EXHIBIT 3
PARENTS AGREEMENT
This PARENTS AGREEMENT (the "Agreement") is entered into as of the 31st
day of January, 1996, by COMCAST CORPORATION, a Pennsylvania corporation
("Comcast Parent") and SPRINT CORPORATION, a Kansas corporation ("Sprint
Parent").
WHEREAS, subsidiaries of each of Comcast Parent, Sprint Parent, Xxx
Communications, Inc., a Delaware corporation ("Cox Parent"), and Tele-
Communications, Inc., a Delaware corporation ("TCI Parent", and together
with Cox Parent and Comcast Parent, the "Cable Parents") (such
subsidiaries, the "Partners") have entered into that certain Agreement of
Limited Partnership of MajorCo, L.P., dated as of March 28, 1995, as
amended by that certain First Amendment to Agreement of Limited
Partnership, dated as of August 31, 1995 (the "Prior Partnership
Agreement"), pursuant to which MajorCo, L.P., a Delaware limited
partnership ("MajorCo") was formed;
WHEREAS, as of the date hereof, the Partners are further amending the
Prior Partnership Agreement and restating it in its entirety (as so amended
and restated, the "Partnership Agreement") and, in connection therewith, each
Cable Parent has agreed to make certain undertakings to Sprint Parent, and
Sprint Parent has agreed to make certain undertakings to each Cable Parent.
NOW, THEREFORE, in consideration of the mutual promises and agreements
of the parties, and other good and valuable consideration the receipt of which
is hereby acknowledged, Sprint Parent and Comcast Parent do hereby agree as
follows:
SECTION 1. Definitions.
(a) The following capitalized words and phrases as used in this
Agreement have the meanings indicated below:
"Advanced Data Services" has the meaning set forth in Schedule 1.
"Brand" of any Person means a trademark, tradename, service xxxx and/or
logo of such Person.
"Bulk Purchaser" means a purchaser of cable television service that
provides such service to multiple dwelling units (whether in one or more
buildings or whether in one or more complexes or locations) of which it is the
owner or for which it acts as manager or agent or with which it otherwise has
a relationship, by contract or otherwise.
"Cable Subsidiary" means (i) any Controlled Affiliate of Comcast Parent
that owns a cable television system and (ii) any Person that Comcast Parent
or its Controlled Affiliates has a unilateral right to cause to comply with
Section 2 hereof with respect to cable television systems owned by such
Person.
"Controlled Affiliate" means (i) when used with respect to Comcast
Parent, each Subsidiary of Comcast Parent, (ii) when used with respect to
Sprint Parent, each Subsidiary of Sprint Parent, and (iii) when used with
respect to any Person in Section 2 hereof, including Comcast Parent and
Sprint Parent, any Affiliate of such Person that such Person can directly
or indirectly unilaterally cause to take or refrain from taking any of the
actions required, prohibited or otherwise restricted by such Section,
whether through ownership of voting securities, contractually or otherwise.
"Entertainment Services" has the meaning set forth in Schedule 1.
"Excluded Businesses" has the meaning set forth in Schedule 1.
"Households Passed" means, as of any relevant date, the aggregate number
of residential dwelling units to which the facilities of Comcast Parent's
Cable Subsidiaries either (i) are capable, as of such date, of providing Local
Telephony Service by means of an existing customer drop or other similar
connection or (ii) could legally provide Local Telephony Service using a
customer drop or other similar connection no more than two hundred (200) feet
in length (exclusive of any wiring within the applicable structure and
assuming that the applicable owner or occupant consented to receipt of Local
Telephony Service). For purposes of this definition, each residential
dwelling unit in a multiple dwelling unit that is otherwise within the
foregoing definition will be counted as one Household Passed.
"IXC" means each of the following Persons, each successor to the long
distance telephony business of any such Person and each of the respective
Affiliates of each such Person or successor: AT&T Corp., MCI Communications
Corporation, British Tele-Communications plc, Worldcom, Inc., Cable & Wireless
plc, LCI International Inc. and Frontier Corporation.
"Local JV" has the meaning set forth in Section 3.
"Local Telephony Services" has the meaning set forth in Schedule 1.
"Long Distance Telephony Services" has the meaning set forth in Schedule
1.
"Non-Exclusive Services" has the meaning set forth in Schedule 1.
"RBOC" means each of the following Persons, each successor to the local
exchange carrier business of any such Person and each of the respective
Affiliates of each such Person or successor: each BOC, GTE Corporation and
Frontier Corporation.
"Rights of Use" means rights to use the distribution facilities of a
Cable Subsidiary's cable system to provide Local Telephony Services or
Advanced Data Services, as applicable, to end users connected to such
distribution facilities.
"Satellite Carrier" means each of the following Persons, each successor
to the direct broadcast satellite business of any such Person and each of the
respective Affiliates of each such Person or successor: DIRECTV, Inc., U.S.
Satellite Broadcasting, Inc. and EchoStar Communications Corporation.
"Sprint LECs" means, as of any relevant date, those local exchange
carriers that are Subsidiaries of Sprint Parent.
"Teleport Contribution Agreement" means that certain Contribution
Agreement among the Cable Partners, MajorCo and NewTelco, L.P., dated as of
March 28, 1995.
"Term" means the period commencing on the date hereof and ending on the
date this Agreement terminates in accordance with Section 13.
"Territory" shall mean the United States, including all territories and
possessions thereof, except for Puerto Rico, but excluding as of any date
those geographic areas in which a Sprint LEC is providing Local Telephony
Services primarily through its owned facilities at such date.
(b) The following capitalized words and phrases as used in this
Agreement have the meanings ascribed thereto in the Partnership Agreement:
"Affiliate", "BOC", "Business Day", "Cable Partner", "Comcast Area", "MFJ",
"Parent", "Person", "Sprint Brand", "Subsidiary", "Substantial Portion",
"Teleport".
(c) The definitions in this Section 1 and elsewhere in this Agreement
shall apply equally to both the singular and plural forms of the terms
defined. Whenever the context may require, any pronoun shall include the
corresponding masculine, feminine and neuter forms. The words "include",
"includes" and "including" shall be deemed to be followed by the phrase
"without limitation". The words "herein", "hereof" and "hereunder" and words
of similar import refer to this Agreement (including the Schedules) in its
entirety and not to any part hereof unless the context shall otherwise
require. All references herein to Sections and Schedules shall be deemed
references to Sections of, and Schedules to, this Agreement unless the context
shall otherwise require. Unless the context shall otherwise require, any
references to any agreement or other instrument or statute or regulation are
to it as amended and supplemented from time to time (and, in the case of a
statute or regulation, to any corresponding provisions of successor statutes
or regulations). Any reference in this Agreement to a "day" or number of
"days" (without the explicit qualification of "Business") shall be interpreted
as a reference to a calendar day or number of calendar days. If any action or
notice is to be taken or given on or by a particular calendar day, and such
calendar day is not a Business Day, then such action or notice shall be
deferred until, or may be taken or given on, the next Business Day.
SECTION 2. Undertakings.
(a) Exclusive Packaging/Marketing.
(i) Comcast Parent agrees that, during the Term, it will not
directly or through any Subsidiary formed for such purpose, and it will
cause its Cable Subsidiaries (and each other Controlled Affiliate of
Comcast Parent that is authorized to offer or promote, or package, any
of the products or services of its Cable Subsidiaries) not to, (A) offer
or promote, or package any of the products or services of such Cable
Subsidiary with, or act as sales agent for, any Long Distance Telephony
Services or Local Telephony Services in the Territory under the Brand of
an RBOC or an IXC, other than the Sprint Brand, or (B) package any of
the Non-Exclusive Services referred to in clause (2), (3), (4), (5),
(6), (7) or (8) of the definition of such term in Section V of Schedule
1 under the Brand of an RBOC or an IXC, other than the Sprint Brand,
with Local Telephony Services being offered by Comcast Parent or its
Controlled Affiliates in the Territory under the Brand of Comcast
Parent, an Affiliate of Comcast Parent or Teleport, in each case except
as permitted by Section 2(a)(ii) and Section 4 and except as may
otherwise be required by applicable law, and provided that Comcast
Parent shall not be deemed to be in violation of this covenant solely
because advertising relating to RBOC- or IXC-Branded Local Telephony
Services, Long Distance Telephony Services or Non-Exclusive Services
being offered or promoted, or packaged, by Comcast Parent or any of such
Cable Subsidiaries or other such Controlled Affiliates solely in one or
more geographic areas outside of the scope of this Section 2(a)(i)
appears in or is broadcast to one or more geographic areas within the
scope of this Section 2(a)(i) so long as such advertising is designed to
reach primarily potential customers in such geographic areas outside the
scope of this Section 2(a)(i). The inclusion, whether alone or in a
package, of offers or promotions of Long Distance Telephony Services or
Local Telephony Services under the brand of an RBOC or an IXC (including
advertising on advertising availabilities sold by a Cable Subsidiary) in
programming or other content contained in products or services of a
Cable Subsidiary shall not be deemed to be a violation of this Section
2(a)(i) unless such offers or promotions (other than offers or
promotions included in the content of a shopping channel or similar
service) would otherwise involve a violation of this Section. The
foregoing shall not be construed to in any way limit the right of
Comcast Parent and any of its Controlled Affiliates that are
providing Local Telephony Service in a market to provide any of its
customers in that market with any Long Distance Telephony Service,
including an IXC-branded Long Distance Telephony Service, that such
customer may request and to receive payment therefor from the
provider of such Long Distance Telephony Service in the form of an
access fee or such other form, including commission, as may be
customary in the particular market in the absence of a pre-existing
sales agency agreement with a provider. Comcast Parent and Sprint
Parent further agree to negotiate in good faith for Comcast Parent
and its Cable Subsidiaries to act, and Sprint Parent agrees that
Comcast Parent and its Cable Subsidiaries will be authorized to act,
as non- exclusive sales agents for the Long Distance Telephony
Services of Sprint Parent and its Controlled Affiliates during the
Term on a most favored nation commission basis and on such other
terms as the parties may agree. The immediately preceding sentence
sets forth the intention of the parties with respect to such sales
agency but is not intended to create any legally binding obligation
or give rise to any legal or equitable right or remedy.
(ii) Except as otherwise required by law, Sprint Parent
agrees that, during the Term, Sprint Parent will not, and will cause
its Controlled Affiliates not to, offer or promote, or package any of
the products or services of Sprint Parent or its Controlled
Affiliates with, any Entertainment Services under the Brand of an
RBOC or a Satellite Carrier in any geographic area in the Territory
in which a Cable Subsidiary of Comcast Parent is providing cable
television service as of the date hereof or as of any relevant date
hereafter; provided that Sprint Parent shall not be deemed to be in
violation of this covenant solely because advertising relating to
RBOC- or Satellite Carrier-Branded Entertainment Services being
offered or promoted, or packaged, by Sprint Parent or its Controlled
Affiliates solely in one or more geographic areas outside of the
scope of this Section 2(a)(ii) appears in or is broadcast to one or
more geographic areas within the scope of this Section 2(a)(ii) so
long as such advertising is designed to reach primarily potential
customers in such geographic areas outside the scope of this Section
2(a)(ii); and provided, further, that Sprint Parent shall not be
deemed in violation of this covenant as a result of its offering,
promoting or packaging any of its products or services with
Entertainment Services under an RBOC- or Satellite Carrier-Brand in a
particular geographic area if each of the following conditions is
met: (x) at the time Sprint Parent or its Controlled Affiliates
entered into the agreement with such RBOC or Satellite Carrier, no
Cable Subsidiary was providing cable television services in the
geographic area covered by such agreement and (y) subject to the
following sentence, such agreement is terminated by Sprint Parent or
its applicable Controlled Affiliate as soon as practicable after
notice (specifically referring to this Section of this Agreement) is
given to it by Comcast Parent of the applicability of this covenant
to such geographic area, but in any event not later than (A) one year
following the giving of such notice or (B) such later date as the
agreement may be terminated by Sprint Parent or the applicable
Controlled Affiliate without penalty, but this clause (B) shall only
apply if Sprint Parent was unable to negotiate on commercially
reasonable terms an earlier right of termination that would have
complied with clause (A), notwithstanding its good faith efforts.
Notwithstanding the preceding sentence, Sprint Parent or its
Controlled Affiliate, as applicable, may elect, by notice
(specifically referring to this Section of this Agreement) given to
Comcast Parent within 60 days after its receipt of notice from
Comcast Parent pursuant to clause (y) above, not to terminate its
agreement with an RBOC or Satellite Carrier in the applicable market
unless Comcast Parent provides or causes to be provided to Sprint
Parent or its applicable Controlled Affiliate on competitive economic
terms the same or substantially similar kinds of Entertainment
Services under a Comcast Parent Brand to offer and promote, and
package with other products and services to offer and promote, to its
customers in such market. If Sprint Parent makes the foregoing
election and Comcast Parent does not make such Entertainment Services
so available within 30 days of its receipt of such notice from Sprint
Parent, then (x) Sprint Parent and its applicable Controlled
Affiliate shall not be deemed to be in breach of this Section
2(a)(ii) solely as a result of its failure to terminate its agreement
with the RBOC or Satellite Carrier with respect to the applicable
market and (y) Comcast Parent and its Controlled Affiliates shall be
released from their obligations under Section 2(a)(i) with respect to
such market, and Sprint Parent and its Controlled Affiliates shall be
released from their obligations under Section 2(a)(ii) with respect
to such market.
(b) Right of Use.
Comcast Parent agrees that, during the Term: (x) if a Cable
Subsidiary of Comcast Parent makes Rights of Use for Local Telephony
Services available on its distribution facilities in a particular
market to any Person other than (A) an Affiliate of such Cable
Subsidiary, (B) Teleport, (C) MajorCo or (D) a Local JV, Comcast Parent
will cause that Cable Subsidiary to make Rights of Use available to
Sprint Parent and its Controlled Affiliates (or, if Comcast Parent or a
Controlled Affiliate of Comcast Parent and Sprint Parent or a Controlled
Affiliate of Sprint Parent have entered a Local JV with regard to such
market, the Local JV in such market) on the same facilities in such
market for the same or similar kinds (including, subject to the
following paragraph, specifications and standards, capacity and quality
metrics) of Local Telephony Services and, if applicable, the same or
similar kinds of Non-Exclusive Services, on no less favorable terms; and
(y) if a Cable Subsidiary of Comcast Parent makes Rights of Use
available on its distribution facilities in a particular market to any
IXC or RBOC for the provision of Advanced Data Services, Comcast Parent
will cause that Cable Subsidiary to make Rights of Use available to
Sprint Parent and its Controlled Affiliates (or, if Comcast Parent or a
Controlled Affiliate of Comcast Parent and Sprint Parent or a Controlled
Affiliate of Sprint Parent have entered a Local JV with regard to such
market, the Local JV in such market) on the same facilities in such
market for the same or similar kinds (including, subject to the
following paragraph, specifications and standards, capacity and quality
metrics) of Advanced Data Services on no less favorable terms. Comcast
Parent will notify Sprint Parent immediately of any agreement that
may be reached for Rights of Use that would be subject to the
preceding sentence.
The parties understand and agree that if, by virtue of physical
limitations of the applicable facilities, the Cable Subsidiary cannot
ensure identical specifications and standards or quality metrics for
Rights of Use to multiple parties, then the Cable Subsidiary may make
economic distinctions with respect to the Rights of Use it offers that
would be taken into account in determining whether the covenant of
Comcast Parent in this Section 2(b)(i) to offer the applicable services
on no less favorable terms has been satisfied. By way of example, if an
IXC were willing to pay a premium for Rights of Use that included a
guarantee of no blocking, Sprint Parent would be required to pay that
premium in order for it to exercise its rights under this Section
2(b)(i) to obtain that guarantee on no less favorable terms,
notwithstanding that it would then be paying more for its Rights of Use
than the other IXCs that did not have such guarantee or than any other
IXC if such guarantee could not be made available to more than one
Person.
(ii) Sprint Parent agrees that if, during the Term, it or any of
its Controlled Affiliates proposes to provide Local Telephony Services
on a resale basis in any market in the Territory in which a Cable
Subsidiary has facilities, it will promptly so notify Comcast Parent and
(x) if the facilities that are in place meet Sprint Parent's
specifications and standards (including time to market) for the
provision of such Local Telephony Services, then Sprint Parent will, and
will cause its Controlled Affiliates to, cooperate with Comcast Parent
in good faith to negotiate (and Comcast Parent will cooperate with
Sprint Parent in good faith to negotiate) mutually satisfactory terms
for the provision of Local Telephony Services under the Sprint Brand
using the facilities of such Cable Subsidiary and (y) if the facilities
that are in place do not meet Sprint Parent's specifications and
standards (including time to market) for the provision of Local
Telephony Services or if the parties have not reached agreement upon the
terms of the provision of such services as contemplated by clause (x)
above, then Sprint Parent will or will cause its applicable Controlled
Affiliate to provide Comcast Parent with a non-exclusive sales agency
agreement for such Local Telephony Services on terms and conditions no
less favorable to Comcast Parent and its Controlled Affiliates than are
offered to any other non-exclusive sales agent for such Local Telephony
Services in such market, provided such obligation shall terminate if
Comcast Parent or any of its Controlled Affiliates commence the offering
of facilities-based Local Telephony Services in the applicable
geographic area. The parties acknowledge that there will be a
presumption of good faith in the negotiations pursuant to clause (x)
above and that a party will not be deemed to have failed to act in good
faith solely as a result of taking non-negotiable positions or
different or inconsistent positions with respect to different markets or
a position that is different from any position that has been accepted by
another Cable Parent. The obligations of Sprint Parent and Comcast
Parent to engage in such negotiations under this Section 2(b)(ii) with
respect to a particular market will continue for a period of 90 days
following the receipt by Comcast Parent of the notice referred to in the
first sentence of this Section 2(b)(ii) and will terminate at the end of
such 90-day period. Nothing contained in this Section 2(b)(ii) shall be
construed to restrict Sprint Parent or its Controlled Affiliates from
rolling out Local Telephony Services in any market or delay such
rollout, subject to compliance with the applicable requirements of
Section 2(a) above, provided that neither Sprint Parent nor its
Controlled Affiliates will enter into any agreements that are not
terminable by it on not less than 30 days' notice if the parties reach
agreement within the 90-day period.
SECTION 3. Local Joint Agreement; Teleport
(a) During the Term, Comcast Parent will notify Sprint Parent
whenever a Cable Subsidiary of Comcast Parent intends to upgrade its
distribution facilities for Local Telephony Services (or through some other
means offer Local Telephony Services) in a particular market (other than in
the context contemplated by Section 4(a)) but in no event earlier than one
year prior to the date it intends to commence offering Local Telephony
Services in such market. There will be a presumption that if Comcast Parent
notifies Sprint Parent that a Cable Subsidiary of Comcast Parent intends to
upgrade its distribution facilities in a particular market (or through some
other means offer Local Telephony Services) that it intends to commence
offering Local Telephony Services in such market within one year. Comcast
Parent and Sprint Parent will cooperate with each other in good faith to
negotiate mutually satisfactory terms for the provision of Local Telephony
Services under the Sprint Brand in such market using the local distribution
facilities of the applicable Cable Subsidiary (or such other means). The
parties acknowledge that there will be a presumption of good faith in such
negotiations and that a party will not be deemed to have failed to act in good
faith solely as a result of taking non-negotiable positions or different or
inconsistent positions with respect to different markets or a position that is
different from any position that has been accepted by another Cable Parent.
For a period of 90 days following Sprint Parent's receipt of the notice
required pursuant to the first sentence of this Section 3 with respect to a
particular market, Comcast Parent, Sprint Parent and their respective
Controlled Affiliates shall not negotiate with any other Person regarding the
provision of Local Telephony Services in such market; provided, however, that
Comcast Parent and Sprint Parent will commence immediately such negotiation
with respect to those markets listed on Schedule 2 attached hereto (the
"Specified Markets") and the period of exclusive negotiation with respect to
the Specified Markets shall expire on April 30, 1996. The obligations of
Comcast Parent and Sprint Parent under this Section 3 with respect to a
particular market shall terminate upon expiration of the exclusive negotiation
period provided in this Section 3 with respect to such market. The contractual
arrangements between Comcast Parent and Sprint Parent or their respective
Controlled Affiliates regarding the provision of such services in a particular
market may take the form of a local joint venture agreement or another form as
the applicable parties may negotiate and upon such terms (including economic
terms, scope, etc.) as they may agree (such joint venture or other entity
formed by, or other agreement or arrangement between, Sprint Parent and
Comcast Parent or their respective Controlled Affiliates for the purposes
contemplated by this Section 3, a "Local JV"). If Sprint Parent or any of its
Controlled Affiliates are providing Local Telephony Services on a resale basis
in a market at the time the terms of a Local JV are agreed upon with respect
to such market then Sprint Parent shall or shall cause its applicable
Controlled Affiliates to offer to transfer to the Local JV its business of
providing Local Telephony Services in such market and, at Comcast Parent's
option, the assets used in such business, at a price determined on the same
basis as would then be applicable to a transfer of a business under Section
6.3(p) of the Partnership Agreement. If Sprint Parent and Comcast Parent have
not reached agreement upon the terms of a Local JV for a particular market (an
"Unresolved Market") by the expiration of the 90-day period of exclusive
negotiation and, at that date or at any time thereafter prior to Sprint Parent
and Comcast Parent or their respective Controlled Affiliates having entered a
Local JV with respect to the Unresolved Market, Sprint Parent or one of its
Controlled Affiliates has entered a Local JV with any Cable Parent or a
Controlled Affiliate thereof with respect to a market the characteristics of
which that are relevant to the business of Local Telephony Services are
similar to those of the Unresolved Market, then Sprint Parent shall offer to
enter into or cause one of its Controlled Affiliates to enter into a Local JV
with a Controlled Affiliate of Comcast Parent for the Unresolved Market on
terms and conditions no less favorable to Comcast Parent and its Controlled
Affiliates than those Sprint Parent (or its Controlled Affiliate) has agreed
to with respect to such other similar market. Sprint Parent agrees to
disclose to Comcast Parent promptly the terms of any agreements it may reach
with Cox Parent or TCI Parent or their respective Controlled Affiliates
regarding the provision of Local Telephony Services in any market, and Comcast
Parent hereby consents to the disclosure by Sprint Parent to Cox Parent and
TCI Parent of any agreement that Comcast Parent and Sprint Parent may reach as
contemplated by this Section 3. Nothing contained in this Section 3 or in
Section 2(b)(ii) shall be construed to restrict any Controlled Affiliate of
Comcast Parent from rolling out Local Telephony Services in any market or
delay such rollout, subject to compliance with Section 2 above.
(b) It is the present goal and intention of the parties to continue to
attempt to integrate the businesses and activities of Teleport with the
business and activities of MajorCo as promptly as practicable, provided that
the parties can achieve mutually satisfactory agreements for such integration
and for the provision of Local Telephony Service in the Specified Markets.
The foregoing is intended to set forth the parties' present intentions
concerning their future efforts with respect to the achievement of their
mutual goal of integrating MajorCo and Teleport, but is not intended to and
does not create a legally binding obligation, it being understood that the
Cable Parents and their respective Controlled Affiliates remain free to pursue
activities that they, in their sole discretion, consider to be in the best
interests of Teleport and its owners, and each party remains free to
determine, in its sole discretion, to proceed, or agree that MajorCo would
proceed, with any proposed transaction involving Teleport.
Without limiting any party's ability to exercise its sole discretion
with respect to matters covered in this Section 3(b), Sprint Parent has
advised the Cable Parents that the failure of a proposed agreement regarding
Teleport to include the following may result in Sprint Parent's refusal to
enter into an agreement with respect to Teleport, were any such agreement to
be proposed: (i) the contribution to MajorCo of at least a 62.5% ownership
interest in Teleport under the same economic terms as would have applied if
the Teleport Contribution Agreement had not been terminated (which, in Sprint
Parent's opinion, would require adjustments for the loss of tax benefits
arising from the reorganization of Teleport into corporate form, if such were
to occur); (ii) governance of the Teleport interests held by MajorCo in
accordance with the current MajorCo governance provisions; (iii) modification
of the Teleport governance provisions to provide that all matters will be
resolved by simple majority vote, both at the governing board and
stockholder/partner level, and to eliminate all special rights of partners to
elect governing board members or to approve or disapprove transactions
involving stockholders/partners and their respective affiliates (provided that
such transactions are on arms' length terms); (iv) modification of the scope
and exclusivities of Teleport in a manner that rationalizes the operations of
Teleport, MajorCo and the individual wireline efforts of the Partners, which
would include the exclusion of Teleport from the wireless business, the
limitation of Teleport's residential switched activities to the New York
market, and a reconciliation of the respective activities of Teleport and the
Local JVs relating to the small business market; (v) the marketing of all of
Teleport's retail products under the Sprint Brand; and (vi) receipt of
satisfactory consents and waivers from Continental Cablevision, Inc.
("Continental") and its Subsidiaries or removal of Continental or the
applicable Subsidiary as a Teleport stockholder/partner.
SECTION 4. Certain Exceptions to Undertakings.
(a) The covenants of Comcast Parent in Sections 2 and 3 shall not
apply with respect to a Bulk Purchaser in circumstances where, in the
reasonable judgment of Comcast Parent, a Cable Subsidiary or other Controlled
Affiliate of Comcast Parent needs to offer to a Bulk Purchaser of cable
television services a package of services which include one or more Local
Telephony Services and/or Long Distance Telephony Services in order to compete
with an actual or anticipated offer to such Bulk Purchaser by a provider
unaffiliated with Comcast Parent (whether facilities-based, as a reseller or
agent or otherwise) of television/telephony services and the needed service is
not then available to Comcast Parent for inclusion in such a package from
Sprint Parent or its Affiliates on competitive economic terms. The covenants
of Comcast Parent in Sections 2(b)(i) and 3, and the rights of Sprint Parent
under such Sections, shall not become applicable solely as a result of the
provision of such services to the Bulk Purchaser.
(b) If Sprint Parent and Comcast Parent have not reached an
agreement on mutually satisfactory terms for the provision of Local
Telephony Services in a particular market through a Local JV within the
exclusive negotiation period with respect to such markets contemplated by
Section 3, then the provisions of Section 2(a)(i) will cease to apply with
respect to Long Distance Telephony Services in such market, unless Sprint
Parent makes available or causes to be made available to Comcast Parent or
its applicable Controlled Affiliate on competitive economic terms Sprint-
Branded Long Distance Telephony Services to offer and promote, and package
with other products and services to offer and promote, to its customers,
and for which it would be authorized to act as non-exclusive sales agent,
in that market.
(c) If Sprint Parent and Comcast Parent have not reached an
agreement on mutually satisfactory terms for the provision of Local
Telephony Services in a particular market through a Local JV within the
exclusive negotiation period with respect to such market contemplated by
Section 3 and Sprint Parent or any of its Controlled Affiliates is
providing (through resale or otherwise) Local Telephony Services in such
market, then the provisions of Section 2(a)(i) will cease to apply in such
market, unless Sprint Parent makes available or causes to be made available
to Comcast Parent or its applicable Controlled Affiliate on competitive
economic terms Sprint-Branded Long Distance Telephony Services to offer and
promote, and package with other products and services to offer and promote,
to its customers, and for which it would be authorized to act as non-
exclusive sales agent, in that market.
(d) Comcast Parent's obligations under this Agreement with
respect to any Person that becomes a Cable Subsidiary or Controlled
Affiliate of Comcast Parent after the date hereof and any cable television
system or facilities acquired by Comcast Parent or a Cable Subsidiary after
the date hereof shall be subject to any contrary provisions of any
agreements with Persons (other than Comcast Parent or a Controlled
Affiliate of Comcast Parent) to which such Cable Subsidiary, Controlled
Affiliate or cable television system or facilities are subject prior to the
time such Person became a Cable Subsidiary or Controlled Affiliate or such
system or facilities were acquired.
(e) Sprint Parent's obligations under this Agreement with
respect to any Person that becomes a Controlled Affiliate of Sprint Parent
after the date hereof shall be subject to any contrary provisions of any
agreements with Persons (other than Sprint Parent or a Controlled Affiliate
of Sprint Parent) to which such Controlled Affiliate is subject prior to
the time such Person became a Controlled Affiliate.
(f) Notwithstanding anything to the contrary in this
Agreement, the provisions of Section 2(a) will not apply with respect to
the Comcast Area.
SECTION 5. Consent to Jurisdiction.
(a) Each of Sprint Parent and Comcast Parent hereby
irrevocably and unconditionally submits, for itself and its property, to
the nonexclusive jurisdiction of any New York State court sitting in the
County of New York or any Federal court of the United States of America
sitting in the State of New York, and any appellate court from any such
court, in any suit, action or proceeding arising out of or relating to this
Agreement, or for recognition or enforcement of any judgment, and hereby
irrevocably and unconditionally agrees that all claims in respect of any
such suit, action or proceeding may be heard and determined in such New
York State court or, to the extent permitted by law, in such Federal court.
(b) Each of Sprint Parent and Comcast Parent hereby
irrevocably and unconditionally waives, to the fullest extent it may
legally and effectively do so, any objections which it may now or hereafter
have to the laying of venue of any suit, action or proceeding arising out
of or relating to this Agreement in any New York State court sitting in the
County of New York or any Federal court sitting in New York. Each of
Sprint Parent and Comcast Parent hereby irrevocably waives, to the fullest
extent permitted by law, the defense of an inconvenient forum to the
maintenance of such suit, action or proceeding in any such court and
further waives the right to object, with respect to such suit, action or
proceeding, that such court does not have personal jurisdiction over it.
(c) Each of Sprint Parent and Comcast Parent irrevocably
consents to service of process in the manner provided for the giving of
notices pursuant to this Agreement, provided that such service shall be
deemed to have been given only when actually received by it. Nothing in
this Agreement shall affect the right of a party to serve process in any
other manner permitted by law.
SECTION 6. Waiver; Remedies.
The observance of any term of this Agreement may be waived (either
generally or in a particular instance and either retroactively or
prospectively) by the party entitled to enforce such term, but any such waiver
shall be effective only if in a writing signed by the party against which such
waiver is to be asserted. Except as otherwise provided herein, no failure or
delay of any party in exercising any power or right under this Agreement shall
operate as a waiver thereof, nor shall any single or partial exercise of any
such right or power, or any abandonment or discontinuance of steps to enforce
such right or power, preclude any other or further exercise thereof or the
exercise of any other right or power.
SECTION 7. Assignment.
Except with respect to an assignment in connection with a transfer (in a
single transaction or series of related transactions) of all or a Substantial
Portion of the cable television system assets (in the case of Comcast Parent)
or long distance telecommunications business assets (in the case of Sprint
Parent) owned by Comcast Parent or Sprint Parent, respectively, directly or
through Controlled Affiliates immediately prior to the transfer (or the first
transfer of the series) (a "Permitted Transaction") to (i) the transferee of
such assets or (ii) the Parent of such transferee, this Agreement shall not be
assignable without the prior written consent of the other party. This
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and permitted assigns, and shall be binding
upon the transferee of such party in a Permitted Transaction (which transferee
the applicable transferor shall cause to agree in writing to be so bound in
connection with such Permitted Transaction). Nothing in this Agreement,
whether express or implied, shall be construed to give any Person other than
the parties hereto and their respective successors and permitted assigns any
legal or equitable right, remedy or claim under or in respect of this
Agreement.
SECTION 8. Severability.
Every provision of this Agreement is intended to be severable. If any
term or provision hereof is illegal, invalid or unenforceable for any reason
whatsoever, that term or provision will be enforced to the maximum extent
permissible and such illegality, invalidity or unenforceability shall not
affect the validity or legality of the remainder of this Agreement.
SECTION 9. Governing Law.
The internal laws of the State of Delaware (without regard to principles
of conflict of law) shall govern the validity of this Agreement, the
construction of its terms, and the interpretation of the rights and duties of
the parties.
SECTION 10. Waiver of Jury Trial.
Sprint Parent and Comcast Parent each irrevocably waives to the extent
permitted by law all rights to trial by jury in any action, proceeding or
counterclaim arising out of or relating to this Agreement.
SECTION 11. Notices.
Any notice, payment, demand or communication required or permitted to be
given by any party by any provision of this Agreement shall be in writing and
mailed (certified or registered mail, postage prepaid, return receipt
requested) or sent by hand or overnight courier, or by facsimile (with
acknowledgment received), charges prepaid and addressed as follows, or to such
other address or number as such party may from time to time specify by notice
to the other party:
(a) If to Comcast Parent, to:
Comcast Corporation
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000-0000
Telecopy No.: (000) 000-0000
Attn: General Counsel
with copies to:
Xxxxx Xxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Telecopy No.: (000) 000-0000
Attn: Xxxxxx X. Xxxxxx, Esq.
(b) If to Sprint Parent, to:
Sprint Corporation
0000 Xxxxxxx Xxxxxxx Xxxxxxx
Xxxxxxxx, XX 00000
Telecopy No.: (000) 000-0000
Attn: Chief Financial Officer
with copies to:
Sprint Spectrum, L.P.
0000 Xxxxxxx Xxxxxxx Xxxxxxx
Xxxxxxxx, XX 00000
Telecopy No.: (000) 000-0000
Attn: Corporate Secretary
King & Spalding
000 Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000-0000
Telecopy No.: (000) 000-0000
Attn: Xxxxx X. Xxxxxxxxx, Esq.
Any party may from time to time specify a different address by notice to
the other parties. All notices and other communications given to a Person in
accordance with the provisions of this Agreement shall be deemed to have been
given and received (i) four (4) Business Days after the same are sent by
certified or registered mail, postage prepaid, return receipt requested, (ii)
when delivered by hand or transmitted by facsimile (with acknowledgment
received and, in the case of a facsimile only, a copy of such notice is sent
no later than the next Business Day by a reliable overnight courier service,
with acknowledgment of receipt), or (iii) one (1) Business Day after the same
are sent by a reliable overnight courier service, with acknowledgment of
receipt.
SECTION 12. Entire Agreement.
The provisions of this Agreement set forth the entire agreement and
understanding between the parties as to the subject matter hereof and
supersede all prior agreements, oral or written, and other communications
between the parties relating to the subject matter hereof.
SECTION 13. Term.
This Agreement and the rights and obligations of the parties hereunder
will terminate on January 31, 2001, provided that this Agreement and the
rights and obligations of the parties shall earlier terminate on the first to
occur of (i) January 31, 1999 if at that date Local Telephony Services are
being offered under the Sprint Brand by Comcast Parent and its Controlled
Affiliates (or Local JVs) through facilities of its Cable Subsidiaries passing
fewer than 25% of the aggregate number of
Households Passed by facilities of Comcast Parent and its Cable Subsidiaries
that have been upgraded for, and through which Comcast Parent and its
Controlled Affiliates (or Local JVs) are providing, Local Telephony Services,
(ii) such date as of which neither Comcast Parent nor any of its Controlled
Affiliates is a partner in MajorCo and (iii) such date as of which neither
Sprint Parent nor any of its Controlled Affiliates is a partner in MajorCo.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the date first above written.
COMCAST CORPORATION
By:__________________________________
Name:
Title:
SPRINT CORPORATION
By:__________________________________
Name:
Title:
SCHEDULE 1
Certain Defined Terms
I. Local Telephony Services
"Local Telephony Services" shall mean wireline "local exchange, access,
and transport services" offered or provided to residences in the Territory
that are functionally equivalent (from the customer's perspective) to
circuit-based offerings (e.g., a POTS access line that provides to the user
a circuit of equal and fixed bi-directional transmission capacity). Local
Telephony Services may utilize an underlying network technology that is not
circuit-based as long as the offering to the residence is (from the customer's
perspective) functionally equivalent to one of the "local exchange, access and
transport" services listed below. Local Telephony Services shall not
include Advanced Data Services, the Non-Exclusive Services and the Excluded
Businesses.
Local Telephony Services shall include the provision and transport of
intra-LATA wireline calls, except for 75 Mile Plus Calls.
Local Telephony Services are not restricted by form (e.g., analog or
digital), method of origination (e.g., voice, data, telemetry, etc.), or the
content transmitted by the customer.
The "local exchange, access, and transport" services are:
1. Local dial tone service for residential customers (i.e.,
basic service, additional lines, EAS, ISDN, etc.);
2. Ancillary basic service features such as tone dialing,
custom calling, CLASS, Centrex, and functionality for number
portability;
3. Access for switched and dedicated intra-LATA and inter-LATA
service;
4. Private line services not interconnected with an inter-LATA
private line network (including back haul for wireless
services); and
5. "Video telephony", which shall mean circuit switched two-way
communications services that are not Excluded Businesses
providing:
a. point-to-point two-way audio/video connectivity;
b. point-to-point one-way video connectivity and two way
audio connectivity;
c. multi-point to multi-point audio/video connectivity;
or
d. access for intra-LATA and inter-LATA video telephony.
II. Long Distance Telephony Services
"Long Distance Telephony Services" shall mean (other than as provided in
Sections I and V of this Schedule 1) (a) wireline inter-LATA service to
residences in the Territory, except for that subject to local exchange carrier
inter-LATA waivers or (b) 75 Mile Plus Calls to residences in the Territory,
but in each case excluding any of such services that are also Advanced Data
Services or services described in clauses (2) or (3) of the definition of
Excluded Business in Section VI below.
III. Advanced Data Services
"Advanced Data Services" shall mean wireline services offered or
provided to residences in the Territory that are functionally equivalent to
asynchronous offerings (e.g., an internet access service with instantaneously
varying data rates and equal or unequal bi-directional transmission capacity).
Advanced Data Services shall not include the Local Telephony Services, the
Non- Exclusive Services, and those Excluded Businesses referred to in clauses
(1), (2) and (3) of the definition of Excluded Businesses in Section VI of
this Schedule 1.
IV. Entertainment Services
"Entertainment Services" means the delivery via a distribution system
(whether wired or wireless, and whether terrestrial or satellite-based) of
entertainment and, except to the extent contemplated under Non-Exclusive
Services, other content-based services, which services in either such case are
competitive with services typically provided by cable television companies to
their customers at the date of this Agreement. The provision of Internet
access services, incidental audio/video content related to the provision of
Internet access services (e.g. browsers, navigators, logos, customer service,
sales) and on-line hosting services shall not be deemed to be Entertainment
Services.
V. Non-Exclusive Services
"Non-Exclusive Services" means each of the following:
1. Incidental services to other Local Telephony Services,
including billing services and the installation,
maintenance, repair, sale or lease of customer premises
equipment or customer controlled equipment.
2. 500 Services.
3. Meeting services, such as video or other teleconferencing in
which the provider does not create nor resell the content of
such service.
4. Server-based content services customarily provided by local
exchange telephone companies, consisting of directory
assistance, operator service, time, temperature and similar
information services that are voice only and TDD relay.
5. Incidental data services to support signaling, billing and
system diagnostics and management for audio/video
connectivity.
6. Incidental audio/video content (e.g., logos, customer
service, sales), that are directly related to the provision
of video telephony.
7. Enhanced services such as voice mail, e-mail, facsimile
store and forward.
8. Video telephony enhanced services, such as video mail, store
and forward, and customer service, but excluding any such
enhanced service that is an Excluded Business.
VI. Excluded Business
"Excluded Business" means each of the following:
1. Long Distance Telephony Services.
2. The provision of entertainment and, except to the limited
extent contemplated under Non-Exclusive Services, other
content-based services.
3. The provision or transport of wireline services using
unidirectional transmission capacity.
4. The provision or transport of wireline services using
unequal bi-directional transmission capacity.
VII. Definitions.
As used in this Schedule:
1. The term "LATA" means a Local Access and Transport Area
established pursuant to the criteria set forth in Section
4(g) of the MFJ, as approved in United States v. Western
Electric Company, Inc., et. al., 569 F. Supp. 990 (D.D.C.
1983), and as amended by subsequent orders, regardless of
whether the LATA boundaries continue to be applied in future
governmental regulation of the wireline telecommunications
industry. In the event of the cessation of use of LATA
boundaries by a telecommunications governmental regulation
or court order, then the LATA boundaries in effect at the
time of cessation of such use shall be deemed to be the LATA
boundaries for purposes of this Agreement.
2. The term "Rate Center" means a point within a geographic
area designated by agreement of Comcast Parent and Sprint
Parent as the Rate Center and shall be used for measuring
distances to and from such geographic area. Each geographic
area shall have one Rate Center. The Rate Center shall be
near the geographic center of the geographic area.
3. The term "75 Mile Plus Calls" means wireline calls
between end users whose Rate Centers are greater than 75
miles apart.
4. The term "residences" will have its customary meaning unless
and until the scope of Teleport's business is confined by
agreement of its owners so as to exclude (or make
non-exclusive) serving "small business customers", in which
event the term "residences" will also include "small
business customers". The term "small business customer" for
this purpose means a non-residential customer having five or
fewer Access Lines. The term "Access Line" means a
voice-grade message telephone line (DS-0 equivalent) that
can originate or terminate telecommunications services,
which need not have a separate telephone number, and is
interconnected with the public switched telephone network;
provided, that an ISDN BRI shall count as one Access Line.
SCHEDULE 2
Specified Markets
Comcast: Detroit, Michigan
Fort Lauderdale, Florida
Orange County, California
