SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.
Date of report (Date of earliest event reported) January 3, 1996
Commission File Number 1-16914
THE E.W. SCRIPPS COMPANY
(Exact name of registrant as specified in its charter)
Deleware 51-0304972
(State of other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
1105 N. Market Street
Wilmington, Deleware 19801
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (302) 478-4141
Not Applicable
(Former name, former address and former fiscal year, if
changed since last report.)
The undersigned registrant hereby amends its Current Report on Form 8-K as
of December 28, 1995 to include the following exhibits as set forth in the
pages attached hereto:
Agreement and Plan of Merger
Voting Agreement
Registration Rights Agreements Exhibit F
Board Representation Agreement Exhibit G
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by
the undersigned, therunto duly authorized.
THE E.W. SCRIPPS COMPANY
Dated: January 3, 1995 By: /s/ D. J. Castellini
D. J. Castellini
Senior Vice President,
Finance & Administration
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 WARRANTIES 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 11
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
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
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 Tax 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 Acquiror 55
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
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
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, SHI 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 SHI 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 converted 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 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 Pre-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 $1,575,000,000 (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 dividend,
subdivision, reclassification, recapitalization, 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
SHI Common Voting Shares or SHI 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, SHI 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, SHI 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").
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 shares 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 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 SHI Class A Common Shares or on SHI 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 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, SHI, 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 ("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 SHI 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 SHI (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 SHI 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, SHI will cause the
Company and the Cable Subsidiaries to be released by all
applicable third parties from any liability of SHI or any of
its Subsidiaries other than Cable or any liability assumed
by SHI 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 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, SHI shall defease the SHI Notes in
accordance with Section 401 of the SHI Note Indenture and
shall indemnify the Company in respect of any Loss it may
suffer in respect thereof. Prior to the Effective Time, SHI
and the Company shall enter into the Non-Competition
Agreement as set forth in Exhibit D hereto. SHI
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 SHI 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 SHI 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 SHI of this Agreement
and (ii) the performance by the Company and SHI 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 Agreement") to which the
Company or SHI 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 SHI, 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.
3.02 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 SHI
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 ("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 $.01
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 are no voting trusts or other
agreements or understandings 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 SHI 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 SHI 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 SHI Preferred Shares, $.01 par value. As of
the date hereof, there are issued and outstanding 750 SHI 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 1, 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.
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.
020
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.
(d) As of the Closing Date there will be no deferred
intercompany gains between the Company and the Cable Subsidiaries
or between the Cable Subsidiaries themselves in excess of
$250,000 (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 SHI 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 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 SHI in this Agreement (including, without limitation,
the representations and warranties made by the Company and SHI
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 SHI do not, and the
consummation of the transactions contemplated hereby by each of
the Company and SHI 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 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
SHI 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)
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, 1995, the
Average Revenue Per Basic Subscriber 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 be 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
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 SHI 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 the date of this
Agreement. Such notices of renewal have been filed pursuant to
the formal 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 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, SHI, 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, SHI 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 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, SHI 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, SHI or any of their ERISA
Affiliates reasonably expected to incur any withdrawal
liability with respect to any Multiemployer Plan.
(ii) Neither the Company, SHI nor any of their
ERISA Affiliates has been notified by the sponsor of 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) 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 Title IV of ERISA.
(iii) None of the Company, SHI 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, SHI or
any ERISA Affiliate of any of them would incur any material
withdrawal liability under Title IV of ERISA.
(c) Union Welfare Funds. Neither the Company, SHI 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, SHI nor any of their ERISA Affiliates
maintains any Cable Employee Plan or Company Employee Plan that
provides benefits described in Section 3(l) 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.
(f) 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, SHI or any of their
ERISA Affiliates, there are no material violations of any
reporting or disclosure requirements under ERISA with respect to
any 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, SHI 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, SHI or any ERISA 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, SHI 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).
(l) 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 SHI 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, 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 SHI
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 SHI 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 all 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 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 Acquiror 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 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 shares 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.
(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 finder 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) 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 Sec
tion 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.
(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
(f) 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 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 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 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 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.
6.04 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 VII 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.
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 SHI 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, SHI 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 SHI and Acquiror under the Securities Act with respect to the
Acquiror Common Stock to be issued in the Merger and the SHI
Common Voting Shares and the SHI 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, SHI 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 SHI, 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 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,
SHI 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 Acquiror 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, SHI 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, SHI 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 SHI, 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, SHI 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) SHI (and, if this Agreement is terminated prior to
the consummation of the Merger, the Company, jointly and
severally with SHI) 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 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 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.
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. SHI 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 and as
requested by SHI, SHI 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) SHI 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 SHI 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 SHI is or may be
liable, in whole or in part, under this
Agreement, Acquiror shall promptly inform
SHI. SHI 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 Acquiror'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 SHI 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 SHI 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 SHI,
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 Tax Returns of the Company
Group for 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 SHI 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, SHI 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). SHI 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.
(d) Retention of Records. Acquiror and SHI 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, SHI shall provide
Acquiror with copies of all relevant books and records that are
in the possession of SHI or any Subsidiary of SHI. SHI 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, SHI 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 SHI 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 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 Pre-Closing Tax Period of the Company or any
Subsidiary of the Company, (ii) with respect to any Tax
described in clause (B) of the definition of "Tax", any Pre-
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 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 SHI;
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 SHI, 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 SHI pursuant to Section 2.02 and the Contribution
Agreement, effective as of the Effective Time, SHI 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 SHI with respect to any such
plans or arrangements after the Effective Time. SHI 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, SHI 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.
(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 under 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,
SHI 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, SHI 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 effecting
distribution of benefits to which any Cable Employees may be
entitled under any Employee Benefit Plan established, maintained
or contributed to by SHI 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 SHI 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, SHI 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, SHI 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.
SHI and the Company shall have primary responsibility for
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, SHI 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 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 SHI Common Shares to the Company's
stockholders will qualify as tax-free spinoffs within the meaning
of Sections 368(a)(1)(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 SHI 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. SHI shall apply to the New
York Stock Exchange for the listing of the SHI 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 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 SHI 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.
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, Acquiror shall
prepare and deliver to SHI a schedule (the "Acquiror Schedule")
showing Acquiror'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,
SHI shall give notice thereof to Acquiror 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 SHI shall attempt to settle any such
disagreement; any such settlement shall be final and binding upon
Acquiror and SHI. If, however, Acquiror 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 SHI for resolution, and the decision of such firm
shall be final and binding upon Acquiror 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 SHI shall use reasonable efforts to
have the dispute resolved within 60 days after such dispute is
submitted to said independent public accountants. The final
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 Acquiror'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 SHI 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 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 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 and
(ii) if the Estimated Capital Expenditure Amount exceeds the
Capital Expenditure Amount, SHI 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 MTB 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 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) SHI 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. SHI 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.
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 SHI
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. Acquiror 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'
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 SHI.
7.03 Conditions to the Obligations of the Company and SHI.
The obligations of the Company and SHI 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 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;
(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, SHI 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 SHI.
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
SHI 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 SHI
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 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
necessary 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 Acquiror 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 SHI 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) SHI 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.
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 SHI
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 SHI 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 SHI 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 sum of $5,000,000.
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 IX
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.
if to the Company or SHI:
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 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.
096
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).
"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 $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 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.
"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, SHI 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)(iii).
"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.
"Company Employee Plan" means any Employee Benefit Plan
that is sponsored or contributed to by the Company, SHI or any of
their ERISA Affiliates covering the employees or former employees
of the Company, SHI 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 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.
"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 other political 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.
"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).
"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).
"SHI" has the meaning set forth in the first paragraph
of this Agreement.
"SHI Class A Common Shares" means SHI's Class A Common
Shares, $.01 par value.
"SHI Common Shares" has the meaning set forth in
Section 3.05(b).
"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.
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, and
Chief Executive Officer
SCRIPPS HOWARD, INC.
By /s/ Lawrence A. Leser
Name: Lawrence A. Leser
Title: Chairman, and
Chief Executive Officer
COMCAST CORPORATION
By /s/ Robert S. Pick
Name: Robert S. Pick
Title: Vice President
CONFORMED COPY
VOTING AGREEMENT
This Voting Agreement dated as of October 28, 1995
(this "Agreement"), is by and among Comcast Corporation, a
Pennsylvania corporation ("Acquiror"), The E.W. Scripps
Company, a Delaware corporation (the "Company"), Sural
Corporation, a Delaware corporation (the "Acquiror
Stockholder"), and The Edward W. Scripps Trust (the
"Trust").
WHEREAS, the Acquiror Stockholder owns 1,845,037 shares
of Acquiror's Class A Common Stock, par value $1.00 per
share, 5,315,772 shares of Acquiror's Class A Special Common
Stock, par value $1.00 per share, and 8,786,250 shares of
Acquiror's Class B Common Stock, par value $1.00 per share
(all shares of such stock now owned and which may hereafter
be acquired by the Acquiror Stockholder prior to the
termination of this Agreement shall be referred to herein as
the "Acquiror Shares");
WHEREAS, the Trust owns 16,040,000 shares of the
Company's Common Voting Stock, $.01 par value per share
("Company Common Voting Stock"), and 32,610,000 shares of
the Company's Class A Common Stock, $.01 par value per share
("Company Class A Common Stock") (all shares of Company
Common Voting Stock and Company Class A Common Stock now
owned and which may hereafter be acquired by the Trust prior
to the termination of this Agreement shall be referred to
herein as the "Company Shares");
WHEREAS, the Company, Scripps Howard, Inc., an Ohio
corporation and an affiliate of the Company ("SHI"), and
Acquiror propose to enter into an Agreement and Plan of
Merger, dated as of the date hereof (the "Merger
Agreement"), which provides, among other things, that the
Company will merge with and into Acquiror pursuant to the
Merger (this and other capitalized terms used and not
defined herein shall have the meanings given to such terms
in the Merger Agreement);
WHEREAS, it is a condition to the willingness of
Acquiror to enter into the Merger Agreement that the Trust
agree, and in order to induce Acquiror to enter into the
Merger Agreement, the Trust has agreed, to enter into this
Agreement; and
WHEREAS, it is a condition to the willingness of the
Company to enter into the Merger Agreement that the Acquiror
Stockholder agree, and in order to induce the Company to
enter into the Merger Agreement, the Acquiror Stockholder
has agreed, to enter into this Agreement;
Now, THEREFORE, in consideration of the foregoing and
the mutual covenants and agreements contained herein, and
intending to be legally bound hereby, the parties hereto
hereby agree as follows:
ARTICLE 1
VOTING OF COMPANY SHARES AND ACQUIROR SHARES
SECTION 1.1. Voting Agreement. (a) The Trust hereby
agrees that during the time this Agreement is in effect, at
any meeting of the stockholders of the Company, however
called, and in any action by consent of the stockholders of
the Company, the Trust, subject to the last sentence of this
Section 1.1, shall vote its Company Shares: (i) in favor of
the Merger, the Merger Agreement (as amended from time to
time) and the other Transactions with respect to which the
Trust may be entitled to vote, (ii) against any proposal for
any recapitalization, merger, sale of assets or other
business combinations between the Company, SHI or any of the
Cable Subsidiaries and any person or entity other than
Acquiror, or any other action or agreement, that would
result in a breach of any covenant, representation or
warranty or any other obligation or agreement of the Company
under the Merger Agreement or that would result in any of
the conditions to the obligations of the Company under the
Merger Agreement not being fulfilled, and (iii) in favor of
any other matter relating to the consummation of the
Transactions with respect to which the Trust may be entitled
to vote. The Trust acknowledges receipt and review of a
copy of the Merger Agreement. Notwithstanding anything to
the contrary set forth herein, the Trust shall not be
required to vote its Company Shares in accordance with this
Section 1.1 if the Board of Trustees of the Trust
determines, with the advice of outside counsel, that it may
be required, in the exercise of its fiduciary duties, to
vote such shares other than in accordance with such Section.
(b) The Acquiror Stockholder hereby agrees that during
the time this Agreement is in effect, at any meeting of the
stockholders of Acquiror, however called, and in any action
by consent of the stockholders of Acquiror, the Acquiror
Stockholder shall vote its Acquiror Shares: (i) in favor of
the Merger, the Merger Agreement (as amended from time to
time) and the other Transactions with respect to which such
Acquiror Stockholder may be entitled to vote, (ii) against
any action or agreement that would result in a breach of any
covenant, representation or warranty or any other obligation
or agreement of Acquiror under the Merger Agreement or that
would result in any of the conditions to the obligations of
Acquiror under the Merger Agreement not being fulfilled and
(iii) in favor of any other matter relating to the
consummation of the Transactions with respect to which the
Acquiror Stockholders may be entitled to vote. The Acquiror
Stockholder acknowledges receipt and review of a copy of the
Merger Agreement.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF THE TRUST
The Trust hereby represents and warrants to Acquiror as
follows:
SECTION 2.1. Authority Relative to This Agreement.
The Trust has all necessary power and authority to execute
and deliver this Agreement, to perform its obligations
hereunder and to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement by the
Trust and the consummation by the Trust of the transactions
contemplated hereby have been duly and validly authorized by
the Trust (including any approvals required to be given by
the trustees of the Trust), and no other proceedings on the
part of the Trust are necessary to authorize the execution
and delivery of this Agreement or to consummate such
transactions. This Agreement has been duly and validly
executed and delivered by the Trust and, assuming the due
authorization, execution and delivery hereof by each other
party hereto, constitutes a legal, valid and binding
obligation of the Trust (and the trustees of Trust in their
capacities as such), enforceable against the Trust 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 conveyance
and preferential transfers, and (y) for the limitations
imposed by general principles of equity. The Trust has
allowed Acquiror to review a complete copy of the trust
agreement establishing the Trust and evidence of its
authority to enter into this Agreement. Acquiror agrees to
hold the contents of such trust agreement in complete
confidence.
SECTION 2.2. No Conflict.
(a) The execution and delivery of this Agreement by
the Trust do not, and the performance of this Agreement by
the Trust will not, (i) conflict with or violate the trust
agreement establishing the Trust, (ii) conflict with or
violate any law, rule, regulation, order, judgment or decree
applicable to the Trust or by which the Trust's Company
Shares are bound or affected or (iii) result in any breach
of or constitute a default (or an event that with notice or
lapse of time or both would become a default) under, or give
to others any rights of termination, amendment, acceleration
or cancellation of, or result in the creation of a lien or
encumbrance on any of the Trust's Company Shares pursuant
to, any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other
instrument or obligation to which the Trust is a party or by
which the Trust or the Trust's Company Shares are bound or
affected, except, in the case of clauses (ii) and (iii), for
any such conflicts, violations, breaches, defaults or other
occurrences which would not prevent or delay the performance
by the Trust of the Trust's obligations under this
Agreement.
(b) The execution and delivery of this Agreement by
the Trust do not, and the performance of this Agreement by
the Trust will not, require any consent, approval,
authorization or permit of, or filing with or notification
to, any federal, state, local or foreign regulatory body,
except (i) filings with the SEC under the Exchange Act and
(ii) where the failure to obtain such consents, approvals,
authorizations or permits, or to make such filings or
notifications, would not prevent or delay the performance by
the Trust of the Trust's obligations under this Agreement.
SECTION 2.3. Title to the Company Shares. The Trust
is the owner of the Company Shares, free and clear of all
security interests, liens, claims, pledges, options, rights
of first refusal, agreements, limitations on voting rights,
charges and other encumbrances (collectively, "Liens") of
any nature whatsoever. The Trust has not appointed or
granted any proxy, which appointment or grant is still
effective, with respect to the Company Shares. The Trust
has sole voting power with respect to the Company Shares,
and the person executing this Agreement on behalf of the
Trust has the power to direct the voting of the Company
Shares.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE ACQUIROR STOCKHOLDER
The Acquiror Stockholder hereby represents and warrants
to the Company as follows:
SECTION 3.1. Authority Relative to This Agreement.
The Acquiror Stockholder has all necessary power and
authority to execute and deliver this Agreement, to perform
its obligations hereunder and to consummate the transactions
contemplated hereby. The execution and delivery of this
Agreement by the Acquiror Stockholder and the consummation
by the Acquiror Stockholder of the transactions contemplated
hereby have been duly and validly authorized by the Acquiror
Stockholder, and no other proceedings on the part of the
Acquiror Stockholder are necessary to authorize the
execution and delivery of this Agreement or to consummate
such transactions. This Agreement has been duly and validly
executed and delivered by the Acquiror Stockholder and,
assuming the due authorization, execution and delivery
hereof by each other party hereto, constitutes a legal,
valid and binding obligation of such Acquiror Stockholder
enforceable against the Acquiror Stockholder 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 conveyance
and preferential transfers, and (y) for the limitations
imposed by general principles of equity. The Acquiror
Stockholder has provided the Company with complete copies of
its Certificate of Incorporation and Bylaws and evidence of
its authority to enter into this Agreement.
SECTION 3.2. No Conflict.
(a) The execution and delivery of this Agreement by
the Acquiror Stockholder do not, and the performance of this
Agreement by the Acquiror Stockholder shall not, (i)
conflict with or violate the charter or by-laws of the
Acquiror Stockholder, (ii) conflict with or violate any law,
rule, regulation, order, judgment or decree applicable to
the Acquiror Stockholder or by which the Acquiror Shares are
bound or affected or (iii) result in any breach of or
constitute a default (or an event that with notice or lapse
of time or both would become a default) under, or give to
others any rights of termination, amendment, acceleration or
cancellation of, or result in the creation of a lien or
encumbrance on any of Acquiror Shares pursuant to, any note,
bond, mortgage, indenture contract, agreement, lease,
license, permit, franchise or other instrument or obligation
to which the Acquiror Stockholder is a party or by which the
Acquiror Stockholder or by which Acquiror Shares are bound
or affected, except, in the case of clauses (ii) and (iii),
for any such conflicts, violations, breaches, defaults or
other occurrences which would not prevent or delay the
performance by such Acquiror Stockholder of such Acquiror
Stockholder's obligations under this Agreement.
(b) The execution and delivery of this Agreement by
the Acquiror Stockholder do not, and the performance of this
Agreement by the Acquiror Stockholder will not, require any
consent, approval, authorization or permit of, or filing
with or notification to, any federal, state, local or
foreign regulatory body, except (i) where the failure to
obtain such consents, approvals, authorizations or permits,
or to make such filings or notifications, would not prevent
or delay the performance by the Acquiror Stockholder of its
obligations under this Agreement or (ii) filings with the
SEC under the Exchange Act.
SECTION 3.3. Title to the Acquiror Shares. The
Acquiror Stockholder is the owner of the Acquiror Shares
free and clear of all Liens whatsoever, except that
1,000,000 shares of Class A Common Stock (the "Pledged
Stock") are pledged to PNC Bank, N.A. pursuant to a loan
agreement dated April 23, 1992 and a collateral pledge
agreement dated as of the same date (together, the "Loan
Agreements"). PNC Bank, N.A. has the right to vote the
Pledged Stock upon the occurrence of an event of default
under the Loan Agreements. The Acquiror Stockholder has
sole voting power with respect to the Acquiror Shares or has
the power to direct the voting of the Acquiror Shares. The
Acquiror Stockholder has not appointed or granted any proxy,
which appointment or grant is still effective, with respect
to the Acquiror Shares. The Acquiror Stockholder has sole
voting power with respect to the Acquiror Shares, and the
person executing this Agreement on behalf of the Acquiror
Stockholder has the power to direct the voting of the
Acquiror Shares.
ARTICLE 4
COVENANTS OF THE TRUST
SECTION 4.1. No Inconsistent Agreement. The Trust
hereby covenants and agrees that, except as otherwise
contemplated by this Agreement, the Trust shall not enter
into any voting agreement or grant a proxy or power of
attorney with respect to the Trust's Company Shares which is
inconsistent with this Agreement.
SECTION 4.2. Transfer of Title. The Trust hereby
covenants and agrees that the Trust shall not transfer
ownership of any of its Company Shares unless (i) the
transferee agrees in writing to be bound by the terms and
conditions of this Agreement or (ii) such transfer of
ownership will not affect the Trust's ability to approve of
the Merger and the other Transactions with respect to which
the Trust may be entitled to vote without regard to the vote
of the other stockholders of the Company. Nothing else
contained in this Agreement shall be construed to prohibit
any transfer permitted by this Section 4.2.
ARTICLE 5
COVENANTS OF THE ACQUIROR STOCKHOLDER
SECTION 5.1. No Inconsistent Agreement. The Acquiror
Stockholder hereby covenants and agrees that, except as
contemplated by this Agreement, such Acquiror Stockholder
shall not enter into any voting agreement or grant a proxy
or power of attorney with respect to the Acquiror Shares
which is inconsistent with this Agreement.
SECTION 5.2. Transfer of Title. The Acquiror
Stockholder hereby covenants and agrees that (i) such
Acquiror Stockholder shall not transfer ownership of any of
the Acquiror Shares unless the transferee agrees in writing
to be bound by the terms and conditions of this Agreement or
(ii) such transfer of ownership will not affect Acquiror
Stockholder's ability to approve of the Merger and the other
Transactions with respect to which the Acquiror Stockholder
may be entitled to vote without regard to the vote of the
other stockholders of Acquiror. Nothing else contained in
this Agreement shall be construed to prohibit any transfer
permitted by this Section 5.2.
ARTICLE 6
MISCELLANEOUS
SECTION 6.1. Termination. This Agreement shall
terminate on the earliest to occur of (i) the date of
consummation of the Merger, (ii) the date which is two years
from the date hereof, and (iii) the date of the termination
of the Merger Agreement.
SECTION 6.2. Specific Performance. The parties
hereto agree that irreparable damage would occur in the
event any provision of this Agreement was not performed in
accordance with the terms hereof and that the parties shall
be entitled to specific performance of the terms hereof, in
addition to any other remedy at law or in equity.
SECTION 6.3. Entire Agreement. This Agreement
constitutes the entire agreement between the parties and
supersedes all prior written and oral and all
contemporaneous oral agreements and understandings with
respect to the subject matter hereof.
SECTION 6.4. Amendment. This Agreement may not be
amended except by an instrument in writing signed by all the
parties hereto.
SECTION 6.5. Severability. If any term or other
provision of this Agreement is invalid, illegal or incapable
of being enforced by any rule of law or public policy, all
other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the
economic or legal substance of the transactions contemplated
hereby is not affected in any manner materially adverse to
any party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being
enforced, the parties hereto shall negotiate in good faith
to modify this Agreement so as to effect the original intent
of the parties as closely as possible in an acceptable
manner to the end that the transactions contemplated hereby
are fulfilled to the extent possible.
SECTION 6.6. Governing Law. This Agreement shall be
governed by and construed in accordance with the laws of (i)
in the case of the Trust's Obligations, the State of
Delaware, and (ii) in the case of the Acquiror Stockholder's
obligations, the State of Pennsylvania, regardless of the
laws that might otherwise govern under principles of
conflicts of law applicable hereto.
SECTION 6.7. 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.
SECTION 6.8. 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.
SECTION 6.9. 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 with answerback, by express or overnight mail
delivered by a nationally recognized air courier (delivery
charges prepaid) or by registered or certified mail (postage
prepaid, return receipt requested) to the respective parties
as follows: (a) if to the Trust, to it at 312 Walnut
Street, 28th Floor, Cincinnati, Ohio, attention: Donald E.
Meihaus, Secretary-Treasurer, (b) if to the Acquiror
Stockholder, to it at 11 North Market Street, Suite 1219,
Wilmington, Delaware, 19801, with a copy to Davis Polk &
Wardwell, 450 Lexington Avenue, New York, New York 10017,
attention: William L. Taylor, Esq., (c) if to Acquiror, to
it at 1500 Market Street, Philadelphia, Pennsylvania, 19102,
attention: Stanley Wang, Esq., with a copy to Davis Polk &
Wardwell, 450 Lexington Avenue, New York, New York 10017,
attention: William L. Taylor, Esq., and (d) if to the
Company, to it at 312 Walnut Street, 28th Floor, Cincinnati,
Ohio, attention: M. Denise Kuprionis, Secretary, 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 or by air courier shall be
deemed effective on the first business day at the place at
which such notice or communication is 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.
SECTION 6.10. Assignments. This Agreement shall not
be assigned by operation of law or otherwise.
SECTION 6.11. 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 or shall confer upon any person any
right, benefit or remedy of any nature whatsoever under or
by reason of this Agreement.
IN WITNESS WHEREOF, the parties have caused this
Agreement to be duly executed as of the date first written
above.
COMCAST CORPORATION
By: /s/ Robert S. Pick
Name: Robert S. Pick
Title: Vice President
THE E.W. SCRIPPS COMPANY
By: /s/ Lawrence A. Leser
Name: Lawrence A. Leser
Title: Chairman and
Chief Executive Officer
SURAL CORPORATION
By: /s/ Brian L. Roberts
Name: Brian L. Roberts
Title: Vice President
THE EDWARD W. SCRIPPS TRUST
By: /s/ Robert P. Scripps
Name: Robert P. Scripps
Title: Trustee
EXHIBIT F
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this
"Agreement"), dated as of ____________________, is made by
and between Comcast Corporation, a Pennsylvania corporation
(the "Company"), and The Edward W. Scripps Trust (the
"Trust").
WHEREAS, this Agreement is being entered into
pursuant to the Agreement and Plan of Merger, dated as of
October 28, 1995, among The E.W. Scripps Company, Scripps
Howard, Inc., and the Company (the "Merger Agreement");
WHEREAS, it is intended by the Company and the
Trust that this Agreement shall become effective immediately
upon the issuance of the Common Stock of the Company to be
issued pursuant to Article I of the Merger Agreement.
NOW, THEREFORE, in consideration of the premises
and the mutual covenants herein contained and other good and
valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as
follows:
1 Definitions. As used in this Agreement:
a. "Commission" means the Securities and Exchange
Commission.
b. "Common Stock" means the Class A Special Common
Stock, par value $1.00 per share, of the Company.
c. "Person" means a natural person, a partnership, a
corporation, an association, a joint stock company, a trust,
an estate, a joint venture, an unincorporated organization
or other entity or a governmental entity or any department,
agency or political subdivision thereof.
d. "Registrable Shares" means, at any particular time
at which notice has been given pursuant to Section 2 or 3
hereunder, any of the following which are held by the Trust:
(i) shares of Common Stock issued pursuant to the Merger;
(ii) shares of Common Stock issued in lieu of cash dividends
on other Registrable Shares pursuant to a dividend
reinvestment plan adopted by the Company; (iii) shares of
Common Stock then outstanding which were issued as, or upon
the conversion or exercise of other securities issued as, a
dividend or other distribution with respect to or in
replacement of other Registrable Shares; (iv) shares of
Common Stock then issuable upon conversion or exercise of
other securities which were issued as a dividend or other
distribution with respect to or in replacement of other
Registrable Shares, and (v) any equity securities of the
Company issued or issuable with respect to the securities
referred to in clauses (i) through (iv) by way of a stock
dividend or stock split or in connection with a combination
of shares, recapitalization, merger, consolidation or other
reorganization. For purposes of this Agreement, the Trust
will be deemed to be a holder of Registrable Shares whenever
it has the unqualified right to acquire such Registrable
Shares (by conversion or otherwise, but disregarding any
legal restrictions upon the exercise of such right), whether
or not such acquisition has actually been effected.
e. "Registration Expenses" has the meaning ascribed
to it in Section 6 of this Agreement.
f. "Securities Act" means the Securities Act of 1933,
as amended, and the rules and regulations thereunder.
2. Demand Registrations.
a. Requests for Registration. From and after the
date hereof, the Trust may make a written request from time
to time for registration under the Securities Act of all or
part of its Registrable Shares. Each such request will
specify the number of Registrable Shares to be registered
and the intended method of distribution thereof. All
registrations requested pursuant to this Section 2(a) are
referred to herein as "Demand Registrations." Demand
Registrations shall be on any form for which the Company
then qualifies and which counsel for the Company shall deem
appropriate and available for the sale of the Registrable
Shares to be registered thereunder in accordance with the
intended method of distribution thereof; provided that the
Company will include in any short-form registration such
additional customary information as the Trust may reasonably
request after consultation with the managing underwriter, in
the case of any underwritten public offering, or with the
investment banker, in the case of any non-underwritten
offering, in order to facilitate the sale of such
securities; and provided further that the Company shall not
be required to file any such registration as a shelf
registration under Rule 415 of the Securities Act.
b. Registrations. A maximum of three Demand
Registrations may be requested by the Trust. A registration
will not count as one of the Demand Registrations requested
by the Trust until it has become effective and unless either
(i) the Trust has registered and sold at least 90% of the
Registrable Shares it requests be included in such
registration or (ii) the registration has remained effective
for at least 30 days. The Company will pay all Registration
Expenses in connection with any registration initiated as a
Demand Registration requested hereunder. Should a Demand
Registration not become effective due to the failure of the
Trust to perform its obligations under this Agreement or the
inability of the Trust to reach agreement with the
underwriters on price or other customary terms for such
transaction (provided that if the registration does not
become effective because of such inability then, on one
occasion at the election of the Trust, it shall not count as
a Demand if the Trust pays the Company for all of the
Registration Expenses in respect thereof), or in the event
the Trust withdraws or does not pursue the request for the
Demand Registration (in each of the foregoing cases,
provided that at such time the Company is in compliance in
all material respects with its obligations under this
Agreement), then such Demand Registration shall be deemed to
have been effected. Each Demand Registration must be in
respect of Registrable Shares with a fair market value in
excess of $100,000,000.
c. Pre-emption. The Company will have the right to
pre-empt any Demand Registration with a primary registration
by delivering written notice of such intention to the Trust
indicating that the Company has identified a specific
business need and use for the proceeds of the sale of such
securities within five business days after the Company has
received from the Trust a request for such Demand
Registration. In the ensuing primary registration, the
Trust will have such piggyback registration rights as are
set forth in Section 3 hereof. Upon the Company's pre-
emption of a requested Demand Registration, such requested
registration will not count as one of the Demand
Registrations.
d. Priority on Demand Registrations. If a Demand
Registration is an underwritten public offering and the
managing underwriters advise the Company in writing that in
their opinion the number of Registrable Shares and other
securities requested to be included in such offering would
materially and adversely affect the success of the offering,
the Company will include in such registration, prior to the
inclusion of any securities which are not owned by the
Trust, the number of Registrable Shares requested to be
included which in the opinion of such underwriters can be
sold without materially and adversely affecting the success
of the offering. Whenever a registration requested pursuant
to this Section is for an underwritten offering, only
securities which are to be distributed by the underwriters
may be included in the registration.
e. Restrictions on Registrations. The Company will
not be obligated to effect any Demand Registration within
twelve months after the effective date of a previous Demand
Registration. The Company may postpone for up to 150 days
the filing or effectiveness of a registration statement for
a Demand Registration if the Company reasonably believes
that it would be detrimental or otherwise disadvantageous to
the Company or its shareholders for such a registration
statement to be filed as expeditiously as possible;
provided, however, the Company cannot exercise its right to
postpone the filing or effectiveness of a registration
statement for a Demand Registration more than once during
any twelve-month period.
f. Selection of Underwriters. The Trust shall have
the right to select the investment banker(s) and manager(s)
to administer any public offering of equity securities of
the Company pursuant to a Demand Registration, subject to
the Company's approval, which approval shall not be
unreasonably withheld.
3. Piggyback Registrations.
a. Right to Piggyback. Subject to the remaining
provisions of this Section 3, whenever the Company proposes
to register its Common Stock under the Securities Act for
its own account (other than a registration on Form S-4 or S-
8 or any substitute or successor form that may be adopted by
the Commission) or for the account of any of holders of its
Common Stock, the Company will give written notice to the
Trust of its intention to effect such a registration and
will include in such registration, on the same terms and
conditions as apply to the Company's or such holder's Common
Stock, all Registrable Shares that the Trust requests be
included within 15 days after the receipt of the Company's
notice (a "Piggyback Registration"). The Company is
required to include Registrable Shares requested by the
Trust in an unlimited number of Piggyback Registrations. If
the Company shall determine in its sole discretion not to
register or to delay the registration of such Common Stock,
the Company may, at its election, provide written notice of
such determination to the Trust and (i) in the case of a
determination not to effect a registration, shall thereupon
be relieved of the obligation to register such Registrable
Shares, and (ii) in the case of a determination to delay a
registration, shall thereupon be permitted to delay
registering any Registrable Shares for the same period as
the delay in respect of Common Stock being registered for
the Company's own account.
b. Priority on Primary Registrations. If a Piggyback
Registration is an underwritten primary offering on behalf
of the Company, and the managing underwriters for the
Offering advise the Company in writing that in their opinion
the number of securities requested to be included in such
registration would materially and adversely affect the
success of the offering, the Company will include in such
registration (i) first, the securities the Company proposes
to sell, and (ii) second, Registrable Shares and other
securities such that the included amount of each shall be in
proportion to the amount of Registrable Shares and other
securities requested to be included in such registration.
c. Priority on Secondary Registrations. If a
Piggyback Registration is an underwritten secondary offering
on behalf of holders of the Company's securities other than
holders of Registrable Shares, and the managing underwriters
advise the Company in writing that in their opinion the
number of securities requested to be included in such
registration would materially and adversely affect the
success of the offering, the Company will include in such
registration (i) first, the securities included therein held
by the holders other than the Trust, and (ii) second,
Registrable Shares and other securities such that the
included amount of each shall be in proportion to the amount
of Registrable Shares and other securities requested to be
included in such registration.
d. Selection of Underwriters. If a Piggyback
Registration is an underwritten primary registration on
behalf of the Company, and the Trust elects to register and
sell Registrable Shares in such registration, the Company
will have the right to select the investment banker(s) and
manager(s) to administer the offering.
4. Holdback Agreements.
a. The Trust agrees not to offer, sell,
contract to sell or otherwise dispose of any equity
securities of the Company, or any securities convertible
into or exchangeable or exercisable for such securities,
during the 15-day period prior to, and the 120-day period
beginning on the effective date of, any underwritten
registration (except as part of such underwritten
registration), unless the underwriters managing the
registered public offering otherwise agree. In order to
ensure compliance with the provisions of this Section 4(a),
the Company hereby agrees to notify the Trust as to the
status and proposed effective date of any registration
statement of the Company which is filed with the Commission.
b. The Company hereby agrees not to effect,
except pursuant to employee benefit plans and registrations
on Form S-4, any public sale or distribution of any
securities of the same class as (or otherwise similar to)
the Registrable Shares, or any securities which, with
notice, lapse of time and/or payment of monies, are
exchangeable or exercisable for or convertible into any such
securities during the 15-day period prior to, and during the
90-day period commencing on, the effective date of a
registration statement filed with the Commission in
connection with an underwritten offering effected pursuant
to Section 2 of this Agreement (except as part of such
underwritten offering). The Company agrees to use its
reasonable efforts to cause each holder of five percent or
more of the outstanding shares of any equity security (or
any security convertible into or exchangeable or exercisable
for any equity security) of the Company, and each holder of
any equity security (or any security convertible into or
exchangeable or exercisable for any equity security) of the
Company purchased from the Company at any time other than in
a public offering, to enter into a similar agreement with
the Company.
5. Registration Procedures. Whenever the Trust has
requested that any Registrable Shares be registered pursuant
to this Agreement, the Company will use its reasonable best
efforts to effect the registration of such Registrable
Shares in accordance with the intended method of disposition
thereof, and pursuant thereto the Company will as
expeditiously as possible:
a. Prepare and file with the Commission a
registration statement with respect to such Registrable
Shares and cause such registration statement to become and
remain effective for such period, not to exceed 60 days, as
may be reasonably necessary to effect the sale of such
securities and to include in any such registration statement
all information which, in the opinion of counsel to the
Trust and counsel to the Company, is reasonably required to
be included therein under the Securities Act or which the
managing underwriter, in the case of an underwritten public
offering, or the investment banker, in the case of a non-
underwritten offering, reasonably requests be included
therein to facilitate the sale of such securities and which,
in the opinion of counsel to the Company and counsel to the
Trust, is customary and may appropriately be included
therein under the Securities Act; provided, however, if (i)
the effective date of any registration statement filed
pursuant to a Demand Registration would otherwise be at
least 45 calendar days, but fewer than 90 calendar days,
after the end of the Company's fiscal year, and (ii) the
Securities Act requires the Company to include audited
financials as of the end of such fiscal year or the
Securities Act permits the use of, and the Trust has
requested that such registration statement include, audited
financials as of the end of such fiscal year, the Company
may delay the filing of such registration statement for such
period as is reasonably necessary to include therein its
audited financial statements for such fiscal year;
b. Prepare and file with the Commission such
amendments and supplements to such registration statement
and the prospectus used in connection therewith as may be
necessary to keep such registration statement effective for
a period of not less than 60 days and comply with the
provisions of the Securities Act applicable to the Company
with respect to the disposition of all securities covered by
such registration statement during such period in accordance
with the intended methods of disposition set forth in such
registration statement;
c. Furnish to the Trust and the underwriters such
number of copies of such registration statement, each
amendment and supplement thereto, the prospectus included in
such registration statement (including each preliminary
prospectus) as they may reasonably request in order to
facilitate the disposition of the Registrable Shares;
d. Use reasonable best efforts to register or qualify
such Registrable Shares under such other securities or blue
sky laws of such jurisdictions as the Trust reasonably
requests and do any and all other acts and things which may
be reasonably necessary or advisable to enable the Trust to
consummate the disposition in such jurisdictions of the
Registrable Shares (provided, however, that the Company will
not be required to (i) qualify generally to do business in
any jurisdiction where it would not otherwise be required to
qualify but for this Section 4(d), (ii) subject itself to
taxation in any such jurisdiction, or (iii) consent to
general service of process in any such jurisdiction);
e. Otherwise use its best efforts in connection with
each registered offering of Registrable Shares hereunder to
comply with all applicable rules and regulations of the
Commission, as the same may hereafter be amended, including
section 11(a) of the Securities Act and Rule 158 thereunder.
f. Use its best efforts to cause all such Registrable
Shares to be listed on each securities exchange or market
trading system on which similar securities issued by the
Company are then listed;
g. Enter into such customary agreements (including
underwriting agreements that contain such representations
and warranties by the Company and such other terms and
provisions as are customarily contained in agreements of
this type, including, but not limited to, indemnities to the
effect and to the extent provided in Section 7, provisions
for the delivery of officers' certificates, opinions of
counsel and accountants' "comfort" letters and holdback
arrangements) and take all such other actions as are
reasonably required in order to expedite or facilitate the
disposition of such Registrable Shares;
h. Subject to confidentiality restrictions reasonably
required by the Company, and subject to the reasonableness
of the request therefor, make available at reasonable times
for inspection by the Trust, any underwriter participating
in any disposition pursuant to such registration statement,
and any attorney, accountant or other agent retained by the
Trust or any such underwriter, all pertinent financial and
other records, pertinent corporate documents and properties
of the Company, and cause the Company's officers, directors,
employees and independent accountants to supply all
information reasonably requested by the Trust or any such
underwriter, attorney, accountant or agent in connection
with such registration statement;
i. Notify the Trust promptly after it shall receive
notice thereof, of the time when such registration statement
or amendment thereto has become effective or a prospectus or
supplement to any prospectus forming a part of such
registration statement has been filed;
j. Notify the Trust of any request by the Commission
for the amending or supplementing of such registration
statement or prospectus or for supplemental information;
k. Prepare and file with the Commission, promptly
upon the request of the Trust, any amendments or supplements
to such registration statement or prospectus which, in the
opinion of counsel selected by the Trust and counsel to the
Company, is reasonably required under the Securities Act or
the rules and regulations thereunder in connection with the
distribution of Registrable Shares by the Trust;
l. Notify the Trust of the occurrence of any event
during any time when a prospectus relating to such
securities is required to be delivered under the Securities
Act, as the result of which any such prospectus or any other
prospectus as then in effect would include an untrue
statement of a material fact or omit to state any material
fact necessary to make the statements therein, in the light
of the circumstances in which they were made, not
misleading, and in such event, prepare and promptly file
with the Commission and promptly notify the Trust of the
filing of such amendment or supplement to such registration
statement or prospectus as may be necessary to correct any
such statements or omissions. The Trust agrees that, upon
receipt of any notice from the Company of the occurrence of
any event of the kind described in the preceding sentence,
the Trust will forthwith discontinue the offer and sale of
Registrable Shares pursuant to the registration statement
covering such Registrable Shares until receipt by the Trust
and the Underwriters of the copies of such supplemented or
amended prospectus and, if so directed by the Company, the
Trust will deliver to the Company all copies, other than
permanent file copies then in the Trust's possession, of the
most recent prospectus covering such Registrable Shares at
the time of receipt of such notice. In the event the
Company shall give such notice, the Company shall extend the
60 day period during which such registration statement shall
be maintained effective as provided in Section 5(a) hereof
by the number of days during the period from and including
the date of the giving of such notice to the date when the
Company shall make available to the Trust such supplemented
or amended prospectus;
m. Advise the Trust, promptly after it shall receive
notice or obtain knowledge thereof, of the issuance of any
stop order by the Commission or any state authority or
agency suspending the effectiveness of such registration
statement or the initiation or threatening of any proceeding
for such purpose and promptly use all reasonable efforts to
prevent the issuance of any stop order or to obtain its
withdrawal if such stop order should be issued;
n. At the request of any underwriter in connection
with an underwritten offering, furnish on the date or dates
provided for in the underwriting agreement: (i) an opinion
of counsel, addressed to the underwriters, covering such
customary matters as such underwriters may reasonably
request; and (ii) a comfort letter or letters from the
independent certified public accountants of the Company
addressed to the underwriters, covering such customary
matters as such underwriters and sellers may reasonably
request, in which letters such accountants shall state,
without limiting the generality of the foregoing, that they
are independent certified public accountants within the
meaning of the Securities Act and that in the opinion of
such accountants the financial statements and other
financial data of the Company included in the registration
statement, the prospectus, or any amendment or supplement
thereto comply in all material respects with the applicable
accounting requirements of the Commission;
o. Subject to confidentiality restrictions reasonably
required by the Company, at reasonable times and upon
reasonable notice, and as necessary to permit a reasonable
investigation with respect to the Company and its business
in connection with the preparation and filing of such
registration statement, make available for inspection by the
Trust, by any managing underwriter or other underwriters
participating in any disposition of Registrable Shares, and
by any attorney, accountant or other agent, representative
or advisor retained by the Trust or any such underwriters,
all pertinent financial and other records and corporate
documents of the Company; and to the extent reasonably
required, cause the Company's officers, directors and
employees to discuss pertinent aspects of the Company's
business with the Trust and any such underwriter,
accountant, agent, representative or advisor in connection
with such registration statement;
p. Permit the Trust, to the extent the Trust, in the
judgment of its counsel, might be deemed to be a "control
person" of the Company (within the meaning of section 15 of
the Securities Act or section 20 of the Exchange Act), to
participate in the preparation of such registration
statement and include therein material, furnished to the
Company in writing which, in the reasonable judgment of the
Trust and its counsel, and counsel to the Company, is
required to be included therein; and
q. If any registration statement refers to the Trust
by name or otherwise as the holder of any securities of the
Company, and if the Trust reasonably believes it is or may
be deemed to be a control person in relation to, or an
Affiliate of, the Company, then the Trust shall have the
right to require (i) insertion in such registration
statement of language, in form and substance reasonably
satisfactory to the Trust, to the effect that the ownership
by the Trust of such securities is not to be construed as
and is not intended to be a recommendation by the Trust of
the investment quality of, or the relative merits and risks
attendant to the purchase of, the Company's securities
covered thereby, and that such ownership does not imply
that the Trust will assist in meeting any future financial
or operating requirements of the Company, or (ii) in the
case where the reference to the Trust by name or otherwise
is not required by the Securities Act or any similar federal
or state statute then in effect, the deletion of the
reference to the Trust.
r. Cooperate in the marketing efforts of
the underwriters and the Trust, including, without
limitation, by making available, as reasonably requested by
the underwriters and the Trust, the senior executive
officers of the Company for attendance at, and active
participation with the underwriters in, informational or so-
called "roadshow" meetings with prospective purchasers of
the Registrable Shares being offered, including meeting with
groups of such purchasers or with individual purchasers,
providing information and answering questions about the
Company at such meetings, and traveling to locations in the
United States and abroad as reasonably selected by the
underwriters.
6. Registration Expenses.
All expenses of the Company incident to the
Company's performance of or compliance with this Agreement,
including, without limitation, all registration and filing
fees, fees and expenses of compliance with securities or
blue sky laws, all fees and expenses associated with listing
securities on exchanges or Nasdaq, all fees and other
expenses associated with filings with the NASD (including,
if required, the fees and expenses of any "qualified
independent underwriter" and its counsel) printing expenses,
messenger and delivery expenses, and fees and disbursements
of counsel for the Company and its independent certified
public accountants (and the expenses of any special audits
or reviews performed by such accountants required by or
incidental to such performance and compliance), underwriters
(excluding discounts and commissions attributable to the
securities included in such registration) and other Persons
retained by the Company (all such expenses being herein
called "Registration Expenses"), will be borne by the
Company. In addition, the Company will pay its internal
expenses (including, without limitation, all salaries and
expenses of its officers and employees performing legal or
accounting duties), the expense of any annual audit or
quarterly review, and the expense of any liability insurance
obtained by the Company.
7. Indemnification and Contribution.
a. The Company agrees to indemnify the Trust, its
officers and trustees against all losses, claims, damages,
liabilities and expenses (including, without limitation,
reasonable attorneys' fees except as limited by Section
7(c)) caused by any untrue or alleged untrue statement of a
material fact contained in any registration statement,
prospectus or preliminary prospectus relating to the
Registrable Shares or any amendment thereof or supplement
thereto or any omission or alleged omission of a material
fact required to be stated therein or necessary to make the
statements therein not misleading, except insofar as the
same are caused by or contained in or based upon any
information furnished in writing to the Company by the Trust
or any underwriter expressly for use therein or by the
Trust's or underwriter's failure to deliver a copy of the
registration statement or prospectus or any amendments or
supplements thereto after the Company has furnished the
Trust or underwriter with a sufficient number of copies of
the same. In connection with an underwritten offering, the
Company will indemnify such underwriters, their officers and
directors and each Person who controls such underwriters
(within the meaning of the Securities Act) to the same
extent as provided above with respect to the indemnification
of the Trust. In connection with an underwritten offering,
the underwriters shall be required to agree to indemnify the
Trust, its officers and trustees, and the Company, its
officers and directors and each Person who controls the
Company (within the meaning of the Securities Act) to the
same extent as the Company agrees to indemnify such
underwriters in this Section 7(a), but only as to statements
contained in or omitted from any registration statement,
prospectus or preliminary prospectus or any amendment
thereof or supplement thereto in reliance upon written
information furnished to the Company by such underwriters
for use in the preparation thereof. The reimbursements
required by this Section 7(a) will be made by periodic
payments during the course of the investigation or defense,
as and when bills are received or expenses incurred.
b. In connection with any registration statement in
which the Trust is participating, it will furnish to the
Company in writing such information, questionnaires and
affidavits as the Company reasonably requests for use in
connection with any such registration statement or
prospectus and will indemnify the Company, its directors and
officers and each Person who controls the Company (within
the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act) against any losses, claims,
damages, liabilities and expenses (including, without
limitation, attorneys' fees except as limited by Section
7(c)) caused by any untrue or alleged untrue statement of a
material fact contained in any registration statement,
prospectus or preliminary prospectus relating to the
Registrable Shares or any amendment thereof or supplement
thereto or any omission or alleged omission of a material
fact required to be stated therein or necessary to make the
statements therein not misleading, but only to the extent
that such untrue statement or omission is contained in any
information or affidavit so furnished in writing by or on
behalf of the Trust. The Trust also agrees to indemnify and
hold harmless any underwriters of the Registrable Shares,
their officers and directors and each person who controls
such underwriters on substantially the same basis as that of
the indemnification of the Company provided in this Section
7(b).
c. Any Person entitled to indemnification hereunder
will (i) give prompt written notice to the indemnifying
party of any claim with respect to which it seeks
indemnification and (ii) unless in such indemnified party's
reasonable judgment a conflict of interest between such
indemnified and indemnifying parties may exist with respect
to such claim, permit such indemnifying party to assume the
defense of such claim with counsel reasonably satisfactory
to the indemnified party. If such defense is assumed, the
indemnifying party will not be subject to any liability for
any settlement made by the indemnified party without its
consent (but such consent will not be unreasonably
withheld). An indemnifying party who is not entitled to, or
elects not to, assume the defense of a claim will not be
obligated to pay the fees and expenses of more than one
counsel for all parties indemnified by such indemnifying
party with respect to such claim.
d. The indemnification provided for under this
Agreement will remain in full force and effect regardless of
any investigation made by or on behalf of the indemnified
party or any officer, director or controlling Person of such
indemnified party and will survive the transfer of
securities. The Company also agrees to make such provisions
as are reasonably requested by any indemnified party for
contribution to such party in the event the Company's
indemnification is unavailable for any reason.
e. If the indemnification from the
indemnifying party as provided in this Section 7 is
unavailable or is otherwise insufficient to hold harmless
any Person entitled to indemnification in respect of any
losses, claims, damages, liabilities or expenses referred to
therein, then the indemnifying party shall, to the fullest
extent permitted by law, contribute to the amount paid or
payable by such indemnified party as a result of such
losses, claims, damages, liabilities or expenses in such
proportion as is appropriate to reflect the relative fault
of the indemnifying party and the Person entitled to
indemnification in connection with the actions which
resulted in such losses, claims, damages, liabilities or
expenses, as well as any other relevant equitable
considerations. The relative fault of such indemnifying
party shall be determined by reference to, among other
things, whether any action in question, including any untrue
or alleged untrue statement of a material fact or omission
or alleged omission to state a material fact, has been made,
or relates to information supplied by such indemnifying
party, and the parties, relative intent, knowledge, access
to information and opportunity to correct or prevent such
action. The amount paid or payable by a party as a result
of the losses, claims, damages, liabilities and expenses
referred to above shall be deemed to include any legal or
other fees or expenses reasonably incurred by such party in
connection with any investigation or preceding. The parties
hereto agree that it would not be just and equitable if
contribution pursuant to this Section 7(e) were determined
by pro rata allocation or by any other method of allocation
which does not take account of the equitable considerations
referred to in this Section 7(e). 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.
8. Compliance with Rule 144. At the request of the
Trust, the Company will (i) forthwith furnish a written
statement of its compliance with the filing requirements of
the Commission as set forth in Rule 144 or any similar rules
or regulations hereafter adopted by the Commission as such
may be amended from time to time, (ii) make available to the
public and the Trust such information and (iii) take such
further actions as the Trust shall reasonably request as
will enable the Trust to be permitted to make sales pursuant
to Rule 144 or such similar rules and regulations. All
sales of Registrable Shares by the Trust must be effected in
compliance with applicable law.
9. Participation in Underwritten Registrations. The
Trust may not participate in any registration hereunder
which is underwritten unless it (a) agrees to sell
Registrable Shares on the basis provided in any underwriting
arrangements approved by the Person or Persons entitled
hereunder to approve such arrangements, (b) completes and
executes all questionnaires, powers of attorney, custody
agreements, indemnities, underwriting agreements and other
documents required under the terms of such underwriting
arrangements, and (c) furnishes in writing to the Company
such information regarding the Trust, the plan of
distribution of the Registrable Shares and other information
as the Company may from time to time reasonably request or
as may be legally required in connection with such
registration. The Trust will have the right to select the
managing underwriters to administer any Demand Registration,
subject to the approval of the Company, which approval will
not be unreasonably withheld.
10. Prohibition on Transfer.
(a) The Trust hereby agrees that it will
not, during the period commencing on the date hereof and
ending one year after the date hereof, offer, pledge,
encumber, sell, contract to sell, sell any option or
contract to purchase, purchase any option to sell or
otherwise dispose of, directly or indirectly, an amount of
Registrable Shares such that the total Registrable Shares
owned by the Trust at any time during such one year period
falls below the Continuity Amount. For purposes hereof,
"Continuity Amount" means the amount of shares of Common
Stock issued pursuant to the Merger representing 50% of the
aggregate value of the consideration issued in the Merger
(including, for this purpose, any shares of Common Stock
issued in the Merger, any payments to holders of Dissenting
Shares and any payments in lieu of fractional shares).
(b) From time to time, if the Company
intends to purchase shares of Common Stock in the open
market pursuant to the share repurchase program referred to
in Section 6.31 (the "Program") of the Merger Agreement, the
Company may deliver a notice (a "Black-Out Notice") to the
Trust setting forth the period during which the Company
anticipates making such purchases (a "Black-Out Period").
The Trust agrees that it will not sell any Registrable
Shares in the open market during a Black-Out Period. In
order to be effective, the Company must deliver a Black-Out
Notice by facsimile to [ ] at [ ], to be confirmed by
telephone at [ ] by no later than 4:00 p.m. the day prior
to the commencement of the Black-Out Period. Each trading
day within a Black-Out Period is referred to herein as a
"Black-Out Day". In no event shall the Company cause more
than 10 trading days in any one calendar month to be Black-
Out Days. The Company will promptly inform the Trust of any
early termination of a Black-Out Period. The Trust agrees
to hold information regarding Black-Out Periods in
confidence. The Company represents that the Program will be
terminated no later than six months from the date hereof.
11. No Inconsistent Agreements. The Company will not
hereafter enter into any agreement with respect to its
securities which is inconsistent with or otherwise
materially interferes with the rights granted to the Trust
in this Agreement.
12. Remedies. Any Person having rights under any
provision of this Agreement will be entitled to enforce such
rights specifically, to recover damages caused by reason of
any breach of any provision of this Agreement, and to
exercise all other rights granted by law.
13. Amendments and Waivers. Except as otherwise
expressly provided herein, the provisions of this Agreement
may be amended or waived at any time only by the written
agreement of the Company and the Trust.
14. Successors and Assigns. Except as otherwise
expressly provided herein, all covenants and agreements
contained in this Agreement by or on behalf of any of the
parties hereto will bind and inure to the benefit of the
respective successors and assigns of the parties hereto,
whether so expressed or not.
15. Final Agreement. This Agreement constitutes the
final agreement of the parties concerning the matters
referred to herein, and supersedes all prior agreements and
understandings.
16. Severability. Whenever possible, each provision
of this Agreement will be interpreted in such manner as to
be effective and valid under applicable law, but if any
provision of this Agreement is held to be prohibited by or
invalid under applicable law, such provision will be
ineffective only to the extent of such prohibition or
invalidity, without invalidating the remainder of this
Agreement.
17. Descriptive Headings. The descriptive headings of
this Agreement are inserted for convenience of reference
only and do not constitute a part of and shall not be
utilized in interpreting this Agreement.
18. Notices. Except as provided in Section 10(b), any
notices required or permitted to be sent hereunder shall be
delivered personally or mailed, certified mail, return
receipt requested, or delivered by overnight courier service
to the following addresses, or such other addresses as shall
be given by notice delivered hereunder, and shall be deemed
to have been given upon delivery, if delivered personally,
three business days after mailing, if mailed, or one
business day after delivery to the courier, if delivered by
overnight courier service:
If to the Trust, at its address set forth on the
stock record books of the Company;
with a copy to:
John H. Burlingame, Esq.
Baker & Hostetler
3200 National City Center
1900 East Ninth Street
Cleveland, Ohio 44114-3485
If to the Company, to:
Comcast Corporation
1500 Market Street
Philadelphia, Pennsylvania 19102
Attention: Stanley Wang, Esq.
with a copy to:
Davis Polk & Wardwell
450 Lexington Avenue
New York, New York 10017
Attention: William L. Taylor, Esq.
19. Governing Law. The validity, meaning and effect
of this Agreement shall be determined in accordance with the
laws of the State of New York applicable to contracts made
and to be performed in that state without giving effect to
the principles of conflicts of laws thereof.
20. Counterparts. This Agreement may be executed in
any number of counterparts, each of which when so executed
and delivered shall be deemed an original, and such
counterparts together shall constitute one instrument. Each
party shall receive a duplicate original of the counterpart
copy or copies executed by it and the Company.
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be duly executed on their respective
behalf, by their respective officers thereunto duly
authorized, as of the day and year first set forth above.
THE EDWARD W. SCRIPPS TRUST
By:________________________________
COMCAST CORPORATION
By:________________________________
EXHIBIT G
BOARD REPRESENTATION AGREEMENT
This Board Representation Agreement, dated as of ____,
1995 (this "Agreement") is by and among Comcast Corporation,
a Pennsylvania corporation ("Acquiror"), Sural Corporation,
a Delaware corporation, (the "Acquiror Stockholder") and The
Edward W. Scripps Trust (the "Trust").
WHEREAS, the Acquiror Stockholder owns 1,845,037 shares
of Acquiror's Class A Common Stock, par value $1.00 per
share, 5,315,772 shares of Acquiror's Class A Special Common
Stock, par value $1.00 per share, and 8,786,250 shares of
Acquiror's Class B Common Stock, par value $1.00 per share
(all shares of such stock now owned and which may hereafter
be acquired by the Acquiror Stockholder prior to the
termination of this Agreement are referred to herein as the
"Acquiror Shares");
WHEREAS, The E.W. Scripps Company, a Delaware
corporation (the "Company"), Scripps Howard, Inc., an Ohio
corporation ("SHI") and wholly owned subsidiary of the
Company, and Acquiror have entered into a Merger Agreement
dated October 28, 1995 (the "Merger Agreement"), which
provides, among other things, that the Company will merge
with and into Acquiror (the "Merger") (this and other
capitalized terms used and not defined herein shall have the
meanings given to such terms in the Merger Agreement);
WHEREAS, in connection with the Merger, the Trust will
be entitled to receive shares of Class A Special Common
Stock, $1.00 par value per share, of Acquiror (all such
shares received by the Trust in the Merger, the "Trust
Shares"), and it is the desire of the Trust that it have the
right to designate certain persons for election as members
of the board of directors of Acquiror (the "Acquiror Board")
following the consummation of the Merger;
WHEREAS, pursuant to the Merger Agreement, Acquiror has
agreed to cause ___________________ (the "Initial Trust
Designee") to be elected to the Acquiror Board as set forth
herein following consummation of the Merger; and
WHEREAS, it is a condition to the Company's and SHI's
obligation to consummate the Merger that the parties hereto
enter into this Agreement;
NOW THEREFORE, in consideration of the foregoing and
the mutual covenants and agreements contained herein, and
intending to be legally bound hereby, the parties hereto
hereby agree as follows:
1. Representation On Acquiror Board. To the extent
permitted under applicable law the Trust shall be entitled
to representation on the Acquiror Board as follows: the
Initial Trust Designee shall be proposed for election to the
Acquiror Board either: (i) if following the consummation of
the Merger there are one or more vacancies on such Board or
the members of such Board have the power to create new
directorships, at the first meeting of the Acquiror Board
following consummation of the Merger, at which the Initial
Trust Designee shall be elected or (ii) if there are no such
vacancies or power to create new directorships, at the first
meeting of stockholders of Acquiror held after consummation
of the Merger. Following such election of the Initial Trust
Designee, in each instance in which individuals are
nominated for election to the Acquiror Board, Acquiror shall
cause to be nominated for election to the Acquiror Board
that number of individuals designated by the Trust (the
"Trust Designee(s)") equal to the Appointment Number (as
defined below) as of the date of nomination, in the manner
and subject to the conditions set forth in this Section 1.
Acquiror shall cause such Trust Designee(s) to be validly
and timely nominated for election to the Acquiror Board in
the same manner as other proposed directors are nominated,
shall recommend to its stockholders the election to the
Acquiror Board of the Trust Designee(s) and shall not revoke
or qualify such recommendation. Acquiror shall use its best
efforts to solicit from its stockholders proxies in favor of
the election of all the Trust Designee(s), and shall take
such other action as may be reasonably necessary to cause
such Trust Designee(s) to be so elected. If any Initial
Trust Designee or Trust Designee who serves on the Acquiror
Board ceases, for any reason, to serve on the Acquiror Board
(other than as a result of the expiration of the specified
term of such Initial Trust Designee or Trust Designee),
Acquiror shall take all actions reasonably necessary to
cause the vacancy to be filled, as soon as practicable, by
an individual designated by the Trust (a "Replacement Trust
Designee"), but in any event no later than the first meeting
of the Acquiror Board following cessation of service by such
Designee. Each Initial Trust Designee, Trust Designee or
Replacement Trust Designee shall be reasonably acceptable to
Acquiror and shall be eligible to serve on the Acquiror
Board under applicable law.
For purposes hereof, "Appointment Number" means one,
provided that the Appointment Number shall be two if the
product of (i) the total number of directors constituting
the Acquiror Board less the director position(s) held by the
designee(s) of the Trust and (ii) the quotient equal to (A)
the number of Long-term Shares held by the Trust at the time
of nomination divided by (B) the aggregate number of
Acquiror Common Shares outstanding at such time on a fully
diluted basis shall be equal to or greater than 1.75. For
purposes hereof, (i) "Acquiror Common Shares" means shares
of any class of common stock of Acquiror and (ii) "Long-term
Shares" means, as of any date, Acquiror Common Shares that
have been owned for not less than one year.
From time to time upon the reasonable written request
by Acquiror, the Trust will provide Acquiror with an opinion
of counsel (the "Opinion") reasonably acceptable to
Acquiror, which opinion shall state that the nomination and
appointment of a proposed Initial Trust Designee, Trust
Designee or Replacement Trust Designee, as the case may be,
to the Acquiror Board is permitted under applicable law.
Except as provided in the following paragraph, all
obligations on the part of Acquiror and the Acquiror
Stockholder under this Agreement shall be suspended until
the Opinion shall have been received by it.
If the Trust shall not be permitted under applicable
law to representation on the Acquiror Board as described
herein, or if the Trust should elect from time to time
observer status in lieu of a seat on the Board by written
notice to Acquiror, then to the extent permitted by law, the
Trust shall for the period of this Agreement be entitled to
designate an observer who shall be entitled to notice of and
to attend all meetings of the Acquiror Board and to receive
or review, as the case may be, copies of all documents
provided to members of the Acquiror Board. Such observer
shall enter into customary confidentiality arrangements with
the Company.
2. Termination of Rights. The rights of the Trust
under Section 1 hereof shall terminate upon the earliest of
(i) the date on which the Trust ceases to own at least 50%
of the Trust Shares (as equitably adjusted for stock splits,
combinations, dividends, corporate reorganizations and
similar events), (ii) the date on which the fourth annual
meeting of Acquiror's Board is convened after the date
hereof and (iii) the date on which the Trust elects to
terminate Section 1 of this Agreement by notice to the other
parties hereto.
3. Agreements of Acquiror Stockholder. To the extent
permitted under applicable law: the Acquiror Stockholder
hereby agrees that, until such time as the rights of the
Trust terminate pursuant to Section 2 hereof, at any meeting
of the stockholders of Acquiror, however called, and in any
action by consent of the stockholders of Acquiror, for the
election of directors, the Aquiror Stockholder shall vote
its Acquiror Shares in favor of the election to the Acquiror
Board of each Trust Designee and Replacement Trust Designee,
as the case may be.
4. Representations and Warranties of Acquiror.
Acquiror represents and warrants to the Trust that:
(a) Acquiror has all necessary corporate power and
authority to execute and deliver this Agreement and to
perform its obligations hereunder. The execution and
delivery of this Agreement by Acquiror and the performance
of its obligations hereunder have been duly and validly
authorized by Acquiror, and no other proceedings on the part
of Acquiror are necessary to authorize the execution and
delivery of this Agreement or to perform such obligations
except approval of Acquiror Board of a resolution increasing
the size of Acquiror Board as provided herein and election
of the designees of the Trust as provided herein. This
Agreement has been duly and validly executed and delivered
by Acquiror and, assuming the due authorization, execution
and delivery hereof by each other party hereto, constitutes
a legal, valid and binding obligation of Acquiror
enforceable against Acquiror 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, (y) for the limitations imposed by
general principles of equity and (z) as the same may be
limited under the Rules and Regulations regarding cross-
ownership of cable television systems and television
stations.
(b) The execution and delivery of this Agreement by
Acquiror do not, and the performance of this Agreement by
Acquiror will not, (i) conflict with or violate the Articles
of Incorporation or By-laws of Acquiror, (ii) except as
described in Section 4(c), conflict with or violate any law,
rule, regulation, order, judgment or decree applicable to
Acquiror or by which any of Acquiror's property may be bound
or (iii) result in any breach of or constitute a default (or
an event that with notice or lapse of time or both would
become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation of, or
result in the creation of a lien or encumbrance on any of
the Acquiror's properties pursuant to, any note, bond,
mortgage, indenture, contract, agreement, lease, license,
permit, franchise or other instrument or obligation to which
Acquiror is a party or by which Acquiror or Acquiror's
properties are bound or affected, except, in the case of
clauses (ii) and (iii), for any such conflicts, violations,
breaches, defaults or other occurrences which would not
prevent or delay the performance by Acquiror of its
obligations under this Agreement.
(c) The execution and delivery of this Agreement by
Acquiror do not, and the performance of this Agreement by
Acquiror will not, require any consent, approval,
authorization or permit of, or filing with or notification
to, any federal, state, local or foreign regulatory body,
except (i) where the failure to obtain such consents,
approvals, authorizations or permits, or to make such
filings or notifications, would not prevent or delay the
performance by Acquiror of Acquiror's obligations under this
Agreement, (ii) filings with the SEC under the Exchange Act
and (iii) 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 the performance of the Acquiror's obligations
hereunder.
5. Representations and Warranties of the Acquiror
Stockholder. The Acquiror Stockholder represents and
warrants to the Trust as follows:
(a) The Acquiror Stockholder has all necessary power
and authority to execute and deliver this Agreement and to
perform its obligations hereunder. The execution and
delivery of this Agreement by the Acquiror Stockholder and
the performance of the Acquiror Stockholder's obligations
hereunder have been duly and validly authorized by the
Acquiror Stockholder, and no other corporate proceedings on
the part of the Acquiror Stockholder are necessary to
authorize the execution and delivery of this Agreement or to
perform such obligations. This Agreement has been duly and
validly executed and delivered by the Acquiror Stockholder
and, assuming the due authorization, execution and delivery
hereof by each other party hereto, constitutes a legal,
valid and binding obligation of the Acquiror Stockholder
enforceable against the Acquiror Stockholder 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, (y) for the limitations imposed
by general principles of equity and (z) as the same may be
limited under the Rules and Regulations regarding cross-
ownership of cable television systems and television
stations.
(b) The execution and delivery of this Agreement by
the Acquiror Stockholder do not, and the performance of this
Agreement by the Acquiror Stockholder will not, (i) conflict
with or violate the charter or by-laws of the Acquiror
Stockholder, (ii) except as described in Section 5(c) below,
conflict with or violate any law, rule, regulation, order,
judgment or decree applicable to such Acquiror Stockholder
or by which the Acquiror Shares are bound or affected or
(iii) result in any breach of or constitute a default (or an
event that with notice or lapse of time or both would become
a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation of, or
result in the creation of a lien or encumbrance on any
Acquiror Shares pursuant to, any note, bond, mortgage,
indenture contract, agreement, lease, license, permit,
franchise or other instrument or obligation to which the
Acquiror Stockholder is a party or by which the Acquiror
Shares are bound or affected, except, in the case of clauses
(ii) and (iii), for any such conflicts, violations,
breaches, defaults or other occurrences which would not
prevent or delay the performance by the Acquiror Stockholder
of its obligations under this Agreement.
(c) The execution and delivery of this Agreement by
the Acquiror Stockholder do not, and the performance of this
Agreement by such Acquiror Stockholder will not, require any
consent, approval, authorization or permit of, or filing
with or notification to, any federal, state, local or
foreign regulatory body, except (i) where the failure to
obtain such consents, approvals, authorizations or permits,
or to make such filings or notifications, would not prevent
or delay the performance by the Acquiror Stockholder of its
obligations under this Agreement, (ii) filings with the SEC
under the Exchange Act and (iii) 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 the performance of the
Acquiror Stockholder's obligations hereunder.
(d) The Acquiror Stockholder is the owner of the
Acquiror Shares free and clear of all security interests,
liens, claims, pledges, options, rights of first refusal,
agreements, limitations on voting rights, charges and other
encumbrances of any nature whatsoever, except that 1,000,000
shares of Class A Common Stock (the "Pledged Stock") are
pledged to PNC Bank, N.A. pursuant to loan agreement dated
April 23, 1992 and a collateral pledge agreement dated as of
the same date (together, the "Loan Agreements"). PNC Bank,
N.A. has the right to vote the Pledged Stock upon the
occurrence of an event of default under the Loan Agreements.
The Acquiror Stockholder has sole voting power with respect
to the Acquiror Shares or has the power to direct the voting
of the Acquiror Shares. The Acquiror Stockholder has not
appointed or granted any proxy, which appointment or grant
is still effective, with respect to the Acquiror Shares,
other than pursuant to the Voting Agreement dated October
28, 1995 among the parties hereto and the Company. The
Acquiror Stockholder has sole voting power with respect to
the Acquiror Shares, and the person executing this Agreement
on behalf of the Acquiror Stockholder has the power to
direct the voting of such Acquiror Shares.
6. No Prohibition on Transfers. Nothing in this
Agreement shall prevent the Acquiror Stockholder from
offering, selling, transferring, pledging or in any other
way disposing of or placing encumbrances upon the Acquiror
Shares.
7. Compensation, Expenses, Insurance. The Initial
Trust Designee, Trust Designees and Replacement Trust
Designees serving on the Acquiror Board shall be entitled to
fees and other compensation, participation in option, stock
or other benefit plans for which directors are eligible,
reimbursement of expenses, and directors and officers
liability insurance on an equal basis with other non-
employee members of the Acquiror Board.
8. Voting for Permitted Amendments.
(a) If from time to time any of the Permitted
Amendments (as defined in the Merger Agreement) is proposed
for approval by the shareholders of Acquiror, the Trust
shall (i) be present, in person or represented by proxy, at
the stockholder meetings of Acquiror so that all shares of
Acquiror Common Stock beneficially owned by the Trust
("Trust Common Shares") shall be counted for the purpose of
determining the presence of a quorum at such meetings and
(ii) vote or cause to be voted, or consent with respect to,
all Trust Common Shares in favor of the approval of such
Permitted Amendment. The Trust will not enter into any
agreement, commitment or understanding that limits, directs
or restricts the rights of the Trust to vote any Trust
Common Shares so long as such Trust Shares are owned by the
Trust. The provisions of this subsection (a) shall
terminate two years from the date hereof.
(b) In connection with any shareholder vote regarding
the approval of a Permitted Amendment, the Trust will not,
singly or as part of a partnership, limited partnership or
other group (as such terms are used in Section 13(d)(3) of
the Exchange Act), directly or indirectly make, or in any
way participate in any "solicitation" of "proxies" to vote
(as such terms are defined in Rule 14a-1 under the Exchange
Act), solicit any consent or communicate with or seek to
advise or influence any person or entity with respect to the
voting of any Acquiror Common Securities or become a
"participant" in any "election contest" (as such terms are
defined or used in Rule 14a-11 under the Exchange Act) with
respect to Acquiror.
(c) The Trust acknowledges that it has reviewed
Acquiror's Articles of Incorporation and Proxy Statement
dated May 19, 1995.
9. Provisions Specifically Enforceable.
(a) The obligations of Acquiror and the Acquiror
Stockholder under this Agreement are unique. Acquiror and
the Acquiror Stockholder acknowledge that it would be
extremely difficult or impracticable to measure the
resulting damages caused by any breach of this Agreement.
Acquiror and the Acquiror Stockholder agree that, in the
event of a breach of this Agreement by Acquiror or the
Acquiror Stockholder, the Trust, in addition to any other
available rights or remedies, shall be entitled to specific
performance of the obligations of Acquiror and the Acquiror
Stockholder under this Agreement, and Aquiror and the
Acquiror Stockholder expressly agree that a remedy in
damages will not be adequate.
(b) The remedies provided in this Section 8 are
cumulative and are in addition to any other remedies in law
or equity which may be available to the Trust. The election
of one or more remedies shall not bar the use of other
remedies unless circumstances make the remedies
incompatible.
10. Choice of Law. This Agreement shall be governed
by and construed in accordance with the laws of the State of
Pennsylvania regardless of the laws that might otherwise
govern under principles of conflicts of law applicable
hereto.
11. Attorney's Fees. In any action to enforce the
terms of this Agreement, the prevailing party shall be
entitled to recover its attorneys' fees and court costs and
other nonreimbursable litigation expenses, such as expert
witness fees and investigation expenses.
12. Merger And Modification. This Agreement sets
forth the entire agreement between the parties relating to
the subject matter hereof, and supersedes all other oral or
written provisions. This Agreement may be modified or
terminated only in a writing signed by all parties.
13. Binding on Successors. This Agreement shall be
binding upon Acquiror, the Acquiror Stockholder and their
respective successors and assigns.
14. Rules Of Construction. All section captions are
for reference only, and shall not be considered in
construing this Agreement.
15. 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 with
answerback, by express or overnight mail delivered by a
nationally recognized air courier (delivery charges prepaid)
or by registered or certified mail (postage prepaid, return
receipt requested) to the respective parties as follows:
(a) if to the Trust, to it at 312 Walnut Street, 28th Floor,
Cincinnati, Ohio, attention: Donald E. Meihaus, Secretary-
Treasurer, (b) if to the Acquiror Stockholder, to it at 11
North Market Street, Suite 1219, Wilmington, Delaware,
19801, with a copy to Davis Polk & Wardwell, 450 Lexington
Avenue, New York, New York, 10017, attention: William L.
Taylor, Esq., (c) if to Acquiror, to it at 1500 Market
Street, Philadelphia, Pennsylvania, 19102, attention:
Stanley Wang, Esq., with a copy to Davis Polk & Wardwell,
450 Lexington Avenue, New York, New York, 10017, attention:
William L. Taylor, Esq., and (d) if to the Company, to it in
care of Acquiror at the address set forth above, 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 or by air courier shall be
deemed effective on the first business day at the place at
which such notice or communication is 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.
16. Counterparts. This Agreement may be executed
contemporaneously in two or more counterparts, each of which
shall be deemed to constitute an original, but all of which
together shall constitute one and the same agreement.
IN WITNESS WHEREOF, the parties have caused this
Agreement to be duly executed as of the date first written
above.
COMCAST CORPORATION
By:_________________________
Name:
Title:
SURAL CORPORATION
By:_________________________
Name:
Title:
THE EDWARD W. SCRIPPS TRUST
By:_________________________
Name:
Title: Trustee
