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EXHIBIT 99.3
PARENTS AGREEMENT
This PARENTS AGREEMENT (the "Agreement") is entered into as of the
31st day of January, 1996, by TELE- COMMUNICATIONS, INC., a Delaware
corporation ("TCI Parent") and SPRINT CORPORATION, a Kansas corporation
("Sprint Parent").
WHEREAS, subsidiaries of each of TCI Parent, Sprint Parent, Xxx
Communications, Inc., a Delaware corporation ("Cox Parent"), and Comcast
Corporation, a Pennsylvania corporation ("Comcast Parent", and together with
Cox Parent and TCI 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 TCI 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 TCI Parent
that owns a cable television system and (ii) any Person that TCI 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.
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"Controlled Affiliate" means (i) when used with respect to TCI Parent,
each Subsidiary of TCI 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 TCI 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 TCI 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.
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"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", "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.
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SECTION 2. Undertakings.
(a) EXCLUSIVE PACKAGING/MARKETING.
(i) TCI 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 TCI 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
TCI Parent or its Controlled Affiliates in the Territory under the
Brand of TCI Parent, an Affiliate of TCI 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 TCI
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 TCI 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 TCI 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. TCI Parent and
Sprint Parent further agree to negotiate in good faith for TCI Parent
and its Cable Subsidiaries to act, and Sprint Parent agrees that TCI
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
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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 TCI 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 TCI 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
TCI Parent within 60 days after its receipt of notice from TCI Parent
pursuant to clause (y) above, not to terminate its agreement with an
RBOC or Satellite Carrier in the applicable market unless TCI 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 TCI
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 TCI 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) TCI Parent and its Controlled
Affiliates shall be released from their obligations under
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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.
(i) TCI Parent agrees that, during the Term: (x) if a
Cable Subsidiary of TCI 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, TCI Parent
will cause that Cable Subsidiary to make Rights of Use available to
Sprint Parent and its Controlled Affiliates (or, if TCI Parent or a
Controlled Affiliate of TCI 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 TCI 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, TCI Parent
will cause that Cable Subsidiary to make Rights of Use available to
Sprint Parent and its Controlled Affiliates (or, if TCI Parent or a
Controlled Affiliate of TCI 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.
TCI 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 TCI 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 TCI Parent
and
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(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 TCI Parent
in good faith to negotiate (and TCI 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 TCI Parent with a non-exclusive sales agency
agreement for such Local Telephony Services on terms and conditions no
less favorable to TCI 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 TCI 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 TCI 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 TCI 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, TCI Parent will notify Sprint Parent
whenever a Cable Subsidiary of TCI 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 TCI Parent notifies Sprint Parent
that a Cable Subsidiary of TCI 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. TCI 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).
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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, TCI 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 TCI 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 March 31, 1996. The obligations of TCI 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 TCI 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 TCI 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 TCI 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 TCI 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 TCI 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 TCI Parent for the Unresolved Market on terms and
conditions no less favorable to TCI 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 TCI Parent
promptly the terms of any agreements it may reach with Cox Parent or Comcast
Parent or their respective Controlled Affiliates regarding the provision of
Local Telephony Services in any market, and TCI Parent hereby consents to the
disclosure by Sprint Parent to Cox Parent and Comcast Parent of any agreement
that TCI 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 TCI Parent from rolling out Local
Telephony Services in any market or delay such rollout, subject to compliance
with Section 2 above.
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(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 TCI Parent in Sections 2 and 3 shall not
apply with respect to a Bulk Purchaser in circumstances where, in the
reasonable judgment of TCI Parent, a Cable Subsidiary or other Controlled
Affiliate of TCI 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 TCI Parent (whether facilities-based, as a reseller or agent or otherwise)
of television/telephony services and the needed service is not then available
to TCI Parent
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for inclusion in such a package from Sprint Parent or its Affiliates on
competitive economic terms. The covenants of TCI 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 TCI 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 TCI 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 TCI 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 TCI 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) TCI Parent's obligations under this Agreement with respect to
any Person that becomes a Cable Subsidiary or Controlled Affiliate of TCI
Parent after the date hereof and any cable television system or facilities
acquired by TCI Parent or a Cable Subsidiary after the date hereof shall be
subject to any contrary provisions of any agreements with Persons (other than
TCI Parent or a Controlled Affiliate of TCI 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.
SECTION 5. Consent to Jurisdiction.
(a) Each of Sprint Parent and TCI Parent hereby irrevocably and
unconditionally submits,
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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 TCI 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 TCI 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 TCI 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 TCI Parent) or
long distance telecommunications business assets (in the case of Sprint Parent)
owned by TCI 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,
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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 TCI 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 TCI Parent, to:
Tele-Communications, Inc.
0000 XXX Xxxxxxx
Xxxxxxxxx, XX 00000
Telecopy No.: (000) 000-0000
Attn: Executive Vice President
and Chief Operating Officer
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with copies to:
TCI Network Services
0000 XXX Xxxxxxx
Xxxxxxxxx, XX 00000
Telecopy No.: (000) 000-0000
Attn: President
Xxxxx & Xxxxx, L.L.P.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Telecopy No.: (000) 000-0000
Attn: Xxxxxxxxx Xxxxxxxxx, 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
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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 TCI 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 TCI Parent and its Cable
Subsidiaries that have been upgraded for, and through which TCI Parent and its
Controlled Affiliates (or Local JVs) are providing, Local Telephony Services,
(ii) such date as of which neither TCI 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.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered as of the date first above written.
TELE-COMMUNICATIONS, INC.
By:
----------------------------------
Name:
Title:
SPRINT CORPORATION
By:
----------------------------------
Name:
Title:
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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
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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.
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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.
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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 TCI 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.
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