there is otherwise an actual or potential conflict of interest, the Indemnified Party shall
have the right, at the expense of the Indemnifying Party, to assume the defense of the lawsuit
or action; provided, however, that the Indemnified Party may not settle such lawsuit or action
without the consent of the Indemnifying Party, which consent shall not be unreasonably
withheld.
(j) If the indemnification provided for in this Section 6.06 shall for any reason
be unavailable to the Indemnified Party in respect of any loss, claim, damage or liability, or
action referred to herein, then the Indemnifying Party shall, in lieu of indemnifying the
Indemnified Party, contribute to the amount paid or payable by the Indemnified Party as a result
of such loss, claim, damage or liability, or action in respect thereof, in such proportion as is
appropriate to reflect the relative fault of the Indemnifying Party on the one hand and the
Indemnified Party on the other with respect to the statements or omissions that resulted in such
loss, claim, damage or liability, or action in respect thereof, as well as any other relevant
equitable considerations. The relative fault shall be determined by reference to whether the
untrue or alleged untrue statement or omission of a material fact related to information supplied
by the Indemnifying Party on the one hand or the Indemnified Party on the other, the intent of
the parties and their relative knowledge, access to information and opportunity to correct or
prevent such statement or omission. The amount paid or payable by the Indemnified Party as
a result of the loss, claim, damage or liability, or action in respect thereof, referred to above
in this paragraph shall be deemed to include, for purposes of this paragraph, any legal or other
expenses reasonably incurred by the Indemnified Party in connection with investigating or
defending any such action or claim or enforcing this provision. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent misrepresentation.
6.07 Reasonable Best Efforts. Subject to the fiduciary duties of the Board of Directors
of the Company, and subject to the other terms and conditions hereof, each of the parties hereto
agrees to 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 laws and
regulations to consummate and make effective the transactions contemplated by this Agreement
in the most expeditious manner practicable, including but not limited to the satisfaction of all
conditions to the Merger and seeking to remove promptly any injunction or other legal barrier
that may prevent or delay such consummation. Each of the parties shall promptly notify the
other whenever a material consent is obtained and shall keep the other informed as to the
progress in obtaining such material consents.
6.08 Public Announcements. No party hereto shall make any public announcements
or otherwise communicate with any news media with respect to this Agreement or any of the
transactions contemplated hereby without such prior consultation with the other parties as to the
timing and contents of any such announcement as may be reasonable under the circumstances;
provided, however, that nothing contained herein shall prevent any party from promptly making
all filings with governmental authorities as may, in its judgment, be required or advisable in
connection with the execution and delivery of this Agreement or the consummation of the
transactions contemplated hereby.
-36-
6.09 Board Recommendations. The Joint Proxy Statement/Prospectus shall include the
recommendations of the Boards of Directors of the Company and Acquiror that their respective
stockholders approve the Merger and related transactions; provided, however, that the Board of
Directors of the Company may modify or withdraw its recommendation if it determines, with
the advice of outside counsel, that it may be required to do so in the exercise of its fiduciary
duties as a result of a Superior Proposal.
6.10 Tax Matters.
(a) SHI Indemnification Obligations.
(i) Company Taxes. SHI shall be liable for, shall pay and shall
indemnify and hold Acquiror and its Subsidiaries harmless, on an After-Tax
Basis, against (A) any Tax of the Company or any Subsidiary of the Company
related to the Tax Indemnification Period and (B) any Restructuring Tax
(including, without limitation, court costs and reasonable professional fees
incurred in the investigation, defense or settlement of any claims covered by this
indemnity). For this purpose, the income attributable to the Pre-Closing Tax
Period shall be determined based on the permanent books and records maintained
for federal income tax purposes and in the case of any Taxes based upon or
related to income, the Taxes attributable to such period shall be the amount that
would be payable if the relevant period ended on the Closing Date; in the case
of any Taxes other than Taxes based upon or related to income, the amount of
Taxes attributable to the Pre-Closing Tax Period shall be calculated by reference
to the number of days in such period ending on the Closing Date as compared to
the total number of days in the entire Taxable period. Except as specifically
provided in this Section 6.10, any Tax Sharing Agreement or policy of the
Company Group shall be terminated at the Effective Time, and the Surviving
Corporation and Cable shall have no obligation under such agreements after the
Effective Time.
(ii) Refunds and Credits of Company Taxes. SHE shall be
entitled to (and shall indemnify and hold harmless Acquiror and its Subsidiaries
against any subsequent disallowance of) any credits or refunds of Taxes of the
Company or any Subsidiary of the Company payable with respect to any Pre-
Closing Tax Period, except that Acquiror shall be entitled to any such credits or
refunds that are reflected as consolidated current assets of Cable for purposes of
the determination of the Cable Net Liabilities Amount.
(iii) Control of Tax Proceedings.
(A) Except as provided in Section 6.10(a)(iii)(C),
the parties agree that SHI shall be designated as the agent for the
Company Group pursuant to Section 1.1502-77(d) of the Treasury
Regulations. With respect to any similar provisions of applicable
state income or franchise tax laws, to the extent permitted by law
-37-
and as requested by Sill SHE shall be designated as the agent for
the Company Group only if the relevant Taxable year ends on or
before the Closing Date and does not include a period ending after
the Closing Date: provided. however, that (1) Sill shall provide
Acquiror with instructions regarding the manner in which such
designation is to be effected and (2) such designation shall not be
made if it results in Sill being designated as the agent of Cable or
Acquiror in any Post-Closing Tax Period.
(B) Whenever any taxing authority asserts a
claim, makes an assessment. or otherwise disputes the amount of
Company Taxes for which Sill is or may be liable, in whole or in
part, under this Agreement. Acquiror shall promptly inform Sill.
SHE shall promptly inform Acquiror of any inquiries from the
Internal Revenue Service or any other taxing authority that relate
to Cable. SHI covenants that it shall not, without Acquirer's
consent, take any action, or omit to take any action, that could
result in an increase the Tax liability of Acquiror or Cable in any
Post-Closing Tax Period. SHI shall indemnify and hold Acquiror
and Cable harmless against any breach of the covenants contained
in the preceding sentence.
(C) If a taxing authority asserts a claim, makes
an assessment or otherwise disputes the amount of the Company
Taxes attributable to Cable (a "Cable Dispute"), Acquiror and Sill
shall immediately inform each other of the Cable Dispute.
Acquiror, at its cost and expense, may, by written notice to SHI,
(1) participate in or (2) elect to control (including the
determination of whether and when to settle) any Cable Dispute.
which election shall be made in writing within 60 days after the
later of (1) the date of the notice transmitted by the taxing
authority describing the Cable Dispute, or (2) in the case of a
notice transmitted by the taxing authority to SHI, the date Sill
informs Acquiror of such Cable Dispute, and shall specify whether
Acquiror is participating in or electing to control the relevant
Cable Dispute. If Acquiror duly elects, as provided herein, to
control a Cable Dispute, it shall have the sole responsibility to
conduct any resulting proceedings, and shall be responsible for,
and shall indemnify Sill, on an After-Tax Basis, against any Taxes
ultimately imposed with respect to such Cable Dispute.
(b) Tax Returns.
(i) SHI shall be responsible, subject to the review of Acquiror,
for the preparation, filing and signing of all Company Consolidated Income Tax
Returns for all taxable periods that end on or before the Closing Date, including
-38-
Tax Returns of the Company Group fbr such periods that are due after the
Closing Date, and of all Cable Tax Returns required to be filed on or before the
Closing Date, and SHE shall be responsible for all Taxes shown to be due
thereon. All such Tax Returns shall be prepared consistently with past practice -
of the Company. SHE and Cable and shall not amend (without Acquiror's consent)
any election that relates to Cable (except to the extent a change is required by
law). SHE shall provide Acquiror with preliminary draft copies of the relevant
portions of such Returns that relate to Cable at least 20 days prior to the due date
for filing (taking into account any applicable extensions). Acquiror shall have the
opportunity to review all such returns (any such review shall not in any way limit
SHI's indemnification obligations hereunder); if Acquiror objects to any matter
relating to Cable reflected in such returns, Acquiror shall inform SHI within 10
• days of receipt of the preliminary draft return. Acquiror and SHI shall resolve
any disputes in good faith. Within thirty days following the filing of Company
Consolidated Income Tax Returns, SHI shall furnish Acquiror with (i) copies of
the relevant portions of such Tax Returns that relate to Cable and (ii) information
concerning (a) the tax basis of the assets of Cable as of the Closing Date: (b) the
earnings and profits of the Company and the Cable Subsidiaries as of the Closing
Date: (c) the Company's tax basis in the Cable Subsidiaries and the Subsidiaries'
tax basis in the Cable Partnerships as of the Closing Date; (d) the net operating
loss carryover, investment tax credit carryover, alternative minimum tax
carryover and the capital loss carryover available, if any, to Acquiror and its
Subsidiaries as of the Closing Date; and (e) all elections with respect to Taxes in
effect for Cable as of the Closing Date. The Company shall provide Acquiror an
estimate of the information listed in (a) through (e) of the preceding sentence as
soon as practicable hereafter but prior to Closing.
(ii) Acquiror shall be responsible for the preparation and filing
of all Cable Tax Returns (other than the Company Consolidated Tax Return)
required to be filed after the Closing Date for Tax periods that end after the
Closing Date.
(iii) As soon as practicable after the date hereof and prior to Closing,
the Company shall provide Acquiror with a schedule of any waivers or extensions of any
applicable statute of limitations relating to the assessment of federal, state or local Taxes
relating to the Company or Cable.
(c) Cooperation. Acquiror and SHI shall cooperate with each other in a timely
manner in the preparation and filing of any Tax Returns, payment of any Taxes in accordance
with this Agreement, and the conduct of any audit or other proceeding. Each party shall execute
and deliver such powers of attorney and make available such other documents as are necessary
to carry out the intent of this Section 6.10. Each party agrees to notify the other party of any
audit adjustments that do not result in tax liability but can reasonably be expected to affect Tax
Returns of the other party.
-39-
(d) Retention of Records. Acquiror and SHE shall each, to the extent
potentially relevant to the other party, (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 the other reasonable access to such records,
documents, accounting data and other information (including computer data) and to its personnel
(insuring their cooperation) and premises. If Acquiror elects to control any Cable Dispute
pursuant to the provisions of Section 6.10(a)(iii)(C) above, Sill shall provide Acquiror with
copies of all relevant books and records that are in the possession of Sill or any Subsidiary of
SM. SHE and Acquiror shall each notify the other party prior to discarding or destroying any
such books and records and shall, upon the other party's request. provide copies of all such
books and records to the other party. Upon Acquiror's request, Sill shall provide Acquiror with
copies of the relevant portions of any Tax Returns for Pre-Closing Tax Periods to the extent
related to Cable.
(e) Payments; Disputes. Except as otherwise provided in this Section 6.10.
any amounts owed by any party ("Indemnitor") to any other party ("Indemnitee") under this
Section 6.10 shall be paid within ten days of notice from the Indemnitee; provided that if the
Indemnitee has not paid such amounts and such amounts are being contested before the
appropriate governmental authorities in good faith, the Indemnitor shall not be required to make
payment until it is determined finally by an appropriate governmental authority that payment is
due. If Acquiror and SKI cannot agree on any calculation of any liabilities under this Section
6.10, such calculation shall be made by any independent public accounting firm acceptable to
both such parties. The decision of such firm shall be final and binding. The fees and expenses
incurred in connection with such calculation shall be borne equally by the disputing parties.
(f) Survival. Notwithstanding anything in this Agreement to the contrary, the
provisions of this Section 6.10 shall survive for the full period of all applicable statutes of
limitations (giving effect to any waiver or extension thereof).
(g) Definitions.
(i) "After-Tax Basis" means, with respect to any payment, an amount
calculated by taking into account the Tax consequences of the receipt of such payment,
as well as any Tax benefit associated with the liability giving rise to the payment.
(ii) "Cable Tax Returns" means any Tax Return of any of the Cable
Subsidiaries.
(iii) "Company Consolidated Income Tax Returns" means any
Tax Return of the Company with respect to Company Consolidated Income
Taxes.
(iv) "Company Consolidated Income Taxes" means the federal
income tax and all applicable state income or franchise taxes of the Company
Group, together with any interest and any penalty, addition to tax or additional
-40-
amount imposed by any governmental authority responsible for the imposition of
any such tax.
(v) "Company Group" means the affiliated group of
corporations, within the meaning of Section 1504(a) of the Internal Revenue
Code, of which the Company is the common parent and any member of such
group.
(vi) "Pre-Closing Tax Period" means any Tax period, or portion
thereof, ending on or before the close of business on the Closing Date.
(vii) "Post-Closing Tax Period" means any Tax Period or portion
' thereof, beginning on or after the close of business on the Closing Date.
(viii) "Restructuring Tax" means any Tax imposed as a result of the
transfer of assets or any other transaction contemplated by this Agreement, excluding any
Tax that is solely the result of Acquiror's breach of Section 6.10(g).
(ix) "Tax" (including with correlative meaning, the terms
"Taxes" and "Taxable") means (A) any income, gross receipts, ad valorem,
premium, excise, value-added, sales, use, transfer, 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, and any payment required to be made to any state abandoned
property administrator or other public official pursuant to an abandoned property,
escheat or similar law, 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 or payment (B) any liability of the Company or any
Subsidiary of the Company for the payment of any amounts of the type described
in (A) as a result of being a member of an affiliated, consolidated, combined or
unitary group, or being a party to any agreement or arrangement whereby the
liability of the Company or any Subsidiary of the Company for payments of such
amounts was determined or taken into account with reference to the liability of
any other person (excluding, however, any liability imposed on the Cable
Subsidiaries as a result of being a partner, beneficiary or member of any flow-
through entity, to the extent such liability relates to income of the Cable
Subsidiaries that is properly allocable to a Post-Closing Tax Period) and (C)
liability of the Company or any Subsidiary of the Company for the payment of
any amounts as a result of being party or subject to any Tax Sharing Agreement.
(ix) "Tax Indemnification Period", means (i) with respect to any Tax
described in clause (A) of the definition of "Tax", any Pm-Closing Tax Period of the
Company or any Subsidiary of the Company, (iii) with respect to any Tax described in
clause (B) of the definition of "Tax", any Pm-Closing Tax Period of the Company and
any Subsidiary of the Company and the Tax year of any member of a group described
in such clause (B) which includes (but does not end on) the Closing Date, and (iii) with
-41-
respect to any Tax described in clause (C)`of the definition of "Tax", the survival period
of the obligation under the applicable contract or arrangement which was entered into or
became effective during the Pre-Closing Tax Period.
(x) "Tax Return" means any return, report. statement, information
statement and the like required to be filed with any authority with respect to
Taxes.
(xi) "Tax Sharing Agreement" means any Tax sharing agreement or
arrangement (whether or not written) binding on the Company of any Subsidiary of the
Company, and any agreement or arrangement (including any arrangement required or
permitted by law) which (i) requires the Company or any Subsidiary of the Company to
make a payment to or for the account of any other person, (ii) requires or permits the
transfer or assignment of income, revenues, receipts, or gains to the Company or any
Subsidiary of the Company from any other person. or (iii) otherwise requires the
Company or any Subsidiary of the Company to indemnify any other person in respect of
Taxes.
(g) Additional Covenants. For a period of two years after the Closing Date:
(i) Except for actions taken in the ordinary course of business,
Acquiror shall not sell, transfer, distribute or otherwise dispose of a substantial
portion of the operating assets of Cable or any shares of capital stock of any
corporation or partnership interests of any partnership that was a Subsidiary of
the Company immediately prior to the Merger, whether by merger or otherwise;
provided, however, that Acquiror shall be entitled to enter into any like-kind
exchange for other cable television assets (within the meaning of Section 1031 of
the Code) with respect to any Cable assets;
(ii) Acquiror shall not cause or permit any corporation that was
a Subsidiary of the Company immediately prior to the Merger to sell any shares
of capital stock or any partnership interests of such Subsidiary to any person if
such sale or issuance will prevent Acquiror from retaining "control" of such
Subsidiary (within the meaning of Section 368 of the Code);
(iii) Acquiror shall not adopt a plan of liquidation or initiate and
enter into an agreement of merger or other transaction pursuant to which the
corporate legal existence of Acquiror would terminate or the outstanding stock of
Acquiror would, in a taxable transaction, be converted into cash, other property
or the stock or securities of any other issuer; and
(iv) Acquiror and its affiliates shall not offer to purchase, make
a tender offer, or otherwise enter into any agreement to acquire any shares of
capital stock of SHE;
-42-
Notwithstanding the above. Acquiror shall be permitted to take any actions described in
clauses (i) through (iii) above if Acquiror first obtains either (A) a ruling from the Internal
Revenue Service; or (B) an opinion of recognized tax counsel satisfactory to SKI. to the effect
that such actions will not result in the distribution of SHI shares to the Company's shareholders
or the Merger being taxable.
6.11 Notification. Each party hereto shall, 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 shall use its best efforts to prevent or promptly remedy '
such breach.
6.12 Employee Benefits.
(a) As part of the assumption of liabilities of the Company by Sill pursuant
to Section 2.02 and the Contribution Agreement, effective as of the Effective Time, SKI agrees
to accept all liabilities and responsibilities including without limitation those of a plan sponsor.
within the meaning of Section 3(16)(B) of ERISA, of any Company Employee Plan and to accept
all liabilities and responsibilities including without limitation those of an employer under any
Company Benefit Arrangement except as may otherwise be provided in this Section 6.12. SHI
agrees that Acquiror shall have no liability and shall be fully indemnified and held harmless by
Sill with respect to any such plans or arrangements after the Effective Time. SEE and Acquiror
agree that, effective from and after the Effective Time, except with respect to benefits accrued
prior to the Effective Time, active Cable Employees shall cease to participate actively in or be
covered by any Company Employee Plan or any Company Benefit Arrangement, including,
without limitation, all Cable Plans. Transferred Cable Employees, as defined in Section 6.12(b),
shall vest at the Effective Time in any benefit accrued through the date of Effective Time under
any Pension Plan that is a Cable Plan.
(b) Acquiror acknowledges that, as a result of the transactions contemplated
by this Agreement, Acquiror shall become at the Effective Time the employer of all Cable
Employees actively employed by Company as of the Effective Time, including individuals on
approved leaves of absence or short-term disability leave, but excluding Cable Employees who
are receiving long-term disability income benefits as of the Effective Time and Cable Employees
on short term disability leave at the Effective Time who subsequently receive long term disability
income benefits without returning to active employment for the Acquiror. Effective from and
after the Effective Time, Acquiror agrees to provide all Cable Employees who become so
employed by Acquiror ("Transferred Cable Employees") with similar compensation and
employee benefits which are no less favorable in the aggregate than the benefits provided to
similarly situated Acquiror employees. Any Employee Benefit Plan of Acquiror shall grant
Transferred Cable Employees credit for prior service with the Company, SRI and any of their
ERISA Affiliates prior to the Effective Time for purposes of eligibility and vesting. Cable
Employees shall not be deemed to be third-party beneficiaries of any provision of this Section
6.12.
-43-
(c) The Company or SHI, as applicable, agrees to continue existing health care
coverage of Cable Employees and their covered dependents through the Effective Time for
eligible health care expenses and services incurred through the Effective Time in accordance
with the terms of relevant plan documents. For purposes of the foregoing, an expense or service
is deemed to be incurred when the medical or dental services are performed.
(d) Immediately after the Effective Time, Acquiror agrees to provide coverage
under a group health care plan designed and implemented by Acquiror to all Transferred Cable
Employees, and the covered dependents of such Transferred Cable Employees, who are still
employed by the Company at the Effective Time, taking into account for eligibility purposes
under such plan the service accrued by any such Transferred Cable Employee while an employee
of the Company or any of its ERISA Affiliates: provided that no such service for Transferred
Cable'Employees need be credited by Acquiror for the purpose of determining eligibility to
receive any retiree medical benefit coverage. The group health care plan provided in accordance
with this Section 6.12(d) shall provide benefits which are no less favorable than the benefits
provided to similarly situated employees of the Acquiror. The health care plan provided by
Acquiror in accordance with this Section 6.12(d) shall contain no exclusions or limitations for
preexisting conditions applicable to covered Transferred Cable Employees or the covered
dependents of such Transferred Cable Employees.
(e) SHI shall assume and be solely responsible: (i) for the provision of
benefits required uhder the provisions of COBRA to any Cable Employees or other qualified
beneficiaries, within the meaning of Section 4980B(g) of the Code, with respect to whom a
qualifying event, within the meaning of Section 4980B(f)(3) of the Code, has occurred prior to
the Effective Time; and (ii) for the payment of all long-term disability income benefits to (x) all
Cable Employees who, as of the Effective Time, are receiving long-term disability benefits or
(y) are disabled or on short term disability leave as of the Effective Time and as a result of such
disability have become or, without returning to active employment become after the Effective
Time, eligible for long-term disability income benefits, as determined in accordance with long
term disability coverage provisions that on or prior to the Effective Time are applicable to the
Cable Employees.
(f) Except as provided in the succeeding sentence, from and after the date of
this Agreement, neither the Company, all nor any of their ERISA Affiliates will change the
employment status of any Cable Employee so as to promise employment with Cable for any
specified term. Notwithstanding the foregoing provision, from and after the date of this
Agreement, the Company, SHE or any of their ERISA Affiliates may enter into employment
contracts on behalf of Cable with any Cable Employee or prospective Cable Employees;
provided, however, that any such action taken must be in accordance with the ordinary and usual
course of business consistent with past practices, as provided in Section 6.03, and provided
further that consent of Acquiror must be obtained in all events.
(g) Acquiror agrees to cooperate, and agrees to use its best efforts to cause
its ERISA Affiliates to cooperate, in a complete, diligent and timely manner to provide SHI or
its ERISA Affiliates with such compensation, service and other pertinent census data as may be
reasonably required by SHI or any of its ERISA Affiliates for purposes of calculating or
-44-
effecting distribution of benefits to which any `Cable Employees may be entitled under any
Employee Benefit Plan established, maintained or contributed to by Sin or any of its ERISA
Affiliates.
6.13 Employee Stock Options. Effective as of the Effective Time, SHI shall assume
all incentive plans including without limitation the following plans: (i) The E.W. Scripps
Company 1987 Long-Term Incentive Plan (the "Incentive Plan") and (ii) The E.W. Scripps
Company 1994 Non-Employee Directors' Stock Option Plan (the "Directors Plan"). As of the
Effective Time, (1) each stock option outstanding under the Incentive Plan or the Directors Plan
or any other plan of the Company, SHI or any of their Subsidiaries that is not exercised prior
to the Effective Time shall be assumed by SHI, and all references in any such option to the
Company and to its Class A Common Stock shall be deemed to refer to SHE and its Class A
Common Shares, and (2) each restricted stock award subject to vesting conditions under the
Incentive Plan or any other plan of the Company, SHE or any of their Subsidiaries shall be
assumed by SHI and all references in any such restricted stock award to the Company and its
Class A Common Stock shall be deemed to refer to SHI and its Class A Common Shares.
6.14 Meetings of Stockholders. Each of the Company and Acquiror shall take all action
necessary, in accordance with applicable law and its charter and bylaws. to 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 and the transactions contemplated hereby
(collectively, the "Transactions"). The stockholder vote required for the adoption and approval
of the Transactions shall be the vote required: (i) in the case of the Company, by the DGCL
and the Company's Certificate of Incorporation; and (ii) in the case of Acquiror, by the PBCL
and Acquiror's Articles of Incorporation. The Company (subject, in the case of a Superior
Proposal, to the fiduciary duty of its Board of Directors under the DGCL as advised by outside
counsel) and Acquiror each shall use its best efforts to solicit from its stockholders proxies in
favor of adoption and approval of the Transactions and to take all other action necessary to
secure the vote of such stockholders required to effect the Transactions. By an agreement dated
and executed as of the date hereof, a copy of which is attached hereto as Exhibit E, the Trust
has agreed to vote, or cause to be voted, all of the shares of Company Common Voting Stock
owned by the Trust (or subject to proxies held by the Trust) in favor of the Transactions, subject
to the fiduciary duties of the trustees of the Trust, and the holder of a majority of the voting
power of Acquiror has agreed to vote, or cause to be voted, all of the shares of capital stock of
Acquiror that are owned by such holder (or subject to proxies held by them) in favor of the
Transactions at the meeting of stockholders of the Company or Acquiror, as the case may be,
held to approve the Transactions.
6.15 Regulatory and Other Authorizations.
(a) The Company, SEE and Acquiror agree to use their respective 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 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. SHE and the Company shall have primary responsibility for
-45-
obtaining all authorizations, consents, orders `and approvals with respect to Licenses and
Franchises of Cable. Without limitation, the Company and Acquiror shall each make an
appropriate filing of a Notification and Report Form pursuant to the HSR Act no later than thirty
days from the date hereof; and each such filing shall request early termination of the waiting
period imposed by the HSR Act. Acquiror shall not be required to agree to any consent decree
or order in connection with any objections of the Department of Justice or the Federal Trade
Commission (each an "HSR Authority") to the transactions contemplated by this Agreement.
None of the Cable Subsidiaries or Cable Partnerships shall amend any Franchise or make or
agree to make any payments or commitments, including commitments to make future capital
improvements or provide future services, in connection with obtaining any authorization.
consent, order or approval of any governmental authority necessary for the transfer of control
of any Franchise.
(b) Any application to any governmental authority for any authorization.
consent, order or approval necessary for the transfer of control of any License or Franchise shall
be mutually acceptable to the Company and Acquiror. Without limiting the obligations of the
Company, SHI and Acquiror under Section 6.15(a), each of the Company, SHI and Acquiror
agrees, upon reasonable prior notice, to make appropriate representatives available for attendance
at meetings and hearings before applicable governmental authorities in connection with the
transfer of control of any License or Franchise. The Company, SHI and Acquiror each agree
to use its reasonable best efforts to obtain any waiver, consent or declaratory ruling by the FCC
with respect to the Rules and Regulations regarding cross-ownership of cable television systems
and television stations, to the extent that such Rules and Regulations may prohibit (A) the Trust
from designating a director on or observer of the Comcast Board of Directors or (B) Brian
Roberts from serving on the Board of Directors of Turner Broadcasting Company; provided that
it shall not be a condition to the Closing that any such waiver, consent or declaratory ruling shall
have been obtained.
(c) Subject to Section 7.04(g), if any authorization, consent, order or approval
of any governmental authority necessary for the transfer of control of any License or Franchise
shall not have been obtained prior to the Effective Time, SKI and Acquiror shall cooperate with
each other and use their respective best efforts (i) to restructure the ownership and control of
such License or Franchise from and after the Effective Time in such a manner that prevents any
violation of the terms of such License or Franchise that would have a Material Adverse Effect
on Acquiror and its Subsidiaries taken as a whole, on Cable or on SHI and its Subsidiaries taken
as a whole and preserves the intent of the parties as set forth in this Agreement with respect to
the terms and conditions of the Merger, and (ii) notwithstanding the Closing, to continue to seek
any authorization, consent, order or approval necessary for the transfer of control of such
License or Franchise.
6.16 Further Assurances. Upon the terms and subject to the conditions hereof, each
of the parties hereto shall execute such documents and other instruments and take such further
actions as may be reasonably required or desirable to carry out the provisions hereof and
consummate the transactions contemplated hereby 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 hereof, each of the parties hereto shall use its respective reasonable best
-46-
efforts to (i) 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 (ii) obtain in a timely manner all necessary
waivers. consents and approvals and to effect all necessary registrations and filings.
6.17 Internal Revenue Service Ruling. The Company shall. as promptly as practicable
after the date hereof, prepare and submit to the IRS a request for an advance letter ruling from
the IRS that the transactions contemplated by this Agreement (other than the Merger), including
the internal spinoffs described in Section 2.01(a) hereto (and the contribution, if any, of the
assets related to the Mid-Tennessee Business) and the Contribution and the Distribution of sin
Common Shares to the Company's stockholders will qualify as tax-free spinoffs within the
meaning of Sections 368(a)(l)(D) and 355 of the Internal Revenue Code. Such request shall be
true and correct in all material respects, and all facts material to the ruling shall be disclosed in
such request. The Company shall afford Acquiror with reasonable opportunity to review and
comment on such request prior to its submission to the IRS. and such request as filed shall be
reasonably acceptable to Acquiror. The Company shall provide Acquiror with copies of all
materials submitted to the IRS, and Acquiror shall participate in all meetings and conferences
with IRS personnel, whether telephonically or in person. Acquiror shall reasonably cooperate
in good faith with the Company in seeking to obtain such ruling.
6.18 Records Retention.
(a) For a period of five years after the Closing Date. SHI shall retain all of
its books and records relating to Cable for periods prior to the Closing Date and Acquiror shall
have the right to inspect and copy such books and records during normal business hours, upon
reasonable prior notice, in connection with the preparation of financial statements, reports and
filings and for any other reasonable purpose.
(b) For a period of five years after the Closing Date, Acquiror shall retain all
of its books and records relating to Cable for periods subsequent to the Closing Date and Sin
shall have the right to inspect and copy such books and records during normal business hours,
upon reasonable prior notice, in connection with the preparation of financial statements, reports
and filings and for any other reasonable purpose.
6.19 Stock Exchange Listing. SHE shall apply to the New York Stock Exchange for
the listing of the Sill Class A Common Shares and shall use its best efforts to receive approval
for the listing of such shares. Acquiror shall submit a supplement listing application to the
NASDAQ National Market for the listing of the Merger Stock and shall use its best efforts to
receive approval for the listing of such stock.
6.20 Company Names.
(a) Acquiror acknowledges that the names "E.W. Scripps," "Scripps,"
"Scripps Howard," or any part thereof, and the initials "EWS" or "SH", whether alone or in
combination with one or more other words, are to the extent owned by the Company or any of
its Subsidiaries an asset of the Company being transferred to SHI in the Contribution. Promptly
-47-
after the Closing Date. Acquiror shall (i) cause the'Cable Subsidiaries and the Cable Partnerships
to change their names to delete any reference therein to the aforesaid names or initials and (ii)
reasonably cooperate in assisting SHE to change its name to "The E.W. Scripps Company." As
promptly as reasonably practicable after the Closing Date. Acquiror shall cease using the
aforesaid names or initials in connection with the business operations of Cable.
(b) Between the consummation of the Contribution and the Closing (and for
as long thereafter as is required for Acquiror to comply with Section 6.20(a)), the Company, the
Cable Subsidiaries, and the Cable Partnerships shall have a non-exclusive license to use the
names "Scripps" and "Scripps Howard" and the initials "EWS."
6.21 Other Agreements. At the Closing, Acquiror and the Trust shall enter into a
Registration Rights Agreement as set forth in Exhibit F and a Board Representation Agreement
as set forth in Exhibit G.
6.22 Form 8-K; Provision of Financial Statements; Schedule of Contracts. (a) As soon
as practicable after the date hereof, the Company will prepare and file a Current Report on Form
8-K (the "Form 8-K") which will include a description of the business of Cable and certain
financial and other information with respect to Cable. The Company covenants that the Form
8-K will not contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(b) At the request of Acquiror, the Company agrees to provide (or, if
requested by Acquiror, cooperate with Acquiror in the preparation of) as promptly as practicable
(but in any event within 45 days of the request) such financial statements (audited or unaudited,
as requested by Acquiror) relating to Cable as the Acquiror may reasonably request in order to
comply with the requirements of the Securities Act or the Exchange Act or in order to secure
financing (including pursuant to a public offering registered under the Securities Act).
(c) Within six weeks following the date hereof, the Company shall(A)provide
Schedule 6.22(c) to Acquiror, which shall include each of the following: (i) any affiliation or
retransmission Contract between any Cable Subsidiary or Cable Partnership and a programming
service or a distributor thereof; (ii) any Contract providing for the purchase or sale by Cable of
goods, services, equipment or assets with an aggregate purchase price of $250,000 or more or
with a duration in excess of 5 years; (iii) any partnership, joint venture or other similar Contract
or any guarantee of the obligations of any Person; (iv) all Franchises of Cable; (v) all licenses,
franchises, certificates, permits, qualifications and authorizations from all governmental
authorities necessary for the lawful conduct of Cable's business and (vi) all consents and waivers
from all relevant governmental authorities necessary to transfer ownership of Cable's franchise
agreements and FCC licenses, and (B) deliver complete copies of all documents listed on
Schedule 6.22(c) other than those previously delivered or made available to Acquiror.
-48-
6.23 Determination of Estimated Amounts.
(a) Two days prior to the Effective Time, the Company shall inform Acquiror
of (i) the Company's best estimate of the Capital Expenditure Amount (the "Estimated Capital
Expenditure Amount"), (ii) the Company's best estimate of the Cable Net Liabilities Amount
(the "Estimated Cable Net Liabilities Amount") and (iii) the Company's basis for such estimates.
The Estimated Capital Expenditures Amount and the Estimated Cable Net Liabilities Amount
shall be reasonably satisfactory to Acquiror.
(b) As promptly as practicable after the Effective Time, but in any event
within 90 days thereafter. Acquirer shall prepare and deliver to SKI a schedule (the "Acquiror
Schedule") showing Acquirer's determination of the Cable Net Liabilities Amount and the
Capital Expenditure Amount. If SHI disagrees with either of the determinations set forth in the
Acquiror Schedule, SHE shall give notice thereof to Acquirer within 30 days after delivery of
the Acquiror Schedule to SHI, such notice to include reasonable detail regarding the basis for
the disagreement.
(c) Acquiror and SKI shall attempt to settle any such disagreement: any such
settlement shall be final and binding upon Acquiror and SHE. If, however, Acquirer and SHI
are unable to settle such dispute within 30 days after receipt of such notice of dispute by
Acquiror, the dispute shall be submitted to an independent certified public accounting firm
mutually acceptable to Acquiror and SHE for resolution, and the decision of such firm shall be
final and binding upon Acquirer and SHI. All costs incurred in connection with the resolution
of said dispute by such independent public accountants, including expenses and fees for services
rendered, shall be paid one half by Acquiror and one half by SHI. Acquiror and SKI shall use
reasonable efforts to have the dispute resolved within 60 days after such dispute is submitted to
said independent public accountants. The fmal determination of the Cable Net Liabilities
Amount and the Capital Expenditure Amount (whether as a result of SHI's failing to give notice
of SHI's disagreement with Acquirer's determination within the time period prescribed above.
a resolution by Acquiror and SHI of any such disagreement, or a determination by an accounting
firm selected pursuant to clause (c) above to resolve any disagreement among the parties) may
occur on different dates.
(d) Within 10 Business Days following a final determination of the Cable Net
Liabilities Amount, (i) if the Cable Net Liabilities Amount exceeds the Estimated Cable Net
Liabilities Amount, then SKI will pay to Acquirer in immediately available funds an amount
equal to such excess plus interest at the Agreed Rate from the Closing Date to the date of
payment and (ii) if the Estimated Cable Net Liabilities Amount exceeds the Cable Net Liabilities
Amount, Acquiror will pay to SHI in immediately available funds an amount equal to such
excess plus interest at the Agreed Rate from the Closing Date to the date of payment. Any such
payments shall be made on an after-tax basis.
(e) Within 10 Business Days following a final determination of the Capital
Expenditure Amount, (i) if the Capital Expenditure Amount exceeds the Estimated Capital
Expenditure Amount, then Acquirer will pay to SHI in immediately available funds an amount
qual to such excess plus interest at the Agreed Rate from the Closing Date to the date of
-49-
payment and (ii) if the Estimated Capital Expenditure Amount exceeds the Capital Expenditure
Amount, SHE will pay to Acquiror in immediately available funds an amount equal to such
excess plus interest at the Agreed Rate from the Closing Date to the date of payment. Any such
payments shall be made on an after tax basis.
6.24 Capital Expenditures. The Company agrees to cause Cable to make capital
expenditures in the ordinary course of business including line extensions (the "Ordinary Course
Expenditures"); provided. however, that such Ordinary Course Expenditures shall not include
upgrades or rebuilds. In addition, Cable is permitted, but not required, to make up to
$43.200,000 in capital expenditures for upgrades and rebuilds to be mutually agreed by the
Company and Acquiror. The amount of capital expenditures made after November 1. 1995 and
before. the Effective Time by Cable for upgrades and rebuilds in accordance with the mutual
agreement of the Company and Acquiror, subject to appropriate adjustments for minority
interests, if any, is referred to herein as the "Capital Expenditure Amount" and such amount
shall not include any Ordinary Course Expenditures.
6.25 Excess Cash. From time to time. after the date of execution of this Agreement
and until the Effective Time, and subject to applicable law, (i) the Cable Subsidiaries and the
Cable Partnerships may pay cash dividends, or otherwise make cash distributions, to the
Company or any of its Subsidiaries and (ii) the Company may contribute to SHI cash held by
the Company. Immediately prior to the Contribution, the Cable Subsidiaries and the Cable
Partnerships shall, to the extent permitted by law and by the partnership agreement governing
SCT, pay dividends in cash or cash equivalents, or otherwise make contributions in cash or cash
equivalents, to the Company and its Subsidiaries so that none of the Cable Subsidiaries and none
of the Cable Partnerships owns any cash or cash equivalents at the Effective Time.
6.26 Acquisition of Mid-Tennessee Business; Reduction of Aggregate Consideration;
Indemnity. Any acquisition of all or part of the Mid-Tennessee Business shall be on the terms
and conditions of the Mid-Tennessee Agreement. Broadcasting shall not waive any closing
condition in, or agree to any material modification of, the Mid-Tennessee Agreement without
the consent of Acquiror, which consent shall not be unreasonably withheld or delayed. The
amount, if any, paid by Broadcasting to acquire all or part of the Mid-Tennessee Business
(including amounts paid into escrow by Broadcasting ("Broadcasting Escrow Amounts") and the
principal amount of any promissory notes delivered by Broadcasting ("Broadcasting Notes"))
plus the MTh Net Liabilities Amount with respect to all or such part of the Mid-Tennessee
Business, as the case may be, that is acquired is referred to herein as the "Mid-Tennessee
Purchase Price". For such purposes, "MTB Net Liabilities Amount" means, with respect to any
part of the Mid-Tennessee Business acquired, the Net Liabilities Amount of such part of the
Mid-Tennessee Business (including the Broadcasting Escrow Amounts and the Broadcasting
Notes to the extent the rights and obligations with respect thereto are assigned to Cable) as of
the date it is transferred to Cable. The amount, if any, by which $62,500,000 exceeds the Mid-
Tennessee Purchase Price is referred to herein as the "Mid-Tennessee Amount" and shall reduce
the Aggregate Consideration as set forth in Section 1.02(d). Prior to the Effective Time,
Broadcasting shall contribute and assign to a Cable Subsidiary all assets and liabilities of the
Mid-Tennessee Business so acquired and all rights and obligations it may have, if any, under
any Mid-Tennessee Agreement and Acquiror shall indemnify Broadcasting and its Subsidiaries
-50-
against all Losses in connection with the breach`of such agreements by Cable or Acquiror after
the Effective Time. Such indemnification shall be subject to the procedures set forth in Section
2.04 of the Contribution Agreement.
6.27 Indemnity Relating to Certain Litigation.
(a) SKI shall indemnify from and after the Closing Date (i) Acquiror and its
Subsidiaries, including Cable, against all Losses in connection with any suit. action, proceeding
or investigation pending at or arising after the Closing Date that relates to Cable prior to the
Effective Time and (ii) any person who was an officer, director. partner or employee of any
Cable Subsidiary or Cable Partnership (or any partner thereof) against all Losses in connection
with any suit, action, proceeding or investigation. The Company and SHI shall indemnify
Acquiror against all Losses arising from or relating to any claim, action or proceeding brought
by or on behalf of the holders of Company Common Stock in connection with the transactions
contemplated hereby.
(b) Acquiror shall indemnify from and after the Closing Date (i) SHI and its Subsidiaries
against all Losses in connection with any suit, action, proceeding or investigation pending at or
arising after the Closing Date that relates to Cable after the Effective Time and (ii) any person
who was an officer, director, partner or employee of any Cable Subsidiary or Cable Partnership
(or any partner thereof) prior to but not after the Closing Date against all Losses in connection
with any such suit, action, proceeding or investigation. SHE represents that Schedule 6.27 hereto
describes each suit, action, proceeding or investigation pending at the date hereof that relates to
Cable. Acquiror shall indemnify the Company and SHI against all Losses arising from or
relating to any claim, action or proceeding brought by or on behalf of the holders of Acquiror
A Stock. Acquiror B Stock and Acquiror Common Stock in connection with the transactions
contemplated hereby.
(c) The indemnification arrangements set forth in this Section 6.27 shall be subject to
the procedures set forth in Section 2.04 of the Contribution Agreement.
6.28 River City Interest. The Company shall use its reasonable best efforts to cause
Sacramento Cable to acquire prior to the Closing Date the River City Interest or such lesser
portion thereof as may be acquired. Any such acquisition shall be on terms and conditions
reasonably satisfactory to Acquiror. If Sacramento Cable acquires all or any part of the River
City Interest, then the Aggregate Consideration shall be increased by the River City Purchase
Amount as set forth in Section 1.02(d). For purposes hereof, the term "River City Purchase
Amount" means the sum of (x) the amount paid by Sacramento Cable to acquire all or any part
of the River City Interest and (y) 5% of the Net Liabilities Amount of SCT as of the date of
such acquisition (adjusted proportionately if less than all of the River City Interest is acquired).
6.29 Proposed Hyperion Joint Venture. The terms and conditions of any joint venture
with Hyperion Telecommunications of Tennessee, Inc. and any material transactions in
connection therewith shall be reasonably satisfactory to Acquiror.
-51-
6.30 Cancellation of Intercompany Arrangements. Prior to the Effective Time, and
except as otherwise provided herein or as otherwise agreed by the parties hereto, all accounts.
payables, receivables, contracts, commitments and agreements between the Company or Cable.
on the one hand, and SHI or any of its Subsidiaries, on the other hand. will be settled, cancelled
or otherwise terminated.
6.31 Market Purchase Program. The Company and SHE acknowledge that (i)
simultaneously with the announcement of the transactions contemplated hereby, Acquiror intends
to announce that it has approved a market repurchase program (the "Repurchase Program")
pursuant to which it may purchase at such times and on such terms as it determines appropriate
up to $500 million of common stock of Acquiror and (ii) Acquiror has no obligation to make
any such purchases. Acquirer agrees not to make market purchases during the Random Trading
Days'and to terminate the Repurchase Program no later than six months after the Closing Date.
ARTICLE VII
CLOSING AND CLOSING DATE; CONDITIONS TO CLOSING
7.01 Closing and Closing Date. As soon as practicable after the satisfaction or waiver
of the conditions set forth herein (but no later than ten business days thereafter) and immediately
prior to the filing of the Certificate of Merger, a closing of the transactions contemplated hereby
(the "Closing") shall take place at the offices of Davis Polk & Wardwell, 450 Lexington
Avenue. New York, New York, or on such other date and at such other location as the parties
may agree in writing. The date on which the Closing occurs is referred to as the "Closing
Date."
7.02 Conditions to the Obligations of the Company, SHI and Acquiror. The respective
obligations of the Company and SHI, on the one hand, and Acquiror, on the other hand. to
consummate the transactions contemplated hereby are subject to the requirements that:
(a) The Transactions shall have been approved and adopted by the
stockholders of the Company and of the Acquiror, as applicable and as
contemplated hereby;
(b) The transactions contemplated by Article II hereof shall have been
consummated in accordance with the terms hereof and in accordance with
applicable Law and each of the conveyancing and liability assumption instruments
and other instruments, documents and agreements executed in connection with
such transactions shall be in form and substance reasonably satisfactory to
Acquiror and its counsel;
(c) Any waiting period applicable to the consummation of the
transactions contemplated hereby under the HSR Act shall have expired or been
terminated, and any other governmental or regulatory notices, authorizations,
consents, orders or approvals necessary for the performance of the parties'
-52-
respective obligations pursuant to this Agreement shall have been either filed (in
the case of notices) or received and be in effect and not subject to withdrawal or
appeal; provided, however, that this condition shall not apply with respect to any
authorization, consent, order or approval necessary for the transfer of control of
any Franchise if the condition in Section 7.04(g) has been satisfied or waived by
Acquiror;
(d) No federal, state or foreign governmental authority or other agency
or commission or court of competent jurisdiction shall have enacted, issued.
promulgated, enforced or entered any statute, rule, or regulation, or any
permanent injunction or other order (whether temporary, preliminary or
permanent), which remains in effect and which has the effect of making the
transactions contemplated hereby illegal or otherwise prohibiting the transactions
contemplated hereby, or which questions the validity or the legality of the
transactions contemplated hereby and which could reasonably be expected to have
a Material Adverse Effect on Cable or on Acquiror and its Subsidiaries taken as
a whole:
(e) The Joint Proxy Statement/Prospectus shall have been declared
effective under the Securities Act and no stop orders with respect thereto shall
have been issued; and
(f) The Company shall have received (i) from the IRS an advance
letter ruling as contemplated by Section 6.17 hereof reasonably satisfactory to
Acquiror and SHI and (ii) an opinion of Baker & Hostetler to the effect that the
Merger constitutes a tax-free reorganization under Section 368 of the Internal
Revenue Code reasonably satisfactory to Acquiror and SHE.
7.03 Conditions to the Obligations of the Company and SHI. The obligations of the
Company and SHE to effect the transactions contemplated hereby are subject to the satisfaction,
on or prior to the Closing Date, of the following conditions:
(a) Subject to Section 7.05, the representations and warranties of
Acquiror contained in this Agreement or in any other document delivered
pursuant hereto shall be true and correct ct 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 and
at the Closing Acquiror shall have delivered to the Company and SHI a certificate
to that effect;
(b) Each of the obligations of Acquiror to be performed on or before
the Closing Date pursuant to the terms of this Agreement shall have been duly
performed in all material respects on or before the Closing Date and at the
Closing Acquiror shall have delivered to the Company a certificate to that effect;
(c) The Acquiror Common Stock shall have been approved for listing
on the NASDAQ National Market subject to official notice of issuance;
-53-
- - - - - - - - - - - - - - - - - - - - -
(d) The Company and SHI shall have received an opinion of counsel
for Acquiror, dated as of the Closing Date. in form and substance reasonably
satisfactory to the Company, Sill and their counsel; and
(e) The Company and SHI shall have received all customary closing
documents they may reasonably request relating to the existence of Acquiror and
the authority of Acquiror for this Agreement and the transactions contemplated
hereby, all in form and substance reasonably satisfactory to the Company and
SHE.
7.04 Conditions to Obligations of Acquiror. The obligations of Acquiror to effect the
transactions contemplated hereby are subject to the satisfaction. on or prior to the Closing Date,
of the'following conditions:
(a) Subject to Section 7.06, the representations and warranties of the
Company and SHI contained in this Agreement or in any other document
delivered pursuant hereto shall be true and correct 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 and at the Closing the Company and SHI shall have delivered to Acquiror
a certificate to that effect;
(b) Each of the obligations of the Company and SHE to be performed
on or before the Closing Date pursuant to the terms of this Agreement shall have
been duly performed in all material respects on or before the Closing Date and
at the Closing the Company and SHE shall have delivered to Acquiror a certificate
to that effect;
(c) Immediately prior to the Effective Time, the Company shall have
no assets except (i) all of the issued and outstanding capital stock of, and its right,
title and interest in any advances to, the Cable Subsidiaries, (ii) the contract rights
referred to in Section 2.02(a)(ii); and (iii) the cash referred to in Section
2.02(a)(iii) to the extent such cash has not previously been used to pay expenses
of the Company described therein;
(d) Immediately prior to the Effective Time, the Company shall have
no liabilities except (i) liabilities associated with the cable television operations
of Cable (including any liabilities assumed in connection with the acquisition of
assets related to the Mid-Tennessee Business in accordance with Section 6.26) and
(ii) the contract obligations referred to in Section 2.02(b)(ii);
(e) Acquiror shall have received an opinion of Baker & Hostetler,
counsel for the Company and SHI, dated as of the Closing Date, in form and
substance reasonably satisfactory to Acquiror and its counsel;
(f) The Company shall have delivered to Acquiror a certificate signed
by the Chief Executive Officer and the Chief Financial Officer of the Company
-54-
certifying that there are no outstanding options to acquire any capital stock of the
Company and as to the number of shares of capital stock of the Company
outstanding as of the Closing Date, indicating the class and series of such shares:
(g) All authorizations, consents, orders and approvals from applicable
Franchise Authorities necescary to transfer Franchises in which at least 95% of
the Basic Subscribers of Cable are located (the "Required Percentage") shall have
been obtained, be in effect and not be subject to withdrawal or appeal; provided,
that the condition set forth in this Section 7.04(g) shall not be deemed to be
satisfied until the earlier to occur of (x) thirty (30) days following the date on
which the Required Percentage is obtained, (y) the date on which the condition
set forth in this Section 7.04(g) would be satisfied if the Required Percentage
were one hundred percent or (z) the Termination Date; and
(h) Acquiror shall have received all customary closing documents it
may reasonably request relating to the existence of the Company. SHI, the Cable
Subsidiaries and the Cable Partnerships and the authority of the Company and
SHI for this Agreement and the transactions contemplated hereby, all in form and
substance reasonably satisfactory to Acquiror.
7.05 Exception to Conditions to Obligations to the Company and SHI. The condition
to the Company's and SHI's obligation to effect the Merger contained in Section 7.03(a) shall
be deemed satisfied notwithstanding any failure of any representation or warranty of Acquirer
to the true and correct as of the Closing Date if (i) the aggregate amount of Losses that the
• holders of Merger Stock could reasonably be expected to suffer as a result of the failures of such
representations and warranties to be true and correct as of the Closing Date would not exceed
$50,000,000 and (ii) Acquiror indemnifies SHE against any such Losses;provided, however, that
Acquiror will have liability under this Section 7.05 only with respect to those Losses that
exceed, in the aggregate, $5,000.000. The foregoing indemnification shall be subject to the
procedures set forth in Section 2.04 of the Contribution Agreement.
7.06 Exception to Conditions to Obligations of Acquiror. The condition to Acquiror's
obligation to effect the Merger contained in Section 7.04(a) shall be deemed satisfied
notwithstanding any failure of any representation or warranty of the Company or SHI to be true
and correct as of the Closing Date if (i) the aggregate amount of Losses that Acquiror or its
Subsidiaries could reasonably be expected to suffer as a result of the failures of such
representations and warranties to be true and correct as of the Closing Date would not exceed
$50,000,000 and (ii) SHE indemnifies Acquiror against any such Losses;provided, however, that
SHI will have liability under this Section 7.06 only with respect to those Losses that exceed, in
the aggregate, $5,000,000. The foregoing indemnification shall be subject to the procedures set
forth in Section 2.04 of the Contribution Agreement.
-55-
ARTICLE VIII
TERMINATION
8.01 Termination. This Agreement may be terminated and the transactions
contemplated hereby may be abandoned at any time prior to the Closing Date:
(a) by mutual written consent duly authorized by the Boards of
Directors of the Company, SHI and Acquiror;
(b) by either the Company or Acquiror (i) if. at the stockholders'
meetings referred to in Section 6.14 (including any postponement or adjournment
thereof), the Merger and the other transactions contemplated hereby that require
such approval shall fail to be approved and adopted by the affirmative vote
specified herein, or (ii) so long as the terminating party is not then in breach of
any of its obligations hereunder, after December 31, 1996 (the "Termination
Date") if the Merger shall not have been consummated on or before such date:
(c) by the Company, provided neither it nor Sill is then in breach of
any of its obligations hereunder, if either (i) Acquiror fails to perform any
covenant in this Agreement when performance thereof is due and does not cure
the failure within twenty business days after the Company delivers written notice
thereof, or (ii) any other condition in Section 7.02 or Section 7.03 has not been
satisfied and is not capable of being satisfied prior to the Termination Date;
(d) by the Company, whether or not the conditions set forth in Section
7.02 have been satisfied, if the Board of Directors of the Company determines,
with the advice of outside counsel, that it may be required to do so in the exercise
of its fiduciary duties;
(e) by Acquiror, provided it is not then in breach of any of its
obligations hereunder, if either (i) the Company or Sill fails to perform any
covenant in this Agreement when performance thereof is due and does not cure
the failure within twenty business days after notice by Acquiror thereof, (ii) any
condition in Section 7.02 or Section 7.04 has not been satisfied and is not capable
of being satisfied prior to the Termination Date or (iii) the Board of Directors of
the Company materially modifies or withdraws the approval, determination or
recommendation referred to in Section 6.09;
(f) by the Company and Acquiror in accordance with and subject to
Section 1.02(d); or
(g) by Acquiror if it has received any communication from an HSR Authority
(such communication to be confirmed by such HSR Authority to the Company) indicating
that an HSR Authority has authorized the institution of litigation challenging the
transactions contemplated by this Agreement under the U.S. antitrust laws, which
litigation will include a motion seeking an order or injunction prohibiting the
consummation of any of the transactions contemplated by this Agreement.
8.02 Effect of Termination. In the event of the termination of this Agreement pursuant
to Section 8.01 hereof, this Agreement. except for the provisions of Section 6.06(f)-(j), Section
8.03, Section 9.08 and Section 9.13 and the confidentiality provisions of Section 6.05. shall
forthwith become null and void and have no effect, without any liability on the part of any party
or its directors, officers or stockholders. Nothing in this Section 8.02 shall relieve any party
to this Agreement of liability for breach of this Agreement.
8.03 Fees and Expenses.
(a) In order to induce Acquiror to, among other things, enter into this
Agreement, the Company agrees as follows: If this Agreement is terminated (A) by the
Company pursuant to Section 8.01(d) hereof, (B) by Acquiror pursuant to Section 8.01(e)(i) or
Section 8.01(e)(iii) hereof, or (C) by the Company or Acquiror pursuant to Section 8.01(b)(i)
hereof and. in the case of this subsection (C), either (x) the Trust shall have failed to vote in
favor of the adoption and approval of the Transactions or (y) the Board of Directors of the
Company shall have materially modified or withdrawn the approval, determination or
recommendation referred to in Section 6.09, then the Company shall promptly pay to Acquiror
a fee equal to 3% of the Base Consideration. If this Agreement is terminated by Acquiror
pursuant to Section 8.01(e)(ii) hereof, other than as a result of any condition in Section 7.02 or
the condition in Section 7.04(g) not being satisfied and not being capable of being satisfied prior
to the Termination Date, then the Company shall promptly 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 hereby ("Expense Reimbursement"), provided, however, that the
Expense Reimbursement shall in no event exceed $5,000,000. The payment described in the
first sentence of this Section 8.03 (a) shall be made in same day funds no later than five business
days after the termination of this Agreement; the Expense Reimbursement shall be made in same
day funds no later than five business days after receipt by the Company of detailed written
statements describing the fees and expenses.
(b) In order to induce the Company and SHI to, among other things, enter into
this Agreement, Acquiror agrees as follows: If this Agreement is terminated (A) by the
Company pursuant to Section 8.01(c), other than as a result of any condition in Section 7.02 not
being satisfied and not being capable of being satisfied prior to the Termination Date or (B) by
the Company pursuant to Section 8.01(b)(i) and the shareholder of Acquiror that is a party to
the Voting Agreement referred to in Section 6.14 shall have failed to vote in favor of the
adoption and approval of the Transactions, then Acquiror shall pay promptly to the Company
an amount equal to the actual reasonable fees and expenses paid or payable by or on behalf of
the Company and SHE 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, however, that such payment shall in no event exceed the
-57-
sum of S5.000,000. Such payment shall 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.
ARTICLE DC
MISCELLANEOUS
9.01 Survival of Representations and Warranties. The representations and warranties
contained herein shall not survive beyond the Closing Date except that the representations and
warranties of SHI in Sections 3.05 and 4.03 and the certification of SHI delivered pursuant to
Section 7.04(f) shall survive indefinitely and SHI shall indemnify the Acquiror and its
Subsidiaries, including Cable, in respect of any diminution in value or Losses incurred as a
result of any breach thereof. This Section 9.01 shall not limit any covenant or agreement of the
parties hereto which by its terms requires performance after the Closing Date. The indemnity
set forth in the first sentence of this Section 9.01 shall be subject to the procedures set forth in
Section 2.04 of the Contribution Agreement, and SHI shall not seek contribution from the
Company or any of its Subsidiaries or any of its or their respective officers or directors in
respect thereof.
9.02 Entire Agreement. This Agreement constitutes the entire agreement among the
parties with respect to the subject matter hereof and supersedes all prior written and oral and all
contemporaneous oral agreements and understandings with respect to the subject matter hereof.
9.03 Notices. All notices and other communications hereunder shall be in writing and
shall 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 Acquiror:
Comcast Corporation
1500 Market Street
Philadelphia, Pennsylvania 19102
Telecopier: 215-981-7622
Attention: Stanley Wang, Esq.
with a copy to:
Davis Polk & Wardwell
450 Lexington Avenue
New York, New York 10017
Telecopier: 212-450-4800
Attention: William L. Taylor, Esq.
-58-
if to the Company or SHE: '
The E.W. Scripps Company
Scripps Howard, Inc.
312 Walnut Street, 28th Floor
Cincinnati. Ohio
Attention: M. Denise Kuprionis. Secretary
with a copy to:
Baker & Hostetler
3200 National City Center
1900 East 9th Street
Cleveland, Ohio 44114
Attention: John H. Burlingame. 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 shall be deemed effective on delivery. Any notice or communication sent by telecopy
shall be deemed effective on the first business day at the place at which such notice or
communication was received following the day on which such notice or communication was sent.
Any notice or communication sent by registered or certified mail shall be deemed effective on
the fifth business day at the place from which such notice or communication was mailed
following the day on which such notice or communication was mailed.
9.04 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware regardless of the laws that might otherwise
govern under principles of conflicts of laws applicable thereto, except that the laws of the
Commonwealth of Pennsylvania shall govern the effect of the Merger on Acquiror.
9.05 Descriptive Headings. The descriptive headings herein 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.
9.06 Parties in Interest. This Agreement shall be binding upon and inure solely to the
benefit of each party hereto, 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 for Sections 6.06(f)-(j), 6.27 and 9.09 (which are intended to
be for the benefit of the persons provided for therein and may be enforced by such persons).
9.07 Counterparts. This Agreement may be executed in counterparts, each of which
shall be deemed to be an original but all of which shall constitute one and the same agreement.
9.08 Expenses. Except as otherwise provided herein, all costs and expenses incurred
in connection with the transactions contemplated by this Agreement shall be paid by the party
incurring such expenses. Prior to the Contribution, the Company shall pay, or make adequate
-59-
- - - - - - - - - - - - - - - - - - - - -
provision for the payment of, all costs and expenses required to be paid by the Company under
this Agreement in connection with the transactions contemplated by this Agreement.
9.09 Personal Liability. This Agreement shall not create or be deemed to create or
permit any personal liability or obligation on the part of any direct or indirect stockholder of any
party hereto or any officer, director, employee, agent, representative or investor of any party
hereto.
9.10 Binding Effect;Assignment. This Agreement shall inure to the benefit of and be
binding upon the parties hereto and their respective legal representatives and successors. This
Agreement may not be assigned by any party hereto.
9.11 Amendment. This Agreement may not be amended except by an instrument in
writing signed on behalf of all the parties. Any amendment to this Agreement after the meetings
of the stockholders of the Company and the Acquiror referred to in Section 6.14 may, subject
to applicable law, be made without seeking the approval of such stockholders.
9.12 Extension; Waiver. All parties hereto affected thereby may (i) extend the time for
the performance of any of the obligations or other acts of any other party hereto, (ii) waive any
inaccuracies in the representations and warranties of any other party contained herein or in any
document, certificate or writing delivered pursuant hereto by any other party, or (iii) waive
compliance 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 shall be valid only if
set forth in an instrument in writing signed on behalf of such party.
9.13 Legal Fees; Costs. If any party hereto institutes any action or proceeding,
whether before a court or arbitrator, to enforce any provision of this Agreement, the prevailing
party therein shall 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.
ARTICLE X
DEFINITIONS
When used in this Agreement, the following terms shall have the meanings
indicated.
"Accumulated Funding Deficiency" means an accumulated funding deficiency, as
defined in Section 302 of ERISA and Section 412 of the Code.
"Acquiror" has the meaning set forth in the first paragraph of this Agreement.
"Acquiror A Stock" has the meaning set forth in Section 5.05(a).
-60-
"Acquiror B Stock" has the meaning set forth in Section 5.05(a).
•
"Acquiror Common Stock" means the Class A Special Common Stock. par value
S 1.00 per share, of Acquiror.
"Acquiror Employee Plan" means any Employee Benefit Plan that is sponsored
or contributed to by Acquiror or any of its ERISA Affiliates covering any employees or former
employees of Acquiror or its ERISA Affiliates.
"Acquiror Preferred Stock" has the meaning set forth in Section 5.05(a).
"Acquiror Schedule" has the meaning set forth in Section 6.23(b).
"Acquiror's Form 10-Q" has the meaning set forth in Section 5.07.
"Acquiror's SEC Reports" has the meaning set forth in Section 5.06.
"Aggregate Consideration" has the meaning set forth in Section 1.02(d).
"Aggregate Shares Delivered" has the meaning set forth in Section 1.02(d).
"Agreed Rate" means the annual rate of interest quoted from time to time by
Citibank. N.A. in New York City as its prime rate of interest for the purpose of determining
the interest rates charged by it for United States dollar commercial loans made in the United
States.
"Agreement" has the meaning set forth in the first paragraph of this Agreement.
"Average Revenue Per Basic Subscriber" shall mean the amount of total revenue
received from Basic Subscribers during the calendar month in question for recurring service
(which shall include, without limitation, basic cable service, pay cable service, additional outlets,
equipment rental fees and program guides, including installation charges and advertising
revenues); divided by one-half of the sum of(i) the number of Basic Subscribers on the first day
of the calendar month in question and (ii) the number of Basic Subscribers on the last day of the
calendar month in question.
"Basic Subscriber" means a Person (i) who subscribes to Basic Service, (ii) who
pays the full rate for such service charged by the Company, any Cable Subsidiary or Cable
Partnership, Acquiror or any Subsidiary of Acquiror (as the case may be) for detached single
family homes, and (iii) whose accounts receivable owed for such service are not more than 60
days past due from the date of invoice; provided, that a hotel, motel, or other multi-living unit
customer which pays less per living unit than the rates charged for detached single family homes
shall be considered to be that number of Basic Subscribers which is equal to revenues from Basic
Service provided to such hotel, motel, or other customer for the month immediately preceding
the month in which this Agreement is executed and delivered (without regard to nonrecurring
-61-
- - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
revenues from ancillary services such as installation fees) divided by the full rate charged for
detached single family homes for such service.
"Base Consideration" has the meaning set forth in Section 1.02(d).
"Benefit Arrangement" means any material benefit arrangement (whether or not
written) that is not an Employee Benefit Plan, including (i) any employment or consulting
agreement, (ii) any arrangement providing for insurance coverage or workers' compensation
benefits, (iii) any incentive bonus or deferred bonus arrangement, (iv) any arrangement
providing termination allowance, severance or similar benefits, (v) any equity compensation
plan. (vi) any deferred compensation plan and (vii) any compensation policy and practice.
"Broadcasting" has the meaning set forth in Section 2.01(a).
"Cable" means. collectively, the Cable Subsidiaries and the Cable Partnerships.
"Cable Balance Sheets" has the meaning set forth in Section 4.04.
"Cable Benefit Arrangement" means any Benefit Arrangement covering any Cable
Employees, directors and former directors of Cable and the beneficiaries of any of them.
"Cable Dispute" has the meaning set forth in Section 6.10(a)(iii)(C).
"Cable Employee Plan" means any Employee Benefit Plan that is sponsored or
contributed to by the Company, SHI or any of their ERISA Affiliates covering any Cable
Employees.
"Cable Employee" means any employee or former employee of Cable.
"Cable Net Liabilities Amount" means the Net Liabilities Amount of Cable
immediately prior to the Effective Time and after giving effect to the Distribution, appropriately
adjusted for any minority interests. The Cable Net Liabilities Amount does not include any assets
or liabilities of the Company.
"Cable Plan" means any Cable Employee Plan or Cable Benefit Arrangement.
"Cable Partnerships" has the meaning set forth in Section 4.03.
"Cable Subsidiaries" has the meaning set forth in Section 2.01(a).
"Cable Tax Returns" has the meaning set forth in Section 6.10(f)(i).
"Capital Expenditure Amount" has the meaning set forth in Section 6.24.
"Certificate of Merger" has the meaning set forth in Section 1.03.
-62-
"Certificates" has the meaning set forth in Section 1.04(b).
"Charter Amendment" has the meaning set forth in Section 2.01(b).
"Closing" and "Closing Date" have the meanings set forth in Section 7.01.
"Closing Price" has the meaning set forth in Section 1.02(d).
"Closing Price Share Number" has the meaning set forth in Section 1.02(d).
"COBRA" means the Consolidated Omnibus Budget Reconciliation Act of 1985.
as amended. as set forth in Section 4980B of the Code and Part 6 of Title I of ERISA.
"Code" means Internal Revenue Code of 1986. as amended.
"Collar Price" has the meaning set forth in Section 1.02(d).
"Common Stock Conversion Number" has the meaning set forth in
Section 1.02(d).
"Communications Act" has the meaning set forth in Section 4.07(b).
"Company" has the meaning set forth in the first paragraph of this Agreement.
"Company Benefit Arrangement" means any Benefit Arrangement maintained by
the Company, SHE or any of their ERISA Affiliates covering any employees, former employees.
directors or former directors of the Company, SHI or any of their ERISA Affiliates. and the
beneficiaries of any of them.
"Company Class A Common Stock" means the Company's Class A Common
Stock. $.01 par value per share.
"Company Common Stock" means, collectively, the Company Class A Common
Stock and the Company Common Voting Stock.
"Company Common Voting Stock" means the Company's Common Voting Stock.
$.01 par value per share.
"Company Consolidated Income Taxes" has the meaning set forth in
Section 6.10(f)(iu).
"Company Consolidated Income Tax Returns" has the meaning set forth in
Section 6.10(f)(ii).
"Company Contracts" has the meaning set forth in Section 3.15.
-63-
"Company Employee Plan" means any Employee Benefit Plan that is sponsored
or contributed to by the Company, Sill or any of their ERISA Affiliates covering the employees
or former employees of the Company, SHE or any of their ERISA Affiliates.
"Company Group" has the meaning set forth in Section 6.10(f)(iv).
"Company Plan" means any Company Employee Benefit Plan or Company Benefit
Arrangement.
"Company Preferred Stock" has the meaning set forth in Section 3.05(a).
"Company's SEC Reports" has the meaning set forth in Section 3.06.
"Company 10-Q" has the meaning set forth in Section 3.07.
"Confidentiality Agreement" has the meaning set forth in Section 6.05.
"Contract" means any contract, agreement or understanding.
"Contribution" has the meaning set forth in Section 2.02(a).
"Contribution Agreement" has the meaning set forth in Section 2.02(a).
"Directors Plan" has the meaning set forth in Section 6.13.
"DGCL" has the meaning set forth in Section 1.02(e).
"Dissenting Shares" has the meaning set forth in Section 1.02(e).
"Dissenting Stockholder" has the meaning set forth in Section 1.02(e).
"Distribution" has the meaning set forth in Section 2.02(c).
"Effective Time" has the meaning set forth in Section 1.03.
"Employee Benefit Plan" means any employee benefit plan, as defined in
Section 3(3) of ERISA.
"Enforceability Exceptions" has the meaning set forth in Section 3.01.
"Environmental Laws" means any federal, state, and local laws,judicial decisions,
regulations, rules, judgments, orders, decrees, permits, licenses, agreements and governmental
restrictions, relating to human health, the environment or to emissions, discharges or releases
of pollutants, contaminants or other hazardous substances or wastes into the environment,
including without limitation ambient air, surface water, ground water or land, or otherwise
relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport
-64-
or handling of pollutants. contaminants or other hazardous substances or wastes or the clean-up
or other remediation thereof.
"Environmental Liabilities" means any and all liabilities of or relating to the
named entity, whether contingent or fixed, actual or potential, known or unknown, which (i)
arise under or relate to matters covered by Environmental Laws and (ii) relate to actions
occurring or conditions existing on or prior to the Effective Time.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"ERISA Affiliate" means a Person and/or such Person's Subsidiary or any trade
or business (whether or not incorporated) which is under common control with such entity or
such entity's Subsidiaries or which is treated as a single employer with such Person or any
Subsidiary of such Person under Section 414(b), (c), (m) or (o) of the Code or Section
4001(b)(1) of ERISA.
"Estimated Capital Expenditure Amount" has the meaning set forth in
Section 6.23(a).
"Estimated Cable Net Liabilities Amount" has the meaning set forth in
Section 6.23(a).
"EWS Cable" has the meaning set forth in Section 2.01(a).
"Exchange Act" has the meaning set forth in Section 3.03.
"Exchange Agent" has the meaning set forth in Section 1.04(a).
"Execution Price" has the meaning set forth in Section 1.02(d).
"Expense Reimbursement" has the meaning set forth in Section 8.03(a).
"FAS 106" means Financial Accounting Standard 106.
"FCC" has the meaning set forth in Section 3.03.
"Form 8-K" has the meaning set forth in Section 6.22.
"Franchise" means written "franchise" within the meaning of Section 602(8) of
the Cable Communications Policy Act of 1984 (47 U.S.C. (S)522(9)).
"Franchising Authority" has the meaning that term is given by Section 602(9) of
the Cable Communications Policy Act of 1984 (47 U.S.C. (S)522(10)).
"GAAP" has the meaning set forth in Section 3.07.
-65-
e
"Group Health Plan" means any group health plan, as defined in Section
5000(b)(1) of the Code.
"HSR Act" has the meaning set forth in Section 3.03.
"HSR Authority" has the meaning set forth in Section 6.15(a).
"Incentive Plan" has the meaning set forth in Section 6.13.
"Indemnifying Party" has the meaning set forth in Section 6.06(h).
"Indemnified Party" has the meaning set forth in Section 6.06(h).
"Indemnitee" has the meaning set forth in Section 6.10(e).
"Indemnitor" has the meaning set forth in Section 6.10(e).
• "IRS" means the Internal Revenue Service.
"Joint Proxy Statement/Prospectus" has the meaning set forth in 6.06(a).
"Licenses" means approvals, consents, rights, certificates, orders, franchises,
determinations, permissions, licenses, authorities or grants issued, declared, designated or
adopted by any nation or government, any federal, state, municipal or otherpolitical subdivision
thereof or any department, commission, board, bureau, agency or instrumentality exercising
executive, legislative, judicial, regulatory or administrative functions pertaining to government,
excluding, however, the Franchises.
"Liens" means any lien, claim, charge, restriction, pledge, mortgage, security
interest or other encumbrance.
"Losses" means all losses, claims, damages, liabilities or actions, including any
legal or other expenses reasonably incurred in connection with investigating or defending any
such loss, claim, damage or liability or action or enforcing any indemnity with respect thereto.
"L-R Cable" has the meaning set forth in Section 2.01(a).
"Material Adverse Effect" means a material adverse effect on the business,
condition (financial or otherwise) or assets of the named entity or the named entities taken as
a whole. When the term "Material Adverse Effect" or material is used with respect to more
than one act, occurrence, item or circumstance, all such acts, occurrences, items and
circumstances shall be considered individually and in the aggregate.
"Material Cable Agreements" has the meaning set forth in Section 4.08(a).
"Merger" has the meaning set forth in Section 1.01.
-66-
"Merger Stock" has the meaning`set forth in Section 1.04(a).
"Merrill Lynch" has the meaning set forth in Section 3.04.
"Mid-Tennessee" has the meaning set forth in Section 4.13.
"Mid-Tennessee Agreement" means the Asset Sale Agreement dated October 26.
1995 between Mid-Tennessee Cable Limited Partnership and Broadcasting.
"Mid-Tennessee Amount" has the meaning set forth in Section 6.26.
"Mid-Tennessee Business" has the meaning set forth in Section 4. 13.
"Mid-Tennessee Purchase Price" has the meaning set forth in Section 6.26.
"MTB Net Liabilities Amount" has the meaning set forth in Section 6.26.
"Multiemployer Plan" means a multiemployer plan, as defined in Sections 3(37)
and 4001(a)(3) of ERISA.
"NLRB" means the National Labor Relations Board.
"Net Liabilities Amount" means, with respect to any person at any time, (i) the
consolidated liabilities (whether long-term or current, and including, without limitation, any and
all accrued and unpaid taxes) of such Person and its consolidated Subsidiaries at such time minus
(ii) the consolidated current assets (other than inventory) of such Person and its consolidated
Subsidiaries at such time, determined in each case in accordance with GAAP.
"Ordinary Course Expenditures" has the meaning set forth in Section 6.24.
"Other Filings" has the meaning set forth in Section 6.06(b).
"Outstanding Company Common Stock" has the meaning set forth in
Section 1.02(d).
"PBGC" means the Pension Benefit Guaranty Corporation.
"Pension Plan" means any employer pension benefit plan, as defined in
Section 3(2) of ERISA.
"Person" means any individual, general partnership, limited partnership,
corporation, limited liability company, joint venture, -trust, business trust, cooperative or
association, and the heirs, executors, administrators, legal representatives, successors, and
assigns of such Person where the context so requires.
"Pre-Closing Date" has the meaning set forth in Section 1.02(d).
-67-
- - - - - - - - - - - - - - - - - -
"Preliminary Joint Proxy Statement/Prospectus" has the meaning set forth in
section 6.06(a).
"Prohibited Transaction" means a transaction that is prohibited under 4975 of the
Code or Section 406 of ERISA and not exempt under Section 4975 of the Code or Section 408
of ERISA, respectively.
"Random Trading Days" has the meaning set forth in Section 1.02(d).
"Reportable Event" means a "reportable event." as defined in Section 4043 of
ERISA, to the extent that the reporting of such event to the PBGC has not been waived.
"Required Percentage" has the meaning set forth in Section 7.04(g).
• "Restated Articles" has the meaning set forth in Section 2.01(b).
"Retained Assets" has the meaning set forth in the Contribution Agreement.
"Retained Liabilities" has the meaning set forth in the Contribution Agreement.
"River City Interest" has the meaning set forth in Section 4.03.
"River City Purchase Amount" has the meaning set forth in Section 6.28.
"Rules and Regulations" has the meaning set forth in Section 4.07(b).
"Sacramento Cable" has the meaning set forth in Section 2.01(a).
"SCT" has the meaning set forth in Section 4.03.
"SEC" has the meaning set forth in Section 3.06.
"SEC Filings" has the meaning set forth in Section 6.06(c).
"Securities Act" has the meaning set forth in Section 3.03.
"Share Deficiency Number" has the meaning set forth in Section 1.02(d).
"SH Cable" has the meaning set forth in Section 2.01(a).
"SDI" has the meaning set forth in the first paragraph of this Agreement.
"SIB Class A Common Shares" means SHI's Class A Common Shares, $.01 par
value.
"SHE Common Shares" has the meaning set forth in Section 3.05(b).
-68-
"SHI Common Voting Shares" means SHI's Common Voting Shares, $.01 par
value.
"SHI Notes" has the meaning set forth in Section 2.02(b).
"SHI Note Indenture" means the Indenture dated December 15, 1991 relating to
the 7-3/8% Notes of SHI due December 15, 1998.
"Subsidiary" as to any Person means (i) any corporation of which such Person
owns, either directly or through its Subsidiaries, 50% or more of the total combined voting
power of all classes of voting securities of such corporation and (ii) any partnership, association,
joint venture or other form of business organization, whether or not it constitutes a legal entity,
in which such Person directly or indirectly through its Subsidiaries owns 50% or more of the
total equity interests.
"Superior Proposal" has the meaning set forth in Section 6.01(a).
"Surviving Corporation" has the meaning set forth in Section 1.01.
"Tax" has the meaning set forth in Section 6.10(f)(viii).
"Tax Return" has the meaning set forth in Section 6.10(f)(x).
"TCC" has the meaning set forth in Section 4.03.
"Termination Date" has the meaning set forth in Section 8.01(b).
"Termination Intent Notice" has the meaning set forth in Section 1.02(d).
"Top-up Notice" has the meaning set forth in Section 1.02(d).
"Top-up Share Number" has the meaning set forth in Section 1.02(d).
"Transaction Agreement" has the meaning set forth in Section 3.01.
"Transactions" has the meaning set forth in Section 6.14.
"Trust" has the meaning set forth in Section 6.14.
"Voting Agreement" means the Voting Agreement dated as of the date hereof by
and among Acquiror, the Company, the Trust and Sural Corporation.
"Welfare Plan" means any employee welfare benefit plan, as defined in Section
3(1) of ERISA.
-69-
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.
THE E.W. SCRIPPS COMPANY
By /s/ Lawrence A. Leser
Name: Lawrence A. Leser
Title: Chairman, President and
Chief Executive Officer
SCRIPPS HOWARD, INC.
By /s/ Lawrence A. Leser
Name: Lawrence A. Leser
Tide: Chairman. President and
Chief Executive Officer
COMCAST CORPORATION
By /s/ Robert S. Pick
Name: Robert S. Pick
Tide: Vice President
-70-
Schedule'5.05(a)
(1) Grants and awards to Directors and Employees, under the following:
(a) 1982 Incentive Stock Option Plan, as amended:
(b) 1986 Amended and Restated Non-Qualified Stock Option Plan:
(c) Comcast Corporation 1987 Stock Option Plan, as amended and restated;
(d) 1990 Restricted Stock Plan, as amended and restated on November 11,
1994.
(2) Retirement-Investment Plan, as amended. including Amendments Nos. 1 through 8
pursuant to which employees of Acquiror receive a one-time distribution of ten shares
of Acquiror Common Stock after one year of employment with Acquiror.
(3) Acquiror's 3-3/8% / 5-1/2% Step-up Convertible Subordinated Debentures Due 2005.
(4) Acquiror's 1-1/8% Discount Convertible Subordinated Debentures Due 2007.
Schedule 6.04
Permitted Amendments
1. Eliminate Class Voting Not Required by Statute. An amendment to the
Articles to eliminate the following class voting rights not required to be provided by the
Pennsylvania Business Corporation Law: (1) a separate vote of each class is required to amend
the conversion rights of the Class B stock in any respect, and (2) a separate vote of each class
is required if any class has a class vote by law.
2. Permit Mirror Spin-Offs and Similar Transactions. An amendment to the
Articles to permit the corporation (in the discretion of the Board of Directors), by means of a
dividend, rights distribution, merger, statutory division. recapitalization, or other means to
distribute different classes of equity interests in the corporation (e.g., different classes of
tracking stock) or other entities substantially replicating in all material respects the relative rights
of the three existing classes of stock of the corporation.
3. Permit Action By Majority Consent in Writing. An amendment to the
Articles to permit shareholder action by consent in writing of the shareholders entitled to cast
a majority of the votes entitled to be cast by all shareholders with respect to such action, as
permitted by Section 1766 and 2524 of the Pennsylvania Business Corporation Law.
EXHIBIT A-2
In addition to AGREEMENT AND PLAN OF MERGER BY AND
AMONG THE E.W. SCRIPPS COMPANY, SCRIPPS HOWARD, INC. , AND COMCAST
CORPORATION, there are several other ancillary agreements
including CONTRIBUTION AND ASSUMPTION AGREEMENT, NONCOMPETITION
AGREEMENT, VOTING AGREEMENT, REGISTRATION RIGHTS AGREEMENT, AND
BOARD REPRESENTATION AGREEMENT
•
3WA3421:99163:95002:BWA.A-2
BWA 12/15/95
EXHIBIT C-1
SECTION I. TRANSFEREE'S/ASSIGNEE'S LEGAL QUALIFICATIONS
2. List the transferee/assignee, and, if the transferee/assignee is not a natural person,
each of its officers, directors, stockholders beneficially holding more than 5% of the
outstanding voting shares, general partners, and limited partners holding an equity
interest of more than 5%. Use only one column for each individual or entity. Attach
additional pages if necessary. (Read carefully - the lettered items below refer to
corresponding lines in the following table.)
(a) Name, residence, occupation or principal business, and principal place of
business. (If other than an individual, also show name, address and citizenship of
natural person authorized to vote the voting securities of the applicant that it holds.)
List the applicant first, officers, next, then directors and, thereafter, remaining
stockholders and/or partners.
(b) Citizenship.
(c) Relationship to the transferee/assignee (e.g., officer, director, etc.).
(d) Number of shares or nature of partnership interest.
(e) Number of votes.
(1) Percentage of votes.
Response: Comcast Corporation's officers and directors are set forth
below. Also attached is information pertaining to principal shareholders of the
Company's Class A and Class A Special Common Stock which is traded on
the NASDAQ Stock Market. The information on stock ownership is derived
from the Comcast Corporation Proxy pertaining to its Annual Meeting held on
May 19, 1995 and is current as of February 28, 1995.
Officers of Comcast Corporation are as follows:
(a) Ralph J. Roberts (a) Julian A. Brodsky
1500 Market Street 1500 Market Street
Philadelphia PA 19102 Philadelphia PA 19102
(b) U.S. Citizen (b) U.S. Citizen
(c) Chairman & Director (c) Vice Chairman, Assistant
Secretary, Assistant Treasurer
& Director
(d) See Page C-6 (d) N/A
(e) See Page C-6 (e) N/A
(f) N/A (f) N/A
* N/A indicates ownership of less that 5%
1
(a) Brian L. Roberts (a) John R. Alchin
1500 Market Street 1500 Market Street
Philadelphia PA 19102 Philadelphia PA 19102
(b) U.S. Citizen (b) Australian Citizen
(c) President & Director (c) Senior Vice President & Treasurer
(d) N/A (d) N/A
(e) N/A (e) N/A
(f) N/A (f) N/A
(a) Thomas G. Baxter (a) Robert B. Clasen
1500 Market Street 1943 Port Laurent
Philadelphia PA 19102 Newport Beach, CA 92660
(b) U.S. Citizen (b) U.S. Citizen
(c) Senior Vice President (c) Senior Vice President
(d) N/A (d) N/A
(e) N/A (e) N/A
(f) N/A (f) N/A
(a) Donald A. Harris (a) Stanley Wang
480 E. Swedesford Road 1500 Market Street
Wayne, PA 19087 Philadelphia PA 19102
(b) U.S. Citizen (b) U.S. Citizen
(c) Senior Vice President (c) Senior Vice President & Secretary
(d) N/A (d) N/A
(e) N/A (e) N/A
(f) N/A (f) N/A
(a) Lawrence S. Smith (a) Arthur R. Block
1500 Market Street 1500 Market Street
Philadelphia PA 19102 Philadelphia PA 19102
(b) U.S. Citizen (b) U.S. Citizen
(c) Senior Vice President - (c) Vice President, Assistant Secretary,
Accounting & Administration Assistant Treasurer
(d) N/A (d) N/A
(e) N/A (e) N/A
(f) N/A (f) N/A
* N/A indicates ownership of less than 5%
2
(a) Joseph J. Euteneuer' (a) Robert S. Pick
1500 Market Street 1500 Market Street
Philadelphia PA 19102 Philadelphia PA 19102
(b) U.S. Citizen (b) U.S. Citizen
(c) Vice President - Controller (c) Vice President - Corporate
Development
(d) N/A (d) N/A
(e) N/A (e) N/A
(f) N/A (f) N/A
(a) Joseph W. Waz (a) Paul Gillert
1500 Market Street 1500 Market Street
Philadelphia PA 19102 Philadelphia PA 19102
(b). U.S. Citizen (b) U.S. Citizen
(c) Vice President - (c) Vice President, Human Resources
External Affairs
(d) N/A (d) N/A
(e) N/A (e) N/A
(f) N/A (f) N/A
(a) Mark A. Coblitz (a) C. Stephen Backstrom
1500 Market Street 1500 Market Street
Philadelphia PA 19102 Philadelphia PA 19102
(b) U.S. Citizen (b) U.S. Citizen
(c) Vice President - (c) Vice President - Taxation
Strategic Planning
(d) N/A (d) N/A
(e) N/A (e) N/A
(f) N/A (f) N/A
(a) William E. Dordelman (a) Christine K. Van Horne
1500 Market Street 1500 Market Street
Philadelphia PA 19102 Philadelphia PA 19102
(b) U.S. Citizen (b) U.S. Citizen
(c) Assistant Treasurer (c) Assistant Treasurer
(d) N/A (d) N/A
(e) N/A (e) N/A
(f) N/A (f) N/A
* N/A indicates ownership of less than 5%
3
(a) Thomas R. Nathan
1500 Market Street
Philadelphia PA 19102
(b) U.S. Citizen
(c) Assistant Secretary
(d) N/A
(e) N/A
(f) N/A
Response: Directors of Comcast Corporation are as follows:
(a) Ralph J. Roberts (a) Julian A. Brodsky
See Officers' List See Officers' List
(a) Brian L. Roberts (a) Daniel Aaron
See Officers' List 1500 Market Street
Philadelphia PA 19102
(b) U.S. Citizen
(c) Director
(d) N/A
(e) N/A
(t) N/A
(a) Gustave G. Amsterdam (a) Sheldon M. Bonovitz
135 South 19th Street Duane Morris & Heckscher
Suite 200 One liberty Place
Philadelphia PA 19103 Philadelphia PA 19103
(b) U.S. Citizen (b) U.S. Citizen
(c) Director (c) Director
(d) N/A (d) N/A
(e) N/A (e) N/A
(f) N/A (f) N/A
* N/A indicates ownership of less than 5%
4
(a) Joseph L. Castle, II (a) Bernard C. Watson
• Castle Energy Corporation The HMA Foundation, Inc.
One Radnor Corporate Center 1314 Chestnut Street
Radnor PA 19087 Philadelphia PA 19107
(b) U.S. Citizen (b) U.S. Citizen
(c) Director (c) Director
(d) N/A (d) N/A
(e) N/A (e) N/A
(f) N/A (f) N/A
(a) Irving A. Wechsler (a) Anne Wexler
Wechsler Myers & Wolsh The Wexler Group
340 One Oliver Plaza 1317 F Street, NW
Pittsburgh PA 15222 Washington DC 20004
(b) U.S. Citizen (b) U.S. Citizen
(c) Director (c) Director
(d) N/A (d) N/A
(e) N/A (e) N/A
(t) N/A (f) N/A
* N/A indicates ownership of less than 5%
5
Principal Shareholders
The following table sets forth certain information regarding the holdings of each shareholder who
was known to the Company to be the beneficial owner, as defined in Rule 13d-3 of the Securities
Exchange Act of 1934 (the "Exchange Act"), of more than 5% of any voting class of the Company's
Common Stock at the close of business on February 28, 1995. So far as is known to the Company, the
persons named in the table below as beneficially owning the shares set forth therein have sole voting
power and sole investment power with respect to such shares, unless otherwise indicated.
Title of Name and Address of Beneficially� Pe
f��
Voting Class Beneficial Owner Owned Class
Class A Common Stock Ralph J. Roberts 2,197,319(1)(2) 5.6%
1500 Market Street
Philadelphia, PA 19102-2148
The Capital Group, Inc. 3,115,500(3) 8.0%
333 South Hope Street
Los Angeles, CA 90071
American Express 2,224,500(4) 5.7%
Financial Advisors, Inc.
IDS Tower 10
Minneapolis, MN 55440
Class B Common Stock Ralph J. Roberts 9,090,000(2) 100.0%
1500 Market Street
Philadelphia, PA 19102-2148
(1) At February 28, 1995, Sural Corporation ("Sural"), a Delaware corporation, owned 1,845,037
shares of Class A Common Stock. Mr. Roberts, Chairman of the Board of Directors of the Com-
pany, and members of his family own all of the voting securities of Surat Pursuant to Rule 13d-3
of the Exchange Act, Mr. Roberts is deemed to be the beneficial owner of the shares of Class A
Common Stock owned by Sural. Also includes 319,070 shares owned directly by Mr. Roberts and
33,212 shares owned by a charitable foundation of which Mr. Roberts and his wife are trustees and
as to which shares he disclaims beneficial ownership. See also the last sentence of note (2) below.
(2) At February 28, 1995, Sural was the sole owner of the Company's Class B Common Stock. Pursu-
ant to Rule 13d-3 of the Exchange Act, Mr. Roberts is deemed to be the beneficial owner of the
shares of Class B Common Stock owned by Sural. In addition to the shares owned by Sural, Mr.
Roberts has options to purchase 658,125 shares of Class B Common Stock,of which 303,750 options
are currently exercisable or are exercisable within 60 days of February 28, 1995. Since each share
of Class B Common Stock is entitled to fifteen votes, the shares of Class A Common Stock and
Class B Common Stock owned by Sural constitute approximately 78% of the voting power of the
two classes of the Company's voting Common Stock combined (79%if all other shares of Class A
Common Stock which Mr. Roberts is deemed to beneficially own and his shares underlying options
to purchase Class B Common Stock currently exercisable or exercisable within 60 days of Febru-
ary 28, 1995 are included). The Class B Common Stock is convertible on a share-for-share basis
into Class A Common Stock or Class A Special Common Stock. If Sural and Mr. Roberts were to
convert the Class B Common Stock which they are deemed to beneficially own into Class A Com-
mon Stock, Mr. Roberts would beneficially own 11,287,319 shares of Class A Common Stock
(approximately 23.5% of the Class A Common Stock).
6
EXHIBIT C-2
SECTION I. TRANSFEREE' S/ASSIGNEE'S LEGAL QUALIFICATIONS
3 . If the applicant is a corporation or a limited partnership,
is the transferee/assignee formed under the laws of, or duly
qualified to transact business in, the State or other
jurisdiction which the system operates?
Response : Upon the closing of the transaction, the existing
Franchisee will continue to hold the franchise and operate
the cable system. The Franchisee will continue in its
current corporate form but will be affiliated with or
controlled by Comcast .
EXHIBIT C-3
•
SECTION I. TRANSFEREE'S/ASSIGNED'S LEGAL QUALIFICATIONS
5. Has an adverse finding been made or an adverse final action been taken by any court
or administrative body with respect to the transferee/assignee in a civil, criminal, or
administrative proceeding, brought under the provisions of any law or regulation
related to the following: any felony, evocation, suspension or involuntary transfer of
any authorization (including cable franchises) to provide video programming services;
mass media related antitrust or unfair competition; fraudulent statements to any
government unit; or unemployment discrimination?
Response: On February 7, 1995, the United States District Court of Appeals
for the District of Columbia Circuit reversed, in part, a decision of the
National Labor Relations Board ("Board") dated November 23, 1993 affirming
a decision of an administrative law judge who found that Comcast Cablevision
of Philadelphia, L.P. had engaged in unfair labor practices in connection with
the efforts by Teamsters Local No. 115 to organize the Company's technical
workers in its Philadelphia cable system. The Court of Appeals upheld the
Boards unfair labor practice findings but remanded the proceeding to the Board
on the grounds that the Board had failed to provide a reasoned justification for
the bargaining order entered in this matter. In July 1995, the Board remanded
the proceeding to an administrative law judge for the limited purpose of
reopening the record to receive evidence on these matters.
EXHIBIT C - 4
SECTION III. TRANSFEREE'S/ASSIGNEES FINANCIAL QUALIFICATIONS
2. Attach as an Exhibit the most recent financial statements, prepared in accordance with
generally accepted accounting principles, including a balance sheet and income statement for
at least one full year, for the transferee/assignee or parent entity that has been prepared in the
ordinary course of business, if any such financial statements are routinely prepared. Such
statements, if not otherwise publicly available, may be marked confidential and will be
maintained as confidential by the franchise authority and its agents to the extent permissible
under local law.
Response: Over the past five years, Comcast Corporation ("Comcast")
has generated compound growth in revenues of 20% per annum and
compound growth in operating cash flow (operating earnings before
depreciation, interest and taxes) of 21% per annum. For the quarter
ended September 30, 1995, Comcast generated revenues of $870.2
million and cash flow of S264.1 million.
For the year ended December 31, 1994, Comcast generated revenues
in excess of S1.3 billion and operating cash flow in excess of $576
million. For the same period, Comcast reported a net loss of $87.0
million. Pro Forma for the acquisitions of the Maclean Hunter systems
(12/941 and QVC (2/95), Comcast would have reported revenues in
excess of $2.9 billion and operating cash flow in excess of $880 million
for the year ended December 31, 1994.
With respect to liquidity, Comcast reported cash and short term
investments at September 30, 1995 of $828.4 million, at which time
it had undrawn lines of credit of $1.450 billion representing aggregate
liquidity of in excess of $2.2 billion. Over the past several years
Comcast has consistently maintained high levels of liquidity. While the
absolute levels may fluctuate from quarter to quarter as it optimizes its
capital structure by replacing more expensive, less flexible debt, it
expects to have more than adequate liquidity to meet the ongoing
capital requirements associated with ownership of the E. W. Scripps
systems.
The public markets extend similar support to Comcast's capital
formation activities as well. In the past year, Comcast has raised over
$1 billion of public debt and equity securities. In the private markets,
the Company recently secured a $250 million equity investment from
the California Public Employees' Retirement System in connection with
its December 1994 acquisition of the U.S. cable operations of Maclean
Hunter Inc. The Company is confident of its ongoing ability to access
both the public and private capital markets.
Based upon recent financial performances and the deleveraging of the
E. W. Scripps deal, the debt rating agencies have recently improved
Comcast's rating outlook. Duff & Phelps upgraded Comcast
Corporation's public debt ratings after the acquisition was announced
and Standard & Poors placed Comcast Corporation on Credit Watch
with positive implications.
A copy of Comcast Corporation's 1994 10-K and Annual Report as well
as the Company's form 10-Q for the period ended September 30, 1995
accompany this application.
EXHIBIT C-5
Section IV. TRANSFEREE'S/ASSIGNEE'S TECHNICAL QUALIFICATIONS
1. Set forth in an Exhibit a narrative account of the
transferee' s/assignee's technical qualifications, experience
and expertise regarding cable television systems, including,
but not limited to, summary information about appropriate
management personnel that will be involved in the system' s
management and operations. The transferee/assignee may, but
need not, list a representative sample of able systems
currently or formerly owned or operated.
Response : The Company was organized in 1969 under the laws
of the Commonwealth of Pennsylvania and has its principal
executive offices at 1500 Market Street, Philadelphia,
Pennsylvania, 19102 .
Comcast is principally engaged in the development,
management and operation of wired telecommunications,
including cable television and telephone services; wireless
telecommunications, including cellular, personal
communications services and direct home satellite
television; and content through principal ownership of QVC,
the world' s premier electronic retailer, and other
programming investments . The Company' s consolidated and
affiliated operations serve over eight million customers
worldwide. In 1995 Comcast announced the formation of a new
subsidiary, C3 , headed by former Disney executive Rich
Frank, which will focus on development and production of
original television programming as well as programming for
interactive technologies .
In 1993 construction began on a massive program to rebuild
Comcast' s cable infrastructure . Substantially all Comcast
systems have now been scheduled for installation of 750
megaHertz equipment, using fiber optic and coaxial cable
which will allow for a dramatic increase in services .
As a company in the vanguard of those creating the
communications infrastructure of the 21st Century, Comcast
is engaged in a number of leading edge technical trials .
Comcast is currently testing in subscriber homes a special
cable modem which allows personal computer users to harness
the capacity of broadband cable to access on line
information at speeds at least 50 times greater than
transfers over a standard telephone line.
Together with Sprint and other partners, Comcast is
constructing a vast network which will be able to supply
customers with one-stop wired and wireless communications
services throughout much of the country.
Comcast' s Palm Beach system is conducting one of the most
advanced pay-per-view tests in the United States, as well as
a "Your Choice TV" pilot program which allows viewers to
recall programs which they may have missed when they
originally aired.
Comcast' s cable division is responsible for the operation of
its cable systems . The division' s officers and staff are
located in Philadelphia at Comcast' s corporate headquarters .
The Cable systems are divided into six regions, each managed
by a senior regional vice president who reports directly to
the president of the cable division. Regional staffs
include individuals with experience and expertise in
finance, engineering, human resources, training and customer
relations, purchasing, marketing, government relations and
ad sales .
TECHNICAL DESCRIPTION OF SYSTEM
The headend for the system will be located at 434 Kimbark St. in Longmont,
Colorado. It is a state of the art facility with modern satellite and broadcast
receiving equipment. It is the central hub for the fiber optic lasers and
advertising insertion equipment. It also houses the addressable controllers.
Furthermore it serves as the interface location for our telephone and billing
systems. These systems all operate in tandem utilizing an automated
response system.
The distribution system will be a hybrid of fiber optic and coaxial cable. The
system will be constructed at 550MHz, with addressability and two-way
capability. The system will provide for standby power in the field and at the
headend. The system will have the ability for local insertion of LO/PEG
programming, as well as character generated text, on both a live and taped
delay basis. The system will also have an emergency alert system and
parental control converters.
The system shall perform at all times within the FCC specifications and all
construction and installation practices will adhere to standard codes and
practices.
The Operations Manager for Scripps Howard Cable Company has reviewed
the Weld County Ordinance and has designed the system to meet the
requirements set forth within.
Mr. Ian L. Thomas, Operations Manager
m
2to
2 § -
4 § -
§ i2 § B
■ 2
/ ■ - # k § 11A E 2 ■ B
k 10f) 221 1 .1j ) ;th - kf{fil ;
2 mue- 3 ) 6 } / 2k § ( 1 ! ! § w% f
H } j § § §
o_ - °
O ° § &
4 ( % - § ; § )
w
H 2
_ | m
r = to § 5 ° ! {B {! ! § l ! B
k ° !! y o ■� it 0 _ = ! ! o = l20
§ 2 § 7J7gr. a7rie% _ mklf kk / ! o
, � ; _ c6 , co � ! - a ■ 4 �
• kk } ) 7 . . 2 § /\ /7 § I- § /itk \ ) 2 § /kka )
ain
OW
Zr
222 2 § §
§ - -2
§ m § \ ki\# § ( %
° B ` £ { | (
n
! `
§ . A ■ m - ƒ
! § ! ! � 7 cm / § � $ f � E 2 { j
§ § /li
° § ' ® i & § ( H fli m r■ R$
/ 2 | & ! k + = s< ar ! ) % 2 Fitt ° N ■ [/ { {, , . ,
6 ƒ ! 2m § � •ƒE 2I § ) 1- / ƒ o.w ? loco (
I
FELONY CONVICTION
To the best of my knowledge NO officer or director of either The E.W.
Scripps Company or Comcast Corporation has been convicted of a felony.
SERVICE AREA BOUNDARIES AND STATEMENT OF NON-
DISCRIMINATION OF CABLE SERVICE
Scripps Howard intends to provide its services to the southwestern areas of
Weld County, Colorado. This would include serving the areas around and
near existing cable TV facilities in Berthoud, Longmont, Erie and Ft. Lupton,
Colorado.
Scripps Howard Cable Company will provide equal access to services for all
residents within the service boundaries of Weld County. It is our policy not
to discriminate with respect to race, color, religion, national origin, gender or
income with regard to subscribers.
Hello